The major rating factors for Aeon Co. Ltd. are as follows: Strong profit base and cash flow generation, underpinned by competitive private-brand products, superior distribution and inventory control systems, and successful store opening and closing strategies. Diversified profitability within the group, in terms of both geography and retail formats. Slightly weak capital efficiency and capital structure compared with its global peers, although these are improving. Severe business conditions in the Japanese retail industry, characterized by fierce competition and shortened product cycles. Aeon maintains adequate liquidity, backed by diverse funding sources and a well-spread maturity structure for existing debt. As of the end of the first half of fiscal 2003 (ended August 2003), the company had total debt of ¥733.5 billion
