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.
|
Q3 |
YTD |
in thousands of dollars, except per-share amounts and
percentages |
2023 |
2022 |
Change |
2023 |
2022 |
Change |
Revenue |
$ |
210,094 |
|
$ |
201,394 |
|
4.3 |
% |
$ |
620,115 |
|
$ |
576,991 |
|
7.5 |
% |
Gross profit |
$ |
72,560 |
|
$ |
64,044 |
|
13.3 |
% |
$ |
211,698 |
|
$ |
188,147 |
|
12.5 |
% |
% of revenue |
|
34.5 |
% |
|
31.8 |
% |
270 |
bps |
|
34.1 |
% |
|
32.6 |
% |
150 |
bps |
Operating income |
$ |
20,622 |
|
$ |
17,531 |
|
17.6 |
% |
$ |
52,307 |
|
$ |
44,098 |
|
18.6 |
% |
Net earnings |
$ |
12,054 |
|
$ |
10,581 |
|
13.9 |
% |
$ |
26,882 |
|
$ |
24,053 |
|
11.8 |
% |
Diluted net earnings per share |
$ |
0.18 |
|
$ |
0.16 |
|
12.5 |
% |
$ |
0.41 |
|
$ |
0.37 |
|
10.8 |
% |
Adjusted net earnings* |
$ |
12,054 |
|
$ |
11,177 |
|
7.8 |
% |
$ |
29,230 |
|
$ |
26,833 |
|
8.9 |
% |
Adjusted net earnings per share* |
$ |
0.18 |
|
$ |
0.18 |
|
- |
|
$ |
0.45 |
|
$ |
0.42 |
|
7.1 |
% |
Adjusted EBITDA* |
$ |
33,604 |
|
$ |
31,024 |
|
8.3 |
% |
$ |
93,840 |
|
$ |
86,915 |
|
8.0 |
% |
% of revenue |
|
16.0 |
% |
|
15.4 |
% |
60 |
bps |
|
15.1 |
% |
|
15.1 |
% |
- |
bps |
*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 EBITDAAdjusted 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.
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
November 2, 2023, at 8:30 a.m.
(EST)
Savaria will host a conference call on Thursday, November 2 at
8:30 a.m. Eastern Standard Time with financial analysts to discuss
results of the period ended September 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/BI9519a73dbcda460eb68e2e2b1e8546a7Webcast
(en): https://edge.media-server.com/mmc/p/m5twys7k/Link to the
replay of the webcast will be available on the Corporation’s
website at savaria.com
For further information: |
|
|
Marcel Bourassa |
Stephen Reitknecht, CPA, CA |
facebook.com/savariabettermobility |
Chairman, President and Chief
Executive Officer |
Chief Financial Officer |
twitter.com/Mobilityforlife |
mbourassa@savaria.com |
sreitknecht@savaria.com |
1.800.661.5112 |
1.800.661.5112, ext. 3370 |
www.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 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
|
Q3 |
YTD |
in thousands of dollars, except per-share |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings |
$ |
12,054 |
|
$ |
10,581 |
|
$ |
26,882 |
|
$ |
24,053 |
|
Other expenses |
|
– |
|
|
757 |
|
|
3,157 |
|
|
3,621 |
|
Income taxes related to other expenses* |
|
– |
|
|
(161 |
) |
|
(809 |
) |
|
(841 |
) |
Adjusted net earnings* |
$ |
12,054 |
|
$ |
11,177 |
|
$ |
29,230 |
|
$ |
26,833 |
|
Adjusted net earnings per share* |
$ |
0.18 |
|
$ |
0.18 |
|
$ |
0.45 |
|
$ |
0.42 |
|
Income taxes related to other expenses* |
|
– |
|
|
161 |
|
|
809 |
|
|
841 |
|
Income tax expense |
|
3,056 |
|
|
4,469 |
|
|
8,371 |
|
|
9,753 |
|
Depreciation of fixed assets |
|
2,082 |
|
|
2,063 |
|
|
6,264 |
|
|
6,044 |
|
Depreciation of right-of-use assets |
|
2,532 |
|
|
2,645 |
|
|
7,450 |
|
|
7,839 |
|
Amortization of intangible assets |
|
7,753 |
|
|
7,329 |
|
|
23,099 |
|
|
23,725 |
|
Net finance costs |
|
5,512 |
|
|
2,481 |
|
|
17,054 |
|
|
10,292 |
|
Stock-based compensation |
|
615 |
|
|
699 |
|
|
1,563 |
|
|
1,588 |
|
Adjusted EBITDA* |
$ |
33,604 |
|
$ |
31,024 |
|
$ |
93,840 |
|
$ |
86,915 |
|
Diluted weighted average number of shares |
|
65,353,751 |
|
|
64,466,506 |
|
|
64,928,613 |
|
|
64,507,643 |
|
*Non-IFRS measures are described and reconciled in sections 3, 6
and 8 of the MD&A.
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