Toyo Kanetsu K.K.

Business Details

Develops, designs, manufactures, and maintains logistics systems centered on IT-integrated sorting, picking, and conveyance systems. Captures demand for automation and labor-saving equipment from e-commerce, 3PL, wholesale, retail, manufacturing, and consumer co-op customers. Key group companies are Scrum Software Co., Ltd. (computer system design and development) and Toyo Kanetsu (Malaysia) Sdn. Bhd. Demand continues against a backdrop of worsening labor shortages, but FY2026 (ending March 2026) saw a temporary lull due to the absence of large-scale projects, resulting in a revenue decline.

Recent Overview

Revenue and profit declined amid a lull from the absence of large-scale projects, but orders received recovered, up 4.4% year on year

As expected at the start of the fiscal year, FY2026 (ending March 2026) faced a lull due to the absence of large-scale projects, resulting in revenue of ¥34,957 million (down 7.5% year on year) and operating profit of ¥3,425 million (down 8.0% year on year), a decline in both revenue and profit. On the other hand, orders received recovered to ¥35,860 million (up 4.4% year on year), and the order backlog also grew to ¥34,447 million (up 2.7% year on year). Amazon Japan G.K. (¥7,254 million) was the only key customer subject to disclosure, while ASKUL Corporation, disclosed in the prior period (¥7,638 million in the prior period), fell below the disclosure threshold. The company expects to emerge from the lull and achieve growth in both revenue and profit in FY2027 (ending March 2027). Additionally, a material subsequent event has been disclosed regarding the corporate split (absorption-type split) of the Logistics Solutions Business into "Toyo Kanetsu Solutions Co., Ltd.," effective April 1, 2027.

Key Products

Growth Drivers

• Continued expansion of demand for automation and labor-saving equipment from e-commerce, 3PL, wholesale, consumer co-op, and manufacturing customers against a backdrop of worsening labor shortages
• Expected revenue contribution in future periods from accumulated orders received of ¥35,860 million (up 4.4% year on year) and order backlog of ¥34,447 million (up 2.7% year on year)
• Expansion of equipment demand and new customer acquisition opportunities amid diversifying customer needs
• Accumulation of recurring (stock-type) revenue through expansion of the maintenance business
• Faster decision-making tailored to business characteristics and enhanced post-M&A integration and growth support following the transition to a holding company structure in April 2027
• Promotion of business structure restructuring, productivity improvement, and human capital strengthening under the medium-term management plan (FY2025-FY2027)

Risks

• Risk of quarter-to-quarter revenue and profit fluctuations due to uneven timing of completion and acceptance of large-scale projects
• Risk of revenue concentration on a specific customer (Amazon Japan): ¥7,254 million in FY2026 (ending March 2026), approximately 20.7% of segment revenue
• Structural risk inherent in project-based business, where performance is affected by trends in large-scale project orders
• Risk of rising manufacturing costs due to surging raw material prices and supply chain disruptions
• Impact on customers' capital expenditure appetite from global economic disruption caused by US-China trade policy, Middle East tensions, and other factors
• Risks related to organizational transition costs and the integration process associated with the corporate split (absorption-type split)