Financial Results for the Fiscal Year Ended February 28, 2014
Announcement of the Three-Year Medium-Term Management Plan

Ippei Nakayama, President and CEO
April 9, 2014©2014 Aeon Delight All Rights Reserved

Contents

1 Financial Report for the Fiscal Year Ended February 28, 2014
2 Medium-Term Management Plan (FY2/15 – FY2/17)

3 Initiatives for the Fiscal Year Ended February 28, 2015

4 Reference Materials©2014 Aeon Delight All Rights Reserved

1

Contents

1 Financial Report for the Fiscal Year Ended February 28, 2014
2 Medium-Term Management Plan (FY2/15 – FY2/17)

3 Initiatives for the Fiscal Year Ended February 28, 2015

4 Reference Materials©2014 Aeon Delight All Rights Reserved

2

Business Results
Sales increased for four consecutive years andprofit increased for 10 consecutive years (record net profit)
Sales

Operating income（ 100 million yen ）（100 million yen）

3000

300

■Sales■Operating income

2,488

2500

2,572
250

2,197
2000

1,709
1,375

1500
1000

1,456

1,402

138

139

151

99

100

100

83
547

25

623

150

120

1,111

500

200

56
50

29

0

0
2005.2 2006.2 2007.2 2008.2 2009.2 2010.2 2011.2 2012.2 2013.2 2014.2©2014 Aeon Delight All Rights Reserved3

FY2/14 Financial Summary
1.
2.
3.

Net sales: Up 103.4% YoY
Gross profit: Improved 1.0 percentage point YoY (13.1%)
Operating margin: Improved 0.3 percentage point YoY (5.9%)
100 million yen

FY 2/14
Pct. to net
sales（％）

Actual

FY 2/13
YOY
（％）

YoY
difference

Pct. to net
sales（％）

Actual

2,572

100.0

103.4

+83

2,488

100.0

Operating income

151

5.9

108.7

+12

139

5.6

Ordinary income

150

5.9

108.6

＋11

138

5.6

81

3.2

108.7

+6

75

3.0

Sales

Net income©2014 Aeon Delight All Rights Reserved

4Assessment by Segment (Net Sales)
Increased YoY in the entire business segments except for Construction work
Substantial growth in Support Services due to contribution of group companies resulting in 125.2% YoY
100 million yen

FY 2/14 Actual

Sales

Pct. to net
sales（％）

FY 2/13 Actual
YOY
（％）

Sales

Pct. to net
sales（％）

434
423

16.9

103.3

420

16.9

16.5

104.4

405

16.3

13.3

107.7

318

12.8

Construction work

342
456

17.7

86.0

530

21.3

Materials/supplies
sourcing services

445

17.3

113.4

392

15.8

Vending machineservices

333

13.0

106.8

312

12.5

Support services

135

5.3

125.2

108

4.3

Facilities management
Cleaning services
Security services©2014 Aeon Delight All Rights Reserved5Consolidated Balance Sheet
100 million yen

Feb.282013

Feb.282014

Feb.282013

Difference

Feb.282014

Difference

Current assets

793

903

110

Current liabilities

349

393

43

Fixed assets

213

217

4

Fixed liabilities

11

15

3

Tangible fixed
assets37

42

4
Total liabilities

361

408

46

Intangible
fixed assets

123

116

△6

Investments,
etc.

52

58

5

Total net assets

645

713

67

Total assets

1,006

1,121

114

Total liabilities andnet assets

1,006

1,121

114

©2014 Aeon Delight All Rights Reserved

6Consolidated Cash Flow Statement
Major factors for increase/decrease (billion yen)

30,000【Operating cash flows】

20,00010,000

Income before income taxes

Investing CF

Decrease (increase) in accounts receivable

7.8billion yen

Increase (decrease) in accounts payable

2.0billion yen(100 million yen)

-10,000-20,000

14.5billion yen

Operating CF
Financing CF

021.3billion yen【Investing cash flows】 △16.6billion yen

FY2/13

Payments for affiliate consumption
entrusted funds

FY2/14

100 million yen

FY2/13
total

FY2/14
total

Proceeds from repayments for affiliate
consumption entrusted funds

198billion yen

Difference【Financing cash flows】 △2.4billion yen

Cash flows from operating activities

△43

213

170

Cash flows from investing activities

70

△166

△95

Cash flows from financing activities

△22

△24

△47

96

120

23

Cash and cash equivalents at
end of the year

△212.4billion yen

Dividend payment△2.4billion yen©2014 Aeon Delight All Rights Reserved

7

Overview of FY2/14(1) Structural reforms created a stronger profit structure
Enacted measures to generate earnings from group companies and improve profitability of existing businesses(2) Increased the number of service locations in Japan and overseas(Japan) New outsourcing agreements with large stadiums, government agencies, hotels, hospitals and other facilities
Started providing services to large AEON Group facilities and new AEON Group companies(China) Expanded services to 136 companies for Japanese and foreign-affiliated companies,
Chinese companies and others(ASEAN)
Malaysia: Providing services to 45 Japanese and foreign-affiliated companies
Vietnam: Providing services to 23 Japanese and foreign-affiliated companies(3) Improved bases in two major business domains for achieving the goals of the next three-year plan
・Sanitation and Cleaning Services field
More actions concerning the AEON model for the cleaning business(uniform quality of services by using the optimal amount of labor)
Strengthened development strategy operations by developing an exclusive floor coating material (AD Coat),and increasing sales of value-added products・Facility Management + Energy
Increased activities aimed at conducting Facilities Management-integrated ESCO BusinessTo target opportunities in the renewable energy maintenance market, considering creating a recharging businessmodel by establishing a special-purpose company (SPC) with other companies©2014 Aeon Delight All Rights Reserved

8

Contents

1 Financial Report for the Fiscal Year Ended February 28, 2014
2 Medium-Term Management Plan (FY2/15 – FY2/17)

3 Initiatives for the Fiscal Year Ended February 28, 2015

4 Reference Materials©2014 Aeon Delight All Rights Reserved

9Looking Back on the Previous Medium-Term Management Plan
(FY2/12 – FY2/14)
Expanded the scale of operation by enhancing service menu and building a new business

Establish operating bases in China and ASEAN countries

Wuhan Xiaozhu Comprehensive Facility Management Service Co., Ltd. became a subsidiary

AEON Compass Co., Ltd. became a subsidiary
General Services, Inc. became a subsidiary
Established A-LIFE SUPPORT Co., Ltd.

Japan

Established AEON DELIGHT (HANGZHOU) SERVICE OUTSOURCING CO., LTD.
Aeon Delight Sufang (Suzhou) Comprehensive Facility Management
Service Co., Ltd. became a subsidiary
Established AEON DELIGHT MALAYSIA/AEON DELIGHT VIETNAM

KAJITAKU Co., Ltd. became a subsidiary
A to Z Service Co., Ltd. became a subsidiary
Established FMS Solution Co., Ltd.

(Evaluations)－ Promising companies in Japan became
subsidiaries－ Established operating base in Asia

2013

2012
Overseas

2011(Issues)-Increase in selling, general and administrative expenses due
to expansion of scale of operation-Decentralization of management resources(develop menu in-house)©2014 Aeon Delight All Rights Reserved

10What the AEON Delight Group is Aiming at
Management
Philosophy

AEON
Delight

AEON Delight will continue to create“environmental value” of customers
and regional communities

Safety

Comf
ort

Human
environment

2016 Group Vision:

Becoming a facilities management company that can provide the best, most pleasantand highest cost-performance service to the facilities of our fast-growing corporate
customers in Asia.
Core business

FMS ConsultingBM

BPO

BTM · MICE

Domestic Housework Agency
Services

Internal Delivery Services

Catering

5yen Copy Machine DPE

Vending Machines

Materials/Supplies
Sourcing

IT

Technical Training · Staff
Education/Training

Human Resources
Outplacement

General Administration

Facilities
Managemen

Cleaning

Security

Construction Management

ESCO Energy-saving
ProposalsElimination of Bacteria · Sterilization ·Disinfection · Deodorization

Solar MaintenanceElectric Power Generation
Business

LED · Organic EL

Smart Community

Concierge Services

Solving FM problems for clients recording business growth in Asia
Establishing beautiful, pleasant and clean
environments in their facilities(Sanitation and Cleaning Business)

Implementing energy-saving measures within theirfacilities(Facilities Management-integrated ESCO Business)

Towards becoming a leading company that can realize total cost reduction solutions for its customers©2014 Aeon Delight All Rights Reserved

11Numerical Goal of Medium-Term Management Plan
Consolidated net sales, operating income and net income plans

300

4,000
Over3,300

3,000

2,572

2,700

200

2,000

100

1,000
0
2014.2

2015.2E

2016.2E

2017.2E（100 milliom yen）

Operating income151

Net income
Over210

160

81.6

86

2014.2

2015.2E

Over11002016.2E

2017.2E

FY2/17 major numerical goals
Consolidated net sales

Over¥330billion

Consolidated operating income(operating margin)

Over¥21billion

Operating margin*Major indicators of net sales(ratio outside the AEON Group 35%, overseas ratio 10%)

Over6.4%©2014 Aeon Delight All Rights Reserved

12Framework of Medium-Term Management Plan
1. Establishment of comprehensive FMS (establishment of competitive advantage)(1) Strengthening of Sanitation and Cleaning Services(2) Strengthening of Energy Solution business

Competitive
ness

Base
2. Development of Asian market(1) Establishment of a federal management structure in China(2) Establishment of comprehensive FMS menu in ASEAN countries

Asia

3. Building of organization base(1) Organizational restructuring aimed at flexible sales activities and businessdevelopment(2) Human resources development aimed at pursuing growth and service quality(3) IT investment to accelerate business growth and achieve a small head office©2014 Aeon Delight All Rights Reserved

13Faster Growth in Asia by using Experience and Know-how in Japan
2014

Comprehensive
FMS

Establish competitive
advantages in business

Sanitation
andCleaning（ 3 years ）

2016

2020

Capture new business by using
sales and business strengths

Establish standards andstandardized processes

Start energy management at
the AEON Group
EnergySolutions（ 4 years ）Example) The Asian market*Refrigerator/freezer case market: ¥600 billion*Elevator market: 350,000 units*AEON investment: ¥400 billion

Start energy management at
hospitals

Build afoundation

IT investments andemployee training

Asia

AEON Group’s growth in Asia
Asia regional strategies andspecialized businesses©2014 Aeon Delight All Rights Reserved14

1 - (1) Strengthening of Sanitation and Cleaning Services
1) Development of new domain
2) Establishment of standardized
cleaning model3) Expansion of market share

1) Sanitation/
Hospitals
cleaning/nursing homefacilities
2) Standardized

Area
strategy

model
Cleaning services sales plan

2000

Largest market share in Japan + Highest quality in cleaning

More than¥ 180 billion

1500
1000

Aim for a 10% increasein gross profit ratio

500
0

2013

2016

2020

Autonomous robot floor cleaning machine©2014 Aeon Delight All Rights Reserved15

1 - (1) Strengthening of Sanitation and Cleaning Services

Needs of large hospital groups in Japan with nationwide operations➢ Hygiene and the environmental services, safety andconfidence, consistent service quality, cost cutting, and otheractions＝ Matching with the value of comprehensive FMS provided

・ Develop new services by using alliances with the healthcare
operations of European manufacturers and large trading
companies in Japan➢ Offer comprehensive FMS that includes “sanitation andcleaning” as well as energy management, the supply ofmaterials, vending machine operations and other services©2014 Aeon Delight All Rights Reserved16

1 – (2) Strengthening of Energy Solution Business
1) Establish the company’s own Facilities ManagementIntegrated ESCO business ※ EnergyServiceCompany
2) Total management of the entire AEON Group’s energy

Facilities
ManagementIntegrated ESCO
model

Expand to
Asia

Make energy-saving “best mix proposals” to customers

Reduction ofenergy cost

Reduction ofenergyconsumption

Reduction ofenergycost■Replacement of facility‥ Heat source/ESCO
scheme, etc.
■Automatic control‥ ADBEMS/various controls, etc.
■Operation‥ Detailed operation due to facilities
management, etc.
■Power substitute purchase‥ Alliances with trading
companies, etc.

Promotion of technology development・・・Low-voltage regulation, gold control, Freon gas control, elevators, etc.

Also intend to establish a research institute©2014 Aeon Delight All Rights Reserved17

２ Development of Asian market(1) Establishment of a federal management structure in China
Further promotion of regional joint strategy with strong local companies(Prepare to expand into Beijing, Tianjin, Jiangsu, Hubei, Guangdong andShandong)
Establish a federal management structure to accelerate growth and strengthen governance
Implementation of differentiation strategy due to specialization of ESCO business and Elevatorbusiness(2) Establishment of comprehensive FMS menu in ASEAN countries
Aim to have the largest domestic market share in three businesses– cleaning, vending machine and energy conservation in Malaysia
Enhance service menu and strengthen sales activities for Japaneseand foreign-affiliated companies in Vietnam
Plan to expand into Cambodia, Singapore and Indonesia©2014 Aeon Delight All Rights Reserved18

3 Build a Sound Organizational Base
1. Reorganize operations to enable speedy business operations and solution-based sales
activities
Consolidate and realign the organization to build “Sanitation and Cleaning
Services” and “Energy Solutions Business”
Build separate sales frameworks for each customer and business category
Reinforce corporate sales activities

2. Actions to train employees in order to upgrade the quality of services
Introduce the AEON Delight certification program
Train people in other Asian countries to become managers by using the“AEON Delight Academy Nagahama”➢ Upgrade the education infrastructure with the goal of establishing schools
in many Asian countries.
Training for management ofVietnam

3. IT investments to speed up growth and downsize the head office
Make IT investments of about ¥3 billion over three years to➢ Develop and start using tools and systems that can accelerate growth that isbacked by “Sanitation and Cleaning” and “Energy Solution”➢ Establish a management structure that uses resources efficiently (a small head office)©2014 Aeon Delight All Rights Reserved

19

Contents

1 Financial Report for the Fiscal Year Ended February 28, 2014
2 Medium-Term Management Plan (FY2/15 – FY2/17)

3 Initiatives for the Fiscal Year Ended February 28, 2015

4 Reference Materials©2014 Aeon Delight All Rights Reserved20

FY2/15 Basic Policy
1. Strengthen sales activities in Japan and Asia
■ Extensive use of solution-based sales●Integrate sales resources in Japan and Asia to closely monitor sales activities on a customer-bycustomer and facility-by-facility basis. (Use IT investments to build and operate a database.)●Build a sales structure on a customer-by-customer and facility-by-facility basis
Establish new department for sales targeting hospitals and nursing homes●Deepen relationships with current customers

Use the “AD-MAP” IT tool to manage and share
information about visits to individual customers©2014 Aeon Delight All Rights Reserved21

FY2/15 Basic Policy
2. Establishment of Sanitation and Cleaning Services and Facilities
Management-Integrated ESCO business■ Sanitation and Cleaning●Improve profitability by using a standardized model for cleaning●Build a sanitation and cleaning model for hospitals and nursing homes■ Facilities Management-Integrated ESCO business●Establish a model for cutting the cost of operating facilities, such as by offering ideas for energy
conservation and using fewer people for equipment management due to BEMS and advanced
remote control technologies.

アMinimizethe cost of equipment across the entire life cycle©2014 Aeon Delight All Rights Reserved

22

Business Forecast for the FY February 2015
100 million yen

Full-year forecast for FY2/15
Pct. to net
sales (%)

AmountNet saleYoY (%)

2,700 100.0 105.0

FY2/14 actual
Amount（Actual）

Pct. to net
sales (%)

2,572

100.0

Operating income

160

5.9

105.9

151

5.9

Ordinary income

160

5.9

106.0

150

5.9

86

3.1

105.4

81

3.2

Net income©2014 Aeon Delight All Rights Reserved

23

Shareholder Return
Aim for 10 consecutive years of increased dividends since FY2/06

Dividend

FY2/04

FY2/05

FY2/06

FY2/07

FY2/08

FY2/09FY2/10FY2/11

FY2/12

FY2/13

FY2/14

￥8.0

￥9.0

￥15.0

￥17.5

￥22.0

￥27.0

￥39.0

￥40.0

￥46.0

￥48.0

￥50.0

Dividend forecast

Commemorative dividend

Dividend

Year-end

25

5

8

9

FY2/04

FY2/0515

17.5

FY2/06

FY2/0722
FY2/0827

FY2/09

34

40

46

48

Interim25

FY2/10FY2/11

FY2/12

FY2/13

FY2/14*On December 1, 2007, the company conducted a two-for-one stock split. The dividend amount assumes that the stock split was conducted at the beginning of FY2/05.
*A commemorative dividend of 5.00 yen is included in the year-end dividend for FY2/11.

©2014 Aeon Delight All Rights Reserved24Thank you very much for your attention.
If you have any questions or comments, please contact us below.
■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 one million yen have been rounded down
◇ Percentages have been rounded off to one decimal place

IR Contact

AEON DELIGHT CO., LTD.
(Stock code: 9787)

Corporate Communication Dept.
Susumu Takahashi Corporate Communication Dept.
TEL ０６－６２６０－５６３２
FAX ０６－６２６０－５６５３
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 9, 2014). The business
forecasts may be revised due to various factors that may arise in the future.

©2014 Aeon Delight All Rights Reserved

25

Contents

1 Financial Report for the Fiscal Year Ended February 28, 2014
2 Medium-Term Management Plan (FY2/15 – FY2/17)

3 Initiatives for the Fiscal Year Ended February 28, 2015

4 Reference Materials©2014 Aeon Delight All Rights Reserved

26

The Fourth Management Base What Is Facility Management (FM)Facility management is “management for companies and organizations tocomprehensively plan, manage and use facilities and the environment for organizational
activities” *JFMA’s definition

Facility (building) performance

Improve facility value/strengthen
competitiveness through energy
conservation, etc.

Function recovery
throughrenovation

Long life

Improvement infacility value
Continuing facility management

Life cycle of ordinary
facilities

Scrap
&
build

General life-span

Elapsed years

Ordinary
renovation/update

Life Cycle Cost of Buildings■ What is the life cycle cost of a building?
Initial cost (cost of construction) + Running cost
(operational cost, repairs/replacement costs, general administrative cost, etc.)
Example:For an ordinary office building with a useful life of 50 years
The running cost is four to five times the initial cost.

Therefore, the size of the market for AEON Delight’s services is 75% of the life cycle cost.

Initial cost
Running cost(not easily visible)

This is just the tipof the iceberg!

Cost ofconstruction
Repairs/replace
ment costs

Maintenance cost

Operational
cost
Generaladministrativecost

The size of AEON Delight’s
market is proportional to thenumber of buildings(Positive factors for construction activity)
Japan – Tokyo Olympics
China – Strong growth in construction
activity
ASEAN – Economic growthGrowth of the Potential Market for Comprehensive FMS
The Building Maintenance Market

The Comprehensive FMS Market Category is Growing

Building maintenance market is ¥3.5 trillion
The market in Japan is shrinking

Customer needs: Cost cutting; hygiene and environmental
services; safety, confidence and comfort
The overall comprehensive FMS market is ¥20 trillion*AEON Delight estimate

Preparations are under way for an international standard (ISO 18480) for
facility management, with the goal of 2016 enactment. This will makepeople more aware of the importance of facility management services.

[Sales of Major Building Management Firms in Japan][Global Growth Rate of Sales at Facility Management Companies]
180.0%

Steady growth at
AEON Delight due tocomprehensive FMS

170.0%AEON Delight160.0%ＩＳＳ
ＳＯＤＥＸＯ

150.0%

ＡＲＡＭＡＲＫ

140.0%
130.0%
120.0%

million yen

110.0%
100.0%
90.0%
NipponKanzaiAEON Delight

Kajima Tatemono Sogo
Kanri (private)

SAYCO Building
Management (private)

Biken
TechnoKyoritsu
MaintenanceTokyo Biso Kogyo(private)

Taisay Building Management(private)

Source: Securities Reports and Toyo Keizai
Note: FY2/10 figures for Tokyo Biso Kogyo because no results have been disclosed since FY2/11

80.0%
FY2008FY2009FY2010FY2011FY2012

Source: Sales growth rates between 2008 and 2012 based on data in Securities Reports and annual reports

Income Statement
Million yen

FY2/04

FY2/05

ActualYoY (%)Net sales

54,665

98.1

OperatingincomeOrdinary
income2,504

Net income

Actual

FY2/06

FY2/07

FY2/08YoY (%)

ActualYoY (%)

ActualYoY (%)

ActualYoY (%)

62,323114.0

111,170

178.4

137,519123.7

145,690

105.9

148.5

2,949

117.8

5,576

189.0

8,330

149.4

9,946

119.4

2,511

147.9

2,953

117.6

5,485

185.7

8,186

149.2

9,812

119.9

860

580.6

1,324

153.8

2,998

226.4

4,379

146.1

4,876

111.3

Million yen

FY2/09Actual

FY2/10YoY (%)

FY2/11

FY2/12

FY2/13

ActualYoY (%)

ActualYoY (%)

ActualYoY (%)

ActualYoY(%)

Net sales

140,29996.3

170,905

121.8

219,797

128.6

248,876113.2

257,243

103.4

OperatingincomeOrdinary
income

9,970

100.2

12,031

120.7

13,762

114.4

13,901101.0

15,115

108.7

9,912

101.0

12,089122.0

13,784114.0

13,892100.8

15,092108.6

Net income

5,466

112.1

6,495

118.8

6,912

106.4

7,509

108.6

8,161

108.7

Major Shareholders and Shareholders by Type (%)
The ownership ratio corresponds to outstanding shares. Numbers of shares are rounded down to the nearest one thousand, ownership ratios are rounded to the second decimal place.

Rank

Shareholder

No. of shares owned(1,000 shares)

Ownership(%)

２３,２６１42.94

１

1AEON RETAIL CO., LTD.

２

AEON CO., LTD.

９,１０３

16.81

３

Japan Master Trust Bank, Ltd. (Trust Account)４

Northern Trust Co. (AVFC) RE 10PCT TREATY ACCOUT

５

Japan Trustee Services Bank, Ltd. (Trust Account 9)

６

AEON DELIGHT Business Partner Stock Ownership Association

７

AEON DELIGHT Employee Stock Ownership Association

１,４６７
９１４
９１３
８２７
６２２

2.71
1.69
1.69
1.53
1.15

８

BNP PARIBAS SEC SERVICES LUXEMBOURG/JASDEC/ABERDEEN GLOBAL CLIENT ASSETS

５９３

1.10

９

Japan Trustee Services Bank, Ltd. (Trust Account)

５１５
５１５

0.95
0.95

１０ Trust & Custody Services Bank, Ltd. (pension trust account)
Shareholders by type (%)
Financial
institutions
９.１９%

Individuals,
others
１０.８３%
Foreigncorporations
１３.６９%

Treasury
stock
３.０８%

The data is as of February 28, 2014
Securities
firms
０.１４%

Other
corporations
６３.０５%

Management Indicators
FY2/10FY2/11

FY2/12

FY2/13EPS¥１４２.５６¥１３１.８１¥１４３.１５¥１５５.５４ROE

１５.４７%

１２.５５％

１２.４６％

１２.３１％

ROA

９.７５%

７.７９％

７.７６％

７.６７％

Ratio of ordinary income to net sales

７.０７%

６.２７％

５.５８％

５.８７％

Ratio of net income to net sales

３.８０%

３.１５％

３.０２％

３.１７％

２.５６times

２.４８times

２.５７times

２.４２times

６２.３２%

６１.９２％

６２.６４％

６２.０３％Net assets per share¥１,００５.６２¥１,０９５.５９¥１,２０２.４２¥１３２４.８４

PER

１０.５７times

１１.６２times

１１.４６times

１３.１２times

PBR

１.５０times

１.４０times

１.３６times

１.５４times¥１,５０７¥１,５３２¥１,６４１¥２,０４０Total assets turnover
Shareholders’ equity ratio(Ref.) Share price at year end* The number is rounded to the third decimal place.