Financial Results for the First 9 Months (1Q-3Q)
Fiscal Year Ending March 2024
January 30, 2024
Hiroyuki Sekizawa, Senior Vice President & CFO
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2024

9M FY2024/3 Summary¥ Bn.
9M
FY2023/3

ChangeOrders received

250.0

269.9

+8%

Net sales

221.9

249.4

+12%

Gross profit

43.5

46.7

+3.1

(to sales)(19.6%)(18.7%)(-0.9pt)

SG&A

32.4

34.2-1.8

Operating income

11.2

12.5

+1.3

(to sales)(5.0%)(5.0%)(0.0pt)6.1

7.7+1.6(2.8%)(3.1%)(+0.3pt)

Net income
attributable to owners of the parent(to sales)

19M
FY2024/3

Free cash flows-2.3-0.7+1.6

Orders backlog

195.0

222.5

+14%

© NEC Networks & System Integration Corporation 2024

Both sales and incomes increased
Good progress to the forecast

Orders received:⚫ Though telecom. carriers’ severe capex control continued,
orders from manufacturing and governments/public
utility sectors drove the expansion+ Large PJs acquired in 1Q(a product PJ for governments & a overseas network infra. PJ)

Net sales:⚫ Highly expanded with sales from orders backlog+ A large product PJ was recorded as sales in 3Q

Operating income:⚫ Increased with SG&A up for the future growth⚫ Accelerated improvement in earning capacity according tosales growth (see P.2)

Operating Income Analysis
Accelerated improvement in earning capacity according to sales growth(1Q:-0.8

2Q:+0.7

3Q:+1.7)

9M

3Q
Factors in
FY23/3-2.0¥ Bn.

Factors in
FY23/3

Earning capacity+1.7

Earning capacity+1.6-0.3

SG&A

6.5

(8.2%)
4.5(5.7%)

Specialfactors-2.0*(ESS)
Reversal ofallowances for a
Myanmar PJ

GPexcl. special
factors+2.0© NEC Networks & System Integration Corporation 2024

excl. special
factors6.2(6.6%)

11.2(5.0%)

DXS： +0.8
NWS： -0.1
ESS： +1.3

3Q
FY23/32GP

SG&A-0.3

3Q
FY24/39M
FY23/3Specialfactors+3.4※(ESS)
Impact of a
Myanmar PJ
and a Thai PJ

DXS： +2.7
NWS： -0.7
ESS： +1.2

-0.3

-1.8

12.5(5.0%)

9M
FY24/3

9M FY2024/3 Orders Received/Net Sales by Business Model*Contact center business of a subsidiary (Q&A Corp.)

Orders: Service orders suffered from decreased Covid-19 special orders* and telecom carrier biz.
SI/Construction orders highly expanded (robust manufacturing and public sectors and large orders)
Sales: Full-swing contribution of backlog sales. A large product PJ sales also contributed in 3Q sales.
Service sales excluding above impacts (Covid 19 & telecom carriers) steadily increasing

Orders received
¥ Bn.

250.0

＋8％

269.9

+12％

249.4

132.3

+24％

163.5

-4％
** (+5%)

85.9

221.9

SI/construction

168.8＋16％

195.3

Services

81.2-8％** (+2%)

74.6

89.6

9M
**Growth rate of service businessexcluding Q&A Corp.
FY24/39M
FY23/39M
FY23/33Net sales© NEC Networks & System Integration Corporation 2024

and telecom. carrier biz of NWS

9M
FY24/3

※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

9M FY2024/3 Orders Received by Segment¥ Bn.

( ) : 3Q growth rate

243.5
DXS

87.8

NWS

250.0

269.9

＋3%

89.5

61.6-3%（+15％）⚫ Strategic areas such as workstyle DX andsecurities expanded• A subsidiary* decreased due to absence of Covid-19
related demand (-2.5) (3Q impact decreased)*Q&A Corporation▐ Network Solutions (NWS)⚫ Though telecom carrier related biz dropped,social infra biz** and new banknote related bizof a manufacturing subsidiary*** increased**Space/national security, submarine and broadcast biz***NEC Magnus Communications, Ltd.

106.6

ESS

91.2

92.6

Others

3.4

6.2

11.5

9M
FY22/39M
FY23/39M
FY24/3

4(＋1％)

92.2 （+12％）

59.5
61.1+8%▐ DX Solutions (DXS)© NEC Networks & System Integration Corporation 2024

+15%（-20％）▐ Environmental & Social Solutions (ESS)⚫ Domestic construction biz such as road ICTand overseas biz increased⚫ Acquired large orders in 1Q• 3Q orders decreased due to reactional impact ofa large PJ (-5.5) in the previous 3Q

※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

9M FY2024/3 Net Sales by Segment¥ Bn.

( ) : 3Q growth rate

218.8

221.9

+12%
249.4 (＋19％)
89.3

DXS

77.7

NWS57.3（+8％）

94.5

+17%

55.5

80.6

Others

4.5

5.6

6.2

9M
FY23/39M
FY24/3© NEC Networks & System Integration Corporation 2024

+7%

59.5

79.35（+7％）

80.2

ESS

9M
FY22/3＋11%（+37％）▐ DX Solutions (DXS)⚫ Both of strategic areas and existing areasincreased• A subsidiary decreased due to absence of Covid-19
related demand (-2.5) (3Q impact decreased)▐ Network Solutions (NWS)⚫ Telecom carrier related biz was flat yoy
Social infra biz and new banknote related bizof a manufacturing subsidiary increased▐ Environmental & Social Solutions (ESS)⚫ Domestic construction biz such as road ICT
increased⚫ A large product PJ acquired in 1Q wasrecorded as sales (+7.5) in 3Q

9M FY2024/3 Operating Income by Segment
¥ Bn.

12.5

(%: to sales)

12.2(5.6％)

DXS

8.9(11.4％)

NWS

6.3
(11.0％)

3.2

ESS(4.0％)

Others/Elimination

-6.2

9M
FY22/3
6

11.2

+1.3

(5.0％)(0.0pt)10.0+1.8(5.0％)

8.2(11.2％)(+1.0pt)(10.2％)

5.6+0.1

5.4(9.4％)(-0.4pt)

5.0

6.1+1.1(9.8％)(6.2％)(6.5％)(+0.3pt)▐ DX Solutions (DXS)⚫ Operating income substantially increased thanks
to sales increase and GPM improvement• Growth in strategic areas such as workstyle DXdrove the improvement▐ Network Solutions (NWS)⚫ Sales increase and efficient SG&A made up
with the GPM down

▐ Environmental & Social Solutions (ESS)⚫ Sales expansion lead the income increase

-7.5

9M
FY23/3© NEC Networks & System Integration Corporation 2024

-9.2

9M
FY24/3-1.8▐ Others/Elimination⚫ ERP renewal and personnel costs increased※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

Gross Margin by Segment
9 Months
FY23/3

FY24/3

3QChange

FY23/3

FY24/3

Change

20.8%

21.9%

+1.1pt

23.7%

21.3%

-2.4pt

24.3%

16.0%

-8.3pt- Effect of increased sales (decreased fixed cost ratio)

DXS

21.1%

21.9%

+0.8pt - Improved sales mix by high value-added services
expansion-Worsened sales mix

NWS

22.8%

20.2%

-2.6pt (high profit business to telecom. Carriers decreased,product business preceding SI bisuness increased)

ESS

17.3%

15.7%

-1.6pt -Impact of a large product project(+0.7pt)

Companytotal

19.6%

18.7%

-0.9pt

22.3%

18.8%

-3.5pt(+0.1pt)*Excluding impact of reversal of allowances for a Myanmar PJ in 3Q/23.3 and a large product PJ
7© NEC Networks & System Integration Corporation 2024

Situation in Network Solution Business
Expanding business by restructuring corresponding to our assumption thatmega-carriers’ severe capex control will be continued and by growth of social
infra. business

At present

Going forward⚫ Severe capex control by mega-carriers⚫ Despite of severe capex control, wewill improve the profitability by effectof the restructuring

Additional restructuring⚫ Expansion of NCC biz⚫ Focus on social infra. biz
but full-swing expansion
will be since the next year

Product biz
at first(Worsenedsales mix)

⚫ New banknote related demand⚫ Further cultivation of NCC⚫ Full-fledged developmentof social infra. Biz.

8(Improvedsales mix)

(leveraging enhanced resources)⚫ New banknote demand remains※NCC：Communication service providers other than 4 mega carriers, such as electric power group carriers and ISPs
© NEC Networks & System Integration Corporation 2024

SI areaexpansion

*Forecasts as at January 30, 2024

FY2024/3 Forecasts¥ Bn.
FY24/3

actualforecasts Change

Orders received

356.0

370+4%Net sales

320.8

350+9%

Operating income

22.8

24.0+1.2(to sales)(7.1%)(6.9%) -0.2pt

Net income

13.8

14.0(4.3%)(4.0%) -0.3pt

attributable to owners of the(to sales)

9FY23/3© NEC Networks & System Integration Corporation 2024

+0.2

Based on good 9M results
even with difference by segment,
we challenge further improvement

Segment forecasts were adjusted considering
the progress (see p.10)

*Forecasts as at January 30, 2024

FY2024/3 Forecasts by Segment
Orders received¥ Bn.

DXSNet sales

Operating income

YoY

370±０ 370

+4%

130

130+6%

YoY

350±0350

24.0 ±0.0+9%(6.9%)

15.0DXS

125

125+9%85

ESS147

Others8Previous
Forecast

10-580147+5-13%+11%

13
Revisedforecast© NEC Networks & System Integration Corporation 2024

NWS82

82

ESS135135

Others88Previous
Forecast

Revisedforecast+4%+13%10.0-1.012.0+0.5(12.2%)

24.0 ＋1.2(6.9%)
15.5＋2.3(12.4%)(12.0%)DXS
NWS+0.5

YoY

9.0-0.8

12.5＋1.8(11.0%)

NWS(9.3%)

ESS(8.9%)

Others/Elimination-13.0-13.0

Previous
Forecast

Revisedforecast-2.1

About Supplementary Data

Please see our supplementary data sheet for- Complementary data
(Orders backlog, by-business type and by-market data)- Historical P/L, B/S, C/F- Segment data (incl. old segment)
https://www.nesic.co.jp/english/ir/library/2024.html
11© NEC Networks & System Integration Corporation 2024

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 avariety 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 businessof this Company’s group, consumer trends vis-a-vis systems and services provided by this Company’sgroup, 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.
Some information for reference such as impact of special factors is calculated and shown in roundnumbers.
There was segment change in April 2022. Segment information for the FY 2022/3 has beenrecalculated to reflect the change in the content of business segments.

12© NEC Networks & System Integration Corporation 2024

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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© NEC Networks & System Integration Corporation 2024

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