NEC : Earnings Releases

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***** For immediate use October 30, 2023

Consolidated Financial Results

for the Six-month Period Ended

September 30, 2023

30, 2023)

(1) Consolidated Operating Results

(Million JPY, rounded to the nearest million JPY)

1. Consolidated Financial Results for the Six-monthPeriod Ended September 30, 2023 (April 1, 2023 - September

Yes

Yes (for institutional investors and analysts)

October 31, 2023

Scheduled date of dividend payments December 1, 2023

Company name NEC Corporation

Securities code 6701 URL https://www.nec.com/ Representative Takayuki Morita, President and CEO

Contact Kazushi Okabe, Senior Director of the Corporate Communications Department TEL [phone]Scheduled date of quarterly report

filing

Supplementary materials for financial results Financial results briefing

October 30, 2023 Listing: Tokyo Stock Exchange

Consolidated Financial Results for the Six-monthPeriod Ended September 30, 2023 [IFRS]

(Percentage indicate year-on-year changes.)

																																						Net profit				Total
																								Profit before							attributable to
						Revenue		Operating profit				Net profit				comprehensive
									income taxes			owners of the
																																	income
																																							parent
						JPY			%				JPY			%				JPY			%		JPY		%				JPY		%				JPY			%
	Six-month period ended				(millions)				(millions)				(millions)				(millions)		(millions)			(millions)
	September 30, 2023				1,548,801			6.4			27,995		101.9			31,977			32.6				17,791		47.4		12,914		225.0			102,921			22.4
	September 30, 2022				1,455,371			5.2			13,867		(40.2)			24,111			(6.4)		12,070		(34.8)		3,973		(70.2)				84,087			215.6
						Adjusted						Non-GAAP		Non-GAAP profit	Basic earnings	Diluted earnings	Non-GAAP
													attributable to	earnings per
						operating profit				operating profit		owners of the parent			per share					per share		share
						JPY					%						JPY				%				JPY		%				JPY						JPY				JPY
	Six-month period ended				(millions)						(millions)				(millions)
	September 30, 2023				45,824			46.9		46,118	150.7		25,559				279.4		48.48					48.48					95.96
	September 30, 2022				31,185			(26.0)		18,394			－		6,737				－		14.60					14.59					24.75
	(2) Consolidated Financial Position
																																Equity attributable to				Ratio of equity attributable to
						Total assets							Total equity												owners of the parent
																		owners of the parent
																																						to total assets
	As of								JPY (millions)								JPY (millions)							JPY (millions)												%
	September 30, 2023							4,078,113									1,995,923						1,696,830												41.6
	March 31, 2023							3,984,050									1,912,724						1,623,817												40.8
2. Dividends
																									Annual dividends
			End of first quarter		End of second quarter		End of third quarter			Fiscal year-end							Total
	Years ended								JPY										JPY									JPY								JPY						JPY
	March 31, 2023										－										55.00									－						55.00								110.00
	March 31, 2024										－										60.00
	March 31, 2024																															－						60.00								120.00
	(forecast)

*Note-Revision in the dividends forecast from latest announcement: None

3. Consolidated Financial Results Forecast for the Year Ending March 31, 2024 (April 1, 2023 - March 31, 2024) (Percentage indicate year-on-yearchanges.)

Adjusted

Non-GAAP

Non-GAAP profit

Non-GAAP

Revenue

attributable to owners

operating profit

operating profit

earnings per share

of the parent

Year ending

JPY

%

JPY

%

JPY

%

JPY

%

JPY

(millions)

(millions)

(millions)

(millions)

March 31, 2024

3,380,000

2.0

220,000

7.0

220,000

11.7

140,000

5.4

525.63

*Note-Revision in the consolidated financial results forecast from latest announcement: No

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*Notes

1. Changes in significant subsidiaries during the period
   (Changes in specified subsidiaries resulting in the change in consolidation scope): None

	Newly included	: None
	Excluded	: None
(2) Changes in accounting policies and changes in accounting estimates
1)	Changes in accounting policies required by IFRS	: Yes
2)	Changes in accounting policies other than 1)		: None
3)	Changes in accounting estimates		: None
(3) Number of shares outstanding (common stock)
1)	Number of shares outstanding at the end of	September 30, 2023 272,849,863 shares March 31, 2023	272,849,863 shares
	period (including treasury stock)
2)	Number of treasury stock at the end of period September 30, 2023 6,393,154 shares March 31, 2023	6,501,510 shares

1. Average number of shares during the period September 30, 2023 266,362,078 shares September 30, 2022 272,169,648 shares

*This consolidated financial results falls outside the scope of quarterly review procedures to be performed by certified public accountants or an audit firm.

*Explanation concerning the appropriate use of the financial results forecast and other special matters (Adjusted profit (loss))

"Adjusted operating profit (loss)" is measured by deducting amortization of intangible assets recognized as a result of M&A and expenses for acquisition of companies (financial advisory fees and other fees) from operating profit (loss).

(Non-GAAP profit (loss))

"NON-GAAP profit (loss)" is an indicator for measuring underlying profitability. It is measured by deducting amortization of intangible assets recognized as a result of M&A, expenses for acquisition of companies (financial advisory fees and other fees), structural reform expenses, impairment losses, stock compensation and other one-time profits (losses) from operating profit (loss). Also, "Non-GAAP net profit (loss) attributable to owners of the parent" is an indicator for measuring underlying profitability attributable to owners of the parent. It is measured by deducting adjustment items of profit (loss) before income taxes and corresponding amounts of tax and non-controlling interests from net profit (loss) attributable to owners of the parent.

(Cautionary statement with respect to forward-looking statements)

The forward-looking statements such as operating results forecast contained in this statements summary are based on the information currently available to NEC Corporation ("the Company") and certain assumptions considered reasonable. Actual operating results may differ significantly from these forecasts due to various factors. For details, please refer to "2. Cautionary Statement with Respect to Forward-Looking Statements" on page 15.

(How to obtain supplementary financial materials and information on the financial results briefing)

On October 30, 2023, the Company will hold a financial results briefing for the institutional investors and analysts. Presentation materials will be posted on the company website after the release of financial results, and the presentation video and Q&A summary will be also posted on the company website promptly after the financial results briefing.

In addition to the above, the Company periodically holds briefings on business and operating results for the individual investors. Presentation materials and Q&A summary will be posted on the company website promptly after the briefing. For the schedule and details, please check the company website.

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Table of Contents of Attachment

1. Condensed Interim Consolidated Financial Statements and
   Notes to Condensed Interim Consolidated Financial Statements ………………………………...... 4
2. 1. Condensed Interim Consolidated Statements of Financial Position ………………………...... 4
   2. Condensed Interim Consolidated Statements of Profit or Loss and
      Comprehensive Income …………………………………………………………………………..... 6
   3. Condensed Interim Consolidated Statements of Changes in Equity ……………………......... 8
   4. Condensed Interim Consolidated Statements of Cash Flows ……………………………......... 9
   5. Notes to Condensed Interim Consolidated Financial Statements ……………………….......... 11
3. Cautionary Statement with Respect to Forward-Looking Statements ……………………….......... 15

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1. Condensed Interim Consolidated Financial Statements and Notes to Condensed Interim Consolidated Financial Statements

1. Condensed Interim Consolidated Statements of Financial Position

			JPY (millions)
	As of		As of
	March 31, 2023		September 30, 2023
Assets
Current Assets
Cash and cash equivalents	419,462	403,097
Trade and other receivables	799,875	590,751
Contract assets	335,852	455,955
Inventories	267,576	329,397
Other financial assets	15,776	20,940
Other current assets	157,362	190,859
Subtotal
1,995,903	1,990,999
Assets held for sale	－	13,417
Total current assets
1,995,903	2,004,416
Non-current assets
Property, plant and equipment, net	563,384	592,269
Goodwill	355,572	387,810
Intangible assets, net	378,250	393,682
Investments accounted for	80,425	83,908
using the equity method
Other financial assets	207,731	206,486
Deferred tax assets	159,930	161,386
Other non-current assets	242,855	248,156
Total non-current assets
1,988,147	2,073,697
Total assets
3,984,050	4,078,113

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Condensed Interim Consolidated Statements of Financial Position (Continued)

			JPY (millions)
	As of		As of
	March 31, 2023		September 30, 2023
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables	497,625	458,290
Contract liabilities	287,859	332,494
Bonds and borrowings	130,867	133,394
Accruals	240,870	220,191
Lease liabilities	47,056	55,930
Other financial liabilities	21,950	25,785
Accrued income taxes	20,951	21,436
Provisions	57,574	49,828
Other current liabilities	60,757	41,583
Subtotal
1,365,509	1,338,931
Liabilities directly associated with assets	－	5,564
held for sale
Total current liabilities	1,365,509	1,344,495
Non-current liabilities
Bonds and borrowings	320,794	334,436
Lease liabilities	109,764	118,034
Other financial liabilities	20,428	32,778
Net defined benefit liabilities	179,106	177,061
Provisions	20,470	19,654
Other non-current liabilities	55,255	55,732
Total non-current liabilities
705,817	737,695
Total liabilities
2,071,326	2,082,190
Equity
Share capital	427,831	427,831
Share premium	165,034	164,401
Retained earnings	764,604	762,853
Treasury shares	(31,588)	(31,352)
Other components of equity	297,936	373,097
Total equity attributable to
1,623,817	1,696,830
owners of the parent
Non-controlling interests	288,907	299,093
Total equity
1,912,724	1,995,923
Total liabilities and equity
3,984,050	4,078,113

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(2) Condensed Interim Consolidated Statements of Profit or Loss and Comprehensive Income Condensed Interim Consolidated Statements of Profit or Loss

			JPY (millions)
Six-month period ended September 30	2022	2023
Revenue	1,455,371	1,548,801
Cost of sales	1,072,517	1,124,928
Gross profit
382,854	423,873
Selling, general and administrative expenses	383,023	395,925
Other operating income (expenses)	14,036	47
Operating profit
13,867	27,995
Finance income	11,348	7,715
Finance costs	4,115	6,095
Share of profit of entities accounted for using	3,011	2,362
the equity method
Profit before income taxes	24,111	31,977
Income taxes	12,041	14,186
Net profit
12,070	17,791
Net profit attributable to
Owners of the parent	3,973	12,914
Non-controlling interests	8,097	4,877
Total
12,070	17,791
Earnings per share attributable to
owners of the parent
Basic earnings per share (JPY)	14.60	48.48
Diluted earnings per share (JPY)	14.59	48.48

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Condensed Interim Consolidated Statements of Comprehensive Income

		JPY (millions)
Six-month period ended September 30	2022	2023
Net profit	12,070	17,791
Other comprehensive income, net of tax
Items that will not be reclassified to profit or loss

Equity instruments designated as measured at fair value through other comprehensive income

Remeasurements of defined benefit plans

Share of other comprehensive income of entities accounted for using the equity method

Total items that will not be reclassified to profit or loss

3,456	8,241
－		－
(19)	114
3,437	8,355

Items that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations

Cash flow hedges

Share of other comprehensive income of entities accounted for using the equity method

Total items that may be reclassified subsequently to profit or loss

Total other comprehensive income, net of tax Total comprehensive income

70,41778,540

(3,304)(3,296)

1,4671,531

68,58076,775

72,01785,130

84,087102,921

Total comprehensive income attributable to

Owners of the parent	67,506	88,075
Non-controlling interests	16,581	14,846
Total
84,087	102,921

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(3) Condensed Interim Consolidated Statements of Changes in Equity

(Six-month period ended September 30, 2022)

																JPY (millions)
				Equity attributable to owners of the parent					Non-
																	Total
										Other
		Share		Share		Retained		Treasury						controlling
												equity
						components		Total			interests
		capital		premium		earnings		shares
						of equity
As of April 1, 2022		427,831	169,090	678,653	(1,906)	239,835	1,513,503		273,139		1,786,642
Net profit		－		－	3,973		－		－	3,973		8,097		12,070
Other comprehensive		－		－		－		－	63,533	63,533		8,484		72,017
income
Comprehensive income		－		－	3,973		－	63,533	67,506		16,581		84,087
Purchase of treasury shares		－		－		－	(9,412)		－	(9,412)			－		(9,412)
Disposal of treasury shares		－	1		－	865		－	866			－		866
Cash dividends		－		－	(13,642)		－		－	(13,642)		(4,628)		(18,270)
Changes in interests in		－	(1,050)		－		－		－	(1,050)		369		(681)
subsidiaries
Total transactions with		－	(1,049)	(13,642)	(8,547)		－	(23,238)		(4,259)		(27,497)
owners
As of September 30, 2022		427,831	168,041	668,984	(10,454)	303,368	1,557,770		285,461		1,843,231
(Six-month period ended September 30, 2023)
																JPY (millions)
				Equity attributable to owners of the parent					Non-
																	Total
										Other
		Share		Share		Retained		Treasury						controlling
												equity
						components		Total			interests
		capital		premium		earnings		shares
						of equity
As of April 1, 2023		427,831	165,034	764,604	(31,588)	297,936	1,623,817		288,907		1,912,724
Net profit		－		－	12,914		－		－	12,914		4,877		17,791
Other comprehensive		－		－		－		－	75,161	75,161		9,969		85,130
income
Comprehensive income		－		－	12,914		－	75,161	88,075		14,846		102,921
Purchase of treasury shares		－		－		－	(1,113)		－	(1,113)			－		(1,113)
Disposal of treasury shares		－	287		－	1,349		－	1,636			－		1,636
Cash dividends		－		－	(14,665)		－		－	(14,665)		(4,936)		(19,601)
Changes in interests in		－	(920)		－		－		－	(920)		276		(644)
subsidiaries
Total transactions with		－	(633)	(14,665)	236		－	(15,062)		(4,660)		(19,722)
owners
As of September 30, 2023		427,831	164,401	762,853	(31,352)	373,097	1,696,830		299,093		1,995,923

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(4) Condensed Interim Consolidated Statements of Cash Flows

			JPY (millions)
Six-month period ended September 30	2022	2023
Cash flows from operating activities
Profit before income taxes	24,111	31,977
Depreciation and amortization	89,831	93,174
Impairment loss	66	112
Increase (Decrease) in provisions	387	(6,946)
Finance income	(11,348)	(7,715)
Finance costs	4,115	6,095
Share of profit of entities accounted for using	(3,011)	(2,362)
the equity method
Decrease in trade and other receivables	169,959	211,314
(Increase) in inventories	(76,365)	(63,320)
(Decrease) in trade and other payables	(28,569)	(43,722)
Others, net	(164,143)	(163,205)
Subtotal
5,033	55,402
Interest received	962	3,120
Dividends received	2,787	2,701
Interest paid	(3,096)	(4,489)
Income taxes paid	(14,865)	(29,908)
Net cash provided by (used in) operating activities
(9,179)	26,826
Cash flows from investing activities

Purchases of property, plant and equipment

Proceeds from sales of property, plant and equipment

Acquisitions of intangible assets

Purchase of equity instruments designated as measured at fair value through other comprehensive income Proceeds from sales of equity instruments designated as measured at fair value through other comprehensive income

Purchase of shares of newly consolidated subsidiaries

Proceeds from sales of subsidiaries

Purchases of investments in associates or joint ventures

Proceeds from sales of investments in associates or joint ventures

Others, net

Net cash used in investing activities

(30,668)	(36,954)
7,762	3,169
(8,248)	(11,169)
(10)	(11)
7,063	11,876
(6,935)	(811)
9,679	1,892
(198)	(80)
－	209
(5,586)	(3,138)
(27,141)	(35,017)

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