Cover
Cover | 6 Months Ended |
Jun. 30, 2019 | |
Document Information [Abstract] | |
Document Type | 6-K |
Entity File Number | 001-31269 |
Document Period End Date | Jun. 30, 2019 |
Entity Registrant Name | ALCON INC. |
Entity Address, Address Line One | Chemin de Blandonnet 8 |
Entity Address, Address Line Two | 1214 Vernier |
Entity Address, City or Town | Geneva |
Entity Address, Country | Switzerland |
Entity Central Index Key | 0001167379 |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Profit or loss [abstract] | ||||
Net sales to third parties | $ 1,863 | $ 1,819 | $ 3,640 | $ 3,598 |
Sales to former parent | 0 | 1 | 0 | 2 |
Other revenues | 40 | 0 | 87 | 0 |
Net sales and other revenues | 1,903 | 1,820 | 3,727 | 3,600 |
Cost of net sales | (922) | (942) | (1,847) | (1,855) |
Cost of other revenues | (34) | 0 | (81) | 0 |
Gross profit | 947 | 878 | 1,799 | 1,745 |
Selling, general & administration | (760) | (722) | (1,416) | (1,375) |
Research & development | (167) | (152) | (313) | (289) |
Other income | 6 | 62 | 18 | 81 |
Other expense | (79) | (28) | (189) | (51) |
Operating (loss)/income | (53) | 38 | (101) | 111 |
Interest expense | (35) | (6) | (44) | (12) |
Other financial income & expense | (8) | (8) | (16) | (14) |
(Loss)/income before taxes | (96) | 24 | (161) | 85 |
Taxes | (294) | (9) | (338) | (32) |
Net (loss)/income | $ (390) | $ 15 | $ (499) | $ 53 |
(Loss)/earnings per share | ||||
Basic earnings per share (in dollars per share) | $ (0.80) | $ 0.03 | $ (1.02) | $ 0.11 |
Diluted earnings per share (in dollars per share) | $ (0.80) | $ 0.03 | $ (1.02) | $ 0.11 |
Weighted average number of shares outstanding | ||||
Weighted average number of shares outstanding - Basic (in shares) | 488.2 | 488.2 | 488.2 | 488.2 |
Weighted average number of shares outstanding - Diluted (in shares) | 488.2 | 488.2 | 488.2 | 488.2 |
CONSOLIDATED INCOME STATEMENT_2
CONSOLIDATED INCOME STATEMENTS (unaudited) (parenthetical) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Profit or loss [abstract] | ||||
Weighted average number of shares outstanding (in shares) | 488.2 | 488.2 | 488.2 | 488.2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of comprehensive income [abstract] | ||||
Net (loss)/income | $ (390) | $ 15 | $ (499) | $ 53 |
Other comprehensive income to be eventually recycled into the consolidated income statement: | ||||
Currency translation effects | 5 | (88) | 1 | (40) |
Total of items to eventually recycle | 5 | (88) | 1 | (40) |
Other comprehensive income never to be recycled into the consolidated income statement: | ||||
Actuarial (losses)/gains from defined benefit plans, net of taxes | 0 | 16 | (7) | 33 |
Fair value adjustments on equity securities, net of taxes | 0 | 0 | (2) | 0 |
Total of items never to be recycled | 0 | 16 | (9) | 33 |
Total comprehensive (loss)/income | $ (385) | $ (57) | $ (507) | $ 46 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (unaudited) (parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of comprehensive income [abstract] | ||||
Actuarial (losses)/gains from defined benefit plans, tax expense (benefit) | $ 1,000,000 | $ (5,000,000) | $ 2,000,000 | $ (10,000,000) |
Fair value adjustments on equity securities, tax expense (benefit) | $ 0 | $ 0 | $ (5,000,000) | $ 0 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Non-current assets | ||
Property, plant & equipment | $ 2,887 | $ 2,800 |
Right-of-use assets | 266 | 79 |
Goodwill | 8,905 | 8,899 |
Intangible assets other than goodwill | 10,719 | 10,679 |
Deferred tax assets | 338 | 670 |
Financial assets | 357 | 388 |
Other non-current assets | 160 | 148 |
Total non-current assets | 23,632 | 23,663 |
Current assets | ||
Inventories | 1,489 | 1,440 |
Trade receivables | 1,407 | 1,253 |
Receivables from former parent | 0 | 20 |
Income tax receivables | 34 | 33 |
Other financial receivables from former parent | 0 | 39 |
Cash and cash equivalents | 721 | 227 |
Other current assets | 491 | 387 |
Total current assets | 4,142 | 3,399 |
Total assets | 27,774 | 27,062 |
Equity | ||
Invested capital | 0 | 22,639 |
Share capital | 20 | 0 |
Reserves | 19,432 | 0 |
Total equity | 19,452 | 22,639 |
Non-current liabilities | ||
Financial debts | 1,751 | 0 |
Lease liabilities | 220 | 89 |
Deferred tax liabilities | 1,408 | 1,528 |
Provisions & other non-current liabilities | 1,125 | 913 |
Total non-current liabilities | 4,504 | 2,530 |
Current liabilities | ||
Trade payables | 881 | 663 |
Payables to former parent | 0 | 85 |
Financial debts | 1,771 | 47 |
Lease liabilities | 53 | 0 |
Other financial liabilities to former parent | 0 | 67 |
Current income tax liabilities | 276 | 151 |
Provisions & other current liabilities | 837 | 880 |
Total current liabilities | 3,818 | 1,893 |
Total liabilities | 8,322 | 4,423 |
Total equity and liabilities | $ 27,774 | $ 27,062 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (parenthetical) $ in Millions | Dec. 31, 2018USD ($) |
Statement [Line Items] | |
Financial debts | $ 0 |
Lease liabilities | 89 |
Property, plant & equipment | 2,800 |
Right-of-use assets | 79 |
Previously stated [member] | |
Statement [Line Items] | |
Financial debts | 89 |
Property, plant & equipment | $ 79 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) - USD ($) $ in Millions | Total | Share capital [member] | Other reserves [member] | Former parent net investment [member] | Fair value adjustments on marketable securities [member] | Fair value adjustments on equity securities [member] | Actuarial losses/gain from defined benefit plans [member] | Cumulative currency translation effects [member] | Total value adjustments [member] |
Total invested capital, beginning balance (Previously stated [member]) at Dec. 31, 2017 | $ 23,029 | $ 22,942 | $ 25 | $ (25) | $ 87 | $ 87 | |||
Total invested capital, beginning balance (Impact of change in accounting policies [member]) at Dec. 31, 2017 | 0 | 25 | $ (25) | (25) | |||||
Total invested capital, beginning balance at Dec. 31, 2017 | 23,029 | 22,967 | (25) | 87 | 62 | ||||
Net income/(loss) | 53 | 53 | |||||||
Other comprehensive loss | (7) | 33 | (40) | (7) | |||||
Total comprehensive (loss)/income | 46 | 53 | 33 | (40) | (7) | ||||
Movements of financing provided to former parent, net | (288) | (288) | |||||||
Other transactions with former parent | (59) | (59) | |||||||
Other movements | 0 | ||||||||
Total Other movements | (347) | (347) | |||||||
Total invested capital, ending balance at Jun. 30, 2018 | 22,728 | 22,673 | 8 | 47 | 55 | ||||
Total invested capital, beginning balance at Dec. 31, 2018 | 22,639 | 22,650 | $ (23) | (17) | 29 | (11) | |||
Net income/(loss) | (499) | $ (390) | (109) | ||||||
Other comprehensive loss | (8) | (2) | (7) | 1 | (8) | ||||
Total comprehensive (loss)/income | (507) | (390) | (109) | (2) | (7) | 1 | (8) | ||
Movements of financing provided to former parent, net | (2,658) | (2,658) | |||||||
Other transactions with former parent | (46) | (46) | |||||||
Reclassification of deferred equity-compensation | (7) | (7) | |||||||
Distribution by former parent of share capital | $ 20 | 19,812 | (19,832) | ||||||
Equity-based compensation | 28 | 28 | |||||||
Other movements | 3 | 1 | 2 | ||||||
Total Other movements | (2,680) | 20 | 19,841 | (22,541) | |||||
Total invested capital, ending balance at Jun. 30, 2019 | $ 19,452 | $ 20 | $ 19,451 | $ 0 | $ (25) | $ (24) | $ 30 | $ (19) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) (parenthetical) | Dec. 31, 2018USD ($) |
Equity | $ 22,639,000,000 |
Increase (decrease) due to application of IFRS 9 [Member] | |
Equity | 25,000,000 |
Increase (decrease) due to application of IFRS 15 [member] | |
Equity | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of cash flows [abstract] | ||
Net income/(loss) | $ (499) | $ 53 |
Adjustments to reconcile net income/(loss) to net cash flows from operating activities | ||
Depreciation, amortization, impairments and fair value adjustments | 709 | 615 |
Equity-based compensation expense | 28 | 0 |
Non-cash change in provisions and other non-current liabilities | 15 | 25 |
Losses on disposal and other adjustments on property, plant & equipment and other non-current assets, net | 4 | 0 |
Interest expense | 44 | 12 |
Other financial income and expense | 16 | 14 |
Taxes | 338 | 32 |
Interest received | 1 | 0 |
Interest paid | (28) | (4) |
Other financial payments | (13) | (14) |
Taxes paid | (64) | (67) |
Net cash flows before working capital changes and net payments out of provisions and other non-current liabilities | 551 | 666 |
Net payments out of provisions and other cash movements in non-current liabilities | (68) | (54) |
Change in net current assets and other operating cash flow items | (182) | (57) |
Net cash flows from operating activities | 301 | 555 |
Purchase of property, plant & equipment | (206) | (179) |
Purchase of intangible assets | (55) | (86) |
Purchase of financial assets | (15) | (16) |
Proceeds from sales of financial assets | 1 | 6 |
Acquisition of business, net | (283) | 0 |
Net cash flows used in investing activities | (558) | (275) |
Movements of financing provided to former parent, net | (2,658) | (288) |
Proceeds from non-current financial debts, net of issuance costs | 1,745 | 0 |
Proceeds from current financial debts, net of issuance costs | 1,709 | 0 |
Lease payments | (22) | 0 |
Change in other financial receivables from former parent | 39 | (11) |
Change in other financial liabilities to former parent | (67) | 2 |
Other financing cash flows | 1 | (1) |
Net cash flows provided by/(used in) financing activities | 747 | (298) |
Effect of exchange rate changes on cash and cash equivalents | 4 | (3) |
Net change in cash and cash equivalents | 494 | (21) |
Cash and cash equivalents at January 1 | 227 | 172 |
Cash and cash equivalents at June 30 | $ 721 | $ 151 |
Basis of preparation
Basis of preparation | 6 Months Ended |
Jun. 30, 2019 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Basis of preparation | Basis of preparation On February 28, 2019, Novartis AG (“Novartis” or “Former Parent”) shareholders at their Annual General Meeting approved the proposed 100% spin-off of Alcon Inc. (“Alcon” or “the Company”) through the distribution of a dividend-in-kind of new Alcon shares to Novartis shareholders and Novartis American Depositary Receipt (“ADR”) holders (the “Spin-Off”), subject to completion of certain conditions precedent to the distribution. Amendment No. 6 to Alcon's Registration Statement on Form 20-F filed with the Securities and Exchange Commission ("SEC") on March 22, 2019, ("Form 20-F"), was declared effective by the SEC on that same day. On April 9, 2019 (the “Distribution Date”), Alcon became an independent, publicly-traded company as a result of the Spin-Off and the shares of Alcon are listed on the SIX Swiss Stock Exchange ("SIX") and on the New York Stock Exchange ("NYSE") under the symbol “ALC”. Each Novartis shareholder of record as of April 8, 2019 and each holder of Novartis’ ADR of record as of April 1, 2019 received one share of Alcon common stock for every five shares of Novartis common stock or Novartis ADR held. These Condensed Consolidated Interim Financial Statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting as issued by the International Accounting Standards Board ("IASB") and the basis of preparation as described in this Note 1 and with the accounting policies as described in Note 3 of the December 31, 2018 Combined Financial Statements in the Company’s Form 20-F, except for the changes to the accounting policy related to Leases which was updated as of January 1, 2019, due to the adoption of the new International Financial Reporting Standard ("IFRS") standard IFRS 16, Leases . The updated accounting policy is disclosed in Note 2 to these Condensed Consolidated Interim Financial Statements. These Condensed Consolidated Interim Financial Statements do not include all of the information required for a complete set of IFRS financial statements. The financial information consolidates the Company and the subsidiaries it controls, and includes selected notes to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual combined financial statements. Therefore the Condensed Consolidated Interim Financial Statements should be read in conjunction with the annual combined financial statements for the year ended December 31, 2018, which have been prepared in accordance with IFRS as issued by the IASB. The accompanying Condensed Consolidated Interim Financial Statements present our historical financial position, results of operations, comprehensive income/(loss), and cash flows in accordance with IFRS. The combined financial statements for periods prior to the Spin-Off were derived from Novartis’ consolidated financial statements and accounting records and prepared in accordance with IFRS for the preparation of carved-out combined financial statements. Through the date of the Spin-Off, all revenues and costs as well as assets and liabilities directly associated with Alcon have been included in the combined financial statements. Prior to the Spin-Off, the combined financial statements also included allocations of certain expenses for services provided by Novartis to Alcon and allocations of related assets, liabilities, and the Former Parent’s invested capital, as applicable. The allocations were determined on a reasonable basis; however, the amounts are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an entity that operated independently of Novartis during the applicable periods. Agreements entered into between Alcon and Novartis in connection with the Spin-Off govern the relationship between the parties following the Spin-Off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided on a temporary basis between the parties. Following the Spin-Off, the consolidated financial statements include the accounts of the Company and its subsidiaries and no longer include any allocations from Novartis. |
Selected accounting policies
Selected accounting policies | 6 Months Ended |
Jun. 30, 2019 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Selected accounting policies | Selected accounting policies The Company's principal accounting policies are set out in Note 3 to the Combined Financial Statements in the Form 20-F and conform with IFRS as issued by the IASB. The presentation of financial statements requires management to make subjective and complex judgments that affect the reported amounts. Because of the inherent uncertainties, actual outcomes and results may differ from management's assumptions and estimates. As discussed in Note 3 to the Combined Financial Statements in the Form 20-F, Goodwill, the Alcon brand name and acquired In-process research & development projects are reviewed for impairment at least annually and these, as well as all other investments in intangible assets, are reviewed for impairment whenever an event or decision occurs that raises concern about their balance sheet carrying value. Goodwill and other intangible assets represent a significant amount of total assets on the Company's consolidated balance sheets. Impairment testing may lead to potentially significant impairment charges in the future which could have a materially adverse impact on the Company's results of operations and financial condition. Financial assets The "Financial assets" portion of the accounting policy was expanded in 2019 to include derivative instruments, as follows: Derivative financial instruments are initially recognized in the balance sheet at fair value and are remeasured to their current fair value at the end of each subsequent reporting period. The valuation of forward exchange rate contracts and foreign exchange swaps are based on the discounted cash flow model, using interest curves and spot rates at the reporting date as observable inputs. Unsettled forward contracts and swaps are measured at fair value at month-end with changes in fair value recorded to the income statement as unrealized gains or losses in "Other financial income & expense". Settled forward contracts and swaps are measured at maturity date at fair value with corresponding realized gains or losses recognized in the income statement in "Other financial income & expense". No hedge accounting is applied for these arrangements. Other revenues The "Other revenues" portion of the "Revenue recognition" accounting policy was expanded in 2019 to include accounting for the Company's contract manufacturing arrangement with Novartis, as follows: "Other revenues" mainly include revenue from contract manufacturing services provided to the Company's former parent which are recognized over time as the service obligations are completed. Associated costs incurred are recognized in "Cost of other revenues". Earnings (loss) per share "Basic earnings (loss) per share" is based on the weighted average number of common shares outstanding. "Diluted earnings (loss) per share" is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. IFRS 16, Leases effective as of January 1, 2019 Effective January 1, 2019, Alcon implemented IFRS 16, Leases , which provides a new model for lessee accounting in which substantially all leases are now recognized on the balance sheet as right-of-use assets with corresponding lease liabilities. The standard replaces IAS 17, Leases . Right-of-use assets are recognized based on the amount of the lease liability adjusted for payments made before the lease commencement date, lease incentives and other items related to the lease agreements. Lease liabilities are recognized based on the net present value of remaining lease payments. The Company has applied the practical expedients discussed in Note 7 of these Condensed Consolidated Interim Financial Statements in the adoption of the standard. Upon adoption of the new standard, a portion of the annual operating lease costs previously fully recognized as a functional expense is recorded as interest expense. In addition, the portion of the lease payments representing a reduction of the lease liability is recognized in the cash flow statement as an outflow from financing activities, which was previously fully recognized as an outflow from operating activities for operating leases. These effects of the adoption and impacts on the income statements and statements of cash flows are further discussed in Note 7 of these Condensed Consolidated Interim Financial Statements. IFRS 16 substantially carries forward the lessor accounting requirements under IAS 17 such that adoption of the standard did not have a significant impact upon the Company's accounting for surgical equipment leases where the Company is the lessor and for which the Company's accounting policy is included in the "Revenue recognition" accounting policy in Note 3 to the Combined Financial Statements in the Form 20-F. The Company has updated the following accounting policy, effective January 1, 2019, as a result of the adoption of the new standard: Leases As lessee, the Company assesses whether a contract contains a lease at inception of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a corresponding lease liability for all arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases for which Alcon has elected the recognition exemptions allowed under IFRS 16. Right-of-use assets "Right-of-use assets" are initially recognized at cost, which is comprised of the amount of the initial measurement of the corresponding lease liabilities, adjusted for any lease payments made at or prior to the commencement date of the lease, lease incentives received and initial direct costs incurred, as well as any expected costs for obligations to dismantle and remove Right-of-use assets when they are no longer used. Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful life of the right-of-use asset or the end of the lease term. Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not be recoverable using cash flow projections for the useful life. Lease liabilities "Lease liabilities" are accounted for at amortized cost and are initially measured at the present value of future lease payments and are classified as current or non-current based on the due dates of the underlying principal payments. In determining the lease term, the Company evaluates the renewal options and termination options reasonably certain to be exercised. Lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the incremental borrowing rate Alcon would be expected to pay within the respective markets, on a borrowing with a similar term and security. Interest in the period is recorded within "interest expense" in the Company's consolidated income statements. Lease liabilities are remeasured for changes in estimated lease term, future lease payments arising from a change in an index or rate, amounts expected to be payable under a residual value guarantee, or in assessment of whether the Company will exercise a purchase, extension or termination option. Changes to initial lease contract terms are assessed to determine their impact on the scope of lease, and any modifications increasing the scope of the lease are treated as new contracts under the initial measurement principles, while modifications that do not increase or that decrease the scope of the lease result in an adjustment to the Right-of-use asset which is remeasured as of the date of the modification. Principal payments made on Lease liabilities and any initial direct costs paid are classified as financing cash outflows, while interest payments are classified as operating cash outflows. Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in the consolidated income statement and are classified as cash flows from operating activities. Short-term leases are leases with a lease term of twelve months in duration or less. |
Significant transactions
Significant transactions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations1 [Abstract] | |
Significant transactions | Significant transactions Significant transactions in the six months ended June 30, 2019 Completion of Spin-Off from Novartis through a dividend in kind distribution to Novartis shareholders The Spin-Off was executed on April 9, 2019 as described in Note 1. The below transactions occurred in April 2019, immediately preceding the Spin-Off. On April 2, 2019, Alcon borrowed $3.2 billion against the bridge and other term loans which were executed on March 6, 2019 and are described in the Form 20-F and Note 8 of these Condensed Consolidated Interim Financial Statements. These borrowings increased the Company's third party financial debts to $3.5 billion . Through a series of intercompany transactions, Alcon legal entities then paid approximately $3.1 billion in cash to Novartis and its affiliates prior to the Spin-Off, decreasing Alcon's net assets to approximately $20.0 billion at the date of Spin-Off. Surgical-Acquisition of PowerVision, Inc. On March 13, 2019, Alcon acquired 100% of the outstanding shares and equity of PowerVision, Inc. ("PowerVision"), a privately-held, US-based company focused on developing accommodative, implantable intraocular lenses. This technology allows the intraocular lens to respond to natural muscular movements in the eye to alter shape and focus. The PowerVision acquisition was executed as part of Alcon's commitment to innovation in advanced technology intraocular lenses ("AT-IOLs"). The fair value of the total purchase consideration was $424 million . This amount consisted of an initial cash payment of $289 million and the fair value of the probability weighted contingent consideration of $135 million due to PowerVision shareholders, which they are eligible to receive upon the achievement of specified regulatory and commercialization milestones. The preliminary purchase price allocation resulted in net identifiable assets of $418 million , which consisted of In-process research & development intangible assets of $505 million , a net deferred tax liability of $93 million , other net assets of $6 million . Goodwill of $6 million was also recognized which is attributable to the assembled workforce. Cash paid for the acquisition, net of cash acquired, was $283 million . The 2019 results of operations since the date of acquisition and transaction costs for the acquisition were not material. Significant transactions in 2018 Surgical-Acquisition of TrueVision Systems, Inc. On December 19, 2018, Alcon acquired 100% of the outstanding shares and equity of TrueVision Systems, Inc. ("TrueVision"), a privately held US based company. TrueVision developed the 3D scope technology currently used in the commercially marketed Alcon product NGENUITY . This technology allows retina surgery specialists to have a 3D visualization of the back of the eye with greater depth and detail than traditional microscopes. The fair value of the total purchase consideration amounted to $146 million . This amount consists of an initial cash payment of $110 million and the fair value of the probability weighted contingent consideration of $36 million due to TrueVision shareholders, which they are eligible to receive upon the achievement of specified development and commercialization milestones. The purchase price allocation resulted in net identifiable assets of $144 million , which consisted of intangible assets of $172 million , net deferred tax liability of $29 million and other net assets of $1 million . Goodwill of $2 million was also recognized which is attributable to the assembled workforce. The 2018 results of operations following the date of acquisition were not material. Vision Care-Acquisition of Tear Film Innovations, Inc. On December 17, 2018, Alcon acquired 100% of the outstanding shares and equity of Tear Film Innovations, Inc. ("Tear Film"), a privately held US based company. Tear Film is the manufacturer of the iLux® Device, an innovative therapeutic device used to treat Meibomian Gland Dysfunction, a leading cause of dry eye. The fair value of the total purchase consideration amounted to $145 million . This amount consists of an initial cash payment of $79 million and the fair value of the probability weighted contingent consideration of $66 million due to Tear Film previous owners, which they are eligible to receive upon the achievement of specified development and commercialization milestones. The purchase price allocation resulted in net identifiable assets of $143 million , which consisted of intangible assets of $174 million , net deferred tax liability of $37 million , cash of $5 million and other net assets of $1 million . Goodwill of $2 million was also recognized which is attributable to the assembled workforce. The 2018 results of operations following the date of acquisition were not material. |
Segmentation of key figures
Segmentation of key figures | 6 Months Ended |
Jun. 30, 2019 | |
Operating Segments [Abstract] | |
Segmentation of key figures | Segmentation of key figures The segment information disclosed in these Condensed Consolidated Interim Financial Statements reflects historical results consistent with the identifiable reporting segments of the Company and financial information that the Chief Operating Decision Maker (CODM) reviews to evaluate segmental performance and allocate resources among the segments. The CODM is the Executive Committee of Alcon. The businesses of Alcon are divided operationally on a worldwide basis into two identified reporting segments, Surgical and Vision Care. As indicated below, certain income and expenses are not allocated to segments. Reporting segments are presented in a manner consistent with the internal reporting to the CODM. The reporting segments are managed separately due to their distinct needs and activities for research, development, manufacturing, distribution, and commercial execution. The Executive Committee of Alcon is responsible for allocating resources and assessing the performance of the reporting segments. In Surgical, the Company researches, develops, manufactures, distributes and sells ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery and glaucoma surgery. The surgical portfolio also includes implantables, consumables and surgical equipment required for these procedures and supports the end-to-end procedure needs of the ophthalmic surgeon. In Vision Care, the Company researches, develops, manufactures, distributes and sells daily disposable, reusable, and color-enhancing contact lenses and a comprehensive portfolio of ocular health products, including products for dry eye, contact lens care and ocular allergies, as well as ocular vitamins and redness relievers. Alcon also provides services, training, education and technical support for both the Surgical and Vision Care businesses. The basis of preparation described in Note 1, and the selected accounting policies mentioned in Note 2 of these Condensed Consolidated Interim Financial Statements, are used in the reporting of segment results. The Executive Committee of Alcon evaluates segmental performance and allocates resources among the segments primarily based on net sales and segment contribution. Net identifiable assets are not assigned to the segments in the internal reporting to the CODM, and are not considered in evaluating the performance of the business segments by the Executive Committee of Alcon. Segment contribution excludes amortization and impairment costs for acquired product rights or other intangibles, general and administrative expenses for corporate activities, and certain other income and expense items. General & administration (corporate) includes the costs of the Alcon corporate headquarters, including all related corporate function costs. For the historical comparative period only, the related corporate function costs were allocated to Alcon from its former parent. Other expense, net of other income, includes other items of income and expense such as separation costs, restructuring costs and legal settlements that are not attributable to a specific segment. Segmentation - Consolidated income statements Three months ended June 30, 2019 and 2018 Surgical Vision Care Company ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net sales to third parties 1,051 1,030 812 789 1,863 1,819 Sales to former parent — 1 — — — 1 Other revenues — — 40 — 40 — Net sales and other revenue 1,051 1,031 852 789 1,903 1,820 Segment contribution 217 219 135 131 352 350 Amortization of intangible assets (270 ) (258 ) Impairment charges on intangible assets — (39 ) General & administration (corporate) (62 ) (49 ) Other (expense)/income, net (73 ) 34 Operating (loss)/income (53 ) 38 Interest expense (35 ) (6 ) Other financial income & expense (8 ) (8 ) (Loss)/Income before taxes (96 ) 24 Six months ended June 30, 2019 and 2018 Surgical Vision Care Company ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net sales to third parties 2,051 2,007 1,589 1,591 3,640 3,598 Sales to former parent — 2 — — — 2 Other revenues — — 87 — 87 — Net sales and other revenues 2,051 2,009 1,676 1,591 3,727 3,600 Segment contribution 440 422 282 314 722 736 Amortization of intangible assets (536 ) (516 ) Impairment charges on intangible assets — (39 ) General & administration (corporate) (116 ) (100 ) Other (expense)/income, net (171 ) 30 Operating (loss)/income (101 ) 111 Interest expense (44 ) (12 ) Other financial income & expense (16 ) (14 ) (Loss)/Income before taxes (161 ) 85 Segmentation - Additional balance sheet disclosure Surgical Vision Care Not allocated (1) Total ($ millions) Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Goodwill 4,544 4,538 4,361 4,361 — — 8,905 8,899 Intangible assets other than goodwill 6,181 6,053 1,558 1,646 2,980 2,980 10,719 10,679 (1) Alcon brand name. Net sales by segment Three months ended Six months ended ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Implantables 300 298 585 577 Consumables 588 578 1,139 1,119 Equipment/other 163 154 327 311 Total Surgical 1,051 1,030 2,051 2,007 Contact lenses 493 478 991 987 Ocular health 319 311 598 604 Total Vision Care 812 789 1,589 1,591 Net sales to third parties 1,863 1,819 3,640 3,598 Net sales by region (1) Three months ended Six months ended ($ millions unless indicated otherwise) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 United States 779 42 % 750 41 % 1,516 42 % 1,462 41 % International 1,084 58 % 1,069 59 % 2,124 58 % 2,136 59 % Net sales to third parties 1,863 100 % 1,819 100 % 3,640 100 % 3,598 100 % (1) Net sales to third parties by location of third-party customer. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Income taxes On June 30, 2019, Swiss voters approved the Swiss Tax Reform and Old Age Insurance financing bill ("Swiss tax reform"). As a result, the corporate income tax rate applicable to Alcon’s Swiss profits as of January 1, 2020 will increase from approximately 9.4% in 2019 to approximately 14.2% beginning in 2020. This change resulted in a non-cash increase in tax expense of $301 million related to the re-measurement of Swiss deferred tax assets and liabilities as of June 30, 2019 and is included as a discrete tax expense item. |
Earnings_(Loss) per share
Earnings/(Loss) per share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings per share [abstract] | |
Earnings/(Loss) per share | Earnings/(Loss) per share On April 9, 2019, the date of the Spin-Off, 488.2 million shares of the Company's Common Stock were distributed to Novartis shareholders and Novartis American Depositary Receipt (“ADR”) holders. No dividends were paid from April 9, 2019 through June 30, 2019. Basic earnings/(loss) per share is computed by dividing the Company's net (loss)/income for the period by the weighted average number of common shares outstanding during the period. For both the three and six month periods ended June 30, 2019, the weighted average number of shares outstanding was 488.2 million shares. For periods prior to the Spin-Off, the denominator for basic earnings per share uses the number of shares distributed on the date of the Spin-Off. The Company's only potentially dilutive securities are the outstanding unvested equity-based awards, as described in Note 10 to these Condensed Consolidated Interim Financial Statements. Except when the effect would be anti-dilutive, the calculation of diluted earnings per common share includes the weighted average net impact of unvested equity-based awards. For the three and six month periods ended June 30, 2019, 1.8 million and 0.9 million |
Right-of-use assets and Lease l
Right-of-use assets and Lease liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Right-of-use assets and Lease liabilities | Right-of-use assets and Lease liabilities Alcon adopted IFRS 16, Leases effective January 1, 2019, as described in Notes 1 and 2 to these Condensed Consolidated Interim Financial Statements. The Company has applied the modified retrospective method, with right-of-use assets measured at an amount equal to the lease liability, adjusted by the amount of the prepaid or accrued lease payments relating to those leases recognized in the balance sheet immediately before the date of initial application. In applying IFRS 16 for the first time, the Company has used the following practical expedients on a lease by lease basis as permitted by the standard: • contracts previously identified as leases by applying IAS 17, Leases and IFRIC 4, Determining whether an Arrangement contains a Lease , have not been re-assessed under IFRS 16, • leases with a remaining lease term less than 12 months from the date of adoption and leases of low-value assets have not been recognized as right-of-use assets and lease liabilities, • measurement of right-of-use assets at the date of adoption excluded the initial direct costs, and • use of hindsight in determining the lease term for contracts containing options to extend or terminate the lease. The adoption of the standard did not have an impact on retained earnings in the period of adoption and prior years were not restated. However, the December 31, 2018 balances previously reported for a finance lease liability and corresponding asset of $89 million and $79 million , respectively, have been reclassified from "Non-current financial debts" and "Property, Plant, & Equipment" to "Non-current lease liabilities" and "Right-of-use assets," respectively, to enhance the inter-period comparability of information presented. The sections below provide the quantitative impacts of adoption on the Company's balance sheet and income statement. Right-of-use assets Right-of-use assets as of January 1, 2019 were comprised of the following: ($ millions) January 1, 2019 Land 20 Buildings 226 Machinery & equipment and other assets 33 Total right-of-use assets (1)(2) 279 (1) Right-of-use assets of $79 million associated with prior year finance leases were included within Property, plant and equipment as of December 31, 2018 as disclosed in Note 8 to the Combined Financial Statements in the Form 20-F. (2) Right-of-use assets, related to operating leases at the date of implementation of IFRS 16, were higher than the lease liabilities at the date of implementation of IFRS 16 by $3 million , due to the net impact of prepayments and accrued lease payments recognized at December 31, 2018. This impact was offset by the lease liability related to the finance lease exceeding the corresponding capital asset by $10 million . Lease liabilities Lease liabilities of $286 million were recorded on January 1, 2019, including the $89 million finance lease previously presented as a non-current financial debt on the Company's Combined Balance Sheets as of December 31, 2018, as disclosed in Note 15 to the Combined Financial Statements in the Form 20-F. The reconciliation of lease commitments disclosed as of December 31, 2018 and lease liability recorded on January 1, 2019 is as follows: ($ millions) Operating lease commitments as of December 31, 2018 (1) 222 Effect of discounting (21 ) Operating leases discounted using the incremental borrowing rate (2) 201 Finance lease liabilities recognized as of December 31, 2018 89 Recognition exemption for short term and low-value leases (4 ) Lease liability as of January 1, 2019 286 (1) As reported in Note 23 to the Combined Financial Statements in the Form 20-F. (2) Weighted average incremental borrowing rate of 2.9% was applied at January 1, 2019, the date of implementation of IFRS 16, Leases . Right-of-use assets Right-of-use assets as of June 30, 2019 of $266 million were comprised of the following: ($ millions) Balance at June 30, 2019 Land 21 Buildings 217 Machinery & equipment and other assets 28 Total 266 Depreciation charges of $15 million and $29 million for the three and six months ended June 30, 2019 are shown in the table below by underlying class of asset: ($ millions) Three months ended June 30, 2019 Six months ended June 30, 2019 Land — 1 Buildings 10 19 Machinery & equipment and other assets 5 9 Total 15 29 Additions to right-of-use assets amounted to $16 million for the six months ended June 30, 2019 . Lease liabilities Lease liabilities totaled $273 million as of June 30, 2019 , including $53 million in current lease liabilities and $220 million in non-current lease liabilities. The maturity analysis of the lease liability as of June 30, 2019 , is as follows: ($ millions) June 30, 2019 Less than one year 53 Between one and two years 37 Between two and three years 32 Between three and four years 26 Between four and five years 15 After five years 110 Total lease liabilities 273 Additional disclosures The following table provides additional disclosures related to right-of-use assets and lease liabilities: Three months ended Six months ended ($ millions) June 30, 2019 June 30, 2019 Interest expense on lease liabilities 3 5 Expense on short-term and low value leases 1 2 Total cash outflows for leases 12 24 Thereof: Repayment of lease liabilities 11 22 |
Financial instruments
Financial instruments | 6 Months Ended |
Jun. 30, 2019 | |
Financial Instruments [Abstract] | |
Financial instruments | Financial instruments Fair value by hierarchy As required by IFRS, financial assets and liabilities recorded at fair value in the Condensed Consolidated Interim Financial Statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. There are three hierarchical levels, based on an increasing amount of subjectivity associated with the inputs to derive fair value for these assets and liabilities, which are as follows: Assets and liabilities carried at Level 1 fair value hierarchy are listed in active markets. Assets and liabilities carried at Level 2 fair value hierarchy are valued using corroborated market data. As of June 30, 2019, there were no financial assets or liabilities carried at Level 1 fair value, and Level 2 financial assets and liabilities included derivative financial instruments. As of December 31, 2018, there were no financial assets or liabilities carried at Level 1 fair value or Level 2 fair value. Level 3 inputs are unobservable for the asset or liability. The assets and liabilities generally included in Level 3 fair value hierarchy are long-term financial investments measured at fair value through Other comprehensive income ("FVOCI"), a fund investment and contingent consideration carried at fair value. The below tables summarize assets and liabilities measured at fair value on a recurring basis or at amortized cost. June 30, 2019 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 22 — 22 Fund investments — — 25 — 25 Long-term receivables from customers — — — 147 147 Non-current minimum lease payments from finance lease agreements — — — 82 82 Long-term loans, advances, security deposits and warrant options — — — 81 81 Total non-current financial assets — — 47 310 357 Current financial assets (1) Current portion of long-term receivables from customers — — — 131 131 Minimum lease payments from finance lease agreements — — — 53 53 Other receivables, security deposits and current assets — — — 145 145 VAT receivables — — — 67 67 Derivative financial instruments — 1 — — 1 Total current financial assets — 1 — 396 397 Total financial assets at fair value and amortized cost or cost — 1 47 706 754 Financial liabilities Contingent consideration payables — — (293 ) — (293 ) Non-current financial debt — — — (1,751 ) (1,751 ) Current financial debt — — — (1,759 ) (1,759 ) Derivative financial instruments — (12 ) — — (12 ) Total financial liabilities at fair value and amortized cost — (12 ) (293 ) (3,510 ) (3,815 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. December 31, 2018 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 19 — 19 Fund investments — — 27 — 27 Long-term receivables from customers — — — 164 164 Non-current minimum lease payments from finance lease agreements — — — 91 91 Long-term loans, advances, security deposits and warrant options — — — 87 87 Total non-current financial assets — — 46 342 388 Current financial assets (1) Current portion of long-term receivables from customers — — — 133 133 Minimum lease payments from finance lease agreements — — — 57 57 Other receivables, security deposits and current assets — — — 83 83 VAT receivables — — — 68 68 Derivative financial instruments — — — — — Total current financial assets — — — 341 341 Total financial assets at fair value and amortized cost or cost — — 46 683 729 Financial liabilities Contingent consideration payables — — (162 ) — (162 ) Non-current financial debt — — — — — Current financial debt — — — (47 ) (47 ) Derivative financial instruments — — — — — Total financial liabilities at fair value and amortized cost — — (162 ) (47 ) (209 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. The carrying amount is a reasonable approximation of fair value for all other financial assets and liabilities as of June 30, 2019 , including Cash & cash equivalents, Trade receivables, Income tax receivables, and Trade payables. There were no transfers of financial instruments between levels in the fair value hierarchy during the six months ended June 30, 2019 . Level 3 financial instruments measured at fair value on a recurring basis Financial assets Long-term financial investments measured at FVOCI Fund investment ($ millions) 2019 2018 2019 2018 Balance as of January 1 (1) 19 26 27 25 Additions 8 11 — — Cash receipts and payments — — — (5 ) Gains/(losses) recognized in consolidated statement of comprehensive income (7 ) — — — Unrealized gains/(losses) in income statement — — (2 ) 49 Reclassification 2 5 — — Balance as of June 30 22 42 25 69 (1) January 1, 2018 balances reflected in this table are as adjusted for adoption of IFRS 9, Financial Instruments . Financial liabilities Contingent consideration liabilities ($ millions) 2019 2018 Balance as of January 1 (162 ) (113 ) Additions (135 ) — Accretion for passage of time (9 ) (10 ) Adjustments for change in assumptions 13 — Payments — — Balance as of June 30 (293 ) (123 ) Contingent consideration additions of $135 million relate to the acquisition of PowerVision, Inc. in March 2019 as described in Note 3 of these Condensed Consolidated Interim Financial Statements. Adjustments for changes in assumptions of $13 million are primarily related to the expected timing of settlement for development milestones. As of June 30, 2019, the maximum remaining potential payments related to contingent consideration from business combinations is $630 million plus other amounts calculated as a percentage of commercial sales in cases where there is not a specified maximum contractual payment amount. Changes in the contingent consideration liability balance for the same period in prior year included $10 million in Interest expense for accretion of the liability due to the passage of time. Contingent consideration liabilities are reported in “Provisions & other non-current liabilities" and "Provisions & other current liabilities” based on the projected timing of settlement which is estimated to range from 2020 through 2029 for contingent consideration obligations as of June 30, 2019. Financial Debts The below table summarizes current and non-current Financial debts outstanding as of June 30, 2019 and December 31, 2018 . The below Financial debts are measured at amortized costs. ($ millions) June 30, 2019 December 31, 2018 Non-current financial debts Facility A 498 — Facility B 792 — Facility C 396 — Local facilities (Japan) 65 — Revolving facility — — Total non-current financial debts 1,751 — Current financial debts Bridge Facility 1,496 — Local facilities: Japan 86 — All others 129 32 Other short-term financial debts 48 15 Derivatives 12 — Total current financial debts 1,771 47 Total financial debts 3,522 47 Alcon entered into the below borrowing arrangements in connection with the Spin-Off, as described in the Form 20-F and Note 3 to these Condensed Consolidated Interim Financial Statements. Interest expense recognized for Financial debts was $27 million and $31 million in the three and six months ended June 30, 2019. Bridge Loan, Term Loan, and Revolving Credit Facilities On March 6, 2019 , the Company entered into a $1.5 billion unsecured 364-day bridge loan facility with two extension options, each for a period of 180 days (the "Bridge Facility"), a $0.5 billion unsecured three-year term loan facility ("Facility A"), a $0.8 billion unsecured five-year term loan facility ("Facility B"), a $0.4 billion (or the equivalent in EUR) unsecured five-year term loan facility ("Facility C") and a $1 billion unsecured five-year committed multicurrency revolving credit facility (the "Revolving Facility" and, together with the Bridge Facility, Facility A, Facility B and Facility C, the "Facilities"). On April 2, 2019, Alcon borrowed $3.2 billion against the bridge and other term loans. The Revolving Facility was undrawn as of June 30, 2019. The Facilities bear interest rates equal to the interest rate benchmark (prevailing Euro Interbank Offered Rate (“EURIBOR”) in the case of loans denominated in EUR, USD prevailing London Interbank Offered Rate (“LIBOR”) in the case of loans denominated in USD and CHF LIBOR in the case of loans denominated in CHF), plus an applicable margin. The Company and certain of its subsidiaries are the borrowers under the Facilities and the Company guarantees the borrowings of such subsidiaries under the Facilities. In addition, the Revolving Facility includes a mechanism through which certain subsidiaries, as approved by the lenders, can accede as a borrower. The Company is permitted to voluntarily prepay loans under the Facilities, in whole or in part, without penalty or premium subject to certain minimum prepayment amounts and the payment of accrued interest on the amount prepaid and customary breakage costs. The Bridge Facility has a mandatory prepayment provision, pursuant to which the Company would have to apply proceeds from relevant debt capital markets transactions in prepayment under the Bridge Facility. The terms of the Facilities include certain events of default and covenants customary for investment grade credit facilities, including restrictive covenants that will limit, among other things, the grant or incurrence of security interests over any of the Company’s assets, the incurrence of certain indebtedness and entry into certain fundamental change transactions. The Facilities do not contain any financial covenants. Local Bilateral Facilities In February 2019, the Company entered into a number of local bilateral facilities in different countries, with the largest share of borrowings in Japan. A total of $0.3 billion was drawn including $0.1 billion in two lines for Japan. All local bilateral lines are classified as current with a maturity date in one year or less, with the exception of one line in Japan with a maturity date in 2021 which is classified as non-current. Derivatives As of June 30, 2019, the net value of hedging positions for derivative forward contracts and swaps was $11 million , including $1 million of unrealized gains in Other current assets and $12 million of unrealized losses in Current financial debts. A master netting agreement was executed for derivatives financial instruments, however, there were no derivative financial instruments meeting the offsetting criteria under IFRS as of June 30, 2019. The Company did not hold derivative financial instruments as of December 31, 2018. Nature and extent of risks arising from financial instruments Note 24 to the Combined Financial Statements in the Form 20-F contains a summary of the nature and extent of risks arising from financial instruments. The "Foreign currency exchange rate risk" portion of the risk management policy has been updated below to reflect the Company's use of derivative financial instruments. There have been no other significant changes in the risk management policies since the date of the Form 20-F. Foreign currency exchange rate risk The Company uses the US Dollar as its reporting currency and is therefore exposed to foreign currency exchange movements, primarily in Euro, Japanese Yen, Chinese Renminbi and emerging market currencies. Fluctuations in the exchange rate between the US Dollar and other currencies can have a significant effect on both the Company’s results of operations, including reported sales and earnings, as well as on the reported value of our assets, liabilities and cash flows. This, in turn, may significantly affect the comparability of period-to-period results of operations. The Company manages its global currency exposure by engaging in hedging transactions where management deems appropriate (forward contracts and swaps). Specifically, Alcon enters into various contracts that reflect the changes in the value of foreign currency exchange rates to preserve the value of assets. |
Condensed consolidated statemen
Condensed consolidated statements of cash flows - additional details | 6 Months Ended |
Jun. 30, 2019 | |
Cash Flow Statement [Abstract] | |
Condensed consolidated statements of cash flows - additional details | Condensed consolidated statements of cash flows - additional details The below tables provide additional detail supporting select line items in the Condensed Consolidated Statements of Cash Flows. 9.1 Depreciation, amortization, impairments and fair value adjustments Six months ended ($ millions) June 30, 2019 June 30, 2018 Property, plant & equipment 129 119 Right-of-use assets 29 — Intangible assets 536 555 Financial assets 15 (59 ) Total 709 615 9.2 Change in net current assets and other operating cash flow items Six months ended ($ millions) June 30, 2019 June 30, 2018 (Increase) in inventories (57 ) (94 ) (Increase) in trade receivables (122 ) (94 ) Increase in trade payables 134 47 Net change in other current assets (73 ) 74 Net change in other current liabilities (64 ) 10 Total (182 ) (57 ) |
Equity-based compensation
Equity-based compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-Based Payment Arrangements [Abstract] | |
Equity-based compensation | Equity-based compensation On April 9, 2019 the Company adopted various equity incentive plans, under which the Company may grant awards in the form of performance stock units ("PSUs"), restricted stock awards ("RSAs"), restricted stock units ("RSUs"), stock appreciation rights ("SARs"), stock options or any other form of award at the discretion of the Board. Certain employees outside the United States also may participate in share ownership savings plans. Replacement awards As described in Note 21 to the Combined Financial Statements in the Form 20-F, prior to Spin-Off, Alcon associates participated in Novartis’ equity-based participation plans, which included stock options, restricted stock units, performance-based restricted stock units and certain share savings ownership plans. Awards granted under these plans consisted of Novartis AG restricted shares, restricted share units, performance share units, Novartis AG tradable share options, Novartis AG American Depository Receipt options, common shares or cash-settled awards. The Condensed Consolidated Income Statements reflect the compensation expense for the Novartis’ equity-based incentive plans in which the Company's employees participated for the periods prior to the Spin-Off. Concurrent with the Spin-Off, certain outstanding Novartis awards granted to Alcon associates under Novartis’ equity incentive plans vested in Novartis equity on a pro rata basis, in proportion to the amount of vesting period completed; the remaining Novartis awards were replaced with Alcon awards that have terms and vesting schedules substantially similar to the replaced Novartis awards. The pro rata vesting of Novartis awards and replacement of unvested Novartis awards with Alcon awards represents a modification under IFRS 2, Share-based Payment . Alcon measured the fair value of the awards immediately prior to and subsequent to the modification and concluded that no incremental fair value was provided to employees. Accordingly, Alcon will continue to recognize as an expense the amount of unrecognized compensation cost of the original awards over the remaining vesting periods. The Company issued 4.2 million unvested equity-based awards in connection with the modification at the time of Spin-Off and granted another 0.6 million unvested equity-based awards subsequent to the Spin-Off, resulting in 4.8 million |
Related parties transactions
Related parties transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party [Abstract] | |
Related parties transactions | Related parties transactions Prior to the Distribution, the Alcon business was a segment of Novartis such that transactions with Novartis were considered related party transactions. In connection with the separation, Alcon entered into a separation and distribution agreement as well as various other agreements governing relationships with Novartis going forward, including manufacturing and supply, transitional services, tax matters, employee matters, and patent and know-how license and brand license agreements. Information included in this Note 11 with respect to Novartis is strictly limited to related party transactions with Novartis prior to the Spin-Off on April 9, 2019. Transactions with Novartis (up to April 9, 2019) Transactions from trading activities related to products and services invoiced between other Novartis Group companies and the Company's business, have been retained in the historical condensed consolidated financial statements. The ultimate controlling parent of both, the other Novartis Group companies and the Company's business, was Novartis AG until the Spin-Off. Three months ended Six months ended ($ millions) June 30, 2019 (1) June 30, 2018 June 30, 2019 (1) June 30, 2018 Sales from the Company to former parent — 1 — 2 Contract manufacturing revenues from former parent — — 47 — Purchases of the Company from former parent — 1 19 2 ($ millions) December 31, 2018 (1) Trade and other receivables from former parent 20 Trade and other payables to former parent 85 Other financial receivables from former parent 39 Other financial liabilities to former parent 67 (1) Activity presented strictly relates to the period during which Novartis was a related party (up to April 9, 2019). Sales to and purchases from former parent Beginning in 2019, product sales to Novartis are recorded in "Other revenues" in line with the Company's contract manufacturing arrangement executed with Novartis. Other revenues in 2019 prior to the Spin-Off were $47 million . Purchases of products from Novartis under the contract manufacturing arrangement totaled $19 million in 2019 prior to the Spin-Off. Other financial receivables and payables related to former parent Prior to the Spin-Off the majority of Alcon's subsidiaries were party to Novartis cash pooling arrangements with several financial institutions to maximize the availability of cash for general operating and investing purposes. Under these cash pooling arrangements, cash balances were swept by Novartis regularly from the Company's bank accounts, and the net position with the Novartis cash pooling accounts at the end of each reporting period was reflected in combined balance sheet in "Other financial receivables from Novartis Group" or "Other financial liabilities to Novartis Group". These cash pooling arrangements were eliminated during the three months ended March 31, 2019 in anticipation of the Spin-Off and replaced with third party financing arrangements as needed. Novartis Business Services ("NBS") Charges, Corporate Overhead and Other Allocations from Novartis In 2018 and prior, Novartis Group provided the Company certain services from NBS, the shared service organization of Novartis Group, across the following service domains: human resources operations, real estate and facility services, including site security and executive protection, procurement, information technology, commercial and medical support services and financial reporting and accounting operations. The Condensed Consolidated Interim Financial Statements include the appropriate costs related to the services rendered, without profit margin, in accordance with the historical arrangements that existed between the Alcon business and NBS. Further, certain general and administrative costs of Novartis Group were not charged or allocated to the Alcon business in the past. For the purpose of the 2018 financial statements, such costs were allocated based on reasonable assumptions and estimates, based on the direct and indirect costs incurred to provide the respective service. When specific identification was not practicable, a proportional cost method was used, primarily based on sales, or headcount. These NBS charges, corporate overhead and other allocations amounted to $140 million and $276 million in the three and six months ended June 30, 2018 . During 2018, Alcon formed its own business and corporate support functions, including its own service organization, such that certain activities and associates were transferred from Novartis to Alcon, operationally effective January 1, 2019. Services provided by Novartis Group to the Company in 2019 prior to the Spin-Off totaled $40 million and primarily related to human resources operations, real estate and facility services, and information technology. Management believes that the net charges and methods used for allocations to the Company were performed on a reasonable basis and reflect the services received by the Company and the cost incurred on behalf of the Company. Although the Condensed Consolidated Interim Financial Statements reflect management's best estimate of all historical costs related to the Company, this may however not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Company been a separate entity, nor the future results of the Company as it exists following completion of the separation on April 9, 2019. |
Legal proceedings update
Legal proceedings update | 6 Months Ended |
Jun. 30, 2019 | |
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract] | |
Legal proceedings update | Legal proceedings update A number of Alcon companies are, and will likely continue to be, subject to various legal proceedings and investigations that arise from time to time, including proceedings regarding product liability, sales and marketing practices, commercial disputes, employment, and wrongful discharge, antitrust, securities, health and safety, environmental, tax, international trade, privacy, and intellectual property matters. As a result, the Company may become subject to substantial liabilities that may not be covered by insurance and could affect our business, financial position and reputation. While the Company does not believe that any of these legal proceedings will have a material adverse effect on its financial position, litigation is inherently unpredictable and large judgments sometimes occur. As a consequence, the Company may in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations or cash flow. Note 16 to the Combined Financial Statements in the Form 20-F contains a summary of significant legal proceedings to which the Company or its subsidiaries were a party as of the date of the Form 20-F. The following is a summary as of August 20, 2019 of significant developments in those proceedings as well as any new significant proceedings commenced since the date of the Form 20-F. MIVS platform patent infringement litigation In June 2015, Johns Hopkins University ("JHU") filed a patent infringement lawsuit against certain Alcon entities alleging that the use of certain Alcon surgical products, principally by third parties, infringes a patent directed to certain methods of ocular surgery. In March 2019, Alcon and JHU entered into a settlement agreement in full settlement of all claims relating to this proceeding. LenSx laser system and WaveLight FS200 laser patent infringement litigations Two consolidated cases were filed against Alcon claiming that the LenSx laser system and WaveLight FS200 femtosecond laser infringe two US patents expiring in 2018 and 2030. The district court entered summary judgment for Alcon, and the plaintiff appealed to the US Court of Appeals for the Federal Circuit. The court of appeals affirmed the district court’s judgment for Alcon on August 8, 2019. In addition to the matters described above, there have been other developments in the other legal matters described in Note 16 to the Combined Financial Statements in the Form 20-F. However, the developments during the first six months of 2019 do not significantly affect the assessment of management concerning the adequacy of the total provisions recorded for legal proceedings. |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2019 | |
Events After Reporting Period [Abstract] | |
Subsequent events | Subsequent events These unaudited Condensed Consolidated Interim Financial Statements were authorized for issue by the Company's Audit & Risk Committee on August 20, 2019. |
Selected accounting policies (P
Selected accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
Statement of IFRS compliance | The Company's principal accounting policies are set out in Note 3 to the Combined Financial Statements in the Form 20-F and conform with IFRS as issued by the IASB. The presentation of financial statements requires management to make subjective and complex judgments that affect the reported amounts. Because of the inherent uncertainties, actual outcomes and results may differ from management's assumptions and estimates. As discussed in Note 3 to the Combined Financial Statements in the Form 20-F, Goodwill, the Alcon brand name and acquired In-process research & development projects are reviewed for impairment at least annually and these, as well as all other investments in intangible assets, are reviewed for impairment whenever an event or decision occurs that raises concern about their balance sheet carrying value. Goodwill and other intangible assets represent a significant amount of total assets on the Company's consolidated balance sheets. Impairment testing may lead to potentially significant impairment charges in the future which could have a materially adverse impact on the Company's results of operations and financial condition. |
Financial assets | Financial assets The "Financial assets" portion of the accounting policy was expanded in 2019 to include derivative instruments, as follows: Derivative financial instruments are initially recognized in the balance sheet at fair value and are remeasured to their current fair value at the end of each subsequent reporting period. The valuation of forward exchange rate contracts and foreign exchange swaps are based on the discounted cash flow model, using interest curves and spot rates at the reporting date as observable inputs. Unsettled forward contracts and swaps are measured at fair value at month-end with changes in fair value recorded to the income statement as unrealized gains or losses in "Other financial income & expense". Settled forward contracts and swaps are measured at maturity date at fair value with corresponding realized gains or losses recognized in the income statement in "Other financial income & expense". No hedge accounting is applied for these arrangements. |
Other revenues | Other revenues The "Other revenues" portion of the "Revenue recognition" accounting policy was expanded in 2019 to include accounting for the Company's contract manufacturing arrangement with Novartis, as follows: "Other revenues" mainly include revenue from contract manufacturing services provided to the Company's former parent which are recognized over time as the service obligations are completed. Associated costs incurred are recognized in "Cost of other revenues". |
Earnings (loss) per share | Earnings (loss) per share "Basic earnings (loss) per share" is based on the weighted average number of common shares outstanding. "Diluted earnings (loss) per share" is based on the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. |
IFRS 16, Leases effective as of January 1, 2019 | IFRS 16, Leases effective as of January 1, 2019 Effective January 1, 2019, Alcon implemented IFRS 16, Leases , which provides a new model for lessee accounting in which substantially all leases are now recognized on the balance sheet as right-of-use assets with corresponding lease liabilities. The standard replaces IAS 17, Leases . Right-of-use assets are recognized based on the amount of the lease liability adjusted for payments made before the lease commencement date, lease incentives and other items related to the lease agreements. Lease liabilities are recognized based on the net present value of remaining lease payments. The Company has applied the practical expedients discussed in Note 7 of these Condensed Consolidated Interim Financial Statements in the adoption of the standard. Upon adoption of the new standard, a portion of the annual operating lease costs previously fully recognized as a functional expense is recorded as interest expense. In addition, the portion of the lease payments representing a reduction of the lease liability is recognized in the cash flow statement as an outflow from financing activities, which was previously fully recognized as an outflow from operating activities for operating leases. These effects of the adoption and impacts on the income statements and statements of cash flows are further discussed in Note 7 of these Condensed Consolidated Interim Financial Statements. IFRS 16 substantially carries forward the lessor accounting requirements under IAS 17 such that adoption of the standard did not have a significant impact upon the Company's accounting for surgical equipment leases where the Company is the lessor and for which the Company's accounting policy is included in the "Revenue recognition" accounting policy in Note 3 to the Combined Financial Statements in the Form 20-F. The Company has updated the following accounting policy, effective January 1, 2019, as a result of the adoption of the new standard: |
Leases | Leases As lessee, the Company assesses whether a contract contains a lease at inception of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a corresponding lease liability for all arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases for which Alcon has elected the recognition exemptions allowed under IFRS 16. Right-of-use assets "Right-of-use assets" are initially recognized at cost, which is comprised of the amount of the initial measurement of the corresponding lease liabilities, adjusted for any lease payments made at or prior to the commencement date of the lease, lease incentives received and initial direct costs incurred, as well as any expected costs for obligations to dismantle and remove Right-of-use assets when they are no longer used. Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful life of the right-of-use asset or the end of the lease term. Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not be recoverable using cash flow projections for the useful life. Lease liabilities "Lease liabilities" are accounted for at amortized cost and are initially measured at the present value of future lease payments and are classified as current or non-current based on the due dates of the underlying principal payments. In determining the lease term, the Company evaluates the renewal options and termination options reasonably certain to be exercised. Lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, the incremental borrowing rate Alcon would be expected to pay within the respective markets, on a borrowing with a similar term and security. Interest in the period is recorded within "interest expense" in the Company's consolidated income statements. Lease liabilities are remeasured for changes in estimated lease term, future lease payments arising from a change in an index or rate, amounts expected to be payable under a residual value guarantee, or in assessment of whether the Company will exercise a purchase, extension or termination option. Changes to initial lease contract terms are assessed to determine their impact on the scope of lease, and any modifications increasing the scope of the lease are treated as new contracts under the initial measurement principles, while modifications that do not increase or that decrease the scope of the lease result in an adjustment to the Right-of-use asset which is remeasured as of the date of the modification. Principal payments made on Lease liabilities and any initial direct costs paid are classified as financing cash outflows, while interest payments are classified as operating cash outflows. Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in the consolidated income statement and are classified as cash flows from operating activities. Short-term leases are leases with a lease term of twelve months in duration or less. |
Segmentation of key figures (Ta
Segmentation of key figures (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Segments [Abstract] | |
Disclosure of operating segments | Segmentation - Consolidated income statements Three months ended June 30, 2019 and 2018 Surgical Vision Care Company ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net sales to third parties 1,051 1,030 812 789 1,863 1,819 Sales to former parent — 1 — — — 1 Other revenues — — 40 — 40 — Net sales and other revenue 1,051 1,031 852 789 1,903 1,820 Segment contribution 217 219 135 131 352 350 Amortization of intangible assets (270 ) (258 ) Impairment charges on intangible assets — (39 ) General & administration (corporate) (62 ) (49 ) Other (expense)/income, net (73 ) 34 Operating (loss)/income (53 ) 38 Interest expense (35 ) (6 ) Other financial income & expense (8 ) (8 ) (Loss)/Income before taxes (96 ) 24 Six months ended June 30, 2019 and 2018 Surgical Vision Care Company ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Net sales to third parties 2,051 2,007 1,589 1,591 3,640 3,598 Sales to former parent — 2 — — — 2 Other revenues — — 87 — 87 — Net sales and other revenues 2,051 2,009 1,676 1,591 3,727 3,600 Segment contribution 440 422 282 314 722 736 Amortization of intangible assets (536 ) (516 ) Impairment charges on intangible assets — (39 ) General & administration (corporate) (116 ) (100 ) Other (expense)/income, net (171 ) 30 Operating (loss)/income (101 ) 111 Interest expense (44 ) (12 ) Other financial income & expense (16 ) (14 ) (Loss)/Income before taxes (161 ) 85 Segmentation - Additional balance sheet disclosure Surgical Vision Care Not allocated (1) Total ($ millions) Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Jun 30, 2019 Dec 31, 2018 Goodwill 4,544 4,538 4,361 4,361 — — 8,905 8,899 Intangible assets other than goodwill 6,181 6,053 1,558 1,646 2,980 2,980 10,719 10,679 (1) Alcon brand name. |
Disclosure of products and services | Net sales by segment Three months ended Six months ended ($ millions) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Implantables 300 298 585 577 Consumables 588 578 1,139 1,119 Equipment/other 163 154 327 311 Total Surgical 1,051 1,030 2,051 2,007 Contact lenses 493 478 991 987 Ocular health 319 311 598 604 Total Vision Care 812 789 1,589 1,591 Net sales to third parties 1,863 1,819 3,640 3,598 |
Disclosure of geographical areas | Net sales by region (1) Three months ended Six months ended ($ millions unless indicated otherwise) June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 United States 779 42 % 750 41 % 1,516 42 % 1,462 41 % International 1,084 58 % 1,069 59 % 2,124 58 % 2,136 59 % Net sales to third parties 1,863 100 % 1,819 100 % 3,640 100 % 3,598 100 % (1) Net sales to third parties by location of third-party customer. |
Right-of-use assets and Lease_2
Right-of-use assets and Lease liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Disclosure of quantitative information about right-of-use assets | Right-of-use assets as of January 1, 2019 were comprised of the following: ($ millions) January 1, 2019 Land 20 Buildings 226 Machinery & equipment and other assets 33 Total right-of-use assets (1)(2) 279 (1) Right-of-use assets of $79 million associated with prior year finance leases were included within Property, plant and equipment as of December 31, 2018 as disclosed in Note 8 to the Combined Financial Statements in the Form 20-F. (2) Right-of-use assets, related to operating leases at the date of implementation of IFRS 16, were higher than the lease liabilities at the date of implementation of IFRS 16 by $3 million , due to the net impact of prepayments and accrued lease payments recognized at December 31, 2018. This impact was offset by the lease liability related to the finance lease exceeding the corresponding capital asset by $10 million . Right-of-use assets as of June 30, 2019 of $266 million were comprised of the following: ($ millions) Balance at June 30, 2019 Land 21 Buildings 217 Machinery & equipment and other assets 28 Total 266 Depreciation charges of $15 million and $29 million for the three and six months ended June 30, 2019 are shown in the table below by underlying class of asset: ($ millions) Three months ended June 30, 2019 Six months ended June 30, 2019 Land — 1 Buildings 10 19 Machinery & equipment and other assets 5 9 Total 15 29 |
Disclosure of additional information about leasing activities for lessee | The following table provides additional disclosures related to right-of-use assets and lease liabilities: Three months ended Six months ended ($ millions) June 30, 2019 June 30, 2019 Interest expense on lease liabilities 3 5 Expense on short-term and low value leases 1 2 Total cash outflows for leases 12 24 Thereof: Repayment of lease liabilities 11 22 The reconciliation of lease commitments disclosed as of December 31, 2018 and lease liability recorded on January 1, 2019 is as follows: ($ millions) Operating lease commitments as of December 31, 2018 (1) 222 Effect of discounting (21 ) Operating leases discounted using the incremental borrowing rate (2) 201 Finance lease liabilities recognized as of December 31, 2018 89 Recognition exemption for short term and low-value leases (4 ) Lease liability as of January 1, 2019 286 (1) As reported in Note 23 to the Combined Financial Statements in the Form 20-F. (2) Weighted average incremental borrowing rate of 2.9% was applied at January 1, 2019, the date of implementation of IFRS 16, Leases . |
Disclosure of maturity analysis of lease payments | The maturity analysis of the lease liability as of June 30, 2019 , is as follows: ($ millions) June 30, 2019 Less than one year 53 Between one and two years 37 Between two and three years 32 Between three and four years 26 Between four and five years 15 After five years 110 Total lease liabilities 273 |
Financial instruments (Tables)
Financial instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Financial Instruments [Abstract] | |
Disclosure of fair value measurement of assets | The below tables summarize assets and liabilities measured at fair value on a recurring basis or at amortized cost. June 30, 2019 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 22 — 22 Fund investments — — 25 — 25 Long-term receivables from customers — — — 147 147 Non-current minimum lease payments from finance lease agreements — — — 82 82 Long-term loans, advances, security deposits and warrant options — — — 81 81 Total non-current financial assets — — 47 310 357 Current financial assets (1) Current portion of long-term receivables from customers — — — 131 131 Minimum lease payments from finance lease agreements — — — 53 53 Other receivables, security deposits and current assets — — — 145 145 VAT receivables — — — 67 67 Derivative financial instruments — 1 — — 1 Total current financial assets — 1 — 396 397 Total financial assets at fair value and amortized cost or cost — 1 47 706 754 Financial liabilities Contingent consideration payables — — (293 ) — (293 ) Non-current financial debt — — — (1,751 ) (1,751 ) Current financial debt — — — (1,759 ) (1,759 ) Derivative financial instruments — (12 ) — — (12 ) Total financial liabilities at fair value and amortized cost — (12 ) (293 ) (3,510 ) (3,815 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. December 31, 2018 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 19 — 19 Fund investments — — 27 — 27 Long-term receivables from customers — — — 164 164 Non-current minimum lease payments from finance lease agreements — — — 91 91 Long-term loans, advances, security deposits and warrant options — — — 87 87 Total non-current financial assets — — 46 342 388 Current financial assets (1) Current portion of long-term receivables from customers — — — 133 133 Minimum lease payments from finance lease agreements — — — 57 57 Other receivables, security deposits and current assets — — — 83 83 VAT receivables — — — 68 68 Derivative financial instruments — — — — — Total current financial assets — — — 341 341 Total financial assets at fair value and amortized cost or cost — — 46 683 729 Financial liabilities Contingent consideration payables — — (162 ) — (162 ) Non-current financial debt — — — — — Current financial debt — — — (47 ) (47 ) Derivative financial instruments — — — — — Total financial liabilities at fair value and amortized cost — — (162 ) (47 ) (209 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. Financial assets Long-term financial investments measured at FVOCI Fund investment ($ millions) 2019 2018 2019 2018 Balance as of January 1 (1) 19 26 27 25 Additions 8 11 — — Cash receipts and payments — — — (5 ) Gains/(losses) recognized in consolidated statement of comprehensive income (7 ) — — — Unrealized gains/(losses) in income statement — — (2 ) 49 Reclassification 2 5 — — Balance as of June 30 22 42 25 69 (1) January 1, 2018 balances reflected in this table are as adjusted for adoption of IFRS 9, Financial Instruments . |
Disclosure of fair value measurement of liabilities | The below tables summarize assets and liabilities measured at fair value on a recurring basis or at amortized cost. June 30, 2019 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 22 — 22 Fund investments — — 25 — 25 Long-term receivables from customers — — — 147 147 Non-current minimum lease payments from finance lease agreements — — — 82 82 Long-term loans, advances, security deposits and warrant options — — — 81 81 Total non-current financial assets — — 47 310 357 Current financial assets (1) Current portion of long-term receivables from customers — — — 131 131 Minimum lease payments from finance lease agreements — — — 53 53 Other receivables, security deposits and current assets — — — 145 145 VAT receivables — — — 67 67 Derivative financial instruments — 1 — — 1 Total current financial assets — 1 — 396 397 Total financial assets at fair value and amortized cost or cost — 1 47 706 754 Financial liabilities Contingent consideration payables — — (293 ) — (293 ) Non-current financial debt — — — (1,751 ) (1,751 ) Current financial debt — — — (1,759 ) (1,759 ) Derivative financial instruments — (12 ) — — (12 ) Total financial liabilities at fair value and amortized cost — (12 ) (293 ) (3,510 ) (3,815 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. December 31, 2018 ($ millions) Level 1 Level 2 Level 3 Valued at amortized cost or cost (2) Total Non-current financial assets Long-term financial investments measured at FVOCI — — 19 — 19 Fund investments — — 27 — 27 Long-term receivables from customers — — — 164 164 Non-current minimum lease payments from finance lease agreements — — — 91 91 Long-term loans, advances, security deposits and warrant options — — — 87 87 Total non-current financial assets — — 46 342 388 Current financial assets (1) Current portion of long-term receivables from customers — — — 133 133 Minimum lease payments from finance lease agreements — — — 57 57 Other receivables, security deposits and current assets — — — 83 83 VAT receivables — — — 68 68 Derivative financial instruments — — — — — Total current financial assets — — — 341 341 Total financial assets at fair value and amortized cost or cost — — 46 683 729 Financial liabilities Contingent consideration payables — — (162 ) — (162 ) Non-current financial debt — — — — — Current financial debt — — — (47 ) (47 ) Derivative financial instruments — — — — — Total financial liabilities at fair value and amortized cost — — (162 ) (47 ) (209 ) (1) Current financial assets referenced in the above table are recorded in Other current assets. (2) Carrying amount is a reasonable approximation of fair value. Financial liabilities Contingent consideration liabilities ($ millions) 2019 2018 Balance as of January 1 (162 ) (113 ) Additions (135 ) — Accretion for passage of time (9 ) (10 ) Adjustments for change in assumptions 13 — Payments — — Balance as of June 30 (293 ) (123 ) |
Disclosure of current and non-current financial debts outstanding | The below table summarizes current and non-current Financial debts outstanding as of June 30, 2019 and December 31, 2018 . The below Financial debts are measured at amortized costs. ($ millions) June 30, 2019 December 31, 2018 Non-current financial debts Facility A 498 — Facility B 792 — Facility C 396 — Local facilities (Japan) 65 — Revolving facility — — Total non-current financial debts 1,751 — Current financial debts Bridge Facility 1,496 — Local facilities: Japan 86 — All others 129 32 Other short-term financial debts 48 15 Derivatives 12 — Total current financial debts 1,771 47 Total financial debts 3,522 47 |
Condensed consolidated statem_2
Condensed consolidated statements of cash flows - additional details (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Cash Flow Statement [Abstract] | |
Disclosure of detailed information about cash flow statement line items | Depreciation, amortization, impairments and fair value adjustments Six months ended ($ millions) June 30, 2019 June 30, 2018 Property, plant & equipment 129 119 Right-of-use assets 29 — Intangible assets 536 555 Financial assets 15 (59 ) Total 709 615 |
Disclosure of detailed information of change in net current assets and other operating cash flow items | Change in net current assets and other operating cash flow items Six months ended ($ millions) June 30, 2019 June 30, 2018 (Increase) in inventories (57 ) (94 ) (Increase) in trade receivables (122 ) (94 ) Increase in trade payables 134 47 Net change in other current assets (73 ) 74 Net change in other current liabilities (64 ) 10 Total (182 ) (57 ) |
Related parties transactions (T
Related parties transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party [Abstract] | |
Disclosure of transactions between related parties | Three months ended Six months ended ($ millions) June 30, 2019 (1) June 30, 2018 June 30, 2019 (1) June 30, 2018 Sales from the Company to former parent — 1 — 2 Contract manufacturing revenues from former parent — — 47 — Purchases of the Company from former parent — 1 19 2 ($ millions) December 31, 2018 (1) Trade and other receivables from former parent 20 Trade and other payables to former parent 85 Other financial receivables from former parent 39 Other financial liabilities to former parent 67 (1) Activity presented strictly relates to the period during which Novartis was a related party (up to April 9, 2019). |
Basis of preparation (Details)
Basis of preparation (Details) | Apr. 09, 2019 |
Novartis AG [Member] | |
Disclosure of initial application of standards or interpretations [line items] | |
Shares received in spin-off | 0.2 |
Significant transactions (Detai
Significant transactions (Details) - USD ($) $ in Millions | Apr. 02, 2019 | Mar. 13, 2019 | Dec. 17, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Apr. 09, 2019 | Dec. 31, 2018 | Dec. 19, 2018 |
Disclosure of detailed information about business combination [line items] | ||||||||
Proceeds from borrowings | $ 3,200 | |||||||
Financial debts | 3,500 | $ 3,522 | $ 47 | |||||
Cash paid for intercompany transactions related to spin-off | $ 3,100 | |||||||
Net assets | $ 20,000 | |||||||
Consideration paid (received) | $ 283 | $ 0 | ||||||
PowerVision, Inc. [Member] | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Percentage of voting equity interests acquired | 100.00% | |||||||
Consideration transferred, acquisition-date fair value | $ 424 | |||||||
Cash transferred | 289 | |||||||
Contingent liabilities recognised as of acquisition date | 135 | |||||||
Identifiable assets acquired (liabilities assumed) | 418 | |||||||
Identifiable intangible assets recognised as of acquisition date | 505 | |||||||
Deferred tax liabilities recognised as of acquisition date | 93 | |||||||
Consideration paid (received) | 283 | |||||||
Other net assets recognised as of acquisition date | 6 | |||||||
Goodwill recognised as of acquisition date | $ 6 | |||||||
TrueVision Systems, Inc. [Member] | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Percentage of voting equity interests acquired | 100.00% | |||||||
Consideration transferred, acquisition-date fair value | $ 146 | |||||||
Cash transferred | 110 | |||||||
Contingent liabilities recognised as of acquisition date | 36 | |||||||
Identifiable assets acquired (liabilities assumed) | 144 | |||||||
Identifiable intangible assets recognised as of acquisition date | 172 | |||||||
Deferred tax liabilities recognised as of acquisition date | 29 | |||||||
Other net assets recognised as of acquisition date | 1 | |||||||
Goodwill recognised as of acquisition date | $ 2 | |||||||
Tear Film Innovations, Inc. [Member] | ||||||||
Disclosure of detailed information about business combination [line items] | ||||||||
Percentage of voting equity interests acquired | 100.00% | |||||||
Consideration transferred, acquisition-date fair value | $ 145 | |||||||
Cash transferred | 79 | |||||||
Contingent liabilities recognised as of acquisition date | 66 | |||||||
Identifiable assets acquired (liabilities assumed) | 143 | |||||||
Identifiable intangible assets recognised as of acquisition date | 174 | |||||||
Deferred tax liabilities recognised as of acquisition date | 37 | |||||||
Consideration paid (received) | 5 | |||||||
Other net assets recognised as of acquisition date | 1 | |||||||
Goodwill recognised as of acquisition date | $ 2 |
Segmentation of key figures - N
Segmentation of key figures - Narrative (Details) | Jun. 30, 2019segment |
Operating Segments [Abstract] | |
Number of reporting segments | 2 |
Segmentation of key figures - C
Segmentation of key figures - Consolidated income statements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure of operating segments [line items] | ||||
Net sales to third parties | $ 1,863 | $ 1,819 | $ 3,640 | $ 3,598 |
Sales to former parent | 0 | 1 | 0 | 2 |
Other revenues | 40 | 0 | 87 | 0 |
Net sales and other revenues | 1,903 | 1,820 | 3,727 | 3,600 |
Segment contribution | 352 | 350 | 722 | 736 |
Amortization of intangible assets | (270) | (258) | (536) | (516) |
Impairment charges on intangible assets | 0 | (39) | 0 | (39) |
General & administration (corporate) | (62) | (49) | (116) | (100) |
Other (expense)/income, net | (73) | 34 | (171) | 30 |
Operating (loss)/income | (53) | 38 | (101) | 111 |
Interest expense | (35) | (6) | (44) | (12) |
Other financial income & expense | (8) | (8) | (16) | (14) |
(Loss)/income before taxes | (96) | 24 | (161) | 85 |
Surgical [Member] | ||||
Disclosure of operating segments [line items] | ||||
Net sales to third parties | 1,051 | 1,030 | 2,051 | 2,007 |
Sales to former parent | 0 | 1 | 0 | 2 |
Other revenues | 0 | 0 | 0 | 0 |
Net sales and other revenues | 1,051 | 1,031 | 2,051 | 2,009 |
Segment contribution | 217 | 219 | 440 | 422 |
Vision Care [Member] | ||||
Disclosure of operating segments [line items] | ||||
Net sales to third parties | 812 | 789 | 1,589 | 1,591 |
Sales to former parent | 0 | 0 | 0 | 0 |
Other revenues | 40 | 0 | 87 | 0 |
Net sales and other revenues | 852 | 789 | 1,676 | 1,591 |
Segment contribution | $ 135 | $ 131 | $ 282 | $ 314 |
Segmentation of key figures - A
Segmentation of key figures - Additional balance sheet disclosure (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Disclosure of operating segments [line items] | ||
Goodwill | $ 8,905 | $ 8,899 |
Intangible assets other than goodwill | 10,719 | 10,679 |
Operating segments [member] | Surgical [Member] | ||
Disclosure of operating segments [line items] | ||
Goodwill | 4,544 | 4,538 |
Intangible assets other than goodwill | 6,181 | 6,053 |
Operating segments [member] | Vision Care [Member] | ||
Disclosure of operating segments [line items] | ||
Goodwill | 4,361 | 4,361 |
Intangible assets other than goodwill | 1,558 | 1,646 |
Not allocated [member] | ||
Disclosure of operating segments [line items] | ||
Goodwill | 0 | 0 |
Intangible assets other than goodwill | $ 2,980 | $ 2,980 |
Segmentation of key figures -_2
Segmentation of key figures - Net sales by business franchise (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure of products and services [line items] | ||||
Net sales to third parties | $ 1,863 | $ 1,819 | $ 3,640 | $ 3,598 |
Surgical [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 1,051 | 1,030 | 2,051 | 2,007 |
Surgical [Member] | Implantables [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 300 | 298 | 585 | 577 |
Surgical [Member] | Consumables [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 588 | 578 | 1,139 | 1,119 |
Surgical [Member] | Equipment & other [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 163 | 154 | 327 | 311 |
Vision Care [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 812 | 789 | 1,589 | 1,591 |
Vision Care [Member] | Contact lenses [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | 493 | 478 | 991 | 987 |
Vision Care [Member] | Ocular health [Member] | ||||
Disclosure of products and services [line items] | ||||
Net sales to third parties | $ 319 | $ 311 | $ 598 | $ 604 |
Segmentation of key figures -_3
Segmentation of key figures - Net sales by region (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure of geographical areas [line items] | ||||
Net sales to third parties | $ 1,863 | $ 1,819 | $ 3,640 | $ 3,598 |
Percentage of entity's revenue | 100.00% | 100.00% | 100.00% | 100.00% |
United States [member] | ||||
Disclosure of geographical areas [line items] | ||||
Net sales to third parties | $ 779 | $ 750 | $ 1,516 | $ 1,462 |
Percentage of entity's revenue | 42.00% | 41.00% | 42.00% | 41.00% |
International [member] | ||||
Disclosure of geographical areas [line items] | ||||
Net sales to third parties | $ 1,084 | $ 1,069 | $ 2,124 | $ 2,136 |
Percentage of entity's revenue | 58.00% | 59.00% | 58.00% | 59.00% |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Income Taxes [Abstract] | |
Tax effect from change in tax rate | $ 301 |
Earnings_(Loss) per share (Deta
Earnings/(Loss) per share (Details) - shares | Apr. 09, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Earnings per share [abstract] | |||||
Number of shares distributed in spin-off (in shares) | 488,200,000 | ||||
Adjusted weighted average number of ordinary shares outstanding (in shares) | 488,200,000 | 488,200,000 | 488,200,000 | 488,200,000 | |
Antidilutive securities excluded from computation (in shares) | 1,800,000 | 900,000 |
Right-of-use assets and Lease_3
Right-of-use assets and Lease liabilities - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2019 | Apr. 02, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Disclosure of finance lease and operating lease by lessee [line items] | |||||
Financial debts | $ 3,522 | $ 3,522 | $ 3,500 | $ 47 | |
Property, plant & equipment | 2,887 | 2,887 | 2,800 | ||
Lease liabilities | 273 | 273 | $ 286 | ||
Right-of-use assets | 266 | 266 | $ 279 | 79 | |
Depreciation, right-of-use assets | 15 | 29 | |||
Additions to right-of-use assets | 16 | ||||
Current lease liabilities | 53 | 53 | 0 | ||
Non-current lease liabilities | 220 | 220 | 89 | ||
Interest expense on lease liabilities | 3 | 5 | |||
Total cash outflows for leases | $ 12 | $ 24 | |||
Previously stated [member] | |||||
Disclosure of finance lease and operating lease by lessee [line items] | |||||
Financial debts | 89 | ||||
Property, plant & equipment | $ 79 |
Right-of-use assets and Lease_4
Right-of-use assets and Lease liabilities - Components of Right-of-Use Assets (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disclosure of quantitative information about right-of-use assets [line items] | |||
Right-of-use assets | $ 266 | $ 279 | $ 79 |
Property, plant & equipment | 2,887 | 2,800 | |
Right-of-use assets, revaluation surplus | 3 | ||
Lease liability in excess of capital | 10 | ||
Previously stated [member] | |||
Disclosure of quantitative information about right-of-use assets [line items] | |||
Property, plant & equipment | $ 79 | ||
Land [member] | |||
Disclosure of quantitative information about right-of-use assets [line items] | |||
Right-of-use assets | 21 | 20 | |
Buildings [member] | |||
Disclosure of quantitative information about right-of-use assets [line items] | |||
Right-of-use assets | 217 | 226 | |
Machinery & equipment and other assets [member] | |||
Disclosure of quantitative information about right-of-use assets [line items] | |||
Right-of-use assets | $ 28 | $ 33 |
Right-of-use assets and Lease_5
Right-of-use assets and Lease liabilities - Reconciliation of Lease Commitments (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating leases discounted using the incremental borrowing rate | $ 201 | ||
Minimum finance lease payments payable | 89 | ||
Recognition exemption for short term and low-value leases | (4) | ||
Lease liability as of January 1, 2019 | $ 273 | $ 286 | |
Weighted average lessee's incremental borrowing rate applied to lease liabilities recognised at date of initial application of IFRS 16 | 2.90% | ||
Previously stated [member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating leases discounted using the incremental borrowing rate | 222 | ||
Increase (decrease) due to changes in accounting policy required by IFRSs [member] | |||
Disclosure of finance lease and operating lease by lessee [line items] | |||
Operating leases discounted using the incremental borrowing rate | $ 21 |
Right-of-use assets and Lease_6
Right-of-use assets and Lease liabilities - Components of Right-of-Use Assets Depreciation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Disclosure of quantitative information about right-of-use assets [line items] | ||
Depreciation, right-of-use assets | $ 15 | $ 29 |
Land [member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Depreciation, right-of-use assets | 0 | 1 |
Buildings [member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Depreciation, right-of-use assets | 10 | 19 |
Machinery & equipment and other assets [member] | ||
Disclosure of quantitative information about right-of-use assets [line items] | ||
Depreciation, right-of-use assets | $ 5 | $ 9 |
Right-of-use assets and Lease_7
Right-of-use assets and Lease liabilities - Maturity of Lease Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | $ 273 | $ 286 |
Less than one year [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | 53 | |
Between one and two years [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | 37 | |
Between two and three years [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | 32 | |
Between three and four years [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | 26 | |
Between four and five years [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | 15 | |
After five years [member] | ||
Disclosure of maturity analysis of lease payments [Line Items] | ||
Lease liabilities | $ 110 |
Right-of-use assets and Lease_8
Right-of-use assets and Lease liabilities - Additional Disclosures Related to Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Leases [Abstract] | |||
Interest expense on lease liabilities | $ 3 | $ 5 | |
Expense on short-term and low value leases | 1 | 2 | |
Total cash outflows for leases | 12 | 24 | |
Thereof: Repayment of lease liabilities | $ 11 | $ 22 | $ 0 |
Financial instruments - Schedul
Financial instruments - Schedule of fair value of assets and liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | $ 357 | $ 388 | ||
Current financial assets | 397 | 341 | ||
Total financial assets at fair value and amortized cost or cost | 754 | 729 | ||
Financial liabilities | (3,815) | (209) | ||
Contingent consideration payables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (293) | (162) | $ (123) | $ (113) |
Non-current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (1,751) | 0 | ||
Current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (1,759) | (47) | ||
Derivative financial instruments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (12) | 0 | ||
Financial liabilities at amortised cost, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (3,510) | (47) | ||
Financial liabilities at amortised cost, category [member] | Contingent consideration payables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Financial liabilities at amortised cost, category [member] | Non-current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (1,751) | 0 | ||
Financial liabilities at amortised cost, category [member] | Current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (1,759) | (47) | ||
Financial liabilities at amortised cost, category [member] | Derivative financial instruments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 22 | 19 | ||
Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 25 | 27 | ||
Receivables from customers [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 147 | 164 | ||
Current financial assets | 131 | 133 | ||
Minimum lease payments from finance lease agreements [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 82 | 91 | ||
Current financial assets | 53 | 57 | ||
Financial assets, other [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 81 | 87 | ||
Current financial assets | 145 | 83 | ||
VAT receivables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 67 | 68 | ||
Derivatives [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 1 | 0 | ||
Financial assets at amortised cost, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 310 | 342 | ||
Current financial assets | 396 | 341 | ||
Total financial assets at fair value and amortized cost or cost | 706 | 683 | ||
Financial assets at amortised cost, category [member] | Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Financial assets at amortised cost, category [member] | Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Financial assets at amortised cost, category [member] | Receivables from customers [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 147 | 164 | ||
Current financial assets | 131 | 133 | ||
Financial assets at amortised cost, category [member] | Minimum lease payments from finance lease agreements [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 82 | 91 | ||
Current financial assets | 53 | 57 | ||
Financial assets at amortised cost, category [member] | Financial assets, other [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 81 | 87 | ||
Current financial assets | 145 | 83 | ||
Financial assets at amortised cost, category [member] | VAT receivables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 67 | 68 | ||
Financial assets at amortised cost, category [member] | Derivatives [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Contingent consideration payables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Non-current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Derivative financial instruments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Total financial assets at fair value and amortized cost or cost | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Receivables from customers [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Minimum lease payments from finance lease agreements [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial assets, other [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | VAT receivables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 0 | 0 | ||
Level 1 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Derivatives [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (12) | 0 | ||
Level 2 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Contingent consideration payables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Non-current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Derivative financial instruments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (12) | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 1 | 0 | ||
Total financial assets at fair value and amortized cost or cost | 1 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Receivables from customers [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Minimum lease payments from finance lease agreements [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial assets, other [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | VAT receivables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 0 | 0 | ||
Level 2 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Derivatives [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 1 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (293) | (162) | ||
Level 3 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Contingent consideration payables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | (293) | (162) | ||
Level 3 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Non-current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Current financial debt [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial liabilities at fair value through profit or loss, category [member] | Derivative financial instruments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Financial liabilities | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Total financial assets at fair value and amortized cost or cost | 22 | 19 | 42 | 26 |
Level 3 of fair value hierarchy [member] | Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Total financial assets at fair value and amortized cost or cost | 25 | 27 | $ 69 | $ 25 |
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 47 | 46 | ||
Current financial assets | 0 | 0 | ||
Total financial assets at fair value and amortized cost or cost | 47 | 46 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial investments measured at FVOCI [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 22 | 19 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Fund investments [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 25 | 27 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Receivables from customers [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Minimum lease payments from finance lease agreements [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Financial assets, other [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Non-current financial assets | 0 | 0 | ||
Current financial assets | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | VAT receivables [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | 0 | 0 | ||
Level 3 of fair value hierarchy [member] | Financial assets at fair value through profit or loss, category [member] | Derivatives [member] | ||||
Disclosure of fair value measurement of assets and liabilities [Line Items] | ||||
Current financial assets | $ 0 | $ 0 |
Financial instruments - Activit
Financial instruments - Activity in level 3 financial assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in fair value measurement, assets [abstract] | ||
Balance as of January 1 | $ 729 | |
Balance as of June 30 | 754 | |
Fund investments [member] | Level 3 of fair value hierarchy [member] | ||
Changes in fair value measurement, assets [abstract] | ||
Balance as of January 1 | 27 | $ 25 |
Additions | 0 | 0 |
Cash receipts and payments | 0 | (5) |
Gains/(losses) recognized in consolidated statement of comprehensive income | 0 | 0 |
Unrealized gains/(losses) in income statement | (2) | 49 |
Reclassification | 0 | 0 |
Balance as of June 30 | 25 | 69 |
Financial investments measured at FVOCI [member] | Level 3 of fair value hierarchy [member] | ||
Changes in fair value measurement, assets [abstract] | ||
Balance as of January 1 | 19 | 26 |
Additions | 8 | 11 |
Cash receipts and payments | 0 | 0 |
Gains/(losses) recognized in consolidated statement of comprehensive income | (7) | 0 |
Unrealized gains/(losses) in income statement | 0 | 0 |
Reclassification | 2 | 5 |
Balance as of June 30 | $ 22 | $ 42 |
Financial instruments - Activ_2
Financial instruments - Activity in level 3 financial liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in fair value measurement, liabilities [abstract] | ||
Balance as of January 1 | $ (209) | |
Balance as of June 30 | (3,815) | |
Contingent consideration payables [member] | ||
Changes in fair value measurement, liabilities [abstract] | ||
Balance as of January 1 | (162) | $ (113) |
Additions | (135) | 0 |
Accretion for passage of time | (9) | (10) |
Adjustments for change in assumptions | 13 | 0 |
Payments | 0 | 0 |
Balance as of June 30 | $ (293) | $ (123) |
Financial instruments - Additio
Financial instruments - Additional Information (Details) | Apr. 02, 2019USD ($) | Mar. 06, 2019USD ($)extension | Feb. 28, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Disclosure of detailed information about borrowings [line items] | |||||||
Contingent liabilities recognised in business combination | $ 630,000,000 | $ 630,000,000 | |||||
Interest expense | 27,000,000 | 31,000,000 | |||||
Proceeds from borrowings | $ 3,200,000,000 | ||||||
Financial debts | 3,500,000,000 | 3,522,000,000 | 3,522,000,000 | $ 47,000,000 | |||
Borrowings, term | 5 years | ||||||
Derivative liabilities, net | (11,000,000) | (11,000,000) | |||||
Gains on change in fair value of derivatives | 1,000,000 | 1,000,000 | |||||
Losses on change in fair value of derivatives | $ 12,000,000 | 12,000,000 | |||||
Bridge facility [member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Notional amount | $ 1,500,000,000 | ||||||
Borrowings, number of extension options | extension | 2 | ||||||
Borrowings, extension term | 180 days | ||||||
Borrowings, term | 364 days | ||||||
Facility A [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Notional amount | $ 500,000,000 | ||||||
Borrowings, term | 3 years | ||||||
Facility B [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Notional amount | $ 800,000,000 | ||||||
Borrowings, term | 5 years | ||||||
Facility C [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Notional amount | $ 400,000,000 | ||||||
Borrowings, term | 5 years | ||||||
Revolving Facility [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Notional amount | $ 1,000,000,000 | ||||||
Term Loans [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Proceeds from borrowings | $ 3,200,000,000 | ||||||
Local Bilateral Facilities [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Financial debts | $ 300,000,000 | ||||||
Borrowings, term | 1 year | ||||||
Local Bilateral Facilities, Japan [Member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Financial debts | $ 100,000,000 | ||||||
Contingent consideration payables [member] | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Purchases, fair value measurement, liabilities | 135,000,000 | $ 0 | |||||
Adjustments for change in assumptions | (13,000,000) | 0 | |||||
Accretion for passage of time | $ (9,000,000) | $ (10,000,000) |
Financial instruments - Sched_2
Financial instruments - Schedule of financial debts (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Apr. 02, 2019 | Dec. 31, 2018 |
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | $ 1,751 | $ 0 | |
Current financial debts | 1,771 | 47 | |
Total financial debts | 3,522 | $ 3,500 | 47 |
Facility A [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | 498 | 0 | |
Facility B [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | 792 | 0 | |
Facility C [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | 396 | 0 | |
Local Facilities, Japan [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | 65 | 0 | |
Current financial debts | 86 | 0 | |
Revolving Facility [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Non-current financial debts | 0 | 0 | |
Bridge facility [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Current financial debts | 1,496 | 0 | |
Local Facilities, Other [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Current financial debts | 129 | 32 | |
Other Short-term Financial Debts [Member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Current financial debts | 48 | 15 | |
Derivatives [member] | |||
Disclosure of detailed information about borrowings [line items] | |||
Current financial debts | $ 12 | $ 0 |
Condensed consolidated statem_3
Condensed consolidated statements of cash flows - additional details - Depreciation, amortization, impairments and fair value adjustments (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation, amortization, impairments and fair value adjustments | $ 709 | $ 615 |
Property, plant and equipment [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation, amortization, impairments and fair value adjustments | 129 | 119 |
Right-of-use assets [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation, amortization, impairments and fair value adjustments | 29 | 0 |
Intangible assets other than goodwill [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation, amortization, impairments and fair value adjustments | 536 | 555 |
Financial asset [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Depreciation, amortization, impairments and fair value adjustments | $ 15 | $ (59) |
Condensed consolidated statem_4
Condensed consolidated statements of cash flows - additional details - Change in net current assets and other operating cash flow items (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flow Statement [Abstract] | ||
(Increase) in inventories | $ (57) | $ (94) |
(Increase) in trade receivables | (122) | (94) |
Increase in trade payables | 134 | 47 |
Net change in other current assets | (73) | 74 |
Net change in other current liabilities | (64) | 10 |
Total | $ (182) | $ (57) |
Equity-based compensation - Add
Equity-based compensation - Additional information (Details) - shares shares in Millions | Apr. 09, 2019 | Apr. 08, 2019 | Jun. 30, 2019 |
Share-Based Payment Arrangements [Abstract] | |||
Number of other equity instruments granted in share-based payment arrangement (in shares) | 0.6 | 4.2 | |
Number of other equity instruments outstanding in share-based payment arrangement (in shares) | 4.8 |
Related parties transactions -
Related parties transactions - Schedule of related parties transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Related Party [Abstract] | |||||
Sales from the Company to former parent | $ 0 | $ 1 | $ 0 | $ 2 | |
Contract manufacturing revenues from former parent | 0 | 0 | 47 | 0 | |
Purchases of the Company from former parent | 0 | $ 1 | 19 | $ 2 | |
Receivables from former parent | 0 | 0 | $ 20 | ||
Payables to former parent | 0 | 0 | 85 | ||
Other financial receivables from former parent | 0 | 0 | 39 | ||
Other financial liabilities to former parent | $ 0 | $ 0 | $ 67 |
Related parties transactions _2
Related parties transactions - Additional information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Apr. 08, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party [Abstract] | |||||
Contract manufacturing revenues from former parent | $ 0 | $ 0 | $ 47 | $ 0 | |
Purchases of the Company from former parent | $ 0 | 1 | $ 19 | 2 | |
Services received, related party transactions | $ 40 | $ 140 | $ 276 |
Legal proceedings update (Detai
Legal proceedings update (Details) | Aug. 08, 2019complaint |
Commencement of major litigation [member] | |
Disclosure of contingent liabilities [line items] | |
Number of claims dismissed | 2 |