Shimano Inc.’s sales were down 11.9 in the first half ended June 30. Sales fell 14.6 percent in the Bicycle Components segment and 1.8 percent in the Fishing Tackle segment.
Overall revenues reached ¥160.3 million, down from ¥181.9 million.
Operating income decreased 15.8 percent to ¥28.7 billion, ordinary income increased 4.3 percent to ¥36.1 billion due to the recording of foreign exchange gains and other factors, and net income attributable to owners of parent increased 26.0 percent to ¥31.2 billion.
Shimano said, “During the first half of fiscal year 2020, as the spread of the novel coronavirus (COVID-19) significantly erodes consumer sentiment, European economies deteriorated substantially due to lockdown and other factors. The U.S. economy saw a decline in salary income, resulting in a notable slowdown in personal consumption partly due to a decrease in employment caused by a measure to control the infection. The country prepared to resume economic activities, but the economy has yet to fully recover. In Japan, personal consumption significantly declined due to the government’s request that people refrain from going out under the nationwide emergency declaration, and the economy decelerated as employment.”
In the Bicycle Components segment, net sales decreased 14.6 percent from the same period of the previous year to ¥122.6 billion, and operating income decreased 19.7 percent to ¥22.96 billion.
Shimano said about the segment, “In Europe, many bicycle retailers were forced to be closed temporarily as the novel coronavirus had spread across Europe. With the lifting of restrictions on going outside and traveling, however, demand for bicycles rapidly increased as an easy recreation and as a mode of transportation with a lower risk of infections. In addition, as subsidies and other policies to encourage the purchase of bicycles were devised in each country, distributor inventories remained at low levels from May.
“In North America and China, demand for bicycles rose as in Europe, which led to low levels of distributor inventories from May. In South America, where the spread of the novel coronavirus continued, demand for bicycles was solid and distributor inventories remained at appropriate levels.
“In the Japanese market, despite some increase in demand for bicycles, sales of both community bicycles and sports bicycles were weak as a whole, significantly affected by the government’s request that people refrain from going outside under the emergency declaration. Meanwhile, distributor inventories remained at appropriate levels.
“Under these market conditions, the new Deore MTB components were well received in the market.”
In the Fishing Tackle segment, net sales decreased 1.8 percent from the same period of the previous year to ¥37.5 billion, and operating income increased 5.5 percent to ¥5.77 billion.
Shimano said about the segment, “In the Japanese market, after the emergency declaration in April, there were demands mainly in the areas that were relatively less affected by the infection, as well as those for e-commerce sales. However, sales dropped temporarily due to a decline in consumer sentiment. After the state of emergency was lifted in late May, sales recovered rapidly owing to the fast-growing demand from consumers seeking to enjoy fishing as an outdoor leisure activity.
“Overseas, outings were restricted in many countries as a measure to prevent the spread of the novel coronavirus in and after March, which impacted sales. From May onwards, fishing regained attention as an outdoor leisure activity, causing demand for fishing products to increase.
“Under these conditions, in North America, sales were underpinned by e-commerce as a mode to purchase fishing tackle without going outside. With the lifting of restrictions in late April, demand for fishing products rapidly increased and sales recovered to the level of the same period of the previous year.
“In Europe, sales were weak as fishing was temporarily prohibited in many countries, but a sign of recovery was seen in the entire Europe after June and sales immediately picked up.
“In Asia, sales in China have regained momentum as the nation recovered from the impact of the novel coronavirus, while sales in other countries were weak as a whole. In Australia, where the spread of the novel coronavirus infection was quickly brought under control, the market environment rapidly picked up from late April and purchases by retailers remained active.
“Under these market conditions, in Japan, sales of new products, including Metanium and TWIN POWER, as well as popular price range spinning reels, remained favorable. Among overseas markets, in China, rods equipped with SPIRAL X CORE, including LUNAMIS, performed well.”
Shimano withdrew its full-year forecast in the first quarter due to the uncertainty created by the pandemic but provided updated guidance for the second quarter. Sales are expected to be ¥350 billion for the year compared to ¥363.2 billion in FY19. Operating income is expected to be slightly down to ¥63.5 billion from ¥68 billion a year ago. Net income is expected to improve to ¥58.3 billion against ¥51.8 billion in FY19.
Photo courtesy Shimano
