Savaria Aktie

Thank you. Good day and thank you for standing by. Welcome to Savaria Corporation's Q2 2026 Investor and Analyst Call. [Operator Instructions] Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your first speaker today, Sebastien Bourassa, CEO.

Thanks, Stephanie, and good morning, everyone. So today, I will start with a small recap of our Q2 results, then Steve will update us on financials, and JP will provide an update on Savaria One, followed by a Q&A session. So again, I'm very proud of the results of Q2 as it is our highest revenue ever at $246 million, with a growth of 8.4% that is well balanced between Patient Care and Accessibility.

And we achieved an EBITDA margin of 21%, which really showed that the Savaria One success over the last few years continues to be present, and I'm very thankful to our team for all the hard work that they make those great results quarter after quarter.

So today there's three things that I would like to highlight. First, the growth. I'm happy that we have a third good quarter in a row in terms of growth, which showed that some good initiatives that we have put in place for the next five years is starting to work. In North America, we continue to develop the market of home elevator with architect, builder, contractor, and of course, our dealers. We increased our sales focus on stairlift, Matot dumbwaiter, and material lift continue to have a push with architect and builder, and a good lead time is really helping this product line.

We added a state-of-the-art paint shop in Greenville for the manufacturing of a wood cabin, which will be in operation -- we're starting to be in operation in the third quarter for direct store and will be launched for a dealer in October, and that will really help us continue to have the best product offering feature for a dealer. And also a building expansion is on plan to open in Q4 this year. In Europe, we expand the one-stop shop, with Luma, the VPL, incline, and now with the VPL product line, it's pretty much a complete product portfolio. So that will really help us for the future, and we continue to be the partner of choice on stairlift.

In Patient Care, growth has been good since the beginning of the year, but margins are slightly behind what we desired as there has been a bit more inflation in this division than others. But we did a mid-year price increase, and I'm hopeful that by the end of the year, in the fourth quarter, you will see an improvement on the margins as before. The strategy to own the room and continue to develop the long-term care continue to be the core of activity of this division.

Second, best gross margins ever at 39.6%, which really shows that we continue to improve, we continue to have good initiatives, despite the small contraction we had in Patient Care in the second quarter. Third, Acquisition. As we said during the Investor Day, we have the ambition to do some acquisitions in the next five years for approximately $200 million, some small, mid-sized tuck-in that will help us in some areas where we see some more potential, or bring some new products to our distribution network to continue the best product portfolio with a one-stop shop.

So far this year, we did Baxter Elevator in Texas, which shows that we want to grow our presence in this booming market in Texas. And in July, we closed Vipal, a small manufacturer of home lifts and low-rise commercial in Italy, to help us to develop Europe with some code-compliant products. With our net debt-to-EBITDA ratio at 0.7 at the end of the second quarter, our liquidity continued to grow, and now at $333 million available for capital allocation, we are in a very good position.

To conclude, I'm quite happy with the first 6 months of this year. As we unveiled in the Investor Day, we have the ambition to grow the business at 12% per year for the next 5 years and maintain our margins at 20% plus, which ultimately will lead us to $1.6 billion of sales with an EBITDA over [indiscernible] by 2030. So thanks to all the people at Savaria that follow the next chapter of growth, and thanks for the analysts for your good work. Steve, financials, please.

Thank you, Sebastien. Good morning, everyone. I'll now provide some additional detail on our second quarter results. So key highlights for the quarter include, firstly, revenue grew by 8.4% in Q2, driven by organic growth of 6.6%. Year-to-date revenues reached $481.3 million, representing 7.7% growth on a year-to-date basis.

Secondly, adjusted EBITDA margin reached 21.1%. That's a 50 basis point improvement over prior year, driven by continued gross margin expansion across the business. And finally, our leverage ratio continued to improve, sitting at 0.87x as at June 30, giving us significant flexibility to support our growth strategy, including acquisitions and planned capital expenditures.

Turning now to consolidated revenues, we generated $245.8 million in the quarter. That's an increase of $19 million or 8.4%, as I mentioned, over last year. This includes organic growth of 6.6%, also a 0.8% contribution from the acquisitions of Baxter earlier this year and Western Elevator last year, as well as a positive foreign exchange impact of 1%.

Accessibility revenue reached 8.7% growth to -- sorry, increased by 8.7% to $192 million, mainly driven by organic growth of 6.4%. Sales increased in both Canada and the United States, while Europe continued to deliver another strong quarter supported by continued growth in stairlift sales. Patient Care revenue increased by 7.3% to $53.7 million, entirely driven by organic growth. This reflected higher U.S. sales and continued growth in the U.K.

Now, looking at gross margin and operating income. Consolidated gross margin was 39.6% compared with 39% in Q2 2025. That's an increase of 60 basis points. Gross profit increased $8.8 million year-over-year, providing testament to the continued success and ongoing benefits of Savaria One. Operating income increased by $9.1 million or 34.1%, to $35.8 million, representing a margin of 14.6% compared with 11.8% in Q2 2025. The increase was driven by higher revenue, gross margin expansion, lower other expenses, and the termination of strategic initiative expenses following the completion of Savaria One last year.

This was partially offset by higher selling and admin as we invest for growth. Adjusted EBITDA reached $51.8 million, representing a margin of 21.1% compared with $46.7 million and 20.6% last year. Accessibility adjusted EBITDA margin reached 23.6%. That's 170 basis points over last year's 21.9% margin. And Patient Care adjusted EBITDA was 18.4% compared with 20.9% last year.

Net finance costs were $1.7 million in the quarter compared with $4.7 million last year. Interest on long-term debt decreased by $1.2 million, mainly due to a lower debt balance. We recorded a foreign currency gain of $0.6 million compared to a loss last year of $0.5 million, and a net gain of $0.1 million this year on financial instruments compared to a loss of $0.7 million last year. Correspondingly, net earnings increased by 54.4% to $25.2 million or $0.34 per diluted share compared with $16.3 million or $0.23 per diluted share in Q2 2025.

Now, taking a look at cash flow and liquidity. Cash flow from operating activities was $33.3 million compared with $30.3 million in Q2 last year. The increase was mainly driven by higher net earnings and a favorable unrealized exchange -- foreign exchange gain, partially offset by higher income taxes paid this year. Cash used in investing activities was $13.4 million compared with $3.6 million last year.

We invested $12.5 million in fixed and intangible assets in the quarter, including $5.3 million for the Greenville building expansion and related equipment for that site. As of June 30, available funds were $333.4 million compared to $311.7 million at year end, and net debt decreased to $172.8 million from $191.5 million at year end. After quarter end, on July 1, 2026, we acquired all outstanding shares of Vipal S.p.A., a manufacturer of residential lifts and elevators based in Ferentillo, Italy.

Total consideration was CAD 13 million or EUR 8 million, subject to customary adjustments for net financial position and net working capital. Our Q2 results support our long-term outlook. Revenue grew by 8.4%, including 6.6% organic growth, and adjusted EBITDA margin reached 21.1%. Building on this momentum, we continue to target annual revenue growth of approximately 12% through 2030, while maintaining adjusted EBITDA margins of at least 20%.

And with that, this concludes my prepared remarks. I'll now turn the call over to JP for additional comments.

Thank you, Steve, and good morning, everyone. So today I'll speak about 3 things, how Savaria One is fueling growth, how Savaria One is also helping us with better margins, and a little bit about the Vipal acquisition. But for me, the key message is that year-to-date, we're on track with our objectives of organic growth for the business as well as profitability across the board. For example, the fact that both segments grew 7% to 8% in Q2 is a big success.

And the growth we see is balanced across product segments as well as across geographies. But a lot of this is due to some efforts we did in the recent past and in the last two years. So I'll give you a few examples. In the Patient Care business, we had a lot of success in Q2 installing ceiling lifts, but that is in part due to the fact that we upgraded our ceiling lift lineup with the M-Series and started selling it about a year ago. And with that, we won bids that we installed in Q2.

Also in Silvalea in the U.K., this is a smaller part of our business, but still strategic. We moved to a new factory about 1.5 years ago, which allowed us to have better production capacity. And now we are selling into the NHS. We're able to grow this business because we can produce more at a good price.

We also revamped our lineup of slings for Silvalea, so that's also helping the business grow. Another thing that's important in Patient Care is that we did improvements in the sling manufacturing of St. Louis and also worked with external partners to have more capacity for the disposable slings. And now we had a good growth in sling sales, which we were able to ship, thanks to all these efforts we did in the past.

Finally, it's worth noting that we also established a dual assembly line, so we can now assemble the M-Series ceiling lifts, both in Canada and in the U.S. in St. Louis. So in the current context, we can really assemble close to the market. Now, in Accessibility in North America, as Sebastien mentioned in his address, we had great growth again across the board. It's been a consistent theme for North America.

But one of the highlights for me is the growth we had in our direct stores where we made deliberate efforts for years to develop our referral networks, to do education with our architects, to also go and work with contractors and promoters of multi-unit residential projects who now spec our lifts in their offer, and that pays us. So now our smaller direct stores have orders for multi-unit projects that are very substantial.

And finally when we bought Matot, we spent a ton of efforts to in-source production in Brampton to make the production process also faster and leaner. And this is paying off because now we are growing Matot sales, but we're also able to produce and ship in much shorter lead times than we used to in the past, and that's helping our sales.

Finally, we also migrated our website to a new domain this quarter, and the website has been redesigned to provide us better domain authority as well as enable better AI search visibility, which is critical in the current world. In Europe, we re-engaged with growth by winning back historical dealer relationships, thanks to our consistent efforts in improving product quality. We also expanded cross-selling of platform lifts, so we're now selling Artira and X3 platform lifts across all markets in Europe, including in our own direct stores in the U.K. and Netherlands.

We also continue to drive growth in the largest direct markets by having innovative commercial strategies and just great delivery overall consistently. We also see that now we -- not only are we recognized for better quality, but we are starting to introduce new product innovations. For example, we introduced the K2 stairlift earlier this year. And just now, we changed our new outdoor rail for the 4000. So that's a new offering that we think is going to have some traction.

And finally, we made a number of small commercial changes that make it simpler to do business with us. So the overall message for me is that we are rigorously managing growth initiatives in Savaria One, just like we focused a lot on cost initiatives in the past. This being said, we continue to also improve our costs, and you can see it in the expansion of gross profit and the expansion of the bottom line results.

Each month, we continue to implement initiatives. So for example, in Q2, we implemented at least 50 new initiatives. And a lot of those relate to procurement to reduce the cost of goods sold. And you can see that, that shows in our financials. And this is especially relevant in today's world because we know there is inflationary pressures across the board. But in most of our businesses, we're able to offset those with either efficiency gains in production or material cost reductions, thanks to our initiatives.

The only exception this quarter is Patient Care, where, as Sebastien mentioned, we had some great pressures from some commodity cost inflation that we now need to counter with some price increases mid-year. So, our focus as a business continues to be on growth, and this is where most of our attention and our efforts are oriented towards, but people working in the factories and people working in the offices on procurement continue to innovate, continue to improve our business nevertheless, so we can improve our cost position.

Finally, the last highlight for me from Savaria One is the capacity expansion in Greenville, as Seb mentioned. So I'll be brief, but the fact that we now have -- we already were assembling Eclipse in Greenville for months, but every quarter, every month, we are expanding the capabilities over there. We also had investments of new machinery. We commissioned the paint line, which is very critical to have a high-quality cabin built and shipped in the U.S. And over time, we are shifting more and more orders from Canada production to U.S. production for the U.S. market.

Third topic for me is the Vipal acquisition. So just a bit more details on that business. We closed the acquisition in early July. It is a strategic acquisition for us because of the know-how of this team at Vipal in the lift business, because the fabrication process is largely in-house, and because the technology is well known and renowned in Europe. What happened is very shortly after, 2 weeks later, we had a large group of our global leaders including myself and Sebastien, who went there to kick off the integration plan.

So we already are in motion to integrate the business. And in fact, I am speaking to you from Italy, where I'm doing a roadshow with the sales team of Vipal this week to meet our top leaders and their top dealers, so we're definitely in motion. And we are already seizing opportunities to cross-sell in both ways. So meaning we can cross-sell our products to their dealers, and vice versa, we can sell Vipal to our dealers.

And this is going to be an integration that will take years with different steps. So we are very excited about the acquisition. We got a lot of ambitions for Vipal, but of course, we'll go step by step, first by selling the products that they have today and over time improving the operations, improving the products and really integrating them in our business. So in conclusion, we see good performance year-to-date and in Q2, and that comforts us that there's a clear link between our efforts in Savaria One and the results we see in the business. Thank you. That's it for me.

Seb, over to you for closing words.

Thank you, JP. A very good color on the Savaria One improvement. So I guess we are ready for questions. So, Stephanie, can we open the queue, please? Thank you.

[Operator Instructions] Our first question comes from Frederic Tremblay from Desjardins Capital Markets. Your line is now open.

Just maybe following up first on the Vipal. You mentioned, you're already seizing opportunities to cross-sell. Just wondering, I guess -- I think I know the answer, but what was the initial reaction from Vipal's dealers to Savaria One's acquisition of the company? And how do you think about introducing your products to the Vipal dealers going forward?

The best person to answer is JP, because, JP, you're in Italy this week meeting dealers, right?

Yes, yes, exactly. So I met 5 already and I have 5 -- a couple more tomorrow. But honestly, the reaction was very positive on both sides. And you're always a bit apprehensive when you do something like this, but I was pleasantly surprised. Everybody's excited. I think their dealers are excited because they see Savaria as an established, well-structured company, and they also are now curious. They're learning about our products because most -- what happens is most of Vipal's dealers are lifting companies that do mostly lifts or residential lifts and sometimes it's a real, we call it ascensori in Italian, but it's like faster, larger lifts.

But they always have a small part of their business, which is platform lifts or some requests for stairlifts. And now there -- many of them have been happy to see that we have this offering, and we already received some orders from dealers that said, "Okay, I might as well work with you. I like Vipal, so why not work with Savaria?" So that's been their reaction and on our side, many of our dealers, especially in Italy, knew about Vipal, so many of them, again, in the Accessibility space, it's the opposite.

They tend to have a small part of their business which is selling home lifts. So now we're introducing Vipal to them and their reaction was very positive. They like Savaria. What they recognize in Savaria is the quality of the support and customer service and technical support they get. So they are now keen to see, "Okay, maybe we can try the Vipal products," and if we can provide the same support, they'd be excited to work with us. That's the feedback I'm getting.

Yes, that's great. And maybe just to get a sense of the opportunity. Just wondering if you could remind us how many dealers and direct stores that Savaria has in Europe? And how does that compare to the number of dealers that Vipal currently has?

Yes, so high level, it's a tricky question because we have, I think, more than 325 dealers, if I recall, across Europe, okay? But the reality is in each market, this is -- not all dealers are equal, right? So there's some dealers that are much larger than others. But in comparison, Vipal had, I think, less than 50 dealers, okay? So that's the kind of size of the opportunity. And our dealers are across Europe. Vipal was much stronger in Italy than the rest of Europe.

So there's a lot to be -- of opportunities for us to grow the business. And it turns out, the last thing to know is that there's not that much overlap between our dealers. So that was an interesting, like a positive surprise for us, that our networks are actually complementary. So a lot of the dealers are new to Savaria, and vice versa.

Okay, great. Maybe just the last one for me quickly. Adjusted EBITDA margin in Accessibility was really strong in the quarter at 23.6%. Just wondering if you could -- maybe if there's a couple of main drivers to highlight there behind that strength and just your thoughts on sort of the sustainability and potential to expand that Accessibility margin further in the coming quarters and years.

Good question, Fred. Yes, I'm very happy with that. And I think it shows again the strength of Savaria to be able vertical integrated. We have factory in China, Mexico, and everywhere where we operate, we have machines, we make parts by ourselves. There's 32% of our sales, which is in our direct market. The rest is with partner distributors. So I think, again, the proof, okay, and the vertical integration is quite important, it's good.

And after that, product mix. Every year, we bring new products with good margins when we -- so I think it's always contributing to that. The 23%, I think for sure is -- I hope it's sustainable, but we have to be careful because when we make acquisition, they are lower than that, so it might play a bit in the average. So I think if we go back 4 months ago, we said that in the next few years, we want to be at 20% plus for the consolidated Savaria. But you can see that it is a good opportunity.

Great, thank you and congrats on this strong quarter.

Our next question comes from Cheryl Zhang of TD Cowen.

Congrats on a strong quarter. I wanted to start on Patient Care margin. I think, in the prepared remarks, you called out higher material costs and the mid-year price increases for mitigation. Just curious if you could expand on what the cost inflation was and the magnitude of the pricing that you're putting through?

Thank you, Cheryl, for the question. Again, we have to be careful, okay, because Patient Care, I think we're a bit tough with them this quarter, okay? If we look, we had good growth in the beginning of the year. And yes, there's been a bit more inflation due to the -- some commodity like, for example, foam and aluminum. But now that the team came back, they said, "No, there's inflation, we have to pass it on to our customers."

So that was their suggestion to do a mid-year price increase. And basically, I'm hoping that we'll get an additional 2% in the fourth quarter in terms of net increase. So I think it's temporarily, but again, we need to be careful. It's just one quarter. What is sometimes more difficult is the growth. And we know also in Patient Care, they typically have a good fourth quarter. So I think maybe at the end of the year, we can judge if it was just a quarter or it's a year issue.

Okay. That's very helpful color. And then on Accessibility, obviously, very strong organic growth. Could you maybe expand on what you're seeing in terms of consumer demand and where your backlog is?

Our backlog is still good. Unfortunately, we don't give color on our backlog. But no, in our direct office, I think JP said, we have a healthy backlog, so it would give us a good visibility in our factory, okay. For sure, we always want to have good lead time. So our backlog is usually consistent. But I'm quite happy with that.

And I think new product that we launched, for example, the Luma, new through-the-floor, that really was the first year we have that. We're coming out with some new option, okay, this fall for the through-the-floor elevator. So definitely also the new product are helping, like Matot, now we're doing pretty good in manufacturing in terms of lead time. So that's helping to grow the business. Again, the beauty of Savaria is the diversification that's really helping us to maintain this growth.

Our next question is from Razi Hasan of Paradigm Capital.

JP on Europe. Can you maybe just talk about the M&A landscape and the quality of assets and multiples you're seeing for manufacturers and dealers there overall? And any challenges you're seeing in Europe on the M&A landscape?

If it's okay, I will take the answer. So basically, I think we have disclosed in the document that -- and for Vipal, we have paid EUR 8 million. It was more or less EUR 8 million of sales. So could it -- it was a 1:1 ratio with the sales. In terms of EBITDA ratio, again, it's just we don't disclose that usually, okay, how much we pay each division when it is some small tuck-in.

So in terms of M&A landscape, I think, again we like to balance our approach. It was a long time we did not do one in Europe, so I think now that really adds a portfolio, but we'll see over time, if there's -- worldwide, if there's some opportunity with dealer or again small manufacturer of elevators that can complement the product portfolio.

And then maybe on Steve, again, lots of talk about the Accessibility segment. Maybe just talk about the puts and takes in operating leverage that you're seeing there and what's driving that?

Yes, on the Accessibility on the gross margin specifically, good uptick in both of our regions, both of our key regions, North America and Europe, both had really strong gross margin improvement over prior year. That's driven by operating leverage. We feel we have enough capacity at our existing sites and then we have -- obviously with some acquisitions like Vipal is a perfect example, we're expanding our footprint, which comes along with the acquisition, but it's not needed necessarily to support our growth.

So we're doing a good job of keeping our fixed costs fixed and stable while we're growing the top line. Some other benefits that we're seeing are procurement coming through and pricing increases. Those are continuing from previous quarters and previous years. And that's what's going to be continuing to drive our gross margin expansion. So our guidance is above 20%, but we're confident that we can continue to increase the underlying margin in our existing businesses.

Okay, great. And just lastly, just to confirm, the Greenville, are you guys expecting that to be in operations by Q4? Or is that Q3? I think I missed that.

Again, we've got to be careful in Greenville, we decided a year ago to start manufacturing one of our key products, the Eclipse home elevator. Right now, we manufacture 40% of our Eclipse in the U.S. Again -- so we are in operation in Greenville. The only thing, we're expanding the building, and this expansion is planned to be ready in Q4 as planned earlier this year.

Our next question is from Zachary Evershed of National Bank of Canada Capital Markets.

Congrats on the quarter. I have a couple questions for you on Greenville. It does seem like that's going to come in well under budget. Is that the case?

We have got to be careful. Again, if we go back to the press release that we did a year ago, we wanted to make an investment of $30 million. So a portion is for the building, a portion is for equipment, a portion is for inventory. Now we are -- again, we started last year, so it's ongoing. And maybe it's going to take a bit more time. But I think the range of $30 million is -- we'll probably finish a bit lower, but I think it's a good target. Maybe it will take a bit more time. But this year, the business will be finalized. In the future, maybe more inventory or machinery that we would like to add.

Understood. And on that equipment, could you tell us a little bit more about what the paint line will be able to do?

The paint line is amazing. It's fully automated. And again, all our -- most of our cabins in North America are made in wood. So typically, you can have some melamine, wood veneer, but this new equipment gives us the ability to do some enhanced cab with very high-end quality of paint, fully automatic, and this is something we're going to be able to differentiate ourselves to have a better offering for our customer to upscale the elevator. So we're quite excited with that. It went live in the second quarter. Now we're making some tests with our direct office to make sure it is perfect and we'll be live with a dealer in the fourth quarter. So very exciting.

Excellent. And just one last one for me. From a human capital standpoint over in Europe, what's your capacity for concurrent M&A? Is there a limit there?

JP has a very good team. But JP, you want to give a little bit of color on that?

Yes, yes. So we had the discussion internally not later than yesterday. And my point of view is, we have the capacity to take more than one. Because the reality is we have different -- first of all, we're in different markets, right? So when we make an acquisition in the market, if we need to integrate the commercial aspect, we can ask the local team to integrate and then from a functional standpoint we have a pretty good team. So I think we can have multiple acquisitions concurrent, yes.

Our next question is from Justin Keywood of Stifel.

Nice to see the results. Are we able to have an update on Savaria Link and how that technology offering is going to drive services revenue? The percentage of services revenue as far as total sales would also be helpful in how you see that progressing.

A very good question this morning. I guess you came to the Investor Day, huh? So, Savaria Link is a very nice feature. Again, if you go back in time, we bought an electronic company a few years ago in U.K. called [ Ultron ]. So, we designed our own electronics and that gave us the ability to gain some nice feature. So, yes, we have a new version, improved. We did Wi-Fi monitoring for many years, but this year, we have launched a new improved version. We started to drive it across most of our products. And this is something that is helping to monitor the status of the elevators and the stairlifts. So I think definitely this brings a good future in terms of that.

Right now, again, we are -- it's part of our product offering, so we don't upscale the sales for that. It's included in the product. And that gives the tools to our customer, again, to know what's happening with their product, their dealers, I mean, to know what's happening, to be easier to troubleshoot, to make sure, you want to work with us for our product in terms of feature. In terms of service revenue, Steve, what percentage total, we are at right now, approximately 15% of our total service revenue. So again, when we have direct office, that's an opportunity for us to improve the service and maintenance. So that's quite interesting.

Thank you. And I assume there's some higher margin with the services revenue. Any context on what that margin profile is?

Unfortunately, we don't disclose the margins per product or per segment. But definitely, for sure, when you have the chance to capture some recurring revenue for maintenance to be able to service it, yes, it's quite interesting. So that's the beauty of Savaria. That's why you see the very good margins in Accessibility, because again, we can have also this additional bulk with the service and maintenance.

And just finally, is there a target percentage of sales as far as services revenue to get to, let's say, on the 2030 target of $1.6 billion in overall sales?

No, I think we did not set up an exact target to the public on that, but for sure if we're at 15 now, you can expect that it could grow over time.

[Operator Instructions] I'm showing no further questions at this time, so I would now like to turn it back to Sebastien for closing remarks.

Thank you very much for all the questions from the analysts. You know well the story. You have some good questions. So thank you again for the support. I think it was a good quarter, quite happy with that. And I guess we'll go back to work -- to work on our third quarter to make sure we can continue to have those great results. So thanks again for the call this morning.

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

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. [Operator Instructions] 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, with respect to its Q1 2026 results. Thank you. Mr. Bourassa, you may begin your conference.

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 financials, and JP will provide us an update on Savaria One and Europe, followed by Q&A. 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 40 quarters, 39 out of the 40 we have beat the previous year. So I think for me, it's very good proof that we were 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.

With sales of $225 million, up versus last year and right away in EBITDA in the first quarter of 20.4% of EBITDA, all KPI improving. So Steve 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 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. So we talked about that during the Investor Day a few weeks ago, but continue the effort to develop the market in North America for home laboratories is a priority, and we see some traction. The increased effort into stairlift in North America, continue to expand the Matot dumbwaiters 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 Luma, the VPL and the incline lift, I think we start to see some traction to be the partner of choice in stairlift, I think JP will talk later, but we have a good traction in Europe in the last 6 months. So 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. And also a Greenville building expansion to be more diversified in our manufacturing in North America is progressing well, and the expansion should be completed in the fourth quarter 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 $200 million on small, midsized. 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. So I think it's always a priority. I would say with our net debt-to-EBITDA ratio of now 0.92x and liquidity available of $325 million -- $324 million, excuse me, for capital allocation and M&A, I think we're in a very good position.

So to conclude, I'm quite happy with the start of 2026. And 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%. 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 EBITDA per share of $4.25 by 2030. So thanks again to all the employees for the effort in this new chapter of growth.

Steve, financial, please. Thank you, Sebastien, and good morning to everyone on the call. I'm now going to provide some further detail and commentary regarding our first quarter results. 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. And lastly, our leverage ratio is now under 1 at 0.92x.

Now looking at consolidated revenues for the quarter. We generated revenue of $235.5 million, an increase of $15.3 million versus last year. 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%.

Our Accessibility segment saw growth of 7.9%, driven by strong growth in stairlifts 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 U.S. dollar currency. 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. 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. And furthermore, operating income 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. 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. They were $3.1 million for the quarter compared to $3.5 million last year. Interest on long -- 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 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. 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 $0.31 for the quarter versus $0.17 last year. 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. 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. This is in line with our guidance, and this includes approximately $1 million, excuse me, for the building expansion in Greenville. We also disbursed $2.1 million for business acquisitions, largely attributable to Baxter Elevator, our new direct store just outside Dallas, Texas. And we have now $324 million of funds available under our current credit facility as of March 31. And as previously stated, our leverage ratio has reduced to under 1 to 0.92x.

On April 14, 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 $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. JP?

Yes. Thank you, Steve. Good morning, everyone. On April 14, we provided a lot of information on what happened in the last 2 years with Savaria One. 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. 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. 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. 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. 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? 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 in alive. 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. 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 have 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. And the main reason we 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 we deliver on our promise. 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 stairlifts and platform lifts. 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. So we make our long-term care beds in Beamsville. And what happened is in the last 2 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. So 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. 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 a number of them. So 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 U.K. has always been a large direct store for us in Europe. And now the U.K., thanks to our efforts in the last years, is really performing well in terms of both of profitability, but also growth. 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. 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.

Another one for us is Matot. So about 2 years ago, we acquired Matot, and that was really a great example of well executed, but it took time, integration. So the first thing that happened is we had to integrate the operations and actually close the Matot factory and really internalize it in Brampton. 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 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. 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 Matot value prop is to our dealers, but also to specifiers and architects. And what we see now is the order intake for Matot 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.

Finally, the last one that 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 our 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 a different product range, but also 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.

So we've been pretty much protected from all these different difficulties that some of our competitors have because we have this -- our own electronics department. 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. 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. 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 stairlift business in Europe, and now we're making real efforts to develop our platform business outside of Italy, which is the core.

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. 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. 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 -- mattress, sorry. And now we're about to finalize the new bed lineup. So Beamsville is not only doing great today, but we will have new beds to sell, which are more modern, more interesting for the patients and for the caregivers.

Finally, in Europe, we have a number of product launches at the moment. So we are launching a new straight stairlift in the coming weeks or days. And we also have field trials for a number of different products, including platform lift and stairlift. 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. 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. And I think one of the reasons we're so 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 they are more efficient and more effective than before. So we're very -- yes, 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 good momentum, and we're looking forward to see the results in the coming months. Thank you. A closing words for you, Sebastien.

Thank you, JP. Very exciting. So I guess, Rory, we are ready for some questions.

[Operator Instructions] Our first question comes from the line of Cheryl Zhang of TD Cowen.

So 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?

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 and long term. 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. But also now we have been doing quite good in terms of housing, home elevators. So I think that's continued to go well.

Okay. And then on Patient Care, U.K. business is still small, but could you highlight what's driving the increased sales there?

Yes. So Patient Care in U.K. and I think we have been a very long time historically that we are Silvalea with manufacturing some sling, but that's something we have expanded on the one-stop shop to be able to offer some ceiling lift, some [ carry stock ]. And I think the team of Gary in Silvalea is doing quite well and expanding their territory. So I think we continue to see some good growth over there. And also, we have been able to list our sales offering on some different organization like NHS contracts. So I think that has helped us with the group.

Okay. Then maybe just a 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?

Sorry, I'll take on that again, it's multiple years listing, but we are listed in many different contracts across the world in North America, Europe. So I think we don't disclose on each contract one by one. But no, that's a very positive thing that we have been listed. That's opening the eyes for more sales in Europe U.K.

[Operator Instructions] Our next question comes from the line of Frederic Tremblay of Desjardins Capital Markets.

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?

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, also in acute care. 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 financial, but no, it's part of our strategy to be better in home care to have the right offering.

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 in both Europe and North America?

I think without making big forward-looking statement. But I think the good news, Fred, again, our 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. So I'm expecting to see a good second quarter, a good year, I would say.

Our next question comes from the line of Michael Glen of Raymond James.

To start from my standpoint, when I take a look at what are 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 -- and 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?

Maybe I will start and Steve will complete. So I think, Michael, what is going to see is everything we have done in the last 2 years is usually sustainable, okay? So I think that's a positive. And now that the team is always driven initiative, we do R&D, we launch some new products. So I think the incremental business is continue to be quite good. And I hope that the margin in the legacy business will continue to expand. But for sure at one point, it will expand a bit slower. And I think -- and fortunately, the next question is why we have kept this 20-plus EBITDA guidance and sort of raising this up.

But not to forget is when we do acquisition and we want to do acquisitions, typically, they are a bit lower in terms of EBITDA, and it takes 2 years, 3 years to bring back to the right level. So I think the mix of all that will make us successful in the future. But 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. And after that, maybe there's a bit of noise at different place with inflation, freight this, that. But all those good initiatives make us be successful to offset the little negative that sometime is happening. Maybe, Steve, anything you want to complement?

I think that was comprehensive.

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 U.S?

Again, as of right now, again, things are -- 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. So all our finished goods remain 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. 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, we do approximately 50% of our home elevator Eclipse in the U.S., and we're adding some new capability with the expansion to increase our offering. So I think, we will be able to flex with this U.S. manufacturing to make us less dependent on the border. I think that's the objective.

Okay. And then can you remind us, Stephen, 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?

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. 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.

On the CapEx front, typically, we've been 2% to 2.5% of sales. This year, it's going to 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 going to be slightly higher than 2.5% this year, but that's all going to be due just to the Greenville expansion. So we're going to be lower than 3%, but likely above 2.5%.

And Michael, just to add on that, I think it's a very good news because we are very committed to continue to be better. So every year, we have projects to invest in machinery to have the best machine to be more efficient and have to have the best factory that we can have capacity for the next few 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 ones to organic growth. So I think this commitment of CapEx is very important for me to be able to continue to grow the business.

Yes. 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, but I know it's uncertain.

Okay.

Our next question comes from the line of Razi Hasan with Paradigm Capital.

Maybe for Steve, can you just remind us on the impact of seasonality on EBITDA margin?

Yes. 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. 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.

Just one thing I would like to add, since Europe has been better in the last few years has been a bit more difficult. There's a bit less seasonality in the stairlift business than there is in home elevator because you don't need construction to make stairlift. So it's hard a bit to compare the season 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 helps for the group.

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

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

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?

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

And I think new products also a one-stop shop, we repeat it often, but I don't think it's been affecting the results yet, 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 this growth in Europe.

Yes. And with the new straight stairlift.

It's very good news.

Our next question comes from the line of Justin Keywood of Stifel.

Nice to see the Europe organic growth rebound. Also see that Canada was up nicely, but the U.S. was relatively flat. Just wondering if there was anything to account for that in the quarter?

Yes. So I mean, U.S., 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. 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 versus the Canadian dollar. So U.S. 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.

Are you able to parse out the volume growth without the FX in the U.S. market?

I mean we -- yes, we don't give that level of detail, Justin. I mean we disclosed the total growth by market and we disclose total by segment, but we're not -- we don't disclose that level of detail. We do -- 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, and they were slightly lower than that in Patient Care.

Should we expect rebounding organic growth quarters in the U.S. for the rest of the year? Or is Europe and Canada going to be the main drivers?

U.S. is our main market. So I think no need to be worried about that. And there's enough initiative, as I disclosed in my statement and during the Investor Day. So I don't think U.S. is a concern. It's still very good for us. Again, it's just some FX noise. But sometimes, what's good about Savaria is we have multiple currencies. Sometimes you win on one and you lose on the other. So at the end, that makes us a bit of natural hedging.

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 and if there's any other details around that?

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, and that's an acquisition within a few years ago, 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. And right now, that really help us to monitor the products that you can see from the back office. If Mrs. Smith, okay, stairlift is not working in the morning, you will be able to call her before she calls you. And 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, 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, and we want to change a bit the way we -- our technician are able to troubleshoot the units. So I think it's very interesting. And for sure, the -- for us, yes, we have service spare parts as a small portion of our business. It's more important we are direct. But if we can bring these tools to a dealer and make their life easier, at the end, we will win.

And I assume the services revenue has a greater margin contribution?

Typically, service and parts is very interesting, yes.

Our next question comes from the line of Nathan Po, National Bank Capital Markets.

Accessibility in Europe showed some impressive year-over-year growth and stairlift was mostly called out in the commentary. When do you expect to see contributions from Luma and Multilift sales and actually the straight stairlift as well?

Yes. So I mean, we are selling those already, just so you understand, but we're -- it's small numbers now. So if your question is when is that going to be material, it will take probably several months still because for these products, we -- it takes time to build we have great interest, for example, for Luma, our dealers started to install it in their showrooms, right? So we had -- 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.

And Multilift 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 2 years, that will be adding to our results, but the real bulk like what will 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.

All right. 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?

Yes. 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 initiatives in procurement efficiency. 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 effective the dealer pay, the customer pay for that. So that will be not affecting so much of business. And the fact that we remain very vertical integrated. We make parts our sales, that's our factory, that's a machine that's our employees. I think that's really helping us to control our costs. So, so far, we are looking good.

Good color. And do you have any view on the potential impact of Section 301 tariffs?

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, there are tariff exempt. So we do not pay tariff. Is there sort of small noise on spare parts. The answer is yes, but we have countermeasure to improve that. And I think so far, our results are embedded with what's happening.

Okay. Great to hear. And 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? And maybe take us through your decision on whether you want to build or acquire your way to that?

Well, to some extent, I can speak to it. 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. 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, we can do ceiling lifts even in long-term care. We didn't have necessarily all the accessories around this, like the case goods, for example, and we currently distribute some other products like floor lift. So this is where our attention is to make sure we have a better offering for all these adjacent products.

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 equipment are highly specialized. So this is something we're discussing internally. We're looking at, but we don't have necessarily something to disclose at this time.

Historically, we like to manufacture what we sell, okay? And Patient Care is a bit more special because to own the room. But at the end, long-term strategy, we want to manufacture our own products.

Our next question comes from the line of Jonathan Goldman of Scotiabank.

Just one for me. I noticed you didn't break out Accessibility organic growth between Europe and North America this quarter. I just want to get some background on the rationale for that. And maybe you can help us give a little more color on the trends in those respective businesses. 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. But maybe you can give us how those trends have developed in Q1 or any way you want to talk about it?

Jonathan, I want to start and Steve will complete. So yes, again, we have two segments, which is Patient Care and Accessibility. Now within the last 2 years, yes, we have break down Europe and North America. And now that Europe is back to contribute a similar amount as North America. We decided to -- we don't break our sales for Asia, for Europe that and it started to be a bit too complex. This is the organic growth. This is the FX. This is the acquisition growth. So we have decided to simplify the information for the reader, and this is a permanent change that we're going to continue like that. And at the end, that's an important one to achieve 1.6 billion by 2030. So that's why we have decided to make this change. Steve?

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. 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, and that's why maybe there was 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.

[Operator Instructions] I'm showing no further questions at this time. I would now like to turn the call back to Mr. Bourassa for closing remarks.

Thank you to all the analysts. We have some very interesting questions as usual, and I think you understand well the story of Savaria. 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. 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. And thanks for the call, Rory. So I guess we will go back to work, guys. Thank you.

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

Good morning. My name is Daniel, and I will be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q4 2025 Investor and Analyst Call. [Operator Instructions] Please be advised that today's conference is being recorded.

This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on March 4, 2026, with respect to its QX 2025 results. Thank you. Mr. Bourassa, you may begin your conference.

Thank you, Daniel, and good morning, everyone. Today, I will start with a small recap of our Q4 results. Then Steve will update us on financial, and JP will update us on Savaria One and Europe, followed by a Q&A session.

Once again, I'm very proud of our Q4 results. As for the first time ever, we reached $51.3 million of EBITDA at 21.2%, which is a very important milestone and our best quarter ever. We finished the year with sales of $913 million and an EBITDA of $186.2 million at 20.4%, which again is our best result ever. All KPIs are improving, and Steve will go more in detail later.

Today, there's 3 things that I would like to highlight. First, thank you. Yesterday marked the 5-year anniversary of Handicare acquisition, and I need to say that I'm quite proud of all the work that has been achieved since the beginning, especially through Savaria One. It's not the same company anymore, and you can see it in the people, in the operation, in the product portfolio and recently, the change under Savaria brand in Europe. So I'm very optimistic about the future and the growth and the profitability. Also, I would like to highlight the performance of Garaventa North America in 2025. It was a record year for the team in Vancouver and North America. So congrats to all the team.

Second, growth. I'm quite happy with the way we ended the year as we had growth in each area. And it is the pillar that was a bit behind in the Savaria One as naturally commercial efforts takes more time usually to pay off. And here are some example of the recent effort to have to generate some future growth. We continue the effort to develop the market on home elevator in North America, increase our sales effort in North America, continue to expand the Matot dumbwaiter material lift line of products. Business development activities are always ongoing so that we continue our growth and be a market leader. Expand the one-stop shop in Europe, talk about it for a long time, but it's coming, the Luma, the VPL, the inclined lift, so that will give us a good future. Continue to be the partner of choice on stairlift in Europe. And in the patient care, on the room and continue to develop the long-term care segment as well as the acute care. It's just some small details, and we'll try to unveil more detail during our Investor Day on April 14 as well as our 5 years financial target.

Third item, acquisition. We have demonstrated in the past that we can do 3, 4 acquisitions per year to bring additional sales and EBITDA. And now with liquidity of $312 million and a debt ratio of 1.03, we can easily invest $200 million over the next few years and maintain an EBITDA debt below 2, which has been always a comfort zone. With the best team ever, we feel quite good that we can apply the learning over the last 2 years towards integration to make it successful faster. The recent acquisition of Baxter Residential Elevator is a good example. Small tuck-in, but very strategic in a high potential area. It's one of the most area with the best housing start in North America. We will invest more to develop this area with our sales force, our marketing to become a dominating player in Texas. So welcome R&D and all the team in the Savaria family.

To conclude, what allows us to beat each quarter after quarter in the last 2 years is the new Savaria One culture. It's part of our DNA, and it make it normal to always have continuous improvement and what we implement is sustainable. Once again, thanks to all the employees for their efforts over the last 2 years and looking forward to this new chapter of growth.

Steve, financial, please.

Thank you, Sebastien, and good morning to everyone on the call. I'm now going to provide some further detail and commentary regarding our Q4 2025 financial results.

Key highlights for the quarter include: firstly, our adjusted EBITDA for Q4 reached $51.3 million, which is our highest quarter ever and represents growth of almost 20% over prior year. The corresponding margin of 21.2% represents an increase of 200 basis points and brings our 2025 year-to-date margin to 20.4%. This EBITDA performance was driven by revenue growth of 8.3%, made up of almost 8% growth in Accessibility and 10% growth in Patient Care. And lastly, our Q4 ending leverage ratio was 1.03, which reflects a decrease of $71 million in our net debt versus the same time last year.

So now going into more details. Consolidated revenues for the quarter were $241.8 million, an increase of $18.4 million versus last year. This was driven by organic growth of 5.2% as well as a positive foreign exchange impact of 2.5%. Our Q2 acquisition of Western Elevator also provided revenue growth of 0.6%. Our Accessibility segment saw growth of 7.7%, including growth of 7.2% coming from North America, combined with a strong growth of 9% in Europe. Europe recorded positive organic growth this quarter, and we feel that we have turned the corner there. Patient Care achieved a revenue growth of 10% in Q4 to bring the full year revenue growth number for that segment to almost 5%.

Our consolidated gross margin for the quarter was 38.9% compared to 37.7% in 2024, and our operating income increased by 36.6%. This performance is mainly driven by the Accessibility segment due to continued improvements under Savaria One as well as operating leverage. As mentioned, adjusted EBITDA was $51.3 million for the quarter, marking our first quarter above the $50 million threshold. Adjusted EBITDA margin finished at 21.2% for the quarter versus 19.2% in Q4 2024. And the Accessibility segment finished at 23.4%, while Patient Care finished at 19.4%. Our full year adjusted EBITDA margin was 20.4%, which is above our goal of 20% that we set over 3 years ago. We also incurred $4.7 million in strategic initiative expenses for the quarter. This quarter marks the last quarter of consulting fees related to Savaria One. We also incurred $1.8 million of other expenses in this quarter, and that's related to optimization and one-off costs.

Finance costs for the quarter were $4.8 million compared to $2.4 million last year. Interest on long-term debt decreased by $1.3 million due to an overall lower debt balance and a reduction in variable interest rates. We also incurred an unrealized foreign currency loss of $1.7 million compared to a gain at the same time last year. Net earnings was $20.5 million for the quarter compared to $14.3 million last year, which is an increase of 43%. And earnings per share was $0.28 for the quarter compared to $0.20 in Q4 2024.

Now looking at cash flow and our balance sheet. Cash flow from operating activities in Q4 was $35 million, driven by the strong net earnings and also a reduction of working capital of $2.8 million for the quarter. CapEx was $6.8 million for the quarter and finished at $22 million for the year, which represents 2.4% of sales and is in line with our guidance. CapEx mainly includes for us a mixture of maintenance, new equipment and R&D costs. Our cash flow contributed to a repayment of debt of $45.2 million in Q4 and $75.2 million for all of 2025, improving our leverage ratio to 1.03 at year-end, as previously mentioned. We finished 2025 with our guidance largely achieved. As noted already, we surpassed our adjusted EBITDA goal of 20%, which we owe in large part to Savaria One and the transformation that has taken place across the company. This new profitability level is 100% structural and it was achieved without any favorable one-offs in our underlying numbers.

Savaria One is a continuous improvement way of working that is now ingrained in our culture, and the next phase of our strategic plan will focus on accelerating growth by expanding our market opportunities, deepening customer relationships and further strengthening our competitive position. We look forward to sharing more details at our upcoming Investor Day in April.

And with that, that completes my prepared remarks, and I'll turn the call over to JP to provide further details on Savaria One. JP?

Yes. Thank you, Steve, and good morning, everyone. So let me first talk about Savaria One to explain what happened in 2025, highlight some of the successes in Q4 and also give a heads up for what we expect in '26, and then I'll say a few words about Europe.

2025 was a year of transition for us on Savaria One because we really internalized the effort. What happened is we kept the rigorous cadence of implementation that we had for the past years. We started to generate more initiatives by ourselves. So a lot of the initiatives we implemented in last year have been developed in-house without any support. When I look back at the numbers, we implemented more than a dozen initiatives each month for -- with over 160 initiatives through the year. So it's really a lot of small efforts across the company that are paying off. We also continue to generate more gains each quarter than the quarter before, which means that we have an accelerating momentum. So nothing is slowing down on our side.

Also important to note is that we refreshed our strategic plan last summer and early fall, and that's something we'll present in the next Investor Day in April. And therefore, we have a growth road map for the next 3 years, but also cost reduction initiatives that we continue to implement. So I think we had a very successful year in 2025 on Savaria One, and now we enter 2026 with at least 100 new initiatives generated for this year. So still a lot of work ahead of us. If I look at Q4 in particular, there were about 35 new initiatives implemented in the quarter, generating multiple millions of recurring savings. Some examples of what happened include the renegotiation of our main IT support and license contracts. We also improved our -- what we call the RMA process, which is the returns and warranty parts process to reuse more parts. We completed a number of procurement RFPs, which delivered savings across different categories. We also partnered with a distributor for small hardware across many of our facilities to reduce small hardware costs.

Also, we had some additional successes with automation of our business processes and something that we've been working on for some time is getting our field engineers to be more efficiently dispatched and that continues to improve. And finally, we reduced our warehousing costs and also innovative in our factories. So still many improvements happening even in Q4 last year. So we're also already actioning some elements of our growth plan. So we did a lot of work last summer to look at how we can grow the business. But as you saw in the results in Q4, we're already accelerating our growth, including in Europe. So that's very positive. And one thing I want to highlight is our direct businesses are doing particularly well, and that's because we had a lot of innovation and improvements in those through Savaria One.

So what to expect for 2026 for Savaria One. Like I mentioned, we entered the year with 2 things. First is about 100 new initiatives that we're going to implement this year, but we also have some tailwinds or momentum, if you call it this way, from all the initiatives we implemented in 2025. So if you remember, we had initiatives implemented through the year and some of them did not pay off fully in the year and continue to accrue benefits in the next year. So we -- I think we have good momentum starting this year. And of course, we'll have more details to unveil during the Investor Day. But rest assured, everything -- all the good habits we developed in Savaria One continue. In fact, we decided to keep the name Savaria One internally because we really believe this is the right way to talk about how we improve the business and work together to be one great efficient company.

Maybe some news about Europe now. So I started a new role earlier this year officially, but I've been spending a lot of time in Europe in Q4 of last year. And the way I would think about it is that the last 2 years in Europe before I started, we were a lot about reorganizing the business and improving profitability. But somehow my arrival coincides with a changing in momentum and priorities for Europe, where we now have a good business that is very healthy and profitable, and our focus is about growing the top line. And as you saw in the Q4 results, we already have some good momentum there. So one thing that we did to make that happen and enable that going forward is we already reorganized the team in Europe to have a better allocation of responsibility between different dealers so we can have a better support for each of our growth vectors.

We also spent a lot of time with our different dealers, which actually have great feedback about our company, about our support to those dealers and about our products. So that is already starting to show in the numbers, and we're quite optimistic about the potential there. We already had some good wins since I started of dealers switching their product portfolio to us. And again, it shows in the numbers that we had in Q4.

Looking forward, 2026 is going to be a year of new product introductions and of innovations, especially in Europe, where we have new stairlifts that are coming, but also a new incline platform lift. We have a number of field trials going on right now. And hopefully, if everything goes well, this year, we'll have a number of those product introductions to come to mass market.

Finally, we did something important for us, which is that we rebranded our operations in Europe to be under the name Savaria, which is a bit of a symbolic thing, but to say we are now Savaria in Europe. We're not just the different brands that we used to convey, but we're actually Savaria, which means we have the full product portfolio. We are the one-stop shop, and we're positioning ourselves to be the best partner for accessibility with our dealers. So this summarizes my update.

Maybe I'll turn it back to you, Seb, for closing remarks.

Thank you very much, JP. Good detail. So before we turn to Q&A, I just want to say thank you very much to all the analysts. You do a very good job on your coverage. You know well the story of Savaria. So hopefully, today, you learn a few new things that you can continue your good work.

So Daniel, I think we are ready for questions.

[Operator Instructions] Our first question comes from Michael Glen with Raymond James.

Maybe just to start, JP, you were talking about Europe. Can you just remind us -- I think it's been for the past 2 years that Europe on the top line has seen some pressure. Can you just remind us like the -- what were the main items that were overhanging top line in Europe and just the duration of those in total?

When you say overhanging, you mean that limited the growth of the top line, just to be sure?

Yes, exactly. I think there were some programs, some government programs that came off and then there was some -- you guys had exited some business, just those elements, the timing of those and the duration.

If you want exact timing and duration, maybe, Steve, you can complement. I can talk about the main ones, just to give you a flavor. One -- so if you think about top line, what happened is, first of all, we did some divestments in the car business, but that was a while back. So maybe Steve can add to this. We had some restructuring, if I can call it this way, for our business in Europe. So in some of our direct businesses, we decided to have maybe a more rigorous approach on pricing. We did the same in some of our dealer businesses. So in some markets, we had some contracts with, let's say, business partners and dealers that were unfavorable to us. We just held a stronger line on the partnership terms and sometimes on pricing, and that made some of them go to competition. We also had very aggressive competition in some markets, to be honest, so at the same time. So that's why we had limited or sometimes a flat growth in Europe.

So I think that happened in -- through 2024 and maybe the first half of 2025, largely speaking. There were also some challenges with government programs. So in many of our markets in Europe, there is some form of government support for purchasing of our accessibility products. And sometimes, for example, in France and Italy, last year, there were some moment of stop and go. So the government would announce a program, for example, in France, but would not be ready to process the order. So that slows down the business or in Italy, they announced that the program would stop and then it started again. So there's a bit of stop and go like this happening. But I think that's just creating fluctuations quarter-to-quarter. But I think the fundamental thing we did in the last 2 years is more to be more rigorous about which business we want to have, be more disciplined about which partnerships and the pricing we want to have, and that resulted in limited growth since 2024.

Steve, do you want to add anything on this?

I mean I think you covered it well, JP -- just adding that the biggest impact was really our focus on higher-margin sales. And we -- these efforts really kicked off with Savaria One. So I'd say, Michael, it's really been 2 years that sort of the end of 2023 and now lapping that at the end of 2025. So it's really been the last 2 years that we've seen sort of that decline now come to an end.

Okay. No, that's -- thanks for framing it that way. That's good information. And then can you also just provide an update on the capacity expansion in the U.S. and the expected timing for the go-to-market on the Made in the U.S.A. elevator product?

Okay. Well, very good question. Thanks for the interest. So yes, definitely, Greenville, if we go back in time in Q2 2025, we started to do some elevator -- home elevator in Greenville. I think right now, again, we are doing approximately 35%, 40% of our home elevator of Savaria brand. In Greenville, depending on where the end user is located, for sure, right now, we're still complying with UMSC. So that means we do not pay tariffs. So that's why we pick and choose. And I will say a Greenville expansion that we are actually have other permits that they are in place, they are digging and the new extension should be ready in October this year. So I think that will be a positive news to be able to continue to add some capacity for the future.

And with FedEx, when would you expect to -- will the elevator -- how much of the elevator at that point in time will be made in Greenville once that capacity expansion done?

We'll need to come back later with more details right now. Again, we are compliant. We do not pay tariffs. So I think this is why we started with one line. And as the expansion gets ready, we'll be able to expand with more for the future.

And Steve, can you just remind us of how CapEx trends next year and what we should expect quarter-to-quarter?

Yes. So the Greenville obviously is a one-off project for us. It's an own building. That started already. It's -- we have shovels in the ground already in 2026. So the work has actually started. We're going to see this probably come live in Q4. So we're going to see the spend or the CapEx investment over the next few quarters. We do have an increase in our CapEx budget this year, but we have tightened up some other areas. So we're going to be slightly over our 2.5% of sales, but this is sort of a one-off project investment that we're treating that way.

So would it be $25 million in CapEx? I'm just trying to get a number?

For 2026, our number is probably going to be more in the 2.5% to 3% of sales.

Our next question comes from Derek Lessard with TD Cowen.

Congratulations on a great year, Sebastien, to you and your team. Maybe just talking about the business as a whole. Curious how you're thinking about it and without stealing any of your thunder coming this April, but is it more -- and you did allude to accelerated top line growth, but can we expect some margin expansion in 2026 as well?

Very good question, Derek. So for sure, we need to wait a bit more to get further detail. But definitely, as JP said, things are sustainable. We continue to generate new ideas. And when this new idea, it's not always about money, but often there's some EBITDA impact. So definitely, I would be disappointed if we don't continue to improve the margin this year. Let's call it this way. For sure, we always have to be careful if we do, example, midsized acquisition that could bring down the margins for a certain time. But on the legacy business, on the full Savaria, I'm very positive as the environment change that we should be able to improve the margins.

Okay. And then maybe that's a good segue. My next question was on M&A. Curious about the pipeline and maybe some of the opportunities that you're seeing in the market, whether it's new categories that you guys want to get into? Or is it may be related to incremental manufacturing capacity that you might need?

Good question. So for sure, again, we have always done M&A in the past, and we like to do M&A because for us, to acquire one of our existing dealer is very natural. And again, we proved it last year with Western, this year with Baxter. So this is good because we are vertically integrated. That gives us a chance to invest a bit more in the local market to accelerate the sales. Also, when we bring in new products, example, Matot when we bought that last year, that's always good because that brings new products to our dealers so that we can continue to be the #1 choice in the industry.

So definitely, there's the 2 type of acquisitions we like to do, products or dealer that can help us be better on the local market. Now we are lucky. We have the right liquidity -- but for sure, we always remain disciplined, okay? We don't want to just do acquisition to do acquisition. We have to do the one that will be the most beneficial for the group, we have a good future.

Absolutely. Okay. And maybe I'll throw one last one in here for JP. Just maybe talk about your full circle transition from consultant to a leadership role in Europe and how that came about?

What's your question specifically? Do you want to -- I'm happy to answer, but what are you thinking?

No, I was just curious on why -- one, the transition and is it because you saw -- or what opportunities you saw in the role in Europe in particular?

Well, just I'll try to answer your question. Thanks for asking. For me, the role in Europe is a natural professional progression for me because like joining Savaria as Chief Transformation Officer, I got to know the whole business, and I learned skills that I did not have as a consultant. So I was building on my skill set, but expanding it. And leading the business in Europe is a personal professional challenge for me. So I'm learning a new role.

But I feel like I'm also very well equipped for it as a true Savaria One. I did spend a lot of time in Europe. I know the business quite well. I speak multiple languages. I studied and worked in Europe a lot in my previous life. So I think I'm very happy here. I'm having a great time, and I think it's benefiting the business also that I bring some of the Savaria North American culture to Europe, so I can really bridge the gap there. So I think, yes, that's how I think about it. So it's great for me. It's great for the business, I believe. And hopefully, we have a lot of success with me playing this role.

Our next question comes from Frederic Tremblay with Desjardins Capital Markets.

Just maybe coming back on the CapEx and beyond 2026, not looking for specific numbers, but just wondering if the growth plans that you're about to introduce, will that require incremental CapEx? Or do you feel like the growth opportunity can be supported with -- largely with the existing infrastructure?

Yes. No, I mean, we're definitely going to talk more about this at the Investor Day. But generally speaking, we have enough capacity, especially with what we're building at Greenville to facilitate the growth that we have planned for the next few years. You never know what could come through M&A too as far as footprint is concerned, but we have enough -- especially with the Greenville expansion, we're going to have enough footprint and capacity to achieve our growth plan. So we are going to have a little bit of additional expenditure this year, but we're going to be back down this year being 2026, but we're going to be back down in line with our 2% to 2.5% of sales for 2027. That's our plan.

A big part of our CapEx spend, as a reminder, is our R&D. That continues to be an area of focus for us where we do invest. It's roughly half of that CapEx spend on a normal annual year. So it won't be not exactly the same in 2026, but for 2025 and 2027, typically, R&D and intangibles sort of half of where we spend the money. And that's important to us to make sure we have a robust R&D pipeline of new products hitting the market. So while it can be a sizable investment, it's a critical area of expertise for us and a critical competitive advantage, I'm trying to say.

Okay. And if I may, Steve. So I think, again, for us, Fred, we have pushed a lot of our factories in the last 2 years to improve, to have the best machine to be the most productive. And right now, we have unlocked so much capacity in the last few years, but to continue to be the best is very, very important for us. And R&D, we have 62 people. I think we have done a lot of reorganization, new process in the company. And you will see that in the future, we'll be able to improve existing products, launch some new one and R&D has to be part of the growth plan. And I think we are pretty in good shape across all our different segments.

That's great. I was hoping to get maybe a bit of an update on market conditions in North America. We're obviously seeing home construction activity is still pretty slow, but you guys keep growing at a nice pace in North America in Accessibility segment. So wondering if you could comment just generally on the market and sort of what Savaria has been doing to win market share and keep growing nicely in that region.

Definitely we have some interesting slide to show at our Investor Day about the size of the market, the opportunity. But again, with the aging of the population, after the densities in the city that town house are going up, okay, that's really helping elevators. And right now, not enough people put a home elevator into their housing, okay? So if we continue the good work with architect, contractor, designer to develop this market, I think that that's enough opportunity to offset some of the slowdown you might have right and left. Example, Texas, we talked about that's an opportunity for us.

So I think on our side, we continue to be busy. And when we look at other products like stairlift, it is a necessity. When your bedroom is on the second floor, you cannot go up and down. No, you put a stairlift, it is very affordable. And in some places in Europe, yes, you can have some subsidies. So that's -- again, we have the right demographic to help us.

Great. And then maybe last one for me. Just on dealer acquisitions. Can you remind us of like the drivers of accelerating the growth of those businesses after you acquired them? I think typically, you'd expect the organic growth of those businesses to accelerate after you've acquired them. So maybe briefly run through some of the key aspects that you guys focus on after acquisitions?

For sure, it's a good question. Right now, we own 30 direct store. And I think we -- there's a lot of good place that we do very good business. And at the end, we're able to learn from each other and to bring it to the dealer after the acquisition to enable to invest in the business, to generate more leads to again push with the sales team to meet more architect, contractor. We believe in showroom. So very often, we'll make sure we have a good representation, a nice room that we can bring a professional and customer into our showroom to see what is the best we can do.

So I think that's really all the knowledge that we had in the past that when a dealer wants to sell or wants to retire, we are a very natural buyer. Right now, approximately 33% of our sales of accessibility are direct. The rest is dealer, but we are good at it.

Our next question comes from Zachary Evershed with National Bank Capital Markets.

Congrats on the quarter. So most of my questions have been answered. Maybe just one. You mentioned a 5-year target to be revealed on April 14. Will we be getting shorter-term guidance as well for 2026?

I think it's the job of the analyst to do short-term guidance, Zach. But no, we try to -- I think we have demonstrated in the last 2 years, what we are capable to do and what we do is sustainable. I think we'll be able to give enough color at the Investor Day on the 5-year target that people will be able to put a number by themselves for the yearly guidance. No, we want to go on a broader period because we're in the business for the mid, long-term, not for the short-term.

Makes sense. And then actually, just one other one. You previously mentioned that some parts of Europe are already exceeding the 20% margin target while some are dragging. Can you tell us broadly what those units are doing differently versus the ones still under the target? Or is it primarily a function of the subsidies that are available in those geographies?

I think just one -- I'm not sure where you got this comment. But I think if we look at our detailed MD&A, I think we see that the accessibility is at 23%. So again, it's a mix of North America and Europe. So I think we're probably closer to the 20% than we were in the past, okay? But I don't think we detail exactly per location or per country what's happening. But maybe some of the good things that we are doing, JP, you want to highlight a few items, what we're doing good for Europe to improve our profitability?

Yes. So the main things in the last few years has been the efficiency of our factories and our field operations. So in our factories, there are a number of initiatives to reduce, let's say, the number of people we have for the same output by automating some industrial processes we have. So that's been very effective. We also deployed a lot of lean, let's say, lean improvements to our factories. So I think that's where we have a lot of people in the factories and there we became much more efficient.

The other place where we have a lot of people is in the field operations for installation and servicing. And for that, we did not only improve the quality, let's say, of our work because we had a lot of training and we elevated the performance of our team by capability building, but also we deployed better systems where the dispatching, for example, is more efficient. So that's something we keep working on, but it's already much better than it was. So through this, we improved the profitability quite a bit. And last thing, as I mentioned before, as we became a bit more let's say, rigorous and strategic in how we price and manage the pricing. So as a result of all these things, we improved our profitability overall.

Our next question comes from Justin Keywood with Stifel.

Just on the Baxter Residential Elevator acquisition announced early in February. I realize it's a tuck-in deal, but are you able to provide any metrics around the profitability of that asset and the opportunity to expand margins and some of the integration activities that have been successful with some of Savaria's other acquisitions?

Thank you, Justin. So yes, I would say probably in the low teen, the profitability. But I think the success of Savaria is always the vertical integration from the dealer to the factory, to the subcomponents, example, in Mexico. I think all this make it successful. Again, we see with Baxter a good opportunity. Again, it's a small business unit. So I think we will add some volume and develop some area that will be -- that will continue to help for the success. But I think that's an area that we believe we can be much better and that's why we did the acquisition.

Great. That's helpful. And how did the acquisition come about? Was this a cultivated opportunity? Just if you have any background on that.

I think at this stage, most of the dealers know that we are a natural buyer. So I think it goes to different conversation with their President right and left, that Nicolas, corporate development. So definitely, we know which dealer might be selling in the next few years and typically, on the list and when they are ready, they call us. So that's a bit of how it works.

Great. Good to hear. And I had a question on foreign exchange. It was quite impactful in the quarter. I don't recall it being impactful historically. Just wondering if there's a strategy around managing FX risk with hedges or if there were any unique factors for this quarter impacting the results?

We do have some hedges in place, Justin. So we do hedge some of our debt. What happened this quarter was unrealized loss on the U.S. dollar. So some of our mainly related to U.S. cash and to U.S. receivables that when they were converted back to Canadian, just the change in the FX rate quarter-over-quarter created that loss versus the same time last year. You remember the U.S. dollar was going the other way, so quite a bit. So I mean, we do have some hedging in place, but we're going to see these types of impacts on a quarterly basis. I think this one is just more pronounced based on the change in the U.S. dollar over the last short-term.

Our next question comes from Razi Hasan with Paradigm Capital.

You spoke about operating leverage in the quarter. Could you maybe talk about future ability to capture operating leverage and where that comes from?

Yes. I mean we're -- we've talked a lot about continued improvements that have come under Savaria One, and it's a new way of working and a new culture here. But something that is just going to happen naturally without any effort is going to be some of that operating leverage. We -- I mentioned the capacity that we have at our sites. A significant amount of our cost base is fixed. So being able to put through more revenue with the same cost base, we're going to see that leverage come through in all of our regions and segments. So we're going to see that in Patient Care and Accessibility.

We are making this one-off investment in Greenville, but we feel -- we know that we have enough capacity to service our long-term growth plans. So Razi, we're going to see this come through. We saw some this quarter. We're going to see this continue over the next few years.

Okay. Great. And then maybe one for JP. Just if we take a step back a bit, could you maybe provide some details on growth rates for the elevator market in Europe? Just overall, how do you see that market growing? Or how has it been growing? And how do you see it growing going forward?

Just to clarify, we're currently not playing in the elevator market in Europe, except for Vuelift, right, you know this. So that's the context. Now the growth rate, we will present that in the Investor Day what we think are the growth rates per market, but I think it's in the range of 4% to 5%, if I remember, I'm going from memory, but it's in that range. Most of our markets are in that or slightly higher range of growth rates. So that's what -- yes. But maybe hold that question until the Investor Day, and you'll get a more granular view of all the markets we operate in.

Fair enough. That's helpful. And then maybe just lastly, I'm not sure if it was answered earlier or asked, but just thoughts on priorities for capital deployment for 2026.

Yes, I can take this one, Razi. I mean we're -- we have been delevering over the last couple of years. We're going to continue to do that. We are building the balance sheet for -- mainly for acquisition growth and for acquisition opportunities to make sure we have the funds available to execute transactions as they arise. So we are at 1x leverage. Our sweet spot is around that 2 mark or below that 2 mark. So Sebastien mentioned in his comments that there's $200 million available for acquisitions over the next few years. I mean this is going to continue to expand, and we're going to -- the idea is that we're going to be self-funding acquisitions.

So our dividend policy is relatively stable. We're not looking at buybacks in the short-term, and we talked a little bit about CapEx already, but the main goal right now is to continue to repay debt and use our revolver to execute on acquisitions when they arise.

Our next question comes from Jonathan Goldman with Scotiabank.

So really nice organic growth. Maybe we can just focus on accessibility, both North America and Europe. Can you provide some color on how booking trends and backlog have trended so far in Q1? I guess if you want to talk about directionally, has the momentum from Q4 spilled over into 2026?

Okay. So I don't think we have retailer backlog in Q4. I think we had a good start of the year. And typically, Q1, there's a bit of deadline in North America for some price increase. So that usually give us a healthy backlog. And I think in terms of stairlift, we are busy. So no, I'm quite comfortable with the way we have exited the year that we have some backlog remaining to hopefully have a good Q1.

Okay. And maybe switching to Europe, the idea of kind of being a one-stop shop. Can you remind us of what the current product mix is in Europe right now? And I guess related to that, could you give us an update on the dealer uptake and reception of the Luma?

Yes. So maybe I will start and JP will complete. So for sure in Europe, we are firstly the stairlift organization. That has been the bread and butter of Handicare for many, many years. And then don't forget, we have the Garaventa brand in Europe, where we have the incline platform. We have been a strong player in incline platform as well. We brought the Luma last year. So for sure, Luma, again, it takes time, but it's one of those we put the seeds for the mid, long-term because people before they buy example, 10, they do and they put in the showroom, then they do one of the customer. So it takes some time. But definitely, there's a lot of traction. People like the products. So I think we'll get a good future. Again, we have the Vuelift in Europe. We have some short VPL called them out. So definitely, we are starting to have a better picture of the one-stop shop and the dealer appreciate that. So I think that would be good.

Maybe JP, you want to complete something on that?

Well, I think you said it well, Sebastien, but I think it's recent that we bring almost all the products. So the one big piece that's missing is home elevators because we have the Vuelift, but we don't have the other category killers like the Eclipse, for example, but for everything else, we are there. But for us, to be transparent, for example, selling incline platform lifts, vertical platform lifts has always been something that we existed through Garaventa, but we still have room to grow there because we're, for example, educating even still today some of our historical Handicare dealers to sell those products, okay? So at least we made progress in that regard in the last few years, but there is still work for us to do and room for us to cross-sell our different products to our different historical dealers in Europe.

Okay. That's good color. And maybe just one more. On the Patient Care, the organic growth was really strong in the quarter, and you were lapping also like a really strong comp as well. Was there any onetime projects in there or anything that would make that growth look unusual?

About patient Care, we have to be careful. It's always a bit lumpy from one quarter to the other, because of big project, as you said, and sometimes there's some deadline with some funding with the government. But on our side, we try to get more at a year versus a quarter for the Patient Care. I think last year, we finished in the low 5% of growth. I think it is below what we want, but I think this is how we should look at it.

Our next question is a follow-up from Michael Glen with Raymond James.

I'm just -- I apologize if I missed this, but did you indicate what the organic -- like the excluding ForEx organic growth rate was in Europe for the quarter?

Steve?

Yes. So we don't typically disclose that number, but we had low single digit -- in the quarter, we had low single-digit organic growth in Europe. They had a very large positive FX impact. So it's roughly around the 9% split roughly around 2% organic and 7% FX, but the pound and euro strengthened versus the CAD.

Okay. And that -- is it safe to assume that, that would have been negative through the first 9 months of the year?

No, it wasn't negative. It's been positive for most of the year.

Okay. And then just the tax rate next year or this year '2026?

Yes. And so maybe your question is coming from our lower tax rate that we experienced in Q4. For next year, we're expecting to be back in the range of 26%, 26.5%. There were some positive impacts in Q4 that you'll see. I think our rate for the quarter was about 17.5% and we had some positive adjustments on earnings in some countries that previously were experiencing losses. So we have carryforward losses in some of those countries that where we're now making income that we apply those losses against the current income so that the effective tax rate is lower. So there was a bit of a one-off adjustment. But going forward, I think if you're modeling, keep 26.5%.

I'm showing no further questions at this time. I would now like to turn it back to Sebastien Bourassa for closing remarks.

Thank you very much, Daniel. So thanks for all the good questions. It seems a lot of good interest this morning. So again, I'm very happy of the results, very proud of that. And I think it shows that we are in a good industry. We continue to do the right thing, Savaria One learning we did in the last 2 years. So quite comfortable and excited to present to you the next chapter of growth in April. And I remember, if you have interest to be at the Investor Day in April in Brampton, Toronto, please register so that we have enough chair and enough sandwich for lunch. So thank you very much, Daniel. See you next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning. My name is Carmen, and I will be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's Third Quarter 2025 Conference Call. [Operator Instructions] This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on November 5, 2025, with respect to its third quarter 2025 results. Thank you, and I will turn the call back to Sebastien Bourassa. You may begin your conference.

Thanks, Carmen, and good morning, everyone. Today, I will start with a small recap of our Q3 results, then Steve will update us on financials, and JP will provide an update on Savaria One, followed by a Q&A session. First, I need to thank all the employees at Savaria for their contribution over the last 2 years. Without you, we never had the success that we had in the Savara One program.

Once again, I'm very proud of our Q3 results as for the first time ever, we reached 21.2% of EBITDA. Some of the key highlights of the third quarter, best gross margins ever at 39.2%, which is a direct result of operational improvement, procurement and pricing initiative, which JP will go a bit later more in details. Fantastic performance of the Accessibility segment with 23.5% of EBITDA margins, which saw a good contribution from North America and also from Europe. And I think it has been a big transformation in Europe in the last 2 years. So congratulations team. Patient Care was lower at 18.3%, but better than the previous year. The backlog remained high, and we are getting ready for a busy Q4. We won 2 AEs in North America, one for Matot and one for Savaria and also one in Europe for Handicare for the best accessibility supplier. So congratulations to the team.

Growth has been decent in the third quarter for North America accessibility, but overall, as a company, growth is below what we target. So what are we doing to address that? First, Maya product line and the Lumar Tuder floor will continue to see a very high interest from our dealer, and we will definitely see some organic growth in 2026 around those products. Many of our dealers are putting Bluemont into their showroom because they believe in this and the opportunity. The team in North America has spent a lot of time this year to do some training with and into line products to architect. It's always an investment which this will pay off in the future. Our Savare Phase 2 planification is almost over and we will be ready definitely ready in April 2026 to unveil this new 5-year strategy, which will be very focused on the growth.

In the last 2 years, we have been very disciplined and improve a lot the bottom line. And we believe with the same discipline, we'll be able to improve the trajectory of the growth as we operate in a very nice industry with the aging of the population and also the density in the cities, it bring more tunnel development where elevator is definitely a nice investment. Also in the last year, we have increased a lot our R&D team. So we went from 50% to 62% so that we can continue to improve existing product, develop some new products that will remain the #1 choice for our dealers. Also, our R&D process is better than ever.

Early next year, we'll be changing our brand name in Europe to be Savaria as we start to have more products similar to North America, and we become closer to the one-stop shop. We had a small management change in third quarter in Europe. After 20 years, Claire decided to leave the company. So thank you for your last 20 years and JP has applied for the position since November and is now President of Europe, and we continue to assume the role of CTO, which is now more on the strategy for the future. We are excited about this change as JP is a fantastic team player and a leader that will continue to bring cyber culture in Europe. With 1 quarter to go, we kept our guidance unchanged for the revenue as we always give annual guidance and not quarterly, and we believe that we have a chance to finish close to it. And we update our EBITDA to stay slightly above 20%. As for now for the first 9 months of the year, we are at 20.1%.

Our net debt-to-EBITDA ratio continued to improve, is now sitting at 1.19 with $290 million available funds for investments in the future or acquisition M&A. So we'll be ready for the future. Also at the end of the year, it is the end of the Savaria One program. So right away in 2026, it's an improvement of $0.17 per share for the full year. Last, again, I want to thank all the employees for their efforts over the last 2 years on the Savaria One program. Steve?

Thank you, Sebastien, and good morning to everyone on the call. I am really pleased to share with you today some remarks regarding our Q3 2025 consolidated financial metrics.

So key highlights for the quarter include, first and foremost, achieving and surpassing our 20% adjusted EBITDA margin target for yet a second quarter in a row. Our Q3 margin of 21.2% is another high watermark for us, and our 2025 year-to-date margin is now at 20.1%. Secondly, gross margin increased year-over-year by 220 basis points to 39.2% in Q3, mainly through Savaria One. And lastly, strong free cash flow with operating cash flows up 16% this quarter compared to last year, contributing to our Q3 ending leverage ratio of 1.19.

So now looking at consolidated revenues for the quarter. We generated revenue of $224.8 million, an increase of 5.2% versus last year. This is driven by organic growth of 1.8% as well as a positive foreign exchange impact of 2.5%. Our Q2 acquisition of Western Elevator, a dealer in the lower mainland of British Columbia, provided revenue growth of 0.9%. Our Accessibility segment saw growth of 6.1%, including growth of 7.7% coming from North America, combined with a growth of 3.6% coming from Europe. Patient Care had revenue growth of 1.9%, driven mainly by increased sales within the United States.

As previously noted, our consolidated gross margin for the quarter was 39.2%. This performance represents a marked improvement of 220 basis points over prior year, driven largely by continued operational efficiencies realized under Savaria One as well as some operating leverage. Both segments contributed to this gross margin improvement, underscoring the effectiveness of our ongoing initiatives to streamline operations, enhance margin quality and drive sustainable growth.

Now adjusted EBITDA was $47.6 million for the quarter, representing our strongest performance to date as well as the sixth consecutive quarter above the $40 million threshold. Adjusted EBITDA margin finished at 21.2% for the quarter and more specifically, 23.5% for Accessibility and 18.3% for Patient Care. Accessibility margins improved 220 basis points and Patient Care margins improved 90 basis points. This performance enhancement is primarily driven from the improvements in gross margin, which have been powered by Savaria One.

We incurred $4.7 million in strategic initiative expenses for the quarter, which was in line with our expectations. These fees are mainly consulting costs and will repeat in Q4, but will be finished thereafter. Removal of these costs will add a significant boost to our cash flow starting in Q1 2026. Finance costs were $2.2 million for the quarter compared to $6.9 million last year. Interest on long-term debt decreased by $1.7 million when compared to last year, impacted by reduced variable interest rates on our debt as well as a lower overall debt balance. Included in finance costs, we also recorded an unrealized FX gain in the quarter of $1.1 million. This all results in net earnings of $19.5 million for the quarter compared to $11.2 million last year and driving an EPS of $0.27 per share for the quarter, an $0.11 improvement or 69% improvement over last year.

I'm now going to look at the balance sheet and cash flow. Cash flow for-- excuse me, cash flow from operating activities in Q3 was $41.5 million, which is an increase of $5.7 million versus last year, coming from higher net earnings generated combined with lower net income taxes paid. Working capital decreased by $3.6 million in the quarter, mainly coming from decreased accounts receivables and slightly offset by higher trade payables -- sorry, excuse me, lower trade payables.

For the year, we're achieving our working capital targets. CapEx for the quarter finished at $5.7 million, which is 2.5% of sales. And on a year-to-date basis, we have spent $15.2 million on CapEx, which represents 2.3% of sales and was -- and is within our annual range of 2% to 2.5% of sales. This includes a mixture of maintenance and new expansionary CapEx, including new equipment for our Greenville site. Free cash flow after debt-related costs and dividends in Q3 was $20.6 million for the quarter, which is a significant improvement of $7 million or 51.5% when compared to last year. This strong free cash flow contributed to a repayment of debt of $11.5 million in the quarter and reduced our leverage ratio to 1.19 as at September 30 compared to 1.63 at year-end 2024. This puts us in a very healthy position as we eye future growth plans and other opportunities that lie ahead for us.

With regards to guidance, as Sebastien mentioned, following current quarter results, we have left our revenue forecast unchanged at approximately $925 million of revenue for the year, and we have adjusted our-- adjusted EBITDA margin guidance to be slightly above 20% for the year. This adjusted EBITDA margin target was achieved in Q2 and Q3, and we expect it will be achieved for the last quarter of 2025 based on the continued value of Savaria One that we have in front of us. And with that, this completes my prepared remarks. I'm now going to turn the call over to JP to provide further details on how we're progressing with Savaria One. JP?

Yes. Thank you, Steve, and good morning, everyone. We continue to deliver very strong business results in Q3 and not only expanded our profitability versus last year, but also grew our business. We feel great about our momentum as our improvement initiatives across Savaria are not only showing in our margins, but also now on the top line. As you saw, our EBITDA grew by $5.8 million or 14% versus last year, which is almost 3x faster than our sales grew in the same period. We're now at 21.2% EBITDA in Q3, which is above our 20% aspiration, yet we continue to implement various initiatives across the business to expect more growth, but also possibly more profitability improvements ahead as we, for example, implemented more than 60 initiatives worth millions of dollars in savings just this past quarter.

I believe we're largely internalized the new way of operating the business now that we are several quarters into our transformation. We not only continue to deliver more improvements to the business each month, but our teams are also generating new ideas and new initiatives at a faster rate than we complete the old ones, which shows to me that we are more autonomous than ever. As a reminder, we had very little support from external consultants in Q3.

So what are some of the highlights from Savaria One this quarter? One is in North America and in Australia, where our direct stores are doing great. They're showing steady growth, and delivering record levels of profitability. And we think that is thanks to the great efforts of our leadership team managing those stores, but also the teams in each store, including our sales team and our installation and service teams. What happened is we've put together a strong organization in place with competent managers overseeing the network. And also, we've been managing each of those stores and sharing best practices across them. Also, all the acquisitions that Savaria made historically of direct stores have been a commercial success over time. And yet, we think there's still so much more to do with our direct stores, notably in developing the markets in which they operate and increasing the adoption of our products and in particular, for home elevators. So there's more room for growth ahead of us.

Also, we continue to generate savings in our operations in our European accessibility business to reduce lead times for our installations by working with our logistics providers so we can get our products to our customers faster, but also at a lower cost to the company overall. We also developed new processes that reduce the waste in our production system, in particular in regards to electronics, which reduces our overall product costs. We also continued to move some work packages between our factories to generate economies of scale and leverage best country sourcing and finally reduce our labor cost overall for SMB.

We're also now experiencing pockets of growth in Europe. If you recall in the past quarters, we've been focused on improving profitability in Europe, sometimes at the expense of top line, but we can now say we're building on very strong foundations with an efficient business, and we're reengaging with growth. Sales continue to be slower in some markets, but we see good momentum overall. In Q3, we also worked on developing our next strategic plan, which we will unveil next year. It was a great opportunity for us to take stock on our performance over the past years, especially since we started Savaria One, also look at the position we occupy in each market. And for what it's worth, it shows we have a very solid foundation on which to build, but we still have lots of room for growth and value creation ahead of us. Yet, I will wait until our next Investor Day for more details.

Before wrapping up, I just wanted to say a few words on my new role. Starting November, I took responsibility for our European operations, and I will be relocating to Europe starting January 2026. I will continue to orchestrate the execution of Savaria One and the execution of our next strategic plan that we will present shortly, but we'll focus and shift the bulk of my time and attention to accelerate the transformation and the growth of our business in Europe. I want to thank Sebastien and the whole team here for this opportunity, but also thank and congratulate my new team who I believe are already doing a great job. I hope and I'm confident that my addition to the team will accelerate the positive trajectory that we started in Europe. Thank you...

Thank you, JP. So just one thing that I want to add also is that we did not talk about UMSC compliance. So we continue to be UMSC compliant, and we continue with our Greenville expansion. As of right now, we manufacture 40% of our home elevator Eclipse in Greenville, South Carolina. So thanks for the team over there for your great work. And we are on track for our expansion in Greenville to be ready in the second half of 2026. So on that, Carmen, I believe we are ready for some questions with our analysts that are doing a fantastic job to cover Savaria.

[Operator Instructions] Our first question is from Kyle McPhee with Cormark Securities.

Great performance. I just wanted to talk a bit about the margin path. So you delivered another lift for margins in Q3. You passed your Savaria 20% goal. It seems like you're attributing the success all to permanent types of dynamics. So correct me if I'm wrong, but is it fair to say this is a new normal type of profile for Savaria. There was nothing temporary about it in Q3, no one-off benefits. So you can hold on to these types of gains and likely even be building on them as you get OpEx leverage with the growth on the comp. Is that all fair?

Thanks, Kyle, for your great work. Yes, definitely, I think the 20% mark for me, I will be very disappointed to go backwards. I think that has been very steady in the last few quarters, always a marginal improvement. And it is really -- the success is really linked to improvement, procurement and pricing. And I don't think it is a one-off. I will be very disappointed. So what is next? I think right now, we have committed to the 20% for this year. And hopefully, in our Investor Day next April, we can discuss a lot more color over the next 5 years where we could go.

Just maybe as a quick preview of what you will be discussing when you do that, is the forward margin expansion still on offer largely just OpEx leverage from all the growth themes you'll be talking about? Or are there still meaningful cost and efficiency stuff on offer?

Great question again. So definitely, in the last 2 years, we have developed a good mechanism that the employees never stop, to contribute to bring some new ideas to the table. So I don't think it will be the end. But one thing we need not to forget is when you do growth, sometimes you need to make some investment. You example, open a new showroom in one location, you add some sales force. So -- and when you do acquisitions, very often, they are not at 20%. So we've got to be careful on that. But definitely, the legacy business, okay, why it could not continue. I'm hopeful for that. But grow grow grow. This is why when we call any of our employee in the last 2 years, I think they will have answered you the target was $1 billion, 20%. When we call any of our employees after next April, I want to make sure that they can answer you where they see the growth, what they will do to achieve the growth. So we'll make sure that the message is well aligned across the organization.

And our next question is from Michael Glen with Raymond James.

So first, can you just talk a little bit in a bit more detail about North America, the organic growth there in the quarter. Is this primarily related to residential elevators? Can you speak about some of the other product categories, stairlifts, platform lifts as well?

Yes. So definitely, North America, again, in the last 2 years, it has been quite solid, okay? And I would say that really the one-stop shop with the mix from home elevator to vertical platform to low-rise commercial to stairlift and to the new product model this has really contributed okay? So now it's a mix factor. Unfortunately, North America, we have been quite good with home elevators across the Savaria brand and the Garaventa brands. And I think this is something with townhouse development, the density in the cities, all the work we do with architect, contractor, builder is definitely paying off. Stairlift, we have not been always perfect in Stairlift in the last few years, but now our manufacturing lead time is state-of-the-art. We are maybe making some effort, and this is something that hopefully in the next few years, we can have also a very good growth around Stairlift. So no, I think it's not the end on the North America. It will continue.

Okay. And -- but would you -- like for the quarter, the bulk of the growth was in residential elevators, you would say?

Unfortunately, we are borrowing. We don't disclose per product. Otherwise, it start to be picky next quarter will be the same question, but home elevator, if it can help has been good for sure.

Okay. And Sebastien, just on what you see, can you frame for us what you see out there in terms of the M&A market for dealers. Maybe first provide an update just on the Western Elevator acquisition and then some framing about what the market size for dealer M&A might look like?

For sure, it's always a tricky question a bit. But if we look at the past, in the past, we have often did 1, 2, 3 acquisitions during the year. And I would say a mix of dealers that, again, a dealer wants to exit the business. We are one of the suppliers. It's very natural for us, we're a natural buyer for that. So definitely, this is something that could continue in the future and will continue. and also product, okay? We have liked to buy some small manufacturer in the past like May [indiscernible] that has been a fantastic integration, and we're pushing it to the next level. The Visilif acquisition, which is now the VueLift has been fantastic also for them to promote our home elevator. So definitely, product and dealers is very natural.

And Western, yes, since May are in a family, I would say right now, it's pretty much fully digested. We are operational. They are contributing to the equation. And now they are buying all their products with Savaria, which before was more like 80%. So definitely, it has been a great acquisition so far.

And are you able to just give some thoughts on to what you've been able to achieve with revenue growth and margins at Western since you acquired it? Anything qualitative you can provide?

I will say, again, we don't disclose all our different things, but I would say we're probably in the -- it's very early, but in the mid-teens is probably where we are.

Our next question comes from Frederic Tremblay with Desjardins Capital Markets.

JP, congrats on your appointment. I know it's maybe a bit early for that, but can you give us a bit of an idea of what your priorities for 2026 will be in Europe?

Yes. But I guess it will be aligned with what we disclosed next April, but the priority now is mostly to grow the business, simple as that. And we have many ideas to do so. Yes. we have any further questions.

No, no, that's fine. We'll get more detail on Investor Day, I guess. But that's good. Just wanted to ask maybe on the backlog for home elevators on the direct store front. Sebastien, can you maybe characterize that backlog a little bit and give some context as to sort of where it stands relative to past quarters?

I would say it's very similar. So the backlog is quite good. For sure, in our direct store, we tend to have a 6 to 12 months backlog because, again, typically, we -- if you do a good project, you should sign a contract with your dealer before you start to build your house. Otherwise, then we can do project management to make sure your renovation, your will be correct. So I think that's definitely happening. And in the factory, again, typically, we have good lead time, which is more around 1 month. So -- but definitely, the backlog is there is good. So that's why we're confident about the Q4.

Perfect. Maybe last one for me, more on the, I guess, the macro context or the impact of macro uncertainties on customer behaviors. Are you seeing any sort of trade down at all from customers like maybe people choosing less custom options on certain elevator products or moving down from a price perspective in terms of the accessibility products? Or is the demand and the price elasticity is still pretty good overall?

No. I think, again, we see some pretty good options. We are much better than we were. Today, when you see us, you don't just have a home elevator plain Mine. We have touchscreen CP, all kind of door flus door, swing door, sliding door glass. So we have high-end Cabo. So really definitely, again, if you're going to put an elevator into a home, you need to look at it in an investment. You will have a home elevator for the next 15, 20 years. So the extra 10,000, 15,000 can make a huge difference to have a wow instead of just, oh, you have an elevator. So definitely, there's no big change. And I think all the work with architect, contractor, is continue to be high. And even 10 years ago, people were not thinking about putting home elevator, Fred.

And today, even if you have a townhouse of 4 floor, the price of townhouse, example, in Toronto is very often over $1 million. So if you can put a home elevator that might be cheaper than your kitchen, that help you to resell your lev house at a better price. If you bring your parents to your house, but you can have them for a weekend, you want to bring your luggage up and down. So there's so many advantage to have a home elevator into a home that, again, the penetration is still too low. So that's why even if there was less construction one day, doesn't mean the home elevator could not go up because, again, the penetration of home elevator, I think, is just going up every year. And after that, Fred, example, the LUMA is an aftermarket product. It's a truer floor, very easy to install. So I think this, again, will help us also for the future growth.

Our next question is from Razi Hasan with Paradigm Capital.

Just on Europe, nice to see growth year-over-year. Can you just talk about how the market is receiving your improved pricing and how cross-selling is going in the region?

Your new President in Europe, you want to answer?

Yes. So you talked about cross-selling. What's the other question, sorry?

And just the improved pricing you have in the region and how it's being received by buyers there.

Yes. So let's start with this one. So we improved the pricing in 2 segments in the direct business and in the dealer business. In the direct business, honestly, it's been sticking quite well, right? So that's one thing we did well in Europe is we improved the profitability of our direct businesses by making price adjustments, and there was no impact on sales or on conversion. So we essentially captured all of this. In some of the dealer business, what happened maybe more retrospectively in the last 1.5 years is we did increase prices in some place where it was, let's say, less attractive for us, and this had an impact on some parts of the top line, right? So that's what you've seen in our results. But from this year, for example, we had more adjustments to pricing that really -- than really big changes, okay? So this year, we don't see pricing as having an impact on our top line. And it's also -- I mean, that's a factor that is now contributing to the fact that our top line has stabilized for everything that is with dealers, and we are seeing positive momentum now. So I would say the answer to the pricing question is it's been -- this year, it's been actually positive or it's good reaction.

In terms of cross-selling, so we have some successes in cross-selling. So some of the, for example, initiatives we had was to cross-sell the VueLift, which is the one home elevator we can sell in Europe and as well as sell some of our products like the multi-lift. So now the LUMA is also another product we're cross-selling. So I would say it's early days for LUMA, for example, we're just starting to sell some units. And for Multilift, same thing. We have a new product that has been launched this year. So we're seeing some cross-selling success there. So we are having success, but obviously, it's still very small in proportion to the business. So we have more room for growth there.

Okay. Great. And then just thoughts on capital deployment with low leverage and good liquidity. Can you just maybe highlight what your priorities are for capital?

Sure, Rai. So looking at what we're doing with the capital, we're going to continue to pay down debt. I mean our leverage ratio is fairly low at 1.19. And we're going to continue to pay that down and also basically get ready for acquisitions. So our plan is to grow organically, but also through acquisition, which we're going to talk a lot about at our Investor Day. But -- we're not going to be doing anything different with dividends or buybacks. We're just going to continue to lower our leverage until we use those funds for acquisitions and then we'll be levering up for those. So not going to be a large change. Most of our acquisitions are more or less going to be tuck-ins and some other maybe sizable ones, but nothing sort of sizable like Handicare that we're looking at right now.

Okay. And maybe just last one for me. Just in terms of EBITDA margins for Q4, anything that could potentially impact the level from Q2 and Q3 that you've seen heading into Q4 or it's just more of the same?

Sometimes the product mix can be slightly different. But again, I think I would be very happy to repeat what we have done in Q3. So let's see.

Our next question is from Max Shiovsky with Stifel Canada.

This is Max on for Justin Keywood, Stifel. Could you guys give any further detail on the makeup of sales channels in patient care? And if there's any seasonality to institutional buying patterns just generally in Q3? And I know despite accessibility sort of being the focus, what can we expect from Savaria in patient care as you repivot to growth?

Again, I think if we look at last year, we know that last year, we have delivered a very strong Q4 and that brought a decent organic growth for the year. So it's a bit the same expectation for this year. Basically, we have built a certain backlog, and there's a bit of season in the patient care business. And definitely, I think Q4, we should see a strong performance. And again, typically, we're stronger in the long-term care than we're in acute care. So long-term care is bed mattresses and sitting lifts. So definitely, that's going to be our strongest segment. And it's quite balanced between Canada and U.S. really.

Okay. And yes, hats off to the progress on efficiencies and margin over the last few quarters. But I guess, do you guys feel well equipped with the internal team that you've assembled and the work you've done to launch on the second stage of Savaria 1? And should we expect any incremental strategic costs associated with that like we saw with Savaria 1?

No, definitely, our strategic costs are coming to an end that will make a big difference next year in our cash flow. And I think the team is better than ever. And what is important in the last 2 years, there has been a lot of training done with all our employees. So right now, we have done several Phase II planning internally, a bit challenged by a consultant. But at the end, definitely, the team is very capable. So I think we are in better shape than ever for the future. And I think in the first 2 years, we have been very disciplined with date with value. And I think this is a spin that we'll be able to continue going forward. Again, to understand that it takes time. We cannot do everything at the same time. So it's important to stage things correctly that we continue to move forward, right?

One moment for our next question. It comes from Zachary Evershed with National Bank Capital Markets.

Congrats on the quarter. For accessibility in Europe, can you give us your thoughts on how the broader market is adapting to the absence of some subsidies?

JP?

Well, I guess, to adapting, I guess it's more reacting would be my answer in the sense that let's take Italy, for example, right? So we did measure the impact of the reduction in subsidies on the market because there are ways to measure it, and we saw a very dramatic reduction of the market in line with what we're experiencing ourselves, okay? So I'd say the market is adapting to it in the sense that they -- everybody has to scale back a little bit. We did scale back our costs in Italy to adapt, right, in our case. So that's been the reaction. I think that's all I can say.

Yes. And I would say maybe to add something, JP. I think also Zach, as we add new products, example, Through-the-floor, home elevator, VPL, those products are much less subsidized. So I think as we bring diversification that will make us much less dependent on the subsidies going forward.

Good color. And then for my second, we were expecting a bit more CapEx this quarter. How are you thinking about the pacing of investment in the Greenville expansion?

I know Zach, unfortunately, permits takes time in life. So we're expecting to break the ground in January to be ready in the second half of next year. So, so far, we did some CapEx, again, some small CapEx. We have been able to maintain more or less our guidance for the year. But again, a slightly higher CapEx will be for next year, but still we try to be diligent. We are wrapping up our budget for next year, and we try to be diligent that at the end, we cut maybe somewhere to allow some CapEx because of Greenville. So I'm not expecting something extraordinary next year, even though we expand in green.

One moment for our next questions. And it comes from the line of Kyle McPhee with Cormark Securities.

Just on that Greenville expansion, can you remind us or give us the updated total CapEx budget for that? And then also just remind us on your manufacturing capacity situation ahead of your spring Investor Day that sounds like it's going to be highlighting a lot of growth themes. Do you have capacity to support the next growth wave without having to incur a CapEx?

Thank you. So basically, as our previous press release, okay, the investment that we want to do in Greenville is approximately CAD 30 million. So I think as we progress, we'll be able to put more color. For sure, it's not $30 million for the expansion. It's for some equipment as well. So I think we will see. And after that, really a footprint, I think right now, we have approximately 12 factor like a 1.1 million square foot of footprint. And unfortunately, most of our factory just work on 1 shift. So I think we have plenty of capacity for the next 5 years. So I don't see any major change in our footprint in the next 5 years unless there's some M&A. That's it.

Our last question comes from the line of Carl Abudobi with Scotiabank.

This is Carol on for Jonathan Goldman from Scotiabank. Really nice performance in accessibility margins, I think an all-time record. I believe Q4 margins are seasonally weaker, but it seems like you still have room on Severia 1. How should we think about the sustainability of margins?

I think margins has been very sustainable in the last 2 years, and we always see a bit of improvement each quarter. For sure, yes, Q4, yes, there's Christmas time, there's that. So it's a bit too early to comment. But we think that the over 20% for the food group of Sava we'll be able to maintain in the fourth quarter. So I'm not too worried about that. And I think going forward, we have a good plan, as we said a bit earlier, to continue to improve margins each year, but also to have some growth expansion, which is a key focus for the future.

Okay. And could you also provide a teaser for the Savaria 2.0 initiatives, if possible?

I think the teaser will be in April. And I think it will be really around growth, growth. So every decision that we make, does it have an impact on growth. So we decide to do R&D project, is it going to bring growth or not? Does it mean we'll not do an R&D project, it's going to improve some quality or make it for regulation for the code. But definitely, as we do M&A, is this going to add, for the synergies and to bring some growth. So definitely, growth we want this to be in our first line of discussion on most of the decision.

Thank you. Ladies and gentlemen, this concludes our Q&A session. I will pass the call back to Sebastien Bourassa for final comments.

Thank you, Carmen. And lots of very interesting questions this morning. So thanks for taking the time. And again, one more time, thanks for all the Sav employees and looking forward to see you again in March. Thank you.

And thank you all for participating. You may now disconnect. Everyone, have a great day.