Financial Results for theFirst 9 Months ending March 2022
January 31, 2022
Hiroyuki Sekizawa, Senior Vice President
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2022

9M FY2022/3 Summery(¥ Bn.)

9M

9M

FY2021/3

FY2022/3

ChangeOrders received

253.5

243.5

-4%

Net sales

233.5

218.8

-6%

Gross margin

17.8%

19.2%

+1.4ptOperating income

13.8

12.2

-1.6

(to sales)(5.9%)(5.6%)-0.3ptOrders:+11％, Sales:+8％

Net income

8.4

7.7

-0.7

(to sales)* Reactionary fall: GIGIA school & mega-solar of the previous year
and the impact of a subsidiary to have been unconsolidated(3.6%)(3.5%)-0.1ptFree cash flows

13.1

9.2

-3.9

Backlog

160.8

162.9

+1%

attributable to owners of the parent*Backlog increased by 15% yoy except for reactionary fall impacts
1

The reactionary fall of big PJs and temporary factors
such as SC/material shortage impacted on theresults although strategic businesses grew

© NEC Networks & System Integration Corporation 2022

 Orders/sales

Strategic businesses (DX/telecom) grewwith an impact of SC/material shortage
Except for impacts of reactionary fall* &SC/material shortage

 Profits

Profits decreased due to temporary
factors although sales mix & efficiency
improved（Temporary factors ）-Myanmar loss: ¥-1.8Bn.
SC/material shortage impact: ¥-1.7Bn.

Factor Analysis of YoY Change (Orders/Sales)
SC/material shortage in addition to the shift to service provision model
temporarily impacted although strategic areas expectedly expanded
Orders received（¥ Bn.）Net sales
Except for impacts ofreactionary fall* &SC/material shortage

253.5
GIGAschoolApprox.
- 29.0+11%

SC/material
shortage
Approx. -4.0
DX/telecom etc.
Approx.
+24.5

Except for impacts ofreactionary fall* &SC/material shortage

233.5

243.5

Mega-solar
Approx.
-10.0

(-4%)

Unconsolidated
affiliate*
Approx. -1.5

Unconsolidated
affiliate*
Approx. -1.5～～

2*Impact of a subsidiary that to have been
unconsolidated from 2Q FY2021/3

9M
FY21/3© NEC Networks & System Integration Corporation 2022

GIGAschool
Approx.
-11.0

9M
FY22/3～～～～9M
FY21/3+8%
DX/telecom etc.
Approx.
+16.5SC/materialshortage
Approx. -8.5

218.8(-6%)

9M
FY22/3～～

9M FY2022/3 Orders Received/Net Sales by Business Model
Business model is steadily changing
Orders received

Net sales（¥ Bn.）

253.5

SI/construction

Services

3

180.2

-12％

233.5

158.8

154.7

65％

71％

73.2

243.5

+16％

84.7

218.8
-14％

61％

66％

78.8

132.9

+9％

86.0

29％

35％

34％

39％

9M
FY21/39M
FY22/39M
FY21/39M
FY22/3© NEC Networks & System Integration Corporation 2022

Factor Analysis of YoY Change (Operating Income)
Income decreased due to temporary factors although business capability
enhancedProfitability
improvement(higher valueadded,efficiency-up,etc.) +1.6（¥ Bn.）

13.8(5.9%)

GIGA School
Approx. -1.0

SG&A
Approx.
-2.1
SC/material
shortage
Approx. -1.7

Sales increaseof DX/telecom
etc. +3.3

Myanmar loss
Approx. -1.8

GP+4.9～～4(Reactional fall ofGIGA School)-1.0
9M
FY21/3© NEC Networks & System Integration Corporation 2022

12.2(5.6％)(Enhanced biz capability)(Temporary factors)+2.8-3.5
9M
FY22/3～～

9M FY2022/3 Orders Received by Segment（¥ Bn.）

▐ Digital Solutions (DSL)
253.5
215.2
97.1

DSLNWI

243.5 (＋11％)
89.5

82.9

71.6

71.3

62.4

ESS

63.0

Others

7.0

7.5

3.4

9M
FY20/39M
FY21/39M
FY22/3577.4

 Decreased due to the impacts of GIGA school(-14.5) and un-consolidation of a subsidiary (-1.5)

-４%

79.3

-8%
（＋10％）

 DX/workstyle innovation-related businesses isstrong. DX for governments/ municipalities
expanded▐ Network Infrastructures (NWI)
 Business for telecom carriers expanded
Despite of large submarine seismometer order inprevious fiscal year(-3), orders kept same level-0%+3%▐ Engineering & Support Services (ESS)（＋32％）© NEC Networks & System Integration Corporation 2022

( ): excluding impacts ofreactionary fall* &SC/material shortage

 Construction biz (domestic & overseas) fully madeup for the reactionary fall of GIGA school (-14.5)
・domestic transport/traffic
overseas: additional order for petro plant network
in Saudi Arabia

9M FY2022/3 Net Sales by Segment（¥ Bn.）▐ Digital Solutions (DSL)
233.5
214.0

DSLNWI

83.8
80.7

56.0

60.4

218.8
79.5

(+8％)

-５%（-1％）Others

668.6

82.0

67.2

67.7

8.7

7.3

4.5

9M
FY20/39M
FY21/39M
FY22/3© NEC Networks & System Integration Corporation 2022

 Lead-time has been longer according to shift toservice-provision model▐ Network Infrastructures (NWI)
 Business for telecom carriers drove the growthwith an impact of SC/material shortage+11%（+15％）ESS Reactionary fall of GIGA school (-1.5) and unconsolidation of a subsidiary (-1.5) impacted-６%▐ Engineering & Support Services (ESS)-18%（＋19％）( ): excluding impacts ofreactionary fall* &SC/material shortage Decreased due to the SC/material shortage impact
in addition to reactional fall of GIGA school(-10.0) and mega-solar projects (-11.0)
 Domestic construction increased

9M FY2022/3 Operating Income by Segment(¥ Bn.)( ): to sales

13.8(5.9％)

8.2(3.8％)

4.0(7.2％)

ESS

3.5(5.1％)

Others/Elimination

7(-0.3pt)

8.9

+0.4
(+1.0pt)

4.7(7.7％)

NWI(5.6％)(11.2％)

7.8(9.6％)-1.6

8.5(10.2％)

DSL

12.2

7.0(8.6％)

5.3(7.8％)(+0.1pt)

4.4-2.6(6.6％)

-7.1

-6.4

-6.4

9M
FY20/39M
FY21/39M
FY22/3© NEC Networks & System Integration Corporation 2022+0.6(-2.0pt)▐ Digital Solutions (DSL) Due to progress of business model change,
profitability improved(to Service+SI provision model)▐ Network Infrastructures (NWI)
 Effect of sales increase and improved sales mix
led to profit growth despite of SC/materialshortage impact▐ Engineering & Support Services (ESS) There was an impact of SC/material shortage inaddition to loss of a Myanmar projectAbout Temporary ImpactsP&L: Approx. ¥-1.8Bn.
Myanmar
impactIn Myanmar, due to the political instability, costs for the execution of atelecommunication infrastructure construction project are estimated to soar
and we made an allowance

9M … Sales: Approx.-8.5 Bn. P&L: Approx.-1.7 Bn.
Full year forecast … Sales: Approx.-14.5 Bn. P&L: Approx.-3.0 Bn.
SC/material shortage
impact8countermeasure

Proposal/preparation of alternative products, change of project execution
process, and promotion of the shift to service provision modelfrom hardware SI model© NEC Networks & System Integration Corporation 2022

（Forecasts as at January 31, 2022）

9M FY2022/3 Full Year Forecasts(¥ Bn.)
FY21/3
ActualOrders received

Net sales

336.9
339.1

FY22/3
Forecast

335

Change-1％*(＋11％)

313-8%

Oct 29forecast

330

Diff.

+5320

-7*(＋10％)

Operating income

25.6

22.5

-3.1

26.0

-3.5

(to sales)(7.5%)(7.2%)-0.3pt

(8.1%)-0.9pt

Net income

15.7

14.5

-1.2

16.0

-1.5

(4.6%)(4.6%)

0.0pt(5.0%)-0.4ptattributable to owners of the parent(to sales)* Growth rate excepting for impacts of reactionary fall & SC/material shortage

9© NEC Networks & System Integration Corporation 2022

 Orders
Upward revision considering robust
market condition and good
progress in 9 months

 Sales/profits
Downward revision considering
SC/material shortage impacts andMyanmar loss in 3Q

（Forecasts as at January 31, 2022）

9M FY2022/3 Full Year Forecasts by Segment

Revised segment forecasts considering 9 months progressand SC/material shortage impact（¥ Bn.）

DSL

NWI
ESS
OthersOrders received

Net sale+5-70

330
123

102100
5FY22/3
previous

10+2-2335125100+6106-14

FY22/3
revised© NEC Networks & System Integration Corporation 2022

320DSLNWI
ESS
Others113

101

Operating income( )to sales

113

-30

26.0

313

(8.1％)

DSL
NWI

98

ESS
97
9
FY22/3previous

97
-40

5

FY22/3
revised

Others/elimination-3.5(7.2％)

13.5

13.5(11.9％)

11.0(11.9％)(10.9％)

-1.0

11.5

-2.5

(11.9％)

22.5

10.0

(10.2％)

9.0(9.3％)

-10.0

-10.0

FY22/3previous

FY22/3
revised（Forecast as at January 31, 2022)

Dividend（※予想値は、2021年1月29日現在のものです）

Dividend/share（¥）(Forecast)

38

35

InterimYear-end

26.0

27.3

(Forecast)

19

No change
in dividend plan
Considering on DOE
Stable shareholder return unsusceptible totemporary downturn

Planning dividend increase for the15th year in a row with ¥19/share for
year-end dividend
19

4.7* The results for the fiscal years ended March 2020 and prior thereto presented
below reflect the three-for-one stock split conducted on June 1, 2020.

FY07/3
11・・・・© NEC Networks & System Integration Corporation 2022

FY22/3

Topics: Support to TCFD Recommendation

Enhancing the information disclosurebased on the TCFD framework
targeting by July 2022
Strengthening the organization topromote the sustainability activities
and accelerate initiatives to realize “aninclusive and sustainable society
created through communications.”
12© NEC Networks & System Integration Corporation 2022

Other information
Please see the following materials for further information
https://www.nesic.co.jp/english/ir/library.html• Consolidated Financial Statements for the 3Q FY 2022/3
 C/F, P/L, C/F• Supplemental Material [902KB]
 Gross margin by segment
 Net sales by business model x segment
 Orders received & net sales by market
 Backlog by segmentetc.
13© NEC Networks & System Integration Corporation 2022

Cautionary Statement
Forecasts and targets of results mentioned in this document are future estimatesand are thus inclusive of risks and uncertain factors since they are not based on definitefacts. 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 theeconomic 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, aswell as pressure to lower prices and ability to cope with the market in response tointensified competition.
Factors affecting results are not limited to the ones mentioned above.
There were inter-segment transfer of some businesses and other changes in April
2020. Segment information for the FY 2020/3 has been recalculated to reflect thechange in the content of business segments.

14© NEC Networks & System Integration Corporation 2022

NEC Networks & System Integration Corporation will be committed to increasing
customer value by redesigning future communications from the user's perspective.

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