What changed in this filing

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Item 1. Business

2021-10-22 compared with 2020-10-22 · 91 added, 43 removed, 230 unchanged (37% of the section changed)

4 unchanged sentences

We serve our customers primarily through dedicated business units that combine highly automated, continuous flow manufacturing with advanced electronic design and design for manufacturability.

We depend, and expect to continue to depend, upon a relatively small number of customers for a significant percentage of our net revenue, which in turn depends upon their growth, viability and financial stability.

Based on net revenue, for the fiscal year ended August 31, 2020 , our largest customers include Amazon.com, Inc., Apple, Inc., Cisco Systems, Inc., Hewlett-Packard Company, Ingenico Group, Johnson and Johnson, LM Ericsson Telephone Company, NetApp, Inc., SolarEdge Technologies Inc., and Tesla, Inc.

For the fiscal year ended August 31, 2020 , we had net revenues of $27.3 billion and net income attributable to Jabil Inc.

of $53.9 million .

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Malaysia, Mexico, Singapore, the United States and Vietnam.

We conduct our operations in facilities that are located worldwide, including but not limited to, China, Hungary, Malaysia, Mexico, Singapore, and the United States.

Our global manufacturing production sites allow customers to manufacture products simultaneously in the optimal locations for their products.

Our global presence is key to assessing and executing on our business opportunities.

For the fiscal year ended August 31, 2021, we had net revenues of $29.3 billion and net income attributable to Jabil Inc.

of $696 million.

We have two reporting segments:

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Our EMS segment is focused around leveraging IT, supply chain design and engineering, technologies largely centered on core electronics, utilizing our large scale manufacturing infrastructure and our ability to serve a broad range of end markets.

Our EMS segment includes customers primarily in the automotive and transportation, capital equipment, cloud, networking and storage, defense and aerospace, industrial and energy, print and retail, and smart home and appliances industries.

Our DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, technologies and healthcare.

Our DMS segment includes customers primarily in the connected devices, healthcare, mobility and packaging industries.

As of September 1, 2020, certain customers have been realigned within our operating segments.

Our EMS segment is a high volume business that produces product at a quicker rate (i.e.

cycle time) and in larger quantities and includes customers primarily in the 5G, wireless and cloud, digital print and retail, industrial and semi-cap, and networking and storage industries.

Our DMS segment is focused on providing engineering solutions, with an emphasis on material sciences, machining, tooling, and molding of highly engineered plastic and metal parts.

Our DMS includes customers primarily in the automotive and transportation, connected devices, healthcare and packaging, and mobility industries.

As of September 1, 2020, certain customers were realigned within our operating segments.

Our operating segments, which are the reporting segments, continue to consist of the DMS and EMS segments.

Beginning in fiscal year 2021, customers within the automotive and transportation and smart home and appliances industries will be presented within the DMS segment.

Customers within the automotive and transportation and smart home and appliances industries are now presented within the DMS segment.

Prior period disclosures are restated to reflect the realignment.

Additional financial information regarding our reportable operating segments is included in Item 7 of this report and Note 13 – “Concentration of Risk and Segment Data” to the Consolidated Financial Statements.

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The industry in which we operate has historically been composed of companies that provide a range of design and manufacturing services to companies that utilize electronics components in their products.

In recent years, the industry has expanded to include customers that require products and services beyond electronic components including plastics and metal components, packaging, and injection molding.

We monitor the current economic environment and its potential impact on both the customers we serve as well as our end markets and closely manage our costs and capital resources so that we can respond appropriately as circumstances change.

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Manufacturing service providers are often able to deliver accelerated production start-ups and achieve high efficiencies in bringing new products to production.

Providers are also able to more rapidly scale production for changing markets and to position themselves in global locations that serve the leading world markets.

Providers are also able to more rapidly scale production for changing markets and to position themselves in global locations that

serve the leading world markets.

With increasingly shorter product life cycles, these key services allow new products to be sold in the marketplace in an accelerated time frame.

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• Product Diversification.

We focus on balancing our portfolio of products and product families to those that align with higher return areas of our business, including manufacturing, supply chain management services, comprehensive electronics design, production and product management services.

We have made concentrated efforts to diversify our industry sectors and customer base.

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Our extensive global footprint positions us well to implement safe and practical solutions in order to select production locations which best serve the needs of our customers.

We believe that our global footprint is strengthened by our centralized procurement process, which when coupled with our single Enterprise Resource Planning system affords our customers with end-to-end supply chain visibility.

• Offer Systems Assembly, Direct-Order Fulfillment and Configure-to-Order Services.

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• Pursue Acquisition Opportunities Selectively.

Traditionally, electronics manufacturing service companies have acquired manufacturing capacity from their customers to drive growth, expand their footprint and gain new customers.

In recent years, our acquisition strategy has expanded to include opportunities to acquire competitors who are focused on our key growth areas, which include specialized manufacturing in key markets, materials technology and design operations, as well as other acquisition opportunities complementary to our services offerings.

The primary goals of

our acquisition strategy are to complement our current capabilities, diversify our business into new industry sectors and with new customers and expand the scope of the services we can offer to our customers.

The primary goals of our acquisition strategy are to complement our current capabilities, diversify our business into new industry sectors and with new customers and expand the scope of the services we can offer to our customers.

Our Approach to Manufacturing

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Our Electronic Design team provides electronic circuit design services, including application-specific integrated circuit design, firmware development and rapid prototyping services.

These services have been used by our customers for a variety of products including smart phones and accessory products, notebook and personal computers, servers, radio frequency products, video set-top boxes, optical communications products, communication and broadband products, and automotive and consumer appliance controls.

These services have been used by our customers for a variety of products including smart phones and accessory products, notebook and personal computers, connected consumer products and appliances, servers, radio frequency products, optical communications products, communication and broadband products, and automotive and healthcare components and devices.

• Industrial Design.

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• Digital printing

• Anodization

• Thermal-plastic composite formation

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In fiscal year 2021, our five largest customers accounted for approximately 47% of our net revenue and 82 customers accounted for approximately 90% of our net revenue.

The table below sets forth the respective portion of net revenue attributable to the customers that accounted for approximately 10% or more of our net revenue during the periods indicated:

The table below sets forth the respective portion of net revenue attributable to the customers that accounted for a significant concentration of our net revenue during the periods indicated:

Fiscal Year Ended August 31,

* Amount was less than 10% of total.

Our business is highly competitive.

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We believe we are extremely competitive with regard to all of these factors.

Our order backlog as of August 31, 2020 and 2019 was valued at approximately $7.4 billion and $6.2 billion , respectively.

Our order backlog is expected to be filled within the current fiscal year.

Although our backlog consists of firm purchase orders, the level of backlog at any particular time may not be necessarily indicative of future sales.

Given the nature of our relationships with our customers, and the fact that we generally do not enter into long-term purchase commitments with our customers, we frequently allow our customers to cancel or reschedule deliveries, and therefore, backlog is often not a meaningful indicator of future financial results.

Components Procurement

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Proprietary Rights

We regard certain aspects of our design, production and product management services as proprietary intellectual property.

We regard certain aspects of our technology, design, production and product management services as proprietary intellectual property.

To protect our trade secrets, manufacturing know-how and other proprietary rights, we rely largely upon a combination of intellectual property laws, non-disclosure agreements with our customers, employees, and suppliers and our internal security systems, policies and procedures.

1 unchanged sentence

We believe that our research and design activities, along with developments relating thereto, may result in growth of our patent portfolio and its importance to us, particularly as we expand our business activities.

Other factors significant to our proprietary rights include the knowledge and experience of our management and personnel and our ability to develop, enhance and market manufacturing services.

We license some technology and intellectual property rights from third parties that we use in providing some of our design, production and product management services to our customers.

Other factors significant to our proprietary rights include the knowledge and experience of our management and workforce and our ability to develop, enhance and market our technology and services.

We license some technology and intellectual property rights from third parties.

Generally, the license agreements that govern such third-party technology and intellectual property rights grant us the right to use the subject technology anywhere in the world and terminate upon a material breach by us.

As of August 31, 2020 , we employed approximately 240,000 people worldwide.

Human Capital Management

As of August 31, 2021, our workforce includes diverse, talented and dedicated employees across approximately 100 locations in more than 30 countries, and simply stated, they are what differentiate us from our competitors.

To maintain our edge, we continually invest in our employees, so that they can make anything possible and everything better for our customers, shareholders, and communities.

Following is a summary of employees by location (in thousands):

Number of Employees

(1) Total headcount includes permanent, temporary and contingent workers.

None of our U.S.

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We have never experienced a significant work stoppage or strike and promote a culture of positive employee relations.

“Safety First” is a fundamental value that is ingrained in our culture.

We are committed to safety standards in all of our facilities, ensuring our employees are protected and can return home safely after each work shift.

By implementing a continuous improvement-based Health and Safety Management System including annual training assessments coupled with engaged leaders and employees who prioritize safety above all else, we have established a path to safety excellence.

COVID-19 Response

As a global employer, we have a responsibility to our employees, customers, suppliers and the communities in which we operate to take decisive action to protect against COVID-19 in our facilities.

From the outset of the COVID-19 pandemic, we established prevention protocols, which have allowed our sites to operate safely with minimal disruption.

Measures we have taken include:

• Employees and visitors are required to undergo temperature checks and complete health screening questionnaires before entering a Jabil facility

• Employees and visitors are provided with masks and required to wear them while on site

• Hand sanitizing stations are located throughout all of our facilities

• Social distancing guidelines have been established

• Quarantine and contact tracing protocols have been established for suspected and/or confirmed cases and a robust follow-up process has been implemented to ensure the well-being of our employees

• Business travel has been restricted

• Eligible employees work remotely

• Employees have been provided with masks, hand sanitizer, and educational resources to take home to their families

In addition to these extensive internal measures, we also retooled and ramped-up numerous production facilities to make masks, hand sanitizer, face shields, ventilators and diagnostic products in order to fulfill the urgent needs of our customers.

We promote respect for fundamental human rights as an essential element of responsible corporate citizenship.

We are a founding member of the Responsible Business Alliance (RBA), which is one of the world’s largest industry coalitions for corporate social responsibility in global supply chains.

The RBA sets (1) standards regarding excessive working hours and unfair wages, (2) controls to prohibit child labor and human trafficking, and (3) avenues for employees to raise and address workplace health and safety concerns.

We have aligned our work programs, processes and procedures to the RBA Code of Conduct so as to ensure working conditions are safe, employees are treated with respect and dignity, and manufacturing process and practices are environmentally responsible.

Diversity, Equity and Inclusion

At Jabil, our workforce is diverse at its core, and our employees thrive in an entrepreneurial culture where they can do their best work.

Diverse backgrounds, experiences and opinions are welcome here.

We work together in a way that enables our employees to be their true self, challenges them and encourages them, while allowing them to make a difference at work and in the world.

We act in accordance with our Code of Conduct to create an environment free from discrimination or harassment globally and respect the human rights of our employees.

Moreover, we strive to achieve an inclusive and equitable workplace where opportunities for success are created and available for all employees.

In order to achieve this, we have trained leaders on unconscious bias to support their capability as inclusive leaders.

In partnership with the University of South Florida's Muma College of Business and the Tampa Bay Lightning, we developed an online certificate program about workplace diversity, equity, and inclusion.

Over 135,000 registrants from fifteen different countries, including the US, which led all nations with the most online registrants, signed-up for this seven-week course.

The program was offered at no cost and consisted of seven two-hour modules.

Over 62,000 registrants completed the program and received a digital certificate and badge to display on social media.

In 2020, we launched a Diversity, Equity & Inclusion (DEI) Council comprised of eight global, cross-functional team members who represent the voice of our employees.

Under the direction of our CEO and diversity leader, this council has unprecedented access to share directly with our executive leadership team their perspectives, ideas and solutions on diversity,

equity and inclusivity opportunities at Jabil while acting and advocating for progress within spheres of internal and external influence.

Career Growth and Development

At Jabil, we have historically invested in the professional and personal growth and development of our employees at all levels of the organization to ensure continuous learning and skills enrichment.

In addition, we undertake talent reviews to assess bench strength and succession planning.

During these reviews, we also spotlight high potential talent, retention rates and the diversity composition of our leaders.

In FY21, there were over 35,000 internal promotions at various levels in Jabil, a true testament to our ability to grow and develop our own talent.

Compensation and Benefits

Jabil’s compensation programs are designed to align the compensation of our employees with Jabil’s performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior results.

Specifically:

• We provide employee pay levels that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location.

• Salary increases and incentive compensation are based on merit and performance.

employees are eligible for health insurance, paid and unpaid leaves, a retirement plan, and life and disability/accident coverage.

Benefits outside the U.S.

are provided based upon country-specific practices and are intended to support the health and well-being of our employees and their families.

• Supporting the mental health and emotional well-being of our employees and their families is a high priority at Jabil, and we have implemented several programs and benefits over the past several years to help de-stigmatize mental health issues and assist employees in finding and leveraging appropriate resources.

These include a global employee assistance program (EAP), on-site behavioral health resources in some locations and education for our leaders regarding how to recognize and respond to signs of mental health and substance abuse issues.

• Almost all of our employees around the world are eligible to participate in our Employee Stock Purchase plan, allowing them to become owners of Jabil stock at a discount.

Employee Engagement

In May 2021, we conducted a Voice of the Employee Survey, utilizing a third party to administer it.

Approximately 90% of our employees responded to the survey, demonstrating the high level of engagement of our employees.

In addition, scores across a number of factors were consistently high and exceeded industry benchmark.

Action plans have been developed and are in the process of being executed at all sites.

Environmental

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Executive officers are appointed by the Board of Directors and serve at the discretion of the Board.

Except as otherwise noted below, each executive officer is a full-time employee of Jabil.

There are no family relationships among our executive officers and directors.

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He holds a Bachelor’s Degree in Business Administration and Management from Fitchburg State University.

Cadavid (age 64 ) was named Senior Vice President, Treasurer in September 2013.

Cadavid joined Jabil in 2006 as Treasurer.

Prior to joining Jabil, Mr.

Cadavid was Corporate Assistant Treasurer for Owens-Illinois, Inc.

in Toledo, Ohio.

He has also held various positions with The Quaker Oats Company, Arthur Andersen & Co.

Family Enterprises, Inc.

He holds an M.B.A.

from the University of Florida and a B.B.A.

from Florida International University.

Michael Dastoor (age 56) was named Executive Vice President, Chief Financial Officer effective September 2018.

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Engineered Solutions Group since January 2016;

and also had responsibility for Jabil’s Enterprise Supply Chain, Procurement and

certain strategic investments.

and also had responsibility for Jabil’s Enterprise Supply Chain, Procurement and certain strategic investments.

Prior to that, Mr.

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Mark Mondello (age 57) has served as Chief Executive Officer and a member of the Board of Directors since March 2013.

In addition, Mr.

Mondello has been appointed Chairman of the Board effective November 1, 2021.

Prior to that, Mr.

Mondello served as Chief Operating Officer from 2002 to 2013.

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in Mechanical Engineering from the University of South Florida.

Daryn Smith (age 50 ) was named Senior Vice President, Enterprise & Commercial Controller effective September 2018.

Daryn Smith (age 51) was named Senior Vice President, Enterprise & Commercial Controller in June 2018 and assumed leadership of Corporate Development and M&A in September 2020.

Smith served as Chief Financial Officer of EMS from June 2013 through June 2018.

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Smith was with the Assurance and Advisory Services practice for Arthur Andersen.

He holds a Bachelor’s degree in Accounting from the University of South Florida and an MBA from the University of Florida.

He holds a Bachelor’s degree in Accounting from the University of South Florida and a MBA from the University of Florida.

Wilson (age 56) was named Executive Vice President and CEO of Jabil Green Point in 2017 and assumed responsibility for Consumer Packaging and Corporate Procurement in September 2020.

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The “Investors” section of our website contains a significant amount of information about our Company, including financial and other information for investors.

The information that we post on the “Investors” section of our website could be deemed to be material information.

The information that we post on the “Investors” section of our website could be deemed to be

material information.

We encourage investors, the media and others interested in Jabil to visit our website.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business