NEC 2013 Annual Report Download - page 5

In fiscal 2013, the NEC Group recorded
consolidated net sales of ¥3,071.6 billion, an
increase of ¥34.8 billion, or 1.1% year on year. This
increase was mainly due to increased sales from the
IT Solutions business, the Carrier Network business
and the Social Infrastructure business, primarily
reflecting a recovery in domestic IT investment, as
well as higher demand from network-related fields
and from earthquake reconstruction and disaster
prevention measures. Sales growth was partly offset
by decreased sales from the Personal Solutions
business, primarily due to the deconsolidation of the
PC business for individual customers and lower
mobile phone sales volume. Regarding profitability,
consolidated operating income improved by ¥40.9
billion year on year, to ¥114.6 billion, mainly due to
increased sales, as well as the steady execution of
structural reforms, an improved cost-of-sales ratio
and streamlined selling, general and administrative
expenses. Consolidated net income was ¥30.4
billion, an improvement of ¥140.7 billion compared
to the net loss recorded in the previous fiscal year,
when the bottom line was impacted by a review of
deferred tax assets. This improvement was mainly
due to the higher operating income, improved
equity in earnings (losses) of affiliates, and lower
business structure improvement expenses.
Although consolidated net sales fell below our initial
target, we surpassed all of our primary initial
earnings targets. Consequently, we decided to
resume a dividend payment of ¥4 per share as
promised at the beginning of fiscal 2013.
growth through concentrated investment in these
four fields: the IT Services area in the IT Solutions
business, Carrier Network business, Social
Infrastructure business and Energy business. To this
end, the NEC Group actively implemented
measures such as business acquisitions and
forming alliances with other companies for
expanding business on a global scale.
As a result, we have transformed NEC into an
enterprise that can generate profits to enable
dividend payments even with the current level of net
sales of ¥3 trillion.
(Billion ¥)
FY2011/3 FY2012/3 FY2013/3
Results Results Initial plan Results
Net sales 3,115.4 3,036.8 3,150.0 3,071.6
Overseas sales 479.3 481.5 483.1
Overseas sales ratio 15.4% 15.9% 15.7%
Operating income 57.8 73.7 100.0 114.6
Operating income ratio 1.9% 2.4% 3.2% 3.7%
Net income (loss) 12.5 110.3 20.0 30.4
Return on equity (ROE) — — 4.5%
Fiscal 2013 Performance
Mid-term Management Plan 2015
Fiscal 2013 was the final year of our Mid-term
Growth฀Plan฀“V2012.”฀Under฀“V2012,”฀we฀targeted฀
net sales of ¥4 trillion, an operating income ratio of
5% and an overseas sales ratio of 25% for fiscal
2013 as goals necessary to executing sound
business operations. However, we were unable to
lay the groundwork for global growth, partly
because a large overseas M&A initiative fell through
in the IT field. Taking heed of the lessons learned
from this experience, we formulated “Mid-term
Management Plan 2015” in April 2013, which sets
forth our management policies and business targets
for the three-year period through fiscal 2016.
Demand for resources such as energy and food
is projected to increase in step with the world’s
growing population, as well as the increasing rate of
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NEC Corporation
Annual Report 2013
I
Business Report/Management Policies