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Sketch-to-scale Solutions
Investor Presentation
December 2016
1
Risks and non-GAAP disclosuresThis presentation contains forward-looking statements, which are based on current expectations and assumptions that are subject to risks and uncertainties and actual results could materially differ. Such information is subject to change and we undertake no obligation to update these forward-looking statements. For a discussion of the risks and uncertainties, see our most recent filings with the Securities and Exchange Commission, including our current, annual and quarterly reports.
If this presentation references historical non-GAAP financial measures, these measures are located on the “Investor Relations” section of our website, www.flextronics.com along with the required reconciliation to the most comparable GAAP financial measures.
The following business group acronyms will be used throughout this presentation:
Communications & Enterprise ComputeTelecom, Networking, Server & Storage, Security, Cloud Solutions.
Consumer Technologies GroupWearables, Fashion, Connected Living, Gaming, Mobile, PCs/Printers.
Industrial & Emerging IndustriesSemiconductor & Capital Equipment, Office Solutions, Household Industrial & Lifestyle, Industrial Automation & Kiosks, Energy & Metering, Lighting.
HRS High Reliability SolutionsMedical: Consumer Health, Digital Health, Disposables, Drug Delivery, Diagnostics, Life Sciences & Imaging Equipment.Automotive: Vehicle Electronics, Connectivity, Clean Technologies.
IEI CEC CTG
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Table of contents
Richer Business MixSketch-to-scaleWhy Flex?Flex is Ready / Strategically
Positionedto Win
Strategic M&A / Financial Update
Why Invest in Flex?
Strong Free Cash Flow
Shareholder Return
ROIC
Portfolio Evolution
Profit Growth & Earnings Power
Balanced Capital Structure
4-5
6
7
8
9
10-11
12
The World Has Changed
The Flex Advantage
Flex Platform
Megatrends
12 Industries
100+ Locations Globally
Innovation & Lab IX
Elementum
14
15
16
17
19
20
21-22
23
Innovation From Sketch-To-Scale
% of Sketch-To-Scale Revenue
Design-Enabled Manufacturing Growth
Silicon Valley Customer Innovation Center
Innovation Labs
Sketch-To-Scale Impact On HRS Business
Nike Partnership
25
26
27
28
29
30
31
2020 Revenue & Profit Growth
High Reliability Solutions (HRS)
Industrial & Emerging Industries (IEI)
Communications & Enterprise Compute (CEC)
Consumer Technologies Group (CTG)
33-34
35-41
42-45
46-48
49-53
M&A Transactions
NEXTracker
MCi
Wink
Farm Design
Latest Financial Update
IR Contact Info
55
56
57
58
59
60-64
65
Why Flex?
4
Why invest in Flex?
Evolving our portfolio to provide more predictable earnings, higher margins and meaningful earnings power
Strong sustainable free cash flow
Unwavering shareholder return commitment
1
2
3
5
Financial performance underscores successful evolution
665
751
792
FY14 FY15 FY16
Sustainable
$0.89
$1.08
$1.14
FY14 FY15 FY16
Profitable
Adjusted EPS
Resilient
Free Cash Flow Conversion1
Consistent
Free Cash Flow Returned
126%
87%
99%
FY14 FY15 FY16
68%
75%
66%
FY14 FY15 FY16
9% CAGR 11% CAGR $1.9B FCF generated $1.3B repurchased
Adjusted Operating Profit($M)
1. Free cash flow conversion defined as free cash flow / adjusted net income
(FY14 - 16) (FY14 - 16)(FY13 - 16)(FY13 - 16)
6
Strong sustainable free cash flow
Free Cash Flow Conversion 1
Free Cash Flow Yield 2
1. Free cash flow conversion defined as free cash flow / adjusted net income2. Free cash flow yield based on average market cap at fiscal year-end
Free Cash Flow($M)
680 701
554
639
FY13 FY14 FY15 FY16 FY17E
600 - 700
10%1 year 10%
3 year 10%
5 year 10%
100%1 year 99%
3 year 103%
5 year 99%
$3.2B to $3.3Bfor FY13 to FY17E
7
Unwavering shareholder return commitment
% of Free Cash Flow
Returned to Shareholders
76%
70%
66%1 yr
3 yrs
5 yrs
In the last 6 Years, we have repurchased…
~ $2.5 billion in stock ~ 335 million shares ~ 33% net shares outstanding
813
757 684
639 591
563 545
400
510
322
475
416 420
FY11 FY12 FY13 FY14 FY15 FY16
shares outstanding (millions)
Share Repurchase($M)
Committed to returning over 50% of annual free cash flow to shareholders
22
19
2224
22
FY12 FY13 FY14 FY15 FY16
8
Guided by our return on invested capital
Return on Invested Capital1(ROIC %)
AnnualQuarterly • Improving earnings efficiency
• Disciplined capital deployment
• Internal target threshold stands at 20%
• ROIC well above WACC
1. Return on Invested Capital (ROIC) is calculated by dividing the Company's last twelve months after-tax Non-GAAP operating income by the net invested capital asset base as of each date. After-tax non-GAAP operating income excludes charges for stock-based compensation expense and restructuring charges. The net invested capital asset base is defined as the sum of shareholders' equity and net debt averaged over the last five quarters.
22%Avg.23
22 22 22
20
Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17
9
Strategic portfolio evolution
Driving predictable earnings and margin expansion
FY16
19% 16%
29% 36%
35%19%
FY10
6%13%
42% 39%
FY20E
~45%
$4.5BHRS + IEI
revenue
$8.6BHRS + IEI
revenue
~$13.0BHRS + IEI
revenue
~2years
~4years
~6years
Estimated average product life cycleCTG CEC HRS IEI
~28%
~23%
~27%
~22%
FY16 Adjusted Operating
Target Operating Margin
Profit($M)
Margin Prior Range New Range
$295 7.6% 5 - 7% 6 - 9%
$158 3.4% 4 - 6% 4 - 6%
$265 3.0% 3 - 4% 2.5 - 3.5%
$164 2.3% 2 - 3% 2 - 4%
Corporateservices & other1 ($90)
$792 3.2%
10
Positioned for operating profit and margin expansion
HRS
IEI
CTG
CEC
1 Corporate services and other primarily includes corporate services costs that are not included in the assessment of the performance of each of the identified business group
CEC
HRSIEI
CTG
FY20E
>60%
TargetedOperating Profit Mix
Targeted 2020 delivers profit growth
11
Positioned to deliver meaningful earnings power
% Sketch-to-scale FY20E
Portfolio Evolution
Sketch-to-scale
~3%
10%+
12%+
Revenue Adj.
Operating
Profit
Adj. EPS
2016 - 2020 CAGR
Substantial earnings leverage
3x
4xRevenue mix
CEC
HRSIEI
CTG
FY20E
~45%
CEC CTG IEI HRS
~35%Total Flex
12
Balanced Capital Structure
Key Characteristics
• Solid liquidity• No significant near-term maturities
$1,537
$1,500
$525 $500 $700 $500 $600
Liquidity 2017 2018 2019 2020 2021 2022 2023 2024 2025
Significant Debt Maturities ($M) (Calendar Year)
Cash
Revolver
Total Liquidity$3,037
Term Loans LIBOR + 137.5bps
4.625% Notes
5% Notes 4.75% Notes$56 EURIBOR +100bps
Please refer to the appendix section of this presentation for current period reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP measures.
For all historical periods referenced in this presentation, refer to the Investor Relations section of our website.
• Low cost of debt ~3.5%• Strong credit metrics (Debt / Adj. EBITDA (LTM): 2.2x)
Investment Grade Rating: Moody’s, S&P, Fitch
Term Loans LIBOR + 137.5bps
The World Has Changed… Flex is Ready
13
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The world has changed
Increasedregionalization
Growth ofAsian OEMs
Faster productcycles
More disruptive products
New hardwareOEMs
GlobalCitizenship
Intelligence of ThingsTM
Supply chaincomplexity
Innovationon the rise
15
Flex is ready… the Flex advantage
$25Brevenue
50Msq. ft. of
manufacturing & services space
200,000employees
100sites in over 30 countries
2,500design
engineers
16
Flex Platform
Our company invests across three dimensions
17
Ready for megatrends affecting each business group
Automotive Medical
Communications Industrial Consumer
ZeroAccidents
ZeroAccidents
CarConnectivity
CarConnectivity
Zero Emissions
Zero Emissions
ImprovedCompliance
ImprovedCompliance
PatientCentricPatientCentric
SmartConnected
Solutions
SmartConnected
Solutions
Human Machine
Interfacing
Human Machine
Interfacing
Emerging Wireless
Connectivity
Emerging Wireless
Connectivity
Converged InfrastructureConverged Infrastructure
Smart EnergySmart Energy
FlexibilityFlexibilityConnected
LifestyleConnected
Lifestyle
Strategically Positioned to Win
18
19
Very diversified business across industries
Medical
$2Billion
$2Billion
Automotive
$2Billion
$2Billion
IndustrialGoods
$1Billion
$1Billion
Home Appliances
$1Billion
$1Billion
CapitalEquipment
$1Billion
$1Billion
Energy
$2Billion
$2Billion
Telecom
$3Billion
$3Billion
EnterpriseCompute
$2Billion
$2Billion
Wearables
$1Billion
$1Billion
ConnectedLiving
$1Billion
$1Billion
Mobile
$2Billion
$2Billion
Networking
$3Billion
$3Billion
Purposefully positioned in 100+ sites and 30 countries
Austin, TX ●●●●Dallas, TX ●●
Fort Worth, TX ●Houston, TX ●
Plano, TX ●
Milpitas, CA ●●●●Morgan Hill, CA ●
San Jose, CA ●San Carlos, CA ● Ashville, NC ●
Charlotte, NC ●Raleigh, NC ●●
Stuttgart, Germany ●
Althofen, Austria ●●
Columbia, SC ●
Northfield, MN ●
Aguascalientes, MX ●●
Guadalajara, MX ●●●
Tijuana, MX ●●
Manaus, Brazil ●●
Jaguariuna, Brazil ●Sorocaba, Brazil ●●
Budapest, Hungary ●Gyal, Hungary ●Pecs, Hungary ●Sarvar, Hungary ●●Tab, Hungary ●Zalaegerszeg, Hungary ●
Leitrim, Ireland ●Cork, Ireland ●
Limerick, Ireland ●●
Migdal Haemek, Israel ●●Ofakim, Israel ●Yavne, Israel ●
Lodz, Poland ●Tczew, Poland ●●
Timisoara, Romania ●●
Ronneby, Sweden ●●
Mukachevo, Ukraine ●
Bangalore, India ●Chennai, India ●●
Milan, Italy ●●Treviso, Italy ●Trieste, Italy ●
Valencia, CA ●
Memphis, TN ●
Louisville, KY ●
Dubai, UAE ●
Manchester, UK ●Swindon, UK ●
Istanbul, Turkey ●
Oostrum, Netherlands ●Venray, Netherlands ●
Brno, Czech Republic ●Pardubice, Czech Republic ●
Global Services
Design
Manufacturing
Overland Park, KS ●
Gushu (Shenzhen), China ●●Huang Tian (Shenzhen), China ●●Nanjing, China ●Shanghai, China ●●Shenzhen, China ●●Suzhou, China ●Wuzhong (Suzhou), China ●●●Zhuhai, China ●●
Changi, Singapore ●Joo Koon Singapore ●●Kallang, Singapore ●
Batam, Indonesia ●
Penang, Malaysia ●●Port of Tanjung Pelepas (Johor), Malaysia ●●Senai (Johor), Malaysia ●●Skudai (Johor), Malaysia ●
Delhi, India ●Mumbai, India ●
Taipei, Taiwan ●●
Ibaraki, Japan ●●
Chengdu, China ●●
Mechanicals
Zurich, Switzerland ●
Dalingshan (Dongguan), China ●Hong Kong, China ●●Qiaotou (Dongguan), China ●Atlanta, GA ●
Burlington, Canada ●Newmarket, Canada ●Ottawa, Canada ●Toronto, Canada ●
Coopersville, MI ●●Farmington Hills, MI ●
Tempe, AZ ●
Buffalo Grove, IL ●
Manchester, CT ●
Sonderborg, Denmark ●
Headquarters
Juarez, MX ●●●Reynosa, MX ●
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Innovation at Flex
Cultivateand accelerate
collective innovation
Developthe smart
components that enable intelligence
Identifyand leverage technology
across industries
Commercializerelevant product
solutions
To innovate is to do something that has never been done before
AutomotiveHealthcareIndustrial
Connected LivingConsumer Electronics
EnergyFitness/WellnessCommunications
Aerospace & Defense
ConsortiaInvestments
SuppliersOEMs
EmployeesCenters of Excellence
StartupsResearch Institutions
UniversitiesLabIX
Sensor ActuatorsHuman Machine Interface
ConnectivitySmart SoftwareBattery & Power
Flexible Technologies & Miniaturization
Security & Computing
DesignPrototyping
New Product IntroductionCertification
ManufacturingDistribution
Reverse LogisticsTax & Trade
22
Accelerating innovation with portfolio companies
Connected LivingDigital Health Smart Energy
Connected Transportation
Mobility / Cloud
Smart AutomationWearables
Biometricsmart clothing
3D augmented interactive reality platform
Wearable fitness tracking
Shared, interactive shopping list Women's health
device
Brain sensing headband
Ultrathin, flexible, rechargeable
batteries
Smart adapter to wirelessly control lights
Smart drones for transportation
Autonomous crime prevention robots
High-speed contactless data
connectivity
Low power Wi-Fi chip for wireless
peripherals
Miniaturized global navigation modules
Electro-adhesion technology
Force-sensitivetouch technology
Smartphones as dashboard cameras
Analytics for home & building automation
Landscape computing solutions for smart cities
Advanced adaptive irrigation system
Lab IX portfolio highlights
Breath quality measurement
23
Real-time solutions to improve decision making
Incubated in 2012 by Flex – Now a majority-owned subsidiary of Flex • Consolidated financial with Flex• Flex owns the majority of outstanding
equity and Board of Directors control
Board of Directors, Advisory Board and Investors include:• Lightspeed Venture Partners• Workday• Silverlake• Flex• Yahoo• LinkedIN
Over $60M in total funding
Powered by Elementum: mobile software for end-to-end supply chain management
Sketch-to-scale
24
24
Innovation from Sketch-to-scale
New Product Introduction
Active Tracking
Concepting
Manufacturing
Design & Engineering
Market Expansion
End of LifeDistribution & Logistics
IP Protection CertificationPrototyping
Reverse Logistics
26
Sketch-to-scale
3%
9%
5%
18%
CEC CTG IEI HRS
FY 2013
7%Total Flex
12%
27%
21%
30%
CEC CTG IEI HRS
FY 2016
21%Total Flex
CEC CTG IEI HRS
FY 2020E
~35%Total Flex
25-30%
35-40%
% of sketch-to-scale revenue
27
Design-enabled manufacturing growth
Mcor 3D printer
Pella home automation
Ford transmission
solenoids
Whirlpool display panel
Fossil smartwatch
Itron gas meter
Ciena 6500 platform
$1.6B
$3BFY16
FY15330+
400+FY16
FY15
>20% YoY design win growth
>85% YoY manufacturing pull-through increase
Flex e-inhaler
Sketch-to-scale delivers greater value
28
Enabling disruption with our innovative services
Manufacturing
• Scalable Manufacturing
• Procurement & Sourcing
Advanced Engineering & Robotics Labs
• Value Engineering Services• Manufacturing Technology
Innovation
Interconnect Technology Center
• Multek (PCBs, Flexible & Rigid)• Advanced Printed Circuits• Integrated Design Capabilities
Failure Analysis Labs & Mechanicals
• Materials Characterization
• Sheet Metal Manufacturing
System Integration
• Configure to Order
• Build to Order
New Product Introduction
• Prototype to Product Launch• 3D Printing (plastic)
Confidential Center
• Private & Secure Manufacturing Room
Lab IX
• Startup hardware Accelerator
• Business Scaling Resources
Global Services
• Forward & Reverse Logistics
• Vendor Managed Inventory
Innovation Labs & Design Center
• Technology Innovation & Engineering
• Design for ‘X’ Services• 3D Printing (metal)
Silicon Valley’s Customer Innovation Center
29
Flex Innovation Labs
Shared exploration of disruptive technologies across all industries
• Headquartered in the heart of Silicon Valley
• A new concept lab focused on technology ideation, prototyping and new co-innovation models
• World-class product, system and architecture expertise
• Environment designed to foster collaboration across Flex, our customers and partners
Innovation Labs: where sketch-to-scale starts
Innovation Workshops Concepting Product Design & Engineering
Minimum Viable ProductDesign Qualification
30
Sketch-to-scale impact on HRS business
Design related growth China & India expansion
FY11FY11
(HRS revenue)
Large deal growth
FY16FY16
FY16FY16FY11
2X
3X7%
18%
30%(% HRS revenue)
($25Mil+)
31
Revolutionary partnerships
• In 18 months, 20 inventions on the factory floor
• Fastest new Nike factory ramp,150 days from start to first ship
• On track to have meaningful revenue in FY18
• Enabling customization & regionalization
Richer Business Mix
32
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Structured to deliver profitable growth
Annual RevenueGrowth Target
Comments
10% +• Megatrends driving growth• Deep & broad global technical capabilities
10% +• Redefining Energy engagement model• Positioned to penetrate massive TAM across Industrials
- 5% to 0%• Navigating challenging industry dynamics• Maintaining market leading position across the board
3% to 5% • Success with ICE and Strategic customers• New industry growth vectors
HRS
IEI
CTG
CEC
Targeted 2020 revenue growth model
FY16 Adjusted Operating
Target Operating Margin
Profit($M)
Margin Prior Range New Range
$295 7.6% 5 - 7% 6 - 9%
$158 3.4% 4 - 6% 4 - 6%
$265 3.0% 3 - 4% 2.5 - 3.5%
$164 2.3% 2 - 3% 2 - 4%
Corporateservices & other1 ($90)
$792 3.2%
34
Positioned for operating profit and margin expansion
HRS
IEI
CTG
CEC
1 Corporate services and other primarily includes corporate services costs that are not included in the assessment of the performance of each of the identified business group
CEC
HRSIEI
CTG
FY20E
>60%
TargetedOperating Profit Mix
Targeted 2020 delivers profit growth
3,2753,557
3,899
FY14 FY15 FY16
35
High Reliability Solutions (HRS)
Revenue($M)
FY16
19% 16%
29% 36%
35%19%
FY10
6%13%
42% 39%
CTG CEC HRS IEI
36
HRS markets grow with predictability & longer life cycles
Automotive Medical Aerospace & Defense
16FDA regulated
sites
~$2BAuto segment
~$1.7BMedical segment
#1Industry*(Technology &
Revenue)
#1Industry*(Technology &
Revenue)
79%(Bookings
increase over FY14)
65+ Medical products
designed
60+manufacturing transfers
made
~9,000Auto employees
25+locations
15countries
* Compared to traditional competitors
Autonomousvehicles
13%2014-2024
Global revenue CAGR
$61BADAS
Market by 2024
$61BADAS
Market by 2024
Clean tech
28%2012-2022
Global volume CAGR
13MElectric
Cars by 2022
13MElectric
Cars by 2022
26% 2013-2020
Global volume CAGR
48MConnected
Cars by 2020
48MConnected
Cars by 2020
Connectivity
37
Automotive megatrends
139MX-by-Wire
Systemsby 2019
139MX-by-Wire
Systemsby 2019
Vehicleelectrification
15%2014-2021
Global volume CAGR
38
Automotive repositioned to focus on growth industries
Clean TechSmart Electronics Lighting
• Smart rearview camera• Connectivity & infotainment
products• Motion & power controls
• Center high mounted stop lights (CHMSL)
• Overhead consoles & ambient lighting
• LED driver modules• Flexible LED lighting
(Q-Prime)
• Power & signal distribution• Electrohydraulic controls• Power conversion, storage &
charging
Rising costs
5.2%2014-2018
Global expenseCAGR
$19THealthcareSpendingby 2018
$19THealthcareSpendingby 2018
6.1% 2013-2020
Global revenue CAGR
$14BDiabetesMarketby 2020
$14BDiabetesMarketby 2020
Chronic disease
39
Medical megatrends
$59BDigital Health by 2020
$59BDigital Health by 2020
Connected health
33%2015-2020
Global volume CAGR
40
Medical innovations in the connected world
Health Monitoring Drug Delivery Health Treatment
• DIVG delivery patches• Insulin pump patches• Electromechanical drug
delivery systems • Smart patches
• 3D motion sensors• Hearing aids• EEG/EMG devices• Electronic glasses• Wearable sensor patches • Electronic tattoos
• Artificial limbs• Smart pills• Bionic eye• Dental hearing systems• Smart implants
41
HRS continues to deliver
FY17 FY18 FY19 FY20 FY21
10%+
Revenue
FY17 FY18 FY19
Bookings
95%booked
93%booked
86%booked
3,788
4,4594,681
FY14 FY15 FY16
42
Industrial & Emerging Industries (IEI)
Revenue($M)
FY16
19% 16%
29% 36%
35%19%
FY10
6%13%
42% 39%
CTG CEC HRS IEI
43
Broad Industrial market and massive TAM
2015 Flex TAM
Industrial Home & Lifestyle
TAM: $170B
Agriculture
TAM: $35B
Capital Equipment
TAM: $175B
Lighting
TAM: $20B
Industrial Automation
TAM: $115B
Appliance
TAM: $170B
Flex Energy Solutions
TAM: $100B+
44
There is significant opportunity in solar and storage
1
4.4
4.7
10.6
16.3
21.7
41.3
Solar
Oil
Other
Nuclear
Hydroelectric
Natural Gas
Coal
Global Electricity Production in 2015
100
2
4
6
8
10
12
14
CO2 Emissions in 2015 from Electricity and Heat GenerationBillion tonnes CO2
Source: International Energy Agency (IEA), SolarPower Europe, GreenTech Media (GTM), Flex Estimates
Global market size in $B, CAGR in %
Solar & Storage Growth
93
5
9
130
195
35
Storage
Solar
98
139
230
2015 2020 2026
+8%
Energy source as a %
Oil
Natural Gas
Coal
45
Flex Energy solutions
Supporting broad marketsUtility CommunityDistributed Generation Residential
Solar Tracking SystemsEnergy Storage Analytics
FY16
19% 16%
29% 36%
35%19%
FY10
6%13%
42% 39%
CTG CEC HRS IEI
46
Communications & Enterprise Compute (CEC)
Revenue($M)
9,6889,191 8,842
FY14 FY15 FY16
47
CEC leading market share position
Wireless4G/5G
SDN Optical100G/400G
ConvergedStorage
Switching &IP Routing
TelecomNo. 1 WW
NetworkingNo. 1 WW
Enterprise ComputeNo. 1 WW
Security Appliance
Examples of established customers
48
Strategy for growth
• Expansion of new market segment
• Open Source & Software defined infrastructure
• Expand customer base
• Converged Infrastructure
• Maintain leadership position
• Enable transition via hybrid Core OEM
Solution Providers
Cloud
Disruptive OEM Solutions
49
Consumer Technologies Group (CTG)
Revenue($M)
9,3588,940
6,998
FY14 FY15 FY16
FY16
19% 16%
29% 36%
35%19%
FY10
6%13%
42% 39%
CTG CEC HRS IEI
50
CTG at a glance
• FY 16 quick stats:
• $1.57B new bookings
• 55 new customers
• ~$1B in Wearables revenue
• >$0.5B in new Connected Home revenue
• 7% YoY Sketch-to-scale growth
• Opened SF Invention Lab
• Announced Nike business
• Acquired Wink
1,565
2,011 2,058
1,364
Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16
Revenue - $7.0BTotal CTG($M)
978
1,362 1,407
899
Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16
Revenue - $4.6B Excluding all Lenovo Motorola Smartphones($M)
51
Lenovo Motorola smartphone business update
Lenovo Motorola revenue
• Significant revenue headwind removed
• Cost to close China Lenovo Motorola operations within our estimates
• Eliminated our China Lenovo Motorola exposure
• Strong relationship in Brazil and India
21,836 22,067
4,312 2,352
FY15 FY16
26,14824,419
Total FlexRevenue ($M)
CTGRevenue ($M)
4,628 4,646
4,312
2,352
FY15 FY16
8,940
6,998
52
Developing growth vectors
Fashion
ConnectedHome
ConsumerHealth
New Generation Products
Digital SportNike
• Smart Appliances• Home Hubs• Media Devices• Connected Audio
• Connected Jewelry• Bags with Power• Smart Accessories
• Advanced Wearables• Telehealth• Personalized Monitoring
• Drones• Virtual & Augmented Reality• Telematics
• Activity Trackers• Smart Helmets• Smart Watches• Athletic Apparel
• Shoes
53
Investing in new business models
+5%
+2%
3-4%
42
6
7
113%
-34%
48%
FY16 Achieved
STRATEGIC
CORE
ICE1
Operating Profit
Customers Added
Revenue Growth
1 ICE stands for Innovative, Connected, & Emerging Technologies
Strategic M&A
54
1 Reflects M&A transactions completed from FY13 to FY16 (excludes OEM asset acquisitions)55
Targeted M&A strategy aligned with portfolio evolution
$25-$100M
82
<$25M
Target capabilities
Strategic customers
Longer product lifecycles
EPS accretiveBarriers to
entryHigher
margins
Key Selection Criteria
# of AcquisitionsBased on purchase price 1
3
>$100M
% of M&A spend by business group 1
72%
HRS27%
IEI
1%
CTG
56
Expanded solar offerings through strategic acquisitions
Leader in predictive modeling software and machine-learning technologies
• Provides the ability to do advanced diagnostics and real-time control of solar tracking systems
Smart, connected, and most efficient solar panel tracker technology on market
• Globally recognized for delivering the most advanced single axis PV trackers for dozens of projects across five continents
• NEXTracker’s technology allows a 120-degree tracking range that yields 20-40% more energy than a non-tracker system
• Globally, trackers are only 15% of total installed base of utility grade solar installations, and we think it will grow to 25% in the next three years
• The acquisition augments the Flex Energy business and contribute to its more than $1 billion in sales, and is accretive to Flex's growth, margin, EPS and cash flow generation
57
Smart investment to extend leadership in Smart Tech
• Customer and Global Expansion
• Accelerates our position with strategic OEM’s
• #1 market share leader in China
• Specified by the OEM’s
• Extends Flex’s market leadership in Automotive
• #1 global market leader in exterior mirror motion controls
• Extends existing $100M motion control business
• “Smart” mirror embedded with electronics
MCi is a leading global manufacturer of glass and powerfold mirror actuators
58
Doubling down on the Intelligence of Things
• Smart Home platform connecting devices seamlessly and globally
• Wink is a connected home IoT software that connects the world’s greatest brands together
• 30+ OEM partners, most of which are Flex customers
• Synergy for Flex to drive new and exciting relationships
400K+ users & 1.7M+ devicesNew home added every 2 minutes
59
Shaping the future of healthcare with Farm Design
Human Factors Engineering (HFE)1 & Design CompanySupports the Flex sketch-to-scale strategy
• 40+ years in operation
• New Hampshire facilities and Cleveland Clinic - desirable geographic proximity for Northeast-based customers
• Over 300 utility & design patents
• Increases Flex HFE capabilities - HFE is now a FDA requirement and many customers do not have the expertise
• Design expertise in orthopaedics, cardiology, med-surgery, and diagnostics
• 50+ Employees with medical HFE expertise
1. Human Factors Engineering (HFE): Understanding how people interact with technology and studying how user interface design affects the interactions people have with technology is the focus of human factors engineering (HFE) and usability engineering (UE). - FDA
trained researchers • human factor engineers • generative research •formative usability testing • usability validation testing • domestic and international experience
Latest Financial UpdateResults for Q4 Fiscal 2016Earnings Announcement: April 28, 2016
60
61
Quarterly Financial Highlights
23% 22% 22% 22% 20%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Return on Invested Capital(ROIC %)
$0.27
$0.35
$0.29 $0.27 $0.28
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Adjusted Earnings Per Share (EPS)
6,317 6,763
5,773 5,877 6,009
6.3%
6.7%
7.1%6.9% 6.9%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Adj. Gross Margin
Adjusted Operating Income ($M)
Revenue & Adjusted Gross Margin($M)
196 236
200 190 197
3.1%
3.5% 3.5%
3.2% 3.3%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Adj. Operating Margin
Please refer to the appendix section of this presentation for current period reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP measures.
For all historical periods referenced in this presentation, refer to the Investor Relations section of our website.
Q2 FY17(September 30, 2016)
Target AdjustedOperating Margin Range
($M)
Rev$ OP$(adj.)
OP%(adj.)
$2,102 $53 2.5%Challenging environment but continue to operate within the target range.
$1,665 $55 3.3% Continued portfolio shift to a richer business mix.
$1,243 $37 3.0%Temporary margin contraction due to impacts from SunEdison’s bankruptcy.
$999 $79 7.9%Solid execution, strong sustainable margins while expanding capabilities.
Corporate Services &
Other1-- ($27) --
Total $6,009 $197 3.3%
6
4
2
2.5
9
6
4
3.5
Operating Performance by Business Group
1. Corporate services and other: corporate service costs that are not included in the assessment of the performance of each of the identified business groups.
3.3%
2.5%
3.0%
7.9%
62Please refer to the appendix section of this presentation for current period reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP measures.
For all historical periods referenced in this presentation, refer to the Investor Relations section of our website.
CEC
CTG
IEI
HRS
35%
20%17%
28%
23%
17%
35%
25%
63
Q2 FY2017 Highlights and Key Trends
143 158
114 121
144
13.0%9.3%
9.7%8.3%
7.3%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
FCF Yield
Free Cash Flow($M)
142
90 89 95 90
557 551 545 546 541
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16
Shares Outstanding
Share Repurchases($M)
HRS
IEI
CTG CEC
Revenue Mix
37%
Strong Cash Flow
Continued Portfolio Evolution
Capital Return Commitment
Adj. Op. Profit
Mix
FCF yield is calculated based on (LTM free cash flow/outstanding shares at quarter-end) / share price at quarter-end.
Please refer to the appendix section of this presentation for current period reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP measures. For all historical periods referenced in this presentation, refer to the Investor Relations section of our website.
52%
CTGCEC
IEIHRS
35%
20%17%
28%35%
18%15%
32%
64
Revenue by Business Group
Communications & Enterprise ComputeTelecom, Networking, Server & Storage, Storage & Security Appliance, Converged Infrastructure, Software Defined Product Solutions.
Consumer Technologies GroupWearables, Fashion, Connected Living, Gaming, Mobile, PCs/Printers.
Industrial & Emerging IndustriesSemiconductor & Capital Equipment, Office Solutions, Household Industrial & Lifestyle, Industrial Automation & Kiosks, Energy & Metering, Lighting.
High Reliability SolutionsMedical: Consumer Health, Digital Health, Disposables, Drug Delivery, Diagnostics, Life Sciences & Imaging Equipment.Automotive: Vehicle Electronics, Connectivity, Clean Technologies.
Sep2015
33%
HRS IEI
CTG CEC
HRS IEI
CTG CECSep2016
37%
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16E($M) $ $ $ $ $ Q/Q % Y/Y % Outlook (Q/Q)
CEC 2,205 2,469 2,201 2,196 2,102 (4%) (5%) Stable
CTG 2,011 2,058 1,364 1,314 1,665 27% (17%) Up 10% - 15%
IEI 1,146 1,214 1,190 1,289 1,243 (4%) 8% Stable
HRS 955 1,022 1,018 1,078 999 (7%) 5% Stable
Total Revenue $6,317 $6,763 $5,773 $5,877 $6,009 2% (5%)
65
Q3 FY2017 Guidance – December 2016
GAAP Income Before Income Taxes $110 - $140 million
GAAP Earnings Per Share $0.18 - $0.22
Other Information:
Interest & Other Expense ~$25 million
Adjusted Income Tax Rate 8.0% to 10.0%
WASO ~546 million shares
($M, except per share amounts)
$6,000 - $6,400Revenue
$205 - $235Adjusted Operating Income
$0.31 - $0.35Adjusted Earnings Per Share
»
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Creating a smarter, more connected world
For more information contact:
Kevin Kessel
VP, Investor Relations
(408) 576 - 7985
Or visit us at investors.flextronics.com
Mary Lee
Director, Investor Relations
(408) 576 - 5167
Katherine Chen
Analyst, Investor Relations
(408) 577 - 4037
