Slide 1: Investor and Analyst Webcast
Investor and Analyst Webcast March 11, 2020 1
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: Agenda
Agenda 1 COVID-19 update Revathi Advaithi 2 Long-term strategy discussion Revathi Advaithi 3 Segment strategy and structure update Doug Britt and Paul Humphries 4 Our financial framework Chris Collier 3 3
Slide 4: COVID-19 Sit-Rep
COVID-19 Sit-Rep Swift and decisive action Daily collaboration with In mid-January, we to protect health and safety customers and suppliers activated our crisis • Personal Protection Equipment (PPE) • Flagged all China, Italy, Japan, and Korea response protocols origin components and re-confirmed le
Slide 5: COVID-19 scenarios
Scenario planning Epidemiology Macroeconomy Quick recovery • Community spread • Economic impact Return to normal growth rates contained globally by Q2 mostly restricted to Q1 in calendar Q2-Q3 COVID-19 scenarios Global slowdown • Community spread is • Consumer confidence Return to normal growth rate
Slide 6: What we accomplished in Year One
What we accomplished in Year One Immediate actions: Triaged non-strategic Executing against our activities and changed our mix longer-term strategy: Early results ‒ Strategically reallocated capital and resources 3 quarters year-over-year Assessed our targets, capabilities and culture Adj. Gross Mar
Slide 7: Foundational strength
Foundational strength REVENUE RANKING EMPLOYEES DESIGNERS AND ENGINEERS $26 billion+ Global 500 160 thousand+ 4 thousand+ CUSTOMERS SUPPLIERS GLOBAL OPERATIONS DESIGN CENTERS 1 thousand 16 thousand 100+ facilities 20+ 7
Slide 8: Building on our 50-year history
Building on our 50-year history Our refreshed Vision is to be the most trusted Manufacturing is our global technology, supply chain, & manufacturing core foundation solutions partner to improve the world Global scale and regional reach Proximity to our customers and their end Our purpose markets in
Slide 9: Sustainability is in our DNA
Sustainability is in our DNA We make great products for our customers that create value and improve people’s lives Environmental Social Governance Progress in 2019 Progress in 2019 Progress in 2019 • 41K tonnes of CO2e • +4,000 employees benefiting from the Flex • 99% of employees completed code of
Slide 10: Moving forward
Moving • We have made deep and sustainable changes to our business forward • Our mid-to-long term plan is to shift mix to a more diversified, higher value portfolio • We are growing in specific, targeted markets where our differentiated capabilities in complex engineering-led programs create a win-w
Slide 11: Our strategic framework is focused in four areas
Our strategic framework is focused in four areas: Targeted growth Sharpening our and optimal mix in Markets Technology differentiation our end markets Driving efficiency and Delivering with productivity with two Operations Systems discipline and focused models consistency 11
Slide 12: Targeted growth and optimal mix in our end markets
MARKETS Targeted growth and optimal mix in our end markets • Tied to important secular trends like autonomous driving, clean energy, connectivity, and digital healthcare • Highly targeted in growing in sub-markets that drive longer term customer affinity • Uniquely positioned in highly complex, engi
Slide 13: Six end markets requiring unique strategies to drive growth
Six end markets requiring unique strategies to drive growth and market leadership Communications, Lifestyle Consumer Devices Enterprise & Cloud Datacenter, Edge, Communications Appliances, Floor Care, Micro Mobility, Mobile and High Velocity, Infrastructure Consumer Packaging, Audio Consumer Devices
Slide 14: Driving efficiency and productivity with two focused models
OPERATIONS Driving efficiency and productivity with two focused models • Two delivery models – each adapted to end market dynamics and a playbook to drive maximum value for customers • Emphasis on productivity with optimized footprint and high capacity utilization • Disciplined in allocating and dep
Slide 15: Each end market requires a different focus
Each end market requires a different focus Higher product mix, lower volumes Cost of failure Speed of product lifecycle Consumer Health Lifestyle CEC Industrial Automotive Devices Solutions • High velocity • Durable products • Leading edge of • High complexity, • High complexity, • High complexity,
Slide 16: Business segment transformation
Business segment transformation CTG CEC IEI HRS Flex Agility Solutions Group Flex Reliability Solutions Group Consumer Health Lifestyle CEC Industrial Automotive Devices Solutions • Generally 1 to 3 year product lifecycles • Generally 4 to 10+ year product lifecycles • Most products are non-regulate
Slide 17: Delivery model and value: Agility
Delivery model and value: Agility Flex Agility Flex Delivery Model Predominant Customer Solutions Needs • Optimized for any volume, mass • Flexible capacity for customization volume fluctuations • Efficient and flexible cost • Regionalized supply chain structure and manufacturing • Extremely agile –
Slide 18: Delivery model and value: Reliability
Delivery model and value: Reliability Flex Reliability Flex Delivery Model Predominant Customer Solutions Needs • Optimized for any volume, high mix • Domain expertise to products enable innovation/ synergistic solutions • Cost structure and investments that support • Complex multiyear ramps complex
Slide 19: Sharpening our differentiation
TECHNOLOGY Sharpening our differentiation • Engineering teams aligned to markets, with deep domain expertise in their respective industries • Roadmaps that extend our core competencies and redefine the categories we operate in • Product technology: Highly selective in the markets and domains we inve
Slide 20: Our full stack of capabilities make us a differentiated partner
Our full stack • Foresight into emerging technology across multiple Cross-Industry of capabilities categories / markets Synergies • Adapting innovations from cutting edge industries make us a to fast follower industries differentiated • Decades of accumulated know-how from Domain partnering with mar
Slide 21: Domain expertise leads to new opportunities
Domain expertise leads ELECTROMECHANICAL SOFTWARE/ FIRMWARE to new opportunities DESIGN MICRO HUMAN-MACHINE MOBILITY INTERFACE DESIGN RENEWABLES HOME HEALTH MONITORING Connectivity and IoT Autonomous, Electrified, and Shared Mobility Clean and Digital Sustainable HIGH Healthcare Energy PERFORMANCE D
Slide 22: Industry-leading capabilities and expertise in advanced manufacturing technologies
Industry-leading capabilities and expertise in advanced manufacturing technologies Advanced Automation & Real-Time Additive & Remote Digitization Robotics Supply Chain Manufacturing Simulation 22
Slide 23: Delivering with discipline and consistency
SYSTEMS Delivering with discipline and consistency • Launching the Flex Business System to drive common practices around five key areas – Solidifying a practice we have tested this year with proven results • Dedicated leadership for each key area, with process leadership and governance mechanisms •
Slide 24: Repeatable and reliable business system
Repeatable and reliable business system Contracts Pricing Launch Planning Consistency Reduced contract Quoting it right the Faster speed to Improved inventory From look and feel risks with clear first time, updating scale, with lower performance and to management terms and strict when customers’ ram
Slide 25: A new strategic framework to deliver superior returns
A new strategic framework to deliver superior returns Targeted growth New Vision, Mission, and Purpose and optimal mix in our end Markets markets Technology New organizational structure Driving efficiency to deliver the strategy Sharpening and productivity our with two focused differentiation Change
Slide 26: Our long-term financial framework
Our long-term financial framework Revenue Organic growth at or above GDP Growth Portfolio mix focused on longer cycle business Earnings Mid single digits adjusted operating margin Expansion 10%+ annual adjusted EPS growth Cash Disciplined investment levels Generation 80%+ adjusted FCF conversion Cap