STERIS (STE) investor relations material

Executive summary

• Revenue for the quarter rose 7.3% year-over-year to $1.49 billion, driven by higher volumes in Healthcare and Life Sciences and pricing gains across all segments.

• Gross margin improved to 46%, up 70 basis points, aided by price and productivity, partially offset by inflation.

• Adjusted net income reached $253.4 million, with adjusted EPS of $2.59, up 11% year-over-year.

• Free cash flow was $279.6 million, down from $326.5 million due to lower working capital contribution.

• Announced a $600 million investment in a new Formulated Chemistry Center of Excellence in North Carolina, the largest in company history, as part of a targeted restructuring plan.

Financial highlights

• EBIT margin was 23.8%, up 100 basis points year-over-year, driven by gross margin gains and cost discipline.

• Service revenues grew 7.8%, consumable revenues 9.0%, and capital equipment revenues 3.0% year-over-year.

• Capital expenditures were $87.5 million; depreciation and amortization totaled $123.8 million.

• Share buybacks totaled $100 million, with $900 million remaining under authorization and a new $1 billion repurchase program launched.

• Dividend increased for the 21st consecutive year, now $0.69 per quarter; $61.4 million paid in cash dividends.

Outlook and guidance

• Fiscal 2027 outlook maintained: as-reported revenue growth of 7%-8%, constant currency organic growth of 6%-7%.

• Adjusted EPS guidance unchanged at $11.10-$11.30, representing 9%-11% growth over fiscal 2026.

• CapEx for fiscal 2027 expected to be ~$450 million, reflecting North Carolina project spend.

• Free cash flow projected at $800 million for fiscal 2027.

• North Carolina investment to be phased over three years, with $350 million in fiscal 2028 and $175 million in fiscal 2029.