Slide 1: Flex Investor and Analyst Day
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Slide 2: Investor and Analyst Day 2022
Investor and Analyst Day 2022 David Rubin Vice President, Investor Relations March 30, 2022
Slide 3: Risks and Non-GAAP Disclosures
Risks and Non-GAAP Disclosures This presentation contains forward-looking statements within the meaning of U.S. securities laws, including: statements related to future expected revenues and earnings per share. These forward-looking statements involve risks and uncertainties that could cause the act
Slide 4: Today's agenda
Today’s agenda Driving growth in the next era of outsourcing Revathi Advaithi | Chief Executive Officer Next Generation Mobility Mike Thoeny | President, Automotive Business Group Digital Healthcare Randy Clark | President, Health Solutions Cloud Expansion Michael Hartung | President, Agility Soluti
Slide 5: Driving growth in the next era of outsourcing
Investor and Analyst Day 2022 Driving growth in the next era of outsourcing Revathi Advaithi Chief Executive Officer March 30, 2022
Slide 6: Today's key messages
Today’s key messages We have We have focused We have driven We are raising transformed the on high growth margin expansion our long-term company and markets driven by through our financial pivoted to growth secular trends operating model framework 6
Slide 7: Flex is one of the largest contract manufacturing services companies
Flex is one of the largest contract manufacturing services companies 38 47 55 100+ facilities facilities facilities facilities in AMER in EMEA in APAC 30 countries 160k employees 1k customers 16k suppliers 7
Slide 8: We made significant progress on our transformation journey
We made significant progress on our transformation journey Markets Technology Changed the portfolio mix to higher-margin, strategically aligned businesses Accelerated our growth focus in the right end markets with the right customers Built world-class manufacturing capabilities that have improved ma
Slide 9: We are a purpose-driven company
We are a purpose-driven company Our purpose Make great products for our customers that create value and improve people’s lives. Our values and ways of working We support each We move fast We do the right other as we strive to with discipline thing always find a better way and purpose Learn and adapt
Slide 10: We have a strong track record for ESG
We have a strong track record for ESG Environmental Social Governance Stewarding sustainable operations to reduce Nurturing a safe, inclusive work environment Driving responsible business practices our environmental impact and investing in our communities 100% of new global suppliers screened 92% (7
Slide 11: We now have a stronger and more robust portfolio
We now have a stronger and more robust portfolio Regional presence Diverse customer base Balanced business* China North America Top 10 Other Agility Reliability EMEA Other Nextracker 3% 5% 25% 21% 23% 29% 35% 41% 35% FY18 FY22E FY18 FY22E FY18 41% FY22E 54% 59% 62% 21% 65% 28% 17% 34% * Excludes Int
Slide 12: We have delivered on our commitments
We have delivered on our commitments Revenue Growth Margin Expansion Earnings Growth Cash Generation FY20 COMMITMENT Organic growth at Mid-single digit adjusted 10%+ annual adjusted 80% adjusted free or above GDP operating margins earnings per share growth cash flow conversion FY22E RESULTS ~6% grow
Slide 13: We are entering a new era of growth
We are entering a new era of growth
Slide 14: Global complexities are driving a new wave of outsourcing opportunities
Global complexities are driving a new wave of outsourcing opportunities $600 Billion EMS and outsourcing trend driving a ~5-7% CAGR1 Digitization of Global Sustainability everything uncertainty requirements Smarter products in Unprecedented global Heightened urgency to every industry create challeng
Slide 15: We have the right capabilities to win
We have the right capabilities to win Manufacturing excellence Supply chain resiliency Leveraging industry-leading Navigating global complexities advanced capabilities to through a digitized supply chain drive productivity, quality Global scale to rapidly manage risk across and efficiency the value
Slide 16: End-to-end manufacturing and supply chain capabilities across a global footprint
End-to-end manufacturing and supply chain capabilities across a global footprint Industry 4.0 Digitized supply chain Full lifecycle management Resilient, global network of 16,000 suppliers Capabilities for regulated industries Real-time visibility and analytics 16
Slide 17: Advanced technologies and value-added services to support customers
Advanced technologies and value-added services to support customers throughout their lifecycle Connectivity Design engineering Internet of Things (IoT) Component services Human machine interface Logistics and fulfillment Power management Circular economy 17
Slide 18: Our diverse core portfolio delivers a competitive advantage
Our diverse Delivers a competitive advantage core portfolio across multiple growth drivers Automotive Next Generation Mobility Communication Automation Industrial Communications, Digital Healthcare Internet of Things (IoT) Robotics Enterprise and Cloud Health Solutions Lifestyle Cloud Expansion Rene
Slide 19: Today, we dive into three high-growth drivers
Today, we dive into three high-growth drivers Diverse Core Portfolio Investing in high-growth sub-markets Automotive Next Generation Mobility Transition to electrification and ADAS/autonomous is fundamentally Industrial transforming the auto industry Communications, Enterprise and Cloud Digital Heal
Slide 20: We are capitalizing on high-growth opportunities
We are capitalizing on high-growth opportunities Next Generation Mobility Mike Thoeny | President, Automotive Business Group Digital Healthcare Randy Clark | President, Health Solutions Cloud Expansion Michael Hartung | President, Agility Solutions 20
Slide 21: Next Generation Mobility
Investor and Analyst Day 2022 Next Generation Mobility Mike Thoeny President, Automotive Business Group March 30, 2022
Slide 22: Flex is aligned with the macro trends in mobility
SEAMLESS CONNECTIVITY Flex is aligned with the macro trends in mobility Sustainability and Safety and Seamless Autonomy: emissions convenience connectivity MaaS and DaaS Heightened environmental Drivers expect built-in safety Networked to edge / cloud Strong business case for expectations and and a
Slide 23: Leveraging Flex's full capabilities to enable next generation electric mobility ecosystem
Leveraging Flex’s full capabilities to enable the next generation electric mobility ecosystem Energy and Infrastructure Servers and Residential energy storage Communications Grid energy storage 5G infrastructure Battery storage for cloud servers Edge compute Server compute Next Generation Mobility N
Slide 24: Our Next Gen Mobility portfolio opens up greater market opportunity
Our Next Gen Mobility portfolio opens up greater market opportunity EV charging 32% 34% CAGR stations CAGR EV power Complete commercial $15B $23B and residential EV electronics charging stations $6B Converters, inverters, battery $10B management systems and CY21 TAM CY24 TAM on-board chargers CY21 T
Slide 25: Our portfolio shift to Next Gen Mobility drives above-market growth
Our portfolio shift to Next Gen Mobility drives significant above-market growth Flex mobility revenue ~50% Growth NGM CAGR Core Content per vehicle Design-led business New mobility and OEM customers Regional diversification FY22E FY25E Above financial data estimates and projections are from Jan 2022
Slide 26: Our Next Gen Mobility portfolio allows us to capture global growth opportunities
Our Next Gen Mobility portfolio allows us to capture global growth opportunities Content per vehicle Nameplates >700 >$300 ~600 ~$260 ~460 ~$140 FY18A FY22E FY25E FY18A FY22E FY25E Design-led revenue OEM-direct revenue APAC revenue 1.5x 2.5x 2x FY18A FY22E FY25E FY18A FY22E FY25E FY18A FY22E FY25E A
Slide 27: Next Gen Mobility wins validate our strategy
Next Gen Mobility wins validate our strategy FY22 new awarded business $4.4B Total program revenue ~50% Next Gen Mobility revenue 4x Pipeline expansion Key customer spotlight programs Great Wall Motor Inceptio Technology NIO High Voltage Inverter L3+ Autonomous Driving ADAS Domain Controller Compute
Slide 28: Flex technology is gaining global recognition
Flex technology is gaining global recognition and accelerating sustainable growth Automotive News Automobile and CLEPA Innovation NVIDIA DRIVE Orin PACE Awards Parts Magazine Awards Partner Two finalists, our Smart An Innovative Winner in the Announced as a key Power Conversion Technology Award in t
Slide 29: Flex is uniquely positioned to deliver above market growth in Next Gen Mobility
Flex is uniquely positioned to deliver above market growth in Next Gen Mobility Mobility macro $100B addressable Execution of a Expected double trend alignment market expansion winning strategy market growth Sustainability 23% ~50% and emissions CAGR Next Gen Mobility CAGR driving EV growth ecosyste
Slide 30: Digital Healthcare
Investor and Analyst Day 2022 Digital Healthcare Randy Clark President, Flex Health Solutions March 30, 2022
Slide 31: Flex is aligned with macro trends driving growth in healthcare
Flex is aligned with macro trends driving growth in the healthcare industry Chronic disease Shifting site of Cost Data-driven prevalence care delivery pressures healthcare Increased demand on Care shifting from hospital Increased regulatory Data and artificial healthcare systems due to ASC, office,
Slide 32: Flex can accelerate and reduce risk as customers transition to new technology
Flex can accelerate and reduce risk as customers transition to new technology Diabetes monitoring devices Flex helps OEMs transition to new $16B innovations with speed and less risk CGMs $14B Diagnostics Core laboratory Point of care $12B BGMs Dialysis $10B Center based Home care $8B Hospital In
Slide 33: Our focus is aligned with growth markets
Our focus is aligned with growth markets $140B addressable market $66B Medical TAM Devices Personal diagnostics Advanced surgical tools $59B Medical Disposables TAM Equipment Imaging Diagnostic systems Life science Hospital products $16B Pharma TAM Smart inhalers/injectors Wearable systems Connectiv
Slide 34: We have the right capabilities to win healthcare manufacturing opportunities
We have the right capabilities to win healthcare manufacturing opportunities Flex-enabled solutions 6% CAGR Outsourced Insourced 18% Vertical integration Global scale and regional reach $140B market opportunity 2022 Circular economy solutions Technology innovations and expertise 82% Source: Outsourc
Slide 35: Increasing scope and scale
Increasing scope and scale Case Study: Multi-segment MedTech customer 2018 2021 2023 1 Business unit | 2 Sites | 1 Product 2 Business units | 4 Sites | 5 Products 3 Business units | 5 Sites | 8 Products $70M $290M $390M+ revenue revenue revenue Printed circuit board assembly High-level assembly
Slide 36: Doubling market growth at 12-14% CAGR
Doubling market growth at 12-14% CAGR Favorable market $140B addressable Core capabilities Expected double- trends market focus positioning us to win digit market growth Chronic disease Vertical prevalence integration 12-14% 18% CAGR Shifting site of Global scale and care delivery regional reach Cos
Slide 37: Cloud Expansion
Investor and Analyst Day 2022 Cloud Expansion Michael Hartung President, Flex Agility Solutions March 30, 2022
Slide 38: Flex is aligned with global trends driving growth in the Cloud market
Flex is aligned with global trends driving growth in the Cloud market Digital transformation Migration to the Spend on Cloud Data center build- accelerating Cloud increasing services rising out climbing 38
Slide 39: Cloud data center expansion drives strong growth in Critical Power and IT Infrastructure
Cloud data center expansion drives strong growth in Critical Power and IT Infrastructure equipment Cloud data center total available market1 ($B) $16 $15 $123 CAGR $14 $111 $13 $99 Critical Power Infrastructure 8%2 $87 IT Infrastructure 12%3 2021 2022E 2023E 2024E 1. Cloud data center total availabl
Slide 40: Our broad portfolio covers Critical Power and IT Infrastructure
Our broad portfolio covers Critical Power and IT Infrastructure for the data center Critical Power Infrastructure IT Infrastructure Other data center capex spend includes general construction and mechanical infrastructure. 40 Source: IDC, Gartner, Flex Corporate Strategy (includes server, storage, a
Slide 41: Anord Mardix provides highly engineered Critical Power Solutions
Anord Mardix provides highly engineered Critical Power Solutions Power distribution unit Switchgear Remote power panel Busway Critical Power Infrastructure IT Infrastructure Other data center capex spend includes general construction and mechanical infrastructure. 41 Source: IDC, Gartner, Flex Corpo
Slide 42: Anord Mardix provides highly engineered Critical Power Solutions
Anord Mardix provides highly engineered Critical Power Solutions Modular solution Critical Power Infrastructure IT Infrastructure Other data center capex spend includes general construction and mechanical infrastructure. 42 Source: IDC, Gartner, Flex Corporate Strategy (includes server, storage, and
Slide 43: CEC provides design and manufacturing services for IT Infrastructure products
CEC provides design and manufacturing services for IT Infrastructure products Servers and racks Critical Power Infrastructure IT Infrastructure Other data center capex spend includes general construction and mechanical infrastructure. 43 Source: IDC, Gartner, Flex Corporate Strategy (includes server
Slide 44: We have multiple paths to manufacturing vertically-integrated products
We have multiple paths to manufacturing vertically-integrated products Rack Top cover Switch Server motherboard Server Accelerator and network cards Storage Power shelf Storage Power supply/ battery back-up Chassis 44
Slide 45: Our bundled products and services create competitive advantage
Our bundled products and services create competitive advantage with multiple pools of profit Design innovation Advanced manufacturing Circular economy Global scale Customized Cloud-specific Optimized for Cloud IT, rack Sustainable, closed loop Resilient supply chains design and technology integratio
Slide 46: We expect to grow our Cloud business ~20% per year for the next 3 years
We expect to grow our Cloud business ~20% per year for the next 3 years ~20% Massive expansion of the Cloud space is being CAGR driven by sustainable global trends We have a unique position in the data center to capitalize on market momentum We offer an end-to-end bundled solution to enable Cloud ec
Slide 47: Positioned to drive profitable growth
Positioned to drive profitable growth
Slide 48: Investments in high-growth drivers create significant opportunities
Investments in high-growth drivers create significant opportunities Next Generation ~50% Mobility CAGR Digital ~14% ~20%+ Healthcare CAGR blended CAGR1 Cloud ~20% Expansion CAGR 1. Blended ~20% CAGR based on internal Flex estimates. 48
Slide 49: Portfolio strength and mix are driving incremental growth
Portfolio strength and mix are driving incremental growth Core Flex 3-year CAGR* ~20%+ Increased focus in high-growth markets High single-digit ~7%+ Strong diversified Core Flex CAGR portfolio FY22E FY25E *Based on Core Flex, excluding Nextracker 49
Slide 50: Growth, mix and optimization support further margin expansion
Growth, mix and optimization support further margin expansion Margin opportunities throughout FY23-FY25 Core Flex adjusted operating margins* Mix shift to increase higher value business • Higher value markets 5%+ • Captive market • Synergies Technology to create operational efficiency • Industry 4.0
Slide 51: Improving our long-term financial framework
Improving our long-term financial framework Core Flex* Revenue Growth Margin Expansion Earnings Growth Cash Generation High single-digit 5%+ adjusted Mid-teen adjusted ~80% adjusted free revenue growth operating margin earnings per share cash flow conversion growth *Based on Core Flex, excluding Nex
Slide 52: Elevating growth and creating shareholder value
Investor and Analyst Day 2022 Elevating growth and creating shareholder value Paul Lundstrom Chief Financial Officer March 30, 2022
Slide 53: Key highlights
Key highlights Executed on our Accelerating growth and Confidence in delivering transformation strategy enhancing value strong, profitable growth Repositioned Flex to Focusing to capture and Executing through clear, increase exposure to high- deliver profitable growth and strategic roadmap with grow
Slide 54: Delivered growth and margin expansion
Delivered growth and margin expansion Revenue ($M) Adj. Operating Income ($M) Adj. Earnings per Share Adj. Operating Margin 20% 4.5% $1.88 $26,211 6% 4.3% $25,600 3.7% $1,160 3.3% $24,210 $24,124 $1,031 $1.57 $898 $872 $1.23 $1.14 1 1 FY19 FY20 FY21 FY22E FY19 FY20 FY21 FY22E 1 FY19 FY20 FY21 FY22E
Slide 55: Strong track record of delivering high returns through effective capital deployment
Strong track record of delivering high returns through effective capital deployment Return on Invested Capital Deployment of Operating Cash Flow FY20 – FY22E ~21% 36% 20.4% 19.6% Capex 18% Share Repurchase 17.2% M&A (Anord Mardix) 37% FY19 FY20 FY21 FY22E 55
Slide 56: Focused investments to further improve our operations and drive growth
Focused investments to further improve our operations and drive growth Capital Expenditures1 ($M) Focused Investment Strategy 2.4% % of Revenue Capex returning to 2% of revenue $631 1.7% 1.5% Strategic growth 1.1% $430 $356 Margin accretive opportunities $267 Leading edge process technologies FY19 F
Slide 57: Investing with purpose and agility
Investing with purpose and agility Synergistic to core businesses Strengthens Flex’s Industrial portfolio by expanding offering of Power products Key strategic Cross-sell opportunities with existing global customer base in considerations rapidly growing data center market Aligned to long-term growth
Slide 58: Opportunistically returning cash through share repurchases
Opportunistically returning cash through share repurchases Share Repurchases ($M) Shares Outstanding (M) 517 ~$680 497 493 ~$500 million remaining on current share repurchase authorization $260 $189 $183 461 10% reduction FY19 FY20 FY21 FY22E 58
Slide 59: Financial guidance for FY2023
Financial guidance for FY2023 Total Flex EPS Walk Share Supply Chain Count Inefficiencies Productivity Tax/Interest $27.8B revenue and Other Growth $2.16 1 4.8% adj. operating margins $1.88 $2.16 adj. earnings per share2 $550M+ adj. free cash flow3 FY22E FY23E 1. Adjusted operating margin does not i
Slide 60: New long-term financial framework
New long-term financial framework Core Flex Adj. EPS Growth Core Flex Nextracker High single-digit growth revenue Mid-teens growth $2.65 5%+ adj. operating margins Mid-teens growth adj. earnings per share $1.73 ~80% adj. free cash flow conversion FY22E FY25E *Based on Core Flex, excluding Nextracker
Slide 61: Winning value proposition
Winning value proposition Operational Unique capabilities Macro and secular Strong, profitable excellence positioned to win growth drivers growth and margin Transformed portfolio Advanced global Strategic roadmap to expansion and executed with manufacturing, supply address multiple, Confidence in ou
Slide 62: Q&A
Q&A For more information, please visit investors.flex.com
Slide 63: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures FY19 FY20 FY21 FY22E** ($ in millions, except per share amounts)* GAAP Operating Income $476 $415 $795 $980 Intangible amortization 74 64 62 68 Stock-based compensation expense 76 71 79 93 Restructuring charges 113 216 101 15 Customer related ass
Slide 64: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures ($ in Millions)* FY20 – FY22E** Net cash used in operating activities ($459) Reduction in ABS levels and other 797 Cash collections of ABS positions and other 2,564 Net Capital Expenditures (1,052) Adjusted free cash flow*** 1,849 GAAP free cash
Slide 65: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures FY19 FY20 FY21 FY22E** GAAP ROIC* 10.1% 10.0% 15.7% 17.7% Non-GAAP Adjustments 7.1% 9.5% 4.7% 3.0% Non-GAAP ROIC*** 17.2% 19.6% 20.4% 20.7% *Return on Invested Capital (ROIC) is calculated by dividing the Company's last twelve months after-tax No
Slide 66: Thank you.
Thank you. For more information, please visit investors.flex.com