Shimano Group reported net sales reached ?71.0 billion yen in the year ended Dec. 31, 2013, up 10.2 percent from 2012. The Japanese company said China's growing appetite for sport bikes more than offset lackluster demand in North America, Europe and Japan, where unusually wet and cold winter weather hurt bike sales.
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The Japanese company reported its North American sales reached ?3.2 billion, up ?.78 billion or 12.8 percent. Sales rose 6.7 percent in Japan, 10.3 percent in Europe and 11.5 percent in the rest of Asia. Shimano earns about 77 percent of its revenue by selling bicycle components internationally, primarily to bicycle manufacturers.
Gross profit reached 35.6 percent, down 70 basis points from 2012.
Operating income increased 2.0 percent to ?1.8 billion yen, or 15.4 percent of revenues. Ordinary income, which reflects a ?.0 billion in foreign currency gains, increased 20.3 percent to ?7.5 billion yen and net income increase 27.7 percent to ?5.1 billion yen.
Shimano said sales at its Bicycle Components business increased 9.6 percent from the previous year to ?17.3 billion. Operating income increased 1.3 percent to ?9.5 million, or 18.2 percent of net sales.
In the Fish Tackle segment, sales rose 13.1 percent to ?3.4 billion, while operating income increased 5.7 percent to ?.4 billion, or 4.5 percent of revenues.
The company boosted spending on both salaries and wages and advertising by nearly 15 percent and on R&D by roughly 8 percent over 2012 levels. Shimano ended the quarter with ?3.8 billion in cash and cash equivalents, up 19.3 percent from a year earlier. Merchandise and finished goods at year end were valued at ?8.3 billion, up 10.5 percent from a year earlier.
Outlook
Shimano forecasts net sales will grow 3.3 percent in 2014 to ?80.0 billion while operating income will rise 7.7 percent to ?5.0 billion yen. Ordinary and net income is expected to decline 5.4 and 10.2 percent respectively.
The forecast includes projected sales of ?24 billion at Bicycle Components and ?5 billion at Fishing Tackle.
