Celestica Inc (CLS) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Celestica Q1 2023 Earnings Conference Call. At this time, we will conduct a question-and-answer session. (Operator Instructions) This call is being recorded today, Thursday, April 27, 2023. I would now like to turn the conference over to Craig Oberg, please go ahead.

女士們先生們，早上好，歡迎來到 Celestica 2023 年第一季度收益電話會議。這時候，我們將進行問答環節。 （操作員說明）今天，即 2023 年 4 月 27 日，星期四，將錄製此電話。我現在想將會議轉交給 Craig Oberg，請繼續。

Good morning, and thank you for joining us on Celestica's First Quarter 2023 Earnings Conference Call. On the call today are Robert Mionis, President and Chief Executive Officer; and Mandeep Chawla, Chief Financial Officer. As a reminder, during this call, we will make forward-looking statements within the meaning of the Private U.S. 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.

早上好，感謝您加入我們參加 Celestica 2023 年第一季度收益電話會議。今天接聽電話會議的有總裁兼首席執行官 Robert Mionis；首席財務官 Mandeep Chawla。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。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 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 20-F and our other public filings, which can be accessed at sec.gov and sedar.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 financial measures, including ratios based on non-IFRS financial measures consisting of non-IFRS operating margin, adjusted gross margin, adjusted return on invested capital or adjusted ROIC, adjusted free cash flow, gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio, adjusted earnings per share or adjusted EPS, adjusted SG&A expense, lifecycle solutions revenue and adjusted effective tax rate.

有關此類因素和假設的識別和討論以及有關前瞻性陳述的更多信息，請參閱昨天的新聞稿，包括其中有關前瞻性陳述的警示說明、我們關於 20-F 表格的最新年度報告和我們的其他公開文件，可在 sec.gov 和 sedar.com 上訪問。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。此外，在本次電話會議中，我們將參考各種非 IFRS 財務指標，包括基於非 IFRS 財務指標的比率，包括非 IFRS 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，自由調整現金流量、總債務與非 IFRS 的尾隨 12 個月調整後的 EBITDA 槓桿率、調整後的每股收益或調整後的每股收益、調整後的 SG&A 費用、生命週期解決方案收入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 financial measures whether or not specifically designated as such. These non-IFRS financial measures do not have any standardized meanings prescribed by IFRS and may not be comparable to similar measures presented by other public companies who report under IFRS or who report under U.S. GAAP and use non-GAAP financial measures to describe similar operating metrics. We refer you to yesterday's press release and our Q1 2023 earnings presentation, which are available at celestica.com under the Investor Relations tab for more information about these and certain other non-IFRS financial measures, including a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures from our financial statements and a description of modifications to specified non-IFRS financial measures during 2022 and Q1 2023. 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.

應提醒聽眾，在本次電話會議中提及的任何上述措施均表示非 IFRS 財務措施，無論是否明確指定為非 IFRS 財務措施。這些非 IFRS 財務指標沒有 IFRS 規定的任何標準化含義，可能無法與其他根據 IFRS 報告或根據美國 GAAP 報告並使用非 GAAP 財務指標描述類似運營指標的上市公司提出的類似指標相比較.我們建議您參閱昨天的新聞稿和我們的 2023 年第一季度收益演示文稿，它們可在 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 財務措施的更多信息，包括歷史非 IFRS 財務措施的對賬我們的財務報表中最直接可比的 IFRS 財務指標，以及對 2022 年和 2023 年第一季度特定非 IFRS 財務指標的修改說明。除非另有說明，否則本次電話會議中所有提及的美元均為美元，每股信息為基於稀釋後的流通股。現在讓我把電話轉給 Rob。

Thank you, Craig. Good morning, everyone, and thank you for joining us on today's conference call. Celestica is off to a solid start in 2023. Our first quarter revenue was 17% higher compared to the prior year period. While our non-IFRS adjusted EPS was at the high end of our guidance range. First quarter non-IFRS operating margin was 5.2%, exceeding the midpoint of our revenue and non-IFRS adjusted EPS guidance ranges and was the third consecutive quarter with non-IFRS adjusted operating margin greater than 5%. T he current economic environment remains highly dynamic and possessed a host of challenges that we are navigating. We believe that our first quarter results are a testament to the strength and diversity of our commercial portfolio. Our financial performance in Q1 is built on the exceptional momentum we generated in 2022 as we continue to show solid year-to-year progression in our key performance metrics in a difficult environment. Across some of our businesses, we are seeing near-term volatility in customer demand.

謝謝你，克雷格。大家早上好，感謝您參加今天的電話會議。 Celestica 在 2023 年開局良好。我們第一季度的收入比去年同期增長了 17%。雖然我們的非 IFRS 調整後每股收益處於我們指導範圍的高端。第一季度非 IFRS 營業利潤率為 5.2%，超過了我們收入和非 IFRS 調整後每股收益指導範圍的中點，並且是連續第三個季度非 IFRS 調整後營業利潤率超過 5%。當前的經濟環境仍然充滿活力，我們正在應對許多挑戰。我們相信，我們第一季度的業績證明了我們商業組合的實力和多樣性。我們在第一季度的財務業績建立在我們在 2022 年產生的非凡勢頭的基礎上，因為我們在困難的環境中繼續在關鍵績效指標方面逐年取得穩健進展。在我們的一些業務中，我們看到客戶需求的近期波動。

However, on an aggregate basis, our portfolio remains highly resilient as our strategic diversification has allowed us to deliver on our financial objectives and remain on track towards achieving our near- and long-term financial goals. The results of our portfolio strategic diversification are evident as both ATS and CCS posted strong year-over-year revenue growth of 14% and 20%, respectively, in the first quarter. Life Cycle Solutions revenues of $1.16 billion accounted for 63% of total revenues in the first quarter and generated 10% growth compared to the prior year period. The continued solid performance of our life cycle solutions portfolio underscores the benefits of our strategic exposure to diversified high-value end markets with what we see as attractive long-term growth prospects supported by strong secular fundamentals. Before I provide further detail on the outlook for each of our markets, I would like to turn the call over to Mandeep who will discuss our financial performance in the first quarter and our guidance for the second quarter of 2023. Over to you, Mandeep.

然而，總的來說，我們的投資組合仍然具有很強的彈性，因為我們的戰略多元化使我們能夠實現我們的財務目標，並繼續朝著實現我們的近期和長期財務目標邁進。我們的投資組合戰略多元化的結果是顯而易見的，因為 ATS 和 CCS 在第一季度分別實現了 14% 和 20% 的強勁收入同比增長。 Life Cycle Solutions 的收入為 11.6 億美元，佔第一季度總收入的 63%，與去年同期相比增長了 10%。我們生命週期解決方案組合的持續穩健表現凸顯了我們戰略性接觸多元化高價值終端市場的好處，我們認為在強勁的長期基本面支持下具有吸引力的長期增長前景。在我進一步詳細說明我們每個市場的前景之前，我想把電話轉給 Mandeep，他將討論我們第一季度的財務業績和我們對 2023 年第二季度的指導。交給你，Mandeep。

Thank you, Rob, and good morning, everyone. First quarter revenue came in at $1.84 billion, exceeding the midpoint of our guidance range and 17% higher year-over-year, supported by double-digit revenue growth in both our ATS and CCS segments. We achieved first quarter non-IFRS operating margin of 5.2%, 80 basis points higher year-over-year. This performance was driven primarily by improved volume leverage and in particular, very strong profitability in our CCS segment, supported by our HPS business. Non-IFRS adjusted earnings per share were $0.47 for the first quarter. This was at the high end of our guidance range and was $0.08 higher year-over-year, driven by higher revenues and improved mix.

謝謝羅布，大家早上好。第一季度收入為 18.4 億美元，超過了我們指導範圍的中點，同比增長 17%，這得益於我們的 ATS 和 CCS 部門兩位數的收入增長。我們在第一季度實現了 5.2% 的非 IFRS 營業利潤率，同比增長 80 個基點。這一業績主要是由於銷量槓桿率的提高，特別是在我們的 HPS 業務支持下，我們的 CCS 部門非常強勁的盈利能力。第一季度非國際財務報告準則調整後每股收益為 0.47 美元。這是我們指導範圍的高端，同比增長 0.08 美元，這是由於收入增加和組合改善所致。

ATS segment revenue was up 14% year-over-year in the first quarter, higher than our expectations of a low single-digit percentage increase. Year-over-year growth in ATS segment revenue was driven by a strong performance in our industrial, A&D and HealthTech businesses, supported by new program ramps, secular demand tailwinds and improved materials availability. This helped to offset expected softness in our capital equipment business. ATS segment revenue accounted for 43% of total revenue in the first quarter. Our CCS segment continued to deliver solid growth, with quarterly revenue up 20% compared to the prior year period, driven by strong demand and improved availability of materials in both our enterprise and communications end markets as well as new program ramps in our enterprise end market.

第一季度 ATS 部門收入同比增長 14%，高於我們對低個位數百分比增長的預期。 ATS 部門收入的同比增長是由我們的工業、A&D 和 HealthTech 業務的強勁表現推動的，這得益於新項目的增加、長期需求的順風和材料供應的改善。這有助於抵消我們資本設備業務的預期疲軟。 ATS部門收入佔第一季度總收入的43%。我們的 CCS 部門繼續實現穩健增長，季度收入比上年同期增長 20%，這得益於我們企業和通信終端市場的強勁需求和材料可用性的提高，以及我們企業終端市場新項目的增加.

Our HPS business recorded revenues of $371 million in the quarter, up 3% year-over-year. As anticipated, growth in HPS revenue moderated in the first quarter as a result of tougher comps from the prior year period after an exceptionally strong 2022. HPS revenues were 20% of total company revenues in the first quarter compared to 23% in the prior year period. Communications end market revenue for the first quarter was up 11% year-over-year compared to our expectation of a high teens percentage increase. Growth was driven by demand strength with service providers as well as improved material availability. Enterprise end market revenue in the quarter was up 38% year-over-year, above our expectation of a mid-30 percentage increase, driven primarily by the ramping of new programs, strong demand and compute and improved materials availability. Turning to segment margins.

我們的 HPS 業務在本季度錄得 3.71 億美元的收入，同比增長 3%。正如預期的那樣，由於在異常強勁的 2022 年之後與去年同期相比更加嚴格，HPS 收入的增長在第一季度放緩。第一季度 HPS 收入占公司總收入的 20%，而去年同期為 23%時期。第一季度的通信終端市場收入同比增長 11%，高於我們預期的高青少年百分比增長。增長是由服務提供商的需求強勁以及材料可用性的提高所推動的。本季度企業終端市場收入同比增長 38%，高於我們預期的 30% 左右的增幅，這主要是由於新項目的增加、強勁的需求和計算以及材料可用性的提高。轉向部門利潤率。

ATS segment margin was 4.4% in the first quarter, 60 basis points lower year-over-year. The decline in ATS segment margin was driven by anticipated softness in capital equipment, which more than offset profitability improvement driven by growth in our other ATS businesses. We expect ATS segment margin to remain dampened in the second quarter, driven by continued softness in capital equipment and ramping programs in industrial. However, we anticipate improvements in the second half of the year as new program brands are expected to stabilize and our cost and capital equipment are further aligned with lower volumes. CCS segment margin of 5.8% was up 190 basis points year-over-year. The increase was driven by strong volume leverage and favorable mix. Moving on to some additional financial metrics. IFRS net earnings for the quarter were $25 million or $0.20 per share compared to net earnings of $22 million or $0.17 per share in the prior year.

第一季度 ATS 部門利潤率為 4.4%，同比下降 60 個基點。 ATS 部門利潤率的下降是由於預期的資本設備疲軟，這大大抵消了我們其他 ATS 業務增長帶來的盈利能力改善。我們預計第二季度 ATS 部門的利潤率將繼續受到抑制，這主要是受資本設備持續疲軟和工業產能提升計劃的推動。然而，我們預計下半年會有所改善，因為新項目品牌預計將穩定下來，我們的成本和資本設備將進一步與較低的產量保持一致。 CCS 部門利潤率為 5.8%，同比增長 190 個基點。這一增長是由強大的交易量槓桿和有利的組合推動的。繼續討論一些額外的財務指標。本季度的 IFRS 淨收益為 2500 萬美元或每股 0.20 美元，而上一年的淨收益為 2200 萬美元或每股 0.17 美元。

Adjusted gross margin for the first quarter was 9.4%, up 60 basis points year-over-year, primarily due to greater volume leverage, productivity improvements and favorable mix. Our first quarter non-IFRS adjusted effective tax rate was 22%. Non-IFRS adjusted ROIC for the first quarter was 17.9%, an improvement of 4.3% compared to the prior year quarter. Moving on to working capital. Our inventory at the end of the first quarter was $2.4 billion, up $53 million sequentially and up $468 million year-over-year. Our customers continue to display their commitment to working collaboratively with us by helping fund these higher inventory balances, which is reflected by our $811 million in customer cash deposits at the end of the quarter, an increase of approximately $350 million year-over-year. When offset by cash deposits, inventory levels are higher by $119 million compared to the same quarter last year, while inventory turns of 4.3 turns in the first quarter improved compared to 4.2 turns 1 year ago.

第一季度調整後的毛利率為 9.4%，同比增長 60 個基點，這主要是由於銷量槓桿增加、生產率提高和有利的組合。我們第一季度的非 IFRS 調整後有效稅率為 22%。第一季度非國際財務報告準則調整後的 ROIC 為 17.9%，比去年同期提高 4.3%。轉向營運資金。我們在第一季度末的庫存為 24 億美元，環比增長 5300 萬美元，同比增長 4.68 億美元。我們的客戶繼續承諾通過幫助為這些較高的庫存餘額提供資金來與我們合作，這反映在本季度末我們 8.11 億美元的客戶現金存款中，同比增加約 3.5 億美元。如果被現金存款抵消，庫存水平比去年同期高出 1.19 億美元，而第一季度的庫存周轉率為 4.3 周轉，而一年前為 4.2 周轉。

Despite end market demand volatility and continued elevated material lead times, our inventory balance has stabilized, and we expect working capital efficiency improvements over the course of the year. Cash cycle days were 75% during the first quarter, 11 days higher sequentially, but 1 day lower than the prior year period. Capital expenditures for the first quarter were $33 million or approximately 1.8% of revenue compared with 1.6% in the first quarter of 2022. The increase in our capital expenditures conforms with our previously communicated expectations for increased investments in our Southeast Asia, Europe and Mexico facilities in support of new program wins. Non-IFRS adjusted free cash flow in the first quarter was $9.2 million compared to $0.5 million in the prior year period. Consistent with our long-term annual target, we expect to achieve $100 million or more in non-IFRS adjusted free cash flow in 2023. Moving on to some additional key metrics. Our cash balance at the end of the first quarter was $319 million, down $28 million year-over-year and down $56 million sequentially. The lower cash balance is primarily a result of stock-based compensation.

儘管終端市場需求波動且材料交貨時間持續延長，但我們的庫存餘額已趨於穩定，我們預計今年的營運資本效率將有所提高。第一季度現金周轉天數為 75%，環比增加 11 天，但比去年同期減少 1 天。第一季度的資本支出為 3300 萬美元，約佔收入的 1.8%，而 2022 年第一季度為 1.6%。我們資本支出的增加符合我們之前傳達的對東南亞、歐洲和墨西哥設施投資增加的預期支持新節目勝出。第一季度非國際財務報告準則調整後的自由現金流為 920 萬美元，而去年同期為 50 萬美元。與我們的長期年度目標一致，我們預計到 2023 年非 IFRS 調整後的自由現金流量將達到 1 億美元或更多。繼續討論一些其他關鍵指標。我們在第一季度末的現金餘額為 3.19 億美元，同比下降 2800 萬美元，環比下降 5600 萬美元。較低的現金餘額主要是基於股票的補償的結果。

Our cash balance, in addition to our approximately $600 million of borrowing capacity under our revolver provides us with liquidity of approximately $900 million, which we believe is sufficient to meet our anticipated business. At the end of the first quarter, our gross debt was $623 million, down $12 million from the previous quarter, leaving us with a net debt position of $304 million. However, first quarter gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio was 1.3 turns, flat sequentially and down 0.5 turns compared to the same quarter of last year. At March 31, 2023, we were compliant with all financial covenants under our credit agreement. During the first quarter, we purchased approximately 800,000 shares for cancellation at a cost of $11 million. We intend to continue to opportunistically deploy capital towards repurchases under our NCIB throughout the year. Now turning to our guidance for the second quarter of 2023.

我們的現金餘額，加上我們循環貸款下約 6 億美元的借款能力，為我們提供了約 9 億美元的流動資金，我們認為這足以滿足我們預期的業務。第一季度末，我們的總債務為 6.23 億美元，比上一季度減少 1200 萬美元，淨債務頭寸為 3.04 億美元。然而，第一季度總債務與非 IFRS 追踪的 12 個月調整後 EBITDA 槓桿比率為 1.3 倍，環比持平，與去年同期相比下降 0.5 倍。 2023 年 3 月 31 日，我們遵守了信貸協議下的所有財務契約。第一季度，我們以 1100 萬美元的成本購買了約 800,000 股註銷股票。我們打算全年在我們的 NCIB 下繼續機會主義地配置資本用於回購。現在轉向我們對 2023 年第二季度的指導。

Our second quarter revenues are expected to be in the range of $1.75 billion to $1.90 billion. Revenue would be up 6% year-over-year, if the midpoint of this range is achieved. Second quarter non-IFRS adjusted earnings per share are expected to be in the range of $0.44 to $0.50 per share. At the midpoint of our revenue and non-IFRS adjusted EPS guidance ranges are achieved, non-IFRS operating margin will be 5.2%. This would represent an increase of 40 basis points over the prior year period and flat sequentially. Non-IFRS adjusted SG&A expense for the second quarter is expected to be in the range of $64 million to $66 million. We anticipate our non-IFRS adjusted effective tax rate to be approximately 21% in the second quarter, excluding any impact from taxable foreign exchange. Now turning to our end market outlook for the second quarter of 2023.

我們第二季度的收入預計在 17.5 億美元至 19 億美元之間。如果達到這個範圍的中點，收入將同比增長 6%。第二季度非 IFRS 調整後每股收益預計在每股 0.44 美元至 0.50 美元之間。在我們的收入和非 IFRS 調整後每股收益指導範圍的中點達到時，非 IFRS 營業利潤率為 5.2%。這將比上年同期增加 40 個基點，環比持平。第二季度非 IFRS 調整後的 SG&A 費用預計在 6400 萬至 6600 萬美元之間。我們預計第二季度我們的非 IFRS 調整後有效稅率約為 21%，不包括應稅外彙的任何影響。現在轉向我們對 2023 年第二季度的終端市場展望。

In our ATS end market, we anticipate revenue to be in the mid-teens percentage range year-over-year, driven by continued growth in our industrial, HealthTech and A&D businesses, partially offset by anticipated continued market weakness in capital equipment. In our CCS segment, we anticipate revenues in our communications end market to be down in the mid-teens percentage range year-over-year, driven by tough comps and lower anticipated demand from certain programs in networking and routing. Finally, in our enterprise end market, we anticipate revenue growth in the high 20s percentage range year-over-year, supported by anticipated continued demand strength in proprietary compute as well as new program ramps. I'll now turn the call back over to Rob to provide additional color on our markets and our overall outlook.

在我們的 ATS 終端市場，由於我們的工業、健康科技和 A&D 業務的持續增長，我們預計收入將同比處於百分之十幾的百分比範圍內，部分被預期的資本設備市場持續疲軟所抵消。在我們的 CCS 部分，我們預計我們的通信終端市場的收入將同比下降到百分之十幾的百分比範圍內，這是由於艱難的競爭和網絡和路由中某些程序的預期需求下降所致。最後，在我們的企業終端市場，我們預計收入同比增長將達到 20% 的高百分比，這得益於專有計算的預期持續需求強勁以及新程序的增加。我現在將電話轉回給 Rob，以提供有關我們市場和整體前景的更多信息。

Thank you, Mandeep. As mentioned earlier, patent uncertainty has complicated the global economic outlook. We believe that recessionary pressures are tempering demand in some of our end markets, while others continue to show resiliency and experience strong growth. However, given these dynamics, we remain confident in our outlook for the overall company, which continues to be validated by our strong results and continued operational execution. As such, we are pleased to raise our full year 2023 revenue outlook. We are now anticipating full year revenues of at least $7.6 billion, and we are tightening our anticipated range for non-IFRS adjusted EPS to between $2 and $2.05. We are also tightening our anticipated 2023 non-IFRS operating margin range to between 5% and 5.5%.

謝謝你，曼迪普。如前所述，專利的不確定性使全球經濟前景複雜化。我們認為，經濟衰退壓力正在抑制我們部分終端市場的需求，而其他終端市場則繼續表現出彈性並實現強勁增長。然而，鑑於這些動態，我們對整個公司的前景仍然充滿信心，我們強勁的業績和持續的運營執行將繼續驗證這一前景。因此，我們很高興上調 2023 年全年收入預期。我們現在預計全年收入至少為 76 億美元，並且我們正在將非 IFRS 調整後每股收益的預期範圍收緊至 2 美元至 2.05 美元之間。我們還將預期的 2023 年非 IFRS 營業利潤率範圍收緊至 5% 至 5.5% 之間。

Achievement of our updated revenue outlook would represent year-over-year revenue growth of at least 5%, and achievement of the midpoint of our tightened non-IFRS adjusted EPS range would represent year-over-year growth of 7%, which would illustrate solid progression on our very strong financial results from 2022. Now I would like to turn to our outlook for each of our businesses. Overall, we expect our ATS business to be up in the low double-digit percentage range in 2023 as softness in capital equipment is anticipated to be more than offset by strength in all of our other ATS businesses. Our Industrial business continues to experience strong growth, with revenues up more than 30% year-over-year in the first quarter of 2023.

我們更新後的收入展望的實現將代表收入同比增長至少 5%，而我們收緊的非 IFRS 調整後每股收益範圍的中點的實現將代表同比增長 7%，這將說明從 2022 年開始，我們非常強勁的財務業績取得穩步進展。現在我想談談我們對每項業務的展望。總體而言，我們預計我們的 ATS 業務將在 2023 年以較低的兩位數百分比增長，因為資本設備的疲軟預計將被我們所有其他 ATS 業務的實力所抵消。我們的工業業務繼續強勁增長，2023 年第一季度收入同比增長超過 30%。

Demand from green energy projects remained very strong, supported by a number of new program ramps and strong secular tailwinds in vehicle electrification and energy storage in generation. Additionally, PCI performance continues to be solid. The outlook for our industrial business remains healthy, and we continue to expect strong and sustained growth throughout 2023. In our capital equipment business, the 4 wafer fab equipment market is still expected to be down materially in 2023 compared to 2022. while our capital equipment business is also expected to be down year-over-year, we continue to anticipate our business to outperform broader market expectations due to the benefits of our business mix, market share gains and new program wins. Looking beyond 2023, we are encouraged that the current market outlook anticipates the wafer fab equipment market to return to growth in 2024. Moving on to A&D.

綠色能源項目的需求仍然非常強勁，這得益於許多新計劃的實施以及汽車電氣化和發電儲能方面的強勁長期順風。此外，PCI 性能繼續保持穩定。我們的工業業務前景依然健康，我們繼續預計整個 2023 年將實現強勁和持續的增長。在我們的資本設備業務中，與 2022 年相比，4 晶圓廠設備市場預計 2023 年仍將大幅下滑。而我們的資本設備預計業務也將同比下降，但由於我們的業務組合、市場份額增加和新項目獲勝，我們繼續預計我們的業務將超越更廣泛的市場預期。展望 2023 年以後，我們感到鼓舞的是，目前的市場前景預計晶圓廠設備市場將在 2024 年恢復增長。繼續進行 A&D。

Our commercial aerospace business is experiencing a strong recovery in demand. This has been supported by the normalization of commercial air traffic and new program ramps, which we anticipate will drive continued revenue growth at rates accretive to our ATS segment throughout 2023. The most recent industry estimates and customer outlook calls for commercial air traffic to return to precoded levels by 2024. Our defense business also continues to see demand growth, supported by higher customer spending on military equipment from Western governments amid rising global geopolitical pensions. Our Health Tech business is seeing accelerating growth, supported by new program ramps in the areas of surgical instruments, imaging and patient monitoring devices. We believe the demand outlook for our HealthTech business is strong and stable, given our view of its lower sensitivity to recessionary pressures.

我們的商業航空航天業務正在經歷強勁的需求復蘇。這得到了商業空中交通正常化和新計劃坡道的支持，我們預計這將在整個 2023 年以增加 ATS 部門的速度推動收入持續增長。最新的行業估計和客戶展望要求商業空中交通恢復到到 2024 年達到預定水平。我們的國防業務也繼續看到需求增長，這得益於在全球地緣政治養老金不斷增加的情況下，西方政府對軍事設備的客戶支出增加。我們的健康科技業務正在加速增長，這得益於手術器械、成像和患者監護設備領域的新計劃。鑑於我們認為健康科技業務對衰退壓力的敏感性較低，我們認為其需求前景強勁且穩定。

Now turning to our CCS segment. For 2023, CCS revenues are expected to be flat to slightly up compared to 2022. Our 2023 enterprise end market revenue is expected to increase compared to 2022, fueled by strength in proprietary compute. This teases expected to be partially offset by demand softness in our communications end market and to some extent in our HPS business. Our HPS business has more than tripled in size since 2019 on the back of very strong market share gains from ODMs and substantial investments in data center expansion from hyper-sales due to a very tough computer level. We expect HPS growth to moderate this year, but continue to be a large and stable portion of our CCS business and overall revenues. Although HPS growth rates are expected to moderate this year, we expect hyperscaler customer growth to be robust in 2023, largely driven by new program ramps in proprietary compute, supporting our customers' artificial intelligence and machine learning investments. Demand in our enterprise end market remains healthy.

現在轉向我們的 CCS 部分。到 2023 年，CCS 收入預計與 2022 年持平或略有上升。在專有計算實力的推動下，我們 2023 年的企業終端市場收入預計將比 2022 年增加。預計這會被我們通信終端市場和 HPS 業務的需求疲軟部分抵消。自 2019 年以來，我們的 HPS 業務規模增長了兩倍多，這得益於 ODM 帶來的非常強勁的市場份額增長，以及由於非常艱難的計算機水平而導致的超額銷售對數據中心擴展的大量投資。我們預計今年 HPS 增長將放緩，但仍將是我們 CCS 業務和總收入的重要且穩定的部分。儘管今年 HPS 增長率預計會放緩，但我們預計超大規模客戶的增長將在 2023 年強勁，這主要是受專有計算新項目的推動，支持我們客戶的人工智能和機器學習投資。我們企業終端市場的需求依然健康。

As mentioned earlier, within our portfolio, we are seeing very strong demand from customers, including hyperscalers for proprietary compute, which is more than offsetting softness in the storage market. Finally, the outlook for our communications end market is soft. After an exceptional 2022, we expect difficult year-over-year comparisons for the remainder of the year. With our strong start to 2023, I remain optimistic regarding our prospects for the year ahead. We believe that our strategic decisions over the past several years and the exceptional efforts of our team have positioned us to continue to execute on all of our key objectives and navigate the potential hurdles presented by the broader economic environment. And while we are focused on the near-term challenges at hand, we are also mindful to maintain perspective, keeping sight of our long-term targets. With that, I would now like to turn the call over to the operator for questions. Thank you.

如前所述，在我們的產品組合中，我們看到客戶的需求非常強勁，包括專有計算的超大規模應用程序，這足以抵消存儲市場的疲軟。最後，我們的通信終端市場前景疲軟。在經歷了非凡的 2022 年之後，我們預計今年剩餘時間的同比比較會很困難。憑藉我們 2023 年的強勁開局，我對來年的前景保持樂觀。我們相信，我們過去幾年的戰略決策和我們團隊的非凡努力使我們能夠繼續執行我們所有的關鍵目標，並克服更廣泛的經濟環境帶來的潛在障礙。在我們專注於手頭的近期挑戰的同時，我們也注意保持遠見，著眼於我們的長期目標。有了這個，我現在想把電話轉給接線員提問。謝謝。

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question will come from Rob Young at Canaccord Genuity. Please go ahead.

謝謝你，先生。女士們，先生們，我們現在開始問答環節。 （操作員說明）您的第一個問題將來自 Canaccord Genuity 的 Rob Young。請繼續。

First question for me would be on pricing environment in 2023. I know you talked a little bit about this last quarter and just maybe an update there. As supply chain normalizes, are you able to sort of keep pace with the inflation on your cost side wages and materials are able to pass that along and maintain strong pricing in 2023.

對我來說，第一個問題是關於 2023 年的定價環境。我知道你在上個季度談了一些，也許只是更新一下。隨著供應鏈正常化，您是否能夠在某種程度上跟上成本方面的通貨膨脹，工資和材料能夠將其傳遞並在 2023 年保持強勁的定價。

Yes, Rob, nice to talk to you. I'd say, overall, the pricing environment is stable, and we can pass on the vast majority of the increases we're seeing. As you know, in many cases, we do quarterly repricing. And so when we are seeing spikes in inflation on costs that we control, we very quickly have those conversations with our customers. There are some longer-term agreements where we don't have quarterly year pricing. Sometimes it flips into a year. In those cases, there's sometimes a little bit of a catch up. But the vast majority of our business is not bad. And the thing I would say is that there continues to be a lot of emphasis on securing materials and our team has been doing an exceptional job and being able to secure materials in still a very volatile environment does give us an advantage when having pricing conversations

是的，羅伯，很高興和你交談。我想說，總的來說，定價環境是穩定的，我們可以轉嫁我們看到的絕大多數增長。如您所知，在許多情況下，我們會按季度重新定價。因此，當我們看到我們控制的成本通脹飆升時，我們很快就會與客戶進行這些對話。有一些長期協議，我們沒有按季度定價。有時它會變成一年。在那些情況下，有時會有一點追趕。但我們的絕大多數業務都不錯。我要說的是，人們仍然非常重視保護材料，我們的團隊一直在做出色的工作，能夠在仍然非常不穩定的環境中保護材料，這確實給我們帶來了定價對話的優勢

And I would also add, Rob, on the supply chain side, the material pricing premiums are subsiding as the inventory buffers are being consumed and lead times are being reduced. So we're seeing less material inflation moving forward.

我還要補充一點，Rob，在供應鏈方面，隨著庫存緩衝的消耗和交貨時間的縮短，材料定價溢價正在下降。因此，我們看到未來的物質通脹正在減少。

Okay. Great. And then second question, maybe just a little more precision on HPS. I guess if you could just talk a little bit about the growth expectation there relative to the ATS and life cycle growth of 10% is, I think you've shared in the past. Is that still is HPS still supportive of that? Or should we expect it to be a drag on that this year?

好的。偉大的。然後是第二個問題，可能只是 HPS 更精確一點。我想如果你能談談相對於 ATS 的增長預期和 10% 的生命週期增長，我想你過去已經分享過。那仍然是 HPS 仍然支持嗎？還是我們應該預計它會拖累今年的發展？

So I'll start off and I'll let Mandeep finish. So from an HPS perspective, HPS growth is moderating. But frankly, it's largely due to tough comps. Recall HPS grew 59% last year. So this type of growth, obviously, is not sustainable over the short term. That being said, hyperscaler growth has been robust, and we believe that will be in the double digits this year. And that's on the back of some strong growth in the areas of proprietary compute. You've seen a lot of the buzz in the marketplace regarding AI and ML investments that the hyperscalers are making, and we have been and continue to be the benefactor of that. So while this is not strictly HPS revenue, it is what we call high-value EMS, given the complex nature of the products and the high amount of process expertise that we add to deliver this product. And typically speaking, what we see is this high-value EMS work migrates to HPS products over a period of time. And I'll turn it.

所以我會開始，我會讓 Mandeep 完成。因此，從 HPS 的角度來看，HPS 增長正在放緩。但坦率地說，這主要是由於艱難的比賽。 Recall HPS 去年增長了 59%。因此，這種增長顯然在短期內是不可持續的。話雖這麼說，超大規模的增長一直很強勁，我們相信今年將達到兩位數。這是在專有計算領域強勁增長的支持下。你已經看到市場上有很多關於超大規模企業正在進行的 AI 和 ML 投資的熱議，我們一直並將繼續成為這方面的捐助者。因此，雖然這不是嚴格的 HPS 收入，但考慮到產品的複雜性和我們為交付該產品而添加的大量流程專業知識，這就是我們所說的高價值 EMS。通常來說，我們看到的是這種高價值的 EMS 工作會在一段時間內遷移到 HPS 產品。我會轉動它。

Maybe just to answer the Lifecycle Solutions question, Rob. I think the way I would think about it is the $7.6 billion or more that we have given as an outlook is implying 5% year-over-year growth. That 5% growth is going to be relatively consistent between life cycle solutions and non-life cycle solutions. And it's for the reasons that Rob mentioned, which is there are -- there is CCS business that sits outside of life cycle solutions, where we're seeing some pretty strong demand strength. Primarily in proprietary compute with the cloud providers. They're not necessarily buying HPS gear at this point, but they are buying gear that has a lot of engineering content to it, so it has favorable pricing, and it is growing. Overall, if I was scope by end markets, ATS is expected to have strong double-digit growth this year for the reasons we mentioned. All markets are growing with the exception of capital equipment, HPS growth we're moderating as we talked about. But then also just looking from a constant enterprise perspective, a lot of strength in proprietary compute offset by some softness that we're seeing in the networking side.

Rob，也許只是為了回答生命週期解決方案的問題。我認為我認為它的方式是我們給出的 76 億美元或更多的前景意味著 5% 的同比增長。 5% 的增長將在生命週期解決方案和非生命週期解決方案之間保持相對一致。這就是 Rob 提到的原因——CCS 業務位於生命週期解決方案之外，我們看到了一些相當強勁的需求強度。主要是與雲提供商的專有計算。此時他們不一定購買 HPS 設備，但他們購買的設備具有很多工程內容，因此價格優惠，而且還在增長。總的來說，如果我從終端市場來看，由於我們提到的原因，預計 ATS 今年將實現兩位數的強勁增長。除了資本設備外，所有市場都在增長，正如我們所說的，我們正在放緩的 HPS 增長。但是，從一個恆定的企業角度來看，我們在網絡方面看到的一些軟性抵消了專有計算的很多優勢。

Your next question comes from Thanos Moschopoulos at BMO Capital Markets.

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

Just on the macro, if we signal about your outlook for the various segments versus where it would have been 90 days ago are there some in particular where you're seeing more macro apprehension and we reduction in your prior forecast versus what you would expect in starting the year?

就宏觀而言，如果我們發出信號表明您對各個細分市場的展望與 90 天前的情況相比，是否有一些特別是您會看到更多的宏觀擔憂，我們會減少您之前的預測與您預期的相比年初？

Macro backdrop is certainly starting to impact portions of our business. And if you just take them overall within ATS, it's really just the capital equipment business. The other segments within ATS are growing nicely. Our industrial business is growing like a weed, largely driven on the backs of green energy projects, energy storage and generation. Our Health Tech business is growing very nicely. Our aerospace and defense business is growing very nicely led by commercial aerospace recovery and to some extent, defense. So within ATS, I would say, aside from capital equipment, the macro economic backdrop hasn't really impacted us. And within CCS, we are seeing some moderation, but it's really in HPS driven by tough comps and also consumption of some of the strategic inventory buffers that are being consumed as material constraints ease. But on the flip side, we're seeing very strong growth in proprietary compute driven by AI and ML investments. So net-net, we're getting the benefit of a very diversified portfolio in our results.

宏觀背景肯定開始影響我們的部分業務。如果你只是把它們放在 ATS 中，那實際上只是資本設備業務。 ATS 中的其他部分增長良好。我們的工業業務像野草一樣增長，主要是在綠色能源項目、能源儲存和發電的支持下。我們的健康科技業務發展得非常好。我們的航空航天和國防業務在商業航空航天復蘇和某種程度上的國防的帶動下發展得非常好。因此，在 ATS 內部，我想說，除了資本設備外，宏觀經濟背景並沒有真正影響我們。在 CCS 中，我們看到了一些緩和，但實際上是在 HPS 中，由艱難的競爭驅動，以及一些戰略庫存緩衝的消耗，這些緩衝隨著材料限制的放鬆而被消耗。但另一方面，我們看到在 AI 和 ML 投資的推動下，專有計算出現了非常強勁的增長。所以淨淨，我們在我們的結果中獲得了非常多元化的投資組合的好處。

And on capital equipment to clarify, it sounds like you're optimistic for that segment returning to growth next year. Just from a quarterly perspective, where do you think we might hit the bottom, would that be in the second half or when?

關於資本設備，需要澄清的是，聽起來您對該部門明年恢復增長持樂觀態度。僅從季度的角度來看，您認為我們可能在哪裡觸底，是在下半年還是什麼時候？

Probably, it's hard to always call the bottom. That's always Erin's pool. But we see growth coming out of the year and going into next year, whether the bottom will be Q2 or Q3 time will tell. But we see it coming us coming out of it on the towards the back of the year. And that is largely driven by new program ramps that are starting now, which will add to put some fuel on the fire, if you will, towards the back end of the year.

大概，很難一直叫底。那總是艾琳的游泳池。但我們看到今年和明年都會出現增長，到底是第二季度還是第三季度見底。但我們看到它正在向我們走出來，在今年年底。這在很大程度上是由現在開始的新計劃坡道推動的，如果你願意的話，這將在今年年底前火上澆油。

Your next question will come from Maxim Matushansky at RBC Capital Markets. Please go ahead.

您的下一個問題將來自 RBC Capital Markets 的 Maxim Matushansky。請繼續。

You mentioned the strength in ATS was from kind of new program ramps, the overall market demand and also the improved material availability across ATS and industrial AT and health tech. Given that you increased the ATS outlook for Q2 and you had no kind of adverse revenue impact from supply chain constraints, I'm wondering how much of the strength in the ATS was from new program ramps versus have the improved materials availability?

你提到 ATS 的優勢來自於新項目的增加、整體市場需求以及 ATS 和工業 AT 和健康技術的材料可用性的提高。鑑於您提高了第二季度的 ATS 前景，並且您沒有因供應鏈限制對收入產生不利影響，我想知道 ATS 的優勢有多少來自新計劃的增加，而材料可用性的改善呢？

I would say, Maxim, the large majority of the improved growth is driven by new program ramps, especially in our industrial business. Our industrial business has great exposure to some of these green energy projects, alot of what the U.S. government is doing on the inflation Reduction Act is adding fuel to the fire with respect to demand. We have very strong backlogs of these programs. And these programs are material constrained. So while material constraints are easing in some of the other areas in the ISC area, industrial area, we still have a fair amount of material constraints given the very strong demand that we have.

我要說的是，馬克西姆，增長的絕大部分是由新計劃的推動推動的，尤其是在我們的工業業務中。我們的工業企業與其中一些綠色能源項目有很大的關係，美國政府在《降低通貨膨脹法案》中所做的很多事情都是在需求方面火上澆油。我們積壓了大量這些計劃。而且這些程序受到物質限制。因此，雖然在 ISC 地區、工業區的其他一些地區，物質限制正在緩解，但鑑於我們的需求非常強勁，我們仍然有相當多的物質限制。

Okay. And I just wanted to circle back on the hyperscaler demand. Now that we're approaching kind of the midpoint of the year, I'm curious whether you're seeing any changes in the demand for our customers. And so you mentioned that some of that has shifted to potentially proprietary compute. Can you just comment on kind of the, I guess, the changes in the demand from hyperscalers and anything new from those conversations over the last few quarters?

好的。我只是想回到超大規模需求。現在我們正接近今年的中點，我很好奇您是否看到我們客戶的需求發生任何變化。所以你提到其中一些已經轉移到潛在的專有計算上。您能否評論一下，我猜，超大規模需求的變化以及過去幾個季度這些對話中的任何新內容？

Yes. So hyperscaler segment is still continuing to grow. As I mentioned, we're -- we believe that hyperscalers will grow about double digits this year, but they are shifting their spend. They do have inventory in the pipeline largely in the areas of networking, those strategic buffers were put in place last year, and they're consuming those down. And once those buffers are down, they'll probably return to growth. But they are shifting their CapEx spend more towards these AI and ML investments, which we'll be ramping out through the year and into next year. So that's where we -- in CCS, we see a large portion of our growth coming from proprietary compute. And we're serving multiple customers there, not just hyperscalers, but OEMs as well.

是的。因此，超大規模細分市場仍在繼續增長。正如我提到的，我們 - 我們相信超大規模企業今年將增長兩位數，但他們正在改變他們的支出。他們確實有主要在網絡領域的管道庫存，這些戰略緩衝區是去年到位的，他們正在消耗這些。一旦這些緩衝下降，它們可能會恢復增長。但是他們正在將更多的資本支出轉移到這些人工智能和機器學習投資上，我們將在今年和明年逐步增加這些投資。所以這就是我們 - 在 CCS 中，我們看到我們的很大一部分增長來自專有計算。我們在那里為多個客戶提供服務，不僅是超大規模，還有原始設備製造商。

Your next question comes from Daniel Chan at TD.

您的下一個問題來自 TD 的 Daniel Chan。

So the communications segment coming at 11%. That's a little bit lower than the high teens you were expecting. Just wondering if you can give us a few details on what happened in the quarter that came in different from what you're expecting?

因此，通信部門佔 11%。這比您預期的高十幾歲略低。只是想知道您是否可以向我們提供一些與您預期不同的季度發生的事情的詳細信息？

Sure, Dan. So in the comp side, as the material constraints are starting to ease, our customers and comms are starting to consume some of those strategic inventory buffers and that's really what happened in the first quarter. That was partially offset with some new program ramps that we have going on in optical. That dynamic will also repeat itself in the second quarter as well. Still more consumption on the networking side, offset partially offset with some new program ramps that we have in optical.

當然，丹。因此，在補償方面，隨著材料限制開始緩解，我們的客戶和通信開始消耗一些戰略庫存緩衝，這確實是第一季度發生的事情。這部分被我們在光學領域正在進行的一些新項目所抵消。這種動態也將在第二季度重演。在網絡方面還有更多的消耗，部分抵消了我們在光學方面的一些新程序斜坡。

Okay. And then you're talking a lot about AI helping you on the hyperscale customers. What has to happen to get those programs to HPS? It seems like that would be very conducive to the specialized kind of services that you provide there. How long do you think that would take? And what's the potential uplift when that happens?

好的。然後你談論了很多關於人工智能幫助你處理超大規模客戶的問題。要讓這些程序進入 HPS，必須做些什麼？這似乎非常有利於您在那裡提供的專業服務。你認為這需要多長時間？當這種情況發生時，潛在的提升是什麼？

Yes. For those types of products, it would probably be the next generation of those products. So I would say, 18 months or so. But we call it high-value EMS because the level of intellectual capital, I would say, that goes into building these products is very, very high. So the margins, given the high value add is somewhat synonymous or very close to HPS margins. So it is a natural migration. We've seen this migration happen in the past, and we expect this to migrate into HPS moving forward as the next-generation products kick in.

是的。對於這些類型的產品，它可能是這些產品的下一代。所以我會說，18 個月左右。但我們稱其為高價值 EMS，因為我想說，用於構建這些產品的智力資本水平非常非常高。因此，鑑於高附加值，利潤率在某種程度上與 HPS 利潤率是同義詞或非常接近。所以這是一種自然遷移。我們已經看到這種遷移在過去發生過，我們希望隨著下一代產品的推出，這種遷移會向前遷移到 HPS。

Ladies and gentlemen, once again, (Operator Instructions) there are no other questions from the phone lines. So at this point, I will turn the conference back to Rob Mionis for any closing remarks.

女士們先生們，再一次，（接線員說明）電話線沒有其他問題。所以在這一點上，我將把會議轉回給 Rob Mionis 作任何閉幕詞。

Thank you, Michelle. I'm pleased with our performance in the first quarter and encouraged by our continued momentum. Revenue increased by 17% year-over-year, and we posted over 5% operating margin for the third consecutive quarter. As the majority of our end markets are poised for growth in 2023, I'm also pleased we're able to raise our 2023 revenue outlook. Thank you all for joining today's call, and we look forward to updating you as we progress throughout the year.

謝謝你，米歇爾。我對我們第一季度的表現感到滿意，並為我們持續的發展勢頭感到鼓舞。收入同比增長 17%，我們連續第三個季度實現超過 5% 的營業利潤率。由於我們的大多數終端市場都有望在 2023 年實現增長，我也很高興我們能夠提高 2023 年的收入預期。感謝大家參加今天的電話會議，我們期待著在我們全年取得進展時為您提供最新消息。

Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank everyone for participating and ask you to please disconnect your lines.

女士們，先生們，今天上午的電話會議到此結束。我們要感謝大家的參與，並請您斷開您的線路。