Flex ir presentation mar 2016 final
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Transcript of Flex ir presentation mar 2016 final
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Richer Business MixStrategically Positioned
To WinWhy Flex?
Flex: Ready for the
Future
Strategic M&A /
Financial
Update
Why Invest in Flex?
Continually Evolving Our
Portfolio
Growing Our Operating
Income & Margin
Expansion
Continued Discipline in
Execution
Fundamentally Structured
for Value Creation & Free
Cash Flow Generation
3-4
5
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8-11
The World is Changing...
Flex is Ready
Our Powerful Solution for
Engagement & Higher
Margin
Global Scale and Reach
Our Evolving Value
Proposition Forms an
Expanding TAM
An Ecosystem For The
Intelligence Age
Elementum
12-13
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15
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Increasing our Visibility
into Strategies &
Innovations
Strategic Scope:
Purposefully Positioned
Worldwide
Strong Strategic
Relationships &
Revolutionary
Partnerships
Innovation from Sketch-
to-Scale
Ready for Mega Trends
In Every Business Group
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22-23
24-28
29-35
Structured to Deliver
Earnings Growth
Consumer Technology
Group (CTG)
Integrated Network
Solutions (INS)
Industrial & Emerging
Industries (IEI)
High Reliability Solutions
(HRS)
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38-41
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50-53
Selective M&A
Transactions
NEXTracker
MCi
Wink
Farm Design
Latest Financial Update
IR Contact Info
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60-64
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813757
684639
591 563 551
1-YrFY15
3-YrFY13-15
5-YrFY11-15
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30years
15years
10years
0years
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Connected
Living Digital Health Smart EnergyConnected
Transportation
Mobility /
Cloud
Smart
AutomationWearables
Biometric
smart clothing
Multi-feature
wearable enabling
commerce
3D augmented
interactive reality
platform
Wearable fitness
tracking
Shared, interactive
shopping list
3D display
technology for
personal use
Mood enhancing /
altering wearable
Women's health
device
Brain sensing
headband
Stretchable
biometric circuits
and sensors
Ultrathin, flexible,
rechargeable
batteries
Rechargeable
battery
management
system
Smart adapter to
wirelessly
control lights
Wireless charging for
personal devices
Smart drones for
transportation
Autonomous crime
prevention robots
High-speed
contactless data
connectivity
Low power Wi-Fi
chip for wireless
peripherals
Integrated,
configurable wireless
modules
Miniaturized global
navigation modules
Electro-adhesion
technology
Force-sensitive
touch technology Smartphones as
dashboard cameras
Wireless soil and
environment monitoring
Analytics for home &
building automation
Landscape computing
solutions for smart cities
Access to new & tested technology building blocks
Development partnerecosystem
Experienced design & engineering teams
Entry into new & adjacent markets
Improved product reliability
Early stage engagement & accelerated time to market
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Clean TechSmart Electronics Lighting
• Smart rearview camera
• Connectivity &
infotainment products
• Motion & power controls
• Center high mounted stop
lights (CHMSL)
• Overhead consoles &
ambient lighting
• LED driver modules
• Flexible LED lighting
(Q-Prime)
• Power & signal distribution
• Electrohydraulic controls
• Power conversion, storage
& charging
Health Monitoring Drug Delivery Health Treatment
• DIVG delivery patches
• Insulin pump patches
• Electromechanical drug
delivery systems
• Smart patches
• 3D motion sensors
• Hearing aids
• EEG/EMG devices
• Electronic glasses
• Wearable sensor patches
• Electronic tattoos
• Artificial limbs
• Smart pills
• Bionic eye
• Dental hearing systems
• Smart implants
2010 2012 2013 2014
IPO Date: July 2012Product: Security Appliances
Flex Exclusive
IPO Date: Sept 2013Product: Security Appliances
Flex Exclusive
IPO Date: Dec 2013Product: Converged Storage
Flex Exclusive
IPO Date: Nov 2009Product: Security Appliances
IPO Date: May 2013Product: Optical Products & SDN
Flex Exclusive
IPO Date: April 2012Product: Network Control
IPO Date: Sept 2013Product: SSD Enterprise Storage
IPO Date: Nov 2012Product: WirelessNetworking
IPO Date: June 2014Product: SDN Solutions (Gigabit Ethernet Switches)
IPO Date: Oct 2015Product: Converged Storage
2015
Energy Management Renewable Energy Energy Storage
design, engineer,
manufacture for leading global electric meter
companies
over 10 million micro-inverters
shipped
over 1.7GW production capacity
over 25%of North American
electric meters
produced for all
major OEMs
cost optimization through alternate
material systems
full spectrum capabilities
to support residential,
commercial and utility scale
products
largest crystalline silicon solar module
manufacturer, outside of China
• Notification sensors
• Smart glasses
• Smart fabrics
• Super fitness watches
• Smart fitness wristbands
• Smart watches
• Smart socks
• Fitness shoe sensors
• Energy management/
thermostats
• Smart home controllers
• Cloud analytics
• Streaming video and IPTV
• Smart sensors and lighting
controls
• Streaming audio
Target Model Features Target Fiscal 2020 Potential
Operating Profit Contribution
Revenue
Growth
Operating
Margin
Double digit 5-7%
Double digit 4-6%
Stable 3-4%
Better mix 2-3%
~30%~30%
~20% ~20%
~60%
CTG INS HRS IEI
Fiscal2010
Fiscal2015
19%
6%13%
42%
39%
31%
17% 14%
34% 35%$9,358 $8,940
$5,634
FY14 FY15 FY16
YTD
CTG INS HRS IEI
GamingPersonal
SystemsWearables
Connected
LivingFashion
Consumer
Health
81% CAGRin connected
home
300% CAGR in wearables
#1in wearables
market
Multiplenew growth
vectors
Basic wearables include wrist worn bands but excludes smartwatches, chest straps, apparel and glasses
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Fiscal2010
Fiscal2015
19%
6%13%
42%
39%
31%
17% 14%
34% 35%
CTG INS HRS IEI
Communications Networking Server & Storage Converged
10 out of 12IPOs in
industry
~$9.2BGlobal
Revenue
#1worldwide
~$1BConverged
Networking
business
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3
4
Fiscal2010
Fiscal2015
19%
6%13%
42%
39%
31%
17% 14%
34% 35%
CTG INS HRS IEI
Connected CityIndustrial Smart Home
Reduce cost
LightingTAM: $72B
AutomationTAM: $102B
Capital EquipmentTAM: $140B
AgricultureTAM: $36B
Connected Home & LifestyleTAM: $198B
EnergyTAM: $371B
Smart Farm
Improve current business
Enable new
revenue
2014 Flex TAM’s
Industrial
AutomationAppliances Lifestyles Self-service HVAC
Capital
Equipment
Measurement
Instrumentation
& Test
Building
Automation
Safety &
SecuritySmart Grid Oil & Gas
Water Transport
& Treatment
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2
3
4
Fiscal2010
Fiscal2015
19%
6%13%
42%
39%
31%
17% 14%
34% 35%
CTG INS HRS IEI
Revenue Bookings
FY16E FY17E FY18E
95%Booked
92%Booked
85%Booked
FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Automotive Medical Aerospace & Defense
16FDA regulated
sites
~$2BAuto segment
~$1.7BMedical segment
#1Industry*(Technology
& Revenue)
#1Industry*(Technology
& Revenue)
79%(Bookings
increase over
FY14)
Over 65 Medical products
designed
Over 60 Manufacturing
transfers made
9,000Auto employees
25+Locations
15countries
* Compared to traditional competitors
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Reflects M&A transactions completed from FY13 to FY16, excludes OEM asset acquisitions
>$100M
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<$100M Purchase Price
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Please refer to the Investor Relations section of our website which contain the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures
24.1%23.7%
22.9% 22.7% 22.4%
Dec-16 Mar-15 Jun-15 Sep-15 Dec-15
(ROIC %)
$0.30
$0.27
$0.23
$0.27
$0.35
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
(EPS)
7,025 5,952 5,566
6,317 6,763
5.8%
6.4% 6.4% 6.3%6.7%
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
Adj. Gross Margin($ in millions)
207
178159
196
2362.9%
3.0%2.9%
3.1%
3.5%
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
% Revenue($ in millions)
1. Corporate services and other related to unallocated cost
Please refer to the Investor Relations section of our website which contain the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures
Improved utilization and successful new ramps
Driving a richer sketch-to-scale engagement
model
Strong execution across both Auto and Medical
Improved yields, productivity, and NEXTracker
ramp
37%
18%15%
30%33%
16%13%
38%
Other Information:
Adjusted SG&A Expense ~$215 million
Interest & Other Expense ~$25 million
Adjusted Income Tax Rate 8-10% range
GAAP EPS $0.18 - $0.24
WASO ~558 million shares
($ in millions, except per share amounts)
Adjusted operating income excludes approximately $21 million for stock based compensation, of which approximately $18 million is excluded from adjusted SG&A.
GAAP EPS reflects approximately $0.07 for intangible amortization and stock-based compensation expense.
Kevin Kessel
VP, Investor Relations
(408) 576 - 7985
Mary Lee
Sr. Manager, Investor Relations
(408) 576 - 5167
