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Management Policy

NEC Networks & System Integration Corporation

Basic Corporate Management Policy

The NEC Networks & System Integration Corporation Group ("NESIC Group") is a communication services orchestrator that provides systems and services to various customers from corporations and telecom carriers to government institutions, local municipalities and social infrastructure operators in the business domain of communication. From its beginnings constructing communications infrastructure, the NESIC Group has built a unique position as a "system integrator with construction capabilities" through the expansion of its operations into corporate network SI, workstyle innovation and other solutions and services adapted to the changing times. The NESIC Group maintains sales personnel, a wide range of engineers and various service locations throughout Japan, giving us the distinct abilities to support customer infrastructure quickly with advantaged technologies, and to provide services that closely align with customers in the field. We leverage these characteristics to integrate a range of products, services and networks and offer added value by providing them to customers in a way that makes them easy to use. We provide the advanced technological capabilities and reliability demanded of the NEC Group not only through NEC products but as a multi-vendor service tailored to the customer's needs. To enhance these added value aspects of NESIC, we co-create with various partners in fields including cutting-edge and venture technologies, perfect the use of a range of products and services internally, and after demonstrating their effectiveness, stay ahead of the times by quickly providing them as new user-friendly services to customers. We strive to reinforce our growth and earnings potential by accelerating these innovations.

In January 2017, Group created the NEC Networks & System Integration Corporation Group Statement, which states the shared values, DNA, and vision cultivated by the Group. It says, "The NEC Networks & System Integration Corporation Group enables communities throughout the world to enjoy a safe, secure and plentiful tomorrow by continually facilitating more welcoming and convenient communications, and supporting a connected society, from the floor of the ocean to the far reaches of outer space, with proven technologies and reliable services cultivated over many years."

Under this statement, the Company, as a communication services orchestrator that harnesses its strengths to produce new value chains with partners, aims to achieve "an inclusive and sustainable society created through communications." An inclusive and sustainable society is a society where all people around the world can access sufficient information and receive education and medical care without disparity using communication technologies. It is also a peaceful society where free communication removes all barriers in the world and it is a society where all issues are resolved by wisdom shared through communication. The Company has identified materialities, in the form of six issues, as important initiatives for contributing to its vision of society and achieving its own sustainable growth.

The Company has identified three priority initiatives to provide value to society: creating work environments in which everyone can take the initiative, developing pleasant and plentiful communities with cutting-edge technologies, and providing robust services that underpin safety and security in evolving society. The Company will pursue those initiatives in the years to 2030 by utilizing communication technologies and cooperating with a wide range of partners.

To continue to create value for society, the Company is working to strengthen its management base by instituting three particularly critical initiatives for its own growth: sound and highly transparent management, strong innovation capabilities to create new value, and a culture where employees can take initiative.

In addition, to realize a sustainable society amid the increasingly serious issue of climate change, we will try to reduce environmental impact by ourselves as well as in coordination with our partners, while striving to provide services that help solve the environmental issues faced by customers.

The Group will seek to enhance corporate value as a partner indispensable to customers and as a company that provides more satisfying services, with a competitive edge, earnings capability and presence.

Management Targets

(Targets as of May 10, 2022)

Our medium-term management goals for FY2025/3, the final year of the new plan, will be to further improve upon the business performance enhanced in the previous medium-term management plan and achieve the following financial targets.

We also believe that promoting respective initiatives related to the environment (E), society (S) and governance (G) will lead to sustainable improvements our corporate value, and have established new non-financial targets with this in mind. Going forward, we will endeavor to improve the corporate value of the NESIC Group and expand the provision of social value.

Medium- to Long-Term Management Strategies and Issues the Company Faces

Currently, the world faces various challenges in achieving a sustainable society, including responses to outbreaks of infectious disease, the issue of climate change associated with global warming, food issues due to population increases, and in Japan labor shortages due to the declining birthrate and aging population and natural disasters. As a result, the structure of society and people's lives have also undergone major transformations. In addition, the world is becoming borderless. Many barriers, including nationalities and industries, among other frameworks, are being removed. In this environment, societies and companies face the need to change business models, processes, labor productivity and ways of working to increase management speed and international competitiveness.
Meanwhile, on the technology front, major waves of transformation are arriving including the advance of digital technologies such as CAMBRIC and increasingly fast and advanced network technologies typified by 5G. More recently in response to the spread of COVID-19 infections, these waves of transformation have accelerated toward new lifestyles (the new normal).
In response to these trends, NESIC has designated the digital domain and the next-generation network domain including 5G as areas of focus in the medium and long term. Additionally, during the period of the previous Medium-term Management Plan (FY2020/3 to FY2022/3), we worked to promote new-normal workstyles utilizing digital technologies and demonstrate the utilization of cutting-edge technologies through co-creation and practical implementation with customers, while also starting to offer some of these achievements as advanced services under the Symphonict brand. In these ways we have made steady progress in preparing for the coming age of "Digital × 5G." Moving forward, we will promote the implementation of these initiatives in society, and looking beyond that will accelerate growth-oriented efforts on the theme of DX × Beyond 5G (Next-generation Networks).

In May 2022, NESIC announced its new Medium-term Management Plan (FY2023/3 to FY2025/3). Through the plan, we will strive to create and enhance customer value by turning the strengths in know-how and expertise obtained through experience in our self-implementation and on-site knowledge NESIC has refined to date into consulting based on expertise and site-specific consulting, and by combining that with our strengths in the implementation and operation phases that have been our business domain to date, namely advanced technological capabilities, reliability and nationwide coverage.
Through this approach, we will evolve our relationships with customers into strategic partners creating new social value together, and by connecting those activities to future business, we will provide further customer value and strengthen our consulting abilities based on expertise. This represents an evolution of NESIC's business model into a recurring model. We will also pursue the development of new customers using consulting as a starting point, and by increasingly accumulating experience and data, we will further enhance our ability to create social and customer value, aiming to establish a cyclical growth model.

In promoting these recurring and cyclical growth models, we will tackle the following three points as priority themes.
①Accelerating Original Value Creation
We will work to enhance practical and site-specific consulting functions as a starting point while strengthening and enhancing a menu of DX services tailored to customer issues and common platform services. We will also promote optimization both in terms of speed and cost as well as providing optimal solutions by working together with customers. In addition, through these activities we will accelerate innovation by co-creation and self-implementation with customers and partners, building a recurring model that leads to new services provided one step ahead of the competition.
②Advancing Solution Capabilities
By combining our site-specific capabilities and expertise accumulated for a wide range of customers from corporations and telecom carriers to government institutions, local municipalities and social infrastructure operators with the ability to build next-generation network infrastructure and capabilities in the creation and provision of digital services, we aim to provide sophisticated services that help solve customer management issues as well as social issues such as climate change action and create sustainable social value.
③Evolve into DX-Native Company
By thoroughly implementing and promoting the utilization of digital technologies and next-generation networks in business activities, we will strive to improve quality, speed, productivity and earning capability, establish these qualities as a reference model, and aim to provide those benefits to customers. At the same time, we will focus on cultivating the human resources responsible for providing these services.

As the framework for executing these strategies, in April 2022 NESIC reorganized into three business domains, namely DX Solutions, Network Solutions and Environmental & Social Solutions.
In the field of DX Solutions, we will expand the recurring business as a strategic partner with customers through advanced site-specific ICT operational services and unique multi-cloud services that utilize our expertise thorough self-implementation.
In the field of Network Solutions, based on the trust we have built through our businesses focused on the development of conventional infrastructure in the telecom carrier business, we leverage our DX expertise to expand the value provided to the operational service and DX service domains. We will also utilize advanced infrastructure development technologies covering everything from base stations to core networks and expertise in DX services in an effort to expand services aimed at solving social issues.
In the field of Environmental & Social Solutions, we will focus on safe, secure and eco-friendly smart urban development leading to regional revitalization by utilizing DX services that leverage a customer base spanning a broad swath of society and the public sphere and business expertise steeped in knowledge of the various services provided. In addition, by implementing digital technologies for the service infrastructure that supports these lifelines, we will work to enhance this infrastructure into something of higher quality and efficiency.
In terms of earnings capability, by using digital technologies and next-generation networks, we will accelerate the long-pursued streamlining of business processes, and we will also target further improvements by enhancing the value proposition of our business activities into solution-oriented services.

NESIC regards human resources as its greatest management resource. We are trying to evolve into a DX-native company and make further improvements to our organizational culture as an attractive company as part of efforts to further enhance employee engagement. To develop a workplace in which each employee is vibrant and positive, we tackle inclusion and diversity, promote health and productivity management and work to maintain and improve a fulfilling workplace environment. In doing so, we support improved wellbeing for employees in physical, mental and social terms, and achieve sound management while contributing to the development of an enriched society.

Reinforcing Compliance and Internal Control

We believe that ensuring compliance is fundamental to all corporate activities and that compliance-oriented management holds the key to our sustainable business activities and business development. The Group, comprised of the Company and its consolidated subsidiaries, will strive as a whole to participate thoroughly in corporate activities based on corporate ethics and a law-abiding spirit, with priority placed on compliance.