Earnings Announcement: July 23, 2015 · 3 ($ in millions, except per share amounts) June 27, 2014...
Transcript of Earnings Announcement: July 23, 2015 · 3 ($ in millions, except per share amounts) June 27, 2014...
Earnings Announcement: July 23, 2015
(Ending June 26, 2015)
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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 non-GAAP financial measures, these measures are located on the “Investor
Relations” section of our website, www.flextronics.com along with the required reconciliation to the most
comparable GAAP financial measures.
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($ in millions, except per share amounts) June 27, 2014 March 31, 2015 June 26, 2015
Net sales $6,643 $5,952 $5,566
Adjusted operating income 183 178 159
Adjusted net income 148 157 134
Adjusted EPS $0.25 $0.27 $0.23
GAAP operating income 172 164 143
GAAP net income 174 135 111
GAAP EPS $0.29 $0.23 $0.19
Net sales of $5.6B vs. $5.6 - $6.2B
Adjusted operating income of $159M within guidance of $150 - $190M
Adjusted EPS of $0.23 at mid-point of $0.20 - $0.26
Please refer to the Investor Relations section of our website which contain the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures
4 Please refer to the Investor Relations section of our website which contain the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures
22.8%23.3%
24.1%23.7%
22.9%
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
(ROIC %)
$0.25 $0.26
$0.30
$0.27
$0.23
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
(EPS)
6,643 6,529 7,025
5,952 5,566
5.8% 5.8% 5.8%
6.4% 6.4%
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
Adj. Gross Margin($ in millions)
183 183207
178159
2.8% 2.8%2.9%
3.0%2.9%
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
% Revenue($ in millions)
$57 2.9%
$39 2.5%
$29 2.6%
$60 6.6%
Corporate
Services & Other1 ($26)
Total $159 2.9%
INS
CTG
HRS
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($ in millions)
Please refer to the Investor Relations section of our website which contain the reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures
IEI
1. Corporate services and other related to unallocated cost
3%2%
5% 7%
3% 4%
4% 6%
• Challenging INS macro-environment
• Margins on target
• Sustaining healthy margins
• Program ramps and investments weigh on margins
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• Q1 FY16 was $17M, better than guidance of ~$20M
• Outlook: quarterly estimate of ~$25M
• Q1 FY16 was 5.6%
• Outlook: 8-10% range
• Intangible amortization $8M
• Stock based compensation $16M
• Aggregate impact on EPS $0.04
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Three Months
Ended
($ in millions) Jun-15
GAAP net income $111
Depreciation and amortization 110
Change in net working capital 131
Other operating cash flows, net 10
Net cash provided by operating activities 362
Purchases of property & equipment, net (137)
Free Cash Flow 225
Payments for share repurchases (100)
Proceeds from borrowings, net 588
Other investing and financing, net (10)
Net change in cash and cash equivalents $703
2,126 1,886 1,834 1,866
1,730
8.0%7.2%
6.5%
7.8% 7.8%
Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
% Annualized Revenue($ in millions)
400
510
322
475 416
100
757 684 639
591 563 568
FY11 FY12 FY13 FY14 FY15 FY16 YTD
Shares Outstanding
($ in millions)
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$2,331
$1,500
$593 $475 $500 $500 $600
Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
($M) (Calendar Year)
Cash
Revolver
Total
Liquidity
$3,831
••••
Term Loans LIBOR + 125 to 137.5bps
4.625% Notes 5% Notes 4.75% Notes
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• Disciplined SG&A expense management
• Well balanced capital expenditures
• ROIC above 20% target
• Strong Q1 Free Cash Flow of $225M
• New branding and website will drive a richer sales engagement
• Launch of Flex Pulse and Flex Customer Experience Center
provides us with more effective tools
• Capital return program remains on track as 7.7M shares
were repurchased for $100M in Q1
• Repurchased 305M shares, reducing our net shares
outstanding by ~30% since FY11
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36%
20%
16%
28%
HRSIEI
CTG INS
Jun
2015
36%
($ in millions) Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15E
Business Group $ $ $ $ $ Q/Q % Y/Y % Outlook (Q/Q)
INS 2,440 2,341 2,358 2,052 1,966 -4% -19% Up high single digit
CTG 2,222 2,210 2,647 1,861 1,565 -16% -30% Up 15% - 25%
IEI 1,125 1,097 1,106 1,132 1,130 0% 1% Up mid to high single digit
HRS 856 881 914 907 905 0% 6% Up mid to high single digit
Total Revenue $6,643 $6,529 $7,025 $5,952 $5,566 -6% -16%
Certain prior quarter amounts have been recast to conform to current year presentation
Integrated Network
Solutions(Telecom, Datacom, Server & Storage,
Converged Infrastructure)
Consumer Technology
Group(Wearables, Digital Health, Gaming,
Connected Home, Mobile, PC/Printers)
Industrial & Emerging
Industries(Semiconductor & Capital Equipment, Office
Solutions & Industrial Automation, Test &
Measurement, Appliance & Lifestyle, Energy
& Metering, Lighting)
High Reliability
Solutions(Automotive, Medical, Aerospace &
Defense)
37%
17%13%
33% Jun
2014
30%
HRSIEI
CTG INS
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Adjusted SG&A Expense ~$210 +/- $5 million
Interest & Other Expense ~$25 million
Adjusted Income Tax Rate 8-10% range
GAAP EPS $0.17 - $0.23
WASO 577 million shares
($ in millions, except per share amounts)
Adjusted operating income excludes approximately $16 million for stock based compensation, of which approximately $14 million is excluded from adjusted SG&A.
GAAP EPS reflects approximately $0.05 for intangible amortization and stock-based compensation expense.
$5,900 - $6,500
$165 - $205
$0.22 - $0.28
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investors.flextronics.com