Flex Ltd (FLEX) 2022 Q4 法說會逐字稿

Good afternoon, and thank you for standing by. Welcome to the Flex Fiscal Fourth quarter 2022 Earnings Conference Call. (Operator Instructions)

下午好，感謝您的支持。歡迎參加 Flex 2022 財年第四季度收益電話會議。 （操作員說明）

I will now turn the call over to Mr. David Rubin. You may begin sir.

我現在將把電話轉給大衛魯賓先生。先生，您可以開始了。

Thank you, Carl. Good afternoon and welcome to Flex's fourth quarter of fiscal '22 earnings conference call. With me today is our Chief Executive Officer, Revathi Advaithi; and our Chief Financial Officer, Paul Lundstrom. Both will give brief remarks followed by Q&A. This call is being webcast live and recorded. Slides for today's presentation along with a copy of the earnings press release and summary financials are available on the Investor Relations page at flex.com.

謝謝你，卡爾。下午好，歡迎參加 Flex 的 22 財年第四季度財報電話會議。今天和我在一起的是我們的首席執行官 Revathi Advaithi；和我們的首席財務官 Paul Lundstrom。兩人都將發表簡短的評論，然後進行問答。此次通話正在進行網絡直播和錄製。今天的演示文稿的幻燈片以及收益新聞稿和財務摘要的副本可在 flex.com 的投資者關係頁面上找到。

As a reminder, today's call contains forward-looking statements which are based on our current expectations, assumptions and predictions. These statements are subject to risks and uncertainties that could cause actual results to differ materially. For a full discussion of these risks and uncertainties, please see the cautionary statements in our presentation and press release's Risk Factors section in our most recent filings with the SEC. Note, this information is subject to change and we undertake no obligation to update these forward-looking statements.

提醒一下，今天的電話會議包含基於我們當前預期、假設和預測的前瞻性陳述。這些陳述受到可能導致實際結果大不相同的風險和不確定性的影響。有關這些風險和不確定性的完整討論，請參閱我們最近提交給美國證券交易委員會的文件中的演示文稿和新聞稿的風險因素部分中的警示性聲明。請注意，此信息可能會發生變化，我們不承擔更新這些前瞻性陳述的義務。

Unless otherwise specified, we will refer to non-GAAP metrics on this call. The full non-GAAP to GAAP reconciliations can be found in the appendix slide of today's presentation as well in the summary financials posted in Investor Relations website. As previously disclosed, the draft registration statement on Form S-1 relating to the proposed initial public offering to Nextracker's Class A common stock remains on file with the US Securities and Exchange Commission. The initial public offering and its timing are subject to market and other conditions and the SEC's review process. We made this announcement in accordance with Rule 135 under the Securities Act. Following SEC regulations, we will not make any further statements or answer any additional questions on the Nextracker filing at this time.

除非另有說明，否則我們將在本次電話會議上參考非 GAAP 指標。完整的非 GAAP 與 GAAP 對賬可以在今天的演示文稿的附錄幻燈片中找到，也可以在投資者關係網站上發布的財務摘要中找到。正如之前所披露的，關於向 Nextracker 的 A 類普通股進行首次公開募股的 S-1 表格登記聲明草案仍在美國證券交易委員會存檔。首次公開募股及其時間取決於市場和其他條件以及美國證券交易委員會的審查程序。我們根據《證券法》第 135 條發布此公告。根據 SEC 的規定，我們目前不會就 Nextracker 提交的文件發表任何進一步的聲明或回答任何其他問題。

Now, I'd like to turn the call over to our CEO, Revathi.

現在，我想將電話轉給我們的首席執行官 Revathi。

Thank you, David. Thank you and good afternoon, everyone. Today, we'll talk about our results for our fiscal Q4 and also our full year results, which was another outstanding year in the midst of lots of macro challenges. Paul will then take you through the detailed results.

謝謝你，大衛。謝謝大家，大家下午好。今天，我們將討論我們第四財季的業績以及全年業績，這是在眾多宏觀挑戰中又一個出色的一年。然後，保羅將帶您了解詳細的結果。

First, I'll start by saying I'm very proud of our team for delivering exceptional results for our customers and all our stakeholders. Their continued dedication helped us deliver strong performance this fiscal year. I also believe that in the midst of crises is when true partnerships are built, and we have significantly strengthened our partnerships with our customers and suppliers as we navigated through the dynamic supply chain environment. While delivering record performance this year, we have kept our eyes focused on the longer-term direction of our company. We laid this out for you in our most recent Investor Day, which sets the stage for our next phase of profitable growth.

首先，我首先要說，我為我們的團隊為我們的客戶和所有利益相關者提供卓越的成果感到非常自豪。他們的持續奉獻幫助我們在本財年取得了強勁的業績。我還相信，在危機之中是建立真正的合作夥伴關係的時候，我們在動態的供應鏈環境中導航時顯著加強了與客戶和供應商的合作夥伴關係。在今年取得創紀錄業績的同時，我們一直將目光集中在公司的長期發展方向上。我們在最近的投資者日中為您闡述了這一點，這為我們下一階段的盈利增長奠定了基礎。

Now, going to the next slide, let's look at some of our accomplishments. Q4 was up over 9% year-over-year and over 3% sequentially. As you all know, seasonally this is usually our weakest quarter with overall revenue typically down about 10% sequentially. Our ability to deliver revenue growth shows the continued strength in demand across the portfolio as well as the team's incredible execution while operating in this environment. A good example is in our Automotive business. Despite the major industry disruptions, our Automotive business grew both sequentially and year-over-year while S&P Global auto production volumes declined. Both Industrial and CEC also had very strong quarters, all of which led to strong revenue and record adjusted EPS levels in the quarter.

現在，轉到下一張幻燈片，讓我們看看我們的一些成就。第四季度同比增長超過 9%，環比增長超過 3%。眾所周知，季節性情況下，這通常是我們最疲軟的季度，總體收入通常會環比下降約 10%。我們實現收入增長的能力表明整個投資組合的需求持續強勁，以及團隊在這種環境下運營時的出色執行力。我們的汽車業務就是一個很好的例子。儘管出現了重大的行業中斷，我們的汽車業務環比和同比增長，而標準普爾全球汽車產量下降。 Industrial 和 CEC 的季度業績也非常強勁，所有這些都帶來了強勁的收入和創紀錄的本季度調整後每股收益水平。

For the full year, revenue was up about 8% year-over-year and we delivered record full year adjusted operating margins as well as a record EPS on both an adjusted and GAAP basis. Our Industrial business was also very strong for the full year with ramps in a number of key markets including next-generation robotics, EV charging stations, and multiple ramps in renewables and power technologies. Remember these ramps in renewables are in addition to our Nextracker business, which is now with own separate segment. As you will see, Nextracker also saw very strong revenue growth this year.

全年，收入同比增長約 8%，我們實現了創紀錄的全年調整後營業利潤率以及調整後和公認會計原則基礎上的創紀錄每股收益。我們的工業業務全年也非常強勁，包括下一代機器人、電動汽車充電站以及可再生能源和電力技術等多個關鍵市場的增長。請記住，可再生能源的這些斜坡是我們 Nextracker 業務的補充，該業務現在擁有自己的獨立部門。正如你將看到的，Nextracker 今年的收入增長也非常強勁。

Livestock strength continued, driven partially by strong current demand. But more importantly, much of this is from winning new business as we solved increasingly complex challenges and provide customers with value-added services such as logistics and fulfillment and expanding our circular economy activities. I will also point out that we executed on our capital allocation strategy this year, as we stepped up our investments in future growth. We increased CapEx by about 60% with over 60% of that allocated specifically for funding anticipated organic growth. We also completed our Anord Mardix acquisition, expanding our presence in data center critical power which creates cross-selling opportunities with our core data center business. And in addition, we repurchased a record $686 million worth of stock.

畜牧業持續強勁，部分原因是當前強勁的需求。但更重要的是，這在很大程度上來自於贏得新業務，因為我們解決了日益複雜的挑戰，為客戶提供物流和履行等增值服務，並擴大了我們的循環經濟活動。我還要指出，我們今年執行了資本配置策略，因為我們加大了對未來增長的投資。我們將資本支出增加了約 60%，其中超過 60% 專門用於資助預期的有機增長。我們還完成了對 Anord Mardix 的收購，擴大了我們在數據中心關鍵電源方面的影響力，從而為我們的核心數據中心業務創造了交叉銷售機會。此外，我們回購了創紀錄的 6.86 億美元的股票。

Now turning to slide 4. As we covered in our recent Investor Day, there are several macro and secular trends driving growth in outsource manufacturing. At its core, these trends are about increasing complexity that many companies are finding more difficult, sometimes even impossible, to solve by themselves. This complexity is creating higher-value growth opportunities for Flex, because we have the right capabilities. We have the global footprint and the scale to solve these challenges for our customers.

現在轉到幻燈片 4。正如我們在最近的投資者日中所述，有幾個宏觀和長期趨勢推動了外包製造業的增長。從本質上講，這些趨勢是關於越來越複雜的問題，許多公司發現自己解決這些問題變得更加困難，有時甚至是不可能的。這種複雜性正在為 Flex 創造更高價值的增長機會，因為我們擁有合適的能力。我們擁有全球足跡和規模，可以為我們的客戶解決這些挑戰。

We have transformed into a more adaptable, a resilient advanced manufacturer. And in recognition of our progress, we are honored to have been recently recognized with three manufacturing leadership awards for outstanding leadership and achievements in the categories of enterprise integration and technology, operations excellence, and sustainability. And our focus on strengthening our core capabilities in each of our six business units and delivering in key end markets continues to manifest the new wins that will drive growth in the years to come. At our Investor Day, we highlighted just three of these key end markets that we have doubled down on. They were the next-generation mobility, the digital healthcare and cloud expansion.

我們已經轉變為一個適應性更強、更有彈性的先進製造商。為了表彰我們的進步，我們很榮幸最近獲得了三項製造業領導獎，以表彰我們在企業集成和技術、卓越運營和可持續性等類別中的傑出領導和成就。我們專注於加強我們六個業務部門中每個業務部門的核心能力並在關鍵終端市場提供服務，這將繼續體現將推動未來幾年增長的新勝利。在我們的投資者日，我們只強調了我們已經加倍關注的這些關鍵終端市場中的三個。它們是下一代移動性、數字醫療保健和雲擴展。

Now, putting these three markets in perspective, next-gen mobility for example is fueling our growth with new wins in support of EV and autonomy technology transitions. Our technological knowledge and domain expertise is leading to new opportunities and expanding collaborations. Of course, an exciting example of this is our recently announced partnership with NVIDIA's DRIVE program for Level 2 plus to Level 5 autonomy.

現在，從這三個市場的角度來看，例如下一代移動性正在通過支持電動汽車和自動駕駛技術轉型的新勝利來推動我們的增長。我們的技術知識和領域專長正在帶來新的機遇和擴大合作。當然，一個令人興奮的例子是我們最近宣布與 NVIDIA 的 DRIVE 計劃合作，以實現 2 級以上到 5 級的自主權。

We also recently announced a major win with Enphase, a leading global energy technology company, and that's expanding on 15 years of partnership where we have been selected to support Enphase's European market expansion for microinverter solar solutions. In our Health Solutions group, this year we began several medical device ramps addressing multiple aspects of chronic care, and these wins will drive growth through the next few years. And in our cloud business, we initiated multiple new ramps with a few of our hyperscale partners late in the year, which led to strong growth for CEC in Q4, but more importantly will contribute to accelerating growth for fiscal 2023.

我們最近還宣布與全球領先的能源技術公司 Enphase 取得重大勝利，這是在 15 年合作夥伴關係的基礎上，我們被選中支持 Enphase 在微型逆變器太陽能解決方案方面的歐洲市場擴張。在我們的健康解決方案組中，今年我們開始了幾個醫療設備坡道，解決了慢性護理的多個方面，這些勝利將推動未來幾年的增長。在我們的雲業務中，我們在今年年底與一些超大規模合作夥伴啟動了多個新的坡道，這導致 CEC 在第四季度實現強勁增長，但更重要的是將有助於加速 2023 財年的增長。

Again, these are just a few examples from the diverse end markets we play in. We're in a strong position to capitalize on these long-term opportunities to our continued focus on manufacturing and supply chain technology and targeted growth markets. We remain focused on the factors that will drive sustainable growth, margin improvement, and creating shareholder value.

同樣，這些只是我們所涉足的不同終端市場的幾個例子。我們處於有利地位，可以利用這些長期機會繼續關注製造和供應鏈技術以及目標增長市場。我們仍然專注於推動可持續增長、提高利潤率和創造股東價值的因素。

With that, I'll turn it over to Paul to take you through our financials. Paul?

有了這個，我會把它交給保羅來帶你了解我們的財務狀況。保羅?

Okay, great. Thanks, Revathi. And good afternoon, everyone. I'll begin on slide 6 with a review of our fourth quarter results. Please note our remarks will be based on non-GAAP results, unless stated otherwise. The GAAP reconciliations can be found in the appendix of this presentation.

好，太棒了。謝謝，雷瓦蒂。大家下午好。我將從幻燈片 6 開始，回顧我們第四季度的業績。請注意，除非另有說明，否則我們的評論將基於非公認會計原則的結果。 GAAP 對賬可在本演示文稿的附錄中找到。

Our fourth quarter revenue came in at $6.9 billion, up 9% year-over-year. Operating income was $295 million with earnings per share at $0.52 for the quarter, a year-over-year increase of 6%. Free cash flow was $252 million and up year-over-year. Just taking a step back and looking at our full year performance on slide 7, with focused execution throughout a very dynamic environment, we delivered full year revenue of $26 billion, up 8% year-over-year. Operating income for the fiscal year 2022 totaled $1.169 billion. That was up 13% year-over-year, despite the challenges caused by component shortages and COVID flare-ups. For the full year, Flex achieved record EPS of $1.96, which was up 25% year-over-year. 2022 free cash flow was $593 million.

我們第四季度的收入為 69 億美元，同比增長 9%。本季度營業收入為 2.95 億美元，每股收益為 0.52 美元，同比增長 6%。自由現金流為 2.52 億美元，同比增長。退一步看一下幻燈片 7 上的全年業績，在一個非常動態的環境中集中執行，我們實現了 260 億美元的全年收入，同比增長 8%。 2022財年的營業收入總計11.69億美元。儘管存在組件短缺和新冠疫情爆發帶來的挑戰，但仍同比增長 13%。全年，偉創力實現創紀錄的每股收益 1.96 美元，同比增長 25%。 2022 年的自由現金流為 5.93 億美元。

Turning to our fourth quarter segment results on the next slide. Reliability revenue was $2.8 billion, an increase of 12% year-over-year, driven by improved execution against strong demand in Auto and Industrial and with some tailwind also from Anord Mardix. Operating income was $140 million. Operating margin was 4.9%, with pressure from material shortages that created some inefficiencies in Industrial.

在下一張幻燈片上轉到我們的第四季度部分結果。可靠性收入為 28 億美元，同比增長 12%，這主要得益於執行力提高、汽車和工業的強勁需求以及來自 Anord Mardix 的一些順風。營業收入為1.4億美元。營業利潤率為 4.9%，材料短缺造成工業部門效率低下的壓力。

In Agility, revenue was up $3.6 billion, up 4% year-over-year, driven by strong demand across Lifestyle and CEC partially offset by planned declines in Consumer Devices. Operating income was $152 million, up about 12% year-over-year, with nice margin expansion up almost 30 basis points to 4.2%. And finally, Nextracker revenue was $440 million, up 38% year-over-year due to continued strong demand. Adjusted operating income for Nextracker was $22 million with pressure on margins from higher freight and logistics costs.

在 Agility 方面，收入增長 36 億美元，同比增長 4%，這主要得益於 Lifestyle 和 CEC 的強勁需求，部分被消費設備的計劃下滑所抵消。營業收入為 1.52 億美元，同比增長約 12%，利潤率大幅增長近 30 個基點至 4.2%。最後，由於持續強勁的需求，Nextracker 的收入為 4.4 億美元，同比增長 38%。 Nextracker 的調整後營業收入為 2200 萬美元，原因是運費和物流成本上漲對利潤率造成壓力。

On slide 9, looking at performance for the full year. Reliability revenue was $10.6 billion, with operating margins up slightly at 5.1%. Within Reliability, Automotive revenue was up 15%, primarily due to new program ramps reflective of the growing demand for our next-gen mobility portfolio. Health Solutions was down slightly against a tough compare. Recall that in 2021, Health Solutions was up 25% with record growth driven by critical care products that were instrumental at the height of the pandemic. Now that we've lapped that comp, we expect Health Solutions to be growing in the range that Randy outlined at our Investor Day. Lastly, Industrial had a strong year with revenue up 17%, primarily from solid organic growth and with some tailwind from Anord Mardix. Just moving down the page here, Agility's segment revenue came in at $14 billion delivering a record 4.3% margin. That was up 1 full point for the year. Within Agility, CEC was up roughly 3% with growth from new project ramps but had some headwinds due to the continued component shortages. Consumer Devices revenue was down mid-single digits caused largely by planned contract completions and is representative of our active program management. And finally, Lifestyle had record performance with revenue increasing 14%, primarily due to outstanding execution, successful program ramps, and robust end-market demand.

在幻燈片 9 上，查看全年的表現。可靠性收入為 106 億美元，營業利潤率小幅上升 5.1%。在可靠性方面，汽車收入增長了 15%，這主要是由於新計劃的增加反映了對我們下一代移動產品組合的需求不斷增長。與艱難的比較相比，健康解決方案略有下降。回想一下，2021 年，Health Solutions 增長了 25%，創紀錄的增長是由在大流行高峰期發揮作用的重症監護產品推動的。既然我們已經完成了該組合，我們預計 Health Solutions 將在 Randy 在我們的投資者日概述的範圍內增長。最後，Industrial 表現強勁，收入增長 17%，主要來自穩健的有機增長以及來自 Anord Mardix 的一些順風。僅從此處向下移動，Agility 的部門收入就達到了 140 億美元，利潤率達到創紀錄的 4.3%。全年上漲了 1 個百分點。在 Agility 內部，隨著新項目的增加，CEC 增長了大約 3%，但由於組件持續短缺，因此遇到了一些不利因素。消費設備收入下降了中個位數，主要是由於計劃中的合同完成，這代表了我們積極的項目管理。最後，Lifestyle 取得了創紀錄的業績，收入增長了 14%，這主要歸功於出色的執行、成功的計劃增長和強勁的終端市場需求。

Nextracker completed the year with revenue of $1.5 billion, a year-over-year improvement of about 22%, and ended the year with a 6.2% operating margin driven by higher freight logistics costs. Overall, solid performance with all segments returning to revenue growth this year. And we have some great momentum as we head into the fiscal year 2023.

Nextracker 全年收入為 15 億美元，同比增長約 22%，在貨運物流成本上漲的推動下，營業利潤率為 6.2%。總體而言，今年所有部門都恢復了收入增長，表現穩健。在進入 2023 財年時，我們有一些強勁的勢頭。

On slide 10, cash flow. Net CapEx for the quarter totaled $108 million and for the full year came in at $431 million. That was about 1.7% of revenue. Free cash flow was USD252 million for the quarter and USD593 million for the full year. Free cash flow conversion for the year was 63%. In the quarter, we repurchased 6 million shares totaling about $105 million. For the full fiscal year, we spent $686 million repurchasing 38 million shares, and that represented about 8% of the shares outstanding. We closed the quarter with inventory of $6.6 billion. Inventory turns were down to 4.1, indicative of the dynamic supply chain environment that's challenging the industry.

在幻燈片 10 上，現金流。本季度的淨資本支出總額為 1.08 億美元，全年為 4.31 億美元。這大約是收入的 1.7%。本季度自由現金流為 2.52 億美元，全年為 5.93 億美元。當年的自由現金流轉換率為 63%。本季度，我們回購了 600 萬股股票，總額約為 1.05 億美元。在整個財年，我們斥資 6.86 億美元回購了 3800 萬股股票，約佔流通股的 8%。我們以 66 億美元的庫存結束了本季度。庫存周轉率降至 4.1，表明動態供應鏈環境對行業構成挑戰。

Please turn to slide 11 for our segment outlook for the fiscal first quarter and our year-on-year growth expectations. Beginning with Reliability Solutions. We expect revenue to be up high single digits to mid-teens with healthy demand across all three business units. Automotive and Industrial will have multiple program ramps beginning this quarter as well.

請轉到幻燈片 11，了解我們對第一財季的細分市場展望和我們的同比增長預期。從可靠性解決方案開始。我們預計收入將在所有三個業務部門的健康需求下增長至高個位數至十幾歲左右。從本季度開始，汽車和工業也將有多個計劃坡道。

Turning to Agility Solutions. Revenue is expected to be up low- to high-single digits year-over-year. As Revathi had mentioned, the significant macro trends driving robust cloud demand should fuel strong growth in CEC. We also expect positive demand trends to continue into the quarter for Lifestyle, offset by Consumer Devices, which is facing a tough prior-year comp that includes a program that we wrapped up in Q2 of last year.

轉向敏捷性解決方案。預計收入將同比增長低至高個位數。正如 Revathi 所提到的，推動強勁雲需求的重大宏觀趨勢應該會推動 CEC 的強勁增長。我們還預計，生活方式的積極需求趨勢將持續到本季度，被消費設備所抵消，消費設備面臨著艱難的上一年競爭，其中包括我們在去年第二季度結束的一項計劃。

On to slide 12 for our quarterly guidance. We expect revenue in the range of $6.6 billion to $7 billion with adjusted operating income between USD285 million and USD315 million. Interest and other expense is estimated to be between USD40 million and USD45 million, and the tax rate should be within that 13% to 15% range. We expect adjusted EPS between USD0.44 and USD0.50 a share based on approximately $471 million weighted average shares outstanding.

在幻燈片 12 上查看我們的季度指導。我們預計收入在 66 億美元至 70 億美元之間，調整後的營業收入在 2.85 億美元至 3.15 億美元之間。利息和其他費用估計在 4,000 萬美元至 4,500 萬美元之間，稅率應在 13% 至 15% 的範圍內。基於約 4.71 億美元的加權平均流通股，我們預計調整後的每股收益在 0.44 美元至 0.50 美元之間。

On the following slide, we have our fiscal year 2023 guidance. We'll walk you through this at our Investor Day, so I won't spend a lot of time on it. But I'll remind you that we're expecting 8% year-over-year revenue growth at the midpoint of our guidance of $27.7 billion to $28.7 billion. Adjusted EPS is expected to be between USD2.09 and USD2.24 a share, that's about $2.16 at the midpoint.

在下面的幻燈片中，我們有 2023 財年的指導。我們將在投資者日向您介紹這一點，所以我不會花太多時間在上面。但我會提醒你，我們預計在 277 億美元至 287 億美元的指導值中點，收入將同比增長 8%。調整後的每股收益預計在每股 2.09 美元至 2.24 美元之間，中點約為 2.16 美元。

To wrap it up before we begin Q&A. Closing out a tremendous fiscal year 2022, we remain focused on driving profitable growth as we execute on the high-value opportunities presented by long-term secular trends. We've demonstrated that our strategic initiatives have established a solid foundation, and Flex is uniquely positioned within the industry to serve those growth markets.

在我們開始問答之前總結一下。在結束了巨大的 2022 財年之後，我們仍然專注於推動盈利增長，因為我們抓住了長期長期趨勢所帶來的高價值機會。我們已經證明，我們的戰略舉措已經奠定了堅實的基礎，而偉創力在行業內具有獨特的定位，可以服務於這些增長市場。

With that, I'd like to turn the call over to our operator to begin Q&A. Carl?

有了這個，我想把電話轉給我們的接線員開始問答。卡爾?

(Operator Instructions) Our first question comes from the line of Mark Delaney with Goldman Sachs.

（操作員說明）我們的第一個問題來自高盛的 Mark Delaney。

Looking at the fiscal '23 outlook relative to what was discussed about a month ago at the Analyst Day, it looks like the revenue and the midpoint of the EPS guidance are both slightly higher and that's despite some of the continued challenges around COVID, in particular in China, and hoping you could better understand what's driving the updated view on fiscal '23.

與一個月前分析師日討論的內容相比，23 財年的前景看起來似乎收入和每股收益指引的中點都略高，儘管圍繞 COVID 的一些持續挑戰尤其如此在中國，希望您能更好地了解推動 23 財年更新觀點的原因。

Yeah, I'll start that, Mark, and if Revathi wants to chime in here, she'll do that as well. But relative to the Analyst Day. We came in Q4 a little bit better than what we had expected, and so we dropped some of that revenue through. So you see the midpoint of our guidance did come up a little bit for the year. At this point, we held EPS flat to what we had indicated at the Investor Day. I think we had said 216 really didn't give you a range. Right now I would say 216 is still the midpoint. Pretty upbeat about that high single-digit topline growth that we had messaged and a pretty good EPS.

是的，我會開始的，馬克，如果 Revathi 想在這裡插話，她也會這樣做。但相對於分析師日。我們在第四季度的表現比我們預期的要好一些，因此我們放棄了部分收入。因此，您會看到我們指導的中點在這一年確實出現了一點點。在這一點上，我們將每股收益與我們在投資者日所表明的持平。我想我們說過 216 真的沒有給你一個範圍。現在我會說 216 仍然是中點。我們對我們傳達的高個位數收入增長和相當好的每股收益感到非常樂觀。

My follow-up question, hoping to better understand some of the headwinds that are weighing on EBIT margins. You talked about some of the cost and logistics headwinds. Could you be a little bit more specific on how you expect those to trend over the course of fiscal '23? Because I think you need to go from the lower 4% range at the midpoint of the fiscal 1Q guidance and see that improve over the course of the year in order to get the full year to the 4.7% to 4.9%. So maybe talk a little bit about what you're seeing and then how you expect that to abate over the course of the year?

我的後續問題，希望能更好地了解影響息稅前利潤率的一些不利因素。您談到了一些成本和物流方面的不利因素。您能否更具體地說明您期望這些趨勢在 23 財年期間的趨勢？因為我認為你需要從第一財季指引中點的較低 4% 範圍內走出來，並看到這一年的改善，以便將全年從 4.7% 提高到 4.9%。所以也許談談你所看到的，然後你希望在這一年裡如何減少？

Yeah. Mark, I'll start by saying that in the last -- in a few years, we have shown our ability to really continuously improve our margin dollars, our margin rates. So we've really shown well in the middle of all those ups and downs and all the macro challenges that we've been really good at driving the right mix, the right kind of growth and managing through all our inefficiencies that happened as a result of supply chain and pandemic and all that.

是的。馬克，我首先要說的是，在過去的幾年裡，我們已經展示了我們真正持續提高保證金美元和保證金率的能力。因此，在所有這些起起落落和所有宏觀挑戰中，我們確實很好地展示了我們非常擅長推動正確的組合、正確的增長以及管理由此產生的所有低效率供應鍊和流行病等等。

So I'd say so fiscal '22, again, very good margin improvement. Our fiscal '23 guide right now still shows very good margin improvement. And I'd say that that'll move around a little bit in the quarters just because we continue to work through some of the supply chain inefficiencies, whether it's China shutdown or things like that. And we have to ramp up and down as we see availability of critical products. And so that will tend to happen, but we feel very good about kind of first is the mix of our bookings that converts to revenue that is improving our overall margin profile and which really gives us confidence in our ability to guide where we are guiding right now for fiscal '23. I'd say, yeah, it'll move around a little bit in the quarters. It's based on how much inefficiency happens, what supply chain disruptions, and things like that. But our history shows that we managed it extremely well and we'll continue to feel strong about how we can deliver the rest of the year.

所以我會說 '22 財政年度，再次，非常好的利潤率提高。我們現在的 23 財年指南仍然顯示出非常好的利潤率改善。我想說的是，這將在幾個季度內有所改變，只是因為我們繼續努力解決一些供應鏈效率低下的問題，無論是中國關閉還是類似的事情。當我們看到關鍵產品的可用性時，我們必須上下調整。所以這往往會發生，但我們感覺非常好首先是我們的預訂組合轉化為收入，這正在改善我們的整體利潤狀況，這真的讓我們對我們指導正確方向的能力充滿信心現在是 '23 財政年度。我會說，是的，它會在宿舍裡移動一點。它基於效率低下的程度、供應鏈中斷的情況等等。但我們的歷史表明，我們管理得非常好，我們將繼續對如何在今年餘下的時間裡實現目標充滿信心。

Our next question comes from the line of Matt Sheerin with Stifel.

我們的下一個問題來自 Matt Sheerin 和 Stifel。

I'm just following up on the question regarding supply chain challenges in the component constraints. It seems like you've over-delivered and a lot of your peers did too. And of course, you and your peers have built inventory over the last few quarters. Is that starting to benefit you where you're putting materials in place for orders a month, two months out and you're now helping fulfill that? And is that the strategy going forward with this inventory build?

我只是在跟進有關組件約束中的供應鏈挑戰的問題。看起來你已經超額交付了，你的很多同行也這樣做了。當然，您和您的同行在過去幾個季度中已經建立了庫存。當您為一個月、兩個月的訂單準備好材料而您現在正在幫助實現這一點時，這是否開始使您受益？這就是這種庫存構建的戰略嗎？

Yeah, Matt, first is spot on, right. I mean, the idea always as this inventory built up, we said before that it's all about kind of golden screw mindset worth waiting for one component, and as that component clears up, we want to be able to meet the demand for our customers. Right. And that's what you are seeing us execute to with the revenue upside that we're seeing in these quarters that as products comes in, and we're able to free up the bill of materials and build the product, we're able to execute really well.

是的，馬特，首先是正確的。我的意思是，這個想法總是隨著庫存的增加，我們之前說過，這是一種值得等待一個組件的金螺絲心態，隨著該組件的清理，我們希望能夠滿足客戶的需求。對。這就是您看到我們執行的目標，我們在這些季度看到的收入增長隨著產品的推出，我們能夠釋放材料清單並構建產品，我們能夠執行真的很好。

I'd say the inventory build-up itself, I expect that it'll start balancing out, right, towards the end of the year. And you're going to see that happen, and that's the right thing to do, because my eventual focus will always be to get turns back to where we think we wanted to be. And this is a very unique situation with what's happening with the supply chain conjunction, and so we're very committed to delivering the growth our customers want us to. That's why you see is inventory build-up. But the strategy won't be to continue to keep inventory at an inflated level to meet that demand. The hope is that the supply chain congestion at some point starts to ease up, so you can get to the right level of turns to deliver the growth that we're looking for.

我會說庫存增加本身，我預計它將在年底開始平衡。你會看到這種情況發生，這是正確的做法，因為我最終的重點將永遠是回到我們認為我們想要的位置。這是供應鏈結合所發生的非常獨特的情況，因此我們非常致力於實現客戶希望我們實現的增長。這就是為什麼您會看到庫存增加。但策略不會是繼續將庫存保持在膨脹水平以滿足需求。希望供應鏈擁堵在某個時候開始緩解，這樣您就可以達到正確的轉彎水平，以實現我們正在尋找的增長。

Got it. And just regarding the inventory, are your customers paying you in advance? Are you seeing an increase in customer deposits?

知道了。就庫存而言，您的客戶是否提前向您付款？您是否看到客戶存款有所增加？

Yeah, Matt. I'll take that one. They are. I wish it was a dollar-for-dollar offset. But if you look year-on-year at our working capital advances coming in from customers, Q4 of '22 versus Q4 2021, we're up almost 3 times. So that's, I'd say, close to $1 billion worth of help in terms of that offsets to inventory growth. So they are helping. I wish it was dollar-for-dollar, but it certainly has helped to mitigate the impact.

是的，馬特。我會拿那個。他們是。我希望這是一個美元對美元的抵消。但是，如果您按年查看我們從客戶那裡獲得的營運資金預付款，22 年第四季度與 2021 年第四季度相比，我們增長了近 3 倍。所以，我想說，就抵消庫存增長而言，價值接近 10 億美元的幫助。所以他們在幫忙。我希望它是對美元的，但它肯定有助於減輕影響。

Our next question comes from the line of Steven Fox with Fox Advisors.

我們的下一個問題來自 Steven Fox 與 Fox Advisors 的對話。

Couple of questions. First off, the cash balance is up substantially into the end of the year approaching $3 billion. Can you sort of talk about what's behind that? And you guys -- your investors don't want you to hold cash. What you're thinking about doing with it in the coming fiscal year? Especially with regard to the guidance, were there any of usage of cash is factored in? And then I have a follow-up.

幾個問題。首先，到年底現金餘額大幅上升，接近 30 億美元。你能談談這背後的原因嗎？你們——你的投資者不希望你持有現金。在下一個財年你打算用它做什麼？特別是在指導方面，是否考慮了現金的使用？然後我有一個跟進。

Paul, it's all yours.

保羅，這都是你的。

Okay, sure. So okay, I'll just maybe start with this. On free cash flow, we -- you didn't hear Stockmann's script, but I'll just kind of voice it over just so everyone is clear. $550 million is the free cash flow expectation for 2023 here. That will likely be more back-end loaded, as Revathi had alluded to. I mean, I think we'll continue to see some pressure on inventory for the next couple of quarters, but I would expect that to start to abate. So probably more back-half-loaded free cash year for us. In terms of the cash on the balance sheet itself. Look, we've been operating in a very unusual environment over the last few years. You got COVID. You got shortages. You got logistics constraints. Now you have war. And I think we've all concluded with that backdrop, it's smart to have flexibility and have some liquidity. And that liquidity has been beneficial for us. You look at the intra-quarter working capital requirements, the cash requirements from peak to trough, they're more significant than what they've been in the past couple of years. That peak to trough for us typically is, I don't know if 30% plus of our inventory level. And so you kind of do the back-of-the-envelope math on it. That's a fairly high peak-to-trough use of cash throughout the quarter.

好的，當然。好吧，我可能會從這個開始。關於自由現金流，我們——你沒有聽到斯托克曼的劇本，但我會稍微說一下，這樣每個人都清楚。 5.5 億美元是 2023 年的自由現金流預期。正如 Revathi 所暗示的那樣，這可能會更多地加載後端。我的意思是，我認為未來幾個季度我們將繼續看到庫存壓力，但我預計這種壓力會開始減弱。因此，對我們來說，可能會有更多的後半年免費現金年。就資產負債表本身的現金而言。看，在過去的幾年裡，我們一直在一個非常不尋常的環境中運營。你得了新冠病毒。你有短缺。你有物流限制。現在你有戰爭。我認為我們都在這種背景下得出結論，擁有靈活性並擁有一些流動性是明智的。這種流動性對我們有利。你看看季度內的營運資金需求，從高峰到低谷的現金需求，它們比過去幾年更重要。對我們來說，從高峰到低谷通常是，我不知道是否超過我們庫存水平的 30%。因此，您可以對其進行粗略的數學運算。這是整個季度現金使用的高峰到低谷相當高的情況。

Inventory, as you know, it's significantly higher than it was at that sort of that pre-COVID level, and there is -- we need some balance sheet support -- we need to balance sheet strength to support that. I'll say this, we like where we are. We're very strong financial position to manage through what is a, as you know, very dynamic environment because of liquidity that we have. We don't want to be in a position to pinch ourselves here, should things soften up a little bit. So we like where we are. It's a high balance as I see today, but I think it's appropriate given the dynamic environment and what we've been seeing with inventory.

如您所知，庫存明顯高於COVID之前的那種水平，而且我們需要一些資產負債表支持，我們需要資產負債表實力來支持這一點。我會這麼說，我們喜歡我們所處的位置。如您所知，由於我們擁有流動性，我們擁有非常強大的財務狀況來管理一個非常動態的環境。如果事情稍微緩和一點，我們不想在這裡掐自己。所以我們喜歡我們所處的位置。正如我今天所看到的，這是一個高度平衡，但我認為考慮到動態環境和我們在庫存方面看到的情況，這是合適的。

And the guidance for the full year doesn't assume use of cash for anything outside of working capital and organic initiatives?

全年的指導並沒有假設將現金用於營運資金和有機計劃之外的任何事情？

So we -- you are correct. We are assuming that share count is flat. And so the $2.16 EPS that we're guiding to here at the midpoint presumes that we take care of things like dilution from equity comp, but we have not baked in share count declines.

所以我們——你是對的。我們假設股票數量持平。因此，我們在中點指導的每股收益為 2.16 美元假設我們處理了諸如股權稀釋之類的事情，但我們並沒有考慮到股票數量的下降。

And then just as a follow-up on the -- like you pointed out the auto, your auto sales are significantly outgrowing vehicle production right now. And I'm just curious if we start to assume whatever normal production looks like maybe later in the year, hopefully, but does that outgrowth sort of normalize also? Or should we think of the outgrowth you're having right now as sustainable in the subsequent quarters... And if so, why or why not?

然後就像你指出的汽車的後續行動一樣，你的汽車銷量現在大大超過了汽車產量。我只是好奇我們是否開始假設正常生產可能會在今年晚些時候出現，希望如此，但這種結果也會正常化嗎？或者我們是否應該認為您現在擁有的結果在接下來的幾個季度中是可持續的……如果是這樣，為什麼或為什麼不呢？

We've said in the Investor Day we spend a lot of time talking about our focus on kind of the EV space and can next-gen mobility. And we feel very strongly and we did a deep dive on it for the reason that we really feel strongly that we are outperforming the industry because our technology is very strong. We're really getting rewarded in terms of bookings for this next-gen mobility. So our reason for outperforming I feel is two-fold. One is, we're always able to perform well in terms of supply chain shortages and how we manage that. We have a strong relationship with our OEMs and suppliers. So that definitely helps. But I feel comfortable with our outperformance for the sector even moving forward just because of the thesis we laid out in the Investor Day that this is a high focus area for us, lot of new wins. You saw the kind of estimated AR number that Mike Thoeny laid out for this space. So our view is that we'll continue to outperform the IHS guidance for the space.

我們在投資者日說過，我們花了很多時間談論我們對電動汽車空間和下一代移動性的關注。我們感覺非常強烈，我們對此進行了深入研究，因為我們真的強烈認為我們的表現優於行業，因為我們的技術非常強大。在預訂這種下一代移動性方面，我們確實得到了回報。因此，我認為我們表現出色的原因有兩個。一是，我們總是能夠在供應鏈短缺以及我們如何管理方面表現良好。我們與原始設備製造商和供應商建立了牢固的關係。所以這絕對有幫助。但我對我們在該行業的出色表現感到滿意，即使只是因為我們在投資者日提出的論點，即這是我們高度關注的領域，很多新的勝利。你看到了 Mike Thoeny 為這個空間設計的那種估計的 AR 數字。因此，我們的觀點是，我們將繼續超越 IHS 對該領域的指導。

Our next question comes from Ruplu Bhattacharya with Bank of America.

我們的下一個問題來自美國銀行的 Ruplu Bhattacharya。

Revathi, you took up the fiscal '23 revenue guide by $400 million. Can you talk about which end markets are outperforming versus what you thought at the Analyst Day. And this might be nitpicking but -- I mean you kept the EPS guidance at $2.16. That the $400 million probably translates to about $0.03 or $0.04 in EPS. Is there any further headwinds to margins than what you had thought at the Analyst Day? Or is it just you're being conservative on the EPS given the macro situation now?

Revathi，您在 23 財年的收入指南中增加了 4 億美元。你能談談哪些終端市場的表現優於你在分析師日的想法嗎？這可能有點吹毛求疵，但是——我的意思是你將每股收益指引保持在 2.16 美元。這 4 億美元可能相當於每股收益 0.03 美元或 0.04 美元。與您在分析師日所想的相比，利潤率是否有進一步的阻力？還是考慮到現在的宏觀形勢，您只是對每股收益持保守態度？

I'd say the first thing in terms of overall lifting our revenue guide, we really outperformed our Q4 number, as you saw. Right. And that -- and looking at that and our ability to just manage this whole shortage clearance and everything for the year, we felt like we had to take up revenue for FY '23 right now, even though it's early in the year. We feel really good about how we're clearing shortages and how we're managing demand. And so that was kind of the overall view. And the sectors, I would say, is across the board. And the reason I would say, Ruplu, that's the cases is because we have demand backlog in all of our six segments. It's not one or the other. So because of that, I would say overall all six segments are outperforming to what our original thesis for the year was, and we feel quite comfortable that we will continue to see that over the next few quarters that will be clearing shortages and improving our demand outlook pretty well to the guidance we've given.

我想說的第一件事是全面提升我們的收入指南，正如你所看到的，我們確實超過了第四季度的數字。對。而且 - 考慮到這一點以及我們管理整個短缺清理和今年所有事情的能力，我們覺得我們現在必須在 23 財年獲得收入，即使它是今年年初。我們對如何解決短缺以及如何管理需求感覺非常好。這就是整體觀點。我想說，這些行業是全面的。我之所以會說，Ruplu，之所以會出現這種情況，是因為我們所有六個部門都有需求積壓。這不是一個或另一個。因此，我想說，總體而言，所有六個細分市場的表現都優於我們今年的原始論點，我們感到非常放心，我們將繼續看到在接下來的幾個季度中，這將消除短缺並改善我們的需求我們給出的指導前景很好。

I'd say in terms of EPS, Paul will jump into this. I think it's just a little early in the -- first is we feel very comfortable about our margin guide. Let me be very clear about that. Our margin percent, we have shown our ability to deliver those. Yeah, will there be inefficiencies through quarters because of China shutdown or something else, yeah, absolutely, that's going to happen. But we always come through in terms of how we manage the combination of kind of productivity and managing this efficiency. So feel very comfortable about our adjusted operating margin guide of 4.8%. I mean just little too -- we've shown, we have given you a very nice EPS guide year-over-year improvement. Just a little too early to start changing our numbers for fiscal '23. And you know how we are in terms of how we guide, Ruplu. I think we feel like first quarter, it's too early to do that. So we'll look through the year and see how it comes through and then hopefully EPS will move up with the rest of the numbers. Paul, anything to add?

我想說就每股收益而言，保羅會跳進這個話題。我認為這只是有點早 - 首先是我們對我們的保證金指南感到非常滿意。讓我非常清楚這一點。我們的利潤率百分比，我們已經展示了我們提供這些的能力。是的，是否會因為中國關閉或其他原因而導致整個季度的效率低下，是的，絕對會發生這種情況。但我們總是在如何管理生產力的組合和管理這種效率方面取得成功。因此，我們對調整後的 4.8% 營業利潤率指南感到非常滿意。我的意思也很少——我們已經展示了，我們為您提供了一個非常好的 EPS 指南，逐年改進。開始更改我們 23 財年的數字還為時過早。你知道我們在如何指導方面的情況，Ruplu。我認為我們感覺就像第一季度一樣，現在這樣做還為時過早。因此，我們將回顧這一年，看看它是如何度過的，然後希望每股收益會隨著其餘數字的增長而上升。保羅，有什麼要補充的嗎？

Yeah, maybe just a couple of minor things you, Ruplu, I mean for modeling purposes. You probably want to model a little bit more interest cost. That's probably a couple of cents of headwind and probably the higher end of that 13% to 15% tax rate given what we know today. That's the sort of the offset to incremental margin that you would expect from that $400 million more in revenue. So it all kind of wrenches out.

是的，也許只是一些小事情，Rupl，我的意思是用於建模目的。您可能想要模擬更多的利息成本。鑑於我們今天所知道的，這可能是幾美分的逆風，可能是 13% 至 15% 稅率的高端。這就是您期望從這 4 億美元的收入中獲得的增量利潤的一種抵消。所以這一切都變得很糟糕。

Yeah. No, that makes sense. Thanks for the details on that. And then just on some of the investments you're going to make in fiscal '23. I think you had said CapEx of 2%. Is that still the case and what areas are you going to be investing in organically? And then, any thoughts on M&A? I mean, do you think that's feasible in this environment? So if -- any thoughts on the capital allocation.

是的。不，這是有道理的。感謝您提供詳細信息。然後只是關於你將在 23 財年進行的一些投資。我想你說過 2% 的資本支出。情況仍然如此，您將在哪些領域進行有機投資？然後，對併購有什麼想法嗎？我的意思是，您認為在這種環境下可行嗎？因此，如果 - 對資本配置有任何想法。

Yeah. I'd say, let me start with overall CapEx. Yes, we're going to have to continue to invest in the CapEx rate we committed to just because our organic growth is so strong. Right. We're going to have to invest in growth to deliver the bookings we are seeing. And then the commitments that we've given to our customers. So absolutely. I'd say in terms of the areas itself, all our five segments, I'd say, outside of Consumer Devices will show strong year-over-year growth and will need to have capital invested for those businesses. We always tend to see a little bit more in Reliability just because of the capital intensity of that business. We'll also be looking to add square footage in areas that we are running out of space, and it tends to be all the places where you see the whole re-shoring regionalization trend. But it's North America, or parts of Europe, or parts of Southeast Asia.

是的。我想說，讓我從整體資本支出開始。是的，我們將不得不繼續投資於我們承諾的資本支出率，因為我們的有機增長如此強勁。對。我們將不得不投資於增長以提供我們所看到的預訂。然後是我們對客戶的承諾。所以絕對。我想說的是，就領域本身而言，我想說的是，除了消費設備之外，我們所有的五個部門都將顯示出強勁的同比增長，並且需要為這些業務投資。由於該業務的資本密集度，我們總是傾向於在可靠性方面看到更多。我們還將尋求在空間不足的區域添加平方英尺，並且往往是您看到整個重新支撐區域化趨勢的所有地方。但它是北美，或歐洲部分地區，或東南亞部分地區。

So we'll continue to look at adding back. We're also making some strong productivity investments. I talked about how we feel very good about our manufacturing technology excellence. And so continuing to invest in that to really drive the productivity investment, so we can see that long term 5% margin growth -- margin percent that we talked about is important. So, I'd say we'll see a little bit of everywhere. it's kind of how we're thinking about investing for growth. Paul, you want to take the...

因此，我們將繼續研究添加回來。我們還進行了一些強有力的生產力投資。我談到了我們對我們卓越的製造技術的感覺非常好。因此，繼續投資以真正推動生產力投資，因此我們可以看到長期 5% 的利潤率增長——我們談到的利潤率百分比很重要。所以，我想說我們會到處看到一點點。這就是我們考慮投資增長的方式。保羅，你想拿...

Yeah. In terms of M&A, we went to leave the door open to that. You never know when opportunities arise at fair price, but I would say on balance priority for us is more stock buyback right now then M&A.

是的。在併購方面，我們敞開大門。你永遠不知道機會何時以公平的價格出現，但我想說，總的來說，我們優先考慮的是現在更多的股票回購，然後是併購。

Okay. Thanks for all the details and congrats on the strong execution.

好的。感謝您提供所有詳細信息，並祝賀強大的執行力。

Our next question comes from Jim Suva with Citigroup.

我們的下一個問題來自花旗集團的 Jim Suva。

And my question as well as the follow-up for kind of the same question, so I'll kind of pose the same questions or rate of be in Paul with just kind of a different angle, and that is now that we've had multiple years of trade wars, shipping costs, COVID outbreaks, component shortages, power outages, all these challenges. I'm wondering, first for rate to be, do you think that just-in-time delivery model needs to be adjusted to permanently build in some buffer? And then kind of the same question to Paul. Is it worth your contracts of instead of just doing a straight cost-plus model now, not knowing what the future shipping, inbound, steel costs, outgoing steel costs are, is it worth building in contracts that are different than in the past would like some type of indexing? Or is that just too forward-looking?

我的問題以及類似問題的後續行動，所以我會以不同的角度提出相同的問題或在保羅身上的比率，現在我們已經有了多年的貿易戰、運輸成本、COVID 爆發、組件短缺、停電，所有這些挑戰。我想知道，首先是費率，您是否認為需要調整準時交付模式以永久建立一些緩衝？然後向保羅提出了同樣的問題。是否值得你的合同，而不是現在只做一個直接的成本加成模型，不知道未來的運輸、入境、鋼鐵成本、出境鋼鐵成本是多少，是否值得建立與過去不同的合同？某種類型的索引？還是這太具有前瞻性了？

I'd say -- let me start with the just-in-time delivery model. I have spent my entire career in operations, supply chain, and at many other end markets outside of kind of what Flex is in. And what I see with what is happening today, which is such a shift in globalization moving to the regionalization, restoring manufacturing to the point of use is a huge trend. Right. And then you combine that with the supply chain congestion that people are learning from, which all the things you talked about, whether it's trade or pandemic issues, then there is a view, hey, should I have more buffer inventory to manage for all of that? And is the just-in-time delivery model dead. Right. I would say, Jim. my thesis on all of this and will say time plays out in terms of how all those works is that we'll somewhere in the middle. I think customers are all of us including would be a little bit more reticent to have very lean inventory models. Right. And that will be important particularly when you have products that have long supply chains.

我想說——讓我從準時交付模式開始。我的整個職業生涯都在運營、供應鍊和許多其他終端市場中度過，除了 Flex 所從事的行業。我所看到的今天正在發生的事情，這是全球化向區域化的轉變，恢復製造到使用點是一個巨大的趨勢。對。然後你把它與人們正在從中學習的供應鏈擁塞結合起來，你談到的所有事情，無論是貿易還是大流行問題，然後就有一個觀點，嘿，我是否應該有更多的緩衝庫存來管理所有人那？準時交貨模式已經死了。對。我會說，吉姆。我的論文是關於所有這一切的，並且會說時間在所有這些工作方式方面發揮作用，我們將處於中間位置。我認為客戶是我們所有人，包括對非常精簡的庫存模型會更加沉默。對。當您擁有具有較長供應鏈的產品時，這一點尤其重要。

But on products that are going to have shorter supply chains, because we are reassured them or bring them closer to the point of use, there the just-in-time models will have some justification to continue. So it'll really depend on the product and the end market that you're in, and I'm very sure you're going to end up with a blended model based on the complexity of the supply chain. So I wouldn't say all dead, but definitely in some cases there's long complex supply chain. Everybody is going to be talking about that more and saying let's build a different model than we had before. And we look at that very, very closely in terms of our planning processes and what would provide the best value for us and customers, and how can you get the best level of delivery performance with kind of all this volatility built-in. And so, I would say, my view is it's going to end up somewhere in the middle, and it'll depend on the products and the complexity of the supply chain. Paul, you want to jump in on the contract?

但是對於供應鏈較短的產品，因為我們對它們感到放心或使它們更接近使用點，因此即時模型將有一些理由繼續下去。所以這真的取決於你所在的產品和終端市場，我很確定你最終會得到一個基於供應鏈複雜性的混合模型。所以我不會說都死了，但在某些情況下肯定有很長的複雜供應鏈。每個人都會更多地談論這一點，並說讓我們建立一個與以前不同的模型。我們非常非常仔細地研究我們的計劃流程，以及什麼可以為我們和客戶提供最佳價值，以及如何在內置所有這些波動性的情況下獲得最佳交付績效水平。所以，我想說，我的觀點是它最終會在中間的某個地方結束，這將取決於產品和供應鏈的複雜性。保羅，你想加入合同嗎？

Yeah, I'm happy to. So, I'm glad you asked the question, Jim, because it's helpful to maybe demystify this a little bit for investors. If you look at the model, the contracting model in this industry, like you said, it is largely cost plus. When you have episodes of higher than usual inflation or micro shocks to the system -- a good example would be a big shutdown in Malaysia in July of last year -- June of last year, which basically shut the country down for a month, similar to what we're seeing here in Shanghai, there is various mechanisms in our contracts today and contracts in the future to protect us from those headwinds. Hard-pegged costs.

是的，我很高興。所以，我很高興你問了這個問題，吉姆，因為這對投資者來說可能會有所幫助。如果你看模式，這個行業的承包模式，就像你說的，主要是成本加成。當您出現高於平時的通貨膨脹或對系統產生微小衝擊的情況時——一個很好的例子是去年 7 月馬來西亞的大規模停工——去年 6 月，這基本上使該國關閉了一個月，類似就我們在上海看到的情況而言，我們今天和未來的合同中有各種機制來保護我們免受這些不利因素的影響。硬掛鉤成本。

So, very specific component inflation costs, specific expediting fees. Those are fairly easy to contractually just passed right through. It's -- we unfortunately don't have the benefit of 15% op margins to absorb all that. We just can't. And so that's the nature of the industry. Those costs, again, that you can hard peg, get passed back to the customers, and that protects the overall margin dollars for companies like Flex. The softer costs, things that you'd mentioned, COVID, the stops and starts, inefficiency from under-absorption, that's a little bit more difficult to hard peg. We work on ways to mitigate that. It's I think for the most part we've got really good relationships with our customers and we find ways to work things out. But that's kind of how it works for the most part. Those incremental costs do get pass through directly as often as we can. So largely protected.

因此，非常具體的組成部分通貨膨脹成本，具體的加急費用。這些很容易通過合同直接通過。這是 - 不幸的是，我們沒有 15% 的運營利潤率來吸收所有這些。我們就是做不到。這就是這個行業的本質。這些成本，你可以硬釘住，轉回給客戶，這保護了像 Flex 這樣的公司的整體利潤。較軟的成本，你提到的事情，COVID，停止和啟動，吸收不足導致的效率低下，這有點難以釘住。我們正在研究減輕這種情況的方法。我認為在大多數情況下，我們與客戶的關係非常好，我們找到了解決問題的方法。但這就是它在大多數情況下的工作方式。這些增量成本確實會盡可能多地直接通過。所以在很大程度上受到保護。

You bring up another interesting point when it comes to inventory. Look, is the just-in-time model broken? Is there going to be more inventory in the system going forward, particularly as we continue to see trends with things like regionalization? I don't know. But that's a -- it's a very interesting question because what we're seeing it today with the support that we're getting from our customers in the form of working capital advances. I think I had mentioned to Matt that we've got significant year-on-year growth and working capital advances. It's almost -- it's up almost 3 times. That's an operating model difference. I think our customers in the past haven't been asked to help share the burden of that inventory growth because I think we've been in a situation like this in a very, very long time. That's a potential shift in the operating model. And what I would say is, we're -- this is too leaner margin business to bear all of that inventory cost ourselves. If something does happen structurally, we'll need customer support -- continued customer support on that. And I would say that's no different than anyone else in the industry. But very good question.

在庫存方面，您提出了另一個有趣的觀點。看，準時制模型壞了嗎？未來系統中是否會有更多庫存，特別是當我們繼續看到區域化等趨勢時？我不知道。但這是一個 - 這是一個非常有趣的問題，因為我們今天看到它是在我們從客戶那里以營運資金預付款的形式獲得的支持下看到的。我想我已經向馬特提到，我們的同比增長和營運資金都有顯著增長。差不多——漲了將近3倍。這是運營模式的差異。我認為過去我們的客戶沒有被要求幫助分擔庫存增長的負擔，因為我認為我們在很長一段時間內都處於這種情況。這是運營模式的潛在轉變。我想說的是，我們 - 這是一個利潤太低的業務，無法自己承擔所有庫存成本。如果在結構上確實發生了某些事情，我們將需要客戶支持——持續的客戶支持。我會說這與業內其他任何人都沒有什麼不同。但非常好的問題。

Our next question comes from Paul Chung with J.P. Morgan.

我們的下一個問題來自 J.P. Morgan 的 Paul Chung。

And just want to echo very nice execution here. So first just wanted to talk about the redesign opportunities you mentioned kind of driven by some of the legacy component constraints. So, are you seeing opportunities we can kind of capture higher margins here on key products during expanding some of that design work? And is this dynamic kind of expanding across all of your products? Or are you seeing this more so in Health Solutions?

只想在這裡呼應非常好的執行。因此，首先只想談談您提到的重新設計機會，這些機會是由一些遺留組件限制驅動的。那麼，您是否看到了在擴展部分設計工作期間我們可以在關鍵產品上獲得更高利潤的機會？這種動態類型是否會擴展到您的所有產品？還是您在健康解決方案中看到的更多？

Paul, I'll answer that. I'd say first is, the redesign opportunity is across the board. I see that in Lifestyle. I see that in Health. I see that in Automotive. I see that in Industrial. And the reason is because, as our customers are understanding the kind of the platform effects of how their chip design is, the significance of that, they really relying on Flex to provide them a new solution that longer-term will provide them better resilience than where they are today. Right? So I would say this redesign opportunity for us is across the board.

保羅，我會回答的。我首先要說的是，重新設計的機會是全面的。我在生活方式中看到了這一點。我在《健康》中看到了這一點。我在汽車中看到了這一點。我在工業中看到了這一點。原因是，當我們的客戶了解他們的芯片設計所產生的平台效應及其重要性時，他們真正依靠 Flex 為他們提供一種新的解決方案，從長遠來看，這將為他們提供比他們今天在哪裡。對？所以我想說這個重新設計的機會對我們來說是全面的。

And we are being asked to do that every day or we're providing that to customers all the time. I'm seeing that in small/medium-size customers in Lifestyle or very large kind of Health Solutions customers, everybody is asking about, "Hey, how do I do this differently, and how can you do this for me?" So I'd say this is really good work because this is the kind of complexity that I talked about that now customers are relying on us to solve for them. And it is of course our job to make sure that these redesigns also work in a way that it's a win-win for our customers and for us. And longer term, it's better margin for all of us. So, Paul, I'd say this is definitely happening and happening across the board.

我們每天都被要求這樣做，或者我們一直在向客戶提供。我看到在 Lifestyle 的中小型客戶或非常大的 Health Solutions 客戶中，每個人都在問，“嘿，我如何以不同的方式做到這一點，您如何為我做到這一點？”所以我會說這是一項非常好的工作，因為這就是我談到的那種複雜性，現在客戶依靠我們來解決他們的問題。當然，我們的工作是確保這些重新設計也能以一種對我們的客戶和我們來說是雙贏的方式發揮作用。從長遠來看，這對我們所有人來說都是更好的利潤。所以，保羅，我想說這肯定正在發生，而且正在全面發生。

And then my follow-up on Consumer Devices. Where our customers going if they don't make the cut on your kind of profitability hurdles. Are you seeing some customers actually come back after shopping around? And is this trying to kind of improving the overall pricing environment in your view for the overall industry?

然後是我對消費設備的跟進。如果我們的客戶沒有減少您的盈利障礙，他們會去哪裡。您是否看到一些顧客在購物後真的回來了？在您看來，這是否試圖改善整個行業的整體定價環境？

What I'd say is, I think in general I would say of the overall AMS industry has become disciplined. Right? So, let me start with that. I would say, in my last three years, across the board, we have seen discipline emerge this industry in terms of how we look at projects or how we execute. So I think that we have seen general discipline and you've seen that in the margin rates of the industry itself. Right? Everybody has started improving in the last few years in terms of margin rate. I'd say for Consumer Devices itself there is enough people, and I'm not going to name names of people who would where these hurdle rates would be fine for them. Right. And they are the ones who will win and take that business. And it works for their business model where they have a different cost of capital or they're fine with working with those margin rates.

我想說的是，總的來說，我認為整個 AMS 行業已經變得自律。對？所以，讓我從那個開始。我想說，在我過去的三年裡，我們已經看到整個行業在我們如何看待項目或如何執行方面出現了紀律。所以我認為我們已經看到了普遍的紀律，你已經在行業本身的利潤率中看到了這一點。對？在過去的幾年裡，每個人的保證金率都開始提高了。我會說消費設備本身有足夠的人，而且我不會說出這些門檻對他們來說合適的人的名字。對。他們將贏得併接受這項業務。它適用於他們的商業模式，他們有不同的資本成本，或者他們可以很好地處理這些保證金率。

In some cases, we do have customers who come back to us and we work with the parameters that we have laid out and what Flex offers as a solution, and that's a win-win for both of us, right, because they saw something in Flex that works for them. But we are very good at. You will, you have seen in the last few years, we've become really good at managing the consumer device business to within the parameters of what we want to see. So that's why overall margins improve for that business. It is contained in terms of the type of growth that the mix within that consumer device business is changing. We like the more mid-size customers for that. So I'd say, yeah, there is always people to take the business that we may not want. And in some cases, customers come back and we welcome that because that's a win-win for both of us.

在某些情況下，我們確實有客戶回到我們身邊，我們使用我們制定的參數以及 Flex 提供的解決方案，這對我們雙方來說都是雙贏的，對，因為他們看到了一些東西適合他們的 Flex。但是我們很擅長。您會，您在過去幾年中已經看到，我們已經非常擅長管理消費設備業務，使其達到我們希望看到的參數範圍內。因此，這就是該業務的整體利潤率提高的原因。它包含在消費設備業務中的組合正在發生變化的增長類型方面。我們喜歡更多的中型客戶。所以我會說，是的，總是有人接手我們可能不想要的業務。在某些情況下，客戶回來了，我們對此表示歡迎，因為這對我們雙方來說都是雙贏的。

Our last question comes from the line of Melissa Fairbanks with Raymond James.

我們的最後一個問題來自梅麗莎費爾班克斯和雷蒙德詹姆斯的對話。

I'm glad to make it in under the wire. I think you referenced some of the inefficiencies related to China shutdowns that have happened most recently. Just wondering if you could quantify the headwind this quarter or what's baked into the 1Q outlook, if anything?

我很高興能在電線下做到這一點。我認為您提到了最近發生的與中國停工相關的一些低效率問題。只是想知道您是否可以量化本季度的逆風或第一季度前景中的因素，如果有的話？

Yeah. Melissa, I'll start. Paul can jump in. One is, I'd say, I'm not sure I want to quantify like on a case-by-case basis, but we expect some of these inefficiencies to continue at least for the next quarter. You have seen that China is definitely not freed up and particularly where this kind of impacts us in areas like our Industrial business, which has got a lot of kind of lower volume, higher mix, right. So, managing that mix with the shortages becomes really, really tough, and they have a lot of supply chain dependency on China in particular. So I'd say we kind of expect these inefficiencies to continue through next quarter, because China is not easing up anytime soon. But that's why we have a diverse portfolio. We have a diverse portfolio, and you've seen it's played out well for us over the last few years.

是的。梅麗莎，我要開始了。保羅可以加入。一個是，我會說，我不確定我是否想根據具體情況進行量化，但我們預計其中一些效率低下的情況至少會在下個季度繼續存在。你已經看到中國絕對沒有被釋放，特別是在這種影響我們的領域，比如我們的工業業務，它有很多低產量、高組合，對吧。因此，管理這種與短缺的混合變得非常非常困難，尤其是他們對中國有很大的供應鏈依賴。所以我想說，我們有點預計這些低效率將持續到下個季度，因為中國不會很快放鬆。但這就是我們擁有多元化產品組合的原因。我們擁有多元化的產品組合，您已經看到它在過去幾年中對我們來說效果很好。

One segment, one business unit is down. The other is up. We get to a variable to manage the mix through all of that. But at the end of the day, right, highest EPS year that we've ever had, highest EPS quarter, our guide for Q1 is still very strong. Full year, we have a very strong EPS guide. So I'd say we'll see some pluses and minuses and inefficiencies some more in the near term, but we expect that we're very good at managing them. So we'll, see that margin rates continue to move up through the year.

一個部門，一個業務部門倒閉。另一個起來了。我們得到一個變量來管理所有這些混合。但歸根結底，對，我們曾經擁有的最高每股收益年度，最高每股收益季度，我們對第一季度的指導仍然非常強勁。全年，我們有一個非常強大的 EPS 指南。所以我想說我們會在短期內看到一些優點和缺點以及效率低下，但我們希望我們非常擅長管理它們。因此，我們將看到保證金率在全年繼續上升。

I'd say so very excellent execution in the face of all of these challenges. And then if I could just one quick follow-up, the detail that you gave us for Nextracker is extremely helpful. It's obviously a question that we get asked about quite a bit. It (technical difficulty) just wondering if, as that business starts to gain scale, does it become lumpier in nature as you get to larger scale deployment, for the near term, should we just kind of assume just kind of the steady state growth rate?

面對所有這些挑戰，我會說非常出色的執行力。然後，如果我可以快速跟進，您為 Nextracker 提供的詳細信息將非常有幫助。這顯然是一個我們經常被問到的問題。它（技術難度）只是想知道，隨著該業務開始擴大規模，當您進行更大規模的部署時，它是否會變得更加笨拙，在短期內，我們是否應該假設只是一種穩態增長率?

I don't -- Yeah, I think steady state is more likely, Melissa. Nextracker is a project business. But as you -- as you see the scale of that business continue to grow, I think you get a bit of a portfolio effect. So, yes, there will be large projects that ramp up and ramp down, but one, the nature of the accounting, which is percentage of completion accounting sort of helps to smooth that a little bit. And also again back the portfolio theory, I think you get such a large base that becomes a little bit more immune to project-specific stops and starts.

我不——是的，我認為穩定狀態更有可能，梅麗莎。 Nextracker 是一家項目公司。但是當您看到該業務的規模繼續增長時，我認為您會獲得一些投資組合效應。所以，是的，會有一些大型項目會增加和減少，但其中之一是會計的性質，即完成百分比會計有助於稍微平滑這一點。並且再次支持投資組合理論，我認為您獲得瞭如此龐大的基礎，從而對特定於項目的停止和啟動更加免疫。

Yeah. And it's actually -- and we got so much backlog and so much growth in it, Melissa, that at this point, we're just expecting that growth to be more steady state. So we think that, just as you clear that pipeline and backlog, which is there for the next few years, it will be steady state as we go through that.

是的。實際上 - 我們有如此多的積壓和如此多的增長，梅麗莎，在這一點上，我們只是期望這種增長更加穩定。因此，我們認為，正如您清除未來幾年存在的管道和積壓工作一樣，在我們經歷的過程中它將保持穩定狀態。

I just want to close by saying on behalf of my leadership team want to thank all our customers and our -- for your trust and partnership and our shareholders, of course, for your support, and most importantly the Flex team for all their hard work and their achievements for this past fiscal year. So thank you everyone for joining us.

最後，我想代表我的領導團隊感謝我們所有的客戶和我們的——感謝您的信任和合作夥伴關係以及我們的股東，當然，感謝您的支持，最重要的是 Flex 團隊的所有辛勤工作以及他們在過去一個財政年度的成就。所以感謝大家加入我們。

This concludes today's conference call. Thank you for joining. You may now disconnect.

今天的電話會議到此結束。感謝您的加入。您現在可以斷開連接。