Savaria (SIS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 1.7% year-over-year to CAD 213.6 million, driven by organic growth, favorable FX, and the Matot acquisition, partially offset by divestitures.

• Adjusted EBITDA rose 21% to CAD 41.7 million, with margin reaching 19.5%, the highest to date and nearing the 2025 target of 20%.

• Net earnings were CAD 13 million or CAD 0.18 per diluted share, up from CAD 12.1 million or CAD 0.18 per share last year.

• Strategic initiatives under Savaria One continue to drive operational improvements and efficiencies.

• North America showed robust growth, while Europe focused on margin improvement, and patient care segment maintained a healthy backlog despite flat sales.

Financial highlights

• Gross profit increased 9% to CAD 79.1 million (37% margin), up from CAD 72.6 million (34.5%) a year ago, reflecting improved pricing and lower material costs.

• Operating income rose 6.9% to CAD 22 million, with margin at 10.3% versus 9.8% last year.

• Adjusted net earnings grew 34.2% to CAD 17 million; adjusted EPS up 26.3% to CAD 0.24.

• Year-to-date revenue up 3.9% to CAD 644.4 million; YTD adjusted EBITDA up 24.6% to CAD 118.4 million.

• Cash from operating activities increased to CAD 35.8 million, up from CAD 25.3 million last year.

Outlook and guidance

• No formal 2024 guidance provided; focus remains on achieving CAD 1 billion revenue and 20% Adjusted EBITDA margin by 2025, supported by Savaria One initiatives.

• Strong demand, macroeconomic tailwinds, and Savaria One progress support a positive outlook.

• Anticipates continued organic growth of 8%-10% and further margin expansion, with new product launches and sales initiatives planned.

• Ongoing focus on sales growth, pricing optimization, and operational improvements.

• Plans for continued tuck-in acquisitions to offset lost revenue from divestitures.