Along with the release of its first-half results, Shimano upgraded its sales guidance to ¥225.0 billion (€2.0bn-$2.8bn) for the full year, up from an earlier forecast of ¥220.0 billion. The new target represents a 5.3 percent increase compared with the 2010 top line. However, the Japanese company slightly trimmed its forecast for ordinary income to ¥32.8 billion, (€291.9m-$413.0m) down from ¥33.0 billion. The guidance for operating and net income remained unchanged at ¥34.0 billion (€302.6m-$428.1m) and ¥20.0 billion (€178.0m-$251.8), respectively.
The company expects China and other Asian economies to continue posting robust growth. On the other hand, the company expects modest recovery in markets such as Europe and the U.S., due to uncertainty about the public finances of some European countries, high unemployment and rising oil prices. In Japan, consumer confidence has weakened and the economic recovery is likely to be fragile.
In the first half, Shimano's sales rose by 2.6 percent to ¥107.1 billion (€953.1m-$1.3bn). Profits were lower, with the operating income down by 11.8 percent to ¥15.2 billion (€135.2m-$191.4m) and net income off by 28.2 percent at ¥6.9 billion (€61.4m-$86.9m).
Sales of bicycle components rose by 3.3 percent in the first half to ¥84.3 billion (€750.2m-$1.0bn), while operating income decreased by 10.1 percent to ¥14.3billion (€127.2m-$180.0). In Europe, retail sales were buoyant, owing to good weather from late March to May in most markets. In North America, retail sales were in line with the previous year, while the Chinese market expanded, driven by strong demand for sports bicycles.
Bicycle inventories held by distributors remained at normal levels worldwide. Shimano's shipments proceeded roughly in line with plans supported by brisk demand for Deore XT mountain bike, and Tiagra road bike components.
Shimano's fishing tackle business increased its sales by 1.3 percent to ¥22.6 billion (€201.1m-$284.6m). Its operating income slipped by 27.6 percent to ¥1.0 billion (€8.9m-$12.6m).
Despite the 8.9-magnitude earthquake that hit the country in March and the subsequent nuclear disaster, sales of fishing tackle in Japan were virtually unchanged from a year earlier. Foreign sales were higher, lifted by Asian and Latin American markets.
Sales from other businesses decreased by 41.2 percent to ¥316 million and their combined operating losses widened to ¥119 million from ¥78 million.
