Aeon : (Delayed) FY2020 Presentation Materials

April 27, 2021 at 05:49 am EDT

FY2020

Presentation Materials

April 9, 2021

Consolidated Results

・Operating revenue, operating profit, ordinary profit achieved higher than forecasts. ・For FY2021 we aim a V-shaped recovery to pre-pandemic levels.

	FY2019	FY2020	To Forecast
	（Results）	（Results）	%・change※
Operating	8,604.2	8,603.9	+1.2
Revenue

Operating	215.5	150.5	+0.5
Profit	〜 +30.5

Ordinary	205.8	138.8	+18.8
Profit	〜 +38.8

Profit attributable to	26.8	-71.0	－
owners of the parent

（billion yen）

FY2021

（Forecast）

8,620.0

200.0 〜220.0

190.0 〜210.0

20.0 〜30.0

※Compared with our revised forecasts on 23rd December, 2020

Profit attributable to owners of the parent

・Impacted by one-off factors : tenant rent exemptions and loss of sales opportunities during the temporary closure of malls.

・Made losses but lead to V-shaped recovery and long-term improvements of profitability.

（billion yen）

Main factors of YoY change (Efforts to Sustainable management, impact of

COVID-19）

Results YoY

change

Decrease of operating profit -64.9・Loss on the valuation of products （Reducing Inventory）

・Temporary suspension and shortened business hours of shopping malls, service & specialty stores, financial service business

Decline in extraordinary income -21.7・Decline in gain on sale of investment securities

・Decline in gain on sale of fixed assets

-71.0-97.8

Increase of extraordinary loss +32.6・Exempting rents for tenants

（Mutually-beneficial and harmonious relationships with business partners ）

・Fixed costs during suspension ・Expenses of infection control

Increase of taxes adjustment +7.6Drawing down of deferred tax assets （AEON Retail +22.2）

Solve in FY2021

Through "earning structure improvements" and "infectious disease

control measures and efforts for emerging "new normal",

V-Shaped recovery and stainable management

Operating Results（by segment）

・SM and Health＆Wellness posted sharp profit growth due to continued operation as lifelines. ・GMS impacted by temporary suspension of tenant zones. Implemented inventory reduction to

improve gross profit margin.

・Financial Service, Service & Specialty Store, and International affected by suspended operation and shortened business hours in Japan and overseas. → Improving profitability through infectious disease control measures and response to the emerging "new normal".

【Earnings by segment】

（billion yen）

	Operating	YoY(%)	Operating	YoY change	Infection control
	Revenue	Profit	AEON COVID19

Consolidated Total	8,603.9	0.0	150.5	-64.9	Protocol for Infectious
Disease Control
SM	3,265.6	+1.3	50.6	+29.1	+35.0	operation as
					Continued
Health＆ Wellness	956.5	+8.9	41.5	+5.9		lifelines
	Solving
GMS	3,069.5	0.0	-15.6	-22.9	-22.9
issues
					underlying
Financial Services	487.5	+0.6	42.6	-27.8		Suspended
Shopping Center	327.0	-12.1	35.7	-27.5
	operation
Development	-82.2
Service and Specialty	642.3	-13.7	-17.6	-22.2	and
	shortened
Store		business
International	414.4	-5.6	6.0	-4.7		hours

General Merchandising Store Business（AEON Retail）

・Responded to the "new normal" through expanding online supermarket services and met stay-at-home demand. Efforts to improve profitability.

【Same-store sales by category】

Period of the state of emergency declared

# of

150%

Home

COVID数-19

⾐Apparel料

⾷Food品

住居余暇

H&BC

cases

furnishing

100%

50%

（case）

50,000

40,000

30,000

20,000

10,000


【Efforts	in response to the "New Normal"】		0
【Regi Go service】	【Online Supermarket】 (end of FY)	39W	45W 47W 49W 51W 53W
200 storesoffered online shopping and delivery
Implemented 27 stores※1
service. All 200 stores provide the pick-up service※2

【Sporsium】 Expanded approx. 350 stores in response to fitness at-home

demand※3
【Winter Gifts】 Expanded sales of local brands	【Collaboration with producers】 Expanded sales of
seafoods, having an issue in sales channels

【Improved earnings structure】

【Revised organization】 Redeployed about 860 employees from head office to stores

【Streamlined cost management】 Review of
promotion, expansion of Regi Go, semi-self-	【Reduced inventory】
checkout, online meeting、utilization of RPA・AI


	※1	As of end of March 2021. Total of AEON Retail and AEON Retail Store	4
Copyright 2021 AEON CO., LTD. All Rights Reserved.	※2	Picture shows drive-throughpick-up service. Counter pick-up service、locker pick-up service also offered.
※3	As of end of February 2021. Total of AEON Retail and AEON Retail Store.

General Merchandising Store Business（AEON Retail）

・Initiatives in response to the "New Normal" resulted steadily. Operating Profit in the second half of the FY2020 recovered to prior-year levels.

Regi Go usage ratio （in food checkout）

Approx. 20％

Winter Gifts EC Sales YoY

+37％

Sporsium Sales YoY

+33％

Results of various

initiatives

Online Supermarket Sales YoY (4Q)

+35％

Number of orders of the Pick-Up service（4Q result compared to

3Q ) approx. 1.7 times

Inventory level compared to the beginning of the Fiscal year.

Approx. 20% decrease

Expenses of head office YoY

-21％

Same-store expenses of stores YoY

-5％

Same-storesales YoY※	(%)	Tenant Income YoY※	(%) Operating Profit YoY change※	（billion yen）
0				0				00
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q
1Q	2Q	3Q	4Q
-5				-20
								-50.0

-10

Gross profit margin YoY change(%)

+2
+0	1Q	2Q	3Q	4Q
-2
-4

-40

					-10.0
Same-storeexpenses YoY※ (%)	-100
-150
0					-15.0
1Q	2Q	3Q	4Q
-2	-200
-4					-20.0
				-250
-6
				-25.0

Copyright 2021 AEON CO., LTD. All Rights Reserved.	※ Excluding the impact of the transfer to Tohoku business.	5

Supermarket Business

・Gained demand for eating at home. Sales increased during the second state of emergency. ・Rapidly expanded the non-contactself-check out service in response to customer needs.

・Daiei achieved sales and profit growth and net profit returned to black for first time since 2007.

【Same-store sales YoY %	Major SM companies】				（case）
120%					Period of the state of emergency declared		50,000
				# of

115%					陽性者数		SM計

				COVID-19	SM Total
110%					cases				40,000

105%									30,000

100%

【Business Integration】							20,000
95%
	March
90%		Hokkaido︓AEON Hokkaido, Maxvalu Hokkaido	September	March
		Tohoku︓Maxvalu Tohoku、AEON Retail Tohoku	10,000
85%		Food Business				Kyushu︓AEON Kyushu, AEON	DS︓Big A、A・Colle
80%		Kinki︓Daiei、Kohyo				Store Kyushu, Maxvalu Kyushu		0

1W 3W 5W 7W 9W 11W 13W 15W 17W 19W 21W 23W 25W 27W 29W 31W 33W 35W 37W 39W 41W 43W 45W 47W 49W 51W 53W

【U.S.M.H Non-contactself-checkout service】

Jun. 2019 Introduced experimentally

Oct. 2019 Deployed for customers

Jun. 2020 Started full-scale expansion

Aug. 2020 Introduced to 72 Stores totally

Feb. 2021 252 stores totally

【Daiei Operating Results (non-consolidated)】

	Result	YoY	（billion yen）
	%・change
Operating	310.1	+4.1%	Growth 2 consecutive yr.
Revenue

Operating	3.3	+4.3	Black since 2011
Profit
Net Profit	4.0	+5.2	Black since 2007

Health＆Wellness Business

・Responded the demand for infection prevention and stay-at-home.

・Pursued M&A and opening new stores. Accelerate expanding drugstores offers prescription drugs as up-front investment.

【Same-store sales YoY% of Welcia】

（case）

140%

Period of State of emergency declared

50,000

130%

120%

110%

100%

# of

陽性者数ウWelciaエルシア COVID-19 cases

45,000

40,000

35,000

30,000

25,000

20,000

【Expanding growth platform】

90%	M&A		July	November	December
	March	June	Joshin	Mitsuwa
	YODOYA	Marue Drug	Neo Pharma	(Store	(Store
80%	Summit	transfer)	transfer)

15,000

10,000

5,000

1W 3W 5W 7W 9W 11W 13W 15W 17W 19W 21W 23W 25W 27W 29W 31W 33W 35W 37W 39W 41W 43W 45W 47W 49W 51W 53W

Opened new stores	Renovation	Drugstores offers prescription drugs
120 stores	102 stores	1,638 stores（YoY +201 stores）

※ 出店、改装、調剤併設店舗数は国内実績 7

Shopping Center Development and Service & Specialty Store Business

・Earnings impacted significantly with temporary closure of all domestic malls in the first quarter.

Thorough infection disease control got back on track for a recovery. ・Continued opening new malls in Japan and overseas.

【Same-store sales YoY % of AEON Mall tenants、AEON Entertainment, AEON Fantasy(Japan) 】

Period of state of emergency declared

（case）

50,000

250%

陽#性of者COVID数 -19 cases

8th January〜

45,000

イAEONオンファFantasyンタジー

40,000

200%

until lifted

モ

Mall temporary suspension

AEON Entertainment

Shortened

35,000

イオンエンターテイメント

business hours

30,000

150%

at Malls in

Full building temporary

イAEONオンモーMallル

25,000

shutdown

areas declared

100%

20,000

15,000

50%

10,000

5,000

9W 11W 13W 15W 17W 19W 21W 23W 25W 27W 29W 31W 33W 35W 37W 39W 41W 43W 45W 47W 49W 51W 53W

【AEON Mall: Opening & refurbishment in FY2020】

Area

Opening

Refurbishment

Overseas

2（Indonesia, Vietnam）

2（including one

expansion）

Japan

1（Saitama Pref.）

10（including 2

6th

mall in Vietnam:AEON Mall Hai Phong Le Chan

expansions）

（Opened in December 2020）

Financial Service Business

・Expense increased due to building up allowance for doubtful accounts in the first half in Japan and overseas. Collection activities smoothly progressed.

・Financial results of AEON Financial Service exceeded its earnings forecasts.

【AEON Financial Service︓Bad debt expenses※】

（billion yen）

300 Japan 8.1

200

100

Overseas 24.2

10.5

4.0

5.3

8.5

9.0

4.0

【Financial Service Business︓change of quarterly Operating Profit】

（billion yen）

Operating Profit

Result

YoY change

Result

YoY change

Result

YoY change

Result

YoY change

-0.6

-17.1

9.3

-8.3

17.4

+11.9

16.5

-14.2

Main factors

Overseas︓Restrictions

Japan︓Built up

Japan︓Decrease in

Japan︓Decline in gains

of YoY

on activities such as

allowance for doubtful

promotion expenses

from the securitization

change

lockdown. Built up

accounts.

（Big marketing

of receivables

allowance for doubtful

campaign to promote

compared with prior

accounts for future risk.

cashless in prior year）

year

※Total amount of allowance for doubtful accounts and bad debt loss

Operating Results by Area

・Both ASEAN and China were on recovery track after 2nd quarter, although there were differences in infection status and activity restrictions by the government in each country.

【Operating Profit by Area】

14140.0		ASEAN	（billion yen）
						2020FY2020年度
	2019年度

		FY2019
12120.0
10100.0
8.800
6.600
4.400
2.200
0 0
1Q	2Q			3Q	4Q
--220.0

--440.0
		Increased allowance for doubtful
			accounts in financial service
--660.0			business overseas
			→ Collection proceeded smoothly
--880.0			afterwards.

14014.0

1220.0

1000.0

8.00

6.00

4.00

2.00

-20.0

-40.0

-60.0

-80.0

CHINA	（billion yen）

2019FY2019年度		FY20202020年度

Up to 11 out of 21 malls in China temporarily closed.

Specialty store sales were on recovery track after wards.

【Same-mall-tenant sales YoY】

1Q 47.5% 2Q 74.1% 3Q 94.0% 4Q 102.9%

Fiscal 2021 Forecast

・V-shaped recovery to the pre-pandemic levels by recovery of GMS, Shopping（億円） Center Development, Service & Specialty Store and International Businesses.

【FY2021 Forecast】			（billion yen）
	FY2019	FY2020	FY2021	YoY
	（Forecast）	%・change


Operating Revenue	8,604.2	8,603.9	8.620.0	+0.2%
Operating Profit	215.5	150.5	200.0〜220.0	+49.4〜+69.4
Ordinary Profit	205.8	138.8	190.0〜210.0	+51.1〜+71.1
Profit attributable to	26.8	-71.0	20.0〜30.0	+91.0〜101.0
owners of the parent

Forecast of Dividend Payment

・Maintain dividends level. V-shaped profit recovery in FY2021 and stable dividend policy.

【Dividend per share】

	FY2020	FY2021
	（Forecast）

End of second
Ordinary Dividend 18yen	Ordinary Dividend 18yen
quarter
Year-end	Ordinary Dividend 18yen	Ordinary Dividend 18yen
Total	Ordinary Dividend 36yen	Ordinary Dividend 36yen

The End of FY2021 Consolidated Balance Sheet

（billion yen）

Assets	2020/2	2021/2	change	Liabilities and net	2020/2	2021/2	change
assets
（main items only）	from ʻ20/2	from ʻ20/2

				（main items only）
Cash & deposit	1,221.9	1,287.5	+65.5	Notes and accounts	1,068.4	1,072.4	+3.9
payable
Notes and accounts				Interest bearing debt	1,941.7	2,102.2	+160.5

			(excl. finance
receivable - trade
1,626.7	1,602.7	-24.0	subsidiaries)
(incl. installment
receivables)				Interest bearing debt	1,064.9	1,043.4	-21.4
				(finance subsidiaries)

Inventories	575.7	542.8	-32.8	Deposits for banking
				3,784.3	4,010.0	+225.7
Operating loans,				business


loans & bills	2,483.1	2,733.2	+250.0		9,213.4
discounted for	Total liabilities	9,725.4	+512.0

banking business
Property, buildings,	3,094.3	3,062.9	-31.4	Shareholdersʼ equity	1,025.8	923.9	-101.8
and equipment

				Total net assets	1,849.2	1,755.7	-93.5

Investments and				(excl. finance
953.1	977.3	+24.2	(1,498.6)	(1,393.6)	(-105.0)
other assets	subsidiaries）

Total Assets				Total net assets and	11,062.6	11,481.2	+418.5
11,062.6	11,481.2	+418.5
liabilities

(excl. finance	(5,665.3)	(5,749.2)	(+83.8)	(excl. finance	(5,665.3)	(5,749.2)	(+83.8)
subsidiaries）	subsidiaries）

Reference Materials 1

FY2020 Consolidated Cash Flow Statement


			（billion yen）
Main items only	FY2019	FY2020	YoY change
Cash Flow from Operating Activities	624.6	396.4	-228.1
（Except for increase (decrease) in financial loan and time
deposits, loans, and bills discounted for banking	(408.5)	(418.4)	(9.8)
business）
Income before income taxes	174.6	53.2	-121.4
Depreciation	292.7	296.6	3.8
Increase (decrease) in working capital	6.7	56.2	49.5
Increase (decrease) in financial loan and time deposits,	216.0	-21.9	-238.0
loans, and bills discounted for banking business
Payment of corporate taxes	-100.8	-83.5	17.3
Other-net	35.2	95.8	60.6
Cash Flow from Investing Activities	-341.4	-341.8	-0.3
CAPEX	-417.7	-301.2	116.5
Sale of tangible fixed assets	87.0	34.8	-52.1
Other-net	-10.7	-75.4	-64.6
Cash Flow from Financing Activities	51.1	24.2	-26.8
Increase in cash and cash equivalents	326.6	75.8	-250.8

Reference Materials 2

FY2020 Investment Results（by segment）

				（billion yen）
		FY2020		YoY change

Consolidated Total		301.2	-116.5
		11%
	GMS	58.6	-66.6


	SM	22%	60.1	-12.7


	Health＆Wellness	15.6	-0.6



	Financial Service		44.8	-0.7


	Shopping Center		84.5	-26.0


	Development
	14%
	Service & Specialty	18.4	-3.0

	Stores

	International	24%	5.8	-5.5


	Other		13.0	-1.1

Reference Materials 3

FY2020	Consolidated Financial Indicators



		FY2019	FY2020
		Result	Result

ROE		2.5％	-7.0％
ROIC		3.9％	2.6％
DE Ratio	※	1.2	1.2
Debt/EBITDA Ratio ※	3.3	3.5

※Debt has been adjusted considering the capital nature of hybrid bonds and hybrid loans excluding Financial Service Business. Debt offset by cash and cash equivalents.

Reference Materials 4

FY2020 Results of Daiei and ex-Daiei GMS

				（billion yen）

		Operating	Operating
Business	Company Name	Revenue	Profit
Segment				YoY
	Result	YoY	Result

		change

	AEON Retail store
GMS	※Former Daiei GMS in Kanto,	109.5	-10.1%	-3.2	+2.0
	Kinki, and Nagoya region

SM	Daiei	310.1	+4.1%	3.3	+4.3

※AEON Store Kyushu, which succeeded the former Daiei GMS in Kyushu, merged with AEON Kyushu and Maxvalu Kyushu in September 2020.

Reference Materials 5

Disclaimer regarding Forecast Statement

These materials are intended for the purpose of providing information, and not to encourage any specific actions. The company has prepared these materials (including business plans) based on available information believed to be reliable, but there are risks and uncertainties. The company bears no liability for the accuracy or completeness of the information.
Please use these materials at your own discretion. The company bears no liability for any loss or harm that may arise from investment decisions made on the basis of any of the projections or targets contained in these materials.
All rights of authorship of these materials revert to AEON CO., LTD. These materials may not be reproduced or distributed without the permission of the company

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