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Celestica Inc., a leader in design, manufacturing, hardware platform and supply chain solutions for the world's most innovative companies, announced financial results for the quarter ended March 31, 2023 (Q1 2023).
"Building on last year’s strong performance, Celestica is off to a solid start in 2023,” said Rob Mionis, President and CEO, Celestica. “Our first quarter revenue exceeded the mid-point of our guidance range and non-IFRS adjusted EPS* was at the high end of our guidance range.”
“We are encouraged by the strength and resiliency of our financial results given the challenging macro environment. We believe that we are well positioned for growth, with the ability to innovate and meet the evolving needs of our customers. As a result, we are pleased to raise our 2023 revenue outlook and tighten both our 2023 non-IFRS operating margin* and non-IFRS adjusted EPS* outlooks towards the high end of their ranges. We remain on track to achieve our long-term financial objectives."
Q1 2023 Highlights
• Key measures:
- Revenue: $1.84 billion, increased 17% compared to $1.57 billion for the first quarter of 2022 (Q1 2022).
- Non-IFRS operating margin*: 5.2%, compared to 4.4% for Q1 2022.
- ATS segment revenue: increased 14% compared to Q1 2022; ATS segment margin was 4.4%, compared to 5.0% for Q1 2022.
- CCS segment revenue: increased 20% compared to Q1 2022; CCS segment margin was 5.8%, compared to 3.9% for Q1 2022.
- Adjusted EPS (non-IFRS)*: $0.47, compared to $0.39 for Q1 2022.
- Adjusted return on invested capital (ROIC) (non-IFRS)*: 17.9%, compared to 13.9% for Q1 2022.
- Adjusted free cash flow (non-IFRS)*: $9.2 million, compared to $0.5 million for Q1 2022.
• IFRS financial measures (directly comparable to non-IFRS measures above):
- Earnings from operations as a percentage of revenue: 3.2%, compared to 2.6% for Q1 2022.
- EPS: $0.20, compared to $0.17 for Q1 2022.
- Return on invested capital (IFRS ROIC): 11.2%, compared to 8.1% for Q1 2022.
- Cash provided by operations: $72.3 million, compared to $35.3 million for Q1 2022.
- Repurchased 0.8 million subordinate voting shares (SVS) for cancellation for $10.6 million under our normal course issuer bid.
For Q2 2023, we expect a negative $0.19 to $0.25 per share (pre-tax) 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; and a non-IFRS adjusted effective tax rate* of approximately 21% (which does not account for foreign exchange impacts or unanticipated tax settlements).
2023 Outlook Update
Based on our strong performance in Q1 2023 and our current and expected levels of demand, our 2023 outlook currently includes:
- revenue of at least $7.6 billion (raised from our previous outlook of at least $7.5 billion);
- non-IFRS operating margin* of between 5.0% and 5.5% (tightened from our previous outlook of between 4.5% to 5.5%); and
- non-IFRS adjusted EPS* of between $2.00 and $2.05 (tightened from our previous outlook of between $1.95 and $2.05).
Achievement of our current 2023 revenue outlook and the mid-point of our current 2023 non-IFRS adjusted EPS* outlook would represent an at least 5% revenue growth rate and a 7% non-IFRS adjusted EPS* growth rate from 2022.
Although we have incorporated the anticipated impact of supply chain constraints into the foregoing financial guidance and outlook to the best of our ability, their adverse impact (in terms of duration and severity) cannot be estimated with certainly, and may be materially in excess of our expectations.
