Sanmina Corporation · NASDAQ:SANM
Sanmina — Q4 2023 Earnings Presentation
32 slides from Sanmina's earnings presentation, Nov 6, 2023
Slide 1: Fourth Quarter and Fiscal Year 2023 Results
Fourth Quarter and Fiscal Year 2023 Results November 6, 2023
Slide 2: Today’s Presenters
Today’s Presenters Jure Sola Kurt Adzema Chairman & CEO EVP & CFO 2
Slide 3: Safe Harbor Statement
Safe Harbor Statement Certain statements made during this presentation, concerning our financial outlook for the first quarter fiscal 2024 and our expectations for FY24 generally constitute forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities E
Slide 4: FY’23 Highlights
FY’23 Highlights Non-GAAP Non-GAAP Revenue Operating Margin Diluted EPS $8.94 Billion 5.8 Percent $6.26 13% Y/Y revenue growth Y/Y growth in all end-markets Non-GAAP operating margin expanded 80 bps Y/Y Non-GAAP diluted EPS growth 34% Y/Y 4
Slide 5: Financial Overview
Financial Overview Kurt Adzema 5
Slide 6: Q4’23 Non-GAAP Actual Results vs Outlook
Q4’23 Non-GAAP Actual Results vs Outlook Q4’23 Outlook WAS Revenue $2.05B $2.1B - $2.2B Gross Margin 8.7% 8.3% - 8.8% Operating Margin 5.7% 5.5% - 6.0% Diluted EPS $1.42 $1.47 - $1.57 Solid Operating Margin Refer to GAAP to non-GAAP reconciliation on slide 29. 6
Slide 7: Comparable Y/Y Quarter P&L Performance
Comparable Y/Y Quarter P&L Performance ($ in millions, except per share data) Non-GAAP Non-GAAP Non-GAAP Revenue Gross Profit / Margin Operating Income / Margin Diluted Earnings Per Share $2,225 $179 $2,052 $176 $1.37 $1.42 $117 $118 8.7% 5.7% 7.9% 5.3% Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'2
Slide 8: Segment Reporting – Revenue and Non-GAAP Gross Margin
Segment Reporting – Revenue and Non-GAAP Gross Margin* ($ in millions) Integrated Manufacturing Solutions Components, Products and Services $1,938 $1,930 $463 $458 $1,806 $1,822 $431 $419 $440 $1,639 14.5% 11.8% 10.8% 8.3% 10.2% 7.1% 7.5% 8.0% 8.8% 6.9% Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'2
Slide 9: Comparable Y/Y P&L Performance
Comparable Y/Y P&L Performance ($ in millions, except per share data) Revenue Non-GAAP Gross Profit / Margin $8,935 $7,920 $763 $6,738 $638 $543 8.5% 8.1% 8.1% FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 Non-GAAP Operating Income / Margin Non-GAAP Diluted Earnings Per Share $520 $6.26 $399 $4.68 $308 5.8% $
Slide 10: Strong Balance Sheet
Strong Balance Sheet ($ in millions) 9/30/2023 Key Takeaways: Cash and cash equivalents $ 668 Accounts receivable, net Contract assets 1,231 446 Solid cash position Inventories 1,477 Substantial liquidity: $1.53B Property, plant and equipment, net 633 Deferred tax assets 178 Debt to cash: 0.51
Slide 11: Cash Flow and Capital Allocation
Cash Flow and Capital Allocation Cash Flow from Operations: Q4: $77M FY’23: $235M Capital Allocation Priorities: Net CapEx: Q4: $38M Fund organic growth FY’23: $190M Investing in growth markets, technology Strategic transactions and capabilities Debt reduction Free Cash Flow: Q4:
Slide 12: Q1’24 Outlook
Q1’24 Outlook The following outlook is for the first fiscal quarter ending December 30, 2023*. Q1’24 Revenue: $1.85B - $1.95B GAAP Diluted EPS: $0.98 - $1.08 Non-GAAP Diluted EPS: $1.20 - $1.30 *The outlook and certain statements made during this presentation, including our financial outlook for the
Slide 13: Business Overview
Business Overview Jure Sola 13
Slide 14: P&L Performance
P&L Performance ($ in millions, except per share data) Revenue Non-GAAP Non-GAAP Operating Income / Margin Diluted Earnings Per Share 12.8% $8,935 17.5% $7,920 $520 33.7% $6.26 $6,738 $399 29.4% $4.68 $308 5.8% $3.61 5.0% 4.6% FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 Refer to GAAP to no
Slide 15: Revenue by End-Market
Revenue by End-Market ($ in millions) Q4’23 Y/Y FY’23 Q4’22 Q3’23 Q4’23 Change FY’22 FY’23 % of Sales Growth % of Sales Industrial/Medical/ Q/Q: (0.1%) Defense and Aerospace/ $1,310 $1,344 $1,343 Y/Y: 2.5% 65.4% $4,744 $5,389 13.6% 60.3% Automotive Communications Networks Q/Q: (17.8%) $915 $863 $709
Slide 16: Market Diversification
SANMINA a és r Market Diversification ~
Slide 17: FY’23 Market Diversification
FY’23 Market Diversification Industrial Communications Networks Medical Cloud Infrastructure Defense and Aerospace & Automotive Industrial/Medical/Defense and Aerospace/Automotive Communications Networks and Cloud Infrastructure 60% 40% 17
Slide 18: Market Diversification: Industrial
Market Diversification: Industrial Focus Areas Renewable Energy - Generation & Storage Power Controls & Management - Fuel cell system controls - Commercial solar inverters - Electrolyzer system controls - High voltage rectifier, inverter equipment - Energy storage - Commercial power infrastructu
Slide 19: Market Diversification: Medical
Market Diversification: Medical Focus Areas Disposables / Wearables / Consumables Hospital and Medical Offices - Glucose sensors - Surgical robots - Drug delivery - Respiratory - Cancer treatment - Surgical controllers - Microfluidic cartridges - Diagnostic imaging - Buffer agent vials - Patient
Slide 20: Market Diversification: Defense and Aerospace
Market Diversification: Defense and Aerospace Focus Areas Defense Commercial Aerospace - Data acquisition & concentrators - Full authority digital engine controller - Advanced military communications - Flight management - Night vision - Centralized flight display control unit - Missile control a
Slide 21: Market Diversification: Automotive
Market Diversification: Automotive Focus Areas Automotive (EV and Autonomous) Transportation - Power conversion systems - Positive train control assemblies - Battery control modules - On board door control assemblies - Advanced Driver Assistance Systems (ADAS) - On board passenger communication
Slide 22: Market Diversification: Communications Networks and Cloud Infrastructure
Market Diversification: Communications Networks and Cloud Infrastructure Focus Areas High Performance Networks - Optical systems 400G and 800G - 1.6T in development - Cloud grade routing (IP routers) - Broadband access solutions - Artificial intelligence (AI) and machine learning (ML) infrastructu
Slide 23: Well Positioned For The Future
Well Positioned For The Future Long-term Positive Trends in Key Markets Cloud – AI and ML Defense and Aerospace Digital Health Electric Vehicles Industrial Optical Packaging Integrated Manufacturing Solutions for High Technology Markets 23
Slide 24: Sanmina’s Priorities – To Drive Long-term Profitable Growth
Sanmina’s Priorities – To Drive Long-term Profitable Growth Customer Centric Leading Technology, Heavily Long-term Growth and Cash Flow Generation Maximize Regulated Markets Margin Expansion Shareholder Value Provide Leading Technology to Customers in Heavily Regulated Markets 24
Slide 25: Summary
Summary Delivered strong results in FY’23 FY’24: Soft demand for the first half of the year Expect demand to improve in the second half of the year Driving growth in key end-markets Continue to invest in the business Strong Foundation to Build Better Future 25
Slide 26: Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP
Consolidated Financial Statements Reconciliation of GAAP vs. Non-GAAP Quarter Ended: September 30, 2023 26
Slide 27: Condensed Consolidated Balance Sheets
Sanmina Corporation Condensed Consolidated Balance Sheets (in thousands) (GAAP) (Unaudited) September 30, October 1, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 667,570 $ 529,857 Accounts receivable, net 1,230,771 1,138,894 Contract assets 445,757 475,721 Inventories 1,477,223 1,684
Slide 28: Condensed Consolidated Statements of Income
Sanmina Corporation Condensed Consolidated Statements of Income (in thousands, except per share amounts) (GAAP) (Unaudited) Three Months Ended Twelve Months Ended September 30, October 1, September 30, October 1, 2023 2022 2023 2022 Net sales $ 2,052,019 $ 2,224,865 $ 8,935,048 $ 7,919,622 Cost of s
Slide 29: Reconciliation of GAAP to Non-GAAP Measures
Sanmina Corporation Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share amounts) (Unaudited) Three Month Periods Twelve Month Periods Q4'23 Q3'23 Q2'23 Q1'23 Q4'22 FY23 FY22 FY21 GAAP Gross profit $ 173,428 $ 183,208 $ 191,189 $ 195,386 $ 172,229 $ 743,211 $ 622,206 $ 526,441
Slide 30: Condensed Consolidated Cash Flow
Sanmina Corporation Condensed Consolidated Cash Flow (in thousands) (GAAP) (Unaudited) Three Month Periods Twelve Month Periods Q4'23 Q3'23 Q2'23 Q1'23 Q4'22 FY23 FY22 GAAP Net income before noncontrolling interest $ 65,355 $ 81,737 $ 85,307 $ 95,114 $ 58,364 $ 327,513 $ 240,384 Depreciation and amo
Slide 31: Pre-Tax Return on Invested Capital (ROIC)
Sanmina Corporation Pre-Tax Return on Invested Capital (ROIC) ($ in thousands) (Unaudited) Three Month Periods Q4 FY23 Q3 FY23 Q2 FY23 Q1 FY23 Q4 FY22 GAAP Operating income $ 99,266 $ 107,365 $ 120,601 $ 128,426 $ 103,350 x 4.0 4.0 4.0 4.0 4.0 Annualized GAAP Operating income 397,064 429,460 482,404
Slide 32: Thank You
SANMINA ~ ey Thank You