K-Bro Linen (KBL) investor relations material

Executive summary

• Achieved record annual revenue of CAD 507 million ($506.8 million) and adjusted EBITDA of CAD 99 million ($98.7 million) for 2025, marking the seventh consecutive quarter of record results.

• Growth driven by strategic acquisitions, notably Stellar Mayan, which expanded the U.K. platform and enhanced revenue diversification.

• Integration of acquired businesses, including Stellar Mayan, progressing well, with 25% of anticipated cost synergies realized by year-end and further synergies expected over 12–24 months.

• Healthcare revenue rose 41.2% to $276.5 million; hospitality revenue increased 29.5% to $230.3 million compared to 2024.

Financial highlights

• Consolidated revenue rose 36% year-over-year to CAD 506.8 million ($506.8 million), primarily due to acquisitions and price increases.

• Adjusted EBITDA increased 36.9% to CAD 98.7 million; adjusted EBITDA margin improved to 19.5%.

• Adjusted net earnings grew to CAD 30.4 million; reported net earnings decreased to CAD 18 million due to higher interest, amortization, and adjusting items.

• Debt (excluding lease liabilities) rose to $237.6 million from $123.8 million, mainly due to acquisition financing.

• Cash provided by operating activities was $62.7 million, up 25.5% year-over-year.

Outlook and guidance

• Expect continued strong activity in healthcare and hospitality segments, with adjusted EBITDA margins to remain at similar historical levels in Canada; U.K. margins will be lower due to Stellar Mayan's profile.

• Anticipate CAD 40 million in free cash flow before dividends for 2026, with leverage expected to move into the low 2x range.

• 2026 capital spending guidance (excluding right-of-use assets) is $20–22 million, including remaining Stellar Mayan investment.

• Positive outlook for growth in North America and Europe, with ongoing evaluation of strategic acquisitions.