イオンディライト（9787） – Supplementary Information on the Financial Results for the Fiscal Year Ended February 28, 2022

Financial Results for the Fiscal Year Ended February 28, 2022AEON DELIGHT CO., LTD.Kazumasa Hamada, President and CEO, Group CEOApril 7, 2022Contents12Financial Report for FY2/22Initiatives for FY2/23©2022 AEON Delight All Rights Reserved2Consolidated Statement of IncomeSales, operating income and ordinary income increased YoY thanks to market share expansion within existing customers and new customer development.The impact of COVID-19 on operating income was -1.2 billion yen, far exceeding the initial forecast (-0.5 billion yen).FY2/21 (Ratio to sales)FY2/22 (Ratio to sales)Difference(100 million yen)Percentage changeVs. FY2/20Net sales3,000 （100.0%）3,176(100.0%）175105.9%102.9%Gross profit371 （12.4%）394（12.4%）106.2%102.4%SG&A expenses219（7.3%）（7.5%）108.3%105.3%Operating income152（5.1%）（5.0%）103.3%98.3%237157Ordinary income152（5.1%）157（4.9%）103.4%99.0%Net income attributable to owners of parent116（3.9%）106（3.4%）▲1091.3%114.1%©2022 AEON Delight All Rights Reserved3231855Sales by SegmentSales increased in all 7 businesses YoY. Compared to FY2/20, sales increased in 5 businesses excluding vending machine services and support services businesses.FY2/21FY2/22Percentage change(100 million yen)Vs. FY2/20Facilities managementSecurity servicesCleaning servicesConstruction workMaterials/suppliessourcing servicesVending machineservicesSupport services582443624406530254158615472669430564263160105.7%105.6%106.4%105.8%107.2%107.4%105.8%102.8%106.5%110.5%103.5%83.5%101.3%85.5%Total3,0003,176105.9%102.9%©2022 AEON Delight All Rights Reserved4Profit by SegmentProfits increased in 5 businesses excluding construction work and vending machine services businesses. Construction work was affected by lower demand for environmental construction and other high value-added work, while vending machines were affected by fixed costs such as equipment expenses.FY2/21FY2/22Percentage change(100 million yen)Vs. FY2/20Facilities managementSecurity servicesCleaning servicesConstruction workMaterials/suppliessourcing servicesVending machineservicesSupport servicesTotal51.733.073.238.824.66.5▲0.7227.354.934.381.035.825.66.04.4106.2%103.8%103.9%113.1%110.7%116.4%92.4%93.9%103.8%102.8%93.1%43.6%-106.0%242.3106.6%103.5%©2022 AEON Delight All Rights Reserved5Consolidated Balance Sheet(100 million yen)Current liabilitiesFixed liabilitiesAssetsFY2/21FY2/22DifferenceFY2/21FY2/22DifferenceLiabilities and net assetsCurrent assets1,1001,210110441438▲29455Tangible fixed assetsIntangible fixed assetsInvestments, etc.70▲244135▲6561Total liabilities482474▲811591▲24Shareholder’s equity86692962Fixed assets265218▲47Total net assets88295471Total assets1,3651,42862Total liabilities and net assets1,3651,42862©2022 AEON Delight All Rights Reserved6Consolidated Statement of Cash Flows(100 million yen)(100 million yen)FY2/21FY2/22DifferenceFinancing Investing 営業ＣＦ 投資ＣＦ 財務ＣＦOperating CFCFCFCash flows fromoperating activitiesCash flows frominvesting activitiesCash flows fromfinancing activitiesCash and cashequivalents at the end of year 104▲73▲53125▲3▲45589675150100500(50)(100)2169785FY2/21FY2/22©2022 AEON Delight All Rights Reserved7FY2/22 Results and IssuesBasic policiesResultsIssuesCustomer-oriented management• Expanded market share among existing customers by strengthening account-based marketingapproach・Service development based on market-in Promotion of DX• Established Customer Support Center (CSC) in 8 branches in Japan• Reduced staffing at a total of 151 facilities nationwide through the deployment of area management, securing 115 personnel resources.• Improved profitability at facilities with labor saving.Group Management• China business expanded steadily due to organic growth and M&A of local leading companies.• The effect for profitability improvement is limited to labor-saving facilities as area management is still under development; the overall profitability of the Facilities Management business remaining unchanged.• Delay in the effects of the integration of AD Connect, which has been positioned as a core company for small-and medium-sized facilities• Slump in domestic subsidiaries due to the impact of COVID-19• Stagnation of ASEAN business due to the impact of COVID-19 in each country©2022 AEON Delight All Rights Reserved 8Medium-term Management Plan: Progress of KPIs (Key Performance Indicators) Delay of one to two years for some measures to take effect, partly due to higher-than-expected COVID-19 impact.Basic policiesCustomer-oriented managementKPI (End-FY2/24)End-FY2/22End-FY2/21Ratio of sales inside and outside the Aeon Group:60%：40%64.4%：35.6%64.3%：35.7%Promotion of Operating margin of 6.0%. Maintain ROE level of 12% DX(full year) through improvement of operating margin.Operating income margin: 5.0%ROE: 11.7％Operating income margin: 5.1%Number of facilities with area management introduced 360 facilitiesmanagementReduction of 180 on-site posts through area 151 facilities115 staffsReallocation of 20% of headquarters staffs to direct departments through consolidation of functionsBegan improving business processes in headquarterGroup Full-year sales of domestic group companies: 65 billion Managementyen52.1 billion yen52.8 billion yenOverseas sales ratio: over 8%7.8％Convert domestic group finance and accounting departments to shared services (full year)Started providing support from our finance and accounting department for all domestic group companiesItems in blue are items of improvements©2022 AEON Delight All Rights Reserved9ROE: 14.1%27 facilitiesーー6.7%ーBusiness Expansion in AsiaSteady growth in China through new customer development and business domain expansion.In ASEAN countries, we support customers’ business continuity amidst the continuing severe business environment due to the impact of COVID-19 in each country.[Overseas business] Net sales: 124.2% YoY; Operating income: 96.7% YoY*Overseas Business: Net Sales / Operating Income (100 million yen)(Net sales)中国マレーシアベトナムインドネシア営業利益(Operating income)199247161524020016012080400242016128401Net sales2Operating income3Net sales4Operating incomeFY2/21FY2/21FY2/22FY2/22*Figures are simple totals for operating companies.©2022 AEON Delight All Rights Reserved10Contents12Financial Report for FY2/22Initiatives for FY2/23©2022 AEON Delight All Rights Reserved11Positioning for FY2/23Aim for recovering through solving issues in FY2/22(100 million yen)FY2/22 Results(Ratio to sales)FY2/23 Forecasts(Ratio to sales)Percentage changeNet salesNew revenue recognition standardNew revenue recognition standard2,839（100.0%）3,100 （100.0%）109.2%Former revenue recognition standardFormer revenue recognition standard3,176（100.0%）3,470 （100.0%）109.3%Operating income157（5.0%）170（5.5%）108.3%Ordinary income157（4.9%）170（5.5%）108.3%Net income attributable to owners of parents106（3.4%）107（3.4%）100.0%*Ratio to sales (figures in parenthesis) are calculated based on the former revenue recognition standard for FY2/22 and the new revenue recognition standard for FY2022.*Estimated impact of COVID-19 on operating income for FY2/23: -0.8 billion yen (FY2/22: -1.2 billion yen)©2022 AEON Delight All Rights Reserved12Major Initiatives for FY2/23Basic PoliciesDetails of InitiativesCustomer-oriented management• Reorganize the local branch structure under 8 domestic regional offices, which serve as points of contact with customers.new customer development.• Expand market share among existing customers by enhancing the sales structure and • Expand the range of customer base of healthcare-related services, which have targeted healthcare-related facilities, and developing them as pillars of future business. • Systematize measures to reduce environmental impact; start a consulting business to support decarbonization for customers.Promotion of DX• Promote linkage among various systems and increase the amount of information stored to promote utilization of the AD Platform (enhance output through further accumulation and analysis of information).• Accelerate development of new facility management model “area management”.• Promote growth of domestic group companies by strengthening cooperation among • Start preparations to establish an ASEAN head office to strengthen the management Group Management• Further growth in China.group companiesfoundation.Explanation of each item in detail from the next pages.©2022 AEON Delight All Rights Reserved13Customer-Oriented Management ① Reorganize the local branch structure as points of contact with customersStrengthen connection with customers by restructuring the local branch structureThrough the structural reform on April 1, 2022,● Reorganize the local branch structure under the control of all 8 domestic regional offices, which are points of contact with customers, in accordance with customer needs, characteristic of facilities, regional characteristics, and the location environment.● Redefine duties at each level (branch head, branch manager, area manager, site manager)Each regional branch will establish a system to communicate with customers©2022 AEON Delight All Rights Reserved14Customer-Oriented Management ② Expand market share by strengthening sales structureStrengthen sales structure to further increase market share among existing customers, which was achieved in FY2/22, and promote new customer development.【FY2/22】● Increase market share among existing customers by strengthening account-based marketing【FY2/23】By strengthening the sales structure● Further strengthen relationships with existing customers by further promoting account-based marketing; increase market share through contributions to ● Increase orders received based on relationships with prospective customer base established in FY2/22. Build relationships with potential customers to develop new customers’ successes.customers.©2022 AEON Delight All Rights Reserved15Customer-Oriented Management ③ Develop healthcare solutionsExpand facility management services by leveraging experience and know-how gained through “hygiene control” and “New Standard Cleaning” services.【Initiatives taken】・In FY2/15, we began offering “hygiene control”, a service for hospitals that incorporates infection control, which led to a significant expansion of services offered to hospitals (hygiene control, facilities management, support services, etc.)・In FY2/21, we developed the “New Standard Cleaning” as a new standard for cleaning in the COVID era, leveraging the know-how of “hygiene control”, and provide it to various facilities. We are responding immediately to the changes in customer needs due to COVID-19. Amid growing social awareness of the need to prevent epidemics, we expand facility management services contracted to hospitals, hotels, and various other facilities by proposing solutions to improve the hygiene standards.©2022 AEON Delight All Rights Reserved16Customer-Oriented Management ④ Develop decarbonization support solutionsLeveraging our accumulated knowledge and technology to develop decarbonization support solutions【Environmental impact reduction services to date】• Installation of energy-saving equipment• Energy-saving operation of various eqipment• Chlorofluorocarbon (CFCs) management(CFCs management agent, sales of non-CFCs showcases)• Electricity supply service, etc.【Future environmental impact reduction services 】• Support for procurement of renewable energy• Support for issuance of environmental certificates, etc.Establish a dedicated organization to provide total support for customers’ decarbonizationA new pillar of our business based on the principle of Creation of “Environmental Value”©2022 AEON Delight All Rights Reserved17Promotion of DX ① Promote Utilization of AD PlatformPromote utilization of AD Platform through linkage of various systems and further accumulation of information storedIncrease in customer information by increasing accountsinputIncrease in facility information through remote control of facilities in conjunction with “area management” developmentinputAD PlatformA system that collects and analyzes a variety of data, including customer and facility information, and processes it into valuable information.outputValuable information that contributes to solving customer issues©2022 AEON Delight All Rights Reserved18Promotion of DX ② Accelerate development of area managementAiming to solve labor shortages and quickly reform profit structure through accelerated development of area management and digitalization of various operations【FY2/22】Reduced manpower at total of 151 facilities through the use of remote supports by CSC and various sensors and cameras. Reallocated total of 115 specialized personnel to newly commissioned facilities, sales and construction departments.【FY2/23】Labor-saving at 100 new facilities (278 facilities in total)Aim to redeploy 40 specialized personnel(155 in total)At the same time, promote R&D for DX in security, cleaning, and support businesses©2022 AEON Delight All Rights Reserved19●CSC with enhanced equipment in Kanto Regional Office Group Management ① Initiatives by Group Companies in JapanAiming for growth as a group while leveraging the expertise of each companyCompany nameInitiativesAEON DELIGHT CONNECTConcentrate sales resources on companies with small and medium-sized stores nationwideHakuseishaExpand market share among existing customersKankyouseibiExpand market share in the North-Kanto area through collaboration with our Kanto branchAEON COMPASSSteadily respond to demand recovering from the COVID-19©2022 AEON Delight All Rights Reserved20Group Management ② Business expansion in Asia (China)Aim for further growth through aggressive M&A and business alliances in addition to organic growthOrganic growth through expansion of contracts in the priority target areas of mid- to high-end shopping centers, hospitals and nursing homes, and redevelopment areasGrowth through M&A and business alliances• Acquisition of expertise• Expansion of business areas• Strengthening customer base, etc. In China, we are expanding our business areas, including operation services at logistics facilities (top photo) and refreshment supply stations (bottom photo).Continue to drive our overseas business as the largest growth area in Asia©2022 AEON Delight All Rights Reserved21Group Management ③ Business expansion in Asia (ASEAN countries)Strengthening management base for medium- to long-term growthContinue to support customers’ facilities in ASEAN countries while responding to changes due to COVID-19 in each countryIn addition, we have begun preparations to establish an “ASEAN Headquarters” to strengthen our management base for mid- to long-term growth and to chart a new growth strategy for each country.● Supporting customers’ business continuity amidst a continuing difficult business environment under COVID-19©2022 AEON Delight All Rights Reserved22Shareholder ReturnDividends have increased for 17 consecutive years since FY2/06.Aiming for 18 Consecutive Years of Dividend IncreasePlan to pay 84 yen per share for FY2/22 as forecasted at the beginning of the fiscal yearincluding 74 yen of ordinary dividend (payout ratio of 35%) and10 yen of commemorative dividend for AEON DELIGHT’s 15th anniversaryFor FY2/23, based on the assumption that the performanceforecasts will be achieved,Plan to pay dividends of 85 yen with payout ratio of 40%*Plan to increase the dividend from the previous fiscal year (including commemorative dividend) by applying the dividend payout ratio of 40%, which had been planned within the 3 years of the medium-term plan, in FY2/23.*In the case of net income attributable to owners of parent is 10.7 billion yen.In order to eliminate concerns about dilution of shares, 3.5 million shares out of4.1 million shares of treasury stock (ownership ratio of 7.66%) are scheduled to be retired.©2022 AEON Delight All Rights Reserved23If you have any questions or comments, please contact us below.■ These materials contain statements about forecasts and estimates relating to the future plans, strategies, and performance of AEON DELIGHT. These statements are based not only on past performance, but also on assumptions based on information currentlyavailable to the company. For this reason, please note that the actual performance may differ from our estimates. ■ The information contained in these materials has been prepared by the following methods if not specifically stated otherwise.◇ All statements are based on consolidated results◇ All figures of less than 100 million yen have been rounded down*Rounded down to the nearest 10 million yen only on p. 5◇ Percentages have been rounded off to one decimal placeAEON DELIGHT CO., LTD.(Securities Code: 9787)IR Contact : Emiko IshiiPresident’s Office, PR・IR GroupTEL 03-6895-3892Please contact us on our website.https://www.aeondelight.co.jpBased on information available up to the date of publication (April 7, 2022)These forecasts have been prepared and are subject to change due to various factors going forward.