1 design. build. ship. service. iaesi 2011 annual convention uri bechor january 4 th 2011
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2Design. Build. Ship. Service.
~ 20,000 Employees in Logistics/Services
~ 216,00 Employees
~ 27M Manufacturing Square Feet
30 Countries
11 Major Manufacturing/Product Technologies
About Flextronics
4Design. Build. Ship. Service.
1
Broad Penetration of ODM and EMS Market Segments
5
2
3
4
INFRASTRUCTURE
INDUSTRIAL
MEDICAL
COMPUTING (ODM)
MOBILE & CONSUMER
Electrical and
Mechanical Technologies
No 1
No 1
No 2
No 7
No 2
27%
14%
6%
18%
35%
5Design. Build. Ship. Service.
Reverse Logistics & Repair
Service Parts Logistics
Distribution & SMI
Product Transformation
1 2
3 4
Broad Variety of Service Solutions
Consumer & EnterpriseField Services
In Store Technical Services & Sales5 6
6Design. Build. Ship. Service.
FLEXTRONICS Headcount & Revenue by Region
216,000 EmployeesWorldwide
Asia 141,000pEurope 27,000p
America 48,000p
FY10 RevenueAsia 48%
America 33%Europe 19%
7Design. Build. Ship. Service.
Revenue Growth FY94 – FY11E
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Revenue 131 237 448 1,498 2,578 3,953 6,959 12,110 13,105 13,379 14,530 15,731 15,288 18,854 27,558 30,949 24,111 27,746
FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 *FY11
US$ (Mil)
*FY11 Source: First Call consensus estimates
Revenue growth has returned and at a strong pace
8Design. Build. Ship. Service.8
Cash, Debt and Debt Maturities Profile
* Debt and Net Debt for the June 2010 quarter include $150 million related to the Company’s accounts receivable sales program
309
2,551
$2,242
MAR-10
444
2,232
$1,788
SEP-09
663*
2,394*
$1,731
SEP-10DEC-09 JUN-10
Cash
Total Debt
Net Debt
Debt/EBITDA(LTM)
$1,966 $1,928
2,553 2,257
587 329
($ i
n M
illio
ns)
3.0x 1.9x2.2x3.0x 2.3x
309
2,551
$2,242
MAR-10
444
2,232
$1,788
SEP-09
663*
2,394*
$1,731
SEP-10DEC-09 JUN-10
Cash
Total Debt
Net Debt
Debt/EBITDA(LTM)
$1,966 $1,928
2,553 2,257
587 329
($ i
n M
illio
ns)
3.0x 1.9x2.2x3.0x 2.3x
Significant Debt Maturities by Calendar Year – as of 10/1/10
Revolver
Cash
($ i
n M
illio
ns
)
$1,485
$3,728
Significant Debt Maturities by Calendar Year – as of 10/1/10
Revolver
Cash
($ i
n M
illio
ns
)
$1,485
$3,728
$180
Term LoanLiquidity New Term Loans
(Revolver)
$180
Term LoanLiquidity New Term Loans
(Revolver)
6.25% Senior Subordinated Notes
10Design. Build. Ship. Service.
Flextronics IL
Flextronics Israel is located has 4 plants in priority Areas
Migdal Haemek – 50,000 SQM
2,100 Employees – PCBA
Sderot & Yavne – 15,000 SQM.
180 Employees – Mechanical Operation
Ofakim – 15,000 SQM.
630 Employees – PCBA
Arad – 10,000 SQM.
380 Employees – PCBA
Revenue - 650M$/Year
11Design. Build. Ship. Service.
Customers
13Design. Build. Ship. Service.
Business Strategy – where we are Today / The Rock Activity
RFUs WiMAX™ InfiniBand Crier Ethernet
IP Video
Gateway PBX
Traffic Management
All indoor
VoIP Media Gateway
19Design. Build. Ship. Service.
Israel EMS SWOT Analysis – Jan 2011
STRENGTHSStrong Customer Base & Recognition
Tear one EMS footprint in IL
Lean Operation
Scale and breadth
Professional Mgt team
World class NPI/Technological center
WEAKNESSESUSD to NIS Rate
Minim wages is going up (6.2$ Vs 7.2$ in the US)
Asia – Low cost sulotion
Lack of ODM activity
Local OEM depended
M&A by Global companies
OPPORTUNITIES
Alternative stable Asia footprint solution
Continuous Lean journey
Vertical Integration & Services
Exploring new segments -
Robotics/Automotive/Industrial/Cleantech
THREATSChina as R&D center
Fx coverage
Decreasing # of H/W startup
Government support for labor intens industry
20Design. Build. Ship. Service.
Wins & Challenges►True development partner►Meet every milestone►Cross organization commitment►Efficient and fast procurement process►Quick turn on DEV requests – two weeks from concept to hand carried boards to hit Dev►Provide quality products to highly complex engineering project – over 50 configs per build►On the fly mechanical technical solutions►Highly professional test engineers – save travel costs for the customer
Wins & Challenges – China transition►Build an A-team to support both sites independent builds and overall transition►Israel involvement till start of MP►MTE knowledge transition including station construction►Record all the knowledge & knowhow from Israel and smooth implementation in DMN►Comprehensive support plan to ensure the DMN team is well trained and experienced►Material handshake over validation build►Combined DFA task force
Microsoft Kinect – Success story
2009 2010
MarchEV1 M - 60
AprilEV1 A - 50
MayEV1 DK - 1250
AugustPS 5.0B
OctoberEV 2 Sys Int )Redmond(
SeptemberEV 2 - 300
DecemberEV 3A - 96
NovemberEV2 DK - 3400
JanuaryEV3 M & MB
2500
Transition to China with support till MP
DecemberPSDK2.5 -1000
2008
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