The following is a summary of the STERIS Plc (STE) Q1 2025 Earnings Call Transcript:

Financial Performance:

• STERIS Plc reported a strong start to fiscal 2025 with a total revenue growth of 8%, constant currency organic revenue growth of 6%, and an increased gross margin of 45.1%.

• Adjusted earnings per share increased by 10% to $2.03.

• Net income for the quarter stood at $201.7 million.

• Free cash flow was $195.7 million which was impacted by the timing of capital spending totaling $108 million for the quarter.

Business Progress:

• STERIS paid down debt, reducing total debt to $2.3 billion, with a debt to EBITDA ratio of approximately 1.6 times gross leverage.

• Dividend increased $0.05 per share, marking the 19th consecutive year of dividend increases.

• Healthcare constant currency organic revenue grew 5%, led by consumables and services driven by procedure volumes in the U.S. and market share gains.

• AST segment showed an 8% growth in constant currency organic revenue, supported by growth in Europe MedTech and bioprocessing.

Opportunities:

• With the divestiture of the dental business, STERIS has streamlined its operations and is positioned to utilize freed-up resources for further strategic initiatives.

• The anticipated return to growth in bioprocessing revenue in the second half of the fiscal year represents a potential uplift for the Life Sciences segment.

Risks:

• The initial revenue decline in Healthcare capital equipment reflects ongoing market and operational challenges, though low single-digit growth is expected for the full year.

• Increased compensation and higher insurance costs impacted EBIT margins and overall profitability for the quarter.

More details: Steris PLC IR

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