Pentax 2007 Annual Report Download - page 5

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I am delighted to have the opportunity to report on Hoya’s business
results for the fiscal year ended March 31, 2007, and to offer an
overview of our future business direction.
Managing the Business Portfolio for
Sustained Growth
Hoya manages its business based on the philosophy that every
undertaking has a predetermined lifespan, so we aim to ensure
sustained growth over time by pursuing a thoughtful balance of
enterprises that precisely meet the needs of their times. Hoya’s
business portfolio continues to be adjusted in careful reflection of
the changing times and the evolving business environment.
Currently, Information Technology and Eye Care are the two
main fields of Hoya’s business. I would imagine that many readers
are most familiar with our Eye Care business, which includes
eyeglass lenses and contact lenses. Our flagship product in this
field is eyeglass lenses, for which Hoya is the largest manufacturer
in the Japanese domestic market. On the global stage, too, our
eyeglass lenses have been very well received.
The Information Technology business has been making a great
contribution to Hoya’s growing profitability, thanks to the current
trend toward greater functionality and reliance on digital technology
for home electrical products and IT devices. It would be rare for
most people to get a chance to see the products Hoya offers in
the Information Technology field, even though they are hidden away
inside devices they use every day. The fact is that the materials
and products Hoya makes are all indispensable to the manufacture
of such ubiquitous goods as notebook computers, digital cameras
and LCD televisions.
Review of Fiscal 2007 Results:
Sales and Income Both at Record Highs
Hoya’s consolidated results for fiscal 2007 were very favorable.
Net sales rose 13.3% on the previous year to reach ¥390,093
million. Operating income was up 6.1% year-on-year to ¥107,213
million. Ordinary income fell 0.7% to ¥102,909 million. Net income
was ¥83,391 million, up 10.3%. Summarizing the year as a whole,
in the first half results were bullish, riding a wave of strong
demand. In the second half, however, we were busy accelerating
investment in the extra productive capacity needed to respond to
swiftly increasing demand. Unfortunately, it was not possible to
give adequate attention to further development of each individual
product because of the energy we had to devote to the
establishment of expanded production lines. I cannot, therefore,
say that the second half produced the results we had hoped for.
In the Information Technology field, the trend toward higher
performance in the end products which use Hoya components
continued, and we were able to achieve good results by
leveraging Hoya’s technological strengths. However, while overall
results were good, some sectors faced an extremely competitive
environment and there were arenas in which the battle was very
intense. The Eye Care business, which handles general consumer
goods, achieved steady growth in profit thanks to strategies
designed to match the circumstances in each market as well as
our commitment to offering high-value-added products
and services.
We are managing Hoya’s business portfolio to ensure that the
two fields of Information Technology and Eye Care—each of
which possesses very different characteristics—work together in
a well-balanced way to meet the needs of the times, thus
supporting the overall growth of the Hoya Group. This year gave
us opportunity to renew our appreciation of this balance.
Information Technology
Net sales in the Electro-Optics division grew 15.1% over the
previous year, and operating income rose 7.0%. Demand for digital
consumer electronic products remained strong, and the
investments in increased production we made to respond
produced good results.
As devices continued to shrink in the semiconductor industry,
it led to growth in sales of Hoya’s mask blanks, which are used in
semiconductor production. Hoya’s mask blanks command a
strong share of the global market, thanks to our ability to respond
to the needs of semiconductor manufacturers operating at the
leading edge of technological development by supplying
high-precision products. Our strength in this area grew even more
prominent in the fiscal year under review, with high-end products
accounting for a higher proportion of sales and driving growth. In
the area of photomasks for semiconductor manufacturing, we
have been making considerable investments in cutting-edge
technologies in the field of production development in recent
years. Our photomask products have been well received by
clients, and sales have exceeded expectations. The success of
our mask blank and photomask businesses is the result of how
we leverage the strengths of our proprietary technologies in
leading-edge fields to meet the high expectations of our
customers. I can say without reservation that this strategy has
been the right one.
In the market for Hoya’s glass disks for hard disk drives,
demand for notebook computers kept growing around the globe.