Alcon Inc.

Greetings and welcome to the Alcon first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief 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 is now my pleasure to introduce your host, Dan Cravens, Vice President of Investor Relations. Thank you, sir. You may begin.

Welcome to Alcon's first quarter 2024 earnings conference call. Today, 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 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 differ materially from those expressed or implied in our forward-looking statements. Accordingly, you should not place any 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 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 similar measures used at 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 and our public filings. For discussion purposes, our comments on growth are expressed in constant currency. In a moment, David will begin by recapping highlights from the first quarter. After his remarks, Tim will discuss our performance and outlook for 2024. Then David will wrap up, and we will open the call for Q&A. With that, I'd now like to turn the call over to our CEO, David Endicott.

Thanks, Dan, and thank you all for joining today's call. I'm pleased to report another quarter of strong performance across our business. We grew sales by 7% to $2.4 billion. We grew core diluted earnings by 21% to $0.78 per share, and we expanded core operating margin to 22%. These results reflect the strength of our broad portfolio of products, and I'm particularly pleased with the performance of the contact lens business, where we saw another quarter of record sales. It's clear that our business is delivering solid growth supported by leading positions in durable end markets. Now, starting with surgical, in the coming months, we expect to receive FDA approval for our Unity VCS FACO machine. As I've said before, Unity VCS is a best-in-class FACO and vitreo retinal console that was designed to create near physiological conditions during surgery, which is expected to improve performance and efficiency without compromising safety. We're encouraged by the feedback we've received from clinical utilization in initial cases performed by surgeons around the world. Unity will be a meaningful improvement in cataract and vitret surgery. Today, there are more than 28,000 of our Centurion and Constellation devices in the market that we expect to upgrade to the Unity platform over the next decade. Toward the end of 2024, we'll start user preference evaluations with surgeons in the US and select international markets ahead of a broader commercial launch in 2025. Additionally, following the launch of VCS, we will offer a cataract-only system called Unity CS which will be available starting in 2026. Importantly, Unity brings with it new and innovative consumables that drive incremental benefits for the surgeon. The launch of these instruments will help us secure the next decade of our consumables business, which is a large, recurring, and profitable revenue stream. Now I'll move to implantables, where we continue to outpace market growth, and I'm particularly pleased by our performance in international markets. I'll start with Panoptix. Panoptix is the most implanted trifocal in the world, thanks in part to a patented design that optimizes the intermediate focal point at 60 centimeters, which is the most common middle vision sight distance. Additionally, data presented at the recent ASCRS conference shows that Panoptix delivers high patient satisfaction, partially due to the low incidence of visual disturbances. This is a critical factor as surgeons and patients consider any advanced technology lens. Building on this success, we recently received pre-market approval from the FDA on two separate innovations that improve panoptics performance. Preference studies will begin in the second half of 2024 with the goal of bringing a next generation panoptics to market within the next 12 to 18 months. Now I'll turn to Vividi, which recently surpassed more than one million implants, making it the most implanted extended depth of focus lens globally. Vividi's success is underpinned by our patented non-diffractive technology, that stretches and shifts light without splitting it. The optic delivers excellent distance and intermediate vision as well as functional near vision. It's designed to simplify presbyopia correction, prioritizing patient satisfaction while minimizing surgeon and clinic chair time. The lens's performance has been confirmed by large-scale real-world data that includes patients with common comorbidities such as post-refractive eyes. We're excited to further expand on the success of both of these lenses around the world. In China, our team is working hard in preparation for the volume-based procurement award. We expect a gradual ramp-up of activity starting in the second half of the year as the award will be implemented on a province-by-province basis. Next, I'll briefly discuss our digital innovations in the surgical space. Recently, the first-ever study to evaluate the impact of our smart cataract planner on patient outcomes demonstrated refractive target accuracy and excellent distance visual acuity. Now with this study and our earlier time and motion study, we have data showing that Smart Cataract drives meaningful efficiencies for surgeons and their staff. Importantly, as this program grows, so do its capabilities, including leveraging AI-driven algorithms to improve outcomes for surgeons and patients. Now I'll move to contact lenses, where I continue to be extremely pleased with our performance. As we've talked about previously, we've made significant investments in this business over the past several years to drive commercial innovation, expand our manufacturing capacity, and add profitable growth. The foundation of our success is our proprietary manufacturing technology. This innovation gives us the agility to produce a variety of products, including different materials, chemistries, and geometries on the same lines. This has enabled rapid innovation demonstrated by the six new contact lens platforms We've launched since 2020, including the Precision 1 family, the Total 30 family, and Daly's Total 1 for astigmatism. Importantly, our innovations are always developed with the patient and the eye care practitioner in mind. One example of our surface chemistry innovation is our water gradient technology. With this technology, the water content at the outer surface of the lens reaches almost 100%, which is nearly the same as the surface of the cornea. Additionally, it enables excellent oxygen transmissibility to deliver exceptional comfort even after a full day of wear. We feature this technology on Daly's Total One and Total 30 contact lens families. Another area we're innovating is in specialty lenses. In particular, we've brought three new TORQ lenses to market over the past four years. This is important because of the significant unmet need. Our estimates show that TORQ is the fastest growing segment of the contact lens market. This presents a large opportunity since a low number of astigmatic patients are currently wearing toric contact lenses. These lenses leverage our proven precision balance technology. This proprietary design features anchor points that deliver exceptional stability for the patient and a smooth fitting process for the physician. So based on our recent results, it's clear that our investments in innovation and in manufacturing have paid off and are driving market share and significant growth. Finally, I'll turn to ocular health. I'll start with the over-the-counter portfolio, which includes the sustained family of artificial tears, which grew double digits in the first quarter. With sustained, we're continuing to win with our multi-dose preservative-free innovation, which is driving market expansion as we launch around the world. We've launched in more than 40 countries, and in low-penetration markets like the U.S., we're seeing the preservative-free category continue to expand. In our pharmaceutical business, I continue to be pleased by the total prescription growth of Roquitin and Ropressa. In particular, Roquitin TRX grew approximately 9% year-over-year, while the broader glaucoma market was flat. At the recent ASCRS conference, Phase 4 data presentations further supported the intraocular pressure-lowering efficacy of Roquitin while maintaining the convenience of a once-daily dosing. In the coming months, we will continue to focus on expanding market access for these important medications. Lastly, on our dry eye pharmaceutical candidate, AR15512, we are in the process of preparing the new drug application for submission to the FDA, which we expect to submit in the coming months. Next, I'll briefly talk about market dynamics for the first quarter. In Cataract, we estimate the global procedures were up approximately 2%, slightly softer than historical levels. Additionally, global ATI well penetration was up approximately 130 basis points, year-over-year, mainly driven by international markets. In contact lenses, we estimate the retail market was up approximately 7% driven by pricing and continued steady wear trade-off. Now, before I turn it over to Tim, I want to briefly comment on our planned acquisition of Belconvision and its innovative technology, the Belconvision Eagle. With this potential acquisition, Alcon will further our commitment to the glaucoma space and pioneer the expansion of interventional glaucoma globally with the Eagle device. We expect the transaction to close during the third quarter, and we look forward to welcoming the Belcom Associates to the Alcon family. With that, I'll turn it over to Tim, who will take you through our financial results and promote more color on our outlook.