Shimano has reported an increase in sales for the 2020 financial year despite a sharp decline in demand for bicycles in early spring due to the spread of Covid-19.
In its Q4 report, the Japanese company posted an increase of 2.7 per cent in net sales to 297.8 billion yen ($2.85 billion) while operating income (profit) increased 18.4 per cent to 68.5 billion yen ($652.3 million).
The turnaround in sales happened, it reported, “as cycling gained attention as an easy form of recreation and exercise, as well as a mode of transportation with a lower risk of infection, leading to an increase in demand for bicycles on a global scale.”
However, Shimano did refer to the component shortages that resulted from the bike boom: “Under such circumstances, in overseas markets including that of Europe and North America, while retail sales of bicycles and bicycle-related products remained robust, as the inability of supply to keep up with the strong demand continued, trends of shortages in both distributor inventories and retail inventories persisted in each country.”
The bike boom had been driven more by the US and European markets, rather than the Japanese market. Sales in Japan were “solid” but resulted in stocks remaining at appropriate levels.
As for its forecast for 2021, Shimano reported: “Although there are some promising signs of economic recovery such as the start of vaccinations to prevent the spread of Covid-19, uncertainties remain over the full-scale recovery of economic activities. Meanwhile, with a view to preventing the spread of Covid-19, interest in outdoor leisure activities that can avoid closed, crowded and close-contact environment is expected to continue.
“In Europe, economic turmoil caused by Brexit is expected to be avoided by agreement to conclude a free trade agreement. In China, the impact of Covid-19 will ease, and the economic recovery is expected to continue, driven by personal consumption. In the US, the Biden administration came to power, and additional financial support by the government is expected. However, social instability due to political division may discourage economic recovery.
“In Japan, as infection trends directly affect consumer sentiment and concerns prevail over the impact on the holding of the Tokyo Olympic and Paralympic Games, decline in consumption will not be fully recovered and the pace of economic recovery is estimated to be moderate.”
Following those predictions for 2021, Shimano went on to predict a huge 20.5 per cent net sales increase for the full year, with operating income forecast to be up by 27 per cent. That’s for both its cycling and fishing tackle segments: in 2020 cycling accounted for 79 per cent of the business but fishing grew even more than cycling with a year-on-year increase of 9.7 per cent in net sales and 39.6 per cent in operating income.