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Mid-term Management Policy
Fiscal 2013 Results and Fiscal 2016 Management Targets
(Billion ¥) FY2013/3฀Results FY2016/3 Targets
Net sales 3,071.6 3,200.0
Operating income 114.6 150.0
Net income 30.4 60.0
Free cash flows 42.0 100.0
ROE 4.510％
level during the formulation of “Mid-term
Management Plan 2015” about which business
domains offered the greatest opportunity to grow
and contribute by leveraging the potential of the
NEC Group, we have decided to focus
management resources on businesses that will
create more efficient and highly advanced social
infrastructure through ICT, particularly in emerging
markets. We will transform NEC into a “Social Value
Innovator,” creating internal growth by focusing on
business activities that develop solutions to key
social issues including energy management. Our
belief is that creating new value in this way will
support a society that is safe, secure, efficient and
fair for everyone.
The second policy is to “focus on Asia” while also
“promoting locally led businesses.” We plan to
maintain a strong presence in Japan, which still
accounts for about 84% of sales, but recognize the
need to create a foundation for growth so that we
can compete globally. We aim to expand our
business in emerging and developing countries in
Asia, where there is strong demand for advanced
social infrastructure, while creating a framework to
support increased sensitivity to local needs as a
means of supporting the rapid development of
locally led businesses. This stronger base of
overseas operations will be a platform to support
our global expansion over the long term.
The third policy is to “stabilize NEC’s financial
foundation.” To support global growth, we plan to
enhance cost competitiveness while reinforcing the
earnings base to increase net income and create
annual free cash flows (FCF) of at least ¥100 billion.
We are also using hybrid finance to bolster our
financial reserves and make NEC financially strong
enough to cope with changing market conditions.
Based on these policies, we have set plan targets
for the fiscal year ending March 2016 of ¥3,200
billion in net sales, ¥150 billion in operating income,
¥60 billion in net income, ¥100 billion in FCF, and
ROE of 10%. In addition, we aim to achieve an
operating income ratio of 5% and overseas sales
ratio of 25% as quickly as possible.
Transformation into a “Social Value Innovator”
•฀ Focus management resources on businesses that advance social
infrastructure through ICT
•฀฀Create new business models with the understanding that social
problems provide an opportunity for growth
Create a foundation for growth as a company able to
compete globally
•฀ Focus on emerging and developing countries, in particular in Asia
•฀ Realize increased sensitivity to local needs, increased business
speed
•฀ Enhance cost competitiveness
•฀ Create an earnings structure that produces operating income of ¥150
billion and free cash flows of ¥100 billion
•฀ Use฀hybrid฀finance฀to฀ensure฀financial฀reserve
Quickly achieve an
operating income
ratio of 5% and
an overseas sales
ratio of 25%
(1) Focus on Solutions for Society
(2) Focus on Asia, Promotion of “Locally-led” Businesses
(3) Stabilize Our Financial Foundation
08
NEC Corporation
Annual Report 2013
I
Business Report/Management Policies