Financial Results for the 1Q
for the FY ending March 2024
July 28, 2023
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2023

1Q FY2024/3 Summary(¥ Bn.)
1Q
FY23/3

ChangeProgress was made in line withexpectations
Profit decreased due to higher SG&A
expensesOrders received

80.8

96.5

+19%

Net sales

67.6

71.7

+6%

Gross proft

12.1

12.5

+0.4 Topline:(to sales)

17.9%

17.5%

-0.4pt

SG&A

10.6

11.4

-0.8

Operating income

1.5

1.1-0.4(to sales)

2.2%

1.6%

-0.6pt

Net income

0.5

0.2

-0.3

(to sales)

0.7%0.3%-0.4pt

Free cash flows

14.6

18.5

+3.8

Orders backlog

179.2

225.7

+26%

attributable to owners of the parent

11Q
FY24/3© NEC Networks & System Integration Corporation 2023

⚫ Both orders received and net sales expanded- The strong performance continued, mainly inareas related to workstyle DX and social
infrastructure-Orders highly jumped gaining large projects
on top of the good situation above

Operating income:⚫ Despite higher net sales, rising SG&A expenses*
had an impact* Development expenses for new mission-critical systems, etc.

1Q FY2024/3 Orders Received/Net Sales by Business Model
SI / Construction: Strong growth in order in part due to large projects earned
Services: Mainly impacted by a fall in COVID-related demand at subsidiaries
Orders received

Net sales(¥ Bn.)

96.5
67.6

80.8
SI/construction

53.9

Services

26.9

+32％

-6％

1Q
FY23/3271.7© NEC Networks & System Integration Corporation 2023

71.1

25.4
1Q
FY24/3

37.9

+13％

29.7

-2％

1Q
FY23/3

42.6

29.0
1Q
FY24/3

1Q FY2024/3 Orders Received by Segment(¥ Bn.)

96.5
83.7

DXSNWS

29.9

21.0

80.7

27.2

+1%

21.2-2%

26.9

21.5
46.4

+56%

ESS

31.2

29.7

Others

1.6

2.7

1.8

1Q
FY22/3

1Q
FY23/3

1Q
FY24/3

3+19%© NEC Networks & System Integration Corporation 2023

▐ DX Solutions (DXS)⚫ Expansion in strategic areas including workstyle DX- Orders received by a subsidiary fell (-1.0) due todecreased COVID-related demand▐ Network Solutions (NWS)⚫

Growth in orders from social infrastructure fields*1 despite
decline in telecom carrier-related businesses that was inpart a reactional decline froma large project*2 in theprevious 1Q.
*1: Space, broadcasting, marine, etc.
*2: Local 5G-related▐ Environmental & SocialSolutions(ESS)⚫ Growth in orders in part due to large projects** Equipment procurement, overseas construction-related※Segment information FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

1Q FY2024/3 Net Sales by Segment(¥ Bn.)

DXS

67.7

67.6

24.8

24.7

71.7

+6%

▐ DX Solutions (DXS)⚫ Sales expanded in both strategic and existingareas, in part due to sales from order backlogs

27.8+12%▐ Network Solutions (NWS)
NWSESSOthers

4

17.4

16.5

18.1+10%⚫ Sales increased mainly in the social
infrastructure field▐ Environmental & Social
22.9

24.2

23.1

-5%

2.6

2.1

2.7

1Q
FY22/3

1Q
FY23/3

1Q
FY24/3© NEC Networks & System Integration Corporation 2023

Solutions(ESS)⚫ Impact of timing for the recording of sales
from orders backlog being weighted toward
2Q and beyond※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

1Q FY2024/3 Operating Income by Segment(¥ Bn.)

3.0(4.4％)

1.5(2.2％)▐ DX Solutions (DXS)

1.1-0.4(1.6％)(-0.6pt)

2.7+0.4(9.7％)(+0.5pt)⚫ Improvement thanks to streamlining of
SG&A expenses despite a lower GP margin*+0.2* Impact of decreased telecom carrier business andconcentration of lower-margin social infra. projects in 1Q

2.9DXS(11.7％)

2.3(9.2％)

NWS

1.4(8.1％)

ESS

0.5

Others/eliminations

1.0

1.2

0.4(6.6％)(6.3％)(2.3％)(1.6％)-1.9-2.2⚫ Off to a good start with improved GP margin

0.2(0.7％)(+0.3pt)-0.2(-0.9pt)

-0.7

-2.9

- Driven by strategic areas such as workstyle DX▐ Network Solutions (NWS)▐ Environmental & SocialSolutions(ESS)⚫ Impacted by decline in sales and lower GP* Impacts from lower sales and a reaction to themargin*
profitable projects in the previous 1Q

1Q
FY22/351Q
FY23/3© NEC Networks & System Integration Corporation 2023

1Q
FY24/3▐ Others/elimination⚫ Mainly development expenses for new
mission-critical systems increased※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

1Q FY2024/3 GP Margin by Segment
1Q1Q

FY23/3 FY24/3DXS

NWS

6Change21.0% 21.6% +0.6pt

21.4% 18.6%-2.8pt

ESS

13.9% 13.4%-0.5ptCompany total

17.9% 17.5%-0.4pt© NEC Networks & System Integration Corporation 2023

Key factors
Progress in the development of greater added value(expansion in strategic areas including workstyle DX)
Impact of decreased telecom carrier businesses andconcentrated lower-margin projects of social infra. in 1Q
Impact of decline in sales and reactional impact fromprofitable projects in the previous 1Q

(* Forecast figures are as of July 28, 2023)

FY2024/3 Forecasts

1Q progress in line with expectations
No change from initial forecasts(¥ Bn.)
FY23/3
Orders received
Net sales

320.8

Forecasts

370
340

Change+4%+6%Operating income

22.8

24.0+1.2(to sales)(7.1%)(7.1%)±0.0pt

Net income

13.8

14.0

+0.2

(4.3%)(4.1%)-0.2ptattributable to owners of the parent(to sales)

7356.0FY24/3© NEC Networks & System Integration Corporation 2023

Sense of direction from 2Q onwards◼ Orders received / net sales•

Expansion of workstyle DX and social
infrastructure-related fields•

In ESS sales from the orders backlog will enter fullswing and cause a turnaround to increased sales◼ Operating income•

Effects of increased sales, improved mix(Profitability of orders received in 1Q improved)•

Effects of resources optimization at telecom
carrier businesses will manifest•

Costs for aggressive strategy will expand asplanned

Topics: Incorporating Non-financial Strategy
Environment

Human resourcesAdjusted Scope 1 and Scope 2 reduction
targets ahead of schedule to accelerateaction on climate change

Earned strong external recognition forhuman capital management initiatives

GHG Reduction Targets (Scope 1 and 2)

Recognized for reskilling and selfdirected career development having
taken root as corporate culture

Brought forward
milestone

Significantly brought forward
55％
timing for achievement of net
reduction
zero emissions

89％ (New plan)
reduction
Netzero2019
8Gold Idea Award in Organization/Team
CategoryTop Prize(Unit: t-CO2)

8,456

WELLBEING AWARDS

Platinum Career Award2024

2030© NEC Networks & System Integration Corporation 2023

(Initial plan)Net zero

2050

Recognized for serious innovative efforts
with original ideas to roll out and instill
wellbeing initiatives as a company

Psychological Safety Award 2023
Silver Ring Award

Recognized for efforts to improve
psychological safety that forms thefoundation of good organizational
development

Reclassified quarterly data and other data

Please see our supplementary data sheet for- Reclassified quarterly data for FY2021/3 & FY2022/3- Sales by business type, sales by market etc.
https://www.nesic.co.jp/english/ir/library/2023.html

9© NEC Networks & System Integration Corporation 2023

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 have beenrecalculated to reflect the change in the content of business segments.

10© NEC Networks & System Integration Corporation 2023

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

nesic
11

© NEC Networks & System Integration Corporation 2023

Searchhttps://www.nesic.co.jp/english/ir/