Nec Corp Unsp/Adr New

Thank you very much for participating today. Today, we have already presented the results of Q2 for F1 ending March 2026. So let me walk you through the material. This is a table of the content that I'm explaining to you today. Page 3. Second quarter financial results. In the first half of FY2026, revenue was 569.8 billion yen. Non-GAAP up B was 127.5 billion yen. Year-on-year, the revenue went up by 5.6%. And regarding non-GAAP OB, year-on-year, it was up by 62.6 billion yen. And this is a dramatic growth being driven by domestic IT as well as ANS. With that as a backdrop, we decided to upward revise our full-year forecast. Non-GAAP OB, we will be increasing it by 20 billion yen, amounting to 340 billion yen. Now, let's look at the details of the financial results of Q2 FY ending March 2026. Firstly, the major indicators for the first half. Adjusted OB was 131.6 billion yen, up 70.6 billion yen year-on-year. Also, regarding adjusted OB margin, it was 8.4%. As compared to our internal forecast, adjusted OP was up by 20 billion yen. This is due to the unexpected growth of domestic IT services. Now, let's look at the year-on-year changes in adjusted and non-GAAP OP. In the first half of FY24, adjusted OP was 61 billion yen, and non-GAAP OP was 64.8 billion yen. So this is a starting point. IT service and social infrastructure increased dramatically in terms of profit. And also, we invested in AI. Therefore, the margin and profit improved by 62.6 billion yen. Having said that, the first half of FY26, non-GAAP OP ended at 127.5 billion yen. Non-GAAP adjusted items includes 4.1 billion yen of gain from sales of business amounting to 131.6 billion yen. Regarding the details of translation from GAAP profit to non-GAAP profit, please take a look at pages 19 and 20. Next, let's explain by segment. The details will be given later, but only or we can say that both IT service and social infrastructure increase in both revenue and profit. Firstly, IT service segment. Domestic public was a major driver, and year-on-year revenue went up by 3.4%. Regarding the transfer of sales of function for business PC and the termination of a subsidiary company, these are special factors. And if you put aside those factors, there have been an increase of revenue by 9%. And regarding adjusted OB, we were able to increase the profit in line with revenue. And around Blue Stellar, we were able to improve the profitability. And also, we were able to register the gains from the sales of business, which was a one-off. And year on year, there has been an increase of 52 billion yen. And also overseas, there has been a determination of unprofitable business, which reduced the revenue of KMD, and also analog profitability improved. And ear on ear, if you... decide not to think about the one of expense, we were able to increase the profit. Now, in terms of domestic ID, Blue Stellar and base business improved. And in terms of Blue Stellar, because of the improving DX demand, we were able able to outdo expectation and profitability went up as well. And year on year, there was an improvement of 19.8%. And also due to that, the profit went up to 26.1 billion yen. And the base business, as mentioned before, because of the special factors, the revenue went down. But because of the cost reduction as well as improvement of the profit and also the sales of the business year on year, the revenue was $25.8 billion. Okay.

For the large projects obtained in the domestic IT service declined by 5% in quarter 2, the public sector, while others of the public domain standardization, platform standardization, and fire disaster prevention projects have largely been declined. continued the life cycle, but enterprise recorded an 11% decline, though DX demand remains robust. And ABEAM maintained strong performance with a plus 13% increase, continuing the trend from the previous year. Next is the social infrastructure department segment. In telecoms social service, the expenses have become more efficient in centering on the development expenses, and some of the project revenue has been placed forward, so therefore it has increased its profit. In ANS, There's been one-off expense of 10 billion yen has been recorded in submarine cable business, but the aerospace and defense has increased its revenue and profits significantly by executing some of the projects. Let me talk about now the projection of March ending FY26. As I mentioned earlier, we have upwardly corrected the projection of the earnings. The revenue and profits has been increased by 60 billion to reach 3.42 trillion yen. And for the adjusted profits, OP is the 330 billion yen, increased by 20 billion yen. Non-GAAP operating profits also corrected to be 340 billion yen by the increase of 20 billion yen. so these uh corrections has been based on the progress of the performances up until the first half of the year and with the background of the very solid market environment upside the potential has been drawn as i've been explained from the projection uh this risk expense has been already included in projecting the fluctuation of the environment of the business and the risk has been managed appropriately. And also we are considering the measures to increase the profits of the next fiscal year as well. And let me focus on examining the performance projection of the earnings. Let me talk about now the revenues and adjusted OP per segment. This upward... adjustment is the IT service segment change. The very good business in public is already included, the revenue increase and profit increase, IT service center, IT service revenue and profit revenues, the 2.4 trillion yen. but increased by 60 billion yen. And adjusted OP is the 321 billion yen, increased by 20 billion yen. There's no change in terms of the social infrastructure, which we have already announced in April. And the ANS, the aerospace and the defense is very good in the business. And there's upside potential, but because of the downside risk in the submarine table, they are kept the same projection. And let me describe the announcement of the event. First one is the IR day, which will be held on November 13th. With the capital markets, where much interest is drawn on the blue stellar and the security will be the topic to be explained from the person in charge of this business domain. The second one is the Innovation Day on December 3rd. Media and IT analysts for the capital markets We will conduct it in our Tamagawa works. And in addition to the lecture with AI, we will also have the demonstration exhibit of the latest state-of-the-art technology. Please come and participate in our IR Day and Innovation Day. That's all my explanation. Thank you very much.