Consolidated Full Year Results for FY March 2014 Takakazu Momozuka Corporate Officer Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 -1- Consolidated Full Year Results for FY March 2014 (Yen billions） FY March 2013 Full Year Results FY March 2014 Full Year Results (2012.4.1-2013.3.31) (2013.4.1-2014.3.31) Net Sales Operating Income Change Yen billions % 841.8 984.5 142.7 17.0 22.1 36.6 14.5 65.6 3.7% 2.6% Operating Income Margin +1.1pt - Income from Continuing Operations before Income Taxes 19.8 39.8 20.0 101.0 Income from continuing Operations 5.1 21.8 16.7 327.5 Loss from discontinued operations -0.6 -3.6 (3.0) - Net income attributable to noncontrolling interests 3.3 1.9 (1.4) -42.4 Net Income 1.2 16.3 15.1 9.50 129.47 83.03 107.05 100.26 134.42 Earning Per Share (JPY) US$ (JPY) EURO (JPY) Ex-rate impact to Net sales & Operating Income 1258.3 - - Depreciated by 20.8% Depreciated by 25.6% Net sales：Increased by about 147.5 billion Yen Operating income：Increased by about 24.3 billion Yen Note: Data tape business and Blu-ray business are presented as discontinued operations in above results Copyright© 2014 TDK Corporation. 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Performance Briefing Fiscal Year March, 2014 April 28, 2014 -2- FY March 2014 Results - Passive Components Segment Net Sales 472 (Yen billions) 382 Net Sales 471.7 billion yen (up 24% year on year) Operating Income 15.4 billion yen (compared with 11.1 billion yen operating loss in FY March 2013) 380 ◆Ceramic Capacitors Consistently profitable since 1Q after implementing restructuring in FY March 2013 Strong sales in the automobile market 12/3 13/3 14/3 Operating Income 15.4 (Yen billions) ◆Aluminum and Film Capacitors Higher sales and earnings year on year due to a recovery in orders in the industrial equipment market and strong sales in the automobile market ◆Inductive Devices Strong sales in the automobile market Substantial increase in earnings year on year due to an improved product mix ◆High-frequency Components Higher sales for smartphones and tablet devices Reduced loss year on year due to productivity improvements, etc. -6.6 -11.1 12/3 13/3 14/3 ◆Piezoelectric Material Products Higher sales and earnings year on year due to increased sales of products for automotive applications and voice coil motors (VCMs) for use in camera modules Copyright© 2014 TDK Corporation. 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Performance Briefing Fiscal Year March, 2014 April 28, 2014 -3- FY March 2014 Results - Magnetic Application Segment Net Sales (Yen billions) 364 338 316 Net Sales 364.3 billion yen (up 8% year on year) Operating income 28.1 billion yen (down 24% year on year) ◆Recording Devices (HDD Heads) Earnings decreased slightly due to the benefits of improved productivity and a better product mix, despite a large year-on-year drop in shipments from FY March 2013, when there was temporary demand from the flooding in Thailand. 12/3 13/3 14/3 Operating Income (Yen billions) 39.0 37.1 28.1 ◆Magnets Lower sales and earnings year on year mainly reflected lower sales prices due to fluctuations in rare earth prices and one-off expenses due to the consolidation of overseas sites (An insurance payout of 4.2 billion yen related to the flooding in Thailand was recorded in FY March 2013) ◆Power Supplies Profitability improved year on year due to improving sales to the industrial equipment market 12/3 13/3 14/3 Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 -4- FY March 2014 Results - Film Application Segment Net Sales 129.3 (Yen billions) Net sales 129.3 billion yen (up 26% year on year) Operating income 13.4 billion yen (up 5% year on year) 102.9 80.7 ◆Energy Devices (Rechargeable Batteries) Substantial increases in sales and earnings year on year atop of strong growth in sales for use in smartphones and tablet devices 12/3 13/3 14/3 Operating Income (Yen billions) 12.8 13.4 ◆Applied Films Complete exit from data tape business and Blu-ray business as planned (discontinued operations) 8.2 12/3 13/3 14/3 Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 -5- FY March 2014 results by Segment FY March 2013 Full Year Results Yen billion ％ FY March 2014 Full Year Results Yen billion ％ Change Yen billion % Capacitors 118.0 14.0 139.6 14.2 21.6 18.3 Inductive devices 119.6 14.2 140.3 14.3 20.7 17.3 Other Passive Components 142.1 16.9 191.7 19.5 49.6 34.9 379.6 45.1 471.7 47.9 92.1 24.3 Recording devices 233.5 27.7 256.7 26.1 23.2 9.9 Other Magnetic Application Products 104.4 12.4 107.6 10.9 3.2 3.1 Magnetic Application Products 337.9 40.1 364.3 37.0 26.4 7.8 Applied Film Products 102.9 12.2 129.3 13.1 26.4 25.7 Other 21.4 2.5 19.3 2.0 (2.1) -9.8 Total 841.8 100.0 984.5 100.0 142.7 17.0 (11.1) -2.9 15.4 3.3 26.5 - Magnetic Application Products 37.1 11.0 28.1 7.7 (9.0) Applied Film Products 12.8 12.4 13.4 10.4 0.6 (1.8) -8.4 (3.2) -16.6 (1.4) 37.1 4.4 53.7 Passive Components Net Sales Passive Components Operating Income Other Sub total Corporate and eliminations Total Copyright© 2014 TDK Corporation. All rights reserved. (15.0) 22.1 5.5 (17.1) 2.6 36.6 Performance Briefing Fiscal Year March, 2014 3.7 -24.3 4.7 - 16.6 44.7 (2.1) 0.0 14.5 65.6 April 28, 2014 -6- Breakdown of Operating Income Changes FY March 2013 22.1 billion yen Operating Income +14.5 billion yen FY March 2014 36.6 billion yen (Yen billions) Benefits from Restructuring +5.9 Rationalization, cost reduction +17.1 Changes in sales +13.1 Proceed from insurance of Thai flooding -6.7 SG&A expenses increase (including gain from sales of assets 2.0) -2.2 Sales price Reduction -37.0 36.6 Exchange fluctuation (US$=Yen 100.26) +24.3 22.1 Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 -7- Quarterly Results by Segment (Yen billions) 4Q of FY March 2013 3Q of FY March 2014 4Q of FY March 2014 Jan.1- Mar.31, 2013 Oct.1- Dec.31, 2013 Jan.1- Mar.31, 2014 (A) (B) (C) Capacitors Inductive Devices Other Passive Components Net Sales Passive Components Recording Devices Other Magnetic Application Products Magnetic Application Products Film Application Products Other Total Passive Components Operating Income Magnetic Application Products Film Application Products Other Sub total Corporate and Eliminations Total Operating Income margin Ex- US$/Yen rate EURO/Yen Copyright© 2014 TDK Corporation. All rights reserved. QoQ Change (C)-(B) YoY Change (C)-(A) Yen billions % Yen billions % 30.7 31.2 42.5 34.7 34.9 47.5 36.1 34.9 47.1 5.4 17.6 1.4 4.0 3.7 11.9 0.0 0.0 4.6 10.8 (0.4) -0.8 104.4 117.1 118.1 13.7 13.1 1.0 0.9 57.6 24.5 69.0 26.8 61.2 28.3 82.1 26.5 5.4 218.4 95.7 41.0 4.3 258.2 89.5 29.1 5.8 242.5 3.6 3.8 7.4 2.6 0.4 24.1 6.3 (7.8) 15.5 1.5 9.0 (6.2) 9.8 (11.9) 7.4 1.5 11.0 (15.7) (3.9) 1.8 2.0 (0.3) (0.4) (3.1) 6.1 10.3 6.8 (0.8) 22.4 (4.4) (3.5) 17.9 -1.6% 6.9% 92.20 121.74 100.38 136.56 0.3 5.4 1.1 (0.8) 6.1 (4.5) 4.2 - -11.3 5.6 -6.5 -29.0 34.9 -6.1 (5.8) -95.1 3.6 200.0 (4.9) (0.9) -45.0 (5.7) (0.5) 0.0 6.5 - (16.3) (1.4) - (0.1) 5.2 - (16.2) 1.7 - -6.2pt 0.7% +2.3pt -47.6 -83.8 -72.8 -90.5 - 102.97 141.12 Performance Briefing Fiscal Year March, 2014 April 28, 2014 -8- Financial Position (Yen billions) March End, 2012 Total Assets Total Liabilities Stockholder’s equity (comprehensive income) Stockholder’s equity ratio Cash and cash equivalents, Short-term investments Interest-bearing Debt D/E ratio Net Cash March End, 2013 1,072.8 560.8 498.2 (230.8) 46.4% 1,169.6 589.0 561.2 (159.0) 48.0% 1,239.6 587.3 635.3 (87.1) 51.3% 70.0 (1.7) 74.1 71.9 3.3% 173.4 223.5 259.5 36.0 272.8 0.55 -99.4 295.6 0.53 -72.1 267.0 0.42 -7.5 (28.6) -0.11 64.6 Cash and cash equivalents, Short-term investments Interest-bearing Debt Net cash 295.6 272.8 300 Change 2013-2014 March End, 2014 259.5 267.0 223.5 200 173.4 100 0 -50 -100 - 99.4 March End, 2012 Copyright© 2014 TDK Corporation. All rights reserved. -72.1 March End, 2013 Performance Briefing Fiscal Year March, 2014 -7.5 March End, 2014 April 28, 2014 -9- Free Cash Flow (Yen billions) Operating cash flow Investment cash flow 150 Free cash flow 127.3 108.9 100 71.9 55.3 50 25.4 18.7 0 -50 -29.9 -55.4 -100 -90.2 （Yen billions） FY March 2013 FY March 2014 Change Capital Expenditures 85.6 68.6 (17.0) Depreciation and amortization 77.4 82.9 5.5 Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 - 10 - Recording Device Business ●HDD market FY March 2014 : About 552 million units (TDK’s estimation） FY March 2015 : About 535 million units (TDK’s forecast) ●Shipment index Recording Device Sales (Left, including HDD Head (HGA) and HDD Suspention) HDD Head Shipment Index (Right) (Yen billions) 59.9 60 40 100 55.8 90 60.2 57.6 60.2 69.0 (shipment index) 61.2 120 Projections 98 71 66.3 74 81 86 20 72 71 0 $/¥ 90 60 30 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 80.27 78.67 81.17 92.20 98.74 99.02 100.38 102.97 100.0 FY March 2013 Copyright© 2014 TDK Corporation. All rights reserved. FY March 2014 Performance Briefing Fiscal Year March, 2014 FY March 2015 April 28, 2014 - 11 - Restructuring Progress ■Restructuring implemented during FY March 2014 ◇Exit non-core businesses ・Withdraw from LTO business and Bluray business ・Review of other business and products Promote business portfolio review Optimize production bases ◇Further integrate bases worldwide (Centered on overseas bases) ■Restructuring costs and Expected benefits Restructuring Cost in FY March 2014 (Yen billions) Continuing operations 7.1 Discontinued operations 3.4 Total 10.5 Benefits in FY March 2014 : 2.3 billlion yen Expected benefit in FY March 2015 : 4.0 billion yen Copyright© 2014 TDK Corporation. All rights reserved. Completed large scale restructuring To concentrate management resources on growing market and core business Performance Briefing Fiscal Year March, 2014 April 28, 2014 - 12 - 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 the TDK Group in light of the information currently available to it, and contain known and unknown risks, uncertainties, and other factors. The TDK Group therefore wishes to caution readers that, being subject to risks, uncertainties, and other factors, the 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 the TDK Group undertakes no obligation to publicly update or revise any forwardlooking statements after the issue of this material except as provided for in laws and ordinances. The electronics markets in which the TDK Group operates are highly susceptible to rapid changes, risks, uncertainties, and other factors that can have significant effects on the TDK Group including, but 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. Also, since the purpose of these materials is only to give readers a general outline of business performance, many numerical values are shown in units of a billion yen. Because original values, which are managed in units of a million yen, are rounded off, the totals, differences, etc. shown in these materials may appear inaccurate. If detailed figures are necessary, please refer to our financial statements and supplementary materials. Copyright© 2014 TDK Corporation. All rights reserved. Performance Briefing Fiscal Year March, 2014 April 28, 2014 - 13 - Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2014/4q_1.htm