fy19 earnings & investor briefing...core operating income (non-gaap)1 $255 $246 $864 $877 core...
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2020 FOURTH QUARTER EARNINGS & INVESTOR BRIEFING
September 24, 2020
FORWARD LOOKING STATEMENT
2
Forward Looking Statements: This presentation contains forward-looking statements, including those regarding our anticipated financial results for the
fourth quarter and fiscal year 2020; our guidance for future financial performance in our first quarter of fiscal year 2021 (including, net revenue, segment
revenue, U.S. GAAP operating income, U.S. GAAP diluted earnings per share, core operating income (Non-GAAP), core diluted earnings per share (Non-
GAAP), net interest expense, and core tax rate and the components of each); our guidance for future financial performance in full fiscal year 2021
(including, net revenue, segment revenue, core operating margin, segment core margin, core earnings per share (Non-GAAP), adjusted free cash flow, free
cash flow, net capital expenditures, core EBITDA, and the components and drivers of each); and our outlook for end market revenue and core operating
margin. The statements in this presentation are based on current expectations, forecasts and assumptions involving risks and uncertainties that could
cause actual outcomes and results to differ materially from our current expectations. Such factors include, but are not limited to: our determination as we
finalize our financial results for the fourth quarter and fiscal year 2020 that our financial results and conditions differ from our current preliminary
unaudited numbers set forth herein; the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain;
managing growth effectively; our dependence on a limited number of customers; competitive challenges affecting our customers; managing rapid declines
or increases in customer demand and other related customer challenges that may occur; changes in technology; our ability to introduce new business
models or programs requiring implementation of new competencies; competition; transportation issues; our ability to maintain our engineering,
technological and manufacturing expertise; retaining key personnel; our ability to purchase components efficiently and reliance on a limited number of
suppliers for critical components; risks associated with international sales and operations; our ability to achieve expected profitability from acquisitions;
risk arising from our restructuring activities; issues involving our information systems, including security issues; regulatory risks; financial and market risks;
and adverse changes in political conditions, in the U.S. and internationally, including, among others, adverse changes in tax laws and rates and our ability to
estimate and manage their impact. Additional factors that could cause such differences can be found in our Annual Report on Form 10-K for the fiscal year
ended August 31, 2019 and our other filings with the Securities and Exchange Commission. We assume no obligation to update these forward-looking
statements.
2020 FOURTH QUARTER EARNINGS
Mike Dastoor
September 24, 2020
1 See U.S. GAAP to non-GAAP reconciliation in appendix.
THREE MONTHS ENDED
AUGUST 31,
FISCAL YEAR ENDED
AUGUST 31,
2020 2019 2020 2019
Net revenue $7,300 $6,573 $27,266 $25,282
U.S. GAAP operating income $197 $190 $500 $701
U.S. GAAP net income $68 $53 $54 $287
U.S. GAAP diluted earnings per share $0.44 $0.34 $0.35 $1.81
Core operating income (non-GAAP)1 $255 $246 $864 $877
Core earnings (non-GAAP)1 $151 $138 $450 $473
Core diluted earnings per share (non-GAAP)1 $0.98 $0.88 $2.90 $2.98
(In millions, except for per share data)
Fourth Quarter and Fiscal Year 2020Income Highlights
4
Fourth QuarterSegment Results
5
DIVERSIFIED MANUFACTURING SERVICES (DMS)
▪ Net Revenue Increase of 17%
▪ Core margin* (non-GAAP) of 3.5%
ELECTRONICS MANUFACTURING SERVICES (EMS)
▪ Net Revenue Increase of 8%
▪ Core margin* (non-GAAP) of 3.5%
TOTAL COMPANY
▪ Net Revenue Increase of 11%
▪ Core margin* (non-GAAP) of 3.5%
DMS
39%
EMS
61%
$7.3BREVENUE
* Core margin defined as core operating income divided by net revenue
FY20Segment Results
DIVERSIFIED MANUFACTURING SERVICES (DMS)
▪ Net Revenue Increase of 8%
▪ Core margin* (non-GAAP) of 3.9%
ELECTRONICS MANUFACTURING SERVICES (EMS)
▪ Net Revenue Increase of 8%
▪ Core margin* (non-GAAP) of 2.7%
TOTAL COMPANY
▪ Net Revenue Increase of 8%
▪ Core margin* (non-GAAP) of 3.2%
DMS
39%
EMS
61%
$27.3BREVENUE
* Core margin defined as core operating income divided by net revenue
6
Cash Flow Highlights
7
1 See U.S. GAAP to non-GAAP reconciliation in appendix and U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
FISCAL YEAR ENDED
AUGUST 31,
2020
Cash flow from operations $1,257
Net capital expenditures1 $796
Adjusted Free cash flow (non-GAAP)1 $461
Core EBITDA (non-GAAP)1 $1,603
(In millions)
Business Update
Mark Mondello
September 24, 2020
9
THANK YOU for being your True SelfWe all have a voice that is:
Honored
Empowered
Authentic
Respected
Deserving
Leadership ATTENTION
10
Our Approach Our Portfolio Our Outlook
Our ApproachCreating a more Diverse & Inclusive Jabil
ROOTED in Purpose
• Aligned with our Core Values
• Critical to Business Performance
INTENTIONAL in Action
• Employing Diverse Talent
• Advocate for Human Rights
ACCOUNTABLE for Progress
• D&I Council
• Dashboards & Benchmarking
11
Our ApproachCreating a more Sustainable Jabil
Employee Volunteers, Giving Back
and Making a Difference
75,000 hours
Greenhouse gas emission reduction
25% Reduction by 2025
Additional ESG Focus Areas
Water Usage
Supply Chain
United Nations
Sustainable Development alignment
12
Safety
Hazardous Waste
Our PortfolioEnd-Markets
13
1 As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.
Mobility
DIVERSIFIED MANUFACTURING ELECTRONICS MANUFACTURING
$13.2
Healthcare & Packaging
Automotive & Transport
Total Revenue
Core Operating Margin 3.7%
$14.1
Digital Print & Retail
Networking & Storage
Total Revenue
Core Operating Margin 2.7%
Industrial & Semi-Cap$1.7
$4.2
$3.3
$2.3
$2.8
5G, Wireless & Cloud $5.5
FY201FY201$ in billions $ in billions
$14.0
4.5%
$1.9
$4.8
$3.6
FY21E
$12.5
3.5%
$2.3
$2.2
$4.5
FY21E
$3.5 $3.5
Connected Devices $4.0 $3.7*
* Cloud transitioning to a consignment model
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
14
DIVERSIFIED MANUFACTURING
Mobility
Connected
DevicesAutomotive
& Transport
Healthcare
& Packaging
Our PortfolioDMS Segment with Strong Margins
DMS DMS Pedigree and Construct
• Product Validation & Regulated Environments
• Advanced Material Sciences and Mechanics
• Margin Expansion and Reliable Cash Flows
FY21 Financial Plan
• Revenue: ~$14 Billion
• Core Margin: ~4.5%
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
15
Networking &
Storage
5G, Wireless &
Cloud
Industrial &
Semi-Cap
Digital Print &
Retail
EMS Pedigree and Construct
• Standardized Manufacturing / IT Solutions
• Enduring End-markets
• Strong Cash Flows and Stable Margins
Our PortfolioEMS Segment with Strong Cash Flows
EMS
FY21 Financial Plan
• Revenue: ~$12.5 Billion
• Core Margin: ~3.5%
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
16
BILLION
~$26.5
NET REVENUE CORE OP MARGIN
4.0%
FREE CASH FLOW
$600+MILLION
$4.00
CORE EPS
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
MANAGEMENT’S OUTLOOK FOR FY21
Our OutlookDelivering a credible Financial Plan
17
Our OutlookDerived with Harmonious Collaboration
18
Our OutlookGrounded by a Straight-forward Strategy
✓ Ensure our Business mix remains well Diversified
✓ Obsess over our Customers while leading with Engineering
✓ Drive Growth through collaborative sharing of Capabilities across the Enterprise
✓ Continue to contour our Portfolio for Margin expansion
✓ Deliver reliable Cash flows by leveraging our exposure to varied End-Markets
19
THANK YOU for being your True SelfWe all have a voice that is:
Honored
Empowered
Authentic
Respected
Deserving
Financial Update
Mike Dastoor
September 24, 2020
Financial Priorities
21
ALIGNED & FOCUSED ON DRIVING LONG-TERM VALUE CREATION
GENERATE
STRONG CASH FLOWS
EXPANDOPERATING MARGINS
INCREASE
EARNINGS PER SHARE
Our PortfolioEnd-Markets
22
1 As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.
Mobility
DIVERSIFIED MANUFACTURING ELECTRONICS MANUFACTURING
$13.2
Healthcare & Packaging
Automotive & Transport
Total Revenue
Core Operating Margin 3.7%
$14.1
Digital Print & Retail
Networking & Storage
Total Revenue
Core Operating Margin 2.7%
Industrial & Semi-Cap$1.7
$4.2
$3.3
$2.3
$2.8
5G, Wireless & Cloud $5.5
FY201FY201$ in billions $ in billions
$14.0
4.5%
$1.9
$4.8
$3.6
FY21E
$12.5
3.5%
$2.3
$2.2
$4.5
FY21E
$3.5 $3.5
Connected Devices $4.0 $3.7*
* Cloud transitioning to a consignment model
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
Positioned to DeliverOperating Margin Expansion
23
Drivers of
Y/Y Margin Expansion
3.5%3.2%
4.0%
FY19 FY20 FY21E
Core Operating
Margin
1. Improved business mix
2. Improved efficiency on lower cost
structure
3. Lower COVID-related costs
($ in millions)
See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/
FY21Disciplined Investment
24See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/
FY21 Net Capex($ millions)
Net Capex FY21
Maintenance Investment $550
Growth Investment $250
Company Total $800
FY21EBITDA & Free Cash Flow Generation
See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/ 25
$1.6 $1.6
$1.8
FY19 FY20 FY21E
$503 $461
$600
FY19 FY20 FY21E
Adjusted FCF ($ millions)
CORE EBITDA($ billions)
Drivers of Future
Free Cash Flow
1. Earnings expansion
2. Working capital efficiencies
3. Disciplined investment
+
Capital Allocation Framework
26
10%
VALUE CREATION FOR JABIL SHAREHOLDERS
Cash flow from operations
Free Cash Flow
Share Repurchases &
Dividends
~ 60%
Debt Optimization
& M&A
~ 40%
Net Capex
~ 60%
First Quarter FY21Guidance
27
EMS
Segment Revenue Guidance Q1 FY201 Q1 FY21E1 YoY Change
▪ Diversified Manufacturing Services $3.75B $3.8B Increase 1%
▪ Electronics Manufacturing Services $3.76B $3.2B Decrease 15%
Consolidated Guidance Q1 FY21E
Net revenue $6.7B - $7.3B
U.S. GAAP operating income $238M - $283M
U.S. GAAP diluted earnings per share $0.79 - $1.02
Core operating income (non-GAAP)2 $295M - $335M
Net interest expense3 $47M
Core tax rate (non-GAAP)4 26% to 28%
Core diluted earnings per share (non-GAAP)2 $1.15 - $1.35
1 As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.2 See U.S. GAAP to non-GAAP reconciliation on Form-8K filed on September 24, 2020.3 Net interest expense = interest expense + loss on sale of AR - interest income 4 Core tax rate excludes the tax impacts related to amortization of intangibles, stock-based compensation expense and related charges, restructuring,
severance and related charges and acquisition and integration charges.
28
BILLION
~$26.5
NET REVENUE CORE OP MARGIN
4.0%
FREE CASH FLOW
$600+MILLION
$4.00
CORE EPS
See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/
MANAGEMENT’S OUTLOOK FOR FY21
Our OutlookDelivering a credible Financial Plan
MARK MONDELLOCHIEF EXECUTIVE OFFICER
MIKE DASTOORCHIEF FINANCIAL OFFICER
APPENDIX GAAP to Non-GAAP Reconciliations
31
August 31, 2020 August 31, 2019 August 31, 2020 August 31, 2019Operating income (U.S. GAAP) 197,053$ 189,745$ 499,846$ 701,356$ Amortization of intangibles 12,649 8,890 55,544 31,923 Stock-based compensation expense and related charges 20,870 13,894 83,084 61,346 Restructuring, severance and related charges 12,581 9,732 156,586 25,914 Distressed customer charge - 6,235 14,963 6,235 Net periodic benefit cost 8,680 - 16,078 - Business interruption and impairment charges, net 1,211 - 5,785 (2,860) Acquisition and integration charges 2,162 17,631 32,167 52,697 Adjustments to operating income 58,153 56,382 364,207 175,255 Core operating income (Non-GAAP) 255,206$ 246,127$ 864,053$ 876,611$ - - #REF!
Core operating income (Non-GAAP) 255,206$ 246,127$ 864,053$ 876,611$ Depreciation expense 181,240 187,990 739,038 739,910 Core EBITDA (Non-GAAP) 436,446$ 434,117$ 1,603,091$ 1,616,521$
Net income attributable to the Company (U.S. GAAP) 67,731$ 52,675$ 53,912$ 287,111$ Adjustments to operating income 58,153 56,382 364,207 175,255 Loss on securities 36,420 29,632 48,625 29,632 Net periodic benefit cost (8,680) - (16,078) - Adjustment for taxes (2,259) (796) (1,093) (18,633)
151,365$ 137,893$ 449,573$ 473,365$ - -
Diluted earnings per share (U.S. GAAP) 0.44$ 0.34$ 0.35$ 1.81$ -$ 0Diluted core earnings per share (Non-GAAP) 0.98$ 0.88$ 2.90$ 2.98$ Diluted weighted average shares outstanding (U.S. GAAP & Non-GAAP) 154,453 156,981 155,274 158,647
JABIL INC. AND SUBSIDIARIESOPERATING INCOME, EBITDA and NET INCOME NON-GAAP RECONCILIATION
(In thousands, except for per share data)(Unaudited)
Three months ended Fiscal year ended
Core earnings (Non-GAAP)
32
FY20 Revenue as Recast(1)
Diversified Manufacturing Electronics Manufacturing
$ in billions
Fiscal year
ended $ in billions
Fiscal year
ended
November
30, 2019
February
29, 2020
May 31,
2020
August 31,
2020
August 31,
2020
November
30, 2019
February
29, 2020
May 31,
2020
August 31,
2020
August 31,
2020
Total Revenue $3.7 $2.9 $3.0 $3.6 $13.2 Total Revenue $3.8 $3.2 $3.4 $3.7 $14.1
Core Operatng
Margin 5.0% 3.0% 2.5% 3.9% 3.7%
Core Operatng
Margin 2.4% 2.3% 2.9% 3.1% 2.7%
(1) As of September 1, 2020, certain customers have been realigned within our reporting segments. Beginning in fiscal year 2021, customers within the automotive and transportation and
smart home and appliances industries will be presented and moved from the EMS segment to the DMS segment.
Three months ended Three months ended