Shimano : Summary of Financial Results FY2023-Q1

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Summary of Consolidated Financial Results for the First Quarter of FY2023 (JGAAP)

	(January 1, 2023 - March 31, 2023) [Japanese Standard] (Consolidated)	April 25, 2023
Company Name:	Shimano Inc.	Stock Exchange: Tokyo, Prime Market
Code Number:	7309	URL: https://www.shimano.com
Representative:	Taizo Shimano, President
Contact:	Takuma Kanai, Executive Officer, General Affairs Administration Dept.	Telephone: [phone]

	and Supervising of Accounting Dept.
Date of filing of quarterly report to Ministry of Finance:	May 11, 2023	Scheduled payment date for dividends: －
Supplemental information:			Yes
Financial results briefing:			No
					(Amounts are rounded down to the nearest million yen.)
1. Consolidated financial results for the first quarter of FY2023 (January 1, 2023 - March 31, 2023)
(1) Consolidated income information		(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)
		Net sales	Operating income	Ordinary income	Net income attributable
		to owners of parent
		Million yen	%	Million yen	%	Million yen	%	Million yen	%
First quarter of FY2023		126,071	(12.5)	28,009	(26.4)	28,596	(27.4)	20,203	(29.7)
First quarter of FY2022		144,047	13.9	38,033	16.8	39,395	6.6	28,740	0.5
(Note) Comprehensive income First quarter of FY2023: 29,713 million yen (-46.5)%	First quarter of FY2022: 55,523 million yen (19.2%)
		Basic earnings	Diluted earnings
		per share	per share
			Yen		Yen
First quarter of FY2023			223.11		－
First quarter of FY2022			314.03		－
(2) Consolidated balance sheet information
		Total assets	Net assets	Shareholders' equity
		ratio
		Million yen	Million yen		%
First quarter of FY2023			825,410		752,998		91.1
FY2022			826,413		741,095		89.6
(Reference) Shareholders' equity First	quarter of FY2023: 751,874 million yen	FY2022:	740,108 million yen

2. Dividend information

			Dividend per share
	1st Quarter	2nd Quarter	3rd Quarter	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
FY2022	－	117.50	－	142.50	260.00
FY2023	－
FY2023 (Forecast)		142.50	－	142.50	285.00
(Note) Change in forecasted dividend during the period: None

3. Forecasted consolidated business performance for FY2023 (January 1, 2023 - December 31, 2023)

(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

							Net income	Basic earnings
	Net sales		Operating income	Ordinary income	attributable to
		per share
							owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First half of FY2023	254,200	(16.3)	49,700	(38.6)	53,700	(41.7)	38,700	(43.6)	428.09
FY2023	460,000	(26.9)	83,000	(50.9)	96,500	(45.3)	69,500	(45.8)	768.79

(Note) Change in forecasted consolidated business performance during the period: Yes

*Notes

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries due to changes in scope of consolidation): None
2. Application of accounting treatment specific to preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and retrospective restatement

① Changes in accounting policies in accordance with revision of accounting standards:	None
② Changes in accounting policies other than ① above:		None
③ Changes in accounting estimates:		None
④ Retrospective restatement:		None
(4) Number of shares of common stock issued
①	Number of shares of common stock issued at period-end	First quarter of	91,160,100	FY2022	91,160,100
	(including treasury stock):	FY2023	shares		shares
②	Number of shares of treasury stock at period-end:	First quarter of	758,720	FY2022	531,034
		FY2023	shares		shares
③	Average number of shares during the period	First quarter of	90,553,130	First quarter of	91,519,666
	(cumulative from the beginning of the fiscal year):	FY2023	shares	FY2022	shares

This quarterly financial report is outside the scope of quarterly review procedures by certified public accountants or audit corporations.

Explanation regarding the appropriate use of forecasts of business performance and other special items

The forecasts of consolidated business performance and other forward-looking statements contained in this document are based on information currently available to the Company and certain assumptions that management believes reasonable and actual business performance may differ materially from those described in such statements due to various factors. For details of assumptions for the forecasts and other related items, please refer to page 3 of the attached document. Shimano Inc. accepts no liability whatsoever for any direct or consequential loss arising from any use of this document.

	Shimano Inc. (7309) Summary of Consolidated Financial Results for the First Quarter of FY2023
○Table of contents of the attached document
1. Qualitative Information on Consolidated Financial Performance for the Period under Review	2
(1)	Results of Operations	2
(2)	Financial Position	3
(3)	Forecast for the Fiscal Year Ending December 31, 2023	3
2. Consolidated Financial Statements and Primary Notes	4
(1)	Consolidated Balance Sheets	4
(2)	Consolidated Statements of Income and Comprehensive Income	6
(3)	Notes relating to Consolidated Financial Statements	8
	(Note concerning Assumption of Going Concern)	8
	(Note on Significant Change in the Amount of Shareholders' Equity)	8
	(Segment Information)	9

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Shimano Inc. (7309) Summary of Consolidated Financial Results for the First Quarter of FY2023

1. Qualitative Information on Consolidated Financial Performance for the Period under Review

1. Results of Operations

During the first quarter of fiscal year 2023, interest rate hikes by the central banks of various countries to cope with rising prices, the prolonged turmoil in Ukraine and other factors weighed heavily on the normalization of the global economy.

In Europe, easing concerns over tight energy supply and demand led to lower gas prices and government measures to address rising prices supported economic activity.

In the U.S., although favorable employment conditions supported personal consumption, the economy was affected by monetary policy, including higher policy rates, leading to rising uncertainties.

In China, restrictions on activities in place due to the spread of the novel coronavirus (COVID-19) eased, and the normalization of economic activities progressed.

In Japan, although rising prices exerted downward pressure on personal consumption, the economy gradually recovered as signs of normalization of economic activities were seen under the with-COVID policy.

In this environment, demand for bicycles and fishing tackle showed signs of cooling down, and for the first quarter of fiscal year 2023, net sales decreased 12.5% from the same period of the previous year to 126,071 million yen. Operating income decreased 26.4% to 28,009 million yen, ordinary income decreased 27.4% to 28,596 million yen, and net income attributable to owners of parent decreased 29.7% to 20,203 million yen.

Reportable Segment Overview

• Bicycle Components

Although the strong interest in bicycles cooled down as progress was made toward recovery to pre- COVID-19day-to-day routines, interest in bicycles continued as a long-term trend. On the other hand, concerns about economic recession, including rapidly rising inflation, led to a slowdown in sales of completed bicycles, and market inventories generally remained high, despite ongoing supply and demand adjustments.

Overseas, in the European market, interest in bicycles continued to be high, and retail sales of completed bicycles, especially e-bikes, was solid. Market inventories generally remained at high levels, although some high-end models were in short supply.

In the North American market, sales remained weak and market inventories were at a consistently high level.

In the Asian and South and Central American markets, although interest in bicycles was firm, sales remained somewhat sluggish due to cooling consumer confidence on account of currency depreciation and rising inflation. However, in the Chinese market, sales remained strong, especially for road bikes, owing to the growing momentum of outdoor sports cycling.

In the Japanese market, the soaring price of completed bicycles due to yen depreciation and other factors slowed the pace of sales and market inventories remained somewhat high.

Under these market conditions, the Shimano Group provided products to the market, including the new product SHIMANO 105 that is a high-end model for road bikes, and sport e-bike components, SHIMANO STEPS series.

As a result, net sales from this segment decreased 16.8% from the same period of the previous year to 98,298 million yen, and operating income decreased 31.8% to 22,123 million yen.

• Fishing Tackle

The global interest in fishing showed signs of cooling down, despite the appearance of with-COVID activities, such as on-site fishing tackle shows taking place in various countries for the first time in several years.

In the Japanese market, while there were inventory adjustment activities at retail stores, demand for high- priced products was brisk.

Overseas, sales in the North American market softened compared to the previous year.

In the European market, the Turkey-Syria Earthquake for the most part had no impact, and backed by stable demand sales remained strong.

In the Asian market, sales were favorable as interest in fishing was buoyed by the spread of fishing culture. In the Chinese market, which was buffeted by the spread of COVID-19 at the start of the year, the market normalized from February, and sales were strong on the growing momentum for fishing trips.

In the Australian market, sales remained firm, assisted by favorable fishing conditions, although demand began to show signs of slowing.

Under these market conditions, order-taking was brisk for the new spinning reels VANQUISH and the

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Shimano Inc. (7309) Summary of Consolidated Financial Results for the First Quarter of FY2023

highest-end model lure fishing rods WORLD SHAULA LIMITED, and other products that were well- received in the market.

As a result, net sales from this segment increased 7.4% from the same period of the previous year to 27,670 million yen, and operating income increased 5.9% to 5,894 million yen.

• Others

Net sales from this segment decreased 1.4% from the same period of the previous year to 103 million yen and operating loss of 8 million yen was recorded, following an operating income of 12 million yen for the same period of the previous year.

1. Financial Position
   Assets, Liabilities and Net Assets
   Total assets as of the end of the first quarter of fiscal year 2023 amounted to 825,410 million yen, a decrease of 1,003 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 13,232 million yen in merchandise and finished goods and an increase of 1,038 million yen in machinery and vehicles, and a decrease of 11,296 million yen in cash and time deposits, a decrease of 2,175 million yen in work in process, and a decrease of 1,764 million yen in notes and accounts receivable-trade.
   Total liabilities amounted to 72,411 million yen, a decrease of 12,907 million yen compared with the figure as of the previous fiscal year-end. The principal factors included a decrease of 9,702 million yen in income taxes payable and a decrease of 1,715 million yen in accounts payable-trade.
   Net assets amounted to 752,998 million yen, an increase of 11,903 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 9,443 million yen in foreign currency translation adjustments, an increase of 7,288 million yen in retained earnings, and an increase of 4,895 million yen in treasury stock.
2. Forecast for the Fiscal Year Ending December 31, 2023

The consolidated business performance forecasts have been revised as follows in light of current trends in the first quarter of fiscal year 2023 where market inventories have been at a generally high level, and with the ongoing revisions to orders received by the Shimano Group in line with supply and demand adjustments, which had swollen significantly prior to the adjustments.

Revisions to consolidated business performance forecast figures for the first half of FY2023 (January 1, 2023 - June 30, 2023)

				Net income		Basic earnings
	Net sales	Operating income	Ordinary income	attributable to
		per share
				owners of parent
	Million yen	Million yen	Million yen	Million yen		Yen
Previous forecast (A)	254,200	49,700	55,700	40,200	443.57
Revised forecast (B)	254,200	49,700	53,700	38,700	428.09
Difference (B-A)	－	－	(2,000)	(1,500)
Change (%)	－	－	(3.6)	(3.7)
First half results for FY2022	303,686	80,909	92,123	68,558	750.68

Revisions to consolidated business performance forecast figures for FY2023 (January 1, 2023 - December 31, 2023)

				Net income		Basic earnings
	Net sales	Operating income	Ordinary income	attributable to
		per share
				owners of parent
	Million yen	Million yen	Million yen	Million yen		Yen
Previous forecast (A)	500,000	105,000	119,500	86,500	954.44
Revised forecast (B)	460,000	83,000	96,500	69,500	768.79
Difference (B-A)	(40,000)	(22,000)	(23,000)	(17,000)
Change (%)	(8.0)	(21.0)	(19.2)	(19.7)
Full year results for FY2022	628,909	169,158	176,568	128,178	1,408.22

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