Financial Results for the 1Q
for the FY ending March 2021
July 30, 2020
NEC Networks & System
Integration Corporation(TSE: 1973, NESIC)1Q FY2021/3 Summary▐ Orders received and sales grew and operating income moved into the black.
 Large projects contributed to a high level of total orders (educationalmarket and submarine seismometers).
 COVID-19 had a slightly negative impact on 1Q results.
・Project delays caused a setback despite growing demand(¥ Bn.)
for teleworking.
1Q
FY20/3

1Q
FY21/3

ChangeOrders received

74.1

84.4

+14%

Net sles60.567.4＋11%

GP margin

14.4%

15.4%

+1.0ptOperting income

-0.18

1.01

+1.2

(to sales)ー(1.5%)ーNet income

0.02

0.33

(to sales)(0.0%)(0.5%)+0.3 ＊+0.5pt

Free cash flows

15.4

16.5

+1.1

attributable to owners of the parent*Including a decrease in extraordinary losses (+1.9) and a reactionary impact of review of the recoverabilityof deferred tax assets in 1Q FY20/3(-1.6)
2© NEC Networks & System Integration Corporation 2020

1Q FY2021/3 Orders Received by Segment▐ Digital Solutions (DSL)(¥ Bn.)

84.4 +14%
74.1
66.2

34.0 +28%
26.5

DSL

NWI

21.0ESS

17.6

Others3▐ Network Infra. (NWI)

25.1

23.1

 Large projects for educational market ledthe growth.
 Workstyle innovation related business
continued to grow.
・ Growth in demand for introduction of
teleworking accelerated.
 Some industries indicated a sense ofslowdown.

25.4 +10%

 Telecom carrier & broadcasting
business increased.
・ Submarine seismometers project
and KNSI orders led the growth.

▐ Engineering & SupportServices (ESS)
22.3

22.2

2.6

2.2

2.8

1Q
FY19/31QFY20/3

1Q
FY21/3-1%© NEC Networks & System Integration Corporation 2020

 Orders from local educational institutions
compensated for a reactionary fall fromthe large number of projects for local
governments in the previous 1Q.
※Segment information FY19/3 & FY20/3 has been reclassified
to reflect the inter-segment business transfer in April 2020.

1Q FY2021/3 Net Sales by Segment(¥ Bn.)

67.4 +11% ▐ Digital Solutions (DSL) Workstyle innovation related businessexpanded.

60.5
55.5
26.8
DSL

21.2

24.1

14.6

15.4

ESS

17.8

17.8

Others1.8

NWI1Q
FY19/34+11%

3.2

1Q
FY20/3▐ Network Infra. (NWI)
 Telecom carrier & broadcasting businessincreased.
・ KNSI sales expanded.

16.6+8%20.8 +17%
3.1

1Q
FY21/3© NEC Networks & System Integration Corporation 2020

▐ Engineering & Support
Services (ESS) Domestic construction business (megasolar and regional constructionbusinesses) expanded.

1Q FY2021/3 Operating Profit & Loss by Segment（YoY）(¥ Bn.)※( ): to sales

Total -0.3

1.0-0.2+1.2（1.5%） （ ‐ ）

（‐）

（‐）

2.1(7.8%)

DSLESS
NWI

1.2(5.9%)

0.7+0.9

NWI
0.2(1.0%)-0.1
ESS-0.2

1Q
FY19/3+0.0(+0.3pt)

0.7( - )(+0.2pt)(7.6%) (1.3%) 0.2(3.7%)

Others-2.1
Elimination

5DSL 1.8+0.3(3.5%)

( - )

( - )

-2.0

1Q
FY20/3-2.0+0.01Q
FY21/3© NEC Networks & System Integration Corporation 2020

▐ Operating income moved into theblack by raising sales and decreased
losses in unprofitable projects despite
accelerated investment in growth.

▐ Digital Solutions (DSL)・ Profit increased thanks to salesgrowth.

▐ Network Infra. (NWI)
・Reorganization effect wasmaintained despite an increasein growth expenses.

▐ Engineering & SupportServices (ESS)・Profitability improved due todecrease in provision for loss forunprofitable projects

FY2021/3 Full Year Forecasts▐ Aim for record high performance by expanding businesses such as theworkstyle innovation and education markets and telecom carriers.
Considering the risk of future surges, the impact of COVID-19 is assumed to bea negative 1 billion yen in and after the 2nd quarter (a negative 1.5 billion yenin full-year profit).

(¥ Bn.)

FY20/3

FY21/3Forecasts

ChangeOrders received

305.0

310+2%Net sales

303.6

312

+3%

Operating income

16.2

18.0+1.8(to sales)
Net income(5.4%)(5.8%)+0.4pt9.4

10.5+1.1(3.1%)(3.4%)+0.3ptattributable to owners of the parent(to sales)*Forecasts as at July 30, 2020
6

© NEC Networks & System Integration Corporation 2020

FY2021/3 Full Year Forecasts by Segment*Forecasts as at July 30, 2020(¥ Bn.)
Orders
+2%
305.0
115

DSL.2+3％

Sales+3%

310

119

303.6

DSL

Operating income( ):to sales

18.0+1.8(5.8%)
16.2

312(5.4%)

112.8 +2%

115

DSL

87.7

ESS

92.0

Others

7+4%

9189

ESS

10.0

11Others

FY20/3

FY21/3e-3%83.1 +3%

NWI

97.
4+4％

10.3

10FY20/3

FY21/3e© NEC Networks & System Integration Corporation 2020

8.0

8.1

(9.3%)

ESS

6.7(6.9%)+2.8(9.4%)

Others/Elimination

-10.3

-1.2

-11.5

86

101

(10.3%)

-0.1

NWI
NWI

11.7

12.0+0.3 (10.4%)(9.8%)

FY20/39.5

FY21/3eDividend Plan▐*Forecasts as at July 30, 2020

Increasing the corporate value through growth investment
and continuing to increase shareholder return based on stabledividend at the same time.
 Taking DOE (dividend on equity ratio) into account.
 FY21/3: Planning increased dividend of ¥28 per share* 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.

Planning increase for the14th year in a row
Dividendper share
(¥)

12.0

4.7
FY07/3824.0 24.7

・・・・
© NEC Networks & System Integration Corporation 2020

12.3

26.0

13.3

27.3 28

14.014Yearend

14

Interim

21/3e

12.0

12.3

12.7

13.3

17/3

18/3

19/3

20/3

Topics: Now Normal Declaration
Enforcing NESIC Normal toward New Normal
Accelerate evolution by “Co-creation & self-implementation”
as a pioneer in work-style innovation

Further
By now
Distributed work
Co-creative office(2019～）

Evolving “NESIC Normal”“Co-creation×Self-implementation”“Digital×5G”

Telecommuting(2015～)

Aim of New
NormalInnovation

Well-being
Diversity
BCP
Eco

Health and Productivity Management
Innovation＋Against pandemic
Work in local reas (avoiding Tokyo concentration)
Work-life-balance
Office innovation(2007～)
9Productivity of white-workers© NEC Networks & System Integration Corporation 2020

APPENDIX

10© NEC Networks & System Integration Corporation 2020

1H FY2021/3 Forecasts by Segment*Forecasts as at July 30, 2020(¥ Bn.)
Orders
+3%

151.7
55.

DSL

446.

ESS

156

＋1%

5853.

DSL

46( ):to sales

142

ESS

4.45Others

1H
FY20/3

1H
FY21/3e

+3%

55
DSL

35.5 +4%

41.
6+8％

37

45

6.05

1H
FY20/3

1H
FY21/3e© NEC Networks & System Integration Corporation 2020

4.4+0.1 4.5(3.2%)(3.2%)

2NWI

476Others

11+5％

Operating income+4%
136.3

45.3 +2%

NWI

Sales

4.8(8.9%)+0.1(8.9%)

1.8

0.0(4.9%)+0.6(5.3%)(6.2%)

-4.4

-5.0

NWI

(5.2%)ESS

2.2

Others/Elimination

4.9

1H
FY20/3

-0.6

1.8
2.8

1H
FY21/3e1Q FY2021/3 (June 2020) Balance Seat(¥ Bn.)End of Mar.20 End of Jun.20

58.3
113.1
13.2
7.3

72.4
82.7
11.9
7.8

14.0
-30.4
-1.3
0.5

Noncurrent Assets

191.8
38.4

174.7
38.6

-17.2
0.2

Assets

230.2

213.3

-16.9Others

43.1
8.7
64.9

34.4
8.5
59.0

-8.7
-0.2
-5.9

Liabilities

116.7

101.9

-14.9

114.5

112.7

-1.8

-4.1

-4.2

-0.1

3.1

3.0

-0.2

Liabilities & Net Assets

113.5
230.2

111.5
213.3

-2.1
-16.9

Owner's Equity Ratio

47.9%

50.9%

+3.0ptCash and cash equivalents
Notes & accounts receivable
Inventories
OthersCurrent Assets

Notes and accounts payable
Loans/debt

Shareholders' equity
Accumulated othercomprehensive income
Non-controlling interests

Net Assets

12Diff.

© NEC Networks & System Integration Corporation 2020

1Q FY2021/3 Cash Flows(¥ Bn.)
1Q
FY20.3131Q
FY21.3

ChangeOperating Cash Flow (A)

16.9

17.5

0.6

Investment Cash Flow(B)

-1.5

-1.0

0.5

Free Cash Flows (A)+(B)

15.4

16.5

1.1

Financial Cash Flow

-1.8

-1.9

-0.0

Cash & cash equivalent

67.9

72.4

4.4

© NEC Networks & System Integration Corporation 2020

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 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 to intensifiedcompetition.
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 hasbeen recalculated to reflect the change in the content of business segments.
(FY2019/3 figures are un-audited)14© NEC Networks & System Integration Corporation 2020

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

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© NEC Networks & System Integration Corporation 2020

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