Summary of Consolidated Financial Results (Japanese Accounting Standards)
for the Second Quarter of the Fiscal Year Ending December 31, 2019
August 14, 2019
Company name:
AOI TYO Holdings Inc.
Stock Exchange:
Tokyo Stock Exchange
Code:
3975
URL:
http://aoityo.com/en/
Representatives:
Yasuhito Nakae, Representative Director
Inquiries:
Satoshi Yuzurihara, Executive Director
Tel: +81-3-3779-8415
Scheduled date of submission of quarterly report:
August 14, 2019
Scheduled date of commencement of dividend payment:
September 17, 2019
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:
Yes(for institutional investors and analysts)(Rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter (from January 1, 2019 to June 30 2019)(1) Consolidated operating results(The percentages are year-on-year changes.)
Net sales

Profit attributable toowners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

30,63630,864

-0.7
-8.5

816
1,746

-53.2
-26.0

637
1,680

-62.1
-27.1

257
1,170

-78.0
-1.6

Q2 FY2019
Q2 FY2018(Note) Comprehensive income

Operating income

Q2 FY2019: 66 million yen (-94.0%)

Net income per share
Q2 FY2019
Q2 FY2018

Q2 FY2018: 1,095 million yen (-9.5%)

Diluted net income
per share

Yen

Yen

10.95
49.22

10.91
48.57

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

Q2 FY2019
FY201856,71755,631

25,15025,67943.4
45.1(For reference) Shareholders’ equity

Q2 FY2019: 24,590 million yen

FY2018 25,114 million yen

2. Dividends
Dividends per share
End of Q1

End of Q2

Yen

End of Q3

Yen

FY2018‒8.00
FY20198.00－
FY2019 (forecast)(Note) Revisions to dividends forecast published most recently: No

Year end

Yen‒

Annual
Yen

Yen

22.00

30.00

12.00

20.00

3. Consolidated Financial Forecast for FY2019 (January 1, 2019 to December 31, 2019)

Net sales
Full year(The percentages are year-on-year changes.)
Profit attributable to Net income per
Ordinary income
owners of parent
share

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

63,600

-1.8

2,300

-33.0

2,150

-35.3

1,050

-46.2

44.63

(Note) Revisions to earnings forecast published most recently: No

* Notes(1) Important changes in subsidiaries for the third quarter under review (Changes is specified subsidiaries resulting inchange in scope of consolidation):No

New: ― companies

Excluded: ― companies(2) Application of accounting treatment specific to the preparation of quarterly consolidated financial statements:
Not applicable(3) Changes in accounting policies, and changes or restatements of accounting estimates(i)
Changes in accounting policies due to revisions to accounting standards etc. :Not applicable(ii)

Changes in accounting policies other than (i):Not applicable(iii)

Changes in accounting estimates::

Not applicable(iv)

Restatements of accounting estimates::

Not applicable(4) Number of issued shares (common stock)(i)
Number of issued shares (including treasury stock
Q2 FY2019(ii)

FY201824,566,447 shares

FY20181,013,157 shares

Number of treasury stock at end of period
Q2 FY2019(iii)

24,566,447 shares

1,109,191 shares

Average number of issued shares

Q2 FY201923,528,173 shares
Q2 FY201823,785,594 shares(Note) The number of treasury stock includes the 418,900 shares that Trust & Custody Services Bank, Ltd. (trust
account E) holds as trust property related to a Board Benefit Trust system.
*
This summary of quarterly financial results is not included in the scope of the quarterly review.
*
Explanation on the proper use of results forecasts and other notes- The forward-looking statements, including results forecasts, in this document are based on information that AOITYO Holdings has obtained at the time of publication and certain assumptions that it believes to be reasonable.
Actual results may differ materially from the forecasts due to a variety of reasons. For the assumptions of results
forecasts and notes on the use of results forecasts, please refer to 1. Qualitative Information on Results in theFirst Quarter, (3) Description of Information on Outlook on page -three of the Accompanying Materials..
- AOI TYO Holdings will hold an earnings briefing for institutional investors and analysts on September 3, 2019.
After the conclusion of this meeting, the group will publish the materials distributed on the AOI TYO Holdings
corporate website as quickly as possible.

Attachments
1. Qualitative Information on Results in the First Quarter

2(1) Description of Results of Operations

2(2) Description of Financial Position

3(3) Description of Information on Outlook

3

2. Quarterly Consolidated Financial Statements and Major Notes

4(1) Quarterly consolidated balance sheets

4(2) Quarterly consolidated statements of income and statements of comprehensive income

6(3) Consolidated Statements of Cash Flows

8(4) Notes to Quarterly Consolidated Financial Statements

10(Notes regarding assumption of going concern)

10(Notes in the event of significant changes in shareholders’ equity)

10(Segment Information)

10(Supplementary Information)

10

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1. Qualitative Information on Results in the First Quarter(1) Discussion of operating results
Any forward-looking statements below are based on AOI TYO Group judgments as of the end of the current consolidated fiscal year.
The Japanese economy showed signs of a standstill during the second quarter of the current consolidated fiscal year. While recovery
in public works investment, personal consumption, and other internal demand experienced a gradual recovery, sluggish growth inexternal demand, mainly to Asia, has dampened business sentiment. Combined with intensifying U.S.-China trade friction, the future
outlook of the Japanese economy is increasingly uncertain.
Operating in this environment, the AOI TYO Group recorded cumulative consolidated net sales essentially leveled the same period
in the prior fiscal year. This result was mainly due to the industry transition to printless format for media (note) and a decrease inmedia handling for TV commercial slots, etc. in our Solutions Business. These factors outweighed an increase in orders/sales tomajor advertising agencies even under continued strict order acceptance for the benefit of work-style reform. Our order situation
continues to be strong most recently, with order backlog up 5.4% year on year to ¥15,119 million as of the end of the consolidated
second quarter.
Meanwhile, operating profit, ordinary profit, and net profit all underperformed year on year. This result was due to several negative
factors, including our adoption of work-style reform, cost increases accompanying new enterprise systems implementations at
subsidiary companies, and lower print sales, which has been a high-margin business for the company. Further, despite recording
extraordinary income stemming from the sale of strategic stock holdings, we also recorded extraordinary losses related to the business reorganization of poorly performing subsidiaries.
Moreover, given our current business results, we have revised our fiscal year earnings forecast to reflect only the underperformanceof the six-month period ending June 2019 from our initial earnings forecast published on February 19, 2019. See Revisions to Second
Quarter and Full-year Consolidated Performance Forecast, published August 9, 2019, for more details.
As a result, the AOI TYO Group recorded net sales of ¥30,636 million for the consolidated second quarter, representing a 0.7%
decrease compared to year-ago quarter. Operating profit amounted to ¥816 million (53.2% decrease), while ordinary profit and profit
attributable to owners of parent amounted to ¥637 million and ¥257 million, representing decreases of 62.1% and 78.0%, respectively.
Selling, general and administrative expenses included ¥152 million in amortization of goodwill associated with M&A activity.
(Note) Historically, television commercial content had been copied to media (“printed”) and delivered to each broadcast station. The
AOI TYO Group recognizes the sales and profits of this activity in our accounting records. As of October 2017, this content
can be delivered via online data transmission (“printless” format), leading to a decline in related sales and profits.
As of the first quarter of the current fiscal year, the AOI TYO Group initiated disclosure as a single segment. Accordingly, we do notprovide data by individual segment herein.

(2) Discussion of financial position
Total assets as of the end of the consolidated second quarter amounted to ¥56,717 million, a ¥1,085 million increase compared to theend of the prior consolidated second year. This increase was mainly due to increases in cash and deposits of 2,024 million yen andelectronically recorded monetary claims of 1,715 million yen, compared to a decrease in notes and accounts receivable of 2,696
million yen.
Liabilities increased by 1,615 million yen compared with the end of the prior fiscal year to 31,567 million yen. Although long-termloans payable increased ¥3,670 million, short-term loans payable and accounts payable decreased ¥1,277 million and ¥1,091 million,
respectively.
Net assets amounted to ¥25,150 million, a decrease of ¥529 million compared to the end of the prior consolidated fiscal year. Whileretained earnings rose ¥257 million due to profit attributable to owners of parent, the AOI TYO Group paid ¥527 million in dividend
payments and recorded a decrease of ¥138 million in valuation differences on available-for-sale securities.

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Cash and cash equivalents amounted to ¥11,676 million as of the end of the consolidated second quarter, representing a year-on-yearincrease of ¥1,901 million.
The following paragraphs summarize cash flow activity through the six-month period ending June 2019.
Cash Flows From Operating Activities
Cash used in financing activities amounted to ¥259 million compared to cash from financing activities of ¥3,148 million in the yearago period. This result was mainly due to outlays related to income taxes paid of ¥966 million and a decrease of ¥1,061 million innotes and accounts payable-trade, combined with proceeds of ¥566 million in profit before income taxes and a decrease of ¥881
million in notes and accounts receivable.
Cash Flows From Investing Activities
Cash used in investing activities amounted to ¥642 million, compared to ¥1,309 million in the year-ago period. This result was mainly
due to ¥394 million in outlays for the purchase of property, plant and equipment, ¥398 million in purchases of investment securities.
These outlays were offset in part by proceeds of ¥428 million in sales of investment securities.
Cash Flows From Financing Activities
Cash flows from financing activities amounted to ¥2,820 million, compared to cash used in financing activities of ¥3,895 million in the
year-ago period. This result was mainly due to ¥5,800 million in proceeds from long-term loans payable, offset by a ¥1,039 million
decrease in short-term loans payable and ¥1,225 million in repayments of long-term loans payable.

(3) Discussion of consolidated results forecasts
See Revisions to Second Quarter and Full-Year Consolidated Performance Forecasts, published on August 9, 2019, for more about
AOI TYO Group consolidated earnings forecasts for the fiscal year ending December 2019.

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2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheets(Unit: thousand yen)
FY 2018(December 31, 2018)

Q2 FY2019(June 30, 2019)

AssetsCurrent assets
Cash and deposits

9,836,071

11,860,680

Notes and accounts receivable - trade

16,731,160

14,034,181

Electronically recorded monetary claims - operating

4,273,694

5,988,800

7,544

7,444

4,256,243

4,583,897

Other876,667

855,770

Allowance for doubtful accounts-43,407-40,696

35,937,974

37,290,077

Land

3,615,121

3,606,822

Other

3,619,949

3,599,085

Total property, plant and equipment

7,235,071

7,205,907

Software1,590,986

1,429,746

Goodwill

4,117,710

4,026,414

64,172

77,647

5,772,869

5,533,809

Investment securities

3,147,176

3,045,397

Lease and guarantee deposits

1,619,387

1,492,837

Other2,025,326

2,864,481

Allowance for doubtful accounts-106,495-715,347

Total investments and other assets

6,685,395

6,687,369

Total non-current assets

19,693,336

19,427,086

Total assets

55,631,310

56,717,164

Merchandise and finished goods
Work in process

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

Other
Total intangible assets
Investments and other assets―4―

(Unit: thousand yen)
FY 2018(December 31, 2018)

Q2 FY2019(June 30, 2019)

Liabilities
Current liabilities
Accounts payable - trade8,126,930

7,035,353

Short-term loans payable

5,777,154

4,500,000

Current portion of long-term loans payable

2,159,836

3,104,755

Advances received

1,136,482

1,401,041

Income taxes payable

1,055,553

342,699

Provision for bonuses

115,779

119,613

Other

1,742,279

1,747,389

Total current liabilities

20,114,017

18,250,853

Long-term loans payable

4,549,727

8,220,651

Long-term deposits received

3,501,199

3,501,199

Provision for directors' retirement benefits

253,770

261,132

Provision for management board incentive plan trust

197,115

221,853

Net defined benefit liability

280,118

285,828

Asset retirement obligations

509,156

491,258

Other

546,278

334,285

Total non-current liabilities

9,837,367

13,316,210

Total liabilities

29,951,385

31,567,063

Capital stock

5,000,000

5,000,000

Capital surplus

12,106,819

12,098,984

Retained earnings

9,055,601

8,785,904

Treasury shares-1,190,097-1,258,889

Total shareholders' equity

24,972,324

24,625,999

Valuation difference on available-for-sale securities

167,873

29,623Foreign currency translation adjustment-23,287-63,372

Remeasurements of defined benefit plans-2,393-1,822

Total accumulated other comprehensive income

142,193-35,572

Share acquisition rights

92,72387,498Non-controlling interests

472,685

472,174

Total net assets

25,679,925

25,150,100

Total liabilities and net assets

55,631,310

56,717,164

Non-current liabilities

Net assets
Shareholders' equity

Accumulated other comprehensive income―5―(2) Quarterly consolidated statements of income and statements of comprehensive income
Quarterly consolidated statements of income
Consolidated second quarter(Unit: thousand yen)
Q2 FY2019(January 1, 2019 June 30, 2019)

Q2 FY2018(January 1, 2018 June 30, 2018)

Net sales

30,684,424

30,636,633

Cost of sales

24,713,361

24,900,706

Gross profit

6,151,063

5,735,926

Selling, general and administrative expenses

4,405,029

4,919,224

Operating profit

1,746,033

816,702

Interest income

5,741

4,699

Dividend income

19,887

13,847

Insurance return

7,095

28,688

Other

58,82056,399Total non-operating income

91,544

103,634

Interest expenses

40,312

36,957

Commission fee
Share of loss of entities accounted for using equity
method78,52981,1903,683

69,578

Other

34,45094,842

Total non-operating expenses

156,976

282,568

1,680,601

637,768

Gain on sales of non-current assets

401,336-

Gain on sales of investment securities

83,875281,355

288

2,448

485,500

283,803

Loss on sales of shares of subsidiaries and associates-

11,235

Loss on liquidation of subsidiaries and associates-

279,462

Loss on sales of investment securities-

64,824

Total extraordinary losses-

355,522

Profit before income taxes

2,166,101

566,049

Income taxes - current

1,015,079

378,826

Income taxes - deferred-44,156-48,042

Total income taxes

970,922

330,784

1,195,178

235,265

24,389-22,425

1,170,789

257,691

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Other
Total extraordinary income
Extraordinary losses

ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent―6―

Quarterly consolidated comprehensive statements of income
Consolidated second quarter(Unit: thousand yen)
Q2 FY2019(January 1, 2019 June 30, 2019)

Q2 FY2018(January 1, 2018 June 30, 2018)

Profit1,195,178

235,265

Valuation difference on available-for-sale securities-46,558-138,250

Foreign currency translation adjustment-47,664-25,823

Remeasurements of defined benefit plans, net of tax

461

571

Share of other comprehensive income of entities
accounted for using equity method-5,592-5,712

Total other comprehensive income-99,354-169,215

1,095,824

66,0501,077,831

87,094

17,992-21,043

Comprehensive income
Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests―7―

(3) Consolidated statements of cash flows(Unit: thousand yen)
Q2 FY2019(January 1, 2019 June 30, 2019)

Q2 FY2018(January 1, 2018 June 30, 2018)

Cash flows from operating activities
Profit before income taxes

2,166,101

566,049

Depreciation

450,968

562,430

Amortization of goodwill

160,709

152,724

Increase (decrease) in allowance for doubtful
accounts

3,621-5,227

Increase (decrease) in provision for bonuses

65,474

3,938

Increase (decrease) in provision for directors'
retirement benefits-35,484

7,362

Increase (decrease) in provision for management
board incentive plan trust

54,86824,737

Increase (decrease) in net defined benefit liability

16,557

5,709Interest and dividend income-25,628-18,546

Interest expenses

40,312

36,957

Commission fee

78,52981,190Loss (gain) on sales of investment securities-83,875-216,531

Loss on liquidation of subsidiaries and associates-

279,462

Loss (gain) on sales of shares of subsidiaries andassociates-

11,235

Loss (gain) on sales of non-current assets-401,336-

Decrease (increase) in notes and accounts receivable- trade4,674,709

881,890

Decrease (increase) in inventories-1,475,939-351,671

Increase (decrease) in notes and accounts payable trade-1,490,387-1,061,963

Increase (decrease) in accounts payable - other-231,749-16,321

Increase (decrease) in accrued consumption taxes-559,907

33,028

Increase (decrease) in advances received

595,923265,600

Decrease (increase) in other assets

41,554-625,498

Increase (decrease) in other liabilities

102,181

68,718Other, net

30,14536,503

Subtotal

4,177,348

721,779

Interest and dividend income received

25,73322,292

Proceeds from insurance income

7,095

4,804

-35,407-42,065

Income taxes paid

-1,025,813-966,594

Net cash provided by (used in) operating activities

3,148,955-259,783

Interest expenses paid

―8―

(Unit: thousand yen)
Q2 FY2019(January 1, 2019 June 30, 2019)

Q2 FY2018(January 1, 2018 June 30, 2018)

Cash flows from investing activities
Purchase of property, plant and equipment-774,463-394,489

Proceeds from sales of property, plant and equipment

1,331,515

8,937

Purchase of intangible assets-497,111-27,795

Purchase of investment securities-679,863-398,445

Proceeds from sales of investment securities

114,738

428,455

Payments for investments in capital-180,587-161,900-6,980-220,673-324,939-37,605

21,503136,033

Purchase of shares of subsidiaries resulting in change
in scope of consolidation-319,161-38,088

Payments for sales of shares of subsidiaries resulting
in change in scope of consolidation--38,614

5,538

101,940-1,309,812-642,246

Net increase (decrease) in short-term loans payable-4,600,975-1,039,000

Proceeds from long-term loans payable

3,610,043

5,800,000

Repayments of long-term loans payable-1,578,399-1,225,543

Cash dividends paid

-527,725-517,196

Purchase of treasury shares-537,764-79,650

Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation-183,225-

Commission fee paid

-78,529-81,190

1,545-36,869-3,895,029

2,820,549-49,328-17,102

Net increase (decrease) in cash and cash equivalents-2,105,215

1,901,417

Cash and cash equivalents at beginning of period

12,372,307

9,790,600--16,011

10,267,091

11,676,006

Payments into time deposits
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents

Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Cash and cash equivalents at end of period―9―(3) Notes to quarterly consolidated financial statements(Notes on the premise of a going concern)
Not applicable.
(Notes in the event of significant changes in shareholders’ equity)
Not applicable(Segment Information)
Business Segment Information
I Q2 FY2018 (January 1, 2108 - June 30, 2018)
As disclosed under (Notes related to changes in reportable segments, etc.) for the second quarter of the current consolidated
fiscal year.
II Q2 FY2019 (January 1, 2019 - June 30, 2019)
As the AOI TYO Group consists of a single Advertising Business segment, we have omitted separate disclosure herein.
(Notes related to changes in reportable segments, etc.)
The AOI TYO Group had consisted of two reportable segments: Advertising Business and Video-Related Business. However, asof the first quarter of the current consolidated fiscal year, the group consists of a single business segment.
This change is due to the fact that sales and profits in the Video-Related Business have become of only minor importance to thegroup after the transfer of consolidated subsidiary Hollyhock Inc. shares, resulting in the removal of said company fromconsolidation. Further, after reconsidering the AOI TYO Group business, management asset allocation, the state of business
management systems, etc., we made the rational decision to manage our whole business under a single segment defined as
Advertising Business.
With this change, the AOI TYO Group now consists of a single Advertising Business segment. Accordingly, we have omitted
reporting of segment information for the first quarters of the prior and current consolidated fiscal years.
(Supplementary Information)
The company adopted Partial Amendment to Accounting Standard for Tax-Effect Accounting (ASBJ Statement No.28,
February 16, 2018) at the beginning of the first quarter of the current consolidated fiscal year. Under this standard, thecompany presents deferred tax assets under investments and other assets and deferred tax liabilities under non-current
liabilities.

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