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 Nine Months of FY2023 (JGAAP)

(January 1, 2023 - September 30, 2023) [Japanese Standard] (Consolidated)

October 24, 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: +81-72-223-3254

and Supervising of Accounting Dept.

Date of filing of quarterly report to Ministry of Finance:

November 9, 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 nine months of FY2023 (January 1, 2023 - September 30, 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 nine months of FY2023

375,264

(19.8)

72,086

(43.0)

96,221

(35.8)

60,169

(47.0)

First nine months of FY2022

467,665

18.3

126,576

18.3

149,862

31.8

113,486

31.9

(Note) Comprehensive income First nine

months of FY2023: 117,059

million yen (-36.4%)

First

nine months of FY2022: 184,076 million yen (74.7%)

Basic earnings

Diluted earnings

per share

per share

Yen

Yen

First nine months of FY2023

665.35

－

First nine months of FY2022

1,245.02

－

(2) Consolidated balance sheet information

Total assets

Net assets

Shareholders' equity

ratio

Million yen

Million yen

%

First nine months of FY2023

900,347

825,551

91.6

FY2022

826,413

741,095

89.6

(Reference) Shareholders' equity First

nine months of FY2023:

824,275 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

－

142.50

－

FY2023 (Forecast)

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

FY2023

462,000

(26.5)

77,000

(54.5)

105,000

(40.5)

66,000

(48.5)

730.77

(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 nine months of

90,460,000

FY2022

91,160,100

(including treasury stock):

FY2023

shares

shares

②

Number of shares of treasury stock at period-end:

First nine months of

144,473

FY2022

531,034

FY2023

shares

shares

③

Average number of shares during the period

First nine months of

90,433,672

First nine months of

91,152,582

(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 Nine Months 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

1

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

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

  1. Results of Operations

During the first nine months of fiscal year 2023, the pace of global economic recovery was dull as the intensified turmoil persisting in Ukraine, interest rate hikes by the central banks of various countries to tame inflation, a slowdown in economic recovery in China and other factors exerted downward pressure.

In Europe, interest rate hikes eased inflation pressure, which supported in part personal consumption, but the economy remained lackluster.

In the U.S., amid the continued monetary tightening, consumer confidence started to show signs of improvement, backed by favorable employment conditions and the rise in real wages.

In China, economic activities resumed, but economic recovery was sluggish due to manifested concerns over the real estate market and a decline in personal consumption.

In Japan, normalization of economic activities progressed, and moderate economic recovery continued, supported by personal consumption and demand from inbound tourists.

In this environment, demand for bicycles and fishing tackle continued to be weak, and for the first nine months of fiscal year 2023, net sales decreased 19.8% from the same period of the previous year to 375,264 million yen. Operating income decreased 43.0% to 72,086 million yen, ordinary income decreased 35.8% to 96,221 million yen, and net income attributable to owners of parent decreased 47.0% to 60,169 million yen.

Reportable Segment Overview

  • Bicycle Components

Although the strong interest in bicycles cooled down, interest in bicycles continued to be high as a long- term trend. On the other hand, market inventories generally remained high, despite ongoing supply and demand adjustments.

Overseas, in the European market, the strong interest in bicycles continued in our major market, namely, Germany and Benelux countries, and retail sales of completed bicycles were strong. Market inventories, however, remained at high levels.

In the North American market, retail sales of completed bicycles remained weak and market inventories were at a consistently high level, despite some progress in inventory adjustment.

In the Asian, Oceanian and Central and South American markets, although interest in bicycles was firm, retail sales of completed bicycles remained somewhat sluggish due to cooling consumer confidence on account of rising inflation and economic uncertainty, and market inventories were at a high level. However, in the Chinese market, sales remained strong, especially for road bikes, owing to the continued popularity of outdoor sports cycling, and market inventories remained at an appropriate level.

In the Japanese market, retail sales were somewhat sluggish as affected by the soaring price of completed bicycles due to yen depreciation and pullbacks in consumer spending and market inventories remained somewhat high.

Under these market conditions, the Shimano Group received a favorable reception for its new products, including SHIMANO 105 equipped with a twelve-speed derailleur, and a gravel-specific component

SHIMANO GRX.

As a result, net sales from this segment decreased 24.8% from the same period of the previous year to 289,443 million yen, and operating income decreased 48.8% to 55,917 million yen.

  • Fishing Tackle

Although the global high demand for fishing tackle cooled down, interest in fishing continued as an outdoor leisure activity.

In the Japanese market, with leisure options becoming diversified, there was a decline in the number of new family users and beginners that had increased during the COVID-19 pandemic, on account of rising prices and unfavorable weather conditions, leading to sluggish sales of popularly priced products. Meanwhile, willingness to buy high-priced products was firm among long-time fishing enthusiasts.

Overseas, while sales in the North American market continued to be weak, demand remained high for high-priced products.

In the European market, demand was stable in some areas, but sales were lackluster partly due to unfavorable weather conditions in summer.

In the Asian market, sales continued to be favorable as demand was high for high-priced products in the Chinese market.

In the Australian market, assisted by favorable fishing conditions, demand for products became robust and sales were strong.

2

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

Under these market conditions, order-taking was brisk for the new spinning reels STRADIC and BB-X DESPINA, the existing spinning reels VANQUISH, and other products.

As a result, net sales from this segment increased 3.4% from the same period of the previous year to 85,472 million yen, and operating income decreased 7.3% to 16,200 million yen.

  • Others

Net sales from this segment decreased 2.5% from the same period of the previous year to 348 million yen and operating loss of 31 million yen was recorded, following an operating loss of 24 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 nine months of fiscal year 2023 amounted to 900,347 million yen, an increase of 73,933 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 81,134 million yen in cash and time deposits, an increase of 4,883 million yen in investment securities, an increase of 4,707 million yen in construction in progress, an increase of 3,770 million yen in deferred income taxes, a decrease of 18,386 million yen in notes and accounts receivable-trade, and a decrease of 8,321 million yen in work in process.
    Total liabilities amounted to 74,795 million yen, a decrease of 10,522 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 16,658 million yen in provision for product warranties, a decrease of 16,827 million yen in income taxes payable and a decrease of 9,296 million yen in accounts payable-trade.
    Net assets amounted to 825,551 million yen, an increase of 84,456 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 54,764 million yen in foreign currency translation adjustments, an increase of 17,942 million yen in retained earnings, and a decrease of 9,701 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 nine months of fiscal year 2023 where market inventories remain at a high level, but the outlook will remain uncertain. Despite such conditions, orders for the Group, which had gone through revisions in light of unfavorable weather conditions in this early spring, did not fall as much as projected, and non-operating income was recorded due to the depreciation of Asian currencies caused by the stronger U.S. dollar. Meanwhile, other factors have been also taken into account, such as the recording of provision for expenses associated with free inspection and replacement provided to certain products under a free inspection program, as loss on free inspection under extraordinary losses.

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)

450,000

70,000

93,000

69,000

763.24

Revised forecast (B)

462,000

77,000

105,000

66,000

730.77

Difference (B-A)

12,000

7,000

12,000

(3,000)

Change (%)

2.7

10.0

12.9

(4.3)

Full year results for FY2022

628,909

169,158

176,568

128,178

1,408.22

3

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

2. Consolidated Financial Statements and Primary Notes

(1) Consolidated Balance Sheets

(Millions of yen)

FY2022

First nine months of FY2023

As of Dec. 31, 2022

As of Sep. 30, 2023

Assets

Current

assets

Cash

and time

deposits

430,429

511,563

Notes and accounts receivable-trade

55,201

36,814

Merchandise and

finished

goods

79,966

80,516

Work in process

42,733

34,412

Raw

materials

and supplies

8,209

6,711

Others

12,523

13,223

Allowance for

doubtful accounts

(310)

(413)

Total

current assets

628,754

682,827

Fixed assets

Property, plant

and equipment

Buildings and

structures

(net)

77,239

78,132

Machinery and

vehicles

(net)

25,600

27,492

Land

13,936

14,269

Leased assets (net)

5,205

5,562

Construction

in progress

18,749

23,457

Others (net)

6,513

6,404

Total property, plant and equipment

147,244

155,319

Intangible assets

Goodwill

3,065

2,996

Software

10,059

10,029

Others

6,716

8,715

Total intangible assets

19,841

21,741

Investments and

other assets

Investment securities

19,694

24,578

Deferred income taxes

6,728

10,498

Net defined

benefit asset

2,645

2,529

Others

1,941

3,290

Allowance for

doubtful

accounts

(436)

(438)

Total investments and other assets

30,573

40,458

Total

fixed assets

197,659

217,519

Total assets

826,413

900,347

4

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

(Millions of yen)

FY2022

First nine months of FY2023

As of Dec. 31, 2022

As of Sep. 30, 2023

Liabilities

Current liabilities

Accounts

payable-trade

20,595

11,298

Short-term loans payable

2,151

209

Income taxes

payable

21,899

5,072

Accrued employee bonuses

3,682

4,283

Accrued

officer bonuses

198

101

Provision

for

product warranties

1,393

18,052

Others

28,688

28,087

Total current

liabilities

78,608

67,105

Long-term liabilities

Deferred

income taxes

2,522

3,167

Net defined benefit liability

1,210

1,395

Others

2,976

3,127

Total long-term liabilities

6,709

7,690

Total liabilities

85,318

74,795

Net assets

Shareholders' equity

Common stock

35,613

35,613

Capital surplus

5,640

5,640

Retained

earnings

638,141

656,083

Treasury

stock

(12,909)

(3,207)

Total shareholders' equity

666,485

694,129

Accumulated other comprehensive income

Unrealized gain (loss) on other securities

3,537

5,296

Foreign currency translation adjustments

70,085

124,849

Total accumulated other comprehensive income

73,623

130,145

Non-controlling

interests

986

1,276

Total net assets

741,095

825,551

Total liabilities

and

net assets

826,413

900,347

5

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

  1. Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income

(Millions of yen)

First nine months of FY2022

First nine months of FY2023

Jan. 1, 2022 to

Jan. 1, 2023 to

Sep. 30, 2022

Sep. 30, 2023

Net sales

467,665

375,264

Cost

of

sales

269,385

228,687

Gross

profit

198,279

146,576

Selling, general and administrative expenses

71,702

74,489

Operating income

126,576

72,086

Non-operating income

Interest income

2,878

13,773

Dividend income

479

615

Foreign exchange gains

20,934

10,227

Others

924

816

Total non-operating income

25,216

25,432

Non-operating expenses

Interest expenses

100

152

Contribution

1,100

943

Voluntary recall expenses

471

144

Others

258

57

Total non-operating expenses

1,930

1,298

Ordinary income

149,862

96,221

Extraordinary

losses

Loss

on free inspection

－

17,074

Impairment

loss

618

－

Subsidiary

restructuring loss

460

－

Loss on sales of shares of subsidiaries

98

－

Loss

on factory reconstruction

801

833

Total

extraordinary losses

1,979

17,908

Income before income taxes

147,883

78,312

Income

taxes-current

35,673

22,111

Income

taxes-deferred

(1,469)

(4,166)

Total

income

taxes

34,203

17,945

Net income

113,679

60,367

Net income attributable to non-controlling interests

193

197

Net income attributable to owners of parent

113,486

60,169

6

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

Consolidated Statements of Comprehensive Income

(Millions of yen)

First nine months of

First nine months of

FY2022

FY2023

Jan. 1, 2022 to

Jan. 1, 2023 to

Sep. 30, 2022

Sep. 30, 2023

Net income

113,679

60,367

Other comprehensive income

Unrealized gain (loss) on other securities

(981)

1,758

Foreign currency translation adjustments

71,378

54,934

Total other comprehensive income

70,396

56,692

Comprehensive income

184,076

117,059

(Breakdown)

Comprehensive income attributable to owners of parent

183,707

116,692

Comprehensive income attributable to non-controlling interests

368

367

7

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

(3) Notes relating to Consolidated Financial Statements

(Note concerning Assumption of Going Concern) Not applicable.

(Note on Significant Change in the Amount of Shareholders' Equity) (Acquisition of treasury stock)

The Company acquired 227,600 shares of common stock on March 14, 2023 through Off-auction Own Share Repurchase Trading (ToSTNeT-3) on the Tokyo Stock Exchange, based on the resolution of the Board of Directors meeting held on April 26, 2022, and acquired 88,000 shares of common stock on August 9, 2023 through Off-auction Own Share Repurchase Trading (ToSTNeT-3) on the Tokyo Stock Exchange, based on the resolution of the Board of Directors meeting held on April 25, 2023. As a result, treasury stock increased by 6,784 million yen during the first nine months of fiscal year 2023, including the increase due to acquisition of fractional shares.

(Cancellation of treasury stock)

The Company canceled 700,100 shares of treasury stock on May 2, 2023 based on the resolution of the Board of Directors meeting held on April 25, 2023. As a result, retained earnings and treasury stock decreased by 16,429 million yen and 16,429 million yen, respectively, during the first nine months of fiscal year 2023.

8

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Shimano Inc. published this content on 23 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 November 2023 14:08:49 UTC.