Earnings Presentation
Third Quarter, FYE December 2019
November, 2019

AOI TYO Holdings Inc.

Contents
1. Summary of Consolidated Financial Results
2. Consolidated Earnings Forecast
3. Appendix - Company Profile, Stock Information, etc.

1

1. Summary of Consolidated Financial Results

2

Financial Highlights
 Net sales grew due to increase of direct transactions. On the other hand, cost
increases for new enterprise systems and lower profit margins associated withhigher order volume in the Video Advertising Business led to lower profits year onyear.
(million yen)

Q3 FY2017

Q3 FY2018

Q3 FY2019

YoY Change

Net Sales

49,33945,36846,804+1,435

Operating Income

3,519

2,365

1,153-1,212

Ordinary Income

3,372

2,374921-1,453

Profit Attributable toOwners of Parent

1,897

1,520

348-1,172

EBITDA

4,389

3,231

2,245

-986
3

Trend of Net Sales by Quarter and Order Backlog
 Net sales for Q1 and Q2 were level year on year; however, Q3 net sales werehigher year on year.
 End of Q3 order backlog amounted to 14,469 million yen (up 7.4% year on year)
demonstrating order strength.
25,00020,000

21,134
18,472
15,521

15,00015,47015,257 15,343 15,166

15,610 14,504(million yen)
19,424FY2017

16,168FY2018FY2019Order backlog FY2017

10,0005,000
0Order backlog FY2018

15,912
14,261

14,985

Q1

15,11914,016

14,331

Q2

Order backlog FY2019

14,46917,322

13,466

Q3

13,631

13,191Q4
4

Trends of Operating Income by Quarter We experienced lower margins in the Video Advertising Business (which hadexperienced improving margins to date) due to expanding order volume. Q3
operating profit rose compared to Q2 due to sales growth.
2,000

1,820
(million yen)

1,500
1,160

1,092

1,101 1,068

1,000
633

500
0539

654

Q1

Q2

FY2018619

FY2019

337

183

Q3

FY2017

Q45

Net Sales by Business Segment
 The Video Advertising Business recorded strong orders from and net sales to major advertising
agencies; TV commercial and online video both recorded higher year-on-year product sales.
 Promotional event business subsidiaries performed well in the Advertisement-Related Businesssales.
 The Solutions Business compensated for lower media sales, resulting in higher year-on-yearsales.
 Overseas Business recorded lower sales due to the business reorganization of a local entity inBeijing.
31,083(million yen)

32,267

5,896

6,320

5,575

Q3 FY2018

5,693

Q3 FY2019

2,881

Video Advertising

Advertisement-Related

Solutions

2,524

Overseas6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

7

Net Sales by Customer
 Orders from and sales to major advertising agencies were strong.
 Direct transactions with clients grew.

24.5%
Q3 FY2018

11,13426.6%
12,08029.7%
13,456

19.2%
8,696

Dentsu Group
Hakuhodo Group* Net sales from Dentsu Inc. (non-consolidated) were 9,909 million yen, and net sales from Hakuhodo Inc.
(non-consolidated) were 9,575 million yen.

21.3%
Q3 FY20199,948

28.3%
13,25429.9%
14,002(million yen)

20.5%

Direct transactions
Other

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.

8

Net Sales by Medium(million yen)

Q3 FY2018

Component
Ratio

Q3 FY2019

Component
Ratio

YoY
Change27,03758.9%

27,916

59.0%

+879

TV commercial

25,571

55.7%

26,731

56.5% +1,161

Printed commercial materials

1,467

3.2%

1,185

2.5%

-282

Entertainment contents

1,650

3.6%1,359

2.9%-290

Digital contents

7,336

16.0%

9,513

20.1% +2,177

Overseas

3,097

6.7%

2,522

5.3%-575

Other

6,781

14.8%

6,030

12.7%

-751

Total

45,901100.0%

47,341100.0% +1,440

MediumTV commercial production* The results are simple totals of the consolidated financial results of AOI Pro. Inc. and TYO Inc.
9

Summary of Consolidated Balance Sheet(million yen)

FY2018Q3 FY2019

Major Components

Current Assets

35,93735,181

Cash and deposits (＋1,118); notes and accounts receivable(-3,819); electronically recorded monetary claims (+1,424);
work in process (＋173)

Non-current Assets

19,693

19,435intangible assets (-223)

55,631

54,616

20,114

17,025

Accounts payable (-575); short-term loans payable (-2,277)

9,837

12,574Long-term loans payable (＋2,898)

Total Liabilities

29,951

29,599Total Net Assets(percentage of total assets)

25,679(46.2%)

25,016(45.8%)

Total Liabilities and Net Assets

55,631

54,616

Total Assets
Current Liabilities
Non-current Liabilities

Retained earnings(-370)* AOI TYO Holdings adopted Partial Amendment to Accounting Standard for Tax-Effect Accounting (ASBJ Statement No.28, February 16, 2018) as of the beginning of Q1 of the current
consolidated fiscal year.

10Initiatives in the Video Advertising Business In addition to the impact of lower print sales, effective profit margin for production
projects (which had been improving) fell due to order volume growth this year.
40,00040.0%(million yen)

35.9%

30,00020,00033.5%

32,62733.0%

Production sales (left axis)

30.0%
28,69230,81010,000

25.0%
1,957

0

35.0%

Q3 FY2017

1,430

1,109Q3 FY2018

Q3 FY2019

20.0%

Print sales (left axis)
Effective profit margin (right axis)* Effective profit margin: (net sales external expenditures)/net sales* Calculations for the TV commercial
production department only

11

Initiatives in the Solutions Business (1) Orders for TV commercial and promotional event production for both new andexisting customers rose, driving net sales growth.
Sales at the TYO Offering Management
Business Unit
*Excluding media placement purchases

4,000
3,000

3,717

3,478
2,303

2,741

(million yen)

3,239
■■ 3Q
■

2,000

Full-year1,0000

FY2017FY2018FY201912

Initiatives in the Solutions Business (2) Despite a scale-back in existing large-scale projects, orders for promotion planning
resulted in net sales being level year on year.

3,000

2,000

Sales at Quark tokyo
2,416
1,816

(million yen)

2,226
1,547

1,578

■■ 3Q
■

Full-year

1,0000FY2017FY2018FY201913

Initiatives in the Overseas Business Slight decrease in the scope of sales due to the business reorganization of a local
entity in Beijing.
8,000

Scale of sales in Overseas Businesses* Including equity-method affiliates

5,824

6,000
4,000

4,439

4,320

(million yen)

4,021

2,824

■■ 3Q
■

Full-year

2,0000FY2017FY2018FY201914

2. Consolidated Earnings Forecast

15

Progress in Consolidated Earnings Forecast
FY2019(million yen)

Q3 Result

FY2019Fiscal Year
YoY Change
Forecast

FY2019AmountYoY Change
Required for Q4

Net Sales

46,80463,600+1,436

16,796-2,628

Operating Income

1,153

2,300-1,212

1,147+79

Operating margin

2.5%

3.6%

---Ordinary Income

921

2,150-1,453

1,229+278

Profit Attributable toOwners of Parent

348

1,050-1,172

702+270

EBITDA

2,245

3,760-986-16

3. Appendix - Company Profile, Stock Information, etc.

17Company ProfileCompany NameAOI TYO Holdings Inc.

Representatives

Hiroaki Yoshida, Representative Director, Chairman & CEO
Yasuhito Nakae, Representative Director, President & COO

Establishment

January 4, 2017

Capital

5.0 billion yen

Fiscal Year-end

December 31

Location of Head Office

1-5-1 Osaki, Shinagawa-ku, Tokyo 141-8580, Japan+81 3-6893-5005 (main)

Securities Code3975 First Section of the Tokyo Stock Exchange

URL

http://aoityo.com/en/18

Founding of AOI TYO Holdings*As of Sep. 30, 2019.

Consolidated subsidiaries: 35 total
Consolidated employees: 1,702

Date of establishment: Oct. 25, 1963

Consolidated subsidiaries: 19 (including AOI Pro.)

Osaki

Consolidated employees: 777

Date of establishment: Apr. 2, 1982

Consolidated subsidiaries: 16 (including TYO)
Consolidated employees: 771

19Shareholder Return Dividends– Policy: 30%-plus consolidated payout ratio– FY2019: Forecast dividend of 20 yen per share
End of Q2

End of FYTotal

Dividend Payout Ratio

FY20188 yen

22 yen30 yen36.4%

FY2019 (forecast)

8 yen

12 yen20 yen44.8%

 Purchase of treasury shares
Period of Purchase

Type ofShares

PreviousPurchaseJun. 1, 2018 – Jun. 7, 2018

CommonStock400,000 shares

531 million yen

Current
Purchase*

Mar. 1, 2019 – Nov. 14, 2019

CommonStock105,000 shares

79 million yen

Total Number of Shares
Purchased

Total Value of Sharespurchased*The most-recent purchase of treasury stock concluded on November 14, 201920

Shareholder Benefit Program The following shareholder benefits are provided to investors with 500 or more sharesof AOI TYO Holdings, who are listed on the share register as of June 30, 2019.

Shareholder Gifts
500 shares or more

Original Quo Card

3,000 yen

1,000 shares or more

Original Quo Card

5,000 yen

2,000 shares or more

Original Catalog

value of 10,000 yen*Original catalog allows shareholders tochoose from original products, Quo Cards,
or charitable donations

Animation Studio Tour
500 shares or more (randomly selected from those who enter the draw)
Studio tour of AOI TYO Group character development and stop-motion
animation division TYO/dwarf©NHK・TYO

21

Status of Stock and Shareholders (as of June 30, 2019)
Number of Shares and Shareholders

Status of Large Shareholders

Total number of shares issued

24,566,447

Total number of shareholders

13,489

Shareholder Composition byType of Shareholder

6.6%
15.3%

24.6%

50.4%

Number ofShares Held

Shareholding
Ratio

1

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

1,629,900

6.83%

2

Cosmo Channel

1,153,740

4.83%

3

IMAGICA GROUP Inc.

1,018,000

4.26%

810,800

3.40%

806,200

3.38%

479,660

2.01%

418,900

1.75%

418,000

1.75%

42.8%

0.3%

Shareholder NameJapan Trustee Services Bank, Ltd.
(Trust Account 9)
Japan Trustee Services Bank, Ltd.
(Trust Account)

Individuals, etc.

5

Financial institutions

6

Financial instruments
business operator

7

Other corporations

8

Foreign corporations,etc.

9Hitoshi Hara

400,000

1.68%

Treasury shares

10 Fumiko Hara

328,000

1.37%

Fields Corporation
Trust & Custody Services Bank, Ltd.
(Trust Account E)
Japan Trustee Services Bank, Ltd.
(Trust Account 5)* The shareholding ratios are calculated by subtracting treasury shares (690,291).

22DisclaimerThis 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:
Financial & Accounting Department (+81 3-3779-8415)
23