Alcon Inc.

Good day and welcome to Alcon's third quarter 2020 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. Please note this event is being recorded. I would now like to turn the conference over to Karen Kink, Senior Vice President of Investor Relations and Communications. Please go ahead.

Welcome to Alcon's third quarter earnings conference call. Yesterday, we issued a press release and interim financial report and posted a supplemental slide presentation on our website to enhance today's call. You can find all of these 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, 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 Form 20F, our Form 6K furnished on May 12, 2020, and our Earnings Press Release and Interim Financial Report. online with the Securities and Exchange Commission, and available on the SEC's website at www.sec.gov. 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 for IFRS. Please review the financial tables provided in the press release and our filings that reconcile non-IFRS measures to directly comparable measures presented in accordance with IFRS. For discussion purposes, our comments on growth are expressed in constant currency. And with that, I'll now turn the call over to David.

Good morning and good afternoon to everyone. For today's call, I'll start by recapping our third quarter performance, discuss current market dynamics and our strategic priorities. Tim will discuss our third quarter results and provide more color on our outlook for recovery. Then I'll wrap up my closing comments and open the call up for Q&A. Our third quarter results demonstrate a solid recovery from the second quarter with sales of $1.8 billion, just 1% shy of last year. Core margin of 15.3% and core EPS of $0.39. This significant rebound is a result of both improving market conditions and strong execution, which enabled us to outperform the market led by double-digit sales growth in the United States. The strong US performance was offset by our international business, which had a mixed pace of recovery in various regions. Our results this quarter demonstrate the resilience of our people and our ability to execute on our priorities in the current environment. First, we remain focused on our associates. During the course of this pandemic, we've kept our associates fully employed while maintaining continuous operations. About half our employees are in production, and we've worked through the pandemic in order to ensure doctors and patients can receive the eye care products they need. We appreciate their commitment and dedication. We've advanced our separation activities on schedule, despite having most of our office-based teams working from home. We've accelerated our IT migration carve-out and exited more than 90% of our transition service agreements. Recent investments in our global planning and forecasting platform and the successful commercial implementation of SAP have increased real-time visibility to our customers' needs. At this point, we expect to exit all our TSAs with Novartis at the end of April 2021. Our transformation program continues on schedule as we stand up our global service centers, simplify processes, and streamline work in our core support functions. We're building the right mindset around continuous improvement, which is critical to developing organizational efficiency. We're also becoming a more agile company. In response to COVID's impact on sales, we've reduced costs substantially and pivoted to digital technology to augment our customer engagement. In the third quarter, our sales force quickly implemented digital marketing campaigns and virtual training programs, which drove tremendous word of mouth and share a voice in recent industry congresses. This is an important capability that enables us to stay connected with our customers in these challenging times. We continue to invest in new contact lens manufacturing lines to support product launches such as Precision One and, more importantly, increase our presence in the growing sky-high Toric market. And we continue to advance our R&D portfolio of products that address significant customer needs. We look forward to sharing more about our pipeline at our virtual investor update early next year. Now, turning to innovation. We're building excitement in the market with our new product launches, which is evidenced by strong growth and market share gains. Panoptix, our trifocal IOL for cataract surgery, continues to perform extremely well in some of the newly launched countries, such as the U.S. and Japan, with Alcon now accounting for over 75% share of the U.S. PC IOL market. More recently, Panoptix was launched in a controlled manner in China. Initial feedback by both surgeons and patients has been very positive, and we're gaining share with target private hospital groups. We plan to extend distribution to a broad number of hospitals during the fourth quarter. Vividi, the world's first non-diffractive extended depth of focus lens, has received favorable feedback from doctors that participated in our pilot program in Europe. Vividi has proven to be a great lens for all patients, and surgeons are excited to use the lens for patients who may be concerned about visual disturbances. Prior to Vividi, these patients would not have been ideal candidates for advanced technology IOLs. Customer satisfaction has been high, and we are in the midst of rolling out Vividi to major markets across Europe. Sales at PrecisionOne, our newest daily sci-high contact lens, have nearly doubled from the sales levels earlier this year, driven by increased adoption and conversion. Through strong commercial execution, Alcon now has the leading share in new and switch fits in the daily sphere category. And Precision One is outperforming the first year of our successful daily Total One launch. We've also introduced Precision One for Astigmatism to select U.S. accounts last month. Early feedback has been superb, and we're now prioritizing the launch of Precision One for Astigmatism in the U.S. and Europe early next year. In fact, we plan to launch both Precision Sphere and TORIC in Europe within the same quarter, which is a first for Alcon and the industry. We believe launching both modalities concurrently significantly strengthens the impact of our Precision One brand family. Combined with Daly's Total One Sphere and Multifocal as our premium offering, we'll have a more comprehensive offering of lenses for both the premium segment and the middle market. Moving forward, we've made the decision to focus our resources on those brands. We will make a future call on the launch timing of Daly's Total One Tauric once we have Precision One Sphere and Tauric fully established in our key geographies. Lastly, Pataday continues to reinforce our leadership position in the U.S. over-the-counter ocular allergy market, and we've recently launched Sustain Ultra Multidose Preservative Free, or MDPF, in Germany, our first entry into the preservative-free market in Europe. As I've said before, Sustain Multidose Preservative Free will open the doors to exciting share opportunities that build on Alcon's global dry eye readership. Turning to our markets, we saw strong improvements in both surgical and vision care during the third quarter. The trend for global cataract procedures rebounded from a 50% plus decline in the second quarter to an approximate 15% decline in the third quarter. In vision care, the contact lens market declined 5% in the third quarter after declining a little over 20% in Q2. While the daily disposal market declined around 4%, we were the leading share gainer. PrecisionOne and VT1 combined contributed to share gains in both the global sphere and multifocal category, which were partly offset by declines in toric. As I mentioned earlier, we're excited to be launching PrecisionOne for astigmatism in the U.S. and other key markets in early 21, which allows us to compete in the daily sci-hi toric market. Over the past six months, we've conducted various surveys of our doctors and patients across several markets, and I want to share just a couple of highlights. First, more than 70% of our respondents indicated a willingness to pay a premium for a better contact lens. Unlike glasses, contact lenses do not fog up when one's wearing a facial mask. We believe that consumers' emphasis on health and wellness will drive demand for better lens performance, and as a result, we believe Precision 1 and Daily's Total 1 are well-positioned for long-term growth. Second, 80% of Americans are spending more time in front of screens during the pandemic, and 45% are reporting dry eye because of this increased screen time. The growing awareness of eye health and dry eye will give consumers a reason to visit their eye care professionals and seek out our ocular health products, giving our sustained brand family a steady growth market over time. And third, on the surgical side, monthly cataract referrals in the U.S. have returned to close to 70% of where they were prior to the pandemic. That's a very positive sign that surgeons are sufficiently refilling their pipeline and not just performing surgery on prior patients that have been rescheduled for their procedure. So going forward, we're pleased with the strength of our underlying performance. As COVID cases tick up in some markets and safety measures are implemented, other markets continue to bounce back. So while it's not entirely clear where the market trajectory will be, we're confident in our competitive position. With that, let me turn it over to Tim. We'll take you through some of the financial highlights and provide color on our outlook.