Slide 1: Full Year Performance Briefing
Fiscal Year March 2023 Full Year Performance Briefing TDK Corporation IR&SR Group April 28, 2023
Slide 2: Index
Index 1 Fiscal 2023 Results Highlights Tetsuji Yamanishi, Executive Vice President 2 Fiscal 2024 Projections Noboru Saito, President & CEO 3 Appendix © TDK Corporation 2023 FY2023 Full Year Performance Briefing IR&SR Group, April 28, 2023 2
Slide 3: Fiscal 2023 Results Highlights
Fiscal 2023 Results Highlights Tetsuji Yamanishi Executive Vice President © TDK Corporation 2023 FY2023 Full Year Performance Briefing IR&SR Group, April 28, 2023 3
Slide 4: Fiscal 2023 key points
Fiscal 2023 key points • Amid sluggish demand in the ICT market, both net sales and operating profit reached new record highs on the back of automobile- and industrial equipment-related demand*. Net sales (JPY bn) Operating profit (JPY bn) 2,180.8 168.8 Up 14.7 ％ YoY Up 1.2 ％ YoY • While production
Slide 5: Fiscal 2023 results
Fiscal 2023 results • Net sales and Operating profit increased year on year. • One-time expenses: -47.7 bn JPY in restructuring costs, +12.0 bn JPY in related retirement benefits Change ▍Ex-rate impact to net sales, FY2022 FY2023 operating profit (OP) (JPY bn) (JPY bn) JPY bn % Net sales Approx. +29
Slide 6: Passive Components segment
Passive Components segment • Both net sales and profit significantly increased year on year as sales to the automotive market remained brisk, especially those related to xEVs. ▍Net sales +13.4% (JPY bn) 507.8 575.9 • Sales and profit increased year on year. 200 Ceramic 152.7 capacitors • Sales incre
Slide 7: Sensor Application Products segment
Sensor Application Products segment • Sales and profit increased year on year due to brisk sales mainly to the ICT market and a significant improvement in profitability. ▍Net sales +29.7% (JPY bn) • Sales increased to the automotive market and for home 60 130.8 169.5 Temperature and appliances. 50 4
Slide 8: Magnetic Application Products segment
Magnetic Application Products segment • Sales and profit decreased significantly on a year-on-year basis due to the impact of the rapid deterioration in the HDD market and the recording of restructuring costs. ▍Net sales (19.3)% (JPY bn) 248.4 200.6 HDD heads 70 60.6 65.4 64.0 and HDD • Sales and pr
Slide 9: Energy Application Products segment
Energy Application Products segment • In Energy Devices, soaring material prices and the deteriorating demand environment were countered by cost pass-through measures and rationalization measures. • Segment sales and profit increased year on year as the market related to power supplies for industria
Slide 10: Quarterly results by segment
Quarterly results by segment FY2022 FY2023 YoY (C)-(A) QoQ (C)-(B) (JPY bn) Q4(A) Q3(B) Q4(C) JPY bn % JPY bn % Capacitors 50.4 61.5 57.8 +7.3 +14.5% (3.7) (6.1)% Inductive Devices 45.8 50.1 46.3 +0.5 +1.0% (3.8) (7.6)% Other Passive Components 31.8 33.1 33.0 +1.2 +3.7% (0.1) (0.4)% Passive Componen
Slide 11: Analysis of change in operating profit
Analysis of change in operating profit • Operating profit increased year on year despite the recording of restructuring costs amounting to 47.7 bn JPY in response to the rapid changes in the market environment. (JPY bn) Operating profit +2.1 SG&A expenses Benefits from Rationalization, decrease One-
Slide 12: Fiscal 2024 Projections
Fiscal 2024 Projections Noboru Saito President & CEO © TDK Corporation 2023 FY2023 Full Year Performance Briefing IR&SR Group, April 28, 2023 12
Slide 13: Fiscal 2024 Projections
Fiscal 2024 Projections FY2023 FY2024 Change (JPY bn) Actual Projections JPY bn % Net sales 2,180.8 2,020.0 (160.8) (7.4)% Operating profit 168.8 190.0 +21.2 +12.5% Operating profit margin 7.7% 9.4% +1.7pts - Profit before tax 167.2 188.0 +20.8 +12.4% Net profit 114.2 147.0 +32.8 +28.7% Earnings per
Slide 14: Forecast production trend in key markets
Forecast production trend in key markets • The ICT market is on the way to recovery while the xEV market is expected to expand. FY2023 FY2024 YoY (Unit mn) Actual Forecast Automobile* 84 88 +5% xEV 17.2 21.9 +27% Smartphone 1,143 1,118 (2)% 5G Smartphone 593 607 +2% HDD 153 146 (5)% Nearline 55 60 +
Slide 15: Capex, Depreciation, R&D
Capex, Depreciation, R&D Capex Depreciation R&D (JPY bn) 350 300 291.3 275.7 260.0 250 212.2 200 206.3 173.6 173.4 177.0 185.0 179.5 180.0 165.3 150 148.4 125.0 127.4 106.6 115.2 117.5 100 50 0 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 FY19 FY20 FY21 FY22 FY23 FY24 Projection Proje
Slide 16: Cash flows
Cash flows • Operating cash flow increased on the back of profitability improvement mainly in Passive Components and Sensor Application Products. • Free cash flow is expected to be 80.0 bn JPY for FY2024 due to a decline in investment in Energy Application Products. (JPY bn) Operating cash flow Inve
Slide 17: Shareholder returns
Shareholder returns (JPY) Dividends * Dividend payout ratio 80.0 120 116.0 70.0 106.0 100 60.0 78.3 80 60.0 50.0 39.3% 60.0 35.2% 40.0 60 53.3 30.4% 29.9% 24.6% 30.0 22.6% 40 20.0 20 10.0 0 0.0 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Projection Projection IFRS * Dividends are calculated on the bas
Slide 18: Projections by segment
Projections by segment • Sales are expected to increase year on year in three segments excluding Energy Application Products. FY2023 FY2024 Factors (JPY bn)) Actual Projections (YoY) • Sales of ceramic capacitors and film capacitors, which are for automobile applications, are expected to increase. P
Slide 19: Progress Report on Medium-Term Plan - Value Creation 2023
Progress Report on Medium-Term Plan - Value Creation 2023 - © TDK Corporation 2023 FY2023 Full Year Performance Briefing IR&SR Group, April 28, 2023 19
Slide 20: Value Creation 2023: Progress overview
Value Creation 2023: Progress overview • Diversification of revenue sources has progressed as the Passive Components growth and Sensor Application Products turned profitable. • Determined to make investments to boost capacity of brisk demand products such as Passive Components and TMR sensors. • Res
Slide 21: Capital allocation plan
Capital allocation plan • Investment in Energy Application Products was reduced as the commencement of the JVs in medium capacity rechargeable batteries. • Increase of investment in Passive Components, such as ceramic capacitors for automobile applications, and Sensor Application Products, such as T
Slide 22: Growth strategies: medium capacity rechargeable batteries
Growth strategies: medium capacity rechargeable batteries • Commence production at the new manufacturing Aim to attain global No.1 position by combining the strengths of two companies site as planned. Approx. 500 bn JPY in net sales* by 2030 ▍ New manufacturing site *TDK Group consolidation in Xiame
Slide 23: Growth strategies: Sensor Application Products and Passive Components
Growth strategies: Sensor Application Products and Passive Components • Make active investments to increase capacity of products for which brisk demand increase is expected. ▍Expansion plan for TMR sensors ▍Expansion plan for ceramic capacitors for automobile applications Double production capacity
Slide 24: ESG initiatives
ESG initiatives ▍Key progress updates EX • Certification application submitted to SBTi in September 2022. Effective use of energy and expanded use of renewable • Joined RE100 in December 2022. energy toward the realization of net zero CO2 emissions • RE 50% is expected to be achieved by the end of 2
Slide 25: Appendix
Appendix © TDK Corporation 2023 FY2023 Full Year Performance Briefing IR&SR Group, April 28, 2023 25
Slide 26: Quarterly sales and operating profit by segment
Quarterly sales and operating profit by segment FY2022 FY2023 (JPY bn) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Capacitors 47.1 49.8 50.8 50.4 198.1 57.6 62.9 61.5 57.8 239.7 Inductive Devices 42.1 45.3 47.0 45.8 180.2 49.3 52.8 50.1 46.3 198.5 Other Passive Components 32.5 32.9 32.2 31.8 129.4 34.7 37.0
Slide 27: Status of inclusion in the ESG Index / Recognition by investors and rating agencies
Status of inclusion in the ESG Index / Recognition by investors and rating agencies ▍Index Funds ▍Ratings S&P / JPX Carbon Efficient Index FTSE4Good Index Series An index was designed to measure the performance of companies in the Tokyo Stock Price Index (TOPIX) while An index provided by FTSE Russe
Slide 28: Financial position
Financial position Change vs. FY2022 FY2021 FY2022 FY2023 (JPY bn) (JPY bn) Total assets 2,359.7 3,041.7 3,147.0 +105.4 Total liabilities 1,398.0 1,737.9 1,684.2 (53.7) Total equity attributable to owners of parent 958.9 1,300.3 1,458.4 +158.1 Ratio of equity attributable to owners of parent 40.6% 4
Slide 29: Annual sales by market (FY2019 – FY2023) Group
Annual sales by market (FY2019 – FY2023) Group ▍Net sales ▍Automotive ▍ICT (JPY bn) 2,500 (JPY bn) (JPY bn) 2,180.8 418.7 1,207.6 1,142.5 2,000 1,902.1 400 330.4 1,200 1,000 913.7 1,381.8 1,479.0 253.7 245.3 248.6 821.6 1,500 1,363.0 300 809.8 800 1,000 200 600 400 500 100 200 0 0 0 FY19 FY20 FY21 F
Slide 30: Quarterly sales by market (FY2022 – FY2023) Group
Quarterly sales by market (FY2022 – FY2023) Group ▍Net sales ▍Automotive ▍ICT (JPY bn) (JPY bn) (JPY bn) 611.5 587.0 600 120 111.1 109.2 400 357.4 508.3 510.5 102.8 474.1 499.7 334.5 471.9 95.6 350 305.7 302.8 500 420.1 100 81.1 82.4 87.7 289.1 280.4 79.3 300 244.9 235.2 400 80 250 300 60 200 150 20
Slide 31: Annual sales by market Passive Components
Annual sales by market (FY2019 – FY2023) Passive Components ▍Net sales ▍Automotive ▍ICT (JPY bn) 600 575.9 (JPY bn) (JPY bn) 507.8 150 500 255.5 433.4 407.1 250 395.5 211.8 400 200 168.8 168.7 172.1 100 76.3 75.7 78.8 81.5 300 150 72.3 200 100 50 100 50 0 0 0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21
Slide 32: Quarterly sales by market Passive Components
Quarterly sales by market (FY2022 – FY2023) Passive Components ▍Net sales ▍Automotive ▍ICT (JPY bn) 152.7 (JPY bn) (JPY bn) 150 141.6 144.6 137.0 130.0 128.0 121.8 128.0 66.0 65.6 63.4 60.6 60 30 52.5 52.2 52.7 54.3 100 21.9 21.4 21.0 19.9 19.6 40 20 18.2 18.1 13.7 50 20 10 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 33: Annual sales by market Sensor Application Products
Annual sales by market (FY2019 – FY2023) Sensor Application Products ▍Net sales ▍Automotive ▍ICT (JPY bn) 169.5 (JPY bn) (JPY bn) 80 80 72.5 150 130.8 61.2 56.1 60 60 46.2 100 76.5 77.9 81.3 39.2 40 36.4 34.4 40 25.8 17.4 20.6 50 20 20 0 0 0 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19 FY2
Slide 34: Quarterly sales by market Sensor Application Products
Quarterly sales by market (FY2022 – FY2023) Sensor Application Products ▍Net sales ▍Automotive ▍ICT (JPY bn) 50 45.9 45.6 (JPY bn) (JPY bn) 30 39.0 39.0 20 40 36.1 35.1 16.3 32.7 15.2 16.0 25 21.7 20.9 15 13.7 30 26.8 12.6 20 10.8 11.3 11.5 17.0 15.5 15.1 14.9 14.0 10 15 20 9.7 10 10 5 5 0 0 0 Q1 Q2
Slide 35: Financial information: 10-year historical trend
Financial information: 10-year historical trend ▍Net sales, Overseas sales ratio ▍Operating profit, Net profit, OP margin (JPY mn) Net sales Overseas sales ratio (JPY mn) Operating profit Net profit (loss) OP margin 91.9% 208,660 2,500,000 90.5% 91.4% 92.1% 91.1% 91.1% 91.8% 91.9% 92.1% 92.2% 2,180,
Slide 36: Financial information: 10-year historical trend
Financial information: 10-year historical trend ▍Total assets, Total equity attributable to owners of parent, Ratio of equity attributable to owners of parent ▍ROI, ROE, ROA Total assets Total equity attributable to owners of parent (JPY mn) Ratio of equity attributable to owners of parent ROI ROE R
Slide 37: Cautionary statements with respect to forward-looking statements
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
Slide 38: Text data including Q&A of performance briefing will be uploaded
Text data including Q&A of performance briefing will be uploaded on following site. https://www.tdk.com/en/ir/ir_events/conference/2023/4q_1.html