Celestica Announces Third Quarter 2021 Financial Results

TORONTO — Celestica Inc., a leader in design, manufacturing and supply chain solutions for the world’s most innovative companies, announced financial results for the quarter ended September 30, 2021 (Q3 2021)^†.

“Celestica’s strong third quarter performance reflects our consistent execution and the resiliency of our business, as we continue to successfully navigate challenges related to the pandemic and the global supply chain. Our non-IFRS operating margin* of 4.2% marks our seventh consecutive quarter of year-to-year improvement, and represents the highest operating margin in Celestica’s history as a publicly-traded company,” said Rob Mionis, President and CEO, Celestica. “Our performance in recent quarters serves as a validation of our long-term strategy and transformation actions in the face of a challenging and constantly evolving business environment.”

“The fourth quarter of 2021 serves as an important inflection point in our business, as our focus now turns squarely to growth and maintaining the momentum we’ve built in recent quarters. We remain on track to complete our acquisition of PCI in November. Achievement of our revenue guidance for the fourth quarter of 2021 will represent a return to top-line growth, and achievement of our non-IFRS operating margin* mid-point guidance of 4.5% will set a new high-water mark for our business. As we approach the final months of 2021, we believe we are well positioned to continue building on our success, and we reaffirm our strong outlook for 2022.”

Q3 2021 Highlights

• Revenue: $1.47 billion, decreased 5% compared to $1.55 billion for the third quarter of 2020 (Q3 2020);
• Revenue of our non-Cisco business** increased 6% compared to Q3 2020.
• Operating margin (non-IFRS)*: 4.2%, compared to 3.9% for Q3 2020.
• ATS segment revenue: increased 12% compared to Q3 2020; ATS segment margin was 4.3%, compared to 3.7% for Q3 2020.
• CCS segment revenue: decreased 14% compared to Q3 2020; CCS segment margin was 4.1%, compared to 4.0% for Q3 2020;
• Non-Cisco CCS revenue*** increased 2% compared to Q3 2020.
• Lifecycle Solutions portfolio revenue (combined ATS segment and HPS revenue): increased 15% compared to Q3 2020, and represented 60% of total revenue, compared to 50% of total revenue for Q3 2020.
• IFRS earnings per share (EPS): $0.28, compared to $0.24 per share for Q3 2020.
• Adjusted EPS (non-IFRS)*: $0.35, compared to $0.32 for Q3 2020.
• Adjusted return on invested capital (non-IFRS)*: 15.2%, flat compared to Q3 2020.
• Free cash flow (non-IFRS)*: $27.1 million, compared to $15.8 million for Q3 2020.
• Repurchased and cancelled 2.1 million subordinate voting shares for $17.2 million under our normal course issuer bid (NCIB).

Q4 2021 Guidance

Our fourth quarter of 2021 (Q4 2021) guidance assumes consummation of the acquisition of PCI Private Limited (PCI) (described below) in November 2021, and incorporates our estimated impact of supply chain constraints.

• IFRS revenue: $1.425 billion to $1.575 billion
• Operating margin (non-IFRS)*: 4.5% at the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges
• Adjusted SG&A (non-IFRS)*: $62 million to $64 million
• Adjusted EPS (non-IFRS)*: $0.35 to $0.41

For Q4 2021, we expect a negative $0.11 to $0.17 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges, and an non-IFRS adjusted effective tax rate of approximately 19% (which does not account for foreign exchange impacts or any unanticipated tax settlements).