Alcon Inc.

Greetings. Welcome to Alcon's third quarter 2021 earnings call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Karen King, Senior Vice President, Head of Global Corporate Affairs, NIR. You may begin.

Welcome to Alcon's third quarter 2021 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 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 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 third quarter earnings presentation, which can be found on the investor relations website. As a reminder, for discussion purposes, we are providing comparisons of 2021 versus 2019, unless otherwise noted, as we believe this is more operationally meaningful since our results were impacted by the pandemic in 2020. We will continue this practice through the end of the year. 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. And with that, I'll now turn the call over to David.

welcome to alcon's third quarter 2021 earnings call i'll begin by providing a brief update on our third quarter overall market dynamics and our new innovative products after my comments tim will discuss our third quarter performance and our outlook for the full year then i'll wrap up with some closing remarks and we'll open it up for a q a now we're pleased to announce we had another strong quarter despite markets that are still recovering similar to the second quarter This was driven primarily by demand for new product innovation, solid commercial execution, and strong market recovery in the United States. Recovery in our international markets remains mixed. Although we're encouraged to see signs of recovery in select European markets late in the quarter, other countries like Japan, which is our second largest market, continue to be impacted by the pandemic. Third quarter sales of 2.1 billion were up 13% versus 2019. with increases across all sales categories in surgical and vision care. Core operating margin was 17.7%, and core diluted earnings per share was 54 cents. Customer interest and need for our new products are driving above-market growth, and in surgical, our portfolio of advanced technology intraocular lenses is driving increased penetration rates of ATIOLs, and we continue to see strong demand for cataract and refractive equipment. In vision care, our new contact lenses are winning in the market, and our sustained brand family is posting strong double-digit growth in all regions. Now, moving to our end markets by franchise, in surgical, the global cataract surgery market was relatively consistent with last quarter. Excluding India, the global market was down mid-single digits versus 2019. While the U.S. showed solid mid-single-digit growth over 2019, the international market's remained down high single digits, primarily due to emerging markets and Japan, which continue to be suppressed. Against this backdrop, our implantables business continued to outpace the market driven by our strong ATIOL performance. In vision care, the contact lens market was flat to slightly up versus the third quarter of 2019. Similar to surgical, the U.S. market has returned to growth, while international markets are approaching 2019 levels. Our contact lens business grew significantly faster than the market, driven by the strong performance of PrecisionOne. And moving to innovation, in surgical, we maintained our strong market share in PCIOLs, solidifying our position as the market leader. This is driven by strong demand for our new innovative products, Panoptix and Vivity, despite new market entrants. We continue to see ATIOL penetration rates increasing sequentially as existing surgeons increase their use of advanced technologies, and as surgeons who traditionally preferred monofocals and Torex are now implanting Vividi. Vividi is the first and only PCI well with wavefront shaping technology and a clinically proven exceptionally low rate of visual disturbances. Surgeons appreciate the consistency of patient outcomes without the worry of halos and glare. In our equipment business, our products and innovations remain a favorite of surgeons. including our market-leading FACO equipment, our Active Sentry handpiece, the Luxor Revalium microscope, and the Argos biometer. Earlier this week, we unveiled the latest evolution of cataract connectivity with Smart Cataract. Designed specifically for ophthalmology, this new cloud-based application delivers planning, connectivity, and analysis to improve cataract surgery efficiency, reliability, and accuracy. This is the next step in the evolution of our equipment ecosystem and further enhances the value of our new innovations. Installations of our first application, Smart Cataract, are underway with select customers in the United States. In VisionCare, we're expanding our contact lens offerings to the premium and middle market segments by launching a steady stream of new silicone hydrogel daily and reusable products. In the premium segment, we're building out our total brand with a complete portfolio of design options. In addition to our existing DALYS Total 1 sphere and multifocal lenses, we're now adding DALYS Total 1 for astigmatism to capture the premium toric market, and also Total 30 to capture the premium reusable market. DALYS Total 1 for astigmatism has been eagerly anticipated by eye care professionals for years. This lens provides a significant opportunity in a fast-growing segment where only one in four astigmatic patients are wearing toric lenses. Select customers in the U.S. are already fitting the lens. Early feedback has been very positive, and we're excited for the broader commercial launch early next year. Now, Total30 addresses the large $4 billion reusable market, which hasn't seen any significant innovation in years. Total30 is now available to wearers in the U.S. and Europe, and early reception has been strong. This lens brings the water gradient feature of DALYS Total 1 into a monthly lens, creating a comfortable lens which feels like nothing on day 1 and on day 30. Now moving to the middle market segment, the strong performance of Precision 1 and Precision 1 for Astigmatism continues to drive our above-market growth in the Total DALYS market. Both the Sphere and Toric designs are currently available in the US and Europe, and Precision 1 Sphere is available in Japan. As more international markets recover, we believe we are well positioned to drive steady growth with PrecisionOne. Finally, in ocular health, we're building out our iDrop portfolio. Sustained sales continue to grow globally, reinforcing our leadership in artificial tears. If you recall, about 25% of the fast-growing U.S. market for artificial tears is the preservative-free category, compared to over 50% in some international markets. Our multi-dose preservative-free formulations of Sustain Ultra and Hydration are now available in Europe and the U.S., where we're seeing a favorable customer response. We also continue to see strong demand for Pataday family of allergy products, which has been aided by our recent launch of Pataday Extra Strength earlier this year. And finally, this is the first full quarter where we've added Simbrinza to our growing portfolio of eye drops. Now, before I pass the call to Tim, I wanted to touch on a recent announcement regarding our intention to acquire IVANTIS. We're very excited for the opportunity to expand our glaucoma portfolio in this large $500 million market, growing in the low to mid-teens. Glaucoma is the second largest cause of blindness after cataracts and impacts more than 75 million people globally. IVANTIS's flagship product is the Hydrus MicroStent, a minimally invasive glaucoma surgery device. Importantly, The HYDRAS is unique as the only MIGS device with safety and efficacy data out to five years. The five-year horizon clinical study of HYDRAS is the longest continuous follow-up of a MIGS device. It demonstrated that 65% of HYDRAS patients remained medication-free at five years. HYDRAS has a combination cataract indication in the U.S., which means the device is implanted during cataract surgery and and both combo cataract and standalone indications in five international markets. We intend to leverage our global commercial footprint and our development capabilities to create even greater value for existing and future Ivantis products. In a few minutes, Tim will walk you through some of the financial aspects of that deal. Our third quarter performance demonstrates the resilience of our business, the strength of our innovation engine, and the expertise of our commercial organization. We are executing on our new product launches and growing faster than the markets around the world, even as they continue to recover. For surgical, we're expanding our leadership in equipment by developing an equipment ecosystem to improve efficiency and accuracy, while we're expanding our implantables business in surgical glaucoma. And for vision care, we're using our water gradient technology to create differentiated new silicone hydrogel contact lenses for both daily and monthly use. With that, let me pass it to Tim, who will take you through our financial results.