- Second quarter sales of $1.9 billion, an increase of 2%, or
5% constant currency (cc)
- Announced the launch of PRECISION1, a new daily SiHy lens
designed for the mainstream market
- Second quarter mid-single digit growth in all product
categories (cc)
- Reiterated full year outlook
Regulatory News:
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported
its financial results for the second quarter and first half ended
June 30, 2019.
Second quarter and first half
2019 key figures
Three months ended
Six months ended
June 30, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Net sales (in million $)
1,863
1,819
3,640
3,598
Operating margin (%)
(2.8)%
2.1%
(2.8)%
3.1%
Core operating margin (%)(1)
16.6%
17.2%
17.1%
18.2%
EPS ($)
(0.80)
0.03
(1.02)
0.11
Core diluted EPS ($)(1)
0.47
0.52
0.98
1.10
For the second quarter of 2019, worldwide sales were $1.9
billion, an increase of 2% on a reported basis and an increase of
5% on a constant currency basis(2), as compared to the same quarter
of the previous year. Second quarter 2019 diluted losses per share
were $0.80 and core diluted earnings per share were $0.47.
“Our second quarter results demonstrate that we are solidly
executing our growth drivers while successfully standing Alcon up
as an independent company,” said David Endicott, Alcon’s Chief
Executive Officer. “We maintained strong Surgical performance,
driven by new product innovation in both implantables and
consumables and demand for surgical equipment. We also delivered
improvements in Vision Care, driven by double digit growth of our
DAILIES TOTAL1® globally, as well as solid sales execution in the
U.S."
Mr. Endicott continued, "PRECISION1®, our newest daily SiHy
lens, is expected to broaden our contact lens portfolio and enhance
our competitive offerings. We’re investing in a critical
manufacturing platform that we believe will deliver one of our most
exciting U.S. launches and position our business for continued
growth and expansion."
To view the separate press release on the launch of PRECISION1,
click on:
https://www.alcon.com/media-release/alcon-launch-precision1-daily-disposable-contact-lenses-it-continues-deliver-vision
Second Quarter and First Half 2019 Results
Worldwide sales for the second quarter were $1.9 billion, an
increase of 2%, or 5% on a constant currency basis, compared to the
second quarter of 2018. Sales growth was driven by the Company's
four key growth platforms within the Surgical and Vision Care
segments: AT-IOLs, Vitreoretinal, DAILIES TOTAL1 and SYSTANE
Complete®. For the first six months ended June 30, 2019, worldwide
sales were $3.6 billion, up 1%, or 5% on a constant currency basis,
compared to the first six months ended June 30, 2018.
The following table highlights net sales by segment for the
second quarter and first half of 2019:
Three months ended
Change %
Six months ended
Change %
($ millions unless indicated
otherwise)
June 30, 2019
June 30, 2018
$
cc
June 30, 2019
June 30, 2018
$
cc
Surgical
Implantables
300
298
1
4
585
577
1
6
Consumables
588
578
2
5
1,139
1,119
2
6
Equipment/other
163
154
6
7
327
311
5
7
Total Surgical
1,051
1,030
2
5
2,051
2,007
2
6
Vision Care
Contact lenses
493
478
3
6
991
987
—
4
Ocular health
319
311
3
5
598
604
(1
)
2
Total Vision Care
812
789
3
6
1,589
1,591
—
3
Net sales to third parties
1,863
1,819
2
5
3,640
3,598
1
5
Surgical growth continues
Surgical net sales of $1.1 billion, which include implantables,
consumables and equipment/other, increased 2%, or 5% on a constant
currency basis, compared to the second quarter of 2018. All
categories performed well, posting mid-single digit growth. Strong
international demand for PANOPTIX® and monofocals, pull-through of
dedicated consumables, strong cataract equipment and service
revenue were the primary drivers of growth. Year-to-date, Surgical
net sales increased 2%, or 6% on a constant currency basis,
compared to the first six months ended June 30, 2018.
Vision Care shows steady growth
Vision Care net sales of $0.8 billion, which include contact
lenses and ocular health, increased 3%, or 6% on a constant
currency basis compared to the second quarter of 2018. Sales of
DAILIES TOTAL1 and SYSTANE Complete continued to achieve
double-digit gains during the quarter. Sales from the rest of the
contact lens portfolio improved due to new product enhancements,
better product flow and sales execution. Year-to-date revenues were
comparable to the first six months of last year and increased 3% on
a constant currency basis.
Operating income/loss
Second quarter 2019 operating loss was $53 million, which
includes charges of $258 million from the amortization of certain
intangible assets and $78 million of separation costs. Excluding
these and other adjustments, second quarter core operating income
was $310 million. Second quarter core operating margin of 16.6%
includes an unfavorable impact of 90 basis points from foreign
exchange, compared to the first three months ended June 30,
2018.
Operating loss for the first six months of the year was $101
million, which includes charges of $513 million from the
amortization of certain intangible assets, $78 million of
separation costs and $72 million of spin-readiness costs. Excluding
these and other adjustments, first half operating income was $624
million. Core operating margin for the first half of the year of
17.1% includes an unfavorable impact of 100 basis points from
foreign exchange, compared to the first six months ended June 30,
2018.
Diluted earnings per share (EPS)
Second quarter 2019 diluted losses per share were $0.80, which
includes $301 million, or $0.61 per share, in non-cash tax expense
resulting from Swiss tax reform. On June 30, 2019, Swiss voters
approved the Swiss Tax Reform and Old Age Insurance financing bill
which resulted in the re-measurement of the Company’s Swiss
deferred tax assets and liabilities.
Core diluted earnings per share were $0.47 for the second
quarter, which was impacted by $0.06 per share from incremental
interest expense related to borrowings associated with the
spin-off.
First half 2019 diluted losses per share were $1.02, including
$0.61 per share in non-cash tax expense resulting from Swiss tax
reform and other adjustments. Core diluted earnings were $0.98 per
share for the first half of 2019.
Balance sheet highlights
The Company ended the second quarter with a cash position of
$721 million. Following the addition of $3.5 billion of borrowings
at the spin-off, the Company ended the second quarter with a net
debt(3) position of $2.8 billion.
2019 Financial Outlook
Based on solid performance year-to-date, the Company reiterated
its full year 2019 guidance provided during the first quarter
trading update on May 15, 2019. The Company continues to expect
worldwide net sales growth for the full year 2019 to be between 3%
and 5% on a constant currency basis, core operating margin to be in
the range of 17% to 18%, and core effective tax rate(4) to be in
the range of 17% to 19%.
Webcast and Conference Call
Instructions
The Company will host a conference call on August 21 at 2:00
p.m. Central European Summer Time / 8 a.m. Eastern Time to discuss
its second quarter 2019 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,
https://investor.alcon.com/financials/quarterly-results/, at the
beginning of the conference, or by clicking on the link
(https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2019/Alcons-Second-Quarter-2019-Earnings-Conference/default.aspx).
Footnotes (pages 1-3)
1Core results, such as 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.
2Constant currency (cc) is a non-IFRS measure. Growth in
constant currency (cc) is calculated by translating the current
year’s foreign currency items into U.S. dollars using average
exchange rates from the prior year and comparing them to prior year
values in U.S. dollars. An explanation of non-IFRS measures can be
found in the 'Non-IFRS measures as defined by the Company'
section.
3Net (debt)/liquidity is a non-IFRS measure. For additional
information regarding net (debt)/liquidity, which is a non-IFRS
measure, see the explanation of non-IFRS measures and
reconciliation tables in the 'Non-IFRS measures as defined by the
Company' and 'Financial Tables' sections.
4Core 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 later in this press release.
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,
including when measuring current period results against prior
periods, including core results, constant currencies, net
(debt)/liquidity, 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 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.
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 currencies
Changes in the relative values of non-US 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
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 U.S.
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 prior year and comparing them to the prior year values 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.
Net liquidity/(debt)
Alcon defines net liquidity/(debt) as current and non-current
financial debt less cash and cash equivalents, current investments
and derivative financial instruments. Net liquidity/(debt) is
presented as additional information because management believes it
is a useful supplemental indicator of Alcon's ability to pay
dividends, to meet financial commitments and to invest in new
strategic opportunities, including strengthening its balance
sheet.
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
Second quarter/ first half 2019 net
sales by region
Three months ended
Six months ended
($ millions unless indicated
otherwise)
June 30, 2019
June 30, 2018
June 30, 2019
June 30, 2018
United States
779
42
%
750
41
%
1,516
42
%
1,462
41
%
International
1,084
58
%
1,069
59
%
2,124
58
%
2,136
59
%
Net sales to third parties
1,863
100
%
1,819
100
%
3,640
100
%
3,598
100
%
Consolidated income statement for the
first six months (unaudited)
Three months ended
Six months ended
($ millions except (loss)/earnings per
share)
June 30, 2019
June 30, 2018
Change
June 30, 2019
June 30, 2018
Change
Net sales to third parties
1,863
1,819
44
3,640
3,598
42
Sales to former parent
—
1
(1
)
—
2
(2
)
Other revenues
40
—
40
87
—
87
Net sales and other revenues
1,903
1,820
83
3,727
3,600
127
Cost of net sales
(922
)
(942
)
20
(1,847
)
(1,855
)
8
Cost of other revenues
(34
)
—
(34
)
(81
)
—
(81
)
Gross profit
947
878
69
1,799
1,745
54
Selling, general & administration
(760
)
(722
)
(38
)
(1,416
)
(1,375
)
(41
)
Research & development
(167
)
(152
)
(15
)
(313
)
(289
)
(24
)
Other income
6
62
(56
)
18
81
(63
)
Other expense
(79
)
(28
)
(51
)
(189
)
(51
)
(138
)
Operating (loss)/income
(53
)
38
(91
)
(101
)
111
(212
)
Interest expense
(35
)
(6
)
(29
)
(44
)
(12
)
(32
)
Other financial income & expense
(8
)
(8
)
—
(16
)
(14
)
(2
)
(Loss)/income before taxes
(96
)
24
(120
)
(161
)
85
(246
)
Taxes
(294
)
(9
)
(285
)
(338
)
(32
)
(306
)
Net (loss)/income
(390
)
15
(405
)
(499
)
53
(552
)
(Loss)/earnings per share
Basic
(0.80
)
0.03
(0.83
)
(1.02
)
0.11
(1.13
)
Diluted
(0.80
)
0.03
(0.83
)
(1.02
)
0.11
(1.13
)
Weighted average number of shares
outstanding (millions)(1)
Basic
488.2
488.2
—
488.2
488.2
—
Diluted
488.2
488.2
—
488.2
488.2
—
(1)
For periods prior to the spin-off, the
denominator for basic and diluted earnings per share was calculated
using the 488.2 million shares of common stock distributed in the
spin-off.
Key balance sheet highlights
($ millions)
June 30, 2019
December 31, 2018
Cash and cash equivalents
721
227
Current financial debts
1,771
47
Non-current financial debts
1,751
—
Free cash flow
The following is a summary of Alcon free cash flow for the six
months ended June 30, 2019 and 2018, together with a reconciliation
to net cash flows from operating activities, the most directly
comparable IFRS measure:
Six months ended
($ millions)
June 30, 2019
June 30, 2018
Net cash flows from operating
activities
301
555
Purchase of property, plant &
equipment
(206)
(179)
Free cash flow
95
376
Net (debt)/liquidity
($ millions)
At June 30, 2019
Current financial debt
(1,771)
Other financial liabilities to former
parent
—
Other financial receivables from former
parent
—
Non-current financial debt(1)
(1,751)
Total financial debt
(3,522)
Less liquidity:
Cash and cash equivalents
721
Derivative financial instruments
1
Total liquidity
722
Net (debt)/liquidity(1)
(2,800)
(1)
Alcon adopted IFRS 16, Leases as of
January 1, 2019 using the modified retrospective approach as
described in Notes 2 and 7 to the Condensed Consolidated Interim
Financial Statements. Under the modified retrospective approach,
comparative information was not restated. However, the balances
previously reported in "Financial debts" for a finance lease
obligation have been reclassified from "Financial debts" to
"Non-current lease liabilities" to enhance the inter-period
comparability of information presented. This reclassification of
Balance Sheet presentation has also been reflected in the
computation of Net (debt)/liquidity, resulting in an increase in
Net (debt)/liquidity of $89 million as of December 31, 2018.
Reconciliation of IFRS to Core
results
Three months ended June 30, 2019
Amortization of certain
intangible assets(1)
($ millions except (loss)/earnings per
share)
IFRS Results
Separation Costs(2)
Other Items(3)
Core Results
Gross profit
947
252
3
2
1,204
Selling, general & administration
(760)
13
2
(745)
Research & development
(167)
6
2
13
(146)
Other income
6
2
8
Other expense
(79)
60
8
(11)
Operating (loss)/income
(53)
258
78
27
310
(Loss)/income before taxes
(96)
258
78
27
267
Taxes(4)
(294)
(36)
(18)
312
(36)
Net (loss)/income
(390)
222
60
339
231
Basic (loss)/earnings per share(5)
(0.80)
0.47
Diluted (loss)/earnings per share(5)
(0.80)
0.47
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Separation costs are expected to be
incurred over the two to three-year period following the completion
of the Company’s Spin-Off from Novartis and primarily include costs
related to IT and third party consulting fees.
(3)
Gross profit includes manufacturing sites
consolidation activities. Selling, general & administration
includes expenses for integration of recent acquisitions. Research
& development includes $16 million primarily for the
amortization of option rights and expenses for integration of
recent acquisitions, partially offset by a $3 million fair value
adjustment of a contingent consideration liability. Other income
and expense include $10 million for fair value adjustments of a
financial asset and other items.
(4)
Total tax adjustments of $258 million
included tax associated with operating income core adjustments and
discrete tax items. Tax associated with operating income core
adjustments of $363 million totaled $58 million with an average tax
rate of 16.0%.
Core tax adjustments for discrete items
totaled $316 million, including a $301 million non-cash tax expense
for re-measurement of deferred tax balances as a result of Swiss
tax reform, changes in uncertain tax positions and other items.
(5)
Core basic earnings per share is
calculated using the 488.2 million weighted-average shares of
common stock outstanding during the period following the
spin-off.
Core diluted earnings per share also
contemplate dilutive shares of 1.8 million associated with unvested
equity-based awards as described in Note 6 to the Condensed
Consolidated Interim Financial Statements, yielding 490.0 million
weighted-average diluted shares for the three months ended June 30,
2019.
Reconciliation of
IFRS to Core results (continued)
Three months ended June 30, 2018
Amortization of certain
intangible assets(1)
($ millions except (loss)/earnings per
share)
IFRS Results
Impairments(2)
Restructuring items(3)
Legal items(4)
Other Items(5)
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
Basic earnings per share(7)
0.03
0.52
Diluted earnings per share(7)
0.03
0.52
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Includes impairment charges related to
intangible assets.
(3)
Includes other restructuring income and
charges and related items.
(4)
Includes legal costs related to an
investigation.
(5)
Research and development includes
amortization of option rights and a fair value adjustment of a
contingent consideration liability. Other income and expense
primarily include $49 million for fair value adjustments of a
financial asset.
(6)
Tax associated with operating income core
adjustments of $274 million totaled $33 million. The core tax rate
of 14.2% has been applied to core pre-tax income for the
period.
(7)
For periods prior to the spin-off, the
denominator for both core basic and diluted earnings per share was
calculated using the 488.2 million shares of common stock
distributed in the spin-off.
Reconciliation of
IFRS to Core results (continued)
Six months ended June 30, 2019
Amortization of certain
intangible assets(1)
($ millions except (loss)/earnings per
share)
IFRS Results
Separation Costs(2)
Legal items(3)
Other Items(4)
Core Results
Gross profit
1,799
502
3
10
2,314
Selling, general & administration
(1,416)
13
9
(1,394)
Research & development
(313)
11
2
20
(280)
Other income
18
(1)
17
Other expense
(189)
60
32
64
(33)
Operating (loss)/income
(101)
513
78
32
102
624
(Loss)/income before taxes
(161)
513
78
32
102
564
Taxes(5)
(338)
(70)
(18)
(8)
348
(86)
Net (loss)/income
(499)
443
60
24
450
478
Basic (loss)/earnings per share(6)
(1.02)
0.98
Diluted (loss)/earnings per share(6)
(1.02)
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Separation costs are expected to be
incurred over the two to three-year period following the completion
of the Company’s Spin-Off from Novartis and primarily include costs
related to IT and third party consulting fees.
(3)
Includes legal settlement costs and
certain external legal fees.
(4)
Gross Profit includes spin readiness costs
and manufacturing sites consolidation activities. Selling, general
& administration includes expenses for spin readiness and
integration of recent acquisitions. Research & development
includes $33 million primarily for the amortization of option
rights and expenses for integration of recent acquisitions,
partially offset by $13 million in fair value adjustments of a
contingent consideration liability. Other income and expense
primarily includes spin readiness costs.
(5)
Total tax adjustments of $252 million
included tax associated with operating income core adjustments and
discrete tax items. Tax associated with operating income core
adjustments of $725 million totaled $115 million with an average
tax rate of 15.9%.
Core tax adjustments for discrete items
totaled $367 million, including a $301 million non-cash tax expense
for re-measurement of deferred tax balances as a result of Swiss
tax reform and a $68 million tax expense related to rate changes in
the US following the Spin-Off, offset by net changes in uncertain
tax positions.
(6)
Core basic earnings per share is
calculated using the 488.2 million weighted-average shares of
common stock outstanding during the period following the
spin-off.
Core diluted earnings per share also
contemplate dilutive shares of 0.9 million associated with unvested
equity-based awards as described in Note 6 to the Condensed
Consolidated Interim Financial Statements, yielding 489.1 million
weighted-average diluted shares for the six months ended June 30,
2019.
Reconciliation of
IFRS to Core results (continued)
Six months ended June 30, 2018
Amortization of certain
intangible assets(1)
($ millions except (loss)/earnings per
share)
IFRS Results
Impairments(2)
Restructuring items(3)
Legal items(4)
Other Items(5)
Core Results
Gross profit
1,745
502
39
2,286
Selling, general & administration
(1,375)
(1,375)
Research & development
(289)
5
31
(253)
Other income
81
(1)
(1)
(59)
20
Other expense
(51)
3
19
5
(24)
Operating income
111
507
39
2
18
(23)
654
Income before taxes
85
507
39
2
18
(23)
628
Taxes(6)
(32)
(89)
Net income
53
539
Basic earnings per share(7)
0.11
1.10
Diluted earnings per share(7)
0.11
1.10
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Includes impairment charges related to
intangible assets.
(3)
Includes restructuring income and charges
and related items.
(4)
Includes legal costs related to an
investigation.
(5)
Research and development includes
amortization of option rights and a fair value adjustment of a
contingent consideration liability. Other income and expense
primarily include fair value adjustments of a financial asset.
(6)
Tax associated with operating income core
adjustments of $543 million totaled $57 million. The core tax rate
of 14.2% has been applied to core pre-tax income for the
period.
(7)
For periods prior to the spin-off, the
denominator for both core basic and diluted earnings per share was
calculated using the 488.2 million shares of common stock
distributed in the spin-off.
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 Facebook LinkedIn
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190820005689/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
Alcon (NYSE:ALC)
Historical Stock Chart
From Jul 2024 to Aug 2024
Alcon (NYSE:ALC)
Historical Stock Chart
From Aug 2023 to Aug 2024