Sketch-to-Scale Solutions Investor Presentation February 2018 - PowerPoint PPT Presentation

Sketch-to-Scale Solutions ™ Investor Presentation February 2018

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 historical non- GAAP financial measures, these measures are located on the “Investor Relations” section of our website, www.flex.com along with the required reconciliation to the most comparable GAAP financial measures. The following business group acronyms will be used throughout this presentation: High Reliability Solutions Industrial & Emerging Communications & Consumer Technologies HRS IEI CEC CTG Industries Enterprise Compute Group Medical: Consumer Health, Digital Health, Disposables, Drug Delivery, Semiconductor & Capital Cloud Data Center, Connected Living, Wearables, Diagnostics, Life Sciences & Equipment, Office Solutions, Communications, Networking, Gaming, AR/VR, Mobile Devices, Imaging Equipment. Household Industrial & Lifestyle, Server & Storage. Footwear and Clothing, Supply Industrial Automation & Kiosks, Chain Solutions for PCs, Tablets, Automotive: Vehicle Electronics, Energy & Metering, Lighting. and Printers. Connectivity, Clean Technologies. 1

Table of Contents Flex is Ready / Strategically Positioned Sketch-to-Scale TM Why Flex? Richer Business Mix Financial Update to Win The World Has Changed 16 2020 Revenue & Profit 40-41 Why Invest in Flex? Innovation From Sketch-To- 32-33 Latest Financial Update 70-74 3-4 Scale TM Growth The Flex Advantage 17 Strong Free Cash Flow Appendices 5 % of Sketch-To-Scale TM Consumer Technologies 42-46 34 75-76 Group (CTG) Flex Platform 18 Shareholder Return 6 Revenue IR Contact Info 77 Megatrends 19 High Reliability Solutions 47-58 ROIC Design-Enabled 35 7 (HRS) Manufacturing Growth Global Citizenship 20-21 Portfolio Evolution 8 Industrial & Emerging 59-63 Nike Partnership 36 12 Industries 23-24 Industries (IEI) Profit Growth & Earnings 9-10 Power Reinventing Construction 37 100+ Locations Globally 25 Communications & Enterprise Compute (CEC) 64-68 Earnings Leverage Platform is Uniquely 38 11 Innovation & Centers of 26-27 Positioned Excellence Targeted M&A 12 Investing in Capabilities 28 Customer Diversification 13 Elementum 29 Balanced Capital Structure 14 Flex Pulse 30 2

Why Invest in Flex? Evolving our portfolio to provide more predictable earnings, higher margins and meaningful 1 earnings power through structural mix change and increased Sketch-to-Scale TM business 2 Strong sustainable free cash flow 3 Unwavering shareholder return commitment supported by significant buybacks over time 3

Financial Performance Underscores Successful Evolution Sustainable Profitable Resilient Consistent 8% CAGR 9% CAGR $3.2B FCF generated $ 2.0B repurchased (FY13 – 17) (FY13 – 17) (FY13 – 17) (FY13 – 17) 1.17 1.14 815 792 475 701 1.08 751 680 660 420 416 639 0.89 665 0.84 350 322 611 554 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Adjusted Operating Profit Adjusted EPS Free Cash Flow Generated Shares Repurchased ($M) ($) ($M) ($M) 4

Strong Sustainable Free Cash Flow Cash Flow Generation Free Cash Flow ($M) Targets FY18 – FY20 $3.2B for FY13 to FY17 $3.5B+ $2B+ ~90% 701 680 660 Operating Cash Free Free Cash Flow 639 Flow Cash Flow Conversion 554 Key Cash Flow Drivers » Earnings expansion » Working capital sustained at 6-8% of sales » Disciplined capex investment modestly above depreciation levels FY13 FY14 FY15 FY16 FY17 5

Unwavering Shareholder Return Commitment Committed to returning over 50% of annual free cash flow to shareholders Share Repurchase Since FY11, we have repurchased… ($M) ~35% ~$3.0B ~364M of shares 684 in stock shares 639 outstanding 591 563 545 531 475 420 416 350 322 Since FY13, we have returned... 62% of free cash flow to shareholders FY13 FY14 FY15 FY16 FY17 shares outstanding (millions) 6

Guided by our Return on Invested Capital Return on Invested Capital 1 (ROIC %) » Improving earnings efficiency 22% 24 » Disciplined capital deployment Avg. 22 22 20 » ROIC well above WACC 19 FY13 FY14 FY15 FY16 FY17 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 7 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.

Portfolio Evolution to Higher Margin Business Driving predicable earnings and margin expansion CEC CEC CEC IEI 39% 35% ~27% ~23% IEI IEI 21% 13% 19% 38% FY10 FY17 FY20E ~45% HRS 6% HRS HRS ~22% CTG CTG 17% CTG 27% ~28% 42% $4.5B $9.1B ~$13.0B HRS + IEI revenue HRS + IEI HRS + IEI revenue revenue Est Avg ~2 ~4 ~6 Product Life years years years Cycle 8

Positioned for Operating Profit and Margin Expansion Targeted 2020 delivers profit growth Targeted Adjusted FY17 Adjusted Target Adjusted Operating Profit Mix Operating Operating Margin Margin Range Profit ($M) HRS $334 8.1% 6 – 9% IEI CEC IEI $180 3.6% 4 – 6% ~60% FY20E CTG $180 2.8% 2 – 4% CTG CEC HRS $229 2.7% 2.5 – 3.5% Corporate ($108) services and other 2 $815 3.4% 9

Positioned to Deliver Meaningful Earnings Power Portfolio Evolution Substantial Earnings Leverage 2016 – 2020 CAGR Revenue mix CEC CTG 4x FY20E 3x 12%+ IEI HRS 10%+ ~45% Sketch-to-Scale ~40% % Sketch-to-Scale FY20E Total Flex ~3% CEC CTG IEI HRS Revenue Adj. Adj. EPS Operating 10 Profit

The Path to Delivering Substantial Earnings Leverage $2.15+ ~$0.02 ~$0.02 ~$0.12 ~$0.20 ~$0.19 $1.80 ~$0.22 Record ~$0.26 » Sketch-to-Scale penetration EPS » Leveraging investments $1.17 » Operational execution $1.14 12% CAGR FY16 FY17 HRS CTG IEI CEC Corporate Share Interest and FY20E Investments Repurchase Taxes 11

Targeted M&A Accelerates Our Portfolio Evolution Expanding longer product lifecycle businesses and Sketch-to-Scale TM capabilities Key Selection Criteria Target Longer product Strategic Higher EPS Barriers to entry capabilities lifecycles customers margins accretive % of M&A Spend By Business Group * # of Acquisitions (FY13 – FY17) Based on purchase price * IEI HRS 24% 4 2 11 61% ~$1.5B CTG <$25M $25-$100M M&A >$100M 15% 12 *Reflects M&A transactions completed from FY13 to FY17 (excludes certain OEM asset acquisitions). 1 Reflects M&A transactions completed from FY13 to FY17 (excludes certain OEM asset acquisitions)

Improving Customer Diversification Q2 FY18 was 7th straight quarter with no 10%+ customer Top 10 Customers as % of Total Revenue 64% 55% 43% FY07 FY12 FY17 10%+ No 10%+ customer Customers 13

Balanced Capital Structure Debt Maturities ($M) Balances as of December 31, 2017 Term Loan Notes 692 119 119 600 » No near-term maturities 58 500 500 490 » Low average cost of debt: ~3.7% » Ample liquidity of $3.0B » $1.75B revolver + $1.3B cash CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY25 CY26 Investment Grade Rated Moody’s | S&P | Fitch 14

The World Has Changed… Flex is Ready

Our Industry Has Changed -- We Have Evolved Our Model Electronic Contract Manufacturing Sketch-to-Scale TM Manufacturing Services Solutions and co- Asset Light and innovation Worldwide Scale Lower Cost and Labor Arbitrage Time Cost Based Discussion Revenue/Strategy Discussion » Director of Procurement C-level Executive 3-6 months lead-time 18-24 months lead-time 16

Flex is Ready… The Flex Advantage 100 200,000 3,000 $24B 50M revenue sites in over 30 employees design sq. ft. of countries engineers manufacturing & services space 17

Capabilities Built for the Future The Flex Platform Our company innovates across three dimensions 18

Yielding a Massive Expansion of TAM 2015-2020 data points ($B), CAGR 10% 54% 56% 14% 20% 35 47 25 392 61 246 4 8 32 10 Smart Autonomous/ Artificial Cloud Intelligent Asset Cities * Connected Cars Intelligence (AI) ** Data Center Tracking 19% 84% 82% 22% 16% 176 119 12 38 76 3 1 36 50 65 Augmented Reality/ Virtual Digital Connected 5G/Telco Industrial Automation Reality (AR/VR) ** Health Living Cloud Source: Gartner, IDC,IFR, Markets & Markets, GMI Insights, Goldman Sachs, Autodesk, Flex Internal Estimates Source: Gartner, IDC,IFR, Markets & Markets, GMI Insights, Goldman Sachs, Autodesk, Flex Internal Estimates 19 (1) Represents 2016 estimated figured *Overlaps with other categories including connected living an autonomous vehicles. (2) Overlaps with other categories including connected living an autonomous vehicles **Represents 2016 estimated figure.