Presentation

Financial Results for Q1
Fiscal Year Ending March 31, 2015
July 30, 2014
NEC Corporation
(http://www.nec.com/en/global/ir)
Index
Ⅰ. Financial Results for Q1, FY15/3
Ⅱ. Financial Forecasts for FY15/3
l Financial Results for Q1, FY15/3 (Appendix)
l Financial Forecasts for FY15/3 (Appendix)
l Reference (Financial data)
Page 2
© NEC Corporation 2014
Ⅰ. Financial Results for Q1, FY15/3
Q1 Results
Summary of Financial Results for Q1
▐
Higher income with lower sales compared to the previous year.
Losses shrank slightly more than expected.
（Sales increased by approx. 3% based on existing core business)
(Billions of Yen)
Q1<April to June>
Actual
Actual
YoY
640.1
598.7
- 6.5%
Operating Loss
-21.8
-7.1
+14.8
Ordinary Loss
% to Net Sales
Net Loss
-3.4%
-28.2
-4.4%
-21.5
% to Net Sales
Free Cash Flow
Page 4
FY15/3
Net Sales
% to Net Sales
Note:
FY14/3
-3.4%
41.0
-1.2%
-10.0
+18.2
-1.7%
-10.1
+11.4
-1.7%
53.3
+12.3
Average exchange rates for Q1 of FY15/3 $1= ¥102.22, €1= ¥140.95
© NEC Corporation 2014
Q1 Results
Q1 Results by Segment
(Billions of Yen)
Net Sales
Public
Enterprise
Operating Income
% to Net Sales
0.3%
1.1%
Net Sales
Operating Loss
58.7
- 2.4
54.4
- 1.8
% to Net Sales
-4.1%
-3.3%
154.0
5.6
151.0
4.3
3.6%
2.9%
157.7
- 6.6
166.9
2.5
-4.2%
1.5%
143.1
- 9.9
80.0
- 4.9
-6.9%
-6.1%
- 8.9
640.1
- 21.8
- 8.9
598.7
- 7.1
-3.4%
-1.2%
Net Sales
Telecom Carrier
Operating Income
% to Net Sales
Net Sales
System Platform
Operating Income/Loss
% to Net Sales
Net Sales
Others
Operating Loss
% to Net Sales
Adjustment
Operating Loss
Net Sales
Total
Operating Loss
% to Net Sales
Page 5
Q1 <April to June>
FY14/3
FY15/3
YoY
Actual
Actual
126.6
146.4
+15.7%
0.4
1.6
+1.3
© NEC Corporation 2014
- 7.4%
+0.6
- 2.0%
- 1.3
+5.9%
+9.1
- 44.1%
+5.0
+0.1
- 6.5%
+14.8
Q1 Results
Public Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
146.4
126.6
114.9
Operating
Income
Ratio
Page 6
r Increased due to steady sales from
the government and public areas
1.1%
0.3%
Operating
Income
FY13/3
Q1
（+15.7%）
（+1.3）
r Improved due to sales increase
+10.1%
0.1
146.4
▐ Operating Income 1.6
+15.7%
0.1%
▐ Sales
1.6
0.4
FY14/3
Q1
FY15/3
Q1
© NEC Corporation 2014
Q1 Results
Enterprise Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
58.7
50.0
54.4
▐ Sales
（-7.4%）
s Decreased in manufacturing industries.
Retail and services industries remain
flat
+17.4%
▐ Operating Loss
-7.4%
Operating
Income
Ratio
- 5.3%
- 4.1%
- 3.3%
-2.7
FY13/3
Q1
-2.4
FY14/3
Q1
-1.8
（+0.6）
r Improved due to cost efficiency
despite sales decrease
Operating
Loss
Page 7
54.4
-1.8
FY15/3
Q1
© NEC Corporation 2014
Q1 Results
Telecom Carrier Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
155.1
154.0
(-1.3)
s Decreased due to a sales decline
3.6%
2.9%
12.7
TOMS : Telecom Operations and Management Solutions
5.6
Page 8
（-2.0%）
s Decreased in Japan and submarine
cable systems, despite increase in
mobile backhaul and TOMS
▐ Operating Income 4.3
-2.0%
8.2%
FY13/3
Q1
151.0
151.0
Operating
Income -0.7%
Ratio
Operating
Income
▐ Sales
FY14/3
Q1
4.3
FY15/3
Q1
© NEC Corporation 2014
Q1 Results
System Platform Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
163.1
▐ Sales
r Increased mainly in hardware such as
servers and business PCs
▐ Operating Income 2.5
Operating
Income
Ratio
1.5%
- 1.1%
r Turned to the black due to sales
increase and improved profitability
with better IT investment environment
- 4.2%
Operating
Income
/Loss
Page 9
（+9.1）
+5.9%
-3.3%
FY13/3
Q1
（+5.9%）
166.9
157.7
-1.8
166.9
-6.6
FY14/3
Q1
2.5
FY15/3
Q1
© NEC Corporation 2014
Q1 Results
Others
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
148.4
143.1
Operating -3.5%
Income
Ratio
▐ Sales
80.0
- 2.4%
- 6.9%
- 6.1%
-9.9
-4.9
FY13/3
Q1
Page 10
FY14/3
Q1
-4.9
（+5.0）
r Improved due to recovery of mobile
phone business despite impact from
deconsolidation of businesses
Operating
Loss
-3.6
（-44.1%）
s Decreased due to deconsolidation of
NEC Mobiling, Ltd. and
NEC BIGLOBE, Ltd. as well as a
decline in mobile phone shipments
▐ Operating Loss
-44.1%
80.0
FY15/3
Q1
© NEC Corporation 2014
Q1 Results
Net Loss Change (Year on Year)
FY14/3 Q1
<Apr-Jun>
-21.5
Subsidy income
Equity in earnings of affiliates
(Billions of Yen)
+2.0
+0.8
FY15/3 Q1
<Apr-Jun>
Improvement in non-operating
income/loss +3.4
-10.1
Others
-6.8
Improvement in
operating loss
+14.8
Gain on sales of subsidiaries and
affiliates’ stocks
-16.3
Gain on sales of investment
securities
-1.8
Income taxes
+10.5
System Platform
Others
Public
Enterprise
Adjustment
Telecom Carrier
Page 11
© NEC Corporation 2014
+9.1
+5.0
+1.3
+0.6
+0.1
-1.3
Q1 Results
Notable Actions and Outcomes
SDN
▐ SDN related projects
l
Awarded SDN implementation by West Nippon Expressway Company Limited,
Nagoya City University Hospital, etc.
l
Successfully conducted joint verification tests of mobile core network virtualization
with NTT DOCOMO, INC.
SDN : Software-Defined Networking
▐ Big Data related projects
BIG
DATA
l
Delivered a system for monitoring signs of malfunction
in large-scale plants for the Chugoku Electric Power CO., Inc.
l
Achieved the highest performance evaluation in the Face Recognition vendor test
by the U.S. National Institute of Standards and Technology (NIST)
for the third consecutive time
▐ Established NEC Energy Solutions, Inc.
(Completed the acquisition of A123 Energy Solutions)
▐ NETCOMSEC Co. Ltd made a repayment to the Japan Ministry of Defense
（approx. 7.4 billion yen）
l
Page 12
Allowance recorded in the previous fiscal year and no impact
on FY15/3 income forecast
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Ⅱ. Financial Forecasts for FY15/3
NEC’s Management Policy for FY15/3
▐ Market forecasts
l
The Japanese economy is expected to grow moderately into the second half of the
fiscal year （In terms of the world economy, a recovery is expected in Europe and the U.S. , while
emerging markets are expected to have moderate growth)
•
IT investment in Japan is expected to see a steady growth in fields such as system integration
and outsourcing
–
Public ： Expansion in investment related to social infrastructure such as continuous strong demand for
digital wireless fire prevention systems and an increase in investment by Japan’s central and local
governments for the national ID number system in the public field
•
Telecom Carrier ： Global expansion in investment for LTE related projects
and the TOMS / SDN market
•
Energy ： Rechargeable battery market to be stimulated by government subsidies
▐ Business strategy
l
Execute strategic investment in focused areas for growth
l
Expand GSD business, improve the profitability of international business, drive cost
reduction initiatives・・・
“CS No.1” “Global First” “One NEC”
※ GSD : Global Safety Division
CS : Customer Satisfaction
Page 14
© NEC Corporation 2014
Full Year
Forecasts
Summary of Financial Forecasts for FY15/3
▐ Achieve 120 billion yen in operating income
(Sales increase by approx. 4% based on existing core business)
(Billions of Yen)
Full Year
FY14/3
Actual
FY15/3
Forecasts
Net Sales
YoY
Public
Operating Income
% to Net Sales
7.9%
Net Sales
Net Sales
3,043.1
3,000.0
-1.4%
Enterprise
Operating Income
% to Net Sales
Operating Income
% to Net Sales
Ordinary Income
% to Net Sales
Net Income
% to Net Sales
106.2
120.0
3.5%
4.0%
69.2
90.0
2.3%
3.0%
33.7
35.0
1.1%
1.2%
+13.8
Operating Income
% to Net Sales
+20.8
Operating Income
% to Net Sales
+1.3
Operating Income/Loss
% to Net Sales
Adjustment
Net Income per share
(Yen)
12.99
13.47
+0.48
Operating Loss
Operating Income
% to Net Sales
525.9
-1.4
-0.3%
Net Sales
Total
780.8
30.7
3.9%
Net Sales
Others
725.8
60.3
8.3%
Net Sales
System Platform
272.3
6.5
2.4%
Net Sales
Telecom Carrier
FY14/3
Actual
738.4
58.6
Full Year
FY15/3
Forecasts
800.0
73.0
YoY
+8.3%
+14.4
9.1%
275.0
9.0
+1.0%
+2.5
3.3%
770.0
66.0
+6.1%
+5.7
8.6%
775.0
35.0
-0.7%
+4.3
4.5%
380.0
1.0
-27.7%
+2.4
0.3%
-48.6
-64.0
-15.4
3,043.1
106.2
3,000.0
120.0
-1.4%
+13.8
3.5%
4.0%
Note: Assumed exchange rates for FY15/3 $1=¥100, €1=¥130
《Note》 1H, FY14/3 Actual ： Net Sales 1,383.1 ／ Operating Income 0.4 billion yen
Page 15
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
Public Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
800.0
738.4
680.7
Operating +8.5%
Income
Ratio
+8.3%
49.0
FY13/3
FY14/3
73.0
(+14.4)
r Improve due to sales increase,
cost reductions and a decrease in
loss making projects
FY15/3
Forecasts(*)
《Note》 1H, FY14/3 Actual ： Net Sales 303.3 ／ Operating Income 14.5 billion yen
Page 16
(+8.3%)
r Increase due to steady sales mainly
from the government and public areas
such as fire prevention systems and
the national ID number system
▐ Operating Income 73.0
7.9%
58.6
800.0
9.1%
7.2%
Operating
Income
▐ Sales
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
Enterprise Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
275.0
272.3
▐ Sales
275.0
(+1.0%)
r Increase due to steady sales
from manufacturing industries
251.6
Operating
Income
Ratio
2.2%
Operating
Income
5.5
FY13/3
▐ Operating Income
+1.0%
+8.2%
3.3%
(+2.5)
r Improve due to sales increase
2.4%
9.0
6.5
FY14/3
FY15/3
Forecasts(*)
《Note》 1H, FY14/3 Actual ： Net Sales 130.1 ／ Operating Income 0.7 billion yen
Page 17
9.0
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
Telecom Carrier Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
Operating
Income +2.3%
Ratio
+6.1%
8.3%
8.6%
Operating
Income
FY13/3
60.3
FY14/3
(+5.7)
r Improve due to sales increase mainly
in international business
66.0
FY15/3
Forecasts(*)
《Note》 1H, FY14/3 Actual ： Net Sales 334.0 ／ Operating Income 19.4 billion yen
Page 18
(+6.1%)
r Japan: Remain flat
▐ Operating Income 66.0
10.1%
71.6
770.0
r International: Increase mainly in focus
areas such as TOMS / SDN,
in addition to mobile backhaul
770.0
725.8
709.3
▐ Sales
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
System Platform Business
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
780.8
775.0
744.4
Operating
Income
Ratio
4.4%
FY13/3
(-0.7%)
s Decrease due to declining business
PCs, despite an increase in IT
demand, such as servers and software
3.9%
4.5%
35.0
30.7
FY14/3
▐ Operating Income 35.0
(+4.3)
r Improve from integration with
NEC Fielding, Ltd. and sales increase
in servers and software
FY15/3
Forecasts(*)
《Note》 1H, FY14/3 Actual ： Net Sales 350.7 ／ Operating Income 1.8 billion yen
Page 19
775.0
-0.7%
+4.9%
Operating
Income
32.7
▐ Sales
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
Others
Billions of Yen (YoY)
(Billions of Yen)
YoY
Sales
685.7
▐ Sales
380.0
(-27.7%)
s Decrease due to deconsolidation
following sale of stock of NEC
BIGLOBE, Ltd. , etc.
-23.3%
Operating 525.9
Income
Ratio
380.0
2.5%
Operating
Income
/Loss
▐ Operating Income
-27.7%
- 0.3%
0.3%
-1.4
1.0
1.0
(+2.4)
r Improve due to improvement of the
mobile phone business and energy
business, despite impact from
deconsolidating businesses
16.9
FY13/3
FY14/3
FY15/3
Forecasts(*)
《Note》 1H, FY14/3 Actual ： Net Sales 264.9 ／ Operating Loss 11.8 billion yen
Page 20
© NEC Corporation 2014
* Forecasts as of July 30, 2014
Full Year
Forecasts
Net Income Change ( Year on Year)
Public
Telecom Carrier
System Platform
Enterprise
Others
Adjustment
+14.4
+5.7
+4.3
+2.5
+2.4
-15.4
(Billions of Yen)
Decrease in provision for contingent loss,
and decrease in interest expenses
Improvement in
non-operating
Increase in income/loss
+7.0
operating income
+13.8
FY14/3
Decrease in gain on sales of
subsidiaries and affiliates’ stocks
Others
-19.6
FY15/3
Forecast(*)
35.0
33.7
* Forecasts as of July 30, 2014
Page 21
© NEC Corporation 2014
Full Year
Forecasts
<Ref.> Major differences between IFRS and J-GAAP
(Note)
The following figures are calculated to estimate differences in the amounts for pension expenses and
goodwill, the two major items which differ in IFRS and J-GAAP, for the FY15/3 financial outlook if
IFRS is applied. These differences in the amounts are calculated based on assumptions as of the
date on which they were made. Furthermore, the differences in the two accounting methods are not
limited to these two major items. Notably, they are not audited by the accounting auditors and NEC
does not undertake any obligation to update or revise the figures as the circumstances change.
These estimated figures are disclosed voluntarily as references for investors only.
NEC has NOT made a decision to adopt IFRS at the present, and continues to disclose materials
required by the regulations in J-GAAP.
(Billions of Yen)
FY15/3 Full Year
Amortization of
Amortization
unrecognized obligation
of Goodwill
for pension
Operating Income
14.0
Non-Operating
Income / Loss
10.4
Net Income
19.0
18.0
© NEC Corporation 2014
-
18.0
＊ In calculating pension cost by IFRS, actuarial gains or losses in pension
expenses are not amortized nor is goodwill amortized annually.
Page 22
Total
37.0
* Forecasts as of July 30, 2014
Summary
Achieving the goals for FY15/3 is
a necessary step for realization of
the Mid-term Management Plan 2015
Accomplish the full-year forecasts
for the third consecutive year
and assure stable dividends
* Forecasts as of July 30, 2014
Page 23
© NEC Corporation 2014
Page2011
25
© NEC Corporation
© NEC Corporation 2014
Financial Results for Q1, FY15/3 (Appendix)
Q1 Results
Results for Q1 by Segment ( three-year transition )
(Billions of Yen)
Net Sales
Operating Income/Loss
-7.9
Public
Public
Enterprise
Telecom
Carrier
631.5
640.1
114.9
126.6
50.0
155.1
-21.8
Telecom
Carrier
598.7
58.7
0.1
146.4
Enterprise
System
Platform
54.4
Others
154.0
12.7
- 2.7
- 1.8
- 3.6
0.4
5.6
- 2.4
- 6.6
Adjustment
163.1
1.6
4.3
2.5
- 1.8
- 4.9
- 8.9
151.0
System
Platform
-7.1
157.7
- 12.6
- 9.9
166.9
Others
Page 27
148.4
143.1
FY13/3
Q1
FY14/3
Q1
- 8.9
80.0
FY15/3
Q1
© NEC Corporation 2014
FY13/3
Q1
FY14/3
Q1
FY15/3
Q1
System
Platform
Q1 Results
Financial Results for Q1 by Segment
(Billions of Yen)
Net Sales
Operating Income/Loss
Others
Operating Loss
for Q1,FY15/3
Public
13%
-7.1
25%
Telecom
Carrier
4.3
Enterprise
Sales for Q1
FY15/3
9%
Public
1.6
598.7
System Platform
28%
Telecom Carrier
25%
Page 28
© NEC Corporation 2014
System
Platform
2.5
Enterprise
Others
-1.8
-4.9
Q1 Results
Sales Change (Year on Year)
Decreased in Japan and submarine cable systems,
despite increase in mobile backhaul and TOMS
(Billions of Yen)
Increased mainly in hardware
such as servers and business PCs
Steady sales from
the government and public areas
FY14/3 Q1
<Apr-Jun>
Telecom Carrier System Platform
Public -3.0 (-2.0%)
+9.3 (+5.9%)
+19.8
Others
(+15.7%)
-63.2
Decreased due to deconsolidation
of NEC Mobiling, Ltd. and
NEC BIGLOBE, Ltd. as well as a
decline in mobile phone shipments
640.1
Enterprise
-4.4(-7.4%)
FY15/3 Q1
<Apr-Jun>
598.7
Decreased in manufacturing industries.
Retail and services industries remain flat
Page 29
© NEC Corporation 2014
Q1 Results
Operating Loss Change (Year on Year)
(Billions of Yen)
FY14/3 Q1
<Apr-Jun>
FY15/3 Q1
<Apr-Jun>
Recovery of mobile
phone business
-21.8
Sales Increase and improved
profitability with better
IT investment environment
System
Platform
+9.1
Cost efficiency
-7.1
Others
+5.0
Adjustment
+0.1
Enterprise
+0.6
Public
+1.3
Sales Increase
Page 30
Telecom Carrier
-1.3
© NEC Corporation 2014
Sales decrease
Q1 Results
International Sales
(Billions of Yen)
YoY
EMEA
4.8%
Greater
China,
APAC
8.8%
The
Americas
7.3%
Japan
48.6
24.6
28.7
79.1%
52.6
47.5
44.0
+8.1%
-7.4%
+16.5%
FY14/3
Q1
FY15/3
Q1
FY14/3
Q1
FY14/3
Q1
FY15/3
Q1
FY15/3
Q1
Q1 <April to June>
FY14/3
FY15/3
YoY
Actual
Actual
International sales
％ to Net Sales
120.8
125.3
18.9%
20.9%
+3.7%
* Sales are classified by country or region based on customer locations.
Page 31
© NEC Corporation 2014
Q1 Results
Financial Position Data
(Billions of Yen)
End of March
2014
End of June
2014
Difference
from March
2014
End of June
2013
2,505.3
2,378.1
-127.2
2,466.1
Net Assets
767.7
726.5
-41.1
784.7
Interest-bearing debt
575.2
554.1
-21.1
665.5
Shareholders' Equity
695.9
657.3
-38.6
683.4
Total Assets
Equity ratio(%)
27.6%
- 0.2pt
27.7%
D/E ratio (times)
0.83
0.84
- 0.01pt
0.97
Net D/E ratio (times)
0.53
0.50
+0.03pt
0.55
206.6
226.4
Cash and cash equivalents
Page 32
27.8%
© NEC Corporation 2014
+19.7
286.7
Q1 Results
<Ref.> Balance Sheets (At the end of June, 2014)
(Billions of Yen)
Total Assets 2,378.1
Current Assets
1,362.9
<Compared to end of March 2014>
(-127.2)
Liabilities
1,651.5
-140.0
-86.1
Collection of accounts
receivable-trade
Noncurrent Assets
1,015.2
+12.8
-41.1
Compared to
end of March
2014
Decrease in notes and accounts
payable-trade and accrued
expenses
Net Assets
726.5
Decrease in retained earnings from the
application of new accounting standards
for retirement benefits
Page 33
© NEC Corporation 2014
Financial Forecasts for FY15/3 (Appendix)
Financial Forecasts for FY15/3 by Segment
(three-year transition)
Full Year
Forecasts
(Billions of Yen)
Net Sales
3,071.6
Public
680.7
Enterprise
251.6
Telecom
Carrier
System
Platform
Others
709.3
744.4
Operating Income/Loss
120.0
114.6
3,043.1
738.4
272.3
725.8
780.8
3,000.0
800.0
106.2
Public
49.0
Enterprise
5.5
Telecom
Carrier
275.0
71.6
73.0
58.6
9.0
6.5
66.0
60.3
770.0
System
Platform
32.7
Others
16.9
Adjustment
- 61.0
30.7
- 1.4
- 48.6
FY13/3
FY14/3
775.0
685.7
525.9
380.0
FY13/3
FY14/3
FY15/3
Forecasts(*)
35.0
1.0
- 64.0
FY15/3
Forecasts(*)
* Forecasts as of July 30, 2014
Page 35
© NEC Corporation 2014
Full Year
Forecasts
Financial Forecasts for FY15/3 by Segment
(Billions of Yen)
Net Sales
Operating Income
Others
Public
12%
27%
Telecom
Carrier
Public
73.0
66.0
Operating Income
Forecast for FY15/3
120.0
Enterprise
9%
Sales Forecast
for FY15/3
System
Platform
35.0
3,000.0
Enterprise
System Platform
9.0
26%
Others
1.0
Telecom Carrier
26%
* Forecasts as of July 30, 2014
Page 36
© NEC Corporation 2014
Full Year
Forecasts
Sales Change (Year on Year)
(Billions of Yen)
Japan: Remain same level
International: Increase mainly in TOMS／
SDN, mobile backhaul
Decrease from a decline in business PCs,
despite an increase in IT demand such as servers
Telecom Carrier System Platform
+44.2 (+6.1%)
-5.8 （-0.7%）
Steady sales from the manufacture
Decrease in mobile phone shipments
Enterprise
+2.7 (+1.0%)
Deconsolidation of
NEC BIGLOBE, Ltd. and
NEC Mobiling, Ltd.
Others
-145.9
FY14/3
3,043.1
Public
+61.6 (+8.3%)
FY15/3
Forecast(*)
3,000.0
Steady sales from government
and public areas
* Forecasts as of July 30, 2014
Page 37
© NEC Corporation 2014
Full Year
Forecasts
Operating Income Change (Year on Year)
Deconsolidation of NEC BIGLOBE, Ltd. and NEC Mobiling, Ltd.
Improve from mobile phone business and Energy business
Improve from integration
with NEC Fielding, Ltd.
and sales increase in servers
Strategic investment
increase
Adjustment
-15.4
System Platform
+4.3
Improve from sales increase
Others
+2.4
Enterprise
+2.5
(Billions of Yen)
FY15/3
Forecast(*)
120.0
Telecom Carrier
+5.7
FY14/3
106.2
Public
+14.4
Improve due to sales
increase mainly in
international business
Improve due to sales increase,
cost reduction and fewer
loss-making projects
* Forecasts as of July 30, 2014
Page 38
© NEC Corporation 2014
Full Year
Forecasts
Capital Expenditure, Depreciation and R&D expenses
(Billions of Yen)
FY13/3
FY14/3
FY15/3
Actual
Actual
Forecasts
Capital Expenditure
45.6
Depreciation
R&D expenses
% to Net Sales
YoY
YoY
40.8
50.0
+22.5%
51.2
45.2
50.0
+10.7%
151.7
142.7
150.0
+5.1%
4.9%
*
4.7%
5.0%
* Not including acquisition of trust beneficiary rights
Capital Expenditure
50.0
45.6
40.8
Depreciation
51.2
45.2
R&D expenses
50.0
151.7
150.0
142.7
+5.1%
+10.7%
＋22.5％
％ to Net
Sales
4.9%
FY13/3
FY14/3
FY15/3
Forecast(*)
FY13/3
FY14/3
FY15/3
Forecast(*)
FY13/3
4.7%
FY14/3
5.0%
FY15/3
Forecast(*)
* Forecasts as of July 30, 2014
Page 39
© NEC Corporation 2014
Reference (Financial data)
Net Sales, Operating Income/Loss
(Billions of Yen)
8.6%
6.8%
4.8%
YoY
3.0%
Operating Income Ratio
3.4%
3.3%
- 1.2%
- 1.2%
- 3.4%
959.6
901.8
Net Sales
816.3
722.0
+5.4%
631.5
+6.4%
743.0
-2.5%
700.4
640.1
598.7
-9.0%
+7.9%
-3.0%
-5.6%
+1.4%
-6.5%
82.5
Operating
Income/
Loss
55.2
42.8
24.4
-7.1
-21.8
-7.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 41
23.4
22.2
FY14/3
© NEC Corporation 2014
FY15/3
International Sales
20.5%
18.9%
International Sales Ratio
16.7%
(Billions of Yen)
YoY
16.8%
16.4%
15.4%
International Sales
20.9%
19.7%
14.2%
157.8
152.3
138.2
136.2
121.1
128.4
120.8
+11.8%
+22.9%
+14.1%
-1.9%
+8.1%
97.4
+11.2%
125.3
+3.7%
+24.0%
-15.4%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 42
FY14/3
© NEC Corporation 2014
FY15/3
Sales, Operating Income (Public)
(Billions of Yen)
10.7%
10.1%
8.8%
8.0%
9.8%
YoY
5.9%
0.1%
254.5
Operating Income Ratio
271.0
0.3%
1.1%
+6.5%
+3.7%
Net Sales
176.7
162.0
+12.3%
146.4
+9.1%
126.6
+2.4%
114.9
+9.9%
26.5
25.8
+10.1%
+1.7%
Operating
Income
14.3
+15.7%
17.6
14.2
8.9
0.1
1.6
0.4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 43
164.0
149.2
FY14/3
© NEC Corporation 2014
FY15/3
Sales, Operating Income/Loss (Enterprise)
4.5%
4.4%
0.3%
YoY
- 0.3%
- 3.3%
- 4.1%
- 5.3%
81.5
Operating Income Ratio
73.7
68.8
Net Sales
(Billions of Yen)
7.4%
6.7%
59.0
+18.9%
71.3
58.7
+7.2%
+10.7%
60.7
+3.7%
54.4
50.0
+2.8%
+17.4%
+16.1%
-7.4%
+12.1%
Operating
Income/
Loss
4.6
6.0
3.3
0.2
-2.7
3.1
-2.4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 44
-1.8
-0.2
FY14/3
© NEC Corporation 2014
FY15/3
Sales, Operating Income (Telecom Carrier)
(Billions of Yen)
YoY
13.0%
11.3%
9.7%
7.7%
10.8%
8.2%
7.2%
3.6%
Operating Income Ratio
2.9%
219.0
200.3
187.5
Net Sales
155.1
180.0
166.3
154.0
+3.3%
+10.6%
151.0
-4.0%
+3.8%
+6.0%
+11.7%
+9.4%
172.7
-0.7%
Operating
Income
28.5
22.7
18.2
17.9
13.8
12.7
12.4
5.6
4.3
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 45
-2.0%
FY14/3
© NEC Corporation 2014
FY15/3
Sales, Operating Income/Loss (System Platform)
(Billions of Yen)
6.6%
4.3%
4.3%
2.5%
1.5%
- 1.1%
Operating Income Ratio
209.9
167.3
+11.6%
-2.7%
185.7
166.9
157.7
+1.3%
+10.8%
-5.4%
+11.0%
+5.9%
-3.3%
20.9
16.8
13.5
8.4
4.2
-1.8
8.0
2.5
-6.6
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 46
+16.4%
193.1
Net Sales
Operating
Income/
Loss
244.3
- 4.2%
204.1
163.1
YoY
8.6%
8.0%
FY14/3
© NEC Corporation 2014
FY15/3
Sales, Operating Income/Loss (Others)
(Billions of Yen)
10.8%
6.7%
5.4%
0.7%
Operating Income Ratio
- 1.6%
- 2.4%
- 6.2%
- 6.1%
- 6.9%
193.8
Net Sales
180.1
163.4
-5.7%
148.4
143.1
+10.4%
143.7
121.8
-18.7%
-34.2%
117.3
-3.5%
-12.1%
-37.2%
Operating
Income/
Loss
80.0
-34.9%
21.0
-44.1%
9.6
9.7
-3.6
-10.1
-9.9
0.8
-2.0
-4.9
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
<Jul-Sep>
<Oct-Dec>
<Jan-Mar>
<Apr-Jun>
FY13/3
Page 47
YoY
FY14/3
© NEC Corporation 2014
FY15/3
Exchange Rate
(Yen)
150
Euro/Yen Exchange Rate (Actual)
Assumed Exchange Rate
145
Average Exchange Rate ¥140.95
140
135
130
125
105
Average Exchange Rate ¥102.22
100
Dollar/Yen Exchange Rate (Actual)
Assumed Exchange Rate
95
4/1
Page 48
4/30
5/30
© NEC Corporation 2014
6/30
Stock Price
(Yen)
16,000
340
June 23 : Ordinary General Meeting
Of Shareholders
ＮＥＣ
the Nikkei Stock
15,500
330
320
April 28:
Earnings Release
15,000
310
14,500
300
14,000
290
13,500
280
4/1
Page 49
4/30
5/30
© NEC Corporation 2014
6/30
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 may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director
of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safeharbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified
by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans,"
"estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can
also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking
statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and
NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking
statements, which reflect NEC’s analysis and expectations only. Forward-looking statements 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)
fluctuating demand for, and competitive pricing pressure on, NEC’s products and services, (iii) NEC’s ability to continue to
win acceptance of NEC’s products and services in highly competitive markets, (iv) NEC’s ability to expand into foreign
markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC’s business and
operations, (vi) NEC’s ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii)
movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of
unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from
devaluation of listed securities held by NEC, and (iv) impact of any regulatory action or legal proceeding against NEC. Any
forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time
to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any
obligation to update or revise any of the forward-looking statements, whether as a result of 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.