Digital Platform Strategy

Hiroshi Kodama, Executive Vice President

1 © NEC Corporation 2020 World Values

Politics Life Society Security International cooperation Earth Different personalities Integrating social changes Safety and security and competition for Environment and resource all living together and technology supported bytransparency leadership strategies Great reset

Change to a society with Personal Change to a new life style Societal more focus on Changes for safety and security Changes sustainability

Digital connection which transcends physical boundaries Digital shift in various settings Increase in 49% increase in internet traffic Lifestyle Business style digital More than 300 million consumption Workstyle participants in online conferences

5 themes aimed at achieving DX for change

Remote Online Touchless Automation

2 © NEC Corporation 2020 World Pursuing with Our Digital Platform

We're developing a digital platform by connecting data of all kinds in order to build a data-driven super-city with a safe, secure, fair and efficient society

Provided Value Logistics Public

Expand Medical Production Technology & Services Communication Retail

Blockchain Airport Transport AI Social Evolution Security Data-driven Achieving overall societal safety, by Digital security, fairness and efficiency super-city (Use and application of data and Digital ethics)

layers Cloud Expand

City OS connecting Economic Sectors Biometrics Identification people, goods, enterprises and towns

(improve productivity, reform of working style, Well-Being) with technological partners technological with

Smart City expand operation operation expand

Digital ID

collaborating Market Expand operation areas by collaborating with industry partners

by Expansion

3 © NEC Corporation 2020 Key Strengths of Our Digital Platform

Smart City (City OS:FIWARE) Digital ID / AI Network / Edge

Implementation World's No. 1※1 in face/ Smart Connectivity in Japan:11 cities fingerprint/iris recognition

FIWARE Foundation Implemented over 1,000 Public Safety platinum member systems worldwide

Data connection and Decentralized control/ Advanced Analytics PF utilization platform Edge AI

Cloud

Managed services Multi-Cloud Hybrid (Leading position※2） (Top Class Industry Player in Japan) (Enterprise - Public - Government)

Security

※1:Won the 1st Place five times in the USA National Institute of Standards and Technology contest (Face recognition) ※2:IDC MarketScape: Japan Managed Cloud Services 2018 / Vendor Assessment Source IDC Japan February 2019

4 © NEC Corporation 2020 FIWARE

NEC leads board, technological development/operation, standardization, market application, globalization Registered as a platinum member of the FIWARE Foundation in February 2017 for the first time among Japanese companies Expand and Spread Worldwide

Cases of Japan's Smart City Initiative

FIWARE Participant※1 Okinawa  993 enterprises Utsunomiya  18 business hubs (iHub) Toyama Kakogawa Tokamachi Shinci Town  2 accelerator programs Fukuoka Osaka Kumagaya Tsukuba Hiroshima Regions  10 FIWARE Lab nodes Okazaki Kashiwa implementing Toyosu Area (Europe, Africa, India, Mexico, Brazil) Aso FIWARE Niihama ※2 Nara FIWARE  350+ FIWARE Foundation members Kawasaki Utilization ※3 Takamatsu Regional  30 countries, 140 cities Hamamatsu co-creation activities ※1: NEC independent survey based on FIWARE website http://map.fiware.org/ ※2：https://www.fiware.org/foundation/members/ ※3：http://oascities.org/list-of-cities/

5 © NEC Corporation 2020 NEC Digital Platform Strategies

Formulation of Digital Consultations predicting a future where

Transformation strategy society has a vastly different New Normal

upstream to offer to upstream One from stop ③ Enhancing the DX Strategy Upstream Approach/Structure Innovation Creativity Linking technology from value provided to DX customers / Achieve DX with a sense of speed ② Establishment of DX offerings Customer Business Contact Reform Reform

ing One platform linking the world / Laboratory technology

Human Resources s & Platform ① NEC Digital Platform

6 © NEC Corporation 2020 From Process to Deliver Value and Organizational Functions 2019 IR Day CustomerCustomer Customer Customer Customer … Customer Customer

Provide value to customers • Labor saving お客様への価値提供 Labor- in order Delivery Cooperation with saving placement existing systems store • Enhance store Offering loyalty DX Offering Deliver value Consulting, Offering Consulting • Automatic to markets order • Entry and placement Design thinking method, Co-creation program exit • Demand • Payment Hospitality forecast Value creation Digital Hub: Digital Capability • Defect etc. forecast Value chain etc.

Biometric & Products, Services image NEC Advanced analysisDigital Enable use of Common platform Integrated Analytics Platform Platform technologies API platform Cloud Heterogeneous Security Face recognition mixture learning engine H/W Engine engine Engineering (System Platform BU)

Heterogeneous Research into underlying Face recognition mixture learning technology

Technologies technologies technology Labs

7 © NEC Corporation 2020 Targets of Digital Strategy and Initiatives for the Next Mid-Term Plan

Digital Digital Shift(Previous IR DAY) Change Lever Frontier

Strategic Targets Level of achievement Changes in FY20 (2018→2020) (As of August 2020) Next Mid-term Management Plan To be Adapting to Under achieved COVID-19 and Ratio of Digital 30% Projects* the New Normal ％ 27% 12  Ensuring safety aimed at the resumption of In business (infection control initiatives) DX growth Digital progress strategy Track Records Accumulative 3,000  Work style & business (AI, biometric 2,200 style transformation recognition) Accumulative 1,700  Process reform assuming remote work To be Ensuring information achieved  Digital transparency and 3,000 reliability Human 2,800 Resources 1,600

*: Classified domestic SI and service businesses into SoE/Bimodal/SoR by applying IDC’s definition of the 3rd platform. Of them, SoE/Bimodal projects are regarded as digital projects

8 © NEC Corporation 2020 [Reference] Planning Mid-term Growth Strategy based on Digital Platform

* IT services: SBU involved in SI and services ● Domestic IT services: Aim for No.1 operating margin (FY2025)

• Strategy consultants, business analysts Global development Upstream SW • Human resources • Future creation design optimization resources and assets shift • Data scientist, data engineering • Domestic IT resources Overall Initiatives High Improved added value Platform Model efficiency SI Model Expand Digital platform SW engineering and mobilization One Strengths Edge AI Ecosystem Integrated Remote Architecture (R&D) management platform (SW factory) projects Digital ID Smart City Business model Connectivity Data connectivity and Alliances utilization platform Automation Modernization Security AI optimization Players (position)

Cloud SaaS/PaaS Secure Multi-cloud connectivity Portfolio managed cloud x business Edge DC (local 5G)

* Currently under consideration. Information will be disclosed once decided

9 © NEC Corporation 2020 ①－１． NEC Digital Platform

Enhance worldwide support, data function, network connectivity etc. Line-up of solutions responding to hybrid IT and edge computing Citizen ID Individual AI AI CS NW 5G authentication Supply and Equipment diagnosing Automatic when creating vulnerabilities Customer demand maintenance operation Value an account ,anagement Application

Biometrics Identification AI Security & Imaging Platform Data

Server Storage NEC Cloud IaaS AWS Azure Hybrid IT Infrastructure Quantum Computer Aurora Maintenance Network NEC Smart Connectivity Wi-Fi LPWA 5G Service

Edge Edge Computing AI Edge MEC IoT Specialized terminals (POS/ATMs etc.)

10 © NEC Corporation 2020 ①－２． Cloud Strategy

Offer an optimal cloud environment to support our customers‘ digital shifts with mega-cloud connections and closed multi-cloud connections of our data centers

Domain Construction Hotel SaaS External Links Strategy Point Knowledge Cloud Offering SFA Management SaaS Automation General DX Bio-Idiom Advanced Digital Digital Continuous increase Services Analytics Workplace ID • Digital and domain pillars Functions with a focus on customer needs • Complement for Data Quality & expanding strengths AI & Analysis Integration RPA aPaaS iPaaS Lifestyle • Collaborative interface PaaS Management Management Managed Security Services Managed Cloud Services • Government（ISMAP） Private Cloud Public Cloud • Public IaaS Enterprise Dedicated Competitor’s • Managed services IaaS Hosted Private Cloud NEC Private Cloud Cloud IaaS Cloud On-Premises Public IaaS Government Cloud (ISMAP compatible) On-premises Core DC NECCI Direct Multi-cloud Platform Local Closed Internet • Edge DC (Local 5G) City-type Platform Connect Peering DC Edge Cloud 5G Connection • Direct connect Regional DC • DC collaboration Low PUE

11 © NEC Corporation 2020 ①－３． NEC Digital Platform - Supporting Products & Services

Support NEC’s digital platform through smart orchestration under hybrid IT environment, embedding progressive technologies and digitalization of maintenance services  Smart Orchestration Hybrid IT Platform (Hybrid IT+ Edge)  Enabling integrated operation and management under more expanded and complicated hybrid IT environments by combining cloud-on-premises-edges PC Server  Decentralization/Upgrading of data Mainframe Storage analysis utilization through DX

Facial POS ATM … (Edge AI/Vector/Quantum) Middleware recognition  Offering edge devices with AI engine embedded such as video and system biometric recognition Advanced Data Analysis Maintenance Services Technology  Applying combination optimization by simulated annealing machines (vector technology) and developing to quantum computers (quantum devices)  Digitalization of Maintenance Services Increased speed and efficiency through AI utilization Quantum Computer SX-Aurora  TSUBASA in detecting handicap levels and operator assignments Smart glasses  Expand maintenance range through Digitalization of maintenance services

12 © NEC Corporation 2020 [Reference] Connected Platform (Device – Edge - Cloud)

Device (NEC AI Accelerator) - Intelligent edge - Cloud Implement the high-speed, labor-saving, and high security with one architecture

Video Facial Facial recognition Generation of Authentication Engine and extraction features Verification Video Image Feature Data Facial (Large) (Medium) (Small) Database

Managed Video Dashboard Cloud Increased Managed service Cloud bandwidth Secure storage

Engines such as Security Feature face recognition Apps Intelligent quantity Reduced load Edge Reduced processing bandwidth

Feature Built-in NEC AI quantity Reduced load Device Reduced Accelerator bandwidth

13 © NEC Corporation 2020 ② DX Offering Structure (Sample) ※Announced on July 7 ●Plan to expand further Value provided Purpose DX Offering Themes by DX (Solutions) of DX (Customer issues)

Overall Formulation of Strategy Formulation of DX Offering Consulting on formulation of DX strategy/vision DX strategy DX strategy

Future Asset utilization Transformati Mobility service that Innovation Creation of new markets Creation supports the safe and Clever Consulting on of secure movement of Creation and business opportunities Design customers' people (Mobility) shopping Realization of business experience marketing with models an that understanding Creation of hospitality Creation of enhanced Transportation services of customer New digital links and Customer Transformation of customer new customer pleases behavior customer (Product supporting experiences in contact reform experiences experiences the safe and consumers (Fan Marketing) financial services (Digital customer experience Innovation) Customer Engagement) comfortable Business movement of Touchless easy people (Transport) Reforming Improvement of new customer Digital Automation of workplace and Business experiences the supply chain enhancement of assistance transformation of operations through financial services productivity through Realization Supply chain (Smart for working (Business Process Automation of AI/RPA IoT transformation Hospitality) of smart through coordination people Transformation) Business operations factories among companies/ reform Realization of a Work style reform/ Digital workplace secure, Enhancement of safe and Trusted responses to address new work styles efficient workplace increasingly complex (Process and secure Risks and regulations Innovation) retail through utilization of (Logistics) digital technology Creation of digital trust Safety & security environment Risk Tech

DX human resources DX human resource development (DET)* Human development Common resources/ VCI Offering Optimization/ Data utilization infrastructure Strengthening of modernization (Value Chain Innovation) IT infrastructure of IT systems infrastructure

Common Connected Intelligent Smart Smart Digital Manufacturing Logistics Retail CX VenueCX Finance ※ Some of the offerings provided ＆ Mobility

14 © NEC Corporation 2020 ③ Maximizing Upstream Capabilities Strengthen upstream human resources in NEC Group ・Enhance DX lead consulting resources with upstream DX strategy approach ・Develop DX offerings with design-oriented approach and enhance business incubation ・Strategically leverage ABeam’s 6,000 professional consultants for DX businesses

Consulting ~ overall design ~ Technology design ~ implementation determination of area of digitalization ~ operation Strategic consultants Designers Data scientists Technologists Engineers (organizers) DX Business Process Leverage ABeam’s team of 6,000 consultants and Strengths in each strategic area (Strategy, Industry, Process, Technology) DX Profes- sionals Abundant NEC Group human resources support end-to-end execution Approx. and implementation 23,000 about 20,000 SEs, about 3,000 DX professionals (expected to Back officers increase to about 5,000 by the end of FY2022) Approx. 2,600 Talent Develop-  Strategic Consulting  Future  Data Scientist ment  Business Analyst Creation Design  Data Engineer (NEC)

Integrate disaster prevention data with data connectivity, supporting decision making trough comprehensive situation analysis Support real-time situational recognition and judgement by displaying various information on the shared screen

Road Traffic Road River Water Rainfall Distribution Actual Sales Regulations Level Screen Time Series Display Wide collaboration Takamatsu with neighboring local governments Area Disaster Prevention Ayagawa Data connection and utilization platform by sharing use of Kannonji IoT platform Road Weather River Water Levels Tide Level

16 © NEC Corporation 2020 Cross Sector Services ～Tourism & Transportation～ (Toyama / Takamatsu) Realize tourism and transportation services across sectors（Toyama）, Rolling out in other areas with De facto standard (Takamatsu） Experiment of reusability in another city – reusability of application functions with cross sector services which are realized through a collaboration with different IT systems including private sectors Experiment Suggest recommendations Experiment and navigate to destinations in Toyama etc. in Takamatsu

Reuse application functions Local MaaS Services Local MaaS Services

Data connection & Data connection & utilization platform utilization platform Jorudan Toyama GURUNAVI Public Jorudan GURUNAVI Cyclocity Transit Planner Cyclocity Transit Planner Light Rail Web Service Transportation Web Service Biz Biz

17 © NEC Corporation 2020 Example of Advanced Initiatives in MIC Trial Projects (Maebashi City 5G x Automated Driving Bus) Testing remote control and road-vehicle connection necessary for implementation of automatic driving by utilizing local 5G and carrier 5G

Verifying the mechanisms required for self-driving by utilizing 5G‘s features contributes to improvements of efficiency and automation of remote operators

Gunma University CRANTS Test Road Demonstration Test on Public Road ◆ Demonstration of specific Demonstration of self-driving buses with applications passengers from the general public on Remote city roads (normal commercial bus service routes) Local 5G Control room control Carrier 5G Maebashi City Higher speed • Demonstration test of Set 2022 and larger self-driving buses in general Target for capacity Chuo-Maebashi passenger automobile carrier Station Implemen- Test road business tation Road-vehicle • Confirmation and evaluation Maebashi Station of social acceptance required Carrier 5G Local 5G / communicati for commercialization Carrier 5G on Shopping Center collaborative Larger capacity and * Coordination with demonstration demonstration lower latency tests in other regions (Numazu)

18 © NEC Corporation 2020 Hawaii: Initiative Aiming for Restarting Tourism Announced on July 17 with Safety and Security To establish a structure enabling to secure safe visits to Hawaii in order to restore Hawaii's tourism Currently implementing infection control solutions at 5 Hawaian airports

 Implemented phase 1 thermal systems. All infection control solution functions are to be in-service by the end of December  Utilizes precise body surface temperature detection solutions  Connecting of facial authentication and thermal camera ※Patented technology  Maintains precision with high volume of transactions  Initial implementation costs are approx. USD 37.5million in total including installation costs and maintenance fees for 10 years etc. ● Image of body surface temperature detection

19 © NEC Corporation 2020 NEC HQ Internal System Demonstration: July 13 Announcement Initiative for a New Work Style Initiated a digital office project to create the new work style in the New Normal era with DX

Walk-through Gateless Smart Stores Facial & Iris Facial authentication + facial authentication gates (Grab & Go, no cashier) authentication Door/Locker/Copier/Vending Thermal multiple Body surface temperature (Multimodal) machines + face mask detection simultaneous detection ※Available from March 2021

Prevent the Three C's - Social Distance VR - Integrating Work Style Visibility - Health Management AI risk visualization & tracing Real-life and Online (Productivity, Engagement, Well-Being)

Conducted PoC for multimodal biometrics settlement system: Facial Labor-saving store limited to NEC Group employees under operation Iris on the 20th floor, Mita Kokusai Building Realized secure & touchless settlement for customer with mask kept on by combination of World’s No.1 facial and iris recognition systems

Start Preprocessing Authentication Result

Facial features Facial image Extract▶Verify OK

Iris camera automatic Multimodal Approved adjustment biometrics Iris authentication NG Extract image Face ・Eye position (Adaptable to Touchless various heights) Iris features ・Focus Not approved Accepting Extract▶Verify masked face ・Brightness Authentication completed in two seconds

21 © NEC Corporation 2020 Karuizawa 72 Golf Tournament: Organizing New Event August 14-16 Event management with optimal infection control and security using NEC’s facial recognition technology

Entry/Exit management and body surface temperature detection used for infection control

 Infection control optimized by staggering the arrival times of athletes, caddies, and other related persons and using body surface temperature checks  Facial recognition used at venue staff & media entrance for uncomplicated management of name and affiliation management and even group arrivals  Face mask compatible facial recognition allows for smoother registration operations than ever before

ESG Value Creation Achieving  Solving Societal Problems Data-driven Societal (Life / Social / Security / Politics / Earth) Development Smart-city  Achieving Well-Being supported by industrial and technological revolutions

Solution to Business Agenda Customer  Provision of End-to-end offering Trans-  Huge improvement of efficiency and formation creating innovation

Profitability Improvement in Growth Business NEC  Operating concept (NEC Way) embodied Enhancement / Growth  Expand platform business with NEC Group’s own Utilization of DX and platform Digital Platform