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Item 1. Business

2024-05-29 compared with 2023-05-26 · 104 added, 101 removed, 324 unchanged (39% of the section changed)

STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention.

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services.

We offer our Customers a unique mix of innovative consumable products, such as detergents, endoscopy accessories, barrier products, and other products and services, including:

equipment installation and maintenance, microbial reduction of medical devices, dental instruments and tools, instrument and scope repair, laboratory testing services, outsourced reprocessing, and capital equipment products, such as sterilizers and surgical tables, automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

We operate our business and report our financial information in four reportable business segments:

Healthcare, Applied Sterilization Technologies, Life Sciences and Dental.

Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

We disclose a measure of segment income that is consistent with the way management operates and views the business.

The accounting policies for reportable segments are the same as those for the consolidated Company.

The bulk of our revenues are derived from the healthcare and pharmaceutical industries.

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe.

We offer our Customers a unique mix of innovative products and services.

These include:

consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools;

and services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, outsourced reprocessing;

and capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

We operate and report our financial information in three reportable business segments:

Healthcare, Applied Sterilization Technologies ("AST"), and Life Sciences.

Previously, we had four reportable business segments;

however, as a result of the agreement to divest our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to reflect these changes for comparability, as required.

For more information, refer to Note 4 to our consolidated financial statements titled, "Discontinued Operations." Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

We describe our business segments in the section that follows, titled "Information Related to Business Segments" and Note 13 to our consolidated financial statements titled, "Business Segment Information."

The bulk of our revenues are derived from healthcare, medical device and pharmaceutical Customers.

Much of the growth in these industries is driven by the aging of the population throughout the world, as an increasing number of individuals are entering their prime healthcare consumption years, and is dependent upon advancement in healthcare delivery, acceptance of new technologies, government policies, and general economic conditions.

The pharmaceutical industry has been impacted by increased regulatory scrutiny over cleaning and validation processes, mandating that manufacturers improve their processes.

Within healthcare, there is increased concern regarding the level of hospital acquired infections around the world;

increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies;

In addition, there is increased demand for medical procedures, including preventive screenings such as endoscopies and colonoscopies;

and a desire by our Customers to operate more efficiently, all which are driving increased demand for many of our products and services.

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to outsourced instrument reprocessing services.

In addition, our procedural solutions also include endoscopy accessories and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

In addition, our procedural solutions also include endoscopy accessories, instruments, and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

Products Offered.

Our products include cleaning chemistries and sterility assurance products, automated endoscope reprocessing systems and tracking products, endoscopy accessories, washers, sterilizers and other pieces of capital equipment essential to the operations of a sterile processing department ("SPD") and equipment used directly in the procedure rooms, including surgical tables, lights, equipment management services, and connectivity solutions.

Our products include cleaning chemistries and sterility assurance products, automated endoscope reprocessing systems and tracking products, endoscopy accessories, instruments, washers, sterilizers and other pieces of capital equipment essential to the operations of a sterile processing department and equipment used directly in the procedure rooms, including surgical tables, lights, equipment management services, and connectivity solutions.

Services Offered.

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We offer various preventive maintenance programs and repair services to support the effective operation of capital equipment over its lifetime.

Our Healthcare segment also provides comprehensive instrument and endoscope repair and maintenance services (on-site or at one of our dedicated facilities), custom process improvement consulting and outsourced instrument sterile processing (on-site at the hospital and in off-site reprocessing centers).

Our Healthcare segment also provides comprehensive instrument, devices, and endoscope repair and maintenance services (on-site or at one of our dedicated facilities), custom process improvement consulting and outsourced instrument sterile processing (on-site at the hospital and in off-site reprocessing centers).

Customer Concentration.

Our Healthcare segment sells consumables, services and capital equipment, to Customers in many countries throughout the world.

For the year ended March 31, 2023, no Customer represented more than 10% of the Healthcare Product segment's total revenues.

For the year ended March 31, 2024, no Customer represented more than 10% of the Healthcare segment's total revenues.

We compete with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings and operations in one or a limited number of countries.

On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Ecolab, ERBE, Fortive, Getinge, Karl Storz, Metrex, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg.

On a service line basis, competitors include Agiliti, BBraun, Berendsen plc, CleanLease (Clean Lease Fortex), Parts Source, Olympus, Owens & Minor, Pentax, Rentex Awé and Rentex Floren and Sterilog Limited.

APPLIED STERILIZATION TECHNOLOGIES SEGMENT

On a product basis, competitors include 3M, Baxter, Boston Scientific, Belimed, Fortive, Getinge, Karl Storz, Olympus, Ruhof, SteelCo, Stryker, Skytron and Wassenburg.

On a service line basis, competitors include Agiliti, BBraun, Crothall, Olympus and Pentax.

Description of Business.

Our Applied Sterilization Technologies ("AST") segment is a third-party service provider for contract sterilization, as well as testing services needed to validate sterility for medical device and pharmaceutical manufacturers.

Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems.

Our technology-neutral offering supports Customers every step of the way, from testing through sterilization.

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Our facilities are located in regions with a concentration of medical device manufacturing throughout the Americas, Europe, and Asia.

Our technical professionals supports Customers in all phases of product development, materials testing, and process validation.

Our technical professionals support Customers in all phases of product development, materials testing, and process validation.

In addition, we manufacture and supply integrated sterilization equipment and control systems to medical device manufacturers and research institutions.

Products Offered.

We support Customers with process controls and monitoring systems, and integrated sterilization equipment, including accelerators, product handling, and automation.

Customer Concentration.

Our Applied Sterilization Technologies segment’s services are offered to Customers throughout the world.

Our AST segment’s services are offered to Customers throughout the world.

For the year ended March 31, 2024, no Customer represented more than 10% of the segment’s revenues.

Applied Sterilization Technologies operates in a highly regulated industry and competes with Sterigenics International, Inc., other smaller contract sterilization companies and manufacturers that sterilize products in-house.

AST operates in a highly regulated industry and competes with Sterigenics International, Inc., other smaller contract sterilization companies, other manufacturers of sterilization equipment and control systems, and manufacturers that sterilize products in-house.

LIFE SCIENCES SEGMENT

Description of Business.

Our Life Sciences segment provides a comprehensive offering of products and services that support pharmaceutical manufacturing, primarily for vaccine and other biopharma Customers focused on aseptic manufacturing.

Our portfolio includes a full suite of consumable products, equipment maintenance and specialty services, and capital equipment.

Our Life Sciences segment provides a comprehensive offering of products and services designed to support biopharmaceutical and medical device research and manufacturing facilities, in particular those focused on aseptic manufacturing.

Our portfolio includes a full suite of consumable products, equipment maintenance, specialty services, and capital equipment.

Products Offered.

These products include formulated cleaning chemistries, barrier products, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers and washer disinfectors.

These products include pharmaceutical detergents, cleanroom disinfectants and sterilants, pharmaceutical grade and research sterilizers and washers, sterility assurance and maintenance products, vaporized hydrogen peroxide room decontamination systems and sterilizers, and high purity water and pure steam generators.

Services Offered.

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Customer Concentration.

Our Life Sciences segment sells consumables, services and capital equipment, to Customers in many countries throughout the world.

Our Life Sciences segment sells consumables, services and capital equipment to Customers globally.

For the year ended March 31, 2024, no Customer represented more than 10% of the Life Sciences segment’s total revenues.

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We compete for pharmaceutical Customers with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings and operations in one or a limited number of countries.

Competitors include Belimed, Ecolab, Fedegari, Getinge, MECO, Stilmas, and Techniplast.

DENTAL SEGMENT

Description of Business.

Our Dental segment provides a comprehensive offering for dental practitioners and dental schools, offering instrumentation, infection prevention consumables, and instrument management systems.

Products Offered.

Our products include hand and electric-powered dental instruments, infection control products, conscious sedation, personal protective equipment and water quality products for the dental suite.

Customer Concentration.

Our dental products are sold globally to wholesale Customers and directly to end users in many countries.

Our wholesale Customers primarily include major healthcare distributors, with some group purchasing organizations and buying co-operatives that sell our products to dental practices, medical facilities, government & educational institutions, and veterinary clinics.

The majority of our dental products are sold under our brand names, but we also supply private label products for several of our Customers.

Three Customers collectively and consistently account for more than 40.0% of our Dental segment revenue.

The percentage associated with these three Customers collectively in any one period may vary due to the buying patterns of these three Customers as well as other Dental Customers.

These three Customers collectively accounted for approximatel y 47.4% of our Dental segment revenues for the year ended March 31, 2023.

We compete with a number of large companies that have significant product portfolios and global reach, as well as a number of small companies with very limited product offerings.

On a product basis, competitors include 3M, Braun/Aesculap, Danaher/Sybron, Dentsply/Sultan Healthcare , J&J/Ethicon, Halyard Health, LM Dental, Medicom, Porter Instrument, Sterisil, Young Dental, and less expensive products from Asia and other lower cost manufacturing locations.

Competitors include Belimed, Contec, Ecolab, Fedegari, Getinge, and Stilmas.

INFORMATION WITH RESPECT TO OUR BUSINESS IN GENERAL

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However, in fiscal 2023 and 2024 we experienced delays in receiving materials and significant cost increases.

We do not currently expect any significant disruption to our operations due to sourcing problems in fiscal 2024.

We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and cobalt-60, which are necessary to our AST operations.

In addition, we have developed a plan to expand our irradiation processing capacity with accelerator-based technologies, which may reduce the potential supply risk.

In response to the active conflict between Russian and Ukraine, we stopped purchasing cobalt-60 from our Russian supplier.

Our supply chain challenges eased during the second half of fiscal 2024 and we do not currently expect significant disruption to our operations due to sourcing delays in fiscal 2025.

We anticipate continued inflation pressures in fiscal 2025 but not at the significant level experienced in fiscal 2024 and 2023.We have long-term supply contracts for certain materials for which there are few suppliers, or those that are single-sourced in certain regions of the world, such as ethylene oxide ("EO") and cobalt-60, which are necessary to our AST operations.

In addition, we continue to expand our irradiation processing capacity with accelerator-based technologies, in order to help mitigate the potential cobalt-60 supply risk.

In response to the active conflict between Russian and Ukraine, we stopped purchasing cobalt-60 from our Russian supplier in fiscal 2023.

A long-term disruption in cobalt-60 sourced from Russia may negatively impact gamma processing capacity or increase costs in certain portions of our AST operations but these impacts are not expected to be material to our AST segment and its results of operations.

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Historically, our business has not been significantly impacted by the overall effects of inflation.

However during fiscal 2022 and 2023, we experienced a rise in supply chain and labor costs and anticipate continued inflationary pressure in fiscal 2024 .

However, during fiscal 2023 and 2024, we experienced a rise in supply chain and labor costs and anticipate continued inflationary pressure in fiscal 2025 but not at the significant level experienced in fiscal 2024 and 2023 .

We monitor the prices we charge for our products and services on an ongoing basis and plan to adjust those prices to take into account future changes in the rate of inflation.

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In addition, the process of obtaining and protecting patents can be long and expensive.

We also rely upon trade secrets, technical know-how, and continuing technological innovation to develop and maintain our co mpetitive position.

We also rely upon trade secrets, technical know-how, and continuing technological innovation to develop and maintain our competitive position.

As of March 31, 2024, we held 630 United States patents and 2,531 patents in other jurisdictions and had 147 United States patent applications and 334 patent applications pending in other jurisdictions.

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Our business is subject to various degrees of governmental regulation in the countries in which we operate.

In the United States, the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration ("OSHA"), the Nuclear Regulatory Commission (“NRC”), and other governmental authorities regulate the development, manufacture, sale, and distribution of our products and services.

In the United States, the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration ("OSHA"), the Nuclear Regulatory Commission, and other governmental authorities regulate the development, manufacture, sale, and distribution of our products and services.

Our international operations also are subject to a significant amount of government regulation, including country-specific rules and regulations and U.S.

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If we fail to comply with any applicable regulatory requirements, penalties could be imposed on us.

For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.

For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report titled, "Risk Factors." We

are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations.

Failure to receive or maintain, or delays in receiving, clearance or approvals may hurt our revenues, profitability, financial condition, or value.

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We believe that we are currently compliant in all material respects with applicable regulatory requirements.

However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse affect on us or on our performance, results, or financial condition.

However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse effect on us or on our performance, results, or financial condition.

Environmental Matters.

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We believe that we are currently compliant with applicable environmental, health, and safety requirements in all material respects.

However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse affect on our performance, results, or financial condition.

However, there can be no assurance that future or current regulatory, governmental, or private action will not have a material adverse effect on our performance, results, or financial condition.

Please refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies" for further information.

In the future, if a loss contingency related to environmental matters, employee safety, health or conditional asset retirement obligations is significantly greater than the current estimated amount, we would record a liability for the obligation and it may result in a material impact on net income for the annual or interim period during which the liability is recorded.

The investigation and remediation of environmental obligations generally occur over an extended period of time, and therefore we do not know if these events would have a material adverse affect on our financial condition, liquidity, or cash flow, nor can there be any assurance that such liabilities would not have a material adverse affect on our performance, results, or financial condition.

In the future, if a loss contingency related to environmental matters, employee safety, health or conditional asset retirement obligations which is estimable and probable is significantly greater than the current recorded amount, we would record an additional liability for the obligation and it may result in a material impact on net income for the annual or interim period during which the liability is recorded.

The investigation and remediation of environmental obligations generally occur over an extended period of time, and therefore we do not know if these events would have a material adverse effect on our financial condition, liquidity, or cash flow, nor can there be any assurance that such liabilities would not have a material adverse effect on our performance, results, or financial condition.

The markets in which we operate are highly competitive and generally highly regulated.

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Of this amount, $353.8 million and $71.4 million related to our Healthcare and Life Sciences segments, respectively.

At March 31, 2022, excluding Cantel, we had backlog orders of $528.3 million.

At March 31, 2023, we had backlog orders of $599.6 million.

Of this amount, $494.7 million and $104.9 million related to our Healthcare and Life Sciences segments, respectively.

Backlog declined in fiscal 2024 as supply chain delays eased allowing us to reduce lead times and backlog.

Availability of Securities and Exchange Commission Filings.

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The content on or accessible through any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted.

We also make available free of charge on our website our Corporate Governance Guidelines, our Director Code of Ethics, and our Code of Business Conduct, as well as the Charters of the Audit Committee, the Compensation and Organization Development Committee, the Nominating and Governance Committee, and the Compliance Committee of the Company’s Board of Directors.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services.

CORPORATE RESPONSIBILITY

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life sciences products and services around the globe.

Inspired by our Customers’ efforts to create a healthier and safer world, and guided by our legacy of leadership and innovation, we strive to be a Great Company.

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The objective of ERM is to identify key risks, the potential impacts of compliance failure, identify key mitigating activities, develop potential improvements for managing the risks, and to ensure execution of oversight activities on a monthly, annual or as needed basis.

Our Environmental, Social, and Governance ("ESG") function is led by the Vice President of ESG.

The ESG function, with support from our Chief Executive Officer, General Counsel and other senior executives, works to actively develop and refine our ESG strategies, programs, and policies.

The ESG function works closely with our Global Sustainability Steering Committee to build ESG values and implement strategies, programs, and policies across the Company.

Our Corporate Responsibility function is led by the Vice President of ESG.

The Corporate Responsibility function, with support from our CEO, General Counsel and other senior executives, works to actively develop and refine our Environmental, Social, and Governance ("ESG") strategies, programs, and policies.

The Corporate Responsibility function works closely with our Global Sustainability Steering Committee to build ESG values and implement strategies, programs, and policies across the Company.

The Global Sustainability Steering Committee is a cross-functional team of senior leadership, subcommittee chairs, and subject matter experts spanning our businesses and Legal, Investor Relations, Human Resources, Continuous Improvement, Compliance, Facilities, and Health, Safety and Environment functions.

The ESG team regularly updates the Nominating and Governance Committee of our Board of Directors regarding its activities, including evaluating carbon emissions, preparing for regulatory requirements, reporting ESG metrics, and reviewing ESG ratings.

The Corporate Responsibility team regularly updates the Nominating and Governance Committee of our Board of Directors regarding its activities, including evaluating carbon emissions, preparing for regulatory requirements, reporting ESG metrics, and reviewing ESG ratings.

Key performance indicators and metrics have been established for those areas we believe to be relevant and potentially significant to our business.

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MedTech Europe’s purpose is to make innovative medical technology available to more people, while helping healthcare systems move towards a more sustainable path.

The MedTech Europe Code of Ethical Business Practice regulates all aspects of the industry’s relationship with Healthcare Professionals (HCPs) and Healthcare Organizations (HCOs), to ensure that all interactions are ethical and professional at all times and to maintain the trust of regulators, and patients.

The MedTech Europe Code of Ethical Business Practice regulates all aspects of the industry’s relationship with Healthcare Professionals and Healthcare Organizations, to ensure that all interactions are ethical and professional at all times and to maintain the trust of regulators, and patients.

STERIS has adopted and requires compliance with the MedTech Europe Code of Ethical Business Practice.

Using the STERIS Integrity Helpline or Webline, employees can anonymously report potential Code of Conduct concerns.

A management Ethics Committee meets monthly to monitor and investigate reports of Code of Business Conduct violations and provides quarterly reporting to the Board of Director's Compliance and Technology Committee.

With respect to financial matters, reports are provided to the Board of Director’s Audit Committee.

With respect to financial matters, reports are provided to the Board of Directors' Audit Committee.

With respect to human resources related matters, reports are provided to the Board of Dir ectors' Compensation and Organization Development Committee.

The STERIS Code of Business Conduct covers ethical marketing and off-label promotion.

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CDP is an internationally recognized nonprofit organization that collects and reports environmental metrics.

Currently, we report our direct (Scope 1) and indirect (Scope 2) energy use and emissions from all legacy STERIS facilities.

In fiscal 2023, we completed an energy assessment of our global operations to identify opportunities for reducing our global GHG emissions and evaluate potential target setting opportunities.

Currently, we report our direct (Scope 1) and indirect (Scope 2) energy use and emissions.

We recognize that a significant portion of our carbon impact is as a result of our value chain, outside of electricity and energy consumption at our global sites.

More recently, we initiated a comprehensive review to establish the baseline for our Scope 3 carbon emissions.

We have a broad and comprehensive portfolio of sterilization and disinfection products that support the procedural spaces within hospitals, endoscopy and surgery centers as well as pharmaceutical, medical device and dental Customers.

In fiscal 2024, we completed a comprehensive review to establish the baseline for our upstream and downstream emissions (Scope 3) and reported aggregate Scope 3 emissions in our most recent CDP response and on our website.

When we think about new products or next generation products, part of our effort is to reduce the environmental impact of what we do.

That can include anything from reformulating chemistries to eliminating metals-based ingredients or reducing the effluence produced as a result of the use of our products, to creating ultra-concentrate chemistries such as Prolystica® Ultra Concentrate Cleaning Chemistries, which offer 10x the uses per container.

That means 5 and 10-liter containers of concentrate replace 114-liter drums, creating benefits from safer lifting, elimination of packaging waste, and less frequent deliveries with smaller trucks.

We also work to utilize containers that can be recycled and build products with materials that can be recycled at the end of their life.

We are actively evaluating our ability to report in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) framework and in light of evolving regulatory disclosure requirements.

In Fiscal 2023, the European Commission’s Corporate Sustainability Reporting Directive ("CSRD") became effective.

The CSRD expands the number of companies required to publicly report ESG-related information and defines the ESG-related information that companies are required to report in accordance with European Sustainability Reporting Standards ("ESRS").

As STERIS prepares for upcoming CSRD disclosures, we continue to make significant efforts in gathering baseline information, strengthening our internal controls, and evaluating our current ESG data.

As part of this project, we continue to evaluate our ability to report in accordance with the Task Force on Climate-Related Financial Disclosures ("TCFD") framework and in light of evolving regulatory disclosure requirements.

In fiscal 2024, we initiated a TCFD aligned climate scenario analysis.

Risks and Prevention.

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Employees by Segment.

As of March 31, 2023, we had over 17,000 employees throughout the world of which less than 12% are represented by work councils or labor unions.

During the course of fiscal 2024, we averaged just over 18,000 employees throughout the world including approximately 1,400 employees within the Dental segment, which is currently held for sale.

Less than 12% of our employees are represented by work councils or labor unions.

We believe we generally have good relations with our employees.

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Healthcare 11,419 10,629

Applied Sterilization Technologies 3,163 2,961

AST 3,340 3,163

Life Sciences 999 965

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Total employees 18,179 17,100

Diversity, Equity & Inclusion (DE&I).

Diversity, Equity & Inclusion.

We are dedicated to creating and sustaining a diverse, equitable and inclusive work environment.

W e believe that the different ideas, experiences, perspectives and backgrounds of our global employees create a

stronger organization that allows us to fulfill our ultimate goal of serving our Customers.

W e believe that the different ideas, experiences, perspectives and backgrounds of our global employees create a stronger organization that allows us to fulfill our ultimate goal of serving our Customers.

To put it simply, we believe a diverse and inclusive workforce is essential to a thriving organization.

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We have biennial training on anti-harassment, except where required annually.

Total directors and employee’s distribution by gender is shown in the table below:

Total directors and employees distribution by gender is shown in the table below:

March 31, 2024 March 31, 2023

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The cornerstone of this initiative is the belief that incidents result from unsafe acts or conditions, both of which are preventable.

We apply the U.S.

Occupational Safety and Health Administration (OSHA) recordkeeping practices worldwide.

We apply OSHA recordkeeping practices worldwide.

Key metrics for purposes of benchmarking performance include Total Recordable Incident Rate ("TRIR") and Lost-time Incident Rate ("LTIR") injury and illness incident rates, both of which are presented in the table below:

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0.43 0.36 1.25 0.42

(1 ) We apply the U.S.

Occupational Safety and Health Administration ("OSHA") recordkeeping practices worldwide.

(1 ) We apply OSHA recordkeeping practices worldwide.

All rates are based on 100 full-time employees ("FTE") working one year.

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Our annual workplace injury prevention results are within the manufacturing sector's best-in-class performance as defined by the Bureau of Labor Statistics.

The ISO 14001 and 45001 sets out the criteria that a company can follow to establish an effective HSE management system.

We have chosen to align our environmental management system with the ISO 14001 standard, which sets out the criteria that a company or organization can follow to establish an effective environmental management system.

Designed for any type of organization, regardless of its activity or sector, it can provide assurance that environmental impact is being measured, controlled and improved in a holistic manner.

To date, one facility and 14 reprocessing locations have undergone the formal process to receive ISO 14001.

We currently have three facilities and 14 reprocessing locations that are 14001 accredited locations.

Our HSE teams and management are committed to supporting HSE programs with ongoing involvement in aligning HSE management systems to ISO 14001 and ISO 45001 standards, internal compliance reviews, and developing HSE training content and platforms.

The OSHA Voluntary Protection Program ("VPP") Star Award recognizes employers who have implemented effective safety and health management systems and maintain injury and illness rates below national Bureau of Labor Statistics averages for their industry.

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We believe that engaged employees are more productive, innovative, and satisfied in their work.

Examples of how we engage our employees include quarterly management meetings, a robust intranet for communication with our global teams and various communications efforts within each department.

Examples of how we engage our employees include quarterly video updates, a robust intranet for communication with our global teams and various communications efforts within each department.

In addition, our global human resources team has programs focused on career development and training for employees at all levels.

Our employee turnover rate was 15% and 17% for fiscal 2023 and 2022, respectively, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force.

Our employee turnover rate was 15% for both fiscal 2024 and 2023, and we are continuously working towards a goal of achieving a rate of 10% or less, excluding retirements and reductions in force.

Although reductions in force are sometimes necessary, we work to avoid them, and they must always be approved by executive management.

Every year we encourage all employees to participate in our employee engagement survey which is administered by a third party on a confidential basis.

We encourage all employees to participate in our employee engagement survey which is regularly administered by a third party on a confidential basis.

This process has been valuable in helping us recognize what we do well and foster an open conversation about how we can make STERIS an even better place to work.

We are pleased to report that 85% of our employees completed our 2023 survey.

In our most recent survey, we measured fifteen principal factors and overall employee engagement was 74%, in-line with our results for the past five years.

The results indicate that the majority of our people are committed to serving our Customers, are proud to work for STERIS, and have confidence in the stability of our business.

We have pushed our fiscal 2024 survey to the fall of fiscal 2025 as we are currently redesigning the survey for more frequent distribution.

During fiscal 2023, we reported that 85% of our employees completed our survey .

In our fiscal 2023 survey, we measured fifteen principal factors and overall employee engagement was 74%, in-line with our results for the past five years.

The results indicate that the substantial majority of our people are committed to serving our Customers, are proud to work for STERIS, and have confidence in the stability of our business.

We are committed to supporting the development of our people.

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Compensation and Benefits.

Our total rewards offerings include an array of programs to support our employees' financial, physical, and mental well-being, including providing competitive salaries, variable performance pay, healthcare benefits, tuition assistance, paid time off, annual merit increases, and incentive plans based on the national norms of employees' employment.

Total employee compensation is presented in the table below:

Total employee compensation is presented in the table below, including costs associated with employees in the Dental segment, which is currently held for sale:

(in thousands) Fiscal 2024 Fiscal 2023

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We take prompt action whenever we are alerted to regulatory or field-safety issues with a STERIS product.

Following immediate assessment, we take corrective action, including voluntary product recalls, when

Following immediate assessment, we take corrective action, including voluntary product recalls, when needed.

We examine underlying issues and root cause and work to resolve these to avoid recurrence.

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Name Age Position

Burton 55 Vice President, Controller and Chief Accounting Officer

Carestio 50 President and Chief Executive Officer

Burton 56 Vice President and Chief Accounting Officer

Carestio 51 President and CEO

Mary Clare Fraser 53 Senior Vice President and Chief Human Resources Officer

Madsen 58 Senior Vice President, Life Sciences

Kohler 61 Senior Vice President and General Manager, AST

Madsen 59 Senior Vice President and General Manager, Life Sciences

Majors 49 Senior Vice President and President, Healthcare

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The following discussion provides a summary of each executive officer's recent business experience through March 31, 2024:

Burton serves as Vice President, Controller and Chief Accounting Officer.

Burton serves as Vice President and Chief Accounting Officer.

She assumed this role in January 2017.

Carestio serves as President and Chief Executive Officer.

Previously, Ms.

Burton also served as Controller from January 2017 until December 2023.

Carestio serves as President and CEO.

He assumed this role in July 2021.

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From February 2018 to August 2018, he served as Senior Vice President, Sterilization and Disinfection.

From August 2015 to February 2018, he served as Senior Vice President, STERIS Applied Sterilization Technologies and Life Sciences.

From August 2015 to February 2018, he served as Senior Vice President, STERIS AST and Life Sciences.

Mary Clare Fraser serves as Senior Vice President and Chief Human Resources Officer.

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From February 2003 to July 2020, she held various positions with Parker-Hannifin Corporation, a global motion control technologies company, serving most recently from September 2019 to July 2020, as Vice President Human Resources of its Aerospace Group and from March 2017 to September 2019 as its Corporate Director of Human Resources.

Madsen serves as Senior Vice President, Life Sciences.

Kohler serves as Senior Vice President and General Manager, AST.

He assumed this role in February 2024.

Previously, Mr.

Kohler served from November 2015 to February 2024 as Vice President and General Manager of AST Americas.

Madsen serves as Senior Vice President and General Manager, Life Sciences.

She assumed this role in July 2020.

9 unchanged sentences

He assumed this role in August 2017.

From February 2014 to July 2017, he served as the Senior Vice President, Chief Financial Officer and Treasurer.

From February 2014 to July 2017, he served as Senior Vice President, Chief Financial Officer and Treasurer.

Andrew Xilas serves as Senior Vice President and General Manager, Dental.

He assumed this role in June 2021.

He joined HuFriedyGroup (now part of STERIS) in 1987, holding roles of increasing responsibility, which included a promotion to President, HuFriedyGroup in January 2021.

He joined HuFriedy Group (acquired by STERIS during fiscal 2022) in 1987, holding roles of increasing responsibility, which included a promotion to President, HuFriedy Group in January 2021.

Adam Zangerle serves as Senior Vice President, General Counsel, and Company Secretary.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business