We strive daily to be a company that society cancontinue to rely on.

INTEGRATED REPORT 2021

INTEGRATED REPORT 2021

Business Portfolio Management

Source of Our Strengths: Business Portfolio Management
HOYA’s portfolio management aims to secure profitability, stability, and growth potential of the Group as awhole by operating multiple businesses with different characteristics in terms of business model, sensitivity
to economic cycles, etc., to diversify risk.
We examine each business to determine its stage in the lifecycle and allocate more man agement resources
to areas with higher growth potential. We construct our business portfolio based on the survival of thefittest principle by, for example, withdrawing from a business that has lost its competitive edge.
The present two business areas for portfolio management are Life Care and Information Technology.

The HOYA Management System
Based on the idea that “the accumulation of short-term results will produce long-term growth,” we conduct
rapid-cycle reviews and improvement activities on a quarterly basis.
After receiving explanations on growth strategy and operating results from each business division,
executive officers make decisions on the allocation of management resources to each business as well as
any business downscaling or withdrawal decisions, which is the foundation of our business portfolio
management.
HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUP

executive
officers
make decisions
on thestrategy
allocation
management
resources
to eachbusiness
as well as
After receiving
explanations
on growthandofoperating
results
from eachbusiness
division,anybusiness
downscalingor withdrawal
decisions, ofwhich
is the foundationof tooureachbusiness
portfolio
executive
officers
make decisions
on the allocation
management
resourcesbusiness
as well as

management.
any business downscaling or withdrawal decisions, which is the foundation of our business portfolio
management.

INTEGRATED REPORT 2021

Areas of Focus over the Next 10 Years
Areas of Focus over the Next 10 Years
We will continue to rebalance our business portfolio on an ongoing basis without being constrained bywhat
we
are nowtotorebalance
foster budding
growth portfolio
areas foron
thean
next
20 to basis
30 years.
We will
continue
our businessongoing
without being constrained bywhat we are now to foster budding growth areas for the next 20 to 30 years.
Accelerating growth in the Life Care businessin theLife Care andbusiness
Accelerating
growthAlongwith the aging
globalpopulation
growth of the middle-class population derived particularly from
economic
in emerging
countries,anddemandis ofincreasing
for adapting
medicalderived
infrastructure
to from
Along withgrowth
the aging
global population
growththe middle-class
population
particularly
improve thequalitylife (QOL).
In view demandof this background,the Life
Careinfrastructurebusiness as a to
growtheconomic
growth
in ofemerging
countries,
is increasingwe
forregard
adapting
medicalengineactivelydevelopproducts
and undertake
bolt-onacquisitions(i.e., asacquisitions
improveandthewillqualityof life(QOL).competitive
In view of thisbackground,
we regard
the Life
Care businessa growth
designedtosupplement
thefunctionsofexisting
businesses)
inthisbusiness.
engine and will actively develop competitive products and undertake bolt-on acquisitions (i.e., acquisitions
designed to supplement the functions of existing businesses) in this business.
Revitalizing the Information Technology business
Revitalizing
Information
Technology
business
The
Informationthe
Technology
business
maintainsproduct groups with high market share and ha s been amaturebusinessTechnology
with limitedbusinessroom for maintains
further growth.
However,arenow
beginning
identify
certain
The
Information
productgroups wewithhighmarketsharetoandha s been
a
areas
that
can
be
revitalizedasaresultoftechnologicalbreakthroughs
andhave
resumedinvestmentinmature business with limited room for further growth. However, we are now beginning to identify certain

wea have
two businessareas of particularmask blanks
such
More
areasareas.
that canbe specifically,
revitalized as
resultidentified
of technologicalbreakthroughs
and have importance:
resumed investment
in
that
are
compatible
withnext-generation
EUV
lithography
technologies
insemiconductormanufacturing
such areas. More specifically, we have identified two business areas of particular importance: mask blanks
and glasssubstrateswith
for next-generation
data center HDDs,
thelithographymarket of whichis expected
to grow
in responseto thethatare compatible
EUV
technologies
in semicon
ductormanufacturing
increasing
volume of data
creation.
will makeinvestments
in is
these
areastoin grow
termsinofresponse
technology
andand glass substrates
for data
centerWe
HDDs,
the market
of which
expected
to theproduction
capacitytoachieve
growthinsales
andprofit.
increasing volume of data creation. We will make investments in these areas in terms of technology andproduction capacity to achieve growth in sales and profit.
Creating new business areas
As the renewal of the business portfolio is becoming a potential problem, we will strive to rebalance it asappropriate by acquiring new businesses through M&A. We are currently considering “medical services” and“semiconductors”-related areas as major themes and will try to enter specific niche segments within theseareas where we are likely to secure a leading position to achieve sustainable growth .
HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Milestones in Our Growth

Persisting in Profitability
Since its listing on the First Section of the Tokyo Stock Exchange, HOYA has never reported a loss. This isdue to our “business portfolio management” and our strategic byword, to be “a big fish in a small pond.” Wekeep adjusting our business portfolio through investment allocation decisions according to the needs of thetime. We also acquire and maintain high shares in niche markets, which we develop by exploiting ourstrengths, to maximize profits.

HOYA’s continued net profit since its TSE listing in 1973
HOYA has never reported a loss since its TSE listing.

HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

1962

Began production of eyeglass lenses.

1972

Began production of contact lenses.

1973

Listed on the First Section of the Tokyo Stock Exchange.

1974

Began production of photomask substrates for semiconductors.

1983

Began production of photomasks for semiconductors.

1986

Constructed the R&D Center.

1987

Began production of intraocular lenses and glass mold lenses.

1991

Began sales of glass disks for HDDs.

1995

Inv ited the first outside director.

1997

Completed the establishment of the area HQs for Europe, North America, and
Asia.

2003

Shifted to a company with Committees system.
Independent directors represented the majority of the Board of Directors.

2008

Merged with PENTAX Corporation.

2009

Terminated the Crystal Glass business.

2010

Sold the hard disk glass media manufacturing operation.

2011

Sold the PENTAX Imaging Systems business.

2013

Acquired the eyeglass lens development and manufacturing business from
Seiko Epson Corporation.

2014

Acquired a stake in Seiko Optical Products (engaged in sale of eyeglasses andrelated products) and made it a consolidated subsidiary.

2017

Concluded a contract to acquire Performance Optics, LLC. (engaged in
manufacture and sale of eyeglass lenses).

2019

Acquired U.S.-based Mid Labs an d Germany-based Fritz Ruck (manufactureand sales of ophthalmic medical devices).

*HOYA has prepared its consolidated financial statements in accordance with IFRS since the fiscal year ended March 31,
2011 in lieu of the Japanese standard.

HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Market GrowthMarket Growth and HOYA’s Potential
The Life Care business is expected to grow on the basis of the global aging population and improved living
standards in emerging countries. The Information Technology market shows some signs of having matured
in terms of growth cycles, but still has promising areas in technology advancement. We are determined tocontinue investing in such growth areas.

Life Care
Market growth, driven by global aging population and improved living standards in emerging
countries

World Aging Population (65 and over) and Old-Age

Aging global population expands market

Dependency Ratio

The aging global population is expected to boost
demand for eyeglasses due to normal deteriorationof vision by aging. Demand for medical flexible
endoscopes is also anticipated to rise as a result ofpolicies to restrain an increase in government
medical expenditures, through preventive screening.

Source: United Nations, World Population Ageing 2019

World Middle-Class Population

Emerging countries’ improved living standards
expands the market
Middle-income populations are increasing on thebasis of economic growth of emerging countries.
More people will have opportunities to buy
eyeglasses or receive medical treatment, which

HOYA INTEGRATED REPORT 2021

5

Copyright ©2021 HOYA GROUP

Source: United Nations, World Population Ageing 2019means expansion of business opportunities for

INTEGRATED REPORT 2021
HOYA.
means expansion of business opportunities for
Emerging countries’ improved living standards
HOYA.
means
expansionof business opportunities for
expands
the market

World Middle-Class Population

HOYA.
Middle-income populations are increasing on thebasis of economic growth of emerging countries.
More people will have opportunities to buy
eyeglasses or receive medical treatment, whichmeans expansion of business opportunities for
HOYA.
Source: Organisation for Economic Co-operation andDevelopment (OECD)
Source: Organisation for Economic Co-operation andDevelopment (OECD)
Source: Organisation for Economic Co-operation andWorld Eyeglass Lens Market
Development (OECD)

Increase in the elderly and middle-class
population expands the market
Increase in the elderly and middle-classDemandfor eyeglass
lensesis increasing worldwide,
population
expands
the market
Increaseelderly andhigher
middle-classdue
to aginginofthe
populations,purchasing
Demand for eyeglass lenses is increasing worldwide,
population
expands
the market
power
supportedby emerging
countries’ economic
due to aging of populations, higher purchasing
growth,risinghealth consciousness,
and worldwide,
Demandfor eyeglass
lenses is countries’
increasing
power
supportedby emerging
economic
impairment
ofofvisioncaused higher
by use purchasingof computers
due
to
aging
populations,
growth, rising health consciousness, andandsmartphones
foremerging
long hours.
power
supportedbyeconomic
impairmentof visioncaused bycountries’
use of computers

World Eyeglass Lens Market
World Eyeglass Lens Market
Source: Organisation for Economic Co-operation andDevelopment (OECD)

growth,risinghealthandIncreasein theelderly
middle-classandsmartphones
for consciousness,longandhours.
impairment
ofexpands
vision causedby use of computers
population
the market

World Eyeglass Lens Market

and smartphones for long hours.
Demand for eyeglass lenses is increasing worldwide,

HOYA’s estimate

due to aging of populations, higher purchasing

HOYA’s estimate

power supported by emerging countries’ economic
growth,rising healthconsciousness,andmedical
More demand
for minimallyinvasive
impairmentof drives
vision caused
useendoscopeof computers
procedures
growth byin theMoredemandforminimally
invasive
medicalandsmartphones for long hours.
marketprocedures drives growth in the endoscope
More demandinvasive
medical
Medicalexpensesfor
areminimallyincreasing
worldwide,
alongmarketprocedures
drives growthin the endoscopewithaging of populations.
GovernmentsareMedical expenses are increasing worldwide, alongmarket disease prevention and early detection ofpromotingwith aging of populations. Governments are
diseases,
as well as
minimally
invasive
medical
Medical expenses
increasing
worldwide,
along ofpromotingdiseaseareprevention
andearly detection
treatment.
Inparticulartheimportanceofthewith agingasofwell
populations.
Governments
are latter
diseases,
as minimallyinvasive medicalisrisinginpopularity,
as
part
of
the
trend
of
promotingdiseaseandearly ofdetectionofMore demand
forprevention
minimally
invasive
medicaltreatment.
In particular
the importancethe latter
reducing
invasive
medicaltreatment.
Medicaldiseases,well
as minimallyinvasive
medicalprocedures
drivesgrowththeisrisinginas
popularity,
as part inoftheendoscope
trendofflexibleendoscopes,
which
allow
physicians
tolattertreatment.
Inparticulartheimportanceofthemarketreducing invasive medical treatment. Medical
diagnose
and
treat
th
e
patientinaless-invasive
is risingendoscopes,
in popularity,which
as partof thetrend of toflexibleallow
physicians
Medicalexpenses
are increasing
worldwide,
along
way
help
to
fulfillsuchneeds.
reducing invasive
medicaltreatment. Medical
diagnose
and
treat
th
e
patientinaless-invasivewith aging of populations. Governments are
flexible endoscopes, which allow physicians to
way help todisease
fulfill suchneeds. and early detection ofpromotingprevention
diagnose and treat th e patient in a less-invasive
diseases,
as Growthwell as minimallyinvasive medical
Drivers
way Market
help to fulfill
suchneeds.
treatment. In particular the importance of the latter
Aging population
MarketGrowth Drivers
is risingin popularity,
as part of the trend of
Increase in cancer rate
population
reducing Aginginvasive
medical treatment. Medical
MarketGrowthfor
Drivers
Initiatives
disease prevention
flexible endoscopes,
which allow
Increase in cancer
rate physicians toAging population
diagnoseInitiatives
and treat forth edisease
patient prevention
in a less-invasivein cancer
rate
way helpIncrease
to fulfill suchneeds.
Initiatives for disease prevention

HOYA INTEGRATED REPORT 2021

Market Growth Drivers

World Medical Endoscopes Market
HOYA’s estimate(Flexible, rigid, etc.)
World Medical Endoscopes Market(Flexible, rigid, etc.)
World Medical Endoscopes Market(Flexible, rigid, etc.)
HOYA’s estimate

World Medical Endoscopes Market(Flexible, rigid, etc.)

Source: Allied Market Research
Source: Allied Market Research
Source: Allied Market Research

Desire for improvement of QOL andminimally invasive diagnosis and treatment
Desire for improvement of QOL anddevicesminimally invasive diagnosis and treatment
Desire for medical
improvementof QOL and
Improved
infrastructurein emerging
devices
Source: Allied Market Research
minimally invasive diagnosis and treatment
countries
6

devices

Copyright ©2021 HOYA GROUP

countries

INTEGRATED REPORT 2021

Information Technology
Market growth, driven by technological advancement and expansion of application areas

The market of the Information Technology business as a whole is in a matured stage, but a closer look at
each of our products reveals potential growth sub-segments.
Mask blanks for EUV lithography
EUV lithography is a technology used to transfer semiconductor circuit pattern to a substrate using extreme
ultraviolet light. It is a potential key for advanced miniaturization of semiconductor circuits. HOYA
understands client needs accurately and precisely, and properly responds to technological requirementswith the underlying objective of being a leader in the market of mask blanks for EUV lithography.
Nearline server application of glass disks for HDDs
A nearline server is a server used for backups and archiving. The market of nearline servers has con tinued
to undergo significant growth to accommodate the global surge in data volume. Memory storage capacity
per server needs to be increased to realize more efficient server space within data centers. HOYA responds
to such needs by providing customers with thinner disks, enabling an increase in the number of disks perserver. This is helping us to increase disk shipment volume.
In-vehicle camera lenses
In-vehicle camera lenses are expected to be used in sensors that are indispensable for self-driving
technology, and their market is expected to grow rapidly. Leveraging high-value-added glass materials andaspherical glass lenses, which are our strengths, we will capitalize on the market growth.

Milestones in
Our GrowthMarket Growth

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7

Copyright ©2021 HOYA GROUP

Maximizing
Shareholder ValueINTEGRATED REPORT 2021

Maximizing Shareholder Value

Advanced Corporate Governance Structure
To ensure the effective functioning and objectivity of the management supervisory function, five out of six
directors in total are independent outside directors. The fact that all independent directors are corporate
executives is another feature of HOYA’s governance. Diversity in their experiences and backgrounds iscontributing to raising management quality.
Independent Director

Mitsudo Urano
Lead Independent Director
Chairperson of the Nomination Committee

Biography

Independent Director

Yukako Uchinaga
Chairperson of the Audit Committee

Biography

Independent Director

Shuzo Kaihori
Chairperson of the Compensation Committee

Biography

Independent Director

HOYA INTEGRATED REPORT 2021

8

Copyright ©2021 HOYA GROUP

Biography
INTEGRATED REPORT 2021

Independent
Directorp

Hiroaki Yoshihara

Biography

Independent Director

Yasuyuki Abe

Biography

Hiroshi Suzuki

Biography

Pursuing Capital Efficiency
Return to shareholders and capital efficiency are among the key management considerations at HOYA.

Major management indicators and return to shareholders
Dividend per share

HOYA INTEGRATED REPORT 2021

ROE and EPS

9Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Pursuing Capital Efficiency
Return to shareholders and capital efficiency are among the key management considerations at HOYA.

Major management indicators and return to shareholders
Dividend per share

ROE and EPS

Share BuybackMarket Growth

Maximizing
Shareholder Value

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10

Copyright ©2021 HOYA GROUP

Fiscal 2020 Highlights
INTEGRATED REPORT 2021

Fiscal 2020 Highlights

Financial

ESG

COVID-19

Financial

ESG

COVID-19

Financial

5.0%

Sales
Sales
Sales Breakdown
Sales Breakdown

Financial

5.0%
547.9 billion yen

-

Sales
Sales Breakdown

547.9 billion yen

-

5.0%

TheHOYAHOYAGroup’sGroup’sconsolidated
consolidatedsales
salesrevenue
revenuedecreased
decreased5.0%
5.0%year
yearononyearyeartoto547,921
547,921million
millionyen.
yen.The
The
The
InformationTechnology
Technologysegment
segmentenjoyedenjoyedan
anincrease
increaseininsales
salesdue
dueto
tohigherhighersales
salesofofsemiconductor
semiconductor
Information

5.0%

maskblanks
blanksfor
forEUV
EUVlithography,lithography,butbutthetheLife
LifeCareCaresegment
segmentexperienced
experiencedaareduction
reductionininsales
salesdue
dueto
tothe
the
mask
impactof
ofCOVID-19,
COVID-19,resulting
resultingininaadecrease
decreaseininsales
salesininthe
theGroupGroupasasaawhole.
whole.
impact-Pretax11
Profits
PretaxProfits
Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

impact of COVID-19, resulting in a decrease in sales in the Group as a whole.

INTEGRATED REPORT 2021

Pretax Profits
Pretax Profits Breakdown by Segment

+

8.1%

159.2 billion yen

Pretax profits reached a record high due to such factors as higher profits associated withthoroughgoing cost management as well as the sales growth in the Information Technology segment.

Product Sales/Profit Margins/Sales Growth Rate

Note: The growth rates of sales are after exclusion of the effects of fluctuations in foreign currency exchange
rates.

HOYA INTEGRATED REPORT 2021

12

Copyright ©2021 HOYA GROUP

Sales in the Life Care Segment

Note: The growth rates of sales are after exclusion of the effects of fluctuations in foreign currency exchange
rates.

INTEGRATED REPORT 2021

Sales in the Life Care Segment

-

8.9%

341.8 billion yen

Sales in the Life Care segment decreased 8.9% year on year to 341,801 million yen. Sales are on arecovery trend overall, despite variations among businesses and countries/regions. However, eachbusiness was heavily impacted by COVID-19 in the first half of fiscal 2020, resulting in a decrease insales in the Life Care segment as a whole.

Like-for-Like* Sales Revenue
Growth Rate of
Products in the Life Care Segment

Life Care Sales Breakdown* Year-on-year comparison on the same basis as theprevious period, adjusted to eliminate the effect of changes
in exchange rates or M&A activities.

Pretax Profits in the Life Care Segment

+

2.1%

63.5 billion yen

While costs were curtailed in preparation for the fall in demand due to the impact of COVID-19, recovery
in sales turned out to be faster than expected, leading to higher pretax profits than in the previous fiscal
year.
HOYA INTEGRATED REPORT 2021

13

Copyright ©2021 HOYA GROUP

+

2.1%

63.5

INTEGRATEDREPORT
2021
billionyen

While costs were curtailed in preparation for the fall in demand due to the impact of COVID-19, recovery
in sales turned out to be faster than expected, leading to higher pretax profits than in the previous fiscal
year.

Sales in the
Information Technology Segment

+

2.2%

201.0 billion yen

Sales in the imaging business decreased due to the impact of COVID-19, whereas sales of semiconductor
mask blanks substantially increased as a result of the increase in demand of research and development
for EUV lithography, which is a cutting-edge lithography technology. This has resulted in an increase insales in the Information Technology segment as a whole from the previous fiscal year.

Information Technology Sales
Breakdown

Like-for-Like* Sales Revenue
Growth Rate of Products in the
Information Technology Segment* Year-on-year comparison on the same basis as theprevious period, adjusted to eliminate the effect of changes
in exchange rates or M&A activities.

Pretax Profits in the
HOYA GROUPHOYA INTEGRATED REPORT 2021
14 Copyright ©2021
Information Technology
Segment

previous period, adjusted to eliminate the effect of changes
in exchange rates or M&A activities.

INTEGRATED REPORT 2021

Pretax Profits in the
Information Technology Segment

+

7.7%

94.9 billion yen

Pretax profits increased, rising 7.7% from the previous fiscal year, to ¥94,905 million. A contributing
factor was the growth in semiconductor mask blanks driven by increasing development demand for
products compatible with EUV lithography.

Financial

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15

Copyright ©2021 HOYA GROUPESGINTEGRATED REPORT 2021

ESG
Proportion of Independent Directors

83.3%(5 of 6)HOYA appointed its first independent director in 1995, when corporate governance was barely discussed
in Japan. In 2003, the Articles of Incorporation were amended to stipulate that more than half ofdirectors be outside directors. Currently, 83% of HOYA’s directors are outside directors, an extremely highlevel even by global standards.
*As of the end of June 2021

Corporate Management Experience of Independent Directors

100%(5 of 5)

While many companies appoint lawyers, accountants, or academics as outside directors, all of HOYA’s
outside directors are persons with extensive experience in corporate management. The diverse fields ofexperience among HOYA’s five outside directors includes electronics, IT services, education, and thefood-related industry. This diversity makes for lively discussion at meetings of the Board of Directors.

HOYA INTEGRATED REPORT 2021

16

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021
Number of Employees by Region
Non-Japanese Top Management at
OverseasTop
Subsidiaries
Number of Employees by Region
Non-JapaneseManagement at
Proportion of Employees Working
Overseas Subsidiaries
in Locations Outside Japan
Proportion of Employees Working
in Locations Outside Japan

>
>

90
%
90%

>
>

90
%
90%

More than 90% of HOYA’s employees work in locations outside Japan. Major manufacturing centers inAsia producing eyeglass lenses and HDD substrates account for the greatest proportion, with around
More than 90% of HOYA’s employees work in locations outside Japan. Major manufacturing centers in
70% of employees in this region. HOYA actively recruits diverse personnel of different races, ethnic
Asia producing eyeglass lenses and HDD substrates account for the greatest proportion, with aroundgroups, nationalities, religions, etc., in order to gain access to exceptional global talent and create n ew
70% of employees in this region. HOYA actively recruits diverse personnel of different races, ethnic
ideas and values. In particular, HOYA is promoting the appointment of local employees to topgroups, nationalities, religions, etc., in order to gain access to exceptional global talent and create n ew
management positions at its overseas subsidiaries.
ideas and values. In particular, HOYA is promoting the appointment of local employees to top
management positions at its overseas subsidiaries.

Proportion of Female Employees
Proportion of Female Employees
Japan
Overseas*

28.0
%
28.0%

55.7
%
55.7%
Overseas*Japan

Up 2.0 ppt YoY
Up 2.0 ppt YoY

The proportion for total HOYA (domestic + international) is 53.0%.
HOYA INTEGRATED REPORT 2021

17

Copyright ©2021 HOYA GROUP

Proportion of Female Leaders

The proportion for total HOYA (domestic + international) is 53.0%.
INTEGRATED REPORT 2021

Proportion of Female Leaders
Overseas*

Japan

12.7%

43.3%

Up 1.9 ppt YoY — Higher than the
manufacturing industry average(6.4%)The proportion for total HOYA (domestic + international) is 34.5%.
HOYA is increasing the proportion of female employees and leaders as part of its “Minkatsu” diversity
project to create a friendly work environment for everyone. In addition to expanded recruitment andoccupational fields for women, HOYA holds career advancement seminars for female employees, andpromotes cross-divisional exchange.
* This year’s survey differs from the previous survey method because the scope of the survey was expanded regarding
overseas employees.

Financial

ESG

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18

Copyright ©2021 HOYA GROUPCOVID-19

INTEGRATED REPORT 2021

HOYA’s Initiatives against the COVID-19
Pandemic
Measures and Responses

The HOYA Group is taking all possible measures to ensure the safety and health of its employees, theirfamilies, local residents, business partners and all other stakeholders, and to ensure the safe continuation ofits business activities in the face of the spread of COVID-19.
Establishment of Global COVID-19 Task Force
Having restru ctured the respective Crisis Management Teams of the head office and each business divisionthat had been organized in accordance with the Guidelines on Countermeasures Against New Strains ofInfluenza and Other Infectious Diseases in response to COVID-19, our Crisis Management Teams take thelead in taking such action as promptly collecting information and overseeing countermeasures.

Preparation of the HOYA Global Post-COVID-19 Work Handbook
We have prepared the HOYA Global Post-COVID-19 Work Handbook, covering the most recent findings of
COVID-19, measures to prevent infections in operational locations/factories, how to respond anddetermination of whether or not to attend work in the event that anyone becomes infected or comes into
close contact with an infected person, and other knowledge and information required to protect the healthand safety of employees and continue business activities in a safe manner, as well as the HOYA Group’s rules,
among others. We have translated the Handbook into 21 languages and distributed it so that we could makeits content thoroughly known among all employees in the HOYA Group. Having conducted education andawareness-raising activities targeted at all employees through e-learning, the percentage of employees who
took the e-learning course reached almost 100% in October 2020. We have also conducted an internal audit
on the adaptation/compliance status regarding matters stated in the Handbook, more or less 100% of which
has been completed.
HOYA INTEGRATED REPORT 2021

19

Copyright ©2021 HOYA GROUP

awareness-raising activities targeted at all employees through e-learning, the percentage of employees who
took the e-learning course reached almost 100% in October 2020. We have also conducted an internal audit
on the adaptation/compliance status regarding matters stated in the Handbook, more or less 100% of which
has been completed.

INTEGRATED REPORT 2021

Promotion of Flexible Workstyles
In 2014, the HOYA Group launched the ”Minkatsu” diversity project to create a friendly work environment foreveryone, and has since been aiming to create a work environment in which each and every employee can feela sense of fulfillment from work and play an active role by fully demonstrating his/her ability.
In response to the COVID-19 pandemic, we have been promoting flexible workstyles that not only give more
freedom to employees in terms of their workstyle—by such means as promoting Work From Home (WFH) andstaggered commuting and abolishing core hours in the flextime system—but are also effective in terms ofboth infection prevention and productivity improvement.
Also, given that WFH is being promoted in each country, we have created the IT Remote Working Handbook
and shared it within the HOYA Group to enable employees to perform tasks at home and remotely in a safeand efficient manner.

Corporate Citizenship

In order to support front-line healthcare personnel tackling
COVID-19, HOYA Vision Care ATC (Advanced Technology Center)
Ramsey in the U.S., which is engaged in the eyeglass lenses
business, manufactured and donated 28,000 face shields todoctors and nurses who are providing care for COVID-19
Furthermore, PENTAX Medical, which is engaged in the medical
patients, in partnership with Oakley, Inc., a manufacturer andendoscope business, donated medical equipment such as
distributor of sunglasses and other eyewear.
bronchoscopes and intubation scopes (worth US$430,000).
Furthermore, PENTAX Medical, which is engaged in the medical
endoscope business, donated medical equipment such as

Production of face shields

Production of face shields

bronchoscopes and intubation scopes (worth US$430,000).

Impact on Business
Impact on Business

Due to the imposition of restrictions on economic activities in each country aimed at curbing the spread of
COVID-19 infections, the Life Care segment was mainly impacted in terms of sales (i.e., customer demand).
In conjunction with the spread of vaccinations and the resumption of economic activities worldwide, sales
Due to the imposition of restrictions on economic activities in each country aimed at curbing the spread of
are on a recovery trend, and normality is being restored in businesses.
COVID-19 infections, the Life Care segment was mainly impacted in terms of sales (i.e., customer demand).
In conjunction with the spread of vaccinations and the resumption of economic activities worldwide, sales
Impact on Sales
are on a recovery trend, and normality is being restored in businesses.
HOYA INTEGRATED REPORT 2021
20 Copyright ©2021 HOYA GROUP
Impact
Sales
Life
CareonSegment

Due to the imposition of restrictions on economic activities in each country aimed at curbing the spread of
COVID-19 infections, the Life Care segment was mainly impacted in terms of sales (i.e., customer demand).
In conjunction with the spread of vaccinations and the resumption of economic activities worldwide, sales
INTEGRATED
2021
are on a recovery trend, and normality is being
restoredREPORTin businesses.

Impact on Sales

Life Care Segment
Eyeglass lenses: Sales opportunities decreased due to the impact of temporary closure of eyeglass
stores/opticians—i.e., our customers—and restrictions on outings, etc.
Contact lenses: The market temporarily shrank due to the decrease in sales opportunities as a result of
the temporary closure and reduced operating hours of stores belonging to our specialty retail store chain
Eyecity, as well as the reduced frequency of contact lens use attributable to fewer opportunities to go out
and more hours spent at home.
Medical endoscopes: Investments were suppressed due to restrictions on sales activities targeted at
hospitals and changes in the business environment surrounding hospitals.
Intraocular lenses for cataracts: Number of surgeries decreased due to such factors as postponement ofcataract surgery to avoid infection risks.
Net sales in the Life Care segment were heavily impacted, especially in the first half of fiscal 2020. However,each segment is on a recovery trend, despite variations between countries/regions.
Information Technology Segment
On the other hand, the impact on the Information Technology segment was relatively limited in terms of sales;in particular, HDD substrates were very strong against the backdrop of expanding demand for storage indata centers and mask blanks for EUV lithography performed extremely well on the back of the increase indemand stemming from brisk research and development of next-generation semiconductors.
Impact on Production

Despite the temporary shutdown, decrease in operating rate, etc., at some operational locations, both Life
Care and Information Technology segments have not been substantially impacted in terms of business
operations (as of July 2021). However, we are keeping a close watch on the situation as it may be affected by
future infections and the closure of manufacturing sites at the request of governments.

HOYA INTEGRATED REPORT 2021

21

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Milestones
Milestonesin
inOur
Our Growth
GrowthHOYA INTEGRATED REPORT 2021

22

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

23

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Interview with the CEO
Interview with the CEO

Hiroshi Suzuki
President & CEO

Hiroshi Suzuki
President & CEO

Please provide an explanation of the Company’s financial results for the fiscal
year ended March 31, 2021 (fiscal 2020), especially with respect to factors behind
Pleaseprovide an explanation
theCompany’s
financialresults
for thefiscalin
the increase/decreasein sales ofandfactors
behindthe change
in profit
marginyear
March31,taking2021 (fiscal
especiallytoanything
factors behindeach ended
business.
Also,
a look 2020),
back overthe pastwith
year,respectis thereyouthein sales anything
and factors
behindchange inprofit margin in
asthe
unfinishedbusiness?
rateincrease/decrease
highly, or on the contrary,
deemedeach business. Also, taking a look back over the past year, is there anything you
In fiscal 2020, the Company experienced a reduction in sales of 5% from the previous fiscal year, torate highly, or on the contrary, anything deemed as unfinished business?

547,921 million yen, primarily as a result of the Life Care business being impacted by the COVID-19

pandemic,
but theachieved
a substantial
increasein profits,i.e., profit
taxprevious
increased
8.1%
year
In fiscal 2020,
Company
experienced
a reduction
in salesof 5% before
from thefiscal
year,
toon
year,
to 159,218
millionyen, and
foroftheyear onyear,
to 125,221
millionyen. With
547,921
million yen,primarily
as profita result
theyear
Liferose
Care9.3%
businessbeing
impactedby theCOVID-19

respect to profit
margins,
Company’s
profitinbefore
taxi.e.,ratio
increasedbasis points
fromonthepandemic,
but achieved
a thesubstantial
increase
profits,
profitbefore by
tax360increased
8.1% year
previous
fiscal year,
to 29.1%.
year,
to 159,218
millionyen, and profit for the year rose 9.3% year on year, to 125,221 million yen. With
respect to profit margins, the Company’s profit before tax ratio increased by 360 basis points from the
I appreciate the fact that, despite the extremely tough and unprecedented business environment, theprevious fiscal year, to 29.1%.
Group worked together as one, reduced costs in a flexible manner, and achieved higher profits in such an
emergencywhichis h ighlyof HOYA.
One thing we business
regret is thatwhile our the
I appreciatesituation,
the fact that,
despitethecharacteristic
extremely toughand unprecedented
environment,“defense”
wasstrong,our“offense”
fell
short
of
takingadvantageofsuchasituation
tocatch in such an
Group worked together as one, reduced costs in a flexible manner, and achieved higher profits
competitorssituation,
off their guard.
emergency
which is h ighly characteristic of HOYA. One thing we regret is that while our“defense” was strong, our “offense” fell short of taking advantage of such a situation to catch
By business segment, the Life Care segment was generally impacted by lockdowns and other restrictions
competitors off their guard.
imposed to prevent the spread of COVID-19 infections. On the other hand, the Information Technology
segment
ex perienced
limitedimpact;in particular,
extreme ultraviolet
(EUV)
mask
blanksandBy businesssegment, relatively
the Life Caresegment
was
generally impacted
by lockdowns
and
other
restrictions
substrates
for
hard
disk
drives(HDDs)
fordata
centers
performed
extremely
well.
The
growthofEUV
imposed to prevent the spread of COVID-19 infections. On the other hand, the Information Technology
mask blanks
was driven
by the further
boost ininresearchandextreme
developmentof next-generation
segment
ex perienced
relatively
limited impact;
particular,
ultraviolet(EUV) mask blanks andsemiconductors
by semiconductor
manufacturers
and foundries,
the growthof HDD
substrates
substrates for harddisk drives (HDDs)
for data centers
performedwhile
extremely
well. The
growthof EUV for
data
thefurther
ongoing
expansionof storage
demand at data
centers.
maskcentersblanks stemmed
was drivenfrom
by theboost
in researchand developmentof next-generation

semiconductors by semiconductor manufacturers and foundries, while the growth of HDD substrates fordata centers stemmed from the ongoing expansion of storage demand at data centers.

Please describe the impact of COVID-19 on each business and the future outlook.
Also, what is your interpretation of the impact of changes in the environment
toward the post-COVID-19 era (the “new normal”) on the Company, in terms of its
positive and negative aspects?
Copyright ©2021 HOYA GROUPHOYA INTEGRATEDREPORT 2021
As I have always said, forecasting
is possible
for up24
to thenext six months or so, but to be honest, what

will happen in a year’s time is anyone’s guess. We can be more accurate by steadily putting our mind toAlso, what is your interpretation of the impact of changes in the environment
toward the post-COVID-19 era (the “new normal”) on the Company, in terms of its
positive and negative aspects? INTEGRATED REPORT 2021
As I have always said, forecasting is possible for up to the next six months or so, but to be honest, what
will happen in a year’s time is anyone’s guess. We can be more accurate by steadily putting our mind to
the Company’s foreseeable operating performance in three months’ time and six months’ time, rather
than trying to predict things that are uncertain, as substantiated by past trends in operating
performance.
With this as an assumption, the COVID-19 infection situation has repeatedly been undergoing the cycleof improvement and deterioration due to such factors as variant strains, and the situation remains
unpredictable. With that said, normality should gradually be restored in the world along with theprogress in vaccinations. While eyeglasses and other industries with large exposure to off-line sales
channels (brick-and-mortar stores) have suffered a huge impact, demand is steadily recovering, inconjunction with the resumption of economic activities. Gradual recovery is also being observed withrespect to medical-related products, which had been affected by the fall in the number of surgeries andthe suppression of capital investments. In the Life Care business, progress toward digitization is under
way to a certain extent, but no major change is expected to take place in terms of the industrial structure
itself.
In the Information Technology business, workstyle reform triggered by the pandemic and theacceleration of digital transformation (DX) might lead to the expansion of demand for the Company’s
semiconductor-related products (mask blanks and photomasks) as well as data-center-related products(HDD substrates).

What are your views on the directionality of the Company’s business portfolio
going forward? In particular, please elaborate on new domains that you wish to
add and those that you wish to curtail. Also, please explain the Company’s policy
for merger and acquisition (M&A).
My biggest job remains unchanged, that is, to reform the Company’s business portfolio to adapt tochanges in the environment, and to allocate management resources to each business. Our basic
approach is to add domains that are adjacent to our existing business domains through M&A, whether
vertical or horizontal. Instead of exclusively focusing on M&A that complements existing businesses(bolt-on acquisitions), we are also considering adding domains in the form of new businesses, rather
than pursuing synergies with existing businesses.
Medical domains are promising as target domains. That said, pharmaceuticals are difficult for us. A
domain that is close to our existing businesses may be medical devices, particularly the ophthalmology
domain. In 10 years’ time, the industry will likely have substantially changed, giving rise to niche markets
and opportunities. On the other hand, on the technology front, communication is a tough nut to crack
after all, and HDDs might no longer have any market in the long run. Under these circumstances, thesemiconductor business domain enjoys stability in the long run, so we are constantly monitoring nichebusiness domains surrounding the semiconductor industry.
A common approach is to buy up a struggling business from another company and enhance it byintroducing a proprietary management system, but this is not necessarily efficient. To put it bluntly, ouraim is to buy up a business that will succeed without us having to do anything. Also, in regard to price,
we place importance on performing calculations related to future returns in a logical manner andmaintaining discipline. It is important to be disciplined enough to pull out when the price is higher than
the theoretical price, even by one yen. In that sense, offers currently on the market are more or lessoutside our scope in terms of valuation. We intend to acquire businesses that enable us to reliably earn
returns through synergyHOYA
effects
with our existing businesses.
INTEGRATED REPORT 2021
25 Copyright ©2021 HOYA GROUP
While there are no specific businesses currently being considered for curtailment or withdrawal, we have

aim is to buy up a business that will succeed without us having to do anything. Also, in regard to price,
we place importance on performing calculations related to future returns in a logical manner andmaintaining discipline. It is important to be disciplined enough to pull out when the price is higher than
the theoretical price, even by one yen. In that sense, offers currently on the market are more or less
INTEGRATED REPORT 2021

outside our scope in terms of valuation. We intend to acquire businesses that enable us to reliably earn
returns through synergy effects with our existing businesses.
While there are no specific businesses currently being considered for curtailment or withdrawal, we haveretained successful businesses and strong businesses and, as a result, reinforced our business portfolio
to date. A business that fails to succeed even when competent people put in hard work must bequestioned as to whether its business domain has any potential in the first place; if it is deemed futile, wewill quit decisively.

Reportedly, HOYA is a group of business divisions that are completely financiallyindependent of each other, and each business division has a different culture.
With this in mind, is there a corporate culture that is universal within the HOYA
Group that serves as its source of strength?
As we have optimized organizations, systems, and the like in line with the respective characteristics oftheir business domains, it is true that each business division has a different culture. The personnel
system also varies from division to division, and transfers and other exchanges of employees between
business divisions are limited. Employees may have a sense of belonging to their respective businessdivisions, but their sense of belonging to HOYA is weak. It is fair to say that HOYA is distinctive for its
strong centrifugal force rather than centripetal force. In this context, “thinking in numerical terms” maybe regarded as our universal culture. Rather than measuring things based on a single yardstick, we use
coefficients that vary among businesses. The culture of getting a grasp of things logically based on
numbers without any dynamics being involved other than those that translate into profits—for example,
factions, academic cliques, and other forms of noise and bias—has been developed universally in thehistory of HOYA.

HOYA’s corporate governance has been acclaimed for being progressive, as
reflected in its independent outside directors accounting for the majority of Board
members. On the other hand, some people question why Mr. Suzuki, internal
director and CEO, concurrently serves as the Chairperson of the Board of
Directors. What is your response to this? Also, now that 21 years have alreadypassed since you assumed the current position in 2000, what are your thoughts
about your successor?
In the Board of Directors of the Company, Mr. Mitsudo Urano serves as the Lead Director, andindependent outside directors have extremely strong power as they account for five out of six Board
members, constituting the majority of the Board. I serve as the Chairperson of the Board of Directors
based on the view that nothing would be more rational than for me to preside over the Board meetings,
given that I have the deepest understanding of businesses and internal matters. However, nothing isever decided at my discretion, and if the Company’s operating performance deteriorates I will be rejectedas CEO by the outside directors. In actual fact, there have been cases in which I was told to leave theroom as they needed to discuss something in confidence; if I had not been asked to come back, I could
very well have just packed my bags and gone home.
In regard to a succession plan, the Nomination Committee, consisting exclusively of outside directors, isformulating a plan. Although I offer my opinions on candidates and other matters, I am not a member of
Copyright©2021 HOYA
the Nomination Committee,
I have noright2021
to makedecision.
In GROUP
the timeframe of the next 10 to 20
HOYAsoINTEGRATEDREPORT
26 anyyears, health care and medical d omains that are more complex in operations and more global in scale areroom as they needed to discuss something in confidence; if I had not been asked to come back, I could
very well have just packed my bags and gone home.
In regard to a succession plan, the Nomination Committee, consisting exclusively of outside directors, is
INTEGRATED REPORT 2021

formulating a plan. Although I offer my opinions on candidates and other matters, I am not a member of
the Nomination Committee, so I have no right to make any decision. In the timeframe of the next 10 to 20
years, health care and medical d omains that are more complex in operations and more global in scale are
expected to expand, so candidates will likely be sought from such a perspective. For the continued,
perpetual survival and prosperity of HOYA into the future, I believe my mission is to pass on HOYA in astronger state than before to the next-generation management team.

Interest in environmental, social, and governance (ESG) has been growing not
only among investors but also among a wide range of stakeholders including
customers and suppliers nowadays. What is your interpretation of therelationship between ESG initiatives and corporate value? Also, please explain
what you think is the most important in promoting ESG.
As for ESG, I think it is no good trying to please everybody, and armchair discussions alone will not cut
the mustard either. There is no point discussing ideals regarding “the vision we should pursue”; whatmatters is “How exactly are we going to achieve the goals?” I also believe continuity is important, so
anything unsustainable should not be carried out.
In terms of environmental, the reduction of CO 2 emissions is becoming increasingly important. Being a
manufacturer, the Company uses an extremely large amou nt of electricity in its manufacturing
equipment and clean rooms. We need to replace equipment with units that are more energy-efficient.
However, the conventional equation in which the reduction of CO 2 emissions also translated into cost
reduction has started to fall apart, giving rise to the need for discussions at the level of international
politics, not just at the corporate level. Going forward, w e will look into options, including those otherthan replacing manufacturing equipment.
In terms of social, let me talk a little bit about diversity. In the HOYA Group, employees are given equal
opportunities, regardless of gender, race, and so forth. Personnel affairs are decided with an extremely
simple, flat mindset, putting highly capable individuals in charge of appropriate positions. HOYA is a
Ja panese company, but no less than 90% of its employees are non-Japanese nationals, and members ofthe management team of its local subsidiaries in each country vary widely in terms of nationality andrace. Taking a look at gender diversity, for example, almost all of our local subsidiaries in Thailand have afemale president, but this is rather attributable largely to factors specific to the country a nd society
itself. The fact that many of the current systems in society have been created by men cannot be denied;unless we create an environment in which women can demonstrate their capabilities, such a society
cannot be deemed truly sustainable. Let me also add that I question myself as to whether it is right tojust hire a certain number of women or appoint a female director for the sake of meetin g numericaltargets.
ESG initiatives will undoubtedly translate into higher corporate value. It ultimately boils down to thequestion: “What kind of value has been created for society?” Beating the competition is not the only
measure of a company’s strength. The objective of a company is to undergo perpetual development, so
in an extreme case, even if the company is acquired, it will be no problem as long as this objective can befulfilled.
While there may be instances in which discrepancies may arise with the yardstick of capital markets(market capitalization), I believe they will be reconciled in the long run.

HOYA INTEGRATED REPORT 2021

27

Copyright ©2021 HOYA GROUP

Please describe the past results and future approach regarding shareholder
returns, including share buybacks. Also, what message do you wish to convey toWhile there may be instances in which discrepancies may arise with the yardstick of capital markets(market capitalization), I believe they will be reconciled in the long run.
INTEGRATED REPORT 2021

Please describe the past results and future approach regarding shareholder
returns, including share buybacks. Also, what message do you wish to convey toshareholders and investors, including priorities and noteworthy matters in the
Company’s relationship with them and the Company’s progress towardsustainable growth?
Our approach remains unchanged in that we will use funds by giving priority to investments aimed atsustained growth for the future. However, M&A, which forms the core of our growth strategy, will depend
heavily on the existence of opportunities as well as valuations; therefore, if these factors do notmaterialize, and consequently, surplus funds arise, our basic policy is to return the funds toshareholders. In the past year, the Company executed a share buyback amounting to 80 billion yen in
total, accounting for approximately 1.7% of the total number of outstanding shares, and retired theshares after acquiring them. Going forward, we will continue to conduct management that gives priority
to capital efficiency by allocating funds in a flexible manner and proactively making growth-oriented
investments and generating shareholder returns while keeping an eye on the balance with investment
opportunities.

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28

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

HOYA Value Creation ModelManagement CapitalBusiness model

Products and services

Social value

HOYA INTEGRATED REPORT 2021

29

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Social value

VisionFor a Better Tomorrow
Solve eye health issues
Alleviate patients' burden by promoting minimally invasive medical treatment
Improve safety and work efficiency, develop technologies that support the big data society

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

30

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

HOYA’s ESG Approach
Amid the growing interest in Environment, Social and Governance (ESG) issues among stakeholders, the
HOYA Group established the ESG Committee headed by the CEO in August 2019, with the aim of identifying
items that contribute to the long-term growth of the HOYA Group (i.e., material issues), promoting theirdisclosure and pushing ahead with ESG activities.
In fiscal 2020, we not only engaged in normal activities such as dealing with investors related to ESG,
providing information to information vendors and collecting information, but also analyzed information to
be disclosed in accordance with ISO26000 by utilizing an external agency and performed specific tasks to
prepare for the identification of material issues.

Examination status of material issues

The Company’s material issues are examined by selecting those deemed as material issues by the Company
from the SASB (Sustainability Accounting Standards Board) Materiality Map.
As a result of the ESG Committee’s examination and interviews with investors, GHG Emissions, ProductQuality & Safety, Employee Engagement, Diversity & Inclusion and Supply Chain Management were chosen
as candidate material issues. Material issues are scheduled for identification (approval by management) in
fiscal 2021.
Material
issue
accordingto HOYA’s
ESG
Committee

Material
issue
accordingtoinvestors

Semiconductors

Company
as a whole

Company
as a
whole

○

○

○

EnergyManagement○○

Water &
Wastewater
Management○○

Waste &
Hazardous
Materials
Management○○

Material issue
according to SASB

General issue category
Environment

MedicalEquipment& Supplies

HardwareGHG Emissions
Air Quality

Ecological
Impacts
Human Rights &Community
RelationsCustomer Privacy

HOYA INTEGRATED REPORT 2021

Data Security○

31

Copyright ©2021 HOYA GROUP○○As a result of the ESG Committee’s examination and interviews with investors, GHG Emissions, ProductQuality & Safety, Employee Engagement, Diversity & Inclusion and Supply Chain Management were chosen
as candidate material issues. Material issues are scheduled for identification (approval by management) in
fiscal 2021.

INTEGRATED REPORT 2021

Material issue
according to SASB

General issue category
Impacts
Environment

SocialCapitalGHG
Emissions
Human
Rights &Community
Air Quality
Relations
EnergyCustomer Privacy
Management
Data Security
Water &
Wastewater
Access &Management
Affordability
Waste& Quality &Product
Hazardous
SafetyMaterials
Customer Welfare
Management
Selling Practices
Ecological& Product
Labeling

MedicalEquipment& Supplies

Hardware

Semiconductors

Material
issue
accordingto HOYA’s
ESG
Committee

Material
issue
accordingtoinvestors

Company
as a whole

Company
as a
whole

○

○
○

○

○

○

○

○

○
○

○

○

○

○

○

○

○

○

○

○

○

○
○
○

○
○

○

Labor Practices

Human
Capital

Employee Health& Safety
Employee
Engagement,
Diversity &Inclusion
Product Design &Lifecycle
Management○

Business Model
Resilience
Business
Model &
Innovation

Supply Chain
Management
Materials
Sourcing &Efficiency

○

○

○

○

Physical Impactsof Climate
ChangeBusiness Ethics○○

Competitive
Behavior

Leadership &GovernanceManagement of
the Legal &Regulatory
Environment
HOYA INTEGRATED REPORT 2021
Critical Incident

○

○
32

Copyright ©2021 HOYA GROUPAs a result of theProduct
ESG Committee’s
Design & examination and interviews with investors, GHG Emissions, Product○○Quality & Safety, Lifecycle
Employee Engagement, Diversity& Inclusion
and Supply○ Chain Management were chosenManagement
as candidate material issues. Material issues are scheduled for identification (approval by management) in
fiscal 2021.

Business Model
Resilience

Business
Model &
Innovation

Supply Chain
Management

Leadership &Governance○Materials
Sourcing &Efficiency

Physical Impactsof Climate
General issue
category
ChangeEnvironment

INTEGRATED REPORT 2021

Business
EthicsGHG
Emissions

Material
issue
accordingto HOYA’s○
ESG
Committee

Material○
issue
accordingtoinvestors

Semiconductors

Company
as a whole

Company
as a
whole

○

○

○

○
Material issue
according to SASB○

MedicalEquipment& Supplies

Hardware○Competitive
Air
Quality
Behavior
EnergyManagement of
the Legal &Water &
Regulatory
Wastewater
Environment
Management
Critical Incident
Waste &
Risk Management
Hazardous
Systemic Risk
Materials
Management

○

○
○

○

○

○
○

○

○

Ecological

HOYA INTEGRATED REPORT 2021

33

Copyright ©2021 HOYA GROUP○INTEGRATED REPORT 2021

Corporate Governance
Basic views

HOYA promotes management with the aim of maximizing its corporate value based on the recognition that
corporate governance is a matter of utmost importance for management. As the basis of taking a fairapproach to stakeholders, to prevent management from being conducted based solely on in-house logic, wehave set forth in the Articles of Incorporation that a majority of directors consist of independent directors,
who actively supervise management by executive officers and provide advice in order to improve corporate
value from an objective and broad perspective. HOYA also gives executive officers the authority andresponsibility for the execution of operations, in order to accelerate decision making and improve
management efficiency.
The Company has established HOYA Corporate Governance Guidelines at the meeting of the Board of
Directors, and intends to enhance the corporate governance structure and to introduce better governancesystems by revising the guidelines.
Articles of Incorporation

Regulations of the Board of Directors

Corporate Governance Guidelines

Corporate Governance Report

Structure

HOYA employs a company with Nomination Committee, etc. management system. Under a company with
Nomination Committee, etc. management system, by giving executive officers authority to manage
business, business decision making is accelerated. At the same time, three committees—the Nomination
Committee, the Compensation Committee, and the Audit Committee—were established, with a majority ofthe members being independent directors (at HOYA, the committees are composed exclusively of
independent directors), to ensure the effectiveness of management supervision by the Board of Directors.
Adopting a company with Nomination Committee, etc. management system enables us to clearly separate
the execution and supervision of corporate management, whereas this was not possible with the previous
company with Auditors system. Through this system, we aim to ensure efficient management and improve
the overall soundness and transparency of management.

Corporate Governance Structure (As of the end of June 2021)

HOYA INTEGRATED REPORT 2021

34

Copyright ©2021 HOYA GROUP

Adopting a company with Nomination Committee, etc. management system enables us to clearly separate
the execution and supervision of corporate management, whereas this was not possible with the previous
company with Auditors system. Through this system, we aim to ensure efficient management and improve
the overall soundness and transparency of management.
INTEGRATED REPORT 2021

Corporate Governance Structure (As of the end of June 2021)

Basic views

Basic views

Independent directors’ skills matrix

Board of Directors

Executive Officers

Board Member profiles

Committees

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

35

Copyright ©2021 HOYA GROUP

Board of Directors

Corporate Governance

INTEGRATED REPORT 2021

Board of Directors

Board of Directors
Our Board of Directors comprises five outside directors and one internal director, totaling six directors. In
principle, the Board holds 10 regular Board meetings per year. At these meetings, directors have a lively
discussion, and independent directors draw on their ample management experience and international
perspectives to supervise and offer advice to the executive officers in the execution of their duties from awide range of viewpoints. Also at the meetings, besides approving major business plans, detailed
information is provided to independent directors through such means as presentations by division
managers regarding products and the competitive environment.
HOYA conducts an annual questionnaire survey of independent directors for the purpose of evaluating theeffectiveness of the Board of Directors as well as identifying any related issues.
Results of evaluation of the Board of Directors
Good“Board of Directors’ meetings had an atmosphere of openness and actively exchanged
opinions.”

Good“Independent directors expressed questions and opinions from various angles on
executive officers’ proposals.”

Good“There was no issue with reg ard to the effectiveness of its supervisory functions.”

Average“Deliberations on medium- to long-term management strategies and risk management
need to be deepened further.”

Average“Adequate discussions on the diversity of directors and management's succession
planning need to be promoted on an ongoing basis.”At HOYA, directors are required to maintain an attendance ratio at meetings of the Board of Directors at or
above 75% as one of the preconditions for reappointment as a director. For fiscal 2020, the attendance
ratio of five directors was 100% and one director was 88.9%, and there was no problem with regard to thenumber of positions of other companies that were held concurrently by any of the directors.

Basic views

Basic views

Board of Directors

Independent directors’ skills matrix

HOYA INTEGRATED REPORT 2021

36

Copyright ©2021 HOYA GROUP

Board Member profiles

Corporate Governance

INTEGRATED REPORT 2021

Board Member profiles

Independent Director, Lead Director,
Chairperson of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Mitsudo Urano(Born on Mar. 20, 1948)

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetings

8 years

5,000 shares

9/9 times (100%)

Apr. 1971

Joined Nippon Reizo Kabushiki Kaisha (present Nichirei Corporation)

Jun. 1999

Director and General Manager, Strategic Planning Division of Nichirei Corporation

Jun. 2001

Representative Director and President of Nichirei Corporation

Jan. 2005

Representative Director and President of Nichirei Corporation, and Representative Director and

Apr. 2007

Representative Director and Presid ent of Nichirei Corporation, and Director and Chairman ofPresident of Nichirei Foods Inc.
Nichirei Foods Inc.
Jun. 2007

Representative Director and Chairman of Nichirei Corporation, and Director and Chairman of
Nichirei Foods Inc.

Jun. 2013

Advisor of Nichirei Corporation (retired in March 2018)

Jun. 2013

Director of the Company (present post)

Important positions of other companies concurrently held
Outside Director of Hitachi Transport System, Ltd.

Reason for the selection for Director
Mr. Urano focused on capital efficiency from the early stage in Nichirei Corporation, a leading Japanese frozen
food manufacturer, and developed efficient management through company split-ups and informatization. He
particularly has extensive experience and solid achievements on management informatization. In addition to
the achievements in Nichirei Cor poration, the Company’s Nomination Committee expects that he will make agreat contribution to enhance management efficiency and transparency through giving advice and proposals
on overall company management with his deep insight and extensive experience as management having served
as an outside director and outside corporate auditor in other companies listed on the First Section of the Tokyo
Stock Ex change.

HOYA INTEGRATED REPORT 2021

37

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Independent Director,
Chairperson of the Audit Committee,
Member of the Nomination Committee,
Member of the Compensation Committee

Yukako Uchinaga(Born on Jul. 5, 1946)

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetings

8 years

1,000 shares

9/9 times (100%)

Jul. 1971

Joined IBM Japan, Ltd.

Apr. 1995

Director in charge of Asia Pacific Products of IBM Japan, Ltd.

Apr. 2000

Managing Director and Head of Tokyo Software Development Laboratory of IBM Japan, Ltd.

Apr. 2004

Director and Senior Executive Officer in charge of Development & Manufacturing of IBM Japan, Ltd.

Apr. 2007

Technical Advisor of IBM Japan, Ltd. (retired in March 2008)

Apr. 2007

Board Chair of Japan Women’s Innovative Network (J-WIN) (present post)

Jun. 2007

Director of Benesse Corporation

Apr. 2008

Director and Vice Chairman of Benesse Corporation

Apr. 2008

Representative Director, Chairman of the Board, President & CEO of Berlitz Corporation

Oct. 2009

Director and Executive Vice President of Benesse Holdings, Inc. (retired in June 2013)

Apr. 2013

Honorary Chairman of Berlitz Corporation (retired in June 2013)

Jun. 2013

Director of the Company (present post)

Sep. 2013

P resident & CEO of Globalization Research Institute Co., Ltd. (present post)

Apr. 2014

Board Chair of Japan Diversity Network Association (retired in January 2019)

Important positions of other companies concurrently held
Board Chair of J-WIN, Non-Profit Organization
Outside Director of Teijin Limited
Outside Director of SINTOKOGIO, LTD.

Reason for the selection for Director
Ms. Uchinaga is a pioneer of female executive officers as she was promoted to the first female director of IBM
Japan, Ltd. Then, as CEO of Berlitz Corporation under Benesse Holdings, Inc., she established a brand of a“global human resource development enterprise” and achieved superior results as the English language schoolat which Japanese management personnel are educated and trained so as to survive global economic
competition. In addition, for many years, she has devoted herself to activities for promoting the active
participation of women by corporations and has also provided the Company with advice on promoting
diversity. The Company’s Nomination Committee expects she will even more greatly contribute to the effective
use of IT for management purposes, the globalization of human resources, and diversity management in the
Company.

Independent Director,
Chairperson of the Compensation Committee,

HOYA INTEGRATED REPORT 2021

38

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Member of the Nomination Committee,
Member of the
Audit Committee
Independent
Director,

Shuzo
KaihoriMember of the Nomination Committee,

Chairperson of the Compensation Committee,(Born on Jan. 31, 1948)
Member of the Audit Committee

Shuzo
Kaihori
Number of years
in office of the(BornDirector
on Jan.of31,
1948)
the
Company

Apr. 1973

Number of shares of the

Number of attendances

Company held

to the Board meetings

6 years

1,000 shares

9/9 times (100%)

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company
Company held
to the Board meetings
Joined Yokogawa Electric Works Ltd. (present Yokogawa Electric Corporation)

Apr. 2005

6 Businessyears Headquarters of 1,000
shares
9/9 times (100%)Vice President, Head of IA
Yokogawa
Electric Corporation

Apr. 2006
Apr. 1973
Jun.
2006
Apr. 2005

Senior Vice President, Head of IA Business Headquarters of Yokogawa Electric Corporation
Joined Yokogawa
Works Ltd.
(present
YokogawaHeadquarters
Electric Corporation)
Directorand SeniorElectricVice President,
Headof IA Businessof Yokogawa ElectricVice President, Head of IA Business Headquarters of Yokogawa Electric Corporation
Corporation

2006
Apr. 2007

Senior Vice President,of IA Businessof Yokogawa
Electric
Corporation
Representative
Director,Head
President
and ChiefHeadquarters
Executive Officer
of Yokogawa
Electric
Corporation

Jun.2013
2006
Apr.

Director and Senior
ViceChairman
President,andHeadof IAExecutive
BusinessOfficer
Headquartersof Yokogawa
Electric
Representative
Director,
Chiefof Yokogawa
E lectric Corporation
Corporation
Director, Chairman of Yokogawa Electric Corporation

Apr. 2015
Apr.
Jun. 2007
2015
Apr.
Jun.2013
2016
Apr. 2015

Representative
Director, President
and Chief Executive Officer of Yokogawa Electric Corporation
Director of the Company(present post)
Representative
Director, ofChairmanand
Executive
Officerof Yokogawa
E lectric
Corporation
Director and Chairman
the Boardof Chief
Yokogawa
Electric
Corporation(retiredin June2018)
Director, Chairman of Yokogawa Electric Corporation

Jun. 2015 positions
Director of oftheotherCompany(present post)
Importantcompanies
concurrently held

Jun. 2016 Director and Chairman of the Board of Yokogawa Electric Corporation (retired in June 2018)
Outside Director of Eisai Co., Ltd.

Important positions of other companies concurrently held
Reason for the selection for Director
Outside Director of Eisai Co., Ltd.
Mr. Kaihori assumed the presidency of Yokogawa Electric Corporation, which operates a test and measurementbusiness and industrial automation and control business, in 2007 when the company faced difficult business

Reason forthen
thewasselection
for toDirector
conditions,committed
turning around the company and achieved a surplus by changing thebusinessmodelfrom thehardwareto softwareand promoting
globalization.
The operates
Company’s
Nomination
Mr. Kaihori
assumedpresidency
of Yokogawa
Electric Corporation,
which
a testand measurement
Committee
expects
that automation
he will contribute
greatlybusiness,to the Company’s
management
fromfaced
his performancethat hebusiness andindustrial
and control
in 2007 when
the company
difficult businessboldly responded
to changes
in thebusiness
environment
and achieved
resultsaandby giving
advice onconditions,then wascommitted
to turning
aroundthe company
and achieved
surplusby changing
thestrengthening
offromsoftwarebusiness,which isanda challenge
forglobalization.
the Life Care The
segment,
an area
expected to grow,businessmodel
hardwareto software
promotingCompany’s
Nomination
based on his
extensive
Committee
expects
thatexperience.
he will contribute greatly to the Company’s management from his performance that heboldly responded to changes in the business environment and achieved results and by giving advice on
strengthening of software business, which is a challenge for the Life Care segment, an area expected to grow,based on his extensive experience.

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the
Audit Committee
Independent
Director,

Hiroaki Yoshihara

Member of the Nomination Committee,
Member of the Compensation Committee,(Born on Feb. 9, 1957)
Member of the Audit Committee

Hiroaki
Yoshihara
Number of years
in office of the
Number of shares of the(BornDirector
on Feb.of
9,the
1957)
Company

Nov. 1978

Company held

to the Board meetings

3 years

0 share9/9 times (100%)

Number of years in office of the

Number of shares of the

Number of attendances

Company held

to the Board meetings

0 share9/9 times (100%)

Directorof the&Company
Joined Peat Marwick
MitchellCo.

3 years
HOYA INTEGRATED REPORT 2021

Nov. 1978

Number of attendances

Joined Peat Marwick Mitchell & Co.

39

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Hiroaki Yoshihara(Born on Feb. 9, 1957)

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetings

3 years

0 share9/9 times (100%)

Nov. 1978

Joined Peat Marwick Mitchell & Co.

Jul. 1996

National Managing Partner, the Pacific Rim Practice of KPMG LLP

Oct. 1997

Board Member of KPMG LLP

Oct. 2003

Vice Chairman and Global Managing Partner of KPMG International (retired in April 2007)

Jun. 2018

Director of the Company (present post)

Important positions of other companies concurrently held
Outside Director of Hitachi, Ltd

Reason for the selection for Director
Mr. Yoshihara has long-term experience as an expert in finance and accounting as well as management
experience gained as Global Managing Partner of an international accounting firm. He also has a track recordof participating in the M&A of many companies from a professional standpoint. The Company’s Nomination
Committee expects that he will contribute to the improvement of the supervisory function of the Board of
Directors of the Company and at the same time provide plenty of advice in regard to M&A, an importantmeasure in the Company’s business strategy,

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Yasuyuki Abe(Born on Apr. 17, 1952)

Apr. 1977

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetingsNew

0 share―Joined Sumitomo Corporation

Jun. 2002

Representative Director and President of Sumisho Electronics Co., Ltd. (present SCSK Corporation)

Apr. 2005

Representative Director and President of Sumisho Computer Systems Corporation (present SCSKCorporation)

Jun. 2009

Representative Director, Managing Executive Officer, General Manager, Financial & Logistics
Business Unit of Sumitomo Corporation

Apr. 2010

Representative Director, Managing Executiv e Officer,
General Manager, New Industry Development &Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

40

Cross-function Business Unit of Sumitomo Corporation

Apr. 2011

Representative Director, Senior Managing Executive Officer, General Manager, New Industry

INTEGRATED REPORT 2021

Independent Director,
Member of the Nomination Committee,
Member of the Compensation Committee,
Member of the Audit Committee

Yasuyuki Abe(Born on Apr. 17, 1952)

Apr. 1977

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetingsNew

0 share―Joined Sumitomo Corporation

Jun. 2002

Representative Director and President of Sumisho Electronics Co., Ltd. (present SCSK Corporation)

Apr. 2005

Representative Director and President of Sumisho Computer Systems Corporation (present SCSKCorporation)

Jun. 2009

Representative Director, Managing Executive Officer, General Manager, Financial & Logistics
Business Unit of Sumitomo Corporation

Apr. 2010

Representative Director, Managing Executiv e Officer, General Manager, New Industry Development &Apr. 2011

Representative Director, Senior Managing Executive Officer, General Manager, New Industry

Cross-function Business Unit of Sumitomo Corporation
Development & Cross-function Business Unit, General Manager, Financial Service Division of
Sumitomo Corporation
Apr. 2013

Representative Director, Senior Managing Executive Officer, General Manager, Corporate Planning &Coordination Group of Sumitomo Corporation

Jun. 2015

Advisor of Sumitomo Corporation (retired in June 2018)

Important positions of other companies concurrently held
Advisor of ORANGE AND PARTNERS CO., LTD.
Outside Director of SUBARU CORPORATION

Reason for the selection for Director
Mr. Abe was primarily engaged in the electric power, machinery, and information fields at Sumitomo
Corporation, a general trading company. After stationed twice in the United States, he served as representative
director and president of the company’s electronics and information related subsidiaries. Subsequently, as arepresentative director of Sumitomo Corporatio n, he was engaged in the company’s financial, logistics and new
business development. The Company’s Nomination Committee has judged that he will contribute to the Boardof Directors of the Company through his wide-ranging experience at the general trading company, his global
mindset cultivated over the years of stay in the United States, his business experience nurtured as arepresentative director an d president, and his experience as an independent director gained at other companies
after leaving Sumitomo Corporation.

Director, Representative Executive Officer,
President & CEO,
Chairperson of the Board of Directors

Hiroshi Suzuki(Born on Aug. 31, 1958)

HOYA INTEGRATED REPORT 2021

41

Number of years in office of the

Copyright ©2021 HOYA GROUP

Number of shares of the

Number of attendancesINTEGRATED REPORT 2021

Director, Representative Executive Officer,
President & CEO,
Chairperson of the Board of Directors

Hiroshi Suzuki(Born on Aug. 31, 1958)

Number of years in office of the

Number of shares of the

Number of attendances

Director of the Company

Company held

to the Board meetings

28 years

84,980 shares

9/9 times (100%)

Apr. 1985

Joined the Company

Jun. 1993

Director of the Company

Jun. 1997

Managing Director of the Company

Apr. 1999

Managing Director of the Company, President of Electro Optics Company

Jun. 1999

Executive Managing Director of the Company

Jun. 2000

Representative Director, President & CEO of the Company

Jun. 2003

Director, Representative Executive Officer, President & CEO of the Company (present post)

Dec. 2011

Chief Representa tive of Singapore Branch of the Company (present post)

Important positions of other companies concurrently held
Outside Director of KIOXIA Holdings Corporation (former Toshiba Memory Holdings Corporation)

Reason for the selection for Director
Mr. Suzuki serves as the driving force of the management of the HOYA Group as Director and Representative
Executive Officer President & CEO, and gives appropriate explanations and reports on strategies based on
portfolio management at the meetings of the Board of Directors. He also supervises the execution of operations
by other Executive Officers and adequately fulfills his role as Executive Officer and Director. In consideration of
his achievements as Director to date, the Company’s Nomination Committee expects that he will continue toendeavor to enhance th e corporate value of the Company.

Board of Directors

Board Member profiles

HOYA INTEGRATED REPORT 2021

42

Copyright ©2021 HOYA GROUP

Independent directors’skills matrix

Corporate Governance

INTEGRATED REPORT 2021

Independent directors’ skills matrix

Corporate
management

Globalbusiness

●

●

●

●

●

●

●

●

●

●

●

●

Mitsudo
Urano
YukakoUchinaga
Shuzo
Kaihori
Hiroaki
Yoshihara
Yasuyuki
Abe

Board Member profiles

Finance/accounting

Technology

M&A

Developmentof human
resources/
diversity

●

●

●

●

●

●

Independent directors’skills matrix

Basic views

Independent directors’ skills matrix

Board of Directors

Executive Officers

Board Member profiles

Committees

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

43●

Copyright ©2021 HOYA GROUP

Executive Officers

Corporate Governance

INTEGRATED REPORT 2021

Executive Officers

At HOYA, candidates for Chief Executive Officer (CEO); Chief Financial Officer (CFO); Executive Officer, Chief
Legal Officer (CLO) and Head of Corporate Development and Affairs; and Executive Officer, Chief
Technology Officer (CTO) are nominated by the Nomination Committee and appointed at a Board meeting(CEO serves concurrently as an internal director). They ma nage business execution of the HOYA Groupaccording to the division of responsibility designated by the Board of Directors and decisions are madepromptly. In regards to day-to-day business operations in each business, significant power is delegated toeach division manager and executive officer’s direct division managers to create and execute specificmeasures based on a business policy decided at a Board meeting.

Hiroshi Suzuki

Director, Representative Executive Officer
President & CEO

Ryo Hirooka

Representative Executive Officer & CFO

Eiichiro Ikeda

Executive Officer, Chief Technology Officer (CTO)

Executive Officer, Chief Legal Officer (CLO) and Head of Corporate
Development and Affairs

Augustine Yee

Executive Officer, Chief Legal Officer (CLO) and Head of Corporate
Development and Affairs

HOYA INTEGRATED REPORT 2021

44

Copyright ©2021 HOYA GROUP

Corporate Governance

INTEGRATED REPORT 2021

Committees

As internal organizations of the Board of Directors, we have the Nomination Committee, Compensation
Committee, and Audit Committee; each of which is composed exclusively of independent directors

Nomination Committee
The Nomination Committee fairly and rigorously selects candidates for directors, ensuring said candidates
possess knowledge, expertise, and capabilities suited to HOYA’s business environment, based on the“Standard for Election of Candidates for Director,” and proposes the candidates to the General Meeting of
Shareholders for voting. The Committee also fairly and rigorously selects candidates for executive officers
and the representative executive officer, based on the “Standard for Election of Candidates for Executive
Officer,” and proposes the candidates to the Board of Directors for voting. In cases that meet the criteria fordismissal, the Committee makes decisions to propose the dismissal of directors to the General Meeting of
Shareholders and the dismissal of executive officers to the Board of Directors for voting.
The Committee has set out independence criteria for director candidates that are stricter than the rules of
the Tokyo Stock Exchange to ensure the effective functioning of independent directors’ overseeing executive
officers.
The outline of the Standard for Election of Candidates for Director is as follows:[For both internal and independent director candidates]
Those with appropriate personalities and insights as director
Those with no health problems in performing their duties[For internal director candidates]
Those with a high level of knowledge and ample experience in our business
Excellent business decision-making ability and business execution ability[For independent director candidates]
Those with extensive experience as business managers
Or those who are in positions as professionals in law, accounting, finance or similar fields
Those who are able to participate in at least 75% of the HOYA Group’s Board meetings.
Those who have no significant interests in the HOYA Group and are able to maintain their
independence

Independence criteria for independent director candidates
To ensure the independence of candidates for independent directors, candidates must not fall under any of
the categories below.
<Those who are related to the HOYA Group>
Those who previously worked for the HOYA Group
Those who have a family member (spouse, child or relatives by blood or by affinity within the second©2021 HOYA GROUPINTEGRATED REPORT 2021
45 Copyrightdegree) who have heldHOYA
the positionof director, executive
officer,
corporate auditor or management
employee of the HOYA Group in the past five years.

Independence criteria for independent director candidates
To ensure the independence of candidates for independent directors, candidates must not fall under any of
the categories below.

INTEGRATED REPORT 2021

<Those who are related to the HOYA Group>
Those who previously worked for the HOYA Group
Those who have a family member (spouse, child or relatives by blood or by affinity within the second
degree) who have held the position of director, executive officer, corporate auditor or management
employee of the HOYA Group in the past five years.
<Major shareholder>
Those who are major shareholders (10% or more) of the HOYA Group, or those who are directors,
executive officers, corporate auditors or employees of companies that are major shareholders of the
HOYA Group or those who have a family member who holds a top management position at suchcompanies
Those who execute operations of a company of which a major shareholder is the HOYA Group<Those who are related to major business partners>
Those who are operating directors, executive officers or employees of any important business partner,
either for the HOYA Group or the corporate groups which the candidates come from, the sales to whichbusiness partner comprises 2% or more of the consolidated net sales of the HOYA Group or the company
groups for either of the past three years, or those who have a family member who is a top managemen tof such business partner<Those who provide professional services (lawyers, certified public accountants, certified tax
accountants, patent attorneys, judicial scriveners, etc.)>
Those who have received remuneration of 5 million yen or more per year or those who have a family
member who have received remuneration of 5 million yen or more per year, from the HOYA Group in thepast three years
When the organization that the candidate belongs to, such as a company and association, has received
cash, etc. from the HOYA Group, the amount of which exceeds 100 million yen per year or 2% ofconsolidated net sales of the said organization, whichever is higher<Donation, etc.>
When the association or organization which the candidate belongs to as director or operating officer
has received donations or grants in the past three years, the amount of which exceeds 10 million yen peryear or 30% of the said organization’s average annual total costs, whichever is higher, or when theassociation or organization which the candidate’s family member belongs to has received donations or
grants equivalent to the aforementioned amount<Others>
When directors are exchanged
When the candidate has any other important interest in the HOYA GroupThe Nomination Committee held six meetings during fiscal 2020, in which the attendance ratio of one
member was 83.3% and all other members was 100%, and held discussions mainly on the following matters:
Future composition of the Board of Directors
Qualifications and skills required of future independent director candidates
Succession plans of executive officers∟Clarification of required qualifications and skills amid medium- to long-term future changes in thebusiness environment and the business portfolio∟Identification of candidates based on the clarification above

HOYA INTEGRATED REPORT 2021
Compensation Committee

46

Copyright ©2021 HOYA GROUP

The objective of the Compensation Committee is to establish a remuneration system that incentivizes∟Clarification of required qualifications and skills amid medium- to long-term future changes in thebusiness environment and the business portfolio∟Identification of candidates based on the clarification above
INTEGRATED REPORT 2021

Compensation Committee
The objective of the Compensation Committee is to establish a remuneration system that incentivizes
directors and executive officers and to contribute to improved financial performance for HOYA by
undertaking appropriate evaluations of their performance. The Compensation Committee decides on a
remuneration package for each director and executive officer in accordance with the following policies:
The Compensation Committee held five meetings during fiscal 2020, in which the attendance ratio of all
members was 100%, and held discussions especially on performance-based remuneration for executive
officers.
Policy concerning remuneration for Directors
The remuneration of Directors consists of a fixed salary and a medium- and long-term incentive (stock
options). The fixed salaries consist of a basic compensation and compensation for being a member or achairperson of the Nomination, Compensation, or Audit Committee. The compensation levels are set
appropriately by taking into consideration such factors as the Company’s business environment and thelevels set by other companies as determined by a survey conducted by an outside professionalorganization.
Furthermore, fixed numbers of stock options are granted to newly appointed and reappointed officers inorder that they may hold a common viewpoint with shareholders regarding the share price and shareinterests with shareholders on a medium- to long-term basis. Stock options become exercisable after a
waiting period of approximately one year, in increments of 25% of the granted number of stock options ineach subsequent year. Stock options are exercisable for a period of ten years.
[Composition ratio of compensation for directors]
Fixed salary: Medium- and long-term incentive (stock options) = Approximately 1:0.3–0.6
Note: The ratio of the above medium- and long-term incentive shall fluctuate with changes in the
Company’s share price and other factors.

Policy concerning remuneration for Executive Officers
The remuneration of Executive Officers consists of a fixed salary, an annual incentive (performance-based
bonuses), and a medium- and long-term incentive (Performance Share Unit). For fixed salaries, basic
compensation is set appropriately according to the office and responsibility of each Executive Officer(Representative Executive Officer, CFO, etc.) and by taking into consideration such factors as theCompany’s business environment and the levels set by other companies as determined by a survey
conducted by an outside professional organization. Other than basic compensation described above,
benefits granted to expatriates (such as housing) are also set at appropriate levels in consideration of theCompany’s business environment and the levels set by other companies as determined by a survey
conducted by an outside professional organization.
The annual incentive is determined according to quantitative results and qualitative evaluations and varies
within the range roughly from 0% to 200%. As indicators of quantitative results, net sales, profit attributableto owners of the Company, and basic earnings per share (EPS) stated in the Consolidated Financial
Statements of the Company have been adopted.
As a medium- and long-term incentive, the Company introduced the Performance Share Unit.
Performance Share Unit
HOYA INTEGRATED REPORT 2021
47 Copyright ©2021 HOYA GROUPThe Company has introduced the Performance Share Unit (PSU) in place of the existing stock option plansince fiscal 2019. The PSU is a system for granting shares at a number that is in proportion to the level ofto owners of the Company, and basic earnings per share (EPS) stated in the Consolidated Financial
Statements of the Company have been adopted.
As a medium- and long-term incentive, the Company introduced the Performance Share Unit.
INTEGRATED REPORT 2021

Performance Share Unit
The Company has introduced the Performance Share Unit (PSU) in place of the existing stock option plansince fiscal 2019. The PSU is a system for granting shares at a number that is in proportion to the level ofachievement of the predetermined performance conditions. The payment ratio that corresponds to the levelof achievement of the performance targets will range from 0% to 200%, based on performance during threefiscal years. The Company has selected net sales, earnings per share (EPS) and return on equity (ROE) in
the Consolidated Financial Statements as indicators of performance during three fiscal years.
The objective of the PSU is to further increase the motivation and drive of the Company’s Executive Officers
to medium- to long-term business performance goals and enhance the corporate value of the HOYA Group,
and also to serve as a mechanism for retention of highly talented human resources by setting a competitivecompensation level.
Under this plan, after determining the basic deliverable number of shares according to the position andresponsibilities of each eligible recipient (CEO, CFO, and others), the Company grants compensation in an
amount equivalent to the market price of the Company’s shares according to the degree of achievement of
the medium- to long-term performance targets shown in the table below.
The Company also plans to issue new PSU covering the next three fiscal years in the following fiscal year
onward.

The targets above are set in consideration of, among others, theCompany’s business environment and market consensus and do notconstitute the Company’s financial forecasts. The targets above
represent average values over the three fiscal years covered.

Total amount of remuneration, etc. of Directors and Executive Officers for fiscal 2020
Classification

Number ofpayeesTotal amountof
remuneration,
etc.

HOYA INTEGRATED REPORT 2021

Total amount of
remuneration by typeFixedsalary48

Performance-based
bonuses

Copyright ©2021 HOYA GROUP

Stock
options

PSU

The targets above are set in consideration of, among others, theCompany’s business environment and market consensus and do notconstitute the Company’s financial forecasts. The targets above
represent average values over the three fiscal years covered.

INTEGRATED REPORT 2021

Total amount of remuneration, etc. of Directors and Executive Officers for fiscal 2020
Classification

Directors

Number ofpayeesTotal amountof
remuneration,etc.

Total amount of
remuneration by typeFixedsalaryPerformance-based
bonusesStockoptions

PSU

Independent

5
persons

94
million yen

50
millionyen－

43
million yen－

Internal

1
person11
million yen

8millionyen－

3
million yen

－

Total

6
persons

105
million yen

58
millionyen－

46
million yen－

Executive Officers

4
persons573
million yen

243
millionyen

220
million yen

30
million yen

81
million
yen

Total

10
persons

678
million yen

301
millionyen

220
million yen

76
million yen

81
millionyen

Notes: 1. At the end of the fiscal year under review, there were six Directors and four Executive Officers. One of the four
Executive Officers served concurrently as Internal Director.
2. Fixed salary for Executive Officers includes overseas Executive Officer’s benefit as expatriate of 72 million yen.
3. For the stock options, fair values of stock acquisition rights were calculated and the table above showsamounts to be recorded as expenses for the fiscal year under review. For Executive Officers, no new stock
options were granted in the fiscal year under review due to the introduction of PSU in place of the stock option
plan from fiscal 2019. The table above shows stock options granted in past fiscal years in amounts to berecorded as expenses for the fiscal year under review.
4. For PSU, the table above shows amounts to be recorded as expenses for the fiscal year under review based on
the share price at the time of the granting of shares.

Amount of consolidated remuneration for each Executive Officer
Executiveclassification

Total
amountFixedsalaryPerformancebased
bonusesStockoptions

PSU

Director

11
millionyen

8
millionyen－

3
millionyen－

Representative
Executive Officer

217
millionyen

85
millionyen

76
million yen

12millionyen

44
millionyen

Ryo Hirooka
Representative Executive
Officer & CFO

Representative
Executive Officer

127
millionyen

55
millionyen

54
million yen

5millionyen

13
millionyen

Eiichiro Ikeda
Executive Officer, Chief Technology Officer(CTO)

Executive Officer

112
millionyen

50
millionyen

44
million yen

6millionyen

12
millionyen

Augustine Yee
Executive Officer, Chief Legal Officer (CLO) andHead of Corporate Development and Affairs

Executive Officer

118
millionyen

53
millionyen

47
mill ion yen

6millionyen

12
millionyen

Name

Hiroshi Suzuki,
Representative Executive Officer
President & CEO

Audit Committee
The Audit Committee formulates the audit policies and audit plans for each fiscal year and verifies financial
HOYA INTEGRATED REPORT 2021
49 Copyright ©2021 HOYA GROUP
statements, etc., based on the quarterly reports, year-end reports, and timely reports received from theaccounting auditor according to such policies and plans. It also interviews the Audit Department and theAugustine Yee
Executive Officer, Chief Legal Officer (CLO) andHead of Corporate Development and Affairs

Executive Officer

118
millionyen

53
millionyen

47
mill ion yen

6millionyen

12
millionyen

INTEGRATED REPORT 2021

Audit Committee
The Audit Committee formulates the audit policies and audit plans for each fiscal year and verifies financial
statements, etc., based on the quarterly reports, year-end reports, and timely reports received from theaccounting auditor according to such policies and plans. It also interviews the Audit Department and theInternal Control Department to obtain the results of operational audits, and verifies the soundness, legality,
efficiency, etc., of management. All important matters are reported to the Board of Directors, andcountermeasures are taken as necessary.
Audit Committee meetings were convened nine times in fiscal 2020, in which the attendance ratio of four
directors was 100% and one director was 88.9%.
The Committee discussed mainly the following agenda items:
Agreement on the accounting auditor of the HOYA Group and its remuneration
Resolution on the audit report of the Audit Committee
Review reporting from the accounting auditor (five times in total per year)
Quarterly reporting from the Audit Department and the Help Line
Deliberations during the fiscal year under review also f ocused on reports from the accounting auditor, theAudit Department, and the Internal Control Department, while providing advice and suggestions to the
executive team with regard to any issues that came to light.

Executive Officers

Committees

Basic views

Independent directors’ skills matrix

Board of Directors

Executive Officers

Board Member profiles

Committees

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

50

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Environmental
HOYA Group Environmental Philosophy andFundamental Environmental Policies
The HOYA Group actively engages in environmental preservation efforts as part of its corporate social
responsibility in order to pass on to future generations a global environment in better shape than today.
The HOYA Group established its “Environmental Philosophy” and “Fundamental Environmental Policies” in1993 and “Safety and Health Philosophy” and “Fundamental Safety and Health Policies” in 1995. Under
these guidelines, the Group has been promoting the environmental, occupational safety and healthactivities at all its business facilities both inside and outside Japan.
In 2012, the environmental, occupational safety and health management systems of the individual facilities
were reviewed thoroughly in the process of obtaining a global multisite certification for those systems.
Sin ce then, the Group has been operating all its environmental protection, occupational safety and healthactivities in a globally integrated manner.

HOYA Group Environmental Philosophy

It is our earnest desire to preserve the global environment in a pristine form and pass it to thenext generation.
Therefore, we, the HOYA Group and its employees, are united in our commitment to protect theenvironment, conserve resources, and ensure that all our corporate activities are conductedwith adequate concern for the global environment.

Fundamental Environmental Policies

1. We recognize the importance of environmental conservation, thereby passing on the global
environment in the best possible condition to the future generations. We make certain that all our
corporate activities are conducted in a well-balanced manner for people, society, and the naturalenvironment.
2. We establish and operate a Group-wide system of environmental conservation activities by enlisting thecooperation of all the Group companies around the world.
3. We comply with all laws and regulations relating to environmental impacts, such as waste generated bybusiness activities, and make consistent efforts toward reducing these environmental impacts.
4. We carry out resource saving activities by pursuing greater efficiency in resource use, reduction ofenergy consumption, and recycling.
5. We maintain a keen interestin environmental
the GROUP
Group and ensure that all the
Copyright ©2021 HOYA
HOYA INTEGRATEDREPORT 2021issues
51 throughout

employees are thoroughly aware of the HOYA Group Environmental Philosop hy and Fundamental
Environmental Policies, by introducing environmental education programs and promoting internal3. We comply with all laws and regulations relating to environmental impacts, such as waste generated bybusiness activities, and make consistent efforts toward reducing these environmental impacts.
4. We carry out resource saving activities by pursuing greater efficiency in resource use, reduction ofenergy consumption, and recycling.

INTEGRATED REPORT 2021

5. We maintain a keen interest in environmental issues throughout the Group and ensure that all theemployees are thoroughly aware of the HOYA Group Environmental Philosop hy and Fundamental
Environmental Policies, by introducing environmental education programs and promoting internal
communications.

HOYA Group Environmental Protection and Occupational Safety and HealthOrganization

In October 2008, the Group’s environmental protection organization and the occupational safety and healthorganization were merged with each other. Since then, with the new structure supervised by the HOYA
Group Director for Environmental Protection, Occupational Safety and Health, the Group has been carryingout smooth and efficient activities of environmental protection and occupational safety and health. Having
established the HOYA Group's standards and the like, we are making them thoroughly known within theGroup and conducting education at each business facility and production site in an effort to prevent
accidents. Also, environmental, occupational safety and health activities that have been performed are
subject to an internal audit, followed by a review at the management level, based on which the effectivenessof the activities are evaluated and improved on an ongoing basis.

HOYA Group Environmental Protection and Occupational Safety and Health Organization

HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Structuring of a global management system for its environmental protection andoccupational safety and health management system

The HOYA Group has been building a global management system that integrates ISO (International
Organization for Standardization) 14001 and 45001 for the purpose of promoting environmental protection
activities by employees and ensuring the safety and health of employees. In February 2013, the HOYA
Group acquired global multisite certification. As of March 2021, 50 sites in 18 countries were certified.
Certification has been acquired at 100% of our major production/research and development bases, andcertification is also being obtained for newly organized bases one by one.
Go to the current status of ISO qualification

HOYA Group Environmental
Philosophy and Fundamental
Environmental Policies

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53

Copyright ©2021 HOYA GROUP

Climate ChangeINTEGRATED REPORT 2021

Environmental
Climate Change

Greenhouse Gas
HOYA Strategy for CO2 Reduction
The HOYA Group is globally conducting its environmental protection activities, in which attempts are being
made to reduce CO 2 emissions by paying special attention to its "energy consumption."

CO2 Reduction Targets
The HOYA Group has been focusing its efforts on environmental protection activities, having set its CO 2
emissions reduction target at achieving “a 5-percent reduction of CO 2 emissions from fiscal 2016 by fiscal
2020 (compared with the level of fiscal 2014)."
Also, having set the HOYA Group's new medium-term target at achieving “a 16-percent reduction of CO 2
emissions per unit of net sales from fiscal 2021 by fiscal 2025 (compared with the level of fiscal 2019)" as
its target for the next five years, the HOYA Group is engaged in initiat ives to reduce CO 2 emissions bysetting numerical targets and formulating action plans in each business with the aim of fulfilling theGroup's target.

CO2 Emissions
In fiscal 2020, which was the final year for the medium-term target, the HOYA Group's CO 2 emissions
amounted to 406,176 tons. (Scope 1 and 2 emissions) CO 2 emissions increased by 1.3% compared with thelevel in fiscal 2014, falling short of the target; however, we were able to reduce CO 2 emissions per unit of net
sales by 9.4%. We will continue to accelerate our initiatives so that we can successfully reduce not only CO 2
emissions per unit of net sales but also total CO 2 emissions.
CO 2 emissions of the HOYA Group (t-CO 2equivalent)
Scope 1 andUnit

FY2014FY2015FY2016HOYA INTEGRATED REPORT 2021

FY201754

FY2018

Copyright ©2021 HOYA GROUPFY2019FY2020% changeamounted to 406,176 tons. (Scope 1 and 2 emissions) CO 2 emissions increased by 1.3% compared with thelevel in fiscal 2014, falling short of the target; however, we were able to reduce CO 2 emissions per unit of net
sales by 9.4%. We will continue to accelerate our initiatives so that we can successfully reduce not only CO 2
emissions per unit of net sales but also total CO 2 emissions.

INTEGRATED REPORT 2021

CO 2 emissions of the HOYA Group (t-CO 2equivalent)
FY2014
(Base
(Base
year)
year)

2 emissions
Scope 1 and2 emissions

Unit

Japan
Japan
Overseas
Overseas
Total
Total
CO
CO 22
emissionsemissions
per unit of
per unit of
net sales
net salest-CO
82,83585,261
69,992
71,37566,82459,304t-CO 2282,83585,261
69,992
71,37566,82459,304t-CO
317,976 332,206 328,124 337,960 338,946 359,162
t-CO 22 317,976 332,206 328,124 337,960 338,946 359,162
t-CO
400,811 417,467 398,116 409,335 405,770 418,466
t-CO 22 400,811 417,467 398,116 409,335 405,770 418,466
t-CO
t-CO 22
per
per
818
826
831
764
717
726
818
826
831
764
717
726
billionbillionyen
yen

FY2015FY2016FY2017FY2018FY2019% changefrom thefrom theFY2020
base
base
year
year
43,452-47.5%
43,452-47.5%
362,724
14.1%
362,724
14.1%
406,176
1.3%
406,176
1.3%
741
7 41

-9.4%
-9.4%

Note that the CO emissions are calculated, for each of the production bases*1, from the electric power andNote that the CO 22 emissions are calculated, for each of the production bases*1, from the electric power andfuel consumptions as determined by the summation formulas standardized for the whole HOYA Group.
fuel consumptions as determined by the summation formulas standardized for the whole HOYA Group.
*1 Some non-production bases are included*1 Some non-production bases are included

Energy saving and power saving activities

At production bases, we are replacing facilities with energy-saving types (such as adopting ice thermal
storage systems and high-efficiency transformers), conducting energy-saving activities (such as optimizing
the operating hours of boilers and air-conditioning equipment) and promoting roof-greening, etc. We arealso endeavoring to suppress CO 2 emissions from non-production bases by such means as introducing
casual wear, adjusting the indoor temperature appropriately and implementing efficient lighting in offices.
Examples of energy/power saving initiatives
Efforts to reduce greenhouse gas emissions at overseas offices using Joint Crediting Mechanism (JCM)(HOYA expects to cut annual CO 2 emissions by 618 tons.)
In 2016, we introduced a heat recovery heat pump at the eyeglass lens plant in Vietnam. It is used to saveenergy and reduce CO 2 emissions by using the heat that used to be expelled to the outside air when coldheat was supplied as a source of cold heat for the production process and as an auxiliary heat source forheating the water used in the manufacturing process. Before introducing the heat recovery heat pump,
we used only electric heaters to obtain the desired temperature.

HOYA INTEGRATED REPORT 2021

55

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

At the eyeglass lens plant in Vietnam, one of the existing centrifugal chillers was replaced with a highly
efficient inverter centrifugal chiller. By using the new chiller for regular operation and the old one as
backup equipment, we achieved a lower introduction cost, improved energy efficiency, and reduced CO 2
emissions at the same time.
Introduction of renewable energy
HOYA Vision Care ATC (Advanced Technology Center)
Ramsey, which is one of our eyeglass lens business bases in
the U.S., has been running on 100% renewable energy
generated by solar and wind power since 2014. This has theeffect of reducing approximately 3,800 tons of CO 2
emissions per year.

HOYA Group Environmental
Philosophy and Fundamental
Environmental Policies

Climate Change

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

56

Copyright ©2021 HOYA GROUP

Water

INTEGRATED REPORT 2021

Environmental
Water

Initiatives to effectively utilize water resources

The HOYA Group endeavors to effectively utilize water resources by reusing water and reducing water
usage on a global scale, in accordance with its Fundamental Environmental Policies.

Water usage reduction targets

The HOYA Group has set numerical targets in each of its business segments and manages its progress inachieving the targets.

Water usage

In fiscal 2020, water usage in the HOYA Group was 15,044,000 cubic meters. Compared to fiscal 2014, wemanaged to reduce water usage by 13.3% within the Group as a whole, and by 22.3% in terms of water
usage per unit of net sales, having raised the ratio of water reuse.
Water usage in the HOYA Group (Thousand cubic meters)

Jap anOverseas

Unit

FY2014FY2015FY2016FY2017FY2018FY2019FY2020%change
from
the
base
year

Thousandcubic
meters

1,185

1,183

1,098

1,008

1,071

929

886

-25.2%

16,16916,336

15,871

16,36016,357

16,84814,158-12.4%

17,354

17,51916,96917,36817,42917,777

15,044-13.3%

30.8

27.5-22.3%

Thousandcubic
meters

Total

Thousandcubic
metersWater
usage
per unit

Thousandcubic
metersHOYA INTEGRATED REPORT 2021

35.4

34.6

57

35.4

Copyright ©2021 HOYA GROUP

32.4

30.8

managed to reduce water usage by 13.3% within the Group as a whole, and by 22.3% in terms of water
usage per unit of net sales, having raised the ratio of water reuse.
INTEGRATED REPORT 2021

Water usage in the HOYA Group (Thousand cubic meters)

Total
Total
Water
Water
usage
usage
Jap anper unit
per unitof netof netsales
Overseas
sales
Water
Water
reuse
reuse
ratio
ratio

metersmetersThousand
Unit
Thousand
cubic
cubic
metersmetersThousandThousand
cubic
cubic
metersmetersper billion
per billion
yen
Thousand
yen
cubic
%
%

%
changefrom
FY2020the
15,044 -13.3%
15,044 -13.3%
base
year

FY2014
17,354
17,354FY2015
17,51917,519FY2016
16,96916,969FY2017
17,36817,368FY201817,42917,429FY201917,777
17,777

1,185
35.4
35.4

1,183
34.6
34.6

1,098
35.4
35.4

1,008
32.4
32.4

1,071
30.8
30.8

929
30.8
30.8

886
27.5
27.5

-25.2%-22.3%-22.3%

16,16916,336

15,871

16,36016,357

16,84814,158-12.4%

15%
15%

16%
16%

18%
18%

20%
20%

21%
21%

27%
27%

30%
30%

+15%
+15%

Water usage was calculated targeting production bases, based on the usage of city water, industrial water
Water usage was calculated targeting production bases, based on the usage of city water, industrial waterand groundwater identified by using the data aggregation format shared universally within the HOYA
and groundwater identified by using the data aggregation format shared universally within the HOYA
Group.
Group.

Initiatives to reuse water
Initiatives to reuse water
Initiatives to effectively utilize water resources are being carried out in each business segment. In theInitiatives to effectively utilize water resources are being carried out in each business segment. In thephotomask manufacturing process, cleaning is performed by using ultrapure water to remove various
photomask manufacturing process, cleaning is performed by using ultrapure water to remove various
chemicals and foreign matter. The used water undergoes a process at an effluent treatment facility to bechemicals and foreign matter. The used water undergoes a process at an effluent treatment facility to berendered harmless, some of which is subsequently collected and reused. The ultrapure water recycling
rendered harmless, some of which is subsequently collected and reused. The ultrapure water recycling
facility, which consists of adsorbents and reverse osmosis (RO) membranes, makes it possible to reuse
facility, which consists of adsorbents and reverse osmosis (RO) membranes, makes it possible to reusewater by removing impurities
water by removing impurities

Recycling of ultrapure water in photomask manufacturing process
Recycling of ultrapure water in photomask manufacturing process

HOYA INTEGRATED REPORT 2021

58

Copyright ©2021 HOYA GROUP

Pollution Control Measures
Pollution Control Measures

INTEGRATED REPORT 2021

Environmental
Pollution Control Measures and Waste, etc.

Soil pollution control measures, underground water pollution control measures, andhazardous substance leak control measures

In March 2010, the Group issued the HOYA Group Standard for Environmental Facilities designed to help theGroup to prevent any hazardous impact on the environment inside and outside the HOYA Group facilities.

Waste

In entrusting contracted disposal of factory waste, individual facilities select contractors after carefully
checking their business licenses.
Also, through consignment contracts with appropriate disposal contractors, the Group promotes therecycling of industrial waste, creation of monetary values out of waste, and reduction of waste emissions.
In order to realize a sustainable, recycling-oriented society, we are recycling wood waste and waste plastics,
promoting the reuse of packaging materials, and recycling paper, among others. Our major factories inJapan have achieved zero emissions in terms of industrial waste.
Also, our factories outside Japan are holding in-house competitions regarding ideas for recycling waste
plastics, using recycled paper of beverage packaging to repair roofs damaged by disasters in cooperation
with local volunteer group s and thereby contributing to society* and engaging in other initiatives in the formof in-house recycling activities, in addition to turning polluted sludge into valuable substances and reusing
photomask cases, among others.
* For further information, please refer to Corporate Citizenship.

Waste emissions in the HOYA Group (t)

Japan

Total
emissions
Recyclingrate

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

2,656

3,462

3,362

3,478

3,144

2,099

2,229

79.0%

60.1%

66.1%

62.6%

65.9%

76.0%

91.0%

HOYA INTEGRATED REPORT 2021

59

Copyright ©2021 HOYA GROUP

of in-house recycling activities, in addition to turning polluted sludge into valuable substances and reusing
photomask cases, among others.
* For further information, please refer to Corporate Citizenship.

INTEGRATED REPORT 2021

Waste emissions in the HOYA Group (t)Japan

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

2,656

3,462

3,362

3,478

3,144

2,099

2,229

79.0%

60.1%

66.1%

62.6%

65.9%

76.0%

91.0%

Total
emissions

43,992

43,76049,88856,35456,76656,28954,281

Recycling
rate

61.0%

66.5%

66.3%

68.4%

69.1%

76.2%

72.0%

Total
emissions

46,64847,22253,25059,832

59,911

58,38856,509Recycling
rate

62.0%

66.1%

66.3%

68.1%

68.9%

76.2%

72.8%

Total
emissions
Recyclingrate

Overseas

GlobalChemical substances

Based on the HOYA Group Chemical Substances Management Standard, the HOYA Group as a wholecomplies with laws and regulations in accordance with the Standard with respect to chemical substancesused in business activities, takes countermeasures against their leakage and manages such substances byutilizing Safety Data Sheets (SDSs).

Animal experimentation

The HOYA Group's Management Principles stipulate as follows: "We work hard to ensure that our corporate
activities are carried out with respect for the environment." The Group’s Business Conduct Guidelines
require the promotion of sustainability and efforts to conduct environmentally-friendly activities.
There are some cases in which animal experiments need to be conducted to develop some medical
products.
Based on the above policy, the HOYA Group has established regulations in each business in consideration ofvarious laws and regulations as well as guidelines established by relevant organizations, and conducts
internal screening from the viewpoint of the 3Rs principle on animal experimentation, i.e., Replacement(utilization of alternative methods of experimentation that do not involve the use of animals), Reduction(reduction of the number of animals used) and Refinement (alleviation of pain and suffering caused toanimals).

Water

Pollution
Measures©2021 HOYA GROUPHOYA INTEGRATED REPORT
2021 Control
60 Copyrightand Waste, etc.

INTEGRATED REPORT 2021

SocialHOYA Group Occupational Safety and Health Philosophy andFundamental Occupational Safety and Health Policies

The HOYA Group established its “Safety and Health Philosophy” and “Fundamental Safety and Health
Policies” in 1995. Under these guidelines, the Group has been promoting the occupational safety and healthactivities at all its business facilities globally.
In 2012, the Group reviewed the content of its environmental and occupational safety and healthmanagement systems upon acquiring global multisite certification for such systems, and has since been
conducting globally-standardized safety and health activities.

HOYA Group Safety and Health Philosophy

We believe that a healthy mind and body of each employee is essential for the enrichment of
all employees’ individual lives and the perpetual development of the HOYA Group companies.
We are therefore committed to maintaining and improving the employees’ health and creating
safe and pleasant conditions for all the employees of the group companies.
Fundamental Safety and Health Policies

1. We maintain and improve the employees’ health and safety at workplaces through the collective effortsof the company and the employees.
2. We observe applicable laws and regulations concerning workplace health and safety in creating safeand pleasant working conditions for the employees.
3. The company establishes effective organizations to measure workplace health and safety andpromotes schemes to improve such organizations systematically.
4. The company gives priority to implementing measures to prevent accidents at workplaces overinvesting in production facilities.
5. The employees exercise care for the maintenance and promotion of their own health while
incorporating the assistance from the company.

HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

HOYA Group Environmental Protection and Occupational Safety and HealthOrganization

In October 2008, the Group´s environmental protection organization and the occupational safety andhealth organization were merged with each other. Since then, with the new structure supervised by the
HOYA Group Director for Environmental Protection, Occupational Safety and Health, the Group has been
carrying out smooth and efficient activities of environmental protection and occupational safety andhealth. Having established the HOYA Group's standards and the like, we are making them thoroughly known
within the Group and conducting education at each business facility and production site in an effort toprevent accidents. Also, environmental, occupational safety and health activities that have been performed
are subject to an internal audit, followed by a review at the management level, based on which theeffectiveness of the activities are evaluated and improved on an ongoing basis.

HOYA Group Environmental Protection and Occupational Safety and Health Organization

Structuring of a global management system for its environmental protection andoccupational safety and health management system

The HOYA Group has been building a global management system that integrates ISO (International
Organization for Standardization) 14001 and 45001 for the purpose of promoting environmental protection
activities by employees and ensuring the safety and health of employees. In February 2013, the HOYA
Group acquired global multisite certification. As of March 2021, 50 sites in 18 countries were certified.
Certification has been acquired at 100% of our major production/research and development bases, andcertification is also being obtained for newly organized bases one by one.
For information on our acquisition status of ISO certification, please refer to this page.

HOYA INTEGRATED REPORT 2021

62

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

SocialHuman Capital

Labor Management
Respecting human rights

Basic approach
The HOYA Code of Conduct stipulates the basic guidelines to be complied with when performing operations
based on the Corporate Mission and values of the HOYA Group. The Code of Conduct clarify that basic
human rights are to be respected and that all forms of discrimination and harassment in connection torace, nationality, gender, religion, b elief, birthplace, age, or disabilities are to be eliminated in all corporate
activities. We aim to create a safe and healthy workplace that allows employees to feel secure while theywork. The Company will provide equipment, systems, and working conditions so that each and every
employee respects and cooperates with each other as the Company strives to create a workplace that iseasy to work in.
HOYA Code of Conduct
The HOYA Code of Conduct is guidelines for all officers and employees of the HOYA Group to execute
operations in the right way in accordance with the philosophy and values set out in its Corporate Mission
and Management Principles. Having translated the HOYA Code of Conduct into 27 languages inconsideration of the circumstances of the Company, which operates businesses on a global sca le, we aremaking the content thoroughly known within the Group by such means as making employees do a readthrough in the Group to which they belong once a year and conducting online education and verification
tests.
Go to HOYA Code of Conduct page

Respecting individuals

1. Preventing sexual harassment and power harassment
The HOYA Code of Conduct clearly states that the diverse values, individuality, and privacy of individuals areto be respected and clearly prohibits discretionary language, acts of violence, sexual harassment, andpower harassment in connection to race, nationality, gender, religion, belief, birt hplace, age, or disabilities.
Activities to promote the awareness of the Code are conducted through means such as training classes inJapan.

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Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

2. Establishment of an employee whistleblowing and consultation system
As part of our internal control systems, the HOYA Group established the HOYA Help Line in 2003 as awhistleblowing and consultation system for the Group. This is a framework that protects whistleblowers
when there have been violations of laws, regulations, or the HOYA Code of Conduct so that problems can be
known at an early stage and smoothly communicated to top management in an aim to ensure thesoundness of the entire Group through quick and appropriate responses to such issues.
We have been creating an environment in which advice can be sought easily, including establishing an
external point of contact, accepting whistleblowing complaints and consultation requests 24 hours a dayon the Web, and allowing anonymity.

Number of Whistleblowing Incidents (Global)
FY2016FY2017FY2018FY2019FY2020

75

111

105

146

135

Modern Slavery Statement

In accordance with the UK Modern Slavery Act 2015 legislation, the HOYA Group publishes a statement on
the steps it has taken to identify and eradicate slavery and human trafficking within its business and supply
chains.
Modern Slavery Statement (1,435KB)

Diversity

Utilizing global human resources
The HOYA Group promotes sales and production at optimal locations on a

Breakdown of Employees by Area

global scale in diverse businesses. In this context, the diversity of humanresources in the Company is our strength as well as our driving force forsustained value creation. HOYA believes that by respecting and accepting
diversity and proactively taking advantage of the “differences,” we canflexibly adapt to the ever-changing business environment and meet
diversifying customers' needs, and thereby bring about higher corporate
value.
HOYA has long been recruiting personnel based on their individual
capabilities, regardless of their nationality, gender, etc. Over 90% of ouremployees work in locations outside Japan. By proactively promoting
talented local employees to top management positions and giving themmore opportunities, we have been pursuing globalization of the Group asa whole, resulting in the percentage of non-Japanese nationals in top
management positions at overseas subsidiaries exceeding 90%. Goingforward, HOYA will continue to provide equal opportunities to many
competent personnel.

HOYA INTEGRATED REPORT 2021

64

Copyright ©2021 HOYA GROUP

Non-Japanese Top Management
at Overseas Subsidiaries

diversifying customers' needs, and thereby bring about higher corporate
value.
HOYA has long been recruiting personnel based on their individual
INTEGRATED REPORT 2021

capabilities, regardless of their nationality, gender, etc. Over 90% of ouremployees
workin locations
outsideBy proactively
promotinga
As of the endof June2021, atHOYA Japan.
Corporation,
we have promoted
talented
local
employees
totopmanagement
positionsandgivingnationals
them
non-Japanesethe position
executive
and six we
non-Japanese
As of the end oftoJune
2021, atof
HOYA
Corporation,
have promotedamore
opportunities,
we have been
pursuing
globalizationoftheGroup asservingasdivisionmanagers,
accountingforthemajorityofdivision
non-Japanese to the position of executive and six non-Japanese nationalsawhole, resulting
in the percentage
of non-Japanese nationals in top
managers,
ran businesses
globally.
serving as division
managers,
accounting for the majority of division
management positions at overseas subsidiaries exceeding 90%. Going
managers, ran businesses globally.
forward, HOYA will continue to provide equal opportunities to many

Non-Japanese Top Management
at Overseas Subsidiaries

competent personnel.

“Minkatsu” Diversity Project“Minkatsu”
In 2014, we Diversity
launched Project
the “Minkatsu” diversity project for the purpose of creating a work environment in
which
each
every theemployee
can feela senseof fulfillment
from workand playaan
activerole by fully
In 2014,
we andlaunched“Minkatsu”
diversity
project
for the purposeof creating
work
environment
indemonstrating
his/herability.
As
part
of
the
“Minkatsu”
diversity
project,
weareworking
toincrease
thewhich each and every employee can feel a sense of fulfillment from work and play an active role by fully
proportionof female
employees
demonstrating
his/herability. Asandpartfemaleof theleaders*.
“Minkatsu” diversity project, we are working to increase the*proportion
Female leaders:
Subsectional
chief andequivalent
to leaders*.
or above section and highly skilled professionals
of female
employees
female* Female leaders: Subsectional chief equivalent to or above section and highly skilled professionals

Proportion of Female Employees and Female Leaders
Proportion of FemaleFY2020
Employees and Female LeadersJapan

Overseas*

Group-wide

Proportion ofFY2020
Female Employees

Japan
28.0%

Overseas*
55.7%

Group-wide
53.0%

Proportion
ProportionofofFemale
FemaleEmployees
Leaders

28.0%
12.7%

55.7%
43.3%

53.0%
34.5%

* The surveyProportion
method is different
fromLeaders
the previous survey as the scope
expanded with respect to34.5%
of Female
12.7%of the survey was43.3%
overseas employees.
* The survey method is different from the previous survey as the scope of the survey was expanded with respect tooverseas employees.

Proportion of Female Employees and Female Leaders in Japan
Proportion of Female Employees and Female Leaders in Japan

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Copyright ©2021 HOYA GROUP

Proportion of Female Leaders

12.7%

43.3%

34.5%

* The survey method is different from the previous survey as the scope of the survey was expanded with respect tooverseas employees.
INTEGRATED REPORT 2021

Proportion of Female Employees and Female Leaders in Japan

We do not discriminate based on gender in hiring, promotions,orincreases,
and insteadon actively
employing
Wepay
do notdiscriminate
based focus
on gender
in hiring,promotions,humanresources
withhighlyspecialized
capabilities
andor
increases,
and insteadon actively
employing
Wepay
do notdiscriminate
based focus
on gender
in hiring,promotions,morals.
In addition,oneof thespecialized
independent
directors
is a
human
resources
withhighlycapabilities
andor pay increases,
andinsteadfocus
on actively
employingwoman(16.7%
oftotal
directors).
morals.
In addition,
onehighlyof thespecialized
independent
directors andis ahuman resourceswithcapabilities

woman
of total
morals. (16.7%
In addition,
onedirectors).
of the independent directors is a
Despite having promoted the “Minkatsu” diversity project bywoman (16.7% of total directors).
settingtargetat makingleaders
in Japanaccount
Despiteour
havingpromotedthefemale“Minkatsu”
diversity
project
by
for
10%
or
higher
by
March
31,
2018,
we
fell
short
of
meetingsettingtargetat makingleaders
in Japanaccount
Despiteour
havingpromotedthefemale“Minkatsu”
diversity
projectbythetargetthat bypoint
in time.
We arepromotingactivities
for
10%
or at
higher31,
2018,
wefell inshortof meeting
setting
ourtarget
at MarchmakingfemaleleadersJapanaccount
basedonornew
targets
that
wesetagain,
i.e., activities
makingthetarget
at
that
point
in time.
We arepromotingfor 10%higherby
March
31,have2018,
wefell shortof meeting

femaleleadersandfemaleemployees
Japani.e.,
account
for atbasedonnewtargets
that
we havesetinpromoting
again,
makingthe target
at thatpoint
in time.
We areactivities
least
and targets
30%,
respectively,
by April
2023.i.e.,The
proportion
femaleleaders
and femaleJapanaccount
for atbased15%on
newthat employees
we havesetinagain,
makingof
women
is steadily
increasing,
and
going
forward,we will
least
15%
and
30%,
respectively,
by April
2023.
The
proportion
femaleleaders
and female
employees
in Japanaccount
for atcontinuetoengageininitiatives
fromtheviewpoint
of
of
women
is steadily
increasing, andgoing
forward,we will
least
15% and30%, respectively,
by April2023.
The proportion

Seminar by Eiichiro Ikeda (CTO) for female
employees in technical positions
Seminar by Eiichiro Ikeda (CTO) for female
employees
technical
positions
Seminar by inEiichiro
Ikeda(CTO) for female
employees in technical positions

expandingtherecruitment
and occupational
fields ofwomen
continue
engageinincreasing,initiatives
fromthe viewpointofof womentois
steadilyand going
forward,
we
will
and
improvingtheworkplaceenvironment/culture,
as
well
as
expandingrecruitment
and occupational
fields ofcontinue tothe
engagein initiatives
from the viewpoint
ofwomenholdingcareeradvancement
seminarsand cross-divisional
andimproving
the workplaceenvironment/culture,
aswomenwell asexpanding
the recruitmentandoccupational
fields ofexchangemeetings
targetedatfemaleemployees,
amongholdingcareer advancement
and cross-divisional
and improving
the workplaceseminars
environment/culture,
as well asothers.
exchangemeetings
targeted at
female andemployees,
amongholding careeradvancement
seminarscross-divisional
others.
exchange meetings targeted at female employees, among

others.
Business divisions are making efforts to develop the necessary environment, systems and culture
tailored
their respective
businesses.
Businesstodivisions
are making
efforts to develop the necessary environment, systems and culture
tailored
their respective
businesses.
Businesstodivisions
are making
efforts to develop the necessary environment, systems and culture
Those related to childcare/nursing care support
Those related to workstyle in general
tailored to their respective businesses.
Those
related to childcare/nursing
care support
Those
relatedto workstyle in generalChildcare/nursing
care support system(leaveFlextime
systemThose
related tochildcare/nursing
care supportofabsence,shortenedChildcare/nursing
careworking
support hours)
system(leaveStaggeredworking
hours
ofabsence, shortenedChildcare/nursing
careworking
support hours)
system (leave

Those
relatedto workstyle
inreduced
generalnumber of
Shortenedworking
hours,
Flextime
systemworking
Shortenedworking hours, reduced number of
Flextime days
systemLeave
to provide
careforchildrenStaggeredworking
hours
ofabsence,shortenedworking
hours)
Encouraging
malecareemployees
to take childcare
Leave
to provide
for children
Staggeredworking
hours

Challenge
leave*
working
days
Shortenedworking hours, reduced number ofSecondjob
Challenge
leave*
workingdays

leave,
Encouraging
malecareemployees
to take childcare
Leave etc.
to provide
for children

Work
from
home
Secondjobleave*
Challenge
Encouraging
employees to proactively take
Work
from
Secondjobhomeleave,
etc.
Encouraging
male employees to take childcare

annualleavebysetting recommended
Encouraging
employees
to proactively days
takeWork fromhomefortakingannualleave,
etc.
annualleave bysetting recommended
Encouraging
employees
to proactively days
takeleave, etc.

fortakingannualleave, recommended
etc.
annualleaveby setting
days
for taking annual leave, etc.
* Please refer to our website.
* Please refer to our website.
HOYA INTEGRATED REPORT 2021
* Please refer to our website.

66

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By developing an environment in which diverse personnel can play an active role by demonstrating theircapabilities and systems that enable workstyles with higher productivity and efficiency, we will strive tostrike a balance between realizing the sense of fulfillment from work as well as personal life and enhancing
corporate value.
Utilizing people with disabilities
The HOYA Group actively utilizes people with disabilities, for example in the operation of its Ichikawa
Challenge Office that supports eco projects. For more information about the eco project, please see Social
Contribution Activities.

Employee Engagement Survey

In order for the workplace—i.e., “HOYA”—to be a “field” in which
individuals can undergo further growth while “actions
demanded” by the Company are demonstrated by employees
on an individual basis, we believe that it is important for both
employees and the Company to make efforts to pursue theideal workplace by identifying the areas in need of
improvement through engagement surveys. The Company
conducts an employee engagement survey covering the entire
Group once a year. The response rate for the survey conductedin March 2021 was 96%.

“Actions Demanded by HOYA”
Engage in work from a business perspective in view of total optimization—not partial optimization—of business while being mindful of our vision
・ Reject the status quo and make a change ・ Stick to your strong beliefs
・ Think outside the box in terms of your work

We believe that by taking such actions, the creation and innovation of new values and frameworks will befacilitated , and that the growth of individuals will translate into the growth of businesses and the Company
as a result.
In response to the survey results, discussions are held at each workplace, and based on a deeper
understanding of the results, areas in need of improvement are identified and reflected in action plans.

HOYA Group Occupational Safety
and Health Philosophy andFundamental Occupational Safety
and Health Policies

Labor Management

Human Capital
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Development of Human
ResourcesINTEGRATED REPORT 2021

SocialHuman CapitalOccupational Safety and HealthOccupational safety and health activities

The HOYA Group is pushing for the creation of a pleasant workplace environment where every one of theemployees can work in good health and safely. The Group believes that such a work environment isessential for a fulfilling life of each of the employees and a lasting development of our enterprise.

Structuring of a global management system for its environmental protection andoccupational safety and health management system

The HOYA Group has been structuring a globally-operated management system that integrates ISO(International Organization for Standardization) 14001 and 45001 for the purpose of promoting
environmental protection activities by employees and ensuring the safety and health of employees.
In February 2013 , the certification of the Group switched to a global multisite certification.
In March 2021, the certification is applied to 50 sites in 18 countries.
Certification has been acquired at 100% of our major production/research and development bases, andcertification is also being obtained for newly organized bases one by one.
For information on our acquisition status of ISO certification, please refer to this page.

Reduction of risks using risk assessment

All hazardous factors are constantly being checked by risk assessment in accordance with the HOYA Group
Risk Management Guidelines for Occupational Safety and Health. As well, effective safety measures arebeing taken in order of priority for risk reduction.

Strengthening of chemical substances management

Based on the HOYA Group's common index HOYA Group Chemical Substances Management Standard, weare managing chemical substances used in our business activities and working to prevent occupational
accidents and diseases caused by chemical substances.

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Assurance of Safety of machines and equipment

The safety of machines and equipment is a matter of greater importance in achieving occupational safety.
Various measures for the safety of machines and equipment (reduction of risks) are being taken from thedesign stage according to the HOYA Group Standard for the Safety of Machines and Equipment to preventmachine-related accidents.

OSH Audit (Occupational safety and health)At all the Group's business facilities inside and outside Japan, theenvironment, occupational safety and health personnel and specialized
staff conduct internal audits periodically. After the audits, they givenecessary advice and guidance to respective sections to improve theirobservance of laws and regulations and performance of occupationalsafety and health.

Training in HOYA Group safety and health

The facility environment, occupational safety and health personnel
conference is held twice a year. The intra-Group consulting program for
guidance and training on management systems and risk assessment isheld several times a year mainly for the overseas production bases. These
are all designed to enhance the performance of the occupational safety
and health activities within the HOYA Group.
Go to Occupational Accidents at HOYA Facilities page>

Health promotion activities

CEO message on the health of our employees
Based on the recognition that “health promotion efforts are business investments,” the HOYA Group aims tomaintain and promote the health of employees through organizational support and self-help efforts byemployees themselves. In April 2015, the CEO issued a message to employees on 10 items that employees
are encouraged to adhere to for the promotion of health.

Certification for health and productivity management organizations

The HOYA Group has been certified for fiveconsecutive years under the Ministry of Economy,
Trade and Industry (METI)'s certification program
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for outstanding health and productivity
management organizations since the start of the
program in 2017 (as of April 1, 2021). This programis administered by METI jointly with Nippon Kenko
Kaigi and in coordination with insurers to certify
and announce companies practicing excellent
health and productivity management. HOYA ispracticing health and productivity management ona daily basis.

Mental health promotion

HOYA provides mental health education by industrial physicians for managers and general employees todeepen their understanding of mental healthcare. HOYA has also established the HOYA Group Mental
Healthcare Guidelines to ensure sufficient line care by managers and to clarify the roles of the manager, theperson in charge of personnel affairs, and the industrial physician in the introduction of treatment andreinstatement responses to ensure efficient coordination among them. Furthermore, HOYA is engaged ininitiatives to improve the work environment on an ongoing basis by conducting stress checks on employees
and utilizing their organizational analysis results.

Overwork prevention

HOYA has established the HOYA Group Standard for the Prevention of Overwork-related Health Problems,
which is in compliance with industrial safety and health laws and regulations, and has implemented it at all
HOYA Group companies. Workers with long working hours are required to have an interview with anindustrial physician, and a system has been put in place to ensure the person in charge of personnel affairs,
the manager, and the industrial physician work together to slash long working hours from the perspectivesof both labor management and health management. In addition, as part of workstyle reform, HOYA is
strengthening efforts to steadily improve the utilization rate of annual paid leave.

Smoking control

To prevent passive smoking, indoor smoking has been prohibited in principle in all facilities located in Japanand overseas since April 2008. HOYA has also established a standard for the designation of outdoor
smoking spaces to prevent any passive smoking by passersby or people taking a break. Furthermore, wehave adopted stricter rules to prevent passive smoking in April 2018 to ensure that for parties, dinners etc.,
hosted by HOYA, a venue that is entirely non-smoking or provides a separate smoking area will be selected.
HOYA introduced rules to totally prohibit smoking at all facilities inside and outside Japan during theregular working hours from fiscal 2021. HOYA aims to create a comfortable work environment at theworkplace where employees spend a significant part of their living hours.

Specific Health Checkups and Specific Health Guidance

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Copyright ©2021 HOYA GROUP

hosted by HOYA, a venue that is entirely non-smoking or provides a separate smoking area will be selected.
HOYA introduced rules to totally prohibit smoking at all facilities inside and outside Japan during theregular working hours from fiscal 2021. HOYA aims to create a comfortable work environment at the
INTEGRATED
2021 hours.
workplace where employees spend a significant
part of REPORT
their living

Specific Health Checkups and Specific Health Guidance
As part of efforts to prevent metabolic syndrome, HOYA has provided health guidance focusing on theprevention of lifestyle diseases of employees (lifestyle improvement program) in coordination with thehealth insurance association since 2002 before the start of the national Specific Health Guidance program.
The scope of the health guidance has been expanded to cover employees less than 40 years old (themilestone ages of 25, 30, and 35 years old) for the early detection and treatment of lifestyle- related disease.
We also monitor the participation rate and the achievement rate of Specific Health Checkups and Specific
Health Guidance annually and are considering the introduction of a program to improve the participation
rate.

Improving medical support at overseas facilities

At the HOYA Group, industrial physicians make regular visits to overseas facilities to support thecoordination between local medical institutions and each facility. Under this arrangement, the coordination
between local medical institutions and the facility enables both local employees and Japanese expats toreceive appropriate and prompt medical services in the event of an emergency situation and for the
management of chronic diseases.

Improving emergency medical care and first aid responses

We have established the HOYA Group Standard for Emergency Medical Care and First Aid to provide
appropriate emergency medical care and first aid in the event of a workplace accident or an emergency
situation and thereby to minimize health damage of employees. Based on this Standard, we work to ensure
the proper installation and management of first aid equipment and to ensure that all employees ultimately
receive lifesaving training to prepare for emergencies. Some of the facilities are equipped with an AED on
the condition that at least two workers who have completed lifesaving training are assigned to each work
shift.

Developmentof Human Resources

HOYA Group
Occupational Safety
and Health Philosophy
and Fundamental
Occupational Safety
and Health Policies

Occupational Safety
and Health

Human Capital

Product Safety
and Quality

Labor
Management

Supply Chain
Management

Developmentof HumanResources
Occupational
Safety and
HealthHOYA INTEGRATED REPORT 2021

Product Safety and Quality

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Corporate
CitizenshipINTEGRATED REPORT 2021

Social
Product Safety and Quality

Product Safety Assurance Policy and Structure
Product safety assurance policy■Legal compliance
Each company in the HOYA Group complies with the standards required of products in Japan andelsewhere around the world. We also comply with laws, regulations, and other standards related to productquality and safety.
■Collecting and responding to product incident information
Each company in the HOYA Gr oup collects information from customers and other sources related to
product incidents and/or malfunctions. When necessary, we provide legally mandated reports to regulatory
agencies and appropriate information to customers and others. We enact measures to recall products,
repair products, in addition to taking other actions regarding any product-related issues.
■Ensuring product safety
Each company in the HOYA Group provides, where appropriate, user training, up-to-date user guides anddocuments, product warning labels, and other information for the effective, safe use of our products. We
continue to seek opinions from users of our products and reflect this feedback in future products.
■Training and educational systems to improve product safety and quality
Each company in the HOYA Group strives to improve product safety and quality. To accomplish this goal,
we conduct ongoing education and training activities. At the same time, each Group company performs
reviews and updates to product safety and quality management organizations and systems.

Product safety assurance structure

At the HOYA Group, under the supervision of the executive officer in charge, each business division has
product safety assurance functions. For businesses falling under the Life Care segment, which handles

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medical products, we have established a division in charge of regulations, quality, and government affairs
across these businesses.

Quality Management System

The HOYA Group has acquired international quality management system ISO 9001 (mainly for the
Information Technology business) or ISO 13485 (mainly for the Life Care business) focusing on major
production bases in each business and is making efforts to improve the safety and quality of its products.
For information on our acquisition status of ISO certification, please refer t o this page.

Occupational Safety
and Health

HOYA Group
Occupational Safety
and Health Philosophy
and Fundamental
Occupational Safety
and Health Policies

Product Safety and Quality

Supply Chain Management

Product Safety
and Quality

Human Capital
Labor
Management
Development of
Human Resources

Supply Chain
Management

Occupational
Safety and
HealthHOYA INTEGRATED REPORT 2021

73

Copyright ©2021 HOYA GROUP

Corporate
CitizenshipINTEGRATED REPORT 2021

SocialSupply Chain
Management

Basic Policy

The HOYA Group operates manufacturing facilities on a global scale and sells products to customers
around the world by processing and assembling raw materials and components procured at the facilities ineach country.
In order to boost corporate value in a sustainable manner, it is important to maintain product safety andquality at a high level, comply with laws and regulations and protect human rights not only within the
Company but also throughout its supply chains. For this purpose, it is imperative to manage supply chainsin an appropriate manner. Accordingly, major suppliers are required to sign and comply with the HOYA
Supplier Code of Conduct; additionally, key suppliers are visited and examined periodically, and asnecessary, provided with assistance to make improvements .

HOYA Supplier Code of Conduct

The HOYA Group seeks to apply a high level of legal compliance and ethical practices consistent with its
legal and social responsibilities and duty to protect the basic human and worker rights of everyone in theorganization.
We have also established the HOYA Supplier Code of Conduct that applies to all suppliers providing
products and services to us. The Code requires ou r suppliers to adopt the same level of legal complianceand ethical practices as HOYA, and all our suppliers are asked to accept and comply with it before
conducting business with HOYA.
In fiscal 2020, the collection rate of receipts was around 90%. Going forward, we will continue to work on
suppliers so that we can obtain signatures from all of them.
Please refer to the HOYA Supplier Code of Conduct, which is available here.

Supplier Audits

Key suppliers are audited, either periodically or as necessary, in accordance with the quality assurance
system in each business segment.

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Responses to Conflict Minerals

With the cooperation of its suppliers, the HOYA Group does not use any minerals sourced from the
Democratic Republic of the Congo or its neighboring countries that are defined as conflict minerals in
Section 1502 of the U.S. Dodd-Frank Act.
We request suppliers to comply with the HOYA Supplier Code of Conduct that sets out the above policy, andkey suppliers to cooperate in our conflict minerals survey using the Conflict Minerals Reporting Template(CMRT), which is a template provided by the Responsible Minerals Initiative (RMI).
The conflict minerals survey, which had previously been conducted in the Information Technology business,
was evolved into a Company-wide initiative by expanding its scope to include the Life Care business as wellin fiscal 2020.
We will continue to engage in initiatives with the cooperation of suppliers, including initiatives to identify
smelters so that the procurement source of minerals will be limited to smelters that are compliant with the
Responsible Minerals Assurance Program (RMAP).

Supply Chain
Management

Product Safety and Quality

HOYA Group
Occupational Safety
and Health Philosophy
and Fundamental
Occupational Safety
and Health Policies

Human Capital

Product Safety
and Quality

Labor
Management

Supply Chain
Management

Developmentof HumanResources
Occupational
Safety and
HealthCopyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUP

Corporate Citizenship

Corporate
CitizenshipINTEGRATED REPORT 2021

SocialCorporate CitizenshipContact Lens Store “Eyecity Eco Project”
Campaign to Recycle Empty Contact Lens Cases

Eyecity—our chain of contact lens specialty stores—executes the “Eyecity
Eco Project,” a recycling campaign in which special boxes are set up in
Eyecity stores across Japan to collect empty disposable contact lens
cases that are recyclable. This industry-first campaign was launched in2010 with the aim of contributing to society in three ways (1. Protecting
the environment by recycling empty cases into resources, 2. Providing selfreliance/employment support to disabled persons, and 3. Making
donations to the Japan Eye Bank Association) and celebrated its 11th
anniversary this year.
Since the launch of the campaign, we have been conducting a wide range of collection activities with theendorsement and cooperation of many organizations, local governments, and customers. Empty contact
lens cases are collected regardless of the shop where they were purchased or the manufacturer and thensold to recycling manufacturers. Proceeds from the sale are donated to the Japan Eye Bank Association to
help people who wish to regain their sight. The reality, however, is that approximately 5,000 tons of empty
contact lens cases per year are still being disposed of as waste. For this reason, we will continue making
efforts to broaden our circle of corporate citizenship with the cooperation of more people going forward.
Volume Collected and Amount Donated to Date

Cumulative volume of empty
cases collected(As of May 2021)

Cumulative CO 2 emissions
reduced(As of May 2021)

399.92 tons

1095.18

We have collected (390 million
empty cases).

t-CO2

We have contributed to the
reduction of CO2 emissions
equivalent to 5.6 times the volumeof the Tokyo Dome.

Cumulative amount donated(As of March 2021)

9,145,731
yen

The entire amount received in
exchange for recycling has been
donated to the Japan Eye Bank
Association.

“Eyecity Eco Project”: Contributing to Society in Three Ways
HOYA INTEGRATED REPORT 2021

Protecting the Environment by
Recycling Empty

76

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of the Tokyo Dome.
INTEGRATED REPORT 2021

“Eyecity Eco Project”: Contributing to Society in Three Ways

Protecting the Environment by
Recycling Empty
Cases into Resources

We reduce CO 2 emissions by recycling empty cases instead of incinerating them as waste.

Providing Self-Reliance/
Employment Support to Disabled Persons

Ichikawa Challenge Office—the disabled people's division of Eyecity—is engaged in recycling support
operations, including peeling aluminum stickers off empty cases that have been collected from storesand ophthalmology clinics.
Each year, the Office also purchases 80,000 small hand-made items produced at social welfare
facilities across Japan and gives them as a present at Eyecity stores to customers who havecooperated as a token of appreciation. We hope to make greater contributions to local communities
through the local consumption of these locally-produced, small hand-made items.

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Making Donations to the Japan Eye Bank Association

All the proceeds from the sale of empty cases to recycling contractors are donated to the Japan Eye
Bank Association. To recover the sight of individuals suffering from impaired vision due to corneal
disease, the eye bank serves as a bridge between those awaiting corneal transplant and donors.
The Association is engaged in activities to promote eye donation registration with the eye bank andmake arra ngements for doctors to extract the cornea in the event that a prospective eye donor has
passed away.
What Is the Japan Eye Bank Association?
The Japan Eye Bank Association is a non-profit, public interest corporation established for the
purpose of awareness-raising and promotion of corneal transplant and the eye bank so thatpeople in need of a corneal transplant can regain their sight.

Agreement Signe d with Public Institutions
We have entered into an agreement with public institutions with the aim of contributing to a sustainable
society through mutual cooperation in the appropriate collection of empty disposable contact lens cases.
Eyecity will expand this initiative across Japan.
Current number of participants in the "Eyecity Eco Project" (as of the end of May 2021)

Schools

Companies

Local governments

1,651 schools

702 companies

15 areas

Elementary/juniorhigh/high/vocational schools

1,949 locations
including offices and branches

91 locations
including public facilities

Click here for more information on the Eyecity Eco Project. (Only in Japanese)

HOYA Vision Care Canada: Medical Optometric Care Support Activities

Becomes National Partner of Optometry Giving Sight (OGS)HOYA INTEGRATED REPORT 2021

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Copyright ©2021 HOYA GROUP

Elementary/juniorhigh/high/vocational schools

1,949 locations
including offices and branches

91 locations
including public facilities

INTEGRATEDREPORT
2021in Japanese)
Click here for more informatio n on the Eyecity
Eco Project.
(Only

HOYA Vision Care Canada: Medical Optometric Care Support Activities

Becomes National Partner of Optometry Giving Sight (OGS)In March 2021, HOYA Vision Care Canada, which is engaged in the eyeglass lens business, became anational partner of Optometry Giving Sight (OGS), an organization conducting fund-raising activities andproviding financing for regions and communities in need of support for medical optometric care and othersupport activities in more than 40 countries worldwide.
HOYA Vision Care Canada will continue to engage in activities to contribute to society to enable as many
people as possible around the world to receive medical assistance and gain a clear vision through its
donations to OGS and support activities.
Click here for the website of Optometry Giving Sight.

HOYA LAMPHUN LTD.: Disaster Support through Recycling Activities

Recycling Paper Cartons into Materials for Repairing Disaster-Damaged Roofs

HOYA LAMPHUN LTD. in Thailand has been helping
repair roofs damaged due to disasters by collecting
used paper cartons for beverages and recycling
them into roofing materials with the cooperation ofa volunteer foundation under The Thai Red Cross
Society since 2012. To date, approximately 950 kgof paper cartons (equivalent to about 91,000 p aper
cartons) has been collected and recycled into 45
sheets of roofing materials.

Going forward, the HOYA Group will continue carrying out activities to contribute to society on a global
scale in close association with each business domain/region.
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Life Care Segment

Impact of COVID-19
Since the outbreak of the COVID-19 pandemic, the demand for products of the Life Care segment has
temporarily decreased due to such facto rs as restrictions on economic activities. However, normality is
expected to be restored in its businesses along with the progress in vaccinations and the resumption of
economic activities.
The shift of eyeglass lens and contact lens retailers to online sales channels is expected to be gradualrather than rapid, due to restrictions by medical regulations in each country, among others. No mediumto long-term changes in industrial structure have been observed, so there are no changes in the growthscenario of HOYA's Life Care segment.
Customer demand

Eyeglass
lensesContact
lensesCurrent status

Future prospect

Demand is on arecovery trend,
despite variations
among
regions/countries
depending on thepace of progress invaccinations andthe resumption of
economic
activities.

Demand is expected toundergo a full-fledged
recovery along with theprogress in vaccinations
and the resumpt ion of
economic activities.

Demandtemporarily
decreased due tothe reduction in thefrequency ofcontact lens use
associated withfewer
opportunities to goout. Amid the stateof emergency
declaration, somestores have beenclosed or
shortened theiroperating hours; inDemand is expected torecover from the second
half of the fiscal year
ending March 31, 2022
(fiscal 2021) onward, as
oppo rtunities to go out
increase along with theprogress in vaccinations.

HOYA INTEGRATED REPORT 2021

80

Changes in the market
structure due to COVID-19

None in particularNone in particular
Acceleration of the shift to online
sales channels and other suchdevelopments have not been
observed; in Japan, contact lens
specialty stores still serve as thebiggest sales channel.

Copyright ©2021 HOYA GROUP

Endoscopes
Endoscopes
Endoscopes

Intraocular
IntraocularlenseslensesIntraocularlensesresponse, online
response,
onlineatsales(targetedsales(targetedatEyecitymembers)
response,
onlineEyecitymembers)
are
being
sales
(targeted atare beingpromoted.
Eyecity members)
promoted.
are beingpromoted.
Hospitals’ capital
Hospitals’ capital
investment
investment
environment
Hospitals’ capitalenvironment
seems
to be
investment
seems to be
recovering
environment
recovering
gradually.
seems to be
gradually.
recovering
gradually.
Demand is on a
Demand ison arecoverytrend,
recoverytrend,
despiteDemandvariations
is on adespite variations
among
recovery trend,
among
regions/countries
despite variations
regions/countries
dependingon theamong
dependingon thepaceofprogressregions/countriesin
paceofprogressinvaccinations.
depending on thevaccinations.
pace of progress invaccinations.

INTEGRATED REPORT 2021

As inspections that had
As inspections
hadto
been
postponedthat
returnbeen
postponed
returntonormalin termsthatof theAs inspections
hadnormal
in
terms
of
the
numberof cases,return tobeen postponed
number ofcapitalcases,
hospitals’
normal in terms of thehospitals’ capital
investments
are expected
number of cases,
investments
are expectedtoresume,capitalleading
to ahospitals’
toresume,leading
to arecoveryindemand.
investments are expected
recovery in demand.
to resume, leading to a
Demand is expected torecoveryin expecteddemand. to
Demandalongisrecoverwith therecover alongwith theprogressinvaccinations,
Demand is expected toprogressinvaccinations,especially
among
recover alongwith theespeciallycomprisedamong of thepatients
progress in vaccinations,patientsPent-up
comprisedof theelderly.
demandespecially among
elderly.
Pent-updemandis
expected
to arise of thepatients
comprised
is expected totemporarily
forarisecataract
elderly. Pent-up
demandtemporarily
forcataract
surger
y
that
had
been
is expected to arise
surgery that had been
postponed.
temporarily for cataract
postponed.
surgery that had beenp ostponed.

None in particular with respect toNone
in particularwithrespect tothemainmarket, i.e.,
existingthemainmarket,i.e.,existing
reusableendoscopes.
marketNone in particularwithTherespecttoreusableendoscopes.
The market
ofdisposable
endoscopes
the main market, i.e., existingof disposableappearstobe endoscopes
expandingthereusableendoscopes.
Theon
marketappears
tobeexpanding
on
the
back
of COVID-19.
ofdisposable
endoscopes
back of COVID-19.
appears to be expanding on theback of COVID-19.

None in particularNone in particularNone in particular

Health Care
Health Care
(Information
HealthCareon HOYA’s products may be found in the “Business Domains” section of its website. Please(Information on HOYA’s products may be found in the “Business Domains” section of its website. Pleaserefer to this section for further information.)refer to this section for further information.)(Information on HOYA’s products may be found in the “Business Domains” section of its website. Pleaserefer to this section for further information.)

Eyeglass Lenses
Eyeglass Lenses

Business Lenses
Overview
Eyeglass

Business Overview
HOYA conducts research and development, manufacturing, and sales of
HOYA
conducts
research and development, manufacturing, and sales ofBusiness
Overview
eyeglass lenses.
eyeglass lenses.
HOYA conducts research and development, manufacturing, and sales of
Our product lineup includes single-vision lenses that possess a single
eyeglass
lenses.
Our productlineup includes single-vision lenses that possess a single
corrective function for each lens, as well as progressive lenses (varifocal
corrective function for each lens, as well as progressive lenses (varifocal
Ourproduct
lineupwide
includesthattransition
possess abetween
singlelenses)that offer
visualsingle-vision
fields and alenses
seamless
lenses) that offer wide visual fields and a seamless transition between
correctivefunction andfor eachlens, as wellprogressive
lenses (varifocal
near, intermediate,
far distances
in aassinglelens.
near, intermediate, and far distances in a single lens.
lenses) that offer wide visual fields and a seamless transition between
By geographical region, a significant amount of sales, approximately 87%,
near,intermediate,and fardistances amountin a single
Bygeographicalregion,a significant
of lens.
sales, approximately 87%,
takes place in markets outside Japan.
takes place in markets outside Japan.
By geographical region, a significant amount of sales, approximately 87%,
takes place in markets outside Japan.
Supply Chain
Supply Chain
Supply Chain

HOYA INTEGRATED REPORT 2021

Market Conditions

81

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Market Conditions
To curb the rapid spread of COVID-19, many social and economic activities faced restrictions around theworld. Curfews, temporary closures and social distancing measures also affected eye care professionals
around the globe herewith greatly impacted our sales. After the first quarter of fiscal 2020, however, arecovery trend set in, and we are expecting to turn this into growth as vaccination spreads and control overthe spread of the virus is extended, subject to the economic activities across countries.
External research indicates that most countries will return to their pre-COVID-19 level by 2022 calendar
year. And from there, we expect the eyeglass lenses business will return to an organic growth at the low to
mid single digit rate from a mid to long term perspective, driven by an increasing aging populationworldwide, enhanced purchasing power owing to the economic growth of emerging economies, increased
awareness of eye health, and longer hours using digital devices.
The contribution to global growth varies per region. North America,
Europe, and Japan being the mature markets will continue to play a

Sales by Region(FY2020)

significant role in the overall market; while faster growth is expectedfrom emerging mark ets from increased availability of vision protection
products and growing middle class populations, such as in the LATAM
and APAC regions.
HOYA Position and Market ShareHOYA stands at the No. 2 position in the industry, and, in addition toorganic growth, has expanded its share of the market through M&A
initiatives, including the 2013 acquisition of SEIKO’s eyeglass lens unit,
and U.S.-based Performance Optics, LLC in 2017.
HOYA Outlook
Eyeglass lens products account for over 50% of Life Care business

Market Share (FY2019)

sales, and are a growth driver for Life Care business expansion.
We are strengthening sales activities in Asia, with a focus on China, as
well as in several growth markets on the South American continent.
Additionally, in the United States, we continue to focus on expanding
sales to key accounts and chain stores, on top of the strongly
established presence amongst independent opticians. With theseopportunities and focus areas, we aim to achieve higher than market
growth. On top of that, we will also continue to pursue M&A
opportunities to boost growth.

[HOYA estimate on a value basis]On the production side, to respond to the increasing demand, we
completed the construction of our second plant in Vietnam andstarted production in July 2020.
The rapid progression of myopia is becoming a global health challenge. An estimated 5 billion people, or halfof the global population, could be affected by short-sightedness by 2050. Together with the Hong Kong
Polytechnic University, HOYA developed “MiYOSMART”; an innovative spectacle lens for myopia contr ol.
Commercialization of the product started in 2018. MiYOSMART is currently available in several markets,mainly in Asia and Europe, and will be expanded in the future after obtaining approval.
Note: Not approved in Japan and the U.S. as of July 2021.
Number of Myopia Population

HOYA INTEGRATED REPORT 2021

82

Copyright ©2021 HOYA GROUPMiYOSMARTPolytechnic University, HOYA developed “MiYOSMART”; an innovative spectacle lens for myopia control.
Commercialization of the product started in 2018. MiYOSMART is currently available in several markets,mainly in Asia and Europe, and will be expanded in the future after obtaining approval.
Note: Not approved in Japan and the U.S. asINTEGRATED
of July 2021.
REPORT 2021
Number of Myopia Population

MiYOSMART

Source: Holden B. A. et al. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through 2050.
Ophthalmology. 2016 May;123(5):1036-1042

Contact Lenses
Business Overview
In Japan, we are expanding Eyecity outlets, HOYA’s contact lens specialty
retail store chain.
At Eyecity, we offer consulting and sales, making productrecommendations ideally suited to the needs of individual customers, and,leveraging our strength, we provide a wide lineup sourced from major
manufacturers throughout the world.
Stores are established in convenient locations, in close proximity to train
stations, inside shopping centers, and other areas.
Market Conditions
The contact lens market in Japan, which had been valued atcontract lens demand
to remain
unchanged
goinginforward,
given theapproximately
400 billion
yen, temporarily
shrankthe COVID-19-

Sales Composition Ratio
by Sales Channel (FY2020)

increasingfiscal
percentageof nearsightedness
the younger
generation,
impacted
2020, dueto the reduction amongin the frequency
of contact
lensand asthearisingof contact
users
due to inthegrowingofuse
resultageof suchfactorslens
as theincreaseWork
FromprevalenceHome (WFH)
multifocal
contact lenses.
Furthermore,marketexpansion—albeit
slight—andhomeschooling
opportunities
and thedecreasein opportunities
to go
is expected
to we
continue
forward, due to suchfactors as the
rise
out.
However,
expectgoing
the medium/long-term
expansionaryt rendofin
theaveragesales pricestemmingfrom theincreasein saleshighcontract
lensunit
demandto remain
unchanged
going
forward,givenofthevalue-addedlenses. of nearsightedness among the younger generation,
increasing
percentage
and the rising age of contact lens users due to the growing prevalence of
By sales channel, sales through the contact lens specialty store channel—
multifocal contact lenses. Furthermore, market expansion—albeit slight—
which accounts for the largest share of total value—are expected tois expected to continue going forward, due to such factors as the rise incontinue to grow steadily, driven by ongoing share expansion.
the average unit sales price stemming from the increase in sales of highvalue-added lenses.
By sales channel, sales through the contact lens specialty store channel—
which accounts for the largest share of total value—are expected tocontinue to grow steadily, driven by ongoing share expansion.
HOYA INTEGRATED REPORT 2021

HOYA Position and Market Share83

Copyright ©2021 HOYA GROUPHOYA Market Shareat Contact Lens Specialty Stores[HOYA estimate on a value basis]

INTEGRATED REPORT 2021

HOYA Market Shareat Contact Lens Specialty Stores[HOYA estimate on a value basis]

HOYA Position and Market ShareHOYA holds the top share in the retail channel for sales made through brick-and-mortar stores.
On top of sales growth at existing stores based on, among others, the promotion of high value-added
products, we are working to expand sales by opening new stores, including M&A. We also provide an online
sales service in the form of “Hoshii Toki Bin” (meaning on-demand delivery) to adapt to Internet shopping,which has been expanding in recent years. The service has been used by many people especially during the
COVID-19 pandemic.
Sales per Customer (Presented as an index with Mar. 2015as 100)

Number of Eyecity Stores in Japan

HOYA Outlook
Going forward, HOYA will seek to achieve ongoing sales growth at a rate of around 5% through the growthof sales at existing stores and the opening of new stores, including M&A.
For new stores, HOYA will conduct detailed analyses of an area’s contact lens-wearing population, market
growth rate, and competitive situation, and will establish stores mainly in city centers, regional cities, andlarge shop ping centers. We will also strive to increase efficiency by relocating stores within the same
marketingareatargeting
as appropriate.
addition,
westoreswill work
accelerate
growthby actively
exploiting M&A
opportunities
contact In
lens
specialty
thattohave
a strong
positionin their respective
local
opportunities
targetingcontactlens
specialty
storesthat
haveastrongpositionin
theirrespective
local
markets.
markets.

Medical
Medical(Information on HOYA’s products may be found in the “Business Domains” section of its website. Please(Information
on HOYA’s
products
may be found in the “Business Domains” section of its website. Pleaserefer
to this section
for further
information.)refer to this section for further information.)

Medical Endoscopes
Medical Endoscopes

Business Overview
Business Overview
In this field, HOYA conducts research and development, manufacturing,
In thisfield,
conducts
researchdevelopment,
and
sales
ofHOYA
medicalendoscopes
usedandin diagnosis
and manufacturing,treatments ofand sales associatedof medical endoscopes
diagnosis
treatmentstract,ofdisorderswith the ear,used
nose,inandthroat, andthe respiratory
disordersassociatedwith the ear, nose, and throat, the respiratory tract,andthe digestivesystem.
and the digestive system.
The endoscope field comprises scopes and processors.
The endoscope field comprises scopes and processors.
HOYA INTEGRATED REPORT 2021
84
Supply Chain

Copyright ©2021 HOYA GROUP

and the digestive system.
The endoscope field comprises scopes and processors.
INTEGRATED REPORT 2021

Supply Chain

Sales by Region (FY2020)

Sales by Region
By geographical region, overseas sales account for a large portion of total
sales.
Market Conditions
Medical expenses are increasing worldwide in line with the aging ofsociety.
To keep medical expenses in check, governments in countries across theglobe are promoting the early detection of disease and minimally invasive
medical procedures.
In particular, needs for the latter are increasing as part of the trend of
reducing invasive medical treatment. As a result, demand for endoscopes
is increasing as products to satisfy these needs.
The rate of growth is steady in the markets of developed countries andregions—Japan, the U.S., Europe, and others. However, in Asia, which is ata stage where endoscopes are becoming more prevalent, the growth ratecontinues to be high.
In the fiscal 2020, the impact of COVID-19 brought about changes in thebusiness environment surrounding hospitals, resulting in the suppressionof investments. However, in the medium to long term, we expect the global
market to continue growing at a rate of around 5%. (HOYA estimate)
Mainly in North America, customer transactions are increasing through a
joint purchasing organization, and building a sales system that responds
to this kind of change can lead to sales growt h.
In relation to products, our first disposable bronchoscope "PENTAX
Medical ONE Pulmo" obtained CE mark certification in Europe in May
2021. Although the presence of disposable endoscopes is not yet strong
enough to replace conventional endoscopes at this stage, their presence is
expected to grow in the medium to long term, so this is regarded as a

PENTAX Medical ONE Pulmo

stepping stone for us.

Market Share (FY2020)HOYA Position and Market ShareWith its strengths lying in high image quality, ultrasonic endoscopes andsmall-diameter endoscopes that strike a balance between image quality,
exterior diameter, and channel size, HOYA is the second largest group in
the industry.
HOYA INTEGRATED REPORT 2021

HOYA Outlook

85

Copyright ©2021 HOYA GROUP

enough to replace conventional endoscopes at this stage, their presence is
expected to grow in the medium to long term, so this is regarded as a

PENTAX Medical ONE Pulmo

stepping stone for us.
INTEGRATED REPORT 2021

Market Share (FY2020)HOYA Position and Market ShareWith its strengths lying in high image quality, ultrasonic endoscopes andsmall-diameter endoscopes that strike a balance between image quality,
exterior diameter, and channel size, HOYA is the second largest group in
the industry.
HOYA Outlook
HOYA continues to secure stable earnings in Europe, which accounts forabout 50% of total sales, and strives to achieve growth by boosting sales
activities in APAC and the Americas.

[HOYA estimate on a value basis]

While steadily engaging in initiatives targeted at products for
gastrointestinal devices, the main battlefield in the flexible endoscopemarket, we will also seek product differentiation by further developing
treatment instruments used in combination with endoscopes as well as
disposable endoscopes for areas other than bronchial tubes.
In May 2021, we entered into an agreement with Jiangsu Vedkang Medical Science and Technology Co., Ltd(Vedkang) in China to establish a joint venture company to develop and manufacture treatment
instruments for endoscopes. The new company will supply single-use treatment instruments forendoscopes developed and manufactured by Vedkang to markets worldwide through PENTAX Medical'ssales networks.

Intraocular Lenses for Cataract Surgery
Business Overview
In this field, we perform research and development, manufacturing, and sales of intraocular lenses (IOLs)
for cataract surgeries and ophthalmic medical devices.
With nearly 35 years of experience in designing and producing IOLs, HOYA
Surgical Optics’ mission is to improve vision and quality of life for millions
of people suffering from cataract.
Cataract is a condition that becomes more common as we age and is thelargest cause of vision loss in people around the world. A cataract istreatable with surgery and it is one of the most performed surgicalprocedures in the world. A cataract surgery replaces the natural lens thathas developed the cataract with a new clear intraocular lens (IOL).
The rich HOYA herit age and expertise in developing optical products andtechnologies coupled with the wealth of knowledge that we haveaccumulated in developing intraocular lenses and injectors makes us theprovider of the world’s most trusted fully pre-loaded IOLs* and allowed us
to gain market leadership in the fully pre-loaded IOL category worldwide.
* In a pre-loaded injector, the intraocular lens is pre-installed in the injector,
supporting surgeons to perform safer and more reliable surgery.

Supply Chain

HOYA INTEGRATED REPORT 2021

86

Copyright ©2021 HOYA GROUP

Vivinex™

to gain market leadership in the fully pre-loaded IOL category worldwide.
* In a pre-loaded injector, the intraocular lens is pre-installed in the injector,
supporting surgeons to perform safer and more reliable surgery.
INTEGRATED REPORT 2021

Supply Chain

Sales by Region
By region, sales in Japan account for about half of total sales.

Sales Composition of HOYA
SurgicalOptics by Region (FY2020)

Market Conditions
In fiscal 2020, the number of cataract surgeries decreased due to theimpact of COVID-19, resulting in a decline in revenue for this business.
However, as the spread of COVID-19 subsides, surgeries that have been
postponed will be performed and the business is expected to return to its
growth scenario of pre-COVID-19.
The ophthalmology ind ustry remains attractive, maintaining a growth rateof about 3%. The aging population, developing medical infrastructure in
emerging markets, and increasing access to healthcare and advanced
medical technologies are the main drivers of this growth. Growth in highend products—such as extended depth of focus and multi-focal IOLs—are

Market Share (FY2020)

expected to driver further overall expansion in the market.
HOYA Position and Market Share
Driven by t he flagship brand, Vivinex™, sales continue to grow at a pacethat is above the market. Vivinex™ combines an IOL material which offers
unprecedented clarity of vision with multiSert™, our proprietary 4-in-1
injector, which is designed to provide outstanding IOL delivery
consistency.
HOYA is steadily increasing its market share and currently holds the No. 3
place in global terms.

[HOYA estimate on a value basis]

HOYA Outlook
We have further expanded our portfolio with the addition of a family of Trifocal IOLs. This has allowed us toenter the highly profitable segment of presbyopia correcting IOL market. HOYA offers a comprehensive
solution to cover any customer need and expectation in the field of cataract surgery.
Furthermore, we will expand customer reach by bolstering the sales workforce in regions in which wealready have sales bases HOYA
and entering
into new regions one
by one, whether directly or indirectly
INTEGRATED REPORT 2021
87 Copyright ©2021 HOYA GROUP(collaboration with sales agents), in pursuit of higher sales.

[HOYA estimate on a value basis]

INTEGRATED REPORT 2021

HOYA Outlook
We have further expanded our portfolio with the addition of a family of Trifocal IOLs. This has allowed us toenter the highly profitable segment of presbyopia correcting IOL market. HOYA offers a comprehensive
solution to cover any customer need and expectation in the field of cataract surgery.
Furthermore, we will expand customer reach by bolstering the sales workforce in regions in which wealready have sales bases and entering into new regions one by one, whether directly or indirectly(collaboration with sales agents), in pursuit of higher sales.
In China, where the market is expected to expand in the future, we established a joint venture company with
our existing partner and distribution agent GeMax in May 2020, to further increase sales by steadily
absorbing demand in China.
We will also co ntinue to pursue synergies with Fritz Ruck (Germany) and Mid Labs (U.S.), which wereacquired in 2019 and produce instruments used in cataract surgery, etc.

Life Care Segment

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

88

Copyright ©2021 HOYA GROUP

Information Technology
Segment

INTEGRATED REPORT 2021

Information Technology Segment

Impact of COVID-19
There has been no significant impact on demand overall, although the intensity of the impact has varied
from business to business.
Even after the end of the COVID-19 pandemic, the increase in demand for mask blanks forsemiconductors and substrates for hard disk drives (HDDs) is expected to continue along with thecontinuation of Work From Home (WFH), homeschooling, etc. to a certain extent.
Customer demandCurrent status

Future prospect

Changes in the market structure due
to COVID-19

Mask blanks
continue toperform well, as
there has beenno impact on
EUV research
Mask blanks forandsemiconductors
development
activities—thedriving force
behind thedemand formask blanks.

Strong growth willcontinue due to brisk EUV
research anddevelopment activities.

There has been no change in themarket structure due to COVID-19.
Semiconductor manufacturing sites are
expected to undergo geographic
diversification due to friction between
the U.S. and China and the global
shortage of semiconductors.

As panelmanufacturers
have focused
their efforts on
mass production
activities in
response torising panel
prices, demandfor photomasks
for research anddevelopment
purposes has
fallen.

Research anddevelopment demand is
expected to recover alongwith the normalization of
the supply and demand
relationship and the priceof panels.

None in particular

Photomasks for
FPD/LSI

Substrates for
HDDs

Demand for 3.5inch substrates
for data centers

Momentum for strong
growth will continue.

HOYA INTEGRATED REPORT 2021

89

None in particular

Copyright ©2021 HOYA GROUP

for photomasks
for research anddevelopment
purposes has
fallen.
Substrates for
HDDs

Imaging-related
products

Demand for 3.5inch substrates
for data centers
has increased
due to WFH,
homeschooling,etc.
Due to fewer
opportunities totake photos in
conjunction withrestrictions on
movement, etc.,
demand for
digital camerarelated items forcompact digital
cameras and forinterchangeable
lenses decreased
but is currently
on a recovery
trend.

relationship and the priceof panels.

INTEGRATED REPORT 2021

Momentum for strong
growth will continue.

The market is expected torecover along with theresumption of travel, etc.,
but the digital camera
market is not expected to
expand again due to thecontinuation of market
erosion by smartphone
cameras. The market of
products for security
cameras will continue togrow.

None in particular

Despite the short-term acceleration of
the contraction of the digital camera
market, there are no changes in themarket structure. On the other hand,
new applications are expanding, e.g.,security cameras are being used as ameasure to curb the spread of COVID19 infections.

Electronics(Information on HOYA’s products may be found in the “Business Domains” section of its website. Pleaserefer to this section for further information.)

Mask Blanks for Semiconductors
Business Overview
In this business, we perform research and development, manufacturing,and sales of mask blanks for semiconductors.
Critical in the semiconductor fabrication process, photomasks are themaster plates used to transfer a semiconductor’s intricate and complex
circuit pattern onto a semiconductor wafer, and mask blanks are the raw
material used for photomask manufacturing.
Because photomasks are created for each individual circuit pattern, mask
blanks are essential to new products developed by semiconductor
manufacturers, foundries, and other HOYA customers, and in the R&D
stage of new manufacturing technologies such as those of extreme
ultraviolet (EUV) lithography.

Supply Chain

HOYA INTEGRATED REPORT 2021

90

Copyright ©2021 HOYA GROUP

manufacturers, foundries, and other HOYA customers, and in the R&D
stage of new manufacturing technologies such as those of extreme
ultraviolet (EUV) lithography.
INTEGRATED REPORT 2021

Supply Chain

Note: In some cases, product goes via photomask manufacturer

Market Conditions
In 2020, the electronics market experienced an increase in demand forcomputers and data center-related equipment due to the launch of theMarket Share (Optical)(FY2020)

5G smartphone market and the increase in Work From Home (WFH)
and homeschooling opportunities because of the COVID-19 pandemic.
This led to an increase in memory and logic device demand, resulting in
5% gro wth of the semiconductor market overall in 2020. In 2021, thegrowth of the semiconductor market is expected to accelerate on theback of such factors as the recovery of demand for automobiles andother final products that had fallen in each country and the further
increase in sales of 5G smartphones.
Going forward, the growth of the market for mask blanks is expected
to continue, given that semiconduct or manufacturers and foundries
are briskly conducting research and development activities aimed at
the further miniaturization of electronic circuits using extreme
ultraviolet (EUV) lithography—a cutting-edge manufacturing
technology—and that customers' research and development demand[HOYA estimate on a value basis]

Market Share (EUV)(FY2020)is the key driving force for the demand for mask blanks.
HOYA Position and Market Share
We have maintained a large share of the market over the long term byleveraging our strength, that is, our ability to mass-produce highquality products in a stable manner.
Moreover, we have continued to conduct EUV blanks research fornearly 20 years, and have demonstrated a firm presence in this field
which has exceptionally high hurdles to clear for entry.
HOYA is enjoying an ever-growing presence as the only manufacturer[HOYA estimate on a value basis]that has rolled out both EUV and optical (existing non-EUV lithography
technology) products.
HOYA Outlook
Along with the advance of miniaturization in semiconductors, itappears that demand for mask blanks for EUV lithography willcontinue to be strong in the future.

Semiconductor Market and HOYA's Growth Rate
HOYA INTEGRATED REPORT 2021

91

Sales of HOYA Mask Blanks for EUV Lithography andNumber of EUV Scanners Installed (Volume)
Copyright ©2021 HOYA GROUP

Along with the advance of miniaturization in semiconductors, itappears that demand for mask blanks for EUV lithography willcontinue to be strong in the future.
INTEGRATED REPORT 2021

Semiconductor Market and HOYA's Growth Rate

Sales of HOYA Mask Blanks for EUV Lithography andNumber of EUV Scanners Installed (Volume)

Reference:
Reference: WSTS
WSTS
Reference: WSTS
Mask
Mask blank
blank sales
sales areare difficult
difficult toto accurately
accurately predict
predict due
due toto thethe dramatic
dramatic fluctuations
fluctuations thatthat occur
occur inin lineline with
withcustomers’
development
speeds,andalsobecause
they
are
not
consumables
and
are
not
necessarily
linkedcustomers’
speeds,and also because
theytoarenotconsumables
and arenotoccurnecessarily
linkedMask blank development
sales are difficult
to accurately
predict due
thedramatic
fluctuations
thatin line withtomovementsinindustry
as aa whole.
whole.
However,
in regards
regards totoproducts
forEUV
tomovements
in thethe semiconductor
semiconductorasHowever,inproducts
EUV
customers’
development
speeds, andindustry
also because
they arenot consumables
andare not fornecessarily
linkedapplications,thecumulative
numberofEUV
lithographymachines
installedisdeemedasoneofapplications,
number industryof EUV lithography
is todeemedas oneof thetheto movementsthe
in cumulative
the semiconductor
as a whole.machines
However, installed
in regards
products
for EUV
indicatorsofmarket.
indicators ofof growth
growthof thethe EUV
EUV
market.
applications,the cumulative
numberof EUV lithography machines installed is deemed as one of theindicators of growth of the EUV market.
In
In suchsuch anan environment,
environment, we
we expanded
expanded thethe manufacturing
manufacturing line
line forfor mask
mask blanks
blanks forfor EUVEUV lithographylithography andandlaunchedtheoperationofanew
manufacturing
line
in
a
phasedmannerin
2020.
Asdemandis
expectedlaunched
operation of
a expanded
new manufacturing
line in a phased
in 2020.
demandis expectedto
In such anthe
environment,
wethe manufacturing
line formannermask blanks
for AsEUVlithography
and toexpandfurther,
we areare also
also
re-expanding
the manufacturing
manufacturing
line mannerwith thetheinaim
aim
of launchinglaunchingits isoperation
into
expandfurther,
we
the
line
with
of
its
operation
launched
the operationof a re-expanding
new manufacturing
line in a phased
2020.
As demand
expectedin
2023.
2023.
expand further, we are also re-expanding the manufacturing line with the aim of launching its operation in
2023.

Photomasks
Photomasks forfor FPD
FPD
Photomasks
for FPD
Business Overview
Overview
Business
Business
Overview
HOYA
conducts
research andand development,
development, manufacturing,
manufacturing, andand sales
sales ofof
HOYA
conducts
research*1*1 such as LCD *2*2 and OLED *3*3.
photomasks
usedformanufacturing
FPDs
photomasks
usedfor manufacturing
FPDs manufacturing,such as LCD and
HOYA conducts
researchand development,
andOLEDsales of.
photomasks used for manufacturing FPDs *1 such as LCD *2 and OLED *3.
When manufacturing
manufacturing FPDs
FPDs forfor TVs,
TVs, smartphones,
smartphones, laptop
laptop computers,
computers, and
and
When
other
devices,
photomasks
for FPD
FPD
manufacturing
are usedused
as thethe mastermasterother
photomasksareasWhen devices,manufacturing
FPDs forTVs, manufacturingsmartphones, laptop
computers,
andplatesto transfer
transferthe circuit
circuitfor
pattern
onto thethe substrate.
substrate.
platestothepattern
ontoother devices,
photomasks
FPD manufacturing
are used as the master
platestransferthe circuit pattern onto the substrate.
*1 FPD:
FPD:toFlat
Panel Display
Display
*1
Flat
Panel
*2
LCD: Liquid
Crystal
Display*2
Crystal
Display*1 LCD:
FPD: Liquid
Flat Panel
Display*3
OLED:
Organic
Light-Emitting
Diode
*3
OLED:
Organic
Light-Emitting*2 LCD: Liquid Crystal Display Diode*3 OLED: Organic Light-Emitting Diode

Supply Chain
Chain
SupplySupply Chain

HOYA INTEGRATED REPORT 2021

92

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

HOYA sources the substrate from raw materials manufacturers, and on that substrate performs polishing,deposition, and resist applications (blanks manufacturing). When the manufacture of the blanks iscompleted, HOYA conducts circuit pattern drawing, developing, etching, and resist stripping and cleaning,and delivers it to panel manufacturers (photomask manufacturing).
Sales Composition by Application
The ratio of sales by application is stated as follows. The end-product

Sales Composition by Application(FY2020)

market for smartphone applications continues to grow, accounting forthe largest proportion.
Market Conditions
In the fiscal year ended March 31, 2021 (fiscal 2020), panel prices rosedue to the increase in display demand arising from the COVID-19
pandemic. As panel manufacturers focused their efforts on massproduction activities, demand of research and development activities
for photomasks decreased. As a result, the FPD photomask market
shrank.
Going forward, the market is expected to grow due to such factors as the recovery in panel manufacturers'
research and development demand in line with the normalization of the supply and demand relationshipand the price of panels, as well as the increase in demand for FPD photomasks for small- and medium-sized
OLEDs used in smartphones, etc.
Market Share (FY2020)HOYA Position and Market ShareHOYA possesses expertise in high-precision products, and ho lds the
top-class market share.
HOYA Outlook
We will strive for steady business growth focusing on high-precision
Gen. 6 products where there are future prospects for growth and on
the Chinese market in term of geographic region.

[HOYA estimate on a value basis]

Panel Generations
FPD (LCD, OLED, etc.) manufacturing lines are categorized by generation, which corresponds to motherglass size. The size of mother glass has become progressively larger year by year not only because TV
screens have become bigger, but also for the purpose of enhancing productivity by increasing the numberof panel configurations per sheet. Growth is ex pected to continue going forward also with respect to smalland medium-sized panels centering on Gen. 6, in which HOYA has an edge, driven mainly by demand for
OLEDs for smartphones.

HOYA INTEGRATED REPORT 2021

93

Copyright ©2021 HOYA GROUPINTEGRATED REPORT 2021

Glass Substrates for HDDs
Business Overview
In this area, HOYA conducts research and development, manufacturing,and sales of glass substrates for hard disk drives (HDDs). HDDs are used
as recording media in laptop computers and servers.
Since HOYA’s full-fledged entry into the market of 3.5-inch substrates fordata center servers in 2017, the business has continued to undergo highgrowth to the extent that it accounted for at least half of the sales of thebusiness segment in terms of amount in fiscal 2020.

Supply Chain

From raw materials manufacturers, HOYA sources substrate raw materials, which we process in ways suchas making it into a disc shape, enhancing its shock resistance, and polishing. After processing, we deliver
this substrate to the media manufacturer where magnetic film is applied, among other film-forming
processes, and it undergoes burnishing (final polishing) and other treatments before being ship ped. In harddisk manufacturing, the HDD manufacturer assembles the hard disk, head, and other components, tests thecompleted product, and then ships.
Note: Hard disks may also be manufactured by the HDD manufacturer.
Sales Composition by Application
The sales composition ratio of our 2.5-inch substrates, by application,is as the right figure.
HOYA INTEGRATED REPORT 2021

94

Copyright ©2021 HOYA GROUP

2.5-Inch Substrates Sales
Composition
by Application (FY2020)

disk manufacturing, the HDD manufacturer assembles the hard disk, head, and other components, tests thecompleted product, and then ships.
Note: Hard disks may also be manufactured by the HDD manufacturer.
INTEGRATED REPORT 2021

Sales Composition by Application
The sales composition ratio of our 2.5-inch substrates, by application,is as the right figure.

2.5-Inch Substrates Sales
Composition
by Application (FY2020)

HOYA’s 3.5-inch substrates are used in HDDs for near line (NL) servers
used for backup and other purposes at data centers.
Sales have been growing steadily and accounted for approximately
60% of sales of the business segment in the fourth quarter of fiscal
2020.

Market Conditions
In the fields of laptop computers, external HDDs, mission-critical servers, and games, the market for 2.5inch HDDs is shrinking, as they are being replaced by solid state drives (SSDs), which have faster data
read/write speeds.
On the other hand, in the 3.5-inch HDD market, NL servers, having a comparatively low access frequency
with backup applications, predominantly use HDDs due to their cost adva ntages over SSDs. Although
investments in facilities associated with data centers by large-scale cloud service vendors fluctuatesignificantly even in the short term, a significant market expansion is expected in the long term as data
generation volumes expand throughout the world.
HOYA Position and Market Share
Currently, all 2.5-inch substrates are made of glass. As the sole glass

3.5-Inch Substrate Used for Near Line
Server Market Share (FY2020)

substrate manufacturer in the market, HOYA support s the HDD
industry behind the scenes.
In the 3.5-inch substrate segment, products made of aluminum used
to completely dominate the market based on their price advantage.
However, our glass substrate products are now being adopted for
HDDs as they are highly rigid and can increase the number ofmounting disks by thinning the disks, and their market share in volume
terms has risen to 40%. As the storage ca pacity of HDDs expands, ourmarket share is also expected to expand.
[HOYA estimate on a value basis]

HOYA Outlook
Sales of 2.5-inch substrate products are expected to decline on an ongoing basis, as the replacement of
HDDs with SSDs in computers and mission-critical servers continues into the future.
Sales of 3.5-inch substrates are expected growth in line with the continued expansion of the market. In themedium term, growth is expected to accelerate through the acquisition of new customers; we will switch
existing manufacturing facilities and utilize the new plant in Laos to meet the increase in demand.
Potential for Glass Substrates in the 3.5-Inch Market
HOYA INTEGRATED REPORT 2021
95 Copyright ©2021 HOYA GROUP
In response to the expansion of data volume and the storage volume generated worldwide, HDD
manufacturers are continually introducing in the market new products with higher data capacity per HDD.

Sales of 3.5-inch substrates are expected growth in line with the continued expansion of the market. In themedium term, growth is expected to accelerate through the acquisition of new customer s; we will switch
existing manufacturing facilities and utilize the new plant in Laos to meet the increase in demand.
INTEGRATED REPORT 2021

Potential for Glass Substrates in the 3.5-Inch Market
In response to the expansion of data volume and the storage volume generated worldwide, HDD
The
increase in datacapacity per
HDD has been
increasing
densityor areathemanufacturers
are continually
introducing
in therealized
market bynewproductsthe
withrecording
higher datacapacity
perofHDD.
disk,
but, at present,
the development
technologies
designed
to improverecordingdensity
densityor
is areastagnating,
The increase
in data capacity
per HDDofhasbeen realized
by increasing
the recordingof theandofthe
thedevelopment
recording area
key todesigned
capacitytoexpansion.
disk,thebut,expansion
at present,of remains
technologies
improve recording density is stagnating,and the expansion of the recording area remains key to capacity expansion.
In the 3.5-inch market, the disk material is now mainly aluminum alloy. However, since a further increase inarea
be realized
by theincreasing
the number
mounting
disks alloy.
by thinning
the since
disks,aitfurther
is becoming
In thecan
3.5-inchmarket,disk material
is nowof
mainlyaluminum
However,increase innecessaryuse glassof aluminumalloy
as the former
higher rigidity
and itallowsfor morearea
can betorealized
by insteadincreasing
the numberof mounting
diskshasby thinningthe disks,
is becoming
point whereof disks
mountedin an
HDDreaches10thinning. Morespecifically,
afterofthenecessary
to useglass instead
aluminumalloytheas numberthe former
has higher
rigidity
andallowsfor more(substrate
thickness:
0.5 mm),substrates(rigidity
glass andaluminumalloy 10in t erms
afterglass
the pointwherearetherequired
number ofdisks ofmountedin an
HDD reaches
thinning. Morespecifically,of Young’s thickness:
modulus are
GPaglassand 71
GPa, respectively).
(substrate
0.595
mm),
substrates
are required (rigidity of glass and aluminum alloy in termsof Young’s modulus are 95 GPa and 71 GPa, respectively).
In the event that HAMR (Heat-Assisted Magnetic Recording) is realized and commercialized, glass
substrates,
have excellent
heat-resistancewould andbe theonly option becauseIn
the event whichthat HAMR(Heat-Assisted
Magnetic characteristics,
Recording) is realizedcommercialized,
glass HAMR
would
entailwhichheat atthe excellent
production
process of magnetic
film (the would
heat resistanttemperatureof glass
is 691
substrates,
haveheat-resistancecharacteristics,
be the only
option because
HAMR
degrees
Celsius,that of a luminumis 290 degrees
Celsius).
would entail
heatwhereas
at the production
processalloyof magnetic
film (theheat resistant temperature of glass is 691
degrees Celsius, whereas that of aluminum alloy is 290 degrees Celsius).

Imaging-related Products
Imaging-related Products(Information on HOYA’s products may be found in the “Business Domains” section of its website. Pleaserefer
to this section
for further
information.)(Information
on HOYA’s
products
may be found in the “Business Domains” section of its website. Pleaserefer to this section for further information.)

Imaging-related Products (Including optical glass, optical lenses, camera lens units,
Imaging-related
Products (Including optical glass, optical lenses, camera lens units,
and lasers)
andlasers)Business
Overview
In Businessthis area, Overview
we conduct research and development, manufacturing, andsales
opticalforresearcha varietyandof cameras,
as wellas for opticalandglass
In thisofarea,
we lenses
conduct
development,
manufacturing,materials.
sales
of optical lenses for a variety of cameras, as well as for optical glassmaterials.

Supply Chain
Supply Chain

HOYA sources materials from optical glass material manufacturers, conducts compound and solution
treatments,
manufactures
lensopticalmaterials
andlens products,
and delivers
to lens
and camera
HOYA sourcesmaterials fromglass
material
manufacturers,
conducts
compoundand solution
manufacturers.
treatments, manufactures lens materials and lens products, and delivers to lens and camera
manufacturers.

HOYA INTEGRATED REPORT 2021

Sales Composition by Application96

Copyright ©2021 HOYA GROUP

Sales Composition by Application
Sales Composition by Application

HOYA sources materials from optical glass material manufacturers, conducts compound and solution
treatments, manufactures lens materials and lens products, and delivers to lens and camera
manufacturers.
INTEGRATED REPORT 2021

Sales Composition by Application
The ratio of sales by application is as the right figure.
The ratio of sales by application is as the right figure.
Digital camera-related items for compact digital cameras,
Digital camera-related items for compact digital cameras,interchangeable lenses, etc. that had previously made up the majority
interchangeable lenses, etc. that had previously made up the majorityof sales are trending down, and now account for approximately 30% ofof sales are trending down, and now account for approximately 30% of
total sales.
total sales.

Sales Composition by Application(FY2020)(FY2020)

As for products for security cameras, which is a new area of
As for products for security cameras, which is a new area of
application, sales increased to a scale equivalent to those of
application, sales increased to a scale equivalent to those ofinterchangeable lenses on the back of growing demand for asphericalinterchangeable lenses on the back of growing demand for asphericalglass lenses due to the increasing adoption of higher-pixel imaging.
glass lenses due to the increasing adoption of higher-pixel imaging.
Market Conditions
Market Conditions
Despite trending toward improvement, demand for interchangeable
Despite trending toward improvement, demand for interchangeable
lenses and compact digital cameras substantially decreased in thelenses and compact digital cameras substantially decreased in thefirst half of fiscal 2020, due to fewer opportunities to take photos as afirst half of fiscal 2020, due to fewer opportunities to take photos as aresult of the impact of COVID-19. Likewise, demand for security
result of the impact of COVID-19. Likewise, demand for security
cameras was impa cted by COVID-19 in the first half of fiscal 2020, but
cameras was impa
impacted
cted by COVID-19 in the first half of fiscal 2020, but
is undergoing rapid recovery; in our view, the security camera market
is undergoing rapid recovery; in our view, the security camera market
will become a growth market in the medium term.
will become a growth market in the medium term.

HOYA Position and Market ShareHOYA Position and Market Share
From research and development of optical glass composition to
From research and development of optical glass composition to
manufacturing of finished products of lenses, HOYA takes a consistent
manufacturing of finished products of lenses, HOYA takes a consistent
approach to its activities while building a structure that makes
approach to its activities while building a structure that makes
possible the mass production of an array of products.
possible the mass production of an array of products.

Share of Aspherical GMO Lenses
Share of Aspherical GMO Lenses(Digital Camera-Related) (FY2020)(Digital Camera-Related) (FY2020)HOYA maintains a high market share with its exceptional skills in
HOYA maintains a high market share with its exceptional skills in
aspherical glass molded (GMO) lenses.
aspherical glass molded (GMO) lenses.
GMOs are formed by directly pressing optical glass that has been
GMOs are formed by directly pressing optical glass that has been
subjected to high temperatures to make it malleable. These are opticalsubjected to high temperatures to make it malleable. These are opticallens products that require no polishing, and possess an excellent
lens products that require no polishing, and possess an excellent
ability to correct distortions. Enabling a high angle design, the number
ability to correct distortions. Enabling a high angle design, the numberof lenses used in optical systems can be reduced, and this contributesof lenses used in optical systems can be reduced, and this contributes
to compact, lightweight, and highly functional end-product cameras.
to compact, lightweight, and highly functional end-product cameras.

[HOYA estimate on a value basis][HOYA estimate on a value basis]

HOYA Outlook
HOYA Outlook
As for products for digital cameras, the fall in sales of products for compact digital cameras andAs for products for digital cameras, the fall in sales of products for compact digital cameras andinterchangeable-lens cameras is expected to continue, as higher-quality/multi-lens imaging is increasinglyinterchangeable-lens cameras is expected to continue, as higher-quality/multi-lens imaging is increasingly
realized by smartphone cameras.
realized by smartphone cameras.
On the other hand, products for security cameras, which are new applications, are expected to growOn the other hand, products for security cameras, which are new applications, are expected to growsteadily due to the increasing adoption of higher-pixel imaging and the increasing number of security
steadily due to the increasing adoption of higher-pixel imaging and the increasing number of security
cameras installed.
cameras installed.
On top of this, we are enhancing our sales activities for the adoption of HOYA products in advanced driver
On top of this, we are enhancing our sales activities for the adoption of HOYA products in advanced driverassistance systems (ADASs), facial authentication for mobile devices and Augmented Reality (AR)assistance systems (ADASs), facial authentication for mobile devices and Augmented Reality (AR)applications. In particular, their potential in the market of Copyrightcar-mounted
camerasfor image recognition in©2021 HOYAcameras
GROUP
97of car-mounted
applications. In particular,HOYA
theirINTEGRATED
potentialREPORTin the2021
marketfor image recognition inHOYA Outlook
As for products for digital cameras, the fall in sales of products for compact digital cameras andinterchangeable-lens cameras is expected to continue, as higher-quality/multi-lens imaging is increasingly
realized by smartphone cameras.

INTEGRATED REPORT 2021

On the other hand, products for security cameras, which are new applications, are expected to growsteadily due to the increasing adoption of higher-pixel imaging and the increasing number of security
cameras installed.
On top of this, we are enhancing our sales activities for the adoption of HOYA products in advanced driverassistance systems (ADASs), facial authentication for mobile devices and Augmented Reality (AR)applications. In particular, their potential in the market of car-mounted cameras for image recognition in
ADASs looks promising; we expect them to make a significant contribution to our business results when thepractical application of this technology goes into full swing in a few years’ time.

Life Care Segment

Information Technology
Segment

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

98

Copyright ©2021 HOYA GROUP

Financial Review
Financial Review

INTEGRATED REPORT 2021

Scope of consolidation
Scopeof consolidation
As of March
31, 2021, the HOYA Group consisted of HOYA CORPORATION, 143 consolidated subsidiaries (7of which are domestic and 136 overseas) and 18 affiliates (5 of which are domestic and the other 13
As of March 31, 2021, the HOYA Group consisted of HOYA CORPORATION, 143 consolidated subsidiaries (7overseas).
of which are domestic and 136 overseas) and 18 affiliates (5 of which are domestic and the other 13
overseas).
The HOYA Group has adopted a business management structure where the Life Care and Information
Technology business segments control subsidiaries around th e world based on their respective
The HOYA Group has adopted a business management structure where the Life Care and Information
responsibilities. Regional headquarters in the Americas, Europe and Asia support business operations by
Technology business segments control subsidiaries around th e world based on their respective
strengthening relationships with countries and areas in the respective regions, such as by providing legal
responsibilities. Regional headquarters in the Americas, Europe and Asia support business operations bysupport and conducting internal audits. The HOYA Group has its Financial Head Quarters (FHQ) at its
strengthening relationships with countries and areas in the respective regions, such as by providing legal
Europe Regional Headquarters (Netherlands).
support and conducting internal audits. The HOYA Group has its Financial Head Quarters (FHQ) at its
Europe Regional Headquarters (Netherlands).

Adoption of the International Financial Reporting Standards
Adoptionof thethefiscal
International
Financial
ReportingStandards
Beginning withyear ended March
31, 2011, the HOYA
Group prepares its consolidated financial
statements and other documents in compliance with the International Financial Reporting Standards
Beginning with the fiscal year ended March 31, 2011 , the HOYA Group prepares its consolidated financial(IFRS) pursuant to paragraph (1), Article 120 of the Ordinance on Company Accounting. With respect tostatements and other documents in compliance with the International Financial Reporting Standards
reportable segments presented in the overview of operat ion by business category, the HOYA Group divides(IFRS) pursuant to paragraph (1), Article 120 of the Ordinance on Company Accounting. With respect toits business into three reportable segments, based on IFRS. These segments are Life Care, Information
reportable segments presented in the overview of operat ion by business category, the HOYA Group divides
Technology, and Other Businesses.
its business into three reportable segments, based on IFRS. These segments are Life Care, Information
Technology,
Other deals
Businesses.
The
Life Careandsegmentin health care related products such as eyeglass lenses and contact lenses, aswell as medical related products such as intraocular lenses and medical endoscopes. The Information
The Life Care segment deals in health care related products such as eyeglass lenses and contact lenses, asTechnology segment handles electronics related products used for the production of semiconductors, flat
well as medical related products such as intraocular lenses and medical endoscopes. The Information
panel displays (FPDs) and hard disk drives (HDDs), and imaging related products such as digital camera
Technology segment handles electronics related products used for the production of semiconductors, flat
lenses. The Other Businesses segment provides mainly speech synthesis software and information system
panel displays (FPDs) and hard disk drives (HDDs), and imaging related products such as digital camera
services.
lenses. The Other Businesses segment provides mainly speech synthesis software and information systemservices.

Review of Performance in the Fiscal Year Ended March 31, 2021 (Fiscal 2020)
Reviewof Performancein yearthe Fiscal
Year Ended March 31, 2021Sales(Fiscal 2020)
Sales for the
consolidated fiscal
under review
increased by
to 125,221
millionyen.decrease
The profit
amounted
to 9.3%547,921
million yen,a 5.0%
Sales for the consolidated fiscal year under review
beforeratio was 29.1%, an increase of 3.6
year
ontax
year.
amounted to 547,921 million yen, a 5.0% decrease
percentage points from 25.5% in the preceding
year onyear. income tax increased compared to theProfitbeforeconsolidated
fiscal year.

Sales

preceding consolidated fiscal year by 8.1% toProfit before income tax increased compared to theSales in the
Lifeyen,
Careandsegment
159,218
millionprofit decreased
for the yearby 8.9%
preceding consolidated fiscal year by 8.1% tocomparedtotheprecedingconsolidated
year
increased by 9.3% to 125,221 million yen.fiscal
The profit
159,218 million yen, and profit for the year
to 341,801
millionyen.
Segment
profit increased
beforetax ratio
was
29.1%,
an increaseof 3.6 by
2.1% to 63,544
millionpercentage
pointsfromyen.
25.5% in the preceding
consolidated fiscal year.
Sales of eyeglass lenses are recovering, despite
nationalandLiferegional
variation.decreased
However, by
sales
Sales
in theCare segment
8.9%
decreasedovertheconsolidated
fiscalyear
due
tocompared to the preceding consolidated fiscal year

the341,801
impact on
the Company’s
sales
causedby thebytomillionyen. Segment
profitincreased
HOYA INTEGRATED REPORT 2021
99
restrictions
on economic
activity implemented in
2.1%
to 63,544
million yen.
various countries with the aim of curbing the spread

Copyright ©2021 HOYA GROUP

national and regional variation. However, sales
percentage points from 25.5% in the preceding
decreased over the consolidated fiscal year due toconsolidated fiscal year.
the impact on the Company’s sales caused by the
restrictions
activity
implemented
inSales
in the on
Lifeeconomic
Care segment
decreasedby 8.9%INTEGRATED REPORT 2021

various countries
with the aimof curbingfiscal
the spreadcomparedto the preceding
consolidated
yearof 341,801
COVID-19million
duringyen.
theSegment
first half profitof theincreased
fiscal year,bytosuch astemporaryclosures2.1%
to 63,544
millionyen. of eyeglass stores,

Pretax profit, Net profit attributable to owners of
the company

which are our customers, and restrictions on going
Sales of eyeglass lenses are recovering, despite
outside.
national and regional variation. However, sales
Salesyear,of contactlensesare recovering,
buteyeglass
sales
decreasedover theconsolidated
fiscal ofyear
due tofiscalsuchastemporaryclosuresdecreased
due
toour
the
temporaryclosuresandtheimpactonare
theCompany’ssales
by thestores,which
customers,
andcaused
restrictions
reducedhours implemented
at our in
restrictions
on economic
activity implementedongoing businessoutside.
“Eyecity”countries
retail stores
COVID-19.
variouswithduethetoaim
of curbing the spreadSalesof contactlensessalesof COVID-19
duringthearefirstrecovering,half of thebut
fiscalyear,
Sales of medical
endoscopes
areclosures
recovering
overall,decreased
due
to
the
temporaryandsuch as temporary closures of eyeglass stores,
but sales
decreased
as aimplemented
result of COVID-19
thereducedbusinesshours
at ouroningoing
which areour customers,
and restrictions
domesticretailand overseas
due to a significant“Eyecity”
stores duemarkets
to COVID-19.
outside.
impact on our sales activities, limited investment
Salesofmedicalendoscopes
areenvironment
recovering
overall,due tothe businessofSales
ofchanges
contactin
lensesare recovering,but sales

Pretax profit, Net profit attributable to owners of
the company

butsales decreasedasa result ofclosures
COVID-19in thehospitals
andfactors.
decreased
dueotherto thetemporaryanddomestic
and overseas
due toata ourreduced businesshoursmarkets
implemented
Salesofintraocularlensesforcataracts
significant
impacton ouractivities, arelimited“Eyecity” retailstoresduesalesto COVID-19.
recovering, dueparticularlyin theoverseas
market, butinvestment
to changes
in thebusinesssales decreased
over
the andconsolidated
fiscal overall,
year
Sales
of medical
endoscopes
are recovering
environmentof hospitals
otherfactors.
due salesto thedecreased
impact of as
COVID-19
the domestic
andbut
a result onof COVID-19
in theSalesofintraocularlensesforcataractsareoverseas markets
duringmarkets
the firstdue
quarterof thedomestic
and overseas
to a significant

recovering,particularly
innumberthe overseas
market, but
fiscal year
reducingof cataract
impacton oursales theactivities,
limitedinvestment
sales
decreasedoverconsolidated
fiscalyear
surgeries
being performed,
which
led todecreaseddue
tochangesin thethebusiness
environmentofdue
to forthetheimpactof COVID-19
sales
Company.
hospitals
andotherfactors. on the domestic andoverseas markets during the first quarter of thein theInformation
Technology
segment
Salesyearofintraocularlensesfor cataracts
arefiscalreducingthenumberof cataract

Profit Margins

Profit Margins

increasedbeing
byparticularly
2.2%
comparedtotherecovering,in theoverseasbutsurgeries
performed,
which
ledprecedingto market,
decreased
consolidated
fiscalyear
200,965 million
yen,
and
sales
decreased
over
theto
consolidated
fiscal
year
sales
for
the Company.
segment
increasedby 7.7%
milliondue
to theprofit
impactof COVID-19
on tothe94,905
domestic
and
Sales
in
the
Information
Technology
segmentyen.
overseas
markets during the first quarter of theincreasedby
2.2% comparedto theprecedingfiscal year reducing
the numberof cataract
Sales
of
mask
blanksforsemiconductors
increased
consolidated
fiscalyear to 200,965
millionyen, andsurgeries being
performed,
which led
to decreased
substantiallycomparedtotheprecedingsegment
profitincreased
by
7.7%
to
94,905
millionsales for the Company.
consolidated fiscal year as a result of our having
yen.

Profit Margins

Sales in the Information Technology segment
Salesof maskblanksfor semiconductors
increased
increasedby 2.2%comparedto the preceding
substantiallypreceding yen, andconsolidatedcomparedfiscal yearto
tothe
200,965
millionconsolidated
fiscalyear asbya resultof94,905
our having
segment profit
increased
7.7% tomillioncaptureddemandfor
activeR&D
andembarkingonyen.
mass production of leading-edge products
Sales of mask blanks for semiconductors increased
substantially compared to the preceding
consolidated fiscal year as a result of our having
captured demand for active R&D and embarking on
mass production of leading-edge products including
mask blanks for EUV (Extreme Ultraviolet)
lithography.
With regard to photomasks for FPD, rising prices in
the TV panel market price caused by people staying
home led to a trend in our customers prioritizing
mass-production activities.
AsINTEGRATED
a result, photomask
HOYA
REPORT 2021 100 Copyright ©2021 HOYA GROUP
demand for research and development decreased,
which caused lower sales.

lithography.
lithography.
mass-production activities. As a result, photomask
With regard
to photomasks
for FPD, rising
prices indemandfor researchand development
decreased,
With regard to photomasks for FPD, rising prices intheTV causedpanel market
price caused by people staying
whichlower sales.
the TV panel market price caused by people staying
INTEGRATED REPORT 2021
home led to a trend in our customers prioritizing
home
led toglassa trendin our customers
prioritizing
Regarding
substrates
for
hard
disks,
wemass-production activities. As a result, photomask
mass-production
activities.
As
a result,
photomask
achieved
a largeincrease
sales
of 3.5-inch
demand forresearch
and indevelopment
decreased,
demandfor whichresearchanddevelopment
decreased,
substrates,arepoisedfor substantial
growthwhichcausedlower
sales.
which
causedlower
sales.
going forward, due to continued demand for such
Regarding
substrates
for
hard applications
disks, wesubstratesglass
for usein nearline
serverat
Regarding glass substrates for hard disks, weachievedalarge
increase
in
sales
of
3.5-inchdata center end users. Sales of 2.5-inch substrates
achieved a large increase in sales of 3.5-inch
substrates,amid
whichpoised for shift
substantial
decreased
anare
accelerating
to SSDsgrowth(solidsubstrates, which are poised for substantial growth
going
forward,dueHDDs
to continued
demandsuch
state drives)from(hard disk
drives)for
and
lower
going forward, due to continued demand for such
substrates
for
use
in
nearlineserverapplications
atsales caused by factors such as supply chain
substrates for use in nearline server applications at
data
centercaused
end users.
Sales of 2.5-inch
substrates
disruption
by COVID-19
in the firstquarterdata center end users. Sales of 2.5-inch substrates
decreased
shiftsales
to SSDs(solidofthe fiscalamidyear.anAsacceleratinga result, overall
in thedecreased amid an accelerating shift to SSDs (solidstatedrives)from HDDs(harddisk drives)
and
lower
businesssegmentslightly
decreased
year onyear.
state drives) from HDDs (hard disk drives) and lower
sales caused by factors such as supply chainsales
causedtobylenses
factors
as supply
chain
With
regardforsuchcameras,smartphones
disruption
caused by COVID-19
in thefirst quarter
disruption
causedby
COVID-19
indigital
the first
quarter
continued
toerodeAs
thecompact
cameraof the fiscal
year.
a result,
overallsales
in theandofthe fiscal year.lens
As amarkets.
result, overall
sales
in theinterchangeable
Althoughbusinesssegment slightly
decreased
yearnow
on year.
businesssegmentslightly
decreased
year
on
year.
recovering, sales of lenses for cameras decreased

Efficiency

Efficiency
Efficiency

Withregardto lenses
for cameras,
smartphones
due toCOVID-19,
becauseof reduced
operation atWith regard to lenses for cameras, smartphones
continued
to
erode
the
compact
digitalcamera andcustomer production sites, temporary closuresofcontinued to erode the compact digital camera andinterchangeable
markets.
now ofretailstores, andlens
lowerdemandAlthough
for and sales
interchangeable lens markets. Although now
recovering,sales oflensesbyforcamerasdecreasedcamera productscausedfewer
opportunities
torecovering, sales of lenses for cameras decreased
dueto
COVID-19,
becauseofreducedoperationattake photos due to restrictions on going outside.
due to COVID-19, because of reduced operation atcustomer production sites, temporary closures ofcustomerproduction sites,
closuresbyof(Foron temporary
marketretailfurther
stores,informationand lower demandfor conditions
and sales ofretailstores,andreferlower
for ofandsales ofproduct,
pleaseto demandthe
Operations
cameraproducts
causedbyReview
fewer opportunities
tocameraproducts
causedbyfewer
opportunities
tosection.)take photos due to restrictions on going outside.
take photos due to restrictions on going outside.
(For further information on market conditions by(For further information on market conditions byproduct, please refer to the Review of Operations
product, please refer to the Review of Operations
section.)section.)Financial Position
Total assets at March 31, 2021 increased by 42,282

Total Assets, Equity Attributable to Owners of theCompany

million yen from the end of the preceding
consolidated
fiscal year to 853,290 million yen.
Financial Position
Financial PositionNon-current
increased
8,869 million
yen toTotal assets assets
at March
31, 2021byincreasedby 42,282
Total assets
at March
31,is2021
increasedby 42,282
298,705
millionyen.
Thisprimarilyduetomillion yen from the end of the preceding
millionyenoffromthe million
end of theincreases
12,655yen precedingin property,
plant
consolidated
fiscal year
853,290
millionyen.
andequipment–net,
andto
6,030
millionyen inlongconsolidated fiscal year to 853,290 million yen.
term financial assets despite decreases of 6,394
Non-current assets increased by 8,869 million yen to
millionyen inassets
goodwill,and 2,686
millionmillion
yen inyen to
Non-current
increasedby 8,869
298,705 million yen. This is primarily due tointangible
assets.
298,705
millionyen. This is primarily due toincreases of 12,655 million yen in property, plantincreases of 12,655 million yen in property, plantandequipment–net,
and 6,030
millionyen inlongCurrent
assets increased
by 33,413
millionyen
toTotal Assets, Equity Attributable to Owners of the
Total Assets, Equity Attributable to Owners of theCompany
Company

term
decreasesof 6,394
reachfinancial
554,584assets
million despiteyen. Thisis primarily
due tomillionyeningoodwill,and2,686
millionyen
inincreases of 16,915 million yen in cash and cash
intangible
assets.
equivalents,
13,911 million yen in trade and otherreceivables, and 2,593 million yen in other shortCurrent assets increased by 33,413 million yen toterm financial assets.
reach 554,584 million yen. This is primarily due toincreasesof increased
16,915 million
yen inmillion
cash and
Total equity
by 43,147
yencashtoequivalents,
13,911
million
yen
in
trade
and
other
672,412 million yen. This is primarily due toreceivables,
2,593
millionin other shortincreases of and34,216
millionyenyenin retained
earnings,
HOYA
INTEGRATEDREPORT 2021 101 Copyright ©2021 HOYA GROUP
term26,265
financialassets.
andmillionyen in accumulated othercomprehensive income despite an increase of
Total equity increased by 43,147 million yen toTotalequityincreasedbymillionTotal
equityincreasedby 43,147
43,147
million yen
yen toto15,597
millionyen in treasury
shares.
Ratio of Assets Attributable to Owners of theCurrent
assetsincreasedby
33,413
millionyen
to672,412
million
yen.
This
is
primarilydueto672,412 million yen. This is primarily due toCompany
EquityattributabletoownersCompany
reach554,584
millionyen. This
isthe
primarily
due toincreasesof 34,216
34,216
millionyenofininretainedearnings,
increasesofmillionyenretainedearnings,
increased
bymillion
42,959millionyen intocash
688,000
increasesof
16,915
millionyen
and million
cash
and
yen
in
other
and 26,265
26,265
millionyen
in accumulated
accumulated
other
INTEGRATED REPORT 2021
yen.
equivalents,
13,911
millionyen inand ofothercomprehensive
incomedespiteanincreasecomprehensive
incomedespiteantradeincreaseof
receivables,
and
2,593
million yen
in other short15,597 million
millionyen
in treasury
treasuryshares.
Ratio
15,597yeninshares.
Ratio ofof Assets
Assets Attributable
Attributable toto Owners
Owners ofof thetheLiabilities decreased
by 865 million
yen to 180,878
term financial assets.
Company
Company
millionyen.
EquityEquity attributable
attributable toto owners
owners ofof thethe Company
CompanyTotal
equityby 43,147
yenmillion
toincreasedbyincreased
42,959 million
millionyen totomillion
688,000
millionincreasedby
42,959yen
688,000
The ratio of
equityattributableto ownersof the672,412
million
yen.
This
is
primarily
due
to
yen.
yen.
Company to total assets at March 31, 2021
increases of 34,216 million yen in retained earnings,
increased decreasedby 1.1 percentage
points fromthe end of
Liabilities
bymilliontoLiabilities
decreasedbyin865
865
million yen
yen otherto 180,878
180,878
and 26,265
million yen
accumulatedtheprecedingconsolidated
fiscalyear
andreachedmillionyen.
million yen.
comprehensive
income despite an increase of
to 80.6%, which was 79.5% in the preceding
15,597
millionyen in treasury shares.
Ratio of Assets Attributable to Owners of the
The
ratio
to
The
ratio ofof equity
equityattributableto owners
owners ofof thetheconsolidated
fiscalattributable
year.
Company
Companytoat31, 2021
Company
to total
total assets
assets
at March
March
2021
Equityattributableto ownersof the31,
Company
increased byby 1.1 percentage
percentage points
points fromfrom thethe endend ofincreased
increased by 1.1
42,959 million yen
to 688,000
millionof
theprecedingconsolidated
fiscalyear
andreachedtheyen.preceding consolidated fiscal year and reachedtoto 80.6%,
80.6%, which
which was
was 79.5%
79.5% inin thethe preceding
preceding
Liabilities
decreasedby 865 million yen to 180,878
consolidated
fiscalconsolidated
fiscal year.
year.
million yen.
The ratio of equity attributable to owners of theCompany to total assets at March 31, 2021
increased by 1.1 percentage points from the end of

Cash
Flow consolidated fiscal year and reached
the preceding
to 80.6%, which was 79.5% in the preceding
Cash and cash equivalents at the end of the fiscal
consolidated fiscal year.
year under review increased by 16,915 million yen

Cash Flow(including the effect of changes in exchange rates
of
10,566
million yen) from the end of the previous
Cash
Flow
Cash
Flow

fiscal year to 334,897 million yen.
Cash
Cash andand cashcash equivalents
equivalents at
at thethe endend ofof thethe fiscal
fiscalNet
cash
providedbyoperatingactivities
decreased
year
under
review
increasedby
16,915
millionto151,812
million increased
yen.
year
under review
by 16,915 million yen
yenby
11,553
million
yen
from
the
previous
fiscalrates
year(includingtheeffectofchangesinexchange(including the effect of changes in exchange ratesThis
was attributable
thetheincrease
cash
mainlyof 10,566
10,566
million yen)yen) tofromend ofofinthethepreviousofmillionfromthe endpreviousdue
to profit
before taxmillionof 159,218 million yen (anfiscalfiscal year
year toto 334,897
334,897 million yen.
yen.
increase of 11,950 million yen in inflow from theNet
cashprovidedbyoperatingdecreased
previous
fiscalyear),
and amortizationNet
cash
providedby depreciation
operating activities
activities
decreased
Cash
Flow

Cash
Cash Flow
Flow

by
11,553
million
yen
from
the
fiscalyear
ofincreaseof 1,963
millionby 36,336
11,553 million
million yenyen (anfromthe previous
previous
fiscal
year
Cash
cash
equivalents
at theendof
of8,166
the fiscal
to151,812
million
yen.
yen
inand
inflow)
and
impairment
lossesCash Flowyear underreview
increasedby 16,915
millionyen (anincreaseof 7,866
millionmillion
yen in yen
This
was attributabletochanges
the increasein cash rates
mainly(includingtheeffectofinexchange
inflow), and on the other hand, the decrease in cashdue
to profit
beforetaxfromof 159,218
millionyen (anof
10,566yen)
endmillionof the previous
mainlyduemillion
to an increase
ofthe
9,788
yen inincrease
ofto
11,950
millionyenyen.
in inflow from thefiscal andyear
334,897
milliontrade
otheraccounts
receivable(a decrease ofprevious fiscal year), depreciation and amortization
13,975 million yen in inflow), a decrease of 6,352
Net36,336
cash providedby (anoperatingactivities
ofmillion yen
increaseof 1,963decreased
millionmillion yen in trade and other accounts payable (anby11,553
million
yen
from
the
previous
fiscalyen in inflow) and impairment losses of 8,166 year
increase of 11,504 million yen in outflow) andmillion yen (an increase of 7,866 million yen incorporate income tax paid of 34,875 million yen (aninflow), and on the other hand, the decrease in cash
increase of 11,706 million yen in outflow).
mainly due to an increase of 9,788 million yen in
trade
andusedotherinaccounts(a decrease
Net cash
investingreceivable
activities increased
byof
13,975inflow),a decreaseof year6,352to17,594 million yen infrom
the previous
fiscalmillionin tradeand otheraccounts
payable (an29,790 yen
millionyen. Thiswas mainly
attributabletoincrease
millionin equipment
outflow) andpurchaseof
of11,504
property,plantyenandofcorporateincomepaid of 34,875
millionyen yen(an
31,246 million
yen tax(a decreaseof 13,931
millionincrease
11,706
yenfiscalin outflow).
in outflowoffrom
themillion
previousyear).
HOYA INTEGRATED REPORT 2021

Net cash used in investing
financing activities
activities increased
decreasedby
by
17,59430,205 million yen from the previous fiscal year to

102 Copyright ©2021 HOYA GROUP

million yen in trade and other accounts payable (anincrease of 11,504 million yen in outflow) andcorporate income tax paid of 34,875 million yen (anincrease of 11,706 million yen in outflow). INTEGRATED REPORT 2021
Net cash used in investing activities increased by
17,594 million yen from the previous fiscal year to
29,790 million yen. This was mainly attributable topurchase of property, plant and equipment of
31,246 million yen (a decrease of 13,931 million yen
in outflow from the previous fiscal year).
Net cash used in financing activities decreased by
30,205 million yen from the previous fiscal year to115,673 million yen. This was mainly attributable topayments for purchase of treasury shares of 76,675
million yen (an increase of 32,392 million yen in
outflow from the previous fiscal year) and dividends
paid of 33,720 million yen (a decrease of 322 million
yen in outflow).

Capital Expenditures/Depreciation and Amortization
The total capital expenditures of all operations ofCapital Expenditures, Depreciation andthe HOYA Group amounted to 40,093 million yen
67.5%,
respectively,of thetotalyear
capitalexpendituresduring theconsolidated
fiscalunder
review, aAmortizationbythe Group.
decreaseof 14,055 million yen over the preceding
consolidated fiscal year.
The investment was covered by internally generated
funds.
In the consolidated fiscal year under review,
investment in the Life Care business amounted toDuring the consolidated fiscal year under review, in
12,644 million yen and investment in thethe Life Care business, the HOYA Group mainly
Information Technology business amounted toinvested in increasing production of eyeglass lenses,
27,053 million yen, which account for 31.5% andetc.
67.5%, respectively, of the total capital expenditures
by
theInformation
Group.
In theTechnology business, we madeinvestments mainly in production facilities at our
The investment was covered by internally generated
Singapore plant that manufactures mask blanks forfunds.
semiconductors for EUV lithography and production
DuringtheyearLaos
underplant
review,infacilities
forconsolidated
the launch offiscal
our new
thattheLife Care business,
the HOYAfor
Group
manufactures
glass substrates
hardmainly
disks used
investedin increasing production of eyeglass lenses,
in data centers.
etc.
Depreciation and amortization (includingIn
the Information
business,
we review
madeimpairment
losses)Technology
for the fiscal
year underinvestments
mainly yen,in production
facilities
were 44,502 million
28.3% higher
than atin ourtheSingaporeplantyear.
that manufactures mask blanks forprevious fiscal
semiconductors for EUV lithography and production
facilities for the launch of our new Laos plant that
manufactures glass substrates for hard disks usedin data centers.

Policy Concerning Decisions on Appropriation of Retained Earnings, etc.
Depreciation and amortization (including
The HOYA Group aims to maximize its corporate
Dividend per Share, Payout Ratio
impairment losses) for the fiscal year under review
value by developing businesses
globally
and
HOYA INTEGRATED REPORT 2021 103 Copyright ©2021 HOYA GROUP
were 44,502 million yen, 28.3%
higher than in thechanging the business portfolio to conform to theprevious fiscal year.
changing times and environments.

semiconductors for EUV lithography and production
facilities for the launch of our new Laos plant that
manufactures glass substrates for hard disks usedin data centers.

INTEGRATED REPORT 2021

Depreciation and amortization (including
impairment losses) for the fiscal year under review
were 44,502 million yen, 28.3% higher than in theprevious fiscal year.

Policy Concerning Decisions on Appropriation of Retained Earnings, etc.
The HOYA Group aims to maximize its corporate

Dividend per Share, Payout Ratio

value by developing businesses globally andchanging the business portfolio to conform to thechanging times and environments.
With respect to capital policy, our basic policy is toadopt decisions that strike the optimum balance
between enhancing internal reserves for the future
growth of the HOYA Group and returning profits toshareholders, while pursuing the optimum capital
structure for the HOYA Group that includes financial
soundness and capital efficiency.
In addition, by promoting management that gives
priority to capital efficiency by realizing maximum
profitability from the assets entrusted to us by theshareholders, and taking further steps toward
management that gives priority to SVA (Shareholder
Value Added), which is measured as the profit
generated by the HOYA Group minus the cost ofcapital, i.e., the profit expected by shareholders, we
aim for “Maximization of Corporate Value.”
With respect to internal reserves for future growth,resources will be preferentially appropriated toinvestment in the growing businesses for market
share expansion, entry into untapped markets, andnurturing and obtaining new technologies. In
addition to growth of existing businesses, we will
also proactively pursue possibilities including
mergers and acquisitions to further enrich ourbusiness portfolio. As for the Information
Technology segment, which has been positioned asa steady earnings business, we will continue tomake capital investment that further reinforces thetechnological abilities that become the source ofcompetitiveness, and development investment thatwill contribute to developing next-generation
technologies and new products.
With respect to returning profit to shareholders, ourpolicy is to proactively return profit to shareholders
HOYA INTEGRATED REPORT 2021

through using excess cash for dividends and theshare repurchases while giving comprehensive

104 Copyright ©2021 HOYA GROUP

technological abilities that become the source ofcompetitiveness, and development investment thatwill contribute to developing next-generation
technologies and new products.

INTEGRATED REPORT 2021

With respect to returning profit to shareholders, ourpolicy is to proactively return profit to shareholders
through using excess cash for dividends and theshare repurchases while giving comprehensive
consideration to the operating performance in the
consolidated fiscal year under review, level ofinternal reserves, and the medium to long term
demand for funds and capital structure, among
other factors.
The annual dividend, including the interim dividendof 45 yen per share that was already paid, was 90
yen per share. The consolidated dividend payout
ratio was 26.8%.
As for share buyback, the total amount of treasury
shares acquired corresponding to the portion that
had been approved by resolution at the meeting of
the Board of Directors during the fiscal year underreview was 80 billion yen. (Share buyback period
was from October 2020 to April 2021.)

Copyright ©2021 HOYA GROUPHOYA INTEGRATED REPORT 2021

105 Copyright ©2021 HOYA GROUP