Alcon AG Q4 FY2024 earnings call

• 2024 was a solid year with sales of $9.8 billion, 6% above market growth, core diluted EPS up 16% to $3.05, and record free cash flow of $1.6 billion. - Helped over 1 million patients in low- and middle-income countries and screened over 31,000 children for refractive error. - Realigned leadership and structure to focus on innovation, operational excellence, and speed to market. - Upcoming product pipeline includes UNITY VCS phacovit device, PanOptix Pro PCIOL, Voyager laser trabeculoplasty device, PRECISION7 contact lens, and advancements in ocular health with SYSTANE and prescription eye drops.

Surgical: Fourth quarter revenue was $1.4 billion, up 5% year-over-year. Implantable sales were $456 million, up 2% year-over-year. Consumables sales were up 7% to $738 million, driven by vitrect and cataract consumables. Equipment sales were $229 million, up 2% year-over-year. Vision Care: Fourth quarter sales were $1.1 billion, up 7%. Contact lens sales were up 11% to $638 million, driven by innovative lenses like toric and multifocal. Ocular Health: Fourth quarter sales were $416 million, up 2% year-over-year. Strong performance in eyedrops, partially offset by declines in contact lens care and pressure from a strategic transaction in China.

• Aggregate global eye care market expected to grow 4%-5% in 2025. - Full year revenue expected between $10.2 billion and $10.4 billion, 6%-8% constant currency growth. - Core operating margin expected between 21% and 22%. - Core diluted earnings guidance range $3.15 to $3.25 per share. - Board proposed dividend increase to CHF0.28 per share and authorized $750M share repurchase program over 3 years.

• Competitive pressures in the US ATIOL market affecting sales and margins. - Tariff risks and supply chain uncertainties impacting manufacturing and costs. - Market dynamics in various regions potentially affecting revenue growth and profitability.

Q: David Saxon from Needham & Company asked about US ATIOL business and competitive trialing.

A: David Endicott responded that the US ATIOL market had some growth but faced competitive trialing, with PanOptix Pro launch expected to help.

Q: Jeff Johnson from Baird inquired about US ATIOL market share and share trend.

A: David Endicott stated global share stability with China growth offsetting US share loss.

Q: Ryan Zimmerman from BTIG asked about price and volume in contact lens segment.

A: David Endicott said about a third of growth from price, with contact lens growth driven by mix, price, and unit growth.

Q: Larry Biegelsen from Wells Fargo asked about UNITY launch and equipment growth.

A: David Endicott said equipment business will be strong with UNITY launch in back half.

Q: Julien Ouaddour from Bank of America asked about China IOL market momentum.

A: David Endicott mentioned strong China IOL market momentum with Vivity driving growth.

Q: Patrick Wood from Morgan Stanley asked about IOL drug delivery.

A: David Endicott said Alcon has explored drug delivery technologies but is a fast follower.

Q: Brett Fishbin from Keybanc Capital Markets asked about PRECISION7 contact lens reception.

A: David Endicott said positive reception with optometrists liking the intuitive replacement schedule.

Q: Harry Shrives from Citi asked about margin guidance and US ATIOL competitive sampling.

A: Tim Stonesifer and David Endicott discussed margin expansion being back-half loaded and competitive sampling lasting with new product launches.

Q: Tom Stephan from Stifel asked about Hydrus business and OUS expansion.

A: David Endicott said Hydrus is effective and has OUS opportunities.

Q: Issie Kirby from Redburn Atlantic asked about dry eye prescriber base and contact lens margins.

A: David Endicott discussed expanding sales force for dry eye and contact lens capacity and margins.

Q: Kavya Deshpande from UBS asked about BELKIN Vision product ramp.

A: David Endicott talked about Voyager's potential and ramp challenges.

Q: Jack Reynolds-Clark from RBC Capital Markets asked about international ATIOL drivers.

A: David Endicott said China was a standout driver with other markets like Latin America and Japan also performing well.

Q: Chris Pasquale from Nephron Research LLC asked about contact lens market deceleration.

A: David Endicott said mid-single-digit growth expected with price moderation.

Q: Anthony Petrone from Mizuho Group asked about UNITY bundled deals and US dry eye TAM.

A: David Endicott discussed UNITY bundled deal potential and positive dry eye TAM with 512 differentiation.

Q: Michael Sarcone from Jefferies asked about tariff risk and supply chain.

A: David Endicott talked about supply chain risks and geographic/diversity of operations mitigating risks