(PRESS RELEASE) GENEVA — Alcon (SIX/NYSE:ALC), the global leader in eye care, reported its financial results for the fourth quarter and full year ended December 31, 2021. For the fourth quarter of 2021, worldwide sales were $2.1 billion, an increase of 11% on a reported basis and 13% on a constant currency basis(2), as compared to the same quarter of the previous year. Fourth quarter 2021 diluted earnings per share were $0.28 and core diluted earnings per share were $0.56. Full year 2021 diluted earnings per share were $0.76 and core diluted earnings per share were $2.15.
“I am extremely proud of all that we accomplished in 2021. We have secured our position as the global leader in eye care, and our 2021 performance demonstrates the resilience of our business, the strength of our innovation engine and the expertise of our commercial organization,” said David J. Endicott, Alcon’s chief executive officer. “Our strong product flow resulted in revenue growth abovemarket, which drove core operating leverage and margin expansion.”
“Our success is underpinned by our strategy of investing behind markets with high growth or high share opportunities,” Mr. Endicott continued. “We are entering 2022 with substantial momentum, driven by innovative products that address unmet customer and patient needs. All of these factors give us confidence in our long-term strategy and in delivering shareholder value.”
Fourth quarter and full year 2021 results:
Worldwide sales for the fourth quarter 2021 were $2.1 billion, an increase of 11% on a reported basis and 13% on a constant currency basis, compared to the fourth quarter of 2020. Eye care markets in the fourth quarter reflected the recovery in the United States and the continuing recovery internationally from the COVID-19 pandemic. Worldwide sales for full year 2021 were $8.2 billion, an increase of 22% on a reported basis and 20% on a constant currency basis, compared to 2020.
The following table highlights net sales by segment for the fourth quarter and full year 2021:
Surgical product innovation drives above-market growth
Surgical net sales of $1.3 billion, which include implantables, consumables and equipment/other, increased 12%, or 14% on a constant currency basis, compared to the fourth quarter of 2020. Implantables growth reflected market improvements and ongoing adoption of advanced technology intraocular lenses, led by the launch of Vivity. Consumables growth primarily reflected market improvements. Growth in equipment/other was primarily driven by cataract equipment. For the full year 2021, Surgical net sales increased 27%, or 25% on a constant currency basis, compared to 2020.
SiHy contact lenses and Systane drive above-market growth in Vision Care
Vision Care net sales of $0.9 billion, which include contact lenses and ocular health, increased 10%, or 12% on a constant currency basis, compared to the fourth quarter of 2020. Contact lens sales benefited from growth in silicone hydrogel (SiHy) contact lenses, including Precision, Precision1 for Astigmatism and Dailies Total1, and continuing recovery in international markets. Growth in ocular health was led by strong demand for our brand family of Systane artificial tear products, as well as the addition of Simbrinza glaucoma eye drops. For the full year 2021, Vision Care net sales increased 15%, or 14% on a constant currency basis, compared to 2020.
Operating income
Fourth quarter 2021 operating income was $182 million, which includes charges of $138 million for the amortization of certain intangible assets. Excluding this and other adjustments, fourth quarter 2021 core operating income was $348 million.
Fourth quarter 2021 core operating margin of 16.3% increased versus the fourth quarter of 2020. Higher sales were partially offset by increases in marketing and selling expenses and higher associate short-term incentive benefits. The prior year period was impacted by unabsorbed manufacturing overhead costs and higher inventory provisions. Foreign exchange had a negative 50 basis point impact on fourth quarter 2021 core operating margin.
Operating income for the twelve months ended December 31, 2021 was $580 million, which includes $529 million for the amortization of certain intangible assets and $225 million of intangible asset impairments. Excluding these and other adjustments, core operating income for the twelve months ended December 31, 2021 was $1.4 billion. Core operating margin for the twelve months ended December 31, 2021 was 17.6% compared to 11.7% in 2020. Foreign exchange had a positive 30 basis point impact on core operating margin for the twelve months ended December 31, 2021.
Diluted earnings per share (EPS)
Fourth quarter 2021 diluted earnings per share were $0.28 and core diluted earnings per share were $0.56. Diluted earnings per share for the twelve months ended December 31, 2021 were $0.76 and core diluted earnings per share were $2.15.
Proposed dividend
The Company’s Board of Directors proposed a dividend of CHF 0.20 per share, based on 2021 financial results. The Company’s shareholders will vote on this proposal at the 2022 Annual General Meeting on April 27, 2022.
Balance sheet and cash flow highlights
The Company ended the fourth quarter with a cash position of $1.6 billion. Current year cash flows benefited from higher sales, lower separation and lower transformation payments, partially offset by increased discretionary spending, increased inventories and increased taxes due to timing of payments and increased profitability. Cash flows from operations for 2021 totaled $1.3 billion and free cash flow(3) amounted to $645 million, compared to cash flows from operations of $823 million and free cash flow of $350 million in the previous year. The increase in free cash flow was driven by higher cash flows from operating activities, partially offset by increased purchases of property, plant and equipment. Financial debts totaled $4.1 billion, in line with prior year-end. The Company ended the fourth quarter with a net debt(4) position of $2.5 billion. The Company continues to have $1 billion available in its existing revolving credit facility as of February 15, 2022.
2022 outlook
The Company provided its full year 2022 outlook as follows. This outlook assumes that markets grow over 2021 in line with historical averages; that the impact from inflation moderates in the second half of the year; and that exchange rates as of mid-January 2022 prevail through year-end.