20 | NEC Integrated Report 2021 | 21 | |
NEC's Business Model
Review of the Mid-term Management Plan 2020
Performance Results and
Key Management Measures
Achieve the targets for operating profit and operating profit ratio set out in the Mid-term Management Plan 2020 by repositioning NEC on a growth trajectory by optimizing our business portfolio, growing our business, and strengthening our financial foundation
FY2011 | FY2014 | FY2019 |
Made NEC Electronics Corporation, a | Divested all of NEC's stakes in NEC Mobiling, | Established dotData, Inc. in the U.S. |
semiconductor business and currently | Ltd., currently MX Mobiling Co., Ltd., a mobile | Established NEC X, Inc. in the U.S. |
Renesas Electronics Corporation, into | phone sales business | Acquired Danish company KMD |
an equity-method affiliate | FY2015 | Holding ApS |
FY2012 | Sold shares in electrode business | |
Divested all of NEC's stakes in NEC BIGLOBE, | FY2020 | |
Made the consumer PC business into | Ltd., currently BIGLOBE Inc., an internet | |
an equity-method affiliate | service provider, in March 2014 | Sold shares of Nippon Avionics Co., Ltd. |
FY2013 | FY2017 | FY2021 |
Acquired the business support system | Consolidated Japan Aviation Electronics | Decided to convert NEC Display |
business of U.S.-based Convergys | Industry, Limited | Solutions Ltd. into a joint venture |
Corporation | FY2018 | Acquired Swiss company Avaloq |
Group AG | ||
Acquired U.K. company Northgate Public | ||
Services Limited |
Background to Formulating the Mid-term Management Plan 2020
Slump in Profitability
(Fiscal 2017 operating profit ratio
of 1.6%)
Decline of Existing Businesses
Exceeding Expectations
Inability to
Fully Implement
Main Initiatives and Core Objectives of the Mid-term Management Plan 2020 | ||
1 | Reform of Profit Structure | |
Reduction of SG&A Expenses | ||
▲Career transition support measures | ||
Business Structure Reforms | ||
▲Decision to stop receiving new orders in the energy business | ||
▲Sale of electrode business | ||
▲ | ||
Joint venture for display business | ||
Production Structure Reform | structure, | |
▲ | ||
Optimization of NEC Platforms production | ||
sale of Tsukuba Research Laboratories | ||
2 | Growth Achievement | |
Safer Cities | Limited (currently NEC | |
▲Acquisition of Northgate Public Services | ||
Software Solutions UK Limited) in the United Kingdom, KMD Holding | ||
ApS in Denmark, and Avaloq Group AG in Switzerland | ||
5G | ||
▲Strategic cooperation with NTT Corporation and Rakuten Mobile, Inc. | ||
▲Launch of trial tests with the United Kingdom and Germany | ||
Digital Transformation (DX) | ||
▲Establishment of digital platforms and offerings |
Trends in Business Performance
Revenue (Billions of yen) Operating profit (Billions of yen) Operating profit ratio (%)
3,115.4 | 3,036.8 | 3,071.6 | 3,043.1 | 2,935.5 | 2,824.8 | 2,844.4 | 2,913.4 | 3,095.2 | 2,994.0 | ||||||
2,665.0 | 5.1% | ||||||||||||||
4.4% | 4.1% | 153.8 | |||||||||||||
3.7% | 3.5% | 127.6 | |||||||||||||
2.4% | 114.6 | 106.2 | 128.1 | 3.2% | |||||||||||
2.2% | |||||||||||||||
1.9% | 73.7 | 91.4 | 1.6% | 2.0% | |||||||||||
57.8 | 63.9 | 57.8 | |||||||||||||
41.8 | |||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | (FY) |
Note: Financial results were reported under Japanese Generally Accepted Accounting Principles (JGAAP) until fiscal 2015. From fiscal 2016 onward, results have been reported under
International Financial Reporting Standards (IFRS).
3 | Restructuring of | |
Execution Capabilities | ||
Strengthening of Business Development Capabilities | ||
▲Establishment of dotData and NEC X with aim of monetizing new technology | ||
▲Entry into drug discovery business | ||
Transformation of NEC's Culture | ||
▲Revision of the NEC Way | ||
▲ | ||
Revamp of the corporate officer system, one-year terms of office | ||
▲Introduction of new evaluation system that encourages innovative | ||
actions and challenges | ||
▲Hiring and appointment of diverse talent to executive and other positions |
Initiatives for "Materiality"
-Priority Management Themes from an ESG Perspective
Incorporate world-renowned Environmental, Social, and Governance (ESG) indices E: Contribute to decarbonization through business
S: Minimize the impact of serious security incidents, promote businesses that prioritize respect for human rights, transform NEC's culture, and promote inclusion and diversity
G: Achieve zero cases of involvement with serious cartels and/or bid-rigging, reinforce Board of Directors system, revise remuneration system for directors and A&SBMs, and promote initiatives for collaborating with suppliers
- For more details on ESG-related goals, achievements and progress, and degree of completion, please refer to page 11 of Sustainability Report 2021.
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NEC Corporation published this content on 10 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 November 2021 03:04:08 UTC.