Honma Golf Ltd. · HKEX:6858
Honma Golf — H1 FY2024 Earnings Presentation
37 slides from Honma Golf's earnings presentation, November 2023
Slide 1: 2023/2024 Interim Results
2023/2024 INTERIM RESULTS HONMA GOLF LIMITED (6858.HK) NOV. 2023 ONE OF THE MOST PRESTIGIOUS AND ICONIC BRANDS IN THE GOLF INDUSTRY
Slide 2: Terms and conditions
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 boun
Slide 3: Contents
CONTENTS 01 HONMA 03 2023/2024 INTERIM RESULTS 02 PERFORMANCE OVERVIEW 05 03 BUSINESS HIGHLIGHT 10 04 FINANCIAL REVIEW 22 05 APPENDIX 27 02
Slide 4: Honma
2023/2024 INTERIM RESULTS 01 03
Slide 5: Honma overview
#1 PREMIUM GOLF BRAND FOUNDED IN 1959, JAPAN 65+ YEARS OF DEDICATIONS TOWARDS QUALITY AND CRAFTSMANSHIP THE ONLY VERTICALLY INTEGRATED GOLF COMPANY IN THE WORLD 2023/2024 INTERIM RESULTS IN-HOUSE R&D AND COMPREHENSIVE CLUB AND EXTENSIVE DTC + CLUB MANUFACTURING NON-CLUB PRODUCT PORTFOLIO DISTRIBUTIO
Slide 6: Performance Overview
2023/2024 INTERIM RESULTS 02 05
Slide 7: Key financials and market commentary
In 1H FY2024, the golf industry witnessed increased market competitions and adjustments in participation and consumers’ willingness to pay resulting from the global economic situations as well as slowdowns in certain parts of the world. Meanwhile, HONMA continued to drive efficiencies and implemente
Slide 8: Net sales by market
• During 1H FY24, The Group’s main markets recorded different sales momentum versus same period last year. • Sales from Japan rose by 5.6%, on the back of a strong rebound of demand from both local players and overseas travelers, fueled by potent product and marketing strategies. • China on the othe
Slide 9: Net sales by product category
GOLF CLUBS • Apparel sales momentum remained strong thanks to the successful NET SALES -12.5% TO JPY 10,012 MILLION / USD71.2 MM product launches, as well as potent marketing and branding campaigns. GROSS MARGIN -0.5PP TO 59.3% • Sales decrease in golf clubs was mainly due to weak consumer sentiment
Slide 10: Net sales by channel
NET SALES MIX BY CHANNEL DIRECT-TO-CONSUMER CHANNELS: Self-operated Stores + E-commerce % NET SALES +13.2% TO JPY 5,171 MILLION / USD36.8 MM GROSS MARGIN +7.4PP TO 60.6% 39.2% • Net +5 new locations, mainly located on the prominent golf courses in China 2023/2024 INTERIM RESULTS 95 • Sales from Japa
Slide 11: Business Highlight
2023/2024 INTERIM RESULTS 03 10
Slide 12: Strategic focus
The Group strategically focuses on the development of its home markets in Asia and exquisite trending products, while at the same time, continues to seek new possibilities by exploring and developing new categories and products to meet consumers’ evolving needs. • • 2023/2024 INTERIM RESULTS • Combi
Slide 13: Club product lineup
PUTTERS, COUNTRY SPECIFIC MODELS, SPECIAL EDITIONS Beres Aizu TW757 65th Anniversary 2023/2024 INTERIM RESULTS Launched in Dec 2021 Launched in Mar 2022 Sakura Dance Launched in May 2022 FOR YOUNGER FOR SERIOUS GOLFERS FEMALE GOLFERS HANDICAP 0-12 IN CHINA Beres NX XP-2 Lady Go Launched in Nov 2022
Slide 14: Golf clubs
• In 1H FY2024, golf club sales -12.5% to JPY 11,012 million, mainly because the two major club series BERES Aizu and TW757 are both phasing out after 2 years of sales; renewed models will be released in 2024; sales from China -26.3% due to weakened economic environment and consumer sentiment • Japa
Slide 15: Golf balls
• Golf ball sales declined slightly by 2.2% YOY to JPY 1,097.9 million; gross margin -2.9PP to 29.0% • Sales from golf ball declined during the period mainly due to temporary negative impact following upward retail price adjustment, implemented to cope with Japanese Yen depreciation over the last fe
Slide 16: Apparel
APPAREL SALES +2.1% YOY TO JPY 1,264 MILLION APPAREL COLLECTION CONSISTING OF 3 DISTINCTIVE PRODUCT LINES TARGETING GROSS MARGIN -2.0PP TO 28.2% PREMIUM PERFORMANCE AND FASHION ATHLETIC CONSUMER SEGMENTS • Sales from China +21.4%; sales from Japan +15.7% • 3 product lines catering to the distinctive
Slide 17: Retail channels
SELF-OWNED RETAIL CHANNELS ACT AS BRAND EXPERIENCE HUBS ACROSS ALL MARKETS • Sales from self-owned channels +13.2% to JPY 5,171 million • Sales from Japan +30.7%; sales from China +23.6% • 95 self-owned stores, net increase by 5; newly opened 9 stores, all in China 2023/2024 INTERIM RESULTS THIRD-PA
Slide 18: E-commerce
E-COMMERCE SALES GREW BY 19.0% T-MALL FLAGSHIP STORE US E-COMMERCE SITE DRIVEN BY ACCELERATED INVESTMENT IN DIGITAL MARKETING WITH A FULL-CHANNEL APPROACH 2023/2024 INTERIM RESULTS • E-commerce platforms in major markets • China: Tmall, JD, Wechat Store, Douyin, and DU (得物) • Japan & US: self-operat
Slide 19: Digital content marketing
DIGITALIZED CONTENT MARKETING THROUGH RELAUNCHED GLOBAL WEBSITE & SOCIAL MEDIA PLATFORMS RELEVANT TO EACH MARKET • Frequently rolling out digital marketing content on HONMA’s global website as well as social platforms including Instagram, Facebook, Wechat, Weibo, etc 2023/2024 INTERIM RESULTS • Cont
Slide 20: Customer events
CUSTOMER EVENTS 1,757 EVENTS, 22,944 PARTICIPANTS • Customer events are important customer touch points for HONMA 2023/2024 INTERIM RESULTS • These events were mainly held on golf courses with dedicated fitters • Integrated brand experience and retail activities targeting consumers in super premium
Slide 21: Sponsored professional players
SPONSORING 8 PROFESSIONAL PLAYERS PLUS A WIDE NETWORK OF TEAM HONMA WINNING CHAMPIONSHIP IN PROFESSIONAL TOURS HONMA AMBASSADORS AND COACHES 7 JAPAN LADIES 1 KOREA LADIES PROFESSIONAL GOLF PROFESSIONAL GOLF (JLPGA) (KLPGA) 2023/2024 INTERIM RESULTS • Renewed pro-sponsoring strategies to recruit addi
Slide 22: Brand PR and media exposure
OTHER BRAND PR & MEDIA EXPOSURE • Actively reinforcing HONMA’s brand image being premium, performance-driven, dynamic and modern through multiple media from golf magazines, TV channels, talk shows advertisement, etc. 2023/2024 INTERIM RESULTS 21
Slide 23: Financial Review
2023/2024 INTERIM RESULTS 04 22
Slide 24: Net sales, gross profit, EBITDA, net profit
NET SALES GROSS PROFIT & GROSS MARGIN JPY MM JPY MM 14,927 13,195 11,872 7,866 6,562 6,877 9,053 4,634 2023/2024 INTERIM RESULTS 1H FY2021 1H FY2022 1H FY2023 1H FY2024 1H FY2021 1H FY2022 1H FY2023 1H FY2024 Gross Profit Gross Margin EBITDA NET PROFIT JPY MM JPY MM 3,330 4,644 4,702 3,087 3,183 35.
Slide 25: SG&A expenses
SG&A EXPENSES BRIDGE SG&A EXPENSES BREAKDOWN JPY MM AS % OF SALES 37.2% 39.2% 2.0% 2023/2024 INTERIM RESULTS 2.8% 4.6% 3.3% 5.2% 4.6% 6.7% 7.7% 9.3% 7.5% 11.3% 11.5% 1H FY2023 1H FY2024 Employee benefits Other Selling Expenses A&P Expenses Administrative Expenses Depreciation of right-of-use assets
Slide 26: Cash flow, cash and liabilities
NET OPERATING CASH FLOW CASH ON HAND JPY MM JPY MM -0.8% 3,702 17,038 16,660 3,277 3,251 2,576 12,971 11,203 2023/2024 INTERIM RESULTS 1H FY2021 1H FY2022 1H FY2023 1H FY2024 1H FY2021 1H FY2022 1H FY2023 1H FY2024 INTEREST-BEARING LIABILITIES INTEREST-BEARING LIABILITIES / TOTAL EQUITY JPY MM % 8,6
Slide 27: Turnover days
RECEIVABLES TURNOVER DAYS (1) PAYABLES TURNOVER DAYS (1) INVENTORY TURNOVER DAYS DAYS DAYS DAYS +28 68 314 days 320 292 2023/2024 INTERIM RESULTS 64 64 -16 +5 days days 49 44 48 219 236 200 30 27 22 65 65 62 1H FY2022 1H FY2023 1H FY2024 1H FY2022 1H FY2023 1H FY2024 1H FY2022 1H FY2023 1H FY2024 Ra
Slide 28: Appendix
2023/2024 INTERIM RESULTS 05 27
Slide 29: Japan market
STEADY AND QUALITY GROWTH IN MULTIPLE PRODUCT MARKET CATEGORIES FOLLOWING FURTHER MARKET REOPENING • 2nd largest golf equipment market in the world 2.5% 1.0% • Total golf product market size approximates to USD 1.7 billion in 2021 (1) % of Total Sales • 2,200 golf facilities, representing half of th
Slide 30: Korea market
ONGOING CHANNEL OPTIMIZATION AIMING TO FUEL THE MARKET UPCOMING PRODUCT LAUNCH IN SPRING 2024 • Fast growing and under-penetrated market 2.5% 1.0% • 3rd largest golf equipment market in the world with USD 650 million % of Total Sales equipment sales in 2018 (1) 8.2% Japan • 6.3 million of golf popul
Slide 31: Mainland China market
MEANINGFUL 5.10 MARKET APPAREL AND E-COMMERCE GROWTH ALBEIT • Dynamic market with an exciting uptrend in outdoor sports WEAKENED CONSUMER SENTIMENT • Emerging and fast growing golf industry 2.5% 1.0% • 478 golf courses, expanding indoor facilities, around 1 million core golf population(1) % of Total
Slide 32: North America market
BUILDING A UNIQUE DIRECT-TO-CUSTOMER MARKET DISTRIBUTION MODEL TO CAPTURE SUPER PREMIUM AND PREMIUM PERFORMANCE SEGMENT • Largest golf market in the world with 45% of the global golf economy(1) • 2018 golf equipment sales approximates to USD 4.3 billion by forecast (1) 2.5% 1.0% % of Total Sales • A
Slide 33: Europe market
IMPROVED MARGIN FOLLOWING CHANNEL MARKET ADJUSTMENT • Mature but fragmented golf market • England, Austria, Germany, France and Sweden in total accounts for % of Total Sales 2.5% 1.0% around 12% of the world’s golf equipment sales, which approximates to USD 1 billion (1) 8.2% Japan 2023/2024 INTERIM
Slide 34: Consolidated statement of profit or loss
For the six months ended 30 September 2023 2022 YoY Change JPY % JPY % % (In thousands, except for percentages and per share data) Consolidated Statement of Profit or Loss Revenue 13,194,832 100.0 14,927,415 100.0 -11.6 Cost of sales -6,317,853 -47.9 -7,061,101 -47.3 -10.5 Gross profit 6,876,979 52.
Slide 35: Consolidated statement of financial position
Financial Position as at 2023.9.30 2023.3.31 JPY JPY (In thousands, except for percentages and per share data) Consolidated Statement of Financial Position Assets 2023/2024 INTERIM RESULTS Non-current assets 8,320,186 8,508,477 Current assets 33,543,335 35,706,753 Total Assets 41,863,521 44,215,230
Slide 36: Cash flow statement
For the six months ended 30 September 2023 2022 2023/2024 INTERIM RESULTS JPY JPY (In thousands, except for percentages and per share data) Cash and cash equivalents at the beginning of year 14,084,777 14,454,554 Net cash flows generated from operating activities 3,251,296 3,277,219 Net cash (used i
Slide 37: For more inquiries
For more inquiries Please contact ir@honma.hk