Nec Corp Unsp/Adr New

Thank you very much for attending our briefing on the financial results for Q3FY ending March 2025, which was announced today. Here are the topics I am covering today. Firstly, financial results for Q3FY ending March 2025. Page 4 shows the key Q3 takeaways. Nine-month results show a significant improvement in domestic IT services and aerospace and national security business. Revenue was 2,312,000,000,000 yen and non-GAAP OP was 162,000,000,000,000 yen. Excluding the impact of JAE deconsolidation, revenue increased 4.5% year-on-year and non-GAAP OP increased by 75.9 billion yen, surpassing our expectations. Considering such progress to date, we made an upward revision to our full-year forecasts. Non-GAAP OB is revised to 280 billion yen, an increase of 25 billion yen from the previous forecast. Page 5, Summary of Key Figures. Page 6, Results by Segment. The details will follow, but please note that both revenue categories and OP increase in IT services and social infrastructure. In others, both revenues and OP declined, but this was due to the deconsolidation of JAE. Factoring in all these elements, adjusted operating profit landed at 150.2 billion yen, up 53.2 billion yen year-on-year. Page 7. Year-on-year change in adjusted non-GAAP operating profit. Adjusted OP for FY ending March 2024 was 97 billion yen, and non-GAAP OP was 99.4 billion yen. Starting from this point, as you can see here, there was a significant improvement in IT services and social infrastructure, which resulted in a 75.9 billion yen improvement in marginal profit. Having posted minus 12.9 billion yen for the deconsolidation of JAE, non-GAAP OB for the first nine months of FY ending March 2025 resulted in 162.3 billion yen. Non-GAAP adjustment items total 12.1 billion yen, which includes an 8.3 billion yen restructuring-related expense incurred in Q3 and 3.8 billion yen recorded in the first half. Under such backdrop, adjusted OP ended at 150.2 billion yen. Please refer to pages 25 and 26 of the appendix for non-GAAP OP adjustment items. Page 8 is the first slide on segment. Firstly, IT services. Excluding NEC facilities, domestic revenue increased 7% and that of international DGDF business rose 8%, showing a favorable trend. Adjusted OP increased significantly due to improved profitability both in Japan and overseas in addition to increased profits from higher revenue projects. Page 9. Domestic IT Services Booking Status Excluding NEC facilities, overall domestic IT services increased 9% year-on-year. indicating continued strong demand. By service area, orders for public services increased 36% year-on-year in the third quarter following the momentum of Q1 and Q2. mainly driven by the municipal government's platform standardization projects. Enterprises continue to see robust demand in all business domains. Finance and retail services sectors decreased due to a reversal effect from the previous year. However, the pipeline of projects remains strong. Manufacturing increased 13% due to completing a round of practice of selecting orders based on profitability and an increase in DX-related projects. ABEAM Consulting also continued to perform well, registering a 10% increase. Page 10. Social Infrastructure Despite one-off gains and losses, telecom services posted an increase due to cost reductions mainly in development area. Details are shown in the following slide. ANS achieved a significant increase in both revenue and profit through steady execution of projects at hand.

Page 11. Next is Details of Telecom Services. This shows the variance from last fiscal year for the nine-month accumulated adjusted operating profit. For submarine systems, costs have increased due to scheduled delays with multiple existing projects. These projects will complete during this fiscal period. and to improve quality for the overall business, we have already reviewed contract conditions and processes for new contracts and anticipate a recovery to normal profit ratio next fiscal year and onwards. Other than that, operational improvements and cost efficiency is progressing smoothly, and due to one-off gains, we see a significant upside. Next is financial forecasts for fiscal year ending March 2025. Page 13 illustrates financial forecasts for FY25 March. As mentioned in the beginning, we have amended our forecast. Revenue forecast has been updated by 40 billion yen vis-à-vis our initial forecast to 3,410,000,000 yen. Adjusted operating profit is 260 billion yen, an increase of 5 billion yen. Non-GAAP operating profit will be amended by plus 25 billion yen to 280 billion yen. Non-GAAP net profit will now be 182 billion yen, an increase by 17 billion yen. Page 14 shows changes in adjusted and non-GAAP operating profit. From our forecast of 255 billion yen on October 29, we have now reflected a total of 25 billion yen upside mainly around IT services and will increase non-GAAP operating profit to 280 billion yen. As for non-GAAP adjusted items, adding to our Q3 accumulated 12.1 billion yen, We have also incorporated a total 20 billion yen, assuming structural expenses, etc. Page 15 is a breakdown by segment. Each segment will be explained in the following pages. Page 16 is IT services. Overall IT services revenue is 2 trillion 30 billion yen, an increase of 80 billion yen. Adjusted operating profit will be amended to 212 billion yen and increased by 20 billion yen. Domestic IT services led by favorable public services will reflect increases in both revenue and profit gains and amended upwards by 20 billion yen for adjusted operating profit. International DGDF in consideration of the weaker yen will only change revenue. Page 17 is Social Infrastructure. Overall revenue is minus 40 billion yen, amounting to 1 trillion 130 billion yen. Adjusted operating profit will be updated to 95 billion yen, a 6 billion yen minus. Telcom services reflects the possible risk of unable to attain targets for 5G and submarine systems. ANS takes into account progress until Q3 and reflects an increase in revenue and profit. Lastly, topics. Page 19. Today, we have decided to conduct a share split. In order to create an easier investment environment for investors, on April 1st of this year, we will execute a share split at a ratio of five shares for one and reduce the investment unit. Page 20 is about Blue Stellar. Blue Stellar sales are accelerating. and cumulative nine-month sales have increased by 26% since the previous year and is expected to surpass the annual plan. As for respective projects, capturing demand for standardization among local governments and orders for government cloud operations support services have been strong. Further, orders for security operations and dashboards starting from consultations and data-driven management scenarios have modeled based on in-house use cases have expanded. This will conclude my explanation. Thank you for your kind attention.