Sotera Health Company (SHC) 2026 KeyBanc Capital Markets Healthcare Forum summary

Business overview and recent performance

• Maintains global leadership in highly regulated markets with a $18B serviceable addressable market and 62 facilities worldwide.

• Achieved 20 consecutive years of revenue growth, with over 50% EBITDA margins and accelerating free cash flow.

• 2025 saw 5.2% organic revenue growth, 40 basis points operating margin expansion, and a $0.16 increase in adjusted EPS.

• Margin improvement was driven by strong performance in Sterigenics and Nelson Labs, with Nordion also delivering upper single-digit growth.

• Interest expense and tax rate improvements contributed to overall earnings growth.

2026 outlook and guidance

• 2026 guidance calls for 5%-6.5% constant currency organic growth, with Sterigenics expected to deliver mid- to high-single-digit revenue growth.

• Nordion is projected to grow in the low to mid-single digits, with revenue weighted more toward the first half of the year.

• Nelson Labs anticipates low single-digit growth, with continued pricing strength at the midpoint of a 3%-4% long-term guide.

• Maintenance downtime and weather impacted Q1, but these headwinds are expected to turn into tailwinds in the second half.

• EBITDA margin improvement of 50-150 basis points targeted over the long-range plan, with energy costs largely insulated by fixed contracts.

Capital allocation and investment

• Free cash flow target of $500-600M over three years remains on track, with $200M+ generated in 2025.

• CapEx was $138M in 2025, below initial guidance due to project timing and regulatory delays; CapEx will drop significantly after 2026.

• Two greenfield projects remain, with the X-ray facility coming online in 2026 and another in late 2027 or early 2028.

• Capital allocation priorities are organic growth, opportunistic debt paydown, M&A, and potential buybacks.