Earnings Presentation
Third Quarter, FYE December 2020
November 2020

AOI TYO Holdings Inc.

Contents
1.
2.
3.
4.

Summary of Consolidated Financial Results
Consolidated Earnings Forecast
Medium-Term Plan Progress
Appendix - Stock Information, etc.

1

1.

Summary of Consolidated Financial Results

2

Financial Highlights
 Cancellations and postponements of filming work and a decrease in advertising demand resulted
in significant decline in net sales and losses were recorded for each profit measure.
 We recorded ¥311 million in extraordinary loss after relocating seven offices and reducing floor
space in pursuit of cost reduction measures implemented ahead of the schedule developed inAugust.
(million yen)

Q3 FY2018

Q3 FY2019

Q3 FY2020

YoY Change

Net Sales

45,36846,80434,450-12,354

Operating Income

2,365

1,153

-1,260-2,413

Ordinary Income

2,374

921-1,325-2,246

Profit Attributable toOwners of Parent

1,520

348-1,368-1,716

EBITDA

3,231

2,245-415-2,660
3

Trend of Net Sales by Quarter Sales continued to be sluggish through Q3, mainly due to a significant drop in Q2order backlog stemming from suspended economic activities under the state ofemergency declaration and uncertainty about the future.
19,42420,00015,521 15,470
15,00015,343

15,166

13,04918,425

16,168(million yen)

14,504

11,31810,083

10,000FY2018FY2019FY2020

5,000

0

Q1

Q2

Q3

Q4
4

Order Intake and Order Backlog by Quarter As economic activity resumed gradually after the lifting of the state of emergency
declaration, Q3 order backlog began to increase, amounting to ¥15,399 million as ofthe end of Q3 (up 6.4% year on year) .
20,000(million yen)
15,000Order intake FY2018
Order intake FY2019
Order intake FY2020

10,00014,985

15,912

16,91014,331 15,119 14,029

13,466

14,46915,39913,191

14,6065,000

0Order backlog FY2018
Order backlog FY2019
Order backlog FY2020

16,875 18,191 15,353

15,065 14,373 8,437

13,795 15,517 11,452

Q1

Q2

Q3

18,167 18,563

Q45

Trends of Operating Income by Quarter Although we recorded a net operating loss for Q3 due to lower sales, we reduced
the size of the loss compared to Q2 through cost reductions ahead of schedule andimproved effective profit margin.
1,500
1,000

1,092

1,068

500
0-500
-1,000-1,500

654

633

116

Q1965

(million yen)

619
337

183

Q2

FY2018Q3

Q4-379FY2019FY2020-997

6

Net Sales by Business Segment
 Video Advertising Business recorded lower sales from major advertising agencies.
 Advertisement-Related Business continued to see cancellations and postponements of events.
 Solutions Business, which performed roughly level year on year through Q2, recorded lower Q3
results due to voluntary restraints on in-person sales activities during the state of emergency.
(million yen)

32,267
10,832

23,833
6,951

6,320
1,998

21,435

2019

16,882

2020

Video Advertising

5,693
4,175
1,300

4,322
2019

2,308

4,684
1,293

2,524

1,758

2,875

3,385

3,391

1,030
1,494

539
1,219

2020

2019

2020

2019

2020

Advertisement-Related

Solutions

Overseas7

Overview of Business Segments
BusinessVideo Advertising

Overview
Planning and production of TV commercials, online video, and other video
advertising

Advertisement-Related

Planning and production of movies, TV dramas, and events; production of digitalcontent, promotional content, and music videos

Solutions

Solutions that answer customer issues(direct business with advertisers, video
content marketing, etc.)

Overseas

Business in Southeast Asia and other locations overseas; video production
orders received from overseas

8Net Sales by Customer(million yen)

21.3%
Q3 FY2019

28.3%

9,948

13,25429.9%
14,002

9,599* Net sales from Dentsu Inc. (non-consolidated) were 8,816 million yen, and net sales from Hakuhodo Inc.
(non-consolidated) were 10,075 million yen.

24.5%

21.4%
Q3 FY2020

7,363

8,44731.7%
10,909

20.5%

22.4%

Dentsu Group
Hakuhodo Group
Direct transactions
Other

7,729

* Net sales from Dentsu Inc. (non-consolidated) were 6,666 million yen, and net sales from Hakuhodo Inc.
(non-consolidated) were 6,699 million yen.

9Net Sales by Medium
Q3 FY2019

Component
Ratio

27,91659.0%

19,79456.7%-8,122

TV commercial

26,731

56.5%

19,04854.6%-7,683

Printed commercial materials

1,185

2.5%

746

2.1%

-439

Entertainment contents

1,359

2.9%

1,658

4.8%

+299

Digital contents

9,513

20.1%

8,030

23.0%

-1,483

Overseas

2,522

5.3%

1,575

4.5%

-948

Other

6,030

12.7%

3,825

11.0%

-2,205

Total

47,341100.0%

34,882100.0%-12,459(million yen)

TV commercial production

Q3 FY2020

ComponentRatio

YoY
Change* The results are simple totals of the consolidated financial results of AOI Pro. Inc. and TYO Inc.
10

Summary of Consolidated Balance Sheet Cash and cash equivalents amounted to ¥14,238 million, as we maintained a high 246.6% liquidity ratio.
 We closed commitment lines with a number of financial institutions for a combined ¥12 billion,securing sufficient liquidity. (¥0.0 billion outstanding as of June 2020)(million yen)

FY2019Q3 FY2020

Major Components
Cash and deposits (+5,127); notes and accounts receivable (8,028); electronically recorded monetary claims (-2,091)

Current Assets

36,00332,547

Non-current Assets

17,34816,89153,35249,438Current Liabilities

18,343

13,196

Accounts payable (-3,159); short-term loans payable (-3,200)

Non-current Liabilities

11,645

14,663Long-term loans payable (+3,190)

Total Liabilities

29,98827,859

Total Net Assets

23,363

21,578

Total Liabilities and Net Assets

53,35249,438

Total Assets(percentage of total assets)(43.8%)(43.6%)

Retained earnings(-1,654)

11

Video Advertising Business Effective profit margin rose significantly, due in part to decreased cost billings for
projects that had been canceled or postponed due to the impact of COVID-19.
 Orders heading into Q4 are increasing, leading us to expect a recovery in sales.
40.0%

30,00036.3%
33.5%
20,000

34.2%
32.1%

31.4%

35.0%

30.0%
10,000020,35917,303

21,941
16,484

6,602705474211

312

1H FY2019

2H FY2019

1H FY2020

Q3 FY2020

2H FY2020

Results

Results

Results

Results

PlannedProduction sales (left axis)
Print sales (left axis)
Effective profit margin (right axis)

25.0%

789

(million yen)

* Effective profit margin: (net sales external expenditures)/net sales

20.0%* Calculations for the TV commercial
production department on

12Solutions Business (1) - TYO Offering Management Business Unit
 The impact of Q2 voluntary restraints on face-to-face sales activities contributed tolower Q3 sales; however, the resumption of sales activities have resulted in strong
Q4 orders, leading to expectations for sales that outperform the revised plan.
Sales at the TYO Offering ManagementBusiness Unit(million yen)

*Excluding media placement purchases
4,723

5,000

3,717

4,000
3,000
2,000
1,000
0

2,741
922
1,819
FY2018

3,239
1,166

2,073

FY20192,844

3,400894■■ Results: 1H■■ Results: Q3■ Results: Full-year
Planned: Full-year

1,950

FY202013

Solutions Business (2) - Quark tokyo + Mediator Despite the impact of advertiser budget cuts, orders began to return in Q3, and wealso expect to book sales for major projects in Q4, projecting Q4 performance tooutperform revised plan.
Sales at Quark tokyo + Mediator

3,000

2,226
2,000

2,087

1,547

1,578

452

546

1,109

1,000

1,400

■■ Results: 1H■■ Results: Q3■ Results: Full-year
Planned: Full-year307
1,0950(million yen)

FY20181,032

FY2019802
FY202014

Advertisement-Related Business While Q3 continued to experience the negative impact of event cancellations andpostponements, we received orders for major live events in Q4.
 Hybrid online/live events are becoming a new mainstream format and driving ourcustomer base expansion.
sales in Advertisement-Related Businesses

12,000(million yen)

9,846

9,644
9,000

6,000

3,000

0

5,895
1,952

6,500

6,320
1,998

4,175

■■ Results: 1H■■ Results: Q3■ Results: Full-year
Planned: Full-year

1,300
3,943
FY20184,322

FY20192,875
FY202015

Overseas Business The spread of COVID-19 has not resolved in certain areas of Southeast Asia,
resulting in a continued negative impact on sales.

Scale of sales in Overseas Businesses

5,824

6,000

4,320
4,000

2,0000(million yen)

* Including equity-method affiliates

8,000

1,713

5,679
4,200

4,021
1,532

2,826

■■ Results: 1H■■ Results: Q3■ Results: Full-year
Planned: Full-year

945
2,607
FY20182,489
FY20191,881
FY202016

2.

Consolidated Earnings Forecast17Progress in Consolidated Earnings Forecast
 After a significant decline in orders in Q2, orders began to increase in Q3 and we
expect to see sales growth in Q4.
FY2020(million yen)

Q3 Result

FY2020Fiscal Year
YoY Change
Forecast

FY2020

AmountRequired for Q4

YoY Change

Net Sales

34,45050,000-15,229

15,550-2,875

Operating Income-1,260-1,400-3,518-140-1,105

Operating Margin

-3.7%

-2.8%

---

Ordinary Income-1,325-1,500-3,263-175-1,017

Profit Attributable toOwners of Parent-1,368-1,500-220-132+1,496

EBITDA-415-230-3,836-18

3.

Medium-Term Plan Progress

19New Organizational Structure after January 2021 (Tentative)
 In line with our medium-term plan, we formalized intentions for a reorganization onOctober 19.
 Beginning January 2021, we will operate under two businesses: Content Production
and Communications Design.

Consolidated subsidiaries: 23
Domestic: 10 (-9)
Overseas: 13 (-1)

20Status of Cost Reduction Measures
Implement cost reduction measures described in our medium-term plan ahead ofschedule Office consolidation and reduction

Planned Cost Reductions -¥0.48 billion- Finalized Q3 office reductions (below), considering additional cost reduction measures for Q4

No. of offices reduced

7 offices

Extraordinary loss

¥0.31 billionFY2021 rent savings¥0.42 billion**Comparison excludes move-out rent payments (duplicate rent payments)

 Reduced expenses:

Advertising/entertainment/travel/meeting expenses, etc.
Q3 FY2019¥1.42 billion

Q3 FY2020¥1.01 billion

Planned savings -¥0.45 billion
YoY reduction¥0.41 billion
21

4.

Appendix - Stock Information, etc

22

AOI TYO Group*As of Sep. 30, 2020.

Consolidated subsidiaries: 32 total
Consolidated employees: 1,742

Date of establishment: Oct. 25, 1963

Consolidated subsidiaries: 17 (including AOI Pro.)

OsakiConsolidated employees: 800

Date of establishment: Apr. 2, 1982

Consolidated subsidiaries: 15 (including TYO)

Consolidated employees: 782

23

Status of Stock and Shareholders (as of Jun. 30, 2020)
Number of Shares and Shareholders

Status of Large Shareholders

Total number of shares issued

24,566,447

Total number of shareholders

16,170Shareholder Composition byType of Shareholder

2.8%

Individuals, etc.

3.6%
13.6%

Financial institutions
Financial instruments
business operator

1.7%
17.4%

60.9%

Other corporations
Foreign corporations,etc.
Treasury sharesShareholder Name

Number of
Shares Held

Shareholding
Ratio

1Cosmo Channel

1,153,740

4.83%

2

IMAGICA GROUP Inc.

1,018,000

4.26%

3

The Master Trust Bank of Japan, Ltd. (Trust Account)

807,400

3.38%

4Japan Trustee Services Bank, Ltd. (Trust Account)

669,900

2.81%

5

Fields Corporation

479,660

2.01%

6

Yoshihiro Takebayashi

478,100

2.00%

7Japan Trustee Services Bank, Ltd. (Trust Account 5)

417,500

1.75%

8

Trust & Custody Services Bank, Ltd. (Trust Account E)

411,200

1.72%

9Hitoshi Hara

400,000

1.68%

10Credit Suisse Securities (Japan) Limited

340,500

1.43%* The shareholding ratios are calculated by subtracting treasury shares (691,252).
*The number of shares held by Cosmo Channel Co., Ltd. includes 320,000 shares under a stock loanagreement with Japan Securities Finance Co., Ltd.

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Disclaimer
This document includes future forecasts that reflect the plans and outlook of AOITYO Holdings.
The future forecasts and related descriptions are based on information available tothe company at the time of the preparation of this document, and the forecasts areaffected by the economic environment of the company’s businesses, competition, theresults of new services provided, and other factors that involve uncertainties. Pleaseacknowledge, therefore, that the actual business results may deviate significantly
from the forecasts and related information provided in this document.
In addition, the company does not have any obligation to update and publish theinformation concerning future forecasts in this document after its publication.
Please contact the following for any questions:Contact (http://aoityo.com/en/contact.html)
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