Celestica, Inc.

Good day, and thank you for standing by. Welcome to the Celestica Q1 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. And as a reminder, today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Craig Oberg, Vice President of Investor Relations and Development. Please go ahead.

Good morning, and thank you for joining us on Seleska's first quarter 2021 earnings conference call. On the call today are Rob Mayonis, President and Chief Executive Officer, and Mandip Chawla, Chief Financial Officer. As a reminder, during this call we will make forward-looking statements within the meanings of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Such forward-looking statements are based on management's current expectations, forecasts, and assumptions, which are subject to risks, uncertainties, and other factors that could cause actual outcomes and results to differ materially from conclusions, forecasts, or projections expressed in such statements. For identification and discussion of such factors and assumptions, as well as further information concerning forward-looking statements, please refer to yesterday's press release, including the cautionary note regarding forward-looking statements therein, our most recent annual report on Form 20F, and our other public filings, which can be accessed at sec.gov and cdar.com. We assume no obligation to update any forward-looking statement, except as required by law. In addition, during this call, we will refer to various non-IFRS measures, including operating earnings, operating margin, adjusted gross margin, adjusted return on invested capital or adjusted ROIC, free cash flow, gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio, adjusted net earnings, adjusted EPS, adjusted SG&A, and adjusted effective tax rate. Listeners should be cautioned that references to any of the foregoing measures during this call denote non-IFRS measures, whether or not specifically designated as such. These non-IFRS measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other public companies that use IFRS or who report under U.S. GAAP and use non-GAAP measures to describe similar operating metrics. We refer you to today's press release and our Q1 2021 earnings presentation, which are available at Seleska.com under the Investor Relations tab for more information about these and certain other non-IFRS measures, including a reconciliation of historical non-IFRS measures to the most directly comparable IFRS measures from our financial statements. Unless otherwise specified, all references to dollars on this call are to U.S. dollars. and per share information is based on diluted shares outstanding. Let me now turn the call over to Rob.

Thank you, Craig. Good morning, everyone, and thank you for joining us on today's conference call. Celestica is off to a strong start in 2021, delivering solid first quarter results. Revenue and adjusted EPS were both above the midpoint of our guidance ranges, and I am pleased that our non-IFRS operating margin is up 60 basis points, on a year-over-year basis, reflecting the strength of our strategy and strong execution. Our portfolio transformation initiatives continue to yield results, and our core business is growing. Although revenue decreased 6% in Q1 2021 compared to Q1 2020, the decrease was largely driven by a disengagement from Cisco, whose revenue accounted for 13% of our total Q1 2020 revenue. The revenue of the company's non-Cisco business grew 7% year-over-year. Furthermore, we executed the transition seamlessly, and we were able to meet our revenue and mixed backfall objectives. Within our ETS segment, we experienced slightly better than expected revenue results due to strong growth in health tech and capital equipment. We also reported our fourth consecutive quarter of sequential margin expansion and continue to target being back in our 5 to 6 percent target margin range by the end of the year. Within CCS, after having successfully concluded our Cisco disengagement in the fourth quarter of 2020, we are focused on growth. While CCS revenue in the first quarter was down on a year-over-year basis, primarily because of the Cisco disengagement, our remaining CCS portfolio grew by 16 percent year-over-year. The CCS segment continues to perform well, with our year-over-year improvement in segment margin for the fifth consecutive quarter, and once again operating above our 2% to 3% target range. Our hardware platform solutions, or HPS business, previously referred to as our GDN business, remains an engine for growth within our CCS segment. HPS generated $200 million of revenue in the first quarter, a 46% increase on a year-to-year basis. We continue to expect our HPS business to be a catalyst for both CCS revenue growth and segment margin strength. Last quarter, we also highlighted that we refer to revenue from our HPS business and ATS segment as lifecycle solutions. It is our view that the businesses which compromise our lifecycle solutions portfolio share several key characteristics. that reflect the focus of our commercial strategy. We consider lifecycle solutions revenue to be diversified revenue, and our strategy continues to be to expand this portfolio as a percent of the total company, enabling long-term profitable growth. This strategy includes pursuing markets with high barriers to entry, robust long-term growth prospects, attractive margins, and the opportunity to offer our customers higher value-added solutions throughout the product lifecycle, We are pleased that our Lifecycle Solutions portfolio grew in the first quarter, both sequentially and on a year-over-year basis. I will offer some further color on our end markets and the overall business outlook shortly. However, first, I would like to turn the call over to Mandeep to provide you with some financial details on the first quarter, as well as our second quarter guidance.