Performance Briefing 3Q of Fiscal Year March, 2015 TDK Corporation January 30, 2015 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -1- ◆Consolidated Results for 3Q of FY March 2015 Consolidated Full Year Projections for FY March 2015 Takakazu Momozuka, Corporate Officer Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -2- Consolidated Results for 3Q of FY March 2015 Consolidated Full Year Projections for FY March 2015 Takakazu Momozuka Corporate Officer Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -3- Highlights of the Operating Results ◆Net sales achieved a historical high in both the third quarter and the nine-month period. In the third quarter, all business segments consisting of passive components, magnetic application products and film application products recorded the highest sales in the history of the Company driven by the robust sales for the ICT (Information and Communications Technology) market. ◆Operating income was 53.1 billion yen for the nine-month period, a year-on-year increase of 52%. Well-balanced earning structure has been stable in the major three business segments. ◆The full-year earnings projections were revised upward. Year-end dividend will be increased by 10 yen per share. ◆In the magnet business, impairment loss was accounted for mainly with respect to metal magnet-related facilities. Impairment loss of goodwill was recorded in the power supply business. Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -4- Consolidated Results for 3Q of FY March 2015 (Yen billions） Change FY March 2014 3Q Results FY March 2015 3Q Results 258.2 300.4 42.2 16.3 17.9 25.2 7.3 40.8 Net Sales Operating Income 8.4% 6.9% Operating Income Margin Yen billions % +1.5pt - Income from Continuing Operations before Income Taxes 17.6 22.2 4.6 26.1 Income from continuing Operations 11.4 17.3 5.9 51.8 -1.3 - Net income attributable to noncontrolling interests 0.8 0.9 0.1 12.5 Net Income 9.3 16.4 7.1 76.3 Earning Per Share (JPY) 73.99 130.24 US$ (JPY) 100.38 136.56 114.25 142.79 Loss from discontinued operations EURO (JPY) Ex-rate impact to Net sales & Operating Income - - - - Depreciated by 13.8% Depreciated by 4.6% Net sales：Increased by about 29.6 billion Yen Operating income：Increased by about 6.7 billion Yen Note: The figures related to the data tape business and the blu-ray business, which became discontinued operations in the year ended March 31, 2014, are restated. Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -5- 3Q Results - Passive Components Segment Net Sales (Yen billions) 146.1 117.1 14/3 ◆ Ceramic Capacitors ・Sales increased year on year, particularly to the steady automobile market. ・Profit margins also improved due to increased productivity. 15/3 Operating Income (OP margin) (Yen billions) 11.9 8.1% 6.1 5.2% 14/3 Net Sales 146.1 billion yen (up 24.8% year on year) Operating Income 11.9 billion yen (up 95.1% year on year) 15/3 ◆ Inductive Devices ・Sales increased for the robust automobile market and the ICT market centering on demands for North American and Chinese smartphone customers. ・Profits increased due to high utilization. ◆ High-frequency Components ・Sales of discrete products were strong mainly due to buoyant demand from the North American and Chinese smartphone customers. ・Profitability of the business improved year on year due to increased productivity and improved product portfolio. ◆ Piezoelectric Material Products ・Both revenues and profits increased year on year mainly due to strong sales of VCMs for camera modules and components for automobiles. Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -6- 3Q Results - Magnetic Application Segment Net Sales (Yen billions) 101.6 95.7 Net Sales 101.6 billion yen (up 6.2% year on year) Operating income 7.3 billion yen (down 29.1% year on year) ◆ Recording Devices (HDD Heads) ・The volume of shipped products increased marginally on a year-on-year basis. ・Profits increased year on year due to improved productivity and the turnaround of product portfolio reflecting growing sales to data centers. 14/3 15/3 Operating Income (OP margin) (Yen billions) 10.3 7.3 10.8% 7.2% 14/3 ◆Magnets ・Sales to the automobile market and ICT market decreased. Impairment of metal magnet-related facilities was implemented. ◆Power Supplies ・Sales to the industrial equipment market of products such as semiconductor production equipment, FA equipment and measuring equipment were steady ・Impairment loss in goodwill was recorded. 15/3 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -7- 3Q Results - Film Application Segment Net Sales (Yen billions) 47.4 41.0 Net sales 47.4 billion yen (up 15.6% year on year) Operating income 9.6 billion yen (up 41.2% year on year) ◆Energy Devices (Rechargeable Batteries) 14/3 15/3 Operating Income (OP margin) ・Both sales and profits increased year on year due to a growth in sales for new smartphones manufactured by our main customers and the expanded customer portfolio mainly in the Chinese market. 9.6 (Yen billions) 6.8 20.3% 16.6% 14/3 15/3 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -8- Breakdown of Operating Income Changes (3Q) Operating Income + 7.3 billion yen (Yen billions) Changes in sales +15.7 Sales price Reduction -16.4 Rationalization, cost reduction +6.9 Benefits from Restructuring +0.6 SG&A expenses increase -0.9 (including decrease in sales of assets -1.3) Impairment -5.3 Exchange fluctuation 25.2 (US$=Yen 114.25) +6.7 17.9 3Q of FY March 2014 Copyright© 2015 TDK Corporation. All rights reserved. 3Q of FY March 2015 Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 -9- Quarterly Results by Segment (Yen billions) Capacitors Inductive Devices Other Passive Components Net Sales Passive Components Recording Devices Other Magnetic Application Products Magnetic Application Products Film Application Products Other Total Passive Components Operating Income Magnetic Application Products Film Application Products Other Sub total Corporate and Eliminations Total Operating Income margin Ex- US$/Yen rate EURO/Yen Copyright© 2015 TDK Corporation. All rights reserved. 3Q of FY March 2014 (A) 2Q of FY March 2015 (B) 3Q of FY March 2015 (C) 34.7 34.9 47.5 37.3 38.8 56.2 37.5 40.3 68.2 117.1 132.4 69.0 26.8 YoY Change (C)-(A) Yen billions QoQ Change (C)-(B) % Yen billions % 2.8 8.1 0.2 0.5 5.4 15.5 1.5 3.9 20.7 43.6 12.0 21.4 146.1 29.0 24.8 13.7 10.3 63.7 26.7 75.1 26.5 6.1 8.8 11.4 17.9 (0.3) -1.1 (0.2) -0.7 95.7 41.0 4.3 258.2 90.4 37.2 4.8 264.8 101.6 47.4 5.3 300.4 5.9 6.4 6.2 15.6 11.2 10.2 12.4 27.4 1.0 23.3 0.5 10.4 42.2 16.3 35.6 13.4 6.1 10.3 6.8 -0.8 22.3 -4.4 9.8 8.2 5.2 0.1 23.3 -5.0 11.9 7.3 9.6 0.1 29.0 -3.8 5.8 95.1 2.1 21.4 (3.0) -29.1 (0.9) -11.0 2.8 41.2 4.4 84.6 0.9 6.7 30.0 0.0 5.7 0.0 24.5 0.6 - 1.2 - 17.9 18.3 25.2 6.9% 6.9% 100.38 136.56 103.86 137.77 Performance Briefing 3Q of Fiscal Year March, 2015 7.3 8.4% +1.5pt 40.8 6.9 - +1.5pt 37.7 - 114.25 142.79 January 30, 2015 - 10 - Consolidated Results through 3Q of FY March 2015 (Yen billions） FY March 2014 Results through 3Q Net Sales Operating Income FY March 2015 Results through 3Q Change Yen billions % 742.0 802.7 60.7 8.2 35.0 53.1 18.1 51.7 4.7% Operating Income Margin 6.6% +1.9pt - Income from Continuing Operations before Income Taxes 35.7 49.6 13.9 38.9 Income from continuing Operations 22.2 36.9 14.7 66.2 Loss from discontinued operations -5.1 - 1.5 2.3 0.8 53.3 15.7 34.5 18.8 119.7 124.90 274.43 99.38 132.22 106.78 140.24 Net income attributable to noncontrolling interests Net Income Earning Per Share (JPY) US$ (JPY) EURO (JPY) Ex-rate impact to Net sales & Operating Income - - - - Depreciated by 7.4% Depreciated by 6.1% Net sales：Increased by about 46.5 billion Yen Operating income：Increased by about 9.9 billion Yen Note: The figures related to the data tape business and the blu-ray business, which became discontinued operations in the year ended March 31, 2014, are restated. Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 11 - Sales Results by Priority Markets (through 3Q) TDK Total (Yen billions) 900 800 700 600 500 400 300 200 100 0 +8.2% 742.0 Automotive (Yen billions) 802.7 150 123.2 +13.9% 140.3 100 50 0 FY March 2014 (9 months) ICT (Yen billions) FY March 2014 (9 months) Automotive ICT* FY March 2015 (9 months) Industrial Consumer *Includes HDD Heads and HDD Suspensions Automotive： Strong sales of passive components ICT： Increase in sales of passive components and rechargeable batteries Industrial & Others： Increase in sales of power supplies to the industrial equipment market Copyright© 2015 TDK Corporation. All rights reserved. 500 400 300 200 100 0 422.8 FY March 2015 (9 months) Industrial (Yen billions) 150 454.0 +7.4% FY March 2014 (9 months) 200 FY March 2015 (9 months) 143.1 +7.7% 154.1 100 50 0 Performance Briefing 3Q of Fiscal Year March, 2015 FY March 2014 (9 months) FY March 2015 (9 months) January 30, 2015 - 12 - Recording Device Business ●HDD market in FY March 2015 *TDK’s estimation About 535 million units (end of April) About 560 million units (Current estimation) ●Shipment index Recording Device Sales (Left, including HDD Head (HGA) and HDD Suspention) HDD Head Shipment Index (Right) (shipment index) (Yen billions) 80 60.2 66.3 116 60 40 100 75.1 69.0 61.2 59.1 111 98 20 117 Index projection 95 63.7 104 95 0 $/¥ 1Q 2Q 98.74 99.02 3Q 4Q 1Q 2Q 3Q 4Q 100.38 102.97 102.17 103.86 114.25 115.00 FY March 2014 Copyright© 2015 TDK Corporation. All rights reserved. 120 110 100 90 80 70 FY March 2015 Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 13 - FY March 2015 Full Year Projections Upward revision from previous announcement figures (October 31) (Yen billions） Net Sales FY March 2014 Full Year Results FY March 2015 Full Year Projections (revised) Y o Y Change % Yen billions 1,050.0 1,050.0 1,080.0 95.5 9.7% 36.6 57.0 63.0 70.0 33.4 91.3% 3.7% 5.4% 6.0% 6.5% +2.8pt - 39.8 56.0 62.0 68.0 28.2 70.9% 16.3 34.0 37.0 42.0 25.7 157.7% 129.47 270.23 293.98 333.51 - - Operating Income Margin Income from continuing operations before income taxes Earning Per Share (JPY) FY March 2015 Full Year Projections (announced Oct. 31) 984.5 Operating Income Net Income FY March 2015 Full Year Projections (announced Apr. 28) US$ Yen 100.26 Yen 100.00 EURO Yen 134.42 Yen 135.00 Ex-rate Copyright© 2015 TDK Corporation. All rights reserved. Yen 105.00 (Second half) Yen 135.00 (Second half) Performance Briefing 3Q of Fiscal Year March, 2015 Yen 115.00 (4Q) Yen 135.00 (4Q) January 30, 2015 - - 14 - FY March 2015 Dividend Projections Year-end dividend will be increased by 10 yen per share, based on the upward revision of the full year projections for FY March 2015. Projected dividend per share Previous projections (October 31) Interim dividend Year-end dividend Annual dividend Copyright© 2015 TDK Corporation. All rights reserved. Revised projections 40 yen 40 yen 40 yen 50 yen (projections) 80 yen 90 yen (projections) 2015年3月期 第3四半期決算説明会 TDK株式会社 2015年1月30日 - 15 - Financial Position （Yen billions） March End, 2014 Sep End, 2014 Dec End, 2014 Change from Sep End, 2014 1,239.6 1,312.3 1,425.8 113.5 Total Liability 587.3 620.2 661.8 41.6 Stockholders' Equity 635.3 673.7 745.8 72.1 (comprehensive income) -87.1 -51.9 16.2 68.1 Stockholders' Equity ratio 51.3% 51.3% 52.3% +1.0pt Cash and Cash equivalents (*1) 259.5 258.3 283.8 25.5 Interest-bearing Debt (*2) 267.0 267.3 285.7 18.4 -7.5 -9.0 -1.9 7.1 Total Asset Net Cash (*3) *1: Cash and Cash equivalents + Short-term investments *2: Short-term debt + Current installments of long-term debt + Long-term debt, excluding current installments *3: Cash and Cash equivalents - Interest-bearing Debt Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 16 - Supplementary Data Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 17 - Quarterly sales and operating income by segment FY March 2015 FY March 2014 Capacitors 1Q 33.7 2Q 35.1 3Q 34.7 4Q 36.1 Inductive Devices 35.0 35.5 34.9 34.9 Other Passive Components 48.3 48.8 47.5 47.1 117.0 119.4 117.1 118.1 Recording Devices 60.2 66.3 69.0 61.2 Other Magnetic Application Products 26.0 26.6 26.8 28.3 Magnetic Application Products 86.2 92.9 95.7 89.5 Film Application Products 26.5 32.7 41.0 29.1 4.7 4.4 4.3 5.8 234.4 249.4 258.2 242.5 Passive Components 2.8 6.2 6.1 0.3 Magnetic Application Products 4.6 7.8 10.3 5.4 Film Application Products 2.1 3.3 6.8 1.1 (0.8) (0.8) (0.8) (0.8) 8.7 16.5 22.3 6.1 Corporate and Eliminations (4.2) (4.0) (4.4) (4.5) Total 4.5 12.5 17.9 1.7 98.74 99.02 100.38 128.96 131.11 136.56 Yen billions Net Sales Passive Components Other Total Operating Income Other Sub-total Ex-rate ￥/USD ￥/EURO Copyright© 2015 TDK Corporation. All rights reserved. Total 1Q 36.5 2Q 37.3 3Q 37.5 140.3 191.7 36.7 38.8 40.3 50.2 56.2 68.2 471.7 256.7 107.7 123.4 132.4 146.1 59.1 63.7 75.1 28.0 26.7 26.5 364.3 129.3 87.1 90.4 101.6 22.5 37.2 47.4 19.3 984.5 15.4 4.5 4.8 5.3 237.5 264.8 300.4 7.8 9.8 11.9 28.1 13.4 7.1 8.2 7.3 0.3 5.2 9.6 (3.2) 53.7 (0.4) 0.1 0.1 14.8 23.3 29.0 (17.1) 36.6 (5.2) (5.0) (3.8) 102.97 100.23 141.12 134.42 139.6 Performance Briefing 3Q of Fiscal Year March, 2015 9.6 18.3 25.2 102.17 103.86 114.25 140.17 137.77 142.79 4Q January 30, 2015 Total - 18 - FY March 2015 Projections -Capex, Depreciation, R&D- Capital expenditure Depreciation R&D (Yen billions) 120 100 99.7 90.0 85.6 80 80.0 79.9 77.4 82.9 83.0 83.0 68.6 63.4 60 52.6 53.5 3/12 3/13 68.0 69.0 40 20 0 3/15 3/15 3/15 3/15 Initial Projections Current Projections Initial Projections Current Projections Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 3/12 3/13 3/14 3/12 3/13 3/14 3/14 3/15 3/15 Initial Projections Current Projections 3/12 : FY March 2012 January 30, 2015 - 19 - Cash Flows YoY Change FY March 2014 Results through 3Q FY March 2015 Results through 3Q Effect of exchange rate chagens on cash and cash equivalents 85.5 -43.1 42.4 -19.4 27.6 89.3 -93.1 -3.8 -19.7 36.2 3.8 (50.0) (46.2) (0.3) 8.6 Cash and Cash Equivalents 264.3 263.6 (0.7) FY March 2014 Results through 3Q FY March 2015 Results through 3Q 47.9 61.8 70.6 59.8 (Yen billions） Operating Cash Flow Investing Cash Flow Free Cash Flow Financing Cash Flow （Yen billions） Capital Expenditures Depreciation and amortization Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 YoY Change January 30, 2015 22.7 (2.0) - 20 - Annual Sales by applications (FY March 2011 – FY March 2014) FY11/3 : FY March 2011 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 21 - Passive Components Business Annual sales by applications (FY March 2011 – FY March 2014) FY11/3 : FY March 2011 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 22 - Quarterly sales by applications (1Q of FY March 2014 –3Q of FY March 2015) Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 23 - Passive Components Business quarterly sales by applications (1Q of FY March 2014 –3Q of FY March 2015) Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 24 - 2005/3 : FY March 2005 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 25 - 2005/3 : FY March 2005 Copyright© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 26 - 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© 2015 TDK Corporation. All rights reserved. Performance Briefing 3Q of Fiscal Year March, 2015 January 30, 2015 - 27 - Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2015/3q_1.htm