TDK : Consolidated results (IFRS) for the 1st quarter of FY March 2023

TDK Corporation (6762) FY 2023 First Quarter Financial Results (IFRS)

TDK Corporation

August 1, 2022

Contact:
TDK Corporation (Tokyo)	IR&SR Group
	Satoshi Sakai
[phone]

Consolidated results (IFRS) for the 1st quarter of FY March 2023

(Millions of yen, %)

Term	1Q of FY 2022	1Q of FY 2023
	(April 1, 2021 - June 30,	(April 1, 2022 - June 30,	Change
	2021)		2022)
Account	Amount	% to	Amount	% to	Amount		%
net sales	net sales
Net sales	420,058	100.0	510,504	100.0	90,446		21.5
Operating profit	31,317	7.5	44,603	8.7	13,286		42.4
Profit before tax	32,434	7.7	43,872	8.6	11,438		35.3
Net profit attributable to owners	26,953	6.4	31,413	6.2	4,460		16.5
of parent
Earnings per share:
- Basic	71.12yen		82.87yen
- Diluted	70.94yen		82.67yen
Purchase of tangible and	61,205	-	69,651	-	8,446		13.8
intangible assets
Depreciation and amortization	42,612	10.1	51,066	10.0	8,454		19.8
Research and development	37,680	9.0	44,513	8.7	6,763		17.9
expenses
Number of employees	128,742	-	114,320	-

Note: Effective October 1, 2021, TDK implemented a share split at a ratio of three shares per common share. The basic and diluted earnings per share are calculated assuming that the share split was implemented at the beginning of the three months ended June 30, 2021.

TDK Corporation (6762) FY 2023 First Quarter Financial Results (IFRS)

［Contents］

1. Summary Information Regarding Financial Results for the First Quarter of Fiscal 2023

（1） Summary Information Regarding Consolidated Business Results	・・	P. 2
（2）	Summary Information Regarding Consolidated Financial Position	・・	P. 7
（3）	Summary Information Regarding Consolidated Projections	・・	P. 9

2.	Other Information
（1） Changes in Significant Subsidiaries	・・	P. 11
（2） Accounting Policy Changes, Accounting Estimate Changes and
	Restatements	・・	P. 11
（3）	Fundamental Policy for Distribution of Earnings,
	and Fiscal 2023 Dividends	・・	P. 11
3. Condensed Quarterly Consolidated Financial Statements
	and Primary Notes
（1） Condensed quarterly consolidated statements of financial position	・・	P.13
（2） Condensed quarterly consolidated statements of profit or loss and	・・	P.15
	comprehensive income
（3） Condensed quarterly consolidated statements of changes in equity	・・	P.18
（4） Condensed quarterly consolidated statements of cash flows	・・	P.19
（5） Notes to the condensed quarterly consolidated financial statements	・・	P.21
（6）	Appendix to the Consolidated Financial Statements	・・	P.25

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TDK Corporation (6762) FY 2023 First Quarter Financial Results (IFRS)

[Summary Information and Financial Statements]

1. Summary Information Regarding Financial Results for the First Quarter of Fiscal 2023

(1) Summary Information Regarding Consolidated Business Results

Consolidated results for the first three months of fiscal 2023, the period from April 1 to June 30, 2022, are as follows.

During the first three months of fiscal 2023, the Chinese economy was significantly affected by the downturns in production activities and social and economic activities as the Chinese government, which promotes a zero-COVID policy, implemented large-scale lockdowns due to the resurgence of the COVID-19 pandemic. In addition, heightened geopolitical risks in line with Russia's invasion of Ukraine resulted in soaring prices mainly for energy and food, which impacted the global economy. In the United States and Europe, policy interest rates were raised as a countermeasure against rapid inflation, which also affected exchange rates. As a result, the yen's depreciation, particularly against the dollar and the euro, progressed rapidly.

Looking at the electronics market, which has a large bearing on the consolidated performance of TDK, production volume in the automotive market decreased from the previous fiscal year due to the ongoing supply chain constraints in components procurement as a result of the lockdowns in China and heightened geopolitical risks. However, demand for components remained firm on the back of an increase in vehicle types, such as electric vehicles (EVs), with a large number of components installed per vehicle. In the Information and Communications Technology (ICT) market, demand for notebook PCs and tablets, which had been strong amid the COVID-19 pandemic, started to decline. In addition, smartphone production volume was slightly lower than the sluggish level in the previous fiscal year. Demand also remained weak due to the effect of the economic downturn as a result of China's lockdowns. Production of Hard Disk Drives (HDDs) on the whole was lower than the previous fiscal year's level due to a significant decline in demand related to personal computers, although demand related to data centers remained strong.

In this business environment, the TDK's consolidated operating results for the first quarter of fiscal 2023 were as follows.

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TDK Corporation (6762) FY 2023 First Quarter Financial Results (IFRS)

	1Q of FY 2022	1Q of FY2023	Change
Item	(April 1, 2021 - June 30, 2021)	(April 1, 2022 - June 30,2022)
	(Yen millions)	%	(Yen millions)	%	(Yen millions)	Change(%)
Net Sales	420,058	100.0	510,504	100.0	90,446	21.5
Operating profit	31,317	7.5	44,603	8.7	13,286	42.4
Profit before tax	32,434	7.7	43,872	8.6	11,438	35.3
Net profit attributable to owners of parent	26,953	6.4	31,413	6.2	4,460	16.5
Per common share:
Net profit	Yen 71.12	Yen 82.87
attributable to owners of parent Basic
Net profit	Yen 70.94	Yen 82.67
attributable to owners of parent / Diluted

Note: Effective October 1, 2021, TDK implemented a share split at a ratio of three shares per common share. The basic and diluted earnings per share are calculated assuming that the share split was implemented at the beginning of the three months ended June 30, 2021.

Average yen exchange rates for the U.S. dollar and the euro during the first quarter of fiscal 2023 were ¥129.36 and ¥137.95, respectively, as the yen depreciated 18.1% against the U.S. dollar and 4.6% against the euro. As a result of these factors and fluctuations in foreign exchange rates, net sales increased by approximately ¥63.7 billion and operating profit increased by approximately ¥12.6 billion.

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TDK Corporation (6762) FY 2023 First Quarter Financial Results (IFRS)

Sales by Product

		1Q of FY 2022	1Q of FY2023	Change
	Item	(April 1, 2021 - June 30, 2021)	(April 1, 2022 - June 30,2022)
		(Yen millions)	%	(Yen millions)	%	(Yen millions)	Change(%)
	Capacitors	47,126	11.2	57,587	11.3	10,461	22.2
	Inductive Devices	42,085	10.0	49,335	9.7	7,250	17.2
	Other Passive Components	32,545	7.8	34,709	6.8	2,164	6.6
	Passive Components	121,756	29.0	141,631	27.8	19,875	16.3
	Sensor Application Products	26,828	6.4	39,016	7.6	12,188	45.4
	Magnetic Application Products	60,623	14.4	55,130	10.8	(5,493)	(9.1)
	Energy Application Products	199,592	47.5	260,092	50.9	60,500	30.3
	Other	11,259	2.7	14,635	2.9	3,376	30.0
	Total	420,058	100.0	510,504	100.0	90,446	21.5
	Overseas Sales	384,999	91.7	470,041	92.1	85,042	22.1

Note: In accordance with the reorganization for the three months ended June 30, 2022, certain products of Other are reclassified into Other passive components and certain products of Other passive components are reclassified into Capacitors and Inductive devices. Thus, the prior year's figures are also reclassified to conform to the new segmentation.

1) Passive Components Segment

This segment is made up of (1) Capacitors, (2) Inductive Devices, and (3) Other Passive Components. Sales in the Passive Components segment were ¥141,631 million, up 16.3% year on year from ¥121,756 million.

Capacitors is made up of Ceramic Capacitors, Aluminum Electrolytic Capacitors, and Film Capacitors. Sales in the Capacitors were ¥57,587 million, up 22.2% year on year from ¥47,126 million. Sales of Ceramic Capacitors increased to the automotive market. Sales of Aluminum Electrolytic Capacitors and Film Capacitors increased to the industrial equipment and the automotive markets.

Sales of Inductive Devices increased by 17.2% year on year from ¥42,085 million to ¥49,335 million. Sales increased to the automotive and the industrial equipment markets.

Other Passive Components include High-Frequency Devices, Piezoelectric Material Products, and Circuit Protection Components. Sales of Other Passive Components increased by 6.6% year on year from ¥32,545 million to 34,709 million. Sales increased mainly to the automotive market.

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