HOYA : Presentation for the three months ended Dec. 31, 2019

February 04, 2020 at 02:26 am EST

FY19Q3

F i n a n c i a l R e s u l t s

February 4, 2020@Station Conference Tokyo

7 7 4 1 . T [ A D R : H O C P Y U S ]

H O Y A C O R P O R A T I O N

Financial Results [Ryo Hirooka, CFO]
IT Business Overview
Life Care Business Overview
Summary
Q&A

© 2020 HOYA CORPORATION All Rights Reserved	2

Financial Overview

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue	143.4	146.5	+3.1	+2%
Pretax Profit	39.7	38.3	-1.4	-3%
Net Profit	33.1	29.7	-3.5	-11%

cf. Profit from

ordinary operating 39.9 38.3 -1.6 -4% activities*

*Herein after "Operating Profit"

Revenue increased driven by HDD substrates and LSI blanks. However, profit declined due to factors including a reactionary decline in contact lenses related to the consumption tax hike.

Constant Currency Basis (CCB)

	Previous	Current
(¥bn)	FX Impact		YoY	YoY(%)
Rate (A)	Rate (B)


Revenue	150.1	146.5	-3.6		+6.7	+5%
Pretax	38.7	38.3	-0.3		-1.0	-3%
Profit

Net Profit	29.9	29.7	-0.2		-3.2	-10%

Average Rates	(A)Q3 FY18	(B)Q3 FY19	Variance

US$	¥112.58	¥109.33	+2.9%
EURO	¥128.21	¥121.53	+5.2%
BAHT	¥3.42	¥3.62	-5.8%

Notes RE: Special Items

		Comprehensive Income Statement
(¥bn)	Q3 FY18	Q3 FY19	YoY

Income	145.1	148.2	+3.1
Expenses	105.4	109.8	+4.4


		D&A	6.5	8.7	+2.2
Pretax

	Profit	39.7	38.3	-1.4

Depreciation and amortization increased ¥2.2 bn due to the adoption of a new lease accounting policy (other expenses decrease, resulting in a net-neutral impact related to total expenses).

Life Care Earnings

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	93.9	92.5	-1.4	-2%
Pretax Profit	19.1	15.3	-3.8	-20%

cf.Operating Profit

19.6

15.7

-3.9-20%

cf.OP Margin	20.9%	16.9% -4.0pt

*External revenue

Life Care Earnings (CCB)

(¥bn)	Previous	Current	FX	YoY	YoY(%)
Rate	Rate	Impact


*	95.1	92.5	-2.6	+1.2	+1%
Revenue
Pretax Profit	15.3	15.3	+0.0	-3.8	-20%

cf.Operating Profit 15.7 15.7 -0.0-3.9-20%

*External revenue

IT Earnings

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	48.3	52.7	+4.4	+9%
Pretax profit	21.5	23.5	+2.0	+9%

cf.Operating Profit 21.6 23.6 +2.1 +10%

cf.OP Margin	44.7%	44.9% +0.2pt

*External revenue

IT Earnings (CCB)

(¥bn)	Previous	Current	FX	YoY	YoY(%)
Rate	Rate	Impact


*	53.6	52.7	-1.0	+5.4	+11%
Revenue
Pretax profit	23.8	23.5	-0.3	+2.3	+11%

cf.Operating Profit 24.0 23.6 -0.3 +2.4 +11%

*External revenue

Earnings by Sub-Segment

Healthcare Revenue

Eyeglass Lenses / Contact Lenses

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	69.3	66.8	-2.5	-4%

Constant Currency Basis

(¥bn)

Previous Rate

Current Rate

YoY

YoY(%)

Revenue*	68.6	66.8	-0.7	-1%

*External revenue

Earnings by Sub-Segment

Medical Revenue

	Endoscopes / IOLs
(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	24.6	25.7	+1.1	+5%

Constant Currency Basis

(¥bn)

Previous Rate

Current Rate

YoY

YoY(%)

Revenue*	26.5	25.7	+1.9	+8%

*External revenue

Earnings by Sub-Segment

Electronics

Masks & Blanks / HDD Substrates

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	38.3	43.9	+5.6	+15%

Constant Currency Basis

(¥bn)

Previous Rate

Current Rate

YoY

YoY(%)

Revenue*	44.7	43.9	+6.4 +17%

*External revenue

Earnings by Sub-Segment

Imaging

Optical Lenses, Etc.

(¥bn)	Q3 FY18	Q3 FY19	YoY	YoY(%)

Revenue*	10.0	8.8	-1.2	-12%

Constant Currency Basis

(¥bn)	Previous Rate	Current	YoY	YoY(%)
Rate


Revenue*	8.9	8.7	-1.1	-11%

*External revenue

Balance Sheet

(¥bn)	Q2 FY19	Q3 FY19	QoQ

Non-current Assets	279.8	291.2	+11.3
Current Assets	516.9	522.3	+5.4

Capital	637.0	652.8	+15.9


Non-current Liabilities	31.4	31.1	-0.3
Current Liabilities	128.4	129.5	+1.1

Total Assets	796.8	813.4	+16.7

Capital increased by ¥15.9 bn, mainly due to the cancellation of treasury stock (¥22.3 bn).

Cash Flow

(¥bn)Q3 FY18 Q3 FY19 YoY


Operating CF	34.1	40.1	+6.0

		D&A	6.5	8.7	+2.2





Investing CF	7.9	-11.7	-19.6

Financing CF	-16.3	-27.9	-11.5

		Payments for lease liabilities	-	-2.3	-2.3



Cash & Cash Equivalents	272.3	304.4	+32.1
at the end of the term

Due to applying a new lease accounting policy, D&A (Operating CF) increased, while payments for lease liabilities (Financing CF) decreased; the net impact of this change was neutral.

Share Buyback

Share Buyback #1 :Closed at end of Oct.

Maximum Amount: ¥60 bn

Period: May 8, 2019 to October 28, 2019

Actual Amount Repurchased: ¥24.1 bn (canceled)

Share Buyback #2 :In Progress

Maximum Amount: ¥50 bn

Period: October 30, 2019 to April 23, 2020

Repurchased to date: ¥9.2 bn (as of Jan, 2020)

HOYA repurchased shares worth ¥33.3 bn year-to-date (#1 & #2)

Q4 & Full Year Guidance

✓ We expect the tax-hike impact on our contact lens business to continue, however the impact will ease QoQ.

✓ LSI blanks will maintain momentum driven by strong demand for EUV products. ✓ HDD substrate sales to decline QoQ due to seasonality (Chinese New Year).

However, we expect growth on a YoY basis.

FY19 Q4
	Q4 FY18	Q4 FY19	YoY	YoY(%)
(¥bn)

Sales	141.5	144.6	+3.1	+2%
Pretax Profit	31.4	35.4	+4.1	+13%
Net Profit	29.2	28.2	-1.1	-4%


FY19 Full Year
	FY18	FY19	YoY	YoY(%)
(¥bn)

Sales	565.8	586.0	+20.2	+4%
Pretax Profit	144.7	155.0	+10.3	+7%
Net Profit	122.1	123.0	+0.9	+1%

Financial Results
IT Business Overview [Hiroshi Suzuki, CEO]
Life Care Business Overview
Summary
Q&A

© 2020 HOYA CORPORATION All Rights Reserved	18

IT Snapshot

YoY Sales Growth (Like-for-Like)

+17%

-9%

HDD Substrates	Masks & Blanks	Imaging
(LSI/FPD)

+12%

Overview by Product

LSI Blanks

FPD/LSI Masks

This Quarter

DUV sales dropped slightly due to a customer building stock last quarter. EUV sales grew 80-plus percent YoY.

Going Forward

New EUV fab in Singapore to start operations in April. Start of mass production in H2 FY20 after qualification process.

This Quarter

FPD Masks experienced growth through captured demand in the Chinese OLED market (mainly G6).

Going Forward

Expand OLED business, especially in China, as further growth of the market is expected.

Overview by Product

HDD Substrates

Imaging

This Quarter

3.5" sales was 2.5x due to increased demand related to data centers. 3.5" products now account for 42% of total sales.

Going Forward

New factory in Laos (producing 3.5" substrates) to ship sample products beginning in April. Mass production to

begin by H2 FY20 after qualification process.

This Quarter

Due to market contraction, our imaging-related sales continued to decline.

Going Forward

Make proactive cost savings to protect profitability.

Financial Results
IT Business Overview
Life Care Business Overview[Hiroshi Suzuki, CEO]
Summary
Q&A

© 2020 HOYA CORPORATION All Rights Reserved	22

Life Care Snapshot

YoY Sales Growth (Like-for-Like)

+2%

+2%	-8%	Endoscopes
	*Includes tax
	hike impact
		+0%	+10%
Eyeglass Lenses	Contact Lenses	Other	IOLs
	-0%

Overview by Product

	This Quarter

	Japan sales declined due to the consumption tax hike etc.
	High growth in Europe and Asia continued. New factory in
	Vietnam started test production.

	Going Forward
Eyeglass Lenses
Capture peak season demand (Q4). Gradually ramp up
	the new Vietnam factory.

	This Quarter

	Reactionary decline related to consumption tax hike.
	No. of stores at quarter-end: 326 (including acquisitions)

	Going Forward

Contact Lenses	Continue to expand customer reach through new store
	roll-outs and acquisitions in areas in which we have no
	presence yet.

Overview by Product

IOLs

Endoscopes

This Quarter

Achieved double-digit growth in APAC. Sales of standard products in China was the main contributor.

Going Forward

Prepare high-end product launch in China. We will launch new products going forward including new-type injectors.

This Quarter

New product launch in the Americas was delayed. Sales in Europe grew, as new product launches are proceeding.

Going Forward

Launch new products going forward.

Financial Results
IT Business Overview
Life Care Business Overview
Summary[Hiroshi Suzuki, CEO]
Q&A

© 2020 HOYA CORPORATION All Rights Reserved	26

Financial Results
IT Business Overview
Life Care Business Overview
Summary
Q&A

© 2020 HOYA CORPORATION All Rights Reserved	27

Appendix

Life Care QoQ Earnings

		Revenue	cf. Operating Profit / Margin
93.9	96.3	100.4	20.9%	21.6%
93.8	92.5	19.4%
	18.8%

16.9%

(¥bn)	¥bn)
	(

21.7

19.6 18.1 18.2

15.7

Q3	Q4	Q1	Q2	Q3	Q3	Q4	Q1	Q2	Q3
FY18			FY19			FY18		FY19

*External revenue

IT QoQ Earnings

Revenue

48.3		52.4	52.7
	46.0
	43.7

(bn)			(¥bn)

Q3 Q4 Q1 Q2 Q3

FY18 FY19

*External revenue

cf. Operating Profit / Margin

44.7%	46.0%	46.2%	44.9%
41.8%

21.6 21.2 24.3 23.6

18.3

FY18 FY19

Topics

[Eyeglasses] New Factory in Vietnam Starts Operations

In November 2019, HOYA launched a new eyeglass lens production facility in Quang Ngai, central Vietnam. The facility has two buildings on the eight-hectare site, with a maximum capacity of 140 million units per year (stock lenses). Being one of the largest plants in eyeglass lens capacity, it will cater to the increasing global demand. Currently, the first building has

started test production. The second building will start operations in early FY20.

HOYA Delivers MW10 to Schools for the Blind

"We want to show starry skies to students of schools for the blind by providing scotopic vision eyeglasses." HOYA sponsored a crowd funding

project launched by Nippon Lighthouse, a social welfare service corporation. The crowd funding collected JPY3.5 million which surpassed the target of JPY3 million. Under this project, HOYA provided specially priced scotopic vision eyeglasses, HOYA MW10 HiKARI, to twelve schools for the blind. We will continue to support the activity of this project.

Notes

✓ Accounting standard: IFRS

✓ The fiscal year ending March 2020 is referred to as "FY19" throughout this document.

✓ Figures less than ¥100 million are rounded down. Accordingly, some discrepancies may occur among totals. Ratios are calculated using actual numbers.

✓ Like-for-Like figures exclude foreign exchange and M&A impact as well as other extraordinary factors.

✓ Profit from ordinary operating activities is calculated as reference information for investors; calculated by deducting finance income/costs, share of profits(loss) of associates, foreign exchange gain/loss and other temporary gain/loss from pretax profit.

✓ We have omitted a detailed breakdown of financial statements.

Please refer to the tanshin or the quarterly report for detailed numbers. http://www.hoya.co.jp/english/investor/library.html

Disclaimer

This report is provided solely for the information of professional investors and analysts who are expected to make their own evaluation of the company. This report contains forward-looking statements that are based on management's assumptions and beliefs in light of the information currently available to it and therefore you should not place undue reliance on them. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from that anticipated in these statements. These factors include changes in economic conditions, trends in our major markets, currency exchange rates, etc. We accept no liability whatsoever for any direct or consequential loss arising from any use of this report.

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Hoya Corporation published this content on 04 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2020 07:25:02 UTC

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