Mr. Marcel Bourassa reports

SAVARIA HAS A STRONG FINISH TO THE SECOND QUARTER DESPITE HEADWINDS

Savaria Corp. has released its results for the second quarter of fiscal 2023.

Highlights -- Q2 2023 compared with Q2 2022:

• Revenue was $198.4-million, compared with $192.1-million in 2022, an increase of 3.3 per cent, due to organic growth of 3.4 per cent coming from both segments and a positive foreign exchange impact of 3.8 per cent, partially offset by the divestiture of the Norway operations:
  • Worldwide accessibility organic growth stood at 2.8 per cent while the growth in North America reached 12.1 per cent.
  • Patient care organic growth stood at 5.3 per cent.
• Gross profit was $67.1-million, up $1.5-million or 2.3 per cent, representing 33.8 per cent of revenue compared with 34.1 per cent in Q2 2022.
• Operating income was $16.2-million, down $1.5-million or 8.5 per cent, representing 8.2 per cent of revenue compared with 9.2 per cent in Q2 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $29.0-million, down $2.4-million or 7.8 per cent, compared with Q2 2022.
• Adjusted EBITDA margin stood at 14.6 per cent, down 180 basis points compared with 16.4 per cent in Q2 2022.
• Net earnings were $8.8-million, or 14 cents per share on a diluted basis, compared with $8.1-million, or 13 cents per share on a diluted basis, in Q2 2022.
• Available funds were $119.5-million, as of June 30, 2023, to support working capital, investments and growth opportunities.

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-per-cent 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 per cent over all from last year (5.3-per-cent organic growth) and an adjusted EBITDA margin of 19.4 per cent. 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.

Outlook

Savaria is expecting revenue growth of approximately 8 to 10 per cent, when normalizing for the impact of the Norwegian auto division divestiture, with an adjusted EBITDA margin of approximately 16 per cent 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 are in line with management's plan.
• Management is able to continue to effectively manage supply chain challenges.

This outlook excludes the financial contribution from any new acquisition.

Environmental, social and governance 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. It believes that promoting environmentally and socially responsible behaviour across the 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 key performance indicator 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 coming regulations.

Savaria is a global leader in the accessibility industry. It provides accessibility solutions for the physically challenged to increase comfort, mobility and 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 and 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 (United Kingdom, the 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.

Results webcast and conference call on Aug. 10, 2023, at 8:30 a.m. EDT

Savaria will host a conference call on Thursday, Aug. 10, at 8:30 a.m. Eastern Daylight Time, with financial analysts to discuss results of the quarter. Investors and members of the media are invited to participate on a listen-only basis.

A link to the replay of the webcast will be available on the corporation's website.

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