Celestica Inc. · TSX:CLS
Celestica — Q3 2021 Earnings Presentation
23 slides from Celestica's earnings presentation, Oct 26, 2021
Slide 1: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results October 26, 2021 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 ‘Celestica”
Slide 4: YTY Non-IFRS Operating Margin Progression
YTY Non-IFRS Operating Margin1 Progression Non-IFRS Operating Margin1 vs Prior Year Quarter 4.2% 3.9% 3.9% 3.9% 3.6% 3.5% 3.4% 3.4% 2.9% 2.9% 2.9% 2.8% 2.5% 2.4% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Prior Year Quarter Non-IFRS Operating Margin Non-IFRS Operating Margin Q3 2021 was
Slide 5: Higher Lifecycle Solutions revenue concentration is enabling long term profitable growth
Higher Lifecycle Solutions revenue concentration is enabling long term profitable growth Lifecycle Solutions Lifecycle Solutions Revenue as % of Total 60% 51% 47% ATS HPS 39% 41% • Long program lifecycles • Extensive patent portfolio FY 17 FY 18 FY 19 FY 20 YTD 21 • Highly regulated • Product roadma
Slide 6: Q3 2021 Highlights
Q3 2021 Highlights $US Q3 2021 Comments Aggregate 5% YTY Decrease; (Aggregate 6% YTY Increase in non-Cisco revenues1) Revenue $1.47B 12% YTY Increase in ATS 14% YTY Decrease in CCS IFRS Net Earnings $35.2M Up $4.8M YTY IFRS Earnings per Share - diluted $0.28 Up 4 cents YTY Non-IFRS Operating Margin
Slide 7: ATS and CCS Segment Revenue and Profitability
ATS1 and CCS2 Segment Revenue and Profitability Q3 2020 Revenue 6 Q3 2021 Revenue 7 Year over 3Q21 Revenue $ Sequential Year ATS Up 5% Up 12% ATS ATS CCS Up 2% Down 14% 34% CCS 40% Non-Cisco CCS3 Up 3% Up 2% CCS 60% 66% Communications4 Down 4% Down 17% Enterprise5 Up 16% Down 7% Segment 3Q20 3Q21 In
Slide 8: Q3 2021 Highlights
Q3 2021 Highlights¹ B/(W) QTQ B/(W) YTY $US Millions (Except for per share amounts and %) Q3 2021 (vs. Q2 2021) (vs. Q3 2020) Revenue $1,467 $47 ($83) Non-Cisco2 $51 $78 IFRS Net Earnings $35.2 $8.9 $4.8 IFRS Earnings per Share - diluted $0.28 $0.07 $0.04 Non-IFRS Adjusted Gross Margin 8.8% 0.4% 0.7
Slide 9: Working Capital / Capex / Non-IFRS Free Cash Flow
Working Capital / Capex / Non-IFRS Free Cash Flow1 Q3 2021 ($US) Inventory turns decreased by 0.3x sequentially 4.1 inventory turns2 (Inventory up $181M sequentially and up $201M YTY) $16M Capex ~1% of Revenue $27.1M Free Cash Flow1 Achieved positive free cash flow for the 11th consecutive quarter C
Slide 10: Net Cash: $37M
Balance Sheet $US At September 30, 2021 Cash and cash equivalents $477M Revolver (excluding L/Cs) - Term Loans $440M Net Cash: $37M As of September 30, 2021, Celestica’s gross-debt to non-IFRS trailing twelve month adjusted EBITDA ratio (non-IFRS debt leverage ratio) was 1.4x. See the Appendix for a
Slide 11: Q4 2021 Outlook
Q4 2021 Outlook1 $US Revenue $1.425B - $1.575B 4.5% Non-IFRS Operating Margin at the mid-point of revenue and non-IFRS adjusted EPS guidance ranges Non-IFRS Adjusted EPS – diluted $0.35 - $0.41 Non-IFRS Adjusted SG&A $62M - $64M Q4 2021 Non-IFRS Tax Rate Estimate Non-IFRS Adjusted Effective Tax Rate
Slide 12: Q4 2021 End Market Revenue Outlook
Q4 2021 End Market Revenue Outlook Year over Year Revenue % Change ATS1 Increase low twenties Communications Increase low single-digit Enterprise2 Decrease low single-digit 1 ATS consists of A&D, Industrial, Energy, HealthTech, and Capital Equipment. Guidance assumes consummation of the acquisition
Slide 13: Concluding Remarks
Concluding Remarks ‘Celestica”
Slide 14: ee . Celestica”
ee . Celestica” a on
Slide 15: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results October 26, 2021
Slide 16: Appendix
Appendix oy ‘Celestica”
Slide 17: 2022 Outlook
2022 Outlook1 $US Revenue outlook At least $6.3B Non-IFRS operating margin range 4.0%-5.0% Non-IFRS adjusted EPS growth rate At least 20% (compared to 2021) 1 Outlook assumes consummation of the acquisition of PCI Private Limited in November 2021, and that the severity of supply chain constraints ex
Slide 18: Segment Income and Margin
Segment Income and Margin1 * *Refers to notes to our Q3 2021 unaudited interim condensed consolidated financial statements (Q3 2021 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 administra
Slide 19: IFRS to non-IFRS Reconciliation
IFRS to non-IFRS Reconciliation* * The footnotes to this reconciliation table are set forth on slide 22 ** Excluding ordinary course letters of credit. 19
Slide 20: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* 1Q2020 2Q2020 3Q 2020 4Q 2020 1Q2021 2Q2021 3Q2021 YTD 2021 FY 2020 IFRS Net earnings (loss) $ (3.2) $ 13.3 $ 30.4 $ 20.1 $ 10.5 $ 26.3 $ 35.2 $ 72.0 $ 60.6 As a percentage of revenue (0.2%) 0.9% 2.0% 1.4% 0.9% 1.9% 2.4% 1.7% 1.1% Non-IFRS adjusted net Empl
Slide 21: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* Non-IFRS operating margin (non-IFRS operating earnings as a percentage of revenue) reconciliation to IFRS earnings (loss) before income taxes as a percentage of revenue 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q2021 2Q2021 3Q2021 IFR
Slide 22: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* (1) IFRS earnings (loss) per diluted share is calculated by dividing IFRS net earnings (loss) by the number of diluted weighted average shares outstanding (DWAS). In order to calculate IFRS loss per diluted share for Q1 2020, we used a DWAS of 129.0 million
Slide 23: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results October 26, 2021