Shimano reported net income increased 22.5 percent in 2020 as sales grew 4.1 percent. The Japanese-based sporting goods company said the year benefited from “interest in bicycles and fishing that can avoid closed, crowded and close-contact environment boosted demand.”

In the year, net sales increased 4.1 percent from the previous year to  ¥378,040 million. Operating income increased 21.6 percent to ¥82,701 million, ordinary income increased 17.3 percent to  ¥81,471 million, and net income attributable to owners of the parent increased 22.5 percent to  ¥63,472 million.

Shimano said in a statement, “During fiscal year 2020, due to the global spread of the novel coronavirus (COVID-19), economic activities were severely constrained. In Europe, in each country, lockdown and other measures were implemented in early spring as a measure to prevent the spread of infections. Although such measures were relaxed before the summer vacation season, activity restrictions were tightened once again owing to an increase in the number of people infected with COVID-19, and consumer sentiment remained weak due to concerns over the outlook of the economy as there was no clear indication of when the pandemic would be brought under control. In the U.S., employment conditions deteriorated rapidly in response to the spread of COVID-19 in spring. While there were temporary signs of economic indicators that suggested recovery after restrictions on outings were relaxed, a full-scale recovery trend was not realized, and a trend of cutting back on consumption spread due to continued uncertainty about the future outlook.

“In Japan, the economy deteriorated due to the government’s request that people refrain from going out under the declaration of a state of emergency in April. After the declaration was lifted, while implementing measures to prevent the spread of infections, economic measures such as the Go-To campaign were introduced with a view to underpinning economic activities. However, the spread of infections has not been contained, and the pace of recovery of personal consumption remained slow. In spite of such a business climate, interest in bicycles and fishing that can avoid closed, crowded and close-contact environment boosted demand.”

Bicycle Components Segment
In the Bicycle Components segment, net sales increased 2.7 percent from the previous year to ¥297,777 million, and operating income increased 18.4 percent to ¥68,494 million.

Shimano said, “Demand for bicycles had declined sharply in early spring due to the spread of COVID-19 but then cycling gained attention as an easy form of recreation and exercise and a mode of transportation with a lower risk of infection leading to an increase in demand for bicycles on a global scale.

Under such circumstances, in overseas markets including Europe and North America, while retail sales of bicycles and bicycle-related products remained robust, as the inability of supply to keep up with the demand continued, trends of shortages in both distributor inventories and retail inventories persisted in each country.

“In the Japanese market, although there was no significant increase in demand for bicycles as seen in the U.S. and Europe, as retail sales for cross bikes used for recreation and as a mode of transportation and for EBikes were solid, distributor inventories remained largely at appropriate levels.

“Under these market conditions, order-taking was brisk for the new Deore MTB components and a wide range of existing products overall.”

Fishing Tackle Segment
In the Fishing Tackle segment, net sales increased 9.7 percent from the previous year to ¥79,907 million, and operating income increased ¥39.6 percent to 14,264 million.

Shimano said, “Restrictions on outings such as lockdown were imposed in many countries as a measure to prevent the spread of COVID-19 and the accompanying measure to prohibit store operations impacted sales of fishing products in the first half of 2020. After the restrictions were relaxed, fishing regained attention as an outdoor leisure activity, and demand for fishing products increased.

“Under these conditions, in the Japanese market, sales remained favorable reflecting trends in the market activated due to an increase in the number of new customers who are outdoor-minded. In the fourth quarter, sales of mid-range and popular price range products were especially favorable, supported by good weather.

“Overseas, in the North American market, the new products were well received and centering around low- and mid-range price products, sales were solid. In Europe, although some regions were under lockdown due to another wave of infections, sales remained strong as the growth of e-commerce for fishing tackle encouraged diversification of sales channels. In Asia, sales in China remained robust as the nation recovered from COVID-19 rapidly. In Australia, where the fishing season began in the fourth quarter, sales remained favorable reflecting the high demand for fishing tackle.

“Under these market conditions, orders for new products were favorable, while Zodias (bass rods equipped with Hi-Power X), BB-X special series (rods for ISO-fishing equipped with Spiral X Core), and spinning reels Vanford and Saragosa SW were well-received in the market.”

Outlook
For the current year, Shimano forecasted sales to reach ¥455.5 billion, up 20.5 percent. Operating income is expected to reach ¥105 billion, a gain of 27.0 percent. Net income attributable to owners of the parent is expected to reach ¥76,500 million, up 20.5 percent.

Photo courtesy Shimano