Savaria Corporation (“Savaria”) (TSX: SIS), one of the global
leaders in the accessibility industry, is pleased to announce its
results for the third quarter of 2024.
Highlights – Q3 2024 compared to
Q3 2023
- Revenue was $213.6M, compared to $210.1M in 2023, an increase
of 1.7% mainly due to organic growth of 0.2% and a positive foreign
exchange impact of 1.7%, partially offset by the divestitures of
Van-Action and Freedom Motors.
- Accessibility organic growth stood at 0.6%, including growth of
8.0% coming from North America, mostly offset by a contraction of
6.6% from Europe.
- Patient Care organic revenue contracted by 1.1%.
- Gross profit was $79.1M, up $6.6M or 9.0%, representing 37.0%
of revenue, an increase of 250 bps compared to 34.5% in Q3
2023.
- Operating income was $22.0M, up $1.4M or 6.9%, representing
10.3% of revenue compared to 9.8% in Q3 2023.
- Adjusted EBITDA* was $41.7M, up $7.3M or 21.0%, or $0.58 per
share, up $0.05, when compared to Q3 2023.
- Adjusted EBITDA margin* stood at 19.5%, up 310 bps compared to
16.4% in Q3 2023.
- Accessibility adjusted EBITDA margin reached 21.3%.
- Patient Care adjusted EBITDA margin stood at 17.4%.
- Net earnings were $13.0M, or $0.18 per share on a diluted
basis, compared to $12.1M or $0.18 per share in Q3 2023.
- The ratio of net debt to adjusted EBITDA* stood at 1.69 in
comparison to 2.07 as at December 31, 2023.
- Available funds* of $247.2M, as of September 30, 2024, to
support working capital, investments and growth opportunities.
|
|
Q3 |
YTD |
|
in thousands of dollars, except per-share amounts and
percentages |
|
2024 |
|
|
2023 |
|
Change |
|
2024 |
|
|
2023 |
|
Change |
|
Revenue |
$ |
213,634 |
|
$ |
210,094 |
|
1.7 |
% |
$ |
644,422 |
|
$ |
620,115 |
|
3.9 |
% |
|
Gross profit |
$ |
79,120 |
|
$ |
72,560 |
|
9.0 |
% |
$ |
237,488 |
|
$ |
211,698 |
|
12.2 |
% |
|
% of revenue |
|
37.0 |
% |
|
34.5 |
% |
250 bps |
|
36.9 |
% |
|
34.1 |
% |
280 bps |
|
Operating income |
$ |
22,040 |
|
$ |
20,622 |
|
6.9 |
% |
$ |
62,365 |
|
$ |
52,307 |
|
19.2 |
% |
|
Net earnings |
$ |
13,026 |
|
$ |
12,054 |
|
8.1 |
% |
$ |
35,034 |
|
$ |
26,882 |
|
30.3 |
% |
|
Diluted net earnings per share |
$ |
0.18 |
|
$ |
0.18 |
|
- |
|
$ |
0.49 |
|
$ |
0.41 |
|
19.5 |
% |
|
Adjusted net earnings* |
$ |
17,040 |
|
$ |
12,698 |
|
34.2 |
% |
$ |
46,383 |
|
$ |
30,061 |
|
54.3 |
% |
|
Adjusted net earnings per share* |
$ |
0.24 |
|
$ |
0.19 |
|
26.3 |
% |
$ |
0.65 |
|
$ |
0.46 |
|
41.3 |
% |
|
Adjusted EBITDA* |
$ |
41,737 |
|
$ |
34,484 |
|
21.0 |
% |
$ |
118,363 |
|
$ |
94,970 |
|
24.6 |
% |
|
Adjusted EBITDA per share* |
$ |
0.58 |
|
$ |
0.53 |
|
9.4 |
% |
$ |
1.66 |
|
$ |
1.46 |
|
13.7 |
% |
|
% of revenue |
|
19.5 |
% |
|
16.4 |
% |
310 bps |
|
18.4 |
% |
|
15.3 |
% |
310 bps |
*Non-IFRS measures are described and reconciled in
sections 3, 6 and 8 of the MD&A.
Words from the Executive Chairman and from
the President & CEO“Our third quarter continued the
trend of the prior quarter with our adjusted EBITDA reaching 19.5%,
knocking on the door of our 2025 goal of 20%. Revenue remained
stable despite persistent global economic pressures. Over the next
year, we will focus on sales growth, including small tuck-in
acquisitions that enhance our current organic growth strategies. We
remain confident in our future with the aging population tailwinds
favoring both of our key business segments of Accessibility and
Patient Care,” said Marcel Bourassa, Executive Chairman.
“A key metric of our success in this quarter is
that we delivered $41.7M in adjusted EBITDA, up 21% from $34.5M
last year. Congratulations to our employees around the world who
keep working diligently on numerous Savaria One initiatives that
are driving continuous improvement and efficiencies. We have more
runway with these projects as we look toward our 2025 goals,” said
Sébastien Bourassa, President and Chief Executive Officer.
Third Quarter Results - Q3 2024 compared to
Q3 2023
REVENUE
Revenue reached $213.6M, up $3.5M or 1.7%. The
increase was mainly due to organic growth of 0.2% and a positive
foreign exchange impact of 1.7%, partially offset by the
divestitures of Van-Action, and Freedom Motors.
- Accessibility segment (79% of Q3-24 revenue):
Revenue was $169.8M, an increase of $3.5M or 2.1%. Organic growth
stood at 0.6%.
- Patient Care segment (21% of Q3-24 revenue):
Revenue was $43.9M, stable compared to 2023. Organic revenue
contracted by 1.1%.
OPERATING INCOME
Operating income was $22.0M, up $1.4M or 6.9%,
compared to Q3 2023, representing an operating margin of 10.3%
compared to 9.8% in Q3 2023. The increase was mainly attributable
to additional revenue contribution and higher gross margins in both
segments, while partially offset by increased strategic initiatives
expenses.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at
$41.7M and 19.5%, respectively, compared to $34.5M and 16.4% for Q3
2023.
- Accessibility segment: Adjusted EBITDA and
adjusted EBITDA margin stood at $36.2M and 21.3%, respectively,
compared to $29.9M and 18.0% for Q3 2023.
- Patient Care segment: Adjusted EBITDA and
adjusted EBITDA margin stood at $7.6M and 17.4%, respectively,
compared to $6.1M and 14.0% for Q3 2023.
Nine-Month Results - YTD 2024 compared to
YTD 2023
REVENUE
The Corporation generated revenue of $644.4M, up
$24.3M or 3.9%. The increase is mainly due to organic growth of
4.6% and a positive foreign exchange impact of 1.2%. 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 $62.4M, up $10.1M or 19.2%,
representing an operating margin of 9.7% compared to 8.4% in
2023.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at
$118.4M and 18.4%, respectively, compared to $95.0M and 15.3% in
2023.
LIQUIDITY AND CAPITAL
RESOURCES
Savaria generated $85.9M 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 September 30, 2024, the Corporation had
a net debt position of $259.1M and a ratio of net debt to adjusted
EBITDA of 1.69 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 the 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 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
November 7, 2024, at 8:30 a.m. (EST)
Savaria will host a conference call on Thursday,
November 7th at 8:30 a.m. Eastern Standard Time with financial
analysts to discuss results of the period ended September 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/BI163cfa6b83a54dd4b646b97d8a6d2d63Webcast
(en): https://edge.media-server.com/mmc/p/js9npfrq
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 Q3 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
|
|
Q3 |
YTD |
|
in thousands of dollars, except per-share |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net earnings |
$ |
13,026 |
|
$ |
12,054 |
|
$ |
35,034 |
|
$ |
26,882 |
|
|
Strategic initiatives expenses |
|
5,413 |
|
|
880 |
|
|
16,059 |
|
|
1,130 |
|
|
Other expenses (income) |
|
47 |
|
|
- |
|
|
(380 |
) |
|
3,157 |
|
|
Income tax related to strategic initiatives and other expenses
(income) |
|
(1,446 |
) |
|
(236 |
) |
|
(4,330 |
) |
|
(1,108 |
) |
|
Adjusted net earnings* |
$ |
17,040 |
|
$ |
12,698 |
|
$ |
46,383 |
|
$ |
30,061 |
|
|
Adjusted net earnings per share* |
$ |
0.24 |
|
$ |
0.19 |
|
$ |
0.65 |
|
$ |
0.46 |
|
|
Income tax related to strategic initiatives and other expenses
(income) |
|
1,446 |
|
|
236 |
|
|
4,330 |
|
|
1,108 |
|
|
Income tax expense |
|
4,635 |
|
|
3,056 |
|
|
12,431 |
|
|
8,371 |
|
|
Depreciation of fixed assets |
|
2,487 |
|
|
2,082 |
|
|
6,858 |
|
|
6,264 |
|
|
Depreciation of right-of-use assets |
|
3,078 |
|
|
2,532 |
|
|
8,496 |
|
|
7,450 |
|
|
Amortization of intangible assets |
|
7,906 |
|
|
7,753 |
|
|
22,926 |
|
|
23,099 |
|
|
Net finance costs |
|
4,379 |
|
|
5,512 |
|
|
14,900 |
|
|
17,054 |
|
|
Stock-based compensation |
|
766 |
|
|
615 |
|
|
2,039 |
|
|
1,563 |
|
|
Adjusted EBITDA* |
$ |
41,737 |
|
$ |
34,484 |
|
$ |
118,363 |
|
$ |
94,970 |
|
|
Adjusted EBITDA per share* |
$ |
0.58 |
|
$ |
0.53 |
|
$ |
1.66 |
|
$ |
1.46 |
|
|
Diluted weighted average number of shares |
|
71,811,980 |
|
|
65,353,751 |
|
|
71,442,982 |
|
|
64,928,613 |
|
*Non-IFRS measures are described and reconciled in
sections 3, 6 and 8 of the MD&A.
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