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$STE Risk Factor changes from 00/05/29/25/2025 to 00/05/29/26/2026
ITEM 1A.RISK FACTORSThis section describes certain risk factors that could affect our business, financial condition and results of operations.You should consider these risk factors when evaluating the forward-looking statements contained in this Annual Report on Form 10-K, because our actual results and financial condition might differ materially from those projected in the forward-looking statements should these risks occur. We face other risks besides those highlighted below. These other risks include additional uncertainties not presently known to us or that we currently believe are immaterial, but may ultimately have a significant impact. In addition, the impacts of ongoing geopolitical conflicts may also exacerbate any of these risks, which could have a material effect on us. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. Should any of these risks, described below or otherwise, actually occur, our business, financial condition, performance, prospects, value, or results of operations could be negatively affected.LEGAL, REGULATORY AND TAX RISKSDoing Business Internationally Changes in economic climate may adversely affect us.Adverse economic cycles or conditions, and Customer, regulatory or government responses to those cycles or conditions, have affected and could further affect our results of operations. The onset of these cycles or conditions may not be foreseeable and there can be no assurance when they will begin to improve after they occur. There also can be no assurance as to the strength or length of any recovery from a business downturn or recession. Credit and liquidity problems may make it difficult for some businesses to access credit markets and obtain financing and may cause some businesses to curtail spending to conserve cash in anticipation of persistent business slowdowns and liquidity needs. If our Customers have difficulty financing their purchases due to tight credit markets or related factors or because of other operational or utilization problems they may be experiencing or otherwise decide to curtail their purchases, our business could be adversely affected. Our exposure to bad debt losses could also increase if Customers are unable to pay for products previously ordered and delivered.Some of our Customers are governmental entities or other entities that rely on government healthcare systems or government funding. If government funding for healthcare becomes limited or restricted in countries in which we operate, including as a result of the impacts of a pandemic or its residual effects, our Customers may be unable to pay their obligations on a timely basis or to make payment in full and it may become necessary to increase reserves. In addition, there can be no assurance that there will not be an increase in collection difficulties. Prospectively, additional adverse effects resulting from these conditions may include decreased healthcare utilization, further pricing pressure on our products and services, and/or weaker overall demand for our products and services, particularly capital products. The effects of geopolitical instability may adversely affect us and create significant risks and uncertainties for our business, with the ultimate impact dependent on future developments, which are highly uncertain and unpredictable.Geopolitical instability has negatively impacted, and could in the future negatively impact, the global and U.Ongoing geopolitical instability has negatively impacted, and could in the future negatively impact, the global and U. S. economies, including by causing supply chain disruptions, rising inflation, volatility in capital markets and foreign currency exchange rates, rising interest rates, reduced consumer and Customer demand, economic slowdowns and recessions and heightened cybersecurity risks. The extent to which such geopolitical instability, including changes to trade policy, adversely affects our business, financial condition and results of operations, as well as our liquidity and capital profile, may depend on future developments that are highly uncertain and unpredictable. The extent to which such geopolitical instability adversely affects our business, financial condition and results of operations, as well as our liquidity and capital profile, may depend on future developments that are highly uncertain and unpredictable. If geopolitical instability or evolving trade policy materially affects us, it may also have the effect of heightening other risks related to our business. If geopolitical instability materially affects us, it may also have the effect of heightening other risks related to our business. The potential impacts of geopolitical instability, which may result from the actions of state and non-state actors, include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials and energy, reduced consumer and Customer demand, economic slowdowns and recessions and other risks, including an elevated risk of cybersecurity threats and the potential for new or further sanctions, tariffs or changes to international trade policy.The potential impacts of such geopolitical instability include supply chain and logistics disruptions, financial impacts including volatility in foreign exchange and interest rates, increased inflationary pressure on raw materials and energy, reduced consumer and Customer demand, economic slowdowns and recessions and other risks, including an elevated risk of cybersecurity threats and the potential for new or further sanctions, tariffs or changes to international trade policy. Furthermore, the U. Furthermore, some non-U. S. and other countries have announced and enacted changes, and planned changes, to international trade policy, including increasing tariffs on imports, and potentially renegotiating or terminating existing trade agreements. and other countries have announced changes, and planned changes, to international trade policy, including increasing tariffs on imports, and potentially renegotiating or terminating existing trade agreements. The international trade environment is highly dynamic, and such changes, and retaliatory responses thereto, continue to evolve. Tariffs, trade restrictions and other changes to international trade policies may result in increased production costs and product pricing, supply chain disruptions, limited access to end markets, lower profitability, increasing inability of consumers and Customers to pay, reduced consumer and Customer demand, economic slowdowns and recessions and uncertainty related to planning long-term investments and strategies, and may have other competitive effects, including those exacerbated by competitors with different supply chain footprints, each of which could have a material adverse effect on our business. Tariffs, trade restrictions and other changes to international trade policies may result in increased production costs and product pricing, supply chain disruptions, limited access to end markets, lower profitability, increasing inability of consumers and Customers to pay, reduced consumer and Customer demand, economic slowdowns and recessions and uncertainty related to planning long-term investments and strategies, and may have other competitive effects, each of which could have a material adverse effect on our business. In addition, the United States-Mexico-Canada Agreement (“USMCA”) requires a formal six-year joint evaluation of the agreement. The first such review is expected to commence on July 1, 2026, the sixth anniversary of the agreement's entry into 13Table of Contentsforce. The U.The U. S. has solicited feedback from the trading community regarding the operation of the USMCA, and the joint review could result in changes, including, for example, the processes by which goods qualify for preferential treatment, the tariffs applicable to products or other restrictions on the movement of goods within the region under the USMCA. Changes to the USMCA could adversely affect our manufacturing operations and those of our suppliers in Canada and Mexico and impact our ability to manufacture and market products or source materials at competitive prices, which could have a material adverse effect on our financial condition and results of operations. We cannot predict the ultimate scope, duration, or impact of current or future tariff measures, changes to existing trade agreements, such as the USMCA, or the imposition of other trade restrictions.We may also need to make material changes to our global production footprint and workforce as a result of geopolitical developments or changes to trade policy, which could require significant capital expenditures and could result in asset impairments and other charges, including restructuring charges, any of which could be material. The duration and scope of all such changes that have been and will ultimately be implemented are not known at this time, and as such, any resulting impacts on our business are uncertain.Compliance with multiple, and potentially conflicting, international laws and regulations, import and export limitations, anti-corruption laws, and exchange controls may be difficult, burdensome or expensive.13Table of ContentsCompliance with multiple, and potentially conflicting, international laws and regulations, import and export limitations, anti-corruption laws, and exchange controls may be difficult, burdensome or expensive. We are subject to compliance with various laws and regulations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. We are also subject to limitations on trade with sanctioned persons or persons in sanctioned countries and exchange controls. We are also subject to limitations on trade with persons in sanctioned countries. While our employees and agents are required to comply with these laws and regulations, our internal policies and procedures may not protect us from violations of these laws, which violations could affect financial condition, results of operations, or cash flows. While our employees and agents are required to comply with these laws, we cannot assure you that our internal policies and procedures will always protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics. Healthcare Policy and Reimbursement Changes in healthcare policy or government and other third-party payor reimbursement levels to healthcare providers, or failure to meet healthcare reimbursement or other requirements, might negatively impact our business.We sell many of our products and services to hospitals and other healthcare providers and pharmaceutical manufacturers. Many of these Customers are subject to or supported by government programs or receive reimbursement for services from third-party payors, such as government programs, including Medicare and Medicaid in the U.S., private insurance plans, and managed care programs. Reimbursement systems vary significantly by country. Government-managed healthcare systems control reimbursement for healthcare services in many countries. Public budgetary constraints or uncertainties, which may be exacerbated by public health crises, may significantly impact the ability of hospitals, pharmaceutical manufacturers, and other Customers supported by such systems to purchase our products. Government or other third-party payors may deny or change coverage, reduce their current levels of reimbursement for healthcare services, or otherwise implement measures to regulate pricing or contain costs. In addition, our costs may increase more rapidly than reimbursement levels or permissible pricing increases or we may not satisfy the standards or requirements for reimbursement. Various healthcare reform proposals have emerged and may in the future emerge at the federal and state level, and we are unable to predict which, if any, of those proposals will be enacted or the level of government funding of healthcare in any country in which we operate. For example, in 2025, the United States passed the One Big Beautiful Bill Act (the “OBBBA”) which may reduce Medicaid funding, result in decreased Medicaid reimbursements and negatively impact Customers who purchase our products and services.Product and Service Related Regulations and Claims We are subject to extensive regulatory requirements and must receive and maintain regulatory clearance or approval for many products and operations. Failure to receive or maintain, or delays in receiving, clearance or approvals may negatively impact our revenues, profitability, financial condition, or value.Our operations are subject to extensive regulation in the countries where we do business. In the U.S., our products and services are regulated by the FDA and other regulatory authorities. In many foreign countries, sales of our products and services are subject to extensive regulations that may or may not be comparable to those of the FDA. In Europe, our products are regulated primarily by country and community regulations of those countries within the European Economic Area and must conform to the requirements of those authorities.14Table of ContentsGovernment regulation applies to nearly all aspects of testing, manufacturing, safety, labeling, storing, recordkeeping, reporting, promoting, distributing, and importing or exporting of medical devices, products, and services.Government regulation applies to nearly all aspects of testing, manufacturing, safety, labeling, storing, recordkeeping, reporting, promoting, distributing, and importing or exporting of medical devices, products, and services. In general, unless an exemption applies, a sterilization, decontamination or medical device or product or service must receive regulatory approval or clearance before it can be marketed or sold. Modifications to existing products or the marketing of new uses for existing products also may require regulatory approvals, approval supplements or clearances. If there are delays in and/or we are unable to obtain any required approvals, approval supplements or clearances for any modification to a previously cleared or approved device, we may be required to cease manufacturing and sale, or recall or restrict the use of such modified device, pay fines, or take other action until such time as appropriate clearance or approval is obtained. Any protraction or de-prioritization or delay in regulatory review could materially affect our ongoing device design, development, and commercialization plans.Regulatory agencies may refuse to grant approval or clearance, or review and disagree with our interpretation of approvals or clearances, or with our decision that regulatory approval is not required or has been maintained. Regulatory submissions may require the provision of additional data and may be time consuming and costly, and their outcome is uncertain. Regulatory agencies may also change policies and procedures, change or reduce staff, adopt additional regulations, or revise existing regulations, each of which could prevent or delay approval or clearance of devices, or could impact our ability to market a previously cleared, approved, or unregulated device. Our failure to comply with the regulatory requirements of the FDA or other applicable regulatory requirements in the U.S. or elsewhere might subject us to administratively or judicially imposed sanctions. These sanctions include, among others, warning letters, fines, civil penalties, criminal penalties, loss of tax benefits, injunctions, product seizure, recalls, suspensions or restrictions, re-labeling, detention, and/or debarment.Our products are subject to recalls and restrictions, even after receiving U.S. or foreign regulatory clearance or approval.Ongoing medical device reporting regulations require that we report to appropriate governmental authorities in the U.S. and/or other countries when our products cause or contribute to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to a death or serious injury if the malfunction were to reoccur. Governmental authorities can require product recalls or impose restrictions for product design, manufacturing, labeling, clearance, or other issues. For the same reasons, we may voluntarily elect to recall or restrict the use of a product. Any recall or restriction could divert managerial and financial resources and might harm our reputation among our Customers and other healthcare professionals who use or recommend our products and services. We may be adversely affected by product liability claims or other legal actions or regulatory or compliance matters.We face an inherent business risk of exposure to product liability claims and other legal and regulatory actions. A significant increase in the number, severity, amount, or scope of these claims and actions may, as described above with respect to recalls and restrictions, result in substantial costs and harm our reputation or otherwise adversely affect product sales and our business. Product liability claims and other legal and regulatory actions may also distract management from other business responsibilities.We are also subject to a variety of other types of claims, proceedings, investigations, and litigation initiated by government agencies or third parties and other potential risks and liabilities. These include compliance matters, product regulation or safety, taxes, employee benefit plans, employment discrimination, health and safety, environmental, antitrust, customs, import/export, government contract compliance, financial controls or reporting, intellectual property, allegations of misrepresentation, false claims or false statements, commercial claims, claims regarding promotion of our products and services, or other similar or different matters. Any such claims, proceedings, investigations or litigation, regardless of the merits, might result in substantial costs, restrictions on product use or sales, or otherwise negatively impact our business.Administratively or judicially imposed or agreed sanctions might include warning letters, fines, civil penalties, criminal penalties, loss of tax benefits, injunctions, product seizure, recalls, suspensions or restrictions, re-labeling, detention, and/or debarment. We also might be required to take actions such as payment of substantial amounts, or revision of financial statements, or to take, or be subject to, the following types of actions with respect to our products, services, or business: redesign, re-label, restrict, or recall products; cease manufacturing and selling products; seizure of product inventory; comply with a court injunction restricting or prohibiting further marketing and sale of products or services; comply with a consent decree, which could result in further regulatory constraints; dedication of significant internal and external resources and costs to respond to and comply with legal and regulatory issues and constraints; respond to claims, litigation, and other proceedings brought by Customers, users, governmental agencies, and others; disruption of product improvements and product launches; discontinuation of certain product lines or services; or other restrictions or limitations on product sales, use or operation, or other activities or business practices.Some product replacements or substitutions may not be possible or may be prohibitively costly or time consuming. The impact of any legal, regulatory, or compliance claims, proceeding, investigation, or litigation, is difficult to predict. 15Table of ContentsWe maintain product liability and other insurance with coverages believed to be adequate. We maintain product liability and other insurance with coverages believed to be adequate. However, product liability or other claims may exceed insurance coverage limits, fines, penalties and regulatory sanctions may not be covered by insurance, or insurance may not continue to be available or available on commercially reasonable terms. Additionally, our insurers might deny claim coverage for valid or other reasons or may become insolvent.Our business and financial condition could be adversely affected by difficulties in acquiring or maintaining a proprietary intellectual ownership position.To maintain our competitive position for our products, we need to obtain patent or other proprietary rights for new and improved products and to maintain and enforce our existing patents and other proprietary rights. We typically apply for patents in the U.S. and in strategic other countries. We may also acquire patents through acquisitions. We may encounter difficulties in obtaining or protecting patents.We rely on a combination of patents, trademarks, trade secrets, know-how, and confidentiality agreements to protect the proprietary aspects of our technology. These measures afford only limited protection, and competitors may gain access to our intellectual property and proprietary information. Litigation may be necessary to enforce or defend our intellectual property rights, to protect our trade secrets, and to determine the validity and scope of our proprietary rights. Litigation may also be brought against us claiming that we have violated the intellectual property rights of others. Litigation may be costly and may divert management’s attention from other matters. Additionally, in some foreign countries with weaker intellectual property rights, it may be difficult to maintain and enforce patents and other proprietary rights or defend against claims of infringement. Tax RisksWe may be adversely impacted by changes in tax laws or challenges to our tax positions, and our effective tax rate is uncertain and may vary from expectations, which could have a material impact on our results of operations and earnings per share.We are subject to the tax laws at the federal, state or provincial, and local government levels in the many jurisdictions in which we operate or sell our products or services. Tax laws may change in ways that adversely affect our tax positions, effective tax rate and cash flow. Tax laws might change in ways that adversely affect our tax positions, effective tax rate and cash flow. These tax laws are extremely complex and subject to varying interpretations, and we are subject to tax examinations in various jurisdictions that may assess additional tax liabilities against us. Our tax reporting positions may be challenged by relevant tax authorities, we may incur significant expense in our efforts to defend those challenges, and we may be unsuccessful in such efforts. Our tax reporting positions might be challenged by relevant tax authorities, we might incur significant expense in our efforts to defend those challenges, and we might be unsuccessful in those efforts. Developments in examinations and challenges may materially change our provision for taxes in the affected periods and may differ materially from our historical tax accruals. Developments in examinations and challenges might materially change our provision for taxes in the affected periods and might differ materially from our historical tax accruals. Any of these risks may have a materially adverse impact on our business operations, our cash flows, our financial position or results of operations and our effective tax rate. Any of these risks might have a materially adverse impact on our business operations, our cash flows and our financial position or results of operations. In addition, there can be no assurance that we will be able to maintain any particular worldwide effective corporate tax rate.There can be no assurance that we will be able to maintain any particular worldwide effective corporate tax rate. We cannot give any assurance as to what our effective tax rate will be in the future because of, among other things, uncertainty regarding the tax policies of the jurisdictions in which we and our affiliates operate and uncertainty of earnings across geographies. We cannot give any assurance as to what our effective tax rate will be in the future because of, among other things, uncertainty regarding the tax policies of the jurisdictions in which we and our affiliates operate. Further, our effective tax rate may increase as a result of withholding taxes incurred in connection with cross-border cash movements to fund operations, investments, and shareholder returns. These transfers may be subject to withholding taxes, and increases in such taxes or changes in applicable tax laws could place upward pressure on our effective tax rate. Our actual effective tax rate may vary from our expectations, and such variance may be material. Additionally, tax laws or their implementation and applicable tax authority practices in any particular jurisdiction could change in the future, possibly on a retroactive basis, and any such change could have a material adverse impact on us and our affiliates. In addition, the GloBE rules, which have been or are expected to be implemented in most of the jurisdictions where we have operations, and the CAMT (both defined and discussed in more detail below) may adversely impact our effective corporate tax rate. In addition, the GloBE rules, which have been or are expected to be implemented in most of the jurisdictions where we have operations, and the CAMT may adversely impact our effective corporate tax rate. Current economic and political conditions make tax rules in any jurisdiction subject to significant change.The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025. Some limited guidance has been issued clarifying the application of some of the provisions in this legislation, and more guidance is expected to be issued in the near future with respect to a number of income tax provisions in the OBBBA. The law did not have a material impact on our fiscal 2026 consolidated financial statements, and we do not expect it to have a material impact on our effective tax rate in future years. However, we are unable to fully predict the overall impact that the OBBBA and additional guidance may have on our business. Furthermore, some non-U.S. jurisdictions have raised tax rates, and it is reasonable to expect that other global taxing authorities will be reviewing current legislation for potential modifications. jurisdictions have raised tax rates, and it is reasonable to expect that other global taxing authorities will be reviewing current legislation for potential modifications in reaction to the current provisions of the TCJA, potential future modifications or repeal of certain provisions of the TCJA, and other current economic conditions. In August 2022, the Inflation Reduction Act (the “IRA”) was signed into law. One of the provisions in the IRA added a corporate alternative minimum tax (“CAMT”) to the U.S. Internal Revenue Code of 1986, as amended (the “Code”), beginning for fiscal years 2023. Although we do not expect to be subject to the CAMT regime for fiscal years through 2026, we continue to monitor our status under the CAMT rules. If in the future we become subject to CAMT, and if our regular income tax 16Table of Contentsliability in the U.S. is lower than the income tax liability calculated under the CAMT provisions, we will be subject to additional income taxes in the U.S.In addition, further changes in the tax laws of other jurisdictions will likely arise, including as a result of the base erosion and profit shifting ("BEPS") project undertaken by the Organization for Economic Cooperation and Development ("OECD"). The OECD, which represents a coalition of member countries, has issued recommendations that, in some cases, would make substantial changes to numerous long-standing tax positions and principles. Following the issuance of such recommendation, in December 2022, the European Union issued a directive to adopt Global Base Erosion laws ("GloBE" or "Pillar Two") in the EU member countries, in most cases beginning in fiscal year 2024. Following the issuance of such recommendation, in December 2022, the European Union issued a directive to adopt Global Base Erosion laws (a/k/a GloBE or Pillar Two) in the EU member countries, in most cases beginning in fiscal year 2024. Most EU member countries and many non-EU member countries have already adopted local legislation based on GloBE Model Rules. Some of the countries that have not yet adopted GloBE are expected to do so in the near future. In addition, the GloBE rules have certain transition period provisions that apply to certain intercompany transactions occurring between December 1, 2021 and the effective date of the GloBE rules in a given jurisdiction. These transition period provisions may have an adverse impact on our effective tax rate, and subject us to additional income tax, in some of the jurisdictions that adopt the GloBE rules. OECD continues to issue guidance under GloBE which could result in amendments and modifications of the local GloBE rules and further uncertainty of GloBE’s impact on our income tax expense. In the most recent guidance, issued in January of 2026, OECD modified, among other things, certain rules relating to the one-year extension of the transitional country-by-country reporting safe harbor and the addition of both a permanent simplified effective tax rate safe harbor and a substance-based tax incentive safe harbor. This guidance also introduced a so-called “side-by-side” safe harbor pursuant to which multinational groups with an ultimate parent entity (or a "UPE") located in a qualifying jurisdiction are effectively exempt from certain GloBE taxes. At this time, only the United States is included on the list of qualifying jurisdictions allowing U.S.-parented multinational companies to avoid such GloBE taxes. While we have substantial presence in the U.S., we do not anticipate to benefit from the side-by-side safe harbor at this time, because we are a multinational enterprise with a UPE organized in Ireland. As a result, the GloBE rules could subject us to additional income taxes in the jurisdictions that adopted GloBE if our effective corporate tax rate in those jurisdictions (determined under the GloBE rules) is below 15%. The GloBE rules could subject us to additional income taxes in the jurisdictions that adopted GloBE if our effective corporate tax rate in those jurisdictions (determined under the GloBE rules) is below 15%. Accordingly, the GloBE rules could increase tax uncertainty and adversely impact our provision for income taxes.Changes in tax treaties and trade agreements could negatively impact our costs, results of operations and earnings per share.16Table of ContentsChanges in tax treaties and trade agreements could negatively impact our costs, results of operations and earnings per share. Legislative and regulatory action may be taken in the U.S. which, if ultimately adopted, could override or otherwise adversely impact tax treaties upon which we rely or broaden the circumstances under which STERIS plc would be considered a U.S. resident, each of which could materially and adversely affect our tax obligations. We cannot predict the outcome of any specific legislative or regulatory proposals. However, if proposals are adopted that have the effect of disregarding our organization in Ireland or limiting our ability as an Irish company to take advantage of tax treaties with the U.S., we could be subject to increased taxation and/or potentially significant expense. Further, our organization under the laws of Ireland could be challenged by the IRS. Should the IRS assert that we should be treated as a U.S. corporation for U.S. federal tax purposes, we could be subject to substantial additional U.S. tax liability and non-U. tax liability. S. holders of our ordinary shares would be subject to U.S. withholding tax on the gross amount of any dividends we paid to such shareholders. For Irish tax purposes, we are expected, regardless of our U. For Irish tax purposes, we are expected, regardless of any application of Section 7874, to be treated as an Irish tax resident. S. tax resident status, to be treated as an Irish tax resident. Consequently, if we are treated as a U.S. corporation for U.S. federal tax purposes, we could be liable for both U. federal tax purposes, we could be subject to substantial additional U. S. and Ireland taxes, which could have a material adverse effect on our financial condition and results of operations.On June 7, 2017, several countries, including many countries in which we operate and have subsidiaries, adopted the OECD’s Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the "MLI"), which generally is meant to prevent treaty abuse, improve dispute resolution, prevent the artificial avoidance of permanent establishment status and neutralize the effect of hybrid mismatch agreements. The MLI came into effect on July 1, 2018. The MLI may modify effected tax treaties making it more difficult for us to obtain advantageous tax-treaty benefits. The number of affected tax treaties could eventually be significant. To date, more than 100 jurisdictions have joined the BEPS MLI, out of which most jurisdictions have ratified, accepted, or approved the MLI, and it covers almost 2,000 bilateral tax treaties worldwide. To date, more than 100 jurisdictions have joined the BEPS MLI, out of which most jurisdictions have ratified, accepted, or approved the MLI, and it covers around 1,950 bilateral tax treaties worldwide. Signatories include jurisdictions from all continents and all levels of development and other jurisdictions are also actively working towards signature. As a result, our income may be taxed in jurisdictions where it is not currently taxed and at higher rates than it is currently taxed, all of which may increase our effective tax rate.Existing free trade laws and regulations provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws and regulations or policies governing the terms of foreign trade, and in particular, increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products could have a material adverse impact on our business and financial results.17Table of ContentsLegislation relating to the denial of U.S. federal or state governmental contracts to U.S. companies that redomicile abroad could adversely affect our business.Various U.S. federal and state legislative proposals that would deny governmental contracts to redomiciled companies may, and future proposals could, adversely affect us if adopted into law. We are unable to predict the likelihood that any such proposed legislation might become law, the nature of regulations that may be promulgated under any future legislative enactments, or the effect such enactments or increased regulatory scrutiny could have on our business.BUSINESS AND OPERATIONAL RISKSOur business environment is highly competitive, and if we fail to compete successfully, our revenues and results of operations may be negatively impacted.We operate in a highly competitive environment. Our businesses compete with other broad-line manufacturers, as well as many smaller businesses specializing in particular products or services, primarily on the basis of brand, design, quality, safety, ease of use, serviceability, price, product features, warranty, delivery, service, and technical support. We also continue to work with our suppliers to implement plans to improve our competitive position by reducing material costs and manufacturing inefficiencies and realize productivity gains and distribution and supply chain efficiencies. Maintaining and improving our competitive position will require continued investment by us in manufacturing, engineering, quality standards, marketing, Customer service and support of our distribution networks. We also face increased competition from new infection prevention, sterile processing, contamination control, surgical support, cleaning consumables, gastrointestinal endoscopy accessories, contract sterilization, and other products and services entering the market. We face increased competition from new infection prevention, sterile processing, contamination control, surgical support, cleaning consumables, 17Table of Contentsgastrointestinal endoscopy accessories, contract sterilization, and other products and services entering the market. Competitors and potential competitors also are attempting to develop alternate technologies and sterilizing agents, as well as disposable medical instruments and other devices designed to address the risk of contamination. In addition, we also face competition within our AST segment from our Customers who may insource their sterilization needs by utilizing their own technology and systems. If we cannot successfully implement our strategies to compete, our revenues and results of operations may be negatively impacted, which could adversely affect our business, financial condition and results of operations or our long-term prospects.Consolidations among our healthcare and pharmaceutical Customers may result in a loss of Customers or more significant pricing pressures.A number of our Customers have consolidated. These consolidations are due in part to healthcare cost reduction measures initiated by competitive pressures as well as legislators, regulators and third-party payors. This may result in greater pricing pressures on us and in some cases loss of Customers. Furthermore, consolidation in healthcare may continue, including as a result of trends regarding increasing vertical integration and corporate ownership. Additional consolidations could result in a loss of Customers or more significant pricing pressures.Supply chain disruption might increase our production costs, limit our production capabilities or curtail our operations.We purchase raw materials, fabricated and other components, and energy supplies from a variety of suppliers. Key raw materials include stainless steel, organic and inorganic chemicals, fuel, cobalt-60 and EO, and key components include plastic components, as well as various electronics including control boards and computer chips. The availability and prices of raw materials and energy supplies are subject to volatility and are influenced by worldwide economic conditions, speculative action, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, and other factors. In addition, administrations in the U.S. and other countries continue to announce plans to implement or increase tariffs and other trade barriers, and it remains unclear what the ultimate outcome of these policy changes will be on our supply chains. and other countries have recently announced plans to implement or increase tariffs, and it remains unclear what the ultimate outcome of these policy changes will be on our supply chains. Also, certain of our key materials and components have a limited number of suppliers, and some are single-sourced in certain regions of the world, such as cobalt-60 and EO, which are necessary for our AST operations. Given the limited number of suppliers for such materials, they may become subject to supply shortages or unavailability or increasing prices which could have a negative impact on our operations. Further, changes in regulatory requirements regarding the use of these materials might disrupt or cause shutdowns of portions of our AST operations or have other adverse consequences. Shortages in supply, increased regulatory or security requirements, or increases in the price of any of the raw materials, components and energy supplies used in our operations may adversely affect us. 18Table of ContentsOur operations, and those of our suppliers, are subject to a variety of business continuity hazards and risks, any of which could interrupt production or operations or otherwise adversely affect our performance, results, or value. Our operations, and those of our suppliers, are subject to a variety of business continuity hazards and risks, any of which could interrupt production or operations or otherwise adversely affect our performance, results, or value. Business continuity hazards and other risks include: explosions, fires, earthquakes, public health crises, extreme weather conditions, and other disasters, including those associated with climate change; disruptions of supply chains, or distribution for certain products or commodities; utility or other mechanical failures; unscheduled downtime; labor difficulties; inability to obtain or maintain any required licenses or permits; disruption of communications; data security, preservation and redundancy disruptions; inability to hire or retain key management or employees; and regulation of the safety, security or other aspects of our operations.The occurrence of these types of events has disrupted and may in the future disrupt or shut down operations, or otherwise adversely impact the production or profitability of a particular facility, or our operations as a whole. These events also might cause personal injury, loss of life, and other social and human effects (such as population dislocations), compliance costs and transition risks (such as regulatory or technology changes) or severe damage to or destruction of inventory, equipment, and other property, and for injuries occurring at our facilities or as a result of actions of our employees, result in liability claims against us. Although we maintain property and casualty insurance and liability and similar insurance of the types and in the amounts that we believe are appropriate for our business, there can be no assurance that we will be able to continue our insurance with acceptable terms, conditions or limits or that our insurance policies will provide adequate protection against all potential significant risks and liabilities. Expectations relating to corporate responsibility considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business.Many governments, regulators, investors, employees, Customers and other stakeholders continue to be focused on corporate responsibility, including policies regarding climate change and greenhouse gas emissions. Other stakeholders, including governments, regulators, and elected officials have expressed concerns about or opposition to businesses' social commitments, and sustainability goals, and other ESG-focused policies, including concerns about or allegations of "greenwashing". Responding to these considerations involves risks and uncertainties, requires significant investments and is impacted by factors that may be outside our control. In addition, some stakeholders may disagree with our priorities, statements and initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where corporate focus should be placed, including differing or conflicting views of regulators or elected officials in the various jurisdictions in which we operate. For instance, the European Union has generally adopted more extensive sustainability reporting requirements and environmental regulations, while certain U.S. federal and state authorities have adopted or proposed measures that may restrict or penalize companies for adopting certain ESG-related practices, targets or investment criteria. Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international laws and regulations or meet evolving and varied stakeholder expectations and standards could result in reputational harm or advocacy group campaigns or legal and regulatory proceedings against us that could materially adversely affect our business, reputation, results of operations, financial condition and stock price. Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international laws and regulations or meet evolving and varied stakeholder 18Table of Contentsexpectations and standards could result in advocacy group campaigns or legal and regulatory proceedings against us that could materially adversely affect our business, reputation, results of operations, financial condition and stock price. Many of our Customers are also committing to, and may become subject to legal or regulatory requirements with respect to, long-term targets to reduce greenhouse gas emissions within their supply chains and associated emissions reporting. If we are unable to support Customers in fulfilling these obligations or achieving reductions, we may lose revenue if our Customers find other suppliers who are better able to support such efforts. A failure, or perceived failure, to respond to expectations of all key stakeholders could cause harm to our business and reputation and have a negative impact on the market price of our ordinary shares. Further, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on social and environmental disclosures and commitments. Such ratings are used by some investors to inform their investment or voting decisions. Unfavorable ratings could lead to negative investor sentiment toward us and/or our industry, which could have a negative impact on our access to and costs of capital.We may be adversely affected by global climate change or by existing and future legal, regulatory or market responses to such change.The long-term effects of climate change are difficult to assess and predict. The impacts may include social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (such as regulatory or technology changes) and others. The effects could impair, for example, the availability and cost of energy (including utilities), and we may bear losses as a result.The regulations surrounding greenhouse gas emissions disclosures and sustainability reporting have also continued to evolve, with compliance and other requirements varying by jurisdiction, which subjects us to transition risks.The regulations surrounding greenhouse gas emissions disclosures and sustainability reporting have also continued to evolve, with compliance requirements varying by jurisdiction. Governments, regulatory bodies and other stakeholders vary in their support of or opposition to sustainability and environmental matters in different jurisdictions in which we operate, which can lead to rapid shifts in reporting obligations and differing obligations across these jurisdictions. Both the standard setting and regulatory landscapes are also extremely complex and present 19Table of Contentssignificant compliance and communication challenges in light of these uncertain and varied approaches to greenhouse gas emissions disclosures and sustainability reporting. Both the standard setting and regulatory landscapes are also extremely complex and present significant compliance and communication challenges in light of these uncertain and varied approaches to greenhouse gas emissions disclosures and sustainability reporting. If our greenhouse gas emissions-related data, processes or reporting are incomplete or inaccurate, we fail to comply with relevant reporting frameworks or efficiency standards from existing or newly emerging regulations, or we become subject to expanded carbon pricing mechanisms, we may incur enhanced costs, monetary penalties and reputational harm, investor demand for our securities could decrease, or we could become subject to litigation or governmental investigations, any of which may have a material adverse effect on our financial condition and results of operations. If our greenhouse gas emissions-related data, processes or reporting are incomplete or inaccurate, or if we fail to comply with relevant reporting frameworks from existing or newly emerging regulations, we may incur monetary penalties and reputational harm, investor demand for our securities could decrease, or we could become subject to litigation or governmental investigations, any of which may have a material adverse effect on our financial condition and results of operations. The introduction and evolution of climate- and sustainability-related laws, regulations and reporting requirements—many of which are not uniform across jurisdictions—can increase the complexity and cost of compliance and heighten our exposure to enforcement actions, litigation and reputational harm. For example, the European Union adopted the CSRD in 2023, and in 2025 the European Commission proposed amendments to the CSRD aimed at simplifying sustainability reporting in Europe. Such amendments entered into force in March 2026, with transposition into national law by EU member states required in 2027, while changes to the ESRS are expected to be finalized later in calendar year 2026. While the EU has adopted extensive requirements through CSRD and ESRS, which continue to evolve, other jurisdictions, including, for example, the United Kingdom and California, have their own sustainability reporting frameworks. Managing compliance across these inconsistent regimes is complex and costly, and may result in disclosures that emphasize different metrics, use different methodologies or reach different conclusions depending on the applicable frameworks. We may also face challenges in presenting consistent and comparable sustainability information to global stakeholders. These changes, and any other new or pending legal or regulatory matters, may result in the expenditure of additional resources or costs to comply with such requirements, which could affect our financial condition, results of operations or cash flows. Our operations are subject to regulations and permitting, which may be changed or amended by the relevant authorities, and which may limit or eliminate our current operations or increase the complexity, burden, or expense of compliance, and regulated materials or processes that we use in our operations are, and may in the future become subject to litigation.Our AST segment is a technology-neutral contract sterilization service that offers our Customers a wide range of sterilization modalities through a worldwide network of over 60 contract sterilization and laboratory facilities. One of the modalities offered by our AST operations is EO sterilization. In the U.S., several regulators, including the EPA, FDA, and agencies at the state and local level, play a role in regulating the use of EO sterilization. In 2016, the EPA changed the cancer risk basis for EO and determined that EO is carcinogenic to humans. Announcements of the temporary or permanent closure of EO sterilization facilities operated by others have been associated with state and/or local regulatory or other legal action related to EO emissions at those facilities. Our AST operations have taken and will continue to take measures to comply with all applicable emissions regulations and to reduce emissions. However, no assurance can be given that current or future legislative or regulatory action, or current or future litigation to which we are or may become a party, will not significantly affect the costs of conducting our EO contract sterilization operations or impact the use of EO in our contract sterilization operations. However, no assurance can be given that current or future legislative 19Table of Contentsor regulatory action, or current or future litigation to which we are or may become a party, will not significantly affect the costs of conducting our EO contract sterilization operations or impact the use of EO in our contract sterilization operations. A significant reduction in our EO contract sterilization activities may have a material adverse effect on our financial condition and results of operations. Further, we have settled claims of liability resulting from EO sterilization activities in the past and could in the future be liable for further material damages and fines as a result of legislative or regulatory action or litigation, and any current or future liability could exceed our insurance and indemnification coverage, if any, and have a material adverse effect on our financial condition. Additionally, for many medical devices, EO sterilization may be the only current method of sterilization that effectively sterilizes and does not damage the device during the sterilization process. In the event of regulatory, legislative, or legal action that curtails or eliminates EO sterilization, there could be a shortage of medical devices and consequently a decline in surgical procedures. A decline in surgical procedures could result in a decline in demand for the products and services provided by our Healthcare business, which may have a material adverse effect on our financial condition and results of operations.Our EO sterilization operations subject us to claims of liability and associated adverse effects. Some current or past operators of EO sterilization facilities, including us, have been the target of litigation on behalf of private plaintiffs alleging personal and other injuries as a result of exposure to emissions from such facilities and have experienced adverse judgments and entered into settlements. These developments, as well as other publicity related to EO litigation or regulatory activity, may increase the likelihood that we will continue to be subject to these claims or that we will be subject to more claims on behalf of similar plaintiffs in the future. Although we believe we have valid defenses to such claims, there can be no assurance that we will prevail on the merits, as the outcome of trials before juries and other aspects of litigation can be highly unpredictable, and, as a result, we have chosen to pursue a settlement process with respect to certain pending cases in Illinois. Pursuant to binding confidential settlement agreements entered into in March and October 2025, we agreed to pay up to approximately $48.2 million to resolve substantially all of the claims for personal injury against a subsidiary related to EO exposure that are pending in the Circuit 20Table of ContentsCourt of Cook County, Illinois.2 million to resolve substantially all of the claims for personal injury against a subsidiary related to EO exposure that are pending in the Circuit Court of Cook County, Illinois. A claims process regarding confidential settlement agreements is ongoing and subject to final court approval. Furthermore, some claims would be subject to further litigation if certain terms of the applicable settlement agreements are not fulfilled and we exercise our walkaway rights. Please refer to Note 12 to our consolidated financial statements titled “Commitments and Contingencies” for further information. The financial impact of litigation, particularly mass tort action lawsuits, is also difficult to predict and a judgment entered or settlement reached in one case or group of cases is not necessarily representative of the outcome of other comparable cases.The financial impact of litigation, particularly mass tort action lawsuits, is also difficult to predict and a judgment entered or settlement reached in one case or group of cases is not necessarily representative of the outcome of other comparable cases. Regardless of the merits of the claims at issue or the ultimate outcome of cases, any future litigation related to our EO operations may be costly to defend, could result in an increase of our insurance premiums, reduction of limits and terms and could exhaust available insurance coverage. Defense of litigation may also result in diversion of management attention from other priorities, which could have a material adverse effect on our financial condition and results of operations. If our continuing efforts to create a Lean business, to in-source production and to support smart manufacturing to reduce costs are not successful, our profitability may be negatively impacted or our business otherwise might be adversely affected. If our continuing efforts to create a Lean business and in-source production to reduce costs are not successful, our profitability may be negatively impacted or our business otherwise might be adversely affected. We have undertaken various activities to incorporate Lean concepts and practices to more efficiently operate our business, including in-sourcing and smart manufacturing. We continue to look for opportunities to in-source production that is currently provided by third parties. These activities may not produce the full efficiencies and cost reduction benefits that we expect, or efficiencies and benefits might be delayed. Implementing these activities can be complex and time-consuming, and anticipated initial costs may exceed expectations. The failure to realize such efficiencies and cost reduction benefits, or increases in the costs of doing business related to in-sourced production, could adversely impact our financial condition and results of operations. Similarly, we continue to invest in smart manufacturing to drive structural cost reduction in our facilities, including aligning work to more efficient manufacturing centers, implementing advanced manufacturing capabilities such as digital initiatives, automation and robots, and closing facilities that are not required to meet future capacity and work needs. Our success will depend on various factors, including our ability to either source or custom develop the necessary technology and components, and the digital transformation initiative’s cost-effectiveness, utility and competitive positioning. If our digital transformation initiative fails to develop as we expect, or progresses more slowly than expected, such failure to realize efficiencies and cost reduction benefits could adversely impact our financial condition and results of operations.A pandemic or similar public health crisis could have a material adverse impact on our ability to staff our operations. A pandemic or similar public health crisis could have a material adverse impact on our ability to staff our operations. There can be no assurances that our measures to protect the health and wellbeing of our employees in the event of future health crises will be sufficient to protect our employees or that they may not otherwise be exposed to an illness outside of our workplace. If a large or otherwise impactful number of our employees, including key employees, become ill, incapacitated or are otherwise unable or unwilling to continue working during any future health crises, our operations may be adversely impacted. Furthermore, restrictive measures implemented by us or governmental entities in response to a future pandemic or similar public health crisis could adversely impact our ability to hire and retain employees. Any failure to staff our operations resulting from an emergent public health crisis could adversely impact our financial condition and results of operations. Our business and results of operations may be adversely affected if we are unable to recruit and retain qualified management and other personnel.Our continued success depends, in large part, on our ability to hire and retain highly qualified people, and if we are unable to do so, our business and operations may be impaired or disrupted. There is no assurance that we will be successful in attracting replacements to fill vacant positions, retaining successors to fill retirements or employees moving to new positions, or otherwise retaining qualified personnel. In addition, the increasing complexity of legal, regulatory and compliance matters have created additional responsibilities for our management and other personnel and can create significant distraction or diversion of their attention, which could have a material adverse effect on our ability to attract and retain such personnel. In addition, the increasing complexity of legal, regulatory and compliance matters have 20Table of Contentscreated additional responsibilities for our management and other personnel and can create significant distraction or diversion of their attention, which could have a material adverse effect on our ability to attract and retain such personnel. We could experience a failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach of one or more key information technology systems, networks, processes, associated sites or service providers; failure to manage these and other risks associated with the use of sophisticated technology could materially impact our business.We could experience a failure of a key information technology system, process or site or a breach of information security, including a cybersecurity breach of one or more key information technology systems, networks, processes, associated sites or service providers. We rely extensively on information technology (“IT”) systems to conduct business, including but not limited to interacting with Customers and suppliers, fulfilling orders, generating invoices, collecting and making payments, manufacturing and shipping products, providing Customer support, and fulfilling contractual obligations.We rely extensively on information technology (“IT”) systems to conduct business, including but not limited to interacting with Customers and suppliers, fulfilling orders, generating invoices, collecting and making payments, shipping products, providing Customer support, and fulfilling contractual obligations. In addition, we rely on networks and services, including internet sites, cloud and software-as-a-service solutions, data hosting, electronic payment systems, and processing facilities and tools and other hardware, software and technical applications and platforms, including some that employ artificial intelligence (“AI”), some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our business. While we have been the previous target of cyberattacks and security breaches, none of these attacks or breaches to date have had a material adverse effect on the Company. We cannot guarantee that future 21Table of Contentscyberattacks, if successful, will not have a material effect on our business or financial results. We cannot guarantee that future cyberattacks, if successful, will not have a material effect on our business or financial results. Numerous and evolving cybersecurity threats continue to pose potential risks to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data, and we may fail to sufficiently adapt to them. For instance, generative AI and other artificial intelligence technologies may be used by malicious actors to create more targeted phishing narratives, develop sophisticated malware, spread false information about us or our products, or otherwise enhance the social engineering and attack capabilities of such malicious actors.Some of our products, services, and information technology systems contain or use open-source software, which poses additional risks, including potential security vulnerabilities, licensing compliance issues, and quality issues. A security breach, whether of our products, of our Customers’ network security and systems or of third-party hosting services, could impact the use of such products and the security of information stored therein. While we have made investments seeking to address these threats, including monitoring of networks and systems, hiring of experts, employee training and security policies for employees and third-party providers, the techniques used in these attacks change frequently and may be difficult to detect for periods of time and we may face difficulties in anticipating and implementing adequate preventative measures. When cybersecurity incidents occur, we expect to follow our incident response policy and address them in accordance with applicable governmental regulations and other legal requirements. Our response to these incidents and our investments to protect our information technology infrastructure and data may not shield us from significant losses and potential liability or prevent any future interruption or breach of our systems. We maintain cyber liability insurance with terms, conditions, and limits believed to be adequate. However, cybersecurity-related liability or other claims may exceed insurance coverage limits, fines, penalties and regulatory sanctions may not be covered by insurance, or insurance may not continue to be available or available on commercially reasonable terms. Additionally, our insurers might deny claim coverage for valid or other reasons or may become insolvent.If our IT systems are damaged or cease to function properly, the networks or service providers we rely upon fail to function properly, or we or one of our third-party providers suffer a loss or disclosure of our business or stakeholder information due to any number of causes ranging from catastrophic events or power outages to improper data handling or security breaches or other cyber incidents, and our business continuity plans do not effectively address these failures on a timely basis, we may be exposed to reputational, competitive and business harm as well as litigation and regulatory action. In the past, our Customers and resellers of our products have experienced cybersecurity attacks and incidents that have impacted their ability to do business, process payments and sell products, and there can be no assurance that future cybersecurity attacks and incidents affecting our Customers and resellers will not impact our business if and when they occur. In addition, a large number of our employees, as well as those of our Customers and suppliers, work remotely part of the time, which may increase the risk of IT systems vulnerabilities and attacks and unauthorized access of information. Furthermore, future geopolitical conflicts could result in increases in cybersecurity incidents. The General Data Protection Regulation (“GDPR”) is focused on the protection of personal data, not merely the privacy of personal data. The GDPR has created a range of compliance obligations and can impose significant financial penalties for noncompliance (including possible fines of up to 4% of global annual revenues for the preceding financial year or €20 million (whichever is higher) for the most serious infringements). Other legislative or governmental regulatory requirements may come into effect that may similarly increase our compliance obligations or significantly increase our exposure to financial penalties for noncompliance.Likewise, governments and regulatory bodies worldwide are actively developing new laws, regulations and ethical guidelines governing AI use, including the European Union’s Artificial Intelligence Act. Compliance with evolving and potentially inconsistent AI regulations across jurisdictions may be costly and complex. Failure to comply could result in significant penalties, restrictions on our use of AI, or reputational harm. The use of AI may also raise data privacy concerns, particularly if AI systems process sensitive health information subject to GDPR, HIPAA or other privacy regulations. If our competitors deploy AI technologies more effectively than we do, we may lose market share or be unable to maintain our competitive position. Failure to adequately manage AI-related risks could have a material adverse effect on our business, reputation, financial condition, and results of operations.Our debt level or access to credit markets may limit our financial and business flexibility.As of March 31, 2026, STERIS had approximately $1,931.As of March 31, 2025, STERIS had approximately $2,043. 7 million of indebtedness outstanding (net of deferred financing fees), which included $1,350.7 million of indebtedness outstanding, which included $1,350. 0 million of Senior Public Notes issued April 1, 2021, $557.8 million of Private Placement Senior Notes, and $37.8 million of borrowings outstanding under our Revolving Credit Facility (each as defined below). STERIS’s ability to repay all the foregoing obligations will depend on, among other things, STERIS’s financial position and performance, as well as prevailing market conditions and other factors beyond our control. STERIS’s ability to repay all the forgoing obligations will depend on, among other things, STERIS’s financial position and performance, as well as prevailing market conditions and other factors beyond our control. Our indebtedness could have important consequences to our shareholders, including increasing risk associated with general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund 22Table of Contentsworking capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in our business and our industry and creating a disadvantage compared to our competitors with less indebtedness.Our indebtedness could have important consequences to our shareholders, including increasing risk associated with general adverse economic and industry conditions, limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements, requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate matters, including dividend payments and stock repurchases, limiting our flexibility in planning for, or reacting to, changes in our business and our industry and creating a disadvantage compared to our competitors with less indebtedness. In addition, our ability and the ability of our Customers, suppliers and other business counterparties to obtain indebtedness and the cost thereof is dependent on credit profiles, prevailing market interest rates and other factors. Credit rating downgrades, a high interest rate environment, market volatility, market disruptions and other factors may limit our and our Customers’, suppliers’ and other counterparties’ access to credit markets or increase the cost of financing activities which may have an adverse effect on our operations.RISKS RELATED TO BUSINESS DEVELOPMENT We engage in acquisitions and affiliations, divestitures, and other business arrangements. Our growth may be adversely affected if we are unable to successfully identify and price strategic business candidates or otherwise optimize our business portfolio. Our growth may be adversely affected if we are unable to successfully identify, price, and integrate strategic business candidates or otherwise optimize our business portfolio. Our success depends, in part, on strategic acquisitions and joint ventures, which are intended to complement or expand our businesses, divestiture of non-strategic businesses, and other assets, and other actions intended to optimize our portfolio of businesses. This strategy depends upon our ability to identify, appropriately price, and complete these types of business development transactions or arrangements and to obtain any necessary financing. In recent fiscal years we have made a number of acquisitions, joint ventures and dispositions. In the last several fiscal years we have made a number of acquisitions and dispositions. We may be unable to find or consummate future acquisitions, joint ventures opportunities and divestitures at acceptable prices and terms. We continually evaluate potential business developments opportunities in the ordinary course of business.Competition for strategic business candidates may result in increases in costs and price for acquisition candidates and market valuation issues may reduce the value available for divestiture of non-strategic businesses. Competition for strategic business candidates may result in increases in costs and price for acquisition candidates and market valuation issues may reduce the value available for divestiture of non-strategic businesses. These types of transactions are also subject to a number of other risks and uncertainties, including: delays in realizing or failure to realize anticipated benefits of the transactions; a termination or delay in the consummation of acquisition or disposition transactions by counterparties; diversion of management’s time and attention from other business concerns; difficulties in retaining key employees, Customers, or suppliers of the acquired or divested businesses; difficulties in maintaining uniform standards, controls, procedures and policies, or other integration or divestiture difficulties, including those that may expose us to greater cybersecurity risk; adverse effects on existing business relationships with suppliers or Customers; other events contributing to difficulties in generating future cash flows; risks associated with the assumption of contingent or other liabilities of acquisition targets or retention of liabilities for divested businesses and difficulties in obtaining financing.Furthermore, assumptions that we have made with respect to acquisitions, dispositions or joint ventures, such as with respect to anticipated operating synergies or the costs associated with realizing such synergies, significant long-term cash flow generation, and the continuation of our investment grade credit profile, may not be realized. Furthermore, assumptions that we have made with respect to acquisitions, dispositions or joint ventures, such as with respect to anticipated operating synergies or the costs associated with realizing such synergies, significant long-term cash flow generation, and the continuation of our investment grade credit profile, may not be realized. The processes involved with disposing of our businesses, entering into joint ventures or post-acquisition integration, as well as the implementation of other strategic initiatives, may result in the loss of key employees, the disruption of ongoing business, changes in strategy or inconsistencies in standards, controls, procedures and policies. There could also be potential unknown liabilities and unforeseen expenses that were not discovered or previously expected. Although we conduct what we believe to be a prudent level of investigation regarding the operating and financial condition of the businesses, product or service lines, assets or technologies we purchase, divest or invest in, an unavoidable level of risk remains regarding their actual operating and financial condition, as well as their strategic fit. We may not be able to ascertain actual value or understand potential liabilities until or after we actually assume operational control of these businesses, product or service lines, assets or technologies.Our investments in our business and product offerings may not be as successful as anticipated. From time to time, we may invest in technology, business infrastructure, new businesses, product offerings and manufacturing innovations and expansion of existing businesses, each of which may require substantial cash investments and management attention. We believe cost-effective investments are essential to business growth and profitability; however, significant investments are subject to typical risks and uncertainties inherent in developing a new business or expanding an existing business. The failure of any significant investment to provide expected returns or profitability could have a material adverse effect on our financial results and divert management attention from more profitable business operations.Our business realignment initiatives may not be as successful as anticipated.We execute organizational realignments to support our growth and cost management strategies. We also engage in initiatives aimed to increase productivity, efficiencies and cash flow and to reduce costs. If we are unable to successfully manage these and other organizational changes, the ability to complete such activities and realize anticipated synergies or cost savings as well as our results of operations and financial condition could be materially adversely affected. We cannot offer assurances that any of these initiatives will be beneficial to the extent anticipated, or that the estimated efficiency improvements, incremental cost savings or cash flow improvements will be realized as anticipated or at all.23Table of ContentsOur acquisition activity and ability to grow organically may be adversely affected if we are unable to continue to access the financial markets.Our acquisition activity and ability to grow organically may be adversely affected if we are unable to continue to access the financial markets. We have financed acquisitions through cash on hand, borrowings under our bank credit facilities and through public note offerings. Future acquisitions or other capital requirements and investments will necessitate additional cash. To the extent our existing sources of cash are insufficient to fund these or other future activities, we have in the past needed and may in the future need to raise additional funds through new or expanded financing arrangements, which could include further borrowings or equity issuances. There can be no assurance that we will be able to obtain additional funds on terms favorable to us, or at all, or that our existing bank credit facilities or other indebtedness can be replaced or refinanced when they mature or terminate. There can be no assurance that we will be able to obtain additional funds beyond those available under existing bank credit facilities on terms favorable to us, or at all, or that such facilities can be replaced when they terminate. The integration of acquired businesses into STERIS or working arrangements with joint venture partners may not be as successful as anticipated.The integration of acquired businesses into STERIS may not be as successful as anticipated. The integration of acquired businesses into STERIS as well as the entry into and operation of strategic joint ventures involves numerous operational, strategic, financial, accounting, legal, tax and other risks; potential liabilities associated with the acquired businesses or partners; and uncertainties related to design, operation and integration of internal controls over financial reporting. These risks and difficulties may result in the business performing differently than expected, in operational challenges, in strategic changes or in the failure to realize anticipated expense-related efficiencies. Difficulties in integrating acquired businesses into STERIS may result in the business performing differently than expected, in operational challenges, in strategic changes or in the failure to realize anticipated expense-related efficiencies. STERIS’s existing businesses could also be negatively impacted by integration actions or the administration of joint ventures. STERIS’s existing businesses could also be negatively impacted by the integration actions. Potential difficulties that may be encountered include, among other factors:Past and future business acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS shares. Potential difficulties that may be encountered in the integration process include, among other factors:Past and future business acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share, which may negatively affect the market price of STERIS shares. Past and future acquisitions may not be as accretive to STERIS’s earnings per share and cash flow from operations per share as expected. Future events and conditions could decrease or delay any expected accretion, result in dilution or cause greater dilution than is currently expected, including adverse changes in market conditions, production levels, operating results, competitive conditions, laws and regulations affecting STERIS, capital expenditure obligations, higher than expected integration costs, lower than expected synergies and general economic conditions.Any decrease or delay of any accretion to STERIS’s earnings per share or cash flow from operations per share could cause the price of the STERIS’s ordinary shares to decline. STERIS has incurred and expects to incur significant transaction and related costs in connection with strategic transactions, which may be in excess of those anticipated. STERIS has incurred and expects to incur significant transaction and related costs in connection with business acquisitions and dispositions, which may be in excess of those anticipated. STERIS has incurred substantial expenses in connection with the negotiation and completion of past business acquisitions, dispositions and joint ventures, and expects to incur similar costs for any future strategic transactions.STERIS has incurred substantial expenses in connection with the negotiation and completion of past business acquisitions and dispositions, and expects to incur similar costs for any future business acquisitions or dispositions. The anticipated benefits and cost savings from such initiatives may not be realized fully or at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize than expected or could have other adverse effects that we do not currently foresee. These anticipated benefits and cost savings may not be realized fully or at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize than expected or could have other 23Table of Contentsadverse effects that we do not currently foresee. STERIS expects to incur non-recurring costs associated with the integrations of recent acquisitions into STERIS, joint ventures and working towards achieving desired synergies.STERIS expects to incur non-recurring costs associated with the integrations of recent acquisitions into STERIS and working towards achieving the desired synergies of such acquisitions. These fees and costs have been, and may continue to be, substantial. The non-recurring expenses include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, and severance and benefit costs.STERIS also expects to incur and has incurred costs to consolidate facilities and systems. Additional unanticipated costs may be incurred in connection with strategic transactions. Additional unanticipated costs may be incurred in the integration of any acquired business. Although STERIS expects that the elimination of duplicative costs, as 24Table of Contentswell as the realization of other efficiencies related to the integration of acquired businesses, should allow STERIS to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all. Although STERIS expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of acquired businesses, should allow STERIS to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all. STERIS may not achieve expected returns and benefits in connection with dispositions, which may require continued involvement in a divested business, such as through transition service agreements, guarantees, indemnities or other financial obligations. Under these arrangements, the performance of the divested business, or other conditions outside our control, could affect our future financial results. The costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results.We have recorded goodwill and other intangible assets that could become impaired and result in material non-cash charges to our results of operation in the future.Our total assets include goodwill, intangibles and other long-lived assets. If we determine that these items have become impaired in the future, it may have a material adverse effect on our financial condition and results of operations. As of March 31, 2026, we had recorded goodwill of $4 billion and other intangible assets, net of accumulated amortization of $2 billion. Goodwill represents the excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets of a business acquired. Goodwill is evaluated for impairment annually or more frequently, if indicators of impairment exist. If the impairment evaluations for goodwill indicate the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to that excess. Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. ITEM 1B.UNRESOLVED STAFF COMMENTSNone. ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and StrategyAt STERIS, the ERM program is designed to identify, assess, and manage risks across STERIS’s enterprise. Cybersecurity risk management is integrated into STERIS’s ERM program, under which we regularly assess cybersecurity risks in accordance with what we believe are industry cybersecurity best practices. Further, we implement controls to protect the confidentiality, integrity and availability of STERIS’s information systems and information. We maintain cybersecurity and incident response procedures to address our security standards and requirements and provide a framework for assessing and responding to cybersecurity threats and incidents. Additionally, as part of our ERM program, STERIS oversees and identifies risks associated with third-party service providers with whom we do business, which process includes due diligence, risk management assessments and contractual safeguards. We also maintain cyber liability insurance to help mitigate potential liabilities resulting from cybersecurity issues.STERIS has an Executive Cybersecurity Steering Committee consisting of the Senior Vice President & Chief Financial Officer, the Vice President, Corporate Controller, the Vice President, Investor Relations & Corporate Communications, the Vice President & Chief Information Officer (“CIO”), the Vice President, Chief Compliance and Quality Officer, the Senior Vice President, General Counsel & Company Secretary, and the Vice President, Chief Information Security Officer (“CISO”) that is responsible for providing governance, risk and compliance oversight for STERIS’s incident response program, providing guidance and support for cybersecurity non-technical initiatives, and for verifying that appropriate actions are taken following an incident occurrence.STERIS has an Executive Cybersecurity Steering Committee consisting of the Senior Vice President & Chief Financial Officer, the Vice President, Chief Accounting Officer, the Vice President, Investor Relations & Corporate Communications, the Vice President & Chief Information Officer (“CIO”), the Vice President, Chief Compliance Officer, the Senior Vice President, General Counsel & Company Secretary, and the Vice President, Chief Information Security Officer (“CISO”) that is responsible for providing governance, risk and compliance oversight for STERIS’s incident response program, providing guidance and support for cybersecurity non-technical initiatives, and for verifying that appropriate actions are taken following an incident occurrence. We have adopted and maintain an incident response policy that covers our incident response program and the duties and responsibilities of our Incident Response Team (“IRT”) responsible for managing and responding to cybersecurity incidents, including data breaches. Our IRT is led by the CISO and is comprised of senior management and others, including external resources, as required. Our incident response policy includes steps for detecting and investigating cybersecurity incidents, assessing the nature, scope, and severity of cybersecurity threats, identifying the impact of cybersecurity incidents, communicating cybersecurity incident disclosures, and implementing cybersecurity countermeasures and mitigation strategies. A subcommittee of our IRT reviews and assesses associated public reporting implications of cybersecurity incidents. Our process also includes informing the Board of Directors and the Audit Committee following a material cybersecurity incident. We engage third-party security experts to support our risk assessment activities and to provide system security enhancements. Our program includes regular vulnerability and penetration testing (internal and external) of our enterprise systems by independent external security experts. Education and awareness training on information security and data protection is conducted regularly for employees. 24Table of ContentsEducation and awareness training on information security and data protection is conducted regularly for employees. Members of the IRT, the Executive Cybersecurity Steering Committee and the Board of Directors receive additional training on responding to cybersecurity incidents.25Table of ContentsOur Board of Directors has oversight responsibility for the ERM program, and delegates the risk management assessment and risk management approach, including risks related to cybersecurity, to its Audit Committee.Our Board of Directors has oversight responsibility for the ERM program, and delegates the risk management assessment and risk management approach, including risks related to cybersecurity, to its Audit Committee. Among other responsibilities, the Audit Committee is responsible for monitoring internal controls, including those related to cybersecurity risk.Management is responsible for identifying, considering, and assessing material cybersecurity risks on an ongoing basis, establishing processes to monitor such potential cybersecurity risk exposures, putting in place appropriate mitigation measures and maintaining the cybersecurity program. Our cybersecurity program for our information systems is directed by our CIO and, with the cybersecurity team, our CIO monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. Our CIO has a Bachelor of Science in Computer Engineering, a Master of Business Administration, and over 35 years of experience working in the information technology field, including approximately 20 years of CIO positions. Our CISO is CISSP-ISSMP and CISM certified and is part of a team of experienced information system security professionals with diverse certifications, including CISSP, CISM, CNSS, CEH, CySA+, CompTIA - Security+, CySA+, PenTest+, and CASP+ and others. Management, including the CIO and CISO, update the Audit Committee on a regular basis on our cybersecurity program, material cybersecurity risks, mitigation strategies, cybersecurity metrics, developments in cybersecurity and proposed updates to our cybersecurity program.In fiscal year 2026, STERIS did not experience any known cyberattack or other attempted intrusion or other incident with respect to our information systems that materially affected or was likely to materially affect our business strategy, results of operations, financial condition or cash flows.In fiscal year 2025, STERIS did not experience any cyberattack or other attempted intrusion or other incident with respect to our information systems that materially affected or was likely to materially affect our business strategy, results of operations, financial condition or cash flows. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced or will not experience in the future undetected cybersecurity incidents.
For more information about these risks, please see “Item 1A Risk Factors” in this annual report on Form 10-K..
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