Management Based on Awareness ofCapital Cost and Share Price
June 12, 2024
Senior Vice President & CFO
Hiroyuki Sekizawa© NEC Networks & System Integration Corporation 2024

Progress of “Shift up 2024” Business Plan
Shift up 2024(¥ Bn.)

359.5
Net sales 310.3

365.0

320.8
29.0
25.1

23.2

22.8

FY22/3

FY23/3

Profit growth speed returned to theplan, though the figures are a year
behind the target
Strategy started working with severe capex
control by telecom carriers and wage hike（Appeared results in DXS leading other areas)

Operatingincome1

Summary

FY24/3 FY25/3e© NEC Networks & System Integration Corporation 2024

Initiatives for the Sustainable Enhancement of Corporate Valueand Shareholder Value
Advancing activities in line with basic strategies formulated in 2019(first disclosed in Annual Report 2019)

Strategic tree

Basic Approach(1) Improving financial value
based on ROE(2) Enhancing non-financial
value with a focus onhuman capital
Enhancing corporate value andshareholder value through theabove virtuous circle

Financial value･ROE

Corp. value･PBR･Equity spreadNon-financial
value
･PER

Shareholders’equity cost
Expected
growth rate2

© NEC Networks & System Integration Corporation 2024

Growth rate &profitability

Portfolio
management

Capital efficiency
Non-financial capitalto support growth strategy & to reduce biz risk

Constructive
dialogueCurrent Situation (Changes from the Past)* PBR/PER = Annual average share price ÷ BPS/EPS

Return on capital and the evaluation by the market were improved significantly by focusing on thebasic strategies.

PBR (Times)
Significant improvement from 1
time to 2 times＝

ROE (%)

Steady improvement in return on
capital and expanded equity spread* Cost of shareholders‘ equity

3

×

PER (Times)

Improved evaluation by the market
as a systems integrator(SIer)

Estimate based on CAPM, etc.
(around 6%)
Value expected by investors(around 8%)

2.0

10.4

20.2

1.2

8.7

14.3

© NEC Networks & System Integration Corporation 2024

* PBR/PER = Annual average share price ÷ BPS/EPS(FY2024/3 values)

Current Situation (Comparison with Other Companies)

PBR improvement is still on the way.
Aim for a further improvement in return on capital and evaluation by the market.

＝

PBR (Times)

2.9

2.6

3.0

18.0

SIer

2.8

14.3

PER (Times)

20.2

15.5

19.4

21.7

A

B
SIer

C

1.0

1.0

D

E

Telecom
construction© NEC Networks & System Integration Corporation 2024

15.7

13.3
7.8

NESIC

SIer

19.1

16.3

10.4

NESIC
4

SIer

14.1

2.0

×

ROE (%)

A

B
SIer

C

D

6.5

E

Telecom
construction

NESIC

A

B
SIer

C

D

E

Telecom
construction

Toward an Improvement in ROE
Aiming to achieve ROE exceeding the level of a SIer by improving profitability and asset efficiency

ROE=

Net margin×

Total asset
turnover×

The Equity
MultiplierOperating margin

FY24/3
FY25/3eTentative target *1

10.4%

4.3%

( 7.0% )1.3

1.9

approx.

12%

4.9%( 7.9%)

1.3

1.9

approx.

16%

6%( 10% )

1.4

1.9（=SIer)Average for SIer *2

15.5%

6.7%

1.4

1.8

(Company A to Company C)*1 Assumption base*2 The average values for a systems integrator are simple averages for the respective indicators. Accordingly, ROE is not consistent with the value
obtained with the above mathematical expression.
5© NEC Networks & System Integration Corporation 2024

(1) Improvement of Profit Margin on Sales (1)Accelerating initiatives for enhancing profit growth capability

DXS

NWS

ESS

A hybrid business combining existing businesses with DX
Center-based offsite BPO (use of Symphonict and AI)
Focusing efforts on the next growth-- Social infrastructure (including space/national security), next-generation NW areas(including O-RAN and local 5G)

Resource optimization (including fire-fighting network and road ICT)
Sophistication and enhancement of added value(workstyle innovation and DX at work sites in the public sector,
initiatives for green society (to be practiced by the company))

6© NEC Networks & System Integration Corporation 2024

(1) Improvement of Profit Margin on Sales (2)Aiming for an exclusive position, which is neither one of system integrators nor one of acommunication facility construction company, with synergy between DX x next-generation networkand social implementation capability

Only one
Spiral-type growth model+ Synergies among segments

DXS

NWS

(DX know-how) (Beyond 5G

technology)

ESS(Socialimplementation
capability)
7© NEC Networks & System Integration Corporation 2024

Synergy examples（DX×ESS）
DX in public areas, such as using Digital Twin
to visualize flows of people at a station/airport（NWS×ESS）
Smart security services for electriccompanies using local 5G technologies（DXS×NWS×ESS）:Advanced high-resolution monitoring
services for key facilities (visual AI x highspeed communication x construction)

(2) Improvement in Asset Efficiency (Asset Turnover Ratio)
Improvement activities made steady progress despite the impact of component shortages and longterm, large-scale projects. The efficiency of accounts receivable and inventories was improved in
response to deterioration of asset efficiency due to an increase in long-term, large-scale projects.
▐ Improvement in asset efficiency- Strengthening accounts receivable management-- Receiving advances and intermediate payments,and others

98- Strengthening inventory management-- Promoting just-in-time delivery and shortening
waiting time

93
88

90
86

Impact of component
shortages, etc.

19/3
8

20/3

21/3

22/3

23/3

© NEC Networks & System Integration Corporation 2024

24/3

Improvement

96

Changes in CCC (Days)▐ Awareness reform- Inclusion in internal performance evaluation- Considering measures by holding workshops- Enhancing training, raising awarenessby using comic strips, etc.

(3) Portfolio Management
Optimizing the portfolio by screening businesses based on ROIC x future growth potentialHigh

Establishing hurdle rate by taking
capital costs into consideration

DXS

ROIC

Indicators that include capital efficiency
among factors

Progressive expansion

Consideration of
regrowth

NWS
ESS
Structuralreforms/withdrawals

Low

Low

Growth in sales

Reinforcement of
profitability

High

Indicators that include growth potential among
factors
9© NEC Networks & System Integration Corporation 2024

Screening by business divisions, SBUs, andaffiliates constituting the segment

Optimizing and improving the portfolio

(4) Cash Allocation/Financial Leverage
Planning to provide shareholder returns exceeding the planned level. Proactively considering
investment in growth.
Period of the medium-term
management plan(¥ Bn.)

Raising the DOE level from the viewpoint of TSR(Cumulative total for FY23/3 to FY25/3)

Shareholder return

Operating CF

22.5

22.0
*

46.0

52.0
* Affected by a delay inprofit planning

Investment(Investment CF ... Normal/M&A,
etc.)

43.5

50.0

(10.0 billion
yen invested)

End of March 2022

Cash in hand balance
80.0(Usageguide)

10

Value assumed underthe medium-term
management planxx.x

Ensuring security

60.0

60.0

Value assumed now

XX.X

Funds

© NEC Networks & System Integration Corporation 2024

Use

- 5.0%

5.3% (Starting in FY25/3)- Dividend planned to be increased for the 18th
consecutive fiscal year

Enhancing growth investment based on
business strategy- Invested in companies related to DX, local 5G, and carbon
neutrality- Also considering M&A proactively toward achieving
growth with effects of financial leverage(5) Expanding Non-financial Capital and Enhancing Constructive Dialogue
Strengthening activities for improving PER by reducing the cost of shareholders’ equity and increasing
the anticipated growth rate

Expanding non-financial capitalStrengthening constructive dialogue(Implementation of sustainability management)⚫ Issues- Development of highly skilled professionals
 Creating opportunities to gain practicalexperience (consulting/DX)- Improvement of engagement
 Activation of communication, dispersion of load,transfer of authorities, fair evaluation- Enhancing the capability of implementing
non-financial strategies
 Introducing non-financial indicators tocompensation for directors
11© NEC Networks & System Integration Corporation 2024

⚫ Enhancing information disclosure that
contributes to investment decisions(e.g. orders backlog by segment and gross margin to sales)-Reflecting discussions with analysts and institutional
investors-Driving visualization with data management in the future⚫ Holding briefings, etc. that will lead tounderstanding of our businessess

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

DX Solution Business
June 12, 2024
Osamu Kikuchi, Senior Vice President
NEC Networks & System Integration Corporation(TSE: NESIC, 1973)© NEC Networks & System Integration Corporation 2024

* Forecast figures are as of April 26, 2024

Business Performance

Strategic areas drove the growth of sales and profit.
Improvements in profitability will accelerate further with the cycle from existing areas to the DX area.
19.0(¥ Bn.)
200

Operating income
150

Net sales
100
Strategicareas

Year-on-year
growth rate

+21%

15.7
13.0
108.0
20.3

13.2
114.2
24.9

20
18
16

129.7

135

33.0

50

+4%

14
12
10
8
6

50

Existing areas

88

89

97

85

4
2

0

14

0

FY22/3

FY23/3

FY24/3

FY25/3ResultResultResultForecast© NEC Networks & System Integration Corporation 2024

Basic Policies
Acquiring new customers utilizing the strength of our brand for workstyle innovation and continue to cultivate
existing customers.
Becoming a co-creation partner that works with customers, discovers issues, makes improvement proposals fromevery angle and solves these issues.
Customer

Solving Issues Through CoCreation

Operation, BPO

Upstream proposals

Issue
verification

Partner-type recurringbusiness

Workstyle DX

Monitoring and maintenance
15© NEC Networks & System Integration Corporation 2024

Next-gen
Data analysis
network security & utilization

Digital twins

Local govt
DX

Partner-type
consultation
Selfimplementation
Systems integrationand construction

Business Strategy
1. Responding to post-COVID-19 workstyles and return to officeAcquiring new customers by utilizing the strength of our brand for workstyle innovation and making sure toreceive orders for office relocation and renewal projects

2. Capturing growing demand for network security, attributed to renewal of ICT
infrastructure
Responding to growing demand for network renewal resulting from an increase in data traffic and providing
advanced security operation

3. Increasing approaches to customers in public fields, starting from the DX area
including digital twins
Expanding business areas from DX projects to existing areas, including network security and surveillancecameras and monitors

16© NEC Networks & System Integration Corporation 2024

Strategy
Facilitating a hybrid business combining project-type existing businesses with DX services
Circulating businesses with flexible approach from both existing areas and DX areas

Management
dashboard

Communication

Use Symphonict tocirculate businesses

Approached fromDX businesses

ICT infrastructure

Video equipment

Broaden the scope ofApproached from proposals
and strengthen
existing businesses the customer baseReceive more orders andstabilize profit throughinternal cooperation

Hybrid work

Voice and network

Digital twins
Ecosystems with vendors

17© NEC Networks & System Integration Corporation 2024

Facilities andconstruction

Business Strategy
Responding flexibly to the ICT environment, which is getting complicated,by shifting from resident BPO to center-based offsite BPO
Eliminating dependence on individual skills and realizing high quality through automation using AI
Workstyle DX

Increasing the number of users to which we provide services with global response and leverage

Company B

Company C

Company D

Company E

Offsite operation
centerStandardization, visualization, AI prediction/projection and automation

Scope

Domestic/global

DomainICT infrastructure, operation services, and support for use of DX

18© NEC Networks & System Integration Corporation 2024

AI analyses and forecasts
of management and sales data,

Operational DX
Visualize the status of use ofcloud services

Visualize security
NaaS…

Quality and service

Automation of processes…

BPO services using DX

Company F

Services based on our self-implementation(examples)

Company A…

Visualize workstyles and productivity

BPO: Business Process Outsourcing NaaS: Network as a Service

Case: Workstyle DX and Innovation of Executive Meeting
A meeting-style innovation
made in time with the renewal of the executive meeting room
A leading-edge executive meeting created by integrating space, equipment, and DX
Customers’issues⚫ Insufficient functions of existing equipment⚫ A conventional meeting style based on use ofpaper
STEP 1

Order received in FY24/3

Consultation on
meeting style renewal

19© NEC Networks & System Integration Corporation 2024

Differentiating
factors

STEP 2DX

Our self-implementation
Flexibility and speed

STEP 3

Order received in FY24/3

Renewal of executive
meeting room &Introduction of DX

Meeting-styleinnovation using DX

Eliminating waste before and after
meetings with paperless operations
and AI meeting minutes

Prompt management decisions
made with the latest real data

Existing

Case: In-Factory Network Security
Next-generation digital factory-A high-speed, secure network of domestic and overseas production bases
for centralized management of information
Customers’issues

Productivity and manufacturing volume which arecomparable to those of overseas competitors
STEP 1

Differentiating
factors

20© NEC Networks & System Integration Corporation 2024

Existing

One-stop provision, from worksites to DX
Flexibility and speed

STEP 2

Order received in FY24/3

High-speed network for
production lines
Security for preventing
unauthorized connection

DX

Visualizing production lines
including those of overseas
bases

STEP 3Using AI to predict theoperation of
production lines
Operating domestic
and overseas baseswith BPO services

Case: Digital Twins
Specific solutions to issues co-created with the customer in a step-by-step manner-Expanding the area to existing areas and smart city, starting from digital twin data analysis
Customers’issuesWant to solve social issues through co-creation,
making a small start with analysis of flow of people
STEP 1

Differentiating
factors

STEP 2DX

Flexibility and speed
One-stop provision, from worksites to DX
STEP 3

Order received in FY24/3

Analysis of flow of people
Visualization of traffic lines

Expansion of existing
businesses
Network security
Cameras and monitors

Digital twins

21© NEC Networks & System Integration Corporation 2024

Existing

Safety and security
Smart city

Factors Differentiating NESIC from Competitors
1. DX services provided in a one-stop manner from the worksite to the cloud
Efficient services backed by a history of self-implementation, the optimal introduction of DX based on a thoroughunderstanding of customers’ on-site environments

2. Flexibility and agility (always using the most advanced, optimal cloud services)
Agility independent of specific products or vendors and an assortment of DX services with new venture discovery systems
in North America and other regions

3. Self-implementation(discovering and implementing DX technologies which are one step ahead)
Sharing issues and achievements of iour self-implementation with customers to support their transformation

Branding (workstyle innovation), extensive industries/large-scale SI capabilities,
advanced DX/network professionals
22© NEC Networks & System Integration Corporation 2024

Leads Company-wide DX
Leading the transformation to a recurring model and enhanced added value
with DX technologies and expertise in DX utilization
Example: DX in public areas, such as using Digital Twin to visualize flows of people at a station/airport

Next-generation networking
technological capabilities withhigh quality and reliability

Network Solutions
Business(NWS)

Expertise in the publicindustry /social
implementation capability

Expertise in
DX technologies and use of DX(workstyle innovation forenterprise)

Environmental & Social
Solutions Business(ESS)

DX Solutions
Business(DXS)
Companywide businessfoundation
23© NEC Networks & System Integration Corporation 2024

(Foundation for nationwide support services)https://www.nesic.co.jp/english/ir/

Network Solution Business
June 12, 2024
Yukinobu Noguchi, Senior Vice President
NEC Networks & System Integration Corporation(TSE: NESIC, 1973)© NEC Networks & System Integration Corporation 2024

Progress of Medium-Term Management Plan

* Forecast figures are as of April 26, 2024

FY25/3 targets have been revised in light of the business environment.
■ Results and forecasts (¥ Bn.)
97
79.2

83.1

80.0

25
Telecom.
carriers
etc.

Net sales

Gross profit margin

Socialinfrastructure

23.8%⚫ Structural reform of telecom carrier businesscompleted
Planning to improve gross margin in FY25/3- Cross-BU resource shift

72- Streamlining including in-house production andconsolidation of floors

14.0(14.4%)⚫ Aiming for targeted growth of the social
infrastructure business

21.5%
Operating income(to sales)26

9.8(12.4%)

9.4(11.3%)

9.0(11.3%)

FY23/3(Result)

FY24/3(Result)

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

FY25/3(Medium-termtarget)Overview of the Network Solutions (NWS) Business
Basic Policies
Providing highly reliable network systems with multi-vendor SI by leveraging comprehensive SI
capabilities for diverse network systems to meet high-level demand from customers, together withnationwide maintenance and operation systems

Strengths of the business⚫ ICT infrastructure comprising highly-skilled engineers(No. of beyond 5G professionals: over 1,000)(i) Network business⚫ Industry expertise through collaboration with NEC(ii) Beyond 5G business⚫ Ability to provide comprehensive solutions in a
one-stop manner, from SE to maintenance andoperations
27

Business area(iii) Social infrastructure business© NEC Networks & System Integration Corporation 2024 *Beyond 5G: Most advanced radio network technologies including 5G, 6G, high-speed WiFi, LPWA, etc.

Business Strategy
Maximizing the NWS business by focusing on the business of co-creation with customers
using unique technologies through cooperation with venture firms
in addition to pursuit of deeper cooperation with NEC
Network business✓ Telecom. carrier infrastructure✓ Local NCC✓ Governments and public areas

Beyond 5G business✓ 5G social implementation

Social infrastructure business✓ Space and national securities✓ Marine
28✓ Media© NEC Networks & System Integration Corporation 2024

⚫ Pursuing open system business area, such as O-RAN and Whitebox,
in greater depth⚫ Making it a service business by providing operation DX solutions⚫ Entering the mission-critical areas by using large-scale network-SI
technologies cultivated through the telecom carrier business⚫ Launching the business of co-creation with customers by providing
industry-specific solutions based on characteristic infrastructure
products and wireless technologies⚫ Entering the area of direct sales in addition to pursuing cooperation
with NEC in greater depth⚫ Expanding from dedicated machines to the open system area byusing multi-vendor SI technologies

Network Business
Expanding the business volume by entering new network-SI area
Telecom carrier: O-RAN

Governments and public areas: Mission-critical areas

Nationwide deployment of
wireless x cloud computing technologies

Making the network more advanced for the DX of operations
Postalservices[Areas where we serve]
Relay stations andGC stations
Tens of thousandsof bases across Japan⚫ Areas where we build networks- Cloud environment- Site systems- Verify and evaluate⚫ Maintenance- Services provided in fields- Various documents- 24/7 year round

Entries to some deployedbusinesses completed

Electricpower

29© NEC Networks & System Integration Corporation 2024

* K&N System Integrations Corporation

To integrated SI

Network for digitalized control of electric power systems(Power plants and substations across Japan)- Advancing the private communication
network of control systems- DX of operations in power plants andsubstations

Ministries
and agencies

Cross-telecom-carrier deployment
through cooperation with KNSI*

Common network infrastructure(24,000 offices across Japan)

Differentiation with operation
solutions in addition to optical
x local 5G

Prefectural information network(physical and virtual infrastructures)
Fully integrated services with a nationwide system

Network Business: Local NCC
Accelerating expansion into new areas, including the businesses of supporting worksite DX
based on maintenance and operations (equipment management, visualization, automation
with AI, etc.) and local DC, in addition to optical network infrastructures
Segregated management (vertical)
Field data

Existing
systemDX-platform for operational integration✓ Scattered data (hard to collect)✓ Managed by different persons(dependent on individual skills)✓ Non-real-time management(erroneous judgments)

30

Creating new value with synergy

Open data

Operation
DX solutions

Network
open
solutionsPlatform-based management✓ Data integration and management✓ Real-time visualization✓ Prompt data utilization

Facilities control

Geographicalinformation

Facility
information

Design data

Task history

Disasterinformation

Further expansion ofsolutions based on
operations

Vendor lock-in network

Making the network open

Pursuing the area in greater depth
by taking advantage of multi-vendor SI

Expensive/Not flexible/
Not expandable[Whitebox]

System selection + SI + Maintenance and operations© NEC Networks & System Integration Corporation 2024

Beyond 5G Business
Focusing efforts on launching a market for the social implementation of nextgeneration networks, by using characteristic products and companywide assets
Lineup of products tailored to purposes
NEC Magnus

HFR (South Korea)[High-output and integrated][Expandable and discrete]

All-in-one local 5G system integrated
with the core network

Portable high-performance base station,with all elements integrated in a single box✓ One-box✓ Non-SI✓ Powerful✓ Compact and✓ Low price✓ Compatible withpower-saving
outdoor use
31© NEC Networks & System Integration Corporation 2024

Thoroughly eliminating barriers to the introduction of
local 5G to encourage customers to experience theimplementation

SI modelPreparing to offer rental
equipment in addition to
one requiring initialinvestment

Co-creation model
Implementation of local 5G
in practical operations(Small starts)

Local 5G evaluation andvalue verification
Expanding areas of applications
while checking the effects

Central and local governments
NEC market and others

Manufacturing, construction, electric
power, transportation, and othersBeyond 5G Business: Use Cases
Industry-specific local 5G solutions developed through co-creation with the customers
in markets where demand for next-generation networks has been actualized
Use case (1): Manufacturing industry

Use case (2): Construction industry

Manufacturing site

Construction site

SurveillancecameraManufacturing
line

Construction
IoT

Communication- Manufacturing and quality control- Centralized management of events- Real-time data sharing

32© NEC Networks & System Integration Corporation 2024

Drone

Heavy
machineryCommunication

Integrated command system- Checking conditions of remote control, etc.
- Workers’ communication- Management of design and work data

Social Infrastructure Business: Space and National Securities (1)Expanding the business on an ongoing basis by pursuing cooperation with NEC in greater depth
in light of the activation of the security area
Further, expanding the direct sales area with open systems, aiming to maximize the business of the GroupKey point- Construction of
infrastructure facilities⚫ Development of engineers(Open system engineers, PM, and SE)- SI of NEC systems- SI of open systems(network and IT systems)⚫ Conforming to security standards
on our own(Information and physical security frameworks)⚫ Accelerating the development andproposal of a solution lineup(Lineup related to local 5G and energy)

33© NEC Networks & System Integration Corporation 2024

Further expansion of SI areas

Reinforcing the framework for taking
actions in response to market activation
and business expansion

National security
business

Coordination with NEC- Undertaking SI projects en bloc
- Expanding the area of maintenanceand operations

SL business-Enhancing the resilience of
security bases→ Expanding areas of digitalization
Multi-vendor SI- Deployment to national security
related companies

Social Infrastructure Business: Space and National Securities (2)Expanding high-quality, cost-competitive solution business by taking advantage of our capability ofidentifying qualities and multi-vendor SI capabilities, which were cultivated through cooperation with NEC
Satellite ground station
Total solution
Antennas

System integration
RadomeMulti-vendor

Shelter
Optical transmission
Peripheral equipment
34© NEC Networks & System Integration Corporation 2024

To space-relatedcompanies(Newspace)

Focus- Discovering and partnering with global vendors- Ability to control vendors- Acquiring high-level product knowledge- Ability to make proposals in new areas

Social Infrastructure Business: Marine
Leveraging marine-related experience spanning more than five decades
together with the technological capabilities to enhance activities targeting
new growth markets, including offshore wind power generation
Growth of new markets

Existing businesses

Ability to manage large-scale
projects cultivated throughcooperation with NEC
Communication
Observation
35

System construction- Route surveys- Cable landing station
construction- Laying of communication cables

System development- Earthquake prediction- Submarine communications
extension equipment⚫ Offshore wind market(Cable work + O&M)

Initiatives for new areas
Entering projects from the designphase by taking advantage of
HDD* method*HDD：Horizontal Directional Drilling⚫ Development of multi-routesubmarine cables⚫ Protection and multi-regionalizationof cable landing stations⚫ Improving the resilience of nationallands (disaster prevention and mitigation)⚫ Resource exploration / expansion ofundersea surveillance© NEC Networks & System Integration Corporation 2024

Utilizing construction expertise,
expanding direct sales

Horizontal deployment ofobservation solutions

Increasing the Competitiveness of the Entire Company with
Advanced Network Technologies
Capturing leading-edge network technologies ahead of others,
thus helping differentiate all businesses of the company
Example: Smart security services for electric companies using local 5G technologies
Expertise in
DX technologies and use of DX(workstyle innovation forenterprise)

DX Solutions
Business(DXS)

Expertise in the publicindustry /social
implementation capability

Next-generation networking
technological capabilities withhigh quality and reliability

Environmental & Social
Solutions Business(ESS)

Network Solutions
Business(NWS)
Companywide businessfoundation
36© NEC Networks & System Integration Corporation 2024

(Foundation for nationwide support services)https://www.nesic.co.jp/english/ir/

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

39

© 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
40© 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
8

15

10

35.0

✓ In DX/new areas (community development and green), there were
delays in preparing for expansion.

20

40

30.0

100

25.0

80

20.0

60

15.0

40
Operatingincome

10.7

12.6

16.0

+3.4

5.0

Review

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

20

41

Achievements and areas to improve up to the FY2024/3

140(+8%)*

126.0

140

40.0

0.0

✓ 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 in
addition to the EPC business

Promotingcommunity
development

42- 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

Construction
andmaintenancebusiness

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

43

Cooperation 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 three
years 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 in
addition 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
44

End of March
2024© 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 our
track 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

45

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 of
decarbonization✓ 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 FY20/3
levels)46

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.

47© NEC Networks & System Integration Corporation 2024

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)

48© NEC Networks & System Integration Corporation 2024

Accelerating the Development of DX x Beyond 5G
Driving all businesses of the company with the synergy of ”DX x Beyond 5G (next-generation
networks)” 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 in
DX 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
49© NEC Networks & System Integration Corporation 2024

(Foundation for nationwide support services)https://www.nesic.co.jp/english/ir/