Financial Results for the Three Months Ended
May 31, 2020

AEON DELIGHT CO., LTD.
Kazumasa Hamada, President, Group CEO
July 8, 2020

Contents

1

Financial Report for 1Q of FY2/21

2

Issues to be Addressed and Measures (Progress and Future Initiatives)

3

Other Initiatives©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 customer 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 1Q(Ratio to sales)

FY2/21 1Q(Ratio to sales)

Net sales

790 （100.0%）

Gross profit

Difference

Percentagechange735 （100.0%）

▲55

93.0%

96 （12.2%）

89 （12.2%）

▲6

93.1%

SG&A expenses

58（7.4%）

55（7.5%）▲3

94.4%

Operating income

38（4.8%）

34（4.7%）▲3

90.9%

Ordinary income

38（4.8%）

34（4.7%）▲3

90.5%

Net income attributableto owners of parent

20（2.6%）

29（4.1%）

9144.5%©2020 AEON Delight All Rights Reserved 3

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

[Reference]
FY2/20 1Q(Ratio to sales)

FY2/21 1Q(Ratio to sales)

Net sales

775 （100.0%）

Gross profit

Difference

Percentagechange726 （100.0%）

▲49

93.6%

98 （12.7%）

89 （12.3%）

▲9

90.3%

SG&A expenses

55（7.2%）

53（7.3%）▲2

95.4%

Operating income

43（5.6%）

36（5.0%）▲7

83.5%*Income statement excluding the results of Current Actia Corporation (successor company to the Housekeeping Support Business) and KJSCorporation (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 quarter was within the initial projection
Assuming that the impact of partial closures and temporary closures ofour customers' facilities will continue through the first half of the year,
we estimate the -1.5 billion yen impact on full-year operating income

The impact of COVID-19 on operating income for 1Q was about -1 billion yen.
Negative effects of COVID-19① Negative effects will continue to occur
Event-related (security and AEON COMPASS): sales decline due to voluntary restraint on events,
including travel.
② Temporary events
Facilities Management/Cleaning/Security/Materials/Vending Machines: sales declined due to partial
closures and temporary closures of commercial facilities
Construction work: decreased or postponed due to delays in procuring parts from overseas
We will make up for delays in measures due to the effects of COVID-19 throughout the year
©2020 AEON Delight All Rights Reserved

5Sales by Segment
Decrease in sales due to the impact of measures to prevent the spread of COVID-19 incountries where we operate(100 million yen)
Percentage change

FY2/20 1Q

FY2/21 1Q

Facilities management

149

145

97.2%

Security services

111

108

97.3%

Cleaning services

154

150

97.4%

Construction work

120

115

95.9%

Materials/supplies
sourcing services

129

129

99.8%

Vending machineservices

76

47

61.4%

Support services

48

39

81.4%

(Reference)
Excluding KAJITAKU

34

30

89.2%

Total

790

735

93.0%

(Reference)
Excluding KAJITAKU

775

726

93.6%
©2020 AEON Delight All Rights Reserved 6

Profit by Segment
Increase profits in 2 businesses. Construction work: improved profitability by expanding theprovision of high value-added services.
Security services: improved profitability by optimizing unit prices and systemization of entrance/exit
management and operations for closing stores.
(100 million yen)

FY2/20 1Q

FY2/21 1Q

Percentage change

14.3

12.5

87.7%

Security services

7.3

7.6

104.6%

Cleaning services

17.2

16.4

95.5%

Construction work

10.9

11.3

104.1%

Materials/supplies
sourcing services

7.1

6.1

86.1%

Vending machineservices

2.5

▲0.1

-

Support services

▲1.2

0.0

-

(Reference)
Excluding KAJITAKU

3.8

1.5

39.6%

58.2

54.1

93.0%

63.3

55.6

87.8%

Facilities management

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

Consolidated Balance Sheet(100 million yen)

AssetsFY2/20FY2/21
1Q

Difference

Current assets

1,123

1,072

▲50

Tangible fixed
assets96

101

5Intangible
fixed assets

71

68

▲3

FY2/20FY2/21
1Q

Difference

Current
liabilities

488

449

▲39

Fixed
liabilities

67

66

▲0

556

515

▲40

789

796

7

Liabilities andnet assets

Total
liabilities

76

74

▲2

Shareholder’sequityFixed assets

245

245

▲0

Total net assets

812

802

▲10

Total assets

1,369

1,318

▲51

Total liabilities
and net assets

1,369

1,318

▲51

Investments,
etc.

©2020 AEON Delight All Rights Reserved 8

Major Initiatives in FY2/21 1Q ① Began Constructing a New Normal for FM
Changes in people's lifestyles and working styles due to the impact of COVID-19
In facilities,
 Infection control measures are common at various facilities
 Changes in the facilities’ functions required through the penetration of teleworking in
offices and the promotion of online services in educational institutions.

Formed a project team to raise awareness and speed for business model
reform, which we have been working on since the beginning of the year, andstarted building the new normal for the facility management (FM) service.
Initiatives to Build a New Normal
 Establishment of sanitation methods based on our hygiene control service
 Establishment of a contactless store environment
 Energy conservation and improvement of ventilation and air conditioning through air
conditioning management using open network systems (building automation), etc.
©2020 AEON Delight All Rights Reserved

9Major Initiatives in FY2/21 1Q ② Response to COVID-19 Infections<Safety and Security>

Implemented a variety of epidemic prevention measures from the standpoint of customer
crisis management while ensuring the safety and health of employees

Efforts to protect our employees● Managing the physical condition of all our employees including our partner companies - and taking measures
to prevent infection of COVID-19.
● Promoting staggered working hours andtelecommuting.

Response for customers (managed properties)● Implementing preventative cleaning with alcohol atcommercial facilities and offices.

 Preventative cleaning with alcohol● Taking a prompt and appropriate response incooperation with partner companies who haveexpertise in this area in facilities where it has been
confirmed there are those who have tested positive
for the new coronavirus.

● Stable supply of epidemic prevention materials
such as droplet infection prevention sheets,
professional masks, gloves, and alcohol.
©2020 AEON Delight All Rights Reserved 10

Major Initiatives in FY2/21 1Q ③Accelerate 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 Service 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 partner companies©2020 AEON Delight All Rights Reserved

11

Major Initiatives in FY2/21 1Q ④ Adopted for the VPP Construction Demonstration Project<Environment>

Adopted in METI's VPP construction demonstration project *1
A control method for power supply and demand adjustment in Aeon Mall Kobe Kita was verified

 Participation in a consortium led by Kansai Electric Power Co., Inc.
 In collaboration with AEON MALL Co., Ltd., we examined how to control the power
supply and demand adjustment power of chilled and hot water pumps and air
conditioners in Aeon Mall Kobe Kita

Built power supply and demand adjustment capabilities within the Aeon Group in
anticipation of the creation of VPP*2 for the spread of renewable energy and thelaunch of the "Supply and Demand Adjustment Market*3" in FY2021*1 Ministry of Economy, Trade and Industry, Agency for Natural Resources and Energy's co-creation initiative"Subsidy for the demonstration project to construct a virtual power plant using energy resources on the user side in FY2020"*2, 3 VPP (virtual power plants), and supply-demand coordination
Please refer to Attached Material p. 3, 4 of "1Q Report for the Fiscal Year Ending February 2021" dated July 8, 2020.

©2020 AEON Delight All Rights Reserved

12

Major Initiatives in FY2/21 1Q ⑥ Business Expansion in Asia
In overseas business, sales were 108.9% YoY, operating income was 111.9% YoY(*)
Overseas Business: Net Sales / Operating Income (100 million yen)
（Net sales)
China

Malaysia

Vietnam（Operating
income）

Indonesia

60

6
48

44
40

3.6

4

3.2

20

2

0

0
Net sales

Operating income

FY2/20 1Q* Figures are simple totals of results of operating companies.

Net sales

Operating income

FY2/21 1Q©2020 AEON Delight All Rights Reserved

13

Contents

1

Financial Report for 1Q of FY2/21

2

Issues to be Addressed and Measures (Progress and Future Initiatives)

3

Other Initiatives©2020 AEON Delight All Rights Reserved 14

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 Six Months Ended August 31,
2019 (p. 22-25)" dated October 9, 2019.
©2020 AEON Delight All Rights Reserved 15

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/Actia)
Operating loss (estimation):
500 million yen

Operatingincome:16 billion yen

KAJITAKU
Operating loss:
1.2 billion yen

100

Accumulated
operating income:1.3 billion yen

Operating income
budget:16.5 billion yen

Impact of COVID-19:
1.5 billion yen

Implementation of measures
to address the issues
to be addressed60

FY2/20FY2/21©2020 AEON Delight All Rights Reserved 16

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
thisDeterioration in cleaning
profitability and a delay inmeasures against thisInsufficient building
construction work contracting① Measures ② Progress ③ Future Initiatives① Improve low-profit properties and reforming business processes② Local effects confirmed, but failed to keep pace with increase in outsourcing
costs for existing operations, resulting in improvement in profitability of theentire business③ Form the "Business Model Reform Project" to accelerate business process
reform

① 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 a sitebasis, but profitability declined at subsidiaries due to discontinued operations atcommercial facilities and other factors.
③ Improve productivity, including at subsidiaries and partner companies, by rollingout best practices and expanding the introduction of cleaning robots① Expansion of renovation contracts② There were some construction delays due to COVID-19③ Continue to expand orders for large-scale projects by participating from thedesign stage, and steadily capture orders for small-scale projects throughcooperation with consolidated subsidiaries and partner companies.

©2020 AEON Delight All Rights Reserved

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

Issues to be Addressed①② Progress③ Future①Measures
Measures,② Progress,
and Initiatives③

Future Initiatives
Deterioration in materialrelated profitability

Impact of the Kajitaku casegreater than expected① 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 (Actia)
Promoting growth by developing products adapted to new lifestyles
Store support business (KSJ)
Prompt implementation of reorganization procedures©2020 AEON Delight All Rights Reserved

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

Issues to be Addressed

Progress

Expand market share
Not started in 1Q due to the impact of COVID-19.
We will review target indicators and measuresin light of changes in the environment caused by
COVID-19.

Increase productivity©2020 AEON Delight All Rights Reserved 19

Contents

1

Financial Report for 1Q of FY2/21

2

Issues to be Addressed and Measures (Progress and Future Initiatives)

3

Other Initiatives©2020 AEON Delight All Rights Reserved20Restructuring and consolidation of head office functions
Formed the “Head Office Relocation PT” to streamline head office

Reorganize our head office in this fiscal year and consolidated it into a new intelligent office● Restructure the head office functions in Tokyo, Osaka, and Makuhari⇒ Accelerate decision-making● Build an Intelligent Offices utilizing AI and IoT⇒ To be a base for promoting our business● Promote non-contact and digitization with continuing new ways ofworking, such as teleworking and staggered commuting⇒ Efficiency businesses while preventing infections

Toward a head office that realizes “Environmental Value Creation”©2020 AEON Delight All Rights Reserved

21

Improving Capital Productivity: Organizational restructuring within the Group
Improve capital productivity by promoting organizational restructuring within the Group
toward achieving the Aeon Delight Vision 2025

■ May, 2020
Made A.G. Service Co., Ltd. a wholly owned subsidiary
which specializes in facility management and construction of small chain stores Prompt and flexible decision-making
 Clarifying roles and functions for the formation of the AEON Delight Economic Zone
■ Jun. 2020
As part of the reorganization procedures for the former KAJITAKU's store support
business (now KJS Corporation) in connection with the problem of inappropriate
accounting, the Company transferred the certification photo machine business.**Transferred KJS's certification photo machine business to a newly established business through a corporate split(incorporation-type split), and then transferred all shares of the newly established company to another company.

©2020 AEON Delight All Rights Reserved22

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 (July 8, 2020)
These forecasts have been prepared and are subject to change due to various factors going forward.