Fy2020/21

Annual results
JUNE 2021(6858.hk)
one of the most prestigious and iconic 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 acknowledge and agree to be bound by the following Terms.
These materials, and any further information made available to you during this presentation, are fully based on information that has already been in public domain.
Honma Golf Limited (the “Company”) will not be discussing or providing any information or materials which are not already in the public domain. This presentation,
the materials contained herein, and any further information made available to you, may not be copied, reproduced or redistributed to any other person in any manneror published, in whole or in part, for any purpose, at any time, without the prior written consent of the Company. You will return to the Company all materials provided
to you at the end of this presentation. This presentation does not purport to provide a complete description of the matters to which it relates. No representation,
warranty or undertaking, express or implied, is or will be made or given by, and no responsibility or liability is or will be accepted by, any person (for the avoidance of
doubt, including but not limited to, the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives or advisers of
any of the foregoing), with respect to the accuracy, reliability, correctness, fairness or completeness of this presentation or its contents or any oral or written
communication in connection with this presentation. In addition, any analyses included herein are not and do not purport to be appraisals of the assets, stock orbusiness of the Company or any of its holding companies, subsidiaries or other affiliates. Nothing contained in this presentation is, or shall be, relied upon as apromise or representation as to the future or as a representation or warranty otherwise. Nothing in this presentation constitutes or forms part of, or should be

Disclaimer

construed as constituting or forming part of, any regulatory, valuation, legal, tax, accounting, investment, or other advice. Nothing in this presentation constitutes orforms part of, or should be construed as constituting or forming part of, any recommendation, solicitation, offer or commitment to purchase, sell, subscribe for orunderwrite any securities by any party, or to extend any credit or provide any assurance to you or to enter into any transaction. You should consult with such advisers
as you deem necessary to assist you in making any investment decision with respect to the Company, including, but not limited to, your accountants, investment
advisors and legal and/or tax experts. None of the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives oradvisers of any of the foregoing shall have any liability (in negligence or otherwise) in respect of the use of, or reliance upon, the information contained herein by youor any person to whom the information herein is disclosed. The contents of this presentation are subject to corrections or changes at any time without further notice.
The information contained in these materials also contains certain forward-looking statements, which are based on various assumptions and subject to risks anduncertainties. In light of these assumptions, risks, and uncertainties, the future facts, events and circumstances described in these materials may not occur andactual results could differ materially and adversely from those anticipated or implied in the forward looking statements. The forward-looking statements are not aguarantee of future performance. Each of the Company, its subsidiaries, affiliates, controlling persons, directors, officers, employees, agents, representatives oradvisers of any of the foregoing assumes no obligation to (1) provide access to any additional information, (2) correct any inaccuracies in this presentation, or (3)update or otherwise revise this presentation, for any reason whatsoever, including without limitation to reflect new information, events or circumstances that arise,occur or become known after the date of this presentation. This presentation is for information purposes only and does not constitute an offer or invitation for thesale or purchase of any security. Any such offer or invitation will be made solely through a prospectus or offering circular in compliance with applicable laws and any
decision to purchase or subscribe for any security should be made solely on the basis of the information contained in such prospectus or offering circular issued inconnection with such offer or invitation.

ANNUAL REPORT 2021

01

1

HONMA

ANNUAL REPORT 2021

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••

ANNUAL REPORT 2021

241 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

Premium Performance
Product portfolio••

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

80 self-operated stores
3,935 POS via third party retailers &wholesellers

03

2

performanceoverview

ANNUAL REPORT 2021

04

FULL YEAR ENDED 31 MAR 2021

YoY Change (JPY Base)

JPY 22,735.1 Million / USD 208.2 Million (1)

-4.4%

50.3%

-0.6 pp

EBITDA- EBITDA Margin

JPY 4,379.1 Million / USD 40.1 Million (1)19.3%+264.6%+14.2pp

Net Profit- Net Profit Margin

JPY 1,859.1 Million / USD 17.0 Million (1)8.2%+JPY 2,591.5 Million+11.3pp

JPY 3.07 / HKD 0.22 (1)Loss of JPY 1.2/share last year
+JPY 4.27

Net Operating Cash flow

JPY 3,982.8 Million / USD 36.5 Million (1)+612.9%Net Cash

JPY 2,746.3 Million / USD 25.1 Million (1)+46.6%

Interim: JPY 1.5 / share (distributed in Dec 2020)
Final: JPY 1.7 / share
Total: JPY 3.2 / share

Total dividend payout
ratio: 14.5% of the Group’s distributableprofits as at 31 March 2021

Net Sales
Gross Profit Margin

key
financials

Reported Earnings Per Share

Proposed Dividend

Note(1) Exchange rate: 1 USD = 109.22 JPY; 1HKD = 14.07 JPY

ANNUAL REPORT 202105

revenue Overview

by market

FY21 Revenue
JPY 22,735 Million / USD 208 Million, -4.4%%

4.2 4.0
10.7

Performanceoverview

Post COVID, golf business experienced unprecedented increase indemand and participation. Revenue from China, South Korea andRest of the World rose robustly, yet diluted by revenue frommarkets beheld by continued pandemic interruptions.

28.8

24.2
28.1

-23.0%EUROPE+100.4%

Sales: JPY 947 MM

china(incl. hk & macau)
Sales: JPY 5,512 MM-39.7%
japan
Sales: JPY 6,545 MM+14.2%-25.9%
north america
Sales: JPY 919 MM

south korea
Sales: JPY 6,383 MM

Japan
Korea
China (Including Hong Kong and Macau)
Rest of the World
EuropeNorth America

ANNUAL REPORT 2021

+14.8%
rest of the world
Sales: JPY 2,429 MM

06

revenue Overview

by product category

Golf clubs

FY21 Revenue
JPY 22,735 Million / USD 208 Million, -4.4%

Net sales -10.7%, gross margin -1.6pp to 51.2%
Sales from

•
•
•
•

Japan -50.7%
Mainland China +128.2%
South Korea +7.0%
Rest of the World +9.0%%
7.6

Performanceoverview

6.7

Golf balls

Net sales +20.6%, gross margin +5.7pp to 45.0%
Sales from

11.7

•
•
•

74.0

Golf Clubs
Golf Balls
Apparels
Accessories & Other Related

Apparels

Mainland China +206.1%
South Korea +42.1%

Net sales +36.7%, gross margin -3.3pp to 59.3%
Sales from••••
ANNUAL REPORT 2021

Japan +4.2%

Japan -46.5%
Mainland China +66.0%
South Korea +983.4%
Rest of the World +2o4.0%
07

revenue Overview

by channel

FY21 Revenue
JPY 22,735 Million / USD 208 Million, -4.4%

Direct-to-Consumer channel
80
self-operated stores%

Performanceoverview

•
•
•

26.3

US mobile vans

E-Commerce inchina, japan and us

Revenue increased by 13.1%
Number of store remained flat yet sales per store rose substantially
Sales from E-commerce +262%

73.7

3rd party retailers and wholsalers
Distributors
DTC Channels

ANNUAL REPORT 2021

14•

3,935 POS, net increase 16 POS••

Revenue decreased by 9.4%
Significant disruptions due to COVID-19

08

3

business
highlight

ANNUAL REPORT 2021

09business
highlight

productchannelBranding and Consumer engagement

•

•

•

•
•

Strengthened focus on super premium andpremium performance consumer segments
Launched the second Performance
Enhancement club series under TOURWORLD series
Substantial advancement of ball andapparel businesses in home markets•••

ANNUAL REPORT 2021

Sales-per-store from self-operated storesincreased due to improved productofferings and continued operational
optimization
Expansion of elevated apparel stores in
China and South Korea to drive apparelbusiness growth
Continue executing Direct-to-Consumer(DTC) distribution model in the US and POS
expansion in Europe
Accelerating investment into E-commercecapabilities in key markets; total sales from
E-commerce channels more than tripled••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 track consumer
behavior and nurture consumer
engagement through loyalty program

10

from
A.

Affluent golfers

tosuper premium
Affluent golfers

CLUB PORTFOLIO
optimized
tO FOCUS ON SUPERPREMIUM AND PREMIUMPERFORMANCE CONSUMERS
SEGMENTS

premium performance
avid golfers

beginners

ANNUAL REPORT 2021

avid golfers

tour release

performanceenhancement

Serious golfers
Handicap 0-12

Game Improvement golfers
Handicap 8-20

11

Designed forBeres

super premium segment

Designed forpremium performance segment

Tour World

othersTOUR RELEASE series

COUNTRY SPECIFIC MODELS

TR20

daruma series

TR21

A.

CLUB PORTFOLIO
optimized
tO FOCUS ON SUPERPREMIUM AND PREMIUMPERFORMANCE CONSUMERS
SEGMENTS

BERES 07

PERFORMANCE ENHANCEMENT series
XP-1

sakura series(cont’d)gs

ANNUAL REPORT 2021

12

overall club sales down by 10.7%
Launch window of BERES 07 and TR20 coincided with covid outbreak hence sales performance heavily impacted
strong sales recovery across various product lines following market reopening

A.

CLUB PORTFOLIO
optimized
tO FOCUS ON SUPERPREMIUM AND PREMIUMPERFORMANCE CONSUMERS
SEGMENTS(cont’d)Beres(focus)product
launchsales
performance

•

•
•
•

ANNUAL REPORT 2021

Tour World

Beres 07 launched between Dec
2019 to Feb 2020

FY21 sales down by 20.1%
47% of club sales
Product launched during lock down.
Target consumers are generally
older than the rest of the series
whose participation and purchaseinterest are more severely affectedby social distancing and lock down

OTHERS(focus)•

TR20 launched in Jan 2020
TR21 launched in Sep 2021•

GS launched in Feb 2021•••

FY21 sales down by 26.2%•

In 2H FY21,Tour World sales grew
YOY in all major markets thanks tosuccessful product launchfollowing ease of social distancing
rules and business operation
restrictions

2H FY21 sales up by 32.2%
21% of club sales•••

Putters••

FY21 sales up by 27.9%••

Sales in Mainland China +157.7%

Country specific models
Special editions

32% of club sales

Sales in South Korea +122.1%

13

Golf ball sales up BY 20.6%
Continued penetration in Asia home markets
Accelerated growth in 2H completely offset negative impact during the pandemicB.
continue
pivoting sales
growth in balls
across asia home markets

D1 2020, 2-LAYER BALL

Beres 3 Star, 3-LAYER BALL

HONMA X4, 4-LAYER BALL•

Sales in Mainland China +206.1%

golf ball sales•

Sales in South Korea +42.1%

Double-digit growth for 5 consecutive years•

Sales in Japan +4.2% despite recurring impact fromCOVID-19 and state of emergency declared on most part ofthe country

JPY MM••

Prioritized R&D resources and beefed up product marketing
resources
Dedicated sales force and go-to-market strategy in Japan,
Korea and China

%
6
.
4
4
:+
CAGR

2,659

2,206

1,805
1,148
420
2016

ANNUAL REPORT 2021

Beres 5 Star, 6-LAYER BALL

736

2017

2018

2019

2020

2021

14

APPAREL sales up BY 36.7%
1h sales heavily laden by retail disruptions in ASIA markets;
robust sales in 2h thanks toapparel collection consisting of
3 distinctive product lines resonating target
segment of the club families

1. unprecedented growth in golf participation,
2. improved product offerings, and3. retail operation optimization• +156% in 2H FY21
• Sales of 20SS collection was negatively impacted by
COVID-19 in 1H FY21
• 2H FY21 saw fast recovery and strong trend of growth
fuelled by successful launch of 20FW and 21SS
collections

across asia home markets

Premium
Aesthetic
DesignPerformance
High-tech
Functionality

ModernActiveFashion• Opened 8 new apparel brand stores in FY2021; in total
41 apparel stores•

Sales in South Korea +983.4%• Dedicated apparel team established in 2019• Opened 17 new apparel brand stores in FY21, despite
the pandemic; in total 27 apparel stores

ANNUAL REPORT 2021

spring / summer
2021

black label

Sales in Mainland China +66.0%

red label•white labelc.
continue
nurturingapparel businessfall / winter
2020

15

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

Sales from self-owned stores up by 13.1%
•

d.
omni
distribution
footprint withelevated retailpresence••

Increased sales per store thanks to effective operation
optimization

80 self-owned stores; 18 new stores opened
14 mobile vans in the US, bring HONMA fitting experience toconsumer’s home course

South Korea, Sejong
opened in Apr 2020

US
Mobile Van

Third-party retailers and wholesalers

Japan, Tokyo
opened in Jun 2019

continued to drive penetration and gain mind share•

Sales from third-party down by 9.4%••

The decrease was due to retail partners' intention to
reduce inventory following extended business closure
during the pandemic

Number of POS increased by 16 to 3,935•

Getting prepared in advance for the coming back ofgolfers post COVID-19
China, Shanghai
opened in June 2020

ANNUAL REPORT 2021

Europe, Paris
opened in Nov 201916

E-commerce sales Increased robustly
by 262%e.

•renewede-commerce
strategies

E-commerce platforms strengthened / added in
major markets• China: Tmall, JD, WeChat Mini Program, VIP mall
• Japan & US: self-operated E-commerce site
• E-commerce sales grew significantly in all above
mentioned markets• Significant increase in site visits and sales
driven by offline retail channel closedown due to
COVID-19

supported by up-todate social media andcrm platforms•

US
e-commerce site

tmall
flagship store

Created / Revamped CRM system and Loyalty
Program• Strengthened direct-to-consumer distribution
model• Create an end-to-end digital ecosystem aroundthe re-defined brand and golfers

ANNUAL REPORT 2021

jd
flagship store
japan
e-commerce site

17

TAPPING INTO THE LARGEST GOLF MARKETS IN THE WORLD

53%

12%

of the global golf
retail sales (1)of the global golf
equipment sales (2)• Building a unique DIRECT-TO-CONSUMER distribution model to capture super premium and premium performancesegmentf.
unique dtc
distribution
model

brand headquarterand gallery

honma house
Digital Platform

to de-risk and to grownorth america & europe
businesses

Honma hubs &shop-in-shops

DTC
Distribution
Model

Digital Platform

mobile vans

Digital Platform• Well underpinned marketing plan to• Build brand awareness, loyalty and repurchase frequency• Drive traffic to HONMA house, hubs and shop in shops for the complete HONMA experience• Create, optimize and leverage digital channels as a day to day point of brand engagement with CRM mindset

Note(1) Source: Golf Data Tech’s 2018 research report

ANNUAL REPORT 2021

(2) KPGA, Korea Golf Association 201718

driving brand awarenessacross all marketsg.
Re-defining HONMA

Dynamic,
Modern,GlobalANNUAL REPORT 2021

customer events
3,051 events
38,230 participants•

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 after multiple markets reopen from social-distancing rules

19Active digital communication throughRelaunched Global Website & Social
Media Accounts•g.

• 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)Tmall
livestream campaign
Online golf lesson

ANNUAL REPORT 2021

20

Sponsoring TEAM HONMA players
17 TEAM HONMA
Pro-players

4 Japan Golf Tour

8 Japan Ladies Professional

4 Korea Ladies Professional

1 ladies professional golf

organization (JGTO)

Golf association (JLPGA)

Golf association (KLPGA)

association (LPGA)g.
Re-defining HONMA

Dynamic,
Modern,Global(cont’d)

ANNUAL REPORT 2021

Team HONMA Lee Bo-mee
with her fans

Lee Bo-mee in new GS
product campaign•

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 ofgolf development in Asia

HONMA equipment and apparel presence on tour

21Partnership with local pros, coaches & influencers•g.
Re-defining HONMA•

Partnership with US Top 50 golf instructor Martin
Chuck to promote HONMA brand and products throughhis own social media, instructional contents andindustry partners like Golf Channel and Golfpass.com
Launched ‘HONMA HAPPY HOUR’ weekly video series
on social media channels•

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

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

Dynamic,
Modern,Global(cont’d)

ANNUAL REPORT 2021

22

Other brand PR & Media exposureg.
Re-defining HONMA

Dynamic,
Modern,Global(cont’d)•

ANNUAL REPORT 2021

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 TV ads, togolf simulator ads and fashion icon collaboration23

4

financialreview

ANNUAL REPORT 202124

revenue

Gross Profit & GP Margin

JPY MM

JPY MM

23,787-4.4%

12,11822,73550.9%

Turnaround To
Profit-making
Amid challenging
Environment under
COVID-19

FY2020

FY2021-5.6%-0.6pp

FY2020

NET PROFIT

JPY MM

JPY MM

Gross Margin

4,379

6
+2
1,201
5.0%

ANNUAL REPORT 2021

1,859

%
6
.
4

p
+14.2p

5
+3

19.3%

FY2020-3.1%

FY2020

FY2021

EBITDAEBITDA Margin

50.3%

FY2021Gross Profit

EBITDA

11,445

%
8
.
3

8.2%

pp
3
.
1
+1
FY2021-732
Net Profit

Net Margin25

SG&A Expenses

SG&A Expenses Breakdown

JPY MM

AS % OF SALES

49.3%
2%

11,773196-235

effective
cost control
measures

156

-670

10,149
-969

-62

39.1%
4%

2%

4.3%

3.5%

5.4%

12.1%

9.8%

8.6%

9.8%

14.1%

13.8%

FY2020

FY2021

6.5%

to mitigate thenegative impact ofcovid-19

11.4%-13.5%
5.3%

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

FY2021FY2019
Employee Benefits
Depreciation of Right-of-Use Assets

Other Selling Expenses
Administrative Expenses

A&P Expenses
Rental Fees

De

Oth
er

PE
A&

Em
plo
yee

Be

ne

fits

FY2020es

11.5%

ANNUAL REPORT 2021

9.2%

44.6%

26

Net Operating Cash Flow

cash on hand

JPY MM

JPY MM

3,983
2,609

strongoperatingcash flow and
HEALTHY capital
structure
to ensure asustainable andresilient business

1
+6

5%
.
2

10,473+2.9%

10,772559
FY2019FY2020

FY2021FY2019FY2020

FY2021

Interest-bearing Liabilities

Interest-bearing Liabilities / Total Equity

JPY MM

%

8,600

-6.7%

8,026

3,800

FY2019ANNUAL REPORT 2021

14,674

40.4%

37.6%

FY2020

FY202113.0%

FY2020

FY2021FY201927

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

JPY MM

JPY MM

139+46 days-27 days+6 days

122

268

63

112

Continued
Improvement in
Working Capital
Efficiency

69

314

224
219

39

118

24

FY2019FY2020

FY2021FY2019FY2020

FY2021

172

25

30

82

71

65

FY2019FY2020

FY2021

Raw MaterialWork in Process

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.

ANNUAL REPORT 2021

28

5

OUTLOOKANNUAL REPORT 2021

29

outlookchallenges

For the year ahead, HONMA will continue executing its longterm growth strategy to build a world-leading golf lifestylecompany leveraging its brand legacy, expanding distribution
network and innovative technologies and traditional
Japanese craftsmanship.

The golf industry will continue to face multiple challenges
in the year ahead, including

We intend to continue pursuing the following:

outlooka) To further increase and regain HONMA’s market share in
Asia home markets by maintaining its leading position in
the super-premium segment while making solid inroads
into the fast growing premium-performance segment.
b) To pivot growth in North America and Europe based on
the updated product and DTC distribution strategies.
c) To continue driving ball, apparel and accessories
businesses across Asia markets to capture the growing
opportunities in the non-club categories of theseregions.

•

anticipated slowdown of GDP growths in major markets•

increased supply chain challenges under inflationpressure•sustained if not accelerating outbreak of COVID-19
which may continue to cause market turbulence anduncertainties.

In face of such challenges, HONMA will continue to takeactive actions to reduce cost, maximize liquidity andprotect 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 products that cater for latest
market trends.
e) To further improve and transform HONMA brand value
into customer loyalty.

ANNUAL REPORT 2021

30

6

appendix

ANNUAL REPORT 2021

31

Appendix I

Retail environment severely disrupted by lingering
covid-19 cases
Gradual recovery in 2h FY21••

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)4.2 4.0
10.7
28.8

Business
Reviewby Market
HOME MARKET

Japan

24.2
28.1

net sales
JPY MM

10,862
6,545

Japan
Korea
China (Incl. HK and Macau)
Rest of the World
EuropeNorth America

marketFY2021

Hideki Matsuyama’s win in the US Masters
Championship in Apr 2021 is seen to be a boost forJapan’s golf market

full year performance review•

Retail environment severely disrupted while thecountry battling with COVID-19•

Strong recovery in 2H FY21; sales +157% ascompared to 1H FY21•

Golf ball sales +4.2% despite of the pandemic
disruption•

E-commerce sales +118% due to shift of consumer
behavior prompted by the pandemic-39.7%FY2020Total golf product market size in 2020
approximates to USD 1.7 billion by forecast (1)Note(1) 2020 Yano’s White Paper on Golf Industry, Japan(2) 2018 Yano’s White Paper on Golf Industry, Japan(3) Frost & Sullivan

ANNUAL REPORT 2021

32

Continued double digit growth into the 8thconsecutive year%

Appendix I

4.2 4.0

korea

•
•

Fast growing and under-penetrated market•

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

10.7
28.8

Business
Reviewby Market
HOME MARKET

market24.2
28.1

net sales

Japan
Korea
China (Incl. HK and Macau)
Rest of the World
EuropeNorth America

full year performance review••

8th consecutive year of double-digit growth•

Growing ball and apparel growth strategies started
to reap

JPY MM

5,589

3rd largest golf equipment market in the world with
USD 650 million equipment sales in 2018 (1)6,383

Golf club sales up by 7% thanks to strong brandequity and continued partnership with Kolon•

Golf ball sales up by 42.1%•

Apparel sales up by 983.4%•

Addition of 17 new apparel stores+14.2%FY2020ANNUAL REPORT 2021

FY2021Note(1) Source: KGPA, Korea Golf Association 201833

Robust growth driven by successful growthstrategies and unprecedented increase in demand%

Appendix I

Business
Reviewby Market

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

10.7
28.8

24.2

Japan
Korea
China (Incl. HK and Macau)
Rest of the World
EuropeNorth America

28.1

full year performance review
mainland china• Strong sales recovery following consumption

sentiment rebounce and golf courses re-opening

net sales Mainland china

net sales HONG KONG

JPY MM

JPY MM(incl. HK & Macau)

•
•
•
•

5,335

2,465

FY2020Golf club sales up by 128%
Golf ball sales up by 206%
Apparel sales up by 66%
E-commerce sales more than tripled+116.4%286

ANNUAL REPORT 2021•••

4.2 4.0

HOME MARKET

chinamarketFY2021

FY2020-39.7%
177
FY2021Note(1) Source: Forward Golf White Paper Report 201734

building a unique direct-to-customer distribution
model to capture super premium and premium
performance segment
4.0%

Appendix I

10.7
28.8

24.2
28.1

NEW MARKET

North
America

•
•
•
•

4.2

Business
Reviewby Market

marketnet sales
JPY MM

Japan
Korea
China (Incl. HK and Macau)
Rest of the World
EuropeNorth America

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 new participation at all time high after market reopening in 2H FY21

full year performance review•

Retail environment severely disrupted in 1H FY21
due to the pandemic and social distancing policies•

Strong recovery in 2H FY21 showed sales +101% ascompared to 1H•

Continued executing HONMA’s unique DTC
distribution strategy

1,239

•

234 POS including self-operated stores, presence
in retailers and stand alone shop-in-shops•

14 mobile vans with dedicated sales and fitters919-25.9%FY2020ANNUAL REPORT 2021

FY2021Note(1) Source: Golf DataTech’s 2018 research report35Effective awareness elevation and continued
POS increase
4.2%

Appendix I

EUROPE••

4.0

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

10.7
28.8

Business
Reviewby Market
NEW MARKET

market

24.2
28.1

Japan
Korea
China (Incl. HK and Macau)
Rest of the World
EuropeNorth America

full year performance review••

net sales
JPY MM

1,231
947

Sales in 2H FY21 +31.1% compared to 1H FY21
Continued channel penetration and enhancing
brand awareness•+51 POS to 591 in total•

616 demo days / fitting events, hosting morethan 2,800 participants•

getting prepared for the new market
opportunities when the negative impact fromthe pandemic fades out completely-23.0%FY2020ANNUAL REPORT 2021

FY2021Note(1) Source: KGPA, Korea Golf Association 201736

For the twelve months ended 31 March
2021.3.31
JPY
Consolidated Statement of Profit or Loss
Revenue

Consolidated
P&L

2020.3.31%

JPY

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

Cost of sales

22,735,119-11,289,914

100.0
-49.7

23,787,214-11,669,597

100.0
-49.1

-4.4
-3.3

Gross profit

11,445,205

50.3

12,117,617

50.9

-5.5

Other income and gains

1,538,719

6.8

67,9080.3

2,165.9

Selling and distribution expenses-8,930,887-39.3-9,546,408

-40.1

-6.4

Administrative expenses-1,217,804-5.4-2,186,825

-9.2

-44.3

Other (expenses)/income, net-351,232-1.5-831,289

-3.5

-57.7

Finance costs-76,225-0.3-69,191

-0.3

10.2

Finance income

12,531

0.1

90,5090.4-86.2

Profit before tax

2,420,307

10.6-357,679

-1.5

776.7

Income tax expense-561,201-2.5-374,734

-1.6

49.8

Net profit

1,859,106

8.2-732,413

-3.1

353.8

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

3.07

-1.20

N/A

Non-IFRS Financial Measures
Operating Profit

1,232,820

5.4

405,095

1.7

204.3

Net Operating Profit

759,751

3.3

33,4900.1

2,168.6

Note(1) Operating profit is derived from profit before tax by (i) subtracting other income and gains, (ii) adding other expenses, (iii) adding listing expenses and (iv) adding RSU expenses.
(2) Operating profit is derived from profit/(loss) before tax by (i) subtracting other income and gains, (ii) adding other expenses and (iii) adding RSU expenses.
(3) Net operating profit is derived from net profit/(loss) 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.

ANNUAL REPORT 2021

37

Financial Position as at

Consolidated Statement of Financial Position

2021.3.31

2020.3.31

JPY

JPY

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

AssetsConsolidatedbalance sheet

ANNUAL REPORT 2021

Non-current assets

8,862,108

9,184,866

Current assets

27,631,389

29,712,451

Total Assets

36,493,497

38,897,317

Non-current Liabilities

2,355,906

2,373,707

Current Liabilities

12,816,455

15,259,813

Total Liabilities

15,172,361

17,633,520

Net current assets

14,814,934

14,452,638

Total assets less current liabilities

23,677,042

23,637,504

Net Assets

21,321,136

21,263,797

Total Equity

21,321,136

21,263,797

Liabilities

38

For the twelve months ended 31 MarchConsolidated
cash flows

2020.3.31

JPY

JPY

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

10,472,793

14,674,123

Net cash flows generated from operating activities

3,982,846

558,652

Net cash (used in) investing activities-571,489-1,177,546

Net cash flows (used in) financing activities-3,403,448-3,324,269

7,909-3,943,163

10,771,897

10,472,793

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the end of year

ANNUAL REPORT 2021

2021.3.31

39

For more inquires, please contact

ir@honma.hk