- Fourth Quarter 2021 sales of $2.1 billion, up 11% or 13%
constant currency
- Full Year 2021 sales of $8.2 billion, up 22% or 20% constant
currency
- Above-market growth in both Surgical and Vision Care; sales
momentum from key products, new product launches and commercial
execution
- Full Year 2021 cash from operations of $1.3 billion, free
cash flow of $645 million
- 2022 guidance reflects continued sales and 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 fourth quarter and full year ended
December 31, 2021. For the fourth quarter of 2021, worldwide sales
were $2.1 billion, an increase of 11% on a reported basis and 13%
on a constant currency basis(2), as compared to the same quarter of
the previous year. Fourth quarter 2021 diluted earnings per share
were $0.28 and core diluted earnings per share were $0.56. Full
year 2021 diluted earnings per share were $0.76 and core diluted
earnings per share were $2.15.
Fourth quarter and full year 2021 key figures
Three months ended December
31
Twelve months ended December
31
2021
2020
2021
2020
Net sales ($ millions)
2,134
1,925
8,222
6,763
Operating margin (%)
8.5%
7.3%
7.1%
(7.1)%
Core operating margin (%)(1)
16.3%
14.9%
17.6%
11.7%
Diluted earnings/(loss) per share ($)
0.28
0.19
0.76
(1.09)
Core diluted earnings per share ($)(1)
0.56
0.41
2.15
1.04
“I am extremely proud of all that we accomplished in 2021. We
have secured our position as the global leader in eye care, and our
2021 performance demonstrates the resilience of our business, the
strength of our innovation engine and the expertise of our
commercial organization,” said David J. Endicott, Alcon’s Chief
Executive Officer. “Our strong product flow resulted in revenue
growth above-market, which drove core operating leverage and margin
expansion.”
“Our success is underpinned by our strategy of investing behind
markets with high growth or high share opportunities,” Mr. Endicott
continued. “We are entering 2022 with substantial momentum, driven
by innovative products that address unmet customer and patient
needs. All of these factors give us confidence in our long-term
strategy and in delivering shareholder value.”
Fourth quarter and full year 2021 results
Worldwide sales for the fourth quarter 2021 were $2.1 billion,
an increase of 11% on a reported basis and 13% on a constant
currency basis, compared to the fourth quarter of 2020. Eye care
markets in the fourth quarter reflected the recovery in the United
States and the continuing recovery internationally from the
COVID-19 pandemic. Worldwide sales for full year 2021 were $8.2
billion, an increase of 22% on a reported basis and 20% on a
constant currency basis, compared to 2020.
The following table highlights net sales by segment for the
fourth quarter and full year 2021:
Three months ended December
31
Change %
Twelve months ended December
31
Change %
($ millions unless indicated
otherwise)
2021
2020
$
cc(2)
2021
2020
$
cc(2)
Surgical
Implantables
416
350
19
21
1,522
1,126
35
34
Consumables
639
587
9
11
2,388
1,952
22
21
Equipment/other
204
191
7
8
793
632
25
24
Total Surgical
1,259
1,128
12
14
4,703
3,710
27
25
Vision Care
Contact lenses
533
490
9
11
2,139
1,838
16
15
Ocular health
342
307
11
13
1,380
1,215
14
12
Total Vision Care
875
797
10
12
3,519
3,053
15
14
Net sales to third parties
2,134
1,925
11
13
8,222
6,763
22
20
Surgical product innovation drives above-market growth
Surgical net sales of $1.3 billion, which include implantables,
consumables and equipment/other, increased 12%, or 14% on a
constant currency basis, compared to the fourth quarter of 2020.
Implantables growth reflected market improvements and ongoing
adoption of advanced technology intraocular lenses, led by the
launch of Vivity. Consumables growth primarily reflected market
improvements. Growth in equipment/other was primarily driven by
cataract equipment. For the full year 2021, Surgical net sales
increased 27%, or 25% on a constant currency basis, compared to
2020.
SiHy contact lenses and Systane drive above-market growth in
Vision Care
Vision Care net sales of $0.9 billion, which include contact
lenses and ocular health, increased 10%, or 12% on a constant
currency basis, compared to the fourth quarter of 2020. Contact
lens sales benefited from growth in silicone hydrogel (SiHy)
contact lenses, including Precision1, Precision1 for Astigmatism
and Dailies Total1, and continuing recovery in international
markets. Growth in ocular health was led by strong demand for our
brand family of Systane artificial tear products, as well as the
addition of Simbrinza glaucoma eye drops. For the full year 2021,
Vision Care net sales increased 15%, or 14% on a constant currency
basis, compared to 2020.
Operating income
Fourth quarter 2021 operating income was $182 million, which
includes charges of $138 million for the amortization of certain
intangible assets. Excluding this and other adjustments, fourth
quarter 2021 core operating income was $348 million.
Fourth quarter 2021 core operating margin of 16.3% increased
versus the fourth quarter of 2020. Higher sales were partially
offset by increases in marketing and selling expenses and higher
associate short-term incentive benefits. The prior year period was
impacted by unabsorbed manufacturing overhead costs and higher
inventory provisions. Foreign exchange had a negative 50 basis
point impact on fourth quarter 2021 core operating margin.
Operating income for the twelve months ended December 31, 2021
was $580 million, which includes $529 million for the amortization
of certain intangible assets and $225 million of intangible asset
impairments. Excluding these and other adjustments, core operating
income for the twelve months ended December 31, 2021 was $1.4
billion. Core operating margin for the twelve months ended December
31, 2021 was 17.6% compared to 11.7% in 2020. Foreign exchange had
a positive 30 basis point impact on core operating margin for the
twelve months ended December 31, 2021.
Diluted earnings per share (EPS)
Fourth quarter 2021 diluted earnings per share were $0.28 and
core diluted earnings per share were $0.56. Diluted earnings per
share for the twelve months ended December 31, 2021 were $0.76 and
core diluted earnings per share were $2.15.
Proposed dividend
The Company's Board of Directors proposed a dividend of CHF 0.20
per share, based on 2021 financial results. The Company's
shareholders will vote on this proposal at the 2022 Annual General
Meeting on April 27, 2022.
Balance sheet and cash flow highlights
The Company ended the fourth quarter with a cash position of
$1.6 billion. Current year cash flows benefited from higher sales,
lower separation and lower transformation payments, partially
offset by increased discretionary spending, increased inventories
and increased taxes due to timing of payments and increased
profitability. Cash flows from operations for 2021 totaled $1.3
billion and free cash flow(3) amounted to $645 million, compared to
cash flows from operations of $823 million and free cash flow of
$350 million in the previous year. The increase in free cash flow
was driven by higher cash flows from operating activities,
partially offset by increased purchases of property, plant and
equipment. Financial debts totaled $4.1 billion, in line with prior
year-end. The Company ended the fourth 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 February
15, 2022.
2022 outlook
The Company provided its full year 2022 outlook as follows. This
outlook assumes that markets grow over 2021 in line with historical
averages; that the impact from inflation moderates in the second
half of the year; and that exchange rates as of mid-January 2022
prevail through year-end.
2022 outlook
Change vs. 2021 actuals
(cc)(2)
Net sales
$8.7 to $8.9 billion
+7% to +9%
Core operating margin(1)
18% to 19%
Interest expense and Other financial
income & expense
$180 to $190 million
Core effective tax rate(5)
17% to 19%
Core diluted EPS(1)
$2.35 to $2.45
+13% to +18%
Webcast and Conference Call Instructions
The Company will host a conference call on February 16 at 2:00
p.m. Central European Time / 8:00 a.m. Eastern Time to discuss its
fourth quarter and full year 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.
Today, Alcon will issue its 2021 Annual Report, which will be
available on
https://investor.alcon.com/financials/annual-reports/default.aspx.
Alcon will also file its 2021 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 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/2022/Alcons-Fourth-Quarter-and-Full-Year-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.
(5)
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, market growth assumptions, and generally, our
expectations concerning our future performance and the effects of
the COVID-19 pandemic on our businesses.
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 U.S. Department of Justice; our success in
completing and integrating strategic acquisitions; the impact of a
disruption in our global supply chain or important facilities; the
effect of the COVID-19 pandemic as well as other viral or disease
outbreaks; global and regional economic, financial, legal, tax,
political and social change; the commercial success of our products
and our ability to maintain and strengthen our position in our
markets; the success of our research and development efforts,
including our ability to innovate to compete effectively; pricing
pressure from changes in third party payor coverage and
reimbursement methodologies; ongoing industry consolidation; our
ability to properly educate and train healthcare providers on our
products; the impact of unauthorized importation of our products
from countries with lower prices to countries with higher prices;
our reliance on outsourcing key business functions; changes in
inventory levels or buying patterns of our customers; our ability
to attract and retain qualified personnel; our ability to service
our debt obligations; the need for additional financing through the
issuance of debt or equity; our ability to protect our intellectual
property; the effects of litigation, including product liability
lawsuits and governmental investigations; our ability to comply
with all laws to which we may be subject; effect of product recalls
or voluntary market withdrawals; the implementation of our
enterprise resource planning system; the accuracy of our accounting
estimates and assumptions, including pension and other
post-employment benefit plan obligations and the carrying value of
intangible assets; 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; legislative, tax 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; our
ability to manage environmental, social and governance matters to
the satisfaction of our many stakeholders, some of which may have
competing interests; 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 U.S. 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)
2021
2020
2021
2020
United States
919
43 %
844
44 %
3,651
44 %
2,975
44 %
International
1,215
57 %
1,081
56 %
4,571
56 %
3,788
56 %
Net sales to third parties
2,134
100 %
1,925
100 %
8,222
100 %
6,763
100 %
Consolidated Income Statement (unaudited)
Three months ended December
31
Twelve months ended December
31
($ millions except earnings/(loss) per
share)
2021
2020
2021
2020
Net sales to third parties
2,134
1,925
8,222
6,763
Other revenues
15
15
69
70
Net sales and other revenues
2,149
1,940
8,291
6,833
Cost of net sales
(930
)
(1,052
)
(3,577
)
(3,830
)
Cost of other revenues
(13
)
(13
)
(62
)
(63
)
Gross profit
1,206
875
4,652
2,940
Selling, general & administration
(813
)
(737
)
(3,076
)
(2,694
)
Research & development
(180
)
(155
)
(842
)
(673
)
Other income
25
210
43
235
Other expense
(56
)
(52
)
(197
)
(290
)
Operating income/(loss)
182
141
580
(482
)
Interest expense
(28
)
(31
)
(120
)
(124
)
Other financial income & expense
(13
)
(6
)
(42
)
(29
)
Income/(loss) before taxes
141
104
418
(635
)
Taxes
(2
)
(9
)
(42
)
104
Net income/(loss)
139
95
376
(531
)
Earnings/(loss) per share ($)
Basic
0.28
0.19
0.77
(1.09
)
Diluted
0.28
0.19
0.76
(1.09
)
Weighted average number of shares
outstanding (millions)
Basic
490.1
489.2
490.0
489.0
Diluted
494.2
492.4
493.4
489.0
Balance sheet highlights
($ millions)
December 31, 2021
December 31, 2020
Cash and cash equivalents
1,575
1,557
Current financial debts
114
169
Non-current financial debts
3,966
3,949
Free cash flow
The following is a summary of free cash flow for the twelve
months ended December 31, 2021 and 2020, together with a
reconciliation to net cash flows from operating activities, the
most directly comparable IFRS measure:
Twelve months ended December
31
($ millions)
2021
2020
Net cash flows from operating
activities
1,345
823
Purchase of property, plant &
equipment
(700
)
(479
)
Proceeds from sale of property, plant
& equipment
—
6
Free cash flow
645
350
Net (debt)/liquidity
($ millions)
At December 31, 2021
Current financial debt
(114
)
Non-current financial debt
(3,966
)
Total financial debt
(4,080
)
Less liquidity:
Cash and cash equivalents
1,575
Equity securities of public companies
3
Derivative financial instruments
3
Total liquidity
1,581
Net (debt)
(2,499
)
Reconciliation of IFRS Results to Core Results
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
Adjustments to arrive at core operating
income
Selling, general & administration
(813
)
—
—
7
—
—
—
(806
)
Research & development
(180
)
4
2
—
—
—
2
(172
)
Other income
25
—
—
—
—
(16
)
(1
)
8
Other expense
(56
)
—
—
6
28
—
—
(22
)
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Three months ended December 31, 2020
($ 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
875
249
49
2
—
—
14
1,189
Operating income
141
249
49
36
15
(166
)
(37
)
287
Income before taxes
104
249
49
36
15
(166
)
(37
)
250
Taxes(8)
(9
)
(41
)
(12
)
(6
)
(3
)
40
(16
)
(47
)
Net income
95
208
37
30
12
(126
)
(53
)
203
Basic earnings per share ($)
0.19
0.41
Diluted earnings per share ($)
0.19
0.41
Basic - weighted average shares
outstanding (millions)(9)
489.2
489.2
Diluted - weighted average shares
outstanding (millions)(9)
492.4
492.4
Adjustments to arrive at core operating
income
Selling, general & administration
(737
)
—
—
8
—
—
—
(729
)
Research & development
(155
)
—
—
—
—
—
(19
)
(174
)
Other income
210
—
—
—
—
(166
)
(32
)
12
Other expense
(52
)
—
—
26
15
—
—
(11
)
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
Adjustments to arrive at core operating
income
Selling, general & administration
(3,076
)
—
—
19
—
—
—
—
(3,057
)
Research & development
(842
)
9
180
—
—
—
—
(29
)
(682
)
Other income
43
—
—
—
—
(16
)
—
(2
)
25
Other expense
(197
)
—
—
17
68
—
50
3
(59
)
Refer to the associated explanatory footnotes at the end of the
'Reconciliation of IFRS Results to Core Results' tables.
Twelve months ended December 31, 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(5)
Other items(7)
Core results
Gross profit
2,940
1,001
106
13
—
—
32
4,092
Operating (loss)/income
(482
)
1,021
167
217
49
(154
)
(29
)
789
(Loss)/income before taxes
(635
)
1,021
167
217
49
(154
)
(29
)
636
Taxes(8)
104
(172
)
(34
)
(37
)
(10
)
38
(13
)
(124
)
Net (loss)/income
(531
)
849
133
180
39
(116
)
(42
)
512
Basic (loss)/earnings per share ($)
(1.09
)
1.05
Diluted (loss)/earnings per share ($)
(1.09
)
1.04
Basic - weighted average shares
outstanding (millions)(9)
489.0
489.0
Diluted - weighted average shares
outstanding (millions)(9)
489.0
491.8
Adjustments to arrive at core operating
income
Selling, general & administration
(2,694
)
—
—
22
—
—
—
(2,672
)
Research & development
(673
)
20
61
—
—
—
(25
)
(617
)
Other income
235
—
—
—
—
(166
)
(36
)
33
Other expense
(290
)
—
—
182
49
12
—
(47
)
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)
Includes an increase in provisions for
legal matters.
(7)
For the three months ended December 31,
2021, Research & development includes the amortization of
option rights. Other income includes fair value adjustments of
financial assets.
For the three months ended December 31,
2020, Gross profit includes losses on disposal of property, plant
& equipment and a fair value adjustment of a contingent
consideration liability. Research & development includes a $26
million fair value adjustment of a contingent consideration
liability, partially offset by $7 million in expenses primarily
related to the amortization of option rights. Other income includes
a gain relating to an extinguishment of certain potential
liabilities under the employee matters agreement executed at
spin-off 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. Research & development includes fair
value adjustments to contingent consideration liabilities of $41
million, partially offset by $12 million for the amortization of
option rights. Other income and Other expense include fair value
adjustments of financial assets.
For the twelve months ended December 31,
2020, Gross profit includes $35 million primarily for losses on
disposal of property, plant & equipment, partially offset by $3
million in fair value adjustments to contingent consideration
liabilities. Research & development includes $60 million in
fair value adjustments to contingent consideration liabilities,
partially offset by $35 million in expenses primarily related to
the amortization of option rights. Other income includes a gain
relating to an extinguishment of certain potential liabilities
under the employee matters agreement executed at spin-off and fair
value adjustments of financial assets.
(8)
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 three months ended December 31,
2020, total tax adjustments of $38 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $146 million
totaled $25 million with an average tax rate of 17.1%. Core tax
adjustments for discrete items totaled $13 million, primarily
related to a change in estimate related to periods prior to the
spin-off.
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%.
For the twelve months ended December 31,
2020, total tax adjustments of $228 million include tax associated
with operating income core adjustments and discrete tax items. Tax
associated with operating income core adjustments of $1.3 billion
totaled $221 million with an average tax rate of 17.4%. Core tax
adjustments for discrete items totaled $7 million.
(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 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 24,000 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 Daniel Cravens Allen Trang + 41 589 112 110 (Geneva) + 1
817 615 2789 (Fort Worth) investor.relations@alcon.com
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