Slide 1: Results for Q2 Fiscal 2020
Results for Q2 Fiscal 2020 Earnings Announcement: October 24, 2019 (Quarter Ended September 27, 2019)
Slide 2: Risks and Non-GAAP Disclosures
Risks and Non-GAAP Disclosures This presentation contains forward-looking statements within the meaning of U.S. securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the fu
Slide 3: Business Update
Business Update Revathi Advaithi, CEO
Slide 4: Q2 FY2020 Business Summary
Q2 FY2020 Business Summary Revenue ($M) Adj. Operating Adj. Earnings Adj. Free Cash Income ($M) Per Share Flow ($M) Adj. Operating Margin $0.31 6,663 187 3.7% $0.29 6,399 3.4% 3.4% 114 6,176 2.9% $0.27 6,088 208 227 224 (60) 188 $0.24 (185) Jun-18Q1Jun-19 Sep-18Q2Sep-19 Q1 Jun-18 Q2 Jun-19 Sep-18 Se
Slide 5: Approach to Managing the Business
Approach to Managing the Business Manage Drive Pursue Generate Grow portfolio to disciplined, design-led adjusted free cash Drive profitable improve mix and sustainable manufacturing for flow and have growth and market profitability execution better margins prudent capital leadership and allocation
Slide 6: Q2 2020 Financial Results
Q2 2020 Financial Results Chris Collier, CFO
Slide 7: Q2 FY2020 Income Statement Summary
Q2 FY2020 Income Statement Summary ($M, except per share amounts) Prior Yr Current Qtr Results vs. Guidance September 28, 2018 September 27, 2019 » Net sales of $ 6.1B is at Net sales $6,663 $6,088 the low end of the guidance range of Adjusted operating income 224 227 $6.1-$6.5B Adjusted net income
Slide 8: Quarterly Financial Highlights
Quarterly Financial Highlights Adj. Gross Profit ($M) Adj. SG&A ($M) Adj. Operating Income ($M) Adj. Gross Margin % of Revenue Adj. Operating Margin 7.2% 7.1% 6.8% 7.0% 6.9% 6.8% 3.7% 6.5% 6.7% 6.6% 3.2% 6.5% 3.1% 6.4% 6.3% 3.4% 6.2% 6.1% 433 6.0% 5.9% 5.8% 5.7% 210 227 414 5.6% 5.5% 224 5.4% 5.3% 5
Slide 9: Q2 FY2020 Business Group Performance
Q2 FY2020 Business Group Performance Adjusted Operating Revenue Income & Margin ($M) Y/Y Growth ($M) Accelerated investments into ramping HRS $1,189 -2% $83 7.0% business Robust growth and successfully IEI $1,786 14% $111 6.2% expanding profitability to record levels Sluggish end market demand press
Slide 10: Cash Flow Generation Highlights
Cash Flow Generation Highlights Inventory and Inventory Days* ($M) Net Capital Expenditures** ($M) Adjusted Free Cash Flow ($M) Inventory Days Adj. FCF Conversion 118% 62 66% 92% 83% 60 60 59 59 187 -39% 4,443 129 180 119 114 3,898 3,723 3,746 3,721 155 126 123 95 (60) Sep-18 Dec-18 Mar-19 Jun-19 Se
Slide 11: Third Quarter Fiscal 2020 Guidance – December 2019
Third Quarter Fiscal 2020 Guidance – December 2019 Guidance Business Group Revenue Outlook (Y/Y) Revenue $6,000 - $6,300 million HRS Flat to up 5% Adjusted Operating Income $230 - $255 million Adjusted Earnings Per Share $0.32 - $0.36 IEI Up 10% to 15% GAAP Income Before Income Taxes $125 – $150 mil
Slide 12: Summary
Summary • We have made substantial progress to improve our performance by reducing exposure to high-volatility, low margin businesses • We met EPS guidance while managing mix • We displayed strong adjusted operating margin expansion benefitting from our portfolio mix and cost discipline • We demonst
Slide 13: For more information, go to investors.flex.com
For more information, go to investors.flex.com 12
Slide 14: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended Quarter-ended Quarter-ended September 27, 2019 June 28, 2019 September 28, 2018 June 29, 2018 ($Thousands, except per share amounts) GAAP income (loss) before income taxes ($95,693) $64,109 $108,794 $141,637 Intangible
Slide 15: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended September 27, 2019 September 28, 2018 ($Thousands) % of revenue % of revenue GAAP gross profit $189,093 3.1% $402,301 6.0% Stock-based compensation expense 4,212 4,767 Customer related asset impairments 88,062 - Restru
Slide 16: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended September 27, 2019 September 27, 2019 ($Thousands) ($Thousands) Segment income: Reconciliation of segment income to loss before Communication & Enterprise Compute $31,634 income taxes Total segment income $227,142 Cons
Slide 17: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures Quarter-ended Quarter-ended Quarter-ended Quarter-ended Quarter-ended ($Thousands, except for conversion %) September 27, 2019 June 28, 2019 March 31, 2019 December 31, 2018 September 28, 2018 Net cash used in operating activities ($991,546) ($65
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