Nec Corporation · TSE:6701

Nec — Nec Corp Unsp/Adr New — Q2 2024 Earnings Presentation

29 slides from Nec's earnings presentation, Oct 30, 2023

  1. Slide 1: Financial Results for Q2 Fiscal Year Ending March 31, 2024

    6701.T Financial Results for Q2 Fiscal Year Ending March 31, 2024 October 30, 2023 NEC Corporation (https://www.nec.com/en/global/ir/) © NEC Corporation 2023

  2. Slide 2: Index

    Index I. Financial Results for Q2, 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 Q2, FY24/3

    I. Financial Results for Q2, FY24/3

  4. Slide 4: Summary of Financial Results 1H, FY24/3

    1H Results Summary of Financial Results 1H, FY24/3 Both Revenue and Profit increased. Good progress for FY24/3 Annual Forecasts Q1 Q2 1H FY23/3 FY24/3 FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY YoY （Billionsof （Billions ofYen） Yen） Results Results Results Results Results Results Revenue 659.7 706.5 +7.1% 7

  5. Slide 5: Financial Results 1H, FY24/3 (By Segment)

    1H Financial Results 1H, FY24/3 (By Segment) Results Q1 Q2 1H 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 355.3 385.8 +8.6% 419.2 457.5 +9.1% 774.5 843.4 +8.9% IT Services Adjusted Operating Profit 0.7 17.8 +17.1 41.

  6. Slide 6: IT Services

    1H Results IT Services Revenue and Adjusted Operating Profit • Revenue increased steadily for the enterprise Revenue Adj. OP Adj. OP Margin （Billions of Yen） and the government / public sector 843.4 743.3 774.5 • Adj. OP increased due to increased revenue and improvement of profitability in system i

  7. Slide 7: IT Services Booking Status (YoY)

    1H Results IT Services Booking Status (YoY) IT services demand remains strong Q1 Q2 1H Notes IT Services +3% -4% -1% Excluding NEC Facilities Ltd. +4% Domestic +2% -12% -5% Public +6% -15% -4% Reversal effect of large projects in FY23/3 Enterprise* +16% +12% +14% Finance +37% +41% +39% Increased sig

  8. Slide 8: Social Infrastructure

    1H Results Social Infrastructure Revenue and Adjusted Operating Profit • Adj. OP improved due to structural reform in Revenue Adj. OP Adj. OP Margin Global 5G business, the reversal effect from （Billions of Yen） one-off loss of JPY7.5 bil. recorded in FY23/3 478.8 442.9 and an increase of revenue fo

  9. Slide 9: II. Financial Forecasts for FY24/3

    II. Financial Forecasts for FY24/3

  10. Slide 10: FY24/3 Financial Forecasts

    FY24/3 FY24/3 Financial Forecasts Forecasts No changes to FY24/3 forecasts from July 28, 2023 Change FY23/3 FY24/3 (Billions of Yen) YoY from previous Results Forecasts forecasts (July.28) Revenue 3,313.0 3,380.0 +2.0% ±0% Adjusted Operating Profit 205.5 220.0 +14.5 ±0.0 % of revenue 6.2% 6.5% +0.3%

  11. Slide 11: FY24/3 Financial Forecasts by Segment

    FY24/3 FY24/3 Financial Forecasts by Segment Forecasts Full Year Change (Billions of Yen) FY23/3 FY24/3 from Previous YoY Results Forecasts Forecasts (July.28) Revenue 1,755.0 1,800.0 +2.6% ±0% IT Services Adjusted Operating Profit 168.0 177.0 +9.0 ±0.0 % of revenue 9.6% 9.8% +0.3% ±0% Revenue 1,062

  12. Slide 12: IT Services

    FY24/3 Forecasts IT Services Revenue and Adjusted Operating Profit Revenue YoY 1,800.0 +2.6 % Revenue Adj. OP Adj. OP Margin （Billions of Yen） 1,755.0 1,800.0 1,617.9 Adjusted YoY Operating Profit 8.5% 9.6% 9.8% 177.0 +9.0 168.0 177.0 137.2 -Revenue expected to increase in anticipation of strong dom

  13. Slide 13: Social Infrastructure

    FY24/3 Forecasts Social Infrastructure Revenue and Adjusted Operating Profit Revenue YoY 1,085.0 +2.1 % Revenue Adj. OP Adj. OP Margin （Billions of Yen） 1,062.2 1,085.0 929.3 Adjusted YoY Operating Profit 95.0 +21.2 8.8% 7.5% 6.9% -Revenue expected to increase both in Telecom 95.0 69.4 73.8 Services

  14. Slide 14: III. Topics

    Ill. Topics \orchestrating a brighter world PEE

  15. Slide 15: Developed and started offering lightweight LLM with world-class Japanese performance

    Generative AI Developed and started offering lightweight LLM* with world- class performance in the Japanese language • Established an organization consisting of approx. 110 specialists directly under the Chief Digital Officer (CDO) • Work in progress with 15 entities, including private corporations

  16. Slide 16: NEC IR Day 2023 / NEC Innovation Day 2023

    NEC IR Day 2023 Nov 30 (Thu) 13:00～17:00 Webcast Program • Mid-term Management Plan 2025 and CFO topics O. Fujikawa, Corporate EVP and CFO • IT Services K. Sakai, Corporate Senior EVP and Co-COO T. Yoshizaki, Corporate EVP and CDO • Social Infrastructure M. Yamashina, Corporate Senior EVP and Co-COO

  17. Slide 17: Orchestrating a brighter world

    \ Orchestrating a brighter world NEC

  18. Slide 18: IV. Financial Results (Appendix)

    IV. Financial Results (Appendix)

  19. Slide 19: Breakdown of IT Services

    1H Results Breakdown of IT Services Q2 1H (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Revenue 348.6 385.5 +10.6% 636.1 705.7 +10.9% Domestic Adj. OP 38.7 37.9 - 0.8 38.7 54.8 +16.1 % of Revenue 11.1% 9.8% -1.3% 6.1% 7.8% +1.7% Revenue 70.6 72.1 +2.1% 138.4 1

  20. Slide 20: Breakdown of Social Infrastructure

    1H Results Breakdown of Social Infrastructure Q2 1H (Billions of Yen) FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Revenue 186.5 196.4 +5.3% 339.7 367.9 +8.3% Telecom Services Adj. OP 0.4 9.1 +8.8 -5.1 5.9 +11.0 % of Revenue 0.2% 4.7% +4.5% -1.5% 1.6% +3.1% Revenue 59.1 67.4 +

  21. Slide 21: IT Services: Revenue Breakdown

    1H Results IT Services: Revenue Breakdown Q2 1H FY23/3 FY24/3 FY23/3 FY24/3 (Billions of Yen) YoY Portion YoY Portion Results Results Results Results Public 91.8 105.0 +14.4% 23.0% 157.9 178.1 +12.7% 21.1% Enterprise 148.6 173.0 +16.5% 37.8% 289.0 332.3 +15.0% 39.4% Cross-Industry 29.5 29.6 +0.2% 6.

  22. Slide 22: Non-GAAP Operating Profit Adjustment Items

    1H Results Non-GAAP Operating Profit Adjustment Items Q2 1H （Billions of Yen） FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Operating Profit 29.2 36.1 +6.9 13.9 28.0 +14.1 Adjusted M&A Related Amortization of Intangible Assets 8.5 9.1 +0.6 16.5 17.5 +1.0 Items M&A Related Expen

  23. Slide 23: Non-GAAP Net Profit Adjustment Items

    1H Results Non-GAAP Net Profit Adjustment Items Q2 1H （Billions of Yen） FY23/3 FY24/3 FY23/3 FY24/3 YoY YoY Results Results Results Results Net Profit 17.8 20.3 +2.5 4.0 12.9 +8.9 M&A related Amortization of Intangible Assets and 6.1 6.5 +0.4 11.8 12.4 +0.7 M&A related Expenses Adjusted Structural R

  24. Slide 24: Financial Position Data

    Q2 Results Financial Position Data Q2 As of As of Change from March 31, September.30, March 31, （Billions of Yen） 2023 2023 2023 Total Assets 3,984.1 4,078.1 +94.1 Total Equity 1,912.7 1,995.9 +83.2 Interest-bearing Debt 608.5 641.8 +33.3 Equity Attributable to Owners of the Parent 1,623.8 1,696.8 +

  25. Slide 25: V. Historical Data (Appendix)

    V. Historical Data (Appendix) © NEC Corporation 2023

  26. Slide 26: (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

  27. Slide 27: 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

  28. Slide 28: 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.

  29. Slide 29: 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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