AEON : REPORT 2024（13,393KB）(new window. for pdf file.)

AEON REPORT 2024

Thriving with Communities

01

In FY2024, AEON celebrated the 50th anniversary of its stock listing . We would like to express our whole - hearted gratitude to all of our stakeholders for your warm support .

AEON is a company with more than 900,000 "customer shareholders . " We believe that being able to reflect the voices of our shareholders, who are also our customers, into our sales floors, services, and management, is what leads us to take a new step forward and realize better lifestyles .

Aiming for a prosperous future with as many people as possible taking part in management .

Publicly listed for

50years

02

AEON Foundational Ideals

Pursuing peace, respecting humans, and contributing to local communities,

always with customers as our starting point.

AEON firmly believes that retailing is an industry to promote peace, humanity,

and local communities. To remain a thriving corporate group that fulfills this mission,

we are committed to continuous innovation, with customers as our starting point.

Peace cannot be achieved without active and conscious engagement, whether it be in recovering from war and disaster or in maintaining and promoting living in peace. Our conviction is grounded in the real-life experience of Takuya Okada, Honorary Chairman and Senior Advisor to the President. After the Second World War, Mr. Okada witnessed a customer in line at a store, holding a flyer and weeping tears of joy, saying, "The war is really over," and he came to realize that the existence of retailing was a symbol of peace. From this realization, he decided that peace was a prerequisite for retailing to exist, and that retailing must contribute to the maintenance of peace.

AEON will never do anything that contradicts peace. AEON will never take part in any such actions or activities. Our aim is to make a positive contribution to peace.

As for humans, by believing in and respecting each person, their abilities and aspirations will flourish, and by connecting with others, they feel much happier in their lives.

Honorary Chairman Okada called the retailing sector a "humanistic industry." This means respecting the "human way," which includes having respect for each person's individuality, dignity, and autonomy. It also means believing in their potential and encouraging them to grow and become better humans through work and learning. However, it is difficult for humans to grow alone, and it is through "human connections" that we can become better humans together with others. It is both a realization of happiness and a pursuit of norms among people. In short, retailing is an industry of people's happiness and norms.

Okadaya circa 1946

Peace is more than just the absence of war and violence. It encompasses not only peace of mind but also resilience in the face of wars, disasters, and other hardships. Even in the 21st century, we continue to witness wars and face natural disasters such as earthquakes and extreme weather events more frequently than ever. This calls for us to rethink the value of peace now. Peace cannot be given by itself. Peace can only be maintained through our active and conscious engagement.

Takuya Okada who served as president when Okadaya opened during Japan's postwar recovery

03

AEON Foundational Ideals

Enriching local communities requires us to respect the diversity and independence of each region, and to constantly meet and care for their specific needs.

Retailing is by nature a region-based industry that flourishes with the local communities. To maintain the richness and well-being of regions and the local communities within them, it is vital to take care of them continuously. This is one of the important roles of retailing. As regions and local communities increasingly become more important in the future, AEON will actively contribute to their prosperity by developing products tailored to each region and promoting the welfare of the local people.

Emergency relief campaign for 2024 Noto Peninsula Earthquake, carried out in January 2024

AEON is committed to actively engaging in peace efforts, supporting human happiness and norms, and contributing to the prosperity of local communities. These ideals form the foundation of putting "customers as our starting point," which places the needs and preferences of our customers first at the center of our operations.

Putting our customers first means that we do not put ourselves first, that is, we do not think and act for our own convenience. On the contrary, we always put our customers first and act with the highest standards of integrity, which is the foundation of AEON. We will use this as a mirror to reflect ourselves and as the standard for every decision and action made by all AEON People. Even when it becomes tempting to prioritize our company's or personal interests or convenience, we must firmly resist and overcome such temptations to preserve our unwavering dedication to our customers.

To achieve this, AEON must be a corporate group that continues to innovate.

Ensuring a company's growth and survival is of paramount importance, but without constant innovation, it will decline and eventually perish. Even if maintaining the status quo is stable and

comfortable, a company should not be complacent but continuously change and improve itself. Having the foresight and insight to constantly look ahead to changes in our customers and various social changes, it is essential for us to continue innovating. All AEON People are dedicated to anticipating the evolution and changes in our customers' lifestyles and the needs of society.

AEON has transformed from a family business to a corporation, and then to an industry. It has always preserved a dynamic corporate culture. However, as society changes faster and faster, we are most worried about losing the required innovative and entrepreneurial spirit and becoming stagnant like many large companies. We understand that static equilibrium, where the status quo continues without change, will not last at all. The only way to avoid being overtaken by newer innovators is for AEON to remain the largest and most advanced innovator. It is our firm determination to be an organization that constantly renews itself by keeping its founding spirit and staying ahead of its time.

AEON will act with the firm belief that by embodying and practicing these ideals, we can contribute to the maintenance and development of peace, humans, and local communities.

AEON supports the protection and preservation of local traditions and culture (Toin Town Children's Kabuki, The Cultural Foundation of Okada

The "AEON Foundational Ideals" have been shared in 12 languages, with Japanese, English and Chinese versions disclosed on the AEON website.

AEON Group Future Vision

04

See page 75 Instillation to Implementation of the AEON Group Future Vision

The AEON Group Future Vision was formulated in 2022 with the aim of clarifying the direction AEON will pursue and serving as the driving force of the Group.

AEON will work with customers and its many other stakeholders to give shape to each of our desires. Through our diverse range of businesses related to people's lives, we will contribute to the happiness of each person and the sustainable development of society, creating a future lifestyle that spreads our smiles around the world.

Create a future lifestyle that leads to a smile for each and every person

Three attitudes

"Act spontaneously and follow your aspirations"

With our customer's view point at our core, we will hold our own aspirations, express

ourselves, and act proactively. Our innovation will be powered by dialogue and cooperation

that comes from our own initiative.

"Keep learning to create new values"

Continuous learning is what expands the potential of our actions. Through practice, we will accumulate wisdom, sharpen our professional skills, and continuously create new values.

"Build relationships, nurture them, and create together"

We will overcome the boundaries between corporations, groups, and organizations so we can build and nurture diverse connections. These connections will accelerate the cycles of mutual learning and value creation so we can co-create the future lifestyle.

One vow

"Always act with integrity and sincerity"

It is integrity and sincerity that allow people to trust in our actions and empathize with our aspirations.

Empathy from our customers and allies is the starting point of co-creation.

Going forward, we will cherish our vow to always act with integrity and sincerity.

QUESTION

01

QUESTION

03

See

P.22-

What Kind of Group Is AEON?				05
Starting out in retail, AEON has grown into eight businesses involving over 300 group
companies and around 600,000 employees working in 14 countries. As a conglomerate,		How Is AEON Pursuing
in which each company operates independently under the group's shared policies and	QUESTION	Sustainable Growth?
strategies, we have grown the business while maintaining strong interrelationships.
02
See	This section offers an Executive Message	What
		discussing the progress of the Mid-term
P.07-		Management Plan (FY2021-FY2025), now	is
		at its halfway point, as well as future
See		strategies, in light of the rapidly changing
P.13-		business environment.

	QUESTION	What Are AEON's	A O		?
What Are the "Five Reforms"?	Sustainability Initiatives?
AEON formulated its management materiality	04	Together with stakeholders, AEON is actively	E		N
by embracing rapid changes in the business	pursuing community-based activities to address	E
environment and capturing the essence of		local issues from both environmental and social
	perspectives aiming to solve these issues through
the issues we face. This materiality forms the
	its business operations.					Q
pillar of the current Mid-term Management	See
	A			A
	P.43-		E	s	F
Plan. Every group company sets its own				ON'
policy based on this common group
strategy, which becomes the
driving force of the			What Is AEON's
group's growth.

QUESTION	Management Framework?
06
A distinctive feature of AEON is that the AEON
	Foundational Ideals included in the Articles of
	Incorporation are also our basic approach to
	governance. This section highlights our
	corporate governance initiatives.
	See

P.84-

See

P.70-

QUESTION

05

What Is AEON's View of Human Resources?

With the notion that retail is an industry to promote humanity as the core of our human resources strategy, AEON is fostering an environment that respects human rights, and where diverse talent can thrive, regardless of nationality, age, or gender. We are focusing on cultivating human capital to become a corporate group that creates a future lifestyle that brings a smile to each and every person.

DATA

07

See

P.105-

This section features AEON's financial and non-financial data.

06

Contents

Editorial Policy

At AEON we operate under the AEON Foundational Ideals that have been carefully passed down since our founding, and by putting those principles into practice, we have continued to preserve certain values and management approaches. This document (AEON Report) has been produced with the aim of communicating to all stakeholders this unique source of value creation at AEON, and the economic, social and environmental value created through our business activities.

The 2024 edition of the report highlights the progress of the Mid-term Management Plan (FY2021-2025)-which has now completed its third year-and of the "Five Reforms" and the Green Strategy, as well as our initiatives and thinking going forward. We have also created an AEON FAQ section to go into greater depth with our story and gain greater understanding of our company.

AEON marks its 50th anniversary as a publicly listed company in FY2024. As AEON's management, we have actively sought the views of our customers, who are the basis of all we do. The number of our "customer shareholders" now exceeds 900,000. As we look ahead toward the next 50 years, we will seek to create a prosperous future with even more people who will take part in our management.

Motoyuki Shikata Executive Officer, Strategy

AEON's Disclosure Framework

Value Creation

			AEON Report	(Integrated Report)
		Investors Relations			Sustainability and
Financial		· Annual Securities			ESG Information	financial-Non
	· Interim Reports			(Episode compilation)
		Report*			· Corporate Governance
		· Financial Statements*			Report
		· Quarterly Reports			· AEON Book
		(For shareholders)			· Sustainability Data Book
		· IR Website			· Sustainability Website

Completeness *Mandatory disclosure

In addition to the AEON Report, through our website we make additional disclosures including the AEON Book, which describes AEON's values of continuous innovation that have been passed down since our founding in an episode format, and the Sustainability Data Book, which summarizes Group KPIs on sustainability and quantitative information. Please refer to this information as needed.

[Reporting Period]

FY2023 (March 1, 2023 to February 29, 2024)

• For the initiatives of some operating companies whose financial reporting periods differ, the applicable periods are specified for each reporting item.

[Reporting Scope]

Pure holding company AEON Co., Ltd., its 309 consolidated subsidiaries, and 25 equity method affiliates (as of the end of February 2024)

• When the scope of reporting differs from the above, it will be so stated for each reporting item.

[Disclaimer]

This report includes plans for the future of AEON, as well as predictions and forecasts about business results. These statements are based on AEON's judgments and opinions in light of the information available at the current time. Due to various future issues, results may differ greatly from those published in this report.

[Month of Publication]

September 2024 (the previous report was published in October 2023)

[Publication]

Corporate Communications Department, AEON Co., Ltd.

• For the purposes of this report, "AEON" is a collective term referring to the AEON group. "AEON People" collectively refers to the employees working across the AEON group.

Referenced Reporting Guidelines

IFRS Foundation / International Integrated Framework ISSB / International Sustainability Standards

TCFD Recommendations / TCFD Framework TNFD Recommendations / TNFD Framework GRI / Sustainability Reporting Guidelines

Frequently Used Abbreviations in This Report GMS / General Merchandise Store

SM / Supermarket

SC / Shopping Center

NSC / Neighborhood Shopping Center

CVS / Convenience Store

PB / Private Brand

Introduction

P.01 Marking the 50th Anniversary of

Our Public Listing

P.02 AEON Foundational Ideals

P.04 AEON Group Future Vision

P.05 AEON's FAQ: What is AEON?

P.06 Contents

QUESTION 01 What Kind of Group Is AEON?

AEON's Value Creation

P.07 AEON Businesses Supporting Value Creation

P.08 AEON by the Numbers

P.09 Growth of the Business in Asia

P.10 The Value Created Over Fifty Years as a Publicly Listed Company

P.11 Various forms of Capital Provide the Source for AEON's Sustainable Growth

P.12 The Value Creation Process

QUESTION 02 How Is AEON Pursuing Sustainable Growth?

Executive Message

P.13 Message from the President

P.18 Message from the CFO, Business Management

QUESTION 03 What Are the "Five Reforms"?

Business Strategies

P.22 History of AEON's Mid-term Management Plans

P.23 Acceleration and Evolution of the Digital Shift

P.28 Establishment of Unique Value by Supply Chain P.31 Advancement of Health & Wellness for a New Era P.33 AEON's GMS Strengths

P.35 Creation of the AEON Living Zone

P.38 Further Acceleration of the Shift to Asian Markets

P.42 Promotion of Green Strategy

QUESTION 04 What Are AEON's Sustainability Initiatives?

AEON's Sustainability

P.43 AEON's Sustainable Management

P.45 History of Sustainability

P.46 AEON's Approach to Becoming Nature-positive

P.47 FY2024 Group-wide Priority Environmental Measures

P.48 FY2023 Report on Initiatives in Key Areas (Material Issues)

P.49 Disclosures Based on

the TCFD / TNFD Recommendations

P.53 Realization of a Decarbonized Society

P.56 Preservation of Biodiversity (Sustainable Procurement)

P.58 Preservation of Biodiversity (AEON Forest Program)

P.59 Promotion of Resource Recycling

P.61 Promotion of Resource Recycling (Food Waste)

P.62 Collaborating with the Community

P.64 Response to the 2024 Noto Peninsula Earthquake: Protecting Customers Safeguarding Our Communities

QUESTION 05 What Is AEON's View of Human Resources?

AEON's Human Capital

P.65 Respect for Human Rights

P.70 Message from the Chief Human Resources Officer

P.71 Human Capital

P.74 Human Resource Development & Educational Systems

P.75 Moving from Instillation to Implementation of the AEON Group Future Vision

P.76 Health and Productivity Management

P.77 Diversity, Equity & Inclusion (DE&I)

P.79 Message from the Division Head of the DE&I Promotion Office

P.80 Roundtable discussion: What Kind of DE&I Supports AEON's Sustainable Growth

P.83 Compliance (Corporate Ethics)

QUESTION 06 What Is AEON's Management Framework?

Corporate Governance

P.84 Governance at AEON

P.85 Board of Directors and Executive Officers

P.88 Corporate Governance

P.94 Messages from Outside Directors

DATA 07

Data Section

P.105	Financial Highlights
P.106	Non-Financial Highlights
P.107	List of Fundraising
P.108	External Rating / Major Indexes
P.109	Corporate Data / IR and SR Activities /
	Foundations
P.110	Shareholder-related Information
P.111	Keyword Index

AEON's Value Creation

Executive Message

Business Strategies

AEON's Sustainability

AEON's Human Capital

Corporate Governance

Data Section

07

QUESTION 01 What Kind of Group Is AEON?

AEON Businesses Supporting Value Creation

Over the years, AEON has grown and expanded into a range of businesses by addressing customer needs and anticipating changes in people's lifestyles. Having started in the retail business, we have now made inroads into the Shopping Center Development Business, developing and operating shopping malls, the Financial Services Business offering credit card, banking, and insurance services, and the Services & Specialty Store Business.

General Merchandise Store Business

Supermarket Business

Discount Store Business

Health & Wellness Business

Financial Services Business

Value

provided

Results

This segment operates general merchandise stores to support customers' food, clothing and housing needs with a specialized selection of products and services.

4,000			28.3	30
3,000				20
2,000			3,389.3	10
1,000			0
0				-10
FY21	FY22	FY23

This segment operates community-based supermarkets, small-sized stores, and convenience stores, offering enhanced services and lineups of everyday necessities focused on foodstuffs.

2,800				60
2,100			41.9 45
1,400			2,782.1	30
700			15
0				0
FY21	FY22	FY23

To continue supporting household finances, we implement measures to lower costs such as consolidating product purchasing and integrating logistics, to achieve management that thoroughly pursues low prices.

600			8.4	10.0
450			7.5
300			400.4	5.0
150			2.5
0				0
FY21	FY22	FY23

This segment operates drugstores and dispensing pharmacies to support the health of customers in the community. In addition to enhancing product lineups, ranging from medical products and health foods to daily necessities, it is expanding services to include homecare dispensing.

1,600				60
1,200			42.6 45
800			1,235.1	30
400			15
0				0
FY21	FY22	FY23

This segment offers integrated financial services originating from retail, which combines credit, banking, insurance services, and e-money Waon cards, in Japan, China, and ASEAN countries.

60080

1. 51.2 60

1. 40

150			483.5	20
0				0
FY21	FY22	FY23

Shopping Center Development Business		Services & Specialty Store Business

International Business	Functional Company and Others

Value

provided

Results

This segment develops and operates community -friendly shopping malls in Japan, China, and ASEAN countries. In cooperation with other segments, it is working to enhance its services and facilities.

600					80
450			47.3	60
300			40
150			468.3		20
0					0
FY21	FY22	FY23

This segment provides services that make everyday life more convenient and comfortable, and also operates an array of specialty stores tailored to diversifying customer needs.

800				30
600			17.2	20
400			797.4	10
200			0
0				-10
FY21	FY22	FY23

This segment operates in China and ASEAN countries to offer products and services tailored to the needs and lifestyles of the respective countries or regions.

600	20
450	15

300 10.3 10

150			508.7	5
0				0
FY21	FY22	FY23

This segment is in charge of product development and quality control for AEON's private brand "Topvalu," as well as establishing infrastructure such as logistics, systems, and IT.

Topvalu sales			1,200
(billion yen)			900
			1,001.0	600
			300
				0
	FY21	FY22	FY23

Operating revenue (billion yen) Operating profit (billion yen)

AEON's Value Creation

Executive Message

Business Strategies

AEON's Sustainability

QUESTION 01 What Kind of Group Is AEON?

AEON by the Numbers (As of the end of February 2024)

AEON's Human Capital

Corporate Governance

Data Section

08

9,553.5billion yen

Operating		General Merchandise Store Business	3,389.3 billion yen
revenue		Supermarket Business	2,782.1 billion yen
	Health & Wellness Business	1,235.1 billion yen
		Discount Store Business	400.4 billion yen
		Financial Services Business	483.5 billion yen
		Shopping Center Development Business	468.3 billion yen
		Services & Specialty Store Business	797.4 billion yen
		International Business	508.7 billion yen

AEON private brand	Approx.	Number of stores /
1,400.0billion yen
sales:	locations:

Operating profit

17,887 stores / locations

in 14countries

250.8billion yen

	General Merchandise Store Business	28.3 billion yen
	Supermarket Business	41.9 billion yen
	Discount Store Business	8.4 billion yen
	Health & Wellness Business	42.6 billion yen
	Financial Services Business	51.2 billion yen
	Shopping Center Development Business	47.3 billion yen
	Services & Specialty Store Business	17.2 billion yen
	International Business	10.3 billion yen

AEON Financial Service Co., Ltd.

Number of consolidated

active cardholders: 50,270thousand

people

(Of which, AEON Topvalu brand sales were 1,001.0 billion yen)

Total group iAEON app	Approx.	Groupwide
10,000thousand
downloads:	employees:
	* As of June 2024

(Of which, 18,780 thousand were overseas cardholders)

Approx.	Cumulative Waon
600 people	101.9 cards
cards issued:
thousand		million

AEON's Value Creation

Executive Message

Business Strategies

AEON's Sustainability

AEON's Human Capital

Corporate Governance

Data Section

09

QUESTION 01 What Kind of Group Is AEON?

Growth ofthe Business in Asia (As of the end of February 2024)

Thailand		Mongolia		China		Japan
• SM:	36 stores	• Specialty Store: 7 stores	• GMS:	45 stores	• GMS:	517 stores
• Services Business:	31 locations			• SM:	36 stores	• SM:	2,187 stores
• Financial Services: 102 locations			• Services Business: 187 locations	• DS:	566 stores
				• Financial Services:	23 locations	• HC:	118 stores
				• Mall-type SC:	28 locations	• CVS:	1,851 stores
				• Other (retail):	73 stores	• Services Business: 1,644 locations
Cambodia		Myanmar				• Specialty Store:	4,340 stores
• GMS:	3 stores				• Drug Store:	3,233 stores
• GMS:	2 stores
		• Financial Services: 353 locations
• SM:	14 stores
• SM:	7 stores
		• Mall-type SC:	202 locations
• Services Business: 4 locations
• Financial Services: 2 locations
	• NSC:	156 locations
• Financial Services:16 locations
				• Other (retail):	1,357 stores
• Mall-type SC:	4 locations
• Other (retail):	1 store
						Vietnam
India				Philippines	• GMS:	6 stores
• Services Business: 1 location			• SM:	34 stores
		• Services Business: 58 locations	• CVS:	164 stores
• Financial Services: 4 locations
		• Services Business: 30 locations
				• Financial Services: 4 locations
				• Financial Services: 4 locations
Malaysia				Laos		• Mall-type SC:	6 locations
• GMS:	33 stores				• Other (retail):	15 stores
• SM:	8 stores			• Financial Services: 2 locations
• DS:	21 stores
• Services Business: 118 locations
• Financial Services: 65 locations
• Mall-type SC:	28 locations
• Other (retail):	65 stores

Other
0.7 billion yen		Japan
China	Segment	8,739.3 billion yen
326.2 billion yen	Operating
	Revenue by
ASEAN	Region
487.2 billion yen
(FY2023)
Other
0.2 billion yen		Japan
China		194.4 billion yen
11.3 billion yen	Segment
ASEAN	Operating Profit
44.8 billion yen	by Region
	(FY2023)

Singapore	Indonesia		Australia
• Drug Store:13 stores	• GMS:	3 stores	• Directly operated
	• SM:	2 stores	farm in Tasmania: 1 location
	• Services Business: 35 locations
	• Financial Services: 17 locations
	• Mall-type SC:	4 locations
	• Other (retail):	1 store

GMS (General Merchandise Store):	609 stores
SM (Supermarket):	2,324 stores
DS (Discount Store):	587 stores
HC (Home Center):	118 stores
CVS (Convenience Store):	2,015 stores
Services Business:	2,015 locations
Specialty Store:	4,347 stores

Drug Store:	3,246 stores
Financial Services:	592 locations
Mall-type SC (Shopping Center)*1:	272 locations
NSC (Neighborhood-type Shopping Center)*2:	156 locations
Other (retail):	1,512 stores
Directly operated farm in Tasmania:	1 location

Number of stores / locations operated by consolidated subsidiaries and equity-method affiliate

*1 Includes SCs operated under the name of AEON Mall as well as those with total leased area of over 20,000m2 operating under the AEON Mall name.

*2 NSCs operated under the name of AEON Town