Sotera Health Company · NASDAQ:SHC
Sotera Health — Q2 2023 Earnings Presentation
22 slides from Sotera Health's earnings presentation, Aug 3, 2023
Slide 1: Second-Quarter 2023 Earnings Results
Second-Quarter 2023 Earnings Results AUGUST 3, 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. • Safeguarding Global Health® embodies the essence of Corporate Responsibility. • Cl
Slide 7: Q2 2023 Highlights
Q2 2023 Highlights Business & Market Update Financial Performance • All three business units achieved sequential margin expansion Q2 2023 vs Q2 2022 versus Q1 2023 Net Revenues $255M / (4.3%) • Sterigenics and Nelson experiencing some volume softness (1) Adjusted EBITDA $128M / (5.6%) • Nordion Co-6
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Q2 & YTD 2023 Consolidated Financial Performance
Q2 & YTD 2023 Consolidated Financial Performance $ In millions, except Adjusted EPS Second Quarter Year-to-Date $267 -4% $255 $503 -5% $476 Revenue 2022 2023 2022 2023 $136 -6% $128 $251 -10% $227 Adjusted EBITDA(1) 51.1%(2) 50.3%(2) 50.0%(2) 47.7%(2) 2022 2023 2022 2023 $0.49 $0.27 -22% -31% $0.21
Slide 10: Sterigenics Q2 2023 Financial Performance
Sterigenics Q2 2023 Financial Performance $ In millions Second Quarter Year-to-Date Revenue +6% Revenue +6% Segment income (1) +7% Segment income (1) +6% $158 $167 $327 $307 $85 $91 $165 $174 53.9%(2) 54.9%(2) 53.5%(2) 53.4%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Reve
Slide 11: Nordion Q2 2023 Financial Performance
Nordion Q2 2023 Financial Performance $ In millions Second Quarter Year-to-Date Revenue -37% Revenue -52% Segment income (1) -41% Segment income (1) -60% $50 $84 $30 $32 $49 $41 $18 $19 59.4% (2) 55.6% (2) 57.9% (2) 47.6%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Revenue
Slide 12: Nelson Labs Q2 2023 Financial Performance
Nelson Labs Q2 2023 Financial Performance $ In millions Second Quarter Year-to-Date Revenue -3% Revenue -3% Segment income(1) -9% Segment income (1) -12% $58 $57 $112 $109 $21 $19 $38 $33 (2) (2) 36.1% (2) 33.9% 34.1% 30.7%(2) 2022 2023 2022 2023 Revenue Segment Income Revenue Segment Income • Reven
Slide 13: Capital Structure and Investments
Capital Structure and Investments $ In millions $1,007 $359 $635 Strong liquidity position $477 (1) $408 $372 Liquidity $81 • ~$408M settlement funds released from escrow $395 $240 • No borrowings on revolving line of credit as of Q2 2023 $263 12/31/22 3/31/23 6/30/2023 (2)(3) Unrestricted Cash and
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 August 3, 2023 press release, Sotera Health does not provide a reconciliation of the forward-looking Adjusted EBITDA, Adj
Slide 15: Full-year 2023 Outlook
Full-year 2023 Outlook (1) Prior Outlook August 3rd Outlook YoY% Revenue $1.055B to $1.090B $1.035B to $1.055B +3% to +5% Adj EBITDA(2) $530M to $550M $520M to $535M +3% to +6% Adj NI Tax Rate(2)(3) 30% to 33% 30% to 32% ~+400bps to ~+600bps Adj EPS(2) $0.78 to $0.86 $0.78 to $0.86 -10% to -19% Weig
Slide 16: Appendix
Appendix Sotera » Health
Slide 17: 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) 2023 2022 2023 2022 Net income $ 23,513 $ 30,418 $ 26,355 $ 61,059 Amortization of intangibles 20,502 21,195 41,109 41,377 Share-based compensation(a) 8,409
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) Twelve Months Ended (dollars in thousands) March 31, December 31 June 30, 2023 2023 2022 Net loss $ (268,274) $ (261,369) $ (233,570) Amortization of intangible assets 81,286 81,979 81,554 Share-based compensation(a) 26,629 24,021 21,211 Loss on fo
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 June 30, As of March 31, As of December 31, 2023 2023 2022 Current portion of long-term debt $ 5,225 $ 4,031 $ 197,119 Long-term debt less current portion 2,221,987 2,222,333 1,747,115 Current portion of finance leases 8,605 8,588 1,722 Finance leases le
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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