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spk00: Rasa, you may begin your conference.
spk01: Thanks, Norma, and good morning, everyone. So today, I will start with a small recap of our first quarter results. Steve will update us with our financial section, and JP will update you on the progress of the summer one, and we're going to have a small Q&A session at the end. So fortunately, overall, revenue growth in Q1 was below expectation. First, we lost some sales with a diverse share of our bank conversion in Canada. has a small decline of 3.4%, but we will see later that they had a positive, okay, a bit of improvement, so good job on that. And we are going against a weak second quarter of 2023, so we're expecting to have some growth in the second quarter to bring us back to the normal point. Patient care had a flat first quarter, but we are again a strong first half of the year in 2023 with a weaker second half. So we're expecting some growth for this year. It's part of Savara One. And remember, in the last two years, we have increased our size by 30% in that segment. Positively, in North America, we saw growth of 11% in the first quarter. We have deployed our dealer partner program, Name Access Plus. In North America, the reception was very good, and we had the best quarter ever in terms of booking for Garaventa and Savara in North America. So quite positive. So, ups and downs in the first quarter, but in the long term, we are still very confident in our ability to go to business, the $1 billion by 2025, with the aging population, a unique value proposition for the one-stop shop, and the wide range of products that we have, with the expansion in R&D with new products and bringing some new existing products in Europe. I think we have all the tools in our hands to succeed. Overall, Cervera has remained a very attractive business for a dealer, with an all-different market, a one-stop shop, a wide range of products. We have a global footprint and a vertical integrated supply chain. We continue to expand our build-out in Mexico. Now we have 75 employees, which will be there to support the next generation of manufacturing, improve our costs, bring some resilience to our supply chain. That puts us in a good position. Our operation continues to improve in all our factories in terms of safety, quality, and throughput, so quite positive. And that brings us a bit to the next section, which is the EBITDA improvement by 2% in the first quarter, to 16.6% in historically our weakest quarter of the year, and that shows some very positive signs of operation excellence that we are developing for several programs. Improvement of 2% in Europe, going from 10 to 12, with lower size. So that shows some sign of improvement with the severe one. And this team is working very hard on this, and GP is going to explain it in his section later. North America accessibility, improvement of 2%, going from 17.5 to 19.8, due to higher output in Brinton, Surrey, and good performance in a direct store. So very happy with that. Patient care went down to 18.5. I think it's mainly due to the product mix and lower size, but not very far from our target of 20%. As discussed in our last investor day, our target by 2025 is to be a company of approximately 1 billion size at 20% of EBITDA, and it will be possible with our SAVAR-1 program. Our results in Q1 show that we are moving in the right direction. SAVAR is also very well positioned with its balance sheet. but we continue to do some small token acquisition to reinforce our product portfolio to continue to improve the margins. In the first quarter, yes, we divest our bank conversion in Canada, but we have replaced some portion of the sales with Meta, Dumbweller. That's going to start from April, and that's a very good example, small token to bring some new products to continue to be the first choice for a dealer and be able to integrate that in our supply chain to bring some synergies. Very important, we had a good quarter in term of cash generation, which Steve would talk about it into details, but I want to highlight that we have generated cash from operation while we're going to business, and this is where we want to be. Finally, I would like to thank all our employee, our dealers, our supplier, and our customer for the success in the first quarter. And as I travel all the work to visit different sites, I'm very always impressed just a good idea from employees. and I thank them for all their participation in this successful company. I thank our employees. I appreciate the effort that we're getting and some direction on where to go. Their participation is good, and we saw that in our last engagement survey in the company. So in closing, keep in mind that Q1 tends to be the slowest quarter of the year. While we have a revenue growth challenge, we are quite pleased with the profitability and improvement in our margins.
spk03: Thank you, Sebastian, and good morning to everyone on the call. I'm excited to share some remarks regarding our Q1 2024 results. So starting off, some key highlights for the quarter include strong EBITDA margin improvement driven from gross margin improvement, North American accessibility revenue growth of 11%, and strong cash generation from operations, including from working capital in our seasonally weakest quarter. Over the quarter, we generated revenue of $209.4 million, a decrease of $2.2 million, or 1% versus last year. The decrease mainly came from the divestitures of Van Action, Freedom Motors, and the Norway operations, partially offset by organic growth of 2.6%. We also experienced positive foreign exchange fluctuations. I'm pleased to report that the corporation delivered improved gross margins not only over Q1 of 2023, but also higher than any quarter in all of 2023. We delivered record gross profit and gross margin of 75.4 million and 36% compared to 72 million and 34% in Q1 2023. The increase in gross profit of 3.4 million is explained by better gross margins in both of our segments due to favorable product mix, improved pricing, and favorable cost of material as well. Severia I continues to be the major driving force toward our targets. We incurred $5.3 million for strategic initiative expenses in a quarter in line with previously stated expectations. Adjusted EBITDA and adjusted EBITDA margins finished at 34.7 million and 16.6% compared to 31.2 million and 14.7% last year. The increased profitability is mainly explained by the increased gross margins as a result from the effective realization of our ongoing SEVERIA 1 initiatives. And JP is going to speak to this shortly in more detail. Now looking at our segmented results, revenue from the accessibility segment was $160.4 million, a decrease of $2.4 million or 1.5% compared to last year. The decrease was mainly related to the divestitures. In addition to the execution of some of our pricing initiatives and pricing optimization, we saw strong demand in both residential and commercial sectors, partially reflected in the organic growth of 3.3%. Adjusted EBITDA and adjusted EBITDA margin for accessibility stood at 27.6 million and 17.2% compared to 24 million and 14.8% last year. The increased profitability was mainly due to improved gross margins coming from favorable product mix, improved pricing, and favorable cost of materials for both regions in line with our cost efficiency focus. The accessibility backlog remains strong and grew slightly versus where we ended the year. We considered our backlog level to be healthy as we have a good mix between short lead time products such as stair lifts, which will ship out quickly, and longer term home and commercial lifts, which we'll be shipping out within a few months or longer. To provide some further colour on our regions, revenue from our North America accessibility region increased 11% over last year. The adjusted EBITDA margin rose to 19.7%, an improvement of approximately 200 basis points versus a year ago. Revenue from our Europe accessibility region declined 3.4%. The backlog remained stable. Adjusted EBITDA margin improved here to 12.7%, also an increase of approximately 200 basis points over last year. Switching gears to discuss our patient care segment, we saw revenues for this segment reach $49 million for the quarter, an increase of $0.2 million, or 0.4% compared to last year. We experienced healthy traction inside the United States, which led to increased revenues, while we saw a decrease in Canada explained by certain large construction projects delivered in Q1 2023, not repeating this year, as well as reduced government spending. As a reminder to everyone on the call, our patient care business is driven in large part by project-based sales, which can be lumpy from time to time. And throughout the quarter, the patient care backlog remains stable. Adjusted EBITDA and adjusted EBITDA margin for patient care stood at $9.1 million and 18.5% compared to $9.8 million and 20.1% last year. The decrease in both metrics was mainly due to an unfavorable product mix on certain projects versus last year and higher selling expenses, partially offset by pricing initiatives and pricing optimization. We have communicated on previous calls that Q1 and Q2 of 2023 were exceptionally strong and likely not to repeat in the short term. Our EBITDA margin of 18.5% this quarter is higher than what we saw in the previous two quarters, being Q3 and Q4 of 2023, and is a very good start in our progress towards our target of 20% EBITDA margins. On a consolidated basis, net finance costs were $3.1 million compared to $7 million last year. Interest on long-term debt decreased by $1 million, primarily due to the reduced balance of debt. and we also experienced unrealized movements on financial instruments. Net earnings was $11 million or $0.16 per diluted share for the quarter compared to $6 million or $0.09 per diluted share last year. The increase in net earnings and net earnings per share was mainly due to the higher adjusted EBITDA and lower net finance costs partially offset by higher net income tax expense and strategic initiative expenses. The higher net income tax expense resulted from the bottom line increase, the increased profitability, but does represent a slight decrease in our effective tax rate from 24.8% for all of 2023 to 24.3% for the current quarter. Turning now to capital resources and liquidity in more detail, for the quarter cash flows related to operating activities before net changes in non-cash operating items reached $23.8 million compared to $18.1 million last year, explained by higher EBITDA generated by the business. The net changes in non-cash operating items increased liquidity by $2.7 million compared to a decrease last year of $2.1 million. The increase was mainly due to decreased accounts receivable and increased payables offset by slightly higher inventories. As a result, tasks generated from operating activities in Q1 stood at $26.5 million compared to $16 million last year, a very large increase of over $10.5 million. Our DPO and DIO measures improved versus last year end, while DSO remains stable. In line with our efforts to optimize our supply chain and working capital levels across the business, we continue to focus on improving working capital as we grow the company. Cash flows used in investing activities was $2.4 million for the quarter compared to $7.7 million last year. We dispersed $3.8 million for fixed and intangible assets compared to $4.5 million in Q1 2023. Since some investments were delayed to future quarters, we are expecting capital expenditures to stay in our historical range of 2% to 2.5% of revenues for the entire year. We also did receive $6.4 million from the divestments this quarter versus $12.4 million last year. Cash used in financing activities was $29.6 million for Q1 compared to $6.3 million last year. The variation is primarily explained by a reimbursement of the revolving credit facility of $13.5 million following the inflows coming from operations and the divestments. compared to a draw of $8.5 million last year. Looking at net debt, as of March 31st, our net debt position was $271.1 million, and the ratio of net debt to adjusted EBITDA stood at 2.03 in comparison to 2.07 at the end of 2023. Looking forward with regards to the guidance for the future, As previously stated, Saveria is not providing guidance for fiscal 2024 as we focus on the achievement of our targets of approximately $1 billion in revenue and approximately 20% adjusted EBITDA margin by 2025. The global team is focusing on delivering these 2025 objectives, and it remains difficult to pinpoint exactly where we're going to finish 2024 in the quarters therein. Various future prospects are promising, driven by strong market demand, the progress of Savaria 1, and potential token acquisition opportunities that will enhance our market position. And with that, this completes my prepared remarks, and I'm going to turn the call over to JP to provide further details on how we're progressing with Savaria 1.
spk06: Thank you, Steve. Q1 2024 was the first quarter where we saw the impacts of Savaria 1. As one can see in our financial results, our adjusted EBITDA increased by approximately $3.5 million versus same quarter last year on $2.2 million less revenues. This is quite a success, especially given Q1 tends to be our slowest quarter in the year. Outside of divestitures, those results can largely be explained by initiatives implemented during SEVARIA I. Given our investor day was just a month ago, and the examples shared that day are still recent, let me point to a few examples and link those to our financial results. Our accessibility sales in North America were up 11% versus last year, which is in great part due to our efforts to increase the throughput of our factories in Surrey and Brampton for our best-selling products, like the Eclipse, for which we closed 8.3 units per day in average last year in this quarter and 10.5 units per day in this quarter in 2024. which is an increase of about 25% year over year. Also in North America, in parallel to growing our top line, we made a number of changes to our commercial terms, which increased our contribution margins. Those included the launch of the new dealer partner program, also adjustments to pricing, and various commercial tactics that improved our mixed and average margins. Note that given the depth of our backlog, we only got partial benefits from the price-related adjustments in Q1 and expect those to really materialize in Q2. In Europe, our EBITDA margin increased from 10.8% to 12.7%, while revenues declined by 3.4%. So we generated a higher EBITDA in absolute dollars on a smaller top line. Improving profitability has been our priority within Savaria One in Europe, given the lower EBITDA margin of that region. We have plans to stimulate growth and cross-selling, but chose to prioritize actions that will improve our profitability, even at the expense of revenues in some cases. This improvement in profitability is the result of a mix of commercial and operational changes. I shared during our investor day an example of how changing our commercial terms in one business segment in the U.K. improved our margin. This is just an example, as we have been reviewing all the lower margin segments of the business and developing plans to improve their profitability. We also made efforts to reduce costs in our factories and within SG&A. For example, I shared how we reduced the labor costs in Kings Winford through moving to OneShift, and how we increased the recovery and reconditioning of units in Harbour Ward to our reconditioning initiative there. We also reduced reliance on temporary labor, agency workers, and reduced the administrative personnel in Europe over the last quarter. Those initiatives, as well as many others of that nature, enabled an almost 2% margin expansion on lower revenues in Europe. In patient care, our results show flat sales year over year in Q1 and lower margins. While we would prefer stronger results, we knew Q1 and Q2 of 2023 were exceptional in the patient care division, we did expect the impact of our Savaria 1 efforts to take longer to materialize in that business as well. In fact, at this stage, our plan consisted mostly of investments in strengthening sales and marketing activities, which we expect will accelerate our growth to the back end of 2024 and 2025. So we did not expect Savaria 1 to impact sales at this point, but knew it would increase our costs in Q1, which is something we see in our results. Finally, as shown during the investor day, We are very active in addressing our cost of goods sold through procurement and supply chain optimization initiatives. Whilst we have secured millions of dollars of savings already through RFPs and contract renegotiations, we saw almost no impact from those savings in our Q1 results given the time needed for us to work through our stock of parts. Yet we believe that the fact that we were actively sourcing and negotiating prices for many of our goods and services categories enabled us to keep prices constant and even get some concessions. So as a result, while our accessibility business, within our accessibility business, for example, we saw our material cost as a percentage of sales decline by 2%. At the end of Q1, after our calculations, we were on track with our plan, both in terms of quantity of initiatives implemented and their financial impact. While this is not the forum to expand too much on it, I would also like to mention that through Savaria 1, we are continuing to improve our systems, our processes, we're strengthening our organization and building a path to continue to grow past the billion-dollar in sales. In that regard, our organization is mobilized more than ever, and as Sebastian mentioned earlier, we do measure the engagement of our employees and just completed an engagement survey now that shows a material improvement versus when we started SavariaOne. I would like to thank my colleagues as well as all the managers and employees of Savaria for their leadership, their contribution to our success, and for driving the hundreds of initiatives that are making us progress towards our goal with SavariaOne. Finally, I just wanted to remind us that the gains we are accruing by implementing SavariaOne initiatives are recurring in nature, that we continue to implement improvements every month, as well as add new ideas to our initiatives pipeline every week. With that, we remain confident in our ability to reach our goal of $1 billion in sales as well as approximately 20% EBITDA in 2025. Thank you for your attention.
spk01: Let me turn it back to Sebastian. Thank you, JP, and thank you, Steve, for the call on Star 1 and on financials. I guess no more. We are ready for some questions.
spk00: Thank you. As a reminder, to ask a question, you'll need to press Star 1-1 on your telephone. To withdraw your question, please press Star 1-1 again. please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question, please. Our first question comes from the line of Kyle McPhee with Cormac Securities. Your line is now open.
spk05: Hi, everyone. On the accessibility segment, organic revenue growth in North America was very strong, but Europe was down. Can you provide some more detail on the source of the decline in Europe and whether or not this dynamic will Repeat a few more quarters before it's left.
spk01: Good morning, Kyle. So from one quarter to the other, we are judged on every decimal on the financials, so it's always a bit difficult. But if we start with North America, yes, we have said in the last year or two the booking has been very strong. And maybe in the past, we had some issues in our factories with some of the output. But it has been a core focus on the server one to improve the flow in our factory, improve the efficiency. So I think we're starting to see some color out of it. So we're quite happy with that. And in Europe, again, it's just one quarter. Right now, we are making a lot of effort on our server one, on our product mix, pricing initiative, dealer initiative. The good news, we're going against a weak second quarter in Europe. So I'm expecting things to be back to normal after six months in terms of growth. And the teams, they know that we need to go to 1 billion of sales, which implies 8% to 10% organic growth. So going forward, we're going to see some growth as well in Europe, Kyle. And as we bring some new products as well of Savaria, because right now we are mostly a sturdy and inclined platform company in Europe, as we'll bring some more vertical platform on the elevator in the future, that should help us also to have some organic growth. So I'm confident for the future.
spk05: When you say you're changing the mix in Europe accessibility, are you implying that maybe you're giving up some sales, that's lower margin stuff, and that's part of the reason we're seeing margins shoot way up? Are you passing on certain sales and that's manifesting as that revenue decline in Q1?
spk01: For sure. Again, since it's not just about growth, growing a top line, it's also taking care of the bottom line. Yes, we're reviewing which channel, which profitability, And that can imply some decision or some choice that we have to make.
spk05: Got it. Okay. And then, again, on accessibility, the big 11% organic growth for North America, was there any new price gains feeding that organic growth? Or is it still just the price that I think started to kick in Q2 last year that hasn't been left yet?
spk01: For Cal, no. Our formula is always a bit complex, right? We have different brands with price increase at different times. So, yes, in North America, we did a price increase in the first quarter, but it goes a bit against your good size backlog. So we're expecting to see some improvement on the margins more in Q2 towards the price increase of last year. But price increase, no, don't forget, it goes maybe against some additional costs that we have in the business. At one point, we cannot just increase the price of our customer. No, we have to work also on our productivity and efficiency to improve the margin.
spk05: Okay. Is it fair to say, though, that that 11% North American accessibility organic growth still included a good chunk from volume, or was it heavily weighted to price?
spk01: It was mostly volume in the first quarter, yes.
spk05: Got it. Okay. Thank you. That's it for me.
spk00: Thank you. One moment for our next question, please. Our next question comes from the line of Gabriel Moreau with Scotiabank. Your line is now open.
spk04: Hi. So like you said, Q1 is usually your weakest quarter and EBITDA margin increase close to 2%. So how should we think about the cadence of margin expansion to the rest of the year? I assume second quarter comps is easier given the ERP, but what about the second half?
spk01: It's a tough question, Gabriel, because again, we No, we don't give guidance per quarter in terms of EBITDA margins. If we go in 2025, we want to be a 20% EBITDA company. We have been crystal clear and our investor did as the mandate. I think as we go with the several one, we know there's a bit of acoustics. We're going to get better as we go with the procurement. It takes a bit more time, the cross-selling, so I think it's a new stage for us, 16.6, and I will expect that this year to the next quarter, hopefully we'll have the chance to beat that. But again, we've got to be careful. We're working on the mid-long-term target, not just on the short-term. Maybe Steve, you want to add color on the margins expansion?
spk03: I think you answered it very well, Sebastian. And just to echo that point, I mean, we're focused on improving margins sequentially quarter after quarter to reach that. to reach that 20% target in 2025. So we are expecting incremental growth over the coming quarters.
spk04: Thank you. And on the pricing, you said you did a price increase early this year. How does that compare to last year? And with the Salaria 1, should we think about the pricing opportunity as more progressive through the year and maybe more dynamic?
spk01: Again, we've got to be careful on pricing because, again, we have different brands, different products. So, yes, we did some pricing initiative this year, approximately a 4% to 5% increase in different brands. But when you go after pricing, sometimes you have some products that you sell at low margins or you have to focus on the product that has maybe a better margins. So it's a mix of all this and pricing initiatives that we're working on, finding some new customers, some new segments where there will be better opportunity. And again, the different brands, and then it's complex. We have our direct store, which has a longer background in factories, so it's hard to pinpoint sometimes just in one quarter. And we cannot be just about pricing. It has to be a mix of everything.
spk04: Thank you. That's very helpful. Thank you.
spk00: Thank you. One moment for our next question. Our next question comes from the line of Michael Glenn with Raymond James. The line is now open.
spk08: Hey, good morning. I'm just hoping the strategic initiative expenses of $5.3 million in the court, are you able to maybe just unpack that expense a little more? Is it cash, non-cash? Does it include some restructuring? Just some additional details as to what's included in that specific line item.
spk03: Yeah, sure. Good morning, Michael. I'll take this one. So the 5.3 in the quarter, this is in line with what we had previously stated at the investor day on April 9th. So the 5.3 is mainly made up of consulting and other training costs. There's really no restructuring costs. This is consulting and training fees that we've incurred, and they're all They're all cash, cash costs, Michael.
spk08: Okay. And so those, as like, if we think about the Saverio one program coming to an end at, at some point in the future, like those, those, those expenses just completely go away from the company.
spk03: Yeah, exactly. So we are expecting what we saw in Q1 to continue for the remaining quarters of 2024. So expenses of roughly $5.3 million for the remaining quarters. These are one-time costs. These are not ongoing costs that are, you know, reflected in the underlying business. So just to reiterate, one-time costs, but the benefits from the Severia I program We're starting to see that JP's been talking to, that we've been talking to, the improved margins, gross margin and EBITDA margins, sales as well. Those are all recurring in nature. So the fees for this project are all one time, and the benefits are recurring. We're going to see those year after year building on each other.
spk08: And as you progress through the undertaking, do you see – Is there a potential that we could see a larger restructuring charge roll through at some point in time as you analyze all of the businesses and all the plants and what's happening there?
spk01: So far, Michael, the third one is about growth. It's about finding some initiative within the business. It's not a restructuring plant or this kind of project. CapEx, Steve mentioned before, we are running at the same historical rate. So as of right now, we're not expecting a new significant change from the guidance we have provided before.
spk08: Okay. And then just on inventory specifically, Stephen, when you look at where inventory was at the end of
spk03: one queue like how should we think about the inventory opportunity within working capital for the business there is so there is an opportunity there michael we we finished q4 with very a large reduction in inventories right if we look at q2 q3 and then q4 q4 inventory really ratcheted down q1 it came up a little bit from where we finished q4 but still lower than where we finished Q2 and Q3 of last year. So we are very focused on inventory as part of our working capital, and we are expecting to decrease that over the coming quarters. I mean, not only are we expecting a decrease, we're obviously expecting an increase in sales as well. So it's going to be very favorable when we're thinking about DIO metrics. For Q1, DIO was flat versus last year on higher inventories. and we're expecting DIO to decrease as well as inventory over the remaining quarter. So there's definitely opportunity there, Michael.
spk08: Okay. Thank you for taking the questions.
spk00: Thank you. And our next question comes from the line of Michael Glenn with Raymond James. Your line is now open.
spk03: Norma, he just asked a question.
spk00: I'm sorry. Zachary Evershed. With National Bank Financial, your line is now open.
spk07: Thank you very much. Congratulations on the quarter.
spk01: Thanks, Zach. Thanks, sir.
spk07: So I was hoping you could give us a little bit more color on the recent acquisition of Matat. What are the cross-sell opportunities there as you add dumb waiters to your product portfolio?
spk01: Okay, very good question, Michael, and thanks for reading the news on Savario. But yeah, Matat is a very nice company. Small acquisition, a very long history, I think close to 100 years of making dumb weather and material lift. Very well, good reputation. Fortunately, they had a small dealer network. Now we come into Savaria, we have a bigger dealer network, so there's an opportunity to bring that to some of our existing dealers. Some of our existing dealers, for example, maybe we're buying some dumb weather from the competition. So over time, we're going to try to convert that to buy from Savaria. And after that, I know we have a great supply chain. We're global, so I think we'll be able to bring it into a supply chain. That's our target by the end of the year. We'd like to manufacture that in Toronto. So I think we'll be able to, again, a one-stop shop. We order it to one location, one sales rep to service, one technical department, one shipping, maximize the shipping fees, okay, by shipping some other product at the same time. So we have a great expectation for the future, and hopefully the real products will continue to improve our margins. Maybe Steve or JP want to complete something on their method. I don't agree with that. Good. Good call, thanks.
spk07: Yeah, just one more, actually. On the topic of easing material costs that you mentioned in the commentary, could you give us some more detail on the trends you're seeing there and in which raw materials?
spk01: For Procrement, do you want to go? Because that's a bit with the Savaria 1 Procrement that we're working on.
spk06: Yeah, I don't think we go. I can go into details of which categories, Zach, to be honest. What we see is two things, right? So, to Savaria 1, we are going through each category of spend, essentially, right? So, we group our spend in different categories, and we organize to go to market and source at the best price possible those categories. So, we're going through them one by one at the moment. But what we also saw, and we see this every day, right? So sometimes in this period, suppliers would normally come in and ask for a price increase. But then as they see that they're put in competition through an RFP, they tend to back off from the price increase, right? And then do the opposite and help us reduce some prices. So we've seen this across many categories. But I cannot tell you specifically by material what the trends are, unfortunately.
spk07: So fair to say that this is an internally generated reduction in cost rather than anything market-related.
spk06: Yeah, yeah, to that point. So we're not particularly exposed to market prices, right? Because many of the, even the parts we buy, even the raw materials are transformed. So typically, I think the share of raw material exposure is relatively limited.
spk07: That's it for me. Thank you. I'll turn it over. Thanks, Zach.
spk00: Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone. One moment for our next question. Our next question will come from the line of Justin Keywood with Stifel. Your line is now open.
spk02: Hi, good morning. Maybe just to follow up on the M&A commentary, there was mention of pursuing possible tuck-in acquisitions in the press release to replace some of the revenue from the divestitures. I'm just wondering, would these tuck-in acquisitions be margin accretive? I assume there wouldn't be a pursuit for fixer-uppers, just given the goal of the 20% EBITDA margins in the near term.
spk01: For sure, Justin. Again, we like to have tuck-in that would make sense for a good product to bring, to offer more to a dealer, something that we can maybe use our global supply chain dealer, network, where there's going to be no succession or we have not been good in one area. So all this makes sense for several. And, yes, when it is vertical integrated, that's usually at best to improve our margins. Are we going to buy something one of those days that there's zero margins but we see a benefit to bring into a supply chain or a product? Everything is possible, but we try to focus on something that could bring some value immediately to a shareholder and a competitor.
spk02: Understood. Any indication of the amount of targets that you're looking at, potential multiples and size of transactions?
spk01: Right now, we're very focused on the server one. I think we have enough on our plate for the next two years with the server one, the $1 billion. Again, some small tokens. In the past, we did sometimes two or three small tokens. So could we digest that without the disruption to the business? The answer is yes. But a more mid-sized, big acquisition, I think it's not the focus for the next two years. In terms of pricing, I guess you do more than me. What kind of multiple do you usually pay? You can look a bit at the history of our transaction, right?
spk02: Understood. Thank you.
spk00: Thank you. I'm currently showing no further questions at this time. I'd like to turn the call back to Sebastian Barraza for closing remarks.
spk01: Okay. Thank you, Norma. So it was a short period of questions, so I guess it was with his own good delivering on the message, GP and ST. So again, thank you very much for your for your comments, for following Savaria. I think it was a great first quarter, and you will see the next few quarters we'll have some good things that we're going to deliver as well. Thank you, Norma.
spk00: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
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