Alcon Reports 'Strong Growth' in Sales for Full Year 2019 as Core Operating Profits Improve

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GENEVA—Alcon (SIX/NYSE:ALC) reported Tuesday financial results for the full year 2019 that showed worldwide net sales of $7.4 billion, an increase of 3 percent (5 percent on a constant currency) basis), as core operating income grew 4 percent (11 percent at constant currency). This marked the third consecutive year of top-line growth on a constant currency basis, Alcon said in its announcement. The eyecare company noted that its business has benefited “from steady improvements in innovation, new product flow and strong commercial execution.”

Looking ahead at 2020 performance, Alcon said it expects net sales growth of 5 percent (6 percent at constant currency) this year.

In the fourth quarter, overall company sales rose 5.1 percent to $1.88 billion. Contact lens sales rose 2 percent in the fourth quarter to $460 million. For the full year, contact lens sales totaled $1.93 billion, an increase of 2 percent (4 percent at constant currency).

“Last year was a remarkable milestone in Alcon's history,” chief executive officer David Endicott said. “We completed our spin-off as an independent company and delivered strong growth in net sales and improved core profitability. We achieved these results while standing-up new functions, launching two important new products in the U.S. and installing new, flexible Vision Care lines at several of our manufacturing facilities."

He said that in 2020, with the spin-off from Novartis completed, the objective will be “unlocking Alcon's potential in an attractive global market for eyecare.”

In addition, Alcon said its board of directors has proposed a dividend of CHF 0.19 per share for 2019, which would be the first proposed dividend as an independent company. Shareholders will vote on this proposal at the 2020 annual meeting on May 6.

Endicott added, “Continued investment behind our robust pipeline and new product launches position us well to deliver upon our growth aspirations. As the industry leader and innovator, we are focused on developing solutions to address significant unmet needs, improve patient outcomes and increase access to care.”

Alcon said it achieved steady growth within its vision care segment in 2019, and that the Precision1 contact lens launch was on track.

Full year vision care sales increased 1 percent to $3.2 billion, which includes contact lenses and ocular health. The increase was 3 percent on a constant currency basis.

The sales growth was driven by “the continued demand for Dailies Total1 lenses and dry eye products,” offset by a decline in contact lens care. Precision1, the newest SiHy contact lens in the Alcon portfolio, “is off to a good start in the U.S., with encouraging trends in new account activation,” the announcement noted.

Alcon also reported that its full-year operating loss was $187 million, which includes $1 billion from the non-cash amortization of certain intangible assets, $237 million of separation costs, $72 million of spin readiness costs and $52 million of transformation program costs. Excluding these and other adjustments, core operating income for the full year was $1.3 billion.

The company’s core operating margin for 2019 was 17.2 percent, an increase of 20 basis points, which included an unfavorable impact of 60 basis points from foreign exchange.