Alcon Reports Fourth Quarter and Full Year 2020 Results
Alcon reported Q4 and full-year 2020 financial results, revealing a 2% increase in Q4 sales to $1.9 billion compared to Q4 2019. However, full-year sales fell 8% to $6.8 billion. Q4 diluted EPS was $0.19 with core diluted EPS at $0.41. Full-year diluted losses per share were $1.09, while core diluted EPS was $1.04. The company noted strong recovery in the second half of 2020 following COVID-19 impacts. A proposed dividend of CHF 0.10 per share has been announced, pending shareholder approval in April 2021.
- Q4 2020 sales grew 2% year-over-year to $1.9 billion.
- Core diluted EPS for Q4 2020 was $0.41.
- Strong sales performance in North America in Q4 2020.
- Successful innovation pipeline with new product launches.
- Full-year sales decreased 8% compared to 2019.
- Operating loss in 2020 was $482 million.
- Q4 core operating margin decreased to 14.9% from 17.1% year-over-year.
- Surgical sales decreased 11% for the full year.
Alcon (SIX/NYSE:ALC), the global leader in eye care, reported its financial results for the fourth quarter and full year ended December 31, 2020. For the fourth quarter of 2020, worldwide sales were
Fourth quarter and full year 2020 key figures
|
|
Three months ended
|
|
Twelve months ended
|
||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales ($ millions) |
|
1,925 |
|
1,881 |
|
6,763 |
|
7,362 |
Operating margin (%) |
|
|
|
(3.6)% |
|
(7.1)% |
|
(2.5)% |
Core operating margin (%)(1) |
|
|
|
|
|
|
|
|
Earnings/(Loss) per share ($) |
|
0.19 |
|
(0.19) |
|
(1.09) |
|
(1.34) |
Core diluted earnings per share ($)(1) |
|
0.41 |
|
0.45 |
|
1.04 |
|
1.89 |
"2020 was an extraordinary year as our 23,000+ associates around the globe navigated the challenges of a global health crisis. Amid this uncertainty, we made significant progress on our strategic priorities. Our innovation pipeline continues to deliver exciting new products for 2021, which will create meaningful benefits for our patients and customers, fuel our top line trajectory and capture market share," said David Endicott, Chief Executive Officer.
Mr. Endicott continued, "The ongoing recovery of our business is a testament to the durability of our end markets, agility and motivation of our associates, and our ability to create value and address unmet needs with an exciting pipeline of innovation."
Fourth quarter and full year 2020 results
Worldwide sales for the fourth quarter were
For the twelve months ended December 31, 2020, worldwide sales were
The following table highlights net sales by segment for the fourth quarter and full year of 2020:
|
|
Three months ended
|
|
Change % |
|
Twelve months ended
|
|
Change % |
||||||||||||||||
($ millions unless indicated otherwise) |
|
2020 |
|
2019 |
|
$ |
|
cc(2) |
|
2020 |
|
2019 |
|
$ |
|
cc(2) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Surgical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Implantables |
|
350 |
|
|
338 |
|
|
4 |
|
|
4 |
|
|
1,126 |
|
|
1,210 |
|
|
(7 |
) |
|
(6 |
) |
Consumables |
|
587 |
|
|
594 |
|
|
(1 |
) |
|
(3 |
) |
|
1,952 |
|
|
2,304 |
|
|
(15 |
) |
|
(15 |
) |
Equipment/other |
|
191 |
|
|
172 |
|
|
11 |
|
|
10 |
|
|
632 |
|
|
660 |
|
|
(4 |
) |
|
(3 |
) |
Total Surgical |
|
1,128 |
|
|
1,104 |
|
|
2 |
|
|
1 |
|
|
3,710 |
|
|
4,174 |
|
|
(11 |
) |
|
(11 |
) |
Vision Care |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Contact lenses |
|
490 |
|
|
460 |
|
|
7 |
|
|
5 |
|
|
1,838 |
|
|
1,969 |
|
|
(7 |
) |
|
(7 |
) |
Ocular health |
|
307 |
|
|
317 |
|
|
(3 |
) |
|
(3 |
) |
|
1,215 |
|
|
1,219 |
|
|
— |
|
|
1 |
|
Total Vision Care |
|
797 |
|
|
777 |
|
|
3 |
|
|
1 |
|
|
3,053 |
|
|
3,188 |
|
|
(4 |
) |
|
(4 |
) |
Net sales to third parties |
|
1,925 |
|
|
1,881 |
|
|
2 |
|
|
1 |
|
|
6,763 |
|
|
7,362 |
|
|
(8 |
) |
|
(8 |
) |
4Q20 Surgical growth driven by innovation
Surgical net sales of
4Q20 Vision Care growth driven by contact lenses; Precision1 gaining momentum
Vision Care net sales of
Operating income/loss
Fourth quarter 2020 operating income was
Operating loss for the twelve months ended December 31, 2020 was
Diluted earnings/losses per share (EPS)
Fourth quarter 2020 diluted earnings per share were
Diluted losses per share for the twelve months ended December 31, 2020 were
Proposed dividend
The Company's Board of Directors proposed a dividend of CHF 0.10 per share, based on 2020 financial results. The Company's shareholders will vote on this proposal at the 2021 Annual General Meeting on April 28, 2021.
Balance sheet highlights
The Company ended the fourth quarter with a cash position of
Financial Outlook
Due to the uncertain scope and duration of the ongoing COVID-19 outbreak, the Company is unable to provide an estimate for financial results for the full year 2021.
The Company is managing discretionary spend in line with sales recovery, and phasing capital expenditures while continuing with separation, transformation and strategic investment priorities. In addition, the Company is focused on preparing its commercial programs to support the market recovery.
Webcast and Conference Call Instructions
The Company will host a conference call on February 24 at 2:00 p.m. Central European Time / 8:00 a.m. Eastern Time to discuss its full year and fourth quarter 2020 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 2020 Annual Report, which will be available on https://investor.alcon.com/financials/annual-reports/default.aspx. Alcon will also file its 2020 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:
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 prior year and comparing them to prior year values in US dollars. An explanation of non-IFRS measures can be found in the 'Non-IFRS measures as defined by the Company' section. |
(3) |
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. |
(4) |
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. |
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, 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, 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 forward-looking statements are subject to various risks and uncertainties facing Alcon, including: the effect of the COVID-19 pandemic as well as other viral or disease outbreaks; 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 on 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.
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
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 prior year and comparing them to the prior year values in US dollars.
Free cash flow
Alcon defines free cash flow as net cash flows from operating activities less cash flow associated with the purchase or sale of property, plant and equipment. Free cash flow is presented as additional information because Alcon management believes it is a useful supplemental indicator of Alcon's ability to operate without reliance on additional borrowing or use of existing cash. Free cash flow is not intended to be a substitute measure for net cash flows from operating activities as determined under IFRS.
Net (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 December 31 |
|
Twelve months ended December 31 |
||||||||||||||||
($ millions unless indicated otherwise) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
United States |
|
844 |
|
44 |
% |
|
780 |
|
41 |
% |
|
2,975 |
|
44 |
% |
|
3,055 |
|
41 |
% |
International |
|
1,081 |
|
56 |
% |
|
1,101 |
|
59 |
% |
|
3,788 |
|
56 |
% |
|
4,307 |
|
59 |
% |
Net sales to third parties |
|
1,925 |
|
100 |
% |
|
1,881 |
|
100 |
% |
|
6,763 |
|
100 |
% |
|
7,362 |
|
100 |
% |
Consolidated income statement (unaudited)
|
|
Three months ended December 31 |
|
Twelve months ended December 31 |
|||||||
($ millions except earnings/(loss) per share) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
2019 |
|
Net sales to third parties |
|
1,925 |
|
|
1,881 |
|
|
6,763 |
|
7,362 |
|
Other revenues |
|
15 |
|
|
32 |
|
|
70 |
|
146 |
|
Net sales and other revenues |
|
1,940 |
|
|
1,913 |
|
|
6,833 |
|
7,508 |
|
Cost of net sales |
|
(1,052 |
) |
|
(972 |
) |
|
(3,830 |
) |
(3,719 |
) |
Cost of other revenues |
|
(13 |
) |
|
(28 |
) |
|
(63 |
) |
(127 |
) |
Gross profit |
|
875 |
|
|
913 |
|
|
2,940 |
|
3,662 |
|
Selling, general & administration |
|
(737 |
) |
|
(714 |
) |
|
(2,694 |
) |
(2,847 |
) |
Research & development |
|
(155 |
) |
|
(164 |
) |
|
(673 |
) |
(656 |
) |
Other income |
|
210 |
|
|
20 |
|
|
235 |
|
55 |
|
Other expense |
|
(52 |
) |
|
(123 |
) |
|
(290 |
) |
(401 |
) |
Operating income/(loss) |
|
141 |
|
|
(68 |
) |
|
(482 |
) |
(187 |
) |
Interest expense |
|
(31 |
) |
|
(34 |
) |
|
(124 |
) |
(113 |
) |
Other financial income & expense |
|
(6 |
) |
|
(5 |
) |
|
(29 |
) |
(32 |
) |
Income/(loss) before taxes |
|
104 |
|
|
(107 |
) |
|
(635 |
) |
(332 |
) |
Taxes |
|
(9 |
) |
|
16 |
|
|
104 |
|
(324 |
) |
Net income/(loss) |
|
95 |
|
|
(91 |
) |
|
(531 |
) |
(656 |
) |
|
|
|
|
|
|
|
|||||
Earnings/(loss) per share ($) |
|||||||||||
Basic |
|
0.19 |
|
|
(0.19 |
) |
|
(1.09 |
) |
(1.34 |
) |
Diluted |
|
0.19 |
|
|
(0.19 |
) |
|
(1.09 |
) |
(1.34 |
) |
|
|
|
|
|
|
|
|||||
Weighted average number of shares outstanding (millions) |
|||||||||||
Basic |
|
489.2 |
|
|
488.2 |
|
|
489.0 |
|
488.2 |
|
Diluted |
|
492.4 |
|
|
488.2 |
|
|
489.0 |
|
488.2 |
|
Balance sheet highlights
($ millions) |
|
December 31, 2020 |
|
|
December 31, 2019 |
|
Cash and cash equivalents |
|
1,557 |
|
|
822 |
|
Current financial debts |
|
169 |
|
|
261 |
|
Non-current financial debts |
|
3,949 |
|
|
3,218 |
|
Free cash flow
The following is a summary of Alcon free cash flow for the twelve months ended December 31, 2020 and 2019, together with a reconciliation to net cash flows from operating activities, the most directly comparable IFRS measure:
|
Twelve months ended December 31 |
||||
($ millions) |
2020 |
|
|
2019 |
|
Net cash flows from operating activities |
823 |
|
|
920 |
|
Purchase of property, plant & equipment |
(479 |
) |
|
(553 |
) |
Proceeds from sale of property, plant & equipment |
6 |
|
|
— |
|
Free cash flow |
350 |
|
|
367 |
|
Net (debt)/liquidity
($ millions) |
At December 31, 2020 |
|
Current financial debts |
(169 |
) |
Non-current financial debts |
(3,949 |
) |
Total financial debt |
(4,118 |
) |
|
|
|
Less liquidity: |
|
|
Cash and cash equivalents |
1,557 |
|
Derivative financial instruments |
3 |
|
Total liquidity |
1,560 |
|
Net (debt) |
(2,558 |
) |
Reconciliation of IFRS to Core Results
Three months ended December 31, 2020
($ millions except earnings per share) |
IFRS
|
|
Amortization
|
|
Impairments(2) |
|
Separation
|
|
Transformation
|
|
Post-
|
|
Other
|
|
Core
|
|
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 to Core Results' tables.
Three months ended December 31, 2019
($ millions except (loss)/earnings per share) |
IFRS
|
|
Amortization
|
|
Separation
|
|
Transformation
|
|
Other
|
|
Core
|
|
Gross profit |
913 |
|
253 |
|
3 |
|
— |
|
5 |
|
1,174 |
|
Operating (loss)/income |
(68 |
) |
269 |
|
82 |
|
39 |
|
(1 |
) |
321 |
|
(Loss)/income before taxes |
(107 |
) |
269 |
|
82 |
|
39 |
|
(1 |
) |
282 |
|
Taxes(8) |
16 |
|
(36 |
) |
(17 |
) |
(4 |
) |
(18 |
) |
(59 |
) |
Net (loss)/income |
(91 |
) |
233 |
|
65 |
|
35 |
|
(19 |
) |
223 |
|
Basic (loss)/earnings per share ($) |
(0.19 |
) |
|
|
|
|
0.46 |
|
||||
Diluted (loss)/earnings per share ($) |
(0.19 |
) |
|
|
|
|
0.45 |
|
||||
Basic - weighted average shares outstanding (millions)(9) |
488.2 |
|
|
|
|
|
488.2 |
|
||||
Diluted - weighted average shares outstanding (millions)(9) |
488.2 |
|
|
|
|
|
491.0 |
|
||||
|
|
|
|
|
|
|
||||||
Adjustments to arrive at core operating income |
|
|
|
|
||||||||
Selling, general & administration |
(714 |
) |
— |
|
9 |
|
— |
|
1 |
|
(704 |
) |
Research & development |
(164 |
) |
16 |
|
1 |
|
— |
|
(4 |
) |
(151 |
) |
Other income |
20 |
|
— |
|
— |
|
— |
|
(8 |
) |
12 |
|
Other expense |
(123 |
) |
— |
|
69 |
|
39 |
|
5 |
|
(10 |
) |
Refer to the associated explanatory footnotes at the end of the 'Reconciliation of IFRS to Core Results' tables.
Reconciliation of IFRS to Core results (continued)
Twelve months ended December 31, 2020
($ millions except (loss)/earnings per share) |
IFRS
|
|
Amortization
|
|
Impairments(2) |
|
Separation
|
|
Transformation
|
|
Post-
|
|
Other
|
|
Core
|
|
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 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 to Core Results' tables.
Twelve months ended December 31, 2019
($ millions except (loss)/earnings per share) |
IFRS
|
|
Amortization
|
|
Separation
|
|
Transformation
|
|
Legal
|
|
Other
|
|
Core
|
|
Gross profit |
3,662 |
|
1,007 |
|
10 |
|
— |
|
— |
|
(16 |
) |
4,663 |
|
Operating (loss)/income |
(187 |
) |
1,040 |
|
237 |
|
52 |
|
32 |
|
91 |
|
1,265 |
|
(Loss)/income before taxes |
(332 |
) |
1,040 |
|
237 |
|
52 |
|
32 |
|
91 |
|
1,120 |
|
Taxes(8) |
(324 |
) |
(140 |
) |
(54 |
) |
(7 |
) |
(8 |
) |
338 |
|
(195 |
) |
Net (loss)/income |
(656 |
) |
900 |
|
183 |
|
45 |
|
24 |
|
429 |
|
925 |
|
Basic (loss)/earnings per share ($) |
(1.34 |
) |
|
|
|
|
|
1.89 |
|
|||||
Diluted (loss)/earnings per share ($) |
(1.34 |
) |
|
|
|
|
|
1.89 |
|
|||||
Basic - weighted average shares outstanding (millions)(9) |
488.2 |
|
|
|
|
|
|
488.2 |
|
|||||
Diluted - weighted average shares outstanding (millions)(9) |
488.2 |
|
|
|
|
|
|
490.1 |
|
|||||
|
|
|
|
|
|
|
|
|||||||
Adjustments to arrive core operating income |
|
|
|
|
|
|
|
|||||||
Selling, general & administration |
(2,847 |
) |
— |
|
30 |
|
— |
|
— |
|
15 |
|
(2,802 |
) |
Research & development |
(656 |
) |
33 |
|
4 |
|
— |
|
— |
|
35 |
|
(584 |
) |
Other income |
55 |
|
— |
|
— |
|
— |
|
— |
|
(9 |
) |
46 |
|
Other expense |
(401 |
) |
— |
|
193 |
|
52 |
|
32 |
|
66 |
|
(58 |
) |
Refer to the associated explanatory footnotes at the end of the 'Reconciliation of IFRS 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 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) |
For the three months ended December 31, 2020, Other income includes impacts from post-employment benefit plan amendments. |
|
For the twelve months ended December 31, 2020, Other income and other expense include impacts from pension and other post-employment benefit plan amendments. |
(6) |
Includes legal settlement costs and certain external legal fees. |
(7) |
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 |
|
For the three months ended December 31, 2019, Gross profit includes |
|
For the twelve months ended December 31, 2020, Gross profit includes |
|
For the twelve months ended December 31, 2019, Gross profit includes |
(8) |
For the three months ended December 31, 2020, total tax adjustments of |
|
For the three months ended December 31, 2019, total tax adjustments of |
|
For the twelve months ended December 31, 2020, total tax adjustments of |
|
For the twelve months ended December 31, 2019, total tax adjustments of |
(9) |
Core basic earnings per share was 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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