Shimano’s Sales Expand 15 Percent In First Half

Shimano, Inc. reported its net income increased 22.4 percent in the first half ended June 30 as sales grew 14.7 percent.

Sales reached ¥303,686 million, up against ¥264,694 million. Operating income increased 15.7 percent to ¥80,909 million, and ordinary income advanced 24.7 percent to ¥92,123 million. Net income increased 22.4 percent to ¥68,558 million against ¥56,007 million a year ago.

Shimano said, “During the first half of fiscal year 2022, while restrictions on economic activities to tackle the spread of the novel coronavirus (COVID-19) were eased, the pace of global economic recovery remained at a standstill due to soaring global resource prices caused by the situation in Ukraine, rising inflation and a slowdown in the Chinese economy, among other factors. In Europe, although restrictions on movements were eased and the normalization of economic activities progressed, soaring energy prices caused inflation, which deteriorated consumer sentiment rapidly.

“In the U.S., while the acceleration of inflation put downward pressure on the economy, personal consumption remained steady, backed by household savings accumulated by economic measures, in addition to a sustained recovery in the labor market. In China, under the zero-COVID strategy, restrictions on economic activities were tightened, and personal consumption continued to be sluggish. In Japan, there remained strong uncertainty over the rise in resource prices and the outlook for the situation of COVID-19. However, signs of a pickup were seen in personal consumption as the normalization of economic activities progressed.”

Bicycle Component Sales Grew 17 Percent
Sales from its Bicycle Components segment increased 17.2 percent from the same period of the previous year to ¥249,203 million, and operating income increased 20.2 percent to ¥69,581 million.

Shimano said, “Although strong interest in bicycles that attracted attention globally started to cool 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 as strong demand continued. Meanwhile, those entry-class bicycles were at a high level as their supply caught up with the demand. Overseas, in the European market, sales of bicycles and bicycle-related products remained firm, backed by demand for e-bikes that remained strong. Market inventories of completed bicycles approached appropriate levels as demand in some regions showed signs of cooling down. In the North American market, while demand for a high-end class completed bicycles remained firm and market inventories remained at a low level, demand for middle-class bicycles showed signs of cooling down. In the Asian and South and Central American markets, strong interest in bicycles cooled off. In the Japanese market, while demand for sport bikes and E-BIKE remained firm, retail sales were sluggish due partly to the inventory shortages of entry-class road bikes. Under these market conditions, order-taking was brisk for a wide range of products, including the high-end models for road bikes, Dura-Ace and Ultegra, and sport e-bike components, Shimano Stepsseries.”

Fishing Tackle Sales Improve 4.5 Percent
Net sales from this segment increased 4.5 percent from the same period of the previous year to ¥54,235 million, and operating income decreased 5.8 percent to ¥11,335 million.

Shimano said, “Strong interest in fishing that attracted attention globally showed signs of cooling down. In the Japanese market, while there were signs of a lull in the movement of products for families and beginners, sales of high- and mid-priced products were strong. Overseas, in the North American market, although there were concerns about the impact of inflation, demand for fishing tackle remained strong, and sales remained favorable. In the European market, sales remained firm despite the prolonged situation in Ukraine that affected neighboring countries. In the Asian market, while sales in the Korean and Taiwanese markets remained strong, sales in the Chinese market were affected by restrictions on activities due to lockdowns. In the Australian market, sales remained firm despite natural disasters such as flooding on the East Coast. Under these market conditions, new products such as spinning reels Stella and double spindle reels Aldebaran BFS were well-received. In addition, spinning reels Aero Technium MGS, offshore rods Grappler and Grappler BB and other products continued to make a great contribution.”

Outlook
Shimano maintained its outlook for sales and operating income but increased its guidance for ordinary income and net income due to the recording of non-operating income associated with the depreciation of Asian currencies caused by the ongoing U.S. dollar’s appreciation during the first half of fiscal year 2022.

Sales are expected to be ¥580,000 million, up from ¥546,515 million a year ago. Operating income is expected to be ¥161,000 million, up from ¥148,287 million a year ago. 

Guidance for ordinary income was lifted to ¥174,500 million from ¥163,100 million a year ago compared to ¥152,562 million last year. 

Net income guidance was raised to ¥128,400 million from ¥117,500 million previously, compared with ¥115,937 million a year ago.