Savaria Corp

TSX:SIS

Earnings Call Transcript 2021-Q1

[Operator]

Good morning. My name is Stacy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Savaria Corporation's Q1 2021 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 11, 2021, with respect to the Q1 2021 results. Thank you.Mr. Bourassa, you may begin your conference.

[Marcel Bourassa, President, CEO & Chairman]

Thank you, Stacy. So [Foreign Language] everyone. It's a pleasure to present to you our Q1 with my guys. My guys, a few financial key things, the guy of lot of experience again on acquisition, but he handled the [indiscernible] and the Patient Handling, that's Nicolas Rimbert. And the guy who -- integration, okay, it's my son, Sebastien Bourassa. So they will answer. You can call -- you can ask directly the answer to them. Or if not, okay, I will refer to my specialists, okay? So -- but I am very excited to present to you Q1. Why I am excited, okay, I think we make a mega acquisition with Handicare. That put us on this path to succeed. And we have done that in Q1. I think our sales beat The Street, our EBITDA, adjusted EBITDA beat The Street. So -- and you will see that, that will continue throughout the year. So we have a next -- that's important when you make a mega acquisition, to have a good start. And we have a great start.And the people -- I repeat, the people are enthusiastic to work with us. We -- that's directly in person, but we make a lot of people from healthcare. And they are great people, and they want to focus with us to have the same goal to have the people making products for people, the aging of the population. So -- and it's accurately stay home with Savaria. I think that a great logo that many people, many old people, they want to stay at home. They want to stay home.So my people work hard, thanks to my people. And my people who are in position, the people that we make the acquisition work very hard. We are on the same page. And imagine one thing, we have Span, we have Garaventa, we have Handicare and we have Savaria. So it's not just Handicare and Savaria. That's Handicare and with the products of [indiscernible] with Span with the Patient Handling, it would be tremendous what we will do for North America in this division. We don't have to forget that. And after that, we have Garaventa, that they are in Europe. We would try to make some cross setting with Handicare. And we already begin that with Handicare and Garaventa some products.So what make the success of company, it's I think 3 item. That is very, very, very important to make success. It's products, territory, people. You can see it if you want. People [indiscernible] quite important. And that's exactly what we have with this key acquisition. So it's fun. The result will be there. For further results on offsetting our products to Handicare would be more there in '22. But we already begin that on the cross setting. So it's great. And we -- I have 1 goals, I don't see before I retire, so Sebastien don't get too excited. But I will say at least until 2025 to meet my personal goal and the personal goal of my people to reach $1 billion of sales by 2025.For sure, it will take a good, good internal growth. That we can do. We are in better position than ever to make internal growth. And maybe some little acquisition here and there to make always some complement. So I am very excited, but it's time to begin your question. And again, thank you very much to be there. And I read some people this morning about what they think about Q1 and the future. We see some upgrade from some broker. Thank you very much. And our success is the success of my analyst too. So we are ready for the call.

[Stephen Reitknecht, Chief Financial Officer]

Marcel, do you want me to give the financial update?

[Marcel Bourassa, President, CEO & Chairman]

Yes, yes, yes. Absolutely, absolutely, absolutely. That's you, Stephen.

[Stephen Reitknecht, Chief Financial Officer]

Thanks, Marcel. And good morning, everyone. I'm going to begin with some remarks regarding our Q1 2021 consolidated financial metrics. For the quarter, the corporation generated revenue of $112.1 million, up $23.7 million or 26.8% compared to Q1 2020, mainly due to the acquisition of Handicare on March 4, 2021. Gross profit and gross margin stood at $38.9 million and 34.7% respectively, compared to $30.1 million and 34.1% for Q1 2020. The increase in gross profit over prior year was attributable to the acquisition of Handicare as well as a favorable product mix.Adjusted EBITDA and adjusted EBITDA margin stood at $17.3 million and 15.4%, respectively, compared to $12.4 million and 14% in Q1 2020. The increases in adjusted EBITDA and adjusted EBITDA margin were mainly attributable to the acquisition of Handicare as previously mentioned, as well as $1.1 million in COVID-19 employment retention government of Canada subsidies received during Q1 2021 as well as continued corporation-wide cost containment efforts.Now I'll move on to our segment results. Revenue from our Accessibility segment was $80.6 million in Q1 2021, an increase of $18 million or 28.7% compared to Q1 2020. The increase in revenue was mainly attributable to the acquisition of Handicare, which contributed an increase of 34%, while organically revenues contracted 4% and foreign currency also had a negative impact of approximately 1%. The contraction in revenues is the consequence of the economic slowdown caused by the global pandemic impacting the entire first quarter of 2021, while having a minimal impact last year in Q1 2020. Adjusted EBITDA and adjusted EBITDA margin both before head office costs stood at $13.9 million and 17.2% respectively, compared to $10.4 million at 16.5% for Q1 2020. Improvements in both metrics were due to the acquisition of Handicare.Revenue from our Patient Handling segment was $25.5 million for the year, an increase of $4.5 million or 21.5% when compared to Q1 2020. The acquisition of Handicare contributed 29.5% of growth, while organically revenues contracted 4% and foreign exchange had a negative impact of almost 4%. Adjusted EBITDA and EBITDA margin, both before head office costs, stood at $3.7 million and 14.5% respectively, compared to $2.5 million and 11.9% for Q1 2020. The increase in both metrics was mainly due to the acquisition of Handicare.Revenue generated from the Adapted Vehicles segment was $6 million, an increase of $1.2 million or 24% when compared to the same period in 2020. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs finished at $0.6 million and 10.4%, respectively, compared to effectively 0 EBITDA in Q1 2020. The increases in revenue and adjusted EBITDA and adjusted EBITDA margin when comparing Q1 2021 to Q1 2020 were again mainly due to the acquisition of Handicare as well as the Canadian emergency wage subsidies received.Now turning to some financial liquidity metrics. During the quarter, the corporation increased its debt level as a result of financing the Handicare acquisition on a pro forma trailing 12-month basis. The corporation's debt to adjusted EBITDA ratio at March 31, 2021, was 3.5x. The corporation expects a strong cash generation to continue. And coupled with additional available financing, continued discipline in terms of working capital management and capital expenditures, the corporation has ample liquidity to fund future projects and investments.Looking ahead, although it remains difficult to quantify the continued impact of the current pandemic accurately based on the results of Q1 2021, coupled with the corporation's confidence in the strategic integration plan with Handicare that is underway and strong underlying long-term growth fundamentals for our markets, management estimates -- sorry, management anticipates the corporation will be able to achieve an adjusted EBITDA in excess of $100 million during fiscal 2021.And with that, this completes my prepared remarks, Marcel, and I'll turn the call back over to you.

[Marcel Bourassa, President, CEO & Chairman]

Steve, thank you very much. Very well done. And it's always more easier when we have good numbers, but at least you have done very good in your presentation. So do we go through some questions?

[Operator]

[Operator Instructions] Your first question comes from Derek Lessard from TD Securities.

[Derek J. Lessard, Research Analyst]

Congratulations on the quarter. Obviously, so I'd like to talk maybe about some, if any, commodity labor for inflation pressures within your businesses that you're seeing. And maybe if you are seeing those, some of your mitigation efforts there.

[Marcel Bourassa, President, CEO & Chairman]

Yes, we are seeing that. But Sebastien, you want to answer on that one?

[Sebastien Bourassa, VP of Operations & Integration and Director]

Yes. Good morning, Derek. So yes, there's inflation, I would say, like any industry right now, for the electronics, the steel, be the phone, transportation costs. So maybe through the year we could maybe see a 10% inflation in different parts supply. But I think different times during the year these division will make, so we pass some price increase to the customer. So as an example, if we get a 10% inflation during the year, we might pass a 5% increase to our customer. So you might see some small noise from one quarter to the other. But in the long term, we should be able to keep the same margins. And don't forget one thing. We are quite vertical integrated, like from Canada to Toronto, to different place an organization. So whenever there is inflation, we try to have a counter project that maybe we can make some savings, maybe we can start to be more vertical integrated. So I think on the long term we should not be worried about that.

[Derek J. Lessard, Research Analyst]

So that full, let's say, 10% inflation, you don't -- I mean, you expect to offset it either through price increases or through internal initiatives?

[Sebastien Bourassa, VP of Operations & Integration and Director]

Exactly. And I say we could see up to 10% during the year. I did not say we were exactly right now at 10%, but definitely we are able to adapt to our business model.

[Derek J. Lessard, Research Analyst]

Okay. And maybe now that you've had some time with Handicare now under your belt, just wondering if you guys have been able to identify maybe some other areas or other synergy opportunities that you perhaps didn't see during your initial due diligence?

[Marcel Bourassa, President, CEO & Chairman]

Yes, for sure. For me, don't forget, they are like Savaria in other country and with some other dealers than we have. But you know something, at beginning we will see -- was just mentioning about, you know about stairlift, straight stairlift, curved stairlift. But now we say, hey, with Span we can have a good mix of this project with their division in North America. And we have Garaventa, that we can work together and to cover more territory in Europe. And what is important, that we were not seeing that before. We see right now that on technology they are very strong. So we learn from them. That's good. When you are a partner of, you run just not one side, you have to listen to the other side too. So we learn that with the people down there, the guy, [ Peter ], who run all the production, we can learn a lot from them and be better at what we do right now. So all their equipment, and use of laser or welding robot, I think they are better than us. That's good to meet somebody that are better than us. And for sure we learn on marketing. I think down there we have [ Claire ] who is in charge of marketing and sales. I think she's like that, she is very good. So we learn more to have meeting. My guy will -- so I think can explain that later, that -- later. But we have meetings with them every week on different subjects. And we have subcommittee that go deeply in one subject. So we learned that it will be better than what I was thinking at the beginning.

[Derek J. Lessard, Research Analyst]

Congratulations again.

[Operator]

Your next question comes from Frederic Tremblay from Desjardins.

[Frederic A. Tremblay, Analyst]

[Foreign Language] So Marcel, on your revenue target of EUR 1 billion by the end of 2025. Can you share your vision as to how the profile of Savaria may evolve to get there? And will the company continue to expand geographically? Or will it add new products?

[Marcel Bourassa, President, CEO & Chairman]

Well, I mean, it's quite [ low ] right now. Example, many country around the world that were not there and they need our kind of products. But really, I push that we can be better in North America. With the new products that they have, they are one of the king in their project, the straight and curve. And I think in Europe it would be a good complement, what is doing Garaventa down there. And they have one manufacturer in China. We have one manufacture in China. So we don't sell a lot. They don't sell a lot in China. That's a great territory. And that's even in our [ traffic ] to bring a curved stairlift, all the equipment that we will build directly in China to sell to this market.You know what is important on the curved stairlift is how many days it takes you to bring that to the consumer. The consumer, when they are ready to buy, they are ready to buy now. It's why in Toronto -- I think Sebastien can talk about that. We will have by the end of this year working equipment, the same that they have done there in Europe. That will be in Toronto for the North American market. So it's very exciting. And you know something, when you do the math, it would take more a lot of magic, new things to bid this EUR 1 billion to do that sooner. So yes, we can find other things, but I think we have a super, right now, super products. When we see a dealer, nobody, nobody in the world can offer all our products at the same place. That's something you will say dealer, you say, oh, by the way, okay, we have that, that, that. We have that unit. That unit is a great project to sell. And that thing of Handicare is right behind, so we love this product, but it takes time to sell it and sell Vuelift, it's 2 different products, okay? So -- but they want -- they are enthusiast about that. And we will -- I think we will push that, and we will see some great number coming from Europe on this Vuelift. This Vuelift is a product outstanding. Nobody is building something similar than that. So yes, I'm quite excited.

[Frederic A. Tremblay, Analyst]

Great. And maybe a question for Nic on the Patient Handling side. Can you just maybe provide your updated thoughts or views on how the demand environment is shaping up there in terms of access to facilities? We saw that the organic growth decline in the segment was less severe in Q1. So is that a sign that things are starting to improve on the demand side for that payment?

[Charles Nicolas Rimbert, Vice President of Corporate Development]

Thanks, Fred. I would say that the short answer is yes. Although it is largely dependent on geography. So you have many pockets of the U.S., for example, which have reopened or in the process of reopening, notably in the south, for example. However, there are other regions that remain closed, including Canada and -- or I guess, many parts of Canada, so just Ontario. With that being said, I think we had a very strong month of March. It was a very strong, not only for Handicare but also for Span. And so I think that kind of bodes well and gives us a lot of positivism as we kind of move into Q2. Some other things kind of just to think about, the hospitals are coming back. So that's something that is good for our business, in terms of hospitals being able to, I guess, provide the elective surgeries. That's where they make quite a bit of their profits. So again, more profits, more means of investments in capital equipment and the like. And maybe just a little anecdotal, a little piece of news, our Head of Sales, [ Clyde ], who was telling me when I was talking to him earlier this week that he just attended his first in-person trade show in over a year. And so that was great for him and for that community to get together in person. So yes, I would say, Fred, to go back on me, maybe that was a long-winded way of answering it. But I would say, yes, it is reopening. And again, we saw that primarily in March. And so our order intake is good. The backlog is looking pretty strong. And so I think we're more positive. But again, still cautious. Like I said, there are still pockets that are struggling here in Canada, in particular. So cautiously optimistic, let me put it that way.

[Frederic A. Tremblay, Analyst]

Great. And maybe just a follow-up to that on the -- maybe on the margin side, 14.5% in the quarter. Another -- the second consecutive quarter of margins above your, I guess, previously stated goal of 13% to 14% for this segment. Any read-through there for what to expect moving forward? Or there was some onetime items in there that's a boost in the margin in the quarter?

[Charles Nicolas Rimbert, Vice President of Corporate Development]

The...

[Marcel Bourassa, President, CEO & Chairman]

The margin -- no, you will complement. So our long term, okay, me I see that we should stick, and we will be at $1 billion, we should stick to have something around 16.5%. That's our goal. And I think with the people, with -- we have great people. And all my people in Savaria are around 40 years old. Some are a little bit under. But -- so they are strong. They have people -- this is people with talent. And we find that to -- with our other division that we will work with. So you want to complement that, Nicolas?

[Charles Nicolas Rimbert, Vice President of Corporate Development]

The one thing I would say is that we saw that exiting last year, the margin improvement was apparent in Q3 and Q4. We had the contribution of Handicare here in the first quarter, which again helps, again, going back to what I was saying earlier, that both of us had a very good strong month of March. So that kind of definitely helped in terms of the margin contribution of Handicare in the quarter. That 13%, 14%, it is, I would say, maybe the low bar, right? Marcel talked about 15%. Yes, that is where we're striving to get to. So again, I don't know what you're modeling there for the rest of the year. But again, we are positive in this segment, and we should see some margin improvement there as well, especially as we work on some of the synergies that Marcel mentioned earlier between the Span and the Handicare teams.

[Operator]

Your next question comes from Nick Agostino from Laurentian Bank.

[Nick Agostino]

I guess couple of questions. First, on the Vuelift, can you guys talk to the demand specifically within Europe, how the -- how that product is being received in that market?

[Marcel Bourassa, President, CEO & Chairman]

Yes. Sebastien will look about that because he manufactured that. And he can include the numbers we manufactured this year. And in 2020 how many, this year, '21, coming from our [ Rex ] our guy on sales in Montreal, the salesmen, we know the number and what we expect a little bit what we will do in Europe. So it's a great product. And I think the margin is good on this project. And we are in our complete different company than other people who offer -- try to offer something similar. So can you talk about your prediction, Sebastien, your goal?

[Sebastien Bourassa, VP of Operations & Integration and Director]

So basically, Vuelift, Nick, just to give you a rough idea of numbers. Last year we did around 100 units. This year our target is to do 180 units. I will see my backlog of Vuelift is the best it has been since the beginning. There's a lot of marketing effort that has been done. A good portion in Europe, especially like in Germany and Switzerland with Garaventa. And now Handicare is starting to talk to their dealer in Europe, to their direct location. So I think it will take time, but you will see some traction. So definitely this year 180 units for the Vuelift is possible. And we said that previously that by 2023 we would like to be around $30 million of sales. So I think we are in the right direction. And I will say the Vuelift also has a big impact on all the other elevators, like the Eclipse, the Infinity, the Garaventa home elevators. So we are quite busy in the home elevator segment where backlog is good. For sure, not all the business is good. The commercial is still trending a bit behind, the incline platform, the vertical platform. But if you see the residential with the home elevator and the stairlift, that's a strong segment in this '20-'21 years.

[Nick Agostino]

Okay. And my second question on the [ GAAP ] [indiscernible] EBITDA margin, I'm assuming there was obviously some benefit from Handicare. If you look at your base business before the acquisition, you guys are undergoing that restructuring. Maybe just give us an update as to where that sits today and where you guys think you'll exit the year when it comes to EBITDA margin on your base Adapted Vehicle business.

[Marcel Bourassa, President, CEO & Chairman]

Sebastien?

[Sebastien Bourassa, VP of Operations & Integration and Director]

Yes, I think previously we said that the target for the car business was 10% of EBITDA. There has been some noise in the last 2 years because the sales were not there. We have restructured a bit. So I think between the mix of the Savaria and Handicare Norway, I think a 10% target for the car business over a certain time should be a good target for this segment of the business.

[Marcel Bourassa, President, CEO & Chairman]

Yes. And just to complement that, that's good Sebastien. We can say that it's during the pandemic, it's not easy. But if you are in wheelchair, man, it's even more difficult. So -- but we have been in Norway, that make 10%. And I think we have some good perspective to continue on this side. And [indiscernible] action, we work hard. And me, if we make 10% out in this division, I'm not happy, I'm very happy.

[Nick Agostino]

Okay. And my last question, with regards to Handicare, you spoke earlier about maybe some of the positive observations from that acquisition. Now you've had 2 months to look under the hood there. I'm wondering, are there any things that caught you by surprise to the negative where maybe you feel that at Savaria you're doing a better job at, and you can, I guess, port over to Handicare to improve their operations. So anything you can go back to them with from the Savaria's side?

[Marcel Bourassa, President, CEO & Chairman]

The only surprise that [indiscernible] we [ take per session ] and that was quite a surprise, that was the departure of their CFO, Pernilla. And she says she wants to be the CFO. She knew that we have CEO, and she find a job in his own town. So this is less traveling time. And we understand her, she is great. She help us to transfer more responsibility for other people that we have in U.K. So that's the only thing. All the other thing, that was negative, all the other thing are just one thing positive.

[Operator]

Your next question comes from Zachary Evershed from National Bank Financial.

[Thomas Bolland, Associate]

It's actually Thomas calling in for Zach. Congrats on a strong quarter. 2 quick ones for me. First of all, can you remind us how Handicare's accessibility, residential versus commercial split compares to Savaria's. And how each end market is faring in the current reopening.

[Marcel Bourassa, President, CEO & Chairman]

Okay. That's an interesting question. Very interesting. So I'm lucky. I think I can pass this ball, I think, to [indiscernible] Charles Rimbert.

[Charles Nicolas Rimbert, Vice President of Corporate Development]

Okay. Perfect. As you know, Handicare's accessibility segment is comprised of stairlifts, so both straight and curve stairlifts. Those products are sold primarily in the residential space, so in homes. Yes, you may find in some commercial settings, like maybe a community center and alike. But I would say that for all goods and purposes, you can think of that as being a residential product. And then on the Savaria side, in a more normal environment, so I would say kind of maybe pre-COVID, our business was roughly split -- sorry, 50-50 in terms of our commercial and residential applications. Again, you have many of our platform lifts, like the inclined platform lift and many of our vertical platform lifts that are more maybe a commercial-oriented product. And then obviously our residential elevators and the stairlifts that we were selling and some maybe small porch lifts are more geared towards the residential space. And what we've seen in the past year, in particular during this COVID pandemic is that our residential activity has maintained and has actually done very well. While the commercial has lagged a bit as many of those reduced foot traffic, for example, in shopping centers, schools being closed.All of that has had a negative impact, I would say, on the commercial side of the business. So maybe in the current year it's a little heavier weighted towards residential. But again, going forward, as the economies open back up and that commercial business comes back, we might see it tilt maybe not quite back to 50-50, but it will be closer to that in the year…

[Thomas Bolland, Associate]

Okay. That's helpful. And maybe a second one for me. How does management feel about M&A and the usual dividend increase given the company's current leverage levels?

[Marcel Bourassa, President, CEO & Chairman]

Can you repeat quickly your question?

[Thomas Bolland, Associate]

Yes, absolutely. So I was wondering how management feels about the usual dividend increase and the M&A prospects given the current leverage?

[Marcel Bourassa, President, CEO & Chairman]

Okay. Okay. That's a good question. And that's for me. You know dividends is part of our culture, I would say, that we have always some kind of increase. And we always do that in September. So you will see in September about the dividend. After that, acquisition [indiscernible] our 4 big companies that we work with Span, for sure, Handicare, and with Garaventa and all the projects that we have at Savaria [indiscernible] we don't need to make any acquisition. We have enough to push this company to the EUR 1 billion. Just our 4 transits always going to one territory, the other territory and to the new products, for sure our dealer will feel maybe some pressure to buy the stairlift from Handicare to stay always in the same family. And now you will always say all your products in stairlifts are so-so, not the best. If you have another one, come to visit us. Now we are there. We say to our people, hey, we are one at the best or if not the best in the category of stairlift. So we don't need to make other acquisitions, just play around our key player [indiscernible] and just find new territory. It's just exciting that you arrive at the number, but we have to buy this company this company, no, no, no. What we have right now, we are very busy, and my people are very in the game. So that's our plan. No acquisition major, for sure.

[Operator]

Your next question comes from Justin Keywood from Stifel Bank.

[Justin Keywood, Director of Equity Research]

Just had a question of clarification on the organic growth. If I heard correctly, it was negative 4% overall in the quarter, but I also heard that there was some FX impact. So I guess my question is, does that organic growth include the negative headwinds from foreign exchange?

[Marcel Bourassa, President, CEO & Chairman]

Steve?

[Stephen Reitknecht, Chief Financial Officer]

Yes, I can take that one. So it's -- overall, on a consolidated basis, the organic contraction was 5%. And the accessibility in Patient Handling segments, it was 4%. So that's where the 4% came from. And the FX impact overall on a consolidated basis was 1.7%. So looking at consolidated Savaria. So those are 2 separate numbers, and it's not -- the 5% does not include that 1.7%. So it's 5% on organic and 1.7% on foreign exchange.

[Justin Keywood, Director of Equity Research]

Okay. So maybe closer to a 3% contraction. That's helpful. And then, I'm just wondering when we are expecting the business to inflect as far as the organic growth coming back, kind of to the near double digits that Savaria has seen in the past, like are we there now? Or is there a potential quarter upcoming where you see that potentially playing out?

[Marcel Bourassa, President, CEO & Chairman]

Okay. Okay. I will take this one. And I tell you that you will see a major change in Q2, about organic growth, major change. And the change will be that I think we can be back in the 8% to 10% just on organic growth to make our $1 billion without acquisition. But we will see. No, no, we are in the game. You will see at Q2. Q2 is exciting. We know a little bit. We are in the middle of May. It's half of the quarter so far. If we are not -- if we don't -- are able to know exactly or quite exactly the number of Q2, we have a problem. But we don't have a problem. So we are excited. We see the booking. The booking is just Toronto. The booking is up, 60% in April, consider that -- in April '21 compared to April '20. That's in Toronto, that's where we make our money. And the Handicare is very happy. They have good growth, good organic growth. So they are very busy. So when you put that all together, I am excited about the number that we will show you in Q2. And Q2 really [ will happen ] for 3 months. And we will have this [ visibility ], battle of prepandemic to pandemic because last year [indiscernible] we're in pandemic, so. And I say to my people, we don't have to beat it in Q2 of '20. We are running about the Q2 of '19. That's the real comparison that we can do. But you will see that now we see some good growth.

[Justin Keywood, Director of Equity Research]

That's very clear. And then my last question is just on the cash generation. It's quite strong in the quarter. Cash from ops was near $28 million. I believe that's a record for the company. Just wondering if there's anything particular to account for that generation?

[Marcel Bourassa, President, CEO & Chairman]

Yes, we have our specialist on that, Steve.

[Stephen Reitknecht, Chief Financial Officer]

Yes, sure. So Justin, just quickly, we have a payable for the remaining 4.6% of Handicare shares that we're yet to acquire. We're working towards getting advanced title on those, and we're in the middle of the [ squeeze all ] process. So that's set up as a payable, and that's where that showed up in the cash flow. So that's -- that $19 million is pushing that $27 million higher. So that's something that we're not going to see continue.

[Justin Keywood, Director of Equity Research]

Got it. Sorry, what was that amount that was in the payables?

[Stephen Reitknecht, Chief Financial Officer]

It's about $19 million, $20 million, $19.6 million.

[Operator]

Your next question comes from Michael Doumet from Scotiabank.

[Michael Doumet, Analyst]

I joined the call a little late, so I apologize if some of the questions are a little bit redundant. But I did hear some really interesting comments just in the last couple of minutes. Marcel, on your comments about the organic growth, I think you referenced 8% to 10%. That doesn't necessarily get you to 2019 levels. So for Q2, is the idea that we sort of get back to above pre-COVID levels? Or is that going to take a little bit longer?

[Marcel Bourassa, President, CEO & Chairman]

You will see, you will see that we will be quite strong. And I don't want to promise something that we'll not deliver. But for sure, we will beat easily 2020. Let's start by that.

[Michael Doumet, Analyst]

Okay. Okay. It does sound like you're optimistic at least from a sequential perspective that there is improvement. So that's noted. And then maybe going back to even the prior comment, I understand that you don't expect to need to make any large acquisitions to get to that $1 billion in sales by 2025. So using the 2022 consensus estimate for sales, I mean, that would imply about 10% annual growth on a per year basis. Presumably you would do some tuck-ins there as well. So organic wouldn't have to necessarily be 10%. But is that the right way to think about it?

[Marcel Bourassa, President, CEO & Chairman]

Yes, this is the right way, but I think like that. So we are at least to think like that.

[Michael Doumet, Analyst]

Okay. Okay. No, that's great. Okay. And then maybe getting to the nitty-gritty. And again, I was late to the call, so if these questions have been asked, I apologize. But any way you can talk to the organic growth rate and the top line trends that you're seeing in accessibility for Handicare. If I remember correctly, Handicare's organic growth momentum is quite positive in the second half of last year. Was that maintained so far in Q1?

[Marcel Bourassa, President, CEO & Chairman]

Yes, for sure. So they are a very good Q1. And it's looking very good to have a good Q2. And if we take everybody up to the debtor, and the accessibility, the accessibility we will see go back maybe for near 10%, that will be until the end of this year. And I am very optimistic. We've seen our booking. Just even on curved stairlift, our curved stairlift [ tell us, ] we see a progress of more than 50% in our manufacturing of curved stairlift. And even the straight, we have a good improvement. So it's like the car. It's -- they are all together. So you walk to another dealer, another dealer. So by the way to buy Handicare, so that push ourselves of straight and curve. And plus, we have our stay at home. Stay at home is very important. People are aging. When you are aging you have problem with the steps. And you ask Savaria to help you. And as always, this is a beautiful industry. I was excited in the industry 30 years ago. And even I am more excited right now because our customers make you a check with a smile. So if you [indiscernible] to be in an industry, that to help the people where our foundation was going very well, we have to see by the end of this year we'll have give over EUR 1 million in our foundation to the people who need some mobility. I am very strong on helping kids. Kids is the future. But it's good to be able to do all that at Savaria. You think about other people. Our employee, they stay with us for years, years and years. Maybe I speak too much, but I'm very happy that they stay, they are motivated. And that's the success that we have at Savaria. And when we have other people that they have the same spirit, here we are, the organic growth is come back. You will see it Q2.

[Michael Doumet, Analyst]

Great. That's fantastic color, Marcel. I appreciate it. Maybe one last question. Are you seeing any green shoots on the commercial side? And do you have any views on the potential incrementals from the proposed American jobs plan that calls for about $400 billion of investment in 8 years for care in elderly for people -- for elderly people with disabilities?

[Marcel Bourassa, President, CEO & Chairman]

Yes. So that's another good question. Nicolas, you are a specialist of tax. We see that he is very good -- very strong on construction. And the government want to push to have new home for elderly people. So Nicolas, it's your...

[Charles Nicolas Rimbert, Vice President of Corporate Development]

Yes, maybe on the commercial side, in talking with our dealers and in speaking with the managers of our direct stores, I mean, they're sitting on some pretty good backlog there for the commercial. They're just waiting for certain projects to, I guess, to get the green light. So what I would say is that at the commercial side, it's one where projects haven't been lost. I think it's more a question of delays. I think that's how we should think of it. And although there's limited visibility, I think what we were seeing from the guys on the ground is that when it does open, it's more like a light switch, right? I mean that's kind of the way it's been described, as opposed to being kind of a slow ramp up. It will be very fast reopening. So that's probably the best color I can give you as it relates to the commercial side and how we're seeing that progress. As it relates to government spending, it's difficult for me to sit here and talk to you about buying plans in the U.S. and whether they're going to get passed. The one thing I would say, and this is both from the Accessibility side and also from a Patient Handling side, is I think that there is -- there is going to be quite a bit of investment, not only in long-term care but also as it relates to aging in place, it is an area of focus. You've seen in Europe, some of the more mature markets where they've realized that it's more cost-effective to treat people in home as opposed to having them in hospitals and other facilities. So I do think that longer term we will see some significant investment both on the government and on the private side. But it's difficult for me to give you any specific numbers as to what that might mean for a proposal, right, that's going through Congress at the moment.

[Operator]

You have a follow-up question from Derek Lessard from TD Securities.

[Derek J. Lessard, Research Analyst]

Maybe another one, Nic, on the patient handling. Wondering if you're already starting to see the benefits of the change in mix away from, I guess, the long-term care, particularly as it relates to the exposure to COVID.

[Charles Nicolas Rimbert, Vice President of Corporate Development]

I'm not quite sure I get what you're asking here in terms of the mix away from long-term care. Are you speaking of treating patients in-home, like Home Care, the home care aspect of that business?

[Derek J. Lessard, Research Analyst]

No, I'm thinking about how more heavily weighted the Handicare was towards acute care, right. And all the problems they had in long-term care facilities in the U.S.

[Charles Nicolas Rimbert, Vice President of Corporate Development]

Okay. The one thing I would note, just maybe a little difference between Handicare's business and Span's business is that you're right, Handicare does have more exposure to acute care, in particular in the U.S., I think it's a bit more balanced here in Canada. But in the U.S., it is much more lean towards acute care. One element about Handicare's products and the way it works is that these are products that get installed. So these ceiling lifts, it's a project that requires planning, project management, installation. Many of their sales are for new builds. And so that's something that's a little bit different than with Span is that new build facilities, there aren't any patients there. So it's much more easier to access. And so then it's not necessarily a question of your restricted access to these facilities during, whether it be during the pandemic or in the current environment. It's just more of a question of construction site access that's more general in nature because there aren't any patients in these facilities as they are getting built. So I'm not sure if that helps to answer, but that is kind of one of the reasons why we have seen some, I guess, some increase. I guess the revenue growth there has been stronger as we've kind of exited the pandemic period because they have had that exposure to certain -- whether it be acute care space, surgeries are coming back, as I mentioned earlier, and also as it relates to these new builds where there aren't any patients. So it's much more easier to access the facility as economies are opening up.

[Derek J. Lessard, Research Analyst]

No, that's helpful. And maybe just one final one. Just wondering if there's any more if you've been able to, I guess, see any more improvements in the Handicare side from the Lift Up program? If you're seeing any more benefits from the Lift Up program.

[Marcel Bourassa, President, CEO & Chairman]

Sebastien or Nicolas.

[Sebastien Bourassa, VP of Operations & Integration and Director]

I'll take that. I will start. So basically the Lift Up program is true. We don't want to talk pretty much about it. That's happening at the beginning of Q3 last year. It's going to be fully rolled by Q2 so that we get a full year benefit. But now I think the biggest thing for Handicare is making their budget. They have a good budget on the table for 2021, both on the patient handling, the car and the accessibility. And I think so far that's a good start. And what we are starting to see is really the mix with the cross-selling with Garaventa in Europe, already a few in clients sold. Dealer, we are looking at it. And the next step will be really to do the curve stairlift manufacturing in Toronto. And this by the end of this year we should see it. And this will really help us to, I bet, for sure to save on some air shipping, some of the costs that we have, currently have. And that will give us a better lead time to the customer. Our target is 2 days instead of 3 weeks. So that will really help to pull the sales to a new level, the curved stairlift of Handicare in North America. So I think but really the Lift Up is over. Now we're really working on the new synergies with Garaventa and Savaria and Span.

[Operator]

There are no further questions in queue.

[Marcel Bourassa, President, CEO & Chairman]

So thank you very much, guys. Happy to be interested in Savaria. And thank you for my people with me on this call. You are just great. Congratulation. And thank you very much. Stay safe.

[Operator]

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