Celestica Inc (CLS) 2023 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Celestica Q4 2023 earnings conference call. At this time, all lines are in a listen only mode following the presentation, we will conduct a question and answer session. (Operator Instructions) This call is being recorded on Tuesday, January 30, 2024.

女士們先生們，美好的一天，歡迎參加 Celestica 2023 年第四季財報電話會議。此時，所有線路都處於只聽模式，在演示結束後，我們將進行問答環節。（操作員說明）此通話錄音時間為 2024 年 1 月 30 日星期二。

I would now like to turn the conference over to Craig Albert, Vice President of Investor Relations and Corporate Development. Please go ahead.

我現在想將會議交給投資者關係和企業發展副總裁克雷格·阿爾伯特 (Craig Albert)。請繼續。

Good morning, and thank you for joining us on Celestica's fourth quarter 2023 earnings conference call. On the call today are Rob 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 US Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Such forward-looking statements are based on management's current expectations, forecasts, and assumptions, which are subject to risks, uncertainties, and other factors that could cause actual outcomes and results to differ materially from conclusions, forecasts, or projections expressed in such statements.

早安，感謝您參加 Celestica 2023 年第四季財報電話會議。今天參加電話會議的是總裁兼執行長 Rob Mionis；和曼迪普‧喬拉 (Mandeep Chawla)，財務長。謹此提醒，在本次電話會議中，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。此類前瞻性陳述是基於管理階層目前的預期、預測和假設，這些預期、預測和假設受到風險、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、預測或預測有重大差異。

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 cdrplus.com. We assume no obligation to update any forward-looking statements except as required by law.

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性說明、我們最新的 20-F 表格年度報告，以及我們的其他公開文件，可在sec.gov 和cdrplus.com 上存取。除法律要求外，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 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, adjusted effective tax rate, and operating earnings.

此外，在本次電話會議中，我們將參考各種非國際財務報告準則財務指標，包括基於非國際財務報告準則財務指標的比率，包括非國際財務報告準則營業利潤率、調整後毛利率、調整後投資資本報酬率或調整後投資報酬率、調整自由現金流量、過去 12 個月調整後 EBITDA 槓桿率、調整後每股盈餘或調整後 EPS、調整後 SG&A 費用、調整後有效稅率和營業利潤。

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 that report under IFRS or who report under US GAAP and use non-GAAP financial measures to describe similar operating metrics.

應提醒聽眾，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此類措施。這些非國際財務報告準則財務指標不具有國際財務報告準則規定的任何標準化意義，且可能無法與根據國際財務報告準則報告或根據美國公認會計準則報告並使用非公認會計準則財務指標來描述類似營運指標的其他上市公司提出的類似指標比較。

We refer you to yesterday's press release and our Q4 2023 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 financial measures to the most directly comparable IFRS financial measures from our financial statements, and a description of recent modifications to specified non-IFRS financial measures. Unless otherwise specified, all references to dollars on this call are to USD and per share information is based on diluted shares outstanding.

我們建議您參閱昨天的新聞稿和我們的 2023 年第四季度收益演示文稿，這些演示文稿可在 celestica.com 的“投資者關係”選項卡下查看。有關這些和某些其他非 IFRS 指標的更多信息，包括歷史非 IFRS 財務指標與我們財務報表中最直接可比的 IFRS 財務指標的調節表，以及對特定非 IFRS 財務指標的最新修改的說明。除非另有說明，本次電話會議中所有提及的美元均指美元，每股資訊基於稀釋後的已發行股票。

Let me now turn the call over to Rob.

現在讓我把電話轉給羅布。

Thank you, Craig. Good morning, everyone, and thank you for joining us on today's call. We ended the year with a very strong fourth quarter, achieving revenue of $2.14 billion, which is towards the high end of our guidance range. While our non-IFRS adjusted EPS came in at $0.76, exceeding the high end of our guidance range. A non-IFRS operating margin was 6%, exceeding the midpoint of our revenue and non-IFRS adjusted EPS guidance ranges.

謝謝你，克雷格。大家早安，感謝您參加今天的電話會議。我們以非常強勁的第四季度結束了這一年，實現收入 21.4 億美元，接近我們指導範圍的上限。而我們的非 IFRS 調整後每股收益為 0.76 美元，超出了我們指導範圍的上限。非國際財務報告準則營業利益率為 6%，超過了我們的收入和非國際財務報告準則調整後每股收益指引範圍的中點。

The outperformance in the fourth quarter relative to our guidance was driven by continued strength in our CCS segment, supported by the sustained growth of our hyperscaler portfolio. We continue to see the benefit of improved mix in our CCS segment margin, which reached yet another new high of 6.7% in the fourth quarter. And our ATS segment revenues were down slightly year to year as incremental demand softness in our industrial business and continued demand headwinds in our capital equipment business more than offset strong growth and our A&D business.

相對於我們的指導，第四季度的表現優於我們的指導，這是由於我們的 CCS 領域的持續強勁以及我們的超大規模投資組合的持續成長所支持。我們繼續看到 CCS 部門利潤率改善組合帶來的好處，第四季達到 6.7% 的新高。我們的 ATS 部門收入同比略有下降，因為我們的工業業務的增量需求疲軟以及我們的資本設備業務的持續需求逆風抵消了我們的 A&D 業務的強勁增長。

Our solid performance in the fourth quarter capped a stellar year in 2023. Throughout this past year, we continued to execute on our strategic plan, enhanced our competitive presence in key markets and consistently delivered on our financial objectives. In 2023, our business generated revenue of approximately $8 billion, 10% higher than 2022, driven by strong growth in both our CCS and ATS segments.

我們第四季的穩健表現為 2023 年輝煌的一年畫上了圓滿的句號。在過去的一年裡，我們繼續執行我們的策略計劃，增強我們在關鍵市場的競爭力，並持續實現我們的財務目標。2023 年，在 CCS 和 ATS 領域強勁成長的推動下，我們的業務收入約為 80 億美元，比 2022 年成長 10%。

Our non-IFRS adjusted EPS of $2.43 was up 28% versus the prior year, while non-IFRS operating margin of 5.6% was higher by 70 basis points with both results, marking the highest in the company's history. Our strong profitability and working capital management allowed us to generate non-IFRS adjusted free cash flow of $194 million, exceeding our full-year target of $150 million.

我們的非國際財務報告準則調整後每股收益為2.43 美元，比上年增長28%，而非國際財務報告準則營業利潤率為5.6%，提高了70 個基點，這兩項結果均創下公司歷史最高水平。我們強大的獲利能力和營運資金管理使我們能夠產生 1.94 億美元的非 IFRS 調整後自由現金流，超過了 1.5 億美元的全年目標。

Before I provide an update on the market outlook for each of our businesses, I would now like to turn the call over to Mandeep, who will provide further details on our fourth quarter financial performance and our guidance for the first quarter of 2024. Mandeep, over to you.

在介紹我們每項業務的市場前景的最新情況之前，我現在想將電話轉給 Mandeep，他將提供有關我們第四季度財務業績和 2024 年第一季指導的更多詳細資訊。曼迪普，交給你了。

Thank you, Rob, and good morning, everyone. Fourth quarter revenue came in at $2.14 billion towards the high end of our guidance range. Revenue was up 5% year-over-year, supported by solid growth in our CCS segment, partially offset by a modest decline in our ATS segment.

謝謝你，羅布，大家早安。第四季營收為 21.4 億美元，接近我們指引範圍的上限。由於 CCS 部門的穩健成長，營收年增 5%，但 ATS 部門的小幅下滑部分抵消了收入。

Our fourth quarter non-IFRS operating margin of 6.0% was 70 basis points higher year over year and marked the highest quarterly results in the company's history. Our margin expansion was driven primarily by higher profitability in both segments as a result of improved mix, production efficiencies, and higher volumes in our CCS segment. Non-IFRS adjusted earnings per share for the fourth quarter was $0.76, exceeding the high end of our guidance range. This results was $0.20 higher year over year, driven primarily by higher non-IFRS operating earnings as well as lower interest costs, a more favorable non-IFRS adjusted effective tax rate and lower shares outstanding.

我們第四季的非國際財務報告準則營運利潤率為 6.0%，較去年同期成長 70 個基點，創下公司史上最高的季度業績。我們的利潤率擴張主要是由於我們的 CCS 部門的組合改善、生產效率和產量增加而提高了兩個部門的獲利能力。第四季非 IFRS 調整後每股收益為 0.76 美元，超出了我們指導範圍的上限。這一業績同比增長了 0.20 美元，主要是由於非國際財務報告準則營業利潤的增加以及利息成本的降低、更有利的非國際財務報告準則調整後的有效稅率以及流通股的減少。

Moving on to our segment performance. ATS revenues in the fourth quarter were $803 million, down 2% year over year, slightly below our [prior] expectations. Of a low single digit percentage increase. The year-over-year decline in ATS segment revenue was driven by demand softness in our industrial business, primarily as a result of slowing demand in certain programs, as well as continued demand headwinds in our capital equipment business.

延續我們的細分市場表現。第四季 ATS 營收為 8.03 億美元，年減 2%，略低於我們[先前]的預期。百分比增幅較低，個位數。ATS 部門收入的年減是由於我們的工業業務需求疲軟所致，這主要是由於某些項目的需求放緩以及我們的資本設備業務的持續需求逆風所致。

These declines were partially offset by solid performance in our A&D business, which saw growth of more than 20% compared to the prior year period. ATS segment revenues accounted for 38% of total revenues in the fourth quarter compared to 40% in the same period last year. Our fourth quarter, CCS segment revenue of [$1.34 billion] was up 10% compared to the prior year period, driven by very strong growth in our enterprise end market, partially offset by anticipated demand softness in our communications end market.

這些下降被我們 A&D 業務的穩健表現所部分抵消，該業務與去年同期相比增長了 20% 以上。第四季ATS部門收入佔總收入的38%，而去年同期為40%。我們第四季的CCS 部門營收為[13.4 億美元]，與去年同期相比成長了10%，這得益於我們的企業終端市場的強勁成長，但部分被我們的通訊終端市場的預期需求疲軟所抵消。

CCS segment revenue accounted for 62% of total company revenues in the quarter compared to 60% in the prior year period. Enterprise end market revenue in the fourth quarter was up 46% year over year, meaningfully above our expectation of a high 20s percentage increase. This growth was driven by ramping programs and strengthening demand for AI-ML compute from our hyperscaler customers.

本季 CCS 部門營收占公司總營收的 62%，去年同期為 60%。第四季企業終端市場營收年增 46%，大大高於我們預期的 20% 的高成長率。這一成長是由我們的超大規模客戶對 AI-ML 運算的需求增加和不斷增加所推動的。

Revenue in our communications end market was lower by 10% compared to the prior year period better than our expectation of a mid-teens percentage decrease. Similar to last quarter, the decline was driven primarily by tough comps as some of our customers continue to digest inventory purchased in the prior year. HPS revenue was $484 million in the quarter, 1% lower year over year. HPS revenues were 23% of total company revenues in the fourth quarter compared to 24% in the prior year period.

與去年同期相比，我們的通訊終端市場的收入下降了 10%，優於我們預期的 10%左右的下降。與上季類似，下降主要是由於競爭激烈，因為我們的一些客戶繼續消化上一年購買的庫存。該季度 HPS 營收為 4.84 億美元，年減 1%。第四季 HPS 營收占公司總營收的 23%，去年同期為 24%。

Turning to segment margins, ATS segment margin in the fourth quarter was 4.7%, up 30 basis points year over year, driven by strong productivity and favorable mix. [CCS] segment margin during the quarter was 6.7%, up 80 basis points year over year, driven by higher volumes and improved mix, including significant growth with our hyperscaler customers.

至於部門利潤率，在強勁的生產力和有利的產品組合的推動下，第四季 ATS 部門利潤率為 4.7%，年增 30 個基點。 [CCS] 本季的細分市場利潤率為 6.7%，較去年同期成長 80 個基點，這得益於銷量增加和組合改善，包括我們的超大規模客戶的顯著增長。

During the fourth quarter and for 2023, we had one customer which accounted for more than 10% of total revenues, representing 29% for the quarter and 22% for the year. Celestica has a long-standing relationship with their customer, a global hyperscaler that we have been supporting for well over a decade. We support this customer across 25 programs covering HPF and non-HPS products, in the areas of networking and compute.

在第四季和 2023 年，我們有一個客戶佔總收入的 10% 以上，分別佔季度的 29% 和全年的 22%。Celestica 與他們的客戶（我們十多年來一直支持的全球超大規模供應商）有著長期的合作關係。我們在網路和運算領域透過 25 個涵蓋 HPF 和非 HPS 產品的專案為該客戶提供支援。

The products we build are highly complex and as a result, the majority of these programs are single-sourced. In addition, we are pleased that as a result of our strength in engineering and solid operational execution, we continue to win new programs with this customer and expect to see demand trends continued through 2024 and into 2025.

我們建構的產品非常複雜，因此大多數程式都是單一來源的。此外，我們很高興憑藉我們在工程方面的實力和紮實的營運執行力，我們繼續贏得該客戶的新項目，並預計需求趨勢將持續到 2024 年至 2025 年。

Moving on to some additional financial metrics. IFRS net earnings for the fourth quarter were $84 million or $0.7 per share compared to net earnings of $42 million or $0.35 per share in the prior year period. Adjusted gross margin for the fourth quarter was 10.4%, up 100 basis points year over year due to improved mix and production efficiencies. Fourth quarter non-IFRS adjusted effective tax rate was 20% in the quarter compared to 23% in the prior year period. Non-IFRS adjusted ROIC for the fourth quarter was 23.3%, an improvement of 2.6% compared to the prior year quarter, driven by strong profitability and working capital management.

接下來討論一些額外的財務指標。根據國際財務報告準則，第四季淨利為 8,400 萬美元，即每股 0.7 美元，而上年同期淨利為 4,200 萬美元，即每股 0.35 美元。由於產品組合和生產效率的改善，第四季度調整後毛利率為 10.4%，較去年同期成長 100 個基點。第四季非 IFRS 調整後有效稅率為 20%，而去年同期為 23%。在強勁的獲利能力和營運資本管理的推動下，第四季非國際財務報告準則調整後的投資資本回報率 (ROIC) 為 23.3%，較去年同期提高 2.6%。

Moving on to working capital. At the end of the fourth quarter, our inventory balance was $2.11 billion, down $155 million sequentially and down $244 million year over year. Cash deposits were at $905 million at the end of the fourth quarter, up $30 million sequentially and higher by $79 million compared to the prior year period.

轉向營運資金。截至第四季末，我們的庫存餘額為 21.1 億美元，季減 1.55 億美元，年減 2.44 億美元。截至第四季末，現金存款為 9.05 億美元，比上一季增加 3,000 萬美元，比去年同期增加 7,900 萬美元。

When accounting for cash deposits, inventory at the end of the fourth quarter was lower by $323 million on a year-over-year basis and lower by $185 million sequentially. Inventory day, net of cash deposit day, were 62 in the fourth quarter compared to 79 in the prior year period. We are pleased with the improvements we are seeing in inventory as material constraints continue to improve and can pull into lead times normalized.

考慮到現金存款，第四季末庫存年減 3.23 億美元，季減 1.85 億美元。第四季的庫存天數（扣除現金存放天數）為 62 天，去年同期為 79 天。我們對庫存的改善感到滿意，因為材料限制不斷改善，並且可以使交貨時間正常化。

Cash cycle days were 72 during the fourth quarter, flat sequentially and eight days higher than the prior year period. Capital expenditures for the quarter were $33 million or approximately 1.5% of revenue compared with 1.6% of revenue in the fourth quarter of 2022. For the full year, capital expenditures were $125 million, or 1.6% of revenue as we continue to invest in growth across our network to support customer demand.

第四季現金週期天數為 72 天，與上一季持平，比去年同期增加 8 天。本季的資本支出為 3,300 萬美元，約佔收入的 1.5%，而 2022 年第四季資本支出佔收入的 1.6%。全年資本支出為 1.25 億美元，佔收入的 1.6%，因為我們繼續投資於整個網路的成長，以支持客戶需求。

As we look to 2024, we expect our capital expenditures to modestly increase to between 1.75% and 2.25% of revenues with a higher level of spend in the first half of the year. Our increasing level of capital expenditures is geared towards capacity expansions at key [site] in support of demand for AI-ML compute and HPS programs.

展望 2024 年，我們預期資本支出將小幅增加至收入的 1.75% 至 2.25% 之間，上半年支出水準更高。我們不斷增加的資本支出水準是為了擴大關鍵[站點]的容量，以支援對 AI-ML 計算和 HPS 程序的需求。

In Thailand, we are currently building out over 100,000 square feet of additional capacity with the first phase expected to be online in the first quarter of 2024, and the second phase expected to be completed in the first half of 2025. This expansion is being partially funded by a co-investment with one of our hyperscaler customers to facilitate demand for highly specialized datacenter products. And in Malaysia, we are building more than 80,000 square feet of capacity to support strong demand from customers in our CCS segment, including our HPS business. This addition is expected to be online in the first half of 2024.

在泰國，我們目前正在建造超過 10 萬平方英尺的額外產能，第一階段預計將於 2024 年第一季上線，第二階段預計將於 2025 年上半年完工。此次擴張的部分資金來自與我們的一個超大規模客戶的共同投資，以滿足對高度專業化資料中心產品的需求。在馬來西亞，我們正在建立超過 80,000 平方英尺的產能，以滿足 CCS 領域（包括 HPS 業務）客戶的強勁需求。該新增功能預計將於 2024 年上半年上線。

Turning to non-IFRS adjusted free cash flow. We generated $84 million in the fourth quarter compared to $43 million in the prior year period, marking our 20th consecutive quarter of positive non-IFRS adjusted free cash flow. This result brings our total free cash flow for the year to $194 million ahead of our full year outlook of $150 million and approximately double our results from 2022 of $94 million. The outperformance was driven by strong profitability and working capital management.

轉向非國際財務報告準則調整後的自由現金流。我們第四季創造了 8,400 萬美元的收入，而去年同期為 4,300 萬美元，這標誌著我們連續第 20 個季度實現非 IFRS 調整後的正自由現金流。這一結果使我們今年的自由現金流總額達到 1.94 億美元，高於我們全年預期的 1.5 億美元，約為 2022 年 9,400 萬美元業績的兩倍。強勁的獲利能力和營運資本管理推動了業績的優異表現。

Looking forward to 2024, we are expecting $200 million or more of non-IFRS adjusted free cash flow, $25 million higher than the outlook we shared in our November virtual investor meeting.

展望 2024 年，我們預計非 IFRS 調整後的自由現金流將達到 2 億美元或更多，比我們在 11 月虛擬投資者會議上分享的前景高出 2,500 萬美元。

Moving on to some additional key metrics. At the end of the fourth quarter, our cash balance was $370 million higher by $17 million sequentially in combination with our approximately $600 million of borrowing capacity under our revolver. This provides us with liquidity of approximately $1 billion which we believe is sufficient to meet our anticipated business needs.

繼續討論一些其他關鍵指標。截至第四季末，我們的現金餘額比上一季增加了 3.7 億美元，增加了 1,700 萬美元，加上我們的循環貸款能力約為 6 億美元。這為我們提供了約 10 億美元的流動性，我們相信這足以滿足我們預期的業務需求。

Our gross debt at the end of the fourth quarter was $609 million, leaving us with a net debt position of $239 million. Our fourth quarter gross debt to non-IFRS trailing 12-month adjusted EBITDA leverage ratio was 1.1 turns, flat sequentially and down 0.2 turns compared to the same period of last year. As of December 31, 2023, we were compliant with all financial covenants under our credit agreements.

第四季末我們的總負債為 6.09 億美元，淨負債部位為 2.39 億美元。我們第四季的總債務與非國際財務報告準則的過去 12 個月調整後 EBITDA 槓桿率為 1.1 倍，環比持平，與去年同期相比下降 0.2 倍。截至 2023 年 12 月 31 日，我們遵守信用協議下的所有財務契約。

During the fourth quarter, we purchased approximately 400,000 shares for cancellation under our normal course issuer bid at a cost of $10 million. For 2023, we repurchased a total of $2.6 million shares for cancellation or approximately 2% of our shares outstanding at year end, at a total cost of $36 million.

第四季度，我們購買了大約 40 萬股股票，並根據正常發行人的出價以 1,000 萬美元的價格取消。2023 年，我們回購了總計 260 萬美元的股票以註銷，約佔年底已發行股票的 2%，總成本為 3,600 萬美元。

In December, the TSX accepted our normal course issuer bid, which is in effect until December 2024. Under this new NCIB, we are authorized to purchase up to approximately $11.8 million shares or approximately 10% of the public float. We continue to believe that investing in our share buyback program is a good use of capital and intend to repurchase shares on an opportunistic basis in 2024.

12 月，多倫多證券交易所接受了我們的正常發行人投標，該投標有效期至 2024 年 12 月。根據新的 NCIB，我們被授權購買最多約 1,180 萬美元的股票，或約 10% 的公眾持股。我們仍然認為，投資我們的股票回購計畫是對資本的良好利用，並打算在 2024 年機會主義的基礎上回購股票。

Now turning to our guidance for the first quarter of 2024. First quarter revenues are expected to be in the range of $2.025 billion to $2.175 billion, which if the midpoint of the ranges achieved would represent growth of 14% compared to the prior year period. First quarter, non-IFRS adjusted earnings per share are expected to be in the range of $0.67 to $0.77 per share, which at the midpoint would represents an improvement of $0.25 per share or 53% compared to the first quarter of 2023.

現在轉向我們 2024 年第一季的指導。第一季營收預計在 20.25 億美元至 21.75 億美元之間，如果達到該範圍的中點，則與去年同期相比將成長 14%。第一季度，非國際財務報告準則調整後每股盈餘預計在每股 0.67 美元至 0.77 美元之間，與 2023 年第一季相比，每股盈餘中位數將增加 0.25 美元，成長 53%。

At the midpoint of our revenue and non-IFRS adjusted EPS guidance ranges are achieved non-IFRS operating margin would be 6.0%, which would represent an increase of 80 basis points over the same period last year. Non-IFRS adjusted SG&A expense for the first quarter is expected to be in the range of $62 million to $64 million.

在我們的收入和非國際財務報告準則調整後每股收益指引範圍的中點處，非國際財務報告準則的營業利潤率為 6.0%，這意味著比去年同期增加了 80 個基點。預計第一季非 IFRS 調整後的 SG&A 費用將在 6,200 萬美元至 6,400 萬美元之間。

We anticipate our non-IFRS adjusted effective tax rate to be approximately 20% for the first quarter, excluding any impact from taxable foreign exchange or unanticipated tax settlements. Our first quarter guidance assumes that our income will be subject to global minimum tax as legislation that has been introduced in Canada may be approved before the end of the quarter. If this legislation is not substantially enacted in the first quarter, our estimate for our first quarter non-IFRS adjusted effective tax rate would be approximately 15%.

我們預計第一季經非國際財務報告準則調整後的有效稅率約為 20%，不包括應稅外匯或意外稅務結算的任何影響。我們第一季的指導假設我們的收入將繳納全球最低稅，因為加拿大引入的立法可能會在本季度末之前獲得批准。如果這項立法在第一季沒有實質頒布，我們對第一季非 IFRS 調整後的有效稅率的估計約為 15%。

Now turning to our end market outlook for the first quarter of 2024. In our ATS segment, we anticipate revenue to be down in the low single digit percentage range year over year, driven by demand softness in our industrial business and ongoing market softness in capital equipment, partly offset by continued growth in A&D. We anticipate revenues in our communications end market to be up in the low single digit percentage range year over year, driven by strengthening demand in networking from hyperscaler customers, including in our HPS programs.

現在轉向我們對 2024 年第一季的終端市場展望。在我們的 ATS 部門，由於我們的工業業務需求疲軟和資本設備市場持續疲軟，我們預計收入將同比下降較低的個位數百分比，但航空與國防業務的持續成長部分抵消了這一影響。我們預計，由於超大規模客戶（包括我們的 HPS 計劃）對網路的需求增強，我們的通訊終端市場的收入將同比增長在較低的個位數百分比範圍內。

Finally, in our enterprise end market, we expect revenue to be up in the high 60s percentage range year over year, driven by anticipated demand growth in AI-ML compute programs from our hyperscaler customers. I'll now turn the call back over to Rob to discuss the outlook for each of our end markets and the overall business.

最後，在我們的企業終端市場，由於我們的超大規模客戶對 AI-ML 運算程式的預期需求成長，我們預期營收將年增 60% 以上。現在我將把電話轉回給 Rob，討論我們每個終端市場和整體業務的前景。

Thank you, Mandeep. Before discussing the outlook for our markets, I would like to reaffirm the following metrics from our 2024 financial outlook that we provided at our virtual investor meeting in November. We continue to expect revenue of $8.5 billion or more; non-IFRS adjusted EPS of $2.70 or more; and non-IFRS operating margin to be in the range of 5.5% to 6%.

謝謝你，曼迪普。在討論我們的市場前景之前，我想重申我們在 11 月的虛擬投資者會議上提供的 2024 年財務展望中的以下指標。我們仍然預計收入將達到 85 億美元或更多；非 IFRS 調整後每股收益為 2.70 美元或以上；非 IFRS 營業利益率在 5.5% 至 6% 之間。

In addition, as Mandeep mentioned, we have raised our non-IFRS free cash flow outlook for the year to $200 million or more. We are pleased with our strong performance in 2023 and continued to see very positive momentum in the first quarter of 2024. As such, we are currently undertaking discussions with our customers and suppliers in order to obtain better visibility into the remainder of the year. And we look forward to providing an update on our 2024 outlook with our first quarter results.

此外，正如 Mandeep 所提到的，我們已將今年的非 IFRS 自由現金流前景上調至 2 億美元或更多。我們對 2023 年的強勁表現感到滿意，並在 2024 年第一季繼續看到非常積極的勢頭。因此，我們目前正在與客戶和供應商進行討論，以便更好地了解今年剩餘時間。我們期待透過第一季業績提供 2024 年展望的最新資訊。

Now moving on to the outlook for each of our businesses. Beginning with our ATS segment. Our industrial business recorded annual growth of 29% in 2023, driven by ramping programs in smart energy and EV charging. However, we began to see signs of market softness towards the end of the year due in part to pockets of weakness in the broader economic environment, higher interest rates as well as some delays in new program ramps.

現在我們來談談我們每項業務的前景。從我們的 ATS 部分開始。在智慧能源和電動車充電專案的推動下，我們的工業業務在 2023 年實現了 29% 的年增長率。然而，我們在年底開始看到市場疲軟的跡象，部分原因是更廣泛的經濟環境疲軟、利率上升以及新計劃的一些延遲。

As such, we expect to see lower revenues in our industrial portfolio through the first half of the year before seeing a return to year-to-year growth in the second half, which should result in modest growth in our industrial business for all of 2024 when compared to 2023. We continue to believe that the structural trends in markets such as EV charging, smart energy and telematics amongst others remain intact and are supportive to growth in our industrial business over the long term.

因此，我們預計上半年我們的工業投資組合收入將下降，然後下半年將恢復同比增長，這將導致我們的工業業務在 2024 年全年溫和增長與 2023 年相比。我們仍然相信，電動車充電、智慧能源和遠端資訊處理等市場的結構性趨勢保持不變，並有利於我們工業業務的長期成長。

In our A&D business, the sustained recovery in commercial aerospace has seen domestic air travel surpassed pre-pandemic levels in many economies, resulting in annual revenue growth of more than 30% in 2023 compared to 2022.

在我們的A&D業務中，商業航空航太的持續復甦使得許多經濟體的國內航空旅行超過了疫情前的水平，導致2023年的年收入較2022年增長超過30%。

Looking ahead, we expect to see strong demand across our commercial aerospace submarkets to continue in 2024. Our defense business is also expected to see solid growth in the year ahead, supported by new program wins and increased government investment in military capabilities. Overall, we anticipate the solid demand to drive low double digit percentage growth in our A&D business in 2024 compared to 2023.

展望未來，我們預期商業航空航太子市場的強勁需求將在 2024 年持續。在新項目的勝利和政府對軍事能力投資增加的支持下，我們的國防業務預計在未來一年將實現穩健成長。總體而言，與 2023 年相比，我們預計 2024 年的強勁需求將推動我們的 A&D 業務實現較低的兩位數百分比成長。

In our Capital Equipment business, market forecasts continue to suggest that the underlying market demand is operating close to trough levels, and we should see flat to slightly higher demand in 2024. We are maintaining our outlook for modest revenue growth in our capital equipment business in 2024, supported by the ramping of new program wins and our assumption of base demand holding flat for 2023. We anticipate that year-over-year growth will largely be in the back half of the year, setting up for a stronger recovery in demand in 2025.

在我們的資本設備業務中，市場預測繼續表明潛在市場需求正在接近低谷水平，我們預計 2024 年需求將持平或略有上升。我們維持對 2024 年固定設備業務收入溫和成長的預期，這得益於新項目的增加以及我們對 2023 年基本需求持平的假設。我們預計同比成長將主要發生在今年下半年，為 2025 年需求更強勁的復甦奠定基礎。

In our HealthTech business, we anticipate our revenue to grow in 2024 compared to 2023 as we ramp new programs. So for our overall ATS segment, we currently anticipate that revenue will decline slightly in the first half of 2024 compared to 2023 due to pockets of macro weakness affecting some of our markets. However, we anticipate that segment revenue will resume year-to-year growth in the second half of the year.

在我們的健康科技業務中，隨著我們推出新項目，我們預計 2024 年的收入將比 2023 年有所成長。因此，對於我們的整個 ATS 細分市場，我們目前預計 2024 年上半年的營收將比 2023 年略有下降，因為宏觀疲軟影響了我們的部分市場。不過，我們預計下半年該部門營收將恢復年增。

Overall, we are maintaining our expectation for ATS revenue growth in the mid-single digit percentage range in 2024. That's turning to our CCS segment. The demand backdrop for our CCS segment continues to be very strong. Investments from hyperscalers and data center infrastructure are fueling significant CapEx spending driven by growing demand for artificial intelligence and machine learning applications.

整體而言，我們維持 2024 年 ATS 收入成長在中個位數百分比範圍內的預期。這就是我們的 CCS 領域。我們 CCS 領域的需求背景仍然非常強勁。由於對人工智慧和機器學習應用程式的需求不斷增長，來自超大規模企業和資料中心基礎設施的投資正在推動大量資本支出。

In 2023, our portfolio with our hyperscalers saw revenue growth of 32% compared to 2022, recording nearly $2.9 billion in revenues. This accounted for 62% of our total CCS segment revenues in 2023, up from 51% the prior year. At our recent Virtual Investor Meeting in November, we delved further into this dynamic, which we believe is long term and structural in nature. We anticipate this solid growth to continue in 2024 and believe that this investment cycle has the potential to support several years of strong demand for our CCS segment.

與 2022 年相比，2023 年我們的超大規模產品組合營收成長了 32%，營收接近 29 億美元。這佔 2023 年 CCS 部門總收入的 62%，高於前一年的 51%。在最近 11 月的虛擬投資者會議上，我們進一步深入研究了這種動態，我們認為這種動態本質上是長期的、結構性的。我們預計這種穩健成長將在 2024 年持續，並相信這一投資週期有潛力支持我們 CCS 領域未來幾年的強勁需求。

The demand outlook for our enterprise end market continues to be impressive as the beneficiary of hyperscales growing deployment of AI-ML compute capacity. We are seeing the strong momentum from 2023 continue. And as mentioned earlier, we anticipate significant growth within our AI-ML compute portfolio as we enter 2024.

由於 AI-ML 運算能力的超大規模部署不斷增長，我們的企業終端市場的需求前景繼續令人印象深刻。我們看到 2023 年以來的強勁勢頭仍在繼續。如同前面所提到的，隨著進入 2024 年，我們預計我們的 AI-ML 運算產品組合將顯著成長。

We expect additional growth in our storage business to materialize in the latter half of the year, driven by demand from new programs. After experiencing some softness in 2023, demand in our communications end market is anticipated to resume year-to-year growth in the first quarter, driven by a resumption of strength in networking demand from hyperscalers, which is expected to persist throughout the year.

我們預計，在新專案需求的推動下，我們的儲存業務將在今年下半年進一步成長。在經歷了 2023 年的疲軟之後，在超大規模企業的網路需求恢復強勁的推動下，我們的通訊終端市場的需求預計將在第一季度恢復同比增長，預計這種增長將持續全年。

Within our HPS business, we anticipate to resume year-to-year growth in the first quarter of 2024 and for the full year. This growth is being fueled by a number of new program wins in both networking, supported by growth in our 400G and 800G platforms and to some extent AI-ML compute.

在我們的 HPS 業務中，我們預計將在 2024 年第一季和全年恢復同比增長。這種成長是由網路領域的許多新項目所推動的，我們的 400G 和 800G 平台以及某種程度上 AI-ML 運算的成長也為這一成長提供了支持。

For 2024, we are maintaining our previously communicated expectation of low double digit percentage revenue growth in our CCS segment, supported by solid growth in both our enterprise and communications end markets. Although we are seeing some divergence in the short term demand dynamics underlying our various end markets, we believe that the fundamentals supporting our overall business are very constructive due to the benefits of our strategic portfolio diversification and our consistent execution. We feel that our positioning for 2024 remains positive as we remain confident in our ability to meet our financial outlook and improve on our very strong performance in 2023.

對於 2024 年，在企業和通訊終端市場的穩健成長的支持下，我們維持先前傳達的 CCS 業務低兩位數百分比收入成長預期。儘管我們看到各個終端市場的短期需求動態存在一些差異，但我們相信，由於我們策略投資組合多元化和一致執行的好處，支持我們整體業務的基本面非常具有建設性。我們認為，我們對 2024 年的定位仍然樂觀，因為我們對實現 2023 年財務前景並改善我們非常強勁的業績的能力仍然充滿信心。

With that, I would now like to turn the call over to the operator for questions. Thank you.

現在，我想將電話轉給接線員詢問問題。謝謝。

(Operator Instructions) Robert Young, Canaccord Genuity.

（操作員說明）Robert Young，Canaccord Genuity。

Hi, Can you give us a little bit of color on the hyperscale business and CCS, given the large customer accounting for 29%? It's a pretty significant chunk. Maybe if you could talk about the business outside of that large customer? Is that driven by the high level of AI compute currently, and there's one customer or a small number customers there, or is there some other dynamic going on there?

您好，考慮到大客戶佔 29%，您能為我們介紹超大規模業務和 CCS 嗎？這是一個相當重要的區塊。也許您可以談談大客戶以外的業務？這是由當前高水平的人工智慧運算驅動的，並且那裡有一個客戶或少數客戶，還是那裡有其他動態發生？

Oh, hi, Rob. So this particular customer, it's a hyperscaler customer than making significant investments in AI-ML compute as well as networking. As we mentioned on the call, we have over 25 programs with this customer and it's comprised of everything from hardware platform solutions to high value EMS to even services.

哦，嗨，羅布。因此，這個特定的客戶是一個超大規模客戶，而不是在 AI-ML 運算和網路方面進行大量投資。正如我們在電話中提到的，我們與該客戶有超過 25 個項目，涵蓋從硬體平台解決方案到高價值 EMS 甚至服務的所有內容。

They are an industry leader. We've been doing business with them for over a decade. And they're also co-investing with us on some CapEx -- facility investment over in Thailand. So a very healthy relationship across the broader hyperscaler business. We're also seeing strong growth from several others in the same area, and we expect the concentration to improve over time as inflows, people's investment cycles.

他們是行業的領導者。我們與他們開展業務已有十多年了。他們也與我們共同投資一些資本支出——在泰國的設施投資。因此，在更廣泛的超大規模業務中建立了非常健康的關係。我們也看到同一領域其他幾個國家的強勁成長，我們預計隨著資金流入和人們的投資週期，集中度會隨著時間的推移而提高。

I'd just add to that, Rob, that, as a reminder, we do business with the top five hyperscalers and while we are doing a lot of AI and compute with both with the large customer that Rob has talked about, we're starting to see some return in demand coming on the networking side, which is helping us across the customer base. We're really encouraged that as we go into the first quarter now. We're seeing growth resume in communications. We're seeing growth resume in hardware platform solutions and those are offerings that we provide across the customer base.

Rob，我想補充一點，提醒一下，我們與排名前五的超大規模企業有業務往來，雖然我們正在與 Rob 談到的大客戶進行大量人工智能和計算工作，但我們開始看到網絡方面的需求有所回報，這對我們整個客戶群都有幫助。當我們現在進入第一季時，我們感到非常鼓舞。我們看到通訊領域恢復成長。我們看到硬體平台解決方案恢復成長，這些是我們為客戶群提供的產品。

Okay, thank you. And then the second question, maybe I can get ahead of myself. You said you're going to revisit the full year outlook, I think in Q1, but the outlook for 5.5% to 6% operating margin seems conservative given you're doing so well in the enterprise business in CCS at 6.7% and you're entering that 6% in the guide, looks like 6%. So it looks as though it's going to decelerate in the back half of the year. Maybe you could just discuss that and I'll pass the line.

好的，謝謝。然後是第二個問題，也許我可以超越自己。您說過您將重新審視全年前景，我認為是在第一季度，但考慮到您在 CCS 企業業務中的表現非常好（6.7%），5.5% 至 6% 的營業利潤率前景似乎保守。重新在指南中輸入6%，看起來像6%。因此，今年下半年似乎會減速。也許你可以討論這個問題，然後我會掛斷電話。

Yeah, Robert, I'll talk about two things. One is the outlook for the full year and then I can talk to your point on margin specifically. So when we look at full year 2024, we're really pleased with the way we enter '23. And clearly, we're off to a really hot start now into the first quarter. And again, encouraged by where we're seeing the demand signals come through both on comms and HPS. But also the demand for signals from the hyperscalers continue to strength.

是的，羅伯特，我要談兩件事。一是對全年的展望，然後我可以具體談談你關於利潤率的觀點。因此，當我們展望 2024 年全年時，我們對進入「23」的方式感到非常滿意。顯然，我們第一季的開局非常火爆。再次，我們看到通訊和 HPS 上都傳來需求訊號，這讓我們感到鼓舞。但超大規模企業對訊號的需求也持續增強。

As you know, in November, we provided the outlook of $8.5 billion or more and $2.70 of EPS or more. And right now, we really do see that as being before. What we are looking to do, as Rob mentioned in his prepared remarks, is we're going back to the customer base and revalidating the second half outlook. We're seeing that increased trends happening in the first half and what we want to do is go and validate whether or not those increasing level of demand -- signals are going to be added in the second half as well. So in April, we'll come back with an updated forecast.

如您所知，11 月我們提供的前景為 85 億美元或以上，每股收益為 2.70 美元或以上。現在，我們確實看到了以前的情況。正如羅佈在準備好的演講中提到的那樣，我們要做的是回到客戶群並重新驗證下半年的前景。我們看到上半年出現了增加的趨勢，我們想要做的是驗證這些增加的需求水準是否也會在下半年增加。因此，在四月份，我們將帶來更新的預測。

To your point on the margin profile itself, as we talked about, ATS is expected to see some very minor levels of declines in the first half of this year before resuming growth in the back end of the year. ATS, again, we're expecting across all of our end markets to have some level of growth in 2024. But because that growth in the back half is going to be off the back of ramping programs, there is going to be a little bit of margin challenges around there as well. Again, 6% for the first quarter, I believe the [270] is the floor. And obviously we're going to be working towards the high end of that 5.5% to 6% range as best we can.

正如我們所討論的，就您關於利潤狀況本身的觀點而言，ATS 預計今年上半年會出現一些非常小幅度的下降，然後在年底恢復成長。ATS 再次表示，我們預計所有終端市場在 2024 年都會出現一定程度的成長。但由於下半年的成長將是在擴大計畫的支持下實現的，因此利潤率也將面臨一些挑戰。同樣，第一季為 6%，我相信 [270] 是下限。顯然，我們將盡最大努力實現 5.5% 至 6% 範圍的高端。

And one other thing I would add, Rob, I think by the end of the first quarter, we'll have better visibility into our capital equipment markets. We are seeing some signs of recovery. We're cautiously optimistic. Some of our customers are starting to restock consumables and spares, which is a good sign. So I think the as capital equipment gets better, so will some of the ATS margins as well.

我要補充的另一件事是，羅布，我認為到第一季末，我們將對資本設備市場有更好的了解。我們看到了一些復甦的跡象。我們持謹慎樂觀的態度。我們的一些客戶開始補充消耗品和備件，這是一個好兆頭。因此，我認為隨著資本設備變得更好，ATS 的一些利潤也會增加。

Okay. Thank you. I'll pass on.

好的。謝謝。我會繼續。

Okay.

好的。

Maxim Matushansky, RBC Capital Markets.

馬克西姆‧馬圖尚斯基，加拿大皇家銀行資本市場。

Hi, good morning. Just on the communications segment, has there been any changes to your expectation for the networking growth resuming Q1 or is it just the OEM business that's offsetting the hyperscaler strength? I think I see that the guidance implies a quarter-over-quarter deceleration. So is that to mean that is primarily because of the OEM business softness?

嗨，早安。就通訊領域而言，您對第一季恢復網路成長的預期是否有任何變化，或者只是 OEM 業務抵消了超大規模廠商的實力？我認為該指導意味著季度環比減速。那麼這是否意味著這主要是因為 OEM 業務疲軟？

Now as we head into our Q1, we expect communications and networking to actually be up driven by hyperscalers, both on 400G and 800G programs and there's also HPS driven program. So as we had into last year, we had some tough comps. Some of those tough comps are lapsing and now we're seeing comps return to growth.

現在，當我們進入第一季時，我們預計通訊和網路實際上將由超大規模供應商推動，包括 400G 和 800G 項目，還有 HPS 驅動的項目。因此，正如我們去年所做的那樣，我們有一些艱難的比賽。一些艱難的競爭正在消失，現在我們看到競爭恢復成長。

Got it. And on the hyperscalers, any changes from your last update in November on your hyperscaler customer programs and your expected demand over the next few quarters? And you talked about new program wins with your largest customer, is that something that you anticipated in previous quarters? Is that something that's new?

知道了。在超大規模企業方面，與 11 月上次更新超大規模企業客戶計畫以及未來幾季的預期需求相比，有何變化？您談到了與最大客戶的新計劃獲勝，這是您在前幾個季度所預期的嗎？這是新事物嗎？

Yes, we've been on a hyperscaler programs, we've actually been winning incremental share, that on top of increased demand strength has both been positive for us, and some of the reasons for some of the improved outlook that we're seeing into Q1 and potentially for the full year. Hence, that's why we're going to take a quarter to revisit with our customers and take a look at what the full year has to be. But we have been winning some incremental share and been booking really a significant amount of 800G programs.

是的，我們一直在進行超大規模項目，我們實際上一直在贏得增量份額，除了需求強度的增加之外，這對我們來說都是積極的，也是我們看到的一些前景改善的一些原因進入第一季度，甚至可能持續到全年。因此，這就是為什麼我們要花一個季度的時間與客戶一起重新審視全年的情況。但我們已經贏得了一些增量份額，並預訂了大量 800G 項目。

And just final one for me, just to revisit ATS, I think some of your peers have also been seeing a slowdown in their end markets over the last little bit based on customers working through their inventory buffers. Is that what you're seeing as well this quarter? And can maybe speak to within industrial capital equipment end markets specifically? What is causing you to expect demand to return by the second half? Is it primarily kind of those new program ramps?

對我來說，最後一個問題是，我想再次回顧 ATS，我認為你們的一些同行也發現，由於客戶正在消耗庫存緩衝，他們的終端市場在過去一段時間裡出現了放緩。這也是您本季所看到的嗎？或許可以具體談談工業資本設備終端市場？是什麼導致您預計需求將在下半年回升？主要是那些新項目的升級嗎？

Yeah, good question. So our industrial business in '23, by way of reminder, grew close to 30%. And again, it was fueled by green energy programs, including EV charging, energy storage, energy generation. As we're exiting the year, demand started cycling down in some of these markets and the market that were really impacted were interest rate sensitive markets. But moreover, because the material environment has dramatically improved. Our customers were taking the opportunity to reduce their strategic inventory buffers.

是的，好問題。因此，提醒一下，我們 23 年的工業業務成長了接近 30%。再次，它是由綠色能源計劃推動的，包括電動車充電、能源儲存、能源發電。隨著今年的結束，其中一些市場的需求開始下降，而真正受到影響的市場是利率敏感市場。但更重要的是，因為物質環境有了極大的改善。我們的客戶正在利用這個機會減少他們的戰略庫存緩衝。

We think those buffers will normalize in the first half of the year. And in the second half of the year, we have new programs ramps plan which would return the industrial business to growth. In our capital equipment business, as I mentioned earlier, we're cautiously optimistic as we get to the back half of the year and certainly into 2025 that we're seeing some signs of growth, and the costs are pretty much aligned there and again, missing some spares orders. And as a reminder, some of the headwinds that we're seeing in ATS, we think will be more than offset with our strength that we're seeing in our CCS business.

我們認為這些緩衝將在今年上半年恢復正常。今年下半年，我們制定了新的計劃，這將使工業業務恢復成長。正如我之前提到的，在我們的資本設備業務中，我們持謹慎樂觀的態度，因為到了今年下半年，當然到 2025 年，我們看到了一些增長的跡象，而且成本一次又一次地基本一致，缺少一些備件訂單。提醒一下，我們在 ATS 中看到的一些不利因素，我們認為將足以抵消我們在 CCS 業務中看到的優勢。

Great. Thanks for that line.

偉大的。謝謝你的那條線。

Thanos Moschopoulos, BMO Capital Markets.

Thanos Moschopoulos，BMO 資本市場。

Hi, good morning. With respect to the full year guidance, I hear you with respect to wanting to discuss the second half outlook with your customers before revisiting the guidance. But certainly from the demand signals you're highlighting, it seems like it will be a stronger second half. I guess from your perspective, what might be the key areas of uncertainty you might get further color on before visiting guidance? Would that be on semi and industrial or -- which areas would be the biggest source of demand variability as you think about second half?

嗨，早安。關於全年指導，我聽說您希望在重新審視指導之前與客戶討論下半年的前景。但可以肯定的是，從您強調的需求訊號來看，下半年似乎會更加強勁。我想從您的角度來看，在訪問指南之前您可能會進一步了解哪些不確定的關鍵領域？是半成品和工業領域，還是您認為下半年哪些領域將是需求變化的最大來源？

Yeah. Hi, Thanos, Mandeep here. So we were pleased to be able to interlock with our customer base, specifically on the hyperscaler side in the fourth quarter. And that has led us to confidently come out with the outlook that we did. Even after our virtual investor meeting in November, we saw incremental improvements to the forecast coming from the hyperscalers.

是的。嗨，薩諾斯，這裡是曼迪普。因此，我們很高興能夠與我們的客戶群建立聯繫，特別是在第四季度的超大規模方面。這讓我們充滿信心地提出了我們所做的展望。即使在 11 月的虛擬投資者會議之後，我們也看到超大規模企業的預測不斷改善。

And so that's reflected in our Q1 guidance. Again, our outlook is for 14% year-over-year growth which is higher than what we would have said probably in November. And we're seeing that demand strength to continue into the second quarter.

這反映在我們第一季的指導上。同樣，我們的預期是同比增長 14%，高於我們在 11 月可能所說的水平。我們看到這種需求強勁勢頭將持續到第二季​​。

So the conversations with the hyperscalers are, is there an improvement in material availability on your end, is there -- has your deployment plans changed at all? And how does that impact the second half of the year? Is it going to be similar to what we're seeing right now in the first half of the year?

因此，與超大規模企業的對話是，您的材料可用性是否有所改善？這對下半年有何影響？它會與我們今年上半年看到的情況類似嗎？

And then to Rob's point on capital equipment. To our assumption right now is that the base market is going to be flat. We're around trough levels right now. Some encouraging signs, as Rob talked about, where we're expecting the growth to be in capital equipment as we ramp ASML. ASML is a customer of ours for a few years now, but we've won a number of (technical difficulty) the last year or so.

然後是羅布關於資本設備的觀點。我們現在的假設是基礎市場將會持平。我們現在處於低谷水平附近。正如 Rob 所說，一些令人鼓舞的跡象表明，隨著 ASML 的發展，我們預計資本設備將出現成長。ASML 是我們的客戶已經有幾年了，但我們在去年左右贏得了一些（技術難題）。

And those programs are in the process of being ramped right now and that the demand signals from that specific customer have not changed. And so what we're looking to do as we go to the rest of the customer base and capital equipment is to understand whether or not some of these early signs that we're seeing in terms of consumables and spares is going to lead to a demand uptick in the back end of the year. And so it's really around hyperscalers and capital equipment.

這些計劃目前正在逐步推進，來自特定客戶的需求訊號並沒有改變。因此，當我們接觸其他客戶群和資本設備時，我們要做的就是了解我們在消耗品和備件方面看到的一些早期跡像是否會導致年底需求回升。所以它實際上是圍繞著超大規模和資本設備進行的。

That's helpful. And then on the softness in industrial, just to clarify, is that primarily weeded in green energy or is that kind of across the board in your various end markets and industrial?

這很有幫助。然後，關於工業的疲軟，我想澄清一下，這主要是在綠色能源領域，還是在你們的各個終端市場和工業領域都是如此？

Yeah. It's pronounced mostly in EV charging, which is kind of being driven by a slowdown in EV, sales and also some of the incentives. At least in the US are slow to get out to the marketplace. That's having some impact as well as the higher interest rates.

是的。這主要體現在電動車充電領域，這在某種程度上是由電動車、銷售和一些激勵措施放緩所推動的。至少在美國，進入市場的速度很慢。這以及更高的利率都產生了一些影響。

But we're also seeing a little bit of a slowdown in -- about the broader industrial space, just driven by the burn-down of strategic inventory buffers. Again, we expect some new program ramps and the burn-down of the [bucket] for this entire industrial business to start resuming to growth in the back half of the year.

但我們也看到更廣泛的工業領域出現了一些放緩，這只是由於戰略庫存緩衝的消耗所致。同樣，我們預計整個工業業務的一些新計劃和燃盡將在今年下半年開始恢復成長。

Great. I'll pass the line. Thanks.

偉大的。我會過線。謝謝。

Daniel Chan, TD Securities.

陳‧丹尼爾 (Daniel Chan)，道明證券。

Hi, good morning. Congrats on the strong quarter. So communications was stronger than expected this quarter. Was that driven by AI demand strength or is that from non-AI related cloud demand where we're also starting to see some early signs of a recovery?

嗨，早安。恭喜季度表現強勁。因此，本季的溝通情況強於預期。這是由人工智慧需求強度驅動的，還是由非人工智慧相關的雲端需求驅動的，我們也開始看到一些復甦的早期跡象？

In terms of comms, it was driven by networking, which was kind of the pull-through that we've been mentioning that we would see as a result of AI-ML demand. And within networking, there's -- I'll call it AI-ML networking, which is directly driven and we've seen a growth in those programs. Networking comes in a couple of different flavors, the 48 volt, it's really driven by some of the AI ML applications, and we've certainly seen an uptick in that.

就通訊而言，它是由網路驅動的，這是我們一直提到的一種拉動，我們將看到人工智慧-機器學習需求的結果。在網路領域，我將其稱為 AI-ML 網絡，它是直接驅動的，我們已經看到這些程式的成長。網路有幾種不同的風格，48 伏特，它實際上是由一些 AI ML 應用程式驅動的，我們當然已經看到了這種情況的上升。

And then we've seen a lot of new data center leasing activity. So just curious on the timing of this communications ramp as you guys are expecting 800G to ramp into 2025. So with all these new data centers coming online, are these new builds going to have 800G and them or will they leverage 400G to begin with? So just wondering like with them building out all these new data centers this year, whether they're going to be putting a lot of that next generation stuff or whether they're going with our current generation equipment?

然後我們看到了很多新的資料中心租賃活動。所以只是對通訊升級的時間感到好奇，因為你們預計 800G 將在 2025 年升級。那麼，隨著所有這些新資料中心的上線，這些新建的資料中心是否會配備 800G，還是會先使用 400G？因此，我想知道，就像他們今年建造所有這些新資料中心一樣，他們是否會投入大量下一代設備，或者是否會使用我們目前的一代設備？

I took your question. What I can tell you is that 400G is strong throughout the year. 800G is starting to ramp in the first half of the year, very strong in the back half of the year and certainly picking up into '25. That would lead me to believe it's a little bit of a blend. But to be frank with you, I'm not entirely sure.

我接受了你的問題。我可以告訴你的是，400G全年都很強勁。800G 在今年上半年開始成長，下半年非常強勁，並且肯定會在 25 年有所回升。這會讓我相信它有點混合。但坦白說，我並不完全確定。

One of the things that we are seeing, Dan, is that within some of our customers' CapEx spending, they are shifting CapEx towards AI applications. And so making a decision to refresh certain data centers over other data centers. In addition to that, what we're also seeing is that for some of the customers as they -- as silicon becomes available, they're looking for 400G solutions while they wait 800G to be available in 2025 as you go through the design cycle, et cetera. So we are seeing a shift of investment towards AI applications, sometimes at the expense of more traditional cloud applications.

Dan，我們看到的一件事是，在我們的一些客戶的資本支出中，他們正在將資本支出轉向人工智慧應用。因此決定更新某些資料中心而不是其他資料中心。除此之外，我們也看到，對於某些客戶來說，隨著矽的出現，他們正在尋找 400G 解決方案，同時等待 800G 在 2025 年完成設計週期等等。因此，我們看到投資轉向人工智慧應用程序，有時是以犧牲更傳統的雲端應用程式為代價的。

Appreciate it. Thanks for that. And the final question, you also mentioned the ramp-up of some of these sites. Just wondering whether you have enough capacity to deal with the near term demand that's coming in throughout this year? And how those discussions are going on your ability to service some of that demand? Thank you.

欣賞它。謝謝你。最後一個問題，您也提到了其中一些網站的發展。只是想知道您是否有足夠的能力來應對今年全年出現的近期需求？關於您滿足部分需求的能力的討論進度如何？謝謝。

Thanks. We've been interlocking with our customers and been investing forward our capacity expansions. Mainly in Thailand, we have a couple of phases and also in Malaysia and phases coming online in February, ribbon-cutting, frankly. So yes, we do have enough capacity and it's coming online very much aligned with the demand side of the fence. And these are also highly automated factories, highly automated test centers. So they're really producing a lot of productivity.

謝謝。我們一直與客戶緊密合作，並不斷投資以擴大產能。主要在泰國，我們有幾個階段，在馬來西亞也有幾個階段，坦白說，這些階段將於二月上線，剪綵。所以，是的，我們確實有足夠的產能，而且它的上線與需求方面非常一致。這些也是高度自動化的工廠、高度自動化的測試中心。所以他們確實產生了大量的生產力。

Great. Thanks.

偉大的。謝謝。

Matt Sheerin, Stifel.

馬特謝林，史蒂菲爾。

Yes, thank you. Good morning. My first question, just wanted to go circle back to the guidance for [FRCCS] and understanding you sort of lack of visibility into the back half. But just looking to Q2, I know you have some visibility. Obviously, you're going to be up in enterprise high 60s year over year. And I know there's a lot of lumpiness in that business where you're up double digits one quarter and then there's a digestion period. What should we think about, Mandeep, in terms of modeling at least sort of the first half into Q3 in terms of seasonality, and obviously, there's not a lot of seasonality. It's different. But how should we think about that, the cadence there?

是的，謝謝。早安.我的第一個問題，只是想回到 [FRCCS] 的指南並理解您對後半部分缺乏可見性。但只要看看第二季度，我知道你有一些知名度。顯然，您的企業年增長率將達到 60 多歲。我知道這個行業有很多不穩定因素，一個季度成長了兩位數，然後就是一個消化期。Mandeep，我們應該考慮什麼，至少在季節性方面對第三季上半年進行建模，顯然，季節性因素並不多。這是不同的。但我們該如何思考那裡的節奏呢？

Yes. Good morning, Matt. So we do have from our legacy OEM accounts a little bit of seasonality in our first quarter. And as such, I think you can think about the first quarter revenue number being the low point for the year we are looking for sequential improvement as we go into the second quarter.

是的。早安，馬特。因此，我們第一季的傳統 OEM 帳戶確實存在一些季節性因素。因此，我認為您可以認為第一季的收入數字是我們在進入第二季時尋求連續改善的一年的最低點。

And then again, I just wanted to maybe clarify some of the wording, which is we do have an interlock with our customer base in the back half of the year. And that interlock gives us the confidence to be able to say that the outlook that we're giving, which is right now, we believe $8.5 billion should be the floor.

再說一遍，我只是想澄清一些措辭，即我們在今年下半年確實與我們的客戶群有聯繫。這種連鎖反應讓我們有信心說，我們目前給出的前景，我們認為 85 億美元應該是下限。

What we have seen, though, is that after the interlock, requests from customers say, can you get actually more product and can you give it to me sooner than what I had originally asked for? And so that's what's filling in right now Q1 and in Q2.

然而，我們看到的是，在聯鎖之後，客戶的要求是，你能得到更多的產品嗎？這就是現在第一季和第二季所填寫的內容。

And so the conversations with the customers are around, have you changed your outlook for the back half of the year and what's driving that? Is it because you're accelerating data center deployments? Is it because there is a (technical difficulty) real availability which is happening? And then how does that impact the last two quarters the way it's impacting the first two quarters? So a positive conversation for sure. And we do have a level of visibility to really see if we can increase the numbers.

因此，與客戶的對話圍繞著您是否改變了下半年的前景以及是什麼推動了這種變化？是因為您正在加速資料中心部署嗎？是因為存在（技術困難）真正的可用性嗎？那麼這對前兩季的影響如何，對後兩季的影響又是如何呢？所以肯定是一次正面的對話。我們確實有一定程度的可見性，可以真正了解我們是否可以增加數量。

So based on that, would you expect that Q2 to be up sequentially then again?

因此，基於此，您是否預計第二季會再次連續上漲？

On a revenue basis, yes,

從收入的角度來看，是的，

What's that?

那是什麼？

Yes, we would expect higher revenues in Q2 than we do in Q1.

是的，我們預計第二季的營收將高於第一季。

From CCS, okay. Okay, perfect. And then the capacity adds in Thailand and Malaysia, Rob, could you give us a ballpark in terms of the revenue production capacity in each of those or combined? Is that incremental revenue where you've -- basically new programs or new capacity versus shifting from another region?

來自CCS，好吧。好的，完美。然後泰國和馬來西亞的產能增加了，羅布，您能否給我們介紹一下這些國家或地區的收入產能的大致情況？基本上是新計劃或新產能，還是從其他地區轉移過來的增量收入？

What I can tell you, Matt, is how much square foot we're adding and that the capacity improvements are a couple of [ones] -- the Phase 1, if you will, which is coming online this quarter is about 28,000 square feet of manufacturing space. It's really a AI-ML testing facility. So we have the test farm for -- a fully automated test farm for all AI-ML products.

馬特，我可以告訴你的是，我們增加了多少平方英尺，並且容量得到了改善——如果你願意的話，第一階段將在本季度上線，面積約為 28,000 平方英尺的製造空間。它確實是一個 AI-ML 測試工具。因此，我們擁有適用於所有 AI-ML 產品的全自動測試場的測試場。

So that's coming online right about now and then Phase 2 will be the first half of 2025. And that's a combined productivity play where we're combining all our warehousing in Thailand into one facility, the save on space and drive productivity and also adding about 156,000 -- 130,000 of a plus of manufacturing space, which is going to support existing and new customers as well, largely around AI and ML. And we think those capacity expansions should take care of us through the next couple of years growth.

所以現在就上線了，第二階段將在 2025 年上半年進行。這是一場綜合生產力的遊戲，我們將泰國的所有倉儲整合到一個設施中，節省空間並提高生產力，同時還增加了約 156,000 - 130,000 多個製造空間，這將支持現有和新的製造空間客戶也是如此，主要圍繞著人工智慧和機器學習。我們認為這些產能擴張應該可以幫助我們度過未來幾年的成長。

Okay. And just lastly, Mandeep, you talked about you basically increased your cash flow guidance for the year, while keeping everything else intact. What are the reasons for that? Is that a function of the inventory reduction and working capital reduction and the cash flows from that or anything else?

好的。最後，曼迪普，您談到您基本上增加了今年的現金流指導，同時保持其他一切不變。其原因何在？這是庫存減少和營運資本減少以及由此產生的現金流還是其他因素的函數？

Yes. So we continue to be encouraged that the material environment is stabilizing and improving. We're seeing lead times right now, not necessarily at pre-pandemic levels for both passives and semis, but we are seeing them drop pretty close to that level. And they've been improving quarter to quarter. We have been unwinding inventory as a result.

是的。因此，我們對物質環境的穩定和改善持續感到鼓舞。我們現在看到的交貨時間，不一定是被動式和半主動式的大流行前水平，但我們看到它們已經非常接近這個水平。他們每季都在進步。因此，我們一直在清理庫存。

So we're pleased that we're able to reduce some of that cash. Really strong finish 2023. Under $94 million. We believe that that is the right goal as a minimum for next year on the back of increasing profitability and in an inventory environment, that we think is going to continue to improve. And so we think the goal of $200 million or more is a perfectly good level of conversion. And it's the right target at this time.

因此，我們很高興能夠減少部分現金。2023 年的成績確實很強勁。低於 9400 萬美元。我們相信，在獲利能力不斷提高和庫存環境不斷改善的背景下，這是明年的最低目標，這是正確的目標。因此，我們認為 2 億美元或更多的目標是一個非常好的轉換水準。此時此刻，這是正確的目標。

Okay. Thank you.

好的。謝謝。

Yes, thanks, Matt.

是的，謝謝，馬特。

Todd Coupland, CIBC.

托德·庫普蘭，CIBC。

Oh great. Thanks. Good morning, everyone. I want to step back from these detailed questions and just ask a question on the hyperscaler market, the data -- global data center market. What's your view on how much of the data center hyperscaler market has been upgraded to support generative AI in large language model processing needs? How far into that cycle would you think we are at this point?

哦，太棒了。謝謝。大家早安。我想從這些詳細的問題中退一步，只問一個關於超大規模市場、數據——全球資料中心市場的問題。您對資料中心超大規模市場有多少已經升級以支援大型語言模型處理需求中的生成式人工智慧有何看法？您認為我們現在已經進入這個週期多遠了？

Good morning, Todd. That's a very good question. I would say we're still in the early innings of the upgrade cycle. I mean -- and I say that by the fact that it just started about a year or so ago. And given the amount of compute which makes up about 50% of any data center that needs to come into upgraded. I think we're still in the very early innings of that upgrade cycle.

早安，陶德。這是一個非常好的問題。我想說我們仍處於升級週期的早期階段。我的意思是——我這麼說是因為它大約一年前才開始。考慮到計算量約佔所有需要升級的資料中心的 50%。我認為我們仍處於升級週期的早期階段。

And the customers in terms of the cycles to get that upgraded, little bit longer than the quarter to quarter discussions, is -- I mean it's obviously going to be demand dependent. But is that a two-year process, a five-year process? What's the mindset towards getting that upgrade completed?

就升級的周期而言，客戶的周期比季度與季度的討論要長一點，我的意思是，這顯然取決於需求。但這是一個兩年的過程，還是一個五年的過程？完成升級的心態是什麼？

My sense is it's a multi-year process. It's certainly five plus years. And again, across each of the hyperscalers that we're dealing with out each have different appetites in different phases for deployment, so that they won't necessarily all overlap at once, which for at least for Celestica, should give us many years of growth.

我的感覺是這是一個多年的過程。這肯定是五年多了。再說一次，我們正在處理的每個超大規模企業在不同的部署階段都有不同的需求，因此它們不一定會同時重疊，至少對於天弘來說，這應該會給我們帶來很多年的時間。生長。

Yes, I would add to that. So again, we support the top-five hyperscalers. But not all the top five hyperscalers spend CapEx the same way. And there's a couple in particular that sometimes are leading with the more complex technology. And then the other hyperscalers sometimes follow. What we're really encouraged about here, where we're seeing a lot of our new wins come in and our demand outlook is with some of the hyperscalers that are at the leading edge of the more complex technology.

是的，我想補充一點。因此，我們再次支持排名前五的超大規模企業。但並非所有排名前五的超大規模企業都以相同的方式支出資本支出。特別是有一些公司有時在更複雜的技術方面處於領先地位。然後其他超大規模企業有時也會跟進。我們真正感到鼓舞的是，我們看到了許多新的勝利，我們的需求前景是一些處於更複雜技術領先地位的超大規模企業。

Hence, we're seeing the demand strengthen in AI and compute, and we're seeing the wins come in on the 800G switches, some of which are starting to be shipped in '24. And then a lot more of it will be shipped in 2025. And as we see some of the other hyperscalers that follow behind that, it gives demands -- it gives us an idea of the fact that this does have an opportunity to be a multiyear opportunity for us.

因此，我們看到人工智慧和運算的需求增強，我們看到 800G 交換器取得了勝利，其中一些交換器將於 2024 年開始出貨。然後更多的產品將在 2025 年發貨。當我們看到其他一些超大規模企業緊隨其後時，它提出了要求——它讓我們意識到，這確實有機會成為我們的多年機會。

And to Rob's point, we're really in the early stages right now of the AI-ML CapEx investment cycle. Of course, nobody has visibility 10 years out on what things are going to look like. But we are seeing demand signals at least for the next two or three years.

對 Rob 來說，我們目前確實處於 AI-ML 資本支出投資週期的早期階段。當然，沒有人能預見 10 年後事情會是什麼樣子。但我們至少在未來兩三年內看到了需求訊號。

And I will just close with the adoption of some custom silicon is going to drive computer programs and that's going to accelerate in the future. And then investments in AI is also going to drive advanced networking, and that's going to be a driver in the future. And then also with our enterprise customers, we expect to see the Internet traffic is going to drive improvements in data center interconnect as well. So this whole upgrade cycle, I think, has a long life to it.

最後，我將介紹一些定制晶片的採用將驅動計算機程序，並且這將在未來加速。然後，對人工智慧的投資也將推動先進的網路發展，這將成為未來的驅動力。對於我們的企業客戶，我們預期網路流量也將推動資料中心互連的改進。因此，我認為整個升級週期的壽命很長。

Appreciate the color. Thanks a lot.

欣賞顏色。多謝。

Thanks.

謝謝。

Thank you. There are no further questions at this time. I'd now like to turn the call back over to Mr. Rob Mionis for final closing comments.

謝謝。目前沒有其他問題。現在我想將電話轉回給 Rob Mionis 先生以徵求最後的總結意見。

Thank you, I'm pleased to see that we posted another solid quarter and the momentum has carried through into the first quarter of 2024 and all through 2024. I'm also pleased by our continued strong execution and encouraged with our strong market position in growing markets. Thank you again for joining today's call, and I look forward to updating you next quarter.

謝謝，我很高興看到我們又發布了一個穩健的季度業績，並且這種勢頭一直延續到 2024 年第一季以及整個 2024 年。我也對我們持續強勁的執行力感到高興，並對我們在不斷增長的市場中的強大市場地位感到鼓舞。再次感謝您參加今天的電話會議，我期待下個季度向您通報最新情況。

Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.

謝謝您，先生。女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。祝你有美好的一天。