Aug 7, 2019

Non-Consolidated Financial Results (Excerpt) for the Third 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:
Aug 8, 2019
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 29, 2019 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Third Quarter of Fiscal 2019 (October 1, 2018 to June 30, 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 nine monthsof Fiscal 2019

2,474

8.9

1,202

12.5

1,202

12.6830

13.5

First nine monthsof Fiscal 2018

2,273

3.1

1,068

ᶭ2.1

1,068

ᶭ2.1732

ᶭ2.5

Fully diluted net income
per share

Net income per share
Yen

Yen

First nine monthsof Fiscal 2019139.28138.94First nine monthsof Fiscal 2018

123.09122.45(2) Non-consolidated Financial Position
Total assets

Net assets

Millions ofYen

Equity ratio

Millions ofJun 30, 2019
5,525
Sep 30, 2018
4,928
(Reference) Equity capital: June 30, 2019: ¥4,748 million

Yen%

4,748
4,280
September 30, 2018: ¥4.277 million

85.9
86.8

2. Dividends
Q1 EndFiscal 2018
Fiscal 2019Fiscal 2019 (forecast)

Q2 EndDividend per share
Q3 EndYear-End

AnnualYenYenYenYenYen㸫㸫

32.00
34.00

㸫㸫

35.00

67.00

34.00

68.00

(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%

2,850

5.4

Millions of

Ordinary income

Yen%

1,192

2.7

Millions of

Net income
per share

Net income

Yen%

1,192

2.7

Millions ofYen%

Yen821

3.3

137.54(Note) Revisions to recent business forecast: YesNet income per share has been adjusted based on the average number of shares outstanding (5,970,242 shares) for the year ending September 30, 2019,
which was calculated taking into account the number of shares issued during the third 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 Jun 30, 2019

6,141,158

As of Sep 30, 2018

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

As of Jun 30, 2019

150,936

As of Sep 30, 2018

150,844(iii) Average Number of shares outstanding

First nine monthsof Fiscal 2019

5,963,509

First nine monthsof Fiscal 2018

5,947,224* 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 nine months of the year ending September 30, 2019 (October 1, 2018, through June 30, 2019),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥201 million, or 8.9%, year over year to ¥2,474 million.
By business segment, “Product sales” increased 12.3% to ¥1,558 million, “Consultancy sales” increased 5.3% to¥842 million and “Training sales” decreased 14.4% to ¥73 million.
“Product sales” increased ¥170 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of overall product services centering on “GAB”, Web test of generalabilities. Moreover, “Consultancy sales” increased ¥42 million compared with the same period of the previous
fiscal year. This was primarily due to the favorable sales of customized versions of the “Web Test” and thefavorable orders received for analysis projects. “Training sales” decreased ¥12 million compared with the same
period of the previous fiscal year, primarily due to the decrease in orders received for in-house seminars.
The increase in net sales was primarily due to a continuing strong seller’s market for students amid media reportsthat the ratio of job openings for new graduates remained high and that there was a year-over-year increase in therate of early unofficial job offers given by companies, which hit a record high. Under these circumstances, theCompany believes that it was able to achieve increase in net sales by succeeding in receiving orders for newprojects as a result of active marketing activities in line with customer needs.
Operating income for the nine-month period under review increased 12.5% year over year to ¥1,202 million.
Although the cost of goods sold increased ¥13 million, or 3.9%, year over year to ¥362 million, and selling, generaland administrative expenses increased ¥54 million, or 6.3%, year over year, to ¥910 million, operating income
increased ¥133 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 and labor costs for provision of hall tests resulting from anincrease of orders. The primary factors for the increase in selling, general and administrative expenses wereincreases in royalties and labor expenses.
Ordinary income for the nine-month period under review increased ¥134 million, or 12.6%, year over year to¥1,202 million due to the increase in non-operating income by ¥1 million year over year, despite the slight increasein non-operating expenses.
Income before income taxes for the nine-month period under review increased ¥134 million, or 12.6%, year overyear to ¥1,202 million, because both extraordinary gains and extraordinary losses were small as in the same periodof the previous fiscal year.
After taking into account the above factors and income taxes—current and income taxes—deferred, net income
for the nine-month period under review increased ¥98 million, or 13.5%, year over year to ¥830 million.
<Reference 1: Sales by business segment>
ProductConsultancy
TrainingTotal

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

3

First nine months of Fiscal 2019
Millions of Yen
Component ratio
1,558
63.0
842
34.1
73
2.9
2,474
100.0

Rate of increase(decrease)
12.3
5.3
ᶭ14.4
8.9

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

Second Quarter

Third Quarter

Year-EndMillions ofMillions ofMillions ofYen

Yen nAnnualYen

Millions ofYen

Fiscal 2017
278
896
1,030
369
2,575
Fiscal 2018
299
987
986
431
2,704
Fiscal 2019
345
1,190
938
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
The operating results for the nine-month period under review showed an increase in income and profits
compared with the same period of the previous fiscal year. As a result, operating income, ordinary income, and net
income exceeded the business forecast figures for the year ending September 30, 2019. On the other hand, withregards to the operating results for the fourth quarter (July 1 through September 30, 2019), net sales are expected todecrease compared with the same period of the previous fiscal year and profits are predicted to be negative, taking
into consideration the current estimated amount of orders received. Therefore, revision has been made to thebusiness forecast figures for the year ending September 30, 2019, taking into account the actual results for thenine-month period under review and the business forecast for the fourth quarter.

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