TOYO TEC CO., LTD.

Business Details

This segment operates mechanical security, on-site security, transport security, ATM management, security equipment sales, and call center operations. In addition to the parent company itself, Toyo Tech Himeji Co., Ltd., Toyo Tech Security Service Co., Ltd., Godai Tech Co., Ltd., AMS Security Service Co., Ltd., and Kansai United Protection Co., Ltd. handle operations. The segment provides safety and security services to a broad customer base primarily in the Kansai region, while also utilizing outsourcing arrangements with SECOM CO., LTD. In FY2026 (ending March 2026), the segment achieved significant revenue and profit growth driven by the completion of large-scale security and cleaning operations related to Expo 2025 Osaka, Kansai, and the penetration of price revisions.

Recent Overview

Significant improvement with revenue up 36.7% and profit up 391.7%, driven by Expo-related demand and the penetration of price revisions

In the Security Business for FY2026 (ending March 2026), the completion of large-scale security and cleaning operations during Expo 2025 Osaka, Kansai was the largest driver of revenue growth, with revenue reaching ¥32,291 million (up ¥8,668 million, or 36.7%, year on year). Beyond Expo-related work, price revisions took hold across all operations, including mechanical security and transport security, contributing to revenue growth. On the profit side, in addition to the recognition of Expo-related revenue, the resolution of M&A costs and upfront investment burdens incurred in the prior period, along with improvements to the earnings structure through the elimination of unprofitable contracts, contributed to a dramatic improvement in segment profit, which reached ¥2,081 million (up ¥1,657 million, or 391.7%, year on year).

Key Products

Growth Drivers

• Continued establishment of price revision negotiations across mechanical security, on-site security, transport security, and other operations
• Emergence of synergies from the expanded business scale following the M&A of the AMS Group (AMS Security Service Co., Ltd.) and Kansai United Protection Co., Ltd. (made wholly owned subsidiaries in May-June 2024)
• Improved security efficiency and higher-value-added service offerings through AI and digital transformation
• Enhanced IT-driven security efficiency through optimization of resources within the group
• Creation of new demand driven by growing home security needs and changes in the social environment

Risks

• Risk of a downturn from the loss of large-scale projects following the closing of Expo 2025 Osaka, Kansai (October 2025) (FY2027 (ending March 2027) is forecast to see a significant decline in revenue and profit, with revenue of ¥37,500 million and operating profit of ¥2,040 million)
• Increased personnel costs due to rising minimum wages (the security industry is labor-intensive, making it highly sensitive to cost structure impacts)
• Difficulty in recruiting and maintaining service quality amid a severe labor shortage
• Burden of goodwill amortization associated with M&A (balance of ¥2,521 million at end of FY2026 (ending March 2026), amortization of ¥268 million for the period) and integration costs
• Rising costs due to inflation (on-site response costs, equipment costs, etc.)