Mr. Rob Mionis reports

CELESTICA ANNOUNCES FOURTH QUARTER 2023 FINANCIAL RESULTS

Celestica Inc. has released financial results for the quarter ended Dec. 31, 2023. (All amounts are in U.S. dollars. Per-share information is based on diluted shares outstanding unless otherwise noted.)

"We are pleased with our solid fourth quarter results, delivering non-[international financial reporting standard] operating margin of 6.0 per cent and non-IFRS adjusted [earnings per share] of 76 cents. We had a strong finish to 2023 and achieved 10-per-cent revenue growth for the full year compared to 2022 while our non-IFRS adjusted EPS of $2.43 and non-IFRS operating margin of 5.6 per cent were each the highest in our company's history," said Rob Mionis, president and chief executive officer, Celestica. "The strong momentum we had in 2023 is continuing into 2024, and we remain confident in our long-term strategy."

Fourth quarter 2023 highlights:

• Key measures:
  • Revenue: $2.14-billion, increased 5 per cent compared with $2.04-billion for the fourth quarter of 2022;
  • Non-IFRS operating margin: 6.0 per cent compared with 5.3 per cent for Q4 2022;
  • ATS segment revenue decreased 2 per cent compared with Q4 2022; ATS segment margin was 4.7 per cent compared with 4.4 per cent for Q4 2022;
  • CCS segment revenue increased 10 per cent compared with Q4 2022; CCS segment margin was 6.7 per cent compared with 5.9 per cent for Q4 2022;
  • Adjusted earnings per share (non-IFRS): 76 cents compared with 56 cents for Q4 2022;
  • Adjusted return on invested capital (non-IFRS): 23.3 per cent compared with 20.7 per cent for Q4 2022;
  • Adjusted free cash flow (non-IFRS): $83.8-million, compared with $42.6-million for Q4 2022;
• Most directly comparable IFRS measures to non-IFRS measures above:
  • Earnings from operations as a percentage of revenue: 5.5 per cent compared with 4.0 per cent for Q4 2022;
  • EPS: 70 cents compared with 35 cents for Q4 2022;
  • Return on invested capital: 21.6 per cent compared with 15.7 per cent for Q4 2022;
  • Cash provided by operations: $138.8-million compared with $101.3-million for Q4 2022;
• Repurchased 400,000 subordinate voting shares for cancellation for $10.0-million.

For first quarter 2024, the company expects a negative-26-cent-to-32-cent-per-share (pretax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software) and restructuring charges.

For Q1 2024, it also expects a non-IFRS adjusted effective tax rate of approximately 20 per cent (which does not account for foreign exchange impacts or unanticipated tax settlements), assuming that its income will be subject to Pillar Two global minimum tax, as legislation that has been introduced in Canada may become applicable before the end of Q1 2024 with retroactive impact to Jan. 1, 2024. If this legislation is not substantively enacted in Q1 2024, it expects that its non-IFRS adjusted effective tax rate for the quarter would be approximately 15 per cent.

2024 annual outlook update

It is updating the 2024 annual non-IFRS adjusted free cash flow outlook provided in its November, 2023, press release from $175-million, or more, to $200-million, or more. Other 2024 annual outlook items provided therein remain unchanged.

Acceptance of normal course issuer bid

On Dec. 12, 2023, the Toronto Stock Exchange accepted its notice to launch a new NCIB. The 2023 NCIB allows it to repurchase, at its discretion, from Dec. 14, 2023, until the earlier of Dec. 13, 2024, or the completion of purchases thereunder, up to approximately 11.8 million SVS in the open market, or as otherwise permitted, subject to the normal terms and limitations of such bids. See Note 8 to the fourth quarter 2023 interim financial statements.

Q4 2023 webcast

Management will host its Q4 2023 results conference call on Jan. 30, 2024, at 8 a.m. Eastern Standard Time. The webcast can be viewed at the Celestica website.

About Celestica Inc.

Celestica enables the world's best brands. Through its recognized customer-centric approach, it partners with leading companies in aerospace and defence, communications, enterprise, healthtech, industrial, and capital equipment to deliver solutions for their most complex challenges. As a leader in design, manufacturing, hardware platform and supply chain solutions, Celestica brings global expertise and insight at every stage of product development -- from the drawing board to full-scale production and aftermarket services. With talented teams across North America, Europe and Asia, it imagines, develops and delivers a better future with its customers.

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