Sotera Health Co. Q1 FY2025 earnings call

• Solid start to the year with mid-single digit top-line growth and double-digit bottom-line growth on constant currency. • Sterigenics has leading position in $4.5B sterilization market with margin expansion. • Nordion had higher revenue than anticipated due to Cobalt-60 shipment shift. • Nelson Labs outperformed expectations with margin expansion. • Mentioned priorities from November 2024 Investor Day: excellence in customer service, winning in growth markets, operational excellence, disciplined capital deployment. • Example of role in securing FDA clearance for bionic pancreas.

Sterigenics: Delivered 1.9% revenue growth to $170 million (3.9% on constant currency basis), margin expanded ~30 basis points. Nordion: Revenue increased 36% to $33 million (40.6% on constant currency basis), segment income up ~62%, margin expanded nearly 860 basis points. Nelson Labs: Revenue declined 9.3% to $52 million, but segment income increased 7%, margin expanded nearly 480 basis points.

• Reaffirmed 2025 outlook with revenue growth 4%-6% and adjusted EBITDA growth 4.5%-6.5% on constant currency. • Updated foreign exchange headwind to ~1.25% on revenue and 1.5% on adjusted EBITDA. • Sterigenics volumes expected to improve with mid-single digit constant currency revenue growth. • Nordion expected mid-single digit constant currency full year revenue growth. • Nelson Labs Q2 2025 revenue expected low to mid-single digit decline. • Interest expense expected $155M-$165M, tax rate 33%-35%, adjusted EPS $0.70-$0.76. • Capital expenditures 2025 $190M-$210M, aiming for $500M-$600M free cash flow over 3 years.

• Tariff policies with minimal material impact currently. • Potential additional EO lawsuits in various states. • Risk of 0%-2% of total company 2025 revenue from Russian supplied Cobalt.

Q: Patrick Donnelly on tariff side, confidence in navigating and small impacts.

A: Michael Petras confident, Nordion exempt, minimal impact.

Q: Brett Fishbin on Nelson Labs margin trends and Sterigenics volume growth.

A: Jonathan Lyons on Nelson Labs driven by regulation, routine volume, new product spend; Michael Petras on Sterigenics volumes improving with core customer base.

Q: Matt Sykes on legal strategy and cross-selling.

A: Michael Petras on vigorous defense and cross-selling incentives.

Q: Luke Sergott on Nordion margin and Sterigenics volume.

A: Michael Petras on Nordion volume shift and Sterigenics volume improvement.

Q: Dave Windley on Steri volume and biopharma R&D.

A: Michael Petras on Steri volume from multiple factors and Nelson Labs bioprocessing testing.

Q: Jason Bednar on EO litigation and Steri pricing.

A: Michael Petras on EO litigation disclosures and Steri pricing defensible.

Q: Michael Polark on EPA ethylene oxide rule and Sterigenics growth bridge.

A: Michael Petras on monitoring EPA and Jonathan Lyons on Sterigenics growth view.