Huawei, a leading global information and communications technology (ICT) solutions provider, has announced its unaudited financial results for 2013 which indicate continued strong growth and sales momentum worldwide.
Huawei’s Chief Financial Officer Ms. Cathy Meng revealed that global sales revenue are estimated to reach between $39.22 billion - $39.44 billion in 2013, an increase of approximately 11.6% year-on-year in dollar equivalent. Ms. Meng also announced that Huawei’s operating profit for 2013 is expected to be in the range $4.7 billion to $4.83 billion, with cash flow from operating activities and the company’s asset to liability ratio remaining stable.
The global ICT solutions provider, operating in more than 140 countries worldwide, has achieved business growth across its three main carrier network, enterprise and consumer business groups. More than 75% of the carrier network business group’s revenue in 2013 came from the world's top 50 telecom operators, while the proportion of revenue from services and software in the carrier business increased to 37% in 2013 from 34% in 2012. Huawei also generated rapid growth in its consumer and enterprise business groups.
Despite an increasingly competitive landscape in the global ICT industry, Huawei’s continued growth can in part be attributed to the company’s continued commitment to innovation. Last year Huawei strengthened its R&D investments to support fundamental scientific and engineering technologies while ensuring alignment with its customer needs.
Ms. Meng said: “Every year for over the past 10 years, Huawei has invested more than 10% of sales revenue in innovation. In 2013 alone, the company’s investment in R&D reached $4.8 billion, accounting for about 14% of our sales revenue.” It is the first time that Huawei’s annual investment in R&D exceeded $5.4 billion.
From 2004 to 2013, Huawei invested a total of $25.29 billion in its R&D programs. As a global leader in LTE technology, Huawei has been the recipient of multiple industry awards including several vendor of the year recognitions in the Middle East region during 2013. Huawei is also a pioneer in 5G technologies with the company committed to investing $600 million by 2018 in support of research and innovation into the field.
“No matter where we are, from Mount Everest to the Norwegian LTE base station in the northernmost part of the globe, or the dense and stifling Amazon rainforest, customer-centricity and a solid reputation for delivering on our commitments and contracts are basic principles that our 150,000 dedicated employees in more than 140 countries around the world adhere to. This spirit of dedication has won us the trust of our customers,” said Ms. Meng. “We advocate and adhere to open collaboration across the industry value-chain and continuously strive to build business ecosystems that are characterized by resource and risk sharing, as well as win-win benefits, while providing high-quality, innovative products and services to our customers.”
Huawei’s continued profitability was further supported by improved efficiencies and reductions in internal management and operating costs. In 2013, Huawei implemented a number of restructuring processes such as a reorganization of its corporate management, new training programs to motivate its staff, strengthening of roles and responsibilities for frontline management, as well as a program to ensure field-based teams are equipped with the best tools and information to make effective business decisions. In addition, Huawei significantly enhanced its internal management and operations, shifting its operating model from function-centric to project-centric and boosting investments in R&D, to improve the company’s operating profit margin.
“The physical world and the digital world are merging at an accelerating pace. In the next decade, more people will spend more time using more applications. This will generate more need for data and services, thus increasing the momentum of network and device development,” said Meng. “We are dedicated to be a leader of the ICT infrastructure industry. While we continue to focus on our business and innovation strategy and the ongoing process of simplifying our management structure throughout 2014, Huawei will also work to achieve effective long-term growth and lay the foundation for the company's development over the next ten years.”
As part of the company’s commitment to promoting a vibrant ICT industry through partnerships, Huawei has selected 389 suppliers based on the supplier portfolio management results and their performance, and have fulfilled a supplier prepayment of approximately $1 billion in 2013.
Huawei’s audited financial results are to be announced in the second quarter of 2014.