Nov 26, 2019Non-consolidated Financial and Operating Results (Excerpt)
for the Year Ended September 30, 2019 [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 21, 2019
Dec 23, 2019
Dec 24, 2019
Yes
Yes (for analysts and institutional investors)

The original disclosure in Japanese was released on October 30, 2019 at 15:15 (GMT+9)
1. Non-consolidated Financial Results for the Year Ended September 30, 2019 (October 1, 2018 to September 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
Millions ofFiscal 2019
Fiscal 2018

Operating income

Yen%

2,914
2,704

Millions of

7.85.0Yen

1,229
1,161

Yen

Millions of

5.9
5.0

Fully diluted
net income per share

Net income per share

Ordinary income%

Return on
shareholders’ equity

140.60133.01
Fiscal 2018 ʊ million

Net income
%

1,230
1,160

Yen

Fiscal 2019
140.86
Fiscal 2018133.69(Note) Comprehensive income: Fiscal 2019: ʊ million

Yen

Millions of

6.0
5.1

Yen%

840
795

Ordinary income tototal assets

5.8
4.8

Operating income tonet sales

%%

%

18.6
19.5

23.5
24.4

42.2
42.9

(2) Non-consolidated Financial Position
Total assets

Net assets

Millions ofYenEquity ratio

Millions of

Sep 30, 2019
5,539
Sep 30, 2018
4,928
(Reference) Equity capital: September 30, 2019: ¥4,761 million

Net assets per share

Yen%

Yen

4,761
85.9
4,28086.8
September 30, 2018: ¥4,277million

794.85718.93(3) Non-Consolidated Consolidated Cash FlowsNet cash provided by(used in) operating activities
Millions ofFiscal 2019
Fiscal 2018

Net cash provided by(used in) investing activities

Yen

Millions of

1,020736

Net cash provided by(used in) financing activities

Cash and cash equivalents at
end of periodYen%Yen

ᶭ25
ᶭ32

ᶭ380
ᶭ400

3,731
3,116

2. Dividends
Q1EndFiscal 2018
Fiscal 2019
Fiscal 2020 (forecast)

Q2
End

Dividend per share
Q3
Year-EndEnd

Total dividends
paid (annual)

Annual

Yen

Yen

Yen

Yen

Yen

ʊ
ʊʊ

32.00
34.00
36.00

ʊʊʊ

35.00
37.00
36.00

67.00
71.00
72.00

Millions of

Payout ratio(consolidated)

Dividends to net
assets

Yen%%

398
424

50.1
50.4
50.0

9.8
9.4

3. Non-Consolidated Forecast for the Year Ending September 30, 2020 (October 1, 2019 to September 30, 2020)
Net sales
Millions of

Fiscal 2020Operating income

Yen%

3,022

3.7

Millions of

Ordinary income

Yen%

1,269

3.2

Millions of

Net income
per share

Net income

Yen%

1,267

3.0

Millions of

Yen%

Yen861

2.5

143.89Net income per share has been calculated based on the number of shares (6,141,158 shares) after subtracting the number of treasury shares (150,972shares) from the total number of shares outstanding (5,990,186 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(ხ) :(iii) Changes in accounting estimates:(iv) Restatement:(2) Number of shares outstanding (common stock)(i) Number of shares outstanding
As of September 30, 2019
(including treasury shares)(ii) Number of treasury shares

As of September 30, 2019(iii) Average Number of shares outstanding

Fiscal 2019

None
None
None
None

6,141,158

As of September 30, 2018

6,100,358

150,972

As of September 30, 2018

150,8445,970,237

Fiscal 2018

5,947,646* 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 forecasts
1.

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, 2019 (October 1, 2018, through September 30, 2019), net sales ofSHL-JAPAN Ltd. (the “Company”) increased ¥209 million, or 7.8%, year over year to ¥2,914 million. By businesssegment, “Product sales” increased 12.6% to ¥1,829 million, “Consultancy sales” increased 0.8% to ¥995 millionand “Training sales” decreased 2.9% to ¥89 million.
“Product sales” increased ¥204 million compared with the same period of the previous fiscal year. This wasprimarily attributable to the favorable sales of overall product services led by “GAB,” Web test of general abilities.
Moreover, “Consultancy sales” increased ¥7 million compared with the same period of the previous fiscal year.
This was primarily due to the favorable orders received for analysis assessment projects. “Training sales” decreased¥2 million compared with the same period of the previous fiscal year, primarily due to the decrease in orders
received for in-house seminars.
During the year under review, the rate of early unofficial job offers made to students who are set to graduate next
spring remained at a high level, and it has been reported in the media that the tight labor market favoring students
remained notable. Amidst such conditions, screening activities by companies seeking to hire new graduates wereimpacted by a 10-day holiday period in May and ended even earlier than in the previous year. Under such anenvironment where shortening the screening period to hire new graduates continued, product services which arecomparatively easy to be introduced and utilized were appreciated by corporate customers, and there were multipleorders received, including for employee assessment projects. The Company believes these factors contributed to theyear-over-year increase in net sales.
Operating income for the year under review increased 5.9% year over year to ¥1,229 million. Although the costof goods sold increased ¥20 million, or 4.9%, year over year to ¥443 million, and selling, general andadministrative expenses increased ¥120 million, or 10.8%, year over year, to ¥1,241 million, operating income
increased ¥68 million year over year thanks to the increase in net sales. The increase in the cost of goods sold wasmainly attributable to an increase in subcontracting costs for provision of hall tests due to increased orders. The
primary factors for the increase in selling, general and administrative expenses were increases in labor expenses
associated with both personnel expansion, mainly for sales operations, and for interim bonuses, as well as inroyalties.
Ordinary income for the year under review increased 6.0%, year over year to ¥1,230 million. In addition toincreased operating income, ordinary income increased by ¥69 million due to an increase in non-operating incomeof ¥1 million year over year, despite non-operating expenses remaining essentially unchanged from the previous
fiscal year. The increase in non-operating income is primarily attributable to the reporting of ¥1 million of dividend
income.
Income before income taxes for the year under review increased 6.1% year over year to ¥1,230 million. Income
before income taxes increased ¥70 million because both extraordinary gains and extraordinary losses were small, as
in the same period of the previous fiscal year.
Net income for the year under review increased 5.8% year over year to ¥840 million. Net income increased ¥45
million on account of increased income before income taxes.

<Reference 1: Sales by business segment>
Product
Consultancy
Training
Total

Fiscal 2018
Millions of Yen
Component ratio
1,624
60.1
987
36.5
91
3.4
2,704
100.0

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

Fiscal 2019
Millions of Yen
Component ratio
1,829
62.8
995
34.1
89
3.1
2.914
100.0

Second Quarter

Third Quarter

Year-End

Millions ofMillions ofMillions ofYen

Yen

Rate of increase(decrease)
12.6
0.8
ᶭ2.9
7.8
AnnualYen

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
439
2,914
*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, 2020)
In the next fiscal year, conditions are uncertain with regard to economic trends and employment PR activity, as
well as with what impact there will be from the termination of the industry’s self-imposed controls pertaining tohiring screening. However, as corporations remain highly motivated to hire more employees, the Company projects
that the current market environment will maintain a brisk pace similar to that of the year under review. The
Company intends to continue enhancing its operating performance by swiftly providing optimum services based ona precise analysis and understanding of corporate customers’ needs while taking into account the establishment ofcertain rules concerning the screening process for hiring new graduates.
In light of the above, the Company projects net sales of ¥3,022 million (up 3.7% year over year), operating
income of ¥1,269 million (up 3.2% year over year), ordinary income of ¥1,267 million (up 3.0% year over year)
and net income of ¥861 million (up 2.5% year over year) for the year ending September 30, 2020.
(Basic policy regarding profit distribution and dividends for the year ended September 30, 2019, and the year
ending September 30, 2020)
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
and a year-end dividend. The internal decision is made by the Board of Directors for the interim dividend and by ageneral 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 ¥71 for theyear ended September 2019, consisting of ¥37 per share for the year-end dividend and ¥34 per share for the interimdividend. This is a year-over-year increase of ¥4, representing an increase of 6.0% from the annual dividend of ¥67
per share in the previous fiscal year.
The Company intends to reinforce its management foundation by allocating the internal reserve to IT-relatedinvestments for ensuring higher safety of its information systems and R&D projects for new assessment tools.
With regard to the dividend of the next year, the Company intends to distribute an annual dividend of ¥72 pershare. This is a dividend increase of ¥1 annually compared with the ¥71 annual dividend per share for the year
under review.