Supplementary Explanation Materials - … 31, 2017 · Company Name: Golf Digest Online Inc....

Copyright(c) Golf Digest Online Inc. All Rights Reserved.

Supplementary Explanation Materials Golf Digest Online Inc. (TSE Stock Code ：3319) URL：www.golfdigest.co.jp

page Copyright(c) Golf Digest Online Inc. All Rights Reserved. 2

The Company’s plans, projections, strategies, etc., stated in these materials are subject to

potential risks and uncertainties excluding elements that have already been confirmed, and

there is no guarantee on their contents.

Potential risks and uncertainties could include, but are not limited to, economic conditions

mainly consisting of personal consumption trends, general trends in the golf market and the

Internet market that are the Group’s main business domain, the status of market

competition, and drastic technological innovations.

Because no consolidated financial statements were prepared in FY2013, non-consolidated

performance is stated in these materials as the business results for FY2013.

Please refrain from unauthorized reproduction of these materials and data.

Notes concerning these materials

page Copyright(c) Golf Digest Online Inc. All Rights Reserved.

Outline

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Company Name: Golf Digest Online Inc. （GDO） URL: www.golfdigest.co.jp

History: Incorporated on May 1st, 2000 Listed on Mothers, TSE on April 1st, 2004 Listed on 2nd Section, TSE on May 1st, 2015 Listed on 1st Section, TSE on September 07th, 2015 (TSE Stock Code ：3319)

President & CEO: Nobuya Ishizaka

Located: 2-10-2 Higashi-gotanda, Shinagawa-ku, Tokyo, Japan

Amount of capital: 1,458 million yen

Number of Employees (Consolidated):

534 (including part-time employees)

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Corporate Profile

(as of June 30, 2017)

http://www.golfdigest.co.jp/


GDO Group Business scheme

Online × Offline

Specialized in golf category / Hybrid of online & offline 『GDO Tricycle Business Model』

Tee Time booking

Retail

Golf Media

training centers

Other channels

Shops

Database

Events

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Golfers in Japan： approx. 5.5 million

Online channel monthly visitors※

5,380,000（116% of 2015）

Physical channel monthly users

470,000（107% of 2015）

GolfTEC by GDO members: 6,000/month

Golfers booked on GDO 460,000/month

Tournament/Events Participants: 1,000/month

※PC + smart phone unique visitors/month

（ in 2016）

Enjoy 「GOLF」

Golf Garage Store visitors: 30,000/month

Full support of ecosystem for golfers

DL applications approx.1,670,000

(as of June 30, 2017）

Facebook “like” approx.109,000 (as of June 30, 2017）


GDO Club Members

GDO Club Members: 60% of golfers in Japan

3.17 million as of June 30, 2017

(millions of persons)

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User Profile

GDO users’ main profile ：

■Age Group ■Gender

■Annual Income

（As of June 30, 2017）

Possesses influence over business and high purchasing power as an individual.

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Male ： 86％ Average age 46、 Over 75% members in 30s thru 50s

Over ¥10.0 million : 24%、 Over ¥8.0 million : 40%

■Average golf score

-Intermediate (average in 90s) ： 34% -Core members are aiming for constant ： score at 80s

■Occupation

-Company executives/Managers, self-employed ： 35%

-Many influencers in business


Environment surrounding GDO

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Golf course booking:

※Source：「transition of golf courses/users through taxation of golf facility tax （in Oct., 2016）」（by Nihon Golf Keieisha Kyokai）

No. 1 USA 15,047

No. 2 Canada 2,295

No. 3 Japan 2,290

Number of golf courses in the world

※Source: 「Golf around the world 2017」(by Royal and Ancient Golf Club of Saint Andrews/R&A)

Number of golf courses

Number of golf courses: total number in Japan vs available at GDO

Available at GDO to book 90% of golf courses in Japan


Golf course booking

Visitors booked through GDO (millions of

persons)

Total golf course visitors

(millions of persons)

Number of visitors : Total visitors in Japan vs Visitor through GDO

※Source：「transition of golf courses/users through taxation of golf facility tax (in Oct.,2016)」(by Nihon Golf Keieisha Kyokai)

Share of golf course visitors booked through GDO in total golf course visitors in Japan

in 2003 0.6％ → in 2015 5.5％


※source： golf fee “Specific service business category survey(golf)” by METI (sales and No. of golf course visitors) frequency “Leisure White Paper” （by Japan Productivity Center）

The lower golf fee , the more familiar to golf

Correlation of golf fee and play frequency

golf fee (yen)

frequency

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Golf retail:

※Source：「Leisure White Paper 2016」(by Japan Productivity Center) ※GDO Sales in 2003 is the amount of half year (Jan.-Jun.)

Golf Equipment market

(¥ in billions)

No.1 Ａ company （Mass retailer）

76.0

No.2 Ｂ company （Mass retailer）

56.0

No.3 Ｃ company （Mass retailer）

20.0

No.4 Ｄ company （Mass retailer）

16.0

No.5 GDO 13.3

※data: Estimation by “2016 Golf Industry White Paper” (by Yano Research Institute) and company’s securities report of each company

Golf EC market Sales No.1

（except: brick and mortar stores）

GDO Retail sales

(¥ in billions)

Sales ranking domestic golf retail market Sales : Domestic golf equipment market vs GDO retail

Golf equipment market has certain large share of 20% among sporting goods market in Japan.

(¥ in billions)

Share of domestic golf EC market in domestic golf retail market

in 2003 1.8％ → in 2015 12.4％


Main service

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Sales of golf equipment

Number of Products New : 100,000 items, Used : 30,000 items Brands : 320 brands (domestic & overseas)

Main Services Online sales of golf equipment Purchase and sales of used golf equipment (Online/physical ：『Golf Garage』 5 store locations in Tokyo)

Other Yahoo! ® Shopping

Yahoo! ® Auctions

Amazon.co.jp®

Rakuten Ichiba

GDO’s Strengths Overwhelming product lineup which no one can beat Differentiated information capability Providing high quality of service

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Sales of Golf Equipment

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Golf Equipment sales to total sales

approx. 70% In 2016

Gross profit of Golf Equipment to total gross profit

approx.35% In 2016

YoY comparison of order amount

* Golf equipment market (golf clubs, balls, accessories): “Year-on-year comparison of market scale estimated based on sales results of major retail stores handling golf equipment nationwide” calculated by GfK Lifestyle Tracking Japan


Golf Course Booking

Number of partnering golf courses

Over 2,000 golf courses (including overseas)

Main Services

Golf course reservation (via online & phone & app.)

GDO Premium Club

Organizing tournaments/events

Providing online reservation system for golf courses

GDO’s Strengths

Overwhelming amount of information New product commercialization anticipating

potential needs Providing high quality of service

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Golfers

Revenue Models of Golf Course booking

Golf Course Booking Services

Partnering golf courses

Golf fee

Fees per player × number of players

Provide golf course Booking services

System Sales for Golf Courses

Partnering golf courses

Provide systems Provide ASP Services

Payments

Golf course booking

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Golf Course Booking Service

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Golf Course Booking sales to total sales

approx.25% In 2016

Gross profit of Golf Course Booking to total gross profit

approx.55% In 2016

YoY comparison of customer referrals to golf courses

* Golf equipment market (golf clubs, balls, accessories): “Year-on-year comparison of market scale estimated based on sales results of major retail stores handling golf equipment nationwide” calculated by GfK Lifestyle Tracking Japan


Golf Media

Viewer ratings in golf category No. 1 in Japan

Main Services

Golf media (News, GDO GOLF Style, Club information)

Advertisements/Marketing service

Mobile service (Free/Pay-per-use service)

GDO Cards

Strategic Alliance Partners

PGA tour (USA), European tour,

Asian tour, Golf Digest Magazine (USA)

GDO’s Strengths

Overwhelming amount of information and high quality of contents

Providing high quality of service Supporting a wide variety of devices

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Broadening the Base of Golfers “GolfTEC by GDO”

Introducing systems and know-how through alliance with GolfTEC, No. 1 golf lesson chain in the U.S.

Studios Roppongi, Ebisu, Ginza, Kanda, Ikebukuro, Ginza ANNEX,

Yokohama Sakuragicho, Shinjuku, Osaka Umeda （『GolfTEC by GDO』 studios : 9 locations in Kanto region & Kansai region）

Main Services

• Swing evaluation • Absolute private lessons • GDO’s custom club fitting

Lesson approach visualizing improvement

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GDO’s Strengths

Differentiated lesson method Providing high quality of service Creating a total Experience Store not limited to

golf lessons

※GOLFTEC - Headquarters : Denver, Colorado - History : since 1995 - Location : more than 175 studios in the U.S., Canada and Korea - Over 25% share in Golf lesson market in the U.S.

Studios of “GOLFTEC by GDO”

GDO’s custom club fitting Service


Mid-term Plans

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FY2015: The Final Year of the Mid-term Business Plan (2013-2015)

Net sales

Established in May 2000

Listed on TSE

Mothers in Apr. 2004

Operating profit

Changed the fiscal year end

Complete redesign of IT and management

platforms

Establishing the GDO“Tri-business Model”

Invest in the future

Focus on core and regain higher growth

Mid-term business plan (2013-2015)

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Transferred to First Section of

TSE on Sept. 2015

Jul. to Dec.


¥13.5 billion to ¥14.0 billion

¥14.0 billion

More than 120% of 2013

¥18.0 billion (129% compared to 2013)

* Results for 2013 are non-consolidated 24

Achievement of Targets of the Mid-term Business Plan (2013-2015)

Focus on core and regain growth

- Rebuild core as golf specialty player - Strengthen management resources and

capabilities - Strengthen balance sheet and bottom line

Net sales

Operating profit


¥0.29 billion

Record sales and profits Grew core audience Listed on first section of TSE

More than ¥0.8 billion

¥0.82 billion


Mid-term business plan

Leveraging customer assets in combination with alliances

Targeting Asia and the US

Acceleration of growth

Further strengthen our core services

New startup phase “GDO NEXT from Scratch”

Existing business

New businesses

Overseas businesses

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Acceleration of growth


¥0.23 billion raised during listing on First Section of TSE

Strengthen existing businesses

Sustainable growth

New businesses

Overseas businesses

Aggressive activities aimed at improving corporate value over the mid to long term

Fully leveraging sound balance sheet

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Mid-term business plan


Mid-term Business Plan (2016-2018)

What is “GDO NEXT from Scratch”

GDO NEXT = Start of second startup phase for GDO

from Scratch = Start from zero base, as well as similar to a scratch handicap golfer, but in GDO’s case, leveraging an entire organization of golf business professionals

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Net sales: Double digit annual average growth rate

Operating profit: Over ¥2.0 billion in 2018

Dividend payout ratio: 20% per annum


¥0.82 billion Operating profit


Over ¥2.0 billion

Net sales

¥18.0 billion


Mid-term Business Plan (2016-2018) financials

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Double digit annual average growth rate


Performance Outlook for FY2016

(¥ Million)

Theme for the fiscal year ending December 31, 2017: “Adventure”

Thoroughly pursue growth in existing business

Take one step beyond traditional frameworks for further growth of the mid-term business plan = “Adventure”

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YoY

＋2,990

(115%)

＋126

(112%)

＋110

(110%)

＋188

(131%)

Dividends per share ￥7.00 ￥9.00 ＋￥2.00

Profit attributable

to owners of parent611 800

Ordinary profit 1,089 1,200

Operating profit 1,073 1,200

Net Sales 19,309 22,300

FY2016

Actual

FY2017

Outlook


Shareholder Returns

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Dividend Policy

■Basic Policy of Distribution of Profits To proactively return profits to shareholders while giving consideration to the balance between business performance and internal reserves.

■Dividends ・ Dividends for FY2016

¥7.0 per share

・ Dividends outlook for FY2017

¥9.0 per share (Interim dividend of ¥4.0 and year-end dividend of ¥5.0)

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Financial Information

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Financial Highlights : Consolidated Net Sales

*Results for 2013 are non-consolidated

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(¥ Million)


Financial Highlights : Consolidated Gross Profit

(¥ Million)

34



Financial Highlights : SG&A Expenses

(¥ Million)

35



Financial Highlights : Consolidated Operating Profit

(¥ Million)

36



Financial Highlights : Profit attributable to owners of parent

(¥ Million)

37



Financial Highlights : Net Income per Share

*The Company carried out a stock split, at a ratio of 100 shares per share on July 1, 2013. Net income (loss) per share is calculated upon the assumption that the stock split had been carried out at the beginning of FY2011. *Results for 2013 are non-consolidated

(¥)

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Supplementary Explanation Materials - … 31, 2017 · Company Name: Golf Digest Online Inc....

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