Pentax 2010 Annual Report Download - page 3

In the Eye Care business, sales in the Vision Care Division declined 6.4%, to ¥103,625 million, but operating income
increased by 2.5% year on year, to ¥22,350 million. Sales in the Health Care Division, meanwhile, rose 8.1% to
¥54,012 million, and operating income expanded 6.9% year on year, to ¥12,336 million.
Sales in Pentax fell 13.1% year on year, to ¥106,150 million, but the unit posted an operating profit of ¥2,768 million,
following an operating loss in fiscal 2009.
Portfolio Management Aimed at Perpetuating Growth
Since Hoya was founded in 1941, as Japan´s first specialized manufacturer of optical glass products, the Company has
focused its efforts on developing businesses in its area of core competence – optical technology. The Company has
expanded steadily, and now operates businesses in a variety of related fields, including electronics, photonics, eye care
and health care.
However, the Company´s growth has not been simply a haphazard diversification. Hoya´s management philosophy is
based on careful business portfolio management. Each of the business units overseen by the Hoya Group has a
specific role to play in contributing to the group´s overall growth and earnings performance. Though the characteristics
of each individual business may differ, we strive to maintain an effective balance among the parts, adjusting the portfolio
carefully to address changes in market needs and the conditions of the business environment. By managing its business
portfolio effectively, Hoya aims to achieve sustainable growth over the long term.
About ten years ago, Hoya´s portfolio of businesses could be divided into two roughly equal halves – the information
technology business and the eye care business. However, as the global market for digital electronics products
expanded, the information technology business steadily increased its contributions to overall sales and profits, and it has
now become the main engine of growth for the Hoya Group. Favorable market trends have supported the Company´s
growth, but we have steadily enhanced our competitive edge by developing optical technology to a level that few
competitors can match. This technology forms the basis for Hoya´s success in generating high profitability.
The unprecedented financial crisis which struck in fiscal 2008 triggered structural changes in many industries and
consumer markets, and accelerated other global changes such as the growing importance of emerging industrialized
countries. It also had major implications for the economic growth that has been driven by the global shift to digital
technology.
To address these changes, Hoya is reappraising its business portfolio. In the Information Technology business, we
intend to continue focusing on the optical technology that has always been Hoya´s greatest strength, seeking to maintain
a competitive edge in existing businesses and thus generating a steady flow of earnings. However, we also plan to
expand our focus over the next decade and seek to accelerate growth in the Company´s other business segments – eye
care, health care and medical equipment. Hoya already has a long history of success in these businesses. We will seek
to generate growth in industrialized countries, where the average age of the population is rising, by providing higher
value-added products. At the same time, we will work to expand into markets in emerging economies.
Hoya will continue adjusting its business portfolio on the basis of long-term strategies that aim to perpetuate company
growth.
Outlook for the Future
The specific direction of Hoya´s business portfolio management will be based on the trends we anticipate in our major
markets. Although in the Electro-Optics field, many manufactures might appear to have suspended technological
developments during fiscal 2010, there has been a great deal of technological advancement behind the scene. Hoya is
also preparing to implement its advances, timing the launch of new technologies to match market needs. Meanwhile,
emerging economies are taking a more prominent role in the electronics industry in every respect, from production to
the final consumer markets for the products. By cooperating closely with manufacturers in these countries, Hoya
intends to establish an even stronger global presence. From a long-term perspective, the expanding volume of
information that is generated and demanded by today´s information technology products will make our optical
technologies increasingly vital to the processing, storage and transmission of information. This trend could open up
entirely new fields of business for Hoya.
In the Vision Care business, the market is steadily polarizing into two major formats – independent store channels and
major eyeglass chains. We intend to refine our business model and pursue a two-channel strategy, in an effort to satisfy
both of these retail customers.
The Eye City business, which operates a chain of contact lens specialty stores, is expanding steadily in Japan with the
opening of new stores. However, in order to derive the maximum benefits from this chain store strategy, Hoya intends to
accelerate the pace of new store openings and thereby increase market share. Our intraocular lens business, which
provides artificial lenses for cataract surgery, received a boost in August 2009 when the FDA approved these lenses for
sale in the US. This will allow us to move forward with a global expansion strategy. We are now on the same footing as
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