Financial Results for the Fiscal Year EndedFebruary 28, 2018

AEON DELIGHT CO., LTD.
Ippei Nakayama, President and CEOApril 11, 2018

Solve the social challenge of labor
shortage from the field of facilitymanagement©2018 Aeon Delight All Rights Reserved2

Contents

1

Financial Report for the Fiscal Year Ended February 20182

Initiatives for Priority Management Issues

3

Initiatives for the Fiscal Year Ending February 2019©2018 Aeon Delight All Rights Reserved3Mid-term Management Plan (FY2/18-FY2/20)
Currently, the effect of labor shortage is expanding

Labor-saving (establishment of highly efficient/highly
profitable-type model) is an urgent and the greatest challenge■Basic policies for the mid-term management plan (FY2/18-FY2/20)
Impact to us

Environment

Basic policy

 Increase in personal cost

Declining labor force
Aging society

Shift economic
center to Asia

Evolution oftechnology Domestic labor shortage
 Aging of population at sites

Change in urban environmentGrowing needs of FM

 New business model Competition with different

IFM
Asia
Technologyindustries©2018 Aeon Delight All Rights Reserved4

Achievements and Issues for FY2/18
Expand business steadily in Asia but delay in thedevelopment of labor-saving model for use of technology■ Progress in the mid-term management plan (FY2/18-FY2/20)
Basic policy

IFMAsia

Assessment

From FY2/19（+）Acquire expertise as a new corporate
business model and build an
operating base（－）Opportunity loss due to labor shortage（+）Expand business steadily in China
Profits improve in ASEAN

Establish FM labor-saving
and unmanned models
early
to overcome labor shortage whichis the greatest challenge（+）Establish energy saving modelTechnology（－）Not able to establish labor-saving
model and to absorb labor cost
increase©2018 Aeon Delight All Rights Reserved5

Consolidated Income Statement① From 3Q onward, sales and gross profit margin fell below the plan and showed great
difference in operating income② Full-year sales and net income exceeded the previous year
FY2/17(Ratio to sales)

Net sales

FY2/18(Ratio to sales)(100 million yen)
Difference

Percentagechange2,947 （100.0%） 2,958 （100.0%）

11100.4%▲099.8%Gross profit

389 （13.2%）

389 （13.2%）

SG&A

217（7.4%）

220（7.5%）

3

101.6%

Operating income172（5.9%）

168（5.7%）▲497.4%

Ordinary income

173（5.9%）

172（5.8%）▲099.4%

Net income attributableto owners of parent

102（3.5%）

103（3.5%）0100.8%©2018 Aeon Delight All Rights Reserved

6

Business Expansion in Asia
Overseas sales were 107.2% YoY, operating income grew 1.5 times YoY (*)
Changes in overseas sales/operating profit margin (100 million yen/%)
150

China
中国事業
businessMalaysia
マレーシア

Operating

ベトナム
Vietnam

営業利益率profit margin

10.0%

1005.0%50

00.0%
FY2/1４2013

2014
FY2/152015
FY2/162016
FY2/172017FY2/18

Fiscal year

FY2/14

FY2/15

FY2/16

FY2/17

FY2/18Net sales(100 million yen)

4289

106120129

Operating profit margin(%)▲1.03.4

3.9

5.2

7.3

*Numbers are sums of the performance of individual companies*Conducted business restructuring including withdrawal from unprofitable businesses between FY2/17 and FY2/18 in China©2018 Aeon Delight All Rights Reserved

7

Sales by Segment
YoY increase in 4 segments. Construction work is mainly affected by decrease in construction
contracts associated with large customers’ store renovations in the previous year
FY2/17

FY2/18Percentage（100 million yen）
changeFacilities management

505

526

104.2%

Security services

410

432

105.4%

Cleaning services

533

552

103.6%

Construction work

458

408

89.3%

Materials/supplies
sourcing services

507

502

99.1%

Vending machineservices

328

328

99.9%

Support services

203

205

101.4%

Total

2,947

2,958

100.4%*Executed partial reorganization between each of the security, cleaning, construction, and support segments(Installation of safety camera equipment, construction works projects ⇒ Security, waste material commissions
support ⇒Cleaning)©2018 Aeon Delight All Rights Reserved

8Profit by Segment
Profits increased in 5 segments. Sales of construction work decreased and profits increased due to change inportfolio
Security services affected by increase in outsourcing cost, vending machine service cost increased due to a shit
in revenue model
Percentage

FY2/17

FY2/18changeFacilities management43

46

106.8%

Security services

31

28

91.9%

Cleaning services

6062103.6%

Construction work32

33

103.0%

Materials/supplies
sourcing services

27

28

103.4%

Vending machineservices

282174.9%Support services2325

106.0%

Total

246

245

99.5%

（100 million yen）

*Segment earnings…Operating income by segment calculated by excluding internal transaction by segment and corporate expenses(corporate common expenses not specified by segment)©2018 Aeon Delight All Rights Reserved

9Consolidated Balance Sheet（100 million yen）
FY2/17

FY2/18Difference

Current
liabilities

440434▲5Fixedliabilities

3327▲5474462▲11

Shareholder’sequity88595973▲4Total net assets

920

1,005

8473

Total liabilities
and net assets

1,395

1,46873Assets

FY2/17

FY2/18Difference

Current assets

1,124

1,20278

Tangible fixedassets

901009Intangible
fixed assets

9080▲10Investments,etc.

8985▲3Fixed assets

270266

Total assets

1,395

1,468

Liabilities andnet assets

Totalliabilities©2018 Aeon Delight All Rights Reserved

10Consolidated Cash Flow Statement(100 million yen)

AssetsFY2/17

FY2/18Difference（100 million yen）
Operating
営業ＣＦ
CF

150

Cash flows fromoperating activities

11713518

100

Cash flows frominvesting activities

22▲26▲4950

Cash flows fromfinancing activities▲24▲32▲80

Cash and cash
equivalents at the endof year

31038777(50)

FY2/17

Investing

投資ＣＦCFFinancing
財務ＣＦ
CF

FY2/18©2018 Aeon Delight All Rights Reserved

11

Contents

1

Financial Report for the Fiscal Year Ended February 20182

Initiatives for Priority Management Issues

3

Initiatives for the Fiscal Year Ending February 2019©2018 Aeon Delight All Rights Reserved

12Initiatives for Priority Management Issues
Create a highly efficient FM business model (labor-saving/unmanned, patroltype) and solve priority management issues
Priority management
issuesDeclining labor force
Aging society✓Increase in personalcost✓Domestic labor shortage✓Aging of population atsites

SolutionsMeasures

Shift from on-site
security of facilities
to patrol-type

Create labor-savingmodel

Strengthen patroltype model

Technology

UnmannedFM©2018 Aeon Delight All Rights Reserved 13

Creation of Labor-saving Model for Large-scale Commercial Facilities in Japan

Reduce the number of staff on duty at all times by halfand cut cost by 40% with labor-saving model
Under verification[Customers]

Introduction oflabor-savingsystem

Cut facility cost by40%[Our company]
Reduce the number ofstaff on duty at all times
by half

FY2/19 1H
Establish labor-saving
model
FY2/19 2H
Development of several
facilities©2018 Aeon Delight All Rights Reserved 14

Strengthening of Patrol Services for Small and Mid-sized Facilities in Japan① Create a new FM business model through cooperation② Strengthen patrol service locations by reducing staff on duty at all times＜Before＞
Sales
Cost
Personnel
cost＜After＞
Reduce staff
on duty at alltimes

Sales

Unit price up

Sales

Cost

Cost

Personnel
cost

Personnel
cost

Increase the number of patrol service locations,strengthen sales
On-site type: profitability up × Patrol-type: sales up

Create a highly efficient/highly profitable model©2018 Aeon Delight All Rights Reserved15

Creation of FM Unmanned Model (Smart FM) in China
Create FM labor-saving/unmanned model in China where it ismaking a significant progress in digitalization

SmartFM
Smart

Smart
Security

Cleaning

Smart
Parking

Smart
Service

Smart
RetailClient

CustomerCast

Deploy intelligent facilities,
purchase marketing information

Impressive experience atfacilities

Work style reforms, productivity,
standardization©2018 Aeon Delight All Rights Reserved 16

Contents1

Financial Report for the Fiscal Year Ended February 20182

Initiatives for Priority Management Issues

3

Initiatives for the Fiscal Year Ending February 2019©2018 Aeon Delight All Rights Reserved17

Strengthening of IFM (Integrated Facility Management) Proposal
Use IFM to promote reforms of indirect
department/general affairs functions thathave growing demand due to shortage ofhuman resources
Customers(Management strategy)

Management Domain

Management Division

Grasp customers’ needs for outsourcing

To our customers’ IFM partner(General affairs, purchase…)

AEON Delight (IFM proposal)
Energy management/facility budget control/cost reduction
Work place
plan/BCP/formulation and management of improvement
plan/vender management, evaluation and training/outplacement

RPA※BTM

Operation Domain
Establish an effective portfolio●An optimum combination of internal andoutsourcing●Improve productivity and profitability

AEON Delight, affiliated companies and collaborating firms

Integrated services

IFM

MICE

Equipment/cleaning/security/energy conservation/building
construction/materials/vending machines/housekeeping
Catering/in-house delivery/uniform/dormitory operation/human resources andgeneral affairs work

*RPA (Robotic Process Automation) Robotic operational efficiency. Mainly takes care of white-collar work at back-office©2018 Aeon Delight All Rights Reserved18Store Design and Interior Construction
Made a company specialized in store designing a wholly owned subsidiaryto strengthen the upstream of value chain and expand orders for interior
construction in Japan and abroad
Made U-COM Co., Ltd. with substantial
track records in commercial facilities inJapan and abroad a subsidiary

Previous major services

Strengthen organization

Research andplanningStore designing

×Supervision

Production andconstruction

Aftermaintenance

Restoration workand compartment
formation

Total support from research and planning to after maintenance

Expand orders in Japan and abroad©2018 Aeon Delight All Rights Reserved 19

Business Expansion in Asia①China Business
Expand sales by two core companies and make a difference
through new business for further growth
Organic

Catering

Renovation

Unexplored areas(Shandong, Guangdong)

Attract a huge market

Store design andinterior construction+ M&As aimed at shifting and creating business structure©2018 Aeon Delight All Rights Reserved 20

Business Expansion in Asia②ASEAN
Existing areas (Malaysia, Vietnam)
Promote alliance strategies with local leadingcompanies[1Q topics]
Malaysia
Received orders for the country’s largest resortrelated company’s facilities
VietnamReceived orders for the Japanese public office

Newly-developed areas (Cambodia, Indonesia)
Expand into Cambodia as a branch office of AD Vietnam
Consider an area strategy through M&As of localcompanies©2018 Aeon Delight All Rights Reserved21

Breakdown of YoY Increase in Operating Income
FY2/19 operating income ¥18.5 billion Up ¥1.68 billion YoYItems

YoY change (100 million yen)

① IFM (Expansion of customers)

８② Store design and interior construction

3③ Business expansion in Asia

6④ Labor-saving and cost improvement

7⑤ Growth of domestic subsidiaries

6①- ⑤ Total gross profit

30

YoY increase in SG&A

12

YoY increase in operating income

18©2018 Aeon Delight All Rights Reserved

22

Business Forecasts for FY2/19

FY2/19 Forecasts(Ratio to sales)(100 million yen)

FY2/18 results(Ratio to sales)

Net sales

2,958 （100.0%） 3,050 （100.0%）

Percentage change

103.1%

Operating income

168（5.7%）

185（6.1%）

110.0%

Ordinary income

172（5.8%）185（6.1%）

107.0%Net income attributableto owners of parent

103（3.5%）

110（3.6%）

106.6%©2018 Aeon Delight All Rights Reserved23

Toward Realizing the Mid-Term
Management Plan
MarketCompetitive advantage
Labor-saving/highly efficientmodel for large facilitiesJapan

Patrol-type/highly profitablemodel for small andmid-sized facilities

Environment businessStore design andinterior construction

Asia

Highly efficient/highly profitable businessNew business domain

Accelerate growth rate

Smart FM©2018 Aeon Delight All Rights Reserved 24

Capital Policy
Consolidated payout ratio: Maintain around 30%
Capital efficiency: Maintain around 12% of ROE
EPS (Yen)
ＥＰＳ（円）（Yen）
260

ＲＯＥ（％）

（%）
15.0

12.5

12.5

12.3

12.0

200

12.3

12.0

183.9

194.8

11.0
196.2

10.0

166.2
155.5

140

131.8

143.2

5.0

80

0.0
FY2/12
2011

FY2/132012

FY2/1４2013

FY2/152014

FY2/162015

FY2/172016

FY2/182017©2018 Aeon Delight All Rights Reserved25Shareholder ReturnAim for 14 consecutive years of increased dividends since FY2/06
（％）

（Yen）
Dividend
配当金70

Commemo-rative
記念配当
dividend

Dividend forecast

Dividend payout

配当予想（円）(Yen)

配当性向（％）
ratio (%)

40.06035.015030.04025.0530614620485052635420.015.0403410045.015817.52210.0275.090.0
FY2/05
2004 FY2/06
2005 FY2/07
2006 FY2/07
2007

FY2/082008

FY2/14 2014
FY2/15 2015
FY2/172017
FY2/182018
FY2/19FY2/12 2012
FY2/13 2013
FY2/09 2010
FY2/162016
2009
FY2/11 2011©2018 Aeon Delight All Rights Reserved26Make the Next Leap under a New Framework
President (scheduled)

Kazumasa Hamada
Previous Senior Executive Officer, AEON RETAIL Co., Ltd.
Branch Manager, Kita-Kanto and Niigata Companies*Mr. Kazumasa Hamada is scheduled to become President following the 45th
annual meeting of shareholders to be held in May 2018 and the subsequent
resolution of Board of Directors©2018 Aeon Delight All Rights Reserved27

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.
(Stock code: 9787)

IR Contact Yoshiyuki KyomotoGroup Strategy Div.
TEL 043-351-2563
Or visit our website at:
ｈｔｔｐ：//ｗｗｗ．ａｅｏｎｄｅｌｉｇｈｔ．ｃｏ．ｊｐ

This presentation has been prepared based on the information available as of the date of the presentation (April 11, 2018). The business
forecasts may be revised due to various factors that may arise in the future.