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Management Strategy and Policy
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(As of June 19, 2025)
(1) Fundamental Management Policy
The NEC Group defines the NEC Way as a common set of values that form the basis for how the entire NEC Group conducts itself.
The NEC Way consists of the “Purpose” and “Principles” which represent why and how as a company we conduct business, and the “Code of Values” and “Code of Conduct” which embody the values and behaviors that all members of the NEC Group must demonstrate.
Purpose
The “Purpose” is a declaration based on the statement of “Orchestrating a brighter world” to contribute to a prosperous society.
“NEC creates the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential.”
Principles
The “Principles” are the basis for the NEC Group's actions and are comprised of three important positions.
The Founding Spirits of “Better Products, Better Services”
Uncompromising Integrity and Respect for Human Rights
Relentless Pursuit of Innovation
Code of Values
The “Code of Values” are the standards of the way of thinking and acting which should be embodied by each and every individual in the NEC Group.
“Look Outward. See the Future.”
“Think Simply. Display Clear Strategy.”
“Be Passionate. Follow through to the End.”
“Move Fast. Never Miss an Opportunity.”
“Encourage Openness. Stimulate the Growth of All.”
Code of Conduct
The “Code of Conduct” is the guidelines of integrity comprised of the following chapters that should be followed by each and every individual in the NEC Group.
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Basic Position
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Respect for Human Rights
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Environmental Preservation
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Business Activities with Integrity
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Management of the company’s Assets and Information
Consultation and Report on Doubts and Concerns about Compliance
To fulfill the Purpose, the NEC Group aims to create social values continuously and to maximize its corporate value by implementing its middle and long term management strategy including its “Mid-term Management Plan” based on the Principles.
Each and every individual in the NEC Group, must compare our work style and organization structures to the Code of Values and identify where we need to strengthen and improve, and must conform to this Code of Conduct and conduct ourselves with high ethical standards and integrity.
The value that customers and society expect from us is constantly changing. To remain an essential company in the eyes of society in the years to come, we must create new value by constantly keeping our finger on the pulse of what it consists of. The NEC Group combines ICT technologies with diverse knowledge and ideas in collaboration with people around the world. We realize bright, hope-filled societies and ways of life, this is our aim.
(2) Management Indicator Goals
To realize its corporate value, the NEC Group will strive as one to achieve “Purpose”, “Strategies” and “Culture” as its management policies. In order to realize Purpose, the NEC Group positions its EBITDA growth rate*1 for Strategies and its engagement score for Culture as core indicators. In addition, the NEC Group sets targets of revenue, adjusted operating profit*2, Non-GAAP operating profit*3, Non-GAAP net profit*4, EBITDA*5 and ROIC*6 as management indicators.
- *1“EBITDA growth rate” is compound annual growth rate of EBITDA from fiscal year ended March 31, 2021 to fiscal year ending March 31, 2026.
- *2"Adjusted operating profit” is measured by deducting amortization of intangible assets recognized as a result of M&A and expenses for acquisition of companies (financial advisory fees and other fees) from operating profit.
- *3"Non-GAAP operating profit” is an indicator for measuring underlying profitability. It is measured by deducting amortization of intangible assets recognized as a result of M&A, expenses for acquisition of companies (financial advisory fees and other fees), structural reform expenses, impairment losses, stock compensation and other one-time profits (losses) from operating profit (loss).
- *4"Non-GAAP net profit”, which means Non-GAAP net profit attributable to owners of the parent, is an indicator for measuring underlying profitability attributable to owners of the parent. It is measured by deducting adjustment items of profit before income taxes and corresponding amounts of tax and non-controlling interests from net profit attributable to owners of the parent.
- *5“EBITDA”: Gross profit - SG&A + Depreciation and amortization
- *6“ROIC”: (Unadjusted operating profit - Deemed corporate tax)÷(Term-end Interest-bearing debt + Term-end net assets <including non-controlling interests>)
(3) Business environment
During the fiscal year ended March 31, 2025, economic conditions saw a strong appetite for IT investment both in Japan and overseas, and there were progresses of the cloud shift of conventional IT infrastructure and the digitalization of the whole society with the use of generative AI. As social issues such as economic security as well as environmental problems become more complex, enterprises are required to contribute to the realization of a sustainable society and the role of technology is increasing.
(4) Middle and Long Term Management Strategy and Challenges to be Addressed by the NEC Group
In the IT Services Business in Japan, NEC Corporation (hereinafter, the “Company”) will aim, by positioning NEC BluStellar as its core business, to further improve profitability by optimizing prices and accelerating the shift to high profit products and services such as AI, consulting, and security. The Company will also strengthen its value delivery platform by leveraging its combined strengths in consulting and cutting-edge technologies.
The Company made NEC Networks & System Integration Corporation a wholly-owned subsidiary on March 25, 2025 to strengthen businesses with local governments and Small and Medium Enterprises (SME) throughout Japan, where demand for DX is growing. In the future, the Company will conduct a business reorganization among the Company, NEC Networks & System Integration Corporation and NEC Nexsolutions, Ltd., and realize a business structure that will enable the provision of integrated DX solutions combining IT and networks to local governments and SME nationwide in an end-to-end manner from consulting through SI (System Integration), construction and maintenance. By implementing these measures, the Company aims to extend high-value-added services to our customers, as well as maximize profit and strengthen competitiveness through improved operational efficiency.
In the overseas IT Services Business which is positioned as a growth business, the Company will primarily in the areas of Digital Government and Digital Finance strengthen its profit base and also accelerate initiatives for growth strategies and enhancing synergies by means of, among others, transferring headquarters operations to Europe. In addition, the Company aims to achieve the same level of profitability as in Japan through such profitability improvement measures as expanding offshore operations and using AI in software development.
The Company aims to be an “Employer of Choice” and is working towards the transformation of people and culture. In the fiscal year ending March 31, 2026, the final year of Mid-term Management Plan 2025, the Company aims to achieve its target employee engagement score of 50%. To this end, it will focus on two key areas that have a high impact on the engagement score: “Employee awareness of Company-wide policies and strategies” and “Evaluation, compensation, promotion and career growth.” Also, through the spread of job-based human resource management, diverse human resources will be promoted to positions where they can most demonstrate their capabilities and ambitions and play an active role. Furthermore, the Company will build a competitive compensation system that will ensure it is chosen by essential human resources through, among others, introduction and expansion of stock compensation plans, by which the Company will acquire excellent human resources and train and foster younger generations that will bear the future of the NEC Group.