-
First quarter sales of $1.8 billion, flat to last year; an
increase of 4% constant currency (cc)
-
Healthy momentum in Surgical business, with 2% growth and 7%
constant currency growth
-
Full year 2019 outlook of 3% to 5% constant currency net sales
growth and 17% to 18% core operating margin
GENEVA--(BUSINESS WIRE)--
Alcon (SIX:ALC) (NYSE:ALC), the global leader in eye care, today
reported selected financial results for the first quarter ending
March 31, 2019, and provided financial guidance for the current fiscal
year. For the first quarter of 2019, worldwide net sales were $1.8
billion, flat on a reported basis and an increase of 4 percent on a
constant currency basis1, as compared to the same quarter of
the previous year.
“The spin-off of Alcon marks a new chapter in our mission to enable more
patients to see brilliantly. Solid first quarter results give us
confidence in our ability to perform as an independent company and to
continue to execute on our key growth drivers,” said David Endicott,
Alcon’s Chief Executive Officer. “Our Surgical business performed well
in the quarter, with growth across all three categories. As we usher in
a new era for Alcon, our dedicated focus on delivering innovative
products and quality eye care to patients around the world will allow us
to create long-term shareholder value.”
Mr. Endicott continued, “We continue to see steady progress from product
flow within our surgical business, as evidenced by the international
success of PanOptix. The expansion of our manufacturing capacity is
underway and will support the ramp up of new product lines, led by
Precision 1, which was recently approved by the US Food and Drug
Administration.”
1Constant currencies (cc) are 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 prior year and comparing them to prior year values in US dollars. An
explanation of non-IFRS measures can be found later in this press
release.
First Quarter 2019 Net Sales Results
Worldwide net sales for the first quarter of $1.8 billion were flat to
last year (up 4% cc) compared to the first quarter of 2018.
The following table highlights net sales by segment for the first
quarter of 2019:
|
|
|
Three months ended (unaudited)
|
|
|
|
Change in $
|
|
|
Change in
constant
currencies
|
($ millions unless indicated otherwise)
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implantables
|
|
|
$
|
285
|
|
|
$
|
279
|
|
|
|
2
|
%
|
|
|
8
|
%
|
Consumables
|
|
|
$
|
551
|
|
|
$
|
541
|
|
|
|
2
|
%
|
|
|
6
|
%
|
Equipment/other
|
|
|
$
|
164
|
|
|
$
|
157
|
|
|
|
4
|
%
|
|
|
9
|
%
|
Total Surgical
|
|
|
$
|
1,000
|
|
|
$
|
977
|
|
|
|
2
|
%
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact lenses
|
|
|
$
|
498
|
|
|
$
|
509
|
|
|
|
(2
|
)%
|
|
|
1
|
%
|
Ocular health
|
|
|
$
|
279
|
|
|
$
|
293
|
|
|
|
(5
|
)%
|
|
|
—
|
%
|
Total Vision care
|
|
|
$
|
777
|
|
|
$
|
802
|
|
|
|
(3
|
)%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales to third parties
|
|
|
$
|
1,777
|
|
|
$
|
1,779
|
|
|
|
—
|
%
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surgical
Surgical net sales, which include implantables, consumables and
equipment/other, of $1.0 billion increased 2% (up 7% cc) versus the
first quarter of 2018, driven by the strong momentum across all business
categories. Strong demand for Advanced Technology Intraocular Lenses
(AT-IOLs), pull-through of dedicated consumables for next generation
equipment, new procedural instruments and strong services revenue were
the primary drivers of growth in the first quarter.
Vision Care
Vision Care net sales, which include contact lenses and ocular health,
of $777 million decreased 3% (up 1% cc) versus the first quarter of
2018. Double-digit growth for Dailies Total1 and strong demand
for Systane Complete, were offset by declines in legacy
non-silicon hydrogel contact lenses and contact lens care.
Financial Performance
First quarter 2019 reported operating loss of $48 million, compared to
last year’s operating income of $73 million, was due to costs related to
spin readiness, legal, SAP implementation and research and development.
The decrease in first quarter 2019 core operating income2 of
$314 million compared to $342 million last year, was driven by costs
related to SAP implementation and higher research and development.
2019 Financial Outlook
Alcon expects the following outlook for full-year 2019:
-
Net sales growth of 3% to 5% on a constant currency basis
-
Core operating margin2 between 17% to 18%
-
Core effective tax rate3 between 17% to 19%
2 Core results are a non-IFRS measure. For additional
information, including a reconciliation for such core results to the
most directly comparable measures presented in accordance with IFRS, see
the explanation of non-IFRS measures and reconciliation tables later in
this press release.
3 Core effective tax rate, a non-IFRS measure, is the
applicable annual tax rate on core taxable income.
Webcast and Conference Call Instructions
The Company will host a conference call on Thursday, May 16, at 3:00
p.m. Central European Time / 8 a.m. Central Time to discuss its first
quarter 2019 trading update. 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.
Supplemental presentation materials to be used during the conference
call are available online through Alcon's Investor Relations website, https://investor.alcon.com/financials/quarterly-results,
at the beginning of the conference.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the United States 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,” “believe,”
“project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,”
“should,” “will” and similar references to future periods.
Forward-looking statements are neither historical facts nor assurances
of future performance. Instead, they are based only on Alcon’s current
beliefs, expectations and assumptions regarding the future of its
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 forward-looking statements are subject to various risks
and uncertainties facing Alcon, including: the commercial success of its
products and its ability to maintain and strengthen its position in its
markets; the success of its research and development efforts;
uncertainties regarding the success of Alcon’s separation and spin-off
from Novartis; pricing pressure from changes in third party payor
coverage and reimbursement methodologies; global economic, financial,
legal, tax, political, and social change; ongoing industry
consolidation; its ability to maintain relationships in the healthcare
industry; changes in inventory levels or buying patterns of its
customers; its reliance on sole or limited sources of supply; its
reliance on outsourcing key business functions; its ability to protect
its intellectual property; the impact on unauthorized importation of its
products from countries with lower prices to countries with higher
prices; its success in completing and integrating strategic
acquisitions; the effects of litigation, including product liability
lawsuits; its ability to comply with all laws to which it may be
subject; effect of product recalls or voluntary market withdrawals,
including CyPass; data breaches; the implementation of its enterprise
resource planning system; its ability to attract and retain qualified
personnel; the sufficiency of its insurance coverage; the accuracy of
its accounting estimates and assumptions, including pension plan
obligations and the carrying value of intangible assets; the ability to
obtain regulatory clearance and approval of its products as well as
compliance with any post-approval obligations; legislative and
regulatory reform; the ability of Alcon Pharmaceuticals Ltd. to comply
with its investment tax incentive agreement with the Swiss State
Secretariat for Economic Affairs in Switzerland and the Canton of
Fribourg, Switzerland; ability to service its debt obligations; the need
for additional financing; its ability to operate as a stand-alone
company; whether the transitional services Novartis has agreed to
provide Alcon are sufficient; the impact of the spin-off from Novartis
on Alcon’s shareholder base; the ability to declare and pay dividends;
and the effect of maintaining or losing its foreign private issuer
status under U.S. securities laws. Additional factors are discussed in
Alcon’s filings with the United States Securities and Exchange
Commission, including its 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 Alcon assumes no obligation to update
forward-looking statements as a result of new information, future events
or otherwise.
Non-IFRS measures as defined by the Company
Alcon uses certain non-IFRS metrics when measuring performance,
especially when measuring current period results against prior periods,
including core results and constant currencies.
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 non-IFRS measures are
presented solely to permit investors to more fully understand how Alcon
management assesses underlying performance. These 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, 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, impairments of property, plant and equipment
and financial assets, 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.
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 currencies
Changes in the relative values of non-U.S. currencies to the U.S. dollar
can affect Alcon financial results and financial position. To provide
additional information that may be useful to investors, including
changes in sales volume, we present information about 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 combined income statement excluding:
-
the impact of translating the income statements of combined entities
from their non-U.S. dollar functional currencies to the U.S. dollar;
and
-
the impact of exchange rate movements on the major transactions of
combined 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 U.S. dollars, using the average exchange rates from the prior
year and comparing them to the prior year values in U.S. dollars.
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 extraordinary 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.
Supplemental information:
First quarter net sales by region (unaudited)
|
|
|
Three months ended
|
($ millions unless indicated otherwise)
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
$
|
737
|
|
|
41
|
%
|
|
|
$
|
712
|
|
|
40
|
%
|
International
|
|
|
$
|
1,040
|
|
|
59
|
%
|
|
|
$
|
1,067
|
|
|
60
|
%
|
Net sales to third parties
|
|
|
$
|
1,777
|
|
|
100
|
%
|
|
|
$
|
1,779
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter key figures (unaudited)
|
|
|
Three months ended
|
|
|
Change in $
|
|
|
Change in
constant
currencies
(1)
|
($ millions unless indicated otherwise)
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales to third parties
|
|
|
$
|
1,777
|
|
|
|
$
|
1,779
|
|
|
|
—%
|
|
|
4%
|
Operating (loss)/income
|
|
|
$
|
(48
|
)
|
|
|
$
|
73
|
|
|
|
nm
|
|
|
nm
|
Operating margin (%)
|
|
|
|
(2.7
|
)%
|
|
|
|
4.1
|
%
|
|
|
|
|
|
|
Core operating income (1) |
|
|
$
|
314
|
|
|
|
$
|
342
|
|
|
|
(8)%
|
|
|
2%
|
Core operating margin (%) (1) |
|
|
|
17.7
|
%
|
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not meaningful
|
(1)
|
|
For additional information regarding the core results and constant
currencies presented in the above table, which are non-IFRS
measures, including a reconciliation for such core results to the
most directly comparable measures presented in accordance with IFRS,
see the explanation of non-IFRS measures and reconciliation tables.
|
|
|
|
Reconciliation of IFRS to Core results (unaudited)
|
|
|
Three months ended
|
($ millions)
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
IFRS Results - Operating (loss)/income
|
|
|
$
|
(48
|
)
|
|
|
$
|
73
|
Amortization of certain intangible assets(1) |
|
|
$
|
255
|
|
|
|
$
|
253
|
Legal items(2) |
|
|
$
|
32
|
|
|
|
$
|
9
|
Other items(3) |
|
|
$
|
75
|
|
|
|
$
|
7
|
Core Results - Operating income
|
|
|
$
|
314
|
|
|
|
$
|
342
|
(1)
|
|
Amortization of certain intangible assets: Includes recurring
amortization for all intangible assets other than software.
|
(2)
|
|
Legal items: Q1 2019 includes legal settlement costs and certain
external legal fees. Q1 2018 includes legal costs related to an
investigation.
|
(3)
|
|
Other items: Q1 2019 includes $88 million related to spin-off
readiness costs, amortization of option rights, and integration
related expenses for recent acquisitions and other items, partially
offset by $13 million related to the fair value adjustment of a
contingent consideration liability and fair value adjustment on a
financial asset. Q1 2018 includes $17 million related to option
rights and other items, partially offset by $10 million in fair
value adjustments on a financial asset.
|
|
|
|
2018 Condensed combined income statement information
|
|
|
|
|
|
Three months ended (unaudited)
|
($ millions)
|
|
|
2018
(1)
|
|
|
December 31, 2018
|
|
|
September 30, 2018
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
Net sales to third parties
|
|
|
$
|
7,149
|
|
|
|
$
|
1,789
|
|
|
|
$
|
1,762
|
|
|
|
$
|
1,819
|
|
|
|
$
|
1,779
|
|
Sales to Novartis Group
|
|
|
$
|
4
|
|
|
|
$
|
2
|
|
|
|
|
|
|
$
|
1
|
|
|
|
$
|
1
|
|
Net sales
|
|
|
$
|
7,153
|
|
|
|
$
|
1,791
|
|
|
|
$
|
1,762
|
|
|
|
$
|
1,820
|
|
|
|
$
|
1,780
|
|
Cost of goods sold
|
|
|
$
|
(3,961
|
)
|
|
|
$
|
(912
|
)
|
|
|
$
|
(1,194
|
)
|
|
|
$
|
(942
|
)
|
|
|
$
|
(913
|
)
|
Gross profit
|
|
|
$
|
3,192
|
|
|
|
$
|
879
|
|
|
|
$
|
568
|
|
|
|
$
|
878
|
|
|
|
$
|
867
|
|
Selling, general & administration
|
|
|
$
|
(2,801
|
)
|
|
|
$
|
(734
|
)
|
|
|
$
|
(692
|
)
|
|
|
$
|
(722
|
)
|
|
|
$
|
(653
|
)
|
Research & development
|
|
|
$
|
(587
|
)
|
|
|
$
|
(166
|
)
|
|
|
$
|
(132
|
)
|
|
|
$
|
(152
|
)
|
|
|
$
|
(137
|
)
|
Other income
|
|
|
$
|
47
|
|
|
|
$
|
(26
|
)
|
|
|
$
|
(8
|
)
|
|
|
$
|
62
|
|
|
|
$
|
19
|
|
Other expense
|
|
|
$
|
(99
|
)
|
|
|
$
|
(28
|
)
|
|
|
$
|
(20
|
)
|
|
|
$
|
(28
|
)
|
|
|
$
|
(23
|
)
|
Operating (loss)/income
|
|
|
$
|
(248
|
)
|
|
|
$
|
(75
|
)
|
|
|
$
|
(284
|
)
|
|
|
$
|
38
|
|
|
|
$
|
73
|
|
Interest expense
|
|
|
$
|
(24
|
)
|
|
|
$
|
(5
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(6
|
)
|
|
|
$
|
(6
|
)
|
Other financial income & expense
|
|
|
$
|
(28
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(7
|
)
|
|
|
$
|
(8
|
)
|
|
|
$
|
(6
|
)
|
(Loss)/income before taxes
|
|
|
$
|
(300
|
)
|
|
|
$
|
(87
|
)
|
|
|
$
|
(298
|
)
|
|
|
$
|
24
|
|
|
|
$
|
61
|
|
Taxes
|
|
|
$
|
73
|
|
|
|
$
|
14
|
|
|
|
$
|
91
|
|
|
|
$
|
(9
|
)
|
|
|
$
|
(23
|
)
|
Net (loss)/income
|
|
|
$
|
(227
|
)
|
|
|
$
|
(73
|
)
|
|
|
$
|
(207
|
)
|
|
|
$
|
15
|
|
|
|
$
|
38
|
|
(1)
|
|
Information in this column is derived from the audited financial
statements of Alcon Inc. as reported in Amendment No. 6 to the 2018
Alcon Inc. Form 20-F.
|
|
|
|
2018 quarterly core results (unaudited)
(1)
|
|
|
|
|
|
For the three months ended
|
($ millions unless indicated otherwise)
|
|
|
2018
(2)
|
|
|
December 31, 2018
|
|
|
September 30, 2018
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
Core gross profit
|
|
|
$
|
4,541
|
|
|
|
$
|
1,126
|
|
|
|
$
|
1,129
|
|
|
|
$
|
1,168
|
|
|
|
$
|
1,118
|
|
Core gross profit margin (%)
|
|
|
|
63.5
|
%
|
|
|
|
62.9
|
%
|
|
|
|
64.1
|
%
|
|
|
|
64.2
|
%
|
|
|
|
62.8
|
%
|
Core selling, general & administration
|
|
|
$
|
(2,786
|
)
|
|
|
$
|
(719
|
)
|
|
|
$
|
(692
|
)
|
|
|
$
|
(722
|
)
|
|
|
$
|
(653
|
)
|
Core research & development
|
|
|
$
|
(529
|
)
|
|
|
$
|
(144
|
)
|
|
|
$
|
(132
|
)
|
|
|
$
|
(131
|
)
|
|
|
$
|
(122
|
)
|
Core other income
|
|
|
$
|
24
|
|
|
|
$
|
(3
|
)
|
|
|
$
|
7
|
|
|
|
$
|
11
|
|
|
|
$
|
9
|
|
Core other expense
|
|
|
$
|
(38
|
)
|
|
|
$
|
(1
|
)
|
|
|
$
|
(13
|
)
|
|
|
$
|
(14
|
)
|
|
|
$
|
(10
|
)
|
Core operating income
|
|
|
$
|
1,212
|
|
|
|
$
|
259
|
|
|
|
$
|
299
|
|
|
|
$
|
312
|
|
|
|
$
|
342
|
|
Core operating income margin (%)
|
|
|
|
17.0
|
%
|
|
|
|
14.5
|
%
|
|
|
|
17.0
|
%
|
|
|
|
17.2
|
%
|
|
|
|
19.2
|
%
|
(1)
|
|
For additional information regarding the core results presented in
this table, which is a non-IFRS measure, 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.
|
(2)
|
|
Information in this column is derived from the Alcon Inc. core
results reported in Amendment No. 6 to the 2018 Alcon Inc. Form 20-F.
|
|
|
|
2018 Core non-operating income and expense (unaudited)
(1)
|
|
|
|
|
|
For the three months ended
|
($ millions)
|
|
|
2018
(2)
|
|
|
December 31, 2018
|
|
|
September 30, 2018
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
Core operating income
|
|
|
$
|
1,212
|
|
|
|
$
|
259
|
|
|
|
$
|
299
|
|
|
|
$
|
312
|
|
|
|
$
|
342
|
|
Core income before taxes
|
|
|
$
|
1,160
|
|
|
|
$
|
247
|
|
|
|
$
|
285
|
|
|
|
$
|
298
|
|
|
|
$
|
330
|
|
Core taxes
|
|
|
$
|
(186
|
)
|
|
|
$
|
(56
|
)
|
|
|
$
|
(41
|
)
|
|
|
$
|
(42
|
)
|
|
|
$
|
(47
|
)
|
Core net income
|
|
|
$
|
974
|
|
|
|
$
|
191
|
|
|
|
$
|
244
|
|
|
|
$
|
256
|
|
|
|
$
|
283
|
|
(1)
|
|
For additional information regarding the core results presented in
this table, which is a non-IFRS measure, 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.
|
(2)
|
|
Information in this column is derived from the Alcon Inc. core
results reported in Amendment No. 6 to the 2018 Alcon Inc. Form 20-F.
|
|
|
|
2018 Net sales by segment (unaudited)
|
|
|
|
|
|
For the three months ended
|
($ millions)
|
|
|
2018
(1)
|
|
|
December 31, 2018
|
|
|
September 30, 2018
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
Surgical
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implantables
|
|
|
$
|
1,136
|
|
|
|
$
|
290
|
|
|
$
|
269
|
|
|
$
|
298
|
|
|
$
|
279
|
Consumables
|
|
|
$
|
2,227
|
|
|
|
$
|
579
|
|
|
$
|
529
|
|
|
$
|
578
|
|
|
$
|
541
|
Equipment/other
|
|
|
$
|
636
|
|
|
|
$
|
158
|
|
|
$
|
167
|
|
|
$
|
154
|
|
|
$
|
157
|
Total Surgical
|
|
|
$
|
3,999
|
|
|
|
$
|
1,027
|
|
|
$
|
965
|
|
|
$
|
1,030
|
|
|
$
|
977
|
Vision Care
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact lenses
|
|
|
$
|
1,928
|
|
|
|
$
|
450
|
|
|
$
|
491
|
|
|
$
|
478
|
|
|
$
|
509
|
Ocular health
|
|
|
$
|
1,222
|
|
|
|
$
|
312
|
|
|
$
|
306
|
|
|
$
|
311
|
|
|
$
|
293
|
Total Vision Care
|
|
|
$
|
3,150
|
|
|
|
$
|
762
|
|
|
$
|
797
|
|
|
$
|
789
|
|
|
$
|
802
|
Net sales to third parties
|
|
|
$
|
7,149
|
|
|
|
$
|
1,789
|
|
|
$
|
1,762
|
|
|
$
|
1,819
|
|
|
$
|
1,779
|
(1)
|
|
Information in this column is derived from Alcon Inc. net sales by
segment reported in Amendment No. 6 to the 2018 Alcon Inc. Form 20-F.
|
|
|
|
2018 Net sales by region (unaudited)
(1)
|
|
|
|
|
|
For the three months ended
|
($ millions)
|
|
|
2018
(2)
|
|
|
December 31, 2018
|
|
|
September 30, 2018
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
United States
|
|
|
$
|
2,942
|
|
|
|
$
|
730
|
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
712
|
International
|
|
|
$
|
4,207
|
|
|
|
$
|
1,059
|
|
|
$
|
1,012
|
|
|
$
|
1,069
|
|
|
$
|
1,067
|
Net sales to third parties
|
|
|
$
|
7,149
|
|
|
|
$
|
1,789
|
|
|
$
|
1,762
|
|
|
$
|
1,819
|
|
|
$
|
1,779
|
(1)
|
|
Net sales by location of third-party customer.
|
(2)
|
|
Information in this column is derived from Alcon Inc. net sales by
region reported in Amendment No. 6 to the 2018 Alcon Inc. Form 20-F.
|
|
|
|
Reconciliation of IFRS results to Core results - Three months ended
December 31, 2018 (unaudited)
|
|
|
|
|
|
Amortization
of certain
intangible
assets
(1)
|
|
|
|
|
|
|
|
|
Legal
items
(4)
|
|
|
Other
items
(5)
|
|
|
|
($ millions)
|
|
|
IFRS
Results
|
|
|
|
|
Impairments
(2)
|
|
|
Restructuring
items
(3)
|
|
|
|
|
|
|
Core
Results
|
Gross profit
|
|
|
$
|
879
|
|
|
|
$
|
245
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2
|
|
|
$
|
1,126
|
|
Selling, general & administration
|
|
|
$
|
(734
|
)
|
|
|
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
$
|
13
|
|
|
$
|
(719
|
)
|
Research & development
|
|
|
$
|
(166
|
)
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
$
|
19
|
|
|
$
|
(144
|
)
|
Other income
|
|
|
$
|
(26
|
)
|
|
|
|
|
|
|
|
|
$
|
(2
|
)
|
|
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
(3
|
)
|
Other expense
|
|
|
$
|
(28
|
)
|
|
|
|
|
|
|
|
|
$
|
10
|
|
|
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
(1
|
)
|
Operating (loss)/income
|
|
|
$
|
(75
|
)
|
|
|
$
|
248
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
|
$
|
7
|
|
|
$
|
69
|
|
|
$
|
259
|
|
(Loss)/income before taxes
|
|
|
$
|
(87
|
)
|
|
|
$
|
248
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
|
$
|
7
|
|
|
$
|
69
|
|
|
$
|
247
|
|
Taxes(6) |
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(56
|
)
|
Net (loss)/income
|
|
|
$
|
(73
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
191
|
|
(1)
|
|
Amortization of certain intangible assets: Includes recurring
amortization for all intangible assets other than software.
|
(2)
|
|
Impairments: Includes an impairment charge related to an intangible
asset.
|
(3)
|
|
Restructuring items: Other income and Other expense include other
restructuring income and charges and related items. Certain amounts
previously reported under 'restructuring items' in Amendment 6 to
the Alcon Inc. Form 20-F have been reclassified to 'other items' to
conform with presentation in the current year.
|
(4)
|
|
Legal items: Includes legal costs related to an investigation.
|
(5)
|
|
Other items: Gross Profit and Selling, general & administration
include charges and reversal of charges related to a product's
voluntary market withdrawal and spin readiness costs; Research &
development includes amortization of option rights; Other income
includes fair value adjustments on a financial asset; Other expense
includes spin-readiness costs. Certain amounts previously reported
under 'restructuring items' in Amendment 6 to the Alcon Inc. Form
20-F have been reclassified to 'other items' to conform with
presentation in the current year.
|
(6)
|
|
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. Total tax adjustments of
$70 million included tax associated with operating income
adjustments and discrete tax items. Tax associated with operating
income adjustments of $334 million totaled $48 million with average
tax rate of 14.4%. Core tax adjustments for discrete items totaled
$22 million, including a net out of period income tax benefit of $55
million partially offset by net changes in uncertain tax positions
of $33 million.
|
|
|
|
Reconciliation of IFRS results to Core results - Three months ended
September 30, 2018 (unaudited)
|
|
|
|
|
|
Amortization
of certain
intangible
assets
(1)
|
|
|
|
|
|
|
|
|
Legal
items
(4)
|
|
|
Other
items
(5)
|
|
|
|
($ millions)
|
|
|
IFRS
Results
|
|
|
|
|
Impairments
(2)
|
|
|
Restructuring
items
(3)
|
|
|
|
|
|
|
Core
Results
|
Gross profit
|
|
|
$
|
568
|
|
|
|
$
|
249
|
|
|
$
|
337
|
|
|
|
|
|
|
|
|
$
|
(25
|
)
|
|
|
$
|
1,129
|
|
Selling, general & administration
|
|
|
$
|
(692
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(692
|
)
|
Research & development
|
|
|
$
|
(132
|
)
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(3
|
)
|
|
|
$
|
(132
|
)
|
Other income
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
$
|
16
|
|
|
|
$
|
7
|
|
Other expense
|
|
|
$
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
|
$
|
(13
|
)
|
Operating (loss)/income
|
|
|
$
|
(284
|
)
|
|
|
$
|
252
|
|
|
$
|
337
|
|
|
$
|
(1
|
)
|
|
|
$
|
3
|
|
|
$
|
(8
|
)
|
|
|
$
|
299
|
|
(Loss)/income before taxes
|
|
|
$
|
(298
|
)
|
|
|
$
|
252
|
|
|
$
|
337
|
|
|
$
|
(1
|
)
|
|
|
$
|
3
|
|
|
$
|
(8
|
)
|
|
|
$
|
285
|
|
Taxes(6) |
|
|
$
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(41
|
)
|
Net (loss)/income
|
|
|
$
|
(207
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
244
|
|
(1)
|
|
Amortization of certain intangible assets: Includes recurring
amortization for all intangible assets other than software.
|
(2)
|
|
Impairments: Includes impairment charges related to intangible
assets.
|
(3)
|
|
Restructuring items: Other income includes other restructuring
income and related items.
|
(4)
|
|
Legal items: Includes legal costs related to an investigation.
|
(5)
|
|
Other items: Gross Profit and Research & development include charges
and reversal of charges related to a product's voluntary market
withdrawal; Research & development also includes amortization of
option rights; Other income includes fair value adjustments on a
financial asset; Other expense includes other items.
|
(6)
|
|
Taxes on the adjustments between IFRS and core results take into
account, the tax rate that will finally be applicable to the item
based on the jurisdiction where the adjustment will finally have a
tax impact. Due to the differing effective tax rates in the various
jurisdictions, the tax on the total adjustments of $583 million to
arrive at the core results before tax amounts to $132 million. The
average tax rate on the adjustments is 22.6% since the nine months
ended, September 30, 2018 core tax charge of 14.2% has been applied
to the pre-tax income of the period.
|
|
|
|
Reconciliation of IFRS results to Core results - Three months ended
June 30, 2018 (unaudited)
|
|
|
|
|
|
Amortization
of certain
intangible
assets
(1)
|
|
|
|
|
|
|
|
|
Legal
items
(4)
|
|
|
Other
items
(5)
|
|
|
|
($ millions)
|
|
|
IFRS
Results
|
|
|
|
|
Impairments
(2)
|
|
|
Restructuring
items
(3)
|
|
|
|
|
|
|
Core
Results
|
Gross profit
|
|
|
$
|
878
|
|
|
|
$
|
251
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,168
|
|
Selling, general & administration
|
|
|
$
|
(722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(722
|
)
|
Research & development
|
|
|
$
|
(152
|
)
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18
|
|
|
|
$
|
(131
|
)
|
Other income
|
|
|
$
|
62
|
|
|
|
|
|
|
|
|
|
$
|
(1
|
)
|
|
|
$
|
(1
|
)
|
|
|
$
|
(49
|
)
|
|
|
$
|
11
|
|
Other expense
|
|
|
$
|
(28
|
)
|
|
|
|
|
|
|
|
|
$
|
3
|
|
|
|
$
|
10
|
|
|
|
$
|
1
|
|
|
|
$
|
(14
|
)
|
Operating income
|
|
|
$
|
38
|
|
|
|
$
|
254
|
|
|
$
|
39
|
|
|
$
|
2
|
|
|
|
$
|
9
|
|
|
|
$
|
(30
|
)
|
|
|
$
|
312
|
|
Income before taxes
|
|
|
$
|
24
|
|
|
|
$
|
254
|
|
|
$
|
39
|
|
|
$
|
2
|
|
|
|
$
|
9
|
|
|
|
$
|
(30
|
)
|
|
|
$
|
298
|
|
Taxes(6) |
|
|
$
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(42
|
)
|
Net income
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
256
|
|
(1)
|
|
Amortization of certain intangible assets: Includes recurring
amortization for all intangible assets other than software.
|
(2)
|
|
Impairments: Includes impairment charges related to intangible
assets.
|
(3)
|
|
Restructuring items: Other income and Other expense include other
restructuring income and charges and related items.
|
(4)
|
|
Legal items: Includes legal costs related to an investigation.
|
(5)
|
|
Other items: Research and development includes amortization of
option rights and a fair value adjustment of a contingent
consideration liability; Other income includes fair value
adjustments on a financial asset; Other expense includes other items.
|
(6)
|
|
Taxes on the adjustments between IFRS and core results take into
account, the tax rate that will finally be applicable to the item
based on the jurisdiction where the adjustment will finally have a
tax impact. Due to the differing effective tax rates in the various
jurisdictions, the tax on the total adjustments of $274 million to
arrive at the core results before tax amounts to $33 million. The
average tax rate on the adjustments is 12.0%, since the six months
ended, June 30, 2018 core tax charge of 14.2% has been applied to
the pre-tax income of the period.
|
|
|
|
Reconciliation of IFRS results to Core results - Three months ended
March 31, 2018 (unaudited)
|
|
|
|
|
|
Amortization
of certain
intangible
assets
(1)
|
|
|
|
|
|
|
|
|
Legal
items
(2)
|
|
|
Other
items
(3)
|
|
|
|
($ millions)
|
|
|
IFRS
Results
|
|
|
|
|
Impairments
|
|
|
Restructuring
items
|
|
|
|
|
|
|
Core
Results
|
Gross profit
|
|
|
$
|
867
|
|
|
|
$
|
251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,118
|
|
Selling, general & administration
|
|
|
$
|
(653
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(653
|
)
|
Research & development
|
|
|
$
|
(137
|
)
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13
|
|
|
|
$
|
(122
|
)
|
Other income
|
|
|
$
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(10
|
)
|
|
|
$
|
9
|
|
Other expense
|
|
|
$
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9
|
|
|
$
|
4
|
|
|
|
$
|
(10
|
)
|
Operating income
|
|
|
$
|
73
|
|
|
|
$
|
253
|
|
|
|
|
|
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
|
$
|
342
|
|
Income before taxes
|
|
|
$
|
61
|
|
|
|
$
|
253
|
|
|
|
|
|
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
|
$
|
330
|
|
Taxes(4) |
|
|
$
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(47
|
)
|
Net income
|
|
|
$
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
283
|
|
(1)
|
|
Amortization of certain intangible assets: Includes recurring
amortization for all intangible assets other than software.
|
(2)
|
|
Legal items: Includes legal costs related to an investigation.
|
(3)
|
|
Other items: Research & development includes amortization of option
rights; Other income includes fair value adjustments on a financial
asset; Other expense includes other items.
|
(4)
|
|
Taxes on the adjustments between IFRS and core results take into
account, the tax rate that will finally be applicable to the item
based on the jurisdiction where the adjustment will finally have a
tax impact. Due to the differing effective tax rates in the various
jurisdictions, the tax on the total adjustments of $269 million to
arrive at the core results before tax amounts to $24 million. The
average tax rate on the adjustments is 8.9%, since the three months
ended, March 31, 2018 core tax charge of 14.2% has been applied to
the pre-tax income of the period.
|
|
|
|
About Alcon
Alcon helps people see brilliantly. As the global leader in eye care
with a heritage spanning more than seven decades, 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 more than 260
million people in over 140 countries each year living with conditions
like cataracts, glaucoma, retinal diseases and refractive errors. Our
more than 20,000 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.
Connect with us on
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View source version on businesswire.com:
https://www.businesswire.com/news/home/20190515006009/en/
Investor Relations
Christina
Cheng
+ 41 589 112 110 (Geneva)
+ 1 817 615 2789 (Fort Worth)
investor.relations@alcon.com
Media Relations
Wes Warnock
+
41 589 112 111 (Geneva)
+ 1 817 615 2501 (Fort Worth)
globalmedia.relations@alcon.com
Source: Alcon Inc. Investors