HOYA : Quarterly Report for the three months ended Sep.30,2017

October 27, 2017

Quarterly Report

2nd Quarter : 3 months ended September 30, 2017

Interim (1st Half) : 6 months ended September 30, 2017

Consolidated (HOYA CORPORATION and Consolidated Subsidiaries)

Part .1

1. Quarterly Consolidated Financial Highlights : p.1

2. Results of Operations : p.2

3. Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Statement of Financial Position : p.4

(2) Quarterly Consolidated Statement of Cash Flows : p.6

(3) Quarterly Consolidated Statement of Comprehensive Income : p.7

(4) Segment Information : p.8

＜Reference＞Supplementary data for 2nd Quarter : p.11

Part .2

1. Interim Consolidated Financial Highlights : p.12

2. Interim Consolidated Financial Statements

(1) Interim Consolidated Statement of Financial Position : p.13

(2) Interim Consolidated Statement of Cash Flows : p.15

(3) Interim Consolidated Statement of Comprehensive Income : p.16

(4) Segment Information : p.17

＜Reference＞Supplementary data for the Interim Period : p.20

Notes:

1.

HOYA's fiscal year (FY) : from April 1 to March 31 of the following year.

2.

These financial statements are excerpt translation of Japanese "Kessan Tanshin "and have been prepared for the references only of foreign investors.

HOYA CORPORATION

This report is provided solely for the information of professional analysts who are expected to make their own evaluation of the company. This report contains forward-looking statements that are based on management's assumptions and beliefs in light of the information currently available to it and therefore you should not place undue reliance on them.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from that anticipated in these statements. These factors include changes in economic conditions, trends in our major markets, currency exchange rates, etc.

We accept no liability whatsoever for any direct or consequential loss arising from any use of this report.

Part.1

October 27, 2017

1. Quarterly Consolidated Financial Highlights

HOYA CORPORATION and Consolidated Subsidiaries

1. Performance for the three months ended September 30, 2016 and 2017 (All operations *Notes)

( The yen amounts shown therein are rounded off to the nearest million.)

Three months ended

Variance

(1)Revenue and Profit before tax

Sep. 30, 2016

Sep. 30, 2017

(%)

Revenue

114,865

135,772

18.2

Profit before tax

31,637

32,868

3.9

Ratio of profit before tax(%)

27.5%

24.2%

Profit for the quarter

24,819

26,767

7.9

Ratio of profit for the quarter(%)

21.6%

19.7%

Profit attributable to owners of the Company

24,854

27,166

9.3

Ratio of profit attributable to owners of the Company(%)

21.6%

20.0%

Basic earnings per share (yen)

63.42

70.11

Diluted earnings per share (yen)

63.31

69.92

As of

(2)Financial Position

Jun. 30, 2017

Sep. 30, 2017

Total assets

665,762

662,314

Total equity

528,608

544,517

Equity attributable to owners of the Company

523,740

540,015

Ratio of assets attributable to owners of the Company

78.7%

81.5%

Assets attributable to owners of the Company per share (yen)

1,348.93

1,401.49

Three months ended

(3) Conditions of Cash Flows

Sep. 30, 2016

Sep. 30, 2017

Net cash generated from operating activities

29,568

39,675

Net cash used in investing activities

-25

-60,869

Free cash flow

29,543

-21,194

Net cash provided by (used in ) financing activities

-29,975

-53,890

Cash and cash equivalents at end of period

249,985

231,570

2.Dividends per Share

Year ended

Mar.31,2017

Mar.31,2018

Interim (Yen)

30.00

30.00

Year-end (Yen)

45.00

N/A

Annual (Yen)

75.00

N/A

3.Other

Three months ended

Sep. 30, 2016

Sep. 30, 2017

Capital expenditure

5,742

5,450

R&D expenses

5,261

5,947

Notes:

"All operations" means here that the figures are including not only "Continuing operations" but also "Discontinued operations".

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from that anticipated in these statements. These factors include changes in economic conditions, trends in our major markets, or currency exchange rates.

2. Results of Operations

1) General Overview

During the second quarter of the consolidated fiscal year under review (July 1 through September 30, 2017), the economy of the United States continued to show steady growth. However, the future impact of any revised trade policies or tighter immigration policies is difficult to predict. The overall economy in Europe continues to expand at a moderate pace. At the same time, uncertainties remain about the future due to the exit of United Kingdom from the European Union. In Asia, the Japanese economy appears likely to continue its recovery. China will maintain its high rate of growth, although the country faces structural issues.

Given this environment, sales of eyeglass lenses in the HOYA Group (" the Company") Life Care segment rose, mainly overseas and in response to business acquisitions. Sales of contact lenses were also higher, driven in the main by ongoing new store openings. Endoscopes for medical use experienced improved sales, pushed mainly by performance in Europe and Asia. Sales of intraocular lenses were also strong, mainly due to growth in new products. As a result, the Life Care segment as a whole reported higher sales year on year.

The Information Technology segment reported higher sales for semiconductor mask blanks in response to strong demand for cutting-edge products. Sales of photomasks for LCDs also increased year on year, owing mainly to the winding down of production capacity losses after the Kumamoto earthquakes and the ongoing recovery of said production capacity. Sales of glass substrates for hard disk drives rose, mainly due to improved general demand and the Group's capture of greater market share. Imaging-related product sales were higher due to an expansion of new applications. As a result, the Information Technology segment as a whole reported higher revenues year on year.

As a result, sales for the consolidated second quarter increased 18.2% year on year, reaching 135,772 million yen.

Quarterly profit before tax amounted to 32,868 million yen with 26,767 million yen in profit, representing increases of 3.9% and 7.9%, respectively. The Company recorded 52 million yen in foreign exchange gains (compared to a 1,505 million yen foreign exchange loss in the prior period), offset somewhat by the lack of the same finance income (sale of marketable securities) recorded in the same period of the prior fiscal year.

Profit before tax ratio was 24.2%, representing a year-on-year decrease of 3.3 points.

Disclosed figures and change ratios are for businesses with continuing operations. The Company did not discontinue any operations during the consolidated second quarter of the current or prior fiscal years.

2) Segment Overview

The following discusses results by reportable segment. Segment sales are sales to external customers.

Life Care

In Japan, despite an ongoing contraction in the retail market, eyeglass lens sales swung to growth, as we captured a greater share of the market. Overseas sales grew year on year. We captured a greater share of the market growth in Asia, while our own growth in the Americas combined with our acquisition of the 3M prescription protective eyewear business and Performance Optics, LLC. resulted in a significant jump in sales in that region.

New store openings of our Eyecity contact lens specialty stores, as well as new customer expansion efforts at existing stores, resulted in higher year-on-year sales for contact lenses.

Endoscopes for medical use experienced higher year-on-year sales overall. This result was mainly due to the contribution of new products and stronger sales capacity in Europe, Asia, and other overseas markets.

Sales of intraocular lenses for cataracts continued to perform well in the Japanese market, after being introduced in fiscal 2015. Overseas, as well, direct sales and sales through agents grew, outpacing performance for the same period in the prior fiscal year by a significant margin.

As a result, sales for the Life Care segment grew 16.5% year on year, reaching 88,062 million yen. Segment profit amounted to 14,501 million yen, a slight increase of 1.9% year on year despite the high sales growth, mainly due to amortization of intangible assets related to business acquisitions and advanced costs incurred to secure higher growth.

Information Technology

The smartphone market continues to grow, even as the market for end products using HOYA components, such as PCs and tablets, continues to be saturated. Sales of mask blanks for semiconductors grew year on year by a significant margin. This growth was mainly due to our capturing active research and development demand for cutting-edge products.

Sales of photomasks for LCDs rose year on year. This increase was due to the move toward higher-precision, higher-resolution smartphone panels, as well as a recovery in research and development demand for 4K TV panels and larger-screen panels. In addition, we are now recovering production capacity, which had fallen off in the wake of the Kumamoto earthquakes.

Glass substrates for hard disk drives experienced significant year-on-year growth. General demand for hard disk drives improved due to the short supply of SSDs (Solid State Drives), while the HOYA Group captured a greater share of the hard disk drive market.

Sales of imaging-related products grew overall. Contraction of the market for digital cameras, the end product using our products in this field, has softened. However, expanded sales of products for surveillance cameras, in-vehicle cameras, and other new applications contributed to overall growth.

As a result of these various factors, sales for the Information Technology segment rose 22.3% year on year, reaching 46,815 million yen. Segment profit amounted to 19,424 million yen, an increase of 50.8% year on year.

Other

The HOYA Group Other business segment consists of new businesses and businesses offering information systems services. The Other Businesses segment reported sales of 895 million yen, a decrease of 9.3% year on year. Segment profit fell 99.7% to 1 million yen.