Slide 1: First Half Performance Briefing
Fiscal Year March 2024 First Half Performance Briefing TDK Corporation IR&SR Group November 1, 2023
Slide 2: Index
Index 1 H1, FY March 2024 Results Highlights Tetsuji Yamanishi, Executive Vice President 2 FY March 2024 Projections Noboru Saito, President & CEO 3 Appendix © TDK Corporation 2023 H1, FY March 2024 Performance Briefing IR&SR Group, November 1, 2023 2
Slide 3: H1, FY March 2024 Results Highlights
H1, FY March 2024 Results Highlights Tetsuji Yamanishi Executive Vice President © TDK Corporation 2023 H1, FY March 2024 Performance Briefing IR&SR Group, November 1, 2023 3
Slide 4: H1, FY March 2024 key points
H1, FY March 2024 key points • Both net sales and operating profit decreased year on year due to delays in the recovery of the industrial equipment and automotive markets in addition to the sluggish ICT and HDD markets. Net sales (JPY bn) Operating profit (JPY bn) 1059.7 85.5 Down 5.6 ％ YoY Down 28.
Slide 5: H1, FY March 2024 results
H1, FY March 2024 results • Net sales and Operating profit decreased year on year. FY3/23 FY3/24 Change ▍Exchange rate impact on net sales and operating profit (JPY bn) H1 H1 JPY bn % (OP) (JPY bn) Net sales Approx. +35.5 Net sales 1,122.0 1,059.7 (62.3) (5.6)% OP Approx. +13.4 Operating profit 120.
Slide 6: Passive Components segment
Passive Components segment • Sales and profit decreased year on year due to a decline in sales to the ICT and the industrial equipment markets despite an increase in sales to the automotive market. ▍Net sales (3.3)% (JPY bn) 200 295.9 H1 results 286.2 Ceramic • Sales increased while profit decreased
Slide 7: Sensor Application Products segment
Sensor Application Products segment • Sales increased and profit decreased year on year due to a decline in sales of MEMS sensors to the ICT market despite an increase in sales to the automotive market. ▍Net sales (JPY bn) +1.3% 60 84.9 H1 results 86.1 50 45.9 45.6 47.3 Temperature and • Sales and p
Slide 8: Magnetic Application Products segment
Magnetic Application Products segment • Sales and profit decreased year on year as sales to the HDD market remained significantly below the previous year’s level. ▍Net sales (JPY bn) (24.4)% 109.8 H1 results 83.1 HDD heads 70 and HDD 55.1 54.7 • Sales and profit decreased significantly year on year.
Slide 9: Energy Application Products segment
Energy Application Products segment • Profitability of rechargeable batteries improved despite a decrease in sales for smartphone applications. • Sales and profit increased year on year reflecting robust sales of power supplies to the industrial equipment market and for xEVs. ▍Net sales (JPY bn) (3.
Slide 10: Analysis of change in operating profit
Analysis of change in operating profit (JPY bn) Operating profit (34.8) Ex-rate fluctuation USD/JPY: 133.80 → 140.83 SG&A expenses Benefits from decrease Changes in sales Rationalization, restructuring H1, FY3/23 (incl. deterioration in cost reduction H1, FY3/24 operating rate and Selling price 120.
Slide 11: Q2, FY March 2024 results
Q2, FY March 2024 results • Net sales and Operating profit decreased year on year. FY3/23 FY3/24 Change ▍Exchange rate impact on net sales and operating profit (JPY bn) Q2 Q2 JPY bn % (OP) (JPY bn) Net sales 611.5 556.3 (55.2) (9.0)% Net sales Approx. +17.4 Operating profit 75.7 59.2 (16.5) (21.7)%
Slide 12: Quarterly results by segment
Quarterly results by segment FY3/23 FY3/24 FY3/24 YoY (C)-(A) QoQ (C)-(B) (JPY bn) Q2(A) Q1(B) Q2(C) JPY bn % JPY bn % Capacitors 63.7 62.5 62.6 (1.1) (1.7)% +0.1 +0.2% Inductive Devices 52.8 46.7 49.3 (3.5) (6.7)% +2.5 +5.4% Other Passive Components 37.0 31.5 33.5 (3.5) (9.4)% +2.1 +6.5% Passive Co
Slide 13: Cash flows – H1
Cash flows – H1 FY3/23 FY3/24 Change (JPY bn) H1 H1 Operating cash flow 55.3 204.6 +149.3 Investing cash flow (112.1) (98.5) +13.6 Free cash flow (56.9) 106.0 +162.9 Financing cash flow 28.2 (17.5) (45.8) Effects of ex-rate fluctuation 47.1 47.7 +0.7 Cash and cash equivalents 457.8 642.4 +184.6 ▍Ope
Slide 14: FY March 2024 Projections
FY March 2024 Projections Noboru Saito President & CEO © TDK Corporation 2023 H1, FY March 2024 Performance Briefing IR&SR Group, November 1, 2023 14
Slide 15: FY March 2024 projections
FY March 2024 projections • There are no changes to the projections made in Q1. FY3/23 FY3/24 Projection Change (YoY) Actual As of April 2023 As of August 2023 JPY bn % (JPY bn) Net sales 2,180.8 2,020.0 1,970.0 (210.8) (9.7)% Operating profit 168.8 190.0 150.0 (18.8) (11.2)% Operating profit margin
Slide 16: Assumptions for performance forecast - key market predictions
Assumptions for performance forecast - key market predictions • The forecast for smartphone and nearline HDD production volumes has been further revised downward from the forecast in August. FY3/24 Forecast FY3/23 As of April 2023 As of August 2023 As of November 2023 Actual (A) (Production volume:
Slide 17: Projections by segment for Q3, FY March 2024
Projections by segment for Q3, FY March 2024 FY3/24 Factor (JPY bn)) Q2 Q3 Projection (QoQ) • Sales of Aluminum electrolytic capacitors and film capacitors, and Inductive devices Passive Components 145.4 (8) ~ (5)% to the industrial equipment market and for distributors are expected to decrease. • S
Slide 18: Quarterly sales by market (FY3/23 – FY3/24) Passive Components
Quarterly sales by market (FY3/23 – FY3/24) Passive Components (JPY bn) ▍Automotive ▍ICT 153.5 +9.5% (19.3)% 142.4 145.3 145.4 150 137.6 140.7 (JPY bn) (JPY bn) 139.0 126.9 80 40.5 72.3 100 66.1 65.7 63.5 66.7 32.7 60.8 30 60 19.6 21.0 18.1 18.1 20 50 40 13.7 14.6 20 10 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 19: Improve asset profitability
Improve asset profitability • Allocate investments based on both “asset profitability” and “business potential.” • Enhance high-profitable businesses further and implement measures for early business restructuring. ▍Decision-making criteria for capital allocation Source: TDK Integrated Report 2023 H
Slide 20: Appendix
Appendix © TDK Corporation 2023 H1, FY March 2024 Performance Briefing IR&SR Group, November 1, 2023 20
Slide 21: Quarterly sales and operating profit by segment
Quarterly sales and operating profit by segment FY3/23 FY3/24 (JPY bn) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Capacitors 58.3 63.7 62.1 58.3 242.5 62.5 62.6 Inductive Devices 49.3 52.8 50.1 46.3 198.5 46.7 49.3 Other Passive Components 34.7 37.0 33.1 33.0 137.8 31.5 33.5 142.4 153.5 145.3 137.6 578.8 1
Slide 22: Capex, Depreciation, R&D – H1
Capex, Depreciation, R&D – H1 FY3/23 FY3/24 Change (JPY bn) H1 H1 Capex 154.2 114.4 (39.7) Depreciation 103.2 94.6 (8.6) % to net sales 9.2% 8.9% (0.3)pts R&D 89.6 90.1 +0.6 % to net sales 8.0% 8.5% +0.5pts ▍Capex ▍Depreciation, % to net sales ▍R&D, % to net sales （JPY bn） （%） 200 200 20 200 20 154.
Slide 23: Capex, Depreciation, R&D
Capex, Depreciation, R&D Capex Depreciation R&D (JPY bn) 350 300 291.3 275.7 250 240.0 212.2 200 206.3 173.6 173.4 177.0 180.0 179.5 170.0 165.3 150 148.4 125.0 127.4 106.6 115.2 117.5 100 50 0 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/24 FY3/19 FY3/20 FY3/21 F
Slide 24: Financial position
Financial position Change March 31, 2023 June 30, 2023 September 30, 2023 (JPY bn) (vs. March 31) Total assets 3,147.0 3,302.2 3,417.6 +270.6 Total liabilities 1,684.2 1,749.1 1,779.7 +95.5 Total equity attributable to owners of parent 1,458.4 1,547.4 1,631.1 +172.7 Ratio of equity attributable to o
Slide 25: Cash flows
Cash flows Operating cash flow Investment cash flow Free cash flow (JPY bn) 340.0 262.8 222.4 230.9 179.0 140.3 180.4 28.4 80.0 0.1 (0.6) (42.0) (102.6) Incl. advance payments (140.2) of about 110.0 bn JPY to secure stable supply of battery materials. (231.4) (234.4) (260.0) (281.5) FY3/19 FY3/20 FY
Slide 26: Annual sales by market (FY3/19 – FY3/23)
Annual sales by market (FY3/19 – FY3/23) All (JPY bn) ▍Automotive ▍ICT 2,500 2,180.8 (JPY bn) (JPY bn) 2,000 1,902.1 418.7 1,207.6 400 1,200 1,142.5 330.4 1,381.8 1,479.0 1,500 1,363.0 253.7 245.3 248.6 821.6 913.7 300 900 809.8 1,000 200 600 500 100 300 0 0 0 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/
Slide 27: Quarterly sales by market (FY3/23 – FY3/24) All
Quarterly sales by market (FY3/23 – FY3/24) All (JPY bn) ▍Automotive ▍ICT 611.5 587.0 +11.3% (8.6)% 600 556.3 (JPY bn) (JPY bn) 510.5 503.4 637.9 500 471.9 230.1 582.9 206.7 357.4 360 334.5 320.4 400 111.8 118.3 120 111.1 109.2 280.4 102.8 262.5 95.6 235.2 300 240 80 200 40 120 100 0 0 0 Q1 Q2 Q3 Q4
Slide 28: Annual sales by market (FY3/19 – FY3/23) Passive Components
Annual sales by market (FY3/19 – FY3/23) Passive Components ▍Automotive ▍ICT (JPY bn) 600 575.9 507.8 500 (JPY bn) (JPY bn) 433.4 395.5 407.1 255.5 150 400 250 211.8 300 200 168.8 168.7 172.1 100 76.3 75.7 78.8 81.5 150 72.3 200 100 50 100 50 0 0 0 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/19 FY3/20 FY
Slide 29: Quarterly sales by market (FY3/23 – FY3/24) Passive Components
Quarterly sales by market (FY3/23 – FY3/24) Passive Components (JPY bn) ▍Automotive ▍ICT 153.5 +9.5% (19.3)% 142.4 145.3 145.4 150 137.6 140.7 (JPY bn) (JPY bn) 139.0 126.9 80 40.5 72.3 100 66.1 65.7 63.5 66.7 32.7 60.8 30 60 19.6 21.0 18.1 18.1 20 50 40 13.7 14.6 20 10 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 30: Annual sales by market Sensor Application Products
Annual sales by market (FY3/19 – FY3/23) Sensor Application Products (JPY bn) ▍Automotive ▍ICT 169.5 150 (JPY bn) (JPY bn) 130.8 80 72.5 80 61.2 56.1 100 60 76.5 77.9 81.3 60 46.2 39.2 36.4 40 34.4 40 25.8 50 17.4 20.6 20 20 0 0 0 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23 FY3/19 FY3/20 FY3/21 FY3/22 FY3/23
Slide 31: Quarterly sales by market Sensor Application Products
Quarterly sales by market (FY3/23 – FY3/24) Sensor Application Products (JPY bn) ▍Automotive ▍ICT 47.3 +32.4% (6.5)% 50.0 45.9 45.6 (JPY bn) (JPY bn) 39.0 39.0 38.8 38.3 36.8 34.4 40.0 28.9 21.7 20.9 22.0 19.0 19.3 20 20 30.0 15.2 16.0 16.3 15.1 14.9 13.7 12.4 20.0 10 10 10.0 0.0 0 0 Q1 Q2 Q3 Q4 Q1
Slide 32: 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 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% 2,180,817 200
Slide 33: 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 34: 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 FTSE4Good Index Series Sompo Sustainability Index An index compiled based on the results of the Buna-no- An index provided by FTSE Russell that was Mori Environmental Questionnaire and ESG Manag
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
Slide 36: Performance briefing text data and Q&A upload site
Text data including Q&A of performance briefing will be uploaded on following site. https://www.tdk.com/en/ir/ir_events/conference/2024/2q_1.html