Alcon Inc.

Good day and welcome to the Alcon third quarter 2019 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 telephone keypad. 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 Communications and Investor Relations. Please go ahead.

Welcome to Alcon's third quarter 2019 conference call. We issued a press release in 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. Joining me on today's call are David Endicott, our Chief Executive Officer, and Tim Stonecipher, our Chief Financial Officer. Our quarterly press release, slide presentation, and discussion will include forward-looking statements. We expressly disclaim any obligation to update 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's 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 measure as prescribed per IFRS. Please review the financial tables provided in the press release and our filings that reconcile such non-IFRS measures the 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 growth and constant currency growth, so you can see the impact of foreign currency fluctuations. For discussion purposes, our comments on net sales growth during opening remarks will be expressed in constant currency. And with that, I'll now turn the call over to David.

Good afternoon. Welcome to our third quarter 2019 performance update. We're pleased to report another solid quarter showing strong top-line growth and generating core operating leverage and solid core earnings. It's been a very busy quarter for us. We continue to make good progress in standing up the organization. We refinanced $2 billion of debt, launched two key products in the U.S., and just announced the implementation of a multi-year transformation plan. I'm going to walk you through these items and provide some perspective on sales and market dynamics. And after my comments, Tim will discuss our sales performance by business and provide you with additional color on the financials. I'll wrap it up with some closing comments before moving on to Q&A. First, we continue to make progress in standing up new Alcon. As part of our transformation, we recently completed the implementation of SAP in all our remaining EMEA countries and now have approximately 85% of our sales running through the new system on standardized processes. We expect the SAP implementation spend to be substantially complete by the end of 2021. We're also making significant progress on the installation of our new VisionCare manufacturing lines, with our second site in Singapore ramping up this year. These lines will support our ability to open up capacity required for our global launch of PrecisionOne. Second, we strengthened our capital structure by refinancing $2 billion of our shorter-term debt and extending our average maturity. Third, the Precision One and Panoptic launches in the U.S. are off to a good start. We saw high customer engagement with both launches at the recent American Academy of Ophthalmology and Optometry meetings. The products were very well received with heavy booth traffic, solid scientific presence, and excellent customer participation in launch events. Starting with Precision One, our new CyHi contact lens, which is targeted at the largest segment of the fast-growing daily disposable market, our sales force has been delivering fit sets to targeted customers and we're steadily expanding that distribution. Starting this month and into early next year, our distributors will be able to stock Precision One, and we expect unconstrained availability by the end of Q1 2020. Shifting now to Panoptix for the first trifocal advanced technology intraocular lens to enter the U.S. market. Since early September, our sales force has been placing consignment sets at key accounts. We launched the product with a comprehensive offering by introducing sphere and toric modalities with both blue light and UV options. Although we launched late in the quarter, the reported third quarter market share data shows us gaining eight share points in the U.S. PCIOL category, so a very positive start. We're also encouraged by the progress we've made on Vividi, our new PCIOL that uses a non-diffractive mechanism of action to deliver extended vision, reducing the need for glasses. We published our European clinical data at ESCRS a couple of months ago and have begun a very limited KOL evaluation of the lens in Europe. provide further updates as we get closer to launching this new and novel technology. And finally, we just announced that Alcon is embarking on a multi-year transformation journey. As we've been saying all year, our long-term financial goal of low to mid 20% core operating margin is based on growing our top line faster than our cost structure. We've always said that we had the right amount of costs, but they weren't necessarily in the right places. By allocating our expenses more efficiently, we believe we can create savings to reinvest in new product development and sales and marketing. As we look across the organization, we see many opportunities to rationalize complex processes and eliminate bureaucratic layers that were previously built when we were part of a large pharmaceutical business. So we're streamlining our international commercial model and our back office functions in order to speed up our organization and focus on the highest value activities. Now, this is a multi-year program that will transform Alcon into an organization that's able to concentrate its efforts even more intently on our customers and patients. As a result, we believe that we are creating long-term value for all stakeholders. In just a couple minutes, Tim will provide a few more details and discuss the financial implications of that program. But first, let me give you an overview of our quarterly results. We delivered another quarter of solid performance. Overall sales were up 6% for the quarter and 5% for the first nine months of the year. Surgical continues to grow a little bit above market with growth of 7% in the quarter and 6% year-to-date. VisionCare is growing at or slightly below the market with growth of 4% both the quarter and year-to-date. Let me provide a little color on both our end markets. For surgical, we estimate cataract procedures grew in the mid-single digits this quarter driven by significant international volume growth. And for VisionCare, contact lens market growth for the third quarter also increased in the mid-single digits. We believe that some of the market growth this quarter was a result of buying behavior in advance of the increase in Japanese consumption tasks. With that, let me turn it over to Tim, who will review our financial results.