About Celestica

Celestica Inc. (Celestica) provides supply chain solutions in Canada and internationally. Segments The company operates through two segments, Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). ATS ATS segment consists of the company’s ATS end market, and consists of its A&D, Industrial, HealthTech, and Capital Equipment businesses. The company’s Capital Equipment business consists of its semiconductor, display and robotics equipment businesses. CCS CCS segment consists of the company’s Communications and Enterprise end markets. The company’s Enterprise end market consists of its servers and storage businesses. The company’s customers include OEMs, cloud-based and other service providers, including hyperscalers, and other companies in a wide range of industries. The company operates a network of sites and centers of excellence strategically located in North America, Europe and Asia, with specialized end-to-end supply chain capabilities tailored to meet specific market and customer product lifecycle requirements. The company offers a comprehensive range of product manufacturing and related supply chain services to customers in both of its segments, including design and development, new product introduction, engineering services, component sourcing, electronics manufacturing and assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. The company’s HPS offering, within its CCS segment, includes the development of infrastructure platforms, hardware and software design solutions and services that can be used as-is, or customized for specific applications in collaboration with its customers, and management of program design and aspects of the supply chain, manufacturing, and after-market support. The company’s services and solutions create value for its customers by enabling their strategies, while accelerating their time-to-market. Products and services in the company’s ATS segment are extensive and are often more regulated than in its CCS segment, and can include the following: government-certified and highly-specialized manufacturing, electronic and enclosure-related services for A&D customers; high-precision semiconductor and display equipment and integrated subsystems; a wide range of industrial automation, controls, test and measurement devices; engineering-focused engagements, including full product development in the areas of telematics, human machine interface, Internet-of-Things and embedded systems; advanced solutions for surgical instruments, diagnostic imaging and patient monitoring; and efficiency products to help manage and monitor the energy and power industries. Products and services in the company’s CCS segment consist predominantly of enterprise-level data communications and information processing infrastructure products and systems, and can include routers, switches, data center interconnects, edge solutions, servers and storage-related products used by a wide range of businesses and cloud-based and other service providers to manage digital connectivity, commerce and social media applications. Within its CCS segment, however, the company’s HPS business (which includes firmware/software enablement across all primary information technology (IT) infrastructure data center technologies and after-market services) typically has a higher margin profile than its traditional CCS businesses, but also requires specific investments (including R&D) and higher working capital. The company’s CCS segment generally experiences a high degree of volatility in terms of revenue and product/service mix, and as a result, its CCS segment margin can fluctuate from period to period. In recent periods, the company has experienced an increasing shift in the mix of its programs towards cloud-based and other service providers, which are cyclically different from its traditional OEM customers, creating more volatility and unpredictability in its revenue patterns, and additional challenges with respect to the management of its supply chain and working capital requirements. Celestica's Strategy The company constantly seeks to advance its quality, engineering, manufacturing, HPS, and supply chain capabilities. The company will continue to focus on its pursuit of the following, intended to strengthen its competitive position and enhance customer satisfaction and shareholder value. The key elements of the company’s strategy are to increase penetration in its end markets/offerings; selectively pursue acquisitions and strategic transactions; develop and grow trusted relationships with leading customers; and expand range of service offerings and continue to invest in developing new technology, quality products and supply chain solutions and services. Innovative Supply Chain Solutions and Services The company is a global provider of innovative supply chain solutions. The company offers a range of services including design and development, engineering services, supply chain management, new product introduction, component sourcing, electronics manufacturing, assembly, testing, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics, asset management, product licensing, and after-market repair and return services. The company’s design and development services include its HPS offering, which consists of developing infrastructure platforms, hardware and software design solutions and services in collaboration primarily with CCS segment customers, as well as managing aspects of the supply chain and manufacturing, including firmware/software enablement across all primary IT infrastructure data center technologies, and after-market support. The company executes its business in its global network of sites, including its designated centers of excellence, strategically located in North America, Europe and Asia. The company leverages these sites and centers of excellence, IT, and its supply chain expertise using collaborative processes and a team of highly skilled, customer-focused employees. Quality, Lean and Six Sigma Culture The company has an extensive quality management system that focuses on continual process improvement and achieving high levels of customer satisfaction. The company employs a variety of advanced statistical engineering techniques and other tools to assist in improving product and service quality. Most of its principal sites are ISO 9001 and ISO 14001 certified (international quality management standards), and has other required industry-specific certifications. The company’s Celestica Operating System (COS) consists of the application of global standard processes to all critical aspects of its operations, including quality, supply and operations planning, new product introduction, daily visual performance management, and continuous operational improvement through a Plan Do Check Adjust cycle. In addition to these standards, the company deploys Lean initiatives to help drive manufacturing efficiencies, cycle times velocities and improved product quality, and use Six Sigma extensively in an effort to reduce process variation and to drive root cause problem-solving. Design and Engineering Services The company’s global design teams are focused on delivering flexible solutions and expertise, intended to help customers reduce overall product costs, improve time-to-market, introduce competitively differentiated products, and drive hardware innovations. For customer-owned designs, the company augments their design teams, and utilize its proprietary design analysis tools to minimize design revisions and to achieve improved manufacturing yields. The company’s HPS offering includes the development of infrastructure platforms and hardware and software design solutions in collaboration with customers, managing aspects of the supply chain, manufacturing their products and providing asset management services (including IT asset disposition). The company’s HPS offering is an engineering-led, intellectual-property-based offering that allows it to drive hardware innovation and solutions for its customers and further broaden its value proposition by leveraging its ecosystem partners and broad range of capabilities across the product lifecycle. The company continues to invest in leading-edge product roadmaps and design capabilities aligned with both market standards and emerging technologies in support of its HPS offering. The company delivers both partially customized HPS products, and complete hardware platform solutions to customers in the storage, servers, and communications markets. These products and solutions are intended to help its customers reach their markets faster and enable their strategies, while increasing supply chain resilience and building valuable intellectual property for their product portfolios and/or data centers. The company collaborates with some of its core customers' product designers in the early stages of product development, using advanced tools to enable new product ideas to progress from electrical and application-specific integrated circuit design, to simulation, physical layout and design review, all intended to ensure readiness for manufacturing. The company uses its design expertise to create innovative technologies and hardware product solutions, and leverages key ecosystem partners to drive both innovation and supply chain leverage. The company’s HPS offering encompasses advanced technology infrastructure platforms, and hardware and software design solutions that customers can tailor to their specific applications. The company’s engineering services team works with its customers throughout the product life-cycle. The company maintains ties with key industry associations and engineering firms to help it stays apprised of advances in technical knowledge. Prototyping and New Product Introduction Prototyping is a critical early-stage process in the development of new products. The company’s engineers collaborate with its customers' engineers to provide quick responses in the early stages of the product development lifecycle. Supply Chain Management and Services The company uses advanced planning, analytics, enterprise resource planning, and supply chain management systems to optimize materials management from suppliers to its customers' customers. Through its global supply chain management processes and integrated IT tools, the company endeavors to provide its customers with enhanced visibility to balance their global demand and supply requirements, including inventory and order management. Manufacturing Services Printed Circuit Board Assembly Printed circuit board (PCB) assembly includes the attachment of electronic components, such as capacitors, microprocessors, resistors and memory modules, to PCBs. The company’s global network of engineers helps the company to provide its customers with full PCB assembly technology capabilities. These capabilities include design for manufacturing, PCB layout, packaging, assembly (circuit card assembly or CCA), lead-free soldering, test development, and data analytics for complex flexible and rigid-flex circuits and hybrid PCBs. Complex Mechanical Assembly The company provides systems integration and precision machined components to its Capital Equipment customers. Complex mechanical systems integration consists of multiple interconnected subsystems that interact with various materials, e.g., fluids, solids, particles and rigid bodies. Such systems are often used in advanced manufacturing applications, such as semiconductor manufacturing, display manufacturing (including LCD, OLED, QLED and other displays), medical applications using robotics, and other applications such as cash handling machines where precise standards are required. The company also provides complex mechanical assembly primarily to its aerospace customers, including wire harness assembly, systems integration, sheet metal fabrication, welding and machining. Precision Machining The company utilizes specialized computer-controlled machines to manufacture high quality components to tight tolerance requirements. Such components are often used in applications similar to those noted above for complex mechanical assembly. Energy Services The company provides integrated solutions and services to its renewable energy customers in the areas of power generation, conversion and monitoring. The company’s energy portfolio includes power inverters, energy storage products, smart meters and other electronic componentry, and encompasses complete product lifecycle solutions, including design, manufacturing and reliability services. Systems Assembly and Testing The company uses sophisticated technologies in the assembly and testing of its products. The company continues to make investments in the development of automated solutions, as well as new assembly and test process techniques intended to enhance product quality, reduce cost and improve delivery time to customers. The company works independently and also collaborates with customers and suppliers to develop assembly and test technologies. Systems assembly and testing require sophisticated logistics capabilities to rapidly procure components, assemble products, perform complex testing and distribute products to customers around the world. The company’s full systems assembly services involve combining and testing a wide range of sub-assemblies and components before shipping them to their final destination. Some customers require custom build-to-order system solutions with very short lead times, and the company are focused on using its advanced supply chain management capabilities to respond to its customers' needs. Quality and Product Assurance The company provides complete product reliability testing, inspection and qualification capabilities to support its customers' full product lifecycle requirements. The company’s quality and product assurance teams perform product testing to ensure that designs meet or exceed required specifications. The company is capable of testing to various industry standards, and it works closely with its customers to execute unique test protocols. Failure Analysis and After-Market Services The company’s extensive failure analysis capabilities concentrate on identifying the root cause of product failures and determining corrective actions. Products are subjected to various environmental extremes, including temperature, humidity, vibration, voltage and contamination. Field conditions are simulated in failure analysis laboratories which employ electron microscopes, spectrometers and other advanced equipment. The company’s engineers work proactively in partnership with suppliers and customers in an effort to discover product failures before products are shipped, and to develop and implement solutions if required. The company also seeks to provide value to its customers through its after-market services offerings which include repair, fulfillment, reverse logistics, asset management and disposition, reclamation and returns processing and prevention. The company’s fulfillment offering includes the design and management of integrated supply chain and materials management for light manufacturing and final assembly and reclamation. The company’s reverse logistics offering includes the design and management of transportation networks, warehousing and distribution of products, asset recovery services, and transportation and supply chain event monitoring. The company’s returns processing and prevention offering provides its customers with product screening and testing and product design and process analysis. The company’s reclamation offering includes product disassembly, reassembly and re-use, as well as certified scrap disposition processing. The company offers these services individually or integrated through a 'Control Tower' model which coordinates its people, systems and processes with those of its customers to improve service levels by providing an increased level of visibility and analytics throughout the entire after-market value chain. Product Licensing With respect to its partners that are seeking to rationalize their product lines, licensing to the company provides them with an alternative to sale or discontinuation. Celestica manages the entire business process for the licensed product or product line, including order acceptance, customer service, engineering, supply chain, obsolescence management, manufacturing, logistics, service parts offering, and after-market services. This allows its partners to continue to serve their customers while maintaining ownership of their intellectual property, and to redeploy their resources for other uses. Marketing and Customer Experience The company structures its business development teams by end market, with a focus on offering market insight and expertise, and complete manufacturing, HPS (in the case of its CCS segment) and supply chain solutions to its customers. The company has customer-focused teams, each headed by a group general manager who oversees the global relationship with its key customers. These teams work with its subject matter experts to meet the requirements of each customer's product or supply chain. The company’s global network is comprised of such customer-focused teams, as well as operational and project managers, supply chain management teams, and senior executives. The company provides comprehensive support before, during and after the delivery of its products and services. The company seeks to deepen and grow its customer relationships by providing consistent, high-quality implementation and customer support services, which it drives customer retention and additional opportunities within its existing customer base. Customer Concentration and Relationship Management The company targets industry-leading customers in each of its segments. The company’s current CCS segment customers include Amazon Fulfillment Services, Inc., Ciena Corporation, Dell Technologies, Google Inc., Hewlett-Packard Enterprise, Hewlett-Packard Inc., IBM Corporation, Juniper Networks, Inc., Meta Platforms, Inc., NEC Corporation, and Polycom, Inc. The company’s ATS segment customers include Applied Materials, Inc., LAM Research and Honeywell Inc. The company generally enters into master supply agreements with its customers that provide the framework for its overall relationship, although such agreements do not typically guarantee a particular level of business or fixed pricing. Seasonality Seasonality is reflected in the mix of products the company manufactures from quarter-to-quarter. From time to time, it experiences some level of seasonality in its quarterly revenue patterns across certain of its businesses. The addition of new customers has introduced different demand cycles. For example, cloud-based service providers have increased their use of products in the company’s CCS segment in recent periods. These customers and markets are cyclically different from its traditional OEM customers, creating more volatility and unpredictability in its revenue patterns, and additional challenges with respect to the management of its working capital requirements. The pace of technological change, the frequency of customers transferring business among EMS and/or ODM competitors and the constantly changing dynamics of the global economy will also continue to impact the company. In addition, the company typically experiences its lowest overall revenue levels during the first quarter of each year (year ended December 31, 2022). Competition The company’s competitors include Benchmark Electronics, Inc., Flex Ltd., Hon Hai Precision Industry Co., Ltd., Jabil Inc., Plexus Corp., and Sanmina Corporation, as well as smaller EMS companies that often have a regional, product, service or industry-specific focus, and ODMs (including Quanta Computer Inc., Wistron Corp., Delta Network, Inc., and Accton Technology Corp.) that provide internally designed products and manufacturing services. History Celestica Inc. was founded in 1994. The company was incorporated in Ontario in 1996.