May 23, 2019

Non-Consolidated Financial Results (Excerpt) for the Second Quarterof Fiscal 2019 [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, 2019
Date to start distributing dividends:
Jun 3, 2019
Supplementary documents for this summary of financial statements:
YesResults briefing for financial results:Yes (for analysts and institutional investors)
The original disclosure in Japanese was released on April 26, 2019 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Second Quarter of Fiscal 2019 (October 1, 2018 to March 31, 2019)(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 2019

1,536

19.4

762

28.7762

28.9526

29.9

First six monthsof Fiscal 2018

1,286

9.5

592

8.4

592

8.4

405

7.6

Fully diluted net income
per share

Net income per share
Yen

Yen

First six monthsof Fiscal 2019

88.47

88.16

First six monthsof Fiscal 2018

68.20

67.84

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions ofYen

Equity ratio

Millions ofMar 31, 2019
5,423
Sep 30, 2018
4,928
(Reference) Equity capital: March 31, 2019: ¥4,616 million

Yen%

4,618
4,280
September 30, 2018: ¥4.277 million

85.1
86.8

2. DividendsFiscal 2018
Fiscal 2019
Fiscal 2019 (forecast)

Dividend per share
Q3 EndYear-End

Q1 EndQ2 EndYenYenYenYenAnnualYen㸫
㸫

32.00
34.00

㸫35.0067.00

㸫34.0068.00(Note) Revisions to recent dividends forecast: None
3. Non-Consolidated Forecast for the Year Ending September 30, 2019 (October 1, 2018 to September 30, 2019)
Net sales
Millions of

Fiscal 2019

Operating income

Yen%

2,825

4.5

Millions of

Ordinary income

Yen%

1,166

0.5

Millions of

Net income
per share

Net income

Yen%

1,1640.4

Millions ofYen%

Yen7980.4

134.03(Note) Revisions to recent business forecast: None
Net income per share has been adjusted based on the average number of shares outstanding (5,957,208 shares) for the year ending September 30, 2019,
which was calculated taking into account the number of shares issued during the second quarter of the year ending September 30, 2019 through theexercise of share subscription rights as a stock option, and the number 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 Mar 31, 2019

6,110,958

As of Sep 30, 2018

6,100,358(ii) Number of treasury shares

As of Mar 31, 2019

150,936

As of Sep 30, 2018

150,844(iii) Average Number of shares outstanding

First six monthsof Fiscal 2019

5,954,379

First six monthsof Fiscal 2018

5,946,855* 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.

2Qualitative information regarding the quarterly settlement of accounts(1) Explanation of operating results
During the first six months of the year ending September 30, 2019 (October 1, 2018, through March 31, 2019),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥249 million, or 19.4%, year over year to ¥1,536 million.
By business segment, “Product sales” increased 28.9% to ¥876 million, “Consultancy sales” increased 10.9% to¥618 million and “Training sales” decreased 15.5% to ¥40 million.
“Product sales” increased ¥196 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. Moreover, “Consultancy sales”
increased ¥60 million compared with the same period of the previous fiscal year. This was primarily due to thefavorable sales of customized versions of the “Web Test” and the favorable orders received for analysis projects.
“Training sales” decreased ¥7 million compared with the same period of the previous fiscal year, primarily due tothe decrease in orders received for open courses.
The increase in net sales was primarily due to both students and corporates beginning job seeking as well as
recruiting and screening activities more actively than in the previous year amid media reports that the ratio of job
openings for new graduates remained high and that there was a year-over-year increase in the rate of early
unofficial job offers given by companies. In addition, the rate of early unofficial job offers given by companies was
also higher than a year before. Under these circumstances, the Company believes that it was able to achieve
increase in net sales by receiving orders for new projects as a result of marketing activities in line with customer
needs.
Operating income for the six-month period under review increased 28.7% year over year to ¥762 million.
Although the cost of goods sold increased ¥38 million, or 24.6%, year over year to ¥193 million, and selling,
general and administrative expenses increased ¥41 million, or 7.7%, year over year, to ¥580 million, operating
income increased ¥169 million year over year thanks to the increase in net sales. The increase in the cost of goods
sold was mainly attributable to an increase in subcontracting costs for provision of hall tests resulting from anincrease of orders. The primary factor for the increase in selling, general and administrative expenses was anincrease in royalty.
Ordinary income for the six-month period under review increased ¥170 million, or 28.9%, year over year to ¥762
million. This figure was almost equal to operating income 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 six-month period under review was equal to ordinary income, because noextraordinary gains or extraordinary losses were recorded, and increased ¥171 million, or 28.9%, year over year to¥762 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 ¥121 million, or 29.9%, year over year to ¥526 million.
<Reference 1: Sales by business segment>
Product
Consultancy
Training
Total

First six months of Fiscal 2018
Millions of Yen
Component ratio
680
52.9
557
43.4
48
3.7
1,286
100.0

3

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

Rate of increase(decrease)
28.9
10.9‫ڹ‬15.5
19.4

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

Third Quarter

Year-End

Millions ofMillions ofMillions ofYen

Yen

Yen nAnnual
Yen

Millions ofYen

Fiscal 2017
278
896
1,030
369
2,575
Fiscal 2018
299
987
986
431
2,704
Fiscal 2019
345
1,190
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 thirdquarters of the fiscal year.

(2) Explanation about future prospects such as business forecasts
In the year under review, the Company believes that the screening market environment for new graduates
expected to graduate in 2020 will continue to grow steadily, because the industry's self-imposed controls on
employment PR activity and screening process for new graduates*, which are currently in force, are in their finalyear of implementation, and corporations remain highly motivated to hire more employees against a backdrop of achronic labor shortage.
However, taking fully into account that employment activities by companies seeking to hire new graduates inthis year might end earlier than in the previous year, we intend to continue enhancing our operating performance by
speedily providing optimum services based on our precise analysis and understanding of corporate customers’
needs.
In light of the above, and based on our analysis and study of the business results, financial position and otherbusiness management materials for the six-month period under review, no changes have been made to the business
forecast for the year ending September 30, 2019, which was released on October 30, 2018.
* The industry has self-imposed controls regarding the employment of new graduates, under which industry
groups agreed not to start employment PR activity and the screening process for new graduates prior to a fixed
date in light of the academic schedules for students. The Keidanren (Japan Business Federation) stipulated inits “Guidelines for Recruiting and Employing New Graduates” that corporations’ PR activity for new
graduates who will enter corporations in fiscal 2017 onwards shall commence on and after March 1 of the year
just preceding the year of graduation or post-graduate completion, and screening activity on and after June 1of the year of graduation or completion.

4