Sotera Health Company · NASDAQ:SHC
Sotera Health — Q1 2024 Earnings Presentation
23 slides from Sotera Health's earnings presentation, May 2, 2024
Slide 1: First-Quarter 2024 Earnings Results
First-Quarter 2024 Earnings Results MAY 2, 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 • Nordion supplies high-specific activity (HSA) Cobalt-60 to use in Gamma Knife® radiosurgery for the precision treatment of brain cancer • Our industry-leading expertise in science, logistics, safety and quality allow us to deliv
Slide 7: Q1 2024 Highlights
Q1 2024 Highlights Business & Market Update Financial Performance Q1 ‘24 vs Q1 ‘23 • Top- and bottom-line growth compared to Q1 2023 • Nordion revenue more normalized vs. a light quarter in the Net Revenues 12.5% to $248M prior year due to timing of reactor harvest schedules Adjusted EBITDA (1) 13.7
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Q1 2024 Consolidated Financial Performance
Q1 2024 Consolidated Financial Performance $ In millions, except Adjusted EPS and Adjusted EBITDA margin Revenue Adjusted EBITDA (1) +13% $248 +14% $112 $221 $98 44.6%(2) 45.1%(2) 2023 2024 2023 2024 Adjusted EPS (1) $0.13 $0.13 2023 2024 (1) This is a non-GAAP financial measure. Please refer to Non
Slide 10: Sterigenics Q1 2024 Financial Performance
Sterigenics Q1 2024 Financial Performance $ In millions Revenue +4.1% Segment income(1) +3.6% • Revenue growth for the first-quarter $160 $166 2024 was driven by favorable pricing and changes in foreign currency rates, partially offset by unfavorable volume $83 $86 and mix • Segment income growth fo
Slide 11: Nordion Q1 2024 Financial Performance
Nordion Q1 2024 Financial Performance $ In millions Revenue +181% Segment income(1) +607% $24 First-quarter 2024 was more normalized versus first-quarter 2023 as revenue, $11 segment income and segment income $9 margin growth were driven by favorable $2 (2) volume and mix related to the timing of 44
Slide 12: Nelson Labs Q1 2024 Financial Performance
Nelson Labs Q1 2024 Financial Performance $ In millions Revenue +10.8% Segment income(1) +8.8% $58 $52 Revenue and segment income growth for the first-quarter 2024 were driven by volume and mix improvements as well $14 $15 as favorable pricing (2) 27.1%(2) 26.6% 2023 2024 Revenue Segment Income (1)
Slide 13: Net Leverage, Liquidity and Investments
Net Leverage, Liquidity and Investments $ In millions Liquidity Net Leverage (1) Capital Expenditures (2) $45 $696 $661 3.8x 3.8x 3.2x $35 $477 $400 $400 $81 $395 $296 $261 12/31/22 12/31/23 3/31/24 12/31/22 12/31/23 3/31/24 Q1 2023 Q1 2024 (3)(4) Unrestricted Cash and cash equivalents Revolver Avai
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 May 2, 2024 press release, Sotera Health does not provide a reconciliation of the forward- looking Adjusted EBITDA, Adju
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 $170M to $180M 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) • Slightly less than 45% of full-year Adjusted EBITDA to occur in 1H • Expect to be on the lower-end of long-term stated price range of 3.5% - 5.0% Total Company • FY Adjusted EBITDA margin rates to be similar to 2023 • Q2 year-over-year margin rates expected to be down
Slide 17: Appendix
Appendix Sotera » Health
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures (unaudited) (dollars in thousands, except per share amounts) Three Months Ended March 31, 2024 2023 Net income $ 6,323 $ 2,842 Amortization of intangible assets 20,124 20,607 Share-based compensation(a) 8,657 7,348 Loss on foreign currency and derivatives not designated a
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 effects of (i) fluctuations in foreign currency exchange rates and (ii) non-cash mark-to-fair value of embedded derivatives relating to certain customer
Slide 20: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) As of December 31, As of March 31, 2022 2023 2024 Current portion of long-term debt $ 197,119 $ 4,797 $ 4,808 Long-term debt less current portion 1,747,115 2,223,674 2,224,611 Current portion of finance leases 1,722 8,771 1,490 Finance leases less current port
Slide 21: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) Twelve Twelve months ended months ended December 31, March 31, 2022 2023 2024 Net income (loss) $ (233,570) $ 51,376 $ 54,857 Amortization of intangible assets 81,554 81,348 80,865 Share-based compensation(a) 21,211 32,364 33,673 Loss (gain) on foreign currenc
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 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 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
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