Shimano reported sales in 2016 slid 14.7 percent to ¥323 billion.
Operating profits were down 24.1 percent to ¥64.5 billion, while net income gave back 33.1 percent to ¥50.96 billion.
In its comments on the performance, Shimano stated, “During fiscal year 2016, the European economies were on a moderate recovery trajectory as personal consumption remained brisk and exports started to recover, despite growing pessimism following the referendum result in favor of Brexit. In the U.S., a moderate economic recovery continued owing to robust personal consumption supported by steadily improving labor market. On the other hand, the Japanese economy lacked vigor with the negative effect of currency situation and sluggish growth of personal consumption.”
The Japanese firm added, “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.”
In the Bicycle Components segment, net sales decreased 17.4 percent from the previous year to ¥259.45 billion, and operating income decreased 27.5 percent to ¥57.87 billion.
Shimano stated, “In Europe, bad weather in early spring greatly undermined retail sales of completed bicycles, resulting in a continuing high level of distributor inventories. However, thanks to good weather from July onward, sales became brisk. As a result, distributor inventories were adjusted to an appropriate level. In North America, retail sales of completed bicycles were slightly less than in the previous year. However, distributor inventories of bicycles, which had been high since the beginning of 2016, were adjusted to a lower level than in the previous year. In China, lackluster retail sales of sports bicycles persisted from the previous year owing to the economic slowdown and bad weather, and were below the previous year’s level. On the other hand, distributor inventories, which remained at a high level, started to stabilize. As regards other major emerging markets, retail sales of sports bicycles in Southeast Asia, which had been robust, were at a level lower than the previous year. Sales in South America continued to be soft because of the economic slowdown and weak currencies. In the Japanese market, retail sales of sports bicycles, which had been robust until the previous year, were lower than the previous year’s level and distributor inventories were somewhat high. Retail sales of community bicycles remained weak, continuing from the previous year.”
In the Fishing Tackle segment, sales slipped 1.7 percent from the previous year to ¥63.14 billion yen, and operating income increased 27.4 percent to ¥6,84 million yen.
Shimano said of the fishing segment, “The Japanese market remained buoyant owing to relatively stable weather from the beginning of the year to Obon (mid-August). Despite the temporary negative impacts of the Kumamoto earthquakes and typhoons on the fishing environment and the consumption trend, sales in Japan exceeded the level of the previous year. This increase reflected the high evaluation in the market enjoyed by Shimano’s 2017 model products, some of which were introduced earlier than the original schedule. Overseas, sales in Asia exceeded the previous year’s level partly because of an increase in orders received mainly in East Asia market that reflected the trend toward a weaker yen, despite ongoing inventory adjustments at retailers. Sales in Australia were slightly higher than the previous year’s level, but sales in North America and Europe were below the previous year’s level partly due to the impact of the sluggish market conditions. “
In its Others segment, net sales increased 2.4 percent from the previous year to ¥399 million, while the segment showed an operating loss of ¥170 million following an operating loss of ¥135 million for the previous year.
For 2017, Shimano said it expects sales to increase 2.2 percent to ¥330 billion. Operating income is expected to grow 2.3 percent to ¥66 billion while net income is expected to decline 8.8 percent to ¥46.5 billion.
Image courtesy Shimano
