Nec Corporation · TSE:6701

Nec — Nec Corp Unsp/Adr New — Q3 2024 Earnings Presentation

31 slides from Nec's earnings presentation, Jan 30, 2024

  1. Slide 1: Financial Results for Q3 Fiscal Year Ending March 31, 2024

    6701.T Financial Results for Q3 Fiscal Year Ending March 31, 2024 January 30, 2024 NEC Corporation (https://www.nec.com/en/global/ir/) © NEC Corporation 2024

  2. Slide 2: Index

    Index I. Financial Results for Q3, FY24/3 II. Financial Forecasts for FY24/3 III. Topics IV. Financial Results (Appendix) V. Historical Data (Appendix) * Net profit refers to net profit attributable to owners of the parent for the same period.

  3. Slide 3: I. Financial Results for Q3, FY24/3

    I. Financial Results for Q3, FY24/3 © NEC Corporation 2024

  4. Slide 4: Summary of Financial Results for Nine Months, FY24/3

    9 month Results Summary of Financial Results for Nine Months, FY24/3 Steady progress toward achieving full year forecast 1H Q3 9 months FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 （Billions of Yen） YoY YoY YoY Results Results Results Results Results Results Revenue 1,455.4 1,548.8 +6.4% 813.9 844.5 +3

  5. Slide 5: Q3 YoY Change in Adjusted/Non-GAAP Operating Profit

    Q3 Results Q3 YoY Change in Adjusted/Non-GAAP Operating Profit （Billions of Yen） 0.6 Non-GAAP 2.1 Adjusted Non-GAAP Items Adjusted Items Structural Reform Expenses, etc. 52.2 52.8 +10.0 53.3 Marginal profit, 51.2 profitability change, etc. -14.5 +5.0 Intellectual One-time Property Factor in (IP) inc

  6. Slide 6: 9 Months YoY Change in Adjusted/Non-GAAP Operating Profit

    9 month Results 9 Months YoY Change in Adjusted/Non-GAAP Operating Profit （Billions of Yen） 2.4 Non-GAAP Adjusted Items Structural reform expenses, etc. 12.2 Non-GAAP +30.2 99.4 97.0 Adjusted Marginal profit, 83.4 Items profitability change, etc. Asset sales, 71.2 -14.5 +12.5 etc IP income One-time

  7. Slide 7: Financial Results for 9 Months, FY24/3 (By Segment)

    9 month Results Financial Results for 9 Months, FY24/3 (By Segment) 1H Q3 9 months （Billions of Yen） FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY YoY Results Results Results Results Results Results Revenue 774.5 843.4 +8.9% 410.6 471.2 +14.7% 1,185.2 1,314.5 +10.9% IT Services Adjusted Operatin

  8. Slide 8: IT Services

    9 month Results IT Services Revenue and Adjusted Operating Profit -Revenue increased steadily for the enterprise Revenue Adj. OP Adj. OP Margin （Billions of Yen） 1,314.5 and the government / public sectors 1,185.2 1,118.3 -Adj. OP increased due to increased revenue and improvement of profitability i

  9. Slide 9: IT Services Booking Status (YoY)

    9 month Results IT Services Booking Status (YoY) IT services demand remains strong Q1 Q2 Q3 Notes 9 months IT Services +3% -4% +2% Excluding NEC Facilities Ltd. +4% ±0% Domestic +2% -12% +4% -3% Public +6% -15% -3% Maintained the same level of strength as Q3 FY23/3 -4% Enterprise* +16% +12% +8% +12%

  10. Slide 10: Social Infrastructure

    9 month Results Social Infrastructure Revenue and Adjusted Operating Profit Revenue Adj. OP Adj. OP Margin （Billions of Yen） -Revenue and adj. OP remained the same level YoY 735.6 in Telecom Services 717.9 643.5 -Orders increased by 60% YoY with large projects, steady revenue and adj. OP in ANS* 5.8

  11. Slide 11: II. Financial Forecasts for FY24/3

    II. Financial Forecasts for FY24/3 © NEC Corporation 2024

  12. Slide 12: FY24/3 Financial Forecasts

    FY24/3 FY24/3 Financial Forecasts Forecasts No changes to FY24/3 annual forecasts Full Year FY24/3 Change FY23/3 （Billions of Yen） Forecasts YoY from previous Results (Jan. 30) forecasts Revenue 3,313.0 3,380.0 +2.0% ±0.0 Adjusted Operating Profit 205.5 220.0 +14.5 ±0.0 % of revenue 6.2% 6.5% +0.3%

  13. Slide 13: FY24/3 Financial Forecasts by Segment

    FY24/3 FY24/3 Financial Forecasts by Segment Forecasts Revised FY24/3 forecasts by segments based on 9 months results Full Year FY24/3 Change (Billions of Yen) FY23/3 Forecasts YoY from previous Results (Jan. 30) forecasts Revenue 1,755.0 1,830.0 +4.3% +30.0 IT Services Adjusted Operating Profit 168

  14. Slide 14: IT Services Forecasts

    FY24/3 Forecasts IT Services Revenue and Adjusted Operating Profit Revenue Adj. OP Adj. OP Margin （Billions of Yen） -Revenue expected to increase in anticipation of 1,830.0 strong domestic demand mainly in private sector 1,755.0 1,617.9 -Adj. OP increase due to an increase in domestic revenue <Ref.>

  15. Slide 15: Social Infrastructure Forecasts

    FY24/3 Forecasts Social Infrastructure Revenue and Adjusted Operating Profit Revenue Adj. OP Adj. OP Margin （Billions of Yen） -Revenue expected to increase in ANS 1,062.2 1,085.0 -Adj. OP increase due to an increase in ANS revenue 929.3 and reversal effect from one-time expenses in Telecom Services

  16. Slide 16: III. Topics

    III. Topics © NEC Corporation 2024

  17. Slide 17: Generative AI

    Generative AI Announced “cotomi,” a generative AI brand developed by NEC Providing an optimal environment for the use of generative AI centered on industry- and business-specific models • Enhanced “cotomi” with a large amount of high-quality training data • Announced the launch of managed applicatio

  18. Slide 18: ESG Day

    ESG Day Mar 15 (Fri) 11:00～12:00 (JST) Webcast Program • Initiatives to Address Materiality toward Enhancing Corporate Value Osamu Fujikawa, Corporate EVP and CFO • Human Capital Management Daisuke Horikawa, Corporate EVP and CHRO 18 © NEC Corporation 2024

  19. Slide 19: Orchestrating a brighter world

    \ Orchestrating a brighter world NEC

  20. Slide 20: IV. Financial Results (Appendix)

    IV. Financial Results (Appendix) © NEC Corporation 2024

  21. Slide 21: Breakdown of IT Services

    9 month Results Breakdown of IT Services 1H Q3 9 months （Billions of Yen） FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY YoY Results Results Results Results Results Results Revenue 636.1 705.7 +10.9% 338.1 393.0 +16.2% 974.2 1,098.7 +12.8% Domestic Adjusted OP 38.7 54.8 +16.1 32.4 43.1 +10.7 71.1

  22. Slide 22: Breakdown of Social Infrastructure

    9 month Results Breakdown of Social Infrastructure 1H Q3 9 months (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY YoY Results Results Results Results Results Results Revenue 339.7 367.9 +8.3% 216.5 192.8 -11.0% 556.3 560.6 +0.8% Telecom Services Adjusted OP -5.1 5.9 +11.0 19.7 8.

  23. Slide 23: IT Services: Revenue Breakdown

    9 month Results IT Services: Revenue Breakdown 1H Q3 9 months (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 YoY Portion YoY Portion YoY Portion Results Results Results Results Results Results Public 157.9 178.1 +12.7% 21.1% 94.9 101.4 +6.8% 21.5% 252.8 279.4 +10.5% 21.3% Enterprise 289

  24. Slide 24: Non-GAAP Operating Profit Adjustment Items

    9 month Results Non-GAAP Operating Profit Adjustment Items Q3 9 months (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Operating Profit 43.2 41.8 -1.4 57.1 69.8 +12.7 M&A Related Amortization of Adjusted 8.8 9.3 +0.5 25.3 26.9 +1.5 Intangible Assets Items M&A Re

  25. Slide 25: Non-GAAP Net Profit Adjustment Items

    9 month Results Non-GAAP Net Profit Adjustment Items Q3 9 months (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Net Profit 22.4 21.1 -1.3 26.4 34.0 +7.7 M&A related Amortization of Intangible Assets and 6.1 6.5 +0.4 17.9 19.0 +1.1 M&A related Expenses Structura

  26. Slide 26: Financial Position Data

    Q3 Results Financial Position Data Q3 As of As of Change from March 31, December.31, March 31, (Billions of Yen) 2023 2023 2023 Total Assets 3,984.1 4,090.9 +106.9 Total Equity 1,912.7 1,996.8 +84.1 Interest-bearing Debt 608.5 668.3 +59.8 Equity Attributable to Owners of the Parent 1,623.8 1,698.6 +

  27. Slide 27: V. Historical Data (Appendix)

    V. Historical Data (Appendix) © NEC Corporation 2024

  28. Slide 28: (Ref.) New Segment Overview

    (Ref.) New Segment Overview Main Businesses, Markets, Customers Public Central and Local Government Enterprise Enterprise (Finance, Manufacturing, Retail / Services), NEC Facilities Domestic Fire-fighting / Disaster prevention Systems, Smart City (Transportation, IT Services Cross-Industry Energy ma

  29. Slide 29: Revenue Breakdown

    Revenue Breakdown FY22/3 Results FY23/3 Results (Billions of Yen) Q1 1H Q3 2H Full Year Q1 1H Q3 2H Full Year Public 71.4 159.9 86.9 230.9 390.7 66.1 157.9 94.9 246.4 404.3 Enterprise 136.8 282.0 131.5 292.3 574.4 140.4 289.0 142.8 325.7 614.7 Cross-Industry 29.1 61.6 29.1 75.9 137.5 20.2 49.7 27.7

  30. Slide 30: Adjusted OP Breakdown

    Adjusted OP Breakdown FY22/3 Results FY23/3 Results (Billions of Yen) Q1 1H Q3 2H Full Year Q1 1H Q3 2H Full Year Domestic Adj. OP 6.9 30.8 24.3 90.5 121.2 -0.1 38.7 32.4 110.0 149.6 % of revenue 2.3% 4.9% 7.8% 12.2% 8.9% -0.0% 6.1% 9.6% 13.4% 10.2% DGDF Adj. OP 2.4 5.7 4.4 10.3 16.0 0.7 3.8 3.0 14.

  31. Slide 31: Cautionary Statement with Respect to Forward-Looking Statements

    Cautionary Statement with Respect to Forward-Looking Statements This material contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the NEC Group (the "forward-looking sta

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