Celestica Inc. · TSX:CLS
Celestica — Q2 2024 Earnings Presentation
25 slides from Celestica's earnings presentation, Jul 25, 2024
Slide 1: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results July 25, 2024 1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward- Looking Statements This presentation contains forward-looking statements, including, without limitation, those related to our future growth; trends in the electronics manufacturing services (EMS) industry and our segments (and/or their constituent businesses), and
Slide 3: CEO Remarks
CEO Remarks 3
Slide 4: Q2 2024 Highlights
Q2 2024 Highlights $US Q2 2024 Comments Aggregate 23% YTY Increase; Revenue $2.39B 11% YTY Decrease in ATS 51% YTY Increase in CCS Non-IFRS Operating Margin1 6.3% Up 80 bps YTY Non-IFRS Adjusted EPS – diluted1 $0.91 Up 36 cents YTY IFRS financial measures Comments (Most directly comparable to non-IF
Slide 5: ATS and CCS Segment Revenue and Profitability
ATS1 and CCS2 Segment Revenue and Profitability Q2 2023 Revenue 4 Q2 2024 Revenue 5 Q2 2024 Year over Sequential Revenue $ Year ATS Flat Down 11% ATS ATS 32% CCS Up 13% Up 51% CCS 45% 55% CCS Communications Up 22% Up 64% 68% Enterprise3 Up 2% Up 37% Segment Q2 2023 Q2 2024 Income6 $ Q2 2023 % of Tot
Slide 6: Q2 2024 Highlights
Q2 2024 Highlights¹ $US Millions (Except for per share amounts and %) Q2 2024 B/(W) QTQ (vs. Q1 2024) B/(W) YTY (vs. Q2 2023) Revenue $2,392 $183 $453 Non-IFRS Adjusted Gross Margin 10.6% 0.4% 0.9% Non-IFRS Adjusted SG&A $82.5 ($12.4) ($16.6) Non-IFRS Operating Earnings (adjusted EBIAT)2 $151.8 $14.
Slide 7: Working Capital
Working Capital $US Millions Q2 2024 B/(W) QTQ (vs. Q1 2024) B/(W) YTY (vs. Q2 2023) Inventory Turns1 4.5x 0.6x 1.5x Inventory $1,853 $106 $493 Customer Cash Deposits for Inventory2 $576 ($143) ($233) Cash Cycle Days Q2 2024 Q1 2024 Q2 2023 Days in A/R3 71 75 60 Days in Inventory3 81 94 123 Days in
Slide 8: Non-IFRS Adjusted Free Cash Flow
Non-IFRS Adjusted Free Cash Flow1 Non-IFRS Adjusted Free Cash Flow1 Cash Provided by Operations ($M) 139 130 131 123 101 88 84 74 72 67 65 63 43 34 7 9 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 QTQ (vs. Q1 2024) YTY (vs. Q2 2023) ($US) Q2 2024 Increase/(Decrease) Increase/(Decrease) Capex $37M
Slide 9: Balance Sheet
Balance Sheet Balance Sheet (as of June 30, 2024) Cash and cash equivalents $434M Revolver (excluding L/Cs) - Term Loans $750M Net Debt $316M Non-IFRS Adjusted TTM Debt Leverage Ratio1,2 1.1x IFRS TTM Debt Leverage Ratio1 1.5x Total Liquidity3 ~$1.2B 1 Non-IFRS adjusted TTM debt leverage ratio is de
Slide 10: Q3 2024 Guidance
Q3 2024 Guidance1,2 $US Revenue $2.325B - $2.475B 6.3% Non-IFRS Operating Margin at the mid-point of revenue and non-IFRS adjusted EPS guidance ranges Non-IFRS Adjusted EPS – diluted $0.86 - $0.96 Non-IFRS Adjusted SG&A $73M - $75M Q3 2024 Non-IFRS Tax Rate Estimate1,2 Non-IFRS Adjusted Effective Ta
Slide 11: Q3 2024 End Market Revenue Outlook
Q3 2024 End Market Revenue Outlook1 Year-over-Year Revenue % Change ATS2 Decrease low single-digits Communications Increase low-thirties Enterprise3 Increase mid-thirties 1 Outlook is effective on the date provided. 2 ATS consists of A&D, Industrial, HealthTech, and Capital Equipment. 3 Enterprise c
Slide 12: 2024 Annual Outlook
2024 Annual Outlook1 $US 2024 Outlook Previous 2024 Outlook Revenue outlook $9.45B $9.10B Non-IFRS operating margin 6.3% 6.1% Non-IFRS Adjusted EPS2 $3.62 $3.30 Non-IFRS adjusted free cash flow $250M $250M 1 We do not provide reconciliations for forward-looking non-IFRS financial measures as we are
Slide 13: Business Outlook
Business Outlook1 Advanced Technology Solutions Connectivity & Cloud Solutions Mid single-digit percentage revenue decline anticipated in Mid-thirties percentage revenue growth anticipated in 2024 2024 compared to 2023. Anticipate 2H 2024 sequentially compared to 2023. higher than 1H 2024 Industrial
Slide 14: Concluding Remarks
Concluding Remarks ‘Celestica”
Slide 15: ~ Celestica-
~ Celestica- a ~~
Slide 16: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results July 25, 2024
Slide 17: Appendix
Appendix oy ‘Celestica®
Slide 18: Segment Income and Margin
Segment Income and Margin1 * *Refers to notes to our June 30, 2024 unaudited interim condensed consolidated financial statements (Q2 2024 Interim Financial Statements) 1 Segment income is defined as a segment’s net revenue less its cost of sales and its allocable portion of selling, general and admi
Slide 19: Non-IFRS Supplementary Information
Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with International Financial Reporting Standards (IFRS), Celestica provides supplementary non-IFRS financial measures (including ratios based on non-IFRS financial measures) to consider in evaluatin
Slide 20: Non-IFRS Supplementary Information…continued
Non-IFRS Supplementary Information…continued The economic substance of the exclusions described above (where applicable to the periods presented) and management’s rationale for excluding them from non-IFRS financial measures is provided below: Employee SBC expense, which represents the estimated fai
Slide 21: IFRS to non-IFRS Reconciliation
IFRS to non-IFRS Reconciliation* Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 1H 2024 FY 2023 IFRS Revenue $ 1,923.3 $ 2,042.6 $ 1,837.8 $ 1,939.4 $ 2,043.3 $ 2,140.5 $ 2,208.9 $ 2,391.9 $ 4,600.8 $ 7,961.0 Net earnings 45.7 42.4 24.7 55.5 80.2 84.2 101.7 99.6 201.3 244.6 Earnings
Slide 22: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 1H 2024 FY 2023 IFRS Net earnings $ 45.7 $ 42.4 $ 24.7 $ 55.5 $ 80.2 $ 84.2 $ 101.7 $ 99.6 $ 201.3 $ 244.6 As a percentage of revenue 2.4% 2.1% 1.3% 2.9% 3.9% 3.9% 4.6% 4.2% 4.4% 3.1% Employee
Slide 23: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* (1) Management uses non-IFRS operating earnings (adjusted EBIAT) as a measure to assess performance related to our core operations. Non-IFRS operating earnings (adjusted EBIAT) is defined as earnings from operations before Other Charges (Recoveries) (define
Slide 24: Non-IFRS Supplementary Information…continued
Non-IFRS Supplementary Information…continued The following table sets forth a reconciliation of our non-IFRS adjusted tax expense and our non-IFRS adjusted effective tax rate to our IFRS tax expense and IFRS effective tax rate for the periods indicated, in each case determined by excluding the tax b
Slide 25: Second Quarter 2024 Financial Results
Second Quarter 2024 Financial Results July 25, 2024