TDK Corporation · TSE:6762

TDK — H1 FY March 2014 Earnings Presentation

36 slides from TDK's earnings presentation, Oct 31, 2013

  1. Slide 1: Performance Briefings First Half of Fiscal Year March, 2014

    Performance Briefings First Half of Fiscal Year March, 2014 TDK Corporation October 31, 2013 Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 -1-

  2. Slide 2: Agenda

    ◆Consolidated First Half Results of FY March, 2014 Consolidated Full Year Projections of FY March, 2014 Takehiro Kamigama, President and CEO ◆Consolidated 2Q Results of FY March, 2014 Takakazu Momozuka, Corporate Officer ◆Magnetic Application Products Business and Film Application Products Business

  3. Slide 3: Consolidated First Half Results and Full Year Projections

    Consolidated First Half Results of FY March, 2014 Consolidated Full Year Projections of FY March, 2014 Takehiro Kamigama President and CEO Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 -3-

  4. Slide 4: Consolidated First Half Results of FY March, 2014

    Consolidated First Half Results of FY March, 2014 FY March 2013 FY March 2014 Change Results through 2Q Results through 2Q (Yen billions） (2012.4.1-2012.9.30) (2013.4.1-2013.9.30) Yen billions % Net Sales 412.0 484.7 72.7 17.6 Operating Income 20.3 16.8 (3.5) -17.2 Operating Income Margin 4.9% 3.5%

  5. Slide 5: Basic Strategy

    Basic Strategy ◆FY March 2013: Completed restructuring centered on passive components ◆FY March 2014: Optimize business portfolio and production bases Expect to complete large-scale restructuring during FY March 2014 ◆Basic Policy for Each Business Segment TDK has positioned this business as the cen

  6. Slide 6: Operating results

    Operating results (Yen billions) OP (Left) Sales (Right) (Yen billions) 25 250 20 200 15 150 Earthquake 10 Thai Flooding 100 5 Lehman shock 50 0 １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Ｑ ２Ｑ 3Q -5 0 09/3 10/3 11/3 12/3 13/3 14/3 -60.0 Restructuring Restructuring Copyright© 2013 T

  7. Slide 7: FY March 2014 1H Segment Highlights

    FY March 2014 1H Segment Highlights Brackets show year-on-year change ◆ Passive Components : Net sales 236.4 billion yen (up 29.8%), operating income 9.0 billion yen (compared with 5.4 billion yen operating loss in FY March 2013 1H) -Ceramic capacitors returned to profitability -High-frequency compo

  8. Slide 8: Full Year Projections of FY March 2014

    Full Year Projections of FY March 2014 FY March 2013 FY March 2014 Change (Yen billions） Full Year Results Full Year Projections Yen billions % Net Sales 844.2 930.0 85.8 10.2 Operating Income 21.7 30.0 8.3 38.2 Operating Income Margin 2.6% 3.2% 0.6pt - Income before income taxes 19.2 28.0 8.8 45.8

  9. Slide 9: Dividends Forecast of FY March 2014

    Dividends Forecast of FY March 2014 TDK keeps initial dividends forecast (on April 26) unchanged. ‹Dividend forecast per a common share Interim dividend 30 yen Year-end dividend 40 yen (forecast) Annual dividend 70 yen (forecast) Copyright© 2013 TDK Corporation. All rights reserved. Performance Brie

  10. Slide 10: Consolidated 2Q Results of FY March, 2014

    Consolidated 2Q Results of FY March, 2014 Takakazu Momozuka Corporate Officer Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 10 -

  11. Slide 11: Consolidated 2Q Results of FY March, 2014

    Consolidated 2Q Results of FY March, 2014 FY March 2013 FY March 2014 Change 2Q Results 2Q Results (Yen billions） (2012.7.1-2012.9.30) (2013.7.1-2013.9.30) Yen billions % Net Sales 205.0 249.8 44.8 21.9 Operating Income 11.1 12.4 1.3 11.7 Operating Income Margin 5.4% 5.0% (0.4pt) - Income from Conti

  12. Slide 12: Breakdown of Operating Income Changes (2Q)

    Breakdown of Operating Income Changes (2Q) (Yen billions) SG&A expenses Operating income : +1.3 decrease (including Proceed from restructuring insurance cost decrease of Thai flooding by 1.6) +1.4 -5.2 Benefits from Restructuring Rationalization, +1.8 cost reduction Sales price Changes in sales +4.4

  13. Slide 13: Restructuring Progress

    Restructuring Progress ■FY March 2014 Planned Restructuring Promote business Optimize portfolio review production bases ◇Exit non-core businesses ◇Further integrate bases worldwide ・Withdraw from LTO business (Planned for 2H) (Targeting bases not already announced (Planning to end production in 2H a

  14. Slide 14: Segment Information

    Segment Information YoY Change QoQ Change 2Q of FY 2013 1Q of FY 2014 2Q of FY 2014 （Ｃ）－（Ａ） （Ｃ）－（Ｂ） Jul 1- Sep 30, 2012 Apr 1- Jun 30, 2013 Jul 1- Sep 30, 2013 (Yen billions) （Ａ） （B） （C） Yen billions % Yen billions % Capacitor 29.2 33.7 35.1 5.9 20.2 1.4 4.2 Inductive Device 29.6 35.0 35.5 5.9 19.9

  15. Slide 15: Financial Position

    Financial Position March End, June End, Sep End, （Yen billions） Change 2013 2013 2013 Total Asset 1,169.6 1,224.0 1,220.7 (3.3) Total Liability 589.0 615.0 617.2 2.2 Stockholders's Equity 561.2 588.7 588.6 (0.1) (comprehensive income) (159.0) (127.0) (126.1) 0.9 Stockholders's Equity ratio 48.0% 48.

  16. Slide 16: Magnetic Application Products Business, Film Application Products Business

    Magnetic Application Products Business Film Application Products Business Atsuo Kobayashi Executive Vice President Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 16 -

  17. Slide 17: Magnetic Application Products Business: Recording Device

    Magnetic Application Products Business Recording Device ●HDD market FY March 2013 : About 570 million units (TDK’s estimation） FY March 2014 : About 540 million units (TDK’s forecast, increased by 10 million units from the forecast in July) ●Shipment index Recording Device Sales (Left, including HDD

  18. Slide 18: HDD Market Projections by Application

    Magnetic Application Products Business HDD Market Projections by Application (Configuration) Data Center ・Expect HDD numbers to be flat for next 2 to 3 years ・Change in applications within the HDD market →PC market is shrinking, while data center market is expanding ・HDDs used in data centers use ma

  19. Slide 19: Other Magnetic Application Products

    Magnetic Application Products Business Other Magnetic Application Products ●Magnet ・Market slow to recover (for HDDs and industrial equipment) ・Consolidated overseas production sites from 4Q to 1Q (Europe JV sites, China contract sites) ・Incurred one-time expenses associated with site consolidation

  20. Slide 20: Film Application Products Business

    Film Application Products Business Film Application Products LiB Market Projections by Product type(Configuration) (Battery cell q'ty for Consumer market) ●Energy Devices (Rechargeable Batteries) 100% ◇Business environment (Lithium 80% セラミック polymer batteries) 60% 9Lithium batteries account for 25-3

  21. Slide 21: Passive Components Business

    Passive Components Business Hiroyuki Uemura Executive Vice President Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 21 -

  22. Slide 22: Quarterly Performance of Passive Components Business

    Passive Components Business Quarterly Performance of Passive Components Business (Yen billions) (Yen billions) OP (Left) Sales (Right) 10 125 7.5 5 100 2.5 0 75 １Q ２Q ３Q ４Q １Q ２Q ３Q ４Q １Q ２Q -2.5 ・Consolidated -5 production sites Implemented restructuring actions 50 ・Reviewed unprofitable products ・

  23. Slide 23: Measures to Further Improve Profitability

    Passive Components ●Measures to Further Improve Profitability ◆Ceramic capacitors －Continue to bolster products for auto market ◆Inductive devices －Flexibly respond to customer requests with a full lineup of thin film, wire-wound coil and multi-layered products ◆High-frequency components －Aim to exp

  24. Slide 24: Supplementary Data

    Supplementary Data Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 24 -

  25. Slide 25: FY March 2014 Projections - Capex, Depreciation, R&D

    FY March 2014 Projections –Capex, Depreciation, R&D- TDK keeps initial projections (April. 26) unchanged. (Yen billions) Capital expenditure Depreciation R&D 120 99.7 100 85.6 84.0 78.6 77.3 79.9 77.9 80 73.0 60 57.0 52.6 52.6 53.9 40 20 0 11/3 12/3 13/3 14/3 11/3 12/3 13/3 14/3 11/3 12/3 13/3 14/3

  26. Slide 26: Quarterly sales and operating income by segment

    Quarterly sales and operating income by segment FY March 2013 FY March 2014 Yen billions 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Capacitors 31.4 29.2 26.6 30.7 118.0 33.7 35.1 Inductive Devices 28.2 29.6 30.6 31.2 119.6 35.0 35.5 Other Passive Components 31.8 31.7 36.0 42.5 142.1 48.3 48.8 Passive Compo

  27. Slide 27: Breakdown of Operating Income Changes (First half)

    Breakdown of Operating Income Changes (First half) Proceed from (Yen billions) Benefits from insurance Operating income : -3.5 Restructuring of Thai flooding +4.2 -5.4 Changes in sales -2.6 SG&A expenses 20.3 Rationalization, decrease Sales price cost reduction (including Reduction +6.9 restructurin

  28. Slide 28: Cash Flow

    Cash Flow FY March 2013 FY March 2014 First Half First Half Remarks (Yen billions） Results Results Increased 13.6 billion yen <Main increase factor> Increase in trade payables: 7.2 billion yen Increase in depreciation: 5.1billion yen Operating Decrease in inventory: 6.3 billion yen Cash Flow 43.7 57

  29. Slide 29: Annual Sales by applications (FY2009/Mar – FY2013/Mar)

    Annual Sales by applications (FY2009/Mar – FY2013/Mar) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 29 -

  30. Slide 30: Passive Components Business Annual sales by applications

    Passive Components Business Annual sales by applications (FY2009/Mar –FY2013/Mar) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 30 -

  31. Slide 31: Quarterly sales by applications

    Quarterly sales by applications (1Q of FY March 2013 –2Q of FY March 2014) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 31 -

  32. Slide 32: Passive Components Business quarterly sales by applications

    Passive Components Business quarterly sales by applications (1Q of FY March 2013 –2Q of FY March 2014) Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 32 -

  33. Slide 33: Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013

    Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 33 -

  34. Slide 34: Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013

    Copyright© 2013 TDK Corporation. All rights reserved. Performance Briefings First Half of Fiscal Year March, 2014 Oct 31, 2013 - 34 -

  35. Slide 35: 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 s

  36. Slide 36: Text data including Q&A will be uploaded

    Text data including Q&A of performance briefing will be uploaded on following site http://www.global.tdk.com/ir/ir_events/conference/2014/2q_1.htm

TDK — H1 FY March 2014 Earnings Presentation on 6ix