Golf Digest Online : Results Briefing for the Third Quarter Ended September 30, 2023

Results Briefing for the Third Quarter Ended September 30, 2023

Golf Digest Online Inc.

November 13, 2023

Disclaimer

• This results briefing may contain forecasts for the GDO Group's future business results. Readers are cautioned that actual business results may differ from these forecasts due to a variety of elements, including latent risks and uncertainties. For more information on factors that may impact our business results, please refer to the Business Risks section in our Securities Report. However, please note that elements that may impact our business results are not limited to those included in the Business Risks section.
• Effective from the fiscal year ending December 31, 2022, the GDO Group applies Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, hereinafter referred to as Accounting Standard for Revenue Recognition, etc.).
• Readers are asked to refrain from the unauthorized reproduction of this briefing or any data therein.

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INDEX

1．Business activity in the January-September period

2．Full-year forecast

3．(Reference material)

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01CHAPTER

Business activity in the January-September period

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Summary of the January-September period

For the overseas sement, the new Golf Launch Monitor Business operation is fully internalized and is driving revenue growth of the overseas segment. Profits have been negatively impacted with lower core business sales which have resulted in a lower profit margins and further increase in amortization costs of goodwill.

▶	The Golf Launch Monitor business contributed to substantial sales growth for the overseas segment. The domestic segment struggled within the
	challenging market environment.
▶	The gross profit margin declined due to inventory adjustments in domestic Golf Equipment Sales. In addition, goodwill and intangible assets
	were amortized on a straight-line basis throughout the year, leading to the booking of an operating loss.
▶	Non-operating profit of 760 million yen recognized due to yen depreciation.

	Net Sales
	38.38billion yen
EBITDA		Operating Profit		Profit attributable to
			2.69billion yen			owners of parent
				-0.29billion yen
	YoY +5.17 billion yen				0.13 billion yen
		YoY -0.12 billion yen		YoY -1.21 billion yen		YoY -1.30 billion yen
	+15.6％
			-4.4％		ー		-90.5％
© Golf Digest Online Inc.			(Booking of an 840 million yen gain on forgiveness of debts during the previous fiscal period) 5

P/L Overview

（Millions of yen）	9 months / 2022	9 months / 2023	Increase/decrease	Increase/decrease
			amount	percentage
Net sales	33,205	38,383	+ 5,177	( + 15.6%)
（Domestic）	19,943	20,841	+ 897	( + 4.5%)
（Overseas）	13,262	17,542	+ 4,279	( + 32.3%)
Gross profit	11,652	13,115	+ 1,462	( + 12.6%)
SG&A	10,731	13,405	+ 2,674	( + 24.9%)
EBITDA	2,823	2,699	- 123	( - 4.4%)
（Domestic）	1,714	1,444	- 270	( - 15.8%)
（Overseas）	1,108	1,255	+ 146	( + 13.2%)
Operating profit	921	-290	- 1,211	( - ％)
（Domestic）	1,248	961	- 286	( - 23.0%)
（Overseas）	-326	-1,251	- 925	( - ％)
Ordinary profit	1,026	268	- 758	( - 73.8%)
Net income	1,446	137	- 1,308	( - 90.5%)

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Consolidated Net Sales│By Segment

Double-digityear-on-year growth in consolidated net sales

• Strong growth in the Overseas segment driven by the Golf Launch Monitor business and the non-cash positive impact of the US dollar appreciation to the yen exchange rate.
• Domestic segment net sales were below target within the Japanese market environment and its lower demand.

Net Sales by Segment (Quarterly)(Millions of yen)

Net Sales by Segment (Q3 Cumulative)(Millions of yen)

■ Domestic Net Sales

■ Overseas Net Sales

	FY2022	FY2023	YoY
Consolidated	33,205	38,383	+5,177		+15.6％
Net Sales
■ Domestic	19,943	20,841	+897		+4.5％
■ Overseas	13,262	17,542	+4,279		+32.3％

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P/L Overview ($USD) ( For Reference )

	9 months / 2022	9 months / 2023	Increase/decrease	Increase/decrease
			amount	percentage
Net sales	258.8	277.6	+ 18.8	( + 7.3%)
（Domestic）	155.4	150.7	- 4.6	( - 3.0%)
（Overseas）	103.3	126.9	+ 23.5	( + 22.8%)
Gross profit	90.8	94.8	+ 4.0	( + 4.5%)
SG&A	83.6	96.9	+ 13.3	( + 15.9%)
EBITDA	22.0	19.5	- 2.4	( - 11.3%)
（Domestic）	13.3	10.4	- 2.9	( - 21.8%)
（Overseas）	8.6	9.0	+ 0.4	( + 5.1%)
Operating profit	7.1	-2.0	- 9.2	( - ％)
（Domestic）	9.7	6.9	- 2.7	( - 28.5%)
（Overseas）	-2.5	-9.0	- 6.5	( - ％)
Ordinary profit	8.0	1.9	- 6.0	( - 75.7%)
Net income	11.2	0.9	- 10.2	( - 91.2%)

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Consolidated Net Sales│By Service

All services grew net sales

• Great progress in internalizing the Golf Launch Monitor business following the business acquisition in September 2022 and the successful launch of the new launch monitor model SkyTrak+ in May 2023 contributed to sales growth.
• Steady growth in the Golf Lessons service in the overseas segment.
• Others segment driven by Golf Driving Range business with a 388 million yen contribution to net sales.

Net Sales by Service (Quarterly)(Millions of yen)

■ Golf Goods Sales

■ Golf Course Business ■ Golf Lessons

■ Golf Launch Monitors Business ■ Others

Net Sales by Service (Q3 Cumulative)(Millions of yen)

	FY2022	FY2023	YoY
Consolidated	33,205	38,383	+5,177	+15.6％
Net Sales
Sales	17,054	17,604	+549	+3.2%
■ Golf Goods
Business	3,877	4,071	+194	+5.0％
■ Golf Course
■ Golf Lessons	9,715	10,699	+984	+10.1％
Monitors Business	236	3,339	+3,102	+1309.7％
■ Golf Launch
■ Others	2,320	2,668	+347	+15.0％

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Domestic Segment│PL

▶	Within a challenging Japanese domestic environment, Golf Equipment Sales and Golf Course Businesses had
	slower growth
▶	Profit margin decline in Golf Equipment Sales and decrease in the number of tee time bookings in the July-
	September period negatively impacted EBITDA and operating profits

（Millions of yen）	9 months / 2022	9 months / 2023	Increase/decrease	Increase/decrease
			amount	percentage
Net sales	19,943	20,841	+ 897	( + 15.6%)
Golf Equipment Sales	13,554	13,884	+ 329	( + 2.4%)
Golf Course Business	3,877	4,071	+ 194	( + 5.0%)
Golf Driving Ranges	743	1,132	+ 388	( + 52.3%)
Others	1,769	1,754	- 15	( + 99.2%)
EBITDA	1,714	1,444	- 270	( - 15.8%)
Operating profit	1,248	961	- 286	( - 23.0%)

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