Financial Results
for the First 9 Months
for the Fiscal Year ending March 2019(For Press Conference)
January 30, 2019
NEC Networks & System Integration Corporation(TSE: 1973, NESIC)9M FY2018/3 Summary▐ Orders and sales grew driven by Enterprise NW and Carrier NWOrders received: Increased offsetting the impact of the mega-solar plant project (-165)*Excluding the impact of the mega-solar plant project: +12%

Operating income increased significantlyDespite proactive spending for growth. earnings capabilities were strengthened further.

9M
FY2018/3

FY2019/3

FY2018/3

FY2019/3

Orders received

201.7

207.5

+3%

73.0

60.7

-17%

Net sales

184.9

191.0

+3%

65.0

68.5

+5%

Gross margin

15.8%

16.6%

+0.8pt

15.6%

17.8%

+2.2ptOperating income

4.4

6.3

+1.8

1.9

3.7

+1.7

(to sales)(2.4%)(3.3%)+0.9pt

(3.0%)(5.3%)+2.3pt

Net income

3.0

4.3

+1.3

1.4

2.4

+1.0

(to sales)(1.6%)(2.2%)+0.6pt

(2.1%)(3.5%)+1.4ptFree cash flows

3.7

2.0

-1.7-8.0

-9.5

-1.5

attributable to owners of the parent2(ref.) 3Q© NEC Networks & System Integration Corporation 2019

Change(¥ Bn.)
Change9M FY2019/3 Orders Received by Segment( )shows growthrate without solar
PJs orders(¥ Bn.)

202.1
Others

4.4

201.7
4.8

SocialInfra. 62.4

65.5

Carrier
50.1
Networks

46.5

Workstyle innovation-related business
continued to expand.

+3% - The number of office visitors increased 55% year on year.
207.5 (+12%) Projects for financial customers wereconcentrated in the current fiscal year.

6.0

59.7-9%(0%)▐ Carrier Networks

Orders from telecom carriers, mainly forbase stations, increased.
Orders from non-carriers, particularly those54.3 +17% from hotels, increased.
(+26%)▐ Social Infrastructures

Enterprise
Networks 85.4

84.9

87.5

9M
17/3

9M
18/3

9M
19/3

3

▐ Enterprise Networks

Orders decreased due to the negative impact+3%of the mega-solar business and a reaction to(+12%)© NEC Networks & System Integration Corporation 2019

increased orders for domestic large-scale publicprojects in the previous fiscal year, despiteorders for overseas large-scale projects in thefirst half.
- Almost unchanged, excluding the impact of the mega-solar business9M FY2019/3 Factors of Orders Received Change（¥ Bn.）

Excluding the mega-solar impact

Mega-solar impact
approx. -16.5

201.7

Enterprise NW：-7
Carrier NW：-4
Social Infra. ：-5.5+approx.22

207.5
(+3%)

Social Infra
remained
unchanged

Carrier NW+12Reaction to orders
on large mega-solar
plants in FY2018/3-12～～
9M
18/3
4Impact ofcancellation oforders on mega-solar
plants-9
1Q:-2.5
3Q:-6.5

EnterpriseNW+10New mega-solar
plants order +4.5

© NEC Networks & System Integration Corporation 20199M19/3～～

9M FY2019/3 Net Sales by Segment( )shows growthrate without solar
PJs sales(¥ Bn.)

179.3
Others5.0

Social54.3
Infra.
Carrier
42.6
Networks

Enterprise 77.4
Networks

9M
17/3
5184.9
4.7

55.5
45.9

79.0

▐ Enterprise Networks+3% Workstyle innovation-related business and
191.0 (+4%) sales of subsidiaries grew.
- Sales of Empowered Office: +7％

4.5

52.1-6%(-2%)▐ Carrier Networks
Sales for both telecom carriers and noncarriers remained solid.

48.7+6%(+3%)

85.7+9%(+9%) Business related to mega-solar plants (civil▐ Social Infrastructuresengineering) and overseas sales declined
9M
18/3

9M
19/3

© NEC Networks & System Integration Corporation 2019

Sales for broadcasting/cable TV
businesses increased.

9M FY2019/3 Operating Income by Segment(¥ Bn.)

Total 3.5（1.9%）

4.4（2.４%）

6.3

Change+1.8▐ Enterprise Networks（3.3%）(0.9pt)( ): to sales

1.2+0.6

0.6(1.2%) 3.1(6.3%)
2.9+0.2(2.3%) (+1.1pt)

Social 2.8
Infra. (5.1%)
Carrier
1.7
Networks (3.9%)EnterpriseNetworks

Others/Elimination

65.4(7.0%)(8.7%)

8.3(9.7%)

-6.4

-6.0

-6.3

9M
17/3

9M
18/3

9M
19/3

Outlaying of expenses for growth is in linewith the plan.
－DX technologies (Cloud, RPA and AI)(-0.1pt)(6.4%)

6.9

Operating income increased with higher
sales, an improved sales-mix and cost cutting.

+1.4▐ Carrier Networks(+1.0pt)-0.3© NEC Networks & System Integration Corporation 2019

Operating income increased due to higher
sales despite outlaying expenses for growth.
*Launch of new businesses, establishment of new J/V forbase stations, etc.

▐ Social Infrastructures
Fixed cost reductions and improved
efficiency led to an improvement in earnings.

9M FY2019/3 Factors of Operating Income Change(¥ Bn.)
Streamlined SG＆A
+0.2
Improvement in thecost ratio
Excluding costs forloss projects andgrowth expenses+2.2

Growthexpenses-1.3
Loss projects-0.2¥1.0 Bn in FY18/3¥1.2 Bn. in FY19/3

6.3(3.3%)

Effect of increased
sales
+1.0

4.4
(2.4%)

～～

7

9M
18/3

© NEC Networks & System Integration Corporation 2019

9M
19/3

～～

FY2019/3 Forecasts▌Revised the operating income forecast in light of strong progress inEnterprise Networks(¥ Bn.)

FY18/3

FY19/3(Forecasts)

ChangePrevious forecasts
Difference(2018/10/30)

Orders Received

287.8

290+1%290-

Net Sales

267.9280+5%280-

Operating Income

11.1

12.0

+0.9

11.5

+0.5

(to Sales)(4.1%)(4.3%)+0.2pt

(4.1%)+0.2pt

Net income

7.4

7.5

+0.1

7.5

-

(to Sales)(2.7%)(2.7%)

0.0pt(2.7%)-

attributable to owners of the parent*Forecasts as at January 30, 20198© NEC Networks & System Integration Corporation 2019

FY2019/3 Forecasts by Segment (Sales & Operating Income)▌Revised sales and operating income by segment in light of theprogress in 3Q(¥ Bn.)

Net Sales
267.9

Others

7.0782Carrier
64.9
Networks74

Enterprise
110.9
Networks
FY18/39117

FY19/3e(as atOct.2018)( ): to sales

280 +5%280

Social85.2
Infra.

Operating Income

YoY
Change7-2-2+48072

121-6%(4.1%)

Social3.4
Infra. (4.0%)
Carrier 5.0
Networks (7.7%)+11%Enterprise+9%

FY19/3e(Revised)© NEC Networks & System Integration Corporation 2019

11.1

YoY
Change11.5 +0.5 12.0 +0.9(4.1%)(4.3%)

4.5(5.6%)

4.5+1.1

5.3+0.3(5.5%)

5.3(7.2%)(7.4%)

10.8
Networks (9.7%)

10.9(9.3%) +0.5 (9.4%)

11.4 +0.６

Others/Elimination -8.2-9.2-9.2 -1.0

FY18/3

FY19/3e(as atOct.2018)

FY19/3e(Revised)*Forecasts as at January 30, 2019

End of December 2018 Balance Sheet(¥ Bn.)Cash and cash equivalents
Notes & accounts receivable
Inventories
OthersCurrent Assets
Noncurrent Assets

Assets
Notes and accounts payable
Loans
OthersLiabilities
Shareholders' equity
Accumulated othercomprehensive incomeNon-controlling interests

Diff.

-3.0
-18.8
10.3
1.1

175.2
32.4
207.6

164.8
33.7
198.5

-10.4
1.3
-9.1

40.3
8.1
57.5

34.1
7.0
54.4

-6.2
-1.1
-3.1

105.9

103.9

95.5

104.4

-10.4

-4.4

-4.0

0.4

2.3

2.6

0.4

0.6

Liabilities & Net Assets

101.7
207.6

103.0
198.5

1.3
-9.1

Owner's Equity Ratio

47.9%

50.6%

+2.7ptNet Assets

10End of Mar.18 End of Dec.18
57.3
54.3
104.4
85.6
8.2
18.6
5.3
6.4

© NEC Networks & System Integration Corporation 2019

9M FY2019/3 Cash Flows(¥ Bn.)
9M FY18/3

119M FY19/3

Operating Cash Flow (A)

5.7

6.4

Investment Cash Flow(B)-2.0-4.4

Free Cash Flows (A)+(B)

3.7

2.0

Financial Cash Flow

-4.2-5.0© NEC Networks & System Integration Corporation 2019

APPENDIX

12© NEC Networks & System Integration Corporation 2019

FY2019/3 Forecasts by Segment (Orders Receipts)(¥ Bn.)

Orders Received

Others

287.8
6.4

YoY
Change290

290

77+1%

Social87.0
Infra.

87-384-3%

Carrier 68.5
Networks75-174+８%Enterprise
Networks 125.8

121+4125-1%

FY18/3

FY19/3e(as atOct.2018)

FY19/3e(Revised)*Forecasts as at January 30, 201913

© NEC Networks & System Integration Corporation 2019

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 a variety of factors
could cause actual results to differ significantly from those projected. The
major factors affecting actual results include the economic climate andsocial trends surrounding the business of this Company’s group, consumertrends 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 inresponse to intensified competition.
Factors affecting results are not limited to the ones mentioned above.

14© NEC Networks & System Integration Corporation 2019

NEC Networks & System Integration Corporationis committed to increasing customer value byredesigning future communications from the user’sperspective.

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© NEC Networks & System Integration Corporation 2019

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16© NEC Networks & System Integration Corporation 2019