LAVAL, Québec, March 06, 2024 (GLOBE NEWSWIRE) — Savaria Corporation (“Savaria”) (TSX: SIS), a global leader in the accessibility industry, is pleased to announce its results for fiscal 2023.
Highlights – Fiscal 2023 compared to 2022
- Revenue was $837.0M, compared to $789.1M in 2022, an increase of 6.1% due to organic growth of 6.7% and a positive foreign exchange impact of 3.2%, partially offset by the divestiture of the Norway operations.
- Accessibility organic growth stood at 7.8%, including growth of 13.6% coming from North America.
- Patient Care organic growth stood at 3.0%.
- Gross profit was $286.0M, up $31.7M or 12.4%, representing 34.2% of revenue, an increase of 200 bps compared to 32.2% in 2022.
- Operating income was $72.2M, up $8.2M or 12.8%, representing 8.6% of revenue compared to 8.1% in 2022.
- Adjusted EBITDA* was $130.1M, up $9.9M or 8.2%, compared to 2022.
- Adjusted EBITDA margin* stood at 15.5%, up 30 bps compared to 15.2% in 2022.
- Net earnings were $37.8M, or $0.57 per share on a diluted basis, compared to $35.3M or $0.55 in 2022.
- Ratio of net debt to adjusted EBITDA* stands at 2.07 in comparison to 3.07 as at December 31, 2022.
- Available funds* of $223.3M, as of December 31, 2023, to support working capital, investments and growth opportunities.
- After December 31, 2023, Savaria finalized the transaction to sell the Van-Action and Freedom Motors divisions. Earlier in 2023, the Corporation disposed of its Norwegian operations. These divestments represent approximately $50M of annualized revenue.
- The Corporation started Savaria One, its multi-year, sales and operations program. Designed to unlock the full potential of the business, Savaria One encapsulates all of the Corporation’s organic initiatives through to 2025 and is expected to be the major driving force toward Savaria’s targets of approximately $1.0 billion in revenue and 20% adjusted EBITDA margin. For more detail, refer to section “Outlook”.
| Q4 | YTD | |||||||||||||||
| in thousands of dollars, except per-share amounts and percentages | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||
| Revenue | $ | 216,839 | $ | 212,100 | 2.2 | % | $ | 836,954 | $ | 789,091 | 6.1 | % | ||||
| Gross profit | $ | 74,322 | $ | 66,222 | 12.2 | % | $ | 286,020 | $ | 254,369 | 12.4 | % | ||||
| % of revenue | 34.3 | % | 31.2 | % | 310 | bps | 34.2 | % | 32.2 | % | 200 | bps | ||||
| Operating income | $ | 19,843 | $ | 19,843 | – | $ | 72,150 | $ | 63,941 | 12.8 | % | |||||
| Net earnings | $ | 10,959 | $ | 11,258 | (2.7 | ) % | $ | 37,841 | $ | 35,311 | 7.2 | % | ||||
| Diluted net earnings per share | $ | 0.16 | $ | 0.18 | (11.1 | ) % | $ | 0.57 | $ | 0.55 | 3.6 | % | ||||
| Adjusted net earnings* | $ | 12,848 | $ | 12,555 | 2.3 | % | $ | 42,909 | $ | 39,388 | 8.9 | % | ||||
| Adjusted net earnings per share* | $ | 0.19 | $ | 0.19 | – | % | $ | 0.65 | $ | 0.61 | 6.6 | % | ||||
| Adjusted EBITDA* | $ | 35,105 | $ | 33,310 | 5.4 | % | $ | 130,075 | $ | 120,225 | 8.2 | % | ||||
| % of revenue | 16.2 | % | 15.7 | % | 50 | bps | 15.5 | % | 15.2 | % | 30 | bps | ||||
*Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.
A Word From the Executive Chairman
“2023 was a great year for Savaria and has set the stage for 2024 and beyond. Going back to 1992 when Savaria went public, I was the CEO of a company with sales of $50M. Reaching $837M in 2023 is remarkable to me. We are now a family of over 2450 employees with 17 distribution or manufacturing facilities around the world and over 1400 dealers. Congratulations to our employees for their dedication in serving the mobility needs of millions of people in this marvelous industry,” said Marcel Bourassa, Executive Chairman.
“We delivered a gross margin of 34.2% with an adjusted EBITDA of $130M (15.5% of sales) in 2023. For the fourth quarter, we delivered our best-ever adjusted EBITDA of $35.1M (16.2% of sales), fueled by a stronger gross margin of 34.3% up from 31.2% year-over-year.
“Our goal for the end of 2025 to reach approximately $1 billion of revenue and 20% adjusted EBITDA are well within our sight. I believe the best is yet to come with Savaria with the addition of new talent in our company, the continued growth of the aging population and the strong foundation we have built,” concluded Mr. Bourassa.
A Word From the President & CEO
“Our recent achievements represent our team’s hard work including new initiatives for growing sales and managing costs. We added strength to our management team in key areas of the business as part of our Savaria One program. This program has been developed with over 100 team leaders around the world to optimize our success. We look forward to providing more information about Savaria One at our first-ever investor day, April 9th in Toronto,” said Sébastien Bourassa, President and Chief Executive Officer.
Fourth Quarter Results – Q4 2023 compared to Q4 2022
REVENUE
Revenue reached $216.8M, up $4.7M or 2.2%. The increase was due to organic growth of 6.2% and a positive foreign exchange impact of 2.3%, partially offset by the divestiture of the Norway operations.
- Accessibility segment (80% of Q4-23 revenue): Revenue was $173.7M, an increase of $7.2M or 4.3%. Organic growth stood at 9.5%.
- Patient Care segment (20% of Q4-23 revenue): Revenue was $43.2M, a decrease of $2.5M or 5.4%. Organic contraction was 5.9%.
OPERATING INCOME
Operating income of $19.8M, was stable compared to Q4 2022, representing an operating margin of 9.2% compared to 9.4% in Q4 2022.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $35.1M and 16.2%, respectively, compared to $33.3M and 15.7% for Q4 2022.
- Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin stood at $28.7M and 16.5%, respectively, compared to $27.0M and 16.2% for Q4 2022.
- Patient Care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $7.9M and 18.3%, respectively, compared to $7.0M and 15.3% for Q4 2022.
Twelve-Month Results – YTD 2023 compared to YTD 2022
REVENUE
The Corporation generated revenue of $837.0M, up $47.9M or 6.1%. The increase is mainly due to organic growth of 6.7% and a positive foreign exchange impact of 3.2%. The growth was partially offset by the aforementioned divestiture.
OPERATING INCOME
Operating income was $72.2M, up $8.2M or 12.8%, representing an operating margin of 8.6% compared to 8.1% in 2022.
ADJUSTED EBITDA
Adjusted EBITDA and adjusted EBITDA margin stood at $130.1M and 15.5%, respectively, compared to $120.2M and 15.2% in 2022.
LIQUIDITY AND CAPITAL RESOURCES
Savaria generated $78.6M of cash from operations which were primarily used to invest in capital projects, repay debt and pay interest and dividends.
As at December 31, 2023, the Corporation had a net debt position of $269.9M and a ratio of net debt to adjusted EBITDA of 2.07 compared to 3.07 as of December 31, 2022.
Outlook
Savaria expects continued strong demand in the Accessibility and Patient Care segments.
- For Accessibility: Long-term trend of people’s desire to age in place.
- For Patient Care: Aging population and greater government investment in healthcare infrastructure.
In 2023, the Corporation started Savaria One, its multi-year, company-wide, sales and operations program designed to unlock the full potential of the business. Through Savaria One, the Corporation is identifying, prioritizing, and executing initiatives to capitalize on opportunities and synergies from acquisitions and drive commercial and operational excellence. The program is focused on amplifying and accelerating current initiatives, as well as identifying incremental opportunities across six key areas of the business: sales growth, pricing, operations, procurement, working capital and SG&A.
Savaria One encapsulates all of the Corporation’s organic initiatives through to 2025, and is expected to be the major driving force toward Savaria’s targets of approximately $1.0 billion in revenue and 20% adjusted EBITDA margin.
Realization of expected benefits from Savaria One includes:
- 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
- Investment in research and development to improve existing and develop new products
The Corporation plans to record an average of $5.0M in strategic initiative expenses per quarter through 2024 and at the beginning of 2025 related to Savaria One, and anticipates increasing financial and operational benefits on a sequential quarterly basis, as the Corporation continues toward its 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 following the divestiture of Van-Action, Freedom Motors and the Norwegian vehicle adaptation businesses.
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.
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 2,450 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 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 March 7, 2024, at 8:30 a.m. (EST)
Savaria will host a conference call on Thursday, March 7th at 8:30 a.m. Eastern Standard Time with financial analysts to discuss results of the period ended December 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/BI6a2d99af8ce145029a2ec0e3fe3f52d6
Webcast (en): https://edge.media-server.com/mmc/p/jivftqsd
Link to the replay of the webcast will be available on the Corporation’s website at 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 fiscal 2023 will be available shortly on Savaria’s website and on SEDAR+ sedarplus.ca.
Reconciliation of adjusted net earnings and adjusted EBITDA with net earnings
| Q4 | YTD | |||||||||||
| in thousands of dollars, except per-share | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net earnings | $ 10,959 | $ 11,258 | $ 37,841 | $ 35,311 | ||||||||
| Strategic initiatives expenses | 2,018 | – | 3,148 | – | ||||||||
| Other expenses | 522 | 1,699 | 3,679 | 5,320 | ||||||||
| Income tax related to strategic initiatives and other expenses* | (651 | ) | (402 | ) | (1,759 | ) | (1,243 | ) | ||||
| Adjusted net earnings* | $ 12,848 | $ 12,555 | $ 42,909 | $ 39,388 | ||||||||
| Adjusted net earnings per share* | $0.19 | $0.19 | $0.65 | $0.61 | ||||||||
| Income tax related to strategic initiatives and other expenses* | 651 | 402 | 1,759 | 1,243 | ||||||||
| Income tax expense | 4,103 | 2,408 | 12,474 | 12,161 | ||||||||
| Depreciation of fixed assets | 2,197 | 2,009 | 8,461 | 8,053 | ||||||||
| Depreciation of right-of-use assets | 2,611 | 2,728 | 10,061 | 10,567 | ||||||||
| Amortization of intangible assets | 7,511 | 6,757 | 30,610 | 30,482 | ||||||||
| Net finance costs | 4,781 | 6,177 | 21,835 | 16,469 | ||||||||
| Stock-based compensation | 403 | 274 | 1,966 | 1,862 | ||||||||
| Adjusted EBITDA* | $ 35,105 | $ 33,310 | $ 130,075 | $ 120,225 | ||||||||
| Diluted weighted average number of shares | 71,031,225 | 64,513,288 | 66,476,434 | 64,491,541 | ||||||||
*Non-IFRS measures are described and reconciled in sections 3, 6 and 8 of the MD&A.
Bay Street News