Sotera Health Company · NASDAQ:SHC
Sotera Health — Q2 2024 Earnings Presentation
23 slides from Sotera Health's earnings presentation, Aug 5, 2024
Slide 1: Second-Quarter 2024 Earnings Results
Second-Quarter 2024 Earnings Results AUGUST 5, 2024
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 50+ 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 • Nelson Labs is performing critical biosafety testing on the first-ever expandable heart valve for pediatric congenital heart patients • The Autus Valve grows with the child to reduce the number of heart surgeries needed over the
Slide 7: Q2 2024 Highlights
Q2 2024 Highlights Business & Market Update Financial Performance • Total company revenue and Adjusted EBITDA growth compared to Q2 ‘24 vs Q2 ‘23 Q2 2023 Net Revenues 8.3% to $277M • Sterigenics and Nelson Labs volume improvement vs the prior-year (1) quarter Adjusted EBITDA 6.9% to $137M • Nordion
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Q2 & YTD 2024 Consolidated Financial Performance
Q2 & YTD 2024 Consolidated Financial Performance $ In millions, except Adjusted EPS Second Quarter Year-to-Date $255 +8% $277 $476 +10% $525 Revenue 2023 2024 2023 2024 $128 +7% $137 $227 +10% $249 Adjusted EBITDA(1) 50.3%(2) 49.7%(2) 47.7%(2) 47.5%(2) 2023 2024 2023 2024 $0.20 -5% $0.33 -3% $0.32 $
Slide 10: Sterigenics Q2 2024 Financial Performance
Sterigenics Q2 2024 Financial Performance $ In millions Second Quarter Year-to-Date Revenue +5.9% Revenue +5.0% Segment income(1) +5.8% Segment income(1) +4.8% $176 $343 $167 $327 $91 $97 $174 $183 54.9%(2) 54.9%(2) 53.4%(2) 53.3%(2) 2023 2024 2023 2024 Revenue Segment Income Revenue Segment Income
Slide 11: Nordion Q2 2024 Financial Performance
Nordion Q2 2024 Financial Performance $ In millions Second Quarter Year-to-Date Revenue +29.0% Revenue +61.0% Segment income(1) +31.7% Segment income(1) +77.1% $65 $41 $32 $41 $23 $34 $18 $19 55.6%(2) 56.8%(2) 47.6%(2) 52.4%(2) 2023 2024 2023 2024 Revenue Segment Income Revenue Segment Income (2) 44
Slide 12: Nelson Labs Q2 2024 Financial Performance
Nelson Labs Q2 2024 Financial Performance $ In millions Second Quarter Year-to-Date Revenue +4.0% Revenue +7.3% Segment income(1) -11.0% Segment income(1) -2.6% $117 $59 $109 $57 $19 $17 $33 $32 33.9%(2) 29.0%(2) 30.7%(2) 27.8%(2) 2023 2024 2023 2024 Revenue Segment Income Revenue Segment Income • R
Slide 13: Net Leverage, Liquidity and Investments
Net Leverage, Liquidity and Investments $ In millions Liquidity Net Leverage (1) Capital Expenditures (2) $98 $696 $646 3.8x 3.8x 3.2x $77 $477 $400 $81 $400 $395 $296 $246 12/31/22 12/31/23 6/30/24 12/31/22 12/31/23 6/30/24 YTD 2023 YTD 2024 (3)(4) Unrestricted Cash and cash equivalents Revolver Av
Slide 14: 2024 Outlook
2024 Outlook On the following slides, Sotera Health presents an overview of its full-year 2024 outlook, including certain non-GAAP financial measures. As outlined in the Company’s August 5, 2024 press release, Sotera Health does not provide a reconciliation of the forward- looking Adjusted EBITDA, A
Slide 15: Reaffirming Full-Year 2024 Outlook
Reaffirming Full-Year 2024 Outlook (1) FY 2024 Outlook Net Revenues +4.0% to +6.0% Adj EBITDA(2) +4.0% to +6.0% Interest Expense $165M to $175M Adj NI Tax Rate(2) 31.5% to 34.5% Adj EPS(2) $0.67 to $0.75 Weighted Avg. Diluted 283M to 285M Shares Capital Expenditures $205M to $225M (1) The outlook pr
Slide 16: Other 2024 Guidance Items
Other 2024 Guidance Items (1) • FY ‘24 Adjusted EBITDA margin rates expected to sequentially improve throughout the year; FY ‘24 Adjusted EBITDA margins approaching 50% Total Company • Assumed foreign exchange rates as of 6/30/24 remain constant for remainder of the year • No M&A activity assumed •
Slide 17: Appendix
Appendix Sotera » Health
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures (unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands, except per share amounts) 2024 2023 2024 2023 Net income $ 8,754 $ 23,513 $ 15,077 $ 26,355 Amortization of intangible assets 19,755 20,502 39,879 41,109 Share-based compensation(a) 1
Slide 19: 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 write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans and the Secure
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (a) Represents Adjusted EBITDA for the years ended December 31, 2022, December 31, 2023 and the twelve months ended June 30, 2024, respectively. Refer to the reconciliations of Adjusted EBITDA to net income (loss) for additional detail. 19
Slide 21: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Twelve months Twelve months ended December 31, ended June 30, 2022 2023 2024 Net income (loss) $ (233,570) $ 51,376 $ 40,098 Amortization of intangible assets 81,554 81,348 80,118 Share-based compensation(a) 21,211 32,364 35,470 Loss on refinancing of debt(b)
Slide 22: 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 write-off of unamortized debt issuance costs and discounts, as well as certain other costs incurred related to the Refinancing Term Loans and the Secure
Slide 23: 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
Sotera Health Company — Q2 2024 Earnings Presentation on 6ix