On this page of StockholderLetter.com we present the latest annual shareholder letter from FLEX LTD. — ticker symbol FLEX. Reading current and past FLEX letters to shareholders can bring important insights into the investment thesis.
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6/25/2024 Letter Continued (Full PDF)
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6/21/2023 FLEX Stockholder Letter
• More "Electronic Equipment & Products" Category Stockholder Letters
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FLEX Benford's Law Stock Score = 77
6/25/2024 Letter Continued (Full PDF)
•
6/21/2023 FLEX Stockholder Letter•
More "Electronic Equipment & Products" Category Stockholder Letters•
FLEX Benford's Law Stock Score = 77FLEX Shareholder/Stockholder Letter Transcript:
2024 ANNUAL REPORT Integrating the power of manufacturing Message from our CEO We will continue to execute on our strategy to unlock the full potential of Flex. Revathi Advaithi CEO June 25, 2024 Dear Shareholders and Colleagues, We set our Flex Forward strategy ve years ago with the goal of creating shareholder value through pro table growth and margin expansion, leading to greater nancial resiliency through the cycles. This result would come from winning the right kind of growth, expanding our services, and continuing to build upon our operational excellence. Ultimately, this is about solving complexity, and delivering greater value for our customers. This strategy has been tested repeatedly over the last several years, and each time we have demonstrated it is working. I am very proud of our performance in scal 2024, particularly as we navigated a highly dynamic environment, while making progress towards our longer-term goals. We achieved record adjusted margins, delivered another year of double-digit adjusted earnings-per-share growth over the prior year, and generated substantial value for our shareholders. Importantly, these results demonstrate the resiliency we have built into our business as we continue to navigate the various macrocycles effectively. Through these challenges, we continue to help our customers solve increased complexity and deliver on our commitments to our stakeholders. Financial Outcomes* Fiscal 2024 was another milestone year for Flex. Based on Flex continuing operations (excluding Nextracker), we achieved record annual adjusted operating margins of 4.8%, up 50 basis points from scal 2023. We delivered 11% adjusted earnings-per-share growth, reaching a record $2.15. All of this was accomplished despite a 7% revenue decline due to the increased headwinds in the global economy. We currently exist in a time where macro uncertainty is more of the norm rather than the exception. We believe Flex is in a much better position to manage through these times and it is re ected in our results. For example, over the last three years, as revenue grew at a 5% compounded annual growth rate, adjusted operating margins expanded by over 100 basis points, and this is the fourth year in a row we ve generated double-digit adjusted EPS growth. Additionally, these global disruptions are also driving business opportunities for Flex, as companies look for help navigating regionalization trends and structural disruptions to value chains. This year, we returned a record $1.3 billion to shareholders through stock repurchases. We also completed the Nextracker separation on January 2nd. Our decision and subsequent actions to separate Nextracker generated substantial value through multiple phases of the transaction. This included the initial public offering, a follow-on * See Annex A to our proxy statement for a reconciliation of GAAP to non-GAAP nancial measures referenced in this letter. offering, and nally the tax-free spin-off of our remaining interest in Nextracker to our shareholders, which alone returned value of approximately $3.5 billion. Flex Forward Strategy We continue to make progress on our transformative long-term strategy, shifting to higher value business, expanding our service offerings, and building on our Flex product portfolio in cloud power and automotive. In the early phases of our strategic shift, we prioritized higher-value end markets with favorable secular drivers and pro tability pro les, such as cloud, automotive, industrial, and healthcare. We have also worked to build synergies across the Flex platform, including areas of technical expertise, vertical integration, and value-added services. In scal 2024, our cross-industry expertise strategy continued to bear fruit particularly in the cloud and automotive end markets. Through focused investment in advanced compute and power systems expertise our cloud-facing business reached $3 billion. This is a combination of $2 billion from our AI-supportive customized, fully integrated rack solution, including liquid-cooling capabilities, in our CEC business unit, and $1 billion from our data center power products portfolio, that falls under our Industrial business unit. We are differentiated by providing the most comprehensive data center offering in the industry. Our end-to-end manufacturing services and capabilities across the globe are unmatched, including components, metal fabrication, vertical integration, logistics, post-sale services, and more. Furthermore, Flex is the only EMS provider with its own comprehensive set of data center power products, from embedded power at the board and rack level to critical facilities power, with a portfolio that is truly grid-to-chip. Our cross-industry expertise in compute and power also extends into the automotive sector. All vehicles, regardless of the powertrain type, are becoming more like edge data centers on wheels. Additionally, the adoption of EV and hybrid powertrains adds further challenges, requiring more complex power systems. We are providing more than just hardware manufacturing. Our exible business model differentiates us in the market giving us a broad spectrum of collaborative engagements with top automakers, including both joint and full product design within compute and power. We see our offerings resonating with automakers as scal 2024 was another strong year of new wins following back-to-back years of record new program wins. Data center and automotive are two markets with very strong, long-term secular drivers. Given our positioning and the strong market growth dynamics, we believe these two businesses combined can reach approximately 40% of Flex total revenue, as we look out towards scal 2029. Manufacturing Services Excellence Our strong ability to execute comes from our foundation in manufacturing services. We are always focused on increasing our technical capabilities, driving faster deployment and greater ef ciencies through our advanced, exible automation strategy, and ensuring we have the optimal global footprint to effectively support our customers in a regionalizing world. On this foundation, we continue to expand our services and vertical integration capabilities to serve more of our customers needs and increase our addressable market. We started our journey to expand these services years ago, where we saw the opportunity to move beyond simple electronics production. We expanded into high-performance plastics and metals, and created vast components services, and global logistics and refurbishment capabilities. Putting this all together, our global network of integrated manufacturing and service locations increases resiliency and time to market. Our initiatives and investments in automation, capabilities, and systems enable us to achieve productivity gains to help drive margins and prepare us for the future. Looking Forward We expect scal 2025 to experience similar economic headwinds in the global economy as we saw in scal 2024. Despite these challenges, scal 2025 should be another year of strong strategic and nancial progress. We will navigate the near-term currents, invest in our future opportunities, and continue to execute on our strategy to unlock the full potential of Flex. We remain very optimistic about our future, and we greatly appreciate the continued partnership of our customers, colleagues, and our shareholders. Regards, (Company Registration Number 199002645H) Notice 11:00 a.m., Central time Flex Ltd. 12455G Research Blvd, Welcome Center Austin, TX 78759 U.S.A. Vote via Internet at www.proxyvote.com Vote in Person at the Meeting on August 8, 2024 at 11:00 a.m., Central time To Be Held on August 8, 2024 To Our Shareholders: You are cordially invited to attend, and notice is hereby given of, the annual general meeting of shareholders of Flex Ltd., which will be held at our of ces located at 12455G Research Blvd, Welcome Center, Austin, TX 78759 U.S.A., at 11:00 a.m., Central time, on August 8, 2024, for the purposes summarized below and described in more detail in the accompanying proxy statement. We urge you to read the entire proxy statement carefully before voting. Unless the context requires otherwise, references in this notice and the proxy statement to Flex, the Company, we, us, our and similar terms mean Flex Ltd. or, as the case may be, Flex Ltd. and its subsidiaries. Flex is incorporated in the Republic of Singapore under the Companies Act 1967, which we refer to as the Singapore Companies Act or the Companies Act 1967 . Please refer to our proxy materials or the information forwarded by your bank or other holder of record to see which voting methods are available to you. 2024 Proxy Statement Shareholder Info Vote by Mail Sign and return your proxy card in the postage-paid envelope of Annual General Meeting of Shareholders Annual Report Thursday August 8, 2024 Notice & Proxy Statement FLEX LTD. (Incorporated in the Republic of Singapore)