- Third quarter sales of $2.1 billion, up 15% or 14% constant
currency
- Continued growth in all Surgical and Vision Care categories
versus 2020, driven by innovation, commercial execution and market
recovery
- Nine months cash from operations of $958 million and free
cash flow of $578 million
- Expanding in surgical glaucoma with intended acquisition of
Ivantis
Ad Hoc Announcement Pursuant to Art. 53
LR
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported
its financial results for the three and nine months ended September
30, 2021. For the third quarter of 2021, worldwide sales were $2.1
billion, an increase of 15% on a reported basis and 14% on a
constant currency basis(2), as compared to the same quarter of the
previous year. Third quarter 2021 diluted earnings per share were
$0.00 and core diluted earnings per share were $0.54.
Third quarter and nine months 2021 key figures
Three months ended September
30
Nine months ended September
30
2021
2020
2021
2020
Net sales ($ millions)
2,084
1,818
6,088
4,838
Operating margin (%)
1.0%
(7.1)%
6.5%
(12.9)%
Core operating margin (%)(1)
17.7%
15.3%
18.0%
10.4%
Diluted earnings/(loss) per share ($)
0.00
(0.30)
0.48
(1.28)
Core diluted earnings per share ($)(1)
0.54
0.39
1.60
0.63
"Our third quarter performance demonstrates the strength of
Alcon's product pipeline, innovation and commercial execution,
resulting in continued growth in all Surgical and Vision Care sales
categories," said David Endicott, Alcon's Chief Executive
Officer.
Mr. Endicott continued, "We are developing and delivering
differentiated products, platforms and services that enhance eye
care around the world. In Surgical, we are building on our
leadership by creating an ecosystem that connects and integrates
data systems and equipment in the clinic and operating room. We are
also excited to expand our presence in the fast-growing surgical
glaucoma market with our intended acquisition of Ivantis. In Vision
Care, we are adding new SiHy contact lens designs for daily and
reusable wearers, as well as expanding our Systane family with
multi-dose preservative-free formulations."
Third quarter and nine months 2021 results
Worldwide sales for the third quarter were $2.1 billion, an
increase of 15% on a reported basis and 14% on a constant currency
basis, compared to the third quarter of 2020. The Surgical and
Vision Care franchises benefited from innovation, commercial
execution and improvements in the eye care market, led by continued
strength in the United States with varied paces of recovery
internationally from the COVID-19 pandemic.
The following table highlights net sales by segment for the
third quarter and first nine months of 2021:
Three months ended September
30
Change %
Nine months ended September
30
Change %
($ millions unless indicated
otherwise)
2021
2020
$
cc(2)
2021
2020
$
cc(2)
Surgical
Implantables
375
290
29
29
1,106
776
43
40
Consumables
594
526
13
12
1,749
1,365
28
25
Equipment/other
192
180
7
6
589
441
34
31
Total Surgical
1,161
996
17
16
3,444
2,582
33
30
Vision Care
Contact lenses
562
517
9
8
1,606
1,348
19
16
Ocular health
361
305
18
17
1,038
908
14
12
Total Vision Care
923
822
12
11
2,644
2,256
17
15
Net sales to third parties
2,084
1,818
15
14
6,088
4,838
26
23
Surgical primarily driven by advanced technology intraocular
lenses
Surgical net sales of $1.2 billion, which include implantables,
consumables and equipment/other, increased 17%, or 16% on a
constant currency basis, compared to the third quarter of 2020.
Implantables growth reflected market improvements and the ongoing
adoption of advanced technology intraocular lenses, including the
launch of Vivity and continued demand for PanOptix. Consumables
growth primarily reflected market improvements over the prior year
period, and growth in equipment/other was primarily driven by
demand for cataract equipment. For the nine months ended September
30, 2021, Surgical net sales increased 33%, or 30% on a constant
currency basis, compared to the nine months ended September 30,
2020.
Vision Care momentum primarily driven by Precision1 and
Systane
Vision Care net sales of $0.9 billion, which include contact
lenses and ocular health, increased 12%, or 11% on a constant
currency basis, compared to the third quarter of 2020. Contact lens
sales benefited from recovery in select international markets with
continued momentum from the launch of Precision1 and Precision1 for
Astigmatism. Growth in ocular health was led primarily by strong
demand for our brand family of Systane products, as well as sales
of Simbrinza. For the nine months ended September 30, 2021, Vision
Care net sales increased 17%, or 15% on a constant currency basis,
compared to the nine months ended September 30, 2020.
Operating income
Third quarter 2021 operating income was $20 million, which
includes charges of $178 million from the impairment of an
intangible asset and $138 million of amortization. Excluding these
and other adjustments, third quarter 2021 core operating income was
$369 million.
Third quarter core operating margin of 17.7% increased versus
the prior year, mainly driven by higher sales, partially offset by
increases in marketing and selling expenses and research and
development. The prior year core operating margin was impacted by
unabsorbed manufacturing overhead costs and provisions for expected
credit losses related to COVID-19 as well as higher inventory
provisions. Foreign exchange had a positive 40 basis point impact
on third quarter 2021 core operating margin.
Operating income for the nine months ended September 30, 2021
was $398 million, which includes $391 million of amortization and
$223 million of intangible asset impairments. Excluding these and
other adjustments, core operating income for the nine months ended
September 30, 2021 was $1.1 billion. Core operating margin for the
nine months ended September 30, 2021 was 18.0% compared to 10.4%
for the same period last year. Foreign exchange had a positive 50
basis point impact on core operating margin for the nine months
ended September 30, 2021.
Diluted earnings per share (EPS)
Third quarter 2021 diluted earnings per share were $0.00 and
core diluted earnings per share were $0.54. Diluted earnings per
share for the nine months ended September 30, 2021 were $0.48 and
core diluted earnings per share were $1.60.
Balance sheet and cash flow highlights
The Company ended the third quarter with a cash position of $1.6
billion. Current year cash flows benefited from higher sales, lower
separation and transformation payments, partially offset by
increased discretionary spending and higher taxes due to timing of
payments. Cash flows from operations for the first nine months of
2021 totaled $958 million and free cash flow(3) amounted to $578
million, compared to cash flows from operations of $384 million and
free cash flow of $115 million for the same period in the previous
year. The increase in free cash flow was driven by higher cash
flows from operations, partially offset by higher capital
expenditures. Financial debts totaled $4.1 billion, in line with
prior year-end. The Company ended the third quarter with a net
debt(4) position of $2.5 billion. The Company continues to have $1
billion available in its existing revolving credit facility as of
November 9, 2021.
Webcast and Conference Call Instructions
The Company will host a conference call on November 10 at 2:00
p.m. Central European Time / 8:00 a.m. Eastern Time to discuss its
third quarter 2021 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 at the beginning of the conference, or by
clicking on the link:
https://investor.alcon.com/news-and-events/events-and-presentations/event-details/2021/Alcons-Third-Quarter-2021-Earnings-Conference-Call/default.aspx
Footnotes (pages 1-3)
(1)
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.
(2)
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.
(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.
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
Alcon makes regarding its liquidity, revenue, gross margin,
operating margin, effective tax rate, foreign currency exchange
movements, earnings per share, its plans and decisions relating to
various capital expenditures, capital allocation priorities and
other discretionary items, market growth assumptions, plans and
decisions relating to the acquisition of Ivantis, Inc., the
manufacture, distribution, marketing and/or sale of the Hydrus®
Microstent, the ability of Alcon to execute on these plans, and
generally, its expectations concerning its future performance and
the effects of the COVID-19 pandemic on its businesses.
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 as: the effect of the COVID-19
pandemic as well as other viral or disease outbreaks and the
availability and the public’s acceptance of vaccines; 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, including its ability to innovate to
compete effectively; its success in completing and integrating
strategic acquisitions; pricing pressure from changes in third
party payor coverage and reimbursement methodologies; global and
regional economic, financial, legal, tax, political, and social
change; data breaches or other disruptions of its information
technology systems; ongoing industry consolidation; its ability to
properly educate and train healthcare providers on its products;
changes in inventory levels or buying patterns of its customers;
the impact of a disruption in its global supply chain or important
facilities; ability to service its debt obligations; its ability to
comply with the US Foreign Corrupt Practices Act of 1977 and other
applicable anti-corruption laws, particularly given that it has
entered into a three-year Deferred Prosecution Agreement with the
US Department of Justice; uncertainty and impact relating to the
potential phasing out of LIBOR and transition to alternative
reference rates; the need for additional financing through the
issuance of debt or equity; its reliance on outsourcing key
business functions; its ability to protect its intellectual
property; the impact of unauthorized importation of its products
from countries with lower prices to countries with higher prices;
uncertainties regarding the success of Alcon’s separation and
spin-off from Novartis and the subsequent transformation program,
including the expected separation and transformation costs, as well
as any potential savings, incurred or realized by Alcon; the
effects of litigation, including product liability lawsuits and
government investigations; its ability to comply with all laws to
which it may be subject; effect of product recalls or voluntary
market withdrawals; the implementation of its enterprise resource
planning system; its ability to attract and retain qualified
personnel; 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, including quality control of its
manufacturing; 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; its
ability to manage environmental, social and governance matters to
the satisfaction of its many stakeholders, some of which may have
competing interests; 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 impact of being listed on
two stock exchanges; the ability to declare and pay dividends; the
different rights afforded to its shareholders as a Swiss
corporation compared to a US corporation; and the effect of
maintaining or losing its foreign private issuer status under US
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.
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.
Financial tables
Net sales by region
Three months ended September
30
Nine months ended September
30
($ millions unless indicated
otherwise)
2021
2020
2021
2020
United States
939
45
%
846
47
%
2,732
45
%
2,131
44
%
International
1,145
55
%
972
53
%
3,356
55
%
2,707
56
%
Net sales to third parties
2,084
100
%
1,818
100
%
6,088
100
%
4,838
100
%
Consolidated income statement (unaudited)
Three months ended September
30
Nine months ended September
30
($ millions except earnings/(loss) per
share)
2021
2020
2021
2020
Net sales to third parties
2,084
1,818
6,088
4,838
Other revenues
18
20
54
55
Net sales and other revenues
2,102
1,838
6,142
4,893
Cost of net sales
(892
)
(972
)
(2,647
)
(2,778
)
Cost of other revenues
(15
)
(18
)
(49
)
(50
)
Gross profit
1,195
848
3,446
2,065
Selling, general & administration
(779
)
(685
)
(2,263
)
(1,957
)
Research & development
(318
)
(216
)
(662
)
(518
)
Other income
4
7
18
25
Other expense
(82
)
(83
)
(141
)
(238
)
Operating income/(loss)
20
(129
)
398
(623
)
Interest expense
(31
)
(32
)
(92
)
(93
)
Other financial income & expense
(12
)
(7
)
(29
)
(23
)
(Loss)/income before taxes
(23
)
(168
)
277
(739
)
Taxes
25
21
(40
)
113
Net income/(loss)
2
(147
)
237
(626
)
Earnings/(loss) per share ($)
Basic
0.00
(0.30
)
0.48
(1.28
)
Diluted
0.00
(0.30
)
0.48
(1.28
)
Weighted average number of shares
outstanding (millions)
Basic
490.1
489.1
489.9
488.9
Diluted
493.8
489.1
493.2
488.9
Balance sheet highlights
($ millions)
September 30, 2021
December 31, 2020
Cash and cash equivalents
1,565
1,557
Current financial debts
133
169
Non-current financial debts
3,976
3,949
Free cash flow
The following is a summary of free cash flow for the nine months
ended September 30, 2021 and 2020, together with a reconciliation
to net cash flows from operating activities, the most directly
comparable IFRS measure:
Nine months ended September
30
($ millions)
2021
2020
Net cash flows from operating
activities
958
384
Purchase of property, plant &
equipment
(380
)
(269
)
Free cash flow
578
115
Net (debt)/liquidity
($ millions)
At September 30, 2021
Current financial debt
(133
)
Non-current financial debt
(3,976
)
Total financial debt
(4,109
)
Less liquidity:
Cash and cash equivalents
1,565
Derivative financial instruments
8
Total liquidity
1,573
Net (debt)
(2,536
)
Reconciliation of IFRS Results to Core Results
Three months ended September 30, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transformation
costs(4)
Legal items(5)
Other items(7)
Core results
Gross profit
1,195
133
—
—
—
—
(1
)
1,327
Selling, general & administration
(779
)
—
—
3
—
—
—
(776
)
Research & development
(318
)
5
178
—
—
—
(39
)
(174
)
Other income
4
—
—
—
—
—
—
4
Other expense
(82
)
—
—
4
14
50
2
(12
)
Operating income
20
138
178
7
14
50
(38
)
369
(Loss)/income before taxes
(23
)
138
178
7
14
50
(38
)
326
Taxes(8)
25
(24
)
(41
)
—
(3
)
(12
)
(2
)
(57
)
Net income
2
114
137
7
11
38
(40
)
269
Basic earnings per share ($)
0.00
0.55
Diluted earnings per share ($)
0.00
0.54
Basic - weighted average shares
outstanding (millions)(9)
490.1
490.1
Diluted - weighted average shares
outstanding (millions)(9)
493.8
493.8
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Three months ended September 30, 2020
($ millions except (loss)/earnings per
share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transformation
costs(4)
Post- employ- ment
benefits(6)
Other items(7)
Core results
Gross profit
848
250
—
4
—
—
14
1,116
Selling, general & administration
(685
)
—
—
5
—
—
—
(680
)
Research & development
(216
)
5
61
—
—
—
5
(145
)
Other income
7
—
—
—
—
—
(1
)
6
Other expense
(83
)
—
—
39
14
12
—
(18
)
Operating (loss)/income
(129
)
255
61
48
14
12
18
279
(Loss)/income before taxes
(168
)
255
61
48
14
12
18
240
Taxes(8)
21
(44
)
(8
)
(7
)
(3
)
(2
)
(4
)
(47
)
Net (loss)/income
(147
)
211
53
41
11
10
14
193
Basic (loss)/earnings per share ($)
(0.30
)
0.39
Diluted (loss)/earnings per share ($)
(0.30
)
0.39
Basic - weighted average shares
outstanding (millions)(9)
489.1
489.1
Diluted - weighted average shares
outstanding (millions)(9)
489.1
492.0
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Nine months ended September 30, 2021
($ millions except earnings per share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transformation
costs(4)
Legal items(5)
Other items(7)
Core results
Gross profit
3,446
386
45
—
—
—
(1
)
3,876
Selling, general & administration
(2,263
)
—
—
12
—
—
—
(2,251
)
Research & development
(662
)
5
178
—
—
—
(31
)
(510
)
Other income
18
—
—
—
—
—
(1
)
17
Other expense
(141
)
—
—
11
40
50
3
(37
)
Operating income
398
391
223
23
40
50
(30
)
1,095
Income before taxes
277
391
223
23
40
50
(30
)
974
Taxes(8)
(40
)
(70
)
(51
)
(4
)
(8
)
(12
)
(1
)
(186
)
Net income
237
321
172
19
32
38
(31
)
788
Basic earnings per share ($)
0.48
1.61
Diluted earnings per share ($)
0.48
1.60
Basic - weighted average shares
outstanding (millions)(9)
489.9
489.9
Diluted - weighted average shares
outstanding (millions)(9)
493.2
493.2
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Nine months ended September 30, 2020
($ millions except (loss)/earnings per
share)
IFRS results
Amortization of certain
intangible assets(1)
Impairments(2)
Separation costs(3)
Transformation
costs(4)
Post- employ- ment
benefits(6)
Other items(7)
Core results
Gross profit
2,065
752
57
11
—
—
18
2,903
Selling, general & administration
(1,957
)
—
—
14
—
—
—
(1,943
)
Research & development
(518
)
20
61
—
—
—
(6
)
(443
)
Other income
25
—
—
—
—
—
(4
)
21
Other expense
(238
)
—
—
156
34
12
—
(36
)
Operating (loss)/income
(623
)
772
118
181
34
12
8
502
(Loss)/income before taxes
(739
)
772
118
181
34
12
8
386
Taxes(8)
113
(131
)
(22
)
(31
)
(7
)
(2
)
3
(77
)
Net (loss)/income
(626
)
641
96
150
27
10
11
309
Basic (loss)/earnings per share ($)
(1.28
)
0.63
Diluted (loss)/earnings per share ($)
(1.28
)
0.63
Basic - weighted average shares
outstanding (millions)(9)
488.9
488.9
Diluted - weighted average shares
outstanding (millions)(9)
488.9
491.7
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Explanatory footnotes to IFRS Results to Core Results
reconciliation tables
(1)
Includes recurring amortization for all
intangible assets other than software.
(2)
Includes impairment charges related to
intangible assets.
(3)
Separation costs are expected to be
incurred over the two to three-year period following the completion
of the spin-off from Novartis and primarily include costs related
to IT and third party consulting fees.
(4)
Transformation costs, primarily related to
restructuring and third party consulting fees, for the multi-year
transformation program.
(5)
Includes an increase in provisions for
legal matters.
(6)
Includes impact from a pension plan
amendment.
(7)
For the three months ended September 30,
2021, Gross profit includes fair value adjustments to contingent
consideration liabilities. Research & development includes fair
value adjustments to contingent consideration liabilities of $41
million, partially offset by $2 million for the amortization of
option rights. Other expense includes fair value adjustments of
financial assets.
For the three months ended September 30,
2020, Gross profit primarily includes losses on disposal of
property, plant & equipment. Research & development
includes amortization of option rights. Other income includes fair
value adjustments of financial assets.
For the nine months ended September 30,
2021, Gross profit includes fair value adjustments to contingent
consideration liabilities. Research & development includes fair
value adjustments to contingent consideration liabilities of $41
million, partially offset by $10 million for the amortization of
option rights. Other income and Other expense include fair value
adjustments of financial assets.
For the nine months ended September 30,
2020, Gross profit includes $23 million losses on disposal of
property, plant & equipment, partially offset by $5 million
fair value adjustments to contingent consideration liabilities.
Research & development includes a $34 million fair value
adjustment to a contingent consideration liability, partially
offset by $28 million for the amortization of option rights. Other
income includes fair value adjustments of financial assets.
(8)
For the three months ended September 30,
2021, total tax adjustments of $82 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $349 million
totaled $80 million with an average tax rate of 22.9%.
For the three months ended September 30,
2020, total tax adjustments of $68 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $408 million
totaled $65 million with an average tax rate of 15.9%.
For the nine months ended September 30,
2021, total tax adjustments of $146 million include tax associated
with operating income core adjustments of $697 million with an
average tax rate of 20.9%.
For the nine months ended September 30,
2020, total tax adjustments of $190 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $1,125 million
totaled $196 million with an average tax rate of 17.4%. Core tax
adjustments for discrete items totaled $6 million primarily related
to tax expense from the delayed spin of a legal entity.
(9)
For the three and nine months ended
September 30, 2021 and 2020, 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 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 23,000 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 Karen
King Allen Trang + 41 589 112 110 (Geneva) + 1 817 615 2789 (Fort
Worth) investor.relations@alcon.com
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