Financial Results for the

First 9 Months ending March 2023

January 30, 2023

Hiroyuki Sekizawa, Senior Vice President & CFO NEC Networks & System Integration Corporation (TSE: 1973, NESIC)

© NEC Networks & System Integration Corporation 2023

9M FY2023/3 Summery

(¥ Bn.)

9M

9M

Change

FY2022/3

FY2023/3

Orders received

243.5

250.0

+3%

Net sales

218.8

221.9

+1%

Gross profit

42.0

43.5

+1.5

(to sales)

19.2%

19.6%

+0.4pt

SG&A

29.8

32.4

-2.5

Operating income

12.2

11.2

-1.0

OP & NP decreased

due to SG&A increase and FX impact, although orders backlog expanded

Orders:

  • Led by DX, orders remained firm as a whole, with partial delay to 4Q

Enterprises

Telecom. carriers

Sales:

  • SI/construction sales were flat

(to sales)

(5.6%)

(5.0%)

-0.6pt

Net income

Profits:

due to longer lead time of PJs

attributable to owners of the parent

7.7

6.1

-1.6

(to sales)

(3.5%)

(2.8%)

-0.7pt

Free cash flows

9.2

-2.3

-11.6

Orders backlog

162.9

195.0

+20%

1 © NEC Networks & System Integration Corporation 2023

  • In addition to delayed sales, active SG&A increase (-2.5) and yen depreciation (-1.2) impacted
  • Special factors (overseas) had positive impacts

(+2.1)

・Loss in Thai PJ (-1.1: 2Q) ・Myanmar PJ (+3.2) *see P.3

9M FY2023/3 Orders Received/Net Sales by Business Model

SI/construction: Orders increased with sales shift to 2H

Service: Although orders fluctuate due to the timing of large contracts,

sales is steadily expanding (*Large contracts of government PJs in 1H, FY22/3)

Orders received

（¥ Bn.）

243.5

250.0

SI/con-

158.9

＋6％

168.8

struction

65％

％

68

Services

84.7

-４％

81.2

35％

％

32

9M

9M

FY22/3

FY23/3

2 © NEC Networks & System Integration Corporation 2023

Net sales

218.8221.9

132.3

132.9

-0％

61％

60％

86.0 +4％ 89.6

39％

40％

9M

9M

FY22/3

FY23/3

Operating Income Analysis

（¥ Bn.）

Partial reversal of

Loss in Thai PJ

allowances for

-1.1

Myanmar PJ

Impact of

+1.4*

FX impacts

allowances for

-1.2

Improvement

Myanmar PJ

Increase of allowances in 1H

+0.６

in FY22/3

by FX -0.6

Reversal of allowances in 3Q +2.0

SG＆A

+1.8*

12.2

Other than Myanmar PJ

-2.5

(5.6%)

11.2

(5.0％)

（Overseas factor in FY22/3） （Overseas factors in FY23/3）

+2.1

～

～

～

～

9M

*Myanmar impacts total: ¥3.2 Bn.

9M

FY22/3

FY23/3

3

© NEC Networks & System Integration Corporation 2023

9M FY2023/3 Orders Received by Segment

（¥ Bn.）

▐ DX Solutions (DXS)

253.5

243.5

250.0

+3%

⚫ Increased SI/construction area such as

GIGA School

product biz for financial companies (+2.9)

14.5

DXS

⚫ DX/workstyle field was strong despite of

93.7

87.8

89.5

＋2％

absence of large PJs in FY22/3 (+10％)

▐ Network Solutions (NWS)

NWS

61.1

+1%

⚫ Local 5G & marine biz increased

59.6

61.6

⚫ Telecom carrier biz decreased

GIGA School

-Value-added biz such as support of efficient operation using

DX increased

14.5

ESS

92.8

91.2

92.6

+2%

▐ Environmental & Social Solutions (ESS)

⚫ Domestic SI/construction area such as a

Others

7.5

3.4

6.2

large disaster prevention PJ made up for a

9M

9M

9M

large overseas PJ* in FY22/3

FY21/3

FY22/3

FY23/3

*A plant network PJ in Saudi Arabia

4 © NEC Networks & System Integration Corporation 2023

※Segment information for FY21/3 & FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

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NEC Networks & System Integration Corporation published this content on 30 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 January 2023 09:53:04 UTC.