Q1 2021 Savaria Corp Earnings Call
Good morning, My name is Stacey and I will be your conference operator today at this time I would like to welcome everyone to the severity of corporations Q1, 2021 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press. The pound key this call may contain forward looking statements, which are subject to the disclosure statement contained in severity as most recent press release issued on May the 11th.
2021 boy with respect to the Q1 2021 results. Thank you. Mr. Bourassa you may begin your conference.
Thank you Stacey.
So our margin what everybody in a period that debt to present to you okay.
Q1, with my guys My guys are confidential E C.
And the Guy.
Let them experience on acquisition, but he unbilled AR.
Sitting there, okay, and the patient and bank debt, you Carlo and I bet and the Guy who integration.
My son, the share that but yeah. So they would've had zero you can call James has directly the answer to that or if not a gambler that referred to through my speech at ECP.
But what are you baking center to present UQM why I am excited that I think would make a major acquisition with and again that's a.
With us on this but to get to due to sepsis that day.
And we have done that the people are in the queue.
Cause here, where sales will keep big history, our EBITDA adjusted EBITDA beat the street, so well and.
And you will see that debt will continue okay throughout the year. So we have the next day and that's important when you make a major acquisition if he chooses to have a good start and we have a great. Okay and then the people I repeat if either people are enthusiastic to work with US. We are that's directly in person, but we would make that other piece.
Look it from a from a scanner.
And they are a great people and they want to focus which are so good to have it.
Same golar to have the people.
Major projects for our people.
Nation, so and it is.
Accurately say all market, which I bet, Okay, I think that's a.
Great logo update that the net.
Many people many old people they want to stay at home they want to stay at all.
So.
My people and work hard to.
Thanks to my people and my people, who are in the acquisition of <unk>.
The people, okay that we maybe.
Maybe I could just didn't work very hard to keep we are on the same page and imagine one thing okay.
We are lucky span, we have get Evansville, we add them together and we have Saverio Hill is not just a day and you get somebody up you know, that's and you cannot P and with the the projects with Gilead submitted span okay.
With the patient and then it would be tremendous what we will do for North America and just the vision. We don't we don't have to forget that the game and after that that day.
We have the debt oven therapy that they are in Europe, we would try to be to make some cross setting with the NCI and well be ready to.
That's okay with them to get in get them into some projects.
So.
Like what they get stitches have company, Okay. If I can.
Three I can lucky that is very very very important to make success is products territory people you can see if you want people to furnish me is is it three.
Quite important and that's exactly what we have with this key acquisition.
So it's from the result would be there for sure day result.
Offsetting our products are tier two to two and again it would be more in the 'twenty two but we already begin debt book deal and the cross selling so.
It's great and we had $1 eight.
See before we retire it appears so Sebastian does get too excited.
But I will stay at least until 'twenty 'twenty five of pay to meet my personal goal and the personal book might.
People are looking to reach 1 billion net sales will be by 2025 for.
Oh sure it would take okay. Good good day.
Internal book that we can do it because we're in better position than ever to make until enduring growth and maybe some little acquisition here and there to make other with some complement so I am very excited but it's time to dig into your question and it doesn't take very much to be down okay, and I read some of the some people this morning.
About two what do you think about our Q and in the future. We see some the upgrade from from some broker. Thank you very much IP and our success is the success of my analyst too.
We already took protocol.
So you see margin.
Marshall do you want me to give the financial update Oh, Yeah, Yeah, absolutely absolutely.
Net debt USD.
Thanks, Marcel and good morning, everyone I'm going to begin with some remarks regarding our Q1 2021 consolidated financial metrics.
For the quarter. The corporation generated revenue of $112 1 million up $23 7 million or 26, 8% compared to Q1 2020, mainly due to the acquisition of <unk> on March four 2021.
Gross profit and gross margin stood at $38 9 million or 34, 7%, respectively compared to $30 1 million and $34 one per cent for Q1 2020.
The increase in gross profit over prior year was attributable to the acquisition of panic here as well as a favorable product mix.
Adjusted EBITDA and adjusted EBITDA margin stood at $17 3 million and 15, 4%, respectively compared to $12 4 million and 14% in Q1 2020.
The increases in adjusted EBITDA and adjusted EBITDA margin were mainly attributable to the acquisition of Andy Kerr as previously mentioned as well as $1 1 million in COVID-19 employment retention government of Canada subsidies received during Q1 2021 as.
As well as continued cooperation wide cost containment efforts.
Now I'll move on to our segment results revenue from our accessibility segment was $80 6 million in Q1, 2021, an increase of $18 million or 28, 7% compared to Q1 2020.
The increase in revenue was mainly attributable to the acquisition of hand care, which contributed an increase of 34% while organically revenues contracted 4% and foreign currency also had a negative impact of approximately 1%.
The contraction in revenues as the consequence of the economic slowdown caused by the global pandemic impacting the entire first quarter of 2021, while having a minimal impact last year in Q1 2020.
Adjusted EBITDA and adjusted EBITDA margin, both before head office costs stood at $13 9 million and 17, 2%, respectively compared to $10 4 million at $16 five per cent for Q1 2020 improvements in both metrics were due to the acquisition of a tangent here.
Revenue from our patient handling segment was $25 $5 million per the year, an increase of $4 5 million or 21, 5% when compared to Q1 2020.
The acquisition of Panty care contributed 29, 5% of growth, while organically revenues contracted 4% and foreign exchange had a negative impact of almost 4%.
Adjusted EBITDA and EBITDA margin, both before head office costs.
Stood at $3 7 million 14, 5%, respectively, compared to $2 5 million and 11.9% for Q1 2020.
Increase in both metrics was mainly due to the acquisition plan to care.
Revenue generated from the adapted vehicle segment was $6 million.
Of $1 2 million or 24% when compared to the same period in 2020.
Adjusted EBITDA and adjusted EBITDA margin, both before head office costs finished at <unk> 6 million and 10, 4%, respectively compared to effectively nil EBITDA in Q1 2020.
The increases in revenue and EBITDA adjusted EBITDA margin when comparing Q1 2021 to Q1 2020, we're again, mainly due to the acquisition of Andy care as well as the Canadian emergency wage subsidy is received.
Now turning to some financial liquidity metrics during the quarter. The corporation increase its debt level as a result of financing they hinder care acquisition on a pro forma.
Trailing 12 month basis, the corporation's debt to adjusted EBITDA show at March 31, 2021 was three five times.
The Corporation expects strong cash generation to continue and coupled with additional available financing continued discipline in terms of working capital management and capital expenditures. Our corporation has ample liquidity to fund future projects and investments.
Looking ahead, although it remains difficult to quantify the continued impact of the current pandemic accurately based on the results of Q1 2021, coupled with the corporation's confidence in the strategic integration plan with Andy care that is underway and strong underlying long term growth fundamentals for our markets.
Management estimates vary.
Management anticipates the corporation will be able to achieve an adjusted EBITDA in excess of $100 million during fiscal 2021.
And with that this completes my prepared remarks, Marcel and I will turn the call back over to you.
And Steve Thank you very much very well done and.
It's always more easier for you and we have good numbers, but at least that.
Dan very good in your presentation.
So then we go to some questions.
As a reminder, if you would like to ask a question that is star followed by the number one on your telephone keypad. Once again that is star one.
Your first question comes from Derek Lessard from TD Securities.
Yes, good morning, everybody and congratulations on the quarter.
Obviously, so I'd like to talk maybe about some any commodity labor.
Or inflation pressures within your businesses that you are seeing and maybe if you are seeing knows some of your mitigation efforts there.
Yeah, that's why I'm, saying that okay, but Sebastian you want to answer that one.
Good morning, direct so yes, there's inflation I can't I would say.
Any other industry right now from the electronics this team that will be the phone transfer.
Transportation cost so maybe for the year, we could maybe see a 10% penetration in defense.
Bart says supply what that think different times during the year LTA Each division, we make sure we pass from price increases and our customer. So as an example, if we get a 10% inflation during the year, who might pass a 5% increase from a customer. So you might see some small noise from one quarter to the other but they've been given the long term, we should be able to keep the same amount margins.
And don't forget one thing we're quite vertically integrated.
China to turn around to different play.
Are you, saying on organizations or whenever a day as inflation, we tried to other counter project that maybe we can make some same thing maybe we can start to be more vertical integrated onto long term married we shouldn't be worried about that.
So Paul let's say, 10% inflation, you don't want it.
Do you expect to offset it either through price increases or through through.
Internal.
Initiatives.
Exactly and I think we could see up to 10% during the year I didn't have to say we were exactly right not 10% book differently, we are able to adapt to our business model.
Okay. Thanks.
Maybe now that you've had some time.
With time to care now under your under your belt. Just wondering if you guys have been able to identify and maybe some other areas or other synergy opportunities that perhaps you didn't see during your initial due diligence.
Yes, yes for therapy for me Oaky don't forget.
Okay.
Okay and in other.
Our country.
And with some other dealer than debt, we have okay, but.
Beginning with <unk> or would just mentioning about the K you knew about the salaries per case rates, then if growth certainly okay.
Now, we see a which span okay, who can then have a good mix of this project compared with the debt Division in North America.
And we add the.
We have.
Yeah, Okay that we can work together, okay and to cover more territory in Europe, and what is important okay.
Seeing that before.
We see right now debt.
Okay do you have very strong okay. So we'll learn from them. Okay. That's good okay. When you partner LP run just not one side you have to listen to the other side.
So we can earn okay that day.
Would the people down there okay.
Peter Aquino, who runs it.
The prediction.
We can learn a lesson genesee and be better of what we do right now.
So all their equipment and then use it for.
Sure.
Laser welding robots, Nicky I think they are better than that okay. That's good to meet somebody they're better than half a day.
And we'll share how can we learn on marketing.
The Nok web channel is in charge of it.
Getting in sales.
I think she said that debt. She is very good okay. So we don't market to two.
Meeting my Guy so that he can explain that debt incurred debt with data, but we have meetings with them every week.
Defendant subjected day and web Subcommittee that you will go with DP.
One subject, so so and so we learn debt it would be better than what I was thinking at the beginning.
Thanks for that Marcella, congratulations again and I'll re queue.
Thank you very much.
Your next question comes from Frederic Tremblay from day to Orient.
So what is it.
From my first instead, so plenty of momentum.
Let's see.
From myself on your your revenue target of $1 billion by the end of 2025 can you share your vision as to how the profile of per very I mean involved to get there. We will look up and you continue to expand geographically or will that add new product.
Oh, you know.
Okay.
What we know right now okay.
Example, medical to add around the world that we're in a day or indeed, our kind of products. Okay.
But really it.
Push that debt, we can be better and better in North America with the new products that day to day.
One of the King in that project the straight into <unk>.
And I think in Europe, Okay. It would be a good complement okay. What is doing GAAP at yet I've entered on debt.
And they have one manufacturer in China, when they play through in China.
So we don't sell a lot they don't tell it up in China, That's a great territory, okay and debt to EBITDA and our traffic to bring our curves sell live hockey Aldi equipment debt we will.
With belt located directly in China sales to this market.
What is important on the Thursday.
Many days it takes you to.
Bring debt to the consumer the consumer when they are ready to value. The I already by now it's Y if day indoor outdoor and Sebastian Thank God.
That will have a P value.
This year, Okay working equipment, okay. The same debt they have done that in Europe that will be in Toronto update for the North American market.
I would say, it's very thinking okay, and when you do domestically it was more or less of merge magic.
New things that need to beat this $1 billion to do that do that sooner.
Yes, we can find other other.
But I think we have a super right now super products, when we see a dealer okay. Nobody nobody in the world can offer all our projects at the same day.
It's something you alluded to it already Seattle, you know by the way I think we have debt debt that we have the Union did you. This is a great project to Sam and the team of <unk>.
Dan is right behind us the PD lab, this Friday, but it it takes time of pizza.
Hello.
Our stent lift in sales.
Veolia per gate, two different products, okay, So, but day, one and twos he asked about that.
I think we will push debt then we would see some great number coming from from Europe. Okay. On this Julien just released this project's outstanding Nobody's done.
Similar than that so I'm quite excited.
Great. Thank you.
And for Nick.
Patient handling side can you just maybe provide your.
Updated thoughts or views on how the debt.
Demand environment is shaping up there in terms of access to facilities.
We saw that the organic growth declining in this segment was the was less severe in Q1, so is that a sign that.
Things are starting to improve on the on the demand side from that payment.
Thanks, Brad I would say the short answer is yes.
Although it is largely dependent on geography, so many pockets of the U S. For example.
Which have reopened we are in the process of reopening.
Notably in the South for example.
However, there are other regions that remain closed.
So, including Canada, and I guess, many parts of Canada.
So just Ontario.
But that being said I think we had a very strong month of March it was a very strong not only for free hand care, but also for span and so I think that kind of bodes well and gives us a lot of positivism as we kind of moving to into Q2.
Some other things kind of just to think about the hospitals are coming back so that's something that.
It is good for our business in terms of the hospitals being able to.
I guess provide these elective surgeries.
Where they make a quite a bit of their profit so again.
Profits more or means of investments in capital equipment and the like.
Just a little anecdotal little piece of news our head of sales Clyde. He was telling me when I was talking to them earlier. This week that he just the tinnitus first in person trade show in over a year.
So that was great for him and for that community to get together in person. So yes, I would say Fred to go back to EBITDA was a long winded way of answering it but but I would say, yes. It is reopening.
And again, we sell debt primarily in March.
So our order intake is good the backlog is looking pretty strong and so I think we're more positive, but again still cautious like I said there are still pockets that are struggling here in Canada in particular, so cautiously optimistic let me put it that way.
Great and then maybe just a follow up to that on the maybe on the margin side 14, 5% in the quarter.
Another.
Second consecutive quarter of margin above your I.
As previously stated goal of 13% to 14% for this segment or anything here.
Any read through there for for what to expect moving forward or there was some onetime items in there.
Margin in the quarter.
You know where the margin.
Excuse me relative maybe give us.
But you would complement okay. So so I wanted to turn okay. I see that we should take a pay anyone who will be at $1 billion. We shouldn't speak okay to ask something around 65 day, that's our goal and I think with the people with great people and all of my key people in February Okay.
All around 40 years old they had somebody and it's a bit too hunger, okay, but the.
So they asked Shuang <unk> people this is people with talent.
And we find that too with our other.
Other division that would work.
With it being so.
You want to complement that the Nikola.
The one thing I would say is that.
We saw the exiting last year the margin improvement was apparent in Q3 and Q4, we had the contribution of hand care here in the first quarter, which again helps again going back to what I was saying earlier debt both of US had a very good strong month of March so that kind of definitely helped in terms of the margin contribution from panic here in the quarter.
That 13, 14%.
It is I would say, maybe the low bar right Marcellus.
You talked about 15%, yes that is where we're striving to get to.
So so again I don't know what your modeling there for the rest of the year, but again, we are positive in this segment and we should see some margin improvement there as well, especially because we work on some of the synergies that Marcel mentioned earlier between the span in the handy care teams.
Okay. Thank you very much.
Thank you for your net.
Your next question comes from Nick Agostino from Laurentian Bank.
Well go next.
Oh really.
Yes.
Questions first on the view list can you guys talk to the demand specifically within Europe.
How that product is being received in that market.
Oh, yes, okay, sebastien, whether they look at bad debt because he manufactured ethics and he can go day number I just wouldn't manufactured this year.
<unk>.
In the 2020 on many this year 21, okay coming from our annex our guidance sales located in Montreal.
The other sales men, Okay, we know day number and what we expected at the bit that day.
But we will do in a in Europe. So it's a great credits, okay and.
The margin is good okay.
On this project.
And we are in an hour.
Complete different company than other people, who offer try to offer something similar so can you just talk about your predictions about Santiago.
Let me give you a lift for Nick just to give you a rough idea of numbers last year with you would do that on a 100 units.
This year, we're probably going to go on our Washington, and the 80 units I would see my backlog of you lifted the best.
It has been since the beginning to the net marketing are part of that has been done.
A good portion of your operating especially like in Germany and Switzerland.
Hi, Ben.
90 carriers, starting to talk to their dealer in your lap.
To their direct locations. So I think it takes time, but you would see some corrections from differently. This year and 180 units what I believe is possible and we said that.
Previously that free by 2023, we'd like to be around $30 million.
So that I think we are in the right direction and now let's say every day fossil as as a big impact on all of the other.
Yeah.
There are government Oh my day rates.
So we are quite busy in the envelope segment.
Backlog is good for sure and that's how the business is good the commercial is still trailing a bit behind that from the vertical platform. When do you see that we then saw when you're only returned as total if that's just wrong segments are in this.
2021 years.
Okay and my second question on <unk>.
Good day.
Yeah.
The other students there was obviously some benefit from from handicap.
You look at your your base business before the acquisition you guys are undergoing debt restructuring, maybe just give us an update as to where that sits today.
Where do you guys think you'll exit the year when it comes to EBITDA margin on your base adaptor vehicle business.
Sebastian.
I think previously it was said that the target for the card business was 10% of EBITDA. There has been some noise in the last two years because.
Net sales went up there we havent restructure a bit so I think between the mix of just sub area.
And the current Norway, I think that 10% target from the card business are over a certain time it should be a good target for the segment of the business.
Yeah, and just to complement that the day that split so that we can see I'll tell you that it doesn't get Fannie Mae Okay. It's not easy, but if you are in a wheelchair okay.
Man, it's it's even a day.
Do you have more GP golf, okay, so but but.
We have been then okay.
That makes 10%, okay and hiking, we add some.
Some good.
Ziv, Okay to continue on decided okay and van action, Okay with what we work hard Okay and me if we can't make it 10% at all.
This division and that debt via I'm very happy.
Okay and my last question.
Regards to handicap when you spoke earlier about maybe some of the positive observations from that acquisition.
Now you've had two months to look under the Hood. There I'm wondering are there any things that caught you by surprise to the negative where maybe you feel that that activity here youre doing a better job at and you can I guess port over to handicap to improve their operation. So what anything you can go back.
To them with from the severity side.
Are you surprised at that.
We think my session okay.
That was quite a surprise, let's see that was the departure of their seat.
CFO Lucky that near year end.
And she said she went to be the CFO.
New debt, who has the rupee and she find a job lucky and that is our own town. Okay. So this is his last forever at any time of day and we understand hand, she has great cfos okay.
To transfer more responsibility for other people that we have been in UK. So.
The only thing other thing okay definitely negative all the other thing I just wanting positive.
Okay. Thank you guys.
Thank you Nick.
Next question comes from Zachary ever share from National Bank financial.
Thanks, Good morning, its actually its actually Thomas calling in per Zac.
Congrats on a strong quarter two.
Two quick ones from me.
First of all can you remind us how.
All indicators accessibility.
Dental versus versus commercial split compares to scenarios and how each end market is staring in the current reopening.
Okay. That's an interesting question.
I didn't think so and I can't give guidance yet.
This volatility to channel with children.
Children's day any ban okay.
Okay perfect.
As you know handicap accessibility segment is comprised of Sterling, So both straightened curve stair lift.
And those products are sold primarily in the residential space.
Space So in homes.
Yes, you may find in some commercial settings like maybe a community center.
But I would say that.
For our goods and purposes, you can think of that as being a residential product.
And then on the severity side.
And in a more normal environment. So I would say kind of maybe pre COVID-19. Our business was roughly spit split sorry, 50, 50 in terms of our commercial and.
Residential applications again, you have many of our platform lifts like the thin client platform lift in many of our vertical platform lifts that are more maybe a commercial oriented product and then obviously residential elevators and the stair lift that we were selling and some maybe small porch lifts are more geared towards the residential space.
And what we've seen in the past year in particular during this COVID-19 pandemic is that our residential activity has maintained and that has actually done very well.
While the commercial has lagged a bit as you know many of those reduced foot traffic for example in shopping centers in our schools being closed all of that has had a negative impact I would say on the commercial side of the business.
So maybe in the current year, it's a little heavier weighted towards residential but again going forward.
As the economies open it back up in that commercial business comes back.
We might see it tilt maybe not quite back to 50 50, but it will be closer to that.
Okay, that's fair.
Sure.
Okay. That's helpful and maybe a second one for me how does management feel about it.
M&A and the usual dividend increase given.
The company's current leverage levels.
Can you repeat quickly Europe the euro.
Your question.
Question.
Yes, absolutely. So I was wondering how management feels about the usual dividend increase.
And the M&A prospects given the current leverage.
Okay. Okay. That's a good question and that's where my Okay, you know dividends okay spot.
Our culture I wouldn't say, okay that day, we have other ways to some kind of intrigued and we always knew that in September. So you would see in September about the dividends after that the pace acquisition.
Just so that we're.
For Big company that we work with the span at Porsche and <unk> and would get Evansville.
And all of the projects that we have that same area.
Yes, it did going on around that we don't need to me to make any acquisition.
In that bucket to push this company to the $1 billion, just our four trends it's always.
Going to one theory.
Okay, and two new projects a day, we'll share our dealer okay.
We'll feel maybe some pressure to buy the Stanley from and scared to see alloys in the same family ERP and now.
Obviously, all your projects.
And Sally are social and advanced therapy.
If you are in a day window.
To visit US now we're down to one.
We are one of the best if not the best indicate degree of.
As a standard okay. So we don't need to make other acquisitions just play around.
We'll keep flared up who I tried though and just find new sales story, it's just exciting debt to EBITDA.
At the number but we have to buy this company you just somebody that no no no no no, whereas right now we are very busy and that people are very intriguing. So.
So that's our plan Okay, no acquisition of key major for sure.
Perfect. Thank you very much that's all I had thank.
Thank you.
Your next question comes from Justin <unk> from Stifel Bank.
Hi, good morning, Thanks for taking my call.
A question of clarification on the organic growth if I heard correctly. It was negative 4% overall in the quarter, but I also heard that there was some FX impact.
I guess my question is does that organic growth includes the negative headwinds from foreign exchange.
Ste.
Yes, I can take that one so it's overall a consolidated basis, the organic contraction was 5% and the accessibility and patient handling segments. It was 4%. So that's where the 4% came from and the FX impact overall on a consolidated basis was one 7%. So looking at consolidated Saverio. So those are two.
Two separate numbers and it's not the 5% does not include that one seven.
5% on an organic and 1.7 non foreign exchange.
Okay. So maybe closer to a 3% contraction that that's helpful. And then I'm just wondering when we were expecting other business to inflect as far as the organic growth coming back.
So that's at or near double digits. So BARDA has seen in the past like are we there now or is there a potential quarter upcoming where do you see that.
Potentially playing out.
Okay. Okay, I wouldn't they gets why Nike and I can you. Okay that will you will see a major change in Q2.
About organic growth.
Major change and that change that day will be a fee.
I think we can be back book and 8% to 10% just on organic growth.
To make our 1 billion, okay without the acquisition, but we will see none of which we are in the game you always see a Q2 Q2 is exciting okay. We know all the debate that they were in the middle of May I E.
The quarter, Okay. So if we're at net debt.
If we don't then are able to know exactly are quite exactly okay. No growth you do have a problem, but we don't have a problem.
So where did we see the book it just.
Mature onto the book can you say is up 60% in the April consider at from.
In April 21 of <unk> compared to April 'twenty, Okay, that's into onto that debt.
That's why it will make our money and the year.
Yeah, and Gary is very happy Okay, do you have good growth.
Any growth.
They are very busy.
So when you put that all together.
I am excited about the number okay that tool will show you in Q2.
In Q2 really appeal will average GAAP, what three months.
And we will have the threat that exhibit the battle pandemic too badly because last year Q2.
Okay. So.
And I say to my people Hey, we don't have to be the peak Q2 of 'twenty when I run that work to add right run are running about the Q2 up 19, Okay. That's the real comparison that we can do it.
But you will see that the net.
Now, we see some book growth.
Thank you.
Okay. Thank you that's very clear and then my last question is just on the cash generation is quite strong in the quarter cash from ops was a near 28 million I believe that's a record for the company. Just wondering if there was anything particular to account for that generation.
Yeah.
And isn't that Steve.
Yeah sure. So Justin just quickly we have a payable for the remaining four 6% of handy care shares that were yet to acquire we're working towards getting a best title on those and we're in the middle of the squeeze out process. So that's set up as a payable and that's where that showed up in the cash flow. So that's that $19 million is pushing that that 27.
Higher so that's something that we're not going to see that continue.
Got it sorry, what was the other mill that was in the tables.
It's about 19 to 20 million $19 $6 million, Okay, alright, great. Thank you for taking my questions.
Thank you per day.
Your next question comes from Michael <unk> from Scotiabank.
Hey, Good morning, guys, Hey, good morning, I joined the call a little late so I apologize if some other questions are a little bit redundant, but I did hear some really interesting comments.
Just in the last couple of minutes Marcel on your comments about the organic growth I think you referenced 8% to 10%.
That doesn't necessarily get you too.
2019 level. So for Q2 is the idea that we sort of get back to above pre COVID-19 levels or is that going to take a little bit longer.
I see.
You will see that what would it be quite strong okay.
And I don't want to per I missed some things that they would not deliver okay like what share of people would beat the beat there easily be 'twenty 'twenty, let's start by debt.
Okay. Okay. It does sound like you're optimistic at least from a sequential perspective that there is improvement so.
That's that's noted.
Maybe going back to even the prior comment I understand that you don't expect to need to make any large acquisitions to get to that $1 billion in sales by 2025. So using the 2022 consensus asset for sales I mean that would imply about 10%.
Annual growth.
On a per year basis, presumably you would do some some tuck ins there as well so organic wouldn't have to necessarily be 10, but is that the right way to think about it.
Right away, but I think I get through at least two distinct debt.
Okay, Okay, no that's great.
Okay, and then maybe getting to the Nitty gritty.
And again I was late to the call.
These questions have been asked I apologize, but any way you can talk to the organic growth rate in the top line trends that youre seeing in <unk>.
Accessibility for Hendi, Kieran, if I remember correctly handy care's organic growth momentum is quite positive in the second half last year was that was that maintained so far in Q1.
Oh, yes for sure Okay. So the day they are very good Q1, okay.
And it's looking very good to have a good Q2, okay.
And if we bake everybody up to the debt and the accessibility. They access you'd be doing CFP go back book, a maybe a case for a near 10% up EBITDA will be until the end of this year and I am very optimistic with do we sit in our booking okay. Just even on the on a per Sally okay.
I work their standard.
That's okay, we see.
And programs that day more than 50 per cent and our manufacturing.
Average daily and he did the strength of free web.
Improvement So you don't expect the car.
It's the.
They are all together, okay. So you walk into any day now I know the dealer so by the way to buy to value.
Yeah, so that pushed our south of the strength and Cook and plus we have our stay at home to stay at the WOMAC as very important people are aging the aging that problem with the steps and we are saying that you have to and to help you. Okay and as always this is a beautiful industry I was interested in your industry.
Two years ago, and even I am more excited right now because you know.
They might make you a check with you with a smile.
So I guess, Robyn disappear too to be in an industry issue debt to have the people. We are our foundation was going very well we have D.
So by the end of this year, we'll have gains over a $1 million an hour.
The foundation to other people, who need some mothers day I am very very strong on helping kids kids is the future, but it's good to be able to do all of that that's a very you know you think about other people's our employee paid D D.
The day, they stay with us for years years and years.
Maybe it'd be too much but I'm very happy that the standard you have much weighted and that the success of feed that do we have that survey.
And when we have other people that they have the same spirit.
We are a day to organic growth is come back.
You would see at you too.
That's great that's fantastic color myself I appreciate it maybe one last question.
Are you seeing any green shoots on the commercial side.
And do you have any views on the potential incrementals from the proposed American jobs plan that calls for about 400 billion of investment in eight years for care elderly for people for.
For elderly people and disabilities.
Yeah.
So that's another good question okay.
You cut out Prs day citizens SaaS, okay. When we see that as very good themselves are very strong on construction of day in the government went to which pushed you have new encore elderly people silhouette.
Yeah.
Yeah, Yeah, maybe on the commercial side.
And talking with our dealers and and in speaking with the managers of our direct stores I mean, they're sitting on some pretty good backlog there for the commercial they're just waiting for certain projects.
I guess to get the Green light so what I would say is that as the commercial side, it's one where.
The projects haven't been lost I think it's more a question of delays I think that's how we should we should think of it and and although there's there's limited visibility I think what we were seeing from the guys in the ground is that when it does open it's more like a light switch right. I mean, that's kind of the way. It's been described to me as opposed to it being kind of a slow ramp up it'll be very fast.
We're opening them.
So that's probably the best color I can give you as it relates to the commercial side and how we're seeing that.
Progress as it relates to.
Government spending it's difficult for me to sit here and talk to you about.
Binds plans in the U S and whether they're going to get past. The one thing I would say and this is both from the accessibility side and also from a patient handling side is I think that there is there is going to be.
Quite a bit of investment not only in long term care, but also as it relates to two AG can place. It is an area of focus you've seen in Europe, some of the more mature markets where.
They've realized that it's it's more cost effective to treat people in home as opposed to having them in hospitals and other facilities.
I do think that longer term, we will see some significant investment both on the government and the private side, but it's difficult for me to give you any specific numbers as to.
What that might mean for a proposal that's going through Congress at the moment.
Perfect guys. Thanks, a lot for the color and you've got a great story here.
Thank you very much.
You have a follow up question from Derek Lessard from TD Securities.
Yeah, I think that's pretty other put a follow up maybe another one Nick on the patient.
Patient handling.
I'm wondering if you're already starting to see the benefits of the change in mix away from I guess, the long term, particularly as it relates to the exposure to COVID-19.
I'm not quite sure I get.
You're asking here in terms of the the mix away from long term care.
Are you speaking of treating patients and home like home care the home care aspect of that business no I'm thinking about how how more heavily weighted.
The Ham D care was towards acute care.
And all the problems they have in long term care facilities in the U S.
Okay. The one thing I would just maybe a little difference between handy cares business and spans businesses debt.
You you're right Hendi care does have more exposure to acute care in particular in the U S. I think it's a bit more balanced here in Canada, but in the U S. It is much more lean towards acute care.
One element about handicaps products and the way. It works is that these are products that get installed so these ceiling lifts.
It's a project that requires.
Planning project management installation.
There are there sales or for new builds.
And so that's something that's a little bit different than a spin is that newbuild facilities. There aren't any patients. There. So it was much more easier to access and so then it's not necessarily a question of you restricted access to these facilities whether it be during the pandemic are in the current environment. It's just more of a question of construction site access that's more general in nature.
Because there aren't any patients in these facilities as they're getting built.
So I'm not sure if that helps to answer but that that is kind of one of the reasons why we have seen some I guess.
Some increase.
The revenue growth there has been stronger as we kind of exited the pandemic period, because they have had that exposure to certain.
Whether it be the acute care space surgeries coming back as I mentioned earlier and also as it relates to these new builds where there aren't any patients. So it's much more easier to access the facility as economies are opening up.
No. Thanks.
That's helpful and maybe just one final one.
I'm just wondering if there's any more if you've been able to I guess see any more improvements in the handy care side from the lift up.
And if you're seeing any more benefits from the program.
So, but I can't.
Or any color I'll take that.
I will start from maybe if you can to lift that program isn't true.
We don't want to talk pretty much about it at that does that from them to being able to quickly last year. It was going to be fully rolled out by COVID-19.
Once a day, but for your benefit but now I think the biggest thing for invacare is making their budget.
Good budgets on the table from 'twenty to 'twenty one.
From a patient and named the car and the excess of beauty.
And then I think you will find that as a good start and what we're starting to see is really the mix with the cross selling with government on Europe, a really appealing client sold dealer.
We are looking at it.
And the next step and will it be really to add to the current Australia manufacturing in Toronto and then by the end of this year, we should see it and this will really help us to force them to save on the.
On some air shipping some of that guidance. We are currently at.
And that would give us a better lead time to the customer targets as two days instead of three weeks. So that will really add to put a phased wouldn't even have one appeal that crimps telephone.
The carrier in North America, but really a lift up is over now we're really working on the new synergies, which go into ancillary guidance.
So that's been very helpful. Thanks, guys.
There are no further questions in queue.
So thank you very much guys happy to be interest in Siberia, and thank you for my people with me on this call just great content again, it's nation a day and thank you very much Stacy.
You're welcome. This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
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