Summary of Medium-Term Plan
May 31 & June 11, 2019
Yushi USHIJIMA, President
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)1. Review of the Previous Medium-Term Plan

Review of Previous Medium-Term Plan
Though the targets were not achieved due to a fall in first year of theplan, we got positive results in profitability improvement &strengthening of business bases
8.7

Targets（FY19/3）
 Sales:ROE(%)
6.5¥300Bn.

7.0

7.6

 Operating income: ¥16.5Bn. （¥Bn.)
 Operating margin:

5.5％

 ROE:10％

Net sales 280.0
257.9

267.9

14.1
Operatingincome

10.0

FY6/3

FY17/311.1

FY18/3

277.9

12.8

FY19/3

Previous medium-term management plan
3

© NEC Networks & System Integration Corporation 2019

2. Basic Policy & Targetsof the New Medium-Term PlanPositioning of Medium-Term Plan toward Vision for 2030
Socialvision torealize

Our
futurevisionChanges insociety/technology

More comfortable and convenient communications society

Communication Service Orchestrator

2030

who produces a new value chain leveraging our strengths,
through collaboration with partners

5G, digital, cloud first, SDGs, etc.
2021

Strengthen growth power and earnings power by strengthening
the business structure and constitution in anticipation ofenvironmental changes in five and ten years’ time.
 Strengthening of competitiveness in existing businesses
2019  Creation of new businesses and revenue sources Renewal of record-high performance5© NEC Networks & System Integration Corporation 2019

Medium- to Long-Term Environmental Recognition
The business environment will change dramatically
due to social issues and technological innovations
Opportunities

Threats

Diversification andleveling of earnings
opportunities

Digitalization

Creation of newbusiness
opportunities

5G

Higher productivity andoutsourcing needs ofoperation at customers

Labor shortage

Changes in theexisting SI model
Contraction of theconstruction business
Securing of humanresources andsuccession oftechnologies

Accelerating shift to a new business model andstrengthening it to keep up with business
opportunities provided by digital & 5G
6© NEC Networks & System Integration Corporation 2019

Our Competence
Business creation capabilities

Pioneer of work-style innovation
Usage of technologies by our own practiceCollaboration with various partners

Nationwide businesscapabilities

Sales, SEs as well as on-site
capabilities such as construction
Nationwide support services
network (approx. 400 bases)

Technological capabilities& credibility
From social infra.
to cutting edge services
Multi-vendor products& services

The “Only 1” position

to provide new technologies promptly as a total service
in the coming Digital & 5G age

Strengthen expertise and competitiveness byenhancing our competence.
7© NEC Networks & System Integration Corporation 2019

Growth Strategies with “NESIC × Digital × 5G” (Overview)

Business innovation
services

DX platform
Cloud shift and cloud SI(Self practice and modeling)
5G migration & network virtualization
Local 5G (5G of private networks)

5G infrastructure
8© NEC Networks & System Integration Corporation 2019

Automization and BPOof operation

Toward“ Communication services”orchestrator

Digitalsolutions

Nationwide TechnologicalBusinessbusinesscreation
capabilities
capabilities & credibility capabilities

Theme of the Medium-Term Plan

Beyond Borders
To go beyond every border and barrier such as market borders,technological barriers, competitive barriers, organizational borders,ability borders or performance borders.

Move up to a next stage with
“Creation,” “Change” and “Challenge.”9© NEC Networks & System Integration Corporation 2019

Management Targets (FY2022/3)▌Make a shift to the top line over the ¥300 bn▌Shift profitability to the industry level (FY22/3 is a check point).

(¥ Bn.)FY2019/3
Results

FY2022/3
Targets(Reference)
Record-highNet sales

277.9

310

292.2

Operating income

12.820(Operating margin)

4.6%

6.5%

8.7%

10% ormore

ROE
10© NEC Networks & System Integration Corporation 2019

(FY2015/3)

16.2(FY2015/3)

5.5%(FY2015/3)

9.6%(FY2014/3)

Basic Strategies

 Strengthening of competitiveness and growth
power for the Digital & 5G age
 Strengthening of the base, schemes and structure tocreate advanced technologies and new businesses Acceleration of innovation through All-NESIC

Shifting to sustainable profit growth.
11© NEC Networks & System Integration Corporation 2019

Measures Taken toward Medium-Term Plan

▌Strengthening of Growth PowerStarted-up DX business &launched advanced services

Promoted new business schemes/partnershipCreated a foothold for establishing 5G technologies▌Strengthening of CompetenceThree Business Units to exert expertise and competitiveness～Digital Solutions BU, Network Infra. BU, Engineering & Support Services BU

Consolidated advanced technologies and business creation functions～Business Design Operations Unit

▌Acceleration of Collaboration with Partners
Collaboration for business creation with startups(Discovery of cutting-edge solution & services)～Established NESIC CVC（Jan.2018), invested in Sozo Ventures（Apr.2019)
participated in an accelerator in Silicon Valley （May.2019)12© NEC Networks & System Integration Corporation 2019

3. Strategy by Business Segment

Positioning of Each Segment
Realize profit growth by expanding the top line
and improving management efficiency.
Engineering &Operating
Support Services
margin(％)
Improvement in10%

6%

resource efficiency
Deployment of solutionsin Japan and overseas

785.491.5
7.7

95
10.5
101
8.5

FY19/3Upper figures: Sales→FY22/3 Lower figures: Operating income

8014© NEC Networks & System Integration Corporation 2019100

DigitalSolutions

105
8.5

EO/DX
services

110
11.0

NetworkInfrastructures
Construction of 5G biz model
Improvement in qualityof large projects
Net sales(¥ Bn.)

120

Evolution of Business with DX (e.g. EO, work-style innovation)

Evolution to work-style innovation that
“empowers business” with EO x DX
Layer of past EO business

Empowering Business

OfficeNESIC’s digital solutions that will

empower business

Enhanced and empowered by ICT(contribute to higher productivityof organizations)by taking one step further with DX.
Innovation

Utilization ofActivities DX tech.
Communication tools

Tools

Business/process reforms

Cloud collaboration
Image recognition
Behavior analysis, etc.

Communication tools

Place
EmpoweredOffice15© NEC Networks & System Integration Corporation 2019

EmpoweredOfficeConsultingDeployment of 5G in All Our Businesses
Basestations

 Improvement in construction quality
 Expansion of business fieldfrom construction to BPO

Opticaltransmission

 Expansion of vendor alliance Response to 5G migration

NＷ services
controlplatform Virtualization migration Service infrastructure operationbusiness① Further cultivation of telecom
carrier infra.
(Differentiation with multi-layer SI)

5G technologies& verification
Reference 2019 Commencement of 5G pre-service
2020 Commercial service
16© NEC Networks & System Integration Corporation 2019

③ Development andcommercialization of 5G
utilization services
 DX collaboration
 Public market(CATV/disaster prevention/smart city) Carrier collaboration business② Local 5G
 Local governments Lifeline companies
 Factories, etc.

Autumn 2019 Allocation of frequencies
for local 5G

Enhancement of Engineering and Maintenance Resources
Further strengthening of basic technologies,
as source of our competitivenessEstablishment of a new core base to foster human resources
and strengthen project quality
Basic Technology Development Center (tentative name)2020(planned)

Resource development

PMSE

Digital Solution

Field construction and maintenance engineers

Multi-skilled engineers

Network infra.

System/technology verificationand evaluation

Strengthen project execution
capabilities of all NESIC

Strengthen project
management resources.

17© NEC Networks & System Integration Corporation 2019

From 850 people to 1,000

Acceleration of Innovations in Our Own Work-Style

Further innovation of EmpoweredOffice◆Verification of DX and cutting-edge technologies◆Challenge for possibilities of brand new working style
Office realignment
Distributed offices
by function

DX-armed
Process &practice, collaboration institutional reforms

Time, loss
Productivity

Costs

Satisfaction

Creating new businesses through practicalimplementation and collaboration
18© NEC Networks & System Integration Corporation 2019

Office Realignment (Function Distribution, Multi-Location)
Customers¥2 bnStartups,etc.

(FY2020/3)

Innovation Base

Taking on thechallenge forinnovation（Nihonbashi)

Creating new businessand promoting collaboration

Carrying out business activities with new processes
Space for collaboration with customers

Service BaseStrengthening
technologicaland quality capabilities
and developing
human resources torespondto the needs of thetimes

Technical Base

(MSC, sDOC / Kansai sDOC）(Shin-Kawasaki R&D Center)

Promoting support service businesses
Business promotion functions
Service platforms such as nTOC, SOC and sDOC

Cultivating Engineers /Evaluation and Verification

Education / Training / Development / Evaluation

Business Base

(Iidabashi head office)Deploying innovation in actual businessChange working styles
reforming rules
and processes

19Head Office and admi. functions,Company-wide hub functionsActivity Base(Around 10 locations in theTokyo metropolitan area)© NEC Networks & System Integration Corporation 2019

Telework / intensive work
expansion of zero-distance businesses
shared office businessLastly

NESIC × Digital × 5G
Business innovation
services

DX platform
Cloud shift and cloud SI(Self practice and modeling)
5G migration & network virtualization
Local 5G (5G of private networks)

5G infrastructure
21© NEC Networks & System Integration Corporation 2019

Automization and BPOof operation

Toward“ Communication services”orchestrator

Digitalsolutions

Nationwide TechnologicalBusinessbusinesscreation
capabilities
capabilities & credibility capabilities

To the Next Stage of NESIC▌ Based on the technology and expertise cultivated over many years,
we will continue to evolve into the NESIC of a new era.

Communication Service

2020s onwards Orchestrator

NESIC 5.0
2010s

Solution Provider
NESIC 4.0

1990s

System Integrator
NESIC 3.0

1960s
1953
22

Overseas Infrastructure
Construction
NESIC 2.0

Founding:
Telecommunication
Construction
NESIC 1.0© NEC Networks & System Integration Corporation 2019

Cautionary Statement
Forecasts and targets of results mentioned in this document are future
estimates and are thus inclusive of risks and uncertain factors since they are
not based on definite facts. Please be aware that a variety of factors could
cause actual results to differ significantly from those projected. The major
factors affecting actual results include the economic climate and social trends
surrounding the business of this Company’s group, consumer trends vis-a-vis
systems and services provided by this Company’s group, as well as pressure
to lower prices and ability to cope with the market in response to intensifiedcompetition.
Factors affecting results are not limited to the ones mentioned above.
* From FY2020/3 business segments will be changed due toreorganization on April 1, 2019. The new segment figures shown inthis presentation (FY2019/3 and FY2020/3 forecasts) are numbers
for reference by rough reclassification

23© NEC Networks & System Integration Corporation 2019

NEC Networks & System Integration Corporationis committed to increasing customer value byredesigning future communications from the user’s
perspective.

nesic
24

© NEC Networks & System Integration Corporation 2019

Searchhttps://www.nesic.co.jp/english/index.html

25© NEC Networks & System Integration Corporation 2019