Jul 27, 2018

Non-Consolidated Financial Results (Excerpt) for the Third Quarterof Fiscal 2018 [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:
Aug 9, 2018
Date to start distributing dividends:
㸫Supplementary documents for this summary of financial statements:
NoneResults briefing for financial results:
NoneThe original disclosure in Japanese was released on July 27, 2018 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Third Quarter of Fiscal 2018 (October 1, 2017 to June 30, 2018)(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 2018

2,273

3.1

1,068

‫ڹ‬2.11,068‫ڹ‬2.1732‫ڹ‬2.5First nine monthsof Fiscal 2017

2,205

9.2

1,091

11.5

1,091

11.1

750

15.5

Fully diluted net income
per share

Net income per shareYenYen

First nine monthsof Fiscal 2018

123.09122.45First nine monthsof Fiscal 2017123.50122.93

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, net income per share and fully diluted net income
per share has been calculated under the assumption that the stock split was conducted at the beginning of the year ended September 30, 2017.

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of Yen

Equity ratio

Millions of Yen

June 30, 2018
4,933
September 30, 2017
4,591
(Reference) Equity capital: June 30, 2018: ¥4,218 million

%

4,221
3,894
September 30, 2017: ¥3.890 million

85.5
84.7

2. Dividends
Q1 EndFiscal 2017
Fiscal 2018
Fiscal 2018 (forecast)

Q2 EndDividend per share
Q3 EndYear-End

Annual

Yen

Yen

Yen

Yen

Yen

㸫㸫

55.00
32.00

㸫
㸫

72.00

127.0

32.00

64.00

(Note) Revisions to recent dividends forecast: None
The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, the actual amount of dividend distributed isrecorded for the year ended September 30, 2017.

3. Non-Consolidated Forecast for the Year Ending September 30, 2018 (October 1, 2017 to September 30, 2018)
Net sales

Fiscal 2018

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

2,692

4.5

1,117

1.1

1,116

1.1

771

1.7

129.68(Note) Revisions to recent business forecast: None
Net income per share has been adjusted based on the average number of shares outstanding (5,947,599 shares) for the year ending September 30, 2018,
which was calculated taking into account the number of shares issued during the third quarter of the year ending September 30, 2018 through theexercise of share subscription rights as a stock option, and the number of treasury shares held.

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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 June 30, 2018

6,099,558

As of September
30, 2017

6,096,358(ii) Number of treasury shares

As of June 30, 2018

150,844

As of Sep 30, 2017

150,844(iii) Average Number of shares outstanding

First nine monthsof Fiscal 2018

5,947,224

First nine monthsof Fiscal 2017

6,076,494

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, calculations were made under theassumption that the stock split was conducted at the beginning of the year ended September 30, 2017.

* 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 resultsDuring the first nine months of the year ending September 30, 2018 (October 1, 2017, through June 30, 2018),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥67 million, or 3.1% year over year, to ¥2,273 million.
By business segment, “Product sales” increased 8.0% to ¥1,387 million, “Consultancy sales” decreased 5.9% to¥800 million and “Training sales” increased 20.9% to ¥85 million.
The increase in income was primarily due to the factor that the job market was significantly more favorable forstudents than in the previous year as reported by the media, including the higher ratio of job openings to students
who are expected to graduate next spring and the higher rate of early unofficial job offers given by companies tothose prospective graduates. The Company believes that its marketing activities in line with customers’ needs wereeffective under these circumstances. Nevertheless, net sales growth rate of 3.1% for the nine-month period underreview was lower than that of 9.2% for the same period of the previous fiscal year. This is due to sales fromlarge-scale employee assessment services recognized in the same period of the previous fiscal year.
Operating income for the nine-month period under review decreased 2.1% year over year to ¥1,068 million.
While ensuring an increase in income, the cost of goods sold increased ¥14 million, or 4.5% year over year, to ¥348
million and selling, general and administrative expenses increased ¥75 million, or 9.6% year over year, to ¥855
million. As a result, operating income decreased ¥22 million year over year. The increase in the cost of goods sold
was primarily attributable to an increase in subcontracting costs resulting from an increase of orders. The primaryfactors for the increase in selling, general and administrative expenses were increases in royalties, labor expenses
such as salaries and executive compensation, and an increase in job offering expenses.
Ordinary income for the nine-month period under review decreased 2.1% year over year to ¥1,068 million.
Ordinary income decreased ¥22 million year over year due to the decrease in 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 nine-month period under review decreased 2.4% year over year to ¥1,068
million. Income before income taxes decreased ¥26 million year over year because extraordinary gains decreased¥3 million year over year in addition to the decrease in ordinary income. The decrease in extraordinary gains wasdue to the reporting of ¥3 million of gain on sales of investment securities as extraordinary gains for the same
period of the previous fiscal year.
Net income for the nine-month period under review decreased ¥18 million, or 2.5% year over year, to ¥732 million,
primarily due to the decrease in income before income taxes.
<Reference 1: Sales by business segment>
ProductConsultancy
Training
Total

First nine months of Fiscal 2017
Millions of Yen
Component ratio
1,284
58.2
850
38.6
70
3.2
2,205
100.0

3

First nine months of Fiscal 2018
Millions of Yen
Component ratio
1,387
61.0
800
35.2
85
3.8
2,273
100.0

Rate of increase(decrease)8.0‫ڹ‬5.9
20.9
3.1

<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 2016
280
744
995
399
2,420
Fiscal 2017
278
896
1,030
369
2,575
Fiscal 2018
299987986
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
The operating results for the nine-month period under review showed an increase in income and a decrease inprofits compared with the same period of the previous fiscal year. However, drops in operating income, ordinary
income, and net income were small. During the fourth quarter (July 1 through September 30, 2018), we intend toenhance our operating performance by speedily providing corporate customers who have not met their recruitingtargets or have internship programs with optimum services based on our precise analysis and understanding of theirneeds.
In light of the above, and based on our analysis and study of the business results, financial position and otherbusiness management materials for the nine-month period under review, no changes have been made to thebusiness forecast for the year ending September 30, 2018, which was released on October 27, 2017.

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