Shimano : Summary of Financial Results FY2022-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 FY2022 (Unaudited)

(January 1, 2022 - March 31, 2022) [Japanese Standard] (Consolidated) April 26, 2022

Company Name: Code Number: Representative:Shimano Inc. 7309

Stock Exchange: Tokyo, Prime Market URL:https://www.shimano.com

Taizo Shimano, President

Contact:

Takuma Kanai, Executive Officer, General Affairs Administration Dept.

Telephone: +81-72-223-3254

and Supervising of Accounting Dept.

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

First Quarter of FY2022: 55,523 million yen (19.2%)First Quarter of FY2021: 46,580 million yen (－%)

First Quarter of FY2022: 638,912 million yenFY2021: 615,992 million yen

2. Dividend information

(Note) Change in forecasted dividend during the period: None

3. Forecasted consolidated business performance for FY2022 (January 1, 2022 - December 31, 2022)

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

(Notes) 1. Change in forecasted consolidated business performance during the period: Yes

2. Effective from the beginning of FY2022, the Company has adopted the "Accounting Standard for Revenue Recognition" (ASBJ

Statement No. 29), etc. Accordingly, the above forecasts of consolidated business performance reflect the adoption of this accounting standard, etc. As the application of the said standard, etc. has no effect on consolidated income information, the rates of increase (decrease) compared to the corresponding prior period are calculated based on consolidated business performance for FY2021.

*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

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.

○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, 2022 ...................................................................................... 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

(Changes in Accounting Policies) ...................................................................................................................... 8

(Segment Information) ...................................................................................................................................... 9

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

(1) Results of Operations

During the first quarter of fiscal year 2022, while signs of recovery from economic stagnation caused by the spread of the Omicron variant began to appear, the outlook for the global economy quickly became uncertain due to rising inflation and Russia's invasion of Ukraine in late February. Economic sanctions imposed on Russia by Western nations have created global energy supply shortages and a sudden rise in raw material prices, putting downward pressure on personal consumption.

In Europe, although the economy had been on the upswing, the acceleration of inflation caused by the worsening situation in Ukraine has weighed on consumer sentiment.

In the U.S., while there was concern about the negative impact of rising inflation on the economy, personal consumption remained steady.

In China, personal consumption was sluggish in March due to strict restrictions on activities associated with the zero-COVID strategy.

In Japan, personal consumption slowed down and the economy weakened due to stricter COVID-19 measures put in place in response to the spread of the Omicron variant.

In this environment, interest in and demand for bicycles and fishing continued to be high despite supply chain disruptions and tight logistics, and for the first quarter of fiscal year 2022, net sales increased 13.9% from the same period of the previous year to 144,047 million yen. Operating income increased 16.8% to 38,033 million yen, ordinary income increased 6.6% to 39,395 million yen, and net income attributable to owners of parent increased 0.5% to 28,740 million yen.

Reportable Segment Overview ① Bicycle Components

The global cycling boom showed signs of cooling down, with market inventories of entry-class and middle-class bicycles approaching appropriate levels, while demand centering around high-end class bicycles remained high.

In the European market, demand for bicycles and bicycle-related products remained firm as governments continued their policies to promote bicycles in response to growing environmental awareness. While demand for e-bikes remained strong, market inventories of entry-level and middle-class bicycles approached appropriate levels.

In the North American market, demand for bicycles remained firm and market inventories, centering around entry-class and middle-class bicycles, recovered to appropriate levels.

In the Asian and South and Central American markets, the cycling boom cooled off, and market inventories of entry-class bicycles remained at a slightly higher level.

In the Japanese market, while market inventories of road bikes remained at a low level due to steady demand for sport bikes, retail sales of community bicycles were sluggish, resulting in market inventories remaining at a higher level.

Under these market conditions, order-taking was brisk for a wide range of products, including the high-end models for road bikes, DURA-ACE and ULTEGRA, and sport E-BIKE components, SHIMANO STEPS series.

As a result, net sales from this segment increased 13.9% from the same period of the previous year to 118,176 million yen, and operating income increased 17.0% to 32,455 million yen.

② Fishing Tackle

Continuing from the previous year, fishing was welcomed by a wide range of users, and the fishing tackle market thrived and maintained high demand around the world.

In the Japanese market, while there were signs of a lull in the fishing boom, high demand for various fishing types continued from the previous year, and sales remained robust.

Overseas, in the North American market, while the popularity of fishing began to cool down, demand for fishing tackle remained strong, and sales remained favorable.

In the European market, sales remained strong despite the impact that the situation in Ukraine and rising inflation have had on consumer sentiment.

In the Asian market, demand for fishing tackle, mainly in the Chinese market, remained strong, and sales were solid.

In the Australian market, although sales stagnated in some areas due to heavy rain damage, sales were solid in the Australian market as a whole, partly due to active consumer behavior.

Under these market conditions, various products, including spinning reels STELLA and AEROTECHNIUM MGS, as well as the rod EXPRIDE, were well-received in the market.

As a result, net sales from this segment increased 14.1% from the same period of the previous year to 25,767 million yen, and operating income increased 14.8% to 5,564 million yen.

③ Others

Net sales from this segment increased 11.4% from the same period of the previous year to 104 million yen and operating income of 12 million yen was recorded, following an operating loss of 5 million yen for the same period of the previous year.

• (2) Financial Position

  Assets, Liabilities and Net Assets

  Total assets as of the end of the first quarter of fiscal year 2022 amounted to 723,553 million yen, an increase of 18,182 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 12,877 million yen in merchandise and finished goods, an increase of 12,462 million yen in buildings and structures, an increase of 5,676 million yen in notes and accounts receivable-trade, an increase of 3,677 million yen in investment securities, an increase of 3,560 million yen in machinery and vehicles, a decrease of 13,691 million yen in construction in progress, and a decrease of 12,041 million yen in cash and time deposits.

  Total liabilities amounted to 83,897 million yen, a decrease of 4,822 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 2,531 million yen in accounts payable-trade, and a decrease of 7,506 million yen in income taxes payable.

  Net assets amounted to 639,656 million yen, an increase of 23,004 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 26,255 million yen in foreign currency translation adjustments.

• (3) Forecast for the Fiscal Year Ending December 31, 2022

Regarding consolidated business performance forecasts, the forecasts of ordinary income for the first half and full year have been revised as follows due to the recording of impairment loss and the recording of non-operating income associated with the depreciation of Asian currencies during the first quarter of fiscal year 2022.

Revisions to consolidated business performance forecast figures for the first half of FY2022 (January 1, 2022 - June 30, 2022)

Revisions to consolidated business performance forecast figures for FY2022 (January 1, 2022 - December 31, 2022)

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