Alcon Inc. (ALC) Earnings Call Transcript & Summary

Please welcome Vice President, Investor Relations, Daniel Cravens.

Good morning, everybody. Welcome to Alcon's 2025 Capital Markets Day. Look, on behalf of everybody here at Alcon, I want to say welcome to our forward campus. I know a lot of you guys have been here. We were here 2 years ago for our Capital Markets Day. So welcome back. We're also webcasting so I want to say good morning and welcome to everybody who took the time to dial in. We really appreciate your time and your interest in Alcon. My name is Dan Cravens. I am the Vice President of Investor Relations here at Alcon. There's this old saying that time flies when you're having fun. For me, that couldn't be more true. I actually just celebrated my 3-year anniversary here just last month. And I honestly can't believe that it's been 3 years. It just went by so fast. So for me, it's a real honor to be part of this team and to be here with you today to talk about all the really wonderful things that our more than 25,000 people are doing every day to help people see brilliantly. So I'll quickly go into the agenda. Look, we've got a really good program for you this morning. David is going to walk us through how Alcon leads in eye care. He's going to talk about some of our end markets and our strategy. Tim will follow up with our financial outlook and expectations, and then we'll move on to a Q&A session with both David and Tim. We'll take a break after that, and then we'll dig deep into the franchise section. So we'll start with Sean, who's going to walk us through how Alcon leads in ophthalmic surgery. And then we'll hear some insights from both Max and Jonathan about our innovations in contact lenses and ocular health. And then lastly, Jeannette is going to bring us home. And she's going to close this out and discuss how Alcon is innovating for the future. So I think you'll find it really interesting. And then lastly, we'll do a group Q&A with the whole team on the panel. And then after that, we'll have a lunch upstairs for everybody just outside in the atrium up here. So a couple of housekeeping items before we get going. I know a lot of you have asked about Wi-Fi. We put the address, the network name and password up there for you to take down. We'll leave it up here for a second. Lavatories, if you haven't found to the right. There's power outlets that are down by your feet. It's dark down there, but they're there. They're hard to see. Take note of the exit signs in the unlikely event that we need them. And then lastly, please just remember to silence your cell phones as a courtesy to everybody else. So I will move on to perhaps -- it's the moment you've all been waiting for, but it's perhaps the least interesting part of the presentation, which is the forward-looking statements. Just note that today's presentation does contain forward-looking statements. There's numerous risks and uncertainties that could cause our actual results to differ materially from those that are included in the presentation. We undertake no obligation to update those assumptions subsequently. So please don't place any undue reliance on them. To review the risk factors, I would point you to our Form 20-F in our interim financial report. Those are both available online and have been filed with the SEC. Lastly, in case you haven't noticed, the presentation is posted on our website. So please download it and do as you want with it. And then, look, before I hand it over to David, I want to give a special shout out to the team that helped put this event together. There's a lot of work in terms of planning, logistics, content creation, everything has gone really well. So we really appreciate all the help and work you guys did to make this day a great day. So without further ado, I would like to hand it over to introduce our CEO, David Endicott.

Please welcome Chief Executive Officer, David Endicott.

Back to [indiscernible], if you haven't been here before, we shot you out. It's kind of cool in that tool. -- maybe of what you've been paying. It's an exciting time to be here that you came. So thank you I want to do today is really focus on 3 ideas. The first one is really fundamental, which is the markets that we play in are resilient. They are underpinned by very positive megatrends, and that creates a base of financial security that gives us a market growth that generally runs in that mid-single digits. That's the starting point for us. So if we show up, do well, we should be able to grow in that sense. And that's a really important concept because at some level, it gives you some confidence that over the long haul, these markets tend to run in a pretty predictable fashion. The second thing you're going to hear really is that we've entered a second strategic horizon. From the time that we spun, many of you have been here with us since we spun. And we had a real sense of urgency spinning out. We had to stand stuff up. We had to get clean. We had to get a kind of a whole bunch of things organized. We offshored some things and created shared service centers. We've done a lot with this company in the last 6 years. But over the last couple -- since the last Capital Markets Day, we spent a lot of time thinking about what does a good company look like and what's a great company look like. And we are in a different frame right now where we're thinking a lot about how do we create operational excellence. And so we are really focused on things like reworking our end-to-end processes, things like how we deploy capital, things like how do we make decisions about upstream products. And that -- that efficiency and the excellence that we're trying to get after is really this next frame. And the third thing you're going to hear really, and this is where you're going to see most of the day. Most of the day is going to be about our innovation engine because it really is humming. I mean, it's hitting on all cylinders right now. We've got a lot of products coming this year. I think there's 7 or so that we'll launch in the first half of this year. And then we've got a bunch coming along the way. So you're going to see where we've been spending money and where that productivity has happened. And yet, I think in the -- hopefully, in the same sense, you'll get a feel for how productive we're going to be going forward as well. So that's the gist of the day, and let me try and take you through a little bit of it at a high level. First and foremost, we are in very resilient markets, and it's underpinned because at the core of it, the population is aging and eye disease comes with age. And certainly, the world is getting a little bit older. And as we look at that and we say, okay, what is the opportunity in the Western markets where there's increasing wealth and -- and people want to spend money in eye care, it's a very high desire. And when you ask seniors in particular, what is it that they worry about, #1 is they worry about memory loss. And the second thing is eyesight. And so what you find is that in the aging population, there's a deep desire to spend on their eye care, and there is still a lot left to do. The other one that's obvious out there is that our kids are getting more and more myopic. So 50% of the world is going to be myopic by 2050. That's a huge problem. It's one that we work on every day. And it's a real opportunity, I think, to kind of solve some problems here, whether that's refractive surgery, whether that's contact lenses, whether that's spectacles. It doesn't really matter. It's a big problem that we can try to -- we're working on and want to continue to build against. And then at the core of it, there's a lot of new technologies, and there's a lot of stuff that just simply hasn't been solved. And I think you're going to hear a lot of those ideas today that we're working on long-term that are real important ideas. There are more cataracts than there are cataract surgeons. We've got to figure out a way to be more productive, more efficient. You're going to hear about Unity VCS, which does a lot to improve that. You're going to -- we're working on a lot of different disorders that in glaucoma, for example, we know SLT is a really exciting idea, but it hasn't been easy to do. We think we've made some progress there, very important for the glaucoma population. So I think as you go forward, there continues to be a really large need for new technologies, new solves, because 90% of visual impairment could be prevented or curable if we were active with it. And -- so the real potential of the market, if you were to treat a lot of these disorders that are simply out there untreated or have yet to be solved is extraordinary, it's certainly more than $100 billion or so. So we think about this market as having lots of unmet need, lots of opportunity to grow and at the core of it then kind of consistently grows roughly in that mid-single digits around when you composite the markets in which we play. So a really exciting place to start. This is kind of roughly how we see the markets that we play in. This isn't the entire market, but it is the ones that we define. And so we did this -- we've done this last several capital markets to give you some sense of how we see the next 5 years. And what we see is, in aggregate, we play in a market that's about $35 billion. It will grow in the mid-single-digit range. And depending year-on-year and where we are and what happens, we've seen that to be true for really the past 10 or 20 years. In the implantables business, probably a 6% growth, a little bit faster than procedural growth because we're seeing a move to AT-IOLs. In consumables, you're going to see roughly a 5% growth, not too much faster than the procedural growth, but really driven by price and mix coming from, frankly, our new equipment that will be driving a more efficient market. You see equipment and others continuing to grow faster than the other 2 segments, principally because we'll be entering some series of new equipment over the next 5 years that we think adds a lot to it and that will drive real interest in productivity and productivity gain. Contact lenses, we flipped to Vision Care, a $22 billion market all-in in Vision Care and a combination of evenly split between the contact lens market at $11 billion and what we've defined as our kind of addressable market in ocular health of $11 billion, which is a combination of pharmaceutical entities that we've taken the glaucoma market and the dry eye market and then the OTC market, we've added those together. There's obviously more to the ophthalmic pharmaceutical market than what we've included in here, but this is where we're currently playing. So both of those markets, again, in the mid-single digits. So that gives you some sense of why we are confident that we can continue to grow with the market, certainly, but our objective, of course, is to grow faster than the market. If we invest properly, we do the right things we can get there. All right. That said, one of the core things we spent time thinking about when I say we've kind of entered this new strategic horizon, it has been to really define who we are, what we're doing and how we compete. And at the core of it, we are a specialist, we're a specialty company that works in eye care. And what we do is we apply a superior amount of customer knowledge and technical application knowledge to the markets in which we participate. And if we do that more efficiently, if we're just a little bit better than everybody else at making good decisions about technologies, good decisions about what customers want and then deploy capital quickly, that's our competitive advantage. And so it sits in the people that work here. It sits with the intrinsic knowledge of a corporation that spent its entire life thinking just about eye care, right? So that's the specialist view that we have. We're not doing anything other than eye care, we're really good at it and we think we can -- if we can hit it just a little bit better than our competitors, we're going to continue to do really well here. So if we do that, we will make good decisions about what we buy. We'll create data that is really important for our customers. We have one of the most extraordinary footprints in the world. We have people in 140 countries. We run the biggest, most important service group in the OR. If there's not an OR in the world that we don't have somebody sitting in right now. And we reinvest our profits back in R&D in a very meaningful way. That obviously attracts people who want to be in eye care. And if we can do that real well, obviously, it's a positive cycle for us. So that's kind of what we're trying to accomplish right now. And we've been very excited about progress we've made. Let's think about it from where we've been. When we spun out, we had a whole different picture of where we were than where we are now. Today, we've got almost 2,000 folks in R&D working on eye care. It's the largest single eye care operation in the world. Today, we've also spent over the last 5 years, about $5 billion in R&D to try and advance the products that you're going to see today and some of the programs that you'll see coming in the future. Last year alone, we did -- we are lucky to see just about everything that's going on in eye care. And so people bring us ideas. We look at them. We did 20 deals last year, either in active projects that are on the market or things that are upstream that we are investing in that are better held outside until we can understand whether or not we want to take a bigger position in them. We also have obviously got 90 internal projects -- 90-plus internal projects that are generally on their way in the next 5-year frame. And of course, we've been moving our R&D up slowly to kind of invest in this, importantly, we've been talking about really historically this kind of 7% to 9%. What you're going to hear today is that we're moving ourselves into this kind of 8% to 10% range to try and keep ourselves investing as we can into our R&D organization. So we're very excited about what's going on here in the innovation engine. And what you can see is what it's developed. So here's what you ought to be excited about. All of that money and all that time and all those folks working on this stuff have created an immense amount of product flow, both in the '21 to '24 frame, but what you're going to hear about today is Unity VCS. You're going to hear about PanOptix Pro, you're going to hear about Voyager -- you're going to hear about Unity DX, all things that are in the near-term frame. You're going to hear about -- you know about Systane, you know about TOTAL30 and TOTAL1, but you're going to hear about PRECISION 7. You're going to hear about our new modalities, AR-512, which is our new pharmaceutical agent and SYSTANE Pro, which was launched just recently. So lots going on and the productivity of what we're doing is the critical element of what we were trying to communicate today. That said, the reason we're doing it is because, of course, before we were spun out, we were growing at a certain rate, and it was obviously not -- it was pretty much at or below market. And now we're growing kind of above market, and that, of course, is our aspiration. We got a little bit in '23 of Aerie in there. So I realize that that's a little bit smoother between '23 and '24. But fundamentally, if you believe the markets are growing roughly in that 4 to 6 frame, that's where we should be and it is where we are for the last several years since spin. So what that does for us and the basic economic proposition is that if we can grow sales faster than market, and we can get it up into that kind of mid-single digits or better number. And we can grow the cost structure at a reasonable number, just slightly better than inflation and create efficiencies inside the organization to allow us to leverage the organization, we can generate operating leverage. And most of the gains that we've had over the last, really, 5 years have been about operating leverage. Some gross margin gain for sure. But really, it's about operating leverage, which is where we've gotten probably 70% of our gain in operating income. And that's what you see here is that constant core net income growth year after year after year, compounding going forward. If you take a look back at '19 when we spun, it's an interesting comparison, right? $7.4 billion in revenue, $9.8 billion this year -- or last year, I should say, 38%, we shaved 5 points of G&A -- SG&A out. And what did we do with it? We dropped 100 basis points into R&D, and we put the rest really to the operating income. And that does not include what we covered in foreign exchange. So when you really kind of add all that up and Tim will show you a little bit more about that. We've had a terrific 4, 5 years here since spin and we're in a really good place. And cash flow obviously come with that. We said early on when we spun out, we were going to spend almost all the cash we had because we needed to invest to get everything running again, we've done a lot of that work. And so we find ourselves now in a new frame where we have the flexibility to do a lot of things that we couldn't once do. So again, really interesting picture from where we've been to where we are, and then we'll show you really where we're going on a next-generation basis. So one of the things that we've been talking a lot about is when we think about the strategy we've got, what are the priorities that we've got going forward? What are the next 5 years look like for us? And I think it starts with understanding that the most important thing we got to do is continue to feed the core business. So we've got a lot of products that are in the surgical business. We've got a lot of opportunity in the surgical business. We've got a big bunch of products and a lot of opportunity of Vision Care. We need to continue to do that work. And -- and to do that, we've got to accelerate R&D productivity. So you're going to hear us talk about things like we're working on something called our end-to-end process create to make. The purpose of doing that is to redefine the processes that we use to try and move data more quickly to try and clean up and speed up our innovation process. And so we are doing that precisely to put more products through that funnel, but also to try and make that a much more efficient per project cost. The second thing we're going to do, really importantly is continue to work on world-class efficiency with what we've loosely call digital enterprise, which is exactly what I was just saying. It's really this quote to cash and create to make, which is basically if you add them together, that's the way the business runs. We have a lot of effort going on in our commercial operation to try and streamline how much inventory we have, what our collections look like, what our customer service looks like, how we handle all of the things that create the experience that is the customer experience and what it costs us to do that. We're doing the very same thing in the create to make world, which is how does -- how we get from design and creation of product to all the way through to production, transfer of technology into the R&D -- from R&D to manufacturing. And those processes the more efficient they get and the more we digitize those and use analytic tools to improve what we're doing, the more efficient we get, the more ability we have to scale on a fixed cost. So it's an investment in what we're doing to try and hold costs and, as we said, kind of that slightly better than inflation zone and then get the leverage -- operating leverage that we get if we can grow revenue in that kind of mid-single digits or better range. So that's where we are. The other 2 big things we're doing is -- you're going see them today is we made -- you would have seen last night, we talked about a little bit with you all last night, we made a few moves in the pharmaceutical business. We're going to continue to work on how do we take intelligent, smart moves to get ourselves into a business that we think we have a right to be in which has been a very big part of any of you guys want on the manufacturing tour you saw, we still make across the street, most of what Novartis sells in the pharmaceutical world. So we are very interested in getting back into that business. but we're patient and we're also trying to find the right kinds of ideas. So the Aurion thing we'll talk about today. But again, that's a really exciting front edge of the market kind of idea for us where we think we can participate in a very meaningful segment that does a lot for patients but also is a very productive use of capital. World-class product development commercialization capabilities are really what we're talking about in the underlying operational excellence frame what we're trying to get to is a real knowledge of when markets are going to develop, what's the probability that they're going to succeed, what the size will be and what the technology application is. And it's those discussions that kind of inform the choice of how we deploy capital. We're going to spend a lot of time continuing to develop that. And obviously, what that does is it drives that profitable growth. We're going to get that profitable growth from operating leverage. All right. That said, let me just kind of cover the -- what we released last night. Obviously, we had a real interest in this company called Aurion Biotech. We did acquire the majority interest in it earlier this week. There is a really interesting topic that is the -- there is a few corneas around the world for a lot of folks who need them. So when you look at corneal transplants, there's not enough tissue to really kind of supply the demand for people who are in a situation where they are either going blind or already blind and for endothelial cell disease, which is a common cause of that, where the endothelial cells don't function correctly and the cornea clouds because it can't pump water out of the cornea. This technology has figured out how to take a single donor cornea and make almost 1,000 doses. So you can take 1,000 doses with a ROCK inhibitor injected into the eye after you denude the endothelium, and that will adhere to the endothelium create a new pumping mechanism and clear the cornea. So it's an amazing technology that the Aurion folks have created. It's been designated breakthrough by FDA, and we're excited about the possibility of taking that worldwide. This has already been approved in Japan for bullous keratopathy. We have a really good idea of what the data looks like in the Phase II work, and we'll start Phase III in the fall. So we're excited to work with those guys, and they are really smart folks, and we are really thrilled to have been part of this process for a while now. So this is the kind of thing I think that we get excited about where we can really solve a really unmet need that's important to patients and obviously, it's a good use of capital. That said, one of the things that as I kind of jump off of that, that I want to just finish with is the people that work here get up every day and have the kind of pleasure of saying to their kids, "Hey, what are you going to do at work? We get to talk about is helping people see brilliantly. And it is an animated feature of how we think about the world. And I want to share with you just as I exit here, kind of one of the local things we've done in Fort Worth because it's kind of cool. And if you haven't done it before, and you'll see the kind of smiles on the kids' faces, but also the -- watch for the smiles on our employees faces. Run this video for me. Thank you. [Presentation]

Please welcome Chief Financial Officer, Tim Stonesifer.

Thank you. Thank you very much. My name is Tim Stonesifer. I'm the CFO here. I've met most of you, but for those of you who I haven't, just a brief introduction. I started my career at General Electric. I spent 18 years there in a variety of operating finance roles. And then I spent 3 years at General Motors as the CFO of their international operations based in Shanghai. And then I went to Hewlett Packard and I was there for about 5 years, and I started out as a divisional CFO. And then when they separated, I was the CFO of their enterprise business. So I started here in April of 2019. I've been here for 6 years, now close to 6 years, and it has been an incredible journey. But enough about me. Let's talk about you. Okay. Thank you so much for those of you in the room who made the trip here. I know traveling now is a little bit difficult. So talking with folks last night, we've got people coming in from Zurich, from London, from Geneva, Paris, New York. So thank you very much for investing the time. It was great. I know the management team really enjoyed spending time with you and getting your perspectives last night. And hopefully, you enjoyed the -- the product demos and the manufacturing tour. And for those of you on the webcast, thank you for investing your time this morning. Hopefully, that you'll get some insights out of here that will be helpful going forward. So -- so with that, David just walked through the strategy. And now what I'm going to try to do is walk you through how that strategy translates to the financials. I'm going to share with you some accomplishments that we've had in the last 5 years. And I really want to do that just because I think that's what gives us the confidence that we can deliver the results going forward. And then lastly, we're going to walk you through how we plan on growing faster than the markets, how we plan on expanding our margins, driving significant free cash flow and that's really going to allow us to fuel our innovation going forward, which will drive a lot of shareholder value. So here's our financial framework. It's basically 4 pillars. And if you look at the first one, it's -- we play in resilient markets that are growing nicely. The unmet eye care needs out there, an aging population, the favorable macro trends that -- that David alluded to, those all underpin the growing markets. And given our commitment to innovation, we would expect to grow faster than those markets. From a geographic perspective, we operate in over 140 countries around the world, and we'll continue to serve patients with our broad portfolio of products. And then we are hyper focused on streamlining our end-to-end processes, and that's going to help drive some efficiencies that will help us expand our margins and drive operating leverage, while we improve our R&D spend. So if we grow faster than the markets, we expand those margins, we generate that significant free cash flow, that gives us a lot of flexibility, along with our balance sheet that's very strong right now to execute our capital allocation priorities. So here's a little bit about the results. So if you look at revenue, we've grown revenue roughly $2.5 billion since 2019. And we've done that through innovation, and we've done that through strong commercial execution. So if you look at contact lenses, as an example, we launched new products. We took price where it was appropriate. We gained share. So think about PRECISION1, T30, DT1, all those products performed very well over this time frame. And when you look at ocular health or Artificial Tears, our Systane product continues to resonate with customers. I mean that's been growing double-digit for a couple of years now. So that's a very strong piece of the business. And then when you look at the implantable segment, we have built and maintained significant share in AT-IOLs markets globally, and that's really through the launch of PanOptix and Vivity. So we have a lot of momentum. We had a lot of momentum that drove that revenue growth. And then from a profitability perspective, we delivered $2 billion of operating income last year, which was up roughly $700 million versus 2019, and we were able to do that by expanding our margins. So our margins were up roughly 340 basis points, again, driven by that cost discipline and some of those efficiencies that I talked about earlier. And then lastly, we generated $1.6 billion of free cash flow. So now that separation is behind us, and now that transformation is behind us, we're really getting into a more normalized free cash flow generation, which, again, gives us a lot of flexibility going forward. So here's kind of an interesting page. I think it's always important to reflect on what you committed to, what your goals were and how you actually did. So what I did here is I took our goals from the 2021 Capital Markets Day. And the reason I picked 2021 because the last year of that plan was 2025. So I figured since we're here now, we should just take a quick look. It might be insightful to see how the team is doing. So in 2021, we said that we would be at $10 billion of revenue in 2025. We said that operating margin rates would be approaching the mid-20s. I spent a lot of time defining what approaching meant, I won't do that again. And then we said we'd generate $1.8 billion to $2 billion of free cash flow. So those are the goals that we laid out in 2021. If you look at the middle column, that's what we guided in February of this year. And then if you look at the far right, that is the 2025 guide, and we've adjusted it for 2 things. We've adjusted it for foreign exchange rates, so we applied the 2021 foreign exchange rates to 2025, so you have an apples-to-apples comparison. And then we excluded any M&A impact that we had done that wasn't contemplated in the 2021 plan. So when you get through all of that, we are very pleased with how the team has progressed, we've delivered on our financial commitments from our perspective and we feel that the fundamentals of the business continue to be very strong. So before we get to the long-term goals, here are the assumptions that we made. So again, top line, we believe that markets will grow at historical levels. It'll be a little bit different depending on what segment you look at, it will be a little bit different depending on what part of the world you're talking about. But on average, market should grow at historical levels. And given our commitment to innovation, we feel that we can grow faster than the markets. From an R&D perspective, you'll notice we made a little bit of change. Historically, we've said we want R&D to be roughly 7% to 9% of revenue. We've increased that to 8% to 10% of revenue. We have a lot of good ideas that we want to continue to invest in. We would expect to continue to get operating leverage. From a tax rate perspective, tax rate should remain at 20% roughly. We're not expecting -- we haven't anticipated any structural changes. And then from a CapEx perspective, now that we're through the heavy investment that we had in the last few years on those DSM flex lines, we'd expect that to normalize to meet sort of normal demand, and that should be at 4% to 6%. And -- and then from a foreign exchange rate -- from a foreign exchange perspective, we assume that rates remain consistent throughout the course of the plan. So those are the core assumptions. And then from an M&A perspective, we have not included any M&A in the long-term goals. So one thing I will note is on the Aurion transaction, we have included that in our long-term goals. And I would expect that to be, in the near-term, cause some earnings pressure because we're going to continue to invest in R&D as we develop that product, and the revenue doesn't really come into the latter part of the plan, I think '28, '29, so that will cause some near-term pressure, and that is incorporated and the goals I'm ready to share. Okay? So those are the assumptions. So here's the money page. Revenue. We expect revenue to grow 6% to 8%. Again, we expect to grow faster than the market given the innovation, and we would expect some share gains across parts of the portfolio. Now assuming that we grow at 6% to 8%, and assuming that we continue to optimize our cost envelope, we expect to deliver core EPS growth of 12% to 15% -- now so for those of you who were at the Capital Markets Day, 2 years ago, you'll notice we don't have margin rate on here. We are still very committed to a margin rate in the mid-20s in the long-term plan. But we feel, given the maturity of the business, given our performance that EPS growth is a more relevant metric. And it also more closely aligns the long-term management incentive plans that we have in place. From a free cash flow perspective, we're going to change that a little bit. We're going to change it from an absolute dollar goal to a cash conversion metric. Again, we feel that it's more relevant. And we'd expect to have a free -- cash conversion goal of roughly 90%, which would put us in the top quartile when you look at companies in our particular space. So those are the long-term goals that we have laid out. So let's talk a little bit about revenue. I'm not going to spend a lot of time on this because Sean, Max, Jonathan and Jeannette are going to walk you through the innovation that we're very excited about. But at the highest level, I'd say 2 things. I'd say there's 2 pieces to the growth. The first piece is market growth. So we should get 4 to 6 points of growth if those markets grow at historical rates. And then we should get another couple of points for the innovation. So that's how I would sort of think about it. And on the right-hand side, you can see some of the innovation that we're very excited about. And again, the team is going to walk you through that. But again, I think the key takeaway here is we have a broad portfolio of products. We operate in over 140 countries and that we feel like we can grow -- because of that, we can grow faster than the market. So from a profitability perspective, as I said, we'd expect to continue to expand margins. As you can see here, we've taken out 5 points of productivity on SG&A. And we've basically done that through a lot of the infrastructure building, the IT investments that we've had over the last few years. As you think about this going forward, we'd expect to continue to get some expansion, and it's really driven by 2 things. First of all, when you look at our shared services, we have world-class shared services capabilities now. We have over 2,500 people in places like Bangalore, Mexico City, Kuala Lumpur, Warsaw. We'd expect to continue to leverage those capabilities and help drive efficiencies. And then as I said earlier, we are really focused on continuous improvement and streamlining our processes, particularly create to make and quote to cash. And if we do those 2 things, we will continue to drive some of these efficiencies while we continue to invest in R&D. So think about it as operating leverage, it's not an either/or. We're going to continue to expand margins and increase our spend in R&D. So here's our capital allocation philosophy or framework. Again, it's 3 pillars to it. It's been very consistent since the spin. Our first priority is organic investment, where we do that well, it's good for patients. It's good for doctors, it's good for shareholders. And quite frankly, it's good for employees. So think about PanOptix, Vivity, P1, all those types of products. That's going to continue to be our #1 priority. Now we realized that we can't develop everything. So we will be -- continue to be active and disciplined in M&A. So I think the lens AR is a perfect example, bolt-on deals, $50 million to $500 million, those tend to work well for us. we're going to continue to do that. And then the third pillar is around returning cash to shareholders. As you all know, we currently have a dividend that's 10% of prior year core net income. We recently announced a share buyback up to $750 million over 3 years. That's really intended just to offset employee dilution. So that's the capital allocation framework we're going to operate within. And we make those decisions and those trade-offs all while maintaining that investment-grade credit rating. So I'm going to end where I started. This is the framework that we're operating with. So the priorities are clear. We feel like we're very well positioned to go execute. But the 4 things are really around, we play in resilient markets that are growing. Again, those macro trends support that growth. We're committed to innovation. We have 1,900 R&D folks around the world. We've invested over $5 billion over the last 5 years in R&D. We're going to continue to invest. So given that commitment to innovation, we would expect to grow faster than the markets. We're going to be disciplined around the costs. We're going to drive further efficiencies. There's still more work to do. We've just built a scale now where we can really leverage that. And when we do that, that's going to drive further operating leverage. And then lastly, if we grow revenue, if we improve the operating leverage, that drops down a lot of free cash flow. I mean that's just the math. That's how it works. So if you believe in these 4 things, you should buy our stock, because we believe that these 4 things will drive a lot of long-term sustainable shareholder value. So I appreciate the time. With that, I'm going to ask David to come on up, and then Dan is going to moderate a Q&A session.

All right, everybody. Thanks, gentlemen, for the presentation. Just a couple of housekeeping before we do the Q&A. When you ask a question for those who are listening online, please remember to state your name and the firm you're with so people can know who's asking the question. Also, the intent of today is to really talk about the long-term. So to try to keep that in mind as you ask your question. We don't really want to talk about the quarter or even the year, it's really about the long-term. So with that, we'll open it up to Q&A.

Chris Pasquale, Nephron Research. The 6% to 8% long-term revenue growth goal in line with what you guys are talking about for 2025 despite the fact that this year is a bit of a transition year, you've got a bunch of new products coming. Those are going to have a bigger impact as we get into '26. So, do you see the potential for 8% plus growth in sort of the intermediate term as you get the benefit of all these new products? Or should we think about that 6% to 8% being a steady state?

Well, I would think about it as the average over that stretch of time. I think there's going to be some years where we've got more than others. And again, this year, we'll be a little bit on blend, a little bit lower on that end. And obviously, the -- it depends on how the back half goes. But as you go forward, '26 should be a very strong year and then we'll see how that takes shape. But you can imagine, it just really is dependent upon what's coming out and when it matures.

Anthony, Mizuho. Thanks for having us here at the campus and barbecue was great last night as Dave mentioned. One on margin and EPS. I know, Tim, you're staying away from issuing margin guidance, 12% to 15% compound annual growth is [ $537 million to $613 million ] in earnings, the Street's at [ $505 million ], tax rate 20%. Is there any input that you can give for share buyback and other income? If not, and we assume roughly steady state to street models, it's flushing out 26.5% to 27.5% margin, which is a tremendous amount of margin expansion over this time. So -- anything you can give just middle of the income statement, other inputs into the 12% to 15% compound annual growth.

There was a lot in that question. I appreciate it. Thank you for that. No, listen, I think the 12% to 15% core EPS growth we feel very comfortable with. And as I said in the prepared remarks, we feel that's appropriate given where we are. . I would expect -- we're not backing off the margin commitment. We're still committed to mid-20s. I think what would hold -- I mean, 26.7% or the math that you just did, I'm not sure how the math works, but I think we'll stay consistent with what we've talked about historically is, hey, look, when we get to 24% or 25% or whatever that number is, at that point in time, we'll evaluate what type of innovation programs we have that we want to invest in, and then we'll decide what we want to do. Do we want to further invest and hold that margin rate? Or do we want to drop it to the bottom line. Our view has always been that revenue growth drives the valuation of the company. So I would much -- I'd be much more interested in an incremental point of revenue growth on a sustainable basis versus an incremental point of margin, taking it from 25% to 26%. So -- there's still more work to do, but that's how I think about it.

And I think you can read Anthony, that, that 8% to 10% is a bit of a movement that we've made to try and accommodate for that idea.

Great. David Saxon from Needham. So just a couple of market-related questions. So it looks like growth expectations for consumables, equipment and ocular health are about 1 point above what you laid out 2 years ago. I think you kind of touched on the consumables and equipment dynamics. But for ocular health, like what's driving that acceleration in growth. And then the second question is just on implantables, growth assumption is stable. What are you guys assuming for AT-IOL penetration over the LRP?

Yes. On the ocular health, what you're seeing in there, to a certain degree, is optimism around the OTC businesses and the Rx businesses in which we participate. So Again, I think in the dry eye space, in particular, there's going to be some more activity, a lot more promotion, and I think you'll see that market pick up just a little bit. So that said, I think the implantables business is -- penetration is largely going to continue along what we think has been a historical rate of about 50 basis points a year. If you regress the kind of long-term on that, that's kind of what it looks like. That may turn out to be more international in the U.S., but there's still a ton of headroom even in the U.S., and I think Sean will talk to this in a little bit, but we still think that we survey this most every year that consumers are willing to pay for advanced technology lenses. It is a matter of kind of continuous steadily kind of gaining over time. So I would think about that as kind of 50 basis points a year globally.

David, we've got a bunch online. I wanted to lob one in. First, in which of your businesses do you see the greatest opportunity for above-market growth? And then kind of part 2 of that question is you talked about new technologies in areas with unsolved problems as a growth driver. Could you share some of the clinical areas of unmet need where you're most excited about that opportunity?

Well, today, I'm most excited about the Aurion thing because we followed it for a while. We're excited and these are blind patients who are going to get better. And that's a really powerful idea. It also has a really nice profile, both in terms of the cost per procedure and the savings we can create I think, for the system. So I think there's a lot to be done in that area. And again, we'll talk about it in a little bit, but it's an exciting product. And I think I'm also excited about it because I think it's kind of the front edge of biopharma, which is an area that we'd like to participate in. I think the first bit of that, Dan, was?

Sorry, the first bit was -- which of your businesses do you see the greatest opportunity for above-market?

It's really equipment. And I think you'll note that because typically, we call the equipment market roughly in that kind of 3%-ish it should grow kind of roughly around what procedural growth is globally. And so it's growing a little faster than that because, frankly, we're entering a lot of equipment over the next -- you'll see that in a little bit here. we're entering a lot of equipment over the next 5 years. That equipment will be premium. It will help drive a premium consumable. And if you think about our surgical business in truth, 2/3 of our surgical business is basically consumables attached to our equipment. So between the equipment and consumables, that's where the surgical business really makes most of its money. So I think that's really the most exciting part of that one. And then the other segments are doing really well, but that's -- it's kind of a one-by-one idea.

Tom Stephan with Stifel. Tim, maybe 2 for you. The 6% to 8% LRP for sales growth seems innovation maybe about 200 bps on top of the 4% to 6% market. Can you dig into that a bit? I mean how much of that is Unity? And then what else is at the top of that list in terms of key drivers? And then a follow-up just on M&A. You talked about $50 million to $500 million being kind of that sweet spot. Is there appetite for anything above that, maybe in the $1 billion-plus range?

Yes, I'll handle the first one. You might want to do the M&A one. I would say it's a combination of all the launches, which may sound a little soft. But again, we're obviously very excited about Unity. That's going to drive a lot of growth going forward. We're excited about 512, that we think has a lot of opportunity that's coming in kind of the mid- to late part of the plan. We've got some PanOptix Pro is coming out this year. So it's really going to be driven by the innovation that we've invested in. But I'd say overall, thinking about it as a couple of hundred bps is probably about right.

And that's a pretty diversified group of products by design. There isn't a single -- one of the good things is it really isn't a single product that's driving everything. It's -- we've got in every category, we were talking about this earlier, almost every one of our sales forces this year has got something new to sell. And so that's a really nice diversity of opportunity if one goes really well and one doesn't go as well, we've got some flexibility there. Market wise, where -- our geographic dispersion is really good for us. So we're getting good market growth in certain parts of the world that's better than that. So it is really kind of a nice even distribution of stuff over time. And on the what was the other one?

$50 million to $500 million.

Yes. On the acquisition side, we have the capability of doing a lot. I mean the balance sheet is in a great place. And so we could do something considerably larger. It's just not typical there aren't that many assets that look like that in our space. So typically, we're much more interested in the technology side of this. We've made a lot of small bets into a lot of start-up in small companies to watch and see what happens. And then as those mature, we see kind of opportunities along the way, very much like what happened with Aurion. We like to kind of find our way into those. And typically, that's been in that $50 million to $500 million but not to say we couldn't do it or wouldn't do it just simply that it's not a very common target.

Got a couple online. One was on gross margin development over the midterm? What should we plan for that? And then another one, just about kind of softening economy weakening consumer confidence. What are you guys seeing? Or what are your customers telling you? .

Yes. I think on the gross margin, that is going to be a piece of the overall margin expansion. I don't think it's going to be too dissimilar to what we've talked about in the past. I think if you look at that expansion, I'd say 70% to 80% of that is going to be operating leverage as we continue to leverage the capabilities I spoke about earlier. And then we will get some gross margin improvement as we mix up in some areas as we continue to get efficiencies, particularly in Vision Care with the DSM Flex lines. But I think about it as maybe 20% to 30% of the overall margin rate expansion. .

Yes. And then -- Look, I mean, the second -- third and fourth quarter of last year were a little bit softer, and we kind of -- we don't see much difference in the first quarter. I think directionally, we would expect that over the long haul, the markets normalize. But again, you're going to see some ups and downs as we go through this. And -- but if you kind of look over the long haul on this, it just continues to come back to the same mid-single-digit numbers. So whether the consumer is weak or strong is more of a -- the only part of our business that really reacts to that, I would say, is refractive surgery. Most of the rest of it is relatively -- normalizes relatively quickly, but clearly, there's been a softening of the market in the back half of last year.

Larry Biegelsen, Wells Fargo. Just for Tim, on the LRP goals. Just I didn't see a time frame there, confirm that it excludes M&A? And any color on dilution from Aurion, please?

Yes. I think I would say, look at it as a 5-year horizon as we've done in the past. So that's kind of the time frame I take it out too, so call it 2029. As far as Aurion, we'll give you some more color. We're still working through some things, and we'll give more color on the earnings call. But again, it's going to be heavy on the R&D upfront and that revenue doesn't really start kicking in until '28, ''29. But we'll give you some more details on the earnings call in a couple of weeks.

M&A is excluded?

Yes, it is excluded from there.

Issie Kirby from Redburn Atlantic. I wanted to ask about 2 areas of quite a lot of uncertainty and volatility right now, one being tariffs and supply chain and how you're really considering that in particularly your margin forecasts. And then the second point really around Medicare and Medicaid exposure and any risks you really see around budget considerations there?

Well, on the second one, I think we anticipate generally some reduction in physician fee and facility fees have generally been pretty stable. I think facility fees actually went up last year in cataract. But physician fees have consistently come down a little bit year-on-year. So I would -- I think that's generally a trend that we would attribute inside the plan. So I don't think there's any real change in that. The Medicare pharmaceutical business, obviously, in the Medicare carriers is a big part of our business in the dry eye business. So we'll be very interested in working with those payers. That does take a little while. So when you think about 512, for example, you'll need to think about that revenue, about half of the dry market is seniors, most of which are in some form of Medicaid -- sorry, Medicare. And again, that will probably be a submission that we make later this year, but it doesn't really kick in until '27. So again, part of that market will be developing over some stretch of time. On the tariff piece, we're fortunate in that we generally make product inside of the regions that we operate. So we make U.S. product generally for the U.S. We make European product in Europe for Europe, Asia, a little bit more mixed, but we do make a lot of product out of Singapore for Asia. So we have ability to move product in certain locations, finished goods that way. There are elements of our U.S. business that are made in Mexico. So we will -- we have an exposure to assembly across the border. So we'll see what happens there. But again, something that we can manage and also move if we need to. And then I think directionally, we are very interested in what the supplier -- the subsuppliers are because it's really probably the bigger issue is chips and electronics and resin and things that we -- our input costs which may get tariffs. So we're staying very close to it. We're also very interested in what the med tech industry is doing right now around trying to exempt med tech products from the tariffs, whether that survives or not or whether that works or not, it's hard to tell. But this is a very fluid situation. So we're staying close to it.

Brett Fishbin from KeyBanc Capital Markets. Just one question on the contact lens market assumption of 5%, it seems like you guys and really the rest of the industry have been doing quite a bit better over the past couple of years. You guys double-digit growth, looking back 4 years maybe just unpack some of the assumptions that you're. Making around the market and what might be changing over the next years?

Well, we really don't see much changing. The market has typically been kind of a 1/3 price, 1/3 volume and 1/3 mix. So I think that's still how we see it. The move from reusables to dailies adds mix value. There's always some price every year. And then of course, we're always trying to move new patients in. But I think the idea on the contact lens market for us has been innovation has driven share gain, and it's been a very positive mix because we've entered spaces that have high margin for us. So if you look at where we're under-indexed, and Max will cover this in a little bit, we were under-indexed in toric. We under-indexed in multifocal, we were under-indexed in reusables. We believe that when we launch products there that have real value for consumers that we can raise that share to what would be kind of our fair share, if you will. So in dailies, we're 30-something share. And we -- I think in the other markets, we're probably in the 20s. So -- we made a big move, for example, in toric's, which you'll see in a little bit, which I think is really a function of a great lens that has a unique design, but then us spending time on it. So for us to overachieve or to beat the market growth, it really is dependent on us continuing to put out products that patients want and that docs like. P7 is a really exciting product, and we're getting a lot of good feedback on it right now. And it's a $1.4 billion market that's been untouched really for a long time. So interesting to -- again, we continue to build on that. We'll talk more about it.

So we're kind of running towards the end. I think we got time for one more question. And we'll have another Q&A after this, so you guys will have an opportunity to ask additional questions.

Okay. Great. Steve Lichtman, Oppenheimer Tim, again, given the focus on EPS growth rather than just op margin, I wanted to follow up below the op line on a couple of things. First, given the strong cash conversion, might we see share repurchase tick up even more in the LRP? And then second, I saw the 20% tax rate assumption, but any potential drivers to bring that down as upside potential?

I would say as far as future share repurchases, again, we evaluate that every year with our Board as when we go through our strategic plan. I would say for right now, I would just stick with the $750 million share repurchase that we have in place. We're very committed to executing that. And then when we get past that and complete that, then we'll evaluate what we need to do. And again, that's going to be a combination of what opportunities out there, what organic investments do we want to make and that type of stuff. As far as the tax rate, there are some opportunities that we're looking at. We look at your traditional intercompany financing and things of that nature. I wouldn't expect that to move that much at this stage given the structure. I mean we're not going to have any significant structural changes I wouldn't anticipate that would drive that one way or the other. So I would just stick with the 20% for now.

All right. That concludes the first Q&A session. We'll move on to our break. Thank you. [Presentation]

Please welcome General Manager, Surgical, Sean Clark.

All right. I really love that video. David shared the video on the Children's Vision program earlier. And that's just another great example of how at Alcon, we're really committed to helping everybody around the world see brilliantly and making sure that people that really need care, get the access that they deserve to have. So welcome back from the break. My name is Sean Clark. I lead the surgical franchise here at Alcon. I've been with the company since 2008. I've had the opportunity over that time frame to work on the Vision Care business, work on the Surgical business. Spend a lot of time in the U.S., had an opportunity to work in Japan. And I'm really excited to spend the next 4 hours with you unpacking the Surgical business. No, just kidding. We're going to do in about 20, 25 minutes. We have a lot of ground to cover, though, a lot of really interesting material for you. It was great to get to spend some time with a lot of you last night. I've listened in on a lot of conference calls over my time with Alcon. It was really great to start putting faces with what up till now to me has just been names and voices. So that was really a fun evening. Last time I worked on the Surgical business, we were in the midst of launching CENTURION and we had other things that were coming out. We had other launches. The pipeline was good and the response that we were getting from our surgeon customers was really positive. And coming back to the business, one of the big questions on my mind was sort of, well, I know we have a lot of things in the pipeline, but how are people going to respond to this? And are we going to be able to go beyond what we had done in the past? The products that we have out there now, the legacy portfolio is really great. Are we going to be able to top that? And I've spent the last year talking with our customers sitting in on wet labs, listening in on ad boards, and one of the things I've been really delighted by is the response that we've gotten to what we have coming in our pipeline and the products that we're going to share with you here this morning. So I hope that at the end of this conversation, my desire is that you walk away as confident as I am that Alcon has the most comprehensive pipeline coming, and that these are the things, as David mentioned, that are going to help us keep growing faster than our competition and faster than the markets where we compete. So today, I'm going to go through -- and we're going to level set a little bit just on the market again, just to recap that. And then I'm going to go through sort of by therapeutic area, and we're going to talk about what's new in the short to medium term on the Surgical business and some of the things that you should expect to see us launch over the next couple of years. So let's go ahead and jump in. Again, to recap, David shared the macro slide for all of Alcon. If you just look specifically at Surgical in the markets that we define where we play, it's about a $13 billion market and if you look at the chart on the left, what you see is we have the strong leadership position in these markets. We're over 3x the size of our next closest competitor in these areas, which is Zeiss. If you look at the right-hand side, we talked about this a little bit before. We report our business in implantables, consumables and equipment. And when you look at each three of those sectors, we feel really good about the mid-single-digit growth rates that we should expect to see there over the next 5-year time horizon. They're all relatively right in that same range. So we've got good tailwinds on the business in each of these areas that we can tap into. Now when you think about our portfolio, again, the way that we report the business is implantables, consumables and equipment. I want to make a couple of really two real critical points on this slide. The first is we've had a lot of success in implantables. We're going to continue to invest there. We're going to continue to grow there, and we're going to continue to innovate there. But when you think about the $5.5 billion of revenue that we did on the Surgical business last year, 70% of it is tied up in consumables and equipment. It's really the bigger portion of the business. The other point I want to make here is that consumables don't happen without the equipment. They almost go together. They're like a peanut butter and jelly sandwich, to a certain degree. When we sell the equipment into the OR, many times the consumables that flow behind that, the majority of the time are bespoke to that equipment, and it creates an annuity stream for us over a long period of time. So we want to spend some time this morning talking about our next generation of launches on the equipment side. These are going to come under the brand name Unity. So you're going to see a lot of Unity launches over the next several years. Obviously, I think many of you know about Unity VCS and CS. Hopefully, you had a chance to engage with our team and kind of look at the equipment last night. We're going to spend some time talking about that. I want to actually spend a few minutes also going into a little bit more depth on the consumable side and what that looks like. And then we're going to spend a few minutes talking about the connected ecosystem and what you should expect to see beyond just the Unity VCS, CS launch. So when we think about Unity VCS, CS, right, this is our new generation Vitreoretinal Cataract System/Cataract System. So VCS is a dual-purpose system. It will do vitreoretinal surgery and cataract surgery. CS is a cataract stand-alone for the markets where that's an important attribute to have. These things replace our legacy portfolio of CONSTELLATION and CENTURION. CONSTELLATION is about 16 years old at this point, CENTURION is, I think, 12 years old at this point. So we've got a really big installed base out there. We have leadership positions on the installed base on both of these pieces of equipment, about 30,000 of these out there that we can tap into and upgrade over time. And if you think about the typical launch cycle of a new platform like this, it's about 10 years. So if you did the math, it's about 3,000 a year. Obviously, there's probably with any diffusion of innovation curve, you're going to start to see people kind of adopt faster and then you'll get to the long tail near the end of it. We have an installed base and then, in many cases, have many customers that have equipment that's 7 or 8 years old at this point, and they're sort of ripe for that upgrade. So it's a really good place to be. While we still have the opportunity to grow market share, again, with the leadership that we've got in this area, it's really more about upgrading the installed base that we have already. Now you heard David talk about this, I think we talked about this at JPMorgan as well. The main value proposition for Unity VCS, CS is efficiency. So being able to do a phaco procedure faster, being able to get the OR set up and tear down faster, being able to, on a vitreoretinal surgery, cut at a faster speed if you're doing a core vitrectomy and get into and out of the eye more quickly. These are some of the key attributes that this new system brings to the table. And this is really important for our customers. In a few minutes here, I'll show you why that's important to them and the benefits that accrue to them. Now it's one thing to talk about speed, it's another thing to kind of show you a demonstration of speed. And so I'm going to roll this video here in a second. And what you're going to see on the left-hand side is our new 4D Phaco handpiece and Phaco tip attacking a cataract and what you're going to see on the other side of the screen is our existing CENTURION platform with Torsional Phaco. And right now, CENTURION is really best-in-class. If you went and talked to an average surgeon, they would tell you that this is a really great product. You're going to see in this video exactly how much faster and more efficient our new system is going to be. So let's go ahead and roll that video. [Presentation]

So you can see exactly how much faster that is. And that's just one element of a total procedure when it comes down to it. We've had really great feedback from KOLs that we've been able to test this product with. In fact, one of the customers that we were with last year, he really described it as CENTURION was a great sports car. It was a really fast sports car, but it was like a gas engine sports car, right? It was sort of visceral in nature. You had the revving of the engine and you went through the gears and everything, whereas 4D Phaco from Unity is really more like a high-performing electric car, where you just step on the accelerator and that thing just takes off. That's just one example that they've been able to share with us. But I think broadly, as we've been doing user experience testing on this product, the feedback that we've gotten has been resoundingly positive. And I think there's a lot of excitement and enthusiasm for this launch in the marketplace. So if that's really the console and the equipment itself, again, I want to touch on the consumable side, because consumables are required in every single cataract procedure. So the 5 million cataracts that are done in the U.S., the 30-plus million cataracts that are done globally, you have to have a consumable element with every one of these. And once you set the equipment in the OR and get it there, it's a little bit of an anchor for us, right? And the consumables flow-through behind it. And in most of the cases, these consumables are bespoke to the equipment. There are some things that can be switched out, but a lot of it is actually bespoke to the equipment that's actually been sold. And so what you see here on the left-hand side of the page is our new suite of cataract consumables that will come with the Unity launch and be used on every procedure. On the right-hand side, you see the same thing for our vitrectomy procedures. The instrumentation on the right-hand side, you can also look at, right? These are going from 25-gauge instrumentation is sort of the standard today to a thinner 27-gauge instrument, doctors like that because it's less invasive in the eye. We're moving to things like a 30,000 cut per minute speed on a vitrectomy, which is 1.5x faster than we are today, which allows you to, thinking about the eye, the ability to do that faster with laser today. And so again, the ability for a surgeon to get into and out of the eye faster. So we're getting anything around the patient safety and the outcome [Audio Gap] side of the page, we've done some bench testing internally. We're validating it now with actual time and motion studies. But we've been able to look at what does this mean for an average OR over the course of the year. And so based on the bench testing and the efficiency that we're driving, we think the average OR that's doing vitreoretinal surgery can do 150 incremental cases a year. The average cataract OR can do 200 incremental cases a year. And this is a U.S. example. So when you take that times the reimbursement, the facility reimbursement rate for both of those types of cases, what you can see is on a vitreoretinal side, whether you're in an ASC setting or a hospital setting, that could be $300,000 of incremental reimbursement all the way up to $600,000 in a hospital setting. On the cataract side, it's about $0.25 million per OR incremental in reimbursement. And so the benefits are really there for them if they're able to take advantage of the efficiency that we're bringing to the table. Now what does it mean for Alcon? If you look at the other side of the page, the right-hand side of the page, what you can see is an example of how our existing -- if you look at the left-hand side, it's our existing equipment sales and consumable sales for our legacy platform. The dark gray is the equipment, the light gray are the consumables that flow through with it. And you can see as the sort of light blue group grows over time or plays out over time, that's us growing the installed base of this new platform. And you can see how the dark blue grows behind that. So as we build out that installed base and we have more people using consumables on this new platform over time, that grows to be a significantly bigger portion of our total. And obviously, as you get to the tail end of this, it is a much bigger number than we started with, right? And what's driving that? It's really two things. We've talked about procedure growth and some of the fundamental underpinnings of what drives demand in this market. Yes, cases are going to continue to grow 3%, 4% a year. The flip side of it is that we're actually able to capture a higher value per procedure by bringing some of these new products to the table. So think about the efficiency benefits that we're providing to the practice that gives us the opportunity to come back and actually capture value on the consumable side of it and grow that to be a bigger dollar per procedure over time. So we talked about the equipment piece, we talked about the consumables, we talked about the benefits, but I really want to give you also a view as to what's coming beyond just this first launch with Unity VCS and CS. And so as I mentioned before, we're going to have the whole suite of products launching under the Unity name over the next several years, and I want to spend a few minutes kind of talking about what's coming over the next 2- to 3-year time horizon on that front. So first up is going to be Unity M. Unity M will be our new microscope, provides novel benefits and some new features that aren't resident on our current microscope, greater magnification, tunable light sources, which is really important for visualizing different types of tissue in the eye. The ability to have motorized tilt, which is important for doctors who are doing big surgery, bringing integrated image guidance into the microscope, adding things like digital oculars that will give a better -- a more ergonomically friendly and a better view of what the actual images that's coming through the microscope for the surgeon who's viewing it, bringing our own unique wide-angle viewing system to the table, which again is an important attribute for somebody who's doing retinal surgery. Now that was the OR. Let's switch gears and talk about the clinic for just a second. Unity DX will be our all-in-one diagnostic that we'll be bringing to the clinic. I think we've talked about this in the past. This is a great device that will take the full suite of measurements that you need to do, especially to do an ATIOL case or decide if somebody is a good candidate for a PCIOL, all-in-one setting. So again, if you think about the efficiency benefit here, being able to set somebody in front of one device and capture multiple measurements in one setting versus having to like rotate somebody through different stations in the clinic and have them maybe potentially wait for the machine to open up, this actually provides a lot of efficiency benefits in the clinic setting. Now knitting that all together is something that we call Adi. Now Adi is our new umbrella name for everything that we're doing in the surgical digital health space. So I think many of you are familiar with SMARTCataract, which is what we've launched heretofore. Adi planner will actually sort of be the upgrade to what we've done with SMARTCataract. This will take all the information from the clinic, will put it into a surgical plan, will have all the great formulas that doctors are used to using. Eventually, we'll have our own unique AI-powered Alcon formula, we'll take that plan and import it seamlessly into the OR. So it'll show up on image guidance on the new microscope as an example. Now if you went back 20 years in cataract surgery, what would happen is on the date of surgery, somebody would show up with a stack of charts and papers, and they would have to walk in and they'd have to do the plan that way. Now everything can actually port seamlessly, digitally from the clinic to the planner into the OR. So again, another efficiency benefit. Now there's a second piece to Adi. So SMARTCataract does a lot of the planning today. Adi will take it to the next level, but there's more coming under the Adi name. One of the things I want to talk about is Inventory Manager. So this is a device that we'll be able to use to help the OR or the ASC actually manage the flow of the products that they need to do each of the surgeries. So this is going to help them make sure that they've got the right package of consumables in the right place at the right time, the right IOL in the right place at the right time. So as these things are being consumed out of their inventory, it's triggering automatic replenishment for these things to make sure that they're getting the right product in there. The last thing that we ever want to see is somebody not being able to do surgery because they don't have the right IOL in the right spot or that they don't have the right custom pack in the right spot. Now underpinning all of this is Alcon's best-in-class technical service capability. And I want to spend just a couple of seconds talking about this. I think if you talk to any ophthalmologist out there today, I think without a doubt, they would tell you that Alcon consistently rises to the top on this front. Our ability to make sure that our equipment is functioning at its peak performance all the time is something that's really important to them. And we're going to continue to invest in this area as we go forward. Now what does that mean? Part of that is going to be having the right number of people in the right markets with the right skill sets. But beyond that, we're introducing something called Intelligent Services. This is going to be a way to digitally link the equipment to Alcon itself, we'll be able to understand how the equipment is being used. We'll be able to better predict when equipment is about ready to fail, so we can proactively put our field service engineers into the OR and make sure that the equipment stays up. so that hopefully, we defrayed downtime on all the equipment. Now all of this, when you think about it, is an ecosystem, right? And we've talked a lot about the efficiency benefits. All of these things are designed to improve overall OR efficiency and make sure that people are getting the most out of the investment that they're making in the equipment and the consumables that they're leveraging. Now probably, I guess if you've been keeping up with us this week, and I imagine you all have, you've seen news about the LENSAR acquisition. This is another very exciting thing for us. There's a little bit of a limit on what we can talk about at this point given that the deal hasn't closed, but Alcon has been a leader in the femtosecond space since we bought LenSx years ago. We're really excited about what ALLY brings to the table. It's got some novel benefits. It's a smaller, more flexible platform. It's much easier for somebody to use it actually in the OR setting, so they don't have to have a dedicated laser room if they don't want it. It's a more seamless experience for the patient if the femto treatment is actually happening right in that same room where they're getting their phaco treatment. It does some unique things from an astigmatism management standpoint, and the total procedure time is slightly faster than you'd see with some of the older equipment in this particular space. So more to come on that as the deal gets closer to closing, but it's something that's a very exciting opportunity for us. So let's switch gears and talk about the IOL portfolio. I imagine it's an area of a lot of interest for people still. We're excited about what we have coming over the next couple of years in innovation here as well. If you look here, you'll see PanOptix Pro on the far left side of the page. This is a product that we're going to be launching in May of this year and very excited about that. I'm going to unpack a little bit more about that product here in a minute. But about a year after that, we're expecting to have an upgrade to our monofocal toric platform that's going to bring enhanced intermediate vision. Think of this as something that's going to compete with and go beyond what some of the competitive lenses like Eyhance have done in the space. And then about a year after that, an upgrade to our Vivity platform. So EDOF lenses have done really well in the marketplace. Vivity has been a real hit for Alcon. The benefit of an EDOF lens, if you're not aware, is that you get very minimal visual disturbances. And you get great distance vision, you get great intermediate vision and you get sort of functional near vision. And so we're looking at upgrades in this arena that are actually going to be able to dial up the amount of near vision that you get from an extended depth of focus range lens and be able to provide. Think of this as going from 20/32 vision at near down to 20/25 vision at near. So a real benefit for the people that are looking to have that crisp close vision. So a little bit more about PanOptix Pro, right? The big idea with PanOptix Pro is actually using more of the available light coming into the lens and scattering less of the light that is coming into the lens. And if you went and talked to an average surgeon, they would tell you that the benefit from less scatter or one of the benefits from less scatter is that it should lead to lower visual disturbances, right? The more light that you're actually using effectively across the spectrum of different focal points, the less light is getting wasted, the less light that's going to [Audio Gap] things like visual disturbances. And that's the real win here with PanOptix Pro. We've been able to reduce the amount of light that's being scattered by this lens by 50% over PanOptix. And that's an important comparison because PanOptix is the gold standard in this space, right? PanOptix is the leader in this space. If you look at this chart, this is something we call a point spread function. And what it basically shows you is if you go left to right, it's showing you the intensity and the amount of light being used at different focal points. So on the left-hand side, you get sort of far distance all the way going to kind of close near on the right-hand side. And you can see how PanOptix Pro builds upon PanOptix even and is much better at utilizing light across the entirety of the spectrum. So not only do you get the benefit of less light scatter, but you also get a more seamless transition between distance vision and intermediate vision here. And again, you see how this stacks up to a couple of our key competitors in the space. So we're very excited about the opportunity to launch this lens. And as I mentioned before, this will be coming out in May of this year. Now I think we had some questions before around ATIOL penetration. And I think the interesting thing here is, while if you look at this chart, we've made some really good gains as an industry going back to 2018, really being able to build ATIOL penetration globally. And just as a reminder, each point of ATIOL penetration for Alcon is about a $100 million revenue opportunity to our current shares. So it's a big opportunity for us to continue to push in that arena. The good news here is that even as we ended last year up at about 15.2%, we still have opportunity to continue growing in this arena. When we talk to patients, about 40% of patients say that they're willing to pay for an Advanced Technology IOL, and while you'll never realize 100% of that potential, there's obviously a huge delta still between 15% and 25% that's available for us to capture, and we continue to invest in this area to do that, right? It's not only bringing new IOL technology to the table but everything else that we can do, training the surgeon, providing the best diagnostics, helping them with their surgical plan to elevate their confidence and taking money from a patient and then actually giving them a really good outcome at the end of the day, we're going to continue to invest in this area to continue to drive ATIOL penetration. Then the last thing I want to talk about is white space. I'm going to talk specifically just about one here. I think you're going to hear from Jeannette in a little bit on some other opportunities in the surgical white space. But I want to spend a few minutes talking about surgical glaucoma and over the past several years, if you've kept up with us, you've seen that we've had a really good launch of Hydrus, before that, we had EX-PRESS in the marketplace. Obviously, if you think about the mild to moderate sufferer, we've now increased our ability to provide pharmaceutical therapy in that area. And now we're bringing SLT to the marketplace, DSLT to the marketplace. Now SLT is Selective Laser Trabeculoplasty, it's basically stimulating the trabecular meshwork to actually help improve flow of aqueous humor and SLT is becoming more and more recommended all the time as frontline therapy. In fact, the American Glaucoma Society last year came out and recommended it as sort of first-line therapy in this area. The issue with traditional SLT has been it's an unpleasant thing for the patient and the doctors don't really like doing it. And why is that? Well, you need to use something called the gonio lens to get the right visualization on the eye. You need to set a patient in front of a slit lamp and fire a laser 100 times as you go around the circumference of the trabecular meshwork to actually deliver the therapy. And that's been one of the main issues. DSLT and Voyager DSLT actually takes all of that out of the equation. So you can set a patient in front of this device. Hopefully, you got a chance to see it last night. It has an automatic eye tracking system that actually registers the eye, figures out where the laser needs to aim and then we'll fire that laser in a matter of seconds. And so the patient has a much more user-friendly experience, the doctor, it's much simpler and straightforward for them to actually execute the therapy as well. And why this is a big idea is if you think about, again, just using the U.S. as an example, there's 6.5 million sufferers out there who are using a pharmaceutical drop for glaucoma today. If you look at the usage of SLT today, traditional SLT and now DLT, it's about 600,000 patients. So there's a huge opportunity for us to continue to grow this marketplace, and we're really excited about this product. It taps into an existing reimbursement model. In the U.S., it's about $240 an eye. The nice news here is it's not just a capital component. There's a recurring revenue stream. There's a treatment pack associated with each of the different times that the machine is used. So yes, we sell the capital but there's a recurring revenue stream that comes with every single use of this. And so we think the revenue potential here is -- again, it's a great white space opportunity for Alcon. And in the early response that we've gotten from people who have bought this and incorporated into their practice and into their flow has been overwhelmingly positive. So I hope that over the last few minutes, I've been able to kind of give you the same level of confidence that I have that we have the most comprehensive pipeline and these are the things that are going to help us be able to grow faster than our competition. We talked about everything we have coming in the Unity area, the equipment portfolio that we have coming just over the next 3 years even, I was able to show you a little bit of that. We're going to continue to invest in ATIOLs to maintain our leadership position there. We've got great opportunity in white spaces to capitalize on that, and again, Jeannette will share more about that when she gets to her part of the presentation. We'll continue to invest on the digital front to again increase that overall clinic to OR ecosystem efficiency. And then underlying all of this remains our best-in-class technical service, which is not to be underestimated. In fact, when you look across all of medical device, we typically end up in the top quartile. We've been consistently in the top quartile versus all medical device companies for the last 3-plus years. And so that's a real benefit and a strength of the company as well. So thanks for your time and attention. I'm going to turn it over to my colleague, Max Wolf, now, who's going to kick off the Vision Care section and he's going to share a little bit more about what's coming on the contact lens business. So thanks.

Please welcome General Manager, Contact Lenses, Max Wolf.

Always great to listen to Surgical, but let's talk contact lenses this morning. 24 months ago, many of you were actually here in the room with us or online, and we talked about the contact lens business. And you may recall, I shared with you how Alcon is uniquely placed to grow ahead of the contact lens market. And as you know, our results, we did exactly that. But my guess is, this morning, you're not here with us because of the history, you're here with us because you want to hear about the future of the contact lens sector and what we have in the shed, so to speak. So hopefully, I can answer those questions. I'm going to cover very briefly the market, the main dynamics in the market and the plans that we have, of course, within that market. I started my career here in Alcon about 13 years ago,actually in contact lenses. And thinking back over all the years, a few things stand out for me, but one thing really stands out for me. And that is today, more than ever, in this category, more than ever, innovation, the quality and the quantity of innovation matters. And I'm sharing that with you because it underpins the main point I have for you today. And the main point is this, as Alcon, we continue to be uniquely placed to grow ahead of the contact lens market in the future. So let's jump right into it. Briefly covering the market here on the left, you have heard earlier from David and from Tim. The Vision Care market overall $22 billion. It's a large market, very stable. And as Alcon, we have a strong position in that market. On the other side of this slide, you see the market broken down in its main component. And as you see, you see contact lenses are $11 billion, and we expect that market to grow roughly 5% over the next couple of years, which is great. And then the other half is what we call ocular health, select OTC and pharma products. And later on, Jonathan Balch is going to cover that and go into the details. As for this $11 billion contact lens market, there are a few really important dynamics that I'd like to share this morning. Some of you who have been following us for a while are probably familiar with them, but they are so essential to our strategy, that's important that we talk about it. The first one you see here on this slide on the left. This looks at this $11 billion market, and it cuts it by lens design. And what you notice is that specialty lenses. So multifocal lenses for presbyopia and toric lenses for astigmatism are actually growing double digit. These are premium lenses, therefore, very attractive for us, of course. But what's most exciting about this segment is they are underpenetrated today. So there is ample room for growth in specialty lenses in the future. So that's going to drive our plans. The second, bless you -- the second trend that you see here, you see here in the middle. This looks at the contact lens market by what we call equalized units and equalized units are a great proxy to look at the percentage of contact lens wearers in each segment. In this particular case, daily disposable and reusable lenses. And so you see that there is, over time, a trend from reusable wearers into daily disposable wearers. So much so that today, 1/3 -- more than 1/3 actually of the wearers are already in daily disposable lenses. And that 1/3 of wearers represent almost 2/3 of the value, you see that on the right because daily disposable lenses command a significant premium. What that means is there is ample room for more growth for trading up reusable wearers into daily disposable contact lenses and drive market expansion in terms of value. The other implication is that the reusable market is still very sizable for us, and I'll cover it a little later why we're excited about that. So these were the first two dynamics there. Before I get into market share and how we're doing in the market, there's one more dynamic that is not on this chart, but I thought it would be important for you to be aware of as you think about this category in particular, and that is this. Contact lenses for all manufacturers, in aggregate, market share moves slowly but steadily. And that's because this is mainly a repeat purchase business, where a contact lens wearer is in a contact lens for about 5 years on average. And if the product is great, a little longer and if it's not as good, maybe a little shorter. But at some point, folks switch into the next product. And when they switch, about half of them stay with the same manufacturer and upgrade the product, half of them change manufacturer. So as a result, compared to other consumer health care product categories, market share moves slower but more steadily. And that makes this actually a very stable and very predictable market for us and a very predictable growth opportunity. As per our market share, you see this on the graph here on the left, we have been doing well over the last couple of years. We have added over 200 basis points of share. And we're now sitting at around 26% market share. To put it in perspective, each share point is about worth $110 million to us. So a share point definitely matters. And we're now at 26%, that's the highest market share we've ever had. But what gets me excited about this is there's a lot of room for more market share growth for us, and that's the plan. Now before any of you with eagle eyes ask me about the drop in share in the fourth quarter, I see you squinting, right, there is a pattern we see this every fourth quarter as another manufacturer that shall remain unnamed, likes to put out inventory deals that favor them in the fourth quarter, and then they have to chew on that for the next couple of quarters. But we tend to bounce right back in the first quarter, if you look closely. But what really matters in this category is the long-term trend of the market share. And what has been driving our market share over the last couple of years has been what, innovation, innovation, innovation, innovation. Most recently, TOTAL30 for Astigmatism and TOTAL30 Multifocal. Just a few weeks ago, I was at the conference -- the large U.S. conference with optometrists connecting with many of our customers. And what I learned is that when it comes to innovation, many, many, many of them clearly see Alcon as the leader of the pack, the one player that is bringing the most meaningful innovation to this category. So we have been doing well as a result of this innovation. And as you see here in the upper right, if you look at this over a 2-year period, market grew 13%, Alcon grew 17%. Look over a longer period of time of 4 years here in the lower right, market grew 33%, we grew 45%. So historically, we have been doing very well. But more importantly and probably more relevant for you this morning is we expect to continue to do well. And of course, your question is how? So let's look at that. At the core, it comes down to two levers to continue to grow ahead of the market. The first lever is really to build the most innovative portfolio of high-performance contact lenses and the second one is about winning in specialty lenses. I'm going to double-click on both of these now. As for building the most innovative portfolio of high-performance lenses in the daily segment that you see here in light blue, that is worth $7 billion as a market, we have been doing very well. We have a 29% market share, and each share point is worth about $65 million. We have a best-in-class portfolio. We have Dailies TOTAL1 and we now have PRECISION1, which has been doing particularly well for us. So we're really well placed in this daily segment to continue to do well in the premium segment as well as in the mainstream segment. Then there is this almost $4 billion reusable market here in this chart in dark blue and the light gray. And in that segment, we have a 22% share at the moment. Why is that? Well, historically, we have only participated in this market with a monthly replacement lens. Now this market is interesting. It's still big, a share point is worth $45 million, so attractive. There is room to trade up people within that market. But what is most exciting is the margins on reusable lenses are similar to intraocular lenses, very, very profitable. And furthermore, over the last couple of years, there hasn't been a lot of innovation in this market. It has been underserved. So it does create an opportunity for us to get at least our fair share in a very, very profitable segment. In the subsegment of reusable lenses, the monthly lenses, we have now introduced a complete new family called TOTAL30. This is the first and only reusable lens that has a water gradient surface, a technology that only Alcon can bring to the market. And as you may recall, at the last Capital Markets Day, I shared with you, we were in the midst of launching the toric version for astigmatism. We have completed that launch. And in the meantime, we have added the multifocal product. Our plans here are to complete this family by adding a multifocal toric version sometime next year. Then for this biweekly subsegment, we have been absent till now. But this very quarter, as you all know, this very quarter started the full commercial launch of PRECISION7 Sphere and PRECISION7 Toric in the United States. Very first time, a manufacturer is actually launching Sphere and Toric at the same time, we expect greater velocity from that. Also the very first time for us as a company to introduce a brand-new category, the 1-week lens. And our plan is to complete this family by adding a multifocal version for presbyopia in the future. As for the product, you've probably all heard about it. So let me be brief. What you really need to know here is that even today, surprisingly, even today, more than half of the contact lens wearers entering the category enter in a reusable lens first. And that is despite the fact that almost 9 out of 10 eye care professionals would love to put every single wearer into a daily disposable SiHy lens. Why is that? Well, it comes down to the price and that's exactly where we see PRECISION7 come in. We see PRECISION7 as the very first and best choice for any contact lens wearer that cannot get into a daily disposable SiHy lens. And as a result of that, reusable wearers can now start and end every week fresh, something they couldn't do before. Now they can, thanks to PRECISION7 and thanks to the ACTIV-FLO technology. Of course, you can ask me what is the size of the opportunity? We range it somewhere peak revenue between $250 million, $350 million. And I had some people ask me yesterday what do our customers think about this. So let's hear it directly from our customers. [Presentation]

So as you can tell, our customers are pretty excited about the product. The product is pretty good. And actually beyond the product and beyond PRECISION7, I think this is a poster child example for the type and caliber of innovation that Alcon can bring to the contact lens market, thanks to our unique R&D capabilities. And just thinking about the next big thing that they're working on, quite honestly, gives me the goose bumps every time I think about it. But I get carried away. Let's shift gears. Let's talk about the second lever to continue to grow ahead of the market. And the second lever is really to win in specialty lenses. As I shared at the beginning, specialty lenses represent the fastest-growing segment in contact lenses today, particularly toric lenses. Double-digit growth, premium priced, already more than 25% of the contact lens market today in value, but most importantly, ample room for more penetration because over 40% of the population has some form of astigmatism including 40% of us here in the room. So a very attractive opportunity. We have been doing very well in this segment over the last couple of years. If you look at the chart, we have added over 700 basis points of market share growth in the toric segment, thanks to innovation. We're now sitting at a 22% market share. Each share point is worth about $30 million, but we believe it's more than realistic and reasonable to expect that we reach our fair share in the toric segment, that's the same share that we have in the daily disposable sphere segment, which is roughly 1/3 of the market, somewhere low to mid-30s in market share. So you can do the math. This is a very sizable opportunity for us. We have been doing very well. We have launched PRECISION1 for astigmatism, we have launched TOTAL1 for astigmatism, we have launched TOTAL30 for astigmatism. So we expect to continue to see market share gains just from the products that we have launched. And of course, we expect additional market share gains from the next launches, in particularly PRECISION7 Toric that is launching right now, which, by the way, we believe this is the very best toric we have ever made hands down, and we expect more share gains from TOTAL30 Multifocal Toric that is launching sometime next year, which will be, by the way, the very first time that we introduce a multifocal toric as a manufacturer. So very exciting growth opportunity in specialty lenses, particularly in toric, we have been doing very well, but more opportunity ahead. So in summary, and as I said at the beginning, Alcon continues to be placed uniquely to grow ahead of the contact lens market by building the most innovative portfolio of high-performance contact lenses, including PRECISION7, the first and only 1-week lens and by winning in specialty lenses, particularly the toric segment, as I just shared. So with that, I conclude the contact lens portion of the Vision Care plans, and I'm going to hand it over to Jonathan, who's going to cover Ocular Health. Thank you very much.

Please welcome General Manager of Ocular Health and Pharma, Jonathan Balch.

Max, thank you. That was exceptional, but I think it's time to get on with it. Thank you guys for hanging in there with us. We're really excited to share updates with you across the businesses. I'm Jonathan Balch, I'm the GM of the Global Ocular Health and Pharma business. I had the opportunity to speak with many of you just a couple of years ago at the last Capital Markets Day. And what we said at the time for ocular health and pharma is we wanted to really do two things: one, accelerate innovation in our OTC business and to thoughtfully pursue our reentry into pharma and we've made pretty significant progress in both areas. I spent around 20 years in big pharma, and I can tell you that I'm very pleased with the progress and the pace of the progress that we've made, especially post spin in both of those areas. Also just wanted to acknowledge I'm particularly excited about the news in the press release related to Aurion that went out yesterday, Jeannette will pick up with some color on that news in her section. So let's frame ocular health and pharma quickly. We define, as David pointed out, the ocular health and pharma business as about an $11 billion achievable market, that is effectively the OTC markets in which we play as well as the Dry Eye Rx market and the Glaucoma Rx market. We project that, that market that we've created in total is going to grow at about 4%. But you can see the growth drivers that are included there. Artificial tears continued healthy growth over the period, Dry Eye Rx healthy growth expected over the period and allergy continuing to grow very well. Here's our portfolio on the right-hand side of the slide. We're participating in the artificial tears category, continuing to win behind the Systane brand. We've been very pleased with the performance of Systane. I'll provide a bit of an update there. In allergy, Pataday continues to grow very nicely in the U.S., and we're actually seeing U.S. market expansion, driven by our U.S. Vision Care team. In contact lens care, we're the largest player, OPTI-FREE and CLEAR CARE enjoy #1 share globally around the world. And in pharma, of course, we're just getting started, but we're paying close attention to our in-line glaucoma portfolio as well as our Dry Eye assets and then preparing for the launch of AR-15512. You'll see throughout this presentation, I refer to the name acoltremon. Acoltremon is the generic name for 512. The brand name has not yet been approved, we'll reveal the brand name when we get the feedback from the FDA. So let's take a quick look at the overall top 3 priorities for ocular health and pharma. One, continue to drive sustained growth. I'll show you in just a moment how the artificial tiers markets are evolving and why we're leaning into that space. We want to continue to accelerate our reentry into pharma, but we want to do that in a thoughtful and deliberate way. Many of you, I said a few years ago, have become historians on Alcon. You know who you are. You know a lot about where we've been in the past. It wasn't that long ago the pharmaceutical business was a very large and profitable part of our core business. And then, of course, we're putting a lot of emphasis on preparing for a successful launch of AR-15512. So let's talk about Artificial Tiers first. What we're seeing for Systane, I think Tim said a couple of years of double-digit growth. In 2024, Systane total brand grew 13% overall, that was the fifth year of double-digit growth for Systane. And the multi-dose preservative-free formulations of Systane grew nearly 40%. What you can see in the arrows across the breadth of the slide is effectively that, that growth, especially for multi-dose preservative-free formulations is coming from around markets around the world. In addition, I'll focus your attention to the bottom or the right side of the slide, the pie chart. That is percent contribution by format in the international market. When I shared an update on this at the last Capital Markets Day or even last year, it's progressed, unit dose preservative-free and multi-dose preservative-free in international markets was about 60% contribution in total format contribution for total market. It's now at about 80% in international markets. Compare and contrast that to North America where it's less than 45%, but growing year-over-year. One point of penetration of preservative-free in the North American market is worth roughly $10 million to the market. We're really happy to be participating and we continue to want to drive innovation in multi-dose preservative-free and play a leadership position in competitive -- in North America and a competitive position in international markets. You probably saw the news in February press release related to the launch of our longest lasting Artificial Tear yet, Systane Pro preservative-free. When we talk to Artificial Tear users, what they tell us they want is long-term symptom relief. Systane Pro preservative-free offers 10-plus hours of symptom relief. We'll have a 10-hour claim on the box immediately, and we're pursuing a 12-hour claim. It's the most comprehensive formulation that we have to date with the Nano lipids found in Systane Complete, the predecessor to Systane Pro, as well as hyaluronate, which stabilizes and thickens the tears, likely adding to the duration. When we talk to doctors and the consumers, they're particularly interested in this product and the early feedback in the U.S. launch has been quite positive. I've used it. I like it, I like it better than anything else in our portfolio. You don't have to take my word for it. In your backpack, there's a trial of Systane Pro preservative-free. And on the plane ride back or the car ride or at your hotel, please give it a shot. Let's switch gears just a little bit and talk about the pharmaceutical business and our reentry there. What we've said publicly is that we want to reestablish a meaningful third pillar of the business and that we want to regain leadership in ophtha pharma and we believe that we've got a right to win. There were a number of questions about this at the reception last night. Why do you think you can play? How do you compete against big pharma? At the heart of what we do is we're really specialty focused on eye care. And the ophtha pharma business is highly fragmented. There's a lot of assets that are less than $1 billion. We talked a bit about that earlier today. They're not particularly interesting to big pharma, but they are particularly interesting to us. You could also argue that we're the largest and best capitalized in the specialty arena, and we've got deep ophtha expertise, of course, with rich R&D, manufacturing and commercial capabilities where we're mostly focused on later-stage development in the R&D space. So our progress to date, a bit of a progress update, we built an initial portfolio with Rocklatan and Rhopressa through the Aerie acquisitions, Simbrinza was the first brick in the house that we built. We've got EYSUVIS, and we've made some targeted investments. Those targeted investments that we're making have very specific criteria, most of which we're looking for assets that have largely been derisked and are later stage, ready for late Phase II or Phase III. The Aurion example would be a great example of an investment that we've made that we think fits that criteria. In terms of R&D build, this has been a real highlight. Almost overnight with the Aerie acquisition we regained R&D scale. Again, mostly focused on development rather than early discovery, but we have 100 scientists in Research Triangle Park, North Carolina, dedicated to pharma R&D, and we've been very pleased with the progress they made. In fact, we have an emerging pipeline of products that came largely through the Aerie acquisition, and I'll show you in just a moment where we stand or at least a bit of a snapshot on the pipeline. From a commercial execution standpoint, we have an established glaucoma sales force driving Rocklatan, Rhopressa and Simbrinza, they are dedicated predominantly to focusing on glaucoma. With the launch of 512, we will stand up and are in the process of standing up a dedicated dry eye sales force in order to ensure that we drive the right kind of trial and exposure to the product early on. And then, of course, we're particularly excited about the partnership in China with OcuMension. It was like-minded and has similar capabilities to Alcon. Let's look at the pipeline. So a quick orientation to the slide. On the left-hand side of the slide, the Y-axis, we've got the target therapeutic categories or a short list of the ones where we're conducting projects. And then on the X-axis, you can see stage of pipeline development, a bit of a cartoon, but this gives you a little insight into some of the key projects that are underway. In glaucoma and dry eye, we've got a couple of key life cycle management projects around Rocklatan and acoltremon. It's never too early to start thinking about life cycle management. Of course, in dry eye, 512 is there, the PDUFA date is May 30 of this year, which we're anxiously awaiting feedback from the agency. In redness reliever or whitener, we're pursuing our own whitener asset in the very fast-growing whitener category, which grew nearly 11%. Last year, I had a question about that at the break. And then in retina, combined with our delivery platforms, Jeannette will speak about this in a little bit more detail, but we've got a well-characterized molecule that we paired with our Systane delivery technology that we refer to as PRINT for the indication of wet AMD that we're particularly excited about. Let's double-click on 512 and give you a little bit of an insight into what we're thinking about there. So we're particularly excited about dry eye because we think there's significant unmet needs that remain in the market. When we talk to Dry Eye Rx users, what they tell us they want is speed and efficacy, sounds pretty straightforward. When we look at what's really happening today in the market, we see 90% discontinuation rates on average in less than a year. We see 60% of patients reporting mild to no improvement in their symptoms and only about 13% feel like their dry eyes were being well managed. We believe that acoltremon has an opportunity to step into that void. A little bit of background on acoltremon, and I'm going to show you a video that gives you a bit more detail on the science and the mechanism of action. But acoltremon is a first-in-class novel TRPM8 receptor agonist which rapidly stimulates natural tiers. Effectively, it's doing that by stimulating the body's natural pathway for making natural tiers. A few of the Phase III clinical findings that you can see on the right-hand side, delivers rapid onset as early as day 1 and sustained through day 90. Up to 80% of patients had normal tear volumes on day 1. We saw consistent reduction in symptoms at day 28. we referred to it, I think, on this slide as a month. And then overall, a very favorable safety profile. We've had a few questions about the most common AE, which is burning and stinging. In Rx Dry Eye, a sensation upon installation is quite common in the category. We believe and what we see in the data is most patients, 98% reported that's mild and transient. It's something that doctors are comfortable managing. And if you look at the totality of our data, in 4 studies, a IIb study and 3 pivotal Phase III trials, 766 patients were on active drug, only 5 discontinued due to this AE. So we think that that's manageable and that the efficacy and the speed of the product will overcome any sort of concerns about the AE. Let's roll a video and I'll give you a little bit more insight into the science. [Presentation]

When we share the video with thought leaders and other customers and investigators that have been exposed to the data, what they're particularly excited about is the unique mechanism of action and the ability to directly produce natural tears. And if you think about it at the heart of dry eye is tear deficiency. So we're really excited about this opportunity. I'll show you just a bit of the Phase III pivotal efficacy data. For the sake of time, we could not go through the breadth of the robust data package that we've submitted to the FDA. But on this left-hand side of this slide, you'll see the primary endpoint, which is the Schirmer score. This is percent of responders with greater than 10 millimeters of increase in Schirmer score, which is essentially tear volume. The middle lane, day 14, middle bar is effectively the primary endpoint and you can see statistical significance versus vehicle. What's really compelling about this chart is if you look at the -- the key secondary endpoints, day 1 and day 90, also statistically better than vehicle, which is the gray bar sitting well below the blue bar. On the right-hand side, again, this is the pooled data for symptoms. Day 28 was the predefined or prespecified key secondary endpoint and you can see statistical significance when we look at the breadth of the data. There's also some really compelling data on ocular staining as well as some tertiary and exploratory endpoints, some of which we're pursuing additional data through some Phase IIIb trials that we hope to report out before launch. So we're particularly excited about this and look forward to talking to you more about it. So in summary, start where we -- and where we left -- let's end where we started. We'll drive continued sustained revenue growth through a focus on our MDPF formulations overall and then particularly leaning into Systane Pro Preservative-Free launch. We need to execute a world-class launch of [indiscernible] or as most of you know 5, 12 and accelerate Alcon's reentry into pharmaceuticals. We'll do that thoughtfully but we do see a big opportunity. Thank you very much for your time. Look forward to the Q&A. I think Jeannette is going to take over now.

Please welcome Senior Vice President of Global Franchises, Jeannette Bankes.

Thank you. It's an absolute pleasure, first and foremost, to a lot of the familiar faces in the audience and online. I'll address online as well. This is my third Capital Markets Day. So for those that have chosen to invest in us, be a partner throughout this last 5- or 6-year journey since spin, I'm looking at some of you in the faces, you can look up from your computers as you're reporting, a sincere thank you. For those, as Tim said, that are on the sidelines, I'm going to challenge you a little bit, okay? We've shown you a historical performance. We've set expectations as a company and we delivered on those expectations. I think I would say it would be hard to argue that Alcon doesn't have the most depth and breadth of pipeline, fueling the next generation of ophthalmic needs. So if you're standing on the sideline, I hope that we've sparked a little bit of energy and passion in you to think about partnering with Alcon. For our shareholders that have made the money with us over the last 6 years, congrats, we're happy about that. I've been with Alcon for 6 years. I started in Sean's role as a President of Surgical. Whenever you get to a certain age, you say how many years plus you've had, I've been 30-plus years in health care. I started in the pharmaceutical business at Merck, spent a decade there. I then moved on to Boston Scientific in the good, the bad and the ugly years. I would tell you that, that 15 years of transformation was phenomenal. And I joined Alcon a little bit earlier, I think I'm 2 weeks earlier than Tim. So I'm a little bit older than him. But I joined at the spin and I couldn't be more excited and proud. While you've seen many of us present today, we're representing the 25,000-plus employees that put their heart and soul and passion into this company for our shareholders. But let's say, more importantly, the patients that we may be someday are the patients that we think we serve every day. We have a breadth of folks sitting on this side and this side that represent Alcon. I will turn to them. Well, we love our shareholders, it's the people at the company that make the company. So thank you. I'll give one more shout out to my colleague, Head of R&D. Thank you, Franck Leveiller for one of the richest pipelines in ophthalmology and for the passion of your R&D team because that's what fuels growth. So I have the pleasure, the 3 franchise heads showed you in the short and intermediate term, what does that look like. You may be short term in memory and say, you know what, I only care about the first 3 years, you should care about a continuous breadth and depth of pipeline. We have over 100 active programs in R&D but we're going to try to sprinkle in some of the most exciting that from an opportunity perspective across Surgical and Vision Care that really could make a difference in this company. I'll start out with premium lenses, AT-IOLs. We'll talk about PowerVision and where we stand with that program. We'll then go on to our equipment capability, next-generation lasers. There's multiple disease states that actually can actually be treated with laser and robotic capability. We'll talk about that. We'll then get into the uniqueness in our contact lens business. What are we doing for that presbyopia? If I happen to be that person, a lot of you, I will judge your age, are in that category as well. What are we doing to actually maintain that population of contact lens wearers? And then I'll continue into the Pharma business. First, with how do we expand? Well, we're excited about Systane Pro. How do we continue to never arrive in dry eye and I'll talk about therapies there. And then I'll end with a splash on pharma. So I get the pleasure of showing what the pipeline could look like. We have a very solid foundation but we want to grow that foundation as a company. So let's start with Surgical first. Sean showed you PanOptix Pro. As we think about our long-term IOL portfolio and the ambition we have in front of us, it's really about delivering and moving the actual bar. I would say, I'd ask you to all challenge yourselves and ask among the competitive landscape of IOLs, people are just trying to come close to what we consider best-in-class PanOptix and Vivity. That's a high bar to set. But with the optical engineers and expertise at this company, we're moving the bar. Any good athlete would say, great, you ran the 10-mile run. I'm running the 8-mile minute run. We want to move the bar. And we look at 2 attributes we believe continue to be unmet needs in the marketplace. And that's really visual disturbance profile and full range of vision. How do you continue to take the best-in-class PanOptix and Vivity and move that bar? Sean showed you, as you're investing in the company, in the near term, we're going to have a PanOptix 2.0. We're going to go to a 3.0. Vivity, we're going to bring down that domain as well from a near vision capability because that is a very unique visual disturbance profile being a EDOF lens. But I want utopia. We at Alcon want utopia. And we believe that in order to meet that access on both visual disturbance and full range of vision, it's going to take something as close to a natural lens. And that's our accommodating IOL program. When we look at our accommodating IOL program, it really is the only program that we are aware of. And as David had said, we look at everything or Alcon. It's really the only program that has truly shown objective accommodation while having a tunability, being able to tune to 2 diopters of tunability. What we want to share is a video of the progress we've made on this program to date. So please play the video. [Presentation]

So an update on our IOL program, long-term accommodating lens. #1, we've made significant progress where we stand is, we're enrolling in a clinical trial this past year. We have robust clinical data that we've had produced with this lens. Second is tunability. We showed you the video because not only do we have a robust clinical program we have a capability of tune plus or minus 2 diopter. And I think most importantly is, how are we doing with the safety profile. We've proven safety across multiple clinical trials. The last bullet, as we think about this program and we went through the data analysis in 2024, late '24, the majority of patients had happened exactly what we thought, a phenomenal safety profile with visual outcomes that we predicted. There was a small portion of the population, though, that didn't get the visual outcomes that we expected. And as R&D, both the clinical and technical teams took a look at, why is it that there are a large majority of patients having a brilliant outcome. And we have this small subset that -- we didn't see that. They actually did a root cause analysis. And what we've done is, we actually extended the clinical program. We're enrolling more patients. What we found is, we needed to standardize both the intraoperative and postoperative medical therapy, have a standardization, there was anomaly among the patients. What we're doing is extending that clinical program through 2025. We're currently enrolling with the protocol changes and we'll bring back and say, did we solve what we thought was the hypothesis on why some patients didn't benefit while the majority did. So what we expect is to report that data with you at the end of '25 and continue to progress if we've actually proven out the hypothesis, we think where patients will get the outcomes they deserve on this premium lens. Let's talk about long-term surgical and our equipment capability, in particular, on lasers. Sean showed you the breadth of equipment we're about to unveil or commercialize over the near and intermediate term. When you take a look at our capabilities, not only do we have a breadth and depth of optical engineers that know how to do IOLs, inclusive of our accommodating IOL, we have this breadth and depth when it comes to equipment, in particular, laser capability. When you look across the different disease segments, retina, cataract glaucoma, we know that with laser treatment up to robotics, we actually have unmet needs in the marketplace. We believe we can solve AMD. We believe we can solve floaters in retina. We know that being able to provide a channel in the trabecular meshwork in glaucoma, will relieve IOP. When you look across these multiple programs, both our equipment, software and laser capability and you summarize that, that's about a $3 billion opportunity. I want to show that to you because while in the near term, we're excited about Uni VCS and CS, our next-generation microscope and [indiscernible] behind the next corner is a breadth of laser capability that could equate to a $3 billion opportunity. So let's turn to contact lenses. While I love surgical, I happen to have a bias, I helped run it for a couple of years. I now love all the siblings in the house, is we also have a unique capability in manufacturing and we have some of our manufacturing folks. This is a beautiful competitive advantage compared to anybody in the space that competes with us. We talk about DSM-Flex. But if you really peel back the onion, understand, well, okay, so you can make better capacity, is that really important? Yes, revenue generation. But when it comes to innovation and Max tapped into this, the winner has to innovate and we have to keep ahead of our competition when it comes to innovation. Our ability to change chemistry, materials, the way we do surface on contact lenses is going to put us at a competitive advantage. You like the capacity. We like the double whammy. We like the capacity and we like the innovation cycle. So as you think about innovation, I'm going to introduce a next-generation presbyopia lens. It's a big deal to us. We're able to, in a time-efficient manner, now take an innovative new chemistry out of Franck's team and put it into manufacturing faster to the point where the amount of prototypes, we can fail fast or succeed fast is actually a competitive advantage. And lastly, as an investor in the company, you should care about our capital deployment. This creates the most efficient capital deployment when you can take a modular approach put lenses across one line multiple lenses and speed up innovation. So you should care a lot about this slide and it is a unique position that Alcon has. So let's tap it into why you would invest in us or why you continue to invest in us. #1, whether we like it or not, you will all become presbyopes, great business model for Alcon, okay? However, we lose as many contact wearers as you get older as we have the young generation coming in and coming to us for that contact lens. And the reason being is, it's a limitation. While I stand here in my DT1s, I see halos and glares. I'm giving up my near vision. I happen to be high myope. I told somebody last night, [ 900, 800, minus 9 and minus 8 ], I'm plus 2.5 but yet, I don't want to wear spectacles. I still have to wear readers because I'm trading off something in my vision. I cannot give on my distance vision, yet I know that I can't get my near with the current offerings. So #1, we're not meeting the need of the 40 to 45 years old. #2, it is not easy for the ECP, as the manufacturer is trying to go low, medium, high at, think about the fits for the ECP and the pupil dependency on those contact lenses, it's not easy for them either. And then last, while we love that we put an actual Systane Pro in your bags, we're dry eye recipients. I would love a day where you can give me a more comfortable lens. And at 10:00 at night, when I'm getting ready for you the next day, I don't see a glare over because I have such a dry eye. These all 3 unmet needs really cause us to lose that patient. If we could just extend even 5 to 10 years of a contact lens wearer, that is worth billions of dollars for us in industry. And so the team took that challenge on with the optical engineers. Reminder, I have a surgical background. We do share our engineers, both Franck and I. Those same brilliant optical engineers set out to say, what if. What if we could take some of the optical things we did in things like Vivity and PanOptix and bring that to the next-generation light utilization wear, comfort, the team is doing that. What I draw your attention to is the 2 lines on the slide. The gray one is what I am every day. I'm giving myself distance but I'm taking away my near every day with the options that we have in the market. As we do the fast prototyping I described in manufacturing, the team has actually developed early on technologies and we're really extremely excited about this. We're in feasibility. That blue line is what the next-generation presbyopia lens will allow us. We're also challenging in our product profile. Can you not have so many [ adds ]. Can we make it simpler on the ECP? And lastly, as you've heard Max with all of the capability to make your eye wetter, we're actually doing that as well. So we look forward to this opportunity. I couldn't be more excited for the content -- contact lens group and thank you to manufacturing for the flexibility. So let's talk about dry eye. As you think about the next phase of innovation, Jonathan, I love your giving us 12 hours but that's not enough. From a dosing perspective, we really have an aspirational goal that at the end of the day, if we understand the root cause, when we look at the muncin layer, the foundation of healthy tears, if we can somehow impact the residence time on the mucin with a tear, can we actually go to single doses in a 24 hour? This is what the team is doing. When you look at what we're trying to do is a single dose, have great efficacy in a product and allow a tear film therapy with the mucin interaction to have more residence time. Early prototyping shows us on the right-hand side that we're achieving just that. While we love the products that we have, we believe we have a meaningful innovation in both residence time and dosing for dry eye patients. Last 2 in pharma, exciting. If I haven't gotten the sideliners excited for an investment opportunity, wait now. Hey, wet AMD is a very, very large issue, very profitable as well, if we're frank about the financials around it, is we, on the acquisition of Aerie, we're actually able to pick up what we would consider a delivery mechanism. And so as we think about wet AMD and where David said, our investments are, where are we interested in. The unmet need, if you don't have a relative, family or loved one that has wet AMD, is not easy. My mom has it, I probably am a future patient. I'm already dry AMD. At the end of the day, you have folks doing needles in their eyes every 4 to 6 weeks. #1, that is a huge patient burden. It's a huge health care burden. But you also have to maintain the efficacy and safety profile because at the end of the day, none of us want to lose our sight. So can you imagine if we have a technology called PRINT that is a bioerodable platform that allows you to deliver a drug in a bioerodable manner that allows sustained release over at least on our bench testing 12 months that allows you to go maybe once a year versus every 4 to 6 weeks. So we couldn't be more excited about being able to enter in a meaningful way wet AMD in a truly patient-centric manner, a health care system manner, a delivery mechanism that allows sustained durability. And then my last highlight for pharma, you can notice my passion gets even higher as I get to the end, is Aurion. Aurion is a unique proposition. David explained a little bit. I'll go a little bit deeper. #1, if you step back and say what is standard of care today for patients that have corneal disease, it is a corneal transplant. We happen to benefit. I'm looking at everybody internationally in the United States to have corneal banks. And U.S. has a lot of things that they have favorability. The rest of the world doesn't have a corneal bank in every country. Aurion's significant development and cell expertise has taken cells and did a combination with ROCK's inhibitor. Not only do they take 1 donor to 1 patient, the passage of those cells and the combination of ROCK's inhibitor actually allows us to be 1 patient to 1,000 doses, dramatic global effect. Most importantly, as you look at the early data, there are studies. #1 yielded a Japan approval. They're already approved in Japan for this. They're in Phase II, past Phase II with really good clinical results, entering into Phase III in a breakthrough technology designation with the FDA. So as you can imagine, trying to mitigate the graft shortage, having a great safety profile that will potentially right now say could be safer than standard of care, which is DMEK and DSEK, could open up a breadth of new patients. Right now, physicians around the world preserve those grafts to the most severe patient because the more severe you get, the less sight that you have. So naturally, you're going to give it to the most severe patient. If we can open up this from a 1 to 1,000 dose, even the mild to moderate patients would benefit, this from preserving sight. So we look forward, there'll be in negotiations with the Phase III trial design and ultimately commercialize in strat plan period, later part of it. So we're excited about this technology, both in terms of its capability. But as David showed the video, Raj and team over in Africa, we have a responsibility to restore sight to those that don't even have an opportunity to get it currently. So as I go into conclusion, I would tell you that we have one of the richest pipelines in industry. As an ophthalmic leader, we take it very seriously around our responsibilities to be able to bring the next generation of technologies for unmet needs. When you take a look at implantables. It is not easy to beat a PanOptix or a Vivity. We're best in class and yet we're moving the bar. On the accommodating IOL lens, we've had significant progress. We showed you on that video, not just the technology but the burden we placed on ourselves to actually prove it clinically and then to regulatory agencies to show true objective accommodation. So we're looking forward to progressing that program. From an equipment standpoint, the here and now is going to be beautiful. When you look at our installed base, we're going to refresh ourselves. But again, from a laser capability and a robotic capability, we're invested internally and externally. And then on Vision Care, I would tell you that while we're excited about PRECISION7, my age, I'd really like to see contact lens wearers go longer and us create the next-generation presbyopia lens. And then to end, we promised to increase our pharma portfolio. We're doing just that, both with what's internal 512 but the acquisition and investments and things we picked up with Aurion PRINT as well as Aurion is just beautiful for you as investors and us meeting the patient needs around the world. So thank you and we look forward to the questions.

Ladies and gentlemen, please stand by as we prepare the stage for the Q&A session.

Do you just permanently have your hand up?

All right, guys. What you think? Everybody, you like the show? Thank you. So just a couple of housekeeping items before we kick off. [Operator Instructions] Lastly, I wanted to remind you that the first bus to take people to the airport leaves at 12:30 and then there's another one at 1:30. So and we'll have lunch immediately after this. So with that, we'll go ahead and kick it off to the Q&A. Larry, why don't you...

Larry Biegelsen, Wells Fargo. One question for Jonathan, one question for Sean, sorry, Max.

I'm glad.

So starting with Jonathan on [ AR-512 ] just help us -- everyone's going to look at kind of -- I'm trying to understand the adoption and people are going to look at MIEBO, the last big launch in the category, prescription sales same quarter post launch. Help us understand how you think 512 will ramp relative to that and why? And a similar question for Sean on Unity. Help us understand the speed of the upgrade cycle, 30,000 machines out there, what's the average age, what percent are over that 7 to 8 years that would typically be due for an upgrade?

So the first one -- thank you for the question. The first one on 512, I would just say, first, as a reminder, 512 is an investigational product, has not yet been approved, which leads to a couple of points. We need to see the final label we need to see the final data package. And then I think my recommendation to you if you're trying to model would be to think about how much time it's going to take to gain market access. And David alluded to this in his opening comments, there is a defined market access cycle for government patients, Medicare patients and then commercial patients can move at a different pace. So I would think that through. We believe in the profile of the product, our early response from payers and the engagements that we've had with them have been quite positive, the same with eye care professionals but it's going to take us some time to gain traction.

And I think on the Unity uptake, right, when you think about the age of the current installed base that we've got on both CENTURION and CONSTELLATION and we've been continuing to sell these at a pretty brisk pace over the -- in the last couple of years. You could probably think about 2 types of people getting on the train early, right? The early adopters who just love any new technology, you want to have the latest, greatest new toy. And there's also the people that have the more aged platform. And it's going to vary a little bit market by market but a significant portion of the installed base is over that 7- to 8-year time frame. It will vary a bit here and a bit there. But we expect that you're going to probably see more adoption early on. And like you would with most things, you'll see a longer tail as we get to the end of that 10-plus year time horizon.

[Technical Difficulty] I've had one for Sean and one for Max. [indiscernible] What is your view on [indiscernible]?

Yes. So on -- I'll start on the AT-IOL penetration. I think we still have this thesis that we're going to continue to grow about 50 basis points per year, probably a little bit more driven outside the U.S. at this point. If you go back to the chart I shared, there's about a 5-point gap between international and the U.S. in terms of the penetration today. And we've seen faster gains in the more recent time frames in international where we were starting from a lower base. So there's probably a bit of catch-up that will happen there outside the U.S. compared to the U.S. In terms of what's the total upside potential. It really depends on how technology evolves over a 5-, 10-year time frame, right? The theoretical upside is that 40%, right? That also depends on our ability to actually deliver against the proposition in a meaningful way as an industry. And so, when you think about some of the technology that we have coming in the near term, we think that does power that 50 basis point growth. But if you think about the longer term, there's things like Jeannette shared, that have the opportunity to actually kind of turbocharge that at least for a period of time as well, so. Sorry, can you repeat that question, part of the question again? Yes. Yes. And so if you think about it, again, probably more outside the U.S. in the shorter term than inside the U.S. but opportunities in both markets, quite honestly. And again, 50 basis points is going to equate to about a $50 million uptick, so.

All right. And then on the dailies penetration, that was your second question. So today, we have about 37% of the contact lens wearers in dailies. And think of it like this, directionally about 1% of reusable wearers shift, over 1 percentage point shift over into dailies every year. So next year will be 38% and the year after, 39% and so forth. In terms of where this will plateau, there's quite a long runway, very long runway, actually. One proxy for you to consider is we have one subcategory that is presbyopia correcting lens where dailies are at 60%. So and if you just do the math, then you're close to 25% -- 25 years of continuous growth. So there's quite a long runway for ample more growth for trading up people into daily disposables. And then as I said earlier, the reusable market is still sizable and we're very excited also about trading up within that segment to PRECISION7 for those folks coming into the category early on when they're teenager and they may not yet be able necessarily to afford a daily disposable SiHy lens. Now you can get into SiHy lens, that is a weekly lens, which is great.

Great. David Adlington, JPMorgan. A few questions, please. Firstly, just on the Unity consumables. I just wondered if you could give an idea on the price premium you're expecting to extract from that? Secondly, on the accommodating lens, I just wondered if you could give us an idea of the percentage of patients that have seen that overcorrection and where you expect that to get down to with the expanded trial? And then thirdly, you haven't mentioned today, Chinese VBP, I just want to -- give you an update in terms of the dynamics you're seeing there in the market.

Do you want to do the first one on price premium?

Yes. So I'll take the first one around -- so sorry, repeat the question. Price premium. Yes. So I think on the cataract side, obviously, where reimbursements are lower, we'll still be looking to achieve a price premium that will be on a more modest end of the range. When you think about the vitreoretinal procedure, there's a bigger opportunity there. One, the total reimbursement envelope is -- tends to be higher globally. Two, the variety of the procedure itself, there's a lot more different things that can happen in the retinal surgery versus a cataract surgery, it maybe a little bit more cut and dry in cataract. And we have a lot of different incremental innovation that we brought on the instrumentation side on the vitreoretinal portion of the business. So probably a little bit more of an opportunity to capture value on the vit side today. And while the number of vitreoretinal procedures are lower globally than the cataract procedures, the actual value per procedure and the reimbursement procedure is much higher. And so I think that there's opportunity on both, probably a little bit more on an absolute penny basis maybe on the vitreoretinal side.

You want to do the distribution of...

Yes. So from a accommodating lens perspective, I don't know, we will report out the exact number. I can tell you the large majority of patients actually had the visual outcomes that we were experiencing. If you noticed in the video, we're looking at tunability as well. For us, the real solve is, if we can get them, the patients that were an anomaly into a distribution curve that allows us to adjust it with the tuneable piece of this, we think we have a commercializable product. So that's what we'll say at this point.

Exactly. And on the VBP, we've got a really nice position there. It's growing nicely. We'll have a full year effect of that. So I think the back half of last year is a pretty good representation of what we would see for the full year of this year.

Chris Pasquale, Nephron. Wanted to follow up on those 2 topics with Sean and Jeannette. First, Sean, for a certain segment of the customer base here, you're going to be replacing 2 machines with one. Just talk about how that changes the adoption dynamic and what happens to your customers that have machines of different ages from the legacy systems. And then for Jeannette, it sounds like you guys have made a fair amount of progress at this point on PowerVision. You talked about reporting out these latest results at the end of this year. What's left to do after that? And how should we think about the time line to commercialization of that product?

Yes. So it's probably worth even mentioning there's 2 sort of market archetypes around the world. There's dual combo procedure markets that tend to have a higher development there and then ones that look more like the U.S. where it's more isolated probably. And I think from a age of the installed base standpoint, the CONSTELLATION equipment, which actually does have the ability to do phaco as well has been out there the longest. And so when you think about even the sequence that we decided to launch these and I think there was some thought that went into it based on that. So there's probably a little bit more pent-up demand, I guess, among the vitreoretinal surgeons on that front. But when you go to the markets where the combo procedure is more of a common thing, I think there's just a lot of interest in this just based on -- those are largely CONSTELLATION-based ORs today. And so that's really going to drive that phenomenon.

Let me just add, the retina market, in particular, is of high interest to us because it has a high value equation with this particular, so -- and particularly outside the U.S., where the ORs are shared, that will be a particularly effective market for a joint product. In the U.S., cataract surgery is typically done with a stand-alone cataract machine. So you'll probably see a difference between many of the international markets in the U.S. uptake -- U.S. uptaking a little bit more aggressively on the CS product and the other ones, other markets really around the VCS.

And then regarding the accommodating IOL program, should our hypothesis test out positive when it comes to medical therapy and biological healing, we would then go into the next stage of clinical trials. What that does for us is, it puts our commercial forecasting outside of strat plan period at this point beyond 2029.

So we've got a couple of questions that have come in online. This one from Jeff Johnson, to -- addressed to Sean, can you help us better understand the reimbursement environment for SLT, which is pretty low versus the capital and consumables cost to doctors. I think the underlying question is, is there enough profit margin left for the docs and the ASCs to do DSLT?

So the short answer to that question is I think we firmly believe there's enough profit margin left. The reimbursement, I think, is [ $241 ] in the U.S. And while there is a capital outlay that you have to put in place to acquire the machine. Based on what we're charging on a per procedure basis, there's 75% plus of the reimbursement left to go to cover every profit margin in the practice and all the other costs that they've got associated with it. Our customers have actually done the math pretty quickly and they figured out that in many cases, it makes sense for them to buy, not even just one machine but multiple machines for different locations that they've got. So we think that, that is a healthy paradigm on that front.

Okay. We got another one on 512 or [indiscernible]. You've talked a lot about -- and this question is from Susannah at Bernstein. You talked a lot about beefing up your sales force. Can you help quantify the investments that are required this year to launch this product, both from a sales force build-out and a marketing perspective?

Sure. We'll start with a dedicated sales force and a focus on the eye care professional. We've already staffed up the majority of the force that we'll put in place. We've also hired dedicated medical science liaisons who've been out doing some market development work and we've got a pretty robust market access team in the U.S. market that's already engaged with all major payers. We'll start with the eye care professional and the payers. And once we get moving, we'll move on to direct-to-consumer advertising.

Anthony from Mizuho. Sean, Max and Jeannette, 3 quick ones. Sean, just maybe a little bit on training for physicians in the United States. How long is that going to take for Unity? And then for Max, I am wearing these 2-week J&J lenses, they're very dry. I'm wondering if you have any P7 samples laying around -- but actually, how much will the cost between 2 weeks and 1 week for a 1-year supply? And then for Jeannette, just the Phase III Aurion study. Like when does that start? How long is it going to be? And when should we expect an interim readout?

Yes. So I'll start on the training for Unity. I think I don't want to belittle the fact that we will have to train but I think this is going to be a relatively straightforward thing. There are some differences for the staff and the physician on how the machine operates but we're not talking about a long throw from kind of how CENTURION has operated. So to the extent someone is familiar with CENTURION and ACTIVE SENTRY, the changes are relatively mild compared to where they've been in the past. There's probably some new functionality that we'll be able to open up for them depending on the parameters that they've been using and how they've been operating in the past but it should be a relatively straightforward thing. And we've actually started training our sales force even now on the things that they're going to have to do and go in and explain to the staff and to the surgeon on it. So we're as prepared as we think we can be on that front.

One of the nice pieces just to add on that is, so we've had about a year of opportunity to kind of have this with surgeons and see what this transition, when you port over from one set of settings to another set of settings. And we are trying to move people from very high pressures in the eye down to physiological pressure, which is safer and is more comfortable for the patient. And as you do that, it does require some adjustments in settings. So we've done a really good job and Sean's team has done a great job of training into the sales force, which is what we'll be spending a lot of time on in the very near term, so that they can help make that transition smooth. But it will take just a little bit of time to make sure we get that right.

Yes. And then for PRECISION7, if you're really seriously interested, which is great. Thank you. Maybe let's connect after the break and we find you an optometrist to get you fitted in the product.

We have a few around.

We have more than one in the crowd. I'm sure we have , so we'll get you some samples. Obviously, not going to comment on pricing strategies of other players in the category. But we believe PRECISION7 is pretty well priced actually on an annual supply basis, somewhere in the [ $400 ] range, commensurable to the value that it brings to the market and pricing, actually is a pretty good pricing for the product, as you heard from customers. So you'll see.

We have another question...

One more question regarding Aurion, Anthony, is -- so they're going to commence their Phase III, right now timing is fall of 2025. As a reminder, this is a breakthrough designation, considering enrollment, filing, et cetera, there's a forecast of 2028 commercial availability.

We have another question online. This is from Graham Doyle at UBS. Where are you on [ rolling ] adjustability or tunability across the IOL portfolio even without the accommodating lens?

Yes. I mean it's a good question, Graham. Thanks for it. We obviously have a lot of technology that's wrapped into that one lens and we are really interested in kind of doing the whole project as it stands right now. We obviously can use either technology, either the accommodating separately or the tunability separately if we chose to. We've done a little bit of work on it but we really haven't initiated anything of a project that's really dedicated to moving forward yet. We're still working through this one.

Tom Stephan with Stifel. Maybe to stick with accommodative, the tunability of 2 diopters. I think that was [ bench ] data, you mentioned, Jeannette. Did you see similar results in the study itself? Maybe if you can talk about that [ bench ] data? And then pivoting to AT-IOL penetration. I think in the U.S., the cataract surgery family is going to be up for revaluation fairly soon. We saw it come down in, I think, 2020, messy year. But do we think about that as a potential U.S. tailwind to accelerating growth in AT-IOL penetration if, let's say, standard monofocal reimbursement comes down?

I'll answer the first question. So from the accommodating lens program, the clinical trial we're running in 2024 was actually beadless, we'll call it. We were trying to test that the base lens could fit within that. So you are right, it was bench testing on the bead form but we saw phenomenal results in what we call a [ BAL ] lens, that's no beads in it. And so as we think, we have the hypothesis, we test it and it tests out, you then know that you have a solvable problem because the beads will go on top of it. So it was a beadless clinical program that we saw those results in.

And on the penetration element, I guess -- what was the question again? Tailwinds, yes, reimbursement. Yes. Like I said earlier today, I think every year, we see reimbursement comes down just a little bit. And I think that will be -- the continued downward pressure is creating, I think, a desire for surgeons to do more AT-IOLs, I think that's part of the process. I'm not sure that it really accelerates it. And typically, what we've seen accelerated has been new product entries. So when you get more promotion around it, I think most recently, you've seen a little bit of an uptick in the U.S. as the J&J folks and the B&L folks have gotten involved in this now. Internationally, when we've made progress with -- in China, that's helped the penetration work. So I don't know that the reimbursement, which is kind of expected to come down every year as these surgeries get better and more efficient. The good news on the facility fee is that it's typically gone up. Am I getting that right, Sergio, typically? Yes. Every year, they look very carefully at the facility fee, which matters because that's where actually the IOL is housed, is in the facility fee and the surgeon fee though is coming down as they obviously get faster and better at it.

Steve Lichtman, Oppenheimer. A couple for Max. First on P7, can you talk a little bit more about how you're positioning marketing in the field, so it doesn't become more cannibalistic to your 30-day and it is incremental? Obviously, you've mentioned going after the 14% that is biweekly. And then secondly, can you talk a little bit about pricing overall, increased sensitivity on price in this market, just given the broader consumer dynamics?

Yes. So look, from a positioning perspective, as I shared, the core idea here is that we have a large group of contact lenses that cannot get into daily disposable SiHy lens today. And the main reason is price. And so we see PRECISION7 as the first choice for those folks who cannot get into SiHy because of price, daily disposable. If then the PRECISION7 is still too expensive, that's where TOTAL30 comes in. So the idea is for our portfolio that we have the best performing lens at every price point. And depending on where we are on that price point, we have the right solution for you. A bit similar to what optometrists do today when they sell spectacles, quite frankly, when they start with the most premium glasses and then they take you down the ladder on price until they found the right price point for you. So from a positioning perspective, it actually slots right into our portfolio into a nice gap. And then you had a second question on pricing. Generally, yes, look, obviously, you all know we had quite an inflationary environment in the last couple of years. And in that environment, contact lens particularly, we're in a good position to actually take price pretty much in line with inflation. And on balance, I believe, you'll judge but on balance, I believe, we've got it more right than some of our competitors. Some may we have taken too much price. Some may have waited too long to take price. So I believe, on balance, we are pretty much on the money in most markets with the majority of products. And that will continue. We see that this is a place where certainly in line with inflation, we can take price on existing products. And then, of course, as we bring, as a innovation powerhouse, better solutions, there is an ample opportunity to trade up people into more premium products. And that's actually quite interesting. I didn't cover it during my presentation. But if you think about it, today, how many hours you spend in front of the screen compared to 10 years ago. And that is an impact on your eye. You blink less, your eyes dry out much faster. And that has impact on contact lenses because the demand on durability and tear frame stability on contact lenses goes up. And so lenses that were developed 5, 10 years ago are not fit for the -- for purpose 5, 10 years from now because the requirements are higher. So that creates a tremendous opportunity for us to bring better lenses in the future and then, therefore, command higher premium and people are willing to pay for that because it is something they need every day. So hopefully, that answers your question.

It's Issie Kirby from Redburn. Just wanted to hear any updated thoughts you had on the myopia management space, either on contact lens side of things, perhaps on eye drops, atropine. I know historically, you've been a little bit more conservative around your appetite to enter that space. And then similarly, obviously, you've got a lot going on in equipment but one thing I feel like we have really touched upon is the refractive suite. How are you thinking about your product portfolio, what you currently have there? Is that something where you're looking to perhaps upgrade or bring in any new offerings over the long run?

I'll take the myopia, why don't you take the refractive suite. On myopia, we're following. We follow everything in this space. And obviously, there's been a number of ideas, peripheral focus -- peripheral defocus, atropine, Ortho-k, there hasn't been anything that has really intrigued us yet. I do think there's progress being made in some of those areas. And I think it's our view as we have ideas in all of those spaces that if one of those were to get traction, meaningful traction, I think we could enter relatively quickly. And so we would probably choose to develop at that point in time once we see markets develop. So readout is, we'd like to be a fast follower in that space and see how that plays out. I think we just haven't quite gotten a level of conviction to want to go after it yet. There are some long-term projects that we're working on. We really haven't talked about but we have some of our own ideas on what other ideas might be more effective or could be more effective. Again, we'll lay those out over time as they play out or not. And then on refractive.

Yes. I mean we didn't really have the bandwidth to get into it in detail in the presentation but we are launching WaveLight Plus right now around the world, and we're very excited about that. We got it out into the market last year in Germany. And I think we've sold over 80 [ site maps ]right now, which are the front end device that actually captures the data that you need to go into the surgical plan for a LASIK procedure. And it's exciting on 2 dimensions. One, it provides you a really great outcome, very high percentage of patients with 20/20 or better vision coming out of the procedure. But it does it in a much easier manner probably for the surgeon than our previous generation had done. So it takes a little bit of the extra math out of the workload for them, which has been really well received. The other thing that's interesting about WaveLight Plus for us is, it's an opportunity for us to capture a per-procedure fee outside the U.S. So in the U.S. for a long period of time, we've had that model. Every time you fire the laser, we're collecting a portion of that revenue stream that the doctor takes is coming back to Alcon. We really haven't had that model outside the U.S. and this gives us that opportunity to introduce that into those -- some of those select markets where we're starting to roll that product out. Longer term, more coming, obviously, in the refractory space, just like there is across the rest of the portfolio.

And we like the refractive space just directionally because it tends to be a large opportunity over time. I do think everybody is aware that of the real -- of the few things that are sensitive in this -- these categories, this is among the ones that when you see consumer confidence fall, refractive tends to fall. And I think you can see that both in the China market, you can also see it in the U.S. market. So right now, it's not the greatest moment for refractive surgery. But again, it comes back pretty quickly and pretty predictably. So as long as you can kind of live with a little bit of fluctuation on that, it tends to be -- it is a big opportunity, not yet really satisfied and I think we will continue to look at it very carefully.

I think the point you made earlier is the longer-term macro trends there really support that business in the long term.

That's right.

Just got another question online. This one's for Tim on the cadence of CapEx over the next few years, where are you? What's that look like? And how is it split between growth and maintenance? How should we think about kind of what a normalized CapEx to sales ratio should like?

Yes. I'm a big midpoint guy. So I would go with the 5%. And I think that there is still some more expansion in there but it's going to be a much more normalized pace. So if you recall, a few years ago, we were playing catch-up on the DSM-Flex investments. We'll continue to put DSM-Flex lines in but we'll mirror that with the demand that we're seeing in the marketplace. And then we have our usual maintenance CapEx and that type of stuff. But I wouldn't expect any big peaks or valleys. I'd just probably load up 5% and run it out that way.

David Saxon from Needham. One for Sean, one for Jonathan. Sean, just wanted to ask on Voyager, been hearing from docs that they think it would be great for retreatment. I don't think that's in the label yet. So is that an interest for you? What would it require, et cetera? And then my second question, maybe it's a combo with -- for Jonathan and Tim. Jonathan, you talked about wanting late-stage derisked assets. Tim target M&A is $50 to $500 million? How do you balance the 2?

Yes. Very good question on Voyager. I think that it isn't in the label today, just to be clear, to do a retreatment. It is something that we're interested in. We're actually doing some legwork right now to figure out what the clinical pathway to support that might look like and be able to go back and get that added. So more to come on that as we go. But it is definitely an area of interest to us. And it's been something that doctors and our customers have asked about as well, obviously. So...

Yes. And then on the balance of the opportunity, I'll take a stab at it, Tim. I think we're not doing a lot of discovery and early development work because that's very expensive. Buying something that's largely derisked with a huge potential can also be very expensive. So what we're trying to do is find that sweet spot where we can play early, maybe we've got interest in a high-quality space, where we see the scientific thesis that's really meaningful. We're trying to get in there early and have a seat at the table so that if the thing continues to go, we've got a good position to negotiate and potentially can win the asset.

Yes, I think that's right. I mean, when you look at our capital allocation philosophy, M&A is obviously a piece of that. We're building a portfolio. So it's really different assets that you're looking at are in different phases. Some are accretive day 1, some are dilutive day 1. It's -- so it's really, we look at it from an entire portfolio perspective with the long term in mind of what we're trying to do.

It's Sam England from Berenberg. Just one broader question. You mentioned earlier on in the presentation around improving R&D processes and efficiencies. But then we've obviously spent a lot of time during the day discussing the broad range of R&D focus areas across the business. So can you give some examples of where you see opportunities for improving R&D efficiency and functions? Is there an opportunity with AI to drive greater efficiency in your R&D function, maybe working on more projects simultaneously or doing things more efficiently and quickly in R&D?

Yes. I mean, yes, in a really, really big way. And I think part of that is just our own modernization process. I think a lot of people may be further down that road than we are. But everything from this kind of start to the finish, in silico modeling as opposed to kind of hard modeling is a big opportunity for us. Software co-piloting for writing software on machine is a really big opportunity for us. There's a great deal of work that's going on around how we move documents and scientific records. That's a really big opportunity for us. There's a series of tech transfer ideas that I think matter a lot how we move from the research lab into the start-up manufacturing facilities and how we manage that information. We have a lot of discrete systems. We probably have 5 or 6 major systems that work independently but the movement of data from one system to another, we're creating what we call a digital thread that moves that data so it doesn't have to be recreated or rediscovered, particularly when you start doing iterations on products, if you have to start from scratch and go back and find a 10-year-old file that's in a box somewhere in a warehouse, which is not a crazy comment. It's really laborious and it takes time. We see a world where most of this is digitized and most of the records are much more easy to accept as you move kind of step to step going through -- all the way through to manufacturing. Franck could give you a long lesson on how all this works. But we've got, I think, 14 or 16 work streams that are basically designed to improve both the process and then using digital tools, improve what we're going to do with those processes. And we're excited about it. We think we can improve throughput meaningfully and that's a big opportunity.

Brett Fishbin from KeyBanc Capital Markets. Just one for Sean and maybe Dave on the LENSAR acquisition and understand the deal is still in progress. But I was just wondering strategically, if you could discuss a little bit how you think ALLY complements the existing portfolio and maybe whether you view it more as an upgrade or an alternative to the current offering?

Well, let me take a little bit of it, Sean can chip in. But I think -- look, LenSx has been a great product for us. It's also 15 years at this point. We know that, that product is well liked but the boards are getting very difficult to replace. We are going to have to do something about it. As we look at LENSAR, we see something that's made some real progress that's available to us right now that we think is going to be a next-generation play for us. So we think that's a natural step up. It's faster. It's mobile. It has some really interesting features in the way in which it works. It communicates well with its newest software. So we like that product a lot and it's probably -- it will be a nice add to what we would need to do one way or another.

Yes. I mean, I think we're still committed to the femtosecond space, right? And it's a very important thing for a lot of our more premium oriented customers. There's a high degree of correlation between people that are in the AT-IOL game and people that are in the femtosecond laser right? They like having that as part of their whole process. And so it's important for us to be able to keep innovating in the space and bringing new news to the table.

Richard Felton from Goldman Sachs. Follow-up on China. Do you have any estimates on how much AT-IOL penetration has increased to that market following the implementation of VBP? And then as that market potentially becomes more significant for Alcon, what is your stance on the potential of local manufacturing for AT-IOLs in China?

Well, I don't know if I've got the exact number, maybe one of these guys does but it's been meaningful. So I would just say, I think in the 200 or 300 basis points improvement in the last year. It could be higher than that, if I remember right. So it's been a big move, partly because they're reimbursing at a level that is not too dissimilar to where the first AT-IOL goes in. So for example, toric lenses, I think, are falling underneath the DRG. So there's very little up -- there's very little cost to the patient. So that's driving penetration in China. I would say that -- remember, the Chinese prices are relatively low. I mean they're probably half of what the U.S. are. And so even if we're holding volume, which we are globally, we're losing -- the volume that we're losing to share in competitors in the U.S. is at a much higher price than the gain we're getting in China on the other side. So that's the dynamic that's playing out with AT-IOLs in the moment. . What I'm excited about, though, really is that over time, you've got a stability coming in the U.S. and you've got kind of penetration driving all over the world. So U.S. continues to drive penetration. I think it's on a nice recent trend and I think that will continue. We'll see. But the rest of the world is doing really well. China was certainly the biggest but Europe moved along positively as well recently. So we're seeing a lot of people. And part of that is that many of these governments have outsourced the backlog that they've got to private payers, which is unusual, I think, particularly for the Europeans but they've done it in Canada. They've done it in the U.K. They've done it in a number of Nordic countries. I think they're doing it in a number of places around the world now to try and get the wait time for cataracts down. And what that's opened up is then an opportunity to see more AT-IOL penetration because it's being offered by these private centers that is different than where it's been. So that's a nice dynamic for us internationally.

[indiscernible]

We're -- we always look at it but it's not a high priority for us. I think we -- scale is really important to manufacturing. We have 2 really great sites, a terrific site in Huntington, West Virginia that supplies the U.S. and a lot of other markets. And then we've got Cork facility in Ireland that really supplies the rest of the world and trying to keep those fully occupied and trying to generate leverage off of those is probably our primary interest.

[ Middleway ], Patrick of Morgan Stanley. Two quick ones. One, custom packs. No one ever asks about it but good duopoly, very stable business, ability to take pricing. Is there anything going on in there? That's the first kind of bundle. Second one on Unity, a bit of a niche question but I love those. Airgas exchange, you guys made a bit of a change on that side of things. But that was the #1 area for a lot of surgeons around malpractice claims. Was that to make things a little bit easier for them? What are some of the implications for the docs on that side?

I'll do the pack thing. Packs are a great business for us. We have a very, very unique capability and it's scaled. So it's very hard to reproduce. We make packs on a per doc basis. So it has the name of the surgeon and it has exactly what that surgeon is going to use. And sometimes it has 2 and 3 versions for that surgeon depending on the procedure. We're able to customize that because we have very unique setup down in Austin for the U.S. and in Belgium for the rest of the world. And we got really good at it. But a lot of it is in our logistics and our planning and our packaging. There's a lot of automation in this now and we're getting better at it every year. The scale of that does afford us some real defense around what it costs to other people to kind of come into that space. So we feel good about our ability to defend there. Pricing is always sensitive and it's mostly sensitive to the total reimbursement price. So kind of when you get all through it, there's a fixed amount that -- particularly in the U.S., they're getting a price for -- the facility is getting a price for the reimbursement. And so they got to afford the capital, the pack, the IOL and anything else they use and their staff. So they got to fit all that in there. So when the facility fee moves up a little bit, we can sometimes take a little bit of price. And we will, as we move into Unity, for example, on some of the packs that we do. But I think it's a tricky business because everybody is very aware of the cost per procedure and that includes everything from service to the IOL to the capital. So easier outside the U.S. at some level because it's a little bit more disjointed in terms of the way it gets reimbursed.

And then I think in your second. Do you want to take it?

Yes. So on gas delivery. That's something that we're in the process of launching right now a new product called UNIFEYE that actually dials in the exact concentration of gas. So it takes a lot of the -- I don't want to say, guess work but risk of lack of precision out of the system. You've got to dial on the actual unit, you -- what concentration of the particular gas that you're using, dial it in. It's ready to go. It's a disposable device, so onetime use and then it's gone and that's something that we'll be launching here over the next several months to complement the Unity VCS launch.

Just to comment around that as well, Sean. I mean if you're really looking at why Alcon would pursue a gas mixer like that, #1 fear is blindness. If that mixture is wrong, you're blinding a person. That's both patient implication and legal implication. So -- and our customers are used to doing consumables with us. The tech turnover as well, when you think about all the dynamics, first, patient safety; second, legal liability; and third, that tech thing, this is a natural consumable that they would pick up from us. So it's a nice unmet need.

Larry Biegelsen, Wells Fargo. Sean, one for you on implantables. You have a lot of new products coming in surgical, but on the implantable side the next big breakthrough is outside of the time -- planning horizon here. How do you see implantables, it's 2% in Q4, I think. How do you see that relative to the 6% CAGR you told us today going forward over the next 5 years? And Max, I didn't see anything on daily disposable penetration. I mean, I'm sorry, silicone hydrogel penetration in daily disposables and reusable on a dollars and unit basis. Where do you see that going, particularly on the daily disposable side because that's been driving a lot of growth, right, the upgrade to silicone hydrogel?

Yes. I mean I think in the IOL space, we're confident in our ability to maintain a leadership position there. While the next sort of wave of totally breakthrough innovation maybe a little bit further out, we still have room to continue to innovate within our 2 existing main technologies on PanOptix and on Vivity and we will continue to do that. I think the situation will vary a little bit market by market depending on the competitive set and how fast other things launch or come to fruition there. But on a overarching global basis, I think we're still really confident in our ability to maintain leadership in that particular area.

Yes. And then on your question on daily disposable SiHy lenses and the penetration and the growth rate, think of it like this. We see the market grow overall 5%. Of course, dailies are growing faster because there is a shift. So they're roughly in the 6%, 7%, 8% in the next couple of years. And then within that, the fastest-growing segment is daily disposal SiHy. That's low to mid-single digits. And we see that continue over the next planning horizon for sure, not slowing down any way.

[indiscernible]

Double digits, sorry, did I say single digits? Yes, that's wrong. Thank you. No, it's -- yes, somewhere between 12% to 15%, so low to mid-double digits to be exact.

We've got time for a few more questions in the room. If not, I can jump in. This one is for Sean from Falko Friedrichs at Deutsche Bank with respect to the DSLT. I'm really impressed with the $75 million to $150 million revenue target you guys gave out for that. But is that within the current plan and your current or medium-term plan? And how do you expect that to phase in?

Yes. So I think that's sort of our outlook on peak revenue today and it's probably more at the later end of the 5-year time horizon. Now that said, I would say we've been pleasantly surprised by the surgeon response that we've gotten to the device so far. And we want to make sure that we're also looking at opportunities to expand that into markets where it doesn't have approval today. And so we'll continue to work on that as we go forward.

Dan, if there's no more questions, maybe I'll just wrap it up.

Yes, Yes, I think we can -- oh, we got one more.

Okay.

It's Young Li from Jefferies. I guess 2 questions related to glaucoma programs you didn't really get a chance to talk about. But first, thoughts on, I guess, the intracameral drug delivery market, i.e., eye dose. And also just on monofocals that can potentially deliver glaucoma drugs for a couple of years.

Yes. We watch those spaces very closely. I think what the Glaukos people are doing is a really great thing. And I hope they succeed with it. I think it would open up a market for -- if they can find reimbursement consistently that makes sense for development in that space, I think we'd be excited about that. I hope they succeed. I think on the other front, we're a little bit less optimistic necessarily. We've looked at a lot of the ideas about IOL attachments to delivered glaucoma, difficult technologies in our opinion. But again, we're always open to having other people break new ground. And again, we, generally speaking, can follow in with something that makes good sense for us. So both of those are very interesting.

Okay. I think that concludes our Q&A session.

Well, let me just wrap it up by thanking everybody. And I'm going to just finish by where we started. We're excited about these markets. And we live this every day, so we get kind of animated about the positives that we create and helping people see well. I think the part that matters is, of course, that these markets over the long stretch are resilient. They're underpinned by some really good fundamentals and some positive macro trends. We're excited about this next frame because, of course, we've kind of ended this kind of very hard work that was to separate and kind of stand up and get everything organized and really reinvest. We spent a lot of capital for a long stretch and I think we are now in a place where we're generating cash and we're in a much more mature phase. And you can see that we're moving now into this next phase and where we run operationally in a very excellent manner and trying to build a great company. It comes down to in the end, innovation. And so what you will have seen today, at least for a while, has been this notion of consistent product flow throughout the years. We've done that for the last 4 or 5 years. We see a really healthy portfolio in front of us. So with that said, let me just thank you all for your time today. There are some terrific sandwiches, I think, outside. So good luck with that and thank you for coming. Appreciate it.

Our program has ended. Thank you for joining.