NEWS RELEASEAOI TYO Holdings Inc.

1-5-1, Osaki, Shinagawa-ku
Tokyo 141-8580

August 24, 2020

Notice Regarding Formulation of a Medium-Term PlanAOI TYO Holdings hereby announces that it has formulated a medium-term plan for the AOI TYO Group,
covering the five years from FY2021 to FY2025, as follows.
Current business results have been extremely severe due to the COVID-19 epidemic; impact reducing
corporate advertising demand will likely be unavoidable going forward as well so long as there is noforeseeable resolution to the spread of the virus. On the other hand, as the pace of change accelerates
over the medium term in the evolution of information and communication technologies, diversification ofmedia, and transformation of behavior patterns in a post-corona society, it is certain that there will be
growing needs for planning and production of video-centric communication tools in order to deepen
engagement between companies and consumers. These changes also present a business expansion
opportunity for AOI TYO Holdings.
AOI TYO Holdings formulated medium-term policies in March 2019 with the fundamental policy to be a
powerful corporate group capable of responding to any era. In order to accelerate our progress toward thatstate, this medium-term plan is themed on updating our production functions, broadly reorganizing the AOI
TYO Group to respond to an era of transformation. We will consolidate into a dual-business structure of
the Content Production Business and Communication Design Business, and Group employees will workin unison to improve corporate value.

1. Recognizing the Business Environment
In our TV commercial production, a core pillar for AOI TYO Holdings, the TV commercial production
market is expected to shrink at a maximum annual rate of around 2% with decreases in TV advertisingexpenses. TV advertising expenses fell sharply around the time the Lehman Brothers filed for bankruptcy
in 2008, and the current economic downturn caused by COVID-19 is expected to exert similar effects.
However, with the accelerated shift to digital, the online video advertising market is expected to grow at apace of around 20% per year. Of this growth, though some will be in high-priced brand videos, an area weare involved in, there is also to be significant growth in low to medium-priced videos.
Customer-by-customer, there is a growing number of advertisers who feel the need to directly transact
with production companies, centered on venture companies and firms with annual advertising expenses

between in the ¥100 million to ¥1 billion range. These advertisers, a focus for AOI TYO Holdings, are moreinterested in the media mix rather than TV commercials alone, and have strong needs for production andmarketing that understands the company's products and services. There is also a certain set of needs forsupporting the design and operation of communication overall.
Based on these circumstances, we discussed the ideal future state of the AOI TYO Group from the dual
perspectives of (1) integrated Group management and (2) businesses and organizations following ourbusiness development policy to dig deeper, expand wider. These discussions led to the formulation of thismedium-term plan.
2. Corporate Slogan
On the formulation of this medium-term plan, we established a new slogan that encapsulates the AOI TYOGroup's mission and vision.

Our Slogan: Produce the future. Produce emotion. Produce people.
Producing the future is tackling growth areas; producing emotion is digging deeper into our strengths;
producing people is creating a place where our people - our assets - can grow. These are the goals that
our employees will take on together as we aim for corporate growth.
*"Produce" refers to creating the tangible and the intangible, as well as creating value.

3. Overview of the Medium-Term Plan's Theme and Priority Measures
Theme ： Group-wide update of production functions
Key Measures: Restructuring Business Segments(1) Reforming business/organizational structures(2) Clarifying initiatives in each business(3) Deepening and strengthening Group management

We will switch from our legacy business structure focusing on the Advertising Video Production
Business to a dual-business structure. This structure will have the Content Production Business,handling traditional advertising video production primarily centered on orders from advertising
companies, and the Communication Design Business, handling design and execution ofcommunication and focused on directly transacting with advertisersIn the Content Production Business, we will leverage our industry-leading share and cultivatedexpertise as strengths to pursue high quality and productivity to shore up our business. At the sametime, we will expand the scope of our work to the low to medium-priced digital video market, wheremarket growth is expectedIn the Communication Design Business, we will work to strengthen our customer base, provide
higher value-added integrated marketing and communication services, and expand the range of ourservices to omnidirectional execution for promotion

We will press forward with integrated Group management, reduce costs through joint purchasing,resource sharing, and operational efficiency, and unify our personnel structures and administrativesystems4. Key Measures (Restructuring Business Segments)(1) Reforming business/organizational structures
We will aggregate our 33 consolidated subsidiaries (as of this document's issuance) into adual-business structure of the Content Production Business and Communication Design Business,
reducing the number of consolidated subsidiaries to 23. This change is to be completed by January2021.
Subsidiaries involved in advertising video production and post-production with advertising
companies as their main clients will be deemed as the Content Production Business,consolidating four post-production subsidiaries into one companySubsidiaries and divisions involved in providing solutions and in PR, events, and similar services
primarily in direct transactions with advertisers will be deemed as the Communication Design
Business, and consolidated into one company
Content Production BusinessCommunication Design Business(14 consolidated subsidiaries)(9 consolidated subsidiaries)

Video Advertising Business (former)

Solutions Business (former)

Production Overseas Business (former)

Advertisement-related Business (former)

subsidiaries

Non-production Overseas Business (former)

Advertisement-related Business (former)

subsidiaries(partial)

New Organizational Structure after January 2021 (Tentative)

(2) Clarifying initiatives in each businessWe will analyze the strengths and weaknesses of each business after reorganization into adual-business structure and clarify initiatives for focus.
Content Production BusinessShoring up production businesses withadvertising companies-Boosting orders for new/digital projects-

Reducing external production costs-

Improving planning/proposal capabilities

Communication Design BusinessContracting for total execution-

Diversifying post-production business-Expanding audio editing, color grading, CGwork

Planning, producing XR content (VR/AR)

Strategic PR design, event promotion
planning, advertising budget allocation

Unifying production flow, holding video

planning that matches the advertisers'

production academies to discover talentClarifying targets and services
provided

Capturing low to medium-priced digital projects-Expanding repeat customer poolmarketing strategy
Providing integrated marketing/planning-

Enhancing functions as an advertisers'
marketing partner(3) Deepening and strengthening Group management, reducing costs
We will press forward with integrated Group management, working to achieve major cost reductionsof up to ¥2 billion (FY2022) centered on office consolidation and operational efficiency. Further, inorder to fully leverage the power of our human resources under our dual-business structure, we willbuild a Group integrated personnel platform based on our human resources management policies,
using internal recruitment and talent exchange systems to provide personnel places to grow within theGroup. Otherwise, we will also integrate our core systems, implement electronic application/billingsystems, promote work-from-home systems, and encourage remote work.
5. KPIs and FY2025 Business Results Plan（1） Management Indicators (KPIs)
Financial

EBITDA : ¥5.7 billion yen (FY2025) *FY2020 forecast: -¥230 million

ROE: 10%+Non-financial
Employee engagement improvement

Contribution to of the SDGs

（2） Results Plan
FY2019 Results

FY2020 Forecast

FY2025 Plan(Reference)
Consolidated Net Sales¥65.2 billion¥50.0 billion¥68.0 billion

Consolidated operating income¥2.1 billion-¥1.4 billion¥4.4 billion

Composition of Net Sales
80
Billionsof yen
70
60
50

1720

21

50.01240
30

68.0

65.2

Communication Design Business
Content Production Business484738100FY2019 Results FY2020 Forecast

FY2025 Plan

6. Shareholder Return
We will continue to maintain our basic policy to achieve a consolidated dividend payout ratio of 30% ormore, while constantly aim to improve corporate value and appropriately distribute profits based on ourperformance and in consideration of ongoing, stable distribution.

*Details of the measures in the medium-term plan will be listed in the Earnings Presentation - Second Quarter,FYE December 2020 release, scheduled to be published on September 2, 2020.
*The contents listed in this material are based on a variety of assumptions and presuppositions as determinedby the Company, and do not constitute a guarantee or promise of the execution of measures or futureplanning or target figures described. Actual performance may vary from forecasts due to various factors that
may occur in the future, such as changes in the business environment.