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Item 7. Management’s Discussion and Analysis

2025-05-29 compared with 2024-05-29 · 200 added, 220 removed, 503 unchanged (46% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In Management’s Discussion and Analysis (“MD&A”), we explain the general financial condition and the results of operations for STERIS and its subsidiaries including:

In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), we explain the general financial condition and the results of operations for STERIS and its subsidiaries including:

• what factors affect our business;

• what our earnings and costs were;

• what our earnings and costs were in each period presented;

• why those earnings and costs were different from the year before;

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• what our expenditures for capital projects were;

• where cash is expected to come from to fund future debt principal repayments, growth outside of core operations, repurchase ordinary shares, pay cash dividends and fund future working capital needs.

• where cash is expected to come from to fund future debt principal repayments, growth outside of core operations, repurchases of shares, cash dividends and future working capital needs.

The MD&A also analyzes and explains the annual changes in the specific line items in the Consolidated Statements of Income.

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Service revenues also include outsourced reprocessing services and instrument and scope repairs, as well as revenues generated from contract sterilization and laboratory services offered through our AST segment.

• Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, pure steam/water systems, surgical lights and tables, and integrated OR.

• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables used in our V-PRO sterilizers and automated endoscope reprocessors, SYSTEM 1 and 1E consumables, gastrointestinal endoscopy accessories, instruments and tools, sterility assurance products, barrier protection solutions, and cleaning consumables.

• Capital Equipment Revenues – We define capital equipment revenues as revenues generated from sales of capital equipment, which includes steam and gas sterilizers, low temperature liquid chemical sterilant processing systems, automated endoscope reprocessors, pure steam/water systems, surgical lights and tables, and integrated operating rooms.

• Consumable Revenues – We define consumable revenues as revenues generated from sales of the consumable family of products, which includes dedicated consumables used in our capital equipment, gastrointestinal endoscopy accessories, instruments and tools, sterility assurance products, barrier protection solutions, and cleaning consumables.

• Recurring Revenues – We define recurring revenues as revenues generated from sales of consumable products and Service revenues.

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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.

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

capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors;

and connectivity solutions such as OR integrati on.

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

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

Healthcare, 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.

however, as a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to exclude discontinued operations for comparability, as required.

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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.

Acquisitions .

On August 2, 2023, we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company ("BD") (NYSE:

The acquired assets from BD are being integrated into our Healthcare segment.

The purchase price of the acquisition was $539.8 million.

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

Acquisitions and Divestitures .

During fiscal 2025, we completed several tuck-in acquisitions which continued to expand our product and service offerings in the Healthcare and AST segments.

Total aggregate consideration was approximately $54.1 million.

On August 2, 2023 we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company (NYSE:

The acquired assets from BD were integrated into our Healthcare segment.

The purchase price of the assets acquired from BD was $539.8 million.

The acquisition also qualified for a tax benefit related to tax deductible goodwill, with a present value of approximately $60.0 million.

The purchase price of the acquisition was financed with borrowings from our existing credit facility.

For more information, refer to Note 8 to our consolidated financial statements titled, " Debt."

In addition to the acquisition of BD, we completed two other tuck-in acquisitions during fiscal 2024, which expanded our product and service offerings in the AST and Healthcare segments.

In addition to the acquisition of assets from BD, we completed two tuck-in acquisitions during fiscal 2024, which expanded our product and service offerings in the AST and Healthcare segments.

Total aggregate consideration was approximately $6.5 million, net of cash acquired.

During fiscal 2023, we completed several tuck-in acquisitions which expanded our product and service offerings in the AST and Healthcare segments.

Total aggregate consideration was approximately $49.8 million, including potential contingent consideration of $7.3 million.

Divestitures and Discontinued Operations.

On April 11, 2024, the Company announced its plan to sell its Dental segment for total cash consideration of $787.5 million, subject to customary adjustments, and up to an additional $12.5 million in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

The transaction is structured as an equity sale.

A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results.

We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024.

The Dental segment results of operations have been reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income and we have classified our Dental segment's assets and liabilities as held for sale for all periods presented in the accompanying Consolidated Balance Sheets.

Previously, the Dental business was a separate reportable segment.

For additional information regarding this transaction and its effect on our financial reporting, refer to Note 4 titled "Discontinued Operations" and Note 13 titled "Business Segment Information." Proceeds received from the sale will be used to pay off existing debt.

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services business.

In fiscal 2025, we recorded net proceeds of $41.5 million.

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services ("CECS") business.

We recorded net proceeds of $41.9 million and recognized a pre-tax gain on the sale of $19.3 million in fiscal 2025.

The business generated approximately $35.0 million in revenue during fiscal 2024.

For more information regarding our recent acquisitions and divestitures, see Note 3 to our consolidated financial statements titled, " Business Acquisitions and Divestitures ."

Discontinued Operations.

On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $787.5 million, subject to customary adjustments, and up to an additional $12.5 million in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

The transaction was structured as an equity sale and closed on May 31, 2024.

The Dental segment results of operations were reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income for all periods presented, and we have classified our Dental segment's assets and liabilities as held for sale as of March 31, 2024 in the accompanying Consolidated Balance Sheets.

Due to the transaction closing in the first quarter of fiscal 2025, the held for sale assets and liabilities were classified as current as of March 31, 2024.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment through the date of sale on May 31, 2024.

A majority of the proceeds received from the sale were utilized to pay off existing debt.

For more information, see Note 4 to our consolidated financial statements titled "Discontinued Operations."

Revenues increased $320.8 million, or 6.2%, to $5,459.5 million for the year ended March 31, 2025, as compared to $5,138.7 million for the year ended March 31, 2024.

These increases reflect higher volume, including the added volume from the acquisition of assets from BD in the Healthcare segment, and pricing.

Our gross profit percentage decreased to 43.2% for fiscal 2024 as compared to 43.7% for fiscal 2023.

Unfavorable impacts from productivity, inflationary cost increases for materials and labor, and restructuring charges were partially offset by favorable impacts from pricing.

These increases reflect higher volume and pricing.

Our gross profit percentage increased to 44.0% for fiscal 2025 as compared to 43.2% for fiscal 2024.

Favorable impacts from pricing, mix, productivity, and material costs were partially offset by unfavorable impacts from labor and overhead costs.

Fiscal 2025 income from operations increased 3.7% to $866.6 million over fiscal 2024 income from operations of $836.1 million.

This increase was primarily due to the benefit of higher volume and pricing during fiscal 2024 which was partially offset by restructuring charges incurred during fiscal 2024.

This increase was primarily due to increased volume and pricing, which was partially offset by legal costs and a settlement associated with our EO litigation, increased labor costs and higher restructuring expenses.

Cash flows provided by operating activities were $1,148.1 million and free cash flow was $787.2 million in fiscal 2025 compared to cash flows provided by operating activities of $973.3 million and free cash flow of $620.3 million in fiscal 2024 (see subsection of MD&A titled, "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

Cash flows from operations resulted from the increase in operating activity and lower use of cash for working capital requirements.

The increase in free cash flow was driven by cash flows from operations as capital spending in fiscal 2024 was comparable to fiscal 2023.

The fiscal 2025 increase in cash flows from operations and free cash flow resulted from the increase in cash provided by working capital, primarily driven by higher collections on accounts receivable and improved inventory management when compared to the prior year.

Our debt-to-total capital ratio was 23.6% at March 31, 2025.

During the year, we increased our quarterly dividend for the eighteenth consecutive year to $0.52.

We have paid quarterly dividends each year since 2005 and have increased the dividend each consecutive year, including an increase during fiscal 2025 to $0.57 per share.

In fiscal 2026 and beyond, we expect to manage our costs, grow our business with internal product and service development, invest in greater capacity, and augment these value creating methods with potential acquisitions of additional products and services.

We anticipate continued inflation pressure in fiscal 2025, but not at the significant level experienced in fiscal 2024 and 2023.

Please refer to "Information With Respect to Our Business In General" in Item 1."Business" to this Annual Report on Form 10-K.

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We begin with a general overview of our operating results and then separately discuss earnings for our operating segments.

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

As a result of the divestiture of our Dental segment, Dental is presented as discontinued operations.

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

Therefore, the discussion within this Results of Operations section excludes discontinued operations and relates solely to our continuing operations.

The discussion of and factors affecting our performance for the year ended March 31, 2023 compared to the fiscal year ended March 31, 2022 is included in Item 7.

The discussion of factors affecting our performance for the year ended March 31, 2024 compared to the fiscal year ended March 31, 2023 is included in Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II of our Annual Report on Form 10-K for the year ended March 31, 2024.

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Revenues increased $320.8 million, or 6.2%, to $5,459.5 million for the year ended March 31, 2025, as compared to $5,138.7 million for the year ended March 31, 2024.

These increases reflect higher volume, including the added volume from the acquisition of assets from BD in the Healthcare segment, and pricing.

Service revenues for fiscal 2024 increased $202.2 million, or 9.3% over fiscal 2023, reflecting growth in the Healthcare, AST, and Life Sciences segments.

These increases reflect higher volume, primarily in our Healthcare segment due to organic growth and the added volume from the acquisition of assets from BD and organic growth in our AST segment, and pricing across all segments.

Service revenues for fiscal 2025 increased $213.2 million, or 9.0% over fiscal 2024, reflecting growth in the Healthcare and AST segments, which was partially offset by a decline in the Life Sciences segment due to the divestiture of the CECS business.

Consumable revenues for fiscal 2025 increased $183.5 million, or 12.2%, over fiscal 2024, reflecting growth in the Healthcare and Life Sciences segments.

Capital equipment revenues for fiscal 2024 increased by $191.1 million, or 17.9%, over fiscal 2023, reflecting growth in the Healthcare and Life Sciences segments, which were partially offset by a decline in the AST segment.

Ireland revenues for fiscal 2024 were $82.7 million, representing an increase of $8.4 million, or 11.3%, over fiscal 2023 revenues of $74.3 million, reflecting growth in service and consumable revenues, which were partially offset by a decline in capital equipment revenues.

United States revenues for fiscal 2024 were $3,751.4 million, representing an increase of $497.1 million, or 15.3%, over fiscal 2023 revenues of $3,254.4 million, reflecting growth in service, consumable, and capital equipment revenues.

Capital equipment revenues for fiscal 2025 decreased by $75.9 million, or 6.0%, as compared to fiscal 2024, reflecting declines in the Healthcare and Life Sciences segments, partially offset by growth in the AST segment.

Ireland revenues for fiscal 2025 were $107.3 million, representing an increase of $24.6 million, or 29.8%, over fiscal 2024 revenues of $82.7 million, reflecting growth in capital equipment, service, and consumable revenues.

United States revenues for fiscal 2025 were $4,007.6 million, representing an increase of $256.2 million, or 6.8%, over fiscal 2024 revenues of $3,751.4 million, reflecting growth in service and consumable revenues, partially offset by a decline in capital equipment revenues.

Revenues from other foreign locations for fiscal 2025 were $1,344.6 million, representing an increase of $40.0 million, or 3.1% over the fiscal 2024 revenues of $1,304.6 million.

The increase reflects growth within the Europe, Middle East & Africa, Canada, Asia Pacific and Latin American regions driven by increases in service, consumable, and capital equipment revenues.

The increase reflects growth within the Europe, Middle East, and Africa, Asia Pacific, and Latin American regions, which was partially offset by declines in Canada.

Gross Profit.

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Our gross profit is affected by the volume, pricing and mix of sales of our products and services, as well as the costs associated with the products and services that are sold.

Our gross profit percentage decreased to 43.2% for fiscal 2024 as compared to 43.7% for fiscal 2023.

Unfavorable impacts from inflation and material costs (120 basis points), restructuring charges (40 basis points), adjustments and other charges (40 basis points), productivity (30 basis points), and fluctuations in currency (10 basis points) were partially offset by favorable impacts from pricing (150 basis points), mix (30 basis points), and acquisitions (10 basis points).

Our gross profit percentage increased to 44.0% for fiscal 2025 as compared to 43.2% for fiscal 2024.

Favorable impacts from pricing (130 basis points), mix (70 basis points), material costs (30 basis points), productivity (20 basis points), and divestitures (20 basis points) were partially offset by unfavorable impacts from inflation (150 basis points) and adjustments and other charges (30 basis points).

Operating Expenses.

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Research and development 107,648 103,679 3,969 3.8 %

Restructuring expenses 26,045 485 25,560 NM

Illinois EO litigation settlement 48,150 — 48,150 NM

Restructuring expenses 46,049 26,045 20,004 76.8 %

Total operating expenses $ 1,536,123 $ 1,382,042 $ 154,081 11.1 %

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SG&A increased 6.5% in fiscal 2025 over fiscal 2024.

The fiscal 2024 increase is primarily attributable to increased compensation, including incentive compensation and benefit costs, as well as increase in dealer incentives and professional fees.

The fiscal 2025 increase is primarily attributable to increased compensation and benefit costs, as well as legal costs associated with our EO litigation.

For more information regarding our ongoing litigation, refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies."

Research and Development.

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Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.

During fiscal 2024, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing combination technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.

During fiscal 2025, our investments in research and development have continued to be focused on, but were not limited to, enhancing capabilities of sterile processing technologies, procedural products and accessories, and devices and support accessories used in gastrointestinal endoscopy procedures.

Illinois EO Litigation Settlement .

On March 3, 2025, we entered into binding confidential term sheets with plaintiffs’ counsel (the “Term Sheets”), as well as settlement agreements with several plaintiffs related to our Illinois EO litigation.

The Term Sheets and settlement agreements are expected to lead to a resolution of substantially all claims for personal injury related to EO that are pending in the Circuit Court of Cook County, Illinois.

We recorded an expense of $48.2 million related to this settlement in fiscal 2025.

For more information, refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies."

Restructuring Expenses.

We adopted and announced a targeted restructuring plan (the "Restructuring Plan").

In May 2024, we adopted and announced a targeted restructuring plan (the "Restructuring Plan").

This plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations.

Less than 300 positions are being eliminated.

These restructuring actions are designed to enhance profitability and improve efficiency, and we expect to be substantially complete with the actions by the end of fiscal 2025.

We are anticipating improvements in income from operations of approximately $25.0 million per year, with the majority of the benefit being in fiscal 2026 and beyond due to timing of actions.

We have incurred pre-tax expenses totaling $44.4 million related to these restructurings in fiscal 2024, of which $26.1 million was recorded as restructuring expenses and $18.3 million was recorded in Cost of revenues.

A total of $19.0 million and $25.4 million was recorded to the Healthcare and AST segments, respectively, while a total of $40.0 thousand was related to Corporate.

We expect to incur additional restructuring expenses related to this plan of approximately $55.3 million, which includes $51.3 million related to Healthcare, $3.0 million related to AST, $0.8 million related to Life Sciences, and $0.2 million related to Corporate.

The $55.3 million is comprised of $36.2 million related to severance and other compensation related costs, $15.3 million related to lease and other contract termination and other costs, and $3.8 million related to accelerated depreciation and amortization.

Approximately 300 positions have been eliminated.

These restructuring actions are designed to enhance profitability and improve efficiency.

We estimate improvements in income from operations of approximately $25.0 million per year, with the majority of the benefit beginning in fiscal 2026 due to timing of actions.

The following table summarizes our total pre-tax restructuring expenses recorded in fiscal 2025 related to the Restructuring Plan:

Year Ended March 31, 2024 Restructuring Plan

Asset impairment

Product rationalization (1)

Restructuring Plan Years Ended March 31,

(dollars in thousands) 2025 2024

Severance and other compensation related costs $ 29,030 $ 678

Lease and other contract termination and other costs 12,358 —

Product rationalization (1)

16,232 18,320

Accelerated depreciation and amortization and asset impairment 4,655 25,392

Total Restructuring Expense

$ 62,275 $ 44,390

(1) Recorded in Cost of revenues on the Consolidated Statements of Income.

The Restructuring Plan expenses incurred during fiscal 2025 and 2024 primarily related to actions taken in our Healthcare and AST segments.

Total pre-tax restructuring expense of $106.7 million has been recorded relating to the Restructuring Plan since inception, of which $34.6 million has been recorded in Cost of revenues.

Additional costs with respect to our Restructuring Plan in fiscal 2026 are not expected to be significant.

Liabilities related to restructuring activities are recorded as current liabilities in the accompanying Consolidated Balance Sheets within "Accrued payroll and other related liabilities" and "Accrued expenses and other." The following table summarizes our restructuring liability balances:

(dollars in thousands) Restructuring Plan

Balance at March 31, 2024 $ 678

Fiscal 2025 Charges 41,388

Balance at March 31, 2025 $ 18,371

Non-Operating Expenses, Net.

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Interest expense $ 86,261 $ 144,351 $ (58,090)

Interest and miscellaneous (income) expense (11,043) 2,879 (13,922)

Interest and miscellaneous income (8,402) (11,043) 2,641

Gain on sale of businesses and equity investment, net (7,425) — (7,425)

Non-operating expenses, net $ 70,434 $ 133,308 $ (62,874)

Interest expense increased $36.4 million during fiscal 2024 over fiscal 2023, primarily due to higher interest rates and principal amount of outstanding floating rate debt.

Interest expense decreased $58.1 million during fiscal 2025 as compared to fiscal 2024, primarily due to the lower principal amount of debt outstanding as well as lower interest rates on floating rate debt.

For more information, refer to Note 8 to our consolidated financial statements titled, "Debt."

The fluctuation in interest and miscellaneous (income) expense during fiscal 2024, as compared to fiscal 2023, totaled $13.9 million and is primarily attributable to gains recognized as a result of mark to market adjustments which were realized upon the sale of an equity investment as well as interest income accrued on an income tax refund.

Additional information regarding the mark to market adjustments of our equity investments is included in Note 19 to our consolidated financial statements titled, "Fair Value Measurements."

Interest and miscellaneous income decreased during fiscal 2025, as compared to fiscal 2024, by $2.6 million and is driven by lower interest income.

Gain on sale of businesses and equity investment, net was $7.4 million during fiscal 2025 and primarily relates to the gain recorded from the sale of our CECS business, which was partially offset by a loss recorded on an equity investment.

For more information on our equity investments, refer to Note 19 to our consolidated financial statements titled, "Fair Value Measurements." For more information on our divestiture activity, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

Income Tax Expense.

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The effective income tax rates from continuing operations for fiscal 2025 was 23.2% compared to 21.3% for fiscal 2024.

The fiscal 2024 effective tax rate from continuing operations increased when compared to 2023, primarily due to non-recurring favorable discrete items recognized in fiscal 2023.

The fiscal 2025 effective tax rate from continuing operations increased when compared to 2024, primarily due to changes in discrete items.

Additional information regarding our income tax expense and effective income tax rate is included in Note 10 to our consolidated financial statements titled, "Income Taxes."

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to outsourced instrument reprocessing services.

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.

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

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.

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.

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

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

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

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GAAP Growth Organic Growth Constant Currency Organic Growth

2024 2023 2024 2023 2024 2024 2024 2024

(dollars in thousands) 2025 2024 2025 2024 2025 2025 2025 2025

Segment revenues:

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Constant currency organic revenue growth is subject to a further adjustment to eliminate the impact of foreign currency movements.

Healthcare revenues increased 17.1% in fiscal 2024, as compared to fiscal 2023, reflecting growth in capital equipment, consumable, and service revenues of 21.7%, 18.9%, 11.8%, respectively.

The constant currency organic growth of 12.8% is primarily due to increased volume, impacting revenues by a low double digit percentage, as well as increased pricing.

Healthcare revenues increased 7.4% in fiscal 2025, as compared to fiscal 2024, reflecting growth in service and consumable revenues of 13.5% and 11.8%, respectively, which was partially offset by declines in capital equipment revenues of 5.0%.

The constant currency organic growth of 6.1% is primarily due to increased volume and pricing, impacting revenues by a low-single digit percentage.

The Healthcare segment’s backlog at March 31, 2025 amounted to $369.2 million.

The Healthcare segment's backlog at March 31, 2024 was $353.8 million.

The decrease is due to increased shipments during fiscal 2024 as compared to fiscal 2023, resulting from shortened lead times and easing of supply chain constraints.

The increase is due to increased demand from Customers.

AST revenues increased 8.9% in fiscal 2025, as compared to fiscal 2024.

The constant currency organic growth of 3.2% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, partially offset by lower volume.

Revenue was negatively impacted by medical device Customer inventory management and the continued reduction in demand from bioprocessing Customers.

Life Sciences revenues increased 6.5% in fiscal 2024, as compared to fiscal 2023 reflecting growth in service, capital equipment, and consumable revenues of 11.1%, 5.5%, 4.3% respectively.

The constant currency organic growth of 5.8% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, as well as higher volume.

The constant currency organic growth of 9.1% is primarily due to increased pricing, impacting revenues by a mid-single digit percentage, as well as increased volume.

Life Sciences revenues decreased 5.1% in fiscal 2025, as compared to fiscal 2024 partially due to the sale of the CECS business, which more than offset other services growth resulting in a decline of 16.1% in service revenues.

This decrease also reflects declines in capital equipment revenues of 24.4%, which was partially offset by growth in consumable revenues of 13.9%.

The constant currency organic growth of 1.3% is primarily due to increased pricing, impacting revenues by a low single digit percentage.

The Life Sciences backlog at March 31, 2025 and 2024 amounted to $83.7 million and $71.4 million, respectively.

The decrease is primarily due to the timing of shipments and a decrease in orders as compared to the same period in the prior year.

The increase is due to increased demand from Customers.

The following table compares business segment and Corporate operating income for the year ended March 31, 2025 to the year ended March 31, 2024:

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(dollars in thousands) 2025 2024 Change Change

Operating income (loss):

Income (loss) from operations before adjustments:

Healthcare 971,521 871,358 100,163 11.5 %

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Corporate (399,033) (348,497) (50,536) 14.5 %

Total operating income before adjustments $ 1,183,954 $ 1,080,291 $ 103,663 9.6 %

Total income from operations before adjustments $ 1,267,505 $ 1,183,954 $ 83,551 7.1 %

Amortization of acquired intangible assets (1)

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Tax restructuring costs (3)

Gain on fair value adjustment of acquisition related contingent consideration (1)

Net loss (gain) on divestiture of businesses (1)

Net loss on divestiture of businesses (1)

Amortization of inventory and property "step up" to fair value (1)

10,032 11,370

Restructuring charges (4)

Income from operations $ 836,118 $ 791,101

62,275 44,365

Illinois EO litigation settlement (5)

Total income from operations

$ 866,641 $ 836,118

(1) For more information regarding our recent acquisitions and divestitures, refer to Note 3 to our consolidated financial statements titled, " Business Acquisitions and Divestitures ."

(2) Acquisition and integration related charges include transaction costs and integration expenses associated with acquisitions.

(3) Costs incurred in connection with the Redomiciliation and subsequent tax restructuring.

(4) For more information regarding our restructurings, refer to Note 2 to our consolidated financial statements titled, "Restructuring."

(3) Costs incurred in tax restructuring.

(4) For more information regarding the restructurings, refer to Note 2 to our consolidated financial statements titled, "Restructuring."

(5) For more information regarding the Illinois EO litigation settlement, refer to Note 12 to our consolidating financial statements titled "Commitments and Contingencies."

The Healthcare segment’s operating income increased $100.2 million to $971.5 million in fiscal year 2025, as compared to $871.4 million in fiscal year 2024.

The segment's operating margins were 25.0% for fiscal year 2025 and 24.1% for fiscal year 2024.

The increase in operating income and margin for the year is primarily due to the benefits of higher volume, including added volume from the acquisition of assets from BD, and pricing, which were partially offset by increased compensation, mostly due to commissions, and increased costs caused by inflation.

The increase in operating income and margin for the year is primarily due to the benefits of higher volume and pricing, which were partially offset by increased compensation costs.

The AST segment’s operating income increased $25.8 million to $465.6 million in fiscal year 2025, as compared to $439.7 million in fiscal year 2024.

The increase in operating income is primarily due to favorable pricing.

The increase in operating income for the year is primarily due to higher pricing and increased volume, which was partially offset by higher labor costs.

The AST segment's operating margins were 44.8% for fiscal year 2025 and 46.1% for fiscal year 2024.

The decrease in operating margin is primarily due to higher labor costs and decreased productivity, which exceeded the benefits of favorable pricing.

The Life Sciences business segment’s operating income increased $11.1 million to $221.3 million in fiscal year 2024, as compared to $210.2 million in fiscal year 2023.

The increase in operating income was primarily due to favorable pricing and volume, which were partially offset by increased costs caused by inflation.

The decrease in operating margin is primarily due to higher labor costs and unfavorable productivity, which was partially offset by higher pricing.

The Life Sciences segment’s operating income increased $8.1 million to $229.4 million in fiscal year 2025, as compared to $221.3 million in fiscal year 2024.

The segment’s operating margins were 42.3% for fiscal year 2025 and 38.7% for fiscal year 2024.

The decrease in operating margin was primarily due to increased costs due to inflation, which exceeded the benefits of favorable pricing.

The increase in operating income and margin for the year is primarily due to favorable mix and pricing.

LIQUIDITY AND CAPITAL RESOURCES

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Net cash provided by operating activities $ 1,148,087 $ 973,274

Net cash used in investing activities (887,361) (383,330)

Net cash provided by (used in) investing activities 388,773 (887,361)

Net cash used in financing activities

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Net Cash Provided By Operating Activities – The net cash provided by our operating activities was $1,148.1 million for the year ended March 31, 2025, compared to $973.3 million for the year ended March 31, 2024.

Net cash provided by operating

activities increased in fiscal 2024 by 28.6% over fiscal 2023, and resulted from the increase in operating activity and lower use of cash for working capital requirements.

Net Cash Used In Investing Activities – The net cash used in our investing activities was $887.4 million for the year ended March 31, 2024, compared to $383.3 million for the year ended March 31, 2023.

Net cash provided by operating activities increased in fiscal 2025 by 18.0% over fiscal 2024, and resulted from the increase in cash provided by working capital, primarily driven by higher collections on accounts receivable and improved inventory management when compared to the prior year.

Net Cash Provided By/Used In Investing Activities – The net cash provided by our investing activities was $388.8 million for the year ended March 31, 2025, compared to net cash used in our investing activities of $887.4 million for the year ended March 31, 2024.

The following discussion summarizes the significant changes in our investing cash flows for the years ended March 31, 2025 and 2024:

• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures was comparable in fiscal 2024 and 2023, totaling $360.3 million and $362.0 million for fiscal 2024 and 2023, respectively.

• Purchases of property, plant, equipment, and intangibles, net – Capital expenditures totaled $370.1 million in fiscal 2025 compared to $360.3 million in fiscal 2024.

• Proceeds from the sale of property, plant, equipment and intangibles – During fiscal 2025 and 2024 we received $9.2 million and $7.4 million, respectively, for proceeds from the sale of property, plant, equipment and intangibles.

The fiscal 2024 proceeds primarily related to the sale of a facility previously used by the AST segment.

The fiscal 2023 proceeds were primarily from the sale of a facility previously used by the Dental segment.

• Proceeds from the sale of business – During fiscal 2024, we received proceeds of $9.5 million from the release of funds held in escrow related to the sale of the Renal Care business during fiscal 2022.

During 2023, we sold the remaining component of the Animal Healthcare business for $6.6 million.

For more information, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

The fiscal 2025 proceeds primarily related to the sale of a building previously used by the Healthcare segment, and the fiscal 2024 proceeds primarily related to the sale of a facility previously used by the AST segment.

• Proceeds from the sale of businesses – During fiscal 2025, we received proceeds of $814.6 million primarily from the sales of our Dental segment and our CECS businesses.

For more information, refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures" and Note 4 to our consolidated financial statements titled "Discontinued Operations." During fiscal 2024, we received proceeds of $9.5 million from the release of funds held in escrow related to the sale of the Renal Care business during fiscal 2022.

• Proceeds from the sale of investments – During fiscal 2024, we received $3.9 million in proceeds from the sale of one of our equity investments.

For more information refer to Note 19 to our consolidated financial statements, titled "Fair Value Measurements."

• Investment in convertible notes – During fiscal 2024, we invested $1.5 million in convertible notes related to funding the development of intellectual property.

• Acquisition of businesses, net of cash acquired – During fiscal 2024 and 2023, we used $546.3 million and $42.6 million, respectively, for acquisitions.

• Purchases of equity investments and convertible notes – During fiscal 2025 and fiscal 2024, we purchased $10.8 million and $1.5 million, respectively, in equity investments and convertible notes related to funding the development of intellectual property and access to new markets.

• Acquisition of businesses, net of cash acquired – During fiscal 2025 and 2024, we used $54.1 million and $546.3 million, respectively, to acquire businesses.

For more information on these acquisitions refer to Note 3 to our consolidated financial statements titled, "Business Acquisitions and Divestitures."

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• Payments on term loans – During fiscal 2025 and 2024, we repaid $638.1 million and $60.0 million of our term loans, respectively.

Our fiscal 2025 repayments were made with the proceeds from the sale of the Dental segment and funds generated from our operations.

For more information on our term loans, refer to Note 8 to our consolidated financial statements titled, "Debt."

• Payments on Private Placement Senior Notes – During fiscal 2023, we repaid $91.0 million of private placement debt.

• Payments on Private Placement Senior Notes – During fiscal 2025 we repaid $80.0 million of Private Placement Senior Notes.

For more information on our Private Placement Senior Notes, refer to Note 8 to our consolidated financial statements titled, "Debt."

• Proceeds under credit facilities, net – Net proceeds received under credit facilities totaled $181.5 million and $241.7 million for fiscal 2024 and 2023, respectively.

At the end of fiscal 2024, $484.5 million of debt was outstanding under our bank credit facility, compared to $301.7 million of debt outstanding under this facility at the end of fiscal 2023.

• Payments/Proceeds under credit facilities, net – Net payments under credit facilities totaled $446.3 million for fiscal 2025 compared to net proceeds received under credit facilities of $181.5 million for fiscal 2024.

The fiscal 2025 payments resulted from the use of proceeds from the sale of the Dental segment and funds generated by our operations.

The fiscal 2024 proceeds were used to fund the acquisition of assets from BD.

At the end of fiscal 2025, $34.8 million of debt was outstanding under our bank credit facility, compared to $484.5 million at the end of fiscal 2024.

We provide additional information about our bank credit facility in Note 8 to our consolidated financial statements titled, "Debt."

• Deferred financing fees and debt issuance costs – During fiscal 2025 we paid $2.3 million for financing fees and debt issuance costs related to our Revolving Credit Facility.

For more information on our debt, refer to Note 8 to our consolidated financial statements titled, "Debt."

• Acquisition related deferred or contingent consideration – During fiscal 2025 and 2024, we paid $0.4 million and $6.2 million in acquisition related deferred and contingent consideration, respectively.

The fiscal 2024 increase is primarily related to the payout of contingent consideration from a prior acquisition in the amount of $5.0 million.

• Repurchases of ordinary shares – During fiscal 2025 and 2024, we obtained 94,577 and 76,645, respectively, of our ordinary shares in connection with share-based compensation award programs in the aggregate amount of $11.3 million and $11.8 million, respectively.

During fiscal 2025, we purchased 907,158 of our ordinary shares for the aggregate amount of $200.0 million (exclusive of fees, commissions, and other charges) through our share repurchase program.

During fiscal 2024, we did not purchase any ordinary shares through our share repurchase program.

During fiscal 2023, we purchased 1,563,983 of our ordinary shares through our share repurchase program in the aggregate amount of $295.0 million.

We provide additional information about our share repurchases in Note 15 to our consolidated financial statements titled, "Repurchases of Ordinary Shares."

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During fiscal 2024, we paid cash dividends totaling $200.6 million or $2.03 per outstanding share.

• Transactions with noncontrolling interest holders – During fiscal 2024 and 2023, we paid $1.6 million and $0.8 million, respectively, in distributions to noncontrolling interest holders.

During fiscal 2024, we also received $3.0 million in contributions from noncontrolling interest holders.

• Transactions with noncontrolling interest holders – During fiscal 2025, we paid $2.1 million in distributions to noncontrolling interest holders and received $2.5 million in contributions from noncontrolling interest holders.

During fiscal 2024, we paid $1.6 million in distributions to noncontrolling interest holders and received $3.0 million in contributions from noncontrolling interest holders.

• Stock option and other equity transactions, net – We generally receive cash for issuing shares upon the exercise of options under our employee stock option program.

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Free cash flow was $787.2 million in fiscal 2025, compared to $620.3 million in fiscal 2024 (see subsection above titled "Non-GAAP Financial Measures" for additional information and related reconciliation of cash flows from operations to free cash flow).

The fiscal 2024 increase in free cash flow was driven by cash flows from operations as capital spending in fiscal 2024 was comparable to fiscal 2023.

The fiscal 2025 increase in free cash flow is primarily due to an increase in cash provided by working capital, primarily driven by higher collections on accounts receivable and improved inventory management when compared to the prior year, which was partially offset by increased capital spending.

Our debt-to-total capital ratio was 23.6% at March 31, 2025 and 33.7% at March 31, 2024.

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Private Placement Senior Notes $ 674,215 — $ 674,215 $ —

Term Loan 45,000 — 45,000 —

Delayed Draw Term Loan 593,126 — 593,126 —

Revolving Credit Agreement (1)

Revolving Credit Facility (1)

1,100,000 16,694 34,750 1,048,556

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Our sources of funding from credit as of March 31, 2025 are summarized below:

• On March 19, 2021, the Company, STERIS Corporation, STERIS Limited (“Limited”), and STERIS Irish FinCo Unlimited Company ("FinCo", "STERIS Irish FinCo"), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,250.0 million revolving credit facility (the “Revolver”), which replaced a prior revolving credit agreement.

• The Revolver provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit.

The Revolver may be increased in specified circumstances by up to $625.0 million at the discretion of the lenders.

The Revolver matures on the date that is five years after March 19, 2021, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date.

The Revolver bears interest from time to time, at either the Base Rate, the applicable Relevant Rate, or the applicable Adjusted Daily Simple RFR, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Credit Agreement.

Interest on Base Rate Advances is payable quarterly in arrears, interest on Term Benchmark Advances is payable at the end of the relevant interest period therefor, but in no event less frequently than every three months, and interest on RFR Advances is payable monthly after the date of borrowing.

Swingline borrowings bear interest at a rate to be agreed upon by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

• On October 7, 2024, STERIS plc (“Parent”), STERIS Corporation, STERIS Limited ("Limited"), and STERIS Irish FinCo Unlimited Company (“FinCo”), each as a borrower and guarantor, entered into a credit agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”) providing for a $1,100.0 million revolving credit facility (the “Revolving Credit Facility”), which replaced a prior credit agreement, dated as of March 19, 2021.

• The Revolving Credit Agreement provides for revolving credit borrowings, swing line borrowings and letters of credit, with sublimits for swing line borrowings and letters of credit.

The Revolving Credit Agreement may be increased in specified circumstances by up to $625.0 million in the discretion of the lenders.

The Revolving Credit Agreement matures on the date that is five years after October 7, 2024, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date.

The Revolving Credit Facility bears interest from time to time, at either the Base Rate or the Relevant Rate, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Applicable Margin is determined based on the Debt Rating of Parent, as defined in the Revolving Credit Agreement.

Base Rate Advances are payable quarterly in arrears and Term Benchmark Advances are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months.

Swingline borrowings bear interest at a rate to be agreed by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

Dollars equal to the Base Rate plus the Applicable Margin for Base Rate Advances plus the Facility Fee.

There is no premium or penalty for prepayment of Base Rate Advances, but prepayments of Term Benchmark Advances are generally subject to a breakage fee.

Advances may be extended in U.S.

Dollars or in specified alternative currencies.

• On March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Term Loan Agreement”) providing for a $550.0 million term loan facility (the “Term Loan”), which replaced an existing term loan agreement, dated as of November 18, 2020 (the “Existing Term Loan Agreement”).

The proceeds of the Term Loan were used to refinance the Existing Term Loan Agreement.

• The Term Loan matures on the date that is five years after March 19, 2021 (the “Term Loan Closing Date”).

No principal payments are due on the Term Loan for the period beginning from the first full fiscal quarter ended after the Term Loan Closing Date to and including the fourth full fiscal quarter ended after the Term Loan Closing Date.

For the period beginning from the fifth full fiscal quarter ended after the Term Loan Closing Date to and including the twelfth full fiscal quarter ended after the Term Loan Closing Date, quarterly principal payments, each in the amount of 1.25% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

For the period beginning from the thirteenth full fiscal quarter ended after the Term Loan Closing Date through the maturity of the loan, quarterly

principal payments, each in the amount of 1.875% of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

The remaining unpaid principal is due and payable on the maturity date.

• The Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Term Loan Agreement, plus the Applicable Margin, as defined in the Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Term Loan Agreement.

Interest on Base Rate Advances is payable quarterly in arrears and interest on Term Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months.

• Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $750.0 million (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel.

During the first quarter of fiscal 2022, we borrowed $650.0 million under our Delayed Draw Term Loan Agreement.

The Delayed Draw Term Loan was funded by the lenders upon consummation of the Cantel acquisition (the “Acquisition Closing Date”).

The proceeds of the Delayed Draw Term Loan were used, together with the proceeds from other new indebtedness, to fund the cash consideration for the acquisition, as well as for various other items.

• The Delayed Draw Term Loan matures on the date that is five years after the Acquisition Closing Date.

No principal payments are due on the Delayed Draw Term Loan for the period beginning from the first full fiscal quarter ended after the Acquisition Closing Date to and including the fourth full fiscal quarter ended after the Acquisition Closing Date.

For the period beginning from the fifth full fiscal quarter ended after the Acquisition Closing Date to and including the twelfth full fiscal quarter ended after the Acquisition Closing Date, quarterly principal payments, each in the amount of 1.25% of the original principal amount of the Delayed Draw Term Loan, are due on the last business day of each fiscal quarter.

For the period beginning from the thirteenth full fiscal quarter ended after the Acquisition Closing Date through the maturity of the loan, quarterly principal payments, each in the amount of 1.875% of the original principal amount of the Delayed Draw Term Loan, are due on the last business day of each fiscal quarter.

The remaining unpaid principal is due and payable on the maturity date.

• The Delayed Draw Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Delayed Draw Term Loan Agreement, plus the Applicable Margin, as defined in the Delayed Draw Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Delayed Draw Term Loan Agreement.

• On May 3, 2023, in connection with the upcoming replacement of U.S.

dollar LIBOR with SOFR, the Borrower, Guarantors, Lenders, and JPMorgan Chase Bank, N.A., each as defined in each of the agreements, amended the Revolving Credit Agreement, the Term Loan Agreement, and the Delayed Draw Term Loan Agreement.

The amendments concern pricing, technical, administrative, and operational changes related to borrowings in U.S.

The above descriptions reflect those amendments.

• On April 1, 2021, FinCo (the "Issuer") completed an offering of $1,350.0 million in aggregate principal amount, of its senior notes in two separate tranches:

(i) $675.0 million aggregate principal amount of the Issuer’s 2.70% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675.0 million aggregate principal amount of the Issuer’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”).

The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, the Company, STERIS Corporation and Limited (the “Guarantors”) and U.S.

Bank National Association as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

Dollars or in specified alternative currencies (“Alternative Currency Advances”).

Alternative Currency Advances are limited in the aggregate to the equivalent of $625.0 million.

• On April 1, 2021, FinCo completed an offering of $1,350.0 million in aggregate principal amount, of its senior notes in two separate tranches:

(i) $675.0 million aggregate principal amount of the FinCo’s 2.700% Senior Notes due 2031 (the “2031 Notes”) and (ii) $675.0 million aggregate principal amount of the FinCo’s 3.750% Senior Notes due 2051 (the “2051 Notes” and, together with the 2031 Notes, the “Senior Public Notes”).

The Senior Public Notes were issued pursuant to an Indenture, dated as of April 1, 2021 (the “Base Indenture”), among FinCo, Parent, STERIS Corporation and Limited (the

“Guarantors”) and U.S.

Bank National Association as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of April 1, 2021, among FinCo, the Guarantors and the Trustee (together with the Base Indenture, the “Indenture”).

Each of the Guarantors guaranteed the Senior Public Notes jointly and severally on a senior unsecured basis.

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The Senior Public Notes will bear interest at the rates set forth above.

Interest on the Senior Public Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021, until their respective maturities.

Interest on the Senior Public Notes is payable on March 15 and September 15 of each year until their respective maturities.

• As of March 31, 2025, a total of $34.8 million was outstanding under the Revolving Credit Agreement, based on currency exchange rates as of March 31, 2025.

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At March 31, 2025, there was $16.7 million in letters of credit outstanding under the Credit Agreement.

As of March 31, 2024, $45.0 million and $593.1 million were outstanding under the Term Loan and Delayed Draw Term Loan, respectively.

Our outstanding Private Placement Senior Notes at March 31, 2025 were as follows:

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$125,000 Senior notes at 3.45% 2015 Private Placement

December 2027 25,000

$125,000 Senior notes at 3.45% 2015 Private Placement

May 2025 125,000

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The agreement governing the notes contains leverage and interest coverage covenants.

• On March 19, 2021, STERIS Corporation as issuer, and the Company, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).

Also on March 19, 2021, Limited, as Issuer, and the Company, STERIS Corporation and FinCo, as guarantors, entered into a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated a certain note purchase agreement originally dated January 23, 2017) for the 2017 senior notes (together with the 2012 Amendment and the 2015 Amendment, the “NPA Amendments”).

• On March 19, 2021, STERIS Corporation as issuer, and Parent, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).

Also on March 19, 2021, Limited, as issuer, and Parent, STERIS Corporation and FinCo, as guarantors, entered into a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated a certain note purchase agreement originally dated January 23, 2017) for the 2017 senior notes (together with the 2012 Amendment and the 2015 Amendment, the “NPA Amendments”).

The NPA Amendments provided, among other things, for the waiver of certain repurchase rights of the note holders and increased the size of certain baskets to more closely align with other current credit agreement baskets.

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Our capital expenditure program is a component of our long-term strategy.

This program includes, among other things, investments in new and existing facilities, business expansion projects, radioisotope (cobalt-60), and information technology enhancements and research and development advances.

This program includes, among other things, investments in new and existing facilities, business expansion projects, cobalt-60, and information technology enhancements and research and development advances.

During fiscal 2025, our capital expenditures amounted to $370.1 million.

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Commercial commitments include standby letters of credit, letters of credit required as security under our self-insured risk retention policies, and other potential cash outflows resulting from events that require us to fulfill commitments.

Due to the announced sale of the Dental segment, Dental is classified as a discontinued operation.

As such, obligations included below do not include the Dental segment.

Payments due by March 31,

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SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

STERIS plc ("Parent") and its wholly-owned subsidiaries, Limited and STERIS Corporation (collectively "Guarantors" and each a "Guarantor"), each have provided guarantees of the obligations of FinCo, a wholly-owned subsidiary issuer, under Senior Public Notes issued by FinCo on April 1, 2021 and of certain other obligations relating to the Senior Public Notes.

Parent and its wholly-owned subsidiaries, Limited and STERIS Corporation, each have provided guarantees of the obligations of FinCo, a wholly-owned subsidiary issuer, under Senior Public Notes issued by FinCo on April 1, 2021 and of certain other obligations relating to the Senior Public Notes.

The Senior Public Notes are guaranteed, jointly and severally, on a senior unsecured basis.

The Senior Public Notes and the related guarantees are senior unsecured obligations of FinCo and the Guarantors, respectively, and are equal in priority with all other

unsecured and unsubordinated indebtedness of the Issuer and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes, borrowings under the Revolving Credit Facility, the Term Loan and the Delayed Draw Term Loan.

All of the liabilities of non-guarantor direct and indirect subsidiaries of STERIS, other than STERIS Irish FinCo, STERIS Limited and STERIS Corporation, including any claims of trade creditors, are effectively senior to the Senior Public Notes.

STERIS Irish FinCo’s main objective and source of revenues and cash flows is the provision of short- and long-term financing for the activities of STERIS plc and its subsidiaries.

The ability of our subsidiaries to pay dividends, interest and other fees to the Issuer and ability of the Issuer and Guarantors to service the Senior Public Notes may be restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries are or may become a party.

The Senior Public Notes and the related guarantees are senior unsecured obligations of FinCo and the Guarantors, respectively, and are equal in priority with all other unsecured and unsubordinated indebtedness of FinCo and the Guarantors, respectively, from time to time outstanding, including, as applicable, under the Private Placement Senior Notes and borrowings under the Revolving Credit Facility.

All of the liabilities of non-guarantor direct and indirect subsidiaries of Parent, other than FinCo, Limited and STERIS Corporation, including any claims of trade creditors, are effectively senior to the Senior Public Notes.

FinCo’s main objective and source of revenues and cash flows is the provision of short- and long-term financing for the activities of Parent and its subsidiaries.

The ability of our subsidiaries to pay dividends, interest and other fees to FinCo and ability of FinCo and Guarantors to service the Senior Public Notes may be restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which our subsidiaries are or may become a party.

The following is a summary of these guarantees:

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• in the case of a subsidiary Guarantor, upon the sale, transfer or other disposition of all or substantially all the assets of such subsidiary Guarantor, other than to the Parent or a subsidiary of the Parent and as permitted by the Indenture;

• in the case of a Subsidiary Guarantor, at such time as such Subsidiary Guarantor is no longer a borrower under or no longer guarantees any material credit facility (subject to restatement in specified circumstances);

• upon the legal defeasance or covenant defeasance of the notes or the discharge of the Issuer’s obligations under the indenture in accordance with the terms of the indenture;

• in the case of a subsidiary Guarantor, at such time as such subsidiary Guarantor is no longer a borrower under or no longer guarantees any material credit facility (subject to reinstatement in specified circumstances);

• upon the legal defeasance or covenant defeasance of the Senior Public Notes or the discharge of FinCo’s obligations under the Indenture in accordance with the terms of the Indenture;

• as described in accordance with the terms of the Indenture;

• in the case of the Parent, if the Issuer ceases for any reason to be a subsidiary of the Parent;

provided that all guarantees and other obligations of the Parent in respect of all other indebtedness under any material credit facility of the Issuer terminate upon the Issuer ceasing to be a subsidiary of the Parent;

• in the case of Parent, if the FinCo ceases for any reason to be a subsidiary of Parent;

provided that all guarantees and other obligations of Parent in respect of all other indebtedness under any material credit facility of the Issuer terminate upon FinCo ceasing to be a subsidiary of Parent;

• upon such Guarantor delivering to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent provided for in the Indenture relating to such transaction or release have been complied with.

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The following tables present summarized results of operations for the year ended March 31, 2025 and summarized balance sheet information at March 31, 2025 and 2024 for the obligor group of the Senior Public Notes.

The obligor group consists of the Parent Company Guarantor, Subsidiary Issuer, and Subsidiary Guarantors for the Senior Public Notes.

The summarized financial information is presented after elimination of (i) intercompany transactions and balances among the guarantors and issuer and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor or issuer.

The obligor group consists of Parent, FinCo, and the other Guarantors.

subsidiary that is a non-guarantor or issuer.

Transactions with non-issuer and non-guarantor subsidiaries have been presented separately.

Summarized Results of Operations

(in thousands) Twelve Months Ended

Twelve Months Ended

(dollars in thousands)

Revenues $ 3,083,529

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Summarized Balance Sheet Information

(in thousands)

March 31, March 31,

(dollars in thousands) 2025 2024

Receivables due from non-issuers and non-guarantor subsidiaries $ 19,931,477 $ 19,120,843

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Credit Ratings (1)

(1) Effective April 18, 2024

(1) Effective May 20, 2025

Each of the credit rating agencies reviews its rating periodically and there is no guarantee our current credit ratings will remain the same.

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These valuations require us to make estimates and assumptions, especially with respect to intangible assets.

We generally amortize our intangible assets over their estimated useful lives with the exception of indefinite lived intangible assets.

We generally amortize our intangible assets over

their estimated useful lives with the exception of indefinite lived intangible assets.

We do not amortize goodwill, but we evaluate it annually for impairment.

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Income Taxes.

Our provision for income taxes is based on our current period income, changes in deferred income tax assets and liabilities, income tax rates, changes in uncertain tax benefits, and tax planning opportunities available to us in the various

jurisdictions in which we operate.

Tax laws are complex and subject to different interpretations by the taxpayer and the respective governmental taxing authorities.

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Additional information regarding income taxes is included in Note 10 to our consolidated financial statements titled, “Income Taxes.”

Self-Insurance Liabilities.

We record a liability for self-insured risks that we retain for general and product liabilities, workers’ compensation, and automobile liabilities based on actuarial calculations.

We use our historical loss experience and actuarial methods to calculate the estimated liability.

This liability includes estimated amounts for both known losses and incurred but not reported claims.

We review the assumptions used to calculate the estimated liability at least annually to evaluate the adequacy of the amount recorded.

We maintain insurance policies to cover losses greater than our estimated liability, which are subject to the terms and conditions of those policies.

The obligation covered by insurance contracts will remain on the balance sheet as we remain liable to the extent insurance carriers do not meet their obligation.

Estimated amounts receivable under the contracts are included in the "Prepaid expenses and other current assets" line, and the "Other assets" line of our Consolidated Balance Sheets.

Our accrual for self-insured risk retention as of March 31, 2024 and 2023 was $30.7 million and $30.4 million , respectively and is included in Accrued expenses and other and Other liabilities in our Consolidated Balance Sheets.

We are also self-insured for employee medical claims.

We estimate a liability for incurred but not reported claims based upon recent claims experience.

Our self-insured liabilities contain uncertainties because management must make assumptions and apply judgments to estimate the ultimate cost to settle reported claims and claims incurred but not reported as of the balance sheet date.

If actual results are not consistent with these assumptions and judgments, we could be exposed to additional costs in subsequent periods.

Contingencies.

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These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We record a liability for such contingencies to the extent we conclude that their occurrence is both probable and estimable.

We record a liability for such contingencies to the extent we conclude that their occurrence is both probable and estimable and believe we have adequately reserved for our current litigation and claims that are probable and estimable.

In the event that the estimate of a probable loss is a range and no amount within the range is more likely, we accrue the minimum amount of the range.

We consider many factors in making these assessments, including the professional judgment of experienced members of management and our legal counsel.

We have made estimates as to the likelihood of unfavorable outcomes and the amounts of such potential losses.

In our opinion, the ultimate outcome of these proceedings and claims is not anticipated to have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

However, the ultimate outcome of proceedings, government investigations, and claims is unpredictable and actual results could be materially different from our estimates.

We record expected recoveries under applicable insurance contracts when we are assured of recovery.

Refer to Note 12 to our consolidated financial statements titled, "Commitments and Contingencies" for additional information.

We are subject to taxation from federal, state and local, and foreign jurisdictions.

Tax positions are settled primarily through the completion of audits within each individual tax jurisdiction or the closing of a statute of limitation.

Changes in applicable tax law or other events may also require us to revise past estimates.

The IRS of the United States routinely conducts audits of our federal income tax returns.

Further, we believe that the ultimate outcome of pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole.

Due to their inherent uncertainty, however, there can be no assurance of the ultimate outcome or effect of current or future litigation, investigations, claims or other proceedings.

For certain types of claims, we presently maintain insurance coverage for personal injury and property damage and other liability coverages in amounts and with deductibles that we believe are prudent, and we may also have contractual indemnification rights against certain liabilities, but there can be no assurance that either will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us.

We record expected recoveries under applicable contracts when we are assured of recovery.

Additional information regarding our commitments and contingencies is included in Note 12 to our consolidated financial statements titled, "Commitments and Contingencies."

We are subject to taxation from United States federal, state and local, and foreign jurisdictions.

Tax positions are settled primarily through the completion of audits within each individual jurisdiction or the closing of statutes of limitation.

Changes in applicable tax law or other events may also require us to revise past estimates.

We describe income taxes further in Note 10 to our consolidated financial statements titled, “Income Taxes” in t his Annual Report on Form 10-K.

Benefit Plans.

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A summary of significant assumptions used to determine the March 31, 2025 projected benefit obligations and the fiscal 2025 net periodic benefit costs is as follows:

Synergy Health plc Isotron BV Synergy Health Daniken AG Synergy Health Radeberg Synergy Health Allershausen Harwell Dosimeters Ltd U.S.

(dollars in thousands) Synergy Health plc Isotron BV Synergy Health Daniken AG Synergy Health Radeberg Synergy Health Allershausen Harwell Dosimeters Ltd U.S.

Retirement Benefits Plan

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Generally, net periodic benefit costs increase as the expected long-term rate of return on plan assets assumption decreases.

Holding all other assumptions constant, lowering the expected long-term rate of return on plan assets assumption for

our funded defined benefit pension plans by 50 basis points would have increased the fiscal 2024 benefit costs by less than $0.2 million.

Holding all other assumptions constant, lowering the expected long-term rate of return on plan assets assumption for our funded defined benefit pension plans by 50 basis points would have increased the fiscal 2025 benefit costs by less than $0.2 million.

We develop our discount rate assumptions by evaluating input from third-party professional advisers, taking into consideration the current yield on country specific investment grade long-term bonds which provide for similar cash flow streams as our projected benefit obligations.

3 unchanged sentences

The assumed rates of increase generally decline ratably over a five year-period from the assumed current year healthcare cost trend rate of 8.5% to the assumed long-term healthcare cost trend rate.

A 100 basis point change in the assumed healthcare cost trend rate (including medical, prescription drug, and long-term rates) would have had the following effect at March 31, 2024:

100 Basis Point

(dollars in thousands) Increase Decrease

Effect on total service and interest cost components $ — $ —

Effect on postretirement benefit obligation 1 (1)

A 100 basis point change in the assumed healthcare cost trend rate (including medical, prescription drug, and long-term rates) would impact the total service and interest cost components and the post retirement benefit obligation by less than $0.1 million as of March 31, 2025.

We recognize an asset for the overfunded status or a liability for the underfunded status of defined benefit pension and post-retirement benefit plans in our balance sheets.

6 unchanged sentences

Forward-looking statements speak only as to the date the statement is made and may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “targets,” “forecasts,” “outlook,” “impact,” “potential,” “confidence,” “improve,” “optimistic,” “deliver,” “orders,” “backlog,” “comfortable,” “trend,” and “seeks,” or the negative of such terms or other variations on such terms or comparable terminology.

Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, statements related to the expected benefits of and timing of completion of the Restructuring Plan, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof.

Many of these important factors are outside of STERIS’s control.

No assurances can be provided as to any result or the timing of any outcome regarding matters described in STERIS’s securities filings or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results.

References to products are summaries only and should not be considered the specific terms of the product clearance or literature.

Many factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, those identified in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:

(a) operating costs, pressure on pricing (including, without limitation, as a result of inflation), Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected and leading to erosion of profit margins;

(b) STERIS’s ability to successfully integrate acquired businesses into its existing businesses, including unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of such businesses;

(c) changes in tax laws or interpretations or the adoption of certain income tax treaties in jurisdictions where we operate that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, or tariffs and/or other trade barriers;

(d) the possibility that compliance with laws, court rulings, certifications, regulations, or other regulatory actions, or the outcome of any pending or threatened litigation, including the EO litigation, may delay, limit or prevent new product or service introductions, impact production, supply and/or marketing of existing products or services, result in uncovered costs, or otherwise affect STERIS’s performance, results, prospects or value;

(e) the potential of international unrest, including military conflicts, economic downturn and effects of currency fluctuations;

(f) the possibility of delays in receipt of orders, order cancellations, or the manufacture or shipment of ordered products;

(g) the possibility that anticipated growth, performance or other results may not be achieved, or that timing, execution, impairments, or other issues associated with STERIS’s businesses, industry or initiatives may adversely impact STERIS’s performance, results, prospects or value;

(h) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade, regulations or orders, that may be implemented by the U.S.

administration or Congress , or of any responses thereto by non-U.S.

(i) the possibility that anticipated financial results, anticipated revenue, productivity improvements, cost savings, growth synergies, and other anticipated benefits of acquisitions, restructuring efforts, and divestitures will not be realized or will be less than anticipated;

(j) the level of STERIS’s indebtedness limiting financial flexibility or increasing future borrowing costs;

(k) the effects of changes in credit availability and pricing, as well as the ability of STERIS and STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed;

(l) the impacts of increasing competition within our industry, which may exert pressure on our pricing strategy or lead to decreasing demand for our products and services;

(m) the effects on our operations resulting from labor-related issues, such as strikes, unsuccessful union negotiations and other workforce disruptions;

(n) the possibility of economic downturns and recessions, which could negatively impact our business by reducing consumer and Customer spending.

Unless legally required, STERIS does not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized.

Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the ability to consummate the previously announced sale of STERIS’s Dental business segment (the “Transaction”) on the expected terms and within the anticipated time period, or at all, which is dependent on the satisfaction of certain closing conditions, some of which are outside of STERIS’s control, (b) STERIS’s ability to realize the expected benefits of the Transaction, including the earnout payment, (c) the risk that regulatory approvals that are required to complete the Transaction may not be received, may take longer than expected or may impose adverse conditions, (d) the impact of public health crises on STERIS’s operations, supply chain, material and labor costs, performance, results, prospects, or value, (e) STERIS's ability to achieve the expected benefits regarding the accounting and tax treatments of the redomiciliation to Ireland , (f) operating costs, Customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, Customers, clients or suppliers) being greater than expected, (g) STERIS’s ability to successfully integrate acquired businesses into its existing businesses, including unknown or inestimable liabilities, impairments, or increases in expected integration costs or difficulties in connection with the integration of such businesses, (h) uncertainties related to tax treatments under the TCJA and the IRA, (i) the possibility that Pillar Two Model Rules could increase tax uncertainty and adversely impact STERIS's provision for income taxes and effective tax rate and subject STERIS to additional income tax in jurisdictions who adopt Pillar Two Model Rules, (j) STERIS's ability to continue to qualify for benefits under certain income tax treaties in light of ratification of more strict income tax treaty rules (through the MLI) in many jurisdictions where STERIS has operations, (k) changes in tax laws or interpretations that could increase our consolidated tax liabilities, including changes in tax laws that would result in STERIS being treated as a domestic corporation for United States federal tax purposes, (l) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, including as a result of inflation, (m) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated, (n) the possibility that application of or compliance with laws, court rulings, certifications, regulations, or regulatory actions, including without limitation any of the same relating to FDA, EPA or other regulatory authorities, government investigations, the outcome of any pending or threatened FDA, EPA or other regulatory warning notices, actions, requests, inspections or submissions, the outcome of any pending or threatened litigation brought by private parties, or other requirements or standards may delay, limit or prevent new product or service introductions, affect the production, supply and/or marketing of existing products or services, result in costs to STERIS that may not be covered by insurance, or otherwise affect STERIS’s performance, results, prospects or value, (o) the potential of international unrest, including the Russia-Ukraine or Israel-Hamas military conflicts, economic downturn or effects of currencies, tax assessments, tariffs and/or other trade barriers, adjustments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (p) the possibility of reduced demand, or reductions in the rate of growth in demand, for STERIS’s products and services, (q) the possibility of delays in receipt of orders, order cancellations, or delays in the manufacture or shipment of ordered products, due to supply chain issues or otherwise, or in the provision of services, (r) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, impairments, regulatory, governmental, or other issues or risks associated with STERIS’s businesses, industry or initiatives including, without limitation, those matters described in STERIS's various securities filings, may adversely impact STERIS’s performance, results, prospects or value, (s) the impact on STERIS and its operations, or tax liabilities, of Brexit or the exit of other member countries from the EU, and the Company’s ability to respond to such impacts, (t) the impact on STERIS and its operations of any legislation, regulations or orders, including but not limited to any new trade or tax legislation (including CAMT and excise tax on stock buybacks), regulations or orders, that may be implemented by the U.S.

administration or Congress, or of any responses thereto, (u) the possibility that anticipated financial results or benefits of recent acquisitions, of STERIS’s restructuring efforts, or of recent divestitures, including anticipated revenue, productivity improvement, cost savings, growth synergies and other anticipated benefits, will not be realized or will be other than anticipated, (v) the level of STERIS’s indebtedness limiting financial flexibility or increasing future borrowing costs,

(w) rating agency actions or other occurrences that could affect STERIS’s existing debt or future ability to borrow funds at rates favorable to STERIS or at all, (x) the effects of changes in credit availability and pricing, as well as the ability of STERIS’s Customers and suppliers to adequately access the credit markets, on favorable terms or at all, when needed, and (y) the possibility that our expectations about the pre-tax savings resulting from the Restructuring Plan, the number of positions eliminated pursuant to the Restructuring Plan and the costs, charges and cash expenditures associated with the Restructuring

Plan may not be realized on the timeline or timelines we expect, or at all.

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 7. Management’s Discussion and Analysis