Nov 19, 2020

Non-consolidated Financial and Operating Results (Excerpt)
for the Year Ended September 30, 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 the ordinary general meeting of shareholders:Dec 19, 2020
Date to start distributing dividends:
Dec 21, 2020
Date to submit the Securities Report
Dec 22, 2020
Supplementary documents for this summary of financial statements
Yes
Results briefing for financial results:
Yes (for analysts and institutional investors)
The original disclosure in Japanese was released on October 30, 2020 at 15:15 (GMT+9)
1. Non-consolidated Financial Results for the Year Ended September 30, 2020 (October 1, 2019 to September 30, 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

Fiscal 2020
Fiscal 2019%

2,964
2,914

Millions of Yen1.7
7.8

1,391
1,229

Net income per share

Fully diluted
net income per share

Yen

Yen

Ordinary income%Millions of Yen

13.2
5.9

1,392
1,230

Return on
shareholders’ equity

Fiscal 2020
160.38
̿Fiscal 2019
140.86140.60(Note) Comprehensive income: Fiscal 2020: ʊ million Fiscal 2019 ʊ million

Net income%Millions of Yen

13.2
6.0

960840Ordinary income tototal assets

%

14.2
5.8

Operating income to
net sales

%%%

19.1
18.6

23.8
23.5

46.9
42.2

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of YenEquity ratio

Millions of Yen

Sep 30, 2020
6,143
Sep 30, 2019
5,539
(Reference) Equity capital: September 30, 2020: ¥5,288 million

Net assets per share%

Yen

5,288
86.1
4,76185.9
September 30, 2019: ¥4,761million

882.79794.85(3) Non-Consolidated Consolidated Cash FlowsNet cash provided by(used in) operating activities

Net cash provided by(used in) investing activities

Millions of Yen

Millions of Yen%

Yen

1,042
1,020

ᶭ537
ᶭ25

ᶭ437
ᶭ380

3,798
3,731

Fiscal 2020
Fiscal 2019

Net cash provided by(used in) financing activities

Cash and cash equivalents atend of period

2. Dividends
Q1EndFiscal 2019
Fiscal 2020
Fiscal 2021 (forecast)

Q2
EndDividend per share
Q3Year-EndEnd

AnnualTotal dividends
paid (annual)

Payout ratio(consolidated)

Dividends to netassets

Yen

Yen

Yen

Yen

Yen

Millions of Yen%%

ʊʊ
ʊ

34.00
36.00
38.00

ʊ
ʊ
ʊ

37.00
60.00
38.00

71.00
96.00
76.00

424
575

50.4
59.9
47.3

9.4
11.4

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

Fiscal 2021

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

3,100

4.6

1,394

0.2

1,393

0.1

961

0.1

160.52

Net income per share has been calculated based on the number of shares (6,141,158 shares) after subtracting the number of treasury shares (151,006shares) from the total number of shares outstanding (5,990,152 shares), reflecting the stock split.

*Note(1) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies caused by revision of accounting standards:(ii) Changes in accounting policies other than(ხ) :(iii) Changes in accounting estimates:(iv) Restatement:(2) Number of shares outstanding (common stock)(i) Number of shares outstanding
As of September 30, 2020
(including treasury shares)(ii) Number of treasury shares

As of September 30, 2020(iii) Average Number of shares outstanding

Fiscal 2020

None
None
None
None

6,141,158

As of September 30, 2019

6,141,158

151,006

As of September 30, 2019

150,972

5,990,175

Fiscal 2019

5,970,237* Implementation status of quarterly review proceduresThis financial results summary is not subject to annual 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 based on information currently available to the Company and certain assumptions that the Company believes to bereasonable. The Company makes no guarantee as to their realization. Actual financial results may differ substantially from theforecasts 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
without presenting performance forecasts for the first half.

Overview of operating results, etc.
(1) Overview of operating results
For the year ended September 30, 2020 (October 1, 2019, through September 30, 2020), net sales ofSHL-JAPAN Ltd. (the “Company”) increased ¥50 million, or 1.7%, year over year to ¥2,964 million. By businesssegment, “Product sales” increased 5.2% to ¥1,925 million, “Consultancy sales” declined 3.3% to ¥962 million,and “Training sales” declined 14.3% to ¥76 million.
“Product sales” increased ¥95 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of online assessment tools including “WebGAB,” Web test of generalabilities, and “WebCAB,” Web test of computer aptitude, despite sluggish orders for hall tests and multiple choicetests. However, “Consultancy sales” decreased ¥32 million compared with the same period of the previous fiscalyear. Although sales of TAMATEBAKO Web test and customized versions of Web tests were favorable, they wereinsufficient to compensate for the decrease in orders for analysis assessment projects and analysis projects.
“Training sales” decreased ¥12 million compared with the same period of the previous fiscal year, due to thedecrease in orders received for in-house seminars and open training courses.
During the year under review, screening activities by companies, seeking to hire new graduates who are set tograduate next spring, initially began earlier compared with last year due to the substantial termination ofself-imposed controls pertaining to employment PR activities and screening activities as well as the Tokyo 2020
Olympics and Paralympics Games, which were scheduled to be held this summer. The declaration of a state of
emergency in response to the spread of the novel coronavirus, however, led to conditions where companies wereunavoidably forced to suspend their screening activities for new graduates. For the same reason, we had no choice
but to cancel or postpone providing our services including employee assessment services. Since the state ofemergency was lifted, corporate screening activities have gradually resumed, but customers avoided using services
with a high risk of creating a “Three Cs” (Closed spaces, Crowded places, and Close-contact settings) environment,such as hall tests, multiple choice tests, analysis assessment services, and seminars. Under these circumstances, theCompany believes that it was able to achieve an increase, although only slightly, in net sales, by successfully
shifting customers’ needs to the online assessment services with a low risk of “Three Cs,” including online tests.
Operating income for the year under review increased 13.2% year over year to ¥1,391 million. Operating income
increased ¥162 million year over year thanks to the year-over-year decreases in the cost of goods sold by ¥97
million, or 21.9%, to ¥346 million and in selling, general and administrative expenses by ¥14 million, or 1.2%, year
over year, to ¥1,226 million, as well as the increase in net sales. The decrease in cost of goods sold was mainly
attributable to a decrease in costs for hall tests resulting from the adoption of online tests by corporate customers
who avoided hall tests with a high risk of “Three Cs” as a countermeasure against the novel coronavirus. The
primary factor for the decrease in selling, general and administrative expenses was a decrease in labor expenses
following the payment of interim bonuses in the previous fiscal year, although royalties increased.
Ordinary income for the year under review increased 13.2%, year over year to ¥1,392 million. Ordinary income
increased ¥162 million due to the increase in operating income as non-operating income and non-operating
expenses remaining essentially unchanged from the previous fiscal year.

Income before income taxes for the year under review was equal to ordinary income, because no extraordinary
gains or extraordinary losses were recorded, and increased ¥161 million, or 13.2%, year over year to ¥1,392million.
Net income for the year under review increased 14.2%, year over year to ¥960 million. Net income increased¥119 million on account of increased income before income taxes.
<Reference 1: Sales by business segment>
ProductConsultancy
TrainingTotal

Fiscal 2019
Millions of Yen
Component ratio
1,829
62.8
995
34.1
89
3.1
2,914
100.0

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

Second Quarter
Millions of Yen

Fiscal 2020
Millions of Yen
Component ratio
1,925
64.9
962
32.5
76
2.6
2,964
100.0
Third Quarter
Millions of Yen

Rate of increase(decrease)
5.2
ᶭ3.3ᶭ14.3
1.7

Year-End

AnnualMillions 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
845
479
2,964
*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) Projected performance(Projected performance for the year ending September 30, 2021)
In the next fiscal year, concerns about the spread of the novel coronavirus are not likely to be completelydispelled. However, based on the efforts of the public and private sectors, economic trends are forecast to gradually
improve from the worst period, and as a result, the motivation to hire new employees is expected to recover atmany companies. In this environment, the Company intends to continue enhancing its operating performance byswiftly providing optimum services based on a precise analysis and understanding of corporate customers’ needs invarious services, focusing on the screening for hiring new graduates.
In light of the above, the Company projects net sales of ¥3,100 million (up 4.6% year over year), operating
income of ¥1,394 million (up 0.2% year over year), ordinary income of ¥1,393 million (up 0.1% year over year)
and net income of ¥961 million (up 0.1% year over year) for the year ending September 30, 2021.
(Basic policy regarding profit distribution and dividends for the year ended September 30, 2020, and the year
ending September 30, 2021)
The Company considers the return of profits to shareholders to be one of its mainstay management tasks.
Consequently, the Company intends to maintain a basic policy of ensuring stable and proactive profit distribution toshareholders with a benchmark payout ratio of 50% (more specifically, total dividends of 50% of net income for theyear) while maintaining an internal reserve for the future reinforcement of its business structure. As for acquisitionof treasury shares, the Company’s dividends from surplus are distributed twice per annum as an interim dividend
and a year-end dividend. The internal decision is made by the Board of Directors for the interim dividend and by ageneral meeting of shareholders for the year-end dividend.

In addition, while economic activities are stagnant around the world due to the impact of the states of emergency
caused by the spread of the novel coronavirus, net sales (¥2,964 million) for the year under review are 57 million
yen lower than the initial forecast (¥3,022 million yen). However, operating income, ordinary income, and net
income exceeded the initial forecasts by ¥122 million, ¥125 million, and ¥98 million, respectively. The Company
believes that this achievement is thanks to our ability to reduce costs related to halls as a result of the decision toswitch to the use of the online assessment tools as a countermeasure against the novel coronavirus infection bycustomers who were planning to use hall tests, etc.
In consideration of the above basic policies and the special characteristics of the year under review, the Company
plans to distribute an annual dividend per share of ¥96 for the year ended September 2020, consisting of ¥60 per
share for the year-end dividend, which is the sum of an ordinary dividend of ¥40 and a special dividend of ¥20, and¥36 per share for the interim dividend.
The Company intends to reinforce its management foundation by allocating the internal reserve to IT-related
investments for ensuring higher safety of its information systems and R&D projects for new assessment tools.
With regard to the dividend of the next year, the Company intends to distribute an annual dividend of ¥76 pershare by maintaining the annual (ordinary) dividend for the fiscal year under review.