Japanese business in Europe

Sony Interactive Entertainment to cut jobs and studios in Europe and globally

Sony Group has announced that it will cut approximately 900 jobs, or 8% of Sony Interactive Entertainment’s workforce. The company will reduce the number of employees working at its game development studios in all regions of the world, including Europe, America, Japan, and the Asia-Pacific region.

The layoffs affect a number of PlayStation studios, including Insomniac, Naughty Dog, Guerrilla, Firesprite, and it seems likely PlayStation’s London studio will be closed, following consultation.

London based Newcastle born Sony Interactive Entertainment boss Jim Ryan called it a “difficult day at our company.” He announced his retirement last year, citing the difficulties of living in Europe and working in the USA.

Sony Group’s game business has annual sales of over 4 trillion yen, making it the largest business in terms of sales. However, sales of game consoles are currently sluggish, and profitability declining due to rising development costs. The plan was to sell 25 million units of the PlayStation 5 home game console in the fiscal year ending March 2024, but this was revised downward to 21 million units on February 14th.

This news come during one of the most difficult periods the game industry has ever faced, with mass layoffs throughout 2023 and continuing into 2024.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Mitsui Sumitomo Insurance Group to double UK underwriting

Mitsui Sumitomo Insurance Group acquired Amlin (now MS Amlin) in 2016 for £3.2bn but fell into the red since due to a series of natural disasters. The company has shed around 500 employees in the UK since, and now employs around 856 people. It also has operations in France, Singapore, Netherlands and Belgium.

Its latest medium-term plan through to March 2026 shows that it seeks to generate about 30% of group profit from overseas markets, triple the roughly 10% share in the previous financial year ended March 2023. It has strengthened risk management and governance at MS Amlin and has set a goal of nearly doubling insurance underwriting capacity in the next five years through Lloyds.

Mitsui Sumitomo Insurance Group currently has two foreign nationals in executive officer positions and intends to “increase the weight of foreign executives” to bolster management in Western regions, says CEO Funabiki. Philip Hammond, the former British Chancellor of the Exchequer now serves as a senior adviser to Mitsui Sumitomo Insurance.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Fast Retailing to expand in Europe

Fast Retailing, the owner of the Uniqlo brand, is intending to launch its sister brand GU in Europe. GU is pronounced ji-yuu, which means freedom in Japanese. It is aimed at the 10 to 30 year old age bracket, and is slightly cheaper than the Uniqlo brand. GU already opened a pop-up store in New York City’s SoHo district in 2022. It is also intending to open 10 new Uniqlo stores a year in Europe.

Fast Retailing currently has 115 stores in Europe, of which 54 are Uniqlo – 27 in France and 17 in the UK, with the rest in Spain, Sweden, Belgium, Netherlands, Denmark, Italy and Luxembourg. Uniqlo employs over 3,700 people in the region.  The other Fast Retailing brands are Theory, Helmut Lang, Comptoir des Cotonniers and Princesse tam tam.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Japanese companies whose stock prices have increased by more than fortyfold since Japan’s stock market peak in 1989 – are they in Europe?

The Nikkei has just published a list of Japanese companies whose stock price increased tenfold or more over the past 34 years. Many are in advanced technology manufacturing, food, retail and digital services and with a few exceptions, their overseas expansion, if any, has not included Europe. Foreign investors were keen to support rapidly growing, lesser known companies – the Nikkei article specifically mentions Baillie Gifford’s Shin Nippon Trust, as it was started during Japan’s Bubble Era, in 1985. Shin Nippon’s share price has increased fivefold since 1989.  The top 20 below have all seen their share prices rise by fortyfold or more since 1989.

At number one is Zensho, a food, catering and restaurant company – their share price is 236 times higher than it was in 1989. It has ambitions to be the world’s number one food company and acquired Snowfox in the UK in 2023. Snowfox owns Taiko, who make sushi for Waitrose and Sainsburys and also owns the YO! Sushi restaurant chain, as well as chains in the USA and Canada. As a consequence Zensho is now the third largest Japan owned company in the UK.

Lasertec is in second place with its share price increasing by a multiple of 176 since 1989. It designs, manufactures and sells semiconductor-related devices and other devices. It has subsidiaries in Asia and the USA but not in the EMEA region.

Third is Line Yahoo – LINE is a messaging app, and recently merged with Yahoo Japan. There is a Line Euro-Americas Corp in Los Angeles, which had a partnership with Telefonica in 2014, and subsidiaries in Asia, but apart from that, not much operationally in EMEA.

Fast Retailing, the owner of Uniqlo is at 4, and of course has many outlets across Europe employing around 3,700 people.

Pan Pacific International in fifth place is the owner of the famous Don Quijote (known as Donki) discount store. Apart from the name, it does not undertake much European activity. There are Donki shops in Asia and USA (Hawaii) and Pan Pacific also owns the Californian supermarket chain store Gelsons.

Nitori Holdings at #6 is a furniture store chain – outlets in Asia but nowhere else overseas.

CyberAgent at #7 covers media business, game business, Internet advertising business and investment development business – and has subsidiaries in Asia and the USA but as far as we are aware has not been active in Europe.

Keyence – who develop and manufacture equipment and solutions for factory automation, sensors, measuring instruments, vision systems, barcode readers, laser markers and digital microscopes is at #8 with over a 1,000 employees in Europe – over 600 in Germany and regional headquarters in Belgium.

Harmonic Drive‘s regional headquarters are in Germany (the result of an acquisition), employing over 300 people, with a sales operations in the UK. It engineers and manufactures precision servo actuators, gearheads and gear component sets. #9

Disco, a manufacturer of semiconductor equipment and precision tools, also has its regional headquarters in Germany, with operations in the UK, France and Morocco. #10

11. Adastria – a clothing retailer – in Asia.

12. MonotaRO – e-commerce company of industrial supply products – subsidiaries in South Korea, Indonesia, India

13. Kobe Bussan – a food company with subsidiaries in Egypt, Myanmar and China

14. CTS – Construction Total Support Service

15. Systena – total solutions and services from system planning and design to development, introduction, maintenance and user support

16. Rorze – subsidiaries in Germany, Asia, USA. Development, manufacture and sale of motor control equipment, semiconductor-related equipment and flat panel display (FPD) -related equipment.

17. Takeuchi manufacturing – subsidiaries in Germany, France, UK, Netherlands  – excavators, loaders, dumpers.

18. Monogatari Corporation – restaurant chain with the management philosophy “Smile and Sexy” – yes really.

19. Tokyo Electron – which we already featured in our top 5 Japanese companies who grew the most in the UK 2023.

20. Transaction – seems to design and distribute various consumer gadgets –  watch out for the badly functioning English language website and constant requests to check you are human. Appears to have vape shops in the USA and 2 subsidiaries in Asia.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Top Japan owned UK companies for growth in 2023

There are over 1,200 Japan-owned companies in the UK employing around 174,000 people. The number employed grew around 2% from 2022 to 2023.*

The top 5 Japanese companies** that have grown the most in the UK 2022-2023 are:

1. Dentsu UK/Dentsu International

Advertising and marketing giant Dentsu has two main subsidiaries in the UK – Dentsu UK and Dentsu International. Dentsu has been undergoing a period of consolidation globally, known as One Dentsu, becoming a holding company Dentsu Group Inc in Japan, and in the UK many of its acquisitions and also local companies such as Dentsu Manchester and Dentsu Edinburgh have been closed down and hived up into Dentsu UK.

In 2023 Dentsu Group Inc acquired UK marketing company Tag, one of its biggest acquisitions since it acquired Aegis in 2012. Tag has over 2,700 employees worldwide.

The number of employees at Dentsu UK has grown 66% since 2022  and turnover has grown 51% year on year. This growth is not just due to consolidation, however, as the entire Dentsu group of companies in the UK now employ over 5,000 people, a third more than in 2022, representing around 7% of the global Dentsu workforce – compared to the average for the biggest Japanese companies in the UK of around 2% of the global workforce. Dentsu employs over 17,000 in the EMEA region, around 27% of its global workforce – considerably above the average of 14% for the biggest Japanese companies in EMEA.

None of the Dentsu UK board directors are Japanese and there is one Japanese director, Arinobu Soga, Chief Governance Officer based in Japan, on the Dentsu International board.

2. Hitachi Solutions Europe

Hitachi Solutions Europe is one of the few Hitachi companies left standing in the UK after Hitachi’s aggressive divestments over the past few years. It is a global cloud-services, systems integrator focused on the Microsoft platform. The UK subsidiary is owned by Hitachi Solutions America. As a result, three of the 7 board members (2 Japanese, 1 American) are based in the USA. Two Japanese board  members are based in Japan and two directors (one British and one Australian) are based in the UK.

It now employs 555 people in the UK, up 38% from the previous year and turnover has also increased, by 55%.

Overall the number of people employed by Hitachi group companies in the UK has fallen over 40% over the past 4 or 5 years thanks to the divestments and shut down of the Horizon nuclear power project. The employee numbers in the UK only represent 1.4% of Hitachi’s total global employees, lower than the average for other large Japanese companies in Europe of 2.4%. Employee numbers have increased 7% across the EMEA region, mainly due to the acquisition of ABB Power Grids, now Hitachi Energy and represent around 9% of the global total.

Hitachi Energy (formerly ABB Power Grids) is also growing, now employing  over 400 people in the UK. The biggest Hitachi group subsidiary in the UK is Hitachi Rail which has over 2,700 employees, a 5% increase on 2022. Hitachi Vantara has 574 employees, expanding since Hitachi Consulting was merged into it in 2021.

There is still a Hitachi Europe in the UK, employing around 330 people, which coordinates the import of Hitachi consumer electronics and other products, as well as providing shared services in the region. There are also Hitachi Europes in Germany (84 employees), Italy (32 employees), France (15 employees) and Spain. Hitachi Europe in the UK has one Japanese board member, based in Japan and the most senior board member is Lorena Dellagiovanna, who is also based in Japan and is Chief Sustainability Officer and SVP.

3. Hawk-Eye Innovations (Sony)

Hawk-Eye Innovations was acquired by Sony in 2011 and has been growing almost every year since. It now employs 529 people in the UK, up 34% on the previous year. Turnover has only grown 4% however. Of the five directors on the board, 2 are Japanese, one in Japan, one in the UK. The other three are British, based in the UK,

It’s hard to give an accurate estimate of Sony’s overall presence in the UK as three of the main subsidiaries – Sony Mobile Communications, Sony Europe and the Sony UK Technology Centre in Pencoed are branches and do not therefore file annual reports giving employee numbers or turnover. The best guess is employee numbers have remained somewhere around 5,000 over the past few years. Sony employs around 12,300 people across the European region, around 11% of the global total and the UK represents about 4% of the global total – higher than the average for other large Japanese companies in the European region.

One of the bigger subsidiaries in the UK, Sony Interactive Entertainment Europe has also grown over the past year, by 9% and is now employing 1,539 people, with turnover also rising 15% on 2022. Of the three board members, 1 is Japanese based in Japan and the other two are British, based in the UK.  UPDATE – however, Sony Interactive Entertainment have just announced job cuts globally, including Europe (27th February 2024)

4. NTT Data UK

NTT Data UK is by far the largest NTT group company in the UK, with over 1,500 employees, a year on year growth of 27%.  Turnover has also grown 25% on the previous year. NTT group companies now employ over 3,500 in the UK, including recent acquisition Sapphire.

NTT has also been consolidated and reorganising its group companies globally. Its integrated annual report does  not, however, give regional breakdowns of employee numbers. We estimate there are at least 40,000 people working for NTT group companies in the EMEA region, around 12% of the 338,000 people working for NTT globally.  When NTT Data EMEAL (the L is for Latin America) was formed in 2021, it was stated that the region had 38,000 employees.

NTT Data UK’s  board has two German members, based in Germany and one Japanese member based in Spain. The CEO is Spanish and the CFO British – both based in the UK. The very European nature of the board is a legacy of the acquisitions of Spanish IT company Everis in 2013.

5. Tokyo Electron Europe

Tokyo Electron is a supplier of equipment to fabricate integrated circuits (IC), flat panel displays (FPD), and photovoltaic cells (PV). It has grown 26% over the past year, now employing 530 people. With the European headquarters in Crawley, it has branches in Israel, Belgium, Italy, Germany, France, Netherlands, Ireland and Austria. Tokyo Electron has over 16,600 employees worldwide and 669 employees in Europe and the Middle East.

It has two Japanese board directors, both based in Japan. The other three board directors are British and American, based in the UK.

*based on the 1007 companies who have filed with Companies House for the year ending 2023.

**with over 500 employees in the UK

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

Japan’s links to Glasgow

I was delighted to see that the train I took to travel from the south east of England, where I live, to Scotland, was a Hitachi Azuma. The journey was smooth and punctual, despite all the issues caused by the need for the trains to be bimodal (able to run on diesel), as the line is not fully electrified. The train was crowded, so it was good to see the seat reservation system was working too.

One of the reasons for it being crowded was that there are plenty of tourist destinations along the line. The journey along the east coast of England and Scotland has wonderful views of the cliffs and the sea, and takes in the ancient cities and cathedrals of Durham and York, going over the spectacular bridges in Newcastle and Berwick on Tweed and you can even catch glimpses of Lindisfarne, also known as the Holy Island, and Alnwick Castle.

I changed trains at Edinburgh, perhaps the most beautiful city in Britain, to travel to Glasgow. Glasgow has its own charm, full of ornate 19^th century buildings built when Glasgow was rich from textiles manufacturing, shipbuilding and coal mining.

The latter industry was what drew my great uncle, a Welsh geologist, to take up a professorship at Glasgow University. One of his areas of research was on coal deposits, but his real love was fossils. I remember looking through his fossil collection with him as a child and it was thrilling to walk round the fossil collections at the Kelvingrove museum and sense his presence.

My main reason for visiting the Kelvingrove museum, and also the other Glasgow museums, was to see what they had in the way of Japan related objects and art. The Japanese government donated over a 1,000 items to Glasgow in 1878, as part of a cultural exchange.

Although I tried to see every gallery in the museums, I did not find much that was Japanese.  There were plenty of Chinese items on display at one museum, but I had to ask one of the attendants to show me where a particular Japanese print could be found. It turned out to be in the basement. He told me he well remembered the beautiful Japanese furniture and impressive samurai swords that used to be displayed.

It dawned on me that not only could this low profile for Japan be explained by the curator of the Far East collection being Chinese, but also that the museums recently revised their displays to take account of the views of local communities. Glasgow has become host to a large number of Chinese people, including 6,000 students. The old Chinatown and the area I stayed in are full of Chinese shops and restaurants. There are over 450,000 Chinese people in the UK, around a quarter from Hong Kong, compared to only 60,000 Japanese.

The Japanese links to Glasgow continue, however, particularly in energy related fields. For example, Marubeni opened an office last year in Glasgow, focused on offshore wind.

This article by Pernille Rudlin was first published in Japanese in the Teikoku News, 11th October 2023

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。