Performance Briefings 1Q of Fiscal Year March, 2014 TDK Corporation July 31, 2013 Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -1- ◆Change in Scope of Responsibilities of Executive Vice Presidents Atsuo Kobayashi Executive Vice President ◆Consolidated 1Q Results of FY March, 2014 Takakazu Momozuka Corporate Officer ◆Recording Device Business Atsuo Kobayashi Executive Vice President Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -2- Change in Scope of Responsibilities of Executive Vice Presidents Atsuo Kobayashi Executive Vice President Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -3- Change in Scope of Responsibilities of Executive Vice Presidents President Takehiro Kamigama Executive Vice President Hiroyuki Uemura Executive Vice President Atsuo Kobayashi Capacitors Recording Devices (HDD head) Applied Films Power Supplies Other products Copyright© 2013 TDK Corporation. All rights reserved. Inductive Devices Magnets Piezoelectric materials products, Circuit protection components Performance Briefings 1Q of Fiscal Year March, 2014 Highfrequency components Sensors July 31, 2013 -4- Consolidated 1Q Results of FY March, 2014 Takakazu Momozuka Corporate Officer Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -5- Consolidated 1Q results of FY March 2014 (Yen billions） Net Sales FY March 2013 1Q Results FY March 2014 1Q Results 208.7 236.5 9.2 Change Yen billions % 27.9 13.4 4.0 (5.2) -56.8 4.4% 1.7% -3.0pt - Income before Income Taxes 8.8 4.5 (4.3) -48.9 Net Income 4.5 0.4 (4.1) -91.7 35.52 2.96 - - Operating Income Operating Income Margin Earning Per Share (JPY) Ex-rate US$ Yen 80.27 Yen 98.74 EURO Yen 103.18 Yen 128.96 Ex-rate impact to Net sales & Operating Income Copyright© 2013 TDK Corporation. All rights reserved. Deppreciated by 23.0% Deppreciated by 25.0% Net sales：Increased by about 40.0 billion Yen Operating income：Increased by about 5.9 billion Yen Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -6- Features in 1Q results of FY March 2014 ◆Consolidated sales increased 13.4%, operating income decreased 56.8% ●Sales to the automotive and industrial equipment markets continued to increase after bottoming out in the third quarter of FY March 2013 ●Passive components was profitable for the first time in 6 quarters ・Sales increased to the automotive, industrial equipment and communication equipment markets (*) (For details, please see pages 21-22 ・Reflects the benefits of restructuring centered on ceramic capacitors and yen depreciation ●Consolidated sales of magnetic application products declined 2.3% year on year, and operating income dropped 68.5% ・Reflects lower demand for HDD heads (There was a recovery in demand in the first quarter of FY March 2013 related to the Thai floods) ・Sales of magnets decreased sharply year on year due to rare earth material price decline and other factors (*) For details about sales transition by market applications, please see pages18-21 Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -7- Breakdown of Operating Income Changes (Yen billions) Operating Income -5.2 billion yen Changes in sales 9.2 (5.0) SG&A expenses increase (including restructuring Benefits from cost increase restructuring by 0.5) 2.4 Sales price reduction (7.9) Exchange fluctuation （US$=Yen 98.74) 5.9 Rare earth material price fluctuation (1.6) Rationalization, cost reduction 4.0 2.6 (1.6) 1Q of FY 2013 9.2 billion yen Copyright© 2013 TDK Corporation. All rights reserved. 1Q of FY 2014 4.0 billion yen Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 -8- Segment Information (Yen billions) (FY2013 1Q vs.FY2014 1Q, FY2013 4Q vs. FY2014 1Q) 1Q of FY 2013 Apr 1- Jun 30, 2012 （Ａ） 4Q of FY 2013 Jan 1- Mar 31, 2013 （B） 1Q of FY 2014 Apr 1- Jun 30, 2013 （C） YoY Change （Ｃ）－（Ａ） Yen billions QoQ Change （Ｃ）－（Ｂ） % Yen billions % Net Sales Capacitor 31.4 30.7 33.7 2.3 7.3 3.0 9.8 Inductive Device 28.2 31.2 35.0 6.8 24.1 3.8 12.2 Other Passive Comp 31.8 42.5 48.3 16.5 51.9 5.8 13.6 91.5 104.4 117.0 25.5 27.9 12.6 12.1 59.9 28.3 88.2 23.2 5.8 208.7 57.6 24.5 82.1 28.6 5.4 220.5 60.2 26.0 86.2 28.6 4.7 236.5 0.3 0.5 2.6 4.5 (2.3) -8.1 1.5 6.1 (2.0) -2.3 4.1 5.0 5.4 23.3 0.0 0.0 (1.1) -19.0 (0.7) 27.8 13.3 16.0 7.3 - 6.7 155.6 Passive Components Recording Divices Other Magnetic Application Products Magnetic Application Products Film Application Products Other Total -13.0 Operating Income Passive Components (2.9) (3.9) 2.8 5.7 Magnetic Application Products 14.6 2.1 (0.4) 13.4 (4.2) 9.2 1.8 1.7 (0.3) (0.8) (3.0) (3.8) 4.6 1.6 (0.8) 8.2 (4.2) 4.0 (10.0) -68.5 2.8 (0.5) -23.8 (0.1) -5.9 (0.4) - (0.5) - (5.2) -38.8 9.0 - (1.2) - (5.2) -56.5 7.8 - 4.4% -1.7% 1.7% -2.7pt - 3.4pt - Film Application Products Other Sub total Corporate and Eliminations Total Operating Income margin Ex- US$ rate EURO Copyright© 2013 TDK Corporation. All rights reserved. Yen 80.27 Yen 92.20 Yen 98.74 Yen 103.18 Yen 121.74 Yen 128.96 Performance Briefings 1Q of Fiscal Year March, 2014 0.0 - July 31, 2013 -9- Financial Position （Yen billions） March End, 2013 June End, 2013 (Ref. June End, 2012) Change 1,169.6 1,224.0 54.4 1,047 Total Liability 589.0 615.0 26.0 562 Stockholders's Equity 561.2 588.7 27.5 471 (comprehensive income) (159.0) (127.0) 32.0 (258) Stockholders's Equity ratio 48.0% 48.1% +0.1pt 45.0% Cash and Cash equivalents(*1) 223.5 244.8 21.3 171 Interest-bearing Debt(*2) 295.6 304.4 8.8 281 Net Cash(*3) (72.1) (59.6) 12.5 (110) Total Asset *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 FY March 2013 1Q Results FY March 2014 1Q Results Capital Expenditures 23.9 14.4 (9.5) Depreciation and amotization 17.9 20.7 2.8 （Yen billions） Copyright© 2013 TDK Corporation. All rights reserved. Change Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 10 - Full Year Projections of FY March 2014 (Yen billions） FY March 2013 Full Year Results FY March 2014 Full Year Projections Change % Yen billions 851.6 930.0 78.4 9.2 21.6 30.0 8.4 38.9 2.5% 3.2% 0.7pt - 18.9 28.0 9.1 48.1 Net Income 1.2 13.0 11.8 983.3 Earning Per Share (JPY) 9.50 103.34 - - Net Sales Operating Income Operating Income Margin Income before income taxes ●No change in full year projections for FY March 2014 compared with that of April 26, 2013 ●Average yen exchange rates forecast from 2Q of FY March 2014 onward US$: ¥90 (same as previous assumption) EURO: ¥118 (same as previous assumption) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 11 - Recording Device Business Atsuo Kobayashi Executive Vice President Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 12 - Recording device business ●HDD market FY March 2013 (TDK’s estimation） : About 570 million units FY March 2014 (TDK’s forecast, same as previous forecast) : About 530 million units ●Shipment index Recording Device Sales (Left, including HDD Head (HGA) and HDD Suspention) HDD Head Shipment Index (Right) (Yen billions) 60 40 59.9 55.8 100 90 20 60.2 60.2 71 74 Projection 98 0 Forex $/¥ 57.6 (shipment index) 81 1Q 2Q 3Q 4Q 1Q 2Q 80.27 78.67 81.17 92.20 98.72 90.00 FY March 2013 Copyright© 2013 TDK Corporation. All rights reserved. 120 110 100 90 80 70 60 50 FY March 2014 Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 13 - Supplementary Data Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 14 - FY March 2014 Projections –Capex, Depreciation, R&D(Yen billions) Capital expenditure Depreciation R&D 120 99.7 100 80 85.6 78.6 73.0 77.3 79.9 77.9 84.0 60 52.6 52.6 53.9 11/3 12/3 13/3 57.0 40 20 0 11/3 12/3 13/3 14/3 Projections Copyright© 2013 TDK Corporation. All rights reserved. 11/3 12/3 13/3 14/3 Projections Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 14/3 Projections - 15 - Quarterly sales and operating income by segment FY March 2013 Yen billions Net Sales Capacitors 31.4 29.2 3Q 26.6 Inductive Devices 28.2 29.6 30.6 31.2 119.6 35.0 Other Passive Components 31.8 31.7 36.0 42.5 142.1 48.3 91.5 90.6 93.1 104.4 379.6 117.0 Recording Devices 59.9 55.8 60.2 57.6 233.5 60.2 Other Magnetic Application Products 28.3 27.6 24.0 24.5 104.4 26.0 Magnetic Application Products 88.2 83.4 84.2 82.1 337.9 86.2 Film Application Products 23.2 27.7 33.0 28.6 112.6 28.6 5.8 5.2 5.0 5.4 21.4 4.7 208.7 207.0 215.4 220.5 851.6 236.5 Passive Components -2.9 -2.5 -1.8 -3.9 -11.1 2.8 Magnetic Application Products 14.6 13.2 7.5 1.8 37.1 4.6 Film Application Products 2.1 5.0 3.6 1.7 12.4 1.6 Other -0.4 -0.5 -0.6 -0.3 -1.8 -0.8 Sub-total 13.4 15.2 8.8 -0.8 36.7 8.2 Corporate and Eliminations -4.2 -4.1 -3.7 -3.0 -15.0 -4.2 9.2 11.2 5.1 -3.8 21.6 4.0 Passive Components Other Total Operating Income Total Ex-rate ￥/USD ￥ /EURO 1Q 2Q FY March 2014 4Q 30.7 Total 118.0 1Q 3Q 4Q Total 33.7 80.27 78.67 81.17 92.20 83.03 98.74 103.18 98.28 105.28 121.74 107.05 128.96 Copyright© 2013 TDK Corporation. All rights reserved. 2Q Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 16 - Cash Flow FY March 2013 1Q Results (Yen billions） FY March 2014 1Q Results Remarks Decreased 1.3 billion yen Operating Cash Flow 21.5 22.8 <Increase factor> Increase in depreciation: 2.9 billion yen Decrease in inventory: 6.3 billion yen <Decrease factor> Decrease in net income: 4.0 billion yen Decreased 4.3 billion yen Investing Cash Flow (20.3) (16.0) 1.2 6.8 Free Cash Flow <Increase factor> ・Increase in purchase of short-term investments: 5.6 billion yen ・Decrease in proceeds from sales of assets: 2.6 billion yen <Decrease factor> ・Decrease in capital expenditure: 9.5 billion yen ・Increase in proceeds from sale and maturity of short-term investments: 3.0 billion yen Increased 5.6 billion yen Decreased 1.7 billion yen Financing Cash Flow 4.4 Effect of exchange rate chagens on cash and cash equivalents (6.8) Cash and Cash Equivalents 2.7 <Increase factor> ・Increase in proceeds from long-term debt: 12.0 billion yen <Decrease factor> ・Decrease in short-term debt: 16.8 billion yen 165.7 Copyright© 2013 TDK Corporation. All rights reserved. 10.0 233.1 Increased 16.8 billion yen Increased 67.4 billion Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 17 - Annual Sales by applications Copyright© 2013 TDK Corporation. All rights reserved. (FY2009/Mar – FY2013/Mar) Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 18 - Passive Components Business Annual sales by applications (FY2009/Mar –FY2013/Mar) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 19 - Quarterly sales by applications (1Q of FY March 2013 –1Q of FY March 2014) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 20 - Passive Components Business quarterly sales by applications (1Q of FY March 2013 –1Q of FY March 2014) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 21 - Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 22 - Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 23 - 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. 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© 2013 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2014 July 31, 2013 - 24 - Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2014/1q_1.htm