Savaria Corp. ((TSE:SIS)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Savaria Corp. recently held its earnings call, revealing a generally positive sentiment with strong financial performance and growth, particularly in North America. The company highlighted strategic expansions and product launches, although it acknowledged challenges in the European market and broader economic uncertainties, especially regarding tariffs. Despite these hurdles, Savaria maintains a positive outlook.
Record First Quarter EBITDA
Savaria Corp. reported a record first quarter EBITDA, growing by $6 million or about 17% to reach $40.6 million. This achievement underscores the company’s robust financial health and operational efficiency.
Strong Revenue Growth in North America
The company experienced a significant revenue growth of 11.8% in its North American Accessibility segment. This growth was driven by organic expansion and favorable foreign exchange rates, highlighting the region’s strong market performance.
Improved Gross and EBITDA Margins
Savaria saw an increase in its gross margin by 180 basis points to 37.8%, while its EBITDA margins rose by 190 basis points to 18.5%. These improvements reflect the company’s effective cost management and operational strategies.
Positive Cash Flow and Debt Management
Operating cash flows increased by 18% compared to the previous year, and the company’s leverage ratio improved from 1.63 to 1.49. This indicates Savaria’s strong cash management and reduced financial risk.
Expansion and New Product Launches
The company launched new products, including the Luma home elevator, and expanded its production facilities with a CAD 30 million investment in Greenville. These initiatives are expected to drive future growth and market presence.
Successful Acquisition
Savaria completed the acquisition of Western Elevator, a long-term dealer in British Columbia, Canada, with annual sales of approximately CAD 7.5 million. This acquisition is expected to enhance Savaria’s market position in Canada.
Weak Performance in Europe
The European market faced a revenue contraction of 2.8%, attributed to tough comparables and ongoing market adjustments. This remains a challenge for the company as it navigates economic uncertainties in the region.
Patient Care Modest Growth
The Patient Care segment saw modest growth of 2.1% following a strong Q4 2024. The sales in this segment are project-based and described as lumpy, indicating variability in performance.
Economic Uncertainty and Tariff Concerns
Savaria’s guidance remains unchanged due to economic uncertainty and tariff concerns, which continue to affect the company’s future outlook. These factors are critical in shaping the company’s strategic decisions moving forward.
Forward-Looking Guidance
Savaria Corp. maintained its guidance for 2025, projecting revenues of approximately $925 million with an expected adjusted EBITDA margin between 17% and 20%. Despite economic uncertainties and tariff-related challenges, the company is well-positioned with a debt ratio of 1.5% and available funds of $254 million, allowing for potential future investments or acquisitions.
In summary, Savaria Corp.’s earnings call highlighted a strong performance with significant growth in North America, improved margins, and strategic expansions. While challenges persist in Europe and due to economic uncertainties, the company’s positive outlook and solid financial position suggest continued growth and resilience in the face of market fluctuations.