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Golf Digest Online Inc. (GDO) www.golfdigest.co.jp

Results Briefing for the Third Quarter Ended September 30, 2019 (21st Term)

(Securities Code： 3319)

１．Financial Results for the Third Quarter （January~September, 2019）２．Approach of Third Quarter

３．（Appendix）Five Year Mid- Term Strategic Policy

４．（Appendix）Golf Market Trends

５．（Appendix）Corporate Profile

Sales and EBITDA are progressing as planned, but weak due to weather effects

Net Sales 25.6billion yen YOY ＋40％

（Domestic） 19.9billion yen YOY ＋10％

（Oversease） 5.6billion yen YOY ＋5.6billion yen

EBITDA 1.57billion yen YOY ＋91％

（Domestic） 1.31billion yen YOY ＋20％

（Oversease） 0.26billion yen YOY ＋0.52billion

One year has passed since US GOLFTEC consolidated, and progress has been made as planned. The strengthening of operations and thorough KPI management

resulted.

The impact of Withdrawal of Natural Disasters in October Golf Course Booking Business to Golf Course Booking Service in Thailand  Impact on golf course ・The impact on business results will be minimal due ・Dozens of courses, mainly in the Kanto area are to impairment in the previous fiscal year. flooded. ・Make temporary closure or several golf courses are suspensions due to falling trees or power outages. ・The transportation network to the golf course was Domestic Indoor Golf Lesson Service severed or restricted. ・Opened in Osaka in October. A total of 13 stores. Impact on GDO ・Hiring the Coach remains to be settle. ・Cancellation of Golf course reservation

Change the Contents of Sales of Golf Equipment Service Shareholder Benefit Plan ・After October, sales declined due to a reaction to rush demand before the raise of consumption tax ・Changed the content of the shareholder benefit rate in September. plan based on the end of December 2019 ・Demand is expected to increase due to the release ・return of shareholder benefit will maintain above of a new model of a popular golf club. the average.

（million yen）

2017 2018 2019 FY2019 9 months 9 months 9 months Forecast cumulativ cumulative cumulative （Domestic）（Overseas） YOY （Domestic）（Overseas） Net sales 15,277 18,230 25,602 19,990 5,612 ＋7,372 (140%) 35,000 27,700 7,300

Gross profit 6,365 6,964 10,048 ーー＋3,084 (144%) ーーー

SG&A 5,637 6,510 9,556 ーー＋3,046 (147%) ーーー

EBITDA 1,033 826 1,577 1,316 260 ＋750 (191%) 2,260 2,150 110

Operating profit 728 454 492 935 -443 38 (108%) 900 1,575 -675

Ordinary profit 734 476 485 ーー 9 (102%) 860 ーー

Net income 431 315 203 ーー -112 (64%) 440 ーー

※*※The PL consolidation of GDOS*, a subsidiary, began from the third quarter, and U.S. GOLFTEC began from the fourth quarter of the previous year, respectively.

*GDOS: Abbreviation for GDO Sports, Inc., a wholly-owned subsidiary of the Company *U.S. GOLFTEC：Abbreviation for GolfTEC Enterprises LLC, a subsidiary in which the Company holds 60% equity. Copyright(c) Golf Digest Online Inc. All Rights Reserved 6 Net Sales

Net Sales by Segment Net Sales by Service

Growth both in Domestic and overseas market. Achieve growth with 3 main services

Domestic ：Sales of golf equipment and golf course Sales of Golf equipment：Sales increased due to rush booking business grew. demand before raise of consumption tax rate. Due to the weather factors, it has been weak after 3Q. Golf Course Booking：In the metropolitan area, it was affected by a typhoon but, still in good weather in Japan. Oversease：US GOLFTEC * is generally as planned Golf Lessons：US GOLFTEC * is generally as planned. Increased number of domestic TEC centers. 25,602（YOY+ 40％） 25,602 （YOY +40％）

（million yen） ■Others 5,612 ■Oversease YOY +14％ ■Golf Lessons Golf YOY ％ ※□ Includes U.S. GOLFTEC sales prior to Lessons +16 acquisition ※□ Includes U>S> GOLFTEC sales prior to acquisition 19,990 18,230 ■Domestic ■Golf Course Booking YOY +10％ YOY +10％

■Sales of Golf Equipment YOY +9％

2018 Q3 2019 Q3 2018 Q3 2019 Q3

*U.S. GOLFTEC：Abbreviation for GolfTEC Enterprises LLC, a subsidiary in which the Company holds 60% equity.

SG&A expenses Remained almost as planned Domestic：Use marketing expenses efficiently Oversease：Implemented marketing according to the four major tournaments(April~July) ※The PL consolidation of GDOS*, a subsidiary, began from the third quarter, and U.S. GOLFTEC began from the fourth quarter of the previous year, respectively. 9,555 Sales ratio 37％

YOY ■Oversease SG&A Oversease ・Amortization of ＋2,500 □GOLFTEC SG&A SG&A expense before 2,788 goodwill and （million yen） Oversease acquisition intangible assets SG&A Ratio to net sales 50% + 325

■Other domestic SG&A -196

Domestic SG&A Domestic ＋87 6,767 SG&A ■Domestic marketing expense Ration to net sales 6,221 34% Ratio to net sales 34% ＋261 ■Domestic personnel expenses

2018 Q3 2019 Q3

*GDOS： Abbreviation for GDO Sports, Inc., a wholly-owned subsidiary of the Company

EBITDA（=Operating profit + Amortization of goodwill + Depreciation + Operating Profit Long-term prepaid expenses） Domestic：Growth in sales by use SG&A expenses Domestic：Growth in sales by use SG&A expenses efficiently. efficiently. Oversease：Amortization of goodwill and intangible assets Oversease：Started investing in new Oversease associated with the consolidated subsidiaries for business from 2018. 325million yen. U.S. GOLFTEC sales growth of 2019 contributed. 492 （million yen） YOY +38million yen 1,577 454 YOY+91％ 935 ■ Domestic EBITDA 826 1,316 ■Domestic YOY＋20％ 742 Operating Profit 1,094 YOY +26％

-288 △443 ■Oversease 260 ■Oversease EBITDA Operating Profit YOY ＋528million yen YOY -155million yen

-267

2018 Q3 2019 Q3 2018 Q3 2019 Q3

*U.S. GOLFTEC is not included in the Q3 of FY2018 *U.S. GOLFTEC is not included in the Q3 of FY2018

Total assets increased associated with the expansion of operations Deferred Revenue：Deferred revenue increased attributable to strong sales at U.S. GOLFTEC. Long-Term Debt：Repayment as planned.

Total Assets 18,236 Total Assets 18,441

Current Current Liabilities Current Current Assets 10,128 Assets Liabilities 9,561 9,650 11,114 ------Cash -288million yen ------Deferred ------

Merchandise Revenue Merchandise Deferred 4,235 2,239 4,477 Revenue Deferred Revenue ＋825million yen 3,065 Long-term Debt -667million yen

Non- Fixed Liabilities Non- current 1,900 Current Fixed Liabilities 1,218 Assets Assets 8,674 Total Net 8,791 Total Net ------Assets ------Goodwill Assets 6,207 Goodwill 3,230 3,049 6,108

End of December 2018 End of September 2019

Proceeding according to plan ・Growth in putters and balls due to rush demand before consumption tax increase. ・In the market, before the new model release of popular Number of Customers Unit Purchase Price clubs, the price reduction of the old model started.

New Used Balls Apparel Accessories Golf Clubs Golf Clubs Year on Year Comparison of Orders （Golf Clubs）（Golf Apparel） 160% 160% Release ＧＤＯ Warm Period of The… winter 140% new model 140%

120% 120%

100% 100%

80% 80%

60% 60% Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. Jan. Mar. May Jul. Sep. Nov. Jan. Mar. May Jul. Sep. 2018 2019 2018 2019

*Market…Golf equipment market (golf clubs, balls and accessories). “Year-on-year comparison of the market size estimated based on actual sales of real stores of major golf equipment dealers nationwide” calculated by GfK Lifestyle Tracking Japan KK Copyright(c) Golf Digest Online Inc. All Rights Reserved 11 【Domestic】Golf Course Booking：KPI Analysis

The number of golfers booked on GDO increased ・The impact of Typhoon No. 15 in the Kanto region at the end of September was limited. Blessed with good weather in Japan, the cancellation rate declined. （Since October, the impact of Typhoon No. 19 has had a widespread impact, leading to a decrease in customers and an increase in cancellations.）・Special feature planning, score management application and e-mail magazine attracted customers.

Change in Golfers Booked on GDO (players)（YOY）

Number of Customers

Unit Fee Price

Fall in Cancellation ー GDO（the number of golf course players who played golf by booking through the Company and Jalan Golf）ー Market（the number of golf course players in eight prefectures published by the Ministry of Economy, Trade and Industry） 2018 2019 ※Market: Source: Ministry of Economy, Trade and Industry “Survey of Selected Service Industries.” Comparison of total golf course players of eight prefectures (Hokkaido, Miyagi, Tokyo, Aichi, Osaka, Hiroshima, Kagawa and Fukuoka) . Copyright(c) Golf Digest Online Inc. All Rights Reserved 12 【Oversease】Overview of Business Performance of U.S. GOLFTEC

Performance remained stronger than planned ・Sales increased 15% year on year because, sales of lesson tickets and custom fitted clubs remained firm. ・Embarked on new store openings with the promotion of the acquired franchised stores. ・Cash EBITDA* remained higher than planned and contributed to EBITDA after September.

U.S. GOLFTEC non-consolidated results

51 ■Net Sales （$’s in millions） YOY+15％ 44

■Cash EBITDA 9.1 YOY+302％

3.0 3.9 ■EBITDA 0.8 YOY+454％

2018 Q3 2019 Q3

※Cash EBITDA：It is EBITDA calculated at the time of cash acquisition, and it is a measure before accounting standard adjustment

・New store openings and the acquisition of franchised stores made steady progress. End of September 2018： 197 centers Selected for “America ’s Fastest Growing Companies” End of September 2019： 208 centers 9th award since 2007 -Corporate Center ：113centers （New Store＋7 centers, Directly manage FC stores＋８centers） -FC： 95 centers ・Putter Lesson (-４centers（direct management -８店, new＋４centers）「TECPUTT™」Start

・Sales of custom fitted clubs grew sharply after FY2017

STARTING SPEED AIM TEST DIRECTION CONTROL

Expansion of the customer base

(Reach, region, the cultivation of golfers, the creation of opportunities to come in contact with golf)

Deepening of customer relationships

(Data, IoT, CRM, Technology)

TOPTRACER RANGE Introduced in domestic driving range 4 centers in Kanto, 7centers in Kansai Areas

・A new initiative aimed at stimulating demand for potential golfers and average golfers. ・proposed as a new revenue source centered on IT infrastructure at golf driving range facilities. Aim to establish early business as GDO’s new business. ・Realized through business alliance with TOPTRACER, a group company of TOPGOLF GROUP, a comprehensive golf entertainment company in the United States.

TOPTRACER RANGE is a・・・ Player can check the replay of all shots with a monitor installed at a setup base. It provides data and entertainment which could not be experienced at a driving range before, such as virtual round, near pin, driving contest, simple trajectory measurement, analysis of trajectory and carry by the club number, and point game.

Score Management Application “GDO Score” Added GPS course map / navigation function 「GDO Score」 Total number of downloads ・Aim to improve customer ～ Register 3 million scores a year～ satisfaction of existing users and acquire new users. ・For the time being, it will be provided free of charge. In the future, it will be provided as a paid service.

Holding of Snow Golf MUSIC＆GOLF 「MIYA ROCK」×GDO ・The event, launched in Hokkaido in 2016, extends the host area to Aomori, and the event enters its fourth year.

・In Bibai, a special heavy snowfall area, we had to close in the winter to the thaw. Such a golf course has become available for business year-round by this initiative.

・By proposing various ways of enjoying golf in cooperation with local governments, we contribute to regional revitalization and improve GDO awareness in the field. ・Participated in “MIYKO ISLAND ROCK FESTIVAL” a famous rock festival held in Miyakojima, focusing on artists from Okinawa.

Conducted “Beach Golf" as hitting the special golf ball towards to a target floating in the sea. Snow Golf is a・・・ To improve the image of golf with young Ｗinter sport concept with origins in France, be held at golf courses and people by spreading on SNS. The new ski resorts, which are closed by snowfall in winter. It is held regularly in Greenland, and a world convention is also held. strategy to create a new golfer. GDO is the first to be held in Japan using an actual golf course.

The domestic golf market is shrinking, but the Internet market is expanding. However, competition is intensifying. The golf market in the United States continues to boom, mainly among new golfers. In addition, the retail market of golf equipment is showing signs that experience sales will become prevalent.

Future: GDO’s Future: GDO’s Past trends Past trends predictions predictions Declining Declining Rate of birthrate and birthrate and Population Upward trend increase will aging aging fall gradually population population Increasing Continued Upward trend Downward golfers Golf population downward for the time trend enjoying golf trend being off course

Downward Increase for On-course

Number of rounds trend ceasing Remain flat the past two golf rounds to fall years in a row may flat

Upward trend Ratio of purchasers Golf equipment EC Expected Upward trend for the time being through EC to increase market From PC to Smartphone 35%

Golf course booking Upward trend Upward trend for the time being Unknown Unknown via the Internet From PC to Smartphone

 The period is set at 5 years. A period of about 5 years is necessary to develop strategies from a medium- to long-term perspective and achieve certain results to strengthen our long-term presence in the global market.

 Mid-term management plan based on the mid-term strategic policy is being prepared. It takes time to formulate a specific plan, as the GDO Group has reached a major threshold amid the situation where the business environment is changing every day in Japan and overseas.

 To continue to grow in the domestic market environment, certain investments are necessary. While the competitive environment is intensifying due to sluggish growth among the population and golfer population in Japan and new entries in the Internet environment, there is room for growth. To continue to grow, certain investments are necessary.

Domestic businesses Achieve further growth in sales and profitability in a difficult environment.

New Overseas businesses businesses

Build a new earnings model. Achieve growth, taking advantage of economies of scale.

Expansion of the customer base

(Reach, region, the cultivation of golfers, the creation of opportunities to come in contact with golf)

Deepening of customer relationships

(Data, IoT, CRM, Technology)

America's golf market is the world's largest

USA 1st Japan 2nd

Golfers : 23.8 million people U.K. Golfers : 7.8 million people Golf courses :14,800 Golf courses : 2,270 Golfers : 3.9 million people Rounds : million rounds Rounds : 90 million rounds 475 Golf courses : 2,800 Golf equipment market : $2,078 million Golf equipment market : $3,585 million Golf equipment market : $440 million

China Korea Canada

Golfers : 0.6 million yen people Golfers : 2.9 million yen people Golfers : 5.5 million yen people Golf courses : 380 Golf courses :450 Golf courses : 2,300 Golf equipment market : $110 million Golf equipment market : $562 million Golf equipment market : $387 million

*Source: Yano Research Institute “2019 World Golf Market Report”

Booking on GDO is possible at around 90% of golf courses in Japan

Number of golf courses Changes in the number of golf courses in Japan around the world and the number of golf courses bookable on GDO Number of Golf course 1st USA 14,640courses

2nd Canada 2,265

3rd Japan 2,227

4th U.K 1,936 Over 2,000

5th Australia 1,532

*Prepared by GDO based on “Golf around the world 2017” *Source: “Changes in the Number of Golf Courses and Users based on Taxation Status of (Royal and Ancient Golf Club of Saint Andrews (R&A)). Golf Facility Taxes (November 2017)”(Nihon Gorufujo Keieisha Kyokai)

The total number of golf course users remains flat.

( million people)

※Source: “Changes in the Number of Golf Courses and Users based on Taxation Status of Golf Facility Taxes (November 2017)” (Nihon Gorufujo Keieisha Kyokai) 27 Copyright(c) Golf Digest Online Inc. All Rights Reserved Domestic Golf Market／Changes in playing cost and number of annual plays

Golf becomes more familiar due to lower green fees

Number of plays per golfer Play fees （times）（yen） 11,805 10,990

9,953 9,906 9,848 9,858 9,839 9,952 20.0 10,000

17.8 15.0 15.2 14.3 14.4 14.2 5,000 13.5 13.5 12.8

10.0

0 5.0 2003 2008 2013 2014 2015 2016 2017 2018

Green fees per play Numbers of plays

※*Source: Green fees are prepared by GDO based on net sales and total users in “Survey of Selected Service Industries” (Golf Courses) of the Ministry of Economy, Trade and Industry. Number of plays is based on “Leisure White Paper” (Japan Productivity Center). 28 Copyright(c) Golf Digest Online Inc. All Rights Reserved Domestic Golf Market／Golf Retail

The golf equipment market is shrinking, but sales of GDO are increasing.

Changes in the golf equipment market in Japan and net Sales ranking of golf equipment sales of golf equipment of GDO retailers in Japan

Golf equipment The golf equipment market has an Net sales of golf market in Japan st Company A equipment of GDO 1 78.1 billion yen (billion yen) overwhelming size comprising approx. 20% (sports volume retailer) of the sports equipment market (billion yen) 500 40 439.0 nd Company B 61.1 billion yen 2 (sports volume retailer)

400 333.0 339.0 338.0 343.0 rd Company C 21.1 billion yen 331.0 30 3 (golf volume retailer)

300 4th GDO 16.3 billion yen 20 200 th Company D 14.4 billion yen 5 (golf volume retailer)

10 100 Percentage of golf equipment market comprised of EC market

0 0 12.7％（2018） 2003 2014 2015 2016 2017 2018 Net sales of GDO Retail Business GDO is overwhelming No. 1 Golf equipment market

The golf population is on an upward trend, including “those who are interested in golf.” The number of rounds increased year on year in the most recent two years, while it fluctuates strongly. Number of rounds ( million people) Golf population 80.0

500 469 458 466 456 64.4 61.5 434 60.0 57.0 52.7 53.3 400 23.8 24.1 24.7 300 40.0 25.3 24.7 12.8 11.9 9.6 200 7.2 8.0 20.0 100 25.5 27.8 20.2 20.6 22.7

0.0 0 2012 2013 2014 2015 2016 2014 2015 2016 2017 2018 Interested in golf Very interested in golf Golfer

*Source: NGF(National Golf Foundation)Member Resources

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

President and CEO Nobuya Ishizaka

Date of May 1, 2000 Establishment Listed on the Tokyo Stock Exchange Mothers Market on April 1, 2004 Listed on the Second Section of the Tokyo Stock Exchange on May 1, 2015 Listed on the First Section of the Tokyo Stock Exchange on September 7, 2015 (Securities Code: 3319)

Head Office 2-10-2 Higashi-Gotanda, Shinagawa-ku, Tokyo

Capital 1,458 million yen

Employees （Consolidated) 1,129 *Including part-time employees

GDO Group GDO GolfTEC Co., Ltd （100％） KIDS GOLF Inc. （100％） GDO Sports, Inc （100％） GolfTEC Enterprises LLC （60％） Acquired a 60% units on July 2, 2018

(As of the end of June 2019)

GDO Events Total Golf platform Golf media

Golf Golf lessons course Database Custom club booking fitting

Sales of Golf equipment Other offline channels Stores

Golfers in the World: Approx. 98 million people Online × Offline

（Domestic）（Overseas）

GOLFTEC by GDO Golf Garage GOLFTEC Online channel: Monthly average number of visitors* America, Canada, 5.28 million Mexico, Number of golfers Hong Kong, booked on GDO Singapore Number of golfers Competitions Thailand, booked on GDO /events hosted

Offline channel: Monthly average number of users Total app downloads Number of likes on Facebook Domestic and Overseas 2.41 million 1.35 million 650,000

(Results in FY2018) *Sum of monthly average numbers of unique users of PCs and mobile devices Enjoy golf

Approx.60% of golfers in Japan are GDO Club Members

( million people)

As of September 2019 4.0 million people

Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep 2011 2012 2013 2014 2015 2016 2017 2018 2019

GDO users：Characterized by business influence and high purchasing power as an individual

■Gender ratio ■Age group Female 14％ Male 86％

86％ of users are males Average age 50, 40s～50s 50%

■Annual Income ■Average golf score

-Intermediate level with an average score in the 90 range 31％ -Many golfers aim to achieve the 80 range on a stable

■Occupation

-Company executives + Management level employees+ Self employed 30％ 10 Million or more 24%, 8 million or more 40% -Many users have business influence

(As of the end of December 2018)

 One of the world’s largest with the most extensive selection of goods Strengths of  Differentiated information power GDO  Provision of high quality services

 Number of items dealt with GDO Golf Shop PC web site New items：Approx. 100,000 Used items：Approx. 40,000 Number of brands dealt with：Approx. 390 brands in Japan Smartphone and overseas Web sites

 Major services application Online sales of golf equipment Purchase/sales of used golf equipment (Online/offline: 5 Golf Garage stores in Kanto)

 Stores also opened on the following websites Yahoo! Shopping, Yahoo! Auction, Amazon.co.jp, Rakuten Ichiba, LOHACO, Wowma! Golf Garage Stores

 One of the largest and most extensive information volumes in Japan Strengths of  GDO Commercialization power taking potential demand in advance  Provision of high quality services

GDO Golf Course Bookings PC web site  Number of partner golf course 2,000 course or more（japan and Overseas） Smartphone （Overseas：Hawaii, Guam, American mainland, Web site Singapore, Thailand, Malaysia, Australia, etc.） Application  Major services ・Golf course booking ・GDO Premium Club ・Hosting of competitions and events ・Sales of web booking system for golf courses GDO Premium Club Hosting of competitions and events

 Overwhelming information volume and high-quality content Strengths of  Distinctiveness and swiftness of news GDO  Response to diverse devices

GDO golf news PC web site  Viewer rate in the golf category Smartphone No.1 in Japan Web site Applications

 Major services Golf media（News, BRUDER, Club information） Internet advertising/ Marketing service Mobile services（Free/ pay per use service）

BRUDER GDO Credit card GDO credit card

 Differentiated lesson methods Strengths of  Provision of high quality services GOLFTEC  Realization of experience-based store

 U.S. GOLFTEC The USA’s leading golf lesson chains GOLFTEC lesson studio 5 countries（USA, Canada, Japan, China(Including Hong Kong), Singapore） 208 centers（Direct centers：113、FC：95） Center in Japan 『GOLFTEC by GDO』 12 centers Roppongi, Ebisu, Ginza ANNEX, Otemachi, Kanda. Ikebukuro, Shinjuku, Haneda airport, Yokohama Sakuragi-cho, Nagoya, Osaka Umeda, Club fitting services Fukuoka Tenjin （9 centers in Kanto + 1 center in Chubu＋1 center in Kansai ＋1 center in Kyushu）

 Major services Swing Evaluation Lesson approach that visualized improvement One on One golf lessons Club Fitting + Sales of custom golf club U.S. GOLFTEC Head office：Denver, Colorado, USA Established：1995 Remarks：Has a share of 25% or more of the golf lesson market in USA.

■ Consolidated Net Sales ■ Consolidated Gross Profit ＋24％（ million yen ）

＋12％＋7％（YOY） +13％（ million yen）

■ SG&A ■ Consolidated Operating Profit （ million yen）（ million yen ）

■ EBITDA ■ Consolidated ordinary income

（ million yen）（ million yen）

■ Profit Attributable to Owners of Parent ■ Net Income Per Share

（ million yen ）（yen）