sketch-to-scale supply chain solutions · global citizenship intelligence of things tm supply chain...

Sketch-to-scale supply chain solutions

Kevin Kessel, VP, Investor Relations

May 26, 2016

1

Risks and Non-GAAP Disclosures

This 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 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.

What makes unique?

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3

The Flex advantage

$25Brevenue

50Msq. ft. of

manufacturing

& services space

200,000employees

100sites in over

30 countries

2,500design

engineers

4

The world has changed

Increased

regionalizationGrowth of

Asian OEMs

Faster product

cycles

More disruptive

productsNew hardware

OEMsGlobal

Citizenship

Intelligence of

ThingsTM

Supply chain

complexity

Innovation

on the rise

5

The Flex Platform is uniquely positioned to address change

Our company invests across three dimensions

6

Unique view across industries & technologies

Medical

$2Billion

Automotive

$2Billion

Industrial

Goods

$1Billion

Home

Appliances

$1Billion

Capital

Equipment

$1Billion

Energy

$2Billion

Telecom

$3Billion

Enterprise

Compute

$2Billion

Wearables

$1Billion

Connected

Living

$1Billion

Mobile

$2Billion

Networking

$3Billion

7

Flex is uniquely structured to enable innovation

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

Automotive

Healthcare

Industrial

Connected Living

Consumer Electronics

Energy

Fitness/Wellness

Communications

Aerospace & Defense

Consortia

Investments

Suppliers

OEMs

Employees

Centers of Excellence

Startups

Research Institutions

Universities

LabIX

Sensor Actuators

Human Machine Interface

Connectivity

Smart Software

Battery & Power

Flexible Technologies &

Miniaturization

Security & Computing

Design

Prototyping

New Product Introduction

Certification

Manufacturing

Distribution

Reverse Logistics

Tax & Trade

Why Flex?

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Why invest in Flex?

Evolving our portfolio to provide more predictable earnings and higher margin

Positioned to deliver meaningful earnings power

Strong sustainable free cash flow

Unwavering shareholder return commitment

1

2

3

4

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 cycle

CTG CEC HRS IEI10

~28%

~23%

~27%

~22%

1

Target Operating Margin

Annual Revenue

Growth Target

Prior Range New Range

10% + 5 - 7% 6 - 9%

10% + 4 - 6% 4 - 6%

- 5% to 0% 3 - 4% 2.5 - 3.5%

3% to 5% 2 - 3% 2 - 4%

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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%

Targeted

Operating Profit Mix

Targeted 2020 delivers profit growth

1

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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

2

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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 income

2. 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

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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

4

What do the results of our strategy look like?

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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)

Structurally & strategically aligned

to deliver shareholder value

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For more information contact:

Kevin Kessel

VP, Investor Relations

kevin.kessel@flextronics.com

(408) 576 - 7985

Or visit us at investors.flextronics.com

Mary Lee

Sr. Manager, Investor Relations

mary.lee@flextronics.com

(408) 576 - 5167