AEON Mall : Consolidated Financial Results for the Fiscal Year Ended February 28, 2022 (Japanese GAAP)

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.

Consolidated Financial Results for the Fiscal Year Ended February 28, 2022

(Japanese GAAP)

April 7, 2022

Company name: Stock code: Representative: Scheduled dates:AEON MALL Co., Ltd. 8905

Listings Tokyo Stock Exchange

URLhttps://www.aeonmall.com/ir/index.html

Yasutsugu Iwamura, President and CEO

General shareholder's meeting	May 19, 2022
Commencement of dividend payments	May 2, 2022
Submission of statutory financial report	May 20, 2022
Supplementary documents for financial results	Yes
Financial results briefing	Yes (for institutional investors and analysts)
(Amounts in millions of yen rounded down to the nearest million yen)

1. Consolidated Financial Results for the Year Ended February 28, 2022 (March 1, 2021 - February 28, 2022)

Operating revenue	Operating income	Ordinary income	Net income attributable to owners of parent
Years ended February 28, 2022 February 28, 2021	Million yen 316,813 280,688	% 12.9 (13.4)	Million yen 38,228 34,394	% 11.1 (43.4)	Million yen 32,540 28,437	% 14.4 (49.3)	Million yen 19,278 (1,864)	% － －

(Percentages represent year-on-year changes)
(Note) Comprehensive income	Year ended February 28, 2022:	¥49,755 million (－%)
Year ended February 28, 2021:	(¥8,611) million (－%)

(1) Consolidated Operating Results

Net income per share	Net income per share (diluted)	Return on equity	Ordinary income / total assets ratio	Operating income / net sales ratio
Years ended	Yen 84.72 (8.19)	Yen 84.71 －	% 4.9 (0.5)	% 2.3 2.0	% 12.1 12.3
February 28, 2022
February 28, 2021

(Reference) Investment profit on equity method

Year ended February 28, 2022: ¥－million Year ended February 28, 2021: ¥－million

(Note) Diluted net income per share for the fiscal year ended February 28, 2021, is not provides, as the company recorded a net loss per share for shares with dilutive effect.

(2) Consolidated Financial Position

Total assets	Net assets	Equity ratio	Net assets per share
Million yen 1,463,256 1,394,199	Million yen 426,931 387,486	% 28.5 27.1	Yen 1,830.21 1,658.23
February 28, 2022
February 28, 2021

(Reference) Equity	February 28, 2022:	¥416,455 million
February 28, 2021:	¥377,318 million
(3) Consolidated Cash Flows

Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at year end
Years ended	Million yen 61,492 61,621	Million yen (122,382) (64,444)	Million yen 8,225 12,244	Million yen 82,973 124,080
February 28, 2022
February 28, 2021

2. Dividends

Dividend per share	Total dividend	Payout ratio (consolidated)	Dividend on equity (consolidated)
First quarter-end	First half-end	Third quarter-end	Fiscal year-end	Total
Year ended February 28, 2021 February 28, 2022	Yen － －	Yen 20.00 25.00	Yen － －	Yen 20.00 25.00	Yen 40.00 50.00	Million yen 9,101 11,377	% － 59.0	% 2.4 2.9
Year ending February 28, 2023 (Projection)	－	25.00	－	25.00	50.00	49.5

3. Consolidated Earnings Projections for the Year Ending February 28, 2023 (March 1, 2022 - February 28, 2023)

(Percentages represent year-on-year changes)

Operating revenue Operating income Ordinary income

Net income attributable to owners of parentNet income per share

First half, FY2022

Full-yearMillion yen 196,500 404,000

% Million yen

%Million yen

%

－ －

24,700 25.5 55,500 45.2

20,000 23.5 45,500 39.8

8,000 (37.7) 23,000 19.3

Yen 35.15 101.07

(Note) Beginning with the fiscal year ending February 28, 2023, the company will adopt Accounting Standard for Revenue

Recognition (ASBJ Statement No. 29), etc. The consolidated earnings forecast above is based on this standard. Since operating revenue has been affected significantly by the adoption of this standard, we have not shown the percentage change compared with the previous period. Operating income, ordinary income, and net income attributable to owners of parent have not been affected by the application of the standard. Estimating results for the fiscal year ending February 28, 2023 before the adoption of this standard, we expect operating revenue to increase 12.8% for the first half and 13.3% for the full year.

* Notes

• (1) Material changes in consolidated subsidiaries during the period (changes in specific subsidiaries resulting in a change in the scope of consolidation): Yes

• (2) Changes in accounting policies, changes of accounting-based estimates, revisions and restatements

  • [1] Changes in accounting policies due to changes in accounting standards, etc.: None

  • [2] Changes in accounting policies other than the above: None

  • [3] Changes in accounting estimates: None

  • [4] Revisions and restatements: None

• (3) Number of shares issued and outstanding (common stock)

  • [1] Number of shares outstanding at period-end (including treasury stock)

  • [2] Treasury stock at period-end

  • [3] Average number of shares during the period (quarterly cumulative)

Year ended February 28, 2022 227,548,939	Year ended February 28, 2021 227,545,839
Year ended February 28, 2022 3,997	Year ended February 28, 2021 3,265
Year ended February 28, 2022 227,544,377	Year ended February 28, 2021 227,533,220

*This summary of consolidated results is exempt from review procedures conducted by a certified public accountant or public accounting firm.

* Explanations and other special notes concerning the appropriate use of earnings projections

(Cautionary statement regarding forward-looking statements, etc.)

Earnings projections included in these materials and attachments are based on information available to the Company at the time and reflect certain assumptions the Company deems reasonable. Projections do not constitute a promise of future performance by the Company. Moreover, actual performance may vary considerably due to a variety of factors. For matters related to earnings projections, see (1) Analysis of Operating Results 2) Future Outlook on P.15.

(Procedures for obtaining supplementary information on financial results and accessing briefing materials)

The Company is scheduled to hold a briefing for institutional investors and analysts on April 8, 2022. The materials handed out at this briefing will be posted on the Company's website on April 7, 2022. An audio recording of the briefing will be made available on the Company's website soon after the briefing has ended.

Accompanying Materials ― Contents

1. Analysis of Operating Results and Financial Position 2

(1) Analysis of Operating Results 2

(2) Consolidated Financial Position 16

(3) Basic Policy on Income Distribution, Dividends for Fiscal Years Ended February 2022 and February 2023 17

2. State of the Corporate Group 18

3. Management Policies 19

4. Policy on Selection of Accounting Standards 24

5. Consolidated Financial Statements and Notes 25

(1) Consolidated Balance Sheets 25

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income 27

Consolidated Statements of Income 27

Consolidated Statements of Comprehensive Income 29

(3) Statements of Changes in Shareholders' Equity 30

(4) Consolidated Statements of Cash Flows 32

(5) Notes on Consolidated Financial Statements 34

Notes on the Going Concern Assumption 34

Important matters concerning the basis for preparing consolidated financial statements 34

Notes 37

Consolidated balance sheets 37

Consolidated statements of income 38

Consolidated statements of comprehensive income 41

Statements of changes in shareholders' equity 42

Consolidated statements of cash flows 44

Lease transactions 45

Business combinations 46

Rental property 47

Segment and other information 48

Per-share information 51

Significant subsequent events 51

Attachments

1. Analysis of Operating Results and Financial Position

(1) Analysis of Operating Results

1) Overview of the consolidated fiscal year under review a. Explanation of consolidated results of operations

The Company has defined a long-term vision through the fiscal year ending February 28, 2026 (FY2025) by which we will pursue our management philosophy and achieve further business growth. We are working together with local communities to achieve sustainable growth by creating social, environmental, and economic value.

Our current medium-term management plan (FY2020-FY2022), which we launched in fiscal 2020, outlines four growth policies:(1) Achieve high profit growth overseas; (2) Achieve stable growth in Japan; (3) Pursue a financing mix and strengthen governance structures to support growth; and (4) Pursue ESG-based management.

In pursuing growth initiatives, we have established certain management issues and a vision for our future: (1) Achieve profit growth in overseas businesses and accelerate new mall openings; (2) Maximize the attractiveness of brick-and-mortar malls through customer experience (CX); (3) Build next-generation malls and pursue the urban shopping center business; (4) Pursue digital transformation (DX); and (5) Pursue medium-term strategies, while accelerating reform based on ESG perspectives. Through these efforts, we will continue to provide solutions to regional and social issues, establishing our position through social infrastructure functions to be a central facility for the local community.

During the consolidated fiscal year under review, COVID-19 infections remained uncontained, although differences were evident among various countries and regions. Certain of our malls in Japan and overseas were forced to shorten operating hours or close temporarily.

AEON MALL recorded higher revenue and income for the consolidated fiscal year ended February 28, 2022. Consolidated operating revenue for the fiscal year ended February 28, 2022 amounted to ¥316,813 million, an increase of 12.9% year on year. Operating income amounted to ¥38,228 million (+11.1%), ordinary income amounted to ¥32,540 million (+14.4%), and net income attributable to owners of parent amounted to ¥19,278 million (compared to net loss of ¥1,864 million in the previous consolidated fiscal year). Fixed costs for the fiscal year amounted to ¥4,075 million stemming from temporary closures and other factors (¥16,572 million in the previous consolidated fiscal year). We posted these costs as extraordinary losses due to COVID-19.

Operating revenue, operating income, ordinary income, and net income attributable to shareholders of the parent company were -2.3%, -37.1%, -42.0%, and -43.7% compared to the results recorded for the fiscal year ended February 29, 2020 ("FY2019"), which was a period not impacted by COVID-19.

◆Consolidated Earnings

(Million yen)

Fiscal Year Ended February 28, 2021	Fiscal Year Ended February 28, 2022	Change [Year on year]
Operating revenue	280,688	316,813	+36,125 [+12.9%]
Operating income	34,394	38,228	+3,834 [+11.1%]
Ordinary income	28,437	32,540	+4,103 [+14.4%]
Net income (loss) attributable to owners of parent	(1,864)	19,278	+21,142 [－]

(Reference) Results vs. FY2019

Fiscal Year Ended February 28, 2020	Fiscal Year Ended February 28, 2022	Change (Vs. FY2019)
Operating revenue	324,138	316,813	(7,325) [-2.3%]
Operating income	60,794	38,228	(22,566) [-37.1%]
Ordinary income	56,117	32,540	(23,576) [-42.0%]
Net income attributable to owners of parent	34,239	19,278	(14,960) [-43.7%]

b. Explanation of business performance by segment ◆Earnings by Segment

(Million yen)

Operating Revenue	Segment Income (Loss)
Fiscal Year Ended February 28, 2021	Fiscal Year Ended February 28, 2022	Change [Year on year]	Fiscal Year Ended February 28, 2021	Fiscal Year Ended February 28, 2022	Change [Year on year]
Japan	237,093	261,214	+24,121 [+10.2%]	30,597	31,945	+1,347 [+4.4%]
China ASEAN Overseas	31,353	43,139	+11,785 [+37.6%]	2,296	6,958	+4,662 [+203.0%]
12,241	12,459	+217 [+1.8%]	1,474	(701)	(2,175) [－]
43,594	55,598	+12,003 [+27.5%]	3,771	6,257	+2,486 [+65.9%]
Adjustment	－	－	－ [－]	25	25	－ [+0.0%]
Total	280,688	316,813	+36,125 [+12.9%]	34,394	38,228	+3,834 [+11.1%]

(Reference) Results vs. FY2019

Operating Revenue	Segment Income (loss)
Fiscal Year Ended February 29, 2020	Fiscal Year Ended February 28, 2022	Change (Vs. FY2019)	Fiscal Year Ended February 29, 2020	Year Ended February 28, 2022	Change (Vs. FY2019)
Japan	274,999	261,214	(13,784) [-5.0%]	52,460	31,945	(20,515) [-39.1%]
China ASEAN Overseas	35,850	43,139	+7,288 [+20.3%]	5,622	6,958	+1,336 [+23.8%]
13,288	12,459	(829) [-6.2%]	2,686	(701)	(3,387) [－]
49,138	55,598	+6,459 [+13.1%]	8,308	6,257	(2,050) [-24.7%]
Adjustment	－	－	－ [－]	25	25	－ [+0.0%]
Total	324,138	316,813	(7,325) [-2.3%]	60,794	38,228	(22,566) [-37.1%]

Overseas

The company recorded overseas operating revenue in the amount of ¥55,598 million (+27.5% year on year) and operating income in the amount of ¥6,257 million (+65.9%). Revenue and profit rose in China as specialty store sales grew during the consolidated fiscal year under review. In ASEAN, however, businesses in certain countries were forced to close temporarily during the consolidated third quarter (July to September) due to the spread of COVID-19 infections in Vietnam, which resulted higher