<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>a2115585zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1 MDA 10 PAGES
<TEXT>
<Page>

                                                                    Exhibit 99.1

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                               SECOND QUARTER 2003


         THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE 2002 ANNUAL
CONSOLIDATED FINANCIAL STATEMENTS AND THE JUNE 30, 2003 INTERIM CONSOLIDATED
FINANCIAL STATEMENTS. ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S. DOLLARS.

         CERTAIN STATEMENTS CONTAINED IN THE FOLLOWING MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, INCLUDING,
WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS BELIEVES, ANTICIPATES,
ESTIMATES, EXPECTS, AND WORDS OF SIMILAR IMPORT, CONSTITUTE FORWARD-LOOKING
STATEMENTS. FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE
AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. THESE
RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO: THE CHALLENGES OF
EFFECTIVELY MANAGING OUR OPERATIONS DURING UNCERTAIN ECONOMIC CONDITIONS; THE
CHALLENGE OF RESPONDING TO LOWER-THAN-EXPECTED CUSTOMER DEMAND; THE EFFECTS OF
PRICE COMPETITION AND OTHER BUSINESS AND COMPETITIVE FACTORS GENERALLY AFFECTING
THE EMS INDUSTRY; OUR DEPENDENCE ON THE INFORMATION TECHNOLOGY AND
COMMUNICATIONS INDUSTRIES; OUR DEPENDENCE ON A LIMITED NUMBER OF CUSTOMERS AND
ON INDUSTRIES AFFECTED BY RAPID TECHNOLOGICAL CHANGE; COMPONENT CONSTRAINTS;
VARIABILITY OF OPERATING RESULTS AMONG PERIODS; AND THE ABILITY TO MANAGE OUR
RESTRUCTURING AND THE SHIFT OF PRODUCTION TO LOWER COST GEOGRAPHIES. THESE AND
OTHER RISKS AND UNCERTAINTIES AND FACTORS ARE DISCUSSED IN THE COMPANY'S FILINGS
WITH THE CANADIAN SECURITIES COMMISSIONS AND THE U.S. SECURITIES AND EXCHANGE
COMMISSION, INCLUDING THE COMPANY'S ANNUAL REPORT ON FORM 20-F AND SUBSEQUENT
REPORTS ON FORM 6-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

         WE DISCLAIM ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.

OVERVIEW

         Celestica is a world leader in providing electronics manufacturing
services to OEMs in the information technology, communications and other
industries. Celestica provides a wide variety of products and services to its
customers, including the high-volume manufacture of complex printed circuit
board assemblies and the full system assembly of final products. In addition,
the Company is a leading-edge provider of design, repair and engineering
services, supply chain management and power products. Celestica operates
facilities in the Americas, Europe and Asia.

         During the past two years, the information technology and
communications end markets have experienced continuing weakness. Celestica's
revenue for 2002 was $8.3 billion, down 17% from $10.0 billion for 2001. The
reduced demand for OEM's products and services contributed to the decrease in
the Company's revenue and margins for 2002 and for the first half of 2003.

         Historically, acquisitions have contributed significantly to the
Company's growth, with 2001 being the most active year for acquisitions, in
terms of the number of acquisitions closed and the total purchase price. Growth
from acquisitions in 2002 and 2003, to date, was minimal. Celestica continues to
evaluate acquisition opportunities and anticipates that acquisitions will
continue to contribute to its future growth.

         In 2001, the Company announced its first restructuring plan in response
to the weakened end markets. The continued downturn into 2002 resulted in the
Company announcing its second restructuring plan. In January 2003, the Company
announced a further restructuring plan, which it expects to complete by the end
of 2003. The restructurings are focused on consolidating facilities and
increasing capacity in lower cost geographies. The Company expects that it will
have a better-balanced manufacturing footprint when all of the planned
restructuring actions are completed.

         In the fourth quarter of 2002, Celestica recorded impairment losses, in
connection with its annual impairment tests of goodwill and long-lived assets.
Future impairment tests may result in additional impairment charges.


<Page>
                                       2


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Celestica prepares its financial statements in accordance with
generally accepted accounting principles (GAAP) in Canada with a reconciliation
to United States GAAP, as disclosed in note 22 to the 2002 Annual Consolidated
Financial Statements.

         The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenue and expenses during the reporting period. Significant accounting
policies and methods used in preparation of the financial statements are
described in note 2 to the 2002 Annual Consolidated Financial Statements and
updated in note 2 to the June 30, 2003 Interim Consolidated Financial
Statements. The Company evaluates its estimates and assumptions on a regular
basis, based on historical experience and other relevant factors. Significant
estimates are used in determining, but not limited to, the allowance for
doubtful accounts, inventory valuation, income tax valuation allowances, the
fair value of reporting units for purposes of goodwill impairment tests, the
useful lives and valuation of intangible assets, and restructuring charges.
Actual results could differ materially from those estimates and assumptions.

REVENUE RECOGNITION:

         Celestica derives most of its revenue from OEM customers. The
contractual agreements with its key customers generally provide a framework for
its overall relationship with the customers. Celestica recognizes product
revenue upon shipment to the customer as performance has occurred, all customer
specified acceptance criteria have been tested and met, and the earnings process
is considered complete. Actual production volumes are based on purchase orders
for the delivery of products. These orders typically do not commit to firm
production schedules for more than 30 to 90 days in advance. Celestica minimizes
its risk relative to its inventory by ordering materials and components only to
the extent necessary to satisfy existing customer orders. Celestica is largely
protected from the risk of inventory cost fluctuations as these costs are
generally passed through to customers.

 ALLOWANCE FOR DOUBTFUL ACCOUNTS:

         Celestica records an allowance for doubtful accounts related to
 accounts receivable that are considered to be impaired. The allowance is based
 on the Company's knowledge of the financial condition of its customers, the
 aging of the receivables, current business environment, customer and industry
 concentrations, and historical experience. A change to these factors could
 impact the estimated allowance and the provision for bad debts recorded in
 selling, general and administrative expenses.

 INVENTORY VALUATION:

         Celestica values its inventory on a first-in, first-out basis at the
 lower of cost and replacement cost for production parts, and at the lower of
 cost and net realizable value for work in progress and finished goods.
 Celestica regularly adjusts its inventory valuation based on shrinkage and
 management's estimates of net realizable value, taking into consideration
 factors such as inventory aging, future demand for the inventory, and the
 nature of the contractual agreements with customers and suppliers, including
 the ability to return inventory to them. A change to these assumptions could
 impact the valuation of inventory and have a resulting impact on margins.

 INCOME TAX VALUATION ALLOWANCE:

         Celestica records a valuation allowance against deferred income tax
 assets when management believes it is more likely than not that some portion or
 all of the deferred income tax assets will not be realized. Management
 considers factors such as the reversal of deferred income tax liabilities,
 projected future taxable income, the character of the income tax asset and tax
 planning strategies. A change to these factors could impact the estimated
 valuation allowance and income tax expense.



<Page>
                                       3



GOODWILL:

         Celestica performs its annual goodwill impairment tests in the fourth
 quarter of each year, and more frequently if events or changes in circumstances
 indicate that an impairment loss may have been incurred. Impairment is tested
 at the reporting unit level by comparing the reporting unit's carrying amount
 to its fair value. The fair values of the reporting units are estimated using a
 combination of a market approach and discounted cash flows. The process of
 determining fair values is subjective and requires management to exercise
 judgment in making assumptions about future results, including revenue and cash
 flow projections at the reporting unit level, and discount rates. Celestica
 recorded an impairment loss in the fourth quarter of 2002. Future goodwill
 impairment tests may result in further impairment charges.

 INTANGIBLE ASSETS:

         Celestica performs its annual impairment tests on long-lived assets in
 the fourth quarter of each year, and more frequently if events or changes in
 circumstances indicate that an impairment loss may have been incurred.
 Celestica estimates the useful lives of intangible assets based on the nature
 of the asset, historical experience and the terms of any related supply
 contracts. The valuation of intangible assets is based on the amount of future
 net cash flows these assets are estimated to generate. Revenue and expense
 projections are based on management's estimates, including estimates of current
 and future industry conditions. A significant change to these assumptions could
 impact the estimated useful lives or valuation of intangible assets resulting
 in a change to amortization expense and impairment charges.

 RESTRUCTURING CHARGES:

         Celestica has recorded restructuring charges relating to facility
 consolidations and workforce reductions. The restructuring charges include
 employee severance and benefit costs, costs related to leased facilities that
 will be abandoned or subleased, owned facilities which are no longer used and
 will be held for disposition, cost of leased equipment that has or will be
 abandoned, impairment of owned equipment that will be held for disposition, and
 impairment of related intangible assets, primarily intellectual property. The
 recognition of these charges requires management to make certain judgments and
 estimates regarding the nature, timing and amount associated with these plans.
 The estimates of future liability may change, requiring additional
 restructuring charges or a reduction of the liabilities already recorded. At
 the end of each reporting period, the Company evaluates the appropriateness of
 the remaining accrued balances.

         Costs associated with restructuring activities initiated prior to
 January 1, 2003 were recorded in compliance with FASB's Emerging Issues Task
 Force No. 94-3. Costs associated with restructuring activities initiated on or
 after January 1, 2003 are recorded in accordance with CICA Emerging Issues
 Committee Abstracts EIC-134, "Accounting for Severance and Termination
 Benefits," and EIC-135, "Accounting for Costs Associated with Exit and Disposal
 Activities."

ACQUISITION HISTORY

         A significant portion of Celestica's growth in prior years was
generated by strengthening its customer relationships and increasing the breadth
of its service offerings through asset and business acquisitions. The Company
focused on investing strategically in acquisitions that better positioned the
Company for future outsourcing opportunities. Celestica's most active year for
acquisitions was 2001. The historical pace of Celestica's acquisitions did not
continue in 2002 or in 2003, to date, and may not continue in the future.

         As a result of the continued downturn in the economy, some of the sites
acquired in prior years have been impacted by the Company's restructuring
actions. Supply agreements entered into in connection with certain acquisitions
were also affected by order cancellations and reschedulings as base-business
volumes have decreased. See discussion below in "Results of Operations."

2002 ASSET ACQUISITIONS:

         In March 2002, the Company acquired certain assets located in Miyagi
and Yamanashi, Japan from NEC Corporation and signed a five-year supply
agreement. In August 2002, the Company acquired certain assets from


<Page>
                                       4


Corvis Corporation in the United States and signed a multi-year supply
agreement. The aggregate purchase price for these acquisitions in 2002 of $111.0
million was financed with cash and allocated to the net assets acquired, based
on their relative fair values at the date of acquisition.

         Celestica may at any time be engaged in ongoing discussions with
respect to several possible acquisitions of widely-varying sizes, including
small single facility acquisitions, significant multiple facility acquisitions
and corporate acquisitions. Celestica has identified several possible
acquisitions that would enhance its global operations, increase its penetration
in several industries and establish strategic relationships with new customers.
There can be no assurance that any of these discussions will result in a
definitive purchase agreement and, if they do, what the terms or timing of any
agreement would be. Celestica expects to continue any current discussions and
actively pursue other acquisition opportunities.

RESULTS OF OPERATIONS

         Celestica's annual and quarterly operating results vary from period to
period as a result of the level and timing of customer orders, fluctuations in
materials and other costs and the relative mix of value-add products and
services. The level and timing of customers' orders will vary due to customers'
attempts to balance their inventory, changes in their manufacturing strategies,
variation in demand for their products and general economic conditions.
Celestica's annual and quarterly operating results are also affected by capacity
utilization, geographic manufacturing mix and other factors, including price
competition, manufacturing effectiveness and efficiency, the degree of
automation used in the assembly process, the ability to manage labour, inventory
and capital assets effectively, the timing of expenditures in anticipation of
forecasted sales levels, the timing of acquisitions and related integration
costs, customer product delivery requirements, shortages of components or
labour, the costs of transferring and ramping up programs, and other factors.
Weak end-market conditions began to emerge in early to mid-2001 and have
continued to weaken for the communications and information technology
industries. This has resulted in customers rescheduling or canceling orders
which has negatively impacted Celestica's results of operations.

         The table below sets forth certain operating data expressed as a
percentage of revenue for the periods indicated:

<Table>
<Caption>
                                                  THREE MONTHS ENDED      SIX MONTHS ENDED
                                                        JUNE 30                JUNE 30
                                                    2002       2003        2002        2003
                                                 ---------  ---------   ---------   -------
<S>                                                 <C>        <C>         <C>         <C>
Revenue.....................................        100.0%     100.0%      100.0%      100.0%
Cost of sales...............................         92.8       96.9        92.9        96.1
                                                    -----      -----       -----       -----
Gross profit................................          7.2        3.1         7.1         3.9
Selling, general and administrative expenses          3.4        3.7         3.4         3.8
Research and development costs..............          0.2        0.3         0.2         0.2
Amortization of intangible assets...........          1.0        0.8         0.9         0.8
Integration costs related to acquisitions...          0.4         -          0.3          -
Other charges...............................           -        1.4           -          0.6
                                                    -----      -----       -----       -----
Operating income (loss).....................          2.2       (3.1)        2.3        (1.5)
Interest expense (income), net..............          0.0       (0.1)        0.1        (0.2)
                                                    -----      ------      -----       ------
Earnings (loss) before income taxes.........          2.2       (3.0)        2.2        (1.3)
Income taxes................................          0.4       (0.5)        0.4        (0.2)
                                                    -----      ------      -----       ------
Net earnings (loss).........................          1.8%      (2.5)%       1.8%       (1.1)%
                                                    ======     =======     ======      =======

</Table>

REVENUE

         Revenue decreased 29%, to $1.6 billion for the three months ended June
30, 2003 from $2.2 billion for the same period in 2002, primarily due to a
reduction in volumes as a result of the prolonged weakened end-market
conditions. Excess capacity in the EMS industry continued to exert pressures on
pricing for components and services, also reducing revenue. Revenue for the six
months ended June 30, 2003 decreased 28%, to $3.2 billion from $4.4 billion for
the same period in 2002. The visibility of end-market conditions remains
limited.

         Celestica manages its operations on a geographic basis. The three
reporting segments are the Americas, Europe and Asia. Revenue from the Americas
operations was $0.8 billion for the three months ended June 30, 2003, a decrease
of 40% from the same period in 2002, and decreased 42% to $1.6 billion for the
six months ended June 30, 2003 compared to the same period in 2002. Revenue from
European operations was $0.3 billion for the three months ended June 30, 2003, a
decrease of 28% from the same period in 2002, and decreased 28% to $0.7 billion
for the six months ended June 30, 2003 compared to the same period in 2002. The
Americas and European operations


<Page>
                                       5


have been hardest hit by customer cancellations and order delays because of the
downturn in end-market demand for their products. The Company has and continues
to execute its plan to reduce its manufacturing capacity in these geographies by
downsizing and/or closing facilities. In addition, the customers' continued
demands for significantly lower product manufacturing costs has resulted in the
transfer of programs from higher cost geographies to lower cost geographies,
further reducing revenue in these higher cost geographies. Revenue from Asian
operations was $0.5 billion for the three months ended June 30, 2003, flat
compared to the same period in 2002, and increased 14% to $1.1 billion for the
six months ended June 30, 2003 compared to the same period in 2002. End market
softening and pricing pressures have also impacted the Asian operations. For the
six month period comparison, the Asian operations benefited from the
flow-through of the acquisition in Japan, which closed March 31, 2002.

         Sequentially, revenue increased 1% compared to the first quarter of
2003.

         The following represents the end-market industries as a percentage of
revenue for the indicated periods:

<Table>
<Caption>
                                            THREE MONTHS ENDED    THREE MONTHS ENDED
                                              JUNE 30, 2003         MARCH 31, 2003
                                            -------------------   -------------------
<S>                                                <C>                   <C>
         Enterprise communications.........        26%                   24%
         Telecommunications................        22%                   23%
         Servers...........................        22%                   22%
         Storage...........................        11%                   14%
         Other.............................        10%                    9%
         Workstations and PCs..............         9%                    8%
</Table>

         In the first quarter of 2003, the Company separated its Communications
end-market industry into Enterprise communications and Telecommunications. In
addition, Storage and Other were separated. The 2002 comparatives have not been
adjusted to reflect the new end-markets. The comparatives for the three months
ended June 30, 2002 are as follows: Communications - 46%; Servers - 27%; Storage
and other - 20%; and Workstations and PCs - 7%.

         The following customers represented more than 10% of total revenue for
each of the indicated periods:

<Table>
<Caption>
                                            THREE MONTHS ENDED     SIX MONTHS ENDED
                                                 JUNE 30               JUNE 30
                                            -------------------   -------------------
                                              2002      2003        2002      2003
                                              ----      ----        ----      ----
         <S>                                  <C>       <C>         <C>       <C>
         Sun Microsystems................        o         o           o         o
         IBM.............................        o         o           o         o
         Lucent Technologies ............        o         o           o         o
         Cisco Systems...................                  o
</Table>

         Celestica's top ten customers represented in the aggregate 77%, of
total revenue for the three and six months ended June 30, 2003, compared to 86%
and 87%, respectively, for the same periods in 2002. There has been a steady
decline in revenue from the top 10 customers over the past year, as they have
been hardest hit by the broad-based reductions in corporate spending for
information technology and communications infrastructure products. At the same
time, the Company has been focused on diversifying its customer base by adding
new customers in areas outside of the traditional communications and information
technology end markets, such as military and aerospace, automotive, industrial,
consumer and medical.

         The Company is dependent upon continued revenue from its top customers.
There can be no assurance that revenue from these or any other customers will
not decrease in absolute terms or as a percentage of total revenue either
individually or as a group. Any material decrease in revenue from these or other
customers could have a material adverse effect on the Company's results of
operations. See notes 17 (concentration of risk) and 19 to the 2002 Annual
Consolidated Financial Statements.

GROSS PROFIT

         Gross profit was $48.8 million for the three months ended June 30,
2003, a decrease of 70% from the same period in 2002. Gross margin decreased to
3.1% for the three months ended June 30, 2003 from 7.2% for the same period in
2002. Gross profit decreased 60% to $124.5 million for the six months ended June
30, 2003 compared to the same period in 2002. Gross margin decreased to 3.9% for
the six months ended June 30, 2003 from 7.1% for the same period in 2002. The
decrease in margins was due to the significant reduction in business volumes and
corresponding low utilization rates, industry pricing pressures, a change in the
mix of products manufactured, costs


<Page>
                                       6


of ramping new customer programs and costs of transferring programs to other
geographies. This decrease was offset in part by the benefits from the Company's
restructuring programs.

         The European operations continue to be the most adversely affected by
lower utilization levels and higher fixed costs. Margins were impacted by volume
reductions and pricing pressures which tended to impact disproportionately,
their higher value-add products. Most of the planned restructuring actions for
the European operations have now been announced. The Company expects to realize
the benefits throughout the balance of the year. The Americas operations have
been affected by significant volume reductions, a change in the mix of products
manufactured, and by pricing pressures. The Asian operations have been affected
by a change in the mix of products manufactured, program ramping costs, and
overall pricing pressures.

         Sequentially, gross margin decreased to 3.1% from 4.8% for the first
quarter of 2003. The decrease reflects a change in the mix of products
manufactured, continued pricing pressures, higher costs due to ramping of new
customer programs and higher program transfer costs.

         For the foreseeable future, the Company's gross margin is expected to
be impacted by product mix, production efficiencies, utilization of
manufacturing capacity, geographic manufacturing mix, start-up and ramp-up
activities, new product introductions, pricing within the electronics industry,
cost structures at individual sites, and other factors. Over time, margins at
individual sites and for the Company as a whole are expected to fluctuate. Also,
the availability of labour and raw materials, which are subject to lead time and
other constraints, could possibly limit the Company's revenue growth.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative (SG&A) expenses decreased 20%,
to $59.9 million (3.7% of revenue) for the three months ended June 30, 2003
from $75.0 million (3.4% of revenue) for the same period in 2002. SG&A
expenses decreased 19% for the six months ended June 30, 2003 to $119.6
million (3.8% of revenue) from $147.2 million (3.4% of revenue) for the same
period in 2002. SG&A as a percentage of revenue increased as certain elements
of expenses were fixed over this period. The decrease in SG&A, on an absolute
basis, reflects the benefits from the Company's restructuring programs and a
reduction in spending.

         Sequentially, SG&A expenses remained essentially flat from the first
quarter of 2003.

RESEARCH AND DEVELOPMENT COSTS

         Research and development costs were $4.4 million (0.3% of revenue) for
the three months ended June 30, 2003 compared to $5.0 million (0.2% of revenue)
for the same period in 2002. R&D costs for the six months ended June 30, 2003
were $8.9 million, compared to $9.5 million for the same period of 2002.

AMORTIZATION OF INTANGIBLE ASSETS

         Amortization of intangible assets decreased to $12.1 million for the
three months ended June 30, 2003 from $21.7 million for the same period in 2002.
Amortization of intangible assets decreased to $24.5 million for the six months
ended June 30, 2003 from $43.7 million for the same period in 2002. In the
fourth quarter of 2002, the Company recorded an impairment charge to write down
its intangible assets. As a result of the write down, the amortization expense
has decreased. The decrease in expense is partially offset by amortization of
intangible assets arising from the 2002 acquisitions.

INTEGRATION COSTS RELATED TO ACQUISITIONS

         Integration costs related to acquisitions represent one-time costs
incurred within 12 months of the acquisition date, such as the costs of
implementing compatible information technology systems in newly acquired
operations, establishing new processes related to marketing and distribution
processes to accommodate new customers, and salaries of personnel directly
involved with integration activities. All of the integration costs incurred
related to newly acquired facilities, and not to the Company's existing
operations.


<Page>
                                       7


         No integration costs were incurred for the three and six months ended
June 30, 2003 compared to $10.2 million and $14.1 million, respectively, for the
same periods in 2002. Integration costs vary from period to period due to the
timing of acquisitions and related integration activities.

OTHER CHARGES

<Table>
<Caption>
                                                                     THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                           JUNE 30                    JUNE 30
                                                                -------------------------- ------------------------
                                                                    2002          2003         2002          2003
                                                                ------------  ------------ ------------  ----------
                                                                      (in millions)              (in millions)
<S>                                                                <C>           <C>          <C>           <C>
2001 and 2002 restructuring adjustments.....................       $   --        $  16.3      $   --        $  16.3
2003 restructuring..........................................           --            5.3          --            5.3
Gain on sale of surplus land................................           --             --          --           (1.6)
                                                                   ------        -------      ------        -------
                                                                   $   --        $  21.6      $   --        $  20.0
                                                                   ======        =======      ======        =======
</Table>

         Further details of the other charges are included in note 13 to the
2002 Annual Consolidated Financial Statements and note 5 to the June 30, 2003
Interim Consolidated Financial Statements.

         As of June 30, 2003, the Company has recorded charges in connection
with three separate restructuring plans in response to the economic climate.
These actions, which included reducing the workforce, consolidating facilities
and changing the number and location of production facilities, were largely
intended to align the Company's capacity and infrastructure to anticipated
customer demand, as well as to rationalize its footprint worldwide. The Company
recorded charges of $237.0 million for its 2001 restructuring and $383.5 million
for its 2002 restructuring, with minor adjustments as the Company executed its
plan. See note 5 to the June 30, 2003 Interim Consolidated Financial Statements.
The Company estimates the cost of the 2003 restructuring to be between $50.0
million to $70.0 million, to be recorded by the end of 2003, of which 80% is
expected to be cash costs. Cash outlays are funded from cash on hand.

         The Company has and expects to continue to benefit from the
restructuring measures taken in prior years through reduced operating costs. The
Company has completed the major components of the 2001 restructuring plan,
except for certain long-term lease and other contractual obligations. The
Company expects to complete the 2002 restructuring actions by the end of 2003,
except for certain long-term lease and other contractual obligations.

INTEREST INCOME, NET

         Interest income for the three and six months ended June 30, 2003
decreased to $2.9 million and $7.5 million, respectively, compared to $4.1
million and $7.8 million, respectively, for the same period in 2002. Although
interest was earned on higher cash balances, the interest rates were lower than
they were a year ago.

         Interest expense decreased to $1.4 million and $2.7 million,
respectively, for the three and six months ended June 30, 2003 compared to $5.5
million and $10.9 million, respectively, for the same period in 2002, primarily
due to the redemption of the Senior Subordinated Notes in August 2002. Interest
expense is expected to decrease for 2003 as a result of the full-year effect of
the redemption.

INCOME TAXES

         The income tax recovery for the three months ended June 30, 2003 was
$8.1 million compared to income tax expense of $8.3 million for the same period
in 2002, both periods reflecting an effective tax rate of 17%. Income tax
recovery for the six months ended June 30, 2003 was $7.5 million, compared to a
tax expense of $16.4 million for the same period in 2002, both periods
reflecting an effective tax rate of 17%.


         The Company's effective tax rate is the result of the mix and volume of
business in lower tax jurisdictions within Europe and Asia. These lower tax
rates include tax holidays and tax incentives that Celestica has negotiated with
the respective tax authorities which expire between 2004 and 2012. Due to the
level of operating losses in Europe, the European restructuring charges in the
second half of the year, and the time period in which losses may be used under
European tax laws, the Company expects the effective tax rate for the second
half of 2003 to deviate from 17%.

<Page>
                                       8


         The net deferred income tax asset as at June 30, 2003 of $293.2 million
($280.1 million as at March 31, 2003), arises from available income tax losses
and future income tax deductions. The Company's ability to use these income tax
losses and future income tax deductions is dependent upon the operations of the
Company in the tax jurisdictions in which such losses or deductions arose.
Management records a valuation allowance against deferred income tax assets when
management believes it is more likely than not that some portion or all of the
deferred income tax assets will not be realized. Based on the reversal of
deferred income tax liabilities, projected future taxable income, the character
of the income tax asset and tax planning strategies, management has determined
that a valuation allowance of $96.4 million is required in respect of its
deferred income tax assets as at June 30, 2003 ($85.4 million as at March 31,
2003). In order to fully utilize the net deferred income tax assets of $293.2
million, the Company will need to generate future taxable income of
approximately $835.2 million. Based on the Company's current projection of
taxable income for the periods in which the deferred income tax assets are
deductible, it is more likely than not that the Company will realize the benefit
of the net deferred income tax assets as at June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

         For the three months ended June 30, 2003, operating activities utilized
$100.2 million in cash, primarily for inventory and accounts payable and accrued
liabilities. For the six months ended June 30, 2003, operating activities
utilized $14.8 million in cash. In 2002, cash was generated from earnings and
lower working capital requirements.

         Investing activities for the three and six months ended June 30, 2003
included capital expenditures of $29.4 million and $47.5 million, respectively.
Investing activities for the six months ended June 30, 2002 included capital
expenditures of $75.0 million and asset acquisitions of $102.9 million, offset
in part by proceeds from the sale-leaseback of machinery and equipment.

         The Company continued to reduce the leverage on its balance sheet by
repurchasing Liquid Yield Option(TM) Notes (LYONs) in the open market. For
the three months ended June 30, 2003, LYONs with a principal amount at
maturity of $116.9 million, were repurchased at an average price of $519.30
per LYON, for a total of $60.7 million. A loss of $2.1 million, net of taxes
of $0.9 million, was recorded. See further details in note 10 to the 2002
Annual Consolidated Financial Statements and note 3 to the June 30, 2003
Interim Consolidated Financial Statements. The Company may, from time to
time, purchase additional LYONs in the open market. Through June 30, 2003,
the Company has repurchased LYONs, with a total principal amount at maturity
of $493.7 million, for cash of $237.1 million. At June 30, 2003, pursuant to
the pre-authorization by the board of directors, the Company can spend up to
an additional $112.9 million to repurchase LYONs. The amount and timing of
future purchases cannot be determined at this time.

         In April 2003, Celestica amended its Normal Course Issuer Bid (NCIB)
to repurchase up to 10% of the public float, or 18.6 million subordinate
voting shares, for cancellation, over a period from August 1, 2002 to July
31, 2003. Under this program, shares are purchased at the market price at the
time of purchase. The number of shares to be repurchased during any 30-day
period may not exceed 2% of the outstanding subordinate voting shares. A copy
of the Notice relating to the NCIB may be obtained from Celestica, without
charge, by contacting the Company's Investor Relations Department at
clsir@celestica.com. For the three months ended June 30, 2003, the Company
-------------------
repurchased 9.2 million subordinate voting shares at a weighted average price
of $13.09 per share. All of these transactions were funded with cash on hand.
A total of 17.9 million shares have been repurchased to June 30, 2003.

         In July 2003, the Company announced that it intends to launch a new
NCIB upon expiry of its existing NCIB, to repurchase, at its discretion during
the 12 months ending July 31, 2004, up to an additional 10% of its public float.
This plan is subject to the approval of the Toronto Stock Exchange.

CAPITAL RESOURCES

         At June 30, 2003, the Company had two credit facilities: a $500.0
million four-year revolving term credit facility and a $350.0 million revolving
term credit facility which expire in 2005 and 2004, respectively. The credit
facilities permit Celestica and certain designated subsidiaries to borrow funds
directly for general corporate purposes (including acquisitions) at floating
rates. Under the credit facilities: Celestica is required to maintain certain
financial ratios; its ability and that of certain of its subsidiaries to grant
security interests, dispose of assets, change


<Page>
                                       9


the nature of its business or enter into business combinations, is restricted;
and, a change in control is an event of default. No borrowings were outstanding
under the revolving credit facilities at June 30, 2003.

         Celestica and certain subsidiaries have additional bank facilities
which total $55.1 million that are available for operating requirements.

         Celestica believes that cash flow from operating activities, together
with cash on hand and borrowings available under its credit facilities, will be
sufficient to fund currently anticipated working capital, planned capital
spending and debt service requirements for the next 12 months. The Company
expects capital spending for 2003 to be in the range of 1.0% to 2.0% of revenue.
At June 30, 2003, Celestica had committed $22.9 million in capital expenditures.
In addition, Celestica regularly reviews acquisition opportunities and,
therefore, may require additional debt or equity financing.

         The Company has an arrangement to sell up to $400.0 million in accounts
receivable under a revolving facility which is available until September 2004.
As of June 30, 2003, the Company generated cash from the sale of $320.3 million
in accounts receivable. The terms of the arrangement provide that the purchaser
may elect not to purchase receivables if Celestica's credit rating falls below a
specified threshold. Celestica's credit rating is significantly above that
threshold.

         Celestica prices the majority of its products in U.S. dollars, and the
majority of its material costs are also denominated in U.S. dollars. However, a
significant portion of its non-material costs (including payroll, facilities
costs, and costs of locally sourced supplies and inventory) are denominated in
various currencies. As a result, Celestica may experience transaction and
translation gains or losses because of currency fluctuations. The Company has an
exchange risk management policy in place to control its hedging programs and
does not enter into speculative trades. At June 30, 2003, Celestica had forward
foreign exchange contracts covering various currencies in an aggregate notional
amount of $666.7 million with expiry dates up to December 2004, except for one
contract for $10.6 million that expires in January 2006. The fair value of these
contracts at June 30, 2003, was an unrealized gain of $51.2 million. Celestica's
current hedging activity is designed to reduce the variability of its foreign
currency costs and generally involves entering into contracts to trade U.S.
dollars for Canadian dollars, British pounds sterling, Mexican pesos, euros,
Thai baht, Singapore dollars, Brazilian reais, Japanese yen and Czech koruna at
future dates. In general, these contracts extend for periods of less than 19
months. Celestica may, from time to time, enter into additional hedging
transactions to minimize its exposure to foreign currency and interest rate
risks. There can be no assurance that such hedging transactions, if entered
into, will be successful. See note 2(n) to the 2002 Annual Consolidated
Financial Statements.

         As at June 30, 2003, the Company has convertible instruments, the
LYONs, with an outstanding principal amount at maturity of $1,319.9 million
payable August 1, 2020. Holders of the instruments have the option to require
Celestica to repurchase their LYONs on August 2, 2005, at a price of $572.82 per
LYON, or a total of $756.1 million. The Company may elect to settle its
repurchase obligation in cash or shares, or any combination thereof. See further
details in note 10 to the 2002 Annual Consolidated Financial Statements.

CONTROLS AND PROCEDURES

         The Chief Executive Officer and Chief Financial Officer have evaluated
the Company's disclosure controls and procedures as of the end of the quarter,
and have concluded that such controls and procedures are effective.

         There were no significant changes in the Company's internal controls or
in other factors that could significantly affect such controls subsequent to the
date of their evaluation.

RECENT ACCOUNTING DEVELOPMENTS

IMPAIRMENT OF LONG-LIVED ASSETS AND COSTS ASSOCIATED WITH EXIT OR DISPOSAL
ACTIVITIES:
         In August 2001, FASB approved SFAS No. 143, "Accounting for Asset
Retirement Obligations" and in October 2001, FASB issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." In December
2002, the CICA issued standards similar to SFAS No. 144. See notes 22(k) and
2(r) to the 2002 Annual Consolidated Financial Statements. In addition, in July
2002, FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities," effective for exit or disposal activities that are
initiated after


<Page>
                                       10


December 31, 2002. See note 22(k) to the 2002 Annual Consolidated Financial
Statements. In June 2003, the CICA issued standards similar to SFAS No. 146. The
Company has adopted these standards effective January 1, 2003. See note 2 to the
June 30, 2003 Interim Consolidated Financial Statements.

GUARANTEES:
         In November 2002, FASB issued FIN 45, "Guarantor's Accounting and
Disclosure Requirements." In December 2002, the CICA approved AcG-14 which
harmonizes Canadian GAAP to the disclosure requirements of FIN 45. See notes
22(k) and 2(r) to the 2002 Annual Consolidated Financial Statements.

CONSOLIDATION OF VARIABLE INTEREST ENTITIES:
         In January 2003, FASB issued FIN 46, "Consolidation of Variable
Interest Entities." See note 22(k) to the 2002 Annual Consolidated Financial
Statements. In June 2003, the CICA issued standards similar to FIN 45, effective
for 2004.


</TEXT>
</DOCUMENT>
