Celestica Inc (CLS) 2019 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Celestica Q3 2019 Earnings Call.

女士們，先生們，感謝您的支持，歡迎來到 Celestica 2019 年第三季度財報電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded.

（操作員說明）請注意，今天的會議正在錄製中。

(Operator Instructions) I would now like to hand the conference over to your speaker today, Lisa Headrick, Vice President of Finance.

（操作員說明）我現在想將會議交給今天的發言人，財務副總裁 Lisa Headrick。

Good afternoon and thank you for joining us on Celestica's Third Quarter 2019 Earnings Conference Call.

下午好，感謝您加入我們參加 Celestica 2019 年第三季度收益電話會議。

On the call today are Rob Mionis, President and Chief Executive Officer; and Mandeep Chawla, Chief Financial Officer.

今天接聽電話的是總裁兼首席執行官羅伯·米奧尼斯 (Rob Mionis)；首席財務官 Mandeep Chawla。

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.

提醒一下，在本次電話會議期間，我們將根據 1995 年美國私人證券訴訟改革法案和適用的加拿大證券法做出前瞻性陳述。

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.

此類前瞻性陳述基於管理層當前的預期、預測和假設，這些預期、預測和假設受風險、不確定性和其他因素的影響，這些因素可能導致實際結果和結果與此類陳述中表達的結論、預測或預測存在重大差異。

For identification and discussion of such factors and assumptions as well as further information concerning financial guidance, please refer to today's press release including the cautionary note regarding forward-looking statements therein and our annual report on Form 20-F and other public filings, which can be accessed at sec.gov and sedar.com.

有關此類因素和假設的識別和討論以及有關財務指導的更多信息，請參閱今天的新聞稿，包括其中有關前瞻性陳述的警示說明以及我們關於 20-F 表格和其他公開文件的年度報告，這些文件可以可在 sec.gov 和 sedar.com 上訪問。

We assume no obligation to update any forward-looking statement, except as required by law.

除非法律要求，否則我們不承擔更新任何前瞻性聲明的義務。

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 expense and adjusted effective tax rate.

此外，在本次電話會議中，我們將參考各種非 IFRS 指標，包括營業收入、營業利潤率、調整後的毛利率、調整後的投資資本回報率或調整後的 ROIC、自由現金流、過去 12 個月的非 IFRS 債務總額調整後的 EBITDA 槓桿率、調整後的淨收益、調整後的每股收益、調整後的 SG&A 費用和調整後的有效稅率。

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.

應提醒聽眾，在本次電話會議中提及任何上述措施均表示非 IFRS 措施，無論是否明確指定為非 IFRS 措施。

These non-IFRS measures do not have any standardized meaning 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.

這些非 IFRS 措施沒有 IFRS 規定的任何標準化含義，可能無法與其他使用 IFRS 或根據美國 GAAP 報告並使用非 GAAP 措施描述類似運營指標的上市公司提出的類似措施相比較。

We refer you to today's press release and our Q3 2019 earnings presentation, which are available at celestica.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.

我們建議您參閱今天的新聞稿和我們的 2019 年第三季度收益報告，可在 celestica.com 的“投資者關係”選項卡下獲取，以了解有關這些和某些其他非 IFRS 措施的更多信息，包括歷史非 IFRS 措施與最從我們的財務報表中直接比較 IFRS 措施。

Unless otherwise specified, all references to dollars on this call are to U.S. dollars.

除非另有說明，否則本次電話會議中所有提及的美元均指美元。

Let me now turn the call over to Rob.

現在讓我把電話轉給 Rob。

Thank you, Lisa.

謝謝你，麗莎。

Good afternoon, and thank you for joining today's conference call.

下午好，感謝您參加今天的電話會議。

Our third quarter results reflect solid execution in a dynamic demand environment.

我們第三季度的業績反映了在動態需求環境中的穩健執行。

We delivered stronger-than-expected results, improving our operating margin sequentially, while driving strong free cash flow.

我們取得了好於預期的業績，連續提高了營業利潤率，同時推動了強勁的自由現金流。

Our CCS segment delivered another quarter of sequential and year-over-year margin improvement, driven by improved mix, bolstered by our portfolio review and cost productivity actions.

我們的 CCS 部門在我們的投資組合審查和成本生產率行動的支持下，在改進組合的推動下，又實現了四分之一的環比和同比利潤率改善。

While demand in the capital equipment market remains muted and the business continued to operate at a loss, we delivered sequential improvements primarily as a result of ongoing cost reduction actions and slightly higher volume.

雖然資本設備市場的需求仍然低迷，業務繼續虧損經營，但我們實現了連續改進，這主要是由於持續的成本削減行動和銷量略有增加。

I will provide some additional color on our end markets and outlook.

我將對我們的終端市場和前景提供一些額外的色彩。

But first, I will turn the call over to Mandeep to give you some details on the third quarter and our fourth quarter guidance.

但首先，我會將電話轉給 Mandeep，向您提供有關第三季度和第四季度指導的一些細節。

Thank you, Rob, and good afternoon, everyone.

謝謝你，Rob，大家下午好。

For the third quarter of 2019, Celestica reported revenue of $1.52 billion, above the high end of our guidance range, due to program-specific demand strength in enterprise.

2019 年第三季度，Celestica 報告的收入為 15.2 億美元，高於我們指導範圍的高端，這是由於企業特定項目的需求強勁。

Revenue increased 5% sequentially and was down 11% year-over-year.

收入環比增長 5%，同比下降 11%。

Our non-IFRS operating margin was 2.8%, above our guidance midpoint of 2.5% and down 50 basis points year-over-year.

我們的非 IFRS 營業利潤率為 2.8%，高於我們 2.5% 的指導中點，同比下降 50 個基點。

Non-IFRS adjusted earnings per share were $0.13, above the midpoint of our guidance range and were negatively impacted by $0.02 per share of taxable foreign exchange.

非 IFRS 調整後每股收益為 0.13 美元，高於我們指導範圍的中點，並受到每股 0.02 美元應稅外彙的負面影響。

Our ATS segment revenue was 37% of our consolidated revenue, up from 33% compared to the third quarter of last year.

我們的 ATS 部門收入占我們綜合收入的 37%，高於去年第三季度的 33%。

ATS revenue was relatively flat sequentially and compared to last year and was slightly above our expectations due to demand strength in both Industrial and Capital Equipment.

由於工業設備和資本設備的需求強勁，ATS 收入與去年相比環比持平，略高於我們的預期。

On a year-over-year basis, lower demand in our Capital Equipment business and lower revenue in our Energy business was offset by high single-digit growth across our other ATS businesses.

與去年同期相比，我們的資本設備業務需求下降和能源業務收入下降被我們其他 ATS 業務的高個位數增長所抵消。

Sequentially, lower revenue in our Energy business, including from disengagements with unprofitable customers, was offset by growth in our Capital Equipment and Industrial businesses.

因此，我們的能源業務收入減少，包括與無利可圖的客戶脫離接觸，被我們的資本設備和工業業務的增長所抵消。

In the third quarter, our CCS segment revenue was down 17% year-over-year, but was above our expectations due to demand strength in Enterprise.

第三季度，我們的 CCS 部門收入同比下降 17%，但由於企業需求強勁，超出了我們的預期。

The year-over-year decline in revenue was primarily driven by enterprise program disengagements as part of our CCS portfolio review as well as continuing end market demand softness in our Communications business.

收入同比下降主要是由於作為我們 CCS 產品組合審查的一部分的企業計劃脫離以及我們通信業務的終端市場需求持續疲軟。

Sequentially, CCS segment revenue was up 9%, driven by increased demand.

在需求增加的推動下，CCS 部門的收入環比增長了 9%。

Within our CCS segment, the Communications end market represented 42% of our consolidated third quarter revenue, down from 43% in the same period last year.

在我們的 CCS 部門中，通信終端市場占我們第三季度綜合收入的 42%，低於去年同期的 43%。

Communications revenue in the quarter was largely in line with our expectations and down 13% year-over-year due to continuing end market weakness, mostly with a few specific programs in our portfolio.

本季度的通信收入基本符合我們的預期，同比下降 13%，原因是終端市場持續疲軟，主要是我們產品組合中的一些特定項目。

Demand strength and new program revenue in support of data center growth partly offset this demand softness.

支持數據中心增長的需求強勁和新項目收入部分抵消了這種需求疲軟。

Our Enterprise end market represented 21% of consolidated revenue in the third quarter, down from 24% in the third quarter of last year.

我們的企業終端市場佔第三季度綜合收入的 21%，低於去年第三季度的 24%。

Enterprise revenue in the quarter was above our expectations, driven by demand strength and was down 24% year-over-year due to planned disengagements in connection with our CCS segment portfolio review, partially offset by new JDM program ramps.

本季度的企業收入高於我們的預期，受需求強勁的推動，同比下降 24%，原因是與我們的 CCS 部門投資組合審查有關的計劃脫離，部分被新的 JDM 計劃斜坡所抵消。

Excluding these disengagements, Enterprise end market revenue would have been relatively flat year-over-year.

排除這些脫離，企業終端市場收入同比將相對持平。

Our top 10 customers represented 67% of revenue for the quarter, up from 65% last quarter and down from 71% in the same period of last year.

我們的前 10 大客戶佔本季度收入的 67%，高於上一季度的 65%，低於去年同期的 71%。

For the third quarter, we had 1 customer contributing more than 10% of total revenue.

第三季度，我們有 1 個客戶貢獻了超過 10% 的總收入。

Turning to segment margins.

轉向部門利潤率。

ATS segment margin of 2.8% was flat relative to last quarter as slightly improved performance in our Capital Equipment business was offset by unfavorable mix in the remainder of ATS.

ATS 部門的利潤率為 2.8%，與上一季度持平，這是因為我們的資本設備業務的業績略有改善被 ATS 其餘部門的不利組合所抵消。

Our Capital Equipment business operated at a loss in the mid single-digit million dollar range, which was slightly better than expected due to stronger-than-anticipated demand and the impact of our cost reduction initiatives.

我們的資本設備業務虧損在中等個位數百萬美元範圍內，由於需求強於預期以及我們的成本削減計劃的影響，這略好於預期。

Year-over-year, ATS segment margin of 2.8% was down 180 basis points primarily driven by losses within the Capital Equipment business and softer performance in our A&D business, largely due to material constraints.

與去年同期相比，ATS 部門的利潤率為 2.8%，下降了 180 個基點，這主要是由於資本設備業務的虧損以及我們的 A&D 業務表現疲軟，這主要是由於材料限制。

These impacts were partially offset by improved contribution from our ramping Industrial and HealthTech businesses.

這些影響部分被我們不斷增長的工業和健康科技業務的貢獻所抵消。

Excluding Capital Equipment, our ATS business performed well.

不包括資本設備，我們的 ATS 業務表現良好。

CCS segment margin of 2.8% was up 40 basis points sequentially, up 10 basis points year-over-year and was in the high end of our CCS target margin range of 2% to 3%.

CCS 分部利潤率為 2.8%，環比上升 40 個基點，同比上升 10 個基點，處於我們 2% 至 3% 的 CCS 目標利潤率範圍的高端。

The year-over-year improvement was the result of improved mix and productivity, more than offsetting the impact of lower year-to-year revenue.

同比改善是產品組合和生產力改善的結果，遠遠抵消了同比收入下降的影響。

Moving to some other financial highlights for the quarter.

轉到本季度的其他一些財務亮點。

IFRS net loss for the quarter was negative $6.9 million or negative $0.05 per share compared to net earnings of $8.6 million or positive $0.06 per share in the same quarter of last year.

本季度的 IFRS 淨虧損為負 690 萬美元或每股負 0.05 美元，而去年同期為淨收益 860 萬美元或每股正 0.06 美元。

The decrease was due to lower gross profit and higher financing and amortization costs.

減少的原因是毛利減少以及融資和攤銷成本增加。

Adjusted gross margin of 6.6% was down 40 basis points sequentially primarily driven by mix and higher variable expenses.

調整後的毛利率為 6.6%，環比下降 40 個基點，主要受組合和更高可變費用的推動。

Adjusted gross margin was down 10 basis points year-over-year due to weaker ATS performance including in Capital Equipment, partially offset by improved mix and productivity in CCS.

調整後的毛利率同比下降 10 個基點，原因是包括資本設備在內的 ATS 表現較弱，部分被 CCS 的組合和生產率改善所抵消。

Our adjusted SG&A of $49 million was better than expected and down $7 million sequentially primarily due to favorable foreign exchange impacts and lower-than-expected variable spend.

我們調整後的 SG&A 為 4900 萬美元，好於預期，環比下降 700 萬美元，這主要是由於有利的外匯影響和低於預期的可變支出。

Non-IFRS operating earnings were $42.6 million, up $5.9 million sequentially and down $13.8 million from the same quarter of last year.

非 IFRS 營業利潤為 4260 萬美元，比上一季度增加 590 萬美元，比去年同期減少 1380 萬美元。

Our non-IFRS adjusted effective tax rate for the third quarter was 46%, higher than our anticipated estimate of approximately 36% due to taxable FX costs driven by the depreciation of the Chinese RMB against the U.S. dollar.

我們第三季度的非 IFRS 調整後實際稅率為 46%，高於我們預期的約 36%，這是由於人民幣兌美元貶值導致的應稅外匯成本。

As discussed last quarter, our tax rate continues to be higher than our originally anticipated range for 2019 due to lower levels of income including losses in certain low tax geographies.

正如上個季度所討論的那樣，由於收入水平較低，包括某些低稅收地區的損失，我們的稅率繼續高於我們最初預期的 2019 年範圍。

Adjusted net earnings for the third quarter were $16.6 million compared to $36 million for the prior year period.

第三季度調整後淨收益為 1660 萬美元，上年同期為 3600 萬美元。

Non-IFRS adjusted earnings per share of $0.13 was above the midpoint of our guidance and was down $0.13 year-over-year, mainly due to lower non-IFRS operating earnings and higher interest expense.

非 IFRS 調整後每股收益為 0.13 美元，高於我們指引的中點，同比下降 0.13 美元，這主要是由於非 IFRS 營業收入下降和利息支出增加。

Non-IFRS adjusted ROIC of 10.1% was up 1.7% sequentially and down 6.1% year-over-year primarily driven by lower operating earnings.

非 IFRS 調整後的 ROIC 為 10.1%，環比增長 1.7%，同比下降 6.1%，主要原因是營業收入下降。

Moving on to working capital.

轉向營運資金。

Our inventory at the end of the quarter was $1.0 billion, a decrease of $52 million sequentially.

本季度末我們的庫存為 10 億美元，環比減少 5200 萬美元。

Inventory turns were 5.4, an improvement of 0.4 turns quarter-over-quarter and down 0.8 turns year-over-year.

庫存周轉率為 5.4，環比提高 0.4，同比下降 0.8。

Capital expenditures for the third quarter were $22 million or 1.4% of revenue.

第三季度的資本支出為 2200 萬美元，佔收入的 1.4%。

Non-IFRS free cash flow was $66 million in the third quarter compared to $25 million for the same period last year primarily driven by improved working capital.

第三季度非 IFRS 自由現金流為 6600 萬美元，而去年同期為 2500 萬美元，這主要是由於營運資金的改善。

We continue to be encouraged by the improvements we have made in our working capital performance.

我們在營運資本績效方面取得的改善繼續令我們感到鼓舞。

Year-to-date, we have generated $257 million of non-IFRS free cash flow or $144 million without accounting for the Toronto property sale proceeds of $113 million.

年初至今，我們已經產生了 2.57 億美元的非 IFRS 自由現金流或 1.44 億美元，其中不包括 1.13 億美元的多倫多房地產銷售收益。

Cash cycle days in the third quarter were 61 days, an improvement of 4 days sequentially, primarily due to improvements in inventory performance.

第三季度的現金周轉天數為 61 天，環比增加 4 天，這主要是由於庫存績效的改善。

Our cash deposits reduced to $108 million, down $31 million from last quarter, as certain customer deposits were returned as inventory reduced.

我們的現金存款減少至 1.08 億美元，比上一季度減少 3100 萬美元，因為某些客戶存款因庫存減少而退回。

We can continue to work with our customers on targeted inventory reductions, which we expect will be partially offset by a reduction in cash deposits in future quarters.

我們可以繼續與客戶合作，有針對性地減少庫存，我們預計這將在未來幾個季度被現金存款的減少部分抵消。

Moving on to our balance sheet and other key measures.

繼續我們的資產負債表和其他關鍵措施。

We continue to maintain a strong balance sheet and remain committed to our long-term capital allocation priorities.

我們繼續保持強勁的資產負債表，並繼續致力於我們的長期資本配置優先事項。

Our cash balance at quarter end was $449 million, up $12 million sequentially and down $9 million year-over-year.

我們在季度末的現金餘額為 4.49 億美元，環比增加 1200 萬美元，同比減少 900 萬美元。

We made further progress in the quarter on deleveraging our balance sheet by repaying the full outstanding balance on our bank revolver, reducing the balance from $53 million as of June 30, 2019, to $0 as of September 30.

我們在本季度通過償還銀行循環貸款的全部未償餘額，在資產負債表去槓桿化方面取得了進一步進展，將餘額從 2019 年 6 月 30 日的 5300 萬美元減少到 9 月 30 日的 0 美元。

Our gross debt position was $594 million at the end of September, down $54 million sequentially, while our gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio was 2.1x, down from 2.3x as of June 30.

截至 9 月底，我們的總債務頭寸為 5.94 億美元，環比下降 5400 萬美元，而我們的總債務與非 IFRS 追踪 12 個月調整後 EBITDA 槓桿比率為 2.1 倍，低於 6 月 30 日的 2.3 倍。

Restructuring charges related to our cost efficiency initiatives were $10 million this quarter, bringing the total program spend to date to approximately $70 million.

本季度與我們的成本效率計劃相關的重組費用為 1000 萬美元，使迄今為止的計劃總支出達到約 7000 萬美元。

Now turning to our guidance for the fourth quarter of 2019.

現在轉向我們對 2019 年第四季度的指導。

We are projecting fourth quarter revenue to be in the range of $1.425 billion to $1.525 billion.

我們預計第四季度收入將在 14.25 億美元至 15.25 億美元之間。

At the midpoint of this range, revenue would be down approximately 15% year-over-year.

在此範圍的中點，收入將同比下降約 15%。

Fourth quarter non-IFRS adjusted earnings are expected to range between $0.12 to $0.18 per share.

第四季度非 IFRS 調整後每股收益預計在 0.12 美元至 0.18 美元之間。

At the midpoint of our revenue and adjusted EPS guidance ranges, non-IFRS operating margin would be approximately 2.8%, flat to the third quarter with lower revenue.

在我們的收入和調整後的 EPS 指導範圍的中點，非 IFRS 營業利潤率約為 2.8%，與收入較低的第三季度持平。

Non-IFRS adjusted SG&A expense for the fourth quarter is expected to be in the range of $50 million to $52 million.

第四季度非 IFRS 調整後的 SG&A 費用預計在 5000 萬至 5200 萬美元之間。

Based on the projected geographical mix of our profit in the fourth quarter, we anticipate our non-IFRS adjusted effective tax rate to be approximately 35%.

根據我們第四季度利潤的預計地域組合，我們預計我們的非 IFRS 調整後有效稅率約為 35%。

This does not include the impact of taxable foreign exchange and any unanticipated tax settlements.

這不包括應稅外彙和任何意外稅收結算的影響。

Turning to our end market outlook for the fourth quarter.

轉向我們對第四季度的終端市場展望。

In our ATS end market, we anticipate revenue to be up in the low single digits percentage range year-over-year, as growth across most of our ATS businesses, including in Capital Equipment, is expected to be partly offset by the impact of program disengagements in our Energy business.

在我們的 ATS 終端市場，我們預計收入將同比增長在較低的個位數百分比範圍內，因為我們大多數 ATS 業務（包括資本設備）的增長預計將部分被計劃的影響所抵消我們能源業務的脫離。

In our Communications end market, we anticipate revenue to decrease in the low-teen percentage range year-over-year, driven by continuing end market demand softness, mostly with a few specific programs in our portfolio.

在我們的通信終端市場，由於終端市場需求持續疲軟，我們預計收入將同比下降 10% 左右，主要是我們產品組合中的一些特定項目。

In our Enterprise end market, we anticipate revenue to decrease in the high 30% range year-over-year, driven by planned program disengagements as part of our CCS portfolio review and lower demand when compared to a very strong fourth quarter last year.

在我們的企業終端市場，我們預計收入將同比下降 30% 左右，這是由於作為我們 CCS 產品組合審查的一部分而計劃的項目脫離以及與去年第四季度非常強勁的需求相比較低的需求所推動的。

I'll now turn the call over to Rob for additional color and an update on our priorities.

我現在將電話轉給 Rob 以獲取更多顏色和更新我們的優先事項。

Thank you, Mandeep.

謝謝你，曼迪普。

Overall, although adverse market conditions persist, I am encouraged that in the third quarter, we delivered sequential improvement in our operating margin, continue to generate strong free cash flow and in the fourth quarter, are projecting stable operating margin performance while growing adjusted EPS.

總體而言，儘管不利的市場狀況持續存在，但令我感到鼓舞的是，在第三季度，我們的營業利潤率實現了連續改善，繼續產生強勁的自由現金流，在第四季度，預計營業利潤率表現穩定，同時調整後的每股收益增長。

We are seeing the benefits of our CCS portfolio review program, our cost productivity initiatives and the benefit of certain program ramps across our business.

我們看到了 CCS 組合審查計劃的好處、我們的成本生產力計劃以及某些計劃在我們業務中的好處。

Within the ATS segment, our productivity initiatives in our Capital Equipment business are beginning to deliver results.

在 ATS 部門，我們在資本設備業務中的生產力舉措開始取得成果。

Although not yet at breakeven, our Capital Equipment business improved and delivered a smaller sequential loss in the third quarter, resulting primarily from our productivity initiatives and slightly higher revenue from new program ramps.

儘管尚未達到盈虧平衡，但我們的資本設備業務有所改善並在第三季度實現了較小的連續虧損，這主要是由於我們的生產力舉措和新計劃的收入略有增加。

The demand environment in the semiconductor market continues to remain soft.

半導體市場的需求環境繼續保持疲軟。

However, we are seeing some signs of improvement, and our customers are forecasting a moderate level of demand growth in the first half of 2020, driven by growing demand for new technology equipment.

然而，我們看到了一些改善的跡象，我們的客戶預測，在對新技術設備不斷增長的需求的推動下，2020 年上半年的需求將適度增長。

While it is too early for us to size the level of demand that will return in 2020, we are encouraged that the demand outlook in semiconductor is more promising than it was 3 months ago.

雖然我們現在評估 2020 年將恢復的需求水平還為時過早，但我們感到鼓舞的是，半導體的需求前景比 3 個月前更有希望。

Within our display business, revenues remain depressed.

在我們的顯示器業務中，收入仍然低迷。

We expect a moderate level of recovery late next year as we anticipate that the demand for next-generation smartphones and large form factor displays will increase.

由於我們預計對下一代智能手機和大尺寸顯示器的需求將會增加，我們預計明年年底將出現適度復甦。

While we anticipate our Capital Equipment business to generate a loss in the low single-digit millions in the fourth quarter, we are working towards breakeven profitability or better in the near term.

雖然我們預計我們的資本設備業務在第四季度將產生數百萬美元的低虧損，但我們正在努力在短期內實現盈虧平衡或更好。

Improvements will largely be driven by our cost productivity initiatives and volume leverage as our bookings convert to revenue.

隨著我們的預訂轉化為收入，改進將主要由我們的成本生產力計劃和數量槓桿驅動。

I firmly believe in the long-term fundamentals of the capital equipment market.

我堅信資本設備市場的長期基本面。

We believe that when the capital equipment market recovers, the capabilities and infrastructure we have in place will position us well for revenue growth and margin expansion.

我們相信，當資本設備市場復甦時，我們現有的能力和基礎設施將使我們在收入增長和利潤率擴張方面處於有利地位。

Across the balance of our ATS segment, we are seeing the benefits of new program ramps in Industrial and HealthTech, and we expect improved profitability as we continue to add scale to these businesses.

在我們 ATS 部門的平衡中，我們看到了工業和健康科技新項目的好處，我們預計隨著我們繼續擴大這些業務的規模，盈利能力將有所提高。

Our A&D business continues to perform well, notwithstanding inefficiencies, largely caused by materials constraints.

我們的 A&D 業務繼續表現良好，儘管效率低下，這主要是由於材料限製造成的。

Looking ahead, we continue to focus on expanding margins in our ATS segment as a result of strengthening demand in our Capital Equipment business, growth in our other ATS markets and productivity initiatives.

展望未來，由於資本設備業務的需求增強、其他 ATS 市場的增長和生產力舉措，我們將繼續專注於擴大 ATS 部門的利潤率。

We have a strong pipeline of sales opportunities and strong bookings momentum with new wins across all of our ATS markets, which we believe positions us well to drive growth over the long term.

我們擁有強大的銷售機會渠道和強勁的預訂勢頭，在我們所有的 ATS 市場都取得了新的勝利，我們相信這使我們能夠很好地推動長期增長。

Turning to CCS.

轉向 CCS。

Overall, I am pleased with the performance of our CCS segment in the third quarter.

總的來說，我對第三季度 CCS 部門的表現感到滿意。

Despite significantly lower revenue relative to last year, our CCS segment improved margin and operated in the high end of our 2% to 3% target range as a result of our portfolio and cost productivity actions.

儘管與去年相比收入顯著下降，但由於我們的投資組合和成本生產力行動，我們的 CCS 部門提高了利潤率並在我們 2% 至 3% 的目標範圍的高端運營。

As a reminder, we launched our CCS portfolio review at the end of 2018 in light of evolving market dynamics in the EMS industry including the increased commoditization of certain products.

提醒一下，鑑於 EMS 行業不斷變化的市場動態，包括某些產品商品化程度的提高，我們於 2018 年底啟動了 CCS 產品組合審查。

The goal of this review was to identify programs that were not expected to generate sufficient returns over the long term and to work closely with our customers to address these gaps with the goal of improving CCS segment margins and releasing working capital.

本次審查的目的是確定預計不會在長期內產生足夠回報的計劃，並與我們的客戶密切合作以解決這些差距，以提高 CCS 部門利潤率和釋放營運資金。

As a result of this review, we successfully negotiated improved commercial terms on a number of programs and identified programs with approximately $500 million of annualized revenues, which we agreed with our customers to transition or not renew.

作為這次審查的結果，我們成功地就許多項目商定了改進的商業條款，並確定了年收入約為 5 億美元的項目，我們與客戶同意過渡或不續約。

These planned program disengagements, which are largely in our Enterprise market, are on track to be completed by the end of 2019 with an anticipated full year 2019 revenue decline of just over $400 million relative to last year as a result of the portfolio review and cost productivity actions.

這些計劃中的計劃脫離，主要在我們的企業市場，有望在 2019 年底前完成，由於投資組合審查和成本，預計 2019 年全年收入將比去年下降 4 億美元多一點生產力行動。

Third quarter year-to-date CCS segment margin is up 30 basis points relative to last year.

今年第三季度 CCS 部門的利潤率比去年上升了 30 個基點。

We are pleased that the actions associated with this program are having their intended results.

我們很高興與該計劃相關的行動正在取得預期結果。

Over the last 2 years, we have experienced significant declines in our Communications end market with revenue down 14% year-to-date on a year-over-year basis.

在過去 2 年中，我們的通信終端市場經歷了顯著下滑，今年迄今收入同比下降 14%。

These declines are largely due to program-specific market dynamics and, in some cases, have resulted in returns below our financial targets.

這些下降主要是由於特定項目的市場動態，在某些情況下，導致回報低於我們的財務目標。

While we have been in active discussions with a number of our customers on actions to improve our returns, we have come to a mutual agreement with Cisco to begin a planned and phased exit of existing programs beginning in 2020.

雖然我們一直在與我們的許多客戶就提高回報的行動進行積極討論，但我們已與思科達成共同協議，從 2020 年開始有計劃地分階段退出現有計劃。

We believe this decision will enable both companies to better deliver on their strategic priorities.

我們相信這一決定將使兩家公司能夠更好地實現其戰略重點。

As a result of the nonrenewal of these programs, we're adding our revenue with Cisco to the CCS portfolio review program, which is currently underway.

由於這些計劃不再更新，我們將我們與思科的收入添加到目前正在進行的 CCS 產品組合審查計劃中。

In the third quarter of 2019, Cisco represented 13% of revenue.

2019 年第三季度，思科佔收入的 13%。

At this level, Cisco would represent approximately $750 million of the company's revenue in 2019.

在這個水平上，思科將代表公司 2019 年收入的約 7.5 億美元。

As a result, the overall revenue impact of the CCS portfolio review will increase from approximately $500 million to $1.25 billion.

因此，CCS 投資組合審查對總收入的影響將從大約 5 億美元增加到 12.5 億美元。

The impact of expanding this portfolio review will be negligible to our fourth quarter and has already been factored into our guidance.

擴大這一投資組合審查對我們第四季度的影響可以忽略不計，並且已經被納入我們的指導方針。

As we look to 2020, we expect that the impact of our portfolio review program, to which we are now adding Cisco revenue, will result in a revenue reduction in the range of $400 million to $600 million as compared to 2019 and expect the transition to be largely completed by the end of 2020.

展望 2020 年，我們預計，與 2019 年相比，我們的產品組合審查計劃（我們現在將思科收入添加到該計劃中）的影響將導致收入減少 4 億至 6 億美元，並預計過渡到到2020年底基本完成。

As a result of the Cisco program transitions, we anticipate approximately $30 million in additional restructuring charges in 2020 as we realign our cost base.

由於思科計劃的過渡，我們預計在 2020 年我們將重新調整成本基礎，從而產生大約 3000 萬美元的額外重組費用。

We anticipate a negligible impact to adjusted EPS next year as we execute the necessary cost actions and redeploy our resources to support growth in other areas of our business.

我們預計明年調整後每股收益的影響可以忽略不計，因為我們會執行必要的成本行動並重新部署資源以支持我們業務其他領域的增長。

We look forward to working with Cisco's incredible team and providing remarkable customer support to ensure a successful transition.

我們期待與思科出色的團隊合作，並提供卓越的客戶支持，以確保成功過渡。

While we are not providing revenue guidance for 2020 at this time, we do anticipate revenue growth in other areas of our CCS segment including our emerging enterprise and cloud engagements, fueled by our JDM solutions and revenue growth in ATS to help partially offset the revenue decline resulting from the Cisco transition.

雖然我們目前不提供 2020 年的收入指導，但我們確實預計 CCS 部門其他領域的收入增長，包括我們的新興企業和雲業務，這得益於我們的 JDM 解決方案和 ATS 的收入增長，以幫助部分抵消收入下降思科轉型的結果。

We continue to drive the actions we believe are necessary to deliver shareholder value over the long term.

我們將繼續推動我們認為對實現股東長期價值所必需的行動。

And while we anticipate 2020 revenue declines from current levels, we're anticipating year-to-year growth in both operating margin and adjusted earnings per share.

雖然我們預計 2020 年的收入將從目前的水平下降，但我們預計營業利潤率和調整後的每股收益都會同比增長。

To be clear, Celestica's long-term success will be built by having strong franchises in both our ATS and our CCS segments.

需要明確的是，Celestica 的長期成功將建立在我們的 ATS 和 CCS 領域的強大特許經營權之上。

We remain focused on delivering high-value solutions in CCS including JDM while continuing to invest in new capabilities.

我們仍然專注於提供包括 JDM 在內的 CCS 高價值解決方案，同時繼續投資於新功能。

We believe the actions we are taking are strengthening our company and will position us to help our customers succeed over the long term.

我們相信我們正在採取的行動正在加強我們的公司，並將使我們能夠幫助我們的客戶長期取得成功。

Now before I open the call for questions, I want to highlight a recognition that we recently received from one of our CCS customers, Hitachi.

現在，在我開始提問之前，我想強調一下我們最近從我們的一位 CCS 客戶 Hitachi 那裡得到的認可。

We are proud to have been recognized by Hitachi with their Partner of the Year award.

我們很自豪能夠獲得 Hitachi 的年度合作夥伴獎。

This prestigious award is presented annually to 1 partner from across Hitachi's global network of companies.

這一享有盛譽的獎項每年頒發給來自日立全球公司網絡的一位合作夥伴。

This significant achievement is a testament to the work of all our employees around the world who support this important customer.

這一重大成就證明了我們在世界各地支持這一重要客戶的所有員工所做的工作。

I'd like to take this opportunity to thank our employees for their hard work, our customers for their support and loyalty and our shareholders for their continued support of Celestica.

我想藉此機會感謝我們員工的辛勤工作、我們客戶的支持和忠誠以及我們股東對 Celestica 的持續支持。

We look forward to updating you on our progress over the coming quarters.

我們期待著向您通報我們在未來幾個季度取得的進展。

With that, I would like now to turn the call over to the operator to begin our Q&A.

有了這個，我現在想把電話轉給接線員開始我們的問答。

(Operator Instructions) Your first question comes from the line of Gus Papageorgiou from PI Financial.

（操作員說明）您的第一個問題來自 PI Financial 的 Gus Papageorgiou。

Just wondering, can you kind of remind us again what your margin goals are for ATS and CCS?

只是想知道，您能否再次提醒我們您對 ATS 和 CCS 的利潤目標是什麼？

And as you transition Cisco out, your longer-term goals that you established, do you think they have -- there's upside to those goals?

當你將思科轉移出去時，你建立的長期目標，你認為他們有 - 這些目標有好處嗎？

Or are you not ready to make that commitment yet?

還是您還沒有準備好做出承諾？

And then secondly, obviously, the Cisco is a big deal.

其次，很明顯，思科是一個大問題。

And I'm just wondering, Juniper has had or has been historically your second biggest customer.

我只是想知道，Juniper 已經或者一直是您的第二大客戶。

What are the implications for the existing customer base in CCS?

對 CCS 的現有客戶群有何影響？

Do you anticipate that you -- that there's a chance you lose other big customers?

您是否預料到您可能會失去其他大客戶？

Or do you think that with Cisco, that kind of -- you kind of turned the page on that chapter?

或者你認為思科，那種 - 你有點翻過那一章的頁面？

Okay.

好的。

I got this.

我懂了。

Mandeep here.

曼迪普在這裡。

Nice to talk to you again.

很高興再次和你交談。

I'll take the first question.

我先回答第一個問題。

I'll let Rob chime in for the second one.

我會讓 Rob 插話第二個。

So yes, as a reminder, on our margin targets, they remain the same.

所以是的，提醒一下，我們的保證金目標保持不變。

So we are targeting to get back into the 5% to 6% margin range for ATS.

因此，我們的目標是讓 ATS 的利潤率回到 5% 到 6% 的範圍內。

As a reminder, we were in that range as early as the second quarter of last year.

提醒一下，我們早在去年第二季度就處於該範圍內。

We believe the things that we're working on right now are going to get us there as Capital Equipment recovers, as we continue to ramp the programs in Industrial and HealthTech and as the constrained environment in A&D eases.

我們相信，隨著 Capital Equipment 的恢復、我們繼續加大工業和 HealthTech 的計劃以及 A&D 的受限環境的緩解，我們現在正在做的事情將使我們到達那裡。

We're expecting to be back in that range, and we're working towards being in the higher end of that range.

我們期望回到該範圍內，並且我們正在努力處於該範圍的高端。

On the CCS side, the range is 2% to 3%.

在 CCS 方面，範圍是 2% 到 3%。

We're happy that we've been able to be in that range now ever since the second quarter of last year.

我們很高興自去年第二季度以來我們現在能夠處於該範圍內。

Pleased with the performance that we saw this year as well and just targeting to continue to be firmly within the middle of that range.

我們對今年的表現也感到滿意，並希望繼續堅定地保持在該範圍的中間。

We believe that when those things happen, it will bring our margins to the higher levels.

我們相信，當這些事情發生時，它將把我們的利潤率提高到更高的水平。

We continue to target moving towards 3.75% to 4.5%.

我們繼續以 3.75% 至 4.5% 為目標。

And when we're in both of those zip codes, if you will, we believe that will happen.

當我們同時使用這兩個郵政編碼時，如果您願意，我們相信這會發生。

We're just not calling out the timing right now just because of the market and how dynamic they can be.

我們只是因為市場以及它們的動態性而不會立即宣佈時機。

And I'll let Rob talk about the second question.

我會讓 Rob 談談第二個問題。

Gus, so with respect to any potential additional portfolio actions, the actions -- I guess, the programs that are in the current program, I think once fully realized will leave us with a solid CCS portfolio.

Gus，所以關於任何潛在的額外投資組合行動，這些行動——我想，當前計劃中的計劃，我認為一旦完全實現，我們就會擁有一個可靠的 CCS 投資組合。

So we're not planning any major actions, additional actions at this time.

所以我們目前不打算採取任何重大行動和其他行動。

Obviously, as the markets evolve and things will continue to assess.

顯然，隨著市場的發展，事情將繼續評估。

But right now, as you put it, I think, once we turn the page with Cisco, I think the CCS portfolio will be in very good shape.

但現在，正如你所說，我認為，一旦我們與思科翻開這一頁，我認為 CCS 產品組合將處於非常好的狀態。

Your next question comes from the line of Thanos Moschopoulos from BMO Capital Markets.

你的下一個問題來自 BMO Capital Markets 的 Thanos Moschopoulos。

Rob, maybe to expand on Gus' question.

Rob，也許是為了進一步說明 Gus 的問題。

Was -- were there any characteristics regarding the Cisco business that we did a bit different from the rest of the CCS business that's remaining with you?

是 - 我們所做的思科業務是否有任何特徵與您保留的 CCS 業務的其他部分有所不同？

Maybe lower levels of JDM content or anything else you can point to that would make it different?

也許較低級別的 JDM 內容或您可以指出的任何其他內容會使它有所不同？

Yes, thanks, Thanos, for the question.

是的，謝謝 Thanos 提出的問題。

We can't really comment specifically on the Cisco portfolio.

我們無法真正具體評論思科產品組合。

The only thing I can say is Cisco, as we've reported, regularly the revenues have been declining, at least in our business, which actually put cost pressure on the entire program and that had a lot to do with a mutual decision to do a planned and a phased exit.

我唯一能說的是思科，正如我們所報導的那樣，收入經常下降，至少在我們的業務中，這實際上給整個項目帶來了成本壓力，這與共同決定做事有很大關係有計劃的分階段退出。

And then maybe just from a competitive perspective, is it the case that other EMS providers are being maybe less disciplined than you are with respect to the profitability they're targeting?

然後，也許只是從競爭的角度來看，其他 EMS 供應商在他們的目標盈利能力方面是否比您更嚴格？

Or is it that perhaps others can deliver on the Cisco business more profitably than you can for some structural reasons?

還是由於某些結構性原因，其他人可以比您更有利地交付思科業務？

I think some of it has to do with mix, some of it has to do with volume leverage.

我認為其中一些與混合有關，其中一些與交易量槓桿有關。

I would think those 2 things are key contributors.

我認為這兩件事是關鍵貢獻者。

From a cost perspective, frankly, I think our factories are the best in the world, and we're very productive in our factories and our quality is second to none.

從成本的角度來看，坦率地說，我認為我們的工廠是世界上最好的，我們工廠的生產率非常高，我們的質量也是首屈一指的。

And then finally, for, I guess, either of you on the tariff impact.

最後，我想，你們中的任何一個都對關稅影響。

Any update there in terms of what you're seeing?

就您所看到的而言，那裡有任何更新嗎？

The tariff impact.

關稅影響。

I think it's the beat goes on, as they say.

正如他們所說，我認為節拍還在繼續。

We haven't noticed any more material changes than we've seen in the past.

與過去相比，我們沒有註意到任何更多的實質性變化。

We generally think about it in 2 ways.

我們通常以兩種方式考慮它。

We have traditional OEMs, which have been more measured in their actions.

我們有傳統的原始設備製造商，他們的行為更加謹慎。

And then there's customers who consume their own demand, if you will, and they've been a little bit more active in their measures, and we're working with them to find alternative solutions if they seek some.

還有一些客戶會消耗他們自己的需求，如果你願意的話，他們在他們的措施中更加積極一些，如果他們尋求一些替代解決方案，我們正在與他們合作。

Broadly in the market, I would say we've been a net recipient of market share as we've chosen to go after it.

在廣泛的市場上，我會說我們一直是市場份額的淨接受者，因為我們選擇了追求它。

Your next question comes from the line of Paul Steep from Scotia Capital.

你的下一個問題來自 Scotia Capital 的 Paul Steep。

Rob or Mandeep, could you really talk a little bit about what -- how we should think about the working capital release that might come post the disengagement with Cisco in terms of the inventory reduction?

Rob 或 Mandeep，你真的能談談什麼——我們應該如何考慮在庫存減少方面與思科脫離接觸後可能出現的營運資金釋放？

I know you talked about some offsets on cash deposits, Mandeep, but that would be helpful.

我知道你談到了現金存款的一些抵消，Mandeep，但這會有所幫助。

And then I've got 2 quick follow-ups.

然後我有 2 個快速跟進。

Yes, Paul.

是的，保羅。

So we do expect to see a positive cash impact as a result of this and that will be net of restructuring.

因此，我們確實預計會因此而看到積極的現金影響，並且這將是重組的淨額。

We're not giving any specific targets at this point, but I'll point to a few things.

我們目前沒有給出任何具體目標，但我會指出幾件事。

We continue to target $100 million to $150 million of free cash flow in a steady state.

我們繼續將穩定的自由現金流目標定為 1 億至 1.5 億美元。

And we believe that with the decline in revenue with Cisco, we will be able to look at that as an opportunity on top of the $100 million to $150 million.

我們相信，隨著思科收入的下降，我們將能夠將其視為 1 億至 1.5 億美元之外的機會。

If you look at the free cash flow generation this year where revenue was down a little bit over 10%, we're in the mid 200 -- close to $250 million right now.

如果你看看今年的自由現金流量，收入下降了 10% 以上，我們在 200 左右——現在接近 2.5 億美元。

You back out the property sale, we're still at close to $150 million of free cash flow and that's for the first 3 quarters.

你退出房地產銷售，我們的自由現金流仍然接近 1.5 億美元，這是前三個季度的情況。

So it shows that the formula can work.

所以它表明該公式可以工作。

And we believe that we're going to see some positive impacts next year as a result.

我們相信明年我們將看到一些積極的影響。

Okay.

好的。

And how should we think about the distribution component of that CCS business?

我們應該如何考慮 CCS 業務的分配部分？

Is it -- have we materially sized it to a nominal amount after this -- when you sort of exit this amount finally?

是嗎 - 我們是否在此之後將其實際調整為名義金額 - 當你最終退出這個金額時？

And then 1 follow-up on ATS.

然後對 ATS 進行 1 次跟進。

If you could talk a little bit about some of the new wins that you referenced across other areas as well, that would be helpful.

如果你能談談你在其他領域也提到的一些新勝利，那將會很有幫助。

Sure, Paul, I'll take the first part.

當然，保羅，我來做第一部分。

So maybe just as a recap, again, we expect that the impact from the program disengagements is going to be in the ballpark of $400 million to $600 million next year.

因此，也許只是回顧一下，我們預計明年計劃脫離的影響將在 4 億至 6 億美元左右。

And so we will be still having a decent amount of revenue with Cisco in 2020.

因此，到 2020 年，我們仍將在思科獲得可觀的收入。

Of course, they will be a little bit more heavily weighted in the first half of the year versus the second half of the year as we expect it to be substantially complete by the end of the year.

當然，與下半年相比，它們在上半年的權重會更高一些，因為我們預計它會在年底前基本完成。

As a reminder, we will be expecting growth in other parts of our business.

提醒一下，我們將期待我們業務其他部分的增長。

So we expect strong organic growth in ATS based on the many wins that we have been ramping.

因此，我們預計基於我們一直在取得的許多勝利，ATS 將實現強勁的有機增長。

And then we do expect some organic growth in CCS as well.

然後我們確實預計 CCS 也會有一些有機增長。

The other thing I'll just highlight again is that through the cost actions that we are targeting to take in the Cisco portfolio, we're expecting that the impact to EPS from that will be negligible in 2020.

我要再次強調的另一件事是，通過我們計劃在思科產品組合中採取的成本行動，我們預計到 2020 年這對 EPS 的影響可以忽略不計。

And then given the growth that we're expecting in other parts of the business as well as some of the profitability improvements we're expecting through volume leverage, we do expect to grow EPS in the rest of the business.

然後考慮到我們預期業務其他部分的增長以及我們預期通過數量槓桿實現的一些盈利能力改善，我們確實希望其他業務的每股收益增長。

And Paul, with respect to the second question, we're seeing strong growth in A&D.

保羅，關於第二個問題，我們看到了 A&D 的強勁增長。

We're seeing strong growth in Industrial.

我們看到工業領域的強勁增長。

It's driven by Industrial connectivity, Internet of Things.

它由工業連接、物聯網驅動。

Health care is growing quite nicely.

醫療保健發展得很好。

Surgical devices, implants, diagnostic equipment, capital equipment.

手術設備、植入物、診斷設備、資本設備。

There's 4 elements of capital equipment in our business.

我們的業務中有 4 個資本設備要素。

Semi cap is coming into its own.

半市值正在發揮作用。

It's being led by logic and foundry spend and 3D NAND.

它由邏輯和代工支出以及 3D NAND 引領。

We're also seeing some strength in industrial capital equipment.

我們也看到了工業資本設備的一些實力。

And I think I've actually covered it all.

我想我實際上已經涵蓋了所有內容。

Your next question comes from the line of Ruplu Bhattacharya from Bank of America Merrill Lynch.

你的下一個問題來自美銀美林的 Ruplu Bhattacharya。

This is Ziv Israel filling in for Ruplu.

這是 Ziv Israel 代替 Ruplu。

So regarding the plan to focus the business in the Enterprise segment, it sounds like you are pretty happy with where the portfolio is.

因此，關於將業務集中在企業部門的計劃，聽起來您對投資組合的位置非常滿意。

Should we see the process as completely done?

我們應該看到這個過程已經完成了嗎？

Or do you still see opportunity to fund the portfolio further?

或者您是否仍然看到進一步為投資組合提供資金的機會？

And maybe more generally, how should we view the CCS margin progression over the next few years?

也許更一般地說，我們應該如何看待未來幾年的 CCS 利潤率進展？

So I'll take the first part of that.

所以我將採取第一部分。

In terms of the actions that we've announced so far, I think once they are completed, I think the portfolio within CCS will be in very good shape.

就我們目前宣布的行動而言，我認為一旦完成，CCS 內的投資組合將處於非常良好的狀態。

The first round of actions was obviously centered around Enterprise and adding the Communications, Cisco communications program to it.

第一輪行動顯然以企業為中心，並向其添加了通信、思科通信程序。

I think those 2 things combined, we'll -- that's exactly where we are with a nice mix in our CCS portfolio.

我認為這兩件事結合起來，我們將 - 這正是我們在 CCS 產品組合中的完美組合。

With respect to margins, I'll let Mandeep address that.

關於邊距，我會讓 Mandeep 解決這個問題。

Yes.

是的。

So as I mentioned, our target margin range for CCS is 2% to 3%.

所以正如我提到的，我們的 CCS 目標利潤率範圍是 2% 到 3%。

We were at the higher end of that range this past quarter.

上個季度我們處於該範圍的高端。

But just to highlight what is obvious, which is we are doing not only a significant transformation in the company, but we're also doing a significant transformation within CCS as we continue to invest in areas like JDM and grow in many other growth areas.

但只是為了強調顯而易見的一點，即我們不僅在公司進行重大轉型，而且隨著我們繼續投資 JDM 等領域並在許多其他增長領域發展，我們也在 CCS 內部進行重大轉型。

And so as we go through that transformation, we're looking to continue to stay within this range.

因此，在我們經歷這種轉變時，我們希望繼續保持在這個範圍內。

There is some pressure on margins as you bring revenue down, and we have to drive cost productivity, but we believe that the 2% to 3% range is still -- is the right target for now.

當你降低收入時，利潤率會有一些壓力，我們必須提高成本生產率，但我們認為 2% 到 3% 的範圍仍然是 - 目前是正確的目標。

Your next question comes from the line of Paul Treiber from RBC Capital Markets.

你的下一個問題來自 RBC 資本市場的 Paul Treiber。

Just in regards to the facilities that may have been utilized for Cisco, what's the strategy for either exiting them or reutilizing them for other customers?

就可能已用於思科的設施而言，退出它們或為其他客戶重新利用它們的策略是什麼？

Yes, Paul.

是的，保羅。

So the work we do for Cisco is isolated to our Thailand facility.

因此，我們為 Cisco 所做的工作與我們的泰國工廠隔離開來。

It's in a dedicated building.

它在一個專門的建築裡。

And there's other programs that we have within our Thailand facility that are actually growing.

我們在泰國的設施中還有其他項目，這些項目實際上正在增長。

So while we're working to action some of the costs associated with that, we're also looking to redeploy as many people as possible to other parts of the business as other programs ramp.

因此，在我們努力解決與此相關的一些成本的同時，我們還希望隨著其他項目的增加，將盡可能多的人重新部署到業務的其他部分。

And maybe just to add on to that, Paul.

也許只是為了補充這一點，保羅。

And as you are probably familiar, Thailand is a very large campus for us, one of the largest areas of our business.

正如您可能熟悉的那樣，泰國對我們來說是一個非常大的園區，是我們最大的業務領域之一。

And as a result of the tariff challenges that have been going on now for a couple of years, we have been seeing a significant amount of growth moving towards Thailand.

由於幾年來一直存在的關稅挑戰，我們已經看到大量增長轉向泰國。

As Rob mentioned earlier, we believe we've been a net recipient of the tariff situation with business coming out of China.

正如 Rob 之前提到的，我們認為我們一直是關稅形勢的淨接受者，業務來自中國。

And so number one is we believe that we can isolate the costs that need to be actioned within the campus.

因此，第一是我們相信我們可以隔離需要在校園內採取行動的成本。

And then we are also in the process of ramping business where we can redeploy a lot of that structure.

然後我們也在提升業務的過程中，我們可以重新部署很多這種結構。

That's very helpful.

這很有幫助。

Secondly, just in terms of the comment that the EPS impact from the Cisco disengagement will be negligible.

其次，就評論而言，思科脫離對 EPS 的影響可以忽略不計。

Just thinking it through, like, should we think of the profitability on that type of business as well below the targeted 2% to 3% range for CCS overall?

想一想，我們是否應該考慮這種類型的業務的盈利能力低於 CCS 總體目標 2% 到 3% 的範圍？

So we're not going to comment, Paul, on the profitability of specific customers, but I'll reiterate something that Rob had mentioned in his answers earlier, which is through our public disclosure, you are able to see that the revenue has been declining with Cisco.

所以我們不會評論，保羅，關於特定客戶的盈利能力，但我會重申羅佈在他之前的回答中提到的一些事情，即通過我們的公開披露，你可以看到收入已經與思科一起衰落。

And in a -- when a customer sees that level of decline, we do have profitability challenges along the way.

而且在 - 當客戶看到這種下降水平時，我們確實會遇到盈利挑戰。

And so we are going to be able to target the cost that, that account currently absorbs, and that's why we believe that we can manage any EPS impact going into next year.

因此，我們將能夠針對該賬戶目前吸收的成本，這就是為什麼我們相信我們可以管理明年的任何 EPS 影響。

And we do think that the portfolio will be just as strong or stronger when we come out of it.

我們確實認為，當我們退出時，投資組合將同樣強大或更強大。

Your next question comes from the line of Daniel Chan from TD Securities.

你的下一個問題來自道明證券的 Daniel Chan。

When you guys get into these conversations on restructuring these programs, how do you get to the conclusion of disengaging rather than reducing certain programs or moving programs to other suppliers?

當你們就重組這些項目進行這些對話時，你們如何得出脫離而不是減少某些項目或將項目轉移到其他供應商的結論？

Broadly speaking, I mean, the first thing we try to do is to drive as much productivity as we can in collaboration with our suppliers and internally and with our customers.

從廣義上講，我的意思是，我們要做的第一件事就是與我們的供應商、內部和客戶合作，盡可能提高生產力。

The second thing we try to do is to try to work on improving the mix of the business, offering JDM solutions or higher value-added solutions.

我們嘗試做的第二件事是嘗試改善業務組合，提供 JDM 解決方案或更高附加值的解決方案。

And the last thing we try to do, generally speaking, is to work with our customers on commercial terms to kind of improve overall ROICs.

一般來說，我們嘗試做的最後一件事是與我們的客戶以商業條款合作，以提高整體 ROIC。

And in collaboration with them in some cases, we find -- in many cases, we find a win-win.

在某些情況下與他們合作，我們發現 - 在許多情況下，我們發現雙贏。

In other cases, we find a win-win another way through just deciding that it's in our own best interest collectively to help them through a disengagement.

在其他情況下，我們通過確定共同幫助他們度過脫離接觸符合我們自己的最大利益，找到了另一種雙贏的方式。

And that's typically how the portfolio shaping program has kind of played out.

這通常就是投資組合塑造計劃的結果。

Okay.

好的。

That's helpful.

這很有幫助。

And then considering that these guys were your largest customer, any impact on your buying power with much lower volumes exiting this program?

然後考慮到這些人是你最大的客戶，退出這個項目的數量要少得多，對你的購買力有什麼影響嗎？

No, we don't anticipate that at all.

不，我們根本沒有預料到這一點。

In most of our CCS customers, the build material is largely owned by or managed by the OEM, if you will.

如果您願意，在我們的大多數 CCS 客戶中，構建材料主要由 OEM 擁有或管理。

So hence, we're buying off their [OPA].

因此，我們正在購買他們的 [OPA]。

Okay.

好的。

And then final one for me.

然後是我的最後一個。

Does this open up more opportunities where you would have had a conflict with Cisco in the past?

這是否會帶來更多您過去與思科發生衝突的機會？

In the past, you did mention that hyperscale cloud providers have become a customer.

過去，您確實提到超大規模雲提供商已成為客戶。

Are there more opportunities like those now that Cisco is disengaging?

現在思科正在脫離，是否還有更多類似的機會？

I would say the -- I wouldn't say that it was a barrier in the past.

我會說——我不會說這是過去的障礙。

an emerging part of our business is supporting our cloud providers, and that's an area that we have and continue to be focused on moving forward and it has grown very nicely over the past clip of time, and we've been investing in our JDM solutions to help fuel that growth.

我們業務的一個新興部分正在支持我們的雲提供商，這是一個我們已經並將繼續專注於向前發展的領域，並且在過去的一段時間內發展得非常好，我們一直在投資我們的 JDM 解決方案幫助推動這種增長。

Your next question comes from the line of Jim Suva from Citi.

你的下一個問題來自花旗銀行的 Jim Suva。

This is Josh Kehoe on behalf of Jim Suva.

我是 Jim Suva 的 Josh Kehoe。

Just wondering how order trend and visibility into the comm equipment space is trending?

只是想知道通信設備領域的訂單趨勢和可見性如何發展？

Have there been any delays or push outs?

是否有任何延誤或延誤？

Yes.

是的。

So within Capital Equipment, the orders are certainly starting to pick up.

因此，在 Capital Equipment 內部，訂單肯定開始回升。

In Q3, we had some late quarter upside.

在第三季度，我們在季度末有一些上漲空間。

So the decline wasn't as much as we thought it would be.

所以下降幅度沒有我們想像的那麼大。

And in Q4, we're certainly seeing a little bit of an uptick.

在第四季度，我們肯定會看到一點點上升。

The order book is looking positive for the first half of 2020, but still needs to kind of fill in a little bit for us to get further confidence.

2020 年上半年的訂單看起來是積極的，但仍需要一些補充才能讓我們獲得更多信心。

In the back half of 2020, a lot of speculation on whether that will fill in or not by the entire industry, and we're in the camp of wait-and-see mode to see if the broad memory market recovers to fill in the back half of 2020.

2020年下半年，整個行業對是否會填補的猜測很多，我們處於觀望模式的陣營，看大內存市場是否恢復填補2020年後半。

Does that answer your question, Josh?

這能回答你的問題嗎，喬希？

Yes.

是的。

(Operator Instructions) The next question comes from the line of Todd Coupland from CIBC.

（操作員說明）下一個問題來自 CIBC 的 Todd Coupland。

Just a follow-up on the semi market.

只是半市場的跟進。

So if we were to think about slices within semi, you're recommending that we focus on the memory side of the business.

因此，如果我們要考慮 semi 中的切片，您建議我們專注於業務的內存方面。

So when we see CapEx increases with foundry, companies like TSMC, up 40%, you aren't necessarily going to benefit from that in terms of flow through?

因此，當我們看到資本支出隨著代工而增加時，像台積電這樣的公司增長了 40%，你不一定會從流量方面受益？

Is that the way to think about that?

是這樣想的嗎？

No, actually.

不，實際上。

I think we're the benefactor of both foundry and logic and also 3D NAND based on our customer base.

我認為我們是代工和邏輯的恩人，也是基於我們客戶群的 3D NAND 的恩人。

And that's what we've seen in terms of the demand uptick.

這就是我們在需求上升方面所看到的。

Obviously, DRAM is a wait-and-see mode.

顯然，DRAM是一種觀望模式。

And the broad NAND in terms of the broad memory market in terms of when that recovers, there is some speculation that it will pick up in the back half of 2020, but we have to see if inventory gets depleted and prices rise and CapEx spending starts increasing.

就廣泛的內存市場而言，廣泛的 NAND 何時復蘇，有人猜測它將在 2020 年下半年回升，但我們必須看看庫存是否耗盡、價格是否上漲以及資本支出支出是否開始增加。

But right now, in terms of foundry and logic certainly, and 3D NAND certainly.

但現在，就代工和邏輯而言，當然還有 3D NAND。

Okay.

好的。

And what level of, I guess, recovery in those slices?

我猜這些切片的恢復水平是多少？

I know you talked about sort of a moderate slow first half.

我知道你談到了上半場的溫和緩慢。

What level of recovery would you need to see in 2020 to actually get the overall EPS to about consistent with the company comments, post the disengagement, I mean?

您需要在 2020 年看到什麼水平的複蘇才能真正使整體每股收益與公司評論大致一致，發布脫離接觸，我的意思是？

Well, Todd, Mandeep here.

好吧，托德，這裡是曼迪普。

Tell me if I'm able to answer your question properly or not.

告訴我我是否能夠正確回答您的問題。

So we started to see the downturn in Capital Equipment begin in the third quarter of last year.

因此，我們開始看到資本設備的低迷始於去年第三季度。

And as you know, that's when we start to fall out of our ATS target margin range of 5% to 6%.

如您所知，那是我們開始超出 5% 至 6% 的 ATS 目標利潤率範圍的時候。

We're glad to see some demand upside that came in, in the third quarter.

我們很高興看到第三季度出現了一些需求上行空間。

We're seeing some of that demand upside continuing into the fourth quarter.

我們看到部分需求上升趨勢將持續到第四季度。

And -- but we're not yet at a breakeven point.

而且——但我們還沒有達到盈虧平衡點。

And so we're expecting to see additional growth from where we're at right now in order to get to that profitability level.

因此，為了達到盈利水平，我們預計會看到我們目前所處位置的額外增長。

Two things are going to get us there.

有兩件事會讓我們到達那裡。

One is the impact of the productivity actions we've already taken.

一是我們已經採取的生產力行動的影響。

But then, of course, volume leverage as well.

但是，當然，交易量槓桿也是如此。

Now just as a reminder though, if you look outside of our Capital Equipment business, the rest of the ATS portfolio is actually performing quite well.

不過現在提醒一下，如果你看看我們的資本設備業務之外，ATS 投資組合的其餘部分實際上表現相當不錯。

This quarter, it was a little bit outside of the target margin range.

本季度，它有點超出目標利潤率範圍。

We're ramping programs.

我們正在增加計劃。

We're working through material constraints in A&D.

我們正在努力解決 A&D 中的物質限制。

But the rest of the ATS business is able to, if you will, hold its own.

但是，如果您願意，ATS 業務的其餘部分能夠保持自己的地位。

And so Capital Equipment though, when it's performing in a normalized environment and normalized would be maybe closer to the first half of 2018 levels, we expect to be back in the range.

所以 Capital Equipment 不過，當它在標準化環境中表現並且標準化可能接近 2018 年上半年的水平時，我們預計會回到該範圍內。

And then, of course, as -- that's the semiconductor side.

然後，當然，那是半導體方面。

When display starts coming online, which we're currently seeing towards the end of next year, we believe that, that's going to help lift us to the higher end of that margin range because Capital Equipment is able to perform above the ATS target margin range when both display and semi are performing well.

當顯示器開始上線時，我們目前看到的是明年年底，我們相信，這將有助於將我們提升到該利潤率範圍的較高端，因為 Capital Equipment 的表現能夠高於 ATS 目標利潤率範圍當 display 和 semi 都表現良好時。

Okay.

好的。

Okay, that's helpful.

好的，這很有幫助。

And then just 1 for me on Cisco.

然後在 Cisco 上對我來說只有 1 個。

So if I remember correctly, the major disengagement piece last year was largely fulfillment business.

因此，如果我沒記錯的話，去年主要的脫離接觸主要是履行業務。

Can you just give us broad strokes, the kinds of things you are doing that aren't allowing you to get to target profitability in -- with this customer?

您能否給我們粗略的介紹一下，您正在做的哪些事情不允許您與該客戶一起實現目標盈利能力？

Yes.

是的。

I would say the mix that we have is a combination of EMS and also direct order fulfillment.

我會說我們擁有的組合是 EMS 和直接訂單履行的組合。

There's no JDM content in the mix.

混合中沒有 JDM 內容。

And you are right that the majority of the portfolio program that we've had, which is all in Enterprise has been fulfillment business where we're pleased that we've been able to reduce our exposure to fulfillment by almost half over the last year.

你是對的，我們擁有的大部分投資組合計劃，都在企業中，都是履行業務，我們很高興我們能夠在過去一年中將我們的履行風險減少近一半.

Okay.

好的。

And if I were to just sort of step back, 2 major global OEMs, I get you want to make money for the things you are doing.

如果我退後一步，2 個主要的全球原始設備製造商，我知道你想為你正在做的事情賺錢。

But clearly, lower levels of businesses causing consolidation needs through the supply chain.

但很明顯，較低級別的業務通過供應鏈引起整合需求。

So when you see these kinds of major moves over a couple of years, what does that make you think about in terms of rationalization consolidation within Tier 1 EMS players?

因此，當您在幾年內看到這些重大舉措時，您對一級 EMS 參與者的合理化整合有何看法？

Just talk about your view of whether that's needed in the market at this point.

只是談談您對目前市場是否需要它的看法。

Yes, in the broad EMS market, as you mentioned, there's certainly more capacity than there is demand.

是的，正如您所提到的，在廣闊的 EMS 市場中，容量肯定大於需求。

But history has kind of dictated -- a long history has dictated consolidation amongst Tier 1 EMS's hasn't necessarily created shareholder value historically speaking.

但歷史已經決定了 - 悠久的歷史決定了一級 EMS 之間的整合從歷史上看不一定創造股東價值。

And moving forward, there's various views on whether that will create shareholder value moving forward.

展望未來，對於這是否會創造股東價值，存在各種觀點。

But it's -- I think it's a very hard thing to do for Tier 1s to consolidate because the value proposition will be driven by a lot of restructuring and a lot of mess and the net benefactor will probably be the folks who don't consolidate.

但它 - 我認為對於一級供應商來說，整合是一件非常困難的事情，因為價值主張將受到大量重組和混亂的驅動，而淨受益人可能是那些不整合的人。

So for those reasons, I'm not a big optimist that, that's in the cards moving forward, but time will say.

因此，出於這些原因，我不是一個非常樂觀的人，這是在前進的過程中，但時間會證明一切。

Moving forward, certainly the markets are dynamic and things change.

展望未來，市場肯定是動態的，事情會發生變化。

But -- and there's various papers out in the industry that certainly will disagree with me.

但是 - 業內有各種論文肯定會不同意我的觀點。

There are no further questions at this time.

目前沒有其他問題。

I will turn the call back over to the presenters.

我會把電話轉回給主持人。

So thank you, and we're pleased with our margin expansion and strong free cash flow generation in Q3 within our ATS markets.

所以謝謝你，我們對我們的 ATS 市場第三季度的利潤率擴張和強勁的自由現金流產生感到滿意。

We are encouraged by the early signs of our semi cap recovery.

我們對半市值復甦的早期跡象感到鼓舞。

And our CCS business is actually performing well amidst the portfolio shaping program.

我們的 CCS 業務實際上在投資組合塑造計劃中表現良好。

The decision we reached with Cisco is the right one for both parties, and we're working towards a well planned and phased transition.

我們與思科達成的決定對雙方都是正確的，我們正在努力實現精心計劃和分階段的過渡。

As I've mentioned before, our strategy is certainly sound.

正如我之前提到的，我們的策略當然是合理的。

And over time, the actions we're taking will improve our diversification and enable consistent and profitable growth.

隨著時間的推移，我們正在採取的行動將改善我們的多元化並實現持續的盈利增長。

I thank you all for joining, and I look forward to updating you as we progress throughout the year.

我感謝大家的加入，我期待著在我們全年取得進展時向您更新。

Ladies and gentlemen, this concludes today's conference call.

女士們，先生們，今天的電話會議到此結束。

Thank you for participating.

感謝您的參與。

You may now disconnect.

您現在可以斷開連接。