TDK at a Glance for Investors

Q.Sales and Profits

Net sales, operating income, income before income taxes, and net income reached new record highs in the fiscal year ended March 2019*.
*Incomes are compared on a basis excluding a gain on sales of business recorded in the fiscal year ended March 2017.

Sales

Net sales were ¥1,381.8 billion, up 8.7% year on year.

In the fiscal year ended March 2019, consolidated net sales rose 8.7% year on year and achieved a new record for a sixth consecutive year.
From the middle of the third quarter, TDK saw a sharp slowdown in orders in its main market segments of automotive, ICT, and industrial equipment due to an economic slowdown in China set off by the trade friction between the U.S. and China. However, core businesses that had maintained a solid performance through the first half of the fiscal year continued to trend firmly in the second half, enabling year-on-year increases in sales and profits on a full-year basis.
In Rechargeable Batteries, higher sales volume supported by a higher share of sales to major smartphone customers in China and other factors led to large increases in sales and profits, thereby contributing immensely to growth in the Company’s overall earnings.
In Ceramic Capacitors, sales rose substantially centered on products with high reliability and redundancy characteristics for the automotive market. Profits expanded continuously, along with improved profitability, enabling Ceramic Capacitors to significantly lift the overall earnings base for the Passive Components segment.
In HDD Heads and HDD Suspension Assemblies, despite a year-on-year decline in sales, higher profits were secured, thereby supporting the overall earnings base.
Meanwhile, Sensors and Magnets, in addition to worsening market conditions, saw a delay in earnings improvements as new products were unable to be brought to market in a timely manner. Consequently, Sensors and Magnets had a negative impact on the Company’s overall earnings.

Operating Income

Operating income increased 20.2% towards the ¥100.0 billion level.

Operating income was 107.8 billion yen, up 18.1 billion yen, or 20.2%, year on year.
This is primarily attributable to the following factors. First, there was an increase in profits of approximately 39.4 billion yen due to an increase in net sales centered on Capacitors and Rechargeable Batteries, as well as an improvement in the product mix for HDD Heads and HDD Suspension Assemblies. Then there was a negative impact of around 19.1 billion yen due to a drop in sales prices. However, the impact was absorbed for the most part by a saving of about 21.5 billion yen due to rationalization and cost reduction, as well as the benefits of about 1.4 billion yen as a result of restructuring initiatives and an impairment loss of approximately 4.7 billion yen in Magnets. SG&A expenses increased by around 26.5 billion yen due to increases in administration and development expenses in connection with business expansion in Rechargeable Batteries, as well as higher costs arising from strengthening the development framework in the Sensor business and increased costs from newly acquired companies. Together with a decrease of around 5.5 billion yen in one-time M&A related expenses and an increase of around 0.6 billion yen from exchange rate fluctuations, the overall increase in operating income was 18.1 billion yen.

Net Income

Net income was ¥82.2 billion, up 29.4% year on year.

Net income was ¥82.2 billion, increased by ¥18.7 billion or 29.4% year on year, and reached new record high (compared on a basis excluding a gain on sales of business recorded in the fiscal year ended March 2017).

Projections for fiscal year ending March 31, 2018
Reference:Projections

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