Alcon Inc.

Greetings, and welcome to the Alcon third quarter 2022 earnings call. At this time, all participants are in 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Dan Cravens, Vice President and Global Head of Investor Relations for Alcon. Thank you. You may begin.

Thanks, and welcome to Alcon's third quarter 2022 earnings conference call. Yesterday, we issued a press release, an interim financial report, and 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 from those And 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 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. Non-IFRS measures should be considered along with, but not as alternatives to, the operating performance measures as prescribed by IFRS. Please see a reconciliation between our non-IFRS measures with directly comparable measures presented in accordance with IFRS in our public filings. For discussion purposes only, our comments on growth are expressed in constant currency. With that, I will now turn the call over to our CEO, David Endicott.

Thanks, Dan. Welcome to Alcon's third quarter 2022 earnings call. Today, I'll begin by giving a brief update on our third quarter results, our overall market dynamics, and recent performance. After my remarks, Tim will discuss our third quarter performance and our outlook for the remainder of the year. Then I'll wrap up with some closing remarks and we'll open it up for Q&A. I'm pleased to report that the Alcon team delivered third quarter sales of $2.1 billion with sales growth of 9%, core operating margin of 17.2%, and diluted core earnings per share of 50 cents. Based on these results, it's clear that our fundamentals remain strong. I'm proud of what we were able to accomplish, particularly given the persistent macroeconomic headwinds we continue to navigate. Now, similar to the second quarter, these results were driven by the ongoing improvements in international markets, our broad portfolio of market-leading products, and strong commercial execution. In Surgical, our broad suite of products continues to win in the market. Starting with implantables, we remain the market share leader in intraocular lenses, driven by our comprehensive portfolio of PCIOLs, including Panoptix and Vividi. While recent ATIOL penetration trends have moderated, we continue to focus on driving penetration by educating doctors, clinical staff, and patients about the value and benefits of advanced technology lenses. For surgeons, we've continued investing in our clinic-based sales force and peer-to-peer learning programs. Patients were providing educational materials in advance of their doctor visit, so they come into the clinic informed about their lens choice options. All of these programs are showing encouraging early results, and we plan to continue to expand them in 2023. In monofocals, Clarion, our latest IOL material, is helping us defend our market-leading position. Recently, at the AAO, we announced the rollout of Clarion Tauric across select practices in the United States. With the introduction of Clarion Tauric, Alcon now offers a robust portfolio of options for U.S. cataract patients with astigmatism on our latest glistening-free material. We've also received extremely favorable customer feedback on our suite of cataract equipment, including the Argos Biometer and the Legion and Centurion FACO devices. The Argos Biometer with image guidance provides higher data capture rates than other biometers and enables better prediction of lens power, which may lead to improved lens selections. Customers also appreciate that Argos is fully integrated with the Alcon cataract refractive suite, helping make it easier for doctors to deliver better outcomes with greater efficiency. Customers in emerging markets are also responding favorably to the Legion FACO machine. Legion delivers the Alcon FACO performance advantage with the right features and price for emerging markets. And in international markets, where we are continuing to upgrade the legacy FACO machines in our industry-leading Centurion system, Demand for Centurion is supported by our ActiveCentury handpiece, the most advanced FACO handpiece on the market. Importantly, we're seeing that Centurion with ActiveCentury is helping drive practice efficiencies. Results from a multicenter prospective clinical trial presented at the AAO conference demonstrate meaningful surgical time savings when using Centurion with ActiveCentury. Given persistent global surgery backlogs and staffing shortages, this is becoming increasingly important to surgeons. Now moving to vision care, we continue to be pleased with the progress of our innovative suite of lenses, including Precision One, Daly's Total One, and Total 30. Precision One continues to be our main growth driver. Precision One was designed to deliver the right balance of visual acuity, wearer comfort, and ease of handling at the right price for the mainstream wearer. And with Precision One for astigmatism, we have a lens for mainstream astigmatic patients who have historically been a significant but underserved population. Similarly, Daly's Total One continues to be the gold standard in the premium contact lenses. Earlier this year, we launched Daly's Total One for astigmatism, the first and only daily toric lens to feature water gradient technology. This launch completes the Daly's Total One portfolio, which now includes spherical, toric, and multifocal lenses. This is important because eye care professionals can now target and treat a wide range of patients with a single premium lens family. We're also capturing share in the reusable lens category since launching Total30. Recall that this is a $4 billion category and represents approximately two-thirds of wearers. Total30 represents the first major innovation in reusable markets in a number of years and for the first time adds water gradient technology to a reusable lens. We plan to expand the Total30 product family with a commercial launch of Total30 for astigmatism early next year. And finally, in ocular health, we recently announced the intended acquisition of Aerie Pharmaceuticals. As we welcome the ARRI team to Alcon, we look forward to leveraging our expanded commercial footprint and expertise to bring Roccatana Repressa to even more customers and their patients. This acquisition underpins our strategy of entering into productive white spaces. We started moving in this direction with the acquisition of the U.S. commercial rights of Sembrenza and Isuvus, and see this as a natural addition to that portfolio. Now, let me provide an update on our end markets. In surgical, global cataract procedures were up high single digits in the third quarter versus prior year. This growth varies significantly by region. In the United States, where surgical centers continue to be constrained by staffing shortages, procedural volume was relatively flat. Outside the US, procedures were up low teens as markets continued to improve. In contact lenses, the market growth for the quarter was difficult to read due to the timing of price increases and inventory movements. Based on the available data, we estimate the overall lens market grew mid to high single digits in the third quarter. We're encouraged to see current reporting indicate that optometry visits have returned to pre-COVID levels. Against that backdrop, we believe that our contact lens business grew in line with the market. Now I'd like to update you on our transformation program. We've made significant progress with our cultural and business transformation journey over the past few years. As we've said before, the goal is to drive speed and simplicity into the business. By allocating expenses more efficiently, we've created savings that were reinvested in a new product development and launches. This has fueled our innovation engine and helped us to outpace market growth. Specifically, we've streamlined our operating model and established global shared service centers for key functions like finance, HR, and IT. To continue to optimize our business, we've identified additional transformation initiatives, including reviewing management spans and layers, as well as streamlining our commercial processes. These additional steps will help us to offset some of the macroeconomic headwinds we face while continuing to invest behind our strategic priorities. Tim will discuss this in greater detail in his remarks. So to summarize, our operational performance has been exceptional, particularly given the current macro environment. In constant currency, we grew revenue 9% as we continue to launch new products. We grew core operating income by 19% despite inflationary pressures, And we expanded core operating margin by 160 basis points. So with that, let me pass it to Tim, who will take you through our financial results and comment on our outlook for the rest of the year.