May 18, 2021

Non-Consolidated Financial Results (Excerpt) for the Second Quarterof Fiscal 2021

[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, Director            Tel: +81-3-5385-8781
Date to submit the Quarterly Securities Report:
May 14, 2021
Date to start distributing dividends:
Jun 1, 2021
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 April 28, 2021 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Second Quarter of Fiscal 2021 (October 1, 2020 to March 31, 2021)(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 20211,848

12.8

966

12.4

965

12.3

665

13.5

First six monthsof Fiscal 2020

1,639

6.7

859

12.8

859

12.7

586

11.3

Fully diluted net income
per share

Net income per share
YenYenFirst six monthsof Fiscal 2021

111.15㸫First six monthsof Fiscal 2020

97.91

㸫

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions of Yen

Equity ratio

Millions of Yen

Mar 31, 2021
6,595
Sep 30, 2020
6,143
(Reference) Equity capital: March 31, 2021: ¥5,584 million

%

5,584
5,288
Sep 30, 2020: ¥5,288 million

84.7
86.12. Dividends
Q1 EndFiscal 2020
Fiscal 2021
Fiscal 2021 (forecast)

Q2 EndDividend per share
Q3 EndYear-End

AnnualYenYenYenYenYen㸫
㸫

36.00
38.00

㸫

60.00

96.00

㸫

38.00

76.00

(Note) Revisions to recent dividends forecast: None
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 incomeper 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(Note) Revisions to recent business forecast: NoneNet income per share has been adjusted based on the average number of shares outstanding (5,990,152 shares) for the year ending September 30, 2021,
which was calculated taking into account the number of shares issued during the first quarter of the year ending September 30, 2021 through thenumber 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, 2021

6,141,158

As of Sep 30, 2020

6,141,158(ii) Number of treasury shares

As of Mar 31, 2021

151,006

As of Sep 30, 2020

151,006(iii) Average Number of shares outstanding

First six monthsof Fiscal 2021

5,990,152

First six monthsof Fiscal 2020

5,990,186* 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 six months of the year ending September 30, 2021 (October 1, 2020, through March 31, 2021),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥209 million, or 12.8%, year over year to ¥1,848 million.
By business segment, “Product sales” increased 20.4% to ¥1,197 million, “Consultancy sales” decreased 0.5% to¥597 million, and “Training sales” increased 20.4% to ¥54 million.
“Product sales” increased ¥203 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of “WebGAB,” Web test of general abilities, “C-GAB plus (halltest/online monitored Web test),” and “WebCAB,” Web test of computer aptitude. Meanwhile, “Consultancy sales”
decreased ¥2 million compared with the same period of the previous fiscal year. This was primarily due to theunfavorable sales of customized versions of multiple choice tests and analysis assessment projects, despite
favorable sales of “TAMATEBAKO” Web test and customized versions of Web tests. “Training sales” increased¥9 million compared with the same period of the previous fiscal year, primarily owing to a rise in orders received
for in-house seminars.
In the first six months of the year ending September 30, 2021, despite continued concerns over the spread of thenovel coronavirus, screening activities by companies seeking to hire new graduates began earlier compared withprevious years, especially for internship participants, as evidenced by media reports which stated that as of April 1
there was a record rate of early unofficial job offers made to new graduates who are set to graduate next springsince the surveys began, as the “Views on the Schedules for Finding Jobs and Hiring Activities,” which are current
rules for finding jobs (PR activities to start on or after March 1, screening activities to start on or after June 1),
become a mere formality. In this environment, the Company believes that it was able to achieve an increase in net
sales by gaining support from its customers for services with low risks of the “Three Cs” (Closed spaces, Crowded
places, and Close-contact settings) or services that can avoid those risks, mainly online assessment tools.
Operating income for the six-month period under review increased 12.4% year over year to ¥966 million.
Although the cost of goods sold increased ¥38 million, or 23.0%, year over year to ¥205 million and selling,
general and administrative expenses increased ¥64 million, or 10.5%, year over year to ¥676 million, operating
income increased ¥106 million year over year thanks to the increase in net sales. With regard to the cost of goods
sold, the increase was mainly attributable to increases in labor costs and subcontracting costs resulting from anincrease of orders received for hall tests and online monitored Web tests, despite a decrease in cost of question
booklets for multiple choice tests and other goods. The primary factors for the increase in selling, general andadministrative expenses were increases in royalties and labor expenses mainly due to the increased number of staff
in the sales department.
Ordinary income for the six-month period under review increased ¥105 million, or 12.3%, year over year to ¥965
million because both non-operating income and non-operating expenses were small as in the same period of theprevious fiscal year.
Income before income taxes for the six-month period under review was equal to ordinary income, because no
extraordinary gains or extraordinary losses were recorded as in the same period of the previous fiscal year, andincreased ¥105 million, or 12.3%, year over year to ¥965 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 ¥79 million, or 13.5%, year over year to ¥665 million.
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<Reference 1: Sales by business segment>
ProductConsultancy
TrainingTotal

First six months of Fiscal 2020
Millions of Yen
Component ratio
994
60.7
600
36.6
44
2.7
1,639
100.0

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

Second Quarter

First six months of Fiscal 2021
Millions of Yen
Component ratio
1,197
64.8
597
32.3
54
2.9
1,848
100.0

Rate of increase(decrease)20.4‫ڹ‬0.5
20.4
12.8

Third Quarter

Year-End

AnnualMillions of Yen nMillions of Yen

Millions of Yen

Millions of Yen

Fiscal 2019
345
1,190
938
439
2,914
Fiscal 2020
405
1,233
845
479
2,964
Fiscal 2021
4721,375
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 third
quarters of the fiscal year.

(2) Explanation about future prospects such as business forecasts
In the year under review, there are hopeful signs such as the beginning of vaccination for the novel coronavirus.
On the other hand, a state of emergency was declared in some areas following the resurgence of the spread of thenovel coronavirus, and the containment of concerns about the spread still remains unforeseeable. Although theCompany cannot deny the fact that economic trends are uncertain due to the impact of these factors, some media
reports have stated that motivation for hiring is strong among companies that consider the balance of employee
composition by age, must address labor shortage, and bolster human resources apt for digital transformation (DX).
The Company projects that screening activities mainly by such companies seeking to hire new graduates andmid-career personnel who can become immediate assets will be carried out while proactively taking measuresnecessary to avoid risks of the “Three Cs.” In this environment, the Company intends to enhance its operating
performance by swiftly providing its optimum assessment services based on a precise analysis and understanding ofcorporate 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 financial
results forecast for the year ending September 30, 2021, which was released on October 30, 2020.

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