Aeon : Financial Results for the Fiscal Year ended February 28, 2023(720KB)(new window. for

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 Fiscal Year ended February 28, 2023

April 12, 2023

Company name	AEON CO., LTD.
Listings	Tokyo Stock Exchange (Prime Market)
Security code	8267
URL	https://www.aeon.info/en/
Representative	Akio Yoshida, President
Contact	Hiroaki Egawa
	Executive Officer, Chief Financial Officer, Business Management
Telephone	[phone]

Scheduled dates:
Ordinary general meeting of shareholders	May 26, 2023
Commencement of dividend payments	May 2, 2023
Submission of statutory financial report	May 29, 2023
Supplementary materials to the financial results	Available
Fiscal year-end earnings results briefing	Yes (targeted at institutional investors and analysts)

(Amounts rounded down to the nearest million)

1. Consolidated Financial Results for the Fiscal Year ended February 28, 2023

(March 1, 2022 to February 28, 2023)

(1) Operating Results					(Percentage figures represent year-on-year changes)
	Operating revenue	Operating profit		Ordinary profit	Profit attributable to
		owners of the parent
Year ended February	million yen	%	million yen	%		million yen	%	million yen	%
9,116,823	4.6	209,783	20.3		203,665	21.9	21,381	228.7
28, 2023
Year ended February	8,715,957	1.3	174,312	15.8		167,068	20.4	6,504	-
28, 2022
Note: Comprehensive income:	Year ended February 28, 2023:		126,494 million yen (36.6%)
		Year ended February 28, 2022:			92,570 million yen	(-%)
		Earnings		Earnings per share		Return on equity	Ordinary profit to
		per share		- fully diluted		total assets
Year ended February			yen		yen			%		%
	25.11		25.07			2.2		1.7
28, 2023
Year ended February			7.69		7.65			0.7		1.4
28, 2022

Reference: Equity in gains (losses) of equity-method affiliates:

Year ended February 28, 2023: 5,836 million yen

Year ended February 28, 2022: 4,355 million yen

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 fiscal year ended February 28, 2023, 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
February 28, 2023	12,341,523	1,970,232	8.0	1,161.12
[excl. Financial Services]	[6,078,158]	[1,544,604]	[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: February 28, 2023: 992,576 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 the 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 February 28, 2023, are those after the application of the said accounting standard.

(3) Cash Flow Position

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at the end of the period
Year ended	million yen	million yen	million yen	million yen
433,710	(335,123)	1,853	1,214,462
February 28, 2023
Year ended	204,452	(343,854)	(2,207)	1,090,923
February 28, 2022

2. Dividends

		Dividend per share		Total	Payout ratio
						dividends	Dividends to net
	End-	End-	End-
Record date	first	second	third	Fiscal	Annual	paid	(consolidated)	assets
or period	quarter	quarter	quarter	year-end	total	(full year)		(consolidated)
Year ended	yen	yen	yen	yen	yen	million yen	%	%
-	18.00	-	18.00	36.00	30,602	468.1	3.2
Feb. 28, 2022
Year ended	-	18.00	-	18.00	36.00	30,853	143.4	3.1
Feb. 28, 2023
Year ending
Feb. 29, 2024	-	18.00	-	18.00	36.00		123.1
(forecast)

3. Forecast of Consolidated Earnings for the Fiscal Year ending February 29, 2024

(March 1, 2023 to February 29, 2024) (Percentage figures represent year-on-yearchanges)

	Operating revenue	Operating profit	Ordinary profit	Profit attributable to	Earnings
	owners of the parent	per share
Six months	million yen	%	million yen	%	million yen	%	million yen	%	yen
ending Aug.	-	-	-	-	-	-	-	-	-
31, 2023
Full year	9,400,000	3.1	220,000	4.9	210,000	3.1	25,000	16.9	29.25

Note: AEON has not disclosed earnings forecasts for the first six months.

*Notes

1. Changes affecting the consolidation status of significant subsidiaries during the period: None
2. Changes in accounting policy, changes in accounting estimates, and retrospective restatement:
3. 1. Changes in accordance with amendments to accounting standards: Yes
   2. Changes other than the above 1): None
   3. Changes in accounting estimates: None

1. 1. Retrospective restatement: None
2. Number of shares issued (common stock)
3. 1. Number of shares issued at the end of the period (treasury stock included):

	February 28, 2023:	871,924,572 shares
	February 28, 2022:	871,924,572 shares
2)	Number of shares held in treasury at the end of the period:
	February 28, 2023:		17,080,259 shares
	February 28, 2022:		25,207,930 shares
3)	Average number of shares outstanding during the period:
	Year ended February 28, 2023:	851,630,958 shares
	Year ended February 28, 2022:	846,082,188 shares

• For the number of shares serving as basis for the calculation of earnings per share (consolidated), see "Per-Share Information" on page 37.

For Reference

1. Non-consolidated Financial Results for the Fiscal Year ended February 28, 2023

(March 1, 2022 to February 28, 2023)

(1) Operating Results				(Percentage figures represent year-on-year changes)
	Operating revenue	Operating profit	Ordinary profit	Profit
Year ended	million yen	%	million yen	%	million yen	%	million yen	%
55,433	6.8	36,001	14.8	13,733	(19.3)	17,739	(24.1)
February 28, 2023
Year ended	51,906	2.4	31,367	(5.2)	17,024	53.4	23,384	229.3
February 28, 2022
	Earnings		Earnings per share
	per share		- fully diluted
Year ended		yen		yen
20.83		20.82
February 28, 2023
Year ended	27.64		27.63
February 28, 2022
(2) Financial Position							Net assets per
	Total assets		Net assets		Total equity ratio
			share
	million yen	million yen		%	yen
February 28, 2023	1,554,205	650,452		41.8		760.47
February 28, 2022	1,575,684	653,377		41.4		771.22
Reference: Total equity: February 28, 2023: 650,142 million yen	February 28, 2022: 653,068 million yen
Total equity = Shareholders' equity plus total accumulated other comprehensive income.

*Audit Status

This report is not subject to audit by certified public accountant and 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) Outlook for the Fiscal Year ending February 29, 2024" on page 14.

Accompanying Materials
Contents
1. Review of Operating Results and Financial Statements	2
(1)	Analysis of Operating Results	2
(2)	Analysis of Financial Condition	12
(3)	Outlook for the Fiscal Year ending February 29, 2024	14
(4)	Dividend Policy and Dividends for the Fiscal Year ended February 28, 2023,	14
	and the Fiscal Year ending February 29, 2024
2. Management Strategies and Policies	15
(1) Basic Policy on Management	15
(2) Medium-Term Management Strategy	15
3. Basic Policy Regarding Selection of Accounting Standards	16
4. Consolidated Financial Statements and Main Notes	17
(1)	Consolidated Balance Sheet	17
(2)	Consolidated Statement of Income and Consolidated Statement of	20
	Comprehensive Income
(3)	Consolidated Statement of Changes in Equity	23
(4)	Consolidated Statement of Cash Flows	25
(5)	Notes on the Consolidated Financial Statements	27
	(Notes on the Going-concern Assumption)	27
	(Changes in Accounting Policy)	27
	(Changes in Presentation)	28
	(Additional Information)	28
	(Segment and Other Information)	29
	(Per Share Information)	37
	(Material Subsequent Events)	37

1

1. Review of Operating Results and Financial Statements

(1) Analysis of Operating Results

1) Summary of Operating Results

For the fiscal year ended February 28, 2023 (March 1, 2022 - February 28, 2023), AEON CO., LTD. (hereinafter "AEON") posted increased revenue and profit compared to the previous fiscal year, with record-high consolidated operating revenue of 9,116,823 million yen (up 4.6% year-on-year). Operating profit was 209,783 million yen (up 20.3% year-on-year), ordinary profit was 203,665 million yen (up 21.9% year-on-year), and profit attributable to owners of the parent increased significantly to 21,381 million yen (up 228.7% year-on-year).

By business segment, the Shopping Center Development Business, Services and Specialty Store Business, and International Business which all had to temporarily suspend business at many locations in the two previous fiscal years in Japan and overseas in response to the COVID-19 pandemic, and the Health and Wellness Business which pursued M&A and increased the number of stores dispensing prescription drugs, each posted increased revenue and profit. The GMS (General Merchandising Store) Business returned to the black with a significant profitability improvement due to a number of initiatives, including expanding and enhancing the online supermarket business and the private brand TOPVALU, and improving the gross profit margin by utilizing AI tools and reducing inventories. The Supermarket Business posted increased revenue following the conversion of Fuji Co., Ltd. and its consolidated subsidiaries into consolidated subsidiaries of AEON. The Discount Store Business posted increased profit as a result of the management integrations implemented in the previous fiscal year. Meanwhile, the Financial Services Business posted decreased revenue and profit due to slowed receivable balance growth and rising interest rates.

Profit attributable to owners of the parent increased significantly due to the increase in profit lines up to the ordinary profit, as well as the gain on sales of shares of subsidiaries and affiliates and non-current assets.

Common Group Strategy

• Continued price increases on many daily necessities are resulting in added strain on household budgets. Placing top priority on corporate efforts to protect customers' lifestyles, AEON is working to develop unique value propositions through its private brand, TOPVALU. Although AEON has raised prices for some products from July 2022, it has maintained unchanged the prices of the majority of the approximately 5,000 TOPVALU brand food and daily consumable items covered by the price freeze declared in September 2021. This has led to the acquisition of new customers and increased repeat purchases. To respond comprehensively to customers' diverse needs, AEON also worked on repositioning TOPVALU as a "new value-creation brand", Gurinai as an "organic and natural ingredient-focused brand", and BESTPRICE as a "satisfying quality brand" aimed at providing the best prices in each region. Group companies in each region are also taking the lead in proactive efforts to develop local private brands by developing "local production for local consumption" products to help revitalize regional communities and economies.
• Changes in consumer behavior due to the pandemic have led to an expansion of e-commerce to include fresh produce and delicatessen product categories. AEON has always been devoted to the values of safety and peace of mind, and these values are the driving force behind the growth of the online supermarket business based on the delivery of products from existing stores. AEON is also preparing for the mid-2023 launch of the online market "Green Beans", which will operate from a customer fulfillment center in Chiba City, Chiba Prefecture, based on an exclusive domestic-market partnership agreement between AEON and the U.K.'s Ocado Solutions. Customers will be able to designate delivery times within one-hour windows between 7am and 11pm, select from around 50,000 items including high-quality fresh produce, and place the kind of large orders that customer fulfillment centers make possible. The service will meet the needs of customers living in the heart of Tokyo, distant from the brick-and-mortar stores operated by AEON's GMS Business and Supermarket Business. AEON Mall Co., Ltd. is scheduled to launch operations at a second customer fulfillment center in 2026 in Hachioji City, Tokyo Metropolitan area. The center will be attached to a commercial complex scheduled to open in 2025.
• AEON is also pursuing a further "digital shift" at GMS Business and Supermarket Business

2