STERIS plc Morgan Stanley 24th Annual Global Healthcare Conference

Yeah. Thank you, and thank you for having me. I think the one thing that I would really point to is how resilient and how durable the demand is for our products and services, in particular in the healthcare space. In a time where our customers are definitely under some financial crunch, STERIS has emerged as really a provider that will work with them to help enable them to have better outcomes. What do I mean by that? I mean, as hospitals need to generate more revenue, they need to turn surgeries. They can't ever have an OR shut down because of lack of sterile product. Running a sterile processing department in the basement of the hospital is not very sexy, but it is absolutely essential, and it enables the hospital to turn those procedures.

It enables them to have compliant, safe outcomes, and ensure that everything operates as intended. We've had different conversations over the last year with the C-suite level of major healthcare systems. While it's tightened, I guess, on capital spending from time to time, we just haven't seen an impact because of the value we're delivering.

What I can do is provide a lot of data that we have or some anecdotal data, then let people draw their own conclusions of what's going on in the market. As point of reference, we touch the space in many different ways. First, on the industrial side, we're a major supplier of industrial sterilization across the globe, largest industrial sterilization company in the world. So we see roughly a third of the world's single-use medical devices come through one of our plants. What we have seen over the last, I don't know, year or so has been destocking in terms of volume, which is counter to what we're seeing in terms of procedure volume. So we'll just put that data aside for a second.

If we talk about the data that we have on the hospital side of things, we run in-house and outsource sterile processing departments for many large healthcare systems, as well as we have embedded data in the equipment in the sterile processing departments that track consumption of instruments and trays. So we see that across a broad network, in particular here in the U.S. Generally speaking, I've always said that in a good year, a really good year, we tend to see procedure growth at the high end of the range at 4%.

In a not so good year, it tends to be at the lower end of the range. I'd say we're definitely at the lower end of the range.

Okay. But growth nonetheless. There are some bright pockets- though, and not that that's not good because it is growth, but there are some bright pockets.

In particular, we see it in endoscopy.

Okay where we have a lot of exposure because we have a sterilization system that's specifically geared to reprocessing of endoscopes, and also a large repair operation and a device business.

But endoscopy, just as a market in terms of procedures, is up somewhere between 7% and 8.5%.

Yeah. due to some factors with screening age coming down and also the unfortunate, what seems like an increased occurrence of colon cancer in much younger people than previously seen.

Anyway, but to the procedure rates, we have all this data that suggests that we are seeing growth in the North American market and broadly around the world as well.