Nov. 2022

HONMA GOLF LIMITED (6858.HK)
2022/2023 INTERIM RESULTSONE OF THE MOST PRESTIGIOUS AND ICONIC BRANDS IN THE GOLF INDUSTRY

2022/2023 INTERIM RESULTSDISCLAIMER

01

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2022/2023 INTERIM RESULTSCONTENTS

02

1．HONMA
2．PERFORMANCE OVERVIEW
3．BUSINESS HIGHLIGHT
4．FINANCIAL REVIEW
5．OUTLOOK
6．APPENDIXHONMA03
2022/2023 INTERIM RESULTS

01

2022/2023 INTERIM RESULTS#1 PREMIUM GOLF BRAND FOUNDED IN 1959, JAPAN60+ 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 PORTFOLIOEXTENSIVE DTC +DISTRIBUTION NETWORK• 236 R&D personnel and skilled craftsmen• Diversified range of products• Club portfolio focusing on super-premium and• Presence in over 50 countries• Unique omni channel, 83 self-operated stores• Comprehensive range of non-club products• Fast growing E-commerce business in China,

operating out of 163,000 m2 of manufacturingbase in Sakata, Japan• Advanced and sophisticated design andmanufacturing capacity, housed under one roof

04

premium-performance consumer segments
including balls, apparels and accessories

overlayed with 3,831 third party POS
Japan and the US

PERFORMANCEOVERVIEW

052022/2023 INTERIM RESULTS

022022/2023 INTERIM RESULTS

IN 1H FY23, HONMA DELIVERED REMARKABLE SALES GROWTH AND MARGIN IMPROVEMENTDESPITE PROLONGED SUPPLY CHAIN CHALLENGES AND UNCERTAINTIES WORLDWIDEKEY FINANCIALS

Half Year Ended 30 Sep 2022

Net Sales

JPY 14,927MM / USD 112.1MM (1)+25.7%(COMPARABLE: +17.3%)

52.7%-2.6pp

EBITDA- EBITDA Margin

JPY 4,644MM / USD 34.9MM (1)31.1 %+45.9%+4.3ppNet Profit- Net Profit Margin

JPY 3,087MM / USD 23.2MM (1)20.7 %+ 129.0 %+ 9.3 pp

JPY 5.10 / HKD 0.30(3)+129.0%Net Operating Cash Flow

JPY 3,277MM / USD 24.6MM (1)-11.5%Net Cash Position

JPY 10,048MM / USD 69.7MM (2)+65.5%

Proposed Dividend

JPY 1.50 /share(Dividend Payout Ratio: 29.4%)

Flat YOY

Gross Profit Margin

Reported Earnings Per Share06

Nominal Growth
vs Half Year Ended 30 Sep 2021

Note (1) Exchange rate: 1 USD = 133.12 JPY(2) Exchange rate: 1 USD = 144.08 JPY(3) Exchange rate: 1 HKD = 16.98 JPY

PERFORMANCE OVERVIEW

BY MARKET

2022/2023 INTERIM RESULTS

1H FY23 NET SALES: JPY 14,927 MM / USD 112.1 MM, +25.7% YOY ( COMPARABLE +17.3%)•

Most of the Group’s main markets recorded double digit sales growth on the back of a strong rebound of consumer demand, potent product and marketing strategies, andsuccessful activation of various HONMA products.

NET SALES MIX BY MARKETNET SALES GROWTH%%

3.8 1.9
12.5

28.4-46.0%(2)EUROPESALES: JPY 286 MM

26.5+11.1%(1)CHINA(INCL. HK&MACAU)SALES: JPY 4,028 MM

27.0

+3.4%
JAPAN

SALES: JPY 3,952 MM+97.1%+31.6%NORTH AMERICA
SALES: JPY 565 MM

SOUTH KOREA

SALES: JPY 4,238 MM

Korea
China (Including Hong Kong and Macau)
Japan
Other Regions
North America
Europe+41.2%OTHER REGIONSSALES: JPY 1,859 MM

Note (1) On a constant currency basis, net sales from China dropped slightly by 4.3%, due to extended andcontinued home shelter imposed in various parts of the country
Note (2) Europe recorded a provisional sales decline of 46.0%, reflecting the Group’s decision to change into
an indirect distribution model in the region

07

PERFORMANCE OVERVIEW

BY PRODUCT CATEGORY

2022/2023 INTERIM RESULTS

1H FY23 NET SALES: JPY 14,927 MM / USD 112.1 MM, +25.7% YOY ( COMPARABLE +17.3%)• Sales from Golf Club and Accessories recorded mid double-digit growth thanks
to continued improvement in R&D, merchandise planning and retail operations• Minor decline in sales from Apparels and Golf Balls due to lingering lockdown
in various parts of China and raw material shortage

GOLF CLUBSNET SALES +31.2% TO JPY 11,442 MILLION(COMPARABLE +22.4%)

GROSS MARGIN +1.6PP TO 59.8%• Gross margin of non-club products under pressure due to sharp Yen
depreciation and growing inflation

APPARELSNET SALES -1.7% TO JPY 1,237 MILLIONNET SALES MIX BY PRODUCT CATEGORIES%(COMPARABLE -12.4%)

GROSS MARGIN -23.5 PP TO 30.2%

7.5
7.5
8.3

Golf Clubs

GOLF BALLS

Apparels

NET SALES -2.7% TO JPY 1,123 MILLION

Accessories & Other Related
76.7

Golf Balls(COMPARABLE -4.3%)

GROSS MARGIN -12.1 PP TO 31.9%

ACCESSORIESNET SALES +52.2% TO JPY 1,126 MILLION(COMPARABLE +42.2%)

GROSS MARGIN -15.3 PP TO 25.6%

08

PERFORMANCE OVERVIEW

BY CHANNEL

2022/2023 INTERIM RESULTS

1H FY23 NET SALES: JPY 14,927 MM / USD 112.1 MM, +25.7% YOY ( COMPARABLE +17.3%)
NET SALES MIX BY CHANNEL

DIRECT-TO-CONSUMER CHANNEL%NET SALES +29.9% TO JPY 4,567 MILLION (COMPARABLE +16.1%)
GROSS MARGIN -7.4PP TO 53.3%
30.6

83

69.4

SELF-OPERATED STORES

E-COMMERCE• Net +3 new locations;• Continued optimization of store design, visual display andconsumer experience• Operating in China, Japan and the US• Total net sales +29.2% (comparable +13.6%)

Distributors
DTC Channels

3RD PARTY RETAILERS AND WHOLSALERS
NET SALES +24.0% TO JPY 10,361 MILLION (COMPARABLE +20.2%)
GROSS MARGIN -0.5PP TO 52.4%
3,831
3RD PARTY POS
09• -313 POS, mainly in Europe, amidst the transition towards
indirect distribution modelBUSINESSHIGHLIGHT

102022/2023 INTERIM RESULTS

03

2022/2023 INTERIM RESULTS

THREE-PILLAR GROWTH STRATEGIESPRODUCTCHANNEL

BRANDING AND CONSUMER ENGAGEMENT• Continuously upgrading HONMA’s retail presence• Offering 360 degree HONMA brand experience

premium performance consumer segments• Further penetration into premium-performance• Rejuvenated TEAM HONMA with younger andtargeting golfers with 8-20 handicaps• Continue investing into the brand’s digital eco-

GOLF CLUBS• Combines traditional Japanese craftsmanshipwith latest innovative technologies• Strengthened focus on super premium and• Enriched premium performance products• Unique product offerings designed for social
media savvy female golfers

NON-CLUB PRODUCTS• 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

11

with primer locations, elevated visual design andmerchandising display to enhance consumer
experiences
segment by adding quality retailers and POS

system and HONMA’s private sphere, following
fundamental change in consumer behavior andbusiness environment post COVID-19

across all consumer touch points, pursuinggolfers in super-premium and premiumperformance segments
uprising athletes, coaches and influencers tocreate a unique community culture• Enhanced CRM system to better understandconsumers and nurture loyalty• Strengthened PR activities across all markets,

featured by CNN LIVING GOLF program duringTokyo
Olympics,
showcasing
HONMA’s
dedication towards premium club-making for 6
decadesA. CLUB PORTFOLIO OPTIMIZED2022/2023 INTERIM RESULTS

TO FOCUS ON SUPER PREMIUM AND PREMIUM PERFORMANCE CONSUMERS SEGMENTS
SUPER PREMIUM SEGMENT

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

Beres NX
Launched in Nov 2022

12

PREMIUM PERFORMANCE SEGMENT

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 GoTo be launched in Nov 2022

FOR GAME IMPROVEMENTGOLFERSHANDICAP 8-20

FOR YOUNGERFEMALE GOLFERS
IN JAPANA. CLUB PORTFOLIO OPTIMIZED2022/2023 INTERIM RESULTSIN ORDER TO FOCUS ON SUPER PREMIUM AND PREMIUM PERFORMANCE CONSUMER SEGMENTS• GOLF CLUB SALES ROSE BY 31.2% YOY TO JPY 11,442 MILLION (COMPARABLE +22.4%), MAINTAINING STRONG GROWTH MOMENTUM• GROSS MARGIN +1.6PP TO 59.8% , THANKS TO CONTINUED RETAIL PRICE MANAGEMENT AND MANUFACTURING COST OPTIMIZATIONBERESPRODUCTLAUNCHSALESPERFORMANCE

13

TOUR
WORLD

OTHERS• Beres Aizu was launched in Dec• 2-proned product approach•• TW-XP2 was launched in Sep 2022

•
•
•
•

• 1H FY23 sales +37.1%• 1H FY23 sales +17.1%• 1H FY23 sales +31.5%

•
•

•
•
•

•
•

2021, with a highly differentiablesophisticated design
Beres NX was launched in Nov 2022

(comparable 26.7%)
49.6% of club sales
Strong sales growth thanks to thesuccessful activation of Beres Aizu
worldwide

appealing both single and double
handicappers(comparable +9.6%)
18.2% of club sales
Successful go-to-market
Both TW757 and TW-XP2 received
great media buzz and consumerpurchase intent among theyounger and more avid golfers

Putters
Country specific models
Special editions
Lady Go to be launched in Nov 2022

(comparable +24.1%)
32.2% of club sales
All-time favorite to consumers
who are looking for extinguishedand exquisite cosmetics

B. ENHANCED PRODUCT RECOGNITION FOR GOLF BALLS
2022/2023 INTERIM RESULTS

AMIDST UPSTREAM SUPPLY CHAIN CONSTRAINTS• GOLF BALL SALES DECLINED SLIGHTLY BY -2.7% YOY TO JPY 1,123 MILLION (COMPARABLE -4.3%); GROSS MARGIN -12.1PP TO 31.9%• SALES AND GROSS MARGIN UNDER PRESSURE DUE TO YEN DEVALUATION AND SUPPLY CHAIN CONSTRAINTPRODUCTpyramidD1, 2-LAYER BALL

• 1H FY23 Japan golf ball sales +20.3% to JPY 912mn• Ranks #3 in terms of golf ball sales volume in Japan• Continuously prioritizing product development to meet the needs of

TW-X , 3-LAYER BALL

BERES 5 STAR, 6-LAYER BALLGOLF BALL SALESJPY MM

C AG

consumer in super premium and premium performance segments

%
6
.
8
3
+
:
R

2,659

2,974

2,211

1,805

1,148
420

14

FY16

736

FY17

FY18

FY19

FY20

FY21

FY22

C. CONTINUE NURTURING APPAREL BUSINESS
2022/2023 INTERIM RESULTS

ACROSS ASIA HOME MARKETSAPPAREL SALES - 1.7%YOY TO JPY 1,237 MILLION(COMPARABLE -12.4%)

APPAREL COLLECTION CONSISTING OF 2 DISTINCTIVE PRODUCT LINES TARGETINGPREMIUM PERFORMANCE AND FASHION ATHLETIC CONSUMER SEGMENTSGROSS MARGIN -23.5PP TO 30.2 %NEGATIVELY IMPACTED BY EXTENDED PANDEMIC
LOCKDOWN IN VARIOUS PARTS OF CHINA• Retail activities severely interrupted by extended home

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

shelter happened in multiple parts of China• Operation recovered and consumer demand rebound in 2Q,
leading to a flattish half year sales YOY• Continued

investment into productmerchandise planning and display

development,• Continued driving E-commerce capabilities on the back of
one digital eco-system, built around internet-savvy golfers
and fashionable outdoor enthusiasts

15

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

2022/2023 INTERIM RESULTS

D. OMNI DISTRIBUTION FOOTPRINT WITH ELEVATED RETAIL PRESENCE
SELF-OWNED RETAIL CHANNELSACT AS BRAND EXPERIENCE HUBS ACROSS ALL MARKETS• Sales from self-owned channels +29.9% (comparable +20.2%)• 83 self-owned stores, net increase by 3, and newly opened 14 stores, mainly in China• Same-store sales significantly improved

THIRD-PARTY RETAILERS AND WHOLESALERSCONTINUED TO DRIVE PENETRATION AND GAIN MIND SHARE• Sales from third-party +24.0% (comparable +16.1%)• Number of POS declined by 313 to 3,831•

16-378 POS in Europe, as the results of the Group’s decision focus on a smaller
but premier group of accounts

E. further INVESTING INTO THE BRAND’S digital eco-system and private sphere to drive e-commerce
2022/2023 INTERIM RESULTS

SUPPORTED BY UP-TO-DATE CONTENT MARKETING ON SOCIAL MEDIA AND CRM PLATFORMS
E-COMMERCE SALES GREW BY 29.2% (COMPARABLE +13.6%)
DRIVEN BY ACCELERATED INVESTMENT IN DIGITAL
MARKETING WITH A FULL-CHANNEL APPROACH

T-MALL FLAGSHIP STORE

US E-COMMERCE SITEWECHAT STORE

JAPAN E-COMMERCE SITE

GROWTH RATE SLOWED DOWN MAINLY DUE TO SALES LOST
DURING CHINA’S LOCKDOWN• 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
•
•
•
•
•

17

Dedicated E-commerce team and marketing resources
Social media campaigns generating traffic to online storesLivestream (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

F. RE-DEFINING HONMA: DYNAMIC, MODERN, GLOBAL
2022/2023 INTERIM RESULTS

TO DRIVE BRAND AWARENESS ACROSS ALL MARKETSCUSTOMER EVENTS
1,912 EVENTS , 25,590 PARTICIPANTS, +18.7% YOY• 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

18

F. RE-DEFINING HONMA: DYNAMIC, MODERN, GLOBAL
2022/2023 INTERIM RESULTS

TO DRIVE BRAND AWARENESS ACROSS ALL MARKETS19

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 data

F. RE-DEFINING HONMA: DYNAMIC, MODERN, GLOBAL
2022/2023 INTERIM RESULTS

TO DRIVE BRAND AWARENESS ACROSS ALL MARKETSSPONSORING 11 PROFESSIONAL PLAYERS PLUS A WIDE NETWORK OF
HONMA AMBASSADORS AND COACHES
8 JAPAN LADIESPROFESSIONAL GOLF
(JLPGA)

2 KOREA LADIESPROFESSIONAL GOLF
(KLPGA)TEAM HONMA WINNING CHAMPIONSHIP IN PROFESSIONAL TOURS

1 KOREA PGA(KPGA)• Renewed pro-sponsoring strategies to recruit additional young anduprising athletes in Asia with visible social media followers• To further enhance HONMA’s tour presence in Asia with performance-

driven audience, especially younger and avid golfers amid the promising
trend of golf development in Asia

TEAM HONMA IN MARKETING AND CUSTOMER ACTIVITIES

20

F. RE-DEFINING HONMA: DYNAMIC, MODERN, GLOBAL
2022/2023 INTERIM RESULTS

TO DRIVE BRAND AWARENESS ACROSS ALL MARKETS

21

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.

• In September 2021, HONMA was featured by CNN Living Golf at in its Tokyo

Olympics episode, showcasing HONMA’s dedication towards craftsmanshipin premium club-making for more than 60 years

FINANCIAL
REVIEW

22
2022/2023 INTERIM RESULTS

04

continuously IMPROVing major FINANCIAL METRICS
2022/2023 INTERIM RESULTSTHANKS TO THE EXUBERANT CONSUMER DEMAND AND SUCCESSFUL EXECUTION OF GROWTH STRATEGIESNET SALES+25.7%JPY MM

10,591

1H FY2020

GROSS PROFIT & GROSS MARGIN
14,927JPY MM+19.9%

11,872
9,053

5,261

1H FY2021

1H FY2022

1H FY2023

6,562
4,634

49.7%

51.2%

1H FY2020

1H FY2021

Gross Profit

EBITDANET PROFIT

JPY MM

JPY MM

9%
.
5
4
+

19.3%

4,644

14.1%

290

1H FY2020

3.2%
1H FY2021
EBITDA

1H FY2022
EBITDA Margin

31.1%

52.7%

1H FY2022

1H FY2023

Gross Margin

1H FY2023

-51
-0.5%
1H FY2020

11.4%

+

9.3pp

3,087

20.7%

-804
-8.9%
1H FY2021
Net Profit

23

55.3%

1,348

+4.3pp26.8%-2.6pp

%
0
.
29
1
+

3,183
1,489

7,866

1H FY2022
Net Profit Margin

1H FY2023

CONTINUOUS OPEX OPTIMIZATION
2022/2023 INTERIM RESULTS

TO ENHANCE EFFICIENCY AS WELL AS TO MITIGATE THE NEGATIVE IMPACT FROM COVID AND GLOBAL INFLATION
SG&A EXPENSES BRIDGE

SG&A EXPENSES BREAKDOWN

JPY MM

AS % OF SALES-3.8pp

4,932

193

108

129

14

19

239

5,634

41.5%
1.5%
4.0%

37.7%

5.3%

3.3%

2.8%
5.1%

9.4%
+8.7%

7.5%
8.0%

1H FY2022

1H FY2023

Employee benefits

A&P Expenses

Other Selling Expenses

Administrative Expenses

Depreciation of right-of-use assets

Rental Fees

1H

FY

3

11.3%

2 02

Ad

min

E xp

ens

es
De
rig prechtof- iation
use
o
ass f
e ts
Re
nta
l Fe
es

24

O th
er S
Exp ellens ing
es

s
nse
xpe
PE

A&

Em
p
ben loyee
efit
s

1H

FY

2 02

2

13.3%

7.7%

STRONG BALANCE SHEET AND CASH LIQUIDITY
2022/2023 INTERIM RESULTS

TO ENSURE STEADY AND SUSTAINABLE GROWTH AMIDST UNCERTAIN MACRO ENVIRONMENTNET OPERATING CASH FLOWCASH ON HAND

JPY MM

JPY MM-11.5%
3,702

3,277

2,576

10,222

11,203

1H FY2020

1H FY2021

12,971

17,038402
1H FY2020

1H FY2021

1H FY2022

1H FY2023

1H FY2022

1H FY2023

INTEREST-BEARING LIABILITIESINTEREST-BEARING LIABILITIES / TOTAL EQUITY

JPY MM

%

+1.3%

8,624
6,900

5,600

1H FY2020

25

%
+31.4

44.4%

6,990

31.9%

24.3%

1H FY2021

1H FY2022

1H FY2023

1H FY2020

1H FY2021

1H FY2022

26.6%

1H FY2023

2022/2023 INTERIM RESULTS

STRENGTHENED WORKING CAPITAL EFFICIENCY POST COVID-19
RECEIVABLES TURNOVER DAYS (1)RECEIVABLES TURNOVER DAYS (1)INVENTORY TURNOVER DAYS (1)

DAYS

DAYS

DAYS

87

314
68

292

-24
days

70

64

64

44

1H FY2021

1H FY2022

317

-25
days

1H FY2023

1H FY2021

1H FY2022

1H FY2023

219

226

30

28

27

65

63

65

1H FY2021

1H FY2022

1H FY2023

WIP

Finished Goods

Raw Materials

Note

200

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

26

OUTLOOK

27
2022/2023 INTERIM RESULTS

05

2022/2023 INTERIM RESULTS

OUTLOOKIn 2H FY2023,

CHALLENGES

We expect sales growth momentum to continue, fueled by multiple product activations inboth clubs and non-club categories, continued marketing investment and retail operation
improvement.

The golf industry will continue to face multiple
challenges in 2H FY2023, including

In the mid- to long- term, HONMA will continue executing its growth strategies to build aworld-leading golf lifestyle company, leveraging its unique brand legacy, innovativetechnologies and exquisite Japanese craftsmanship, and expanding distribution network.
We intend to continue pursuing the following in the years ahead:a) To further increase and regain HONMA’s market share in Asia home markets bymaintaining its leading position in the super-premium segment while making solid
inroads into the fast growing premium-performance segment.
b) To continue driving ball, apparel and accessories businesses across Asia markets tocapture the growing opportunities in the non-club categories of these regions.
c) To continue optimizing organizational set up and cost base in North America and Europe
to properly anchor near to mid-term growth amidst complex macro uncertainties.
d) To continue leveraging HONMA’s unique legacy in R&D capabilities to develop productsthat cater for latest market trends.
e) To further nurture and transform HONMA brand value into customer loyalty.

28• supply chain challenges under inflation pressure• sustained outbreak of COVID-19 which may

continue to cause market turbulence anduncertainties.

In face of such challenges, HONMA will continue totake active actions to optimize cost efficiency,
maximize liquidity and protect its employees’ health,in order to foster a solid foundation for the mid- andlong-term development.

APPENDIX

292022/2023 INTERIM RESULTS

06

APPENDIX I-BUSINESS REVIEW BY MARKET
2022/2023 INTERIM RESULTS

HOME MARKET JAPANSTEADY AND QUALITY GROWTH IN MULTIPLE PRODUCTCATEGORIES FOLLOWING FURTHER MARKET REOPENING
3.8 1.9% of Total Sales

12.5

Korea
28.4

China (Including Hong Kong and Macau)

MARKET

•
•
•
•
•

Japan
Other Regions
26.5
27.0

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

North America

FY23 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES+3.4%• BERES club family sales +72.4%• Golf Ball sales +20.3%, sales volume ranking the 3rd in Japan; Golf

NET SALESJPY MM

3,822

3,952

•

+3.4%

•

Accessories sales +56.9%
Strong recovery in consumer sentiment following further market
reopening and rejuvenated retail activities
Focused marketing campaigns and Pro-endorsement program targeting
premium-performance consumer segment

Note
1H FY2022

30

1H FY2023(1) 2021 Yano’s White Paper on Golf Industry, Japan

APPENDIX I-BUSINESS REVIEW BY MARKET
2022/2023 INTERIM RESULTS

HOME MARKET KOREA
SIGINIFICANT YOY SALES HIKE ON THE BACK TOSTRONG DEMAND AND NEW PRODUCT ACTIVATION
3.8 1.9% of Total Sales

12.5

Korea
28.4

• 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, close to 15% of total population in Korea (1)China (Including Hong Kong and Macau)
Japan
Other Regions

26.5
27.0

North America

1H FY23 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES +97.1% (COMPARABLE +94.8%)• Golf club sales +137.6% (comparable +135.9%)• BERES club family sales +85.5% (comparable +85.1%), boosted by

NET SALESJPY MM

4,237
2,150

1H FY2022

31

MARKET+97.1%

1H FY2023•

successful launch of new products since early 2022
Tour World club family sales +85.0% (comparable +75.8%), following potent
market penetration since the Company took back the distributorship in
June 2021

Note(1) Source : KGPA, Korea Golf Association 2017

APPENDIX I-BUSINESS REVIEW BY MARKET
2022/2023 INTERIM RESULTS

HOME MARKET CHINA (INCL. HK & MACAU)
EXUBERANT DEMAND AND CHANNEL EXPANSIONPARTIALLY OFFSETS NEGATIVE IMPACT FROMEXTENDED COVID-RELATED LOCKDOWN
3.8 1.9% of Total Sales

Korea

12.5

28.4

China (Including Hong Kong and Macau)• 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 apparelJapan
Other Regions
26.5
27.0

North America

FY23 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeMAINLAND CHINA NET SALES +10.5% (COMPARABLE -4.8%)• Golf club sales +20.7% (comparable +3.9%), highlighting Tour World club

NET SALES•JPY MM

3,554

3,926
+10.5%+43.3%

1H FY2022

1H FY2023

Mainland China

32

MARKET

71

102

1H FY2022

1H FY2023

Hong Kong/ Macau•family sales grew by 62.4%(comparable +39.9%)
Apparel sales +4.6% (comparable -9.9%); sales of SS23 Collection was
severely interrupted in 1Q FY23 due to temporary closure of thewarehouse in Shanghai during the city’s 2-month lockdown
Efficient react towards the uprising golf participation by adding/reopening 20 new stores on golf courses or driving ranges with larger store
size and upgraded merchandise display

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

APPENDIX I-BUSINESS REVIEW BY MARKET
2022/2023 INTERIM RESULTS

HOME MARKET NORTH AMERICABUILDING A UNIQUE DIRECT-TO-CUSTOMERDISTRIBUTION MODEL TO CAPTURE SUPERPREMIUM AND PREMIUM PERFORMANCE SEGMENT
3.8 1.9% of Total Sales

12.5

Korea
28.4

MARKET••••

China (Including Hong Kong and Macau)

Largest golf market in the world with 53% of the global golf retail sales (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

Japan
Other Regions
26.5
27.0

North America

1H FY23 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES +31.6% (COMPARABLE +9.9%)• Golf club sales +30.0% (comparable +8.5%); Tour World +39.0%

NET SALESJPY MM

565
430+31.6%••(comparable +16.1%)
POS +8 to 345 in total;
Enhanced brand and product awareness through Direct-to-Consumer (DTC)
distribution strategy

Note
1H FY2022

33

1H FY2023(1) Source : Golf DataTech’s 2018 research reportAPPENDIX I-BUSINESS REVIEW BY MARKET
2022/2023 INTERIM RESULTS

HOME MARKET EUROPE
EFFECTIVE AWARENESS ELEVATION AND
IMPROVED EFFICIENCY
3.8 1.9% of Total Sales

12.5

MARKET• 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
28.4

China (Including Hong Kong and Macau)
Japan
Other Regions

26.5
27.0

North America

1H FY23 HALF YEAR PERFORMANCE HIGHLIGHT

EuropeNET SALES -46.0% (COMPARABLE -54.4%)• POS -378 to 237 in total• Provisional sales decline following the Group’s decision to change the

NET SALESJPY MM

530•
286

distribution model in this region by focusing on a smaller but premiergroup of accounts that are most capable to represent HONMA
Continued optimising its organisational set up and cost base to properly
anchor growth amidst macro uncertainties-46.0%Note
1H FY2022

34

1H FY2023(1) Source : KGPA, Korea Golf Association 2017

CONSOLIDATED P&L
2022/2023 INTERIM RESULTS

For the six months ended 30 September
2022
JPY

2021
%

JPY

YoY Change%%(In thousands, except for percentages and per share data)
Consolidated Statement of Profit or Loss
14,927,415

100.0

11,871,947

100.0

25.7

Cost of sales-7,061,101-47.3-5,310,098

-44.7

33.0

Gross profit

7,866,314

52.7

6.561.849

55.3

19.9

Other income and gains

1,696,655

11.4

203,763

1.7

732,7

Selling and distribution expenses-4,874,327-32.7-4,301,589

-36.2

13.3

Administrative expenses-759,481-5.1-630,604

-5.3

20.4

Other (expenses)/income, net-155,530-1.0-47,588

-0.4

226.8

Finance costs-52,506-0.4-45,365

-0.4

15.7

Finance income

7,475

0.1

6,029

0.1

24.0

Profit before tax

3,728,600

25.0

1,746,495

14.7

113.5

Income tax expense-641,218-4.3-398,144

-3.4

61.1

Net profit

3,087,382

20.7

1,348,351

11.4

129.0

Revenue

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

5.10

2.23

129.0

Non-IFRS Financial Measures

35

Operating Profit

2,187,475

14.7

1,590,320

13.4

37.5

Net Operating Profit

1,588,856

10.6

1,194,550

10.1

33.0

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.

2022/2023 INTERIM RESULTSCONSOLIDATED BALANCE SHEET

Financial Position as at
2022.9.30

2022.3.31

JPY

JPY

(In thousands, except for percentages and per share data)
Consolidated Statement of Financial Position
AssetsNon-current assets

8,508,477

8,090,354

Current assets

35,706,753

29,361,191

Total Assets

44,215,230

37,451,545

Non-current Liabilities

2,616,614

1,972,733

Current Liabilities

15,298,296

13,822,733

Total Liabilities

17,914,910

15,795,466

Net current assets

20,408,457

15,538,458

Total assets less current liabilities

28,916,934

23,628,812

Net Assets

26,300,320

21,656,079

Total Equity

26,300,320

21,656,079

Liabilities36

2022/2023 INTERIM RESULTSCONSOLIDATED CASH FLOWS37

For the six months ended 30 September
2022

2021

JPY

JPY

(In thousands, except for percentages and per share data)
Cash and cash equivalents at the beginning of year

14,454,554

10,771,897

Net cash flows generated from operating activities

3,277,219

3,702,380

Net cash (used in) investing activities-228,919-50,854

Net cash flows (used in) financing activities-1,267,049-1,643,774

Net increase in cash and cash equivalents

1,781,251

2,007,752

Net effect of foreign exchange rate changes

802,256

187,381

Cash and cash equivalents at the end of year

17,038,061

12,967,030

For more inquiries
Please contact
ir@honma.hk