Shimano Reports European and North American Demand Remained Weak in Q3

Shimano’s results improved significantly in the nine months ended Sept. 30 as growth in China and the rest of Asia continued to offset weak growth in Europe and North America, where demand for its bicycling components and fishing tackle remained lackluster despite the weaker yen.

The Japanese company reported consolidated net sales reached ¥199.5 billion ($2.07 bn) in the first nine months ended Sept 30, up 9.2 percent from the same period in 2012. Consolidated operating income increased 18.5 percent to ¥35.1 billion ($365 mm)and net income increases 24.6 percent to ¥25.5 billion ($265 million).

“In Japan, Abenomcs gradually started to take effect and economic sentiment improved for the third consecutive quarter,” the company said in its earnings release.

Sales increased 8.9 percent to ¥159.2 billion ($1.66 bn) at the company’s Bicycle Components segment, where operating income decreased 2.4 percent to ¥29.1 billion ($303 mm). Sales were strong in Europe in July and August but could not offset the effects of a late spring. In the United States and Japan they remained lackluster and never made up for the loss of sales due to the long winter. The business was buoyed by growing sales of sport bikes in China, which continue to do well and demand for repair parts grew strongly worldwide with shipments of Deore and Altus mountain bike components and Ultegra and Claris road bike components proceeding as scheduled.

At the Fishing Tackle segment, sales increase 10.6 percent to ¥40.0 billion ($416 mm) and operating income decreased 7.1 percent to ¥2.0 billion ($21 mm). In the Fishing Tackle segment, sales rebounded in Japan, but remained lackluster in Europe and North America. Sales to China and Southeast Asia drove growth.

Sales from other businesses decreased 13.0 percent to ¥281 million ($3 mm), producing an operating loss of ¥108 million ($1.1 mm), down from a loss of ¥179 million in the first nine months of 2012.

Shimano revised its forecast of consolidated results for fiscal 2013 to net sales of ¥265 billion, operating income of ¥43 billion, ordinary income of ¥47 billion and net income of ¥31 billion.