Consolidated Financial Results for the First Half of FY2025 (JGAAP)

‌(January 1, 2025 -June 30, 2025) July 29, 2025

(Amounts are rounded down to the nearest million yen.)

1. Consolidated financial results for the first half of FY2025 (January 1, 2025 - June 30, 2025)

   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 half of FY2025	237,409	9.5	28,123	(9.2)	14,038	(74.8)	3,961	(90.9)
      First half of FY2024	216,887	(17.6)	30,955	(42.6)	55,625	(18.7)	43,704	(13.2)

      (Note) Comprehensive income First half of FY2025: (12,945) million yen (-%) First half of FY2024: 109,195 million yen (15.4%)

      	Basic earnings per share	Diluted earnings per share
      	Yen	Yen
      First half of FY2025	44.90	-
      First half of FY2024	487.49	-

   2. Consolidated balance sheet information

   	Total assets	Net assets	Shareholders' equity ratio
   	Million yen	Million yen	%
   First half of FY2025	903,793	826,763	91.4
   FY2024	958,953	883,613	92.0

   (Reference) Shareholders' equity First half of FY2025: 825,765 million yen FY2024: 882,397 million yen

2. Dividend information

   	Dividend per share
   	1st Quarter	2nd Quarter	3rd Quarter	Year-end	Total
   	Yen	Yen	Yen	Yen	Yen
   FY2024	-	154.50	-	154.50	309.00
   FY2025	-	169.50
   FY2025 (Forecast)			-	169.50	339.00

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

3. Forecasted consolidated business performance for FY2025 (January 1, 2025 - December 31, 2025)

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

‌(Note) Change in forecasted consolidated business performance during the period: Yes

‌*Notes

‌Semi-annual financial results reports are exempt from review conducted by certified public accountants or an audit firm.

‌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 4 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. Overview of Business Results 2

   1. Overview of Operations for the Period under Review 2

   2. Overview of Financial Position for the Period under Review 3

   3. Forecast for the Fiscal Year Ending December 31, 2025 4

2. Consolidated Financial Statements and Primary Notes 5

   1. Consolidated Balance Sheets 5

   2. Consolidated Statements of Income and Comprehensive Income 7

   3. Consolidated Statements of Cash Flows 9

   4. Notes relating to Consolidated Financial Statements 10

(Note concerning Assumption of Going Concern) 10

(Note on Significant Change in the Amount of Shareholders' Equity) 10

(Note on Changes in Accounting Policies) 10

(Note on Segment Information) 11

1. Overview of Business Results

   1. ‌Overview of Operations for the Period under Review

      During the first half of fiscal year 2025, the global economy maintained a moderate recovery. However, the outlook remained uncertain due to the impact of factors such as trade policies around the world, prolonged conflicts in Ukraine and the Middle East, and a slowdown in the Chinese economy.

      In Europe, personal consumption was strong as the pressure of inflation subsided, and the economy continued to grow moderately.

      In the U.S., the economy showed signs of weakness amid the cooling of consumer sentiment due to changes in trade policies.

      In China, the economic recovery remained lackluster, mainly due to the impact of the prolonged recession in the real estate sector and a slump in personal consumption.

      In Japan, the economy maintained a moderate recovery, with robust demand from inbound tourists and improvements in the employment and income environment.

      In this environment, interest in bicycles and fishing tackle continued, and for the first half of fiscal year 2025, net sales increased 9.5% from the same period of the previous year to 237,409 million yen. Operating income decreased 9.2% to 28,123 million yen, ordinary income decreased 74.8% to 14,038 million yen, partly due to valuation loss on foreign exchange, and net income attributable to owners of parent decreased 90.9% to 3,961 million yen.

      ‌Reportable Segment Overview

      ‌① Bicycle Components

      While the strong interest in bicycles continued as a long-term trend, market inventories remained high in

      some regions and inventory adjustments continued.

      Overseas, in the European market, retail sales of completed bicycles were robust thanks to favorable weather conditions in early spring, and market inventories decreased but still remained at a somewhat high level.

      In the North American market, retail sales of completed bicycles remained weak, but market inventories maintained appropriate levels.

      In the Asian and Central and South American markets, although retail sales of completed bicycles remained somewhat weak as personal consumption continued to be sluggish, market inventories approached an appropriate level. In the Chinese market, while interest in cycling as a sport remained firm, the adjustment continued in market inventories, which have remained at a somewhat high level.

      In the Japanese market, market inventories remained at appropriate levels, but retail sales were sluggish due to the soaring price of completed bicycles.

      Under these market conditions, the Shimano Group's products were well received, including XTR, a high-end model of renewed component for mountain bikes, as well as the DEORE XT and DEORE series, and Q'AUTO, which features self-powered automatic gear-shifting system.

      As a result, net sales from this segment increased 11.6% from the same period of the previous year to 181,424 million yen, and operating income decreased 2.9% to 23,631 million yen.

      ‌② Fishing Tackle

      While the interest in fishing tackle continued, sales remained weak but adjustments of market inventories

      made progress.

      In the Japanese market, although adjustments of market inventories progressed, sales remained weak due to a slump in personal consumption as a result of price hikes.

      Overseas, in the North American market, sales remained at the same level as the previous year and market inventories remained at an appropriate level.

      In the European market, sales were strong, helped by favorable weather, and market inventories maintained an appropriate level.

      In the Asian market, inventory adjustments showed signs of easing mainly in China, and sales were firm. In the Australian market, sales were strong and market inventories remained at an appropriate level,

      supported by stable fishing conditions.

      Under these market conditions, the new spinning reels ULTEGRA and the new baitcasting reels ANTARES were well-received in the market. In addition, order-taking continued to be brisk for the baitcasting reels METANIUM DC and the rods EXPRIDE.

      As a result, net sales from this segment increased 3.1% from the same period of the previous year to 55,751 million yen, and operating income decreased 32.4% to 4,493 million yen.

      ‌③ Others

      Net sales from this segment increased 4.9% from the same period of the previous year to 233 million yen

      and operating loss of 1 million yen was recorded, following an operating loss of 24 million yen for the same period of the previous year.

   2. ‌Overview of Financial Position for the Period under Review Assets, Liabilities and Net Assets

      Total assets as of the end of the first half of fiscal year 2025 amounted to 903,793 million yen, a decrease of 55,159 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 10,112 million yen in construction in progress, an increase of 6,450 million yen in notes and accounts receivable-trade, an increase of 1,321 million yen in investment securities, a decrease of 70,535 million yen in cash and time deposits, a decrease of 2,150 million yen in machinery and vehicles, and a decrease of 1,235 million yen in raw materials and supplies.

      Total liabilities amounted to 77,030 million yen, an increase of 1,690 million yen compared with the figure as of the previous fiscal year-end. The principal factors included an increase of 3,037 million yen in others under current liabilities, an increase of 630 million yen in accounts payable-trade, a decrease of 886 million yen in deferred income taxes, a decrease of 681 million yen in accrued employee bonuses, and a decrease of 657 million yen in provision for product warranties under long-term liabilities.

      Net assets amounted to 826,763 million yen, a decrease of 56,850 million yen compared with the figure as of the previous fiscal year-end. The principal factors included a decrease of 39,694 million yen in retained earnings and a decrease of 17,601 million yen in foreign currency translation adjustments.

      Cash Flows

      As of the end of the first half of fiscal year 2025, cash and cash equivalents amounted to 458,743 million yen, a decrease of 71,566 million yen compared with the figure as of the previous fiscal year-end.

      (Cash Flows from Operating Activities)

      Net cash provided by operating activities amounted to 31,512 million yen compared with 52,458 million yen provided for the same period of the previous year. The main cash inflows included foreign exchange losses (gains) amounting to 19,957 million yen, income before income taxes amounting to 14,017 million yen, depreciation and amortization amounting to 13,087 million yen, and interest and dividend income received amounting to 10,043 million yen. The main cash outflows included income taxes paid amounting to 10,522 million yen, interest and dividend income amounting to 9,269 million yen, and notes and accounts receivable amounting to 7,141 million yen.

      (Cash Flows from Investing Activities)

      Net cash used in investing activities amounted to 26,720 million yen compared with 15,845 million yen used for the same period of the previous year. The main cash outflows included acquisition of property, plant and equipment amounting to 20,636 million yen and acquisition of intangible assets amounting to 4,328 million yen. (Cash Flows from Financing Activities)

      Net cash used in financing activities amounted to 44,503 million yen compared with 29,393 million yen used for the same period of the previous year. The main cash outflows included acquisition of treasury stock amounting to 30,019 million yen and cash dividends to shareholders amounting to 13,756 million yen.

   3. ‌Forecast for the Fiscal Year Ending December 31, 2025

   The consolidated business performance forecasts for fiscal year 2025 have been revised as shown below in light of the anticipated continuation of inventory adjustments in the Chinese market, leading to expected drop in profit margin due to an increase in expenses in a phase of production adjustments at factories, and an increase in non-operating expenses including foreign exchange losses associated with the appreciation of Asian currencies caused by the weaker U.S. dollar in the first half of fiscal year 2025.

   Revisions to consolidated business performance forecast figures for the FY2025 (January 1, 2025 - December 31, 2025)

   	Net sales	Operating income	Ordinary income	Net income attributable to owners of parent	Basic earnings per share
   Previous forecast (A)	Million yen	Million yen	Million yen	Million yen	Yen
   	470,000	70,000	88,250	63,800	722.68
   Revised forecast (B)	460,000	46,000	49,300	30,500	347.97
   Difference (B-A)	(10,000)	(24,000)	(38,950)	(33,300)
   Change (%)	(2.1)	(34.3)	(44.1)	(52.2)
   Full year results for FY2024	450,993	65,085	98,674	76,329	853.36

   The Company considers the return of earnings to shareholders to be one of the most important issues for management. The Company's basic policy is to continue providing stable returns reflecting overall business performance and strategy. Pursuant to this policy, the Company will strive to improve shareholder returns to reach a total return ratio of at least 50%, by continuing to enhance dividends and engaging in acquisitions of treasury stock on a flexible, ongoing basis.

   In accordance with the above policy, as announced in February 2025 (forecast), the Company decided to pay out interim cash dividends of 169.50 yen per share for fiscal year 2025, an increase of 15 yen per share from the same period of the previous year. In addition, the year-end cash dividends will also be 169.50 yen per share, resulting in the cash dividends forecast for the full year of fiscal year 2025 amounting to 339 yen per share.

2. ‌Consolidated Financial Statements and Primary Notes

1. ‌Consolidated Balance Sheets

   		(Millions of yen)
   FY2024 As of Dec. 31, 2024		First half of FY2025 As of Jun. 30, 2025
   Assets
   Current assets
   Cash and time deposits	534,045	463,510
   Notes and accounts receivable-trade	39,902	46,352
   Merchandise and finished goods	73,683	74,497
   Work in process	39,044	38,770
   Raw materials and supplies	7,914	6,679
   Others	17,265	17,858
   Allowance for doubtful accounts	(395)	(447)
   Total current assets	711,461	647,222
   Fixed assets
   Property, plant and equipment
   Buildings and structures (net)	80,844	79,924
   Machinery and vehicles (net)	31,176	29,025
   Land	15,117	15,469
   Leased assets (net)	5,649	5,498
   Construction in progress	44,624	54,737
   Others (net)	5,297	5,911
   Total property, plant and equipment	182,708	190,566
   Intangible assets
   Goodwill	1,661	1,509
   Software	13,424	14,022
   Others	9,874	10,277
   Total intangible assets	24,960	25,809
   Investments and other assets
   Investment securities	25,892	27,213
   Deferred income taxes	8,382	8,406
   Net defined benefit asset	2,900	2,501
   Others	3,097	2,520
   Allowance for doubtful accounts	(450)	(448)
   Total investments and other assets	39,822	40,194
   Total fixed assets	247,491	256,570
   Total assets	958,953	903,793

   (Millions of yen)

   FY2024 As of Dec. 31, 2024		First half of FY2025 As of Jun. 30, 2025
   Liabilities
   Current liabilities
   Accounts payable-trade	16,111	16,741
   Income taxes payable	9,803	9,877
   Accrued employee bonuses	3,479	2,797
   Accrued officer bonuses	160	80
   Provision for product warranties	1,173	1,421
   Others	25,074	28,111
   Total current liabilities	55,802	59,029
   Long-term liabilities
   Deferred income taxes	3,018	2,131
   Net defined benefit liability	1,310	1,315
   Provision for product warranties	12,151	11,493
   Others	3,057	3,059
   Total long-term liabilities	19,537	18,000
   Total liabilities	75,339	77,030
   Net assets
   Shareholders' equity
   Common stock	35,613	35,613
   Capital surplus	5,640	5,640
   Retained earnings	675,370	635,676
   Treasury stock	(1,186)	(1,245)
   Total shareholders' equity	715,438	675,685
   Accumulated other comprehensive income
   Unrealized gain (loss) on other securities	7,139	7,861
   Foreign currency translation adjustments	159,819	142,218
   Total accumulated other comprehensive income	166,958	150,079
   Non-controlling interests	1,215	998
   Total net assets	883,613	826,763
   Total liabilities and net assets	958,953	903,793

   		(Millions of yen)
   First half of FY2024 Jan. 1, 2024 to Jun. 30, 2024		First half of FY2025 Jan. 1, 2025 to Jun. 30, 2025
   Net sales	216,887	237,409
   Cost of sales	132,949	150,772
   Gross profit	83,937	86,636
   Selling, general and administrative expenses	52,981	58,513
   Operating income	30,955	28,123
   Non-operating income
   Interest income	12,027	8,673
   Dividend income	346	596
   Foreign exchange gains	13,096	-
   Others	422	573
   Total non-operating income	25,893	9,842
   Non-operating expenses
   Interest expenses	53	53
   Contribution	525	601
   Foreign exchange losses	-	21,690
   Voluntary recall expenses	258	206
   Others	385	1,376
   Total non-operating expenses	1,222	23,927
   Ordinary income	55,625	14,038
   Extraordinary losses
   Loss on factory reconstruction	63	20
   Total extraordinary losses	63	20
   Income before income taxes	55,562	14,017
   Income taxes-current	12,173	10,839
   Income taxes-deferred	(481)	(803)
   Total income taxes	11,691	10,036
   Net income	43,870	3,981
   Net income attributable to non-controlling interests	166	20
   Net income attributable to owners of parent	43,704	3,961

2. ‌Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income‌

   ‌Consolidated Statements of Comprehensive Income

   		(Millions of yen)
   First half of FY2024 Jan. 1, 2024 to Jun. 30, 2024		First half of FY2025 Jan. 1, 2025 to Jun. 30, 2025
   Net income	43,870	3,981
   Other comprehensive income
   Unrealized gain (loss) on other securities	2,404	722
   Foreign currency translation adjustments	62,920	(17,649)
   Total other comprehensive income	65,324	(16,927)
   Comprehensive income	109,195	(12,945)
   (Breakdown)
   Comprehensive income attributable to owners of parent	108,952	(12,917)
   Comprehensive income attributable to non-controlling interests	242	(28)

3. ‌Consolidated Statements of Cash Flows

   		(Millions of yen)
   First half of FY2024 Jan. 1, 2024 to Jun. 30, 2024		First half of FY2025 Jan. 1, 2025 to Jun. 30, 2025
   Cash flows from operating activities:
   Income before income taxes	55,562	14,017
   Depreciation and amortization	12,645	13,087
   Loss on free inspection	1,511	623
   Interest and dividend income	(12,373)	(9,269)
   Interest expenses	53	53
   Foreign exchange losses (gains)	(9,620)	19,957
   Notes and accounts receivable	(8,006)	(7,141)
   Inventories	5,105	(2,048)
   Accounts payable	3,837	1,049
   Net defined benefit asset	204	398
   Net defined benefit liability	35	73
   Loss on factory reconstruction	63	20
   Provision for product warranties	(1,618)	280
   Loss on sales and disposal of property, plant and equipment	22	23
   Accrued bonuses	2,325	2,628
   Others, net	(2,094)	(1,168)
   Subtotal	47,653	32,585
   Interest and dividend income received	13,172	10,043
   Loss on free inspection paid	(1,418)	(541)
   Interest expenses paid	2	(53)
   Income taxes paid	(6,951)	(10,522)
   Net cash provided by operating activities	52,458	31,512
   Cash flows from investing activities:
   Purchases of time deposits	(1,601)	(2,363)
   Proceeds from maturities of time deposits	9,659	1,108
   Acquisition of property, plant and equipment	(19,253)	(20,636)
   Acquisition of intangible assets	(4,738)	(4,328)
   Payments for loss on factory reconstruction	(77)	(21)
   Others, net	164	(478)
   Net cash used in investing activities	(15,845)	(26,720)
   Cash flows from financing activities:
   Repayments of lease obligations	(600)	(641)
   Acquisition of treasury stock	(16,009)	(30,019)
   Cash dividends to shareholders	(12,829)	(13,756)
   Cash dividends to non-controlling shareholders	(8)	(151)
   Others, net	55	65
   Net cash used in financing activities	(29,393)	(44,503)
   Effect of exchange rate changes on cash and cash equivalents	55,150	(31,854)
   Net increase (decrease) in cash and cash equivalents	62,371	(71,566)
   Cash and cash equivalents at beginning of year	481,982	530,310
   Cash and cash equivalents at end of year	544,353	458,743

4. ‌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 1,417,700 shares of common stock from February 13, 2025 to June 30, 2025 through market purchases, including 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 February 12, 2025. As a result, treasury stock increased by 30,016 million yen during the first half of fiscal year 2025, including the increase due to acquisition of fractional shares.

(Cancellation of treasury stock)

The Company canceled 1,410,000 shares of treasury stock on May 1, 2025 based on the resolution of the Board of Directors meeting held on April 23, 2025. As a result, retained earnings and treasury stock decreased by 29,892 million yen and 29,892 million yen, respectively, during the first half of fiscal year 2025.

‌(Note on Changes in Accounting Policies)

("Application of Accounting Standard for Current Income Taxes," etc.)

The Company has applied the "Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28, 2022; hereinafter referred to as the "Revised Accounting Standard 2022") from the beginning of the first half of fiscal year 2025.

Revisions to categories for recording current income taxes, etc. (taxation on other comprehensive income), conform to the transitional treatment set forth in the proviso to Paragraph 20-3 of the Revised Accounting Standard 2022 and the transitional treatment set forth in the proviso to Paragraph 65-2 (2) of the "Guidance on Accounting Standard for Tax Effect Accounting" (ASBJ Guidance No. 28, October 28, 2022; hereinafter referred to as the "Revised Guidance 2022"). This change in accounting policies has no impact on the semi-annual consolidated financial statements.

In addition, for amendments related to the revised accounting treatment for consolidated financial statements when gains or losses on the sale of shares, etc. in subsidiaries resulting from transactions between consolidated subsidiaries are deferred for tax purposes, the Revised Guidance 2022 has been applied from the beginning of the first half of fiscal year 2025. This change in accounting policies is applied retrospectively, and the semi-annual consolidated financial statements for the first half of the previous fiscal year and the consolidated financial statements for the previous fiscal year reflect the retroactive application.

This change in accounting policies has no impact on the semi-annual consolidated financial statements for the first half of the previous fiscal year or on the consolidated financial statements for the previous fiscal year.

‌(Note on Segment Information)

First half of FY2024 (Jan. 1, 2024 - Jun. 30, 2024)

Information on net sales and income (loss) by reportable segment and disaggregation of revenue

(Millions of yen)

Notes: 1. There is no difference between total segment income (loss) and operating income in the consolidated statements of income.

2. Net sales includes revenue from contracts with customers and other revenue; however, most of the revenue is generated from contracts with customers, therefore other revenue is not deemed important and is thus not displayed separately.

First half of FY2025 (Jan. 1, 2025 - Jun. 31, 2025)

Information on net sales and income (loss) by reportable segment and disaggregation of revenue

(Millions of yen)

Notes: 1. There is no difference between total segment income (loss) and operating income in the consolidated statements of income.

2. Net sales includes revenue from contracts with customers and other revenue; however, most of the revenue is generated from contracts with customers, therefore other revenue is not deemed important and is thus not displayed separately.