Mr. Takehiro Kamigama
President & CEO
Thank you for taking the time to attend today's presentation in such large numbers.
I will give you an overview of our consolidated operating results for fiscal 2010 as well as our projections for fiscal 2011.
Consolidated Results for FY2010
This slide shows an overview of our consolidated results for fiscal 2010.
TDK recorded consolidated net sales of ¥808,858 million, operating income of ¥25,774 million, income before income taxes of ¥21,907 million and net income attributable to TDK Corp. of ¥13,520 million. In fiscal 2009, we incurred structural reform expenses of ¥38.0 billion. In fiscal 2010, these expenses were only ¥13.0 billion. Foreign exchange fluctuations lowered net sales by ¥45.2 billion and operating income by ¥13.9 billion. These impacts are included in the results I have just given you.
Features of FY2010 Results
Now for a word on the highlights of our fiscal 2010 results. One of the most noticeable features was that the market recovered considerably in the second half of the fiscal year. Looking at Japan, the government's eco-point program spurred demand for digital home appliances, particularly flat-screen TVs. Demand for cars also rebounded, led by hybrid automobiles. Turning to emerging economies, the Chinese market led the way in recovery. Consumer electronics and automobiles drove the market. Around the world, mobile phones, particularly smart phones, saw growth, as did PCs. In line with the recovery in markets from around the beginning of the second half of fiscal 2010, demand for TDK's passive components also increased. HDD head sales also rose. However, while unit sales rose, there was considerable pressure on prices, making it hard to say that there was a complete recovery in monetary terms in the electronics market. The structural reforms we have implemented up to now contributed to our improved earnings in fiscal 2010.
Projections for FY2011
Now I would like to look at our projections for fiscal 2011.
We are projecting consolidated net sales of ¥880.0 billion, operating income of ¥62.0 billion, income before income taxes of ¥60.0 billion and net income attributable to TDK Corp. of ¥45.0 billion. Our projections assume an average yen-U.S. dollar exchange rate of ¥87 and an average yen-euro exchange rate of ¥130.
Target Areas and Products for FY2011
Let me now briefly discuss the areas we are focusing on in fiscal 2011.
First is the mobile phone market. We expect the smart phone market to grow in the current fiscal year and to capture synergies with EPCOS, the company we acquired, in this area. Indeed, we hope to capture long-awaited synergies with EPCOS from this fiscal year onward. One area in particular is high-frequency modules, which we think will contribute considerably to our sales. A second area of focus is the hybrid electric vehicle (HEV) and electric vehicle (EV) field. We are targeting higher sales in DC-DC converters especially, as well as in transformers and film capacitors in this area.
A third field is IT home electronic appliances. We expect PC and other markets to continue to grow. The flat-screen TV market, for example, will see the launch of 3D and LED TVs. Growth of these products is expected to drive demand as a whole for components, passive components and HDD heads used in TVs. A fourth target field is industrial equipment. Here, infrastructure markets, namely energy- and environment-related markets, are attracting considerable attention. Capitalizing on this trend, we want to expand sales mainly of switching power supplies, aluminum electrolytic capacitors and film capacitors.
We have factored expected growth in these fields into our projected sales increase of between ¥70 billion and ¥80 billion for fiscal 2011.
That concludes my presentation. I will now hand you over to the General Manager of our Finance & Accounting Dept., who will go into our results. Thank you.