Strengthening the Management Foundation Through Stable Growth in Security and Building Management

「Security-business revenue was ¥32,291 million, up ¥8,668 million, or 36.7%, year on year, while segment profit was ¥2,081 million, up ¥1,657 million, or 391.7%. In the building management business, the renovation proposal process and efforts to revise prices have become established, improving profitability.」

「In the security business, Expo-related revenue made a significant contribution to results, and on-site security generated substantial revenue growth. Mechanical security, transportation security and other services also remained firm. As a result, security-business revenue, excluding intersegment internal revenue or transfers, was ¥19,237 million, up ¥8,017 million, or 71.5%, from the previous interim consolidated accounting period, while segment profit was ¥1,606 million, up ¥1,480 million. In the building management business, revenue had temporarily declined in the previous fiscal year following a review of the transaction policy for a large unprofitable customer. However, profitability improved as the proposal process for renovation work and ongoing price increases became established. As a result, revenue, excluding intersegment internal revenue or transfers, was ¥5,056 million, up ¥515 million, or 11.3%, from the previous interim consolidated accounting period, while segment profit was ¥356 million, up ¥297 million.」

「(Security business) The security business overall remained firm. In May 2024, the Company acquired through M&A and made wholly owned subsidiaries of アムス・セキュリティサービス株式会社 (Osaka), アムス・セキュリティサービス株式会社 (Fukuchiyama, Kyoto), and アムス・シークレットサービス株式会社, followed in June by 関西ユナイトプロテクション株式会社. Profit declined due to one-off costs related to these transactions. As a result, security-business revenue was ¥11,220 million, up ¥1,029 million, or 10.1%, from the previous interim consolidated accounting period, while segment profit was ¥126 million, down ¥173 million. In the building management business, large-scale renovation work and construction work overall struggled, and the pass-through of higher expenses into prices was delayed. As a result, revenue was ¥4,541 million, down ¥367 million, or 7.5%, from the previous interim consolidated accounting period, while segment profit was ¥59 million, down ¥1 million. In the real estate business, the real estate rental division continued to perform steadily, and part of a large-scale real estate property was also sold. As a result, revenue was ¥506 million, up ¥294 million, or 138.6%, from the previous interim consolidated accounting period, while segment profit was ¥146 million, up ¥120 million.」

「Mechanical security, on-site security and ATM management remained firm. Revenue, excluding intersegment internal revenue or transfers, was ¥15,447 million, up ¥865 million, or 5.9%, from the same quarter of the previous year, while segment profit was ¥514 million, up ¥202 million, or 65.0%.」

「The business remained firm due to the effects of ongoing price increases, the addition of 五大テック株式会社 to the Group and the acquisition of new orders. Revenue, excluding intersegment internal revenue or transfers, was ¥10,190 million, up ¥702 million, or 7.4%, from the same quarter of the previous year, while segment profit was ¥299 million, up ¥177 million, or 144.0%.」

「Mechanical and on-site security remained firm due to the effects of price increases and the addition of 五大テック株式会社 to the Group. ATM management also returned to revenue growth after winning new customers. Equipment sales for construction increased significantly year on year, resulting in revenue, excluding intersegment internal revenue or transfers, of ¥5,045 million, up ¥658 million from the same quarter of the previous year, and segment profit (operating profit) of ¥149 million, up ¥154 million.」

「Mechanical and on-site security remained firm. Mechanical security posted higher revenue for the eighth consecutive quarter, while the addition of 五大テック株式会社 to the 東洋テック Group from the cumulative second quarter of the previous year made a significant contribution to revenue growth in on-site security, more than offsetting the loss of last year's Olympic-related demand. Transportation security and ATM management also remained stable. As a result, revenue, excluding intersegment internal revenue, was ¥14,581 million, up ¥1,395 million, or 10.6%, from the same quarter of the previous year, while segment profit was ¥311 million, up ¥162 million, or 108.9%.」

「(Security business) Mechanical and on-site security remained firm, and the addition of 五大テック株式会社 to the consolidated results also contributed. Revenue was ¥9,488 million, up ¥747 million, or 8.6%, from the same quarter of the previous year, while segment profit was ¥122 million, up ¥13 million, or 12.5%. (Building management business) Although temporary expenses increased due to the absorption-type merger of 4 subsidiaries in the first quarter, the performance of the building management companies was trending upward. Revenue was ¥4,392 million, roughly unchanged from the same quarter of the previous year. Segment loss was ¥42 million due to temporary expenses from the absorption-type merger and higher costs associated with the increase in the minimum wage. (Real estate business) Real estate rental income remained firm, and real estate brokerage transactions were completed. Revenue was ¥216 million, up ¥41 million, or 23.5%, from the same quarter of the previous year, while segment profit was ¥96 million, up ¥36 million, or 60.3%.」

「(Security business) Revenue, excluding intersegment internal revenue or transfers, was ¥4,386 million, up ¥63 million from the same quarter of the previous year, as mechanical security and on-site security remained firm. However, segment loss (operating loss) was ¥5 million, a decline of ¥80 million from the same quarter of the previous year, due partly to one-off factors including M&A fees of ¥55 million. (Building management business) During efforts to establish the structure following the integration of 4 building maintenance subsidiaries, sales activities during the cumulative first quarter of the current consolidated fiscal year were insufficient. Revenue declined ¥29 million to ¥2,121 million due to fewer orders for spot construction and other work, cancellations of cleaning-related services, and fewer orders for COVID-19-related disinfection work. Segment loss (operating loss) was ¥81 million, a decline of ¥143 million, due to higher one-off costs, including relocation expenses, associated with the integration of the 4 building maintenance subsidiaries. (Real estate business) Real estate rental income remained stable. Revenue increased ¥5 million to ¥97 million, while segment profit was ¥40 million, down ¥2 million from the same quarter of the previous year.」

「On-site security grew steadily due to winning new customers and security services at COVID-19 vaccination venues and for the Tokyo Olympics and Paralympics. Mechanical security also returned to revenue growth for the first time in 4 periods. Construction and equipment sales, which had struggled in the previous fiscal year, also recovered. However, segment profit declined slightly due mainly to a decrease in the highly profitable ATM management business.」

「Mechanical security increased for the fourth consecutive quarter, while on-site security increased due to vaccination venues, new orders and security services for the Tokyo Olympics. Transportation security and ATM management also remained firm. Revenue, excluding intersegment internal revenue or transfers, was ¥13,185 million, up 3.3% year on year, while segment profit was ¥149 million, down 12.5%. Following the addition of 株式会社新栄ビルサービス and 株式会社明成 to the 東洋テック Group in the previous consolidated fiscal year, the building management business has continued to perform well by generating further group synergies. Revenue was ¥6,668 million, up 10.2% year on year, and segment profit was ¥249 million, up 81.7% year on year, reflecting higher revenue and cost controls. In the real estate business, existing real estate rentals remained firm, but brokerage transactions struggled. Revenue was ¥267 million, down 33.5% year on year, and segment profit was ¥93 million, down 29.5%.」

「Although mechanical security, transportation security and ATM management were broadly unchanged, on-site security remained firm due to vaccination venues, new orders and security services for the Tokyo Olympics. Revenue, excluding intersegment internal revenue or transfers, increased 3.2% year on year to ¥8,740 million, while segment profit increased 12.5% to ¥109 million.」

「(Security business) On-site security increased due to the acquisition of new customers, while transportation security also remained firm. Meanwhile, construction and equipment sales struggled amid the COVID-19 pandemic, and ATM management remained challenging as the shift to cashless payments progressed. Revenue was ¥4,323 million, up 2.6% year on year. Segment profit (operating profit) was ¥75 million, down 46.2% year on year, as property-related expenses increased following the resumption of replacement of aging equipment that had been postponed last fiscal year due to the spread of COVID-19. (Building management business) The building management business performed well following the addition of 株式会社新栄ビルサービス and 株式会社明成 to the 東洋テック Group in the previous consolidated fiscal year. By generating further group synergies, the business is also undertaking cleaning and disinfection at COVID-19 vaccination venues. Revenue was ¥2,150 million, up 11.6% year on year. Segment profit (operating profit) was ¥62 million, up 1,215.9% year on year, reflecting higher revenue and cost controls. (Real estate business) Real estate brokerage transactions were completed and existing real estate rental income remained stable. Revenue was ¥91 million, up 15.6% year on year, and segment profit was ¥42 million, up 45.2%.」

「Revenue from the security business was ¥17,201 million, a slight decrease of ¥3 million year on year, while segment profit was ¥224 million, down ¥183 million, or 44.9%, from the previous consolidated fiscal year. Revenue from the building management business was ¥8,301 million, up ¥1,387 million, or 20.1%, year on year, while segment profit was ¥235 million, up ¥118 million, or 100.7%, from the previous consolidated fiscal year. Revenue from the real estate business was ¥497 million, down ¥225 million, or 31.2%, year on year, while segment profit was ¥179 million, down ¥333 million, or 65.0%, from the previous consolidated fiscal year.」

「In the security services business, prime-contract orders for Kansai mail delivery services for the Resona Group contributed to steady transport security operations and offset weakness in ATM management and construction and equipment sales. As a result, revenue, excluding intersegment internal revenue, was ¥12,767 million, up 0.4%. Segment profit declined 49.3% to ¥170 million as personnel costs increased due to improved employee treatment and the hiring of more new employees than usual. In the building management business, despite the effects of COVID-19, performance was improving as commercial facilities resumed operations and educational institutions reopened. Revenue, excluding intersegment internal revenue, increased 16.4% to ¥6,051 million, and segment profit increased 22.7% to ¥137 million, helped by 株式会社新栄ビルサービス and 株式会社明成 joining the 東洋テック Group. In the real estate business, revenue and profit declined as the previous fiscal year included a large consulting project worth approximately ¥300 million. Excluding this exceptional factor, the existing real estate rental business remained stable. Revenue, excluding intersegment internal revenue, was ¥402 million, down 30.7%, and segment profit was ¥133 million, down 69.1%.」

「(Security services business) Transport security grew due to prime-contract orders for Kansai mail delivery services for the Resona Group. However, revenue declined as construction and equipment sales struggled due to the effects of COVID-19 and ATM management decreased as cashless payments expanded. Revenue was ¥8,470 million, down 1.1%. Segment profit was ¥97 million, down 61.5%. (Building management business) Revenue was ¥3,889 million, up 13.3%, and segment profit was ¥57 million, down 21.4%. (Real estate business) Revenue was ¥316 million, down 35.4%, and segment profit was ¥96 million, down 75.2%.」

「(Security services business) Transport security increased revenue year on year after the company began providing Kansai mail delivery services for the Resona Group on a prime-contract basis. Mechanical and onsite security also performed well despite reduced operations and closures at customers due to the COVID-19 pandemic. However, revenue declined due to lower ATM management revenue resulting from restrictions on going out during the pandemic, a decline in cash transactions and the accelerated shift to cashless payments, as well as lower construction and equipment sales. Revenue, excluding intersegment internal revenue or transfers, was ¥4,211 million, down 0.1%. Segment operating profit increased 49.0% to ¥141 million as cost controls implemented in response to COVID-19 reduced personnel and property-related expenses below plan.」

「Revenue in the security services business was ¥17,205 million, down ¥97 million, or 0.6%, from the previous fiscal year, and segment profit was ¥407 million, down ¥312 million, or 43.4%. Revenue in the building management business was ¥6,914 million, up ¥1,258 million, or 22.2%, while segment profit was ¥117 million, down ¥57 million, or 32.9%. Revenue in the real estate business was ¥723 million, up ¥448 million, or 162.8%, and segment profit was ¥512 million, up ¥415 million, or 430.9%.」

「(Security services business) In the security services business, strong onsite security, including G20-related demand, resulted in revenue, excluding intersegment internal revenue, of ¥12,712 million, up 0.8% from the same quarter of the previous year. Segment profit declined 32.0% to ¥336 million as personnel costs rose significantly due to the planned implementation of measures to improve employee treatment, including pay raises, promotions and higher hiring rates, as well as the early increase in staffing ahead of the start of prime-contract transport operations. (Building management business) In the building management business, revenue, excluding intersegment internal revenue, increased 25.5% to ¥5,200 million due to an increase in spot construction orders and the Morita Building Management Group joining the company’s group. Segment profit increased 1.5% to ¥112 million as personnel costs rose to address labor shortages and in connection with the consolidation of subsidiaries. (Real estate business) In the real estate business, revenue, excluding intersegment internal revenue, increased 178.1% to ¥581 million due to stable income from income-producing properties and the award of large contracts. Segment profit increased 400.8% to ¥431 million.」

「Although mechanical security, ATM management and other security services faced declines associated with the consolidation of financial institution branches, and suspension and termination services and the "Mimamori Anshin Call" service also declined, strong onsite security, including G20-related demand, and equipment sales resulted in revenue, excluding intersegment internal revenue or transfers, of ¥8,561 million, up 2.7%. Segment profit declined 9.7% to ¥252 million as personnel costs rose significantly following measures to address labor shortages and work-style reform. Revenue in the building management business increased 27.8% to ¥3,433 million, due to an increase in spot construction orders and the Morita Building Management Group joining the company’s group. Segment profit increased 5.8% to ¥73 million, despite higher personnel costs associated with increased staffing and efforts to improve employee treatment, as well as higher one-time expenses related to the Morita Building Management Group joining the group. In the real estate business, revenue increased 238.2% to ¥490 million, helped by rental income from a business hotel acquired in March 2019 and income-producing properties held by 森田ビル管理株式会社, as well as the award of a large real estate contract. Segment profit increased 525.2% to ¥390 million, also supported by brokerage commissions and other factors.」

「Although orders from financial institutions for ATM management declined and suspension and termination services in other security operations and the "Mimamori Anshin Call" service decreased, strong onsite security, including G20-related operations, resulted in revenue, excluding intersegment internal revenue or transfers, of ¥4,216 million, up 1.8%. Segment operating profit declined 36.8% to ¥94 million as subcontracting costs increased with higher revenue and personnel costs rose significantly following measures to address labor shortages and work-style reform. Revenue increased 28.1% to ¥1,673 million due to an increase in spot construction orders and the consolidation of the Morita Building Management Group as a subsidiary. Segment profit was ¥8 million, down 63.2%, due to higher personnel costs associated with increased staffing and improved employee treatment.」

「Revenue in the security services business was ¥17,302 million, up ¥1,011 million, or 6.2%, from the previous fiscal year, and segment profit was ¥720 million, up ¥148 million, or 26.1%. Revenue in the building management business was ¥5,656 million, up ¥138 million, or 2.5%, and segment profit was ¥174 million, up ¥34 million, or 24.7%.」

「In the security services business, although mechanical security, transport security and other security services faced factors reducing revenue during the previous fiscal year, construction and equipment sales and onsite security remained strong. As a result, revenue, excluding intersegment internal revenue, was ¥12,613 million, up 4.7%. In terms of profit and loss, personnel and subcontracting costs increased with business expansion, but the effects of cost control focused on property-related expenses resulted in segment operating profit of ¥495 million, up 21.7%. In the building management business, the decline in revenue narrowed as spot orders, which had been weak in the first half, recovered. Revenue, excluding intersegment internal revenue, was ¥4,145 million, down 0.8%. Segment operating profit was ¥110 million, up 12.5%, as a result of efforts to expand margins and implement low-cost operations.」

「Although mechanical security and other security services faced factors reducing revenue, including cancellations by large customers and price reductions offered to financial institutions during the previous fiscal year, construction and equipment sales and onsite security remained strong. As a result, revenue, excluding intersegment internal revenue or transfers, increased 4.3% to ¥8,335 million. Segment profit increased 3.1% to ¥279 million, despite higher personnel and subcontracting costs associated with business expansion, supported by the effects of cost control focused on property-related expenses. In the building management business, revenue, excluding intersegment internal revenue or transfers, declined 2.8% to ¥2,685 million due to weak spot orders and the impact of a major lost contract in the previous period. Segment profit was ¥69 million, up 1.1%, securing a level broadly in line with the previous year as a result of efforts to expand margins and implement low-cost operations.」

「Although cancellations by large customers in mechanical security and other security services during the previous fiscal year, as well as price reductions offered to financial institutions, created factors for lower revenue, construction and equipment sales and facility security remained strong. As a result, revenue, excluding intersegment internal revenue or transfers, was ¥4,141 million, up 4.1%. Segment profit was ¥149 million, up 13.1%, partly due to cost reductions focused on property-related expenses. In the building management business, revenue, excluding intersegment internal revenue or transfers, declined 3.8% to ¥1,305 million due to a decrease in spot orders. Segment profit was ¥24 million, up 27.8%, as a result of efforts to expand margins and implement low-cost operations.」

「Revenue in the security services business was ¥16,290 million, up ¥894 million, or 5.8%, from the previous consolidated fiscal year, and segment profit was ¥571 million, up ¥97 million, or 20.7%. Revenue in the building management business was ¥5,517 million, up ¥148 million, or 2.8%, and segment profit was ¥140 million, up ¥137 million, or 4,516.5%.」

「In the security services business, mechanical and facility security posted significant revenue growth following the M&A at the end of the previous fiscal year and the launch of operations for large contracts, while ATM management also remained firm. As a result, revenue, excluding intersegment internal revenue, was ¥12,048 million, up 5.8% from the same quarter of the previous year. In the building management business, revenue, excluding intersegment internal revenue, was ¥4,178 million, up 6.1%, helped by group-wide sales activities and the award of large contracts.」

「Mechanical and facility security performed well year on year, helped by the contribution of the mechanical security business acquired through M&A at the end of the previous fiscal year and large facility contracts won through new sales. Transport security and ATM management also remained firm. As a result, revenue, excluding intersegment internal revenue or transfers, was ¥7,994 million, up 5.7%.」

「In the security services business, mechanical security, transport security, facility security and ATM management all remained firm. As a result, revenue, excluding intersegment internal revenue or transfers, was ¥3,977 million, up 5.3% from the same quarter of the previous year. In terms of profit and loss, ongoing efficiency initiatives across operations resulted in segment profit of ¥132 million, up 33.8%. In the building management business, strengthened facility management sales across the group lifted revenue, excluding intersegment internal revenue or transfers, 3.9% to ¥1,356 million. Segment profit was ¥18 million, compared with a segment operating loss of ¥12 million in the same quarter of the previous year, reflecting the effects of efficiency improvements, including the partial consolidation of personnel at the parent company during the previous fiscal year.」

「Revenue in the security services business was ¥15,396 million, up ¥149 million, or 1.0%, from the previous consolidated fiscal year, and segment profit was ¥473 million, up ¥16 million, or 3.6%. In the building management business, some sales personnel from group companies were consolidated at the parent company and efforts focused on facility management sales across the group, but the business was unable to absorb higher personnel and subcontracting costs resulting from the deteriorating labor environment, including the rising minimum wage and labor shortages. As a result, revenue was ¥5,368 million, down ¥162 million, or 2.9%, and segment profit was ¥3 million, down ¥130 million, or 97.7%.」

「In the security services business, the strengthening of the sales structure, including the establishment of a new Sales Development Department, kept transport security and contracted management firm, but mechanical and facility security declined due to weak performance in patrol operations and other services. Revenue, excluding intersegment internal revenue, was ¥11,391 million, up 0.8% year on year. In the building management business, efforts were made to strengthen facility management sales across the group, but revenue, excluding intersegment internal revenue, was ¥3,938 million, down 2.6%. In terms of profit and loss, higher expenses, including personnel costs, resulted in a segment operating loss of ¥45 million, a 167.8% decline year on year.」

「Transport security and contracted management remained firm, while mechanical and facility security declined slightly. Revenue was ¥7,566 million, up ¥56 million, or 0.8%, from the same quarter of the previous year. In the building management business, despite efforts to provide building management services by combining the capabilities of all group companies, revenue was ¥2,618 million, down ¥92 million, or 3.4%.」

「In the security services business, transport security, contracted management and equipment sales remained firm, while mechanical and facility security struggled slightly. As a result, revenue, excluding intersegment internal revenue or transfers, was ¥3,777 million, up ¥97 million, or 2.6%, from the same quarter of the previous year. In the building management business, efforts to provide building management services by combining the capabilities of all group companies resulted in revenue, excluding intersegment internal revenue or transfers, of ¥1,305 million, broadly flat at a decline of ¥0 million year on year. The segment recorded a loss of ¥12 million, an increase in the operating loss of ¥24 million, or 210.3%, from the same quarter of the previous year.」

「We will work to strengthen our management base, underpinned by the stable expansion of our core security services and building management businesses.」