Sketch-to-Scale Solutions Investor Presentation March 2018 Risks - PowerPoint PPT Presentation

Sketch-to-Scale Solutions ™ Investor Presentation March 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 Industrial & Emerging Communications & Consumer HRS IEI CEC CTG Solutions Industries Enterprise Compute Technologies Group Medical: Consumer Health, Digital Semiconductor & Capital Cloud Data Center, Connected Living, Wearables, Health, Disposables, Drug Delivery, Equipment, Office Solutions, Communications, Networking, Gaming, AR/VR, Mobile Devices, Diagnostics, Life Sciences & Household Industrial & Lifestyle, Server & Storage. Footwear and Clothing, Supply Imaging Equipment. Industrial Automation & Kiosks, Chain Solutions for PCs, Tablets, Energy & Metering, Lighting. and Printers. Automotive: Vehicle Electronics, 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 Consumer Technologies 34-36 The World Has Changed 17 Why Invest in Flex? 3-4 Innovation From Sketch- 31 Latest Financial 54-58 Group (CTG) To-Scale TM Update The Flex Advantage 18 Strong Free Cash Flow 5 % of Sketch-To-Scale TM Communications & 37-41 32 IR Contact Info 59 Flex Platform 19 Enterprise Compute Shareholder Return 6 Revenue (CEC) Megatrends 20 ROIC 7 Industrial & Emerging 42-44 12 Industries 22 Industries (IEI) Portfolio Evolution 8 High Reliability Solutions 45-52 100+ Locations Globally 23 2020 Revenue & Profit 9 (HRS) Growth Centers of Excellence 24 Profit Growth & Earnings 10-11 Investing in Capabilities 25 Power Elementum 26 Earnings Leverage 12 Flex Pulse 27 Targeted M&A 13 Reinventing Construction 28 Customer Diversification 14 Nike Partnership 29 Balanced Capital 15 Structure 2

Why Invest in Flex? Evolving our portfolio to provide more predictable earnings, higher margins 1 and meaningful earnings power through structural mix change and increased Sketch-to-Scale TM business 2 Strong sustainable free cash flow Unwavering shareholder return commitment supported by significant 3 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) 1.14 1.17 815 792 701 475 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 Free Free Cash Flow 639 Cash 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 22% 24 efficiency Avg. 22 22 20 » Disciplined capital 19 deployment » ROIC well above WACC 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 7 income excludes charges for stock-based 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 HRS + IEI HRS + IEI revenue revenue revenue Est Avg ~2 ~4 ~6 Product years years years Life Cycle 8

Structured to Deliver Profitable Growth Targeted 2020 revenue growth model Annual Revenue Comments Growth Target » Technical offering and leadership expertise enables growth HRS 10%+ » Leveraging innovation and sketch-to-scale capabilities » Momentum from record bookings across its broad portfolio IEI 10%+ » Positioned to penetrate massive TAM » Structurally enhancing margin and earnings growth CTG 3% to 5% » Transformational new partnerships and new markets » Well positioned for next generation technologies CEC -5% to 0% » Disciplined management of legacy business 9

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% 10

Positioned to Deliver Meaningful Earnings Power Portfolio Evolution Substantial Earnings Leverage 2016–2020 CAGR Revenue mix CEC CTG 4x FY20E 12%+ 3x IEI HRS 10%+ ~45% Sketch-to-Scale ~40% % Sketch-to-Scale FY20E Total Flex ~3% CEC CTG IEI HRS Revenue Adj. Adj. EPS Operating 11 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 12

Targeted M&A Accelerates Our Portfolio Evolution Expanding longer product lifecycle businesses and Sketch-to-Scale TM capabilities Key Selection Criteria Longer Target Strategic Higher EPS Barriers to product capabilities customers margins accretive entry lifecycles % 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% 13 *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 Q3 FY18 was 8th straight quarter with no 10%+ customer Top 10 Customers as % of Total Revenue 64% 55% 43% FY07 FY12 FY17 10%+ No 10%+ customer Customers 14

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 15

The World Has Changed… Flex is Ready

Our Industry Has Changed -- We Have Evolved Our Model Electronic Manufacturing Contract Sketch-to-Scale TM Services Manufacturing Solutions and co- Asset Light and Worldwide Scale innovation Lower Cost and Labor Arbitrage Time Cost Based Revenue/Strategy Discussion Discussion » Director of Procurement C-level Executive 3-6 months 18-24 months lead-time lead-time 17

Flex is Ready… The Flex Advantage $24B 100 200,000 3,000 50M revenue sites in over employees design sq. ft. of 30 countries engineers manufacturing & services space 18

Capabilities Built for the Future The Flex Platform Our company innovates across three dimensions 19