Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in
the accessibility industry, is pleased to announce its results for
the second quarter of fiscal 2023.
Highlights – Q2 2023 compared to Q2
2022
- Revenue was $198.4M, compared to $192.1M in 2022, an increase
of 3.3%, due to organic growth of 3.4% coming from both segments
and a positive foreign exchange impact of 3.8%, partially offset by
the divestiture of the Norway operations.
- Worldwide Accessibility organic growth stood at 2.8% while the
growth in North America reached 12.1%;
- Patient Care organic growth stood at 5.3%;
- Gross profit was $67.1M, up $1.5M or 2.3%, representing 33.8%
of revenue compared to 34.1% in Q2 2022.
- Operating income was $16.2M, down $1.5M or 8.5%, representing
8.2% of revenue compared to 9.2% in Q2 2022.
- Adjusted EBITDA* was $29.0M, down $2.4M or 7.8%, compared to Q2
2022.
- Adjusted EBITDA margin* stood at 14.6%, down 180 bps compared
to 16.4% in Q2 2022.
- Net earnings were $8.8M, or $0.14 per share on a diluted basis,
compared to $8.1M or $0.13 per share on a diluted basis in Q2
2022.
- Available funds* of $119.5M, as of June 30, 2023, to
support working capital, investments and growth opportunities.
|
Q2 |
YTD |
in thousands of dollars, except per-share amounts and
percentages |
|
2023 |
|
|
2022 |
|
Change |
|
2023 |
|
|
2022 |
|
Change |
Revenue |
$ |
198,396 |
|
$ |
192,061 |
|
3.3 |
% |
$ |
410,021 |
|
$ |
375,597 |
|
9.2 |
% |
Gross profit |
$ |
67,105 |
|
$ |
65,582 |
|
2.3 |
% |
$ |
139,138 |
|
$ |
124,103 |
|
12.1 |
% |
% of revenue |
|
33.8 |
% |
|
34.1 |
% |
(30) bps |
|
33.9 |
% |
|
33.0 |
% |
90 bps |
Net earnings |
$ |
8,789 |
|
$ |
8,125 |
|
8.2 |
% |
$ |
14,828 |
|
$ |
13,472 |
|
10.1 |
% |
% of revenue |
|
4.4 |
% |
|
4.2 |
% |
20 bps |
|
3.6 |
% |
|
3.6 |
% |
- |
|
Diluted net earnings per share |
$ |
0.14 |
|
$ |
0.13 |
|
7.7 |
% |
$ |
0.23 |
|
$ |
0.21 |
|
9.5 |
% |
Adjusted net earnings* |
$ |
8,789 |
|
$ |
8,890 |
|
(1.1 |
)% |
$ |
17,176 |
|
$ |
15,656 |
|
9.7 |
% |
% of revenue |
|
4.4 |
% |
|
4.6 |
% |
(20) bps |
|
4.2 |
% |
|
4.2 |
% |
- |
|
Adjusted net earnings per share* |
$ |
0.14 |
|
$ |
0.14 |
|
- |
|
$ |
0.27 |
|
$ |
0.24 |
|
12.5 |
% |
Adjusted EBITDA* |
$ |
29,022 |
|
$ |
31,469 |
|
(7.8 |
)% |
$ |
60,236 |
|
$ |
55,891 |
|
7.8 |
% |
% of revenue |
|
14.6 |
% |
|
16.4 |
% |
(180) bps |
|
14.7 |
% |
|
14.9 |
% |
(20) bps |
*Non-IFRS measures are described and reconciled in
sections 3, 6 and 8 of the MD&A
A Word from the President
“We had a great second quarter although it may not
be readily apparent. With a closer look, we see that Accessibility
in North America reached $86.4 million in revenue - a strong 12.1%
organic increase compared to one year earlier. Accessibility in
Europe suffered a disruption due to the implementation of a new ERP
system. This affected sales and profitability in the quarter and
caused an overall estimated shortfall of $5 million in adjusted
EBITDA. We have confidence, with the ERP issues behind us, that the
positive trend will continue,” said Marcel Bourassa, President and
Chief Executive Officer.
“The Patient Care segment had a terrific quarter
with revenue up 8.9% overall from last year (5.3% organic growth)
and an adjusted EBITDA margin of 19.4%. Our facility in Mexico
continues to expand with 50 employees in place and new
manufacturing equipment up and running to grow our capabilities in
this strategically located plant.
“As we reviewed our rapid growth over the past two
years, we took a deep look at opportunities to better integrate our
different companies and business segments. We have recently
launched a new company-wide initiative called Savaria
One, and with the guidance of an independent consulting
firm, we have laid out a plan for the coming 24 months. Our plan
consists of many actions to help us achieve operational and sales
excellence across Savaria.
“I believe we are on track to exceed our previously
stated goal of $1 billion in revenue by the end of 2025. As always,
I thank the 2,250 employees of Savaria for working together to hit
these goals,” concluded Mr. Bourassa.
Second Quarter Results - Q2 2023 compared
to Q2 2022
REVENUE
Revenue reached $198.4M, up $6.3M or 3.3%. The
growth was mainly due to organic growth of 3.4% coming from both
segments and a positive foreign exchange impact of 3.8%, partially
offset by the divestiture of the Norway operations.
- Accessibility segment (76% of Q2-23 revenue):
Revenue was $150.6M, an increase of $2.4M or 1.6%. Organic revenue
growth stood at 2.8%.
- Patient Care segment (24% of Q2-23 revenue):
Revenue was $47.8M, an increase of $3.9M or 8.9%. Organic revenue
growth stood at 5.3%.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at
$29.0M and 14.6%, respectively, compared to $31.5M and 16.4% for Q2
2022.
- Accessibility segment: Adjusted EBITDA and
adjusted EBITDA margin stood at $21.4M and 14.2%, respectively,
compared to $26.5M and 17.9% for Q2 2022.
- Patient Care segment: Adjusted EBITDA and
adjusted EBITDA margin stood at $9.3M and 19.4%, respectively,
compared to $6.7M and 15.3% for Q2 2022.
Six-Month Results - YTD 2023 compared to
YTD 2022
REVENUE
The Corporation generated revenue of $410.0M, up
$34.4M or 9.2%. The increase is mainly due to organic growth of
8.3% and a positive foreign exchange impact of 2.9%. The growth was
also partially offset by the aforementioned divestiture.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at
$60.2M and 14.7%, respectively, compared to $55.9M and 14.9% in
2022.
LIQUIDITY AND CAPITAL
RESOURCES
Savaria generated $16.2M of cash from operations
which were primarily used to invest in capital projects, pay
interest and dividends.
As at June 30, 2023, the Corporation had a net
debt position of $372.9M and a ratio of net debt to adjusted EBITDA
of 2.99 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 and 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 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.
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 savaria.com, and filed with SEDAR at
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.
Results webcast and conference call on
August 10, 2023, at 8:30 a.m. (EDT)
Savaria will host a conference call on Thursday,
August 10 at 8:30 a.m. Eastern Daylight Time with financial
analysts to discuss results of the quarter and fiscal year ended
June 30, 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/BI414e00ba99824d6f95d884fabc81bcc8Webcast
(en): https://edge.media-server.com/mmc/p/gn9zn3q8/
Link to the replay of the webcast will be available
on the Corporation’s website at savaria.com
For further information: |
|
|
Marcel BourassaChairman,
President and Chief Executive
Officermbourassa@savaria.com1.800.661.5112 |
Stephen Reitknecht, CPA, CAChief
Financial Officersreitknecht@savaria.com1.800.661.5112, ext.
3370 |
www.savaria.comfacebook.com/savariabettermobilitytwitter.com/Mobilityforlife |
|
|
|
|
|
|
Reconciliation of adjusted net earnings and
adjusted EBITDA with net earnings is provided below. Complete
financial statements and the management’s report for Q2 2023 will
be available shortly on Savaria’s website and on SEDAR
sedar.com.
Reconciliation of adjusted net earnings and
adjusted EBITDA with net earnings
|
Q2 |
YTD |
in thousands of dollars, except per-share |
|
2023 |
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings |
$ |
8,789 |
$ |
8,125 |
|
$ |
14,828 |
|
$ |
13,472 |
|
Other expenses |
|
– |
|
1,025 |
|
|
3,157 |
|
|
2,864 |
|
Income taxes related to other expenses* |
|
– |
|
(260 |
) |
|
(809 |
) |
|
(680 |
) |
Adjusted net earnings* |
$ |
8,789 |
$ |
8,890 |
|
$ |
17,176 |
|
$ |
15,656 |
|
Adjusted net earnings per share* |
$ |
0.14 |
$ |
0.14 |
|
$ |
0.27 |
|
$ |
0.24 |
|
Income taxes related to other expenses* |
|
– |
|
260 |
|
|
809 |
|
|
680 |
|
Income tax expense |
|
2,930 |
|
3,177 |
|
|
5,315 |
|
|
5,284 |
|
Depreciation of fixed assets |
|
2,230 |
|
2,182 |
|
|
4,182 |
|
|
3,981 |
|
Depreciation of right-of-use assets |
|
2,527 |
|
2,562 |
|
|
4,918 |
|
|
5,194 |
|
Amortization of intangible assets |
|
7,501 |
|
7,493 |
|
|
15,346 |
|
|
16,396 |
|
Net finance costs |
|
4,507 |
|
6,436 |
|
|
11,542 |
|
|
7,811 |
|
Stock-based compensation |
|
538 |
|
469 |
|
|
948 |
|
|
889 |
|
Adjusted EBITDA* |
$ |
29,022 |
$ |
31,469 |
|
$ |
60,236 |
|
$ |
55,891 |
|
Diluted weighted average number of shares |
|
64,797,135 |
|
64,489,238 |
|
|
64,719,889 |
|
|
64,510,442 |
|
*Non-IFRS measures are described and reconciled in
sections 3, 6 and 8 of the MD&A
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