fy2018 1st half presentation materials...august : sales were hurt by torrential rains and typhoons ....

Copyright 2018 AEON CO., LTD. All Rights Reserved.

FY2018 1st Half

Presentation Materials

October 10, 2018


Results YoY %, changes

（1Q）（2Q）

Operating Revenue 4,266.4 +2.3% +1.8% +2.9%

Operating Profit 89.8 +4.8 +2.9 +1.8

Ordinary Profit 90.8 +5.3 +2.8 +2.5

Profit attributable to owners of parent 10.5 +6.3 +2.8 +3.4

Consolidated Results

Operating Revenue ：Continued growth; 8th straight all-time quarterly record Operating Profit, Ordinary Profit ：Achieved record highs Profit attributable to owners of parent ：＋150％

（ Billion yen ）

1


Operating Results by Business Segment

Results YoY % （1Q）（2Q）

Operating Revenue 4,266.4 +2.3 +1.8 +2.9

GMS 1,534.6 +0.7 -0.1 +1.5

SM 1,629.8 +0.4 -0.4 +1.2

Health＆Wellness 394.8 +13.3 +13.4 +13.3

Financial Services 211.7 +7.0 +8.7 +5.3

Shopping Center Development 178.1 +8.0 +6.9 +9.2

Services & Specialty Store 395.3 +1.2 +0.7 +1.7

International 220.4 +8.1 +7.8 +8.5

Operating revenue grew across all segments, led by Health & Wellness; GMS and Supermarket businesses resumed growing their operating revenue

（ Billion yen ）

2

【Operating Revenue】


Operating Results by Business Segment

Results YoY changes （1Q）（2Q）

Operating Profit 89.8 +4.8 +2.9 +1.8

GMS -5.8 +4.0 +1.8 +2.2

SM 11.1 +0.2 +0.1 +0.1

Health＆Wellness 13.6 +0.6 -0.1 +0.7

Financial Services 31.9 -0.9 +2.5 -3.5 Shopping Center Development 25.4 +1.9 +0.5 +1.3

Services & Specialty Store 13.7 -2.3 -1.5 -0.8

International 0.5 +1.7 +1.5 +0.2

GMS made the largest improvement by improved sales trend. Shopping Center Development business’s overseas operations and International business regained profitability

（ Billion yen ）

3

【Operating Profit】


Impact on consolidated

operating revenue

(Estimate)

Impacted by natural disasters and irregular weather

June & July : Intense heat was a tailwind but temporary store closures due to natural disasters totaled over 8,700 hours. August : Sales were hurt by torrential rains and typhoons.

4

95

100

June July AugustTohoku, Hokuriku-shinetsu, Kinki

North Kanto, South Kanto, Chugoku & Shikoku

Tokai

（Reference）Monthly change of YoY sales of AEON Retail existing store

（％）

▲0.6 billion yen Earthquake in

northern Osaka

▲0.4 billion yen Torrential rainfall in western Japan

▲2.8billion yen （irregular weather）

Natural disasters

・ Irregular weather

<June> ・Earthquake in northern Osaka

<July> ・Torrential rainfall in western Japan

<August> ・Torrential rainfalls （On 5th & 31st at Tohoku area) (On 15th & 16th at Northern Japan)）・Nine typhoons (most in 24 years), including two consecutive ones attacked Japan from 21st to 24th


Operating Results of AEON Retail

5

Operating Revenue YoY (Same store sales） Gross profit margin

（YoY change） YoY Same store

SG&A Operating

Profit YoY change

1,084.4 100.2（99.1) 26.2（+0.2） 99.7 -3.5 +3.0

（億円、％）

【AEON Retail :1H results（Billion yen, ％）】

Improved 3.0 billion yen YoY. Strong sales in categories such as beverages due to intense heat. Evening sales improved by adding promotions. Gross operating profit grew by less price changes and TOPVALU sales growth.

【Same store sales (YoY), gross profit improvement, and decrease in SG&A】

0

10

20

98

99

100

1Q 2Q

営業総利益改善額

販管費削減効果額

既存店売上前年比

（％）（Billion yen）

1.0 Decrease in SG&A

2.0

Gross profit improvement

Same store sales (YoY)


Operating Results by Region

Operating profit from overseas expanded. Operation in China have moved into the black.

海外 20.5%

6

【Operating profit by region（％）】

0

100

200

2017/2Q 2018/2Q

ASEAN

-20

0

20

2017/2Q 2018/2Q

China 2.0

-2.0

11.0

2017/2Q

19.1

2018/2Q

Overseas

【Operating profit of ASEAN & China（Billion yen）】

20.0

10.0


FY2018 Forecasts

FY2018 Forecasts YoY % YoY changes

Operating Revenue 8,700.0 +3.7% +309.9

Operating Profit 240.0 +14.1% +29.7

Ordinary Profit 240.0 +12.3% +26.2

Profit attributable to owners of parent 35.0 +42.7% +10.4

（Billion yen）

7


Reference Materials

9


Segment Change

FY2017 Inter–segment changes FY2018

GMS GMS

Supermarket Supermarket

Drugstore & Pharmacy Health＆Wellness ※Change in segment name

Financial Services Financial Services

Shopping Center Development

Shopping Center Development

Services & Specialty Store

Services & Specialty Store

International International

Cosmeme CO., LTD. AEON BODY Co., Ltd. R.O.U CO., LTD. AEON FOREST CO., LTD.

※AEON.com Co., Ltd. in GMS business was transferred to other business.

10


Assets (main items only) 2018/2 2018/8

Change from ‘18/2

Cash and deposits 918.0 808.0 ▲ 109.9

Notes and accounts receivable - trade (incl. installment receivables

1,292.1 1,472.3 ＋180.2

Inventories 600.2 580.1 ▲ 20.1

Operating loans, Loans and bills discounted for banking business

2,167.5 2,306.1 ＋138.6

Property, buildings and equipment 2,755.1 2,841.4 ＋86.2

Investments and other assets 928.4 930.4 ＋1.9

Total assets 9,452.7 9,864.7 ＋411.9

Liabilities and net assets

(main items only) 2018/2 2018/8

Change from ‘18/2

Notes and accounts payable – trade

906.1 966.3 ＋60.1

Interest bearing debt (excl. finance subsidiary)

1,534.6 1,589.0 ＋54.4

Interest bearing debt (finance subsidiary)

809.7 850.7 ＋40.9

Deposits for banking business 3,007.2 3,287.5 ＋280.2

Total liabilities 7,536.0 7,981.7 ＋445.7

Shareholder’s equity 1,061.9 1,053.2 ▲ 8.6

Total net assets 1,916.7 1,882.9 ▲ 33.7

Total net assets and liabilities 9,452.7 9,864.7 ＋411.9

（Billion yen）

FY2018 1H Consolidated Balance Sheets

11


FY2018 Forecast of Dividend Payments

FY2017 Results FY2018

Dividend per share / year

End of second quarter

Ordinary dividend 15yen

Ordinary dividend 17yen

Year-end Ordinary dividend

15yen Ordinary dividend

17yen (forecast)

Total Ordinary dividend

30yen Ordinary dividend

34yen (forecast)

12


FY2018 1H Result of Daiei and ex-Daiei GMS

Business segment Company name

Operating Revenue Operating Profit

Results YoY % Results YoY changes

GMS

AEON Retail store ※Former Daiei GMS in Kanto, Kinki, and Nagoya region

68.9 -3.0％ -3.4 +0.9

AEON Store Kyushu ※Former Daiei GMS in Kyushu 28.6 +2.0% -0.7 +0.2

SM Daiei 142.9 -3.2% -3.5 -0.9

（Billion yen）

13


Disclaimer regarding Forecast Statement

14

These materials are intended for the purpose of providing information, and not to encourage any specific actions. The company has prepared these materials (including business plans) based on available information believed to be reliable, but there are risks and uncertainties. The company bears no liability for the accuracy or completeness of the information.

Please use these materials at your own discretion. The company bears

no liability for any loss or harm that may arise from investment decisions made on the basis of any of the projections or targets contained in these materials.

All rights of authorship of these materials revert to AEON CO., LTD.

These materials may not be reproduced or distributed without the permission of the company.

Supermarket Business Reforms

October 10, 2018

10 trillion yen


Operating Revenue

Operating Profit

Major initiatives of AEON Group

【Targets for FY2020】

1. Supermarket reform2. GMS reform3. Digital reform

1

Announcement on December 12, 2017

340.0 billion yen

Change in food market environment• Preference for low-priced

products• Local, natural, organic,

traditional• Demand for time-saving

meal options• Shift away from national

brands, toward SPA model

Customer changes

Change in business environment

• Intensification of competition (cross-sector and cross-format)

• Changing labor environment

Copyright 2018 AEON CO., LTD. All Rights Reserved. 2

Changes in food market environment

Drugstore GMS Supermarket

【Labor distribution share】

３４％

４６％

４９％

3Copyright 2018 AEON CO., LTD. All Rights Reserved. ※Average labor share to sales of top-10 retailers ranked by sales in each subsector

Changes in business structure of Aeon Group

FY2017FY2000

GMS1.8

Supermarket

0.3Others0.6

Others2.0

Supermarket

3.2GMS3.1



(Trillion yen)


FY2000

GMS1.8

Supermarket

0.3Others0.6


GMS as core business

• Focused on concentration and efficiency

• Generated competitiveness by scaling up andstandardization


(Trillion yen)


FY2017

Others2.0

Supermarket

3.2GMS3.1


Specialized for each business format

• Focused on flexibility

• Generate competitiveness by optimal scale


(Trillion yen)

（FY2017/billion yen）

Sales Cash flowAEON Hokkaido １８６.０１０.０Maxvalu Hokkaido １２４.０２.０Maxvalu Tohoku １０３.０２.０AEON Retail Tohoku Company ９８.０８.０Maxvalu Tokai ２１７.０６.０Maxvalu Chubu １７２.０３.０Daiei ２８０.０２.０KOHYO １１２.０ 0.５Maxvalu Nishinihon ２６９.０７.０marunaka １７８.０５.０SANYO MARUNAKA １２２.０４.０AEON KYUSHU ２１４.０４.０Maxvalu Kyushu １７５.０３.０AEON store Kyushu ５４.０ ▲１.０

Sales and Cash flow

Copyright 2018 AEON CO., LTD. All Rights Reserved. 7※All figures are rounded off to the nearest billion※Cash flow : operating cash flow

FY2017 sales ranking considering supermarket consolidation by region （FY2017/billion yen）

Rank Sales

1 U.S.M.H 673.0

2 LIFE 658.0

3 ARCS 513.0

4 York Benimaru 429.0

5 Yaoko 347.0

6 Daiei 280.0

7 valor 279.0

8 MaxvaluNishinihon 269.0

9 SUMMIT 265.0

10 OKUWA 256.0

Rank Consolidation by region Sales

1 U.S.M.H 673.0

2 LIFE 658.0

3 MV Nishinihon, marunakaand SANYO MARUNAKA 531.0

4 ARCS 513.0

5 AEON KYUSHU, MV Kyushu and AEON store Kyushu 444.0

６ Daiei and KOHYO 431.0

７ York Benimaru 429.0

8 MV Tokai and MV Chubu 390.0

9 Yaoko 347.0

10 AEON Hokkaido andMV Hokkaido 310.0

※Sales of stores slated to be transferred from Maxvalu Nishinihon and Sanyo Marunaka to Daiei and Kohyo are included in 6th‐ranked Daiei/Kohyo’s ¥431bn of sales.

※All figures are rounded off to the nearest billion.


※Estimates based on data published in Hanbai Kakushin (July 2018 edition)Valor’s sales are non‐consolidated sales of Valor Co., Ltd.; Maxvalu Tokai’s sales are non‐consolidated sales.

8

Optimal scale by region to realize reform

Optimal scale by region to realize reform

Aims of Supermarket reform


Business model reforms

Further local community-based

business

SG&A expenses ratio

Operating revenue＋65.0 billion yen

▲２％

HokkaidoAEON HokkaidoMaxvalu Hokkaido

TohokuMaxvalu TohokuAEON Retail Tohoku Company

Tokai ChubuMaxvalu TokaiMaxvalu Chubu

KinkiDaieiKOHYOChugoku & ShokokuMaxvalu Nishinihonmarunaka, SANYO MARUNAKA

KyushuAEON KYUSHUMaxvalu KyushuAEON Store Kyushu

Expanded growth opportunities by consolidating independent supermarket operators.

Expected to expand growth opportunities by consolidating supermarket operators that have been sharing brands and business infrastructures.

Accelerate reforms toward new frameworks and new discipline by learning from each other.

U.S.M.H

Growth through consolidation



Consolidation schedule

Starting from consolidation in Chugoku/Shikoku area in March 2019, the other areas will follow after at the shortest period of time.

12

Operating Profit

Operating Revenue

3.1trillion yen

110.0billion yen


2025 targets for all six areas

fy2018 1st half presentation materials...august : sales were hurt by torrential rains and typhoons ....

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