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Good morning. My name is James, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Savaria Corporation's Q1 2020 Conference Call. [Operator Instruction]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 12, 2020, with respect to its Q1 2020 results. Thank you. Mr. Bourassa, you may begin your conference.
Thank you, James. And hi, everybody. It's a pleasure for me to be with you in -- it's different because we're in a very different period with the COVID. So we are very satisfied about our Q1. I think, we see the COVID more in the last 2 weeks of March, but our sales were almost flat, just a little bit increase, but I am very happy about the EBITDA. So our people are more and more efficient and what we worked since 2 years like with Garaventa or Span. We see some results.So I am quite happy about what we see. And what I like, I could see, it's the people want to stay on more and more. So that would be very good to Savaria. It's why we have our new logo that says, Stay Home with Savaria. So I will pass the line to our CFO, Mr. Mauro Ferrara. Mauro?
Thank you, Marcel, and good morning, everyone. The corporation generated revenue of $88.4 million, up $0.9 million or 1.1% compared to the same period in 2019, driven by business acquisition-related revenue. Organically, revenue contracted mainly due to the anticipated loss of revenue from the corporation's Patient Handling segment as a result of Span's exit from the low-margin custom products market segment, effective Q3 2019.Gross profit and gross margin stood at $30.1 million and 34.1%, respectively, compared to $27.1 million and 30.9% in for the same period in 2019. The increase in both gross profit and gross margin was attributable to a combination of a better product mix, stemming from both the corporation's Accessibility and Patient Handling segments and from the continued realization of Garaventa Lift integration-related cost synergies.Adjusted EBITDA and adjusted EBITDA margin stood at $12.4 million and 14%, respectively, compared to $10.5 million and 12% for the same period in 2019. The increases in adjusted EBITDA and adjusted EBITDA margin were mainly attributable to the same factors, as for the improvement in gross profit and gross margin.Now moving on to our operating segments. Revenue from the Accessibility segment stood at $62.6 million, up $1.7 million or 2.8% compared to the same period in 2019 due mainly to the acquisition of Florida Lifts made in Q1 of 2019. Organically, revenue remained flat, mainly as a result of lower-than-anticipated revenue generation in the latter weeks of Q1 2020, a repercussion of the global COVID-19 pandemic.Adjusted EBITDA and adjusted EBITDA margin, both before head office costs stood at $10.4 million and 16.5%, respectively, compared to $8.2 million and 13.4% for the same period in 2019. The improvement in both metrics were due in large part to continued anticipated Garaventa Lift related synergies.Revenue from the Patient Handling segment stood at $21 million, stable when compared to the same period in 2019. Silvalea acquisition-related growth offset the anticipated revenue contraction attributable to the corporation's decision to exit from Span's low-margin custom product market segment, effective Q3 2019.Adjusted for the exit of custom products, organic growth in revenue would have been 3.9% for the segment. Adjusted EBITDA and adjusted EBITDA margin both before head office costs stood at $2.5 million and 11.9%, respectively, compared to $2.2 million and 10.7% for the same period in 2019. The improvements in both metrics were due to a better revenue product mix from Span, increased Patient Lift unit sales and contribution from our Silvalea acquisition, made in the second half of 2019.Revenue generated from the Adapted Vehicle segment was $4.8 million, a decrease of $0.8 million or 14.2% when compared to the same period in 2019. Adjusted EBITDA and adjusted EBITDA margin, both before head office costs, were negligible compared to $0.3 million and 5.2% in Q1 of 2019. The decrease in revenue and adjusted EBITDA, when comparing Q1 2020 to Q1 2019, was due in part to the shutdown of the corporation's Quebec-based manufacturing plant in the latter part of the quarter, again a repercussion of the global COVID-19 pandemic.By extension, the lower revenue generated by the segment impacted its cost -- fixed cost absorption rate, resulting in a negative adjusted EBITDA margin before head office costs.Although, it will be difficult to predict the economic fallout from the worldwide COVID-19 pandemic, the corporation remains steadfast in what it can control. Notably, protecting its employees and serving its customers during this difficult time. The pandemic has negatively impacted residential sales and installations, within our Accessibility segment, and the Adapted Vehicle segment as a whole. However, service and maintenance revenue, within the Accessibility segment and medical equipment sales, within the Patient Handling segment have expanded.From a production perspective, the corporation has not experienced any major disruptions, and its main suppliers are considered essential in most geographies where they operate.Providing a full-year outlook in the midst of the current COVID-19 pandemic remains challenging. However, given the corporation's financial liquidity and strong balance sheet, we believe our post-pandemic future bodes well as our product offering is aligned with demographics.This concludes my prepared remarks for the quarter. Marcel, back to you.
Okay. Thanks very much, Mauro. So you see that we are in a very interesting industry when we talk about staying home. So I am fortunate to have very good people around me, very knowledgeable people. So you can go directly for Sébastien, if you want to speak about COVID, about our operation, about our 10 factories worldwide or after that, if you want something on the finance, speak directly to Mauro.And if we want -- you want to speak about Span or general things, you can speak to -- directly to Nicolas. And if you want to speak about the vision of the company, you can speak with me. And it will be a pleasure to answer what you ask.So let's go for a call. And thank you very much, everybody, thank you for your time to listen to our conference, I appreciate. And you know something, you are very important, in the future of Savaria because the people read you. So I am very happy and very proud that we have a good number of analysts, who are on the call this morning.And again, thanks to be interested in Savaria. So let's go for a call. James?
[Operator Instructions]And our first question comes from the line of Frederic Tremblay from Desjardins.
Maybe question for Sébastien. Just in terms of the throughput of the various facilities, can you help us understand sort of the level of activity that we're seeing now in recent weeks at your main plant?
Thanks, Fred. So basically, we say, we have been very lucky, since the beginning of the pandemic. Our main factory, as always, remained open. In Italy, we have shut down for approximately 1 month due to the severity of the virus over there. Now we are back in production in May.And we see -- for the factory, this is looking positive. Also for the direct market in Italy, people are not ready to see some customer at home, to take some new orders. So that's still a little bit slow. Montreal, our car factory is back in operation since the month of May. And for sure, like in a different location, we have 10 different factories. Maybe in some of the locations, we are missing 5% to 10% of our employees, which are outside, in isolation, or they decided not to come to work.But at least our throughput is still good, and we make sure that if we have an order we can process it, because later, we want to make sure we still have a good capacity to produce more after the pandemic when everybody is back to work at 100%. So, so far, we have been very lucky and very cautious not to lose some throughput in our factory.
Your Q1 included a couple of weeks of COVID. Obviously, April was a full month. Marcel, can you give us your general observations on how Savaria has performed so far in April?
Yes. So in something -- again, we are -- so as Sébastien, I can say we're lucky, for sure. We are lucky, but we sit at a good industry. Industry of the future, 18 years, that we are public. And we are growing, growing. We make a couple of acquisitions. We've an excellent balance sheet, that allows us to protect our dividends, and even to look at some acquisition, if we have the right acquisition to do.So what I see, April is like a copy of last year. Well, very, very strong month. And I am very happy, but it's -- even if we are very optimistic, or I am very optimistic. So we have to be cautious because that's something we never see, and it's worldwide. And right now, we have operation worldwide. So -- but so far, our main people are very proactive. In Span, Jim is there, we have Vince at Garaventa. And we have some good people in Montreal and Toronto. So -- and thanks to them. But Frederic, I see that we -- I am very happy what I see right now. And I am very happy that the people want to stay on with Savaria. Thank you, Frederic.
And your next question comes from the line of Zachary Evershed with National Bank Financial.
Have you seen a pickup in demand for residential elevators that corresponds to home measure -- state home measures being relaxed gradually?
Zach, do you want to speak to me?
Yes, please.
Okay. Okay, okay. It’s a pleasure to answer that, okay? So you see that we have 2 new contracts that we have announced, Monday. And I am very happy about that because the main builder, right now, the tenancy as to put innovator right at the beginning. If I see our production of elevators in Toronto, we are just going at the same rate of last year, even with the virus. So I see that we have some project of our Group. We will see good things in 2020. And for sure, better things even in 2021.So yes. Maybe, we will see the number of permits can go down a little bit. But we have a new product, that was installed to my home last week. What we call our Mini Vuelift. Don't -- right now, this one, go right in the center of the stair and its exceptional product. And they finished the installation. So I have a home of 20 years, and we have 3 level. And with this new Vuelift, that we designed at Savaria, and that was the first installation in a residence, and it's incredible.First of all, the esthetic is fantastic, but what is the most important, just with a little work, about -- the pit is just 5 inches. And after that you attach that to each ramp at a different level. So this project is easy to install, and you get an accessibility for the 3 levels, right away.So with this new products -- and what is good, when you talk about problem to -- you want to stay home. It's not just in Toronto or in Canada, but in the States, in Europe, everywhere, we have this kind of product -- the problem. So what is good, Savaria, I think, and I know, that we have the best line of product of the industry.
In terms of your split for residential elevators, historically, and not looking at the new Vuelift product. How much has been new home builds and how much has been renovation and remodeling?
Well, I will say, when you go towards residential elevator. I go, 90% is new build. Why? Because you need a pit and from -- and it takes like 5-feet-by-5-feet. And we're in the house that's already built, even me, here, where is my 5 feet, maybe at one floor it's there, but we will go in the -- I don't know, in the bedroom or another one will go in the bathroom. That's not easy to put a shaft from the ground to the third level, but with this Vuelift, that's a core product in the future for Savaria.But I see that our residential elevators will continue to grow and will continue to grow even with this terrible pandemic that we have with COVID-19.
Perfect. Understood. And you'd mentioned previously, that you were looking at potential acquisitions in late summer. Do you still think that timeline holds up?
Maybe. That was good to speak about that at the beginning of the year, but right now, what we are very cautious, it's our cash flow. And we want to see with the company that we are looking to be interested, what they do during this period. You know that's a challenge. And the winner, we will see that, what they will do in Q2 and Q3. So we put a little bit that on the hold.
That makes a lot of sense. Then just one last one for me. Any long-term plans to turn around the Adapted Vehicle segment?
That's a good one. So it's not an easy product right now. And you know that for us, we don't go out. So people in wheelchair, don't go out too. And I would tell you, it's a challenge, but this sector is so down. So often you hit the floor and will not go worse than it was. So -- but if we think about selling this division, we don't sell something when it is kind of sales or EBITDA that they make right now. For sure, we are always in contact with some people in the state, that we can look to sell some of our products, but that would be a challenge for this year. And we will see what happens. But there is not -- for sure, this division is a challenge for us, but it's no way that is the right timing to make something about that.
Got you. And actually, just one more for Mauro. What was the increase in Garaventa's margin?
Well, we didn't give it out, but it is higher than last year. Last year was 7.3%. This year was -- let's say, it was between 8% and 9%. Let's -- just leave it at that. We're trying to -- right now, it's been over 1.5 years. So we've gotten the -- a lot of the synergies in. So I think for now, comparing the whole company, as a whole makes sense because we've had it for over a year, and you still see the increase in the overall margin. So yes, a piece of it does come from Garaventa, a piece also comes from legacy Savaria. It's a combination of both, but we still see some synergies coming in there.
[Operator Instruction] Our next question comes from the line of Nick Agostino with Laurentian Bank.
I guess, first question would be on [indiscernible] size. It is understood that [indiscernible] order. And just listening to the Handicare cargo, specifically, Handicare. It sounds like, they're struggling in North America. So I'm just wondering maybe, Marcel, can you maybe comment to what you guys are seeing specifically in North America in the market and do you think that you're gaining share in that specific market?
You know that's -- and you know very well. I'm scared, so when we see the last result, but especially, this is a very good competitor. They have very nice products. They want to be more aggressive on their penetration of -- in North America. And even, I don't know why, but they changed the CEO very recently. But they are doing quite well related to the stair lift and personal lift. They have a very nice product, they are very strong. But they have 2 products or a little bit 3 products with the ceiling lift. But us, we've have a complete line. So often the distributors or the dealers want to make a business with one supplier. And we had -- their company, if you have to make business with just one supplier. So we're still looking at many different opportunities that we have. And as you mentioned -- as I mentioned, and you see that on the statement, that, that's not a challenge for us because I am very happy that they are going well for the industry. Maybe I will ask Mr. Rimbert, that -- knows a lot about Handicare to complete my answer. Nicolas?
Yes. Thank you, Marcel. I can speak briefly about our own performance within the ceiling lift segment. It's difficult to really compare vis-à-vis Handicare, in terms of ceiling market share or not and what their performance is. But from our perspective, we had our strongest quarter-to-date in Q1 in terms of ceiling lift sales. We reached nearly $2 million in sales in the quarter. And we've been promoting the portable lifts and the gantry systems to be used in some of these temporary COVID facilities. And so we're seeing how that plays out over the next couple of weeks and months. We're also pushing, as part of our Staying Home At Savaria campaign, that Marcelo mentioned earlier, that's also an area of focus for us, as it relates to the lifts, to trying to put more lifts into the home care market. And finally, we're also seeing quite a bit of momentum in lift sales through our recent acquisition in the U.K. through Silvalea. So that's also pairing quite nicely, with their sling distribution. We're seeing some uptick there, as it relates to lift sales into both the U.K. and their distribution channels in Europe.So I would say it's quite positive from us. I can't really speak too much in terms of what the competition is doing. But from Savaria's perspective, we're encouraged, and we hope it will continue throughout the rest of the year.
Okay. And then, Nic, while you're on the line, I think last quarter, the discussion around Patient Handling margins, and I believe, the comment was you guys felt you could get that division's margins up to the 14% to 15% range in 2020, at least, this quarter, you're started getting somewhere around 12%. Are you -- I assume, that I heard correctly, are you guys still comfortable with that 14% plus range for 2020?
Yes. I mean if you think about all of last year, and when you look at it on the year basis because there's some seasonality that happens from quarter-to-quarter. But for the full year, last year, we achieved a 14% EBITDA margin within the Patient Handling segment. And our expectations are to improve upon that this year. We had mentioned getting up to 15% was the goal. So if you look at the first quarter, we're up just over 1%, I believe, versus the margin of last year. So we're at 12%. I think last year, we're about 10.5% to 11%. So we're seeing incremental improvement in the first quarter. And I think that you'll see throughout the rest of the year, we should also see some improvements there in the margin at -- again, both at Span, Magog, Silvalea. So our divisions as a whole.So yes, I think, we are still confident that we can make an improvement over the 14% of last year.
Great. And then my last question for Mauro. You've got, at least some staff on temporary layoff. Are you able to take advantage of any governmental program?
Nick, yes. We are looking into that. Like we said, there was a couple of plants that were shut down during the quarter, one in Europe and one in Quebec for the Adapted Vehicles. So we are looking into that. We've also kept a lot of people online. So we're looking into that. The programs are not as simple as they seem to be. There's a lot of different criteria that you can apply to it. So we do see us being able to use some of it, but we're not talking -- game-changing here. We're talking about reasonable amounts. And we'll have -- we'll probably have an update on that, probably, towards the end of Q2. And we'll see if need be to mention during our next call.But like I said, we're not talking here millions and millions and millions of dollars here. We're talking, within reason, what we can expect to get because, overall, as you saw Q1, our performance was actually not that bad compared to last year, and we'll see how Q2 goes on, with the progression of the COVID-19 situation.
And our next question comes from the line of Ammar Shah with Eight Capital.
I hope everybody is staying safe. So with the impact of COVID-19 being global, and there's definitely different time lines depending on geography, I'm wondering, are there certain markets that you can touch to, even if they're smaller markets that are showing some signs of recovery into May, that might be the way-through for some of the other markets. I don't know, if this one's for you Marcel, or not, but any color there would be good.
Okay. I will begin and maybe Sébastien will add some comments after that. Just to give you where we are right now at this date in May. So Sébastien will talk where we stand about the European because they talk to them every day. But yes, I would just want to mention what is very important that we have, as of right now, all our offices -- Zurich office are open and we have 75% of our dealers in the States, who are open, if we see like California, that's a good market for us, they are open. East Coast about -- how the East Coast, we are open, for sure, in New York, Long Island, that's a challenge. But when you have 75% of your dealers open and 100% of our dealers sells. And I'll just give you an example. We have our Florida Lifts in Florida, that they are doing just a great job. And we have the same at -- in the Maryland we have with Premier Lifts. So it's why I see that, that is very interesting in this industry that we are right now, that we have all this -- we are very busy in North America.And I think that's a vision, what will be the next quarter or two or 2021. But I don't pronounce myself, that's something we'll never say in our life, but we have right now, just pardon me. So Sébastien, can you add a little bit to answer that for me in Europe?
Yes. So basically, we're still unfortunately -- we have been lucky enough to learn from the West, the East, okay? So really, if we started with China, we had a good first quarter financially in China. But for sure, February was tough. I was missing a lot of staff. But from March, it's back to normal. I have all my employees. They are able to travel to go to the supplier, to visit some customer. In Australia, we are open as normal. Italy, it was a tough March. But now in the beginning of April, now they are fee, back to work for the manufacturing. Direct sales in Italy is still difficult, to make appointment with customer. Swiss, Germany, Poland and Czech is a bit slower maybe than usual, but still we are at a good operational mode.And we are at North America, we talk about the car factory that was shut down for almost a month. Now they are back into operation. North America, as Marcel stated, 75% of our dealers are operational. But what's important to understand, it doesn't mean that the dealer, which is not making installation, is not sending order to the factory because maybe he is planning, he's reopening of his area. So -- if -- and you want to be successful you need to make sure you have some elevator ready to go to install. So -- I would say so far, we have been lucky, always learned from west location to come to the east and just try to improve every month to put some new measures in place to keep our employee's safely.
Okay. And turning to Patient Handling, I guess it is probably for Nick. In your MD&A, excluding custom products, the organic growth print, I think, was just under 4%. I'm just wondering, if you can kind of maybe even directionally talk to how that fared into Q2 and onwards, particularly, given some potential tailwinds, I know you guys have talked about the bed chart in the past and just some other ways that there could still be some good demand in that segment. Yes, any color there would be good.
Okay. Ammar. So yes, the 3.9 -- 4% that we achieved in organic growth in Q1, it's kind of in line with our expectations for that division. And we've always said kind of that mid-single digits is what we expect in terms of organic growth. There wasn't much of an impact of COVID in the quarter, maybe the last couple of weeks of March, but for the most part, it's really into April and the first part of May, that we're seeing an impact from COVID-19. So what we have seen, and we kind of hinted on this on our last quarter, after Q4 is that, we have seen an increase in the demand for beds. That's been pretty steady. Again, maybe that last little bit of April -- or sorry, last little bit of March and very strong in April. We're seeing that continue into May, and if we're lucky, it might go into the first part of June. So I would say on the bedside, things have been very, very strong.We did increase capacity there in Beamsville by upwards of 50% there in April. So again, taking some measures to meet this kind of surge in demand. On the mattress side, I would say is that, at first, we did see quite a bit of an uptick in -- I guess, uptick in mattress sales which corresponded to what we saw with the bed. But you have to realize that a lot of these -- this kind of surge in demand is for these temporary COVID facilities. So they're really looking for mattresses on a very temporary basis, mattresses that they will be able to dispose of relatively quickly afterwards. So not what I would call high-end mattresses. So there as well, the mattress sales haven't -- I mean it's not kind of a one-for-one ratio, I would say with the beds, as it relates to this kind of increase in sales due to COVID, but again, we're seeing some good demand, overall, within that segment. It's a bit early to tell how it's going to play out throughout the rest of the year. We're not even halfway through Q2. But so far, through April, it's been good. And again, it's primarily driven by beds. And otherwise, the lifts, I mentioned that earlier on one of the other question. The lift sales have also been quite nice, and that should continue. We expect it to continue into Q2.
Great, Nic. And I guess, just a final one, probably for Mauro. Are there any synergies left that could still be extracted from Garaventa? And I don't mean, call it, in the next quarter or two, given everything is going forward. I just mean more longer term. Is there still a lot that's left there, a little bit? How do you see that operational efficiency rolling out, call it, post COVID?
Well, I mean listen, we do have some that we still see coming forward. To what extent, as you mentioned, the COVID-19 is kind of little cringe into it. But yes, we do still see a little bit of an uptick coming from Garaventa for -- hopefully, for the rest of the year. I'm not sure Sébastien, maybe can talk a little bit more as far as the costing side in the COGS, but overall, yes, there should be a little bit more to come.
Yes. So basically, if we look, at last year, the core business of Savaria, we always say it was a 20%-plus EBITDA business, and we have finished Garaventa 10% last year. So I think, we are just at the beginning. And that the first thing -- first quarter, there was a contribution, we go from 13.4% to 16.5%. Garaventa has its contribution to that. What our formula, what we have to improve is 4 points. Is there efficiency in the factory in Italy and Vancouver. We -- typically, we don't sit at a very high backlog at Savaria. We have to make sure we have a good throughput. So that's number one.And number two, when we bought Garaventa, not each store was profitable. We have a lot of stores in the States and in Europe. So we are working that each store is profitable, every month. Purchasing with China? Yes, we have increased our purchasing in China. We are just at the beginning. And last thing is our product mix in Europe. We have -- if we want to be successful, we have to sell what we manufacture. This is what Savaria does, has been always doing in the past. And this year, we are doing a lot of effort on the Vuelift, on the Mini Vuelift. We see good potential in the future in Europe. We -- last year, we have started to manufacture our own stair lifts in Italy. So I take it, by improving all those 4 key segments, there's no good reason why we should not be able to continue each year to bring the Garaventa, up to increase the overall margins of the [ few sectors ] .
[Operator Instruction] Our next question comes from the line of Michael Doumet with Scotiabank.
Nice quarter. I wanted to circle back on the elevators. I'm trying to square the comments about flat sales in April and the lower housing starts, I guess, that we're expecting in Q2. So is that -- I mean the company fulfilling, previously received orders? Or is there a huge element here of market share growth? And how do you look -- or how should we think about orders for the rest of Q2? And do you think you can sustain, maybe, these levels? Doing -- the question is -- I'm asking is because consensus is looking for negative 17% year-over-year growth in Q2, and it feels like you're -- what was presumed to be the most disadvantaged part of the business in the COVID, feels like it's actually performing well.
Okay, I'll take this one. Yes, but I just want to mention. For sure, that what is very important in a company or, at least, my vision of this company is the booking, booking and booking. And so far, if I just go back last week and just go back this -- yesterday and Monday. We see some orders -- more orders coming in. And what -- and again, I focus that we have, I think, we would manufacture as much elevators in 2020 in Q2 and Q3 and Q4 that's what we have done last year. Plus we have the new element, that we have the Vuelift, the small unit that is -- it is roughly 39 inches diameter because that's a round one.So I see that -- and I am very, very optimistic about what we see on architect. We make webinar to architect. And that was a good strategy in Q1 and we do continue to do that. Education of our dealers about our residential elevators, and the new Vuelift. So our people, we don't go. We learnt how always to improve ourselves. And before, the way of itself that was going to see the dealers and going on a trip and take 4 or 5 days a month just to travel.And when you travel, lot of these times -- the times you are productive, maybe at 50% because you travel and you don't have to travel when you have a webinar or we have a Google Teams. So we are very happy that we push this idea to reach our dealer, more often, with some internet that we can reach them. Show our products, discuss with them, what we can help the people.And it's why I think, we are better right now than we were before. And the people appreciate, our dealers appreciate that, yes, we have an elevator, but right now, we have completely new products that we can offer to more people, that they don't have the space put on elevators, now we have some space that we have, and we will put a Vuelift. So I see great thing coming. What is a great deal? Is it in Q2, Q3, Q4, next year? So we don't know about this pandemic. But even during this period, we are optimistic that we can do almost, what we have done last year, but we will see. It's the future. But for sure, if we look about a couple of years, it's -- our products are exactly what we need, the people need to stay home.
And what's important to understand is our home elevator. Maybe the house of the customer takes 6 to 12 months to build, and the guy that has started his house at the beginning of the year stopped this project, was stopped after 2 months, and he has already planned and designed to put an elevator.As soon as this market reopens, he's going to place his order for his elevator and will put it in. He will finish his project. And the guy that did not start to build his house, maybe he will call back his architect, say, I don't want my parents to stay anymore in the long-term care. I will find a solution to bring them home. So that's why we are very positive about those residential elevators. And we have done a lot of marketing efforts in the last year, with our Vuelift. Yes, we attract the customer, very often, with the Vuelift, but maybe it end up with the traditional sales of a wood cab elevator. So I think, we have the best mix and a lot of options. So that's why we have a good traction in this Accessibility segment with home lift.
Okay, great. Those are great comments, and it sort of does help, I guess, give us a sense of where the numbers should land in the next couple of quarters. I mean I wanted to -- I guess, it's a good segue into going to the campaign for Stay At Home with Savaria. Obviously, got a lot of relevance, as it addresses the needs in the current environment. Maybe I just want to address, what's your take on the longer-term implications from COVID-19 to the Accessibility business, particularly, as it relates to seniors. And maybe, what can Savaria do better to address the need, I guess, of the future?
Marcel?
Okay. Maybe you have a good see of the future, Nicolas in your crystal ball?
Well, my crystal ball is pretty cloudy, but I can give it a shot. I would say, yes, the trend of people wanting to stay at home, I think that will continue. And if anything, it's going to be more reinforced by the current environment. So what does that mean?I mean it could be -- we talk a lot about residential elevators, but there's also other products that we offer, that could fit and suit those needs. So even if you're not looking to build a new home, you could retrofit your home, you can put in a porch lift, for example. So those are products that we offer. You could put in a stair lift. We haven't talked much about that, but that's also a product that we're looking to promote, as it relates to retrofitting the home to keep you in it longer. You have the various lift products. So kind of promoting our home-lift products, I guess, the portable ceiling lift and the gantry systems. So I think when you look at our product mix, it's not just residential elevators. We're really trying to push the entire portfolio of products, that we offer, that suits this trend.We talked about our house. And that's, I guess, at the beginning of the call, Marcel has mentioned that one of the big advantages of Savaria is that we do have the full suite of Accessibility products. And so our Stay at Home with Savaria campaign, it's really pushing all of those elements because not everybody might be building a new home or be -- have the means to put in a Vuelift, but maybe the stair lift could be for them or maybe a porch lift. So I think, it's -- we're pushing the entire category, as a whole. And so longer term, I don't know exactly what it means, in terms of our sales, 1, 2, 3, 4 years down the road. But there is this baby boom population, that the oldest baby boomers, those born in 1945 are 75 years old now. And so we have a big kind of a wave that's coming in front of us of these baby boomers that will likely look to stay at home, if possible, as opposed to going into some sort of skilled nursing facility or a long-term care facility?
Yes, thank you, Nic. And just to add. Yesterday night, I had an interview with Québec newspaper, La Presse. And they ask me, roughly, the same question, okay? And I see, we're seeing -- what you see in the future for this Accessibility, what kind of growth. And I mentioned that this Accessibility division of Savaria is just, if we make this job, and we will make that job. That I see over 10% of growth back in this Accessibility. I just say, like yesterday, that 10% or more, I don't know, if it will be in 2020, in Q4 or Q3 or early next year, but it will be there because the people want to have an Accessibility home.
And your next question comes from the line of Justin Keywood with Stifel GMP.
I'm wondering, if there's been any changes in your view on the supply chain, and if you feel comfortable with the current inventory levels?
Sebastian?
As you can see in our financial inventory has always -- never been an issue at Savaria. We carry the right level. That's why we went to the first quarter without any supply issue from our main factory in China. Because we're at the right level in China, the right level here. And as soon as we saw the beginning of the pandemic, we ship all our finished goods from China to ensure we have no disruption in our supply chain. So for sure, like now, with tighter economy, that might be an opportunity for us to renegotiate some of the pricing. So we see on the long term, what can be achieved. But at least, we don't see any price increase on our supply chain. And maybe just some opportunity to work on a bit of cost savings on long-term, if volume continues to be there.
Okay, that's helpful. And then I had a question on the $3 million in contracts that were announced earlier this week. Are these new customers? And is there an opportunity to expand those contracts, either for the current projects, or new projects that are coming online?
Yes. For sure. That's all new customers, and -- but that's the dealer, that is our dealer in Premier Lifts. And in Toronto, that's our direct office has this other contract, but now I will begin to release -- to choose the people, if we have a contract over $1 million, I will begin to put that on a press release. And you will see that it will come, around [indiscernible] to say because they have bigger projects that we have often in Canada. So yes, that's new, the direct customer. And that's very good. When the people see that for other builders, other architects. See any -- didn't put the elevators in each of their contract. That opens eyes to customer or even architects or builders and that's we push just one thing, more orders.
There are no further questions in queue at this time. I'd like to turn the call back over to our presenters.
Okay. Back to Marcel. First of all, thank you my dear analysts to be on the line. I appreciate all other people, other maybe investor. So I appreciate the time that you pass on Savaria. And be sure, one thing, that we're 1,450 people working for Savaria right now. And right now, the 1,400 are, I think, happy guys. We give them a little bonus during this hard period. We'll make a check of $1,000 to each employee. And we maintain the $1,000 was for -- in Canadian dollars. And even the guy in China. I don't know, in RMB, Sébastien, what mean -- what for them like RMB 7,000, RMB 6,000?
Approximately RMB 5,500.
Yes. So I am not update with the RMB. So -- but something we have to assist and thank our employee, but if we are known in this world, it's because of you. With your research to make on Savaria and you bring some good news. So again, thank you very much, and thank you for my team.
James, thank you for your work.
Thank you. And this does conclude today's conference call. You may now disconnect.