Hoya Vision Care is launching a number of new initiatives overseas, especially in emerging markets. Just a few days ago it took a 25 percent ownership stake in Optotal, a Brazilian company that services more than 100 optical laboratories in the country. The investment will be used as a platform to set up a laboratory in the country on a joint venture basis for high-index free form lenses and anti-reflection coatings. The rest of South America should be serviced from a new subsidiary in Argentina, due to be established in July.
The Japanese company set up an Indian laboratory in Mumbai last year, and with its production now approaching full capacity, Hoya is considering setting up other labs in Delhi, Bangalore and Calcutta within the next few years. A Hoya laboratory is going to come on steam in Poland in mid-2009 and a joint venture in Moscow is under discussion for a possible start-up at the end of 2009.
Hoya is also active in more mature markets. A small acquisition should be finalized in Europe next month. Free-form polycarbonate lenses are going to be introduced by the company next October in the USA, where this material is most strongly demanded, followed by Europe in 2009.
Meanwhile, in an unusual development for the Japanese company, its sales of vision care products declined by 6.5 percent to 30.9 billion yen (€199.6m-$297.1m) in the fourth quarter of its financial year, ended last March 31. Citing aggressive pricing by low-end competitors and others, Hoya Corp. said it experienced a difficult situation in Europe and North America in this segment.
Sales in Japan fell in part because of a streamlining process in the area of prescription frames. The overall sales decline was partly due to the weakness of the U.S. dollar and the British pound in relation to the yen. Specifically, division sales in other parts of Asia grew by 5.8 percent in yen and by 10 percent in local currencies. European sales were down by 1.4 percent in yen and up by 1.2 percent on a currency-neutral basis. U.S. sales fell by 16.2 percent in yen and by 4.6 percent in dollars.
While domestic vision care sales continued to slide in a market described as being stagnant, falling by 12.6 percent to 26.3 percent of the turnover, total sales in other countries dropped by 4.2 percent in yen.
Anyhow, the overall sales decline in the segment apparently affected its operating margin, which dropped to 13.9 percent of sales from 17.4 percent in the same quarter of 2006.
Hoya's sales of health care products, which included contact lenses and intraocular devices, rose by 10.0 percent to ¥1.5 billion (€9.2m-$14.3m), but their operating margin fell to 18.7 percent from 24.6 percent. Overall, the group posted a 36.5 percent increase in net sales to ¥135.8 billion (€835.6m-$1,296.9m), largely due to its acquisition of Pentax. Operating income was down by 26.8 percent to 13.3 percent of sales, partly due to the effect of the difficult economy situation on its large electro-optics division, and net income decreased by 14.2 percent to ¥16.3 billion (€100.3m-$155.7m).
For the full year, group turnover grew by 23.5 percent to ¥481.6 billion (€2,963.5m-$4,599.3m), compared with the previous year. Operating income fell by 11.3 percent to ¥95.0 billion (€584.6m-$907.2m), and net income dropped by 7.6 percent to ¥77.0 billion (€473.8m-$735.3m). Net sales of vision care products went up to ¥126.3 billion (€777.2m-$1,206.2m), an increase of 5.5 percent, but the operating margin declined to 16.4 percent from 17.7 percent. In the vision care segment, sales grew by 13.0 percent to ¥46.1 billion (€283.7m-$440.3m) and the operating margin fell only slightly to 22.0 percent.
Separately, the group has announced the appointment of a new chief operating officer, Hiroshi Hamada, who has worked for several U.S. and Japanese companies. He ran Dell Japan from August 2000 and then, in May 2006, he became managing partner of a company called Revamp Corporation. Hoya's board of directors has decided to propose they give its managers and employees the possibility to subscribe to warrants for stock options involving up to 1.2 million new shares, to be exercised between October 2009 and September 2018.