Aeon : (Delayed) Financial Results for the Nine Months ended November 30, 2021

This is an abridged translation of the original Japanese document and is provided for informational purposes only. If there are any discrepancies between this and the original, the original Japanese document prevails.

Financial Results for the Nine Months ended November 30, 2021

January 12, 2022

Company name	Aeon Co., Ltd.
Listings	The First Section of Tokyo Stock Exchange
Security code	8267
URL	http://www.aeon.info/en/
Representative	Akio Yoshida, President
Contact	Takeshi Miyazaki
	Chief Officer, Finance and Accounting
Telephone	[phone]

Scheduled dates:

Submission of statutory quarterly financial report Commencement of dividend payments Supplementary materials to the quarterly results Quarterly earnings results briefing

January 14, 2022

-

Available

Yes (targeted at institutional investors and analysts)

(Amounts rounded down to the nearest million)

1. Consolidated Financial Results for the Nine Months ended November 30, 2021

(March 1, 2021 to November 30, 2021)

(1) Operating Results					(Percentage figures represent year-on-year changes)
		Operating revenue	Operating profit			Profit (loss)
		Ordinary profit	attributable to
									owners of parent
	Nine months ended	million yen	%	million yen	%	million yen	%	million yen	%
	6,450,567	0.9	89,245	31.0	83,889	42.2	(8,956)	-
	November 30, 2021
	Nine months ended	6,392,538	0.1	68,111	(33.9)	58,997	(36.8)	(62,590)	-
	November 30, 2020
	Note: Comprehensive income:	Nine months ended November 30, 2021: 58,722 million yen	(-%)
			Nine months ended November 30, 2020: -39,912 million yen	(-%)
			Earnings	Earnings per share
			per share	- fully diluted
	Nine months ended		yen		yen
			(10.59)		-
	November 30, 2021
	Nine months ended			(74.09)		-
	November 30, 2020

Note. Even though the Company has dilutive shares, earnings per share - fully diluted is not indicated because a net loss per share was recorded in each of the above periods.

(2) Financial Position

	Total assets	Net assets	Total equity ratio	Net assets per
	share
	million yen	million yen	%	yen
November 30, 2021	11,647,054	1,766,134	8.1	1,118.17
[excl. Financial Services]	[5,799,896]	[1,376,988]	[14.5]	-
February 28, 2021	11,481,268	1,755,776	8.5	1,147.56
[excl. Financial Services]	[5,749,281]	[1,393,624]	[15.3]	-

Reference: 1. Total equity: November 30, 2021: 946,400 million yen February 28, 2021: 970,321 million yen Total equity = Shareholders' equity plus total accumulated other comprehensive income.

2. The figures in square brackets represent consolidated financial position excluding the Financial Services Business.

2. Dividends

				Dividend per share
		End-first		End-		End-third	Fiscal year-
Record date or			second		Annual total
period		quarter		quarter		quarter	end
Year ended		yen		yen		yen	yen	yen
-	18.00	-		18.00		36.00
February 28, 2021
Year ending	-	18.00	-
February 28, 2022
Year ending								18.00		36.00
February 28, 2022
(forecast)

Note: No changes were made to the latest release of dividend forecasts.

3. Forecast of Consolidated Earnings for the Fiscal Year ending February 28, 2022

(March 1, 2021 to February 28, 2022)

(Percentage figures represent year-on-year changes)

							Profit attributable	Earnings
	Operating revenue	Operating profit	Ordinary profit	to owners of
	per share
							parent
	million yen	%	million yen	%	million yen	%	million yen	%	yen
			200,000	32.8	190,000	36.9	20,000		23.65
Full year	8,620,000	0.2	to	to	to	to	to	-	to
			220,000	46.1	210,000	51.3	30,000		35.48

Note: No changes were made to the latest release of earnings forecasts.

*Notes

1. Changes affecting the consolidation status of significant subsidiaries during the period: None
2. Application of special accounting treatment for the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policy, changes in accounting estimates, and retrospective restatement:
4. 1. Changes in accordance with amendments to accounting standards: None
   2. Changes other than the above 1): None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
5. Number of shares issued (common stock)
6. 1. Number of shares issued at end of period (treasury stock included):

	November 30, 2021:	871,924,572 shares
	February 28, 2021:	871,924,572 shares
2)	Number of shares held in treasury at end of period:
	November 30, 2021:	25,541,084 shares
	February 28, 2021:	26,370,771 shares
3)	Average number of shares outstanding during the period:

Nine months ended November 30, 2021: 845,925,857 shares

Nine months ended November 30, 2020: 844,809,895 shares

The Company's stock held by the Employee Stock Ownership Plan Trust (November 30, 2021: 3,625,400 shares, February 28, 2021: 4,388,100 shares) is included in the number of shares held in treasury.

*Quarterly review status

This report is exempt from the quarterly review by certified public accountant or audit firm.

*Appropriate Use of Earnings Forecasts and Other Important Information

(Note on the forward-looking statements)

The above forecasts, which constitute forward-looking statements, are based on information available to the Company as of the date of the release of this document. Actual results may differ materially from the above forecasts due to a range of factors. Please refer to "(3) Consolidated Earnings Forecast" on page 10 in section "1. Review of Operating Results and Financial Statements" in the Accompanying Materials for the assumptions underlying the forecasts and notes concerning their appropriate use.

Accompanying Materials
Contents
1. Review of Operating Results and Financial Statements	2
(1)	Analysis of Operating Results	2
(2)	Consolidated Financial Condition	10
(3)	Consolidated Earnings Forecast	10
2. Consolidated Financial Statements and Main Notes	11
(1)	Consolidated Balance Sheet	11
(2)	Consolidated Statement of Income and Consolidated Statement of	14
	Comprehensive Income
	Consolidated Statement of Income	14
	Consolidated Statement of Comprehensive Income	15
(3)	Notes on the Consolidated Financial Statements	16
	(Notes on the Going-concern Assumption)	16
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	16
	(Additional Information)	16
	(Segment Information)	17
	(Material Subsequent Events)	20

1

1. Review of Operating Results and Financial Statements

(1) Analysis of Operating Results

1) Summary of Operating Results

For the first nine months of the fiscal year ending February 28, 2022 (March 1, 2021 - November 30, 2021), Aeon Co., Ltd. (hereinafter "Aeon") posted consolidated operating revenue of 6,450,567 million yen (up 0.9% year on year), marking an increase in consolidated operating revenue for the first nine months of the fiscal year for the 12th consecutive fiscal year, and setting a new record high. Consolidated operating profit was 89,245 million yen (up 31.0%), while ordinary profit was 83,889 million yen (up 42.2%), both significant increases. Loss attributable to owners of parent also improved significantly to 8,956 million yen (an improvement of 53,634 million yen year on year).

During the first nine months of the fiscal year, the external environment was more challenging than initially anticipated. This included continuous and prolonged restrictions on activities through the end of September, such as the state of emergency declared in response to the dramatic surge in infections from new COVID-19 variants, and the accompanying ongoing deterioration in consumer sentiment. Amid this environment, the Supermarket Business (which bolstered its efforts to respond to ongoing dine-in demand), the Discount Store Business, the Health & Wellness Business (which is boosting the number of its drugstores able to process prescriptions), and the Financial Services Business (which has strengthened its screening and collection framework improve the quality of its loans), each posted segment profit exceeding that of the first nine months of the fiscal year ended February 29, 2020, prior to the COVID-19 pandemic. Although the GMS (General Merchandise Store) Business, Shopping Center Development Business, and the Services and Specialty Store Business were each impacted by the COVID-19 pandemic, they were able to improve profitability compared to the same period of the previous fiscal year by bolstering sales of Aeon's Topvalu private brand, enhancing online sales, carrying out initiatives to spur demand such as Black Friday sales, implementing cost structure reforms, and otherwise advancing efforts to quickly respond to customers' rapidly changing needs and build a base for growth.

Common Group Strategy

• The Group instituted the Aeon Group Medium-term Management Plan (FY2021-FY2025). With this new medium-term management plan the Group aims to transition to sustainable growth by 2030, viewing the further acceleration, amid the COVID-19 pandemic, of the societal changes that had been already been taking place for some time as a good opportunity for the Group to achieve dramatic growth. These societal changes include the significant changes in customers' behavior, perceptions, and values due to the COVID-19 pandemic, as well as changes in demographics, changes in customers' actions in response to climate change, the penetration of digital technologies into all aspects of life, heightened environmental and health awareness, as well as structural changes in the competitive environment. Under the new medium-term management plan, as a common strategy for the Group, the Group has set forth "Five Reforms" (accelerate and evolve the shift to digital, create unique value with a supply chain-focused outlook, evolve health and wellness, create "AEON Living Zones", and further accelerate the shift to Asian markets), thereby aiming to further accelerate the four "strategic shifts" (Regional, Digital, Asia, plus Investment to support these) implemented up until this point, as well as build a business foundation to realize sustainable growth from 2025 and beyond. In addition to reforming the existing business model and establishing a new growth model, the Group will boost profitability and concentrate investment of management resources thus produced into new growth domains, thereby having the Group work as one to acquire new growth opportunities. Please refer to https://www.aeon.info/en/ir/policy/strategy/ for more information on the new medium-term management plan.

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