High-income company Keyence’s salary increase will be modest – operating profit declines for the first time in three quarters – Bloomberg

The company is known as one of Japan’s leading high-paying companies, as there is a growing momentum for salary increases amid rising prices, such as a series of record-level wage hikes at major companies during this year’s spring labor union. Pay increases for Keyence employees are likely to be modest. This is because the company has a system of pay and bonuses linked to business performance, and operating profit decreased for the first time in three years in the previous fiscal year.

Hiroaki Yamamoto, manager of Keyence’s management information department, was asked about his thoughts on wage increases at a financial results conference at the Osaka Exchange on the 25th, and said that the company has adopted a pay system that is linked to business performance, and that it does not mean that it is ignoring price increases. expressed the view that it is “most important” to provide incentives for improving performance.

According to the financial results announced by Keyence on the same day, operating profit for the previous fiscal year (ending March 2024) decreased by 0.8% from the previous fiscal year to 495 billion yen, the first decrease in three quarters. There was a sense of caution in capital investment domestically, and sales in Japan decreased by 1% compared to the previous quarter. Overseas, capital investment in Europe and the United States remained steady, but economic weakness was seen in Asia. Consolidated sales and net income reached record highs.

Keyence is a highly profitable company with an operating profit margin of over 50%. It ranks fifth among domestic companies in terms of market capitalization and stands out in terms of salary levels. According to the securities report, as of March 2023, the average annual salary of the company’s 2,788 employees was approximately 22.8 million yen, an increase of 4.4% from the previous year. This is about 1.6 times higher than 10 years ago. The figures as of March this year are expected to be included in the previous fiscal year’s securities report, which is usually published around June.

Bloomberg Intelligence analyst Takeshi Kitaura said in a report dated March 7 that Keyence’s salary levels may decline in the short term due to sluggish business growth and personnel increases due to the current deterioration in business conditions. This can be seen as a constructive increase in personnel with an eye toward the future.”

KEYENCE is a factory automation (FA) company that contributes to the automation of production processes, such as sensors and image processing systems. We handle a wide range of related products.We do not have our own factory, and approximately 70% of our products are unique, such as the first in the world or the industry. By establishing a business model, we will maintain high profitability even in the manufacturing industry. President Yu Nakata said at a press conference, “We’re constantly trying to set new record highs and surpass what we did last year.”

Regarding shareholder return policy, the company stated that its first basic policy is to continue paying stable dividends, adding, “We will continue to pay stable dividends in accordance with that policy.” I want to,” he said.

According to President Nakata, while some shareholders have called for increased shareholder returns, many have also asked for the company to continue working hard to grow the company. “For us, expanding our business is the most important thing.” I’ll leave this as a key point.”

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