Financial Results for theFirst 9 Months ending March 2023
January 30, 2023
Hiroyuki Sekizawa, Senior Vice President & CFO
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2023

9M FY2023/3 Summery
9M
FY2022/3(¥ Bn.)

ChangeOP & NP decreased
due to SG&A increase and FX impact,
although orders backlog expanded

Orders received

243.5

250.0

+3%

Net sales

218.8

221.9+1%

Orders:⚫ Led by DX, orders remained firm as a whole,with partial delay to 4Q

Gross profit

42.043.5+1.5(to sales)

19.2%

19.6%

+0.4ptSG&A

29.8

32.4-2.5

Sales:

Operating income

12.2

11.2

-1.0

(to sales)(5.6%)(5.0%)-0.6pt⚫ SI/construction sales were flat
due to longer lead time of PJs

7.7

6.1

-1.6

(to sales)(3.5%)(2.8%)-0.7ptFree cash flows

9.2

-2.3

-11.6

Orders backlog

162.9

195.0

+20%

Net income
attributable to owners of the parent

19M
FY2023/3© NEC Networks & System Integration Corporation 2023

Enterprises

Telecom. carriers

Profits:⚫ In addition to delayed sales, active SG&A increase(-2.5) and yen depreciation (-1.2) impacted⚫ Special factors (overseas) had positive impacts(+2.1)
・Loss in Thai PJ (-1.1: 2Q)
・Myanmar PJ (+3.2) *see P.3

9M FY2023/3 Orders Received/Net Sales by Business Model
SI/construction: Orders increased with sales shift to 2H
Service: Although orders fluctuate due to the timing of large contracts,
sales is steadily expanding (*Large contracts of government PJs in 1H, FY22/3)
Orders received（¥ Bn.）

250.0

243.5

SI/construction

158.9Services84.7＋6％-４％

9MFY22/32221.9

218.8

65％

35％

Net sales© NEC Networks & System Integration Corporation 2023

168.8

132.9

132.3

68％

61％

-0％

81.2

86.0+4％

89.6

32％
9M
FY23/39M
FY22/3

39％

60％

40％

9M
FY23/3

Operating Income Analysis（¥ Bn.）

Partial reversal of
allowances for
Myanmar PJ
Impact ofallowances for
Myanmar PJ
in FY22/3

12.2

+1.8*

Loss in Thai PJ

-1.1

+1.4*

Increase of allowances in 1H
by FX -0.6
Reversal of allowances in 3Q +2.0(5.6%)

FX impacts-1.2

Other than Myanmar PJ

Improvement+0.６SG＆A-2.5

11.2(5.0％)（Overseas factor in FY22/3） （Overseas factors in FY23/3）+2.1～～
3

9M
FY22/3*Myanmar impacts total: ¥3.2 Bn.

© NEC Networks & System Integration Corporation 2023

9M
FY23/3～～

9M FY2023/3 Orders Received by Segment（¥ Bn.）▐ DX Solutions (DXS)
253.5

GIGA School
14.5DXS

93.7

243.5

250.0+3%

87.8

89.5＋2％⚫ Increased SI/construction area such as
product biz for financial companies (+2.9)⚫ DX/workstyle field was strong despite ofabsence of large PJs in FY22/3 (+10％)▐ Network Solutions (NWS)
NWS

59.6

61.1

+1%

61.6

-Value-added biz such as support of efficient operation using
DX increased

GIGA School
14.5ESSOthers4⚫ Local 5G & marine biz increased⚫ Telecom carrier biz decreased

92.8

+2%

91.2

92.6

7.5

3.4

6.2

9M
FY21/39M
FY22/39M
FY23/3© NEC Networks & System Integration Corporation 2023

▐ Environmental & Social Solutions (ESS)⚫ Domestic SI/construction area such as alarge disaster prevention PJ made up for alarge overseas PJ* in FY22/3*A plant network PJ in Saudi Arabia※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

9M FY2023/3 Net Sales by Segment（¥ Bn.）

GIGA School
1.0DXS▐ DX Solutions (DXS)
233.5
80.9

218.8

221.9

+1%

77.7

80.2+3%⚫ Service area increased (+9%)⚫ SI/construction area decreased due tolonger lead time of PJs▐ Network Solutions (NWS)
NWS

52.0

GIGA School
10.0
Mega solar
11.0

ESS593.3

57.3

55.5

-3%

79.3

80.6

+2%

7.3

4.5

5.6

9M
FY21/39M
FY22/39M
FY23/3© NEC Networks & System Integration Corporation 2023

⚫ Telecom carrier biz decreased
though submarine network biz increased▐ Environmental & Social Solutions (ESS)⚫ SI/construction area increased such as
kitting Pjs and overseas construction PJs※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

9M FY2023/3 Operating Income by Segment（¥ Bn.）%: to sales

13.8(5.9％)

12.2(10.1％)(5.0％)(-0.6pt)

8.9

8.2-0.7(11.4％)

NWS(10.8％)

6.4(6.9％)(11.0％)

3.2(4.0％)
Others/Elimination

6(10.2％)(-1.2pt)

5.4

-0.9

5.6

6.3

ESS-1.0(5.6％)

8.1

DXS

11.2

▐ DX Solutions (DXS)

-6.4

-6.2

9M
FY21/39M
FY22/3© NEC Networks & System Integration Corporation 2023

(9.8％)(-1.2pt)

5.0+1.8(6.2％)(+2.2pt)

-7.5

-1.3

9M
FY23/3⚫ OP decreased due to yen depreciation andactively increased SG&A
⚫ Worsened sales mix in the transitional
period to DX service biz model-PBX related biz dropped & product biz increased▐ Network Solutions (NWS)⚫ OP decreased due to sales decrease andaggressive increase of SG&A

▐ Environmental & Social Solutions (ESS)⚫ OP increased by overseas special factors-Loss in Thai PJ (-1.1)-Impacts of Myanmar PJ (+3.2, see p.3)

▐ Others/Elimination⚫ Costs for HQ relocation & new mission
critical system development increased※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

9M FY2023/3 Gross Margin by Segment
9MFY2022/3

79M
FY2023/3ChangeDX Solutions

22.4%

21.1%

-1.3pt *FX impact,Network Solutions

22.2%

22.8%+0.6pt

Environmental & Social Solutions

15.2%

17.3%+2.1pt overseas factors

Total

19.2%

19.6%+0.4pt© NEC Networks & System Integration Corporation 2023

worsened sales mix*improved due to special※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

*Forecasts as at January 30, 2023

FY2023/3 Forecasts
FY23/3
forecasts

ChangePrevious
forecasts

Change

350

+4%

350

-

Downward revisionin net sales forecast
considering 9 months progress⚫ Orders-No change. Targeting record-high orders(¥ Bn.)

FY22/3
actualOrders received

336.8

Net sales

310.3

322+4%

330-8

Operating income

23.2

22.0

-1.2

22.0

-(to sales)

7.5%

6.8%-0.7pt

6.7% +0.1pt

Net income

15.0

13.0

-2.0

13.0

4.8%

4.0%

-0.8pt

3.9% +0.1pt

attributable to owners of the parent(to sales)

Orders backlog

165.2

195 +18%※8© NEC Networks & System Integration Corporation 2023-⚫ Sales-Revised. Considering delay in sales
following the delay of the contract timing
and decrease of telecom carrier biz⚫ Operating income-No change. Offsetting overseas special
factors against the sales shortage
impacts above

*Forecasts as at January 30, 2023

FY2023/3 Forecasts by Segment
Orders received(¥ Bn.)

350

DXS

127

NWS

90-2%: to sales

350
127

90

Operating income

330

DXS

NWS

117

85-8
‐3-5322114

80

22.0(6.7％)

DXS

128

Others5Previous
forecast

128+27
Revisedforecast© NEC Networks & System Integration Corporation 2023

ESS122

122

Others66

Previous
forecast

Revisedforecast±013.0

NWS-2.5

9.5+2.0-11.5+0.5(7.8％)
Others/EliminationPrevious
forecast(6.8％)(11.4％)

11.0(12.9％)

22.0
13.0(11.1％)

ESS

ESS

9±０Net sales

8.5(10.6％)

11.5(9.4％)-11.0
Revisedforecast

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

10© NEC Networks & System Integration Corporation 2023

Cautionary Statement
Forecasts and targets of results mentioned in this document are future estimates and are thusinclusive 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.
There was segment change in April 2022. Segment information for the FY 2021/3 and FY 2022/3 havebeen recalculated to reflect the change in the content of business segments.

11© 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.

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