Sotera Health Company · NASDAQ:SHC
Sotera Health — Q3 2023 Earnings Presentation
22 slides from Sotera Health's earnings presentation, Nov 1, 2023
Slide 1: Third-Quarter 2023 Earnings Results
Third-Quarter 2023 Earnings Results NOVEMBER 1, 2023
Slide 2: Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures
Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures Unless expressly indicated or the context requires otherwise, the terms “Sotera Health,” “Company,” “we,” “us,” and “our” in this document refer to Sotera Health Company, a Delaware corporation, and, where appropria
Slide 3: Speakers
Speakers Michael B. Petras, Jr. Chairman and Chief Executive Officer Jonathan M. Lyons Senior Vice President and Chief Financial Officer 2
Slide 4: Safeguarding Global Health Through Our Sterilization Services, Lab Testing and Advisory Services
Safeguarding Global Health® Through Our Sterilization Services, Lab Testing and Advisory Services What we do… …and how we do it… …leads to strong results Leader in sterilization services Provide mission-critical services to blue chip Annual revenue growth every year since customers with multi-ye
Slide 5: Our Customers Trust and Value Our Expertise
Our Customers Trust and Value Our Expertise 5,000+ customers 900+ Customers laboratory located in 65+ tests countries Safeguarding Global Health® Deep market focus Customers include Significant industry expertise Customers include over 40 of top 9 of top 10 50 medical device End-to-end solutions pha
Slide 6: Safeguarding Global Health
Safeguarding Global Health® • Our Mission is at the heart of our work across Sotera Health. • Our mission-critical services help to ensure the safety of healthcare and protect the lives of millions around the world. • Click here to view an example of our mission in action where our team at Nordion p
Slide 7: Q3 2023 Highlights
Q3 2023 Highlights Business & Market Update Financial Performance • Revenue, Adjusted EBITDA and Adjusted EBITDA margin Q3 ‘23 vs Q3 ‘22 improvement versus both Q3 2022 and Q2 2023 Net Revenues 5.8% to $263M • Nordion Co-60 supply on track to deliver on FY ‘23 expectations (1) Adjusted EBITDA 7.3% t
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Q3 & YTD 2023 Consolidated Financial Performance
Q3 & YTD 2023 Consolidated Financial Performance $ In millions, except Adjusted EPS Third Quarter Year-to-Date $249 +6% $263 $752 -2% $739 Revenue 2022 2023 2022 2023 $125 +7% $134 $377 -4% $361 Adjusted EBITDA (1) 50.3%(2) 51.0%(2) 50.1%(2) 48.9%(2) 2022 2023 2022 2023 $0.72 $0.23 -9% -24% $0.55 $0
Slide 10: Sterigenics Q3 2023 Financial Performance
Sterigenics Q3 2023 Financial Performance $ In millions Third Quarter Year-to-Date Revenue +7% Revenue +6% Segment income (1) +9% Segment income (1) +7% $168 $465 $495 $158 $86 $93 $250 $267 54.3%(2) 55.3%(2) 53.8%(2) 54.0%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Reven
Slide 11: Nordion Q3 2023 Financial Performance
Nordion Q3 2023 Financial Performance $ In millions Third Quarter Year-to-Date Revenue +14% Revenue -33% Segment income (1) +19% Segment income (1) -37% $120 $40 $35 $81 $69 $24 $20 $43 57.9%(2) 60.0%(2) 57.9%(2) 53.8%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Revenue in
Slide 12: Nelson Labs Q3 2023 Financial Performance
Nelson Labs Q3 2023 Financial Performance $ In millions Third Quarter Year-to-Date Revenue -2% Revenue -2% Segment income(1) -11% Segment income (1) -12% $56 $55 $168 $163 $19 $17 $57 $50 (2) 34.5%(2) 31.3%(2) 34.2% 30.9%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Revenue
Slide 13: Net Leverage, Liquidity and Investments
Net Leverage, Liquidity and Investments $ In millions Liquidity Net Leverage (1) Capital Expenditures (2) $1,007 4.2x 4.2x $150 $359 3.4x $111 $635 $645 3.2x $477 (3) $81 $408 $372 $400 $395 $240 $263 $245 12/31/22 3/31/23 6/30/23 9/30/23 12/31/22 3/31/23 6/30/23 9/30/23 YTD 2022 YTD 2023 (4)(5) Unr
Slide 14: 2023 Outlook
2023 Outlook On the following slide, Sotera Health presents an overview of its full-year 2023 outlook, including certain non-GAAP financial measures. As outlined in the Company’s November 1, 2023 press release, Sotera Health does not provide a reconciliation of the forward-looking Adjusted EBITDA, A
Slide 15: Full-year 2023 Outlook
Full-year 2023 Outlook (1) FY 2023 Outlook YoY% Revenue $1.035B to $1.055B +3% to +5% Adj EBITDA(2) $520M to $535M +3% to +6% Adj NI Tax Rate(2)(3) 30% to 32% ~+400bps to ~+600bps Adj EPS(2) $0.78 to $0.86 -10% to -19% Weighted Avg. 283M to 285M +1% to +2% Diluted Shares Capital Expenditures $200M -
Slide 16: Appendix
Appendix Sotera » Health
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures (unaudited) Three Months Ended Nine Months Ended September (dollars in thousands, except per share amounts) September 30, 30, 2023 2022 2023 2022 Net income $ (13,660) $ 25,090 $ 12,695 $ 86,149 Amortization of intangibles 20,181 20,219 61,290 61,596 Share-based compensat
Slide 18: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (a) Represents share-based compensation expense to employees and non-employee directors. (b) Represents the effects of (i) fluctuations in foreign currency exchange rates, (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer an
Slide 19: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (unaudited) (dollars in thousands) Twelve Months Ended September 30, December 31, 2023 June 30, 2023 March 31, 2023 2022 Net loss $ (307,024) $ (268,274) $ (261,369) $ (233,570) Amortization of intangible assets 81,248 81,286 81,979 81,554 Share-based compensa
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (a) Represents share-based compensation expense to employees and Non-Employee Directors. (b) Represents the effects of (i) fluctuations in foreign currency exchange rates, and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain custome
Slide 21: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) As of September 30, As of June 30, As of March 31, As of December 31, 2023 2023 2023 2022 Current portion of long-term debt $ 5,235 $ 5,225 $ 4,031 $ 197,119 Long-term debt less current portion 2,222,789 2,221,987 2,222,333 1,747,115 Current portion of finance
Slide 22: Non-GAAP Financial Measures Definitions
Non-GAAP Financial Measures Definitions • Adjusted Net Income is defined as net income (loss) before amortization and certain other adjustments that we do not consider in our evaluation of our ongoing operating performance from period to period. • Adjusted EBITDA is defined as Adjusted Net Income be
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