Jack Reynolds-Clark

Jack Reynolds-Clark of RBC Capital Markets questioned the drivers behind the surgical market weakness that prompted a guidance downgrade and asked for more details on the order book and placement outlook for the new Unity system.

Answer

CEO David Endicott attributed the market weakness to a normal, albeit low-end, oscillation in surgical procedure volumes, expressing confidence in a long-term recovery. Regarding Unity, he described a strong initial sales funnel with over 1,000 leads and emphasized a deliberate, phased rollout focused on ensuring a positive customer experience.

Jack Reynolds-Clark asked for a breakdown of the contact lens performance, specifically the impact of pricing timing versus legacy product declines. He also requested details on the cost components of the Aurion acquisition's EBIT loss and expectations for future clinical trial costs.

Answer

Chief Executive Officer David Endicott stated the contact lens market remains healthy and Alcon's 4% growth was against a tough 11% prior-year comparison, attributing the result to timing and normalization. Regarding Aurion, he confirmed the 80 basis point impact is almost entirely R&D for the clinical program but declined to break out specific costs. Chief Financial Officer Tim Stonesifer advised modeling the cost evenly across Q2, Q3, and Q4 of 2025.

Jack Reynolds-Clark asked about the international ramp-up for the Voyager device and its business model, and also inquired about the specific geographic drivers for international AT-IOL growth.

Answer

CEO David Endicott explained the Voyager business model will focus on the long-term value of the 'click fee' consumable, which will carry high margins. The international ramp will follow the primary U.S. launch and depends on manufacturing scale-up. For AT-IOLs, he cited China as the 'standout' driver of global penetration and unit share, with strong performance also seen in Southeast Asia and Latin America.

Jack Reynolds-Clark asked for initial surgeon feedback on the Unity platform and any data on its efficiency improvements. He also sought color on the equipment business performance, questioning if it was affected by tough comparisons or customers delaying purchases ahead of the Unity launch.

Answer

CEO David Endicott reported that early feedback on Unity from top surgeons has been very positive, highlighting its safety at lower IOPs and significant speed improvements. He confirmed the slowdown in equipment sales was expected, as customers are aware of the upcoming Unity launch and are holding off on console purchases. However, he noted that underlying demand for other equipment like biometry and scopes remains solid.

Jack Reynolds-Clark of RBC Capital Markets asked if strong Q2 results imply an upside to the full-year revenue guidance, requested details on the H2 margin bridge, and inquired about the drivers of weakness in the U.S. Knees business.

Answer

CEO Deepak Nath explained that while performance is strong, it is prudent to maintain guidance due to uncertainties like tariffs. He attributed the U.S. Knees softness to a strategic refocus on high-volume accounts and portfolio rationalization. CFO John Rogers added that the H2 margin bridge accounts for savings pulled forward, the impact of tariffs, and R&D catch-up, supporting the existing 19% to 20% guidance. He also noted a tough Q4 revenue comparator.

Jack Reynolds-Clark of RBC Capital Markets asked if strong Q2 results implied an upside to the full-year revenue guidance, requested a detailed walkthrough of the H2 margin bridge, and sought more detail on the weakness in U.S. Knees.

Answer

CEO Deepak Nath stated that despite a strong quarter, the company is maintaining its full-year guidance due to macro uncertainty and the required step-up in H2 performance. He attributed the U.S. Knees softness to a strategic refocus on high-volume accounts and some procedural slowdown. CFO John Rogers provided a detailed H2 margin bridge, explaining that while some savings were pulled forward, the impact of tariffs and R&D catch-up in H2 supports maintaining the 19-20% guidance.