Financial Results
for the Fiscal Year ended March 2021
May 7, 2021

Yushi Ushijima, President
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)© NEC Networks & System Integration Corporation 2021

AgendaI. Results for the FY2021/3
II.Forecasts for the FY2022/3
III.Progress of Measures for“Beyond Borders 2021 (BB21)”(Medium-Term Management Plan)

I. Results for the FY2021/3

FY2021/3 Summary
FY21/3(¥ Bn.)

FY21/3

Changeforecast(Jan.2021)

Orders received

305.0

336.9

+10%

333

Net sales

303.6

339.1

+12%

333

Gross margin

17.9%

18.9%

+1.0ptーOperating income

16.2

25.6

+9.3

22

（to sales）(5.4%)(7.5%)+2.1pt

(6.6%)

Extraordinary income/loss

-3.4

-0.7

+2.7

ー

Net income

9.4

15.7

+6.3

13.5

（to sales）(3.1%)(4.6%)+1.5pt

(4.1%)

ＲＯＥ

8.8%

13.5% +4.7pt

Free cash flows

6.2

13.1

attributable to owners of the parent

4

FY20/3© NEC Networks & System Integration Corporation 2021

+6.9

Big jump to
new record performance~Frontloaded achievement of
medium term target<Medium-term target (FY22.3)>
・Net sales: ¥310 Bn.
・Operating income: ¥20 Bn. (6.5% to sales)
・ROE: 10%

 Two-digits growth in orders/sales
・Acquired GIGA School demand
・Strategic areas grew
*DX/workstyle innovation, telecom

 Profitability
moved up to the next level
Operating income: ¥25.6 Bn.
(7.5% to sales)

FY2021/3 Orders Received by Segment(¥ Bn.)

284.7

305.0

336.9 +10%
128.3

DSL

106.6

+11%

115.2

▐ Digital Solutions (DSL) GIGA school received by a subsidiarydrove an increase in orders.
 DX/Workstyle innovation-related
businesses expanded though non-urgent
ICT investment slowed down
*Negative ¥4 bn. impact of a group company (changed from a consolidated
subsidiary to an equity method affiliate from 2Q) is included▐ Network Infrastructures (NWI)
95.3

NWI

80.8

87.7

ESS

88.3

92.0

103.7

Others

9.0

10.0

9.5

5

FY19/3

FY20/3© NEC Networks & System Integration Corporation 2021

FY21/3+9%+13%

 Telecom area expanded
・Orders from telecom carriers increased
・Acquired large PJ of submarine seismometerin 1Q▐ Engineering & Support Services (ESS) Regional GIGA school projects led thegrowth.

※Segment information FY19/3 & FY20/3 has been reclassified to reflect the inter-segment business transfer in April 2020.

FY2021/3 Net Sales by Segment(¥ Bn.)

339.1 +12%
303.6
277.9
126.0

DSL

102.1

NWI

79.5

ESS
Others

6

112.8

83.1

89.2

89.0
7.4

10.3

9.8

© NEC Networks & System Integration Corporation 2021

+7%

▐ Network Infrastructures (NWI)
 Telecom area expanded
・Telecom carriers business increased

114.1

FY20/3

 GIGA school received by a subsidiarydrove an increase in orders.
 DX/Workstyle innovation-related
businesses expanded though non-urgent
ICT investment slowed down
*Negative ¥4 bn. impact of a group company (changed from a consolidated
subsidiary to an equity method affiliate from 2Q) is included

97.4

FY19/3+12%▐ Digital Solutions (DSL)+17%▐ Engineering & Support Services (ESS) Regional GIGA school and mega-solar
projects led the growth.

FY21/3※Segment information FY19/3 & FY20/3 has been reclassified to reflect the inter-segment business transfer in April 2020.

FY2021/3 Operating Income by Segment(¥ Bn.)( ): to sales

25.6 +93
16.2

12.8

(4.6％)

DSL

9.0(5.4％)

5.1

ESS

+21

11.7

(10.3％)

9.3(10.4％)

7.4

6.7(10.4％)

-10.3

-9.3

-8.8

+12

(6.9％)

FY20/3© NEC Networks & System Integration Corporation 2021

11.8

FY21/3▐ Digital Solutions (DSL) GIGA school projects contributed to the
profit Margin improved thanks to services(DX)business▐ Network Infrastructures (NWI)

 Profit increased thanks to sales growth(on the stronger base by reorganization at Apr. 2019)8.1(9.8％)

FY19/37

13.8(6.4％)(8.3％)

Others/elimination(+2.1pt)(10.9％)(8.9％)

NWI(7.5％)+51▐ Engineering & Support Services (ESS) Profit increased because of higher sales
and a decrease in provision for loss forunprofitable PJ▐ Others/elimination
 Administration costs improved and officerealign costs decreased※Segment information FY19/3 & FY20/3 has been reclassified to reflect the inter-segment business transfer in April 2020.

II. Forecasts for the FY2022/3

FY2022/3 Business Environments

Steady environments as a wholeEnterprises

Accelerating the change of ICT investments
due to Covid19
DX/workstyle (Value creation)

System renewal (cost)
Shifting

Telecom
carriers

Governments

Expanding 5G investment
GIGA school investment peaked out but investment
in social infrastructure toward Sciety5.0 is robust
Disaster prevention/mitigation, CATV, etc.

9© NEC Networks & System Integration Corporation 2021

*Forecasts as at April 27, 2021

FY2022/3 Forecasts(¥ Bn.)

FY21/3

FY22/3
Forecasts

ChangeOrders received

336.9

330

-2%

Net sales

339.1

320

-6%

Operating income

25.6

26.0

+0.4

(to sales)(7.5%)(8.1%)+0.6pt

Net income

15.7

16.0

+0.3

(4.6%)(5.0%)+0.4ptattributable to owners of the parent(to sales)
10© NEC Networks & System Integration Corporation 2021

Final year of “Beyond Borders
2012” plan to establish a basefor new business toward 2030
 Accelerate growth of strategicareas
・DX/workstyle innovation
・5G/telecommunication

 Aiming at sustainable profit growththrough improvement of sales mix~targeting over 8% operating margin
・Absorbing recoil reduction impact of GIGA
School projects

*Forecasts as at April 27, 2021

FY2022/3 Forecasts

Aiming at profit increase by growth of strategic businesses
with a rebound of GIGA school projects
Orders received

Net sales

Operating income(¥ Bn.)
339.1

336.9
GIGA
schoolapprox.-29

DX,
telecom
etc.

330

GIGA
schoolapprox.-28

approx.

+22

Mega solar
Approx.-12

DX,
telecom
etc.

320

25.6

(7.5%)

approx.

GIGA
schoolapprox.-3+21

DX,
telecometc.

26(8.1%)

approx.

+2.5

Loss PJ of
FY21/3

Approx.+1

FY21/311

FY22/3e© NEC Networks & System Integration Corporation 2021

FY21/3

FY22/3e

FY21/3

FY22/3e*Forecasts as at April 27, 2021

FY2022/3 Forecasts by Segment
Orders received

Net sales

Operating income( ): to sales(¥ Bn.)
336.9

DSL

NWI

128.3

95.3

330
120

100

ESS

103.7

100

Others9.5

10

FY21/3
12

339.1

-2%
-6%

+5%

-4%

FY22/3e© NEC Networks & System Integration Corporation 2021

DSL

NWI

126.0

89.2

ESS

114.1

Others9.8

FY21/3

320

-6%

116

-8%

96

98
10

FY22/3e

+8%

-14%

25.6

DSL

26 ＋0.4(7.5%)(8.1%)

13.8(12.1%)＋0.2(10.9%)

14

9.3

10

＋0.7

NWI

(10.4%)(10.4%)

ESS

11.8(10.4%)

12(12.2%)

＋0.2

-9.3

-10

-0.7

FY21/3

FY22/3eOthers/elimination

*Forecasts as at April 27, 2021

Dividend Plan
35

Dividend pershare (¥)

26.0

38

27.3

Raised dividend scale*according to the improved
profitability*considering DOE

 21/3：¥6 increase from the plan
Year-end dividend ¥21(Full-year ¥35)
 22/3：¥38/share

increasing for the 15thyear in a row

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

FY07/3
13・・・・© NEC Networks & System Integration Corporation 2021

21/3 22/3e

III. Progress of Measures for“Beyond Borders 2021 (BB21)”(Medium-Term Management Plan)Social Value Creation Model of NESIC
An inclusive and sustainable society
created through communications

Vision for society

Value to society Create environments in which everyone can work more vigorously Develop pleasant and plentiful communities with cutting-edge technologies
 Provide robust services that underpin safety and security in evolving society

Digital

Focusing areas

×

5G

Value creation model

Self-implementation
HW/SW
Nation-wide
capability

Network
Cloud

15© NEC Networks & System Integration Corporation 2021

NESIC

Cutting-edge
technology

Technology& credibility

Co-creation withpartners
Start-ups
Biz creation
capability
Customers

ICT/facility
partners

Progress of Measures for BB21
Current medium-term plan period(¥ Bn.)

339.1
GIGA school/
mega solar

303.6

Net
sales

320
25.6

(7.5%)

277.9

26(8.1%)

267.9

310

12.8

11.1

(4.6%)

FY18/3

FY19/3

 Expanding strategic areas such as DX

Operatingincome An improvement in earning capacitythat far exceeded expectations(6.5%)(5.4%)

Excluding
GIGA school/
Mega solar andimpact of loss PJs(4.1%)
OperatingincomeFY20/3© NEC Networks & System Integration Corporation 2021

Achieved the targets set in themedium-term plan ahead of schedulewith the contribution of GIGA school.

Net
sales

20

16.2

16

“BB21”
target* Forecasts as at April 27, 2021

FY21/3

FF22/3eAccelerate growth strategy (Digital x 5G)
for the final year of BB21 with an eye on thenext medium-term planProgress of Measures for BB21: Digital

Accelerate growth strategy leveraging environmental
change by COVID-19
Solution/services modelusing DX technologies

SI of H/W modelof the communication field

Accelerating
the change

17© NEC Networks & System Integration Corporation 2021

・Entering into the business application fieldwith multi-cloud services

Progress of Measures for BB21: Digital
Capture rapidly-growing DX demand according to “new normal”~Implementation with partners makes proposal to customers effective
Customer base
Number of DX customers
End of Mar. 2020

1,200

×

Service (selling of multiple items)

DX-related orders received

Enrich product lineup

End of Mar. 2021

(2,000 orders received during six months after start)© NEC Networks & System Integration Corporation 2021

2.2 fold

13bn.

¥

Fasterprogressthan
expected

Approx.
¥6bn.

KloudHybrid

YUNJI DELI

…etc.

Cross-selling & upselling

Structures
Erect inside sales structure

Approx.

Expand service line-up from theviewpoint of workstyle innovation &community development

15,700DX penetration toexisting customers+
Cultivate SMB market

18＝

Business growthSymphonict e-store & service portal

FY2019/3

FY2020/3

FY2021/3

Progress of Measures for BB21: 5G
Preparing for full-scale investment in 5G as planned
Carriers’ infrastructure
Build closer ties with carriers(as strategic partner)
 Cultivate new customers (suchas Rakuten) with the use ofexisting assets
 Rising KNSI’s position*K&N System Integrations Corporation (KNSI) is a joint
venture with KDDI Corporation.

1.5 folds
Sales
FY2020/3
19

FY2021/3© NEC Networks & System Integration Corporation 2021

Strengthening of businessfoundations
Set up a base for developing
Create services for solving social issues 5G personnel and forthrough POCs
technological verification
 Accelerating POCs for commercial(5G Lab in Shin-Kawasaki
services in the workstyle andTechnical Base)community areas
 5G Lab made open as aplace of demonstration,＜Workstyle innovation＞
evaluation and verification
 Tokyo Metropolis
Local 5G Mitsui Fudosan(Smart buildings/offices)

etc.
＜Community development＞
 CATV TOKUSHIMA
 Layers Consulting and other partners(oyster farming)etc.

 Personnel development
Personnel
with 5G
skillsIncreased 2.8 folds
from the previous
year’s level(from 100 to 278*)* Including those from business partners

Aiming to increase them four folds within the medium-term planProgress of Measures for BB21: 5GExpand value offered in workstyle and community development
via co-creation and implementation with partners
Adopted as a 5G-based new workstyle model
demonstration project by Tokyo Metropolitan Gov’t

Japan’s first operation of facilities for
Local 5G Sub 6 band commenced

Accelerating proposals on New Normal workstyles

Use for business in the prefectural government office
and for medical care, disaster prevention and agriculture

High-resolution video forspace 高精細映像による
sharing and removing
空間の共有
the sense 孤独感の解消
of isolation
日本橋オフィス
Nihonbashi
OfficeHigh
image quality, real-time
高画質/リアルタイム/常時接続
and permanent connection

立川オフィスTachikawa
Office（サテライトオフィス）(satellite office)Regional broadband
wireless access (BWA)

ローカル5G
Local 5G

CATV Tokushima’s network「新たなオンラインワークスタイル」
New online workstyles
LTE/キャリア5G/
Workerfrom home LTE
在宅勤務者
Carrier 5G

Use of robots
for stimulating
ロボット活用でcommunication
コミュニケーションを活性Real avatars
リアルアバター-・自走式ロボットでの映像表示
Image display with robots- Remote operation
・遠隔操作可能- Linkage with Zoom
・Zoom連携20

Local 5G
4.7 GHz© NEC Networks & System Integration Corporation 2021

Local 5G
4.7 GHz

On-premise core network(The local 5G system, regional BWA and low power wide area (LPWA)
networks are fully utilized.)Progress of Measures for BB21: Earning Capacity Improvement
Good results were produced both in cost efficiency andimprovements in added value
Streamlining & cost control
 Maximize effect of reorganization- Regroup by technology & function to eliminate
overlap and sectionalism

 Implement workstyle innovation- Increase productivity with the active use of DX

Improve resources (fixed cost) efficiency
Improve project quality

×

Increase extra value Introduce competitive services- Co-creation and implementation withcustomers and partners- Collaborate with cloud vendors and build
friendly relationships with start-ups＝ Increase in earning capacity
Gross margin

18.9%

17.9%
17.2%
16.5%

16.5%

7.5%

 Build up consulting capacity(Using staff knowhow of self-implementation for
consulting)

Improved profitability at the time ofreceiving orders

Operating income
to sales
4.6%
3.9%

5.4%

4.1%

Run-upperiodPeriod ofcurrent mediumterm plan

FY2017/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3

21© NEC Networks & System Integration Corporation 2021

Increase Business Capacity (Corporate Culture Development)
Forge a corporate culture for making continued attempts
without fear of change or failure
Improve internal communication as well as systems and structure
Be a nail that sticks out“That’s good.
You’re cool. “
campaign

Be the first penguin!
22© NEC Networks & System Integration Corporation 2021

AWARDS!
Corporate Culture Design OfficeSpecial organization
Well-Being Promotion Office
パルスサーベイツール…etc.

Towards Next Medium-Term Plan
2030

Giving shape to the Digital x 5G strategy
Continuous improvements in earning capacity

Next
medium-term plan

2022-2024

Current
mediumterm plan
2019-2021
23

A communication services orchestrator

Period of preparation for 2030

© NEC Networks & System Integration Corporation 2021

Positive results in the digital area
Steady progress in preparations for 5G
Improvement in earning capacity exceeding expectations

Ultimately

We will actively seek innovation without fearing change or
failure with a view to realizing an inclusive and sustainable
society based on communication.
24© NEC Networks & System Integration Corporation 2021

APPENDIX

25© NEC Networks & System Integration Corporation 2021

FY2021/3 Balance Sheet (End of March 31, 2021)
End of Mar/21

58.3
113.1
13.2
7.3

68.4
124.6
11.5
7.3

10.1
11.5
-1.6
0.0

191.8
38.4
230.2

211.8
38.5
250.3

20.0
0.1
20.1

Others

43.1
8.7
64.9

46.8
10.1
66.3

3.7
1.4
1.3

Liabilities

116.7

123.2

6.5

114.5

126.1

11.6

-4.1

-2.4

1.7

3.1

3.4

0.3

Liabilities & Net Assets

113.5
230.2

127.1
250.3

13.6
20.1

Owner's Equity Ratio

47.9%

49.4%

+1.5ptCash and cash equivalents
Notes & accounts receivable
Inventories
OthersCurrent Assets
Noncurrent Assets

Assets
Notes and accounts payable
Loans

Shareholders' equity
Accumulated othercomprehensive income
Non-controlling interests

Net Assets

26(¥ Bn.)End of Mar/20© NEC Networks & System Integration Corporation 2021

Diff.

FY2021/3 Cash Flows(¥ Bn.)

Oper. CF

-1.7

+23.3

+2.5

+9.4

+22.6

+4.8

+8.4

+12.9

+17.4

Inv. CF

-3.4

-5.5

-3.9

-2.8

-2.7

-2.8

-5.6

-6.7

-4.3

19.9

17.8
6.6

2.0

-1.5

-5.2

13.1
2.8

6.2

FCF

100

26.2

38.0 32.8 35.4

cash
51.4 49.2 47.9 49.6 58.3 Net
at the end of the period0FY13/327

FY14/3© NEC Networks & System Integration Corporation 2021

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

Cautionary Statement
Forecasts and targets of results mentioned in this document are future estimatesand are thus inclusive of risks and uncertain factors since they are not based on definite
facts. Please be aware that a variety of factors could cause actual results to differ
significantly from those projected. The major factors affecting actual results include theeconomic climate and social trends surrounding the business of this Company’s group,
consumer trends vis-a-vis systems and services provided by this Company’s group, as
well as pressure to lower prices and ability to cope with the market in response tointensified competition.
Factors affecting results are not limited to the ones mentioned above.
There were inter-segment transfer of some businesses and other changes in April
2020. Segment information for the FY 2019/3 and FY 2020/3 has been recalculated toreflect the change in the content of business segments.
(FY2019/3 figures are un-audited)28© NEC Networks & System Integration Corporation 2021

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

nesic
29

© NEC Networks & System Integration Corporation 2021

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