Alcon Inc.

Greetings and welcome to the Alcon third quarter 2024 earnings conference 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 Craven, Vice President, Investor Relations. Thank you, sir. You may begin.

Welcome to Alcon's third quarter 2024 earnings conference call. Yesterday, Alcon was alerted that our third quarter earnings press release and interim financial report were inadvertently posted early to our investor website. We immediately accelerated our disclosure process. The NYSE briefly halted trading pending the issuance of the release. Trading was resumed on the NYSE shortly after the release crossed the newswire. In addition, earlier today, we also 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 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. Please note that 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, and as such, 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 Form 20F, Earnings Press Release, and Interim Financial Report, which are all on file with the Securities Exchange Commission and available on their website at sec.gov. Non-IFRS financial measures used by the company may be calculated differently from and 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 third quarter. After his remarks, Tim will discuss our performance and outlook for the remainder of 2024. Then David will wrap up, and we will open the call for Q&A. With that, I will now turn the call over to our CEO, David Endicott.

Thanks, Dan, and thanks, everyone, for joining today's call. I'm pleased to report another solid quarter with sales of $2.4 billion and sales growth of 6%. Core diluted earnings were $0.81 per share, which grew 25%, and core operating margin was 20.6%. Additionally, we generated $1.3 billion of free cash flow in the first nine months of this year, which is a record for this company. These results demonstrate our ability to continue to outpace our markets, driven by our broad geographic footprint, our innovative portfolio, and our category leadership. In addition to our ongoing focus on operational excellence, this quarter we continued to prepare for a series of product launches that will drive growth. We intend to discuss many of these in detail at our upcoming Capital Markets Day this March. Today I'll start with our recently announced launch of Precision 7. Precision 7 is a new one-week replacement contact lens that provides 16 hours of outstanding comfort and precise vision even on day seven. Most optometrists agree that a one-week replacement schedule is more intuitive for patients as compared with a two-week schedule. The 2E category is well established and represents a meaningful growth opportunity for us. Precision 7 offers a breakthrough in comfort by leveraging our proprietary Active Flow system. Active Flow is a unique combination of a moisturizing agent embedded in the lens and a replenishing agent that continually releases moisture to the surface over seven days. Select optometrists in the United States began fitting both the SPHERE and the TORQ modalities earlier this year, and feedback has been extremely positive. We plan to make this lens fully available in the U.S. beginning in January 2025, with markets outside the U.S. to follow later. At Tourney Docular Health, where we have several exciting developments, I'll start with Sustain, the world's leading over-the-counter artificial tier. Sustain had its fifth consecutive quarter of double-digit growth, driven by our multi-dose preservative-free formulations. Now, we're going to strengthen the Sustane brand with the launch of Sustane Pro preservative-free, our newest and longest-lasting formulation that hydrates, restores, and protects dry eyes. Importantly, this formulation includes nano-sized lipids and hyaluronic acid to both reduce tear evaporation and provide long-lasting hydration. Based on market research, we're seeing very strong interest to purchase from consumers and intend to recommend from eye care professionals. We look forward to bringing this eye drop to the U.S. in the first half of next year. Moving to pharmaceutical eye drops, I'm pleased to announce that we recently finalized our strategic arrangement with OccuMention Therapeutics in China. Like Alcon, OccuMention is singularly focused on eye care. As a China-based company, OccuMention has demonstrated success in identifying, developing, and commercializing ophthalmic pharmaceuticals. We believe this expertise paired with OccuMention's local presence and established capabilities will help maximize the value of our dry eye products and procedural eye drops, including the sustained family. Importantly, OccuMention has committed to develop and commercialize AR15512 in China. In exchange for the divestiture of approximately 40 million in annual eye drop sales, Alcon received approximately 17% of the equity in OccuMention, royalties on the existing business, as well as royalties and sales milestones on 512. Now I'll discuss the anticipated US launch of 512, for which phase three pivotal studies were presented at the American Academy of Ophthalmology. 512 is a novel prescription candidate for the treatment of dry eye, and we estimate the US prescription dry eye market is worth about $1.4 billion. 512 works by stimulating receptors on corneal sensory nerves to rapidly increase natural tear production. As we mentioned in our last earnings call, we have received our PDUFA date of May 30th, 2025, and look forward to bringing the medication to the U.S. market in the second half of next year, pending FDA clearance. We've already started developing our launch strategy and engaging with payers. Given the timing of a mid-year launch, we do not expect meaningful revenue contribution before 2026. Now I'll transition to surgical, where I'll start with implantables. I've been particularly pleased by the international uptake of our ATIOLs, where we're seeing high single-digit or double-digit growth in most regions. I expect the international market to remain our main growth driver in implantables as we've seen penetration in these markets drive ATIO growth in recent quarters. In particular, we continue to see positive momentum in China on both share and penetration as we work through VBP implementation. International penetration growth combined with consistent market share growth should enable us to continue to offset the slower market conditions in the U.S., I'm also excited to announce that we've completed the migration of all of our interocular lenses, including Panoptix, Vividi, and their toric modalities to the Clarion material. Our lenses are now available on the Clarion platform in most markets globally. As a reminder, Clarion is a unique material formulation that provides excellent visual performance and sets a new standard for IOL clarity characteristics. It has amongst the lowest levels of surface haze and subsurface nanoglistenings of any IOL material. We're also excited to announce that we are continuing to expand our ATIOL offering in major markets across the globe with Autonomy, the first and only automated preloaded delivery system. Notably, we're finishing the inventory build for the launch of Clarion Autonomy TORIC in the U.S. and rounding out our TORIC offering in Japan. Next, I'll turn to surgical equipment, where we have several exciting launches, including Unity VCS and the Voyager DSLT systems. I'll start with Unity VCS, our combined FACO and VITREP platform. This system builds on Alcon's expertise in surgical equipment with pioneering innovations to deliver breakthrough workflow efficiencies that enable excellent outcomes for the patient and the practice. For cataract surgery, Unity leverages a novel ultrasound modality to deliver up to two times faster FACO removal with 40% less energy into the eye as compared to Centurions. In vitro retinal advancements, this new technology provides up to one and a half times faster vitrectomy with cutting speeds of up to 30,000 cuts per minute, which is significantly faster than Constellation's HyperVit probe. I will continue to work with surgeons for final user experience testing ahead of the expected commercial launch in the second quarter of 2025. Additionally, we expect to receive CE mark in the first quarter of 2025. Now I'll discuss the Voyager direct laser trabeculoplasty device, formerly known as the Belkin Eagle. We demonstrated this device at the recent AAO conference in Chicago and saw strong interest from our core customer base. Voyager delivers laser energy to the trabecular meshwork using proprietary robotic eye-tracking technology for accurate, automated treatment. This eliminates the need for a gonioscope or manual aiming, which is necessary with traditional SOT. This design is friendly for both patients and physicians. Its precision and streamlined workflow position Voyager to become a first-line treatment for glaucoma. Voyager is already available in certain markets in the EU, and we plan to launch this device in the U.S. in the first quarter of 2025. Finally, I'll briefly discuss market dynamics for the third quarter. In Cataract, we estimate that the global procedures grew approximately 4%. Additionally, global ATI well penetration was up approximately 200 basis points year-over-year, primarily driven by international markets. In contact lenses, we estimate the retail market was up approximately 5%. This growth was mainly driven by pricing and lens trade-up. To wrap up, we have one of the most exciting product pipelines that we've had in years, and we're looking forward to bringing them to market over the next 12 to 24 months. And with that, I'll pass it to Tim. We'll take you through our financial results and provide more color on our outlook.