Hiroshi Suzuki, President and CEO
Ryo Hirooka, Executive Officer and CFO
Eiichiro Ikeda, Executive Officer and COO, Information Technology and Chief Technology Officer
Augustine Yee, Executive Officer, Chief Legal Officer and Head of Corporate Development and Affairs
NO. OF EMPLOYEES: 37,842 (total)
GLOBAL HEADQUARTERS: Shinjuku-ku, Tokyo, Japan
Nothing breeds success better than good timing.
Think about it: Would Facebook have grown into the planetary social media juggernaut it is today had it launched in 2015, replete with its current suite of features? Probably not. Though many factors contributed to Facebook’s success, timing arguably was the most critical.
The same tenet applies to countless other business success stories, most notably, Apple, Xynga, Google AdSense, Instagram, YouTube, Uber, LinkedIn, and Airbnb, the latter of which was famously passed over by various investors skeptical of the concept of short-term lodging rentals. “One of the reasons it [Airbnb] succeeded, aside from a good business model, a good idea, great execution, is the timing,” serial entrepreneur and Idealabs founder Bill Gross noted in a 2015 TED talk. “That company came out during the height of the recession, when people really needed extra money. And that maybe helped people overcome their objection to renting out their home to a stranger.”
Gross’ discussion was spawned by an analysis he conducted to determine the most important startup success factors. He considered idea, team, business model, funding and timing, and ultimately concluded that timing was the primary constituent, accounting for 42 percent of the difference between success and failure.
“What actually matters most for startup success?” Gross asked during his TED talk. “The number one thing was timing. Execution definitely matters a lot, the idea matters a lot, but timing might matter even more.”
And company size is irrelevant. Tokyo-based Hoya Corporation, a multinational, multi-billion dollar manufacturer/supplier of advanced optics technologies, precision devices, and lenses, is decades past the startup stage but nevertheless subscribes to Gross’ timing doctrine: The concept is part of the executive team’s management philosophy.
“We must always have flexibility of changing ourselves or tweaking our portfolio to have a portfolio of the business that is in the right place at the right time,” Hiroshi Suzuki, Hoya’s president and CEO, said in the company’s fiscal 2017 annual report. “If we are in the wrong businesses, we will never be able to be successful. It’s not just the management as such, but the right circumstances in terms of being in the right place at the right time.”
ANALYST INSIGHTS: Hoya continues to be one of the “quiet” industry giants in both Optical (Hoya Vision) and Surgical (Pentax). As Hoya has significant cash to spend (approximately $3 billion), the question remains will it make complementary acquisitions or make a dramatic portfolio-changing type of acquisition?
—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors
Indeed, Hoya has taken advantage of its knack for good timing, growing sales 25 percent in the middle part of this decade to 505.7 billion yen ($4.5 billion). But the Japanese multinational inadvertently became the victim of bad timing in FY17 after two powerful earthquakes rocked Kumamoto and Oita Prefectures in mid-April 2016, killing 211 people, injuring 3,000 others, and damaging more than 190,000 homes and buildings. Among the affected structures was Hoya’s Eyecity retail stores (contact lenses) and its photomask manufacturing plant in Kumamoto, which supplies photomasks down to 32 nm process geometries to semiconductor firms worldwide. The twin temblors severely damaged precision equipment and machinery at the facility and sparked a fire in the cleanroom, forcing Hoya to move liquid display panel production to factories in Taiwan and South Korea, and LSI fabrication to Hachioji, a Tokyo suburb.
Though it was originally intended as a temporary fix, the Kumamoto plant shutdown negatively impacted Hoya’s finances in fiscal 2017 (year ended March 31, 2017), paring overall sales by 4.4 percent to 478.9 billion yen ($4.3 billion) and profit before tax by 7.1 percent to 110.7 billion yen ($984,762,000). The company’s Life Care segment—comprised of Health Care and Medical divisions—lost profits as well, but fared better than its corporate parent: Sales slipped 2.5 percent to 314.4 billion yen ($2.8 billion).
The decline is a bit surprising, considering revenue grew in the lower single digits in many of the Life Care segment’s product categories. The Contact lens franchise, for instance, matched its FY16 profit margin due to an increase in Japanese Eyecity stores, while Eyeglass Lenses revenue benefitted from strong North American sales, led by an 8 percent rise in U.S. earnings and a double-digit increment in Canadian proceeds. In an effort to ensure future growth, Hoya purchased Performance Optics LLC and 3M’s safety prescription eye wear business in Q3 of fiscal 2017, expanding its reach into the eyewear safety and customized lens markets.
The 48.98 billion yen ($476 million) deal for Performance Optics and its two subsidiaries, Vision Ease and Daemyung Optical, includes the company’s ophthalmic lens manufacturing business, which encompasses polycarbonate, photochromic, polarized, and high index eyeglass lenses.
The 3M agreement adds an optical laboratory to Hoya’s inventory and provides the company with a comprehensive line of frames, prescription lenses, and premium coating options in a customized solution. It also enhances Hoya’s safety prescription eyewear and frames portfolios in Latin America, Europe, and Asia.
“Hoya’s acquisition of 3M’s established safety prescription eyewear business expands our customer reach and entry into an important new optical market segment for Hoya both in the U.S. and globally,” Girts Cimermans, CEO of Hoya Vision Care, said when the December 2016 deal was announced. “The business provides Hoya with additional capabilities in safety prescription eyewear while expanding future global opportunities and strengthening the range and services we offer our customers.”
Hoya’s market fortification efforts extended into the medical endoscope arena as well with Pentax Medical’s Q4 purchase of C2 Therapeutics, developer of the CryoBalloon Ablation Technology for Barrett’s Esophagus and squamous dysplasia treatment. Its addition to the Pentax Medical product family boosts the company’s therapeutic endoscopy portfolio and extends its role to that of a dual advanced diagnostic imaging/therapeutic solutions provider.
The C2 Therapeutics deal occurred too late in the fiscal year to impact Medical Endoscopes sales, but the franchise performed surprisingly well without it, “returning growth momentum” through new product launches in Europe (the OPTIVISTA EPK-i7010 Video Processor) and stronger group purchasing organization and integrated delivery network sales in the United States.
Hoya’s Intraocular Lens business was the Life Care segment’s top performer in FY17—franchise sales surged more than 20 percent from the previous fiscal year, and the division captured close to 30 percent of the global IOL growth in cataract surgeries. According to the annual report, Hoya Surgical Optics is now first in Japan and third globally in terms of market share.