NEC 2013 Annual Report Download - page 15

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Conclusion
NEC has more than a century of experience and
expertise. We formulated “Mid-term Management
Plan 2015” based on the idea that this three-year
period would help construct the base for the
company’s next 100 years of growth. Our goal in
these three years is to transform NEC into a “Social
Value Innovator” capable of contributing to society
over the next century. This will entail cultivating a
strong internal culture of value creation for the
benefit of society, which in turn will help NEC to
grow and become more profitable. We ask our
shareholders for their continued understanding and
support.
(3) Stabilize the Financial Foundation
If we are to implement successfully the growth
strategies outlined above based on NEC focusing
on Solutions for Society alongside global
development, it is essential that we reinforce our
cost competitiveness further. We have striven to
reduce the cost base for every NEC product and
service on a continuous basis. In the year under
review, we also undertook structural reforms aimed
at improving earnings. Going forward, we plan to
broaden the scope of efforts to ensure success in a
fiercely competitive global marketplace. We aim to
reinforce procurement capabilities and optimize our
production by upgrading our global supply chain
management (SCM) set-up. We will also make
greater use of offshore resources, especially in
China and India, rationalize shared costs across the
NEC Group and seek to enhance project
management and quality management. Overall, we
plan to reduce costs by ¥30 billion through this
program by the fiscal year ending March 2016.
After the significant net loss that NEC recorded
last year, one of the most critical issues we face is
to strengthen our financial base. This basically
means boosting net income and increasing cash
flow. In terms of the latter, we plan to increase
earnings steadily. We are also focused on
compressing the number of days in the cash
conversion cycle (CCC) so that we can increase the
efficiency of working capital across the entire NEC
Group. The aim is to construct a stable earnings
base that generates at least ¥100 billion in annual
free cash flows. In May 2013, we issued ¥130 billion
in hybrid finance to bolster our financial reserves
against unexpected developments and to provide
more funds for investing in target domains such as
SDN and smart energy.
14
NEC Corporation
Annual Report 2013
I
Business Report/Management Policies