Author | Click
Source | Blue Blood Study (Lanxueyanjiu)
On the afternoon of March 28, Huawei held the 2021 annual report press conference, and Meng Wanzhou, vice chairman and CFO of Huawei, will make his debut and attend the event after returning to China.
According to the report released by Huawei, Huawei's overall operation is stable, achieving global sales revenue of 636.8 billion yuan, down 28.6% year-on-year, and net profit of 113.7 billion yuan, an increase of 75.9% year-on-year.
In addition, Huawei's operating cash was 59.7 billion yuan, an increase of 69.4% year-on-year, and the asset-liability ratio was 57.8%, down 4.5 percentage points.
The summary of sales revenue in the past five years is as follows:
Meng Wanzhou, Chief Financial Officer of Huawei, said: "Our scale has become smaller, but our profitability and cash flow acquisition capabilities are increasing, and the company's ability to cope with uncertainty is constantly improving. ”
Specifically, among Huawei's three major businesses, the carrier business contributed 281.5 billion yuan, the overseas business revenue accounted for more than 50%, and the enterprise business revenue was 102.4 billion yuan, of which the emerging business increased by 30%.
The revenue of consumer business was 243.4 billion yuan, of which the revenue of smart wearables and smart screens increased by 30%.
The distribution of income by region is as follows:
According to third-party reports, in 13 countries, including Switzerland, Germany, Finland, the Netherlands, South Korea, and Saudi Arabia, huawei's 5G network user experience is the best. Together with operators and partners, Huawei has signed more than 3,000 commercial contracts for 5G industry applications, and 5G has been commercialized on a large scale in manufacturing, mining, steel, ports, and medical care.
Huawei's R&D expenditure in 2021 was RMB142.7 billion, accounting for about 22.4% of its annual revenue, and its cumulative R&D expenditure in the past decade exceeded RMB845 billion. In 2021, about 107,000 people will be engaged in research and development, accounting for about 54.8% of the total number of companies.
In 2021, Huawei will spend a total of 164.5 billion yuan in employee expenses, and if it is calculated for 200,000 people, the per capita income will be 823,000 yuan.
After analyzing the financial report, Meng Wanzhou said that Huawei's biggest wealth is not on the statement, but in people.
Rotating Chairman Guo Ping delivered a speech
In the past three years, severe external environment and non-market factors have brought trouble to the company's operations.
When the storm came, we chose to run in the rain. We strive to ensure business continuity and uninterrupted delivery and service to our customers, and we strive to feed ourselves so that we can survive. The downpour did not extinguish the spark of ideals, but stimulated our enthusiasm and creativity.
When the world is concerned about whether Huawei will fall, Huawei is most concerned about creating value for customers and cooperating with the ecosystem for win-win results, while steadily improving business quality and continuing to invest in the future. It is the trust and support from customers, partners and all sectors of society that give Huawei the opportunity and confidence to survive, and on behalf of Huawei, I would like to express my sincere thanks to everyone!
01
Financial stability, operational efficiency, healthy business development
In 2021, the company's overall operating conditions are in line with expectations and financially sound. The company achieved sales revenue of RMB 636.8 billion, stable performance of operator business, steady growth of enterprise business, and rapid development of new industries in terminal business.
Realized profit of RMB113.7 billion, net profit margin of 17.9%, operating cash flow increased by 69.4%, cash stock is sufficient, asset-liability ratio decreased from 62.3% to 57.8%, and the capital structure was further improved. Through simplifying management and making full use of digital technology, the company continued to improve its internal operational efficiency, and reduced sales and management expenses by RMB 9.3 billion year-on-year.
The more difficult the period, the more attention is paid to the investment in the future. In 2021, we increased our R&D investment, with R&D expenses of RMB142.7 billion, accounting for 22.4% of sales revenue, and the amount of R&D expenses and expense ratios were at the highest level in the past decade. At present, Huawei's R&D investment ranks second among global enterprises.
Facing the future, Huawei will continue to increase investment in the direction of digitalization, intelligence, and low carbon, relying on the three elements of talent, scientific research, and innovation spirit, and strive to reconstruct the technical base. On this basis, we bring together a variety of ICT technologies and global experience to assist customers in various industries to carry out digital transformation and create value for customers and society.
Huawei works with global operators and partners to build a minimalist, green, and intelligent ICT infrastructure. In tests in 13 countries, Huawei built the best user experience of 5G networks. We've also advanced more than 3,000 5G industry applications, enabling operators in more than 100 countries to deploy green sites.
For key industries such as government, transportation, finance, energy, and manufacturing, Huawei has released 11 scenario-based solutions and established legions such as coal mines, smart highways, customs, and ports to integrate resources and efficiently serve customers. More than 700 cities and 267 Fortune Global 500 companies have chosen Huawei for digital transformation, and the number of service and operation partners has grown to more than 6,000.
The terminal business adheres to the consumer-centric approach, building a global ecosystem of intelligent connection of everything and billions of connections, and the smart wearable, smart screen, TWS, and consumer cloud service industries have achieved continuous growth, with more than 220 million Huawei devices equipped with HarmonyOS. Focusing on the 1+8+N all-scenario strategy, brand marketing, channel retailing and service capabilities are upgraded, supporting the accelerated transformation of all-scenarios and expanding new tracks.
Digital energy continues to innovate around clean power generation, energy digitalization, transportation electrification, green ICT energy infrastructure, integrated smart energy, etc., and works with global customers and partners to build a low-carbon society. In total, it has helped customers achieve 482.9 billion kWh of green power generation, save about 14.2 billion kWh of electricity, and reduce carbon dioxide emissions by nearly 230 million tons.
HUAWEI CLOUD is committed to providing customers with stable, reliable, secure, trustworthy, and continuously innovative cloud services. Infrastructure as a service, making business globally accessible, technology as a service, opening up Huawei's advanced technology achievements in the form of cloud services, so that innovation is within reach, and experience as a service, so that excellence can be copied. Fully open more than 50 scenario-based cloud services, and jointly provide customers with more than 8,000 scenario-based solutions. Through the Fertile Land Project, 2.6 million developers have been brought together.
The intelligent auto parts business serves customers and partners with high-quality products, and has listed more than 30 smart auto parts, bringing more technological innovation to the industry. Through HI (Huawei Inside) and smart selection mode to provide intelligent car solutions, Huawei insists on not building cars, helping customers build and sell good cars.
Huawei's product competitiveness has been recognized by the industry, and at the 2022 Mobile World Congress, many projects undertaken by Huawei won heavyweight awards such as "Best Connected Economy Mobile Innovation Award", "Best Connected Human Mobile Innovation Award", "Best Climate Action Mobile Innovation Award", and "5G Industry Partner Award"; Huawei ranked 9th in Brand Finance's "2022 Global Brand Value 500", which also shows that we are at a leading level in soft power.
02
Forge ahead in spite of difficulties, systematically innovate, and reconstruct competitiveness
The future begins with assumptions. Without correct assumptions, there is no right direction, no right ideas, theories and strategies.
Customers expect Huawei to continue to provide competitive leading products in the future, which guides us in the direction of our efforts. However, we still face many difficulties, such as globalization, technology politicization, normalization of the epidemic, and bottlenecks in basic theory, which also means that we cannot meet customer needs through traditional technology paths.
Huawei will continue to strengthen R&D investment, strengthen system engineering innovation, and promote the three reconstructions of basic theory, architecture, and software. System drive component design, architecture design is born for the system, and actively seek system breakthroughs, so as to achieve first-class product competitiveness.
The first is theoretical reconstruction, we continue to explore the new generation of MIMO and wireless AI and other theories and technologies, further approaching the Shannon limit. At the same time, he studied new theories such as semantic communication, tried to surpass Shannon's limits, and opened up a broader space for communication. Our exploration at the forefront of communication theory has begun to "lay eggs along the way", Massive MIMO's innovative product MetaAAU, which can simultaneously increase the upstream coverage of the cell by 30% and the downstream coverage by 30%, and the average experience of edge users can be increased by 25%, compared with traditional AAU, the energy consumption is reduced by about 30%.
The second is architectural refactoring. In the field of communications, the technology of wireless and optical will be fully coordinated, and photoelectric fusion technology will be introduced to solve the problems of wireless ultra-high frequency, ultra-high bandwidth and ultra-high speed, and break through the process bottleneck faced by future chips.
In terms of computing architecture, to solve the current contradiction that "AI and big data applications are booming, while traditional computing architectures are still CPU-centric", Huawei is designing a "peer-to-peer" architecture to use the Lingqu bus to enable GPUs, NPUs, and new hardware to support the great development of AI services. We expect that by extending this design to the compute center, the third generation of cluster computing centers will be able to improve performance by 5-10 times.
Finally, there is software refactoring. Facing the future, with the outbreak of AI, the demand for computing power has increased sharply, but the progress of hardware processes has slowed down. We have raised the priority of software, sorted out the technical system of basic software, made breakthroughs in high-performance, easy-to-expand, pan-storage, easy-to-develop and other technical directions, and more effectively exerted the computing power potential of diversified hardware through HarmonyOS and Euler; helped scientists and engineers greatly improve development efficiency through the MindSpore framework. Huawei's AI-centric full-stack software reconstruction is expected to create a new ecosystem. Our software enhancement program has improved key metrics such as wireless cell count and scheduled users by 1x, Ethernet switch user access performance by 3x, and optical transmission products have greatly improved their leading capabilities.
These innovations have enabled us to maintain first-class product competitiveness under extremely difficult conditions.
Theoretical breakthroughs, software breakthroughs, and architectural reconstruction will lay the foundation for our future survival and development. The key to achieving the three refactorings lies in open innovation and the recruitment of talents.
With an open mind, Huawei is implementing a global technical capability layout, close to the academic source, and cooperating with global universities to establish joint laboratories. We have established the Huang Danian Tea House of Exploration, Traction, Openness and Speculation near the university, which is open to the whole society and is a channel for scientists to communicate, inspire progress in science and technology, and promote the establishment of a beacon for the future.
Huawei summarizes the most challenging issues in the ICT industry, attracting global talents and enabling world-class talents to overcome world-class problems. The company proposes to "let the genius come in groups", let the experts play a full role in key business areas, let them "rampage" in the field of science, and use the concentration of talents to fight against the difficulty of technology. In Forbes' "2021 Global Best Employers" ranking, Huawei ranked 8th, and we will continue to improve the attractiveness of talents.
03
Trustworthy and reliable, prosperous and ecological, and well-served customers who choose Huawei
Serving customers is the only reason Huawei exists, and we position ourselves as a solver of our customers' business problems. For customers who choose Huawei, Huawei will work with partners to help customers grasp the opportunities of digitalization and green and low-carbon industries with innovative products and high-quality services, and achieve business success.
Safe, reliable and competitive health industry chain. Huawei has established an end-to-end business continuity management (BCM) system from suppliers and partners to Huawei, and from Huawei to customers, and has continuously optimized and improved it. Faced with the challenges of the external supply environment and the global supply chain disruption caused by the COVID-19 pandemic, Huawei has established a multi-node, multi-path, and multi-echelon supply network backup capability, and the supply network has withstood the test. We always unswervingly embrace the global and diversified supply strategy, and work with global suppliers and partners to create a safe, reliable and competitive health industry chain.
Continuously build safe and trusted products, solutions, and services. Huawei regards network security and privacy protection as the company's highest guidelines. Based on the development trend of comprehensive cloudification, intelligence, and software-defined everything, Huawei will continue to deepen the improvement of software engineering capabilities, strive to achieve the credibility of results and processes, and continue to optimize the end-to-end network security assurance system through management change, technological innovation, and open cooperation, and integrate trust and build high quality into every product and solution.
Focus on platform capabilities to promote ecological prosperity. Adhering to the concept of openness, collaboration and altruism, we continue to develop the business ecology, bringing together the whole industry to build a prosperous Hongmeng, Euler, Shengsi ecology, and jointly create greater value for customers.
We encourage an ecological atmosphere of open innovation, advocate the ecological awareness of collaborative altruism, continuously optimize the ecological operation and health assessment mechanism, continuously release ecological creativity, expand the ecological value space, and achieve win-win results with ecological partners and developers. More than 8 million developers are using our open platform, open source software, and rich development tools to improve development capabilities and efficiency;
More than 70 universities and colleges have jointly developed courseware tutorials with us to cultivate and develop ecological talents extensively.
The world we live in is a complex system, as a pragmatic commercial enterprise, we focus on solving the problems of our customers in a down-to-earth manner and creating value for the industry and society.
The direction should be roughly correct and the organization should be dynamic. The vitality of an organization lies in the construction of inanimate mechanisms. Facing the future, Huawei should not only boldly assume and dare to explore the frontier direction of industrial technology, but also adhere to the certainty of rules to overcome environmental uncertainty. We still have many difficulties to overcome and fight for survival; but no matter how big the difficulties, we must unswervingly increase strategic investment and always cooperate openly with the business ecosystem, and we firmly believe that together, there is a future.
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