Earnings Presentation
First Quarter, FYE December 2020
May 2020
AOI TYO Holdings Inc.

Contents
1. Summary of Consolidated Financial Results
2. Consolidated Earnings Forecast
3. Appendix - Stock Information, etc1

1.

Summary of Consolidated Financial Results

2

Financial Highlights
 Sales were lower year on year due to delays in filming and editing video advertising projects,
event cancellations and delays in our advertisement-related business, and a drop-off in sales
from underperforming subsidiaries that we restructured in the prior fiscal year.
 Each profit category was lower year on year, mainly due to the impact of lower sales.
(million yen)

Q1 FY2018

Q1 FY2019

Q1 FY2020

YoY Change

Progress Vs.
1H Forecast

Net Sales

15,521

15,47013,049-2,421

41.4%

Operating Income

1,092

633

116-517

11.6%

Ordinary Income

1,031

564

5-558

0.6%

Profit Attributable toOwners of Parent

842263-32-296-6.4%

EBITDA

1,406

990

400-59024.1%
3

Trend of Net Sales by Quarter and Order Backlog
 The negative impact on sales of postponements or cancellations of projects due toCOVID-19 amounted to ¥1,850 million (80% delayed until Q2 or later).
 End of Q1 order backlog amounted to 16,910 million yen (up 6.3% year on year).
20,00019,424 18,425
15,521 15,470

15,00015,343

15,166

13,04916,168(million yen)

14,504FY2018FY201910,0005,000

0FY2020

16,910Order backlog FY2018
Order backlog FY2019

14,985

14,331

13,466

Order backlog FY2020

13,191

15,912

15,11914,46914,606

Q1Q2

Q3

Q4
4

Trends of Operating Income by Quarter Q1 operating profit was significantly lower due to lower sales, despite
differences due to costs in the prior year in connection with impairment loss
related to software and prior-year costs related to restructuring at poorly
performing subsidiaries.
1,500(million yen)

1,092

1,068

1,000

FY2018

654

633

619

500

FY2019FY2020

337

116

0965

Q1183

Q2

Q3

Q4
5

Net Sales by Business Segment
 Solutions Business sales were essentially level year on year; however, otherbusinesses recorded lower sales due to the impact of COVID-19.

(million yen)

10,769
8,724
2,273

1,940

1,611

Q1 FY20191,605

Q1 FY2020

817

Video Advertising

Advertisement-Related

Solutions

780

Overseas

6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 Sales to major advertising agencies were significantly lower year on year due
to delays in filming and editing related to video advertising production projects.

19.8%
Q1 FY2019

32.2%

3,062

28.0%

4,977

4,328

20.0%
3,101

* Net sales from Dentsu Inc. (non-consolidated) were 2,682 million yen, and net sales from Hakuhodo Inc.
(non-consolidated) were 3,825 million yen.

25.3%

20.0%
Q1 FY2020

2,614

3,296

31.7%
4,135

23.0%

(million yen)

Dentsu GroupHakuhodo GroupDirect transactions
Other

3,002

* Net sales from Dentsu Inc. (non-consolidated) were 2,363 million yen, and net sales from Hakuhodo Inc.
(non-consolidated) were 2,461 million yen.

8

Net Sales by Medium Digital content sales continued to grow.
(million yen)

Q1 FY2019(million yen)

Component
Ratio

Q1 FY2020

Component
Ratio

YoY
Change

8,831

56.3%

7,353

55.5%

-1,477

8,438

53.8%

7,058

53.3%

-1,380

393

2.5%

295

2.2%

-98

534

3.4%

353

2.7%

-182

3,269

20.8%

3,684

27.8%

+415

791

5.0%

627

4.7%

-164

Other2,255

14.4%

1,234

9.3%

-1,021

Total

15,681100.0%

13,252100.0%-2,429TV commercial production
TV commercial
Printed commercial materials
Entertainment contents
Digital contentsOverseas* The results are simple totals of the consolidated financial results of AOI Pro. Inc. and TYO Inc.
9

Summary of Consolidated Balance Sheet Cash and cash equivalents amounted to ¥9,142 million, as we maintained a high 188.7% liquidity ratio.
 We closed commitment lines with a number of financial institutions for a combined ¥12 billion,securing sufficient liquidity.
(million yen)

FY2019Q1 FY2020

Major Components
notes and accounts receivable (-3,277); electronicallyrecorded monetary claims (+697); work in process (＋1,514)

Current Assets

36,00335,103

Non-current Assets

17,34817,24653,352

52,349Current Liabilities

18,34318,606

Accounts payable (-1,431); short-term loans payable (+2,300)

Non-current Liabilities

11,645

10,893Long-term loans payable (-742)

Total Liabilities

29,98829,500Total Net Assets

23,363

22,849Total Liabilities and Net Assets

53,352

52,349Total Assets(percentage of total assets)(43.8%)(43.6%)

Retained earnings(-319)

10Video Advertising Business Despite measures to improve effective profit margin, the impact of several
unprofitable projects accepted in the prior fiscal year led to lower effective profit
margin.
40.0%

12,000

36.5%
34.7%

9,000

6,000

32.3%

9,511

9,921

8,580

Q1 FY2018

388
Q1 FY2019

283
Q1 FY2020

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

25.0%

525
0

35.0%

30.0%

3,000(million yen)

20.0%

* Effective profit margin: (net sales external expenditures)/net sales* Calculations for the TV commercial
production department only11

Solutions Business (1) - TYO Offering Management Business Unit Despite lower net sales, we expanded our customer base by winning newcustomers, etc.
Sales at the TYO Offering Management
Business Unit(million yen)

*Excluding media placement purchases

4,723

5,000

■■ Q1

3,717

4,000

■

Full-year

3,000
2,000
1,000
0709
FY2018946

FY2019830
FY202012

Solutions Business (2) - Quark tokyo + Mediator Mediator, established last year, got off to a favorable start, leading to highersales.

Sales at Quark tokyo + Mediator(million yen)

3,000

2,226

2,087

■■ Q1

2,000

1,0000■625

FY2018528

FY2019Full-year

613

FY202013

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

8,000(million yen)

5,824

6,0005,679
■■ Q1

4,000

2,0000■1,329

FY20181,376

FY2019Full-year

1,137

FY202014

Advertisement-Related Business Cancellations and postponements of events and exhibitions due to COVID-19
resulted in lower sales for events-related subsidiaries.
sales in Advertisement-Related Businesses
12,000(million yen)

9,846

9,644

9,000

■■ Q1
■

6,000
3,000
0

1,677

FY20182,273

FY2019Full-year

1,940

FY2020152.

Consolidated Earnings Forecast

16

Revised Consolidated Earnings Forecast
 At present, there are no forecasts as to when the conclusion of COVID-19 will occur.
Therefore, we find it difficult to make rational calculations of the impact of COVID-19 on ourresults. For the time being, we plan to leave our earnings forecasts undecided and make anannouncement at a future time when we are able to make calculations.
FY2020 Previous Forecast(million yen)First Half

Full YearFY2020 Latest Revised Forecast
First HalfFull YearNet Sales

31,50065,000

TBD

TBD

Operating Income

1,000

2,500

TBD

TBD

Ordinary Income

900

2,400

TBD

TBD

Profit Attributable toOwners of Parent

500

1,400

TBD

TBD

EBITDA

1,660

3,830

TBD

TBD

*Published February 19, 2020

*Published April 28, 202017

Initiatives Against COVID-19
Ensuring Employee Safety

Measures for Video Advertising Production• Create AOI TYO Group policies that define basic• We have asked customers to postpone filming,

employee behavior.

• Implementing telework and restricting officeaccess as a rule. When office attendance isnecessary, we require masks and prohibit eatingin groups.

editing, or other work requiring close contact.

Also, we have closed studios and engaged remote
services for editing and other tasks.

• We are negotiating with advertising agencies andadvertisers regarding plans and production

methods to minimize the risk of infection, striving
to continue with appropriate advertisingcommunications.

18

Impact of COVID-19 on Earnings
Impact of Measures to Prevent the Spread of Disease• Even if the declaration of emergency is lifted in the future, measures are still likely to be be required toprevent the spread of COVID-19. The degree of such requirements has not been clarified at this time, so it isdifficult to determine the extent to which the AOI TYO Group and our video and event production operations
will be affected.

Impact of Slowing Economic Activities• The stagnation of economic activity caused by COVID-19 may exacerbate the economic situation and dampen
corporate earnings in Japan and overseas, resulting in lower demand for advertising. However, it is difficult toprovide a rational calculation of this impact on orders for group services at this time.

193.

Appendix - Stock Information, etc

20

AOI TYO Group*As of Mar. 31, 2020.

Consolidated subsidiaries: 33 total
Consolidated employees: 1,622

Date of establishment: Oct. 25, 1963

Consolidated subsidiaries: 17 (including AOI Pro.)

Osaki

Consolidated employees: 722

Date of establishment: Apr. 2, 1982

Consolidated subsidiaries: 16 (including TYO)Consolidated employees: 74421Status of Stock and Shareholders (as of Dec. 31, 2019)
Number of Shares and Shareholders

Status of Large Shareholders

Total number of shares issued

24,566,447

Total number of shareholders

11,169

Shareholder Composition byType of Shareholder

2.8%

Individuals, etc.

8.9%
15.1%
2.0%
27.3%

Financial institutions

43.9%

Financial instruments
business operator
Other corporations
Foreign corporations,etc.
Treasury shares

Shareholder Name

Number ofShares Held

Shareholding
Ratio

1,960,300

8.21%

1The Master Trust Bank of Japan, Ltd.
(Trust Account)2

Cosmo Channel

1,153,740

4.83%

3

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

1,070,200

4.48%

4

IMAGICA GROUP Inc.

1,018,000

4.26%

5

Japan Trustee Services Bank, Ltd.
(Trust Account)

831,700

3.48%

6

Fields Corporation

479,660

2.01%

418,900

1.75%

411,000

1.72%

7
8

Trust & Custody Services Bank, Ltd.
(Trust Account E)
Japan Trustee Services Bank, Ltd.
(Trust Account 5)

9Hitoshi Hara

400,000

1.68%

10

Fumiko Hara

328,000

1.37%* The shareholding ratios are calculated by subtracting treasury shares (690,664).

22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)
23