Savaria Corporation (“Savaria”) (TSX: SIS), one of the global
leaders in the accessibility industry, is pleased to announce its
results for the second quarter of 2024.
Highlights – Q2 2024 compared to
Q2 2023
- Revenue was $221.3M, compared to
$198.4M in 2023, an increase of 11.6% mainly due to organic growth
of 11.5% and a positive foreign exchange impact of 1.1%, partially
offset by the divestitures of Van-Action and Freedom Motors.
- Accessibility organic growth stood
at 15.4%, including growth of 15.4% coming from North America and
15.3% from Europe.
- Patient Care organic revenue
contracted by 0.9%.
- Gross profit was $83.0M, up $15.9M
or 23.6%, representing 37.5% of revenue, an increase of 370 bps
compared to 33.8% in Q2 2023.
- Operating income was $22.6M, up
$6.4M or 39.3%, representing 10.2% of revenue compared to 8.2% in
Q2 2023.
- Adjusted EBITDA* was $41.9M, up
$12.7M or 43.3%, or $0.59 per share, up $0.14, when compared to Q2
2023.
- Adjusted EBITDA margin* stood at
19.0%, up 420 bps compared to 14.8% in Q2 2023.
- Accessibility adjusted EBITDA margin
reached 20.9%.
- Patient Care adjusted EBITDA margin
stood at 17.0%.
- Net earnings were $11.0M, or $0.15
per share on a diluted basis, compared to $8.8M or $0.14 per share
in Q2 2023.
- Ratio of net debt to adjusted
EBITDA* stood at 1.88 in comparison to 2.07 as at December 31,
2023.
- Available funds* of $226.6M, as of
June 30, 2024, to support working capital, investments and
growth opportunities.
- On April 5, 2024, the Corporation
acquired the dumbwaiter and material lift assets of D.A. Matot,
Inc. ("Matot"). Matot is a leading North American supplier of lifts
used for the movement of goods in commercial and industrial
applications.
|
|
Q2 |
YTD |
|
in thousands of dollars, except per-share amounts and
percentages |
|
2024 |
|
|
2023 |
|
Change |
|
2024 |
|
|
2023 |
|
Change |
|
Revenue |
$ |
221,344 |
|
$ |
198,396 |
|
11.6 |
% |
$ |
430,788 |
|
$ |
410,021 |
|
5.1 |
% |
|
Gross profit |
$ |
82,974 |
|
$ |
67,105 |
|
23.6 |
% |
$ |
158,368 |
|
$ |
139,138 |
|
13.8 |
% |
|
% of revenue |
|
37.5 |
% |
|
33.8 |
% |
370 |
bps |
|
36.8 |
% |
|
33.9 |
% |
290 |
bps |
|
Operating income |
$ |
22,604 |
|
$ |
16,226 |
|
39.3 |
% |
$ |
40,325 |
|
$ |
31,685 |
|
27.3 |
% |
|
Net earnings |
$ |
10,961 |
|
$ |
8,789 |
|
24.7 |
% |
$ |
22,008 |
|
$ |
14,828 |
|
48.4 |
% |
|
Diluted net earnings per share |
$ |
0.15 |
|
$ |
0.14 |
|
7.1 |
% |
$ |
0.31 |
|
$ |
0.23 |
|
34.8 |
% |
|
Adjusted net earnings* |
$ |
15,592 |
|
$ |
8,976 |
|
73.7 |
% |
$ |
29,343 |
|
$ |
17,363 |
|
69.0 |
% |
|
Adjusted net earnings per share* |
$ |
0.22 |
|
$ |
0.14 |
|
57.1 |
% |
$ |
0.41 |
|
$ |
0.27 |
|
51.9 |
% |
|
Adjusted EBITDA* |
$ |
41,945 |
|
$ |
29,272 |
|
43.3 |
% |
$ |
76,626 |
|
$ |
60,486 |
|
26.7 |
% |
|
Adjusted EBITDA per share* |
$ |
0.59 |
|
$ |
0.45 |
|
31.1 |
% |
$ |
1.08 |
|
$ |
0.93 |
|
16.1 |
% |
|
% of revenue |
|
19.0 |
% |
|
14.8 |
% |
420 |
bps |
|
17.8 |
% |
|
14.8 |
% |
300 |
bps |
*Non-IFRS measures are described and reconciled in sections 3, 6
and 8 of the MD&A.
Word from the Executive Chairman and from the President
& CEO
“The path to our 2025 objectives is painted more clearly as we
recognize our second quarter results. Our quarterly revenue hit
$221 million, an 11.6% increase year-over-year. Adjusted EBITDA
finished at 19.0%, up 420 bps compared to our last year’s second
quarter. Our employees collaborate on Savaria One initiatives every
day to constantly find better ways in serving our customers. Now is
the time to be the best we can be to serve the aging population,
whether they need a stairlift, a medical bed or a home elevator,”
said Marcel Bourassa, Executive Chairman.
“Building on the momentum from our first quarter, our Savaria
One initiatives helped us improve our overall gross margin to a new
level of 37.5%. Our Accessibility segment achieved an adjusted
EBITDA margin of 20.9%, while Patient Care maintained a 17.0%
margin for the quarter. On the revenue side, we experienced healthy
growth of 15.1% year-over-year for our Accessibility segment. I am
proud to report that our Adjusted EBITDA per share was 59 cents, a
best-ever metric for us. Congratulations to our employees who have
diligently worked on numerous Savaria One projects to increase our
efficiencies and improve our processes,” said Sébastien Bourassa,
President and Chief Executive Officer.
Second Quarter Results - Q2 2024
compared to Q2 2023
REVENUE
Revenue reached $221.3M, up $22.9M or 11.6%. The increase was
mainly due to organic growth of 11.5% and a positive foreign
exchange impact of 1.1%, partially offset by the divestitures of
Van-Action, and Freedom Motors.
-
Accessibility segment (78% of Q2-24 revenue):
Revenue was $173.4M, an increase of $22.8M or 15.1%. Organic growth
stood at 15.4%.
- Patient
Care segment (22% of Q2-24 revenue): Revenue was $47.9M,
an increase of $0.2M or 0.3%. Organic revenue contracted by
0.9%.
OPERATING INCOME
Operating income was $22.6M, up $6.4M or 39.3%, compared to Q2
2023, representing an operating margin of 10.2% compared to 8.2% in
Q2 2023. The increase was mainly attributable to additional revenue
contribution and higher gross margins in both segments, partially
offset by increased strategic initiatives expenses.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $41.9M and
19.0%, respectively, compared to $29.3M and 14.8% for Q2 2023.
-
Accessibility segment: Adjusted EBITDA and
adjusted EBITDA margin stood at $36.2M and 20.9%, respectively,
compared to $21.4M and 14.2% for Q2 2023.
- Patient
Care segment: Adjusted EBITDA and adjusted EBITDA margin
stood at $8.2M and 17.0%, respectively, compared to $9.3M and 19.4%
for Q2 2023.
Six-Month Results - YTD 2024 compared to
YTD 2023
REVENUE
The Corporation generated revenue of $430.8M, up $20.8M or 5.1%.
The increase is mainly due to organic growth of 6.9% and a positive
foreign exchange impact of 0.9%. The growth was partially offset by
the aforementioned divestitures as well as the divestments of the
vehicle operations in Norway last year.
OPERATING INCOME
Operating income was $40.3M, up $8.6M or 27.3%, representing an
operating margin of 9.4% compared to 7.7% in 2023.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $76.6M and
17.8%, respectively, compared to $60.5M and 14.8% in 2023.
LIQUIDITY AND CAPITAL RESOURCES
Savaria generated $50.1M of cash from operations which were
primarily used to invest in capital projects, a business
acquisition, repay debt and pay interest and dividends.
As at June 30, 2024, the Corporation had a net debt
position of $274.9M and a ratio of net debt to adjusted EBITDA of
1.88 compared to 2.07 as of December 31, 2023.
Outlook
Savaria expects to deliver approximately $1.0 billion in revenue
and a 20% adjusted EBITDA margin in 2025. These targets will be
achieved through continued strong demand in both the Accessibility
and Patient Care segments and completion of Savaria One, the
Corporation’s multi-year, company-wide, sales and operations
program designed to unlock the full potential of the business.
The expected benefits from Savaria One will be realized
through:
- Sales initiatives focused on market share growth and pricing
optimization;
- Operational and production improvements to increase capacity
and throughput;
- Procurement and supply chain efficiencies and
streamlining;
- Investments in research and development to enhance existing
products and develop new ones.
In relation to Savaria One, the Corporation plans to record an
average of $5.0 million in strategic initiative expenses per
quarter through 2024 and at the beginning of 2025, and anticipates
increasing financial and operational benefits to be realized on a
sequential quarterly basis. Depending on the performance of Savaria
One, the Corporation could record an additional $15.0 million in
fees in 2025, resulting in total costs for the entire project of
$40.0 to $45.0 million, as disclosed at our investor day, as we
continue toward our record revenue and adjusted EBITDA margin
targets for 2025.
Savaria will also continue to evaluate potential tuck-in
acquisitions to replace some or all of the lost revenue from the
divestitures of Van-Action, Freedom Motors and the Norwegian
vehicle adaptation business.
The above-mentioned outlook is a “forward-looking statement”
within the meaning of the securities laws of Canada and subject to
the Corporation’s disclosure statement.
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.
By delivering products and solutions that promote accessibility,
health, and wellness, improving operational efficiencies and
resource usage, and engaging our employees and stakeholders, we’ll
create a stronger, more resilient business that will continue to be
an industry leader while delivering positive social change.
We recognize this work requires long-term vision, planning, and
collaboration, yet also must be grounded in clear actions and an
ongoing commitment to transparency.
To that end, on April 17, 2024, Savaria published its first ESG
report for the fiscal year ended December 31, 2023. Through this
report, Savaria discloses its strategy and initiatives on ESG
matters that are important to its stakeholders, and where it sees
an opportunity to have a positive and meaningful influence. This
inaugural ESG report represents an important milestone for Savaria
and provides a baseline for measuring our future performance. The
2023 ESG report can be found under the investor relations section
of our website at savaria.com.
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. In addition, Savaria manufactures and markets a comprehensive
selection of pressure management products, medical beds, as well as
an extensive line of medical equipment and solutions for the safe
movement of patients, such as transfer, lifting and repositioning
aids. 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 2,400 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 EBITDA per share,
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 savaria.com, and filed with SEDAR+ at
sedarplus.ca. 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.
Results webcast and conference call on August 8,
2024, at 8:30 a.m. (EDT)
Savaria will host a conference call on Thursday, August 8th at
8:30 a.m. Eastern Daylight Time with financial analysts to discuss
results of the period ended June 30, 2024. 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/BI1cff64e45fee4492b5f07c01fcedfdb3Webcast
(en): https://edge.media-server.com/mmc/p/tqi3m55v
Link to the replay of the webcast will be available on the
Corporation’s website at savaria.com.
|
For further information: |
|
|
| Sébastien BourassaPresident and
Chief Executive Officersb@savaria.com1.800.661.5112 |
Stephen Reitknecht, CPA, CAChief
Financial Officersreitknecht@savaria.com1.800.661.5112, ext.
3370 |
facebook.com/savariabettermobilitytwitter.com/Mobilityforlifewww.savaria.com |
| |
|
|
Reconciliation of adjusted net earnings and adjusted EBITDA with
net earnings is provided below. Complete financial statements and
the management’s report for Q2 2024 will be available shortly on
Savaria’s website and on SEDAR+ sedarplus.ca.
Reconciliation of adjusted net earnings and adjusted
EBITDA with net earnings
|
|
Q2 |
YTD |
|
in thousands of dollars, except per-share |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net earnings |
$ |
10,961 |
|
$ |
8,789 |
|
$ |
22,008 |
|
$ |
14,828 |
|
|
Strategic initiatives expenses |
|
5,347 |
|
|
250 |
|
|
10,646 |
|
|
250 |
|
|
Other expenses (income) |
|
764 |
|
|
- |
|
|
(427 |
) |
|
3,157 |
|
|
Income tax related to strategic initiatives and other expenses
(income) |
|
(1,480 |
) |
|
(63 |
) |
|
(2,884 |
) |
|
(872 |
) |
|
Adjusted net earnings* |
$ |
15,592 |
|
$ |
8,976 |
|
$ |
29,343 |
|
$ |
17,363 |
|
|
Adjusted net earnings per share* |
$ |
0.22 |
|
$ |
0.14 |
|
$ |
0.41 |
|
$ |
0.27 |
|
|
Income tax related to strategic initiatives and other expenses
(income) |
|
1,480 |
|
|
63 |
|
|
2,884 |
|
|
872 |
|
|
Income tax expense |
|
4,255 |
|
|
2,930 |
|
|
7,796 |
|
|
5,315 |
|
|
Depreciation of fixed assets |
|
2,234 |
|
|
2,230 |
|
|
4,371 |
|
|
4,182 |
|
|
Depreciation of right-of-use assets |
|
2,737 |
|
|
2,527 |
|
|
5,418 |
|
|
4,918 |
|
|
Amortization of intangible assets |
|
7,576 |
|
|
7,501 |
|
|
15,020 |
|
|
15,346 |
|
|
Net finance costs |
|
7,388 |
|
|
4,507 |
|
|
10,521 |
|
|
11,542 |
|
|
Stock-based compensation |
|
683 |
|
|
538 |
|
|
1,273 |
|
|
948 |
|
|
Adjusted EBITDA* |
$ |
41,945 |
|
$ |
29,272 |
|
$ |
76,626 |
|
$ |
60,486 |
|
|
Adjusted EBITDA per share* |
$ |
0.59 |
|
$ |
0.45 |
|
$ |
1.07 |
|
$ |
0.93 |
|
|
Diluted weighted average number of shares |
|
71,405,637 |
|
|
64,797,135 |
|
|
71,309,308 |
|
|
64,719,889 |
|
*Non-IFRS measures are described and reconciled in sections 3, 6
and 8 of the MD&A.
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