TDK at a Glance for Investors

Sales and Profits

In the fiscal ended March 2024, in the electronics market, which significantly affects our earnings, we experienced a decline in sales due to sluggish demand in the ICT and HDD markets caused by prolonged weakness in final demand, as well as low capital investment demand in the industrial equipment market in general. However, operating profit grew year on year to a record high*, mainly due to an increase in sales to the automotive market as a result of an increase in xEV production and an increase in profit from small capacity rechargeable batteries for the ICT market.
*Operating income is compared on the basis excluding a gain on sale of business recorded in fiscal year ended March 2017.

Sales

Net sales were ¥2,103.9 billion, down 3.5% year on year.

The global economy showed increasing signs of slowing due to the economic weakness in Europe and China and unrest in the Middle East, although the North American economy remained robust. The yen remained weak against the dollar and the euro.
Under this business environment, in the electronics market, which significantly affects our earnings, we experienced a year-on-year decline in sales due to sluggish demand in the ICT and HDD markets caused by prolonged weakness in final demand, as well as low capital investment demand in the industrial equipment market in general. However, operating profit grew to a record high*, mainly due to an increase in sales to the automotive market as a result of an increase in xEV production and an increase in profitfrom small capacity rechargeable batteries for the ICT market.
In terms of sales by business and market, sales of Passive Components and Sensors to the automotive market increased due to the spread of xEVsand ADAS, while sales of these products to the industrial equipment market decreased significantly due to weak demand.
Sales of small capacity rechargeable batteries tothe ICT market decreased due to a decline in the sales price resulting from lower material prices, but profit slightly increased.
While sales of HDD Heads and HDD Suspension Assemblies decreased due to sluggish demand in the HDD market, there have been signs of recovery since Q3.

Operating Profit

Operating Profit was ¥172.9 billion, up 2.4% year on year.

Operating Profit was 172.9 billion yen, up 4.1 billion yen, or 2.4% year on year.
This is primarily attributable to the following factors. Changes in sales caused profit to decrease by JPY 57.7 billion. These included a fall in sales volumes, a deterioration of the product mix, and reduced operating rates in the Passive Components segment and a fall in the sales volume of HDD heads, although the profit for rechargeable batteries increased due to increased sales volume. The JPY 42.4 billion profit increase due to rationalization, cost reductions, and benefits from restructuring absorbed the JPY 41.5 billion profit decrease due to changes in selling prices.
Thorough cost reductions were made in SG&A expenses, especially for rechargeable batteries and HDD heads, resulting in a reduction of JPY 20 billion. Restructuring costs and other one-time expenses fell by JPY 15.9 billion from the previous period, and the weaker yen boosted profit by JPY 25 billion. These contributed to the JPY 4.1 billion increase in operating profit.