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Shimano 2005 Figures Down, But Realistic

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MAARSSEN, Netherlands (Feb 20) -– There is a time for everything, a time to grow, and a time for standstill. In the case of Shimano financial results, it is now time for standstill. After the enormous growth in 2004 (21,4% on 2003) it would have been easy to expect this boom to continue. But, as […]

MAARSSEN, Netherlands (Feb 20) -– There is a time for everything, a time to grow, and a time for standstill. In the case of Shimano financial results, it is now time for standstill. After the enormous growth in 2004 (21,4% on 2003) it would have been easy to expect this boom to continue. But, as the demand for components easily outstripped the demand for complete bikes, it was clear that something was wrong – and Shimano took the wise route of not adjusting production to the rampant demand of the day.

And quite rightly so, as around the middle of 2005 it was becoming clearer and clearer that this boost in demand was already drying up. For 2005, in total, a decrease in 16% in profit is marked in the figures – but still the company has a net profit of US$ 139 million after taxes. Turnover is € 1,24 billion, just 0.8% below 2004. Reason for this is that the other divisions of Shimano are doing above average. The bike division suffered 3.1% on it’s own. The fishing side of the business showed a plus of 7.2 %, or € 294,99 million, effectively flattering the overall figures for 2005.

But it would have been a bit to rosy to expect the 2004, 58.5% growth to keep up – it was simply too exaggerated. Now, we can relax in the security of ‘back to normal’, as the risk of Shimano coming down hard after the ’04 high is gone: 2005 was a a soft descend. A planned descend as well, as the company had revised it’s forecasts twice during the year, avoiding sudden impact on the stock exchange.

Competition from other producers, mainly Chinese, and increased material costs are quoted as well as reasons for the current results, as well as the costs involved in closing the factory in Italy.

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