Presentation

Financial Results for FY2009
(Fiscal year ended March 2010)
May 12, 2010
NEC Corporation
(http://www.nec.co.jp/ir/en)
To be a leading global company
leveraging the power of innovation
to realize an information society
friendly to humans and the earth
NEC Group Vision 2017
© NEC Corporation 2010
Index
I.
Summary of Financial Results for FY2009
II. Management Policy for FY2010
<Ref> Segment Change
Financial Results for FY2009 (appendix)
Financial Forecast for FY2010 (appendix)
Page 3
© NEC Corporation 2010
I. Summary of Financial Results for FY2009
09 Results
Summary of Financial Results for FY2009
(Billions of Yen)
FY10/3
Actual
Actual
4,215.6
3,583.1
-15.0%
-76.9
Operating
Income/Loss
-6.2
50.9
57.1
-9.1
Ordinary
Income/Loss
-93.2
142.6
9.4
308.1
1.4
YoY
Net Sales
% to Net Sales
-
% to Net Sales
Net Income/Loss
Net Income/Loss per
share(Yen)
Free Cash Flow
1.4%
49.4
-
-296.6
% to Net Sales
1.4%
11.4
-
0.3%
-146.64
5.04
151.68
0.58
-145.8
93.6
239.4
93.6
(Ref) Average exchange rate for FY10/3 1$=¥93.47 €1=¥131.53
Page 5
Difference
from Jan 28
forecast
FY09/3
© NEC Corporation 2010
09 Results
Financial Results for FY2009 by Segment
Net Sales
Operating Income/Loss
4,617.2
4,215.6
IT Services
Network
Systems
Social
Infrastructure
Personal
Solutions
3,583.1
251.9
266.5
876.5
1,066.8
1,001.8
365.5
785.9
316.6
930.8
Others
Page 6
56.0
59.3
21.8
28.0
42.0
8.2
5.8
-13.2
-41.3
Eliminations/
Unclassifiable
expenses
737.9
860.0
14.4
17.6
8.4
14.7
Others
340.4
50.9
69.0
Social
Infrastructure
Personal
Solutions
209.2
-6.2
8.1
IT Products
Network
Systems
848.6
Electron
Devices
65.9
IT Services
960.5
941.8
IT Products
(Billions of Yen)
156.8
22.8
19.3
11.1
-1.1
-56.8
-87.8
-31.5
671.6
572.8
Electron
Devices
181.7
144.8
84.4
FY08/3
FY09/3
FY10/3
FY08/3
© NEC Corporation 2010
-38.8
FY09/3
FY10/3
09 Results
Fixed Cost Reduction in FY2009
▐ Achieved a fixed cost reduction of 320.9 billion yen year on year
(111 % compared with the forecast)
Reducing
fixed costs
(forecast)
FY09 Actual
Segment
(compared with
the forecast)
IT Services, IT Products,
Network Systems, Social
Infrastructure
144.7
(122%)
Personal Solutions
36.3
(110%)
EL
90
119.0
33.0
EL
90
Electron Devices
119.0
(100%)
Others
20.9
(110%)
19.0
Total
320.9
(111%)
290.0
Page 7
119.0
(Billions of Yen)
FY09 Actual
Cost Item
(compared with
the forecast)
Reducing
fixed costs
(forecast)
Labor Cost
80.6
(103%)
78.0
Outsourcing
engineering,
consignment of
activities
148.3
(115%)
129.0
Depreciation,
leases, etc.
33.0
(100%)
33.0
IT expenses, sales
promotion and
advertisement, etc.
59.0
(118%)
50.0
Total
320.9
(111%)
290.0
© NEC Corporation 2010
09 Results
Achievements and Challenges
▐ Business structure reform: Business portfolio revision
 Business integration with Renesas Technology in the semiconductor business
(Deconsolidation from FY2010)
 Strengthened mobile terminal business
 Reduced stakes in NEC Glass Components, Ltd. and Nippon Electric Glass
Co., Ltd.
▐ Earnings structure reform: Conversion toward a leaner earnings structure
 Achieved a fixed cost reduction of 320.9 billion yen year on year
▐ New share offering strengthens financial foundations and helps realize
future growth strategy
▐ Fell short of our forecast in operating income.
Net income of 11.4 billion yen exceeded our forecast (10 billion yen)
Achieved annual dividend at the rate of 4 yen per share
▐ Formulated Mid-term growth plan “V2012”
 Expand global business, cloud business, new business
Page 8
© NEC Corporation 2010
our challenge is
“execution”
II. Management Policy for FY2010
10 Forecast
Business Operation Policy for FY2010
FY2010 is the first year toward achieving “V2012”
⇒ V2012 is a program for personal and organizational
innovation
▐ In order for FY2010 to successfully move towards V2012,
we need to be vigilant in our observation and improvement
of 3 mid-term growth plan measures
① Expand Global business in 5 regions
② Expand Cloud business (integrated IT/NW Solution)
③ Expand New business
(e.g.) automotive battery business,new personal devices etc.
Aim for 100 billion yen in operating income
and 15 billion yen in net income
* Forecast as of May 12, 2010
Page 10
© NEC Corporation 2010
10 Forecast
Summary of Financial Forecast for FY2010
(Billions of Yen)
FY10/3
FY11/3
YoY
Actual
Forecast
3,583.1
3,300.0
-7.9%
50.9
100.0
49.1
1.4%
3.0%
49.4
70.0
1.4%
2.1%
11.4
15.0
0.3%
0.5%
Net Income per share (Yen)
5.04
5.77
0.73
Free Cash Flow
93.6
-50.0
-143.6
Net Sales
Operating Income
% to Net Sales
Ordinary Income
% to Net Sales
Net Income
% to Net Sales
20.6
3.6
(Ref): Assumption of exchange rate for FY11/3 1$=¥90, 1€=¥120
* Forecast as of May 12, 2010
Page 11
© NEC Corporation 2010
10 Forecast
Financial Forecast for FY2010 by Segment
Net Sales
Operating Income/Loss
(Billions of Yen)
4,215.6
-6.2
IT Services
IT Products
Network
Systems
941.8
266.5
1,001.8
3,583.1
3,300.0
IT Services
56.0
59.3
890.0
IT Products
21.8
28.0
209.2
Network
Systems
200.0
340.4
850.0
848.6
737.9
42.0
Social Infrastructure
Others
8.2
5.8
-13.2
Personal
Solutions
316.6
Personal
Solutions
60.0
876.5
785.9
Social
Infrastructure
100.0
50.9
671.6
Others
144.8
84.4
FY09/3
FY10/3
572.8
FY11/3
(Forecast)
15.0
16.0
1.0
3.0
-40.0
-31.5
Eliminations/
Unclassifiable
expenses
140.0
75.0
19.3
-1.1 11.1
-87.8
Electron
Devices
830.0
Electron
Devices
40.0
22.8
-56.8
315.0
5.0
-38.8
FY09/3
FY10/3
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 12
© NEC Corporation 2010
10 Forecast
Sales Change (Year on Year)
(Billons of Yen)
Network Systems
+64.1 (+8.2%)
Personal Solutions
+92.1 (+12.5%)
IT Services
+13.5 (+1.5%)
Deconsolidation of
semiconductor business
FY10/3
3,583.1
IT Products
-9.2 (-4.4%)
Social
Infrastructure
-1.6 (-0.5%)
Electron Devices
-432.8 (-75.6%)
FY11/3
(Forecast)
3,300.0
Others
-9.4
* Forecast as of May 12, 2010
Page 13
© NEC Corporation 2010
10 Forecast
Operating Income Change (Year on Year)
(Billons of Yen)
Others -8.1
Electron Devices
+57.8
FY11/3
(Forecast)
100.0
Deconsolidation of
semiconductor business
Network Systems
+12.0
Social Infrastructure
-7.8
Eliminations/
Unclassifiable expenses
-8.5
IT Products
+6.1
FY10/3
Personal Solutions
-3.3
50.9
IT Services +0.7
* Forecast as of May 12, 2010
Page 14
© NEC Corporation 2010
Key Points for Achieving the FY2010 Forecast
✔IT Services
✔IT Products
(Platform)
✔Network
Systems
（Carrier Network)
Social
Infrastructure
Personal
Solutions
Smart Energy
and Green
Page 15
10 Forecast
 Promote the services business and global business,
create new business, expand SI business
 Improve profitability through innovation in the SI business
 Create competitive products by aggregating IT/NW products,
solutions and technologies
 Improve business processes and common operations efficiency
by centralizing resources
 Expand new business (LTE, WiMAX, Femto, Service PF)
 Recovery of core global business (Pasolink, submarine cable)
Create business for the future
 Maintain and strengthen a leaner earnings structure
 Enter growing markets (e.g. digitalization), expand market share
 Improve profitability by enhancing PJ management and cost
reduction
 Create new business for growth
 Thorough implementation of low cost operations globally
 Full-scale deployment of automotive lithium-ion battery
business
 Create new business focusing on Smart Grids
© NEC Corporation 2010
10 Forecast
1.Network Systems Business (Sales YOY)
(Billions of Yen)
Increases in domestic and overseas
markets due to investment recovery.
Activate datacenter and contact center business
FY11/3
Enterprise
Network
(approx.+10%)
Recovery of submarine cable systems
Aim for early orders of multiple large-scale projects
Increase Netcracker’s sales
(Forecast)
850.0
Fixed line
overseas
(approx.+40%)
Delay in executing last year’s
revised national budget.
Efforts to secure investment
increases from carriers in the
service business
Fixed line
in Japan
FY10/3 (slight increase)
Wireless
overseas
(approx.+10%)
785.9
Wireless
in Japan
(slight decrease)
PASOLINK : Same level as last year due to next
generation models and recovery of overseas investment
New businesses such as femtocells shift to
a profit phase
Investment restraint tendencies, but expanding LTE, WiMAX and service businesses
* Forecast as of May 12, 2010
Page 16
Promote greater investment from carriers through smart-phone demand
© NEC Corporation 2010
Expand Platform Implementation for Telecom Carriers
Cloud
▐ Won operations support systems for carriers from major domestic
and overseas carriers
Russia (released September 2009)
VimpelCom Group
Germany (released March 2010)
Deutsche Telekom AG
NTT DoCoMo
(released December 2009)
Malaysia (released June 2009)
Maxis Communications
Page 17
© NEC Corporation 2010
New Zealand (released December 2009)
Telecom New Zealand
NEC's PASOLINK Secures Top Global Market Share
Three Years Running
Global
▐ Ship to leading telecom carriers throughout 140 countries
Cumulative Shipment of 1.44 million units (As of the end of March 2010)
 Demand increasing from the rapid growth of global mobile phone markets
such as Asia, the Middle and Near East, South America and Africa.
▐ FY2010: Maintain and improve
competitiveness by launching next
generation models, in addition to an
overseas carrier investment recovery
▐ Execute the C&C cloud strategy by utilizing global customer
base and technical assets of “PASOLINK”
※ The industry's top global market share for 2009: Sky Light Research
Page 18
© NEC Corporation 2010
Expansion of Next-Generation Wireless Broadband
New business
▐ Next-Generation Wireless Broadband is expected to expand along with the
infrastructure to create new services for carriers → Business opportunity for NEC
domain
Carriers/ overview
NTT DoCoMo
NEC Selected as a vendor for NTT DOCOMO's
LTE base stations, core network equipment and
related switch products.
KDDI
Selected as a vendor for KDDI’s LTE base stations
Telefonica
Selected as a vendor for trials with Europe’s largest
carrier, Telefonica, who develops services in more
than 20 countries in Europe and Latin America.
Demonstration experiments successfully carried out
LTE
WiMAX
Femtocell
(small cellular base
station designed for
use in a home or
small business )
Page 19
Singtel
Selected as a vendor for trials with Singtel
(the largest carrier in Southeast Asia)
UQ Communications
WiMAX base station for UQ communications
operation starts
SFR(France)
Deliver systems for the country’s first commercial
femtocell service
Telecom Denmark
Carry out trials for Telecom Denmark
Network Norway
NEC begins technical inspection on femtocell
service with Network Norway
Overseas
Overseas
© NEC Corporation 2010
10 Forecast
2. IT Services / IT Products
(Billions of Yen)
IT Services
IT Products
Sales
Sales
YoY
876.5
890.0
+1.5%
209.2
-6.9%
200.0
-21.5%
-4.4%
Operating
Income
59.3
60.0
Operating
Income/Loss
5.0
-1.1
FY10/3
FY11/3
(Forecast)
FY10/3
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 20
© NEC Corporation 2010
Our measures in IT Services by industry sector
10 Forecast
▐ Promote services business, global business and create new business in tandem with
expansion of SI business
Sector
Business situation
Government
Focusing on Projects of Government IT budget
Promote proposals to create new business
Public/Medical
Focusing on core system reconstruction proposals,
and accommodating administrative and financial reform
by offering our core solution “GPRIME” for local governments
Finance
Promote service proposals such as system integration that
contribute to cost reductions.
Strengthen sales of the next-generation store-terminal ‘NAVUTE’
Telecom/Media
Strengthen new business including cloud services for global carriers
and digital signage
Manufacturing
Strengthen proposals for “Cloud-oriented service platform solutions”
as reflected in the reform of NEC’s IT system
Retail/Service
Strengthen new service proposals in the EC, CRM areas and global
business with POS sales
Page 21
© NEC Corporation 2010
Cloud Services Activities / Customers
Cloud
▐ Cloud services for municipal governments
 Commercialized ‘GPRIME for SaaS’ that offers core IT systems by SaaS
for municipal governments
- Business negotiations with 40 municipal governments and putting know-how of the
Okitama-area of Yamagata prefecture to practical use
▐ Cloud services for core systems
 Accepted a cloud service order for a core system from “EXEDY Corporation,”
a major automotive parts company
- Offered cloud oriented accounting services that capitalize on the experience of implementing
NEC’s core systems
- Realized system linkage with the production management system NEC implemented
 Accepted orders for consulting on cloud oriented accounting services from
2 major manufacturing companies
 Approximately 10 companies are considering the adoption of cloud services
for core systems
 Began offering SaaS-type ERP services, “Explanner for SaaS,”
from last December and already accepted orders from a major hotel
and food manufacturing company
Page 22
© NEC Corporation 2010
Fingerprint Identification System Competence Center
Global
▐ Established an “NEC Biometrics Excellence Center” in
Bangalore, India
⇒ support other regions as well as APAC
▐ Business development in Latin America
 NEC Argentina expands fingerprint identification solutions in Latin America
as the competence center.
 Already delivered the systems for citizen ID system and police etc
in 10 countries in Latin America.
 Delivered 7 fingerprint identification systems in FY2009.
e.g.) system to avoid double registration of voters for presidential elections in Bolivia
system for corrections facilities in Colombia
 Currently being implementing the systems for citizen ID management in Brasilia state
Page 23
© NEC Corporation 2010
Commercialization of Mobile Cloud Services
New business
▐ Planned commercialization in FY2010, joint development with KDDI
▐ Provide a variety of mobile phone applications for RFID businesses that are used
with the swipe of a hand
Business use image
customer
ＩＤ
trait AP
ＩＤ
ＩＤ
Support service staff
ＩＤ
・・・
Cloud for business operations
Change to SD card for built-in implementation
(now developing)
・small size for mobile, compliant with
electrical power savings
Sales persons
Shop staff
Possible to read and
write major RFID tags
(IC card: only ID parts)
Page 24
SFA
ID Management Server
ＩＤ
ＩＤ
Support
management
AP
RFID
Mobile terminals
for enterprises
ＩＤ
ＩＤ
Attendance
management
AP
RFID multi-reader/writer product “the world’s first”
・13.56Mhz, UHF, 2.45GHz-compliant
・small size for mobile, compliant with
electrical power savings
© NEC Corporation 2010
10 Forecast
3. Expand Mobile Terminal Business
▐ Plan to Integrate NEC CASIO Mobile Communications and
Casio Hitachi Mobile Communications in June 2010
 The corporate spin-off between NEC and NEC CASIO Mobile
Communications took place on May 1, 2010.
▐ Shipment volume plan: 7.5M (worldwide)
 Domestic: Continuously strengthen business operations
and aim for No.1 market share in FY2012
 Overseas: Gradual launch of new business
* Forecast as of May 12, 2010
Page 25
© NEC Corporation 2010
10 Forecast
4. Establish a Smart Energy and Green Business formation
▐ Established a “Smart Energy and Green Business Operations
Unit” under direct corporate control to promote Smart Energy
and Green business
 Established “Smart Energy and Green Business
Development Division” and “Smart Energy
Products Division” under the “Smart Energy
and Green Business Operations Unit”
- Promote the electrode component business for the expected growth of
the automotive lithium-ion battery market
- Create new business such as the battery business for non-automotive
use or smart grid business based on storage battery technology
▐ Established NEC Energy Devices, Ltd. on April 1, 2010
 Started the installation and test manufacture of production equipment
in NEC Sagamihara Plant
Launched smoothly in terms of both of quality and yield ratio for the massproduction
Page 26
© NEC Corporation 2010
5. Strengthen the Formation of Global Business
10 Forecast
▐ Strengthen the formation of business in Asia Pacific
 NEC Asia became NEC Asia Pacific and oversees 15 sales companies
in 9 countries(*)
- Established a competence center for security solutions utilizing biometric identification
▐ Strengthen business formation in EMEA
(Europe, Middle and Near East, Africa)
 Turned NEC Philips (Enterprise NW Solutions) into a wholly-owned subsidiary
under NEC Europe
- Company name changed to “NEC Unified Solutions”
Strengthened IT/NW business formation in the region by utilizing their customer base
(5,000 companies)
 Established “European Cloud Competence Center” to promote cloud business
for Telecom Carriers
▐ Strengthen regional sales formation of the International Sales and Operations
Business Unit
 Established the “Greater China and Asia Pacific Sales Division”
and the “Americas and EMEA Sales Division” to strengthen sales capabilities
in each region
(*) Singapore, Malaysia, Vietnam, Thailand, Indonesia, Philippines, India, Australia, New Zealand
Page 27
© NEC Corporation 2010
Cloud Solution Competence Center for Telecom Carriers
Cloud
▐ Established “European Cloud Competence Center” in Europe
to promote cloud business for Telecom Carriers
 Utilize the center to expand business for Telecom Carriers in Latin
America and other regions in addition to Europe
- NEC selected by Telefonica Spain to provide SaaS (July 2009)
- NEC and Telefonica agreed to jointly promote cloud business in Latin America (Feb 2010)
Established in NEC Iberica
under NEC Europe
(Madrid, Spain)
Page 28
© NEC Corporation 2010
10 Forecast
Net Income Change (Year on Year)
(Billons of Yen)
Reversal of provision for
contingent loss in the
previous year
Electron Devices
+57.8
Network Systems +12.0
Social Infrastructure -7.8
Deterioration of
non-operating income/loss
-28.5
Improvement of
operating income
+49.1
Others
-17.0
Decrease of profit on sale of
shares
FY11/3
(Forecast)
FY10/3
15.0
11.4
* Forecast as of May 12, 2010
Page 29
© NEC Corporation 2010
Two essential efforts for business operation
Balance of two essential efforts; 1) “Outward efforts” and 2) “Inward efforts,”
will enable solid business operation for a company
▐ “Outward efforts”
Strive to increase “top line” sales through consistent pursuit of
“Global Best”
 Strengthen marketing capabilities through understanding the needs of our
customers worldwide
NEC Group Vision 2017
 Gain profit through contribution to our customers
in the global market
To be a leading global company
leveraging the power of innovation
to realize an information society
friendly to humans and the earth
▐ “Inward efforts”
Challenge to improve efficiency of business operation
 Achieve leaner, competitive profit structure by
thorough efficiency and business process reforms
Page 30
© NEC Corporation 2010
NEC Group Vision 2017 and V2012
NEC Group Vision 2017
“V2012” is a milestone for achieving
the NEC Group Vision 2017
To be a leading global company
leveraging the power of innovation
to realize an information society
friendly to humans and the earth
FY17 Target
Net Income 200 Billion yen
ROE
Approx. 15%
(Overseas Sales Approx. 50%)
FY12
Net Income 100 Billion yen
2
1
0 12)
2
V
20
FY09 (Actual)
Net Income 11.4 billion yenb
ROE
1.6%
no
i
s
Vi
-
nd
yo
e
B
,
ies
r
a
nd
ou
(2
rd
wa
o
T
r
ou
ROE
10%
(Overseas Sales 25%)
–
0
01
Aiming to be a
global Top 10
company
In the ICT industry
(Overseas Sales 20%)
* Forecast as of Feb. 25, 2010
Page 31
© NEC Corporation 2010
My Philosophy
“Where there is a will,
there is a way.”
Page 32
© NEC Corporation 2010
<Ref.> Segment Change
Segment Change Goals
Segments
Compliance with the "management approach"
(new accounting standards) applied from FY2010
▐ Partial segment reorganization
 The “IT product” segment became the “Platform” segment along with
the Platform Business Unit being formed by merging the IT Platform
Business Unit and Enterprise Communications Solutions Operations Unit.
 After the deconsolidation of the semiconductor business, “Electron Devices”
becomes less than 10% of consolidated sales.
→ NEC abolished this segment and non-semiconductor business added up
into “Others.”
Page 35
© NEC Corporation 2010
Segments
<Ref.> New and Former Segments
Former segments
(Billons of Yen)
New Segments
Sales
890.0
Operating Income 60.0
IT Service
IT Service
IT Products
Platform
Network Systems
Carrier Network
Social Infrastructure
Social Infrastructure Operating Income 15.0
Personal Solutions
Personal Solutions
Sales
380.0
Operating Income
5.0
Sales
670.0
Operating Income 40.0
Sales
315.0
Sales
830.0
Operating Income 16.0
Electron Devices
Others
Others
Sales
215.0
Operating Income
4.0
* Forecast as of May 12, 2010
Page 36
© NEC Corporation 2010
Segments
<Ref.> New Segments and Organization
Segment IT Service
Platform
Carrier
Network
Social
Infrastructure
Others
Personal
Solutions
Sales Business Unit
International Sales and Operations Business Unit
Others
NEC TOKIN
NEC Energy Devices
© NEC Corporation 2010
Personal Solutions
Business Unit
Carrier Network
Business Unit
Platform
Business Unit
Page 37
IT Services
Business Unit
Organization
Social Infrastructure Solutions
Business Unit
Integrated
<Ref.> Overview and Aims of Organizational Reform
Segments
▐ Expansion of the IT and Network solutions business
-Establishment of a Platform Business Unit In order to expand the business related to "C&C Cloud Strategy,"
the Platform Business Unit was formed by merging the IT Platform Business
Unit and Enterprise Communications Solutions Operations Unit.
 By merging the IT platform business and enterprise communications
business, cloud computing infrastructure is combined into a single business
unit and NEC can efficiently provide globally competitive products and
software that integrate IT and networks.
 Furthermore, NEC focuses the development of an integrated IT and network
platform, integrated IT and network operations management / monitoring
systems along with Carrier Network Business Unit
* announced on Feb 25, 2010
Page 38
© NEC Corporation 2010
Plans for hosting “Business Update meetings”
▐ In FY2010 as the first year of V2012, we plan to hold quarterly
business update meetings (“NEC IR Day”) hosted by the Business
Unit heads
▐ This aims to periodically provide information of “global business”
“cloud business” and “new business” as the NEC Group
FY2010 NEC Business update meetings (NEC IR Day)
“Part1”
“Part2”
(early-mid July)
Apr
May Jun
Financial
Results
for FY2009
Jul
Aug
Financial
Results for
1Q/FY2010
(October)
Sep
Oct
“Part3”
“Part4”
(November-January) (February-March)
Nov
Financial
Results for
1H/FY2010
Dec
Jan
Feb Mar
Financial
Results for
3Q/FY2010
*Note: we will report and update the progress of “V2012” in the announcement
of 1st half /full year financial statements
Page 39
© NEC Corporation 2010
Financial Results for FY2009
(appendix)
09 Results
Summary of Financial Results for 4Q and Full Year
(Billions of Yen)
4Q(January to March)
FY09/3
Full Year
FY10/3
FY09/3
FY10/3
YoY
Actual
Actual
1,139.5
1,104.1
Operating
Income/Loss
5.2
96.1
% to Net Sales
0.5%
Net Sales
Ordinary
Income/Loss
-50.4
% to Net Sales
Net Income/Loss
% to Net Sales
-167.6
Actual
-3.1%
4,215.6
3,583.1
-15.0%
-76.9
91.0
-6.2
50.9
57.1
-9.1
142.6
9.4
308.1
1.4
-
156.1
232.3
52.0
-296.6
5.9%
168.5
1.4%
11.4
-
116.5
1.4%
49.4
-
Net Income/Loss per
share(Yen)
Free Cash Flow
-93.2
9.6%
64.6
-
Actual
8.7%
105.7
-
YoY
0.3%
-146.64
5.04
151.68
0.58
-145.8
93.6
239.4
93.6
(Ref): Average exchange rate for 4Q of FY10/3 1$= ¥90.38, 1€= ¥128.29
Average exchange rate for FY10/3 1$= ¥93.47, 1€= ¥131.53
(Assumed exchange rate for 4Q of FY10/3 1$=¥90, 1€=¥130)
Page 41
Difference
from Jan
28
© NEC Corporation 2010
09 Results
Results by Segment for 4Q and Full Year
(Billions of Yen)
Net Sales
IT Services
IT Products
Operating Income
To Net Sales(%)
13.4%
14.9%
Net Sales
75.1
8.5
70.9
9.9
Operating Income/Loss
To Net Sales(%)
Network
Systems
Social
Infrastructure
Net Sales
Operating Income
To Net Sales(%)
Net Sales
Operating Income
To Net Sales(%)
Net Sales
Personal
Solutions
Operating Income/Loss
Electron
Devices
Operating Income/Loss
Net Sales
124.7
7.5
6.0%
190.0
-6.9
103.8
-62.6
Operating Income
Elimination/Unclassif iable expenses
Operating Income/Loss
To Net Sales(%)
Net Sales
Operating Income/Loss
To Net Sales(%)
-
7.6%
4.6%
15.0
848.6
-13.2
53.7%
58.6
671.6
-87.8
-17.9%
3.2
144.8
5.8
-0.4
-3.1%
91.0
-38.8
4,215.6
-6.2
© NEC Corporation 2010
-21.6%
-14.0
-64.1
-15.0
-7.0%
14.6
7.6
5.8
-13.0%
32.5
-1.1
4.3
-14.7%
31.0
10.8
-5.8
-41.7%
5.3
-9.6
4.1
7.3
-15.0%
57.1
0.5
-76.9
-9.1
-
84.4
11.1
13.1%
-31.5
3,583.1
50.9
-
-5.8
-6.1
2.6%
-
8.7%
-21.5%
-22.9
7.2%
572.8
-56.8
4.0%
-14.5
3.3
3.6%
737.9
19.3
-
-6.9%
3.3
-
316.6
22.8
2.4%
22.2%
-8.8
1,104.1
96.1
0.5%
340.4
8.2
Difference
from Jan
28
6.8%
785.9
28.0
4.2%
-2.0%
12.9
YoY
209.2
-1.1
8.2%
-
24.5
5.4
-8.4
1,139.5
5.2
1,001.8
42.0
4.1%
159.5
-4.0
29.8
2.3
-22.0%
-0.8
16.7%
198.8
8.1
-
5.9%
266.5
21.8
8.9%
122.2
20.4
Full Year
FY10/3
Actual
876.5
59.3
FY09/3
Actual
941.8
56.0
-5.5%
1.4
14.0%
224.1
19.8
7.2%
To Net Sales(%)
Others
Page 42
11.4%
287.3
20.6
To Net Sales(%)
Net Sales
Total
4Q(January to March)
FY09/3
FY10/3
YoY
Actual
Actual
328.8
304.1
-7.5%
44.2
45.2
1.0
1.4%
09 Results
Sales Change (Year on Year)
(Billions of Yen)
FY09/3
4,215.6
IT Services -65.3 (-6.9%)
IT Products -57.3 (-21.5%)
Network Systems -215.9 (-21.6%)
Social Infrastructure -23.8 (-7.0%)
Personal Solutions
-110.7 (-13.0%)
FY10/3
3,583.1
Electron Devices
-98.9 (-14.7%)
Page 43
© NEC Corporation 2010
Others
-60.5
09 Results
Sales Change (From previous forecast as of Jan 28)
(Billions of Yen)
FY10/3
(Forecast as of Jan 28)
3,660.0
IT Products
-5.8
Personal
Solutions
-1.1
IT Services
-14.5
Electron Devices
+10.8
FY10/3
Actual
3,583.1
Network
Systems
-64.1
Page 44
Social
Infrastructure
+7.6
© NEC Corporation 2010
Others
-9.6
09 Results
Operating Income/Loss Change (Year on Year)
(Billions of Yen)
Eliminations/Unclassifiable expenses
+7.3
Others +5.3
FY10/3
50.9
IT Services +3.3
FY09/3
Electron Devices
+31.0
-6.2
IT Products
-22.9
Network Systems
-14.0
Page 45
Personal Solutions
+32.5
Social Infrastructure +14.6
© NEC Corporation 2010
09 Results
Operating Income/Loss Change (From previous forecast as of Jan 28)
(Billions of Yen)
IT Services
+3.3
FY10/3
(Forecast as of Jan 28)
60.0
Personal
Solutions
+4.3
Eliminations/
Unclassifiable expenses
+0.5
Electron
Devices
-5.8
IT Products
-6.1
50.9
Network
Systems
-15.0
Others
+4.1
Social
Infrastructure
+5.8
Page 46
FY10/3
Actual
© NEC Corporation 2010
09 Results
IT Services Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
YoY
960.5
347.2
941.8
328.8
876.5
304.1
-1.9%
-6.9%
-5.3%
-7.5%
Operating
Income
Operating
Income
44.8
Page 47
44.2
45.2
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
65.9
FY08/3
56.0
FY09/3
59.3
FY10/3
09 Results
IT Services Business
(Billions of Yen)
▐ Sales
876.5 (-6.9%)
SI Services:
Declined due to IT investment restraint
Stable sales in the Retail sector
Outsourcing/Support services:
Declined due to severe market conditions
Stable sales of outsourcing business
▐ Operating income
59.3 (+3.3)
Despite a sales decrease, increased in profit due to thorough fixed cost
reductions
Page 48
© NEC Corporation 2010
09 Results
IT Products Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
YoY
88.2
266.5
251.9
75.1
70.9
+5.8%
209.2
21.8
-14.9%
-5.5%
-21.5%
Operating
Income
12.2
8.5
9.9
Operating
Income/Loss
8.1
-1.1
FY08/3
Page 49
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
FY09/3
FY10/3
09 Results
IT Products Business
(Billions of Yen)
▐ Sales
209.2 (-21.5%)
Software:
Declined due to IT investment restraint
Servers:
Declined due to fewer large-scale projects than the previous year
Stable demand for thin-client systems in the Finance and Public sectors
Others:
Declined due to lower demand for professional workstations from the
financial industry
▐ Operating Loss
-1.1 (-22.9)
Declined significantly due to fewer large-scale projects of mainframe
than the previous year and a market trend shifting to low-priced products
Page 50
© NEC Corporation 2010
09 Results
Network Systems Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
YoY
326.6
1,066.8
1,001.8
287.3
Operating
Income
Operating
Income
36.4
785.9
69.0
224.1
-12.0%
-6.1%
-21.6%
-22.0%
42.0
20.6
Page 51
19.8
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
28.0
FY08/3
FY09/3
FY10/3
09 Results
Network Systems Business
(Billions of Yen)
▐ Sales
785.9
(-21.6%)
Business for Telecom Carriers:
Reduced investment by Japanese mobile carriers
Overseas market: declined due to CAPEX cutbacks by carriers
and the impact of the appreciating yen
Enterprise Network:
Declined both in Japan and overseas markets due to continuous CAPEX
cutbacks
▐ Operating Income
28.0
(-14.0)
Declined due to sales decreases, despite fixed cost reductions
Page 52
© NEC Corporation 2010
09 Results
Social Infrastructure Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
YoY
365.5
340.4
144.6
316.6
124.7
122.2
-6.9%
-7.0%
-13.8%
22.8
-2.0%
20.4
Operating
Income
9.7
Page 53
Operating
Income
14.4
8.2
7.5
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
FY08/3
FY09/3
FY10/3
09 Results
Social Infrastructure Business
(Billions of Yen)
▐ Sales
316.6
(-7.0%)
Broadcast and Control systems ／ Aerospace and Defense ：
Declined due to fewer large-scale projects and investment restraint related
to the declining economy (the end of term plan was exceeded due to
revised budget items and the steady sales of control terminals)
▐ Operating Income
22.8
(+14.6)
Improvement due to cost and SG&A reductions through enhanced
project management and fixed cost reductions
Page 54
© NEC Corporation 2010
09 Results
Personal Solutions Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
266.9
YoY
-8.8%
930.8
+4.6%
848.6
-19.2%
Mobile 101.9
Terminals
198.8
190.0
-13.0%
737.9
Mobile
Terminals 340.3
348.1
-18.9%
66.1
282.5
75.1
-12.0%
PC and
Others
165.0
Operating
Income/Loss
13.3
+15.6%
PC and
Others
132.7
114.8
8.1
590.5
Operating
Income/Loss
17.6
500.5
455.4
19.3
-13.2
-6.9
Page 55
-9.0%
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
FY08/3
FY09/3
FY10/3
09 Results
Personal Solutions Business
(Billions of Yen)
▐ Sales
737.9
(-13.0%)
Mobile Terminals:
Declined due to the tough competition in shrinking markets and the launch of
fewer models
PC and Others:
Declined due to significant drop in the 1st half
In the 2nd half, increased due to signs of upward momentum for enterprise
and personal
▐ Operating Income 19.3
(+32.5)
Mobile Terminals and PC and Others both turned to profit due to fixed cost
reductions and the promotion of development efficiency
Page 56
© NEC Corporation 2010
09 Results
＜ Mobile Terminals / PC Shipments ＞
（M = Millions of Units)
Mobile Terminals
1.6
2
1.5
1.2
0.9
1
0.5
1.6
1.2
1.1
4.8M units
1.3
1.3
1.0
0.9
5.1M units
0.7
0.7
3.6M units
0
1Q/08.3
2Q
3Q
4Q
1Q/09.3
2Q
3Q
4Q
1Q/10.3
2Q
3Q
4Q
（K = Thousands of units)
1000
800
600
PC (for the Japanese market)
810
720
620
590
550
960
645
620
615
500
580
690
400
2,670K units
200
2,500K units
2,730K units
0
1Q/08.3
Page 57
2Q
3Q
4Q
1Q/09.3
2Q
3Q
© NEC Corporation 2010
4Q
1Q/10.3
2Q
3Q
4Q
09 Results
Electron Devices Business
(Billions of Yen)
4Q
Full Year
Sales
Sales
YoY
860.0
-21.9%
204.5
-14.7%
671.6
+53.7%
572.8
159.5
-49.2%
Semiconductors
103.8
131.8
Operating
Income/Loss
2.8
Operating 550.7
Income/Loss
471.0
8.4
85.9
17.9
-62.6
27.7
-4.0
120.9
-87.8
101.8
-56.8
Electric Components/ Others
Page 58
FY08/3
FY09/3
FY10/3
<Jan-Mar>
<Jan-Mar>
<Jan-Mar>
© NEC Corporation 2010
FY08/3
FY09/3
FY10/3
09 Results
Electron Devices Business
(Billions of Yen)
▐ Sales
572.8
(-14.7%)
Semiconductors:
Declined due to decrease of SoC for consumer electronics equipments
Increased in MCU for cars and general-purposes
Electric Components/ Others:
Decreased due to customers’ adjustment of inventory and production as
well as CAPEX reductions
Signs of growing demand indicated in certain areas
▐ Operating Loss
-56.8
(+31.0)
Semiconductors:
Improved through fixed cost reductions under severe market conditions
Electric Components/ Others:
Improved significantly through steady implementation of structure reform
Page 59
© NEC Corporation 2010
09 Results
< Financial Results for NEC Electronics >
(Billions of Yen)
Sales
168.7
167.5
131.8
128.5
119.1
117.9
102.3
85.9
Operating
Income/Loss
3.0
1Q
-16.0
-0.3
2Q
3Q
-53.0
4Q
-21.5
1Q
FY09/3
-15.4
2Q
-9.3
3Q
-3.0
4Q
FY10/3
* The results for the area of Semiconductors are the official public figures of NEC Electronics Corporation, which are prepared in accordance with Japanese GAAP.
Page 60
© NEC Corporation 2010
09 Results
Net Income/Loss Change (Year on Year)
(Billions of Yen)
FY10/3
11.4
FY09/3
-296.6
improved income from the
reversal of provision for
contingent loss and improving
equity in earnings of affiliates
Improvement of
non-operating income/loss
+85.5
Others
+165.5
Decrease of business structure
improvement expenses and loss
from valuation of investment
expenses
Personal Solutions
Electron Devices
Improvement of
operating income/loss
+57.1
Page 61
© NEC Corporation 2010
+32.5
+31.0
09 Results
<Ref.> Financial Position Data
(Billions of Yen)
10/3
3,075.4
2,937.6
-137.7
Net Assets
785.6
931.9
146.3
Interest-bearing debt
925.2
729.5
-195.6
Shareholder's Equity
641.7
790.9
149.3
Equity ratio(%)
20.9%
26.9%
6.0pt
D/E ratio
1.44
0.92
0.52pt
Net D/E ratio
0.95
0.50
0.45pt
Total Assets
Page 62
Difference
from 09/3
09/3
© NEC Corporation 2010
09 Results
<Ref.> Capital Expenditures and Others
(Billions of Yen)
FY09/3
FY10/3
Actual
Actual
YoY
Difference
from Jan
28
Forecast
FY11/3
YoY
Capial Expenditure
103.1
83.1
-19.4%
-12.9
75.0
-9.7%
Depreciations
133.6
111.2
-16.8%
3.2
75.0
-32.6%
R&D expenses
346.5
276.0
-20.3%
-4.0
200.0
-27.5%
(Billions of Yen)
FY09/3
4Q Actual
R&D expenses
81.4
FY10/3
4Q Actual
YoY
-
68.5
YoY
-15.8%
* Forecast as of May 12, 2010
Page 63
© NEC Corporation 2010
09 Results
<Ref.> Geographical Segments Information
(Billions of Yen)
Japan
Net Sales
Operating income
to Net Sales(%)
Asia
Net Sales
Operating income
to Net Sales(%)
Europe
Net Sales
Operating income/loss
FY09/3
Actual
3,510.2
44.6
1.3%
229.4
7.1
Others
228.6
-5.8
247.5
-18.2
Eliminations/Others
Total
Operating income/loss
Net Sales
Operating income/loss
to Net Sales(%)
2.6%
-9.7%
4.1
China,Chinese Taipei,India,
Singapore and Indonesia
5.4%
-31.8%
5.8
UK,France,Netherlands
Germany,Italy and Spain
-20.2%
14.9
U.S.A
0.0%
197.5
-3.3
-
-33.9
4,215.6
-6.2
Major countries/regions
-13.9%
32.6
155.8
0.0
-
to Net Sales(%)
YoY
207.2
11.2
3.1%
to Net Sales(%)
Net Sales
Operating income/loss
FY10/3
Actual
3,022.6
77.2
-
-34.3
3,583.1
50.9
-
-0.3
-15.0%
57.1
1.4%
* Geographical information determines the classification of a country or region
* Net Sales represents sales for outside customers
Page 64
© NEC Corporation 2010
09 Results
<Ref.> Overseas sales
(Billions of Yen)
FY09/3
Actual
Asia
Net Sales
To consolidated total （％）
Europe
Net Sales
To consolidated total （％）
Others
Net Sales
To consolidated total （％）
Total
Net Sales
To consolidated total （％）
FY10/3
Actual
374.3
321.8
8.9%
9.0%
260.2
164.7
6.2%
4.6%
300.0
226.4
7.1%
6.3%
934.5
712.9
22.2%
19.9%
YoY
Major countries and regions
-14.0%
China,Chinese Taipei,India,
Singapore and Indonesia
-36.7%
UK,France,Netherlands,
Germany,Italy and Spain
-24.5%
U.S.A
-23.7%
* Geographical information determines the classification of a country or region
* Overseas sales represent sales of the Company and its consolidated subsidiaries to countries and regions outside of Japan
Page 65
© NEC Corporation 2010
Financial Forecast for FY2010
(appendix)
10 Forecast
IT Services Business
(Billions of Yen)
YoY
Sales
941.8
876.5
▐ Sales
(+1.5%)
 SI Services:
Aim a steady increase through
customers’ investment for their future
growth
890.0
 Outsourcing/Support Services:
+1.5%
-6.9%
Aim a steady increase through
“cloud-oriented services” that NEC
has refined through revamping its
Operating
Income
56.0
890.0
59.3
own core system and expanding its
60.0
SaaS menu
▐ Operating Income 60.0 (+0.7)
FY09/3
FY10/3
FY11/3
(Forecast)
 Ensure profitability through
implementing SI innovation
* Forecast as of May 12, 2010
Page 67
© NEC Corporation 2010
10 Forecast
IT Products Business
(Billions of Yen)
YoY
Sales
266.5
Operating
Income/Loss
21.8
209.2
200.0
-21.5%
-4.4%
5.0
-1.1
FY09/3
FY10/3
FY11/3
(Forecast)
▐ Sales
200.0
(-4.4%)
 Software:
Aim to increase sales by focusing on
system unification through
virtualization and cloud compliant
datacenter business
 Servers:
Decline due to the shift to low-priced
products
Expect to increase in Thin-client
systems, IA servers and peripherals
 Others:
Decline due to lower demand for
professional workstations from the
financial industry
Promote sales of professional
workstations for the retail industry
▐ Operating Income 5.0
(+6.1)
 Aim to turn to profit by continual cost
reduction
* Forecast as of May 12, 2010
Page 68
© NEC Corporation 2010
10 Forecast
Network Systems Business
(Billions of Yen)
YoY
Sales
▐ Sales
850.0
(+8.2%)
 Business for Telecom Carriers:
Domestic: same level as last year
Overseas: increase by investment
recovery from Telecom carriers
1,001.8
850.0
785.9
 Enterprise Network:
Increase both in Japan and
overseas markets due to investment
recovery
+8.2%
Operating -21.6%
Income
42.0
40.0
28,0
▐ Operating Income 40.0 (+12.0)
 Increase from revenue improvement
Maintain fixed costs and development
efficiency
FY09/3
FY10/3
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 69
© NEC Corporation 2010
10 Forecast
Social Infrastructure Business
(Billions of Yen)
YoY
Sales
340.4
316.6
▐ Sales
315.0
(-0.5%)
 Same level as last year by promoting
solutions for firefighting and
broadcasting under the severe national
budget conditions
315.0
-7.0%
▐ Operating Income 15.0
-0.5%
22.8
15.0
Operating
Income
(-7.8)
 Expect to decrease due to product mix
change and strategic investment for
the uptake of growing domains such as
digitalization projects
8.2
FY09/3
FY10/3
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 70
© NEC Corporation 2010
10 Forecast
Personal Solutions Business
(Billions of Yen)
YoY
Sales
▐ Sales
-13.0%
Increase due to the integration of the
mobile terminals business
830.0
Shipment of 7.5 million units worldwide
737.9
+35.2%
Mobile 348.1
Terminals
PC and
Others
500.5
Remain nearly flat due to steady
display business for overseas and
internet service provider business
(NEC BIGLOBE), despite the drop of
unit prices
-1.6%
Operating
Income/Loss
455.4
19.3
448.0
16.0
-13.2
FY09/3
 PC and Others
382.0
282.5
(+12.5%)
 Mobile terminals:
+12.5%
848.6
830.0
▐ Operating Income 16.0
(-3.3)
 Expect to decline due to the
development cost of new devices
FY10/3
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 71
© NEC Corporation 2010
10 Forecast
Personal Solutions Business
Overall condition
Mobile
Terminals
Domestic market is expected to decline slightly due to severe
market conditions continuously
Expect to Increase sales due to the integration of the mobile
terminal business
Shipment of 7.5 million units planned worldwide
Domestic PC market is expected to remain steady
PC and
Others
Shipment of approximately 2.6 million units planned
(expect to increase excluding “School New Deal” policy)
Display business for overseas markets and internet service
provider business (NEC BIGLOBE) expect to be steady
Developing new devices with open-source OS,
aiming to launch in the 2nd half
* Forecast as of May 12, 2010
Page 72
© NEC Corporation 2010
10 Forecast
Electron Devices Business
(Billions of Yen)
Sales
YoY
▐ Sales
* Sales for “Electric components/
others” includes an elimination of intragroup sales from the semiconductor
business until FY2009
572.8
Semiconductors
550.7
471.0
140.0
Operating
Income/Loss
120.9
-87.8
▐ Operating Income 1.0
-75.6%
101.8
-56.8
1.0
FY10/3
(+57.8)
 Expect to improve significantly due to
the deconsolidation of the
semiconductor business from FY2010
 Expect to improve through steady
implementation of structural reform
Electric components/
others
FY09/3
(-75.6%)
 Expect to decline significantly due to
the deconsolidation of the
semiconductor business from FY2010
-14.7%
671.6
140.0
FY11/3
(Forecast)
* Forecast as of May 12, 2010
Page 73
© NEC Corporation 2010
10 Forecast
<Ref.> Financial Forecast for 1H and Full Year by Segment
(Billions of Yen)
Net Sales
IT Services
Operating Income
to Net Sales(%)
Net Sales
IT Products
Operating Income/Loss
1H <April to September>
FY10/3
FY11/3
YoY
Actual
Forecast
382.5
380.0
-0.7%
10.5
12.0
1.5
2.7%
88.6
-12.3
to Net Sales(%)
Net Sales
Network Systems
Operating Income
to Net Sales(%)
Net Sales
Social Infrastructure
Operating Income
to Net Sales(%)
Net Sales
Personal Solutions
Operating Income
to Net Sales(%)
Net Sales
Electron Devices
Operating Income/Loss
-
383.1
8.8
2.3%
362.4
7.9
2.2%
Others
Operating Income
to Net Sales(%)
Elimination/Unclassif iable expenses
Operating Income/Loss
Net Sales
Total
Operating Income/Loss
to Net Sales(%)
Page 74
10.4%
-3.9
737.9
19.3
-73.9%
41.6
572.8
-56.8
-22.9%
-2.1
84.4
11.1
0.3%
© NEC Corporation 2010
13.1%
-6.3
-9.3%
42.7
-31.5
3,583.1
50.9
1.4%
-0.5%
-7.8
12.5%
-3.3
1.9%
140.0
1.0
-
8.2%
12.0
4.8%
830.0
16.0
2.6%
-4.4%
6.1
4.7%
315.0
15.0
7.2%
1.5%
0.7
2.5%
850.0
40.0
3.6%
3.3%
-22.0
1,500.0
5.0
-
316.6
22.8
-
30.0
1.0
-15.7
1,653.7
-37.7
4.1%
0.3
1.0%
-
8.0%
785.9
28.0
2.2%
70.0
-1.0
38.9
3.1
1.8%
3.2
YoY
6.7%
200.0
5.0
-
3.1%
400.0
4.0
268.6
-42.6
209.2
-1.1
-
135.0
3.0
2.0%
FY10/3
Actual
876.5
59.3
6.8%
7.3%
8.3
390.0
12.0
129.7
2.7
to Net Sales(%)
Net Sales
3.2%
95.0
-4.0
Full Year
FY11/3
Forecast
890.0
60.0
-75.6%
57.8
0.7%
75.0
3.0
-11.1%
-8.1
4.0%
-40.0
3,300.0
100.0
3.0%
-8.5
-7.9%
49.1
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