HONMA GOLF LIMITED STOCK CODE:6858.HK

Fiscal Year 2022/23
ANNUAL RESULTSONE OF THE MOST PRESTIGIOUS AND ICONIC BRANDS IN THE GOLF INDUSTRY

June 2023

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01

CONTENTS
01

HONMA

02

PERFORMANCE OVERVIEW

03

BUSINESS HIGHLIGHT

04

FINANCIAL REVIEW05

OUTLOOK

06

APPENDIX

02

01
03

#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 MANUFACTURING••COMPREHENSIVE CLUB AND
NON-CLUB PRODUCT PORTFOLIO

227 R&D personnel and skilled craftsmen
operating out of 163,000 m2 of manufacturingbase in Sakata, Japan••

Diversified range of products

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

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

Club portfolio focusing on super-premium andpremium-performance consumer segments

EXTENSIVE DTC +DISTRIBUTION NETWORK••

Presence in over 50 countries•

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

Unique omni channel, 90 self-operated stores
overlayed with 3,717 third party POS

04

02
05

In FY2023, the group faced multiple challenges including sharp devaluation in Japanese Yen, an unexpected COVID outbreak and weak
consumption sentiment in China. Nevertheless, HONMA relentlessly fueled growths in markets outside China while sustaining its balance sheet.
Changevs Full Year Ended 31 Mar 2022

KEY FINANCIALS

Full Year Ended 31 Mar 2023

Net Sales

JPY 29,495 MM / USD 218.8 MM (1)nominal +1.8%
comparable -2.5%

50.8%-3.3pp

EBITDA- EBITDA Margin

JPY 5,974 MM / USD 44.3 MM (1)20.3 %-35.8%-11.9pp

Net Profit- Net Profit Margin

JPY 3,256 MM / USD 24.1 MM (1)11.0%-47.4%-10.3 pp

JPY 5.38 / HKD 0.31(3)-47.4%Net Operating Cash Flow

JPY 3,676 MM / USD 27.3 MM (1)-37.9%Net Cash Position

JPY 6,795 MM / USD 51.1 MM (2)+0.6%

Proposed Dividend

Proposed Final: JPY 1.50 /share
Declared Interim: JPY 1.50 /share(Full Year Dividend Payout Ratio: 55.8%)-14.3%

Gross Profit Margin

Reported Earnings Per Share

Note (1) Exchange rate: 1 USD = 134.83 JPY(2) Exchange rate: 1 USD = 132.93 JPY(3) Exchange rate: 1 HKD = 17.20 JPY

06

•Among the Group’s main markets, Japan, Korea and the US recorded solid sales growth of 15.6%, 3.8% and 3.2%, respectively, on the back of a strong rebound of
consumer demand, potent product and marketing strategies, and successful activation of various HONMA products.

•

China on the other hand showed a lower than expected growth of 2.0% as the market experienced widespread disruptions in both 1H and 2H of the year, resulting frompandemic lockdown in multiple cities during 1H FY23, followed by a nationwide COVID outbreak in 2H FY23.

NET SALES MIX BY MARKETNET SALES GROWTH (nominal/comparable)%%

3.5 1.5
11.3

33.3-68.2%/-72.9%(2)EUROPESALES: JPY 443 MM

24.0+2.0%/-6.9%(1)CHINA(INCL. HK&MACAU)SALES: JPY 7,795 MMJAPAN

SALES: JPY 9,822 MM+3.8%+3.2%/-11.1%
NORTH AMERICA

SALES: JPY 1,024 MM

SOUTH KOREA

26.4

Japan
China(Including Hong Kong and Macau)
Korea
Other Regions
North America
Europe+15.6%SALES: JPY 7,089 MM-8.0%/-18.8%
OTHER REGIONSSALES: JPY 3,323 MM

Note (1) On a constant currency basis, net sales from China dropped by 6.9%, due to extended and continued
home shelter imposed in various parts of the country in Q1, and an unexpected COVID outbreak in Q3 which
resulted in nationwide retail disruption and weakened consumer sentiment.
Note (2) Europe recorded a provisional sales decline of 68.2%, reflecting the Group’s decision to change into
an indirect distribution model in the region07• Sales from golf clubs, apparels and golf balls showed moderate growth YOY in

the face of challenging business and retail environments in China andcontinued ball raw material shortage.

• Gross margin of golf clubs remained at 59.4%, which is well ahead of the

GOLF CLUBSNET SALES +3.2% TO JPY 21,513 MILLION(COMPARABLE -1.3%)

GROSS MARGIN +1.3PP TO 59.4%

industry average, thanks to HONMA’s strong brand equity, effective retail pricemanagement and manufacturing cost optimization.

• Gross margin of apparel dropped to 26.7% mainly due to tightened inventory

provision policy. Gross margin of golf balls dropped to 29.3% primarily due toraw material price increase and sharp devaluation in Yen.

NET SALES MIX BY PRODUCT CATEGORIES
6.9%

Golf Clubs

10.0

Apparels

10.2
72.9

APPARELSNET SALES +1.5% TO JPY 3,009 MILLION(COMPARABLE -5.3%)

GROSS MARGIN -22.4PP TO 26.7%

GOLF BALLSNET SALES -1.1% TO JPY 2,942 MILLION(COMPARABLE -2.2%)

GROSS MARGIN -16.2PP TO 29.3%

Golf Balls

Accessories & Other Related

ACCESSORIESNET SALES -7.3% TO JPY 2,031 MILLION(COMPARABLE -11.0%)

GROSS MARGIN -7.7 PP TO 27.1%

08

NET SALES MIX BY CHANNEL%

DIRECT-TO-CONSUMER CHANNELNET SALES +40.2% TO JPY 10,217 MILLION (COMPARABLE +33.5%)
GROSS MARGIN -8.6PP TO 49.8%

34.6
65.4

Distributors
DTC Channels

90

SELF-OPERATED STORES

E-COMMERCE•••

Net +10 new locations, mainly located on the prominent golfcourses in China
Sales from Mainland China +33.7% ; sales from Japan +32.6%
Continued optimization of store design, visual display andconsumer experience• Operating in China, Japan and the US• Total net sales +24.9% (comparable +16.0%)

3RD PARTY RETAILERS AND WHOLSALERS
NET SALES -11.1% TO JPY 19,278 MILLION (COMPARABLE -14.6%)

GROSS MARGIN -1.4PP TO 51.3%

3,717
3RD PARTY POS• -427 POS, mainly in Europe, amidst the transition towards•

indirect distribution model
Sales +6.2% in Japan

09

03
10

Strategically, the Group focuses on the development of its home markets in Asia with products trading under the HONMA brand. The group will continue to seek new
possibilities by exploring and developing new product categories 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, pursuinggolfers in super-premium and premiumperformance 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• 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

11

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

Beres NX
Launched in Nov 2022

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

12•GOLF CLUB SALES ROSE BY 3.2% YOY TO JPY 21,513 MILLION (COMPARABLE -1.3%)•

DECENT CLUB SALES GROWTH IN JAPAN +16.9%, KOREA +14.0% AND CHINA (INCLUDING HK) +7.6%, RECONFIRMING THE STRONG RESILIENCE OF THE BUSINESSUNDER A CHALLENGING MACRO ENVIRONMENT•CLUB SALES FROM EUROPE -66.9% DUE TO THE STRATEGIC DISTRIBUTION MODEL CHANGE INTO AN INDIRECT ONE•GROSS MARGIN +1.3PP TO 59.4% , THANKS TO CONTINUED RETAIL PRICE MANAGEMENT, MANUFACTURING COST OPTIMIZATION AND STRONG BRAND EQUITY

BERES• Beres Aizu was launched in Dec•

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

51.4% of club sales
FY23 sales -0.2% (comparable -5.3%)

TOUR
WORLD

OTHERS• 2-proned product approach• Mainly Country Specific Models and•

TW-XP2 was launched in Sep 2022

•
•

•
•

15.0% of club sales
FY23 sales -9.6% (comparable -13.7%)

appealing both single and double
handicappers•••

putters
Special editions‘Lady Go’ was launched in Nov 2022

31.8% of club sales
FY23 sales +18.3% (comparable +14.9%)
All-time favorite to consumers who
are looking for extinguished andexquisite cosmetics

13

•

GOLF BALL SALES DECLINED SLIGHTLY BY -1.1% YOY TO JPY 2,942 MILLION (COMPARABLE -2.2%); GROSS MARGIN -16.2PP TO 29.3%•

SALES AND GROSS MARGIN UNDER PRESSURE DUE TO YEN DEVALUATION AND SUPPLY CHAIN CONSTRAINT•

JAPAN GOLF BALL SALES +26.4% TO JPY 2,434 MILLION, RANKS #4 IN TERMS OF GOLF BALL SELL THROUGH VOLUME IN JAPAN; SIGNIFICANT AND CONTINUINGADVANCEMENT IN GOLF BALL MARKET SHARE AND CONSUMER RECOGNITION IN JAPANPremium
6-layer ballProfessional
3&4-layer ball

Mass Market
2-layer ballD1, 2-LAYER BALL

BERES 5 STAR, 6-LAYER BALL

TW-X , 3-LAYER BALL

HONMA GOLF BALL SALESHONMA GOLF BALL SALES FROM JAPANJPY MM

JPY MM

2,659
1,805
736

FY17

2,974

2,434

2,942

2,211

1,737

1,810

FY20

FY21

1,926

1,209
787

1,148
370

FY18

FY19

FY20

FY21

FY22

FY23

FY17

FY18

FY19

FY22

FY23

14

APPAREL SALES +1.5% YOY TO JPY 3,009 MILLION(COMPARABLE -5.3%)

GROSS MARGIN -22.4PP TO 26.7%•

Retail activities severely interrupted by• extended home shelter happened in multiple parts ofChina in Q1 FY2023• nationwide COVID outbreak in China in Q3&Q4 FY2023•

Nevertheless, expanding product lines, optimized store
operation and active online marketing campaigns drove up
sales in the remaining months and led to a flattish full 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

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

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

FASHION GOLF LINE
Fun and trendy golf wear designed
for fashionable young golfers who
cannot wait to stand out on the golfcourseURBAN 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••Sales from self-owned channels +40.2% (comparable +33.5%)•

Sales improved thanks to the premium product offering, new retail visual design andimproved consumer experience

90 self-owned stores, net increase by 10, and newly opened 23 stores, mainly
located on the top golf courses in China.

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

Sales from third-party -11.1% (comparable -14.6%)
Sales from Japan +6.0%
Number of POS declined by 427 to 3,717•

Closed 580 POS in Europe, as the results of the Group’s decision focus on asmaller but premier group of accounts

16E-COMMERCE SALES GREW BY 24.9% (COMPARABLE +16.0%)
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

CUSTOMER EVENTS
4,061 EVENTS , 56,360 PARTICIPANTS, +8.1% YOY••

Customer events are important customer touch points for HONMA•

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

These events were mainly held on golf courses with dedicatedfitters

18

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

19

SPONSORING 8 PROFESSIONAL PLAYERS PLUS A WIDE NETWORK OF
HONMA AMBASSADORS AND COACHES
7 JAPAN LADIESPROFESSIONAL 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 performance-

driven 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.

21

04
22

NET SALESGROSS PROFIT & GROSS MARGIN

JPY MM

JPY MM

28,971
23,78722,735

FY2020

FY2021

FY202229,495

FY2023

EBITDA

12,118

11,445

FY2020

FY2021Gross Profit

15,686

14,988FY2022

FY2023Gross Margin

NET PROFIT

JPY MM

JPY MM

9,304

1,214

4,475
19.7%

5.1%
FY2020

FY2021
EBITDA

6,191

5,974
3,256

19.3%

1,859

32.1%
20.3%

FY2022
EBITDA Margin

FY2023

-732

21.4%

11.0%

8.2%

-3.1%
FY2020

FY2021

FY2022

Net Profit

Net Profit Margin

FY202323

SG&A EXPENSES BRIDGE

SG&A EXPENSES BREAKDOWN

JPY MM

AS % OF SALES

37.4%
35.1%
2.4%
3.2%
3.0%

2.0%
3.6%
4.8%

7.2%

7.3%

8.2%

8.4%

11.2%

11.2%

FY2022

FY2023

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

5,916
3,983

3,676

10,473

10,772

FY2020

FY2021

14,455

14,085

FY2022

FY2023559
FY2020

FY2021

FY2022

FY2023

INTEREST-BEARING LIABILITIESINTEREST-BEARING LIABILITIES / TOTAL EQUITY

JPY MM

%

8,600
8,026

40.4%

37.6%

7,700

30.4%

28.0%

FY2022

FY20237,290

FY2020

FY2021

FY2022

FY2023

FY2020

FY202125

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

DAYS

DAYS

DAYS

112
314
293

68

69

-14
days

58

FY2022

FY202347

FY2021

FY2022

299

-11
days

54

FY2021+7
days

FY2023

219

195

209

30

34

65

63

52

FY2021

FY2022

FY2023WIP

Finished Goods

Raw Materials

38

Note

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

26

05
27

FOR THE YEARS AHEAD,

CHALLENGES

HONMA will continue executing its growth strategies to build a world-leading golf lifestylecompany, leveraging its unique brand legacy, innovative technologies and exquisite
Japanese craftsmanship, and expanding distribution network.

The golf industry will continue to face multiple challenges in
the near future, including

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.

•

sustained macro-economic and geo-politial uncertainties
which may continue to cause market turbulence andchange in consumer behavior• supply chain challenges under inflation pressure
In face of such challenges, HONMA will continue to takeactive 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 development.

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

06
29

COMPLETE RECOVERY IN ALL CHANNELS AND PRODUCTCATEGORIES
3.5 1.5% of Total Sales

Japan

11.3
33.3
24.0

• 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

Korea
Other Regions
North America

26.4

EuropeFY23 FULL YEAR PERFORMANCE HIGHLIGHT
NET SALES +15.6%

9,822• Golf club sales +16.9%, BERES club family sales +151.6%• Golf Ball sales +26.4%, sales volume ranking the 4rd in Japan• Strong recovery in consumer sentiment following further market+15.6%•NET SALESJPY MM

China(Including Hong Kong and Macau)

MARKET

8,497

reopening and rejuvenated retail activities
Focused marketing campaigns and Pro-endorsement program targeting
premium-performance consumer segment

Note
FY2022

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

30

STEADY YOY SALES GROWTH ON THE BACK TOBOOMING GOLF PARTICIPATION AND NEW PRODUCTACTIVATION
3.5 1.5% of Total Sales

Japan

11.3
33.3
24.0

•
•
•

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)
Korea
Other Regions
North America

26.4

MARKET

EuropeFY23 FULL YEAR PERFORMANCE HIGHLIGHT
NET SALES +3.8%• 7th consecutive year of growth at a CAGR of 13.1%• Golf club sales +14.0%, boosted by successful launch of BERES and

NET SALESJPY MM

6,832

7,089
+3.8%

FY2022

FY2023•country specific products since early 2022
Sales growth from Korea slowed down during the period due to apparelbusiness and distributorship optimization.

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

EXUBERANT DEMAND AND CHANNEL EXPANSIONPARTIALLY OFFSETS NEGATIVE IMPACT FROMEXTENDED COVID-RELATED LOCKDOWN AND OUTBREAK
3.5 1.5% of Total Sales

Japan

11.3

China(Including Hong Kong and Macau)

33.3

MARKET

•
•
•

•

Korea

24.0

Other Regions
North America

26.4

EuropeFY23 FULL YEAR PERFORMANCE HIGHLIGHT
MAINLAND CHINA NET SALES +0.8% (COMPARABLE -7.7%)••

NET SALESJPY MM

7,501

7,564
+0.8%
+61.3%FY2022

FY2023Mainland China

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

143

231

FY2022

FY2023

Hong Kong/ Macau•

Golf club sales +7.6% (comparable -1.5%), highlighting Tour World club
family sales grew by 88.6%(comparable +72.5%)
Apparel sales dropped slightly by -1.9% (comparable -10.2%); retail activity
was severely interrupted both in 1Q FY23 due to temporary closure of thewarehouse in Shanghai during the city’s 2-month lockdown, and also in
2H FY23 due to an unexpected nationwide outbreak of the COVID cases
Efficient react towards the uprising golf participation by adding/reopening 23 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

32

BUILDING A CLOSER PARTNERSHIP WITH MAJORETAILERS TO CAPTURE SUPER PREMIUM AND
PREMIUM PERFORMANCE SEGMENT
3.5 1.5% of Total Sales

Japan

11.3
33.3
24.0

•
•
•
•

China(Including Hong Kong and Macau)

North America
EuropeFY23 FULL YEAR PERFORMANCE HIGHLIGHT
NET SALES +3.2% (COMPARABLE -11.0%)•

NET SALESJPY MM

992

1,024
+3.2%

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 on course golf participants (1)Total golf participation (incl. on-course and off-course) exceeded 40M
and reached 41.1M in 2022 for the first time in America’s history(2)Korea
Other Regions

26.4

MARKET••

Golf club sales +5.4% (comparable -9.1%); Tour World +35.3% (comparable+16.6%)POS +8 to 345 in total;
Enhanced brand and product awareness through closer partnership withmajor retailers

Note
FY2022

FY2023(1) Source : Golf DataTech’s 2018 research report(2) Source: NGF Golf Business Symposium

33

GOING THROUGH TRANSITION TOWARDS AN INDIRECT
DISTRIBUTION MODEL AND STREAMLINED CUSTOMERBASE IN PURSUIT OF EFFICIENCY OPTIMIZATION
3.5 1.5% of Total Sales

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)

Japan

11.3
33.3
24.0

China(Including Hong Kong and Macau)
Korea
Other Regions
North America

26.4

EuropeFY23 FULL YEAR PERFORMANCE HIGHLIGHT
NET SALES -68.2% (COMPARABLE -72.1%)• POS -580 to 35 in total• Provisional sales decline following the Group’s decision to change the

NET SALESJPY MM

1,393•

distribution model in this region by focusing on a smaller but premiergroup of accounts that are most capable to represent HONMA
Continued optimising its organizational set up and cost base toefficiently anchor growth amidst macro uncertainties

443-68.2%FY2022

FY2023Note(1) Source : KGPA, Korea Golf Association 201734

For the 12 months ended 31 March
2023
JPY

2022
%

JPY

YoY Change%%(In thousands, except for percentages and per share data)
Consolidated Statement of Profit or Loss
29,494,999

100.0

28,971,099

100.0

1.8

Cost of sales-14,506,744-49.2-13,285,472

-45.9

9.2

Gross profit-14,988,255

50.8

15,685,627

54.1

-4.4

515,365

1.7

2,192,521

7.6

-76.5

Selling and distribution expenses-9,607,191-32.6-9,316,156

-32.2

3.1

Administrative expenses-1,412,980-4.8-857,037

-3.0

64.9

Other (expenses)/income, net-279,053-0.9-89,021

-0.3

213.5

Finance costs-124,990-0.4-66,414

-0.2

88.2

Finance income

13,4630.1

10,771

0.0

25.9

Profit before tax

4,092,869

13.9

7,560,291

26.1

-45.9

Income tax expense-837,264-2.8-1,369,103

-4.7

-38.8

Net profit

3,255,605

11.0

6,191,188

21.4

-47.7

Revenue

Other income and gains

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

5.38

10.22

-47.7

Non-IFRS Financial Measures
Operating Profit

3,856,557

13.1

5,456,791

18.8

-29.3

Net Operating Profit

2,922,546

9.9

4,329,498

14.9

-32.5

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.

35

Financial Position as at
2023.3.31

2022.3.31

JPY

JPY

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

8,208,542

8,090,354

Current assets

32,158,818

29,361,191

Total Assets

40,367,360

37,451,545

Non-current Liabilities

2,201,905

1,972,733

Current Liabilities

12,134,527

13,822,733

Total Liabilities

14,336,432

15,795,466

Net current assets

20,024,291

15,538,458

Total assets less current liabilities

28,232,833

23,628,812

Net Assets

26,030,928

21,656,079

Total Equity

26,030,928

21,656,079

Liabilities

36

For the twelve months ended 31 March
2023

2022

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

3,675,831

5,916,455

Net cash (used in) investing activities-570,757-157,081

Net cash flows (used in) financing activities-3,644,436-3,336,429

Net increase in cash and cash equivalents-539.362

2,422,945

Net effect of foreign exchange rate changes

169,550

1,259,712

Cash and cash equivalents at the end of year

14,084,742

14,454,554

37

For more inquiries
Please contact

ir@honma.hk