Presentation slides for the earnings release conference Fiscal Year March 2010 (April 1, 2009 – March 31, 2010) April 30, 2010 TDK Corporation FY March 2010 (April 30, 2010) 1 Contents Pages 4. Consolidated Results FY March 2010 and Projections for FY March 2011 Mr. Takehiro Kamigama President & CEO 10. Consolidated Results Mr. Takakazu Momozuka General Manager Finance & Accounting Department 19. Ceramic Capacitors Business Mr. Shinichi Araya Director , Senior Vice President , General Manager Ceramic Capacitors B.G. 22. HDD Head Business Mr. Atsuo Kobayashi Corporate Officer , General Manager Data Storage & Thin Film Technology Components B.G. 24. Supplementary data FY March 2010 (April 30, 2010) 2 Cautionary Statements with Respect to Forward-Looking Statements This Thismaterial materialcontains containsforward-looking forward-lookingstatements, statements,including includingprojections, projections,plans, plans,policies, policies, management managementstrategies, strategies,targets, targets,schedules, schedules,understandings understandingsand andevaluations, evaluations,about aboutTDK TDKororitsits group groupcompanies companies(TDK (TDKGroup). Group). These Theseforward-looking forward-lookingstatements statementsare arebased basedon onthe thecurrent current forecasts, forecasts,estimates, estimates,assumptions, assumptions,plans, plans,beliefs beliefsand andevaluations evaluationsofofTDK TDKGroup Groupininlight lightofof information informationcurrently currentlyavailable availabletotoit,it,and andcontain containknown knownand andunknown unknownrisks, risks,uncertainties uncertaintiesand and other otherfactors. factors.TDK TDKGroup Grouptherefore thereforewishes wishestotocaution cautionreaders readersthat, that,being beingsubject subjecttotorisks, risks, uncertainties uncertaintiesand andother otherfactors, factors,TDK TDKGroup’s Group’sactual actualresults, results,performance, performance,achievements achievementsoror financial financialposition positioncould couldbe bematerially materiallydifferent differentfrom fromany anyfuture futureresults, results,performance, performance, achievements achievementsororfinancial financialposition positionexpressed expressedororimplied impliedby bythese theseforward-looking forward-lookingstatements, statements, and TDK Group undertakes no obligation to publicly update or revise any forward-looking and TDK Group undertakes no obligation to publicly update or revise any forward-looking statements statementsafter afterthe theissue issueofofthis thismaterial materialexcept exceptas asprovided providedfor forininlaws lawsand andordinances. ordinances. The Theelectronics electronicsmarkets marketsininwhich whichTDK TDKGroup Groupoperates operatesare arehighly highlysusceptible susceptibletotorapid rapidchanges. changes. Risks, Risks,uncertainties uncertaintiesand andother otherfactors factorsthat thatcan canhave havesignificant significanteffects effectson onTDK TDKGroup Groupinclude, include, but butare arenot notlimited limitedto, to,shifts shiftsinintechnology, technology,fluctuations fluctuationsinindemand, demand,prices, prices,interest interestand andforeign foreign exchange rates, and changes in economic environments, conditions of competition, laws exchange rates, and changes in economic environments, conditions of competition, lawsand and regulations. regulations. FY March 2010 (April 30, 2010) 3 Consolidated Results FY March 2010 and Projections for FY March 2011 April 30, 2010 Mr. Takehiro Kamigama President & CEO FY March 2010 (April 30, 2010) 4 Consolidated results for FY2010 Term Item Net sales Operating income (loss) Income (loss) before income taxes Net income (loss) attributable to TDK Corp. Per common share : Net income (loss) attributable to TDK Corp. / Basic FY2009 FY2010 (April 1, 2008 - Mar. 31, 2009) (Yen millions) % (April 1, 2009 - March 31, 2010) (Yen millions) 100.0 -7.5 808,858 25,774 (81,630) -11.2 21,907 2.7 235,559 103,537 - (63,160) -8.7 13,520 1.7 145,376 76,680 - Yen 104.82 (Unit:Yen billions) FY March 2009 Reform charges 38.0 Forex Impact : FY '09 100.7 144.1 Net sales Operating income FY March 2010 (April 30, 2010) % (U.S.$ thousands) (Yen millions) Change(%) 81,458 100.0 8,697,398 11.2 80,079 277,140 3.2 727,400 (54,305) Yen (489.71) Average rate for the period US$ = Yen Euro = Yen Change FY '10 92.9 131.2 U.S.$ 1.13 FY March 2010 13.0 Change Appreciation by 7.8% Appreciation by 8.9% Negative Yen 45.2 billion (approx.) Negative Yen 13.9 billion (approx.) 5 Features in FY2010 results ◆ Electronic Market ¾ Production volumes of finished products bottomed at the end of fiscal 2009, trend upward through the end of fiscal 2010. ¾ Polarization between low-priced products and high-end products due to the popularity of low-priced models, which have been supported quick recovery in emerging nations. ¾ In monetary terms, the electronics market hasn’t recovered as much as production volumes. ◆ TDK Group ¾ Passive components and HDD head production trend upward ¾ Improvement in profitability by restructuring FY March 2010 (April 30, 2010) 6 Projection for FY2011 April 30, 2010 (Unit:Yen billions) Net sales FY March 2010 FY March 2011 [Results] [Projections] Change Change (%) 808.9 880.0 71.1 8.8% Operating income 25.8 62.0 36.2 140.6% Income before income taxes 21.9 60.0 38.1 173.9% Net income 13.5 45.0 31.5 232.8% 93 87 Exchange rate (U.S.$=Yen) * An average yen-U.S. dollar exchange rate of ¥87 and an average yen-euro exchange rate of ¥130 are assumed in the Fiscal Year 2011. FY March 2010 (April 30, 2010) 7 Focusing area and products Broad band area ¾ Further expansion in Smartphone Market 9 Sales expansion in High Frequency products => EPCOS synergy contribution Automotive area ¾ HEV/EV market expansion 9 DC-DC Convertor 9 Transformer 9 Film Capacitor FY March 2010 (April 30, 2010) 8 Focusing area and products IT home electronic appliances ¾ Further expansion in Flat TV & PC Market 9 HDD Head 9 Positive effects to passive components Other market ¾ Industrial equipments market recovery 9 Switching power supply 9 Aluminum electrolytic Capacitor 9 Film Capacitor FY March 2010 (April 30, 2010) 9 Consolidated Results (April 1, 2009 – March 31, 2010) April 30, 2010 Mr. Takakazu Momozuka Finance & Accounting Department General Manager FY March 2010 (April 30, 2010) 10 Consolidated sales results (Supplementary data) FY2010 (Unit : Yen millions, %) Net sales Operating income Income before income taxes Net income TDK (excl. EPCOS) EPCOS Goodwill EPCOS Yen millions 639,890 31,690 % 100.0% 5.0% Yen millions 168,968 -1,480 % 100.0% -0.9% 28,616 4.5% -1,888 -1.1% -4,821 21,424 3.3% -5,121 -3.0% -2,783 FY2010 (Unit : Yen millions, %) Net sales Operating income Income before income taxes Net income Yen millions -4,436 TDK group Yen millions 808,858 25,774 % 100.0% 3.2% 21,907 2.7% 13,520 1.7% 11 Consolidated sales results by Quarter EPCOS results Consolidated results ( Before the deduction of goodwill depreciation) (Excluding EPCOS) Net Sales and OP ratio 300 10% 250 0% 200 -10% 150 -20% 100 -30% 50 -40% 0 -50% 4Q 1Q 2Q 3Q 4Q Net Sales 107.0 144.6 161.1 168.7 165.5 Operating Income (52.7) 0.1 10.1 13.0 8.4 -49.2% 0.1% 6.3% 7.7% 5.1% OP ratio FY Mar. 2009 FY Mar. 2010 Net Sales (Yen in billions) Net Sales (Yen in billions) Net Sales and OP ratio 60 10% 50 0% 40 -10% 30 -20% 20 -30% 10 -40% 0 Net Sales Operating Income OP ratio 4Q 1Q 2Q 3Q 4Q 32.1 37.0 43.2 42.9 45.9 (5.7) (3.7) 0.1 1.0 1.2 -17.7% -10.1% 0.3% 2.3% 2.6% FY Mar. 2009 FY March 2010 (April 30, 2010) FY Mar. 2010 12 -50% Sales by product (Year on Year) (excl. EPCOS) (Unit : Yen billions) Electronic Materials Electronic Devices Recording Devices Others Total sales 4Q of FY '09 20.9 29.0 38.8 18.2 107.0 4Q of FY '10 34.5 38.2 72.1 20.7 165.5 Change 13.6 9.2 33.2 2.5 58.5 Change(%) 65.1 31.6 85.7 13.5 54.7 Operating Income (52.7) 8.4 61.1 - (EPCOS) (Unit : Yen billions) Sales Operating Income * EPCOS Goodwill 4Q of FY '09 32.1 (5.7) (5.2) 4Q of FY '10 45.9 1.2 (1.3) Change 13.8 6.9 3.9 Change(%) 42.9 - * Before the deduction of goodwill depreciation (Total) (Unit : Yen billions) Sales Operating Income 4Q of FY '09 139.1 (63.6) 4Q of FY '10 211.3 8.3 Change 72.3 71.9 Change(%) 52.0 13 Statements of operations Term Item FY2009 (April 1, 2008 March 31, 2009) (Yen millions) % FY2010 (April 1,2009 March 31,2010) (Yen millions) Change % (U.S.$ thousands) (Yen millions) 100.0 76.4 23.6 19.8 0.6 3.2 8,697,398 6,642,753 2,054,645 1,724,580 52,925 277,140 81,458 11,833 69,625 508 (10,962) 80,079 11.2 2.0 57.3 0.3 -69.0 - -0.5 33,656 (43,118) (18,043) (14,656) (12,022) 12,602 (41,581) (850) (1,674) 15,333 5,025 4,274 1,350 23,458 - Change(%) Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring cost Operating income (loss) 727,400 100.0 605,943 83.3 121,457 16.7 159,878 22.0 15,884 2.2 (54,305) -7.5 Other income (deductions): Interest and dividend income Interest expense Equity in earnings of affiliates Loss (gain) on securities, net Foreign exchange gain (loss) Other-net Total other income (deductions) 3,980 (2,336) (17,011) (6,388) (5,392) (178) (27,325) -3.7 3,130 (4,010) (1,678) (1,363) (1,118) 1,172 (3,867) (81,630) -11.2 21,907 2.7 235,559 103,537 - (17,041) -2.3 9,025 1.1 97,043 26,066 - (64,589) -8.9 12,882 1.6 138,516 77,471 - (1,429) -0.2 -0.1 (6,860) 791 - (63,160) -8.7 1.7 145,376 76,680 - Income (loss) before income taxes Income taxes Net income (loss) Less:Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to TDK Corp. 808,858 617,776 191,082 160,386 4,922 25,774 (638) 13,520 Note: U.S.$1=Yen 93, for convenience only. 14 Breakdown of Operating Income Changes (Unit:Yen billions) 80.1 [ Changes in operating income Total] Changes in sales and product mix 45.5 Rationalization and cost reductions and Purchased materials saving 50.2 SG & A expenses decrease (Including restructuring cost 26.4 Bil Yen) 23.9 Exchange fluctuations(1U.S.$=Yen 100.7 -> 92.9) -12.8 Sales price reduction(5.4%) -34.8 EPCOS Operating Income 7.3 EPCOS Goodwill 0.8 FY March 2010 (April 30, 2010) 15 Balance sheets (Assets) ASSETS Term Item Current assets Cash and cash equivalents Short-term investments Marketable securities Net trade receivables Inventories Other current assets Noncurrent assets Investments in securities Net property, plant and equipment Other assets TOTAL As of March 31, 2009 (Yen millions) % 481,157 165,705 23,993 17,968 122,711 105,684 45,096 43.7 619,879 35,047 348,645 236,187 1,101,036 56.3 As of March 31, 2010 (Yen millions) 537,747 132,984 67,873 22,405 169,349 105,069 40,067 553,711 38,324 318,205 197,182 100.0 1,091,458 % 49.3 Change (U.S.$ thousands) 5,782,226 1,429,935 729,818 240,914 1,820,957 1,129,774 430,828 56,590 (32,721) 43,880 4,437 46,638 (615) (5,029) 5,953,882 412,086 3,421,559 2,120,237 100.0 11,736,108 (66,168) 3,277 (30,440) (39,005) (9,578) 50.7 Note: U.S.$1=Yen 93, for convenience only. FY March 2010 (April 30, 2010) (Yen millions) 16 Balance sheets (Liabilities and Equity) LIABILITIES AND EQUITY Term As of March 31, 2009 (Yen millions) Item 199,621 71,049 3,497 50,970 63,314 1,942 Current liabilities Short-term debt Current installments of long-term debt Trade payables Accrued expenses Income taxes payables Other current liabilities 18.1 8,849 338,374 Noncurrent liabilities Long-term debt, excluding current installments Retirement and severance benefits Deferred income taxes Other noncurrent liabilities Total liabilities Additional paid-in capital Legal reserve Retained earnings Accumulated other comprehensive income (loss) 251,377 79,946 10,554 84,988 63,249 3,541 % 23.0 9,099 30.8 290,412 26.6 (U.S.$ thousands) (Yen millions) 2,702,978 859,634 113,484 913,849 680,097 38,075 51,756 8,897 7,057 34,018 (65) 1,599 97,839 250 3,122,710 (47,962) 179,554 1,930,688 (30,529) 98,007 84,304 906,495 (13,703) 14,284 16,000 11,312 15,242 121,634 163,893 (2,972) (758) 5,825,688 3,794 48.9 541,789 49.6 32,641 64,257 20,772 32,641 61,124 21,823 350,978 657,247 234,656 (3,133) 1,051 605,622 606,445 6,520,914 823 (162,741) (172,092) (1,850,451) (9,351) (66,505) 5,846,839 148 (10,462) (6,333) 554,218 Treasury stock Total stockholders' equity (Yen millions) Change 210,083 537,995 Common stock Noncontrolling interests Total equity TOTAL % As of March 31, 2010 8,823 563,041 1,101,036 50.3 (6,185) 543,756 0.8 5,913 51.1 549,669 100.0 1,091,458 49.8 0.6 63,581 50.4 5,910,420 100.0 11,736,108 (2,910) (13,372) (9,578) Note: U.S.$1=Yen 93, for convenience only. 17 Restructuring expenditures in FY2010 and Effects Restructuring expenditures in FY2010 :13Bil Yen Expected effect in FY2011：10Bil Yen FY March 2010 (April 30, 2010) 18 Ceramic Capacitors business Group April 30, 2010 Mr. Shinichi Araya Director & Senior Vice President, General Manager FY March 2010 (April 30, 2010) 19 Actions completed in FY2010 9 Consolidation of Japan domestic production sites (From 8 to 4 factories) 9 Optimization in Production lines 9 Optimization of human resource allocation ¾ Improvement in Productivities ¾ Reduction in expenditutures ¾ Improved in variable cost ratio Restructured business bases Improvement in Profitability 20 Actions to proceed in FY2011 9 Consolidation of production sites outside of Japan, From 8 to 4 factories 9 Continuous improvement activities in Productivities & total costs 9 Optimization of SCM to fit market requirements ¾ Improvement in Fixed costs ¾ Improvement in variable cost ratio From reformation stage to growth stage FY March 2010 (April 30, 2010) 21 Data Storage & Thin Film Technology Components Business Group April 30, 2010 Mr. Atsuo Kobayashi Corporate Officer , General Manager FY March 2010 (April 30, 2010) 22 Sales results in FY2010 and forecast for FY2011 FY2010 Sales Results FY2011 Sales Projection 1H 133.4 150.3 2H 145.6 153.4 Total 279.0 303.7 (Unit : Bil Yen) FY March 2010 (April 30, 2010) 23 Supplementary data for the FY March 2010 (April 1, 2009 – March 31, 2010) April 30, 2010 Corporate Communications Dept. FY March 2010 (April 30, 2010) 24 Capital expenditures, Depreciation and amortization, Research and development FY March 2010 [Results] Projections on Apr. 30 '1０ Capital expenditures 64.4 75.0 Depreciation and amortization 83.8 82.0 Research and development 53.9 53.0 6.7% 6.0% Unit:Yen billions (Share of net sales) <Net sales> FY March 2010 (April 30, 2010) 808.9 FY March 2011 880.0 25 Sales by major customer industry Year on Year IT Home Electronics High-Speed, Large Capacity Networks Car Electronics Others Sales Weight 0% 65% Minus 13% 10% Plus 8% 9% Minus 10% 16% Recording media and EPCOS results are not included. FY March 2010 (April 30, 2010) 26 Sales and Operating income ratio Sales (Yen in billions) (Excluding EPCOS results) Sales 250 15% 200 0% 150 -15% 100 -30% 50 -45% 0 -60% 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 207.9 190.6 205.9 155.9 107.0 144.6 161.1 168.7 165.5 Operating income ratio 6.4% 2.8% 4.4% -1.4% -49.2% 0.1% 6.3% 7.7% 5.1% FY Mar. '08 FY Mar. '09 FY Mar. '10 27 Share of sales by products (Q4 of FY Mar. '10) Others 13% Electronic Materials 21% Sales for Electronic materials (Excluding EPCOS results) Electronic devices 23% Recording devices 43% Sales (Yen in billions) 50 40 30 20 10 0 4Q 1Q 2Q 3Q 4Q 1Q Sales 45.9 45.7 46.5 32.0 20.9 28.5 FY Mar. '08 FY Mar. '09 2Q 3Q 4Q 33.7 34.7 FY Mar. '10 34.5 28 Share of sales by products (Q4 of FY Mar. '10) Others 13% Sales for Electronic device Electronic Materials 21% (Excluding EPCOS results) Electronic devices 23% Recording devices 43% Sales (Yen in billions) 60 50 40 30 20 10 0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Sales 51.4 48.7 50.1 38.4 29.0 34.0 36.6 39.7 38.2 FY Mar. '08 FY Mar. '09 FY Mar. '10 29 Share of sales by products (Q4 of FY Mar. '10) Others 13% Electronic Materials 21% Sales for Recording devices (Excluding EPCOS results) Electronic devices 23% Sales (Yen in billions) Recording devices 43% 100 80 60 40 20 0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Sales 87.9 72.4 77.6 58.4 38.8 62.6 70.8 73.6 72.1 FY Mar. '08 FY Mar. '09 FY Mar. '10 30 Share of sales by products (Q4 of FY Mar. '10) Others 13% Electronic Materials 21% Sales for Others (Excluding EPCOS results) Electronic devices 23% Recording devices 43% Sales (Yen in billions) 50 40 30 20 10 0 4Q 1Q 2Q 3Q 4Q 1Q Sales 22.7 23.8 31.7 27.1 18.2 19.6 FY Mar. '08 FY Mar. '09 2Q 3Q 4Q 20.0 20.8 20.7 FY Mar. '10 31 EPCOS results Sales (Yen in billions) Before the deduction of goodwill depreciation 50 10% 40 0% 30 -10% 20 -20% 10 -30% 0 -40% Sales 4Q 1Q 2Q 3Q 4Q 32.1 37.0 43.2 42.9 45.9 2.3% 2.6% Operating income ratio -17.8% -10.2% 0.3% FY Mar. '09 FY Mar. '10 FY March 2010 (April 30, 2010) 32