Alcon Inc. (NYSE:ALC) Q2 2023 Earnings Call Transcript

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And I think it probably reflects a view that you can — whatever the historical growth rate was, let’s call it, 3%-ish, 2% to 3% in the US, you’re going to see something a little bit warmer than that for an extended period of time because there isn’t really capacity to bring a whole bunch of people through in one bolus or something. It’s really going to be getting patients back in the office, getting the surgery centers up and running, outfitting additional ORs, getting staff trained and moving that way. That’s really I think a durable idea probably for several years. I think between mono and premium, we continue to believe that if given the right understanding, the headroom in this is quite large. We think there is kind of in that 30% to 40% of patients should be interested in or are interested in at a price an advanced technology lens because it gives them freedom from spectacles, it gives them reading, it gives them really good intermediate.

And our lenses obviously are the preferred choice and continue to be in the US. So we’re very comfortable that that is going to continue on. I do think that what’s nice to see is some of the staffing in the offices is improving. And so in the back half of the year, we’re hopeful that we’ll see long-term penetration continued to move forward and I would just say 50 basis points in the US would be a good number. That’s certainly what we think about. Outside the US, I think we do a little better than that because it starts from a lower level kind of 12%, but again we benefit a great deal from the penetration moving up and we again — we’re encouraged by what we see.

Anthony Petrone: And just a quick for Tim an update on the DSM flex lines just when will those be complete and any thoughts on a margin uplift over time from that effort? Thanks again.

Tim Stonesifer: Yeah, nothing really different from what we talked about on Capital Markets Day. We’ve got some more lines going in next year, I’d say next year is sort of our next our last kind of big installation phase, if you will. And then as you get to the kind of the ’25, ’26 timeframe, it’s more of just kind of keeping pace with what we think the expected demand would be, but no significant changes from what we talked about at Capital Markets Day.

Anthony Petrone: Thank you.

Operator: Our next question is from Larry Biegelsen with Wells Fargo. Please proceed.

Lawrence Biegelsen: Good morning. Thanks for taking the question. Quick one for Tim and then I had a follow-up. On the operating margins, Tim, were higher in Q3 than — versus Q4 in both 2021 and 2022, should we expect a similar dynamic this year? And I had one follow-up.

Tim Stonesifer: Yeah, like I said, we’re going to have a little different dynamic than what we’ve had historically because of that inflation. So it takes six months to work that inventory through. So I would just take your first half actuals and peg whatever you think you were going to be in that 19.5% to 20.5% range, and I sort of model it that way.

Lawrence Biegelsen: Got it. And then David on Aerie, it looks like it’s not 100% clear but it looks like revenues were down quarter-over-quarter. I heard you talk about the teams, I think total prescription growth. Could you give us an update on how Aerie is doing kind of the revenues on a year-over-year basis and just an update on your kind of appetite for M&A and if you’re still focused on pharma? Thank you.

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