Earning Release Conference Fiscal Year March, 2011 TDK Corporation April. 27, 2011 1 ◆Consolidated Full Year Results of FY March, 2011 Consolidated Full Year Projections of FY March, 2012 President and CEO Takehiro Kamigama ◆Consolidated Full Year Results of FY March, 2011 Consolidated 4Q Results of FY March, 2011 Takakazu Momozuka General Manager, Finance & Accounting Department ◆Passive Components Business Shinichi Araya/Director, Senior Vice President ◆Recording Device Business Atsuo Kobayashi/General Manager, Senior Vice President 2 Consolidated Full Year Results of FY March, 2011 Consolidated Full Year Projections of FY March, 2012 President and CEO, TDK Corporation Takehiro Kamigama 3 Consolidated Full Year Results of FY March, 2011 (JPY billion） Net Sales FY March 2010 Full Year Results FY March 2011 Full Year Results Change JPY billion % 808.9 875.7 66.9 8.3 25.8 63.8 38.0 147.7 3.2% 7.3% +4.1pt - Income before Income Taxes 21.9 60.1 38.2 174.2 Net Income 13.5 45.3 31.7 234.8 104.82 350.90 246.08 - Operating Income Operating Income Margin Earning Per Share (JPY) Ex-rate US$ Yen 92.89 Yen 85.73 EURO Yen 131.18 Yen 113.12 Appreciation by 7.7% Appreication by 13.8% Ex-rate impact to Net sales & Operating Income Net sales：Lowered 57.4 billion Yen Operating income：Lowered 18.0 billion Yen Earthquake impact to Net sales & Operating Income Net sales：Lowered 1.1billion Yen Operating income：Lowered 1.8 billion Yen 4 Features in full year results of FY March, 2011 ◆Impact of the Great East Japan Earthquake ・Net sales declined about 1.1 billion yen Operating income declined about 1.8 billion yen ・Production cutbacks in the automobile market materialized immediately after the earthquake ・TDK is monitoring trends in other finished product markets ・Current status and responses going forward （Please refer to Page 10） ◆Activity in the electronics product market varied by finished product ・Output of smartphones and tablet devices surged ・Output in the automobile and industrial equipment markets is stable ・Production cutbacks continued for flat-screen TVs, notebook PCs and HDDs. 5 Features in full year results of FY March, 2011 ◆Sales of passive components increased 18.2% year on year ・Sales of inductive devices rose for a wide range of finished products. ・Sales of high-frequency components increased substantially for smartphones. ・Sales of aluminum electrolytic capacitors and film capacitors increased for industrial equipment applications ・Sales of ceramic capacitors increased for the automobile market. ◆Sales of magnetic application products decreased 4.0% year on year ・Recording devices sales declined, affected by production cutbacks in the HDD market and the yen’s appreciation. ・Sales of power supplies increased for industrial equipment applications ◆Other businesses increased 26.2% year on year ・Sales of rechargeable batteries increased for mainly tablet devices 6 Features in full year results of FY March, 2011 TDK Group / Sales transition by applications JPY billion Communications 146.4 160 140 120 100 95.9 65.7 80 60 40 20 0 Up15% Up46% 2010/3 227.2 250 150 179.1 50 0 0 2011/3 2010/3 140.4 100 20 2009/3 2009/3 110.6 40 Up15% 60 Other JPY billion 200 Up27% 80 500 120 100 114.9 100 JPY billion Car Electronics JPY billion 2011/3 Up27% Up28% 2009/3 2010/3 2011/3 IT Home Electronics 421.3 418.9 391.5 400 300 Down1% 200 Down7% 100 Sales in the three priority areas increased substantially 1. 2. 3. 0 2009/3 2010/3 Communications Car Electronics Other (including renewable energy, industrial equipment etc 2011/3 Consolidation of EPCOS from the second half of the year ended March 2009 7 Features in full year results of FY March, 2011 Change in sales composition by applications 727.4 billion yen 875.7 billion yen 140.4 19% 65.7 9% 100 14% 227.2 26% 421.3 58% IT Home Electronics Communications Car Electronics Others FY March 2009 110.6 13% 391.5 44% 146.4 17% FY March 2011 ・Sales composition by applications has been changing according to sales increase ・Composition ratio of three areas excluding IT Home Electronics increased from 42% in FY March 2009 to 56% in FY March 2011 Consolidation of EPCOS from the second half of the year ended March 2009 8 Full year projections and dividend projections of FY March, 2012 TDK has not issued consolidated operating projections and dividend projections for fiscal 2012 having decided it cannot do so reasonably at this time due to uncertainty surrounding the production levels of finished products, which affect its consolidated results, due to the Great East Japan Earthquake TDK will announce its projections as soon as possible （Yen） Interim dividend Year-end dividend Annual dividend FY March 2010 Results FY March 2011 Results 30 30 60 40 40（Forecast） 80（Forecast） 9 Measures in response to the Great East Japan Earthquake going forward 【Current Status】 ◆The 25 affected business sites have all resumed production and operation ◆Anxiety in supply chain has been already terminated excluding a part of materials 【Measures in response to the eqrthquake going forward】 ◆Ensure manufacturing stability ¾Strengthen plant and facility damage prevention, and the structure for early restoration of operations ¾Address an anticipated power shortage in the summer 9Execute production system changes and other measures to conserve electricity 9Provide backup with on-site power generation ◆Re-examine procurement strategies ◆Rebuild risk management frameworks Fulfill supply obligations as a components maker 10 Future Strategy 【Focused area and products】 Communications area ¾Small size ceramic capacitor ¾High Frequency Inductor ¾Module products with IC embedded substrate Car Electronics area ¾DC-DC converter ¾Power capacitor (Film capacitor) ¾Sensor IT Home Electronics area Module products with IC embedded substrate ¾HDD Head 92.5”500GB/P and 3.5”１TB/P ¾Secondary Energy ¾Optical application parts 9Optical transmitter and receiver Module for PC（Light Peak）etc Renewable Energy・Environment ¾To strength sales activity to domestic market （Metal magnet・Varied capacitors・Transformer etc） 11 Consolidated Full Year Results of FY March, 2011 Consolidated 4Q Results of FY March, 2011 Takakazu Momozuka General Manager, Finance & Accounting Department 12 Consolidated Full Year Results of FY March, 2011 FY March 2010 Full Year Results Yen billion ％ FY March 2011 Full Year Results Yen billion ％ Change Yen billion % Net Sales Capacitors 133.1 16.5 145.4 16.6 12.3 9.2 Inductive devices 112.0 13.8 135.8 15.5 23.8 21.3 Other 119.7 14.8 150.0 17.1 30.2 25.2 364.8 45.1 431.1 49.2 66.3 18.2 Recording devices 280.0 34.6 257.5 29.4 -22.5 -8.0 Other 103.7 12.8 111.0 12.7 7.2 7.0 383.7 47.4 368.5 42.1 -15.3 -4.0 Other 60.3 7.5 76.1 8.7 15.8 26.2 Total 808.9 100.0 875.7 100.0 66.9 8.3 -10.3 -2.8 24.7 5.7 35.0 - 46.7 12.2 46.9 12.7 0.2 0.4 5.2 8.6 5.5 7.2 0.3 5.8 2.6 - 38.0 147.7 Passive Components Magnetic Application Products Operating Income Passive Components Magnetic Application Products Other Corporate and eliminations Total -13.3 -15.9 25.8 3.2 63.8 7.3 13 Breakdown of Operating Income Changes Operating Income : + 38.0 billion yen Rationalization, Cost reduction・ Purchased materials savings +22.2 billion yen SG&A expenses decrease （including decrease in restructuring cost by 8.3 billion yen) +2.2 billion yen Changes in sales and Products mix +73.1billion yen Sales price reduction （-4.2%) -39.7 billion yen Impact by big earthquake -1.8 billion yen 63.8 billion yen Exchange fluctuation （US$=Yen 85.73) -18.0 billion yen 25.8 billion yen FY March 2010 FY March 2011 14 Financial Position （JPY billion） March End, 2010 March End, 2011 Change 1,091.5 1,060.9 -30.6 Total Liability 541.8 521.1 -20.7 Interest-bearing Debt 270.1 245.0 -25.1 Stockholders's Equity 543.8 534.3 -9.5 (comprehensive income) -172.1 -218.0 -45.9 Stockholders's Equity ratio 49.8% 50.4% 0.6pt Total Asset 15 Quarterly Results (4Q of FY2010 vs. 4Q of FY 2011) (JPY billion） Net Sales FY March 2010 4Q Results Income before Income Taxes % 2.2 1.0 8.3 9.4 1.1 13.3 3.9% 4.4% +0.5pt 11.0 8.9 -2.1 -19.1 3.5 6.6 3.1 88.6 US$ Yen 90.69 Yen 82.31 EURO Yen 125.49 Yen 112.66 Ex-rate impact to Net sales & Operating Income JPY billion 213.6 Net Income Ex-rate Change 211.3 Operating Income Operating Income Margin FY March 2011 4Q Results - Appreciation by 9.2% Appreication by 10.2% Net sales：Lowered 18.8 billion Yen Operating income：Lowered 5.3 billion Yen 16 Quarterly Results of FY March 2011 (3Q vs. 4Q) 3Q results of FY 2011 4Q results of FY 2011 （2010.10.1～2010.12.31） （2011.1.1～2011.3.31） Yen billion ％ Yen billion ％ Q on Q change Yen billion % 108.4 49.3 108.1 50.6 -0.3 -0.3 Magnetic Applicatons Products 90.8 41.3 85.2 39.9 -5.6 -6.2 Other 20.7 9.4 20.3 9.5 -0.4 -1.9 219.9 100.0 213.6 100.0 -6.3 -2.9 6.3 5.8 5.0 4.6 -1.3 -20.6 11.5 12.7 6.8 8.0 -4.7 -40.9 2.0 9.4 0.8 3.9 -1.2 -60.0 -0.7 - -7.7 -45.3 Passive Components Net sales Total Operating Income Passive Components Magnetic Application Products Other Corporate and eliminations Total -3.2 -2.5 17.2 7.8 9.4 4.4 17 Passive Components Business Shinichi Araya Director, Senior Vice President 18 Passive components business Net Sales of passive components business 431.1 billion yen 364.8 billion yen 150.0 119.7 135.8 112.0 133.1 145.4 2010/3 2011/3 Billion yen ◆Passive Components Segment Net sales：431.1 billion yen, increased by 18.2% year on year Operating income：24.7 billion yen (operating loss of 10.3 billion in previous fiscal year） ＜Breakdown of passive components segment＞ ◆Capacitors business Net sales：145.4 billion yen, increased by 9.2％ year on year Sales of ceramic capacitors increased for communication equipment and automobile market increased Sales of aluminum electrolytic capacitors and film capacitors for industrial equipment applications increased significantly Other Inductive devices Capacitors Segment profits 24.7 Billion yen 2010/3 10.3 2011/3 ◆Inductive devices business Net sales：135.8 billion yen, increased by 21.3％ year on year Sales for use in communications equipment centered on smartphones increased significantly. Sales for automobiles and industrial equipment market also increased ◆Other passive components business Net sales：150.0 billion yen, increased by 25.2％ year on year Sales of high-frequency components for the communications equipment market centered on smartphones increased. Sales of piezoelectric materials and products, circuit protection components increased for industrial equipment markets 19 Passive components business / Sales transition by applications JPY billion 108.1 120 100 62.7 Up42% 60 100 77.6 60 88.7 49.8 100 JPY billion 100 2010/3 2011/3 85.2 Up22% Up52% 50 0 0 2009/3 129.9 Up56% 20 0 158.5 Up14% Up21% 20 200 150 40 40 JPY billion JPY billion 80 76.1 80 Other Car Electronics Communications 2009/3 2010/3 2011/3 2009/3 2010/3 2011/3 IT Home Electronics 88.7 81.2 80 60 75.8 Down7% 40 Sales in the three priority areas increased substantially Down8% 20 1. 2. 3. Communications Car Electronics Other (including renewable energy, industrial equipment etc 0 2009/3 2010/3 2011/3 Consolidation of EPCOS from the second half of the year ended March 2009 20 Passive components business / Sales transition by applications Change in sales composition by applications 286.4 billion yen 85.2 30% 88.7 31% 431.1 billion yen IT Home Electronics Communications 75.8 18% 158.5 36% 108.1 25% Car Electronics 49.8 17% 62.7 22% Others FY March 2009 88.7 21% FY March 2011 ・Sales composition by applications has been changing according to sales increase ・Composition ratio of three areas excluding IT Home Electronics increased from 69% in FY March 2009 to 82% in FY March 2011 Consolidation of EPCOS from the second half of the year ended March 2009 21 Recording Device Business Atsuo Kobayashi General Manager, Senior Vice President 22 Recording device business Net sales of recording device segment ◆Recoding device Segment Net sales：257.5 billion yen, decreased by 8% year on year Sale of HDD head decreased due to the JPY appreciation against the U.S. dollar and price reduction 280.0 257.5 Shipment Index JPY billion FY2010 FY2011 1Q 100 FY March'10 2Q 3Q 119 129 4Q 128 1Q 122 FY March'11 2Q 3Q 122 125 4Q 116 ＜Business Plan for FY March 2012 ＞ ・To start mass production of 2.5 inch 500GB/P ・To start mass production of 3.5 inch 1TB/P ・Raise added valued with DSA (dual stage actuator)-mounted HDD headsin suspension business ・Firmly establish the technology for commencing mass production of heat-assisted HDD heads next fiscal year 23 Supplementary Data 24 Expenses / Foreign exchange sensitivity (JPY billion） FY2010 Full Year Results FY2011 Full Year Results Change Yen billion % Capital expenditures 64.4 78.6 14.2 22.0 Depreciation and amortization 83.8 77.6 -6.2 -7.4 Research and development 53.9 53.0 -0.9 -1.7 US$ Ex-rate EURO Sensitivit by 1Yen appreciation 92.89 131.18 85.73 113.12 Appreciation by 7.7% Appreciation by 13.8% US$/Yen :Net Sales about 5.5 billion yen, Operating Income about 2.0 billion yen EURO/Yen :Net Sales about 1.5 billion yen, Operating Income less than 100 million yen 25 Business overview in Passive components（3Q vs 4Q) Sector Net sales in 3Q Net sales in 4Q Change % Capacitors 35.2 billion yen 34.5 billion yen -2.0% Inductive devices 33.9 billion yen 35.0 billion yen +3.2% Other 39.3 billion yen 38.6 billion yen -1.8% Sales status Ceramic capacitors Slightly increased sales for automobiles Decreased sales for PCs, AV equipment and communication device Aluminum & Film capacitors Steady sales for industrial equipment applications and renewable energy equipment Lower sales for AV equipment and PCs Increased sales of noise filters for automobiles, industrial and renewable energy equipment Slightly increased sales for automobiles, smart phones and tablet devices High-frequency components Lower sales of high-frequency components for mobile devices Piezoelectric materials products, circuit protection components Higher sales for automobiles 26 Quarterly Results (4Q vs. 4Q) (3Q vs. 4Q) JPY billion 4Q of FY 2010 Jan 1- Mar 31, 2010 （Ａ） 3Q of FY 2011 Oct 1- Dec 31, 2010 （B） 4Q of FY 2011 Jan 1- Mar 31, 2011 （C） YoY Change （Ｃ）－（Ａ） Yen billion QoQ Change （Ｃ）－（Ｂ） % JPY billion % 211.3 219.9 213.6 2.3 1.1 -6.3 -2.9 Passive Components 96.5 108.4 108.1 11.6 12.0 -0.3 -0.3 Magnetic Application Products 98.6 90.8 85.2 -13.4 -13.6 -5.6 -6.2 Other 16.3 20.7 20.3 4.0 24.5 -0.4 -1.9 8.3 17.2 9.4 1.1 13.3 -7.8 -45.3 Passive Components -1.5 6.3 5.0 6.5 - -1.3 -20.6 Magnetic Application Products 15.0 11.5 6.8 -8.2 -54.7 -4.7 -40.9 Other 2.1 2.0 0.8 -1.3 -61.9 -1.2 -60.0 Corporate and eliminations -7.3 -2.5 -3.2 4.1 - -0.7 - Operating Income Margin 3.9% 7.8% 4.4% +0.5pt - -3.4pt - 11.1 16.6 8.9 -2.2 -19.8 -7.7 -46.4 3.6 12.6 6.6 3.0 83.3 -6.0 -47.6 Net Sales Breakdown Operating Income Breakdown Income Before Income Taxes Net Income Ex-rate US$ Yen 90.69 Yen 82.65 Yen 82.31 EURO Yen 125.49 Yen 112.20 Yen 112.66 27 Quarterly Sales and Operating Income by Segment （JPY billion） Net Sales １Q 181.5 FY March 2010 ２Q ３Q ４Q 204.3 211.7 211.3 Total 808.8 １Q 221.9 FY March 2011 ２Q ３Q ４Q 220.3 219.9 213.6 Total 875.7 Breakdown Breakdown Passive Components Magnetic Applications Others 80.2 86.9 14.4 93.8 96.3 14.3 94.3 102.0 15.4 96.5 98.6 16.3 364.8 383.7 60.3 105.1 100.3 16.6 109.5 92.2 18.6 108.4 90.8 20.7 108.1 85.2 20.3 431.1 368.5 76.1 Operating Income -3.6 9.0 12.1 8.3 25.8 20.2 17.0 17.2 9.4 63.8 Passive Components Magnetic Applications Others Sub-total -9.2 5.9 0.8 -2.4 -1.2 97.36 132.66 0.2 11.3 1.2 12.7 -3.7 93.73 133.75 0.3 14.6 1.1 15.9 -3.8 89.73 132.66 -1.5 15.0 2.1 15.6 -7.3 90.69 125.49 -10.3 46.7 5.2 41.6 -15.9 92.89 131.18 6.2 16.1 1.1 23.3 -3.1 92.01 117.03 7.3 12.5 1.7 21.5 -4.5 85.88 110.67 6.3 11.5 2.0 19.7 -2.5 82.65 112.20 5.0 6.8 0.8 12.6 -3.2 82.31 112.66 24.7 46.9 5.5 77.1 -13.3 85.73 113.12 Corporate and Eliminations Ex-rate ￥/USD ￥/EURO JPY billion 250.0 200.0 14.3 15.4 16.3 14.4 150.0 16.6 18.6 20.7 20.3 100.3 92.2 90.8 85.2 96.3 102.0 98.6 80.2 93.8 94.3 96.5 105.1 109.5 108.4 108.1 １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q 86.9 100.0 50.0 Others Magnetic Applications Products Passive Components 0.0 28 Quarterly Sales by Segment （JPY billion） １Q FY March 2010 ２Q ３Q ４Q Total １Q FY March 2011 ２Q ３Q ４Q Total Breakdown Net Sales 181.5 204.3 211.7 211.3 808.8 221.9 220.3 219.9 213.6 875.7 Passive Components 80.2 93.8 94.3 96.5 364.8 105.1 109.5 108.4 108.1 431.1 Capacitors 28.8 33.6 34.6 36.1 133.1 38 37.7 35.2 34.5 145.4 Inductive Devices 24.8 28.9 28.9 29.3 112.0 32.5 34.3 33.9 35.0 135.8 Other Passive Components 26.7 31.3 30.7 31.1 119.7 34.6 37.5 39.3 38.6 150.0 86.9 96.3 102 98.6 383.7 100.3 92.2 90.8 85.2 368.5 Recording Devices 62.9 71 73.8 72.3 280.0 71.7 65.3 63 57.5 257.5 Other Magnetic Applications Products 24.1 25.2 28.2 26.3 103.7 28.6 26.9 27.7 27.7 111.0 14.4 14.3 15.4 16.3 60.3 16.6 18.6 20.7 20.3 76.1 97.36 93.73 89.73 90.69 92.89 92.01 85.88 82.65 82.31 85.73 132.66 133.75 132.66 125.49 131.18 117.03 110.67 112.20 112.66 113.12 16.6 18.6 20.7 28.6 26.9 20.3 27.7 27.7 71.7 65.3 63.0 57.5 Magnetic Applications Products Breakdow Other Sales Ex-rate ￥/USD ￥/EURO JPY billion 250 14.3 25.2 15.4 16.3 28.2 26.3 71.0 73.8 72.3 31.3 30.7 31.1 34.6 37.5 39.3 38.6 24.8 28.9 28.9 29.3 32.5 34.3 33.9 35.0 28.8 33.6 34.6 36.1 38 37.7 35.2 34.5 １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q 200 150 100 14.4 24.1 62.9 26.7 50 0 Others Other Magnetic Application Products Recording Devices Oher Passive Components Inductive Devices Capacitors 29 30 31 Cautionary Statements with Respect to Forward-Looking Statements This material contains forward-looking statements, including projections, plans, policies, management strategies, targets, schedules, understandings and evaluations, about TDK or its group companies (TDK Group). These forward-looking statements are based on the current forecasts, estimates, assumptions, plans, beliefs and evaluations of TDK Group in light of information currently available to it, and contain known and unknown risks, uncertainties and other factors. TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties and other factors, TDK Group’s actual results, performance, achievements or financial position could be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements, and TDK Group undertakes no obligation to publicly update or revise any forward-looking statements after the issue of this material except as provided for in laws and ordinances. The electronics markets in which TDK Group operates are highly susceptible to rapid changes. Risks, uncertainties and other factors that can have significant effects on TDK Group include, but are not limited to, shifts in technology, fluctuations in demand, prices, interest and foreign exchange rates, and changes in economic environments, conditions of competition, laws and regulations. 32