Shimano reported that net income rose 10.6 percent on a 15.1 percent revenue gain in its year ended December 31. Both earnings and sales easily topped the company’s guidance. Sales are expected to decline 20 percent in the current year.
Sales increased 15.1 percent from the previous year to ¥628,909 million ($4.8 bn). Operating income increased 14.1 percent to 169,158 million ($1.28 bn), ordinary income increased 15.7 percent to ¥176,568 million ($1.34 bn), and net income attributable to owners of the parent increased ¥10.6 percent to ¥128,178 million ($971 mm).
Under its guidance, Shimano expected sales of ¥590,000 million, operating income of ¥163,500 million, ordinary income of ¥188,500 million and net income of ¥136,300 million.
Shimano said in its statement, “During fiscal year 2022, while restrictions on activities to tackle the spread of the novel coronavirus (COVID-19) were eased, the outlook for the global economy remained uncertain due to soaring resource and commodity prices caused by the prolonged situation in Ukraine and monetary tightening measures aimed at curbing inflation taken by central banks in various countries, among other factors. In Europe, consumer sentiment was sluggish against a backdrop of concerns about resource and energy supply, rising prices, prolonged high inflation, and other factors, which increased fears of an economic slowdown. In the U.S., while rises in policy rates to tame high inflation put downward pressure on the economy, personal consumption remained firm, backed by a solid employment environment. In China, intermittent restrictions on economic activities under the zero-COVID policy slowed down a pickup in personal consumption, and economic recovery remained lackluster. In Japan, rising prices caused by soaring resource prices and the depreciation of the yen put downward pressure on personal consumption, but signs of a gradual recovery in the economy were seen as the normalization of economic activities progressed under the with-COVID policy. In this environment, demand for bicycles and fishing tackle remained firm, although showing signs of cooling down.”
For the fourth quarter, sales grew 6.6 percent to ¥161,244 million, operating earnings rose 3.1 percent to ¥161,244 million and net income declined 50.1 percent to ¥14,692 million. Fourth-quarter results were attained by subtracting nine-month results from full-year results.
Bicycle Components Segment Sales Advance 15.9 Percent In The Year
In the Bicycle Components segment, sales increased 16.6 percent from the previous year to ¥517,436 million ($3.92 bn), and operating income increased 15.9 percent to ¥144,994 million ($1.1 bn).
Shimano said in its financial release, “Although the strong interest in bicycles during the COVID-19 pandemic showed signs of cooling down, demand for bicycles remained above the pre-COVID-19 levels. In terms of market inventories of completed bicycles, those of high-end class bicycles remained at a low level. Meanwhile, inventory levels of middle-class bicycles rose, following those of entry-class bicycles. Overseas, in the European market, sales of bicycles and bicycle-related products remained firm, partly backed by a strong interest in bicycles. Despite shortages in inventories of completed bicycles, especially ebikes and high-end class road bikes, market inventories remained somewhat high. In the North American market, although demand for bicycles was firm, market inventories remained higher than appropriate levels due to the supply adjustment of completed bicycles. In the Asian and South and Central American markets, consumer sentiment declined due to high inflation and interest in bicycles cooled off. However, in the Chinese market, market inventories of sport bikes remained at a low level, with a growing interest in cycling under the zero-COVID policy, especially in road bikes. In the Japanese market, although demand for sport bikes and e-bikes remained firm, market inventories of generally completed bicycles remained high. Under these market conditions, order-taking was brisk for a wide range of products, including the new product Shimano 105, a high-end model for road bikes, and sport e-bike components, Shimano Steps series.”
Sales in the quarter in the Bicycle Components segment rose 6.5 percent to ¥132,782 million. Operating income gained 1.4 percent to ¥35,875 million.
Fishing Segment Sales Improve 4.5 Percent In Year
Net sales from the Fishing segment increased 8.4 percent from the previous year to ¥110,993 million ($841 mm), and operating income increased 4.5 percent to ¥ ($183 mm).
Shimano said in its financial release, “While interest in fishing that had grown globally showed signs of cooling down, robust demand for fishing tackle was seen in some areas. In the Japanese market, sales of mid- to high-priced products remained strong, with fishing styles going diversified, although sales of popularly priced products for families and beginners slowed down. Overseas, in the North American market, demand for fishing tackle showed signs of cooling down as a whole. However, demand for saltwater products remained firm and sales remained strong. In the European market, while high inflation and other factors caused a sense of stagnation in the market in the U.K., sales remained strong in the areas of Southern and Eastern Europe. In the Asian market, sales were favorable in tandem with market growth fueled by robust demand for fishing tackle. In the Chinese market, there remained impacts from stringent lockdown measures. However, after the lifting of restrictions, vigorous movements were seen in demand for fishing tackle. In the Australian market, demand for fishing tackle remained strong and sales remained firm, despite some impacts from unfavorable weather conditions. Under these market conditions, new products such as spinning reels Miravel were well-received in the market. In addition, spinning reels Stella and Ultegra XTE, as well as electric reels BeastMaster MD and other products continued to earn popularity.”
Sales in the quarter in the Fishing segment rose 6.8 percent to ¥28,340 million. Operating income gained 12.8 percent to ¥6,681 million.
For the current year, sales are expected to decline 20.5 percent to 500,000; operating income to fell 37.9 percent to 105,000 million, ordinary income to decline 32.3 percent to 119,500 million and net income to decline 32.5 percent to 86,500 million.
Photo courtesy Shimano
