CLS.TO - Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Celestica Q4 2022 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, January 26, 2023. I would now like to turn the conference over to Craig Oberg. Please go ahead.

Craig Oberg

Good morning, and thank you for joining us on Celestica's Fourth Quarter 2022 Earnings Conference Call.

On the call today are Rob Mionis, President and Chief Executive Officer and Mandeep Chawla, Chief Financial Officer.

this of will the during within forward-looking reminder, meanings the U.S. a call, make we statements As Private Securities management's forecasts from Litigation risks, actual Canadian such and securities outcomes Reform in which or uncertainties Act of forward-looking assumptions, to that statements. are projections XXXX and statements and other expressed based could subject results conclusions, on are current factors forecasts laws. Such expectations, to and cause applicable materially differ

except Report Annual further required and identification the assume forward-looking information discussion statements on can which as such by as and sec.gov For We accessed yesterday's at cautionary statement, and including most forward-looking recent no update concerning other as public factors please filings, release, to assumptions sedar.com. to law. and regarding refer therein, Form XX-F statements, obligation be our well of forward-looking any press note

to measures revenue adjusted not specifically of that designated as and adjusted cycle not financial not a IFRS These be or non-IFRS use are under under based report margin, information GAAP gross any or that other whether for do under QX during including which financial public and non-IFRS In have prescribed Relations adjusted Unless measures, shares financial flow, financial including to debt measures call, you to or financial foregoing by leverage addition, are during on financial free the effective operating share reconciliation adjusted diluted most based measures, yesterday's references ratio, life SG&A comparable IFRS our this should dollars trailing presented and share adjusted this to all more of financial to EBITDA measures, margin, EPS, similar available measures will refer to the earnings specified, references non-IFRS comparable measures or other non-IFRS press tax rate. Listeners expense, the invested certain adjusted XX-month directly release who dollars at standardized statements. measures non-IFRS on our be XXXX otherwise adjusted of cash on is call any presentation, capital non-IFRS U.S. Investor information financial return various similar from and tab on outstanding. solutions per and operating may per cautioned refer and to call report earnings describe these to adjusted IFRS ratios meanings ROIC, non-IFRS metrics. We we non-IFRS about this consisting U.S. denote companies to historical adjusted measures gross measures financial non-GAAP by such. celestica.com

Let me now turn the call over to Rob.

Robert Mionis

Craig, you, you a the drive solid morning, us macroenvironment. joining and as had strong performance challenges Thank good quarter Celestica presented on we and continue fourth thank today's continuing call. by to everyone, despite for

$X.XX billion $X.XX both high revenue of above adjusted EPS Our fourth of ranges. of the end quarter were non-IFRS and our guidance

fourth highest milestones. extraordinary In non-IFRS important our were number a non-IFRS for company's margin operating year and EPS Celestica, we quarter of was an in achieved addition, where the history. XXXX adjusted the

first time the the surpassed we First, XXXX XXXX, initiative. of billion multiyear transformation XXXX. for to revenue our since annual organically $X overall annual XX% XX% revenue in portfolio to time as we grew line the on top an following and growth returned since for compared basis completion Revenue first

win improvement a operating to our EPS in achieved we Second, XX% strategy. And of alignment our of and programs ever on our margin X.X%, non-IFRS ever annual with annual we value-added reflecting our compared to $X.XX, XXXX. higher recorded non-IFRS deliver highest highest ability adjusted finally,

reflecting see Our high-value strategic growth. our portfolio supporting markets Lifecycle the revenue tailwinds be in and we long-term on continues where growth primary Solutions to sustainable our of the profitability, focus driver

our and recorded growth revenue represents Solutions revenues now ever business, HPS our portfolio as roughly achieving year-over-year of business XX% their in XXXX. segment Lifecycle ATS both highest X/X Our our

growth our strong and we Our revenue in recorded XXXX. in approximately $X annual at ATS strong billion XXXX. in secular growth at diversification fundamentals continue in tailwinds, revenue exposure strategic expect coming to to ATS XX% With segment markets with

growth segment CCS recording XXXX, year-over-year margin and also ever. the growth in Our highest demonstrated X.X%, substantial XX% segment revenue of

XX% part our Our growth strong be demand from growth. service $X.XX driven in provider to in continues CCS performance which XXXX, This our of by billion supported strong been achieved customers differentiated has for large offerings. HPS business, by revenues revenue our representing year-over-year

will trajectory our long-term. on performance our our XXXX over initiatives the that growing financial years to into several business strategic diversifying and help markets past confident are of focused sustain strong We us the exposure high-value and our over

offer I first the turn as markets, financial in outlook details on who Mandeep, to I would fourth some on each additional the call quarter the quarter like our our performance for well provide color for our Before to you, the XXXX. Over will Mandeep. as to guidance over of of

Mandeep Chawla

revenue end and businesses. This in high $X.XX by came the Thank supported billion. across our our growth XX% morning, year-over-year, of you, quarter Fourth each guidance of good at exceeded higher and revenue Rob, range was everyone.

adjusted margin We year-over-year, above strong up segment history. Non-IFRS accounted quarterly our and by of fourth Industrial guidance of revenue in expectations improved by quarter, quarter, $X.XX record segment year-over-year higher part driven points was than in and availability. total materials CCS X.X%, by the achieved ramps the by operating year-over-year XX% and large growth higher the up represented in segment profitability revenue improved the mix. ATS strong performance high increase. in driven for program non-IFRS operating basis supported per in margin of was for non-IFRS fourth quarter. our of revenues XX segment ATS our the performance the fourth quarter was highest share ATS our mid-XXs earnings XX% the The solid higher fourth $X.XX end and percentage Year-over-year in a driven range and new A&D volumes businesses, company's revenue demand, were year-over-year. of

Communications markets. robust with of by in growth quarter revenue and up another both and driven year-over-year, delivered segment CCS Enterprise XX% Our our outperformance

of demand continues HPS by driven revenues business results, strong recording market up and The in share million to gains the materials by increase, availability. the XX% improved RAC increased programs, significant end business above was and well revenue capacity. was as year-over-year, end HPS a our quarter, deliver availability. Enterprise were up percentage of driven in fourth in HPS customers up revenues revenue compute center primarily of was improved by quarter, market ahead HPS in ramps they of company market materials revenue $XXX to have the from XX% fourth our driven just XXs percentage make new our strong XX% in investments in growth from XXXX. Communications XX% revenues mid-XXs up XX% quarter and year-over-year, a increase, continued year-over-year. provider expectations Our in low total expanding of expectations demand service in program data our

year-over-year. margin was number in a points late Industrial, in Turning the by Capital XXX a Equipment, ramping in lower shifts programs segment to X.X% margin margins. quarter, segment segment decline driven of by large improvement compounded PCI. sequential was fourth basis by The in ATS partially quarter demand in offset

by in service improved ATS X.X% points coming The segment to was basis and and strong strong by Our driven HPS up material margin driven was expand margins quarters. CCS productivity, segment year-over-year. mix operational XXX flow, expectation billings of increase is volume for the leverage.

to of or due metrics. to XX to for million earnings net $X.XX the last per points $X.XX earnings year-over-year, year. Adjusted was million IFRS were for Moving $XX share basis compared down the on margin primarily in net financial share or quarter $XX the higher fourth same compensation. additional some quarter quarter gross per variable X.X%,

ROIC adjusted year-over-year Our for XX.X%. non-IFRS fourth XX.X% and the up the results adjusted tax effective quarter Non-IFRS quarter, was highest since rate XXXX. was for our fourth X.X%

working to on Moving capital.

sequentially up up $X.XX $XXX fourth million Our year-over-year. quarter million inventory of at and $XX end the the was billion,

has also While continued driving the environment contribute up a over the our to the attributable X sales increase strong growth to portion contributed levels, challenging our in supply past is chain years. substantial of inventory and

$XXX to approximately fourth with in $XXX at and evidenced over the fund customers cash $XXX the continue nearly by end $XXX sequentially help work customer in million of We year-over-year. When quarter, million as an collaboratively million the our deposits increase of inventory growth to the the offsetting during inventory days the previous days were day than XX higher cycle our balance million by to period. cash X deposits, prior and actually approximately year lower than decreased quarter, XX quarter compared quarter. Cash fourth third by the inventory

improving times We of constraints supply are quarters with constraints also levels. material compared reduced being and chain lead to previous fewer record material continuing seeing signs signs of from early

back the in Asia fourth line capital compared of communicated diligent we improvements working While $XX the for quarter approximately with in the million for expect investment of elevated of was expectations revenue XXXX. due investments previously and management. or This support year. XXXX. Capital million The in period. flow we new quarter slightly remain fourth increase the with ahead and flow expenditures to million do X.X% in in million, X.X% see increased totaled facilities in was capital our proactive, were strong half Mexico our cash quarter to year Fiscal primarily free expenditures Southeast fourth to $XX prior free were wins. Non-IFRS in in non-IFRS fund in XXXX $XX compared the cash to of adjusted the adjusted our $XX program working of expectations

least at in long-term XXXX, goal. $XXX achieve flow non-IFRS to with are expectations free consistent in cash Our our million adjusted

Moving some additional metrics. key on to

sequentially. end up cash of million, was at down $XXX million and the year-over-year the Our year balance million $XX $XX

revolver, provide with our approximately borrowing our us the us of which business of debt liquidity with $X of $XXX ended million. Our needs. We our of cash from billion, million $XX quarter, balance, anticipated to with sufficient million, gross the in debt believe leaving a $XXX under position net million $XXX down previous we capacity addition to meet is approximately year

EBITDA turns credit X.X the under with non-IFRS gross year. and to all Our trailing financial of turns XXXX, to was fourth were debt compliant turns, last covenants down quarter At our leverage we ratio December down sequentially XX, X.X X.X adjusted same XX-month compared agreement. quarter

a fourth XXXX. In up the at our cancellation shares cost months. purchase X.X million for approximately shares the TSX We $XX the which for accepted December to quarter, XXXX, us million. to new purchased During of next over a X.X repurchased $XX million approximately X.X during million permits cancellation total of XX shares million program, of for NCIB we

capital flow XX% as Our adjusted business into consistent we reinvest free to and return of return strategy our shareholders the the remains over cash to of aim non-IFRS long-term. XX%

XXXX. for the Now turning our to of quarter first guidance

be XX% to $X.XXX expected Our are $X.XXX year-over-year. the achieved, revenue first the to will be in this of range revenues midpoint is range If billion billion. quarter of up

million $XX to range which the expected approximately XX prior million. First tax share will our basis to achieved, per expense and guidance represent over effective period. Non-IFRS in SG&A adjusted share. quarter, foreign the be $X.XX EPS be We of midpoint non-IFRS adjusted range for ranges are expected year $X.XX to to will anticipate be points $XX operating the is revenue of adjusted per X.X%, are to from increase adjusted taxable first our any margin non-IFRS non-IFRS quarter quarter in earnings an rate of first approximately be excluding of exchange. non-IFRS XX% the the the impact for If

by the CCS provider in end our Now offset from In end high-teens our revenue our we segment, we service strong the be low first turning our in ATS for growth in percentage market be percentage Industrial Equipment. In up customers, demand XXXX. driven revenues continued offering. end HPS softer year-over-year, partially quarter range our up double-digit the market, market to to driven by single-digit anticipate A&D range of by outlook to by in year-over-year, and in demand anticipate Capital supported Communication

Enterprise the our strong demand our outlook. range provide we additional color market, back in the markets and to supported Rob by over year-over-year, on in in call now revenue overall our percentage turn Finally, compute. I'll end to anticipate mid-XX growth

Robert Mionis

targeting EPS the achieved represent banner for of in at margin we the of range reiterate, XXXX, our areas EPS. and achieved, non-IFRS After to if to Mandeep. which outlook in least billion, are company a XXXX, is results adjusted for XXXX operating These I'd we shared record of improvements in Celestica non-IFRS during non-IFRS revenue, $X.XX. October adjusted financial would start the in on by our for conference while results, $X.XX $X.X year a you, off which Thank our year reaffirming like outlook call. To revenue

Our X.X% and anticipated margin is XX XXXX X.X%, basis non-IFRS points up operating from range between XXXX.

forward. dynamic, be as we our While that our portfolio. continue and We markets broader business planning of as diversified strong feel to resiliency the financial execution our is market to and the going in positioned to continues achieve our confident are outperform well results broad

the we of adjusted pleased non-IFRS grew we the was range X-year of non-IFRS targeted are We in average would at XXXX, be the objective year investor that and for are growth ahead XX% XXXX. In at and or call, set EPS our XX% to EPS non-IFRS we XXXX. through XXXX March substantially XXXX per annual adjusted for for XXXX midpoint our grow EPS more which adjusted XXXX, rate

rate more. To XXXX, average adjusted non-IFRS continues for growth, driving senior XXXX on For objective incentivize we performance by plan a be our profitable through executives non-IFRS our continuing EPS restructured our growth have to annual adjusted as focus long-term key EPS XX% or measure. adding a incentive

Industrial in strong segment to ATS to ramping tailwinds the revenue high growing each like would as continued to segment, from exceeded growth low our posted operating number and of green great our was single with of year. for we for each turn quarter XXXX we impress results and synergy our business in programs. both X I digits. In the the a revenue post a outlook year our the XXXX demand our where segment with CCS in is expect business new robust electrical continues compared build single benefit in to throughout ATS for expected to vehicles as in Now digits year CCS in sequential XXXX growing in are it improvement PCI remains to Industrial targets. The outlook organic on and XXXX momentum Also, market, that continue our including XXXX, with and secular to strong to ATS XX% energy businesses. results,

strong XX% with coming from energy We expect growth anticipated of programs. in business our that to green Industrial XXXX, growth have approximately

Equipment. Capital Turning to

of and coming demand, strong On execution. in the performance equipment highlighted after from Our fab Capital the expectation previous years driven market. gains operational of market memory the secular rapid growth, in Equipment share spending majority XXXX solid we business the our for wafer call, to XXXX, by reduce decline several had with

We XXXX, decline fab overall the memory. in are the now by approximately decline to in equipment XX% the seeing market majority of estimates wafer still with for

compared is are expected materially, benefits down slightly enable business The be mix, market broader to of gains our anticipate in to new market. be to expected overall wins the our outperform and Capital down XXXX While to revenues program we Equipment share market to the XXXX. us

growth the XXXX, current outlook return are beyond market the that encouraged to in market fab to we equipment wafer Looking XXXX. anticipates

Turning to A&D.

supported of saw through in XXXX, American double-digit to Our investments A&D is we double-digit amid in commercial our a business geopolitical in expected traffic and in increased growth XXXX. Revenue see a improvement a saw and military sequential in a levels, strong solid a continue from air defense to and is each business In tensions. rising equipment commercial recovery revenue maintain XXXX towards our North annual continue showing European growth. to by trajectory in anticipated upgrades quarter business, and spending which aerospace XXXX, normalization pre-COVID governments, trend

supported less outlook health new in HealthTech surgical, by nature and business is to sensitive services, Our imaging XXXX, anticipate strong experiencing year-over-year business the pressures. Due devices. monitoring is ramps in revenue for and to demand believe recessionary of care we the growth. patient growth our goods We HealthTech for project

our to turning segment. CCS Now

a to expect of XXXX. see of in in as of result in environment. performance. Based primarily of after period as has The record outlook, an provider rate more is demand over tripling comps growth provider current softening share by ODMs has of customer ability past service our Our gain business center posting in capital programs more XXXX differentiated exceptional light customers a data market of to our from our investments than market potential XX%, difficult a annualized we offerings the substantial remarkable on economic our supported the current and made this in growth expansion growth years, size. moderation the HPS well with service X exhibited This

business our to in moderate expectation for is to XXXX, however, Our at continue more growth see HPS levels.

that for market outlook aligned primary of recent given Our it is driver our our that the growth of has Communications with end in HPS been business, quarters.

to Communications levels expect tougher We due grow comps. moderate at more in XXXX, business to but

to the a expect support confidence we with market, new consistently year have turn very The opportunities be am due underpinned meaningful of in and the over their to more you. portfolio global to XXXX our end implementation who the XXXX have across call questions. objectives. ability to confidence our accomplished like Thank Enterprise at we in efforts and investments network. I our to like ramps, moderate our our vision. but over grow growth tirelessly diversification, what possible again and proven now pleased the execute XXXX without would successes past is in have close would program tougher our our we by in the dedication. With accomplishments out comps. I not Finally, towards result business as call That to to I operator our ability achieve made acknowledging that, of the of the worked team have to and would by for levels global execution

Operator

[Operator from Citigroup. Instructions] James Your comes first question Suva from

Jim Suva

had you is, over the and cloud past sales years. have hyperscalers to question success My the several tremendous with

demand what are type from indicators that getting you type product. of demand wondering of Just

You grow Enterprise, I'm mentioned in of expect you about kind said end that your competitive you of changes But to and seeing you curious any comments. are just prepared the believe, I area? and that hyperscalers towards cloud,

Robert Mionis

We're with is the the environment order for seeing broadly Yes, is what for current the of most products. in thanks back hyperscalers visibility the seeing kind cloud, to we're growth and normal Jim, levels. tempering question. speaking,

seeing have use of doing fabric. We're to the of lower Some hyperscalers, China i.e., back But been levels quarters, air it flip strong softness. still of about bit moderate paying the side. of expanded little coming environment. the current previous growth, seeing And more on part growth relatively part side, still -- and a than though, given and demand just for at it's China pain the but still we're increasing premiums seeing the creating customers some all we're hyperscalers could reset the freight cases, due now a from

Jim Suva

to any not but the less as more the cycles? -- a seems could of like industry, cloud, the golden is page changing like the at hyperscalers, competitive availability And a on I'm overall be just competitive. missing all or screw or seeing industry? know was during are is some wondering -- follow-up, you because get becoming but it's COVID, turned the pricing when lot it that is supply I'm to parts, the more changes, I disciplined kind key always business, pricing compared available, past just industry in wondering a competitive now nobody

Robert Mionis

good It's a question.

Given the fact business call CCS is we've as products the that customers. just nature large our to and a provide because established ourselves design that with exceptional services HPS, we're of pressure extreme it, majority now not seeing, innovative stickiness and and of the our execution, we pricing of the I'll

Operator

question from Moschopoulos. next comes Your Thanos

Thanos Moschopoulos

stepping just maybe macro, obviously, on Rob, environment. back the dynamic

some X last if So fair? change quarter. over or you'd in of key be is what last in takeaways? sounds like softening chain seeing mean, I the else Would with just changes is about we the improvement the it versus take maybe of I call that then -- months, some thinking out exception Equipment versus are away your from consistent, kind think last mean, supply were you're my demand and those quarter, incrementally anything commentary Capital the pretty that showing just about again,

Robert Mionis

that's Yes, right.

the And mildly we expect be have the largely in fact growth that driven new that ramps. exception being verticals Equipment. all So we're the program Capital to down we within with ATS, across by seeing XXXX,

customer 'XX across shows And comps and really in And Enterprise positive. QX are CCS, Capital with we Equipment to from actually certainly the customers, into diversifying which our for but within are some frankly, 'XX, HPS, is going huge seeing full which comps year. growth we're new even of are lithography a the and tough them just base, that

Thanos Moschopoulos

coming onetime first year? the about sustainable any then strength half were CCS on margins, the obviously this And think may as things benefited the which of that have exceptionally we Or margin strong, is QX? --

Mandeep Chawla

this I that environment tough but an wouldn't job Yes. on what pricing. that have in say call say would to I exceptional teams broader our onetime Thanos, maximizing there's items the out, done

of level providing service that customers. XXXX through And billings great so there are we're we've for service seeing that been our a

As the billings. for there'll to normalize, lead be supply starts types opportunity come service environment those less in, chain of as times

been we so the And slight into year go exceptional. that be we margins a think obviously, next of CCS as moderation performance do But year. there'll this has

think be So also that I expected. would

Operator

Treiber Your Markets. Capital Paul from comes next from RBC question

Paul Treiber

to elaborate the quarter what Just this on led there? that change versus about late more Equipment. saw expectations in wanted quarter? perhaps a comment that you hone into to demand prior bit Capital And the how -- going your then in just just your indicate shift you changed Can

Robert Mionis

Sure, Paul. Yes.

wanted that into So late the defer December, chain, within built they customers to Capital fourth of our Equipment, as notified in some some kind inventory their had quarter of quarter. first one such, early us the November, up orders supply from they

unable in given month. late, happened costs So it were last the the couple of to kind of we flex our weeks of

on So pressure. little corrected, have QX what beat That is of be will to kind demand, aligned. bit and think think, is will, that kind the we and year a and we issue we if of be full supply and relatively will now led you of a

Mandeep Chawla

results controls of were and the if that Yes. our export we you'll at China so right announcing when color the Paul, came provided at point. customers had October, that end we came out, they while challenges out recall, the our

through had demand of near-term their As our became churn that quarter, half why more that reassess the And of the late closer the customers some to delivery and able quarter. of understanding schedules. go we second to were the that's

Paul Treiber

good that helpful, adds That's Okay. understanding indeed.

loaded? Like about we about you that? linearity year? 'XX Equipment, of through a see growth or do reacceleration within back-end how and the Capital to Is think a return should the mean, growth As it I steadily think we

Robert Mionis

say some be new base back-end it business, and supplementing Capital down year-over-year will on we offsetting more loaded. program the and think be broadly will but would a front-end I ramps Equipment, speaking, our that will or within loaded those Yes. of business be headwinds

Mandeep Chawla

what we're market significantly. overall seeing would down market that a from memory Paul, is in perspective, know, as you is the Yes.

exposure year, base You're we from an to hearing memory, a lot exposure 'XX. is as some there logic. less more have aware there we're as we will go that be demand the we that that then what is And through expectation in our strength exit customer

now, XXXX to market fundamentals for based attractive. semi medium-term Robert continue are the right so what we outlooking the And be said, or just on but longer

Paul Treiber

And last me. question for

non-Lifecycle Just revenue that very are and business? a think strong of was I QX, What reasons QX. the the in in strong also piece for growth the it's

Mandeep Chawla

by driven as primarily well. growth rates data It's center

multiple for you we our As know, do things customers.

So we can relationships. have to We provide able a customer where non-HPS we're both doing creates with that both programs being those find services HPS programs them. and actually stickier

And seeing so with in data customers programs, hyperscaler deployments. been growth we've non-HPS center when our they're for largely

Operator

from comes Robert question Genuity. from next Young Your Canaccord

Robert Young

chain. about evolution curious just there's expecting how to be curious like you're impacts your visibility. -- I'm sounds And was -- it just better I XXXX. in that the how supply It

maybe You your China, a away where people maybe And then footprint towards from better lot your your with go. from does benefited match footprints understanding onshore, are to shifting customers how changing, customers' as of want up build schedules.

Sort of questions double to related -- supply there. chain X

Robert Mionis

Rob. schedules, to XXXX, times. build levels. schedules of relates the market. With really times Yes, automotive EV giving products are it as function aerospace visibility least as technologies, supply supports of -- some and last as certainly getting constraints elevated, is on the Nevertheless, close especially us and think quarter. supply a some in us such build lead from respect the have And a visibility Thanks, perspective, it to as at pre-COVID still chip to eased chain we we're lead older I from on enter

times XX are given off XX a times So are They lead relatively that high, XX. weeks coming again, high about now of semiconductor weeks. still about lead are

some have and some increased our in lead positive. And increased We into our we Mexico supporting think Malaysia also customers' really and So positioned wanting well multiple now. support them to and is based support times visibility really for expansions we forecast and some nodes to customers we a right times on and expansions still having chain onshoring. regarding announced resilience the supply announced support to lead growth to semiconductors, that's which footprint, in additional there, we're growth facilitate also there, some

Robert Young

question, dig Okay. guide into second then EPS And the XXXX. wanted to I for

You now EPS key is performance a said -- adjusted EPS that measure.

so guide the X% XX% midpoint odd And and that XXXX. it and XX% midpoint XXXX seems for X% XXXX at and growth the in is at the -- then

on So I'm leads what just be growth to in cautious little you is EPS that curious more XXXX? a the driver

Mandeep Chawla

Yes. Hey, Rob.

with is what as in you had outlook when at XXXX, single-digit you been the -- for our strong To EPS had it's we've exceptional October, So that provided to rate. XXXX, a XXXX off consistent growth from $X.XX of we look in year. results we an point, $X.XX. your very know,

on If you basis, are looked year we into at seeing above going What top the a our is EPS growth growth. growth we're line. next XX% on X-year now stack right continuing

continue to as strong XXXX, prudent hope that would would going the We are see being this and to at even QX of rest performance the be very January of only we and we frank into moment exit given we year. its

near-term with guide way. provide you So can visibility robust. our we the in the now, updates along But will as see right quite is QX,

Robert Young

just And quickly on last Okay. PCI.

recover a that said Did to back And there. fire? I'll you everything then you that normal, from is recovery pass had think line. the I you the

Robert Mionis

now we we're at, I call pre-incident production point Rob, a Yes. it QX, of as levels exited from view.

yes, we -- as levels with we our respect we the original exited to really on plan pre-incident getting back So to remained to feel good plan that year.

Operator

from comes question CIBC. from Coupland next Todd Your

Thomas Ingham

to capital wanted couple questions. start first ask out on allocation. I'll I a of

general acquisition. the us fit targets. are moment? M&A there are a opportunities idea might -- with surpassing and integrated It's had considering? what there the PCI synergy your you're with a you you good at Is You've now any give other footprint experience And could

Mandeep Chawla

add Rob let I'll and off start I'll Sure. as wishes. on he

We're were way. cash flow we million. to year, to with be next free sheet. us leverage year able of this well. Gross pleased overall which continue now targeting as along is over balance the flexibility. pleased we're $XX $XXX million the We're is that with a -- the at we the X.Xx, Todd, lot strength opportunistic generate, And So want gives of to

is stock the say strategy sense, at to cash from We wasn't flow back trading long-term on multiples that you in our I return know half perspective. our were and a XXXX to that buying stock active free really made when shareholders. our So of levels

So we into continue to have flexibility that XXXX. going

the In performance have off, very with and business has The as of target terms mentioned was of PCI. They M&A, extremely as surpassed synergy pleased continues robust well. we're to that first outlook so doing our business well. in first been very a year the script,

for Solutions active our primarily a funnel. look capability-based portfolio. largely to continuing to We're Lifecycle very We have acquisitions, tied

targets of ATS the to lean now in with but we're at area the also in most it's an looking looking exception of at an the not side. from into HPS Equipment, end So perspective, that looking really M&A Capital in markets targets

in to very the pulled because and haven't continue line have very filters. just we strategic that XX roadmaps, months reason we robust is up with ensure meeting to it filter. a our that is, first The the We other for want trigger financial and then thing does its our

open continue we to so be to it. And

do balance be going the it, have but to flexibility we're We sheet disciplined. to

Thomas Ingham

how frame, you place production take in the sort from from And we a Okay. could participating then Pac anticipate if what North and if of would That's business helpful. shifts to X-year do we you And in America? XXXX expect of to Asia time step back type just that? think Celestica about

Robert Mionis

Yes, thanks.

China China, requirements. into customers be for that And China serving of that so in China think a period selling in markets. looking we'll multinationals time, I are China to Chinese China Chinese China see over or might serve products

or into North are that or looking either I been the Mexico whether production North requirements into has move China, to Southeast those think to multinationals America other in Asia America. or in that's

down, growing, Mexico North certainly And we China exposure little growing. broad have our well the based which think, is very on bodes Asia footprint, going America China, shift, is I Southeast for So and us. to

less in up think than we we going I last Mexico And sales nicely in about a on our filling we XX% is with facility. expanding our opened Texas, have strong very coming China. from are that pipeline. up of facility have our Richardson, very Malaysia, and And been year, expansions and certainly new

Mandeep Chawla

trends the perspective -- evolve that and are your happening, you'll is I are positioned. just guess, you're So this already those see

material to to So as you'll them -- you evolve having to any outs. opposed just with step make need

Robert Mionis

well It's put. Yes.

Mandeep Chawla

Yes.

Operator

further no time. are at this There Instructions] [Operator questions

You Mr. Mionis. may proceed,

Robert Mionis

pleased fourth another strong In for grew we quarter XX%, of EPS XXXX. our in of the I'm with you. year by and Thank our XXXX, performance. performance marking all adjusted

past the we EPS adjusted to as Celestica a execute have over X with grown has markets. I'm difficult to XX%, momentum true XXXX. enter over by the fact, encouraged testament In years, our we ability in

I look our are ability to through and you we again our confident progress well business navigate as updating managing year. through today's skilled you call, We cycles the throughout uncertainties. Thank forward feel economic joining for economic and to at in

Operator

this gentlemen, disconnect thank your concludes call and for and conference Ladies that your lines. ask for please you We you today. participating

Celestica (CLS) 26 Jan 232022 Q4 Earnings call transcript