Alcon Inc.

Good day and welcome to Alcon's second quarter 2019 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Karen King, Senior Vice President of Investor Relations and Communications.

Please go ahead. Welcome to Alcon's second quarter 2019 conference call. Today, we are discussing our mid-year results from our headquarters in beautiful Geneva, Switzerland. We issued a press release and interim financial results yesterday and posted a supplemental slide presentation a few hours ago to our website to enhance today's call. You can find all three documents in the investor relations section of our website at www.investor.alcon.com. We have also posted our third quarter earnings date and several upcoming investor relations activities on our corporate calendar. which you can find under Events and then Presentations. Joining me on today's call are David Endicott, our Chief Executive Officer, and Tim Stone-Seifer, our Chief Financial Officer. Our quarterly press release, slide presentation, and discussion will include forward-looking statements. We do not intend to and expressly disclaim any obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements. Important factors that could cause our actual results to differ materially from those in our forward-looking statements are included in Alcon's Earnings Press Release and Form 20F Registration Statement on file with the Securities and Exchange Commission and available on the SEC website at www.sec.gov. Included in the press release are selected non-IFRS measures. Company management uses these measures as aids in monitoring the company's ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking purposes. Non-IFRS financial measures used by the company may be calculated differently from and therefore may not be comparable to similarly titled measures used by other companies. These non-IFRS financial measures should be considered along with but not as alternatives to the operating performance measures as prescribed per IFRS. Please review the financial tables provided in the press release and our filings that reconcile such non-IFRS measures to directly comparable financial measures presented in accordance with IFRS. In just a few moments, David and Tim will be discussing net sales results for the quarter and year to date. In our press release, we provide a table that shows both reported net sales and constant currency growth so you can see the impact of foreign currency fluctuations. For discussion purposes, our comments on net sales growth during our opening remarks will be expressed in constant currency. And with that, I'll now turn the call over to David.

Welcome to our second quarter 2019 performance update. We're almost five months post-spin and settling nicely into our independence, and we're pleased with our first half performance in the organization that's making great progress against the strategy we laid out at our Capital Markets Day. We focused the organization on three big priorities, which we have communicated to all our associates. The first priority is to stand up the new Alcon. This includes things like standing up new functions, implementing SAP, separating IT systems, and ensuring supply, while maintaining our focus on the customer, advancing the pipeline, and otherwise operating as business as usual. We feel good about the progress on all these activities, which will remain the focus over the next 18 to 24 months. The second priority is to grow revenue. We are a products company at our core, and on our capital markets day last year, we identified and discussed four key growth drivers, which are contributing significantly to our strong first half sales performance. As a reminder, these are advanced technology interocular lenses, or ATIOLs for cataract surgery, Daly's Total One contact lenses, sustained complete eye drops for dry eye, and surgical products to treat retinal conditions. We are leveraging our deep expertise in eye care to expand our product pipeline and incubate future platforms for growth. We're already seeing the impact of iterative innovation, like our smaller gauge consumable instrumentation, and we'll shortly see the impact of new products with the upcoming launch of our newest contact lens, Precision One, in the U.S. The third priority is transforming our culture. Now that we're independent, we can move full steam ahead on creating a culture that lets us move quickly and take full advantage of market opportunities. So what does that mean? We're placing two asks on every associate, regardless of where they sit in the organization. The first is to increase ownership and accountability, and the second is to operate with greater speed and simplicity. So as we continue our transition from a large company environment to a smaller, focused medical device company, our 20,000 associates are helping us to spot areas where we can be more efficient and really ensure our people and investments are focused toward our core growth drivers. This ensures our associates always have a customer-first mentality. So speaking to customers, I recently spent several weeks on the road in the U.S. with a number of surgical and vision care customers, receiving valuable insights and feedbacks on our business. What I'm hearing is that our customers are excited about the new Alcon and where we're headed. There's a lot of enthusiasm for our innovative pipeline and specifically some of our newest products, like Precision One and Panoptix. Our customers have high expectations of Alcon as an independent company, which is a big part of what's driving the organization to succeed. Before I turn it over to Tim to go through the detailed financials, I wanted to touch on sales performance, current market trends, and then also a little bit on innovation. I'm pleased to report we delivered strong top-line results with both our surgical and vision care businesses performing well. Overall, sales were up 5%. That's for both the quarter and the first half of the year. In the quarter, our surgical business was up 5%, and our vision care business up 6% with all product categories posting mid-single-digit growth. On a year-to-date basis, surgical was up 6% and vision care up 3%, which puts us on track to deliver the full year guidance of 3% to 5% constant currency growth. We recently received the latest round of surgical and vision care market data. Now, for surgical, cataract procedure growth has remained consistent with historical trends up approximately 4% in the second quarter. For vision care, contact lens market growth for the second quarter increased by approximately 4% on a value basis, with toric and multifocal growth outpacing Sphere. We also saw stable market performance in reusable lenses, which were up almost 2% during the second quarter, driven by the U.S. and Japan. Now, we're very excited to be bringing Precision One, our new SightHigh contact lens, to the fast-growing daily disposal market. We're doing a little bit better than expected in wrapping up our new manufacturing lines, which is facilitating a slightly earlier launch than we originally anticipated. Our sales force is trained and we will enter the market in a highly organized fashion, starting with select customers and then steadily expanding our distribution into early 2020. Our investments are paying off and we're making good use of our capital. We expect these new lines to provide better throughput and a lower cost per lens at optimal capacity all on a more flexible platform. We're also being very deliberate in how we position our existing and forthcoming contact lens brands. Last February, we completed a comprehensive study of about 8,000 patients and 1,200 eye care professionals, which looked at the lifestyle, functional, and emotional needs of contact lens wearers. We found that customer needs can be broken down into three distinct segments, smart value, lasting performance, and ultimate comfort. Now, with Precision One, we are offering a robust daily contact lens portfolio with products that target each one of those segments. So to start with the smart value segment, we offer Daly's AquaComfort Plus, or DACP, for the younger, more value-conscious patient where price is the primary buying decision. On the other end of the spectrum is the ultimate comfort segment, where customers are looking for a premium lens experience. This segment is where Daly's Total One plays, as our unique water gradient technology provides superior comfort. The final segment is lasting performance, which is where PrecisionOne fits in. This is a large, underserved group of customers who are looking for lasting performance at the end of the day. These customers live an active lifestyle and rely on their contacts to perform from early in the morning to late at night and are willing to pay a little more for this feature. We also ran multiple clinical trials with PrecisionOne versus competitive lenses. PrecisionOne performed extremely well in these trials. and we are anticipating a favorable response from professionals in the United States. Now, moving on to Panoptix. We submitted our dossier to the FDA in the first quarter of 2019 and are expecting regulatory approval this year. Panoptix is a trifocal IOL that provides uninterrupted vision at near, intermediate, and distance, and will likely be the first trifocal in the U.S. market. With the increasing demands of near reading due to the use of mobile devices and electronic tools, people are now spending more time using products at arm's length. The near focal point of panoptics is set at a distance, which is compatible with this lifestyle change, which is one of the significant advantages of panoptics versus traditional bifocals or other trifocal technologies. Our continuous IOL innovation enables us to help surgeons significantly improve cataract patient outcomes. By default, patients accept the need to wear spectacles after monofocal cataract surgery. However, advances in IOL allow for a greater degree of spectacle independence, which is important to the increasingly active aging population. Research finds that patients using panoptics experience spectacle independence 80% to 85% of the time post-surgery, compared with 7% to 12% of patients who undergo monofocal surgery. Panoptix has driven strong market share gains in international markets, where the product has been available for a few years, and strong word of mouth has made Panoptix one of our most anticipated U.S. launches. With that, let me turn it over to Tim, who will review our financial results.