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I am pleased to present for our shareholders and investors a summary of the business conditions during fiscal
2003 (covering the period from April 1, 2002 through March 31, 2003), along with a report of the Company’s
performance and our outlook for the future.
Management Guidelines and Strategies
Although there were signs of a slight recovery in the operating environment in the U.S. and Asia in the early
part of fiscal 2003, negative effects from a later slowdown in the U.S. economy, the stock market slump and
continuing global deflation held back the overall recovery trend. Demand remained steady, however, compared
to the significant decline in fiscal 2002, and the economy was on par with the previous year. Under these con-
ditions, competition between companies intensified, and there was a further round of culling throughout all of
industry, with clearly defined winners and losers. Trends in the operating environment became even more dif-
ficult to read, with unexpected developments for which previous experience was no guide, such as the deterio-
ration of the situation in Iraq and the spread of SARS.
Faced with such an unclear operating environment Hoya recognized the importance of properly assess-
ing changes and responding with changes to its own operations, concentrating on management. Measures
undertaken during fiscal 2003 can be summarized in the following key principles:
1. Reallocating management resources
2. Responding to the shrinking Japanese economy
3. Increasing market share
The second and third principles are of course important elements that cannot be overlooked in the implemen-
tation the first, the reallocation of management resources. This is a point that we remained particularly con-
scious of while managing the business during the term.
I would now like to turn to some of the specific measures undertaken during the fiscal year.
Although the percentage of Hoya’s overseas sales reached 44% during the fiscal year under review, the
majority of our sales are still in Japan. The Japanese economy, however, continues its slump and trend toward
contraction due to the deflation, corporate restructuring and stagnant capital investment that followed the col-
lapse of the IT bubble. Because of this situation, the Hoya Group reexamined each of its businesses in Japan,
and concentrating on those with potential for further growth developed new sales channels and products, as
well as made investments aimed at increasing market share.
To Our Shareholders
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