Quarter by quarter, it appears Alcon, the global eye care company with manufacturing and research facilities in Berks County, has successfully completed its 2019 spin-off from Novartis. Its fourth quarter and full year 2021 financial results were virtually all positive.
In the fourth quarter, Alcon reported above-market sales growth in the Surgical and Vision Care business segments, driven by strong demand for key products, new product launches and strong commercial execution. Alcon claims to have become the global market leader in presbyopia-correcting intraocular lenses and an innovator in silicone hydrogel contact lenses.
For the full year 2021, highlights for Alcon include completing the separation from Novartis on time and on budget and making solid progress on its transformation program. The company has continued to invest in research and development and has launched innovative products that are successful in the market. It also continued to expand its contact lens manufacturing capacity to meet increased demand.
In 2021, Alcon expanded its presence in glaucoma by introducing a Hydrus Microstent MIGS device for mild to moderate glaucoma and Simbrinza glaucoma drops to help build an eye drop portfolio for the US eye channel.
“I am extremely proud of all that we have achieved in 2021. We have solidified our position as the world 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, president and CEO of Alcon, in a statement. “Our strong product flow has driven above-market revenue growth, which has driven core operating leverage and margin expansion.”
Fourth quarter and full year 2021 results
Alcon reported that global sales for the fourth quarter of 2021 were $2.1 billion, an increase of 13% at constant currency (cc), compared to the fourth quarter of 2020. Eye care markets in the fourth quarter reflected the recovery in the United States and the continued international recovery from the COVID-19 pandemic. Global sales for the full year of 2021 were $8.2 billion, an increase of 20% at constant currency, compared to 2020.
Fourth-quarter 2021 operating profit was $182 million, which included 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.
Core operating margin of 16.3% in the fourth quarter of 2021 increased compared to the fourth quarter of 2020. The company said the increase in sales was partially offset by higher marketing and sales expenses and an increase in short-term associate incentive benefits. The prior year period was impacted by unabsorbed manufacturing overhead and higher inventory provisions.
Operating profit for the twelve months ended December 31, 2021 was $580 million, which includes the deduction of $529 million for amortization of certain intangible assets and $225 million of impairments intangible assets. Excluding these and other adjustments, core operating income for the twelve months of 2021 was $1.4 billion. The core operating margin for 2021 was 17.6% compared to 11.7% in 2020.
Diluted earnings per share (EPS) for the fourth quarter of 2021 was $0.28 and basic diluted earnings per share was $0.56. Diluted earnings per share for the full year 2021 was $0.76 and basic diluted earnings per share was $2.15.
Business segment results
Surgical net sales of $1.3 billion, which include implants, consumables and equipment/other, increased 14% cc, compared to the fourth quarter of 2020. Implant growth reflects market improvements and the continued adoption of advanced technology intraocular lenses, led by the launch of Vivity. Consumables growth primarily reflects market improvements. Equipment/other growth was primarily driven by cataract equipment. For the full year 2021, net sales in Surgery increased by 25% cc, compared to 2020.
SiHy (silicone hydrogel) and Systane contact lenses outperformed the vision care market. Vision Care net sales of $0.9 billion, which include contact lenses and eye health, increased 12% cc compared to the fourth quarter of 2020. Contact lens sales benefited from growth silicone hydrogel (SiHy) contact lenses, including Precision1, Precision1 for Astigmatism and Total1 dailies, and the continued recovery of international markets.
Growth in eye health was driven by strong demand for the company’s Systane brand of artificial tear product line, as well as the addition of Simbrinza glaucoma eye drops. For the full year 2021, Vision Care net sales increased 14% cc compared to 2020.
“Our success is based on our strategy of investing behind high-growth or high-opportunity equity markets,” Endicott said. “We enter 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 creating value for shareholders. »
The company’s full-year 2022 outlook assumes markets grow in 2021 in line with historical averages; that the impact of inflation is moderating in the second half; and that the exchange rates in mid-January 2022 prevail until the end of the year.
Net sales are expected to be in the range of $8.7 billion to $8.9 billion. Basic operating margin is expected to be between 18% and 19%, with basic diluted earnings per share between $2.35 and $2.45.
Alcon (NYSE: ALC) is the world’s largest eye care device company, with complementary businesses in surgical and vision care. The company has a long line of industry firsts through its capabilities in materials science, surface chemistry and optics. Alcon’s pipeline includes more than 100 active projects and the company has more than 23,000 associates working around the world.