Celestica – Company Presentation

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Presentation transcript:

Celestica – Company Presentation 1

28,000 Employees worldwide 20 locations in 14 countries Celestica - A Global Leader In innovative end-to-end supply chain solutions Today… $5.8 billion in revenue 20 locations in 14 countries 28,000 Employees worldwide Focused on serving the world’s leading technology companies Tailoring customer-centric solutions for the markets we serve Operating a global network of sites with specialized Centers of Excellence One of the strongest balance sheets in our industry

Q1 2014 Revenue Segmentation Financial strength to support our customers’ growth Q1 2014 Financial Results Q1 2014 Revenue Segmentation Consumer Server Communications Storage Q1 2014 Financial Results $1.3 billion revenue Operating margin at 3.1% 16.1% ROIC $US Balance Sheet At March 31, 2014 Cash $489 million $400 million credit facility undrawn Diversified * Now, I’d like to give you an update on our revenue by end market. Overall, relative to our expectations at the start of the quarter, we experienced softer than expected demand in our communications and storage end markets, while revenue performance in other end markets was generally consistent with our forecast. As you see on the chart, the diversified markets segment now represents 27% of our revenue. We have seen strong growth in industrial, semiconductor and aerospace and defense markets, primarily driven by new programs. Revenue from the communications end market represents 41% of the total revenue for the quarter, which is down 12% over last quarter. Although we expected a decline, we experienced lower than expected demand from some of our key customers during the quarter. However, the communications market grew on a year-over-year basis by 6%, largely due to new programs. The storage market grew 7% quarter-over-quarter and 9% year-over-year, primarily due to new programs. The server market decreased by 39% year-over-year due to overall weaker demand and the in-sourcing of a lower-margin assembly program that we have discussed over the last several quarters. And, lastly, the consumer market represents 6% of our revenue, which was expected as we de-emphasize certain parts of this business. 3

Optimized Global Network Portland OR Toronto ON Austin TX Valencia Spain Leixlip Ireland Galway Ireland Salzburg Austria Oradea Romania Miyagi Japan Shanghai China Taipei Taiwan Wuxi China Fremont CA San Jose CA Ontario CA Monterrey Mexico Laem Chabang Thailand Song Shan Lake China Kulim Malaysia Johor Bahru Malaysia Singapore Singapore Suzhou China

Capabilities Celestica Romania September 4th, 2014

Highly skilled and customer focused workforce Best in class IT Systems and support infrastructure ERP Demand Management Transportation management Shop floor visual ODC – shop floor control QM, W.I., NCM, 8D Thinking GREEN / Energy Management Solutions ISO 50001 Certified

Value Add Engineering Services Complete Set of Services Test Development Failure Analysis Laboratory Product/Process Development Engineering Services Cross Sectional Analysis Dye and Pry Shear & Pull Test XRF Inspection Strain Gauge Analysis Zero Ion Contamination Mechanical testing Design For Excellence (DFX) Design Analysis (Coresim), Product Design PCBA Layout Test Strategy Development In-circuit Test Development Functional Test Development (Early Phase) Functional Test Development Proof of Design Proof of Manufacturing Pilot To Ramp Mechanical Fixture & Tooling Design Mechanical and Plastic parts supplier qualification and start-up Lab Services Design Services Test Solutions NPI & Prototype **Support from Celestica Network

Printed Circuit Board Assembly Complex Mechanical Assembly Engineering Services Design For eXcellence – Full DFM reports using Valor tools. Design for Mechanical Assembly reports. Prototyping – Complete End to End solution from material purchasing to process design and flying probe test development. Manufacturing Capabilities Printed Circuit Board Assembly Inspection and Test Complex Mechanical Assembly Repair Services After Market Services Celestica offers:: Debug and Repair BGA Rework / Soldering Upgrades Reverse Logistics Refurbishment Celestica offers subassembly refurbishment, repair for medical customers. In warranty, out of warranty repairs, swap process and logistics.

Celestica Academy Program Apprentices’ school – supporting 15 students for 2 years to gain a profession; Laboratory of the Future - course in collaboration with Technical Universities from Oradea, Cluj-Napoca and Timisoara (150 students involved in 4 years); Supply Chain Excellence - course in collaboration with Economics University from Oradea (20 students in 2014); Summer Internship Program - more than 500 students involved in 4 years; Degree Diploma Program - students from University of Oradea collaborated with our specialists for their diploma degree; Scholarship - 6 of the best university students are involved in Celestica Scholarship program; Open Day - How it’s Made? - for 5 years we have been inviting more than 1000 students to get a glance of electronics industry Scoala Altfel (Different School) - in a one week we had 441 students from primary school, high school and technical colleges who visited us in a national program named Scoala Altfel – Different School Robot Challenge – Mechatronics contest - 60 students from Oradea and other cities participated in a robotics competition; TIE (The Interconnection Techniques in Electronics) – Electronics contest - 40 competitors from all technical universities from Romania and Budapest participated in an electronics competition in Timisoara and they had the great opportunity to work and to be evaluated by the specialists in electronics.

Automotive Market October 15, 2014 10 10 10

SWOT Analysis - Romanian Automotive Market Strengths Weaknesses Romania: Has an open market economy (as a member of the EU). Has low expenses (land & labour). Has access to EU markets & EMEA region. Has a strong supplier base for manufacturers. Possesses a well-educated workforce. Romania has poor infrastructure; particularly its road infrastructure. Romania’s large geographic area presents higher costs associated with establishing distribution coverage for items such as aftermarket parts. Opportunities Threats Products manufactured in Romania can be sold in other EU states without import tariffs or other obstacles. There are reduced duty rates for industrial products (10% parts & accessories, 3% industrial assembly, 4.5% other purposes). The number of companies with ISO 9001, ISO14000, ISO16949 certifications is continuously increasing. Localization – live ecosystem Existing Romanian vehicles are old – 12 years compared with less than 8 years in the EU. There is a lack of available highly qualified personnel in Romania, such as specialized technicians for service workshops, engineers, purchasing and sales workforce There has been a prolonged decline of purchasing power of potential buyers of vehicles in Romania. No investment in the development of long term partnership among OEM’s Tier 1 and Tier 2 suppliers Short term cheaper Asian solutions

Conclusions - The Future of the Romanian Automotive Market Romania is in a growth phase with current & planned investments by global manufacturers & suppliers, yet it is uncertain if the country will become a major automotive player. This will depend on how successfully it can develop a low cost structure among its suppliers to help overcome domestic issues such as poor transport infrastructure Development and growth of the local ecosystem encouraged by stable and sustainable government incentive plans Investment in the technical field of the education system Public-Private partnerships The Romanian automotive industry is poised to continue to grow in significance due to planned and current investments by global manufacturers and suppliers. It is unclear whether Romania will become a major player in the industry, with multiple tiers of interconnected suppliers selling to OEMs, and will in part be related to the country’s ability to present an attractive cost structure (labor, land) that counters the negatives (poor transport infrastructure, weak government administration, unstable government policy) (Excerpt from U.S. Commercial Service Report on Romanian Automotive Market, 2011)