Briefing Summary of the Analyst/Investor Meetingfor the 4th Quarter (January to March 2014) Financial Results
for the Fiscal Year ended March 31, 2014
Tokyo, May 7, 2014
Note: This memo is posted for reference purposes for the convenience of those who were unable toattend the meeting and is not a verbatim record of all statements made at the meeting. Please beaware that it has been compiled in a concise form at the judgment of the Company’s IR Group.
Please also refer to the cautionary notes on the final page.
Overview of Financial Results by Mr. Ryo Hirooka, CFO
Overview of Financial Results

I will begin my explanation with the Quarterly Consolidated Statement ofComprehensive Income on page 6 of the Quarterly Report. Sales amounted to¥115,224 million, which represented an increase of ¥19,129 million, or 19.9%, overthe same quarter of the previous year. The impact of the translation from foreign
currencies into yen on the performance of consolidated subsidiaries overseas,
together with the exchange rates for principal currencies, is shown in a note locatedat the bottom of page 6 of the Quarterly Report. The figure for sales includes ¥6,492
million due to translation into yen. If this is excluded, the real increase in sales was¥12.6 billion, or 13%.



Profit before tax for the quarter under review was ¥19,892 million, which
represented a decline of ¥11,718 million, or 37.1%, from the same quarter of theprevious year. If the effects of special factors are excluded, profit before tax rose
¥10.1 billion, or 77%. There is a gap between this figure and the ¥11.7 billion
decline in profit before tax of about ¥22.0 billion. This gap was the result of anumber of factors. These included a gain of ¥832 million due to the impact offoreign currency translation into yen; the absence of a gain of ¥14.2 billion owing to
the receipt of insurance payments in connection with the flooding in Thailand,
which was reported in the same quarter of the previous fiscal year; a loss of ¥1,666
million on the translation of assets denominated in foreign currencies into yen heldby the Head Quarters and regional headquarters, compared with a gain of ¥7,793
million in the same quarter of the previous year, which gave rise to a total ¥9,458
million decline in profit; the reporting of an albeit small ¥6 million in profit related
to companies accounted for under the equity method, compared with an investment
loss of ¥2,286 million in the same quarter of the previous year, which resulted in¥2.3 billion in gains; and an increase in loss factors of ¥1,958 million, which was1accounted for mainly by impairment losses on assets in the Information Technology
business segment.


If we take a closer look at results by segment, as shown on page 9 of the Quarterly
Report, revenue from external customers (hereinafter, revenue) in the Information
Technology segment amounted to ¥40,246 million. Excluding the effects of foreign
currency translation, which were ¥2.4 billion, the real increase in revenue was ¥1.2
billion, or somewhat more than 3%. Revenue in the Life Care segment amounted to¥74,193 million. Excluding the effects of foreign currency translation, which wereabout ¥4.1 billion, the real increase in revenue was ¥11.2 billion, or slightly lessthan 20%.



Looking next at segment profit, the Information Technology segment reported anincrease of ¥1,787 million, but after the exclusion of the effects of foreign currency
and special losses as well as other special factors, the real increase in profit was¥3.8 billion, or slightly less than 80%. The decline in profit in the Life Care segment
was ¥6,542 million, but in real terms, profit rose ¥6.6 billion, or 70%.



Taking an even closer look by sub-segment, electronics-related products showed anincrease in revenues of ¥4,313 million, but after the exclusion of foreign currencytranslation effects (of +¥2.0 billion), the real increase in revenues was ¥2.3 billion,
or just under 10%. Demand for masks for large-scale liquid crystal panels was quite
strong, and, combined with demand for smartphone and tablet computer display
panels, revenues expanded substantially for the full fiscal year, and even during thefourth quarter under review. On the other hand, revenues from glass memory disks(substrates) for hard disk drives (HDDs) decreased for the full fiscal year because of
the drop in demand for laptop PCs. Looking only at the fourth quarter, growth inrevenues was in the higher one-digit range. Revenues from imaging-related
products decreased ¥685 million. In real terms, revenues were down ¥1.4 billion(approximately more than 10%).



Revenues from healthcare-related products increased ¥11.4 billion, but after the
exclusion of foreign currency translation effects (of +¥2.5 billion), the real increase
in revenues was ¥9.0 billion, or about 20%. Revenues from eyeglasses showeddouble-digit growth compared with the same quarter of the previous year. This was
because of a number of factors, including the transfer of the eyeglass lens businessof Seiko Epson Corporation to HOYA and the commencement during the summer oftransactions with a large chain store retailer in Europe, combined with stable
growth in regular operations. In the contact lens business, where growth isgenerally in the mid-single-digit range, revenues expanded significantly during
March because of the surge in demand prior to the increase in the consumption tax.
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In the medical-related products business, revenues increased ¥3.9 billion, but after
the exclusion of foreign currency translation effects (of +¥1.6 billion), the realincrease in revenues was ¥2.3 billion. Growth in sales of medical endoscopeproducts on a local currency basis was in the lower half of the single-digit range,
with sales in Europe showing a reactionary decline following the strong
performance in the same period of the previous year, but sales expanded in theAmericas and other regions. Revenues from intraocular lenses (IOLs) were
negatively affected by a recall of these products, but we began marketing again in
Europe in fall 2013 and revenue returned to pre-recall levels. In Japan, theCompany is proceeding cautiously with sales activities, and some further time will
be needed before these products contribute to revenues.


Next, let us review the Consolidated Statement of Cash Flows for the full year,
which may be found on page 15 of the Quarterly Report. Among net cash flows used
in investing activities, payments for the acquisition of property, plant andequipment amounted to ¥16,546 million, a major decline from the ¥43,049 million
reported in the previous fiscal year. There were some spillovers of related payments
into the current fiscal year, but these were about ¥20.0 billion lower than in theprevious year.

Turning next to the Quarterly Consolidated Statement of Financial Position, which
may be found on page 4 of the Quarterly Report, investments in associatedcompanies accounted for under the equity method declined ¥1,650 million from theimmediately preceding quarter. This was because the Company acquired 30% of theshares of Seiko Optical Products Co., Ltd. (SOP) in June 2013, and then another
20% of that company’s shares with an effective date of March 31, 2014, and made ita consolidated subsidiary.



We have issued three news releases today, relating to the non-consolidated
difference compared to previous year results, the dividend forecast, andrepurchases of the Company’s own shares. The year-end dividend for the fiscal year
will be increased by ¥10 per share, to ¥45 per share, thus bringing the total
dividend for the fiscal year to ¥75 per share. This represents a dividend payout
ratio of 55%. Regarding share repurchases, the Company has set an upper limit of
10 million shares or a purchase value limit of ¥30.0 billion. The period for these
repurchases will be six months.

Overview of Operations by Mr. Hiroshi Suzuki, CEO

Before beginning my review of our principal businesses, I would like to announcesome changes in our management team. As of the Ordinary General Meeting of3

Shareholders this year, Mr. Yusaburo Mogi will resign from his position, and Mr.
Takao Takasu, former Representative Director and Chairman of NAMCO BANDAI
Holdings Inc., has been proposed as a candidate for the position of newly appointed
director.
Eyeglass Lenses


During the Company’s fourth quarter, a surge in demand emerged prior to theincrease in the consumption tax, which was implemented on April 1, 2014. We were
not able to include the sales for the last four days of the quarter, and we saw them
being included, instead, in figures for April.

In the fourth quarter, revenues (sales) and profits returned to the levels prevailing
prior to the flood disaster in Thailand. Although average unit prices of our products
have declined, unit volume is increasing, and we have seen considerable increases
in our rate of production capacity utilization. We are planning to start operations at
a new plant during the current year and increase our production capacity.



We increased our operating margin to 20% for the fourth quarter. With theinclusion of SOP in the scope of consolidation, we will be starting from a
temporarily lower margin. We will work to return the operating margin to what weregard as our “cruising speed” of between 18% and 20%. Basically, it will be
important to realize synergies with SOP. We will expand overseas sales of SEIKO
brand eyeglass lenses, working to increase sales volume and improve profitability.

Issues to be addressed during the current fiscal year are expanding sales of SEIKO
lenses in overseas markets and increasing average unit prices through changes in
the product mix.

Contact Lenses


In March, a surge in demand prior to the increase in the consumption tax emerged,
and sales climbed more than 20% over the same quarter of the previous year. I
think there will be a large reactionary decline in demand in April and subsequentmonths, but our view is that all of the decline will not take place in April, but thatsales will continue below the levels of the previous year for several months. We
believe that the recent surge in demand this time was most likely due to purchasesby people who use contact lenses mainly on weekends and people who use them
infrequently. These people will probably not buy contact lenses again for a while.



Excluding the surge in demand, sales are growing at between 6% and 7% annually.

This year, we are planning to add another 20 to 23 retail outlets. We think thatannual growth of about 6% is just right for striking a good balance between sales
4growth and profits. I also believe that we have to look for different sales channels
and methods.
Endoscopes

Since the Company manufactures these devices in Japan and sells them overseas,
this business benefitted from the weakening of the yen. The profitability of thisbusiness exceeded that of the Life Care segment as a whole. Prices of endoscopes
are stable, and the decline in the value of the yen has boosted profits from thissource.

After the exclusion of foreign currency translation effects, growth in sales was in
the middle of the one-digit range. We wanted to push sales even higher.



Next year, we will place marketing emphasis on ultrasonic endoscopes. These
devices can be used to take tissue samples from the kidneys, liver, and gall bladderby extending a needle-like instrument from the head of the endoscope into thesebody organs. Demand for endoscopes of this type is expected to increase.

Intraocular Lenses (IOLs)


We temporarily suspended production of IOLs and conducted a recall during theprevious fiscal year. Permission for selling IOLs has been obtained in Japan, but weare conducting cautious epidemiology surveys at present. Thus far, no issues havearisen. From the summer of 2014 onward, we are scheduled to recommence
nationwide sales in Japan.

Photomasks and Maskblanks for Semiconductors
Conditions in this business have settled down, and no major changes were reported.
The plant for manufacturing maskblanks is located in Nagasaka, Yamanashi
Prefecture, and, during the heavy snows this year, transportation routes were
temporarily closed. As a result, inventories have declined, but this has not had an
adverse effect on sales.

Photomasks for Large Liquid Crystal Displays (LCDs)

Demand for photomasks for OLED use was quite active. In addition to meeting
demand for high-resolution masks for smartphone use, we are proceeding with thedevelopment of masks for the production of ultra-large TVs, including 100-inch
units, and TV displays that can be bent into curved configurations.



There has been a trend in photomasks toward patterns with finer lines. In addition,at the micron level, there have been discussions about the difficulty of forming
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holes accurately. This is like a similar time in semiconductor production. Instead ofsolving this issue through the equipment used, we are working to find solutions
through the development of high-value-added masks, including phase shifted andother types.


Demand for photomasks is extremely strong, and production facilities are runningat full capacity. It appears that some of our competitors are considering the
expansion of their capacity. However, we are concerned because we have finallyturned a profit in these operations, and increasing capacity in the market mightmake showing a profit more difficult.

Glass Memory Disks for Hard Disk Drives (HDDs)


Although sales to manufacturers of notebook PCs have decreased, our performancehas remained firm because of replacement demand for PCs running thepost-Windows XP operating systems. Also, while sales of HDDs for use in game
consoles are typically weak in the January-to-March quarter, sales this year haveremained favorable even after the beginning of the fourth quarter.



Since 667 GB units account for only a small portion of sales, we do not feel thatthese units will show major growth. Among 2.5-inch HDDs, 90% of those adopted
for use are 500 GB units, and the market has not moved onward to larger capacity
units. On the other hand, it appears there are customers who would like to have one
terabit HDDs; so, there is a trend toward increasing the number of disks used for
one HDD.

Optical Glass

Market inventories of interchangeable lenses increased following the Christmas
season, and it appears that camera manufacturers are adjusting their productionlevels.



We are also focusing on applications for optical glass other than cameras. Last year,
we began to make lens modules for smartphone cameras equipped with zoom
functions and hand-motion cancelling features. A few manufacturers are interested
in these units, and products with these features are scheduled for launching in thelatter half of the current fiscal year. If these cameras meet with a favorable market
response, I think they will contribute to our performance, but right now they are an
unknown quantity.



In other fields, we are beginning to offer optical glass for cameras installed in
automobiles. To avoid running into other objects, a high image quality is needed;
therefore, high quality is needed in sensors and lenses.
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Questions and Answers Following the Briefing

Q: What was your reason for setting the upper limit on share repurchases at ¥30.0
billion? Also, has your thinking about M&A undergone any changes?
A: (CFO) We made this decision based on a wide range of considerations, including ourown funding demand, current conditions, and stock prices. The shift in our productportfolio from Information Technology to Life Care is accelerating, and the focus ofour business activities will likely move to Life Care. As regards share repurchases,
during the period under review, we made major reductions in capital investments,
and, taking account of the condition of our cash flows, we decided on the ¥30 billion
figures to return a portion of retained earnings to shareholders.
(CEO) As in the past, we will continue our M&A activities. We are thinking ofcontinuing to use cash for our M&A deals.

Q: What are your plans for capital investments during the current fiscal year, ending
March 2015?
A: (CFO) We are looking to invest between ¥20.0 billion and ¥25.0 billion on an annual
basis.

Q: Could you please give us your view on the semiconductor market and the very latest
developments in that area?
A: (CEO) The industry is currently in the process of starting up 16nm processes.
Theoretically, this is possible, but the question of what these semiconductors will be
used for after being made available is still in doubt.
Also from the perspective of miniaturization and functionality, I have the feelingthat these semiconductors will leave the job only half done.

Q: For the fiscal year as a whole, please explain the reasons for increases and decreases,
including special factors.
A: For the fiscal year as a whole, profit before tax decreased ¥5,718 million from theprevious fiscal year, but, on a real basis, profit before tax increased just under ¥15.0
billion, or approximately 25%. The special factors were as follows. A gain of ¥7,372
million due to the impact of foreign currency translation into yen; a decline to ¥0.8
billion in receipt of insurance payments in connection with the flooding in Thailand,
compared with receipts amounting to ¥32.1 billion in the previous fiscal year; theabsence, compared with the previous year, of ¥2.2 billion in gains on the step-by-step
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acquisition of a lens manufacturing company in Brazil; and a decline of about ¥4.0
billion in the loss on translation of the value of assets denominated in foreign
currencies into yen by the Head Quarters and regional headquarters, from ¥12.5
billion in the previous year, to ¥8.5 billion in the year under review.
In addition, equity (loss) in earnings related to associated companies accounted forunder the equity method improved from a loss of ¥11.9 billion to a loss of ¥0.3 billion.
The net total of these special factors amounted to about ¥20.0 billion. If these factors
are excluded, the increase in profit before tax was ¥15.0 billion.

Q: Is the amount of the capital investment in the new eyeglass lens plant included inyour annual figure of total planned investments between ¥20 billion and ¥25
billion? Also, where is the plant located?
A: (CEO) As Epson has a plant in the Philippines, we are considering a location in thePhilippines. Since we will be investing in stages, the full amount will not be includedin the current period.

Q: Overseas, the view now being expressed frequently is that digital surfacing
technology (DST) will be a threat to lens manufacturers, such as Essilor. What is
HOYA’s view on this point?
A: (CEO) There are two types of eyeglass lenses. Those held in inventory and those
produced on special order. Almost all lenses produced on special order are progressive
lenses for persons with presbyopia and other eye conditions. This is an area of special

strength for Essilor and HOYA. Lens manufacturers such as HOYA sellsemi-finished or these special order lenses as finished products to eyeglass retailers
or to so-called eyeglass laboratories that have lenses processing equipment. Theselaboratories buy these lenses in semi-finished form from lenses manufacturers,
process them into finished form, and then sell them to eyeglass retailers. There aremany of these lenses-finishing laboratories in the United States. In part because theprices of DST equipment have declined, these eyeglass laboratories are buying theirown equipment, and then they have the capability to do a portion of aspheric surface
processing. As a result of the wider use of DST, we believe that the level of sales ofsemi-finished lenses by lens manufacturers may decrease temporarily because they
will be put in a disadvantageous position. On the other hand, however, this trend
may have merits for these manufacturers. Because of DST, the leeway for design has
increased, and they will be able to offer special, custom-made lenses. We think there
is a possibility that the types of design (optical design) will expand. This will meanthat we will be entering an era when design will be more important rather than8

processing capabilities. We are anticipating that lens manufacturers, such as HOYA
that are proceeding with optical design that takes account of the workings of “thelenses,” “the eyes,” and “the brain that recognizes images of objects, will be evenbetter positioned to show their true strengths. Therefore, we believe that, from along-term perspective, this trend toward DST will put us at an advantage. Also, acertain report has also stated the concern that, if eyeglass retailers acquirelenses-making capabilities, this may be a threat to lens manufacturers. However, as
you might expect, from the perspective of production, lens manufacturers willdefinitely be in a better position.

Q: You indicated that the profitability of the eyeglass lens business had improved to20%. What were the reasons for this?
A: (CEO) The major factor was the increase in the plant utilization ratios. Profitability
in the Epson-related business is also improving gradually.

Q: What will be the impact on your performance of consolidating SOP?
A: (CEO) We expect that consolidating SOP will contribute ¥14.0 billion to revenues forthe year ending March 2015.
Certain statements contained in this report constitute forward-looking statements regarding theCompany’s future performance and environment of the industry in which the Company is involved.
Forward-looking statements are based on the judgments of the Company and corporate groupobtained based on information obtainable at the time the statements are made and they also containrisks and uncertainties. The Company does not guarantee the completeness or accuracy of thecontent. Consequently, you are advised to refrain from making investment judgments relying entirelyon these forecasts. Actual performance and the industry environment may differ materially fromthose expressed by the forward-looking statements for a number of reasons. You are requested tomake final decisions regarding investment, etc., on your own. Please be aware that we cannot takeresponsibility for the outcome of investments.

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