- Third quarter 2023 sales of $2.3 billion, up 8%, or 9%
constant currency(1) (cc)
- Third quarter 2023 diluted EPS of $0.41, up 78%, or up 97%
cc; core diluted EPS(2) of $0.66 up 32%, or 41% cc
- Generated $937 million of cash from operating activities and
$592 million of free cash flow(3) in the first nine months of
2023
Ad Hoc Announcement Pursuant to Art. 53 LR
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported
its financial results for the three and nine months ended September
30, 2023. For the third quarter of 2023, sales were $2.3 billion,
an increase of 8% on a reported basis and 9% on a constant currency
basis(1), as compared to the same quarter of the previous year.
Alcon reported diluted earnings per share of $0.41 and core diluted
earnings per share(2) of $0.66 in the third quarter of 2023.
David J. Endicott, Alcon's Chief Executive Officer, said, "Our
strong third quarter results reflect the resilience of our business
and end markets, our focus on sustained earnings growth and the
commitment of our more than 25,000 associates to pioneering
innovations that improve sight."
Mr. Endicott continued, "As we approach the end of the year, we
are excited for the future. We are exiting the year from a position
of strength, we have a robust pipeline of innovative products and
are confident that we’ll continue to create long-term value for
doctors, their patients and all of our stakeholders."
Third quarter and nine months 2023 key figures
Three months ended September
30
Nine months ended September
30
2023
2022
2023
2022
Net sales ($ millions)
2,303
2,124
7,038
6,499
Operating margin (%)
12.7%
9.7%
11.8%
10.0%
Diluted earnings per share ($)
0.41
0.23
1.10
0.87
Core results (non-IFRS
measure)(2)
Core operating margin (%)
19.5%
17.2%
20.0%
18.7%
Core diluted earnings per share ($)
0.66
0.50
2.05
1.82
(1)
Constant currency is a non-IFRS measure. Refer to the
'Footnotes' section for additional information.
(2)
Core results, such as core operating income, core operating
margin and core diluted EPS, are non-IFRS measures. Refer to the
'Footnotes' section for additional information.
(3)
Free cash flow is a non-IFRS measure. Refer to the 'Footnotes'
section for additional information.
Third quarter 2023 results
Sales for the third quarter of 2023 were $2.3 billion, an
increase of 8% on a reported basis and 9% on a constant currency
basis, compared to the third quarter of 2022. Sales for the first
nine months of 2023 were $7.0 billion, an increase of 8% on a
reported basis and 11% on a constant currency basis, compared to
the first nine months of 2022.
The following table highlights net sales by segment for the
third quarter and first nine months of 2023:
Three months ended
September 30
Change %
Nine months ended
September 30
Change %
($ millions unless indicated
otherwise)
2023
2022
$
cc(1)
(non-IFRS measure)
2023
2022
$
cc(1)
(non-IFRS measure)
Surgical
Implantables
401
392
2
5
1,265
1,291
(2)
1
Consumables
661
618
7
7
2,031
1,863
9
11
Equipment/other
214
206
4
5
666
617
8
11
Total Surgical
1,276
1,216
5
6
3,962
3,771
5
8
Vision Care
Contact lenses
612
558
10
9
1,821
1,662
10
11
Ocular health
415
350
19
20
1,255
1,066
18
20
Total Vision Care
1,027
908
13
13
3,076
2,728
13
15
Net sales to third parties
2,303
2,124
8
9
7,038
6,499
8
11
Surgical growth in line with the market
For the third quarter of 2023, Surgical net sales, which include
implantables, consumables and equipment/other, were $1.3 billion,
an increase of 5% on a reported basis and 6% on a constant currency
basis versus the third quarter of 2022.
- Implantables net sales were $401 million, an increase of 2%,
led by demand for advanced technology intraocular lenses in
international markets, partially offset by unfavorable currency
impacts of 3%. Implantables net sales increased 5% constant
currency.
- Consumables net sales were $661 million, an increase of 7%,
reflecting demand for cataract and vitreoretinal consumables,
particularly in international markets, and price increases.
Consumables net sales increased 7% constant currency.
- Equipment/other net sales were $214 million, an increase of 4%,
reflecting growth compared with the strong prior year period.
Growth was driven by demand for cataract equipment in international
markets, partially offset by unfavorable currency impacts of 1%.
Equipment/other net sales increased 5% constant currency.
For the first nine months of 2023, Surgical net sales were $4.0
billion, an increase of 5%. Excluding unfavorable currency impacts
of 3%, Surgical net sales increased 8% constant currency.
Double-digit Vision Care growth reflects strength in contact
lenses and eye drops, including acquired products, and pricing
For the third quarter of 2023, Vision Care net sales, which
include contact lenses and ocular health, were $1.0 billion, an
increase of 13% on a reported and constant currency basis, versus
the third quarter of 2022. Vision Care net sales included 4
percentage points of contribution from products acquired in
2022.
- Contact lenses net sales were $612 million, an increase of 10%
driven by product innovation, including toric modalities of
Precision1, Total30 and Dailies Total1, outpacing declines in
legacy lenses. Growth also included price increases and favorable
currency impacts of 1%. Contact lenses net sales increased 9%
constant currency.
- Ocular health net sales were $415 million, an increase of 19%,
primarily driven by the portfolio of eye drops, including acquired
ophthalmic pharmaceutical products, and price increases. Growth was
partially offset by unfavorable currency impacts of 1%. Ocular
health net sales increased 20% constant currency, including 11
percentage points from products acquired in 2022.
For the first nine months of 2023, Vision Care net sales were
$3.1 billion, an increase of 13%, including 4 percentage points
from products acquired in 2022. Excluding unfavorable currency
impacts of 2%, Vision Care net sales increased 15% constant
currency.
Operating income
Third quarter 2023 operating income was $293 million and
operating margin was 12.7%. Operating margin increased 3.0
percentage points, reflecting improved underlying operating
leverage from higher sales and manufacturing efficiencies. The
current year period also included a $58 million benefit from the
release of a contingent liability related to a recent acquisition.
Operating margin benefits were partially offset by increased
inflationary impacts, increased investment in research and
development, including spend following the acquisition of Aerie
Pharmaceuticals, Inc. ("Aerie"), higher amortization for intangible
assets due to recent acquisitions and a negative 1.2 percentage
point impact from currency. Operating margin increased 4.2
percentage points on a constant currency basis.
Adjustments to arrive at core operating income(2) in the current
year period were $157 million, mainly due to $167 million of
amortization and $30 million of transformation costs, partially
offset by a $58 million benefit from the release of a contingent
liability related to a recent acquisition. Excluding these and
other adjustments, third quarter of 2023 core operating income was
$450 million.
Third quarter 2023 core operating margin was 19.5%. Core
operating margin increased 2.3 percentage points, reflecting
improved underlying operating leverage from higher sales and
manufacturing efficiencies. Core operating margin benefits were
partially offset by increased inflationary impacts, increased
investment in research and development, including spend following
the acquisition of Aerie, and a negative 1.2 percentage point
impact from currency. Core operating margin increased 3.5
percentage points on a constant currency basis.
Operating income for the first nine months of 2023 was $831
million and operating margin was 11.8%, which increased 1.8
percentage points on a reported basis and 3.1 percentage points on
a constant currency basis. Adjustments to arrive at core operating
income in the first nine months of 2023 were $578 million, mainly
due to $508 million of amortization and $82 million of
transformation costs, partially offset by a $58 million benefit
from the release of a contingent liability related to a recent
acquisition. Excluding these and other adjustments, core operating
income for the first nine months of 2023 was $1.4 billion.
Core operating margin for the first nine months of 2023 was
20.0%, an increase of 1.3 percentage points. Core operating margin
increased 2.5 percentage points on a constant currency basis.
Diluted earnings per share (EPS)
Third quarter 2023 diluted earnings per share of $0.41 increased
78%, or 97% on a constant currency basis. Core diluted earnings per
share of $0.66 increased 32%, or 41% on a constant currency
basis.
Diluted earnings per share for the first nine months of 2023
were $1.10, an increase of 26%, or 48% on a constant currency
basis. Core diluted earnings per share of $2.05 increased 13%, or
23% on a constant currency basis.
Balance sheet and cash flow highlights
The Company ended the first nine months of 2023 with a cash
position of $1.1 billion. Cash flows from operating activities for
the first nine months of 2023 totaled $937 million, compared to
$872 million in the prior year. The current year includes increased
collections associated with higher sales and lower associate
short-term incentive payments, which generally occur in the first
quarter. Cash outflows in the current year include higher payments
for revenue deductions, transformation and other operating
expenditures, including increased investment in R&D. The
current year cash outflows also include a legal settlement,
increased taxes paid due to the timing of payments, higher interest
payments associated with increased financial debt outstanding and a
negative impact of foreign currency rates on operating results.
Both periods were impacted by changes in net working capital.
Free cash flow(3), a non-IFRS measure, was an inflow of $592
million in the first nine months of 2023, compared to $475 million
in the previous year. The improvement in free cash flow was driven
by increased cash flows from operations and decreased purchases of
property, plant and equipment.
2023 outlook
The Company updated its 2023 outlook as per the table below.
2023 outlook(4)
as of
February
as of
May
as of
August
as of
November
Comments
vs. August
Net sales (USD)
$9.2 to $9.4 billion
$9.2 to $9.4 billion
$9.3 to $9.5 billion
$9.3 to $9.4 billion
Tightened range
Change vs. prior year (cc)(1)
(non-IFRS measure)
+6% to +8%
+7% to +9%
+9% to +11%
+10% to +11%
Tightened range
Core operating margin(2)
(non-IFRS measure)
19.5% to 20.5%
19.5% to 20.5%
19.5% to 20.5%
19.5% to 20.5%
Maintain
Interest expense and
Other financial income & expense
$260 to $280 million
$245 to $255 million
$230 to $240 million
$215 to $225 million
Decrease
Core effective tax rate(5)
(non-IFRS measure)
17% to 19%
17% to 19%
17% to 19%
17% to 19%
Maintain
Core diluted EPS(2)
(non-IFRS measure)
$2.55 to $2.65
$2.55 to $2.65
$2.70 to $2.80
$2.70 to $2.75
Tightened range
Change vs. prior year (cc)(1)
(non-IFRS measure)
+16% to +20%
+20% to +24%
+28% to +32%
+31% to 33%
Increase
This outlook assumes the following:
- Markets grow at or above historical averages for the year;
- Exchange rates as of the end of October 2023 prevail through
year-end;
- Inflation and supply chain challenges continue;
- Approximately 497 million weighted-averaged diluted
shares.
(4)
The forward-looking guidance included in
this press release cannot be reconciled to the comparable IFRS
measures without unreasonable effort, because we are not able to
predict with reasonable certainty the ultimate amount or nature of
exceptional items in the fiscal year. Refer to the 'Footnotes'
section for additional information.
(5)
Core effective tax rate, a non-IFRS
measure, is the applicable annual tax rate on core taxable income.
Refer to the 'Footnotes' section for additional information.
Webcast and Conference Call Instructions
The Company will host a conference call on November 15, 2023, at
2:00 p.m. Central European Time / 8:00 a.m. Eastern Time to discuss
its third quarter 2023 earnings results. The webcast can be
accessed online through Alcon's Investor Relations website,
investor.alcon.com. Listeners should log on approximately 10
minutes in advance. A replay will be available online within 24
hours after the event.
The Company's interim financial report and supplemental
presentation materials can be found online through Alcon's Investor
Relations website, or by clicking on the link:
https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2023/Alcons-Third-Quarter-2023-Earnings-Conference-Call-2023-z0vz8dGRxM/default.aspx
Footnotes (pages 1-5)
(1)
Constant currency (cc) is a non-IFRS
measure. Growth in constant currency (cc) is calculated by
translating the current year’s foreign currency items into US
dollars using average exchange rates from the historical
comparative period and comparing them to the values from the
historical comparative period in US dollars. An explanation of
non-IFRS measures can be found in the 'Non-IFRS measures as defined
by the Company' section.
(2)
Core results, such as core operating
income, core operating margin and core EPS, are non-IFRS measures.
For additional information, including a reconciliation of such core
results to the most directly comparable measures presented in
accordance with IFRS, see the explanation of non-IFRS measures and
reconciliation tables in the 'Non-IFRS measures as defined by the
Company' and 'Financial tables' sections.
(3)
Free cash flow is a non-IFRS measure. For
additional information regarding free cash flow, see the
explanation of non-IFRS measures and reconciliation tables in the
'Non-IFRS measures as defined by the Company' and 'Financial
tables' sections.
(4)
The forward-looking guidance included in
this press release cannot be reconciled to the comparable IFRS
measures without unreasonable efforts, because we are not able to
predict with reasonable certainty the ultimate amount or nature of
exceptional items in the fiscal year. Refer to the section
'Non-IFRS measures as defined by the Company' for more
information.
(5)
Core effective tax rate, a non-IFRS
measure, is the applicable annual tax rate on core taxable income.
For additional information, see the explanation regarding
reconciliation of forward-looking guidance in the 'Non-IFRS
measures as defined by the Company' section.
Cautionary Note Regarding Forward-Looking Statements
This press release contains, and our officers and
representatives may from time to time make, certain
“forward-looking statements” within the meaning of the safe harbor
provisions of the US Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by words such as
“anticipate,” “intend,” “commitment,” “look forward,” “maintain,”
“plan,” “goal,” “seek,” “target,” “assume,” “believe,” “project,”
“estimate,” “expect,” “strategy,” “future,” “likely,” “may,”
“should,” “will” and similar references to future periods. Examples
of forward-looking statements include, among others, statements we
make regarding our liquidity, revenue, gross margin, operating
margin, effective tax rate, foreign currency exchange movements,
earnings per share, our plans and decisions relating to various
capital expenditures, capital allocation priorities and other
discretionary items such as our transformation program, market
growth assumptions, our social impact and sustainability plans,
targets, goals and expectations, and generally, our expectations
concerning our future performance.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties and risks that
are difficult to predict such as: cybersecurity breaches or other
disruptions of our information technology systems; compliance with
data privacy, identity protection and information security laws;
our ability to comply with the US Foreign Corrupt Practices Act of
1977 and other applicable anti-corruption laws, particularly given
that we have entered into a three-year Deferred Prosecution
Agreement with the US Department of Justice; the impact of a
disruption in our global supply chain or important facilities,
including our reliance on single source suppliers; supply
constraints and increases in the cost of energy; our ability to
forecast sales demand and manage our inventory levels and the
changing buying patterns of our customers; our ability to manage
environmental, social and governance matters to the satisfaction of
our many stakeholders, some of which may have competing interests;
our success in completing and integrating strategic acquisitions;
the success of our research and development efforts, including our
ability to innovate to compete effectively; global and regional
economic, financial, legal, tax, political and social change; our
ability to comply with all laws to which we may be subject; pricing
pressure from changes in third party payor coverage and
reimbursement methodologies; our ability to properly educate and
train healthcare providers on our products; our reliance on
outsourcing key business functions; our ability to attract and
retain qualified personnel; the impact of unauthorized importation
of our products from countries with lower prices to countries with
higher prices; the ability to obtain regulatory clearance and
approval of our products as well as compliance with any
post-approval obligations, including quality control of our
manufacturing; our ability to protect our intellectual property;
our ability to service our debt obligations; the need for
additional financing through the issuance of debt or equity; the
effects of litigation, including product liability lawsuits and
governmental investigations; effect of product recalls or voluntary
market withdrawals; the accuracy of our accounting estimates and
assumptions, including pension and other post-employment benefit
plan obligations and the carrying value of intangible assets;
legislative, tax and regulatory reform; the impact of being listed
on two stock exchanges; the ability to declare and pay dividends;
the different rights afforded to our shareholders as a Swiss
corporation compared to a US corporation; and the effect of
maintaining or losing our foreign private issuer status under U.S.
securities laws.
Additional factors are discussed in our filings with the United
States Securities and Exchange Commission, including our Form 20-F.
Should one or more of these uncertainties or risks materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those anticipated. Therefore, you should not
rely on any of these forward-looking statements. Forward-looking
statements in this press release speak only as of the date of its
filing, and we assume no obligation to update forward-looking
statements as a result of new information, future events or
otherwise.
Intellectual Property
This report may contain references to our proprietary
intellectual property. All product names appearing in italics or
ALL CAPS are trademarks owned by or licensed to Alcon Inc. Product
names identified by a "®" or a "™" are trademarks that are not
owned by or licensed to Alcon or its subsidiaries and are the
property of their respective owners.
Non-IFRS measures as defined by the Company
Alcon uses certain non-IFRS metrics when measuring performance,
including when measuring current period results against prior
periods, including core results, percentage changes measured in
constant currency and free cash flow.
Because of their non-standardized definitions, the non-IFRS
measures (unlike IFRS measures) may not be comparable to the
calculation of similar measures of other companies. These
supplemental non-IFRS measures are presented solely to permit
investors to more fully understand how Alcon management assesses
underlying performance. These supplemental non-IFRS measures are
not, and should not be viewed as, a substitute for IFRS
measures.
Core results
Alcon core results, including core operating income and core net
income, exclude all amortization and impairment charges of
intangible assets, excluding software, net gains and losses on fund
investments and equity securities valued at fair value through
profit and loss ("FVPL"), fair value adjustments of financial
assets in the form of options to acquire a company carried at FVPL,
obligations related to product recalls, and certain acquisition
related items. The following items that exceed a threshold of $10
million and are deemed exceptional are also excluded from core
results: integration and divestment related income and expenses,
divestment gains and losses, restructuring charges/releases and
related items, legal related items, gains/losses on early
extinguishment of debt or debt modifications, past service costs
for post-employment benefit plans, impairments of property, plant
and equipment and software, as well as income and expense items
that management deems exceptional and that are or are expected to
accumulate within the year to be over a $10 million threshold.
Taxes on the adjustments between IFRS and core results take into
account, for each individual item included in the adjustment, the
tax rate that will finally be applicable to the item based on the
jurisdiction where the adjustment will finally have a tax impact.
Generally, this results in amortization and impairment of
intangible assets and acquisition-related restructuring and
integration items having a full tax impact. There is usually a tax
impact on other items, although this is not always the case for
items arising from legal settlements in certain jurisdictions.
Alcon believes that investor understanding of its performance is
enhanced by disclosing core measures of performance because, since
they exclude items that can vary significantly from period to
period, the core measures enable a helpful comparison of business
performance across periods. For this same reason, Alcon uses these
core measures in addition to IFRS and other measures as important
factors in assessing its performance.
A limitation of the core measures is that they provide a view of
Alcon operations without including all events during a period, such
as the effects of an acquisition, divestment, or
amortization/impairments of purchased intangible assets and
restructurings.
Constant currency
Changes in the relative values of non-US currencies to the US
dollar can affect Alcon's financial results and financial position.
To provide additional information that may be useful to investors,
including changes in sales volume, we present information about
changes in our net sales and various values relating to operating
and net income that are adjusted for such foreign currency
effects.
Constant currency calculations have the goal of eliminating two
exchange rate effects so that an estimate can be made of underlying
changes in the Consolidated Income Statement excluding:
- the impact of translating the income statements of consolidated
entities from their non-US dollar functional currencies to the US
dollar; and
- the impact of exchange rate movements on the major transactions
of consolidated entities performed in currencies other than their
functional currency.
Alcon calculates constant currency measures by translating the
current year's foreign currency values for sales and other income
statement items into US dollars, using the average exchange rates
from the historical comparative period and comparing them to the
values from the historical comparative period in US dollars.
Free cash flow
Alcon defines free cash flow as net cash flows from operating
activities less cash flow associated with the purchase or sale of
property, plant and equipment. Free cash flow is presented as
additional information because Alcon management believes it is a
useful supplemental indicator of Alcon's ability to operate without
reliance on additional borrowing or use of existing cash. Free cash
flow is not intended to be a substitute measure for net cash flows
from operating activities as determined under IFRS.
Growth rate and margin
calculations
For ease of understanding, Alcon uses a sign convention for its
growth rates such that a reduction in operating expenses or losses
compared to the prior year is shown as a positive growth.
Gross margins, operating income/(loss) margins and core
operating income margins are calculated based upon net sales to
third parties unless otherwise noted.
Reconciliation of guidance for
forward-looking non-IFRS measures
The forward-looking guidance included in this press release
cannot be reconciled to the comparable IFRS measures without
unreasonable efforts, because we are not able to predict with
reasonable certainty the ultimate amount or nature of exceptional
items in the fiscal year. These items are uncertain, depend on many
factors and could have a material impact on our IFRS results for
the guidance period.
Financial tables
Net sales by region
Three months ended September
30
Nine months ended September
30
($ millions unless indicated
otherwise)
2023
2022
2023
2022
United States
1,062
46%
979
46%
3,245
46%
2,908
45%
International
1,241
54%
1,145
54%
3,793
54%
3,591
55%
Net sales to third parties
2,303
100%
2,124
100%
7,038
100%
6,499
100%
Consolidated Income Statement (unaudited)
Three months ended September
30
Nine months ended September
30
($ millions except earnings per share)
2023
2022
2023
2022
Net sales to third parties
2,303
2,124
7,038
6,499
Other revenues
26
16
65
47
Net sales and other revenues
2,329
2,140
7,103
6,546
Cost of net sales
(1,022)
(958)
(3,092)
(2,924)
Cost of other revenues
(18)
(16)
(54)
(44)
Gross profit
1,289
1,166
3,957
3,578
Selling, general & administration
(798)
(762)
(2,415)
(2,306)
Research & development
(201)
(159)
(620)
(506)
Other income
64
5
74
17
Other expense
(61)
(45)
(165)
(132)
Operating income
293
205
831
651
Interest expense
(47)
(34)
(142)
(94)
Other financial income & expense
(8)
(24)
(25)
(63)
Income before taxes
238
147
664
494
Taxes
(34)
(31)
(117)
(62)
Net income
204
116
547
432
Earnings per share ($)
Basic
0.41
0.24
1.11
0.88
Diluted
0.41
0.23
1.10
0.87
Weighted average number of shares
outstanding (millions)
Basic
493.2
491.7
492.9
491.4
Diluted
496.3
494.7
496.3
494.3
Balance sheet highlights
($ millions)
September 30, 2023
December 31, 2022
Cash and cash equivalents
1,051
980
Current financial debts
131
107
Non-current financial debts
4,568
4,541
Free cash flow (non-IFRS measure)
The following is a summary of free cash flow for the nine months
ended September 30, 2023 and 2022, together with a reconciliation
to net cash flows from operating activities, the most directly
comparable IFRS measure:
Nine months ended September
30
($ millions)
2023
2022
Net cash flows from operating
activities
937
872
Purchase of property, plant &
equipment
(345)
(397)
Free cash flow
592
475
Reconciliation of IFRS results to core results (non-IFRS
measure)
Three months ended September 30, 2023
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Transformation
costs(3)
Other items(5)
Core results (non- IFRS
measure)
Gross profit
1,289
166
—
4
1,459
Operating income
293
167
30
(40)
450
Income before taxes
238
167
30
(40)
395
Taxes(6)
(34)
(30)
(5)
1
(68)
Net income
204
137
25
(39)
327
Basic earnings per share ($)
0.41
0.66
Diluted earnings per share ($)
0.41
0.66
Basic - weighted average shares
outstanding (millions)(7)
493.2
493.2
Diluted - weighted average shares
outstanding (millions)(7)
496.3
496.3
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Three months ended September 30, 2022
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Transformation
costs(3)
Other items(5)
Core results (non- IFRS
measure)
Gross profit
1,166
142
—
2
1,310
Operating income
205
145
17
(2)
365
Income before taxes
147
145
17
(2)
307
Taxes(6)
(31)
(24)
(2)
(2)
(59)
Net income
116
121
15
(4)
248
Basic earnings per share ($)
0.24
0.50
Diluted earnings per share ($)
0.23
0.50
Basic - weighted average shares
outstanding (millions)(7)
491.7
491.7
Diluted - weighted average shares
outstanding (millions)(7)
494.7
494.7
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Nine months ended September 30, 2023
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Transformation
costs(3)
Other
items(5)
Core results (non-IFRS
measure)
Gross profit
3,957
499
—
13
4,469
Operating income
831
508
82
(12)
1,409
Income before taxes
664
508
82
(12)
1,242
Taxes(6)
(117)
(91)
(14)
(5)
(227)
Net income
547
417
68
(17)
1,015
Basic earnings per share ($)
1.11
2.06
Diluted earnings per share ($)
1.10
2.05
Basic - weighted average shares
outstanding (millions)(7)
492.9
492.9
Diluted - weighted average shares
outstanding (millions)(7)
496.3
496.3
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Nine months ended September 30, 2022
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Transformation
costs(3)
Legal items(4)
Other items(5)
Core results (non-IFRS
measure)
Gross profit
3,578
423
59
—
—
(1)
4,059
Operating income
651
437
61
41
20
8
1,218
Income before taxes
494
437
61
41
20
8
1,061
Taxes(6)
(62)
(73)
(14)
(6)
(5)
(2)
(162)
Net income
432
364
47
35
15
6
899
Basic earnings per share ($)
0.88
1.83
Diluted earnings per share ($)
0.87
1.82
Basic - weighted average shares
outstanding (millions)(7)
491.4
491.4
Diluted - weighted average shares
outstanding (millions)(7)
494.3
494.3
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results (non-IFRS measure)'
tables.
Explanatory footnotes to IFRS to core reconciliation
tables
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Includes impairment charges related to
intangible assets.
(3)
Transformation costs, primarily related to
restructuring and third party consulting fees, for the multi-year
transformation program.
(4)
Includes a provision for a legal
settlement.
(5)
For the three months ended September 30,
2023, Gross profit includes the amortization of inventory fair
value adjustments related to a recent acquisition. Operating income
also includes the release of a contingent liability related to a
recent acquisition and fair value adjustments to contingent
consideration liabilities, partially offset by integration related
expenses for a recent acquisition, fair value adjustments of
financial assets and the amortization of option rights.
For the three months ended September 30,
2022, Gross profit includes the amortization of inventory fair
value adjustments related to a recent acquisition. Operating income
also includes fair value adjustments to contingent consideration
liabilities, partially offset by acquisition and integration
related expenses and fair value adjustments of financial
assets.
For the nine months ended September 30,
2023, Gross profit includes the amortization of inventory fair
value adjustments related to a recent acquisition. Operating income
also includes the release of a contingent liability related to a
recent acquisition and fair value adjustments to contingent
consideration liabilities, partially offset by integration related
expenses for a recent acquisition, fair value adjustments of
financial assets and the amortization of option rights.
For the nine months ended September 30,
2022, Gross profit includes fair value adjustments to contingent
consideration liabilities, partially offset by the amortization of
inventory fair value adjustments related to a recent acquisition.
Operating income also includes acquisition and integration related
expenses and fair value adjustments of financial assets, partially
offset by fair value adjustments to contingent consideration
liabilities.
(6)
For the three months ended September 30,
2023, tax associated with operating income core adjustments of $157
million totaled $34 million with an average tax rate of 21.7%.
For the three months ended September 30,
2022, tax associated with operating income core adjustments of $160
million totaled $28 million with an average tax rate of 17.5%.
For the nine months ended September 30,
2023, tax associated with operating income core adjustments of $578
million totaled $110 million with an average tax rate of 19.0%.
For the nine months ended September 30,
2022, total tax adjustments of $100 million include tax associated
with operating income core adjustments, partially offset by
discrete tax items. Tax associated with operating income core
adjustments of $567 million totaled $103 million with an average
tax rate of 18.2%.
(7)
Core basic earnings per share is
calculated using the weighted-average shares of common stock
outstanding during the period. Core diluted earnings per share also
contemplate dilutive shares associated with unvested equity-based
awards as described in Note 4 to the Condensed Consolidated Interim
Financial Statements.
About Alcon
Alcon helps people see brilliantly. As the global leader in eye
care with a heritage spanning over 75 years, we offer the broadest
portfolio of products to enhance sight and improve people’s lives.
Our Surgical and Vision Care products touch the lives of people in
over 140 countries each year living with conditions like cataracts,
glaucoma, retinal diseases and refractive errors. Our more than
25,000 associates are enhancing the quality of life through
innovative products, partnerships with Eye Care Professionals and
programs that advance access to quality eye care. Learn more at
www.alcon.com.
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Investor Relations Daniel
Cravens Allen Trang + 41 589 112 110 (Geneva) + 1 817 615 2789
(Fort Worth) investor.relations@alcon.com
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globalmedia.relations@alcon.com
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