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HONMA Golf Announces Robust FY2021/22 Interim Results for the Six Months ending Sep 30, 2021

  • Half year sales of JPY 11,872 million, up 31.1% and 12.1% versus
    same period of FY2020 and FY2019 respectively
  • EBITDA increased by 4.6 times to JPY 2,635 million as compared
    to same period last year
  • Interim dividend of JPY 1.5 per share

SAR – Media
 – 26 November 2021 – HONMA Golf
Limited (“HONMA” or the “Group”; together with its
subsidiaries, the “Group”; HKEx stock code: 6858), one of the most
prestigious and iconic brands in the golf industry, is pleased to announce its
consolidated results for the six months ended 30 September 2021 (the “Period”).


Record sales
growth driving visible improvements in all financial metrics

During the
Period, the Group delivered robust growth across most of its markets and
product categories, resulting in positive and visible improvements in key
financial metrics.


Net sales were
JPY 11,872.0 million (equivalent to USD106.8 million) during the Period,
representing a significant increase of 31.1% and 12.1% as compared with the
same period of FY2020 and FY2019 respectively, marking a full recovery from the
negative impact of Covid-19.


Japan and China led the way in terms of growth and rose by 105.9% and 54.0%
respectively, while North America, Europe and Rest of the World[1]
followed the way with double digit growths.


All product
categories showed double if not triple-digit growth
across the board, where apparel grew by 151.3% and golf clubs by 23.9% compared
to the same period last year. The Group also made continued inroads into
performance club and non-club product categories thanks to steadfast execution
of growth strategies by our global teams.


During the Period,
the Group’s gross profit margin climbed up by 4.1 percentage points to 55.3%,
despite strong supply chain headwinds.


Profit before
tax was JPY 1,746.5 million (equivalent to USD15.7 million), up from a loss of
JPY 431.4 million for the same period last year. Operating cash flow remained strong,
expanding by 43.7% to JPY 3,702.4 million (equivalent to USD33.3 million) in the


The Board
proposed an interim dividend of JPY 1.5 per share,
amounting to a total of JPY 908.5 million for
the six months ended 30 September 2021, representing 67.3% of the Group’s
distributable profits for the Period.


Most markets demonstrated
vigorous growth at full throttle

Japan demonstrated the greatest growth, pushing up sales by 105.9% to JPY 3,821.6
million (equivalent to USD 34.4 million), on the back
of a complete sales recovery in all channels and product categories. Another home
market, China, continued to deliver solid performance, presenting a
year-on-year sales growth of 54.0% to JPY 3624.7 million (equivalent to USD 32.6 million), driven by continued
expansion of the Group’s retail footprint and optimization of its product


Similarly, sales from North
America, Europe and Rest of the World also increased significantly by 40.7%, 29.2%
and 30.0% respectively. Following a gradual easing of government-imposed social distancing
rules, HONMA resumed distribution network expansion in
North America and Europe and added 100 and
37 net points of sales (“POS”) respectively, in response to growing increase in golf participation
in these markets and enhanced brand awareness.


South Korea
fell however, below same period last year with sales declining by 31.0% to JPY 2,149.8
million (equivalent to USD 19.3 million), due to unexpected component shortfall.
Up to the reporting date, such constraints have been substantially relieved and
shipments are expected to resume from December 2021.


All product
categories recorded double if not triple digit growth

Thanks to continued
product development efforts and continued market penetration, the Group
achieved outstanding sales growth across all product categories. The Group now
offers a complete golf lifestyle experience through its extensive range of
HONMA-branded golf clubs, golf balls, apparel and other accessories.


HONMA continued to focus on club products that best
represent traditional Japanese craftsmanship and innovative technology to
tailor to players in the super-premium and premium-performance segments. In
January 2021, HONMA launched its second performance enhancement club set, the GS
series, targeting avid golfers of 8-20 handicaps. With deeper penetration into
the performance club segment, sales from golf clubs, which account for 73.4% of
the Group’s total sales, increased by 23.9% to JPY 8,719.4 million (equivalent to
USD 78.5 million) as compared to the
same period last year, reaffirming HONMA’s strong brand equity and its continuous
ability to withstand economic challenges since it started in the golf business back
in 1959.


Beyond clubs, HONMA has been continuously
nurturing its non-club business in Asia home markets as an important pillar of
its growth strategies.


Sales of apparel
increased by 151.3% to JPY 1,259.3 million  (equivalent to USD 11.3 million) during the Period,
accounting for 10.6% of total sales, thanks to continued investment in product
development, optimization of merchandise planning and improved retail
operations. With this, apparel overtook balls and accessories to become the second largest product category of
HONMA, the first time since its re-launch in Spring 2019.


Revenue from golf balls grew steadily by 24.3% to JPY 1,153.7 million (equivalent to USD 10.4 million) during this period hence delivering a CAGR of 41.1%
over the last six years. The Group further utilized its leading R&D
capabilities and launched ball products pivoting a pyramid product strategy
while continuously gaining mind and market share.


retail presence with increased same-store-sales (“SSS”) and surging e-commerce

During the Period, the Group further
expanded HONMA’s retail presence through location optimization, elevated visual
design and merchandising display to provide better consumer experiences.


HONMA operates the largest number of self-operated
stores among major golf companies, providing consumers with a 360-degree
experience of the HONMA brand and its products. During the Period, the number
of HONMA’s self-operated stores dropped slightly by 3 to 77, while sales grew by 34.6% to JPY 3,516.1 million , demonstrating
visible SSS growth.


Sales from third-party retailers and wholesalers
increased by 29.7% to JPY 8,355.9 million (equivalent to USD 75.2 million) for the Period as retail operation stablized after Covid-19.
In particular, sales to the Group’s retail partners in Japan grew by 265.3% as
most retailers recovered from extended and lingering business closure during the
pandemic. Total POS in all markets increased by 182 to 4,117 by the end of the


It is worth noting that sales from the Group’s
e-commerce channels jumped by 99% during the Period. The Group
currently operates e-commerce channels in China, Japan, South Korea and the US
and all these markets reported record sales results during the Period, led by sales growth from China of 114.9%. During the
most recent 2021 ‘Double 11’ e-commerce campaign in China, total GMV from HONMA’s
Tmall and JD flagship stores more than doubled compared with the same period
last year. Such robust growth was fuelled by accelerated digital marketing
efforts, in particular content marketing and full-channel approach, executed by
dedicated e-commerce teams. The Group has seen continued momentum in e-commerce
driven by profound and accelerated change in consumer behaviour and business environment through digital transformation.


Re-defining the
HONMA brand

Group made further efforts to improve its global brand positioning and its communication
and engagement with existing and potential consumers in the super premium and
premium performance segments, with a view to re-define HONMA as a premium,
dynamic, modern and global brand through the 360-degree HONMA experience in
retail stores, dedicated customer events and topical digital content. HONMA has
been proactively engaging with younger internet-savvy golfers by regularly
updating its global website and social media


continuous efforts in recent years, HONMA has gained strengthened brand
awareness and recognition in the global golf community. In September 2021,
HONMA was featured by CNN Living Golf in its Tokyo Olympics episode, showcasing
HONMA’s more than 60 years of dedication towards premium club development.


Business Outlook

With the
global easing of Covid-19 related restrictions, the golf industry has seen a
speedy recovery and continued increase in participation and purchase interest worldwide.
HONMA has observed pent-up demand to play
golf, a visible increase in new and returning golfers and an uptick in new
orders from both end consumers and retailers. The Group fully expects the
golf industry to settle into the new environment.


Moving forward,
the Group will continue to execute its long-term growth strategy to build a
world-leading golf lifestyle business by leveraging HONMA’s brand legacy,
expanding its distribution network, innovative technologies and traditional
Japanese craftsmanship. In the face of continued uncertainty posed by the Covid-19
pandemic, the Group will continue to take proactive action to optimize cost,
maximize liquidity and protect the health of its employees.


The Group will
also continue to transform its brand values into customer
loyalty, with the exclusive brand experience through its self-operated stores forming
the centerpiece of HONMA’s new consumer touchpoints and acting as hubs to
generate traffic to HONMA’s extensive shop-in-shops, third-party retailers,
golf courses and online e-commerce platforms. The Group will further increase
market share in its biggest markets of Japan, South Korea and China by
maintaining its leading position in the super-premium segment while making
solid inroads into the fast-growing premium-performance segment, and at the
same time striving to pivot growth in North America and Europe based on updated
products and a direct-to-consumer (DTC) distribution strategy. In terms of products,
the Group will continue to nurture complementary non-club product lines to
provide customers with a complete golf lifestyle experience, as well as push
forward product innovation and development to cater to the latest market


Mr. LIU Jianguo,
Chairman of the Board, President and Executive Director of HONMA Golf Limited
, said, “We have seen
a significant ramp-up of interest worldwide in playing golf, purchasing golf
products and participating in the industry. Our global HONMA teams have spared
no efforts to seize the opportunities and achieved excellent results across all
product lines in most of our markets. Although challenges remain, especially
with the pandemic continuing to affect mobility and supply chains and with global
inflationary pressures, we are positive that our efforts will outpace the
headwinds as we forge ahead with our growth strategies.”


[1]  “Rest of the World” refers
to the markets HONMA operates in, excluding Japan, South Korea, Mainland China
and Hong Kong, North America and Europe

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