- Fourth quarter 2022 sales of $2.2 billion, up 1%, or 7%
constant currency(1) (cc)
- Full year 2022 sales of $8.7 billion, up 5%, or up 11%
cc
- Full year 2022 diluted EPS of $0.68, down 11%, or up 37% cc;
core diluted EPS(2) of $2.24 up 4%, or 23% cc
- 2023 outlook reflects mid-to-high single digit sales growth,
continued margin expansion and high teens earnings growth
Ad Hoc Announcement Pursuant to Art. 53 LR
Regulatory News:
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported
its financial results for the three and twelve months ended
December 31, 2022. For the fourth quarter of 2022, sales were $2.2
billion, an increase of 1% on a reported basis and 7% on a constant
currency basis(1), as compared to the same quarter of the previous
year. Alcon reported a loss per share of $0.20 and core diluted
earnings per share(2) of $0.42 in the fourth quarter of 2022.
David J. Endicott, Alcon's Chief Executive Officer, said, "The
Alcon team delivered a strong 2022 despite a consistently
challenging macroeconomic environment, including inflationary
pressure, supply chain headwinds and a strong US dollar. Alcon's
performance is a testament to the resilience of our markets and the
underlying strength of our business as we continue to drive growth
and earnings while operating more efficiently."
Mr. Endicott continued, “As we look to 2023, we will continue to
focus on accelerating innovation, commercial execution and
ultimately delivering sales and earnings growth to create long-term
shareholder value."
Fourth quarter and full year 2022 key figures
Three months ended December
31
Twelve months ended December
31
2022
2021
2022
2021
Net sales ($ millions)
2,155
2,134
8,654
8,222
Operating margin (%)
1.0%
8.5%
7.8%
7.1%
Core operating margin (%)(2)
16.4%
16.3%
18.2%
17.6%
Diluted (loss)/earnings per share ($)
(0.20)
0.28
0.68
0.76
Core diluted earnings per share ($)(2)
0.42
0.56
2.24
2.15
(1)
Constant currency is a non-IFRS measure.
Refer to the 'Footnotes' section for additional information.
(2)
Core results, such as core operating
margin and core diluted EPS, are non-IFRS measures. Refer to the
'Footnotes' section for additional information.
Fourth quarter and full year 2022 results
Sales for the fourth quarter of 2022 were $2.2 billion, an
increase of 1% on a reported basis and 7% on a constant currency
basis, compared to the fourth quarter of 2021. Sales for the full
year 2022 were $8.7 billion, an increase of 5% on a reported basis
and 11% on a constant currency basis, compared to the full year
2021.
The following table highlights net sales by segment for the
fourth quarter and full year 2022:
Three months ended December
31
Change %
Twelve months ended December
31
Change %
($ millions unless indicated
otherwise)
2022
2021
$
cc(1)
2022
2021
$
cc(1)
Surgical
Implantables
434
416
4
11
1,725
1,522
13
20
Consumables
636
639
—
6
2,499
2,388
5
10
Equipment/other
204
204
—
7
821
793
4
10
Total Surgical
1,274
1,259
1
8
5,045
4,703
7
13
Vision Care
Contact lenses
530
533
(1
)
6
2,192
2,139
2
9
Ocular health
351
342
3
8
1,417
1,380
3
7
Total Vision Care
881
875
1
7
3,609
3,519
3
8
Net sales to third parties
2,155
2,134
1
7
8,654
8,222
5
11
Surgical driven by international markets and solid demand for
cataract products
For the fourth quarter of 2022, Surgical net sales, which
include implantables, consumables and equipment/other, were $1.3
billion, an increase of 1% on a reported basis and 8% on a constant
currency basis versus the fourth quarter of 2021.
- Implantables net sales of $434 million increased 4%, reflecting
improving market conditions in most international markets,
increased demand for our portfolio of advanced technology
intraocular lenses, led by Vivity, and sales of the Hydrus
Microstent. Implantables growth was partially offset by declines in
South Korea, as well as unfavorable currency impacts of 7%.
Implantables net sales increased 11% in constant currency.
- Consumables net sales were $636 million, in line with the prior
year period, reflecting improving market conditions in most
international markets, offset by unfavorable currency impacts of
6%. Consumables net sales increased 6% in constant currency.
- Equipment/other net sales were $204 million, in line with the
prior year period, as increased demand in international markets for
cataract equipment and service was offset by declines in refractive
equipment and unfavorable currency impacts of 7%. Equipment/other
net sales increased 7% in constant currency.
For the full year 2022, Surgical net sales increased 7%, or 13%
on a constant currency basis, versus the full year 2021.
Vision Care benefited from silicone hydrogel contact lenses and
eye drops, offset by significant supply chain challenges in contact
lens care
For the fourth quarter of 2022, Vision Care net sales, which
include contact lenses and ocular health, were $0.9 billion, an
increase of 1% on a reported basis and 7% on a constant currency
basis, versus the fourth quarter of 2021.
- Net sales of contact lenses were $530 million, a decrease of
1%, as strong sales in the United States and slower international
growth were more than offset by unfavorable currency impacts of 7%.
Sales were led by silicone hydrogel contact lenses, including the
Precision1 and Total families of products, partially offset by
declines in legacy lenses. Net sales of contact lenses increased 6%
in constant currency.
- Ocular health net sales were $351 million, an increase of 3%,
primarily driven by the portfolio of eye drops, including recently
acquired ophthalmic pharmaceutical products and Systane. This
growth was significantly offset by unfavorable currency impacts of
5% and supply chain challenges, primarily in contact lens care.
Ocular health net sales increased 8% in constant currency.
For the full year 2022, Vision Care net sales increased 3%, or
8% on a constant currency basis, as compared to the full year
2021.
Operating income
Fourth quarter 2022 operating income was $21 million and
operating margin was 1.0%. Operating margin decreased 7.5
percentage points, including a negative 3.1 percentage point impact
from currency.
The current year period operating margin was impacted by legal
settlement costs, increased transformation costs, increased
inflationary impacts, acquisition and integration related expenses
and increased investment in research and development, primarily
following the acquisition of Aerie. This was partially offset by
improved underlying operating leverage from higher sales and
favorability from incentive compensation. Operating margin
decreased 4.4 percentage points on a constant currency basis.
Adjustments to arrive at core operating income(2) in the current
year period were $332 million, mainly due to $151 million of
amortization and $78 million of transformation costs. Excluding
these and other adjustments, fourth quarter 2022 core operating
income was $353 million.
Fourth quarter 2022 core operating margin of 16.4% increased 0.1
percentage points, reflecting improved underlying operating
leverage from higher sales and favorability from incentive
compensation. This was offset by increased inflationary impacts,
increased investment in research and development, primarily
following the acquisition of Aerie and a negative 2.3 percentage
point impact from currency. Core operating margin increased 2.4
percentage points on a constant currency basis.
Operating income for the full year 2022 was $672 million and
operating margin was 7.8%. Adjustments to arrive at core operating
income for the full year 2022 were $899 million, mainly due to $588
million of amortization and $119 million of transformation costs.
Excluding these and other adjustments, core operating income for
the full year 2022 was $1.6 billion and core operating margin was
18.2%.
Diluted losses/earnings per share (EPS)
Fourth quarter 2022 loss per share was $0.20 compared to diluted
earnings per share of $0.28 in the prior year period. The loss in
the current year period was driven by the recognition of tax
expense for an Advance Pricing Agreement between Swiss and US tax
authorities related to fiscal years 2019 through 2022, lower
operating income due to legal settlement costs, increased
transformation costs and acquisition and integration related costs
and higher interest expense. Core diluted earnings per share of
$0.42 decreased 25%, or 4% on a constant currency basis.
Diluted earnings per share for the full year 2022 of $0.68
decreased 11% versus the prior year period, or increased 37% on a
constant currency basis. Core diluted earnings per share of $2.24
increased 4%, or 23% on a constant currency basis.
Proposed dividend
The Company's Board of Directors proposed a dividend of CHF 0.21
per share, based on 2022 financial results. The Company's
shareholders will vote on this proposal at the 2023 Annual General
Meeting on May 5, 2023.
Balance sheet and cash flow highlights
The Company ended 2022 with a cash position of $1.0 billion.
Cash flows from operations for the full year 2022 totaled $1.2
billion, compared to $1.3 billion in the prior year. The current
year includes increased cash outflows from changes in net working
capital, the negative impact of foreign currency on operating
results and a legal settlement payment. Both periods were impacted
by tax payments and semi-annual interest payments.
Free cash flow(3) was $581 million in the full year 2022,
compared to $645 million in the previous year. The decrease in free
cash flow was primarily driven by lower cash flows from operations,
partially offset by lower purchases of property, plant and
equipment.
During the fourth quarter of 2022, the Company completed a
private offering of $700 million of 5.375% senior notes due 2032
and $600 million of 5.750% senior notes due 2052. The funds
borrowed through this issuance, together with cash, were used to
repay the remaining Facility B term loan and the bridge loan
facility entered into in connection with the acquisition of Aerie.
Following these transactions, financial debts totaled $4.6 billion
at the end of 2022. The Company ended 2022 with a net debt(4)
position of $3.7 billion.
(3)
Free cash flow is a non-IFRS measure.
Refer to the 'Footnotes' section for additional information.
(4)
Net (debt)/liquidity is a non-IFRS
measure. Refer to the 'Footnotes' section for additional
information.
2023 outlook
The Company published its 2023 outlook as per the table
below.
2023 outlook(5)
February
Net sales (USD)
$9.2 to $9.4 billion
Change vs. prior year (cc)(1)
+6% to +8%
Core operating margin(2)
19.5% to 20.5%
Interest expense and Other financial
income & expense
$260 to $280 million
Core effective tax rate(6)
17% to 19%
Core diluted EPS(2)
$2.55 to $2.65
Change vs. prior year (cc)(1)
+16% to +20%
This outlook assumes the following:
- Market growth slightly below historical averages;
- Exchange rates as of end-January prevail through year-end;
- Inflation and supply chain disruptions ease in the second half
of the year;
- Approximately 497 million weighted-averaged diluted
shares.
(5)
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.
(6)
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 February 28, 2023 at
2:00 p.m. Central European Time / 8:00 a.m. Eastern Time to discuss
its fourth quarter and full year 2022 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.
Today, Alcon will issue its 2022 Annual Report, which will be
available on
https://investor.alcon.com/financials/annual-reports/default.aspx.
Alcon will also file its 2022 Annual Report on Form 20-F with the
US Securities and Exchange Commission today, and will post this
document on
https://investor.alcon.com/financials/sec-filings/default.aspx.
Alcon shareholders may receive a hard copy of either of these
documents, each of which contains our complete audited financial
statements, free of charge, upon request.
The Company's 2022 Annual Report, interim financial report and
supplemental presentation materials can be found online through
Alcon's Investor Relations website at the beginning of the
conference, or by clicking on the link:
https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2023/Alcons-Fourth-Quarter-2022-Earnings-Conference-Call/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
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)
Net (debt)/liquidity is a non-IFRS
measure. For additional information regarding net (debt)/liquidity,
see the explanation of non-IFRS measures and reconciliation tables
in the 'Non-IFRS measures as defined by the Company' and 'Financial
tables' sections.
(5)
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.
(6)
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 sustainability and diversity 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;
- 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 currencies, free cash flow, and net (debt)/liquidity.
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 currencies
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.
Net (debt)/liquidity
Alcon defines net (debt)/liquidity as current and non-current
financial debt less cash and cash equivalents, current investments
and derivative financial instruments. Net (debt)/liquidity 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
Net sales by region
Three months ended December
31
Twelve months ended December
31
($ millions unless indicated
otherwise)
2022
2021
2022
2021
United States
989
46
%
919
43
%
3,897
45
%
3,651
44
%
International
1,166
54
%
1,215
57
%
4,757
55
%
4,571
56
%
Net sales to third parties
2,155
100
%
2,134
100
%
8,654
100
%
8,222
100
%
Consolidated Income Statement (unaudited)
Three months ended December
31
Twelve months ended December
31
($ millions except (loss)/earnings per
share)
2022
2021
2022
2021
Net sales to third parties
2,155
2,134
8,654
8,222
Other revenues
16
15
63
69
Net sales and other revenues
2,171
2,149
8,717
8,291
Cost of net sales
(986
)
(930
)
(3,910
)
(3,577
)
Cost of other revenues
(15
)
(13
)
(59
)
(62
)
Gross profit
1,170
1,206
4,748
4,652
Selling, general & administration
(762
)
(813
)
(3,068
)
(3,076
)
Research & development
(196
)
(180
)
(702
)
(842
)
Other income
19
25
36
43
Other expense
(210
)
(56
)
(342
)
(197
)
Operating income
21
182
672
580
Interest expense
(40
)
(28
)
(134
)
(120
)
Other financial income & expense
(12
)
(13
)
(75
)
(42
)
(Loss)/income before taxes
(31
)
141
463
418
Taxes
(66
)
(2
)
(128
)
(42
)
Net (loss)/income
(97
)
139
335
376
(Loss)/earnings per share ($)
Basic
(0.20
)
0.28
0.68
0.77
Diluted
(0.20
)
0.28
0.68
0.76
Weighted average number of shares
outstanding (millions)
Basic
491.8
490.1
491.4
490.0
Diluted
491.8
494.2
494.4
493.4
Balance sheet highlights
($ millions)
December 31, 2022
December 31, 2021
Cash and cash equivalents
980
1,575
Current financial debts
107
114
Non-current financial debts
4,541
3,966
Free cash flow
The following is a summary of free cash flow for the twelve
months ended December 31, 2022 and 2021, together with a
reconciliation to net cash flows from operating activities, the
most directly comparable IFRS measure:
Twelve months ended December
31
($ millions)
2022
2021
Net cash flows from operating
activities
1,217
1,345
Purchase of property, plant &
equipment
(636
)
(700
)
Free cash flow
581
645
Net (debt)/liquidity
($ millions)
At December 31, 2022
Current financial debt
(107
)
Non-current financial debt
(4,541
)
Total financial debt
(4,648
)
Less liquidity:
Cash and cash equivalents
980
Derivative financial instruments
8
Total liquidity
988
Net (debt)
(3,660
)
Reconciliation of IFRS results to core results
Three months ended December 31, 2022
($ millions except (loss)/earnings per
share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Transformation
costs(4)
Legal items(6)
Other items(7)
Core results
Gross profit
1,170
149
—
—
—
3
1,322
Operating income
21
151
1
78
70
32
353
(Loss)/income before taxes
(31
)
151
1
78
70
32
301
Taxes(8)
(66
)
(26
)
—
(14
)
(17
)
31
(92
)
Net (loss)/income
(97
)
125
1
64
53
63
209
Basic (loss)/earnings per share ($)
(0.20
)
0.42
Diluted (loss)/earnings per share ($)
(0.20
)
0.42
Basic - weighted average shares
outstanding (millions)(9)
491.8
491.8
Diluted - weighted average shares
outstanding (millions)(9)
491.8
495.0
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Three months ended December 31, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments (2)
Separation costs(3)
Transformation
costs(4)
Post employ ment benefits
(5)
Other items(7)
Core results
Gross profit
1,206
134
—
—
—
—
—
1,340
Operating income
182
138
2
13
28
(16
)
1
348
Income before taxes
141
138
2
13
28
(16
)
1
307
Taxes(8)
(2
)
(25
)
—
(2
)
(5
)
2
—
(32
)
Net income
139
113
2
11
23
(14
)
1
275
Basic earnings per share ($)
0.28
0.56
Diluted earnings per share ($)
0.28
0.56
Basic - weighted average shares
outstanding (millions)(9)
490.1
490.1
Diluted - weighted average shares
outstanding (millions)(9)
494.2
494.2
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Twelve months ended December 31, 2022
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Transformation
costs(4)
Legal items(6)
Other items(7)
Core results
Gross profit
4,748
572
59
—
—
2
5,381
Operating income
672
588
62
119
90
40
1,571
Income before taxes
463
588
62
119
90
40
1,362
Taxes(8)
(128
)
(99
)
(14
)
(20
)
(22
)
29
(254
)
Net income
335
489
48
99
68
69
1,108
Basic earnings per share ($)
0.68
2.25
Diluted earnings per share ($)
0.68
2.24
Basic - weighted average shares
outstanding (millions)(9)
491.4
491.4
Diluted - weighted average shares
outstanding (millions)(9)
494.4
494.4
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' tables.
Twelve months ended December 31, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transfor- mation
costs(4)
Post- employ- ment
benefits(5)
Legal items(6)
Other items(7)
Core results
Gross profit
4,652
520
45
—
—
—
—
(1
)
5,216
Operating income
580
529
225
36
68
(16
)
50
(29
)
1,443
Income before taxes
418
529
225
36
68
(16
)
50
(29
)
1,281
Taxes(8)
(42
)
(95
)
(51
)
(6
)
(13
)
2
(12
)
(1
)
(218
)
Net income
376
434
174
30
55
(14
)
38
(30
)
1,063
Basic earnings per share ($)
0.77
2.17
Diluted earnings per share ($)
0.76
2.15
Basic - weighted average shares
outstanding (millions)(9)
490.0
490.0
Diluted - weighted average shares
outstanding (millions)(9)
493.4
493.4
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS results to core results' 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)
Separation costs, primarily related to IT
and third party consulting fees, following completion of the
spin-off.
(4)
Transformation costs, primarily related to
restructuring and third party consulting fees, for the multi-year
transformation program.
(5)
Includes impacts from pension and other
post-employment benefit plan amendments.
(6)
For the three and twelve months ended
December 31, 2022, includes legal settlement costs.
For the twelve months ended December 31,
2021, includes an increase in provisions for legal matters.
(7)
For the three months ended December 31,
2022, Gross profit includes the amortization of inventory fair
value adjustments related to recent acquisitions. Operating income
also includes acquisition and integration related expenses and fair
value adjustments of financial assets.
For the three months ended December 31,
2021, Operating income includes the amortization of option rights,
partially offset by fair value adjustments of financial assets.
For the twelve months ended December 31,
2022, Gross profit includes the amortization of inventory fair
value adjustments related to recent acquisitions, partially offset
by fair value adjustments to contingent consideration liabilities.
Operating income also includes acquisition and integration related
expenses, partially offset by fair value adjustments to contingent
consideration liabilities and fair value adjustments of financial
assets.
For the twelve months ended December 31,
2021, Gross profit includes fair value adjustments to contingent
consideration liabilities. Operating income also includes fair
value adjustments to contingent consideration liabilities,
partially offset by the amortization of option rights and fair
value adjustments of financial assets.
(8)
For the three months ended December 31,
2022, total tax adjustments of $26 million include tax associated
with operating income core adjustments, partially offset by a
discrete tax item. Tax associated with operating income core
adjustments of $332 million totaled $63 million with an average tax
rate of 19.0%. Core tax adjustments for discrete tax items totaled
$37 million related to the recognition of an Advanced Pricing
Agreement between US and Switzerland tax authorities for fiscal
years 2019 through 2021.
For the three months ended December 31,
2021, total tax adjustments of $30 million include tax associated
with operating income core adjustments of $166 million with an
average tax rate of 18.1%.
For the twelve months ended December 31,
2022, total tax adjustments of $126 million include tax associated
with operating income core adjustments, partially offset by
discrete tax items. Tax associated with operating income core
adjustments of $899 million totaled $166 million with an average
tax rate of 18.5%. Core tax adjustments for discrete tax items
totaled $40 million, primarily related to the recognition of an
Advanced Pricing Agreement between US and Switzerland tax
authorities for fiscal years 2019 through 2021.
For the twelve months ended December 31,
2021, total tax adjustments of $176 million include tax associated
with operating income core adjustments of $863 million with an
average tax rate of 20.4%.
(9)
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 5 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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+ 41 589 112 111 (Geneva) + 1 817 551 8057 (Fort Worth)
globalmedia.relations@alcon.com
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