Sotera Health Company · NASDAQ:SHC
Sotera Health — JP Morgan Healthcare Conference 2022
21 slides from Sotera Health's conference presentation, Jan 11, 2022
Slide 1: JP Morgan Healthcare Conference
JP Morgan Healthcare Conference MICHAEL B. PETRAS, JR. CHAIRMAN AND CHIEF EXECUTIVE OFFICER January 11, 2022
Slide 2: Unless expressly indicated or the context requires otherwise, the terms “Sotera Health,” “Company,” “we,”
2 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 appropriate, its subsidiaries on a consolidated basis. This presentation contains forward-lo
Slide 3: We are driven by our mission: Safeguarding Global Health
3 We are driven by our mission: Safeguarding Global Health® OVERVIEW
Slide 4: What we do, how we do it, leads to strong results
4 What we do… …and how we do it… …leads to strong results What we do… …and how we do it… …leads to strong results Leader in lab testing and advisory services Provide mission-critical services to blue chip customers with multi-year contracts Unmatched network of local facilities to support custom
Slide 5: Safeguarding Global Health Video
Safeguarding Global Health® Video 5 https://investors.soterahealth.com/events-and-presentations
Slide 6: Our breadth of services touches all key medical device and pharmaceutical categories
6 Inhalation Injectables Biologics Ophthalmic Oral Topical Suppository In-vitro diagnostics and analytical tools Orthopedic and ophthalmic implants Drug delivery Collection Swabs Personal protective equipment Endoscopy Cardiovascular implantables Medical device Pharmaceutical Vascular catheters Surg
Slide 7: Total and Serviceable Addressable Markets (TAM & SAM)
Total Sotera Health ~$33 billion Total Addressable Market (TAM)(1) ~$11 billion Serviceable Addressable Market (SAM)(1)(2) (1) 2019 Management estimated total and serviceable addressable markets for in-house and outsourced terminal sterilization and outsourced medical device and pharmaceutical lab t
Slide 8: Long-Term Revenue Growth and Margin Expansion Algorithm
Operating Leverage Operational Excellence Price 8 High single-digit organic growth Margin Expansion Drivers(1)(2) Long-Term Revenue Growth Algorithm results in High-Single Digit Organic Growth(1) Margin Expansion Algorithm ~3.5% -5.0% Price growth Mid to high single-digit volume & mix % growth Price
Slide 9: Strong track record of driving inorganic growth through M&A
9 Safeguarding Global Health® Leading global provider of Co-60 >58% segment income margin(1)(2) Leader in lab testing and advisory services >41% segment income margin(1)(2) Transformational acquisitions Bolt-on acquisitions Europe 2014 2016 2014 2016 2017 2018 2020 202120152013 We expect to continue
Slide 10: Our values drive our business and guide our ESG strategy
10 We are uncompromising in our commitment to health and well-being We value our people who are part of a global team that is diverse, respectful, passionate and collaborative We exceed the expectations of our stakeholders and continue to improve and innovate in everything we do Safety Customer focu
Slide 11: ESG strategy and recent accomplishments
11 • Launched ESG journey in 2021 with Board and Nominating & Corporate Governance committee oversight — NCG Committee Chair has deep expertise in ESG — ESG is a standing Board agenda item — Created internal ESG Committee with Executive Management leadership and CEO sponsorship • Multi-year strategy
Slide 12: Financial Overview
12 Growth drivers translate to long-term value creation FINANCIAL OVERVIEW
Slide 13: Financial results and Adjusted EBITDA
13 (1) 2018 Net Revenues, Adjusted EBITDA, and Adjusted EBITDA margin exclude the Medical Isotopes business which was divested in July 2018 (denoted as “Other” in the notes to the Company’s financials). Medical Isotopes represented Net Revenues and Adjusted EBITDA of $25.4M and $4.9M, respectively i
Slide 14: Capital expenditures and net leverage
14 (1) Long-term target is forward-looking and reflects expectations as of January 11, 2022. Sotera Health assumes no obligation to update this statement. Results may be materially different and are affected by many factors detailed in Sotera Health’s SEC filings, including Sotera Health’s 2020 Form
Slide 15: Platform geared for continued M&A
15 Platform geared for continued M&A 2 transformational and 9 bolt-on acquisitions(4) Operational excellence Contributes to industry leading margins Trusted global partner at scale 50 sterilization facilities 15 lab and Expert Advisory Services facilities Strong industry dynamics Essential and regul
Slide 16: Appendix
Appendix Y Sotera - Health
Slide 17: Adjusted Net Income and Adjusted EBITDA reconciliation
Year Ended December 31, Twelve Months Ended March 31, Twelve Months Ended June 30, Twelve Months Ended September 30, 2018 2019 2020 2021 2021 2021 Net (loss) income $ (5,876) $ (20,425) $ (37,491) $ (24,440) $ 10,922 $ 37,738 Amortization of intangible assets 79,906 80,048 80,255 82,624 84,691 85,73
Slide 18: Reconciliation footnotes
(a) Represents impairment charges related to the decision to not reopen the Willowbrook, Illinois facility in September 2019. For 2018, represents impairment charges associated with the withdrawal of the GA-MURR project. (b) Represents the gain on the divestiture of the Medical Isotopes business in
Slide 19: Quarterly and nine-month reconciliation
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income $ 27,444 $ 629 $ 81,124 $ 5,895 Amortization of intangibles 21,239 20,200 65,299 59,824 Share-based compensation(a) 3,547 901 10,489 4,019 (Gain) loss on foreign currency and embedded derivatives(b) 1,881
Slide 20: Reconciliation footnotes
(a) Represents non-cash share-based compensation expense. (b) Represents the effects of (i) fluctuations in foreign currency exchange rates, primarily related to remeasurement of intercompany loans denominated in currencies other than subsidiaries’ functional currencies, and (ii) non-cash mark-to-fa
Slide 21: Net debt and net leverage ratio reconciliation
As of March 31, As of June 30, As of September 30, 2019 2020 2021 2021 2021 Current portion of long-term debt 16,331$ -$ -$ -$ -$ Long-term debt less current portion 2,800,873 1,824,789 1,837,580 1,838,133 1,742,578 Current portion of finance leases 1,288 1,173 1,108 1,103 1,339 Finance leases less