supplementary explanation materials -...

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

Supplementary Explanation

Materials

Golf Digest Online Inc. (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

3


Corporate Profile

Company Name: Golf Digest Online Inc.

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 Securities code: 3319)

President & CEO: Nobuya Ishizaka

Located: 3-4-8 Toranomon, Minato-ku, Tokyo Japan

Amount of capital: 1,424 million yen (as of June 30, 2016)

Number of Employees

(Consolidated): 477 (as of June 30, 2016, including part-time employees)

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

In-person

Golf Lessons

Other

channels Shops

Database

Events

5


Golfers in Japan： approx. 7.2 million

Online channel monthly visitors※

6,000,000 Physical channel monthly users

440,000

GolfTEC by GDO

members: 5,000/month

Golfers booked on GDO

400,000/month

Tournament/Events

Participants: 1,000/month

※PC + smart phone unique visitors/month

( in 2015 )

Enjoy 「GOLF」

Golf Garage

Store visitors: 30,000/month

Full support of ecosystem for golfers


GDO Club Members

GDO Club Members: 40% of golfers in Japan

2.90 million as of end June, 2016

(millions of

persons)

7


■Gender

Male : 86%

Female members in increasing trend

■Age group

Average age : 49

Over 75% members in 30s thru 50s

Core age group of female is in 30s/40s

■Average golf score

Intermediate (average in 90s) : 34%

Core members are aiming for constant

score at 80s

■Occupation

Company executives/Managers,

self-employed : approx. 35%

Many influencers in business

■Annual Income

Over ¥10.0 million : 24%

Over ¥8.0 million : 40%

User Profile

GDO users’ main profile:

■Age Group ■Gender

■Annual Income

(As of June 30, 2016)

35% belong to management level with 40% having annual

household income of ¥8.0 million or over. Possesses influence over

business and high purchasing power as an individual.

8


Environment surrounding GDO

9


Golf course booking:

※Source：「transition of golf courses/users through taxation of golf facility tax （in Nov., 2015）」（by Nihon Golf Keieisha Kyokai）

No. 1 USA 15,372

No. 2 Japan 2,383

No. 3 Canada 2,363

Number of golf courses in the world

※Source: 「Golf around the world 2015」(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 80% 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 Nov.,2015)」(by Nihon Golf Keieisha Kyokai)

GDO booking increasing, while total golf course visitors less


※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

12


Golf retail:

※Source：「Leisure White Paper 2015」(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） 74.0

No.2 B company （Mass retailer）

52.0

No.3 Ｃ company （Mass retailer）

21.0

No.4 Ｄ company （Mass retailer）

18.0

No.5 GDO 12.4

※data: Estimation by “2015 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.

GDO sales growing, while golf equipment market shrinking

(¥ in billions)


Segment Information

14


Retail Business

Number of Products

New : 100,000

Used : 20,000

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

15


Retail Business : Net Sales Trend

Robust sales in apparel via

smartphone

( ¥ Million)

16


* 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

Retail Business : YoY Comparison of Order Amount

17


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,

and Yokohama Sakuragicho (Scheduled to open in Aug. 2016) (『GolfTEC by GDO』 studios : 7 locations in Kanto region)

Main Services

• Swing evaluation

• Absolute private lessons

• GDO’s custom club fitting

Developing lesson services in alliance with GolfTEC, No. 1 in the U.S.

Right: Club fitting

Left: Lesson approach visualizing

improvement

18


Golf Course Business

Number of partnering golf courses

Over 2,000 golf courses (including overseas)

Main Services

Golf course reservation (via online and phone)

GDO Premium Club

Organizing tournaments/events

Providing online reservation system for golf courses

Participating in “Golfers Ponta,” golfers-reward

point program

GDO’s Strengths

Overwhelming amount of information

New product commercialization anticipating

potential needs

Providing high quality of service

19


Revenue Models of Golf Course Business

Golf Course Reservation Services

Partnering

golf courses Golfers

Golf fee

Fees per player ×

number of players

Provide golf course

reservation services

System Sales for Golf Courses

Partnering

golf courses

Provide systems

Provide ASP Services

Payments

Tee time booking

20


Golf Course Business Net Sales Trend

Strong sales via

smartphone

(¥ Million)

21


Media Business

Viewer ratings in golf category No. 1 in Japan

Main Services

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

Score management, Community service

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

Originality and timeliness of news coverage

Supporting a wide variety of devices

22


Media Business : Smartphone Ratio

Growth in Smartphone Ratio among Total Visitors

23


Services tailored to Smartphones

Number of Monthly Unique Users

GDO Golf Bulletin

Jan. 2014 -

GDO Score Management

Jan. 2014 -

GDO Reserve Golf

May 2012 -

Golf Easy phone reservation

Feb. 2015 -

LINE Stickers

June 2015 -

Round＋

Dec. 2014 -

HOT PRICE

Dec. 2014 -

Jan. Apr. Jul. Oct. Jan. Apr. Jul. Oct. Jan. Apr. 2014 2015 2016

24


Mid-term Plans

25


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)

26

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

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

¥0.05 billion to ¥0.2 billion

¥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

28

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

29

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

30

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

¥0.9 billion to

¥1.05 billion

Over ¥2.0 billion

Net sales

¥18.0 billion

¥19.6 billion to

¥20.3 billion

Mid-term Business Plan (2016-2018) financials

31

Double digit annual average growth rate


Performance Outlook for FY2016

(¥ Million)

Theme for the fiscal year ending December 31, 2016:

“Adventure”

Thoroughly pursue growth in existing business

Take one step beyond traditional frameworks for further growth

of the mid-term business plan = “Adventure”

32

＋1,553 ～＋2,253(109%) (112%)

＋71 ～＋221(109%) (127%)

＋73 ～＋223(109%) (127%)

＋19 ～＋169(105%) (139%)

1株当たり配当金 5円50銭

当期純利益 430 450 ～ 600

6円00銭＋0円50銭

経常利益 816 890 ～ 1,040

営業利益 828 900 ～ 1,050

売上高 18,046 19,600 ～ 20,300

前年比2015年度

実績2016年度

見通しFY2015

Actual

FY2016

Outlook

Net sales

Operating profit

Ordinary profit

Net income

Dividends per share

YoY

¥5.50 ¥6.00 +¥0.50


Shareholder Returns

33


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

・ Dividend paid for FY2015

¥5.5 per share

・ Dividend forecast for FY2016

¥6.0 per share (Interim dividend of ¥3.0 and year-end dividend of ¥3.0)

34


Shareholder Benefit Program

Will be carried out semiannually in FY2016

(Record date end of June and December)

35


Financial Information

36


Financial Highlights : Consolidated Net Sales

(¥ Million)

*Results for 2013 are non-consolidated

37


Financial Highlights : Consolidated Gross Profit

(¥ Million)

38



Financial Highlights : SG&A Expenses

(¥ Million)

39



Financial Highlights : Consolidated Operating Profit

(¥ Million)

40



Financial Highlights : Profit attributable to owners of parent

(¥ Million)

41



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.


(¥)

42

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