We are developing new businesses, a key management issue for us, through R&D that extends across the boundaries between businesses, and through M&A activity based on a wide-ranging perspective. In this way, we are building a business portfolio that will generate new growth for the Company.

Eiichiro Ikeda Director, Representative Executive Officer, President & CEO

Could you tell us how you feel about being appointed CEO, and could you also outline your career to date, and your key achievements? In particular, what do you think were the reasons you were selected as the new CEO?

I had a vague feeling that, if a new CEO was appointed, it would probably be someone from outside the Company, rather than being an internal appointment, so to be honest, when the Nomination Committee got in touch with me I was very surprised.

I majored in Chemistry in university, and when I joined HOYA in April 1992 after graduating, I worked as a process engineer at a department involved in manufacturing magnetic recording media, as part of the Memory Disk (MD) business. In 2010, I was appointed as the head of the business, but it just so happened that at that time this business was sold off to one of our customers. This was the first time that I had been involved in a large-scale business transfer, but we managed to complete it successfully. In September 2010, I was appointed head of the Optical Lens SBU. I realized a substantial improvement in its profitability, which contributed to an improvement in the profitability of the Information Technology business domain as a whole. These achievements were recognized by the Company, and in 2013 I was appointed COO of the Information Technology business. However, at that time the Information Technology business domain was positioned as a cash cow supporting the Life Care business domain, which was seen as a business with high growth potential. As a result, investment in the Information Technology business domain was limited, which had led to a steady decline in sales. Today, the Information Technology business domain is a key pillar of growth for the Company, but back then many people, both outside and within the Company, were dubious about the growth potential of products such as glass substrate for hard disks intended for use with nearline storage, and mask blanks for use in extreme ultraviolet (EUV) lithography. Despite these circumstances, by carefully selecting which business areas to focus on, after taking over as COO I was able to get the Information Technology business back on a path of raising sales revenue and succeeded in improving its profitability. Starting in 2018, I had the experience of running the contact lens business for around two years, which was the first time I had worked in the Life Care business domain, and beginning in 2021 I was simultaneously in charge of research and development at the endoscope business. In this way, rather than just seeing things from the viewpoint of an executive officer, I have had an experience in a wide range of areas within the HOYA Group from a frontline perspective. I think that this wide-ranging experience and record of achievement were viewed positively by the Nomination Committee.

What do you see as being the CEO’s most important role? Also, could you explain what things you will keep the same and what you want to change? And what do you see as being the main management issues for HOYA?

Over the course of its long history, which extends back 80 years, HOYA has focused its management resources on those businesses where it is competitive, while withdrawing from or selling off businesses where it is uncompetitive, and in this way has been able to keep strengthening its business portfolio. This effective business portfolio management has been an important strength for HOYA and going forward I consider business portfolio management to be the most important role for HOYA’s CEO. In particular, I see the biggest aspect of my mission as being to add businesses to HOYA’s portfolio that can serve as drivers of growth over the next 10–20 years. Within the HOYA Group, basically each business operates with a high degree of autonomy but going forward we will need to generate new technologies and products that no individual business can create on its own, and we will be putting in place an R&D framework that extends across the boundaries between businesses. With regard to M&A, up until now we have tended to focus mainly on the Life Care business domain, but in the future, we will be expanding our perspective to also include the Information Technology business domain so that we can identify new business areas with strong growth potential. We will be paying particular attention to semiconductor-related areas, where we can expect to create synergy with our existing business areas.

Since March 2022, we have been making efforts to strengthen our business development, under the direction of Chief Business Development Officer (CBDO) Augustine Yee, who is also HOYA’s Chief Legal Officer (CLO). Whereas in the past the Life Care business domain was positioned as the key growth driver, and the Information Technology business domain was positioned as the cash cow, going forward, we will consider the positioning of each individual business and product without regard for which segment it belongs to, and we will allocate management resources to those items which have higher growth potential. It should be noted that our approach to decision-making, whereby decisions are made based on numerical data in relation to profitability and return on investment, will remain unchanged in the future.

Currently, another important management issue for HOYA besides developing businesses with long-term growth potential is the strengthening of environmental, social, and corporate governance (ESG). We have positioned ESG initiatives as being of great importance in relation to the HOYA Group’s medium- and long-term purpose. In March 2022, we established a new ESG Promotion Office under the Chief Sustainability (ESG) Officer (CSO), and we are aiming to strengthen our ESG initiatives. Taking the new framework as a basis, going forward, after having set objectives corresponding to the ESG materiality that was specified in September 2021, we will be proceeding with concrete measures in this area.

For more information about ESG, please read the message from Tomoko Nakagawa, Executive Officer and Chief Sustainability (ESG) Officer.

With the negative impact on economic activity and the supply chain disruption that have accompanied the continuing COVID-19 pandemic, together with rising raw materials costs and logistics expenses, Russia’s aggression in Ukraine, etc., the level of uncertainty in the global business environment is increasing. What is your thinking on risk management for HOYA going forward?

The real value of business portfolio management lies in the diversification of risk. As the regional breakdown of sales, customer profiles, sensitivity to the business climate and to exchange rate fluctuations, etc. all vary from business to business, effective portfolio management can make it possible to achieve resilience in relation to various types of uncertainty. For example, during the global financial crisis of 2008 that followed the bankruptcy of Lehman Brothers, although HOYA’s Information Technology business domain was seriously affected by the crisis, sales performance in the Life Care business domain, which is less vulnerable to fluctuations in the business climate, remained strong. By contrast, when the COVID-19 pandemic began to spread around the world, the Life Care business domain was heavily affected because of factors such as new regulations imposed in various countries, but the negative impact on the Information Technology business domain was limited, and this contributed toward stability of the HOYA Group as a whole. Going forward, although we can expect to see continued uncertainty due to inflation caused by COVID-19 and by geopolitical factors, and due to supply chain disruption, we will continue to review our existing systems on an ongoing basis and make changes as necessary. With regard to compliance risk, we have put in place a Group-wide system under the direction of the Chief Compliance Officer, who is based in the HOYA Group’s head office, and we are implementing more effective compliance risk management.

Could you tell us about your approach to returning profits to shareholders, including share buybacks? Also, do you have a message that you would like to give, in terms of your vision as the new CEO, or areas that you want to focus on?

Regarding cash allocation, our policy of prioritizing investment in areas with growth potential, and returning surplus profits to shareholders, remains unchanged. Our approach of thinking in terms of the total amount of profits to be returned to shareholders, rather than treating share buybacks and dividends separately, also remains the same. In the fiscal year ended March 31, 2022, we increased the year-end dividend from 45 yen to 60 yen, and also implemented share buybacks totaling over 65 billion yen, so the total shareholder return (TSR) came to approximately 100 billion yen.

As I pointed out just now, I see the most important aspect of my mission as HOYA’s CEO as being business portfolio management. My intention is that, while promoting the development and acquisition of businesses that can serve as drivers of growth over the long term, we will adjust as necessary with regard to businesses and products where there are doubts about growth potential, and in this way build a business portfolio that can contribute toward the sustainable growth of the HOYA Group.

I am determined that, going forward, we will continue to attach great importance to the HOYA philosophy of emphasizing profitability and making judgments based on objective numerical data, and that we will also manage the Company in a way that returns to the essential aspects of HOYA’s purpose. That is to say, by providing solutions relating to people’s eyesight and other aspects of their health, and by providing solutions that support the information technology that is vital to contemporary social and economic activity, we will enhance the quality of life (QOL) of people throughout the world. HOYA celebrated the 80th anniversary of its founding in 2021. Over the next 20 years, as we move toward our 100th anniversary, I hope that we will create new markets and pursue innovation with passionate enthusiasm, so as to enhance the QOL of people of all kinds throughout the world and help create a better tomorrow.