Sotera Health Company (SHC) 44th Annual J.P. Morgan Healthcare Conference summary

Company Overview and Business Model

• Operates three integrated businesses: Sterigenics (sterilization services), Nordion (Cobalt-60 supply), and Nelson Labs (testing and advisory services), serving over 5,000 customers in 50+ countries with 62 facilities globally.

• Maintains strong, long-term relationships with top MedTech and pharma companies, with over 70% of revenue from multi-year contracts and a focus on regulated markets.

• Sterigenics is the largest segment, contributing two-thirds of revenue and achieving 50+% EBITDA margins.

• Nordion supplies Cobalt-60 globally, with 60% EBITDA margins and strategic partnerships for long-term supply security.

• Cross-business unit initiatives and embedded labs drive customer satisfaction, operational synergies, and enhanced revenue growth.

Financial Performance and Outlook

• Achieved revenue surpassing $1.16 billion in 2025, with a minimum 5% growth and a CAGR of 7% since going public in 2020.

• Adjusted EBITDA growth reached 10.4% through Q3 2025, exceeding the 5%-8% target, with margin improvement of 195 basis points.

• Free cash flow on track for $500-$600 million cumulative from 2025-2027, with $147 million generated through Q3 2025.

• Net leverage improved to 3.3x, with a target of 2-3x, $90 million in debt paid down, and debt maturity extended to 2031.

• Achieved consistent revenue growth for over 20 years, with a 9% CAGR since 2005, and 8% CAGR in free cash flow from FY 2020 to TTM 2025.

Strategic Priorities and Growth Drivers

• Four key priorities: customer service excellence, winning in growth markets, operational excellence for free cash flow, and disciplined capital deployment.

• Targeting 5%-7% organic revenue growth CAGR and 5%-8% adjusted EBITDA growth CAGR for 2025–2027, with at least 50–150bps margin improvement.

• Focused on segmenting MedTech and pharma markets to target higher-growth areas, especially within Sterigenics.

• CapEx elevated for facility enhancements, greenfield expansions, and Cobalt-60 development, with expectations for increased free cash flow as CapEx normalizes.

• Positioned as a global leader in a large, growing addressable market, with a comprehensive facility network and accelerating free cash flow.