Susannah Ludwig

Susannah Ludwig asked about the percentage of Alcon's implantables business that China represents, expectations for the upcoming VBP, and whether Alcon would consider moving production to China long-term due to the focus on local production.

Answer

David Endicott, CEO, stated that China broadly represents 5-6% of total business, primarily surgical. He explained that Vivity's fast growth in China hit DRG reimbursement caps in Q4, leading to a shift to bifocals. For the VBP, he expects price erosion but volume growth to offset it, aiming for roughly flat year-on-year. He confirmed no current IOL production in China but is considering moving some equipment manufacturing there due to 'buy China' rules, while IOLs are sourced from other locations to avoid tariffs.

Susannah Ludwig asked about China's percentage of the implantables business and expectations for the upcoming VBP. She also followed up on the long-term strategy for moving production to China given the focus on local manufacturing.

Answer

CEO David Endicott stated China is 5-6% of total business, primarily surgical, and noted that Vivity's growth hit a reimbursement ceiling in Q4. He expects VBP to bring price erosion but volume growth, aiming for roughly flat year-on-year. He mentioned considering moving some equipment manufacturing to China due to 'buy China' rules but not IOLs broadly.

Susannah Ludwig of Bernstein asked for more detail on the weak growth in the consumables business, questioning which regions were most affected and whether the subdued trend would continue, as well as the price contribution in Q2.

Answer

CEO David Endicott confirmed that the consumables business performance is a direct proxy for the slower procedural market. He noted the slowdown was global, affecting both U.S. and international markets, and that similar trends are expected in the second half of the year, consistent with guidance. He also stated there was no material change in price contribution versus Q1.

Inquired about the competitive impact of PC players entering the enterprise headset space, the percentage of sales from top accounts susceptible to bundling, and competitive dynamics in the Hearing market during Q3.

Answer

The company has so far defended its position well against PC players and bundling attempts, which are mostly seen in top accounts. They did not disclose the sales percentage from these accounts. In Hearing, they believe they continued to gain market share in Q3 and did not observe a dramatic change in competitive dynamics compared to Q2.