Nec Corporation · TSE:6701

Nec — Nec Corp Unsp/Adr New — Q2 2025 Earnings Presentation

32 slides from Nec's earnings presentation, Oct 29, 2024

  1. Slide 1: Financial Results for Q2 Fiscal Year Ending March 31, 2025

    6701.T Financial Results for Q2 Fiscal Year Ending March 31, 2025 October 29, 2024 NEC Corporation (https://www.nec.com/en/global/ir/) © NEC Corporation 2024

  2. Slide 2: Index

    Index I. Financial Results for Q2, FY25/3 II. Financial Forecasts for FY25/3 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, FY25/3

    I. Financial Results for Q2, FY25/3 © NEC Corporation 2024

  4. Slide 4: Summary of Financial Results for 1H, FY25/3 (Excluding JAE Deconsolidation)

    1H Results Summary of Financial Results for 1H, FY25/3 (Excluding Impact of JAE* Deconsolidation) Revenue and Adjusted Operating Profit increased YoY, Steady progress towards achieving FY25/3 forecasts Non-GAAP Revenue Operating Profit 1,486.7bil. yen 64.8bil. yen <YoY> 3.5% + <YoY> + 25.2bil. yen *

  5. Slide 5: Summary of Financial Results for 1H, FY25/3

    1H Results Summary of Financial Results for 1H, FY25/3 Q1 Q2 1H （Billions of Yen） FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 YoY YoY YoY Results Results Results Results Results Results Revenue 706.5 690.3 -2.3% 842.3 796.4 -5.4% 1,548.8 1,486.7 -4.0% Adjusted Operating Profit 0.5 12.7 +12.2 45.4 48.3

  6. Slide 6: Financial Results for 1H, FY25/3 (By Segment)

    1H Results Financial Results for 1H, FY25/3 (By Segment) Revenue and Adj. OP increased in both IT Services and Social Infrastructure Q1 Q2 1H （Billions of Yen） FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 YoY YoY YoY Results Results Results Results Results Results Revenue 385.7 418.3 +8.4% 457.3 472.3

  7. Slide 7: YoY Change in Adjusted/Non-GAAP Operating Profit

    1H Results YoY Change in Adjusted/Non-GAAP Operating Profit Improved marginal profit, profitability change, etc. +25.2 Social （Billions of Yen） Infrastructure +11.3 +0.2 IT Services Others +13.7 -6.5 Deconsolidation impact of JAE -3.8 Non-GAAP Adjusted Items 0.3 64.8 Structural Reform Expenses, etc.

  8. Slide 8: IT Services

    1H Results IT Services -Revenue increased for domestic IT and Revenue and Adjusted Operating Profit international business (DGDF)* Revenue Adj. OP Adj. OP Margin 890.6 （Billions of Yen） 843.1 -Adj. OP increased due to increased revenue in 774.3 IT Services business in Japan and improved profitabilit

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

    Q2 Results Domestic IT Services Booking Status (YoY) Significantly increased due to robust demand Q1 Q2 Q3 Q4 Q1 Q2 Notes FY24/3 FY24/3 FY24/3 FY24/3 FY25/3 FY25/3 Domestic IT Services +2% -12% +4% +2% +13% +17% Excluding NEC Facilities Ltd. +3% -4% +5% -1% +15% +18% Significant increase due to larg

  10. Slide 10: Three European Subsidiaries: Effective order backlog coverage ratio

    1H Results Three European Subsidiaries: Effective order backlog coverage ratio at the end of Q2 Effective order backlog has reached approx. 90% of the revenue plan for FY25/3 224.4 Effective order backlog coverage ratio at the end of Q2 213.1 89% 87% FY24/3* 87% FY25/3 89% Avaloq 87% 88% 92% <Effect

  11. Slide 11: Social Infrastructure

    1H Results Social Infrastructure -Adj. OP improved YoY due to cost reductions, Revenue and Adjusted Operating Profit including development expenses in Revenue Adj. OP Adj. OP Margin Telecom Services （Billions of Yen） 475.8 485.3 -Increased revenue and adj. OP in ANS* led by 441.0 steady project deli

  12. Slide 12: II. Financial Forecasts for FY25/3

    II. Financial Forecasts for FY25/3 © NEC Corporation 2024

  13. Slide 13: FY25/3 Financial Forecasts

    FY25/3 Forecasts FY25/3 Financial Forecasts No changes to FY25/3 forecasts from October 7, 2024 FY21/3 FY22/3 FY23/3 FY24/3 FY25/3 FY26/3 （Billions of Yen） Results Results Results Results Forecasts Targets Revenue 2,994.0 3,014.1 3,313.0 3,477.3 3,370.0 3,500.0 Adjusted Operating Profit 178.2 171.0

  14. Slide 14: Financial Forecast (By Segment)

    FY25/3 Forecasts Financial Forecast (By Segment) FY23/3 FY24/3 FY25/3 FY26/3 （Billions of Yen） Results Results Forecasts Targets Revenue 1,754.3 1,914.0 1,950.0 2,000.0 IT Services Adjusted Operating Profit 141.3 184.1 192.0 220.0 % of revenue 8.1% 9.6% 9.8% 11.0% Revenue 1,044.8 1,077.3 1,170.0 1,2

  15. Slide 15: IT Services

    FY2025/3 Forecast IT Services Revenue and Adjusted Operating Profit -Steady growth of domestic business is anticipated Revenue Adj. OP Adj. OP Margin following a strong FY24/3 （ Billions of Yen ） 2,000.0 -Adjusted OP growth from Avaloq anticipated in 1,914.0 1,950.0 international IT Services 11.0% <

  16. Slide 16: Social Infrastructure

    FY2025/3 Forecast Social Infrastructure Revenue and Adjusted Operating Profit -Revenue expected to increase from steady delivery Revenue Adj. OP Adj. OP Margin of projects through ANS （Billions of Yen） -Adj. OP to increase due to an improvement of 1,240.0 global 5G business as well as reversal effec

  17. Slide 17: III. Topics

    III. Topics © NEC Corporation 2024

  18. Slide 18: Commencement of Tender Offer for Shares of NESIC

    Commencement of Tender Offer for Shares of NESIC* NEC to conduct below reorganization upon making NESIC* a wholly-owned subsidiary Strengthening the business foundation in the DX domain for local governments and SMEs** in the domestic region, which has been accompanied by especially increased demand

  19. Slide 19: Outline of the Tender Offer and the Reorganization

    Outline of the Tender Offer and the Reorganization Tender Offer Reorganization From October 30, 2024 to NEC Period December 11, 2024 100% 51.36%* Current NEC Networks & Price JPY3,250 per common stock NEC Nexsolutions, Ltd. System Integration Corporation *Includes Shares contributed to the employee

  20. Slide 20: Significantly increased orders for BluStellar products

    Significantly increased orders for BluStellar products by 40% from the previous year ➢ Expanded not only in the enterprise domain but also in the public domain with large-scale projects ➢ In addition to the leading enterprises domain, plan to expand industry- specific value creation scenarios for th

  21. Slide 21: NEC Innovation Day 2024

    Introduction of NEC’s R&D and new business developments, as well as demonstration of the latest technologies NEC Innovation Day 2024 11 Main Host Corporate Executive Vice President and CTO Motoo 27 WED NEC Tamagawa office Nishihara AM For Capital market & Media 21 © NEC Corporation 2024

  22. Slide 22: Orchestrating a brighter world

    \ Orchestrating a brighter world NEC

  23. Slide 23: IV. Financial Results (Appendix)

    IV. Financial Results (Appendix) © NEC Corporation 2024

  24. Slide 24: Breakdown of IT Services

    Q2 Results Breakdown of IT Services Q1 Q2 1H FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 (Billions of Yen) YoY YoY YoY Results Results Results Results Results Results Revenue 320.2 340.1 +6.2% 385.3 395.4 +2.6% 705.4 735.5 +4.3% Domestic Adjusted Operating Profit 10.9 10.2 - 0.7 31.6 38.2 +6.6 42.6 48

  25. Slide 25: Breakdown of Social Infrastructure

    Q2 Results Breakdown of Social Infrastructure Q1 Q2 1H FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 (Billions of Yen) YoY YoY YoY Results Results Results Results Results Results Revenue 169.7 163.9 -3.4% 195.2 193.2 -1.0% 364.9 357.0 -2.1% Telecom Services Adjusted Operating Profit -6.6 0.3 +7.0 6.5 9.

  26. Slide 26: Non-GAAP Operating Profit Adjustment Items

    Q2 Results Non-GAAP Operating Profit Adjustment Items Q1 Q2 1H (Billions of Yen) FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 YoY YoY YoY Results Results Results Results Results Results Adjusted Operating Profit -8.1 4.5 +12.7 36.1 40.2 +4.0 28.0 44.7 +16.7 M&A Related Amortization of Adjusted 8.5 8.1

  27. Slide 27: Non-GAAP Net Profit Adjustment Items

    Q2 Results Non-GAAP Net Profit Adjustment Items Q1 Q2 1H (Billions of Yen) FY24/3 FY25/3 FY24/3 FY25/3 FY24/3 FY25/3 YoY YoY YoY Results Results Results Results Results Results Net Profit -7.4 -5.8 +1.6 20.3 19.3 - 1.0 12.9 13.5 +0.5 M&A related Amortization of 6.0 5.9 - 0.1 6.5 5.9 - 0.6 12.4 11.8

  28. Slide 28: Financial Position Data

    Q2 Results Financial Position Data Q2 As of As of Change from March 31, Sept. 30, March 31, (Billions of Yen) 2024 2024 2024 Total Assets 4,227.5 4,069.4 - 158.2 Total Equity 2,089.5 2,073.9 - 15.6 Interest-bearing Debt 548.6 647.4 +98.8 Equity Attributable to Owners of the Parent 1,915.6 1,903.2 -

  29. Slide 29: V. Historical Data (Appendix)

    V. Historical Data (Appendix) © NEC Corporation 2024

  30. Slide 30: Revenue Breakdown

    Revenue Breakdown FY23/3 FY24/3 FY25/3 Results Results Results （ Billions of Yen ） Q1 1H Q3 2H Full Year Q1 1H Q3 2H Full Year Q1 1H Public 67.4 156.7 94.2 246.9 403.5 73.3 179.2 101.4 256.5 435.7 75.6 184.5 Enterprise 137.3 283.2 140.2 320.0 603.2 157.1 327.1 177.5 376.8 704.0 164.1 331.9 Cross-Ind

  31. Slide 31: Adjusted OP Breakdown

    Adjusted OP Breakdown FY23/3 FY24/3 FY25/3 Results Results Results （ Billions of Yen ） Q1 1H Q3 2H Full Year Q1 1H Q3 2H Full Year Q1 1H Domestic Adjusted Operating Profit -6.4 25.7 26.0 97.2 122.9 10.9 42.6 37.9 122.6 165.1 10.2 48.4 % of revenue -2.2% 4.0% 7.7% 11.7% 8.4% 3.4% 6.0% 9.7% 13.5% 10.2

  32. Slide 32: 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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