Financial Results for the 1Hfor the FY ending March 2024
October 30, 2023

Yushi Ushijima, President & CEO

NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2023

AgendaI. Results for the 1H FY2024/3
II. Forecasts for the FY2024/3

I. Results for the 1H FY2024/3

1H FY2024/3 Summary（¥ Bn.）
1H
FY23/3

ChangeOrders received

172.4

191.2

+11%

Net sales

142.7

155.2

+9%

Gross proft

25.8

29.0+3.1(to sales)

18.1%

18.7%

+0.6pt

SG&A

21.2

22.7

-1.5

Operating income4.6

6.2+1.6(to sales)

3.3%

4.0%+0.7pt

Net income

2.7

3.6+0.9(to sales)

1.9%2.3%+0.4pt

Free cash flows

8.1

9.1

+1.0

Orders backlog

196.4

237.9

+21%

attributable to owners of the parent

41H
FY24/3© NEC Networks & System Integration Corporation 2023

Accelerated sales growth led
to profit increase(Record high 1H results in orders, sales and GP)
Orders received :⚫ Two digits growth despite tough telecom.
carrier market
・Manufacturing and public utility increased
・Acquired large PJs (for governments and overseas)

Net sales :⚫ High growth with sales from orders backlog

Operating income：⚫ Income increased thanks to sales & GP growth(made up for SG&A* increase for the future)･Disappeared losses in overseas in 1H FY23/3*mainly for ERP system and personnel costs

1Q & 2Q FY2024/3
Sales expansion led to profit increase in 2Q
1Q
FY23/3

Change2Q
FY23/32Q
FY24/3

Change（¥ Bn.）

Orders received

80.8

96.5

+19%

91.6

94.7

+3%

Net sales

67.6

71.7

+6%

75.1

83.5

+11%

Gross proft

12.1

12.5+0.4

13.7

16.4

+2.7

(to sales)(17.9%)(17.5%)△0.4pt(18.3%)(19.7%)+1.4pt

SG&A

10.6

11.4

-0.8

10.6

11.3

-0.7

Operating income

1.5

1.1

-0.4

3.1

5.1

+2.0 Impact of overseas(to sales)(2.2%)(1.6%)△0.6pt

(4.2%)(6.1%)+1.9pt

Net income

0.5

0.2

-0.3

2.2

3.4

+1.2

(0.7%)(0.3%)△0.4pt

(2.9%)(4.1%)+1.2ptattributable to owners of the parent(to sales)
51Q
FY24/3© NEC Networks & System Integration Corporation 2023

Losses in 2Q FY23/3+1.3

Orders Received/Net Sales by Business Model
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.
（*Contact center business of a subsidiary in DXS segment）
Service sales excluding above impacts (Covid 19 & telecom carriers) steadily increasing

Orders received（¥ Bn.）

191.2

172.4

SI/construction
Service114.1

+20％

58.3

-7％

**(+2%)

1HFY23/36© NEC Networks & System Integration Corporation 2023

137.2

54.0

Net sales
155.2

142.7

83.0

+18％

59.7

-4％
**(+5%)**Growth rate of service business
1H
1Hexcluding
Q&ACorp.
(DXSsubsidiary)
FY24/3
FY24/3and telecom. carrier biz of NWS

97.7

57.5
1H
FY24/3

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

165.9
DXSNWS

61.1

41.0

191.2

+11%

61.1

-1%

39.2

-11%

172.4

44.0
+31%

ESS

61.5

63.2

Others

2.4

3.6

7.8

FY22/3
1H

FY23/3
1H

FY24/31H© NEC Networks & System Integration Corporation 2023

⚫ Although strategic areas increased,
there was impact of decreased Covid-19
special demand･Some PJs was moved to 2H(the market condition remains good)

61.6

83.1

7

▐ DX Solutions (DXS)▐ Network Solutions (NWS)⚫ Telecom carries related biz decreased･ Telecom carriers’ severe capex control continued･Social infra. Increased (Full-swing expansion
will be since the next year)▐ Environmental & Social Solutions (ESS)⚫ Construction business both in Japan &overseas increased⚫ Acquired large orders in 1Q※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

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

141.0
DXS

51.3

142.7
51.9

155.2

+9%

+14%

58.9

NWS36.9

36.3

38.6

ESS

49.3

50.9

53.7

+5%

Others

3.5

3.6

4.0

FY22/3
1H

FY23/3
1H

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

⚫ Both strategic and existing areas
increased even with reactional reduction ofCovit-19 demand▐ Network Solutions (NWS)+6%8▐ DX Solutions (DXS)⚫ Both social infra. and carrier related
businesses increased thanks to the sales
from orders backlog▐ Environmental & Social Solutions (ESS)⚫ The sales from backlog started to be fullswing (2Q sales +15% yoy)

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

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

6.2( ): to sales 7.6+1.6(4.0％)(5.4％)

4.6(3.3％)

DXS(+0.7pt)

+1.2

6.5

5.6(11.0％)(10.9％)(+0.9pt)

NWSESS
Others/Elimination(8.7％)(10.4％)

3.3(9.1％)

2.2

0.8(4.5％)-4.0+0.1

3.4

3.8

Overseaslosses(-1.7)(-0.4pt)+1.7

2.5(4.7％)(+3.1pt)(1.6％)
-4.8

-1.4

-6.2

⚫ Increased due to sales expansion andimproved GPM･ Strategic areas expansion contributed▐ Network Solutions (NWS)

5.3(10.1％)▐ DX Solutions (DXS)⚫ Almost flat yoy as a result of sales
increase and lower GPM▐ Environmental & Social Solutions (ESS)⚫ Turned to profit increase in 2Q due to sales
expansion.

▐ Others/elimination
FY22/3
1H
9

FY23/3
1H© NEC Networks & System Integration Corporation 2023

FY24/3
1H⚫ ERP renewal and personnel costs increased※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

1H FY2024/3 Gross Margin by Segment

DXS

1H

1H

FY23/3

FY24/321.3%

22.0% +0.7pt - Higher value creation (Strategic biz expansion)

Change- Sales increase※- Decrease of high-profitability biz due to capex control ofNWS

22.4%

19.6%

telecom. carriers-2.8pt - Low profitable PJs in social infra. Biz(product area expanding in this FY in advance)

10ESS13.1%overseas losses
15.5% +2.4pt - Disappeared※Company total

18.1%

18.8% +0.7pt© NEC Networks & System Integration Corporation 2023

Topics: Progress of the Spiral-Type Growth Model
Main Initiatives and Issues During the First Halfof the Medium-Term Management Plan

Key Achievements

Consultation-type
approach

Expanding thecustomer base

Expansion of highadded valuebusiness
11⚫ Growth rate in orders received:

4 times⚫ Develop a dedicated consulting
organization and cultivate consultants
YoY

Approx. 20% of non-consolidated orders:+6%

YoY

Orders received per an account +13%

(DX strategic areas: workstyle DX, next-generation network security, etc.)⚫ Net sales growth rate

© NEC Networks & System Integration Corporation 2023

approx.

+40%✓ Further strengthen consulting capacity⚫ Follow up with existing customers andimprove proposals(large recurring accounts in private sector)⚫ Number of accounts⚫ Develop an offering modelYoY✓ Customer co-creation and value creation
leveraging ongoing business relationships⚫ Expand the Symphonict service focusing
on strengths in DX and beyond-5G nextgeneration networks✓ Launch initiatives in growth areas toachieve further profitability gains

Topics: Initiatives to Enhance Human Capital-oriented Management
Development of high-level human resources
Results being confirmed (some responses not yet
Beyond 5G
Advanced DXreceived)
Consulting personnel
professionals
professionals
Results
as of 20243/9

44190

2025/3 target

489
1,190

A corporate culture of continually
taking on challenges and growing
Psychological Safety
Award 2023

5th Platinum CareerAward

1st WELLBEING
AWARDS

Certified Health &Productivity Management
Outstanding Organization
2023

1,350
1,580

2024/3 target⚫ Consulting personnel: Candidate visualization andaccelerated development⚫ Advanced DX professionals: Launch of a curriculum togain DX knowledge and learn about AI development anddata analysis in a practical format⚫ Beyond 5G professionals: Augment classroom instruction
with a focus on local 5G
12© NEC Networks & System Integration Corporation 2023

⚫ Creating an environment where employees can engage inself-directed learning and continue to take on challenges⚫ Continue to conduct new business pitch contests that
accelerate co-creation and innovation⚫ Systems and initiatives enabling employees to continue
working in good health and with peace of mind

II. Forecasts for the FY2024/3

*Forecasts as at October 30, 2023

FY2024/3 Forecasts
Robust DXS absorbing the worsened NWS
Challenging further improvement(¥ Bn.)
FY23/3

FY24/3
forecasts

YOY
From prev.
Change forecasts

2H
FY23/32H
YOY
FY24/3
forecasts Change

Orders received

356.0

370 +4%-183.7 178.8-3%

Net sales

320.8

350 +9% +10.0

178.1 194.8+9%Operating income

22.8

24.0

18.1

17.8

-0.3

(to sales)

7.1%

6.9% -0.2pt(10.2%)(9.1%)-1.0pt

Net income

13.8

14.011.1

10.4

-0.7

4.3%

4.0% -0.3pt(6.2%)(5.3%)-0.9pt

+1.2

+0.2

--

attributable to owners of the(to sales)*Net sales forecast was revised considering large PJ sales (equipment procurement)
14© NEC Networks & System Integration Corporation 2023

Premise of 2H

 Orders received•DXS: Strategic areas such as work-style DX
highly grow. Covid-19 special demand impact
decreases•NWS/ESS: Large PJs in previous 2H impacts

 Net sales•Sales from orders backlog is expanding (23/9end backlog: +21% yoy) Operating income•GP increases due to sales growth(absorbing reactional impacts of reversal ofallowances in previous 3Q)•SG&A expansion continues for future growth*Forecasts as at October 30, 2023

FY2024/3 Forecasts by Segment
Orders received(¥ Bn.)

DXS

NWS

ESS
Others

15370±０13095137

YoY

370 +4%130-10+10Net sales

85147

88Previous
Forecast

Revisedforecast+6%-8%+11%© NEC Networks & System Integration Corporation 2023

DXSNWSESS
Others340+10121+485

126-3+9Operating income
YoY

350 +9%12582

13588PreviousForecast

Revisedforecast+9%+4%( ): to sales

YoY

24.0±0.0

24.0 +1.2(6.9％)

DXS

14.0+1.0

15.0

NWS

11.0

ESS12.0

Others/Elimination-13.0-13.0

Previous
Forecast

Revisedforecast(7.1％)+1.8(12.0%)-1.0

10.0+0.2(12.2%)

12.0+1.3(8.9%)+13%-2.1

*Forecasts as at October 30, 2023

1H FY2024/3 Orders Backlog by Segment(¥ Bn.)

16

End of

End ofSep.2022

Sep.2023

DXS

61.1

62.4+ 1.3

2%

NWS

41.6

47.7+ 6.1

15%ESS

91.4

121.1 + 29.732%Company total

196.4

237.9 + 41.5

21%

© NEC Networks & System Integration Corporation 2023

Diff.

G/R

*Forecasts as at October 30, 2023

Dividend（※予想値は、2021年1月29日現在のものです）

Dividend/share
（¥）

49.0

Interim46.0

Year-end

24.5(Forecast)

Increasing for the
17th year in a row(No change in the dividend plan)Interim：¥24.5/share (+¥1.5)
Year-end：¥24.5/share (+¥1.5)

24.5

4.7

FY07/3
17・・・・© NEC Networks & System Integration Corporation 2023

24/3

* The results for the fiscal years ended March 2020 and prior thereto
presented below reflect the three-for-one stock split conducted onJune 1, 2020

About Supplementary Data

Please see our supplementary data sheet for- Historical P/L, B/S, C/F- Segment data (incl. old segment)- Other data
(Orders backlog, by-business type and by-market data)
https://www.nesic.co.jp/english/ir/library/2023.html
18© 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 2021/3 has beenrecalculated to reflect the change in the content of business segments.

19© NEC Networks & System Integration Corporation 2023

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