Sotera Health Reports Strong Financial Performance and Operational Achievements in 2023

2024-02-28

The Sotera Health fourth quarter and full year 2023 conference call took place on February 27, 2024. Key executives Michael Petras, the Chairman and Chief Executive Officer, and Jon Lyons, the Chief Financial Officer, led the discussion, focusing on various financial measures, including adjusted EBITDA, adjusted net income, tax rate applicable to adjusted net income, adjusted EPS, adjusted EBITDA margin, segment income margin, net debt, and net leverage ratio.

Throughout the call, the company addressed the challenges it faced in 2023, such as macroeconomic and customer supply chain pressures, regulatory changes, and a lumpy Cobalt-60 harvest schedule at Nordion. Despite these obstacles, Michael Petras highlighted significant operational achievements, including capacity expansions at Sterigenics, progress on U.S. EO facility enhancements, securing Cobalt-60 supply at Nordion, growth in technical advisory services at Nelson Labs, and strong revenue growth at RCA.

In terms of financial performance, Sotera Health reported a 23.3% total revenue growth and a 28.7% increase in adjusted EBITDA for the fourth quarter of 2023 compared to the same period in 2022. For the full year 2023, revenue grew by 4.5% and adjusted EBITDA increased by 4.3% compared to 2022.

The company also delved into various topics related to its business operations, including market volumes, inventory levels, margin improvement, cobalt supply initiatives, NESHAP regulations, capacity expansion projects, pricing algorithms, emission challenges, and Nordion's price performance.

During the call, discussions extended to employee engagement, leadership development, board independence, ESG topics, risk management, and capital deployment. Sotera Health provided guidance for 2024, outlining expected figures for revenue growth, adjusted EPS, interest expense, effective tax rate, fully diluted share count, capital expenditures, and free cash flow.

Overall, the tone of the call was positive and optimistic, with the company expressing pride in its achievements, a strong commitment to safety, and enthusiasm for the future.