Earnings Release Conference for the 2nd Quarter with notes(602KB)

Consolidated Financial Results

Second quarter for the year ending March 31, 2022

Katsuya Sase

Chief of Management Planning Headquarters

November 5, 2021

©TAIYO YUDEN 2017

Financial Summary

2Q for the Year Ending March 2022

• Net sales were ¥88.8 billion. Sales increased 6% Q/Q, primarily for use in information equipment, such as notebook PCs, and IT infrastructure/industrial equipment, such as servers.
• Operating income was ¥19.5 billion, up 29% Q/Q. The effect from capacity utilization was greater than the increase in fixed costs, resulting in higher operating income.
• Net sales, operating income, ordinary income, and net income attributable to owners of the parent company all recorded all-time highs on the quarterly basis.

Earnings Forecast for the Year Ending March 2022

• The full-year financial results forecasts published in August have been revised upward.
• The full-year earnings forecasts are for net sales of ¥345.0 billion, up 15% Y/Y, and operating income of ¥64.0 billion, up 57% Y/Y.

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Financial Summary for 2Q FYE March 2022

We achieved sales and profit growth in the second quarter compared with the first quarter.

Net sales were 88.8 billion yen, up 6% Q/Q.

The increase in sales was mainly due to growth of product sales for use in information equipment and IT infrastructure/industrial equipment. Operating income was 19.5 billion yen.

Although fixed costs rose, the effect from capacity utilization, which included the increase in sales volume, was greater, resulting in an increase of 29% in operating income Q/Q.

As a result, quarterly net sales, operating income, ordinary income, and net income attributable to owners of the parent company all recorded all- time highs.

Earnings Forecasts for FYE March 2022

The full-year financial results forecasts published in August have been revised upward.

Full-year net sales are projected to rise 15% Y/Y to 345.0 billion yen, and operating income is projected to rise 57% Y/Y to 64.0 billion yen.

2Q - Consolidated Financial Results (Q/Q)

	FYE Mar 31, 2022	FYE Mar 31, 2022	Change Q/Q
¥ in million	1Q			2Q
	(01 Apr 2021 - 30 Jun 2021)	(01 Jul 2021 - 30 Sep 2021)
Net sales	83,836	100.0%	88,833	100.0%	4,996	6.0%
Operating income	15,147	18.1%	19,508	22.0%	4,361	28.8%
Ordinary income	15,174	18.1%	20,370	22.9%	5,196	34.2%
Net income attributable	12,969			15,479
to owners of the parent	15.5%	17.4%	2,510	19.4%
company
Yen/USD	109.00 yen	110.10 yen		1.10 yen
average exchange rate		depreciated
Impact of exchange rate	0.7 billion yen on net sales, 0.6 billion yen on operating income
fluctuation	* Including the impact of currencies other than US dollars
R&D expenses		3,138		3,219	81	2.6%
Capital investment		7,595		9,076	1,480	19.5%
Depreciation expenses		7,294		7,677	382	5.2%
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The financial results for the second quarter of the fiscal year ending March 2022 recorded net sales of 88.8 billion yen, operating income of 19.5 billion yen, ordinary income of 20.4 billion yen, and net income attributable to owners of the parent company of 15.5 billion yen.

The average exchange rate during the quarter was US$1:¥110.10, a depreciation of ¥1.10 from the first quarter of the fiscal year.

The impact from this was an increase of 0.7 billion yen in net sales and 0.6 billion yen in operating income.

There was a relatively large impact on operating income due to the depreciation in the value of Asian currencies.

R&D expenses were 3.2 billion yen, a slight increase Q/Q.

Capital investment was 9.1 billion yen, an increase of 1.5 billion yen Q/Q. Depreciation expenses were 7.7 billion yen, up 0.4 billion yen Q/Q.

2Q - Factors behind Operating Income (Q/Q)

Operating income (2Q FYE Mar 2022)

19.5

Operating income (1Q FYE Mar 2022)

15.1

Effect from

capacity

utilization

+5.5

		Effect from	Currency
		cost
		reductions	fluctuations
+0.2	+0.6
(0.4)			(1.5)
Impact of
Changes
selling price
in
			fixed costs
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A factor for increase in operating income was the 5.5 billion yen effect from capacity utilization.

The effect from capacity utilization includes the impact of changes in sales volume, improvement in product mix, and changes in inventory.

Company-wide inventory as of November 30, 2021 increased 5.6 billion yen from June 30, 2021 on the actual basis excluding the portion with no effect on operating income, such as the impact of exchange rates.

Other factors contributing to increase in operating income were the 0.6 billion yen impact of exchange rates and the 0.2 billion yen effect of cost reductions.

Meanwhile, factors for decrease in operating income were the negative impact of 0.4 billion yen from selling prices although the pace of reductions has remained more moderate than usual, continuing the trend of the previous quarter.

Fixed costs, mainly depreciation expenses and personnel expenses, also increased 1.5 billion yen.

As a result, operating income increased 4.4 billion yen from the first quarter to 19.5 billion yen.

2Q - Financial Results by Product Classification (Q/Q)

¥ in million	FYE Mar 31, 2022	FYE Mar 31, 2022	Change Q/Q
1Q		2Q
Capacitors	53,209	63.5%	59,035	66.5%	5,826	10.9%
Inductors	11,386	13.6%	12,863	14.5%	1,477	13.0%
Integrated modules &	13,977	16.7%	11,959	13.5%	(2,018)	(14.4)%
devices
Others	5,263	6.3%	4,975	5.6%	(288)	(5.5)%
Total net sales	83,836	100.0%	88,833	100.0%	4,996	6.0%

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