Taiyo Yuden : Earnings Release Conference for the 2nd Quarter with notes(730KB)

Consolidated Financial Results

Second quarter for the year ending March 31, 2023

Katsuya Sase

Chief of Management Planning Headquarters

November 7, 2022

©TAIYO YUDEN 2017

Financial Summary

2Q for the Year Ending March 2023

Net sales were ¥86.3 billion, up 6% Q/Q. Sales of inductors were up 29% Q/Q, driving the increase in sales overall.

The recovery in demand was slower than our forecast, and sales were lower than expected as of August.

Operating profit was ¥16.5 billion, up 25% Q/Q. The impact of exchange rates and the effect of capacity utilization contributed to profit growth.

Earnings Forecast for the year Ending March 2023

The financial results forecasts published in May have been revised downward.

The full-year earnings forecasts are for net sales of ¥342.0 billion, down 2% Y/Y, and operating profit of ¥42.0 billion yen, down 38% Y/Y.

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Financial Summary for 2Q FYE March 2023

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

Net sales increased 6% to 86.3 billion yen, with contributions from sales growth in capacitors and inductors.

In particular, there was a large increase in sales of inductors, up 29% Q/Q. However, the recovery in demand was weaker overall than the TAIYO YUDEN forecast, and net sales were lower than expected as of August.

Operating profit also increased 25% Q/Q to 16.5 billion yen due to the impact of depreciation in the yen and the effect of capacity utilization.

Earnings Forecasts for FYE March 2023

The full-year financial results forecasts published at the beginning of the fiscal year have been revised downward based on the results in the first half, future demand forecasts, and other factors.

TAIYO YUDEN will aim for net sales down 2% Y/Y to 342.0 billion yen and operating profit down 38% to 42.0 billion yen.

2Q - Consolidated Financial Results (Q/Q)

	FYE Mar 31, 2023	FYE Mar 31, 2023	Change Q/Q
¥ in million	1Q			2Q
	(01 Apr 2022 - 30 Jun 2022)	(01 Jul 2022 - 30 Sep 2022)
Net sales	81,740	100.0%	86,272	100.0%	4,532	5.5%
Operating profit	13,142	16.1%	16,475	19.1%	3,332	25.4%
Ordinary profit	17,204	21.0%	18,355	21.3%	1,151	6.7%
Profit attributable to	12,236	15.0%	12,643	14.7%	406	3.3%
owners of parent
Yen/USD	124.45 yen	135.33 yen		10.88 yen
average exchange rate		depreciated
Impact of exchange rate	4.9 billion yen on net sales, 3.5 billion yen on operating profit
fluctuation	* Including the impact of currencies other than US dollars
R&D expenses		3,112		3,111	(0)	(0.0)%
Capital investment		9,763		10,602	838	8.6%
Depreciation expenses		7,856		8,468	612	7.8%
©TAIYO YUDEN 2017							3

The financial results for the second quarter of the fiscal year ending March 2023 recorded net sales of 86.3 billion yen, operating profit of 16.5 billion yen.

Since the yen depreciated to US$1:¥145 at the end of the quarter, foreign exchange gain of 1.5 billion yen was recorded as non-operating income, resulting in ordinary profit of 18.4 billion yen.

Profit attributable to owners of parent company was 12.6 billion yen.

The average exchange rate during the quarter was US$1:¥135, a depreciation of ¥11 from the first quarter.

The impact from this was an increase of 4.9 billion yen in net sales and 3.5 billion yen in operating profit.

R&D expenses were 3.1 billion yen, practically the same Q/Q.

Capital investment was 10.6 billion yen, an increase of 0.8 billion yen Q/Q. Depreciation expenses were 8.5 billion yen, up 0.6 billion yen Q/Q.

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

Operating profit (2Q FYE Mar 2023)

Operating profit (1Q FYE Mar 2023)

13.1

16.5

Effect from		Currency
capacity		fluctuations
utilization	Effect from	+3.5
+2.4			cost
			reductions
			±0
(1.2)				(1.3)
Impact of		Changes
selling price		In
				fixed costs
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Factors for increase in operating profit Q/Q were the impact of 3.5 billion yen from impact of the yen's depreciation and the 2.4 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.

Sales volume increased in the second quarter owing to the elimination of the impact from lockdowns that occurred in the first quarter and higher demand for products for use in smartphones in North America.

Company-wide inventory as of September 30, 2022 increased 7.4 billion yen from June 30 on the actual basis excluding the portion with no effect on operating profit, such as the impact of exchange rates.

Meanwhile, a factor for decrease in operating profit was the 1.2 billion yen effect from selling prices.

Fixed costs also rose 1.3 billion yen due to increases in depreciation, electricity, and other expenses.

As a result, operating profit increased 3.3 billion yen to 16.5 billion from the first quarter.

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

¥ in million	FYE Mar 31, 2023	FYE Mar 31, 2023	Change Q/Q
1Q		2Q
Capacitors	54,583	66.8%	56,438	65.4%	1,855	3.4%
Inductors	11,748	14.4%	15,156	17.6%	3,408	29.0%
Integrated modules &	9,159	11.2%	8,276	9.6%	(882)	(9.6)%
devices
Others	6,248	7.6%	6,400	7.4%	152	2.4%
Total net sales	81,740	100.0%	86,272	100.0%	4,532	5.5%

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