10-KPeriod: FY2022

CELESTICA INC Annual Report, Year Ended Dec 31, 2022

Filed March 13, 2023For Securities:CLS

Summary

Celestica Inc.'s 2022 Form 20-F filing reveals a year of significant growth and strategic advancements. The company experienced a substantial 29% increase in revenue, reaching $7.25 billion, driven by robust performance across both its Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS) segments. The ATS segment saw strong demand and new program ramps, particularly in Industrial and Aerospace & Defense, while the CCS segment benefited from growth in Communications and Enterprise markets, notably the strong performance of its Hardware Platform Solutions (HPS) business. This growth was achieved despite ongoing global supply chain constraints, which Celestica effectively managed through advanced planning and collaboration. Celestica's strategic focus on diversifying its portfolio towards higher-margin services and expanding its HPS offerings is evident in its results. The company also highlights its commitment to operational efficiency, talent development, and sustainability initiatives, underscoring a proactive approach to navigating the dynamic industry landscape. Key risks identified include customer concentration, global economic uncertainty, and supply chain volatility, which the company actively manages. The company's financial health appears solid, with healthy cash flow from operations supporting investments and shareholder returns.

Financial Highlights

28 data points
Beta

Revenue

$7.25B

9.0% Gross Margin

Net Income

$180.10M

2.5% Net Margin

EPS (Diluted)

$1.46

Cash & Equivalents

$374.50M

Free Cash Flow

$211.10M

Financial Statements
Beta
Revenue$7.25B
Cost of Revenue$6.60B
Gross Profit$649.70M
R&D Expenses$46.30M
SG&A Expenses$267.30M
Operating Income$289.30M
Net Income$180.10M
EPS (Basic)$1.46
EPS (Diluted)$1.46
Shares Outstanding (Basic)123.50M
Shares Outstanding (Diluted)123.60M

Key Highlights

  • 1Revenue surged by 29% to $7.25 billion in 2022, driven by strong performance in both ATS and CCS segments.
  • 2ATS segment revenue grew 29% to $3.0 billion, supported by Industrial and Aerospace & Defense businesses.
  • 3CCS segment revenue increased 29% to $4.3 billion, with significant growth in the HPS business (up 59% to $1.83 billion).
  • 4Segment margins improved, with ATS segment margin reaching 4.7% and CCS segment margin improving to 5.1%.
  • 5Celestica continued to manage global supply chain constraints effectively, mitigating material impacts on revenue.
  • 6The company's top 10 customers accounted for 66% of total revenue, with two customers individually representing 11% of total revenue in 2022.
  • 7Share repurchases for cancellation totaled $34.6 million in 2022, repurchasing 3.4 million shares.

Frequently Asked Questions

Celestica reported a significant increase in revenue, with a 29% rise to $7.25 billion in 2022, compared to $5.63 billion in 2021. This growth was broad-based across both the Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS) segments.

Celestica effectively managed global supply chain constraints through advanced planning processes, supply chain management, and close collaboration with customers and suppliers. While these constraints led to extended lead times for certain components and higher inventory levels, the company largely mitigated their impact on revenue during most of 2022.

The Hardware Platform Solutions (HPS) business, part of the CCS segment, is a key growth driver for Celestica. In 2022, HPS revenue grew by 59% to $1.83 billion, accounting for 25% of total revenue, up from 20% in 2021. This business typically has a higher margin profile and is expected to continue its growth trajectory.

Key risks identified in the filing include significant customer concentration (top 10 customers represent 66% of revenue), uncertainty in the global economic and political environment, challenges in managing customer demand volatility, and ongoing supply chain constraints. The company also faces intense competition and pricing pressures in the EMS industry.