Presentation

Revision of Financial Forecasts for the
Fiscal Year Ending March 31, 2016
February 29, 2016
NEC Corporation
(http://jpn.nec.com/ir/en)
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© NEC Corporation 2016
Index
Revision of Financial Forecasts (consolidated)
Reasons for Revision of Financial Forecasts
Sales and Operating Income/Loss Forecasts by Segment
Public (Variance from Jan 28 Forecasts)
Telecom Carrier (Variance from Jan 28 Forecasts)
Energy (Others) (Variance from Jan 28 Forecasts)
Net Income Forecasts
* Net income (forecast) for fiscal year ending March 31, 2016 refers to profit attributable to owners of the parent for the same period
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© NEC Corporation 2016
Revision of Financial Forecasts (consolidated)
(Billions of Yen)
FY16/3 Full Year
Previous
Revised
Variance
Forecasts Forecasts
(A)
(B)
(B-A)
Net Sales
Operating Income
% to Net Sales
Ordinary Income
% to Net Sales
Net Income
% to Net Sales
Free Cash Flow
Previous
Fiscal Year
(FY15/3)
YoY
3,100.0
2,900.0
-200.0
2,935.5
-1.2%
135.0
100.0
-35.0
128.1
-28.1
4.4%
3.4%
120.0
85.0
3.9%
2.9%
65.0
65.0
2.1%
2.2%
80.0
60.0
4.4%
-35.0
112.1
-27.1
3.8%
0.0
57.3
+7.7
2.0%
-20.0
40.4
+19.6
* Previous Forecasts : as of January 28, 2016. Revised Forecasts : as of February 29, 2016
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© NEC Corporation 2016
Reasons for Revision of Financial Forecasts
▌Net Sales
2,900.0 (-200.0)
(Billions of Yen)
 Public (-65.0) : Delay of large-scale projects into the next fiscal year
Loss or postponement of prospective projects
 Telecom Carrier (-70.0) : Investment restraint in the Japanese market
Slower growth in overseas business
 Others (-65.0) : Weaker sales in the energy business
▌Operating Income
100.0 (-35.0)
 Public (-24.0) : Sales decrease and loss-making projects
 Telecom Carrier (-23.0) : Sales decrease and loss-making projects
 Others (-10.0) : Sales decrease and deterioration of profitability in the energy business
▌Ordinary Income
85.0 (-35.0)
 Decrease in operating income
* Forecasts as of February 29, 2016. Numbers in () represent variances from the previous forecasts (January 28, 2016).
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© NEC Corporation 2016
Sales and Operating Income/Loss Forecasts by Segment
(Billions of Yen)
Public
Net Sales
Operating Income
% to Net Sales
Enterprise
Net Sales
Operating Income
% to Net Sales
Telecom Carrier
Net Sales
Operating Income
% to Net Sales
System Platform
Net Sales
Operating Income
% to Net Sales
Others
Net Sales
Operating Income/Loss
% to Net Sales
Adjustment
Total
Operating Income/Loss
Net Sales
Operating Income
% to Net Sales
FY16/3 Full Year
Previous
Revised
Variance
Forecasts
Forecasts
(A)
(B)
(B-A)
865.0
800.0
-65.0
86.0
62.0
-24.0
9.9%
7.8%
290.0
11.0
307.0
20.0
3.8%
6.5%
780.0
64.0
710.0
41.0
8.2%
5.8%
760.0
33.0
743.0
36.0
4.3%
4.8%
405.0
4.0
340.0
-6.0
1.0%
-1.8%
-63.0
3,100.0
135.0
-53.0
2,900.0
100.0
4.4%
3.4%
Previous
Fiscal Year
(FY15/3)
821.9
74.8
YoY
-2.7%
-12.8
9.1%
+17.0
+9.0
270.5
8.3
-70.0
-23.0
740.2
62.0
-17.0
+3.0
728.9
31.4
-65.0
-10.0
374.1
4.0
+13.5%
+11.7
3.1%
-4.1%
-21.0
8.4%
+1.9%
+4.6
4.3%
-9.1%
-10.0
1.1%
+10.0
-200.0
-35.0
-52.4
2,935.5
128.1
-0.6
-1.2%
-28.1
4.4%
* Previous Forecasts : as of January 28, 2016. Revised Forecasts : as of February 29, 2016
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© NEC Corporation 2016
Public (Variance from Jan 28 Forecasts)
(Billions of Yen)
YoY
Sales
821.9
865.0
738.4
+11.3％
+8.5％
Operating
Income
74.8
+5.2％
-2.7％
86.0
800.0
(-65.0)
 Delay of large-scale projects in the
aerospace and defense areas into the next
fiscal year
 Loss or postponement of prospective
projects such as international projects in
the social infrastructure areas
62.0
58.6
Operating
Income Ratio
800.0
▌Sales
7.9%
9.1%
9.9%
FY14/3
FY15/3
FY16/3
(Previous Forecasts)
▌Operating Income
7.8%
FY16/3
(Revised Forecasts)
62.0
(-24.0)
 Sales decrease and loss-making projects
<Towards subsequent fiscal years>
Grow in cyber security or other new areas;
Control projects thoroughly
* Forecasts as of February 29, 2016. Numbers in () represent variances from the previous forecasts (January 28, 2016).
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© NEC Corporation 2016
Telecom Carrier (Variance from Jan 28 Forecasts)
(Billions of Yen)
YoY
Sales
725.8
740.2
+2.0％
+2.3％
Operating
Income
Operating
Income Ratio
60.3
8.3%
780.0
710.0
+5.4％
-4.1％
62.0
8.4%
FY15/3
8.2%
FY16/3
(Previous Forecasts)
＊ SDN：Software-Defined Networking
NFV：Network Functions Virtualization
710.0
(-70.0)
 Investment restraint in the Japanese market
 Weaker sales in the international market
especially in new businesses such as SDN,
despite positive growth year-on-year
64.0
41.0
5.8%
FY14/3
▌Sales
FY16/3
(Revised Forecasts)
▌Operating Income
41.0
(-23.0)
 Sales decrease and loss making projects in
the international market
<Towards subsequent fiscal years>
Expand global business through SDN/NFV;
Maintain the top position in the Japanese market
** Forecasts as of February 29, 2016. Numbers in () represent variances from the previous forecasts (January 28, 2016).
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© NEC Corporation 2016
Energy (Others) (Variance from Jan 28 Forecasts)
(Billions of Yen)
YoY
73.0
+37.0％
57.0
55.0
+32.7％
+10.0％
-21.9％
-5.0
FY14/3
-5.0
FY15/3
-12.0
FY16/3
(Previous Forecasts)
(-43.0)
 Investment restraint by electric power
companies
▌Operating Income/Loss -12.0 (-12.0)
 Sales decrease, as well as deterioration of
profitability of energy storage systems
0.0
Operating
Income/Loss
57.0
 Weaker sales of small/large scale energy
storage systems, as well as solutions for new
entrants in electric power provider
100.0
Sales
▌Sales
FY16/3
(Revised Forecasts)
<Towards subsequent fiscal years>
Redefine the business strategy of small/large
scale energy storage systems
* Forecasts as of February 29, 2016. Numbers in () represent variances from the previous forecasts (January 28, 2016).
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© NEC Corporation 2016
Net Income Forecast
▌ Decrease of tax expense as disclosed today in the press
release “NEC announces debt waiver of a consolidated
subsidiary*”
(* NEC Mobile Communications, Ltd.)
▌ Forecasts for net income (¥65 billion) and a year-end
dividend (¥6) remain unchanged from previous
announcement.
* Previous Forecasts : as of January 28, 2016. Revised Forecasts : as of February 29, 2016
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© NEC Corporation 2016
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© NEC Corporation 2016
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© NEC Corporation 2016
CAUTIONARY STATEMENTS:
This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and
business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements
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are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause
actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to
differ materially from such statements include (i) global economic conditions and general economic conditions in NEC’s markets, (ii)
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new information, future events, or otherwise.
The management targets included in this material are not projections, and do not represent management’s current estimates of future
performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC’s
business strategies.
Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. Securities may not be
offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable
securities laws is not granted.
Note: The consolidated financial statements in this presentation have been prepared in conformity with the Japanese GAAP. In this
presentation, the accounting periods of the fiscal years for March 31, 2014 and 15 were referred as FY14/3 and FY15/3 respectively.
Any other fiscal years would be referred similarly.
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© NEC Corporation 2016