Alcon Inc.

Greetings and welcome to the Alcon fourth quarter and 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. Should anyone 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, VP of Investor Relations. Thank you. You may begin.

Welcome to Alcon's fourth quarter and full year 2024 earnings conference call. Yesterday, we issued a press release, interim financial report, annual report, and 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. Please note that 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 development, 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 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 scc.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 in 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 fourth quarter. After his remarks, Tim will discuss our performance and outlook for 2025. 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 us today. 2024 was another solid year for Alcon. We ended the year with sales of $9.8 billion and above-market sales growth of 6%. We grew core diluted EPS by 16% to $3.05, and generated a record $1.6 billion of free cash flow. In 2024, we also continued to live out our purpose of helping people see brilliantly. Concretely, we helped improve the vision of more than a million patients in low and middle income countries. Additionally, we screened over 31,000 children for refractive error and provided spectacles where required. None of these accomplishments would have been possible without the focus of our more than 25,000 associates who worked tirelessly to make a difference for our customers, their patients, and the communities we serve. Equally important, we laid the groundwork in preparation to launch one of the richest product pipelines in Alcon's history. Additionally, we realigned our leadership team and organizational structure to increase our focus on innovation, operational excellence, and speed to market. We'll talk about all of this and more at our upcoming Capital Markets Day. However, I'd like to share a bit of a preview with you now. In surgical, we will show you our upcoming equipment launches, as well as our connected equipment ecosystem. We'll also provide an update on our IOL portfolio, including some insight on our accommodating programs. In vision care, we'll talk about our focus areas, including our innovation and specialty contact lenses. In ocular health, we'll discuss our strategy around accelerating growth with our over-the-counter assets, such as sustain, as well as our pharmaceutical pipeline. Finally, we'll provide more color on our long-term innovation as we attempt to tackle some of the most challenging problems in eye care. With all this coming in a month's time, today I'll highlight just a few of these innovations in my prepared remarks. Let's start with surgical. We're particularly excited about Unity VCS, our upcoming FACO VIT device. Unity was designed with safety and efficiency in mind, and this is the most efficient piece of FACO equipment Alcon has ever created. In Cataract, this efficiency is enabled by FACO that is twice as fast as its predecessor, while using 40% less energy. Additionally, in VITRET, Unity VCS brings new innovation with vitreous cutting that is one and a half times faster than Constellation. In both Cataract and VITRET, Unity also enables efficiency through streamlined setup and teardown, which directly supports rapid OR turn as well as intraoperative workflows. Importantly, this next generation console comes with next generation consumables, These include premium cassettes and less invasive instrumentation, which are designed to increase OR efficiency and improve the surgeon and patient experience. We received FDA clearance for Unity VCS and the standalone cataract device CS in 2024. Additionally, we anticipate receiving CE mark in the coming weeks. And we're in the final stages of our user experience testing ahead of a full commercial launch expected in May. Next, I'll discuss Panoptix Pro, our latest PCIOL innovation. I'm pleased to announce that we're moving forward with a lens design that significantly reduces light scatter. Surgeons remain foremost interested in improving patient outcomes, which includes reducing the incidence of visual disturbances. Panoptix Pro was designed with that outcome in mind and ingeniously uses more light with less scatter. I look forward to sharing more information on this product with you at CMD in March, ahead of our commercial launch again in May. Now I'll touch on the Voyager direct selective laser trabeculoplasty device, which is already available in certain EU markets and the US. Since introducing the Voyager into the US, we've received very positive feedback from doctors and have seen a strong initial demand. We're now focused on ramping up production of the device. Voyager offers a novel way of lowering interocular pressure by delivering laser energy to stimulate fluid outflow. This device leverages proprietary eye-tracking technology for accurate, automated treatment. Its streamlined workflow eliminates the need for a gonio lens or manual aiming, making it a patient and physician-friendly solution, particularly when compared to manual SLT. SLT is already a well-regarded procedure by glaucoma specialists and has well-established reimbursement mechanisms in many markets. We're excited to bring the benefits of this procedure to even more patients. Now moving on to contact lenses, I'm pleased to announce that our latest innovation, Precision 7, is now widely available throughout the U.S. Precision 7 targets the reusable lens category, which we estimate is worth approximately $3.8 billion, and where Alcon is under-indexed. This market segment has been underserved by innovation for years. This lens is groundbreaking one-week replacement modality, offering 16 hours of exceptional comfort and precise vision, even on day seven. Precision 7 delivers a breakthrough in comfort by utilizing our proprietary active flow system, which combines a moisturizing agent and a replenishing agent that continually releases moisture to the surface of the lens over a seven-day period. Early doctor and wearer feedback has been extremely positive. Wearers like the feel of the lens, and eye care professionals appreciate its ease of fit and intuitive compliance, particularly when compared to a two-week schedule. Now I'll turn to Ocular Health, where we have several exciting developments. I'll start with Sustane, the world's leading over-the-counter artificial tear, which achieved its fourth year of double-digit growth, driven by our multi-dose preservative-free formulations. We're continuing to invest behind Sustane. We're bolstering the Sustane brand with the launch of Sustane Pro Preservative Free, our latest and longest-lasting triple-action formula that hydrates, restores, and protects all types of dry eye. Sustain Pro is now available at retailers throughout the U.S., and we will continue to expand its availability throughout the year. This product incorporates nano-sized lipids and hyaluronate to reduce tear evaporation and provide prolonged hydration. Turning to prescription eye drops, I continue to be pleased by the performance of Roquitin, one of our glaucoma medications. In the fourth quarter, TRX for this product grew mid-teens. Regarding AR15512, we continue to expect that we are and are preparing for a U.S. launch in the second half of the year pending FDA approval. Looking toward the launch, I'm increasingly encouraged by the strength of the U.S. prescription dry eye market, which we estimate is worth approximately $1.4 billion. In particular, I'm pleased to see strong uptake of new branded Rx products, which we think is a positive indicator for the potential of 512. More importantly, 512 has some important differentiators from the currently marketed products, including onset of action. Finally, I'll briefly discuss market dynamics for the fourth quarter. In Cataract, we estimate that global procedures grew approximately mid-single digits. Additionally, global ATI well penetration was up approximately 180 basis points year over year. In both cases, the main driver of growth was international markets. In the U.S., we saw another quarter of slower market growth with dynamics similar as Q3. We believe this was driven in part by competitive trialing and sampling, which are not captured in our third-party data. In contact lenses, we estimate that the retail market was up mid-single digits. This growth was mainly driven by pricing and lens trade-up. And with that, I'll pass it to Tim. We'll take you through our financial results and discuss our outlook for the year.