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Innovation and transformation are not necessarily the prerogative of digital start-ups. Venerable grandmothers also help shape the economic world. This is the case of Fanuc, which gives us the opportunity to travel to Asia and put our suitcases in Japan, at the foot of Mount Fuji. Fanuc is the acronym for Fuji Automatic Numerical Control. The company founded in 1956, hence the aforementioned “grandmother”, is known for its robots with a beautiful bright yellow color, visible on production lines installed in the four corners of the world.
The key to Fanuc’s success is serialization. Most of the time, the Japanese leaves it to others to take care of the made-to-measure market: it focuses on ready-to-wear. But robust, functional and reliable ready-to-wear. This is the trademark that has allowed it to take the first place in the world in the sector, and to keep it. This philosophy has led to an evolution almost sewn with white thread: now at Fanuc, robots make robots. But it would be wrong to restrict the qualities of the company to the very relative rusticity of its products. To succeed with standardized systems, you have to listen to your customers. This is one of the other strengths of the Japanese: it is renowned for its after-sales service and for taking into account the needs of manufacturers who trust it.
This well-oiled mechanism makes it possible to display breathtaking financial performance. While the 35% operating margins that were the norm at the start of the previous decade no longer apply, they remain above 20% today. It is all the more remarkable that Fanuc tends to sell a little less than the competition, thanks to the savings generated by serialization, precisely. The balance sheet harbors a colossal war chest in the form of net cash of nearly $4.4 billion, which management tends to let sit for lean times. Purists, however, see this as a sub-optimal allocation of resources.
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Dario Ingiusto / L’Express
Revenue comes from four activities. The AM division (27% of revenue) provides basic control systems (CNC) to automate factory processes. The Robot division (38% of sales) sells robotic arms that perform CNC instructions. The Robomachine division (21% of sales) offers compact production machines, again linked to the CNC. The balance of income (14%) comes from services, mainly maintenance, adaptation and after-sales service. Geographically, the Americas represent 22%, Europe 15.5%, Japan 15% and Asia excluding China 13.8%.
Fanuc remains very Sino-dependent with around a third of sales made in this country. As a result, the company has enjoyed impressive leverage over the past fifteen years, with a staggering pace of robot deployment in the Middle Kingdom. You should know that around 3.5 million industrial robots were installed in the world at the end of 2021 and that China drains a huge share of new equipment. Rather between 30 and 35% over the last ten years, but more than 50% in 2021, a record year with 517,000 robots deployed on the planet. Fanuc’s performance is therefore closely correlated with that of China, where there are 246 robots for 10,000 employees, compared to 932 in South Korea and 371 in Germany, two industrial benchmarks. On the battery side, the equipment potential is still substantial. On the face side, the United States seeks to undermine the productive influence of Beijing, which creates a point of vigilance.
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Dario Ingiusto / L’Express
Despite Fanuc’s undeniable qualities, his stock market career has been bumpy. In recent years, it has moreover tended to follow the Chinese equity markets rather than the Japanese domestic indices, for the reason that has just been explained. But the company remains a sector flagship that benefits from a powerful underlying trend, robotization.
