Summary of Consolidated Financial Results (Japanese Accounting Standards)
for Fiscal Year Ended December 31, 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, Director Tel: +81-3-5495-7575 |
February 19, 2021
Scheduled date of General Shareholders' Meeting | March 25, 2021 |
Scheduled date of commencement of dividend payment: | March 26, 2021 |
Scheduled date of filing of securities report: | March 25, 2021 |
Supplementary documents for quarterly results: | Yes |
Quarterly results briefing: | Yes (for institutional investors and analysts) |
(Rounded down to the nearest million yen) |
1. Consolidated Financial Results for Fiscal Year Ended December 31, 2020 (January 1, 2020 to December 31, 2020)
(1) Consolidated operating results
(The percentages are year-on-year changes.)
Net sales | Operating income | Ordinary income | Profit attributable to owners of parent | |||||
FY2020 FY2019 | Million yen 51,087 65,229 | % -21.7 0.7 | Million yen -727 2,118 | % ‒ -38.3 | Million yen -1,149 1,763 | % ‒ -47.0 | Million yen -2,552 -1,280 | % ‒ ‒ |
(Note) Comprehensive income
FY2020: -2,727 million yen (
-%)FY2019: -1,433 million yen (
-%)
Net income per share | Diluted net income per share | Return on equity (ROE) | Ordinary income as percentage of total assets | Operating income on sales | |
FY2020 FY2019 | Yen -108.81 -54.50 | Yen - - | % -11.9 -5.3 | % -2.3 3.2 | % -1.4 3.2 |
(Reference) Equity in earnings of affiliates
(2) Consolidated financial position
FY2020: -440 million yen
FY2019: -159 million yen
Total assets | Net assets | Equity ratio | Net assets per share | |
FY2020 FY2019 | Million yen 48,682 53,352 | Million yen 20,231 23,363 | % 40.9 43.0 | Yen 848.70 977.76 |
(Reference) Shareholders' equity
(3) Consolidated cash flow
FY2020: 19,925 million yen
FY2019: 22,935 million yen
Cash flows from operating activities | Cash flows from investing activities | Cash flows from financing activities | Cash and cash equivalents at end of period | |
FY2020 FY2019 | Million yen 2,892 1,198 | Million yen -843 -1,561 | Million yen -397 -336 | Million yen 10,703 9,060 |
Cash and cash equivalents
2. Dividends
Dividends per share | Total dividends | Payout ratio (consolidated) | Ratio of dividends to net assets (consolidated) | |||||
End of Q1 | End of Q2 | End of Q3 | Year end | Annual | ||||
FY2019 FY2020 | Yen ‒ ‒ | Yen 8.00 0.00 | Yen ‒ ‒ | Yen 12.00 12.00 | Yen 20.00 12.00 | Million yen 477 286 | % - - | % 2.0 1.3 |
FY2021 (forecast) | ‒ | 0.00 | ‒ | 12.00 | 12.00 | 73.7 |
3. Consolidated Financial Forecast for FY2021 (January 1, 2021 to December 31, 2021)
(The percentages are year-on-year changes.)
Net sales | Operating income | Ordinary income | Profit attributable to owners of parent | Net income per share | |||||
Full year | Million yen 53,000 | % 3.7 | Million yen 900 | % - | Million yen 800 | % - | Million yen 400 | % - | Yen 17.05 |
* Notes
(1) Important changes in subsidiaries for FY2020 under review
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 |
(ii) Changes in accounting policies other than (i) | : | Not applicable |
(iii) Changes in accounting estimates: | : | Not applicable |
(iv) Restatements of accounting estimates: | : | Not applicable |
(3) Number of issued shares (common stock) | ||
(i) Number of issued shares (including treasury stock) |
New: ― companies Excluded: ― companies
:
(Changes is specified subsidiaries resulting in change in scope of consolidation)
FY2020 24,566,447 shares FY2019
24,566,447 shares
(ii) Number of treasury stock at end of period
FY2020 1,088,298 shares FY2019 1,109,564 shares
(iii) Average number of issued shares
FY2020 23,462,748 shares FY2019 23,495,396 shares
(Note)
Treasury stock includes shares that Custody Bank of Japan, Ltd. (trust account E) holds as trust property related to a Board Benefit Trust system (FY2020: 411,200 shares; FY2019: 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 AOI TYO 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 3, 2021. After the 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 Results 2
(1) Discussion of Operating Results 2
(2) Discussion of Financial Position 3
(3) Discussion of Cash Flows 3
(4) Future Outlook 4
2. Basic Policy Regarding Selection of Accounting Standards 5
3. Consolidated Financial Statements and Major Notes 6
(1) Consolidated Balance Sheets 6
(2) Consolidated Statements of Income and Statements of Comprehensive Income 10
(3) Consolidated Statements of Changes in Shareholders' Equity 13
(4) Consolidated Statements of Cash Flows 15
(5) Notes on the Consolidated Financial Statements 17
(Notes Regarding Assumption of Going Concern) 17
(Segment Information) 17
(Per-share Indicators) 17
(Significant Subsequent Events) 17
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, restrictions on travel outside the home and business activities were imposed in Japan and overseas intermittently to prevent the spread of COVID-19. In Japan, production shifted in an upward trend, mainly in production machinery, as external demand continued to pick up beginning in the summer. In addition, business confidence in the non-manufacturing sector experienced a temporary recovery at the beginning of autumn in response to increased consumer movement stemming from eased attitudes toward travel outside the home. The pace of economic recovery is expected to slow, as the level of activity remains sluggish due to the reemergence of COVID-19 infections. The advertising market in Japan declined overall as corporations reduced their advertising expenditures. We saw a significant decrease in TV commercials, while we expect internet advertising to decline only marginally.
In response to the spread of COVID-19, the AOI TYO Group began implementing anti-infection measures in February 2020. Under the declaration of a statement of emergency between April and May 2020, we closed our filming and editing studios temporarily and requested advertising companies and advertisers to postpone filming. After the declaration of the state of emergency was lifted, we moved to resume operations, signing an advisory contract with a medical coordination company to resume operations and creating our own work guidelines. In this way, we have continued to conduct filming and editing operations while taking measures to prevent the spread of infection.
Amid these circumstances, the AOI TYO Group discussed the ideal future state of the group from the dual perspectives of (1) integrated Group management and (2) businesses and organizations following our business development policy to dig deeper, expand wider. These discussions led to the formulation of a medium-term plan, published on August 24, 2020, which we have moved quickly to implement.
Net sales for the consolidated fiscal year in each group business were significantly lower year on year. In addition to the direct impact of the suspensions and postponements of filming and editing operations under the declaration of a state of emergency, Video Advertising Business orders from major advertising companies experienced a notable decrease. Further, continued cancellations and postponements of various events in the Advertisement-Related Business and a decrease in orders in the Solutions Business due to restraints on sales activities under the emergency declaration. These factors combined to drive full-year performance lower. However, although net sales for the stand-alone 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, net sales in the Video Advertising and Solutions Businesses were nearly level with the same period in the prior fiscal year.
In terms of profits, 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 of schedule as described in our medium-term plan. Further, the company improved effective profit margin which had declined temporarily 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.
We organized our consolidated subsidiaries into the Content Production Business and the Communication Design Business based on our medium-term plan, engaging in a major reorganization that eliminated 10 consolidated subsidiaries. At the same time, we decided 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 with this policy, the group has also moved forward with office consolidations and reductions*. As a result, the AOI TYO Group recorded ¥946 million in business restructuring expenses, consisting of a related loss on disposal of property, plant and equipment, restoration costs, and rent expenses, etc., for the period in question. Further, due to the impact of the spread of COVID-19 at an AOI TYO Holdings consolidated subsidiary, a discrepancy has occurred between the businessplan at the time of investment and actual results. Therefore, the company recorded an impairment of goodwill in the amount of ¥300 million.
*Number of locations to be eliminated: 17 (including relocations to reduce floor space and partial returns of space)
As a result, the AOI TYO Group recorded net sales of ¥51,087 million for the consolidated fiscal year ended December 2020, representing a 21.7% decrease compared to the prior year. Operating loss amounted to ¥727 million (¥2,118 million of operating profit in the same period of prior fiscal year), while ordinary loss amounted to ¥1,149 million (¥1,763 million of ordinary profit in the same period of prior fiscal year) and loss attributable to owners of parent amounted to ¥2,552 million (¥1,280 million of loss attributable to owners of parent in the same period of prior fiscal year). Selling, general and administrative expenses included ¥323 million in amortization of goodwill associated with M&A activity.
(2) Discussion of financial position
Total assets at the end of the consolidated fiscal year decreased by ¥4,669 million compared with the end of the prior fiscal year to ¥48,682 million. This decrease was mainly due to decreases in notes and accounts receivable of ¥3,651million, electronically recorded monetary claims of ¥850 million and total property, plant and equipment of ¥827 million, although cash and deposits increased ¥1,702 million.
Liabilities decreased by ¥1,537 million compared with the end of the prior fiscal year to ¥28,451 million. Although long-term loans payable and current portion of long-term loans payable increased ¥2,102 million and ¥1,300 million, respectively, short-term loans payable decreased ¥3,200 million.
Net assets amounted to ¥20,231 million, a decrease of ¥3,132 million compared to the end of the prior consolidated fiscal year. Retained earnings decreased ¥2,552 million due to loss attributable to owners of parent. At the same time, the AOI TYO Group paid ¥286 million in dividend payments.
(3) Discussion of cash flows
Cash and cash equivalents ("Cash") amounted to ¥10,703 million as of the end of the consolidated fiscal year, representing an increase of ¥1,642 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 ¥2,892 million, compared to cash from operating activities of ¥1,198 million for the prior fiscal year. This result was mainly due to decrease in trade receivables of ¥4,484 million, decrease in trade payables of ¥1,532 and loss before income taxes of ¥2,457.
Cash Flows From Investing Activities
Cash used in investing activities amounted to ¥843 million, compared to ¥1,561 million for the prior fiscal year. The main cash inflow was ¥144 million in proceeds from refund of leasehold and guarantee deposits, while the main cash outflow was due to ¥447 million in purchase of property, plant and equipment, ¥283 million in payments of leasehold and guarantee deposits, and ¥235 million in payments for investments in capital.
Cash Flows From Financing Activities
Cash used in financing activities amounted to ¥397 million compared to cash from financing activities of ¥336 million for the prior fiscal year. This result was mainly due to ¥7,200 million in cash proceeds from long-term loans payable, ¥3,200 million decrease in short-term loans payable, and ¥3,793 million in outlays for repayments of long-term loans payable.
(4) Future outlook ① External environment (including the impact of COVID-19) and group initiatives
After the state of emergency was lifted on May 25, we applied new standards for safety in production work, and, in addition to a series of information from national and local governments and various domestic and overseas film production guideline examples, we have entered into an advisory contract with a medical coordination company, drafting our own guidelines for production work. During filming, we have also required attendance of a hygiene management team which includes healthcare professionals, and we are taking a number of other measures to prevent the spread of COVID-19 in filming and editing work, such as health checks, and regularly conducting and checking disinfection and ventilation. Further, we are implementing remote video editing methods as another means to normalize operations. We continue to encourage employees to work from home and are reducing the size of our office space. In January 2021, a second state of emergency was declared due to a third wave COVID-19 infections. Since we already had measures in place to prevent the spread of infection in filming, editing, and other operations as described above, almost no projects were canceled or postponed as had been the previous case.
While the domestic advertising market fell sharply in 2020 due to the impact of COVID-19, we expect moderate positive growth in 2021 and beyond. However, GDP growth rate will remain low and it will take a considerable amount of time for the market to recover to pre-COVID-19 levels. In addition, the reinstatement of the emergency declaration will continue to slow personal consumption due to restraints on unnecessary travel and requests for shortened business hours. There are also concerns that worsening employment income will weigh down the market, which may be another factor delaying recovery in the advertising market.
Amid these circumstances, on August 24, 2020, we published the AOI TYO Group medium-term plan covering the five year period from fiscal 2021 through fiscal 2025. The plan defines three key measures: (1) Reforming business/organizational structures; (2) Clarifying initiatives in each business; and (3) Deepening and strengthening group management. Our earnings plan for fiscal 2025 calls for net sales of ¥68 billion, operating income of ¥4.4 billion, and KPIs of ¥5.7 billion in EBITDA and 10% or greater ROE. In January 2021, we restructured our organizations into two businesses, the Content Production Business and the Communication Design Business, and we have accelerated our efforts to reduce costs.
During the fiscal year ending December 2021, our Content Production Business will increase the frequency of proposals and strengthen sales to secure stable orders from major advertising companies. In addition, the business will engage in new sales activities to strengthen our customer base, targeting foreign advertising companies, online advertising companies, consulting firms, platform providers, etc. At the same time, the Content Production Business will focus on developing a structure for low- to medium-unit price digital video production, which is a segment we expect will grow in the future. Meanwhile, the Communication Design Business will establish new management and human resources systems to strengthen coordination among the departments that have been consolidated in our organizational restructuring. At the same time, the business will enhance lacking functions to grow our direct business with advertisers.
② Future outlook
Based on the preceding, we forecast FY2021 consolidated earnings to be ¥53,000 million in net sales, ¥900 million in operating profit, ¥800 million in ordinary profit, and ¥400 million in profit attributable to owners of parent. These forecasts reflect a gradual recovery in net sales and cost reduction efforts.
Given the current declaration of a state of emergency and the uncertain outlook for the timing of a slow-down in the spread of COVID-19, it is difficult to calculate a reasonable short-term earnings forecast. Accordingly, we have left our consolidated earnings forecast for the first half of the fiscal year ending December, 2021, as undecided. We will announce our forecasts as soon as a reasonable calculation becomes possible.
Based on the earnings forecast above, we have established a dividend forecast for the fiscal year ending December, 2021, at ¥12 per share (interim dividend of ¥0 per share and year-end dividend of ¥12 per share), which is the same amount as in the prior fiscal year. This dividend amounts to a consolidated dividend payout ratio of 73.7%, reflecting a stabledividend to the greatest extent possible while maintaining our policy of a 30% or greater consolidated dividend payout ratio.
2. Basic Policy Regarding Selection of Accounting Standards
AOI TYO Group prepares consolidated financial statements according to the Japanese accounting standards in consideration of comparability between fiscal years and between companies. We will consider the adoption of the International Financial Reporting Standards (IFRS) as appropriate, taking into account conditions in Japan and abroad.
3. Consolidated Financial Statements and Major Notes (1) Consolidated balance sheets
Assets |
Allowance for doubtful accounts (37,727) | (31,847) |
Non-current assets |
Buildings and structures, net 2,368,133 | 1,715,208 |
Tools, furniture and fixtures 2,854,794 | 2,373,860 |
Tools, furniture and fixtures, net 807,862 | 633,252 |
Leased assets, net 58,940 | 35,025 |
Total property, plant and equipment 7,084,649 | 6,257,460 |
Other 103,479 | 15,994 |
Accumulated depreciation (846,805) | (877,518) |
(Unit: thousand yen) | ||
FY2019 | FY2020 | |
(December 31, 2019) | (December 31, 2020) | |
Current assets | ||
Cash and deposits | 9,111,122 | 10,813,819 |
Notes and accounts receivable - trade | 16,873,978 | 13,222,465 |
Electronically recorded monetary claims - operating | 4,413,564 | 3,562,775 |
Merchandise and finished goods | 7,301 | 8,267 |
Work in process | 4,510,288 | 4,331,475 |
Other | 1,125,296 | 1,108,034 |
Total current assets | 36,003,823 | 33,014,989 |
Property, plant and equipment | ||
Buildings and structures | 5,142,068 | 4,791,118 |
Accumulated depreciation | (2,773,935) | (3,075,909) |
Machinery, equipment and vehicles | 1,024,383 | 1,001,381 |
Machinery, equipment and vehicles, net | 177,577 | 123,862 |
Accumulated depreciation | (2,046,931) | (1,740,608) |
Land | 3,606,822 | 3,593,652 |
Leased assets | 717,898 | 620,208 |
Accumulated depreciation | (658,957) | (585,182) |
Construction in progress | 65,312 | 156,459 |
Intangible assets | ||
Goodwill | 4,010,215 | 3,375,272 |
Software | 161,589 | 210,209 |
Total intangible assets | 4,275,284 | 3,601,476 |
Allowance for doubtful accounts (775,409) | (770,326) |
Total non-current assets 17,348,413 | 15,667,526 |
FY2019 | FY2020 | |
(December 31, 2019) | (December 31, 2020) | |
Investments and other assets | ||
Investment securities | 1,787,051 | 1,081,036 |
Deferred tax assets | 1,328,303 | 1,533,026 |
Leasehold and guarantee deposits | 1,522,658 | 1,661,033 |
Other | 2,125,874 | 2,303,819 |
Total investments and other assets | 5,988,478 | 5,808,588 |
Total assets | 53,352,237 | 48,682,515 |
FY2019 (December 31, 2019)FY2020 (December 31, 2020)
Liabilities |
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - other
Income taxes payable
Accrued consumption taxes
Advances received
Provision for bonuses
8,697,200 3,200,000 3,073,876
7,144,690
0 4,374,787
661,603 832,283
428,710 172,515
551,961 356,049
899,779 720,753
72,660 218,448
Other 757,366 | 924,210 |
Total current liabilities
18,343,158 14,743,739
Non-current liabilities |
Long-term borrowings
Long-term deposits received
Deferred tax liabilities
6,672,675 8,774,895
3,501,199 3,501,199
46,098 22,630
Provision for retirement benefits for directors (and other officers) 261,883 | 259,435 |
Provision for share-based remuneration for directors (and other officers)
Retirement benefit liability
Asset retirement obligations
254,811 247,750
267,504 343,303
491,279 442,737
Other 149,711 | 115,407 |
Total non-current liabilities
11,645,165 13,707,359
Total liabilities 29,988,323 | 28,451,099 |
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
5,000,000 5,000,000
12,172,896 12,111,198
7,056,711 4,217,210
Treasury shares (1,259,085) | (1,233,609) |
22,970,523 20,094,798
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
10,693 (109,116)
(44,141) (59,597)
(1,945)
(231)
Total accumulated other comprehensive income | (35,393) | (168,945) |
Non-controlling interests 342,508 | 262,707 |
FY2019 | FY2020 | |
(December 31, 2019) | (December 31, 2020) | |
Share acquisition rights | 86,274 | 42,855 |
Total net assets | 23,363,913 | 20,231,415 |
Total liabilities and net assets | 53,352,237 | 48,682,515 |
(2) Consolidated statements of income and statements of comprehensive income Consolidated statements of income
(Unit: thousand yen)
FY2019 (January 1, 2019-December 31, 2019)FY2020 (January 1, 2020-December 31, 2020)
Net sales | 65,229,849 | 51,087,544 |
Cost of sales
53,514,621 43,867,259
Gross profit 11,715,227 | 7,220,284 |
Selling, general and administrative expenses
Remuneration for directors (and other officers)
Salary and bonus
Retirement benefit expenses
Provision for share-based remuneration for directors (and other officers)
Outsourcing expenses
Commission expenses
Provision of allowance for doubtful accounts
Depreciation
Amortization of goodwill
1,484,604 1,307,296
2,718,118 2,387,323
54,385 49,026
57,696 6,749
560,977 670,376
577,609 151,768
15,203 6,865
250,382 218,023
320,115 323,332
Other
3,557,688
2,826,727
Total selling, general and administrative expenses 9,596,781 | 7,947,490 |
2,118,445
Operating profit (loss)
(727,206)
Non-operating income |
Interest income
Dividend income
Subsidy income
Insurance return
7,234 2,467
21,886 16,279
- 279,784
42,061 42,385
Other
108,807 124,729
Total non-operating income 179,989 | 465,646 |
Non-operating expenses
Interest expenses
Commission expenses
Share of loss of entities accounted for using equity method
Loss on retirement of non-current assets
76,310 83,327
170,381 164,824
23,676 124,546
Other 105,243 | 74,610 |
535,078 887,714
Total non-operating expenses
Ordinary profit (loss) | 1,763,356 | (1,149,274) |
(Unit: thousand yen) | |
FY2019 | FY2020 |
(January 1, 2019- | (January 1, 2020- |
December 31, 2019) | December 31, 2020) |
Extraordinary income |
Gain on reversal of share acquisition rights 3,672 | 34,560 |
Extraordinary losses |
Total extraordinary losses 2,756,967 | 1,386,944 |
Income taxes - current 1,200,964 | 289,252 |
Total income taxes 600,487 | 111,542 |
Profit (loss) attributable to non-controlling interests 13,139 | (16,406) |
Gain on sales of non-current assets | - | 6,279 |
Gain on sales of investment securities | 323,073 | 3,321 |
Gain on sales of shares of subsidiaries and associates | - | 34,201 |
Total extraordinary income | 326,745 | 78,362 |
Impairment loss | 1,207,313 | 300,209 |
Loss on sales of investment securities | 65,374 | - |
Loss on valuation of investment securities | 1,157,265 | 86,439 |
Loss on liquidation of subsidiaries and associates | 279,462 | - |
Business restructuring expenses | - | 946,707 |
Loss on sales of shares of subsidiaries and associates | 34,635 | - |
Other | 12,916 | 53,588 |
Loss before income taxes | (666,865) | (2,457,856) |
Income taxes - deferred | (600,476) | (177,710) |
Loss | (1,267,352) | (2,569,398) |
Loss attributable to owners of parent | (1,280,492) | (2,552,992) |
Consolidated statements of comprehensive income
(Unit: thousand yen)
FY2019 (January 1, 2019-December 31, 2019)FY2020 (January 1, 2020-December 31, 2020)
Profit (loss) | (1,267,352) | (2,569,398) |
Other comprehensive income
Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
(157,171) (119,809)
(12,002) (30,911)
448 2,737
1,713
(8,885)
Total other comprehensive income (165,987) | (157,893) |
Comprehensive income
(1,433,340) (2,727,292)
Comprehensive income attributable to |
Comprehensive income attributable to owners of parent
(1,448,017) (2,706,290)
Comprehensive income attributable to non-controlling interests
(3) Consolidated statements of changes in shareholders' equity
FY 2019 (January 1, 2019-December 31, 2019)
(Unit: thousand yen)
Shareholders' equity | |||||
Capital stock | Capital surplus | Retained earnings | Treasury shares | Total shareholders' equity | |
Balance at beginning of current period | 5,000,000 | 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 to owners of parent | (1,280,492) | (1,280,492) | |||
Purchase of treasury shares | (79,943) | (79,943) | |||
Disposal of treasury shares | (7,905) | 10,955 | 3,049 | ||
Change in ownership interest of parent due to transactions with non-controlling interests | 73,982 | 73,982 | |||
Net changes of items other than shareholders' equity | |||||
Total changes of items during period | - | 66,076 | (1,998,889) | (68,988) | (2,001,800) |
Balance at end of current period | 5,000,000 | 12,172,896 | 7,056,711 | (1,259,085) | 22,970,523 |
Accumulated other comprehensive income | Share acquisition rights | Non-controllin g interests | Total net assets | ||||
Valuation difference on available-for-sale securities | Foreign currency translation adjustment | Remeasure-ments of defined benefit plans | Total accumulated other comprehensive income | ||||
Balance at beginning of current period | 167,873 | (23,287) | (2,393) | 142,193 | 92,723 | 472,685 | 25,679,925 |
Changes of items during period | |||||||
Dividends of surplus | (718,397) | ||||||
Profit (loss) attributable to owners of parent | (1,280,492) | ||||||
Purchase of treasury shares | (79,943) | ||||||
Disposal of treasury shares | 3,049 | ||||||
Change in ownership interest of parent due to transactions with non-controlling interests | 73,982 | ||||||
Net changes of items other than shareholders' equity | (157,180) | (20,853) | 448 | (177,586) | (6,449) | (130,176) | (314,211) |
Total changes of items during period | (157,180) | (20,853) | 448 | (177,586) | (6,449) | (130,176) | (2,316,012) |
Balance at end of current period | 10,693 | (44,141) | (1,945) | (35,393) | 86,274 | 342,508 | 23,363,913 |
FY2020 (January 1, 2020-December 31, 2020)
(Unit: thousand yen)
Shareholders' equity | |||||
Capital stock | Capital surplus | Retained earnings | Treasury shares | Total shareholders' equity | |
Balance at beginning of current period | 5,000,000 | 12,172,896 | 7,056,711 | (1,259,085) | 22,970,523 |
Changes of items during period | |||||
Dividends of surplus | (286,509) | (286,509) | |||
Profit (loss) attributable to owners of parent | (2,552,992) | (2,552,992) | |||
Purchase of treasury shares | (728) | (728) | |||
Disposal of treasury shares | (3,394) | 26,204 | 22,809 | ||
Change in ownership interest of parent due to transactions with non-controlling interests | (58,303) | (58,303) | |||
Net changes of items other than shareholders' equity | |||||
Total changes of items during period | - | (61,698) | (2,839,501) | 25,475 | (2,875,724) |
Balance at end of current period | 5,000,000 | 12,111,198 | 4,217,210 | (1,233,609) | 20,094,798 |
Accumulated other comprehensive income | Share acquisition rights | Non-controllin g interests | Total net assets | ||||
Valuation difference on available-for-sale securities | Foreign currency translation adjustment | Remeasure-ments of defined benefit plans | Total accumulated other comprehensive income | ||||
Balance at beginning of current period | 10,693 | (44,141) | (1,945) | (35,393) | 86,274 | 342,508 | 23,363,913 |
Changes of items during period | |||||||
Dividends of surplus | (286,509) | ||||||
Profit (loss) attributable to owners of parent | (2,552,992) | ||||||
Purchase of treasury shares | (728) | ||||||
Disposal of treasury shares | 22,809 | ||||||
Change in ownership interest of parent due to transactions with non-controlling interests | (58,303) | ||||||
Net changes of items other than shareholders' equity | (119,809) | (15,455) | 1,713 | (133,552) | (43,419) | (79,801) | (256,773) |
Total changes of items during period | (119,809) | (15,455) | 1,713 | (133,552) | (43,419) | (79,801) | (3,132,497) |
Balance at end of current period | (109,116) | (59,597) | (231) | (168,945) | 42,855 | 262,707 | 20,231,415 |
(4) Consolidated statements of cash flows
(Unit: thousand yen)FY 2019 (January 1, 2019-December 31, 2019)FY 2020 (January 1, 2020-December 31, 2020)
Cash flows from operating activities |
Loss before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits for directors (and other officers)
Increase (decrease) in provision for share-based remuneration for directors (and other officers)
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity method
Commission expenses
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries and associates
Loss on liquidation of subsidiaries and associates
Business restructuring expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in other assets
Increase (decrease) in other liabilities
(666,865)
(2,457,856)
1,167,950 826,004
1,207,313 300,209
320,115 323,332
52,044
(10,052)
(34,332)
145,788
8,113 (2,448)
(5,160)
75,801
(29,120)
(18,747)
76,310
83,327
159,466 440,406
170,381 164,824
(257,698)
(3,321)
1,157,265
86,439
34,635
(34,201)
279,462
-
-
946,707
(485,653)
4,484,610
(295,780)
187,113
666,645
(1,532,639)
86,332
94,037
173,678 (194,023)
(224,755) (167,536)
(599,979) (239,417)
96,053 (4,793)
Other, net
(4,691) (310,816)
Subtotal 3,109,426 | 3,175,686 |
Interest and dividends received
36,344 18,747
Proceeds from insurance income
6,532 7,511
Interest paid
(80,967)
(81,723)
Income taxes paid (1,873,019) | (227,364) |
Net cash provided by (used in) operating activities
1,198,316
2,892,857
FY 2019 (January 1, 2019-December 31, 2019)FY 2020 (January 1, 2020-December 31, 2020)
Cash flows from investing activities |
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments into time deposits
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Proceeds from maturity of insurance funds
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 in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
(813,431)
(447,805)
12,617
83,022
(84,578) (76,992)
(399,333) (23,630)
503,208
12,546
(189,869) (87,115)
(54,128) (283,303)
138,806 144,761
81,778 96,648
(266,382)
(188,141)
-
(235,971)
- - 1,096
Other, net (119,865) | (26,447) |
Net cash provided by (used in) investing activities
(1,561,137)
(843,190)
Cash flows from financing activities |
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
Commission fee paid
(2,318,500)
(3,200,000)
5,850,000
7,200,000
(2,786,830)
(3,793,841)
(80,086)
(728)
(705,122) (280,416)
(170,381) (164,824)
Other, net (125,633) | (40,445) |
(336,555) (397,366)
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents (14,803) | (9,503) |
Net increase (decrease) in cash and cash equivalents
(714,181)
1,642,797
Cash and cash equivalents at beginning of period 9,790,600 | 9,060,407 |
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation
(16,011)
-
Cash and cash equivalents at end of period | 9,060,407 | 10,703,205 |
(5) Notes on the consolidated financial statements
(Notes regarding assumption of going concern) Not applicable
(Segment information)
As the AOI TYO Group consists of a single Advertising Business segment, we have omitted separate disclosure herein.
(Per-share indicators)
FY 2019 (January 1, 2019-December 31, 2019) | FY 2020 (January 1, 2020-December 31, 2020) | ||
Net assets per share Net income per share Diluted net income per share | 977.76yen (54.50)yen - | Net assets per share Net income (loss) per share Diluted net income per share | 848.70yen (108.81)yen - |
(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 2019 (January 1,2019- December 31, 2019) | FY 2020 (January 1,2020- December 31, 2020) | |
Net income per share | ||
Profit (loss) attributable to owners of parent (thousand yen) | (1,280,492) | (2,552,992) |
Amount not attributable to common shareholders (thousand yen) | - | - |
Net income (loss) attributable to owners of parent pertaining to common shares (thousand yen) | (1,280,492) | (2,552,992) |
Average number of common shares issued (thousand shares) | 23,495 | 23,462 |
*To calculate net income per share, those AOI TYO Holdings shares remaining in trust that are posted as treasury shares are included 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 418,900 shares and 413,569 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 and 411,200 shares of treasury stock noted above were deducted for the purpose of calculating net assets per share for the prior consolidated fiscal year and current consolidated fiscal year, respectively.
(Significant subsequent events)
(Transactions involving entities under common control, etc.)
Pursuant to a resolution passed at a board of directors meeting held October 19, 2020, the company split off certain operations (incorporation-type company split) of consolidated subsidiary TYO Inc. ("Former TYO"), transferring the operations in question to the newly established TYO Inc. on January 4, 2021. The company also conducted an absorption-type merger between consolidated subsidiaries and name change, with Former TYO becoming the surviving company. The company also conducted an absorption-type merger between consolidated subsidiaries and name change, with consolidated subsidiary Digital Garden, Inc. becoming the surviving company.
1. Overview and purpose of transaction
In line our medium-term plan covering the five-year period from fiscal 2021 through fiscal 2025, the AOI TYO Group has engaged in a major organizational restructuring. We have shifted from our legacy business structure focusing on the Advertising Video Production Business to a dual-business structure with clear initiatives assigned to each. This structure will consist of the Content Production Business, which will handle traditional advertisingvideo production focused primarily on orders from advertising companies, and the Communication Design Business, which will handle the design and execution of communications, focusing on directly transacting with advertisers. In addition, we will consolidate post-production subsidiaries within the Content Production Business into one company, with Digital Garden serving as the surviving company. We will consolidate subsidiaries within the Communications Design Business that conduct solutions, PR, and events into one company, with Former TYO serving as the surviving company. In this way, we intend to deepen and strengthen group management while reducing costs.
2. Reorganization summary (1) Incorporation-type split
① Name of company to be split and business lines/scope businesses involved in the split
Name Business lines Net salesFormer TYO
Advertising video production services for advertising companies, etc.
¥13,560 million (FYE December 2020)
② Date of company split January 4, 2021
③ Legal form of company split
Incorporation-type split with Former TYO as the split company and TYO, Inc. serving as the successor company
④ Details of allocations related to the incorporation-type split
At the time of the incorporation-type split, the newly established company issued 1,000 shares of common stock, all of which were allocated to Former TYO. At the same time, Former TYO delivered all allocated shares to 100% parent company AOI TYO Holdings as dividends from surplus.
(2) Absorption-type merger with the Former TYO as the surviving company
① Name and description of business of the combined companies; assets and liabilities to be taken over
Name
Former TYO
Quark tokyo
Inc.
ZEO Corporation
TYO Digital Works, Inc.
TYO Public Relations, Inc.
Business lines
Creative planning and production of all advertising content
Marketing solutions, content planning and production
Marketing communi-cations
Web advertising production
General services related to public relations and PR activities
Assets to be taken over
-
¥978million
¥1,245 million
¥303 million
¥97 million
Liabilities to be taken over
-
¥182 million
¥1,147 million
¥114 million
¥166 million
② Date of business combination
January 4, 2021
③ Legal form of business combination
An absorption-type merger, with Former TYO as the surviving company and consolidated subsidiaries Quark tokyo Inc., ZEO Corporation, TYO Digital Works, Inc., TYO Public Relations, Inc. becoming the absorbed companies. Quark tokyo Inc., ZEO Corporation, TYO Digital Works, Inc., TYO Public Relations, Inc. have been dissolved.
④ Name of the company after the merger
Former TYO changed its corporate name to xpd, Inc. on January 4, 2021.
(3) Absorption-type merger with Digital Garden, Inc. as the surviving company
① Name and description of business of the combined companies; assets and liabilities to be taken over
Name
Digital Garden, Inc.
Media Garden, Inc.
TTR, Inc.
Business lines
Planning and production of digital editing and CG
Filming studio and equipment rental
Video post-production business
Assets to be taken over
-
¥926 million
¥2,005 million
Liabilities to be taken over
-
¥330 million
¥655 million
② Date of business combination
January 4, 2021
③ Legal form of business combination
An absorption-type merger with Digital Garden, Inc. as the surviving company and consolidated subsidiaries
Media Garden, Inc. and TTR Inc. becoming the absorbed companies. Media Garden, Inc. and TTR, Inc. have been dissolved.
④ Name of the company after the merger
Digital Garden, Inc. changed its corporate name to TREE Digital Studio, Inc. on January 4, 2021.
3. Overview of accounting treatment
These transactions will be treated as transactions under common control in accordance with Accounting Standard for Business Combinations (ASBJ Statement No. 21, January 16, 2019) and Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ Guidance No. 10, January 16, 2019).
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AOI TYO Holdings Inc. published this content on 04 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2021 05:02:04 UTC.