Shimano, Inc. saw sales and margins slip in 2005 as operational problems plagued its bicycle components division causing the company to miss delivery on several of its higher end products. Spurred by higher demand for high end road-bikes, manufacturers ramped up their manufacturing during the year, but Shimano was unable to fill the need for components. The company is currently opening a new facility in China to help prevent this in the future.
Sales slipped 0.8% during 2005 to ¥167.8 billion ($1.53 bn) compared to ¥169.2 billion ($1.57 bn) last year. Shimano had originally anticipated sales to increase roughly 2% to ¥172 billion during 2005. Bicycle component sales fell 3.1% to ¥124.9 billion ($1.14 billion). This was partially offset by a 7.4% sales increase in fishing products to ¥39.8 billion ($362 mm).
Europe is still Shimanos largest market, with 41% of overall sales. This is up two full percentage points from last year. U.S. sales of Shimano products were roughly $261 million, a 2% increase compared to $257 million last year.
As a result of the overall sales decline, Shimanos operating income fell 14% to ¥25.3 billion ($230 mm) or 15.1% of sales. This compares to ¥29.4 billion ($271.9 mm) or 17.4% of sales last year. Net income also fell 15.7% to ¥16.4 billion ($148.9 mm) compared to ¥19.4 billion ($179.6 mm) last year.
