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NEC Networks & System Integration Corporation (the “Company”) is a service integrator with unique strengths stemming from its ability to provide customers with a complete package of services from system integration to operation and outsourcing across a broad range of areas from office ICT systems mainly for enterprises to public network for telecommunications carriers as well as social infrastructure for government. The Company’s uniqueness also means that it can provide reliable network integration and operations technology cultivated through its telecommunications carrier business with a nationwide support system and infrastructure. In addition, it has a total solution capability not only for ICT but also for facility management and construction. Using these strengths, the Company aspires to provide services that bring greater customer satisfaction by bolstering and developing its service businesses. The Company continues to promote management innovation and management quality initiatives in an effort to ensure that it is well regarded and trusted by customers, shareholders, and other stakeholders.
Our key management strategy is to actively expand our business through measures including growth investments such as M&A using our capital strength, based on our achievements in the past few years in strengthening our business structure and improving profit margins. And we are proceeding with the management innovation activity to further strengthen our competitiveness toward the start of the second sexagenary cycle of the fiscal year ending March 2014, “Vi60th.” As a business expansion target, for the fiscal year ending March 2013, we will put net sales which declined due to the sluggish Social Infrastructure business during the last fiscal year, back on a growth path with the aim of pushing the recovery in sales \220,000 million beyond the figure achieved in the fiscal year ended March 2011.
In the medium and long term, the ICT market in which the Company operates is expected to continue to evolve as an essential platform for corporate and social activities. We also anticipate that corporate and government demand for ICT services using cloud computing will increase, given the pursuit of greater convenience and higher efficiency. As a consequence, investments in infrastructure development and network upgrading to provide these services will increase. Given these changes in customer needs and an expected significant shift of ICT-related investment into service fields, we have positioned our service businesses as strategically focused operations for medium- to long-term growth. We intend to actively consider and make investments to achieve the growth through initiatives such as expanding resources and business infrastructure using M&A. .
Given that the domestic market is maturing and competition with global players is intensifying, top managers are requesting proposals for using ICT as a tool to strengthen management. In response to this need for management innovation, the Company, having the actual proof and results of its own practice of office innovation “EmpoweredOffice”, is leveraging its originality to make proposals and to strengthen consulting from a customers’ perspective. Further, in the service area, as a result of the expansion and upgrading of the business platform and resources through the investments in growth mentioned above, we are developing comprehensive services to improve customers’ business processes, aiming to support their management with such services as cloud computing and BPO. At the same time, we are also strengthening cost competitiveness. As a measure to expand our comprehensive services, and to provide innovative management solutions in which ICT is combined with human services, such as the shared services operation of non-core work, we agreed to collaborate with MOSHI MOSHI HOTLINE, Inc. in April 2012.
Telecommunications carriers are currently proceeding with the strengthening of their networks due to the expansion of data network traffic as a result of the diffusion of smartphones and we are expanding our business in response. Since the market is becoming increasingly open and globalized, the ability to provide comprehensive services ranging from systems integration to maintenance and operation is becoming more important for the networks of telecommunication carriers in a multi-vendor environment. We will provide services for building, operating, and maintaining the service business infrastructure of telecommunications carriers, etc. and aim to create new services jointly with them, taking advantage of our system integration abilities in the carrier grade and nationwide maintenance responsiveness cultivated through extensive experience. We will also apply these reliable technical and support abilities to the large-scale systems of other service providers and businesses, such as in data centers and cloud computing infrastructure.
The Social Infrastructures business, which provides infrastructure construction, maintenance and operations services for central and local governments and broadcasters and installs base stations for telecommunications carriers, rather than being a future growth business, must become a business that can steadily respond to changes in demand as a stable business foundation. Currently in this area, in addition to the expansion of mobile base stations, we expect to see an expansion of the investment in infrastructure for the safety and security of citizens including the expansion and digitalization of fire-fighting and disaster prevention systems. In particular, the reconstruction of new towns and cities in areas damaged by the Great East Japan Earthquake is a matter of urgency. The Company, leveraging the strength of the NEC Group, will respond appropriately to this type of demand.
In management innovation, we have achieved positive results aimed at bolstered earnings capability through innovation activities that have management and employees onsite working together in a cohesive manner. Currently, we are increasing our corporate value by proceeding with our “Vi60th” management innovation activities to strengthen our management quality and cost competitiveness, aiming to enhance growth and profits over the medium to long terms, rather than focusing on short-term profitability improvement.
We place top priority on compliance and always ensure that our conduct adheres to corporate ethics and the spirit of legal compliance. In particular, we strive to build systems that enable the early detection of problems and make compliance issues unlikely to occur, by revising work processes and standardizing simpler and more transparent procedures. We will continue to reinforce our compliance-oriented approach to management going forward.
