Savaria announces its strongest quarter ever
LAVAL, Québec, Nov. 01, 2023 (GLOBE NEWSWIRE) -- Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for the third quarter of fiscal 2023.
Highlights – Q3 2023 compared to Q3 2022
- Revenue was $210.1M, compared to $201.4M in 2022, an increase of 4.3% due to organic growth of 4.1% and a positive foreign exchange impact of 4.7%, partially offset by the divestiture of the Norway operations.
- Accessibility organic growth stood at 5.1%, including 9.0% growth coming from North America.
- Patient Care organic growth was relatively flat.
- Gross profit was $72.6M, up $8.5M or 13.3%, representing 34.5% of revenue compared to 31.8% in Q3 2022.
- Operating income was $20.6M, up $3.1M or 17.6%, representing 9.8% of revenue compared to 8.7% in Q3 2022.
- Adjusted EBITDA* was $33.6M, up $2.6M or 8.3%, compared to Q3 2022.
- Adjusted EBITDA margin* stood at 16.0%, up 60 bps compared to 15.4% in Q3 2022.
- Net earnings were $12.1M, or $0.18 per share on a diluted basis, compared to $10.6M or $0.16 in Q3 2022.
- On September 15, 2023, the Corporation issued 6,346,850 common shares via a public offering and a concurrent private placement for net proceeds of $87.4M, which were used to reimburse long-term debt. The ratio of net debt to adjusted EBITDA* now stands at 2.28 in comparison to 3.07 as at December 31, 2022.
- Available funds* of $203.4M, as of September 30, 2023, to support working capital, investments and growth opportunities.
*Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.
A Word from the President
“This third quarter is the best ever quarter presented by Savaria. Revenue reached $210 million, an $8.7 million increase over the same period last year fueled by 9% growth in North America Accessibility . Gross profit was $72.6 million, representing a 34.5% gross margin, also a record for us. We presented a record adjusted EBITDA of $33.6 million for the quarter. Without costs of $0.9 million associated with the Savaria One project, the business would have delivered an adjusted EBITDA of $34.5 million. These strong metrics are the result of excellent work by our employees, in spite of global volatility,” said Marcel Bourassa, President and Chief Executive Officer.
“We successfully raised $92 million of gross proceeds via a public offering and concurrent private placement with Caisse de dépôt et placement du Québec in September, reducing our leverage ratio to 2:28 as at September 30. This adds flexibility for Savaria to seize smaller opportunities such as tuck-in acquisitions in our quest to add products or markets to our global growth plans.
“We remain confident in our plan to reach $1 billion in revenue at the end of 2025. As the world continues to face a myriad of challenges, Savaria feels fortunate to provide products that make a positive difference in peoples’ lives. I have our 2,250 employees and our global dealer network to thank for their continued support,” concluded Mr. Bourassa.
Third Quarter Results - Q3 2023 compared to Q3 2022
REVENUE
Revenue reached $210.1M, up $8.7M or 4.3%. The increase was due to organic growth of 4.1% and a positive foreign exchange impact of 4.7%, partially offset by the divestiture of the Norway operations.
- Accessibility segment ( 79% of Q3 - 23 revenue): Revenue was $166.3M, an increase of $7.7M or 4.8%. Organic growth stood at 5.1%.
- Patient Care segment ( 21% of Q3 - 23 revenue): Revenue was $43.8M, an increase of $1.0M or 2.4%. Organic growth was relatively flat.
OPERATING INCOME
Operating income was $20.6M, up $3.1M or 17.6%, representing an operating margin of 9.8% compared to 8.7% in Q3 2022.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $33.6M and 16.0%, respectively, compared to $31.0M and 15.4% for Q3 2022.
- Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin stood at $29.9M and 18.0%, respectively, compared to $26.9M and 17.0% for Q3 2022.
- Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $6.1M and 14.0%, respectively, compared to $5.9M and 13.8% for Q3 2022.
Nine -Month Results - YTD 2023 compared to YTD 2022
REVENUE
The Corporation generated revenue of $620.1M, up $43.1M or 7.5%. The increase is mainly due to organic growth of 6.9% and a positive foreign exchange impact of 3.6%. The growth was partially offset by the aforementioned divestiture.
OPERATING INCOME
Operating income was $52.3M, up $8.2M or 18.6%, representing an operating margin of 8.4% compared to 7.6% in 2022.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $93.8M and 15.1%, respectively, compared to $86.9M and 15.1% in 2022.
LIQUIDITY AND CAPITAL RESOURCES
Savaria generated $41.5M of cash from operations which were primarily used to invest in capital projects, pay interest and dividends.
As at September 30, 2023, the Corporation had a net debt position of $290.2M and a ratio of net debt to adjusted EBITDA of 2.28 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 divestiture, with an adjusted EBITDA margin of approximately 16% in fiscal 2023, based on the following assumptions:
- Organic growth coming from both 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 undertook a project to measure, baseline and better understand its global energy consumption through a comprehensive carbon footprint calculation of its Scope 1 and Scope 2 greenhouse gas emissions. The data gleaned from this study will help guide future energy efficiency initiatives.
Moreover, Savaria is also in the process of finalizing its ESG governance structure, and has formed an executive management committee responsible for steering the firm’s overall ESG strategy. To that end, the committee has engaged external consultants to help it design and implement a global ESG KPI reporting structure and system for Savaria. As part of this mandate, the committee will develop an action plan to identify and close any gaps in assessing Savaria’s preparedness to meet its ESG reporting obligations ahead of potential upcoming regulations.
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.
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