Segmentation of key figures

6 Months Ended

Jun. 30, 2023

The segment information disclosed in these Condensed Consolidated Interim Financial Statements reflects historical results consistent with the identifiable reportable segments of Alcon and financial information that the Chief Operating Decision Maker ("CODM") reviews to evaluate segmental performance and allocate resources among the segments. The CODM is the Executive Committee of Alcon.

The businesses of Alcon are divided operationally on a worldwide basis into two identified reportable segments, Surgical and Vision Care. Alcon's reportable segments are the same as its operating segments as Alcon does not aggregate any operating segments in arriving at its reportable segments. As indicated below, certain income and expenses are not allocated to segments.

Reportable segments are presented in a manner consistent with the internal reporting to the CODM. The reportable segments are managed separately due to their distinct needs and activities for research, development, manufacturing, distribution and commercial execution.

The Executive Committee of Alcon is responsible for allocating resources and assessing the performance of the reportable segments.

In Surgical, Alcon researches, develops, manufactures, distributes and sells ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery and glaucoma surgery. The surgical portfolio also includes implantables, consumables and surgical equipment required for these procedures and supports the end-to-end procedure needs of the ophthalmic surgeon.

In Vision Care, Alcon researches, develops, manufactures, distributes and sells daily disposable, reusable, and color-enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, glaucoma, contact lens care and ocular allergies, as well as ocular vitamins and redness relievers.

Alcon also provides services, training, education and technical support for both the Surgical and Vision Care businesses.

The basis of preparation and the selected accounting policies mentioned in Note 1 are used in the reporting of segment results.

The Executive Committee of Alcon evaluates segmental performance and allocates resources among the segments primarily based on net sales and segment contribution.

Net identifiable assets are not assigned to the segments in the internal reporting to the CODM, and are not considered in evaluating the performance of the business segments by the Executive Committee of Alcon.

Segment contribution excludes amortization and impairment charges for acquired product rights or other intangibles, general and administrative expenses for corporate activities, transformation costs, fair value adjustments to contingent consideration liabilities, past service costs primarily for post-employment benefit plan amendments, integration related costs and certain other income and expense items.

General & administration (corporate) includes the costs of the Alcon corporate headquarters, including all related corporate function costs.

Other income and expense items excluded from segment contribution include fair value adjustments of financial assets in the form of options to acquire a company carried at fair value through profit and loss ("FVPL"), net gains and losses on fund investments and equity securities valued at FVPL, restructuring costs, legal provisions and settlements and other income and expense items not attributed to a specific segment.

Net sales and other revenues by segment


	Three months ended June 30		Six months ended June 30
($ millions)	2023	2022	2023	2022
Surgical
Implantables	437	444	864	899
Consumables	714	644	1,370	1,245
Equipment/other	231	208	452	411
Total Surgical net sales to third parties	1,382	1,296	2,686	2,555
Vision Care
Contact lenses	594	547	1,209	1,104
Ocular health	426	357	840	716
Total Vision Care net sales to third parties	1,020	904	2,049	1,820
Total net sales to third parties	2,402	2,200	4,735	4,375
Vision Care other revenues	20	17	39	31
Total net sales and other revenues	2,422	2,217	4,774	4,406

Segment contribution and reconciliation to income before taxes


	Three months ended June 30		Six months ended June 30
($ millions)	2023	2022	2023	2022
Segment contribution
Surgical	407	348	788	720
Vision Care	174	147	373	317
Total segment contribution	581	495	1,161	1,037
Not allocated to segments:
Amortization of intangible assets	(187)	(162)	(377)	(324)
Impairment charges on intangible assets	—	(61)	—	(61)
General & administration (corporate)	(74)	(70)	(142)	(132)

Transformation costs	(26)	(9)	(52)	(24)
Fair value adjustments to contingent consideration liabilities	—	7	—	7

Integration related costs	(8)	(4)	(14)	(9)
Other	(16)	4	(38)	(48)
Operating income	270	200	538	446
Interest expense	(48)	(31)	(95)	(60)
Other financial income & expense	(9)	(22)	(17)	(39)
Income before taxes	213	147	426	347

Net sales by region(1)


	Three months ended June 30						Six months ended June 30
($ millions unless indicated otherwise)	2023			2022			2023			2022
United States	1,105	46	%	990	45	%	2,183	46	%	1,929	44	%
International	1,297	54	%	1,210	55	%	2,552	54	%	2,446	56	%
Net sales to third parties	2,402	100	%	2,200	100	%	4,735	100	%	4,375	100	%

(1) Net sales to third parties by location of third-party customer.