AEON Mall : Integrated Report 2023 (Year ended February 28, 2023)(Full)

AEON MALL Integrated Report 2023 Content Overview

Introduction

01 Introduction

21 Value Creation Strategy

Human Resources Strategy:

70 Corporate Governance

01 Content Overview (Table of Contents)

22 Three-YearMedium-Term Management Plan Overview and Progress

71

Basic Approach and Corporate Governance Reform History

02 IR Communication Overview and Editorial Policy

03 Basic Philisophy, Management Philosophy, and Management Vision

1. Corporate Governance Structure
2. Board of Directors

02 IR Communication Overview and Editorial Policy

Basic Philosphy,

04 Top Message

74

Director Expertise and Experience Skills Matrix

03 Management Philosophy, and Management Vision

75

Board of Directors Operation and Evaluation of Board Effectiveness

09 2030 Vision

2030 Vision

09 Be a Co-Creator of a Sustainable Region as a Life

Growth Initiatives

28 Discover and Commercialize Business Opportunities in Overseas Growth Markets

50 1 Diversity Management: Expanding Individuality, Pioneering Future

53 2 Health Management: Vibrant, Healthy, Sustainable

55 3 Adopt Developing Mutuals: Choose, Be Chosen, Be Social

4 Fostering Human Resources for

1. Officer Compensation
2. Operational Status of Each Committee
3. Protection of Minority Shareholders

92 Stock Information

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Top Message

Seizing on social change as opportunity,

we will shift paradigms through co-creation with local communities, reassessing current business models and creating new value.

FY2022 Review and Issues for FY2023

Impacted by COVID-19 in fiscal 2022, but strengthening a foundation for future growth.

AEON MALL sees the challenges that will emerge in fiscal 2023 and the transition to post-COVID-19 as opportunities to pursue change.

Yasutsugu Iwamura

President and CEO

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AEON MALL Co., Ltd. (the "Company") has defined a Vision for 2025 by which we will pursue our management philosophy and achieve further business growth. We are working together with local communities to achieve sustainable growth by creating economic, social, and environmental value.

In fiscal 2022, the final year of our most recent medium-term management plan, we achieved year-on-year growth in operating revenue, operating income, and ordinary income. However, many countries in which we operate experienced the negative impact of COVID-19. At the same time, our overseas business contributed to AEON MALL Group (the "Group") profit growth through record-high profits. Despite the impact of rapid changes in the business environment, we made steady progress in strengthening the foundation of future growth, opening five new malls overseas and seven in Japan during the past three-year period.

Entering 2023, we saw the beginnings of post-COVID advancements across numerous countries. Sales and customer traffic are improving. However, new challenges are emerging due to changes in economic situations and social environments, not to mention evolving customer values and needs.

In these times of uncertainty, we must always meet the expectations of our customers and transform ourselves into a company that supports and is supported by our communities more than ever. Beyond the framework of commercial shopping facilities, we intend to take on the challenge of fostering deeper ties with communities and business partners, reforming old business models and creating new values.

Consolidated Statements of Income

• 101.07 -

• Announced April 2022

Top Message

2030 Vision: Achieving Our GoalsThrough Community Co-Creation

We work together with like-minded stakeholders to co-create activities that lead to sustainable futures for our communities.

This year, we crafted a new 2030 Vision, Co-CreatingWith Our Communities.

2030 Vision

AEON MALL, Co-Creating With Our Communities.

Our corporate stance is the following:

2030 Vision Movie

2030 Vision: AEON MALL, Co-Creating With Our Communities. We produced a 2030 Vision short movie to communicate our vision to stakeholders.

Our 2030 Vision defines the future for which we strive as a developer. This vision also describes our goals for the year 2030 as part of the process toward becoming a company that will touch the hearts of 5 billion visitors throughout Asia. To us, community co-creation means creating relationships with all manner of like-minded people, engaging in activities that lead to broader, deeper, and more sustainable futures for the communities we serve. Community co-creation is the center of the thoughts and values of AEON MALL as a company and of every AEON MALL Group employee.

Over the past several years, customers and local communities have come to expect different and more diversified values. Our specialty store partners have changed their business policies, store opening strategies, and other approaches in significant ways. Against this backdrop, we know we must contribute

What we will change

1. The value of our existence
2. The drivers of business execution
3. The fields in which we conduct activities

What we will leverage

1. The physical AEON MALL locations and network of assets spread across Japan and Asia
2. The aggregate value of these networks
3. The safety, security, reliability, and operational level cultivated over the years

https://www.aeonmall.com/en/ir/ movie_01.html

more than ever to sustainable societies through our business activities. However, there are limits to what we can achieve alone in an increasingly complex world.

Our 2030 Vision reflects these realities. In every country and region where we operate, AEON MALL co-creates optimal solutions, working together with like-minded companies, organizations, local governments, educational institutions, and individuals. We work in empathy with stakeholders to achieve an ideal future for community living.

To transform our company into a community co-creator, we must work along two axes: (1) what we can change as a corporate entity and (2) what we must utilize in terms of the management assets we have cultivated over the years.

The first three changes will be the value of our existence as a corporate group, the drivers of business execution, and the fields in which we conduct activities. As we leverage assets distributed throughout AEON MALL locations, we will bring new value to our communities as a presence that transcends the traditional framework of commercial shopping facilities. We will not be alone in driving the implementation of these activities, but rather work together with like-minded partners to resolve issues. And we will not limit ourselves to our own commercial shopping facilities, but instead, use every aspect of the community as our playing field to create solutions to local issues.

Leveraging our management assets consists of three elements: Our physical locations spread across Japan and Asia, our networks and the aggregate value of these networks, and the safety, security, reliability, and operational excellence we have cultivated over the years. Our locations-tangible

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assets-are found throughout Japan and Asia, creating unique interconnected networks. These locations and networks represent a major competitive advantage no other company can match if they attempt to build from scratch. And each location represents a community platform offering collective value that brings people, goods, and information together in one. We will use these platforms to offer value beyond commerce. Further, consumers identify our brand with safety, security, and reliability, which we have cultivated through unified operations in Japan and Asia. Our structures and corporate culture ensure we offer stable, high levels of service. This brand and culture are overwhelming advantages no other company could hope to attain. These elements are also a source of competitive advantage in our transformation as a community co-creator, and we intend to capitalize on these strengths.

Based on these perspectives of change and utilization, we launched a co-creation program last fiscal year, entered into a capital and business alliance with Marimo Co., Ltd. (a residential and income-producing real estate development company), established the Life Design Fund CVC, and are working toward the 2024 completion of a joint transportation system to solve logistics issues. In these ways and more, progress toward our 2030 Vision is already bearing fruit.

No doubt, more emphasis will be placed on solutions tailored to each community rather than a one-size-fits-all solution across countries or regions. This is exactly why we are unwilling to be bound by a conventional framework centered on commercial shopping facilities but rather pursue transformation toward community co-creation to solve the issues faced by each community.

studio LIFE DESIGN

studio LIFE DESIGN is an internal, cross-organizational project to discuss the future of AEON MALL under an operating approach of free thinking and no rules. Participants representing a cross-section of job descriptions and seniority look ahead to the future and discuss the type of company AEON MALL should strive to be for society and the steps to achieve this ideal future, translating words into actions.

P.11

Top Message

Formulating the FY2023-FY2025Medium-Term Management Plan

To achieve our 2030 Vision, we must identify changes in the business environment and formulate specific strategies to grow as a sustainable company together with our communities.

The COVID-19 pandemic began in 2020 and lasted so long that it fundamentally changed consumer behavior. Add to that the Russian military invasion of Ukraine and global-scale inflation for the first time in half a century. In Japan, the factors contributing to inflation are more complex, compounded by the effect of the weak yen.

Soaring construction costs caused by rising construction material prices, labor shortages, and other factors will have a significant medium- to long-term impact on our business model. We must consider not only how to improve investment efficiency, but also what investments are necessary for the future.

The impact of social change is not a complete risk for our business. I believe if we focus on each community, we will uncover many opportunities. Rather than a one-size-fits-all response to events across the country, we envision the emerging challenges each community faces and the potential challenges that will arise in the future, striving to turn the response to these challenges into new businesses.

We engage in ESG management as a measure of growth. To evolve ESG management further under our new medium-term management

plan (FY2023-FY2025), we (1) pursue a regional shift in Japan and overseas and (2) create a Health and Wellness platform, aiming for sustainable

growth through truly integrated ESG management that creates economic,

social, and environmental value for our stakeholders. Specifically, we develop growth measures to discover and commercialize business opportunities in overseas growth markets, pursue business model innovation in Japan, and create

business models that break from existing business frameworks.

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We also strive to build strong financial foundations and resilient organizations from the perspective of sustainability.

We believe digital transformation (DX) is an important element in creating new business models that break from existing business frameworks. We strive to achieve DX not for its own sake, but as a means fulfill desires and to achieve the future that we envision.

ESG management is more than social contribution. It is a means for corporate survival and an evaluation standard for stakeholders to judge whether a company accurately perceives social and environmental issues as opportunities and risks, and whether a company has the mechanisms and will to address these opportunities and risks. Customers and stakeholders should look not so much at the past or the present, but whether a company will offer value in the future. Our aim is to be a company that solves social issues and delivers the economic value and social value demanded by stakeholders.

Truly Integrated ESG Management

Medium-Term Management Plan

(FY2023-FY2025)

We engage in ESG management as a measure of growth. To evolve ESG management further, we (1) pursue regional shift in Japan and overseas and (2) create a Health and Wellness platform, aiming for sustainable growth through truly integrated ESG management that creates economic, social, and environmental value for our stakeholders.

P.23

Top Message

Building Organizations From the Perspective of Sustainability

Raise awareness of the importance of human capital management and strengthen our organizational governance structure while.

We believe the most crucial factor in achieving truly integrated ESG management is the people who must implement these initiatives. Last year, we created the AEON MALL Human Resources and Organizational Vision. This vision describes people as the most important factor in achieving the AEON MALL 2030 Vision. Having redefined our business as community co-creation, we require Group employees from every

division to affirm their role as Life Design Producers and to be aware of the part they play in designing the future of living. Further, I believe we will create a sustainable corporate group and sustainable communities as we endeavor faithfully to achieve our vision, acting as a group of professionals who continue to innovate.

We view people as our greatest management resource for sustainable growth. Therefore, our medium- term management plan and the basic AEON MALL growth strategy will define the linkage between our human resources strategy, our management philosophy, and our growth strategy. The plan will also disclose specific initiatives that we will implement.

AEON MALL is a listed subsidiary of AEON Co., Ltd. Investors and stakeholders demand that we conform to the high levels of transparency and fairness expected of a publicly listed company. In May of this year, we adopted an executive officer system to improve the effectiveness of our Board of Directors and strengthen our governance structure. In addition to increasing transparency and fairness in management, we will develop an organizational structure that clarifies responsibilities for business execution, hastens the speed of decision-making, and incorporates training for the next generation of managers.

Conflicts of interest with the parent company are one of the greatest concerns of minority shareholders in publicly listed subsidiaries. Our Governance Committee, consisting solely of independent outside directors, discusses and confirms the reasonableness and appropriateness of intra-Group transactions from a standpoint independent of the controlling shareholder and corporate management. The committee reports its findings to the Board of Directors to ensure effectiveness under this rigorous system of checks and balances.

We recognize the need to improve governance, and we intend to raise corporate value by strengthening governance through dialogue with our stakeholders.

Investing in Human Capital

Human Resources Strategy Supporting Management Strategy

We understand that human capital is the most important capital in achieving truly integrated ESG management for sustainable growth. We intend to pursue human capital management (human resources management) in conjunction with management strategies for the growth of the human resources who will take the sustainable corporate value of AEON MALL to greater heights.

P.47

Human

Resources and

Organizational

Vision

Future Ideal for Our Human Resources

Life Design Producer

1. Develop human resources capable of achieving self-fulfillment from the perspectives of positive outcomes for co-workers, for local communities, and for the future
2. Develop human resources capable of creating and nurturing relationships
3. Develop human resources who can envision their own ideal future by making the most of their individuality

Future Ideal for Our Organization

A Group of Professionals Who Continue to Innovate

1. Become an organization that creates customers constantly and pioneers new areas of business
2. Become an organization that expands and deepens relationships
3. Become an organization with a culture that respects each employee, and allows them to maximize their talents

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