Mr. Rob Mionis reports

CELESTICA ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS

Celestica Inc. has released financial results for the quarter ended March 31, 2024. (All amounts are in U.S. dollars. Per-share information is based on diluted shares outstanding unless otherwise noted.)

"We are pleased with our strong start to the year, delivering revenue growth of 20 per cent in [first quarter] 2024 compared to the prior-year period, and continued non-[international financial reporting standard] operating margin expansion. Our solid performance was reflected in revenue and non-IFRS adjusted [earnings per share] each in excess of the high end of our guidance ranges," said Rob Mionis, president and chief executive officer, Celestica. "We continue to see healthy demand across a number of our major customers, which provides us with the confidence to raise our full-year 2024 outlook. We continue to stay focused on solid execution for our customers and delivering on our strategic priorities and financial targets."

Q1 2024 highlights:

• Key measures:
  • Revenue: $2.21-billion, increased 20 per cent compared with $1.84-billion for the first quarter of 2023;
  • Non-IFRS operating margin: 6.2 per cent, compared with 5.2 per cent for Q1 2023;
  • ATS segment revenue decreased 3 per cent compared with Q1 2023; ATS segment margin was 4.7 per cent compared with 4.4 per cent for Q1 2023;
  • CCS segment revenue increased 38 per cent compared with Q1 2023; CCS segment margin was 7.0 per cent compared with 5.8 per cent for Q1 2023;
  • Adjusted earnings per share (non-IFRS): 86 cents, compared with 47 cents for Q1 2023;
  • Adjusted return on invested capital (non-IFRS): 24.8 per cent, compared with 17.9 per cent for Q1 2023;
  • Adjusted free cash flow (non-IFRS): $65.2-million, compared with $9.2-million for Q1 2023;
• Most directly comparable IFRS measures to non-IFRS measures above:
  • Earnings from operations as a percentage of revenue: 6.0 per cent compared with 3.2 per cent for Q1 2023;
  • EPS: 85 cents compared with 20 cents for Q1 2023;
  • Return on invested capital: 23.8 per cent compared with 11.2 per cent for Q1 2023;
  • Cash provided by operations: $131.1-million compared with $72.3-million for Q1 2023;
• Repurchased 500,000 subordinate voting shares for cancellation for $16.5-million.

Celestica has two operating and reportable segments: advanced technology solutions and connectivity and cloud solutions. Its ATS segment consists of its ATS end market and is composed of its aerospace and defence (A&D), industrial, healthtech and capital equipment businesses. Its CCS segment consists of its communications and enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See Note 3 to its March 31, 2024, unaudited interim condensed consolidated financial statements for further detail.

For second quarter 2024, it expects a negative 17-cent- to 23-cent-per-share (pretax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software) and restructuring charges.

For Q2 2024, it also expects a non-IFRS adjusted effective tax rate of approximately 20 per cent, without accounting for foreign exchange impacts or unanticipated tax settlements. This rate does assume that its income will be subject to Pillar Two global minimum tax as currently proposed, as legislation that has been introduced in Canada may become applicable before the end of Q2 2024 with possible retroactive impact to Jan. 1, 2024. If this legislation is not substantively enacted in Q2 2024, it expects its Q2 2024 non-IFRS adjusted EPS guidance range to shift upward by approximately five cents and its non-IFRS adjusted effective tax rate for the quarter to be approximately 15 per cent. Its Q2 2024 guidance also assumes consummation in May, 2024, of its anticipated acquisition of NCS Global Services LLC.

2024 annual outlook update

Building on its strong performance in Q1 2024, the company is updating its 2024 outlook to the following:

• Revenue of $9.1-billion (its previous outlook was $8.5-billion or more);
• Non-IFRS operating margin of 6.1 per cent (its previous outlook was between 5.5 per cent and 6.0 per cent);
• Non-IFRS adjusted EPS of $3.30 (its previous outlook was $2.70 or more);
• Non-IFRS adjusted free cash flow of $250-million (its previous outlook was $200-million or more).

The company's 2024 annual outlook assumes that its income will be subject to Pillar Two global minimum tax as currently proposed, as legislation that has been introduced in Canada is expected to be enacted during 2024 and apply retroactively to Jan. 1, 2024. Its 2024 annual outlook also assumes consummation in May, 2024, of its anticipated acquisition of NCS Global Services.

For the second through fourth quarters of 2024, it 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).

Acquisition agreement

In April, 2024, the company entered into a definitive agreement to acquire NCS Global Services, a United States-based information technology infrastructure and asset management business, for $36-million (and a possible earnout payment should certain postclosing financial conditions be met). The transaction is expected to close in May, 2024, or earlier, subject to satisfaction of customary closing conditions.

Q1 2024 webcast and 2024 annual and special shareholders meeting/webcast

Management will host its Q1 2024 results conference call on April 25, 2024, at 8 a.m. Eastern Daylight Time. The webcast will be available at the Celestica website. Celestica's 2024 annual and special meeting of shareholders will be held on April 25, 2024, at 9:30 a.m. EDT. As previously announced, the meeting will be held in a hybrid format. Celestica welcomes the participation of shareholders who will be able to attend the meeting in person at Celestica's head office at 5140 Yonge St., Suite 1900, Toronto, Ont. Shareholders may also attend and participate in the meeting virtually on a live audio-only webcast. On-line access to the meeting will begin at 8:30 a.m. EDT.

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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