Nov 15, 2017

Non-consolidated Financial and Operating Results (Excerpt)
for the Year Ended September 30, 2018 [J-GAAP basis]
Listed Company Name:
SHl-JAPAN Ltd.
Securities Code:4327
Representative:
Manabu Nara, Managing Director
Contact:
Naohiro Nakamura, Executive Director      Date to the ordinary general meeting of shareholders:Date to start distributing dividends:
Date to submit the Securities Report
Supplementary documents for this summary of financial statements
Results briefing for financial results:

Registered on Tokyo Stock Exchange
URL:
http://www.shl.co.jp/Tel: +81-3-5385-8781
Dec 22, 2018
Dec 25, 2018
Dec 26, 2018
Yes
Yes (for analysts and institutional investors)

The original disclosure in Japanese was released on October 30, 2018 at 15:15 (GMT+9)
1. Non-consolidated Financial Results for the Year Ended September 30, 2018 (October 1, 2017 to September 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%

Fiscal 2018

2,704

5.0

1,161

5.0

1,160

5.1

795

4.8

Fiscal 2017

2,575

6.4

1,105

8.6

1,104

8.1

758

13.7

Fully diluted
net income per share

Net income per share
Yen

Return on
shareholders’ equity

Yen

Fiscal 2018133.69Fiscal 2017125.27(Note) Comprehensive income: Fiscal 2018ʊ millon

133.01124.67
Fiscal 2017 ʊ millon

Ordinary income tototal assets

Operating income tonet sales%%%

19.5
19.8

24.4
24.6

42.9
42.9

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

Sep 30, 2018
4,928
Sep 30, 2017
4,591
(Reference) Equity capital: September 30, 2018: ¥4,277 millon

4,280
3,894
September 30, 2017: ¥3,890million

Net assets per share%Yen

86.8
84.7

718.93654.37The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, net assets per share have been calculated under theassumption that the stock split was conducted at the beginning of the year ended September 30, 2017.

(3) Non-Consolidated Consolidated Cash FlowsNet cash provided by(used in) operating activities

Net cash provided by(used in) investing activities

Millions of Yen

Millions of Yen%

Yen736890‫ڹ‬32‫ڹ‬131‫ڹ‬400‫ڹ‬644

3,116
2,813

Fiscal 2018
Fiscal 2017

Net cash provided by(used in) financing activities

Cash and cash equivalents atend of period

2. Dividends
Q1
EndFiscal 2017
Fiscal 2018
Fiscal 2019 (forecast)

Q2
EndDividend per share
Q3Year-EndEndAnnual

Total dividends
paid (annual)

Payout ratio(consolidated)

Dividends to net
assets

Yen

Yen

Yen

Yen

Yen

Millions of Yen%%

ʊʊ
ʊ

55.00
32.00
34.00

ʊ
ʊ
ʊ

72.00
35.00
34.00

127.00
67.00
68.00

381
398

50.7
50.1
50.7

9.9
9.8

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, the actual amount of dividend distributed is recorded
for the years ended September 30, 2017.

3. Non-Consolidated Forecast for the Year Ending September 30, 2019 (October 1, 2018 to September 30, 2019)
Net sales

Fiscal 2019

Operating income

Ordinary income

Net income
per share

Net income

Millions of Yen%

Millions of Yen%

Millions of Yen%

Millions of Yen%

Yen

2,825

4.5

1,166

0.5

1,164

0.4

798

0.4

134.21

Net income per share has been calculated based on the number of shares (6,100,358 shares) after subtracting the number of treasury shares (150,844shares) from the total number of shares outstanding (5,949,514 shares), reflecting the stock split.*Note(1) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies caused by revision of accounting standards:(ii) Changes in accounting policies other than(ϸ) :(iii) Changes in accounting estimates:(iv) Restatement:(2) Number of shares outstanding (common stock)(i) Number of shares outstanding
As of September 30, 2018
(including treasury shares)(ii) Number of treasury shares

As of September 30, 2018(iii) Average Number of shares outstanding

Fiscal 2018

None
None
None
None

6,100,358

As of September 30, 2017

6,096,358

150,844

As of September 30, 2017

150,8445,947,646

Fiscal 2017

6,056,188

The Company conducted a two-for-one stock split of common shares on October 1, 2017. However, the numbers of shares have been calculated
under the assumption 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 annual review procedures.

* Explanations and other special notes concerning the appropriate use of financial results forecasts1.

2.

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.
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.

Overview of operating results, etc.
(1) Overview of operating results
For the year ended September 30, 2018 (October 1, 2017, through September 30, 2018), net sales of SHL-JAPANLtd. (the “Company”) increased ¥129 million, or 5.0% year over year, to ¥2,704 million. By business segment,“Product sales” increased 9.2% to ¥1,624 million, “Consultancy sales” decreased 2.4% to ¥987 million and “Trainingsales” increased 22.6% to ¥91 million.
During the year under review, while the number of students graduating next spring who have received early
unofficial job offers increased against the backdrop of favorable corporate performances and a growing sense of labor
shortages, employment activities by companies seeking to hire new graduates ended at a relatively earlier stage, as it
has been reported in the media that the tight labor market favoring students was more notable than previous year as
exemplified by many companies failing to achieve planned targets for the number of early unofficial job offers. Under
such an environment where shortening the hiring screening period for new graduates continued, product services
which are comparatively easier to be introduced and utilized were appreciated by corporate customers. The Company
believes this contributed to the year-over-year increase in net sales.
Operating income for the year under review increased 5.0% year over year to ¥1,161 million. Although the cost ofgoods sold increased ¥17 million, or 4.4% year over year, to ¥422 million, and selling, general and administrative
expenses increased ¥56 million, or 5.3% year over year, to ¥1,120 million, operating income increased ¥55 million
year over year due to the increase in net sales. The increase in the cost of goods sold was primarily attributable to anincrease in subcontracting costs for provision of hall tests resulting from the increase in orders received, despite
decreases in labor costs and manufacturing expenses. The primary factors for the increase in selling, general andadministrative expenses were increases in royalty and recruiting expenses.
Ordinary income for the year under review increased 5.1% year over year to ¥1,160 million. Ordinary income
increased ¥56 million year over year, reflecting the decrease in non-operating expenses by ¥1 million to ¥1 million
year over year, in addition to the increase in operating income. The decrease in non-operating expenses is primarily
attributable to the reporting of ¥1 million of commission for purchase of treasury shares as non-operating expenses
for the previous fiscal year.
Income before income taxes for the year under review increased 4.8% year over year to ¥1,160 million. Income
before income taxes increased ¥52 million year over year due to the increase in ordinary income, despite a decreaseof ¥3 million year over year in extraordinary gains. The decrease in extraordinary gains was due to the reporting of¥3 million of gain on sales of investment securities as extraordinary gains for the previous fiscal year.
Net income for the year under review increased ¥36 million, or 4.8% year over year, to ¥795 million, primarily
due to the increase in income before income taxes.
<Reference 1: Sales by business segment>
ProductConsultancy
Training
Total

Fiscal 2017
Millions of Yen
Component ratio
1,488
57.8
1,012
39.3
74
2.9
2,575
100.0

Fiscal 2018
Millions of Yen
Component ratio
1,624
60.1
987
36.5
91
3.4
2.704
100.0

Rate of increase(decrease)
9.2‫ڹ‬2.422.6
5.0

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

Second Quarter
Millions of Yen

Third Quarter

Year-End

AnnualMillions of Yen nMillions of Yen

Millions of Yen

Fiscal 2016
280
744
995
399
2,420
Fiscal 2017
278
896
1,030
369
2,575
Fiscal 2018
299
987
986
431
2,704
*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) Projected performance(Projected performance for the year ending September 30, 2019)
While there are concerns over factors including the effect of the global trade friction in the coming fiscal year, it
is expected that screening market environment for new graduates remains brisk as corporations stay highly motivatedto hire more employees and the employment PR. Furthermore, with regard to employment PR activity and screening
process for new graduates expected to graduate in 2020, the current industry’s self-imposed controls concludes at theend of the next fiscal year, the final year of implementation. We intend to continue enhancing our operating
performance by speedily providing optimum services based on our precise analysis and understanding of corporate
customers’ needs while taking into account the establishment of certain rules related to the screening process for newgraduates.
In light of the above, net sales of ¥2,825 million (up 4.5% year over year), operating income of ¥1,166 million (up0.5% year over year), ordinary income of ¥1,164 million (up 0.4% year over year) and net income of ¥798 million(up 0.4% year over year) are projected for the year ending September 30, 2019.
(Basic policy regarding profit distribution and dividends for the year ended September 30, 2018, and the year endingSeptember 30, 2019)
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% (more specifically, total dividends of 50% of net income for theyear) while maintaining an internal reserve for the future reinforcement of its business structure. As for acquisitionof treasury shares, the Company’s dividends from surplus are distributed twice per annum as an interim dividend anda year-end dividend. The internal decision is made by the Board of Directors for the interim 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 ¥67 for theyear ended September 2018, consisting of ¥35 per share for the year-end dividend and ¥32 per share for the interimdividend. Taking into consideration the two-for-one stock split of common shares conducted on October 1, 2017, thisis a dividend increase of ¥3.5 (up 5.5% year over year) annually compared with a ¥63.5 annual dividend per sharefor 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 distribute an annual dividend of ¥68. Thisis a dividend increase of ¥1 annually compared with a ¥67 annual dividend per share for the year under review.