Aug 20, 2021

Non-Consolidated Financial Results (Excerpt) for the Third Quarterof Fiscal 2021

[J-GAAP basis]

Listed Company Name:SHL-JAPAN Ltd.
Registered on Tokyo Stock Exchange
Securities Code:4327
URL:http://www.shl.co.jp/
Representative:
Manabu Nara, Managing Director
Contact:
Naohiro Nakamura, Director            Tel: +81-3-5385-8781
Date to submit the Quarterly Securities Report:
Aug 6, 2021
Date to start distributing dividends:
㸫Supplementary documents for this summary of financial statements:
NoneResults briefing for financial results:None
The original disclosure in Japanese was released on July 30, 2021 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Third Quarter of Fiscal 2021 (October 1, 2020 to June 30, 2021)(1) Non-consolidated Business Results(The percentages indicate the rate of increase or decrease compared with the same period of the previous fiscal year.)Net sales

Operating income

Millions of Yen%

Millions of Yen

Ordinary income%Millions of Yen

Net income%Millions of Yen%First nine monthsof Fiscal 2021

2,818

13.4

1,435

12.1

1,434

12.1

989

13.3First nine monthsof Fiscal 2020

2,485

0.4

1,280

6.5

1,279

6.4

873

5.1

Fully diluted net income
per share

Net income per share
YenYenFirst nine monthsof Fiscal 2021

165.19㸫First nine monthsof Fiscal 2020

145.77

㸫(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of Yen

Equity ratio

Millions of Yen

Jun 30, 2021
6,604
Sep 30, 2020
6,143
(Reference) Equity capital: June 30, 2021: ¥5,683 million

%

5,683
5,288
September 30, 2020: ¥5,288 million

86.1
86.1

2. Dividends
Q1 EndFiscal 2020
Fiscal 2021
Fiscal 2021 (forecast)

Q2 EndDividend per share
Q3 EndYear-End

AnnualYen

Yen

Yen

YenYen㸫
㸫

36.00
38.00

㸫㸫

60.00

96.00

38.00

76.00

(Note) Revisions to recent dividends forecast: None
The year-end dividend for the fiscal year ending September 2020 includes a special dividend of ¥20.00.

3. Non-Consolidated Forecast for the Year Ending September 30, 2021 (October 1, 2020 to September 30, 2021)
Net sales
Millions of Yen

Fiscal 2021

3,280

Operating income%

10.6

Ordinary income

Net incomeper share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

1,454

4.5

1,453

4.4997

3.9

166.58(Note) Revisions to recent business forecast: Yes
Net income per share has been adjusted based on the average number of shares outstanding (5,990,141 shares) for the year ending September 30, 2021,
which was calculated taking into account the number of shares issued during the third quarter of the year ending September 30, 2021 through thenumber of treasury shares held.

1*Note(1) Application of particular accounts procedures to the preparation of quarterly non-consolidated financial statements: Yes(2) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies caused by revision of accounting standards:
None(ii) Changes in accounting policies other than(ხ):None(iii) Changes in accounting estimates:None(iv) Restatement:
None(3) Number of shares outstanding (common stock)(i) Number of shares outstanding(including treasury shares)

As of Jun 30, 2021

6,141,158

As of Sep 30, 2020

6,141,158(ii) Number of treasury shares

As of Jun 30, 2021

151,029

As of Sep 30, 2020151,006(iii) Average Number of shares outstanding

First nine monthsof Fiscal 2021

5,990,145

First nine monthsof Fiscal 2020

5,990,183* Implementation status of quarterly review proceduresThis financial results summary is not subject to quarterly review procedures.

* Explanations and other special notes concerning the appropriate use of financial results forecasts
1.
2.

The forward-looking statements regarding financial results forecasts, etc., appearing in this financial results summary have been prepared basedon information currently available to the Company and certain assumptions that the Company believes to be reasonable. The Company makes
no guarantee as to their realization. Actual financial results may differ substantially from the forecasts due to various factors.
As the Company’s services are often used for the screening of new graduates to be employed by corporate customers, our sales inevitably
involve seasonal fluctuations. Accordingly, the Company’s performance management is conducted on an annual basis.

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Qualitative information regarding the quarterly settlement of accounts(1) Explanation of operating results
During the first nine months of the year ending September 30, 2021 (October 1, 2020, through June 30, 2021),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥333 million, or 13.4%, year over year to ¥2,818 million.
By business segment, “Product sales” increased 18.6% to ¥1,917 million, “Consultancy sales” increased 2.6% to¥821 million, and “Training sales” increased 17.5% to ¥79 million.
“Product sales” increased ¥300 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of “WebGAB,” Web test of general abilities, “C-GAB plus (halltest/online monitored Web test),” and “WebCAB,” Web test of computer aptitude. “Consultancy sales” increased¥20 million compared with the same period of the previous fiscal year. This was primarily due to favorable sales ofcustomized versions of Web tests, despite unfavorable sales of customized versions of multiple choice tests andanalysis assessment projects. “Training sales” increased ¥11 million compared with the same period of the previous
fiscal year, primarily owing to a rise in orders received for in-house seminars.
In the nine-month period under review, amid continued concerns over the spread of the novel coronavirus, theearlier-than-usual recruitment and screening activities of companies seeking to hire new graduates who are set tograduate next spring have settled down after previously increasing, and companies are beginning to shift theirscreening activities to internship programs, which are becoming firmly established. Under these circumstances, theCompany believes that it was able to achieve an increase in net sales by gaining support from its customers forservices with low risks of the “Three Cs” (Closed spaces, Crowded places, and Close-contact settings) or services
that can avoid those risks, mainly online assessment tools.
Operating income for the nine-month period under review increased 12.1% year over year to ¥1,435 million.
Although the cost of goods sold increased ¥77 million, or 28.9%, year over year to ¥347 million and selling,general and administrative expenses increased ¥100 million, or 10.7%, year over year to ¥1,036 million, operating
income increased ¥155 million year over year thanks to the increase in net sales. With regard to the cost of goods
sold, the increase was mainly attributable to increases in expenses for use of test center halls (subcontracting costs)
and labor costs due to an increase in orders for “C-GAB plus,” despite a decrease in cost of question booklets for
multiple choice tests and other goods. The primary factors for the increase in selling, general and administrative
expenses were increases in royalties, labor expenses mainly due to the increased number of staff in the sales
department, and stock agency fees.
Ordinary income for the nine-month period under review increased ¥154 million, or 12.1%, year over year to¥1,434 million because both non-operating income and non-operating expenses were small as in the same period of
the previous fiscal year.
Income before income taxes for the nine-month period under review was equal to ordinary income, because noextraordinary gains or extraordinary losses were recorded as in the same period of the previous fiscal year, andincreased ¥154 million, or 12.1%, year over year to ¥1,434 million.
After taking into account the above factors and income taxes—current and income taxes—deferred, net income
for the nine-month period under review increased ¥116 million, or 13.3%, year over year to ¥989 million.

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<Reference 1: Sales by business segment>
ProductConsultancy
Training
Total

First nine months of Fiscal 2020
Millions of Yen
Component ratio
1,616
65.1
800
32.2
67
2.7
2,485
100.0

<Reference 2: Sales by quarterly basis>
First Quarter
Millions of Yen

Second Quarter

First nine months of Fiscal 2021
Millions of Yen
Component ratio
1,917
68.0
821
29.2
79
2.8
2,818
100.0

Rate of increase(decrease)
18.6
2.6
17.513.4

Third Quarter

Year-End

AnnualMillions of Yen nMillions of Yen

Millions of Yen

Millions of Yen

Fiscal 2019
345
1,190
938
439
2,914
Fiscal 2020
405
1,233
845
479
2,964
Fiscal 2021
472
1,375969
㸫㸫*Note: As the Company’s services are often used for the screening of new graduates to be employed by corporate customers, oursales inevitably involve seasonal fluctuations. In recent years, sales have tended to concentrate in the second and thirdquarters of the fiscal year.

(2) Explanation about future prospects such as business forecastsDuring the year under review, vaccinations against the novel coronavirus have begun, producing a certain effect,
but with the Tokyo 2020 Olympics and Paralympic Games being held, the spread of the infection remains
unresolved. In this environment, there is a strong appetite for hiring by companies and other organizations that havethe objective of alleviating chronic labor shortages and for which reinforcing human resources for digitaltransformation (DX) is essential. The Company believes that the recruitment and screening activities of mainly
these companies for ready-to-go career roles and student screening activities related to internship programs, which
are becoming firmly established in the corporate world, will be carried out while actively utilizing means to avoid
the risk of the Three C’s. The Company’s policy is to continue to improve performance by accurately analyzing andgrasping the needs of companies, and promptly providing our most appropriate assessment services.
Both sales and profits increased in the nine-month period under review compared to the same period of theprevious fiscal year, and operating income, ordinary income, and net income exceeded the full-year earnings
forecast figures for the fiscal year ending September 30, 2021. On the other hand, for the fourth quarter of the fiscal
year under review (July 1, 2021 to September 30, 2021), based on the current status of orders and expected costs
and expenses, we are forecasting a decrease in both sales and profit compared to the same period of the previous
fiscal year. Taking into account the results for the nine-month period under review and the forecast for the fourth
quarter of the fiscal year under review, the Company has revised its full-year financial results forecast for the fiscal
year ending September 30, 2021.

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