Hello, my name is Takehiro Kamigama. I will present the full-year consolidated projections for fiscal 2015.
My first slide shows you our performance and dividend forecasts. We expect net sales to grow 6.7% to 1,050 billion and operating income to increase 55.7% to 57 billion. Our forecast for income from continuing operations is 56 billion on a pretax basis and 34 billion at the net income level. Projected net income per share is 270.24. We expect to pay interim and final dividends of 40 per share, for total annual dividends of 80 per share. These figures use exchange rate assumptions of 100 against the US dollar and 135 against the euro.
This next slide shows the projected breakdown of sales in fiscal 2015 by business segment. We see sales rising 10 15% to 471.7 billion in the passive components segment, mainly driven by higher sales of high-frequency components for ICT applications and ongoing expansion in the automotive market. Sales in the magnetic application products segment are expected to dip up to 5%, falling from 364.3 billion recorded in fiscal 2014. This is mainly due to the HDD market having matured. Sales in the film application products segment are expected to grow 20 25% from 129.3 billion recorded in fiscal 2014, based on higher demand for rechargeable batteries as customers seek out energy devices that can deliver greater power and capacity in more compact packages. Overall, we expect sales to rise 6.7% to 1,050 billion. This would take TDK s sales above the 1 trillion mark for the first time in our history.
Next, I would like to explain the priority areas where we are focusing our efforts. We see our three priority markets as the automotive, ICT and industrial equipment/energy sectors. At the start of April, we reorganized our sales structure along these lines so we can achieve our strategic goals in each of these areas quickly. Our five priority businesses targeting these markets are inductive devices, high-frequency components, piezoelectric material products, HDD heads, and rechargeable batteries. We see each of these businesses as pillars of TDK s growth, and we plan to focus our resources in these areas.
TDK s sales in the automotive market made up about 17% of our total sales in fiscal 2014. We aim to increase this proportion to 20% in the near future. TDK already has a high share of the market for powertrain-related electronic components through our sales of capacitors and inductive devices. We aim to target the demand created by the increasing use of automotive electronics and the trend towards eco-friendly cars such as hybrids and fully electric vehicles. We also plan to reinforce our position within the market for powertrain-related electronic components. Sensors are a particular area of growth. Already the sensor business generates about half of our automotive market sales. Targeted products for growth include temperature sensors with built-in protection thermistors and current sensors, both of which are becoming more important in cars. We are also using our proprietary HDD head technology to develop advanced tunnel magnetoresistive (TMR) sensors such as angle sensors. We think that sensors based on our TMR technology have considerable sales growth potential over the longer term. In addition to passive components, relative to our electronics sector competitors we also own a range of products that have applications in the automotive sector. These include power supplies, magnets and EV battery packs. In the power supply sector, our focus is to grow sales of DC-DC converters and battery chargers. Our DC-DC converters achieve high conversion efficiencies using in-house heat sink technology and new high-performance ferrite materials. The gain in conversion efficiency enables us to make these products more compact. Soon they will be able to fit into the palm of your hand. With magnets, we offer both ferrite and metal varieties. These have a range of applications in the automotive sector. We aim to expand sales by developing specialized products using novel materials and production technologies. Another area where we see long-term growth potential is in battery packs for electric vehicles that can make use of wireless charging based on magnetic resonance coupling technology. We have already begun mass production of battery packs for EVs. Currently most of our battery sales are for smartphone and tablet applications, but over the medium- and long-terms we aim to sell more batteries in the automotive market.
Turning next to the ICT market, we see growth coming from various products for smartphone and tablet device applications. TDK supplies a range of products for these markets, such as the actuators used in camera modules. Demand is growing as functions for camera modules get more sophisticated. We are trying to grow sales of high valueadded products such as closed-loop voice coil motors and optical image stabilizers (actuators to help prevent blurry photos caused by camera shake). High-performance devices increasingly need more power as well, and we are developing new lithium polymer batteries designed to fit into new, more compact devices. Our batteries also have advantages in larger sizes. Therefore, we are expecting steady growth in the rechargeable batteries business overall. Elsewhere, the growth of the multi-band compatible LTE market is creating demand for high-frequency components such as SAW, BAW and TC-SAW filters. We are focusing on growing sales of all these products.
We expect to achieve higher sales of TC-SAW and BAW filters in particular in China due to the local spread of TD-LTE mobile networks. We are receiving many orders for these items. In South Korea, too, orders are increasing for diversity module and discrete solutions using TC-SAW and BAW filters. In North America, our high-frequency components business is growing via power amplifier manufacturers, and we also expect higher demand for diversity modules. Besides increasing production capacity to supply new orders, we are targeting productivity improvements and reducing production costs to boost our profit margins. This means enlarging wafer size and creating small-package products. We are also trying to expand sales of thin-film electronic parts based on in-house technology.
In the industrial equipment and energy market, we are looking to expand our sales of various products used in power installations, including batteries used in energy storage systems, power components for inverters, bidirectional DC-DC converters, and metal magnets used in wind power equipment.
The next slide shows sales growth projections by priority market. As I mentioned earlier, we expect nearly 7% sales growth in fiscal 2015. By market, we are forecasting growth of 6% in the industrial equipment and energy sectors, 8% in the ICT sector, and 10% in the automotive sector. The figure for ICT includes operations in HDD heads which bring stable income. The projected sales growth figure for the high-frequency components business is a little over 20%.
Next, I would like to outline the key initiatives in our five priority businesses in more detail for this fiscal year. In inductive devices, we are focusing on inductors for automotive use in both the multilayer and wire-wound categories, particularly multilayer inductors. In metal coils, we aim to boost sales across our full lineup of thin-film, wire-wound and multilayer products. We are confident that TDK is cost-competitive in this sector. In high-frequency components, we plan to grow sales of SAW, TC-SAW and BAW filters and other discrete products using performance gains and miniaturization. This means building on our success in securing reference design approvals from top IC manufacturers. In piezoelectric material products, as I mentioned earlier, we are working to expand sales of actuators for camera modules and also expect to develop automotive sales. In HDD heads, we are targeting a higher share of the market for HDDs used in nearline storage. To generate stable revenues and high profits in this business, we are also continuing to develop HDD heads based on new technologies such as thermal-assist, shingled and two-dimensional magnetic recording. In rechargeable batteries, our goal is to keep growing by satisfying the rapidly growing demand for lithium polymer batteries. Over the medium- and long-terms, we also aim to develop new batteries for markets outside of smartphone, tablet and other ICT applications.
There are specific profitability issues that we are looking to address in the magnet and power supply businesses. With magnets, we finished consolidating our ferrite magnet production facilities in China in fiscal 2014. We also built new integrated production lines. These measures should help to boost productivity substantially. We are looking to secure more orders for magnets used in cars and home appliances. In metal magnets, we are targeting the automotive, industrial equipment and energy sectors where there is rising demand for high-quality, high-performance magnets. In power supplies, we are seeing a substantial recovery in orders due to increasing capital investment in the semiconductor and industrial equipment sectors. By launching new products, we aim to boost profitability by improving the product mix. We are also working to expand our share of the market for compact, high-efficiency automotive DC-DC converters. Through these various initiatives, we expect to make rapid improvements in the profitability of both of these businesses.
Based on all the activities that I have outlined to rebalance our business portfolio, we expect the consolidated earnings base to be significantly better balanced in fiscal 2015 than it was two years earlier. As you can see from the chart, the magnetic application products segment generated most of the profit in fiscal 2013, but there was a turnaround in passive components in fiscal 2014. In fiscal 2015, we expect another good performance from magnetic application products, higher profits from film application products, and a doubling of profits from passive components compared with the previous year. This will result in balanced earnings from our three core businesses. We still need to do more to increase margins and boost earnings, but it is important that we achieve an optimal balance of earnings in fiscal 2015. We will then target further earnings growth from fiscal 2016.
Before ending, I would like to touch on two of the fascinating product areas among the many that we have in development at TDK. The first is magnetic sensors based on GMR and TMR technology from the HDD heads business. They are used in GMR encoders for cameras and TMR angle sensors, which I mentioned earlier. The angle sensors come in analog and digital varieties. Other products that incorporate TMR technology include the TMR gear tooth sensor, pictured here, and the TMR linear magnetic scale. We have begun mass production of some of these products. We will continue developing this range since the products leverage TDK s wealth of expertise in magnetic recording.
Next is the semiconductor-embedded substrate, or SESUB for short. We are receiving a lot of inquiries at present about using this technology in wearable healthcare devices, which naturally require compact electronic components.
Our SESUB Bluetooth modules are small enough to fit 12 of them on a 10-yen coin. Their tiny size makes them extremely useful in any wearable application, yet they are not products that any company could easily make. Mass production commenced in February 2014. We will focus on growing sales of these differentiated products. Thank you for your time today.