Hello, this is Yamanishi. I do appreciate your precious time despite your busy schedule, also know we are being connected through the web systems. It's rather inconvenient. Again, I'm so happy to go through the highlights for the performance for the fiscal year March 2020 on a full year basis. Thank you for your precious time. That said, again, I would like to go through the highlights of the performance. First, key points. Economic slowdown in China and the rest of the world became so clear due to the worsening relationship between the U.S. and China day by day as we moved toward the year-end. In the fourth quarter, economic activities in each country stagnated due to the COVID-19 pandemic, impacting the production of electronics and the demands for electronic components. Its impact was beyond our imagination back in the beginning of the year.
Net sales was down 1.4% year-on-year. Operating income was down 9.2% year-on-year. Amid the severe macro demand globally throughout the year, rechargeable batteries enjoying the strong demand in the ICT market, performed well since the beginning of the year. Energy Application Products segment recorded its sales and profit by making efforts to expand its sales with the expanding applications. The U.S. and China trade friction had a major impact on the automotive and industrial equipment markets, creating a much bigger sluggish demand than we had expected since the beginning of the year. Many Passive Components and products and the Sensor Application Products, particularly the conventional sensor products, were affected negatively. In contrast, the ICT market demand turned out to be rather firm. Sales in the ICT market grew year-on-year.
With the 5G demand increasing, the rechargeable batteries and high-frequency components drove overall earnings from the expanded sales for smartphones and base stations. Happy to report this to you. In the fourth quarter, we came to our conclusion that the sluggish demand for automotive and industrial equipment markets is here to stay, so it will be rather difficult for us to have a big recovery in profit. We posted about JPY 6.5 billion for impairment for the production facilities for the magnets and aluminum capacitors. We also booked about JPY 1.8 billion impairment loss for the idle facilities in light of the revised development operations. Next, the highlights of the numbers. The stronger yen against the US dollar and other currencies. We had the sales and operating income affected by JPY 40.7 billion and JPY 3.1 billion, respectively.
With this, net sales was JPY 1.363 trillion, down JPY 18.8 billion year-over-year, and has significantly declined by 1.4%. We went through these situations. Operating income, including the impairment loss of JPY 18.3 billion, became JPY 97.9 billion, down JPY 9.9 billion, or down 9.2% year-over-year. Income before income taxes was JPY 95.9 billion. Net income was JPY 57.8 billion. Earnings per share was JPY 457.47. COVID-19 outbreak stopped some of the plant operations and shipments. With this, we assume that net sales and operating income were affected by about JPY 28 billion and JPY 12 billion, respectively. As for the FX sensitivity, no change. With the US dollar and the Japanese yen, we assume a 1 JPY fluctuation had its impact on operating income, about JPY 1.2 billion on the annual basis. Between the euro and yen, it was JPY 200 million.
Here, now I'd like to explain the results by segment. Passive Components segment, net sales was JPY 395.5 billion, down 8.7% year-on-year. Operating income was JPY 39.1 billion, down 33% year-on-year. Operating income margin became 9.9%. Furthermore, with the continuing U.S.-China trade friction continuing into the new fiscal year, automotive and industrial equipment market demand became so sluggish. With the inventory adjustment made by the major distributors both in the U.S. and Europe, capacitors, inductors, and piezoelectric components, circuit protection components, and aluminum and film capacitors, major items in the automotive and industrial equipment markets revenue had a tough time in sales, making the profit negative. For your further information, aluminum and film capacitors became negative in the fourth quarter as much as JPY 2.1 billion due to the declined demand. In contrast, ICT market demand continued to be firm since the beginning of the year.
5G ramp-up centering around China is gaining its momentum fully. The volume was down because of the COVID-19. May I remind you that in high-frequency components, the business was able to secure the growth both in revenue and profit. Next, Sensor Application Products segment. Though we positioned this segment as our growth strategy business and tried to increase its sales since last year, the total shows only a slight increase of 1.8%, and operating loss became bigger. To be more specific, there are two segments. In one segment, we were affected a lot by the economy and suffered from a decline in sales. In another segment, we were able to grow based upon our growth strategy. Globally, the demand for automotive and industrial equipment markets are becoming so low.
Our temperature sensors and Hall sensors, conventional types, business became sluggish, resulting into a big decline in sales and its profit deteriorated from the last year. It is having a major impact on the overall business. In contrast, our strategic on the products where now we do expect a growth. TMR sensors for autos expanded its sales with a steady increase in the volume increase. For smartphone business, a shift to new models have surely advanced and given us growth in sales. As for MEMS sensors, our motion sensors have grown with our new customers. MEMS microphone is also growing rapidly, particularly for the smartphones and IoT. However, it is not that great to make a contribution to our profit. Next, Magnetic Application Products segment. Net sales was JPY 219.7 billion, down 19.5% year-on-year. Operating income was JPY 400 million, showing a major decline. HDD heads and HDD suspension.
While our hard disk drive, HDD assembly volume went down by 4% due to the decline in the total HDD demand, partly due to the end of life of HDD assembly in the products, HDD suspension as a whole was down about 18% in sales, resulting in a decline in profit. However, thanks to the high-value products introduced, its profitability improved since last year. We are so happy and as for this situation. When it comes, we have been benefited, thanks to this high-valued products in the nearline products. Magnets. Sales decreased year-on-year due to the withdrawal of hard disk drive magnets and as well as the sluggish demand for industrial robots and machine tools and other industrial equipment markets. With this, we are still faced with a tough situation as for the deteriorating profit.
We had an impairment loss of about JPY 14.4 billion in the fourth quarter. Next, Energy Application Products segment. Net sales were JPY 597.7 billion, up 11.2% year-on-year. Operating income was JPY 124.1 billion, up significantly 36.4% year-on-year. Operating income margin was 20.8%. Profitability improved quite greatly. Rechargeable batteries increased greatly for the smartphone business as a whole. Tablets and laptops business also grew firmly. Furthermore, mini cell products for the wireless earphones and other wearables grew firmly in sales. It grew about 15% year-on-year, showing the improved profitability. Power supplies for the industrial equipment were affected greatly by the backlash on capital investment demand, making the total sales for industrial equipment going down. Next, I will analyze the decline in operating income of JPY 9.9 billion.
COVID-19 impact was as much as JPY 12 billion, but we had a profit of JPY 11.5 billion, backed up by the increased volume. Sales and price reduction impact was about JPY 15 billion, but this was absorbed by rationalization of cost reduction of JPY 19.1 billion, and the benefits from the restructuring was JPY 1.6 billion. They have contributed to the improved profitability by improving our internal strength. As for InvenSense, acquisition cost was JPY 5.4 billion, no change from the previous year. Rechargeable battery and expansion activities and costs, including ASIA and the development, was up JPY 10.4 billion. FX change, they pushed down profit by JPY 3.1 billion. Impairment loss increased JPY 13.6 billion. All in all, it resulted in the loss of JPY 9.9 billion in profit.
Next, I'm going to talk about that the reason of the changes of that segment-wise net sales and operating income changes on a quarter-on-quarter basis from Q3 to Q4. First of all, Passive Components segment. Net sales have declined by 1.3% from Q3, but if we exclude the impacts of the COVID-19, it have grown by 2% positively. All in all, we can see that now the business in ICT and the industrial equipment business have declined. On the other hand, that the ceramic capacitor and the high-frequency components for the 5G base stations have more than offsets. Now, operating income declined by 37% Q-on-Q basis, but we're excluding the impact of COVID, and the impairment of aluminum capacitor, it have grown by 9%. Next, Sensor Application Products. Net sales have declined by 7.9%. Operating income, the JPY 1.5 billion of loss have increased.
For the automotive market, slightly going up, but when it comes to the decreasing the volumes of the smartphone, and all in all, we suffer from that, the negative growth due to the impact of the COVID-19. We have to suspend the production line. Due to these impacts, about excluding these impacts, is that then the margin of decline was 14%. Next, Magnetic Application Products and segments. Now, net sales, when it comes to that, due to the volume decline of by 6% of the HDD they have from Q3, and also over the slowdown of the assembly of the HDD, and then also the sales volume of HDD suspension by a 10.5%. This is all in all decline, and the Magnetic Applications. The magnet net sales have declined by 5%.
The operating income, and then we have a JPY 14.4 billion of impairment loss, but excluding this, and also for the COVID-19 negative impacts, and the margin of the decline of the operating income was 35%. Next, the Energy Application Products. Net sales have declined by 26.6% Q on Q basis from Q3, but excluding the impact of the COVID. Margin of decline was 15%. When it comes to secondary battery, due to that's the seasonal impact, and then also for the industrial power supply have been flat. When it comes to the operating income, 63.7% at negative, but excluding that's the impact of the COVID, the actual margin of decline was 49% minus. That's all the performance. Okay, next. Mr. Ishiguro is going to talk about the forecast of the March 2021. I'm Ishiguro.
We want to, first of all, like to appreciate all of you for you join this unusual style of that business performance announcement meetings, and I highly appreciate all of you to join today. I like to have a face-to-face meeting with all of you as soon as possible, and then I sincerely hope that I can meet you again. I have just take over from Mr. Yamanishi, but Mr. Yamanishi actually then speaking is quite different, separated room for having the social distancings. Now we have working on a split team, having the social distancing, all the executives working on that. I sincerely hope that all this problem will be solved. I'd like to talk about the consolidated business performance forecast for March 2021.
First of all, I'd like to talk about the assumption and about the macroeconomic trend, and also, and the demand for the major device markets. Now you're looking at the graphics. This is about the global GDP forecast, on which we have come up with the forecast. On the 2020 calendar year basis, and this is called a calendar year basis, this is the annual forecast of the GDP growth. Our forecast is minus 4%. Region-wise, now that China will already have under the bottom out, although they have just suffered from the infection in the earlier stages, and now they're going to recover from that as soon as possible. On the other hand, then China will come back to that, the macroeconomy, and just like before the COVID-19 infection in China.
Other than China, including Japan, now, when it comes to the negative impact of the economy, we will bottom out sometime in Q2 and gradually picking up. It will be impossible to recover to the level of before the COVID-19 crisis. When it comes to the impact on the business and due to that, the market inventory impact, now we expect that the actual impact will be 2 to 3 months after this impact comes up to the market. Next, let me talk about the assumption of the demands of our major devices related to our business. When it comes to automotives, now the outputs of vehicles, including commercial vehicles in fiscal year 2020. Our expect is that 75 million units, -14% outputs year-on-year basis. This is our assumption of forecast.
Already, part of the markets will suffer from the further decline is argued. On the other hand, when you look at the market in China, they say that the business in China, demand in the market in China have already have a positive growth year on year as early as April. Anyway, we have to watch the market and demand very carefully. On the other hand, we think that xEV markets will expand by 11%. This is assumption in forecast. On the other hand, the smartphone, which is the mainstay of ICT market, our expect is that 124 million units, -9% is that the total demands of the smartphones. Units of a 5G will be expected to be the 376 million. The 5G phone demand in 2020, but expected to be 400 million.
That's why compared to that level, it will be just the wearable devices. The total smartphone demand we expect is 1,240,000,000. When it comes to the nearline drive used for the data center will keep expanding, although that the total HDD market will shrink. At the same time, the PCs or tablets, we expect that the demand will be flat or, and slightly upward. On the other hand, the impact of the COVID-19 will not only have the impact on the market demand, and short-term basis with this expansion of the COVID-19 infection, that will directly affect our supply chain. That will also lead to the suspension of manufacturing operations. Currently, we have some kind of a problem in part of India and part of the Southeast Asia.
They failed to achieve the 100% utilization due to the regulation of the governments. That will lead to this, less than 100% utilization for India and part of Southeast Asia. In most of the other regions, we have already almost the full capacity can be operated. That's why an assumption of this forecast, based on that our operation will be on a full capacity basis. At the same time, we expect there's not any further decline of the macroeconomy due to the second or third wave of infection. This is our assumption. Based on the assumptions, in March 2020, about 5% decline from the March 2020. March 2021, our sales in March 2021 is JPY 1.29 trillion.
For the Passive Components, although there's some automotive and industrial grade markets, with some adverse effect, about Passive Components, net sales will decline by 7% to 10%. When Passive Components segments, high-frequency components or the 5G-related market will be steady. This is our forecast. When it comes to Sensor Application Products, with the expansion of the customer base and the product lineup and the portfolios, we expect 8%-11% positive growth, even in this COVID-19 crisis. When it comes to the temperature and pressure sensor, or that Hall IC used for the automotive cannot be expected to grow so much substantially due to the negative impact on the market.
When it comes to the TMR and magnetic sensor, microphone, MEMS sensor, these are the promising for the future market, that we can expect the new and development of new customers and applications, we expect a positive growth. When it comes to the Magnetic Application Products, when it comes to the HDD head, 2.5-inch and 3.5-inch drive market will gradually decline. At the same time, accordingly, about the outsourcing manufacturing business of 3.5-inch drive will also slow down. With this background, our forecast is that net sales will also slow down. When it comes to the magnetic products, we can expect the expansion of the new project for xEV, but due to that slowdown of the automotive markets as a whole, we expect it will be very difficult to expand substantially about.
All in all, we recognize our forecast of 15%-18% minus. When it comes to Energy Application Products, the shrinking smartphone markets and also infrastructure market shrinking, which related to power supplies. On the other hand, we have very favorable forecast about this, the PC and tablets and other. The telecommuting and the markets or also the mini cell and the power cell, though sales of these and steady, and the business will gradually contribute. The Energy Application Products forecast is almost flat. Based on all these assumptions and forecast, now, just like we have this forecast of consolidated business performance March 2021. Assumption of the currency is at JPY 105 to the USD and JPY 117 to EUR. The net sales forecast is JPY 1.29 trillion, about 5% decline year-on-year.
Due to that impact of COVID-19, now based on declining demand of the net sales is considered, we expect about JPY 180 billion as the net impact due to this corona and the virus and the COVID-19. When it comes to the negative impacts of the income, including this negative impact of the income, will be JPY 70 billion. Income before tax will be JPY 70 billion. Net income will be JPY 48 billion and JPY 880 of earnings per share. Our dividend in the second half of March 2020, we already announced that will be JPY 90, we can pay about JPY 180 to the annual dividend.
When it comes to the dividends of next fiscal year in March 2021, based on our target of the return to the shareholders and this current mid-term business plans, including the payout ratios and amounts, that is why we pay JPY 80 for both the first and second half, in total, JPY 160 in annual dividends. Capital expenditure, JPY 180 billion. Depreciation, JPY 140 billion. R&D expenditures, JPY 120 billion. We would like to aggressively continue all this and the strategies in the growth area. Now in this segment, Mr. Yamanishi, again, will talk about our strategy on the finance. Okay, then. I am Yamanishi again, and I am going to talk about how we can improve our financial strengths in this uncertain environment of the business.
Now when it comes to the business forecast for March 2021, next fiscal year, as our CEO have explained, due to that impact of the COVID-19, our forecast of the net sales and operating income will also lower than the previous year. As we have announced in 2018, that this is the current midterm business plan. This is really last year of the current midterm business plan. In terms of it, very difficult to achieve the target of financial strengths. We can achieve that free cash flow plus for each of these in the year. Now due to that declining and the incomes of this in the March 2021, we need to postpone that year to achieve the targets of financial strengths. Also in March 2021, still, we will put priority on making investments for the future growth areas.
At the same time, we try to recover the results of that growth investments aggressively, so that we can be sure to secure the free cash flow expansion, so that we can achieve the financial strength target as early as possible. On the other hand, in order to deal with this rapidly changing the demand in the market situations, we already have secured the funding capability, including the commitment line, and also we can deal with any uncertainty in the markets with the financial strengths, including this specific liquidity on hand.
When it comes to the return to shareholders, as our CEO also have mentioned earlier, when it comes to return to shareholders, then we failed to achieve the target of earnings per share, so that's why, and we needed to decrease the JPY 20 from the JPY 180 as an amount of dividends, and the plan in March 2020. Anyway, based on the policy of the dividends and also based on the free cash flow level of the midterm business plan, we think that we can still maintain that 30% of the payout ratio going through all of the periods of the current midterm business plan. That's all my presentations of our financial strategy. The last of all, Mr. Ishiguro, again, will explain about our basic ideas for the post-COVID-19 crisis.
When it comes to expansion of the infection of the COVID-19 crisis, for example, that will have the very brutal impact, including supply chains, and also we have adverse effects that the consumer markets and the business market, but still, when it comes to electronics market, which is our main battleground for TDK, we still have very good potential for the future growth. As also explained in the last time, energy transformation, EX, and digital transformation, DX, these two major trends in the market and the society, we think that these are the areas that TDK can make the bigger contributions to change the society and the world. Energy transformation, EX, first of all, we would like to transforming TDK to solidly to the Eco-TDK.
By taking advantage of digital technologies, we'd like to try to secure the maximum output with the minimum input, and also would like to more aggressively and transforming into using the renewable energy. I'd like to make a big contribution to the energy conservations and the low carbon society and to become the sustainable TDK. When it comes to DX, digital transformations, first of all, I'd like to make our own TDK itself transform into as much digitalized as possible. With this pandemic of COVID, that many of the working style and many of the normal life of the world have changed. Also the teleworking will become all the more prevalent practice, and digital marketing, Industry 4.0, AI and materials informatics, RPA. These are all that, and the technologies and the practices that will be all the more realized in an actual market in the field.
We don't deny the importance of the face-to-face human communications, but if we can make use of the digital technologies, we can go beyond the temporal and spatial limits so that we can have the better communication we cannot realize before. Without having to have the physical movement and transportation, we can have the communications with each other. So that including all the tasks, so for the design, development, manufacturing, marketing, all of the aspects, we'd like to promote the digitalization of TDK. At the same time, we'd like to help the society with digitalize it more, so that we can solve that social problem with our digitalization. That's all my presentation. Thank you very much.