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HIGH VELOCITY SOLUTIONSexecuting at the speed of innovation
Mike Dennison, PresidentMay, 2012
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High Velocity Solutions
A Refined Strategy to Win in a Major Market Segment
HVS Business Plan
Diversified customer mix
Predictable financial results
Sustainable profit growth
Differentiated/comprehensive solutions
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“Cheaper in China”
• Standard solutions • Many players, few winners• Large scale, low profit
Differentiated Value
• E2E Services• Verticals• Regional manufacturing• Engineering services
Balancing the Portfolio Takes Business Intelligence
Ongoing ProfitDecline
FlexMarginGrowth
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High Velocity (HVS) Key Facts
Key Facts about HVSKey Facts about HVS
Industrial & Emerging
~15%
Industrial & Emerging
~15%
High Velocity~30%
High Velocity~30%
Flextronics Business Group
FY13E
• Fiscal 2012 Revenue: $10B, excluding ODM PC• Scale: Targeted solutions, backed by the whole Flex footprint• Capabilities: Services that create value• Customer Base: 50+ customers• Industry Ranking: #4…Market share is not the objective
• Fiscal 2012 Revenue: $10B, excluding ODM PC• Scale: Targeted solutions, backed by the whole Flex footprint• Capabilities: Services that create value• Customer Base: 50+ customers• Industry Ranking: #4…Market share is not the objective
HVS Segments - FY13EHVS Segments - FY13E
~50%
~23%
~27%
Consumer
Computing
Mobility
Integrated Network Solutions~45%
Integrated Network Solutions~45%
High Reliability
~10%
High Reliability
~10%
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Driving Positive Changes in Portfolio and Services
Significant Improvement, Especially Between FY12 and FY13Significant Improvement, Especially Between FY12 and FY13
90%
7%
3%0%
70%
15%
5% 10%
50%
25%
8%
17%
FY07 FY12 FY13E
Assembly Mechanical ServicesMultek/Power
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High Velocity Solutions Highlights FY12
$9,518
$11,921 $11,564
FY10 FY11 FY12 FY13E
(35)% – (40)%
FY11-FY12 -3% yoy growth
FY12 operating margins below expectations
Multiple new customers Wins
Efficient exit of ODM and reduction in RIM
We’ll grow 5-10% a year going forward
FY11-FY12 -3% yoy growth
FY12 operating margins below expectations
Multiple new customers Wins
Efficient exit of ODM and reduction in RIM
We’ll grow 5-10% a year going forward
Revenue Outlook ($M)Revenue Outlook ($M) Highlights FY12Highlights FY12
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HVS: A Broad Product PortfolioM
obileFixed
Computing Consumer
End Devices End Devices
Home Access
Gateway Equipment
Connectivity Devices
Cable Modem
Gateways
Ethernet Access Controller
Hotspot Femtocell
Set Top Box Wireless Router
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The HVS Market is Expanding & Evolving
Trends Driving HVS Outsourcing Emerging market growth
Speed to market
Pace of innovation
Big brands enter hardware
Product/market convergence
Key Supplier Selection CriteriaProduct launch services
Global management system
Early engineering support
After market services
Total cost optimization
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Going Beyond the Historical Customer
Heart rate monitors to increase from 11M to 17.7M
Sports technology to double from 3.5M to over 8+M
Other smart devices increasing from 1.3M to 20M+
Example- Wearable “smart” devices geared for growth 2011- 2015
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Full Service Offering Driving Speed to MarketCONCEPT DESIGN MANUFACTURING DELIVERY & REPAIR
SERVICES
Cus
tom
erFl
extr
onic
s H
VS
Unique Customized Service Solutions
Mechanical & Technology Services
& Solutions
Global Manufacturing Services
Pre-ManufacturingEngineering Services
Leveraging the Power of Flextronics
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We Become the Entire Supply Chain
Commodity Supplier
Low Cost Assembly(High volume low mix)
Early Engagement
Sustainable Capabilities
Value Added Services/Components
Customize to Unique Needs
Mar
gin
Value
Distribution & SMI
Technology Development
NPIServices
Engineering & Supply Chain Support
FLEX HVS
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Developing solutions as fast as they are necessary…
Innovative Mechanical and Technical Services
High Value Technical Support • Integrated mechanical solutions• Product design support • Assembly process technology
Addressing Critical Factors• Innovation creates new requirements• Early technology evaluation• Supporting consumer success
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Silicon Valley- Product Development and Launch Center
Pre-Manufacturing Engineering Services
Early Engagement Services• World class engineering• Optimizing NPI for manufacturing • Supply chain development
Addressing Critical Factors • Life cycles are shortening• Need for high secrecy• Efficient transition to manufacturing
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Product Completion Center- Example
2009 – Project starts
2010 – Excellent Serviceability Award received
2012- Zero defects in 18 months
2011 – Expand service scope to include all Products in Europe
2012 – Quality Award received for “Best In Class” Operations
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“Win with the winners” – focus on top tier and high potential customers
Leverage Flextronics’ overall capabilities and vertical offerings to create sustainable & predictable growth
Target customer opportunities with engineering support and service solutions which drive differentiated value
Exit non productive business and grow competence and credibility in new product and market areas
Our Strategy to WIN