Shimano is planning to develop new products, web services and applications using certain assets of Pioneer Sports Cycle that it has acquired from Pioneer Corporation, the U.S. company that developed the first pedaling monitor and cycling computers in 2013.
Many of Pioneer’s current products have been designed to be compatible specifically with the bicycle components of Shimano. The Japanese company will make its future services available to customers who currently use Pioneer’s Cyclo-Sphere web services, PC tools and smartphone applications.
Meanwhile, Shimano has reported lower-than-expected results for the 2019 financial year, partly because it recorded flat sales of bicycle components at the end of the year, while its fishing gear sales were down due to typhoons that blew through Japan.
In the fourth quarter, the company’s net income dropped by 35 percent to 9,034 million yen (€75.4m-$83.1m), on sales that were slightly lower at ¥93,707 million (€782.0m-$862.1m). The gross margin narrowed by 0.6 percentage points in the quarter to 37.9 percent.
Shimano’s net income for the full year decreased by 3.9 percent to ¥51,833 million (€432.7m-$467.1m). This was well below the company’s latest guidance – which was updated in the third quarter – forecasting net income of ¥55,300 billion (€461.6m-$498.3m).
The group’s revenues increased by 4.4 percent from the previous year to ¥363,230 million (€3.0bn-$3.3bn). The gross margin lost 0.5 percentage points to 38.7 percent, and operating income increased by 3.5 percent to ¥68,010 million (€567.7m-$612.8m).
In the bicycle components segment, Shimano’s revenues improved by 4.6 percent to ¥290,038 million (€2.4bn- $2.6bn) last year, while the operating income rose by 1.0 percent to ¥57,850 million (€482.7m-$521.0m).
In Europe, continued good weather supported retail sales of bicycles, mainly sports e-bikes. In North America, although total unit sales of bicycles decreased slightly at retail, the total amount of the company’s sales remained at the same level as in the prior year, thanks to higher selling prices.
In China, retail sales were flat, as the downward trend that persisted until last year has begun to slow. With regard to other emerging markets, Brazil saw sluggish retail sales and the Argentinean market remained stagnant.
In Japan, sales of medium-to high-end sports bicycles were sluggish, according to the company. The new Deore and SLX high-end MTB components, and GRX gravel road components were well received in the market, however.
Shimano’s fishing tackle segment performed well, despite a difficult end of the year, scoring a 19.6 percent increase in operating profit to ¥10,219 million (€85.3m-$92.0m) on 3.4 percent higher sales of ¥72,838 million (€607.8m-$656.0m).
The company indicated that retail sales in Japan registered steady progress until September, but ended up at the same level as in the previous year following stagnating market conditions after October due to the impact of the typhoons. Still, sales in Japan exceeded the previous year’s level, with robust sales of middle-to-high priced reels, while rods also did well.
Overseas, the company recorded strong sales of new fishing products such as the SLX and Stradic ranges. In North America, revenues remained solid, supported by the strong economy, although sales were impacted by unfavorable weather. In Europe, although overall sales were sluggish, signs of recovery were seen in some countries, especially in the U.K. Sales of sports-fishing-related products continued to be strong in China. In Australia, the business remained sluggish due to bad weather that hindered the start of the fishing season.
In the Others segment, Shimano’s sales were down by 0.7 percent to ¥353 million (€2.9m-$3.2m). The group narrowed its operating loss in this division to ¥59 million (€490,000-$530,000) from ¥107 million in 2018.
Moving to 2020, the company forecasts that its sales will go up by 2.4 percent to ¥372 billion (€3.1bn-$3.4bn), while net income should improve by 0.7 percent to ¥52.5 billion (€438.1m-$473.0m).
