Celestica Announces Third Quarter 2024 Financial Results and Will Host Virtual Investor Meeting

Q3 2024 revenue and non-IFRS adjusted EPS* exceed the high end of guidance ranges; 2024 full-year outlook raised and 2025 outlook provided

^{(All amounts in U.S. dollars. Per share information based on diluted shares outstanding unless otherwise noted.)}

TORONTO (GLOBE NEWSWIRE) — Celestica Inc. (TSX: CLS) (NYSE: CLS), a leader in design, manufacturing, hardware platform and supply chain solutions for the world’s most innovative companies, today announced financial results for the quarter ended September 30, 2024 (Q3 2024)^†.

“We are pleased to have delivered very strong financial performance in Q3 2024, with revenue up 22% year-to-year and non-IFRS adjusted EPS* up 60% year-to-year. With our guidance for Q4 2024, we expect a strong close to another successful year in 2024,” said Rob Mionis, President and CEO, Celestica.

“Looking to next year, we continue to see solid demand signals from many of our large customers, which are providing us with visibility for continued growth. Our 2025 outlook calls for higher year-over-year revenues and non-IFRS operating margin*, which if achieved would represent 15% annual growth in our non-IFRS adjusted EPS*.”

Q3 2024 Highlights

• Key measures:
  • Revenue: $2.50 billion, increased 22% compared to $2.04 billion for the third quarter of 2023 (Q3 2023).
  • Non-IFRS operating margin*: 6.7%, compared to 5.7% for Q3 2023.
  • CCS segment revenue increased 42% compared to Q3 2023; CCS segment margin was 7.6% compared to 6.2% for Q3 2023.
  • ATS segment revenue decreased 5% compared to Q3 2023; ATS segment margin was 4.8% compared to 4.9% for Q3 2023.
  • Adjusted earnings per share (EPS) (non-IFRS)*: $1.04, compared to $0.65 for Q3 2023.
  • Adjusted return on invested capital (adjusted ROIC) (non-IFRS)*: 28.6%, compared to 21.5% for Q3 2023.
  • Adjusted free cash flow (non-IFRS)*: $74.5 million, compared to $34.1 million for Q3 2023.
• Most directly comparable IFRS financial measures to non-IFRS measures above:
  • Earnings from operations as a percentage of revenue: 5.5% compared to 5.7% for Q3 2023.
  • EPS: $0.77 compared to $0.67 for Q3 2023.
  • Return on invested capital (IFRS ROIC): 23.3% compared to 21.8% for Q3 2023.
  • Cash provided by operations: $144.8 million compared to $88.4 million for Q3 2023.
• Repurchased 2.2 million common shares for cancellation for $100.0 million.

† Celestica has two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 3 to our September 30, 2024 unaudited interim condensed consolidated financial statements (Q3 2024 Interim Financial Statements) for further detail.
* Non-International Financial Reporting Standards (IFRS) financial measures (including ratios based on non-IFRS financial measures) do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar financial measures presented by other public companies that report under IFRS or U.S. generally accepted accounting principles (GAAP). See “Non-IFRS Supplementary Information” below for information on our rationale for the use of non-IFRS financial measures. See Schedule 1 for, among other items, non-IFRS financial measures included in this press release, their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. Schedule 1 also includes a description of modifications to the calculation of non-IFRS adjusted net earnings, non-IFRS adjusted EPS, non-IFRS adjusted tax expense and non-IFRS adjusted effective tax rate in the first nine months of 2024 (YTD 2024) resulting from the enactment of Pillar Two (global minimum tax) legislation in Canada, and the recent amendment and restatement of our credit facility. The most directly comparable IFRS financial measures to non-IFRS operating margin, non-IFRS adjusted EPS, non-IFRS adjusted ROIC and non-IFRS adjusted free cash flow are earnings from operations as a percentage of revenue, EPS, IFRS ROIC, and cash provided by operations, respectively.

Fourth Quarter of 2024 (Q4 2024) Guidance

For Q4 2024, we expect a negative $0.17 to $0.23 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges. For Q4 2024, we also expect a non-IFRS adjusted effective tax rate* of approximately 21%.

2024 Annual Outlook Update

Assuming the achievement of the mid-point of the above revenue and non-IFRS adjusted EPS* guidance for Q4 2024, our updated 2024 outlook consists of:

• revenue of $9.60 billion (our previous outlook was $9.45 billion);
• non-IFRS operating margin* of 6.5% (our previous outlook was 6.3%);
• non-IFRS adjusted EPS* of $3.85 (our previous outlook was $3.62); and
• non-IFRS adjusted free cash flow* of $275 million (our previous outlook was $250 million).

2025 Annual Outlook

• Revenue of $10.40 billion;
• non-IFRS operating margin* of 6.7%;
• non-IFRS adjusted EPS* of $4.42; and
• non-IFRS adjusted free cash flow* of $325 million.

Our 2025 outlook assumes an annual non-IFRS adjusted effective tax rate* of approximately 20%.