Summary of Consolidated Financial Results (Japanese Accounting Standards)
for Fiscal Year Ended December 31, 2019
February 19, 2020
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
Scheduled date of General Shareholders’ Meeting
Scheduled date of commencement of dividend payment:
Scheduled date of filing of securities report:
Supplementary documents for quarterly results:
Quarterly results briefing:

Tel: +81-3-3779-8415
March 26, 2020
March 27, 2020
March 26, 2020
Yes
Yes (for institutional investors and analysts)(Rounded down to the nearest million yen)

1. Consolidated Financial Results for Fiscal Year Ended December 31, 2019 (January 1, 2019 to December 31,
2019)(1) Consolidated operating results
Net sales(The percentages are year-on-year changes.)
Profit attributable toOrdinary income
owners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

65,229

0.7

2,118

-38.3

1,763

-47.0

-1,280‒FY201864,792-8.1
3,433(Note) Comprehensive income
FY2019: -1,433 million yen (

-25.7
-%)

3,325
-24.3
1,952
FY2018: 1,699 million yen (-45.2%)-29.8

FY2019Net income per
share

Diluted net income
per share

Yen

Yen

%

%

%

-54.50
82.48

81.53

-5.3
7.8

3.2
5.8

3.2
5.3

FY2019FY2018(Reference) Equity in earnings of affiliates

Return on equity(ROE)

Ordinary income aspercentage of total assets

FY2019: -159 million yen

Operating incomeon sales

FY2018: -70 million yen(2) Consolidated financial position
Total assets

FY2019FY2018

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

53.352
55,63123.36325,67943.0
45.1

977.76
1,066.28(Reference) Shareholders’ equity

FY2019: 22,935 million yen

FY2018: 25,114 million yen(3) Consolidated cash flow
Cash flows from operating Cash flows from investing Cash flows from financing Cash and cash equivalents
activities
activities
activities
at end of period

FY2019FY2018Million yen

Million yen

Million yen

Million yen

1,198
5,379

-1,561-2,060-336-5,862

9,060
9,790

2. Dividends
Dividends per share
End of Q1

FY2018FY2019FY2020 (forecast)Year end

AnnualTotal
dividends

Payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)

End of Q2

End of Q3

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

‒
‒
‒

8.00
8.00
8.00

‒
‒
‒

22.00
12.00
12.00

30.00
20.00
20.00

718
477

36.4
33.6

2.9
2.0

3. Consolidated Financial Forecast for FY2020 (January 1, 2020 to December 31, 2020)
Net sales

Operating income

Ordinary income(The percentages are year-on-year changes.)
Profit attributable to
Net income per shareowners of parent

Million yen%

Million yen%

Million yen%

Million yen%

Yen

First half

31,500

2.8

1,000

22.4

900

41.1

500

94.0

21.28

Full year

65,000

-0.4

2,500

18.0

2,400

36.1

1,400

－

59.59

:

No

(2) 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:Not applicable(iii) Changes in accounting estimates::

Not applicable(iv) Restatements of accounting estimates::

Not applicable* Notes(1) Important changes in subsidiaries for FY2019 under review(Changes is specified subsidiaries resulting in change in scope of consolidation)
New:― companies
Excluded:― companies(ii)

Changes in accounting policies other than (i)(3) Number of issued shares (common stock)(i)
Number of issued shares (including treasury stock)
FY2019(ii)

FY201824,566,447 shares

FY20181,013,157 shares

FY201823,666,970 shares

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

24,566,447 shares

1,109,564 shares

Average number of issued shares
FY201923,495,396 shares(Note)
Treasury stock includes shares that Trust & Custody Services Bank, Ltd. (trust account E) holds as trust property related
to a Board Benefit Trust system (FY2019: 418,900 shares; FY2018: 418,900 shares).
* 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 (4) Future Outlook on P.4 of Attachments.
・AOI TYO Holdings will hold an earnings briefing for institutional investors and analysts on March 5, 2020. Afterthe 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 Results2(1)Discussion of Operating Results2(2)Discussion of Financial Position

3(3)

Discussion of Cash Flows

3(4)

Future Outlook

42.

Basic Policy Regarding Selection of Accounting Standards

4

3.

Consolidated Financial Statements and Major Notes

5(1)

Consolidated Balance Sheets

5(2)

Consolidated Statements of Income and Statements of Comprehensive Income

8(3)

Consolidated Statements of Changes in Shareholders’ Equity

11

(4)

Consolidated Statements of Cash Flows

13

(5)

Notes on the Consolidated Financial Statements

15(Notes Regarding Assumption of Going Concern)

15(Segment Information)

15(Per-share Indicators)

16(Significant Subsequent Events)

16

―1―

1. Qualitative Information on Results(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.
During the consolidated fiscal year under review, the Japanese economy continued to grow gradually in the face ofboth negative and positive trends. The manufacturing sector reported weakness due to several factors, including slow
external demand and the impact of large-scale typhoons. At the same time, the non-manufacturing sector demonstrated
firmness, supported in part by software investment. The October consumption tax increase in Japan led to a downturn inretail and wholesale activity, resulting in a sense of stagnancy. However, as a prevailing trend, the economy continued to
grow gradually.
Operating in this environment, the AOI TYO Group experienced a slight decline in sales to major advertising agencies
year on year, while direct transactions with clients grew. By media type, the group maintained level year-on-year sales for
TV commercial production and recorded higher sales for online video production. As a result, consolidated net sales rose
0.7% year on year.
Meanwhile, operating profit underperformed year on year. This result was due to several factors, including ouradoption of work-style reform, cost increases accompanying new enterprise systems implementations at subsidiarycompanies, and lower print sales, which has been a high-margin business for the company in the past. Further, thecompany saw a decline in margins associated with an increase in orders this year in our Video Advertising Business,
which had experienced improving margins to date. At the same time, the group experienced the negative impact
associated with reorganizing the businesses of poorly performing subsidiaries. The group also recorded lower ordinary
profit compared to the prior consolidated fiscal year. This result was mainly due a gain on investment in partnerships
recognized in the prior consolidated fiscal year that was not repeated this year. Although the group recorded extraordinary
income related to the sale of strategic stock holdings, we also recorded several extraordinary losses. These extraordinary
losses included losses due to reorganizing the businesses of poorly performing subsidiaries, impairment loss associatedwith software due to the integration of systems for group-wide efficiencies and cost reductions, and extraordinary loss
associated with a loss on valuation of investment securities.
As a result, the AOI TYO Group recorded net sales of ¥65,229 million for the consolidated fiscal year ended December
2019, representing an 0.7% increase compared to the prior year. Operating profit amounted to ¥2,118 million (38.3%
decrease), while ordinary profit amounted to ¥1,763 million representing decreases of 47.0%, and loss attributable toowners of parent amounted to ¥1,280 million (¥1,952 million of profit attributable to owners of parent in the same periodof prior fiscal year). Selling, general and administrative expenses included ¥320 million in amortization of goodwill
associated with M&A activity.
AOI TYO Group reportable segments consist of our Advertising Business and our Video-Related Business. However, theVideo-Related Business accounts for only a small portion of overall results. As this segment does not represent asignificant source of material information, we have omitted disclosure of reportable segments.

―2―(2) Discussion of financial position
Total assets at the end of the consolidated fiscal year decreased by ¥2,279 million compared with the end of the priorfiscal year to ¥53,352 million. This decrease was mainly due to decreases in software of ¥1,429 million and investment
securities of ¥1,360 million.
Liabilities increased by ¥36 million compared with the end of the prior fiscal year to ¥29,988 million. Although shortterm loans payable decreased ¥2,577 million, long-term loans payable and current portion of long-term loans payable
increased ¥2,122 million and ¥914 million, respectively.
Net assets amounted to ¥23,363 million, a decrease of ¥2,316 million compared to the end of the prior consolidated fiscal
year. Retained earnings decreased ¥1,280 million due to loss attributable to owners of parent. At the same time, the AOI
TYO Group paid ¥718 million in dividend payments.
(3) Discussion of cash flows
Cash and cash equivalents (“Cash”) amounted to ¥9,060 million as of the end of the consolidated fiscal year, representing
a decrease of ¥730 million compared to the prior consolidated fiscal year.
The state of cash flow by segment for the fiscal year under review is as follows.
Cash Flows From Operating Activities
Cash flows from operating activities amounted to ¥1,198 million, compared to cash from operating activities of ¥5,379
million for the prior fiscal year. This result was mainly due to impairment loss of ¥1,207 million, amortization andgoodwill of ¥1,167, and loss of revaluation of investment securities of ¥1,157 million. At the same time, major cash
outlays included the payment of ¥1,873 million in income taxes.
Cash Flows From Investing Activities
Cash used in investing activities amounted to ¥1,561 million, compared to ¥2,060 million for the prior fiscal year. This
result was mainly due to ¥813 million in outlays for property, plant, and equipment, and ¥399 million in outlays forinvestment securities. At the same time, we recorded ¥503 million in proceeds from the sale of investment securities.
Cash Flows From Financing Activities
Cash used in financing activities amounted to ¥336 million compared to cash from financing activities of ¥5,862 million
for the prior fiscal year. This result was mainly due to a ¥2,318 million decrease in short-term loans payable, ¥2,786
million in outlays for repayments of long-term loans payable, and ¥5,850 million in cash proceeds from long-term loans
payable.

―3―

(4) Future outlook
We expect to see continuing gradual economic growth in Japan and a related steady expansion in advertising demand.
In particular, we expect internet advertising to continue to take market share from TV and other traditional advertising
media.
The market for online video is also likely to grow steadily as the environment experiences rapid changes in methods
and structure. These changes will include more diversification in video consumption methods, diversification in services
utilizing video, and technological innovations in communications infrastructure technologies.
In response to this environment, the AOI TYO Group will focus on measures to dig deeper and grow wider in ourbusiness lines. This approach reflects our medium-term policies that address long-term, sustainable growth in corporate
value. At the same time, we will accelerate the pace of development for our human resources, a particular strength of the
AOI TYO Group.
We intend to secure stable, long-term income in video advertising production, based on our position as the No.1
provider in the TV commercial production market. At the same time, we will continue to focus on growing our relatively
high-unit-priced branded video production business in the online video market, leveraging the strengths we developed in
TV commercial production. We have identified video content marketing and direct transactions with clients as growthareas for the AOI TYO Group. Under video content marketing, we plan secure more orders for content proposals,
production, and analysis, leveraging the characteristics unique to each type of video media for target customer segments.
Under direct transactions with clients, we plan to expand beyond video into promotional event proposals, planning, andother areas to grow our customer base. At the same time, we will continue to be active in hiring and training personnel inboth areas. Further, we will investigate more alliances as another of several means to strengthen our Overseas Business.
The recent move to a printless format in the TV commercial industry (Note 1) has resulted in decreasing TV
commercial print sales for the group. However, we expect the impact will now be more limited in scope compared to thepast two years, in which our major clients completed their transition to printless. We expect a temporary spike inadvertising demand related to the Tokyo 2020 Olympics and Paralympics scheduled for July through September.
However, due to the constrained nature of how much order volume we can accept, we do not expect to see a dramatic
jump in production order volume next period. Given the impact of reorganizing the businesses of poorly performing
subsidiaries during the current period and other factors, we forecast net sales for the next period to be level with thecurrent period. Given these conditions, we plan to deal with the decrease in effective profit margin (Note 2) in our Video
Advertising Business stemming from order growth and other factors during the period ended December 2019 by once
again engaging in stricter research, selection, and management of our cost of sales. Based on this approach, we willemphasize profitability from the very beginning of the order acceptance stage.
Meanwhile, we expect to see lower costs related to software and reorganizations of poorly performing businesses, forwhich we recorded extraordinary losses during the fiscal year ended December 2019. At the same time, we forecast
higher expenses related to hiring and training personnel, a critical component of increasing corporate value in the future.
Based on the preceding, we forecast FY2020 earnings reflecting ¥65,000 million in net sales, ¥2,500 million in operating
profit, ¥2,400 million in ordinary profit, and ¥1,400 million in profit attributable to owners of parent.
Historically, TV 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 over time.
(Note 2) Effective profit margin = (net sales-external expenditures)/net sales(Note 1)

2. Basic Policy Regarding Selection of Accounting Standards
AOI TYO Group prepares consolidated financial statements according to the Japanese accounting standards inconsideration of comparability between fiscal years and between companies. We will consider the adoption of theInternational Financial Reporting Standards (IFRS) as appropriate, taking into account conditions in Japan and abroad.
―4―3. Consolidated Financial Statements and Major Notes(1) Consolidated balance sheets(Unit: thousand yen)

FY2018(December 31, 2018)

FY2019(December 31, 2019)

AssetsCurrent assets
Cash and deposits

9,836,071

9,111,122

Notes and accounts receivable - trade

16,731,160

16,873,978Electronically recorded monetary claims - operating

4,273,694

4,413,564

7,544

7,301

4,256,243

4,510,288

Other876,667

1,125,296

Allowance for doubtful accounts(43,407)(37,727)

35,937,974

36,003,823

5,021,587

5,142,068

Accumulated depreciation(2,591,876)(2,773,935)

Buildings and structures, net

2,429,710

2,368,133

Machinery, equipment and vehicles

1,150,904

1,024,383

Accumulated depreciation(894,040)(846,805)

Machinery, equipment and vehicles, net

256,863

177,577

Tools, furniture and fixtures

2,890,481

2,854,794

Accumulated depreciation(2,076,067)(2,046,931)

814,413807,862

3,615,121

3,606,822

726,179

717,898

Accumulated depreciation(615,802)(658,957)

Leased assets, net

110,376

58,940Construction in progress

8,585

65,3127,235,071

7,084,649

Goodwill

4,117,710

4,010,215

Software1,590,986

161,589

Software in progress

48,31987,485

Other

15,853

15,994

5,772,869

4,275,284

Investment securities

3,147,176

1,787,051

Deferred tax assets

736,079

1,328,303

1,619,387

1,522,658

Merchandise and finished goods
Work in process

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

Tools, furniture and fixtures, net
Land
Leased assets

Total property, plant and equipment
Intangible assets

Total intangible assets
Investments and other assets

Leasehold and guarantee deposits―5―

(Unit: thousand yen)

FY2018(December 31, 2018)

FY2019(December 31, 2019)

Other

1,289,247

2,125,874

Allowance for doubtful accounts(106,495)(775,409)

Total investments and other assets

6,685,395

5,988,478

19,693,336

17,348,413

55,631,310

53,352,237

Total non-current assets
Total assets―6―

(Unit: thousand yen)

FY2018(December 31, 2018)

FY2019(December 31, 2019)

Liabilities
Current liabilities
Accounts payable - trade8,126,930

8,697,200

Short-term loans payable

5,777,154

3,200,000

Current portion of long-term loans payable

2,159,836

3,073,876

Accounts payable - other628,973

661,603

Income taxes payable

1,055,553

428,710

379,942551,961

Advances received

1,136,482

899,779

Provision for bonuses

115,779

72,660

Other733,363757,366

20,114,017

18,343,158

Long-term loans payable

4,549,727

6,672,675

Long-term deposits received

3,501,199

3,501,199

Deferred tax liabilities

153,171

46,098Provision for directors' retirement benefits

253,770

261,883

Provision for management board incentive plan trust

197,115

254,811Net defined benefit liability

280,118

267,504

Asset retirement obligations

509,156

491,279

Other

393,106

149,711

9,837,367

11,645,165

29,951,385

29,988,323

Capital stock

5,000,000

5,000,000

Capital surplus

12,106,819

12,172,896

Retained earnings

9,055,601

7,056,711

Treasury shares(1,190,097)(1,259,085)

Total shareholders' equity

24,972,324

22,970,523

Valuation difference on available-for-sale securities

167,873

10,693Foreign currency translation adjustment(23,287)(44,141)

Remeasurements of defined benefit plans(2,393)(1,945)

Total accumulated other comprehensive income

142,193(35,393)

Share acquisition rights

92,72386,274Non-controlling interests

472,685

342,508

25,679,925

23,363,913

55,631,310

53,352,237

Accrued consumption taxes

Total current liabilities
Non-current liabilities

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income

Total net assets
Total liabilities and net assets―7―

(2) Consolidated statements of income and statements of comprehensive income
Consolidated statements of income(Unit: thousand yen)

FY2018(January 1, 2018December 31, 2018)

FY2019(January 1, 2019December 31, 2019)

Net sales

64,792,263

65,229,849

Cost of sales

52,052,181

53,514,621

Gross profit

12,740,082

11,715,227

Directors' compensations

1,474,221

1,484,604

Salary and bonus

2,338,713

2,718,118

Retirement benefit expenses

45,91754,385

Provision for management board incentive plan trust

91,282

57,696

Business consignment expenses

564,578

560,977

Commission fee

668,267

577,609

9,585

15,203

Depreciation

252,648

250,382

Amortization of goodwill

331,137

320,115

Other

3,530,649

3,557,688

Total selling, general and administrative expenses

9,307,001

9,596,781

3,433,080

2,118,445

Interest income

9,545

7,234

Dividend income

18,26021,886

Insurance return

29,06942,061Gain on investments in partnership

168,567－

Other

88,615

108,807

Total non-operating income

314,057

179,989

Interest expenses

81,35876,310Commission fee

159,072

170,381

Share of loss of entities accounted for using equity
method70,000159,466

Provision of allowance for doubtful accounts

44,800

8,850

Other

66,357

120,070

Total non-operating expenses

421,588535,078

3,325,549

1,763,356

Selling, general and administrative expenses

Provision of allowance for doubtful accounts

Operating profit
Non-operating income

Non-operating expenses

Ordinary profit―8―

(Unit: thousand yen)

FY2018(January 1, 2018December 31, 2018)

FY2019(January 1, 2019December 31, 2019)

Extraordinary income
Gain on sales of non-current assets

398,163－

Gain on sales of investment securities

109,927

323,073

1,368

3,672

509,458

326,745

217,909

1,207,313

Loss on sales of investment securities－

65,374

Loss on valuation of investment securities－

1,157,265

Loss on liquidation of subsidiaries and associates－

279,462

Loss on sales of shares of subsidiaries and associates－

34,635133,561

12,916

351,471

2,756,967

Profit (loss) before income taxes

3,483,536(666,865)

Income taxes - current

1,759,910

1,200,964

Income taxes - deferred(332,849)(600,476)

Total income taxes

1,427,061

600,487

Profit (loss)

2,056,475(1,267,352)

Profit attributable to non-controlling interests

104,315

13,139Profit (loss) attributable to owners of parent

1,952,159(1,280,492)

Other
Total extraordinary income
Extraordinary losses
Impairment loss

Other
Total extraordinary losses―9―Consolidated statements of comprehensive income(Unit: thousand yen)

FY2018(January 1, 2018December 31, 2018)
Profit (loss)

FY2019(January 1, 2019December 31, 2019)

2,056,475(1,267,352)

Valuation difference on available-for-sale securities(276,592)(157,171)

Foreign currency translation adjustment(57,594)(12,002)

Remeasurements of defined benefit plans, net of tax(4,278)448

Share of other comprehensive income of entities
accounted for using equity method(18,061)

2.737

Total other comprehensive income(356,526)(165,987)

1,699,949(1,433,340)

Comprehensive income attributable to owners of parent

1,604,472(1,448,017)

Comprehensive income attributable to non-controllinginterests

95,476

14,676

Other comprehensive income

Comprehensive income
Comprehensive income attributable to―10―

(3) Consolidated statements of changes in shareholders’ equity
FY 2018 (January 1, 2018–December 31, 2018)(Unit: thousand yen)
Shareholders' equity

Balance at beginning of current
periodCapitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders'equity5,000,000

12,074,353

7,823,773(711,360)

24,186,766

Changes of items during period
Dividends of surplus(721,445)(721,445)

Profit attributable to ownersof parent

1,952,159

1,952,159

Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Change of scope of
consolidation
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period

75,954(772,166)(772,166)

293,429369,383(43,487)(43,487)
1,113

1,113
－

－

32,466

1,231,827(478,736)

785,557

5,000,000

12,106,819

9,055,601(1,190,097)

24,972,324

Accumulated other comprehensive income
Valuation
Total
Share
Foreign
Remeasuredifference on
accumulated acquisition
currency
ments
availableotherrightstranslationof defined
for-salecomprehensive
adjustment benefit planssecurities
incomeBalance at beginning of current
period444,466

42,391

1,884

488,742

140,824

Noncontrollin
g interests

Total net
assets889,719

25,706,052

Changes of items during period
Dividends of surplus(721,445)

Profit attributable to ownersof parent

1,952,159

Purchase of treasury shares(772,166)

Disposal of treasury shares

369,383

Change in ownership interestof parent due to transactions
with non-controlling interests
Change of scope of
consolidation
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period(43,487)
1,113(276,592)(65,678)(4,278)(346,549)(48,101)(417,034)(811,684)(276,592)(65,678)(4,278)(346,549)(48,101)(417,034)(26,126)

167,873(23,287)(2,393)

142,193

92,723472,685

25,679,925―11―

FY2019 (January 1, 2019-December 31, 2019)(Unit: thousand yen)
Shareholders' equity

Balance at beginning of current
periodCapitalstock

CapitalsurplusRetainedearnings

TreasurysharesTotalshareholders'equity5,000,000

12,106,819

9,055,601(1,190,097)

24,972,324

Changes of items during period
Dividends of surplus(718,397)(718,397)

Profit (loss) attributable toowners of parent(1,280,492)(1,280,492)

Purchase of treasury shares
Disposal of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period(7,905)(79,943)(79,943)

10,955

3,049
73,98273,982－－

66,076(1,998,889)(68,988)(2,001,800)

5,000,000

12,172,896

7,056,711(1,259,085)

22,970,523

Accumulated other comprehensive income
Valuation
Total
Share
Foreign
Remeasuredifference on
accumulated acquisition
currency
ments
other
availablerights
translationof defined comprehensive
for-saleadjustment benefit plansincomesecurities
Balance at beginning of current
period167,873(23,287)(2,393)

142,193

92,723

Noncontrollin
g interests

Total net
assets472,685

25,679,925

Changes of items during period
Dividends of surplus(718,397)

Profit (loss) attributable toowners of parent(1,280,492)

Purchase of treasury shares(79,943)

Disposal of treasury shares

3,049

Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period

73,982(157,180)(20,853)

448(177,586)(6,449)(130,176)(314,211)(157,180)(20,853)

448(177,586)(6,449)(130,176)(2,316,012)

10,693(44,141)(1,945)(35,393)

86,274

342,508

23,363,913―12―

(4) Consolidated statements of cash flows(Unit: thousand yen)
FY 2018(January 1, 2018December 31, 2018)

FY 2019(January 1, 2019December 31, 2019)

Cash flows from operating activities
Profit (loss) before income taxes

3,483,536(666,865)

Depreciation

1,012,989

1,167,950

Impairment loss

217,909

1,207,313

Amortization of goodwill

331,137

320,115

Increase (decrease) in allowance for doubtful accounts

40,12952,044

Increase (decrease) in provision for bonuses

33,477(34,332)

Increase (decrease) in provision for directors' retirement benefits(31,575)

8,113

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

91,282

57,696

Increase (decrease) in net defined benefit liability

27,794(5,160)Interest and dividend income(27,806)(29,120)

Interest expenses

81,35876,310Share of loss (profit) of entities accounted for using equity method

70,000159,466

Commission fee

159,072

170,381

Loss (gain) on sales of non-current assets(398,163)－

Loss (gain) on sales of investment securities(109,927)(257,698)

Loss (gain) on valuation of investment securities

1,030

1,157,265

Loss on abolishment of retirement benefit plan

133,561－

Loss (gain) on sales of stocks of subsidiaries and associates－

34,635

Loss on liquidation of subsidiaries and associates－

279,462

Decrease (increase) in notes and accounts receivable - trade

3,271,185(485,653)

Decrease (increase) in inventories(652,238)(295,780)

Increase (decrease) in notes and accounts payable - trade

451,020

666,645

Increase (decrease) in accounts payable - other(759,178)

86,332

Increase (decrease) in accrued consumption taxes(487,672)

173,678

Increase (decrease) in advances received

117,489(224,755)

Decrease (increase) in other assets

236,814(599,979)

Increase (decrease) in other liabilities(126,248)

96,053

Other, net(75,482)(4,691)

Subtotal

7,091,497

3,109,426

Interest and dividend income received

27,80636,344

Proceeds from insurance income

11,3106,532Interest expenses paid

(74,325)(80,967)

Income taxes paid

(1,677,000)(1,873,019)

Net cash provided by (used in) operating activities

5,379,288

1,198,316―13―

(Unit: thousand yen)
FY 2018(January 1, 2018December 31, 2018)

FY 2019(January 1, 2019December 31, 2019)

Cash flows from investing activities(1,354,504)(813,431)

Proceeds from sales of property, plant and equipment

1,328,933

12,617Purchase of intangible assets(676,389)(84,578)

Purchase of investment securities(681,113)(399,333)

Proceeds from sales of investment securities

166,282

503,208

Payments into time deposits(22,454)(189,869)

Payments for leasehold and guarantee deposits(393,633)(54,128)

Proceeds from collection of leasehold and guarantee deposits

92,532

138,806

Proceeds from maturity of insurance funds

36,477

81,778(220,587)(266,382)(382,018)(188,141)－(181,819)

15,420－30,318(119,865)(2,060,737)(1,561,137)

Net increase (decrease) in short-term loans payable(4,701,764)(2,318,500)

Proceeds from long-term loans payable

3,643,425

5,850,000

Repayments of long-term loans payable(2,708,672)(2,786,830)

Purchase of treasury shares(540,253)(80,086)

Cash dividends paid

(716,552)(705,122)

Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation(634,537)－

Commission fee paid

(159,072)(170,381)

Other, net(45,164)(125,633)(5,862,590)(336,555)(75,142)(14,803)

Net increase (decrease) in cash and cash equivalents(2,619,182)(714,181)

Cash and cash equivalents at beginning of period

12,372,307

9,790,600

37,474－－(16,011)9,790,600

9,060,407

Purchase of property, plant and equipment

Payments for investments in capital
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Payments for sales of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change
in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

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

Increase in cash and cash equivalents from newly consolidated
subsidiary
Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation
Cash and cash equivalents at end of period―14―(5) Notes on the consolidated financial statements(Notes regarding assumption of going concern)
Not applicable(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.
(Segment information)
Business Segment Information
I FY2018 (January 1, 2018- December 31, 2018)
As disclosed under (Notes related to changes in reportable segments, etc.) for the current consolidated fiscal year.
II

FY2019 (January 1, 2019 - December 31, 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, as of 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 the group after the transfer of consolidated subsidiary Hollyhock Inc. shares, resulting in the removal of
said company from consolidation. 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 wholebusiness 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 haveomitted reporting of segment information for the prior and current consolidated fiscal years.

―15―

(Per-share indicators)
FY 2018(January 1, 2018-December 31, 2018)
Net assets per share

FY 2019(January 1, 2019-December 31, 2019)

1,066.28 yen Net assets per share

977.76yen

Net income per share

82.48 yen Net income (loss) per share(54.50)yen

Diluted net income per share

81.53 yen Diluted net income per share－(Note 1) Although the Company has dilutive shares, we have not presented diluted net income per share for the current
consolidated fiscal year, since the Company has a diluted net loss per share.
(Note 2) Basis for calculating net income per share and fully diluted net income per share is as shown below.

FY 2018(January 1,2018–
December 31, 2018)

FY 2019(January 1,2019–
December 31, 2019)

Net income per share
Profit (loss) attributable to owners of parent(thousand yen)Amount not attributable to common shareholders(thousand yen)
Net income (loss) attributable to owners of parent
pertaining to common shares (thousand yen)
Average number of common shares issued(thousand shares)

1,952,159(1,280,492)－－

1,952,159(1,280,492)

23,66623,495

－

－

277

－

277

－

Diluted net income per share
Net income adjustments attributable to owners ofparent (thousand yen)
Number of common shares increased (thousand
shares)(Subscription rights to shares (thousand shares) )Summary of fully diluted shares not included in
the calculation of fully diluted net income pershare due to anti-dilutive effect――*To calculate net income per share, those AOI TYO Holdings shares remaining in trust that are posted as treasury shares areincluded in treasury shares deducted in the calculation of average number of shares during the term. To calculate net assets per
share, these same shares are also included in the number of treasury shares deducted from the year-end number of shares issued. A
total of 363,361 shares and 418,900 shares of treasury stock noted above were deducted for the purpose of calculating net income
per share for the prior consolidated fiscal year and current consolidated fiscal year, respectively. At total of 418.900 shares and418,900 shares of treasury stock noted above were deducted for the purpose of calculating net assets per share for the priorconsolidated fiscal year and current consolidated fiscal year, respectively.

(Significant subsequent events)
Not applicable.

―16―