Business Development Integrating Security and Building Maintenance

「The Group worked to realize synergies from the M&A transactions conducted in the previous fiscal year and provide high-value-added services through AI and digital transformation.」

「The アムス Group is primarily engaged in security services, including electronic security, manned security and parking management. We decided to acquire its shares because the acquisition is expected to generate synergies with our Group, ease the severe labor shortage and enable the use of human resources for Expo 2025 Osaka, Kansai.」

「Although labor costs increased due to the higher minimum wage and outsourcing costs remained elevated because of delays in bringing work in-house, collaboration with 東洋テック following the integration of the building maintenance subsidiaries also generated benefits. Revenue, excluding intersegment sales and transfers, was ¥7,367 million, an increase of ¥635 million, or 9.4%, from the same quarter of the previous fiscal year, while segment profit was ¥94 million, an increase of ¥69 million, or 278.3%.」

「Although expenses increased to a limited extent in connection with the integration of 2 cleaning subsidiaries, the expected integration benefits materialized, resulting in revenue, excluding intersegment sales and transfers, of ¥4,909 million, an increase of ¥516 million, or 11.8%, from the same quarter of the previous fiscal year, and segment profit of ¥61 million, an increase of ¥103 million from the same quarter of the previous fiscal year.」

「東洋テックビルサービス株式会社 recorded a slight operating loss in the first quarter of the current consolidated fiscal year due to sluggish revenue immediately after the integration and one-time expenses associated with the integration. However, there was no substantial delay in performance like that seen in the previous year. Revenue, excluding intersegment sales and transfers, was ¥2,251 million, an increase of ¥129 million from the same quarter of the previous fiscal year, while the segment loss, or operating loss, was ¥5 million, a decrease of ¥76 million from the same quarter of the previous fiscal year.」

「From the cumulative second quarter onward, the effects of integrating 4 building maintenance subsidiaries emerged, putting the business on a growth track. In addition, the profitability of 2 companies primarily engaged in cleaning improved after they negotiated price increases with customers in response to the higher minimum wage. As a result, the building management business recovered from a loss in the first quarter and returned to profitability in the second quarter. It remained profitable in the cumulative third quarter, with revenue, excluding intersegment sales and transfers, of ¥6,731 million, an increase of ¥63 million, or 0.9%, from the same quarter of the previous fiscal year, and segment profit of ¥25 million, a decrease of ¥224 million, or 90.0%, from the same quarter of the previous fiscal year.」

「Although there was a temporary increase in expenses from the absorption-type merger of 4 subsidiaries in the first quarter, the performance of the companies in the building management business also began to improve.」

「By acquiring control of 五大テック社, we can incorporate and use its expertise and resources in facility security, operate its business in an integrated manner with the Group's security and building management businesses, and share human resources between them. We decided to acquire the shares because we believed these measures would generate synergies within the Group.」

「To further strengthen the building management business, merged 4 Group companies effective 1 April 2022 and established 東洋テックビルサービス株式会社.」

「Announced an absorption-type merger in which テックビルサービス株式会社 would be the surviving company and 共同総合サービス株式会社, 森田ビル管理株式会社 and 株式会社明成 would be absorbed companies. The purpose of the merger was to further strengthen the building management business by centrally managing and effectively using the skills, expertise and human resources held by each company and providing higher value-added services.」

「The building management business performed well through further Group synergies following the integration of 株式会社新栄ビルサービス and 株式会社明成 into the 東洋テック Group in the previous consolidated fiscal year. Although the business struggled in the previous fiscal year because commercial facilities and schools closed due to COVID-19, revenue, excluding intersegment sales and transfers, was ¥4,392 million, up 12.9% year on year, as the performance of affiliated companies improved substantially in the current fiscal year. Segment profit was ¥170 million, up 196.8% year on year, due to higher revenue and cost control.」

「The building management business performed well following the integration of 株式会社新栄ビルサービス and 株式会社明成 into the 東洋テック Group in the previous consolidated fiscal year. By generating further Group synergies, we are also undertaking cleaning and disinfection work at COVID-19 vaccination venues.」

「Although existing customers' closures and school closures during the state of emergency reduced revenue, the recovery after the state of emergency was lifted and the integration of 株式会社新栄ビルサービス and 株式会社明成 into the 東洋テック Group led to a substantial increase in revenue. As a result, revenue in the building management business was ¥8,301 million, an increase of ¥1,387 million, or 20.1%, from the previous fiscal year, and segment profit was ¥235 million, an increase of ¥118 million, or 100.7%, from the previous consolidated fiscal year.」

「The integration of 株式会社新栄ビルサービス and 株式会社明成 into the 東洋テック Group also contributed to revenue of ¥6,051 million, excluding intersegment sales, up 16.4% year on year, and segment profit of ¥137 million, up 22.7% year on year.」

「By acquiring control of 株式会社明成, we can incorporate and use its expertise and resources in electrical installation work, operate its business in an integrated manner with the Group's security and building management businesses, and share human resources between them. We decided to acquire the shares because we believed these measures would generate synergies within the Group.」

「Revenue increased substantially following the conversion of 株式会社新栄ビルサービス into a wholly owned subsidiary, but the business as a whole struggled because routine work was suspended or postponed due to the COVID-19 pandemic.」

「In the building management business, in addition to an increase in orders for spot construction work, the integration of the 森田ビル管理 Group into our Group resulted in revenue, excluding intersegment sales, of ¥5,200 million, up 25.5% year on year. Segment profit was ¥112 million, up 1.5% year on year, as labor costs increased in response to labor shortages and following the acquisition of subsidiaries.」

「In addition to an increase in orders for spot construction work, the integration of the 森田ビル管理 Group into our Group resulted in revenue, excluding intersegment sales and transfers, of ¥3,433 million, up 27.8% year on year. Segment profit was ¥73 million, up 5.8% year on year, despite increases in personnel and efforts to improve employee compensation, as well as higher one-time expenses associated with integrating the 森田ビル管理 Group into our Group.」

「The Group operates security and building management businesses. By acquiring control of 森田ビル管理株式会社, we can use its expertise and resources in building management, operate its security and building management businesses in an integrated manner with those of our Group, and share human resources between them. We decided to acquire the shares because we believed these measures would generate synergies within the Group.」

「Efficiency gains from consolidating sales personnel within the Group in the second half of the previous fiscal year, together with stronger integrated sales capabilities across the Group, led to steady orders for large projects and spot construction work. Combined with the effects of cost reductions at affiliated companies, this resulted in substantial increases in both revenue and profit.」

「In the building management business, integrated sales activities across the Group and the winning of large contracts resulted in revenue, excluding intersegment sales, of ¥4,178 million, up 6.1% year on year. In terms of earnings, efficiency improvements and negotiations for price increases pursued by the Group's companies since the previous fiscal year proved effective, resulting in segment profit, or operating profit, of ¥98 million, compared with a segment loss, or operating loss, of ¥45 million in the same quarter of the previous fiscal year.」

「In the building management business, stronger integrated sales capabilities, which have been pursued since the previous fiscal year, together with expense control, resulted in revenue, excluding intersegment sales and transfers, of ¥2,763 million, up 5.5% year on year. Segment profit, or operating profit, was ¥68 million, compared with a segment loss, or operating loss, of ¥37 million in the same quarter of the previous fiscal year, as cost-cutting measures implemented by the Group's companies since the previous fiscal year and negotiations for price increases proved effective.」

「In the building management business, stronger integrated facility management sales across the Group, an initiative underway since the previous fiscal year, resulted in revenue, excluding intersegment sales and transfers, of ¥1,356 million, up 3.9% year on year. Segment profit, or operating profit, was ¥18 million, compared with a segment loss, or operating loss, of ¥12 million in the same quarter of the previous fiscal year, reflecting efficiency gains from the partial consolidation of personnel at the parent company and other measures implemented in the previous fiscal year.」

「Under "Strengthening the management base," we acquired the business of a company engaged in electronic security through M&A in March 2017, with the aim of strengthening the management base through the stable expansion of our core security and building management businesses. In addition, as a result of new sales activities, we successfully won facility security and building maintenance contracts for large-scale facilities.」

「In the building management business, we worked to strengthen facility management sales through an integrated effort by the Group's companies, but revenue, excluding intersegment sales, was ¥3,938 million, down 2.6% year on year.」

「In the building management business, we worked to provide building management services by pooling the full capabilities of the Group's companies, but」

「In the building management business, efforts to provide building management services by pooling the full capabilities of the Group's companies resulted in revenue, excluding intersegment sales and transfers, of ¥1,305 million, essentially unchanged year on year at a decrease of ¥0 million.」

「(2) Developing a facility management strategy integrating security and building maintenance」