Aeon Delight / 9787
COVERAGE INITIATED ON:

2013.06.06

LAST UPDATE:

2020.04.27

Shared Research Inc. has produced this report by request from the company discussed in the report. The aim is toprovide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide an accurate,
objective, and neutral analysis. In order to highlight any biases, we clearly attribute our data and findings. We will
always present opinions from company management as such. Our views are ours where stated. We do not try toconvince or influence, only inform. We appreciate your suggestions and feedback. Write to us at
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INDEX
How to read a Shared Research report: This report begins with the trends and outlook section, which discusses the company’s most recent
earnings. First-time readers should start at the business section later in the report.

Executive summary ----------------------------------------------------------------------------------------------------------------------------------- 3
Key financial indicators ------------------------------------------------------------------------------------------------------------------------------ 4
Recent updates ---------------------------------------------------------------------------------------------------------------------------------------- 5
Highlights ------------------------------------------------------------------------------------------------------------------------------------------------------------5
Trends and outlook ----------------------------------------------------------------------------------------------------------------------------------- 6
Quarterly trends and results -----------------------------------------------------------------------------------------------------------------------------------6
FY02/20 company forecasts (initial forecast) ----------------------------------------------------------------------------------------------------------- 12
Medium-term business plan (FY02/18–FY02/20) ----------------------------------------------------------------------------------------------------- 19
Aeon Delight Vision 2025 ------------------------------------------------------------------------------------------------------------------------------------ 21
Business ------------------------------------------------------------------------------------------------------------------------------------------------ 26
Business description -------------------------------------------------------------------------------------------------------------------------------------------- 26
Business overview ----------------------------------------------------------------------------------------------------------------------------------------------- 27
Strengths and weaknesses------------------------------------------------------------------------------------------------------------------------------------ 32
Market and value chain ---------------------------------------------------------------------------------------------------------------------------------------- 33
Financial Statements ------------------------------------------------------------------------------------------------------------------------------- 37
Income statement ----------------------------------------------------------------------------------------------------------------------------------------------- 37
Balance sheet ----------------------------------------------------------------------------------------------------------------------------------------------------- 38
Statement of cash flows --------------------------------------------------------------------------------------------------------------------------------------- 40
ROE and dividends---------------------------------------------------------------------------------------------------------------------------------------------- 41
Other information ---------------------------------------------------------------------------------------------------------------------------------- 43
History -------------------------------------------------------------------------------------------------------------------------------------------------------------- 43
Major shareholders --------------------------------------------------------------------------------------------------------------------------------------------- 43
Top management ----------------------------------------------------------------------------------------------------------------------------------------------- 44
Employees --------------------------------------------------------------------------------------------------------------------------------------------------------- 44
Investor relations ------------------------------------------------------------------------------------------------------------------------------------------------ 44
By the way --------------------------------------------------------------------------------------------------------------------------------------------------------- 45
Historical financial statements and news ---------------------------------------------------------------------------------------------------- 47
Historical financial statements ------------------------------------------------------------------------------------------------------------------------------- 47
News & topics ---------------------------------------------------------------------------------------------------------------------------------------------------- 62
Company profile ------------------------------------------------------------------------------------------------------------------------------------- 64

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Aeon Delight / 9787
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Executive summary◤ Aeon Delight mainly operates facilities management services (FMS) for large commercial facilities. Segments are: Facilities

Management, Security Services, Cleaning Services, Construction Work, Materials and Supplies Sourcing Services, Vending
Machine Services, and Support Services. The company also provides services for integrated facilities management andancillary work that is non-core for the customer. This streamlines overall facility costs and generates rationalization benefits forthe customer. In recent years the company’s growth strategy has aimed at expanding its FMS services throughout Asia byoffering solutions in the areas of safety and security, labor shortages, and the environment. Aeon Delight is the largest
facilities management company in Japan. Slightly over 60% of its sales are to companies in the Aeon group to which it
belongs. Overseas sales comprise about 6% of the total.
◤ Breakdown of sales by segment (FY02/20): Cleaning Services 20.2%, Facilities Management 18.9%, Materials and Supplies

Sourcing Services 16.6%, Security Services 14.4%, Construction Work 13.6%, Vending Machine Services 10.2%, and Support
Services/other 6.1%. Customers from outside the Aeon group include commercial facilities, office buildings and offices, hotels
and accommodation facilities, medical and welfare facilities, educational facilities, factories and workshops, warehouses anddistribution centers, public facilities, and events. The company operates a recurring revenue business model. Contracts
typically last for one year and are usually renewed, maintaining low cancellation rates.
◤ Most of the company’s overseas operations are in China and ASEAN. The key Chinese subsidiaries are Aeon Delight Jiangsu

Comprehensive Facility Management Service and Wuhan Xiaozhu Property Management. The strategy is to provide quality
facilities management in the Yangtze River Delta and surrounding regions to boost the Aeon Delight brand profile. In ASEAN,
the company plans to use its major Indonesian cleaning company PT Sinar Jernih Sarana (SJS, acquired in December 2018) asa launch-pad to expand its business.
◤ In late March 2019, signs of accounting irregularities emerged at subsidiary Kajitaku. Aeon Delight established a special

investigation committee comprised of independent outside experts, which subsequently confirmed the findings of fraudulent
accounting. In response, the company restated prior year earnings (a total of JPY16.3bn over FY02/14–FY0219) and put inplace measures to prevent a recurrence in the future.

Trends and outlook◤ For FY02/20, Aeon Delight reported full-year consolidated sales of JPY308.6bn (+1.9% YoY), operating profit of JPY16.0bn(+22.8% YoY), and net income of JPY9.3bn (+45.7% YoY). The jump in earnings reflected a combination of growth at the
Security Services and Cleaning Services segments, margin improvement at the Vending Machine Services segment, andsmaller losses at subsidiary Kajitaku (which had previously been found to have engaged in irregular accounting practices).
◤ For FY02/21, the company forecasts full-year consolidated sales of JPY315.0bn (+2.1% YoY), operating profit of JPY16.5bn(+3.1% YoY), net income of JPY10.0bn (+7.0% YoY), and EPS of JPY200.13. The forecast assumes the impact of thecoronavirus pandemic will extend through 1H FY02/21 (depressing operating profit by JPY1.5bn), but the company is still
expecting positive growth in earnings for the year as it looks to make up for the delays in the implementation of productivity
improvement measures and expand its overseas businesses. The company’s dividend forecast for FY02/21 calls for an annual
dividend of JPY70.0 per share versus JPY65.0 per share in FY02/20, the planned hike reflecting an increase in its targeted
dividend payout ratio from 30% to 35%.
◤ In October 2018, the company released its Aeon Delight Vision 2025 medium-term plan. This aims to make Aeon Delight acompany that creates environmental value and contributes to solving social issues, with a three-pronged growth strategy in
Asia: safety and security, the labor shortage, and the environment. It targets sales of JPY525.0bn and operating profit of
JPY48.0bn in FY02/26.

Strengths and weaknesses
Shared Research believes the company’s strengths are 1) strong ties with the Aeon group, 2) industry leader in comprehensive
facilities management services, and 3) cash flow generating ability. Weaknesses include its 1) organic growth challenging, 2)
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overly dependent on the Aeon group, and 3) mature property management market (see Strengths and weaknesses section for
details).

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Aeon Delight / 9787
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Key financial indicators
Income statement(JPYmn)Sales
YoY
Gross profit
YoY
GPM
Operating profit
YoY
OPM
Recurring profit
YoY
RPM
Net income
YoY
Net margin
Per share data (JPY)
Shares issued (year-end; '000)
EPS
EPS (fully diluted)
Dividend per share
Book value per share
Balance sheet (JPYmn)
Cash and cash equivalents
Total current assets
Tangible fixed assets
Investments and other assets
Intangible fixed assets
Total assets
Accounts payable
Short-term debt
Total current liabilities
Long-term debt
Total fixed liabilities
Total liabilities
Total net assets
Cash flow statement (JPYmn)
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Financial ratios
Total interest-bearing debt
Net cash
ROA (RP-based)
ROE
Equity ratio

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20 FY02/21

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Est.

219,797 248,876 256,654 265,572 277,926 292,607 292,396 302,915 308,582 315,000

28.6%
28,631
19.4%
13.0%
13,762
14.4%
6.3%
13,784
14.0%
6.3%
6,912
6.4%
3.1%

13.2%
30,227
5.6%
12.1%
13,901
1.0%
5.6%
13,892
0.8%
5.6%
7,509
8.6%
3.0%

3.1%
33,24510.0%
13.0%
14,622
5.2%
5.7%
14,600
5.1%
5.7%
7,039
-6.3%
2.7%

3.5%
34,2903.1%
12.9%
15,3905.3%
5.8%
15,472
6.0%
5.8%
7,965
13.2%
3.0%

4.7%
34,836
1.6%
12.5%
14,556-5.4%
5.2%
14,534
-6.1%
5.2%
7,247
-9.0%
2.6%

5.3%
35,7362.6%
12.2%
14,139-2.9%
4.8%
14,263
-1.9%
4.9%
7,093
-2.1%
2.4%

-0.1%
34,871-2.4%
11.9%
12,909-8.7%
4.4%
13,381
-6.2%
4.6%
6,397
-9.8%
2.2%

3.6%
35,452
1.7%
11.7%
13,0300.9%
4.3%
13,362
-0.1%
4.4%
6,415
0.3%
2.1%

1.9%
4.0%
38,5708.8%
12.5%
16,001 16,500
22.8% 26.6%
5.2%
5.2%
15,949 16,500
19.4% 23.5%
5.2%
5.2%
9,348 10,000
45.7% 55.9%
3.0%
3.2%

54,170
131.8
131.5
40
1,096

54,170
143.2
142.7
46
1,202

54,170
134.2
133.8
48
1,303

54,170
151.7
151.3
50
1,400

54,170
138.0
137.6
52
1,471

54,170
135.0
134.6
55
1,559

54,170
121.7
121.3
61
1,637

54,170
122.9
122.6
63
1,466

54,170
187.2
186.9
65
1,579

9,707
72,486
3,773
4,276
12,27292,80923,72041
33,64315983
34,62658,182

10,014 12,565 15,580 20,386 31,717 39,536 44,233 62,355
79,323 89,914 103,634 104,190 111,098 118,311 108,771 112,362
3,796
4,258
4,361
7,061
9,064 10,041 10,161
9,671
5,257
5,829
6,268
8,176
8,904
8,512
7,578
7,698
12,321 11,008 10,320 10,006
8,802
7,813
8,103
7,185

200.1
70
-

100,699 111,010 124,584 129,434 137,870 144,678 134,614 136,917

24,544 21,876 24,934 28,457 25,114 25,820 25,967 23,388
10
5
271
225
394
252
34,955 39,309 46,639 45,834 47,051 49,060 51,408 48,864
5
293
15
11
1,195
1,556
2,387
3,925
6,214
6,474
7,667
6,767
36,151 40,865 49,026 49,760 53,266 55,535 59,075 55,631
64,547 70,145 75,558 79,674 84,604 89,143 75,539 81,286

9,639-10,051-2,722-4,3587,086-2,257

21,359-16,632-2,475

17,234-11,365-2,594

10,303-3,255-2,821

11,7032,233-2,40013,568 12,373-2,666 12,256-3,264 -19,686

7,371
13,838-3,392

56
36,971
15.5%
12.5%
61.9%

15
28,019
14.4%
12.5%
62.6%

5
44,980
13.8%
10.7%
61.6%

56,906
13.1%
11.2%
59.0%

57,748
11.4%
9.6%
59.7%

564
62,866
10.7%
8.9%
59.4%

225
71,311
9.5%
7.6%
59.5%

409
59,824
9.6%
8.1%
54.4%

263
62,092
11.7%
12.3%
57.6%

Source: Shared Research based on company data

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Aeon Delight / 9787
LAST UPDATE: 2020.04.27

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Recent updates
Highlights
On April 27, 2020, Shared Research updated the report following interviews with Aeon Delight Co., Ltd.

On April 10, 2020, the company announced earnings results for full-year FY02/20; see the results section for details.

For previous releases and developments, please refer to the News and topics section

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Trends and outlook
Quarterly trends and results
FY02/18

Cumulative(JPYmn)Sales

Q1
75,064Q2
150,738

FY02/19Q3
222,160Q4
292,396

Q1
76,370Q2
152,611

FY02/20Q3
226,744Q4
302,915Q1
79,048Q2
157,482

FY02/21Q3
232,643Q4
308,582

FY Est.
315,000
2.1%

YoY

-0.9%

-0.0%

0.3%

-0.1%

1.7%

1.2%

2.1%

3.6%

3.5%

3.2%

2.6%

1.9%

Gross profit

9,003

18,58527,22034,871

9,342

17,462

25,84035,452

9,632

19,76329,014

38,570

YoY
GPM

-1.7%
12.0%

3.3%
12.3%

0.2%
12.3%

-2.4%
11.9%

3.8%
12.2%

-6.0%
11.4%

-5.1%
11.4%

1.7%
11.7%

3.1%
12.2%

13.2%
12.5%

12.3%
12.5%

8.8%
12.5%

SG&A expenses

5,669

11,167

16,656

21,961

5,556

11,186

16,92722,421

5,832

11,16816,90922,569YoY
SG&A ratio

3.0%
7.6%

1.9%
7.4%

2.1%
7.5%

1.7%
7.5%

-2.0%
7.3%

0.2%
7.3%

1.6%
7.5%

2.1%
7.4%

5.0%
7.4%

-0.2%
7.1%

-0.1%
7.3%

0.7%
7.3%

Operating profit

3,334

7,418

10,563

12,909

3,785

6,275

8,913

13,030

3,800

8,594

12,10416,001

16,500

-8.8%
4.4%

5.4%
4.9%

-2.7%
4.8%

-8.7%
4.4%

13.5%
5.0%

-15.4%
4.1%-15.6%
3.9%

0.9%
4.3%

0.4%
4.8%

37.0%
5.5%

35.8%
5.2%

22.8%
5.2%

3.1%
5.2%

3,367

7,490

10,965

13,381

3,816

6,349

9,307

13,362

3,822

8,655

12,18915,94916,500

-7.8%
4.5%

6.5%
5.0%

0.8%
4.9%

-6.2%
4.6%

13.3%
5.0%

-15.2%
4.2%-15.1%
4.1%

-0.1%
4.4%

0.2%
4.8%

36.3%
5.5%

31.0%
5.2%

19.4%
5.2%

3.5%
5.2%

2,040

4,189

5,558

6,397

2,067

2,838

3,893

6,415

2,070

5,181

7,369

9,348

10,000-16.2%
2.7%

8.2%
2.8%

-7.6%
2.5%

-9.8%
2.2%

1.3%
2.7%

-32.3%
1.9%-30.0%
1.7%

0.3%
2.1%

0.1%
2.6%

82.6%
3.3%

89.3%
3.2%

45.7%
3.0%

7.0%
3.2%

Q3
71,422

Q4
70,236Q1
76,370Q476,171Q1
79,048YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY
Net margin

FY02/18

Quarterly(JPYmn)Sales

Q1
75,064Q2
75,674

FY02/19
Q2
76,241

FY02/20Q3
74,133

Q2
78,434Q3
75,161Q475,939

YoY

-0.9%

0.8%

1.1%

-1.2%

1.7%

0.7%

3.8%

8.5%

3.5%

2.9%

1.4%

-0.3%

Gross profit

9,003

9,582

8,635

7,651

9,342

8,120

8,378

9,612

9,632

10,131

9,251

9,556

YoY
GPM

-1.7%
12.0%

8.5%
12.7%

-5.9%
12.1%

-10.7%
10.9%

3.8%
12.2%

-15.3%
10.7%

-3.0%
11.3%

25.6%
12.6%

3.1%
12.2%

24.8%
12.9%

10.4%
12.3%

-0.6%
12.6%

SG&A expenses

5,669

5,498

5,489

5,305

5,556

5,630

5,741

5,494

5,832

5,336

5,741

5,660

YoY
SG&A ratio

3.0%
7.6%

0.9%
7.3%

2.5%
7.7%

0.4%
7.6%

-2.0%
7.3%

2.4%
7.4%

4.6%
7.7%

3.6%
7.2%

5.0%
7.4%

-5.2%
6.8%

7.6%

3.0%
7.5%

Operating profit

3,334

4,084

3,145

2,346

3,785

2,490

2,638

4,117

3,800

4,794

3,510

3,897

-8.8%
4.4%

20.8%
5.4%

-17.8%
4.4%-28.5%
3.3%

13.5%
5.0%

-39.0%
3.3%-16.1%
3.6%

75.5%
5.4%

0.4%
4.8%

92.5%
6.1%

33.1%
4.7%

-5.3%
5.1%

3,367

4,123

3,475

2,416

3,816

2,533

2,958

4,055

3,822

4,833

3,534

3,760

-7.8%
4.5%

21.8%
5.4%

-9.5%
4.9%

-28.7%
3.4%

13.3%
5.0%

-38.6%
3.3%-14.9%
4.0%

67.8%
5.3%

0.2%
4.8%

90.8%
6.2%

19.5%
4.7%

-7.3%
5.0%

YoY
OPM

Recurring profit
YoY
RPM

Net income
YoY
Net margin

2,040

2,149

1,369

839

2,067

771

1,055

2,522

2,070

3,111

2,188

1,979

-16.2%
2.7%

49.7%
2.8%

-36.3%
1.9%-22.0%
1.2%

1.3%
2.7%

-64.1%
1.0%-22.9%
1.4%

200.6%
3.3%

0.1%
2.6%

303.5%
4.0%

107.4%
2.9%-21.5%
2.6%

Source: Shared Research based on company data

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Aeon Delight / 9787
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FY02/18

Segments
Quarterly (JPYmn)

Sales

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Q1
75,064Q2
75,674

FY02/20

FY02/19Q3
71,422

Q4
70,236Q1
76,370Q276,241

Q3
74,133Q4
76,171Q1
79,048Q2
78,434Q3
75,161Q475,939

YoY

-0.9%

0.8%

1.1%

-1.2%

1.7%

0.7%

3.8%

8.5%

3.5%

2.9%

1.4%

-0.3%

Facilities Management

13,165

12,994

13,412

13,128

14,102

14,014

14,447

13,801

14,92814,70014,631

14,030

YoY

Security Services
YoY

Cleaning Services
YoY

Construction WorkYoY
Materials and Supplies Sourcing

YoY

Vending Machine Services
YoY

Support Services
YoY

Other
Operating profit
YoY
OPM

Facilities Management
YoY
OPM

Security Services
YoY
OPM

Cleaning Services
YoY
OPM

Construction Work
YoY
OPM
Materials and Supplies Sourcing

YoY
OPM

Vending Machine Services
YoY
OPM

Support Services
YoY
OPM

Eliminations, other

3.5%

2.1%

6.5%

5.0%

7.1%

7.8%

7.7%

5.1%

5.9%

4.9%

1.3%

1.7%

11,001

10,798

10,712

10,77911,074

10,991

11,220

11,207

11,143

11,04011,121

11,343

6.9%

6.7%

6.3%

1.9%

0.7%

1.8%

4.7%

4.0%

0.6%

0.4%

-0.9%

1.2%

13,743

13,70813,92013,926

14,247

14,39014,45615,092

15,401

15,527

15,59915,835

3.2%

2.1%

4.6%

4.6%

3.7%

5.0%

3.9%

8.4%

8.1%

7.9%

7.9%

4.9%

11,724

12,396

8,617

8,160

10,503

11,178

9,285

10,50412,014

11,089

8,921

9,820

-13.3%-5.2%-14.1%-11.2%-10.4%

-9.8%

7.8%

28.7%

14.4%

-0.8%

-3.9%

-6.5%

12,63812,502

12,696

12,42912,906

13,106

12,771

12,224

12,987

12,926

12,641

12,571

-3.1%

-2.5%

-0.6%

2.7%

2.1%

4.8%

0.6%

-1.6%

0.6%

-1.4%

-1.0%

2.8%

8,017

8,993

7,544

8,280

8,106

8,286

7,614

7,949

7,699

8,376

7,685

7,784
-2.1%

2.7%

-1.2%

-0.7%

-1.1%

1.1%

-7.9%

0.9%

-4.0%

-5.0%

1.1%

0.9%

4,773

4,283

4,519

3,566

5,429

4,276

4,341

5,393

4,872

4,775

4,564

4,557

-5.7%
-

13.2%
-

5.5%
165

-29.5%
19

13.7%
-

-0.2%
-

-3.9%
-

51.2%
-

-10.3%
-

11.7%
-

5.1%
-

-15.5%
-

3,334

4,084

3,145

2,346

3,785

2,490

2,638

4,117

3,800

4,794

3,510

3,897

-8.8%
4.4%

20.8%
5.4%

-17.8%
4.4%-28.5%
3.3%

13.5%
5.0%

-39.0%
3.3%-16.1%
3.6%

75.5%
5.4%

0.4%
4.8%

92.5%
6.1%

33.1%
4.7%

-5.3%
5.1%

1,121

1,142

1,251

1,130

1,477

1,335

1,438

1,308

1,433

1,356

1,250

1,254

11.4%
8.5%

-0.8%
8.8%

13.5%
9.3%

3.6%
8.6%

31.8%
10.5%

16.9%
9.5%

14.9%
10.0%

15.8%
9.5%

-3.0%
9.6%

1.6%
9.2%

-13.1%
8.5%

-4.1%
8.9%

773

708

637

739

722

681

716

762

730

682

795

831

7.2%
7.0%

1.6%
6.6%

-13.5%
5.9%-22.7%
6.9%

-6.6%
6.5%

-3.8%
6.2%

12.4%
6.4%

3.1%
6.8%

1.1%
6.6%

0.1%
6.2%

11.0%
7.1%

9.1%
7.3%

1,570

1,525

1,554

1,579

1,683

1,622

1,695

1,694

1,724

1,786

1,781

1,676

5.8%
11.4%

0.1%
11.1%

2.0%
11.2%

6.6%
11.3%

7.2%
11.8%

6.4%
11.3%

9.1%
11.7%

7.3%
11.2%

2.4%
11.2%

10.1%
11.5%

5.1%
11.4%

-1.1%
10.6%

911

1,020

691

683

989

1,027

865

1,108

1,094

1,080

669

973

-2.6%
7.8%

19.9%
8.2%

1.5%
8.0%

-8.1%
8.4%

8.6%
9.4%

0.7%
9.2%

25.2%
9.3%

62.2%
10.5%

10.6%
9.1%

5.2%
9.7%

-22.7%
7.5%-12.2%
9.9%

710

687

719

752

743

752

641

643

712

643

591

543

0.3%
5.6%

8.2%
5.5%

0.4%
5.7%

5.2%
6.1%

4.6%
5.8%

9.5%
5.7%

-10.8%
5.0%-14.5%
5.3%

-4.2%
5.5%

-14.5%
5.0%

-7.8%
4.7%

-15.6%
4.3%

421

862

217

605

419

114

231

400

256

449

243

448

-7.5%
5.3%

-10.5%
9.6%-49.8%
2.9%-37.1%
7.3%

-0.5%
5.2%

-86.8%
1.4%

6.5%
3.0%

-33.9%
5.0%-38.9%
3.3%

293.9%
5.4%

5.2%
3.2%

12.0%
5.8%

639

685

692

-3,482-274-1,283

-778

65

-124

378

187

-25

11.1%
13.4%

18.3%
16.0%

16.3%
15.3%

-97.6%-5.0%-30.0%-17.9%

1.2%

-2.5%

7.9%

4.1%

-0.5%

-2,811-2,545-2,616340-1,974-1,758-2,170-1,863-2,025-1,580-2,006-1,803

Source: Shared Research based on company data
Note: Segment profits for Q3 FY02/18 and earlier are based on initially disclosed figures.

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Full-year FY02/20 results (out April 10, 2020)
Summary▷

For FY02/20, Aeon Delight reported full-year consolidated sales of JPY308.6bn (+1.9% YoY), operating profit of JPY16.0bn(+22.8% YoY), and net income of JPY9.3bn (+45.7% YoY). Sales increased as the company grew business with external parties
despite sluggish sales to the Aeon group. The jump in earnings reflected a combination of growth at the Security Services
segment and Cleaning Services segment, margin improvement at the Vending Machine Services segment, and smaller losses
at subsidiary Kajitaku (which had previously been found to have engaged in irregular accounting practices). Excluding Kajitaku,
operating profit was JPY17.2bn (+0.8% YoY). Still, full-year results were short of the company’s initial forecast (sales of
JPY315.0bn and operating profit of JPY18.0bn, announced in June 2019), the shortfall being attributable in large part to belowplan growth in new contracts and delays in the implementation of productivity improvement measures.

▷

FY02/21: For FY02/21, the company forecasts consolidated sales of JPY315.0bn (+2.1% YoY), operating profit of JPY16.5bn(+3.1% YoY), net income of JPY10.0bn (+7.0% YoY), and EPS of JPY200.13. This forecast assumes the impact of the coronavirus
pandemic will extend through 1H FY02/21, depressing operating profit by some JPY1.5bn. With regard to specific factors
driving its operating profit outlook for FY02/21, the company said it is expecting the fallout from coronavirus pandemic todepress operating profit by JPY1.5bn, but sees this being offset by a JPY700mn contribution from smaller losses at Kajitaku anda total of JPY1.3bn in contributions from improvements in all other areas. With regard to the impact of the coronavirus
pandemic and related mitigation measures, the company said it sees the drag on sales and earnings extending through 1H
FY02/21, and during this period expects to see lower sales and earnings from vending machine operations in Aeon groupstores, and declining revenues from event-related services (such as security and travel services) as fewer events are held. Even
though Aeon malls themselves are expected to be closed part of the year, Aeon Delight does not expect a sharp decline indemand for its security or cleaning services because the supermarkets that are located within those malls will remain open.
Internal initiatives aimed at improving profitability include 1) the implementation of various productivity improvement
measures at its facilities management, cleaning, and materials supply businesses, 2) efforts to win more orders for construction
work from Aeon group companies, and 3) efforts aimed at increasing its market share both in Japan and overseas.

▷

Dividend: Aeon Delight forecasts an annual dividend per share of JPY70.0 for FY02/21, up from JPY65.0 in FY02/20. The
company previously targeted a dividend payout ratio of 30%, but aims at 35% from FY02/21.

▷

Deposits: As of end-FY02/20, there were no deposits with affiliated companies (JPY160.0bn as of end-FY02/19), and cash anddeposits increased to JPY62.4bn (from JPY44.2bn). The company had previously deposited surplus funds other than working
capital with Aeon (TSE1: 8267), but reviewed this policy from the viewpoint of cash governance. There has not been a fallingout between the companies. Aeon Delight discussed governance arrangements with Aeon, which agreed to shift to an
arrangement where the company managed the funds itself.

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Coverage

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Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Results by segment
Facilities Management
FY02/18

Facilities Management

Q1
13,165

Quarterly (JPYmn)

Sales
YoY

Operating profit
YoY
OPM

Q2
12,994

FY02/19

Q3
13,412

Q1
14,102Q2
14,014

FY02/20Q3
14,447Q4
13,801Q1
14,928Q2
14,700Q3
14,631

Q4
14,030

3.5%

2.1%

6.5%

5.0%

7.1%

7.8%

7.7%

5.1%

5.9%

4.9%

1.3%

1.7%

1,121

1,142

1,251

1,130

1,477

1,335

1,438

1,308

1,433

1,356

1,250

1,254

11.4%
8.5%

-0.8%
8.8%

13.5%
9.3%

3.6%
8.6%

31.8%
10.5%

16.9%
9.5%

14.9%
10.0%

15.8%
9.5%

-3.0%
9.6%

1.6%
9.2%

-13.1%
8.5%

-4.1%
8.9%

Operating profit

1,600

Q4
13,128

OPM (RHS)

16%

1,400

14%

1,200
1,000

9.0%

8.6%

8.9%

800

9.0%

7.9%

7.8%

8.8%

8.7%

8.8%

8.5%

10.5%

9.3%

9.5%

8.6%

10.0%

9.5%

9.6%

12%
9.2%

8.9%

8.5%

10%
8%

600

6%

400

4%

200

2%

0
(JPYmn)Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19Q3

Q1
FY02/200%Q3

Source: Shared Research based on company data

The Facilities Management segment posted sales of JPY58.3bn (+3.4% YoY) and segment profit of JPY5.3bn (-4.8% YoY). The topline gains reflected new clients, primarily outside the Aeon group, but profit fell YoY on higher procurement costs. The company
boosted the productivity of its personnel with the introduction of its open systems-based integrated facilities management
model at the Aeon Fujiidera Shopping Center. However, margins fell as outsourcing charges increased (in areas such as specialist
construction) due to rising personnel expenses.
The company is working to shift to managing contractors by area. It aims to lower outsourcing charges by ordering in ways thatenable contractors to boost productivity, such as reducing travel times.

Security Services
FY02/18

Security Services

FY02/19

FY02/20

Sales

Q1
11,001

Q2
10,798Q3
10,712

Q4
10,779Q1
11,074

Q2
10,991

Q3
11,220Q4
11,207Q1
11,143

Q2
11,040Q3
11,121

Q4
11,343

YoY

6.9%

6.7%

6.3%

1.9%

0.7%

1.8%

4.7%

4.0%

0.6%

0.4%

-0.9%

1.2%

773

708

637

739

722

681

716

762

730

682

795

831

7.2%
7.0%

1.6%
6.6%

-13.5%
5.9%-22.7%
6.9%

-6.6%
6.5%

-3.8%
6.2%

12.4%
6.4%

3.1%
6.8%

1.1%
6.6%

0.1%
6.2%

11.0%
7.1%

9.1%
7.3%

Quarterly (JPYmn)

Operating profit
YoY
OPM

1,200
1,000

Operating profit

9.0%
7.5%

7.9%

8.2%

8.0%
7.0%

6.9%

7.3%

7.0%

800

6.6%

6.9%
5.9%

6.5%

6.2%

10%

OPM (RHS)

6.4%

6.8%

6.6%

7.1%

7.3%

8%

6.2%

6%

600
4%

400

2%

200
0
(JPYmn)Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19Q3

Q1
FY02/20Q30%

Source: Shared Research based on company data

The Security Services segment posted sales of JPY44.6bn (+0.3% YoY) and profit of JPY3.0bn (+5.4% YoY). Despite rising laborcosts amid a worker shortage, the company worked to improve margins through higher prices on contracts and saving energy byautomating systems. Operating profit increased as it arrested the ongoing slide in the OPM, boosting it to 6.8% (6.5% in
FY02/19).
The company further automated tasks such as facility entrance/exit management and store closing. It has established area-based
security structure, and shifted from an on-site management model to an unmanned/patrol model where staff can be dispatchedpromptly as necessary. It appears that results are gradually starting to flow through.

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Cleaning Services
FY02/18

Cleaning Services

Q1
13,743

Quarterly (JPYmn)

Sales
YoY

Operating profit
YoY
OPM

Q2
13,708

FY02/19Q3
13,920Q4
13,926

Q1
14,247

Q2
14,390Q1
15,401

Q2
15,527

Q3
15,599

2.1%

4.6%

4.6%

3.7%

5.0%

3.9%

8.4%

8.1%

7.9%

7.9%

4.9%

1,525

1,554

1,579

1,683

1,622

1,695

1,694

1,724

1,786

1,781

1,676

5.8%
11.4%

0.1%
11.1%

2.0%
11.2%

6.6%
11.3%

7.2%
11.8%

6.4%
11.3%

9.1%
11.7%

7.3%
11.2%

2.4%
11.2%

10.1%
11.5%

5.1%
11.4%

-1.1%
10.6%

OPM (RHS)

16%
12%

11.8%
11.3% 11.7% 11.2% 11.2% 11.5% 11.4%
11.2% 11.1% 11.4% 11.4% 11.1% 11.4% 11.1% 11.2% 11.3%

10.6%

1,000
500
0
(JPYmn)Q4
15,835

3.2%

Operating profit
13.5%
12.7% 13.1%

Q4
15,092

1,570

2,000
1,500

FY02/20Q3
14,4568%4%Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19Q3

Q1
FY02/200%Q3

Source: Shared Research based on company data

The Cleaning Services segment posted sales of JPY62.4bn (+7.2% YoY) and profit of JPY7.0bn (+4.1% YoY). The top-line gains
reflected contributions from new customers and a full year from PT Sinar Jernih Sarana (SJS), the Indonesian cleaning services
company acquired in December 2018 (SJS had roughly JPY2.5bn in sales and JPY140mn in operating profit).
The company is also working to introduce automatic floor cleaning robots to save energy and is selling the product to third
parties. It said the robots help maintain a high degree of cleanliness, reduce cleaning time, and facilitate low-cost operations late
at night and early in the morning when it is hard to find cleaning personnel.

Construction Work
FY02/18

Construction Work

FY02/19

Sales
YoY-13.3%-5.2%-14.1%-11.2%-10.4%

-9.8%

7.8%

28.7%

911

1,020

691

683

989

1,027

865

1,108

-2.6%
7.8%

19.9%
8.2%

1.5%
8.0%

-8.1%
8.4%

8.6%
9.4%

0.7%
9.2%

25.2%
9.3%

62.2%
10.5%

Operating profit
YoY
OPM

Q2
12,396

Q3
8,617

Q4
8,160

Q1
10,503

FY02/20Q1
11,724

Quarterly (JPYmn)

1,200

Operating profit

Q2
11,178

Q3
9,285

Q4
10,504Q1
12,014

Q2
11,089

Q3
8,921

Q4
9,820

14.4%

-0.8%

-3.9%

-6.5%

1,094

1,080

669

973

10.6%
9.1%

5.2%
9.7%

-22.7%
7.5%-12.2%
9.9%

12%

OPM (RHS)

1,000

10%

10.5%
9.4%

800
7.1%

600

8.0%

7.3%

8.1%
6.5%

6.9%

6.5%

7.8%

8.2%

8.0%

8.4%

9.2%

9.3%

9.1%

9.9%

9.7%
7.5%

6.8%

8%
6%

400

4%

200

2%

0
(JPYmn)Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19Q3

Q1
FY02/20Q30%

Source: Shared Research based on company data

The Construction Work segment posted sales of JPY41.8bn (+0.9% YoY) and profit of JPY3.8bn (-4.3% YoY) under a fresh
operating structure that can provide more localized services. The company won more orders for renovation work across all
regions.
However, the company said that a consolidated subsidiary lost an order for a relatively large project. It said that bettercollaboration within the group might have prevented the loss, and it aims to collaborate more closely with subsidiaries andpartners.

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Materials and Supplies Sourcing Services
FY02/18

Materials and Supplies Sourcing

FY02/19

FY02/20Sales

Q1
12,638Q2
12,502

Q3
12,696

Q4
12,429Q1
12,906

Q2
13,106

Q3
12,771

Q4
12,224

Q1
12,987Q2
12,926

Q3
12,641

Q4
12,571

YoY

-3.1%

-2.5%

-0.6%

2.7%

2.1%

4.8%

0.6%

-1.6%

0.6%

-1.4%

-1.0%

2.8%

710

687

719

752

743

752

641

643

712

643

591

543

0.3%
5.6%

8.2%
5.5%

0.4%
5.7%

5.2%
6.1%

4.6%
5.8%

9.5%
5.7%

-10.8%
5.0%-14.5%
5.3%

-4.2%
5.5%

-14.5%
5.0%

-7.8%
4.7%

-15.6%
4.3%

Quarterly (JPYmn)

Operating profit
YoY
OPM

1,000

Operating profit

800
600

10%

OPM (RHS)

8%

7.0%
4.7%

5.3%

5.4%

5.2%

5.0%

5.6%

5.9%

5.6%

5.5%

5.7%

6.1%

5.8%

5.7%

5.0%

5.3%

5.5%

5.0%

6%

4.7%

4.3%

400

4%

200

2%

0
(JPYmn)Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19Q3

Q1
FY02/200%Q3

Source: Shared Research based on company data

The Materials and Supplies Sourcing Services segment posted sales of JPY51.1bn (+0.2% YoY) and profit of JPY2.5bn (-10.4%
YoY). Sales rose on expanding orders for TOPVALU, Aeon’s private brand packaging materials. However, profit declined on lower
sales of mainstay paper products and deteriorated distribution efficiency due to lower sales.
The company aims to be a comprehensive supplier of materials handled by the Aeon group, and is working to develop andexpand sales of high value-added environmental materials and boost margins by changing its logistics arrangements.

Vending Machine Services
FY02/18

Vending Machine Services

FY02/19

FY02/20

Sales

Q1
8,017

Q2
8,993

Q3
7,544

Q4
8,280

Q1
8,106

Q2
8,286

Q3
7,614

Q4
7,949

Q1
7,699

Q2
8,376

Q3
7,685

Q4
7,784

YoY

2.7%

-1.2%

-0.7%

-1.1%

1.1%

-7.9%

0.9%

-4.0%

-5.0%

1.1%

0.9%

-2.1%

421

862

217

605

419

114

231

400

256

449

243

448

-7.5%
5.3%

-10.5%
9.6%-49.8%
2.9%-37.1%
7.3%

-0.5%
5.2%

-86.8%
1.4%

6.5%
3.0%

-33.9%
5.0%-38.9%
3.3%

293.9%
5.4%

5.2%
3.2%

12.0%
5.8%

Quarterly (JPYmn)

Operating profit
YoY
OPM

15.1%

1,400

Operating profit

1,200

12%

9.6%

8.8%

800
600

14%

11.5%

10.6%

1,000

10%
7.3%

5.6%

5.0%

5.8%

5.7%

5.3%

400

5.2%
3.0%

(JPYmn)

5.8%

5.4%

5.0%

2.9%

3.3%

3.2%

1.4%

200
0

16%

OPM (RHS)

Q1
FY02/16Q3

Q1
FY02/17Q3Q1
FY02/18Q3Q1
FY02/19

8%
6%
4%
2%

Q3

Q1
FY02/20Q30%

Source: Shared Research based on company data

The Vending Machine Services segment posted sales of JPY31.5bn (-1.3% YoY) and profit of JPY1.4bn (+19.9% YoY). The
company installed its own multi-brand vending machines and reviewed machine locations to wean its earnings structure from areliance on beverage company campaigns, but there still seems to be room for improvement. Segment profit received a
JPY306mn boost from reduced depreciation following a review of service life assumptions from FY02/20, based on vending
machines’ historical replacement periods and physical lifespans.

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Support Services
FY02/18

Support Services

FY02/19

FY02/20

Sales

Q1
4,773

Q2
4,283

Q3
4,519

Q4
3,566

Q1
5,429

Q2
4,276

Q3
4,341

Q4
5,393

Q1
4,872

Q2
4,775

Q3
4,564

Q4
4,557

YoY

-5.7%

13.2%

5.5%

-29.5%

13.7%

-0.2%

-3.9%

51.2%

-10.3%

11.7%

5.1%

-15.5%

-

-

-

-

2,056

712

777

1,905

1,452

1,307

941

730

-

-

-

-

-29.4%

83.5%

21.1%

-61.7%

Quarterly (JPYmn)

Kajitaku
YoY

Excluding Kajitaku

-

-

YoY
OPM

Kajitaku

3,373

3,564

3,564

3,488

3,420

3,468

3,623

3,827

-

-

-

-

-

-

1.4%

-2.7%

1.7%

9.7%

639

685

692

-3,482-274-1,283

-778

65

-124

378

187

-25

11.1%
13.4%

18.3%
16.0%

16.3%
15.3%

-97.6%-5.0%-30.0%-17.9%

1.2%

-2.5%

7.9%

4.1%

-0.5%

-

-

-

-

-661

-1,817-1,335

-228

-510

-105

-325

-272

-32.2%-255.2%-171.8%-12.0%-35.1%-8.0%-34.5%-37.3%

Excluding Kajitaku
YoY
OPM

387

534

557

293

386

483

512

247

11.5%

15.0%

15.6%

8.4%

-0.3%
11.3%

-9.6%
13.9%

-8.1%
14.1%

-15.7%
6.5%

-

-

-

-

-

YoY
OPM

-

-

-

YoY

Operating profit

-

-

-

-

-

-

-

-

-

Source: Shared Research based on company data

The Support Services segment posted sales of JPY18.8bn (-3.5% YoY) and profit of JPY416mn (versus loss of JPY2.3bn in
FY02/19). Scandal-hit subsidiary Kajitaku posted estimated sales of JPY4.4bn (-18.7% YoY) and a narrower loss of JPY1.2bn (loss of
JPY4.0bn in FY02/19). The company spun off Kajitaku’s housework support business (operating loss of roughly JPY100mn in
FY02/20) in view of its significant growth potential. The business got a fresh start as Actia Corporation. In the storefront
promotion business (operating loss of JPY1.1bn in FY02/20), the company suspended all new sales while fulfilling existing
contracts, and plans to proceed with restructuring related to the spinoff and sale, as soon as possible. The company renamed theremaining Kajitaku specialist storefront promotion business KJS.
The Support Services segment excluding Kajitaku posted sales of JPY14.3bn (+2.5% YoY) and segment profit of JPY1.6bn (-8.1%
YoY). The company worked to tap into outsourcing demand for management and operation of customer facilities and peripheral
areas but earnings slumped at a subsidiary, Subsidiary Aeon Compass which provides services such as business travel
management (BTM) and MICE (meetings, incentive tours, conventions/conferences, and exhibitions).

Overseas businesses
Overseas sales were about JPY19.7bn (up roughly 20% YoY) and operating profit about JPY1.6bn (roughly +50% YoY). PT Sinar
Jernih Sarana (SJS), the Indonesian cleaning services company consolidated in December 2018, made a full-year contribution in
FY02/20 (about JPY2.5bn in sales and JPY140mn in operating profit). At SJS, the company is applying the integrated facilities
management expertise acquired at its Vietnam subsidiary. SJS was getting ready for the switchover to outsourced integrated
facilities management at the first and second Aeon malls in Indonesia, and started providing services facilities management andsecurity at the second mall in October 2019.
In China, its two key subsidiaries (Aeon Delight Jiangsu and Wuhan Xiaozhu Property Management) expanded orders for facilities
with priority targets of mid- to high-end shopping centers, hospitals and nursing care facilities, infrastructure, andredevelopment precincts. Growth in facilities contracts here helped increase earnings.
Note that the fiscal year-end for key consolidated subsidiaries overseas such as Aeon Delight Jiangsu is December (therefore Q4means October to December). As a result, any impact of the coronavirus is yet to appear in the accounts.
For details on previous results, please refer to the Historical financial statements section.

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FY02/21 company forecasts (initial forecast)
Full-year company forecasts(JPYmn)Sales
YoY
Cost of sales
Gross profit
YoY
GPM
SG&A expenses
SG&A ratio
Operating profit
YoY
OPM
Recurring profit
YoY
RPM
Net income
YoY

FY02/19
1H
152,6111.2%
135,149
17,462-6.0%
11.4%
11,1860.2%
6,275-15.4%
4.1%
6,349-15.2%
4.2%
2,838-32.3%

2H
150,304
6.1%
132,314
17,99010.5%
12.0%
11,235
4.1%
6,755
23.0%
4.5%
7,013
19.0%
4.7%
3,577
62.0%

FY
302,915
3.6%
267,463
35,452
1.7%
11.7%
22,421
2.1%
13,0300.9%
4.3%
13,362
-0.1%
4.4%
6,415
0.3%

FY02/201H
157,482
3.2%
137,719
19,763
13.2%
12.5%
11,168
-0.2%
8,594
37.0%
5.5%
8,655
36.3%
5.5%
5,181
82.6%

2H
151,100
0.5%
132,292
18,8074.5%
12.4%
11,401
1.5%
7,407
9.7%
4.9%
7,294
4.0%
4.8%
4,167
16.5%

FY
308,5821.9%
270,01138,5708.8%
12.5%
22,5690.7%
16,001
22.8%
5.2%
15,949
19.4%
5.2%
9,348
45.7%

FY02/21FY
315,000
2.1%

16,5003.1%
5.2%
16,500
3.5%
5.2%
10,000
7.0%

Source: Shared Research based on company data

Key points of FY02/21 initial forecasts (out April 10, 2020)
For FY02/21, the company forecasts consolidated sales of JPY315.0bn (+2.1% YoY), operating profit of JPY16.5bn (+3.1% YoY, up
by about JPY500mn), net income of JPY10.0bn (+7.0% YoY), and EPS of JPY200.13. This assumes the coronavirus pandemic will
drag on operating profit by some JPY1.5bn, offset by JPY700mn in narrower losses at Kajitaku and a JPY1.3bn increase inoperating profit elsewhere.

Impact of coronavirus pandemic
The company expects the impact of the coronavirus pandemic such as temporary closure of some Aeon group stores following
the government’s emergency declaration of April 7 to persist through 1H (end August). It expects roughly JPY1.2bn of the
JPY1.5bn operating profit impact in Japan and JPY300mn overseas. It said that in Japan it expects lower earnings from vending
machines in Aeon group stores, lower demand for security as events are put off, and declining business travel. According to thecompany, while some key customers, Aeon malls, are temporarily closed, supermarket tenants will remain open and needsecurity and cleaning services.
Overseas, the company has mainly factored in the impact in China. In China’s Q1 (January–March), one of its key customers,
Aeon, continued operating five stores in the vicinity of Wuhan. Aeon Delight supported the operation of the stores with its
facilities management services. It was also involved in preparations for building a temporary medical facility and provided
preparatory cleaning and indoor settings in hotels for medical teams in a limited timeframe. (In recognition of its services it wasnamed a “real estate management services company with advanced infection prevention capabilities” by the Jingxia district
government in Wuhan). Some of the company’s work was negatively affected by the coronavirus, but it also received
unexpected jobs. It said that it expected the negative impact in China overall would be capped at about JPY300mn. The
company said it was still assessing the situation in ASEAN, but the business is small, and should not have a major impact.
That said, on April 16, the Japanese government extended its emergency declaration from seven prefectures (Tokyo, Kanagawa,Chiba, Saitama, Osaka, Hyogo, and Fukuoka) to the entire country. Events in Japan are unfolding in a way not anticipated by thecompany, so future developments bear watching.

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Full-year earnings(JPYmn)Sales
YoY
Gross profit
YoY
GPM
SG&A expenses
YoY
SG&A ratio
Operating profit
YoY
OPM
Recurring profit
YoY
RPM
Net income
YoY
Net margin
Segment performance(JPYmn)Sales
YoY
Facilities Management
YoY
Security Services
YoY
Cleaning Services
YoY
Construction WorkYoY
Materials and Supplies Sourcing
YoY
Vending Machine Services
YoY
Support Services
YoY
Operating profit
YoY
OPM
Facilities Management
YoY
OPM
Security Services
YoY
OPM
Cleaning Services
YoY
OPM
Construction Work
YoY
OPM
Materials and Supplies Sourcing
YoY
OPM
Vending Machine Services
YoY
OPM
Support Services
YoY
OPM
Elimination, other

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20 FY02/21
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Es t.
219,797 248,876 256,654 265,572 277,926 292,607 292,396 302,915 308,582 315,000
28.6%
13.2%
3.1%
3.5%
4.7%
5.3%
-0.1%
3.6%
1.9%
2.1%
28,63130,22733,24534,29034,83635,73634,87135,452
38,570
19.4%
5.6%
10.0%
3.1%
1.6%
2.6%
-2.4%
1.7%
8.8%
13.0%
12.1%
13.0%
12.9%
12.5%
12.2%
11.9%
11.7%
12.5%
14,86816,326
18,622
18,90020,28021,596
21,961
22,421
22,569
24.3%
9.8%
14.1%
1.5%
7.3%
6.5%
1.7%
2.1%
0.7%
6.8%
6.6%
7.3%
7.1%
7.3%
7.4%
7.5%
7.4%
7.3%
13,762
13,901
14,622
15,39014,556
14,13912,90913,03016,001
16,500
14.4%
1.0%
5.2%
5.3%
-5.4%
-2.9%
-8.7%
0.9%
22.8%
3.1%
6.3%
5.6%
5.7%
5.8%
5.2%
4.8%
4.4%
4.3%
5.2%
5.2%
13,784
13,892
14,60015,472
14,534
14,263
13,381
13,362
15,94916,500
14.0%
0.8%
5.1%
6.0%
-6.1%
-1.9%
-6.2%
-0.1%
19.4%
3.5%
6.3%
5.6%
5.7%
5.8%
5.2%
4.9%
4.6%
4.4%
5.2%
5.2%
6,912
7,509
7,039
7,965
7,247
7,093
6,397
6,415
9,348
10,000
6.4%
8.6%
-6.3%
13.2%
-9.0%
-2.1%
-9.8%
0.3%
45.7%
7.0%
3.1%
3.0%
2.7%
3.0%
2.6%
2.4%
2.2%
2.1%
3.0%
3.2%
FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

FY02/21Act.
219,79728.6%
42,147
5.3%
32,2350.5%
39,852-3.1%
28,51373.6%
36,73096.2%
32,280
87.8%
8,037
50.9%
13,762
14.4%
6.3%
5,084
-0.6%
12.1%
2,823
2.1%
8.8%
5,882
-0.9%
14.8%
1,936
59.5%
6.8%
1,234
96.8%
3.4%
2,330
57.4%
7.2%
312
-47.1%
3.9%-

Act.
248,876
13.2%
42,050-0.2%
31,805-1.3%
40,5191.7%
53,07186.1%
39,2847.0%
31,200-3.3%
10,94236.1%
13,901
1.0%
5.6%
4,661
-8.3%
11.1%
2,692
-4.6%
8.5%
5,918
0.6%
14.6%
2,209
14.1%
4.2%
1,462
18.5%
3.7%
2,396
2.8%
7.7%
741
137.5%
6.8%-6,180Act.
256,654
3.1%
43,458
3.3%
34,242
7.7%
42,320
4.4%
45,630-14.0%
44,543
13.4%
33,3296.8%
13,12920.0%
14,622
5.2%
5.7%
4,725
1.4%
10.9%
2,865
6.4%
8.4%
5,716
-3.4%
13.5%
2,580
16.8%
5.7%
2,333
59.6%
5.2%
3,068
28.0%
9.2%
336
-54.7%
2.6%-7,334

Act.
265,572
3.5%
45,8395.5%
36,6227.0%
44,287
4.6%
41,972-8.0%
47,618
6.9%
34,825
4.5%
14,406
9.7%
15,390
5.3%
5.8%
4,217
-10.8%
9.2%
3,102
8.3%
8.5%
6,289
10.0%
14.2%
2,807
8.8%
6.7%
2,111
-9.5%
4.4%
2,965
-3.4%
8.5%
281
-16.4%
2.0%-6,574

Act.
277,926
4.7%
48,962
6.8%
38,456
5.0%
47,8708.1%
43,8554.5%
50,516
6.1%
32,741-6.0%
15,524
7.8%
14,556
-5.4%
5.2%
4,206
-0.3%
8.6%
3,032
-2.3%
7.9%
6,031
-4.1%
12.6%
3,218
14.6%
7.3%
2,806
32.9%
5.6%
2,846
-4.0%
8.7%
-580
-3.7%
-7,003

Act.
292,607
5.3%
50,551
3.2%
41,0686.8%
53,365
11.5%
45,814
4.5%
50,7400.4%
32,8790.4%
18,18817.2%
14,139
-2.9%
4.8%
4,350
3.4%
8.6%
3,110
2.6%
7.6%
6,012
-0.3%
11.3%
3,210
-0.2%
7.0%
2,774
-1.1%
5.5%
2,812
-1.2%
8.6%
-850
-4.7%
-7,279Act.
292,396-0.1%
52,6994.2%
43,2905.4%
55,297
3.6%
40,897-10.7%
50,265-0.9%
32,834-0.1%
17,325-4.7%
12,909
-8.7%
4.4%
4,644
6.8%
8.8%
2,857
-8.1%
6.6%
6,228
3.6%
11.3%
3,305
3.0%
8.1%
2,868
3.4%
5.7%
2,105
-25.1%
6.4%-1,466-8.5%-7,632

Act.
302,915
3.6%
56,3647.0%
44,492
2.8%
58,185
5.2%
41,4701.4%
51,007
1.5%
31,955-2.7%
19,43912.2%
13,030
0.9%
4.3%
5,558
19.7%
9.9%
2,881
0.8%
6.5%
6,694
7.5%
11.5%
3,989
20.7%
9.6%
2,779
-3.1%
5.4%
1,164
-44.7%
3.6%-2,270-11.7%-7,765Act.
308,582
1.9%
58,2893.4%
44,6470.3%
62,362
7.2%
41,8440.9%
51,1250.2%
31,544-1.3%
18,768-3.5%
16,001
22.8%
5.2%
5,293
-4.8%
9.1%
3,038
5.4%
6.8%
6,967
4.1%
11.2%
3,816
-4.3%
9.1%
2,489
-10.4%
4.9%
1,396
19.9%
4.4%
416
2.2%
-7,415

Est.
315,000
2.1%

16,500
3.1%
5.2%

Source: Shared Research based on company data

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Facilities Management
Facilities Management(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
42,14742,05043,45845,83948,96250,551
52,69956,36458,289
5.3%
-0.2%
3.3%
5.5%
6.8%
3.2%
4.2%
7.0%
3.4%
5,084
4,661
4,725
4,217
4,206
4,350
4,644
5,558
5,293
-0.6%
-8.3%
1.4%
-10.8%
-0.3%
3.4%
6.8%
19.7%
-4.8%
12.1%
11.1%
10.9%
9.2%
8.6%
8.6%
8.8%
9.9%
9.1%
Sales

(JPYmn)YoY (RHS)

70,00060,00050,000

7%

6.8%

6%

5.3%
5.5%

40,000

3.4%

4%
3%

30,0001%

10,0000%-0.2%
FY02/12

FY02/14

FY02/16

24%

19.7%

5,000

18%

FY02/18

FY02/20

-1%

12%
6.8%

3,000

2% 2,000

20,0000

YoY (RHS)

5% 4,000

4.2%
3.2%

3.3%

Operating profit(JPYmn)8% 6,000

7.0%

6%
-0.6%

1.4%

0%

-4.8%
-8.3%

1,000
0

-0.3% 3.4%

FY02/12-6%
FY02/14-10.8%

FY02/16

FY02/18-12%

FY02/20

Source: Shared Research based on company data

The company aims to lift margins in the Facilities Management business through standardization and streamlining workflows.
Margins declined in FY02/20 on higher outsourcing charges amid rising personnel expenses. In FY02/21, the company plans tomanage its contractors on a regional basis, to boost their effective utilization rates and align outsourcing costs with benefits.
As of end-FY02/20, the company had introduced its integrated facilities management based on open network systems in five
stores. It plans to boost this to 35 stores by the end of FY02/21. While sales per property are likely to decline slightly, thecompany expects labor cost savings to outstrip this, generating earnings growth. The company expects higher sales and profit
for the segment overall in FY02/21.

Security Services
Security Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
32,23531,80534,242
36,62238,456
41,06843,29044,49244,647
0.5%
-1.3%
7.7%
7.0%
5.0%
6.8%
5.4%
2.8%
0.3%
2,823
2,692
2,865
3,102
3,032
3,110
2,857
2,881
3,038
2.1%
-4.6%
6.4%
8.3%
-2.3%
2.6%
-8.1%
0.8%
5.4%
8.8%
8.5%
8.4%
8.5%
7.9%
7.6%
6.6%
6.5%
6.8%
Sales

(JPYmn)50,0007.7%

7.0%

YoY (RHS)(JPYmn)5.4%

40,000

6%

5.0%

6.4%

3,000

0%
-2.3%

2%
0.3%

0%

-1.3%
FY02/12

FY02/14

FY02/16

FY02/18

FY02/20

-2%

5%

0.8%

2,000

20,000
0.5%

10%

5.4%

2.6%

4%

2.8%

10,000YoY (RHS)

8.3%

2.1%

30,0000Operating profit

8% 4,000

6.8%

-4.6%

1,000

0

-5%
-8.1%
FY02/12

FY02/14

FY02/16

FY02/18

FY02/20-10%

Source: Shared Research based on company data

The company expects demand for event security in the Security Services segment to decline amid cancellations due to thepandemic, but Shared Research estimates that less than 10% of segment sales come from this area. The impact of the Olympics
and Paralympic Games postponement should be minimal as the company had not been contracted for associated security work.
It plans to continue focusing on installing facility entry/exit and store closing systems to reduce the number of security personnel
per building and boost margins. It expects sales to be roughly flat YoY in FY02/21, but for operating profit to grow.

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Cleaning Services
Cleaning Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
39,85240,51942,32044,28747,87053,36555,29758,18562,362
-3.1%
1.7%
4.4%
4.6%
8.1%
11.5%
3.6%
5.2%
7.2%
5,882
5,918
5,716
6,289
6,031
6,012
6,228
6,694
6,967
-0.9%
0.6%
-3.4%
10.0%
-4.1%
-0.3%
3.6%
7.5%
4.1%
14.8%
14.6%
13.5%
14.2%
12.6%
11.3%
11.3%
11.5%
11.2%
Sales

(JPYmn)YoY (RHS)

60,00050,0004.4%

30,000

7.2%
5.2%

4.6%

3%

1.7%

0%

0

-3.1%

16%

9% 6,000
6%

3.6%

20,00010,000YoY (RHS)

12% 7,000

8.1%

40,000Operating profit(JPYmn)

11.5%

13%
10.0%

5,000

10%

7.5%

4,000

7%

3,000
2,000

4.1%

3.6%
0.6%

4%

-0.3%

-0.9%

1%

-3% 1,000

FY02/12

FY02/14

FY02/16

FY02/18

FY02/20

-6%

0

-2%
FY02/12

-3.4%

-4.1%

FY02/14

FY02/16

FY02/18

FY02/20-5%

Source: Shared Research based on company data

In the Cleaning Services business, the company has not yet adequately passed through rising personnel costs to prices for someproperties, so it plans to raise prices and weed out low-margin contracts. It also aims to continue improving workflows at
individual sites and to introduce more cleaning robots to boost productivity. The aim is to augment the labor force primarily late
at night and early morning when it is hard to obtain staff. The company expects slight sales growth and an improving OPM in
FY02/21.

Construction Work
Construction Work(JPYmn)Sales
YoY
Operating profit
YoY
OPM
Sales

(JPYmn)60,00050,000FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
28,51353,071
45,63041,97243,85545,81440,897
41,47041,84473.6%
86.1%-14.0%
-8.0%
4.5%
4.5%
-10.7%
1.4%
0.9%
1,936
2,209
2,580
2,807
3,218
3,210
3,305
3,989
3,816
59.5%
14.1%
16.8%
8.8%
14.6%
-0.2%
3.0%
20.7%
-4.3%
6.8%
4.2%
5.7%
6.7%
7.3%
7.0%
8.1%
9.6%
9.1%
YoY (RHS)

73.6%

75%

4,000

YoY (RHS)

70%

59.5%

60%

3,500

50%

55% 3,000

40,00035%

30,00020,000

4.5%

4.5%

-8.0%

10,0000Operating profit(JPYmn)95% 4,500

86.1%

FY02/140.9%-10.7%-14.0%
FY02/121.4%

FY02/16

FY02/18-25%

14.1% 16.8%

8.8%

20%

14.6%

1,000

-0.2%

FY02/12

FY02/14

FY02/16

10%

3.0%
-4.3%

500
0

30%

20.7%

2,000

15% 1,500-5%FY02/20

40%

2,500

FY02/18

0%-10%

FY02/20

Source: Shared Research based on company data

In the Construction Work business, the company plans to maintain its strategy from FY02/20 of winning orders in the large
markets in Kanto and Kansai. It is strengthening its contract systems in these areas, and aims to get involved in more projects
from the design stage and win more major contracts. It is also stepping up collaboration with subsidiaries and business partners
to prevent lost orders and win new ones. Construction work is easier to carry out in the current environment as some commercial
facilities are closed or operating under reduced hours. The company hopes the segment will drive profit growth in FY02/21 as it
fine tunes the construction schedule.

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Materials and Supplies Sourcing Services
Materials and Supplies Sourcing(JPYmn)Sales
YoY
Operating profit
YoY
OPM(JPYmn)60,000

Sales

96.2%

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
36,73039,28444,54347,61850,51650,74050,26551,007
51,125
96.2%
7.0%
13.4%
6.9%
6.1%
0.4%
-0.9%
1.5%
0.2%
1,234
1,462
2,333
2,111
2,806
2,774
2,868
2,779
2,489
96.8%
18.5%
59.6%
-9.5%
32.9%
-1.1%
3.4%
-3.1%
-10.4%
3.4%
3.7%
5.2%
4.4%
5.6%
5.5%
5.7%
5.4%
4.9%
YoY (RHS)

50,00080% 3,000

40,00060%
40%

30,00020,000

7.0%

13.4%

6.9%

20%
6.1%

0.4%

10,0000

FY02/12

Operating profit(JPYmn)YoY (RHS)

100% 3,500

FY02/14

FY02/16

-0.9%

1.5%

FY02/18

0.2%

FY02/20

120%
96.8%

100%

2,500

80%
59.6%

2,000

60%

1,500

0%

500

-20%

0

40%

32.9%
18.5%

1,000

-1.1%

-9.5%
FY02/12

FY02/14

FY02/16

20%

3.4%

-3.1%

FY02/180%-10.4%-20%

FY02/20

Source: Shared Research based on company data

In the Materials and Supplies Sourcing Services business, the company aims to win new customers, while also growing (orregaining) sales of high value-added products to major customers. It also aims to lower procurement costs through segment
wide bulk purchases, which were previously conducted at the area level. Although in FY02/20 margins were dragged down by
delivery inefficiencies, the company aims to streamline its delivery arrangements and lower logistics costs. It expects slight
growth in sales and profit in FY02/21.

Vending Machine Services
Vending Machine Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM
Sales

(JPYmn)36,000FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
32,28031,20033,32934,82532,74132,87932,834
31,95531,544
87.8%
-3.3%
6.8%
4.5%
-6.0%
0.4%
-0.1%
-2.7%
-1.3%
2,330
2,396
3,068
2,965
2,846
2,812
2,105
1,164
1,396
57.4%
2.8%
28.0%
-3.4%
-4.0%
-1.2%
-25.1%-44.7%
19.9%
7.2%
7.7%
9.2%
8.5%
8.7%
8.6%
6.4%
3.6%
4.4%
YoY (RHS)

80% 3,000

35,00034,00060%

33,00040%

32,00031,000-3.3% 6.8%

30,00029,000FY02/12

Operating profit(JPYmn)100% 3,50087.8%

FY02/14

20%

4.5%

0.4%

-0.1%

-6.0%

FY02/16

FY02/18

-2.7%

-1.3%

FY02/20

60%
40%

28.0%

2,000

2.8%

19.9%
-3.4%

1,500

-4.0%

-20%

0

-1.2%

-20%
-44.7%

FY02/12

FY02/14

FY02/1620%
0%-25.1%

1,000
500

80%

57.4%

2,500

0%

YoY (RHS)

FY02/18-40%
FY02/20-60%

Source: Shared Research based on company data

The company expects segment sales to decline on lower customer traffic at commercial facilities. It hopes to revive the businessonce the influence of the pandemic settles down, but conditions may remain tough.

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Support Services
Support Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
8,037
10,942
13,12914,406
15,52418,18817,325
19,43918,768
50.9%
36.1%
20.0%
9.7%
7.8%
17.2%
-4.7%
12.2%
-3.5%
312
741
336
281
-580
-850
-1,466-2,270416-47.1% 137.5%-54.7%-16.4%
3.9%
6.8%
2.6%
2.0%
-3.7%
-4.7%
-8.5%
-11.7%
2.2%
Sales(JPYmn)25,000YoY (RHS)

51.4%

50%

20,00035.6%

15,00019.8%

10,000

17.2%
11.0%

FY02/14

FY02/16

40%

0

30%

-500

10% -1,500-5.8%

FY02/12500

20% -1,000

13.4%

7.9%

5,000
0

Operating profit(JPYmn)60% 1,000

FY02/18-3.5%

FY02/200%-2,000-10% -2,500

FY02/12

FY02/14

FY02/16

FY02/18

FY02/20

Source: Shared Research based on company data

The company expects lower losses at the former Kajitaku (primarily at the KJS storefront promotion business), but earnings at
Aeon Compass (involved in business travel arrangement and rental conference rooms) are likely to decline due to the pandemic.
We understand that the company expects narrower losses at Kajitaku (positive impact of JPY700mn at the operating profit level)
will outweigh the drag on earnings from the pandemic (roughly JPY500mn).

Longer-term initiatives
The company expects the coronavirus will have a drag about JPY300mn on operating profit in China, but it will work to grow thebusiness from a longer term perspective. In light of the results of an urban redevelopment project Aeon Delight Jiangsu has been
involved in since 2016 in Suzhou (facilities management concentrated in the Gaotie Xincheng project area), the company plansto participate in a new urban development project from 2020. At its Wuhan Xiaozhu subsidiary, it plans to 1) support customers
as they return business to normal, 2) tap into demand for catering and road cleaning emerging in the wake of the coronavirus,
and 3) roll out new services in nursing care and housekeeping suited to the medium- and high-end residences the company
manages.
In the domestic market, the company aims to focus on shifting to service level agreement (SLA) contracts as well as building
energy management infrastructure (power supply using blockchain technologies).
Transitioning to SLA contracts: Up until now, prices were usually set based on the number of personnel dispatched, but thecompany aims to move to contracts based on service levels. The aims are twofold: boosting personnel productivity andimproving services. This will entail the use of equipment, automation, and systems while shifting from arrangements where
personnel are stationed at individual facilities to staff patrolling within areas.
Energy management business: The company aims to conduct trials with a view to winning energy management contracts for the
Aeon group. The Urawa Misono pilot project finished at end-March 2020, and the company wants to deepen its understanding
with a new trial in FY02/21. It also plans to start supplying power to Aeon group stores, starting with small shops.

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Historical forecast accuracy
Results vs. Initial Est.
(JPYmn)Sales (Initial Est.)
Sales (Results)
Results vs. Initial Est.
Operating profit (Initial Est.)
Operating profit (Results)
Results vs. Initial Est.
Recurring profit (Initial Est.)
Recurring profit (Results)
Results vs. Initial Est.
Net income (Initial Est.)
Net income (Results)
Results vs. Initial Est.

FY02/12Cons.
213,000
219,797
3.2%
14,30013,762-3.8%
14,30013,784
-3.6%
7,600
6,912
-9.1%

FY02/13Cons.
260,000
248,876-4.3%
16,60013,901-16.3%
16,60013,892-16.3%
8,700
7,509-13.7%

FY02/14Cons.
260,000
256,654-1.3%
15,50014,622-5.7%
15,50014,600
-5.8%
8,300
7,039
-15.2%

FY02/15Cons.
270,000
265,572-1.6%
16,00015,390-3.8%
16,00015,472
-3.3%
8,600
7,965
-7.4%

FY02/16Cons.
280,000
277,926-0.7%
17,00014,556-14.4%
17,00014,534-14.5%
9,400
7,247-22.9%

FY02/17Cons.
305,000
292,607-4.1%
17,50014,139-19.2%
17,50014,263-18.5%
10,0007,093-29.1%

FY02/18Cons.
305,000
292,396-4.1%
18,00012,909-28.3%
18,00013,381-25.7%
10,7006,397-40.2%

FY02/19Cons.
305,000
302,915-0.7%
18,50013,030-29.6%
18,50013,362-27.8%
11,0006,415-41.7%

FY02/20Cons.
315,000
308,582-2.0%
18,00016,001-11.1%
18,00015,949-11.4%
10,8009,348-13.4%

Source: Shared Research based on company data.
Note: Results through FY02/18 have not been retrospectively adjusted.

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Aeon Delight Vision 2025
In October 2018, the company announced Aeon Delight Vision 2025 (“Vision 2025”) medium-term plan. Aeon Delight’s
management principle calls for the creation of “environmental value” for clients and regional communities. In accordance withthis principle, Vision 2025 aims to transform Aeon Delight into a company that creates environmental value and contributes tosolving social issues, with “safety and security,” “labor shortage,” and “environment” as three pillars of its growth strategy. Its
FY02/26 targets are JPY525.0bn in sales (+JPY230.0bn vs. FY02/18, CAGR of 7.4%), JPY48.0bn in operating profit (+JPY31.2bn vs.
FY02/18, CAGR of 14.0%), and a 9.1% OPM (+3.5pp vs. FY02/18, CAGR of 0.4pp). The company is also aiming for top ten sales
and top-level OPM globally and number one sales in Asia in the facility management industry. To become one of the top ten
companies in the world, the company is aiming to expand its market share in Japan by constructing Aeon Delight (AD) economic
zone and concentrating management resources in China for its overseas operation.
Vision 2025
(JPYbn)

Sales

600

Operating profit

YoY (right axis)

40%

YoY (left axis)

Operating profit (left axis) (JPYbn)
9.1%
70

10%

525.0

8%

500
30%
400
300

360.0
257.2

266.7

281.0

294.7

295.8

305.0

20%

200
10%
100
0

5.9%

5.9%

6%
4%

5.9%

5.7%

6.1%

60
48.0

50

5.9%

40

2%
0%

6.1%

15.1

15.9

16.7

17.3

16.8

18.5

30

22.0

20
10

-2%
FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Est.
Est.

FY02/26
Est.

0%

-4%

FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Est.
Est.

FY02/26
Est.

0

Source: Shared Research based on company data

Domestic businesses
In Japan, Aeon Delight will construct AD economic zone using the AD platform, improve efficiency and reduce customer costs by
establishing labor-saving/unmanned systems, expand its share in the facility management market through customer-focused sales
activities and collaborations with other companies, and develop an energy management business as the pillar of its new business.
The company is aiming to become a top ten company in China through making two core companies wholly owned subsidiaries,
establishing the AD brand in its stronghold of east China to serve as a business foundation to expand across the entire county,
and constructing systems for branding, recruitment, and management in China.
The company will earnestly engage in the energy management business. Aeon group’s annual energy consumption volume is7.4bn kWh (about 1% of the 2016 overall energy consumption in Japan of 850.5bn kWh). Against this backdrop, it participatedin Aeon Decarbonization Vision 2050 as a company in charge of managing energy consumption of the Aeon group. The
company expects this business to include everything from supplying necessary energy to regional communities to reducing
energy usage at facilities. In addition, as the issue of plastic pollution in oceans grows more serious, the company plans to evolve
its Materials and Supplies Sourcing Services to an environmental materials business which can make proposals from as early as thestage of selecting raw materials.
The company has set meaningful targets for sales and operating profit that not only factor in the business environment andcompetitive landscape but also reflect accumulated tactical effects. These targets reflect aspirations to become the sales leader in
Asia and achieve top ten sales and top-level OPM globally according to the company. The projected sales increase of JPY230.0bn
breaks down as (1) a rise of about JPY100.0bn in the existing FM business (+JPY60.0bn in Japan, +JPY40.0bn in China), and (2) arise of about JPY100.0bn in the new environmental business. Aeon Delight considered sales and growth prospects of leading
global companies in Asia, and formulated a strategy to establish itself as the leader in sales in Asia. Its OPM target of 9.1%(+3.4pp from FY02/18) was similarly set in reference to the 5% level for global leaders such as ISS and SODEXO.

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Aeon Delight, ISS, SODEXO OPM (left) and operating profit (right)
Aeon Delight Aeon Delight

7.0%

SODEXO SODEXOISS ISS

6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20
Est.

(DKK mn)

SODEXO

1,500(euro mn)

ISS (RHS)

4,500

1,200

3,600

900

2,700

600

1,800

300

900

-

FY13

FY14

FY15

FY16

FY17

-

FY18

Source: Shared Research based on company data

In response to worker shortages, the existing FM business will aim to become the sales leader in the Asian FM market by (1)increasing its FM market share (currently 4.1%) and expanding business areas in Japan, and (2) concentrating management
resources into China to join the top ten companies by sales in that country. Vision 2025 targets an increase in sales of over
JPY100.0bn, which will evidently be difficult to achieve through organic growth alone. The company intends to expand its
market share by leveraging the Aeon Delight (AD) platform to develop AD economic zone.
Market share: Aeon Delight estimates the domestic market is worth JPY3.7tn (based on FY02/18 sales in the Facilities Management, Security Services,
and Cleaning Services businesses).

AD platform
The AD platform is a management platform for customer facilities. It aims to utilize various sensors and IoT systems to control all
aspects of facility management ranging from power supply to air conditioning, equipment, lighting, entrance/exit control,
security and disaster prevention, and digital signage. Its objectives are to make facility management more intelligent, achieve
greater efficiency and reduced costs through automated control of energy consumption, centralize data, and make it visible inreal time. In contrast to traditional closed systems that rely on a central monitoring system, the AD platform stands out because of
its open (low-cost) format that does not require a central monitoring system.
The AD platform caters to a wide range of facilities from office buildings, commercial facilities, hotels, hospitals, and public
facilities and proposes optimal, quality, and effective solutions that address specific challenges for each type of facility. The
company notes that (1) it expects the platform to be deployed at all Aeon stores (low initial costs means quick returns), (2)customers will find it difficult to cancel the service once they get used to its convenience and efficiency, and (3) a partial
deployment in the early stages will also generate opportunities to secure various types of additional FM services. By taking
charge of areas ranging from power supply to facilities management, security and cleaning, interior design and construction
work accompanying tenant store openings and closures, and operation of other facility infrastructure such as vending machines,
the company aims to gain a stronger competitive advantage by building an AD economic zone.
AD platform

Source: Shared Research based on company data

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New environmental business: Energy management businessIn the new environmental business, Aeon Delight will offer renewable-energy management and retail services based on the Aeon
Decarbonization Vision 2050 pursued by Aeon (TSE1: 8267). Aeon group’s annual energy consumption volume in FY02/18 is
7.4bn kWh (about 1% of the 2018 overall energy consumption in Japan of 850.5bn kWh), and exceeds over JPY100.0bn. Aeon
Delight will 1) pursue economies of scale in power procurement, 2) secure a position that allows it to reduce peak time demand
for the group’s total energy consumption volume (1% of overall energy consumption in Japan), and 3) utilize projections
obtained from big data. The company aims to redirect savings gained from these efforts into added value. Further in the future, itaims to develop the environmental service in regions surrounding Aeon group stores, and establish a growing energy
management business that includes all aspects from supplying necessary energy to regional communities to reducing energy
consumption for commercial facilities. The company’s Vision 2050 sales forecasts for the business do not factor in expansion tosurrounding regions and targets for sales to group stores are on the conservative side.
The two concurrent avenues planned to achieve the Aeon Decarbonization Vision 2050 are promotion of energy conservation
and a transition to renewable energy. According to public materials from Aeon, it plans to save energy by using IoT technology
and integrated remote management, and hints at using the company’s AD platform. It also plans to use newly developed
technology from Aeon Delight to manage and retail renewable energy. In effect, the company appears likely to supply all of theelectric power needs of the Aeon group.
The bulk of the Aeon group’s power supply goes to air conditioning, refrigerated display cases for cold and frozen foods, andlighting. Using highly precise, real-time management, the company plans to use its AD platform to optimize the Aeon group’s
energy consumption, using demand projections through AI and accumulated data on the group’s energy consumption. Turning
to renewable energy, the company will utilize the rooftop solar power generation facilities of Aeon stores, procure renewableenergy, and leverage the blockchain technology of investee Digital Grid Corporation to demonstrate the viability of renewableenergy.
DIGITAL GRID market

Source: DIGITAL GRID Corporation

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Overseas FM businessIn the overseas business, Vision 2025 looks for sales in the ASEAN region to remain flat, and targets a rise of JPY40.0bn in China.
This apparently reflects the company’s belief that (1) management resources need to be concentrated in China to rapidly
establish a foothold in the massive Chinese market where building construction continues, and (2) the business model for ASEAN
operations needs to be revamped because the company’s independent foray into countries such as Vietnam and Malaysia
ultimately has not led to the acquisition of expertise (in contrast to China, where Aeon Delight achieved growth by acquiring
local companies that already possessed the necessary expertise).
Note: After releasing Vision 2025, the company purchased a major Indonesian cleaning company, PT Sinar Jernih Sarana (SJS), in
December 2018. It started providing integrated facilities management services at shopping malls in Indonesia applying expertise
acquired in Vietnam.

China business
The China business reported sales of nearly JPY10.0bn in FY02/18, and targets sales of JPY50.0bn in FY02/26. This is anothermeaningful target underpinned by the fact that leading companies in China generate sales of JPY20.0–30.0bn (according to thecompany), and the belief that a target of JPY50.0bn is feasible if factoring in growth from the acquisition of a rival. To this end,
Aeon Delight turned two core companies into wholly owned subsidiaries (from previous stakes of 51%) in October 2018, thus
establishing the business foundations to accelerate growth in the China business. The company aims to strengthen its brand in
China and join the top ten companies in the facility management industry by unifying its Chinese operations, strengthening
cooperation between the two subsidiaries and Japan, and accelerating related decision-making process.
The five markets in China targeted under Vision 2025 correspond to the five strategic markets in the medium-term plan:(1) medium to high-end commercial facilities, (2) medium to high-end residential projects, (3) high-end factories (operated by
Japanese, foreign, or Chinese leading companies), (4) care facilities such as nursing homes and hospitals, and (5) subway andother transport infrastructure facilities. The company has already won contract work in each of these markets. It is expanding thescope of its contract work, and also broadening operations beyond East China. Its aim is to establish the AD platform in East
China, lay the foundations that support business expansion throughout China, and join the top ten companies.
Overseas sales and OPM (left), China sales (right)
10%
8%

China

Malaysia

VietnamIndonesia

OPM (LHS)

19.7 (JPYbn)

20

12.1

6%

15.9

7.3%

8.3%
12.9

10.6

4%

8.9

2%

3.4%

7.0%

12

5.2%
3.9%

8
4

-1.0%

FY02/14% of OP

10%
8%
6%
4%
2%

4.2

0%
-2%

16

% of sales

12%

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19Act.

FY02/20
Act.

0

0%
-2%

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19Act.

FY02/20
Act.

Source: Shared Research based on company data

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China’s SmartFM (including operations of DeepBlue Technology)

Source: Shared Research based on company data

Profit margins
Vision 2025 also looks for sharp growth in profit margins, calling for OPM of 9.1% in FY02/26 (3.4pp increase from 5.7% in
FY02/18). This target is based on comparable margins (5–6%) achieved by global leaders such as SODEXO and ISS. Aeon Delightbelieves it can achieve such an ambitious level based on a unique approach that combines technology and AD economic zone. It
plans to incrementally improve OPM, mirroring its approach for sales growth.
By market, Aeon Delight looks for the following:▷

Existing FM market in Japan: Improve profit margins through cost reductions for Aeon Delight and its customers throughdeployment of the AD platform, which is premised on a labor-saving FM model▷

Chinese market: Overseas OPM already reached over 8% in 1H FY02/19, exceeding consolidated OPM of 5.9%, but thecompany will leverage its labor-saving model to achieve a further increase in China, a market that is facing worker shortages
like Japan▷New businesses: The company will aim for OPM that surpasses consolidated OPM (5.6% in FY02/18) through procurement,
big data utilization, and highly efficient power management of the Aeon group’s energy consumption, which corresponds toroughly 1% of overall energy consumption in Japan. Aeon Delight looks to improve profitability of its subsidiaries in Japan byclarifying each company’s function within the group, with consideration given to organizational restructuring

Vision 2025 does not include any references to IFM. This does not mean the company has abandoned IFM altogether, but rather
that IFM is just one proposal underpinning sales. Because of its transparent cost structure, IFM makes it difficult to secure highmargins. While the medium-term plan released in April 2017 (covering FY02/18–20) calls for IFM-driven sales growth, Shared
Research believes Vision 2025 places greater emphasis on high profit margins achieved through the AD platform and AD
economic zone in Japan and through reaping benefits of growth momentum in China.

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Business
Business description
Aeon Delight provides maintenance services for retail facilities and office buildings. The company, formerly known as Japan
Maintenance (a subsidiary of MyCal Corp.), was established mainly to undertake maintenance at Mycal stores in November 1972.
Mycal filed for bankruptcy in September 2001 (delisted on September 17, 2001), and became a subsidiary of Aeon in 2003.
Japan Maintenance merged with Aeon Techno Service and the name was changed to Aeon Delight in September 2006. As of
FY02/13, the company derives 60–70% of sales from Aeon Retail Co., Ltd. and other Aeon group companies.
Aeon Delight handles between 80% and 90% of the facilities management work required by Aeon Retail, and about 65% of suchwork required by Aeon Mall Co., Ltd. (TSE1: 8905). Facilities management work at Aeon Mall was previously done by a subsidiaryof Diamond City, a Mitsubishi Corp. (TSE1: 8058) affiliate absorbed by Aeon Mall in 2007. The company is aiming to increase theshare of work handled for Aeon Mall by following its overseas expansion in recent years and keeping a close relationship. Aeon
Delight also handles between 60% and 70% of the facilities management work at MaxValu retail stores owned by the Aeon
group.

M&A activities
Aeon Delight is active in M&A. It has purchased companies in cleaning, building management, and store interior construction. It
has also purchased companies in businesses ancillary to facilities management, and been proactive in seeking out alliances inother formats. In 2018 it announced collaboration with SECOM (TSE1: 9735) to create a new business model for small andmedium-sized facilities.

Business model
Aeon Delight became a leading integrated facilities management operator through its relationship with the Aeon group. It has
also grown through acquisitions. The company derives its earnings by providing an integrated, all-in-one package of facilities
management services to large retail and commercial properties. It was able to differentiate itself from competitors by its expertiseand costs competitiveness. Competitors included Tokyu Community Corp. (not listed), Biru Daiko Co., Ltd., Nihon Housing Co.,
Ltd. (TSE2: 4781), and Nippon Kanzai Co., Ltd. (TSE1: 9728).
There are three type of property management, residential, commercial, and office buildings. Most of these competitors weremainly involved in residential management of condominiums. Few other large companies were focused on commercial facilities
and building management due the high costs involved. The company was able to gain expertise in commercial property
management through servicing large retail facilities such as shopping malls and supermarkets. The property maintenanceindustry includes over 5,000 companies, most of which are small and medium-sized businesses.
The structure of the building maintenance industry resembles that of the construction industry, with second- and third-tier
subcontractors working under prime contractors. Aeon Delight, a prime contractor, uses a number of subcontractors. Most of its
contracts are signed on an annual basis, which are almost always renewed. In other words, it has a recurring-revenue structure.
The company renegotiates contracts once a year, a process that regularly challenges its pricing, quality, and ability to offer clients
attractive packages. For example, the parent company Aeon conducts a competitive bidding to keep the process fair and open.
However, Aeon Delight is able to provide competitive bids given its knowledge of the client’s needs, and know-how. Its superior
position as a large company with comprehensive reliable services will be further enhanced as the size of buildings expands. The
company is able to handle large facilities maintenance given its size and economy of scale, which further reinforces its strengthand position. Thus, Shared Research believes that Aeon Delight’s position within the commercial facilities industry is likely to
improve, as the company has know-how and expertise.

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Business overview
Aeon Delight operates seven main business segments: facilities management, security services, cleaning services, construction
work, materials and supplies sourcing services, vending machines, support services and other. When the company takes on
integrated facilities management work, sales and profits will be booked across segments. With the expansion of IFM, sales ofcatering services (included in Support Services) are expected to increase, for example, and, as a result, segment analysis isbecoming less effective.
Its customers included Aeon Retail, Aeon Mall, and MaxValu companies, while non-Aeon group customers were commercial
facilities, office buildings, hotels, medical and welfare facilities, schools, factories, and warehouses.

Facilities Management
Facilities Management(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
42,14742,05043,45845,83948,96250,551
52,69956,36458,289
5.3%
-0.2%
3.3%
5.5%
6.8%
3.2%
4.2%
7.0%
3.4%
5,084
4,661
4,725
4,217
4,206
4,350
4,644
5,558
5,293
-0.6%
-8.3%
1.4%
-10.8%
-0.3%
3.4%
6.8%
19.7%
-4.8%
12.1%
11.1%
10.9%
9.2%
8.6%
8.6%
8.8%
9.9%
9.1%

Source: Shared Research based on company data

This segment is involved in inspection, protection, and maintenance of facilities, providing monitoring support 24 hours a day,365 days a year. Specific services are tailored to meet the needs of individual clients. This is a staple business for Aeon Delightwith few contract cancellations. Licensed technicians (such as electricians) are on standby at all times in large shopping centers.
Specifically, the company manages utilities such as electricity, water, and gas, HVAC (operations, repairs, construction, andrequired inspections), exit and entrance management, anti-theft measures, and automobile parking. Operating profit margin is
about 9%. Required facilities are purchased by the client (property owner), and primarily costs incurred by the company are
personnel costs and facilities management costs (water and utilities costs and depreciation). The company puts personnel on-siteat large retail facilities, while smaller facilities are visited periodically and monitored remotely.

Utilization of technology: Next-generation facilities management model
The next-generation facilities management model refers to an open facilities management network system developed by thecompany. The system is currently in operation at five commercial facilities including one in Suzhou, China and one in Chiba,
Japan. While acquiring contracts for IFM services that integrate management for companies, the company is also enthusiastic
about creating a de facto standard for facilities management in Asia using this platform.
Using IoT, the system performs remote monitoring and automatic control of air conditioning and lighting (and eventuallyrefrigeration). It is an open network utilizing existing control equipment and IoT; it has a low installation cost (in some cases, it
can reduce costs by half through multiple vendors); enables lower operation costs by reducing necessary manpower throughremote monitoring; and saves energy (system in China saw 25% energy saving for air conditioning and 16% energy saving in
Chiba, Japan). In China, a 50% reduction is expected after the system is applied to lighting and refrigerators. Likewise, a 30%
reduction is expected in Chiba, Japan. The company is watching out for replacement demand for central monitors (every 15–20
years) to capture replacement orders with its accumulated commercial facilities management know-how. It also plans to utilize its
big data and AI.
While leveraging its track record for large commercial facilities, its specialty, the company is also rolling out the system in otherareas including drug stores to secure market share. In Asia ex. Japan, new purchases account for most market demand while inJapan most demand is replacement demand. The company intends to make its services the de facto industry standard not only in
IFM but also in conventional facilities management.
The company appears to be considering several business models such as one that generates more sales and profits at installation,
one that generates sales and profit through operation, and one that generates profit when energy savings or other measures

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exceed a certain level. The company’s next-generation facilities management system, one of its value-added services, leads toless manpower required for commercial facilities. As such, profitability is expected to rise with sales.
Monitoring screens displayed at a large facility in Chiba (operates in parallel with a central monitor)

Source: Shared Research based on company data

Security Services
Security Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
32,23531,80534,242
36,62238,456
41,06843,29044,49244,647
0.5%
-1.3%
7.7%
7.0%
5.0%
6.8%
5.4%
2.8%
0.3%
2,823
2,692
2,865
3,102
3,032
3,110
2,857
2,881
3,038
2.1%
-4.6%
6.4%
8.3%
-2.3%
2.6%
-8.1%
0.8%
5.4%
8.8%
8.5%
8.4%
8.5%
7.9%
7.6%
6.6%
6.5%
6.8%

Source: Shared Research based on company data

This segment provides comprehensive security services (i.e., security for facilities, security to handle crowds and traffic, andprotection of valuable goods). By combining manual labor and the latest advances in technology, the company provides
customized security solutions to clients.
It places security guards at client facilities, and recurring revenue business with ongoing security services is common. This
segment outsources most of its work to Aeon Delight Security, a subsidiary. Due to heavy personnel costs for security guards, theoperating profit margin is stuck in the 6% range.
The company also offers an attendant security service, which is similar in nature to a concierge service. Attendants are female
security guards that also provide information services to patrons. This service was started in an effort to shed the old “security
guard” image and provide a more hospitable environment. Although costs will arise from staff training, this business provides
high added value.

Cleaning Services
Cleaning Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
39,85240,51942,32044,28747,87053,36555,29758,18562,362
-3.1%
1.7%
4.4%
4.6%
8.1%
11.5%
3.6%
5.2%
7.2%
5,882
5,918
5,716
6,289
6,031
6,012
6,228
6,694
6,967
-0.9%
0.6%
-3.4%
10.0%
-4.1%
-0.3%
3.6%
7.5%
4.1%
14.8%
14.6%
13.5%
14.2%
12.6%
11.3%
11.3%
11.5%
11.2%

Source: Shared Research based on company data

The company provides cleaning services, mainly in large shopping centers for the Aeon group. Because large commercial
facilities tend to have a wide variety of people passing through and frequent layout changes, it is a relatively difficult area of thecleaning industry. Although it is a labor-intensive business, the company has implemented measures to increase efficiency oflarge machinery such as floor cleaners. These and other initiatives serve to standardize and increase the efficiency of work
performed. This is a recurring revenue business and the company has built long-term relationships with about 80% of its
customers in this segment.
On an orders-received basis, the business is composed of about 10–20% work performed directly by the company, and 80–90%
work performed by outsourcing partners. Primary outsourcing partners are Do Service Co., Ltd. and Kankyouseibi Co., Ltd.

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Approximately 30,000 persons are involved in the cleaning services business. In recent years, the company has been working tosecure orders in the hygienic cleaning business, previously untapped territory for it, which can lead to high value-added services.

Hygienic cleaning business
The company believes the hygienic cleaning business will continue to steadily increase sales. There are more than 1.5mn hospitalbeds in medical facilities across Japan, out of which the number of hospital beds at medical facilities Aeon Delight has hygienic
cleaning contracts with still make up only 2–3%. Aeon Delight began offering hygienic cleaning services in FY02/15 and beganproviding service to two major medical facilities in April 2015. As of April 2015, the company was providing hygienic cleaning
services for 14,000 beds. In 2018, that number has increased to over 25,000 beds. The company is in the middle of expanding
sales to about 100 hospitals. For sales to hospitals, it takes about three years from general bidding to winning a project, as manylarge hospitals are under the jurisdiction of the government.
Japanese hospitals and clinics
Hospitals
As of March 31, 2018
Total
National
Public medical institutions
Social insurance-related organizations
Public service corporations
Medical corporations
Private schools
Social welfare services
Individuals
Other

8,389
326
1,208
53
217
5,758
113
203
201
310

Clinics
Beds
1,554,524
128,371
316,193
16,00854,472866,272
56,04834,853
18,974
63,333

101,860
540
3,567
468
525
42,330185
9,723
41,748
2,774

Beds
97,514
2,202
2,489
303
72,48738339
19,059597

Source: Shared Research based on data from Ministry of Health, Labour and Welfare

Because many of the large domestic hospital chains are keen on implementing management reforms, Aeon Delight believes thatits integrated facilities management service can match these hospital chains’ needs for improved sanitation, environmental
conditions, safety, peace of mind, service standardization, and cost reductions. Contract renewal for hygienic cleaning services
typically happens every year, so it is difficult to turn it into a recurring revenue business. That said, a limited number ofcompanies have the scale needed to provide bulk cleaning services for major groups with many medical facilities nationwide.
Aeon Delight presents proposals capitalizing on 1) its roughly 600 bases nationwide; 2) its name recognition as a publicly traded
company and as a member of the Aeon group; 3) its track record with major medical institutions; and 4) the visible quality of its
cleaning services.
Because hospitals and other medical centers must take steps to prevent patients from becoming infected or transmitting theirdisease to others while they are in the hospital, Aeon Delight actually offers clients a numerical scale that gives them a visual
measure of cleaning quality. During FY02/15, most of the marketing for its hygienic cleaning services was done by a special sales
team. However, after receiving training and sharing all the related sales tools, local offices have also been doing their own
marketing since FY02/16. The profitability was low when the company entered the hygienic cleaning business. However, itappears profitability has been improving as its cleaning staff becomes increasingly proficient at their duties.

Construction Work
Construction Work(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
28,51353,071
45,63041,97243,85545,81440,897
41,47041,84473.6%
86.1%-14.0%
-8.0%
4.5%
4.5%
-10.7%
1.4%
0.9%
1,936
2,209
2,580
2,807
3,218
3,210
3,305
3,989
3,816
59.5%
14.1%
16.8%
8.8%
14.6%
-0.2%
3.0%
20.7%
-4.3%
6.8%
4.2%
5.7%
6.7%
7.3%
7.0%
8.1%
9.6%
9.1%

Source: Shared Research based on company data

This segment conducts large-scale renovation, interior design work, restoration, and installation of energy-saving devices (i.e.,
LED lighting) and solar power systems. This segment generates roughly 60% of its sales from Aeon group companies. Renovationis remodeling (not designing) of Aeon retail locations, such as replacing signage, or modifying retail floor space. In recent years,
there has been an increasing amount of work related to changeover of tenants inside Aeon malls (restoration and new interiors).

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In April 2018, Aeon Delight made store design specialist U-COM a wholly owned subsidiary, and the upstream approach hasenabled it to win an increasing number of contracts from outside the Aeon group.
Construction work process for commercial facility tenant replacement
Moving out
01

02

Temporaryenclosure

03

Restoration

Peripheral work

construction work

related to temporary
enclosure andrestoration

Zoningconstruction work

Moving in
04
Preliminary
research

07
05
Development
plan

06
Planningand design
outlineDesign &construction

08

Zoning andrestoration work

construction
management

Interior

09
Construction
andmanagement

10
Transfer

11
Maintenance

12
Facility
mgmt.,
cleaning,
security

Source: Shared Research based on company data

Materials and Supplies Sourcing Services
Materials and Supplies Sourcing(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
36,73039,28444,54347,61850,51650,74050,26551,007
51,125
96.2%
7.0%
13.4%
6.9%
6.1%
0.4%
-0.9%
1.5%
0.2%
1,234
1,462
2,333
2,111
2,806
2,774
2,868
2,779
2,489
96.8%
18.5%
59.6%
-9.5%
32.9%
-1.1%
3.4%
-3.1%
-10.4%
3.4%
3.7%
5.2%
4.4%
5.6%
5.5%
5.7%
5.4%
4.9%

Source: Shared Research based on company data

Through efficient logistics, this business reduces costs for intermediate materials used in offices and retail stores. The segment
deals in items such as plastic bags, gift bags, clothing, and other consumables (employee stationery, cleaning materials, etc.). In
this business, stock must be maintained at all times, and the company undertakes logistics functions on behalf of the customer aswell. Aeon Delight aims to use efficient logistics to reduce costs for intermediate materials and increase process efficiency. It isdifficult to add value in this area, but the operating profit margin is about 5%.

Vending Machine Services
Vending Machine Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
32,28031,20033,32934,82532,74132,87932,834
31,95531,544
87.8%
-3.3%
6.8%
4.5%
-6.0%
0.4%
-0.1%
-2.7%
-1.3%
2,330
2,396
3,068
2,965
2,846
2,812
2,105
1,164
1,396
57.4%
2.8%
28.0%
-3.4%
-4.0%
-1.2%
-25.1%-44.7%
19.9%
7.2%
7.7%
9.2%
8.5%
8.7%
8.6%
6.4%
3.6%
4.4%

Source: Shared Research based on company data

This segment operates soft drink vending machines. It also creates relaxation areas with foliage plants and air purificationequipment.
The company’s vending machines stock a variety of products from different manufacturers. Aeon Delight operates approximately
40,000 vending machines (as of the end of FY02/19). About 80% of vending machine sales come from machine in supermarkets
belonging to the Aeon group. The remaining 20% of sales came from machines in shopping malls operated by Aeon group andnon-Aeon companies. In September 2010, Aeon Delight acquired vending machine operator Certo Corp., which spun off fromthe trading division of Aeon.
Also, aiming for a business model change, the company seeks to increase the number of vending machines equipped with digital
signage functionality (about 2,700 machines at end-FY02/19) and capture advertising revenues.

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Support Services
Support Services(JPYmn)Sales
YoY
Operating profit
YoY
OPM

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
Act.
8,037
10,942
13,12914,406
15,52418,18817,325
19,43918,768
50.9%
36.1%
20.0%
9.7%
7.8%
17.2%
-4.7%
12.2%
-3.5%
312
741
336
281
-580
-850
-1,466-2,270416-47.1% 137.5%-54.7%-16.4%
3.9%
6.8%
2.6%
2.0%
-3.7%
-4.7%
-8.5%
-11.7%
2.2%

Source: Shared Research based on company data

This segment provides business process outsourcing (BPO), housework support services, business travel services, training
services, and staffing services. Much of these support services are conducted by companies acquired through M&A.
The company entered the BPO services market with the acquisition of General Services, Inc. Services that BPO undertake include
cost management, salary calculations, administrative functions, social security and welfare, receipt of telephone calls, and systemmanagement.
The main subsidiaries in the segment are 1) Aeon Compass: mainly B2B services including Business Travel Management(domestic business trips, support for overseas assignments) and MICE (planning and management of meetings, seminars,
trainings), and 2): Actia: household support services.

Kajitaku: In 2019, accounting fraud was discovered at subsidiary Kajitaku, which operated storefront promotion and housework support businesses. The
company submitted corrected financial statements covering FY02/14 through FY02/18. In February 2020, it spun off the housework support business,
which got a new start under the name Actia. Kajitaku was renamed KJS, and halted all sales. It is fulfilling existing contracts and plans to proceed withrestructuring related to the spinoff and sale.

Additionally, A to Z Service Co., Ltd., a maintenance service provider for small commercial facilities, was acquired in 2011. A to Z
Service operates a 24 hour, 365 days a year call center to provide comprehensive support services for retail chains in small
shopping centers. Aeon Delight Academy, Co., Ltd. operates the “Aeon Delight Academy Nagahama” in Shiga Prefecture toprovide real-world training. It also operates a staffing service for technical professions.

Overseas business
Aeon Delight sees China and ASEAN as main growth drivers. In China, the company mainly operates through its subsidiaries in
Suzhou and Wuhan. It made both wholly owned subsidiaries in 2018 to speed up decision making. For now, it plans to target the
Yangtze River Delta and surrounding regions to build up its brand power as a company that provides quality facilities
management. In the medium term, it plans to expand its business to the northern and southern regions. In ASEAN, the company
has subsidiaries in Indonesia, Malaysia, and Vietnam. The Indonesian business purchased in 2018 is the second-largest company
in the cleaning industry in the promising Indonesian market. Aeon Delight plans to provide its expertise in other facility services
and win outsourcing contracts locally.

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Strengths and weaknesses
Strengths◤ Strong ties with the Aeon group: Aeon Delight is a subsidiary of Aeon Co., Ltd., and almost 70% of sales are generated

from the Aeon group. This provides for stable sales, and the Aeon group’s expansion into Asia is also proving to be a positive
factor for Aeon Delight’s growth. The company is able to leverage economies of scale from the Aeon group, and has
accumulated expertise in integrated FMS from its transactions with Aeon. This provides for a stable recurring-revenue model.
◤ Industry leader in comprehensive commercial maintenance services: Aeon Delight is the industry leader capable ofproviding integrated all-in-one building maintenance services such as facilities management, security, cleaning, andrenovations that are non-core activities for many companies. Its competitors can only provide one to two of these services(i.e., security or cleaning). The number of companies that can provide one-stop services is limited.
◤ Cashflow generating ability: Over the past five years, average operating cashflow has been JPY11.0bn per annum, and thecompany has spent JPY2.8bn per year on the acquisition of tangible fixed assets, generating total cashflow of about JPY8.0bn.
The company is using stable cash flow to invest strategically in acquisitions and technological development based on its
longer-term vision. If there are no investment outlets that meet its growth strategy, the cash flow funds shareholder returns.
Over the past five years, Aeon Delight has spent an average of JPY3.0bn in dividend payments (cash flow basis) yearly. In
FY02/19 it spent JPY9.9bn on a share buyback. The company targets a dividend payout ratio of 35% from FY02/21 onward.

Weaknesses◤ Organic growth challenging: Aeon Delight depends mainly on the domestic market which generates about 95% of sales.

The markets for its existing businesses in Japan are mature, which is a weakness in terms of the company’s growth potential. It
will be challenging to sustain growth, as Aeon Delight must rely on aggressive development overseas and winning contracts
in ancillary businesses as an FMS company and growing market share.
◤ Overly dependent on the Aeon group: Aeon Delight is a consolidated subsidiary of Aeon, and derives just over 60% of its

sales from the Aeon group. A drawback from such a strong relationship is that the parent company may ask for support inpursuing its agenda. Recently, Aeon acquired 50% of Tesco Japan, the U.K. supermarket chain operator’s Japan retail business.
A joint venture company, Aeon Every Co., Ltd. is in charge of supermarket operations. The parent Aeon could ask thecompany for support in future acquisitions.
◤ Mature property management market: The property management market is relatively mature. However, small retailstores in urban areas offer growth opportunities given the greater number of customer volume. Many small retailers arerenovating their stores and upgrading facilities. Aeon Delight’s expertise has been in large facilities, mainly supporting the
Aeon group retail stores such as shopping centers and supermarkets. As smaller commercial facilities emerge in large urban
areas, the question remains whether the company can successfully adapt its facilities maintenance know-how to this segmentof the market. The company may need to look at this segment for growth.

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Market and value chain
Market overview
Japan’s building maintenance market was worth roughly JPY4.0tn in FY2017 (April 1, 2016 to March 31, 2017), up 6.3% YoY,
according to a survey released in July 2019 by Yano Research Institute Ltd. This put the market size back around its FY2007 levels.
Building maintenance market includes building cleaning, facilities maintenance, and security services. It also includes repair work, renovation work, andrenewal work undertaken by building maintenance companies. But businesses unrelated to building maintenance are not included in the data eventhough they are undertaken by these companies.

Market size (RHS)

6%
4%
2%

(JPYbn)

YoY

4,200
3,993

3,978

3,977
3,809
3,682

0%

3,702

3,572

3,744

3,835

3,773

3,743

3,663

3,800
3,600

3,421

-2%

4,000

3,400

-4%

3,200

-6%

3,000

-8%

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017
Est.

FY2018Est.

2,800

Source: Shared Research based on Yano Research Institute Ltd. materials (July 9, 2019)

Building maintenance services were mainly used by office buildings (22%), shops and commercial facilities (18%), medical andwelfare facilities (12%), factories and work places (10%), and educational facilities (7%). The company has a significant share of
the shop and commercial facilities market, but low shares in office buildings, medical and welfare facilities, and factories and work
places, leaving ample scope to grow.
Sales growth rates by end user were up 5.0% YoY for office buildings, up 5.4% YoY for shops and commercial facilities, up 8.9%
YoY for medical and welfare facilities, up 4.5% YoY for factories and workshops, and up 5.6% YoY for educational facilities. Market
growth was strong for medical and welfare facilities and about 5% for others (such as office buildings and commercial facilities).
Building maintenance market (left) and sales growth rates (right): FY2017 estimates
School facilities
7.3%
Factories andwork places
9.9%

10%
Office buildings
21.8%

8%
6%
8.9%

4%
2%
Medical andwelfare facilities
11.7%

Stores andcommercial facilities
18.1%

0%

5.0%

5.4%

Office buildings

Stores andcommercial
facilities

4.5%

Medical andwelfare facilities

Factories andwork places

5.6%

School facilities

Source: Shared Research based on Yano Research Institute Ltd. materials (July 9, 2019)

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Aeon group stores by format (domestic and overseas)

GMS
Supermarket
Discount store
DIY store
Supercenter
Department store
Specialty store
Convenience store
Drugstore and pharmacy
Other retail formats
Financial services
Services
Total

FY02/12
590
1,537
105
122
29
1
4,121
3,424

FY02/13
598
1,708
152
123
26
1
4,462
3,664

FY02/14
617
1,977
353
122
26
1
4,581
3,853

418
460
1,383
12,190

562
527
1,394
13,217

59
107
166

62
115
177

Aeon Mall
Aeon Town
Total

756
641
1,519
14,440FY02/15
618
2,038
381
121
29
1
4,683
3,932
3,347
884
698
1,640
18,382

FY02/16
625
2,121
530
120
28
1
5,061
4,331
3,765
803
701
1,934
20,020FY02/17
626
2,130
566
119
28
1
4,348
5,261
3,980
856
705
2,013
20,633

FY02/18
584
2,159
568
122
28
1
4,332
5,436
4,376
907
690
2,045
21,248

FY02/19
583
2,166
587
122
27
1
4,039
5,449
4,817
1,015
640
2,070
21,516

FY02/20
613
2,229
592
120
25
1
3,900
5,350
5,127
1,147
658
2,067
21,829

137
122
259

148
130
278

161
134
295

166
139
305

174
140
314

180
140
320

172

FY02/20
102
126
22
3,353
29
5
147
295
446
4,525

Source: Shared Research based on company data

Stores by Format in China, South Korea, and ASEAN region

GMS
Supermarket
Discount store
Specialty store
Drugstore
Convenience store
Other retail formats
Financial services
Services
Total

FY02/12
54
44
2,033

FY02/13
61
81
22
2,294

FY02/14
69
95
23
2,370

FY02/15
77
101
24
2,532

FY02/16
84
115
24
2,840

FY02/17
87
173
23
2,998

FY02/18
94
150
21
3,172

FY02/19
96
150
22
3,252

37
27
236
25
2,456

55
29
279
41
2,862

61
29
302
95
3,044

42
30
339
180
3,325

44
79
339
282
3,845

52
97
342
335
4,107

54
115
324
390
4,320

39
124
276
426
4,385

Source: Shared Research based on company data

Customers
Aeon Delight generates almost 65% of its sales from the Aeon group companies, including Aeon Retail, Aeon Mall (TSE1: 8905),
and MaxValu companies. The remainder comes from non-Aeon group customers that include commercial facilities, offices,
hotels, medical facilities, schools, factories, warehouses, public facilities, and event operators.
Sales composition by customer(JPYbn)250.0

Aeon group
61.0%

64.4%

62.6%

61.4%

200.0
150.0
100.0

Aeon group ratio (RHS)

64.1%

65.8%

64.6%
195.8

192.5

187.5

179.0

162.9

160.6

160.3

Excluding Aeon group
64.4%

85.7

96.0

102.6

70%
60%
50%

134.1
88.6

62.9%
194.1

98.9

105.1

99.9

107.1

114.5

40%
30%
20%

50.0
0.0

10%
FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/200%

Source: Shared Research based on company data

Outside Japan, Aeon Delight seeks to reduce its reliance on the Aeon group to about 40%.

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Number of renovated Aeon Malls
No. of specialty stores

Renovated tenants

Renovation and expansion of existing malls in Japan (RHS)
20

4,000
3,000

14

13

15

12

11
9

2,000

20

15

8

10

8

1,000

5

0

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/200

FY02/21Plan

Source: Shared Research based on company data

Aeon Malls in China and ASEAN countries
Openings in China

35

35

Malls in China

35

Malls in ASEAN

30

30
25
20

17

15

12

10
5
0

Openings in ASEAN

35

2

3
1

6

4

25

21

20

13

15
10

6

2

1

19

4
1

2

5

2

FY02/12FY02/13FY02/14FY02/15FY02/16FY02/17FY02/18FY02/19FY02/20FY02/21
Plan

FY02/26
Plan

0

3
2

1
1

7

9

6

8

5
2

1

1

1

1

FY02/12FY02/13FY02/14FY02/15FY02/16FY02/17FY02/18FY02/19FY02/20FY02/21
Plan

FY02/26
Plan

Source: Shared Research based on company data

Overseas businesses of the Aeon group
Overseas stores: Aeon Mall
Store
count

China
ASEAN

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

2
-

3
-

4
1
1

6
3
2
1

2

3
1

5
1

9
2

12
5
3
1
1
17
6

13
6
4
1
1
19
1

17
7
4
1
2
24
4
1

19
8
4
2
2
27
2
2

21
9
5
2
2
30
2
1
1

-

1

1

2

6

1

1
5

4

Vietnam
Cambodia
Indonesia
Openings

Total
China
ASEAN
Vietnam
Cambodia
Indonesia
Total

Overseas stores: Aeon Retail
Name
ASEAN
Malaysia
Aeon Malaysia
Aeon BiG Malaysia
ThailandAeon Thailand
VietnamAeon Vietnam
Aeon Citymart
Aeon Fivimart
Cambodia
Aeon Cambodia
Indonesia
Aeon Indonesia
MyanmarAeon Orange
ASEAN total
China
Aeon Stores Hong Kong
Guangdong Aeon
Quingdao Aeon Dongtai
Aeon South China
Beijing Aeon
Aeon East China
Aeon (Hubei)
China total

FY02/21Est.

1
3

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

28
29

30
27
58

31
28
69

33
28
75
2

73
26
76
3
30
23
1
1

84
25
77
4
30
27
1
1
14
263
55
19
6
10
7
4
2
103

88
21
80
5
30
25
4
2
14
269
65
20
6
10
9
5
4
119

100
22
78
6
26
7
2
15
256
63
23
6
8
9
5
5
119

119
22
51
18
25
11
2
14
262
65
23
7
7
9
7
5
123

1

57
38
12
7
8
3

115
42
15
8
9
4

128
43
17
9
11
4

68

78

84

139
43
17
10
10
5
1
1
87

233
49
18
9
10
6
3
2
97

Source: Shared Research based on company data

Competition
Aeon Delight derives some 60–70% of its sales from the Aeon group. Within the group, Aeon Delight’s share in Aeon Retail isabout 80%. The company’s share in Aeon Mall is about 60%, while its share in MaxValu companies is between 60% and 70%.
Aeon Delight’s competitors include SECOM Co., Ltd. (TSE1: 9735) and Sohgo Security Services Co., Ltd. (TSE1: 2331) in security
services. It competes with Azbil Corporation (TSE1: 6845), Nippon Kanzai Co. Ltd. (TSE1: 9728), and Tokyu Community
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Corporation (not listed) in property management services. There are no major competitors that offer cleaning services; Aeon
Delight competes with smaller, regional cleaning operators. In construction-related work, Aeon Delight competes with Azbil inthe environmental solutions business, while in the energy-saving business, major rivals are NTT Facilities, Inc. (not listed) and
Hitachi, Ltd. (TSE1: 6501).

Barriers to entry
Property management for residential and small office buildings has relatively low barriers to entry. However, the barriers are highfor large facilities given the comprehensive services required.
Smaller residential or office building owners are less concerned about having total package of services and usually focus oncleaning or security. However, large facilities require comprehensive services such as maintenance, cleaning, and security, all-inone. Instead of hiring a contractor for each service, large building owners prefer to contract out these services to one company
that is able to provide all of these services in package. Consequently, this enables Aeon Delight to enjoy a relatively high barrierof entry in its market niche, namely servicing large retail stores and office buildings, due to its expertise in providing an all-in-one
package of services.
The company’s market share within the Aeon group is high. Being a group company, Aeon Delight is well aware of the businesspractices and facility characteristics that are common throughout the Aeon group and the risk of its competitors gaining asignificant portion of the market share is fairly slim.

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Financial Statements
Income statement
Income statement(JPYmn)FY02/12
Cons.

Sales

219,797 248,876 256,654 265,572 277,926 292,607 292,396 302,915 308,582

YoY

FY02/13Cons.

FY02/14Cons.

FY02/15Cons.

FY02/16Cons.

FY02/17Cons.

FY02/18Cons.

FY02/19Cons.

FY02/20
Cons.

28.6%

13.2%

3.1%

3.5%

4.7%

5.3%

-0.1%

3.6%

1.9%

191,166
28,631

218,648
30,227

223,40933,245231,281
34,290243,089
34,836

256,871
35,736

257,524
34,871

267,463
35,452270,01138,570

19.4%
13.0%

5.6%
12.1%

10.0%
13.0%

3.1%
12.9%

1.6%
12.5%

2.6%
12.2%

-2.4%
11.9%

1.7%
11.7%

8.8%
12.5%

SG&A expenses

14,86816,326

18,622

18,90020,28021,596

21,961

22,421

22,569YoY
SG&A ratio

24.3%
6.8%

9.8%
6.6%

14.1%
7.3%

1.5%
7.1%

7.3%
7.3%

6.5%
7.4%

1.7%
7.5%

2.1%
7.4%

0.7%
7.3%

13,762

13,901

14,622

15,39014,556

14,13912,90913,03016,001

14.4%
6.3%

1.0%
5.6%

5.2%
5.7%

5.3%
5.8%

-5.4%
5.2%

-2.9%
4.8%

-8.7%
4.4%

0.9%
4.3%

22.8%
5.2%

22
281
260
13,784-9213
221
13,892-22
163
186
14,60082
228
145
15,472-22253
275
14,534124
434
309
14,263472
608
136
13,381332
590
258
13,362-52
339
391
15,949

14.0%
6.3%

0.8%
5.6%

5.1%
5.7%

6.0%
5.8%

-6.1%
5.2%

-1.9%
4.9%

-6.2%
4.6%

-0.1%
4.4%

19.4%
5.2%

Cost of sales
Gross profit
YoY
GPM

Operating profit
YoY
OPM

Non-operating income (expenses)
Non-operating income
Non-operating expenses
Recurring profit
YoY
RPM

Extraordinary gains (losses)

953

133

1,236

695

2,040

1,224

1,475

195

659

45.7%

45.3%

46.1%

44.1%

46.0%

45.9%

42.9%

46.2%

38.3%

Net income

132
6,912

104
7,509

188
7,039

310
7,965

386
7,247

533
7,093

598
6,397

664
6,415

245
9,348

YoY
Net margin

6.4%
3.1%

8.6%
3.0%

-6.3%
2.7%

13.2%
3.0%

-9.0%
2.6%

-2.1%
2.4%

-9.8%
2.2%

0.3%
2.1%

45.7%
3.0%

Implied tax rate
Net income attrib. to non-controlling interests

Source: Shared Research based on company data
Note: The company restated prior-year results in June 2019.

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Balance sheet
Balance sheet(JPYmn)ASSETSCash and deposits
Accounts receivable
Allowance for doubtful accounts
Inventories
Deposits for consumption to subsidiaries and affiliates

Other current assets
Total current assets
Buildings
Facilities and equipment for area management

Tools, furniture, and fixtures
Land
Construction in progress
Other fixed assets
Total tangible fixed assets
Goodwill
Other
Total intangible fixed assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Investments and other assets
Total fixed assets
Total assets
LIABILITIES
Accounts payable
Short-term debt
Other
Total current liabilities
Long-term debt
Other
Total fixed liabilities
Total liabilities
Capital stock
Capital surplus
Retained earnings
Treasury stock
Other comprehensive income
Share subscription rights
Non-controlling interests
Total net assets
Working capital
Total interest-bearing debt
Net cash
Shareholders's equity
Equity ratio

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

9,707
31,240-657
1,527
27,3203,349
72,486
1,217
246
1,918
284
108
3,773
11,2491,023
12,272
2,577
406
1,517
-224
4,276
20,32292,80923,72041
9,882
33,64315968
983
34,6263,238
18,75335,285
-460
647
173
545
58,182
9,047
56
36,971
57,46461.9%

10,014
44,673-144
2,237
18,0204,523
79,323
1,089
274
2,079
282
72
3,796
10,801
1,520
12,321
2,973
288
2,196
-200
5,257
21,375
100,699
24,544
10
10,401
34,955
5
1,190
1,195
36,151
3,238
18,77040,539
-458
992
205
1,260
64,54722,36615
28,01963,082
62.6%

12,56534,448-290
2,575
32,4208,196
89,914
1,046
238
2,487
278
209
4,258
9,399
1,609
11,008
3,897
254
1,877
-199
5,829
21,096
111,010
21,876
5
12,62239,3091,556
1,556
40,865
3,238
18,81845,112
-449
1,711
165
1,547
70,145
15,147
5
44,98068,433
61.6%

15,58035,757-168
2,663
41,3268,476
103,634
1,009
211
2,516
278
345
4,361
8,452
1,867
10,320
3,768
284
2,750
-535
6,268
20,950124,584
24,934
15,771
46,6392,387
2,387
49,026
3,238
18,85050,505
-443
1,373
166
1,869
75,55813,48656,90673,52359.0%

20,38634,328-360
2,840
37,362
9,634
104,190
1,629
190
2,651
1,978
610
7,061
7,654
2,352
10,006
4,463
310
3,896
-494
8,176
25,244
129,434
28,457
17,37745,834
3,925
3,925
49,7603,238
18,86255,099
-441
525
221
2,168
79,674
8,711
57,74877,28559.7%

31,71735,360-202
3,218
31,713
9,292
111,098
1,631
175
3,307
1,975
1,974
9,064
6,813
1,989
8,802
4,546
551
4,342
-536
8,904
26,772
137,870
25,114271
21,66647,051
293
5,921
6,214
53,266
3,238
18,94959,355
-436
799
263
2,434
84,604
13,464564
62,866
81,90759.4%

39,53635,739-130
2,623
32,0008,543
118,311
1,582
4,892
1,975
1,591
10,041
6,113
1,699
7,813
5,334
330
3,458
-610
8,512
26,367
144,678
25,820225
18,54149,0606,474
6,474
55,535
3,238
19,01962,756
-430
1,484
303
2,773
89,143
12,542
225
71,311
86,06759.5%

44,23340,089-167
2,211
16,0006,405
108,771
1,479
5,064
2,032
1,585
10,161
6,865
1,338
8,103
4,256
412
3,264
-355
7,578
25,842
134,61425,967394
20,13751,408
15
7,652
7,667
59,075
3,238
13,88865,910-10,327
466
299
2,062
75,53916,333409
59,82473,17854.4%

62,35542,612
-242
1,822
5,815
112,362
1,458
4,846
2,032
1,334
9,671
5,975
1,209
7,185
3,623
1,763
2,347
-36
7,698
24,554
136,917
23,388252
20,41048,864
11
6,756
6,767
55,631
3,238
13,88072,063-10,208
-86
186
2,213
81,286
21,046263
62,09278,887
57.6%

Source: Shared Research based on company data
Note: The company restated prior-year results in June 2019.

AssetsIn order of value, the company’s assets are cash and deposits (JPY62.4bn, FY02/20), accounts receivable (JPY42.6bn), tangible
fixed assets (JPY9.7bn), and intangible fixed assets (JPY7.2bn). The aggregate of cash and deposits and deposits for consumption
from associates is over JPY60.0bn, but interest-bearing debt is just JPY300mn, for a cash-rich balance sheet. Tangible fixed assets
and intangible fixed assets are small as the company’s business structure does not require a large balance sheet. In FY02/20 thecompany ended its policy of leaving deposits with Aeon, from a cash governance perspective.
Majority of its investment securities are with Aeon Mall (TSE1: 8905), Aeon Kyushu (TSE JASDAQ: 2653), Aeon Fantasy (TSE1:4343), and MaxValu companies.

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Shareholders’ equity
At end-FY02/20, the equity ratio was 57.6%. Although it declined to 54.4% at end-FY02/19 following the restatement of prioryear earnings accompanying the Kajitaku accounting fraud, it subsequently recovered.

Profitability and financial ratios
Profit margins(JPYmn)Gross profit
GPM
Operating profit
OPM
EBITDAEBITDA margin
Net margin
Financial ratios
ROA (RP-based)
ROE
Total asset turnoverW orking capital
Current ratio
Quick ratio
OCF / Current liabilities
OCF / Total liabilities
Cash conversion cycle (days)
Change in working capital

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

FY02/20Cons.

28,631
13.0%
13,762
6.3%
16,1077.3%
3.1%

30,22712.1%
13,901
5.6%
16,1386.5%
3.0%

33,245
13.0%
14,622
5.7%
17,0546.6%
2.7%

34,29012.9%
15,3905.8%
17,856
6.7%
3.0%

34,836
12.5%
14,556
5.2%
17,0146.1%
2.6%

35,73612.2%
14,1394.8%
16,9285.8%
2.4%

34,871
11.9%
12,9094.4%
16,0385.5%
2.2%

35,452
11.7%
13,030
4.3%
16,3915.4%
2.1%

38,57012.5%
16,001
5.2%
19,168
6.2%
3.0%

15.5%
12.5%
2.5
9,047
215.5%
201.0%
30.0%
27.8%
8.2
1,749

14.4%
12.5%
2.6
22,366226.9%
207.6%-12.7%-12.1%
18.5
13,319

13.8%
10.7%
2.4
15,147228.7%
201.3%
57.5%
52.3%
22.3
-7,219

13.1%
11.2%
2.3
13,486222.2%
198.3%
40.1%
35.2%
15.4
-1,661

11.4%
9.6%
2.2
8,711
227.3%
200.1%
22.3%
20.7%
10.1
-4,775

10.7%
8.9%
2.2
13,464236.1%
209.5%
25.2%
22.0%
9.7
4,753

9.5%
7.6%
2.1
12,542241.2%
218.4%
28.2%
24.4%
12.4
-922

9.6%
8.1%
2.2
16,333211.6%
194.8%
24.6%
20.9%
13.6
3,791

11.7%
12.3%
2.3
21,046229.9%
214.3%
14.7%
13.2%
18.3
4,713

Source: Shared Research based on company data

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Aeon Delight / 9787
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Statement of cash flows
Cash flow statement(JPYmn)Cash flows from operating activities (1)Pre-tax profit
Depreciation
Impairment losses
Amortization of goodwill
Change in working capital
Income taxes
Other
Cash flows from investing activities (2)Purchase of tangible and intangible fixed assets
Proceeds from sale of tangible and intangible fixed assets
Acquisition of shares in subsidiaries affecting the scope of consolidation

Payments of deposit for consumption to subsidiaries and affiliates
Collection of deposit for consumption from subsidiaries and affiliates

Other
Free cash flow (1+2)
Cash flows from financing activities
Net change in short-term borrowings
Net change in long-term borrowings
Payment of dividends
Acquisition of treasury stock
Acquisition of shares in subsidiaries not affecting the scope of consolidation

Other
Other
Change in cash and cash equivalent
Cash and cash equivalent (year-end)

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/20

Cons.
9,639
12,9771,265
1,080-1,187-5,404908

Cons.
-4,35813,9201,130
1,107-13,728-6,578-209

Cons.
21,35913,420
1,294
678
1,138
10,386-6,114557

Cons.
17,234
14,807
1,341
578
770
2,008
-6,615
4,345

Cons.
10,303
16,526
1,699
250
759
-552
-6,336-2,043

Cons.
11,70314,089
2,069
122
720
449
-6,602856

Cons.
13,56812,247
2,414
39
715
1,035
-6,1153,233

Cons.
12,373
13,166
2,602
123
759
-53
-5,188
964

Cons.
7,371
15,548
2,352
175
815
-4,745-6,506-268-10,051-1,18427-1,266-150,420
142,020
772
-412

7,086
-1,607147-694-170,520
180,020-260
2,728-16,632-1,99941-388-212,400
198,000
114
4,727-11,365-1,90318-220,511
211,605-574
5,869-3,255-2,414116-4,771-218,798
222,762
-150
7,048

2,233
-4,11324-229,151
234,800
673
13,936-2,666-3,22814-250,400
250,113835
10,902

12,256-2,05915-1,516-284,000
300,000-184
24,62913,838-2,361-192,500
208,500
199
21,209-2,722-2,257-2,475-2,594-2,821-2,400-3,264-19,686-3,392-2-475-2,205
13
-53

-25
-6
-2,2562
28-2,46457-68-2,57337-58-2,676
14
-159

219
324
-2,842
28
-57
-72

-28
90
-2,996
41
-21
-350

179
-2
-3,259-9,906-6,458
-240

-143
-3
-3,195109-160-3-3,137
9,179

26
497
9,676

99
2,351
12,028172
3,447
15,476-229
3,997
19,473-6
11,53031,00480
7,718
38,722-228
4,715
43,437-98
17,71961,151

Source: Shared Research based on company data
Note: The company restated prior-year results in June 2019.

Cash flows from operating activities
Cash flows from operating activities for the company are mainly from net income before tax, depreciation, goodwill amortization,and changes to working capital. Fluctuations are comparatively small as the company runs a large proportion of recurring
revenue type businesses.

Cash flows from investing activities
Annual spending on acquiring tangible and intangible fixed assets is about JPY3.0bn, small compared to operating cash flow.
Because the company is relatively aggressive in acquisitions, in some years there is a significant increase in share purchases. On
the surface, cash flows from investing activities mainly vary with funds deposited at Aeon.

Cash flows from financing activities
The main element in the company’s financing cash flows is dividend payments. There were significant outflows in FY02/19
including JPY9.9bn to buy back the company’s shares and additional amounts to make consolidated subsidiaries fully owned.
Cash conversion cycle (days)
Accounts receivable turnoverDays in accounts receivable
Inventory turnoverDays in inventory
Accounts payable turnoverDays in accounts payable
Cash conversion cycle (days)

FY02/12
7.4
49.4
127.3
2.9
8.3
44.1
8.2

FY02/13
6.6
55.7
116.2
3.1
9.1
40.3
18.5

FY02/14
6.5
56.3
92.9
3.9
9.6
37.9
22.3

FY02/15
7.6
48.2
88.3
4.1
9.9
36.9
15.4

FY02/16
7.9
46.0
88.3
4.1
9.1
40.1
10.1

FY02/17
8.4
43.5
84.8
4.3
9.6
38.1
9.7

FY02/18
8.2
44.4
88.2
4.1
10.1
36.1
12.4

FY02/19
8.0
45.7
110.7
3.3
10.3
35.3
13.6

FY02/20
7.5
48.9
133.9
2.7
10.9
33.4
18.3

Source: Shared Research based on company data

Accounts receivable are mainly from Aeon group companies, while accounts payable are with various suppliers, such as soft drink
beverage suppliers.

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ROE and dividends(JPYmn)ROE
Net margin
Total asset turnover
Financial leverage (equity multiplier)
ROA (RP-based)
ROIC
NOPAT
Interest-bearing debt＋Net assets
ROIC (before tax)
OPM
Sales / Invested capital

FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/20
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
12.5%
12.5%
10.7%
11.2%
9.6%
8.9%
7.6%
12.3%
3.1%
3.0%
2.7%
3.0%
2.6%
2.4%
2.2%
3.0%
2.48
2.57
2.42
2.25
2.19
2.19
2.07
2.27
1.61
1.61
1.61
1.66
1.68
1.68
1.68
1.79
15.5%
14.4%
13.8%
13.1%
11.4%
10.7%
9.5%
11.7%
14.7%
13.4%
13.5%
13.1%
12.1%
11.5%
10.2%
14.1%
8,162
8,245
9,064
9,540
9,368
9,464
8,925
11,10155,59061,40067,35672,854
77,61682,421
87,26878,749
24.8%
22.6%
21.7%
21.1%
18.8%
17.2%
14.8%
20.3%
6.3%
5.6%
5.7%
5.8%
5.2%
4.8%
4.4%
5.2%
3.95
4.05
3.81
3.65
3.58
3.55
3.35
3.92

ROE
20%

15%

10%

ROE
14.7%

12.5%

13.5%

13.4%

13.1%

12.5%

ROA (RP-based)

ROIC

14.1%
12.1%

11.5%

10.2%

10.7%

9.6%

8.9%

FY02/12

FY02/13

FY02/14

ROE

30%

12.3%

7.6%

8.1%

FY02/18

FY02/19

5%

0%

10.9%

11.2%

FY02/15
Net margin

FY02/16

FY02/17

Total asset turnover (RHS)

FY02/20

Financial leverage (RHS)

3

25%
20%

1.6

1.6

12.5%

12.5%

1.6

1.7

10.7%

11.2%

1.7

1.7

9.6%

8.9%

1.7

1.8

1.8

2

12.3%

1

3.0%

0

15%
10%
5%
0%

3.1%

FY02/12

3.0%

2.7%

3.0%

2.6%

FY02/13

FY02/14

FY02/15

FY02/16

2.4%

FY02/17

7.6%
2.2%

FY02/188.1%
2.1%

FY02/19

FY02/20

ROIC
30%

ROIC（税引前）

営業利益率

9

投下資本回転率

8

25%

7
6

20%
15%

4.0

4.1

3.8

3.6

3.6

3.6

3.4

3.7

5

3.9

4
3

10%
5%
0%

2
6.3%

FY02/12

5.6%

5.7%

5.8%

5.2%

4.8%

4.4%

4.3%

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19(JPYbn)Net assets

100
80

13.8

13.9

14.6

Interest-bearing debt
15.4

(JPYbn)Operating profit (RHS)

14.1

12.9

20
16

13.0

12

60
40
58.2

64.5

70.1

75.6

79.7

84.6

89.1
75.5

81.3

8
4

20
0

0

FY02/20

16.0
14.6

1

5.2%

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/19

FY02/200

Source: Shared Research based on company data

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Dividends
FY02/12 FY02/13 FY02/14 FY02/15 FY02/16 FY02/17 FY02/18 FY02/19 FY02/20
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.

(JPYmn)Total dividends
Total treasury stock acquired
Total returns to shareholders

a)
b)
d)

2,097
6
2,103
6,912

2,413
1
2,414
7,509

2,519
1
2,520
7,039

2,625
1
2,626
7,965

2,731
2,731
7,247

2,890
2,890
7,093

3,207
1
3,208
6,397

3,114
9,906
13,020
6,415

3,246
3,246
9,348

a) / d)c) / d)

30.3%
30.4%

32.1%
32.1%

35.8%
35.8%

33.0%
33.0%

37.7%
37.7%

40.7%
40.7%

50.1% 48.5%
50.1% 203.0%

34.7%
34.7%

57,46463,082

68,43373,52377,285

81,90786,06773,17878,887

55,101

60,27365,75870,97875,404

79,596

83,987

79,62376,033

57,46463,082

68,43373,52377,285

81,90786,06773,17878,887

131.8
40.0
3.8%

143.2
46.0
4.0%

134.2
48.0
3.8%

151.7
50.0
3.7%

138.0
52.0
3.6%

135.0
55.0
3.6%

121.7
61.0
3.8%

122.9
63.0
3.9%

187.2
65.0
4.3%

c) = a) + b)

Net income attributable to parent company shareholders

Dividend payout ratio
Total shareholder return ratio
Net assets available to common shareholders
Average of beginning and end of yearf)

Before deducting assets available toholders of Class A preferred shares
EPS
Dividend per share
Dividend on equity ratio

(JPY)
(JPY)
a) / f)250%

Payout ratio

Total shareholder return ratio5%

DOE (RHS)

200%
150%
4%
100%
50%
0%

FY02/12

FY02/13

FY02/14

FY02/15

FY02/16

FY02/17

FY02/18

FY02/193%

FY02/20

Source: Shared Research based on company data

Shareholder returns
The company said that it pays dividends with a standard payout ratio of 30% based on its basic stance on capital policy. In
FY02/19, it spent JPY9.9bn to buy back its own shares. It plans to adopt a dividend payout ratio of 35% in FY02/21.

Aeon Delight’s stance on capital policy
1.

The company will use proactive investments to achieve sustainable growth. It will work to boost shareholder value in thelonger term and increase returns to shareholders as the company grows. Further, the company views return on equity (ROE)
as an important benchmark of capital efficiency, and is currently aiming at a level of 12%.

2.

The company will place importance on the balance in the distribution of annual profit between growth investments andshareholder returns and has a standard stable dividend payout ratio of 30%.

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Other information
History
Date

Description

April
February
September

1973
1976
2006

November
October
April
September
April
May
December

2007
2008
2009
2010
2011

March
August2012

October
October
December
DecemberJanuary
July
November

2013

December
March
December

2015
2016

March
April

2017

June
April
May
November
December

2018

Nichii Japan Development Co., Ltd. established in Higashi, Osaka
Changed name to Japan Maintenance Co., Ltd., following absorption-type merger with Nichii Maintenance Co., Ltd.
Following absorption-type merger with Aeon Techno Service Co., Ltd., Japan Maintenance changed name to Aeon
Delight Co., Ltd.
Wholly owned subsidiary Aeon Delight (Beijing) Co., Ltd. (now Aeon Delight (China) Co., Ltd.) established
Acquires 40% of shares in Kankyouseibi Co., Ltd. (Utsunomiya, Tochigi) and made it affiliate
Acquires 40% of shares in Do Service Co., Ltd. (Nishinari, Osaka) and made it affiliate
Absorption-type merger with Certo Corp., supplier of vending services to business supply companies
Acquires 90% of shares in Kajitaku Inc. (Chuo, Tokyo) and made it subsidiary
Acquired additional shares in A to Z Service Co., Ltd. (Shinjuku, Tokyo) and made it subsidiary
With 70% stake, established joint venture FMS Solution Co., Ltd. (Mihama, Chiba) with Vinculum Japan Corporation(now VINX Corp.)
Established wholly owned subsidiary, Aeon Delight (Malaysia) Sdn. Bhd.
Aeon Delight (Beijing) Co., Ltd. (now Aeon Delight (China) Co., Ltd.) and Tianjin Teda Co., Ltd. established joint
venture, Aeon Delight (Tianjin) Co., Ltd.
Acquired 53.7% of shares in General Services, Inc. (Chiyoda, Tokyo) and made it subsidiary
Acquired 54.9% of shares in Aeon Compass Co., Ltd. (Mihama, Chiba) via third-party allocation and made it subsidiary
Established A-Life Support Co., Ltd. (Chuo, Tokyo) a 85.8% owned joint venture with Familynet Japan Corporation
Acquired 51% of shares in Aeon Delight Sufang (Suzhou) Comprehensive Facility Management Service Co., Ltd. (nowAeon Delight (Jiangsu)) and made it subsidiary
Established wholly owned subsidiary Aeon Delight (Vietnam) Co., Ltd.
Acquired 51% of shares in W uhan Xiaozhu Comprehensive Facility Management Service Co., Ltd. and made it subsidiary
Established Kikugawa-Ishiyama Solar Co., Ltd. (Kikugawa, Shizuoka), a 37% owned joint venture with Recycle One Co.,
Ltd. (now Renova, Inc.) and one other partner; Kikugawa-Horinouchiya Solar Co., Ltd., a 37% owned joint venturewith Recycle One and two other partners
Acquired shares in Hakuseisha Co., Ltd. (Chiyoda, Tokyo) via tender offer and made it subsidiary
Acquired remaining VINX Corp. stake in FMS Solution Co., Ltd. via tender offer and made it wholly owned subsidiary
Acquired remaining Familynet Japan Corporation stake in A-Life Support Co., Ltd. in September 2016, and conductedabsorption-type merger
Established wholly owned subsidiary Aeon Delight (Shanghai) Management Co., Ltd.
Wuhan Xiaozhu Comprehensive Facility Management Service Co., Ltd. established wholly owned subsidiary Wuhan
Xiaozhu Hotel Management Service Co., Ltd.
Absorption-type mergers with FMS Solution Co., Ltd. and Aeon Delight Seres Co., Ltd.
Established Aeon Delight DeepBlue Technology (Shanghai) Co., Ltd., a 65% owned joint venture with DeepBlue
Technology Co., Ltd.
Acquired 100% of shares in U-COM Co., Ltd. (Minato, Tokyo) and made it subsidiary
Acquired additional shares in Aeon Delight (Jiangsu) Comprehensive Facility Management Service Co., Ltd. and Wuhan
Xiaozhu Comprehensive Facility Management Service Co., Ltd., and made them wholly owned subsidiaries
Acquired 90% of shares in PT Sinar Jernih Sarana, and made it subsidiary

Source: Shared Research based on company data

Major shareholders
Top shareholders
Aeon Co., Ltd.
Aeon Retail Co., Ltd.
Goldman Sachs & Co. Regular Account(Standing proxy: Goldman Sachs Securities Co., Ltd.)The Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust account)
Aeon Delight Business Partners Stockholding Association
ORIGIN TOSHU Co., Ltd.
Northern Trust Company AVFC Re Fidelity Funds(Standing proxy: The Hongkong and Shanghai Banking Corporation, Limited,Tokyo Branch, Custody Department)
State Street Bank and Trust Client Omnibus Account OM02 505002(Standing proxy: Mizuho Bank, Ltd. Settlement Department)
Aeon Delight Employees Shareholding Association

Shares held ('000)
14,35011,5582,264

Shareholding ratio
28.7%
23.1%
4.5%

1,575
1,356
1,025
854
783

3.2%
2.7%
2.1%
1.7%
1.6%

631

1.3%

480

1.0%

Source: Shared Research based on company data
(As of end-August, 2019)

Aeon group companies own about 60% of the company.

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Corporate governance
Organizational formand capital structure
Directors

Audit & Supervisory
Board

General shareholders meeting
Voting platform
Investor relations

Other

Organization
Company with Audit & Supervisory Board
Controlling shareholders
None
Parent company ticker
Aeon Co., Ltd. 8267
Number of directors (per Articles of Incorporation)20
Directors' term of office (per Articles of Incorporation)
1 yearNumber of directors
6Outside directors
3
Independent outside officers
3
Existence of Audit & Supervisory Board
Y
Number of members of Audit & Supervisory Board (per Articles of Incorporation)
5
Number of members of Audit & Supervisory Board
4
Outside members
2
Independent outside officers
1
Participation to electronic voting platformY
Preparation of convening notices in English
Y Disclosed online
Corporate disclosure policy
Y Disclosed online
Regular briefings for individual investors
Y
Briefings by representative directors
Y
Regular briefings for analysts and institutional investors
Y
Online access to IR documents
Y Disclosed online
Dedicated IR section and/or staff
Y
Foreign shareholding ratio (as of July 2019)
Between 20% and 30%
Independent officers
4Implementation of measures regarding director incentives
Stock option plan in place
Disclosure of individual director's compensation
None
Policy to determine amount and calculation method of remuneration
Y
Corporate takeover defenses
None

Source: Shared Research based on company data

Top management
President and CEO: Kazumasa Hamada (born in 1964) joined Jusco Co., Ltd. (currently Aeon Co., Ltd.) in 1987. Appointed ashead of management planning department, Posful Corp. (currently Aeon Hokkaido Corp.) in 2006 and executive officer in 2007;
regional office manager of Hokuriku, Shinetsu Regional Company in February 2011 and executive officer in March that year. In
2013 he was appointed director and control & accounting officer of Aeon Co., Ltd. In 2015, he was named regional officemanager of Kitakanto and Niigata Company of Aeon Retail Co., Ltd. and director and senior managing officer of Aeon Retail. In
2017 he became senior managing executive officer at Aeon Retail. In March 2018 he was dispatched to Aeon Delight Co., Ltd. as
an advisor, before being appointed to his current position as president and CEO of Aeon Delight in May 2018. In December
2018 he was appointed representative commissioner at PT Sinar Jernih Sarana. In June 2019 he was appointed chief
administrative officer, head of business administration division, and head of finance division of Aeon Delight.

Employees
Aeon Delight had 20,877 employees and an average of 7,181 temporary employees on a consolidated basis as of end-FY02/19.
At the parent level, there were 4,050 employees and 2,634 temporary employees. The average age, average length of
employment, and average annual salary on a parent basis were as follows:▷

Average age: 46.0 years▷

Average length of employment: 11.0 years▷

Average annual salary: JPY4.6mn

Investor relations
Aeon Delight holds earnings briefings twice a year (following half-year and full-year business results).

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By the way
Corporate Social Responsibility (CSR) Activities
Aeon Delight is pursuing corporate social responsibility (CSR) activities by strengthening its efforts to protect the environment
with a management principle of creating “environmental value” for clients.
The following are examples of the company’s environmental initiatives:

Promotion of energy-saving lighting equipment
The company is promoting energy-saving lighting devices, such as light emitting diode (LED) lamps, that significantly reduce
electricity consumption. The company seeks to help clients cut carbon dioxide emissions and reduce expenses by selecting themost suitable source of lighting depending on the situation and intended use, such as lighting for room interior or a parking
space, and for illuminating a billboard.

Proposal for environmentally friendly packaging
The company proposes a variety of packaging materials, including biomass materials obtained during the growth process ofplants that do not increase carbon dioxide when burned, as well as water-based gravure printing that has low environmental
impact.

Introduction of environmentally friendly vending machines
The company introduced environmentally friendly vending machines that can reduce electricity consumption by as much as 45%
a year with the use of heat pumps and LED lighting. The company unveiled heat-pump vending machines in 2008, and thoseequipped with LED lighting in 2011.

Participation in Aeon 1% Club
Aeon 1% Club supports projects to protect the environment, boost international cultural and human exchange, promote
regional cultural and social activities, and donate to welfare projects. It is an initiative under which group companies contribute
1% of their pretax profits so that these activities can be maintained regardless of the companies’ business performances.

Tree planting through Aeon Environmental Foundation
The company participated in a tree-planting event in Beijing, China in fiscal year 2010, took part in a similar project in Jakarta,
Indonesia in fiscal year 2011 and 2012, respectively. For the tree planting event in Jakarta held during fiscal year 2012, thecompany sponsored participation of endorsing companies, in addition to having its employees from Japan volunteering for the
event“Clean Day” on the 11th Day of Each Month
The company designated the 11th day of each month as “Clean Day,” where employees clean streets around their workplaces
before the start of the working day.
The company also conducts a number of social contributions as part of its CSR activities:

Volunteering at social welfare facilities
The company conducts volunteer activities at nationwide welfare facilities once a year, using the system of the Aeon Social
Welfare Foundation.

Shopping basket cleaning outsourced to vocational aid facilities
The company outsources cleaning of its shopping baskets to vocational aid centers. Shopping baskets used at its stores are sent
to six “washing centers” within the vocational facilities, where the baskets are washed and applied with anti-bacterial coating.

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Construction of a school in Laos (completed in June 2008)
The Aeon Delight group conducted fund raising activities, and through the Aeon 1% Club and the Japan Committee for UNICEF,
constructed and donated a school in Laos named “Aeon Good-Job School.”
In addition, Aeon Delight’s logo is a mascot named “Gu Jo-Kun,” derived from “a good job!” and symbolizes that the company
wishes to make all people happy.

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Historical financial statements and news
Historical financial statements
Q3 FY02/20 results (out January 10, 2020)
Summary▷

For the nine-month period through Q3 FY02/20, Aeon Delight reported consolidated sales of JPY232.6bn (+2.6% YoY),
operating profit of JPY12.1bn (+35.8% YoY), and net income of JPY7.4bn (+89.3% YoY). Results were in line with thecompany’s initial full-year forecast (announced on June 28, 2019); sales of JPY315.0bn and operating profit of JPY18.0bn. At
subsidiary Kajitaku, which had previously engaged in improper accounting practices, estimates put sales at JPY3.7bn (+4.3%
YoY) and operating losses at JPY940mn (versus loss of JPY3.8bn in cumulative Q3 FY02/19). Without Kajitaku, consolidated
sales for the nine-month period were up 2.6% YoY and operating profit up 2.5% YoY. Results by segment were mixed, with the
Security Services segment, Cleaning Services segment, and Vending Machine Services segment reporting higher earnings andthe Materials and Supplies Sourcing Services segment, Facilities Management segment, and Construction Work segment
reporting lower earnings. With results for the first nine months of FY02/20 leaving Aeon Delight with 73.9% of its full-yeartarget for consolidated sales (versus 74.9% in cumulative Q3 FY02/19), 67.2% of its full-year target for operating profit (versus
68.4%), and 68.2% of its full-year for net income (versus 60.7%), the company made no changes to its initial forecast for thefull year and continues to target consolidated sales of JPY315.0bn (+4.0% YoY), operating profit of JPY18.0bn (+38.1% YoY),
and net income of JPY10.8bn (+68.4% YoY).

▷

The Facilities Management segment posted sales of JPY44.3bn (+4.0% YoY) and a segment profit of JPY4.0bn (-5.0% YoY). The
top-line gains reflected the addition of new clients and the success of efforts to win orders for facilities maintenance andupgrades (such as the replacement of aging elevators and escalators) through proactive proposal marketing to facility owners
in the name of improving the safety of facility users. The top-line gains notwithstanding, segment earnings for the nine-month
period finished down as margins were squeezed by an even faster increase in purchasing costs. Also during the period, thecompany rolled out its self-developed integrated facilities management model, making its first installation of the new open
systems-based model in the Aeon Fujiidera Shopping Center.

▷

The Security Services segment posted sales of JPY33.3bn (+0.1% YoY) and a segment profit of JPY2.2bn (+4.2% YoY). Even as
tight labor market conditions continued to push up labor costs, the company managed to improve margins with the help ofhigher unit prices on contracts and ongoing efforts to automate systems to handle tasks such as facility entrance/exit
management and store closings.

▷

The Cleaning Services segment posted sales of JPY46.5bn (+8.0% YoY) and a segment profit of JPY5.3bn (+5.8% YoY). The topline gains reflected contributions from new customers and PT Sinar Jernih Sarana (SJS), the Indonesian cleaning services
company acquired in December 2018. Also during the period, the company continued its roll out self-guided floor cleaning
robots at the facilities it cleans and also continued selling the labor-saving robots to others.

▷

The Construction Work segment posted sales of JPY32.0bn (+3.4% YoY) and a segment profit of JPY2.8bn (-1.3% YoY). The
top-line gains reflected the move to an operating structure capable of providing more localized services and a rising order flowin response to growing demand for renovation work in all regions. The drop in segment earnings was attributed to lagging
efforts on the part of consolidated subsidiaries to address demand for construction work and lower margins on repair projects
undertaken in the wake of the natural disasters that hit Japan in FY02/19.

▷

Materials and Supplies Sourcing Services segment posted sales of JPY38.6bn (-0.6% YoY) and a segment profit of JPY1.9bn (8.9% YoY). Efforts to expand orders for Aeon’s private brand packaging materials (TOPVALU) notwithstanding, overall sales at

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the segment finished the nine-month period down. Segment earnings also finished short of year-ago levels, this despite cuts inlogistics and other expenses as part of an overall effort to improve profitability.

▷

The Vending Machine Services segment posted sales of JPY23.8bn (-1.0% YoY) and a segment profit of JPY948mn (+24.1%
YoY). After declining in Q1, segment sales and earnings have risen in both Q2 and Q3 as the company moved to install more of
its own multi-brand vending machines (which offer products from a number of different brands) and continued reassessing
locations and relocating vending machines as needed to areas conducive to higher sales. The jump in segment profit reflects a
JPY232mn boost from changes in accounting assumptions for the useful life of vending machines following a comprehensive
review of past records for replacement periods and physical longevity.

▷

The Support Services segment posted sales of JPY14.2bn (+1.2% YoY) and a segment profit of JPY441mn (versus loss of
JPY2.3bn) in cumulative Q3 FY02/19. Outside of Kajitaku, the company worked to expand its offering of B2B outsourcing
services to meet the needs of client companies in peripheral areas such as business travel management and operations
management for meetings, incentive tours, conventions/conferences, exhibitions.

▷

Overseas subsidiaries reported combined sales of approximately JP13.9bn (versus JPY10.9bn during the same nine-month
period the previous year) and operating profit of roughly JPY1.1bn (versus JPY700mn). In China, the company switched thefocus of its facilities management business from the number of facilities under management to floor space under management,
and set its sights, geographically speaking, on servicing the areas of China where Aeon group stores are located. In Indonesia,
the company began providing its comprehensive facilities management service (includes both facilities management andsecurity services) to the Aeon group’s number one and number two mall in October 2019.

▷

With regard to Kajitaku, the company reported that it would be spinning off the housework support business of this wholly
owned subsidiary but would continue to operate the business under a newly established entity. The company has suspended
all new sales and installations of equipment in order to focus on improving fulfillment of existing contracts. Because the market
for housework support services still holds promise, the company intends to continue pursuing business in this field; plans callfor moving to the next growth stage by better focusing management resources and firmly establishing core competencies.

Results by segment
Facilities Management
Segment sales were JPY14.6bn (+1.3% YoY) and operating profit JPY1.3bn (-13.1% YoY). While sales remained on an uptrend
due to new orders, operating profit fell YoY. The company said it has been able to curtail personnel expense growth by boostingproductivity per employee in directly managed facilities, but it has been unable to make sufficient productivity gains insubcontracted facilities so that outsourcing (procurement) costs have increased, leading to lower profit.
Aeon Delight is working to improve productivity at facilities where it has outsourced management. Up until now, many of thesehave been dispersed over a wide area for some reasons in the past. The company is working toward geographic consolidation ofoutsourced facilities (such as bulk orders for those in the vicinity of specific Aeon malls) to improve productivity, effectively
curtailing outsourcing costs. The company aims to reduce the number of money-losing facilities by negotiating to review
contract prices for facilities management in areas where it is difficult to consolidate and boost productivity.
The company installed its open building automation system in an Aeon group mall for the first time at the Aeon Fujiidera
Shopping Center which opened in September 2019. In the past, equipment and devices placed in facilities (such as lights, airconditioning units, electronic security devices, and elevators) were designed separately by various manufacturers and had to becontrolled individually. This meant facilities had to have a central control room and emergency center managed by several onsite employees. The open systems architecture that Aeon Delight provides collects data directly from different manufacturers’
equipment and devices and connects them via a network. Integrated control enables energy savings, efficient facilities
management, and remote operations. The company’s system also uses mobile devices to coordinate with security and cleaning
services, enabling cross-business collaboration and boosting efficiency.
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Advantages to the facilities management outsourcer (Aeon Delight customer) include the ability to constantly check on facilities
remotely (using smartphone or other devices) and reduce energy consumption. Aeon Delight (managing facilities undercontract) can reduce the number of on-site personnel, substituting partly with staff who can rotate around multiple locations
within a region, and thereby cutting personnel expenses. The company thinks it can thus boost profit while offering competitive
pricing and increase the number of contracts (boost market share) in the medium term. Aeon Delight wants to adopt open
systems architecture in GMS renovation projects in FY02/21.
Aeon Delight will lose some existing contracts with the planned closure of some Aeon group stores in FY02/21. The company
aims at steady profit growth by growing orders from outside the group to drive sales, as well as trimming its outsourcing costs.

Security Services
Segment sales were JPY11.1bn (-0.9% YoY) and operating profit JPY795mn (+11.0% YoY). The company said progress waslargely as expected. Aeon Delight is reviewing its customer contracts against a backdrop of rising personnel expenses and thelabor shortage. The company is boosting profitability through efficiency gains such as collaborating with SECOM’s regional
security services and effective use of automated security to reduce the number of personnel on-site at facilities undermanagement (in general, reducing the number of personnel stationed leads to lower contract prices). Furthermore, albeit small
in impact, the company won contracts for transport security services in Oita and Shizuoka for the 2019 Rugby World Cup in
Japan, helping to improve margins in event security services.

Cleaning Services
Segment sales were JPY15.6bn (+7.9% YoY) and operating profit JPY1.8bn (+5.1 YoY). There was a net contribution from thecompany’s Indonesian cleaning service company SJS (consolidated subsidiary since December 2018: expected annual
contribution of about JPY3.0bn in sales and JPY100mn in operating profit). Also driving growth were new contracts outside the
Aeon group for US military bases, residential property, and shared offices.
SJS won a cleaning contract for its second Aeon mall starting in October 2019. Combined with this, it also won contracts forfacilities maintenance and security services, leveraging business expertise from Japan. At the time of its acquisition, SJS was acleaning company, but is evolving into a comprehensive facilities management company. Going forward, it is likely to contributeto areas outside the Cleaning Services segment, although the contribution will be small.

Construction Work
Segment sales were JPY8.9bn (-3.9% YoY) and operating profit JPY669mn (-22.7% YoY). Natural disaster repair work boosted
earnings in Q3 FY02/19, but there were few such orders in Q3 FY02/20, leading to the fall in sales and profits. However thecompany appears to have a large number of non-disaster related projects, so prospects are for earnings to remain solid in the
short term.
In Aeon group related work, Aeon Mall is aggressively renovating its existing shopping centers so the company appears to haveits eye on winning renovation orders for properties where it cannot participate during new construction. Outside the group, thecompany said that changing the organization to become closer to local communities has sped up management decision-making
and it is winning an increasing number of regional orders. Although Q3 sales fell at A to Z Service, a company subsidiary since2011, it said this was due to issues with the timing of customer orders and that project volume had not decreased. Despite falls insales and profit in Q3, the segment has a high likelihood of growth in both going into FY02/21.

Materials and Supplies Sourcing Services
Segment sales were JPY12.6bn (-1.0% YoY) and operating profit JPY591mn (-7.8% YoY). The main factor in lower sales was
moves by some major customers to procure some products in-house. The company is underpinning sales by expanding contract
supplies of packaging materials for Aeon’s private brand, TOPVALU, and growing procurement for the group’s supermarkets. The
company aims to underpin earnings by increasing the volume of environmentally friendly products it handles through joint
development with outside organizations and streamlining distribution.
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Vending Machine Services
Segment sales were JPY7.7bn (+0.9% YoY) and operating profit JPY243mn (+5.2% YoY). Lower depreciation, following acomprehensive review of service life taking into account historical replacement periods and physical life, boosted Q3 operating
profit by JPY78mn. Aeon Delight aims to boost profitability per machine via three initiatives: 1) installing more of its own
multibrand vending machines which feature a mix of brands from several companies; 2) reviewing vending machine locations;and 3) using digital signage in collaboration with beverage companies.

Support Services
Segment sales were JPY4.6bn (+5.1% YoY) and operating profit JPY187mn (JPY778mn loss in Q3 FY02/19). Lower losses from
Kajitaku were the main driver of improved earnings. Shared Research estimates that operating profit was down slightly YoY
excluding Kajitaku.
At Kajitaku the freeze on new machine orders in the storefront promotion business, the root cause of its problems, remains inplace. Shared Research understands that the company is considering a number of options for the business within the scope ofexisting provisions, including divestment of the business.
Aeon Delight was unable to promote the household support services sufficiently in light of problems at the storefront promotion
business, which temporarily stymied sales growth, but the company said that orders have been recovering recently. Aeon
Delight had expected the household support services business to turn profitable in FY02/20, but this looks difficult, given thatsales have fallen short of targets. The company hopes to move this business into the black in FY02/21 by mobilizing its in-house
resources effectively (for example it will redeploy personnel from the cleaning business or use outsourcing to win cleaning
contracts it previously missed out on due to lack of personnel).

1H FY02/20 results (out October 9, 2019)
Summary▷

For 1H FY02/20, the company reported consolidated sales of JPY157.5bn (+3.2% YoY), operating profit of JPY8.6bn (+37.0%
YoY), and net income of JPY5.2bn (+82.6% YoY). Sales and operating profit were in line with the company’s initial forecast(made on June 28) for sales of JPY158.0bn and operating profit of JPY8.5bn. At subsidiary Kajitaku, which had previously
engaged in improper accounting practices, estimates put 1H sales at JPY2.8bn (-0.4% YoY) and operating loss at JPY616mn(versus operating loss of JPY2.5bn in 1H FY02/19). Excluding Kajitaku, 1H sales were up 3.3% YoY and operating profit up 5.2%
YoY. The Cleaning Services, Construction Work, Vending Machine Services, and Security Services segments all reported higher
operating profits while the Materials and Supplies Sourcing Services segment and Facilities Management segment reported
lower operating profits versus 1H FY02/19. Having made no changes to its initial full-year forecast for FY02/20, the company isstill targeting full-year sales of JPY315.0bn (+4.0% YoY), operating profit of JPY18.0bn (+38.1% YoY), and net income of
JPY10.8bn (+68.4% YoY).

▷

Facilities Management: 1H segment sales of JPY29.6bn were up 5.4% YoY; segment profit of JPY2.8bn was down 0.8% YoY.
The top-line gains reflected successful customer development efforts in facilities management plus added sales from the
expansion of ancillary contract work for client companies, including the installation of new automatic fire extinguisher systems
for kitchens and ducts, periodic inspection of fire prevention systems and equipment, and emergency generator load-testing.
The top-line gains notwithstanding, segment profit finished the period down slightly, due in part to R&D spending on thecreation of a model integrated facilities management system using an open systems approach.

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Security Services: 1H segment sales of JPY22.2bn were up 0.5% YoY; segment profit of JPY1.4bn was up 0.6% YoY. Tight labormarket conditions continued to push up wages, but the company was able to price security service contracts so as to absorb
the labor cost increases.

▷

Cleaning Services: 1H segment sales of JPY30.9bn were up 8.0% YoY; segment profit of JPY3.5bn was up 6.2% YoY. Top-line
growth reflected a combination of an increase in new customers and contributions from PT Sinar Jernih Sarana (SJS), thecleaning services business in Indonesia that became a consolidated subsidiary in December 2018. The Cleaning Services
business also reported progress in rollout and sales of self-guided floor cleaning robots (designed to reduce labor costs).

▷

Construction Work: 1H segment sales of JPY23.1bn were up 6.6% YoY; segment profit of JPY2.2bn was up 7.8% YoY. The gains
reflect the construction business’ successful move to an operating structure capable of providing more localized services.
Orders grew in response to demand for renovation work in all regions.

▷

Materials and Supplies Sourcing Services: 1H sales of JPY25.9bn were down 0.4% YoY; segment profit of JPY1.4bn was down
9.4% YoY. Overall sales at the segment finished down despite efforts to expand orders for packaging materials for TOPVALU,
Aeon’s private brand. Segment profit also finished down YoY despite cuts in logistics and other expenses as part of an overall
effort to improve profitability.

▷

Vending Machine Services: 1H segment sales of JPY16.1bn were down 1.9% YoY; segment profit of JPY705mn was up 32.3%
YoY. After declining in Q1, both segment sales and profit were up in Q2, bolstered by the installation of more of thecompany’s own multibrand vending machines (which feature products from various brands) and the ongoing relocation ofvending machines. The jump in segment profit reflects a JPY154mn boost from changes in accounting assumptions for theuseful life of vending machines after a comprehensive review of past track records for replacement periods and physical life.

▷

Support Services: 1H segment sales of JPY9.6bn were down 0.6% YoY; the segment profit was JP254mn (versus a loss of
JPY1.6bn in 1H FY02/19). Kajitaku sales were down due to the suspension of new equipment sales and installation in thestorefront promotion business, but the operating loss at Kajitaku narrowed sharply. Outside of Kajitaku, the Support Services
segment saw solid gains from its B2B outsourcing services business that provides operations and management services forclient companies in peripheral areas such as business travel management (BTM) and MICE events (i.e., meetings, incentive
tours, conventions/conferences, exhibitions).

▷

Overseas: Overseas subsidiaries reported combined 1H sales of some JPY9.1bn (versus around JPY7.1bn in 1H FY02/19) andoperating profit of roughly JPY700mn (versus JPY400mn). The gains were driven by contributions from SJS, the cleaning
services business in Indonesia that became a consolidated subsidiary in December 2018, and further expansion in China.

▷

2H initiatives: Initiatives planned for 2H to help the company meet its full-year forecast include aggressive measures to improve
profitability at its Facilities Management business and Cleaning Services business, and measures aimed at winning more orders
at its Construction Work business. At Facilities Management, the company is looking to improve its cost ratio by speeding up
its push to reduce costs with the help of operating efficiency gains and moves to labor-saving open systems. At Cleaning
Services, all of branch offices will be carefully reviewing the profitable of their cleaning contracts on a building-by-building
basis and weeding out low-margin contracts. At its Construction Work business, the company is looking to create more flexible
construction project teams to better serve the needs of large markets in the Kanto and Kansai regions and prevent opportunity
losses.

Results by segment
Facilities Management
Facilities Management: 1H segment sales of JPY29.6bn were up 5.4% YoY; segment profit of JPY2.8bn was down 0.8% YoY. The
top-line gains reflected successful customer development efforts in facilities management plus added sales from the expansion of
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ancillary contract work for client companies (primarily for the Aeon group), including the installation of new automatic fire
extinguisher systems for kitchens and ducts, periodic inspection of fire prevention systems and equipment, and emergency
generator load-testing. The top-line gains notwithstanding, segment profit finished the period down slightly, due in part to R&D
spending on the creation of a model integrated facilities management system using an open systems approach.
The company introduced its open systems approach to integrated facilities management at Aeon Fujiidera Shopping Center
which opened in September 2019. According to Aeon Delight, it is the first shopping center in the Aeon group with integrated
facilities management services using an open building automation system.
In the past, equipment and devices placed in facilities (such as lights, air conditioning units, electronic security devices, andelevators) were designed separately by various manufacturers and had to be controlled individually. This meant facilities had tohave a central control room and emergency center managed by several on-site employees. The open systems architecture that
Aeon Delight provides collects data directly from different manufacturers’ equipment and devices and connects them via a
network. Integrated control enables energy savings, efficient facilities management, and remote operations.
Advantages to the facilities management outsourcer (Aeon Delight customer) include the ability to constantly check on facilities
remotely (using smartphone or other devices) and reduce energy consumption. Aeon Delight (managing facilities undercontract) can reduce the number of on-site personnel, substituting partly with staff who can rotate around multiple locations
within a region, and thereby cutting personnel expenses. The company thinks it can thus boost profit while offering competitive
pricing and increase the number of contracts (boost market share) in the medium term.
Aeon Delight also said its small and medium-sized office buildings services offered in collaboration with SECOM (TSE1: 9735) aremaking gradual inroads. The model entails Aeon Delight offering services other than security (such as facilities and equipment
management) to SECOM customers in Kanagawa Prefecture, where trials are underway. These involve providing services to 300
sites, primarily small and medium-sized office buildings.

Security Services
Security Services: 1H segment sales of JPY22.2bn were up 0.5% YoY; segment profit of JPY1.4bn was up 0.6% YoY. Personnel
expenses remained in an uptrend as tight labor market conditions continued to push up wages, and the cost of nighttime labor
increased amid workstyle reforms. However, the company was able to secure profit growth as it made headway with the
optimization of prices per contract (passing through costs to customers).
The company’s collaboration with SECOM is making progress in Security Services as well. The partners were able to automate
nighttime security at Aeon Nishiarai, which Aeon Delight manages under contract. While the company already had in placeelectronic security equipment with cameras and sensors, it managed to eliminate personnel expenses for nighttime security by
utilizing SECOM’s business resources involved in security for the nearby district (including general residential areas). Suchchanges to security arrangements could lead to lower prices per contract for the company in some cases, but they increase grossprofit and improve the GPM. Aeon Delight has already automated nighttime security at 23 shopping centers, and hopes to raise
this count to 100 locations by end-FY02/20. Its aim is to develop a competitive security service amid ongoing growth inpersonnel expenses.

Cleaning Services
Cleaning Services: 1H segment sales of JPY30.9bn were up 8.0% YoY; segment profit of JPY3.5bn was up 6.2% YoY. Top-line
growth reflected a combination of an increase in new customers and contributions from SJS, the cleaning services business inIndonesia that became a consolidated subsidiary in December 2018.
Shared Research understands that SJS contributed sales of about JPY1.5bn and operating profit of nearly JPY100mn in 1H. This issolid progress given that the company expected SJS to book sales of about JPY3.0bn and operating profit of about JPY100mn infull-year FY02/20. At the time of the acquisition (December 2018) SJS provided cleaning and ancillary services, but plans to
expand into facilities management and security in the future using Aeon Delight’s accumulated expertise in these areas. It will
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begin with services to the Aeon group facilities in Indonesia. Using these facilities as showrooms, it plans to rollout services tofacilities owned by local businesses.
The Cleaning Services business also reported progress in rollout and sales of self-guided floor cleaning robots (designed toreduce labor costs). Aeon Delight started using and selling automatic floor cleaning robots (made by Tennant Company in theUS) in November 2018 and had sold a total of 18 units in 1H FY02/20. The company aims at further growth, and plans to sell 50
units in 2H. It is making progress on automation projects to deal with the labor shortage in the cleaning business.
Aeon Delight is stepping up its moves to boost margins in the cleaning business. As some of its contracts had become lowmargin amid mounting personnel expenses, all branch offices would carefully review individual contracts, and boost profitability
by weeding out those with lower margins. It also plans to collaborate with Aeon group companies to win high value-added
contracts by promoting high-margin cleaning services and products that require special technology (e.g. cleaning for escalator
steps and food preparation areas).

Construction Work
Construction Work: 1H segment sales of JPY23.1bn were up 6.6% YoY; segment profit of JPY2.2bn was up 7.8% YoY. In Q2, sales
declined YoY, but Aeon Delight said that there was no cause for concern as this reflected the deferment of some work to Q3 andbeyond due to customer circumstances.
In fact, the gains reflect the construction business’ successful move to an operating structure capable of providing more
localized services following organizational restructuring in March 2019. Orders grew in response to demand for renovation workin all regions. The company said that construction demand remained strong due to major renovations and work accompanying
the replacement of tenants in commercial facilities. In addition to offering services closely tied to the community, the company
aims to take advantage of robust demand through close collaboration with companies in the Aeon Delight and Aeon groups.

Materials and Supplies Sourcing Services
Materials and Supplies Sourcing Services: 1H sales of JPY25.9bn were down 0.4% YoY; segment profit of JPY1.4bn was down
9.4% YoY. Despite a sales boost from growth in orders for packaging materials for TOPVALU, Aeon’s private brand, overall sales atthe segment finished down as a key customer changed to in-house procurement for some products. Segment profit also finished
down YoY despite cuts in logistics and other expenses as part of an overall effort to improve profitability. Aeon Delight plans toincrease the number of eco-friendly materials which it hopes will help drive sales growth.

Vending Machine Services
Vending Machine Services: 1H segment sales of JPY16.1bn were down 1.9% YoY; segment profit of JPY705mn was up 32.3% YoY.
After declining in Q1, both segment sales and profit were up in Q2, bolstered by the installation of more of the company’s own
multibrand vending machines (which feature products from various brands) and the ongoing relocation of vending machines.
From around Q2 FY02/19, Aeon Delight installed more of its own multibrand vending machines and reviewed vending machine
locations as it was no longer possible to depend on beverage company rebates. Reducing lost opportunities by controlling outof-stock situations also contributed to profit growth. The jump in segment profit reflects a JPY154mn boost from changes inaccounting assumptions for the useful life of vending machines after a comprehensive review of past track records for
replacement periods and physical life.

Support Services
Support Services: 1H segment sales of JPY9.6bn were down 0.6% YoY; the segment loss of JP254mn compares with a loss of
JPY1.6bn in 1H FY02/19. Estimated results for Kajitaku were sales of JPY2.8bn (-0.4% YoY) and an operating loss of JPY616mn(operating loss of JPY2.5bn in 1H FY02/19). Kajitaku sales were down due to the suspension of new equipment sales andinstallation in the storefront promotion business, but the operating loss at Kajitaku narrowed sharply.

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Excluding Kajitaku, Support Services segment sales were JPY6.9bn (-0.7% YoY) and segment profit was JPY869mn (-5.7% YoY).
Outside of Kajitaku, the Support Services segment saw solid gains from growth in integrated facilities management services andits outsourcing services business that provides operations and management services for client companies in peripheral areas suchas business travel management (BTM) and MICE events (i.e., meetings, incentive tours, conventions/conferences, exhibitions).
Aeon Delight has suspended new equipment sales and installation in the storefront promotion business that was the source ofKajitaku’s problems. It is also working to improve existing contracts with particularly poor terms. The company expects themarket for housework support services to grow, and will make upfront investments as needed, bearing in mind the need to be
selective and focused.

Overseas
Overseas subsidiaries reported combined 1H sales of some JPY9.1bn (versus around JPY7.1bn in 1H FY02/19) and operating
profit of roughly JPY700mn (versus JPY400mn). The gains were driven by contributions from SJS, the cleaning services business inIndonesia that became a consolidated subsidiary in December 2018, and further expansion in China.

Intention to deliver on medium-term plan
At its interim results briefing, the company reiterated its intention to strengthen its moves to meet the targets set out in its
medium-term plan, Aeon Delight Vision 2025 (released in October 2018). There was some concern voiced about the effect of
the Kajitaku incident on some of the other core businesses. However, the negative impact to date has been minor, and Aeon
Delight is making progress on arrangements to prevent a recurrence. There is no change in strategic direction–namely to
become a company that creates environmental value and contributes to solving social issues, with a three-pronged growthstrategy in Asia around the themes of safety and security, the labor shortage, and the environment. The company maintained its
FY02/26 targets of sales of JPY525.0bn and operating profit of JPY48.0bn.

Q1 FY02/20 results (out July 5, 2019)
Summary▷

In Q1 FY02/20, sales were JPY79.0bn (+3.5% YoY), operating profit was JPY3.8bn (+0.4% YoY), and net income attributable toowners of parent was JPY2.1bn (+0.2% YoY). Kajitaku, the group subsidiary found to have engaged in improper accounting
practices, reported sales of JPY1.5bn (-29.4% YoY) and an operating loss of JPY510mn (versus an operating loss of JPY662mn in
Q1 FY02/19). Excluding Kajitaku, sales were JPY77.6bn (+4.4% YoY) and operating profit was JPY4.3bn (-3.1% YoY). The
accounting treatment of provisions and reversals in Q1 had a different impact than normal years. Shared Research understands
that underlying operating profit was on the order of JPY4.5–4.6bn (+1–3% YoY). (We expect these differences to normalize in
1H results.)▷

Facilities Management: Sales were JPY14.9bn (+5.9% YoY) and segment profit was JPY1.4bn (-3.0% YoY). In addition to theincrease in new customer development, the expansion of contract orders in related business, such as the rollout of automatic
fire extinguisher systems for kitchens and ducts, the periodic inspection of fire protection equipment, and the execution of
emergency generator load tests, contributed to the increase in sales. However, although sales rose, the large increase in
expenses meant that profit declined.

▷

Security Services: Sales were JPY11.1bn (+0.6% YoY) and segment profit was JPY730mn (+1.1% YoY). With personnel expenses
rising due to tight labor supply–demand balance, the company was successful in optimizing contract unit prices. The
operating profit margin improved to 6.6% from 6.5% in Q1 FY02/19.

▷

Cleaning Services: Sales were JPY15.4bn (+8.1% YoY) and segment profit was JPY1.7bn (+2.4% YoY). Sales growth reflected anincrease in new customers and results from SJS, the cleaning services business in Indonesia, which became a consolidated

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subsidiary in December 2018. The company also made progress in introducing and selling automatic floor cleaning robots,
which should lead to labor saving.

▷

Construction Work: Sales were JPY12.0bn (+14.4% YoY) and segment profit was JPY1.1bn (+10.6% YoY). The company
implemented an improved planning and design system in FY02/19, resulting in a higher order efficiency. Strengthened
relationships with partner companies through community-based systems also contributed to an increase in contract orders forrenovation work. The company carried out a restructuring at the start of FY02/20 and established new construction
departments in its Kanto and Kansai branches, developing a system that is closely aligned to demand for renovation work ineach area. Expanding the number of orders received is a key focus of attention going forward.

▷

Materials and Supplies Sourcing Services: Sales were JPY13.0bn (+0.6% YoY) and segment profit was JPY712mn (-4.2% YoY).
Efforts to expand contract orders for packaging materials for TOPVALU, Aeon’s private brand, contributed to increased sales.
On the other hand, although the company worked to improve profitability through initiatives such as reduced distribution
expenses, overall expenses increased and segment profit declined.

▷

Vending Machine Services: Sales were JPY7.7bn (-5.0% YoY) and segment profit was JPY256m (-38.9% YoY). In order togenerate profits from favorable locations (such as large commercial facilities with large sales per unit), the company isswitching to installation of the machines that contain an assortment of products from different beverage makers. Therefore
results are currently in a transition period. Profit was boosted by JPY77mn after a change in accounting policy, with anamendment in the useful life of vending machines implemented following a comprehensive review of replacement period andphysical life.

▷

Support Services: Sales were JPY4.9bn (-10.3% YoY) and the segment loss was JPY124mn (versus a JPY274mn loss in Q1
FY02/19). Kajitaku sales fell sharply due to the suspension of new equipment sales and installation in the storefront promotion
business. Sales in the Support Services business excluding Kajitaku increased 1.4% YoY, and segment profit decreased 0.3%
YoY. The company is working to expand its provision of services to meet outsourcing needs for business travel, conference andexhibition management, as well as management of customer facilities and the surrounding environment.

▷

Overseas businesses: Based on a simple sum of local subsidiaries’ results, sales were roughly JPY4.4bn (JPY3.4bn in Q1
FY02/19), and operating profit about JPY300mn (JPY200mn). In addition to growth in the Chinese business, the consolidationof SJS in Indonesia contributed to growth.

Results by segment
Facilities Management
Facilities Management sales were JPY14.9bn (+5.9% YoY) and segment profit was JPY1.4bn (-3.0% YoY). In addition to theincrease in new customer development, the expansion of contract orders in related business, such as the rollout of automatic fire
extinguisher systems for kitchens and ducts, the periodic inspection of fire protection equipment, and the execution of
emergency generator load tests, contributed to the increase in sales. However, segment profit declined despite higher sales due
to significant cost increases.
The company is developing what it calls the Aeon Delight Platform (AD Platform) with the aim of easing the labor shortage for its
clients. Companies generally use central control rooms to manually monitor surveillance camera data and information onplumbing, heating, lighting, and air-conditioning for each individual building. Aeon Delight is building a platform to gather thedata from individual items of equipment using IoT technology and enable remote monitoring. It hopes that in future artificial
intelligence (AI) will enable it to have forewarning of equipment failures and prevent accidents. Currently, the company isincurring upfront platform development costs.

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Security Services
Security Services sales were JPY11.1bn (+0.6% YoY) and segment profit was JPY730mn (+1.1% YoY). With personnel expenses
rising due to tight labor supply–demand balance, the company was successful in optimizing contract unit prices. The operating
profit margin improved to 6.6% from 6.5% in Q1 FY02/19. This solid result came despite an environment where it is hard to win
new outsourcing contracts due to the difficulty of obtaining security personnel. In collaboration with SECOM (TSE1: 9735), thecompany is developing arrangements where it will be able to grow the business even when personnel are hard to come by andis focusing on automated nighttime security (entry/exit control, remote monitoring, and patrols).

Cleaning Services
Cleaning Services sales were JPY15.4bn (+8.1% YoY) and segment profit was JPY1.7bn (+2.4% YoY). Sales growth reflected anincrease in new customers and results from PT Sinar Jernih Sarana (SJS), the cleaning services business in Indonesia, whichbecame a consolidated subsidiary in December 2018.
Aeon Delight started using and selling automatic floor cleaning robots (made by Tennant Company in the US) in November
2018 and had sold a total of 18 units by end-Q1. It is making progress on automation projects to deal with the labor shortage inthe cleaning business.

Construction Work
Construction Work sales were JPY12.0bn (+14.4% YoY) and segment profit was JPY1.1bn (+10.6% YoY). Aeon Delight
implemented an improved planning and design system and proposals from the upstream end in FY02/19, resulting in a higher
order efficiency. It also saw results from reshuffling its portfolio. The company said it also was experiencing increased orders for
expansion and renovation from Aeon Mall (TSE1: 8905).
The company carried out a restructuring at the start of FY02/20 and established new construction departments in its Kanto andKansai branches, developing a system that is closely aligned to demand for renovation work in each area. Expanding the numberof orders received is a key focus of attention going forward.

Materials and Supplies Sourcing Services
Materials and Supplies Sourcing Services sales were JPY13.0bn (+0.6% YoY) and segment profit was JPY712mn (-4.2% YoY).
Efforts to expand contract orders for packaging materials for TOPVALU, Aeon’s private brand, contributed to increased sales. In
Q1, the company received increased orders for PET bottle labels made to TOPVALU specifications. On the other hand, although
the company worked to improve profitability through initiatives such as reduced distribution expenses, overall expenses
increased and segment profit declined.

Vending Machine Services
Vending Machine Services sales were JPY7.7bn (-5.0% YoY) and segment profit was JPY256m (-38.9% YoY). The company hasembarked on structural reform in this business to wean itself from dependence on beverage companies’ incentives. In order togenerate profits from favorable locations (such as large commercial facilities with large sales per unit), the company is switching
to installation of the machines that contain an assortment of products from different beverage makers, and machines with digital
signage. Therefore results are currently in a transition period. Profit was boosted by JPY77mn after a change in accounting policy,
with an amendment in the useful life of vending machines implemented following a comprehensive review of replacement
period and physical life. (Because most of the machines are installed indoors, they have a longer service life than vending
machines in general.)Support Services
Support Services sales were JPY4.9bn (-10.3% YoY) and the segment loss was JPY124mn (versus a JPY274mn loss in Q1 FY02/19).
Kajitaku sales fell sharply due to the suspension of new equipment sales and installation in the storefront promotion business. It
appears that there was some impact from the conservative accounting treatment applied to the period covering the tenure of
the previous management at Kajitaku after the investigation period by the special investigation committee (FY02/13–FY02/19).
Kajitaku is apparently not covering fixed costs due to lower sales, but Aeon Delight expects some personnel to be absorbed by

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the parent level, where there is a personnel shortfall. Sales in the Support Services business excluding Kajitaku increased 1.4%
YoY, and segment profit decreased 0.3% YoY. The company is working to expand its provision of services to meet outsourcing
needs for business travel, conference and exhibition management, as well as management of customer facilities and thesurrounding environment.

Full-year FY02/19 results (out June 28, 2019)
Summary▷

On June 28, 2019, Aeon Delight announced earnings results for full-year FY02/19, the special investigation committee’s
investigation report regarding improper accounting at subsidiary Kajitaku Co., Ltd., and corrections to its historical financial
statements.

▷

Kajitaku: The investigation report revealed that Kajitaku’s improper accounting inflated company profits by JPY16.3bn on a
cumulative basis between FY02/14 and FY02/19. The company also announced corrections to its historical financial statements.
As of end-FY02/19, the company reported BPS of JPY1,466 (JPY1,853 in FY02/18 prior to corrections) and an equity ratio of
54.4% (66.4%). Aeon Delight dismissed involved parties and held management responsible through dismissals andcompensation reductions. In response to the special investigation committee’s recommendations, the company will work tostrengthen the group’s governance system and formulate effective measures to prevent reoccurrence.

▷

FY02/19 results: The company reported sales of JPY302.9bn (+3.6% YoY), operating profit of JPY13.0bn (+0.9% YoY), and net
income of JPY6.4bn (+0.3% YoY). If excluding Kajitaku’s performance, Aeon Delight booked approximately JPY17.0bn inoperating profit (+6.1% YoY). Considering Kajitaku’s operating profit forecast for FY02/19 was JPY1.2bn before theinvestigation, the company’s performance net of Kajitaku was in line with the original operating profit forecast of JPY18.5bn.
Aeon Delight repurchased 2.7mn shares for a total of JPY9.9bn through a tender offer between December 5, 2018 and January
8, 2019.

▷

FY02/20 forecast: The company expects sales of JPY315.0bn (+4.0% YoY), operating profit of JPY18.0bn (+38.1% YoY), net
income of JPY10.8bn (+68.4% YoY), EPS of JPY216.35, and dividend per share of JPY65 (dividend payout ratio of 30.0%). Aeon
Delight expects Kajitaku-related one-time expenses to drop out, and Construction Work, Facilities Management, and Cleaning
Services to drive business performance.

Improper Accounting at Kajitaku
Impact of improper accounting
Kajitaku was founded in August 2008 and became an Aeon Delight subsidiary when the company acquired 90% of issued sharesin April 2011. As of March 1, 2019, Aeon Delight owned 97.8% of outstanding shares. Kajitaku’s key businesses are storefront
promotions (sales, installation, maintenance and management of coin-operated copy machines and photo booths insidesupermarkets and drug stores) and household support services (housekeeping and laundry services for consumers). In FY02/18,
prior to the investigation, the storefront promotions business generated sales of JPY7.0bn and operating profit of JPY1.2bn while
the household support services business generated sales of JPY1.2bn and an operating loss of JPY84mn. The improper accounting
occurred in the storefront promotions business.

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Cumulative corrections for past five years (FY02/14–FY02/18) and FY02/19

No.
1
2
3
4
5
6
7
8
9

10

11

Item
Billing correction for not-yet-installed devices
Correction of fictitious sales
Correction of photo booth purchases
Correction of used copy machine purchases
Correction of miscellaneous purchases
Devaluation of inventory
Correction of receivables balance
Correction of temporary account
Other corrections
Cumulative impact of corrections made by special
investigation (Subtotal)
Amount difference due to correctoins to revenue recognition
Cumulative impact of corrections (FY02/14–FY02/19)(Subtotal)
Recorded loss provisions
Cumulative impact (Grand total)

Amount (JPY mn)-2,281-2,601-1,722-1,298-248-1,296-46
50-281

Summary
Cumulative impact on net
assets for the entire period
under review
Period under review:
From March 2013 throughend of February 2019)-9,721-3,780-13,502-2,750-16,252

Source: Shared Research based on company data

The investigation uncovered and corrected improper accounting across various aspects of the business, including billing for notyet-installed devices, fictitious sales, and inventory valuations. The improper accounting started small, recognizing sales early tomeet financial targets. This gradually escalated to various aspects of the business in greater scale.
According to Aeon Delight’s announcement on May 24, 2019, the special investigation committee estimated an impact on net
assets of roughly JPY9.6bn, but the June 28, 2019 announcement revised this figure to JPY16.3bn. Upon closer examination of
Kajitaku’s contract details, part of Kajitaku’s recognized sales should have been recorded as advances received. The company
made corrections to its revenue recognition, in which it previously recorded prepayment for future maintenance services as sales
upon completing the installation of devices. Additionally, Kajitaku had contracts that required loss provisions. Despite a low
possibility of recording sufficient sales from its devices after installation, Kajitaku contractually guaranteed its customers a sales
minimum in an attempt to drive unit sales. The sales would be supplemented by Kajitaku if the minimums were not met,
resulting in a loss for the company. Aeon Delight recorded additional expenses for the losses that are likely to be incurred,
expanding the impact on earnings.

Clarifying management responsibility
People involved in the improper accounting practice at Kajitaku were punished, including the dismissal of the former CEO andformer director of the storefront promotions business. Similar measures were taken at Aeon Delight, including the dismissal of
the board chairperson and the director in charge of overseeing Kajitaku. Additionally, the company announced compensation
reductions for other directors.

Special investigation committee’s recommendations and Aeon Delight’s prevention plan
Upon completing its investigation, the special investigation committee made several recommendations in order to prevent
reoccurrence. The recommendations include a change of mindset of officers, curbing excessive emphasis on budget control
when managing subsidiaries, and developing compliance system for subsidiaries.

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Recommendations made by Special Investigation Committee
1. Recommendation for improvements on subsidiary management
1 Change of mindset of officers
2 Curb excessive emphasis on budget control when managing subsidiaries
3 Clarification of department and director responsible for compliance management system ofsubsidiaries
4 Expansion of compliance, subsidiary management, and management audit departments
5 Dispatch full-time officer and staff to subsidiaries
2. Recommendations for reoccurrence prevention for Kajitaku
1 Renewal of Kajitaku management team, increase number of directors
2 Improve corporate culture and compliance awareness3 Reinforcement of Administration Division, especially Accounting Department
4 Develop compliance system and conduct organizational reform at Kajitaku
5 Clarify operating procedures and enforce compliance
Basic policy for reoccurrence prevention
1. Reoccurrence prevention plan for Aeon Delight
1 Promote further improvement in compliance system through changing mindset of officers
2 Revise subsidiary management system for solid and sustained growth of group companies
3 Develop compliance system for group companies
4 Reform organizations to provide to group companies support for solid management, appropriatemonitoring, and audits with fraud prevention in mind
5 Dispatch full-time officers and staff for daily involvement in operations, detect fraud early throughpersonnel exchanges, improve organizational culture
2. Reoccurrence prevention plan for Kajitaku
1 Renewal of Kajitaku management team, emphasis on compliance by new CEO
2 Improve corporate culture and compliance awareness
3 Ensure reliability and visualize operations of finance, accounting, and budgeting duties
4 Develop compliance system, enforce compliance and monitoring of company rules
5 Clarify operating procedures and enforce compliance
Source: Shared Research based on company data

Aeon Delight established basic management policies to change the executive team’s mindset for further improvement ofcompliance, revisit subsidiary management strategies to drive stable and sustainable group company growth, and develop acompliance system across the group in order to prevent reoccurrence. Going forward, the company intends to develop adetailed action plan.
When questioned about the risk of reoccurrence at the results briefing, the special investigation committee made several
comments such as “if the company adopts reoccurrence prevention measures in line with our recommendations, the risk ofreoccurrence will be low” and “we also conducted simple investigations at subsidiaries other than Kajitaku and found no fraud.”
Based on the investigation report and discussions during the results briefing, Shared Research believes the risk of additional
losses and reoccurrence of fraud is low.
Meanwhile, Kajitaku will stop accepting new orders for its office equipment business (coin-operated copy machines and photobooths) for the time being. As a result, the company expects sales to decline and not cover fixed costs. For FY02/20, Aeon
Delight anticipates the storefront promotions business to record an operating loss of JPY500mn and the household support
services business to break even.

FY02/19 results (comparison with revised FY02/18 results)
In FY02/19, Aeon Delight reported sales of JPY302.9bn (+3.6% YoY), operating profit of JPY13.0bn (+0.9% YoY), and net incomeof JPY6.4bn (+0.3% YoY). The Support Services segment, which includes Kajitaku, reported an operating loss of JPY2.3bn in
FY02/19 compared to JPY1.5bn in FY02/18, deteriorating by JPY804mn YoY. Excluding the impact of the Support Services
business, operating profit was up JPY925mn YoY.

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Business performance was driven by the Facilities Management, Construction Work, and Cleaning Services businesses. The
Facilities Management business generated JPY5.6bn in operating profit, up JPY914mn from FY02/18. The primary drivers wereincreased orders of routine fire protection equipment inspections and emergency power generator load tests from customers
looking to strengthen disaster prevention systems. The Construction Work business delivered JPY4.0bn in operating profit, up
JPY684mn from FY02/18, as the company started providing value-added services such as design proposals for commercial facility
renovation projects from the planning stage. Cleaning Services operating profit came in at JPY6.7bn, up JPY466mn from FY02/18,
with improved productivity and service quality as a result of rolling out small group activities and developing facility-specificstandard operating procedure manuals. Additionally, the company started introducing and selling automatic floor cleaning
robots.
Meanwhile, the Vending Machine Services business posted weaker performance, with operating profit at JPY1.2bn, down
JPY941mn from FY02/18. This was largely due to the abnormal frequency of heavy rain and typhoons during the FY02/19 summer
season, resulting in inventory shortages in some regions. Rising personnel expenses for inventory restocking also pressured
margins.

News & topics
November 2019
On November 29, 2019, the company announced an incorporation-type company split of a subsidiary company.
The company announced a spin-off of the household support services business of wholly owned subsidiary Kajitaku through anincorporation-type company split. The newly formed company will be a wholly owned subsidiary of Aeon Delight Co., Ltd. The
company made Kajitaku (operates the storefront promotion and household support services business) a subsidiary in 2011 withaims to capture synergies in small store and condo management business areas. In 2019, however, accounting fraud issues
emerged in Kajitaku’s storefront promotion business. Based on the recommendations of a special investigation committee madeup of external experts with no conflicts of interest with the company and Kajitaku, the company adopted an action plan toprevent a recurrence of the incident and is working to restructure Kajitaku. After discussions on the future direction of Kajitaku,
the company decided to continue the household support services business, where market expansion is expected. Meanwhile,the company suspended new equipment sales and installation for the storefront promotion business and decided to focus on
fulfilling existing contracts. In order to carry out the decisions, the company decided to transfer the household support services
business to the newly formed company and keep the storefront promotion business in Kajitaku. The company split is planned totake effect on February 4, 2020 and the expected impact on consolidated results is minimal.

September 2019
On September 30, 2019, the company announced the establishment of a Recurrence Prevention Committee.
On July 22, 2019 Aeon Delight adopted an action plan to prevent a recurrence of the Kajitaku incident. The plan is based on thefindings and recommendations of a special investigation committee made up of external experts with no conflicts of interest withthe company. Under the action plan, Aeon Delight executed a structural reorganization to strengthen its governancearrangements and is taking company-wide measures to prevent a recurrence. It planned to establish a Recurrence Prevention
Committee effective October 1, 2019. Including external experts, the committee will act as an advisory body with the aim of
implementing upgraded countermeasures and offering objective assessments. In principle, the committee will evaluate theprogress of activities to prevent recurrence on a quarterly basis, and report to the board of directors via the secretariat. Aeon
Delight believes that strengthening its governance arrangements and wide-scale implementation of measures to prevent
recurrence will give it a more robust management structure. It is working to regain the trust of its stakeholders by accelerating its
growth strategy as the Aeon Delight group.

May 2019
On May 31, 2019, the company announced that its request for extending the submission deadline of its annual securities report
was approved and the new deadline was set for July 1, 2019.

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The company had announced on May 29, 2019 its decision to apply to the Kinki Local Finance Bureau for an extension to thesubmission deadline of its annual securities report. The approval received from the bureau at this time extended this deadline toJuly 1, 2019 (originally May 31, 2019).
The special investigation committee, established to investigate the improper accounting practice at Aeon Delight’s consolidated
subsidiary Kajitaku, is scheduled to issue a final report at the end of June 2019. The company explained that it planned to prepare
its annual securities report based on the results of the final investigation and submit it to the authorities by July 1, 2019 uponcompleting the audit procedures.
On May 24, 2019, the company announced the receipt of interim report from the special investigation committee on improperaccounting at consolidated subsidiary Kajitaku.
The company received a report from the special investigation committee regarding inappropriate accounting at consolidated
subsidiary Kajitaku Co., Ltd. According to the special committee report, the accounting problem was found to have an effect of JPY9.6bn in total (including modification of claims for uninstalled properties, adjustment for fictitious sales, and adjustment topurchase of certification photo machines) on net assets of the consolidated financial statements for the period under review(March 2013–February 2019). Net assets at Aeon Delight’s latest result announcement (end-Q3 FY02/19) was JPY99.3bn; bysimple calculation, 9.7% of the net assets was affected by inappropriate accounting.
On May 10, 2019, the company announced that the agenda of its annual general meeting of shareholders will not be the sameas usual, and that it had set a base date (for voting rights determination) for the convocation of an extraordinary general meetingof shareholders.
On April 5, 2019, the company announced that the release of its full-year FY02/19 results would be delayed due to the possibility
that a consolidated subsidiary may have engaged in improper accounting. An investigation is underway by the company andcommittee of independent experts with whom it has no conflict of interest. For this reason, the company will not be able tocomplete all procedures for announcing its earnings results by May 30, 2019, the scheduled date of its annual general meeting ofshareholders. The company will therefore take the following steps:
1)

Change part of its articles of incorporation at the annual general meeting of shareholders

2)

Secure stable dividends by passing a resolution at the annual general meeting of shareholders to pay a year-end dividend of
JPY32 per share (up JPY1 per share from the previous year)3)

Not report FY02/19 earnings results at the annual general meeting of shareholders

4)

Set May 31 as the base date of voting rights determination at an extraordinary general meeting of shareholders to be held
within three months of that date.

Shared Research understands that the company plans to announce FY02/19 earnings results by the end of August 2019.

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Company profile
Company Name

Head Office
Minamisemba Heart Bldg.

AEON DELIGHT CO., LTD.

2-3-2 Minamisemba Chuo-ku, Osaka City
Osaka, Japan 542-0081

Phone

Exchange Listing+81-6-6260-5621

Tokyo Stock Exchange 1st Section

Established

Listed On

November 16, 1972

September 29, 1995

WebsiteFiscal Year-End

https://www.aeondelight.co.jp/english/

February

IR Contact

IR Web-https://www.aeondelight.co.jp/english/ir/

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TAIYO HOLDINGS CO., LTD.

Azbil Corporation

Good Com Asset Co., Ltd.

NanoCarrier Co., Ltd.

Takashimaya Company, Limited

AZIA CO., LTD.

Grandy House Corporation

Net Marketing Co., Ltd.

Take and Give Needs Co., Ltd.

AZoom, Co., Ltd.

Hakuto Co., Ltd.

Net One Systems Co.,Ltd.

Takihyo Co., Ltd.

BEENOS Inc.

Hamee Corp.

Nichi-Iko Pharmaceutical Co., Ltd.

TEAR Corporation

Bell-Park Co., Ltd.

Happinet Corporation

Nihon Denkei Co., Ltd.

Tenpo Innovation Inc.

Benefit One Inc.

Harmonic Drive Systems Inc.

Nippon Koei Co., Ltd.

3-D Matrix, Ltd.

B-lot Co.,Ltd.

HOUSEDO Co., Ltd.

NIPPON PARKING DEVELOPMENT Co., Ltd.

TKC Corporation

Broadleaf Co., Ltd.
Canon Marketing Japan Inc.

IDOM Inc.
IGNIS LTD.

NIPRO CORPORATION
Nisshinbo Holdings Inc.

TKP Corporation
Tsuzuki Denki Co., Ltd.

Career Design Center Co., Ltd.

i-mobile Co.,Ltd.

NS TOOL CO., LTD.

TOCALO Co., Ltd.

Carna Biosciences, Inc.

Inabata & Co., Ltd.

OHIZUMI MFG. CO., LTD.

TOKAI Holdings Corporation

CARTA HOLDINGS, INC

Infocom Corporation

Oisix ra daichi Inc.

TOYOBO CO., LTD.

CERES INC.

Infomart Corporation

Oki Electric Industry Co., Ltd

Toyo Ink SC Holdings Co., Ltd

Chiyoda Co., Ltd.

Intelligent Wave, Inc.

ONO SOKKI Co., Ltd.

Toyo Tanso Co., Ltd.

Chori Co., Ltd.

ipet Insurance CO., Ltd.

ONWARD HOLDINGS CO.,LTD.

Tri-Stage Inc.

Chugoku Marine Paints, Ltd.

Itochu Enex Co., Ltd.

Pan Pacific International Holdings Corporation

TSURUHA Holdings

cocokara fine Inc.

JSB Co., Ltd.

PARIS MIKI HOLDINGS Inc.

VISION INC.

COMSYS Holdings Corporation

JTEC Corporation

PIGEON CORPORATIONVISIONARY HOLDINGS CO., LTD.

COTA CO.,LTD.

J Trust Co., Ltd

QB Net Holdings Co., Ltd.

WirelessGate, Inc.

CRE, Inc.

Japan Best Rescue System Co., Ltd.

RACCOON HOLDINGS, Inc.

YELLOW HAT LTD.

CREEK & RIVER Co., Ltd.

JINS HOLDINGS Inc.

Raysum Co., Ltd.

YOSHINOYA HOLDINGS CO., LTD.

Daiichi Kigenso Kagaku Kogyo Co., Ltd.

JP-HOLDINGS, INC.

RESORTTRUST, INC.

YUMESHIN HOLDINGS CO., LTD.

Daiseki Co., Ltd.

KAMEDA SEIKA CO., LTD.

ROUND ONE Corporation

Yushiro Chemical Industry Co., Ltd.

Demae-Can CO., LTD

Kanamic Network Co.,LTD

RVH Inc.

ZAPPALLAS, INC.

DIC Corporation

Kawanishi Holdings, Inc.

RYOHIN KEIKAKU CO., LTD.

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