Jabil : Fourth Quarter 2020 Financial Results and Investor Briefing

2020 FOURTH QUARTER EARNINGS & INVESTOR BRIEFING

September 24, 2020

FORWARD LOOKING STATEMENT

Forward Looking Statements: This presentation contains forward-looking statements, including those regarding our anticipated financial results for the fourth quarter and fiscal year 2020; our guidance for future financial performance in our first quarter of fiscal year 2021 (including, net revenue, segment revenue, U.S. GAAP operating income, U.S. GAAP diluted earnings per share, core operating income (Non-GAAP), core diluted earnings per share (Non- GAAP), net interest expense, and core tax rate and the components of each); our guidance for future financial performance in full fiscal year 2021 (including, net revenue, segment revenue, core operating margin, segment core margin, core earnings per share (Non-GAAP), adjusted free cash flow, free cash flow, net capital expenditures, core EBITDA, and the components and drivers of each); and our outlook for end market revenue and core operating margin. The statements in this presentation are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from our current expectations. Such factors include, but are not limited to: our determination as we finalize our financial results for the fourth quarter and fiscal year 2020 that our financial results and conditions differ from our current preliminary unaudited numbers set forth herein; the scope and duration of the COVID-19 outbreak and its impact on our operations, sites, customers and supply chain; managing growth effectively; our dependence on a limited number of customers; competitive challenges affecting our customers; managing rapid declines or increases in customer demand and other related customer challenges that may occur; changes in technology; our ability to introduce new business models or programs requiring implementation of new competencies; competition; transportation issues; our ability to maintain our engineering, technological and manufacturing expertise; retaining key personnel; our ability to purchase components efficiently and reliance on a limited number of suppliers for critical components; risks associated with international sales and operations; our ability to achieve expected profitability from acquisitions; risk arising from our restructuring activities; issues involving our information systems, including security issues; regulatory risks; financial and market risks; and adverse changes in political conditions, in the U.S. and internationally, including, among others, adverse changes in tax laws and rates and our ability to estimate and manage their impact. Additional factors that could cause such differences can be found in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 and our other filings with the Securities and Exchange Commission. We assume no obligation to update these forward-looking statements.

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2020 FOURTH QUARTER EARNINGS

Mike Dastoor September 24, 2020

Fourth Quarter and Fiscal Year 2020

Income Highlights

	THREE MONTHS ENDED	FISCAL YEAR ENDED
	AUGUST 31,	AUGUST 31,
(In millions, except for per share data)	2020	2019	2020	2019
Net revenue	$7,300	$6,573	$27,266	$25,282
U.S. GAAP operating income	$197	$190	$500	$701
U.S. GAAP net income	$68	$53	$54	$287
U.S. GAAP diluted earnings per share	$0.44	$0.34	$0.35	$1.81
Core operating income (non-GAAP)1	$255	$246	$864	$877
Core earnings (non-GAAP)1	$151	$138	$450	$473
Core diluted earnings per share (non-GAAP)1	$0.98	$0.88	$2.90	$2.98

1 See U.S. GAAP to non-GAAP reconciliation in appendix.

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Fourth Quarter

Segment Results

DIVERSIFIED MANUFACTURING SERVICES (DMS)

• Net Revenue Increase of 17%
• Core margin* (non-GAAP) of 3.5%

ELECTRONICS MANUFACTURING SERVICES (EMS)

• Net Revenue Increase of 8%
• Core margin* (non-GAAP) of 3.5%

TOTAL COMPANY

• • Net Revenue Increase of 11%
  • Core margin* (non-GAAP) of 3.5%
• Core margin defined as core operating income divided by net revenue

DMS

$7.3B 39%

EMS REVENUE

61%

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FY20

Segment Results

DIVERSIFIED MANUFACTURING SERVICES (DMS)

• Net Revenue Increase of 8%
• Core margin* (non-GAAP) of 3.9%

ELECTRONICS MANUFACTURING SERVICES (EMS)

• Net Revenue Increase of 8%
• Core margin* (non-GAAP) of 2.7%

TOTAL COMPANY

• • Net Revenue Increase of 8%
  • Core margin* (non-GAAP) of 3.2%
• Core margin defined as core operating income divided by net revenue

DMS

$27.3B 39%

EMS REVENUE

61%

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Cash Flow Highlights

	FISCAL YEAR ENDED
	AUGUST 31,
(In millions)	2020
Cash flow from operations	$1,257
Net capital expenditures1	$796
Adjusted Free cash flow (non-GAAP)1	$461
Core EBITDA (non-GAAP)1	$1,603

1 See U.S. GAAP to non-GAAP reconciliation in appendix and U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/

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Business Update

Mark Mondello September 24, 2020

THANK YOU for being your True Self

We all have a voice that is:

Honored

Empowered

Authentic

Respected

Deserving

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Leadership ATTENTION

Our Approach

Our Portfolio

Our Outlook

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Our Approach

Creating a more Diverse & Inclusive Jabil

ROOTED in Purpose	INTENTIONAL in Action	ACCOUNTABLE for Progress
• Aligned with our Core Values	• Employing Diverse Talent	• D&I Council
• Critical to Business Performance	• Advocate for Human Rights	• Dashboards & Benchmarking

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Our Approach

Creating a more Sustainable Jabil

Employee Volunteers, Giving Back and Making a Difference

75,000 hours

Greenhouse gas emission reduction

25% Reduction by 2025

United Nations

Sustainable Development alignment

Additional ESG Focus Areas

Safety

Water Usage

Hazardous Waste

Supply Chain

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Our Portfolio

End-Markets

DIVERSIFIED MANUFACTURING

$ in billions	FY201	FY21E
Healthcare & Packaging	$4.2	$4.8
Automotive & Transport	$1.7	$1.9
Connected Devices	$4.0	$3.7
Mobility	$3.3	$3.6
Total Revenue	$13.2	$14.0
Core Operating Margin	3.7%	4.5%

ELECTRONICS MANUFACTURING

$ in billions	FY201	FY21E
Digital Print & Retail	$2.3	$2.3
Industrial & Semi-Cap	$3.5	$3.5
5G, Wireless & Cloud	$5.5	$4.5 *
Networking & Storage	$2.8	$2.2
Total Revenue	$14.1	$12.5
Core Operating Margin	2.7%	3.5%

* Cloud transitioning to a consignment model

1 As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/	13

Our Portfolio

DMS Segment with Strong Margins

DIVERSIFIED MANUFACTURING

DMS	DMS Pedigree and Construct
	• Product Validation & Regulated Environments

Mobility

Healthcare

& Packaging

• Advanced Material Sciences and Mechanics
• Margin Expansion and Reliable Cash Flows

FY21 Financial Plan

• Revenue: ~$14 Billion

• Core Margin: ~4.5%

Connected

Devices

Automotive & Transport

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/	14

Our Portfolio

EMS Segment with Strong Cash Flows

EMS

Digital Print &

Networking &Retail

Storage

Industrial &

Semi-Cap

5G, Wireless &

Cloud

EMS Pedigree and Construct

• Standardized Manufacturing / IT Solutions
• Enduring End-markets
• Strong Cash Flows and Stable Margins

FY21 Financial Plan

• Revenue: ~$12.5 Billion
• Core Margin: ~3.5%

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/	15

Our Outlook

Delivering a credible Financial Plan

NET REVENUE

CORE OP MARGIN

CORE EPS

FREE CASH FLOW

~$26.5		4.0%		$4.00		$600+
BILLION						MILLION

MANAGEMENT'S OUTLOOK FOR FY21

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/	16

Our Outlook

Derived with Harmonious Collaboration

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Our Outlook

Grounded by a Straight-forward Strategy

• Ensure our Business mix remains well Diversified
• Obsess over our Customers while leading with Engineering
• Drive Growth through collaborative sharing of Capabilities across the Enterprise
• Continue to contour our Portfolio for Margin expansion
• Deliver reliable Cash flows by leveraging our exposure to varied End-Markets

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THANK YOU for being your True Self

We all have a voice that is:

Honored

Empowered

Authentic

Respected

Deserving

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Financial Update

Mike Dastoor September 24, 2020

Financial Priorities

EXPAND		INCREASE		GENERATE
OPERATING MARGINS		EARNINGS PER SHARE		STRONG CASH FLOWS

ALIGNED & FOCUSED ON DRIVING LONG-TERM VALUE CREATION

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Our Portfolio

End-Markets

DIVERSIFIED MANUFACTURING

$ in billions	FY201	FY21E
Healthcare & Packaging	$4.2	$4.8
Automotive & Transport	$1.7	$1.9
Connected Devices	$4.0	$3.7
Mobility	$3.3	$3.6
Total Revenue	$13.2	$14.0
Core Operating Margin	3.7%	4.5%

ELECTRONICS MANUFACTURING

$ in billions	FY201	FY21E
Digital Print & Retail	$2.3	$2.3
Industrial & Semi-Cap	$3.5	$3.5
5G, Wireless & Cloud	$5.5	$4.5 *
Networking & Storage	$2.8	$2.2
Total Revenue	$14.1	$12.5
Core Operating Margin	2.7%	3.5%

* Cloud transitioning to a consignment model

1 As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/	22

Positioned to Deliver

Operating Margin Expansion

Drivers of	Core Operating
Y/Y Margin Expansion	Margin
	($ in millions)

1. Improved business mix

4.0%

2.	Improved efficiency on lower cost	3.5%
		3.2%
	structure
3.	Lower COVID-related costs

FY19

FY20

FY21E

See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/	23

FY21

Disciplined Investment

FY21 Net Capex

($ millions)

Net Capex	FY21
Maintenance Investment	$550
Growth Investment	$250
Company Total	$800

See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/

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FY21

EBITDA & Free Cash Flow Generation

Drivers of Future		CORE EBITDA
Free Cash Flow		($ billions)
					$1.8
1.	Earnings expansion		$1.6	$1.6
2.	Working capital efficiencies
3.	Disciplined investment
			FY19	FY20	FY21E

Adjusted FCF

($ millions)

$600+

$503

$461

FY19 FY20 FY21E

See U.S. GAAP to non-GAAP definitions and reconciliations located at https://investors.jabil.com/

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Capital Allocation Framework

Cash flow from operations

Net Capex

• 60%
  Free Cash Flow

Debt Optimization		Share Repurchases &
& M&A		Dividends
~ 40%		~ 60%

VALUE CREATION FOR JABIL SHAREHOLDERS

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First Quarter FY21

Guidance

Segment Revenue Guidance	Q1 FY201	Q1 FY21E1	YoY Change
▪	Diversified Manufacturing Services	$3.75B	$3.8B	Increase 1%
▪	Electronics Manufacturing Services	$3.76B	$3.2B	Decrease 15%
Consolidated Guidance				Q1 FY21E
Net revenue				$6.7B	- $7.3B
U.S. GAAP operating income				$238M	- $283M
U.S. GAAP diluted earnings per share				$0.79 - $1.02
Core operating income (non-GAAP)2				$295M - $335M
Net interest expense3			EMS	$47M
Core tax rate (non-GAAP)4			26% to 28%
Core diluted earnings per share (non-GAAP)2				$1.15	- $1.35

1. As of September 1, 2020, certain customers have been realigned within our reporting segments. See appendix for additional information.
2. See U.S. GAAP to non-GAAP reconciliation on Form-8K filed on September 24, 2020.
3. Net interest expense = interest expense + loss on sale of AR - interest income
4. Core tax rate excludes the tax impacts related to amortization of intangibles, stock-based compensation expense and related charges, restructuring, severance and related charges and acquisition and integration charges.

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Our Outlook

Delivering a credible Financial Plan

NET REVENUE

CORE OP MARGIN

CORE EPS

FREE CASH FLOW

~$26.5		4.0%		$4.00		$600+
BILLION						MILLION

MANAGEMENT'S OUTLOOK FOR FY21

See U.S. GAAP to non-GAAP definitions located at https://investors.jabil.com/

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MARK MONDELLO

MIKE DASTOOR

CHIEF EXECUTIVE OFFICER

CHIEF FINANCIAL OFFICER

APPENDIX GAAP to Non-GAAP Reconciliations

	JABIL INC. AND SUBSIDIARIES
OPERATING INCOME, EBITDA and NET INCOME NON-GAAP RECONCILIATION
	(In thousands, except for per share data)
		(Unaudited)
		Three months ended		Fiscal year ended
		August 31, 2020		August 31, 2019		August 31, 2020		August 31, 2019
Operating income (U.S. GAAP)	$	197,053	$	189,745	$	499,846	$	701,356
Amortization of intangibles		12,649		8,890		55,544		31,923
Stock-based compensation expense and related charges		20,870		13,894		83,084		61,346
Restructuring, severance and related charges		12,581		9,732		156,586		25,914
Distressed customer charge		-		6,235		14,963		6,235
Net periodic benefit cost		8,680		-		16,078		-
Business interruption and impairment charges, net		1,211		-		5,785		(2,860)
Acquisition and integration charges		2,162		17,631		32,167		52,697
Adjustments to operating income		58,153		56,382		364,207		175,255
Core operating income (Non-GAAP)	$	255,206	$	246,127	$	864,053	$	876,611
Core operating income (Non-GAAP)	$	255,206	$	246,127	$	864,053	$	876,611
Depreciation expense		181,240		187,990		739,038		739,910
Core EBITDA (Non-GAAP)	$	436,446	$	434,117	$	1,603,091	$	1,616,521
Net income attributable to the Company (U.S. GAAP)	$	67,731	$	52,675	$	53,912	$	287,111
Adjustments to operating income		58,153		56,382		364,207		175,255
Loss on securities		36,420		29,632		48,625		29,632
Net periodic benefit cost		(8,680)		-		(16,078)		-
Adjustment for taxes		(2,259)		(796)		(1,093)		(18,633)
Core earnings (Non-GAAP)	$	151,365	$	137,893	$	449,573	$	473,365
Diluted earnings per share (U.S. GAAP)	$	0.44	$	0.34	$	0.35	$	1.81
Diluted core earnings per share (Non-GAAP)	$	0.98	$	0.88	$	2.90	$	2.98
Diluted weighted average shares outstanding (U.S. GAAP & Non-GAAP)		154,453		156,981		155,274		158,647

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	(1)
FY20 Revenue as Recast
Diversified Manufacturing					Electronics Manufacturing
					Fiscal year						Fiscal year
$ in billions		Three months ended		ended	$ in billions		Three months ended		ended
	November	February	May 31,	August 31,	August 31,		November	February	May 31,	August 31,	August 31,
	30, 2019	29, 2020	2020	2020	2020		30, 2019	29, 2020	2020	2020	2020
Total Revenue	$3.7	$2.9	$3.0	$3.6	$13.2	Total Revenue	$3.8	$3.2	$3.4	$3.7	$14.1
Core Operatng						Core Operatng
Margin	5.0%	3.0%	2.5%	3.9%	3.7%	Margin	2.4%	2.3%	2.9%	3.1%	2.7%

1. As of September 1, 2020, certain customers have been realigned within our reporting segments. Beginning in fiscal year 2021, customers within the automotive and transportation and smart home and appliances industries will be presented and moved from the EMS segment to the DMS segment.

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