Hoya Corporation reported a 12 percent year-on-year increase in group revenues for the last quarter of its 2020/21 financial year ended on March 31, 2021, or an 11 percent growth in constant currencies. The quarterly performance was driven by a solid growth in the group’s IT department, but the health care unit also grew significantly, except in Japan.

Q4 sales in the Health Care segment, which includes eyeglasses and contact lenses, grew by 9 percent year-on-year to 70.5 billion yen (€535.6m-$643.9m) in reported terms, and by 8 percent on a comparable currency basis. Currency-neutral quarterly sales of eyeglasses’ lenses increased by 8 percent to an estimated ¥49.6 billion (€376.8m-$453.0m) as compared to the same period in 2020, while sales of contact lenses went up by 6 percent to ¥22.3 billion (€169.4m-$203.7m) for the same period.

Noting that Covid-19 had already had an impact on revenues in March 2020, the company said that these positive figures should be taken cautiously and seen as signs of the market slowly returning to its normal level.

Further commenting on its quarterly results in the lenses’ segment, Hoya said that the positive sales’ trend observed in the U.S., Europe, India, Brazil and China had been partly offset by shrinking domestic revenues. Hiroshi Suzuki, CEO of the company, noted that, contrary to the situation in the U.S. and Europe, the negative results in Japan were mostly due to declining sales at independent optical stores, while the chain stores seemed to recover more quickly.

Suzuki also mentioned that, in the perspective of the acquisition of GrandVision by EssilorLuxottica, Hoya was in the process of progressively reducing its supply of lenses to the Dutch retail group, on the assumption that the company would lose this business eventually. In spite of this reduction, Suzuki said that Hoya was performing well in Europe and, estimating that the group was not gaining market shares in the region, he concluded that these markets were booming.

On the longer term, Hoya said that it would focus on lenses related to myopia management as myopia is becoming a global concern. As previously reported, the company has now launched its MiYoSmart lenses in all major European markets and has equipped more than 500,000 children globally so far.

For its contact lenses’ business, which mostly consists of the Eyecity retail chain in Japan, the 6 percent year-on-year growth was mainly driven by an improved product mix, the acquisition of a regional retail chain with 14 stores, and a growing market share. However, these positive effects were partially offset by an overall 10 percent drop in contact lenses’ usage due to homeworking trend, and by the impact of the Japanese malls’ closure in response to the Covid-19 crisis.

Hoya - Key figures - Quarter ended March 31 - ¥ billion
  FY 2020/21 FY 2019/20 % Change
Life Care segment   
Revenue 95.3 88.4 7.8
Pretax 14.8 9.0 64.4
Operating Margin 19.9% 16.3% +3.6pp
Total Group   
Revenue 151.4 135.1 12.1
Pretax 41.3 27.7 49.1
Operating Margin 28.6% 24.1% +4.5pp

Adding revenues from the medical segment, which includes intra-ocular lenses and endoscopes, Hoya’s total Life Care segment sales reached ¥95.3 billion (€724.1m-$870.4m) in Q4, representing a 6 percent year-on-year increase in constant currencies. The group reported total Q4 revenues of ¥151.4 billion (€1.15bn-$1.38bn), up by 11 percent in constant currencies as compared to the previous year.

At group level, quarterly operating margin gained 4.5 percentage points as compared to Q4 in 2019/20, reaching 28.6 percent in reported terms, fueled by higher sales in the very profitable IT business unit. On the same basis, operating margin of the Life Care division increased by 3.6 percentage points to 19.9 percent in the quarter.

For the full year, Hoya reported total group revenues of ¥547.9 billion (€4.16bn-$5.00bn), or 5 percent less than in the previous fiscal year. Operating profit increased by 6 percent year-on-year to ¥164.0 billion (€1.25bn-$1.50bn), resulting in an annual operating margin of 29.9 percent, up 3.2 percentage points from a year before.

Hoya - Key figures - Year ended March 31 - ¥ billion
  FY 2020/21 FY 2019/20 % Change
Life Care segment   
Revenue 341.8 375.0 -8.9
Pretax 63.5 62.2 2.1
Operating Margin 20.8% 18.7% +2.1pp
Total Group   
Revenue 547.9 576.5 -5.0
Pretax 159.2 147.3 8.1
Operating Margin 29.9% 26.8% +3.1pp

Annual revenues in the Life Care segment declined by 9 percent as compared to 2019/20 to ¥341.8 billion (€2.60bn-$3.12bn) while the division’s operating margin gained 2.1 percentage points to reach 20.8 percent for the year. Except for a drop below the 10 percent mark in the quarter between April and June 2020, the group has maintained an operating margin at around 20 percent or more in its Life Care segment during the last financial year.

Hoya issued a cautious outlook for the 2021/22 financial year because of the unpredictable evolution of the Covid-19 pandemic. The company said that it was aiming to return to pre-pandemic levels for its Life Care business, thanks in particular to the progress of vaccination programs in the U.S. and in Europe, both regions accounting for the majority of the group’s revenues in this segment. On the other hand, the Japanese-based contact lenses’ business is expected to keep struggling this year.