Shimano saw sales in its Bicycle Components segment return to double-digit growth in the fourth quarter while showing modest gains in its Fishing Tackle segment.
In the quarter, Shimano’s sales rose 10.5 percent in the fourth quarter to ¥89.8 billion from ¥81.3 billion.
Operating profits advanced 10.8 percent to ¥17.8 billion from ¥16.05 billion. Net income dropped 26.8 percent to ¥10.3 billion from ¥14.1 billion. Results were derived by subtracting nine-month figures from full-year results.
In the Bicycle Components segment, revenues improved 12.1 percent in the quarter to ¥74.6 billion from ¥66.5 billion. Operating income in the segment improved 11.4 percent to ¥16.3 billion from ¥14.6 billion.
In the Fishing Tackle segment, sales improved 3.1 percent to ¥15.2 billion from ¥14.7 billion. Operating earnings rose 4.6 percent to ¥1.54 billion from ¥1.47 billion.
For the year, Shimano’s sales increased 4.0 percent to ¥335.8 billion. Operating income decreased 0.3 percent to ¥64.35 billion Gross margins increased slightly to 40.9 percent from 40.7 percent a year ago. SG&A expenses increased to 21.8 percent from 20.7 percent.
Net income fell 24.6 percent in the year to ¥38.4 billion. The latest period was impacted by $11.0 million in foreign exchange losses against and no impact from foreign exchange in the same period a year ago.
In the Bicycle Components segment, sales in the year increased 4.1 percent in the year to ¥270.2 billion while operating income in the year dipped 0.8 percent to ¥57.4 billion.
In their report, Shimano said about the Bicycle Components segment, “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.”
In the Fishing Tackle segment, net sales for the year increased 3.3 percent to ¥65.2 billion, and operating income nudged up 2.5 percent to ¥7.01 billion.
Shimano said about the Fishing Tackle segment, “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. Overseas, 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.”
For the current year, Shimano said it expects sales to reach ¥350 billion, up 4.2 percent. Operating income is expected to climb 4.1 percent to ¥67 billion, and net income to be ¥47.2 billion, ahead 22.8 percent.
Photo courtesy Shimano