Alcon(US:ALC)2025-02-25 21:31Financial Performance - Net sales for Q4 2024 reached $2.477 billion, a 6% increase year-over-year, with a full-year total of $9.836 billion, reflecting a 5% growth [2]. - Gross profit for Q4 was $1.385 billion, up 7% from the previous year, with a full-year gross profit of $5.512 billion, also a 5% increase [13]. - Operating income for Q4 increased by 90% to $395 million, with a full-year operating income of $1.413 billion, a 36% rise [14]. - Core operating income for Q4 was $498 million, a 13% increase year-over-year, with a full-year core operating income of $2.027 billion, up 10% [16]. - The company reported a net income of $284 million for Q4, a 33% decrease year-over-year, with a full-year net income of $1.018 billion, a 5% increase [2]. - Core net income for the full year was $1.5 billion, an 11% increase compared to $1.4 billion in the prior year [49]. - Net income for the year ended December 31, 2024, increased to $1,018 million, up from $974 million in 2023, representing a growth of 4.5% [79]. - Total comprehensive income for 2024 was $952 million, compared to $964 million in 2023, reflecting a decrease of 1.2% [79]. Segment Performance - Surgical segment net sales for Q4 were $1.423 billion, a 5% increase, with full-year sales of $5.522 billion, reflecting a 4% growth [5]. - Vision Care segment net sales for Q4 reached $1.054 billion, an 8% increase, with full-year sales of $4.314 billion, a 6% rise [10]. - Contact lenses sales for Q4 were $638 million, a 10% increase, with full-year sales of $2.609 billion, up 9% [12]. - Surgical segment contribution was $1.5 billion for the full year, up 1% year-over-year, with a segment contribution margin decrease of 0.8 percentage points [26]. - Vision Care segment contribution reached $962 million, a 24% increase year-over-year, with a segment contribution margin increase of 3.1 percentage points [27]. Operating Metrics - Operating margin for Q4 improved to 15.9%, a 7 percentage point increase, with a full-year operating margin of 14.4%, up 3.3 percentage points [14]. - Core operating margin increased by 1.4 percentage points on a constant currency basis, despite a negative impact from currency fluctuations [19]. - Operating loss not allocated to segments improved to $1.0 billion, a 15% reduction compared to the prior year [28]. Cash Flow and Investments - Net cash flows from operating activities amounted to $2.1 billion, up from $1.4 billion in the prior year, driven by higher sales collections [50]. - Free cash flow reached $1.6 billion in 2024, significantly up from $730 million in the previous year, driven by increased cash flows from operating activities and reduced capital expenditures [57]. - Net cash flows used in investing activities amounted to $1.2 billion in 2024, an increase from $1.1 billion in the prior year, primarily due to capital expenditures and the acquisition of BELKIN Vision Ltd. [53]. Debt and Equity - Net debt decreased to $2.8 billion as of December 31, 2024, down by $841 million from $3.6 billion in the previous year, with liquidity improving to $1.8 billion [63]. - Total equity rose to $21.6 billion as of December 31, 2024, reflecting an increase of $929 million compared to the prior year [62]. - Total non-current liabilities decreased to $6.5 billion as of December 31, 2024, down from $6.6 billion in the previous year, primarily due to a reduction in financial debts [60]. - The average maturity of financial debts was 9.8 years as of December 31, 2024, with 98% of the debt at fixed interest rates, indicating a stable financial structure [64]. Research and Development - Research and development expenses for Q4 were $232 million, a 12% increase from the previous year, with full-year expenses of $876 million, up 6% [13]. - Research and development expenses for the three months ended December 31, 2024, were $157 million, compared to $130 million in 2023, indicating a 20.8% increase [103]. Shareholder Returns - Basic and diluted earnings per share for the full year were $2.06 and $2.05, respectively, compared to $1.98 and $1.96 in the prior year [48]. - The company paid dividends of $131 million in 2024, up from $117 million in 2023, indicating a growth of 12% [79]. - The company authorized a share repurchase program of up to $750 million on February 25, 2025, to offset dilution from equity-based incentive plans [66]. Acquisitions and Divestments - Alcon completed the divestment of product rights in China for $116 million, receiving approximately 16.7% of the ordinary shares of Ocumension as part of the agreement [90]. - The acquisition of BELKIN Vision Ltd. was finalized for a total consideration of $92 million, which included $20 million of previously-held fair value investments [91]. - Alcon divested rights in China for Bion Tears and Tears Naturale, receiving $116 million in up-front consideration and potential additional payments of up to $50 million [159]. - The divestment transaction resulted in a net gain of approximately $57 million recognized in other income [160]. Miscellaneous - The company received a Civil Investigative Demand from the US Department of Justice regarding discounts on surgical equipment servicing contracts [150]. - The transformation program was completed in the fourth quarter of 2023, which included restructuring and consulting fees [191].