Hello, and welcome to the Alcon Q4 and full year 2021 earnings call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Karen King, Senior Vice President, Head of Global Investor Relations and Corporate Affairs. Please go ahead, Karen. Welcome to Alcon's Q4 and full year 2021 earnings conference call. Yesterday, we issued a press release, interim financial report and annual report, as well as posted a supplemental slide presentation on our website to enhance today's call. You can find all these documents in the investor relations section of our website at 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 annual report and our earnings press release and interim financial report on file with the Securities and Exchange Commission and available on the SEC's website at 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 in 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 see a reconciliation between our non-IFRS measures with directly comparable measures presented in accordance with IFRS in our Q4 and full year earnings presentation, which can be found on our investor relations website. As a reminder, for discussion purposes, we're providing comparisons of 2021 versus 2019, unless otherwise noted, as we believe this is more operationally meaningful since our results were impacted by the pandemic in 2020. You will find a summary of results comparing 2021, 2020 and 2019 in our slide presentation, and a comparison of 2021 versus 2020 in our press release and financial statements. This is the last quarter where we'll provide comparisons against 2019. Starting in the Q1 of 2022, we will resume year-over-year comparisons in all our earnings materials. As usual, our comments on growth are expressed in constant currency. Before I turn the call over to David, I want to introduce you to Alcon's new VP and Head of Investor Relations, Dan Cravens, who started last week and is joining us on today's call. We're very excited to have Dan on board. He brings deep Investor Relations and financial experience to Alcon. He will be your day-to-day contact once he gets up to speed, and will be introducing our future earnings calls, starting with the Q1 of 2022. With that, I'll now turn the call over to David. Welcome to Alcon's Q4 and full year 2021 earnings call. Let me begin by recapping highlights from 2021 and recent months, including market dynamics and key product launches. After my comments, Tim will discuss our Q4 and full year performance and then give some color on 2022. Then I'll wrap up with some closing remarks, and we'll open the line for Q&A. 2021 was an exceptional year for Alcon. We exited the year with Q4 sales of $2.1 billion and full year sales of $8.2 billion, which is at the high end of our sales guidance. This is a result of strong demand for key products and new product launches, as well as solid commercial execution. Core operating margin was 16.3% for the quarter and 17.6% for the full year, right in line with our guidance. Finally, core diluted EPS for the quarter was $0.56 and $2.15 for the full year. Additionally, despite our continued investments, we generated $645 million in free cash flow for the year. As I reflect on full year of 2021, I'm extremely proud of all that we've accomplished. First, despite the ongoing pandemic and broader economic pressures, our full year 2021 results demonstrate the resilience of our business, the strength of our innovation, the proficiency of our commercial teams, and our long-term commitment to focus on growth. Since then, we've aspired to grow above the market, driven by delivering great products that address key customer needs. In 2021, we did exactly that. By growing share, and in some cases growing the market, our product flow and mixes resulted in double-digit revenue growth in both our Surgical and Vision Care franchises, which drove core operating leverage and margin expansion. Second, we completed our separation, which was a major milestone as a new independent company. This has allowed us to intensify our focus on innovative products that are critical to driving top line growth. Now third, we're seeing favorable returns on our investments in transformation, manufacturing, and innovation. Our transformation initiatives continue to optimize our cost structure, creating efficiencies and savings that we are reinvesting in innovation to support new product launches. Our investments in our new contact lens manufacturing platform has given us the flexibility to launch a host of new products over the past two years, all of which are well-positioned to capture share. Our commitment to funding our innovation engine is producing a strong pipeline of new products which were developed with our customers in mind and are addressing unmet patient needs. Now I'll spend a few minutes updating you on some of those innovations. In surgical, we remain the market leaders in presbyopia-correcting IOLs on the strength of both PanOptix and Vivity. Penetration of advanced technology lenses continues to increase. Vivity's non-diffractive properties, ease of use, and consistency of surgical outcomes make it particularly appealing. Existing surgeons are increasing their use of advanced technologies, upgrading patients from a monofocal toric to a multifocal toric, or using Vivity on patients who they would have previously excluded from an ATIOL due to a prior pathology or concerns with halos and glare. We're also excited to add Hydrus Microstent to our portfolio of implantable devices. Hydrus represents an exciting opportunity in the large and fast-growing mild to moderate glaucoma market. Physicians appreciate the strong and compelling safety and efficacy data from the pivotal trial, showing that 66% of patients were medication-free at five years, and that 61% had a reduced risk of invasive secondary surgeries compared to cataract surgery alone. Now in equipment, we continue to see strong reception for our suite of cataract equipment, including our phaco equipment, microscopes, and ARGOS biometer. We're also piloting our smart cataract planner, which is part of our broader digital ecosystem with select customers in the United States. Turning to vision care, we continue to see strong demand for PRECISION1 and PRECISION1 for Astigmatism, which are our newest contact lenses for the mainstream market. Now simultaneously, we're also building out our TOTAL brand in the premium segment. We announced the broad commercial launch of DAIILIES TOTAL1 for Astigmatism in the United States, which has been eagerly anticipated by eye care professionals and completes our DAILIES TOTAL1 portfolio. We also announced the broad commercial launch of TOTAL30 Sphere in the U.S. and in some European markets. This is the first and only monthly contact lens leveraging the Water Gradient Technology first introduced on DAILIES TOTAL1. This lens addresses the large $4 billion reusable market as the first meaningful innovation into this market in years. Now finally, in ocular health, we are pleased to announce the recent launch of SYSTANE COMPLETE in a multi-dose preservative-free format, our third multi-dose preservative-free offering in the past 18 months. During the H1 of 2021, we built a U.S. sales force dedicated to delivering eye drops into the ophthalmic channel. This sales force is now in place and has a robust portfolio to sell, including Simbrinza glaucoma drops, our Systane family of dry eye products, and our Pataday allergy drops. Now moving to our end markets by franchise. In surgical, global cataract procedures in the Q4 were down low single digits over 2019. However, if you exclude India, which has been slower to recover from the pandemic, global procedures in the Q4 were up low to mid-single digits versus 2019. Growth in the U.S. market remained relatively consistent with prior quarter. Growth in international markets were still slower to recover, but saw solid sequential improvement over the third quarter. Against this backdrop, our Implantables business continued to outpace the market, driven by our strong ATIOL performance. In vision care, the contact lens market in the Q4 broadly returned to the 2019 levels and grew high single digits, led by the U.S. Growth rates in international markets are still trailing behind the U.S. due to varied paces of market recovery. However, our contact lenses significantly outpaced the market, driven by strong performance of PRECISION1 and PRECISION1 for Astigmatism. Our full year 2021 performance demonstrates the durability of our markets and the resilience of our business, all of which are underpinned by favorable macro trends. Our strategy of investing behind markets with high growth opportunities or high share opportunities is playing out nicely, and we are creating innovative products that are addressing customer needs and using the expertise of our commercial organization to successfully execute on our new product launches. As a result, we're growing faster than markets around the world, even as they continue to recover. With that, let me pass it to Tim, who will take you through our financial results. Thanks, David. In the Q4, we saw sales of $2.1 billion, up 15% versus 2019, driven by 15% growth in Surgical and 13% growth in Vision Care. Full year sales were $8.2 billion, up 12% versus 2019. Implantable sales were $416 million in the Q4, an increase of 27% versus 2019. As David mentioned, our PC IOL portfolio continues to lead the market, and we saw strong ATIOL adoption trends continue through the Q4. On a full year basis, Implantable sales were up 27% versus 2019. Consumable sales of $639 million in the Q4 increased by 8% versus 2019, with sales growth mainly driven by market recovery. On a full year basis, Consumable sales were up 3% versus 2019. Equipment and other sales were $204 million in the quarter, up 21% versus 2019. Approximately two thirds of the growth was due to strong sales of cataract equipment, which included competitive conversions, upgrades from older to newer generation of equipment, and surgeons who are expanding their ORs to accommodate patient flow. On a full year basis, equipment and other sales were up 21% versus 2019. In vision care, Q4 sales of $875 million grew 13% versus 2019. Contact lens sales were $533 million in the quarter, up 16% versus 2019. We were very pleased with the strong interest in our daily lenses, including PRECISION1 and PRECISION1 for Astigmatism, as well as continued growth from DAILIES TOTAL1. TOTAL30, our new premium SiHy reusable lens, is also starting to take foothold in the United States and Europe, where customer feedback has been very positive. On a full-year basis, Contact Lens sales were up 7% versus 2019. Ocular Health sales were $342 million in the quarter, an increase of 10% versus 2019. This is primarily attributable to our SYSTANE family of dry eye products, which saw another quarter of double-digit growth, including our recently launched multi-dose preservative-free formats. We also saw solid contributions from Pataday allergy drops and Simbrinza glaucoma drops, which had no comparable sales in 2019. On a full-year basis, Ocular Health sales were up 14% versus 2019. Q4 core gross margin was 62.8%, about 60 basis points ahead of 2019, mainly driven by higher sales and mix. For the full year, core gross margin was 63.4%, in line with 2019. Core operating margin was 16.3% in the quarter. In line with our comments during our last earnings call, we increased spending in marketing and sales to support new product launches and key products. For the full year, core operating margin was 17.6%, an increase of 70 basis points versus 2019. The core effective tax rate was 10.4% in the quarter. The favorable rate is primarily due to the mix of pre-tax income across tax jurisdictions and a recently concluded tax deduction of statutory expense in Switzerland. For the full year, the core effective tax rate was 17%. Core diluted earnings per share in the Q4 of 2021 was $0.56, up $0.11 versus the Q4 of 2019. This was driven by strong revenue growth and a favorable core tax rate. For the full year, core diluted earnings per share was $2.15, up $0.26 versus 2019. Now I'll touch on a couple of cash flow and balance sheet items. Free cash flow in 2021 was $645 million, compared to $367 million for 2019. Higher core operating income and lower separation spend were partially offset by higher capital expenditures and increases in inventory, primarily to support new product launches. Capital expenditures was $700 million for the year, up from $553 million in 2019, primarily due to the timing of spend for our contact lens manufacturing expansion. Given the strong reception to our new contact lenses, we are increasing the number of lines in our new manufacturing platform to meet future demand. As a result, we expect capital expenditure this year to remain relatively consistent to full year 2021 on an absolute basis. Transformation costs were $28 million for the Q4 and $68 million for the full year. Life to date transformation costs were $169 million, and we have recognized close to $200 million of cost savings, which has been reinvested back into the business to support product launches and R&D. We expect to substantially conclude the transformation program by the end of 2023. To summarize the year, despite the headwinds we face, we feel very good about our achievements in 2021. All of our major initiatives remain on track. We completed separation, are advancing our transformation, and our new manufacturing platform is delivering innovative products that are experiencing high demand. Our products are growing ahead of market, and we have a robust pipeline for future growth. Now, turning to 2022 guidance. Starting next year, we will revert to a year-over-year comparison of our results aligned with our press release and interim financials. On our next earnings call, we will compare Q1 of 2022 with Q1 of 2021. While we're monitoring the variants of COVID-19, and most recently, Omicron, with the improved adoption of safety measures and the availability of vaccines, we are encouraged to see solid return of demand for surgical procedures in eye care. Our 2022 guidance further assumes that global markets grow over 2021 in line with historical averages, the impact from inflation moderates in the second half of the year, and the US dollar holds steady at mid-January foreign exchange rates. Accordingly, we expect 2022 net sales of $8.7 billion-$8.9 billion, which corresponds to 7%-9% constant currency growth over 2021. We expect to see approximately 100 basis points of pressure from foreign currency. Turning now to expenses. We're going to continue to invest in innovation and expect core research and development expense to come in around the midpoint of our previous range, which was 7%-9% of sales. Based on our sales trajectory, we expect operating leverage to drive a core operating margin of 18%-19%. We continue to see inflationary headwinds related to raw materials, freight, and labor. While we are actively working to mitigate these challenges through selective price increases and productivity initiatives, we have built in approximately 40 basis points of incremental margin pressure in our 2022 guidance. Moving down the income statement, we expect interest and other financial expense to increase to a range of $180 million-$190 million given the current environment on interest rates and foreign exchange. We project our core effective tax rate to be in the range of 17%-19%. Based on this, we project core diluted earnings per share in the range of $2.35-$2.45, which corresponds to 13%-18% constant currency growth over 2021. We expect to see approximately 400 basis points of pressure from foreign currency. Before turning back to David, I'm also pleased to report that our board of directors is proposing a dividend of CHF 0.20 per share, which is in line with our payout policy of 10% of previous year core net income pending shareholder approval. Shareholders will vote on this proposal at our upcoming annual general meeting on April 27th. Now, I'll hand it over to David for some closing remarks. Thanks, Tim. In closing, we're very pleased with our full year 2021 results. We demonstrated the resilience of our business despite markets still recovering from COVID-19. We completed our separation on time and on budget. We progressed with our transformation program, optimizing our overall cost profile and reinvesting savings into new product launches in R&D. We continued to invest in research and development, securing a robust pipeline that will drive future growth. We installed lines aligned with demand on our new contact lens manufacturing platform. We announced two deals that enhanced our glaucoma portfolio, one which allowed us to build a broad portfolio of eye drops for the ophthalmic channel, and the other giving us a re-entry into minimally invasive glaucoma surgery. We're launching innovative products which are gaining share and increasing adoption, driving double-digit growth across both our surgical and our vision care franchises. Importantly, we're creating shareholder value. As we enter 2022, we have a substantial momentum and believe that we can continue to outpace the market with the full year benefit of our innovative products. I want to thank our 24,000+ associates for all their hard work and dedication to helping everyone around the world see brilliantly. With that, let's open up the line for Q&A. Thank you. We'll now be conducting a question and answer session. We ask you please ask one question and one follow-up, then return to the queue. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. Once again, that's star one to be placed into question queue, and we ask you please ask one question, one follow-up, then return to the queue. Our first question today is coming from Zachary Weiner from Jefferies. Your line is now live. Hey, thanks for taking the question, and congrats on a great quarter. Just one on the ATIOL space. In the past, you've called out the share that you've held from the ATIOL space. Can you give an update on that and how PanOptix performed in the quarter? Thanks. Yeah, Zach, we had a good quarter with both PanOptix and Vivity. The total share I think came down a point or two in the quarter. I can't remember exactly the number, but it's, you know, right, it's running right around 80% in the United States. In the international market, I think it's actually up. I'd have to go check that number and get back to you. Directionally, I'd say we're holding share from a very high position. You know, really faring quite well against the new product flow that's come in. Got it. Thanks. One on the contact lens manufacturing upgrades. How many lines were put in place during 2021, and what is the expected margin benefit as we move forward here? Can you just talk about that? Yeah. Well, you know, we've shied away from giving a lot of detail on the number of lines because it speaks to capacity and we're trying to keep that a little bit to ourselves. I think in terms of margin progression, Tim, why don't you grab that one? Yeah. I think what you'll see is we had another good year of investments in putting in lines. We will put in more lines this year. That will continue to put on sort of near-term pressure on the Vision Care gross margins, because again, it takes roughly 18-24 months for those to get up to optimal capacity. I would just think about it as, you know, over the next couple of years in the Vision Care business, we'll continue to get operating leverage as we've done in the past, and then that gross margin expansion will come in the latter part of the plan. I think what we're excited about there is a 16% growth in the quarter on contact lenses. Again, I think, you know, we're seeing tremendous response to the choice of products we've decided to build on these lines. Obviously, we're excited about that. We're going to continue to invest behind it. Got it. Thanks. Thanks for taking the question, guys. Thank you. Next question is coming from Veronika Dubajova from Goldman Sachs. Your line is now live. Hi, guys. Good morning, and thanks for taking my questions. I wanna start kind of big picture around the guidance, obviously, and two-parter if that's all right. One, just would love to understand, David, what you think the big variables are in terms of ending up at 7% or 9% in terms of the growth rate and where you sort of see, you know, the biggest upside opportunity. And then maybe challenge you a little bit. I noticed that you are assuming historical market growth in 2022. Clearly not every single market had recovered in the course of 2021. Just maybe talk through the rationale for putting that in as a baseline at this stage. Well, I think, you know, you've nailed the biggest variable, which is the market. I think, you know, it's hard to know exactly what's gonna happen. Perhaps we are a bit on the conservative side with mid-single digits. I think the view that we have is that, you know, there's gonna be some wraparound on some softer quarters, but that, you know, again, we're not all the way back yet either. You know, if you look at the market in the international markets in particular, India and a number of other big markets, Japan, are really not back to normal. It's gonna take them a little while to get there. Again, I don't know what that rate is. Now Europe bounced back nicely, I think in the third quarter for surgical, which was very exciting. Vision care, surprisingly strong in the Q4, up low single digits, which again, we hadn't seen or expected. I think kinda natural growth rate, if we can get it, is a pretty good, safe, you know, place to be, and we're gonna do well from there. Could it be higher than that? You know, we'll see. We also don't know that there isn't gonna be another variant, that there isn't gonna be some delay in markets coming back, and I would say particularly our international side. Understood. That's helpful. Quickly on contact lenses, just if you can clarify any stocking or destocking that happened in the Q4 that we should bear in mind. I know you've talked about hoping to put some price increases on the CL side to help you compensate for some of the raw material increases that you're seeing. Just would love to get an update on how that's gone and whether you've been able to realize some tailwinds there. Thanks. Yeah. On the stocking, there was some stocking by some of our competitors. As I understand it, we didn't do any, but I would say that had some effect on the market. It was quite a robust Q4 contact lens market. I think probably a little bit of that is some competitive activity. On the pricing piece, you know, we have put out a price increase late last year that goes into effect in February, so it's just in effect now. And we're still seeing how that takes. To be honest, you know, we're waiting to see the consumer reaction to that and we have a number of things that go on. As you know, we have a direct price. Of course, we have a discount to some of the chains and/or customers, and then, of course, there's always the consumer rebate piece that, you know, is in play here as well. We're toggling all of those little EQ switches, if you will, to see if we can't get the right mix to kind of maximize, you know, return here. We'll be fiddling with that probably through the, you know, rest of this quarter. Understood. Thanks, David. Thank you. Our next question today is coming from Larry Biegelsen from Wells Fargo. Your line is now live. Good morning. Thanks for taking the question, and congrats to a strong end to the year. One on the sales and EPS cadence for 2022 and one on the long-term operating margin. Maybe Tim can you talk about the cadence for sales and EPS in 2022? Q1 sales are usually down low single digits. You know, is that your expectation, you know, given the Omicron surge? I'm talking, you know, quarter-over-quarter. How does, you know, inflation and FX, you know, play into the cadence you're thinking about? I have one follow-up. You know, I would just say this. I think. Let's start with revenue. From a revenue perspective, you know, as you said, Q1 and Q3 tends to be a little lower for us in general. Q2 and Q4 are a little bit higher. If you think about Q2 allergy season as an example, Q4, you know, hospitals are working their capital budgets. You know, annual copays are being utilized by customers. I would expect to see a similar type of profile in 2022 as compared to 2021. SG&A is a little bit trickier. You know, we had a low spend in Q1 of last year. We weren't quite sure how the markets were coming back, so we were a little bit cautious there. I would just keep in mind Q2, as you know, typically, particularly on the vision care side, advertising promo is a little bit higher as we get ready for back to school and whatnot. SG&A, I think is a little bit trickier. As far as inflation, you know, you'll see more inflation, inflationary impact, which obviously will impact your EPS, in the H1 Of next year. Again, our assumption is that eases. In the H2 we look at indices, and we look at our inventory positions and what have you, to come up with that assumption, but that's the asumption that we've assumed as we talked about in the prepared remarks. Then FX, you know, you'll see more pressure in FX in the H1 of this year as compared to the H2. If you just go back, you know, the dollar really moved in kind of the summer timeframe in 2021. That's why the profile looks like it does. Those are the things I'd think about as you're trying to phase this out. Very helpful. Another one for you, Tim. You're guiding to about 100 basis points of operating margin improvement at the midpoint, I believe, and that's, you know, absorbing, you know, an FX headwind and an inflation headwind. How are you feeling about the low 20% operating margin goal in 2023 that you laid out at the Capital Markets Day? That's, you know, a pretty big jump from, call it, you know, 18.5% at the midpoint of the 2022 guide. Thanks for taking the question. Yeah. Larry, we still feel very good about the goal in 2023, and I think it's gonna be a lot of the same. I think we're gonna continue. As we continue to grow revenue, which we expect to do, we're gonna continue to get operating leverage. Then, you know, I think in 2023 as compared to 2022, we should get a little bit of gross margin lift. You know, again, we've got some inflationary pressure and other things going on this year. That should get a little bit better. I think it's more of the same, to be quite frank with you. Thanks a lot, Tim. Thank you. Our next question today is coming from Matthew Mishan from KeyBanc Capital Markets. Your line is now live. Hey, excuse me. Good morning. I'm just trying to understand the organic component of the guidance. We're estimating about 100 basis points of acquisitions underlying the 7%-9%, which means organic would be 6%-8%. First question, is that math correct? And then just the second question is, how do you put the 6%-8% growth in the context of, you know, your longer term, you know, 4%-6% mid-single digit market guidance. You know, what are the tailwinds driving above average growth this year? And maybe what are some of the headwinds you see moving forward that bring that back down? Let me take the second part of that first, and then I'll let you guys take the year-over-year comparison without acquisitions. I think on the sales growth, one of the things to think about is, of course, that, you know, the markets haven't fully recovered, and you're wrapping around some COVID-affected markets. You know, we're talking about directionally a mid-single digit market growth for this year. That's a little bit hotter than, you know, what we would typically call the surgical procedures market, for example. We've typically said that surgical procedure market kind of runs around 3%-ish. So, you know, we're seeing a hotter than expected market. That's what's driving up some of our near-term growth in this year. That will settle back, I suspect, over time, and we'll just have to see how and when that happens. Then additionally, you know, you've got some, you know, unique characteristics like the wraparound on, you know, some of the products that we've put in there that are new and that didn't have comparators. Yeah, I mean, the organic piece, we'd have it a little bit lower than the 1 point, but you're in the right zip code. Okay, excellent. Thank you. Thanks. Our next question is coming from Jeff Johnson from Baird. Your line is now live. Thanks, guys. Sorry, I was on mute there for a second. David especially, you know, you talked about the cataract market or the surgical market maybe being a little hotter this year than the normalized 3%. You know, would love to get your opinion on what you think the contact lens market might do this year. You know, historically, we think of that 4%-6%, but I know new patient starts have been compressed or depressed here for the last year or two. Just from a market standpoint, and I understand you obviously have some product launch tailwinds, but how are you thinking about contact lens market this year? Well, look, I mean, I think what we were excited about was to see the Q4 come back to 2019 levels all in. You know, that was. You know, we had said that earlier in the year, but then I think we hedged a little bit in the last call, thinking that it might take, you know, into the middle of this year even, or maybe end of this quarter before we saw it. We actually did see a return to 2019 levels at the end of last year, with international making a pretty big move sequentially from third quarter to Q4. I think our view kind of directionally going forward is that this will, you know, we see the contact lens market kind of up mid-single digits versus 2021. You know, we'll have to see how that takes shape exactly. Our belief right now is that there is you know enough kind of recovery of foot traffic and you know optometric visits that will drive the market. That also patients have found ways now to get existing patients have found ways to get lenses you know that are you know different than what they used to do. You know, they used to go every 90 days in and pick them up from the doc and drive themselves over to that office to do that. You know, people you know offices are sending them you know chains have you know refill programs. There's the online piece. There's a lot of existing business now that is being fulfilled in other ways, and I think that's actually been very good for the market. That leaves more room for patient visits for new and switch patients. I think even though we see today, for example, still visits down relative to 2019, what we believe right now is that that's not holding the market back, but the mix of what p-docs are seeing tends to be more productive. It's not just an annual visit, you know, where you get the same lens back. If you're not having any trouble, they're gonna bounce through that pretty quickly. It, I think that's giving us a little bit more room to grow this market. I think our view is, you know, mid-single digits% would be a pretty good number. That's a pretty traditional number, again, to your point of 4-6. That's probably where we see it. You know, could it be more than that? Yeah. Could it be less than that? Yeah. It seems like a pretty safe number for us for right now. That's helpful. Thank you. Just as a follow-up on pricing, you know, you talked about some things you're trying to do in contact lenses and fiddling around with things this quarter. How about pricing across the rest of the business on equipment, consumables, ocular health? Is there any pricing power there? As we think just across kind of the blended portfolio this year, you know, in a given year, what is normally the price tailwind to your growth rate in this year? How do you think that might vary kind of again across the whole business? Thanks. Yeah, I mean, I have to do that pretty qualitatively because it's a broad question. Let me directionally try and answer it. I think historically, our surgical business doesn't have a lot of price benefit to it. In fact, it has the opposite. It has a bit of price erosion that we continuously work against. Most countries lower prices. Most contracts as they come into us have an expectation that, you know, the prices will come down a little bit. What we have done to parry that is introduce new products. What has hit typically, we would describe as price benefit is usually mix. You know, we'll see a 1% or 2% price decrease every year. We'll get about a 1%-2% mix lift from introducing new material, new injector, new something. Because of the efficiency that product creates or the outcome that product creates, patients and docs are willing to pay for it. That's typically how the surgical business has run. I don't see that really changing much because most of that business is under a contract of some kind, and those contracts typically are beneficial to the customer. Price increases in the surgical business are more difficult in many ways. On the vision care side, I do think we're gonna see some at the consumer level that are acceptable. There hasn't been a lot historically. I can't remember the last time we took price in contact lens, not since I've been here, so that's at least five years. It's been a surprise in many ways at the fact that it never did, because many of our input prices have gone up during that stretch. Now this obvious bump up quickly in price or on prices for us, for our resins and for inputs around materials and labor, these have all been. We've been trying to figure out how to offset it. We're not gonna know until it gets to the consumer, and we're not gonna really know until we see what they do about it. We've passed through as much as we can, we think, is reasonable, and we'll be thoughtful about watching demand, you know, as it comes out. That was an across the line contact lens view for us. Then again, we put a little bit of price in, depending on which market you're in, on our eye drops business as well, but not a lot. That's kind of the landscape, if you will. I think probably as we get further into the year, we can give a little bit better insight as to how that's taken shape relative to volumes. Thank you. Thank you. Our next question today is coming from Cecilia Furlong from Morgan Stanley. Your line is now live. Great. Thank you for taking the questions. I wanted to ask about Vivity, specifically if you could walk through what you've seen from an adoption standpoint in international markets, as well as your outlook for further international market expansion in 2022. Yeah. Well, we're obviously very pleased with the uptake on Vivity. It's you know, PanOptix has been a terrific run for us, and it continues to be, I think, the PC-IOL of choice. Vivity has added a lot to our discussion, and I think what's been really unique about Vivity is for physicians who really have been concerned about halos and glare or who've had problems with it in the past, this is a very monofocal-like lens. It doesn't take a lot more to put this lens in than it would a normal monofocal. Surgeons are very comfortable and confident with this lens, and it gives a very good intermediate vision, and about half the patients are getting you know, reading without glasses. This is a kind of a no risk win for a lot of people, and that's, I think, what's been appealing about it for, maybe for surgeons who are dabbling in the, PC-IOL business or have been concerned about it in the past. What we've seen is, the first place this seems to do well is in existing PC-IOL surgeons who, you know, for whatever reasons, have excluded patients. A lot of times they'll exclude patients with other pathologies like a retinal disease or anything that you have to see through to the back of the eye on, because the diffractive lenses make that a little bit difficult. This is a really good choice for them. That adds some patients back into their practice. They're used to using it. As they've come along with that, they've also begun to think about, you know, if they were excluding patients who they thought were unlikely to tolerate kind of halos and glare, they've added those patients in. It's been expansive for our existing surgeons. Now as we move, you know, kind of out from there, we begin to add new surgeons in, and I think that's really what our intention is going forward, is to try and bring more people into Vivity that haven't really been in the PC-IOL world in the past. You know, what you're gonna see, I think, going forward is us focusing on penetration of PC-IOLs and using Vivity largely as that entry point, because I think it gives us a relatively safe way for people to start down this path. You know, PanOptix in the end, you know, is a perfect complement once you get comfortable with Vivity and you wanna continue to move on. Vivity is a natural for those patients who, you know, docs are comfortable putting in a monofocal toric. Well, you know, then put in Vivity toric because of course it's just really not any different in terms of your mechanism or process, and you get a lot better reading and intermediate vision. That's been our sweet spot for Vivity internationally. We'll just see. I think the international market is moving nicely, similar to the United States in penetration, not quite as fast, but both markets have been moving up in penetration at a higher than historical average. Great. Thank you. I wanted to ask on TOTAL30 as well, if you could just walk through what you've seen, just initial days post-launch, and then your expectations for share capture in that segment of the market going forward. Thank you. Yeah. Early days on T30 are terrific. I mean, this, you know, one of the things that we kind of maybe underestimated about T30 was how much good news in an old market can matter. I think we, you know, when we go and you talk about reusable lenses, it's a flat market directionally, but it's also a $4 billion market. About every other patient that docs are starting is going into a reusable lens. So when you go in and you say, "Hey, look, we, you know, we've got, we've figured out how to put our Water Gradient Technology onto a reusable lens," docs really know that technology, and they really enjoy it from TOTAL1. When we say, "Well, you can wear this TOTAL30 lens and feel like on day 30 it's the same as on day one," that's pretty impressive to both patients and the docs. We've had a really positive response to it because the optometrists know the technology. They're surprised we can do it for 30 days. They've tried it, and I think the trials are working out quite well. We're optimistic about what this can do. You know, we have a low share in this category in our minds. You know, it's a mid-teen share. You know, the way we think about it, there's a significant upside to the share potential in a market that's really been underserved technology-wise. We feel pretty good about what the potential of this is and how it's moving so far. Great. Thank you. Thank you. Next question today is coming from Chris Cooley from Stephens. Your line is now live. Good morning, and thanks for taking the questions. Congratulations again on a solid year in a tough environment. David, if I may just for my first question, could you just help us think a little bit bigger picture here as you talk about the margin goal? In a prior question, you guys alluded that you felt good about that low 20s op margin goal in 2023. But I'm just curious, you know, how are you thinking about new technologies in this space, and specifically that required investment? You know, how much of that is implicit in your getting to that low 20s op margin goal? Or are you really thinking about getting to that level more so on just absorption of capacity, you know, reduction in inflationary headwinds and stronger operating volumes? I've just got a quick follow-up. Yeah, Chris, I mean, a little bit on. I know we get a little bit of benefit from the last bit of this, but really the thesis that we have on getting, you know, really into the low twenties, you know, is entirely consistent with where we started, which is we're gonna grow our way there. It's mostly operating leverage. I think it's probably 80% operating leverage and maybe 20% improvement gross margin. I think what you're gonna, you know, you're gonna see is that new technologies and new products are exactly the way we get there. What we found right now is that we've got the right amount of money moving into the P&L, and our transformation has allowed us to enrich without necessarily increasing, you know, the productivity of the spend that we have. Remember that we've moved almost $200 million out of what I'd loosely call back office and less productive uses and into R&D and commercial support. Again, we're finding that our S&M spend, for example, is able to increase without necessarily increasing our total functional costs. You know, not at the same rate. We think we can hold total functional costs below the growth of the revenue line, and that is in essence how we're getting, you know, the op margin goal to the largest extent. You know, it does lean on sales growth, and you know, that's partly why we're positive around the forecast we're giving right now. I think as we think about 7% or 9% this year and the return of markets and our market position, we come in with a lot of momentum right now around some really good products. We probably have five products that are gonna get a full year effect of growth this year, and we're pretty excited about that. I think that's what we had intended to do, and it is indeed what we find ourselves in the position to do now for the next 24 months, is really ride a lot of really great products, you know, through the next 24 months. I appreciate that color. Then just as a quick follow on to that, you obviously have a strong pipeline, but there's a tremendous amount of innovation in the ophthalmic space right now as well. I noted in your press release last night, you called out $1 billion in capacity. If we think about future M&A, you know, you had Simbrinza as a product. You've had Ivantis with the Hydrus, all above corporate gross margin type products with good growth profiles. Should we continue to think about maybe more of a pharmaceutical bent, again, higher type margin profile business that drives better cash? Or are you looking for more kind of emerging technologies as you go forward that you can leverage the existing sales and marketing infrastructure? Thanks so much. Yeah, well, a little bit of both, Chris, and let me just say it this way. I think that, you know, as we reflect on where we are, we feel very comfortable that we have the right investment organically in R&D and the right product flow and pipeline to get us to our goals, you know, without doing anything externally. I would say though that we do have capacity, and we have every intention of using you know that capacity to continue to build our business. To the extent that we, you know, see opportunities, we're gonna do them. The thing I would mention though is that we've been pretty disciplined really since we came out about what we looked at and what we chose to do. I do think that you should, you know, consider that we're likely to stay pretty close. You know, we're gonna be in eye care. We're gonna look for white spaces. We're gonna look for opportunities like Hydrus or other technologies that could enhance our long-term picture. We will look at pharma, but it's not a high need thing. We're gonna do it as we see fit and as we can do a good job of bringing in value. We have the capacity at this point to take on more pharma. So, if you're asking, part of that question, I think was, is it gonna cost us more, you know, to put people on the ground to kind of support higher growth? I think the answer to my way of thinking is in the United States, we've already done that by getting this ophthalmic eye drops group out there selling Simbrinza, selling our sustained multi-dose preservative free products and selling Pataday. You know, like a sales force we can, we can then rotate those products as they mature. There won't be incremental costs, you know, in the way at which you'd be starting up something. I feel good about our platform right now, having already established it. If we were to bring something into the pharma space, I think that group could handle it. And then going forward, you know, we obviously have a lot of capacity to bring on devices in either vision care or surgical. I don't see a need to necessarily add a bunch there. Thank you. Thank you. Our next question today is coming from Chris Pasquale from Guggenheim. Your line is now live. Thanks. A couple of model detail questions for Tim. You know, at the capital markets day last year, you talked about a 20% tax rate through the planning period, came in lower in 2021. Now we're looking at a high teens number for 2022. Can you go into more detail on why it's moving lower and whether this new range is sustainable? During the capital markets day, to your point, we were at 20%. The biggest change there are really two things. One is this tax agreement that we just settled in Q4 in Switzerland, that drives a favorable rate benefit, and that does carry forward to next year. Then we had a favorable geographical mix of our profits in 2021. Going forward, I would think of it as, you know, 18. I'd take the midpoint of our range. You know, I'm a big fan of the midpoint, so we guided 17%-19%. The reason it goes up are really twofold. One is we have some benefits related to inventory buildups in our affiliates in 2021. We haven't anticipated that that carries forward. There may be a potential one-off negative impact linked to a tax agreement that we're working with between the U.S. and Switzerland. That would be a one-time item, but it would occur in 2022. We've assumed that happens. Again, I think the short story is I'd take the midpoint of that 17%-19%. Okay. The $180 million-$190 million in interest and other expense, does that include the above the line other expense, or is that all below the line? Just trying to figure out whether the comparable in 2021 is $162 million or $194 million. It'd be comparable to your $162, and there's two things that are in there. We've baked in some rate increases given the environment, and then our hedging costs are in that line as well, and we've anticipated some higher hedging costs as we grow in some of the markets that are a little bit more challenging, if you think about Russia, if you think about Argentina and places like that. Okay, thanks. Thank you. Our next question today is coming from Daniel Buchta from ZKB. Your line is now live. Thank you very much. Thank you, gentlemen, for taking my two questions. The first one may be on Ivantis, which is closed now since early this year. I mean, now since you have detailed insights, I mean, can you share a little bit more light on how you see this acquisition? I mean, I assume because you know that business from the former CyPass product you had, quite meaningful sales synergies and with that, say for example, until 2025, I mean, how meaningful could that business become? The second question may be on consumer openness or willingness to consider switching contact lenses from one to another and pay maybe more for innovation like for PRECISION1. How do you see this developing now into 2022 and maybe also the years beyond since we hopefully left COVID-19 behind? Thank you very much in advance. Sure. Let me start with Ivantis. We are very excited about the Ivantis product and the acquisition we made. We think we have added something that was really well timed for us and for everybody. One of the exciting timings of this was the publication of their five-year continuous follow-up randomized clinical trial. The reason this matters is because I think that it is very difficult sometimes to convince folks of the efficacy and safety of products, and we had been involved in this market before, and that was one of the core ideas. What this data basically says, as I said in my opening remarks, is that more than 60% of patients, 65% of patients are medication free at five years. That's a monstrously beneficial thing for patients to not have to put in eyedrops. It's economically beneficial for the systems that are involved in it, and it creates the kind of health economics data that says, you know, this is a good thing for patients, it's a good thing for the systems, and people should be doing this if you have glaucoma, you know, in that kind of mild to moderate frame. I think what we also wanted to say was, you know, that same data coming out of there, you know, talks to the fact that these patients, if you put a stent in the eye, do not go on to have a second surgery. If you think about what that means, the untreated patients were going on to have a surgery 60%+ of the time, as opposed to the stent patients. That's another surgery for the patient. It's cost to the system again. It's a lot of things that we had hoped to see came through this data. I think people, as they begin to really understand that data, and we'll be at the Nashville American Glaucoma Society meeting next week, really trying to help people grab a hold of this thing and understand both the economics of it and the patient impacts of this. We think this is a big deal, and we think the market is $500 million right now. We start into this with a $60 million head start, and we're just getting started. I think, you know, the opportunity here is to see this market grow nicely. It's historically grown in the low teens. I think obviously some of the reimbursement issues that, you know, finished out late last year will dampen that growth a little bit. You know, we expect to see meaningful growth on a relatively good-sized market where, you know, we have a starting position. You know, you'll have to do your own thinking about how well we can do, but I'm optimistic about the impact of that product, you know, on the, frankly, on the well-being of patients out there with glaucoma. Secondly, you know, on the consumer switch piece, you know, I don't know that there, you know, that there's a big change coming off of COVID around switching. If you're in a lens that you like and you don't have any trouble, you know, the fact of the matter is most optometrists are not gonna switch you. They're gonna write you another prescription, send you on your way, and get on to doing something else. I think that the normal course of business, which has been, you know, kind of three-four out of 10 patients that walk in the office are either a new patient or a switch potential because they're having a problem, they're in a new doc office, they wanna get to dailies 'cause they just, for whatever reasons, they wanna do that. That's pretty much the math. You know, is kind of three or four in 10, and that means, you know, six or seven in 10 are not switching. Remember this market moves a little bit slow, this for this reason, but it's also very durable for this reason. I think what we get, you know, excited about is, you know, we're winning in the switch and new fit area. We are doing very, very well in that space. Over time, we expect to have a very durable business in these new products, and so I'm excited about where that moves. Thank you very much. Very helpful. Thank you. Our next question today is coming from Julien Dormois, from BNP Paribas. Your line is now live. Hi, good morning, David, good morning team. Thank you for taking my two questions. The first one relates to the surgical market. The way you described that it should be pretty strong into 2022. I was just curious whether this market could be even stronger without some of the staff shortages that apparently some ECPs are going through in the U.S. or in Europe. Also in terms of the supply chain challenges that you guys and your competitors might be experiencing or is all of the previous just irrelevant to the growth in this market at the moment. The second question is how we should think about the growth for the equipment business specifically after a very strong 2021. Do you think there is a comp effect here to be feared, and whether this could still deliver growth in 2022? Yeah. Thanks, Julien. Let me start with the surgical business. You know, you're exactly right. I think one of the challenges in the surgical business right now. You know, there's been two. Initially, you know, there was a lot of turnover in staff. Then I think even in the Q4, though it stabilized a little bit. You know, you saw people having to step out for a week, you know, because they got COVID or two weeks till they got better. You know, that kind of interruption of staff and staffing, to the extent it settles down, will improve capacity going forward. I do think there remains a basic capacity problem internationally, which means, you know, there just isn't a lot of extra OR time given a lot of this is done in the hospital internationally, and, you know, you're having to share and work with a lot of other people who are trying to also do new procedures. There is going to be, I think, a stabilization of staffing over time. Again, it isn't there yet, so we're still working through interruptions and depending on where you are in the world, how that looks. I think the surgical market does get better. Again, we forecasted it a good bit better than what I'd loosely call historical rates. I think it's, you know, mid-single digits would be a couple points up from historical rates. Some of that's because you see some easier comps in the first quarter and also because you see some return of capacity that will help push it up a little bit. I think we feel good about the market and its potential. We have yet to see how that plays out. Obviously, we're making some assumptions around the lack of disruption as we go forward. On the equipment piece, you know, equipment, we had a terrific year in equipment last year. I mean, we had a banner year for our phaco equipment, which, you know, again, given the competitive set, we're very pleased how many people chose to go with the market leader, and the equipment we sell out there is still unsurpassed in its technologies. We're excited about that. I think additionally, you know, it's what's been kind of gratifying is to get a biometer out there that is really doing well head-to-head with our competitors. The ARGOS biometer, we're very excited about what it can do. It seems to be faster, seems to be easier to use, seems to get through dense cataracts better. We're really pleased with the uptake on those things. Now, I caution though that, you know, there's been a couple of years now of equipment that looks like it's over the historical average by a fair bit. Some of that was refractive early on, and some of it now has just been an enthusiasm for getting our new ORs and returning into a more normal world. I think given the size of the year we had last year, you know, we'd have a great year if we moved sideways on equipment. I would think about equipment this year as being likely, you know, a kind of a net neutral year on year. If we could accomplish that, I'd be pretty excited about it. It has some chance to be, probably has more chance of being a headwind than a tailwind, let me say it that way. We'll see because it, you know, we just sold a ton of equipment over the last two years. Thank you. We've reached the end of our question and answer session. Ladies and gentlemen, that does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.