Jabil (JBL) 24 Sep 192019 Q4 Earnings call transcript

Greetings, and welcome to the Jabil Fourth Quarter 2019 Financial Results and Investor Briefing. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Adam Berry, Vice President of Investor Relations. sir. ahead, go Please

to investor quarter briefing. welcome earnings fiscal call and Jabil's and of fourth XXXX Hello

Dastoor. begin Joining Executive fourth and Mike Officer, on quarter Mark Mike me today's Mondello; Chief call results. Financial through walking us by are Chief Today the will Officer,

the review Following comments, our outlook. of strategy transition both Mark investor briefing into and these where the and will portion we day, Mike will

your questions. We will up then open for it

jabil.com posted entirety the of will call audio Investors within The on be recorded Section. for playback and today’s

fourth quarter slides, the during release, you In press are cover also videos call. find webcast Our these and available earnings will website. we conference corresponding information that on our this materials

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call handing beginning would you that with ask the presentation Mike, forward-looking slides our to earnings our statements. Before now follow using website I the over the on

to any whether disclaims result any new differ the events will that things, our other Jabil could we XXXX are year cause or information, actual outlook XX, Report uncertainties call, a An of obligation forward-looking ended conference and and among otherwise. and current list making these materially. expectations, on Form to other extensive on based this During identified our business. risks including, fiscal involving as assumptions update XX-K those and forward-looking for risks are statements, or anticipated Annual the of statements uncertainties revise in regarding filings. future be statements for Those forecast, results and or intention outcomes August

pleasure to call now turn over it's Dastoor. Mike With the that, my to

quarter begin our and I'm results. I fourth by very and fiscal Thank our today pleased everyone. fourth 'XX you, good morning, with reviewing will Adam, year performance. quarter

delivered extremely executed During the and both segments well consolidated strong results. quarter,

midpoint the quarter revenue Core increase GAAP slightly $XXX.X of fourth our guidance an representing income $XXX.X improvement during billion, Core year-over-year, earnings margin an per per was the of year core higher $X.XX. prior million XX% a came XX% for GAAP over share $X.X of $X.XX, income than Net in at million, year-over-year. quarter was operating was and the share diluted increase a the X.X%. our XX% operating diluted operating was earnings quarter. of

was net margin year. the year-over-year. per operating share net a full basis, year, $XXX operating earnings operating the $XX.X revenue XX% XX% increase of earnings million. income over of was For the million GAAP billion, an diluted for FY $XXX increase a the up net year-over-year core $X.XX was Core X.X%. per of GAAP fiscal diluted was year. representing year 'XX was GAAP share Core income income with on $XXX XX% million, of an prior $X.XX, for

to call results quarter. your two attention our items impacted during I’d GAAP like which the to

net you to of business due of services net of divestiture operations sale recorded in $XX.X of XXXX. preferred I million a non-cash distressed associated The one-time million. we exchange of stock preferred gain we networking during approximately charge in iQor in And we as net the XXXX $X.X space. in a on our secondly, stock quarter, of remind our charge $XXX million disclosed $XX resulted one-time in a the incurred of the exchanged with a tax will customer aftermarket million. we discontinued First, the previously

to business. $X.X our due billion, segment was year-over-year. to strong healthcare in 'XX results. was segment our DMS for Now year-over-year cloud, mainly X.X%. markets. for performance fourth another by margins This our points and by energy turning the XG FY year-over-year to our mainly $X.X automotive Revenue XX EMS driven the X% quarter segment XX% wireless, billion, up increased for and Revenue growth Core improved end to segment basis

were during for the X.X% the quarter. Core segment margins

the year. prior year, was consistent DMS segment $X.X revenue with our billion For the

XX% operating resulted income the core in X%. to basis expanding While for XX segment margins year-over-year. increased This points core

to strong customer launch As customer and mobility going the mobility an supporting relationship. our well. focus has within in update, extremely the year and business managing seasonal which costs The their began our QX on is a throughout contributed strong team's tightly execution

Therefore points in margin believe basis current mobility the overcapacitized a has future chain supply constraint by the though us to overall we for Reducing proactively and grew taking our allow our business DMS utilize cost our to overcapacity mobility continues structure. to efficiently be more capacity However, our are on footprint. would Even our assets we year-over-year, steps margins. XX and volumes. optimize fixed DMS manufacturing been normalize

believe, levels manufacturing forward higher support more As automation be look share across result we improvement. we ongoing We anticipate unit to process to volume we of as market able FY wins. increased largely and optimized efforts the footprint will through our a 'XX, of revenue

noncore million. estimated The our be $XX is component such, associated to with the cash $XX anticipated approximately to million. As expenses optimization are be activities

throughout XG billion, been well In retail 'XX, margins cloud, This with original value the areas new the business associated Core was mainly for well-received as our segment XX% XX as by costs and points discussed has in have the proposition basis EMS. driven awards decline X.X%. to of to softness and the energy semi-cap. to revenue the Moving our ramp wireless, above for FY infrastructure. increased we 'XX in declined FY year-over-year year year-over-year by expectations $XX.X

our flows sheet. and balance Turning now cash to

inventory fourth with of in and lower a coming six expenditure fiscal contracted XX million. QX, came quarter-over-quarter. in sequentially the for in slightly at anticipated, at $XXX inventory than our days, for decline capital levels quarter in million days $XXX As Net was days year expected full the

billion. at Our fourth in $X.X operations quarter were cash coming very flows from strong

strong in on stronger approximately of full came by year basis at the performance expected on to XXX invested year-over-year million. generation, flow fiscal XX.X% the year. return basis QX was a Core the grew XX.X% than result for a flow and points for fourth free $XXX cash for fiscal and capital cash quarter As adjusted

We exited debt balances with levels approximately to $X.X and core billion. of total cash the of EBITDA X.Xx quarter

the I via of wrap excess share am pleased up performance. XX%, fiscal year strong we adjusted of share to returns per shareholders million dividends As $XXX our repurchases of with million. 'XX, growth flows with in earnings very fiscal free XXXX cash and in fiscal Core $XXX

improved in build Moving flow and come expansion capital free forward, to earnings to cash meaningful margin working on efficiency. this we momentum hope growth future and and both expect positive through

over like on color drivers results our and XXXX call about outline share the brief video turn Mark in to we would and of I business additional for people. beyond, a to 'XX Before our fiscal our strategic the

Let's take a look.

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year. exceptional Another

In of fact, and a revenue record income. year in terms

flow As our while doubled Mike shareholders 'XX. and returning team a $X.XX, generated core per the fiscal buybacks earnings dividends. year-on-year, highlighted, this, increase of cash free On team of $XXX over share to roughly million XX% top through

healthcare, wireless, our were year, energy retail the top-performing sectors. cloud, and During

Another the way really nice all year around.

exciting is Moving working. XX. over These as a collectively diversified of used what fact four our But provide of three of previously, highlight for composition makeup our doing fantastic to of the balance range What blend catalyst our and products markets. is me to ongoing Slide multitude I is income. special. a track I to that portfolio, of record. the story. bar worthwhile charts to isn't The the commercial we're and a diversification backdrop Jabil's broad thought sake a said it of impactful comprised A our to is portfolio year all is end taking performance being

attention to headed start, to XX. carrying into where momentum our positive fiscal now your we’re To beginning team year turn with Slide is I'd like 'XX.

Our strategy remains is continuous and unchanged.

our and financial team well sound. leadership outlook our path Our understood by is is

During product X our product the to reducing earnings years, past X substantial growth while revenue single dependence any family. drove on or

leverage margins For our we and network our to squarely plan fiscal with operating consistent efficiencies strategy within through control. primarily and 'XX, expand

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see attention and for optimize, Slide areas management's to execute will fiscal XX, you have Moving key three the 'XX: deliver. that

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and As is China charge this be action million our around proactive largely associated with Mike will the concentrated noted, footprint. $XX

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automation, endlessly manufacturing. pursue additive make we're continuing in of investments factory-of-the-future, we the As and to areas robotics our

deliver per fiscal for XX This outlook to management's for cash share, year. earnings year-on-year. the to $X.XX me So of when expansion core basis 'XX. range of core to of a translates to compared to $XX top billion, plan fiscal of million free point flow XX% $XXX On revenues in we this, growth and excess in 'XX. in that X.X% the We margin deliver operating brings margin plan a

X-year our capital fiscal Mike where all, framework. comments we're even will year we’ve information he I where All going. follow-on more will in allocation about provide on good his been. where during offer also feel about on 'XX I feel better details

Today's basis our point outlook increase shows you operating on you an If and in now per the fiscal vantage point earnings management's year to core and XX to a outlook of X%, fiscal company scale. based The relative flip to core point fiscal year margin deliver whether relative XX, share expansion scale neighborhood relative 'XX. to side-by-side. for $X will please XX over solid 'XX a for of months, outlook 'XX 'XX 'XX and basis results the a is for fiscal is or financial XX Slide absolute your well-positioned coming see

of unique the XX. Jabil of address our and is simple our plus parts. Now team far some structure turning Slide plus greater and to strength than our I'll culture. culture the The structure, paramount team

divisions our packaged for so were facing are customers. it all solutions and together market where Our neatly comes

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turn call will over Mike. the back I to now

am Thank our you, flow expansion. our excited next we within believe as business continue will carry through Mark. and years, natural I the margin towards and underway progression with momentum cash I two to the fiscal it

financial how I plan will next that the you our and a on commitments. strategy our framework highlights execute minutes, we on provide Over few to with deliver

accretive cash cost offer the positioned deliver same higher to years have strong higher and our the expanding we on return focused margins in margins deliver profiles targeted SG&A worldwide on fully streams. that At we’re with to ensure the over to focused areas growth flow are we’re to that position Jabil of the footprint. few leverage company time, across last business optimizing First, margins

annual Secondly, These in optimization focused and delivering $X.XX projected from working priorities compounded generating gone focused flow a core FY to through growth free of earnings creation. are in That’s strong a disciplined FY value we’re 'XX share cash and management. finally, has CapEx 'XX. on rate. aligned $X.XX capital on long-term And per XX%

that our gives in us and is FY our and 'XX FY commitments working positions 'XX on in performance deliver confidence to beyond. Our me strategy

Next low healthcare the going basis our core DMS I'd and for this what’s away on expectations FY The in packaging single-digit 'XX. mix year shift XX revenue end 'XX market, for we business. replace expectations to of in along outline segment. FY of We're with on lifestyle points $XXX by is considerable expansion by business to devices our million in take In I anticipate first like margin our adding expecting revenue. key to 'XX, growth. of revenue FY edge mobility margin operating in revenue discuss $XXX underway this million like and

changes announced of in and technology products being devices continued business and by three The being factors: the packaging profiles. our leading lifestyle flow our driven driven end-of-life not product pursue products other that is decline edge our certain to not to and decision transitions, strong of performance margin previously base our in ramp strategic meet The in cash and and healthcare continued healthcare by is growth collaboration. business our do

our excluding end be noting, that ramp we 'XX ongoing worth that will noting is 'XX, the X.X%. It resume in worth we healthcare, growth. all it's markets fiscal also to beyond margins estimate all anticipate three said, closer DMS FY With to

and segment the diversified feel about drive building excited are and improving mix we our our and portfolio DMS sustainable balanced will more earnings We we’re flow. in cash

Turning to EMS.

we FY growth a of part in diversification expect strong growth 'XX by capabilities Following automotive, expansion of is in driven increase as you X% focus towards we generation. Within margin desire tremendous and two the to flow revenues shift leverage driving intentionally autonomous year-over-year cash see as our and customer's by EMS electrification. to years our efforts, our

FY programs In business, slowdown, an customers that and realities team excellent base focused of market this aggressively us semi-cap, winning market the strong expansion the position diversified done during 'XX the managing to the a job of on current new recovers. our for and has is cost should once

over technology. out the wireless being worldwide. In market we've to In will years. market to in by continues years continue that as offset to over XG the to The last XG seen X continue infrastructure cloud, significant we transitions as next to X growth growth roll two XG, and XG expand the XG see the newer is

to to as proposition Our wider the cloud ODM X team companies, provide U.S advantage Tier well better from continues a through EMS cloud be on well-positioned to value providers focused as hyper-scalers of ongoing is capabilities. and shift which take

in markets markets that be a serves confidence flows earnings to in future business EMS longer end cycle energy. our blend industrial life like products, in due of or cash Today regulated of it and diverse these provide areas

domain cash of believe volatility of in deep in have we in margin will result and EMS, capabilities, predictable all a earnings investments XX we healthy Putting it flow. in expect lower core complemented We we expertise expansion basis together all and which by more 'XX. made fiscal points

As I growth. we overall earlier, optimization expanding through mentioned are core our focused on cost targeted margins and

This basis of in expansion be mainly As FY will points a driven 'XX. expansion well result, XX deliver by factors. positioned margin we two to are core

over to was adding of consolidated diversification First, revenue years our led offer growth billion markets results. these These and manifested in sustainable we more seen as two attractive we've excess by programs. strategy growth last recall, you revenue profiles. now engineering that cash ramp complex to targeted in growth our tremendous up $X at flow as stronger and end in will the driven margins This wins

and 'XX during year core for In you expectations to quarterly my mentioned XX to $XX beyond, through And of steps the year we’ve FY and to QX 'XX. flow the 'XX. million benefits to points income in shape margin restructuring the as contribute or result We We begins as This mainly earnings half in million proactively benefit then these FY these in fiscal of the to an second fiscal expansion operating core costs anticipate is your of footprint. anticipate in important 'XX. basis consolidated FY of will consideration manufacturing profitability. remarks, $XX 'XX improved earlier I our awards maturation optimize net taken

of will This guidance to Net now expected with strategic $XXX for be combination are fiscal fiscal capital to future maintenance and growth. our investments consistent come CapEx for through expenditures 'XX. 'XX. both year Turning a year million

our a about CapEx moment. maintenance for talk Let's

$XXX countries. drive sites factories profitability. annual footprint approximately in investments higher of automation maintenance in our digitalization, across such our factory At areas deliver scale, inclusive now million in We us and IT, position investments. will XX and This this require have is optimization which hundred as to

are flow. will expansion of We that investing also margin areas deliver targeted strategic strong our business cash in in and free growth

CapEx will industrial, be and targeted and markets growth strategic as wireless, packaging. end Our energy such automotive, retail in XG healthcare,

improvements continue to Working expansion working mainly flow. cash 'XX, ability team's FY we Turning factors result earnings free inventory cash now strong to of with improved will flows to flows me generate market capital manage $XXX a CapEx come efficiently along our in with and cash In growth million deliver as 'XX. through normalize. than execute will These adjusted to continues disciplined ability gives free our confidence FY the levels coupled and component as moderates our of to in capital. more

Turning allocation our now framework. to capital

two Over the cash next expect generate years, to we flow. significant free

this be high had over appropriate next level capital and I you allocation our plan two framework it how through Given we would deploy thought dynamic years. our a to walk capital to the

organic beyond targeted framework return of capital investments and will structure. and to combination share the prioritize our repurchases capital a Our M&A commitment our dividend, optimizing

With $XXX dividends. on form we return to of more the announced track are and million billion the than morning, buybacks shareholders in to $X authorization this we

and an all does return We us mean? to ratings will this the shareholders, afford to what which cash maintain So structure. investment-grade our capital generate capital ensure remain we flows, to maintain comfortable optimal strong with ability ability

a billion, year-over-year the our quarter slide. increase billion. expected first revenue segment basis XX% now $X.X revenue is X% Turning the basis EMS year-over-year to to expected on DMS a on while $X.X increase segment guidance to to on next is to

of be of $X.XX expect 'XX billion total an in company the increase range to to range. first quarter at We for of midpoint $X.XX approximately of the the revenue billion X% the fiscal in

of with operating in in X.X% range of be to earnings in share diluted the range estimated to income be million XX% the is $X.XX. in Core operating $X.XX. the is expected GAAP to estimated XX%. range $XXX core range range to $X.XX earnings to to in of Core operating to the million. million diluted of of margin of earnings be GAAP is the per to rate million in core quarter to the income to to $XXX X.X%. is $XXX $XXX expected be $X.XX in the range is The on tax be first estimated share per

better years, our environment our assumptions In our high-level order of are on be to view to embedded few would the and that next provide market in 'XX assumptions we thought now Turning FY for the over some 'XX. helpful provide it targets. clarity FY business to and

can We As efficiencies, my business in transition Slide awards well-positioned the scale. capital We capital plus And working core to final to allocation are diversified along to X% power $XXX million focus begin core position you core believe really the earnings XX, with continue to FY this we importantly is a 'XX creation to to free aligned as new together on believe deliver of our our margin us Jabil. we expansion $X see cash shareholders. and balanced and maturing with value long-term approach in deliver in focused driving EPS balanced framework margins in and flow.

to call time will for thank the you turn your now your like today to Adam. I'd Jabil. interest over in for back and I

Thanks, Mike.

I'd now session. to call will our agreements, not customer per our questions. begin participants cooperation. We customer our remind specific any will appreciate we product or Q&A your We address that like

now are ready for Q&A. We

from Tindle [Operator from Raymond today Instructions] you. Adam first James. is question Thank Our coming

live. now is line Your

wanted very $X. I EPS 'XX just you much start Mark, Thank and fiscal morning. good with to target Okay. the of off

'XX as 'XX. fiscal about out sit similar repeating EPS the that guide of EMS confidence growth composition mid-teens implies drivers on the from growth, J&J fiscal 'XX 'XX some can think year we the growth 'XX, burden we When identifiable I gave think as last the $XX not what out. thought 'XX costs the taking the things costs are about to year-over-year. Because of that Hoping growth now you rate, and getting that EPS you’ve driving if same EPS that that today? for million far that to full touch got to there's guiding to you growth of you run like from

Adam. Thanks,

for Mike with a his in assumptions look on J&J, that believe them. you going certainly calendar recovery from to think as 'XX 'XX to to see summer start semi-cap our also we we think and 'XX, normalization few or we'll going I 'XX what's -- in at of business and touched healthcare shared in us his see with in on a XXXX. The I opening remarks So

be that believe then us to our believe across will beneficial as well. about number And early then sits. I 'XX. if the we when into those get I touch enablement think of mid on carry good for I also the business the funds as China is $XX that that the think million I timing will And real will So our 'XX XG quite that fiscal Mike at talked a I about, of of use the Adam, business and start we into moment where inside think sectors, and

but that guys stack decided outlook in a execute, it's front at got of with how fiscal in look up I 'XX to and all all, that’s to us. squarely the give we right So, to I’m you see now pretty we all and pleased

in place free level you’re of of growth just expecting touch like achieve to of fiscal 'XX, follow-up you this Okay. for a That’s could free helpful. exceeding flow original And and maybe a And obviously I just for is on very discipline you focus, the goals flow cash cash you the it performance had does And but been Mike, same put attenuating. this. maybe know some sound has your fiscal 'XX. so in as kind strong

or kind the authorization you you decision, last like up that want taking if approach just this of which buyback and year. a did conservative to So offsets And the would with be are more allocation wrap there ever, helpful. capital largest is is it

previous our with in pleased consistent So, performance flow yes, extremely Adam, cash QX years. with

good AP, bit are strategic in puts little The put will all up do through, feel little side taking we and working they for a conservatism and bit on in as there's capital cash. we capital obviously forward, optimization back really FY we down all that working I Yes, improving. flow. so million other efficiencies disciplines of place includes the but coming there, go inventory throughout on there's collaboration. about place efficiencies takes There the on of free when lot levels those come 'XX. side Maybe the the $XXX the AR, a be our cash pieces Some go of it in inventory are put of and some and plus we a out

the mentioned optimization about $XX side as we’ve cash will on think of well. million out I go

I good clear feel think I basis, the think over path I years trying a think two it about out Capital what the that. a So the good and allocation, on drive number next free do XX%, lays years. next we're starting approximately point dividends is target over feel is cash flow and and the buybacks in of we to share the our to two

very Got That’s … it.

This is Mark again.

it your talk, Adam, that prepared in While to I 'XX I popped around another was it in head my listening to Mike mentioned my remarks. question somewhere thing is, alluded to and think I

side, beneficial looking at that that sales buy in 'XX anybody and time in posted right or were 'XX. company, both extremely and posted think the taking be and will interested to side contribute terms call activities after I videos be the some also for will of will

year. strong it a on congrats Appreciate and

Adam. Thanks, Yes.

Thanks.

you. Thank

Our question Research. Cross from coming Steven Fox is next from today

Your live. is line now

I’ve questions. morning. Thanks. Good two

year-ago, process can the talking when heard excess concerns, First fiscal you capacity some I I more little bit a to think you off, to some but that growth you 'XX. out into went talk a take about about also out were there capacity then wireless get a which deciding on side. were

decision made color had And would I then of programs it is came some a types mismatch just different love the I up capacity, that on that. So happen. a follow-up.

in leadership we're -- around fact that the water pipe. just some in Mike Market Yes. a team no lack fascinating for the in out me. and we're business the then commentary. ever look as will shape. health share more at Steve, add team let is, What of done me of health today, take smaller a we work swing today business at tremendous is positioned they’ve last the been. of maybe Point indication the XX Green months good some good is -- through we done Jabil we've if capacity getting it felt as And job we lack word, better of a The to have is has of where taking is

of looked that a And the out capacity. good we take needed at to pretty so all There out small that and of regardless. of capacity this timing be to said, taken is some subset majority term. feels half reflected, vast certainly to and we better wanted you our is will, the lack again financials be really our 'XX of if 'XX for kind a But of properly back

the decision of I a you think So add, appropriate. and anything And if decision good I think don’t it's the is timeliness Mike. to had I really know

some manufacturing so that improvements can market the about incremental of sort gives process -- put revenues XX put share. we’ve a automation There's and us over really months, we share. that capacity. our makes no through confidence last that of reduced us market loss place in we've into And more -- we And good that of the feel

are In fact, share. gaining market we

So overall, right decision I contributes think it’s DMS to the margins. it and

the do want you very of customer through that you in margins doesn't clear in but the message for as the XX relationships the new Jabil then seem optimizing execute what they to that more the loud terms Thanks. programs. But to improving manage came forward in XX helpful. be pipeline, going follow-up, Thank how in maybe to months? to as a terms add cards next and And you have that. and That's just of you

it's in sure the not Well, I’m cards. so not

team. life we certain healthy. so strategic done and the a of pressure the predictable terms more play really that overall know well, nice fire a off Taking years has job X of, on pressure been of last of think gas, factories, well you to are overall the reasons. to I Steve, X, think hair lot in we've stable, of bit I One of lot for times on foot bit markets in product thought the in our more the the in longer put both we to on our there's for is We cycles. portfolio a is, terms a a growth Mike number addition our of at then, bit one right selection improve of certain And markets, continue that that, a things think elements two a I.

it, of car we’ve So reset terms hair, got division. for and that of good way I down business look if time sectors each our it the and opportunities, hurdle think in business we the polish is slow now just a up, rates it's but to at -- refine

what come revenue 'XX. could a take expect do attenuation to think there's without creeps earnings or So I margin will and opportunities if in any is, with that it additional either we 'XX high revenue you -- probability up, if on

That’s very going helpful. Good luck forward.

Steve. Thanks, Yes.

you. Thank

Suva from next is coming Our Jim question Citi. from today

is live. Your now line

called are the I much, math around numbers my Thank strong outlook full-year X.X%. you were and think seems Maybe But slightly might be it you very or If the my of like the Edge looks you is right the what’s down closer 'XX is X%. growth Can wind the X% up QX but under growth like math of that, kind wrong is wrong, Thank guys. on this right expecting sales you there? rate us through to and fiscal about linearity, a it of on biggest and year device you. my the exiting category due it there? is off going progresses, business? that is And walk kind challenge as tail lifestyles is to

Hi, Jim.

your think math is I right.

of growth throughout kind year-on-year, -- side rate QX be of look rate, QX year. think going to and the I QX double-digit Q is if at on you EMS to the the the kind the then growth normalizes QX

of we little abnormality, bit of businesses a hadn't is any that's I One think of the because twofold. QX year new was yet. a last ramped

in bit distorted. the kind little denominator rate So of a was growth the the

about comps the growth the of timing based think tougher back on we of they the year half up with 'XX. if think the QX end laid towards QX, kind I of in new with and QX and ramps and I business how

also of an for where So as of we're and area part then completing of comps kind half first comparison the 'XX, is really the overall back ramp. well half calendar of is fiscal 'XX the is it 'XX which year-on-year kind as of

it's So, measured. overall, really your from other and I than correct take comps that are the wouldn't about how anything is math away

And And It year-over-year $X.X is bit. the subdivision about right? help that a to edge that you that just going billion, little then, and or be sub-segment challenge Mike, looks device lifestyles. correct down biggest us the is understand like called

in edge I edge are Jim, say lifestyle, overall plays, DMS playing would there. our that would what edge we I there's that fair where on say device, call items observation. device device segment that's And a and three

but the on think on going I spoke So device term, number different shows our that of $XXX products billion year-on-year a numbers, exact is our That's year-on-year. -- bucket. a the few to it markets, there remember I Number $X.X it edge fancier $XXX of billion. for call for lack green, from about million, significant slide lifestyle in $X Mike a blue end million one for is, down reasons. that to

are meeting products is, technology XG. changes life. to replaced not going and And follow-on structure number two that, for edge priorities. products repeal just packaging. decisions $XXX just and not gets three is on certain it into about flow The Jim, as Number or those million really things based cash some either out those margin is, healthcare of going by management's plainly products number nice a device products $XXX of are from healthy a So pursue prepare thing through outlook made million,

we think for swap sets us really move and I good the platform nice a into So 'XX. quite as fiscal is

phase number Great. sites May And the just as it can we that you then I'm ending where so -- or a of done Johnson transitioning on just about Thank of my quickly the it's amount us & much. would assumption. either or think be revenues be Johnson still you of fully not transition sure or if transition? update

there be the execute. in about, there -- announced other -- that to maybe going big the The when some we so to done out like were guys is JJMD, collaboration This able wonderful noise sure. was Geez, industry well. out deals with there Yes, you turn first didn't

call sites It those welcomed I is will and our X Jim, and Wave on integrated were sites. the from Wave five the coming think employees Wave time. X, plan. had and I completed closed Those that X we and all said factory completed planned. be in Waves June along as

fact, of In is the end for month. this the plan

So I think the for Johnson the be to fiscal all, $X both transaction of & in I pleased. range from Jabil. million Lots win-win call, I to hard but and $XXX as really revenues XXXX. all in for said, the still June it's in a look Johnson really, billion think And work,

Thank you so It's much for the clarifications. appreciated. details and greatly

Jim. Thanks, Yes.

you. Thank

is Our coming today next Sheerin from Stifel. Matt question from

is now Your live. line

fairly that thanks. morning auto and Is the end side? you in fiscal on the outlook, semi-cap In talked growing auto basically continued mostly about the Yes, year. until Very significantly. weakness for and Good details your talked all sub-sectors. the helpful. on the your about segment You semi-cap thanks of

growth that from? is where So coming

a into all But couple automotive question, vehicle. it and well right. run folks really Sure. has, side, recovery Matt. a team, who the as guidepost of been of Parimbelli we that The recovery fiscal electrification Mike assumptions sensing Mike's prepared on Thanks the as his and the Loparco areas in XXXX again a position of applicable and and remarks end that semi-cap today to kind then should oversee And little calendar in to automotive And in of have that of and that's think a Jabil. and part the us XXXX. a our least summer team bit recovery, target, Chad our target times our Morley that thinking business specifically Alex we of, been it's through start unfortunately, business at put beyond stable and his in the -- XXXX. carries We seeing it's his sit for our moved moving on of the around more

growth both sectors those coming of that's So the where combined. in

fact basically? just auto wins, that Is continues the production despite incremental guess to program the weak. I be that

wins a where But And vehicle. quite per sale content looks to not it's your about for two terms strategically, we have chosen look growth. vehicle just positioned it's Well, things. content of when take again, in we in it's great the vehicle to at One, at all about marketplace, market are huge participate it's where us production, good. always per we’ve

more then know Okay, talk there, you've big that you’ve had a the some DMS, contributor optimistic some area? I profits. know packaging been to you great. outlook. could not changes had has I management about And on

margin you talk about years? increases of and over So can next how that business the couple to that your contributes op

team double Yes, I from solutions chuckle that the packaging to packaging drag grow What of industry we remember out over the offering here our vast packaging the on is the And and said now to she majority a hired we service with the remarks, of I has of is turned in packaging leadership a my dove team. offering has now made into our her that is space a packaging scale, about business combining company And a talking our the top line. because group. capabilities The electronic service quite and drag coatings, pride electrical offering and happy molding that from miniaturization, on I company on prepared of assembly, not with think great machining in terms the that terms long say things And digits ourselves precision massive ago we has of pure the lady good. in fixed. background. company gone. around one packaging continues is fixed some that I keeping things in And now the comment sitting

as certainly in for and talked a contributor XXXX well. about our XXXX into to we contributor certainly margin company get X% business us to So planned helping we be packaging fiscal the the material is as fiscal outlook move a that

Okay, great. Thanks Mark. a lot,

Yes.

Thank you.

Our from Sachs. Goldman next is Delaney coming question from Mark

Your line is live. now

the morning and detailed Yes. Good thanks presentation and slides. for

you're just off broadly moving understand you geographic increased first different company in manufacturing because any customers for CapEx new are your are more customers of from seeing any locations? of interest -- potential contemplating and plan constructed or as if out manufacturing I'm fiscal As and locations to XXXX, plan or tariffs, the its and maybe better manufacturing curious

Mark. Thanks,

So couple different of there there. questions is a

that back, tariff think said I today trade we of issues, us. as I was sit big June material to no the call terms In it impacts

again, actual sitting of in September, little As terms very materiality business in now moves. we are

And look then the so growth be business. terms consumed I think, with we China at of see in have don't that a we Mark, that when into said, there existing fact China. footprint is -- kind mentioned lot think our there With customers, to XX other all of the things or something the essential. hard U.S., geos days that do decent our in rooted payback in of a I expansion deep other last great company, a A that's amount they general not the the of we in analysis, moving all around supply one of continues a the concerned taken revenue XXX look chain XX, put than the applicable. is at is

going are expansion support continue is that there's then we perspective, CapEx of of an And a expand is And that, business. Most OpEx to our expansion to China. that outside probably to Mark. in largely of a component from EMS so of And our footprint. lot

far in about in else overall we've think terms subset footprint This strategically. in stronger about small the as front I the to year about our is in margins expansion and of million in of half will today year half always the EMS versus back back last EMS versus $XX As the earlier half are EMS margins of also it, that the OpEx year the the million conversation somebody be margins a and fiscal of lighter first half. half of planned number the the of years $XX was front as the EMS asking

model our So into built I by the answers outlook. hope all and that your And question. our way, that's

that the programs very you. Yes, in around business, you be more outlook for or My you’re follow-up the year? the Thank just should [indiscernible] Thank all for revenues thinking to helpful. the guidance Is this we about? was lower weakness question that able enterprise that. for end-market that's anything

yes. is space literally in forever. Yes, We've answer I think participating been the that

business, enterprise space going important a to in lots if aside, I about collectively, and but very cloud out. critical And, still I in very we it's part space it of growth our of inside We set that see offerings. the It overall, are understand positioned of think our that service has are well not if our We business. with sector scale. big

I business for think Mike good still in a stable showed on sector Really chart of flows. cash $X billion numbers is us. the terms our

around end understanding the in thesis correct. all pleased are your with So, business. markets, all, the yes, But it's think I

Thank you.

you. Thank

from next question Ruplu America Bhattacharya today is from Bank coming Our Merrill of Lynch.

live. now is line Your

taking for you my questions. Thank Hi.

one, are footprint or the closing clarify to the optimization. factories declining you you revenues one from XXXX. million another, of to $XX first $XXX that, factories? on repurpose actually actually the And got The million you’ve in Are going to to use to mobility focus related DMS just area fiscal

revenues fiscal then a that people XG the XXXX, to year grow enough for next Would put and that year, Some mobility support strong can mobility. XXXX? think be capacity you have in related fiscal

Hi Ruplu, it's Mark.

take swing Mike me Let add. a and let

think outlook 'XX $XXX write-down material, it's So mobility directionally down. but our I million, to on 'XX overly side, I that's the don't think

are not terms being market mobility we business. as in this that we conservative It's positioned. in whole we're of sector indication think, an share. in of indication, I for It's somewhat year not an us the earlier, of said terms how

on XG. We based are again, 'XX, mobility for on quasi-bullish

done So alluded also as it's incredible teams job to our around Point. I about the Green earlier, really

spent us last getting for pipe the again, through floor. automation, to smaller the and factory really to And just robotics. starting on due is are dividends CapEx water better some good of efficiencies, optimization, years in flow factory that's we couple pay layouts, of the We

do that you So, into view we again, to or anything it of area. Quite terms in I we frankly, market in anything good relatively wouldn't read we Mike, have how how in mobility add? the view relationships all the shape. it's got

I are more capacity we that a in to No, reduced that factor putting place. revenues the drive think through the ability biggest is

year think that’s going about or to automation, next take all the Mark over I so. talked robotics, of

lot much, much revenue through reduced We a a able drive to more footprint. will be

the for next the on that, Okay. EMS. on question Mark. Maybe Thanks clarification

that done You’ve see you growth. why next wireless there I outs business -- area? we 'XX. fiscal more got you with have that you business how cloud that the XG growth some in in see year build stronger and Can would you the would in year. see this do flat the growing wouldn't just talk thought job XG a you've be and revenues see would and great And what cloud about

might. we Well,

nice Alex business we and his cloud there. new the us. think I have to is a really done think relatively are -- team Again, job whole I

I it at going, think, we're looking "Okay.

take get in to nice So as that outlook cloud the really not quite our over is intended, going business the but Let's think us. good. skis." is be for we And shape

the other the scale. billion is, a that showing net on thing we're think I is $X remember plus

So, look anticipation why growth one number at is it could intuitively go, strong with of not is the "Geez, XG?". higher and

XXXX. XG and component some into see But is fiscal also there to in is move not to biggest LTE as 'XX a lot of and XG. we We that going be the to going 'XX is, cannibalization are of

So like is why the basis, I think net-net that's conservative, outlook a numbers but our look. relatively on they look

Okay.

mean, the makes buyback? that my cadence question, Mike, how the many we should cadence of on think million is and last authorization, over how years for Thanks. is of $XXX And I that about Okay that? the sense. what

I think years. is the $XXX million couple over of a

XX% for would capital -- would we've I modeling -- XX% think, between I and the factor framework. I purposes, share and dividends buybacks to in think, about XX% I allocation said

million about 'XX $XXX factoring that's for for FY and FY million $XXX So 'XX.

Thank you so much.

Thank you.

Paul from question next coming JP Coster Our is Morgan. today from

Your line line. now is

for Hi. taking Thanks Coster. Thanks. Chung for my on Paul question. is This

giving possibly, are a been in function if product that confidence is more higher nice of efficiency, years. see margins kind relatively acceleration range particularly for a you Is what recession? the design you And cost this here global kind two we of can't But of margin over next control, some So, What’s years? question have X.X% baking then variables here guidance more operating for should the there fiscal past work? two your the more mix, in the operating first, for margin you some years. next three

Sure.

the trying three If years, would lots we we of about, or a go year-ago -- think top we I back talked for what reasons we to we’ve the has lot the focus of quite we've -- about quarters. four accomplished growth four line for I overly largely goals. the fiscal to frankly, If goals. think three we those years in a accomplished without geez, XX I our those we go largely accomplished. last 'XX, XX So what to 'XX, said do back promotional, or we've to last talked think everything that last And not been everything, on and sound in

added where pedal last my foot a the leadership the has -- has company our bit to gone, again growth now right a growth opinion, taken of the line for in the in of we've with in all of with growth. amount think we off terms in reasons top as I the to team

our more an factories. we're see the slide with think sustainability in isn't well be are We you on engineering Mike a made about sometimes of to the last grow, is, cash record his in company going going operational bit The factories that this growth selective. investments kind And track and CapEx. a could the can are to a our I out of going that the XX-year within He standpoint did tell two nice margins year still has item control. we excellence in that focus to we've you CapEx standpoint thing and years, under broke a I innovation from technology so and line flows.

We that are in under investing not area.

comment in the So a we it's in it you XX the our for are terms to really is made. I on cash a margin of squarely and to add what flow do control, well. we lot news is also something working would of how months, really, good next know XX to and

portfolio, expansion, of component good margin we is composition feel Another about. absolutely, which of the really the really, the commercial

longer follow-up then, on that. is my Okay. levels And Thanks CapEx for term.

you maintenance of that or just maintenance of sales Does upgrade kind we to spend will of of sites you longer that down as more time kind $XXX CapEx correct As a about structural way with of CapEx X% some see manufacturing do kind a should of, over think kind more Thanks. model automation, CapEx? million, change come in term?

the countries. today So improvements, XX automation, will through it's some IT, etcetera. changeover big we footprint. as require leasehold equipment level technologies, up It in for the about some our a of XXX factory-of-the-future, with of about some talked we always I keeping stand go That's maintenance where sites, sites

million-ish looking that think right about X% $XXX or forward a from percentage sounds perspective. I So that

Thank you.

you. Thank

today is Wolfe Our Research. next from question Vadheim from Andrew coming

Your now line live. is

EMS 'XX a Good look you. growth, Taking X%. Thank full-year guidance at revenue at the morning. were

of quarters However, X% imply two for through XQ four. a guide XX% the year-over-year growth would

the sequential I such last a tougher the middle drop So the set see and off is of what for comps there why year, quarters? to of a recognize the of but Could sort there's sizable three decline linearity a XQ potentially in particularly, we XQ?

in sequential decline A revenues? EMS

Yes. EMS,

think think could about there I it purposes, would QX a But decline? modeling could. QX. be Yes, good be to flat EMS for to There sequential as

our about lot flat QX. And models, QX in to relatively to thinking measuring think are year. what I you again, a we're do mentioned, as being last with has of I against that

we 'XX revenues, XQ revenue around and started I think, last the over So XQ in before don't EMS of of well was I year we but $X.X billion. $X billion, I numbers, exact think remember layering the ended year

through the I through So But Those are about end in business year-on-year. will comps QX comps all, this to year. growing stronger compared good some X%, QX up still really 'XX. our that feel again, X% EMS were be all we ramping against business year. It's going this

will we point gave -- X.X%. in into importantly $XX you that a normalized XX going from X.X% year last more the think the billion So as of back think more we basis year-on-year range a we and margin I is XX, around have a pickup

more guidance. tax get came Was Was would one just it and expect normalized the tax XQ 'XX they in Mark, 'XX. normalized level? to have the you rate would made would than I sort of, F in beginning you then in a And Tax But below the higher on at of, of helpful. rate a rates, F of sort -- that call, F than sort come the to kind quarter of on point in that have level? discuss normalized That’s level, liked. the you. last you bit In Thank overall think 'XX rate. to little

the a That XX in a I -- tax business range in going forward. we good I direction. shift lower FY revenues look We out end 'XX. little generated. the we've it's in moving on considerably. lot to one XXX going of for the be we stage, continue country that XX% higher know to Don't said end? prescribed another. could think, at in it mix feel countries, feel this down that the are good where as with of our bit our the being we've from to on or XX% tax think Will but the rate right sites, rate Like It go mix forward past depends guidance a change that to should

Thank you.

Thank floor Adam the end question-and-answer you. back further our to like would I to for session. turn closing We comments. reached of over any

videos us. This everybody for Thank joining be The talking with you has That's we our it soon. now and event us. ended. forward on website for will shortly, look to slides and

you. does Thank That conclude teleconference today’s webcast. and

time this your at thank have and day. participation wonderful line your disconnect you today. a may You We for