HOYA CORPORATION
Q1 Financial Results Briefing for the Fiscal Year Ending March 2024
July 31, 2023

[Number of Speakers]

3
Eiichiro Ikeda
Ryo Hirooka

Director, Representative Executive Officer,
President & CEO
Director, Representative Executive Officer &CFOModerator: Now that the time has come, HOYA Corporation will begin the briefing on the financial results forthe first quarter of the financial year ending 31 March 2024.
We have with us President and CEO, Eiichiro Ikeda and Representative Executive Officer, CFO, Ryo Hirooka.
From Hirooka, there will be explanation of the performance of Q1 as well as the market situation and we will
be taking questions after the presentation.
Hirooka: Let me begin the Q1 results. This is group overall. I would like to start out with the numbers.

As for the revenue, JPY182.3 billion. Compared to last year, it was plus 1% YoY and on a constant currency
basis, negative 2%. Pretax profit, JPY51.2 billion. Compared to last year, it was down 17%; on a constantcurrency basis, negative 20%. The operating profit, JPY47.8 billion. Compared to last year, down 12%; on aconstant currency basis, down 14%.
There is some explanation I would like to give in relation to this. We have been explaining this, but HDD glass
substrate was sluggish. That was the case for Q4, and in Q1, the situation remained the same. Last year, in Q1,
both businesses were doing very good. On a YoY basis, it has led to significant decline, especially in IT.
As for Life Care, overall, the business performance was good. It was growing in double digits. Because of that,with regards to the revenue, even though it is slightly negative compared to last year, we were able to stayon par with the previous year due to great performance in Life Care. However, given the margin differential
among the two segments, there was a big impact in the profit.
In terms of the other negatives, the HDD glass substrates, the situation remained the same as three months
ago, and we are not seeing the trend of recovery. Currently, it is slightly worse than we had expected. We
have a plant in Lao and there was some stoppage in the line last year. According to the market situation, as
for the Lao plant, we decided that it would be good to stop the Lao plant and to utilize the Vietnam plant.
Because of that, we will be shutting down the Lao plant in the long term, and because of that, there was an
impairment loss incurred from this initiative on the accounting basis.

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Just like last year, in Q1, there was a big gain from the currency exchange. There has been profit and losses
incurred from the currency exchange. The US dollar deposits, euro deposits, are generating that gain. Thereis no change in the assets themselves. It depends on the currency rate at timings. US dollar and euro had beenstronger in June than March. Because of that, there was more gain from the currencies. That was the overview.

I would like to talk about the Life Care business. First, I would like to start out with the numbers.
Revenue was JPY127.4 billion, up 15% YoY. On a constant currency basis, it was up 11%. Continuing from Q4,
there was a robust growth. In terms of the pretax profit, JPY30.5 billion. Compared to last year, it was up 22%.
On a constant currency basis, plus 16%. Operating profit was JPY25.3 billion, 17% up YoY, and on a constantcurrency basis, up 13%. Operating profit margin was 19.8%.
Each product grew very well in Life Care business. We have been spending a lot of money on the selling costs,
promotion costs, and clinical trials, but we are seeing the good sales from the high value-added products. We
have been able to secure the operating profit margin of around 20%, which is our target, while investingenough to where the investment is needed. There is a good cycle, which has been generated, and of course,
we need to do more. But in Q2 to Q3, I think that we will be able to grow while investing where we need to.

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Moving on to the next slide. This is product by product in Life Care business.
First is eyeglass lenses. On a constant currency basis, it was up 12%. There was a robust growth in this area.
There was some impact from M&A, but even excluding that, we were able to grow in double digits.
There are two main drivers, US and China. As for the US, there was some time of struggle. But starting from
H2 of the previous year, the situation started being stable. Organization-wise, it became stabilized as well. We
have been able to see the increase in sales in US chain stores. So, now, we are in a growth trend.
Another is China business. In Q1 of last year, due to the impact from COVID-19, there was a downward trend.
There was a rebound from that situation. But even excluding that rebound, we have been able to sell our
myopia management lenses.
Also, in addition to US and China, for eyeglass lenses, we were able to introduce products such as myopia
management lenses for children, etc. In each region, we have been able to improve our sales status.
Growth in Europe has also more than covered the sales of a customer (acquired by another company), withsustained double-digit growth across the board. This is a business which is difficult to grow constantly indouble digits. At some point in time, there would be stoppage to the double-digit growth, but our focus is to
grow more than the market. Currently, we are growing more than the overall market growth.
Next is contact lenses. There was a 9% growth in constant currency basis. Compared to Q1 last year, we hadseen negative impact from COVID-19. The frequency of the use of contact lenses had been low but it is now
recovering. We are seeing strong sales in the physical stores, and we are doing well in the private brandproducts and online delivery services, which have been able to respond to the needs of the customers. We
have been able to capture the demand from the market in this area.
Next is endoscopes. Compared to last year, on a constant currency basis, we grew 6%. Endoscopes had seen
smaller growth than the previous years in the past, but we are seeing a positive growth now. There has beenrebound in the China market. However, in addition to China, we have been able to see a robust shipment in
the other markets as well. Of course, there are struggles in this area, and we need to strengthen our structure3

in the US going forward. We will focus on the launch of the new products. When the new products arelaunched in the market, our sales force will gain momentum, so we would like to capture that momentum inorder to grow the sales in the area of endoscopes.
Next is intraocular lenses. Compared to last year, on a constant currency basis, we grew 16%. There was asignificant growth. In Q1 last year, due to the impact from COVID-19, China was stagnating, so there wasrebound sales in this area, but in Europe and Japan, there was a sustained robust growth. We launched new
products last year and not all of the new products are doing well, but by launching new products, we havebeen able to conduct sales activities in various regions, and that led to strong growth in sales.
Last but not least is artificial bones and medical devices. The amount is not so big, but this field has seen
double-digit growth.
If you look at Life Care business overall, we have seen revenue growth and double-digit growth at that as well.

Moving on to the next slide. Next is IT business overview.
The revenue was JPY53.7 billion. Compared to last year, it was down 21% YoY. On a constant currency basis,
negative 23%. There was a significant drop compared to last year. Last year, in Q1, HDD was doing well. LSI
mask blanks, and EUV were driving the growth of the IT business. Because we are comparing to that period,
there was a significant drop. On a QoQ basis, last quarter was JPY59.6 billion so there was a drop from Q4.
But when I talk about HDD in the following slides, I will explain that the drop is coming mostly from the dropin the HDD substrates. LSI has seen flat growth from Q4.
The pretax profit was JPY20.9 billion. It was down 41% YoY, and on a constant currency basis, negative 43%.
There were impairment losses from the Lao plant, and because of that, pretax profit went down significantly.
With regards to the operating profit, it was JPY23.7 billion. Compared to last year, it was down 29%. On a
constant currency basis, it was down 31%.
I may be repeating myself, LSI and HDD substrate, the amount of drop was significant. The operating profit
margin was kept at 44%, but we were not able to cover it value-wise.

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For the IT business, this quarter was a very severe one. In this market, we are impacted very much by themarket situation and there are limits to what we can do on our own. However, we will conduct flexible cost
control so that the cost will be minimized. That's something that we need to work on. As I have said earlier,
we will shut down the Lao plant for a longer term so that we would be able to reduce the amount of drop in
the profitability. We booked the impairment losses as a result of that.

Moving on to the next slide, now I would like to talk about the overview by product.
In terms of LSI, on a constant currency basis, down by 9%. This is something I explained in the previous
announcement. There was an inventory adjustment by the customers, which is actually happening right now.
In terms of the amount of decline, it is a little bit more than we had expected. However, it's not like somethingthat is completely different from what we have imagined, what we have expected that is happening. We didannounce our guidance three months ago, but we expect a gradual recovery from Q2, and that forecast
remains unchanged. I don't think there will be such a big recovery, but Q1 will be the bottom, and we are
expecting a gradual recovery from Q2. In terms of the market environment, there's not much change in thecompetitive environment. Therefore, the inventory adjustment that's happening in the market is having an
impact on our sales.
Now, moving on to FPD, large panels. The environment is not necessarily good. However, we have been able
to grow by 2% in terms of sales. The Chinese customers, we have a joint venture with them and everything isgoing in line with our plan. By enhancing our partnership with them, we believe we are able to increase oursales.
Now, moving on to HDD substrates. There's been a decline of 46% against the previous year. I've said thismany times already, but the macro environment is extremely bad. If you look at the results for Q1, I believethat things are getting worse than we had expected. Three months ago, I did mention that we don't know
when the recovery is going to happen, but even as of today, we don't have any visibility on when it's going torecover. However, I believe that it's going to be quite difficult to achieve recovery before the end of this fiscal
year. That is one of the reasons why we decided to stop the operations in our Lao plant. Next fiscal year, our
Lao plant, even if the demand comes back to a certain extent, we'd rather keep the Lao plant closed and utilize

5the Vietnamese plant at maximum utilization to achieve the best efficiency with the Vietnam plant. I think webelieve that the situation will remain unchanged for the next 12 months or 18 months.
Lastly, imaging, down by 13%. Again, the macroeconomic environment has an impact on the performance of
the imaging business, but basically, the impact of this business to the performance of the Group as a whole is
not very big. Therefore, what we would like to do is to make sure that we maintain our profitability with thisbusiness. That's going to be something that's important for the business. For this quarter, even though oursales went down, we were able to maintain our profitability.

I will not explain details, but the highlight here is that as part of our shareholder returns, in today's Board of
Directors meeting, it was resolved to purchase up to JPY50 billion of shares. We will start from tomorrow and
we'll spend about two months to repurchase JPY50 billion of shares. Once they are repurchased, we will cancel
them.

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This is the forecast for H1. Revenue is JPY182.7 billion with JPY53.8 billion pretax profit and JPY42.1 billion fornet profit. The assumption for FX is JPY135 and JPY145, so a little bit stronger in terms of yen for assumptions.
Related to FX, I want to add one more thing. We have not baked in any losses or gains from currency exchange.
It is not easy to make assumptions on what the currency rate is going to look like by the end of September. It
will be useless making assumptions in this sense. Therefore, our assumption is that there will be no losses orgains from currency exchange, but needless to say there is a possibility that we'll be recording losses or gains.
In terms of business, Life Care business, we believe is going to grow. LSI mask blanks, as I mentioned earlier,
we believe Q1 will be the bottom. After that, we are expecting gradual recovery. For HDD, we believe that Q2
is going to be worse compared to Q1. We have already incorporated that to the guidance. HDD, we believe
the performance is going to go down, but we would like to offset that with Life Care business and also recoveryof LSI. We are hoping that we'll be able to deliver a better result compared to Q1.
Now, that is all from me for the presentation.

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Question & Answer

Moderator [M]: Now, let us move on to Q&A. Yoshida-san, please.
Yoshida [Q]: From CLSA, my name is Yoshida. You said the HDD Q2 will be seeing a deteriorating situation. I
was wondering when the bottom will be for HDD. With the impairment losses at Lao, what would be thereduction in the cost for the quarter? I would like know how the recovery would be for HDD.
Ikeda [A]: As for the HDD outlook, there would be a further drop in Q2, and the Q2 level number will probably
be the range that we will be seeing throughout this fiscal year.
Going off the topic a little bit, if we look at the current status, this fiscal year, the number will remain low, but
if we look mid to long term, we believe that HDD will grow. We have not changed our view on that. The Laoplant will be shut down, as we have said. However, there are cases in the past where we had stopped the lines
in order to improve the profitability. So, this shutdown is an extension of those kind of initiatives. If it'snecessary, we will be resuming the operations in Lao as quickly as possible, as needed.
We have continuously been converting the 2.5 inch production lines into 3.5 inch lines. In the past year or so,
the 3.5 inches demand had been low, and the 2.5 inches demand has been coming down. We had expected
that, so no surprises. But the 2.5 inches line will be freed up, so the Vietnamese 2.5 inches line will be
converted to 3.5 inches. When the volume of the demand had gone up, we would be able to utilize Vietnam
plant rather than resuming the operation of the Lao plant. Just because the Lao plant is being shut down for
3.5 inches, it doesn't mean that there is not an increase in the production of 3.5 inches.
Hirooka [A]: As for the fixed cost, we do not disclose the specific figures, but we will look at the economic
rationale in making the planning. Last fiscal year, there was a significant drop in the revenue, and we havebeen taking initiatives of stopping the lines. The shutting down of the whole plant does not significantly reducethe cost, but we will be working to maximize the cash flow to the extent that we so there would not be asignificant impact to the profitability. It is not that there will be a significant drop in the fixed cost. We havebeen conducting the cost control by stopping some of the lines in the plant already, so the drop in the cost
will not be so significant. It would positively impact the cash flow all the same.
Even if the revenue goes further down, we believe we can maintain the profitability levels. The stoppage inthe plant will contribute to some of the upside.
Yoshida [Q]: I would like to ask about the competitive environment of the EUV blanks. You said that there's
not much change in the environment, but there are some aggressive comments from your peers. Phase-shiftmask, I think when the new technology comes into the market, I think you will have more opportunities. If
you could talk about the opportunities and risks, I would appreciate it.
Ikeda [A]: EUV environment, there are two aspects. In terms of the advanced product development, 2-nanodevelopment and beyond, 1.4-nano development, on that point, there is no change in the competitiveenvironment. We have been able to get certification as we have planned. When the production went downin the past, we had focused more on R&D. I have been explaining about this since two to three quarters ago.
Through this initiative, we will work to conduct the R&D for advanced products. The certification activities forthe leading-edge products will be continued. In addition to that, we have been obtaining qualification by new
customers to some exetent.
On the other hand, there are cases where the customers want to procure from two companies where theywould like to conduct dual procurement. The EUV started out with 7-nanos. The customers are continuously

8evaluating the competitors at 7-nano for a particular layer, but we don't see a situation where theirprocurement has shifted to the competitors. However, when they're looking for a second supplier, this kindof situation occurs, and there is nothing we can do about the customers' policies with regards to the dual
procurement. In the past, there was a time when our market share dropped when the competitors were
aggressive in the optical product. At that time, our quality was not really meeting the requirement ofcustomers. This time around, there is no issue with our quality. The customers are purely looking for the dual
procurement. That's the current status.
Yoshida [M]: Thank you very much for your response.
Moderator [M]: Now, I would like to ask Nakamura-san for your question.
Nakamura [Q]: I am Nakamura from Goldman Sachs. I have a question about EUV and hard disk drive. I justwant to check on the numbers, the Q2 number compared to Q1. Hard disk and LSI, can you make a comparisonin terms of the Q2 result against Q1?
Hirooka [A]: For the hard disk, the number that's been incorporated, 20%, I believe, will be the decline
compared to Q1. LSI is going to grow gradually. Especially for EUV, we expect a double-digit growth QoQ.
Compared to Q2 in the previous year, we believe it will be a single-digit drop.
A double digit QoQ growth for EUV may seem impactful, but for the total performance of LSI, I think it will bea very gradual growth recovery.
Nakamura [Q]: It seems like the EUV utilization at your main customers has not recovered to full. In contrast,
you are expecting a growth towards Q2 for your EUV product. Can you explain why? Also, do you see any
increased demand for generative AI?
Ikeda [A]: We don't have any visibility on that. We don't know if there are any positive impacts. However, inthe macro market, once we have a new technology, things like GPU are being used in society, that is definitely
going to have a positive impact for our mask blanks business. We welcome that. However, is it having direct
impact to our orders? That is not the case, not as of today.
The volume recovery from Q1 to Q2, double-digit growth to be achieved in Q2 against Q1, let me explain thereason. The inventory level has come down on the customer side. Therefore, in Q1, the number of order that
we have received is lower than the actual demand. Going forward, if we are able to receive orders based on
the actual demand in the market, I do believe the number is going to go up against Q1. It's not like there is
any special reason. It's just the inventory level of the customers and also the relationship of the inventory
level with the actual demand in the market.
Nakamura [M]: Thank you very much for your answer.
Moderator [M]: Katsura-san, please.
Katsura [Q]: Thank you very much. This is Katsura. As for the JPY7.9 billion in the impairment losses in HDD,
the remaining amount was impaired. Is my understanding correct?
The Vietnam plant for Q1 and Q2, what is the utilization change considering the Vietnam plant as adenominator. Even with just the operation of the Vietnam plant, you said that there would be upside without
the resumption of the Lao, but what is the situation?
Ikeda [A]: As for Lao, we have impaired all of the assets. There are two plants in Vietnam and the size of thetwo plants are almost equivalent to each other. One of them has two facilities and 50-50 capacity. Half of one
plant in Vietnam will stop its operation. In Q2, there would be a one-fourth operation.

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Katsura [Q]: My second question is related to Life Care business. It seems that Life Care business is doing well.
On page six, if we look at the Q1 situation, the eyeglasses in the US and China are doing well and as for contactlenses, private brands, and online delivery services are doing well. Overall, it seems that Life Care business isdoing well. So what's the biggest driver of Life Care business? What is the outlook for the coming quarter?
Where do you have the highest expectation in terms of the segments?
Ikeda [A]: The Life Care business is doing well overall, but I would say eyeglass lenses and IOLs stand out.
Eyeglass lenses, last year, the US market was not doing well, but by changing the sales structure in the US torevitalize the organization, we have been able to win deals in the US chain stores. Also, we are seeing robust
growth from the independent stores as well. I think this robust trend will continue for quite some time.
Another point is MiYOSMART is doing well. We have been getting approvals, we have been able to roll out invarious markets, and we are seeing good performance. We have been able to acquire new accounts. As
Hirooka-san has mentioned, this led to increase in our share. We believe that this will continue going forward.
We don't believe that the double-digit growth will continue forever, though. The numbers are quite big andthe market growth is not so strong overall. We would not be able to grow in double digits forever, but for thetime being, we would be able to grow robustly.
As for intraocular lenses, we have good share in Japan. We have developed new products and we are rolling
it out outside of Japan. This initiative has been working quite well and this has led to the strong performancein this field. In IOLs, I think we would be able to expect a certain amount of growth. I would not be able to say
definitely that it will be in double digits, but it will grow. For eyeglasses, the US market has been the driver.
The IOLs are enhancement in the sales force and the new products had been able to enable us to grow.
Moderator [M]: Wadaki-san, please.
Wadaki [Q]: My name is Wadaki from Mitsubishi Morgan Stanley. My first question is about the EUV mask
blanks. I have a concern about major foundries introducing pellicles which would prolong the life of EUV blanks,
which means that there is a risk of demand decline.
Ikeda [A]: I do receive a lot of questions on that. At present, there is no evidence of a significant reduction inorder volumes due to the impact of pellicle. Our customers update us with volume demand quite frequently,
but it's not like there will be a significant decline in the volume that they will be purchasing from us. However,theoretically or as far as we can imagine, if they start using pellicles, there may be some decline to a certain
extent, and that cannot be denied. However, if customers use pellicle and if the process becomes easier tohandle, there will be an increase in the number of customers adopting EUV. There are some positives as well
as negatives. However, we do not believe that this is going to have a significant impact on our business, looking
at the trends of the orders that we receive.
Wadaki [Q]: Thank you very much. My second question, on the positive side, phase-shift mask is getting agood reputation. We do believe that it's going to be used widely. Also, I hear that mask blanks demand isincreasing in China. When is it going to make contribution to the performance of the Company and how muchof an impact are you expecting?
Ikeda [A]: Phase-shift mask, I said that in the leading edge, the certification is going well, which includes
actually the phase-shift mask. It is being penetrated. The volume is going to come later. The customers are
beginning to certify and accept this technology. This technology is used in advanced areas, such as 2-nano.
Therefore, once those things come out in the market, the mass production is going to happen.
Regarding the Chinese mask shops, the impact to the total business compared to EUV is far small. The
sensitivity on the mask blank business is not so big at this point.

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Wadaki [M]: That is all from me. Thank you very much.
Moderator [M]: Damian-san, please.
Thong [Q]: This is Damian Thong from Macquarie. In the glass lenses, I think that the performance is good forthe full year. I was wondering how much growth that you are expecting? That's my first question. In terms of
the sales expansion, for H2 towards the next fiscal year, would there be increase in the cost? Do you thinkthat the profitability can be maintained around 20%?
Hirooka [A]: We would not be disclosing the specific figures. As I have said and as Ikeda-san has said, in thisfield, it is very difficult to constantly grow in double digits because usually, the market growth is about midsingle digits. On a full-year basis, I think that it will become flatter in terms of the growth. Our focus is to bebetter than the market growth and, also, that we grow in the latter half of the single digits even if we are in
the single digit. Winning over the competition for the full year constantly, that will be a very difficult thing to
do in this market. The latter half of the single-digit growth is something that we would like to stably accomplish
in this business. That's what we are aiming for.
In terms of the profitability levels, our aim is to invest while maintaining our cost structure so that we would
be able to improve the operating profit margin. We don't want to increase the investment if that would lower
the margin. We would not be able to promise the operating profit margin of 20% constantly. There would besome fluctuations from that level. What we would like to do is to maintain the cost structure that we haveand invest under that structure and generate revenue whose growth is higher than the market growth. We
don't to reduce the margin through the increase in the investment. That's what we would be aiming for.
Thong [Q]: I would like to ask from a different perspective. Two years ago, in the United States, I think thatyou are growing, and in this Q1, you had posted a very good growth in the US market. I think that your sharein the mass retailers and the discounting stores is quite low, so I think there is still upside potential for growthin that area. This term and the next term, how much do you think that you would be able to grow potentially?
Could you give an idea of the plan that you have for the US business?
Hirooka [A]: In terms of the actual performance, if we look at the US market, we were able to grow in double
digits for Q1. That had driven the growth of the vision care business. This market has been struggling for quite
some time, but from H2 of last year, we have seen a trend of recovery, especially in the area of chain stores.
Q1, growth-wise, we were able to see a lot of upsides. That's why it has grown in double digits. However, if
you ask me, if we can keep the double-digit growth in the full year, it is very difficult to say because we are
dependent on how much growth there would be from the chain stores. On a QoQ basis, I think it would be
difficult to constantly maintain the double-digit growth because we are dependent on the market situation. I
think that the market was doing well in Q1, but we are depending on the market status in this area. I am notable to commit to the double-digit growth for the full year. That's all I can say.
Thong [M]: Thank you very much.
Hirooka [A]: I would like to make a supplementary comment. We were weak in this area. This area has thebiggest upside. For vision care overall, US is a very important market, and US will contribute to the overall
performance of the vision care business.
Thong [Q]: There is one other follow-up question. In hard disk, I think you're suppressing investment foreyeglasses and Life Care business. Overall, for this fiscal year and the next, are you expecting any additional
investment?
Hirooka [A]: Basically, for IT, because we are in such a market status, we are suppressing the investments. We
talked about the impairment losses earlier. Because of that, we would not be making significant investment

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in HDD. We have been starting to suppress the investment starting from last year. For HDD, the investment
will be at the minimal level. LSI blanks, there is inventory adjustment going on, and we believe that this is atemporary drop. Last year, we had decided to make investment, and in Q1, we did invest. We will be
responding to the expected recovery in the demand for H2 and the next fiscal year.
Regarding whether we would be increasing the investment, we have already completed the investments that
we have been planning to make. In terms of the eyeglasses, we will continuously invest. The case was thesame for two years ago, a year ago, and we are continuously improving our capacity. There is increased
demand constantly for the RX lens demand, so we are investing in this area. However, the value of theinvestment is not significantly increasing. We are investing in the amount that is in line with our growth.
Thong [M]: Thank you very much. That's all for me.
Moderator [M]: Thank you very much. Nakanomyo-san, please.
Nakanomyo [M]: My name is Nakanomyo from Jefferies. I have a question about endoscopes. Reportedly,
the QA/RA cost at a competitor is getting quite high. I think the thinking of the regulatory authority has
become very strict, which I believe is going to have an impact on your business. Is that a possibility? That is
my question.
Ikeda [A]: As we pointed out, cost related to regulatory affairs is something that we need to take care of. We
have to make investments. In 2022, compared to the past, QA/RA response-related cost has increased in
FY2022. We did make an investment in FY2022. Was that sufficient? We cannot say for now. For the time
being, we have somewhat suppressed the investment up until FY2021. We made an investment in FY2022.
We also invested for resources for QA/RA. We made a foundation for that, so it's not like there's going to bea need for major investments in this fiscal year or next fiscal year. However, as the situation may change, thecompany is willing to regularly assess the situation and make the necessary investments.
Nakanomyo [M]: Thank you very much.
Moderator [M]: Since it is now time, we would like to conclude today's briefing session. Thank you very muchfor joining us despite your busy schedules.
[END]______________

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