Keyence’s operating profit margin now exceeds 50%. Its rip-roaring success is something of a riddle
Save time by listening to our audio articles as you multitaskAs automation takes hold of industrial bosses’ imagination, they are willing to pay handsomely for Keyence’s services, which include designing clever kit and helping clients integrate it into their operations. Its revenues have nearly trebled since the early 2010s, to $6.7bn.
Keyence is none of these. Regulators mostly ignore its market. It is “fabless”, dreaming up its gizmos but outsourcing their production to contract manufacturers; its capital spending is negligible and it devotes barely 2-3% of revenue to research and development, compared with around 9% for. And its designs are bespoke, and as such would seem to benefit less from economies of scale. You can think of it as the management consultant to the world’s factories.
Keyence’s second trump card is its approach to personnel. Even by Japanese standards, working for the company is regarded as a relentless slog. But the sales engineers are compensated handsomely for their dual roles. The average salary it paid in the last financial year was ¥22m . It regularly ranks as the country’s highest-paying large company, above banks and other financial firms.
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