Financial Results for the Fiscal Year ended March 2023
April 28, 2023

Yushi Ushijima, President & CEO
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2023

AgendaI. Results for the FY2023/3
II. Forecasts for the FY2024/3
III.Progress of Medium-termManagement Plan “Shift up 2024”

I.

Results for the FY2023/3

FY2023/3 Summary
FY23/3(¥ Bn.)

FY22/3

FY23/3

Changeforecast(Jan.2023)

Orders received

336.8

356.0

+6%

350

Net sales

310.3

320.8

+3%

322

Gross margin

20.5%

20.7%

+0.2pt

ー

SG&A

40.3

43.8

-3.5

ー

Operating income

23.2

22.8

-0.4

22.0

（to sales）(7.5%)(7.1%)-0.4pt

(6.8%)Net income

15.0

13.8

-1.2*

13.0

（to sales）(4.8%)(4.3%)-0.5pt

(4.0%)

ＲＯＥ

11.6%

10.0%

-1.6ptFree cash flows

15.5

-2.1

-17.6

⚫ SG&A for growth increased(-3.5), weak yen(-1.5) and delayed sales timing impacted

Orders backlog

165.2

201.2

+22%

⚫ Overseas special factors positively impacted (+2.1)

attributable to owners of the parent

3

Recorded historically high orders
Sales/profits are on recovery trend in 4Q*There was extraordinary losses for HQ move

© NEC Networks & System Integration Corporation 2023

Orders:⚫ All segments grew centered on enterprises andgovernments

Sales:⚫ Delayed due to S/C and materials shortage
・Recovery trend in 4Q

Operating income:**c.f. P5

FY2023/3 Orders Received/Net Sales by Business Model
SI/construction: Sales turned to increase due to eased S/C & materials shortage in 4Q
Services: Orders remained flat even with reactional fall of large PJs* in FY22/3*for governments(¥ Bn.)

Orders received
356.0

336.8

SI/construction

Services

211.0
63％

125.8
37％

4

22/3

＋9％
(＋17％)+0％(+9％)( ): 4Q change© NEC Networks & System Integration Corporation 2023

230.0
65％

Net sales
320.8

310.3

193.9
62％

126.0

116.5

35％

38％

23/3

22/3

+4％
(+13％)

201.0
63％

+3％
(-1％*)

119.8
37％

23/3

*Impact of decreaseof Covid-19 related
demand in a
subsidiaryFY2023/3 Operating Income Factor Analysis of YoY Changec.f. 4Q shows improvement
11.6(¥ Bn.)

11.0

Impact ofallowances for
Myanmar PJ
in FY22/3

23.2

+1.8

Partial reversal of
allowances for
Myanmar PJ +1.4

(12.0%)

Loss in Thai PJ-1.1

Increase of allowances in 1H
due to FX -0.6
Reversal of allowances in 3Q +2.0

FX -0.3

SG&A
-1.0

-1.5

Other than Myanmar PJ

Improvement+2.5（Overseas factor in FY22/3） （Overseas factors in FY23/3）

～
～
5

22.8

(7.1％)

Mainly enhancement
costs of enhanced sales
and new businessdevelopment (resourceetc.) and HQ transfer
costs

+2.1
22/3

© NEC Networks & System Integration Corporation 2023

(11.7％)FX impacts

SG&A
-3.5

(7.5%)

Improve
ment
+1.9

23/3

～
～

FY2023/3 Orders Received by Segment(¥ Bn.)

336.9

336.8

356.0

+6%

(+14%)

GIGA School
14.5

DXS

123.6

NWS

81.4

119.5

84.3

122.7

92.1

+3%
(+5%)

+9%

(+31%)⚫ SI/construction field such as product biz for
financial market increased (+7%)⚫ DX/workstyle area expanded even withreactional fall of large PJs in FY22.3▐ Network Solutions (NWS) *Submarine, space related⚫ L5G and social infra.* biz increased⚫ Biz for telecom carriers decreased-Despite of a large order in 4Q, capex remained weak

▐ Environmental & Social Solutions (ESS)

GIGA School
14.5

ESS

122.3

128.7

132.7

Others

9.5
21/3

4.3
22/3

8.6
23/3

6

▐ DX Solutions (DXS)© NEC Networks & System Integration Corporation 2023

+3%

(+7%)

( ): 4Q change⚫ SI/construction field in Japan such as a big
disaster-prevention PJ made up for reactional
fall of a large order of Saudi Arabian plant
network in FY22.3※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

FY2023/3 Net Sales by Segment(¥ Bn.)

339.1
GIGA School
14.5

DXS

▐ DX Solutions (DXS)
310.3

121.5
108.0

320.8
114.2

+3%
(+8%)
+6%
(+13%)⚫ Service field stably expanded (+6%)⚫ SI/construction increased (+6%) withimproved situation of S/C & materials
shortage in 4Q▐ Network Solutions (NWS)
74.4

NWS

81.9

GIGA School
13.5
Mega solar
11.0

ESS
Others

7

79.2

-3%
(-3%)

133.4

9.8
21/3

115.0

119.2

5.5
22/3

8.1
23/3

© NEC Networks & System Integration Corporation 2023

+4%
(+8%)

⚫ Biz for telecom carrier decreased
while marine related biz increased▐ Environmental & Social Solutions (ESS)⚫ SI/construction field increased such as
kitting PJs and overseas construction PJs( ): 4Q change※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

FY2023/3 Operating Income by Segment(¥ Bn.)▐ DX Solutions (DXS)%: to sales

25.6(7.5％)

DXS

13.0(10.7％)

NWS

23.2(7.5％)

13.0(12.1％)

9.2(12.3％)

10.8(13.2％)

ESS

12.6(9.5％)

Others/Elimination

-9.2

21/3
8

8.2

22.8

-0.4

(7.1％)(-0.4pt)

13.2

+0.2

(11.6％)(-0.5pt)

9.8

-1.1

▐ Network Solutions (NWS)(12.3％)(-0.9pt)⚫ Income decreased due to sales drop andSG&A increase

10.7

+2.5

▐ Environmental & Social Solutions (ESS)(7.1％)(9.0％)(+1.9pt)

-8.9

-10.9

-2.0

22/3

23/3

© NEC Networks & System Integration Corporation 2023

⚫ Income increased accompanied with sales
growth even with FX impact and SG&A
increase⚫ Worse sales mix due to transition period to DX
service business model( ): 4Q change⚫ Overseas special factors positively
impacted (+2.1) *c.f. P5▐ Others/Elimination⚫ Cost increased such as HQ relocationand ERP system development※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

FY2023/3 Gross Margin by Segment
Full year
22.3

23.3

Change

DXS

22.5%

21.6%

NWS

23.8%

ESS

17.4%

Company total

9

cf. 4Q

20.5%© NEC Networks & System Integration Corporation 2023

22.3

23.3

Change-0.9pt

22.8%

22.9%

+0.1pt24.3%+0.5pt

27.7%

27.8%

+0.1pt19.0%+1.6pt

22.2%

22.5%

+0.3pt20.7%+0.2pt

23.5%

23.3%

-0.2pt*GPM decreased due
to “other” segment(products sales)II. Forecasts for the FY2024/3

*Forecasts as at April 28, 2023

FY2024/3 Forecasts
Orders/Sales:(¥ Bn.)

Orders received

356.0

370

+4%

Net sales

320.8

340

+6%

⚫ Targeting new records
Increasing DX/working-style field and social infra.
biz., although macro environments and telecom
carrier biz have uncertainty＋
Accelerating sales from orders backlog

Operating income

22.8

24.0

+1.2

Operating Income:(to sales)(7.1%)(7.1%)±0.0pt

Net income

13.8

14.0

+0.2

(4.3%)(4.1%)-0.2ptFY23/3attributable to owners of the parent(to sales)

FY24/3
Forecasts

Change⚫ Increasing income through sales growth and highvalue-added service expansion accelerating
investment for growth

Challenging further improvement
11© NEC Networks & System Integration Corporation 2023

*Forecasts as at April 28, 2023

FY2024/3 Forecasts by Segment
Orders received(¥ Bn.)Net sales
Change356.0

370Operating income
Change

+4%
320.8

340

+6%

Change24.0 ＋1.2%: to sales

22.8(7.1%)(7.1%)

122.7

130

+6%

DXS
NWS

DXS
92.1

95

137

ESS

132.7

Others

8.6

8

23/3

24/3e

12

+3%

+3%

© NEC Networks & System Integration Corporation 2023

NWS

114.2

79.2

121

85

ESS

119.2

126

Others

8.1

8

23/3

24/3e

+6%

+7%

+6%

DXS
NWS

13.2
(11.6%)

9.8

14.0 ＋0.8(11.6%)

11.0 ＋1.2(12.3%)(12.9%)

ESS

10.7(9.0%)

12.0 ＋1.3(9.5%)

Others/Elimination

-10.9

-13.0

23/3

24/3e

-2.1

*Forecasts as at April 28, 2023

Dividend Plan（※予想値は、2021年1月29日現在のものです）

Increase shareholders return based
49.0 on stable dividend while expanding
46.0
corporate value via investment in
43.0
growthDividend pershare (¥)

*considering DOE 5.0% as a general guide

35.0⚫ 23/3：Year-end dividend ¥23(Full-year ¥46)
⚫ 24/3e：¥49/share

27.3

increasing for the 17thyear in a row

4.7* The results for the fiscal years ended March 2020 and prior thereto presented herereflect the three-for-one stock split conducted on June 1, 2020.

07/3
13

・・・・
© NEC Networks & System Integration Corporation 2023

23/3 24/3e

III. Progress of Medium-termManagement Plan “Shift up 2024”

What We Seek to Achieve in 2030

×DX

Beyond 5G(next-generation
networks)＝(

Sustainable
Symphonic
Society
Realization of a sustainable
society with prosperity
that resonates for all

Provide services that anticipate
future changes in society and technologies
Decarbonization

15

Energetic
communities© NEC
NEC Networks
Networks&&System
SystemIntegration
IntegrationCorporation
Corporation
2023
2023

Smart industry

Work/lifestyles
with greater freedom

Safetyand security

HealthWell-Being)

Spiral-Type Growth Model: A Recurring Model Based on Consulting

A factor added to new strengths
in the new medium-term
management plan

based on expertise
2 Consulting
obtained through experience in co-creation& self-implementation

1

Create value
Be smarter

Seek original value
Accelerate shift to services

Create new social value
16

Win Customers
Design / Suggest

Strengths and assets developed
under the previous
medium-term management plan

⚫ Digital x 5G
⚫ Symphonict⚫ Co-creation and selfimplementation biz model

Realize the customers
success and sustainability© NEC Networks & System Integration Corporation 2023

High customer value
Long-term relationshipof trust(Spiral of quality improvement)

4

OperateSite-specificconsulting

Existing
strengths and assets

Realize⚫
⚫
⚫
⚫

Apply DX

3

SI capabilities
Technological capabilities
Field Capabilities
Nationwide coverage

to realizationand operation
processes toimprove quality

Accumulateknowhow, data toenhance insightProgress of the Spiral-Type Growth Model
Despite achievements in building trust with customers,
progress on profitability improvements remain an issue
Expanding Orders and Net Sales

Improving Profitability

×

Provide high customer value

Build long-term relationships of trust with customers(Recurring relationship)

Indicator

Expansion of large recurring accounts* /increase in transaction volume
Number of large
recurring accounts+5%

Indicator

Expected line
based on theMedium-Term
Management Plan

⚫ Steadily deepen trust withcustomers that will lead torecurring business⚫ Delayed from the target line

20.5% 20.7%⚫ Drive top-line expansion* large recurring accounts:
Customers continuously doing business with NESIC for over three years,
and average sales are above a certain monetary amount<c.f.> Coverage : slightly 5% of NESIC (un-consolidated) customers

16.5%
Beyond Borders 2021

FY2017/3

17

Improvement of GP margin© NEC Networks & System Integration Corporation 2023

FY2022/3

Shift up 2024

FY2023/3⚫ An offering model designed
to provide high added value
and profitability is being
developed.
There are signs that apositive cycle will beachieved in the next fiscal
year and beyond

Development of an Offering Model Utilizing NESIC's Strengths
Offering Model

Packages to provide value using customer
issues as a starting point
Knowledge of customers’ business processes & issues
based on existing customers through PBX andnetworking business etc.

×

Track record of achievements through cocreation andself-implementation such as workstyle innovation

Examples of offering model themes
Innovating corporate culture & workstyles, and BPO of non-corebusiness operations (transformation of employee awareness, hybrid
work and business processes)
Next-generation disaster and risk management (safety and securityof local resident, corporate risk management and BCP)

DX and network environments to develop smart factories

×

Providing integrated services to solve issues fromconcept design through to DX services, construction andoperation

Quickly provide value to as many customers as
possible18© NEC Networks & System Integration Corporation 2023

Infrastructure services for local governments
based on Digital Garden City Nation Concept:
Design and construction of offshore wind and solar power
generation aimed at carbon neutrality

Example: Corporate Culture and Workstyle Innovation and
the BPO of Non-core Business Operations✓ Co-creation with partner-type consultation for innovation and transformation of customers✓ Support of customers’ shift to core operation via BPO of non-core operation
Core Operations(Planning, creation, etc.)

Outsourcing Field

Main themeswith a proventrack record

Co-creation
DX Organization

Non-core operations(Operation andimprovements)

Partnering for ICT promotion

Customer
NESIC BPO Team
SupportInfo Sys DeptOperator PC
Management

19

Hybrid Work
Secure and safe next-generation
standardized plant network
Improved document/info.
management (Elec. Contacts, etc.)© NEC Networks & System Integration Corporation 2023

Network
Monitoring

Security
Monitoring

Main themeswith a prove
track record

Full outsourcing of company-wide
PC-LCM
Outsourcing of operation undermulti-cloud environments

Example: Next-Generation Disaster and Risk Management
Safety and security of local residents

Corporate risk management and BCP✓ Quickly restoring disaster-affected infrastructure within aregion through the centralized sharing of disaster information
across sectors✓ Displaying multiple pieces of information in real-time✓ Helping to ensure the safety and security of residents such as
securing fuel, restoring logistics and offering medical services

Local
governments

Electric power- Supply info.
- Recovery plans, etc.

Data recipients
Telecom.

- Coverage area status
Recovery plans, etc.
Video linkage- Hazard maps
- Evacuation site info., etc.

Weather info.

Streetsurveillance
videoVideo submitted
by the generalpublicCombining various info todisplay it as one piece of map data

Information provided by local
governments and various companies

Accumulation
Open
Data
- Rain and cloud radar- Rainfall and river levels- Topography, etc.

20

Transportation- Service andrestoration status- Route info., etc.

Gas / Water
Supply© NEC Networks & System Integration Corporation 2023

- Supply outage status- Water supply schedule- Recovery plans, etc.

Electricity
utilities
Gas companies
Water utilities
Telecom
carriers
Bus companies
Taxi companies
Rail operators
Airlines
National
government
Local gov’ts
General public
etc.

✓ Drastically improving the speed from ascertaining a situation
to making decisions

Next-generation disaster management centers, large-screen displays

Footage from PCs brought inFootage displayed continuously

Television footage* Example of displayed footage

Promoting utilizing the Showcase at co-creation base at Nihonbashi(Demonstrations at NESIC's new head office also planned)

Accelerating Co-creation:
Combining Strengths to Tailor Unique Services
DX

Beyond 5G
next-generation networks

Sustainable

SaaS optimization service

Automated network
operation utilizing AI

Energy business based onstorage batteries

Cloudbrink (USA)

Tupl (USA)CONNEXX SYSTEMS

AI-based real-time alert
service

Development of cutting-edge
local 5G models

Sustainable liquid-immersion
data center

Dataminr (USA)The University of Tokyo (FLARE SYSTEMS)

KDDI, Mitsubishi Heavy Industries

DX services to change
workstyles

Strengthening and expansionof the local 5G business

Circulation-type onshore
fish plant business

SansanHFR (South Korea)

RKB Mainichi Holdings* The company and product names listed here are the trademarks or registered trademarks of the respective companies.

21© NEC Networks & System Integration Corporation 2023

Action to Accelerate Business Expansion
Integrate new business development and DX service development functions in the DX Solutions
Business Unit and accelerate the expansion of business in the DX domain
DX Business Themes
DX Solutions
Business Unit

DX Solutions
Business Unit

Work-style innovation
CX and BX
Digital twinsCX: Corporate Transformation, BX: Business Transformation

Business
DesignOperations
Unit
New
Business
Development
and DX
Services

22

Network
Solutions
Business Unit
Environmental &Social Solutions
Business Unit

© NEC Networks & System Integration Corporation 2023

New
Business
Development and DX
Services

Network
Solutions
Business Unit

Beyond5G
next-generation network
services

Environmental &Social Solutions
Business Unit

DX for local governments
Digital twins
Carbon neutrality

(Reference) Management Targets (Non-financial Indicators)
Greenhouse gas
emissions

Engagement score*(SCOPE 1 + 2)

Target: 55% reduction(by FY2031/3)

Target: 50%*
(FY2025/3)

Target: 10.0%(FY2027/3)

FY2022/3: 8,321 t-CO2

FY2023/3: 32%

End of March 2023: 5.9%

(compared with FY2020/3)(1.6% YoY reduction)

FY2020/3: 8,456 t-CO2(Scope 3 targets are set for FY2024/3
onward)(-1% YoY)

FY2022/3: 33%••

Researched by KincentricThis score generally corresponds to the world’s top
25%, and accordingly the Tier 1 level*Information about progress on high-level human resources is currently being compiled.
23

Percentage of female
managers© NEC Networks & System Integration Corporation 2023(+0.9% YoY)

End of March 2022: 5.0%

Reclassified quarterly data and other data

Please see our supplementary data sheet for- Orders backlog by segment- Sales by business type
- Sales by market
etc.
https://www.nesic.co.jp/english/ir/library/2023.html

24© 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.
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.

25© 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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26

© NEC Networks & System Integration Corporation 2023

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