NEC (6701) Investor update summary

Review of previous mid-term management plan

• Revenue grew from JPY 2,994 billion to JPY 3,582.7 billion, with adjusted operating profit rising from JPY 178.2 billion to JPY 386.8 billion and margin from 6.0% to 11.1%.

• EBITDA increased 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, and engagement score improved to 48%.

• Key initiatives included value creation models, AI implementation, launching NEC BluStellar, and prioritizing security and defense businesses.

• Structural and cultural reforms improved profitability, diversity, and increased female and foreign executives.

Organizational and governance transformation

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

• Streamlined organizational layers, introduced non-GAAP and cash ROIC evaluations, and promoted data-driven management.

• Emphasized strengthening talent and global group governance for the AI era.

• 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 and business opportunities, with a 30% drop in market cap for major tech service companies between Jan and Apr 2026.

• Automation and in-house development are reducing traditional system integrator opportunities.

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

• Defense and security markets are expanding, with Japan's defense-related market expected to grow 2.5x.