Summary of Consolidated Financial Results (Japanese Accounting Standards)
for the First Quarter of the Fiscal Year Ending December 31, 2021

May 14, 2021

Company name:
AOI TYO Holdings Inc.
Stock Exchange:
Tokyo Stock Exchange
Code:
3975
URL:
https://aoityo.com/en/
Representatives:
Yasuhito Nakae, Representative Director
Inquiries:
Satoshi Yuzurihara, Director Tel: +81-3-5495-7575
Scheduled date of submission of quarterly report:
May 14, 2021
Scheduled date of commencement of dividend payment:
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:No(Rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter (from January 1, 2021 to March 31, 2021)(1) Consolidated operating results(The percentages are year-on-year changes.)
Net sales

Operating income

Million yen

Q1 FY2021
Q1 FY2020%

14,193
13,049(Note) Comprehensive income

8.8
-15.7

Million yen

Q1 FY2021: 593 million yen (-%)
Net income per share

%

923
116

Million yen

693.2
-81.6

%

923
5

Million yen

403
-32

－
-99.1

%

－
－

Q1 FY2020: -226 million yen (-%)

Diluted net income�per shareYen

Q1 FY2021
Q1 FY2020

Profit attributable toowners of parent

Ordinary income

Yen

17.17
-1.40

17.13
－

(2) Consolidated financial position
Total assets

Net assets

Million yen

Q1 FY2021
FY202051,30048,682(For reference) Shareholders’ equity

Equity ratio

Million yen%

20,513
20,231Q1 FY2021: 20,217 million yen

39.4
40.9

FY2020: 19,925 million yen

2. Dividends
Dividends per share
End of Q1

End of Q2

Yen

End of Q3

Yen

FY2020－－
FY2021－
FY2021 (forecast)
0.00(Note) Revisions to dividends forecast published most recently: Yes

Year end

Yen

Annual
Yen

Yen

－

12.00

12.00

－

0.00

0.00

3. Consolidated Financial Forecast for FY2021 (January 1, 2021 to December 31, 2021)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen

%

1,500

－

%

Full year
56,50010.3
1,600－(Note) Revisions to financial forecast published most recently: Yes(The percentages are year-on-year changes.)
Profit attributable to
Net income per shareowners of parent
Million yen

%

Yen

700

－

29.81

* Notes(1) Important changes in subsidiaries for the first 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)
Q1 FY2021(ii)

FY202024,566,447 shares

FY20201,088,298 shares

Number of treasury stock at end of period
Q1 FY2021(iii)

24,566,447 shares
1,086,556 shares

Average number of issued shares

Q1 FY2021
23,479,650 shares
Q1 FY2020
23,456,609 shares(Note)The number of treasury stock includes the 411,200 shares that Trust & Custody Services Bank, Ltd. (trust account E)
holds as trust property related to a Board Benefit Trust system.
* This summary of financial results is not subject to review by a certified public accountant or certified public
accounting firm.
* 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 more about assumptions
underlying earnings forecasts and cautions regarding the use of earnings forecasts, see 1. Qualitative Information
on Results (3) Description of Information on Outlook on P.3 of Attachments.

Attachments
1. Qualitative Information on Results in the First Quarter(1) Description of Results of Operations(2) Description of Financial Position(3) Description of Information on Outlook
2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheets(2) Quarterly consolidated statements of income and statements of comprehensive income(3) Notes to Quarterly Consolidated Financial Statements(Notes on the premise of a going concern)(Notes in the event of significant changes in shareholders’ equity)(Segment Information)(Significant Subsequent Events)

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2
2
3
4
4
6
8
8
8
9
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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 first quarter of thecurrent consolidated fiscal year.
During the consolidated first quarter, the Japanese economy faced challenges with no sign to the end of COVID-19.
However, the overall tone of the economy has begun to recover. While business sentiment in the manufacturing industry
improved due to the increase in exports and the depreciation of the yen, business sentiment in industries related toconsumer spending, including accommodations, restaurants, and personal services, weakened again due to anotherdeclaration of a state of emergency in January of this year.
The AOI TYO Group began measures to prevent the spread of COVID-19 in filming, editing, and other production
operations in the previous year. As a result, we experienced almost no projects that were postponed or canceled in thefirst quarter of the current fiscal year, in contrast to April and May of last year. Our trend toward business recovery,
beginning in the fourth quarter of the fiscal year ending December 31, 2020, has continued.
As a result, the AOI TYO Group recorded net sales of ¥14,193 million for the consolidated first quarter, representing an
8.8% increase compared to year-ago quarter. Operating profit amounted to ¥923 million (693.2% increases), while
ordinary profit amounted to ¥923 million representing increases of 17,216.5%, and profit attributable to owners of parent
amounted to ¥403 million (¥32 million of loss attributable to owners of parent in the same period of prior fiscal year).
Selling, general and administrative expenses included ¥52 million in amortization of goodwill associated with M&A
activity.
Until recently, the AOI TYO Group operated as a single segment, the Advertising Video Production Business. In Januaryof this year, the group conducted a major organizational restructuring based on our medium-term plan. We reduced thenumber of consolidated subsidiaries by 10, and we changed our reportable segments into the Content Production
Business (responsible for traditional advertising video production) and the Communication Design Business (responsible
for the design and execution of communications based on direct transactions with advertisers).
Operating results by segment were as follows.
(1) Content Production Business
The Content Production Business recorded net sales of ¥10,235 million (up 4.4% year on year) for the current
consolidated first quarter. Segment profit was ¥1,360 million (up 95.0%).
This result was due to signs of recovery in project orders from major advertising companies in connection with thegradual recovery in the Japanese advertising market. Another contributing factor was the postponed and canceled projects
that occurred in the year-ago quarter. Segment profit also rose year on year. This increase was due to the increase in net
sales, a decrease in cost of sales stemming from an increase in the period-end balance of labor costs and expenses
recorded in relation to work in process compared to the beginning of the period, and a decrease in various expenses as aresult of cost reduction measures implemented under our medium-term plan, which we began implementing ahead ofschedule in the prior fiscal year.
(2) Communication Design Business
The Communication Design Business recorded net sales of ¥3,958 million (up 21.9% year on year) for the current
consolidated first quarter. Segment profit was ¥236 million (up 199.6% ).
Sales and profits rose in the advertising and marketing solutions domain through an increase in direct transactions withadvertisers and media sales. Here, we merged five companies in January of this year, establishing xpd Inc. to provide
2better all-around execution of services, from video to digital solutions, PR, events, space design, and more.

(2) Discussion of financial position
Total assets as of the end of the consolidated first quarter amounted to ¥51,300 million, a ¥2,617 million increase
compared to the end of the prior consolidated fiscal year. This increase was mainly due to increases in cash and depositsof ¥2,697 million, notes and accounts receivable of ¥251 million and property, plant and equipment of ¥274 million,
compared to decrease in electronically recorded monetary claims of ¥310 million.
Liabilities increased by ¥2,336 million compared with the end of the prior fiscal year to ¥30,787 million. Although longterm loans payable decreased ¥890 million, accounts payable and advances received increased ¥3,000 million and ¥407
million, respectively.
Net assets amounted to ¥20,513 million, an increase of ¥281 million compared to the end of the prior consolidated fiscal
year. This was mainly due to an increase of ¥403 million in retained earnings by the posting of net income attributable toshareholders of the parent company, despite a decrease of ¥286 million by the payment of dividends.

(3) Discussion of consolidated results forecasts
See Revisions to Full-Year Consolidated Performance Forecasts, published on May 14, 2021, for more about AOI TYOGroup consolidated earnings forecasts for the fiscal year ending December 2021.
Our earnings forecast for the consolidated second quarter of the fiscal year ending December 31, 2021, remains
undecided, as it is difficult to make a reasonable calculation at this time due to another declaration and subsequent
extension of a state of emergency in Japan. This development raises the possibility of the postponements or cancellationsof projects due to COVID-19.

3

2. Quarterly Consolidated Financial Statements and Major Notes(1) Quarterly consolidated balance sheets(Unit: thousand yen)
FY 2020(December 31, 2020)

Q1 FY2021(March 31, 2021)

AssetsCurrent assets
Cash and deposits

10,813,819

13,510,900

Notes and accounts receivable - trade

13,222,465

13,473,508

Electronically recorded monetary claims - operating

3,562,775

3,252,466

Merchandise and finished goods

8,267

8,219

Work in process

4,331,475

4,451,437

Other1,108,034

1,112,492

Allowance for doubtful accounts(31,847)(25,628)

Total current assets

33,014,989

35,783,397

Land

3,593,652

3,593,652

Other

2,663,808

2,938,398

Total property, plant and equipment

6,257,460

6,532,050

Software210,209

213,114Goodwill

3,375,272

3,322,534

15,994

15,994

3,601,476

3,551,643

Investment securities

1,081,036

1,201,467

Deferred tax assets

1,533,026

1,200,744

Lease and guarantee deposits

1,661,033

1,536,458

Other2,303,819

2,263,116

Allowance for doubtful accounts(770,326)(768,615)

Total investments and other assets

Non-current assets
Property, plant and equipment

Intangible assets

Other
Total intangible assets
Investments and other assets

5,808,588

5,433,172

Total non-current assets

15,667,526

15,516,866

Total assets

48,682,515

51,300,263

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(Unit: thousand yen)
FY 2020(December 31, 2020)

Q1 FY2021(March 31, 2021)

Liabilities
Current liabilities
Accounts payable - trade7,144,690

6,870,957

Short-term loans payable－

3,000,000

Current portion of long-term loans payable

4,374,787

4,170,417

Advances received

720,753

1,127,953

Income taxes payable

172,515

269,354

Provision for bonuses

218,448

144,773

Other

2,112,543

2,374,234

Total current liabilities

14,743,739

17,957,690

Long-term loans payable

8,774,895

7,884,200

Long-term deposits received

3,501,199

3,501,199

Provision for directors' retirement benefits

259,435

259,899

Provision for management board incentive plan trust

247,750

265,768

Net defined benefit liability

343,303355,917

Asset retirement obligations

442,737

463,433

Other

Non-current liabilities

138,037

99,005

Total non-current liabilities

13,707,359

12,829,424

Total liabilities

28,451,099

30,787,115

Capital stock

5,000,000

5,000,000

Capital surplus

12,111,198

12,110,691

Retained earnings

4,217,210

4,333,656

Treasury shares(1,233,609)(1,231,386)

20,094,798

20,212,962

Valuation difference on available-for-sale securities(109,116)

35,575

Foreign currency translation adjustment(59,597)(31,460)

Remeasurements of defined benefit plans

(231)

66

Net assets
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income

Total accumulated other comprehensive income(168,945)

4,181

Share acquisition rights

42,85515,850Non-controlling interests

262,707

280,154

Total net assets

20,231,415

20,513,148

Total liabilities and net assets

48,682,515

51,300,263

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(2) Quarterly consolidated statements of income and statements of comprehensive income
Quarterly consolidated statements of income
Consolidated first quarter(Unit: thousand yen)
Q1 FY2020(January 1, 2020 –March 31, 2020)

Q1 FY2021(January 1, 2021 –March 31, 2021)

Net sales

13,049,745

14,193,929

Cost of sales

10,916,463

11,424,496

Gross profit

2,133,282

2,769,432

Selling, general and administrative expenses

2,016,880

1,846,186

116,402923,246

Interest income

1,419

2,396

Dividend income

2,886

2,581

Insurance return

1,710

55,642

Other

45,435

26,669Total non-operating income

51,45387,289Interest expenses

18,56820,912

Commission fee
Share of loss of entities accounted for using equity
method40,36938,551

42,108

3,478

Other

61,47423,859Total non-operating expenses

162,52186,801

5,334

923,735

6,038

－

576

25,6706,614

25,670

4,452

－

45

－

4,497

－

7,451

949,406

Income taxes - current

167,264

257,867

Income taxes - deferred(132,635)

276,883

Total income taxes

34,629534,751

Profit (loss)(27,178)

414,654

5,774

11,535(32,953)

403,118

Operating profit
Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Other
Total extraordinary income
Extraordinary losses
Loss on change in equity
Other
Total extraordinary losses
Profit before income taxes

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

6

Quarterly consolidated comprehensive statements of income
Consolidated first quarter(Unit: thousand yen)
Q1 FY2020(January 1, 2020 –March 31, 2020)

Profit (loss)

Q1 FY2021(January 1, 2021 –March 31, 2021)(27,178)

414,654

Valuation difference on available-for-sale securities(150,995)

144,691

Foreign currency translation adjustment(37,864)

34,500320

298

Share of other comprehensive income of entities
accounted for using equity method(10,821)(454)

Total other comprehensive income(199,360)

179,036

Comprehensive income(226,539)

593,691(225,369)

576,245(1,169)17,445

Other comprehensive income

Remeasurements of defined benefit plans, net of tax

Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests7

(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.

8

(Segment information)
I. FY2020 (January 1, 2020 to December 31, 2020)
1. Information on operating revenue and operating profits or loss by reported segment
Reported segment
Contents
Production

Communication
DesignTotal(Unit: thousand yen)Amount posted
in the quarterly
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Operating Revenue
Outside customers
Inter-segment internal
revenue or transfers
Total

9,801,430

3,248,315

13,049,745－

13,049,745

253,146

72,860326,006(326,006)－

10,054,576

3,321,175

13,375,752(326,006)

13,049,745

Segment profit
697,71078,953776,664(660,261)
116,402(Note 1) Adjustments in segment profit of -¥660,261,000 include the elimination of inter-segment transactions of ¥26,726,000 andcorporate expenses of -¥686,988,000. Corporate expenses are mainly personnel expenses and expenses related to administrative
departments.
(Note 2) Segment profit has been adjusted with operating profit recorded in the quarterly consolidated statements of income.

2. Information on impairment loss on non-current assets by reported segment
Not applicable.
II. FY2021 (January 1, 2021 to December 31, 2021)
1. Information on operating revenue and operating profits or loss by reported segment
Reported segment
Contents
Production

Communication
DesignTotal(Unit: thousand yen)Amount posted
in the quarterly
consolidated
Adjustments
statement of(Note 1)income(Note 2)

Operating Revenue
Outside customers
Inter-segment internal
revenue or transfers
Total

10,235,759

3,958,170

14,193,929－

14,193,929

359,291

39,438398,729(398,729)－

10,595,050

3,997,608

14,592,659(398,729)

14,193,929

Segment profit
1,360,272
236,538
1,596,811(673,564)
923,246(Note 1) Adjustments in segment profit of -¥673,564,000 include the elimination of inter-segment transactions of -¥967,000 andcorporate expenses of -¥672,597,000. Corporate expenses are mainly personnel expenses and expenses related to administrative
departments.
(Note 2) Segment profit has been adjusted with operating profit recorded in the quarterly consolidated statements of income.

2. Information on changes in reported segment
The AOI TYO Group conducted a major reorganization on January 4, 2021. Under this reorganization, the group split off
a portion of the business of TYO Inc., a consolidated subsidiary, and conducted an absorption-type merger and tradename change among consolidated subsidiaries, with TYO Inc. and Digital Garden Inc. as the surviving entities. As aresult of this reorganization, we have shifted from a single Advertising Video Production Business segment to a dualsegment structures. This structure consists of the Content Production Business, handling traditional advertising video
production primarily for orders from advertising companies, and the Communication Design Business, handling designand execution of communication and focused on directly transacting with advertisers. Segment information for the firstquarter of the previous consolidated fiscal year reflects the new reporting segment classifications.

93. Information on impairment loss on non-current assets by reported segment
Not applicable.
(Significant Subsequent Events)
Tender Offer for the company
At a meeting held on May 14, 2021, the AOI TYO Holdings Inc. (“Company”) board of directors expressed an opinion in
support of a tender offer (“Tender Offer”) for Company common stock (“AOI TYO Stock,” below) and Stock Acquisition
Rights (Stock Acquisition Rights No. 2, Stock Acquisition Rights No.7, and Stock Acquisitions Rights No.8 referred tocollectively below as “Stock Acquisition Rights”) by Studio Cruise Co., Ltd. (“Offeror”). Said tender offer is part of amanagement buyout (MBO) as described below. At the same time, the Company’s board of directors recommended thatAOI TYO Holdings shareholders accept the Tender Offer, while leaving the decision of acceptance of the Tender Offer
for Stock Acquisition Rights to the owners of Stock Acquisition Rights.
The board of director resolution in question presumes that the Tender Offer by Offeror and subsequent procedures will
result in the delisting of AOI TYO Holdings stock.
(Note) A management buyout (MBO) is a tender offer in which the Offeror is an officer of the target entity (including atender offer in which the Offeror conducts the Tender Offer based on a request by an officer of the target entity and sharescommon interests with the officer of the target entity.
1. Overview of Offeror
(1)

Name

Studio Cruise Co., Ltd.

(2)

Head Office

5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo(3)

Representative Name and Title

Kazuhiro Yamada, representative director(4)

Business Lines

Control and management of the Company’s business activities
through the acquisition and ownership of Company stock(5)

Capital Stock(as of May 14, 2021)

25,000 yen(6)

Established

April 16, 2021

(7)

Major Shareholders and OwnershipRatio(as of May 14, 2021)

Studio Cruise, L.P.

(8)

Relationship between AOI TYO Holdings and Offeror
Equity Relationship

Not applicable.

Personal Relationships

Not applicable.

Business Relationship

Not applicable.

Related Party Status

Not applicable.

2. Tender Offer priceCash in the amount of 900 yen per share of common stock
Cash in the amount of 1 yen per share of each individual Stock Acquisition Rights No.2
Cash in the amount of 1 yen per share of each individual Stock Acquisition Rights No.7
Cash in the amount of 1 yen per share of each individual Stock Acquisition Rights No.8
3. Tender Offer Period
Monday, May 17, 2021 to Monday, July 5, 2021 (36 business days)

10

100.00％4. Number of Shares Scheduled to be Purchased
Number of Shares to be Purchased : 23,767,317 shares
Minimum Number of Shares to be Purchased : 15,844,900 shares
Maximum Number of Shares to be Purchased : - shares(Note)In the Tender Offer, the Offeror has set 15,844,900 shares (ownership ratio: 65.50%) as the minimum number of shares to bepurchased because the Offeror aims to make the Company's shares go private.
If the total number of shares tendered in the Tender Offer is less than the minimum number of shares to be purchased, all of thetendered shares will be purchased.
If the total number of shares tendered in the Tender Offer is less than the minimum number of shares to be purchased, the Offeror
will not purchase any of the tendered shares.

5. Settlement Commencement Date
Scheduled on Monday, July 12, 202111