HOYA : Presentation for the three months ended Mar.31,2021 (with Transcript)

HOYA CORPORATION

Q4 Financial Results Briefing for the Fiscal Year Ending March 2021

April 30, 2021

Event Summary

[Company Name]	HOYA CORPORATION
[Company ID]	7741-QCODE
[Event Language]	JPN
[Event Type]	Earnings Announcement
[Event Name]	Q4 Financial Results Briefing for the Fiscal Year Ending March 2021
[Fiscal Period]	FY2020 Q4
[Date]	April 30, 2021
[Number of Pages]	28
[Time]	15:00 - 16:02
	(Total: 62 minutes, Presentation: 46 minutes, Q&A: 16 minutes)
[Venue]	Webcast
[Venue Size]
[Participants]	300
[Number of Speakers]	3
	Hiroshi Suzuki	Director, Representative Executive Officer,
		President & CEO
	Ryo Hirooka	Representative Executive Officer & CFO
	Eiichiro Ikeda	Executive Officer & CTO
[Analyst Names]*	Yu Yoshida	CLSA Securities Japan Co., Ltd.
	Masahiro Nakanomyo	Jefferies Japan Limited
	Richard Kaye	Comgest

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A.

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Presentation

Moderator: Now that it is time, HOYA Corporation will begin the financial results briefing for the fourth quarter of the fiscal year ended March 31, 2021.

From the viewpoint of preventing the spread of COVID, the meeting will continue to be held via web conference. Please note that depending on the communication environment, it may be difficult to hear the conversation, or it may be temporarily interrupted.

Today's presenters from the Company are CEO Hiroshi Suzuki, CFO Ryo Hirooka, and CTO Eiichiro Ikeda.

As for today's agenda, Mr. Hirooka will start by explaining the fourth quarter business results, followed by Mr. Ikeda's overview of the IT business, and finally Mr. Suzuki's overview of the Life Care business and overall summary. The remaining time will be used for questions and answers, and the session is scheduled to end at 16:00.

For those of you who are participating via PC today, please refer to the document shared on the screen. We would like to begin with a presentation from CFO Hirooka.

Hirooka: This is Hirooka. Nice to meet you. I will walk you through the results in numbers.

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First of all, revenue was JPY151.4 billion, an increase of JPY16.3 billion or 12% compared to last year. The pretax profit was JPY41.3 billion, an increase of JPY13.6 billion, or 49%, compared to last year. Net income was JPY30.8 billion, an increase of JPY11.1 billion, or 56%, compared to last year.

As I will explain later by business unit, we achieved an overall increase in both revenue and profits, mainly due to an increase in sales of EUV blanks and 3.5-inch HDD substrates.

Next is the impact of foreign currency translation.

This is what would have happened if the rate had not changed at all from last year. In the middle is the impact of foreign currency translation, and the impact on revenue is JPY1.5 billion, which became larger just because of the exchange rate. Therefore, the real YoY growth is JPY14.8 billion after deducting JPY1.5 billion. Excluding JPY500 million of the impact of foreign exchange rates, the real growth in pretax profit is JPY13.1 billion. Excluding the impact of JPY400 million on net income, the real increase will be JPY10.7 billion.

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I will explain one point about extraordinary factors.

In the total expenses, impairment losses are significantly different from last year. This is an increase of JPY4.8 billion compared to last year. As mentioned in the appendix, we have impaired some of the goodwill from past acquisitions.

To add a little more, we acquired an ophthalmic treatment equipment-related company a little over 2 years ago with the aim of entering into areas other than cataracts. It is a very profitable company, and for 1 year after the acquisition, sales and profitability were going very well. However, due to the stagnation of sales in the markets of our customers and inventory adjustments triggered by COVID, the recovery has been slow compared to other medical equipment-related companies in 2020.

The delay in recovery is still continuing, and there are still uncertainties in fiscal 2021, so from an accounting point of view, we have impaired part of the goodwill at the end of this fiscal year in order to make an early provision.

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