Savaria Corp

TSX:SIS

Earnings Call Analysis

Strong Revenue Growth and Improved Margins

Savaria Corporation's Q2 2024 results show robust performance with revenue rising 11.6% year-over-year to $221.3 million, driven by 15.4% organic growth in the Accessibility segment. Gross margin improved to 37.5%, and adjusted EBITDA hit a record $41.9 million, up from $29.3 million last year, achieving a 19% margin. Despite flat revenues and lower profitability in the Patient Care segment, the company maintains a positive outlook, expecting stronger performance in H2 2024. Savaria continues focusing on its Savaria One transformation initiative, aiming for $1 billion in sales and a 20% EBITDA margin by 2025.

Strong Financial Performance in Q2 2024

In the second quarter of 2024, Savaria Corporation reported significant growth with total revenues reaching CAD 221.3 million, marking an 11.6% increase from the previous year. This growth was primarily driven by organic growth of 11.5%, offset slightly by earlier divestitures. Achieving an adjusted EBITDA of CAD 41.9 million and a margin of 19% indicates a marked improvement over last year's figures, where the adjusted EBITDA was CAD 29.3 million at a margin of 14.8%. Notably, this performance marks the first time that adjusted EBITDA has topped CAD 40 million in a quarter, showcasing the strength of Savaria's recovery efforts and operational efficiency.

Segment Highlights: Accessibility Growth Leads the Charge

In the Accessibility segment, which generated CAD 173.4 million in revenue, a robust growth of 15.1% was noted. This performance stemmed mainly from strong demand in both residential and commercial markets, coupled with effective pricing strategies in North America and Europe. The associated adjusted EBITDA for this segment hit CAD 36.2 million, resulting in an impressive margin of 20.9%, a notable increase from 14.2% the previous year. The favorable product mix and reductions in material costs further propelled profitability, confirming a sustained positive trajectory in this key area.

Patient Care Segment Faces Challenges but Remains Optimistic

Conversely, the Patient Care segment experienced flat sales at CAD 47.9 million. This stagnation is attributed to project-based sales dynamics that can sometimes create volatility. Although adjusted EBITDA decreased to CAD 8.2 million with a margin contracting to 17%, there are positive indicators of a healthy backlog and an anticipated recovery as project delays subside. Management expects the second half of the year to yield better results, supported by ongoing investments in expanding the sales force and enhancing product offerings.

Improving Financial Position and Cash Flows

Savaria's financial positioning also showed improvement, with total cash generated from operating activities soaring to CAD 23.6 million from a mere CAD 0.2 million the previous year. The company minimized its net finance costs, partially due to a reduction in long-term debt, which now stands at CAD 274.9 million with a net debt to adjusted EBITDA ratio of 1.88. This marks a favorable improvement from 2.07 at year-end, indicating effective debt management and a strong cash flow outlook moving forward.

Savaria One Initiative: A Path to 2025 Goals

Savaria is in the midst of its 'Savaria One' transformation initiative, which aims for the company to achieve CAD 1 billion in sales and a 20% adjusted EBITDA margin by 2025. As of Q2 2024, the adjusted EBITDA margin stands at 19%, indicating that the company is on track to meet its ambitious targets. The management emphasizes that achieving these goals relies on effective implementation of changes across various operational facets, including enhancements in procurement and sales initiatives aimed at increasing market share.

Outlook and Guidance Remains Cautious

Looking ahead, Savaria has refrained from providing specific guidance for fiscal 2024 but maintains focus on the established 2025 targets. The management conveyed optimism about the market's demand dynamics, bolstered by factors such as the aging population and increased residential construction, which augur well for continued growth opportunities. However, they acknowledge ongoing uncertainty around project timelines in the Patient Care segment, which may impact short-term performance.

Earnings Call Transcript 2024-Q2

[Operator]

Good morning, good afternoon, and good evening. My name is Raz and I will be your conference operator today. At this time, I would like to welcome everyone to the Savaria Corporation's Q2 2024 Conference Call. [Operator Instructions]

This call may contain forward-looking statements which are subject to the disclosure statements contained in Savaria's most recent press release issued on August 7th, 2024, with respect to its Q2 2024 results. Thank you.

Mr. Bourassa, you may begin your conference.

[Sébastien Bourassa, executive]

Thank you, Raz, and good morning, everyone. So today, I will start with a small recap of our second quarter, then Steve will update us on our financial and JP on our Savaria One, and then we'll follow with a small Q&A section.

First, I need to say that I'm very, very proud of our results, and especially of the teamwork that has been done, as we have reached a very important milestone in our transformation after 1 year from the launch. I need to say that all our employees continue to be very motivated on the Savaria One project, and they are very determined to bring Savaria to $1 billion of sales and 20% of EBITDA by 2025.

So some of the key highlights for the second quarter, it was the first time that we have an EBITDA of 19% for the full Savaria with excess EBT being at 20.9%, so almost 21%. And Patient Care at 17%, a bit beyond our target, but I think we'll get there. First time, we have a new metrics, adjusted EBITDA per share of $0.59, which is our best since the beginning of Savaria.

Gross margins were up to 37.5%, which is 150 basis points better than the first quarter. We had a growth of 15.4% for the Accessibility, which is coming both from Europe and North America. So a good job to the team of [ Clare ] and Alex. Now we see that all our factory had pretty good output. And I think the most important to the Savaria One program is we have made a very big change in all our factory we are very organized and ready looking for growth.

Patient Care was flat in terms of sales in the second quarter, but we were against the first half of the year that was strong in 2023. We're expecting a much better second half of the year.

Sales growth remain as something very important in our Savaria One, and we continue our effort for the cross-selling to increase our share of wallet with 150 people in R&D. We continue to improve our existing products and bring new products to the market and we can develop some growth and have some good organic growth.

Integration of our Matot product line that we acquired in April, basically, things are progressing, and we have the -- we will definitely bring that into production in Toronto by the end of this year, so that we can streamline a bit of manufacturing and have a better lead time to our customer.

Our Mexico nearshoring activity continue. Now we have 80 employees. We have some regular shipment to North America, so we're quite happy with the progress. We have continued to deleverage the balance sheet. Now we have a net debt-to-EBITDA of 1.88 with available fund of $226 million, if we want some -- to do some acquisition. So the priority right now remains Savaria One, but we're still looking for acquisitions. We can replace what we divest in the last year.

To conclude, I would say we are very lucky. We continue to operate in a very nice industry with the aging of population staying at home, the density of the residential housing that they can put a residential elevator continue to be a very important factor in our growth story, and our large product offering makes us a very attractive partner.

And last, I would like to thank, again, all our employees, and our dealers for success in the second quarter. So Steve, financial, please.

[Stephen Reitknecht, executive]

Thank you, Sebastien, and good morning, everyone. I'm happy to be here today, and I'm excited to share some remarks regarding our Q2 2024 consolidated financial metrics.

Key highlights for the quarter include, as Sebastien mentioned, double-digit organic growth in both -- in Accessibility in both North America and Europe as well as major improvements in profitability and gross margin and adjusted EBITDA margin on a consolidated basis.

For the quarter, we generated revenue of $221.3 million, an increase of $22.9 million or 11.6% versus last year. The increase mainly came from organic growth of 11.5%, partially offset by the divestitures of then Van-Action and Freedom Motors. As well, we had positive foreign exchange fluctuations in the quarter.

I'm pleased to report that the corporation delivered our strongest quarterly adjusted EBITDA, which is higher than any past quarters, crossing for the first time the $40 million mark. We also delivered gross -- we delivered a record gross profit and gross margin of $83 million and 37.5%, compared to $67.1 million and 33.8% in Q2 2023. The increase in gross profit of $15.9 million is explained by increased revenues, improved gross margins in both segments due to operating leverage, improved pricing, a favorable product mix as well as lower material costs.

While Savaria One has helped us achieve these results, we incurred again this quarter $5.3 million for strategic initiative expenses, in line with previously stated expectations. JP is going to speak more about some of our ongoing initiatives in detail shortly.

Adjusted EBITDA and adjusted EBITDA margin finished at $41.9 million and 19%, compared to $29.3 million and 14.8% last year. This represents $0.59 per share, up $0.14 per share when compared to Q2 2023. The increased profitability is mainly explained by the increased gross margins and lower SG&A expenses as a percent of revenue as we remain diligent about our cost base.

Now looking at our segmented results. So revenue from our Accessibility segment was $173.4 million, an increase of $22.8 million or 15.1% compared to last year. The increase in revenue was mainly driven from organic growth of 15.4%, driven by strong demand in both the residential and commercial sectors, price increases in North America and Europe, and last year was also impacted by issues with our ERP system implementation in Europe.

Adjusted EBITDA and adjusted EBITDA margin for Accessibility stood at $36.2 million and 20.9%, compared to $21.4 million and 14.2% last year. The increased profitability was mainly due to higher revenue and improved pricing, a favorable product mix and lower cost -- lower material costs for both regions. Last year was also weaker due to the previously mentioned system implementation. The backlog in Accessibility segment remains healthy.

To offer additional insight into our regions, we are proud to report the revenues from both Accessibility in North America and Europe increased by over 15% compared to the previous year. The adjusted EBITDA margin for North America was 23.6% in the quarter, while the margin in Europe increased to 15.8%, reflecting significant improvements from a year ago as well as a sizable improvement over Q1.

Turning to our Patient Care segment. We saw our revenues reach $47.9 million for the quarter, which was flat compared to last year. As a reminder to our investors, our Patient Care business is driven in large part by project-based sales, which can be lumpy from time-to-time, and can be impacted also by project delays. The backlog in Patient Care also remains healthy.

Adjusted EBITDA and adjusted EBITDA margin stood at $8.2 million and 17%, compared to $9.3 million and 19.4% last year for Patient Care. The decrease in both metrics was mainly due to higher SG&A expenses, which were partially offset by pricing initiatives. As we mentioned in past communications, Q1 and Q2 of 2023 were exceptionally strong and the improvements pertaining to Savaria One are expected to affect the upcoming quarters more.

On a consolidated basis, net finance costs were $7.4 million, compared to $4.5 million last year. Interest on long-term debt decreased by $1.5 million due to the reduced balance of debt that we're seeing, which was primarily driven by the raise last year.

We also experienced unfavorable variations on foreign currency exchange and financial instruments, both were unrealized in nature. Net earnings was $11 million and $0.15 per diluted share for the quarter, compared to $8.8 million or $0.14 per diluted share last year. The increase in net earnings and net earnings per share was mainly due to higher adjusted EBITDA, partially offset by strategic initiative expenses, net finance costs and higher net income tax expenses.

Adjusted net earnings was $15.6 million or $0.22 per diluted share for the quarter compared to $9 million or $0.14 per diluted share for the same period in 2023, reflecting a large increase when one-time non-recurring strategic initiative expenses of $5.3 million are carved out.

Turning now to capital resources and liquidity. For the quarter, cash flows related to operating activities before net changes in non-cash operating items reached $26.7 million, compared to $17.7 million last year, attributed to the increased EBITDA. Net changes in non-cash operating items decreased liquidity by $3.1 million compared to a decrease of $17.5 million in Q2 of last year. The decrease in 2024 was driven by increased prepaid expenses and other current assets as well as decreased deferred revenue, while 2023 was unfavorably impacted by trade receivables, inventories as well as trade payables, partially offset by higher deferred revenues.

As a result, cash generated from operating activities in Q2 stood at $23.6 million, compared to $0.2 million last year, an increase of over $23.4 million. While DIO slightly increased during the quarter, it came down for the June month end and our DSO and DPO measures both improved versus Q1, aligned with our efforts to improve working capital management throughout the business. We remain committed to enhancing working capital as we grow.

Cash used in investing activities was $11.3 million for the quarter, compared to $4.5 million last year. We disbursed $4.7 million for fixed and intangible assets, compared to $4.6 million last year, so essentially flat. In addition, we disbursed $6.9 million for the business acquisition of Matot that was done in April of this year. To support business growth, we're expecting capital expenditures to stay in the historical range of 2% to 2.5% of revenue for the 2024 year.

Cash used in financing activities was $22.6 million for Q2, compared to $15 million last year. The variation is mainly explained by the reimbursement on the credit facility of $8.8 million in the quarter, compared to proceeds drawn of $0.8 million in 2023 as well as lower interest paid of $1.9 million.

As of June 30th, 2024, our net debt was $274.9 million. The ratio of net debt to adjusted EBITDA stood improved at 1.88 in comparison to 2.07 at the end of last year. And so, looking forward, with regards to guidance, as previously stated, Savaria is not providing guidance for fiscal 2024 as we focus on the achievements of our 2025 targets of approximately $1 billion in revenue and 20% adjusted EBITDA margin.

The global team is focusing on delivering on these 2025 objectives, and it remains difficult to pinpoint where we're going to finish 2024 and the remaining quarters therein. Savaria's future prospects are promising driven by strong market demand, the progress of Savaria One and potential acquisition opportunities that will enhance our market position.

And with this -- and with that, this completes my prepared remarks, and I'm going to turn the call over to Jean-Philippe to provide further details on how we're progressing with Savaria One.

[Jean-Philippe Montigny, executive]

Thank you, Steve. Good morning, everyone. Before I dive in, I just want to take a moment to thank the hundreds of colleagues at Savaria, who are contributing to our success. Their creativity, their passion, the expertise they have and their rigor and executing all the initiatives we are pursuing is what makes Savaria unique and our Savaria One program a success.

As you saw, Q2 2024 was Savaria's best quarter ever. It is the new benchmark for us as it was not due to a single initiative or luck, but rather the results of steady improvements across the business that are paying off. Just to give you a sense, we implemented 75 different initiatives in the first half of this year. In Q1, we saw a modest improvement in our quarterly earnings, and I mentioned that we were starting to see the color of the changes made through Savaria One. While in Q2, we are starting to realize the true benefits of changes made, and it is the first full quarter where we can measure those impacts. While we cannot predict what the future holds, and our business is subject to many external forces, we expect the changes we implemented to have recurring benefits and continue in coming quarters.

Let me give you an example. We made a number of changes to our commercial terms. For example, we introduced the new dealer partner program in North America. While this program was introduced in January, the first orders placed within this program were likely produced and delivered at the end of Q1. So we really see the full impact of commercial changes on our revenues in Q2.

Another good example is procurement. We renegotiated many contracts for raw materials, parts or freight rates, but those cost savings may only be accounted for in products that are sold either in Q2 or even in Q3. If I continue in North America, our focus within Savaria One was on a dual objective to grow order intake, while getting our factories to grow throughput for best-selling products and in particular, home based.

Like Seb mentioned before, we're very proud of the achievements we've made there. And what this meant is that on the sell-side, our sales force developed detailed plans to support our top dealers in each market to grow their business, and that we work with our own direct stores to be more effective in managing and converting orders of potential customers, while in parallel, our factories were getting more organized and more efficient. Those combined efforts is what explains -- well, actually, I explained in a bit more detail -- in detail what happened in the factories in the previous calls, so I won't explain it again, but those combined efforts is what really enabled ourselves to grow by 15% versus same quarter last year.

Also, one of the highlights of this quarter is that we made our new warehouse in Toronto fully operational, which enable our factory here in Brampton to be more effective within the same footprint and absorbed the Matot production, which we aim to produce in-house by end of this year.

In Europe, our focus with Savaria One was mainly on improving profitability as that region has historically delivered lower EBITDA margin than our other divisions. To do so, we had commercial initiatives, but also reduced the cost of goods sold by completing different sourcing events in the fall of 2023 and in the first half of '24. We also made dozens of small operational improvements to reduce the time to assemble our products while increasing their quality. Thanks to all of this, and thanks to our rigor in managing costs, our EBITDA margin grew by 3% versus Q1 '24. While improving margins, we also experienced a sales growth in Europe versus Q1.

Finally, our Patient Care division continues to deliver healthy results, yet like we mentioned before, we invested in growing the business and expected those investments to take time to generate sales and margin growth, given the nature of the business and the long sales cycle. For example, we expanded and strengthened our sales team to cover regions that are attractive for us, but lacked coverage in the past. And those new additions are paying off, but we know growing a territory themselves takes time.

Finally, we're getting more efficient in our factories as well, as we have materially improved the productivity of our bed facility in Beamsville and are having good success with the introduction of new package offerings, allowing fast shipments of debt and mattresses to our U.S. customers. On the flip side, we had fewer projects and thus revenues in the ceiling lifts business in Q2.

In conclusion, we're very happy with our progress and are on track with our plan for Savaria One. If you recall, our objective is for 2025 to be at 20% EBITDA and grow the top line to CAD 1 billion. We achieved a 19% adjusted EBITDA in Q2. So we are already very close to this first objective and are making progress towards the second one. Again, thank you to all of our colleagues for their support in this effort.

Thank you for your attention. That closes my remarks for Savaria One, and I'll hand it back to Sebastien.

[Sébastien Bourassa, executive]

Thank you, JP, and thank you, Steve, for your remarks. So I guess, Raz, we are ready for some questions.

[Operator]

[Operator Instructions] The questions come from the line of Frederic Tremblay from Desjardins Capital Markets.

[Frederic Tremblay, analyst]

Congrats on the strong results. Maybe starting with Savaria One and sort of what's next in terms of getting the risk to the 20% margin. Is there any particular area where you feel that future initiatives will be key to get to that 20%? Obviously, I understand that there's a lot of initiatives going on. But I mean, would you say that commercial excellence, operations, or supply chain, is there one of those that's going to be more crucial in future quarters?

[Sébastien Bourassa, executive]

Maybe I will start and JP will complete. So I would say, Fred, for sure procurement always takes more time, okay. It is difficult for us to necessarily change the vendor because sometimes we need to recertify our product. We need to consume inventories, procurement always takes more time. But for sure, the biggest pillar is our sales initiative, okay, and it takes time. We want to do more cross-selling. We want to increase the share of wallet, the dealer want to bring them new products, that they can buy from us. So always this one takes more time. And the rest of it -- it was a 2-year program. Now it's always difficult to put a percentage, maybe we are half through it, okay? And we're still very comfortable with where we want to go next year. So -- but definitely, the commercial excellence is the one that need more time. JP, any color you want to add?

[Jean-Philippe Montigny, executive]

Just to add, Frederic, so we have success on all dimensions up to now, right? So it's not like our results can be explained only by one specific set of levers. So we had improvements everywhere. But like Seb mentioned, where we expect maybe more money to flow through the P&L in the next quarters is a bit more in procurement because of that timing effect and the fact that it takes time. And on the other hand, yes, we -- I think our factories are better equipped than ever, like they're in very good shape right now. So we're going to maybe a bit more attention on sales growth because that's where we see the next opportunity.

[Frederic Tremblay, analyst]

In terms of the demand part of the equation, very strong 15% organic growth in America -- in North America, which is higher than the 8% to 10% company-wide outlook that you typically provide. Just wondering, what's sort of driving that? Is there one product carry that's stronger than the other? And maybe get your thoughts as well on growth moving forward for Accessibility in North America, in particular?

[Sébastien Bourassa, executive]

Yes, for sure, Fred, okay, again, it's always a bit difficult to for Savaria, we have other direct store, we have Europe or North America, we have the Patient Care. So again, if we go back to our objective, we want to go to the full Savaria at 8% to 10%, pursue North America. Again, we have been a bit fueling the growth with eating a little bit of our backlog, not too much. But for sure, how many we [indiscernible], okay, it was part of the Savaria One. It was one place where we could be better. The demand is quite strong with the density of the population, the residential area, the house, townhouse, going to 3 to 4 floor, and a constant work with architect, contractor that you bring us some repeat business. So I would say that's one area that [indiscernible] has been quite successful in terms of growth in North America.

[Operator]

The questions come from the line of Michael Glen from Raymond James.

[Fred Gatali, analyst]

This is Fred Gatali on for Michael Glen. On the $15 million Savaria One in additional fees associated, could you remind us, are those performance-based fees? And at this point in time, do you factor that additional $15 million in your numbers?

[Stephen Reitknecht, executive]

Sorry, just to clarify the question. It was around the cost that we've incurred year-to-date. So the $5.3 million in the quarter or?

[Fred Gatali, analyst]

No. This would be the $15 million that you -- in possible additional fees next year, I believe.

[Stephen Reitknecht, executive]

So we -- so through our Investor Day, and I think we've echoed the message a few times that the total expected costs could reach $40 million to $45 million of the project, depending on exactly where -- where the project finishes as far as how much EBITDA is delivered. So there is a performance component. There's also a bit of a fixed fee component in there as well. So we're not disclosing the separate details of the contract, but the contract is based both with a fixed and performance-based fee. And a lot of that depends on how we're delivering on all of these Savaria One initiatives. So there's both components that are wrapped up in there.

[Fred Gatali, analyst]

And on Accessibility in Europe, I mean, how are some of the dealer, there was some weakness last quarter, I believe. So how some of the dealer and pricing initiatives turning out there? And how do you see that looking at the back half of the year?

[Jean-Philippe Montigny, executive]

If I understand correctly, again, about the dealer growth in Europe, for sure, like the second quarter was against a weak second quarter. Right now, again, if we go back to the Savaria One, it's a growth story. We are pushing a lot of initiatives, the cross-selling. We are bringing some new products to Europe by the end of the year for vertical platforms, which will help us to accelerate our growth in coming years. So I would say, we have to go step-by-step. And definitely right now, okay, we are focused a lot on the operation costs on the margins to bring it at a good level, but the growth sales remain a very important priority for us in Europe.

[Fred Gatali, analyst]

And if I can just squeeze in one more. Just on the Mexico facility. Have you seen -- could you speak related to the contribution you've seen so far from that? Any dealer reactions as well to that facility or approximately, I should say?

[Stephen Reitknecht, executive]

For sure, Mexico, key for us, it was not a short-term. It was a mid-long-term project, again, to do a bit of nearshoring, not to put all our eggs of manufacturing in one basket. So right now, I will not say the result of the second quarter is because of Mexico. Again, it's more for the long-term that we want to make sure we have some parts there, some SMB right now is, this -- we do some port ships and for final product SMBs that we do with their ship to the U.S. And in the future, we'd like to bring also more complete product. But right now, this factory has been focused mostly on subassembly shipping to Brampton, Vancouver, and a bit of Patient Care.

[Operator]

[Operator Instructions] The questions come from the line of Zachary Evershed from National Bank Financial.

[Zachary Evershed, analyst]

Congrats on the quarter. For the acquisitions that you're considering, what kind of threshold or hurdle rate do they have to hit to make you sit up and pay attention when your focus right now is on Savaria One and operational improvements?

[Sébastien Bourassa, executive]

So for sure, like acquisition, okay, again, we have talked often about tuck-in acquisition, a small dealer for us, okay, or medium size, whatever. There's no -- that the owner wants to say, there's no succession or that's something we're always interested. We are listening. Matot is a very good example that we did in the second quarter, a small company that we can bring our new products to our other dealers that want to remain a one-stop offering with a best line of products. So that was something we could integrate into a supply chain and try to increase the sales. So I would say new products, dealers always something that is on top of our list. In terms of size, we could go up to $226 million. But right now, again, we're really focused on small tuck-in Savaria One and let's see which opportunity come. Our friend, [ Nick ] is always working full time on M&A.

[Zachary Evershed, analyst]

And then on that topic, any more home runs like that in the pipeline?

[Stephen Reitknecht, executive]

Or acquisitions, did you mean?

[Zachary Evershed, analyst]

Yes.

[Sébastien Bourassa, executive]

Again, it's hard to give some color, Zach, on that, okay. We don't want to do forward-looking statements on this. So we will see what will bring in the future, okay.

[Zachary Evershed, analyst]

And then just one last one. I'll circle back to the project timing issue in Patient Care. Is there any prospect of a catch-up on that in Q3? Or is it more of just a subdued environment issue?

[Stephen Reitknecht, executive]

Yes, I would say, Zach, that we had exceptionally strong quarters in Q1 and Q2. We've talked about that in Q1, Q2 of last year. We've talked about that a few times now. It's not that the market is down. It's just -- right now, what we are seeing is just a few delays across some of the project-based work and the timing of those projects finishing and completing is -- can be a little bit difficult to predict, and we're sort of seeing a little bit of softness there in Q1 and Q2. But as Sebastien mentioned, we're expecting Q3 and Q4 to be a little bit better. We have -- we only have been able to counteract some of that project work with other sales, and our bed sales are doing very well, our bed sales across North America, both Canada and the U.S. So while maybe we are seeing a little bit of weakness on the project side temporarily, it's -- we've done a good job of counteracting that. So what we saw in Q1 and Q2, revenues were flat against really good quarters. Profitability was down. We have higher SG&A costs there that we have been investing in a few different areas to support future growth that we are expecting and that we are seeing for that segment. So we remain very optimistic for that segment of the business. Yes, I guess, probably that's sufficient color for now.

[Operator]

We have no further questions at this time. I will now hand back to you for closing remarks. Thank you.

[Sébastien Bourassa, executive]

Okay. Well, thank you, Raz, and thank you for the analysts that were present this morning, was a bit shorter than expected. But I guess the results were very clear, very well explained. So again, thank you very much for the results in the second quarter to all our employees. And I think Savaria is -- we're in the right direction with the Savaria One. I think that was the right decision that we made a year ago. We're up to it. And hopefully, you can see that the $1 billion, 20%, is a proximity at reach. Thank you. Thank you, Raz.

[Operator]

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you, and have a great day.