Alcon Inc.

Hello, and welcome to Alcon's second quarter 2021 earnings call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. We ask that you please ask one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karen Kink, Senior Vice President, Investor Relations and Corporate Affairs. Karen, please go ahead.

Welcome to Alcon's second quarter 2021 earnings conference call. Yesterday, we issued a press release and interim financial report and posted a supplemental side 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 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 on 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 outcomes form 20F and our earnings press release and interim financial report on file with the Securities and Exchange Commission and available on the SEC's website at 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 in 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 see a reconciliation between our non-IFRS measures with directly comparable measures presented in accordance with IFRS in our second quarter earnings presentation, which can be found on our investor relations website. For discussion purposes, we are providing comparisons of 2021 versus 2019 unless otherwise noted. While you need to take into account a two-year period, we believe the comparison versus 2019 is more operationally meaningful since our results were significantly impacted in the second quarter of 2020 by the pandemic. You will find a summary of results comparing 2021, 2020, and 2019 in our slide presentation and a comparison of 2021 versus 2020 in our press release and interim financials. As usual, Our comments on growth are expressed in constant currency. With that, I will now turn the call over to David.

Thanks, Karen, and good afternoon, everyone. Welcome to our second quarter earnings call. I'll begin by providing a brief update on our second quarter, overall market dynamics, and recent performance. After my comments, Tim will discuss our second quarter performance and our updated outlook for the full year, and I'll wrap up with some closing remarks and we'll open the call for Q&A. And we had a very strong second quarter with the highest quarterly sales and earnings since our spinoff. This was driven primarily by demand for new product innovation and solid commercial execution, coupled with strong market recovery in the United States. Q2 sales of $2.1 billion were up 11% versus 2019, with increases across all sales categories in surgical and vision care. Core operating margin improved to 18.2%. and core diluted earnings per share improved to 56 cents. Overall, our surgical franchise continues to outperform the market. We're growing share with our latest advanced technology IOLs. Consumables have returned to growth in line with the recovery and procedural volumes, and we continue to see strong demand for our equipment. Our vision care franchise also returned to growth over 2019. Our new product launches are gaining momentum and expanding our market share despite variable recovery in international markets. Precision One continues to be our leading brand for new and switch fits, even though new fits are still down globally. Consumer demand for patented extra strength has been better than expected, and our sustained brand family is posting strong growth, aided by our newest products, Sustain Ultra and Hydration Multi-Dose Preservative Free. Moving to our end markets by franchise. In surgical, the global cataract surgery market was down versus 2019, with the U.S. showing solid growth over 2019 and international markets below the 2019 levels. That's primarily due to suppressed markets like Japan and India. Against these market conditions, we are gaining PCI well share and outperforming the market, driven by our strong U.S. performance. In vision care, the contact lens market was up slightly versus the second quarter of 2019, And similar to Surgical, the U.S. market has returned to growth while the international markets have not yet returned to 2019 levels. Nonetheless, we are gaining global contact lens share and outperforming the market, driven by our strong U.S. performance. Moving to innovation and investments, in PCIOLs, we remain the market leader, and our share continues to grow with over 55% of global share and over 80% share in the United States. The continued adoption of Vividi at Panoptix is driving ATI oil penetration above its historical rates. Furthermore, Vividi is exceeding our expectations in launch markets and is largely incremental to Panoptix sales. The growth in ATI oils is driven by both existing surgeons increasing their use of advanced technology lenses and the conversion of new surgeons who traditionally preferred monofocals and Torex but are now implanting Vividi. While we do expect surgeons to try new competitive lenses, we're confident that the superior performance of our products, as supported by a growing body of clinical evidence, will sustain our market leadership. At the recent ASCRS conference, both Panoptix and Vividi earned a significant share of voice at the podium, with many surgeons discussing the incredible quality of vision from both lenses. Now moving to our equipment business, we're piloting our comprehensive cloud-based digital health solutions platform, our SmartSuite, which is designed to help ophthalmology practices streamline and create efficiencies in the cataract workflow. At the center of our equipment ecosystem is our cloud-based smart cataract application. This platform seamlessly connects the clinic to the OR, enabling surgeons to improve productivity and patient outcomes. We showcased our current platform recently at ASCRS, and we'll begin to expand the additional accounts at the American Academy of Ophthalmology in November. In VisionCare, PrecisionOne, our newest daily SciHigh lens, continues to gain momentum. PrecisionOne Sphere and Toric are now available in the U.S. and Europe, and we've introduced PrecisionOne Sphere in Japan. We're excited to see our share gains in Sphere and Toric continue to drive our global market share, which has increased for the second quarter in a row. In Daily's Sci-Hi, the fastest-growing contact lens category, we estimate we've gained approximately five share points globally since 2019 as a result of our new product flow. Additionally, we'll begin introducing Daily's Total One for astigmatism to select accounts in the U.S. this fall and are planning for a broader launch early 2022. We expect this launch will reinforce the leadership of Daily's Total One as the industry gold standard and bring more customers to the Daily's family. We've also begun to introduce Total 30, which we expect to launch commercially in the U.S. and select European markets later this year. This product builds on the brand promise of Daily's Total 1 by delivering premium comfort to reusable wearers who account for two-thirds of the lens-wearing population. The reusable market is approximately $4 billion, and our market share is currently in the high teens. So given our low share and the positive early feedback from our key accounts, we're confident we can expand our share position. In ocular health, we saw strong retail and consumer interest for our Pataday allergy drop portfolio, led by the successful introduction of Pataday Extra Strength during a particularly strong allergy season this year. The convenience of the prescription-strength allergy product available over-the-counter is very appealing to consumers, and we're excited to offer this premium, patent-protected product to a wider customer base. In dry ice, sustained sales continue to grow globally, reinforcing its leadership in artificial tiers. We launched sustained hydration multidose preservative-free during the second quarter in the United States. With our continued investment in innovation, we believe there's a significant opportunity to increase preservative-free penetration in the U.S. and grow our MDPF share internationally. As part of our strategy to grow our eyedrops business in ophthalmic channel, we've begun building a dedicated sales force for ophthalmology in the United States. This team will also sell pataday and simbrinza, a prescription glaucoma eyedrop. We closed the acquisition of U.S. commercial rights for Simbrinza in June, and the product is now contributing to net sales. So overall, our second quarter performance demonstrates the strength of our businesses and focused execution of our strategic priorities. Strong commercial execution behind our new product launches drove continued share gains, despite a more challenging international environment. As markets return to growth, we believe the benefit of these share gains will manifest in continued top-line growth. In manufacturing, we're installing more contact lens lines to keep up with demand and deliver steady product flow as we expand our portfolio and our market reach. Finally, we continue to invest in R&D to deepen our new product pipeline with exciting high-care innovation for the coming years. Now with that, let me pass it to Tim. We'll take you through our financial results and provide an updated outlook for 21.