TDK (6762) investor relations material

Executive summary

• Achieved record sales and profits for FY March 2026, driven by strong ICT, HDD, and industrial equipment demand, with all business segments contributing to growth despite global economic instability and a stronger yen.

• Increased shareholder returns through higher dividends, reflecting robust financial results.

• Management remains focused on sustainable mid- to long-term growth, emphasizing ROIC, proactive investment in AI ecosystem products, and strategic business portfolio management.

• FY March 2027 faces headwinds from geopolitical tensions, lower ICT device production, and global uncertainties, but management targets controllable improvements and growth in AI-related products.

Financial highlights

• Net sales reached ¥2,504.8 billion (+13.6% YoY); operating profit was ¥272.4 billion (+21.5% YoY); net profit attributable to owners was ¥195.7 billion (+17.1% YoY); EPS was ¥103.09 (post-share split basis).

• Free cash flow was ¥129.9 billion, trending above expectations but down from ¥201.0 billion in the prior year.

• Operating cash flow was ¥507.7 billion, with increased CapEx mainly for rechargeable batteries.

• ROIC improved to 7.5% from 6.7% YoY; operating profit margin rose to 10.9%.

• Total comprehensive income surged to ¥452.8 billion, mainly due to exchange differences on translation of foreign operations.

Outlook and guidance

• FY March 2027 projections: net sales ¥2,580.0 billion (+3.0%), operating profit ¥295.0 billion (+8.3%), net profit ¥225.0 billion (+15.0%).

• Free cash flow forecast at ¥60.0 billion, reflecting significant CapEx for midterm growth.

• Dividend per share planned at ¥40 for FY March 2027, up from ¥36 in FY March 2026.

• Assumptions include a 10% decrease in smartphone production, 7% increase in Nearline HDDs, and 21% growth in AI server boards.

• One-time restructuring costs of approximately ¥6.0 billion expected in FY March 2027.