Life Care Segment

Impact of COVID-19

  • Since the outbreak of the COVID-19 pandemic, the demand for products of the Life Care segment has temporarily decreased due to such factors as restrictions on economic activities. However, normality is expected to be restored in its businesses along with the progress in vaccinations and the resumption of economic activities.
  • The shift of eyeglass lens and contact lens retailers to online sales channels is expected to be gradual rather than rapid, due to restrictions by medical regulations in each country, among others. No medium- to long-term changes in industrial structure have been observed, so there are no changes in the growth scenario of HOYA's Life Care segment.
Customer demand Changes in the market
structure due to COVID-19
Current status Future prospect
Eyeglass
lenses
Demand is on a recovery trend, despite variations among regions/countries depending on the pace of progress in vaccinations and the resumption of economic activities.
Demand is expected to undergo a full-fledged recovery along with the progress in vaccinations and the resumption of economic activities. None in particular
Contact
lenses
Demand temporarily decreased due to the reduction in the frequency of contact lens use associated with fewer opportunities to go out. Amid the state of emergency declaration, some stores have been closed or shortened their operating hours; in response, online sales (targeted at Eyecity members) are being promoted. Demand is expected to recover from the second half of the fiscal year ending March 31, 2022 (fiscal 2021) onward, as opportunities to go out increase along with the progress in vaccinations. None in particular
Acceleration of the shift to online sales channels and other such developments have not been observed; in Japan, contact lens specialty stores still serve as the biggest sales channel.
Endoscopes Hospitals’ capital investment environment seems to be recovering gradually. As inspections that had been postponed return to normal in terms of the number of cases, hospitals’ capital investments are expected to resume, leading to a recovery in demand. None in particular with respect to the main market, i.e., existing reusable endoscopes. The market of disposable endoscopes appears to be expanding on the back of COVID-19.
Intraocular
lenses
Demand is on a recovery trend, despite variations among regions/countries depending on the pace of progress in vaccinations. Demand is expected to recover along with the progress in vaccinations, especially among patients comprised of the elderly. Pent-up demand is expected to arise temporarily for cataract surgery that had been postponed. None in particular

Health Care

(Information on HOYA’s products may be found in the “Business Domains” section of its website. Please refer to this section for further information.)

Eyeglass Lenses

Business Overview

HOYA conducts research and development, manufacturing, and sales of eyeglass lenses.

Our product lineup includes single-vision lenses that possess a single corrective function for each lens, as well as progressive lenses (varifocal lenses) that offer wide visual fields and a seamless transition between near, intermediate, and far distances in a single lens.

By geographical region, a significant amount of sales, approximately 87%, takes place in markets outside Japan.

Supply Chain

Lens material manufacturer→Lens manufacturer(HOYA)→Optician

Market Conditions

To curb the rapid spread of COVID-19, many social and economic activities faced restrictions around the world. Curfews, temporary closures and social distancing measures also affected eye care professionals around the globe herewith greatly impacted our sales. After the first quarter of fiscal 2020, however, a recovery trend set in, and we are expecting to turn this into growth as vaccination spreads and control over the spread of the virus is extended, subject to the economic activities across countries.

External research indicates that most countries will return to their pre-COVID-19 level by 2022 calendar year. And from there, we expect the eyeglass lenses business will return to an organic growth at the low to mid single digit rate from a mid to long term perspective, driven by an increasing aging population worldwide, enhanced purchasing power owing to the economic growth of emerging economies, increased awareness of eye health, and longer hours using digital devices.

The contribution to global growth varies per region. North America, Europe, and Japan being the mature markets will continue to play a significant role in the overall market; while faster growth is expected from emerging markets from increased availability of vision protection products and growing middle class populations, such as in the LATAM and APAC regions.

HOYA Position and Market Share

HOYA stands at the No. 2 position in the industry, and, in addition to organic growth, has expanded its share of the market through M&A initiatives, including the 2013 acquisition of SEIKO’s eyeglass lens unit, and U.S.-based Performance Optics, LLC in 2017.

HOYA Outlook

Eyeglass lens products account for over 50% of Life Care business sales, and are a growth driver for Life Care business expansion.

We are strengthening sales activities in Asia, with a focus on China, as well as in several growth markets on the South American continent. Additionally, in the United States, we continue to focus on expanding sales to key accounts and chain stores, on top of the strongly established presence amongst independent opticians. With these opportunities and focus areas, we aim to achieve higher than market growth. On top of that, we will also continue to pursue M&A opportunities to boost growth.

On the production side, to respond to the increasing demand, we completed the construction of our second plant in Vietnam and started production in July 2020.

Sales by Region
(FY2020)

Market Share (FY2019)

[HOYA estimate on a value basis]

The rapid progression of myopia is becoming a global health challenge. An estimated 5 billion people, or half of the global population, could be affected by short-sightedness by 2050. Together with the Hong Kong Polytechnic University, HOYA developed “MiYOSMART”; an innovative spectacle lens for myopia control. Commercialization of the product started in 2018. MiYOSMART is currently available in several markets, mainly in Asia and Europe, and will be expanded in the future after obtaining approval.
Note: Not approved in Japan and the U.S. as of July 2021.

Number of Myopia Population

MiYOSMART

Source: Holden B. A. et al. Global Prevalence of Myopia and High Myopia and Temporal Trends from 2000 through 2050. Ophthalmology. 2016 May;123(5):1036-1042

Contact Lenses

Business Overview

In Japan, we are expanding Eyecity outlets, HOYA’s contact lens specialty retail store chain.

At Eyecity, we offer consulting and sales, making product recommendations ideally suited to the needs of individual customers, and, leveraging our strength, we provide a wide lineup sourced from major manufacturers throughout the world.

Stores are established in convenient locations, in close proximity to train stations, inside shopping centers, and other areas.

Market Conditions

The contact lens market in Japan, which had been valued at approximately 400 billion yen, temporarily shrank in the COVID-19-impacted fiscal 2020, due to the reduction in the frequency of contact lens use as a result of such factors as the increase in Work From Home (WFH) and homeschooling opportunities and the decrease in opportunities to go out. However, we expect the medium/long-term expansionary trend of contract lens demand to remain unchanged going forward, given the increasing percentage of nearsightedness among the younger generation, and the rising age of contact lens users due to the growing prevalence of multifocal contact lenses. Furthermore, market expansion—albeit slight—is expected to continue going forward, due to such factors as the rise in the average unit sales price stemming from the increase in sales of high value-added lenses.

By sales channel, sales through the contact lens specialty store channel—which accounts for the largest share of total value—are expected to continue to grow steadily, driven by ongoing share expansion.

Sales Composition Ratio
by Sales Channel (FY2020)

HOYA Market Share at Contact Lens Specialty Stores
[HOYA estimate on a value basis]

HOYA Position and Market Share

HOYA holds the top share in the retail channel for sales made through brick-and-mortar stores.

On top of sales growth at existing stores based on, among others, the promotion of high value-added products, we are working to expand sales by opening new stores, including M&A. We also provide an online sales service in the form of “Hoshii Toki Bin” (meaning on-demand delivery) to adapt to Internet shopping, which has been expanding in recent years. The service has been used by many people especially during the COVID-19 pandemic.

Sales per Customer (Presented as an index with Mar. 2015 as 100)
Number of Eyecity Stores in Japan

HOYA Outlook

Going forward, HOYA will seek to achieve ongoing sales growth at a rate of around 5% through the growth of sales at existing stores and the opening of new stores, including M&A.

For new stores, HOYA will conduct detailed analyses of an area’s contact lens-wearing population, market growth rate, and competitive situation, and will establish stores mainly in city centers, regional cities, and large shopping centers. We will also strive to increase efficiency by relocating stores within the same marketing area as appropriate. In addition, we will work to accelerate growth by actively exploiting M&A opportunities targeting contact lens specialty stores that have a strong position in their respective local markets.

Medical

(Information on HOYA’s products may be found in the “Business Domains” section of its website. Please refer to this section for further information.)

Medical Endoscopes

Business Overview

In this field, HOYA conducts research and development, manufacturing, and sales of medical endoscopes used in diagnosis and treatments of disorders associated with the ear, nose, and throat, the respiratory tract, and the digestive system.

The endoscope field comprises scopes and processors.

Supply Chain

Component manufacturer→PENTAX (HOYA) Endoscope manufacturer→Customer: Medical institution, joint purchasing organization, agency

Sales by Region

By geographical region, overseas sales account for a large portion of total sales.

Market Conditions

Medical expenses are increasing worldwide in line with the aging of society.
To keep medical expenses in check, governments in countries across the globe are promoting the early detection of disease and minimally invasive medical procedures.
In particular, needs for the latter are increasing as part of the trend of reducing invasive medical treatment. As a result, demand for endoscopes is increasing as products to satisfy these needs.

The rate of growth is steady in the markets of developed countries and regions—Japan, the U.S., Europe, and others. However, in Asia, which is at a stage where endoscopes are becoming more prevalent, the growth rate continues to be high.
In the fiscal 2020, the impact of COVID-19 brought about changes in the business environment surrounding hospitals, resulting in the suppression of investments. However, in the medium to long term, we expect the global market to continue growing at a rate of around 5%. (HOYA estimate)

Sales by Region (FY2020)

Mainly in North America, customer transactions are increasing through a joint purchasing organization, and building a sales system that responds to this kind of change can lead to sales growth.

In relation to products, our first disposable bronchoscope "PENTAX Medical ONE Pulmo" obtained CE mark certification in Europe in May 2021. Although the presence of disposable endoscopes is not yet strong enough to replace conventional endoscopes at this stage, their presence is expected to grow in the medium to long term, so this is regarded as a stepping stone for us.

PENTAX Medical ONE Pulmo

HOYA Position and Market Share

With its strengths lying in high image quality, ultrasonic endoscopes and small-diameter endoscopes that strike a balance between image quality, exterior diameter, and channel size, HOYA is the second largest group in the industry.

HOYA Outlook

HOYA continues to secure stable earnings in Europe, which accounts for about 50% of total sales, and strives to achieve growth by boosting sales activities in APAC and the Americas.

While steadily engaging in initiatives targeted at products for gastrointestinal devices, the main battlefield in the flexible endoscope market, we will also seek product differentiation by further developing treatment instruments used in combination with endoscopes as well as disposable endoscopes for areas other than bronchial tubes.

Market Share (FY2020)

[HOYA estimate on a value basis]

In May 2021, we entered into an agreement with Jiangsu Vedkang Medical Science and Technology Co., Ltd (Vedkang) in China to establish a joint venture company to develop and manufacture treatment instruments for endoscopes. The new company will supply single-use treatment instruments for endoscopes developed and manufactured by Vedkang to markets worldwide through PENTAX Medical's sales networks.

Intraocular Lenses for Cataract Surgery

Business Overview

In this field, we perform research and development, manufacturing, and sales of intraocular lenses (IOLs) for cataract surgeries and ophthalmic medical devices.

With nearly 35 years of experience in designing and producing IOLs, HOYA Surgical Optics’ mission is to improve vision and quality of life for millions of people suffering from cataract.

Cataract is a condition that becomes more common as we age and is the largest cause of vision loss in people around the world. A cataract is treatable with surgery and it is one of the most performed surgical procedures in the world. A cataract surgery replaces the natural lens that has developed the cataract with a new clear intraocular lens (IOL).

The rich HOYA heritage and expertise in developing optical products and technologies coupled with the wealth of knowledge that we have accumulated in developing intraocular lenses and injectors makes us the provider of the world’s most trusted fully pre-loaded IOLs* and allowed us to gain market leadership in the fully pre-loaded IOL category worldwide.

* In a pre-loaded injector, the intraocular lens is pre-installed in the injector, supporting surgeons to perform safer and more reliable surgery.


Vivinex™

Supply Chain

Component manufacturer→HOYA Lens manufacturer→Customer: Ophthalmic surgeons, distributors, associated health care providers (ie, surgical nurses)

Sales by Region

By region, sales in Japan account for about half of total sales.

Market Conditions

In fiscal 2020, the number of cataract surgeries decreased due to the impact of COVID-19, resulting in a decline in revenue for this business. However, as the spread of COVID-19 subsides, surgeries that have been postponed will be performed and the business is expected to return to its growth scenario of pre-COVID-19.

The ophthalmology industry remains attractive, maintaining a growth rate of about 3%. The aging population, developing medical infrastructure in emerging markets, and increasing access to healthcare and advanced medical technologies are the main drivers of this growth. Growth in high-end products—such as extended depth of focus and multi-focal IOLs—are expected to driver further overall expansion in the market.

HOYA Position and Market Share

Driven by the flagship brand, Vivinex™, sales continue to grow at a pace that is above the market. Vivinex™ combines an IOL material which offers unprecedented clarity of vision with multiSert™, our proprietary 4-in-1 injector, which is designed to provide outstanding IOL delivery consistency.

HOYA is steadily increasing its market share and currently holds the No. 3 place in global terms.

Sales Composition of HOYA Surgical
Optics by Region (FY2020)
Market Share (FY2020)

[HOYA estimate on a value basis]

HOYA Outlook

We have further expanded our portfolio with the addition of a family of Trifocal IOLs. This has allowed us to enter the highly profitable segment of presbyopia correcting IOL market. HOYA offers a comprehensive solution to cover any customer need and expectation in the field of cataract surgery.

Furthermore, we will expand customer reach by bolstering the sales workforce in regions in which we already have sales bases and entering into new regions one by one, whether directly or indirectly (collaboration with sales agents), in pursuit of higher sales.

In China, where the market is expected to expand in the future, we established a joint venture company with our existing partner and distribution agent GeMax in May 2020, to further increase sales by steadily absorbing demand in China.

We will also continue to pursue synergies with Fritz Ruck (Germany) and Mid Labs (U.S.), which were acquired in 2019 and produce instruments used in cataract surgery, etc.