Sotera Health Company (SHC) Investor Day 2024 summary

Strategic priorities and market positioning

• Focus on four key priorities: customer excellence, targeting growth markets, operational excellence, and disciplined capital allocation for incremental value creation.

• Operates in large, highly regulated markets with high barriers to entry and strong customer relationships, with 70%+ revenue from multi-year contracts.

• Emphasizes cross-business synergies, especially between Sterigenics and Nelson Labs, to drive integrated solutions and higher customer satisfaction.

• Strategic segmentation targets higher-growth, higher-profitability areas such as diabetes, bioprocessing, wearables, and select pharma segments.

• M&A remains a focus, with tuck-in and adjacent market acquisitions considered, but not included in current forecasts.

Financial performance and guidance

• Achieved 8% CAGR in revenue and Adjusted EBITDA since 2020, with free cash flow growing at 10% CAGR.

• Targets 5%-7% annual revenue growth and 5%-8% Adjusted EBITDA growth from 2025-2027, with $500M+ cumulative free cash flow and 35% EBITDA conversion by 2027.

• Margin expansion of at least 50 basis points expected, driven by operational leverage and cost management.

• CapEx to peak in 2025, then decline as major projects complete, supporting improved free cash flow.

• Pricing tailwind adjusted to 3%-4% (from prior 3.5%-5%), mainly due to normalization in Nordion pricing.

Business unit highlights

• Nelson Labs: Expanding pharma testing, investing in rapid testing and cleanrooms, and leveraging cross-business integration for growth and margin improvement.

• Sterigenics: Leading global sterilization provider, investing $170M in EO facility upgrades to meet new regulations, and targeting mid- to high-single-digit growth.

• Nordion: Global leader in Cobalt-60, securing long-term supply through investments in new reactor capabilities and exploring radiopharma opportunities.

• All units benefit from durable customer relationships, high regulatory barriers, and integrated service offerings.