Savaria Corp T.SIS

Alternate Symbol(s): SISXF

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Savaria Corporation is a Canada-based company engaged in the accessibility industry. The Company provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its segments include Accessibility and Patient Care. It designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts and elevators for home and commercial use. It also manufactures and markets a comprehensive selection of pressure management products for the medical market, medical beds for the long-term care market, as well as an extensive line of medical equipment and solutions for the safe handling of patients, including ceiling lifts and slings. It operates a sales network of dealers worldwide and direct sales offices in North America, Europe (United Kingdom, The Netherlands, Switzerland, Italy, Germany, Poland and Czech Republic), Australia and China.

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Savaria Corp

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Post by retiredcfon Aug 11, 2022 8:16am

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Post# 34887555

TD

As this is a flash report, there's potential for them to raise their current target of $19.00. GLTA

Savaria Corp.

(SIS-T) C$15.19

Q2/22 First Look: 6% Cons Beat, In Line With TD Street-High Est. Event

Savaria reported Q2/22 revenue/adjusted EBITDA of $192mm/$31.5mm, in line with our estimates of $190mm/$31.8mm. Consensus was at $194mm/$29.8mm.
Management maintained its 2022 sales and EBITDA guidance of $775 million and $120 million to $130 million, respectively.
The conference call is today at 8:30 am (855-669-9657).

Impact: POSITIVE

Savaria delivered solid Q2/22 results, in our view, and we expect a positive share price reaction. While the MD&A is light on some details, we believe that the important highlights were:

Revenue (in line): Reported strong organic growth of almost 10% driven by strength across its three segments. The company pointed to price increases, synergies with Handicare, increased access to long-term care facilities, and pent- up demand (in Patient Care and Adapted Vehicles). Excluding unfavourable FX impact (-2.2%), revenues would have been slightly above consensus estimates.
Adjusted EBITDA (6% consensus beat): Savaria's adj. EBITDA margin increased ~110bps y/y, driven by improvements in the Accessibility/Patient Care gross margins tied to price increases, reduced shipping costs, and better cost absorption.
Savaria has made good progress with its "on-shoring" strategy, with its Mexico sub-assembly plant on track to open in September 2022 and its Brampton factory now able to fully produce the rail for the Freecurve stairlift (eliminating the need to ship the product from one of their European facilities). We expect these initiatives to deliver at least several benefits, including: 1) freight savings; 2) better inventory management (less working capital tied up on cargo ships for extended periods); 3) improved lead times (i.e., shipping from Mexico to North American facilities will take a week instead of months); and 4) production visibility. All of this should result in significantly more efficient operations longer term and limit future supply chain disruptions.

Savaria's shares are trading near trough levels (i.e., 10.1x consensus forward EBITDA versus its two-year average of 12.5x) which we believe offers attractive upside to be unlocked once the clouds around the overall macro environment begin to dissipate.