May 17, 2017

Non-Consolidated Financial Results (Excerpt) for the Second Quarterof Fiscal 2017 [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:
May 15, 2017
Date to start distributing dividends:
Jun 1, 2017
Supplementary documents for this summary of financial statements
YesResults briefing for financial results:Yes (for analysts and institutional investors)
The original disclosure in Japanese was released on Apr 28, 2017 at 15:15 (GMT+9)
1. Non-Consolidated Financial Results for the Second Quarter of Fiscal 2017 (October 1, 2016 to Mar 31, 2017)(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 ofFirst six monthsof Fiscal 2017
First six monthsof Fiscal 2016

Operating income

Yen%

1,175
1,025

Millions of%

14.6546

22.2418

Millions ofNet incomeYen%

30.6

546

55.7

419

Millions ofYen%

30.1

377

35.5

48.8

278

55.9

Fully diluted
net income per share

Net income per shareFirst six monthsof Fiscal 2017
First six monthsof Fiscal 2016

Ordinary income

Yen

Yen

Yen

123.90123.35

91.89

91.40

(2) Non-Consolidated Financial Position
Total assets

Net assets

Millions ofMar 31, 2017
Sep 30, 2016
(Reference) Equity capital:

Yen

Equity ratio

Millions ofYen%

4,538
3,977
4,398
3,789
Mar 31, 2017: ¥3,973 million Sep 30, 2016: ¥3,785 million

87.5
86.1

2. Dividends
End ofFirst quarter

Fiscal 2016
Fiscal 2017
Fiscal 2017 (forecast)

Dividend per share
End ofThird quarterEnd ofSecond quarter

Year-End

AnnualYenYenYenYenYenʊ
ʊ

49.00
55.00

ʊ61.00110.00ʊ55.00110.00(Note) Revisions to recent dividends forecast: None
3. Non-Consolidated Forecast for the Year Ending September 30, 2017 (October 1, 2016 to September 30, 2017)
Net sales
Millions of

Fiscal 2017

Operating income

Yen%

2,520

4.1

Millions of

Ordinary income

Yen%

1,034

1.6

Millions ofNet income
per share

Net income

Yen%

1,032

1.1

Millions of

Yen%

701

5.2

Yen230.61(Note) Revisions to recent business forecast: None
Net income per share has been revised based on the average number of shares outstanding during the first six months (3,043,566shares) because it is difficult to calculate the average number of shares outstanding on a full-year basis as the Company is currently ina period of acquiring treasury shares.

-1-(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(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 Mar 31, 2017

3,046,979

As of Sep 30, 2016

3,040,979(ii) Number of treasury shares

As of Mar 31, 201697

As of Sep 30, 2016

33(iii)Average Number of shares outstanding

First six monthsof Fiscal 2017

3,043,566

First six monthsof Fiscal 2016

3,028,535* 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 preparedbased on information currently available to the Company and certain assumptions that the Company believes to be reasonable. TheCompany makes no guarantee as to their realization. Actual financial results may differ substantially from the forecasts due to variousfactors.
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, 2017 (October 1, 2016, through March 31, 2017),
net sales of SHL-JAPAN Ltd. (the “Company”) increased ¥149 million, or 14.6% year over year, to ¥1,175 million.
By business segment, “Product sales” increased 18.2% to ¥566 million, “Consultancy sales” increased 8.6% to¥571 million and “Training sales” increased 83.7% to ¥37 million.
The self-imposed regulations regarding the employment of new graduates* were left unchanged from those forprevious fiscal year, and the positive sentiment of corporations, for which the media reported an increase for thesixth consecutive year in the job offers-to-seekers ratio of new graduates who are expected to graduate in March
2018, continued, reflecting their favorable operating performance. The Company believes that its marketing
activities in line with customers’ needs were effective under these circumstances, contributing to year-over-yearincreases in net sales in all the business segments.
Operating income for the six-month period under review increased 30.6% year over year to ¥546 million.
Although the cost of goods sold increased ¥10 million, or 8.6% year over year, to ¥138 million, and selling, generaland administrative expenses increased ¥10 million, or 2.3% year over year, to ¥490 million, operating income
increased ¥127 million year over year due to the increase in net sales. The increase in the cost of goods sold wasprimarily attributable to increases in subcontracting costs resulting from the increase of orders, as well as inproduction costs and amortization of product master. The primary factors for the increase in selling, general andadministrative expenses were the increases in taxes and dues, labor expenses such as salaries and executive
compensation, and rents paid, despite a decrease in sales promotion-related expenses.
Ordinary income for the six-month period under review increased 30.1% year over year to ¥546 million.
Ordinary income increased ¥126 million year over year, reflecting a small amount in non-operating expenses
similar to that for the same period a year earlier and the increase in operating income despite a ¥1 million decreasein non-operating income year over year.
Income before income taxes for the six-month period under review increased ¥129 million, or 30.9% year overyear, to ¥550 million, due to the reporting of a ¥3 million gain on sales of investment securities as extraordinarygains.
Net income for the six-month period under review increased ¥98 million, or 35.5% year over year, to ¥377
million, mainly due to the increase in income before income taxes and the reduction in the corporate tax rate.
* The industry has self-imposed controls regarding the employment of new graduates, under which industry
groups agreed not to start employment PR activity and the screening process for new graduates prior to a fixed
date in light of the academic schedules for students. The Keidanren (Japan Business Federation) stipulated in
its “Guidelines for Recruiting and Employing New Graduates” that corporations’ PR activity for new
graduates who will enter corporations in fiscal 2017 onwards shall commence on and after March 1 of the year
just preceding the year of graduation or post-graduate completion, and screening activity on and after June 1of the year of graduation or completion.

-3-(2) Explanation about future prospects such as business forecasts
Despite several concerns such as the impact of geopolitical risk, the Company believes that corporations remain
firmly motivated to hire more employees and the market environment for recruiting and screening new graduates
will remain strong in the second half of the year ending September 30, 2017. We intend to continue enhancing ouroperating performance by speedily providing optimum services based on our precise analysis and understanding ofcorporate customers’ needs while taking into account the possibility of early completion of corporations’ activities
for recruiting and screening new graduates during the current fiscal year.
The financial results for the year ending September 30, 2017 will be subject to the impact of the change inroyalty fee due to the conclusion of a new license agreement. The annual royalty fee for the previous fiscal year
(year ended September 30, 2016) was ¥52 million. As for the impact on the financial results for the year ending
September 30, 2017, the amount of impact is expected to be ¥30 million due to the change in royalty fee (from2.5% to 5.0%) for sales of the products covered by licensing for the six-month period from April throughSeptember 2017.
In light of the above and based on our analysis of the business results, financial position and other managerial
administrative material for the six-month period under review, followed by our careful consideration of business
forecasts, the Company is not, at this time, revising its business forecast for the year ending September 30, 2017,
which was released on October 28, 2016.

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