Huawei has released its latest annual report which showed record revenue and net profit for 2014 with global financial performance up strongly across all business areas.
Overall Huawei global revenue reached CNY288.2 billion (USD46.5 billion), an increase of 20.6% from the previous year, with group net profit reaching CNY27.9 billion (USD4.5 billion), up 32.7% year on year. The annual report is audited by KPMG.
”Our strong revenue growth in 2014 can be attributed to a continuous focus on our pipe strategy, while profit increase stems from streamlined management and improvements in overall efficiency,” said Ken Hu, Deputy Chairman of the Board and Rotating CEO. “With heavy investment in innovations in areas such as cloud computing, big data, 5G, SDN and NFV, we believe we are well positioned to capture the tremendous business opportunities in this digital transformation era.”
All three of Huawei’s core business groups performed strongly in 2014. The company’s Carrier Business Group saw global revenue increase by 16.4% to CNY192.1 billion (USD31 billion), with a strong contribution from mobile broadband network rollouts around the world. Huawei’s Enterprise Business Group saw revenue increase by 27.3% to CNY19.4 billion (USD3 billion), with strong growth in network and IT areas including cloud data center solutions and agile networks. Thanks to growing consumer demand for smartphones and particularly strong growth in emerging markets, Huawei’s Consumer Business Group also realized revenue increases of 32.6% to CNY75.1 billion (USD12 billion).
Investments in Innovation
Worldwide Huawei continues to invest heavily in innovation. The Annual Report reveals that in 2014, Huawei invested CNY40.8 billion (USD6.6 billion) into research and development (R&D), representing 14.2% of 2014 revenue and a significant increase of 29.4% from 2013. Huawei has invested more than CNY190 billion (USD30.7 billion) in R&D over the past decade.
Meng Wanzhou, Huawei CFO, remarked, "In 2014, Huawei maintained effective growth and achieved steady financial performance. Our cash flow, revenue, and profit all grew over the previous year. The net cash amounted to CNY77.9 billion (USD12.6 billion). Moreover, our debt and financing structures have continuously improved. Huawei's short-term and long-term borrowings totaled CNY28.1 billion (USD4.5 billion) as of December 31, 2014, provided primarily by overseas financial institutions at market rates."
Hu added, “As 2015 unfolds, ICT technologies—notably broadband, cloud computing, Big Data, and the Internet of Things (IoT)—are becoming the engines that drive transformations in many industries. Huawei will continue focusing on pipe strategy to create value for our customers. Through the dedication of our employees, Huawei strives to become a strategic partner for carriers in their future transformation, a leader in providing enterprise ICT infrastructure, and a top smart device brand preferred and trusted by consumers.”
Hu continued, “Together with our customers and partners, we are committed to building a Better Connected World with our innovative ICT products, solutions and services, thus creating value for social progress.”
Middle East Perspective
The Middle East is a significant region for Huawei as both a growth driver and a region where Huawei contributes to building a better connected world. Earlier this year market intelligence firm IDC predicted that spending on information and communication technologies (ICT) in the Middle East and Africa region would cross the $270 billion mark in 2015—making it the second-fastest growing geography worldwide.
“Today the Middle East remains one of the most rapid growth markets for Huawei globally as governments, enterprises, telecom operators, and consumers aspire to reap the benefits of technological progress. Whether it is connecting systems, businesses or societies across the Middle East, Huawei’s widening breadth of solutions and consulting services are ultimately powering more intelligent cities that we believe will radically improve quality of life and transform the way people experience their world,” notes Shi Yaohong, President of Huawei Middle East.
Huawei's annual report, including its accounts audited independently by international accounting firm KPMG, can be downloaded at http://www.huawei.com/en/about-huawei/corporate-info/annual-report/2014/index.htm.
Huawei is a leading global information and communications technology (ICT) solutions provider. Our aim is to enrich life and improve efficiency through a better connected world, acting as a responsible corporate citizen, innovative enabler for the information society, and collaborative contributor to the industry. Driven by customer-centric innovation and open partnerships, Huawei has established an end-to-end ICT solutions portfolio that gives customers competitive advantages in telecom and enterprise networks, devices and cloud computing. Huawei’s 170,000 employees worldwide are committed to creating maximum value for telecom operators, enterprises and consumers. Our innovative ICT solutions, products and services are used in more than 170 countries and regions, serving over one-third of the world's population. Founded in 1987, Huawei is a private company fully owned by its employees.
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