TDK Corporation · TSE:6762
TDK — H1 FY March 2020 Earnings Presentation
26 slides from TDK's earnings presentation, Oct 31, 2019
Slide 1: Performance Briefing First Half of Fiscal Year March 2020
Attracting Tomorrow &TDK Performance Briefing First Half of Fiscal Year March 2020 TDK Corporation Corporate Communications Group October 31, 2019
Slide 2: Consolidated results and full year projections
Attracting Tomorrow &TDIK eConsolidated Results for First Half of FY March 2020 Tetsuji Yamanishi, Senior Vice President eConsolidated Full Year Projections for FY March 2020 Shigenao Ishiguro, President and CEO
Slide 3: Introduction by Tetsuji Yamanishi
Hello, I’m Tetsuji Yamanishi, Senior Vice President of TDK. Thank you for taking the time to attend TDK’s performance briefing for the first half (April to September) of the fiscal year ending March 2020. I will be presenting an overview of our consolidated results.
Slide 4: Key points concerning earnings
First, let’s take a look at the key points concerning earnings. Going into the second quarter, trade tensions between the U.S. and China began to take full effect. Global economic deceleration continued, notably in China, and the impact on the real economy grew more serious. Our net sales for the fi
Slide 5: Overview of results
Moving along, I would like to present an overview of our results. Net sales were 707.0 billion yen, a decrease of 14.9 billion yen, or 2.1%, year on year. Operating income was 68.8 billion yen, up 6.6 billion yen, or 10.6% year on year. Income before income taxes was 68.6 billion yen, net income was
Slide 6: Business segment performance: Passive Components
Next, I would like to explain our business segment performance. From the fiscal year ending March 2020, we reclassified some Inductive Devices as Other Passive Components, which reduced sales of Inductive Devices for the first half of the fiscal year ended March 2019 by 4.5 billion yen and reduced o
Slide 7: Sensor Application Products segment
In the Sensor Application Products segment, net sales decreased 1.5% year on year to 38.9 billion yen, and the operating loss widened by 3.0 billion yen to 12.5 billion yen. This includes about 2.7 billion yen in acquisition-related costs for InvenSense, a decrease of 0.1 billion yen year on year. A
Slide 8: Magnetic Application Products segment
In the Magnetic Application Products segment, net sales declined 24.6% year on year to 110.0 billion yen, operating income increased by 52.3% to 6.7 billion yen, and the operating income margin was 6.1%. In HDD Heads, sales volumes decreased by around 13% year on year, mainly due to a decline in dem
Slide 9: Energy Application Products segment
In the Energy Application Products segment, net sales rose 13.5% year on year to 318.2 billion yen, and operating income surged 27.1% to 69.0 billion yen. Profitability also improved, with the operating income margin at 21.7%. In Rechargeable Batteries, sales to the Chinese smartphone market were le
Slide 10: Breakdown of change in operating income
Next is the breakdown of the change in operating income. Let's take a look at the main factors behind the increase of 6.6 billion yen in operating income. First, despite a reduction in income due to a decrease in sales of Passive Components, there was a positive impact of about 4.0 billion yen from
Slide 11: Second quarter consolidated results
Next, let’s look at consolidated results for the second quarter of the fiscal year ending March 2020. In the second quarter of the fiscal year ending March 2020, net sales fell 2.3% year on year to 370.2 billion yen, while operating income rose 19.3% to 43.9 billion yen, income before income taxes w
Slide 12: Changes in segment sales and operating income from first to second quarter
Next, I would like to explain the factors behind the changes in segment net sales and operating income from the first quarter to the second quarter of the fiscal year ending March 2020. Let’s begin with net sales in the Passive Components segment. Net sales in this segment increased by 3.6 billion y
Slide 13: Introduction by Shigenao Ishiguro
Hello, I'm Shigenao Ishiguro, President & CEO of TDK. Today, I'd like to go over our consolidated earnings forecast for the fiscal year ending March 2020.
Slide 14: Demand environment for the second half
Looking at the demand environment for the second half of the fiscal year ending March 2020, the global economic outlook remains uncertain and we do not believe we can expect a recovery in business conditions. In the industrial equipment market, there are signs of recovery in demand for semiconductor
Slide 15: Full-year earnings projections
Next, we come to our consolidated full-year earnings projections for the fiscal year ending March 2020. We have revised our sales forecasts downward from 1,420.0 billion yen at the start of the fiscal year by 30.0 billion yen to 1,390.0 billion yen. Demand trends have changed significantly from our
Slide 16: Supplementary Data
14. November 2019 Supplementary Data Attracting Tomorrow“ T DIK Performance Briefing First Half of Fiscal Year March 2020 © TDK Corps Corporate Communications Group + October 31 16
Slide 17: Quarterly sales and operating income by segment
Quarterly sales and operating income by segment Attracting Tomorrow &TDIK FY March 2020 (Yen billions) Capacitors} 445 43.9 427 423 | 173.3 39.3 39.6 Inductive Devices] 38.9 395 373) 343] 150.0| 341] 35.7 Other Passive Components| 29.3 28.7 26.7 25.3 | 110.1 24.8 26.6 ra Passive Components 112.7 112
Slide 18: FY March 2020 projections and forex sensitivity
FY March 2020 projections and forex sensitivity Attracting Tomorrow &TDIK (Yen billions) Capital expenditure R&D 250 200 178.6 1736 ae 167.6 150 100 50 FY16/3 FY17I3 FY183 FY19/9 FY203 -FY16/3.«~FY17/3.FY18/39. FY19/3 Projections Fy20/3-FY16I3.—FY17/3.«- FY16/3.- FY19/3_-FY20/3 Projections Projectio
Slide 19: Financial position
Financial position Attracting Tomorrow &@&TDK March End, June End, September End, Ch a ange (Yen billions) 2019 2019 2019 Total asset 1,992.5 2,017.4 Total liability 1,108.7 1,165.1 Stockholders's equity 877.3 846.1 (comprehensive income) (124.4) (161.3) Stockholders's equity ratio 44.0% 41.9% Cash
Slide 20: Cash flows
Cas h flows Attracting Tomorrow &TDIK FY March 2019 FY March 2020 YoY Results through 2@ | Results through 2@ change (Yen billions) Operating cash flow Investing cash flow Free cash flow Financing cash flow Effect of exchange rate changes on cash and cash equivalents 69.3 Cash and cash equivalents 2
Slide 21: Quarterly sales by applications
Quarterly sales by applications (1Q of FY March 2019 — 2Q of FY March 2020) ¥343.1bn ¥378.9bn ¥309.1bn ¥370.2bn 100% her = Others 80% = Industrial i Equipment etc. ICT (HOD Heads _— & Suspensions) mcr 20% = Automotive ox FY March 2019 ~ FY March 2020 (Yen bilions) Automotive (Yen ilions) ICT and ICT
Slide 22: Passive Components business quarterly sales by applications
Passive Components business quarterly sales by applications Attracting Tomorrow 4ST DIK (1Q of FY March 2019 — 2Q of FY March 2020) ¥112.7bn ¥112.1bn soos ¥106.7bn ¥101.9bn ¥98.3bn ¥101.9bn m Others 80% 29.8% = Industrial cox | Equipment etc. ict 17.0% 40% = Automotive 20% om + . 2a _ FY March 2019
Slide 23: Net sales, operating income, R&D and capital expenditures trends
Attracting Tomorrow &TDIK unnomyee) Net sales & overseas sales ratio ~ unctyay Ol net & operating ratio, gy 1400000 | se | ons | ons | oes | sos | mee | 808 | maa | oon [Mee “e 00 200000 asaass Sireser > me 1082,560 nan sama smasas no 160 saan sus oo soncm 74 = no om es 1 x00 1 ongoo | memes me me O
Slide 24: Total assets, equity, dividends, ROE and employees
Total assets, stockholders’ equity & stockholders’ equity ratio a a ee ee) Dividends per common share & payout ratio An i "= Dents pe omen share (en) mer 01) Ce en Attracting Tomorrow ROI*ROE*ROA PET non CRA = B3hoe a fon WEA A Prose PH PON Number of employees & overseas production ratio. &TDK Perfo
Slide 25: Cautionary statements with respect to forward-looking statements
Cautionary statements with respect to . Attracting Tomorrow &TDIK 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 Gr
Slide 26: TDI
TDI Text data including Q&A of performance briefing will be uploaded on following site. https:/www.tdk.com/corp/enir/ir_events/conference/2020/2q_1.htm