Alcon reported selected financial results for the first quarter ending March 31, 2019, and provided financial guidance for the current fiscal year. For the first quarter of 2019, worldwide net sales were $1.8 billion, flat on a reported basis and an increase of 4 percent on a constant currency basis,1 as compared to the same quarter of the previous year.
“The spin-off of Alcon marks a new chapter in our mission to enable more patients to see brilliantly. Solid first quarter results give us confidence in our ability to perform as an independent company and to continue to execute on our key growth drivers,” David Endicott, Alcon’s Chief Executive Officer, said in a company news release. “Our Surgical business performed well in the quarter, with growth across all three categories. As we usher in a new era for Alcon, our dedicated focus on delivering innovative products and quality eye care to patients around the world will allow us to create long-term shareholder value.”
Mr. Endicott continued, “We continue to see steady progress from product flow within our surgical business, as evidenced by the international success of PanOptix. The expansion of our manufacturing capacity is underway and will support the ramp up of new product lines, led by Precision 1, which was recently approved by the US Food and Drug Administration.”
First Quarter 2019 Net Sales Results
Worldwide net sales for the first quarter of $1.8 billion were flat to last year (up 4% cc) compared to the first quarter of 2018.
The following table highlights net sales by segment for the first quarter of 2019:
|Three months ended (unaudited)||Change in $||Change in
|($ millions unless indicated otherwise)||March 31, 2019||March 31, 2018|
|Total Vision care||$||777||$||802||(3||)%||1||%|
|Net sales to third parties||$||1,777||$||1,779||—||%||4||%|
Surgical net sales, which include implantables, consumables and equipment/other, of $1.0 billion increased 2% (up 7% cc) versus the first quarter of 2018, driven by the strong momentum across all business categories. Strong demand for Advanced Technology Intraocular Lenses (AT-IOLs), pull-through of dedicated consumables for next generation equipment, new procedural instruments and strong services revenue were the primary drivers of growth in the first quarter.
Vision Care net sales, which include contact lenses and ocular health, of $777 million decreased 3% (up 1% cc) versus the first quarter of 2018. Double-digit growth for Dailies Total1 and strong demand for Systane Complete, were offset by declines in legacy non-silicon hydrogel contact lenses and contact lens care.
First quarter 2019 reported operating loss of $48 million, compared to last year’s operating income of $73 million, was due to costs related to spin readiness, legal, SAP implementation and research and development. The decrease in first quarter 2019 core operating income2 of $314 million compared to $342 million last year, was driven by costs related to SAP implementation and higher research and development.
2019 Financial Outlook
Alcon expects the following outlook for full-year 2019:
- Net sales growth of 3% to 5% on a constant currency basis
- Core operating margin2 between 17% to 18%
- Core effective tax rate3 between 17% to 19%
2 Core results are a non-IFRS measure. For additional information, including a reconciliation for such core results to the most directly comparable measures presented in accordance with IFRS, see the explanation of non-IFRS measures and reconciliation tables later in this press release.
3 Core effective tax rate, a non-IFRS measure, is the applicable annual tax rate on core taxable income.