Celestica Announces First Quarter 2023 Financial Results

2023 Revenue Outlook Raised

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

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 March 31, 2023 (Q1 2023)^†.

“Building on last year’s strong performance, Celestica is off to a solid start in 2023,” said Rob Mionis, President and CEO, Celestica. “Our first quarter revenue exceeded the mid-point of our guidance range and non-IFRS adjusted EPS* was at the high end of our guidance range.”

“We are encouraged by the strength and resiliency of our financial results given the challenging macro environment. We believe that we are well positioned for growth, with the ability to innovate and meet the evolving needs of our customers. As a result, we are pleased to raise our 2023 revenue outlook and tighten both our 2023 non-IFRS operating margin* and non-IFRS adjusted EPS* outlooks towards the high end of their ranges. We remain on track to achieve our long-term financial objectives.”

Q1 2023 Highlights

• Key measures:

• Revenue: $1.84 billion, increased 17% compared to $1.57 billion for the first quarter of 2022 (Q1 2022).
• Non-IFRS operating margin*: 5.2%, compared to 4.4% for Q1 2022.
• ATS segment revenue: increased 14% compared to Q1 2022; ATS segment margin was 4.4%, compared to 5.0% for Q1 2022.
• CCS segment revenue: increased 20% compared to Q1 2022; CCS segment margin was 5.8%, compared to 3.9% for Q1 2022.
• Adjusted EPS (non-IFRS)*: $0.47, compared to $0.39 for Q1 2022.
• Adjusted return on invested capital (ROIC) (non-IFRS)*: 17.9%, compared to 13.9% for Q1 2022.
• Adjusted free cash flow (non-IFRS)*: $9.2 million, compared to $0.5 million for Q1 2022.

• IFRS financial measures (directly comparable to non-IFRS measures above):

• Earnings from operations as a percentage of revenue: 3.2%, compared to 2.6% for Q1 2022.
• EPS: $0.20, compared to $0.17 for Q1 2022.
• Return on invested capital (IFRS ROIC): 11.2%, compared to 8.1% for Q1 2022.
• Cash provided by operations: $72.3 million, compared to $35.3 million for Q1 2022.
• Repurchased 0.8 million subordinate voting shares (SVS) for cancellation for $10.6 million under our normal course issuer bid.

† 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 March 31, 2023 unaudited interim condensed consolidated financial statements (Q1 2023 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: (i) modifications implemented during 2022 to: (x) the IFRS financial measures to which non-IFRS operating earnings and non-IFRS operating margin are reconciled; and (y) the IFRS financial measure on which the measure we refer to as IFRS ROIC is based; and (ii) a modification commencing in Q1 2023 to the calculation of specified non-IFRS financial measures to account for a newly-applicable exclusion related to our total return swap. Prior period reconciliations and calculations included herein reflect the current presentation. 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.