Q1 2026 Savaria Corp Earnings Call

May 7, 2026

Operator: Good morning. My name is Rory, and I will be your Conference Operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q1 2026 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. This call may contain forward-looking statements which are subject to the disclosure statement contained in Savaria's most recent press release issued on 6 May 2026, with respect to its Q1 2026 results. Thank you. Mr. Bourassa, you may begin your conference.

Operator: Good morning. My name is Rory, and I will be your Conference Operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q1 2026 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. This call may contain forward-looking statements which are subject to the disclosure statement contained in Savaria's most recent press release issued on 6 May 2026, with respect to its Q1 2026 results. Thank you. Mr. Bourassa, you may begin your conference.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. To ask a question during the session, please press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release, issued on May 6, 2026.

Speaker #1: With respect to its Q1 2026 results, thank you. Mr. Bourassa, you may begin your conference.

Speaker #2: Thanks, Rory, and good morning, everyone. So today I will start with a small recap of our Q1 results. Then Steve will update us on financial and GP will provide us an update on Savaria One and Europe followed by Q&A.

Sébastien Bourassa: Thanks, Rory. Good morning, everyone. Today I will start with a small recap of our Q1 results, then Steve will update us on financial, and JP will provide us an update on Savaria One and Europe, followed by Q&A. Once again, I'm very proud, and it seems that I repeat always that I'm proud, but in the last 10 years or 40 quarters, 39 out of the 40, we have beat the previous year. I think for me, it's very good proof that we sure were very consistent in our results, and with all the learning we have done in the Savaria One, I think we have create a good path for the future.

Speaker #2: So once again, I'm very proud and it seems that I repeat always that I'm proud, but in the last 10 years or four quarters, 39 out of the 40 will have beat the previous year.

Speaker #2: So I think for me, it's very good proof that we should work very consistent in our results and with all the learning we have done in the Savaria One, I think we have created a good path for the future.

Speaker #2: With sales of 235 million, up versus last year, and right away a little bit down in the first quarter of 20.4% of EBITDA, all KPI improving.

Sébastien Bourassa: With sales of CAD 235 million, up versus last year, and right away an EBITDA in the first quarter of 20.4% of EBITDA, our KPI improving. Stephen will go more in detail later. Quite happy with that. Few things that I would like to highlight today. First, thank you again for all team member at Savaria to continue to be diligent in your approach towards Savaria One, to act as a one company and continue to have a bottom-up approach to bring good idea on how can we be better. This mentality of continuous improvement is part of our DNA now, and it will continue to help us to make us better. Second, growth. We talked about that during the Investor Day a few weeks ago.

Speaker #2: So still will go more in detail later. So quite happy with that. A few things that I would like to highlight today. First, thank you again for all team members at Savaria to continue to be diligent in your approach towards Savaria One to act as a one company and continue to have a bottom-up approach to bring good idea and all can be better.

Speaker #2: This mentality of continuous improvement is part of our DNA now, and it will continue to help us to make us better. Second, growth. So we'll talk a bit during the investor day.

Speaker #2: A few weeks ago, but continue the effort to develop the market in North America for our manufacturers is a priority and we see some traction.

Sébastien Bourassa: Continue the effort to develop the market in North America for home elevators is a priority, and we see some traction. The increase of effort into the stair lift in North America continue to expand the Matot, Dumbwaiter, Material Lift lineup. The business development activity are going to continue to put us as a market leader. Expand the one-stop shop in Europe. Example, with the Luma, the VPL, and the incline lift, I think we start to see some traction. To be the partner of choice in stair lift, I think JP will talk later, we have a very good traction in Europe in the last six months, quite happy with the turnaround we have done there. Patient care, to own the room and continue to develop the long-term care, I think we have some good traction there also.

Speaker #2: The increase of effort into a stir lift in North America continues to expand the method, the weather, and material lift lineup. The business development activity are going to continue to put us as a market leader.

Speaker #2: Expand the one-stop shop in Europe. Example with the Luma, the VPL, and the incline lift I think will start to see some traction. To be the partner of choice in stir lift, I think GP will talk later but we have a good traction in Europe in the last six months, so quite happy with the turnaround we have done there.

Speaker #2: Patient care to own the room and continue to develop the long-term care. I think we have some good traction there also. And also a green building expansion to be more diversified in terms of manufacturing in North America is progressing well and the expansion should be complete in the fourth quarter this year.

Sébastien Bourassa: Also a Greenville building expansion to be more diversified in terms of manufacturing in North America is progressing well, and the expansion should be complete in Q4 of this year. Third, acquisition. As we said during the Investor Day, we have the ambition to do some acquisition in the next 5 years for approximately CAD 200 million from small to midsize. As we said earlier, we like some of our dealer distribution network, very natural. Buy some small product lineup, small manufacturer to bring some better products and to improve our one-stop shop. I think it's always a priority.

Sébastien Bourassa: Also a Greenville building expansion to be more diversified in terms of manufacturing in North America is progressing well, and the expansion should be complete in Q4 of this year. Third, acquisition. As we said during the Investor Day, we have the ambition to do some acquisition in the next five years for approximately CAD 200 million from small to midsize. As we said earlier, we like some of our dealer distribution network, very natural. Buy some small product lineup, small manufacturer to bring some better products and to improve our one-stop shop. I think it's always a priority.

Speaker #2: Third, acquisition. As we said during the investor day, we have the ambition to do some acquisition in the next five years for approximately 200 million from small, mid-sized as we said earlier, we like some of our dealer distribution network very natural.

Speaker #2: Buy some small product lineup, small manufacturer to bring some better products and to improve our one-stop shop. So I think it's always a priority.

Speaker #2: I will say with 0.92 and liquidity available of 225 million, 324, excuse me, for capital allocation and M&A, I think we're in a very good position.

Sébastien Bourassa: I will say with our net debt EBITDA ratio of now 0.92 and liquidity available of CAD 225,000,324, excuse me, for capital allocation and M&A, I think we're in very good position. To conclude, I'm quite happy with the start of 2026. As we unveiled during the Investor Day, we have the ambition to grow the business at 12% per year, a mix of organic growth and acquisition, and to maintain our margins over 20%. If we do our job, that will ultimately lead us to some sales of CAD 1.6 billion and an EBITDA of CAD 320 million, and an EBITDA per share of CAD 4.25 by 2030. Thanks again to all the employees for the effort in this new chapter of growth.

Speaker #2: So to conclude, I'm quite happy with the start of 2026. And as we all know during the investor day, we have the ambition to grow the business at 12% per year and mix of organic growth and acquisition and to maintain our margins over 20%.

Speaker #2: And if we do our job, that will ultimately lead us to some sales of 1.6 billion and an EBITDA of 320 million. And our EBITDA per share of 4.25 by 2030.

Speaker #2: So thanks again to all the employees for the effort in this new chapter of growth. Steve Financial, please.

Sébastien Bourassa: Steve, financial please.

Stephen Reitknecht: Thank you, Sébastien. Good morning to everyone on the call. I'm now gonna provide some further detail and commentary regarding our Q1 results. The key highlights for Q1 include, firstly, revenue growth of 7% over last year, driven by growth in both segments and all regions. Adjusted EBITDA margin reached 20.4% in Q1, which is especially great since Q1 is typically our seasonally weakest quarter. Lastly, our leverage ratio is now under 1 at 0.92 times. Now, looking at consolidated revenues for Q1, we generated revenue of CAD 235.5 million, an increase of CAD 15.3 million versus last year.

Speaker #3: Thank you, Sebastien. Good morning to everyone on the call. I'm now going to provide some further detail and commentary regarding our first quarter results.

Speaker #3: The key highlights for the quarter include firstly, revenue growth of 7% over last year driven by growth in both segments and all regions. Adjusted EBITDA margin reached 20.4% in Q1, which is especially great since Q1 is typically our seasonally weakest quarter.

Speaker #3: And lastly, our leverage ratio is now under one at 0.92 times. Now looking at consolidated revenues for the quarter, we generated revenue of 235.5 million and increase of 15.3 million versus last year.

Speaker #3: This is driven by organic growth of 5.7%, revenue contribution from the acquisitions of Baxter and Western Direct Stores of 0.7% and a positive foreign exchange impact of 0.6%.

Stephen Reitknecht: This is driven by organic growth of 5.7%, revenue contribution from the acquisitions of Baxter and Western Elevator Ltd. of 0.7%, and a positive foreign exchange impact of 0.6%. Our accessibility segment saw growth of 7.9% determined by strong growth in stair lifts in Europe, as well as increased sales in Canada. Patient Care achieved revenue growth of 3.8%, driven by strong organic growth of 6.5%, partially offset by a negative foreign exchange impact of 2.7% on the US dollar currency. Our consolidated gross margin for the quarter was 38.9% compared to 37.8% in 2025. Our operating income increased by CAD 11.7 million versus last year.

Speaker #3: Our accessibility segment saw growth of 7.9% driven by strong growth in stair lifts in Europe as well as increased sales in Canada. Patient care achieved revenue growth of 3.8% driven by strong organic growth of 6.5%, partially offset by a negative foreign exchange impact of 2.7% on the US dollar currency.

Speaker #3: Our consolidated gross margin for the quarter was 38.9% compared to 37.8% in 2025. And our operating income increased by 11.7 million versus last year.

Speaker #3: This is especially important to note since this demonstrates that we are continuing to improve the performance of the business post-Savaria One. The gross margin improvement is mainly driven by operating leverage improved pricing and procurement benefits.

Stephen Reitknecht: This is especially important to note since this demonstrates that we are continuing to improve the performance of the business post Savaria One. The gross margin improvement is mainly driven by operating leverage, improved pricing, and procurement benefits. Furthermore, operating income, excuse me, further benefited from the termination of strategic initiative expenses. Q1 adjusted EBITDA reached CAD 48.1 million for the quarter, representing a margin of 20.4% compared to 18.5% in 2025. That's an improvement of 190 basis points. Accessibility adjusted EBITDA margin was 22.4% versus 20.1%, so up 2.3% year over year, 230 basis points, and we saw improvements in both of our key regions. Patient care adjusted EBITDA margin stood at 19.5% compared to 18.8% last year. Moving on to finance costs.

Speaker #3: And furthermore, operating income—excuse me—further benefited from the termination of strategic initiative expenses. Q1 adjusted EBITDA reached 48.1 million for the quarter, representing a margin of 20.4% compared to 18.5% in 2025.

Speaker #3: That's an improvement of 190 basis points. Accessibility adjusted EBITDA margin was 22.4% versus 20.1, so up 2.3% year over year, 230 basis points. And we saw improvements in both of our key regions.

Speaker #3: Patient care adjusted EBITDA margin stood at 19.5 compared to 18.8 last year. Moving on to finance costs, they were 3.1 million for the quarter compared to 3.5 million last year.

Stephen Reitknecht: They were CAD 3.1 million for the quarter compared to CAD 3.5 million last year. Interest on long-term debt decreased by CAD 1.2 million due to an overall lower debt balance and decreased interest rates. We also had impact from an unrealized foreign currency loss of CAD 0.4 million this year versus a gain of CAD 24 million last year, causing a CAD 800,000 year-over-year swing. Net earnings were CAD 22.7 million for the quarter, compared to CAD 12.5 million last year, representing an increase of 82%. Correspondingly, EPS reached CAD 0.31 for the quarter versus CAD 0.17 last year. I'm now gonna provide some comments on our cash flow and balance sheet.

Speaker #3: Interest on long-term—excuse me—interest on long-term debt decreased by 1.2 million due to an overall lower debt balance and decreased interest rates. We also had impact from a foreign unrealized foreign currency loss of 0.4 million this year versus a gain of 0.4 million last year, causing an $800,000 year over year swing.

Speaker #3: Net earnings were 22.7 million for the quarter compared to 12.5 million last year, representing an increase of 82%. And correspondingly, EPS reached 31 cents for the quarter versus 17 cents last year.

Speaker #3: I'm now going to provide some comments on our cash flow and balance sheet. Cash flow from operating activities in Q1 was 35.8 million, driven by the strong net earnings partially offset by higher working capital and higher income taxes paid.

Stephen Reitknecht: Cash flow from operating activities in Q1 was CAD 35.8 million, driven by the strong net earnings, partially offset by higher working capital and higher income taxes paid. Our working capital remains healthy, while it has increased in terms of dollars, we have reduced our working capital days from last year. CapEx was CAD 6 million for the quarter, which represents 2.5% of sales. This is in line with our guidance, this includes approximately CAD 1 million for the building expansion in Greenville. We also disbursed CAD 2.1 million for business acquisitions, largely attributable to Baxter Elevator, our new direct store just outside Dallas, Texas. We have now CAD 324 million of funds available under our current credit facility as of 31 March.

Speaker #3: Our working capital remains healthy, and while it has increased in terms of dollars, we have reduced our working capital days from last year. CapEx was 6 million for the quarter, which represents 2.5 million—excuse me—which represents 2.5% of sales.

Speaker #3: This is in line with our guidance, and this includes approximately $1 billion—excuse me—for the building expansion in Greenville. We also dispersed 2.1 million for business acquisitions, largely attributable to Baxter Elevator, our new direct store, just outside Dallas, Texas.

Speaker #3: And we have now 324 million of funds available under our current credit facility, as of March 31st. And as previously stated, our leverage ratio has reduced to under one to 0.92 times.

Stephen Reitknecht: As previously stated, our leverage ratio has reduced to under 1 to 0.92 times. On 14 April 2026, at our Investor Day, we unveiled our plan for the next 5 years. Savaria targets a top-line increase of approximately 12% per year for the next 5 years, derived from organic and acquisition growth. This will bring Savaria to approximately CAD 1.6 billion in revenue at the end of 2030, while maintaining adjusted EBITDA margins of at least 20%. With that, this completes my prepared remarks, and I'll now turn the call over to JP to provide updates and details on Savaria One in Europe. JP?

Speaker #3: On April 14th, 2026, at our investor day, we unveiled our plan for the next five years. Savaria targets a top-line increase of approximately 12% per year for the next five years, derived from organic and acquisition growth.

Speaker #3: This will bring Savaria to approximately 1.6 billion in revenue at the end of 2030, while maintaining adjusted EBITDA margins of at least 20%. And with that, this completes my prepared remarks, and I'll now turn the call over to JP to provide updates and details on Savaria One in Europe.

Speaker #3: JP?

Speaker #4: Yeah. Thank you, Steve. Good morning, everyone. On April 14, we provided a lot of information on what happened in the last two years with Savaria One.

Jean-Philippe De Montigny: Yeah. Thank you, Steve. Good morning, everyone. On 14 April, we provided a lot of information on what happened in the last 2 years with Savaria One, today I'll focus on what happened in Q1 and what to expect next given what's cooking. Let me start with what happened in Q1 regarding Savaria One. If you recall, since we started the program, we had about 400 initiatives completed. Well, today we still have about 200 initiatives that are in flight. We're still very active with Savaria One, and there's more to come. In Q1 itself, we implemented about 40 new initiatives, all internally generated and internally driven. Those generated millions of dollars of new savings that will accrue to our results in the coming months. In addition, we continue momentum.

Speaker #4: So today, I'll focus on what happened in Q1 and what to expect next, given what's cooking. So let me start with what happened in Q1 regarding Savaria One.

Speaker #4: If you recall, since we started the program, we had about 400 initiatives completed while today we still have about 200 initiatives that are in flight.

Speaker #4: So we're still very active with Savaria One, and there's more to come. In Q1 itself, we implemented about 40 new initiatives, all internally generated and internally driven.

Speaker #4: So those generated millions of dollars of new savings that will accrue to our results in the coming months. In addition, we continue momentum; we continue to have the rigorous cadence of implementation across all functions and all parts of the business.

Jean-Philippe De Montigny: We continue to have the rigorous cadence of implementation across all functions and all parts of the business. We still have millions of dollars of initiatives being implemented and being worked on. In Q1 itself, when we measure our results internally and we sum up all the initiatives, we find approximately CAD 7 million of EBITDA improvement, which is also what we see in our P&L EBITDA improvement, right? We have a pretty good still accuracy of the measure we do internally and what we see in our results, which gives us great confidence that the program is still well analyzed. In terms of Q1, I have five specific highlights I thought I would share this morning in terms of what are some of the successes that fueled our results. Let me start first in Europe.

Speaker #4: And we still have millions of dollars of initiatives being implemented and being worked on. In Q1 itself, when we measure our results internally and we sum up all the initiatives, we find approximately 7 million of EBITDA improvement, which is also what we see in our P&L EBITDA improvement, right?

Speaker #4: So we have a pretty good, still accuracy of the measure we do internally and what we see in our results, which gives us great confidence that the program is still well and alive.

Speaker #4: In terms of Q1, I have five specific highlights I thought I would share this morning in terms of what are some of the successes that fueled our results.

Speaker #4: Let me start first in Europe. As you saw, we had good growth in Europe. And the biggest contributor to that, what was some wins we had with our dealer sales.

Jean-Philippe De Montigny: As you saw, we had good growth in Europe, and the biggest contributor to that was some wins we had with our dealer sales. We had some dealers returning to Savaria after not working with us for a few years. We had some new wins. Most importantly, we had some large dealers that shifted a large share of their wallet towards us. The main reasons they did that is the overall value proposition is very strong. What I mean by this is the quality of our products keeps improving. We have competitive prices because we have a competitive supply chain in the first place. We have, we are a reliable supplier with short lead times and, you know, we deliver on our promise. We have good freight partners, for example.

Speaker #4: We had some dealers returning to Savaria, after not working with us for a few years. We had some new wins, but most importantly, we had some large dealers that shifted a large share of their wallet towards us.

Speaker #4: And the main reasons that did that is the overall value proposition is very strong. What I mean by this is the quality of our products keeps improving.

Speaker #4: We have competitive prices because we have a competitive supply chain in the first place. We have we are reliable supplier, with short lead times and we deliver on our promise.

Speaker #4: We have good freight partners, for example. And finally, we have what is known to be the best measurement tool in the industry for everything about stair lifts and platform lifts.

Jean-Philippe De Montigny: We have what is known to be the best measurement tool in the industry for everything about stair lifts and platform lifts. Our overall value proposition is very strong, and our dealers are recognizing this and doing more and more business with us. The second highlight for me was the bed business. We make our long-term care beds in Beamsville, and what happened is, in the last two years, we made a lot of efforts to improve our operations, to deploy lean practices, to do Kaizens in the factory, but also to make versus buy decisions. We used to make a lot of things in-house in Beamsville, and now we started to leverage our global supply chain to manufacture some parts so we can have more freed up capacity in Beamsville.

Speaker #4: So I think our overall value proposition is very strong, and our dealers are recognizing this, and doing more and more business with us. The second highlight for me was the bed business.

Speaker #4: So we make our long-term care beds in Beamesville, and what happened is, in the last two years, we made a lot of efforts to improve our operations, to deploy lean practices, to do Kaizens in the factory, but also to make versus buy decisions.

Speaker #4: So we used to make a lot of things in-house in Beamesville, and now we started to leverage our global supply chain to manufacture some parts.

Speaker #4: So we can have more freed up capacity in Beamesville. Well, that was very timely and useful in Q1 because, in Canada, there were a lot of public tenders in the last couple of months, and we win one number of them.

Jean-Philippe De Montigny: Well, that was very timely and useful in Q1 because in Canada, there were a lot of public tenders in the last couple of months, and we won number of them. The fact that our factory was now more efficient and had more capacity allowed us to increase sales materially, and our Beamsville facility is now performing extremely well. Another highlight for us was the direct stores in North America and Europe. Our direct stores are doing really well, and there are pockets of excellence. For example, Australia is really growing fast as an office, and we expanded recently to a new location. Also, the UK has always been a large direct store for us in Europe, and now the UK, thanks to our efforts in the last years, is really performing well in terms both of profitability but also growth.

Speaker #4: So the fact that our factory was now more efficient and had more capacity allowed us to increase sales, materially, and our Beamesville facility is now performing extremely well.

Speaker #4: Another highlight for us was the direct stores in North America and Europe. Our direct stores are doing really well, and they are pockets of excellence.

Speaker #4: For example, Australia is really growing fast as an office, and we expanded recently to a new location. Also, the UK has always been a large direct store for us in Europe, and now the UK, thanks to our efforts in the last years, is really performing well in terms both of profitability, but also growth.

Speaker #4: We're innovating with our marketing strategies, our sales force is more effective than ever, and our field engineers are more efficient. And they've ever been in the past.

Jean-Philippe De Montigny: We're innovating with our marketing strategies. Our sales force is more effective than ever, and our field engineers are more efficient than they've ever been in the past. We're doing really well in our direct stores, and on top of that, we had some acquisitions like Western that happened last year that is adding to our results. Another one for us is Matot. About 2 years ago, we acquired Matot, and that was really a great example of a well-executed but, you know, it took time integration. The first thing that happened is we had to integrate the operations and actually close the Matot factory and really internalize it in Brampton. That took a lot of time and effort from our engineering team and our operations team in Brampton.

Speaker #4: So we're doing really well in our direct stores, and on top of that, we had some acquisitions like Western that happened last year that is adding to our results.

Speaker #4: Another one for us is Maytot. So about two years ago, we acquired Maytot, and that was really a great example of a well-executed but it took time, integration.

Speaker #4: So the first thing that happened is we had to integrate the operations and actually close the Maytot factory and really internalize it in Brampton.

Speaker #4: So that took a lot of time and effort from our engineering team and our operations team in Brampton, but now we're able to produce Maytot dumbwaiters at a good rate, and we actually reduced the lead times to make those units versus what Maytot used to have in the past.

Jean-Philippe De Montigny: Now we're able to produce Matot dumbwaiters at a good rate, and we actually reduced the lead times to make those units versus what Matot used to have in the past. We have a better value proposition to the market. In parallel, last year, we made a lot of efforts in our commercial team to advertise and to explain what the Matot value prop is to our dealers, but also to specifiers and architects. What we see now is the order intake for Matot is very strong, and we're able to grow that business. That's, for us, a great success, and we intend to keep building on it. The last one that we wanted to share this morning is Ultron.

Speaker #4: So we have a better value proposition to the market. And in parallel, last year, we made a lot of efforts in our commercial team to advertise and to explain what the Maytot value prop is to our dealers, but also to specifiers and architects.

Speaker #4: And what we see now is the order intake for Maytot is very strong, and we're able to grow that business. So that's for us a great success, and we intend to keep building on it.

Speaker #4: Finally, the last one that I we wanted to share this morning is Ultron. So as you probably know, we have our own in-house electronics let's say business unit that has the expertise to design power circuit boards, but also so what this does for us is we can both reduce our costs because we're able to redesign some of our power boards across the different product range, but also when they are emergencies or crisis, and you may read in the news that there's shortages of chips and stuff like this, well, we have the expertise in-house to, first of all, make sure we buy in advance and stock in advance, but also when there are shortages, we can substitute parts.

Jean-Philippe De Montigny: As you probably know, we have our own in-house electronics, let's say, business unit that has the expertise to design power circuit boards. What this does for us is we can both reduce our costs 'cause we're able to redesign some of our power boards across a different product range. When there are emergencies or crisis, and you may read in the news that there are shortages of chips and stuff like this, well, we have the expertise in-house to first of all, make sure we buy in advance and stock in advance, but also when there are shortages, we can substitute parts. We've been pretty much protected from all these different difficulties that maybe some of our competitors have because we have this, our own electronics department.

Speaker #4: So we've been pretty much protected from all these different difficulties that maybe some of our competitors had because we have this our own electronics department.

Speaker #4: So these are some of the highlights from Q1. Now, what's still being worked on for Q2? That's material for us. First, we just launched our website in North America, and we're very proud of it.

Jean-Philippe De Montigny: These are some of the highlights from Q1. What's still being worked on for Q2 that's material for us? First, we just launched our website in North America, and we're very proud of it. We think it's a great website because it's also designed to optimize for our search engines, but also for AI search. We're working on replicating that in Europe, so that's very important for us in Q2. Also, we continue to make efforts in Europe to cross-sell our different products. We are largely a stairlift business in Europe, and now we're making real efforts to develop our platform business outside of Italy, which is the core.

Speaker #4: We think it's a great website because it's also designed to optimize for search engines, but also for AI search. Now we're working on replicating that in Europe.

Speaker #4: So that's very important for us in Q2. Also, we continue to make efforts in Europe to cross-sell our different products. So we are largely stair lift business in Europe, and now we're making real efforts to develop our platform business outside of Italy, which is the core.

Jean-Philippe De Montigny: In North America, one of our focuses is the construction in Greenville, which is very strategic for us, not just because of the space, but also the different capabilities we'll have in-house once that is built. Another one in patient care is the innovation. You may have heard during the investor day, but we have a lot of new product innovations that are important to grow the business. In the past, we developed a new ceiling lift lineup with the M-Series. Now we just launched a new APM surface bed essentially, a mattress, sorry. Now we're about to finalize the new bed lineup. Beamsville is not only doing great today, but it will have new beds to sell, which are more modern, more interesting for the patients and for their caregivers.

Speaker #4: In North America, our focus is one of our focuses is the construction in Greenville, which is very strategic for us, not just because of the space, but also the different capabilities we'll have in-house once that is built.

Speaker #4: Another one in patient care is the innovation. So you may have heard during the investor day that we have a lot of new product innovations that are important to grow the business.

Speaker #4: So in the past, we developed a new ceiling lift lineup with the M series. Now we just launched a new APMI surface bed, essentially, a mattress, sorry, and now we're about to finalize the new bed lineup.

Speaker #4: So Beamesville is not only doing great today, but it will have new beds to sell which are more modern, more interesting for the patients and for the caregivers.

Speaker #4: Finally, in Europe, we have a number of product launches at the moment. So we are launching a new straight stair lift in the coming weeks or days, and we also have field trials for a number of different products, including platform lifts and stair lifts.

Jean-Philippe De Montigny: Finally, in Europe, we have a number of product launches at the moment. We are launching a new straight stairlift in the coming weeks or days. We also have field trials for a number of different products, including platform lifts and stair lifts. There's a lot happening still in Q2, and we're optimistic that this is gonna help us continue to fuel growth. In conclusion, as you probably saw, Europe had a very strong Q1 because of some of these reasons I just mentioned. We also had a good jump in profitability. That is both due to the efficiency initiatives we drove in the past, but also the fact that we have some operating leverage with the growth. I think one of the reasons we're successful is that our factories are able to follow.

Speaker #4: So there's a lot happening still in Q2, and we're optimistic that this is going to help us continue to fuel growth. In conclusion, so as you probably saw, Europe had a very strong Q1 because of some of these reasons I just mentioned.

Speaker #4: We also had a good jump in profitability, that is both due to the efficiency initiatives we drove in the past, but also the fact that we have some operating leverage with the growth.

Speaker #4: And I think one of the reasons we're successful is that our factories are able to follow. So we had very good order intake in Q1, but what's great is that our factories were able to increase the throughput because there are more efficient and more effective than before.

Jean-Philippe De Montigny: We had very good order intake in Q1, but what's great is that our factories were able to increase the throughput because they are more efficient and more effective than before. We're very, very good momentum in Europe in conclusion. All this to say, I think we have good tailwinds overall as a business. We have a lot of initiatives in the hopper. Some were recently implemented, some are still to be implemented, but we see a good momentum, and we're looking forward to see the results in the coming months. Thank you. Closing word for you, Sébastien.

Speaker #4: So we're very yeah, good momentum in Europe, in conclusion. I'll just say I think we have good tailwinds overall as a business. We have a lot of initiatives in the hopper, some were recently implemented, some are still to be implemented.

Speaker #4: But we see good momentum, and we're looking forward to see the results in the coming months. Thank you, closing words for you, Sebastien.

Sébastien Bourassa: Yeah. Thank you, JP. Very exciting. I guess, Ramy, we are ready for some questions.

Speaker #3: Thank you, GP. Very exciting. So I guess, Rory, we are ready for some questions.

Speaker #4: Thank you. At this time, we will conduct the question-and-answer session. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Cheryl Zhang of TD Cowen. Please go ahead.

Speaker #4: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Cheryl Zhang, of TD Cowen.

Speaker #4: Please go ahead.

Cheryl Zhang: Hey, good morning, Sébastien, Steve, and JP. Great to hear from you. Thanks for taking my questions.

Speaker #5: Hey, good morning, Sebastien, Steve, and JP. Great to hear from you. Thanks for taking my questions.

Speaker #6: Good morning.

Sébastien Bourassa: Morning.

Cheryl Zhang: Morning. My first question is on the accessibility segment. I'm curious that in the MD&A, you mentioned that increased bookings in Canada, what's driving that? Is there any notable changes in demand from consumers or from dealers?

Speaker #5: Morning. So my first question is on the accessibility segment. I'm curious, in the MDNA, you mentioned the increased bookings in Canada. What's driving that?

Speaker #5: Is there any notable changes in demand from consumers or from dealers?

Sébastien Bourassa: A good question. Again, I think it's always difficult when we look at this from one quarter to the other. You know, we are there for the mid, long term. For sure in Canada, we have a new baby, which is Western. Now it's part of the results, so you see a bit of the results in Canada. Also now we have been doing quite good in term of housing, home elevators. I think that's continuing to go well.

Speaker #6: Good question. So again, I think it's always difficult when we look at this from one quarter to the other. We are there for the mid-long term.

Speaker #6: For sure, in Canada, we have a new baby, which is Western. That's part of the results. So you see a bit of the results in Canada.

Speaker #6: But also, no, we have been doing quite good in terms of housing, home elevators. So I think that's continuing to go well.

Speaker #5: Okay. Thank you. And then on patient care, UK business is still small, but could you highlight what's driving the increased sales there?

Cheryl Zhang: Okay. Thank you. Then on patient care, UK business is still small, could you highlight on what's driving the increased sales there?

Sébastien Bourassa: Okay. Yeah. Definitely, Barry, thanks for asking. Patient care in UK and in Europe, no, I think we have been very long time historically that we are Silvalea with manufacturing some sling. That's something we have expanded on the one-stop shop, okay? To be able to offer some ceiling lifts, some okay. I think the team of Gary and Silvalea is doing quite well and they're expanding their territory. I think, no, I think we'll continue to see some good growth over there. Also, we have been able to list across our sales offering on some different organization like NHS contracts. I think that has helped also the growth. Okay. Maybe just follow up on the NHS contract.

Speaker #6: Yeah. So definitely, Billy, thanks for asking. So patient care in UK and in Europe, no, I think we have been a very long time historically that we are silverly with the manufacturing some sling, but that's something we have expanded on the one-stop shop to be able to offer some ceiling lifts, some RS, and I think the team of Gary in Sylvania is doing quite well in expanding the territory.

Speaker #6: So I think, no, I think we'll continue to see some good growth over there. And also, we have been able to list our sales offering on some different organizations like NHS contracts.

Speaker #6: So I think that has helped also the growth.

Speaker #5: Okay. And maybe just follow up on the NHS contract. I wonder if you can share a little bit about what's the length of the contract and what the scope is looking like?

Cheryl Zhang: Okay. Maybe just follow up on the NHS contract. I wonder if you can share a little bit about, like what's the length of the contract and what the scope is looking like?

Sébastien Bourassa: I wonder if you can share a little bit about, like what's the length of the contract and what the scope is looking like? I think, sorry, Charles, I think on that again, it's multiple years listing. We are listed in many different contract across the, across the world, in North America, Europe. I think we don't disclose on first 2 years contract one by one. That's a very positive thing that we have been listed. That's opening the eyes for more sales in Europe, in UK. Thanks very much. I'll queue. Thank you.

Speaker #6: Normally, I think sorry, Cheryl, I think on that again, it's multiple years listing, but we are listed in many different contracts across the world, in North America, Europe.

Sébastien Bourassa: I think, sorry, Charles, I think on that again, it's multiple years listing. We are listed in many different contract across the, across the world, in North America, Europe. I think we don't disclose on first 2 years contract one by one. That's a very positive thing that we have been listed. That's opening the eyes for more sales in Europe, in UK.

Speaker #6: So I think we don't disclose them for three years contract one by one. But no, that's a very positive thing that we have been listed.

Speaker #6: That's opening the eyes for more sales in Europe. UK.

Speaker #5: Okay. Thanks very much. I'll read you.

Cheryl Zhang: Thanks very much. I'll queue. Thank you.

Speaker #6: Thank you.

Speaker #4: Thank you. One moment for our next question. Our next question comes from the line of Frederick Tremblay of Desjardins Capital Markets. Please go ahead.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Frederic Tremblay of Desjardins Capital Markets. Please go ahead.

Speaker #7: Thanks. Good morning.

Frederic Tremblay: Thanks. Good morning.

Sébastien Bourassa: Go ahead, Fred.

Speaker #6: Bonjour, Fred. Morning.

Frederic Tremblay: One of the areas that was highlighted in patient care for the quarter was home care. I was wondering if you could maybe remind us of the strategy to gain market share in that specific sector?

Speaker #7: One of the areas that was highlighted in patient care for the quarter was home care. I was wondering if you could maybe remind us of the strategy to gain market share in that specific sector.

Sébastien Bourassa: I think, again, home care, we talked a bit during the Investor Day. Yes, we're there in the long-term care. That's our biggest segment, but also in acute care. Home care is definitely an area where we wanna be better. I think as the best of my knowledge, I don't think there's any numbers in the annual financial, but no, it's part of our strategy to be better in home care, to have the right offering, you know.

Speaker #6: I think again, home care, I think we talked a bit during the investor day. Yes, and we're there in the long-term care that's our preferred not preferred, that's our biggest segment, but also in acute care.

Speaker #6: But home care is definitely an area where we want to be better. I think as the best of my knowledge, I don't think there's any numbers in the MDNA or financial, but no, it's part of our strategy to be better in home care, to have the right offering.

Speaker #7: Okay. And then just moving forward, can you talk about some of the early trends that you're seeing in Q2 in accessibility? Have you seen some continuation of the positive Q1 trends into April?

Frederic Tremblay: Okay. Just, moving forward, can you talk about some of the early trends that you're seeing in Q2, in accessibility? Have you seen some continuation of the positive Q1 trends into April in both Europe and North America?

Speaker #7: In both Europe and North America?

Sébastien Bourassa: I think without making big forward-looking statement. I think the good news, Fred, again, Backlog is good, so I think things are continuing to go well. The traction we had in Europe I think is continuing, so that's very positive. In North America, again, Q1 is always historically a bit lower in North America, but in Q2 the construction is good and the winter is over. I'm expecting to see a good Q2. No, a good year, I will say that.

Speaker #6: I think without making big forward-looking statements, but I think the good news, Fred, again, we are backlog is good. So I think things are continuing to go well.

Speaker #6: The traction we had in Europe, I think, is continuing. So that's very positive. Again, North America again, Q1 is always historically a bit lower in North America, but in Q2, the construction is good.

Speaker #6: The winter is over. So I'm expecting to see a good second quarter. A good year, I would say.

Speaker #7: Okay. I'll get back into Q. Congrats on a solid quarter.

Frederic Tremblay: Okay. I'll get back in the queue. Congrats on a solid quarter.

Speaker #6: Merci, Fred.

Speaker #4: Thank you. One moment for our next question. Our next question comes from the line of Michael Glenn of Raymond James. Please go ahead.

Sébastien Bourassa: Thanks, Fred.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Michael Glen of Raymond James. Please go ahead.

Sébastien Bourassa: Hi, Michael.

Michael Glen: Hey, good morning. Hey, to start from my standpoint, when I take a look at your incremental margins on EBITDA in accessibility, they are tracking very high. Like your incremental EBITDA on each dollar of sales is quite high. Is there any reason why, you're highlighting all these initiatives with Savaria One still coming into play. Is there any reason why you believe or we should think that that rate of incremental change will change in coming quarters?

Speaker #8: Hey, good morning. Hey, to start for my standpoint, when I take a look at your what are your incremental margins on EBITDA in accessibility, they are tracking very high.

Speaker #8: Your incremental EBITDA on each dollar of sales is quite high. Is there any reason why you're highlighting all these initiatives with Savaria One still coming into play?

Speaker #8: Is there any reason why you believe or we should think that that rate of incremental change will change in coming quarters?

Speaker #6: Maybe I was starting to stick with complete. So I think Michael, no, what is good is everything we have done in the last two years, is usually sustainable.

Sébastien Bourassa: Maybe I will start and Steve will complete. I think, Michael, what is good is everything we have done in the last 2 years is usually sustainable. I think that's a positive. Now that the team is always driven initiative, we do R&D, we launch some new product. I think the incremental business is continuing to be quite good. I hope that the margins in the legacy business will continue to expand. For sure, at one point it will expand a bit slower. I think if, unfortunately maybe if your next question is why we have kept just 20-plus EBITDA guidance and sort of raising this up.

Speaker #6: So I think that's a positive. And now that the team is always driven, initiative, we do R&D, we launch a new product. So no, I think the incremental business continues to be quite good.

Speaker #6: And I hope that the margins and the legacy business will continue to expand. But for sure, at one point, it will expand a bit slower.

Speaker #6: And I think if and for sure, maybe if your next question is why we have kept just 20-plus EBITDA guidance instead of raising this up, but not to forget is when we do acquisition and we want to do acquisition, typically, they are a bit lower in terms of EBITDA, and it takes two, three years to bring back to the right level.

Sébastien Bourassa: Not to forget is when we do acquisition and we wanna do acquisition, typically they are a bit lower in term of EBITDA, and it takes 2, 3 years to bring back to the right level. I think a mix of all that will make us successful in the future. Yes, I'm hopeful that we can still continue to improve the legacy business, but again, it will be at a slower pace maybe over the last 2 years. After that, no, maybe there's a bit of noise at different place with inflation, Fred, this that, but all those good initiatives make us be successful to offset the little negative that sometimes is happening. Maybe Steve, anything you want to complement?

Speaker #6: So I think a mix of all that would make us successful in the future. But yes, I'm hopeful that we can still continue to improve the legacy business.

Speaker #6: But again, it will be at a slower pace maybe over the last two years. And after that, no, maybe there's a bit of noise at different places with inflation, Fred, this, that, that.

Speaker #6: But all those good initiatives make us be successful to overset the little negative that sometimes is happening. Maybe Steve, anything you want to compliment?

Speaker #6: I think that was comprehensive.

Stephen Reitknecht: I think that was comprehensive.

Speaker #7: Okay. Perfect. And then just regarding the recent section 232 revisions, I know that you were largely able to avoid any impact that came from these changes, but has this revision created any discussion regarding a further shift of production or assembly down to the US?

Michael Glen: Okay. Perfect. Regarding the recent Section 232 revisions, I know that you were largely able to avoid any impact that came from these changes, but has this revision created any discussion regarding a further shift of production or assembly down to the US?

Speaker #7: Again, as of right now, again, things can change every day, but as of right now, we have done a lot of work in the last few weeks to make sure we're good.

Sébastien Bourassa: Again, as of right now, things can change every day, but as of right now, we have done a lot of work in the last few weeks to make sure we're good. All our finished goods remained all compliant. We don't pay tariff. Is there some small noise on some small spare parts, the answer is yes, but that we're able to offset the noise, and we have action for those also. No, we have decided to invest in Greenville a year ago because we were tired to discuss about that. No, we are very committed right now. We do approximately 60% of our home elevator Eclipse in the US, and we're adding some new capability with the expansion to increase our offerings.

Speaker #7: So all our finished goods remained all compliant. We don't pay tariff. Is there some small noise on some small spare parts? The answer is yes, but that we're able to overset the noise, and we have action for those also.

Speaker #7: But no, we have decided to invest in Greenville a year ago because we were tired to discuss about that. And no, we are very committed right now.

Speaker #7: We do approximately 50% of our home elevator Eclipse in the US. And we're adding some new capability with the expansion to increase our offering.

Sébastien Bourassa: I think, no, we'll be able to flex with this US manufacturing to make us less dependent on the border. I think that's the objective.

Speaker #7: So I think, no, we will be able to flex with this US manufacturing to make us less dependent on the border. I think that's the objective.

Sébastien Bourassa: I think, no, we'll be able to flex with this US manufacturing to make us less dependent on the border. I think that's the objective.

Speaker #7: Okay. And then can you remind us, Steven, maybe you said it, sorry, I missed it, but the full year CapEx you're expecting and on top of that, would you be expecting a working capital ramp in the back half as well as you ramp up Greenville?

Michael Glen: Okay. Can you remind us, Steven, maybe you said it, sorry, I missed it, but the full year CapEx you're expecting, and on top of that, would you be expecting a working capital ramp in H2 as well as you ramp up, Greenville?

Stephen Reitknecht: On the working capital piece, no. I mean, as we ramp up Greenville, so we already have product there because there already is operations there on the accessibility side. As we ramp up Greenville, we're probably gonna be taking working capital out of other areas, so there shouldn't be a net overall impact to the business. On the CapEx front, typically, we've been 2% to 2.5% of sales. This year it's gonna be slightly higher because of Greenville. The expansion, we had 1 million come through in Q1, and we were at 2.5% of sales. So we're gonna be slightly higher than 2.5% this year, but that's all gonna be due just to the Greenville expansion.

Speaker #6: On the working capital piece, no. I mean, as we ramp up Greenville, so we already have product there because there already is operations there.

Speaker #6: On the accessibility side, but as we ramp up Greenville, we're probably going to be taking working capital out of other areas. So there shouldn't be a net overall impact to the business.

Speaker #6: On the CapEx front, typically, we've been 2 to 2 and a half percent of sales. This year is going to be slightly higher because of Greenville.

Speaker #6: The expansion, we had 1 million come through in Q1, and we were at 2.5% of sales. So we're going to be slightly higher than 2 and a half this year, but that's all going to be due just to the Greenville expansion.

Speaker #6: So we're going to be lower than 3%, but likely above 2 and a half.

Stephen Reitknecht: We're going to be lower than 3%, but likely above 2.5%.

Speaker #7: And Michael, I think just to add on that, I think it's a very good news because we are very committed to continue to be better.

Sébastien Bourassa: Michael, I think just to add on that, I think it's a very good news because we are very committed, okay, to continue to be better. Every year we have project to invest in machinery to have the best machine, to be more efficient, and after that to have the best factory that we can have capacity for the next 2 years. We'll continue to do research and development. We have over 60 people in research and development to improve the existing product, to develop some new one to help us for organic growth. I think this commitment of CapEx is very important for me to be able to continue to grow the business.

Speaker #7: So every year, we have projects to invest in machinery to have the best machine to be more efficient. And after that, to have the best factory that we can have capacity for the next few years.

Speaker #7: We continue to do research and development. We have over 60 people in research and development to improve the existing product, to develop some new one, to help us for organic growth.

Speaker #7: So I think this commitment of CapEx is very important for me to be able to continue to grow the business.

Speaker #8: Yeah. I just given the dynamics surrounding the border, I'm just thinking if you're wondering if you should be doing more of this, rather pulling it forward just to mitigate risk, any future risk.

Michael Glen: Yeah, I just, you know, given the dynamics surrounding the border, I'm just thinking if you're wondering if you should be doing more of this, rather pulling it forward just to mitigate risk, any future risk. I know it's uncertain.

Speaker #8: But I know it's uncertain.

Sébastien Bourassa: Okay.

Speaker #6: Okay.

Michael Glen: That's it for me.

Speaker #7: That's it for me.

Speaker #6: Okay. Thank you very much. Appreciate it, too.

Sébastien Bourassa: Okay. Thank you very much.

Stephen Reitknecht: Appreciate it.

Sébastien Bourassa: Thank you.

Speaker #7: Our next question comes from the line of Razi Hassan of Paradigm Capital. Please go ahead.

Operator: Our next question comes from the line of Razi Hasan of Paradigm Capital. Please go ahead.

Razi Hasan: Good morning. Thanks for taking my questions. Maybe for Steve, can you just remind us on the impact of seasonality on EBITDA margin?

Speaker #9: Good morning and thanks for taking my questions. Maybe for Steve, can you just remind us on the impact of seasonality on EBITDA margin?

Razi Hasan: Good morning. Thanks for taking my questions. Maybe for Steve, can you just remind us on the impact of seasonality on EBITDA margin?

Speaker #6: Yeah. Q1 is always our weakest quarter. I mean, looking back years, it is our weakest quarter out of all four. We did come in at 20.4 this quarter, which is where we finished last year.

Stephen Reitknecht: Yeah. Q1 is always our weakest quarter. I mean, looking back years, it is our weakest quarter out of all four. We did come in at 20.4 this quarter, which is where we finished last year. We're really pleased with that. I think, you know, the fact that Q1 is typically weak, we're expecting, you know, higher margins through the remaining quarters.

Speaker #6: So we're really pleased with that. And I think the fact that Q1 is typically weak, we're expecting higher margins through the remaining quarters.

Sébastien Bourassa: Just one thing I would like to add also. Europe, since Europe has been better, in all the last years has been a bit more difficult. There's a bit less seasonality in the stairlift business than there is in home elevator because it's, you don't need construction to make stairlift. It's hard a bit to compare the seasonality with all the previous year. Yes, it has been good. We hope the next quarter will be better, but we just need to take it with a grain of salt with a better performance in Europe, and that really adds for the group, right?

Speaker #7: I just one thing I would like to add also. You have since your app has been better, no, the last few years has been a bit more difficult.

Speaker #7: There's a bit less society, the seller business, than there is in home elevator because you don't need construction to make stir lift. So it's hard a bit to compare the society with all the previous year.

Speaker #7: Yes, it has been good. We hope the next quarter will be better, but we just need to take it with a grain of salt with a better performance in Europe.

Speaker #7: And that really helps for the group, right?

Speaker #8: Okay. No, that's helpful. And then maybe could you talk a little bit about the levers for operating leverage to the remainder of the year, Steve?

Razi Hasan: Okay. No, that's helpful. Then maybe could you talk about a little bit about the levers for operating leverage through the remainder of the year, Steve?

Stephen Reitknecht: Levers for operating leverage? I mean, we started to see some operating leverage come through in Q1. We're expecting more operating leverage, especially as we, you know, came out with our guidance for 2023. Our SG&A is growing at a slower rate than sales. Our cost of material is decreasing, and our cost of the remaining COGS is growing at a slower rate than sales. I mean, we're starting to see that with the revenue growth. We're expecting that to continue, Razi.

Speaker #6: Levers for operating leverage? I mean, so we started to see some operating leverage come through in Q1. We're expecting more operating leverage, especially as we came out with our guidance for 2030.

Speaker #6: Our SG&A is growing at a slower rate than sales. Our cost of material is decreasing. And our cost of the remaining COGS is growing at a slower rate than sales.

Speaker #6: So I mean, we're starting to see that with the revenue growth. We're expecting that to continue, Razi.

Speaker #7: Okay. That's very helpful. And then maybe just one for JP. Obviously, strong results in Europe. Could you maybe just qualify that in regards to is the region progressing ahead or in line with your expectations?

Razi Hasan: Okay. That's very helpful. Then maybe just one for JP. Obviously strong results in Europe. Could you maybe just qualify that in regards to, you know, is the region progressing ahead or in line with your expectations?

Jean-Philippe De Montigny: I'd say in line. First of all, we have a budget, but also I'm a very ambitious leader. No, it's in line. Like, we have great results. We're very proud of them. Like, Sébastien said that at this moment, we see that as a sustainable result.

Speaker #6: I'd say in line. I'm a, first of all, we have budgets, but also I'm a very ambitious leader. So no, it's in line. We have good, great results.

Speaker #6: We're very proud of them. Sebastien said that at this moment, we see that as a sustainable result.

Speaker #7: And I think new products also, no, the one-stop shop, we paid it off in, but I don't think it's been affecting the results yet.

Sébastien Bourassa: I think new products also, not a one-stop shop, we beat it often, but I don't think it's been affecting the results yet. All the effort on the Luma, the VPL, the incline lift, I think that will also help us in the future to continue to fuel a bit this growth in Europe.

Speaker #7: But all the effort on the Luma, the VPL, the incline lift, I think that will also help us in the future to continue to fuel a bit this growth in Europe.

Speaker #6: Yeah. And with the new straight stair lifts, which should help.

Jean-Philippe De Montigny: Yeah. With the new straight stairlift.

Sébastien Bourassa: Yeah. It's very good news.

Speaker #7: Yes. Very good news.

Speaker #6: Yeah.

Speaker #8: Okay. Thanks very much. I'll pass the line.

Jean-Philippe De Montigny: Yeah.

Razi Hasan: Okay, thanks very much. I will pass the line.

Speaker #6: Thank you, Razi.

Stephen Reitknecht: Thank you, Razi.

Speaker #7: Thank you. One moment for our next question. Our next question comes from the line of Justin Keywood of Stifel. Please go ahead.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Justin Keywood of Stifel. Please go ahead.

Speaker #9: Good morning. Thanks for taking my call. Nice to see the Europe organic growth rebound. Also seen that Canada was up nicely, but the US was relatively flat.

Justin Keywood: Good morning. Thanks for taking my call. Nice to see the Europe organic growth rebound. Also seemed that Canada was up nicely, but the US was relatively flat. Just wondering if there was anything to account for that in the quarter.

Speaker #9: Just wondering if there was anything to account for that in the quarter.

Stephen Reitknecht: Yeah. I mean, US, we did have headwinds on FX, right? We saw that in both businesses. I mean, unfortunately, patient care, they had really strong organic growth, but that was a lot of it, or almost half of it was offset by FX. Clearly we see that in the accessibility business. Overall for accessibility, there is positive FX impact because of the strength of the euro and the pound versus the Canadian dollar. You know, US is a huge opportunity for us. It's a massive market. Our backlog remains really strong. We're, you know, we're looking positively for the next few quarters.

Speaker #6: Yeah. So I mean, US, we did have headwinds on FX, right? We saw that in both businesses. I mean, unfortunately, patient care, they had a really strong organic growth, but that was a lot of it or almost half of it was offset by FX.

Speaker #6: And clearly, we see that in the accessibility business. But overall, for accessibility, there is positive FX impact because of the strength of the euro and the pound, which is the Canadian dollar.

Speaker #6: So US is a huge opportunity for us. It's a massive market. Our backlog remains really strong. So we're looking positively for the next few quarters.

Justin Keywood: Are you able to parse out the volume growth without the FX in the US market?

Speaker #7: Are you able to parse out the volume growth without the FX in the US market?

Stephen Reitknecht: I mean, we Yeah, we don't give that level of detail, Justin. I mean, we disclose the total growth by market, then we disclose total by segment. We don't disclose that level of detail. I mean, I can give you some further commentary. The price increases this year in the North American market have been relatively modest in the sort of 2% to 3% range. They were slightly lower than that in patient care.

Speaker #6: I mean, yeah, we don't give that level of detail, Justin. I mean, we disclose the total growth by market, and then we disclose total by segment.

Speaker #6: But we're not, we don't disclose that level of detail. We do, I mean, I can give you some further commentary on the price increases this year.

Speaker #6: In the North American market, I've been relatively modest in the sort of 2 to 3 percent range. And they were slightly lower than that in patient care.

Speaker #7: Should we expect rebounding organic growth quarters in the US for the rest of the year, or is Europe and Canada going to be the main drivers?

Justin Keywood: Should we expect rebounding organic growth quarters in the US for the rest of the year? Or is Europe and Canada gonna be the main drivers?

Speaker #6: Right. US is our main market, so I think no need to be worried about that. And there's enough initiative, okay, as I disclosed in my statement, and during the investor day.

Sébastien Bourassa: My US is our main market, okay?

Justin Keywood: Yeah.

Sébastien Bourassa: I think, no need to be worried about that. There's enough initiative, okay, as I disclosed in my statement and during the Investor Day. No, I don't think US is a concern. It's still very good for us. Again, it's just some FX noise. Sometime, no, what's good about Savaria is we have multiple currency. Sometime you win on one, but you lose on the other. At the end, that make us a bit of natural hedging.

Speaker #6: So no, I don't think US is a concern. It's still very good for us. Again, it's just some FX noise at some time. No, it's good about summer as we have multiple currency.

Speaker #6: Sometimes you win on one and you lose on the other. So at the end, that makes us a bit of natural edging.

Speaker #7: Okay. Good. Great to hear. And my next question is just on Savaria Link, the software. And if we could just describe how the overall services or aftermarket services is progressing in if there's any other details around that.

Justin Keywood: Okay, good. Great to hear. My next question is just on Savaria Link, the software and if we could just describe how the overall services or aftermarket services is progressing and if there's any other details around that. Thank you.

Speaker #7: Thank you.

Speaker #6: I would take this one. So I think Savaria Link for us, again, JP mentioned it a bit earlier, the fact that we manufacture our own electronics, okay, in this acquisition within a few years ago.

Sébastien Bourassa: I will take this one. I think Savaria Link for us, again, JP mentioned it a bit earlier, the fact that we manufacture our own electronics, okay? That's an acquisition we did a few years ago, but it's important because we're able to have similar electronics across all our products. Now we have Savaria Link for many, many years, but we did recently a major update on it. Right now that really help us to monitor the products that you can see from the back office. If Mrs. Smith, okay, stair lift is not working in the morning, you will be able to call her before she call you.

Speaker #6: But it's important because we're able to have similar electronics across all our products. And now we have Savaria Link for many, many years, but we did recently a major update on it.

Speaker #6: And right now, that really helps us to monitor the products that you can see from the back office. If Mrs. Smith, okay, stir lift is not working in the morning, you will be able to call her before she calls you.

Speaker #6: And after that, to make it easier for installer and technician, if you're going on job site and you can find the issue a bit faster, to troubleshoot the units.

Sébastien Bourassa: After that, to make it easier for installer and technician, if you go on a job site and you can find the issue a bit faster to troubleshoot the units, that's a key, 'cause you save some time, you're more productive. I think definitely that's something that will really help us in the future and we want to change a bit the way we technician are able to troubleshoot the unit. I think it's very interesting. For sure the Again, for us, yes, we have a service per parts. That's a small portion of our business. It's more important we are direct, but if we can bring these tools to our dealer and make their life easier, at the end, we will win.

Speaker #6: But that's key because you save some time. You're more productive. So I think definitely that's something that will really help us in the future.

Speaker #6: And we want to change a bit the way we technician are able to troubleshoot the units. So I think it's very interesting. And for sure, again, for us, yes, we have service per parts as a small portion of our business.

Speaker #6: It's more important where our direct, but if we can bring these tools to our dealer and make their life easier, at the end, we would win.

Justin Keywood: Thank you. I assume the services revenue has a greater margin contribution.

Speaker #7: Thank you. And I assume the services revenue has greater margin contribution?

Sébastien Bourassa: The big 2 service and parts is very interesting, yes.

Speaker #6: Typically, service and parts is interesting. Yes.

Speaker #7: Okay. Great. Thank you for taking my questions.

Justin Keywood: Okay, great. Thank you for taking my questions.

Speaker #6: Thank you, Justin.

Stephen Reitknecht: Thank you, Justin.

Speaker #7: Thank you. One moment for our next question. Our next question comes from the line of Nathan Pove of National Bank Capital Markets. Please go ahead.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Zachary Evershed of National Bank Financial Markets. Please go ahead.

Zachary Evershed: Good morning, guys. Thanks for taking my question. Accessibility in Europe showed some impressive year-over-year growth, and stair lifts was mostly called out in the commentary. When do you expect to see contributions from Luma and Multilift sales and actually the straight stair lift as well?

Nathan Po: Good morning, guys. Thanks for taking my question. Accessibility in Europe showed some impressive year-over-year growth, and stair lifts was mostly called out in the commentary. When do you expect to see contributions from Luma and Multilift sales and actually the straight stair lift as well?

Speaker #10: Good morning, guys. Thanks for taking my question. Accessibility in Europe showed some impressive year-over-year growth, and stair lifts were mostly called out in the commentary.

Speaker #10: When do you expect to see contributions from Luma and multi-lift sales? And actually, the straight stair lift as well.

Speaker #6: Yeah. So I mean, we are selling those already, okay, just so you understand. But it's a small number now, okay? So if your question is when is that going to be material, it will take probably several months still.

Jean-Philippe De Montigny: I mean, we are selling those already. Okay. Just to, so you understand, but it's small numbers now. Okay. If your question is when is that gonna be material, it will take probably several months still. 'Cause for these products, we, it takes time to build. Now we have great interest, for example, for Luma. Our dealers started to install it in their showrooms, right? We now have it in our showrooms and their showrooms. I think by the end of the year, we'll start to see some more material orders for that, for example. Multilift is also still relatively small, we've got work to do to grow that business. To me, if you think about the next two years, that will be adding to our results.

Speaker #6: Because for these products, we it takes time to build. Now we have great interest, for example, for Luma. Our dealers started to install it in their showrooms, right?

Speaker #6: So we now have it in our showrooms and their showrooms. So I think by the end of the year, we'll start to see some more material orders for that, for example.

Speaker #6: Multi-lift is also still relatively small. So we've got work to do to grow that business. So to me, if you think about the next two years, that will be adding to our results.

Speaker #6: But the real bulk, like what we really move the needle is still the traditional products. Just because the size of the installed base, the size of the market, we can tackle there is much bigger for us at the moment.

Jean-Philippe De Montigny: The real bulk, like what will really move the needle is still the traditional products, just because the size of the install base, the size of the market we can tackle there is much bigger for us at the moment.

Speaker #7: All right. Thank you for the caller. And can you walk us through at a high level the impact of rising energy costs across your cost base and your strategy to manage this, especially given your international supply chain?

Zachary Evershed: All right. Thank you for the color. Can you walk us through at a high level the impact of rising energy costs across your cost base and your strategy to manage this, especially given your international supply chain?

Nathan Po: All right. Thank you for the color. Can you walk us through at a high level the impact of rising energy costs across your cost base and your strategy to manage this, especially given your international supply chain?

Speaker #6: Yeah. For sure, again, our margin has been up in the first quarter. So I think we have been able to absorb them somehow. And I think JP mentioned a bit earlier, we still have a lot of initiative in procurement efficiency.

Sébastien Bourassa: For sure. Again, our margin has been up in Q1, so I think we have been able to absorb them somehow. I think JP mentioned a bit earlier, we still have a lot of initiative in procurement efficiency. Somehow we are able to offset most of them and some of them is the freight, and the freight is usually when it is ex works effectively, the dealer pay, the customer pay for that. That may be not affecting so much our business. The fact that we remain very vertically integrated. We make parts by ourselves in that sort of factory, that's our machine, that's our employees. I think that's really helping us to control our cost. So far we are okay. We're good.

Speaker #6: I think somehow we are able to offset most of them. And some of them is the freight, and the freight is usually when it is ex works—the factory, the dealer pays, the customer pays for that.

Speaker #6: So that's maybe not affecting so much of business. And the fact that we remain very vertical integrated. We make parts by ourselves. Again, that's our factory.

Speaker #6: That's our machine. That's our employees. I think that's really helping us to control our cost. So so far, we are lucky. It's good.

Speaker #7: Good caller. Thank you. And do you have any view on the potential impact of Section 301 tariffs?

Zachary Evershed: Good color. Thank you. Do you have any view on the potential impact of Section 301 tariffs?

Nathan Po: Good color. Thank you. Do you have any view on the potential impact of Section 301 tariffs?

Speaker #6: I think, as I mentioned a bit earlier to a previous question, I think we have done our work in the last few weeks. Right now, all our feeling is good.

Sébastien Bourassa: I think as I mentioned a bit earlier to a previous question, I think we have done our work in the last few weeks. Right now all our finished goods, they are tariff exempt, so we do not pay tariff. Is there some small noise on spare parts? The answer is yes. We have countermeasure to improve that. I think so far our results are embedded with what's happening.

Speaker #6: There are tariff exempts, so we do not pay tariff. Is there some small noise on spare parts? The answer is yes, but we have countermeasures to improve that.

Speaker #6: And I think so far, our results are a bit dead with what's happening.

Speaker #7: Okay. Great. Here. And one last one for me. You spoke about wanting to own the room and patient care. Can you walk us through any gaps you see in your current portfolio and maybe take us through a decision on whether you want to build or acquire your way to that?

Zachary Evershed: Okay, great to hear. One last one for me. You spoke about wanting to own the room in Patient Care. Can you walk us through any gaps you see in your current portfolio? Maybe take us through a decision on whether you want to build or acquire your way to that.

Nathan Po: Okay, great to hear. One last one for me. You spoke about wanting to own the room in Patient Care. Can you walk us through any gaps you see in your current portfolio? Maybe take us through a decision on whether you want to build or acquire your way to that.

Jean-Philippe De Montigny: Well, to some extent I can speak to it. Well, I won't go into too much details 'cause this can be strategic, right? If you think about owning the room today, we have in the long-term care we have a lot of products already. One place where we did some expansion through Savaria One is to work on the case goods, for example. 'Cause if you think about the room, we have the bed, we have the surface, we can do ceiling lifts even in long-term care. We didn't have necessarily all the accessories around it, so like the case goods, for example. We currently distribute some other products, like floor lifts. This is where our attention is, okay, to make sure we have a better offering for all these adjacent products.

Speaker #6: Well, to some extent, I can speak to it. Well, I won't go into too much details because this can be strategic, right? But if you think about owning the room today, so we have in the long-term care, we have a lot of products already.

Speaker #6: So one place where we did some expansion through Savaria One is to work on the case goods, for example. Because if you think about the room, we had the bed, we had the surface.

Speaker #6: We can do ceiling lifts even in long-term care. We didn't have necessarily all the accessories around it—so like the case goods, for example.

Speaker #6: And we currently distribute some other products. Like floor lifts. So this is where our attention is, okay, to make sure we have a better offering for all these adjacent products.

Speaker #6: And in the acute care business, we're still thinking about it. It's more complicated. We have ceiling lifts, which are very important, but the rest of the equipments are highly specialized.

Jean-Philippe De Montigny: In the acute care business, we're still thinking about it. It's more complicated. We have ceiling lifts, which are very important, but the rest of the equipments are highly specialized. This is something we're discussing internally, we're looking at, but we don't have necessarily something to disclose at this time.

Speaker #6: So this is something we're discussing internally. We're looking at, but we don't have necessarily something to disclose at this time.

Sébastien Bourassa: In theory, we like to manufacture what we sell, okay? Patient care is a bit more special because to own the room. At the end, long-term strategy, we want to manufacture our own products.

Speaker #11: But historically, we like to manufacture what we sell, okay? In patient care, it's a bit more special because to own the room. But at the end, long-term strategy, we want to manufacture our own products.

Speaker #7: Thank you very much. I'll turn it over.

Zachary Evershed: Thank you very much. I will turn it over.

Nathan Po: Thank you very much. I will turn it over.

Speaker #12: Thank you. One moment for our next question. Our next question comes from the line of Jonathan Goldman of Scotiabank. Please go ahead.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Jonathan Goldman of Scotiabank. Please go ahead.

Jonathan Goldman: Good morning, team. Thanks for taking my questions. Just one from me. I noticed you didn't break out accessibility organic growth between Europe and North America this quarter. I just wanna get some background on the rationale for that, and maybe you can help us, you know, give a little more color on the trends in those respective businesses. You know, over the past, I guess, few years, North America has been doing great, growing above your targeted range. Europe has been a bit slow, part of that was a concerted effort, you know, to possibly focus on higher margin business. Maybe you can give us how those trends have developed, you know, in Q1, or any way you wanna talk about it.

Speaker #13: Hey, good morning, team. Thanks for taking my questions. Just one from me. I noticed you didn't break out accessibility organic growth between Europe and North America.

Speaker #13: This quarter, I just want to get some background on the rationale for that. And maybe you can help us get a little more color on the trends in those respective businesses.

Speaker #13: Over the past, I guess, few years, North America has been doing great. Growing above your targeted range. Europe has been a bit slow, but part of that was a concerted effort to possibly focus on higher margin business.

Speaker #13: But maybe you can give us how those trends have developed in Q1, or any way you want to talk about it.

Speaker #6: Thanks, Jonathan. I want to start and see who compete. So yes, again, we have two segments, which is patient care and accessibility. And I would say in the last two years, yeah, we have breakdown in Europe and North America.

Sébastien Bourassa: Thanks, Jonathan. I want to start and see if Steve will complete. Again, we have 2 segments, which is patient care and accessibility. Now within the last 2 years, yeah, we have breakdown in Europe and North America. Now that Europe is back to contribute similar amount as North America, we decided to stop that because we don't break our sales for Asia, for Europe, for this, for that, and started to be a bit too complex. This is the organic growth. This is the effect. This is acquisition growth. We have decided to simplify the information for the reader, and this is a permanent change and we are going to continue like that. At the end, what is important, we want to achieve our CAD 1.6 billion by 2030.

Speaker #6: And now that Europe is back to contribute a similar amount as North America, we decided to. Stop that because we don't break our sales for Asia, for Europe, for this, for that.

Speaker #6: And it started to be a bit too complex. The organic growth, this is the effect, this is the acquisition growth. So we have decided to simplify the information for the reader.

Speaker #6: And this is a permanent change that we're going to continue like that. And at the end, what's important, we want to achieve a 1.6 billion by 2030.

Speaker #6: So that's why we have decided to make this change. Steve?

Sébastien Bourassa: That's why we have decided to make this change. Steve?

Speaker #11: Just to add some commentary. I mean, yes, you're right. North America has been relatively strong for the last couple of years. And while we had that weakness in Europe, Europe has since rebounded.

Stephen Reitknecht: Just to add some commentary. I mean, you know, yes, you're right. North America has been relatively strong for the last couple years. While we had that weakness in Europe has since rebounded, so we have both regions that are doing quite well right now. You know, we had extra focus on Europe over the last couple years, and that's why maybe there was some additional commentary there. Now that both divisions are performing quite well, we're, that's also one of the reasons why we're not disclosing it separately.

Speaker #11: So we have both regions that are doing quite well right now. And we had extra focus on Europe over the last couple of years.

Speaker #11: And that's why maybe there were some additional commentary there. But now that both divisions are performing quite well, we're that's also one of the reasons why we're not disclosing it separately.

Speaker #13: Makes sense. And sounds good. Thanks for taking my question, guys.

Jonathan Goldman: Makes sense, and sounds good. Thanks for taking my question, guys.

Speaker #6: Thank you, Jonathan.

Sébastien Bourassa: Thank you, Jonathan.

Speaker #12: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. I'm showing no further questions at this time.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. I am showing no further questions at this time. I would now like to turn the call back to Mr. Bourassa for closing remarks.

Speaker #12: I would now like to turn the call back to Mr. Bourassa for closing remarks.

Sébastien Bourassa: Well, thank you to all the analysts. You have some very interesting question as usual, and I think you understand well the story of Savaria. Again, thanks for all the reports that you put on the company. Again, very proud of Q1 results. I think it's fantastic. With the Investor Day of a few weeks ago, I think we have put a lot of information available that you can know why we think we'll win in the next few years. Thanks for the confidence, and thanks for the call, Robbie. I guess we will go back to work, guys. Thank you.

Speaker #14: All right. Thank you to all the analysts. We have some very interesting questions, as usual. And I think you understand well the story of Savaria.

Speaker #14: So again, thanks for all the reports that you put on the company. So again, very proud of Q1 results. I think it's fantastic with the investor day of a few weeks ago.

Speaker #14: I think we have put a lot of information available that you can know why we think we'll win in the next few years. So thanks for the confidence.

Speaker #14: And thanks for the call, Rory. So I guess we will go back to work, guys. Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.