High Reliability Solutions OverviewPaul Humphries
May 31, 2012
High Reliability Solutions (HRS) Markets We Serve
Medical SolutionsConsumer Diagnostics & Drug Delivery
Disposable DevicesLab Diagnostics, Imaging and Monitoring
Automotive SolutionsVehicle Electronics
ConnectivityEnergy Management
Aerospace & DefenseDefense
Civil AviationHomeland Security
#1 in Medical and AutomotiveQuickly emerging in A & D
CAGR 20%+Leveraging $30B Flextronics
Leading design services capabilitiesLeading quality & management systems
#1 in Medical and AutomotiveQuickly emerging in A & D
CAGR 20%+Leveraging $30B Flextronics
Leading design services capabilitiesLeading quality & management systems
High Reliability Solutions Key Facts
Key Facts about HRSKey Facts about HRS
Industrial & Emerging Industries
~15%
Industrial & Emerging Industries
~15%
High Velocity
Solutions~30%
High Velocity
Solutions~30%
High Reliability Solutions
~10%
High Reliability Solutions
~10%
Flextronics Business Group
FY13E
Fiscal 2012 Revenue : $2.4BScale : 15 dedicated sites on 3 continentsCapabilities: 2000+ Flex engineers,5 dedicated design centers – 560 HRS engineersDepth: Support all industry sectorsCustomer Base: 145 CustomersIndustry Ranking: No. 1 in Medical andAutomotive
Fiscal 2012 Revenue : $2.4BScale : 15 dedicated sites on 3 continentsCapabilities: 2000+ Flex engineers,5 dedicated design centers – 560 HRS engineersDepth: Support all industry sectorsCustomer Base: 145 CustomersIndustry Ranking: No. 1 in Medical andAutomotive
HRS Segments - FY13EHRS Segments - FY13E
Integrated Network Solutions~45%
Integrated Network Solutions~45%
~19%
~34% ~24%
~19%
~4%
AutoElectronics
Aero / Defense
DisposableMedical Devices
Car Connectivity
Medical Equipment
High Reliability Solutions Highlights FY12
$1,443
$1,902
$2,363
FY10 FY11 FY12 FY13E
10 % - 15%
24% growth
Solid operating margins
$600m+ in new bookings
16 new customers
New talent in Automotive and A&D
Stellar acquisition
Key medical equipment start up in Mexico
24% growth
Solid operating margins
$600m+ in new bookings
16 new customers
New talent in Automotive and A&D
Stellar acquisition
Key medical equipment start up in Mexico
Revenue Outlook ($M)Revenue Outlook ($M) Highlights FY12Highlights FY12
High Reliability Solutions Revenue Growth Potential
Segment 2012 Revenue
Industry CAGR
FlexCAGR
Automotive Electronics $105B 11% 37%
Medical Devices, Disposables & Equipment $100B+ 5% 21%
Aerospace and Defense Electronics $61B 6% 17%
Market is substantial and growingOpportunity for Flextronics remains strong
Market is substantial and growingOpportunity for Flextronics remains strong
Medical Markets We Serve and the Opportunity
Medical Device EMS Market Opportunity 2010 – 2021 Global Outsourced Medical Device Grows $30B - $96B
Global Outsourced Medical Device Grows Europe - $6.8B - $21B
Medical Device EMS Market Opportunity 2010 – 2021 Global Outsourced Medical Device Grows $30B - $96B
Global Outsourced Medical Device Grows Europe - $6.8B - $21B
Consumer Health & Drug Delivery Disposables Medical Equipment
Blood glucose metersBlood coagulation testElectro-mechanical drug delivery devices
•Insulin•HGH•Pain
Aesthetic skin careHair removal
CathetersWound managementEndoscopic InstrumentsSkin growth platformsDisposable dental drillsSurgical/stitching kits
Mass spectrometryHigh pressure liquid chromatographyUltrasoundCTMRIHospital BedsX-rayPatient monitoring
Strength and breadth of product portfolio unmatched
Total Medical Revenue Growth
-6%
32%
26%6.5%
Stellar Acquisition Provides New Capabilities in Microelectronics
Sensors & Monitors
Deep Brain StimulationNuero Modulation
Cochlear Implant System
Our Growth Strategy for Medical
Leverage new capabilities from acquisitionsLeverage new capabilities from acquisitions
Leverage vertical integration offerings• Precision plastics• Automation
Leverage vertical integration offerings• Precision plastics• Automation
Increase focus on European customer baseIncrease focus on European customer base
Expand existing customer base – capitalize on existing relationships and outsourcing trendExpand existing customer base – capitalize on existing relationships and outsourcing trend
Automotive Markets We Serve and the OpportunityElectronics Market EMS Market Opportunity 2010 – 2017
10%-11% CAGR$100B
Electronics Market EMS Market Opportunity 2010 – 201710%-11% CAGR
$100BVehicle Electronics
Control Modules•Powertrain•EngineElectric power steeringPower controls•Lift gates•Sliding doors/SunroofsRemote antennaAmbient Lighting
ConnectivityFord SYNCHead units - EuropeUSB/iPod connectivityBluetooth/WiFie-callAudio/Sound systemsGPSHMI/ Voice controlInterface Boxes
Energy ManagementBattery managementElectric bikesRecuperation modulesStart/stop modulesInvertersDC/DC convertersSuper capacitorsExhaust managementTransmission modules
Industry leading and broadest product portfolioIndustry leading and broadest product portfolio
Total Automotive Revenue Growth
‐12%
48%
38%
18%
Robust EMS Growth Opportunity
Electronics usage in automotive market growing faster than the industry itselfElectronics usage in automotive market growing faster than the industry itself
High
Low
Projected Impact on
the Automotive Electronics
Market Growth
CAGR 8.7%Instrumentation
Electronics
Other Electronics
CAGR 9.7% CAGR 10.6%Powertrain Electronics
Safety Electronics CAGR 11.2%
CAGR 11.9%Infotainment Electronics
2010 2017Note: The CAGRs listed above represent growth of the automotive electronics market in the specified time period. Other electronics include navigation systems, body/chassis electronics and instrumentation/display electronics. Source: Frost & Sullivan analysis
Automotive Market by Region
Asia = 50% of Total MarketAsia = 50% of Total Market
49%
26%
17%
5%3%
AsiaEuropeN.A.S.A.ROW
FY12 - FY16 from 78M to 92M Units
1Source: IHS Vehicle Production Forecast, April‐2012
Our Growth Strategy for Automotive
Increase focus on high growth geographies – China, India and BrazilIncrease focus on high growth geographies – China, India and Brazil
Expand existing outsourced base utilizing global capabilitiesExpand existing outsourced base utilizing global capabilities
Focus on products and technologies with highest growth potentialFocus on products and technologies with highest growth potential
A&D Markets We Serve and the Growth Opportunity
Aerospace and Defense Market EMS Market Opportunity 2010 – 20176%-7% CAGR
$70B
Aerospace and Defense Market EMS Market Opportunity 2010 – 20176%-7% CAGR
$70B
Defense Civil Aviation Homeland SecurityAvionicsUAV’sUGV’sCommunicationsEngine controlsGround vehiclesRuggedized computingSpace SystemsData Management
Avionics•Navigation•Flight Mgmt•Flight Info
Infotainment systemsSatellite radiosUAV’s
Perimeter intrusionBaggage handlersHand-held scannersAccess control kiosksSurveillance
Capitalize on vertical integration capabilitiesCapitalize on vertical integration capabilities
Leverage acquisitions to broaden customer portfolioLeverage acquisitions to broaden customer portfolio
Leverage Flextronics global capabilitiesLeverage Flextronics global capabilities
Secure “one” anchor customer in each marketSecure “one” anchor customer in each market
Our Growth Strategy for Aerospace and Defense
Market Outsourcing Drivers
Key trends driving MEDICAL growth
Medical device tax
Aging population
Healthcare cost
Emerging markets
Connected care
Market Trends driving AUTOMOTIVE growth
Personalization
Energy Management
Car Connectivity
Emerging markets
Driver safety /assistance
Market Trends driving A&D growth
Global air traffic
Defense budget cuts
Need to transform cost structures
New market expansion
Offset requirements
Flextronics’ SolutionHIGH RELIABILITY SEGMENT
World class quality & regulatory systems
Global supply chain expertise
Extensive design offerings
Significant vertical integration capabilities
Broad global reach
Market Outsourcing Drivers
1
2
3
4
Strategy to Drive Growth
Drive “high reliability” performance with standardized global management systems
Use targeted acquisitions to build competence and credibility
Exploit Flextronics overall capabilities and vertical offerings
“Win with the winners”
Thank You