Financial Results for the Six Months Ended
August 31, 2020

AEON DELIGHT CO., LTD.
Kazumasa Hamada, President, Group CEO
October 7, 2020

Contents

1

Financial Report for 2Q of FY2/21

2

Issues to be Addressed and Measures (Progress and Initiatives for 2H)©2020 AEON Delight All Rights Reserved 2

Consolidated Statement of Income
Decline in sales, operating income and ordinary income due to partial closures or temporary
closures of customers’ facilities, and requests to refrain from events and going out by theJapanese government to prevent the spread of the new coronavirus (COVID-19).

(100 million yen)

FY2/20 2Q(Ratio to sales)

FY2/21 2Q(Ratio to sales)

Difference

PercentagechangeNet sales

1,574 （100.0%）

1,497 （100.0%）

▲77

95.1%

Gross profit

197 （12.5%）

182 （12.2%）

▲15

92.3%

SG&A expenses

111（7.1%）

107（7.2%）▲4

96.2%

Operating income

85（5.5%）

75（5.0%）▲1087.3%

Ordinary income

86（5.5%）

74（5.0%）▲11

86.6%

Net income attributableto owners of parent

51（3.3%）

39（2.6%）▲12

76.1%©2020 AEON Delight All Rights Reserved 3

[Reference] Income Statement excluding former KAJITAKU* (Same Scale Comparison)(100 million yen)

[Reference]
FY2/20 2Q(Ratio to sales)

FY2/21 2Q(Ratio to sales)

Difference

Percentagechange1,547 （100.0%）

1,480 （100.0%）

▲66

95.7%

Gross profit

199 （12.9%）

182 （12.4%）

▲16

91.7%

SG&A expenses

107（6.9%）

103（7.0%）▲3

96.6%

Operating income

92（6.0%）

79（5.3%）▲12

86.0%

Net sales*Income statement excluding the results of Current Aqutia Corporation (successor company to the Housekeeping Support Business) andKJS Corporation (formerly KAJITAKU, changed its name as of March 1, 2020).

©2020 AEON Delight All Rights Reserved 4

Impact of the spread of COVID-19
Impact of COVID-19 in the first half was within the initial projection(1H Result)
Assuming that the impact of partial closures and temporary closures of ourcustomers' facilities will continue through the first half of the fiscal year,
we estimate the -1.5 billion yen impact on full-year operating income

The impact of COVID-19 on operating income for 1H was about -1.1 billion yen.

(2H Outlook)
Although negative impact of lower sales in AEON Compass due toself-restraint on travel and holding events will continue, the negative impact of
COVID-19 on the other businesses will bottom out in 1H.
Making up for delays in measures due to COVID-19 andactively propose epidemic prevention-related services©2020 AEON Delight All Rights Reserved 5

Sales by Segment
Material-related sales grew thanks to increased orders for epidemic prevention materials.
(100 million yen)

Percentage change

FY2/20 2Q

FY2/21 2Q

Facilities management

296

290

98.2%

Security services

221

216

97.8%

Cleaning services

309

304

98.4%

Construction work

231

221

95.7%

Materials/supplies
sourcing services

259

266

102.7%

Vending machineservices

160

120

75.0%

Support services

96

77

80.2%

(Reference)
Excluding KAJITAKU

68

60

87.9%

Total

1,574

1,497

95.1%

(Reference)
Excluding KAJITAKU

1,547

1,480

95.7%
©2020 AEON Delight All Rights Reserved 6

Profit by Segment
In security services, we improved the profitability by optimizing unit prices and systemizing
entrance and exit management and closing operations(100 million yen)

FY2/20 2Q

FY2/21 2Q

Percentage change

Facilities management

27.8

25.4

91.4%

Security services

14.1

15.9

112.8%

Cleaning services

35.1

34.3

97.7%

Construction work

21.7

20.8

95.7%

Materials/supplies
sourcing services

13.5

12.8

94.8%

Vending machineservices

7.0

3.5

50.7%

Support services

2.5

▲1.0

-

(Reference)
Excluding KAJITAKU

8.6

3.1

36.4%

122.0

111.9

91.8%

128.1

116.1

90.6%

Total
(Reference)
Excluding KAJITAKU©2020 AEON Delight All Rights Reserved 7

Consolidated Balance Sheet(100 million yen)

AssetsFY2/20FY2/21
2Q

Difference

Current assets

1,123

1,054

▲69

Tangible fixed
assets96

99

3Intangible
fixed assets

71

69

▲2

Investments,
etc.

76

71

▲5

Fixed assets

245

239

▲5

Total assets

1,369

1,293

▲75

FY2/20FY2/21
2Q

Difference

Current
liabilities

488

431

▲56

Fixed
liabilities

67

46

▲21

556

478

▲78

Shareholder’sequity

789

806

16

Total net assets

812

815

2

Total liabilities
and net assets

1,369

1,293

▲75

Liabilities andnet assets

Total
liabilities©2020 AEON Delight All Rights Reserved 8

Consolidated Cash Flow Statement(100 million yen)(100 million yen)
Operating CF

2019/82020/8Difference

Cash flows fromoperating activities

9

9

0

Cash flows frominvesting activities

▲17

▲51

▲34

Cash flows fromfinancing activities

▲16

▲34

▲17

Cash and cash
equivalents at theend of term

409

533

124

Investing ＣＦ

Financing ＣＦ

20

0

(20)

(40)

(60)

FY2/20 2Q

FY2/21 2Q©2020 AEON Delight All Rights Reserved

9Major Initiatives in FY2/21 2Q ① Began Establishing a New Normal for FM
Established the New Normal for Facility Management (FM)to protect the "safety and security" of facilities

Promote the creation of new standards that incorporate epidemic
prevention measures

The New Standard for FM incorporating
epidemic prevention measures＋
Various epidemic prevention measures inthe backyards of Aeon Group stores

Digital transformation of operations andservices(Upper left) USHIO INC. ‘s “Care222”
disinfection light source *Introduced fortesting(Upper right) All heat exchangers wereadded to increase ventilation.
(Lower left) CO2 concentration monitor isinstalled to promote ventilation

Aim to establish the FM New Normal, adapting to
the “With Corona” era and looking ahead to the“After Corona” era, as soon as possible.

©2020 AEON Delight All Rights Reserved 10

Major Initiatives in FY2/21 2Q ② Response to COVID-19 Infections<Safety and Security>

To ensure that shopping and working at Aeon continue to be "safe and secure“,
we were working to create stores adapting to “With Corona” era with FM New Standard

4 themes for FM New standards① Establish scientifically based cleaning methods
for sanitary environment (New Standard
Cleaning)② Efficient ventilation while maintaining comfort③ Development and introduction of contactless
services④ Raise awareness and knowledge of epidemic
prevention among store employees

Proposals will be made to facilities
other than AEON Group stores (offices,
New Standard Cleaning service began in September. The
work is carried out by the “Sanitation and Cleaning
Specialists" that has completed its own educational program.

factories, etc.)©2020 AEON Delight All Rights Reserved 11

Major Initiatives in FY2/21 2Q ③-1 Accelerate Business Model Reforms<Labor shortage>

To accelerate the digitalization of various services and operations,

we established dedicated cross-divisional organization "Business Model Reform PT"

4 Priority Items for Business Model Reform① Establish new facility management services
・ Establishment of Customer Support Center (CSC) to accurately grasp customer needs
・ Accelerate the digitization of business processes② Expand market share among existing customers
・ Improve customer satisfaction by strengthening account sales③ Explore new customers
・ Expand touch points with customers through the use of digital technology④ Create new business opportunities based on customer needs
・ Create new business opportunities based on customer needs through networks with partnercompanies

Launched a project led by an executive with expert knowledge and experience in each area
©2020 AEON Delight All Rights Reserved 12

Major Initiatives in FY2/21 2Q ③-2 Accelerate Business Model Reforms<Labor shortage>

Established an area management system in which our facilities managers are shared ineach area to provide services in line with the cost and quality required by customers

Labor-saving/
unmanned on-site managers＋

Established a new CSC to develop
services based on customer needs

Established an area management system

New Customer Support Center（CSC）
・Processing customer information and feedback into
valuable proposals
・Remote control and centralized monitoring of movementin the facility

Verified and confirmed effectivenessin Hokkaido and deployedthroughout Japan©2020 AEON Delight All Rights Reserved 13

Major Initiatives in FY2/21 2Q ④ Launch of Electricity Supply Service＜Environment＞

Started selling safe electricity at low prices to reduce energy costs at facilities

Securing routes to procure electricity at competitive prices
Started proposals for switching electricity to commercial facilities, office buildings, andmedical facilities in September.
Reduce facility energy costs while improving equipment operation by facility managers.

In the medium-to long-term, we will develop a system that enables proposals forthe use of renewable energy, and aim to minimize the environmental impact offacilities and contribute to the realization of a carbon-free society.

©2020 AEON Delight All Rights Reserved 14

Major Initiatives in FY2/21 2Q ⑤ Group Reorganization
Promoted group reorganization to realize Aeon Delight Vision 2025 with theseobjectives: ① strengthen governance, ② improve capital productivity, and③ clarify the functions and roles of each company■ June 2020
Transferred ID Photo Machine Business* as part of the reorganization process ofthe former KAJITAKU's Store Support Business (current KJS Corporation).
* Transferred all shares of newly established companies to DNP Photo Imaging Japan Co., Ltd. after taking over
KJS's ID photo Machine Business to the newly established company through a company split (new incorporationtype split)■ August 2020
Resolved to merge A to Z Service Co., Ltd. with DO SERVICE co., ltd. on
March 1, 2021
Strengthen our competitiveness in small and medium-sized commercial facilities by
providing total services from design to construction, facility management andcleaning throughout the country when a store is launched©2020 AEON Delight All Rights Reserved 15

Major Initiatives in FY2/21 2Q ⑥ Business Expansion in Asia
In overseas business, sales were 102.9% YoY, operating income was 98.7% YoY(*)
Overseas Business: Net Sales / Operating Income (100 million yen)
（Net sales)

China

Malaysia

Vietnam100

Indonesia

Operating income

20

94.2

91.6

（Operating
income）

80

16

60

12

40

7.2

7.1

8

20

4

0

0

FY2/20 2Q* Figures are simple totals of results of operating companies.

FY2/21 2Q©2020 AEON Delight All Rights Reserved 16

Contents

1

Financial Report for 2Q of FY2/21

2

Issues to be Addressed and Measures (Progress and Initiatives for 2H)©2020 AEON Delight All Rights Reserved 17

Position and Plan Figures for FY2/21
Year of laying the foundation for the realization of the “AEON DELIGHT Vision 2025*”(100 million yen)

Net sales

FY2/20 Result(Ratio to sales)

FY2/21 Forecast(Ratio to sales)

3,085 （100.0%） 3,150 （100.0%）

Percentage change

102.1%

Operating income

160（5.2%）

165（5.2%）

103.1%

Ordinary income

159（5.2%）

165（5.2%）

103.4%Net income attributable toowners of parents

93（3.0%）

100（3.2%）

107.0%*Target figures adjusted for the impact of COVID-19* For more information about Aeon Delight Vision 2025, please refer to the "Financial Results for the Second Quarter of the Fiscal Year Ended February 28,
2019 (p. 12-17)" dated October 10, 2018.

©2020 AEON Delight All Rights Reserved 18

Progress in Scenario for Achieving Operating Income Budget
Operating loss in the former KAJITAKU business and the impact of COVID-19
were in line with the plan.
(100 million yen)

180

140

KAJITAKU(KJS/Aqutia)
Operating loss (estimation):
500 million yen

Operatingincome:16 billion yen

KAJITAKU
Operating loss:
1.2 billion yen

Accumulated
operating income:1.3 billion yen

Operating income
budget:16.5 billion yen

Impact of COVID-19:
1.5 billion yen

100
Implementation of
measures to address
issues and other initiatives

60

FY2/20FY2/21©2020 AEON Delight All Rights Reserved 19

Issues to be Addressed and Measures (Progress and Future Initiatives)- Issues from FY2/20 ①-

Issues to be Addressed
Deterioration in facility
management profitability anda delay in measures against
this① Measures ② Progress ③ Initiatives for 2H① Improve low-profit properties and reforming business processes② No improvement due to the impact of rising outsourcing costs for existing
businesses and other factors③ In conjunction with ①, we will work to reduce costs by consolidating
suppliers and optimizing the unit purchase price.

Deterioration in cleaning
profitability and a delay inmeasures against this① Improve low-profit properties and improve productivity② Profitability improved on a non-consolidated basis by improving low-profit
properties with horizontally sharing good examples of improvement on asite basis, but profitability declined at subsidiaries due to discontinued
operations at commercial facilities and other factors.
③ Improve productivity, including at subsidiaries and partner companies, byrolling out best practices and expanding the introduction of cleaning robots

Insufficient building
construction work contracting① Expansion of renovation contracts② There were some construction delays due to COVID-19③ Continue to expand orders for large-scale projects byparticipating from the design stage, and steadily capture orders forsmall-scale projects through cooperation with consolidated
subsidiaries and partner companies, and expand outsourcing of
construction projects that have not yet been implemented orenvironmental construction related to compliance©2020 AEON Delight All Rights Reserved 20

Issues to be Addressed and Measures (Progress and Future Initiatives)-Issues from FY2/20 ②-

Issues to be Addressed

Deterioration in materialrelated profitability

Impact of the Kajitaku casegreater than expected① Measures ② Progress ③ Initiatives for 2H① Expand trading volume and reduce logistics costs② Through aggressive proposal activities from the beginning of the
fiscal year, we expanded trading volume from the 2Q onwards, andbuilt a structure that can utilize economies of scale.
③ Reduce costs through large-volume orders and improve logistics
efficiency① Growth of the housekeeping support business and restructuring of
the store support business② Despite the fact that the growth of the housekeeping support
business was not achieved the plan due to the impact of COVID-19,
the operating loss of the former 2 companies of KAJITAKU was asplanned.
③ Housekeeping Support Business (Aqutia)
Promoting growth by developing products adapted to new lifestyles
OTC support business (KSJ)
Prompt implementation of reorganization procedures©2020 AEON Delight All Rights Reserved 21

Issues to be Addressed and Measures (Progress and Future Initiatives)- Expand Market Share and Improve Productivity-

Issues to be Addressed

Progress

Expand market share

Increase market share within existing customers
by establishing account managers at companies
with nationwide operations

Increase productivity

Aim to improve company-wide productivity byhorizontally deploying area management basedon patrol-type facility management promoted
from Hokkaido©2020 AEON Delight All Rights Reserved 22

Other Initiatives in 2H to Achieve the Full-Year Plan

Improve profitability of the building maintenance business by expanding
the introduction of the FM New Standard and reducing costs
1. Establish new standards in FM and expand the introduction
•
•
•
•
•

Expand sales of epidemic prevention-related materials
Proposals for improved ventilation
New Standard Cleaning
Construction of a contactless facility environment
Raise awareness/knowledge of epidemic prevention among facility users

2. Improve the profitability of the four building maintenance businesses(facility management, security, cleaning and construction)•

Reduce costs in each business by consolidating suppliers andoptimizing purchase prices

3. Reduce SG&A expenses by promoting work style reform©2020 AEON Delight All Rights Reserved 23

If you have any questions or comments, please contact us below.
■ These materials contain statements about forecasts and estimates relating to the future plans, strategies, andperformance of AEON DELIGHT.
These statements are based not only on past performance, but also on assumptions based on information currently
available 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 statedotherwise.
◇ All statements are based on consolidated results◇ All figures of less than 100 million yen have been rounded down
◇ Percentages have been rounded off to one decimal place

AEON DELIGHT CO., LTD.
(Securities Code: 9787)

IR Contact : Emiko Ishii
Delight Communication Department
TEL 03-6840-5712
Please contact us on our website.
https://www.aeondelight.co.jp

Based on information available up to the date of publication (October 7, 2020)
These forecasts have been prepared and are subject to change due to various factors going forward.