Shimano reported net sales in 2017 increased 4.0 percent from the previous year to ¥335.8 billion.
Operating income decreased 0.3 percent to ¥64.35 billion, ordinary income decreased 20.4 percent to ¥55.75 billion and net income attributable to owners of parent decreased 24.6 percent to ¥38.4 billion.
Shimano wrote in a statement, “During fiscal year 2017, the European economies were on a recovery trajectory as companies’ investment sentiment picked up in light of the increase in exports, in addition to continued improvement in the labor market and recovery of personal consumption. In the U.S., despite temporary negative effects on personal consumption in the aftermath of two major hurricanes, moderate economic expansion continued, driven by the buoyant labor market and improved consumer sentiment.
“In Japan, while the robust labor market supported personal consumption and the economy followed a moderate recovery track, the recovery lacked vigor. In these circumstances, inspired by our mission—“To promote health and happiness through the enjoyment of nature and the world around us”—the Shimano Group sought to attract consumers with a stream of captivating products designed to enrich the experience of cyclists and anglers around the world, and moreover attuned to the contemporary emphasis on well-being and the environment.”
Reportable Segment Overview
Bicycle Components
Net sales from this segment increased 4.1 percent from the previous year to ¥270.2 billion, and operating income decreased 0.8 percent to ¥57.4 billion.
Shimano said, “In Europe, while retail sales of completed bicycles were somewhat sluggish at the beginning of the year, sales picked up from the middle of the year and were eventually at the same level as the previous year. Accordingly, distributor inventories of bicycles in Europe remained at an appropriate level.
In North America, although retail sales of completed bicycles lacked vigor and were approximately the same as the previous year’s level, distributor inventories were somewhat low.”
In China, retail sales of completed bicycles were below the previous year’s level as retail sales of low-end bicycles were lackluster, although distributor inventories remained at an appropriate level.”
With regard to the other emerging markets, whereas retail sales of completed bicycles in Southeast Asia remained at the same level as the previous year, retail sales of completed bicycles in South America were beginning to recover, particularly in Brazil and Argentina. Distributor inventories were at an appropriate level both in Southeast Asia and South America. In the Japanese market, retail sales of both sports bicycles and community bicycles were lackluster, but distributor inventories remained at an appropriate level.”
“Under these market conditions, sales of the flagship road bike component DURA-ACE DI2 (electronic shifting system) and the SHIMANO STEPS E8000 drive unit for E-MTB, for which shipments began at the end of 2016, were robust. Sales of both the DEORE mountain bike components released in May 2017 and the ULTEGRA road bike components released in June 2017 remained robust, and the additional ULTEGRA DI2 (electronic shifting system) and disc brakes released in August 2017 were also well-received in the market.”
Fishing Tackle
Net sales from this segment increased 3.3 percent from the previous year to ¥65.2 billion, and operating income increased 2.5 percent to ¥7.01 billion.
Shimano said, “The Japanese market was robust, benefitting from the relatively stable weather throughout the year.
Overseas, the North American market was severely affected by two major hurricanes directly hitting its two major markets, Texas and Florida. In Europe, distributor inventories increased, as retail sales fell into a slump in the UK, which led the market in the first half of the year, as well as in the major markets of Germany and Italy. In Australia, despite a delay in the start of the fishing season and the sluggish performance of major chain stores, sales stabilized in the second half of the year and the market was robust. On the other hand, in Asia, sales in China and South Korea continued to be robust as per the previous year, and the recovery trend of the Southeast Asian market became evident.”
“Under these market conditions, in Japan, lure-related products and other new products achieved robust sales. As a result, sales in Japan exceeded the previous year’s level. Although sales in North America lacked vigor because of the market conditions, overseas sales on the whole exceeded the previous year’s level thanks to buoyant sales in Asia.”
Others
Net sales from this segment decreased 6.5 percent from the previous year to ¥373 million and an operating loss of ¥72 million was recorded, following an operating loss of ¥170 million for the previous year.
Outlook
For the current year, sales are expected to reach ¥350 billion, up 4.2 percent. Operating income is expected to climb 4.1 percent to ¥67 billion. Ordinary income is expected to reach ¥67 billion, 20.2 percent, and net income to be ¥47.2 billion, ahead 22.8 percent.
