Aeon : Financial Results for the Six Months ended August 31, 2023(438KB)(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 Six Months ended August 31, 2023

October 11, 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

October 13, 2023

October 30, 2023 Available

Yes (targeted at institutional investors and analysts)

(Amounts rounded down to the nearest million)

1. Consolidated Financial Results for the Six Months ended August 31, 2023

(March 1, 2023, to August 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
Six months ended	million yen	%	million yen	%	million yen	%	million yen	%
4,711,335	5.0	117,623	22.7	111,906	17.4	23,318	29.3
August 31, 2023
Six months ended	4,487,184	3.3		95,877	23.3	95,321	22.3	18,038	293.1
August 31, 2022
Note: Comprehensive income:		Six months ended August 31, 2023:	132,258 million yen	(6.8%)
			Six months ended August 31, 2022:	123,794 million yen	(96.8%)
		Earnings	Earnings per share
		per share	- fully diluted
Six months ended			yen				yen
			27.27				27.25
August 31, 2023
Six months ended				21.25				21.23
August 31, 2022
(2) Financial Position
			Total assets		Net assets		Total equity ratio		Net assets per
						share
			million yen		million yen		%			yen
August 31, 2023				12,755,827			2,060,459		8.2		1,224.94
[excl. Financial Services]			[6,275,926]			[1,609,614]		[14.7]			-
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: August 31, 2023: 1,047,815 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 consolidated financial position excluding the Financial Services Business.

Note: Due to organizational changes, certain subsidiaries that were previously categorized under the "Financial Services Business" segment have been reclassified under the "Other" segment, effective from the first quarter of the fiscal year ending February 29, 2024. The consolidated financial position of the Company for the preceding fiscal year has been prepared in accordance with the revised classification method after the change.

2. Dividends

Dividend per share

End-first

End-

End-third

Fiscal year-

Record date or

second

Annual total

period

quarter

quarter

quarter

end

Year ended

yen

yen

yen

yen

yen

-

18.00

-

18.00

36.00

February 28, 2023

Year ending

-

18.00

February 29, 2024

Year ending

February 29, 2024

-

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
	per share
							parent
	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):

August 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:

August 31, 2023:	16,520,202 shares
February 28, 2023:	17,080,259 shares

3) Average number of shares outstanding during the period:

Six months ended August 31, 2023:	855,092,099 shares
Six months ended August 31, 2022:	848,774,395 shares

The Company's stock held by the Employee Stock Ownership Plan Trust (August 31, 2023: 1,590,400 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 a 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)	Consolidated Statement of Cash Flows	16
(4)	Notes on the Consolidated Financial Statements	18
	(Notes on the Going-concern Assumption)	18
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	18
	(Changes in Accounting Policy)	18
	(Additional Information)	18
	(Segment Information)	19
	(Material Subsequent Events)	20

1

1. Review of Operating Results and Financial Statements

(1) Analysis of Operating Results

Summary of Operating Results

For the first six months of the fiscal year ending February 29, 2024 (March 1, 2023 - August 31, 2023), AEON CO., LTD. (hereinafter "AEON") posted consolidated operating revenue of 4,711,335 million yen (up 5.0%), operating profit of 117,623 million yen (up 21,746 million yen), ordinary profit of 111,906 million yen (up 16,585 million yen), which marked record highs in the same period of the previous fiscal year. Profit attributable to owners of the parent was 23,318 million yen (up 5,279 million yen).

In the first six months of the fiscal year under review, all reportable segments recorded an increase in net sales amid continued price hikes caused by soaring raw material prices, Russia's invasion of Ukraine, and the weak yen, which led to a marked polarization of consumption toward high-value-added products and value-added products. Operating profit increased in the GMS (General Merchandising Store) Business, the Supermarket Business, the Discount Store Business, and the Health and Wellness Business which expanded sales of private brands and improved productivity with digital technology and reduced power consumption. Operating profit also increased in the Shopping Center Development Business and the Services and Specialty Store Business, which recovered customer traffic compared with the COVID-19 pandemic period. Conversely, there was a decrease in profit in the Financial Services Business, mainly attributed to an increase in the provision of allowances for doubtful accounts, which aligned with the balance of operating receivables.

1. 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 started the online market "Green Beans," which ships from a customer fulfillment center. The service areas for Green Beans have expanded to include seven special wards in Tokyo, as well as four cities in Chiba Prefecture, and two wards in Kawasaki City, Kanagawa Prefecture, starting from September. Customers will be able to designate delivery times within one-hour windows between 7 a.m. and 11 p.m., select from up to 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. A second customer fulfillment center is scheduled to launch operations in 2026 in Hachioji City, Tokyo Metropolitan area. The center will be attached to a commercial complex scheduled to open by AEON Mall Co., Ltd. in 2025.
• During nearly 50 years since its launch, the position of private brands has changed from offering quality equivalent to a national brand at a low price to a source of differentiation and competitive advantage

2