Good day. Welcome to Alcon's Q4 and Full Year 2020 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Karen King. Please go ahead. Welcome to Alcon's Q4 and Full Year 2020 Earnings Conference Call. Yesterday, we issued a press release, interim financial report, and Form 20-F, and posted a supplemental slide presentation on our website to enhance today's call. You can find all of these documents in the investor relations section of our website at www.investor.alcon.com. Joining me on today's call are David Endicott, our Chief Executive Officer, and Tim Stonesifer, our Chief Financial Officer. Our press release, presentation, and discussion will include forward-looking statements. We expressly disclaim any obligation to update forward-looking statements as a result of new information or future developments, except as required by law. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements. Important factors that could cause our actual results to differ materially from those in our forward-looking statements are included in Alcon's Form 20-F and our earnings press release and interim financial report on file with the Securities and Exchange Commission and available on the sec.gov website at www.sec.gov. Non-IFRS financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-IFRS financial measures should be considered along with, but not as alternatives to, the operating performance measures as prescribed per IFRS. Please review the financial tables provided in the press release and our filings that reconcile non-IFRS measures to directly comparable measures presented in accordance with IFRS. For discussion purposes, our comments on growth are expressed in constant currency. With that, I'll now turn the call over to David. Well, good morning, everyone, and welcome to Alcon's Q4 and Full Year 2020 Earnings Call. Despite operating in the extraordinary circumstance of a global healthcare crisis in 2020, we did make significant progress on our strategic initiatives and delivered innovative products that enabled us to grow our market shares. Let me begin by recapping highlights from 2020 and recent months, including market dynamics and our strategic priorities. After my comments, Tim will discuss the Q4 and full-year performance, we'll provide some color on 2021. I'll wrap it up with some closing remarks, and we'll open the call for Q&A. Looking back on 2020, I'm proud of what Alcon's accomplished against a difficult background. We exited the year with Q4 sales of $1.9 billion, in line with 2019 levels, which is a result of both recovering markets and strong execution. Both our businesses saw a rebound from the low point of the Q2 and exited the year by returning to growth in the Q4. Our core operating margin came in at 14.9% for the quarter. Despite the impact of COVID-19 on our operating results and continued capital investments and separation costs, we generated $350 million of free cash flow for the year. From the beginning of the pandemic, our first priority has been the safety and well-being of our associates. To protect them, we implemented a response framework with recommended COVID-19 prevention, containment, and mitigation measures. We also kept our associates fully employed through the pandemic and maintained pay levels notwithstanding lower production and sales volumes. Despite the impacts of the pandemic, we are still on track to substantially complete our separation by the end of the Q1. We're looking forward to channeling more energy towards creating greater value for our customers and shareholders. Our ongoing transformation program continues to enable a more agile culture defined by greater accountability and ownership. We're making progress in optimizing our cost structure, which is also allowing us to reinvest cost savings into research and development and marketing to drive our top line. We're continuing to advance our new contact lens manufacturing platform all through the pandemic, and over the last several years, we've been in the process of adding capacity to enable new product development of daily SiHy contact lenses, torics, multifocals, and other modalities. These new lines are now producing PRECISION1 and our recently launched PRECISION1 for Astigmatism. Finally, we remain laser-focused on our customers and their patients. Notwithstanding the challenges of 2020, we built an exciting pipeline with 11 first-in-market launches last year, which further expands our long-term runway for growth. Let me spend a few minutes updating you on some of our key products. PanOptix, our Trifocal IOL, continues to be the market leader and a favorite of surgeons and patients in some of our largest markets. Following its successful launch last year, Alcon accounts for more than 75% of the U.S. PCIOL market. We also recently launched PanOptix in China, where surgeon reception has been positive. PanOptix wrapped around its launch anniversary in the U.S. and Japan in the second half of 2020, given its market share ramp, the recovery of the market, and other regional opportunities, we anticipate continued steady share growth in the coming years. Now moving to Vivity, the world's first non-diffractive extended depth of focus lens. Vivity offers excellent distance and intermediate vision, but also gives nearly half of the patients benefit of near vision, all without the visual disturbances typical of diffractive IOLs. Vivity launched in Europe during the Q4 in 2020 and in the U.S. last month. We've received very positive feedback, and are seeing surgeons using Vivity who would not have previously considered using IOL for certain patients. We believe a lens like Vivity has the potential to expand our audience for ATIOLs as well as upgrade their experience. Turning to PRECISION1, our newest daily SiHy contact lens. PRECISION1 has become the fastest growing daily disposable contact lens in the U.S. and Alcon's leading brand in terms of new and switch fits in the Q4. We're building on this momentum by introducing PRECISION1 for Astigmatism, which launched in select U.S. accounts during the Q4 and also began a wider national rollout in January. We received terrific feedback from eye care professionals on the lens settling time, rotation on blink, and first-time fit success rate, all very important characteristics for a toric lens. We also launched PRECISION1 sphere and toric concurrently in Europe this quarter. Studies show that approximately 40% of patients are astigmatic, but only 10% wear toric contact lenses. With the launch of PRECISION1 toric, Alcon now provides a comprehensive daily SiHy offering across sphere, toric, and multifocal contact lenses that could treat nearly all patients. Our SiHy contact lenses continue to take share in sphere and multifocal categories globally. We're confident we can make significant inroads into the daily SiHy toric category as we ramp up PRECISION1 for Astigmatism. Finally, in ocular health, Pataday continues to bolster our leadership in the over-the-counter market. We were pleased to introduce Pataday Once Daily Extra Strength to national retailers last month. The eye drop, formerly prescribed as Pazeo, is our strongest solution, offering a full 24 hours of relief. This expands our over-the-counter ocular allergy portfolio to meet a variety of patient needs in advance of the spring allergy season. Recently, we also introduced a multi-dose preservative-free offering for SYSTANE in the U.S. and also in select European markets, which extends SYSTANE's runway for growth in previously untapped preservative-free markets. Turning now to our markets. In Surgical, the trend for global cataract procedures continues to improve sequentially and was down mid-single digits in the quarter, with North America nearly back to 2019 volumes and international markets continuing to lag 2019. Although COVID cases began to increase again in the fall, we did not see the magnitude of OR closures we saw in the Q2, we continued to see some improvement through the end of the year. In Vision Care, the global contact lens market increased about 4% in the Q4 versus the same period last year. However, the increase in the Japanese consumption tax implemented in Q4 of 2019 has created some noise with the quarterly growth rates. Excluding the Japanese market, contact lens market growth would have been in the low single digits based on our estimates. In summary, I'm pleased with the results of our key products and our underlying performance. Our ability to take share in a difficult market is a testament to our innovation and commercial execution, and it's critical to our ability to outpace the market. As we intensify our focus following the completion of our separation activities, we're confident in our ability to win share in the marketplace. With that, let me pass it to Tim, who will take you through our financial results and provide some commentary on 2021. Thanks, David. We're pleased to report Q4 sales of $1.9 billion, up 1% versus prior year. Net sales in both franchises returned to growth, led by strong results in North America, partially offset by softness in international. The rapid recovery in the back half of the year from the Q2 low point enabled us to finish the year with sales of $6.8 billion, down 8%. Surgical sales were up 1% in the quarter, driven by growth in implantables and equipment other. For the full year, surgical sales were down 11%. Implantable sales of $350 million increased by 4% in the Q4, primarily due to the continued strong demand for PanOptix. As David mentioned earlier, PanOptix continued to gain share and performed well as it lapped its launches in the U.S. and Japan. We're also starting to see incremental sales contribution from Vivity, which we previewed with select accounts in the U.S. and launched in most major European markets in the Q4. The strong performance in the ATIOL category offset lower sales from monofocals, which were impacted by COVID in certain markets. For the full year, implantable sales were down 6%. Consumable sales of $587 million decreased by 3% in the Q4. Demand for consumables is slightly better than the mid-single-digit decrease in procedural market growth. For the full year, consumable sales were down 15%. Sales from the equipment and other category were $191 million in the quarter, up 10% versus the prior year. Excluding the year-over-year benefit from the Japanese consumption tax, equipment and other would have been up 6%. The growth was a result of strong demand for innovation like our CENTURION ACTIVE SENTRY Handpiece, as well as upgrades to our equipment and a benefit due to a competitor outage in procedural eye drops. For the full year, equipment and other sales were down 3%. Turning to Vision Care, Q4 sales of $797 million grew 1% against prior year. On a full year basis, Vision Care sales were 4% lower than the same period last year. Contact lens sales were $490 million in the quarter, up 5% versus last year. Excluding the year-over-year benefit from the Japanese consumption tax, contact lens sales would have been up approximately 3%. The growth is primarily due to reusables and strong demand for PRECISION1 dailies in the U.S., partially offset by softness in our international markets, which continue to see an impact from recent COVID-19 restrictions. For the full year, contact lens sales declined 7%. Ocular Health sales of $307 million decreased by 3% in the Q4. Strength in Pataday and SYSTANE in the U.S. were more than offset by declines in other artificial tears and contact lens care. In allergy, we've started to introduce Pataday Extra Strength in the U.S. On a full-year basis, Ocular Health sales grew 1%. Now, moving down the income statement. Q4 core gross margin was 61.8%, down 60 basis points on a year-over-year basis, primarily driven by unfavorable manufacturing absorption. For the year, core gross margin declined 280 basis points to 60.5%. Core operating margin was 14.9% in the quarter, down 220 basis points from last year and down 180 basis points excluding FX. Approximately 60 basis points of this decline came from gross margin, which included pressure from manufacturing absorption, and 110 basis points came from R&D, which peaked in Q4 due to the timing of project spend. For the full year, core operating margin was 11.7%, which included significant deleverage due to lower year-over-year sales and 180 basis points of pressure from manufacturing absorption related to COVID. Q4 interest expense was $31 million, slightly down from $34 million in the prior year. For the full year, interest expense was $124 million versus $113 million, driven by an additional quarter of third-party debt issued after the spinoff and senior notes issued in 2020. The core effective tax rate was 18.8% in the quarter, compared to 20.9% for last year. The core tax rate was favorably impacted by the mix of pre-tax results across geographic tax jurisdictions. For the year, the core effective tax rate was 19.5%. Core diluted EPS were $0.41 in the Q4, down from $0.45 last year. For the full year, core diluted EPS were $1.04, down from $1.89 last year due to significant deleverage and COVID-19-related charges. Before I discuss our 2021 outlook, I'll touch on a couple of cash flow and other related items. Free cash flow for the year was $350 million, down from $367 million last year. Despite decreased cash flows from operating activities, the team did a great job in managing costs and driving better collections. Free cash flow was also aided by lower capital expenditures, which were $479 million for 2020, down from last year's $553 million, primarily due to the timing of spend for our new line installations. Separation costs were $36 million for the Q4 and $217 million for the full year, primarily driven by IT investments. We completed the majority of our separation spend in 2020 and expect to complete most of the remaining activity by the end of the Q1 this year. Life-to-date separation costs were $454 million. Transformation costs were $15 million for the Q4 and $49 million for the full year. Life-to-date transformation costs were $101 million, and we have recognized cost savings of $90 million, which have been reinvested back into the business to support product launches such as Pataday. To wrap up the year, we feel good about the progress we've made in 2020, despite the challenging environment. We remain on track with all our major initiatives, separation, transformation, and our new contact lens manufacturing platform. We've gained share with our new innovative launches and are investing to support product growth and build a robust pipeline for the future. Turning to 2021. Outbreaks of COVID cases continue to occur and localized responses remain unpredictable. With the improved adoption of safety measures and the availability of vaccines, we are encouraged to see the demand for eye care and surgical procedures holding up. Countries such as the U.S. are rebounding faster than our international markets, where we are seeing different paces of recovery. Against this backdrop, we believe we will likely see continued impact from COVID-19 during the first half of 2021, and we're optimistic that markets will return to historical levels in the second half. For the reasons I just described, we continue to believe that it would not be prudent to give full year guidance. As we did last quarter, we're providing some color to help you think about the Q1 of 2021. Given where we are today, we expect sales to be in line with the Q4 of 2020, despite seasonality. From a cost perspective, core gross margin should improve as higher production volumes contribute to better manufacturing absorption. While we continue to invest in sales and marketing to drive revenue growth, core R&D should be sequentially lower due to the timing of spend. We expect FX to be a modest tailwind in Q1. All of this should result in a slight improvement in core earnings per share from the Q4 2020 to the Q1 2021. I'm also pleased to report that our board of directors is proposing a new dividend of CHF 0.10 per share, which is in line with our payout policy of 10% of core net income, pending shareholder approval. This will be our first dividend as an independent company. Shareholders will vote on this proposal at our upcoming annual general meeting on April 28th. To briefly summarize, despite the unprecedented challenges from COVID-19 this year, we exerted tremendous expense discipline and made remarkable progress in our strategic initiatives while protecting our associates, stepping up to our customers' needs, and adapting to extraordinary change. The strong foundation continues to give us great confidence for the future and our long-term growth. Now I'll turn it back over to David for some closing remarks. Thanks, Tim. In summary, 2020 was a challenging year, but we've come out the other side a stronger, more robust company. I want to thank our 23,000 plus associates for their hard work, their support, and commitment during these clearly trying times. We've demonstrated our agility, resilience, and ability to execute in the face of significant headwinds. Our products continue to win in the marketplace, and we'll fuel this momentum with an exciting pipeline in 2021. We expect the eye care market to benefit from an increased demand for health and wellness, and to continue to be underpinned by strong long-term fundamentals. We'll share our perspectives on long-term growth at our upcoming virtual Capital Markets Day on March 24th, where we will discuss our strategy and innovation agenda, and how we'll create shareholder value and improve outcomes for our customers and their patients. Please visit our website for more details. Now let's open up the line for Q&A. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, you may reenter the question queue. At this time, we will pause momentarily to assemble our roster. The first question today comes from Veronika Dubajova with Goldman Sachs. Please go ahead. Good morning. Thank you guys for taking my questions. Hope you're keeping well. I just want to kind of follow up a little bit on the outlook for 2021. I think, Tim, in the past, you sort of said you thought the shape of the P&L in 2021 should be pretty similar to 2019. Would love to get your updated thoughts on how you're thinking about that, in particular, given some of the setup in the OpEx run rate in the Q4. Maybe just comments on sort of what proportion of the SG&A spend and R&D spend was phasing versus a new run rate of cost where you've expanded your sales presence, et cetera. A quick one for David on Vivity. David, what are you seeing in terms of the proportion of new patients that this is attracting in the European market? I know it's early on, but just ballpark, if you can share some anecdotes with us, that would be great. Thanks, guys. Yeah, sure. Thanks for the question, Veronika. I think that when you think about 2021, our assumption right now is that markets return to historical levels at the back half of the year. If that is to happen, I think it's very reasonable to think that we're going to grow faster than the market, right? If you think about the investments we've made in PanOptix, we've made in Vivity, we've made in PRECISION1. You can decide. I would take a look at our shares and as these markets return, I think it would be very reasonable to think that we're going to grow faster than the market. That's really the underpinning assumption. As you work your way down the P&L, from a gross margin perspective, obviously we're not going to have the absorption challenges we had this year. We may have a little bit depending on how long the COVID situation drags out in the first half of the year. At this stage, not expecting a material pressure point there. On the R&D front, we would be spending more. I think in 2019, we spent roughly 8%. We've always said we're going to spend that 7%-9%. My guess is we'll be sort of at the higher end of that range as we continue to fuel our innovation pipeline. To your question around SG&A and the ramp, I think it would be a similar profile. In fact, I think we'd probably be a little bit more productive because we're starting to see some of the benefits of some of the transformation work we're doing. We'll also have a little bit more leverage. A similar profile with maybe a little bit lower from a percentage basis. That's how I think about the P&L, if you were to compare 2021 with 2019. Veronika, on Vivity and PCIOLs in general, I would just say that our experience right now has been that Vivity seems to be adding share to the overall picture. I think we've had a nice share growth. We continue to get good, steady share growth around the world. Europe has certainly been adding to that as we get Vivity out. It does seem to be adding it on top of the PanOptix share that we have there. I think the going forward part for us is really just trying to get an assessment of what we think the penetration may change over time. We are pleased to see some of the penetration improvement in AT IOLs. It's a little hard to tell right now whether or not that's a function of a mix of accounts. The fastest, more assertive accounts are probably coming out first, and monofocals are probably trailing a little bit. We are seeing global AT IOL penetration up almost 140 basis points from prior year. Typically what we've seen is that kind of 50-100, and it kind of always settles back. We'll see whether that's a sustainable idea. We kind of hope that Vivity is bringing new patients in, but we'll see how that takes shape over time. As we see the monofocal market return, we'll have a better picture of that. That's really helpful. Tim, can I just quickly ask or confirm I'm understanding you correctly? Your expectation is the market is the same in the second half of 2021 as it was in the second half of 2019. You don't expect any growth versus those second half 2019 levels? That seems pretty conservative to me. I just want to make sure I got your point on that. Well, let me comment on the markets kind of separately. I think right now the U.S. is doing quite well. I think we were almost back to 19 in the Q4, so take that for what it's worth. International was a good bit behind that, though, and I would say it was kind of 5%-10% off of its peak on the surgical side. On Vision Care, the U.S. had kind of a remarkable Q4 that I think looks like it was up in the high single digits. International, however, was again behind that number. I think we're cautious about wanting to see the recovery complete and see that kind of international growth in particular. If you've seen around the world, there's some recovery plans that are out there that extend into June right now, so we're watching those carefully. I think we feel good about where we are. We also feel good about our share positions in those markets. Candidly, as I've said before, I'm not 100% sure when they come back exactly, but they are going to come back, and they are going to grow beyond that. Underlying fundamentals for us mean if we gain share through this stretch, we are disproportionately going to benefit as they do come back. Veronika, I'm not 100% sure whether it's back half or Q2 or where we really turn the corner on this, but we feel pretty good about our position. The next question is from Bob Hopkins with Bank of America. Please go ahead. Oh, great. I have just two quick questions. Thanks for taking them. First, I was just wondering if, would love to get your preliminary thoughts on any divergences you see in the outlook for the recovery between the Vision business and the Surgical business over the course of 2021. That would be the first question. I'll just go ahead and state the second one up front. I was just wondering, I'm sure we'll get specifics at the Capital Markets Day, but directionally, from where you sit today, do you think that disruption from COVID-19 will have an impact on the original 2023 targets that you talked about? Is there enough spacing between where we are today and 2023 such that those old margin targets are still quite valid? Thank you. Yeah, let me take the first one, Bob. I think the Vision Care business right now looks like the U.S. business has done pretty well bouncing back. The international business, again, I think is in a different place. I will say, though, that when you look at the numbers on the ground, there is a slight divergence between what we're seeing in the consumption data and what we're hearing from practices. Some of the research we've been doing over the last quarter would say that we still have a significant number of U.S. providers who say exams are below normal, lower than last year. A significant portion of practices are reporting revenue that was below last. Now, the weird part of that is even though we see total fits down almost 20% in the Q4, we saw a 9% consumption growth in the U.S. Those are U.S. numbers, just so you know what they are. That's odd, but I think that there is some belief that this is a normalizing market on our perspective, that there's some reusable growth that's come back for people who probably were wearing their glasses through most of COVID and decided they were tired to get them fogged up and started to buy back some of that. There's some general market growth as we kind of stabilize prescriptions. There's a willingness, I think, in optometry to a certain degree, instead of fitting the lens to renew a prescription for it, without necessarily seeing the patient right now. It's a small percentage, but it's big enough that we could compensate a little bit for what we see in short visits. I don't know precisely where that sits going forward, but I think it's a good sign that the consumption value total was up in the Q4 for the United States. International continues to be a little bit slower, and we believe that'll continue on for a little while until we see a little bit more foot traffic into what's largely a chain-dominated Europe, and the same thing in Japan, which are the two large international parts of our businesses. On the original targets, just maybe one point to make here. I think when we set out to spin this company out, we said two-thirds of that was going to come from revenue leverage, our operating improvement would come from just growth in revenue. The thesis has always been about revenue growth. We obviously were going to get some gross margin from mix and other efficiencies, but we have been on a tear really, I think, on the revenue side. Feel good about our share position, but the market's fallen away. Clearly, there's some impact, but I think from our perspective, we gave a low to mid-20s operating income range, and we still feel like the low end of that range is in play. I think the view that we have continues to be that depending on the revenue and depending on how the markets move, our thesis should still be intact. I think going forward, we'll want to update that with you, and we'll give a better update, I think, with more specificity in the March timeframe. I guess just next month. Yeah, the only other thing that I would say is sort of the underpinning assumptions and work that needed to be done to drive those financials that David just talked to, those are all on track, right? A big piece of that was the Vision Care line installations, and despite COVID-19, we've continued to execute upon that. Even though we took out $200 million of cost in Q2 versus the original target when we started seeing the COVID-19 pressure last year, we kept our R&D projects all on track. We continued to invest in that because, again, that's going to be critical to driving some of that long-term growth that David alluded to. I think the underpinning operational levers are all on track to drive that. Super helpful. Thank you. The next question is from Larry Biegelsen with Wells Fargo. Please go ahead. Good morning. Thanks for taking the question. Yeah, I just wanted to ask one quick clarification on Bob's question, the response to Bob's question. David, the low end is in play, and I think Bob was referring to 2023. Can I just confirm that the low end is still in play for 2023, or has COVID kind of pushed that out by a year? No, Larry, we've been saying for, I think, a while that our thesis was still intact. I think it's a matter of where the revenue hits, and we still believe that the revenue lines, assuming that we get the markets back. As we've indicated, we think they're coming back in the back half of this year where COVID will be behind us, and we think we've got time to get there. I don't think we've changed any of our perspective on where it is. I think it probably is to the low end of what we described at the time. Again, we'll give you a little more color on that in 2025 when we get to end of March. That's super helpful. David, the 5% contact, so one on contact lenses, the 5% growth in Q4 was quite good. Do you feel like you've turned the corner and now can grow above market in 2021? Is there any reason Q1 2021 would slow significantly from Q4? I'll just quickly ask my second one. David, if I look at consumables as a proxy for procedures, Tim mentioned 2020 was down 15% year-over-year. It typically grows mid-single digits. How are you thinking about the catch-up of lost procedures over the course of 2021 and 2022? Thanks for taking the questions. Yeah, sure. On the contact lens piece, we have, I think, gotten ourselves back to what I'd say is kind of growth at market. I don't think we're beating the market yet. We are in some kind of smaller spaces. For example, in the paces we really desire to be, silicone hydrogel, we're doing very well. We've grown market share in the Q4 in that category, and that is the fastest-growing part of the contact lens market. We feel good about that because that's, of course, where DT1 plays, that's where PRECISION1 plays. We're entering toric and multifocal. A lot of our energy that's going at the fastest growth part of this segment is paying off well. We obviously have a big underlying reusable business we have to pay attention to, and we also have some older dailies business. The exciting part for us is as we see the Q4 took shape, what we saw was our total dailies, and that's really DT1 plus P1 plus DACP. That's really what we're trying to think about because we're losing a little DACP share. We're cannibalizing a little bit of it. We're losing it to some other people. That's normal. That's what we would have expected, because it's an older HEMA lens. I think as you kind of go forward and see the shift to SiHy continue, we're disproportionately capturing share in the SiHy. We're watching the total daily share very carefully. In terms of new fits and switch fits, we had a very good Q4. I would say we were up a good bit in share of new and switch fits for the DAILIES segment in sphere in particular. I feel good about what we've said there, and I feel good about where we're going. I will tell you that again, we've got more work to do. I do think that growing above market is our expectation for 2021, and that's, I think, well within our reach given the near-term trajectory we saw with P1 and the continued strength of DAILIES TOTAL1. On the other piece of this, the surgical procedures, I think it's right to wonder where we are with consumables. The market overall in recess for the year was off almost 25%. We were off, I think, in consumables, what was it? About 13% or something in that neighborhood, maybe 15. I can't remember. 15. 15 on that one, three in the quarter. Let me just suggest that we think we're gaining share in the consumables business right now and that the market has been obviously slow internationally in particular. The U.S. market looks like it was nearly back to 2019 levels. It wasn't quite there, but I think it was off 1% or something. Really close to what we would have expected as we started this journey some months ago. I think our share looks pretty good, and our international share in particular has picked up with both CENTURION and LEGION performing very well internationally. We're expanding our footprint, and I think we outperformed the market really a good bit on consumables relative to the actual procedures that were in the market. Again, I think that the market picks up internationally, but we'll have to see when. Again, I would say we feel comfortable saying back half of the year, but we'll see how the COVID thing plays out. We did this before. Let me give it a little more color because I'm sure we'll get more questions on 2023 and margin expansion, what have you. The other couple points I'd make is one way to think about it is if you take our Q4 2020 margin rate was 14.9%. Now in there, you have some pressure from absorption. We spike up at $30 million so you guys can quantify that. We also have some R&D timing in there because we're playing a little bit of catch up from Q3. If you normalize it, if you will, that kind of gets you to 17%. What you need to believe over the next two or three years is you got to get, call it, a point and a half, two points of additional gross margin. We've spent a lot of time walking people through the Vision Care installations, and we've always said that. The benefit of that margin expansion will probably come in the latter part of the plan. Think about it in 2022, you're going to get that mix lift that we talked about. PanOptix is a perfect example. You got to believe you get a point and a half or two points from there, and then you get two to three points of SG&A leverage. When we gave the original guidance in 2018, there were a lot of things that we weren't quite sure about. PanOptix was just launched in the new markets. Vivity was in clinical trials. PRECISION1 was in development. We feel like we're in a much better space now than we were in 2018 just because some of those variables are sort of taken out of play. You got to believe that operating leverage on the revenue side, and if you take it from kind of the Q4 exit rate, normalize it, that kind of gets you there. Next question comes from Matt Miksic, Credit Suisse. Please go ahead. Great. Thanks so much for taking the question. Maybe on that topic, just following up on the margins, for David, the share of switchings, sort of new switches is encouraging on P1. Just wondering how important, as you start to sort of look for these, 1.5%-2% improvement in gross margins that you mentioned and sort of volume on the P1 side, that these fits start improving just because it seems like you take share where there's a jump ball, where there's an opportunity, not necessarily where there's just a lift in consumption. Then I have one follow-up. Yeah, look, I don't think that's the big picture. The P1 is important for sure, it's a small part of what we're doing right now and will be for a while. DT1 continues to be a big product for us. P1 will grow nicely, I'm sure, it will take share for us. Getting ourselves really in a leading share position in daily SiHy is kind of the big picture, I think toric lens will help us. The sphere's doing well. Our multifocal DT1 multifocal is doing a great job of picking up patients there in a fast-growing sector as well. We feel good about that part of it. The gross margins really right now, you should expect it to come largely from the surgical business for the next kind of 24 months-ish, because we're getting really good mix shift to AT IOLs, and that's giving us, I think, a good bit of lift. That will continue, and that will help us, I think, as we go forward more than anything else. The real thing on margin is we lost $600 million of revenue top line between last year and this year, or sorry, from 2019 to 2020, right? That's a de-levering, not a leverageable top line. That's really the impact that we're struggling with as we go forward. We've got to get the top line back. With every confidence we'll do that. When you start talking about the long-term plan, it really hinges on our belief that we can get revenue growth and market share movement, and we're seeing all of those things take shape. I think Tim said it nicely. We believe we de-risked a lot of the top-line assumptions that we had when we went out. We feel good about that, feel good about the share performance. We've got a lot of our separation behind us. For us, it looks like a lot of blue ocean, but we feel good about where we're going. You had another question, I think, just as a follow-up there. Yes, I did. Thanks. When you think about this coming meeting and the plan over the next couple of years in the context of your sort of original plan, Vivity is a pretty significant, I guess, recent catalyst and seems to be having some success in the market. I guess how does it change or enhance the sort of growth or opportunity that you have in the next 12, 18 months from what you're seeing so far? Well, we had a lot of these in our minds. I don't know that we had Vivity particularly. We didn't really talk about Vivity much. We also didn't talk about Pataday. We didn't talk about a few others that are like multi-dose, preservative-free tiers. We've got some other things I think that we're excited about that, again, we just don't know 100% about technically yet. I do think what you should believe is that we're investing for product flow that will impact our revenue top line going forward. Vivity is going to do well. We'll see how much we can get in addition to what PanOptix does. PanOptix has clearly done very well for us. We think it will continue to do well, as we said earlier, for the next several years. I think Vivity has the potential to add, particularly in places like Europe, and Vivity's kind of interesting proposition right now is that it's a really great upgrade to our Toric, right? If you're an AT IOL user using a toric, Vivity provides you all the toricity you would have gotten from the AcrySof Toric, which is again, the market-leading toric lens in IOLs. It also gives you intermediate vision, and it also gives half those patients near vision. Really, that's pretty exciting for the surgeon who was not super comfortable with the visual disturbances of traditional AT IOLs. We have a really unique product here. We'll see how much that takes off in terms of new patients, new docs, but that's clearly exciting for us. I wouldn't limit it to that. I do think that our pipeline looks good, and that's really what CMD is going to be about for us. Again, I think we should kind of make sure everybody understands we're trying to kind of give you an R&D day, if you will, of what we think the near-term drivers are for products and what we think the long-term investments are for platforms that can mature and really change the market. We'll give you a good look at all of that stuff, and hopefully you'll walk away feeling good about our belief in the revenue line. Look forward to it. Thanks. The next question is from David Lewis with Morgan Stanley. Please go ahead. Hi, good morning. Thanks for taking the question. Just two quick ones for me here, and maybe start with Tim. Tim, just looking at the Q1 guide, which we appreciated, it was actually a pretty strong number by our view, but there's a lot going on in that Q1. There's your normal quarterly cycling. There's got to be some resurgence recovery and weather dynamics, as well as your anniversarying a big quarter for PanOptix in the year-ago period. Do you have a flush-out, get that guidance relative to some of those factors that I mentioned here in the Q1? Again, there are a lot of moving parts. I think at a high level, I would expect to see revenue in line with Q4. We're going to continue to monitor the COVID situation in EMEA, Japan. We obviously had a bad stint of weather here, particularly in Texas last week. We've taken that into consideration. We'd expect to be somewhat in line. From a cost perspective, wouldn't expect to see quite as much manufacturing absorption pressure as we saw in Q4. There may be a little bit, depending on how long, as I said earlier, how long COVID lingers. I wouldn't expect it to be at that $30 million level by any stretch. R&D will probably be a little bit lighter. We had about $174 million of R&D spend in Q4. We had a lighter Q3 than what we had wanted, so we had a little bit of catch-up there. That'll kind of toggle back to a more normalized level, if you will. We're going to continue to invest behind the revenue growth. Assuming that revenue line is intact, we're going to continue to put money behind advertising promotions to drive that. That's how I think about Q1 as compared to Q4. Okay. David, just in 2020, guess one of the surprises was just equipment, and that was another very good number within surgical in the Q4. Were you surprised this year just how that equipment number kind of manifests itself in the back half of the year? There is some concerns about sort of equipment pull forwards or push outs. How do you think the equipment business sort of wrapped up in the year, and then how do you think about the outlook for that business in 2021? Thanks so much. Yeah, really good question, David. Candidly, we were a bit surprised by the strength of the capital equipment market. I think if you go back to a couple of calls ago, I was probably pretty negative about the potential for capital. I don't know that we were way off, except for the fact that we did pretty well with both some of our newer stuff, which has gone pretty well for us. We had a 10% quarter on equipment, and that was both U.S. and international. We had good strength in our cataract equipment, particularly strong with Centurion and our new entry, Legion, in the international markets, which is a lower priced, but advanced fluidics kind of a phaco machine, performed very well there. Vitreoretinal was also double-digit growth for both U.S. and international. We got a small bump in the U.S., of course, from procedural eye drops, where we had a bit of an outage. I would probably just say that the overall effort, I think internationally, is up on equipment and in some markets, I think we may have underestimated the desire and drive for new equipment, read China and some of the emerging markets. The next question comes from Anthony Petrone with Jefferies. Please go ahead. Thanks. I hope everyone's staying healthy. Got a couple, one on contact lens, one on surgical. Just on contact lenses, Dave, how should we think about restocking and destocking trends, as COVID-19 continues to play out? I know that that had some pushes and pulls in 2020. Just wondering how that plays out in 2021. In terms of the PanOptix, Vivity sort of dynamic, do you think there's a little bit of cannibalization of PanOptix from Vivity, or are these two completely separate lines? I'll have a quick follow-up for Tim. Thanks. Anthony, I think on the contact lens business, we think that most of the movement in inventory is pretty normalized right now. We saw a little bit of movement. We always see just a little bit here and there, but nothing in the Q4 that looked unusual. It was an unusually strong quarter in the U.S., so we were pretty closely looking at that, but it looks like the inventories were appropriate for what we saw. I don't really see a whole bunch of change in that dynamic going forward. I think we kind of think it's pretty normal right now. On the Vivity and PanOptix piece, I'm sure there's some cannibalization. There must be, because we've got fairly high share combined. What we're really looking at is whether or not we're getting additional penetration or additional share growth all in. There are some markets like Europe, where we don't enjoy the same share we have in the United States and some of the other markets in which we've got out first with PanOptix. We think there is opportunity to grow share, for example, in Europe, and I do think we see that, so and it is additive. I think at this point, we aren't seeing a lot of cannibalization, but I wouldn't say there's none. I just think that in aggregate, we're doing quite well. I think on the quarter, yeah, very nice share progression for us all over the world, really, between the two products combined. Great. Tim, just quick on the second half 2019 to second half 2021 comparison, I just want to get that straightened. Are you suggesting that we model off second half 2019 combined revenues, thinking about second half 2021? I just want to see if that's the comment there, and how you're thinking about t he second half of 2021, again, just kind of lapping 2020? Yeah. I don't mean to be coy, Anthony, but I'm not going to get into modeling second half versus second half. Again, I think our assumption is that the market's return to sort of those historical levels at the second half of this year. Then, again, I think you just need to take into account our product launches, our shares, and when those markets return, we should get a disproportionate amount of that return given our share position. I think that's the main assumption that I would use to model out your revenue line and then you can work the rest of the P&L as I laid out to the earlier question. The next question is from Julien Dormois of Exane. Please g o ahead. Hi, good morning, Dave, good morning, Tim. Thanks for taking my questions. I have two, and they both relate to ocular health. The first one, sorry for being a bit blunt here, but can you help me reconcile what I see as conflicting trends between the strong performance you have highlighted in reusable lenses, but at the same time, a decline in sales for contact lens care? Just seems a bit counterintuitive to me. Is that ocular health is meant to improve in the course of 2021 as more patients got fitted with reusable lenses? What am I missing here? Second question relates to the reopening in the spring. I mean, no one of us has a crystal ball, but it appears that maybe the reopening and the lifting of restrictions could happen earlier in the spring than they did last year. Could this prove a nice surprise for ocular health, especially in the context of eye drops and the launch of Pataday in the room to benefit from easy comps, especially in Q2? Yeah. Let me start by saying the ocular health and the reusable lenses was a bit of a surprise to us as well. Again, I don't know that I have a really good explanation for it. I think it was up 3% on the quarter. The kind of lens care business, again, has been pretty consistent kind of in that mid-single digit decline area for a while. Sometimes it does a little better than that, but that's kind of where we had assumed it would be. The only surprise for us was that the resurgence of the reusable lenses in the quarter. To be honest, I'm not reading a lot into it. It could be that people just kind of decided they were tired of wearing their glasses or tired of the way they looked on the little Zoom screen that they've got or whatever. I think we're going to have to see another quarter of data before we really make much out of the reusable side of that. I would just assume that these two things are a little bit disconnected, as you say, for the moment, and we'll see if that continues. If it continues, there's obviously something we're missing here. At the moment, we think it's just kind of a data aberration or a moment that looks a little weird. On the spring reopening, again, I don't know how to think about the effect spring versus back half. It's a bit like Tim just answered. What we're modeling right now is that the full market return is there kind of in the back half of this year. The United States looks like it got mostly back to normal by the end of last year, but the rest of the world has not. It's really important to understand that what we're saying here is not what our revenue is going to do, but what the markets are going to do is the markets for international are going to continue to move back towards normal, probably hitting normal sometime at the middle part of the year. I think that's a pretty safe bet. I don't know that if it helped a little sooner, would it be upside? Maybe. Again, the main thing for you to think about is where our share position is against where the markets are and try work your way back to what you think our revenue is going to do. That's how we're thinking about it. Again, that's partly why we're still careful about trying to guide here. It's really a little bit early for us because we can still see significant down markets in places around the world. Asia Pac in particular, Latin America in particular, both still double-digit below market where they should be. Again, we'll have to see where they show up. Again, I'm optimistic that we'll get good reads on that by probably the middle of the year, and that's why we're kind of calling it the way we are. Our last question today comes from Jeff Johnson with Baird. Please go ahead. Thank you. Good morning. David, I wanted to go back. You made a comment, and we've heard the same thing, that some docs were maybe a little more lax on filling prescriptions that expired at the end of 2020, and kind of correlate that with the 9% consumption growth you were talking about in the Q4. I'd be interested to hear if some of that strength in the U.S. contact lens market especially has continued into January and February, or if there was kind of that rush, these patients who hadn't filled a prescription all year and had some benefits that were maybe expiring at the end of 2019 or at the end of 2020, I'm sorry. If there was maybe a little aberration there in December, especially, that doesn't continue in January, February. Just what are you seeing so far in the first couple of months of this year on the contact lens U.S. market? Yeah. Jeff, let me stay away from commenting on the intra-quarter stuff, but let me say this way. I don't think that 9%'s a sustainable number on a routine basis. We've had for a long time a belief that the contact lens market grow on a value basis somewhere in that 5%-6% a quarter range. That's probably where the normal rate ought to be. It's kind of the historical rate. I think probably what we believe is over the long haul I don't know when exactly, but when the markets get back to where they should be, we should be kind of growing on that same kind of curve we were for probably five or six years with that kind of change from reusables to DAILIES driving a value upgrade off of relatively stable contact lens volume. Slight to up in new patients, similar kind of numbers where you're kind of growing flat to up 1% in use, real getting a nice value trade up that looks a little bit more like 5% plus or minus a little bit on five. That mid-single digits is where I think the natural steady state is. I really don't know where we are right now in the early part of this year. Yeah, fair enough. Just on the IOL side, I think I heard you, I just want to make sure I understand. You think even off the 75% PCIOL market share in the U.S. and Japan, there's still room for that to move a bit higher over the next couple few years or over the next year or two anyway? Where do you think share for you guys goes on the toric IOL side? Does that hold steady? Obviously, that's been a good growth driver over the last couple of years as well. You got some competitive entrants there. Does the toric IOL share hold steady or where does that go over the next year or two as well? Thanks. Yeah, look, I think we expect to hold share in torics to a large degree. There's a lot of competition in and out. Around the world, we have pockets of opportunity, in Europe in particular, but also I would say Asia. We have opportunities to grow share in the PCIOL space. We have a 75 share, as we said, or better than that in the United States right now. Even Japan is not even that high. The rest of the world, I think, is considerably lower than that. I would say that in our minds, both PanOptix and Vivity represent shared growth opportunities for Asia, for China, for Latin America, for Eastern Europe. I think those are things we pay very close attention to. I think given the pace of where we are on a wraparound basis, plus the new markets kind of plus the potential for penetration change, we feel really good about our position on the IOLs right now. This concludes our question and answer session. The conference has now also concluded. Thank you for attending today's presentation. You may now disconnect.