Consolidated Results FY March 2008 & Projections for FY March 2009 April 28, 2008 Mr. Seiji Enami Director & Senior Vice President General Manager Finance & Accounting Department FY March 2008 (April 28, 2008) 1 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 TDKand anditsits 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 andother other factors. TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties factors. TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties and andother otherfactors, factors,TDK TDKGroup’s Group’sactual actualresults, results,performance, performance,achievements achievementsororfinancial financialposition position could couldbe bematerially materiallydifferent differentfrom fromany anyfuture futureresults, results,performance, performance,achievements achievementsororfinancial financial position positionexpressed expressedororimplied impliedby bythese theseforward-looking forward-lookingstatements, statements,and andTDK TDKGroup Groupundertakes undertakes no noobligation obligationtotopublicly publiclyupdate updateororrevise reviseany anyforward-looking forward-lookingstatements statementsafter afterthe theissue issueofofthis this material except as provided for in laws and ordinances. material except as provided for in laws and 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 but are arenot notlimited limitedto, to,shifts shiftsinintechnology, technology,fluctuations fluctuationsinindemand, demand,prices, prices,interest interestand andforeign foreign exchange exchangerates, rates,and andchanges changesinineconomic economicenvironments, environments,conditions conditionsofofcompetition, competition,laws lawsand and regulations. regulations. FY March 2008 (April 28, 2008) 2 Consolidated results Change (%) Change (JPY billion) FY Mar 07 FY Mar 08 Net sales 862.0 866.3 4.3 0.5 Operating income 79.6 87.2 7.6 9.5 Income before income taxes 88.7 91.5 2.8 3.2 Net income 70.1 71.5 1.3 1.9 Operating Incom ratio 9.2% 10.1% FY March 2008 (April 28, 2008) 3 Forex Impact Average exchange rates Prev. FY JPY.USD JPY/Euro Current FY \116.97 \150.02 \114.44 Appreciation by 2.2% \161.59 Depreciation by 7.7% Forex Impact Revenue Negative JPY 8.1 billion Operating Income Negative JPY 5.9 billion FY March 2008 (April 28, 2008) 4 Main features FY Mar. 08 Recording Devices Increase in volumes & Product mix improvement i.e. (Increase in vertical recording heads) Components other than Recording Devices Significant increase in “Other electronic components” supported by demand expansion Capacitor sales did not grow in accordance to the demand growth Negative impact on power supplies and other products due to investment declines in semi-conductor manufacturing machinery industries Price hike of natural resources and materials Recording Media Segment Sharp decrease in revenue due to the business transfer Little impact on operating income FY March 2008 (April 28, 2008) 5 Sales Breakdown FY Mar 07 FY Mar 08 Change (%) Change 758.8 818.1 59.3 7.8 Electronic materials 199.2 200.1 0.9 0.4 Electronic devices 198.2 209.1 10.9 5.5 Recording devices 304.8 334.7 29.9 9.8 Other eletronic components 56.6 74.2 17.6 31.2 Recording media segment 103.2 48.2 (55.0) (53.3) 862.0 866.3 4.3 (JPY billion) Electronic materials and components segment Total sales FY March 2008 (April 28, 2008) 0.5 6 Sales by major customer industry (Electronic materials and components segment) YoY IT Home Electronics High-Speed, Large Capacity Networks Car Electronics Others 1. IT Home Electronics 2 .High-Speed, L-C Networks 3. Car Electronics 4. Others Growth in Growth in Growth in Growth in + + + + Sales Weight 9% 63 ％ 13% 11 ％ 10% 8 ％ 1% 18 ％ components for storage devices components for cellular Phones components for automobiles components for industrial machinery FY March 2008 (April 28, 2008) 7 Sales by Region (JPY billion) Change (%) Change FY Mar 07 FY Mar 08 Japan 171.4 152.1 (19.2) (11.2) Americas 103.1 96.3 (6.8) (6.6) 83.5 59.1 (24.4) (29.2) Asia and others 504.0 558.8 54.8 10.9 Total sales 862.0 866.3 4.3 0.5 80.1 82.4 Europe Share of overseas sales (%) FY March 2008 (April 28, 2008) 8 Breakdown of Operating Income Changes (Comparison with FY Mar 07) (Unit: JPY billion) [Changes in operating income FY March, 2008] (Positive) (Negative) 25.5 Changes in sales and product mix Rationalization & cost reduction 30.1 0.2 Decrease in SG & A (5.9) Exchange fluctuations(1U.S.$=Yen 116.97 -> 114.44) (57.6) Sales Price Discounts (6.2%) Others (Gain on business transfer) 15.3 T o t a l 71.1 FY March 2008 (April 28, 2008) (63.5) 7.6 9 Consolidated results (by business segment) (JPY billion) FY Mar 07 FY Mar 08 Change (%) Change Electronic materials and components segment Net sales Operating income Ratio (%) 758.8 81.8 10.8 818.1 76.0 9.3 59.3 (5.8) 7.8 (7.1) 103.2 (2.2) (2.1) 48.2 11.2 23.3 (55.0) 13.4 (53.3) 862.0 79.6 9.2 866.3 87.2 10.1 4.3 7.6 0.5 9.5 Recording media segment Net sales Operating income Ratio (%) Total Net sales Operating income Ratio (%) FY March 2008 (April 28, 2008) 10 Comparison of 3Q & 4Q Electronic materials and components segment Electronic Materials & Components - Sales - 250 200 Others Others 150 Rec. Devices JPY Billion Rec. Devices Electronic Materials & Components Segment Sales & Op. Income JPY Billion 3Q 4Q Balance Elec. Materials 51.4 45.9 (5.5) Elec. Devices 53.3 51.4 (1.9) Rec. Devices 89.9 87.9 (2.0) Others 23.1 16.8 (6.4) Total 217.8 201.9 (15.8) OP 26.9 13.0 (13.9) Revenue decrease by 15.8 billion 100 E lec. Devices E lec. Devices 50 E lec. Materials E lec. Materials 3Q 4Q Sales decreases in all sectors OP decrease by 13.9 billion 0 FY March 2008 (April 28, 2008) 11 Financial Indices Trade Receivables Turnover Inventory Turnover Fixed Asset Turnover Operating Income/Net sales Net Income/Share (basic) Net Assets/Share ROA ROE Months Months Times/an ％ JPY JPY ％ ％ Mar. 2004 Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 2.52 1.41 3.03 8.6 318 4,352 5.5 7.5 2.69 1.36 3.10 9.1 252 4,832 4.2 5.5 2.85 1.34 3.45 7.6 334 5,311 5.1 6.6 2.48 1.25 3.52 9.2 530 5,759 7.3 9.6 2.18 1.23 3.37 10.1 552 5,557 7.4 9.7 FY March 2008 (April 28, 2008) 12 Return to Shareholders JPY 2004 Dividend/share 2005 55 2006 70 2007 90 110 2008 130 2009 140 Dividend/share 160 140 120 JPY 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 Stock repurchase and cancellation FY Mar. 08: 3,599thousand shares, JPY39,229million FY March 2008 (April 28, 2008) 13 Projections for FY March 2009 Consolidated (JPY billion) FY Mar 2008 FY Mar 2009 Results Projections Change (%) Change 1.6 866.3 880.0 13.7 Operating income 87.2 80.0 (7.2) (8.2) Income before income taxes 91.5 85.5 (6.0) (6.6) Net income 71.5 65.0 (6.5) (9.0) Net Sales Exchange rate (JPY/U.S.$) 114 100 FY March 2008 (April 28, 2008) 14 Projections for FY March 2009 FY March 06 FY March 07 FY March 08 FY March 09 JPY Billion, % Capital expenditures Depreciation and amortization Research and development (Share of net sales) <Net sales> Reform Charges [Results] [Results] [Results] Projections 73.9 70.4 84.3 70.0 58.5 45.5 5.7% 795.2 65.3 50.1 5.8% 862.0 71.3 57.4 6.6% 866.2 77.0 57.0 6.5% 880.0 14.2 7.0 5.9 4.7 FY March 2008 (April 28, 2008) 15