2023/2024
INTERIM RESULTS
HONMA GOLF LIMITED (6858.HK)
NOV. 2023

ONE OF THE MOST PRESTIGIOUS ANDICONIC BRANDS IN THE GOLF INDUSTRYYou must read the terms, conditions, limitations, notifications, restrictions, acknowledgments and representations in the following (the“Terms”) before reading or making any other use of this presentation. In reading or making any other use of this presentation, you
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01

2023/2024 INTERIM RESULTSCONTENTS
01 HONMA

03

02 PERFORMANCE OVERVIEW

05

03 BUSINESS HIGHLIGHT

10

04 FINANCIAL REVIEW

22

05 APPENDIX

27

02

2023/2024 INTERIM RESULTS

0103

2023/2024 INTERIM RESULTS#1 PREMIUM GOLF BRAND FOUNDED IN 1959, JAPAN65+ YEARS OF DEDICATIONS TOWARDS QUALITY AND CRAFTSMANSHIPTHE ONLY VERTICALLY INTEGRATED GOLF COMPANY IN THE WORLD

IN-HOUSE R&D AND
CLUB MANUFACTURINGCOMPREHENSIVE CLUB AND
NON-CLUB PRODUCT PORTFOLIO• 216 R&D personnel and skilled craftsmen• Diversified range of premium golf products• Club portfolio focusing on super-premium and••

Presence in over 50 countries••

Fast growing E-commerce business in
China, Japan and the US

operating out of 163,000 m2 of manufacturingbase in Sakata, Japan•

Advanced and sophisticated design andmanufacturing capacity, housed under one roof

premium-performance consumer segments

Comprehensive range of non-club products
including balls, apparels and accessories

EXTENSIVE DTC +DISTRIBUTION NETWORK

Unique omni channel, 95 self-operated
stores overlayed with 3,506 third party POS

042023/2024 INTERIM RESULTS

0205

In 1H FY2024, the golf industry witnessed increased market competitions and adjustments in participation and consumers’ willingness to pay
resulting from the global economic situations as well as slowdowns in certain parts of the world.

2023/2024 INTERIM RESULTS

Meanwhile, HONMA continued to drive efficiencies and implemented channel adjustment in multiple markets that effectively drove up sales
from apparels and self-operated channels, at the same time achieved robust bottom line growth and net margin improvement despite theunfavorable market conditions, reconfirming the Group’s strong management and business resilience under volatile economic environments.

KEY FINANCIALS

Half Year Ended 30 Sep 2023

Change vs Half Year Ended 30 Sep 2022

Net Sales

JPY 13,195 MM / USD 93.9 MM (1)-11.6%(constant currency base: -12.4%)

52.1%-0.6pp

EBITDA- EBITDA Margin

JPY 4,702 MM / USD 33.5 MM (1)
35.6%

+1.3%
+4.5ppNet Profit- Net Profit Margin

JPY 3,326 MM / USD 23.7 MM (1)
25.2%

+7.8%
+4.6pp

JPY 5.50 / HKD 0.31(3)+7.8%

Net Operating Cash Flow

JPY 3,251 MM / USD 23.1 MM (1)-0.8%

Net Cash Position

JPY 10,120 MM / USD 68.2 MM (2)+0.7%

Proposed Dividend

JPY 1.50 /share(Dividend Payout Ratio: 27.3%)

Flattish YOY

Gross Profit Margin

Reported Earnings Per Share

Note (1) Exchange rate: 1 USD = 140.52 JPY(2) Exchange rate: 1 USD = 148.35 JPY(3) Exchange rate: 1 HKD = 17.94 JPY

06

•

During 1H FY24, The Group’s main markets recorded different sales momentum versus same period last year.

•

Sales from Japan rose by 5.6%, on the back of a strong rebound of demand from both local players and overseas travelers, fueled by potent product and marketing strategies.

•

China on the other hand showed a sales decline of 12.4% as China’s economy and retail market experienced significant slowdowns. Sales from Korea also declined by 7.0%,
reflecting the Group’s decision to optimize its distribution network prior to its new products launch in 1Q 2024.

2023/2024 INTERIM RESULTS

NET SALES MIX BY MARKET%

2.5%

NET SALES GROWTH BY MARKET

1.0%

8.2%

31.6%

-52.5%(2)EUROPE-12.4%SALES: JPY135M / USD1.0M

26.7%

CHINA

(INCL. HK&MACAU)SALES: JPY3,529M /USD25.1M

JAPAN

SALES: JPY4,173M /USD30.0M-7.0%-40.7%(2)NORTH AMERICA

SALES: JPY335M / USD2.4M

SOUTH KOREA

29.9%-41.9%(1)

Japan
Korea
China(Including Hong Kong and Macau)
Other Regions
North America
Europe+5.6%

SALES: JPY3,943M /USD28.1M

OTHER REGIONSSALES: JPY1,079M /USD7.7M

Note (1) Sales from Other Regions dropped by 41.9%, mainly due to unfavourable local currency depreciationthat led to weakened consumer purchasing interests and power
Note (2) North America and Europe recorded decline in sales by 40.7% and 52.5%, respectively, due tocontinued negative impacts from last year’s adjustments in distribution networks; such adjustments aim tofocus on a smaller yet premier group of accounts

072023/2024 INTERIM RESULTS

GOLF CLUBS•

Apparel sales momentum remained strong thanks to the successful
product launches, as well as potent marketing and branding campaigns.

•

Sales decrease in golf clubs was mainly due to weak consumer sentimentin China. The new BERES 09 is planned to be launched globally in 1Q 2024.

• mainly due to a decline in China’s golf club sales of 26.3%•

Sales from golf balls remained relatively stable, albeit upward priceadjustment in the face of continued currency pressure.

APPARELSNET SALES MIX BY PRODUCT CATEGORIESNET SALES -12.5% TO JPY 10,012 MILLION / USD71.2 MM
GROSS MARGIN -0.5PP TO 59.3%

NET SALES +2.1% TO JPY 1,264 MILLION / USD9.0 MM
GROSS MARGIN -2.0PP TO 28.2%• apparel sales in China was up by 21.4% in spite of the weak
consumer sentiments

GOLF BALLS

%
6.2%
8.3%
9.6%

75.9%

Golf Clubs

NET SALES -2.2% TO JPY 1,098 MILLION / USD7.8 MM
GROSS MARGIN -2.9PP TO 29.0%

Apparels• mainly due to temporary sales adjustment following upward
retail price adjustment to cope with Japanese Yen
depreciation in Japan

Golf Balls

ACCESSORIES

Accessories & Other
RelatedNET SALES -27.1% TO JPY 821 MILLION / USD5.8 MM
GROSS MARGIN +6.8PP TO 32.4%• primarily caused by constrained sales in Japan to protect margin

08

NET SALES MIX BY CHANNEL

DIRECT-TO-CONSUMER CHANNELS: Self-operated Stores + E-commerce%

NET SALES +13.2% TO JPY 5,171 MILLION / USD36.8 MM

2023/2024 INTERIM RESULTSGROSS MARGIN +7.4PP TO 60.6%
39.2%
60.8%

Distributors
DTC Channels

95

•
•
•

Net +5 new locations, mainly located on the prominent golf courses in China
Sales from Japan +30.7%; sales from Mainland China +23.6%
Continued optimization of store design, visual display and consumer
experience

E-COMMERCE•••

Operating in China, Japan and the US
Total net sales +19.0%;
Robust sales growth in all 3 markets: China +18.4%, Japan +12.7%, US +36.6%

SELF-OPERATED STORES

3rd PARTY RETAILERS AND WHOLSALERS
NET SALES -22.5% TO JPY 8,024 MILLION / USD57.1 MM
GROSS MARGIN -5.8PP TO 46.6%
3,506
3RD PARTY POSs••

Net -211 POS, mainly in North America, resulting from the decision to focus on asmaller yet premier accounts
Sales decreased primarily due to weakened economic environment in China anddistribution model shift in multiple markets

092023/2024 INTERIM RESULTS

03
10

2023/2024 INTERIM RESULTS

The Group strategically focuses on the development of its home markets in Asia and exquisite trending products, while at the same time, continues to seek new possibilities
by exploring and developing new categories and products to meet consumers’ evolving needs.

•

Combines top-notched Japanese craftsmanshipwith world standard innovative technologies•

Strengthened focus on super premium andpremium performance consumer segments• Enriched premium performance products
targeting golfers with 8-20 handicaps•••

Unique product offerings designed for social
media savvy female golfers

Steady advancement of ball and accessory
businesses in premium consumer segments
Nurturing apparel business in the fast growing
home markets, aiming both golfers , as well as awider spectrum of active and outdoor-inspired
populations•

Continuously upgrading HONMA’s retail presencewith primer locations, new retail visual identity,
design concept and consumer experienceelements•

Further penetration into premium-performancesegment by adding quality retailers and POS•

Continue investing into the brand’s digital ecosystem and HONMA’s private sphere, following
fundamental change in consumer behavior andbusiness environment post COVID-19•

Re-defining HONMA brand as a dynamic, relevant
and global brand among younger and internetsavvy golfers.

•

Offering 360 degree HONMA brand experience
across all consumer touch points both offlineand online, pursuing golfers in super-premiumand premium-performance segments•

Rejuvenated TEAM HONMA with younger anduprising athletes, coaches and influencers tocreate a unique community culture•

Enhanced CRM system to better understandconsumers and nurture loyalty•

Focused marketing and PR activities across all
markets

11

2023/2024 INTERIM RESULTS

PUTTERS, COUNTRY SPECIFIC MODELS,
SPECIAL EDITIONSBeres Aizu
Launched in Dec 2021

Beres NX
Launched in Nov 2022

Beres 09
Coming in Mar 2024

TW757
Launched in Mar 2022

65th Anniversary
Sakura Dance
Launched in May 2022

FOR SERIOUS GOLFERSHANDICAP 0-12

FOR YOUNGERFEMALE GOLFERSIN CHINA

XP-2
Launched in Sep 2022

Lady Go
Launched in Nov 2022

FOR GAME IMPROVEMENTGOLFERSHANDICAP 8-20

FOR YOUNGERFEMALE GOLFERS
IN JAPAN

BeZeal 3
Coming in Feb 2024
12

2023/2024 INTERIM RESULTS•

In 1H FY2024, golf club sales -12.5% to JPY 11,012 million, mainly because the two major club series BERES Aizu and TW757 are both phasing out after 2 years ofsales; renewed models will be released in 2024; sales from China -26.3% due to weakened economic environment and consumer sentiment•Japan recorded decent club sales growth +20.1%, on the back of a full recovery in retail activities and consumer demands; cheaper Yen was also a stimulus tooverseas travelers’ interests of purchase; Country Specific Model sales +34.9% as more younger golfers value uniqueness•Overall club gross margin remained at an industry-leading level of 59.3%, only slightly lower than 59.8% of last year

BERES

•

•
•

Next generation of BERES to bereleased globally in early 2024

41.6% of club sales
1H FY24 sales -26.7%, mainly due to
BERES Aizu phasing out and weak
consumer sentiment in China

TOUR
WORLD

•

2-proned product approach designed
for avid golfers with single and double
handicaps respectively•

Next generation of Tour World to bereleased in summer 2024•

BeZeal 3 to be released in early 2024••

9.6% of club sales
1H FY24 sales -53.9% mainly due
to distribution adjustment in
Korea, North America and Europe

OTHERS• Mainly Country Specific Models,
•
•
•
•
•

special editions and putters
Country Specific Model for Korea
released in 2H FY23
HT08 for China released in Nov 2023
(2H FY24)
48.9% of club sales
1H FY24 Country Specific Models
sales +34.9%, sales from Korea+108.7%
All-time favorite to consumers who
are looking for extinguished andexquisite cosmetics
13•

Golf ball sales declined slightly by 2.2% YOY to JPY 1,097.9 million; gross margin -2.9PP to 29.0%•

Sales from golf ball declined during the period mainly due to temporary negative impact following upward retail price adjustment, implemented to cope with Japanese Yen
depreciation over the last few years•

Gross profit margin decreased primarily due to continued raw material price pressure and unfavourable exchange rate movement

2023/2024 INTERIM RESULTS

PRODUCT PYRAMID
Premium
Performancedriven
Value

D1, 2-LAYER BALL

TW-X , 3-LAYER BALL

BERES 5 STAR, 6-LAYER BALLTOTAL GOLF BALL SALES (FULL YEAR)

JAPAN GOLF BALL SALES (FULL YEAR)JPY MM

JPY MM

2,659
1,805

2,974

2,439

2,947

2,211

FY20

FY21

1,926

1,209

1,148

787

736

FY17

1,737

1,810

370
FY18

FY19

FY20

FY21

FY22

FY23

FY17

FY18

FY19

FY22

FY23

14

2023/2024 INTERIM RESULTS

APPAREL SALES +2.1% YOY TO JPY 1,264 MILLIONGROSS MARGIN -2.0PP TO 28.2%

APPAREL COLLECTION CONSISTING OF 3 DISTINCTIVE PRODUCT LINES TARGETINGPREMIUM PERFORMANCE AND FASHION ATHLETIC CONSUMER SEGMENTS••

PROFESSIONAL GOLF LINE

Sales from China +21.4%; sales from Japan +15.7%
3 product lines catering to the distinctive requirements ofgolfers and outdoor enthusiasts in Asia, both on-course andoff-course•

Quality retail footprints with optimized store operation,
merchandise planning and upgraded display•

Continued investment into digital marketing and Ecommerce capabilities on the back of one digital eco-system•

Crossover collections collaborating with trendy Japanesedesigner and iconic IP to drive brand awareness and appeal
to the younger generation

Tour-inspired professional golf wear
featuring high-tech functional fabrics
and 3D synchronized cutting

FASHION GOLF LINE
Tour-inspired professional golf wear
featuring high-tech functional fabrics
and 3D synchronized cutting

URBAN ATHLEISURE LINE
Trendy athleisure wear targeting
active and outdoor enthusiasts,
featuring fashionable and diverse
designs and details

15

SELF-OWNED RETAIL CHANNELSACT AS BRAND EXPERIENCE HUBS ACROSS ALL MARKETS

2023/2024 INTERIM RESULTS•••

Sales from self-owned channels +13.2% to JPY 5,171 million
Sales from Japan +30.7%; sales from China +23.6%
95 self-owned stores, net increase by 5; newly opened 9 stores, all in China

THIRD-PARTY RETAILERS AND WHOLESALERSCONTINUED TO DRIVE PENETRATION AND GAIN MIND SHARE•••

Sales from third-party -22.5%
Number of POS declined by 211 to 3,506, mainly in Korea and North America
Sales decline was primarily due to sales decrease in China, partly due to thechallenging macro environment and partly due to a channel shift of its apparelbusiness towards a focus on DTC model16

2023/2024 INTERIM RESULTS

E-COMMERCE SALES GREW BY 19.0%
DRIVEN BY ACCELERATED INVESTMENT IN DIGITAL
MARKETING WITH A FULL-CHANNEL APPROACH•

E-commerce platforms in major markets• China: Tmall, JD, Wechat Store, Douyin, and DU (得物)• Japan & US: self-operated E-commerce site•

Actively pursuing an E-commerce growth strategy• Dedicated E-commerce team and marketing resources• Social media campaigns generating traffic to online stores• Livestream (直播) sales campaign to attract internetsavvy consumers in China• Search engine optimization and in store visual updates• Full channel CRM system to upgrade loyalty program andimprove consumer experiences

T-MALL FLAGSHIP STORE

US E-COMMERCE SITEWECHAT OFFICIAL ACCOUNT & STORE

JAPAN E-COMMERCE SITE

17

2023/2024 INTERIM RESULTS

DIGITALIZED CONTENT MARKETING THROUGH RELAUNCHED GLOBALWEBSITE & SOCIAL MEDIA PLATFORMS RELEVANT TO EACH MARKET•

Frequently rolling out digital marketing content on HONMA’s global website aswell as social platforms including Instagram, Facebook, Wechat, Weibo, etc•

Content collaboration with pros, influencers and celebrities both on tour andon digital platforms• To convey consistent brand image and enhance brand awareness acrossall markets• To recruit and engage with younger and internet-savvy consumer• To generate traffic from digital platform to offline retail stores• To own the entire consumer experience and data18

2023/2024 INTERIM RESULTSCUSTOMER EVENTS
1,757 EVENTS, 22,944 PARTICIPANTS••

Customer events are important customer touch points for HONMA
These events were mainly held on golf courses with dedicatedfitters• Integrated brand experience and retail activities targeting
consumers in super premium and premium performance segments•

Key to the continued enhancement of HONMA’s brand and productawareness and consumer impression

19

SPONSORING 8 PROFESSIONAL PLAYERS PLUS A WIDE NETWORK OF
HONMA AMBASSADORS AND COACHES
7 JAPAN LADIES

2023/2024 INTERIM RESULTS

PROFESSIONAL GOLF
(JLPGA)TEAM HONMA WINNING CHAMPIONSHIP IN PROFESSIONAL TOURS

1 KOREA LADIESPROFESSIONAL GOLF
(KLPGA)•

Renewed pro-sponsoring strategies to recruit additional young anduprising athletes in Asia with visible social media followings•

To further enhance HONMA’s tour presence in Asia with performancedriven audience, especially younger and avid golfers amid the promising
trend of golf development in Asia

TEAM HONMA IN MARKETING AND CUSTOMER ACTIVITIES20OTHER BRAND PR & MEDIA EXPOSURE
Actively reinforcing HONMA’s brand image being premium, performance-driven, dynamic and modern through multiple media from golf magazines, TV
channels, talk shows advertisement, etc.

2023/2024 INTERIM RESULTS•

21

2023/2024 INTERIM RESULTS

04
22

NET SALESGROSS PROFIT & GROSS MARGIN

JPY MM

14,927
11,872JPY MM

13,195
6,562

9,053

7,866

6,877

2023/2024 INTERIM RESULTS

4,634

1H FY2021

1H FY2022

1H FY2023

1H FY2024

1H FY2021

1H FY2022

Gross Profit

EBITDANET PROFIT

JPY MM

JPY MM

4,644

1H FY2023

Gross Margin

3,087

4,702

1H FY2024

3,330

3,183
290

26.8%

19.3%

31.1%

11.4%

3.2%
1H FY2021

1,348

35.6%

20.7%

25.2%

-804
1H FY2022
EBITDA

1H FY2023
EBITDA Margin

1H FY2024-8.9%
1H FY2021

1H FY2022
Net Profit

1H FY2023

1H FY2024

Net Profit Margin23

SG&A EXPENSES BRIDGE

SG&A EXPENSES BREAKDOWN

JPY MM

AS % OF SALES

2023/2024 INTERIM RESULTS

37.2%

39.2%
2.0%

2.8%
3.3%
4.6%
7.7%

7.5%

4.6%
5.2%

6.7%

9.3%

11.3%

11.5%

1H FY2023

1H FY2024

Employee benefits

Other Selling Expenses

A&P Expenses

Administrative Expenses

Depreciation of right-of-use assets

Rental Fees

24

NET OPERATING CASH FLOWCASH ON HAND

JPY MM

JPY MM

3,702

-0.8%
3,277

3,251

2023/2024 INTERIM RESULTS

2,576

1H FY2021

11,203

1H FY2022

1H FY2023

1H FY2024

1H FY2021

12,971

1H FY2022

17,038

16,6601H FY2023

1H FY2024

INTEREST-BEARING LIABILITIESINTEREST-BEARING LIABILITIES / TOTAL EQUITY

JPY MM

%

8,624
6,900

1H FY2021

1H FY2022

6,990

1H FY2023

6,540

1H FY2024

44.0%
31.9%

1H FY2021

1H FY2022

26.6%

23.4%

1H FY2023

1H FY2024

25

RECEIVABLES TURNOVER DAYS (1)PAYABLES TURNOVER DAYS (1)INVENTORY TURNOVER DAYS

DAYS

DAYS

DAYS

2023/2024 INTERIM RESULTS

68

314

44

1H FY2022

+28
days

1H FY2023

+5
days

64

64

49

292
-16
days
48

1H FY2024

1H FY2022

1H FY2023

320

1H FY2024

219

200

236

30

27

22

65

65

62

1H FY2022

1H FY2023

1H FY2024

WIP

Finished Goods

Raw Materials

Note(1) Turnover days are calculated using the average of the opening and closing balance of the relevant periods

262023/2024 INTERIM RESULTS

05
27

STEADY AND QUALITY GROWTH IN MULTIPLE PRODUCTCATEGORIES FOLLOWING FURTHER MARKET REOPENING
2.5%

1.0%

% of Total Sales

2023/2024 INTERIM RESULTS

8.2%

Japan

31.6%

Korea
China(Including Hong Kong and Macau)

26.7%

MARKET•••••

Other Regions
North America
Europe29.9%

1H FY24 HALF YEAR PERFORMANCE HIGHLIGHT
NET SALES +5.6%••

NET SALESJPY MM

3,952

4,173
+5.6%

2nd largest golf equipment market in the world
Total golf product market size approximates to USD 1.7 billion in 2021 (1)2,200 golf facilities, representing half of the total facilities in Asia (1)Around 8.5 million golf population (1)Hideki Matsuyama’s win in the US Masters Championship in Apr 2021 isseen to be a boost for Japan’s golf market•

Golf club sales +20.1%
Strong recovery in consumer sentiment following market reopening andcoming back of overseas travelers
Focused marketing campaigns and Pro-endorsement program targeting
premium-performance consumer segment

Note(1) 2021 Yano’s White Paper on Golf Industry, Japan

1H FY2023

1H FY2024

28

ONGOING CHANNEL OPTIMIZATION AIMING TO FUEL THE
UPCOMING PRODUCT LAUNCH IN SPRING 2024
2.5%

1.0%

% of Total Sales

2023/2024 INTERIM RESULTS

8.2%

Japan

31.6%

Korea

MARKET•••

Fast growing and under-penetrated market
3rd largest golf equipment market in the world with USD 650 million
equipment sales in 2018 (1)6.3 million of golf population, around 12% of total population in Korea (2)China(Including Hong Kong and Macau)

26.7%

Other Regions
North America
Europe29.9%

1H FY24 HALF YEAR PERFORMANCE HIGHLIGHT
NET SALES -7.0%• Sales decrease was mainly due to the Group’s decision to implement

NET SALES•JPY MM

4,237

3,943

channel adjustment prior to the new product launch in 2024
Nevertheless, the country specific club sales in Korea +108.7% as sales
and marketing efforts invested in the latest generation of Kiwami series,
a special BERES model that customized for Korea market and wellreceived by Korean golfers for years

-7.0%

Note
1H FY2023

1H FY2024(1) Source : KGPA, Korea Golf Association 2017(2) Source: World Bank, South Korea population in 2021 is 51,74 million

29

MEANINGFUL 5.10
APPAREL AND E-COMMERCE GROWTH ALBEITWEAKENED CONSUMER SENTIMENT

2023/2024 INTERIM RESULTS

2.5%% of Total Sales

1.0%

8.2%

Japan

•
•
•
•

Korea

31.6%

MARKET
Dynamic market with an exciting uptrend in outdoor sports
Emerging and fast growing golf industry
478 golf courses, expanding indoor facilities, around 1 million core golf
population(1)Solid and growing demand in active wear and fashion-athletic apparel

China(Including Hong Kong and Macau)

26.7%

Other Regions
North America

MAINLAND CHINA NET SALES -13.0%

Europe29.9%•

NET SALES•JPY MM

3,926

3,416

-13.0%

120
100
80

102

113
+11.2%

60

1H FY2023

1H FY24 HALF YEAR PERFORMANCE HIGHLIGHT

1H FY2024

Mainland China

1H FY2023 1H FY2024••

Golf club sales -26.3% under the economic slowdown and weakened
consumer sentiment
Apparel sales +21.4% thanks to the enriched product lines designed for awider range of target groups to include not only golf players but also thefast-growing urban outdoor lovers‘Flagship Store Plan’ – iconic stores set up as brand showroom at prime
locations in the first tier cities with upgraded visual display
Active digital marketing campaigns and E-commerce strategies

Note(1) Source : Forward Golf White Paper Report 2020

Hong Kong/ Macau

30

BUILDING A UNIQUE DIRECT-TO-CUSTOMERDISTRIBUTION MODEL TO CAPTURE SUPERPREMIUM AND PREMIUM PERFORMANCE SEGMENT
2.5% 1.0%% of Total Sales

2023/2024 INTERIM RESULTS

8.2%

Japan

31.6%

Korea

MARKET••••

Largest golf market in the world with 45% of the global golf economy(1)2018 golf equipment sales approximates to USD 4.3 billion by forecast (1)Around 24 million golf participants (1)Double-digit YOY increase in national rounds played and newparticipation at all time high after market re-opening in 2H FY21

China(Including Hong Kong and Macau)

26.7%

Other Regions

29.9%

North America

1H FY24 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES -40.7%• POS -110 to 235 in total• Sales decline following the ongoing adjustment in distribution network in

NET SALES

the US; such adjustment aims to shift the focus of operation on a smaller
yet premier group of accounts

JPY MM

565
335-40.7%Note(1) Source : World Golf Report 2021

1H FY2023

1H FY2024

31

IMPROVED MARGIN FOLLOWING CHANNEL
ADJUSTMENT
2.5% 1.0%% of Total Sales

2023/2024 INTERIM RESULTS

8.2%

MARKET

•
•

Japan

31.6%

Mature but fragmented golf market
England, Austria, Germany, France and Sweden in total accounts foraround 12% of the world’s golf equipment sales, which approximates to
USD 1 billion (1)Korea
China(Including Hong Kong and Macau)

26.7%

Other Regions

29.9%

NET SALESJPY MM

North America

1H FY24 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES -52.5%• POS +45 to 80 in total• Sales decline due to the negative impact from the change to the•286

distribution model implemented last year
Number of POS came back to a well-shaped 80 with a smaller but
premier group of retail partners to pursue both sturdy growth andprofitability in the region

136-52.5%Note
1H FY2023

1H FY2024(1) Source : KGPA, Korea Golf Association 201732

For the six months ended 30 September
2023
JPY

2022
%

JPY

YoY Change%%(In thousands, except for percentages and per share data)
Consolidated Statement of Profit or Loss

Cost of sales

13,194,832-6,317,853

100.0
-47.9

14,927,415-7,061,101

100.0
-47.3

-11.6
-10.5

Gross profit

6,876,979

52.1

7,866,314

52.7

-12.6

Other income and gains

2,019,415

15.3

1,696,655

11.4

19.0

Selling and distribution expenses-4,485,975-34.0-4,874,327

-32.7

-8.0

Administrative expenses-609,572-4.6-759,481

-5.1

-19.7

Other (expenses)/income, net-73,662-0.6-155,530

-1.0

-52.6

Finance costs-97,102-0.7-52,506

-0.4

84.9

Finance income

5,677

0.04

7,475

0.1

-24.1

Profit before tax

3,635,760

27.6

3,728,600

25.0

-2.5

Income tax expense-306,257-2.3-641,218

-4.3

-52.2

Net profit

3,329,503

25.2

3,087,382

20.7

7.8

2023/2024 INTERIM RESULTS

Revenue

Earnings per share attributable to ordinary equity holders of the parent
Basic and diluted

5.50

5.10

7.8

Non-IFRS Financial Measures
Operating Profit

1,690,007

12.8

2,187,475

14.7

-22.7

Net Operating Profit

1,648,940

12.5

1,588,856

10.6

+3.8

Note

(1) Operating profit is derived from profit before tax by (i) subtracting other income and gains, (ii) adding other expenses, and (iii)adding RSU expenses.
(2) Net operating profit is derived from net profit by (i) subtracting other income and gains, (ii) adding other expenses, (iii) adding RSU expenses and (iv) adding impact on tax related to items(i)and(ii)above.

33

Financial Position as at
2023.9.30

2023.3.31

JPY

JPY

(In thousands, except for percentages and per share data)

2023/2024 INTERIM RESULTS

Consolidated Statement of Financial Position
AssetsNon-current assets

8,320,186

8,508,477

Current assets

33,543,335

35,706,753

Total Assets

41,863,521

44,215,230

Non-current Liabilities

2,094,826

2,616,614

Current Liabilities

11,832,643

15,298,296

Total Liabilities

13,927,469

17,914,910

Net current assets

21,710,692

20,408,457

Total assets less current liabilities

30,030,878

28,916,934

Net Assets

27,936,052

26,300,320

Total Equity

27,936,052

26,300,320

Liabilities34

2023/2024 INTERIM RESULTS

For the six months ended 30 September
2023

2022

JPY

JPY
(In thousands, except for percentages and per share data)

Cash and cash equivalents at the beginning of year

14,084,777

14,454,554

Net cash flows generated from operating activities

3,251,296

3,277,219

Net cash (used in) investing activities-196,923-228,919

Net cash flows (used in) financing activities-1,449,364-1,267,049

Net increase in cash and cash equivalents

1,605,009

1,781,251

Net effect of foreign exchange rate changes

970,178

802,256

Cash and cash equivalents at the end of year

16,659,964

17,038,061

35

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Please contact
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