Jabil Inc.

Greetings and welcome to the Jabil second quarter of fiscal year 2021 earnings call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Adam Barry, Vice President of Investor Relations. Please go ahead, sir.

Good morning, and welcome to Jabil's second quarter of fiscal 2021 earnings call. Joining me on today's call are Chief Executive Officer Mark Mondello and Chief Financial Officer Mike Dasdor. Please note that today's call is being webcast live, and during our prepared remarks, we will be referencing slides. To follow along with the slides, please visit Jabil.com within our investor section of our website. At the conclusion of today's call, the entire call will be posted for audio playback on our website. Before handing the call over to Mark, I'd now ask that you follow our earnings presentation with the slides on the website, beginning with our forward-looking statement. During this conference call, we will be making forward-looking statements. including, among other things, those regarding the anticipated outlook for our business, such as our currently expected third quarter and fiscal year 2021 net revenue, earnings, and cash flows. These statements are based on current expectations, forecasts, and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. An extensive list of these risks and uncertainties are identified in our annual report on Form 10-K, for the fiscal year ended August 31st, 2020 and other filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, it's now my pleasure to turn the call over to Mark.

Thanks, Adam. Good morning. I appreciate everyone taking time to join our call today. I'll begin by offering a warm thanks to all of our people here at Jabil. Thank you for your commitment and thank you for always making safety your top priority. And stepping back and reflecting for a moment, it's hard to believe that 12 months have passed since we first encountered COVID. I think about sitting alongside Mike and Adam one year ago during our March 2020 earnings call. when clarity vanished and uncertainty ran wild. Yet in typical Jabil fashion, our people did what they do. They dove in and gave their very best to combat the pandemic. They did so by looking after one another while taking outstanding care of our customers. It's a point in time that I'll never forget. It's a point in time that highlights the level of respect and admiration that I have for our team here at Jabil. Their attitude and their actions continue to impress. And for sure, there's no other team I'd rather be part of. Again, much thanks to all of our employees who simply make Jabil, Jabil. Please turn to slide five, where we'll take a look at our 2Q results. Our second quarter came in well ahead of expectations, driven by stronger than expected product demand, solid execution, and a well-balanced contribution throughout the entire company. The team delivered core earnings per share of $1.27 on revenue of $6.8 billion, resulting in a core operating margin of 4.2%. I'm really pleased with our financial results for the quarter, although what's quite interesting to me is the overall construct of the business in combination with the improvements we've made to our balance sheet. All in all, our performance during the first half of the year gives us excellent momentum as we push towards the back half of fiscal 21. It also sets a firm foundation for further margin expansion as we look to FY22. As customary, Mike will provide more detail around our second quarter results during his prepared remarks. I'd now like to share a pie chart which is indicative of our commercial portfolio. Slide 6 underscores the effectiveness of our approach and the base from which we operate. Today, our business is wide-ranging and resilient. This is especially true when any individual product or product family is faced with a macro disruption or cyclical demand. Furthermore, our current business mix provides a unique set of capabilities. Innovative capabilities openly shared across the enterprise with speed and precision as we simplify the complex for our customers. It's a proven formula that's trusted by many of the world's most remarkable brands. Moving to slide seven, I'll address our updated outlook for the year. We now believe core earnings will be in the neighborhood of $5 a share, an increase of 25% from what we anticipated back in September. with top line revenue coming in around $28.5 billion. This incremental revenue improves our portfolio as evident by another 10 basis point increase to core operating margin, which we now forecast to be 4.2% for the year. Lastly, we remain committed to generating a minimum of $600 million in free cash flow. a testament to how we're managing our capital investments. As I wrap up the outlook, it's notable that our strategy is working, our path is well understood, and how we go about producing results is important. On this last point, when we think about the how, we think about purpose. A purpose that guides us in our journey a purpose which is grounded in a series of behaviors. Behaviors such as keeping our people safe, servant leadership, ensuring a fully inclusive environment, and giving back to our communities around the world. I'm just so proud that our team is hitting the mark in all of these areas. As we transition to my final slide, I want to once again say thanks to our team. Their efforts over the past two to three years have allowed us to reshape the business as we've targeted growth in select markets. Markets that largely align with secular trends. A few examples of these being 5G, personalized healthcare, electric vehicles, digital learning, cloud computing, clean energy, and eco-friendly packaging. Our team continues to develop deep domain expertise in concert with these secular tailwinds. I like the decisions we're making and what we're doing. And we do what we do while respecting the environment and safeguarding our workplace. We're committed to a workplace which encompasses tolerance, respect, and acceptance. We encourage each and every employee here at Jabil to be their true self. We strive to make the world just a little bit better, a little bit healthier, and a little bit safer each and every day. One factor that makes good companies great is possessing a value system which allows them to solve problems over and over again. We embrace this way of thinking and welcome the challenges put forth by our customers. Thank you, and I'll now turn the call over to Mike.