Aeon : (Delayed) Financial Results for the Three Months ended May 31, 2022

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 Three Months ended May 31, 2022

July 6, 2022

Company name	Aeon Co., Ltd.
Listings	Tokyo Stock Exchange (Prime Market)
Security code	8267
URL	http://www.aeon.info/en/
Representative	Akio Yoshida, President
Contact	Hiroaki Egawa
	Executive Officer, Finance and Business Management
Telephone	[phone]

Scheduled dates:

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

July 15, 2022

-

Available

Yes (targeted at institutional investors and analysts)

(Amounts rounded down to the nearest million)

1. Consolidated Financial Results for the Three Months ended May 31, 2022

(March 1, 2022 to May 31, 2022)

(1) Operating Results					(Percentage figures represent year-on-year changes)
		Operating revenue	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Three months ended	million yen	%	million yen	%	million yen	%	million yen	%
	2,203,227	2.3	43,897	12.0	44,396	10.0	19,372	287.3
	May 31, 2022
	Three months ended	2,153,215	3.7	39,183	-	40,365	-	5,001	-
	May 31, 2021
	Note: Comprehensive income:	Three months ended May 31, 2022: 63,785 million yen (28.8%)
			Three months ended May 31, 2021: 49,513 million yen	(-%)
			Earnings		Earnings per share
			per share		- fully diluted
	Three months ended		yen		yen
		22.88		22.86
	May 31, 2022
	Three months ended			5.91		5.90
	May 31, 2021

Note: The Accounting Standard for Revenue Recognition, etc. (ASBJ Statement No. 29, March 31, 2020) has been applied from March 1, 2022. The figures for the three months ended May 31, 2022, are those after the application of the said accounting standard.

(2) Financial Position

	Total assets	Net assets	Total equity ratio	Net assets per
	share
	million yen	million yen	%	yen
May 31, 2022	12,060,283	1,922,838	8.1	1,156.96
[excl. Financial Services]	[6,005,345]	[1,514,484]	[14.5]	-
February 28, 2022	11,633,083	1,812,423	8.2	1,130.76
[excl. Financial Services]	[5,726,743]	[1,414,885]	[14.9]	-

Reference: 1. Total equity: May 31, 2022: 979,970 million yen February 28, 2022: 957,431 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.

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) has been applied from March 1, 2022. The figures for May 31, 2022, are those after the application of the said accounting standard.

2. Dividends

Dividend per share

Record date or

End-first

End-

End-third

Fiscal year-

second

Annual total

period

quarter

quarter

quarter

end

Year ended

yen

yen

yen

yen

yen

-

18.00

-

18.00

36.00

February 28, 2022

Year ending

-

February 28, 2023

Year ending

18.00

18.00

36.00

February 28, 2023

-

(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, 2023

					(March 1, 2022 to February 28, 2023)
					(Percentage figures represent year-on-year changes)
	Operating revenue	Operating profit	Ordinary profit	Profit attributable to	Earnings
	owners of parent	per share
	million yen	%	million yen	%	million yen	%	million yen	%	yen
			210,000	20.5	200,000	19.7	25,000	284.3	29.53
Full year	9,000,000	-	to	to	to	to	to	to	to
			220,000	26.2	210,000	25.7	30,000	361.2	35.43

Notes: 1. No changes were made to the latest release of earnings forecasts.

2. As Aeon has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), the figures in the abovementioned consolidated forecasts are those after the application of the said accounting standard. For reference, without the application of the said standards, the forecast for operating revenue would be 9,200,000 million yen (year-on-year change would be 5.6%).

*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: Yes
   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)

1)	Number of shares issued at end of period (treasury stock included):
	May 31, 2022:	871,924,572 shares
	February 28, 2022:	871,924,572 shares
2)	Number of shares held in treasury at end of period:
	May 31, 2022:	24,901,533 shares
	February 28, 2022:	25,207,930 shares
3)	Average number of shares outstanding during the period:
	Three months ended May 31, 2022:	846,835,314 shares
	Three months ended May 31, 2021:	845,641,717 shares

The Company's stock held by the Employee Stock Ownership Plan Trust (May 31, 2022: 3,028,000

shares, February 28, 2022: 3,313,300 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.

For the forecasts herein, please refer to "(3) Consolidated Earnings Forecast" on page 10.

Accompanying Materials
Contents
1. Review of Operating Results and Financial Statements	2
(1)	Analysis of Operating Results	2
(2)	Consolidated Financial Condition	9
(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
(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
	(Changes in Accounting Policy)	16
	(Additional Information)	17
	(Segment Information)	18
	(Material Subsequent Events)	21

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1. Review of Operating Results and Financial Statements

(1) Analysis of Operating Results

1) Summary of Operating Results

For the first three months of the fiscal year ending February 28, 2023 (March 1, 2022 - May 31, 2022), Aeon Co., Ltd. (hereinafter "Aeon") posted consolidated operating revenue of 2,203,227 million yen (up 2.3%), which exceeded the amount in the same period of the previous fiscal year and marked a new record high. Consolidated operating profit was 43,897 million yen (up 4,714 million yen), ordinary profit was 44,396 million yen (up 4,030 million yen), and profit attributable to owners of parent was 19,372 million yen (up 14,370 million yen). Each profit line marked a new record high.

By business segment, the General Merchandise Store (GMS) Business, which made earnings structural reforms, posted its first profit in the first quarter since the fiscal year ended February 2014. In addition, with the settling down of the impact of the COVID-19 pandemic and the accompanying move towards the normalization of social activities, the Shopping Center Development Business, the Services and Specialty Store Business, and the Financial Services Business each saw an increase in profit, as did the Health and Wellness Business which is working to add prescription drug dispensing functions at stores. The Supermarket Business and the Discount Store Business were both impacted by recoil declines following the special demand for eating at home during the pandemic, but were able to limit the impacts with the management integrations in each region that had been executed in previous fiscal years as well as efforts to improve productivity through the digital shift. The Financial Services Business saw a decline in profit, but profit was higher than expected due to the growth in card transaction volume in Japan and overseas, as well as efforts to reduce doubtful account-related costs, among other factors.

Common Group Strategy

• Raw materials and crude oil prices soared globally, leading to continued price increases on many daily necessities and resulting in added strain on household budgets. In response, in September 2021, in order to fully support customers' lifestyles, Aeon declared that it would not raise the prices of Topvalu food products (excluding fresh foods, rice, ready-to-eat foods, alcohol, gift products, special event products, and certain other products with altered specifications). In December, Aeon added Topvalu everyday goods to the scope of this price freeze, bringing the total number of products covered by the price freeze to approximately 5,000 items. In March 2022, as prices of daily necessities continued to rise even further, Aeon announced that it would extend the price freeze until the end of June through corporate efforts including using an original approach to logistics streamlining and expanding sales volumes. With this announcement, sales even in the food main category increased approximately 30% as customers showed strong support for Aeon. In this way, this price freeze initiative resulted in an increase in customers who made the decision to try Topvalu food products. In addition, Aeon worked to develop new categories that it had not handled before, as well as develop products with concepts that other companies do not have. Topvalu premium beer, which was launched in March, was well received by customers for being a high-quality beer at an affordable price, with sales topping four million bottles in the three months following its launch. Viewing its mission as being to continue to provide even higher-quality,affordably-priced products that match customers' lifestyles, in June Aeon announced that from July onward it would strive to maintain the prices of the majority of products, and continue to work so as to be able to deliver new and valuable products.
• In 2019, Aeon concluded an exclusive partnership agreement in Japan with Ocado Solutions, a subsidiary of Ocado Group plc, an online supermarket company in the U.K. Through subsidiary Aeon Next Co., Ltd. (hereinafter "Aeon Next"), Aeon is in the process of constructing in Chiba City the first customer fulfillment center in Japan to employ cutting-edge AI and robotics, and plans to start a next- generation online supermarket business based on this center in 2023. In December 2021, Aeon announced that it would develop an additional customer fulfillment center connected to a store that Aeon Mall Co., Ltd. is planning to open at a commercial complex in Hachioji City, Tokyo. This

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