Sotera Health Company · NASDAQ:SHC
Sotera Health — Q3 2024 Earnings Presentation
23 slides from Sotera Health's earnings presentation, Nov 5, 2024
Slide 1: Third-Quarter 2024 Earnings Results
Third-Quarter 2024 Earnings Results NOVEMBER 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 and Sterigenics work with leading, global continuous glucose monitor (CGM) manufacturers to address safety with complex technical innovation including batteries and cybersecurity. • Our integrated services help to p
Slide 7: Q3 2024 Highlights
Q3 2024 Highlights Business & Market Update Financial Performance • Total company revenue and Adjusted EBITDA growth vs the prior Q3 ‘24 vs Q3 ‘23 year-quarter Net Revenues 8.5% to $285M • Nordion revenue increased vs the prior year-quarter primarily due (1) to timing of reactor harvest schedules Ad
Slide 8: Financial Overview
FINANCIAL OVERVIEW Sotera » Health
Slide 9: Q3 & YTD 2024 Consolidated Financial Performance
Q3 & YTD 2024 Consolidated Financial Performance $ In millions, except Adjusted EPS Third Quarter Year-to-Date $263 +8% $285 $739 +10% $810 Revenue 2023 2024 2023 2024 $134 +9% $146 $361 +10% $396 Adjusted EBITDA(1) 51.0%(2) 51.3%(2) 48.9%(2) 48.8%(2) 2023 2024 2023 2024 $0.16 +6% $0.17 $0.49 0% $0.
Slide 10: Sterigenics Q3 2024 Financial Performance
Sterigenics Q3 2024 Financial Performance $ In millions Third Quarter Year-to-Date Revenue +4.3% Revenue +4.7% Segment income(1) +3.0% Segment income(1) +4.2% $176 $518 $168 $495 $93 $96 $267 $279 55.3% 54.7% 54.0% 53.7% 2023 2024 2023 2024 Revenue Segment Income Revenue Segment Income • Net revenue
Slide 11: Nordion Q3 2024 Financial Performance
Nordion Q3 2024 Financial Performance $ In millions Third Quarter Year-to-Date Revenue +28.0% Revenue +44.6% Segment income(1) +31.9% Segment income(1) +52.1% $51 $117 $40 $81 $32 $66 $24 $43 60.0% 61.8% 53.8% 56.6% 2023 2024 (2) 2023 2024 Revenue Segment Income 44.9% Revenue Segment Income • The ti
Slide 12: Nelson Labs Q3 2024 Financial Performance
Nelson Labs Q3 2024 Financial Performance $ In millions Third Quarter Year-to-Date Revenue +7.0% Revenue +7.2% Segment income(1) +9.0% Segment income(1) +1.3% $175 $59 $163 $55 $17 $19 $50 $51 31.3% 31.8% 30.9% 29.2% 2023 2024 2023 2024 Revenue Segment Income Revenue Segment Income • Net revenue inc
Slide 13: Net Leverage, Liquidity and Investments
Net Leverage, Liquidity and Investments $ In millions Liquidity Net Leverage (1) Capital Expenditures (2) $707 $150 $696 3.8x 3.6x 3.2x $113 $477 $400 $400 $81 $395 $296 $307 12/31/22 12/31/23 9/30/24 12/31/22 12/31/23 9/30/24 YTD 2023 YTD 2024 (3)(4) Unrestricted Cash and cash equivalents Revolver
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 November 5, 2024 press release, Sotera Health does not provide a reconciliation of the forward-looking Adjusted EBITDA,
Slide 15: Full-Year 2024 Outlook
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 $175M to $185M (1) The outlook provided on th
Slide 16: Other 2024 Guidance Items
Other 2024 Guidance Items (1) • FY ‘24 Adjusted EBITDA margin rates expected to approach 50% Total Company • Assumed foreign exchange rates as of 9/30/24 remain constant for remainder of the year • No M&A activity assumed • Sterigenics: expect slight Q4 YoY volume and mix growth, similar to Q3 ‘24 •
Slide 17: Appendix
Appendix Sotera » Health
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures (unaudited) Three Months Ended Nine Months Ended September September 30, 30, (dollars in thousands, except per share amounts) 2024 2023 2024 2023 Net income $ 16,998 $ (13,660) $ 32,075 $ 12,695 Amortization of intangibles 19,858 20,181 59,737 61,290 Share-based compensat
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) (unaudited) (dollars in thousands, except Net Leverage) As of December 31, As of September 30, 2022 2023 2024 Current portion of long-term debt $ 197,119 $ 4,797 14,795 Long-term debt less current portion 1,747,115 2,223,674 2,210,815 Current portion of financ
Slide 21: Non-GAAP Financial Measures (continued)
Non-GAAP Financial Measures (continued) (unaudited) (dollars in thousands) Twelve months Twelve months ended December 31, ended September 30, 2022 2023 2024 Net income (loss) $ (233,570) $ 51,376 $ 70,756 Amortization of intangible assets 81,554 81,348 79,795 Share-based compensation(a) 21,211 32,36
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
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