Laval, Québec, Canada – May 10, 2023 - Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for the first quarter of 2023.
Highlights – Q1 2023 compared to Q1 2022
- Revenue was $211.6M compared to $183.5M in 2022, an increase of 15.3%, due to organic growth of 13.5% originating from all segments and positive foreign exchange impact of 1.8%;
- Gross profit was $72.0M, up $13.5M or 23.1%, representing 34.0% of revenue compared to 31.9% in Q1 2022;
- Operating income was $15.5M, up $6.6M or 75.1%, representing 7.3% of revenue compared to 4.8% in Q1 2022;
- Adjusted EBITDA* was $31.2M, up $6.8M or 27.8%;
- Adjusted EBITDA margin* stood at 14.7%, up 140 bps compared to 13.3% in Q1 2022;
- Net earnings for the quarter were $6.0M, or $0.09 per share on a diluted basis, compared to $5.3M or $0.08 per share on a diluted basis in Q1 2022;
- Available funds* of $135.0M, as of March 31, 2023, to support working capital, investments and growth opportunities.
A Word from the President
“We are off to a beautiful start this year with our first quarter results delivering both sales growth and increased profitability. Our revenue reached $212 million, an increase of 15.3% year over year with 13.5% organic growth. Our gross profit increased 23.1% and reached 34.0% for the quarter. Adjusted EBITDA increased 27.8% compared to last year," said Marcel Bourassa, President and Chief Executive Officer.
“Typically, our first quarter is slower due to weather constraints on construction starts, affecting commercial lifts and home elevators, but diversification of our portfolio over the past few years has reduced this impact. Our Patient Care segment grew revenue by 17.2% compared to the same period in 2022 with strong organic growth of 13.2% including new healthcare facility contracts.”
“We are currently looking at new objectives for 2025 that include strategic investments in people, products and processes. We are confident in hitting our previously stated goal of $1 billion in revenue at the end of 2025 and can now see growth beyond this timeframe. I thank my employees around the world and our valued dealer partners, all of whom have helped us achieve these fantastic results,” concluded Mr. Bourassa.
First Quarter Results – Q1 2023 compared to Q1 2022
Revenue
Revenue reached $211.6M, up $28.1M or 15.3%. The growth was mainly due to strong organic growth of 13.5%.
- Accessibility segment (72% of Q1-23 revenue): Revenue was $151.4M, an increase of $21.0M or 16.1%. Organic growth stood at 14.4%.
- Patient Care segment (23% of Q1-23 revenue): Revenue was $48.8M, an increase of $7.2M or 17.2%. Organic growth stood at 13.2%.
- Adapted Vehicles segment (5% of Q1-23 revenue): Revenue was $11.4M, a decrease of $0.1M or 0.8%, impacted by negative foreign exchange impact. Organic growth stood at 3.7%.
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $31.2M and 14.7%, respectively, compared to $24.4M and 13.3% for Q1 2022.
- Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin stood at $23.4M and 15.5%, respectively, compared to $20.5M and 15.7% for Q1 2022.
- Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $9.8M and 20.1%, respectively, compared to $5.3M and 12.8% for Q1 2022.
- Adapted Vehicles segment: Adjusted EBITDA and adjusted EBITDA margin stood at $0.6M and 5.4%, respectively, compared to $0.6M and 4.9% for Q1 2022.
Liquidity and capital resources
Savaria generated $16.0M of cash from operating activities which were primarily used to invest in capital projects, pay interest, and dividends.
As at March 31, 2023, the Corporation had a net debt position of $358.9M and a ratio of net debt to adjusted EBITDA of 2.83 compared to 3.07 as of December 31, 2022.
Outlook
Savaria is expecting revenue growth of approximately 8-10%, when normalizing for the impact of the Norwegian auto division divesture, with an adjusted EBITDA margin of approximately 16% in fiscal 2023, based on the following assumptions:
- Organic growth coming from the Accessibility and Patient Care segments is expected to continue due to a combination of high backlog levels, cross-selling initiatives and strong demand.
- Successful integration of Handicare and progress toward achieving the next strategic phase of synergies in-line with management’s plan.
- Management’s ability to continue to effectively manage supply chain challenges.
This outlook excludes the financial contribution from any new acquisition.
Environmental, Social and Governance (“ESG”) Values
As a global leader within the accessibility industry, Savaria is committed to minimizing its environmental footprint and upholding the highest social and governance standards. We believe that promoting environmentally and socially responsible behaviour across our organization is key to achieving sustainable growth and long-term value creation.
Following the completion of its first ESG materiality assessment, Savaria recently undertook a project to measure, baseline and better understand its global energy consumption and greenhouse gas emissions. We look forward to providing further updates and findings in our inaugural ESG report due out later this year.
About Savaria Corporation
Savaria Corporation (savaria.com) is a global leader in the accessibility industry. It provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and elevators for home and commercial use. It also manufactures and markets a comprehensive selection of pressure management products for the medical market, medical beds for the long-term care market, as well as an extensive line of medical equipment and solutions for the safe handling of patients, including ceiling lifts and slings. In addition, Savaria converts and adapts vehicles for personal and commercial uses. The Corporation operates a sales network of dealers worldwide and direct sales offices in North America, Europe (UK, Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic), Australia and China. Savaria employs approximately 2,250 people globally and its plants are located across Canada, the United States, Mexico, Europe and China.
Compliance with International Financial Reporting Standards (“IFRS”)
The information appearing in this press release has been prepared in accordance with IFRS. However, Savaria uses EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net earnings, adjusted net earnings per share, available funds, net debt and ratio of net debt to adjusted EBITDA for analysis purposes to measure its financial performance. These measures have no standardized definitions in accordance with IFRS and are therefore regarded as non-IFRS measures. These measures may therefore not be comparable to similar measures reported by other companies. Additional details for these non-IFRS measures can be found in sections 3, 6 and 8 of Savaria’s MD&A, which is posted on Savaria’s website at www.savaria.com, and filed with SEDAR at www.sedar.com. Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is presented in the section below.
Forward-Looking Statements
This press release includes certain statements that are “forward-looking statements” within the meaning of the securities laws of Canada. Any statement in this press release that is not a statement of historical fact may be deemed to be a forward-looking statement. When used in this press release, the words “believe”, “could”, “should”, “intend”, “expect”, “estimate”, “assume” and other similar expressions are generally intended to identify forward-looking statements. It is important to know that the forward-looking statements in this document describe the Corporation’s expectations as at the date hereof, which are not guarantees of future performance of Savaria or its industry, and involve known and unknown risks and uncertainties that may cause Savaria’s or the industry’s outlook, actual results or performance to be materially different from any future results or performance expressed or implied by such statements. The Corporation’s actual results could be materially different from its expectations if known or unknown risks affect its business, or if its estimates or assumptions turn out to be inaccurate.
A change affecting an assumption can also have an impact on other interrelated assumptions, which could increase or diminish the effect of the change. As a result, the Corporation cannot guarantee that any forward-looking statement will materialize and, accordingly, the reader is cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements do not take into account the effect that transactions or special items announced or occurring after the statements are made may have on the Corporation’s business. For example, they do not include the effect of sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made.
Unless otherwise required by applicable securities laws, Savaria disclaims any intention or obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing risks and uncertainties include the risks set forth under “Risks and Uncertainties” in Savaria’s latest Annual MD&A as well as other risks detailed from time to time in reports filed by Savaria with securities regulators in Canada.
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Results webcast and conference call on May 11, 2023, at 8:30 a.m. (EDT)
Savaria will host a conference call on Thursday, May 11 at 8:30 a.m. Eastern Daylight Time with financial analysts to discuss results of the quarter ended March 31, 2023. Investors and members of the media are invited to participate on a listen-only basis.
Conference call access:
To register: https://register.vevent.com/register/BI1a122aa18d9b46a69bbb7e0b300d70fe
Canada Toll Free Number: 1 (855) 513-1368
North American Toll Free Number: 1 (844) 543-0451
Webcast (EN)
Link to the replay of the webcast will be available on the Corporation’s website at savaria.com.
For further information:
Marcel Bourassa |
Stephen Reitknecht, CPA, CA |
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Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is provided below. Complete financial statements and the management’s report for Q1 2023 will be available shortly on Savaria’s website and on SEDAR (www.sedar.com).