Alcon Ag · SIX:ALC
Alcon — Q3 2006 Earnings Presentation
28 slides from Alcon's earnings presentation, Oct 24, 2006
Slide 1: Seeing Beyond Today
Exhibit 99.1 Seeing Beyond Today Third Quarter 2006 Webcast October 24, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements contained in this presentation that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. This presentation is being made on October 24, 2006, and Alcon does not undert
Slide 3: Management Presentation by
Management Presentation by Cary Rayment Chairman , President & CEO Jacqualyn Fouse Senior Vice President Chief Financial Officer & Corporate Strategy 3
Slide 4: Business Overview
Business Overview Cary Rayment Chairman, President & CEO 4
Slide 5: Third Quarter Financial Highlights
Third Quarter Financial Highlights Q3 06 Q3 05 Growth (dollars in millions, except per share amounts) Global Sales $ 1,203.8 $ 1,071.1 12.4% Net Earnings Reported $ 232.1 $ 295.8 (21.5)% Adjusted* $ 335.2 $ 295.8 13.3% Diluted EPS Reported $ 0.76 $ 0.95 (20.0)% Adjusted* $ 1.09 $ 0.95 14.7% * Non-GA
Slide 6: Pharmaceutical Sales
Pharmaceutical Sales Q3 Q3 YTD $550 $1,650 +13.5% +11.6% $1,550 $500 $1,531.3 $496.7 $1,450 $450 $1,350 $1,372.4 $437.8 $400 $1,250 Q3 2005 Q3 2006 Q3 YTD 2005 Q3 YTD 2006 (dollars in millions) 6
Slide 7: Key Brand Development
Key Brand Development August 2006 YTD Brand Rx Market US Rx Growth* Growth % Growth % Travatan® 19.6% 6.9% Azopt ® 17.6% (2.9%) Vigamox ® 19.3% 3.7% TobraDex® 2.9% 4.6% Nevanac® n/a 19.6% Patanol ® 3.5% 5.5% CiproDex® 17.4% (0.6%) Total Otic 6.8% (0.6%) *SOURCE: WK Health 7
Slide 8: Glaucoma Franchise Development
Glaucoma Franchise Development Global Glaucoma Prescription Growth vs. Market 12% June YTD 10% 9.8% 8% 6% 5.9% 4% 2% 3.5% 3.1% 2.0% 0% Market Pfizer Merck Allergan Alcon Growth Source: IMS Health Midas Data 8
Slide 9: Leading Share Among Eye Care Professionals
Leading Share Among Eye Care Professionals U.S. Rx Market Share (Ophthalmologists and Optometrists) 35% 34.1% 33.4% 33% 32.3% 32.6% 31% 29% Vigamox Zymar Jan Feb Mar Apr May Jun Jul Aug 27% Source: WK Health 9
Slide 10: Surgical Sales
Surgical Sales Q3 Q3 YTD $600 $1,700 +9.2% $1,650 +8.6% $1,600 $1,621.3 $550 $1,550 $1,500 $528.7 $1,493.4 $1,450 $500 $1,400 $484.3 $1,350 $450 $1,300 Q3 2005 Q3 2006 Q3 YTD 2005 Q3 YTD 2006 (dollars in millions) 10
Slide 11: AcrySof Unit Growth and Shift to Premium IOLs
AcrySof® Unit Growth and Shift to Premium IOLs Global Unit Sales of AcrySof® IOLs 1,400,000 ReSTOR & Toric 1,200,000 IQ Natural 1,000,000 Clear 800,000 600,000 400,000 200,000 0 1 3 1 3 1 3 1 3 1 3 1 3 .Q .Q .Q .Q .Q .Q .Q .Q .Q .Q .Q .Q 01 01 02 02 03 03 04 04 05 05 06 06 20 20 20 20 20 20 20 20 20
Slide 12: Meeting Needs of Patients and Physicians
Meeting Needs of Patients and Physicians ReSTOR® Market Development ReSTOR® Platform Development • Train to ensure positive outcomes for patients ReSTOR® IQ • Educate to smooth changes to practice – Patient selection Lower add ReSTOR® – Chair time to discuss options • Create local mentors to serve a
Slide 13: Consumer Eye Care Sales
Consumer Eye Care Sales Q3 Q3 YTD $200 $575 +19.7% $550 +15.9% $525 $175 $178.4 $500 $519.1 $475 $450 $150 $447.8 $149.0 $425 $400 $125 $375 Q3 2005 Q3 2006 Q3 YTD 2005 Q3 YTD 2006 (dollars in millions) 13
Slide 14: RepleniSH Driving Opti-Free Gains
RepleniSHTM Driving Opti-Free® Gains U.S. Share of Branded Disinfectants 55% 45% 35% Fusarium RepleniSHTM launch Outbreak 25% 6 6 6 6 6 6 6 5 5 06 06 06 /0 /0 /0 /0 /0 /0 /0 /0 /0 8/ 5/ 2/ 21 18 18 15 13 10 30 6 4 7/ 8/ 9/ /2 /2 1/ 2/ 3/ 4/ 5/ 6/ 9/ 11 12 Source: AC Nielson 14
Slide 15: Emerging Markets a Key source of Growth
Emerging Markets a Key source of Growth YTD 2006 Sales Growth Rate 20% 18.5% 15% 16.1% 10% 9.6% 10.4% 5% 0% Developed Emerging Markets Reported Constant Currency Emerging markets are 14.5% of YTD 2006 Sales Note: Constant currency sales growth is a non-GAAP measure presented to give investors a bett
Slide 16: Financial Review
Financial Review Jacqualyn Fouse Senior Vice President Chief Financial Officer & Corporate Strategy 16
Slide 17: Q3 2006 Income Statement Detail
Q3 2006 Income Statement Detail (dollars in millions) Reported % of Adjusted % of % of Q3 06 Sales Q3 06* Sales Q3 05 Sales Gross Profit $ 902.4 75.0% $ 924.1 76.8% $ 824.7 77.0% SG & A $ 361.1 30.0% $ 352.0 29.2% $ 331.1 30.9% R&D $ 134.0 11.1% $ 129.3 10.8% $ 103.6 9.7% Operating $ 261.0 21.7% $ 4
Slide 18: Q3 YTD 2006 Income Statement Detail
Q3 YTD 2006 Income Statement Detail (dollars in millions) Reported % of Adjusted % of % of YTD 06 Sales YTD 06* Sales YTD 05 Sales Gross Profit $ 2,756.8 75.1% $ 2,784.3 75.8% $ 2,490.9 75.2% SG & A $ 1,012.6 27.6% $ 1,093.6 29.8% $ 1,009.4 30.5% R&D $ 377.6 10.3% $ 358.2 9.7% $ 302.9 9.1% Operating
Slide 19: Adjusted Earnings Growth
Adjusted Earnings Growth Q3 06 Q3 05 Q3 06 Q3 05 YTD YTD Net Earnings - Reported $ 232.1 $ 295.8 $ 993.4 $ 870.3 Less: AMO Settlement1 - -97.5 Plus: Impairment Charges1 92.0 92.0 Plus: Share Based Comp1 11.1 44.7 Net Earnings – Adjusted2 $ 335.2 $ 295.8 $ 1,032.6 $ 870.3 Growth 13.3% 18.6% Diluted E
Slide 20: Share-Based Compensation Expenses
Share-Based Compensation Expenses Q3 06 Q3 06 YTD Actual Actual COGS $ 2.6 $ 8.4 SG&A 9.1 38.0 R&D 4.7 19.4 Tax effect 5.3 21.1 Total Impact to Net Earnings $ 11.1 $ 44.7 EPS Impact $ 0.03 $ 0.14 (dollars in millions, except per share amounts) 20
Slide 21: Reported Tax Rate vs. Base Rate
Reported Tax Rate vs. “Base” Rate Q3 06 2005 2004 YTD Reported Effective Tax Rate 17.6% 22.6% 22.6% Total Net Impact of 4.4% 2.5% 5.2% “Non-structural” Items “Base” Effective Tax Rate 22.0% 25.1% 27.8% * “Base” effective tax rate is a non-GAAP measure presented to give investors a better comparison
Slide 22: Balance Sheet Highlights
Balance Sheet Highlights 9/30/06 12/31/05 Short and Long Term Borrowings $ 952.2 $ 1,083.4 Cash and Cash Equivalents $ 1,176.8 $ 1,457.2 Consolidated S/H Equity $ 2,699.9 $ 2,556.1 A/R Change (From 12/31/05) 23.8% N/A Inventory Change (From 12/31/05) 9.1% N/A (dollars in millions) 22
Slide 23: 2006 Outlook
2006 Outlook Alcon’
Slide 24: 2006 Full Year Financial Guidance
2006 Full Year Financial Guidance • Sales range from $4.87 to $4.90 billion – Global growth across major product lines – Share gains from recent product launches – Continued faster growth in emerging markets – Higher contact lens care sales – Implies Q4 sales of $1.20 to 1.23 billion • AcrySof® ReST
Slide 25: 2006 Full Year Financial Guidance
2006 Full Year Financial Guidance • Reported EPS expected to be $4.21 to $4.25 – New guidance raises lower end of range by $0.06 – Includes: Negative impact of $0.17 per share for share-based compensation expense in 2006 Positive impact of $0.31 for AMO settlement Negative impact of $0.30 for refrac
Slide 26: Seeing Beyond Today
Seeing Beyond Today
Slide 27: Q3 Non-GAAP Adjustments
Q3 06 Non-GAAP Adjustments (dollars in millions, except per share amounts) Non-GAAP Adjustments* Impairment SFAS 123(R) Non-GAAP Reported Charges Expenses Adjusted Sales $ 1,203.8 $ -- $ -- $ 1,203.8 Cost of goods sold 301.4 (19.1) (2.6) 279.7 Gross Profit 902.4 19.1 2.6 924.1 Selling, general and a
Slide 28: Q3 YTD Non-GAAP Adjustments
Q3 YTD 06 Non-GAAP Adjustments (dollars in millions, except per share amounts) Non-GAAP Adjustments* Patent Lawsuits Impairment SFAS 123(R) Non-GAAP Reported Settlement Charges Expenses Adjusted Sales $ 3,671.7 $ -- $ -- $ -- $ 3,671.7 Cost of goods sold 914.9 -- (19.1) (8.4) 887.4 Gross Profit 2,75