Alcon Inc.

Hello, and welcome to Alcon's fourth quarter and full year 2019 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please seek the World Conference Specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to your host today, Karen King. Please go ahead, ma'am.

Welcome to Alcon's fourth quarter sales update and full year 2019 conference call. We issued a press release at 20F 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 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 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 Annual Report 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 alternative to, the operating performance measures as prescribed per IFRS. Please review the financial tables provided in the press release and our filings that reconcile non-IFRS measures to directly comparable financial measures presented in accordance with IFRS. In just a few moments, We 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.

Thanks, Karen, and good afternoon to you all. Welcome to today's call. As we wrapped up our first calendar year, I'm pleased to report that we've accomplished a lot, and we have ended the year in a really well position for the future. I'll start by recapping notable highlights from 2019 and recent months, including an update on our new launches and some perspective on market dynamics. And after my comments, Tim will discuss our sales performance by business and provide you with additional color on the financials in China. I'll wrap up with some closing comments before we move to Q&A. Now, as I reflect back on 2019, I'm really proud of what Alcon accomplished in our first nine months of being a new public company. We delivered strong top-line results, ending the year with 5% sales growth, which was at the upper end of our full-year guidance range. We grew core operating income by 4% or 11% on a constant currency basis. And we generated $367 million in free cash flow despite significant spend readiness and separation costs, interest on financial debt, and capital for our new vision care lines. Now, the strong performance was a result of some positive wins and overcoming a few challenges. We start with the headwinds. Foreign currency negatively impacted operating margins in 2019 by 60 basis points. We also had pressure from China tariffs, the uncertainty of Brexit, and a new Japanese consumption tax. And we're still working to offset our flat to declining legacy products like contact lens care with our growth drivers. As far as the tailwinds, we're particularly proud of several accomplishments in 2019, which were driven by our focused strategy and execution. We made some smart decisions around product flow, and our investments are starting to pay off with our third consecutive year of constant currency growth in Topline. Our pipeline is stronger than it has been in years, paving the way for our next decade of innovation in iCare. We had 22 new product approvals and invested in our marquee products like Daily's Total One and Sustain, which have driven strong results. Performance and legacy products, such as consumables and reusable contact lenses, were aided by strong market growth during the year, and we introduced panoptics in the U.S. and Japan, precision one in the U.S., slightly ahead of schedule, and they're executing well in the market. We did all this as an organization while we balanced priorities to stand up new functions, implement SAP, and advance separation and transformation activities all at the same time. Since innovation is the heart of what we do, I'll spend a few minutes on some of our recent launches before moving to market dynamics. Let me start with panoptics. The first trifocal advanced technology that's been in the U.S. market, panoptics is providing something that no other lens has been able to accomplish. The vast majority of panoptic patients are now spectacle-free following cataract surgery. This is important as the panoptics patient is after high performance. They're typically active. They want to be able to count on their near, intermediate, and distance vision without a second thought or without worrying about readers. Our sales team has been placing consignment sets at key accounts since early September, and all accounts currently have access to the lens. Fourth quarter market data shows us gaining over 20 share points in the US PCIOL category in four months, putting our current share at around 55%. We're very excited about the strong reception from our customers and patients in the United States, as well as the strong performance in the quarter. And we're also expanding our IOL portfolio with the introduction of Vividi, a complementary PCIOL lens to Panoptix. We recently began the initial introduction of Vividi in select European markets after receiving CE mark at the end of last year. Vividi is a unique lens with a patented new optical design created to eliminate halos and glare, a problem some patients face with diffractive lenses. It's the first and only lens that provides PCIOL performance with the ease of monofocal patient management. So this lens delivers extended vision and reduces the needs for glasses. We're closely monitoring Vividi's performance in Europe as we await the FDA approval in the U.S. Moving to VisionCare Precision 1, our new CyHi contact lens, which targets the largest segment of the fast-growing daily disposable market. We've made very good progress with our manufacturing lines and currently have unconstrained availability in the United States. As an early data point, after the first four months of launch, we've activated significantly more fit sets compared to DT1 over that same launch period, with twice the average revenue per fit set. By the end of Q2, we should have a first good feel as to whether there have been any material share shifts in the market, and we look forward to that readout. Finally, we're excited to receive approval from the FDA to switch pataday, the number one prescribed allergy ingredient, to an over-the-counter product in drugstores and retail locations starting on March 2nd. We're going to sell two dosage strengths in the U.S., Pataday once daily and Pataday twice daily, which was the former Patenol product. With 66 million Americans suffering from eye allergies, the introduction of Pataday OTC will provide more consumers rapid prescription strength relief this allergy season. This leverages our long history in ocular health OTC products and strong relationships with major retailers and eye care professionals. Now, before I turn the call over to Tim, I'll provide a little color on our end markets. We recently received the latest market share data, and I'll be focusing my comments on the fourth quarter 2019 results. In surgical, global cataract procedures continue to show solid mid-single-digit growth with significant contribution from sales outside the United States. We're pleased with the positive response to our launched innovations as evidenced in the early commercial success of panoptics in Japan and the U.S., In vision care, the contact lens market is seeing a low single-digit increase. The fast-growing part of the market is the daily psi highs, which are growing at 22%, where both dailies total one and precision one are positioned. We're also gaining significant share in the fast-growing daily psi high multifocal market, which is up 34%. That's really through our successful multifocal DT1 campaign, and we're ramping up new manufacturing capacity for precision one. So with that, let me turn it over to Tim, who will review our financial results.