TDK Corporation
Q2 2021 Earnings Call Transcript

Published: 28 Jul 2021

[Operator:]

Q1 of FY March 2022. Let me introduce you the speaker Mr. Tetsuji Yamanishi, Executive Vice President.

[Tetsuji Yamanishi:]

Thank you very much. I'm Yamanishi. Thank you very much for joining us today with our performance briefing on the Q1 of FY March 2022. We really appreciate that all of you that joined today and I am going to present about the consolidated business performance. I'll start with the key points. In Q1 last year due to that -- the expansion of the infections and the COVID-19 pandemic each country had a lockdown and that would slow down to the global economy and leading to the major impacts on the business too. But after the Q2 last year that the social and production activity in each country have gradually opened. And now we observed that the recovery of electronics demands particularly in the digital transformations and energy transformations later demand have been steady so that our sales was grown by 35.8% year-on-year. Operating income have grown by 67.4% from the year earlier.

[Shigenao Ishiguro:]

Next is explanation of the reasons for changes in sales and operating income by segment from the fourth quarter of the previous year to the first quarter of the current year. In the Passive Components segment, sales increased by ¥7.3 billion or 6.4% from the fourth quarter and operating income increased by ¥4.8 billion or approximately 36% excluding ¥3.7 billion in onetime expenses incurred in the fourth quarter. Sales increased in all markets including the automobile, ICT and industrial equipment markets as well as distributors and all businesses posted higher sales and operating income. Next in the Sensor Application Products segment, sales was ¥2.9 billion, a 12.1% increase. Operating income improved by ¥2.4 billion excluding ¥4.1 billion in onetime expenses incurred in the fourth quarter. Sales of Temperature and Pressure Sensors and Hall Sensors increased due to strong demand from the automotive industry, while TMR Sensors sales volume increased for smartphones and MEMS Sensors sales increased for Motion Sensors for smartphones in China and game consoles. As for operating income, TMR Sensors which have good profitability, greatly expanded its revenue and Motion Sensors profitability improved substantially due to a favorable turnaround in the customer and product mix, which greatly contributed to the reduction of the overall loss. Next in the Magnetic Application Products segment, sales increased by 11% to ¥6 billion and operating income increased by ¥1.9 billion, excluding the ¥5 billion in onetime expenses incurred in the fourth quarter. Sales increased due to a 17% increase in the sales volume of HDD Heads and an increase in HDD assembly sales from the fourth quarter. Sales of HDD suspensions remain almost unchanged due to a decrease in application products for smartphones, despite an increase in sales volume for Nearline HDDs.

[End of Q&A:]