Results for Q4 FY2014 (Quarter Ended March 31, 2014) Earnings Announcement: April 30, 2014

Transcription

1 Results for Q4 FY2014 (Quarter Ended March 31, 2014) Earnings Announcement: April 30, 2014

2 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 non-gaap financial measures, these measures are located on the Investor Relations section of our website, along with the required reconciliation to the most comparable GAAP financial measures. 2

3 Q4 FY2014 Income Statement Highlights Prior Yr Prior Qtr Current Qtr March 31, December 31, March 31, ($ in millions, except per share amounts) Net sales $5,295 $7,183 $6,724 Adjusted operating income Adjusted net income Adjusted EPS $0.13 $0.26 $0.24 GAAP operating income (loss) (27) Restructuring and other charges (125) - (90) GAAP net income (loss) (49) GAAP EPS ($0.08) $0.23 $0.07 Q4 FY2014 Results vs. Guidance: Net sales of $6,724 exceeded guidance of $5,900 - $6,300 Adjusted Operating Income of $182 exceeded guidance of $140 - $170 Adjusted EPS of $0.24 exceeded guidance of $ $ 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 FY 2014 Income Statement Highlights Revenue Adjusted Gross Profit +11% 26,109 +9% 1,505 23,569 1,387 FY 2013 FY 2014 Adjusted Operating Income FY 2013 FY 2014 Adjusted Earnings Per Share (EPS) % +6% $ $0.84 * FY 2013 FY 2014 FY 2013 FY 2014 * Reflects a $0.11 EPS benefit due to the $74M gain from Workday warrants 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

5 Trended Quarterly Income Statement Highlights Revenue 5,295 5,791 6,410 7,183 6,724 Adjusted Gross Profit 5.9% 6.0% % Revenue 5.8% 5.6% 5.8% Adjusted Operating Income 2.0% % % % % Revenue 2.7% Adjusted Earnings Per Share (EPS) $0.13 $0.18 $0.22 $0.26 $0.24 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 5

6 Other Income Statement Highlights Adjusted interest & other expense $16.4 million Adjusted income tax rate 12.0% Reconciliation between GAAP & adjusted EPS: Intangible amortization $7.4 million Stock based compensation $10.0 million Restructuring charges $34.6 million Other charge $55.0 million, expected to reverse in Q1 15 Aggregate impact on EPS is $0.17 Weighted average shares outstanding (WASO): 612 million shares vs. 619 million shares last quarter Repurchased 12.4 million shares at an average price per share of $8.98 6

7 Working Capital Management Inventory Inventory Turns Net Working Capital % Annualized Revenue Cash Conversion Cycle (days) 7.1x 2, x 3, x 6.9x 6.7x 3,876 3,972 * 3,599 3,272 3,099 * 7.3% 7.5% 6.7% 1,729 1,718 1, % 7.5% 2,083 2, * Q3FY14 (Dec-13) reflects approximately $700M of incremental customer advances, of which $500M remains in Q4FY14 (Mar-14) Net Working Capital = Total A/R and Inventory less A/P (excludes customer advances) Cash Conversion Cycle and Net Working Capital: excludes non-cash reductions to AR from our AR sales programs for all periods and excludes customer advances 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 7

8 Summary Statement of Cash Flows Three Months Twelve Months Ended Ended Mar-14 Mar-14 GAAP net income $43 $366 Depreciation and amortization Change in working capital and other (63) 396 Net cash provided by operating activities 98 1,216 Purchases of property & equipment, net of dispositions (54) (515) Free Cash Flow Payments for repurchase of ordinary shares (113) (475) Payments for acquired businesses, net of cash acquired - (238) Proceeds/(Repayments) of bank borrowings, net 44 (16) Other net change in cash 2 35 Net change in cash and cash equivalents ($23) $7 8 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

9 Solid Capital Structure Dec-13 Mar-14 Cash $1,617 $1,594 Total Debt 2,056 2,103 Debt / EBITDA (LTM) 2.0x 1.9x Total Liquidity $3,094 Significant Debt Maturities (Calendar Year) ($ millions) $1,500 Revolver 4.625% Notes 5% Notes $1,594 Cash Term Loans $600 $500 $500 $500 Liquidity Significant Debt Maturities as presented in the chart above exclude $3M of other debt with varied maturities 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

10 Fiscal Year 2014 Highlights Continuous Improvement Meaningfully grew revenue, adjusted operating profit dollars, adjusted operating margin, and adjusted EPS Executed Components Business Turnaround Exited fiscal 2014 with components profitable and operating margins above our corporate average Strong Sustainable Cash Flow Above target annual operating cash flow of $1.2 billion and free cash flow of $700 million Strategic Investments in the Business Made meaningful investments to further expand our capabilities and extend our lead in supply chain solutions Consistent Return of Value Repurchased 60 million shares for $475 million in fiscal 2014 and 258 million shares for $1.7 billion over the past four fiscal years, reducing shares outstanding by 27% 10

11 Revenue by Business Group Business Group $ % Total $ % Total $ % Total $ % Total $ % Total Integrated Network Solutions $2,454 46% $2,532 44% $2,588 40% $2,598 36% $2,418 36% Industrial & Emerging Industries % % % % 1,027 15% High Reliability Solutions % % % % % High Velocity Solutions 1,179 22% 1,547 26% 2,097 33% 2,829 39% 2,436 36% Total Revenue $5,295 $5,791 $6,410 $7,183 $6,724 Mar-14 Jun-14E Business Group $ Q/Q % Y/Y % Outlook (Q/Q) Integrated Network Solutions $2,418-7% -1% Stable Industrial & Emerging Industries 1,027 10% 16% Up High Single Digits High Reliability Solutions 843 2% 9% Stable High Velocity Solutions 2,436-14% 107% Decline ~20 to 25% Total Revenue $6,724-6% 27% 11 Certain prior quarter amounts have been recast to conform to current year presentation

12 Q1 FY2015 Guidance Revenue ($ mil) $6,000 - $6,500 Adjusted Operating Income ($ mil) Adjusted EPS $150 - $180 $ $0.24 Other Information: Adjusted SG&A Expense ~$200 - $205 million Interest & Other Expense ~$20 million Adjusted Income Tax Rate 8% - 10% GAAP EPS* $ $0.30 WASO ~605 million shares * GAAP EPS reflects approximately $0.09 per diluted share benefit of expected reversal of the Q4 other charge (see slide 6) 12

13 THANK YOU For more information: investors.flextronics.com