Alcon Inc.

Hello, and welcome to the Alcon fourth quarter and full year 2021 earnings call and webcast. At this time, all participants are in 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. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karen King, Senior Vice President, Head of Global Corporate Affairs and Investor Relations. Please go ahead, Karen.

Welcome to Alcon's fourth quarter and full year 2021 earnings conference call. Yesterday, we issued a press release, interim financial report, and annual report, as well as posted a supplemental slide presentation on our website to enhance today's call. You can find all 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 our annual report 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 alternative 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 fourth quarter and full year earnings presentation, which can be found on our investor relations website. As a reminder, for discussion purposes, we're 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. 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 financial statements. This is the last quarter where we'll provide comparisons against 2019. Starting in the first quarter of 2022, we will resume year-over-year comparisons in all our earnings materials. As usual, our comments on growth are expressed in constant currency. Before I turn the call over to David, I want to introduce you to Alcon's new VP and Head of Investor Relations, Dan Cravens, who started last week and is joining us on today's call. We're very excited to have Dan on board. He brings deep investor relations and financial experience to Alcon. He will be your day-to-day contact once he gets up to speed and we'll be introducing our future earnings calls starting with the first quarter of 2022. With that, I'll now turn the call over to David.

Welcome to Alcon's fourth quarter and full year 2021 earnings call. Let me begin by recapping highlights from 2021 and recent months, including market dynamics and key product launches. After my comments, Tim will discuss our fourth quarter and full year performance and then give some color on 2022. Then I'll wrap up with some closing remarks and we'll open the line for Q&A. 2021 was an exceptional year for Alcon. We exited the year with fourth quarter sales of 2.1 billion and full year sales of 8.2 billion, which is at the high end of our sales guidance. This is a result of strong demand for key products and new product launches, as well as solid commercial execution. Core operating margin was 16.3% for the quarter and 17.6% for the full year, right in line with our guidance. And finally, core diluted EPS for the quarter was $0.56 and $2.15 for the full year. Additionally, despite our continued investments, we generated $645 million in free cash flow for the year. So as I reflect on full year of 2021, I'm extremely proud of all that we've accomplished. First, despite the ongoing pandemic and broader economic pressures, our full year 21 results demonstrate the resilience of our business, the strength of our innovation, the proficiency of our commercial teams, and our long-term commitment to focus on growth. Since then, we've aspired to grow above the market, driven by delivering great products that address key customer needs. In 2021, we did exactly that. By growing share and, in some cases, growing the market, our product flow and mix has resulted in double-digit revenue growth in both our surgical and vision care franchises, which drove core operating leverage and margin expansion. Second, we completed our separation, which was a major milestone as a new independent company. This has allowed us to intensify our focus on innovating products that are critical to driving top-line growth. Third, we're seeing favorable returns on our investments, our investments in transformation, manufacturing, and innovation. Our transformation initiatives continue to optimize our cost structure, creating efficiencies and savings that we are reinvesting in innovation to support new product launches. Our investments in our new contact lens manufacturing platform has given us the flexibility to launch a host of new products over the past two years, all of which are well positioned to capture share. And our commitment to funding our innovation engine is producing a strong pipeline of new products, which were developed with our customers in mind and are addressing unmet patient needs. Now I'll spend a few minutes updating you on some of those innovations. In surgical, we remain the market leaders in presbyopia-correcting IOLs on the strength of both panoptics and Vividi, and penetration of advanced technology lenses continues to increase. Vividi's non-diffractive properties, ease of use, and consistency of surgical outcomes make it particularly appealing. Existing surgeons are increasing their use of advanced technologies, upgrading patients from a monofocal toric to a multifocal toric, or using Vividi on patients who they would have previously excluded from an ATI well due to a prior pathology or concerns with halos and glare. We're also excited to add Hydrus MicroStent to our portfolio of implantable devices. Hydrus represents an exciting opportunity in the large and fast-growing mild to moderate glaucoma market. Physicians appreciate the strong and compelling safety and efficacy data from the pivotal trial, showing that 66% of patients were medication-free at five years, and that 61% had a reduced risk of invasive secondary surgeries compared to cataract surgery alone. On equipment, we continue to see strong reception for our suite of cataract equipment, including our FACO equipment, microscopes, and Argos biometer. We're also piloting our Smart Cataract Planner, which is part of our broader digital ecosystem with select customers in the United States. Turning to vision care, we continue to see strong demand Precision One and Precision One for Astigmatism, which are our newest contact lenses for the mainstream market. Simultaneously, we're also building out our Total brand in the premium segment. We announced the broad commercial launch of Daly's Total One for Astigmatism in the United States, which has been eagerly anticipated by eye care professionals and completes our Daly's Total One portfolio. We also announced the broad commercial launch of Total 30 Sphere, which in the U.S. and in some European markets. This is the first and only monthly contact lens leveraging the water gradient technology first introduced on Daly's Total One. This lens addresses the large $4 billion reusable market and is the first meaningful innovation into this market in years. And finally, at Ocular Health, we were pleased to announce the recent launch of Sustain Complete in a multi-dose preservative-free format, our third multi-dose preservative-free offering in the past 18 months. During the second half of 21, we built a U.S. sales force dedicated to delivering eye drops into the ophthalmic channel. This sales force is now in place and has a robust portfolio to sell, including some brinsic glaucoma drops, our sustained family of dry eye products, and our pataday allergy drops. Now moving to our end markets by franchise. In surgical, global cataract procedures in the fourth quarter were down low single digits over 2019. However, if you exclude India, which has been slower to recover from the pandemic, global procedures in the fourth quarter were up low to mid-single digits versus 2019. Growth in the U.S. market remained relatively consistent with prior quarter. Growth in international markets were still slower to recover, but saw solid sequential improvement over the third quarter. Against this backdrop, our implantables business continued to outpace the market driven by our strong ATIOL performance. In vision care, the contact lens market in the fourth quarter broadly returned to the 2019 levels and grew high single digits, led by the U.S. Growth rates in international markets are still trailing behind the U.S. due to varied paces of market recovery. However, our contact lenses significantly outpaced the market, driven by strong performance of Precision 1 and Precision 1 for Astigmatism. Our full year 21 performance demonstrates the durability of our markets and the resilience of our business, all of which are underpinned by favorable macro trends. Our strategy of investing behind markets with high growth opportunities or high share opportunities is playing out nicely, and we are creating innovative products that are addressing customer needs and using the expertise of our commercial organization to successfully execute on our new product launches. As a result, we're growing faster than markets around the world, even as they continue to recover. With that, let me pass it to Tim, who will take you through our financial results.