Sports Business

SUMITOMO RUBBER INDUSTRIES TOP > Sustainability > Sustainability Management Messages > Sports Business

In the Golf Business, We are
Focused on Growing Our Presence
in North America, the World’s
Biggest Market.
Step by Step, We are Making
Progress Toward Becoming a Truly
Global Player.

Keiji Moriyama

Executive Officer, General Manager
of the Sports Business HQ

In Fiscal 2023, both Revenues and Profits Increased, and the Business Profit Ratio Reached 10%

In fiscal 2023, the Sports Business saw higher revenues and profits for the third straight year, and the business profit ratio was around 10%. The overseas sales ratio hit 67%, just shy of the 70% target, bolstering our confidence in ourselves as the Sports Business Headquarters.
As part of our mid-term plan, which runs until 2027, in the golf business we are aiming to become one of the top-three global manufacturers of clubs and balls, while in the tennis business, we are striving to expand the business by building on the foundation of trust we have earned as the holder of one of the top-three shares of the tennis-ball market, as we endeavor to become a truly global player.
Going forward, we will not rest on our current achievements, but instead will leverage our strengths in product development and production technology to create even more competitive products.
Through marketing activities that reflect the "5-Gen Methodology" that I value, i.e., Genba (on-site), Genbutsu (actual products), Genjitsu (reality), Genri (principles), and Gensoku (rules), we intend to provide products that meet the needs of markets around the world.

Sales revenue

Business profit^* (ratio)

* Business profit = Sales revenue – (Cost of sales + Selling, general and administrative expenses)

North American golf business: Sales revenue trend^*

Note: Sales are expressed as an index starting at 100 in 2015

Further Strengthening the Golf Business in North America

In fiscal 2023, sales in overseas markets, particularly in North America and South Korea, were strong. Notably, SRIXON saw significant growth, and Cleveland Golf improved its performance with its formidable brand power, having the second biggest market share globally for wedges. In addition, XXIO, which boasts overwhelming brand strength in Japan and South Korea, continued to perform well. These three brands have each been leveraging their unique characteristics to grow sales, and constitute the strengths of the golf business.
Historically, our strategy has been for profits earned from XXIO and Cleveland Golf to be reinvested into the growth of SRIXON, which we view as a future source of profits. Our dream has been to see top professional players compete and win in the most prestigious major tournaments with SRIXON clubs and balls, and since 2019, that dream has been realized multiple times. Among the successes, the victory of Hideki Matsuyama, with whom we have a golf equipment contract, in the 2021 Masters Tournament has been a big confidence booster.
His win elevated the brand value of SRIXON as golf gear used by top professionals, leading to a steady improvement in performance in North America. Although we anticipate a temporary decrease in profits in fiscal 2024 due to increased competition amid market contraction and higher expenses from marketing and DX investments aimed at future business development, we are strengthening our workforce and expanding sales channels in North America with an eye to further growth.
Additionally, we will leverage our product development capabilities, which could be described as the core competence in the Sports Business, to further enhance our competitive edge. In Japan, we utilize our Golf Science Center, which boasts a wealth of rubber material technology and simulation technology cultivated through tire research, to develop leading products like XXIO. Meanwhile, in the US, the marketing and R&D teams focus on product planning that meets market needs and tour professionals' demands. Moving forward, we will continue to develop differentiated products through our dual-polar development structure in Japan and the US.

13th-generation XXIO club

Tennis Business Leverages Trust in Balls to Accelerate Sales of Rackets

In the tennis business, we maintain a top-three global market share for balls and are focusing on expanding sales in key markets such as Europe, Asia, North America, and Japan.
We believe that keeping our position as the number-one supplier of balls on the ATP (Association of Tennis Professionals) Tour and enjoying continued support from the world's top professional players is important from a marketing perspective, and have thus endeavored to support the tour and approach leading players. One of our achievements in fiscal 2023 was the expansion of our presence all the way from Europe to Asia.
In anticipation of future growth in the racket business, we have been providing assistance to promising young players through contracts with prominent academies. By scouting junior players who have the potential to break into the world’s top 10 rankings, we aim to pave the way for future growth.
In product development, we are making full use of the Tennis Science Center, which opened last year, to comprehensively measure, analyze, and evaluate our products. By further honing our strengths in material development and simulation technology, we aim to create products that are highly regarded by leading professional players worldwide and will contribute to expanding our market share in rackets.

DUNLOP ATP tennis ball

Toward Further Growth for the Sports Business

Regarding the wellness business, which is the third pillar of the Sports Business, market conditions have been recovering since the downgrading of COVID-19 to Category 5 in May 2023, but they have not yet returned to the pre-pandemic conditions of 2019. We are endeavoring to get the business contributing to corporate profits by growing our customer base at a faster pace than the recovery in market conditions and through efficient management.
And in terms of sustainability initiatives, we have developed the SRIXON Z-STAR+e golf ball (not for sale), which uses plant-based biomass materials to achieve the same performance as current models. We unveiled it at the Dunlop Phoenix Tournament in November. As for tennis balls, we have actively worked to reduce environmental impact by replacing container lids and plastic labels with paper ones and using recycled PET materials for the containers.
Since fiscal 2020, when we were heavily impacted by the COVID-19 pandemic, we have achieved a V-shaped recovery, which began in fiscal 2021. This rebound has seen business profit doubling compared to pre-pandemic levels. The Sports Business has weathered various challenges over the years, including earthquakes, and has built up resilience against crises. It is said that no management strategy is superior to a company's culture, and I believe the enthusiasm of our employees contributes to the creation of culture capable of resisting headwinds. Moving forward, our organizations will work together and continue to grow by accurately responding to changing times.
Furthermore, I believe it is essential to not only sell products, but also to propose ways of using them and ways of enjoying sports. I hope you will continue to expect great things from the Sports Business.