Honma Golf Ltd. · HKEX:6858
Honma Golf — FY2024 Earnings Presentation
39 slides from Honma Golf's earnings presentation, June 2024
Slide 1: 2023/2024 Annual Results
2023/2024 ANNUAL RESULTS HONMA GOLF LIMITED (6858.HK) Jun. 2024 ONE OF THE MOST PRESTIGIOUS AND ICONIC BRANDS IN THE GOLF INDUSTRY
Slide 2: Disclaimer
DISCLAIMER 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
Slide 3: HONMA PERFORMANCE OVERVIEW BUSINESS HIGHLIGHT
01 HONMA 02 PERFORMANCE OVERVIEW 03 BUSINESS HIGHLIGHT 04 FINANCIAL REVIEW 05 OUTLOOK 06 APPENDIX 2023/2024 ANNUAL RESULTS 03
Slide 4: Honma
WWO\ HONMA
Slide 5: #1 premium golf brand founded in Japan in 1959
#1 PREMIUM GOLF BRAND FOUNDED IN JAPAN IN 1959 67 YEARS OF DEDICATIONS TOWARDS QUALITY AND CRAFTSMANSHIP THE ONLY VERTICALLY INTEGRATED GOLF COMPANY IN THE WORLD IN-HOUSE R&D AND COMPREHENSIVE CLUB AND EXTENSIVE DTC + CLUB MANUFACTURING NON-CLUB PRODUCT PORTFOLIO DISTRIBUTION NETWORK • 200 R&D perso
Slide 6: Performance Overview
2 PERFORMANCE OVERVIEW (Ws
Slide 7: Key Financials
In FY2024, the golf industry witnessed increased market competition and adjustments in both participation and willingness to pay resulting from global economic situations and slowdowns in certain parts of the world. Despite unfavorable market conditions, HONMA continued to drive profitable sales gro
Slide 8: Performance Overview by Market
PERFORMANCE OVERVIEW BY MARKET FY24 NET SALES: JPY 26,223 MM / USD 182.6 MM, -11.1% YOY (COMPARABLE -12.8%) • The decrease in Japan and Korea was attributed to channel optimization in both markets to allow for a better focus on and service to the larger and more relevant retailers. This has led to t
Slide 9: Performance Overview by Product Category
PERFORMANCE OVERVIEW BY PRODUCT CATEGORY FY24 NET SALES: JPY 26,223 MM / USD 182.6 MM, -11.1% YOY (COMPARABLE -12.8%) • Although facing multiple challenges within the industry, revenue from GOLF CLUBS BERES golf clubs rose by 19.6% in Japan and revenue from BeZEAL 3 went NET SALES -15.1% TO JPY 18,2
Slide 10: Performance Overview by Channel
PERFORMANCE OVERVIEW BY CHANNEL FY24 NET SALES: JPY 26,223 MM / USD 182.6 MM, -11.1% YOY (COMPARABLE -12.8%) NET SALES MIX BY CHANNEL DIRECT-TO-CONSUMER CHANNELS % NET SALES +7.2% TO 10,952 JPY MILLION / 76.3 USD MM GROSS MARGIN +7.0PP TO 56.8% • Net +5 new locations, mainly located on prime golf co
Slide 11: Business Highlight
03 BUSINESS HIGHLIGHT
Slide 12: Honma Growth Strategy: Single brand, Multi-categories & Asia-focused
HONMA GROWTH STRATEGY: “Single brand, Multi-categories & Asia-focused” The Group strategically focuses on the development of its home markets in Asia and the marketing of its exquisite product offerings targeting super-premium and premium-performance segments. the THREE PILLARs of HONMA’s GROWTH STR
Slide 13: Product: Unique club portfolio representing Japanese craftsmanship
PRODUCT: Unique CLUB PORTFOLIO representing Japanese craftsmanship and innovative technology FOCUSING ON SUPER-PREMIUM AND PREMIUM-PERFORMANCE CONSUMER SEGMENTS SUPER-PREMIUM PREMIUM-PERFORMANCE OTHER CLUB PRODUCTS PUTTERS, COUNTRY SPECIFIC MODELS, SPECIAL EDITIONS BERES 09 TW767 BeZEAL 3 Launched i
Slide 14: Product: Unique club portfolio representing Japanese craftsmanship
PRODUCT: Unique CLUB PORTFOLIO representing Japanese craftsmanship and innovative technology FOCUSING ON SUPER-PREMIUM AND PREMIUM-PERFORMANCE CONSUMER SEGMENTS • The newly launched BERES 09 and BeZEAL 3 has achieved great success, reconfirming HONMA’s strong brand equity, and its ability to withsta
Slide 15: Product: Continued pivoting sales growth in golf balls
PRODUCT: Continued pivoting sales growth in golf balls UPWARD RETAIL PRICE ADJUSTMENT TO FURTHER STRENGTHEN BALL’S PRODUCT PYRAMID • Golf ball sales declined marginally by 0.2% YOY to JPY 2,936 million; gross margin decreased by 5.9PP to 23.4% following continued currency depreciation and cost press
Slide 16: Product: Nurturing apparel business to build a leading golf lifestyle brand
PRODUCT: Nurturing apparel business to build a leading golf lifestyle brand APPAREL SALES +4.9% YOY TO JPY 3,158 MILLION APPAREL COLLECTION CONSISTING OF 3 DISTINCTIVE PRODUCT LINES TARGETING GROSS MARGIN +16.8 pp TO 43.5% PREMIUM PERFORMANCE AND FASHION ATHLETIC CONSUMER SEGMENTS • Sales from mainl
Slide 17: Channel: 360-degree brand experience in new retail space
CHANNEL: 360-degree brand experience built into new retail space and environments DIRECT-TO-CONSUMER RETAIL CHANNELS ACT AS BRAND EXPERIENCE HUBS ACROSS ALL MARKETS • Sales from self-owned channels +7.2% to JPY 10,952 million • Retail sales from Japan +16.0%; sales from mainland China +15.7% • 95 se
Slide 18: Channel: Further expanding digital eco-system
CHANNEL: Further expanding digital eco-system and private sphere to boost consumer loyalty FUELED BY UP-TO-DATE CONTENT MARKETING ON SOCIAL MEDIA AND CRM PLATFORMS E-COMMERCE SALES GREW BY 17.4% T-MALL FLAGSHIP STORE US E-COMMERCE SITE DRIVEN BY ACCELERATED INVESTMENT IN DIGITAL MARKETING WITH A FUL
Slide 19: Marketing: Re-defining Honma as a premium golf lifestyle brand
MAKETING: Re-defining HONMA as a dynamic, relevant and premium golf lifestyle brand CONTINUOUSLY DRIVE BRAND AWARENESS ACROSS ALL MARKETS DIGITALIZED CONTENT MARKETING THROUGH RELAUNCHED GLOBAL WEBSITE & SOCIAL MEDIA PLATFORMS RELEVANT TO EACH MARKET • Frequently updating digital marketing content o
Slide 20: Marketing: Customer events
MAKETING: Re-defining HONMA as a dynamic, relevant and premium golf lifestyle brand CONTINUOUSLY DRIVE BRAND AWARENESS ACROSS ALL MARKETS CUSTOMER EVENTS 3,564 EVENTS, 53,230 PARTICIPANTS • Customer events are important customer touch points for HONMA • These events were mainly held on golf courses
Slide 21: Marketing: Sponsored players and brand ambassadors
MAKETING: Re-defining HONMA as a dynamic, relevant and premium golf lifestyle brand CONTINUOUSLY DRIVE BRAND AWARENESS ACROSS ALL MARKETS SPONSORING 6 PROFESSIONAL PLAYERS PLUS A WIDE NETWORK OF TEAM HONMA WINNING CHAMPIONSHIP IN PROFESSIONAL TOURS HONMA BRAND AMBASSADORS AND COACHES • Renewed endor
Slide 22: Marketing: Brand PR and media exposure
MAKETING: Re-defining HONMA as a dynamic, relevant and premium golf lifestyle brand CONTINUOUSLY DRIVE BRAND AWARENESS ACROSS ALL MARKETS OTHER BRAND PR & MEDIA EXPOSURE • Actively reinforcing HONMA’s brand image through continued media exposure and collaboration with brand ambassadors and social ce
Slide 23: Financial Review
04 FINANCIAL REVIEW A N\\
Slide 24: Resilient performance and improvements under a challenging environment
Resilient performance and improvements under a challenging environment NET SALES GROSS PROFIT & GROSS MARGIN JPY MM JPY MM - 11.1% 29,495 -10.4% 28,971 26,223 15,686 14,988 22,735 13,433 11,445 +0.4pp 54.1% 50.3% 50.8% 51.2% FY2021 FY2022 FY2023 FY2024 FY2021 FY2022 FY2023 FY2024 Net Sales Gross Pro
Slide 25: Continued OPEX optimization to resource to win
Continued OPEX optimization to resource to win TO ENHANCE AS WELL AS TO MITIGATE NEGATIVE IMPACT FROM GLOBAL ECONOMIC UNCERTAINTY SG&A EXPENSES BRIDGE SG&A EXPENSES BREAKDOWN JPY MM AS % OF SALES 11,020 +2.9pp 264 131 10,547 40.3% -250 37.4% -283 2.7% -289 -47 2.0% 5.0% 3.6% 4.8% 5.2% -4.3% 7.3% 7.2
Slide 26: Healthy balance sheet and strong operating cashflow
Healthy balance sheet and strong operating cashflow NET OPERATING CASH FLOW CASH and CASH EQUIVALENTS JPY MM JPY MM C A G R : + 18.7% 6-YEAR +18.0% % 5,916 +47.3 14,455 16,617 5,416 14,085 3,983 10,772 3,676 FY2021 FY2022 FY2023 FY2024 FY2021 FY2022 FY2023 FY2024 INTEREST-BEARING LIABILITIES INTERES
Slide 27: Continuously improving working capital efficiency
Continuously improving working capital efficiency RECEIVABLES TURNOVER DAYS (1) PAYABLES TURNOVER DAYS (1) INVENTORY TURNOVER DAYS (1) DAYS DAYS DAYS +22 days 68 321 299 -1 day 54 53 293 58 -13 days 47 195 209 243 34 34 38 21 63 52 56 FY2022 FY2023 FY2024 FY2022 FY2023 FY2024 FY2022 FY2023 FY2024 Ra
Slide 28: Outlook
05 OUTLOOK
Slide 29: Outlook
OUTLOOK FOR THE YEARS AHEAD CHALLENGES HONMA will continue executing its growth strategies to build a world-leading golf lifestyle The golf industry will continue to face multiple challenges in company, leveraging its unique brand legacy, innovative technologies and exquisite the near future, includ
Slide 30: Appendix
06 APPENDIX
Slide 31: Business Review by Market: Japan
BUSINESS REVIEW BY MARKET HOME MARKET JAPAN STEADY AND QUALITY GROWTH IN MULTIPLE PRODUCT MARKET CATEGORIES FOLLOWING FURTHER MARKET REOPENING • 2nd largest golf equipment market in the world 2.4% 1.4% • Total golf product market size approximates to USD 1.7 billion in 2021 (1) % of Total Sales • 2,
Slide 32: Business Review by Market: Korea
BUSINESS REVIEW BY MARKET HOME MARKET KOREA ONGOING CHANNEL OPTIMIZATION FOR MARKET BETTER PREPARATION ON PREMIUN- PERFORMANCE SEGMENT EXPANSION • Fast growing and under-penetrated market • 3rd largest golf market in the world with USD 3.9 billion golf apparel sales % of Total Sales 2.4% 1.4% and US
Slide 33: Business Review by Market: China
BUSINESS REVIEW BY MARKET HOME MARKET CHINA (INCL. HK & MACAU) MEANINGFUL 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 2.4% 1.4% • 478 golf courses, expanding indoor facil
Slide 34: Business Review by Market: North America
BUSINESS REVIEW BY MARKET NEW MARKET NORTH AMERICA BUILDING A UNIQUE DIRECT-TO-CUSTOMER MARKET DISTRIBUTION MODEL TO CAPTURE SUPER- PREMIUM AND PREMIUM-PERFORMANCE SEGMENT • Largest golf market in the world with USD 7.7 billion golf retail sales, accounting for 38.6% of the global golf economy, and
Slide 35: Business Review by Market: Europe
BUSINESS REVIEW BY MARKET NEW MARKET EUROPE IMPROVED MARGIN FOLLOWING CHANNEL MARKET ADJUSTMENT • Mature but fragmented golf market • England, Austria, Germany, France and Sweden in total accounts for % of Total Sales 2.4% 1.4% around 12% of the world’s golf equipment sales, which approximates to US
Slide 36: Consolidated P&L
CONSOLIDATED P&L For the twelve months ended 31 March 2024 2023 YoY Change JPY % JPY % % (In thousands, except for percentages and per share data) Consolidated Statement of Profit or Loss Revenue 26,222,857 100.0 29,494,999 100.0 -11.1 Cost of sales -12,790,169 -48.8 -14,506,744 -49.2 -11.8 Gross pr
Slide 37: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET Financial Position as at 2024.3.31 2023.3.31 JPY JPY (In thousands, except for percentages and per share data) Consolidated Statement of Financial Position Assets Non-current assets 8,894,695 8,208,542 Current assets 33,650,502 32,158,818 Total Assets 42,545,197 40,367,360
Slide 38: Consolidated Cash Flows
CONSOLIDATED CASH FLOWS For the twelve months ended 31 March 2024 2023 JPY JPY (In thousands, except for percentages and per share data) Cash and cash equivalents at the beginning of year 14,084,742 14,454,554 Net cash flows generated from operating activities 5,416,118 3,675,831 Net cash (used in)
Slide 39: For more inquiries, please contact ir@honma.hk
For more inquiries, Please contact ir@honma.hk