Business Performance
The business results for the first half of the 51st fiscal year (March 1, 2023 to August 31, 2023) were as follows: Net sales of 161,511 million yen (109.4% YoY), operating income of 7,263 million yen (110.0% YoY), ordinary income of 7,401 million yen (112.1% YoY), and net income attributable to owners of parent of 5,325 million yen (122.8% YoY).
Net sales rose thanks to higher customer share both within and outside the Aeon Group and an increase in newly commissioned properties. In particular, the number of contracts from companies and organizations outside the Aeon Group grew as a result of enhanced sales efforts. By segment, sales increased in all seven businesses, with double-digit growth in the construction business, which saw a rise in orders for energy conservation-related work in response to rising energy costs, as well as in the materials-related business, which saw an increase in orders for a variety of materials.
Operating income grew in line with higher sales. However, results fell short of the initial forecast owing to insufficient efforts to improve profitability in the face of rising labor, raw material, and logistics costs.
Major initiatives in the first half of the 51st fiscal year
Customer-Oriented Management
Expanded our market share by developing our sales force
We boosted our customer share by expanding service offerings through account sales and regional sales at branches and offices, as well as by pursuing contracts for other properties. At the same time, we began providing services at a wide variety of facilities by presenting customer-oriented proposals based on our accumulated experience and know-how, including measures to conserve energy and prevent the spread of diseases.
Promotion of DX
Implemented a new "area management" model for facility management
With the aim of building a sustainable business model that addresses the growing personnel shortage, we are implementing "area management," a new facility management model that leverages IoT and other technologies to efficiently manage multiple facilities by area.
In the first half of the current fiscal year, we newly reduced or eliminated personnel at a total of 39 facilities (312 facilities in total), and eliminated 43 resident facility management staff positions (210 in total). In line with the reduction in resident positions, we reallocated the specialized personnel to newly commissioned properties, as well as to the sales and construction divisions, in order to leverage their expertise cultivated in facility management to further expand earnings opportunities.
Transformation of facility management operations
Since the previous fiscal year, we have been working to transform facility management operations by leveraging digital devices with the aim of further improving productivity for on-site operations. We automated routine tasks such as facility inspections and reporting by using cameras and sensors. In addition, we established a system that visualizes energy consumption for each facility, which we newly introduced to 86 facilities (257 facilities in total) in the first half of the current fiscal year.
Group Management
Domestic Group companies
Sales and profits at AEON DELIGHT CONNECT CO., LTD. , our core company engaged in small- and medium-sized facility management, rose substantially on the back of new recurring contracts from convenience stores and restaurant chains, as well as growth in contracts for various types of construction work. In addition, earnings at AEON Compass Co., Ltd., which operates travel-related businesses, recovered significantly thanks to strong sales of business trip management services and corporate travel services in line with a recovery in people going out. As a result, sales and profits at domestic Group companies grew as a whole.
China business
In China, which we position as the largest growth area in Asia, we steadily expanded our business by boosting our customer share through our core operating companies, adding new contracts targeting mid- to high-end facilities, and taking on concentrated facility management contracts by participating in urban development projects. However, operating income fell slightly year-on-year owing to higher labor costs.
ASEAN business
Sales grew substantially in each of the ASEAN countries we operate in, partly because the economies of these countries showed signs of recovery after being stagnant under the COVID-19 pandemic. However, the ASEAN business as a whole posted higher sales and lower profits due to the impact of rising labor costs in Malaysia following the revision of employment laws, etc.