TOYO KANETSU K.K. Q3 FY2026 earnings call

• Market and Tailwind Context:

  • The Japanese national government has identified a projected 34% shortfall in domestic transportation capacity by 2030 if no countermeasures are implemented, creating policy tailwind for warehouse labor saving and automation.
  • Government policy frameworks support DX promotion in the logistics sector, specifically targeting reductions in waiting and loading/unloading time and labor saving, which drives sustained investment in warehouse productivity improvement that benefits the company.
  • Warehouse automation increases processing capacity, stabilizes shipping scheduling, improves docking bay rotation, and increases total cargo volume carried with existing transportation resources, strengthening demand for the company's solutions.

• Installed Base Advantage:

  • A large installed base of equipment creates a stable base of recurring revenue from maintenance, inspection, and upgrade/retrofit demand, supporting steady earnings.
  • The company has an established track record: 85% domestic airport baggage handling system market share, operations in 17 countries, and over 5,700 storage tanks delivered globally in the plant business.

• Growth Strategy:

  • For the 2025-2027 mid-term management plan, the company will expand the business scope of the Logistics Solution segment, while focusing on securing continued maintenance demand to maintain stable earnings in the Plant segment.
  • Growing order backlog makes it easier to recognize revenue as projects progress through completion and handover, supporting future revenue growth.

Based on TOYO KANETSU's full-year 2026 March term company forecast with total projected revenue of 62 billion yen: 1. Logistics Solution Segment: Projected revenue of 35.5 billion yen, accounting for 57.3% of total revenue. This segment covers automated logistics center equipment and airport baggage handling systems, holding an 85% domestic market share for airport baggage handling systems with installations across 17 countries. For the 9-month cumulative period ending December 2025 (Q3 FY2026 March term), the segment's order value reached 26.557 billion yen, and order backlog grew year-over-year to 35.678 billion yen. 2. Plant Segment: Projected revenue of 14 billion yen, accounting for 22.6% of total revenue. This segment focuses on large storage tanks and related facilities for oil and chemical industries, with over 5,700 storage tanks delivered to oil and natural gas producing and consuming countries worldwide. 3. Mirai Creation Segment: Projected revenue of 12 billion yen, accounting for 19.4% of total revenue. This segment covers industrial machinery and other new growth-related businesses. 4. Other: Projected revenue of 0.5 billion yen, accounting for 0.8% of total revenue.

• Full-year 2026 March term (current fiscal year): Total revenue guidance is maintained at 62 billion yen, with operating profit guidance maintained at 3.7 billion yen.
• Mid-term target for the 2027 fiscal year (final year of the 2025-2027 mid-term management plan): Maintain target of 68 billion yen in total revenue and 4.3 billion yen in operating profit.
• Dividend guidance: Maintain a 4% DOE (Dividend on Equity) payout standard for the 2026 March term through 2028 March term. For the 2026 March term, forecast annual dividend per share is 100 yen on a post-split basis (adjusted for the 1-for-2 common stock split effective January 1, 2026).

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