Addressing Two Critical Topics

Transcription

1 Addressing Two Critical Topics

2 Reinventing the Footwear Industry is Difficult to Put on a Timeline Invest & Create Invest & Create Ramp & Optimize Ramp & Optimize Expand Expand NIKE and Flex are developing a new operating model Flex is adapting its Platform capabilities for the footwear industry NIKE is adapting to Design for Automation processes Targeting profitability during 2H FY19 Automation-enabling growth Productivity and yield improvement drive efficiency Multi-billion dollar TAM opportunity; Flex and NIKE are committed partners High growth High margins

3 The Power of the Platform Mike McNamara Chief Executive Officer

4 In the Age of Intelligence, Selling a Product is Not Enough...

5 Products Create Value Through Interconnected Systems

6 Traditional Industry Boundaries are Disappearing Competencies in a single industry are no longer sufficient

7 Our Capabilities Across Industries are Unparalleled Healthcare Automotive Industrial Home Appliances Capital Equipment Networking Telecom Energy Storage Connected Living AR/VR Enterprise Compute Mobile Apparel Lighting Building and Construction

8 In the Age of Intelligence, Cross-Industry Ecosystems are Necessary Customers increasingly rely on Flex to provide a broad array of capabilities Vertically deep, customers benefit from our horizontal breadth Ford Cisco John Deere CG Group J & J Nespresso Whirlpool

9 Continuously Focused Investment for Over Five Years is Driving Growth The Flex Platform is our core competitive advantage

10 The Flex Platform is Enabling Multiple Ecosystems Healthcare Ecosystem Geographic Ecosystems Digital Startup Ecosystem Autonomous Vehicle Ecosystem Building and Construction Ecosystem

11 Each Ecosystem Leverages Many Flex Capabilities FDA Facilities Pharma Manufacturing Automotive Grade Manufacturing Data Center Design Worldwide Footprint YTWO Formative Software Lighting Healthcare Autonomous Vehicles Building and Construction Automation Digital Health Software Connected Home CEC Competencies 5G Connected Home Energy Storage Solar

12 Structural Drivers of Value Creation Portfolio Evolution Sketch-to- Scale Platform Enabled Opportunities

13 Portfolio Evolution Continues to be Extremely Successful Portfolio Evolution The balanced portfolio drives free cash flow, stable earnings and drives future capabilities Revenue CTG 61% FY07 $19B IEI 12% HRS 3% CEC 24% CTG 30% FY13 $24B IEI 16% HRS 12% CEC 42% CTG 27% IEI 24% FY18 $25B CEC 30% HRS 19% 15% 28% 43%

14 Sketch-to-Scale Revenue Increases Engagement More customers rely on us earlier in the product lifecycle Sketch-to- Scale ~40% 27% 35%-45% 7% 18% 17% 34% 29% 34% 25%-35% 9% 3% 5% CEC CTG IEI HRS CEC CTG IEI HRS CEC CTG IEI HRS FY 2013 FY 2018 FY 2020E

15 The Platform Enables Multiple High-Value Opportunities Platform Enabled Opportunities Leveraging our core to drive upside BrightInsight Leverages Platform capabilities Generates revenue pull-through Creates high equity valuations Takes advantage of outside investor funding and know-how Attracts world-class talent into focused businesses

16 The Platform Enables Flex to Capture New TAM in India Leveraging our core for localization in one of the world s fastest growing markets GDP per Capita 1 China India In 10 years, India s per capita income will be the same as China s last year. $34,997 Internet Penetration Billions of People % 40% 96% Flex Footprint Manufacturing Design Global Business Services (GBS) Flex Global Services (FGS) Gurgaon $16,660 $6,821 $7,183 $3,574 $16,421 34% 60% Mumbai Bangalore Pune Kolkata Hyderabad Vizag Chennai 4% E E 1) IMF, Internal Estimates

17 The Platform Enables Flex to Capture New TAM in India Leveraging our core for localization in one of the world s fastest growing markets GDP per Capita 1 China India In 10 years, India s per capita income will be the same as China s last year. $6,821 $3,574 India is the next China $16,660 $7,183 $34,997 $16,421 IoT/Internet Penetration Billions of People % 66% 40% Consumer demand will lead 60% 34% Flex Footprint Manufacturing Design Global Business Services (GBS) Flex Global Services (FGS) Mumbai Bangalore Flex has the Pune Gurgaon expertise to succeed Kolkata Hyderabad Vizag Chennai 4% E E 1) IMF, Internal Estimates

18 Structural Drivers of Value Creation Multiple levers to support sustainability and balanced long-term growth 61% FY07 $19B 24% 30% FY13 $24B 42% 27% FY18 $25B 30% 3% 12% 15% 16% 28% 12% 24% 43% 19% + + Gurgaon 7% 18% 17% 27% 34% 29% 34% 25%-35% ~40% 35%-45% BrightInsight Mumbai Pune Bangalore Kolkata Hyderabad Vizag Chennai 3% 9% 5% CEC CTG IEI HRS CEC CTG IEI HRS CEC CTG IEI HRS FY 2013 FY 2018 FY 2020E

19 In the Age of Intelligence, the Flex Platform is Highly Differentiated Balanced participation in industries and ecosystems drives stability Expansive set of capabilities drive organic growth Leveraged platform-enabled investments create upside

20 Snapshot of What will be Shared Today We are expecting accelerated organic growth HRS IEI CEC CTG Outstanding bookings Moderate revenue growth in 2019 Average 10% growth over the next few years High margin stability Continued 10%+ revenue growth Another year of margin expansion Diversified portfolio Flat revenue FY19 Return to growth Stable to improving margins Rapid growth Increasing margins/op Significant mix shift NIKE recovery second half No change to margin targets

21 Snapshot of What You will Hear Today Investments in 1H FY19 expected to yield 2H Margin/OP expansion 1H FY19 Investment in capex and working capital Ramping 25,000 people this year Elevated start-up costs Repositioned organization to be a simpler, more effective operating model 2H FY19 Margin expansion OP expansion Higher leverage in SG&A