NEWS RELEASEAOI TYO Holdings Inc.

2-2-24, Higashi-shinagawa, Shinagawa-ku
Tokyo 140-8663

February 16, 2021

Notice Regarding Recognition of Extraordinary Loss (Consolidated) andRevision to Full-year Consolidated Performance Forecast

AOI TYO Holdings, Inc. has announced the recording of an extraordinary loss for the fiscal year ended
December 2020, as described below. The company has also revised its consolidated earnings forecast,originally announced on August 24, 2020.

1. Recording of extraordinary loss (consolidated)
The AOI TYO Group has discussed the ideal future state of the group from the dual perspectives of (1)integrated Group management and (2) businesses and organizations following our businessdevelopment policy to dig deeper, expand wider. These discussions led to the formulation of a mediumterm plan, published on August 24, 2020. Based on this plan, the group organized its consolidated
subsidiaries into the Content Production Business and the Communication Design Business, engaging
in a major reorganization that eliminated 10 consolidated subsidiaries. At the same time, the groupdecided to continue encouraging employees to work from home, first implemented in February 2020,
supporting diverse work styles while protecting the health and safety of employees. In connection withthis policy, the group has also moved forward with office consolidations and reductions*. As a result, theAOI TYO Group decided to record ¥946 million in business restructuring expenses, consisting of a
related loss on disposal of property, plant and equipment, restoration costs, and rent expenses, etc., forthe period in question.
*Number of locations to be eliminated: 17 (including relocations to reduce floor space and partial
returns of space)
Further, due to the impact of the spread of COVID-19 at an AOI TYO Holdings consolidated subsidiary,a discrepancy has occurred between the business plan at the time of investment and actual results.
Therefore, the company has decided to record an impairment of goodwill in the amount of ¥300 million.

2. Revised forecast of consolidated financial results for January 1 – December 31, 2020
Millions of yen, excepting net income per share
Net sales

OperatingincomeOrdinary
incomeNet income
attributable toowners of theparentNet income
per share (¥)

Earlier forecast (A)50,000-1,400-1,500-1,500-63.94

Revised forecast (B)51,080-720-1,140-2,550-108.68(B) – (A)

1,080

680

360

-1,050

-

2.2

----

65,229

2,118

1,763

-1,280-54.50Percentage of changes
Reference(FY2019 results)

3. Reasons for revisions to consolidated earnings forecast
In light of the impact of the COVID-19 pandemic, on April 28, 2020, AOI TYO Holdings stated that thecompany would leave its consolidated earnings forecast for the fiscal year ended December 2020
undecided. On August 24, 2020, the company announced its full-year earnings forecasts based on firsthalf earnings and after conducting an analysis of the current business environment and order trends.
As stated in Summary of Consolidated Financial Results (Japanese Accounting Standards) for the Third
Quarter of the Fiscal Year Ending December 31, 2020, published on November 13, 2020, order backlog
decreased significantly under the declaration of a state of emergency during the second quarter. Thisand other factors combined to decrease net sales significantly year on year for the consolidated thirdquarter. However, order backlog has started to increase as production operations in the company'smainstay Video Advertising Business have begun to stabilize in response to measures introduced toprevent the spread of COVID-19 infection. As a result, net sales for the consolidated fourth quarter
continued to decrease year on year in the company's Advertisement-Related Business (including events
business sales which continue to be impacted negatively by COVID-19) and Overseas Business.
However, net sales in the company's Video Advertising and Solutions Businesses were nearly level withthe same period in the prior fiscal year, and full-year net sales outperformed the company's earnings
forecasts.
In addition, AOI TYO Holdings engaged in strict cost reductions related to travel expenses,entertainment expenses, and other costs to achieve up to ¥2.0 billion in cost reductions ahead ofschedule as described in the medium-term plan announced on August 24, 2020. Further, the company
improved effective profit margin which had declined due to the impact of cost billings for projects that
had been canceled or postponed due to the impact of COVID-19. As a result of these and other factors,
the company recorded net operating income for the second half, as opposed to a net operating loss
during the first half of the fiscal year. Therefore, full-year operating loss and ordinary loss were less thanforecast in the company's full-year earnings forecast.
On the other hand, loss attributable to owners of parent was greater than the company's earnings
forecast, mainly due to the recording of extraordinary loss, business restructuring expenses, andimpairment loss as described in 1., above.

4. Dividends forecast for the fiscal year ended December 2020
AOI TYO Holdings canceled interim dividends for the fiscal year ended December 2020 given theuncertainty of full-year consolidated earnings due to the COVID-19 pandemic. Despite the company'sprojections of a loss attributable to owners of parent, AOI TYO Holdings believes that earnings havebegun to recover after reaching a bottom during the consolidated second quarter, and from theperspective of maintaining stable dividends while observing a basic policy of a 30% or greater inconsolidated dividend payout ratio, the company has determined that year-end dividends will be ¥12 pershare, the same level as in the prior fiscal year, projecting an annual dividend of ¥12 per share(compared to an annual dividend of ¥20 per share in the prior fiscal year, consisting of an interim andyear-end dividend of ¥8 per share and ¥12 per share, respectively). While net income attributable toowners of parent will be lower than the company's forecast, AOI TYO Holdings remains committed tothe aforementioned policy and has not made changes to the company's dividends forecast.

*The forecasts above are based on information available at the time. Actual performance may vary fromforecasts due to various factors that may occur in the future.