Celestica ([CLS | WKN 914782 | ISIN CA15101Q1081] is a leading provider in electronics manufacturing that supports companies from various industries with innovative solutions. Especially noteworthy are Celestica’s contributions in drone and aerospace technology as well as in the growing data center market. The company, headquartered in Toronto and with over 26,000 employees, masters the challenges of modern supply chains and operates in two main segments: Advanced Technology Solutions (ATS) and Connectivity and Cloud Solutions (CCS), which make up 41% and 59% of the total revenue, respectively. The main markets are in Asia, with a diverse customer base of over 100. Since its founding in 1994 and its IPO in 1998, Celestica has shown stable development, with a market capitalization of 5.1 billion CAD and a current stock valuation of 32.69 USD, marking a significant growth since the low point in 2020.

Resilience of supply chains in a dynamic world Nowadays, supply chains are crucial and exposed to enormous risks. Celestica offers as a supply chain expert local implementation, global strategies, and innovations to reduce risks and increase resilience. Real-time monitoring and a proven risk methodology allow for quick responses to geopolitical, health, environmental, and logistical challenges, mitigating risks and strengthening supply chains.

In the aerospace and defense sector, Celestica sets standards. It drives innovation and offers comprehensive electronics lifecycle solutions, supporting customers in accelerating innovation, introducing high-quality systems, and extending the lifespan of their products. Celestica plays a key role in the development and production of drones, UAVs, ship electronics, surface ships, submarines, and components for commercial aviation, including cockpit avionics and environmental control systems.

Furthermore, Celestica is involved in the space industry, promoting satellite communication and providing robust optical solutions and testing capabilities for satellite networks, including mechanical testing, PCB assembly, and optical alignment systems.

Strong results and positive outlook for 2024 In 2022, Celestica achieved a revenue of 610 million USD in the aerospace and defense sector, with a projected annual market growth of 10.4% until 2025. The company sees a market potential of 941 billion USD. On December 12, 2023, Celestica announced the repurchase of up to 11.8 million of its own shares, which corresponds to 10% of the issued common shares. Currently, the company has 119 million issued shares, with 98.6% in free float. In the previous buyback program, Celestica acquired 2.8 million shares, which should support the stock price.

For the fourth quarter of 2023, Celestica reported a revenue of 2.14 billion USD, a 5% increase compared to the previous year, and revenue growth in its main segments, with margins improving by 30 (ATS) and 80 (CCS) basis points, respectively. Earnings per share rose to 0.76 USD. For the first quarter of 2024, a revenue between 2.0 and 2.2 billion USD and a net profit per share between 0.67 and 0.77 USD are expected.

Management expressed positive views on the Q4 results and the 2023 full-year results, with a revenue growth of 10%, an adjusted earnings per share of 2.43 USD, and an adjusted operating margin of 5.6% – the highest in the company’s history. They also see a continuation of this positive trend for 2024.