AEON Mall : FY2021 1st Three Quarters Financial Results

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 Third Quarter of the Fiscal Year

Ending February 28, 2022 (Japanese GAAP)

		January 11, 2022
Company name:	AEON MALL Co., Ltd.	Stock Exchange Listing: TSE
Stock code:	8905	URL https://www.aeonmall.com/en/ir/index.html
Representative:	Yasutsugu Iwamura, President and CEO	Starting date of dividend payment: －
Scheduled date of filing of quarterly report: January 14, 2022
Preparation of supplementary materials for quarterly financial results: Yes

Holding of quarterly 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 Third Quarter of the Fiscal Year Ending February 28, 2022 (March 1, 2021 - November 30, 2021)

(1) Consolidated Operating Results (cumulative)				(Percentages represent year-on-year changes)
	Operating revenue	Operating income	Ordinary income	Net income attributable
	to owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Nine months ended November 30, 2021	233,286	15.1	28,346	23.1	23,755	25.6	16,457	－
Nine months ended November 30, 2020	202,683	(15.7)	23,034	(45.5)	18,909	(48.6)	(4,599)	－

(Note) Comprehensive income: Nine months ended November 30, 2021: ¥36,344 million (-%) Nine months ended November 30, 2020: (¥13,438) million (-%)

	Net income per share	Net income per share (diluted)
	Yen	Yen
Nine months ended November 30, 2021	72.32	72.31
Nine months ended November 30, 2020	(20.21)	－

(Note) Diluted net income per share for the nine months ended November 30, 2020, 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
		Million yen		Million yen		%
November 30, 2021		1,470,832		413,521		27.4
February 28, 2021		1,394,199		387,486		27.1
(Reference) Equity: November 30, 2021: ¥403,300 million
February 28, 2021: ¥377,318 million
2. Dividends
						Annual dividend
			First quarter-end	First half-end	Third quarter-end	Fiscal year-end	Total
				Yen	Yen	Yen		Yen	Yen
Year ended February 28, 2021			－	20.00	－	20.00	40.00
Year ending February 28, 2022			－	25.00	－
Year ending February 28, 2022 (projection)				25.00	50.00
(Note) Revisions to dividend forecast announced recently: None

3. Consolidated Earnings Projections for the Year Ending February 28, 2022 (March 1, 2021 - February 28, 2022)

							(Percentages represent year-on-year changes)
							Net income		Net income per
	Operating revenue	Operating income	Ordinary income	attributable to
		share
							owners of parent
Full-year	Million yen	%	Million yen	%	Million yen	%	Million yen		%	Yen
344,000	22.6	59,000	71.5	50,500	77.6	31,000		－	136.23

(Notes) 1. Revisions to earnings forecast announced recently: None

* 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) Application of special accounting methods in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes of accounting-based estimates, revisions & 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
(4) Number of shares issued and outstanding (common stock)
[1]	Number of shares outstanding at period-	Nine months ended	227,548,939	Year ended	227,545,839
	end (including treasury stock)	November 30, 2021	February 28, 2021
[2]	Treasury stock at period-end	Nine months ended	3,857	Year ended	3,265
November 30, 2021	February 28, 2021
[3]	Average number of shares during the	Nine months ended	227,544,186	Nine months ended	227,531,112
	period (quarterly cumulative)	November 30, 2021	November 30, 2020

* The summary of quarterly financial results is exempt from quarterly review procedures.

* Explanations and other special notes concerning the appropriate use of earnings projections (Cautionary statement regarding forward-looking statements, etc.)

The forward-looking statements, such as earnings projections, included in these materials are based on information currently available to the Company and certain assumptions it deems reasonable. They do not constitute a promise of future performance by the Company. Moreover, actual performance may vary considerably due to a variety of factors. See 1. Qualitative Information on Quarterly Financial Performance (3) Explanation of Consolidated Earnings Projections and Other Projections on P.14 of the accompanying materials for assumptions used in earnings projections and matters to note when using earnings projections.

(Procedures for obtaining supplementary information on financial results)

The Company is scheduled to hold a briefing for institutional investors and analysts on January 12, 2022. The materials handed out at this briefing will be posted on the Company's website on January 11, 2022, and 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. Qualitative Information on Quarterly Financial Performance	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	13
(3)	Explanation of Consolidated Earnings Projections and Other Projections	14
2. Quarterly Consolidated Financial Statements and Notes	15
(1)	Quarterly Consolidated Balance Sheets	15
(2)	Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income	17
	Quarterly Consolidated Statements of Income
	For the Nine months ended November 30, 2020 and November 30, 2021	17
	Quarterly Consolidated Statements of Comprehensive Income
	For the Nine months ended November 30, 2020 and November 30, 2021	18
(3)	Quarterly Consolidated Statement of Cash Flows	19
(4)	Notes to the Quarterly Consolidated Financial Statements	20
	Notes on the going concern assumption	20
	Notes on significant changes in shareholders' equity	20
	Changes in major consolidated subsidiaries during the period under review	20
	Supplementary information	20
	Segment and other information	21
	Significant subsequent events	22

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1. Qualitative Information on Quarterly Financial Performance

1. Explanation of Operating Results

a. Explanation of consolidated results of operations

The Company has defined a long-term vision through the fiscal year ending February 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 pursuit of our growth initiatives, we defined the following management tasks and goals: (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.

The AEON COVID-19 Prevention Protocol is our standard for quarantine measures established by the AEON Group to protect the health and livelihoods of customers and employees, as well as to ensure the safety and security of customers and the local community. Based on this protocol we continue to improve internal mall environments, managing and operating malls under comprehensive systems that prevent infection. We view this as an opportunity to reinvent our business models and create malls that offer new concepts and service functions in the era of the new normal. We will strive to create malls that respond to social change in Japan and overseas.

During the third quarter of the consolidated fiscal year, 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.

We recorded higher revenue and profit for the nine months ended November 30, 2021 compared to the same period in the previous fiscal year. Operating revenue amounted to ¥233,286 million (+15.1% year on year), while operating income amounted to ¥28,346 million (+23.1%), ordinary income amounted to ¥23,755 million (+25.6%), and quarterly net income attributable to owners of parent amounted to ¥16,457 million (compared to net loss of ¥4,599 million in the year-ago period). Operating revenue, operating income, ordinary income, and net income attributable to shareholders of the parent company were -3.0%, - 32.9%, -35.4%, and -30.0% compared to the results recorded in the cumulative consolidated third quarter of the fiscal year ended February 2020 ("FY2019"), which was not impacted by COVID-19.

Fixed costs for the nine months ended November 30, 2021, amounted to ¥3,663 million, stemming from temporary closures and other factors. We posted these costs as extraordinary losses due to COVID-19.

◆Consolidated Earnings			(Million yen)
	FY2020 Q3	FY2021 Q3	Change [YoY]
Operating revenue	202,683	233,286	+30,603
[+15.1%]
Operating income	23,034	28,346	+5,312
[+23.1%]
Ordinary income	18,909	23,755	+4,845
[+25.6%]
Net income (loss) attributable to owners of	(4,599)	16,457	+21,057
parent	[－]

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(Reference) Versus nine months ended November 30, 2019

(Million yen)

FY2019 Q3

FY2021 Q3

Change [YoY]

Operating revenue

240,573

233,286

(7,286)

[-3.0%]

Operating income

42,265

28,346

(13,919)

[-32.9%]

Ordinary income

36,783

23,755

(13,027)

[-35.4%]

Net income attribute to owners of

23,503

16,457

(7,046)

parent

[-30.0%]

b. Explanation of business performance by segment

◆Earnings by Segment

(Million yen)

Operating Revenue

Segment Income

FY2020 Q3

FY2021 Q3

Change

FY2020 Q3

FY2021 Q3

Change

[YoY]

[Vs. FY2020]

Japan

172,345

191,575

+19,229

21,012

21,917

+904

[+11.2%]

[+4.3%]

China

21,621

31,428

+9,807

715

5,247

+4,532

[+45.4%]

[+633.8%]

ASEAN

8,716

10,282

+1,566

1,287

1,162

(124)

[+18.0%]

[-9.7%]

Overseas

30,337

41,711

+11,373

2,002

6,409

+4,407

[+37.5%]

[+220.1%]

Adjustment

－

－

－

18

18

－

[－]

[+0.0%]

Total

202,683

233,286

+30,603

23,034

28,346

+5,312

[+15.1%]

[+23.1%]

(Reference) Versus nine months ended November 30, 2019

(Million yen)

Operating Revenue

Segment Income

FY2019 Q3

FY2021 Q3

Change

FY2019 Q3

FY2021 Q3

Change

[YoY]

[Vs. FY2019]

Japan

204,538

191,575

(12,963)

36,120

21,917

(14,202)

[-6.3%]

[-39.3%]

China

26,489

31,428

+4,939

4,107

5,247

+1,139

[+18.6%]

[+27.8%]

ASEAN

9,545

10,282

+737

2,019

1,162

(856)

[+7.7%]

[-42.4%]

Overseas

36,034

41,711

+5,676

6,126

6,409

+283

[+15.8%]

[+4.6%]

Adjustment

－

－

－

18

18

－

[－]

[+0.0%]

Total

240,573

233,286

(7,286)

42,265

28,346

(13,919)

[-3.0%]

[-32.9%]

Overseas

The company recorded operating revenue in the amount of ¥41,711 million (+37.5% year on year) and operating income in the amount of ¥6,409 million (+220.1%). During the consolidated third quarter (July-September), ASEAN, mainly Vietnam, was affected significantly by the temporary closure of malls due to the spread of COVID-19. During the first nine months of the current fiscal year, specialty store sales in China grew, and our Overseas business earned higher revenue and profits, recording operating revenue and operating income growth of 15.8% and 4.6%, respectively, compared to the same period in FY2019.

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