Nov 18, 2016

Non-consolidated Financial and Operating Results (Excerpt)
for the Year Ended September 30, 2016 [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 17, 2016
Date to start distributing dividends:
Dec 29, 2016
Date to submit the Securities Report
Dec 21, 2016
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 28, 2016 at 15:15 (GMT+9)
1. Non-consolidated Financial Results for the Year Ended September 30, 2016 (October 1, 2015 to September 30, 2016)(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
Millions ofOperating income

Yen%

Millions ofYen

Ordinary income%Millions ofYen

Fiscal 2016

2,420

6.2

1,018

9.9

1,020

Fiscal 2015

2,279

9.8

926

4.1

939

Fully diluted
net income per share

Net income per share

Fiscal 2016
Fiscal 2015

Return on
shareholders’ equity

Net income%Millions ofYen%

8.7

667

13.4

5.0

588

5.9

Ordinary income tototal assets

Operating income tonet sales

Yen

Yen%

%%

220.00195.88218.94
194.38

18.6
18.2

24.3
24.7

42.1
40.6

(Note) Comprehensive income: Fiscal 2016ʊ millon

Fiscal 2015 ʊ millon(2) Non-consolidated Financial Position
Total assets

Net assets

Millions ofYenEquity ratio

Millions of

Sep 30, 2016
4,398
Sep 30, 2015
4,005
(Reference) Equity capital: Sep 30, 2016: ¥3,385 millon

Net assets per share

Yen%

Yen

86.1
84.4

1,244.70
1,117.74

Net cash provided by(used in) financing activities

Cash and cash equivalents at
end of period

3,789
3,386
Sep 30, 2015: ¥3,379 million(3) Non-Consolidated Consolidated Cash FlowsNet cash provided by(used in) operating activities
Millions of

Fiscal 2016
Fiscal 2015

Net cash provided by(used in) investing activities

Yen

Millions of846
641

Yen%Yen‫ڹ‬47‫ڹ‬117‫ڹ‬278‫ڹ‬314

2,697
2,177

2. Dividends
Q1
EndFiscal 2015
Fiscal 2016
Fiscal 2017 (forecast)

Q2
EndDividend per share
Q3
Year-EnEnddTotal dividends
paid (annual)

Annual

Yen

Yen

Yen

Yen

Yen

ʊ
ʊ
ʊ

46.00
49.00
55.00

ʊʊ
ʊ

52.00
61.00
55.00

98.00
110.00110.00Millions of

Payout ratio(consolidated)

Dividends to net
assets

Yen%%

295
334

50.0
50.0
47.7

9.1
9.3

3. Non-Consolidated Forecast for the Year Ending September 30, 2017 (October 1, 2016 to September 30, 2017)
Net salesMillions ofFiscal 2017

Operating income

Yen%

2,520

4.1

Millions of

Ordinary income

Yen%

1,034

1.6

Millions of

Net income
per share

Net income

Yen%

1,032

1.1

Millions ofYen%

Yen7015.2

230.81

*Note(1) Application of particular accounts procedures to the preparation of quarterly non-consolidated financial statements: None(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(ϸ) :None(iii)Changes in accounting estimates:None(iv) Restatement:
None
(1)

Number of shares outstanding (common stock)(i) Number of shares outstanding(including treasury shares)

As of Sep 30, 2016

3,040,979

As of Sep 30, 2015

3,023,079(ii) Number of treasury shares

As of Sep 30, 201633

As of Sep 30, 2015

ʊ(iii)Average Number of shares outstanding

Fiscal 2016

3,033,228

Fiscal 2015

3,005,051* Implementation status of quarterly review proceduresThis financial results summary is not subject to review procedures under the Financial Instruments and Exchange Act, and thefinancial statement review procedures based on the Act were in progress at the time of the disclosure of these financial results.

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

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.

2.

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.

3.

The Company has scheduled a results briefing for security analysts and institutional investors on November 2, 2016. Please referto the IR Information for details of the materials that will be distributed at the session. The materials will be posted on theCompany’s Web site immediately after this meeting
http://www.shl.ne.jp/ir/for_analyst.asp

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results(Operating Results for the year ended September 30, 2016)
For the year ended September 30, 2016 (October 1, 2015, through September 30, 2016), net sales ofSHL-JAPAN Ltd. (the “Company”) increased ¥141 million, or 6.2%, year over year to ¥2,420 million. By businesssegment, “Product sales” increased 9.5% to ¥1,348 million, “Consultancy sales” increased 2.3% to ¥1,014 millionand “Training sales” increased 3.9% to ¥57 million.
Product sales for the year under review increased ¥116 million year over year. This increase was primarily
attributable to increased sales of our products such as “GAB,” which is used for the screening of new graduates
recruited for the main career track. Consultancy sales increased ¥22 million year over year. This increase wasprimarily attributable to favorable sales of customized versions of the “Web Test” and various valuation agency
services, or human assessment services, although sales of “Tamatebako,” an Internet-based screening system, wereunsatisfactory. Training sales increased ¥2 million year over year due to increased orders for in-house seminars.
During the year ended September 30, 2016, the employment environment remained steady as seen in the media
reporting on a rise in the informal job offer rate for students who are expected to graduate in 2017, and corporations
conducted aggressive screening of prospective graduates and of workers with experience. Under thesecircumstances, the period for recruiting and screening new graduates at corporations was further shortened in lightof the self-imposed regulations regarding the employment of new graduates* that were changed during the year
under review. Accordingly, the Company achieved an increase in revenue in all the business segments for the year
under review backed by a range of our widely supported services, particularly those products which are relatively
easy to be implemented by corporate customers.
Operating income for the year under review increased 9.9% year over year to ¥1,018 million. While the cost ofgoods sold decreased ¥6 million, or 1.7%, year over year to ¥378 million, selling, general and administrative
expenses increased ¥55 million, or 5.8%, year over year to ¥1,024 million. As a consequence, operating income forthe year increased ¥92 million year over year due to the increase in revenue. The decrease in the cost of goods sold
was primarily attributable to the decrease in production costs and amortization of product master, which offset theincrease in subcontracting costs associated with the operation of hall tests, resulting from the increase of orders.
The primary factors for the increase in selling, general and administrative expenses were the increases in labor
expenses largely due to the expansion centered on sales personnel, taxes and dues, and sales promotion-relatedexpenses.
Ordinary income for the year under review increased 8.7% year over year to ¥1,020 million. Ordinary income
increased ¥81 million year over year due to the increase in operating income, whereas the amount of non-operating
expenses was small, similar to that of the same period a year earlier, and non-operating income decreased ¥11million year over year to ¥3 million. The primary factor for the decrease in non-operating income was the reportingof ¥12 million in gains on investments in a limited partnership for the same period of the previous fiscal year.
Income before income taxes for the year under review increased ¥80 million, or 8.6%, year over year to ¥1,020
million, which was almost equal to ordinary income because both extraordinary gains and extraordinary losses weresmall.
Net income for the year under review increased ¥78 million, or 13.4%, year over year to ¥667 million, mainly
due to the increase in income before income taxes and the reduction in the corporate tax rate.

(Projected performance for the year ending September 30, 2017)
While there are several concerns such as the decelerating trend in economic growth on a global scale including
emerging countries, it is expected that corporations remain firmly motivated to hire more employees and thescreening market environment for new graduates continues to grow steadily. The industry’s self-imposed controls
regarding the employment of new graduates expected to graduate in 2017 have been newly revised and therecruitment of new graduates expected to graduate in 2018 will also be subject to the revised rules. However, areview of such self-imposed controls has been under consideration from various aspects for new graduates who areexpected to graduate in 2019 and thereafter. We therefore intend to continue enhancing our operating performanceby speedily providing optimum services based on our precise analysis and understanding of corporate customers’
needs by taking into account the possibility of another change in the schedules of recruitment PR activity and thescreening process for new graduates, which might take place in the fiscal year after next.
In light of the above, net sales of ¥2,520 million (up 4.1% year over year), operating income of ¥1,034 million(up 1.6%), ordinary income of ¥1,032 million (up 1.1%) and net income of ¥701 million (up 5.2%) are projected
for the year ending September 30, 2017.
(2) Basic Policy Regarding Profit Distribution and Dividends for the Year Ended September 30, 2016, and the YearEnding September 30, 2017
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% while maintaining an internal reserve for the future
reinforcement of its business structure. 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 theinterim dividend and by a general meeting of shareholders for the year-end dividend.
In line with the above basic policies, the Company plans to distribute an annual dividend per share of ¥110 for
the year ended September 2016, consisting of ¥61 per share for the year-end dividend and ¥49 per share for theinterim dividend. This is a dividend increase of ¥12 (up 12.2%) annually compared with a ¥98 annual dividend pershare for the previous year.
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 of new assessment tools.
With regards to the dividend for the next year, the Company intends to maintain the same amount of annual
dividend per share of the year under review.