Financial Results for the
1H ending March 2021
October 30, 2020
Yushi USHIJIMA, President
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)
1© NEC Networks & System Integration Corporation 2020

AgendaI. Results for 1H FY2021/3
II. Forecasts for FY2021/3
III. Progress of Measuresfor “Beyond Borders 2021”(Medium-Term Management Plan)

AgendaI. Results for 1H FY2021/3
II. Forecasts for FY2021/3
III. Progress of Measuresfor “Beyond Borders 2021”(Medium-Term Management Plan)

1H FY2021/3 Summary(¥ Bn.)
1HFY2020/3

1H
FY2021/3

Change1H Forecasts
as at Jul.30

Orders received

151.7

177.9

+17%

156

Net sales

136.3

151.2

+11%

142(Gross margin)

16.5%

16.6%

+0.1ptOperating income

4.4

6.7+2.4

4.5(to sales)(3.2%)(4.5%)+1.3pt

(3.2%)

Extraordinary
income and loss

-2.2-0.5+1.7-

Net income

2.9

4.0

+1.1

3.0

(to sales)(2.1%)(2.6%)+0.5pt

(2.1%)

Free cash flows

10.8

14.4

+3.6

attributable to owners of the parent

4© NEC Networks & System Integration Corporation 2020-▐

Both sales and profit
increased, significantlysurpassing forecasts.
 GIGA school-related projects led anincrease in orders.
 Profit rose significantly, thanks tosales expansion based onstrengthened business capability- These earnings not only offset anincrease in growth expenses and thenegative impact of COVID-19, but also
further exceeded the forecasts.

1H/FY2021/3 Orders Received by Segment(¥Bn.)

177.9
146.7

151.7
71.3

DSL

NWI

ESS
Others

53.5

41.8

47.6
3.8
1H
19/3

5+17%+29%

55.4

45.3

46.6
4.4

1H
20/3

▐ Digital Solutions (DSL)
Large GIGA school projects received by a subsidiarydrove an increase in orders.
 DX-related: Progress surpassed expectations.
* Increased twice year on year A slowdown in corporate investments becameapparent.
▐ Network Infra. (NWI)
47.6

54.3

+5%+17%

4.7

1H
21/3

© NEC Networks & System Integration Corporation 2020

The telecommunication are expanded.
- KNSI and a large submarine seismometers
project acquired in 1Q▐ Engineering & SupportServices (ESS)Regional GIGA school projects led the growth.

※Segment information FY19/3 & FY20/3 has been reclassifiedto reflect the inter-segment business transfer in April 2020.

1H/FY2021/3 Net Sales by Segment(¥Bn.)

151.2

+11%

136.3



122.5
56.7
DSL▐ Digital Solutions (DSL)
+7%▐ Network Infra. (NWI)

53.2

47.6



38.1
NWI

34.1

ESS

37.7

Others

3.1
1H
19/3

6+7%

35.5

41.6

51.6

6.0

4.9

1H
20/3

Workstyle innovation-related businesses continuedto grow.
GIGA school projects contributed to sales.

+24%

1H
21/3

© NEC Networks & System Integration Corporation 2020

The telecommunication area expanded primarily
due to KNSI orders.

▐ Engineering & SupportServices (ESS)Regional GIGA school orders and mega-solar
projects contributed to sales.

※Segment information FY19/3 & FY20/3 has been reclassified
to reflect the inter-segment business transfer in April 2020.

1H/FY2021/3 Operating Income by Segment(¥Bn.)

6.7+2.4(4.5％) (+1.3pt)

4.4

 Profit increased due to higher sales.

(3.2％)

2.6

5.3(2.1%)

4.8
DSL
NWI
ESS
Others/Elimination

7

3.6(7.5%)

1.0(2.9%)

2.2(8.9%)

1.8(5.2%)▐ Digital Solutions (DSL)+0.5(9.3%) (+0.4pt)

2.2+0.4(5.8%) (+0.6pt)

3.5(5.9%)

2.2(5.3%)(6.7%)

-4.2

-4.4

-4.2

1H
19/3

1H
20/3

1H
21/3

+1.3
(+1.4pt)+0.2© NEC Networks & System Integration Corporation 2020

▐ Network Infra. (NWI)
 Profit increased due to growth in sales
and the effect of reorganization.
*Resource efficiency improvement, enhanced PJ
management, etc.

▐ Engineering & SupportServices (ESS) Profit increased because of higher sales anda decrease in provision for loss forunprofitable projects※Segment information FY19/3 & FY20/3 has been reclassifiedto reflect the inter-segment business transfer in April 2020.

AgendaI. Results for 1H FY2021/3
II. Forecasts for FY2021/3
III. Progress of Measuresfor “Beyond Borders 2021”(Medium-Term Management Plan)FY2021/3 Forecasts（Forecasts as at October 29, 2020）(¥ Bn.)
FY20/3
Actual

FY21/3
Forecast

ChangeJuly 30
forecast▐

The full-year forecasts havebeen revised upward.
 Efforts will be made to post sales
for GIGA school orders received in
the first half and expand sales totelecom carriers.

Diff.

Orders received305.0

320+5％

310+10Net sales

303.6

327

+8%

312

＋15

Operating income

16.2

19.0＋2.8

18.0＋1.0(to sales)(5.4%)(5.8%)+0.4pt

(5.8%)

0.0pt

Net income

9.4

11.3

+1.9

10.5

＋0.8

(3.1%)(3.5%)+0.4pt

(3.4%)+0.1ptattributable to owners of the parent(to sales)

9© NEC Networks & System Integration Corporation 2020 There is concern over the growing
impact of the prolonged COVID-19
pandemic.

FY2021/3 Forecasts by Segment（Forecasts as at October 29, 2020）

Net Sales（¥ Bn.）

Operating Income

+15
303.6

312

Change327（¥ Bn.）( ): to sales

+8%

DSL

115+5120+1.0 19.0(5.8%)+2.8

12.0 +0.2 12.2+58.4
8.0 +0.4 (9.5%)＋3

9.5 +0.2 9.7+3.0-10.3-10-11.5 +0.2 -11.3-1.0

FY20/3

FY21/3期

18.0

16.2

112.8

Change(5.8%)(5.4%)+6%
DSL

11.7(10.4%)(10.2%)(10.3%)

NWI

83.1

86+288+6%

NWI

Others97.4

101+9110

10.3

10-1

9

FY20/3

FY21/3期
July 30
forecast

10(9.3%)6.7(6.9%)(9.4%)(9.8%)ESSESS

8.1+13%

FY21/3(revised)© NEC Networks & System Integration Corporation 2020

Others/Elimination

July 30
forecast(8.8%)

FY21/3(revised)

Dividend PlanDividend
per share（¥）

InterimYear-end（Forecasts as at October 29, 2020）

28.0
26.0
24.7
24.0

27.3

▐ Planning dividend
increase for the 14 thyear un a row

14.0(forecast)

4.7

14.0

 Interim:¥14 per share as planned
 Year-end:planning ¥14 per share as theinitial plan
* The results for the fiscal years ended March 2020 andprior thereto presented below reflect the three-for-one
stock split conducted on June 1, 2020.

FY07/311

FY21/3・・・・© NEC Networks & System Integration Corporation 2020

AgendaI. Results for 1H FY2021/3
II. Forecasts for FY2021/3
III. Progress of Measuresfor “Beyond Borders 2021”(Medium-Term Management Plan)Social Value Creation Model of NESIC
An inclusive and sustainable society
created through communications

Vision for society

Value to society Create environments in which everyone can work more vigorously Develop pleasant and plentiful communities with cutting-edge technologies
 Provide robust services that underpin safety and security in evolving society

DigitalFocusing areas×5G

Value creation
model
Self-implementation

NESIC

HW/SW

Nation-widecapability

NetworkCloud

13

Co-creation withpartners

Cutting-edge
technology© NEC Networks & System Integration Corporation 2020

Technology& credibility

Start-ups
Biz creation
capability
Customes

ICT/facility
partners

Progress in Growth Strategy: Digital▐ Implement & propose “New Normal” work-style

Core stance

Evolution of value to beprovided

Shift in business models

Progress in technologies

Work-style innovation
Evolution of businesses

Expanding a service
provision-type model

Strengthening of the DX
domain that supportsbusinesses

Study new normal-oriented
workstyles(New normal declaration)

Sales of service biz+12%

DX OrdersThree folds- Stamp-less system, personnel
system revisions, etc.

Progress
14

Accelerate proposal-making on
distributed work
- Distributed work was introduced
by a client

FY20/3
1H

FY21/3
1H*DSL biz(un-organic impact adjusted )As planned© NEC Networks & System Integration Corporation 2020

As planned

FY20/3
1H

FY21/3
1H- Number of new customers
increased significantly

Solid progressProgress in Growth Strategy: Digital (Topics)▐ Further cultivating DX clients
approx.

Actions

10,0008 folds

 EnterpriseRapid increase・Multi-cloud services (DX work shift)- Medium-large: DX consultation- Small-medium: Inside sales

新規

3 folds

・COVID-19 countermeasure services- Remote/Non-contact/full-automation…
既存

as at
20/3
end of15

20/6

 Education/local gov’t

20/9*DX introduced clients (accumulated)© NEC Networks & System Integration Corporation 2020・Digitalization services- Online lecture/digital gov’t offices/Stamp-lessProgress in Growth Strategy: 5G▐ Business for telecom carriers steadily increased
preparing for full-scale investments in 5G
Deepen businesses with telecomcarriersCore stanceProgress
16

Increase market share in the basestation business

Enhance efforts because it is an area inwhich full-layer system integration
capabilities are utilized.
Strengthened demonstration experiments
and proposal-making initiatives

KNSI’s sales
DoubleSteadily market share
increase
Business expansion tocore-network area
FY20/3
1HLocal 5G

FY21/3
1H

As planned© NEC Networks & System Integration Corporation 2020

- Joint experiment with Mitsui Fudosan.
Verifying the use of offices withan eye on the 5G era.
- Accelerating alliances mainly with cableoperators to vitalize communities.

As planned

Progress in Growth Strategy: 5G (Topics)▐ Accelerate measures for practical use of local 5G～From base technology enforcement to “Digital x 5G” services

 Inaugurate 5G Lab.
(Nov. 6)

1st in Japan*

 Office building demo test
(From Dec. with Mitsui Fudosan)

Open for experimental tests
Speedy service development by co-creation

Novel workstyle creation/smart-building（XR※-usage, PC-less office, next-generation building mgmt)※Integrating tech. of real & virtual worlds such as VR, AR

5G tech. training17“Shield-room”
Validation environment
open to the partners© NEC Networks & System Integration Corporation 2020

Virtual work-place

AI、robotics usage*Demonstration test using S/A local 5G (4.7GHz) in a large office buildingLastly

A year of preparation to make a leap.

Ready to Jump
Building a foundation for further growth while
prioritizing our contribution to social challenges.

18© NEC Networks & System Integration Corporation 2020

APPENDIX

19© NEC Networks & System Integration Corporation 2020

FY2021/3 Forecasts by Segment（Forecasts as at October 29, 2020）

Orders ReceivedChange（¥ Bn.）

305.0310 +10320+5%+9%

DSL

115.2

119+7126

NWI

87.7

91+39492.0

89+392

10.0

11F20/3

FY21/3

ESS

その他

July 30
forecast20© NEC Networks & System Integration Corporation 2020

-38
FY21/3(revised)+7%0%

1H FY2021/3 (End of Sep. 2020) Balance Sheet（¥ Bn.）End of 20/3
58.3
113.1
13.2
7.3

End of 20/9
70.7
100.8
12.7
7.4

Noncurrent Assets

191.8
38.4

191.6
39.3

-0.3
0.9

Assets

230.2

230.8

0.6

Others

43.1
8.7
64.9

43.9
9.0
62.5

0.8
0.3
-2.4

Liabilities

116.7

115.4-1.3

114.5

116.4

1.9

-4.1

-4.1

0.0

3.1

3.1

-0.1

Liabilities & Net Assets

113.5
230.2

115.4
230.8

1.9
0.6

Owner's Equity Ratio

47.9%

48.7%

+0.8ptCash and cash equivalents
Notes & accounts receivable
Inventories
OthersCurrent Assets

Notes and accounts payable
Loans

Shareholders' equity
Accumulated othercomprehensive income
Non-controlling interests

Net Assets

21© NEC Networks & System Integration Corporation 2020

Diff.

12.4
-12.3
-0.4
0.1

1H FY2021/3 Dash Flows（¥ Bn.）
Operating CF

+19.1

+3.6

+13.3

-8.5

+14.2-5.8+14.1

-1.2

+17.1

Investing CF-1.2-1.5-1.6-1.2-2.7-2.9-3.3-3.4-2.7

17.9

11.7

11.5

14.4

10.8

FCF

2.1

80

-4.6

-8.7

-9.7

60
40
200

51.7 51.4 61.0 49.2 58.8 47.9 56.4 49.6 61.7
1H

2H

FY17/3221H

2H

FY18/3© NEC Networks & System Integration Corporation 2020

1H
FY19/32H

1H

2H

FY20/3

1H
FY21/3

Net cash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.
There were inter-segment transfer of some businesses and other changes
in April 2020. Segment information for the FY 2019/3 and FY 2020/3 hasbeen recalculated to reflect the change in the content of business segments.
(FY2019/3 figures are un-audited)23© NEC Networks & System Integration Corporation 2020

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

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25© NEC Networks & System Integration Corporation 2020