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00:01 [Foreign Language] An interpretation of the earnings call. Please select English from the interpretation button on the bottom of the screen.

[Foreign Language] 00:36 Since it is time, we like to start HOYA Corporation’s fiscal year 2021 or March 2022’s Third Quarter Earnings Presentation. [Operator Instructions] The participants from HOYA Corporation today is CTO, Mr.

Ikeda Eiichiro; and Mr. Hirooka Ryo, CFO; our CEO Mr.

Hiroshi Suzuki is absent. 01:00 As for the agenda of today, Mr.

Ikeda and I myself would touch up of the succession of the CEO and then Mr. Hirooka will explain the third quarter results, as well as the outline of the major businesses.

And we will take questions and answers and we will end at 45 past 3. And those who are participating via PCs, please look at the materials shown on the screen.

01:31 Then, I would like to talk about the CEO succession, which has already been announced on the 22nd of December. You may know about this, but let us explain once again.

Mr. Hiroshi Suzuki has assumed CEO in the year 2000 and for more than 20 years he has been leading the growth of our company, but now he is in his 60s and he said, he want to spend more time with his family.

02:00 And about one year ago, he approached the nomination committee and agreed to step down when the business stabilizes from the COVID impact. And our mission committee, which has been discussing the succession plan for some time, began selecting specific candidates.

02:28 Our company is a company with nomination committee and other committees, which separates executive functions and supervision, and this has been led by the nomination committee. And as a result of the discussion, Mr.

Ikeda who has a proven track record and is well versed in technological development, which is a source of growth has been selected. Mr.

Ikeda will make a self-introduction regarding his background. Mr.

Ikeda, the floor is yours.

03:12 As the next CEO, I have been appointed as the next CEO by the nomination committee. My name is Ikeda.

And this shows the carrier in – I entered the company in 1992 April, and I wasn't – my background is a chemistry engineer. 03:39 And I first was in the Memory Disk division, not the Substrates, but the Magnetic Record Media division was where I was as a process engineer.

And within the media business, in 2010 I became the head of this division and in 2010 September, I next became the head of HOYA Optical Lens represented by TMO, and then in 2013, I became the CEO, Executive Officer and COO in-charge of information technology and then when I was engaged in Memory Disk I became the head, but at that time we sold the business to Western Digital and completed the business. 04:49 After that when I was in the Optical Lens business, the business was not profitable.

However, after I assumed the position, I was able to turn around the profitability of the business. You may know that in 2011, the IT profitability has shown great improvement.

And I believe that I was able to contribute from the Optical Business. And when I became the CEO of IT, from around 2010 IT business was positioned as a cash cow in its business.

05:35 And given that backdrop, until 2013, sales was not very growing much, but we were more focused on profitability. And after I assume the position in 2013, I proceeded with selection in concentration and focused on putting the limited resource to a growing business.

And as you know in 2013, we showed a very good improvement in profitability, and at the same time profitability improved as being a cash cow of the company and the driver at that time was the 3.5-inch hard disk substrate for new lines and [mass] [ph] plans for UV, which is driving the growth of HOYA today. 06:37 After that, as an executive officer, I had assumed dual responsibility.

As you can see in 2018, for the first time, I became responsible for HOYA Eye Care for two years, which was the first time I was engaged in Life Care business, and also [pent-up business] [ph], endoscope business development head is also – was one of my responsibilities through these experiences. 07:09 Not only as an executive officer, but in the actual business, I was able to cover a wide portfolio of a HOYA business at the Gemba side as well.

And right now, however, I am just a CTO, a dedicated CTO, and was selected the next CEO? That is the background.

That is all from myself. Thank you very much.

07:40 Next, from Mr. Hirooka.

He will talk about the third quarter results.

07:48 I'm Hirooka. Then, I would like to talk about the results of the third quarter earnings.

First, the highlight of the results. There are four points.

One is that we were able to achieve the record high revenue, as well as operating profit on a – that was a record high on a quarterly basis. And secondly, the Life Care business is above the third quarter of two years ago pre-COVID.

In the previous quarter, we explained that we are about to recover to the pre-COVID. However, in the third quarter, we are now exceeding the pre-COVID level.

So, that is a situation of our Life Care business. 08:40 And third, we have continued this trend from the first half.

Information technology business continues to the sales and profit of the company. To look at each business.

All businesses have achieved double-digit growth. And third quarter [substrates] [ph] maintains momentum as well.

And lastly, in – we have a lot – we will launch a share buyback program that has been resolved at the Board Meeting up to [60 billion yen] [ph]. 09:24 Next page please.

And these are the figures for the overall company. Revenue 171.3 billion yen, compared to last year that is plus 17%.

On a currency neutral basis, it is plus 11%. Pretax profit is 51.9 billion that is a 13% year-on-year.

On a constant currency basis, plus 9%. 09:56 Net profit, I would like to skip the net profit and go on to operating profit.

This is a reference number. This is 53.5 billion yen, 16% up from last year.

And in the far right you see a quarter-on-quarter number, figures compared to the second quarter or increase or decrease compared to the last quarter. 10:22 Revenue plus 5% and operating profit plus 9% quarter-on-quarter.

So, this second quarter was a record high, but this time, we were able to exceed that both in terms of revenue, as well as operating profit. As for pretax profit, that is minus 4%.

It is below the second quarter as you can see at the note. The ForEx loss in the second quarter of ForEx gain was a 3 billion yen, whereas in, excuse me in the second quarter.

11:00 However, in the third quarter, ForEx loss is 1.9 billion yen. So, in net 4.9 billion yen of ForEx loss has resulted in this result of the pretax profit.

So, although there was a record high operating profit, pretax profit was compared to the second quarter is a slight negative. 11:26 Next page please?

So, I would like to compare each segment. First, as for Life Care segment, revenue and profit.

Excess revenue was 105.5 billion, that is up 12%, compared to the previous year and ForEx neutral plus 7%. As for profit, profit are also increasing.

I talked about the pre-COVID number, but it's a plus 7%, compared to pre-COVID still. 12:04 In third quarter of 2019, contact lens retail sales, there was a [back clash] [ph] from the increase in consumption tax for contact lenses and taking that into – or exclude that impact, the revenue growth would be 7%.

12:26 Next page please. I would like to cover each product in the Life Care segment.

First, as for medical, sales was at 29.1 billion, compared to last year [plus 3.7 billion] [ph]. What you see here is inclusive of a currency year-on-year of each business and comparison to 2019 is the currency neutral basis.

12:59 First as for endoscopes, compared to last year it was plus 9% in compared to fiscal year 2019 was minus 1%. And in this segment.

This is the only segment below 2019, but if you look at the market, it's very good. We have still been able to take orders.

And there are a lot of orders being received. And as explained in the first half as well is written here.

13:34 The semiconductor procurement used for processor is what we are struggling with and because of that we make and ship and make can ship. The market as well as the order basis is – the sales is brisk.

However, shipment is limited because of the reason that explains. So, in the third quarter, we are still on a recovery phase when it comes to revenues.

13:59 However, in the third quarter, more than we had expected procurement was possible to growing sales. We would like to continue to, well, we – things are still uncertain.

However, because we have been able to take orders, we would like to ship as we manufacture products. 14:24 Next, IOL, intraocular lenses, compared to last year, we grew 6% and compared to fiscal 2019 third quarter we were able to exceed plus 12%.

If you look at the market, Japan, it’s sales has started to recover. It is starting to recover, however, have not recovered back to the pre-COVID level.

After the state of emergency has been released, well there are more recoveries if you look at individual countries, but hospitals are still careful. 15:09 So, there is a moderate recovery if you would when it comes to [treasury] [ph].

Intraocular lenses in Japanese market is rather high. The Japanese market – the Japanese share is rather high.

So, however, Europe are driving, are growing and is contributing to the overall growth. So, all-in-all this business has grown more than the fiscal 2019 level.

Next, as for healthcare related business, sales was 76.4 billion yen, compared to last year it was plus 7.3 billion. Eyeglass lenses grew plus 5%, compared to 2019 plus 8%.

16:06 Again, on an actual basis has been above the pre-COVID level, especially what MiYOSMART is gaining momentum, which is growing in China especially, and also in Europe. Well, the situation COVID differ [Technical Difficulty] work has exceeded the previous year for the first time.

So, although there are still some uncertainties, Japan [Technical Difficulty] 17:01 [Foreign Language]