NEC (6701) Investor update summary

Review of 2025 midterm management plan

• Revenue increased from JPY 2,994 billion to JPY 3,582.7 billion, with adjusted operating profit margin rising from 6% to 11.1%.

• EBITDA grew from JPY 295.8 billion to JPY 530.2 billion, achieving a 14.8% margin and 12.4% CAGR; ROIC reached 9.1%, surpassing the 6.5% target.

• Engagement score improved to 48%, close to the 50% target and nearly double previous levels, reflecting successful cultural transformation.

• Strategic initiatives included launching NEC BluStellar, advancing DX business, commercializing in-house generative AI, and strengthening international IT businesses.

• Structural and cultural reforms focused on role-based HR management, diversity, increasing female and foreign executives, and simplifying group structure.

Organizational and governance transformation

• Transitioned to a nomination committee structure and reformed the board of directors.

• Streamlined organizational layers, enhanced management control with segment changes and new evaluation metrics.

• Promoted data-driven management and the Client Zero initiative to leverage advanced technologies.

• Ongoing priorities include strengthening the talent portfolio for the AI era and enhancing global group governance.

• Transformation of culture and management aims to foster an AI-native organization and streamline group management.

Market environment and AI-driven transformation

• Market capitalization reached an all-time high, entering a new phase driven by AI expansion.

• AI innovation and new security environments are reshaping global order, presenting both threats and opportunities.

• Capital markets are concerned about tech service companies' prospects, with major market caps declining by JPY 80 trillion YTD and a 30% drop between Jan and Apr 2026.

• Automation, in-house development, and AI adoption are reducing system development value and increasing risks.

• The global AI services market is projected to exceed JPY 45 trillion, with value shifting toward consulting and operations.