The setback of Shimano in 2023: over 17 million in costs for the replacement program and 52% less profits
The horrible year of Shimano has been confirmed, as they have just presented the results for 2023 which reflect a significant drop in their income, aggravated by cases such as the massive recall due to defective road bike cranks, which have also dealt a major blow to the brand's global image.
Cold shower for Shimano after the release of their 2023 results
At a time when large companies are making public the economic results for the 2023 fiscal year, in the cycling world many were waiting to hear from Shimano, the giant of cycling components upon whose fate largely depends what happens to the rest of the market.
Already with the third quarter accounts in hand, a storm was brewing, accounts that at that time showed a 25% drop in global sales, which rose to 50% if we only looked at the European market. This was attributed to the end of the cycling boom caused by the end of the pandemic.
RECOMENDADO
Now, we can see the full picture of 2023, which translates into a halving of profits from the previous year and a drop in sales figures of 24.6%, resulting in a 25% reduction in income.
These results continue to be attributed to the cooling of the cycling market as well as other factors such as the inflationary situation mainly experienced in Europe, in addition to the excess supply in response to the bottlenecks experienced during and after the pandemic, which in some cases led to almost a shortage of certain components and consumables.
This culminates Shimano's annus horribilis, as a large part of its profits were spent on a gigantic recall of some models of hollowtech cranks that had been suffering unexplained breakages for years and that the brand has finally had to face. A recall that has resulted in expenses of more than 17 million euros.
In any case, these are results that partly anticipated the forecasts that the brand made at the beginning of the year, and their forecast predicted a 21% drop in sales, so the brand was already anticipating what was coming and would have made the necessary adjustments to deal with this unfavorable situation. More importantly, what happens to a giant like Shimano largely sets the trend for the bike market, so the rest of the companies in the sector are already aware that lean times are coming back.