Environmental & Social Solution Business
June 12, 2024
Yuichi Nishida, Senior Vice President
NEC Networks & System Integration Corporation（TSE: NESIC, 1973)© NEC Networks & System Integration Corporation 2024

Self Introduction

Yuichi Nishida
顔写真（胸から上）

Senior Vice President andExecutive General Manager,
Environmental and Social Solutions BU
Career summary⚫ Joined the Company in 1986
Engaged mainly in the areas of SE and SI/constructionin the Social Infrastructure business⚫ 2016 General Manager of West Japan Systems Business
Division, Social Infrastructure Business Unit
⚫ 2020 Executive Officer⚫ Assumed his current position in 2024

2

© NEC Networks & System Integration Corporation 2024

Overview of Environmental & Social Solutions Business
Operating businesses ranging from design and systems integration to support
for social public infrastructure in Japan and beyond
Main services⚫ Networks (construction and maintenance)⚫ Safety (disaster prevention and disaster measures)⚫ Energy solutions⚫ Smart buildings

Main customers
Fire and disaster prevention

Electric power andnew common carrier (NCC)

Governments

CATV

Local governments

General companies

Business strengths and characteristics⚫ Customer Base (approx. 4,000 companies)⚫ Nationwide construction and support service system⚫ Ability to propose solutions that combine business expertise with companywide assets
3© NEC Networks & System Integration Corporation 2024

* Forecast figures are as of April 26, 2024

Performance Progress(¥ Bn.)
* The figure in parentheses ( ) indicates the rate of growth excluding alarge product project for a government agency (¥7.5) in the FY24/3.

160+2%Net sales
Focus120
areas

119.2
8151035.0✓ In DX/new areas (community development and green), there weredelays in preparing for expansion.

2040

30.0100

25.08020.06015.040Operatingincome

10.7

12.6

16.0

+3.45.0Review

Initial0

FY23/3

FY24/3

FY25/3(Result)(Result)(Forecast)© NEC Networks & System Integration Corporation 2024

✓ In existing areas, steady progress was made in initiatives to achieve
more sophisticated construction and maintenance of road ICT andother infrastructure.

FY2025/3
10.0

204Achievements and areas to improve up to the FY2024/3

140(+8%)*

126.0

140

40.00.0✓ Enhancing profit creation capability by improving the sales mix- Focusing on areas where we have strengths- Sophistication and enhancement of added value in existing areas

FY2025/3 Basic Policy
Enhancing profit
creation capability

Having them lead to growth in
the next fiscal year and onward

Shift to advanced
businessfoundations▷ Enhancing added value by expanding the construction + SI areas andcustomer-focused services▷ Tapping into demand for renewal of the fire-fighting network

Actions towards agreen society▷ Improving the ability to provide services by evolving in-house expertise in our
self-implementation of decarbonization▷ Reinforcing the revenue base by expanding initiatives in service businesses inaddition to the EPC businessPromoting
communitydevelopment

5- Focusing on areas where we have strengths- Sophistication and enhancement of added
value in existing areas▷ Focusing on workstyle innovation at work sites that support public infrastructure– Creating a foothold for promoting community development, from work-site innovation to improvement ofuser-friendliness –© NEC Networks & System Integration Corporation 2024

Strengthening of Business Foundations✓

Increasing businesses for large accounts by executing businesses steadily in existing areas

Initiatives to enhance businessexpansion capability
Risk assessment

Constructionandmaintenancebusiness

Stricter risk
assessment

Effective
allocationof project staff

Increasing businesses forlarge accounts* by 38%
mainly in the public sector

Initiatives to improve businessefficiency
Processes and evidence

Company-widestandardization

6Cooperation within the Group
Building local schemes© NEC Networks & System Integration Corporation 2024

Design, construction,and maintenance

Visualizationof projects

Data utilization

Continuous
improvement

60 billion

83 billion(FY24/3)(FY22/3)* Definition of large accounts:
Customers with a track record of continuously placing orders with NESIC for threeyears from which average sales over the three years are at or above a certain
monetary amountGrowth in Existing Areas Achieved by Refining the Base✓

Improving profitability through further sophistication and the enhancement of added value
Backlogs (consolidated)

+5%

90.7

95.6

Construction business✓ Improving profitability by expanding the SI area inaddition to the construction area
✓ Providing optimal solutions by taking advantage of ourmulti-vendor compatibility as our strength

Maintenance business

Improvingbacklog GPM✓ Enhancing Group-wide service development✓ Expanding recurring businesses by enhancing customerfocused LCM services
End of March
2023
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End of March2024© NEC Networks & System Integration Corporation 2024

Reference: Fire-fighting Projects
Demand generated due to the expansion of the area served by each fire-fighting command center +renewal of fire and ambulance radio systems (digitalized around 2015). The market (deliveries) is expected to peakaround FY26/3. This fiscal year, we aim to receive 1.5 to 2.0 times more orders than in the previous fiscal year.
Size of the market related to fire-fighting projects

Our strengths

Our target for thisfiscal year

Procurement

Delivery

Order received
Net sales⚫ Product appeal we have as the NEC Group⚫ Our SI capability with product knowledge⚫ Relationship of trust with customers based on ourtrack record and experience
Initiative

1.5 to 2times⚫ Responding to the expanding market- Reinforcing the business structure
Appropriate allocation and development of resources
Securing business partners and finding new ones

⚫ Responding to the market after it peaks out
24/3

25/3
(Plan)

FY

8

23/3

24/3

25/3

26/3

27/3

28/3

© NEC Networks & System Integration Corporation 2024

- Expanding recurring businesses with existing services +additional value
DX solutions based on fire-fighting data analysis
Staff work-style innovation and DX of on-site activities

Step up Actions towards a Green Society✓ Enhancing the ability to provide services by evolving in-house expertise in our self-implementation ofdecarbonization✓ Reinforcing the revenue base by expanding initiatives in service businesses in addition to the EPC businessInitiatives taken in the period
up to the previous fiscal year
Renewable energy

Offering value tocustomers

Scope 1, 2(Compared with FY20/3levels)

9

Bolstering the revenue baseEnhancing initiatives in theservice businesses

Developing a value provision model• Full-scale launch of the on-site PPA
service business

Solutions for power saving measures• Transforming power-saving solutions
into a cloud-based service business• Demonstration of visualization of theenvironment at the Shibaura head office(Office environment + Digital twins)• Greenhouse gas emission reduction
Result: 66％ (FY24/3)© NEC Networks & System Integration Corporation 2024

(to FY28/3)

Establishing revenue bases andachieving further growth• Build self-consumption solar power
generation systems• Expanding the lineup of storage
batteries• Commencement of provision of on-site
PPA service to NESIC advanced
aquaculture, Inc.

• Joint testing of an immersion-coolingsystem with major companies

Our actions(from FY25/3)• Starting to provide maintenanceservices for immersion-cooled servers
and establishing a system for providing
one-stop immersion-cooling solutions• Reorganization of the business structure
related to the environment(Concentration of approx. 200 full-time staff
members as resources)• Reduction target: 89% (FY25/3)• Supporting customers’ businesses on
an ongoing basis by providing optimal
renewable energy models (EPC/PPA)• Promoting the appeal of streamliningof customers’ management operations
with a service of automating powersaving• Strengthening and developing servicerelated human resources(Dummy)• Reduction target: Virtually 100% (FY31/3)

Reference: Examples of Joint Testing of Power-saving Solutions✓ We have accumulated expertise ahead of the market through demonstration tests ofcontainer-type immersion-cooled data centers.
✓ Aiming to introduce them to, and expand them in, the data center industry
Main joint tests with major companies• Edge computing for connected cars
(Telecom carrier and automaker)• Testing reduction of electricity bills with air-cooling andimmersion-cooling methods(Electricity company)

One-stop services on immersion-cooling solutions

POINT
01

POINT
02

Many customers have requested us to show them the actual equipment.
We are taking actions, aiming for business collaborations for actual introduction.

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POINT
03

Construction of immersion-cooling systems- Both facilities and IT equipment are covered.
- Design and construction of optimal equipment
tailored to purposes

Operation monitoring- Monitoring and control of facilities and equipment- Integrated monitoring of immersion-cooled servers
and network equipment

Maintenance service- Maintenance of facilities and equipment- Maintenance of immersion-cooled servers andnetwork equipment

Promotion of Community Development Project✓ Contributing to developing safe, secure communities by adding DX to existing business areas✓ Focusing on workstyle innovation at work sites that support public infrastructure
Initiatives taken in the period
up to the previous fiscal year

[Example] Adding digital technologies to existing infrastructure• Achieving labor savings in maintenance work for water infrastructure with a highhuman labor load (water leakage detection)

Building DX solutions with anunderstanding of customers
and work sites<Strengths>• A wealth of experience in implementing
on-site projects• Relationships with local governments(Sharing and ability to understandregional characteristics)

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Accelerating the Development of DX x Beyond 5G
Driving all businesses of the company with the synergy of ”DX x Beyond 5G (next-generationnetworks)” and “expertise in industries & social implementation capability in the public sector”
Example: Advanced high-resolution monitoring services for key facilities (visual AI x high-speed communication x construction)
Expertise inDX technologies and use of DX(workstyle innovation forenterprise)

DX Solutions
Business(DXS)

Next-generation networking
technologies with highquality and reliability
Expertise in the publicindustry /social
implementation capability

Network Solutions
Business(NWS)

Environmental & Social
Solutions Business(ESS)
Companywide businessfoundation
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(Foundation for nationwide support services)

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

nesic13© NEC Networks & System Integration Corporation 2024

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