NEC 2011 Annual Report Download - page 16

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1,000.0
800.0
933.8 866.3
804.2
600.0
400.0
2009 2010 2011
200.0
0
60.0
40.0
2009 2010 2011
20.0
0
51.8 53.2
21.4
5.6%
6.1%
2.7%
12.0
9.0
6.0
2010 2011
3.0
0
6.6
7.6
0.8% 0.9%
8.0
6.0
4.0
2010 2011
2.0
0
4.4
3.6
REVIEW OF OPERATIONS
FISCAL 2011 PERFORMANCE AND
MAIN ACCOMPLISHMENTS
Business segment sales declined 7.2% year on year to
¥804.2 billion, despite steady growth in the “Cloud Service”
business and outsourcing services. This decrease was
mainly due to a delayed recovery in domestic IT investment
and fewer large projects than in the previous year.
Operating income decreased ¥31.8 billion year on year
to ¥21.4 billion. This decrease mainly reflected the drop in
sales, worsening profitability from stiffer price competition,
and larger loss from loss-making projects.
In fiscal 2011, NEC worked to expand its key Cloud
Service business. As a result, NEC began providing a cloud
service platform to Sumitomo Mitsui Banking Corporation,
in addition to offering a core operating system as a cloud
service to 7 cities and towns in Nara Prefecture and 10
cities, towns, and villages in Yamanashi Prefecture.
Furthermore, NEC strove to upgrade and expand its
Software as a Service (SaaS) menu for specific business
sectors, drawing on its experience in systems implementation
for various customers. Examples included an electronic
medical record service for small hospitals, and a
comprehensive cloud service for hotels, which includes a
hotel guest reservation system, digital signage system, and
an IP telephony system. Another example was a library
administration and operations system for universities.
In the public safety business, NEC delivered an
automated fingerprint identification system for use in visa
information systems to the Greek Ministry of Foreign
Affairs. NEC also delivered core information systems and
digital signage systems to the new International Terminal
Building at Tokyo International Airport (Haneda). In these
and other ways, NEC made progress in new business
domains where future growth is expected.
FOR FURTHER GROWTH
The medium-term market outlook indicates further
advancement in cloud computing and expanding demand
for IT in emerging countries. Based on this outlook, NEC is
focused on expanding its “Cloud Service” business and
global business.
IT SERVICES BUSINESS
SALES
(Billion ¥)
OPERATING INCOME,
OPERATING INCOME RATIO
(Billion ¥)
NEC supplies government agencies and private-sector companies with a
range of IT services covering system implementation, maintenance and
support, and outsourcing, as well as cloud services. Using its extensive
experience in building highly reliable systems backed by state-of-the-art
IT and network technologies, NEC aims to realize an information society
friendly to humans and the earth.
Takaaki Shimizu
Senior Vice President
R&D EXPENSES,
R&D EXPENSES RATIO
(Billion ¥)
CAPITAL EXPENDITURES
(Billion ¥)
Operating income
Operating income ratio
R&D expenses
R&D expenses ratio
15 NEC Corporation
Annual Report 2011