Huawei CFO Says Huawei Created Customer Value and Maintained Effective Growth in 2014

Huawei’s 2014 sales revenue is expected to reach CNY287-289 billion; annual R&D investment exceeds CNY39.5-40.5 billion

Huawei announced that it maintained effective growth in 2014 thanks to its commitment to creating value for customers. Global sales revenue in 2014 is expected to reach between CNY287-289 billion, an increase of nearly 20% year-on-year.

Huawei’s Chief Financial Officer Meng Wanzhou announced that profits from Huawei’s main businesses in 2014 are expected to reach CNY33.9-34.3 billion, with a margin of 12% which is proportionately in line with 2013. Both cash flow from operating activities and asset to liability ratios remained stable and strong.

Each of Huawei’s Carrier, Enterprise, and Consumer Business Groups recorded strong performances in 2014.

• Revenue at Huawei’s Carrier Network business increased by approximately 15% over the previous year. The main drivers of the growth were a steady increase in 3G investment and the jump in 4G investments across the globe.
• Huawei’s Enterprise Business grew by around 27%. The business now serves more than 100 of the world’s top 500 companies. Huawei also established strategic partnerships with leading enterprises including SAP and Accenture for joint innovation in areas including cloud computing and big data.
• Finally, Huawei’s Consumer Business recorded a revenue increase of around 32% year-on-year thanks to the higher sale of mid-range and high-end handsets within a rapidly growing smartphone market worldwide, with Huawei enjoying particularly strong growth in emerging markets.

According to Ms. Meng, two major reasons explain Huawei’s steady global business growth in 2014. The first is the reinforcement of its core values — being customer-centric, treating dedicated employees as the foundation, and commitment to dedication. The second is continuously implementing management and organizational transformation designed to improve efficiency and inspire passion across the organization.

“By 2025, the number of connections around the world is expected to exceed 100 billion with connectivity becoming ubiquitous, much like air and water,” said Ms. Meng. “Ubiquitous connectivity and big data will drive a new industrial revolution in intelligent technology, propelling the modernization of traditional industries, and reshaping today’s industries and business landscape.

“The focus of industrial innovation will migrate from the consumer Internet to the industrial Internet. A Better Connected World is awaiting us. Anytime, anywhere connectivity will become the new norm.”

Huawei is committed to connecting numerous systems, businesses, cities, and people around the globe. Doing so will improve work efficiency, help transform industries, create a better experience for every user, and enable the free exchange of thoughts and ideas. Huawei will become a leading enabler of the information society.

In view of this, Huawei invests in building future-proof technological advantages on an ongoing basis. In 2014 Huawei invested between CNY39.5-40.5 billion in R&D, an increase of 28% over 2013. Huawei has cumulatively invested CNY188 billion in R&D over the last ten years. In addition, the company has submitted 546 proposals for LTE core standards to 3GPP, accounting for nearly 25% of the world’s total.

Huawei was included for the first time in the Thompson Reuters list of 2014’s Top 100 Global Innovators. The company also ranked 94th in Interbrand’s Top 100 Best Global Brands, making Huawei the first mainland China-headquartered company to make it onto Interbrand’s annual global list.

“The core values of ‘being customer-centric, making dedicated employees the foundation of our success, and our overall commitment to dedication’ have been the cornerstones of Huawei’s growth over the past 20-plus years,” noted Ms. Meng, “Huawei will continue to follow and embed these core values across the organization over the next decade to help us become the leader in the ICT industry.”

The financial results announced are unaudited. Huawei will release its final financial results audited by accounting firm KPMG in March 2015.