Slide 1: Strategy and Leadership Delivering Sustainable Value to All Shareholders
design develop deliver advanced technology Strategy and Leadership Delivering Sustainable Value to All Shareholders April 2016
Slide 2: Forward-Looking Statements
Forward-Looking StatementsThis document contains forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward- look
Slide 3: Agenda
Agenda Agenda Engaged Capital’s Claims are Without Merit Best-in-Class Corporate Governance The Benchmark Story Executive Summary design develop deliver advanced technology 3
Slide 4: Executive Summary
Executive Summary design develop deliver advanced technology 4 Executive Summary ► Strategic plan has delivered strong financial performance, premium valuation and positioned company ahead of future trends► Secure adds capabilities to core portfolio, consistent with strategy, and strong positive fin
Slide 5: The Benchmark Story
The Benchmark Story design develop deliver advanced technology 5
Slide 6: Continuously Evolving Our Platform ahead of Future Trends
Continuously Evolving Our Platform ahead of Future Trends – Powering the Next Industrial Revolution Continuously Evolving Our Platform ahead of Future Trends – Powering the Next Industrial Revolution ► Commoditization of legacy markets necessitates continuous evolution in EMS ► IoE, Cloud, and Analy
Slide 7: Advancing Our Long-term Strategy To Drive Shareholder Returns
Portfolio Management >10% Annual Growth in Higher-Value Markets► Focus on Expansion in Key End MarketsIndustrials (including aerospace and defense)Medical TechnologiesTest & Instrumentation (including semi-capital equipment) Margin Expansion >5% Long-Term Non-GAAP Operating Margin► Advancing Enginee
Slide 8: Shift to Higher-value Mix has Driven Superior Performance
Shift to Higher-value Mix has Driven Superior Performance Shift to Higher-value Mix has Driven Superior Performance Benchmark Peer median 2011 – 2015Higher-value markets Top 10 customer concentration change1 TSR2 Revenue CAGR %1 Gross margin change1 Non-GAAP operating margin change1,3 FCF margin cha
Slide 9: Strong Track Record and Proven Execution
Strong Track Record and Proven Execution Strong Track Record and Proven Execution 6.3% 8.9% 9.6% 10.1% 9.8% 2011 2012 2013 2014 2015 2011 2012 2013Return on Invested Capital Sources: Company filings, FactSet as of 04/20/16ROIC = [(Non-GAAP income from operations1 plus stock compensation)*(1-Tax Rate
Slide 10: Balanced Capital Deployment Track Record
Balanced Capital Deployment Track Record Balanced Capital Deployment Track Record Capex 29% M&A 40% Repurchases 31% Cumulative capital allocation FY11– FY15► Continue investing to drive growth and extendbusiness model with Voice-of-Customer inputs aligned for organic growth Disciplined, shareholder-
Slide 11: Building Our Higher-value Market Platforms Organically and Through M&A
Traditional markets Higher-value markets Organic Growth: 2015 New business wins► Significant new business wins in higher-value markets► Expanding revenue streams towards longer lifecycle products and increasing engineering-led solutions► Significant remaining opportunity for existing and new custome
Slide 12: Secure Acquisition = Significant Growth Potential
Secure Acquisition = Significant Growth Potential Secure Acquisition = Significant Growth Potential Secure expands our engineering solutions for industrial and defense customers Secure expands our engineering solutions for industrial and defense customers The Markets The Applications The Value The P
Slide 13: Best-in-Class Corporate Governance
Best-in-Class Corporate Governance design develop deliver advanced technology 13
Slide 14: Benchmark Has Best-in-Class Corporate Governance
► Diverse Board with robust independent oversight► Shareholder-friendly corporate governance► Executive compensation aligned with shareholder interests► Culture of transparency and accountability► Continued commitment to governance best practices design develop deliver advanced technology 14 Benchma
Slide 15: ISS Governance Analysis Indicates Benchmark Has the Best Governance Profile
Company Quickscore Board StructureScore Compensationscore Shareholder Rights Score Audit score 1 2 3 1 2 1 4 1 1 1 4 6 1 7 2 1 3 3 1 2 1 2 1 4 2 4 2 4 6 1 Source: ISS 10 - Most governance risk 1 - Least governance risk ISS Governance Analysis Indicates Benchmark Has the Best Governance Profile Among
Slide 16: Board of Directors
Name / Title Background David Scheible Chairman of the Board IndependentAge 59 ► Chairman and former CEO of Graphic Packaging (NYSE: GPK), a leading global paper and packaging company► Other Board experience: Graphic Packaging, Flint Group, Cancer Treatment Centers of America Michael Dawson Director
Slide 17: Executive compensation framework
"At Risk" 70% 30% ► Base salaries and target short-term incentive award opportunities reviewed and approved annually ► Robust stock ownership requirements All Directors and executives are in compliance with stock ownership guidelines ► Practice of making all Board-level compensation decisions on a s
Slide 18: Engaged Capital's Claims are Without Merit
Engaged Capital’s Claims are Without Merit design develop deliver advanced technology 18
Slide 19: Valuation and ROIC
Reality ► ROIC can be misleading because several of our peers have significant accumulated deficits, which reduce their Invested Capital and artificially inflate ROIC► Since ROIC is difficult to compare across our peers, it is not used to establish public market valuations— there is poor correlation
Slide 20: ROIC is a Challenging Metric to Compare EMS Companies
design develop deliver advanced technology 20 ROIC is a Challenging Metric to Compare EMS Companies ROIC is a Challenging Metric to Compare EMS Companies Source: Company filings, FactSet as of 04/20/161 Net operating profit after tax (NOPAT) is calculated as non-GAAP operating income after tax post
Slide 21: Benchmark Trades at a Premium to Its Peers on the Relevant Metrics
7.9x 2016 P / E113.2x 12.6x 10.3x 9.7x 8.9x PLXS BHESource: Wall Street research, FactSet as of 04/20/161 P/E ratios are expressed on a pre-SBC and pre-amortization basis FLEX CLS SANM JBL Benchmark Trades at a Premium to Its Peers on the Relevant Metrics Benchmark Trades at a Premium to Its Peers o
Slide 22: Working capital and cash conversion cycle
► A substantial portion of any cash generated would only be trapped overseas – Benchmark’s current approach drives more shareholder value► Benchmark has been effective at optimizing working capital for higher-value customers, which traditionally have longer CCCsAnnounced working capital improvements
Slide 23: Engaged Capital's Thesis for Working Capital is Flawed
BHE 1Source: Company filingsNote: Metrics as of Q4’15CY for Benchmark and Q4’15CY for Plexus; A/R days calculated as Q4’15CY accounts receivable divided by Q4’15CY annualized sales times 360 days; Inventory days calculated as Q4’15CY inventory divided by Q4’15CY annualized COGS times 360 days; A/P d
Slide 24: Benchmark Takes Advantage of Discounts, which Drives Greater Shareholder Value
Source: Benchmark management; Market data as of 04/20/16Note: BHE PF adjustment of ~7 days from foregoing trade discounts1 Based on common shares outstanding of 49.8mm as of 02/25/16 per Benchmark’s 2015 10-K2 P/E-base equity value determined by multiplying PF NOPAT impact of forgoing discounts ($6.
Slide 25: Engaged Capital's Claims Are Without Merit
Engaged Capital’s Claims Are Without Merit Engaged Capital’s Claims Are Without Merit $22.73 $33.46 $5.97 $4.42 $1.89 ($1.55) $35.01 Engaged calculation flawed:$2.42 upside from management’s announced initiatives Already factored into current stock price Speculative Risk to value Benchmark
Slide 26: Secure acquisition and capital allocation
Reality ► EMS industry must invest continually to strategically position for the future► Market has rewarded Benchmark with a premium valuation relative to peers► Engaged’s logic about the Secure transaction is flawedMultiple paid at low end of Secure’s peer group at the time, and reflected the inhe
Slide 27: Setting the Record Straight on Secure
Setting the Record Straight on Secure Setting the Record Straight on Secure 3 “In our view, … we believe Mercury Computer, which has adjusted EBITDA margins of 19% and EBIT margins of 6%, may be a good comp for Secure Technology. Although 6X EBITDA may be appropriate for an EMS company, MRCY is curr
Slide 28: Higher-value mix and P/E multiple
► Investors reward companies for shifting product mix towards higher-value / low volume end markets ► EMS companies with more exposure to industrials, medical, automotive, aerospace and defense end markets typically have higher valuations ► Portfolio repositioning towards diversified business helps
Slide 29: Most of Benchmark's Cash is Located Offshore
Most of Benchmark’s Cash is Located Offshore Most of Benchmark’s Cash is Located Offshore 3 JBL CLS BHE SANM PLXS $1,63472% of cash held abroad design develop deliver advanced technology 29 $883 $545 $466 $398 $355 FLEX Based in the U.S. Based overseas ► Tax leakage and loss of shareholder value is
Slide 30: Unwavering Track Record of Consistent Share Repurchases
Share repurchases over time 34 24 13 13 9 2 So
Slide 31: Executive compensation and ROIC
Reality ► From 2011 – 2015, shareholders have consistently demonstrated strong support of Benchmark's executive compensation policy with say-on-pay vote results in excess of 90%► ROIC is a poor short-term compensation metric: it risks discouraging smart long-term investments, and it is difficult to
Slide 32: Benchmark Has Sought to Work in Good Faith with Engaged Capital
Benchmark Has Sought to Work in Good Faith with Engaged Capital over the Past Year design develop deliver advanced technology 32 Benchmark Has Sought to Work in Good Faith with Engaged Capital over the Past Year ► As part of Benchmark's commitment to constructive dialogue with its shareholders, the
Slide 33: Engaged Capital's Proposed Board Candidates Do Not Meet Benchmark's Criteria
Engaged Capital’s Proposed Board Candidates Do Not Meet Benchmark’s Rigorous Criteria Engaged Capital’s Proposed Board Candidates Do Not Meet Benchmark’s Rigorous Criteria Paul TufanoFormer CFO and COO, Alcatel- Lucent Yes Michael DawsonFormer CFO, GlobalSantaFe Yes B
Slide 34: Engaged Capital's Record of Creating Shareholder Value is Weak
Engaged Capital’s Record of Creating Shareholder Value is Weak design develop deliver advanced technology 34 Engaged Capital’s Record of Creating Shareholder Value is Weak Source: FactSet as of 04/20/16, SEC filings1 Includes all campaigns in which Engaged Capital secured the appointment of a dissid
Slide 35: In Closing: Vote the White Proxy Card
In Closing design develop deliver advanced technology 35 In Closing Vote the White Proxy Card to support the Benchmark leadership team’s continued strategy to deliver shareholder value Vote the White Proxy Card to support the Benchmark leadership team’s continued strategy to deliver shareholder valu
Slide 36: Appendix
Appendix design develop deliver advanced technology 36
Slide 37: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations design develop deliver advanced technology 37 GAAP to Non-GAAP Reconciliations ($mm) 2011 2012 2013 2014 2015 Revenue (GAAP) $2,253.0 $2,468.2 $2,506.5 $2,797.1 $2,540.9 Income from operations (GAAP) $41.3 $75.6 $116.5 $100.1 $93.0 Operating margin (GAAP)1 1.8% 3.1%