Veronika Dubajova

Veronika Dubajova asked about the visibility of the Unity order book, the demand split between CS and VCS, and confidence in sustaining double-digit equipment growth in 2026. She also questioned the assumed 498 million shares in guidance versus the 488 million year-end figure and the desire for future buybacks.

Answer

David Endicott, CEO, stated high visibility into the Unity funnel and order book, expressing confidence in strong performance for the year. Tim Stonesifer, CFO, clarified that the 498 million shares account for employee vesting and reiterated Alcon's capital allocation philosophy: organic investments first, then BD&L/M&A, and finally returning cash to shareholders, with future buybacks reviewed annually.

Veronika Dubajova inquired about the visibility of the Unity order book, the demand split between CS and VCS, and confidence in sustaining double-digit equipment growth in 2026. She also asked about the share count discrepancy (498 vs 488) and future share buyback intentions.

Answer

CEO David Endicott confirmed high visibility into the Unity order book and strong demand, particularly for the cataract system. CFO Tim Stonesifer explained the share count difference was due to employee vesting and reiterated the capital allocation philosophy prioritizing organic investments, M&A, and then returning cash to shareholders, with future buybacks reviewed annually.

Veronika Dubajova of Citi inquired about the Unity launch, asking when Alcon might achieve a 3,000 annual installation run-rate and requesting an outlook for the equipment business in the second half of the year.

Answer

CEO David Endicott stated the Unity launch is on track, with installation capacity being the primary gating factor, not demand. He reiterated the long-term goal of replacing the 30,000-unit installed base over a decade. CFO Tim Stonesifer added that new products, led by Unity, are a key driver for the expected sales acceleration in the second half, particularly in Q4.

Veronika Dubajova inquired about the expected shape of organic growth for the remainder of the year, seeking clarity on the acceleration from 3% to the guided 6-7% and its key drivers. She also asked whether the subdued U.S. cataract market is a market-wide issue or a competitive one for Alcon.

Answer

Chief Financial Officer Tim Stonesifer explained that the growth acceleration is back-half weighted, driven by the cadence of new product launches like Unity VCS and PanOptix Pro, and he anticipates high single-digit revenue growth in the second half. Chief Executive Officer David Endicott attributed the soft U.S. cataract market to a surgeon productivity issue, particularly following private equity acquisitions leading to surgeon retirements, rather than a loss of competitive share. He expressed confidence that new products like Unity VCS will help improve efficiency.

Veronika Dubajova questioned the full-year organic sales growth guidance of 7-9%, asking what provides confidence for a back-half acceleration given the current trend toward the low end. She also asked about the contribution from China VBP-related stocking to implantable sales.

Answer

CFO Tim Stonesifer responded that achieving the higher end of the guidance depends on factors like market growth, pricing effectiveness, and the pace of the China VBP rollout, acknowledging that current trends point toward the low end. CEO David Endicott added that the VBP contribution was relatively small and that implantable strength was broad-based, driven by strong penetration growth globally, even when excluding China.

Veronika Dubajova asked for more detail on Philips' flat China guidance for 2026, contrasting it with more cautious outlooks from competitors, and sought insights into the underlying building blocks and market observations. She also questioned the exceptionally high 23% Personal Health margin in Q4, asking about structural changes enabling this performance, especially given past historical highs and current tariff impacts. In a follow-up, she asked if any specific region or category drove the significant revenue surprise in Personal Health.

Answer

CEO Roy Jakobs explained that China is expected to stabilize in 2026, with Personal Health showing gradual sell-out improvement, while the health system side remains cautious due to unpredictable tender conversions. He noted a differentiated picture between PH and D&T, with China contributing to growth but less than other regions. CFO Charlotte Hanneman attributed the strong PH margin to innovation (e.g., Sonicare, OneBlade), premiumization, strong commercial execution (winning with major online retailers), and company-wide productivity and disciplined execution. For the follow-up, Charlotte stated that the strong PH revenue performance was broad-based across businesses and geographies, with good momentum in grooming and benefiting from an easier comparable due to China's destocking in the prior year.

Veronika Dubajova asked for Philips' perspective on the China market, specifically the building blocks for their flat 2026 guidance compared to competitors expecting a decline. She also questioned the exceptionally high 23% Personal Health (PH) margin in Q4, which historically peaked at 21% even without tariffs, asking about the structural changes enabling this improved dynamic. Additionally, she followed up on the unexpected strong PH growth in Q4, asking if any specific region or category drove the significant surprise.

Answer

Roy Jakobs (CEO) explained that Philips expects China to stabilize in 2026, contributing to growth cautiously. He noted differentiated trends: PH showing improving sell-out and sales, while the health system side remains more cautious due to tender unpredictability, with growth primarily driven by North America and other regions. Charlotte Hanneman (CFO) attributed the strong Q4 PH margin to operating leverage from 14% sales, and structurally to higher-margin innovations (Sonicare, OneBlade) driving premiumization and prices, strong commercial execution with major retailers, and company-wide productivity and disciplined execution. She further clarified that the strong PH growth was broad-based across businesses and geographies, with good momentum in grooming, and benefited from a lower comparable due to China destocking last year, though numbers remained strong even excluding China.

Veronika Dubajova of Citi requested more detail on the drivers and sustainability of the strong performance in the Personal Health segment, particularly in Europe and the U.S., and asked for elaboration on the specific modalities driving the robust order strength in the health systems businesses.

Answer

CEO Roy Jakobs explained that Personal Health's momentum is driven by new innovations like the i9000 shaver and new Sonicare ranges, with strong performance in the U.S. and Europe. He noted that order strength was broad-based, with double-digit growth in Image-Guided Therapy (IGT), high-single-digit growth in Precision Diagnosis (PD) led by MR and CT, and resilient demand in Connected Care despite a high comparison base.

Veronika Dubajova from Citigroup Inc. questioned the drivers and sustainability of the strong growth in the Personal Health segment, particularly in Europe and the US, and requested more detail on the specific modalities and regions contributing to the robust order intake strength.

Answer

CEO Roy Jakobs explained that Personal Health momentum is broad-based, driven by new innovations like the i9000 shaver and Sonicare range, with strong sell-out in North America and Europe. He expressed confidence for H2, supported by a pickup in China. For order strength, he detailed double-digit growth in Image Guided Therapy (IGT) across multiple regions, high-single-digit growth in Precision Diagnosis (PD) led by MR and CT, and strong momentum in hospital patient monitoring.

Veronika Dubajova asked for a breakdown of the tariff guidance, seeking the gross versus net impact and the geographic drivers. She also questioned Philips' competitive standing, noting its order growth appeared to underperform peers and asking about specific areas of softness.

Answer

CFO Charlotte Hanneman clarified the net tariff impact is EUR 250-300 million after hundreds of millions in mitigations, with the majority stemming from high U.S.-China tariffs. CEO Roy Jakobs defended the company's competitive position, highlighting double-digit order growth in North America and mid-single-digit growth in Diagnosis & Treatment (excluding strong service orders), which he believes is competitive. He attributed this momentum to new AI-driven innovations meeting customer demand for productivity.

Veronika Dubajova of Citigroup Inc. asked for clarification on the cautious D&T growth outlook for H2, probed again on the conservatism of the margin guidance, and requested an update on China's market dynamics and the potential impact of government stimulus.

Answer

CFO Abhijit Bhattacharya attributed the cautious D&T outlook to a very tough comparison in Q3, which saw mid-teens growth last year. On margins, he reiterated that H1's 90 bps improvement is in line with guidance and it's too early to change it. CEO Roy Jakobs, recently returned from China, noted that while the market is improving, it's not "out of the woods." He expects a gradual recovery in H2, with orders preceding sales. He views the government stimulus as a "bonus" on top of fundamental demand, with its timing and size still uncertain.

Veronika Dubajova from Citi asked for clarification on U.S. patient inflow dynamics, seeking to distinguish between market recovery and internal process improvements, and questioned the timeline for returning to 2%+ volume growth.

Answer

CEO Helen Giza explained that the positive inflow trend, the best since 2020, is a result of both market factors and internal operational improvements. She reiterated that achieving the 2%+ growth target is dependent on mortality rates normalizing, but the current strength in inflows is an encouraging sign for 2026.

Veronika Dubajova of Citigroup Inc. asked about the sustainability of the strong U.S. revenue per treatment trend, probing commercial and Medicare Advantage dynamics, and questioned the contribution of pricing to the Care Enablement segment's margin improvement.

Answer

CEO Helen Giza attributed the positive revenue per treatment trend to the PPS rate increase and moderate 1-2% price increases across the payer portfolio. CFO Martin Fischer noted that Care Enablement pricing momentum was robust and positive globally, even after accounting for headwinds from volume-based procurement in China.

Veronika Dubajova of Citigroup Inc. inquired about the U.S. same-market treatment growth, specifically asking for color on June's performance and the outlook for the second half, and questioned the drivers of the Care Enablement segment's margin improvement, particularly the role of pricing.

Answer

CEO Helen Giza explained that while elevated mortality impacted H1 growth by 60 basis points, June showed the strongest treatment per day this year due to improved admission times and reduced mistreatments. She noted the new guidance of flat to 0.5% assumes current mortality levels persist. For Care Enablement, Giza confirmed the team is delivering on its plans and stated that pricing contributed to about two-thirds of the margin improvement in the quarter.

Veronika Dubajova of Citigroup asked about the drivers and sustainability of the strong growth in Joint Repair (ex-China), the company's exposure to Skin Substitutes risk from new CMS proposals, and if the buyback indicates future cash return capacity.

Answer

CEO Deepak Nath attributed strong Joint Repair growth to the Q-Fix and REGENETEN platforms, with the latter's expansion into new indications suggesting sustainability. He acknowledged the CMS proposal would be a headwind but stated the company could navigate it. CFO John Rogers clarified that the capital allocation policy prioritizes growth investments and dividends over buybacks, which are an option for excess cash and do not compromise growth ambitions.

Veronika Dubajova of Citigroup Inc. asked about the drivers and sustainability of the strong double-digit growth in Joint Repair (excluding China), the company's exposure to risks from new reimbursement proposals for skin substitutes, and whether the share buyback signals future capacity for cash returns.

Answer

CEO Deepak Nath attributed the robust Joint Repair growth to the strong performance of the QFix and REGENETEN platforms, with REGENETEN expanding into new indications. He acknowledged the skin substitute reimbursement changes as a headwind but expressed confidence in navigating it. CFO John Rogers reiterated the capital allocation policy, positioning share buybacks as the final use for excess cash after investments in organic growth, M&A, and dividends.

Asked about the Hearing market environment, competitive pricing pressure, the realism of maintaining H1 growth momentum in H2, and the competitive landscape in Enterprise.

Answer

The company acknowledges a slightly softer Hearing market but nothing dramatic. They haven't seen significant changes in pricing competition. They are confident in their H2 Hearing outlook due to the strong, globally-launched Nexia portfolio. In Enterprise, the competitive landscape has been changing gradually since the HP/Poly acquisition, but GN is navigating it well.

Asked for details on the customer types being won with the Nexia hearing aid and about the phasing of costs, particularly whether selling and marketing expenses would increase through the year.

Answer

The expansion in points of sale for Nexia is largely driven by independents in the U.S., with similar dynamics expected in other markets. Sales and marketing costs are expected to increase in absolute terms through the year due to seasonality, especially in Q4, but will remain stable as a share of revenue, supported by synergy realization.

Inquired about the initial market feedback and performance of the new ReSound Nexia launch compared to OMNIA, the specifics of the One-GN restructuring, and whether the DKK 600 million synergy target is a net or gross figure. In a follow-up, she asked for gross margin expectations for Q4 and 2024, and clarified the cost base for the synergy calculation.

Answer

The initial feedback for the ReSound Nexia launch is very positive, tracking 'equally strong, and if anything, slightly stronger' than the OMNIA launch. The One-GN restructuring aims for growth and innovation, with the DKK 600 million synergy figure being a net number. For Q4, Audio gross margin will face pressure from mix, while Hearing's will be stable. The DKK 400 million synergy for 2024 is calculated against the cost base excluding the DKK 300 million one-off charge.