Medium-Term Management Plan(2020-2022) - AEON MALL
Sharinga senseoflivelyparticipationMedium-Term Management Plan(FY2020 to FY2022)AEON MALL Co., Ltd.（東証１部：8905）(TSE: 8905)
Management Policies1
Management PoliciesTarget Performance Indicators Financial IndicatorsAEON MALL revised our financial Indicators (FY2025 targets) in response to the adoption of IFRS 16 at the beginning of FY2019, aswell as new goals to maximize future cash flows and improve corporate value.IndicatorTypeGrowthindicatorEPS growth rateTarget (for FY2025)FY20197% annual2.1％(annual growth rate between2019 and 2025)Net interest-bearing debt/EBITDA ratioStabilityindicatorWithin 4.5 timesROIC (Return on Invested Capital)EfficiencyindicatorAt least 5%(YoY)4.7 times4.3%*EPS: Net income attributable to owners of parent/average number of shares during the yearNet interest-bearing debt/EBITDA ratio: (interest-bearing debt - cash and cash equivalents)/ (operating income depreciation and amortizationon the statement of cash flows)ROIC: Operating income x (1-effective tax rate) / (average equity for the fiscal year average interest-bearing debt for the fiscal year)After excludingimpact of IFRS16FY2019(Reference) Prior Financial IndicatorsIndicatorTypeTarget ValueEquity ratioStability indicatorAt least 30%Net Debt-Equity RatioStability indicator1 timesEfficiency indicatorAt least 6%ROIC (Return on Invested Capital)FY201928.5%31.5%1.5 times1.2 times4.3%4.9%* Equity Ratio: Equity / Total AssetsNet Debt-Equity Ratio: (Interest-Bearing Debt - Cash and Deposits) / Equity2
Management PoliciesBasic Management Policies and Long-Term Vision Basic Principle and Management PhilosophyBasic PrincipleManagementPhilosophyThe Customer FirstAEON MALL is a Life Design Developer, creatingthe future of community living.*Life Design extends beyond the framework of the shopping mall. Life Design addresses functions associated withdifferent customer life stages, including not only shopping, but also interaction with other people, culturaldevelopment, and other features contributing to future lifestyles. Long-Term VisionQualitative GoalsVision for 2025Quantitative Goals(1) Build a portfolio of multiple business models, rather than rely ondomestic malls as a single source of profit generation.(2) Make AEON MALL a leading global commercial developer withconsolidated operating income of 100 billion.(3) Conduct floor space expansions and renovations in Japan toBecome the Overwhelmingly Dominant Mall in Each Region.(4) Target overseas operating income of 35 billion (operating marginof 20%) across 70 malls, operating at the same level of efficiencyand scale as our domestic operations (as of FY2016). 100billion Y2025Malls86.6%63.5%Urban SC(0.3％)1.5%13.7%35.0%Overseas3
Management PoliciesMedium- and Long-Term Numerical TargetsMedium-Term Management Plan (FY2020-FY2022)Vision for 2025Operating RevenueFY2022*Three-Year PlanFY2019 Results 324.1 bnFY2025 390.0 bn 500.0 bnProfit PlanBusiness Portfolio(Operating Income)Operating Income 60.7 bn*Op. margin18.8％ 74.0 bn*Op. margin19.0％Domestic Mall Business 52.6 bn(86.6%) 55.0 bn(74.3%) 63.5 bn(63.5%) 8.3 bn(13.7%) 18.0 bn(24.3%) 35.0 bn(35.0%) 1.0 bn(1.4%) 1.5 bn(1.5%)Overseas BusinessUrban Shopping Center BusinessEPS Growth Rate *Growth rate from FY2019 to FY2025Financial Indicators( 0.2) bn－(-0.3%)5.0 % 100.0 bn*Op. margin20.0％7% or higherNet Interest-Bearing Debt/EBITDA Ratio4.7 x5.0x or lower4.5x or lowerROIC4.3 %4% or higher5% or higher4
Three-Year Medium-Term Management Plan(FY2020 - FY2022)5
Three-Year Medium-Term Management Plan (FY2020 - FY2022)Three-Year Medium-Term Management Plan Growth Policies(1) Achieve high profit growth overseas(2) Achieve stable growth in Japan(3) Build a financing mix and governance structures supporting growth(4) Pursue ESG-based management Numerical Targets(1) Financial targets(2) Plans by segment(3) Capital investment plan and fund acquisition plan(4) Shareholder returns6
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Priority Measures(1) Accelerate new mall openings・Open malls in growth areas・Search for and secure property to accelerate mall openings・Build systems to support accelerated mall openings(2) Strengthen earnings capacity of existing malls・Expansions and renovations・Events and sales promotions timed to social events・Mall digital environments・Improved customer service, operational efficiencies, etc.Achieve High Profit Growth Overseas7
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Accelerate New Mall Openings70 Malls Overseas by FY2025ASEANChina70Total (Right Axis)Mall OpeningsFY2008-FY2019China: 21 mallsASEAN: 9 mallsSteady Openings ofPlanned MallsFY2020 - FY2022China: 1 mallASEAN: 8 malls Search for and SecureProperty for PlannedOpenings Over the NextThree Years8
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Accelerate New Mall OpeningsOpen Malls in High-Growth Areas Based on Detailed Market Analysis China ASEANExpand site selection areas,mainly in inland areas wheremarket growth is high.VietnamAccelerate mall openings inVietnam, where futurepopulation growth andeconomic growth is expected.HubeiProvinceMyanmarProceed with feasibility studies ofMyanmar as a new candidate for mallopenings.9
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Accelerate New Mall Openings Three-Year Plan for Mall OpeningsFY2020FY2021ThreeYear TotalFY2022Overseas3249China0101ASEAN3148 China AEON MALL Guangzhou Xinjiang(tentative name)ScheduledOpening DateTotal LeasingAreaNo. of ParkingNo. of SpecialtyStoreFY2021About 75,000 About 3,500 carsUndisclosedScheduledOpening DateTotal LeasingAreaNo. of ParkingNo. of SpecialtyStore2nd half ofFY2020About 74,000 ScheduledOpening DateTotal LeasingAreaNo. of ParkingNo. of sedScheduledOpening DateTotal LeasingAreaNo. of ParkingNo. of SpecialtyStoreSummer ofFY2020About 71,000 About 3,000 cars About 250 storesFY2020About 42,000 About 1,500 cars About 150 storesOn and AfterFY2022Undisclosed ASEAN VietnamAEON MALL Hai Phong Le ChanAbout 2,100 carsAbout 9,000 motorcyclesAbout 200 stores(Tentative name) AEON MALL Guangzhou Xinjiang（China）CambodiaAEON MALL Cambodia No.3(tentative name)CambodiaAEON MALL Sentul CityAEON MALL Tanjung BaratAEON MALL Delta Mas(tentative name)*Publicly announced locations only.UndisclosedUndisclosedAEON MALL Hai Phong Le Chan (Vietnam)10
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Accelerate New Mall OpeningsSearch for and Secure Property to AccelerateFuture Mall Openings(1) Organization・Cultivate humanresources capableof global work・Encouragelocalized mallmanagement(2) Community・Strengthenalliances withlocal governmentsand businessesVietnam Prime Minister Phuc(3) Financing・Pursue master lease malls・Establish a global cash managementstructure (investigate the creation of a treasury center)・Create more fluidity in AEON MALLowned properties11
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Strengthen Earnings Capacity of Existing MallsStrengthen Area Dominance(1) Perform Expansions and Renovations・Renovate new tenants and others, revise lease agreements upon the conclusion of tenant lease agreements (every three years)・Conduct strategic expansions to grow sales and profits without being influenced by macroeconomics.AEON MALL BSD CITYRevitalization DuringSecond Half of FY2020(Indonesia)(2) Conduct Events and Sales PromotionsSponsor events and hold salespromotions timed to social eventsAEON MALL WuhanJinyintan Expansionand Renovation (China)(3) Improve Operations・Adopt leading-edge digitaltechnologies to create mallinfrastructure・Improve customer service・Introduce Japanese qualityfor operating efficienciesIncrease Ability to Attract Customers12
Growth Policy: (1) Achieve high profit growth overseasOverseas Business Strengthen Earnings Capacity at Existing Malls Profit Growth Model(Unit: 100 Millions) Costs remain essentially fixed overtime, as the majority of operating costsare real estate costs. Grow operating revenue throughcommission rental income tied to storesales growth. Activation measures for tenants reachingend of three-year lease lead to projectedprofit growth; stores forecast to reachsame profitability levels as tenants inJapan beginning in year seven or eight. FY2019 Earnings at Existing Overseas Malls(Unit: , Millions)(Reference) Excludes impact of IFRS 16 adoption24 Existing Overseas Malls24 Existing Overseas MallsYoY ChangeGross ProfitAvg. per Mall(Unit: , Millions)YoY ChangeYoY Growth11,733 7,089252.7%489 295－Gross ProfitAvg. per MallYoY Growth7,003 3,734214.2%292 156－13
Growth Policy: (2) Achieve Stable Growth in JapanDomestic Business Priority Measures(1) Strengthen Earnings Capacity of Existing Malls・Secure market position as the overwhelmingly dominant mall in each regionPursue expansions and renovationsCreate new incentives for customer visits(2) Open New Malls・Maximize the value of brick-and-mortar malls through new mall openingsbased on innovative conceptsOpen malls under new formatsPerform mall renovations leveraging existing assetsMaximize the value of brick-and-mortar malls(3) Improve Urban Shopping Center Business Income・Introduce fundamental reforms at existing mallsAchieve Stable Growth in Japan14
Growth Policy: (2) Achieve Stable Growth in JapanDomestic Business Strengthen Earnings Capacity of Existing MallsEngaging in Expansions and RenovationsTailored to Local NeedsOverwhelmingly Dominant Mall in Each Region(Attract More Customers, Increase Sales) Three-Year Plan for Mall ExpansionsFY2020FY20212JapanSpring of 2020Total Leasing AreaAbout 76,000 (About 17,000 )No. of Parking248AEON MALL KochiAEON MALL TakasakiScheduledExpansionThreeYear TotalFY2022No. of Specialty StoreAbout 4,000 carsAbout 210 stores(About 300 cars)(About 40 stores)ScheduledAreaNo. of 駐 台数ParkingNo. of Specialty総賃貸面積専門店数 Store増床オープンTotal LeasingExpansion2020年秋69,000台約 170About 69,000About 3,0003,000 carsAbout170 店stores Autumn of 2020( 約12,000 )( 約200台)( 約30店)(About 12,000 )(About 200 cars)(About 30 stores)15
Growth Policy: (2) Achieve Stable Growth in JapanDomestic Business Strengthen Earnings Capacity of Existing MallsAdd Functions to Create New Incentives for Customer Visits(2) Expand PublicFunction Offerings(1) Happiness Mall(3) Create Smart Malls・Offer a highly convenient shoppingenvironment・Strengthen customer interactionsthrough integration of real and thedigital experiences・Strengthen support for tenants・Expand offerings of vital functions foreveryday living, including postoffices, government administrativedesks, clinics, libraries, etc.・Sponsor mall events for Health andWellness・Step up responses to the expandingsenior market Improve Ability of Malls to Attract Customers to Grow Sales16
Growth Policy: (2) Achieve Stable Growth in JapanDomestic Business Open New MallsMaximize the Value of Brick-and-Mortar Malls ThroughNew Mall Openings Based on Innovative Concepts(1) New Mall Formats・Regional innovativecommercial facilitiesIntroduce formats that combine outlet sales,entertainment, and functions tailored to thelocal community.・Office/retail commercial facilitiesIncrease the value of offices in cities byintegrating commerce and office spaces. (2) Perform MallRenovations LeveragingExisting Assets(3) Offer Attractions OnlyAvailable in PersonEngage in scrap-and-build, as wellas adding new wings next toexisting malls, to increase thecompetitiveness of existing malls.Expand dining, amusement, andother entertainment functionsavailable only in person. Offerattractions only available tocustomers in person todifferentiate from e-commerceshopping. Grow Income in Japanese Markets Through Continued Mall Openings17
Growth Policy: (2) Achieve Stable Growth in JapanDomestic Business Open New Malls 3-Year Plan for Mall OpeningsFY2020JapanFY2021ThreeYear TotalFY20222349Malls2349Urban SC0000Office/Retail Commercial FacilityRetail Space for Regional RevitalizationYahata Higashida Project (tentative name)Noritake no Mori Project (tentative name)FY2020FY2021Name of facilityAEON MALL AgeoAEON MALL Rifu New Building (tentative name)AEON MALL KawaguchiAEON MALL Hakusan (tentative name)Noritake no Mori Project (tentative name)*Lease area for commercial facility (top) and office space (bottom)FY2022Yahata Higashida Project (tentative name)LocationAgeo, Saitama Pref.Rifu-cho, Miyagi, Miyagi Pref.Kawaguchi, Saitama Pref.Hakusan, Idhikawa Pref.Scheduled Opening DateAutumn of 2020Winter of 2020Spring of 2021Summer of 2021Nagoya, Aichi Pref.Autumn of 2021Kitakyushu, Fukuoka Pref.Spring of 2022Total leasing areaAbout34,000 About69,000 About59,000 About73,000 About37,000 About22,000 About58,500 No. of TenantsParkingUndisclosedAbout 130 storesAbout 3,800 carsUndisclosedUndisclosedUndisclosedAbout 4,000 cars About 220 storesAbout 2,100 carsUndisclosedAboutUndisclosed4,000 cars*Publicly announced locations only.18
Growth Policy: (2) Achieve Stable Growth in JapanUrban Shopping Center BusinessMake Priority Investments of Management Resources to Revitalize Existing Locations(1) Renovate Existing Malls・Conduct renovations accordingto the local characteristics ofeach location(2) Change Ownership andManagement/Operating Models・Tenjin Big Bang Project・Yokohama Importmart(3) Utilize Assets Leveraging theCharacteristics of Land Near PublicTransportation Stations・Engage in initiatives fromthe standpoint of improvingreal estate value (workspacesharing, etc.)Transition Away From Apparel-Heavy Sales, Engaging inFundamental Reforms to Improve Profits19
Growth Policy: (3) Build a financing mix and governance structure supporting growthEstablish a Global Management Structure Global Financing MixEngage in more sophisticated financing activities, including local financing,in conjunction with global expansionInvestigate a transition away from a central financing structure in Japan to a true global financingmix, including procurement from external sources in ASEAN for effective foreign exchange riskcontrol Optimize Cash ManagementCollect cash from specified areas and allocate to ASEAN, where we expect investment growth, toachieve greater capital efficienciesAreasHoldingExcess CashMovement ofExcess CashEffective Use ofGroup CashInvest, LendWithin the GroupASEAN Engage in More Advanced Risk Management・Reinforce our risk management structure prepared against various risks overseas (war, civildisorder, coup d'état, disasters, accidents, terrorism)・Build a J-SOX-level internal control system20
Growth Policy (4) Pursue ESG-Based ManagementESG-Based ManagementPursue Management Based on an ESG Perspective for SustainableGrowth and Corporate Value ImprovementVision for 2025Business EnvironmentCustomersOverseas Rise of the modern SC inconjunction with GDP growth High growth in retail markets Accelerated openings bycompeting DVs Concerns about deceleratingeconomy in ChinaCommunitiesShareholdersEconomy(2) Make AEON MALL a leadingglobal commercial developerwith consolidated operatingincome of 100 evelopmentConstructionJapan Changing demographicsMall Management(low birth rates, aging population) Changing family structure(increase in single adults, increase indual-income households)RenovationsMallManagementand Operations(1) Build a portfolio of multiplebusiness models, rather thanrely on domestic malls as asingle source of profitgeneration.Leasing(3) Conduct floor spaceexpansions and renovationsin Japan to become thedominant mall in each area.(4) Target overseas operatingincome of 35 billion(operating margin of 20%)across 70 malls, operating atthe same level of efficiencyand scale as our domesticoperations (as of FY2016).Operating revenue: 500 billionOperating income: 100 billion Changes in consumer behavior(online shopping, conservativespending, the sharing onmentEmployees Regional, social infrastructuredevelopment Community relations Environment Diversity, work-style reform Responsible businessengagement21
Growth Policy (4) Pursue ESG-Based ManagementEngaging With Materiality Measures Addressing MaterialityMaterialityDeveloping Community andSocial Infrastructure Developing sustainable and resilientinfrastructure Production and consumption formatsBuilding Bridges to LocalCommunities Cultural preservation and inheritance Low birth rates, aging societyThe Environment Climate change, global warming Protecting biodiversity, resourcesDiversity and Work-StyleReform Health and welfare Diversity, work-styleAccountability in Business Human rights BriberyRelated SDGsPolicySafe, secure, and pleasant facilitiesMalls that reflect the unique character of a communityTown planning for disaster preventionExpansion of public functionsEncouraging acceptance and use of electric vehicles (EV)Encouraging the use of public transportationHappiness Mall initiativesHyper-Localization to boost local appealResponding to climate change and global warmingAEON Hometown Forest Project (biodiversity)Recycling waste productsAEON Yume-Mirai Nursery SchoolGlobalization of Human ResourcesNadeshiko BrandImprove employee satisfaction (ES), including tenantemployee satisfactionHuman Rights Policies, Systems, and TrainingInitiatives to Prevent Corruption22
Growth Policy (4) Pursue ESG-Based ManagementESG InitiativesDeveloping Community and Social InfrastructureTown planning for disasterpreventionMost of our malls in Japan have signedagreements with local governments fordisaster relief and other activities for thesafety of local citizens. We coordinateclosely with local communities to improvedisaster preparedness by holdingregularly scheduled disaster preventionresponse exercises with tenant specialtystore employees.The Environment100% Renewable Energyfor Mall OperationsThe AEON Fujiidera Shopping Center installed100kW solar power system to become the firstPPA mall (Note 1) in the AEON MALL group.The location also adopted an open networksystem provided by AEON delight Co., Ltd.Integrated management of facilities andequipment necessary for facility managementhelps the location become more energyefficient, allowing remote facility monitory andother benefits. Through these initiativs, theFujiidera Shopping Center has become thefirst in the AEON organization to use 100% ofits electricity from renewable energy.Building Bridges to Local CommunitiesAEON MALL WalkingTo support healthier lifestyles for our customers,AEON MALL facilities provide walking paths,open for all to use. AEON MALL Miyazaki(Miyazaki Prefecture) offers a mall walkingprogram overseen by the Center for PreventiveMedical Sciences at Chiba University. Thisprogram was incorporated into the mall after afloor space expansion in March 2018, creating aspace and opportunity to promote greater healthawareness. We participate in the Fun WalkProject with the Japan Sports Agency in a publicprivate partnership. No matter what the weatheroutdoors, customers can always enjoy walkinginside their local mall.Diversity and Work-Style ReformAEON Yume-Mirai NurserySchoolWe built on-site AEON MALL Yume-MiraiNursery Schools to support our employeeswho are raising children. As of FY2019, thenumber of nursery schools in operation hadexpanded to 30*. These nursery schools willcontinue to support tenant employees,AEON employees, and others who work andraise families, serving to reduce the numberof children on waiting lists for childcarecenters.*Includes 10 nursery schools located in AEON Group facilities.23
Numerical TargetsFinancial Targets FY2022 Consolidated Business Targets( 100 million)( 100 million)Operating RevenueOperating IncomeGrowth Rate 6.4%Growth Rate 6.8%FY2019FY2019FY2022 EPS and Operating IncomeFY2022Annual EPSGrowth Rate( 100 million)( ) 7.0%Annual EPSGrowth R
AEON MALL is a Life Design Developer, creating the future of community living. Basic Principle and Management Philosophy *Life Design extends beyond the framework of the shopping mall. Life Design addresses functions associated with different customer life stages, including not only shopping, but also interaction with other people, cultural
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EU Tracker Questions (GB) Total Well Total Badly DK NET Start of Fieldwork End of Fieldwork 2020 15/12/2020 16/12/2020 40 51 9-11 08/12/2020 09/12/2020 41 47 12-6 02/12/2020 03/12/2020 27 57 15-30 26/11/2020 27/11/2020 28 59 13-31 17/11/2020 18/11/2020 28 60 12-32 11/11/2020 12/11/2020 28 59 12-31 4/11/2020 05/11/2020 30 56 13-26 28/10/2020 29/10/2020 29 60 11-31
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Strategy Paper (FSP) and Medium-Term Expenditure Framework (MTEF) which captures our fiscal policy, revenue and spending parameters and projections. Within this context, the Delta State Medium-Term Development Plan 2016-2019 encapsulates this administration's 5-point plan, known as the S.M.A.R.T Agenda.
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Gyms, fitness studios . Medium Medium Medium . Playgrounds, skateparks and other outdoor recreation spaces . Medium Medium Medium . . Exercise Equipment o Swimming Pools and Splashpads o Sports – Youth and Adult o Dog Parks o Childcare Programs and Summer Camps
