Shimano Group saw operating earnings in the fourth quarter slide 19.6 percent to ¥16.1 billion while net sales dropped 11.4 percent to ¥81.3 billion.

Net income improved 23.2 percent to ¥14.1 billion. The fourth-quarter figures were calculated by subtracting nine-month figures from full-year results.

In the Bicycle Components segment, sales in the quarter were off 12.8 percent to ¥66.5 billion while operating profits were down 21.3 percent to ¥14.6 billion. In the Fishing Tackle segment, sales eased 4.8 percent to ¥14.7 million, but operating profits improved 5 percent to ¥1.47 billion.

For the full year, 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 that the European economies saw a “moderate recovery” despite challenges following the referendum result in favor of Brexit. Shimano added, “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.”

In the Bicycle Components segment, net sales for the year decreased 17.4 percent from the previous year to ¥259.45 billion, and operating income decreased 27.5 percent to ¥57.87 billion.

Shimano said that 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 Europe, bad weather in early spring led to high distributor inventories, but more seasonal weather led to “brisk” sales after July and inventories adjusted. In China, the economic slowdown and bad weather led to another sales decline. Sales also declined in Japan and Southeast Asia, and also continued to be soft in South America because of the economic slowdown and weak currencies.

In the Fishing Tackle segment, sales in the year slipped 1.7 percent from the previous year to ¥63.14 billion, and operating income increased 27.4 percent to ¥6.84 million. Strength in the Japanese market and slightly higher gains in Australia offset declines in North America and Europe.

By region across both segments for the year, sales declined in North America by 15.2 percent to ¥35.2 million, were down 15 percent in Europe to ¥123 billion, dropped 18.6 percent to ¥113.5 billion in Asia and fell 21.5 percent in Other regions to ¥14.3 billion. The one region seeing gains was its home market in Japan, which added 6.1 percent to ¥37 billion.

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