Savaria Corporation

Good morning. My name is Rory and I will be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's Q1 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, please press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. This call may contain forward-looking statements which are subject to the disclosure statement contained in Savaria's most recent press release issued on May 6, 2026, with respect to its Q1 2026 results. Thank you. Mr. Bourassa, you may begin your conference.

Thanks, Rory, and good morning, everyone. Today, we'll start with a small recap of our Q1 results, and Steve will update us on financial, and MGP will provide us an update on SAVAIR 1 and Europe followed by Q&A. So once again, I'm very proud and it seems that I repeat always that I'm proud, but in the last 10 years or 40 quarters, 39 out of the 40 will be the previous year. So I think for me it's very good proof that we should work very consistent in our results and with all the learning we have done in the SAVAIR 1, I think we have created a good path for the future. With a size of 225 million, Upverses last year, and right away in EBITDA in the first quarter, 20.4% of EBITDA, all KPI improving, so Steve will go more in detail later, so quite happy with that. A few things that I would like to highlight today. First, thank you again for all team members at Savaria to continue to be diligent in your approach towards Savaria One, to act as a one company, and continue to have a bottom-up approach to bring good idea and all can be better. This mentality of continuous improvement is part of our DNA now and really continue to help us to make us better. Second, growth. So we talked about that during the investor day a few weeks ago, but continue the effort to develop the market in North America for home and library tourists is a priority and we see some traction. The increase of effort into a stir lift in North America. Continue to expand the main path dumb weather material lift line up. The business development activity are going to continue to put us as a market leader. Expand the one-stop shop in Europe. Example, the Luma, the VPL, and the Incline Lift. I think we start to see some traction. To be the partner of Chorus and Sterlift. I think JP will talk later, but we have a good traction in Europe in the last six months, so quite happy to turn around what we have done there. Patient care, to own the room and continue to develop the long-term care. I think we have some good traction there also. and also a Greenville Building Extension to be more diversified in summer manufacturing in North America is progressing well and the expansion should be complete in the fourth quarter of this year. Third, acquisition. As we said during the investor day, we have the ambition to do some acquisition in the next five years for approximately 200 million on small mid-size. As we said earlier, we like some of our dealer distribution network, very natural, buy some small product lineup, small manufacturer to bring some better products and to improve our one-stop shop. So I think it's always a priority. I would say for net debt, the very issue of now is 0.92 and liquidity available of 225 million, 324, excuse me, for capital allocation and M&A. I think we're in a very good position. So to conclude, I'm quite happy with the start of 2026. And as we all know during the investor day, we have the ambition to grow the business at 12% per year, a mix of organic growth and acquisition. to maintain our margins over 20%. And if we do our job, that will ultimately lead us to some sales of $1.6 billion, and then it is up $320 million, and that will be the job per share of 4.25 by 2030. So thanks again to all the employees for the effort in this new chapter of growth. Steve, financial, please.

Thank you, Sebastien. Good morning to everyone on the call. I'm now going to provide some further detailed commentary regarding our first quarter results. The key highlights for the quarter include, firstly, revenue growth of 7% over last year, driven by growth in both segments and all regions. Adjusted EBITDA margin reached 20.4% in Q1, which is especially great since Q1 is typically our seasonally weakest quarter. And lastly, our leverage ratio is now under 1 at 0.92 times. Now looking at consolidated revenues for the quarter, we generated revenue of $235.5 million, an increase of $15.3 million versus last year. This is driven by organic growth of 5.7%, revenue contribution from the acquisitions of Baxter and Western direct stores of 0.7%, and a positive foreign exchange impact of 0.6%. Our accessibility segments saw growth of 7.9%, driven by strong growth in stair lifts in Europe, as well as increased sales in Canada. Pishuncare achieved revenue growth of 3.8%, driven by strong organic growth of 6.5%, partially offset by a negative foreign exchange impact of 2.7% on the US dollar currency. Our consolidated gross margin for the quarter was 38.9% compared to 37.8% in 2025, and our operating income increased by 11.7 million versus last year. This is especially important to note since this demonstrates that we are continuing to improve the performance of the business post-Severio 1. The gross margin improvement is mainly driven by operating leverage, improved pricing, and procurement benefits. And furthermore, operating income, excuse me, further benefited from the termination of strategic initiative expenses. Q1 adjusted EBITDA reached $48.1 million for the quarter. representing a margin of 20.4% compared to 18.5% in 2025. That's an improvement of 190 basis points. Accessibility adjusted even though margin was 22.4% versus 20.1, so up 2.3% year over year, 230 basis points. And we saw improvements in both of our key regions. Patient care adjusted EBITDA margin stood at 19.5 compared to 18.8 last year. Moving on to finance costs, they were 3.1 million for the quarter compared to 3.5 million last year. Interest on long-term debt decreased by 1.2 million due to an overall lower debt balance and decreased interest rates. We also had impact from an unrealized foreign currency loss of 0.4 million this year versus a gain of .4 million last year, causing an 800,000 year-over-year swing. Net earnings were 22.7 million for the quarter, compared to 12.5 million last year, representing an increase of 82%. And correspondingly, EPS reached 31 cents for the quarter versus 17 cents last year. I'm now going to provide some comments on our cash flow and balance sheet. Cash flow from operating activities in Q1 was 35.8 million, driven by the strong net earnings, partially offset by higher working capital and higher income taxes paid. Our working capital remains healthy, and while it has increased in terms of dollars, we have reduced our working capital days from last year. CapEx was 6 million for the quarter, which represents 2.5 million, excuse me, which represents 2.5% of sales, This is in line with our guidance, and this includes approximately $1 million for the building expansion in Greenville. We also disbursed $2.1 million for business acquisitions, largely attributable to Baxter Elevator, our new direct store just outside Dallas, Texas. And we have now $324 million of funds available under our current credit facility as of March 31st. and as previously stated, our leverage ratio has reduced under one to 0.92 times. On April 14th, 2026, at our investor day, we unveiled our plan for the next five years. Severia targets a top line increase of approximately 12% per year for the next five years derived from organic and acquisition growth. This will bring Severia to approximately $1.6 billion in revenue at the end of 2030, while maintaining adjusted EBITDA margins of at least 20%. And with that, this completes my prepared remarks, and I'll now turn the call over to JP to provide updates and details on Severia 1.0. JP?

Yeah, thank you, Steve. Good morning, everyone. On April 14, we provided a lot of information on what happened in the last two years with SAVARIA-1. So today I'll focus on what happened in Q1 and what to expect next given what's cooking. So let me start with what happened in Q1 regarding SAVARIA-1. If you recall, since we started the program, we had about 400 initiatives completed. Well, today we still have about 200 initiatives that are in flight. So we're still very active with SAVARIA-1, and there's more to come. In Q1 itself, we implemented about 40 new initiatives, all internally generated and internally driven. So those generated millions of dollars of new savings that will accrue to our results in the coming months. In addition, we continue momentum. We continue to have the rigorous cadence of implementation across all functions and all parts of the business. And we still have millions of dollars of initiatives being implemented and being worked on. In Q1 itself, when we measure our results internally and we sum up all the initiatives, we find approximately 7 million of EBITDA improvement, which is also what we see in our P&L EBITDA improvement, right? So we have a pretty good still accuracy of the measure we do internally and what we see in our results, which gives us great confidence that the program is still well and alive. In terms of Q1, I have five specific highlights I thought I would share this morning in terms of what are some and many successes that fueled our results. Let me start first in Europe. As you saw, we had good growth in Europe, and the biggest contributor to that was some wins we had with our dealer sales. We had some dealers returning to Savaria after not working with us for a few years. We had some new wins, but most importantly, we had some large dealers that shifted a large share of their wallet towards us. And the main reason they did that is the overall value proposition is very strong. What I mean by this is that quality of our products keeps improving. We have competitive prices because we have a competitive supply chain in the first place. We are a reliable supplier. We deliver on our promise. We have good freight partners, for example. And finally, we have what is known to be the best measurement tool in the industry for everything about stereotypes and platform myths. So I think our overall value proposition is very strong, and our dealers are recognizing this. and doing more and more business with us. The second highlight for me was the best business. So we make our long-term care beds in Beamsville and what happened is in the last two years we made a lot of efforts to improve our operations, to deploy in practices, to do chisels in the factory but also to make make versus buy decisions. So we used to make a lot of things in-house in Beamsville and now we started to leverage our global supply chain to manufacture some parts. So we can have more freed up capacity in Beansville. Well that was very timely and useful in Q1 because in Canada there were a lot of public tenders in the last couple of months and we won a number of them. So the fact that our factory was now more efficient and had more capacity allowed us to increase sales materially and our Beansville facility is now performing extremely well. Another highlight for us was the direct stores. in North America and Europe. Our direct stores are doing really well and they are pockets of excellence. For example, Australia is really growing fast as an office and we expanded recently to a new location. Also, the UK has always been a large direct store for us in Europe and now the UK, thanks to our efforts in the last years, is really performing well in terms both of profitability but also growth. We're innovating with our marketing strategies, our sales force is more effective than ever, and our field engineers are and more efficient than they've ever been in the past. So we're doing really well in our direct stores. And on top of that, we had some acquisitions like Western that happened last year that is adding to our results. Another one for us is Matoc. So about two years ago, we acquired Matoc. And that was really a great example of a well-executed but, you know, it took time integration. The first thing that happened is we have to integrate the operations and actually close the MATOT factory and really internalize it in Brampton. So that took a lot of time and effort from our engineering team and our operations team in Brampton, but now we're able to produce MATOT dumbwaiters at a good rate, and we actually reduce the lead times to make those units versus what MATOT used to have in the past. So we have a better value proposition to the market. And in parallel, last year we made a lot of efforts in our commercial team to advertise and to explain what the Maytop value prop is to our dealers, but also to specifiers and architects. And what we see now is the order intake for Maytop is very strong, and we're able to grow that business. So that's, for us, a great success, and we intend to keep building on it. Finally, the last one that we wanted to share this morning is Ultron. So as you probably know, we have our own in-house electronics, let's say, business unit that has the expertise to design power circuit boards, So what this does for us is we can both reduce our costs because we're able to redesign some of our power boards across a different product range, but also when there are emergencies or crisis, and you may read in the news that there's shortages of chips and stuff like this. Well, we have the expertise in-house to, first of all, make sure we buy in advance and stock in advance, but also when there are shortages, we can substitute parts. So we've been pretty much protected from all these different difficulties that many of our competitors had because we have our own electronics department. So these are some of the highlights from Q1. Now what's still being worked on for Q2 that's material for us? First, we just launched our website in North America and we're very proud of it. We think it's a great website because it's also designed to optimize our search engines but also for AI search. Now we're working on replicating that in Europe. So that's very important for us in Q2. Also, we continue to make efforts in Europe to cross-sell our different products. So we are largely a spirit business in Europe, and now we're making real efforts to develop our platform business outside of Italy, which is the core. In North America, one of our focuses is the construction in Greenville, which is very strategic for us, not just because of the space, but also the different capabilities we'll have in-house once that is built. Another one in patient care is the innovation. So you may have heard during the investor day, but we have a lot of new product innovations that are important to grow the business. So in the past, we developed a new ceiling lift lineup with the M-series. Now we just launched a new APMI surface bed, essentially, mattress, sorry. And now we're about to finalize the new bed lineup. So Beamsville is not only doing great today, but we will have new beds to sell, which are more modern, more interesting for the patients and for the caregivers. Finally, in Europe, we have a number of product launches at the moment. So we are launching a new straight stairlift in the coming weeks or days. and we also have field trials for a number of different products including platform NIFs and spare NIFs. So there's a lot happening still in Q2 and we're optimistic that this is going to help us continue to fuel growth. In conclusion, so as you probably saw, Europe had a very strong Q1 because of some of these reasons I just mentioned. We also had a good jump in profitability that is both due to the efficiency initiatives we drove in the past but also the fact that we have some operating leverage with the growth. and I think one of the reasons we're so successful is that our factories are able to follow. So we had very good order intake in Q1, but what's great is that our factories were able to increase the throughput because they are more efficient and more effective than before. So very good momentum in Europe in conclusion. All this to say, I think we have good tailwinds overall as a business. We have a lot of initiatives in the hopper. Some were recently implemented, some are still to be implemented. but we see a good momentum and we're looking forward to see the results in the coming months.

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

Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Cheryl Zhang of TD Cowan. Please go ahead.

Hey, good morning, Sebastien, Steve, and JP. Great to hear from you. Thanks for taking my questions.

Morning.

Morning. So, my first question is on the accessibility section. I'm curious that in the MD&A, you mentioned that increased bookings in Canada. What's driving that? Is there any notable changes in demand from consumers or from dealers?

Good question. So, again, I think it's always difficult when we look at this, okay, from one quarter to the other, you know, rather for the mid-long term. for sure in Canada we have a new baby which is Western as part of the results so you see a bit of the results in Canada but also now we have been doing quite good in terms of housing, home elevators I think that's going to go well.

Okay, thank you. And then on patient care UK this is still small but could you highlight what's driving the increased sales there?

Yeah, so basically, thanks for asking. So patient care in the UK and in Europe, I think we have been a very long time historically that we are silverly with manufacturing some sling, but that's something we have expanded on the one-stop shop to be able to offer some ceiling list, some orifice, and I think the team of Gary in Sylvain is doing quite well in expanding the territory. So I think we continue to see some good growth over there. And also we have been able to list are offering on the different organization like NHS contracts. So I think that that's possible.

Okay. And then you just follow up on the NHS contract. I wonder if you could share a little bit about like what's the length of the contract and what the scope is looking like?

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

Okay. Thanks very much. I'll recue.

Thank you. One moment for our next question. Our next question comes from the line of Frederic Tremblay of Desjardins Capital Markets. Please go ahead.

Thanks.

Good morning.

One of the areas that was highlighted in patient care for the quarter was home care. I was wondering if you could maybe remind us of the strategy to gain market share in that specific sector.

I think, again, home care, I think we talked a bit during the investor day, yes, and we're there in the long-term care, that's our preferred, that's our biggest segment, also in acute care, but home care is definitely an area where we want to be better. I think, as the best of my knowledge, I don't think there's any numbers in the NDA or financial, but no, it's part of our strategy to be better in home care, to have the right of, you know.

Okay, and then just moving forward, can you talk about some of the early trends that you're seeing in Q2 in accessibility? Have you seen some continuation of the positive Q1 trends into April in both Europe and North America?

Without making big forward-looking statements, but I think the good news, Fred, again, our backlog is good, so I think things are continuing to go well. The traction we had in New York I think is continuing, so that's very positive. In North America, again, Q1 is always a little bit lower in North America, but in Q2 the construction is good and the winter is over, so I'm expecting to see a good second quarter, a good year.

Okay, I'll get back to you. Congrats on the second quarter.

Thank you. One moment for our next question. Our next question comes from the line of Michael Glenn of Raymond James. Please go ahead.

Hey, good morning. Hey, to start for my standpoint, when I take a look at your incremental margins on EBITDA in accessibility, they are tracking very high, like your incremental EBITDA on Each dollar of sales is quite high. Is there any reason why, and you're highlighting all these initiatives with Severia 1 still coming into play, is there any reason why you believe or we should think that that rate of incremental change will change in coming quarters?

Maybe I was starting to speak with Conti. So I think, Michael, what is good is everything we have done in the last two years is usually sustainable. So I think that's a positive. And now that the team is always driven, we do R&D, we launch a new product. So, you know, I think the incremental business is going to be quite good. And I hope that the margins in the legacy business will continue to expand. Of course, at one point, it will expand a bit slower. And I think, of course, maybe the next question is why we have kept just 20 plus EBITDA guidance and then sort of erasing this up. But not to forget is when we do acquisition and we want to do acquisition, typically they are a bit lower in terms of EBITDA and it takes two, three years to bring back to the right level. So I think a mix of all that would make us successful in the future. But, yes, I'm hopeful that we can still continue to improve the legacy business. But, again, it will be at a slower pace maybe over the last two years. And after that, no, there's – maybe there's a bit of noise at different places with inflation, but all those good initiatives make us be successful to overset the little negative that sometimes is happening. Maybe Steve, anything you want to compliment? I think that was comprehensive.

Okay, perfect. And then just regarding the recent Section 232 revisions, I know that You were largely able to avoid any impact that came from these changes, but has this revision created any discussion regarding a further shift of production or assembly down to the U.S.?

As of right now, again, things can change every day, but as of right now, we have done a lot of work in the last few weeks to make sure we're good. So all our finished goods remain all compliant. We don't pay tariffs. Is there some small noise on some small spare parts? The answer is yes, but that we're able to overset the noise and we have action for those also. But no, we have decided to invest in Greenville a year ago because we were tired to discuss about that. And no, we are very committed right now. We do approximately 50% of our own elevator in the U.S. And we're adding some new capability with the expansion to increase our offering. So I think, no, we'll be able to flex with this U.S. manufacturing to make us less dependent on the border. I think that's the objective

Okay, and then can you remind us, Stephen, maybe you said it, sorry I missed it, but the full-year CapEx you're expecting, and on top of that, would you be expecting a working capital ramp in the back half as well as you ramp up Greenville?

On the working capital piece, no. I mean, as we ramp up Greenville, so we already have product there because there already is operations there on the accessibility side. but as we ramp up Greenville we're probably going to be taking working capital out of other areas so there shouldn't be a net overall impact to the business. On the capex front typically we've been two to two and a half percent of sales. This year it's going to be slightly higher because of Greenville. The expansion we had one million come through in Q1 and we were at 2.5 percent of sales so we're going to be slightly higher than two and a half this year but That's all going to be due just to the Greenville expenditures. So we're going to be lower than 3%, but likely above 2.5%.

And Michael, I think just to add on that, I think it's a very good move because we are very committed that it continues to be better. So every year we have projects to invest in machinery to have the best machines, to be more efficient, and after that to have the best factory that we can have capacity for the next few years. We'll continue to do research and development. We have over 60 people in research and development.

Yeah, I just, you know, given the dynamics surrounding the border, I'm just thinking if you're wondering if you should be doing more of this rather than pulling it forward just to mitigate risk, any future risk, but I know it's uncertain.

Okay, thank you very much.

Our next question comes from the line of Razi Hassan with Paradigm Capital. Please go ahead.

Good morning and thanks for taking my questions. Maybe for Steve, can you just remind us on the impact of seasonality on EBITDA margins?

Yeah, Q1 is always our weakest quarter. I mean, looking back years, it is our weakest quarter out of all four. We did come in at 20.4 this quarter, which is where we finished last year. So we're really pleased with that. And I think, you know, The fact that Q1 is typically weak, we're expecting, you know, higher margins through the remaining quarters.

Just one thing I would like to add also. Europe, since Europe has been better, you know, the last year has been a bit more difficult. There's a bit less of the solar business than there is in the home elevator because you don't need construction to make solar. So it's hard a bit to compare this to all the previous years. Yes, it has been good. We hope the next quarter will be better, but we just need to take it with a grain of salt, with a better performance in it up, and that really helps for the group.

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

Levers for operating leverage? I mean, so we started to see some operating leverage come through in Q1. We're expecting more operating leverage, especially as we came up with our guidance for 2030. Our SG&A is growing at a slower rate than sales. Our cost of material is decreasing, and our cost of the remaining costs is growing at a slower rate than sales. So, I mean, we're starting to see that with the revenue growth. We're expecting that to continue, Razzy.

Okay, that's very helpful. And then maybe just one for JP. Obviously, strong results in Europe. Could you maybe just qualify that in regards to, you know, is the region progressing ahead or in line with your expectations? I'd say in line. First of all, we have a budget, but also a very ambitious leader. So, no, it's in line. Like, we have great results. We're very proud of them. Like Sebastien said, at this moment, we see them as a sustainable result.

and I think new products also. We're one-stop shop. We repeat it often, but I don't think it's been affecting the results yet, but all the effort from the LUMO, the VPA, the incline lift, I think that will also help us in the future to continue to fuel this growth in Europe.

Yeah, and with the new straight stairlift, which is very good news. Okay, thanks very much.

I'll pass the mic.

Thank you. One moment for our next question. Our next question comes from the line of Justin Keywood of Stifle. Please go ahead.

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

Yeah, so I mean, US, we did have headwinds on FX, right? We saw that in both businesses. I mean, unfortunately, patient care, they had really strong organic growth, but that was a lot of it, or almost half of it was offset by FX. And clearly, we see that in the accessibility business. But overall, for accessibility, there is positive FX impact because of the strength of the euro and the pound, which is the Canadian dollar. So, you know, US is a is a huge opportunity for us. It's a massive market. Our backlog remains really strong. So we're looking positively for the next few quarters.

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

I mean, yeah, we don't give that level of detail, Justin. I mean, we disclose the total growth by market, then we disclose total by segment, but we're not We don't disclose that level of detail. I can give you some further commentary. The price increases this year in the North American market have been relatively modest in the 2% to 3% range, and they were slightly lower than that in patient care.

Should we expect rebounding organic growth quarters in the for the rest of the year, or is Europe and Canada going to be the main drivers?

U.S. is our main market, okay, so I think no need to be worried about that. And there's enough initiative, okay, as I have disclosed in my statement and during the rest of the day, so no, I don't think U.S. is a concern. It's still very good for us. Again, it's just some FX noise. Sometimes, no, what's good about Sahara is we have multiple currency. Sometimes you win on one, then you lose on the other, so at the end, that make us a bit of natural edging.

Okay, good. Great to hear. And my next question is just on Savaria Link, the software, and if we could just describe how the overall services or aftermarket services is progressing and if there's any other details around that. Thank you.

I would take this one. So I'll take Savaria Link first. Again, the GP mentioned it a bit earlier. the fact that we manufacture our own electronics okay and that's an equation within a few years ago but it's important because we're able to have similar electronics across all our products and now we are surrounding for many many years but we did recently a major update on it and right now that really helped us to monitor the products that you can see from the back office if Mrs. Smith is not working in the morning and you will be able to call her before she calls you and after to make it easier for for installer and technician. If you go on a job site and you can find the issue a bit faster to troubleshoot the units, but that's key because you save some time. You're more productive. So I think definitely that's something that will really help us in the future and we want to change a bit the way we technicians are able to troubleshoot the units. So I think it's very interesting. And for sure, for us, yes, we have... Thank you. And I assume the services revenue has a greater margin contribution? Okay, great. Thank you for taking my questions. Thank you, Justin. Thank you. One moment for our next question.

Our next question comes from the line of Nathan Pove, National Bank Capital Markets. Please go ahead.

Good morning, guys. Thanks for taking my question. Accessibility in Europe showed some impressive growth and stairless was mostly called out in the commentary. When do you expect to see contributions from Luma and Multilift sales and actually the straight stairlift as well?

Yeah, so I mean, we are selling those already, just so you understand, but it's small numbers now. So if your question is when is that going to be material, it will take probably several months still. Because for these products, it takes time to build. Now we have great interest, for example, for Luma. Our dealers started to install it in their showrooms, right? So we now have it in our showrooms and their showrooms. So I think by the end of the year, we'll start to see some more material orders for that, for example. and Multilift is also still relatively small. So we've got work to do to grow that business. So to me, if you think about the next two years that we'll be adding to our results, but the real bulk, like what will really move the needle is still the traditional products, just because the size of the install base, the size of the market we can tackle there is much bigger for us at the moment.

All right. Thank you for the caller. And Can you walk us through at a high level the impact of rising energy costs across your cost base and your strategy to manage this, especially given your international supply chain?

Yeah, for sure. Again, our margin has been up in the first quarter, so I think we have been able to absorb them somehow. And I think JP mentioned a bit earlier, we still have a lot of initiative in procurement efficiency. I think so somehow we are and some of them is the freight and the freight is usually when it is export the factory, the dealer, the customer pay for that. That may be not affecting so much of business. And the fact that we remain very vertical integrated. We make parts by ourselves and that's our factory, that's our machine, that's our employees. I think that's really helping us to control our cost. So far, we are the key. Good.

Good, Collar. Thank you. Do you have any view on the potential impact of Section 301 tariffs?

I think as I mentioned a bit earlier to your previous question, I think we have done our work in the last few weeks. Right now, all our finished goods, they are tariff exempt, so we do not pay tariffs. There is some small noise on spare parts. The answer is yes, but we have countermeasures to improve that, and I think so far our results are a bit dead with what's happening.

Okay, great to hear. And one last one for me. You spoke about wanting to own the room in patient care. Can you walk us through any gaps you see in your current portfolio and maybe take us through a decision on whether you want to build or acquire your way to that?

To some extent, I can speak to it. I won't go into too much detail because this can be strategic, right? But if you think about owning the room today, so we have in the long-term care, we have a lot of products already. So one place where we did some expansion through Savaria One is to work on the case goods, for example. If you think about the room, we had the bed, we had the surface. We can do ceiling lifts even in long-term care. We didn't have necessarily all the accessories around it, so like the case goods, for example. And we currently distribute some other products. So this is where our attention is to make sure we have a better offering for all these adjacent products. In the acute care business, we're still thinking about it. It's more complicated. We have ceiling lifts, which are very important, but the rest of the equipment are highly specialized. So this is something we're discussing internally, we're looking at, but we don't have necessarily something to disclose at this time.

We like to manufacture what we sell, and patient care is a bit more special because to own the room. At the end, a long-term strategy, we want to manufacture our own products.

Thank you very much. I'll turn it over.

Thank you. One moment for our next question. Our next question comes from the line of Jonathan Goldman of Scotiabank. Please go ahead.

Hey, good morning, team. Thanks for taking my questions. Just one for me. I noticed you didn't break out accessibility organic growth between Europe and North America this quarter. I just want to get some background on the rationale for that. And maybe you can help us get a little more color on the trends in those respective businesses. You know, over the past, I guess, two years, North America has been doing great. growing above your targeted range. Europe has been a bit slow, but part of that was a concerted effort, you know, to possibly focus on higher margin business. But maybe you can give us how those trends have developed, you know, in Q1 or any way you want to talk about it.

Thanks, Jonathan. I want to start and see what comes next. So, yes, again, we have two segments, which is patient care and access to sleep. Now, within the last two years, yeah, we have break down Europe and North America. and now that Europe is back to contribute similar amounts as North America, we decided to stop that. We don't break our sales for Asia, for Europe, for this, for that, and started to give it to complex. This is organic growth, this is the effect, this is acquisition growth. We have decided to simplify the information for the reader and this is permanent change and we're going to continue like that. And at the end, what's important, we want to achieve our 1.6 billion by 2030. So that's why we have decided to make this change. Steve?

Just to add some commentary, I mean, yes, you're right. North America has been relatively strong for the last couple of years, and while we had that weakness in Europe, Europe has since rebounded, so we have both regions that are doing quite well right now, and we had extra focus on Europe over the last couple of years, and that's why maybe there was some additional commentary there, but now that both divisions are performing quite well, we're That's also one of the reasons why we're not disclosing it separately.

Makes sense. Sounds good. Thanks for taking my question, guys.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. I'm showing no further questions at this time. I would now like to turn the call back to Mr. Bourassa for closing remarks.

Thank you to all the analysts. We have some very interesting questions as usual, and I think you understand well the story of Savaria. So, again, thanks for all the reports that you put on the company. So, again, very proud of you on the results. I think it's fantastic. With the investor day a few weeks ago, I think we have put a lot of information available that you can know why we think we'll win in the next few years. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.