K-Bro Linen (KBL) investor relations material

Executive summary

• Q2 2026 revenue reached CAD 150.4 million, up 33% year-over-year, driven by strong healthcare and hospitality performance and the Stellar Mayan acquisition.

• Adjusted EBITDA rose 25.6% to CAD 29.8 million, with adjusted net earnings increasing to CAD 10.1 million.

• The integration of Stellar Mayan is progressing, with 40% of targeted synergies achieved and further cost synergies anticipated over the next 12–24 months.

• Healthcare segment now represents 58% of total revenue, up from 51% in 2025.

• Management maintains a positive outlook for Canadian and UK operations, supported by steady volume trends and strategic growth opportunities.

Financial highlights

• Healthcare revenue surged 49.6% to CAD 86.6 million; hospitality revenue increased 15.4% to CAD 63.7 million year-over-year.

• Adjusted EBITDA margin was 19.8%, down 1.2% year-over-year due to cost structure changes.

• Adjusted net earnings: CAD 10.1 million, up from CAD 7.8 million in Q2 2025.

• Distributable cash flow: CAD 14.7 million; payout ratio: 26.6%.

• Dividend paid: CAD 0.3 per share (total CAD 3.9 million); 58,039 shares repurchased for CAD 2.5 million.

Outlook and guidance

• Combined adjusted EBITDA margins expected to remain at seasonally adjusted historical levels, with UK margins lower due to Stellar's profile.

• Diesel price volatility expected to impact margins by 0.5% for the remainder of 2026; no new hedges entered for diesel or natural gas since Q1.

• Capital spending for 2026 is guided at CAD 20–22 million, including Stellar Mayan integration investments.

• Organic growth and M&A remain strategic priorities.

• Management expects steady growth in healthcare activity and solid hospitality demand.