Alcon (NYSE: ALC) FY Conference Summary Company Overview - Alcon is an eye care company focused on addressing significant vision-related concerns, particularly among the elderly, such as refractive errors, presbyopia, and dry eye [2][3] - The company invests approximately $1 billion annually in developing eye care programs and products [3] Surgical Business Insights - The surgical market remains solid, with expectations of continued growth driven by an aging population and increasing demand for cataract surgeries [4] - Historically, the market has grown at a rate of 4% to 5% [4] - Alcon has a diverse portfolio of products for cataract surgery, including innovations in intraocular lenses (IOLs) and phacoemulsification machines [5] - The company plans to launch 10 to 15 new products in the coming years, enhancing its market presence [5] Unity Platform and Efficiency - The Unity platform aims to improve efficiency in cataract surgery by integrating diagnostic data into a cloud planner, enhancing procedural planning and outcomes [6][7] - The Unity VCS phacoemulsification machine has shown significant efficiency gains, allowing surgeons to perform more surgeries per day [8][9] - Bench tests indicate that the Unity 4D phaco machine is 48% faster than traditional methods, with reduced energy delivery to the eye [10][11] Product Innovations - The PanOptix IOL has been successful, with an upgraded version launched to improve light utilization and reduce glare and halos [12] - New product launches include the TruePlus monofocal lenses, which enhance intermediate vision without compromising distance vision [13] - The vision care segment is stable, with expected market growth of 4% to 6% [14] Vision Care and Pharmaceuticals - Alcon's TripTier product, a novel dry eye treatment, has received positive feedback and is expected to gain reimbursement support [19][36] - The company is expanding its contact lens offerings and has seen strong growth in the preservative-free eye drop market, which is growing at 20% [17][18] Market Dynamics and Competitive Landscape - The IOL market is competitive, with new entrants and pricing pressures expected [33][34] - Alcon aims to maintain its premium pricing by emphasizing the quality and effectiveness of its products [35] Financial Performance and Projections - Alcon generates approximately $2 billion in free cash flow annually, which can be used for various strategic initiatives [23][45] - The company anticipates margin expansion of 150 to 200 basis points, despite some pressure from investments and tariffs [42][43] Strategic Outlook - Alcon remains focused on organic growth and innovation, with a disciplined approach to potential M&A opportunities [46][50] - The company is cautious about market guidance, acknowledging the unusual conditions of the previous year but maintaining a long-term growth outlook [51] Additional Considerations - Alcon is not currently interested in entering the pharmaceutical space for presbyopia treatments due to concerns about side effects [52] - The trend of private equity acquiring ophthalmology practices has slowed, with challenges in achieving desired economic efficiencies [53][54] This summary encapsulates the key points from Alcon's FY Conference, highlighting the company's strategic focus, market dynamics, and product innovations in the eye care industry.

J.P. Morgan Healthcare Conference David J. Endicott Chief Executive Officer January 13th, 2026 Safe harbor Forward-looking statements This document 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," ...

Core Insights - Alcon, Inc. reported third-quarter 2025 core earnings per share (EPS) of 79 cents, a decrease of 2.5% year-over-year, but exceeded the Zacks Consensus Estimate by 2.6% [1] - The company's net sales for the quarter were $2.59 billion, reflecting a 6.4% increase from the previous year, although it slightly missed consensus expectations [2] - Alcon maintained its 2025 financial guidance, projecting net sales between $10.30 billion and $10.40 billion, indicating a year-over-year growth of 4-5% at constant exchange rates [9] Revenue Breakdown - Alcon operates through two segments: Surgical and Vision Care [3] - Surgical sales reached $1.40 billion, up 6% year-over-year, with notable growth in Equipment/Other sales, which increased by 13% at constant exchange rates [4] - Vision Care segment reported total sales of $1.20 billion, a 7% increase year-over-year, driven by product innovation in Contact Lenses and Ocular Health [5] Margin Performance - The cost of net sales was $1.14 billion, up 6.8% year-over-year, while gross profit rose 6.1% to $1.45 billion, leading to a slight contraction in gross margin to 56.1% [6] - Selling, General and Administrative (SG&A) expenses increased by 6.9%, and Research and Development (R&D) expenses rose by 11.1%, resulting in an operating margin contraction of 71 basis points to 13% [6] Financial Position - Alcon ended the third quarter with cash and cash equivalents of $1.50 billion, an increase from $1.41 billion at the end of the previous quarter [8] - Cumulative net cash flow from operating activities was $1.61 billion, slightly down from $1.62 billion in the year-ago period, while free cash flow totaled $1.20 billion compared to $1.3 billion a year ago [8] Product Launches and Acquisitions - Alcon is experiencing early demand for new products like Unity VCS and PanOptix Pro, which are expected to drive future growth [12] - The company announced a merger agreement to acquire STAAR Surgical, enhancing its presence in myopia correction, and completed the acquisition of LumiThera, adding the Valeda PBM device to its portfolio [13]

Financial Performance Highlights - Third-quarter net sales reached $2.6 billion, a 6% increase year-over-year on a reported basis and a 5% increase in constant currency[16] - Third-quarter core diluted EPS was $0.79[12] - The company's free cash flow for the first nine months of the year was $1.2 billion[15] Segment Performance - Surgical net sales in the third quarter were $1.42 billion, up 6% on a reported basis and 5% in constant currency[23] - Vision Care net sales in the third quarter were $1.169 billion, up 6% on a reported basis and 5% in constant currency[24] - For the first nine months of 2025, Vision Care accounted for 45% ($3.4 billion) and Surgical accounted for 55% ($4.2 billion) of the company's $7.6 billion in sales[22] Profitability Metrics - Third-quarter IFRS operating margin was 12.8%, a decrease of 80 basis points year-over-year[16] - Third-quarter core operating margin was 20.2%, a decrease of 40 basis points year-over-year[14] - For the first nine months of 2025, the IFRS operating margin was 13.7%[32] - For the first nine months of 2025, the core operating margin was 20.0%[45] Outlook - The company maintained its full-year 2025 net sales outlook of $10.3 to $10.4 billion, representing a 4% to 5% increase in constant currency[57] - The company maintained its full-year 2025 core diluted EPS outlook of $3.05 to $3.15, representing a 0% to +2% increase in constant currency[57]