Mr. Sebastien Bourassa reports

SAVARIA FINISHED FY2023 WITH ITS STRONGEST QUARTER AND YEAR EVER

Savaria Corp. has released its results for fiscal 2023.

Highlights -- fiscal 2023 compared with 2022:

• Revenue was $837.0-million, compared with $789.1-million in 2022, an increase of 6.1 per cent due to organic growth of 6.7 per cent and a positive foreign exchange impact of 3.2 per cent, partially offset by the divestiture of the Norway operations:
  • Accessibility organic growth stood at 7.8 per cent, including growth of 13.6 per cent coming from North America.
  • Patient Care organic growth stood at 3.0 per cent.
• Gross profit was $286.0-million, up $31.7-million or 12.4 per cent, representing 34.2 per cent of revenue, an increase of 200 basis points compared with 32.2 per cent in 2022.
• Operating income was $72.2-million, up $8.2-million or 12.8 per cent, representing 8.6 per cent of revenue, compared with 8.1 per cent in 2022.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $130.1-million, up $9.9-million or 8.2 per cent compared with 2022.
• Adjusted EBITDA margin stood at 15.5 per cent, up 30 basis points compared with 15.2 per cent in 2022.
• Net earnings were $37.8-million or 57 cents per share on a diluted basis, compared with $35.3-million or 55 cents in 2022.
• The ratio of net debt to adjusted EBITDA stands at 2.07, in comparison with 3.07 as at Dec. 31, 2022.
• The company had available funds of $223.3-million, as of Dec. 31, 2023, to support working capital, investments and growth opportunities.
• After Dec. 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 $50-million of annualized revenue.
• The corporation started Savaria One, its multiyear, 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 adjusted EBITDA margin of 20 per cent. For more details, refer to outlook section.

A word from the executive chairman

"Two thousand twenty-three 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 $50-million. Reaching $837-million in 2023 is remarkable to me. We are now a family of over 2,450 employees, with 17 distribution or manufacturing facilities around the world and over 1,400 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 per cent with an adjusted EBITDA of $130-million (15.5 per cent of sales) in 2023. For the fourth quarter, we delivered our best-ever adjusted EBITDA of $35.1-million (16.2 per cent of sales), fuelled by a stronger gross margin of 34.3 per cent up from 31.2 per cent year over year.

"Our goal for the end of 2025 to reach approximately $1-billion of revenue and 20-per-cent 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 Marcel Bourassa.

A word from the president and chief executive officer

"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 9, in Toronto," said Sebastien Bourassa, president and chief executive officer.

Fourth quarter results -- Q4 2023 compared with Q4 2022 revenue

Revenue reached $216.8-million, up $4.7-million or 2.2 per cent. The increase was due to organic growth of 6.2 per cent and a positive foreign exchange impact of 2.3 per cent, partially offset by the divestiture of the Norway operations:

• Accessibility segment (80 per cent of Q4 2023 revenue): Revenue was $173.7-million, an increase of $7.2-million or 4.3 per cent. Organic growth stood at 9.5 per cent.
• Patient care segment (20 per cent of Q4 2023 revenue): Revenue was $43.2-million, a decrease of $2.5-million or 5.4 per cent. Organic contraction was 5.9 per cent.

Operating income

Operating income of $19.8-million was stable compared with Q4 2022, representing an operating margin of 9.2 per cent compared with 9.4 per cent in Q4 2022.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin stood at $35.1-million and 16.2 per cent, respectively, compared with $33.3-million and 15.7 per cent for Q4 2022:

• Accessibility segment: Adjusted EBITDA and adjusted EBITDA margin stood at $28.7-million and 16.5 per cent, respectively, compared with $27.0-million and 16.2 per cent for Q4 2022.
• Patient care segment: Adjusted EBITDA and adjusted EBITDA margin stood at $7.9-million and 18.3 per cent, respectively, compared with $7.0-million and 15.3 per cent for Q4 2022.

12-month results -- year to date (YTD) 2023 compared with YTD 2022

Revenue

The corporation generated revenue of $837.0-million, up $47.9-million or 6.1 per cent. The increase is mainly due to organic growth of 6.7 per cent and a positive foreign exchange impact of 3.2 per cent. The growth was partially offset by the aforementioned divestiture.

Operating income

Operating income was $72.2-million, up $8.2-million or 12.8 per cent, representing an operating margin of 8.6 per cent compared with 8.1 per cent in 2022.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin stood at $130.1-million and 15.5 per cent, respectively, compared with $120.2-million and 15.2 per cent in 2022.

Liquidity and capital resources

Savaria generated $78.6-million of cash from operations, which was primarily used to invest in capital projects, repay debt, and pay interest and dividends.

As at Dec. 31, 2023, the corporation had a net debt position of $269.9-million and a ratio of net debt to adjusted EBITDA of 2.07, compared with 3.07 as of Dec. 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 health care infrastructure.

In 2023, the corporation started Savaria One, its multiyear, 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 selling, general and administrative (SG&A) expenses.

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 adjusted EBITDA margin of 20 per cent.

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 $5.0-million 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. The company 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 KPI (key performing 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 upcoming regulations.

About Savaria Corp.

Savaria 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 (United Kingdom, 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 news 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 the 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 with 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 (management's discussion and analysis), which is posted on Savaria's website and filed with SEDAR+. A reconciliation of adjusted net earnings and adjusted EBITDA with net earnings is presented in an attached table.

Results webcast and conference call on March 7, 2024, at 8:30 a.m. EST

Savaria will host a conference call on Thursday, March 7, 2024, at 8:30 a.m. Eastern Standard Time, with financial analysts to discuss results of the period ended Dec. 31, 2023. Investors and members of the media are invited to participate on a listen-only basis.

Conference call access

Register on-line.

A webcast will be available.

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

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