May 15, 2020

Non-Consolidated Financial Results (Excerpt) for the Second Quarterof Fiscal 2020

[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, Executive Director        Tel: +81-3-5385-8781
Date to submit the Quarterly Securities Report:
May 15, 2020
Date to start distributing dividends:
Jun 1, 2020
Supplementary documents for this summary of financial statements:
YesResults briefing for financial results:
NoThe original disclosure in Japanese was released on April 28, 2020 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Second Quarter of Fiscal 2020 (October 1, 2019 to March 31, 2020)(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 six monthsof Fiscal 2020

1,639

6.785912.8859

12.7586

11.3

First six monthsof Fiscal 2019

1,536

19.4762

28.7762

28.9526

29.9

Fully diluted net income
per share

Net income per shareFirst six monthsof Fiscal 2020
First six monthsof Fiscal 2019

YenYen

97.91

㸫

88.47

88.16

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of Yen

Equity ratio

Millions of Yen

Mar 31, 2020
6,031
Sep 30, 2019
5,539
(Reference) Equity capital: March 31, 2020: ¥5,129 million

%

5,129
4,761
September 30, 2019: ¥4.761 million

85.0
85.9

2. Dividends
Q1 EndFiscal 2019
Fiscal 2020
Fiscal 2020 (forecast)Q2 EndDividend per share
Q3 EndYear-End

AnnualYenYenYenYenYen㸫
㸫

34.00
36.00

㸫37.0071.00

㸫36.0072.00(Note) Revisions to recent dividends forecast: None
3. Non-Consolidated Forecast for the Year Ending September 30, 2020 (October 1, 2019 to September 30, 2020)
Net sales

Fiscal 2019

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

3,022

3.7

1,269

3.2

1,267

3.0861

2.5

143.89(Note) Revisions to recent business forecast: None
The Company projects that the declaration of a state of emergency in response to the growing spread of the new coronavirus will have an impact on its
financial results for the year ending September 30, 2020. However, at the present time it is difficult to calculate the amount of such impact, andtherefore the results forecast announced on October 30, 2019 will remain unchanged.

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*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 Mar 31, 2020

6,141,158

As of Sep 30, 2019

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

As of Mar 31, 2020

150,972

As of Sep 30, 2019

150,972(iii) Average Number of shares outstanding

First six monthsof Fiscal 2020

5,990,186

First six monthsof Fiscal 2019

5,954,379* 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 six months of the year ending September 30, 2020 (October 1, 2019, through March 31, 2020),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥103 million, or 6.7%, year over year to ¥1,639 million.
By business segment, “Product sales” increased 13.4% to ¥994 million, “Consultancy sales” declined 3.0% to ¥600
million, and “Training sales” increased 10.6% to ¥44 million.
“Product sales” increased ¥117 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of “GAB,” Web test of general abilities. However, “Consultancy sales”
decreased ¥18 million compared with the same period of the previous fiscal year. This was primarily due tosluggish orders for analysis projects. “Training sales” increased ¥4 million compared with the same period of theprevious fiscal year, primarily owing to a rise in orders received for in-house seminars.
As background to the increase in net sales, as evidenced by media reports which stated that as of April 1 there
was a record rate of early unofficial job offers made to new graduates who are set to graduate next spring, corporate
screening activities initially began earlier compared with last year due to the substantial termination of self-imposed
controls pertaining to employment PR activities and screening activities as well as the Tokyo 2020 Olympics andParalympics Games, which were scheduled to be held this summer. The declaration of a state of emergency inresponse to the spread of the novel coronavirus, however, led to conditions where companies were unavoidably
forced to postpone their screening plans. While net sales did rise, the rate of increase was limited because of suchcomplex factors.
Operating income for the six-month period under review increased 12.8% year over year to ¥859 million.
Although selling, general and administrative expenses increased ¥31 million, or 5.4%, year over year to ¥612
million, operating income increased ¥97 million year over year thanks to the year-over-year decrease in the cost ofgoods sold by ¥25 million, or 13.4%, to ¥167 million as well as the increase in net sales. The primary factor for theincrease in selling, general and administrative expenses was an increase in royalties. The decrease in cost of goods
sold was mainly attributable to a decrease in manufacturing expenses and product master amortization.
Ordinary income for the six-month period under review increased ¥96 million, or 12.7%, year over year to ¥859
million because both non-operating income and non-operating expenses were small as in the same period of theprevious fiscal year.
Income before income taxes for the six-month period under review was equal to ordinary income, because noextraordinary gains or extraordinary losses were recorded, and increased ¥96 million, or 12.7%, year over year to¥859 million.
After taking into account the above factors and income taxes—current and income taxes—deferred, net income
for the six-month period under review increased ¥59 million, or 11.3%, year over year to ¥586 million.
<Reference 1: Sales by business segment>
ProductConsultancy
Training
Total

First six months of Fiscal 2019
Millions of Yen
Component ratio
876
57.1
618
40.3
40
2.6
1,536
100.0

3

First six months of Fiscal 2020
Millions of Yen
Component ratio
994
60.7
600
36.6
44
2.7
1,639
100.0

Rate of increase(decrease)
13.4‫ڹ‬3.010.6
6.7

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

Second Quarter

Third Quarter

Year-End

AnnualMillions of Yen nMillions of Yen

Millions of Yen

Millions of Yen

Fiscal 2018
299
987
986
431
2,704
Fiscal 2019
345
1,190
938
439
2,914
Fiscal 2020
405
1,233
㸫㸫㸫
*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. Moreover, the rate of fluctuation may at times increase due to changes in therecruiting and screening periods and other reasons. In recent years, sales have tended to concentrate in the second and third
quarters of the fiscal year.

(2) Explanation about future prospects such as business forecasts
In the year ending September 30, 2020, screening plans of a number of companies seeking to hire new graduates
who are set to graduate next spring are being postponed due to the impact of the declaration of a state of emergency
in response to the growing spread of the new coronavirus. While the Company believes that corporate screening
activities and students’ job seeking activities will be resumed with the normalization of the situation, the impact
may be prolonged, and future prospects for corporate screening activities are unclear.
In light of the above, the Company projects that the declaration of a state of emergency in response to the spreadof the new coronavirus will have an impact on its financial results for the year ending September 30, 2020.
However, at the present time it is difficult to calculate the amount of such impact, and therefore the results forecast
announced on October 30, 2019 will remain unchanged.

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