Alcon Reports Fourth-Quarter Sales Gain and Notes That New Product Launches Drove Market-Share Gains in 2020

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GENEVA, Switzerland—Alcon (SIX/NYSE:ALC), a global leader in eyecare, reported Tuesday that its worldwide sales for the fourth quarter rose 2 percent on a reported basis to $1.9 billion. The increase was 1 percent on a constant currency basis, according to the company’s earnings announcement. Alcon said its fourth-quarter sales “returned to growth, with a strong performance in North America partially offset by international sales.” For the 12 months ended Dec. 31, 2020, worldwide sales were $6.8 billion, a decrease of 8 percent on a reported and constant currency basis.

The significant impact of the broad shutdowns resulting from the pandemic in the second quarter was partially offset by the substantial recovery in the second half of the year as businesses reopened and surgeries resumed, Alcon noted.

In the vision care business segment, growth was driven by contact lenses, with “Precision1 gaining momentum,” according to the announcement.

Among the highlights of the 2020 results, Alcon said it achieved 11 new first-in-market product launches that helped the company grow market share. In addition, the Precision1 contact lens became the "fastest-growing daily disposable lens in U.S., according to a spokesman.

Alcon's board of directors has proposed a new dividend of 10 Swiss centimes per share, pending shareholder approval in April.

In the fourth quarter, vision care net sales totaled $800 million, which includes contact lenses and ocular health. This marked an increase of 3 percent, or 1 percent on a constant currency basis, compared with the fourth quarter of 2019. The strong performance of contact lenses was driven by reusable lenses and the continued growth of Precision1, Alcon said.

The ongoing launch of Pataday allergy relief eye drops partially offset declines in artificial tears and contact lens care. Vision care net sales for the full year of 2020 decreased 4 percent to $3.05 billion compared to the 12 months ended Dec. 31, 2019.

“2020 was an extraordinary year as our 23,000+ associates around the globe navigated the challenges of a global health crisis,” chief executive officer David Endicott said in the announcement. “Amid this uncertainty, we made significant progress on our strategic priorities. Our innovation pipeline continues to deliver exciting new products for 2021, which will create meaningful benefits for our patients and customers, fuel our top line trajectory and capture market share.”

He added, “The ongoing recovery of our business is a testament to the durability of our end markets, agility and motivation of our associates, and our ability to create value and address unmet needs with an exciting pipeline of innovation.”

Alcon noted that its "transformation program is making progress in optimizing cost structure, driving reinvestment of cost savings into R&D and marketing to drive top line and accelerate innovation."

Fourth quarter 2020 operating income was $141 million, which includes charges of $249 million from the amortization of certain intangible assets, $49 million of impairment charges and $36 million of separation costs, partially offset by a $166 million gain on post-employment benefit plan amendments. Excluding these and other adjustments, fourth quarter 2020 core operating income was $287 million, according to the announcement.

Alcon said it had an operating loss for the full year of 2020 of $482 million, which includes charges of $1.0 billion from the amortization of certain intangible assets, $217 million of separation costs, $167 million of impairment charges and $49 million of transformation program costs. These costs were partially offset by a $154 million net gain on post-employment benefit plan amendments and a $63 million benefit for fair value adjustments of contingent consideration liabilities.

Excluding these and other adjustments, core operating income in 2020 was $789 million and core operating margin was 11.7 percent, which compares with a 17.2 percent operating margin in the same period last year.