honma golf (6858.hk)

Fy2021/22

interim results
November 2021

one of the most prestigious and iconic brands in the golf industry

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INTERIM REPORT 21/22

01

1.

HONMA

INTERIM REPORT 21/22

02

#1 Premium golf brand founded in 1959, Japan60+ years of dedications towards Quality and Craftsmanshipthe only vertically integrated golf company in the worldhonma
In-house R&D andclub manufacturing••

INTERIM REPORT 21/22

Premium & Performance-driven
Golf Products

237 R&D personnel and skilledcraftsmen operating out of 163,000 m2
of manufacturing base in Sakata,
Japan

•
•

Advanced and sophisticated design
and manufacturing capacity, housed
under one roof•

Complete diversified range of products
Club portfolio focusing on superpremium and premium-performance
consumer segments
Comprehensive range of premium nonclub products including balls, apparels
and accessories

Extensive DTC +distribution network•••

Presence in over 50 countries•

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

77 self-operated stores
4,117 POS via third party retailers &wholesellers

03

2.

PERFORMANCEOVERVIEWINTERIM REPORT 21/22

04

record sales and profit growth versus same period of 2020 and 20196 MONTHS ENDED
30 SEP 2021

Growth vs. same period
in 2020 (JPY Base)

Growth vs. same period
in 2019 (JPY Base)

JPY 11,871.9MM / USD 106.8MM (1)+31.1%+12.1%

55.3%+4.1pp+5.6pp

EBITDA- EBITDA Margin

JPY 2,634.9MM / USD 23.7MM (1)22.2%+459.4%+17.0pp+1342.0%+20.5pp

Net Profit- Net Profit Margin

JPY 1,348.4MM / USD 12.1MM (1)11.4%+JPY 2,151.9MM+20.2pp+JPY 1,399.6MM+11.8pp

JPY 2.23 / HKD 0.16 (1)+JPY 3.56+JPY 2.31

Net Operating Cash Flow

JPY 3,702.4MM / USD 33.3MM (1)+43.7%+820.0%Net Cash Position

JPY 6,067.0MM / USD 54.6MM (1)+135.3%+31.3%

Proposed Dividend

JPY 1.5 / share(Dividend Payout Ratio: 67.3%)--JPY 0.14 / share

Net Sales
Gross Profit Margin

key
financials

Reported Earnings Per ShareNote(1) Exchange rate: 1 USD = 111.15 JPY; 1 HKD = 14.29 JPY

INTERIM REPORT 21/22

05

sales Overview

by market

1hFY22 net sales
JPY 11,872 Million / USD 107 Million, +31.1%%

Sales from China, Rest of the World and Europe exceeded pre-COVID level,
despite headwind from supply chain constraints.
Sales from South Korea declined solely due to component shortfall, but
shipment will resume from December 2021.

4.5 3.6
11.1

Performanceoverview

Vigorous YOY sales growth across main markets, driven by continued inroad
into performance club and non-club segment and pent-up demand.

32.2+29.2%

18.1

30.5

EUROPE+54.0%

Sales: JPY 530 MM

china(incl. hk & macau)
Sales: JPY 3,625 MM+105.9%japan
Sales: JPY 3,822 MM-31.0%+40.7%
north america
Sales: JPY 430 MM

south korea
Sales: JPY 2,150 MMJapan
China (Including Hong Kong and Macau)
Korea
Rest of the World
EuropeNorth America

INTERIM REPORT 21/22+30.0%
rest of the world
Sales: JPY 1,317 MM

06

sales Overview

by product category

1hFY22 net sales
JPY 11,872 Million / USD 107 Million, +31.1%%

Sales from all product categories surged, on the back of a strong rebound of
consumer demand, enhanced HONMA brand awareness and successful
activation of various products

Golf clubs

6.2

Net sales +23.9% to jpy 8,719 million
gross margin +7.4pp to 58.2%•

Robust recovery across all product families and retailchannels•

Sales from Tour World family +125.8%, driven by the
successful activation of GS, the new performanceenhancement club series launched in Jan 2021

9.7

Performanceoverview

10.6

apparels
73.4

Golf Clubs
Apparels
Golf Balls
Accessories & Other Related

INTERIM REPORT 21/22

Net sales +151.3% to jpy 1,259 million
gross margin -16.0pp to 53.7%•••

golf balls

China and Korea continued fueling growth
Growing brand awareness and consumer mind share
Continued upgrade of product development, merchandiseplanning & retail operations

Net sales +24.3% to jpy 1,154 million
gross margin -4.9pp to 44%•

Continued mid-double digit growth for the past 6 years with
41.1% of CAGR•

Pivoting a three product strategies targeting low, mid andhigh price segments07

sales Overview

by channel

1hFY22 net sales
JPY 11,872 Million / USD 107 Million, +31.1%

Direct-to-Consumer channel
net sales +34.6% to jpy 3,516 million; gross margin +4.3pp to 60.7%
77
self-operated stores%8

US mobile vans

Performanceoverview+8 new locations, net -3 stores•

Visible improvement in same-store-sales (SSS)••-4 vans•

Operating in China, Japan, South Korea and theUS•

Total net sales +99%; net sales from China +115%

Continuously upgrading store design, visualdisplay and consumer experience

Performing fitting events at major golf courses

29.6

E-Commerce
70.4

Distributors
DTC Channels

INTERIM REPORT 21/22••

3rd party retailers and wholsalers
net sales +29.7% to jpy 8,356 million; gross margin +3.9pp to 53.0%••

4,117 POS, number of POS +182•

Sales from Japan +265.3% as most 3rd party retailers recovered from lingered
business closure during the pandemic.

Sales went up as a result of pent-up demand and improved retail environment
following ease of COVID related restrictions

08

3.

BUSINESSHIGHLIGHT

INTERIM REPORT 21/22

09

business
highlight

productchannelBranding and Consumer engagement

GOLF CLUBS•Continuously extending HONMA’s retailpresence with primer location, elevatedvisual design and merchandising display toprovide better consumer experiences••

Sales from self-operated channels up by
34.6% while single-store-sales increased
significantly, in most cases, surpassing preCOVID level thanks to improved productofferings and continued operational
optimization

Upgraded 360 degree HONMA brandexperience in retail spaces, customer
events and digital channels in pursuit ofconsumers in super-premium and premiumperformance segments•

Enriched TEAM HONMA with young anduprising athletes, coaches and influencers•

Enhanced CRM system to better understandour consumers and nurture consumer
loyalty•

Strengthened recognition by the global golf
community; featured by CNN LIVING GOLF
program during Tokyo Olympics,
showcasing HONMA’s dedication towards
premium club-making for 6 decades•••

Strengthened focus on super premium andpremium performance consumer segments
Enriching premium performance products
targeting golfers with 8-20 handicaps
Sales from clubs rose by 23.9%, led by sales
from premium performance segment whichgrew by 125.8%

non-club products•••

INTERIM REPORT 21/22

Steady advancement of ball and apparelbusinesses in Asia home markets
Ball sales exhibited a CAGR of 41.1% overthe past 6 years; apparel sales grew at a
CAGR of 53.3% over the past 3 years since
its relaunch in 2019
Sales from apparel went up by 151.3% andovertook balls and accessories to become
the 2nd largest product category, first timesince its relaunch in Spring 2019•

Sales from 3rd party retailers completely
recovered from the business closure during
the pandemic, up by 29.7%•

The momentum in E-commerce remained
strong post COVID driven by profoundchange in consumer behavior and businessenvironment through digital transformation10

super premium segment

premium performance segment

other club products
putters, country specific models,
special editions

Beres 07

tour release series

Daruma Series

serious golfers handicap 0-12

A.

TR 20/21

CLUB PORTFOLIO
optimized
tO FOCUS ON SUPERPREMIUM AND PREMIUMPERFORMANCE CONSUMERS
SEGMENTS

Beres 07

performance enhancement series

Sakura Series

game improvement golfers handicap 8-20
GS

INTERIM REPORT 21/22

11

sales from golf clubs shot up by 23.9% YOY (+8.0% vs 2019) to JPY 8,719 million
Most of the markets delivered mid-double digit growth, if not better, led by Japan whose sales +151.5%

Beres

A.

CLUB PORTFOLIO
optimized
tO FOCUS ON SUPERPREMIUM AND PREMIUMPERFORMANCE CONSUMERS
SEGMENTS(cont’d)

INTERIM REPORT 21/22

product
launch••sales
performance

Beres 07 launched since Dec
2019, admist COVID
Next generation planned to belaunched in Dec 2021••

1H FY22 sales +0.6%•

Overall growth remained flattish,
hampered by temporary supply
chain constraint•

Most major markets delivered
double-digit if not triple-digit sales
growth

47.5% of club sales

Tour World•

2-proned product approach
appealing both double and single
handicappers•

GS was launched in Feb 2021, tobe completed by TW757 in Mar
2022

•
•

1H FY22 sales +125.8%•

Successful activation of GS, aperformance enhancement productlaunched to enrich Tour World
family20.4% of club sales

OTHERS•••

Putters••

1H FY22 sales +39.7%•

All-time favorite to consumers who
are looking for an extinguished andexquisite cosmestics

Country specific models
Special editions

31.8% of club sales

12Golf ball sales increased by 24.3% YOY (+16.5% vs 2019) to JPY 1,154 million
pivoting a pyramid product strategy while continuously extending HONMA’s mind and market shares

B.
STEADY REVENUEGROWTH IN
GOLF BALLS
across asia home markets

D1 2020, 2-LAYER BALL••

Beres 3 Star, 3-LAYER BALL

Continued product development efforts with Leading R&D
capabilities and launched products with own patent

HONMA X4, 4-LAYER BALL

Beres 5 Star, 6-LAYER BALL

golf ball sales
JPY MM

%
1
.
1
4
:+
CAGR

Dedicated sales force and product marketing resources todrive market penetration in Japan, China and South Korea

1,154
990

928

650
438
146
1HFY16INTERIM REPORT 21/22

233

1HFY17

1HFY181HFY191HFY20

1HFY21

1HFY2213

APPAREL sales surged 151.3% YOY (+134.9% vs 2019)
to JPY 1,259 million
thanks to continuously improved product offerings
and retail operation optimization as well as pent down
demandc.
continue
nurturingapparel business

•

•

•

INTERIM REPORT 21/22

premium PERFORMANCE line
Professional performance wear designed for golfers to perform perfectly on thecourse, featuring high-tech functional fabrics and 3D synchronized cutting

Sales in Japan +112.8%•

Retail partners recovering from business closure during
the pandemic•

Driving apparel product awareness through young anduprising Team HONMA pro players on tour and in
marketing exposure

Sales in Mainland China +123.8%•

across asia home markets

apparel collection consisting of 2 distinctive
product lines targeting premium performanceand fashion athletic consumer segments

Fast-evolving sports market with growing mass interests
in outdoor sports•

HONMA brand apparel stores +5 to 40 in total•

Elevated retail operations and merchandise display•

E-commerce campaigns and digital marketing efforts

FASHION ATHLETIC line
Trendy athleisure wear targeting golfers and pan-golfers, featuring fashionable
and diverse designs and details

Sales in South Korea +384.5%•

Fastest growing market in woman’s sports fashion•

HONMA brand apparel stores +4 to 29 in total•

Dedicated apparel team formed in 201914

Self-owned retail channels
act as brand experience hubs across all markets

d.
omni
distribution
footprint withelevated retailpresence•••

Sales from self-owned channels +34.6%
77 self-owned stores; 8 new stores opened
8 mobile vans in the US, bring HONMA fitting experience toconsumer’s home course

South Korea, Sejong

US
Mobile Van

Third-party retailers and wholesalers
continued to drive penetration and gain mind share••

Japan, Tokyo

Sales from third-party +29.7%
Number of POS increased by 182 to 4,117, led by•+102 in the US and +37 in Europe•

Encouraged by the coming back of golfers post COVID-19
and enhanced brand recognition in both markets

China, SHENZHENINTERIM REPORT 21/22

CHINA, SHANGHAIEurope, Paris15

US
e-commerce site

E-commerce SALES jumped up by 99.0%
Driven by- Accelerated digital marketing, in particular content
marketing efforts and full-channel approache.

renewede-commerce
strategies
supported by up-todate social media andcrm platforms

INTERIM REPORT 21/22

•

•

•

E-commerce platforms in major markets• China: Tmall and JD• Japan & US: self-operated E-commerce site
• South Korea: Lotte
E-commerce sales grew significantly in all above
mentioned markets, led by China whom recorded a
YOY growth of +114.9%• 2021 ‘Double 11’ campaign GMV +107%
Investment into E-commerce business• Dedicated E-commerce team and marketing
resources• Livestream sales campaign launched on Ecommerce platforms• Search engine optimization and in store visual
updates• Full channel CRM system to upgrade loyalty
program and improve consumer experiences

tmall
flagship store

jd
flagship store

japan
e-commerce site16

driving brand awarenessacross all markets

F.
Re-defining HONMA

Dynamic,
Modern,GlobalINTERIM REPORT 21/22

customer events
2,008 events (+48% yoy)
21,552 participants (+40% YOY)•

The activities were mainly held on golf courses withdedicated fitters•

Integrated brand experience and retail activities
targeting consumers in super premium and premium
performance segments•

Key to the continued enhancement of HONMA’s brandand product awareness and consumer impression•

Increase in rounds played following global easing of
COVID related restrictions and boosted golf participation.

17

upgraded digital communication throughRelaunched Global Website &All-channel social media accounts•

F.

• To convey consistent brand image and enhancebrand awareness across all markets

Re-defining HONMA

Dynamic,
Modern,GlobalFrequent updates on the relaunched global website
and social media platforms• To connect digital platform with retail activities• To own the entire consumer experience andrelevant data
• To recruit and engage with younger golfers•

New forms of digital contents / campaigns rolled out
during the pandemic and beyond(cont’d)

INTERIM REPORT 21/22

18

Sponsoring TEAM HONMA players
15 TEAM HONMA
Pro-players

F.
Re-defining HONMA

Dynamic,
Modern,Global3 Japan Golf Tour

8 Japan Ladies

4 Korea Ladies(JGTO)

Professional Golf (JLPGA)

Professional Golf (KLPGA)•In Jan 2021, 6 uprising young JLPGA athletes
were added onto TEAM HONMA Japan•The new partnership aims to further enhance
HONMA’s tour presence in Asia with its
performance-driven consumers, especially
young millennial golfers amid the promising
trend of golf development in Asia

1 EUROPEAN TOURTeam HONMA winning championship in Professional Tours

THideto Tanihara won
2021 Mitsui Sumitomo VISA
Taiheiyo Masters

MIYU GOTO won KANEHIDEMIYARABI OPEN

Team HONMA in marketing and customer activities
Team HONMA with fans(cont’d)
Lee Bo-mee in new GS
campaign video

Rumi Yoshiba
testing BERES drivers

INTERIM REPORT 21/22

Team HONMA in GS WOW
Challenge Campaign

19Partnership with local pros, coaches & influencers•

Collaboration with pros, instructors & industry influencers both on tour and on digital platforms in multiple markets•

To increase brand awareness with younger, active and performance-driven golf communities

F.
Re-defining HONMA

Dynamic,
Modern,Global(cont’d)

US Top 50 golf instructor Martin Chuck promoting HONMA brand andproducts through his own social media, golf lessons and industry
partners like Golf Channel and Golfpass.com

INTERIM REPORT 21/22

Partnership with local pros and influencers in multiple markets

20Other brand PR & Media exposure•

To communicate and reinforce the key brand image as being
premium, performance-driven as well as dynamic and modern
through omni channels from golf magazines and TVCs, to golf
simulator ads and celebrity show virtual ads.

•

In September 2021, HONMA was featured by CNN Living Golf
at in its Tokyo Olympics episode, showcasing HONMA’s
dedication towards craftsmanship in premium club-making
for more than 60 years.

F.
Re-defining HONMA

Dynamic,
Modern,Global(cont’d)

INTERIM REPORT 21/22

21

4.

FINANCIALREVIEW

INTERIM REPORT 21/22

22

NET SALES

Gross Profit & GROSS Margin

JPY MM

JPY MM1+31.

10,591

visibleimprovements
in All Financial
Metrics

11,872
5,261

9,053

1HFY2021

1HFY2022+4.1pp

49.7%

51.2%

1HFY2020

1HFY2021

net profit

JPY MM

JPY MM

9.
4%

EBITDA

%

5.2%
471

183
1HFY2020
EBITDA1HFY2021

6,562

4,634
55.3%

1HFY2022

Gross Profit

1.7%

INTERIM REPORT 21/22.6+41

Gross Margin

6
+2

2,635

%
8
.
7

+4
5

thanks to the
exuberant demand andthe successful
execution of growthstrategies

1HFY2020

%

1,348
11.4%

p
+17p

22.2%

1HFY2020-51-0.5%
1HFY2022

EBITDA Margin

1HFY2021 +2

p
p
3
0.
1HFY2022

-8.9%
-804

Net Profit

Net Profit Margin23

SG&A Expenses

SG&A Expenses Breakdown

JPY MM

AS % OF SALES

193

-2

5.0%

2%

9.2%

41.5%
2%

6.5%

4.0%

13.0%

-4.3%

5,152

5.3%

13.1%

4,932

8.0%
10.2%

Se
llin
gE

pre
cia
tio
xp
en
no
ses
f ri
gh
t-o
f -u
se
Ad
a ss
mi
ets
nis
tra
tiv
eE
xp
en
ses
Re
nta
lF
ees

ns
xp
e

1HFY22

9.4%

15.8%

17.5%

1HFY2020

1HFY2021

Employee Benefits
Administrative Expenses

13.3%

1HFY2022

Other Selling Expenses
Depreciation of Right-of-Use Assets

A&P Expenses
Rental Fees

De

Oth
er

Em
plo
yee

Be

ne

fits

es

8.8%

1HFY21

INTERIM REPORT 21/22

50.2%
3.6%

PE

to fuel growth aswell as to mitigate thenegative impact fromCOVID and supply chain
disruption

2%

-202

-223

A&

Effective
efficiency
improvement
initiatives

-5

56.9%

19

24

Net Operating Cash Flow

cash on hand

JPY MM

JPY MM+4

Coherent
policies onstrong cash
liquidity andhealthy capital
structure
To ensure steady andsustainable growthamidst uncertain
macro environment%

12,967

3,702
11,203

2,576

10,222402
1HFY2020

1HFY2021

1HFY2022

1HFY2020

1HFY2021

1HFY2022

Interest-bearing Liabilities

Interest-bearing Liabilities / Total Equity

JPY MM%

8,624-20.0%

44.0%

6,900

5,600

1HFY2020

INTERIM REPORT 21/22

3.7%

.8
5
1
+

31.9%

24.3%

1HFY2021

1HFY2022

1HFY2020

1HFY2021

1HFY202225

Receivables Turnover Days (1)Payables Turnover Days (2)Inventory Turnover Days (2)JPY MM

JPY MM

JPY MM

116

112

Strengthened
Working Capital
Efficiency
Post COVID-19

70-44 days69+3 days

317

309

314

215

219

226

24

30

28

70

65

63

1HFY2021

FY2021

1HFY2022

Raw MaterialWork in Process-5 days64

68

1HFY2021

FY2021

1HFY2022

1HFY2021

FY2021

1HFY2022

Finished Goods

Note(1) Turnover days are calculated using the average of the opening, mid year and closing balance of the relevant periods(2) Turnover days are calculated using the average of the opening and closing balance of the relevant periods.

INTERIM REPORT 21/22

26

5.

outlook

INTERIM REPORT 21/22

27

outlook

outlookchallenges

In the remaining of FY2022, we expect sales growth momentum to continue, fueled by therenewals of multiple club products and festive season sales, leading the way to a solid fullyear results.

The golf industry will continue to facemultiple challenges in the remainingof FY2022, including

We have already seen satisfying developments from October and November’s operational
figures. Supply chain hiccup in South Korea has also been relieved and shipments are
resumed from December.

•supply chain challenges under
inflation pressure•

sustained outbreak of COVID-19
which may continue to cause
market turbulence anduncertainties.

From a mid-term perspective, HONMA will continue executing its growth strategies to build
a world-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 pivot growth in North America and Europe based on the updated product and DTC
distribution strategies.

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

INTERIM REPORT 21/22

28

6.

appendix

INTERIM REPORT 21/22

29

strong recovery following lifting ofcovid-related restrictions%

4.5 3.6
11.1
32.2

Appendix I

Business
Reviewby Market

18.1

•
•

2nd largest golf equipment market in the world•

2,290 golf facilities, representing half of the total facilities in
Asia (2)••Around 12 million golf population (3)Total golf product market size in 2020 approximates to USD 1.7
billion by forecast (1)Hideki Matsuyama’s win in the US Masters Championship in Apr
2021 is seen to be a boost for Japan’s golf market

30.5

Japan
Korea
EuropeChina (Incl. HK and Macau)
Rest of the World
North America

HOME MARKET

Japan

marketnet sales
3,822

JPY MM

1,856

1HFY21

half year performance review•

Japan’s retail business shows strong recovery following theeasing of COVID related restrictions••

Golf club sales +151.5%, golf ball +40.5%, apparel +112.8%
Sales from third party distributors +265.3%, from self-owned
channels +18.8%+105.9%1HFY22Note(1) 2020 Yano’s White Paper on Golf Industry, Japan(2) 2018 Yano’s White Paper on Golf Industry, Japan(3) Frost & Sullivan

INTERIM REPORT 21/22

30

sales declined due to component
shortfall%

4.5 3.6
11.1

Fast growing and under-penetrated market•

6.3 million of golf population, close to 15% of total population in
Korea (1)

3rd largest golf equipment market in the world with USD 650
million equipment sales in 2018 (1)

18.1
30.5

Japan
Korea
Europehalf year performance review

China (Incl. HK and Macau)
Rest of the World
North America

HOME MARKET

korea

•
•

32.2

Appendix I

Business
Reviewby Market

marketnet sales•

South Korea sales declined due to club product component
shortfall. Up to the reporting date, the constraint has been
substantially relieved and shipments are expected to resume
from December 2021•

Apparel sales +384.5%; addition of 4 new apparel brand stores
to a total of 29

JPY MM

3,116
2,150-31.0%

1HFY21

INTERIM REPORT 21/22

1HFY22Note(1) Source : KGPA, Korea Golf Association 201731

Robust growth driven by successful
growth strategies and unprecedented
increase in demand

496 golf courses, around 1 million golf population (1)Solid and growing demand in active wear and fashion-athletic
apparel

32.2
18.1

half year performance review
30.5

Japan
Korea
Europemainland china• Strong growth momentum remained into FY22 (116% sales

China (Incl. HK and Macau)
Rest of the World
North America

growth in FY11)•••

HOME MARKET(incl. HK & Macau)

New and fast growing golf market

11.1

Appendix I

china

•
•
•

4.5 3.6%

Business
Reviewby Market

marketnet sales
JPY MM

Evolving sports market with growing interests in outdoor sports
Golf club sales +38.8%, golf ball +13.0%, apparel +123.8%
Addition of 5 new apparel brand stores to a total of 40

3,554
2,301
+54.4%+35.7%

1HFY21

1HFY22Mainland China

INTERIM REPORT 21/22

52

71

1HFY21

1HFY22

Hong Kong

Note(1) Source : Forward Golf White Paper Report 201732

Effective awareness elevation andcontinued POS increase
4.5%

market••3.6

Mature but fragmented golf market
England, Austria, Germany, France and Sweden in total
accounts for around 12% of the world’s golf equipment sales,
which approximates to USD 1 billion (1)

11.1
32.2

Appendix I

Business
Reviewby Market

18.1

half year performance review

30.5

Japan
Korea
EuropeChina (Incl. HK and Macau)
Rest of the World
North America•

Enhanced brand awareness and product recognition withperformance-driven club segments••

Club sales +37.3%, Tour World sales +193.2%
POS +37 to 628 in total

NEW MARKET

EUROPEnet sales
JPY MM

530
410+29.2%

1HFY21

INTERIM REPORT 21/22

1HFY22Note(1) Source : KGPA, Korea Golf Association 201733

building a unique direct-to-customer
distribution model to capture superpremium and premium performance segment
3.6

%

4.5
11.1

Appendix I

Business
Reviewby Market

32.2

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

30.5

Japan
Korea
EuropeChina (Incl. HK and Macau)
Rest of the World
North America

net sales

half year performance review•

Enhanced brand and product awareness through effective
Direct-to-Consumer (DTC) approach••

Golf club sales +27.5%; Tour World sales +226.9%

JPY MM

POS +100 to 336 in total; 8 mobile vans performing fitting
events on major golf courses

430
305

1HFY21

INTERIM REPORT 21/22

•

18.1

NEW MARKET

North
America

market+40.7%

1HFY22Note(1) Source : Golf DataTech’s 2018 research report34For the six months ended 30 September
2021.9.30
JPY

2020.9.30
%

JPY

%

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

11,871,947

100.0

9,052,973

100.0

31.1

Cost of sales-5,310,098-44.7-4,418,599

-48.8

20.2

Gross profit

6.561.849

55.3

4,634,374

51.2

41.6

203,7631.7

362,048

4.0

-43.7

Selling and distribution expenses-4,301,589-36.2-4,319,244

-47.7

-0.4

Administrative expenses-630,604-5.3-832,987

-9.2

-24.3

Other (expenses)/income, net-47,588-0.4-244,568

-2.7

-80.5

Finance costs-45,365-0.4-39,108

-0.4

16.0

Finance income

6,029

0.1

8,109

0.1

-25.7

Profit before tax

1,746,495

14.7-431,376

-4.8

504.9

Income tax expense-398,144-3.4-372,149

-4.1

7.0

Net profit

1,348,351

11.4-803,525

-8.9

N/A

Other income and gains

Consolidated
P&L

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

2.23

-1.33

N/A

Non-IFRS Financial Measures
Operating Profit

1,590,320

13.4-548,856

-6.1

N/A

Net Operating Profit

1,194,550

10.1-850,219

-9.4

N/A

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.

INTERIM REPORT 21/22

35

For the six months ended 30 September
2021.9.30

2021.3.31
JPY

JPY(In thousands, except for percentages and per share data)
Consolidated Statement of Financial Position
AssetsConsolidatedbalance sheet

INTERIM REPORT 21/22

Non-current assets

8,090,354

8.862,108

Current assets

29,361,191

27,631.389

Total Assets

37,451,545

36,493,497

Non-current Liabilities

1,972,733

2,355,906

Current Liabilities

13,822,733

12,816,455

Total Liabilities

15,795,466

15,172,361

Net current assets

15,538,458

14,814,934

Total assets less current liabilities

23,628,812

23,677,042

Net Assets

21,656,079

21,321,136

Total Equity

21,656,079

21,321,136

Liabilities

36

For the six months ended 30 September
2021.9.30

2020.9.30
JPY

Consolidated
cash flows

INTERIM REPORT 21/22

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

10,771,897

10,472,793

Net cash flows generated from operating activities

3,702,380

2,576,358-50,854-384,109

Net cash flows (used in) financing activities-1,643,774-1,328,983

Net increase/(decrease) in cash and cash equivalents

2,007,752

863,266

Cash and cash equivalents at the end of year

12,967,030

11,202,593

Net cash (used in) investing activities

37

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