After a difficult financial year in 2017, Shimano turned things around in the first nine months of 2018, with profits soaring. The company said that it benefited from continued moderate economic expansion in Europe, with higher personal consumption trends backed by improvements in employment and income. Sales were also boosted by solid business conditions and strong consumer sentiment in the U.S. and by a recovery in personal consumption in Japan.
For the nine months to Sept. 30, Shimano's operating income went up by 2.7 percent to 47,816 million yen (€375.3m-$427.0m), while net income jumped by 42.4 percent to ¥27,718 million (€217.5m-$247.5m). This led the company to raise its earnings guidance for the full year, anticipating net income of ¥52,300 million (€410.5m-$467.1m), instead of a previously forecast level of ¥49,300 million (€386.9m-$440.3m).
Shimano's sales rose by 3.2 percent in the first nine months of this year to ¥253,923 million (€2.0bn-$2.2bn), while the gross margin dipped by 1.8 percentage points to 39.5 percent.
In the bicycle components segment, Shimano's revenues improved by 2.2 percent to ¥199,961 million (€1.6bn-$1.8bn). Operating income inched down by 0.1 percentage point to ¥41,052 million (€322.2m-$366.7m). In Europe, with the stable weather continuing through the summer season, the company said that retail sales of complete bicycles, mainly sport e-bikes, remained robust and distributor inventories of bicycles declined slightly.
In North America, retail sales of finished bicycles were on par with those of an average year, while in China they showed no signs of recovery and retail sales of low-end and middle-range bicycles continued to be sluggish. On the other hand, Shimano noted that the bike-sharing phenomenon that spread widely in urban areas last year is now undergoing a realignment.
As for other emerging markets, Southeast Asia as a whole still lacked vigor in the segment. In South America, consumption showed signs of a slowdown due to the effects of currency depreciation in Brazil and Argentina. In the Japanese market, while retail sales of sports bicycles and community bicycles remained sluggish, because of persistently unseasonable weather since the beginning of the year, sales of e-bikes as a whole went up. In particular, Shimano's new 105 Series was well received.
Meanwhile, Shimano's fishing tackle segment performed particularly well, scoring a 24.7 percent increase in operating profit to ¥6,827 million (€53.6m-$61.0m) on 7.3 percent higher sales of ¥53,699 million (€421.5m-$479.6m). In Japanese, retail sales were sluggish because of heavy rains and typhoons during the summer.
Overseas, the company's new model of baitcasting reel, the Curado DC, was highly acclaimed, particularly in North America, where sales exceeded the previous year's level, supported by the expanding economy. Sales in Europe were seen to recover steadily, while distributor inventories remained at a slightly higher level in the U.K., one of the group's major markets.
Sales in China, South Korea and Southeast Asian markets continued to be robust, led by the growing popularity of sports fishing. In Australia, the market was booming and sales remained strong thanks to continuing favorable weather.
In the Others segment, Shimano's sales decreased by 7.4 percent to ¥263 million (€2.1m-$2.3m), leading to an operating loss of ¥63 million (€494,500-$562,650), up from an operating loss of ¥32 million for the same period in 2017.
