Good morning. My name is Stacy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Savaria Corporation's Q1 twenty twenty one 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.
This call may contain forward looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on 05/11/2021, with respect to the Q1 twenty twenty one results. Thank you. Mr. Barossa, you may begin your conference.
Thank you, Stacy. So everyone. Okay. It's a pleasure to present to you, okay, our q one with my guys. My guys, okay, financial, okay, is Steve.
The guy of lot of experience, okay, on acquisition, but he handled the the sitting lift, okay, and the patient ending. That's Nicolas. And the guy who integration, okay, it's my son, So they would answer. You can call the you can ask ask directly the answer to them. Or if not, okay, I will refer to to my specialist.
Okay? So but but I am very excited to present you q one why I am excited. Okay? I think we make a mega acquisition with Enzia that put us on this path, okay, to to to succeed. Okay?
And and we have done that, okay, for in q one. Okay? I think, okay, our sales, okay, big district, our EBITDA, adjusted EBITDA, okay, big district. So and you will see that that will continue, okay, throughout the year. So we have a next tenant.
That's important when you make a mega acquisition, okay, to to to have a good start. And we have a great start. Okay? And the people, I repeat, okay, the people are enthusiasts, okay, to to work with us. We that's directly in person, but we meet a lot of people, okay, from from Medicare.
And they are great people, and they want to focus with us, okay, to have the same goal, okay, to have the people make the products for people, the aging of the population. So and it's it's accurately. Okay? Stay home, okay, with Zavaria. Okay?
I think that's a great logo, okay, that that many people many old people, they want to stay at home. They want to stay at home. So my people work hard. Thanks to my people. Okay?
And my people who are in acquisition. Okay? The people, okay, that we make the acquisition work very hard. Okay? We are on the same page.
And imagine one thing. Okay? We are we have, okay, Span. We have Garaventa. We have Entycare, and we have Savaria.
So it's not just, okay, Entycare and Savaria. Okay? No. That's Entycare. Okay?
And with the the the the products, okay, they have similar to Span. Okay? With the patient entering. Okay? It would be tremendous what we would do for North America in this division.
We don't we don't have to forget that. Okay? And after that, okay, we have that Aventa. Okay? That they are in Europe.
Okay? We would try to be to make some cross selling with the end care. And, well, I already did begin that, okay, with end care and get Aventa some products. Okay? So what what make the success of company?
Okay? It's I think three item. Okay? That is very, okay, very, very important, okay, to make success. It's products, territory, people.
You can see if you want people first. Okay? Me, it's the three as quite important. And that's exactly what we have with this key acquisition. So it's fun.
The result would be there. For further result on offsetting our products, okay, to to to Entycare. We'll be more there in '22. But we already begin that, okay, on the the cross selling. So it's great.
And we I have one goal. Okay? I don't say before I retire it. Okay? So Sebastian don't get too excited.
Okay? But I will say at least until 2025, okay, to meet my personal goal and the personal goal of my people, okay, to reach 1,000,000,000 of sales, okay, by 2025. For sure, it will take, okay, good good internal growth that we can do. Okay? We're in better position than ever to make internal internal growth.
Okay? And maybe some little acquisition here and there to make always some complement. So I am very excited, but it's time to begin your question. And, again, thank you very much to be there. Okay?
And I reached some some people this morning about what they think about our q n in the future. We see some some upgrade, okay, from from some broker. Thank you very much. Okay? And our success, okay, is the success of my analyst too.
So we are ready to for the call.
Easy. Mark Marcel, do you want me to give the financial update?
Yes, yes, yes. Absolutely, absolutely. Absolutely. That's you, Steve.
Yes. Thanks, Marcel, and good morning, everyone. I'm going to begin with some remarks regarding our Q1 twenty twenty one consolidated financial metrics. For the quarter, the corporation generated revenue of $112,100,000 up $23,700,000 or 26.8% compared to Q1 twenty twenty, mainly due to the acquisition of Handy Care on 03/04/2021. Gross profit and gross margin stood at $38,900,000 and 34.7 percent, respectively, compared to $30,100,000 and 34.1% for Q1 twenty twenty.
The increase in gross profit over prior year was attributable to the acquisition of HandyCare as well as a favorable product mix. Adjusted EBITDA and adjusted EBITDA margin stood at $17,300,000 and 15.4% respectively compared to 12,400,000.0 and fourteen percent in q one twenty twenty. The increases in adjusted EBITDA and adjusted EBITDA margin were mainly attributable to the acquisition of HandyCare as previously mentioned as well as 1,100,000 in COVID nineteen employment retention government of Canada subsidies received during q one twenty twenty one, as well as continued corporation wide cost containment efforts. Now I'll move on to our segment results. Revenue from our accessibility segment was 80,600,000.0 in q one twenty twenty one, an increase of 18,000,000 or 28.7% compared to q one twenty twenty.
The increase in revenue was mainly attributable to the acquisition of HandyCare, 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 is the consequence of the economic slowdown caused by the global pandemic impacting the entire first quarter of twenty twenty one, while having a minimal impact last year in Q1 twenty twenty. Adjusted EBITDA and adjusted EBITDA margin both before head office costs stood at $13,900,000 and 17.2% respectively compared to $10,400,000 at 16.5% for Q1 twenty twenty. Improvements in both metrics were due to the acquisition of HandyCare. Revenue from our Patient Handling segment was $25,500,000 for the year, an increase of $4,500,000 or 21.5% when compared to Q1 twenty twenty.
The acquisition of Handy Care contributed 29.5% of growth, while organically revenues contracted 4% and foreign exchange had a negative impact of almost 4%. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, stood at $3,700,000 and 14.5% respectively compared to $2,500,000 and 11.9% for Q1 twenty twenty. The increase in both metrics was mainly due to the acquisition of HandyCare. Revenue generated from the Adapted Vehicles segment was 6,000,000 increase of $1,200,000 or 24% when compared to the same period in 2020. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, finished at $600,000 and 10.4%, respectively, compared to effectively nil EBITDA in q one twenty twenty.
The increases in revenue and EBITDA adjusted EBITDA margin when comparing q one twenty twenty one to q one twenty twenty were again mainly due to the acquisition of HandyCare as well as the Canadian emergency wage subsidies received. Now turning to some financial liquidity metrics. During the quarter, the corporation increased its debt level as a result of financing the HandyCare acquisition. On a pro form a trailing twelve month basis, the corporation's debt to adjusted EBITDA ratio at 03/31/2021 was 3.5 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.
The 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 q one twenty twenty one, coupled with the corporation's confidence in the strategic integration plan with HandyCare that is underway and strong underlying long term growth fundamentals for our markets, management estimates sorry, management anticipates the corporation will be able to achieve an adjusted EBITDA in excess of $100,000,000 during fiscal twenty twenty one. And with that, this completes my prepared remarks, Marcel, and I'll turn the call back over to you.
Steve, thank you very much. Okay. Very well done. And it's it's always more easier, okay, when we have good number, but at least, okay, you have done very good in your presentation. So do we go to some question?
Your first question comes from Derek Lessard from TD Securities.
Yeah. Good morning, everybody, and
congratulations on
on the quarter. Obviously so I'd like to talk maybe about some, if any, commodity, labor, or inflation pressures within your businesses that you're seeing and and maybe, if you are seeing those, some of your mitigation efforts there.
Yes. We're seeing that. Okay. But, Sebastian, you want to answer on that one?
Good morning, Derek. So, yes, there's inflation. Okay. I would say, like any industry right now for the electronics, the steel, maybe the phone, transmission cost. So maybe through the year, we we could maybe see a 10% inflation in different parts supply, but I think, different times during the year, okay, in each division, we've actually we pass some price increase to the customer.
So as example, if we get a 10% inflation during the year, we might pass a 5% increase to our customer. So you might see some small noise from one quarter to the other, but, definitely, on the long term, we should be able to keep the same margins. And, don't forget one thing. We are quite vertical integrated, like, from China to Toronto to different place, an organization. So whenever there's inflation, we try to have a counter project that maybe we can make some saving.
Maybe we can start with more vertical integrated. So I think on the long term, we should not be worried about that.
So that full, let's say, 10% inflation, you don't I mean, 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. Did not see what we're exactly right now at 10%, but, definitely, we are able to adapt to our business model.
Okay. Thanks. And, maybe now that you've you've had some time, with Handicare now under your under your belt, just wondering if you guys have been, able to identify maybe some other areas or other synergy, opportunities that you perhaps didn't see, during your initial due diligence?
Yes. Yes. For sure. Okay? For me, okay, don't forget that they they have okay.
They they are like a Siberia. Okay? And in other country. Okay? And with some other dealer than than we have.
Okay? But, you know, something, at the beginning, we say we're just mentioning about, okay, you know about the sell it. Okay? Straight, straight lift, curved, straight lift. Okay?
But now we say, hey. With Span, okay, we can have a good mix of this project, okay, with dev division in North America. And we have we have Garaventa, okay, that we can work together, okay, and to cover more territory in in Europe. And what is important, okay, that we were not seeing that before. Okay?
We see right now that on technology, okay, they are very strong. Okay? So we learn from them. Okay? That's good.
Okay? When you are a partner, okay, you learn just on one side. You have to listen to the other side too. Okay? So we learn, okay, that with the people down there, okay, the guy, okay, Peter, okay, who run all the production.
Okay? We can learn a lot from them, okay, and be better of what we do right now. So their equipment, their use of of laser or welding robot. Okay? I think they are better than us.
Okay? That's good to meet somebody. They are better than us. Okay? And for sure, okay, we learn on marketing.
I think down there, okay, we have Claire, okay, is in charge of marketing and sales. I think she's not good. She's very good. Okay? So we learn more, okay, to to have meeting.
My guy will so that she can explain that later that we'll later, but we have meetings, okay, with them every week, okay, on different subject. Okay? And we have subcommittee that go go deeply in one subject. So so so we learned that it will be better than what what I was thinking at the beginning.
Thanks for that, Marcel. Congratulations again, and I'll re queue.
Thank you very much.
Your next question comes from Frederic Tremblay from Desjardins.
So, Marcel, on your your revenue target of 1,000,000,000 by the end of twenty twenty five, can you share your vision as to how the profile of Sveria may evolve to get there? Will the company continue to expand geographically, or will it add new product?
Oh, you know, me, okay, it's what we know right now. Okay? Example, many countries around the world that we are not there, and they need our kind of products. Okay? But, really, okay, I push that that we can be better better in North America with the new products that they they they have.
They are one of the king in their product, the straight and curved. And I think in Europe, okay, it would be a good complement, okay, what is doing Garaventa down there. And they have one manufacturer in China. We have one manufacturer in China. So we don't sell a lot.
They don't sell a lot in China. That is great territory. Okay? And that's even in our traffic to to bring a curved cell lift, okay, all the equipment that we will will build, okay, directly in China to sell to to this market. You know what is important on the curbside lift is how many days it takes you to bring that to the consumer.
The consumer, when they are ready to buy, they are ready to buy now. It's why, okay, in Toronto, okay, Sebastian, talk about that. We will have, okay, by the end of this year, okay, working equipment, okay, the same that they have down there in Europe, okay, that will be in in Toronto, okay, for the North American market. So it's it's it's very exciting. Okay?
And, you know, something, when you do the math, okay, it would take more a lot of mad magic, okay, new things, okay, to beat this 1,000,000,000 to do that do that sooner. So, yes, we we we can find other other thing, but I think we have a super right now, a super products when we see a dealer. Okay? Nobody nobody in the world, okay, can offer all our products at the same place. That's something you go to a dealer and say, oh, you know, by the way, okay, we have that that that.
We have the Vuelift. The Vuelift is a great project to sell, and the team of Educare is right behind us. I think we will push that, and we will see some great number coming from from Europe, okay, on this, Julie. This release is a product outstanding. Nobody's driving something similar than that.
Okay? So, yeah, I'm quite excited.
Great. Thank you. And maybe a question for Nick on the patient handling side. Can you just maybe provide your updated thoughts or views on how the demand environment is shaping up there in terms of access to facilities? We saw that the organic growth decline in the segment was less severe in Q1.
So is that a sign that things are starting to improve on the demand side for that segment?
Thanks, Fred. I I would say that the short answer is yes, although it is largely dependent on on geography. So you have many pockets of The US, for example, which have reopened, or in the process of reopening, notably in the in the South, for example. However, there are other regions, that remain closed, you know, including Canada and, or, I guess, many parts of Canada, such as Ontario. But but that being said, I think we had a very strong month of March.
It was a very strong, not only for for for handicare, but also for Span. So I think that kind of bodes well and gives us a, you know, a lot of, positivism as we kinda move into into q two. Some other things kinda just to think about, you know, the hospitals are coming back. That's something that, is is is good for our business in terms of the hospitals being able to, you know, I I guess, provide these elective surgeries. You know, that's where they make quite a bit of their profits.
So, again, more profits, more more means of investments in capital equipment and the like. And maybe just a little anecdotal little piece of news. Our our head of sales, Clyde, he was telling me when I was talking to him earlier this week that he just attended his first in person trade show in over a year. And so that was was great for him and for that community, to get together in person. So, yes, I would say, Fred, to go back to me a but that was a long winded way of answering it.
But but I would say, yes, it is reopening. And, again, we saw that primarily in March. And so our, you know, order intake is good. The the backlog is looking pretty strong, and so I think we're we're more positive. But, again, still cautious.
Like I said, there are still pockets that are, you know, struggling here in Canada in particular. So, cautiously optimistic. Let me put it that way.
You're right. And maybe just a follow-up to that on the maybe on the margin side, 14 and a half percent in the quarter, another it's the second consecutive quarter of of margins above your, I guess, previously stated goal of 13% to 14% for this segment. Anything any read through there for what to expect moving forward? Or there was some onetime items in there that boosted the margin in the quarter?
I know the margin
Excuse me. Maybe you must have
No. That but you will complement. Okay? So so our long term, okay, I mean, I I see that we we should stick. Okay?
And when we will be at 1,000,000,000, we should stick, okay, to have something around 16.5. Okay? That's our goal. Okay? And I think with the people, with we have great people.
Okay? And all my people in this area, okay, all around 40 years old. Okay? And some are a little bit younger. Okay?
But so they are strong. Okay? They they they they have people this is people with talent. Okay? And we find that to with our other division that we work with.
Okay? So you want to complement that, Nicolas?
The one thing I would say is that, you know, we saw the exiting last year, the margin improvement, you know, it was apparent in q three and q four. We had the contribution of Handicare here in the first quarter, which again helps. Again, going back to what I was saying earlier that know, both of us had a very good strong month of March. So that kind of, you know, definitely helped in terms of the the margin contribution of of Handicare in the quarter. You know, that 14%, it is, I I would say, maybe, the the low bar.
Right? Marcela's, you know, talked about 15%. Yes. That is where we're striving to to get to. So so, again, I don't know what you're modeling there for the rest of the year, but, but but, again, we are positive in this segment, and we see should see some margin improvement there as well, especially as we work on some of the synergies that Marcel mentioned earlier between the Span and the Handicare teams.
Okay. Thank you very much. Thank you, Steven.
Your next question comes from Nick Agostino from Laurentian Bank.
I guess a couple of questions. First, on the Vuelift, can you guys talk to the demand specifically within Europe, how that product is being received in that market?
Oh, yes. Okay. Sebastian will look about that because he manufactured that. Okay? And he can do the number.
It was manufactured this year. And in 02/2020, I mean, this year, '21, okay, coming from our Alex, our guy of sales, okay, in Montreal. He all the salesman. Okay? We know the number and what we expect a little bit, okay, what we will do in in Europe.
So it's a great project. Okay? And I think the margin is good, okay, on the on this on this project. And we are in our complete different company than other people who offer try to offer something similar. So can you talk about your prediction, Sebastian, your goal?
Yeah. So, basically, if you lift, Nick, just to give you a rough idea of numbers, last year, okay, we did around 100 units. This year, our target is to do around 180 units. I will see my backlog of you lift is the have the best ever it has been since the beginning. There's a lot of marketing effort that has been done.
A good portion in Europe, especially, like, in Germany and Switzerland with the. And now Indicare is starting starting to talk to their dealer in Europe to their direct location. So I think it would take time, but you will see some traction. So definitely this year, the one eighty units for the VDF is possible. And we said that previously that would by 2023, we'd like to be around 30,000,000 of sales.
So the I think we are in the right direction. And I will say the Videos also has has a big impact on all the other elevators, like Eclipse, the Infinity, the the Garaventa, home elevators. So we are quite busy in the home elevator segment, where backlog is good. For sure, not all the business is good. The commercial is still training a bit behind the inclined platform, the vertical platform.
But if you see the residential with the only way to distribute, that's a strong segment, in this, twenty twenty one years.
Okay. And my my second question on the data business, obviously, 10% of the debt margin. Of the student, there's obviously some benefit from from HandyCare. If you look at your base business before the acquisition, you guys are undergoing that restructuring. Maybe just give us an update as to where that sits today and where you guys think you'll exit the year when it comes to EBITDA margin on your base Adapted Vehicle business?
Sebastian?
I think previously, we said that the target for the car business was a 10% of EBITDA. There has been some noise in the last two years because the sales were not there. We have restructured a bit. So I think between the mix of the Savaria and and the current Norway, I think a 10% target for the car business over a certain time should be a a good target for the the segment of the business.
Yeah. And and just just complement that. Okay? That's good, Sebastian. We can see, okay, that it's really depending here.
Okay? It's not easy. But if you are in wheelchair, okay, ma'am, it's it's even, okay, more difficult. Okay? So but but we have Finland, okay, Norway that make 10%.
Okay? And I think we have some some good perspective, okay, to continue on this side, okay, and van action. Okay? We we work hard. Okay?
And me, if we can make 10% out in this this division, I am not happy. I am very happy.
Okay. And my last question, with regards to HandyCare, 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 area you're doing a better job at and you can, I guess, port over to to HandyCare to improve their operations? So anything you can go back with to them with from the severity side?
You know, the only surprise that I when we take possession. Okay? And that was quite a surprise. Okay? That was the departure of their CFO, okay, Bernalea.
And she say she want to be the CFO. Okay? She knew that we have CEO. Okay? And she find a job, okay, in his hometown.
Okay? So this is less traveling time. Okay? And we understand, and she is great. She help us, okay, to transfer more responsibility for the people that we have in in UK.
So that's the only thing. All the other thing, okay, that was negative. All the other thing, just one thing positive. Okay. Thank you, guys.
Take your next question
comes from Zachary Evershed from National Bank Financial.
Good morning. It's Zach
good morning. It's actually it's it's actually Thomas calling in for Zach. Congrats on that strong quarter. Two quick ones for me. First of all, can you remind us how ND Care's accessibility residential versus versus commercial split compares to sub areas and how each end market is sparing in the current reopening?
Okay. That's an interesting question. It's a very interesting thing. So I am lucky. I think I can pass this ball.
Okay? So yeah. We would choose, mister Raymond. Okay?
Okay. Perfect.
As you
know, handicare's accessibility segment is is comprised of of stairlifts, so both straight and curved stairlifts. Those products are sold primarily in the residential space, so in homes. Yes. You may find in some commercial settings, like maybe a community center, of the like, but I would say that for all goods and purposes, you can think of that as being a residential product.
Mhmm.
And then on the severity side, in in a more normal environment, so I would say kind of maybe pre COVID, our business was roughly spit split, sorry, fifty fifty in terms of our, commercial and, and residential applications. Again, you have many of our our, you know, platform lifts, like the the incline platform lift and and many of our vertical platform lifts that are more maybe a commercial oriented product. And then, obviously, our residential elevators and the stairlifts 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 this this COVID pandemic, is that our residential activity has has maintained and has actually done very well, while the commercial has lagged a bit as, you know, many of those, you know, reduced foot traffic, for example, in in shopping centers, you know, schools being closed. All of that has had a negative impact that 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, you know, as the economy is open to back up and that commercial business comes back, you know, we might see it tilt. Maybe not quite back to 5050, but it'll be closer to that.
Okay. That's that's that's helpful. And maybe a second one for me. How does management feel about M and A and the usual dividend increase given the company's current leverage levels?
Can you repeat quickly your your question?
Yes. Absolutely. So I was wondering how management feels about the usual dividend increase and the m and a prospects given the current leverage.
Okay. Okay. That's a good question. Okay? And that's for me.
Okay? You know, dividends, okay, is part of of our culture, I would say. Okay? That we have always some kind of increase. Okay?
And we always do that in September. So you will see in September about the dividend. After that, okay, acquisition. Okay? Just, okay, there are four big company that we work with SPAN, for sure, and, okay, and with Garaventa and all the projects that we have at Savaria.
GNST going all around that. Okay? We don't need to me to make any acquisition. Okay? We have enough, okay, to push this company to the 1,000,000,000, just our four transit always, okay, going to one territory, the other territory, okay, to the new products.
Okay? For sure, our dealer, okay, will feel maybe some pressure to buy the the the Stelif from Ant Care to stay always in the same family. Okay? And now you will always say, oh, your products in in Stellif are so so not the best. Okay?
If you have another one, come to visit us. Now we are there. Okay? We say to our people, hey. We are one of the best or if not the best in the category of of of service.
Okay? So we don't need to make other acquisition. Just play around our key player that's right right now and just find new territory. It's just exciting that you you arrive at at the number, but we have to buy this company this company. No.
No. No. No. What we're at right now, we are very busy, and my people, okay, are very in the game. So so that's that's our plan.
Okay? No acquisition, okay, major for sure.
Perfect. Thank you very much. That's all I have.
Thank you.
Your next question comes from Justin Keywood from Stifel Bank.
Hi, good morning. Thanks for taking my call. Just had 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. So I guess my question is, does that organic growth, include the negative headwinds from foreign exchange?
Steve? I yep.
I can take that one. So it's overall, on a consolidated basis, the organic contraction was was 5%. In 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 1.7%.
So looking at consolidated severity. So those are two two separate numbers, and it's not the 5% does not include that 1.7. So it's 5% on our on organic and 1.7 on foreign exchange.
Okay. So maybe closer to a 3% contraction there. That's helpful. And then I'm just wondering when we're expecting the business to inflect as far as the organic growth coming back. Kind of see the near double digits that Safaria has seen in the past.
Like are we there now? Or is there a potential quarter upcoming where you see that potentially playing out?
Okay. Okay. I would take this one. Okay? And I tell you, okay, that we will you will see a major change, okay, in q two about organic growth.
Major change. And the change, okay, will be, okay, that I think we can be back, okay, in the eight to 10%, okay, just on organic growth, okay, to make our 1,000,000,000, okay, without acquisition, but we will see. No. No. We we are in the game.
You will see a q two. Q '2 is exciting. Okay? We know a little bit. Okay?
We are in the May. Okay? It's the half of the quarter. Okay? So far, if we are not if we don't and are able to know exactly or quite exactly, okay, the number of Q2, we have a problem.
Okay? But we don't have a problem. Okay? So we are excited. We see the booking.
The booking is just in Toronto. Okay? The booking is is up. Okay? 60% in April consider at the in April 21, okay, compared to April 20.
Okay? That's in Toronto. That's that's that's where we'll make our money. And and the and care is very happy. Okay?
They have good growth growth of any growth. So they are very busy. So when you put that all together, I am excited, okay, about the the number, okay, that we will show you in q two. And q two, really, okay, we'll have in care for three months, and we will have this red, like, exhibit, okay, battle, okay, pandemic to pandemic because last year, I can't give you two where we're in pandemic. Okay?
So and I speak to my people. I we don't have to beat the q two of twenty. We are run we are to have run we are run running about the Q2 of twenty nineteen. That's the real comparison that we can do. But you will see that now we will see some good growth.
Thank you.
Okay. Thank you. That's very clear. And then my last question is just on the cash generation. Was quite strong in the quarter.
Cash from ops was near $28,000,000 I believe that's a record for the company. Just wondering if there's anything particular to account for that generation.
Yeah. We have our specialists on that, Steve.
Yeah. Sure. So, just quickly, we have a payable for the remaining 4.6% of Handicare shares that we're yet to acquire. We're we're working towards getting advanced title on those, and we're in
the middle of the squeeze out process. So that's set up as as a payable,
and that's where that showed up in the cash flow. So that's that 19,000,000 is pushing that that 27,000,000 higher. So that's something that we're not gonna see continue.
Got it. Sorry, what was that amount that was in the payables?
It's about $19,000,000 20 million dollars 19 point 6 million dollars
All right, great. Thank you for taking my questions.
Okay. Thank you. Good day.
Your next question comes from Michael Doumet from Scotiabank.
Hi, Michael. Good morning, guys.
Hey, good morning. I joined the call a little late, I apologize if some of the 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 eight to 10%, that doesn't necessarily get you to, you know, twenty nineteen levels. So so for q two, is the is the idea that we sort of get back to above pre COVID levels, or is that gonna take a little bit longer?
You will see. Okay. You will see that we will be quite strong. Okay? And I don't want to promise something that they will not deliver.
Okay? But for sure, okay, we will beat beat the easy, okay, 2020. Let's start by that.
Okay. Okay. It it does sound like you're optimistic at least from a, you know, sequential perspective that there is improvement. So that's that's noted. And then 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 $1,000,000,000 in sales by 2025.
So using the 2022 consensus estimate for sales, I mean, that would imply about 10% annual growth, on 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?
Yeah. I don't think it's the right way, but I think like that. So where at least two things like that.
Okay. Okay. No. That's great. Okay.
And then maybe getting to the nitty gritty. And, again, I was late to the call, so if, you know, these questions have been asked, I apologize. But any way you can talk to the organic growth rate and the top line trends that you're seeing in accessibility for Handicare. If I remember correctly, Handicare's organic growth momentum was quite positive in the second half of last year. Was that was that maintained so far in q one?
Oh, yes. For sure. Okay. So they they they they have a very good q one. Okay?
And it's looking very good to have a good q two. Okay? And if we take everybody out to the better, okay, and the accessibility the accessibility, we will see, okay, go back. Okay? Maybe, okay, for near 10%.
Okay? That will will be until the end of this year. And I am very optimistic, okay, with we we seen our booking. Okay? Just even on the on the current salary, okay, our workers tell us, okay, we see a progress, okay, more than 50%, okay, in our manufacturing of of the curved stealth.
And even the straight, okay, we have a good improvement. So, you know, it it it's like the car. It's they are all together. Okay? So you you walk, okay, to another to another dealer.
So by the way, to buy to to buy end care, so that push ourself up so it can and plus we have our stay at home. Stay at home, okay, is very important. People are aging. Okay. When you are aging, you have problem with the steps.
Okay? And you we are several year to to help you. Okay? And as always, this is a beautiful industry. I was excited in the industry thirty years ago, and even I am more excited right now because, you know, our customer made you a check, okay, with a smile.
So this is tremendous, okay, to to be in an industry, okay, that you have the people. We are our foundation was going very well. We have gave just year, by the end of this year, we will have gave, okay, over 1,000,000, okay, in our foundation to the people who need some mobility. I am very, very strong on helping kids. Okay?
Kids is the future. But it's good to be able to do all that at Savaria. You know? You think about other peoples, our employee, okay, the the the the the they stay with us for years, years, and years. Okay?
Maybe I pay too much, but, I'm very happy that they stay. They are motivated and that the success, okay, that we have at Savaria. And when we have other people that they have the same spirit, okay, here we are, okay, the the organic growth is come back. You will see it Q2.
That's great. That's fantastic color, Marcel. I appreciate it. And maybe one last question. Are you seeing any green shoots on the commercial side?
And and do you have any views on the potential incrementals from the proposed American Jobs Plan? You know, that calls for about 400,000,000,000 of investment in eight years for care and elderly for people for elderly people with disabilities?
Yeah. So so so that's another good question. Okay. Nicola, okay, you are a specialist of tax. Okay?
We see that it's very good and cons very strong on construction. Okay? And the government, okay, want to push to have new home for elderly people. So, Nicolas, your
Yeah. Yeah. Maybe on on the commercial side, you know, in talking with our dealers and and speaking with, you know, the managers of our direct stores, I mean, they're they're sitting on some pretty good backlogs there for the commercial. They're just waiting for certain projects to to, I guess, to give get the green light. So what I would say is that as the commercial side, it's one where, your projects haven't been lost.
I think it's more a question of delays. I think that's how we should we we should think of it. And, and although there's there's limited visibility, think what we were seeing from the guys in the ground is that, you know, 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 reopening. So that's probably the best color I can give you as it relates to the commercial side and how, we're seeing that, you know, progress. As it relates to, you know, government spending, it's difficult for me to sit here and talk to you about, you know, know, Biden's plans in The US and whether they're gonna get passed. 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's there there is going to be quite a bit of of investment not only in long term care, but also as it relates to to aging in 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 and other facilities.
So I I do think that longer term, we will see some significant investment both on the government and on the private side, but it's difficult for me to give you any specific numbers as to, what that might mean for a proposal, right, 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. Thanks, guys, for the for the follow-up. Maybe another one, Nick, on on the patient on the patient handling.
Wondering if you're already starting to see the the benefits of the change in mix away from, I guess, the long term error, particularly as it relates to the exposure to to COVID.
I'm not quite sure I get what you're you're asking here in terms of the, the mix away from long term care. Are you are you speaking of you're treating patients in home, like home care the home care aspect of that business?
No. I'm I'm thinking about how how more heavily weighted the handicare was towards acute care, right, and all the problems they had in in long term care facilities in in The US.
Okay. The the one thing I I would note, just maybe a little difference between Handicare's business and and Span's business is that you're you're right. Handicare does have more exposure to acute care, in particular, The US. I think it's a bit more balanced here in Canada, but in The US, it is much more leaned towards acute care. One element about Handy Care's products and the way it works is that these are products that get installed.
So the ceiling lifts, it's project that requires, you know, planning, project management, installation. Many of their their sales are for new builds. And so that's something that's a little bit different than than than with Span is that, you know, new build facilities, there aren't any patients there. So it's much more easier to access, and so then it's not necessarily a question of your restricted access to these facilities during whether it be during the pandemic or in the current environment. It's just more of a question of, you know, 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 that helps to answer, but that that is kind of one of the reasons why we have seen some, I guess, some some increase. You know, I guess the the the revenue growth there has has been stronger as we've kind of exited the the pandemic period because they have had that exposure to certain, you know, whether it be the acute care space, you know, surgery is 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. No. Thanks. That's that's helpful. And maybe with just one final one,
just wondering if there's any more if you've been able to, I guess, see, any more improvements in the HandyCare side from the LiftUp, program, if you're seeing any more benefits from the LiftUp program.
Sebastian? Or or Nicolas?
I think that
I will start from basically, the lift up program is a true. Okay? It didn't we don't want to talk pretty much about it. It does happen at the beginning of Q3 last year. It's going to be fully rolled by q two so they that we get a full year benefit.
But now I think the biggest thing for Indicare is making their budget. They have a good budget on the table for 2021, both on the patient and link, the car, and the accessibility. And I think so far that's a good start. And we are starting to see is really the mix with the the cross selling of Garaventa in Europe. Already a few inclined sold.
Dealer are looking at it. And the next step, it will be really to do the curved stairlift manufacturing in Toronto. And this by the end of this year, we should see it. And this will really help us to a bit set for sure to save on the on some air shipping, some of the cars that we have currently have. And that would give us a better lead time to the customer.
Our target is two days instead of three weeks. So that will really add to put the sales to a new level, lucky of the curves to lift of Indicare in North America. So I think but really the lift up is over. Now we're really working on the new synergies with Garaventa and Savaria and stuff.
Sebastian, very helpful. Thanks, guys.
There are no further questions in queue.
So thank you very much, guys. Happy to be interested in Savaria, and thank you for my people with me Okay? You are just great. Congratulations.
Okay? And thank you very much. Stay safe.
You're welcome. This concludes today's conference call. Thank you for participating. You may now disconnect.