Performance Briefings 1Q of Fiscal Year March, 2013 TDK Corporation July 31, 2012 Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -1- ◆Consolidated 1Q Results of FY March, 2013 Takakazu Momozuka Corporate Officer, General Manager of Finance & Accounting Department ◆Recording Device Business Shigenao Ishiguro General Manager of Data Storage & Thin Film Technology Components BG Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -2- Consolidated 1Q Results of FY March, 2013 Takakazu Momozuka Corporate Officer, General Manager of Finance & Accounting Department Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -3- Consolidated 1Q results of FY March 2013 (Yen billions） FY March 2012 1Q Results FY March 2013 1Q Results Change Yen billions % 206.2 208.7 2.5 1.2 6.0 9.2 3.2 53.8 Operating Income Margin 2.9% 4.4% 1.5pt Income from Continuing Operations before Income Taxes 3.7 8.8 5.2 139.4 Net Income 2.4 4.5 2.0 84.5 18.78 35.52 Net Sales Operating Income Earning Per Share (JPY) Ex-rate US$ EURO Ex-rate impact to Net sales & Operating Income Yen 81.74 Yen 117.62 Yen 80.27 Yen 103.18 - - - Appreciation by 1.8% Appreciation by 12.3% Net sales：Lowered about 5.2 billion Yen Operating income：Lowered about 0.8 billion Yen ※Discontinued operation (Display business) were deducted in above results Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -4- Features in 1Q results of FY March 2013 ◆Consolidated sales increased 1.2%, operating income increased 53.8% ・Market of consumer products and communication products was below our expectations ・Market of automobiles was steady as our expectations ・Increasing trend in profitability on quarterly basis ◆Steady progress in restructuring for profitability improvement ●Quarterly sales and operating income results Sales Operating Income (Yen billions) 250.0 200.0 6.0 8.5 9.2 7.4 (Yen billions) 10.0 7.5 5.0 150.0 100.0 2.5 0.0 -2.5 -5.0 -3.2 50.0 0.0 Forex $/¥ 1Q 2Q 3Q 4Q 1Q 81.74 77.96 77.35 79.27 80.27 FY March 2012 ※Discontinued operation (Display business) were deducted in above results Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 FY March 2013 July 31, 2012 -5- Breakdown of Operating Income Changes 1Q of FY 2012 6.0 billion yen 1Q of FY 2013 9.2 billion yen Operating income : +3.2 Decrease in negative impact by earthquake +3.0 billion yen Decrease in negative impact by change of pension plan +3.1 Changes in sales (including utilization, products mix -2.3 6.0 billion yen Sales price reduction -7.7 Copyright© 2012 TDK Corporation. All rights reserved. Restructuring effect +2.5 9.2 billion yen SG&A expenses decrease (including decrease in restructuring cost by 0.4 billion) +1.3 Rationalization, cost reduction +4.0 Exchange fluctuation （US$=Yen 80.27) -0.8 Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -6- Segment Information (FY2012 1Q vs.FY2013 1Q, FY2012 4Q vs. FY2013 1Q) YoY Change （Ｃ）－（Ａ） QoQ Change （Ｃ）－（Ｂ） 1Q of FY 2012 Apr 1- Jun 30, 2011 （Ａ） 4Q of FY 2012 Jan 1- Mar 31, 2012 （C） Capacitor 36.1 31.6 31.4 (4.7) -12.9 (0.2) -0.6 Inductive Device 32.9 28.4 28.2 (4.7) -14.2 (0.2) -0.7 Other Passive Comp 32.8 30.5 31.8 0.9 -2.8 1.3 4.3 101.7 90.5 91.5 (10.2) -10.1 1.0 1.1 55.2 24.4 79.6 18.0 6.9 206.2 58.2 29.7 87.8 24.2 4.6 207.0 59.9 28.3 88.2 23.2 5.8 208.7 4.7 8.5 1.7 2.9 3.9 16.0 (1.4) -4.7 8.6 10.8 0.4 0.5 5.2 28.9 (1.0) -4.1 (1.1) -16.1 1.2 26.1 1.2 1.7 0.8 Passive Components 3.8 -13.2 -2.9 (6.6) - 10.3 - Magnetic Application Products 8.6 1.2 -0.4 13.2 -7.2 6.0 14.0 -0.5 -2.6 -2.3 -0.9 -3.2 14.6 2.1 -0.4 13.4 -4.2 9.2 6.0 69.9 0.6 4.3 0.9 72.1 2.6 - 0.0 - 2.2 - 0.2 1.5 15.7 - 3.0 - (3.3) - 3.2 53.8 12.4 - 2.9% -1.5% 4.4% 1.5pt 5.9pt - JPY billion Net Sales Passive Components Recording Divices Other Magnetic Application Products Magnetic Application Products Film Application Products Other Total Operating Income Film Application Products Other Sub total Corporate and Eliminations Total Operating Income margin Ex- US$ rate EURO 1Q of FY 2013 Apr 1- Jun 30, 2012 （C） Yen 81.74 Yen 79.27 Yen 80.27 Yen 117.62 Yen 103.94 Yen 103.18 Copyright© 2012 TDK Corporation. All rights reserved. Yen billions 2.5 % Yen billions - % ※Discontinued operation (Display business) were deducted in above results Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -7- FY March 2013 Projections FY2013 FY2013 FY2012 (April 1, 2012 March 31, 2013) (April 1, 2012 March 31, 2013) (April 1, 2011 March 31, 2012) Forecast in July'12 (Yen millions) Forecast in April'12 (Yen millions) (Yen millions) (Yen millions) 900,000 57,000 53,000 40,000 85,000 82,000 53,000 900,000 57,000 53,000 40,000 85,000 82,000 53,000 814,497 18,687 12,245 (2,454) 99,653 79,918 52,551 85,503 38,313 40,755 42,454 (14,653) 2,082 449 Term Item Net Sales Operating Income Income before income taxes Net income attributable to TDK Capital expenditures Depreciation and amortization Research and development vs FY2012 Changes Actual % 10.5 205.0 332.8 -14.7 2.6 0.9 ●No change in full year projections for FY March 2013 compared with that of April 27, 2012. ●Average yen exchange rates forecast from 2Q of FY March 2013 onward US$: ¥77 (same as previous assumption) EURO: ¥95 (previous assumption : ¥103) Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -8- Recording Device Business Shigenao Ishiguro General Manager of Data Storage & Thin Film Technology Components BG Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 -9- Recording device business ●HDD market FY March 2013 (TDK’s forecast as of April-end) : About 700 million units FY March 2013 (TDK’s forecast as of July-end) : About 660 million units ●Shipment index Recording Device Sales (Left, including HDD Head (HGA) and HDD Suspention) HDD Head Shipment Index (Right) Projection (Yen billions) 60.0 40.0 100 55.2 110 104 53.3 84 109 109 58.2 59.9 58.2 42.0 20.0 0.0 Forex $/¥ 1Q 2Q 3Q 4Q 1Q 2Q 81.74 77.96 77.35 79.27 80.27 77.00 FY March 2012 Copyright© 2012 TDK Corporation. All rights reserved. (shipment index) 120 110 100 90 80 70 60 50 Forex assumption FY March 2013 Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 10 - Supplementary Data Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 11 - Quarterly sales and operating income by segment FY March 2012 Yen billions Net Sales Capacitors 36.1 34.2 3Q 30.6 Inductive Devices 32.9 31.4 28.6 28.4 121.2 28.2 Other Passive Components 32.8 34.4 30.4 30.5 128.0 31.8 101.7 99.9 89.5 90.5 381.6 91.5 Recording Devices 55.2 53.3 42.0 58.2 208.7 59.9 Other Magnetic Application Products 24.4 27.7 26.0 29.7 107.7 28.3 Magnetic Application Products 79.6 81.0 68.0 87.8 316.4 88.2 Film Application Products 18.0 22.4 28.2 24.2 92.7 23.2 6.7 6.6 5.7 4.6 23.8 5.8 206.2 209.9 191.3 207.0 814.5 208.7 Passive Components 3.8 1.3 1.5 -13.2 -6.6 -2.9 Magnetic Application Products 8.6 9.5 7.0 14.0 39.0 14.6 Film Application Products 1.2 2.6 2.9 -0.5 6.3 2.1 Other -0.4 -1.2 -0.7 -2.6 -4.8 -0.4 Sub-total 13.2 12.2 10.7 -2.3 33.8 13.4 Corporate and Eliminations -7.2 -3.7 -3.4 -0.9 -15.1 -4.2 6.0 8.5 7.4 -3.2 18.7 9.2 81.74 77.96 77.35 79.27 79.07 80.27 117.62 110.42 104.30 103.94 109.06 103.18 Passive Components Other Total Operating Income Total Ex-rate ￥/USD ￥/EURO 1Q 2Q FY March 2013 4Q 31.6 Total 132.4 1Q 2Q 3Q 4Q Total 31.4 ※Discontinued operation (Display business) were deducted in above results Copyright© 2012 TDK Corporation. 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Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 12 - Quarterly sales by applications (1Q of FY2012 –1Q FY2013) ＜Quarterly sales by applications＞ 25.8% 23.6% 22.6% 20.7% 20.4% 12.9% 14.3% 17.2% 18.4% 17.5% 14.7% 15.5% 15.2% 14.3% 18.0% 46.6% 46.5% 42.2% 45.7% 47.8% 1Q of FY2012 2Q of FY2012 3Q of FY2012 4Q of FY2012 1Q of FY2013 Industrial Equipment and Others Car Electronics Communication Products Consumer Products ＜Quarterly sales by applications (JPY billion)＞ 1Q of FY March 2013 breakdown by applications Net sales 208.7 billion yen Consumer Products 96.0 97.7 94.6 Communication Products 99.8 30.4 32.6 34.4 31.5 29.8 80.8 42.6 20.4% 36.5 17.5% Yen billions 99.8 47.8% 29.8 14.3% 1Q of FY20 12 2 Q of FY2012 3Q of FY2 012 4Q of FY201 2 1Q of FY2013 1Q of FY2012 2Q of FY2012 3Q of FY2012 4Q of FY2012 1Q of FY2013 Car Electronics Sales of 59.9 bn yen of recording device included 38.1 26.6 30.0 Industrial Equipment and Others 36.5 32.9 53.2 49.6 43.3 42.8 42.6 3Q of FY2012 4Q of FY2012 1Q of FY2013 Consumer Products Communication Products Car Electronics Industrial Equipment and Others 1Q of FY2012 2Q of FY2012 3Q of FY2012 4Q of FY2012 1Q of FY2013 ※Discontinued operation (Display business) were deducted in above results Copyright© 2012 TDK Corporation. All rights reserved. 1Q of FY2012 Performance Briefings 1Q of Fiscal Year March, 2013 2Q of FY2012 July 31, 2012 - 13 - Financial position （JPY billion） March End, 2012 June End, 2012 Change 1,072.8 1,046.5 -26.3 Total Liability 560.8 561.8 1.0 Interest-bearing Debt 272.8 280.7 7.9 Stockholders's Equity 498.2 470.7 -27.5 (comprehensive income) -230.8 -257.8 -27.0 Stockholders's Equity ratio 46.4% 45.0% -1.4pt Total Asset Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 14 - FY March2013 Projections –Capex, Depreciation, R&D(JPY billion) Capital expenditure Depreciation R&D 120 99.7 100 85.0 78.6 80 83.8 77.6 79.9 82.0 64.4 53.9 60 53 52.6 53.0 40 20 0 10/3 11/3 12/3 13/3 Projections Copyright© 2012 TDK Corporation. All rights reserved. 10/3 11/3 12/3 13/3 Projections 10/3 Performance Briefings 1Q of Fiscal Year March, 2013 11/3 12/3 July 31, 2012 13/3 Projections - 15 - FY March 2013 projections - Dividend JPY Dividend 100 90 57.2 80 80 60 % Payout ratio 80 60 Projections 40 60 28.3 40 22.8 20 20 0 0 2010/3 Copyright© 2012 TDK Corporation. All rights reserved. 2011/3 2012/3 Performance Briefings 1Q of Fiscal Year March, 2013 2013/3 July 31, 2012 - 16 - Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 17 - Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 18 - Reference information regarding segment reclassification Since FY March 2012 (=previous fiscal year), TDK has had three reporting segments— Passive Components, Magnetic Application Products and Film Application Products— as well as Other, which includes products not included in these three reporting segments. Previous segment Previous Classification Constituent Main Business Passive Components Ceramic capacitors, Aluminum electrolytic capacitors, Film capacitors, Inductive devices (Coils/Ferrite cores/Transformers), High-frequency devices, Piezoelectric material products, Circuit protection components, Sensors Magnetic Application Recording devices, Power supplies, Magnets, Recording media Products Other Energy devices (rechargeable batteries), Mechatronics (production equipments), other Reporting segement ＋ Other Current segment New Classification Passive Components* Constituent Main Business Ceramic capacitors, Aluminum electrolytic capacitors, Film capacitors, Inductive devices (Coils/Ferrite cores/Transformers), High-frequency devices, Piezoelectric material products, Circuit protection components, Sensors Recording devices, Power supplies, Magnets Magnetic Application Products Film Application Products Energy devices (rechargeable batteries), Applied films (former recording media) Other Mechatronics (production equipments), other Reporting segment ＋ Other Recording media, which belonged to the Magnetic Application Products Segment, has been renamed applied films due to the termination of some products and acquisition of a battery separators business, which has resulted in the main products being functional film products. This is now shown as a new reporting segment Film Application Products effective from fiscal 2012, and also includes energy devices which have similar core technologies and markets. Energy devices previously belonged to Other. Copyright© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 19 - 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© 2012 TDK Corporation. All rights reserved. Performance Briefings 1Q of Fiscal Year March, 2013 July 31, 2012 - 20 - Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2013/1q_1.htm