Celestica Inc. · TSX:CLS
Celestica — Q4 2021 Earnings Presentation
25 slides from Celestica's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021 Financial Results
Fourth Quarter 2021 Financial Results January 27, 2022 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: 2021 Performance Summary
2021 Performance Summary $US 2021 vs 2020 Revenue $5.6B -2% Hardware Platform Solutions (HPS) Revenue $1.2B +34% Operating Margin (non-IFRS)1 4.2% +70 bps Adjusted EPS (non-IFRS) 1 $1.30 +33% Outstanding shares 124.7M -3% Key Events and Performance Goals Met • Acquired PCI Private Limited in Novembe
Slide 5: Q4 2021 Highlights
Q4 2021 Highlights $US Q4 2021 Comments Aggregate 9% YTY Increase; Revenue $1.51B 23% YTY Increase in ATS 1% YTY Increase in CCS Non-IFRS Operating Margin1 4.9% Up 1.3% YTY Non-IFRS Adjusted EPS – diluted1 $0.44 Up 18 cents YTY IFRS financial measures (Directly comparable to non-IFRS financial measu
Slide 6: ATS and CCS Segment Revenue and Profitability
ATS1 and CCS2 Segment Revenue and Profitability Q4 2020 Revenue 4 Q4 2021 Revenue 5 Year over 4Q21 Revenue $ Sequential Year ATS Up 8% Up 23% ATS ATS CCS Flat Up 1% 37% CCS 42% CCS Communications Up 4% Up 1% 58% 63% Enterprise3 Down 7% Flat Segment 4Q20 4Q21 Income6 $ Q4 2020 % of Total Segment Inco
Slide 7: Q4 2021 Highlights
Q4 2021 Highlights¹ $US Millions (Except for per share amounts and %) Q4 2021 B/(W) QTQ (vs. Q3 2021) B/(W) YTY (vs. Q4 2020) Revenue $1,512 $45 $125 Non-IFRS Adjusted Gross Margin 9.6% 0.8% 1.2% Non-IFRS Adjusted SG&A $59.9 ($3.4) ($3.4) Non-IFRS Adjusted Operating Earnings $74.3 $13.0 $24.3 Non-IF
Slide 8: Working Capital / Capex / Non-IFRS Free Cash Flow
Working Capital / Capex / Non-IFRS Free Cash Flow1 Q4 2021 ($US) Inventory turns decreased by 0.6x sequentially 3.5 inventory turns2 (Inventory up $606M YTY and up $291M sequentially) $14.4M Capex ~1% of Revenue $35.6M Non-IFRS Free Cash Flow1 Achieved positive free cash flow for the 12th consecutiv
Slide 9: Balance Sheet: Net Debt $266M
Balance Sheet $US At December 31, 2021 Cash and cash equivalents $394M Revolver (excluding L/Cs) - Term Loans $660M Net Debt: $266M As of December 31, 2021, Celestica’s (i) gross debt to trailing twelve month (TTM) earnings before income taxes ratio (IFRS debt leverage ratio) was 4.9x; and (ii) gros
Slide 10: Q1 2022 Outlook
Q1 2022 Outlook1 $US Revenue $1.40B - $1.55B 4.2% Non-IFRS Operating Margin at the mid-point of revenue and non-IFRS adjusted EPS guidance ranges Non-IFRS Adjusted EPS – diluted $0.31 - $0.37 Non-IFRS Adjusted SG&A $57M - $59M Q1 2022 Non-IFRS Tax Rate Estimate1 Non-IFRS Adjusted Effective Tax Rate
Slide 11: Q1 2022 End Market Revenue Outlook
Q1 2022 End Market Revenue Outlook Year over Year Revenue % Change ATS1 Increase low twenties Communications Increase high-teens Enterprise2 Increase mid-teens 1 ATS consists of A&D, Industrial, Energy, HealthTech, and Capital Equipment. 2 Enterprise consists of Servers and Storage. 11
Slide 12: 2022 Outlook
2022 Outlook1 $US Revenue outlook At least $6.3B Non-IFRS operating margin range 4.0%-5.0% Lifecycle Solutions organic growth rate At least 10% (compared to 2021) 1 Outlook assumes that the severity of supply chain constraints is not significantly worse than expected. Outlook is effective on the dat
Slide 13: Concluding Remarks
Concluding Remarks ‘Celestica”
Slide 14: Higher Lifecycle Solutions revenue concentration is enabling long term profitable growth
Higher Lifecycle Solutions revenue (non-IFRS)1 concentration is enabling long term profitable growth Lifecycle Solutions Lifecycle Solutions Revenue (non-IFRS) 1 as % of Total 61% 51% 47% 41% 39% ATS HPS 41% 36% 39% 33% 32% 20% 15% 7% 8% 8% FY 17 FY 18 FY 19 FY 20 FY 21 • Long program lifecycles • E
Slide 15: Concluding Remarks
Concluding Remarks ‘Celestica”
Slide 16: ee . Celestica”
ee . Celestica” a on
Slide 17: Fourth Quarter 2021 Financial Results
Fourth Quarter 2021 Financial Results January 27, 2022
Slide 18: Appendix
Appendix oy ‘Celestica”
Slide 19: Segment Income and Margin
Segment Income and Margin1 * *Refers to notes to our Q4 2021 unaudited interim condensed consolidated financial statements (Q4 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 20: IFRS to non-IFRS Reconciliation
IFRS to non-IFRS Reconciliation* 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q2021 2Q2021 3Q2021 4Q2021 FY 2020 FY 2021 IFRS Revenue $ 1,318.6 $ 1,492.4 $ 1,550.5 $ 1,386.6 $ 1,234.9 $ 1,420.3 $ 1,467.4 $ 1,512.1 $ 5,748.1 $ 5,634.7 Net earnings (loss) (3.2) 13.3 30.4 20.1 10.5 26.3 35.2 31.9 60.6 103.9 Earnin
Slide 21: IFRS to non-IFRS Reconciliation…continued
IFRS to non-IFRS Reconciliation…continued* 1Q2020 2Q2020 3Q 2020 4Q 2020 1Q2021 2Q2021 3Q2021 4Q2021 FY 2020 FY 2021 IFRS Net earnings (loss) $ (3.2) $ 13.3 $ 30.4 $ 20.1 $ 10.5 $ 26.3 $ 35.2 $ 31.9 $ 60.6 $ 103.9 As a percentage of revenue (0.2%) 0.9% 2.0% 1.4% 0.9% 1.9% 2.4% 2.1% 1.1% 1.8% Non-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: Non-IFRS Supplementary Information
Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS financial measures to consider in evaluating the company’s operating performance. Management uses adjusted net earnings and other non-IFRS financ
Slide 24: Non-IFRS Supplementary Information…continued
Non-IFRS Supplementary Information…continued Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe t
Slide 25: Fourth Quarter 2021 Financial Results
Fourth Quarter 2021 Financial Results January 27, 2022