Flex Ltd. (FLEX) J.P

Corrected Transcript

09-Aug-2017 Flex Ltd. (FLEX) J.P. Morgan Auto Conference

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017

CORPORATE PARTICIPANTS

Chris Obey President- Automotive, Flex Ltd. Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd......

OTHER PARTICIPANTS

Paul Coster Analyst, JPMorgan Securities LLC ......

MANAGEMENT DISCUSSION SECTION

Paul Coster Analyst, JPMorgan Securities LLC Okay. Good afternoon everyone. My name is Paul Coster. I cover Applied & Emerging Tech and also Alternative Energy at JPMorgan. And it's really interesting because we're seeing an awful lot of activity in the cusp zone, that's represented by the auto industry. A lot of tech companies that I cover, suddenly, really excited about the auto industry, and one of them is Flex, formerly known as Flextronics, in case some of you remember that name.

And I'm very pleased to introduce two people to you today, Nicole Stevenson, who is Head of Strategy for the Auto segment of Flex, which by the way is a $21 billion revenue run rate company; and Chris Obey, who is the President of the Auto segment.

Over to you Chris, welcome...... Chris Obey President- Automotive, Flex Ltd. Okay. Well thank you, and thank you for attending. What I'd like to do is, the Auto segment is just a portion of Flex, so we're going to start off with a quick overview of Flex as a company, and how we use those assets to speed up our time to market for automotive.

But first, we're going to play just a quick video to give you an idea of Flex.

[Video Presentation] (1:36-3:50)

So, I hope you enjoyed that. See if I can advance [ph] the screen (3:57). So the unique thing about Flex is that we operate at scale in 12 different industries. [ph] I guess that didn't work well (4:03). Let's talk about global scale and reach instead. So, Flex is a $24 billion company, 100 sites, 200,000 employees, a ton of design engineers, 50

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 million square feet of manufacturing space, and we launch about 12,000 products a year in all of our groups. So, big infrastructure at all of Flex.

So, we operate across 12 different industries. You can see we've got a $2 billion medical business; a $3 billion automotive business; industrial; home appliance; capital equipment; energy; networking; enterprise compute; wearables; connected; mobile. So, when we put our automotive hats on, we think of automotive as, boy, the technology is really changing and you are on the road to autonomy, connected vehicles are really big, but the industries are changing, the technology is changing in all these different industries. And what's exciting for us in automotive is that we get to see what's happening in these different groups.

So Flex is a Silicon Valley based company, and so more technology focused. And our Automotive team is comprised of automotive professionals. We're located in Detroit, Michigan. Our top team has about 470 years of automotive experience. And so what we've done is, instead of being a Detroit company going to Silicon Valley looking for technology, we're more of a Silicon Valley technology company coming to Detroit.

So, we'll talk later on about how that affects our strategy and how we can use the technologies from these different industries to bring new technology to automotive at speed and at scale. So, basically this cross industry insights allow us to take new technologies that we see. We see just about everything that happens in Silicon Valley. And we have a team out there that goes through what's happening in the different industries and tries to identify opportunities to take into automotive, develop the components, identify the proper technologies, and then commercialize them into scalable production.

This is just the Flex platform. We operate on three basic principles; speed, scope and scale. So real-time information, end-to-end solutions, and then this big physical infrastructure, that is all over the world. So, if you look at the industry for Flex, it's really changed and we've evolved the model. If you go back like to 1995, Flex did a lot of contract manufacturing. Actually it was just the server industry like outsourcing circuit boards. So, everybody was just making circuit boards [indiscernible] (6:45) on a build-to-print basis.

If you go down to 2005, it became like a labor arbitrage, where all of the manufacturing then moved to China. So, cost became a big issue. And a lot of companies moved over to Asia to reduce the cost. And if we look at like what we did in 2015, we call ourselves Sketch-to-Scale, so this is like build – this is like design work. And in Automotive, our design group is about – we're about 65% design related and 35% like build-to-print.

But the rest of Flex is now really focusing on what we can do to own the designs. And what this has done over the years is, we were asset-light and low cost, then we had Electronics Manufacturing Services, and then, finally, Sketch-to-Scale, and this is what I talked about earlier in terms of how it's evolved.

So really, when you're doing like build-to-print work, you're really in a cost-based discussion with purchasing; with a short lead time and just taken a product, taken the print, and doing a manufacturing. And when we move the company to Sketch-to-Scale, you're really talking about revenue strategy and you're talking to the CEO, the CTO or the COO's with a longer lead time to plan and develop new products. And this is like the focus of our company.

So, when we look at how we're accelerating from build-to-print and Sketch-to-Scale, if we go back to 2013, you can see that about 7% of our business was actually design related. It's currently about 23%, and our target is to have it to be 40%, with Automotive leading the way.

So, we think that the future, we're going to see a lot of convergence of different industries into automotive. So, we can already see technologies coming from Silicon Valley and/or consumer products and going into cars.

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017

So, when you talk about doing updates over-the-air or vehicle-to-infrastructure, vehicle-to-vehicle, we talk about augmented reality in cars, connecting the car to the home and connecting the car to people, as well as autonomous and connected cars. A lot of these different industries that we operate in, we see converging into the automotive space. And I think everybody in this room knows that.

And we think we're uniquely positioned to connect the dots. We look at the car as the center of our universe. We operate with investments in vehicle-to-vehicle, into vehicle-to-infrastructure; we're involved in wearables, where we're taking functions from key fobs and putting them on to wearable devices. In our consumer group, we build about 80% of the world's sports wearables.

Our smart homes, we have a whole connected living platform that we connect to the car, so we give our customers the opportunity to connect to their homes. We have a large digital health group, where there is more and more updates and more and more activity going on with your health, that's going to be going over the Internet. So, privacy is a big concern there.

So we've got a lot of – we've got a $2 billion medical business. And then, mobility and cloud is really an area that's new to us. So, in Automotive, we'll talk a little bit about some of the projects we have in autonomy and in cloud services.

So with that, I'll turn it over to Nicole to go through some of our automotive offerings...... Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. Thank you, Chris. So just a little quick overview of the Automotive segment. Today, I think Chris kind of mentioned it before we're just about a $3 billion business, up from about $800 million about five years ago. We have over 14,000 employees, again huge growth, and over 30 sites in over 15 countries. We're headquartered in the Detroit region, and we have a lot of design centers around the region as well.

So, just to give you a view of where some of these are, again, we have over – about 20 auto approved production sites globally, and nine auto focus design centers, so wherever the customer needs us to be, is where we are. And on top of that, we have this massive innovation system that we're able to leverage in our Flex Automotive Group.

There's five innovations centers and some key hubs such as San Jose, obviously is our largest. We've got one in Israel. We have one in San Francisco, Boston, and also in Shanghai. And then, we also have 25 full design centers working across all those 12 industries that Chris mentioned earlier. So, really being able to leverage all these technologies and new innovations that we're seeing across all of these different industries, and again, leveraging that and bringing that into the automotive industry.

So now, Flex has content on over 450 vehicles with products in the areas of autonomous, connectivity, vehicle electrification, and clean tech. And we're providing these solutions to basically all of the major OEMs, and again, our split is about 50% to the Tier-1s, 50% to the OEMs. And most recently, we've been very engaged with some of the non-traditional OEMs that are up and coming, such as Waymo, Uber, NIO, and Faraday, and a lot of these other guys, whether it's in Silicon Valley or any other region of the world.

And this design work and innovation that we've been doing has been noticed by the industry, some recent awards that we've been getting because of this. There's a China Innovation Award for the wearable key fob that, I think,

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 Chris just mentioned a few minutes ago, that we did for one of our OEM customers. We had PACE Award finalist, which is a large automotive innovation award. So being first time that we submitted we were one of the finalists for a smart gateway module product, and then, also took that product to the same type of award in Europe, and we had a two time award there, so – we won for the product, as well as for our collaboration with one of our big customers Volkswagen. That was a huge thing for us.

And then, also a GM Innovation Award, that we got through one of our partners with AGM and some of their exterior lighting applications. So, a lot of good recognition in the industry. They're seeing our design and innovation, and it's moving forward...... Chris Obey President- Automotive, Flex Ltd. We'll talk a little bit about our strategy. We've really been focused on emerging market trends and emerging technology, so we do not want to play in the commodity type market in seat switches or window switches. We look for those technologies that are growing.

To give you a couple of examples, we build about 60% of the Ford SYNC unit. And when we talk about emerging market trends, Ford SYNC used to be on Lincoln vehicles, if you go back like five years, and today it's on every Ford vehicle. So, these are the type of trends that we look for and the type of products that we look for.

We are second largest company. Our customer does electric power steering. Again, if you go back like five years, it just started to go on vehicles, now it's about on every vehicle. Our third largest customer, we do the electronics for LED lights. So, it used to be just Audi and now it's like on every vehicle.

So, that's the good news as we've been able to ride this exponential growth. Bad news is, it's flattening out. So, we're constantly looking for new product areas to expand and to ensure that we get exponential growth above the industry average.

So, we based our strategy on the megatrends, I'm sure you've seen this before where – go back in 2010 it was safety, then infotainment started popping up, during that time period. Right now, we're kind of in the era of software and data management, where that's really popping out as like a new business to pursue.

We're going to see artificial intelligence and augmented reality, and 5G coming in. And then, finally, the road to total autonomy in automotive. So, as we move through these different segments, we take and adjust our portfol io accordingly to make sure that we're on – we're working on the products that, that we believe are going to grow.

And if you look at our approach, when we take a look at our product design, we have about 450 man-years of experience with our Automotive team. So, if I look at like our top 20 guys in Automotive, 19 of them have been with Flex for five years or less, and they all have deep industry expertise. I came from Lear Corporation. Nicole came from Meritor. We have people from TRW, from ZF, from GM, from Toyota.

All in our team with a lot of good connections into OEMs and we have this globally. We became a top 100 supplier. I think we're number 77 on the list, from kind of obscurity few years back. We're working to leverage the other things we have with the other assets we have with Flex, and continue to do more and more design work as time goes on.

We also have done – to change the game, we've done some acquisitions. We've done like three major acquisitions over the years. Saturn Electronics in 2012, MCI in 2015, which gave us actuator capabilities, and

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 then, most recently, AGM Automotive, which is really a complementary acquisition we did last April, in interior lightings and electronics, and some textiles.

So, we had some overhead console business in Europe, AGM has a lot of overhead console business and interior lighting in North America and China. So, it's a good complement for us, and it's given us like a number two position in overhead consoles and interior lighting. So, it was a good one for us.

In addition to that, we've been investing in some of these start-up companies. So for our overhead console, we invested in Aito Touch, which is a haptic touch and HMI systems. We have a partnership with Savari, who's doing the V2X solutions, and then, most recently, Caruma Technologies, which does computer vision and deep learning for autonomous driving.

So, we're increasing our Sketch-to-Scale portfolio. So yes, as Nicole said, our four groups are we call autonomy, connectivity, clean tech, and vehicle electrifications. You can see some of the products that we currently have design work on. When you take a look at the boxes around, these are really places where we're increasing our capabilities to make sure that we're working on – we do a lot of work right now for several OEMs on compute pods, which are really like servers that go into autonomous vehicles. And the reason they've selected us as partners in projects is because we've been making servers for companies like Cisco and Juniper in our – one of our other business segments for 25 years. And so, as we add more and more lidars, and radars, and cameras and other sensors onto cars, you really need to have server type processing power, and we've got a lot of projects to help our customers do that because they don't have that capability.

Cloud services, I mean I think you've seen some other presentations, maybe in the private rooms about companies doing over-the-air updates; V2X, data monetization, and cyber security. So, cloud service is in area that we're investing in as well.

And the bigger projects that we're getting into now are those that are going on to hybrid vehicles and electric vehicles. So, we see that as coming in a little bit faster than what was initially thought, when you have companies like VW over in Europe, saying they're going have 30% of their fleets in there by 2019 or 2020. China is making a real push; lot of success, early orders with Tesla. So, we're looking at – we do DC-DC converters today. We're expanding that into other OEM's. These are high content for vehicle products.

We're also looking at inverters for hybrid vehicles and for electric vehicles, and we take that technology from our energy sector that does inverters for the energy business; wireless charging, a few other things on lighting. So, constantly looking at our portfolio on how we can get exponential growth and profitability.

So, when you take a look at some of the stuff that is changing our portfolio, we're doing more work on smart sensors, on sensor fusion systems, which are becoming big and going into production in 2020-2021, and then as we spoke earlier the autonomous compute pods, which will be starting in 2020-2021. So, some of this hardware for autonomous drive is going to be going on vehicles before the software is actually ready. So, we're involved with several customers on that top – type of product.

And then, we take a look at the fusion of interior surfaces and electronics. We see a lot of opportunity with active surfaces where on your door panel you can have an active surface that has HMI on it that will take the place of your seats switches, of your window switches, of your heat and cooled seat switches, mirror, actuator systems, all going into an active surface. So, this is something that we see coming – today, we see it coming in like seven years, but who knows, next year we could be a lot further along.

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 And then, just the reason we invested in AGM is because of the interior space, innovated mood enhancing lighting solutions. As the drive does less and less, there's going to be more and more change to the interior of the car. And we also have smart textile, where we incorporate electronics into textiles.

So, we've been accelerating into Automotive growth. These are the business wins over the last few years. They've risen significantly over the last three years, as we've gotten into more higher content per vehicle product. So, last year, we had a record year. After Q1, we had a record year, so we think that we're going to continue that growth, as there's more and more interest in what we do with our customers.

We take a look at the Automotive growth that we've had over the last few years. We were on 98 name plates, back, like five years ago, now we're on about 500 name plates. So, we've got content on product all over the world. Lot of it had to do with three major acquisitions, but also a lot of it had to do with organic growth as well.

And our content per vehicle continues to rise. We're at about $118 per vehicle today. We see that going up double-digit, a big jump in FY 2020, as these higher content components start going onto cars.

This is our growth; over the years, you can see it's about a 35% CAGR over the last 11 years. So, really had significant growth. We anticipate that growth continuing. We do have booked business, just like any other automotive Tier-1, which is in the high 90s in FY 2018, high 80s in FY 2019, and 60%, 70% in FY 2020. So, a very good stream of booked business, double-digit growth, and no deterioration in margin.

So, our strategy, we feel is positioned. We're focusing on the megatrends. We're constantly evaluating our profile to make sure that we're working on products that's going to be relevant in the next 10 years. We're combining the innovation, and disruption, and collaboration that we have with the other segments of Flex to bring in new technologies into Automotive. Leveraging our customers to get more design work and then building capabilities to get us into intelligent systems and solutions.

So that's pretty much all we had for the slide presentations.

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017

QUESTION AND ANSWER SECTION

Paul Coster Analyst, JPMorgan Securities LLC Q This is awesome. Thank you so much, Chris. I've got quite a few questions. Let me kick it off by asking you, at one point early on in the presentation you talked about the growth rate moderating a little bit. And then, at the end we saw a slide, which showed a 35% CAGR, and then a 10%-plus CAGR moving forward. What was it that you were referring to when you talked about flattening growth, is it just simply the lure of large companies or is there something else that you're waiting to happen here? ...... Chris Obey President- Automotive, Flex Ltd. A Well, I think, when you look at the industry, we have flattening growth, at least in North America. I mean, there's varying opinions as to what it's going to be, but some are calling for minus 2% North America, plus 4% in Asia, plus 2% in Europe, so plus 2% overall. And what we like to do is balance our portfolio to make sure that we're on exponential growth trends, and that's what I meant by that...... Paul Coster Analyst, JPMorgan Securities LLC Q And so when you said it was flattening and you're only looking for, sort of 10%-plus in the near-term, is it that you haven't yet found those, or are you just setting a low bar for you...? ...... Chris Obey President- Automotive, Flex Ltd. A No, no, we have them. So, when we looked out in the future, I think I showed that chart that showed our growth rates in the next three years growing 10%-plus, so that's booked business...... Paul Coster Analyst, JPMorgan Securities LLC Q And it looks like it's going to accelerate in 2020, why is that...... Chris Obey President- Automotive, Flex Ltd. A That's where we have some of the higher content product going in. So we're doing a lot of work with 48-volt DC- DC converters, and then, also like body domain controllers and sensor fusion boxes, which are going on vehicles. So, a lot of this is, you know just kicking in during that time period...... Paul Coster Analyst, JPMorgan Securities LLC Q And for those of us who are generalists and don't know the auto industry so well, what do those products actually point to? Is that the growth in EVs or autonomous vehicles or......

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 Chris Obey President- Automotive, Flex Ltd. A I think when you look at the DC-DC converters; you're talking about hybrids, where we've got two battery systems a 12-volt and a 48-volt. So, those converters are required to – as more and more electronic content going vehicles you need more power...... Paul Coster Analyst, JPMorgan Securities LLC Q All right...... Chris Obey President- Automotive, Flex Ltd. A And so companies like Audi, like Ford, GM, Daimler, everybody is now going towards – they had a different strategies a few years back and it's pretty much singled out to 48-volt DC-DC converter.

And then, when you go into EVs, where actually in hybrids too, you have inverters, which moderate the power. And so, we do inverters in our energy business, and we've taken those solutions to several customers, and we're working on several projects and those ought to kick in around that 2020 time period as well...... Paul Coster Analyst, JPMorgan Securities LLC Q Which brings me to one point, which I was surprised by the omission of and that was batteries because I know batteries matter to Flex [indiscernible] (26:00) large as a strategic initiative, and yet, you didn't make an explicit mention of it here. So, what's going on there? ...... Chris Obey President- Automotive, Flex Ltd. A Yes. We've never really – we looked at doing battery management systems a while back, and battery technology isn't – not really our forte, in terms of – if you're talking like lithium-ion batteries they're going to go on EVs. So, that's just a space that we don't participate in...... Paul Coster Analyst, JPMorgan Securities LLC Q You're not going to be in highly roboticized manufacturing of batteries [indiscernible] (26:35)? ...... Chris Obey President- Automotive, Flex Ltd. A That's not in our current strategy, no...... Paul Coster Analyst, JPMorgan Securities LLC Q No, it's not. Okay. All right. And then, the other question I've got, which – maybe a little naïve, but I'm going to ask anyway, and that is, whom do you compete with? I mean, are you actually competing with the traditional supply chain in the auto industry? Or are you now competing with your EMS peers or with the OEMs? I mean, how does that all shake out?

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 Chris Obey President- Automotive, Flex Ltd. A Yes. As we do more design work, we don't compete obviously with the EMS guys, but there are still several Tier-1 customers that will want to outsource like circuit boards, circuit boards only, which really isn't our interest, we like more value add. So, there we'll see an EMS peer popping on the RFQ package, but those usually don't generate the margins that we like to bring home...... Paul Coster Analyst, JPMorgan Securities LLC Q So – but the traditional auto supply chain, are you now the sort of new kid on the block there. I know you're competing with them. And if you are, is the value proposition all of this tech knowhow you've got or is it either massive supply chain – global supply chain that's much more electronics-oriented perhaps than those guys? ...... Chris Obey President- Automotive, Flex Ltd. A Yeah, I think, we go up against just about everybody you've seen over the last two days, at some form or another. But I think the value proposition that we bring in is, over the years we've got our customers attune to the fact that we're maybe a little bit different in that. We do have the capability to see technologies across multiple industries and they're interested in that because they can see the convergence from consumer products going into cars. And they understand that we probably have a faster track at getting that done – a company that's totally dedicated to automotive-only...... Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. A And our hybrid approach. Just that we have a hybrid approach. We'll work with our OEMs, whether it's just joint development or outright full design capabilities or any [indiscernible] (28:32) build-to-print, or a combination of everything above, which is a little bit different of a business model than some of the traditional Tier-1s.

And also, they kind of like the fact that we have more of an open development business process with them. So, we're not necessarily saying they have to take our technology, and that's the only thing, so we're very flexible working with them. And they've been very open to that model and coming to us for that...... Paul Coster Analyst, JPMorgan Securities LLC Q I'll yield to the audience in a second, but my last question is that. I believe that this EV adoption curve is going to be much faster than people realize for variety of reasons, but if I'm even partly right then the manufacturer of automobiles will be transformed, of course, their cycle times will probably start to compress dramatically. Do you agree? And is there anything in the strategic dialogue you're having with your partners VW included, that gives you a specific insight into that transition to EV and their readiness to ramp up the CapEx and transform their entire supply chains? ...... Chris Obey President- Automotive, Flex Ltd. A Yeah, I think, yes we agree. And I think we just see that every day. We're seeing companies that are saying they're going to accelerate their curve like VW, like Volvo, and especially in China, where they're kind of mandating electric vehicles.

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017

I think the challenge we see there is – in one article I was reading is that, when you add up all the aspirations of accelerated EV production and then match that against the available battery production, there's like a gap.

So I mean, you mentioned batteries, but I think we need to have more battery capacity to meet these demands, and I'm sure that there's companies out there that will accelerate their production as well. But in – this discussions we've had, yes, sure I mean we talk about working on things like converters, that wasn't a discussion a year ago...... Paul Coster Analyst, JPMorgan Securities LLC Q And these are specifically for EVs rather than...... Chris Obey President- Automotive, Flex Ltd. A EVs and hybrids...... Paul Coster Analyst, JPMorgan Securities LLC Q ...hybrids – and hybrids. Okay, let me open it up to the floor. Any questions? ...... Q

So you had a slide with your content per vehicle there, which is roughly at $150 I believe at this point. I was wondering if you could break it or give us some color, or break it out between like how much of your content is on the interior and exteriors of the vehicle because looks like you have content across most parts of the vehicle. How much is interiors/exteriors versus how much is really connectivity or V2X, et cetera, that you were referring to? How does that content per vehicle break down between the parts? ...... Chris Obey President- Automotive, Flex Ltd. A Yeah, we really don't break it down like that. But, I can tell you, if you go bumper-to-bumper on products that we offer, we do electronics on headlights, we do actuators on mirrors, we do – if you open up the hood, we do battery cables, we do small wire harnesses that connect from the big body harness to the doors, to the lights, to the – if you go on the inside of the vehicle, we do infotainment systems, we do overhead cons oles, we do all of the interior lighting, we do some floor mats; and I think if you work your way to the back of the vehicle, we've got content in the rear lights as well...... Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. A [indiscernible] (31:58)...... Chris Obey President- Automotive, Flex Ltd. A Yeah, yeah. So anyway, we've got a lot of diverse product. We kind of like that portfolio split because it keeps us out of if there's ever like a run on – let's say, we don't have a lot of engine components. So, if you do go to EVs, it doesn't really affect us that much. And so, what we're focusing on is, just making sure we have product that we

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 think will technology – where will increase the content like in the lighting space, where as the driver does less, they may want more lights, more HMI that we can offer. So, that's kind of how we focus our portfolio...... Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. A But I'll also just add to that, that when you look at our four segments, so there is vehicle electrification, clean tech, and connectivity, those three are pretty much split equally right now on revenue basis. Autonomous is smaller, but probably one of the fastest growing that we see in the next several years, [ph] we're (32:48) coming up, obviously, with some of the sensor fusion boxes and the compute pods that we're working on...... Chris Obey President- Automotive, Flex Ltd. A But of those four product categories, if I had to break it down, I would say the most growth will come where, Nicole said, more on the connectivity and autonomous side...... Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. A Autonomous...... Chris Obey President- Automotive, Flex Ltd. A So, when you look at the increase in content per vehicle it will be primarily in those categories...... Q

So, I'd like to ask a question. I think one of the themes of the auto industry generally is, just this idea of how much investment is needed to further these electrification and autonomous trends, and that the automakers face, like a bit of a capital crunch and they're leaning on the suppliers more.

Now, I was wondering, how you see this benefiting you maybe from one of two different directions or maybe from both directions. Firstly, we heard from a lot of suppliers of components that automakers might consider non-core like doors, and axles, and drive shafts, and sheet metal, today and yesterday that, they're expecting as the automakers focus on autonomy and electrification that they're going to want to push a lot of this stuff to the supply basin, and you can assist with things that they no longer consider core. But then, alternatively, they need help in pursuing electrification and autonomous, and do you also see yourself, in addition to just providing components, maybe as like an engineering house or providing services for them to help them in those efforts? ...... Chris Obey President- Automotive, Flex Ltd. A We'll do a multitude of things for our customers. As far as like taking on traditional products like axles and things like that, that's not in our strategy. But certainly, when you see like – if you take like a mid-sized vehicle and it's got 50 million lines of code and you take a fully autonomous luxury vehicle and it's got 500 million lines of code, where there is software, there is hardware. And that's kind of the play that we have. So, as we move more into more complex modules that require an electronics manufacturer to really look at and co-designed with customers, that's really what we're aiming for......

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 Nicole Stevenson Vice President Business Strategy & Marketing, Flex Ltd. A And I'll add also to that one that there's also some plastic interior, like injection molding companies that might do just the instrument panel that they do not have electronics capabilities, that could be a good partnership for us, a little work with them and put a joint solution together. As the – there is this fusion, that Chris talked about earlier with the interiors, smart services...... Paul Coster Analyst, JPMorgan Securities LLC Q So last question...... Q

When you look at the automotive industry, of course, it's easy to focus on the OEMs, but on a go forward basis, the infrastructure side of this industry seems to – need to accelerate its delivery for the even the OEMs to actually have a business case in the long run. Are you working with that side of the business as well too and what do you...... Chris Obey President- Automotive, Flex Ltd. A Not at this point. But yeah, you're right. I mean, it's like, if I think back like five years ago – what was going on in automotive, we weren't really thinking like we do today, in terms of speed, in terms of using different technologies from different segments. It was more like the old school product stuff. And I think we're really well positioned because of the other parts of Flex to be able to go through – navigate through these next 10 years without significant loss.

I mean, you read articles that will say that 75 of the top 100 suppliers won't be around in 10 years. I don't know if that's true or not. But certainly, if you're like focused on, 100% on internal combustion engines, you might want to rethink that. So, there's definitely going to be a lot of shifts, and we think we're pretty well positioned to navigate through it...... Paul Coster Analyst, JPMorgan Securities LLC With which, I will call this session to a hold, and thank these people, who are standing up here and making the trip from California – or Detroit...... Chris Obey President- Automotive, Flex Ltd. Detroit, yeah...... Paul Coster Analyst, JPMorgan Securities LLC And I'd like to thank Ryan and Samik as well for hosting an excellent conference. Thanks, gentleman......

Flex Ltd. (FLEX) Corrected Transcript J.P. Morgan Auto Conference 09-Aug-2017 Chris Obey President- Automotive, Flex Ltd. Yes, thanks.

Disclaimer The information herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete or error-free statement or summary of the available data. As such, we do not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of the information. You must evaluate, and bear all risks associated with, the use of any information provided hereunder, including any reliance on the accuracy, completeness, safety or usefulness of such informatio n. This information is not intended to be used as the primary basis of investment decisions. It should not be construed as advice designed to meet the particular investment needs of any investor. This report is published solely for information purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an offer to buy any security in any state where such an offer or solicitation would be illegal. Any information ex pressed herein on this date is subject to change without notice. Any opinions or assertions contained in this i nformation do not represent the opinions or beliefs of FactSet CallStreet, LLC. FactSet CallStreet, LLC, or one or more of its employees, including the writer of this report, may have a position in any of the securities discussed herein.

THE INFORMATION PROVIDED TO YOU HEREUNDER IS PROVIDED "AS IS," AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, FactSet CallStreet, LLC AND ITS LICENSORS, BUSINESS ASSOCIATES AND SUPPLIERS DISCLAIM ALL WARRANTIES WITH RESPECT TO THE SAME, EXPRESS, IMPLIED AND STATUTORY , INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER FACTSET CALLSTREET, LLC NOR ITS OFFICERS, MEMBERS, DIRECTORS, PARTNERS, AFFILIATES, BUSINESS ASSOCIATES, LICENSORS OR SUPPLIERS WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS OR REVENUES, GOODWILL, WORK STOPPAGE, SECURITY BREACHES, VIRUSES, COMPUTER FAILURE OR MALFUNCTION, USE, DATA OR OTHER INTANGIBLE LOSSES OR COMMERCIAL DAMAGES, EVEN IF ANY OF SUCH PARTIES IS ADVISED OF THE POSSIBILITY OF SUCH LOSS ES, ARISING UNDER OR IN CONNECTION WITH THE INFORMATION PROVIDED HEREIN OR ANY OTHER SUBJECT MATTER HEREOF.

The contents and appearance of this report are Copyrighted FactSet CallStreet, LLC 2017 CallStreet and FactSet CallStreet, LLC are trademarks and service marks of FactSet CallStreet, LLC. All other trademarks mentioned are trademarks of their respective companies. All rights reserved.