Steris STE Business Risk Report

A. Fluctuations in demand for medical equipment sterilization services: Steris faces risks from fluctuations in market demand, influenced by factors such as changes in healthcare protocols and economic cycles. These fluctuations can impact the revenue stability from its sterilization products and service segments.

B. Intense competition in the healthcare industry leading to pricing pressures: The competitive landscape in healthcare services, including medical sterilization, is intense, with many companies vying for market share. This leads to significant pricing pressures, which can affect Steris’s profitability and market strategy.

A. Changes in healthcare regulations impacting sterilization standards: Steris is subject to rigorous healthcare regulations, which can evolve and thereby impact the standards for sterilization services. Compliance with any new or changing regulations can result in increased operational costs.

B. Non-compliance with industry-specific quality and safety regulations: Failing to meet specific quality and safety standards can lead to sanctions, legal challenges, and harm to Steris’s reputation. Ongoing compliance is critical to operational continuity and customer trust.

A. Disruption in supply chain leading to manufacturing delays: Steris relies on a global supply chain that is susceptible to disruptions from geopolitical events, natural disasters, or pandemics. Such disruptions can lead to significant manufacturing delays and impact service delivery.

B. Technology failures impacting production processes: As a technology-dependent company, Steris faces risks of operational setbacks due to technology failures. Breakdowns in manufacturing equipment or software glitches can lead to inefficiencies and increased costs.

A. Exposure to foreign exchange rate fluctuations due to global operations: With operations in multiple countries, Steris is exposed to foreign exchange rate fluctuations. These can negatively impact the reported earnings and create financial instability.

B. Increased debt levels affecting financial health and liquidity: Leveraging for acquisitions or other investments increases Steris’s debt levels, potentially impacting its financial health and reducing liquidity, particularly if earnings do not meet expectations.

A. Product recalls or quality issues impacting brand reputation: Any product recall or persistent quality issue can damage Steris’s reputation, leading to a loss of customer trust and potentially lower sales volumes.

B. Negative publicity related to environmental practices or labor standards: Environmental or labor-related controversies can lead to negative publicity, affecting Steris’s brand image and possibly resulting in boycotts or loss of business opportunities.

A. Data breaches compromising confidential information: Being in the healthcare industry, Steris handles sensitive data that, if breached, could expose the company to legal penalties and significant reputation damage.

B. Cyber attacks disrupting operations and leading to financial losses: Cyber threats such as ransomware or other malicious attacks could disrupt Steris’s operations, leading to operational downtime and financial strain from recovery costs.

A. Diversification of product portfolio to mitigate market risks: Steris actively diversifies its product offerings to reduce dependence on any single market or demographic, thus mitigating potential market-driven risks.

B. Continuous monitoring and compliance with changing regulations: The company maintains a strong compliance framework to quickly adapt to any changes in healthcare regulations, thereby protecting against compliance risks.

C. Implementing robust supply chain management practices: By enhancing its supply chain management, Steris aims to minimize disruptions and ensure steady production and service delivery.

D. Investing in cybersecurity infrastructure and regular assessments: Steris invests in advanced cybersecurity measures and conducts regular system assessments to protect against cyber threats.

E. Maintaining a strong focus on quality control measures and customer satisfaction: Quality control and customer satisfaction remain central to Steris’s operational strategy, helping mitigate any potential reputation risks associated with product quality or service failures.