Savaria Corp

TSX:SIS

Q1-2025 Earnings Call

[Operator]

Good day. My name is Victor, and I'll be your conference operator today. At this time, I would like to welcome everyone to Savaria Corporation's First Quarter 2025 Conference Call. [Operator Instructions]

This call may contain forward-looking statements, which are subject to the disclosure statement contained in Savaria's most recent press release issued on May 7, 2025, with respect to its first quarter 2025 results.

Thank you. And Mr. Bourassa, you may begin your conference.

[Sébastien Bourassa, executive]

Thanks, Victor, and good morning, everyone. So today, I will start with a small recap of our Q1 results, then Steve will update us on financial, and JP will do an update on Savaria One, and follow that with a Q&A session.

So once again, I'm very proud of our Q1 results. It showed that the transformation is stable for a fifth good quarter in a row in an environment where uncertainty where all our products are USMCA-compliant, meaning that there's no duty applicable on all our finished products. So some of the key highlights for the first quarter. So fantastic performance at 18.5% of EBITDA in our weakest quarter, which is always Q1 due to winter, the numbers of working days. So quite proud of our Q1.

Looking back at the mirror, we can see that the last 12 months, we're trading at 19% of EBITDA, which really showed the improvement on the Savaria One, which JP is going to highlight later. And we are getting closer to the goal of Savaria One, which was to be at 20%. As you can see in our MD&A, we did not change our guidance due to economic uncertainty and tariff noise, but yes, we remain assured that we want to finish at the top of the bracket.

So growth in North America was once again strong, 11.8%, while in Europe was slightly negative. I think the reset is almost done and Patient Care had a modest growth of 2.1% after a fantastic Q4 last year. We know it's important to grow, and this is part of the pillar for 2025, and we are confident we'll be able to achieve that because of new product launch, a growing share of wallet with our dealer and onboarding some new dealer as well.

So talking about new products, we started to assemble a Luma home elevator at our factory in Mexico, which we expect sales in the coming months to be able to ramp up as we train our dealer and our sales team. Product is looking outstanding. It's a product that will be sell worldwide, easy to install, stockable for the dealer that want to stock it. So bring a lot of key advantage to a dealer.

Debt ratio finished at 1.5 in Q1. Now we have available fund or at least before last night of $254 million at the end of March 31, which put us in a very good position to make some investment or acquisition. So talking of acquisition, as you can see this morning, we have closed a small tuck-in Western elevator was one of our long-term dealer in BC, Canada. And it was strategic for us as it's continued to solidify our position in the BC area with our own direct store of Garaventa and our own direct store with Western. That's going also to add to bring some additional volume as they were not buying other products from Savaria. Their annual sales were approximately CAD 7.5 million. So welcome to all the new employees in BC.

And as also you can see in our press release, we decided to invest CAD 30 million in Greenville to expand our factory there so that we have a new 55,000 square foot available in the second half of next year. This is on top of the 60,000 square foot that we have freed up in the last quarter in Q1, and we have started to assemble our Eclipse home elevator as of April 4. As we say regardless of tariff, we wanted to assemble more in the U.S., and that's what we have done in the first quarter. So thank you very much to the team in Greenville and Toronto for the speed of execution that was an outstanding launch.

So on that, thanks to all our employees in Savaria and our dealers for the fantastic Q1. Steve, financial, please.

[Stephen Reitknecht, executive]

Thank you, Sebastien, and good morning, everyone. I'm excited to share some remarks regarding our Q1 2025 consolidated financial metrics. So the key highlights for the quarter include a record first quarter for EBITDA by a wide margin. Our EBITDA grew by $6 million or about 17% to $40.6 million for the quarter. As Sebastien mentioned, Q1 is typically a soft quarter for us and yet in spite of the external context and threat of tariffs, our results are very strong.

Revenue growth of 5.2% with particularly strong results of 11.8% growth in North America Accessibility. Part of the benefit here is favorable FX rate movement, but this also shows that we're well diversified. In addition, gross margin increased by 180 basis points to 37.8%, and our EBITDA margins increased 190 basis points to 18.5%. These are very strong results for Q1. Our trailing 12-month adjusted EBITDA margin is now 19%. And lastly, strong cash flow with operating cash flows of up 18% versus last year. Thanks to our financial discipline and improvement in working capital performance, we were able to lower our leverage ratio of net debt to adjusted EBITDA to 1.49 from 1.63 at the end of 2024.

So now starting with consolidated revenues for the quarter. We generated revenues of $220.2 million, an increase of 5.2% versus last year. This growth is driven by 0.8% organic growth, positive foreign exchange impact of 3.3% and an acquisition impact of 1.1%. Our Accessibility segment had growth of 6.1% in the quarter, driven by an 11.8% growth in North America, partially offset by a contraction of 2.8% in Europe.

North America was able to deliver constant revenues in a more uncertain market environment. We've made a number of changes to our sales strategy in Europe in Q1 of 2024, so we have tough comparables, but we are very excited for the future, especially as we introduce new products into the market, including the new Luma and the Multilift.

Patient Care had modest growth of 2.1% in the quarter and came off of a very strong Q4 2024. This business is significantly project-based and can be lumpy and positive news that our backlog also grew significantly during the quarter, which bodes very well for future quarterly sales. The net acquisition impact, as mentioned of 1.1% was driven by the Matot branded dumbwaiters and material lifts, which we acquired in April of 2024.

As previously stated, our consolidated gross margin for the quarter was 37.8%. This performance represents a marked improvement of 180 basis points over prior year and a 10 basis point improvement over Q4 2024, driven by continued operational efficiencies realized under Savaria One. Both Accessibility and Patient Care segments contributed to this improvement, underscoring the effectiveness of our ongoing initiatives to streamline operations, enhance margin quality and drive sustainable growth. This gross margin improvement is possible due to Savaria's vertically integrated operating model, and therefore, more protected from inflationary pressures as well as Savaria One initiatives that are improving all aspects of the business.

Adjusted EBITDA was $40.6 million for the quarter, representing the fourth quarter in a row above the $40 million threshold. Adjusted EBITDA margin finished at 18.5% for the quarter. This represents an improvement of 190 basis points over Q1 2024. And as noted earlier, our trailing 12 months adjusted EBITDA margin is now 19%. Both Accessibility and Patient Care saw improvements in adjusted EBITDA margin. This performance enhancement is primarily driven from the improvements in gross margin previously mentioned.

We incurred $4.7 million in strategic initiative expenses for the quarter, in line with our expectations. And these fees are mainly consulting fees similar to last year and will repeat for the next 3 quarters, but will end in Q4 of 2025. Finance costs were $3.5 million for the quarter compared to $2.3 million last year. Interest on long-term debt decreased by $1.4 million due to reduced interest rates on our debt as well as a lower overall debt balance versus last year. The driver of the year-over-year increase in total finance cost is a larger unrealized gain that we had in Q1 of 2024 last year versus a smaller gain in Q1 of 2025 this year, the difference being $2.4 million.

I'm now going to look at and discuss the balance sheet and cash flow. So cash flow from operations in Q1 was $31.3 million, which is an increase of $4.7 million versus last year coming from higher EBITDA. We reduced working capital by $2.2 million in the quarter, coming mainly from higher trade payables. CapEx for the quarter finished at $4.7 million, which is 2.2% of sales and in our target range of 2% to 2.5% of sales. Free cash flow after debt-related costs and dividends was $10.3 million for the year -- sorry, for the quarter, which is $3.8 million or 58% higher than prior year.

The strong free cash flow contributed to repayment of debt of $7.5 million and reduced our leverage ratio to 1.49 and better prepares us for any opportunities that lie ahead. With regards to our guidance, due to continued uncertainty regarding tariffs, we're keeping our 2025 guidance unchanged with projected revenues of approximately $925 million and an expected adjusted EBITDA margin between 17% and 20%.

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

[Jean-Philippe Montigny, executive]

Thank you, Steve. Good morning, everyone. As Seb and Steve mentioned, our adjusted EBITDA this quarter was $6 million or 17% higher than last year. This is particularly impressive given the context and the uncertainties that lie around it. Most of the improvements can be tracked back to Savaria One initiatives, and those are balanced between commercial initiatives and cost reductions.

Our top line has been growing in North America, in particular, thanks to the efforts we put in improving our operations in Brampton, in Surrey and Mexico as well as the sales growth efforts that paid off. On the cost side, we benefited from many improvements implemented last year. So what's happening with Savaria One? By the end of Q1, we had implemented more than 350 improvement initiatives across the business. Yet in Q1 alone, we added 130 new initiatives to our Savaria One pipeline. Not all of those have associated benefits, but those that do added millions of dollars to our projections.

Some examples of the successes we had in Q1 are the following. One is we innovated in the fabrication process of our Freecurve stairlift, where the welded parts used to ensure a good alignment and coupling of the rails during the installation of the stairlift is now using a new technology and process. It's called the Handy Block, and it ensures better alignment of the rails, a smoother ride for users, but also a simplified fabrication process requiring about a dozen less welders in [indiscernible].

We transferred part of the bed frame parts production to our Mexico facility. We still assemble our long-term care bed in Beamsville, Ontario. But over the past months, we have been leveraging our Mexico facility to produce bed frame parts, which not only reduces our overall bed fabrication costs, but also frees up capacity in Beamsville for us to grow sales when demand is strong, like it happened in Q1 this year. We completed about [ 20 ] different procurement initiatives across all our businesses.

In the majority of those, we either renegotiated price with an incumbent supplier through a competitive process or use an existing supplier at a new factory. Also, we took a hard look at our IT license costs across the globe and scrub those either for redundancies or better rates, and we're not finished. While the impact is not always easy to see, we are making progress with sales growth initiatives. For example, we added about 50 new dealers to our network across Savaria and Garaventa in North America.

In Europe, we won major new accounts this year for Handicare stairlifts. And in Patient Care, our backlog is as high as it's ever been. So some of these impacts are offset by other factors, but we are on track. These are just some examples, but in total, we implemented about 50 initiatives in Q1 this year. We also made substantial progress on 3 strategic fronts in Q1. The first is we launched a new through-the-floor elevator named Luma. The Luma is a product we developed in-house to sell in North America and in Europe. It will be manufactured in our Mexico facility for distribution worldwide. We think the Luma is a very attractive product, thanks to its slick design, its robust yet elegant construction and the fact that it is simpler to install than competitor products. We are now starting to offer it to selected dealers in both North America and in Europe.

The second is in Europe, on top of the Luma, we are now introducing the Savaria Multilift. So it's the same Multilift we had in North America, but adapted for European standards. This porch lift will further enhance our portfolio and be another product that our Garaventa direct stores can sell in Europe, making us less reliant on third-party products. We can, therefore, now offer a much broader range of products for our customers and dealers in Europe as well as aligned to our one-stop shop vision.

Finally, in our Patient Care division, Q1 2025 was the second quarter where we shipped our new Savaria M-Series clinical ceiling lift. The essential model was the one most sold in Q4 last year. And this year, we started selling more of the clinical version, which includes a number of features like the 3-Down feature. We believe we now have the best ceiling lift on the market, and yet we will continue to upgrade it and launch innovative accessories in the coming months.

So what's next for Savaria One? We have our work cut out for ourselves this year and plan to continue to execute our pipeline of initiatives in the coming months. We still have more to come on material cost reductions, on productivity improvements and most importantly, on sales growth as well as a couple of interesting product innovations in the pipeline for this year. Given the health of our Savaria One pipeline and with the caveat that we are always subject to external market forces, that's why Seb and Steve mentioned, we still maintain our guidance, and we're aiming for the high end of it.

So thank you for your attention. I will hand it over back to Seb for closing remarks.

[Sébastien Bourassa, executive]

Okay. Thank you, JP and Steve, I think a very good update on Savaria One. As you see, we still have some traction on it, and it's very well structured, and we are ready to be independent this year by ourselves so that going forward, all that we have learned in the last 2 years, we should be able to continue to apply that on future business.

So I guess, Victor, we are ready for Q&A session, please.

[Operator]

[Operator Instructions] Our first question will come from the line of Derek Lessard from TD Cowen.

[Derek Lessard, analyst]

Congrats on the quarter and the acquisition. Sebastien, just maybe -- I just had actually one question for me this morning. Could you maybe talk about the efforts to repatriate manufacturing back to the U.S.? I guess, where you guys are right now, maybe an update on some of the capacity you've got there? And ultimately, what could this look like in a few years down the road when you've built this out?

[Sébastien Bourassa, executive]

Thank you, Derek. Very good question and a very good report you did also this morning. So basically, yes, the U.S., yes, right now, we have been lucky all our products are USMCA-compliant. So all our finished products, they are not impacted by duty. But we wanted to be closer to our market in the U.S. So we had some extra capacity in our building of Greenville. We have 200,000 square foot. We have decided to free up 60,000 square foot to be more condensed on the Patient Care. And we have started in April 4 to do our Eclipse home elevator, which is our best seller in North America. So basically, we're in production since the beginning of April with this product. So that's closer to the market. So that's the good news.

And right now, we do some production in the U.S., some in Canada, but that was our first product. The straight stairlift, they were always distributed from Greenville, so they [ discontinued. ] And now we still have a lot of square footage available. But we always try to think about the mid, long-term, right? So that's why this investment of 60,000 square foot will bring 115,000 square foot of manufacturing capacity for the accessibility. We have 2 big factory in Surrey Vancouver -- Survey Vancouver and Toronto. We're always about to think about the future. But definitely, as we expand, I think we can have a second, third line of products that we'll be able to make locally for sure.

And the success, we have 12 factory worldwide. Sometimes we sell to each other. We do some subcomponents in Mexico and China and Canada. That's what makes the success of Savaria to be local, but worldwide at the same time.

[Operator]

Our next question will come from the line of Michael Glen from Raymond James.

[Michael Glen, analyst]

So just looking for an update as to stairlift sales in North America. Have you been able to make any gains with market share, with dealer penetration? Just looking for an update as to how you see that business evolving over the coming year.

[Sébastien Bourassa, executive]

Very good question. So for sure, yes, we brought back the manufacturing of curved stairlift in North America in the last -- since the acquisition of Handicare. So now we are fully manufacturing in Toronto with the curved stairlift, due to the distribution of straight from Canada or from U.S., depending where is the customer. And it's an area where we could be better. Yes, we have 11% organic growth in North America. I would say home elevator has been maybe the best segment out of that. Unfortunately, we don't disclose the sales per product. But definitely stairlift is an area where we are good. We have very good time, good products, and this is something in North America that we should be better in the future.

[Michael Glen, analyst]

And what -- can you just give some idea like what do you need to do better in stairlift? Is it marketing? Is it adding dealers? Just trying to get some sense as to what you can do better to boost market share there.

[Sébastien Bourassa, executive]

For sure, leads is always very important for our dealers. So definitely to give them some leads to have them to sell our products. I would say that would be a good answer, a good way to support them, so that we can have more sales.

[Michael Glen, analyst]

Okay. And then on elevators in North America, you just gave an indication that it was the better performing product in the period. Are you seeing any change in demand patterns out of U.S. buyers? Have you seen any softness in the market just given some of the housing data that we've been seeing?

[Sébastien Bourassa, executive]

I would say it's too soon to talk on that. We don't receive cancellation of projects. We see with a configurator, co-builder, the activity quoting is still quite good. The number of drawing people make is good. But don't forget one thing, we are lucky. We're in a good industry, the aging population, whatever -- when you're aging, you're aging, you need to stay at home. So you will probably do your exclusivity product first before you do some other luxury expenses. So I think this is good. Architect, contractor with professional is one of the things we're quite strong with working on leads with them. The density of the population, there's a lot of townhouse in North America, 3, 4 floor. So it's not just if you're aging that you will think about putting an elevator.

So I would say for now, again, it's too soon to talk. And the person who has worked to put an elevator just got his permits, even though the economy was uncertain in the last 2, 3 months, I think we'll probably continue with this project. So, so far, no cancellation, activity is good. So maybe, Steve, do you want to add something?

[Stephen Reitknecht, executive]

Yes. Just to add. Michael, just to add on this, our backlog remains very strong. And we have quite a few direct stores in North America, not just in the U.S. to give us really good insight into what's happening in the market because they're booking jobs out anywhere from 6 months to 2 years, right? So our backlog has actually increased at our direct stores. So that gives us really good indication that the market is still healthy. I mean we do see the same headlines that you're seeing. But in our business and the shortage in housing and the products that we're selling, we're still able to build our backlog right now. So sort of despite those -- that noise in the headlines, we still feel positive about -- feel very positive about what the future is going to bring.

[Operator]

And our next question will come from the line of Justin Keywood from Stifel.

[Justin Keywood, analyst]

Nice to see the results. Just a question on the guidance, maintained adjusted EBITDA margins of 17% to 20%. I'm just trying to understand that a bit because 18.5% in Q1 and the mention of most of Savaria's products being USMCA-compliant. Is that just being overly conservative of the guidance? Is there any anticipated headwinds that we should know about?

[Sébastien Bourassa, executive]

Very good question, Justin. In the last 3 months, there's been drama 1 week after the other. You have no idea how much time JP and Steve and the team have worked on the tariff situation. We had tariff, no tariff, deadline, no deadline. Right now, again, it is USMCA-compliant, are they going to renegotiate the agreement in the next year or so? I think nobody knows when it could happen. But I think it's just extra conservativeness. Again, I don't like it. We are -- we like to have a good budget and we have said that the target has always been 20% at Savaria One. We've maintained that. But because of the economy tariff situation, we keep the bracket. And I think as we will go during the year, if the situation remains the same, for sure, we'll try to narrow down EBITDA guidance. But for now, yes, we have decided to keep it a bit wide to be conservative.

[Justin Keywood, analyst]

Understood. And then just on M&A, balance sheet, obviously, pretty healthy, 1.5x. We saw the tuck-in deal in Western Canada. Could you just describe the pipeline? And is there an opportunity for additional M&A? Or do you think you're going to be a bit conservative just given with everything that's going on?

[Sébastien Bourassa, executive]

Again, I think our phone line is always open for acquisition, we revisit. And you know it takes time, right? So I think for sure, tuck-in is always key. Again, we can absorb that without too much effort, especially after the Savaria One structure. So definitely, dealer, we have done that in the past by 1 or 2 be very selective. So again, could we see some more tuck-in this year? Like last year was Matot, very strategic product that is very complementary. Now that we're fully manufacturing in-house in Toronto. We are going to have growing the sales of Matot this year. So we need to continue to do a small tuck-in. I think that's something that will help us for our organic growth, right? So yes, let's see the next few months, if we are able to do some more, we'll see. The phone lines are open for sure.

[Operator]

Our next question come from the line of Frederic Tremblay from Desjardins Capital Markets.

[Frederic Tremblay, analyst]

Just with the -- what we're seeing with the trade dynamics in the U.S., I was wondering if you had any comments on the competitive environment in that country, especially as Savaria competes with some local manufacturers there. Have you noticed any sort of changes on that front or no meaningful changes so far?

[Sébastien Bourassa, executive]

It's always a bit difficult, because we are the only public company into accessibility. So I think it's the same competitive environment. Again, we are like it's a good industry. There's a good competitor. We all respect each other. So I would say there's no big change of dynamics into the industry. And I think we are definitely the most active, at least that's what I think by bringing new products, making tuck-in acquisition, doing more things for dealers. So I think that's why Savaria remain a great partner because we bring value to a dealer, right?

[Frederic Tremblay, analyst]

Great. Moving to Europe. Obviously, there's been some efforts on margin improvement there lately, which have been successful. I was wondering if there is any additional potential margin upside coming from the new products that you're introducing over there? Maybe your thoughts on how that can contribute to both revenue growth and margin going forward?

[Jean-Philippe Montigny, executive]

Yes. So you mean the Luma and the Multilift, right? Just to be...

[Frederic Tremblay, analyst]

Yes. Luma and any other product that you would introduce in Europe in the next year or 2 as well.

[Jean-Philippe Montigny, executive]

Yes. So to answer your question, yes, so those products come in with -- they're going to be margin accretive, right? So they have good margins and because as you may remember, so we're fully integrated vertically. So we make the products from -- almost from scratch. So we get the manufacturing margin, but also margin as we distributed in Europe. So yes, those should help. We also have still a number of initiatives to improve the margins in Europe, right, whether it's in our sales and marketing costs or sometimes the products that we continue to innovate even in our stairlift products, and we have pretty large opportunities coming up. I won't reveal the details, but it will come later this year. But we have -- yes, so we have a path to increase the margin still over there.

[Sébastien Bourassa, executive]

Definitely, JP and Fred, the one-stop shop has been a key in North America. That's why our dealer likes to work with us in Europe before we just had a stairlift now with Handicare and Garaventa, we have in client platform. Now with Savaria, we have the porch lift, we have the Luma, we have the Vuelift. And again, you can imagine that all new R&D products we are going to launch are going to be worldwide from day #1. But I think the catch-up game to have the one-stop shop in Europe will finish in the next year. And then we should be in a good position to have growth again in Europe.

[Frederic Tremblay, analyst]

Great. And last question for me, and apologies if I missed it, I joined a little late to call. But on Patient Care, can you talk about the backlog there? And maybe your thoughts on your efforts to sell like a full package. I think you were calling it selling the room. Maybe just an update on how that's going.

[Sébastien Bourassa, executive]

Thank you, Fred. You did not miss the Patient Care question, you are first one to ask. So I think yes, Patient Care, definitely, again, the backlog is good. The backlog is high. It's always a bit lumpy from one quarter to the other. But right now, we are going to get some growth this year and for sure, like again, a bit of one-stop shop. We try to sell the bed, the mattresses and the ceiling lift and sometimes the floor lift as well. So definitely, we have a good product offering, and this is something that over time, we want to continue to expand because we have a good sales force. We have 50 sales reps in North America. We knock on a lot of doors. So definitely, if we have additional products to sell, that can be beneficial.

[Jean-Philippe Montigny, executive]

Maybe just one or 2 things to add, Fred. So in the last month, we refreshed our case goods line. So we have a partnership where we have a set of brand-new case goods, which is helping to sell the room. I think our beds, we don't talk about it much, but our beds, we keep innovating in the beds. We have some incremental improvements, and we're still working on more major improvements. One thing I cannot -- I don't have the specifics, but I know a number of our competitors import beds from China, okay? So just keep that in mind. It may help us, right, because of the tariff situation. So our beds are still strong.

So in terms of selling the room, like owning the room, like you said, we still have ways to go, but we feel good about what we have right now. And with the new ceiling lift, new case goods, decent bed lineup that we keep improving, I think we're already making good progress.

[Operator]

Our next question will come from the line of Zachary Evershed from National Bank Financial.

[Zachary Evershed, analyst]

Congrats on the quarter. Could we jump into the details of that planned $30 million facility expansion? By the time that you're bringing that online, do you think that you'll have enough backlog to instantly fill it? Or will it be more of a slow ramp with shuffling of capacity from different locations?

[Sébastien Bourassa, executive]

Zach, again, to repeat a bit earlier, we look on the mid, long-term. Right now, our footprint worldwide is [ 1.050 ] million. This is going to bring us to 1.1 million square foot of manufacturing potential worldwide. And if we look at the next 5 years, we're in a growing business. We'll have more additional volume. We like to make the acquisition an example, the Matot, we bought the line of product. We brought it back within our footprint. So I think in the next few years, there will be enough project that we can use the space in the U.S. and continue to have a good footprint in Canada. So it's not that we are going to move everything from U.S. to Canada -- from Canada to U.S., no, we want to manufacture more locally, rebalance a bit of supply chain. Example, we have opened Mexico to rebalance with China and Mexico. But that's the same with the U.S., we really want to rebalance a bit in North America that we have capacity for the future.

I think that's the key message. And regardless of tariff or not or what would happen next year to manufacture locally, I think it's always a benefit to be closer to your customer. And I think [ $30 million ] yes, there's a bit of manufacture of the building that we are expanding 55,000 square foot, and that's our own building. So that's always good. But there's some machinery as well because we like to make parts by ourselves, we like to be vertical integrated.

[Zachary Evershed, analyst]

Good color. And then just quickly touching on the Western Elevator acquisition. Could you tell us about how that came about, whether it's a standard playbook and what kind of multiple you're paying for tuck-ins these days?

[Sébastien Bourassa, executive]

No, I think right now, we have approximately 30 direct store worldwide. So against that, that will be #31. So I think, yes, the playbook is I think we're quite well established, what we can improve on the short-term to have a better synergy and to make sure we can leverage on that, that we have the same practice across all our direct stores. So definitely, the team is very -- it's a well-known game. So I'm not worried about the game plan. And also, what's nice is that the team over there is very stable. The 2 owners are staying with us for a certain time. So I think that's very positive. So there will be very good stability. So that will be a bit my answer.

[Operator]

Our next question will come from the line of Jonathan Goldman from Scotiabank.

[Jonathan Goldman, analyst]

Really nice quarter. Most of them have already been asked, and I apologize if I missed this because I joined late. But really nice margins in the quarter, 18.5%. It looks like a record for Q1 by at least 200 basis points. I think the original Savaria One target was for 20% EBITDA margins. But how are you thinking about that target maybe in the mid to long-term, given the results you just had and all the initiatives that are still ongoing?

[Sébastien Bourassa, executive]

Jonathan, very good question. But I think now the last 12 months, we're at 19%. So I think the 20%, we can see it, okay, that's definitely our target. And I think for the Savaria 2.0, we need to wait a little bit to set up the new bar. But definitely, you can see that once you reach 20%, if you're able to bring additional sales, but I guess we should be able to continue to expand a bit on that. But I think we need to wait a bit to make a new commitment.

[Jonathan Goldman, analyst]

I'm sure JP has a bunch of initiatives to go.

[Jean-Philippe Montigny, executive]

Yes. I didn't speak. But I think, Jonathan, you should look at our business, right? Like some parts of the business are more vertically integrated than others. So you can imagine the more we go, the more we want to drive towards that. So where we have more vertical integration, like in North America, we have better margins. So that's a bit how we're thinking about it.

[Operator]

Our next question will come from the line of Michael Glen from Raymond James.

[Michael Glen, analyst]

Just wondering if you have any view or any of the volume that you saw in Q1 was related to some customers buying ahead related to potential tariffs?

[Sébastien Bourassa, executive]

A very good question. But all our products are really custom made. So again, it's come from a true order that it is designed for us or the curved stairlift. So except some straight stairlift that you can maybe stock a bit, but I don't see a massive spike on that. But I think now people have really -- they have taken delivery of what they were supposed to take. Again, is there maybe 1 million more that people took? Maybe the answer is yes, but it's not dozens of millions because, again, it's difficult to stock too much custom product or to pull too much forward. So again, we still have a good backlog. So it's not like we have ate everything in the first quarter. So I don't think it was that.

[Operator]

Thank you. [Operator Instructions] And I'm not showing any further questions at this time. I would now like to turn it back over to Sebastien for any closing remarks.

[Sébastien Bourassa, executive]

Well, thank you very much, and thanks to the analysts that follow us. I think you know well the story. Your reports are good. You have good questions. So thank you very much for that. On that, I think we had good results. I think that's pretty clear through all the documents, but any question, but you can always come to see us today at the annual assembly in Montreal at 11 o' clock. Otherwise, we'll see you there in Q2. Thank you very much.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.