Aeon : Financial Results for the Three Months ended May 31, 2023(421KB)(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 Three Months ended May 31, 2023

July 12, 2023

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 14, 2023

-

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, 2023

(March 1, 2023 to May 31, 2023)

(1) Operating Results						(Percentage figures represent year-on-year changes)
		Operating revenue	Operating profit		Ordinary profit	Profit attributable to
			owners of the parent
		million yen	%	million yen	%	million yen	%	million yen	%
	Three months ended	2,324,798	5.5		51,469	17.2		48,121	8.4	17,728	-8.5
	May 31, 2023
	Three months ended	2,203,227	2.3		43,897	12.0		44,396	10.0	19,372	287.3
	May 31, 2022
Note: Comprehensive income:	Three months ended May 31, 2023: 51,877 million yen (-18.7%)
			Three months ended May 31, 2022: 63,785 million yen (28.8%)
			Earnings	Earnings per share
			per share	- fully diluted
	Three months ended		yen			yen
			20.74			20.72
	May 31, 2023
	Three months ended			22.88			22.86
	May 31, 2022
(2) Financial Position
			Total assets	Net assets		Total equity ratio	Net assets per
				share
			million yen	million yen			%	yen
	May 31, 2023			12,566,511		1,986,727		8.0	1,174.11
	[excl. Financial Services]		[6,219,483]		[1,549,958]		[14.3]		-
	February 28, 2023			12,341,523		1,970,232		8.0	1,161.12
	[excl. Financial Services]		[6,078,040]		[1,544,061]		[14.5]		-

Reference: 1. Total equity: May 31, 2023: 1,003,986 million yen February 28, 2023: 992,576 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: In line with organizational changes, from the first quarter of the fiscal year ending February 29, 2024, the Company has reclassified some of the subsidiaries included in the Financial Services segment to include them in the Other Business segment. Financial position other than the Financial Services segment was reported based on the current segmentation.

2. Dividends

Dividend per share

End-first

End-

End-third

Fiscal year-

Record date or

second

Annual total

period

quarter

quarter

quarter

end

yen

yen

yen

yen

yen

Year ended

-

18.00

-

18.00

36.00

February 28, 2023

Year ending

-

February 29, 2024

Year ending

February 29, 2024

18.00

-

18.00

36.00

(forecast)

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

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-year changes)

	Operating revenue	Operating profit	Ordinary profit	Profit attributable to	Earnings
	owners of the parent	per share
	million yen	%	million yen	%	million yen	%	million yen	%	yen
Full year	9,400,000	3.1	220,000	4.9	210,000	3.1	25,000	16.9	29.25

Notes: 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: 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)
6. 1. Number of shares issued at the end of the period (treasury stock included):

May 31, 2023:	871,924,572 shares
February 28, 2023:	871,924,572 shares

2) Number of shares held in treasury at the end of the period:

May 31, 2023:	16,821,520 shares
February 28, 2023:	17,080,259 shares

3) Average number of shares outstanding during the period:

Three months ended May 31, 2023:	854,949,758 shares
Three months ended May 31, 2022:	846,835,314 shares

The Company's stock held by the Employee Stock Ownership Plan Trust (May 31, 2023: 1,876,700

shares, February 28, 2023: 2,136,600 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 accountants or audit firms.

*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 assumptions and forecasts herein, please refer to "(3) Consolidated Earnings Forecast" on page 9.

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	9
2. Consolidated Financial Statements and Main Notes	10
(1)	Consolidated Balance Sheet	10
(2)	Consolidated Statement of Income and Consolidated Statement of	13
	Comprehensive Income
(3)	Notes on the Consolidated Financial Statements	15
	(Notes on the Going-concern Assumption)	15
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	15
	(Changes in Accounting Policy)	15
	(Additional Information)	15
	(Segment Information)	16

1

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 29, 2024 (March 1, 2023 - May 31, 2023), AEON CO., LTD. (hereinafter "AEON") posted consolidated operating revenue of 2,324,798 million yen (up 5.5%), operating profit of 51,469 million yen (up 7,572 million yen), ordinary profit of 48,121 million yen (up 3,724 million yen), which marked record highs in the same period of the previous fiscal year. Profit attributable to owners of the parent was 17,728 million yen (down 1,643 million yen).

In the first three months of the fiscal year under review, COVID-19 was reclassified as a Category V infectious disease and socioeconomic activity has begun to recover. At the same time, uncertainty continues as consumers become more defensive of their lifestyles due to the global surge in raw material prices and the sharp depreciation of the yen. Under these circumstances, all reportable segments recorded an increase in net sales. Operating profit increased in the GMS (General Merchandising Store) Business, the Supermarket Business, and the Discount Store Business, which expanded sales of private brands and improved productivity through the use of digital technology and reduced power consumption. Operating profit also increased in the Shopping Center Development Business, the Services and Specialty Store Business, and the International Business, which recovered customer traffic compared with the COVID-19 pandemic period. On the other hand, profit declined in the Financial Services Business, where a provision of allowance for doubtful accounts and sales marketing and promotion expenses increased in line with the balance of operating receivables, and in the Health and Wellness Business, where utility expenses increased significantly.

Common Group Strategy

• AEON has been soundly executing the five reforms set forth in the AEON Group Medium-term Management Plan (FY2021 - FY2025) (accelerate and evolve the shift to digital, create unique value with a supply chain-focused outlook, evolve health and wellness in response to the new era, create the "AEON Living Zone", and further accelerate the shift to Asian markets).
• In the GMS Business and the Supermarket Business, AEON worked to introduce self-scanning and self- checkout systems. As a result, AEON enhanced customer convenience through shorter wait times at the cash register and through better productivity as a result of improved operational efficiency in stores. AI- driven efficiency systems, such as "AI Kakaku," which suggests appropriate discount prices to reduce disposal-related food loss, "AI Order," which predicts demand and optimizes product orders, and "AI Work," which automatically drafts work schedules/rosters, have advanced, resulting in improvements in gross profit margin and productivity. In addition, AEON Financial Service Co., Ltd.'s overseas subsidiaries and affiliates have aggressively introduced "AI credit scoring" and "AI collection scoring." Even in markets where a certain number of customers have no external credit information, they respond to customers' financial needs through refining screening with "AI scoring." At the same time, they aim to improve the efficiency of credit screening and collection operations. On the online front, online supermarket sales, which ship products from stores, have increased. In addition, AEON has started the online market "Green Beans," which ships from a customer fulfillment center. Customers will be able to designate delivery times within one-hour windows between 7 a.m. and 11 p.m., 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 with a strong need to shorten shopping time and limited opportunities to visit stores, such as working parents and families with small children. 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.

2