Shimano Inc. (7309): FY2025 Results Summary — Europe-Led Sales Growth, Profits Down on China and FX

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Shimano Inc., whose fiscal year ends on December 31, reported consolidated sales of 466,243 million yen for FY2025, up 15,250 million yen or 3.4% year on year, while operating income fell 13,408 million yen or 20.6% to 51,677 million yen. Bicycle components sales rose 2.7% as Europe expanded 29.9%, but China contracted 37.9%; fishing tackle sales rose 5.6%. Ordinary income halved to 47,030 million yen and net income attributable to owners of parent fell 55.5% to 33,991 million yen. For FY2026 the company schedules sales of 467,000 million yen, operating income of 47,000 million yen and net income of 42,000 million yen.

Consolidated Results (Full-Year Actual)

Sales rose to 466,243 million yen from 450,993 million yen a year earlier. The composition of that growth was uneven across the year: first-half sales rose 9.5% to 237,410 million yen, while second-half sales fell 2.3% to 228,833 million yen. Profitability deteriorated at every line below the top line. Gross profit declined 3.3% to 166,616 million yen and the gross profit ratio fell 2.5 points to 35.7%, while selling, general and administrative expenses grew 7.2% to 114,939 million yen. As a result the operating income ratio fell from 14.4% to 11.1%.

Below operating income, net non-operating income and expenses swung from a positive 33,589 million yen in FY2024 to a negative 4,648 million yen in FY2025, a change of 38,237 million yen, which pushed ordinary income down 52.3% to 47,030 million yen. An extraordinary gain of 9,329 million yen was recorded in FY2025 against an extraordinary loss of 80 million yen in FY2024, so net income before income taxes fell a smaller 42.8% to 56,358 million yen. Income taxes were broadly unchanged at 22,367 million yen, leaving net income attributable to owners of parent at 33,991 million yen, a decline of 55.5%.

Item (million JPY)	FY2025	FY2024	Change	Change %
Sales Total	466,243	450,993	15,250	3.4%
Gross profit	166,616	172,303	-5,687	-3.3%
Gross profit ratio	35.7%	38.2%	-2.5	—
Selling, general and administrative exp.	114,939	107,218	7,721	7.2%
Operating income	51,677	65,085	-13,408	-20.6%
Operating income ratio	11.1%	14.4%	-3.3	—
Non operating income & exp, net	-4,648	33,589	-38,237	—
Ordinary income	47,030	98,675	-51,645	-52.3%
Extraordinary gain (loss)	9,329	-80	9,409	—
Net income before income taxes	56,358	98,594	-42,236	-42.8%
Income taxes	22,367	22,265	103	0.5%
Net income attributable to owners of parent	33,991	76,330	-42,339	-55.5%

Segment Results

Bicycle components sales were 354,972 million yen, up 9,418 million yen or 2.7%, but segment operating income fell to 42,842 million yen from 54,158 million yen, with the profit ratio down from 15.7% to 12.1%. Fishing tackle sales were 110,832 million yen, up 5,842 million yen or 5.6%, with operating income of 8,866 million yen against 10,929 million yen and a profit ratio of 8.0% versus 10.4%. The Others segment recorded sales of 439 million yen and an operating loss of 30 million yen.

Within bicycle components, sales are disclosed by the destination to which products are shipped. Europe was the driver at 192,214 million yen, up 44,279 million yen or 29.9%, and North America grew 3.2% to 20,157 million yen. China fell 38,295 million yen or 37.9% to 62,679 million yen and Taiwan fell 15.1% to 24,521 million yen, while Others rose 18.1% to 47,714 million yen and Japan edged down 1.9% to 7,687 million yen. In fishing tackle, Japan sales rose 3.2% to 34,238 million yen and overseas sales rose 6.7% to 76,594 million yen.

On a company-wide basis, the overseas market accounted for 423,902 million yen or 90.9% of sales, and domestic production accounted for 237,248 million yen or 50.9% of sales. Sales denominated in yen were 206,680 million yen (44.3%) and sales in foreign currency were 259,563 million yen (55.7%). Capital investment was 46,323 million yen and depreciation and amortization was 26,891 million yen, against 44,683 million yen and 24,702 million yen respectively in FY2024.

Segment (million JPY)	Metric	FY2025	FY2024
Bicycle Components	Sales	354,972	345,554
Bicycle Components	Operating income	42,842	54,158
Bicycle Components	Profit ratio	12.1%	15.7%
Fishing Tackle	Sales	110,832	104,990
Fishing Tackle	Operating income	8,866	10,929
Fishing Tackle	Profit ratio	8.0%	10.4%
Others	Sales	439	449
Others	Operating income	-30	-2
Total	Sales	466,243	450,993
Total	Operating income	51,677	65,085
Total	Profit ratio	11.1%	14.4%

FY2026 Schedule

For FY2026 the company schedules sales of 467,000 million yen, an increase of 757 million yen or 0.2%. Bicycle components sales are scheduled at 350,000 million yen, down 1.4%, with Europe roughly flat at 193,000 million yen, China down 5.9% to 59,000 million yen and Taiwan down 22.5% to 19,000 million yen. Fishing tackle sales are scheduled at 116,500 million yen, up 5.1%, driven by overseas sales of 82,700 million yen, up 8.0%.

Operating income is scheduled at 47,000 million yen, down 4,677 million yen or 9.1%, for an operating income ratio of 10.1%. Ordinary income is scheduled to recover 19.1% to 56,000 million yen and net income attributable to owners of parent to rise 23.6% to 42,000 million yen. The schedule assumes exchange rates of 155.00 yen per US dollar and 184.00 yen per euro, against actual average rates of 149.62 yen and 169.19 yen in FY2025. The company quantifies the FY2026 foreign exchange impact as a positive 2,200 million yen on total sales and a negative 3,800 million yen on total operating income. Capital investment is scheduled at 45,000 million yen and depreciation and amortization at 29,000 million yen.

Item (million JPY)	FY2026 Schedule	FY2025 (Actual)	Change	Change %
Bicycle Components sales	350,000	354,972	-4,972	-1.4%
Fishing Tackle sales	116,500	110,832	5,668	5.1%
Others sales	500	439	61	13.9%
Sales Total	467,000	466,243	757	0.2%
Gross profit	165,000	166,616	-1,616	-1.0%
Operating income	47,000	51,677	-4,677	-9.1%
Ordinary income	56,000	47,030	8,970	19.1%
Net income attributable to owners of parent	42,000	33,991	8,009	23.6%
USD average rate (yen)	155.00	149.62	—	—
EUR average rate (yen)	184.00	169.19	—	—

Shareholder Returns

The company states that it considers the return of earnings to shareholders to be one of the most important issues for management, with a basic policy of continuing stable returns reflecting overall business performance and strategy. For FY2025 it plans to submit a proposal to the Ordinary General Meeting of Shareholders scheduled for March 24, 2026 to pay year-end cash dividends of 169.50 yen per share, an increase of 15 yen from the previous year-end dividend. Combined with interim dividends of 169.50 yen, the full-year FY2025 dividend would be 339 yen per share, up 30 yen year on year and a dividend payout ratio of 87%, marking the fifth consecutive year of dividend increases since FY2021. Total annual dividends amounted to 29.5 billion yen against an initial plan of 30.2 billion yen, the decrease reflecting the cancellation of treasury stock.

Following the policy announced on February 12, 2025 to acquire approximately 100.0 billion yen of treasury stock over two years, the company acquired 50.0 billion yen of treasury stock in FY2025 — 5.5 billion yen in February, 11.3 billion yen in March, 13.2 billion yen in April, 3.8 billion yen in August, 8.2 billion yen in September and 8.0 billion yen in October, reaching the maximum amount. Together with dividends this produced a total return ratio of 234% for FY2025. On February 10, 2026 the company set a new treasury stock acquisition limit of 50.0 billion yen for the second consecutive year. The FY2026 annual dividend is scheduled to rise a further 24 yen to 363 yen per share, for a dividend payout ratio of 75% and a scheduled total return ratio of 194%. Under a basic policy of not reducing dividends, the company targets a total return ratio of at least 50% through progressive dividends and flexible, ongoing acquisition and cancellation of treasury stock.

Shareholder returns	FY2025 (Result)	FY2026 (Schedule)
Dividend per share	339 yen	363 yen
Change in dividend per share	+30 yen	+24 yen
Dividend payout ratio	87%	75%
Total annual dividend	29.5 billion yen	31.4 billion yen
Acquisition of treasury stock	50.0 billion yen	50.0 billion yen (maximum)
Total return ratio	234%	194%

Capital Allocation and Capital Efficiency

Cash flows from operating activities before deducting R&D expense were 80.1 billion yen in FY2025, including depreciation of 26.9 billion yen against an initial plan of 27.0 billion yen, supplemented by a gain on sales of investment securities of 3.2 billion yen and carried-forward cash allocation. Cash-out for growth investment included capital investment of 46.3 billion yen against an initial plan of 50.0 billion yen — allocated 40% to the new global headquarters and factory reconstruction, 15% to DX investment and 45% to regular projects — plus R&D of 16.3 billion yen, up 1% year on year, in connection with the launch of the new XTR. Human capital spending covered talent management system implementation, an internal skill evaluation system, global leader training for approximately 30 participants and generative AI training for approximately 200 participants.

On capital efficiency, the company reiterated the disclosure of February 12, 2025 that it will strive to improve ROE to reach at least 8% by increasing profitability and restraining growth in shareholders’ equity, noting that FY2025 ROE was approximately 4%. In the FY2026 statement it adds that it is aiming for double-digit ROE in the future over the medium to long term, and that the improvement is to come from higher profitability and a reduction in shareholders’ equity. Total equity fell from 882.4 billion yen at the end of 2024 to 868.3 billion yen at the end of 2025; within that, shareholders’ equity declined from 715.4 billion yen to 670.6 billion yen, a reduction of 44.9 billion yen or 6.3%.

Under the cash position management policy announced in February 2026, the cash balance as of 2025 of 470.0 billion yen is framed as working capital of over 170.0 billion yen, growth investment of over 130.0 billion yen, contingency of over 120.0 billion yen and shareholder returns represented by the 2026 treasury stock acquisition of up to 50.0 billion yen. Working capital is defined as future sales revenue equivalent to approximately three months, and contingency covers preparation for natural disasters assuming approximately six months of operational suspension as well as financial soundness to sustain the industry. The cash balance in the consolidated balance sheet at the end of FY2025 was 477.3 billion yen, down 56.7 billion yen or 11% from the end of FY2024 and up 171.7 billion yen versus the pre-COVID-19 period, of which 125.3 billion yen was attributable to the yen-depreciation-driven foreign currency translation impact.

Planned growth investment areas for FY2026 are production technology capabilities to achieve exceptional quality, including a high-precision mold manufacturing plant and exploration of process automation using physical AI as well as strengthening supply chain resilience through localized production; funding for M&A and synergies with existing business; and expansion of cycling and fishing culture together with environment investment. Other stated priorities are digital convergence and fundamental research in R&D, employee engagement through wage increases and higher shareholding association incentive payments, addressing climate change, enhancement of corporate governance, the 2026 disclosure of the Integrated Report, and group-wide implementation of generative AI, cybersecurity and tax compliance.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.