Huawei 2007 Annual Report Download

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Enriching Life Through Communication
Annual Report 2007

Table of contents

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    Annual Report 2007 Enriching Life Through Communication

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    Annual Report 2007 Contents 1 3 4 5 7 Unique Values Five-Year Summary Business Focus 2007 Message from Huawei EMT Continuous Innovation Based on Customer Needs 25 Products and Services 29 A Culture of Dedication 31 Corporate Social Responsibility 35 Financial Report 2007

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    ... Innovation Based on Customer Needs Huawei has maintained a strategy of continuous customercentric innovation. Product R&D is responsive to projected and actual customer needs. With the goal of maximizing customer benefits and values, we continuously improved our technologies, solutions and services...

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    ... mobile, broadband, IP, optical networks, value-added services and terminals, offering customers the most competitive solutions. Adhering to the "proximity strategy", Huawei has relocated its essential decision-making centers, such as those of sales departments, financial departments and supply...

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    Five-Year Summary USD in millions Years ended 31 December Revenue Net Income Cash Flows From Operations Operating Profit Margin Return on Net Assets 2007 12,560 674 843 7% 22% 2006 8,504 512 743 7% 20% 2005 5,982 681 708 14% 30% 2004 3,827 624 396 18% 31% 2003 2,694 384 ...

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    ... the end of 2007, Huawei shipped base stations with total capacity of 700,000 carrier frequencies, serving over 300 million GSM users worldwide. Most notably, China Mobile awarded Huawei a 23.6% slice of a GSM Group Purchase Project. In addition, Huawei's market-leading mobile softswitches now serve...

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    5 MESSAGE FROM HUAWEI EMT

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    ..., from fixed and mobile network to continuous data communication technological innovation. Furthermore, we continuously introduce on-target and highly competitive products and solutions designed to enhance operators' profitability and Total Value of Ownership (TVO). Universally, Huawei is committed...

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    •a Continuous Innovation Based on Customer Needs 7 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ... and Cost", to maximize customer benefits and value. R&D Investment Huawei reinvests no less than 10% of its sales revenue in R&D and 10% of the R&D budget in cutting-edge technologies and fundamental technologies. Our R&D is undertaken worldwide with strategically located R&D institutes in the...

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    ... innovative solutions to capture convergence business opportunities and to provide consistently enhanced communication experiences for end users. 3G subscribers to Vodafone Live! were offered access to 10 digital TV channels via their handsets. Services on TV and mobile phones continue to converge...

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    CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS 10

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    Convergence Consistent communication experience for everyone People expect integrated multimedia information services and consistent communication experiences anywhere, anytime, at home, at office or on the road regardless of the networks they access. 11 CONTINUOUS INNOVATION BASED ON CUSTOMER ...

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    ... the evolution of the telecom industry and to ensure sustained commercial success for its customers, Huawei has launched innovative solutions for network, technology and service convergence. Network Convergence: Pooling Value Huawei leads the way in migrating every network layer to IP. The company...

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    13 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ... all-service broadband network, Morocco Telecom allows people to enjoy the convenience of added telephony, Internet surfing and IPTV over just one telephone line. Huawei's Multi-Play solution supports Morocco Telecom's new service and provides a platform for the speedy introduction of added services...

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    All-IP Broadband Omnipresent rich telecom services Driven by information communication technologies, profound changes have taken place in people's communication needs and habits: universally, end users expect increasingly smoother and enriched communications experiences. 15 CONTINUOUS INNOVATION...

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    .... The Femto Cell home solution satisfies enterprise and family demands for indoor broadband; the MBMS mobile TV solution ensures lively mobile broadband service experiences enhanced by high-quality images. Huawei's IPTime (IP Transport Infrastructure for Mobile Evolution) Solution is an all-IP based...

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    17 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ...on Investment). With Huawei's cost effective end-to-end GSM solution, Orange rapidly extended its network coverage to vast outlying areas. Apart from a substantially reduced overall investment, Orange obtained a highly profitable network, very effectively strengthening its competitive values. Huawei...

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    ... the convenience of communication and information services In remote areas where networks are unavailable, people are in need of basic communications access; in developed markets, people expect high quality information service at affordable prices. 19 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ... of total operating costs over the 5-10 year life-cycle of equipment. Huawei's distributed base station makes traditional equipment rooms redundant. With minimal site construction costs and lower rental and equipment installation expense, Huawei's distributed base station helps operators save more...

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    21 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ... with his customer via his handset, he might not have been aware he was enjoying the convenience provided by Huawei's next generation green station. Compared with traditional types, the new base station consumes half the energy while doubling output efficiency. Just one such base station saves 3,900...

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    ..., the carbon dioxide discharge of ICT devices accounts for 2% of the world's total. Our industry's top priorities have become the promotion of equipment efficiency, the adoption of green energy and the reduction of emission and energy consumption. 23 CONTINUOUS INNOVATION BASED ON CUSTOMER NEEDS

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    ... and green power supply, resulting in less use of air conditioners and minimal noise pollution. Green Core Network Huawei provides a unified 2G/3G core network, enabling optimal sharing of existing equipment. The efficient MSC pool configuration solution promotes network efficiency and cuts energy...

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    Products and Services Huawei offers innovative technologies and solutions to propel telecom networks and services into the age of all-IP and FMC. 25 PRODUCTS AND SERVICES

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    ... by establishing comprehensive advantages in core areas such as fixed network, mobile network and data communication technology, Huawei has emerged as a leader in the age of all-IP and convergence. In the next few years, Huawei will focus on 3G/LTE, IMS and Multi-Play, to promote the progress of all...

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    ... around the world. Application & Software: Dedicated, Convergent and Innovative Value-added services are becoming the prime driver of revenue growth in the telecom industry. Huawei provides a range of innovative services and convergent solutions, such as Convergent Billing, Digital Music, Messaging...

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    ...of all-IP and convergence, people expect to have consistent communication experiences no matter what type of terminal they use. Huawei offers a variety of products including mobile phones, data cards, FMC terminals, fixed stations, video-conference systems, set top boxes, home gateways, video phones...

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    A Culture of Dedication Dedication is at the very core of our corporate culture. Providing the driving force for continuous innovation based on customer needs, our committed and devoted employees are Huawei's most valuable assets. 29 A CULTURE OF DEDICATIUON

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    ... ground installation under a sheet of tarpaulin, quickly switching to the tower whenever the rains paused. By making use of every moment, under cover or in open air, they installed over 1,000 base stations in just one month, keeping the company's commitment to its customer. A CULTURE OF DEDICATION...

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    Corporate Social Responsibility Besides providing commercial value, Huawei is also committed to being a globally responsible corporate citizen, contributing to the sustainable development of our world's social economy, to the environment, and to the establishment of a harmonious business ecosystem....

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    ... technological innovations (see "Green Solutions, Green World"). 6.3% From 2003 to 2007, Huawei's energy consumption per USD10,000 output decreased annually by an average of 6.3%. In Huawei offices worldwide, the company takes similarly effective measures to save energy and reduce emissions: Air...

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    ...channel for employees to make donations. Every year, hundreds of thousands of people from different regions of the world find their lives improved because of the welfare programs of Huawei. 6 tons Huawei donated six tons of corn powder to the Red Cross in Kenya. 33 CORPORATE SOCIAL RESPONSIBILITY

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    ...We have set up a supplier social responsibility verification program to carry out systematic training of procurers and suppliers on SA8000, TL9000 and ISO14000, to ensure that every link in our supply chain is in compliance with published standards. Huawei has drawn a clear green procurement roadmap...

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    ... Income Statement Huawei Technologies Corporation and Subsidiary Companies Years ended 31 December 2007 USD '000 12,560,356 (8,298,080) 4,262,276 (3,315,669) (79,511) 867,096 2006 USD '000 8,503,897 (5,424,011) 3,079,886 (2,352,862) (106,029) 620,995 Revenue Cost of sales Gross profit...

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    Consolidated Balance Sheet Huawei Technologies Corporation and Subsidiary Companies As of 31 December 2007 USD '000 2006 USD '000 Assets Cash and cash equivalents Trade and other receivables Investments Inventories Total Current Assets Property, plant and equipment Long-term leasehold ...

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    ... Flow Huawei Technologies Corporation and Subsidiary Companies Years ended 31 December 2007 USD '000 2006 USD '000 Cash Flows from Operating Activities Cash generated from Operations Interest and income tax paid Cash Flows from Operating Activities Cash Flows (used in)/from Investing Activities...

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    ...2007 comprise the Company and its subsidiaries and the Group's interest in associates. The Group's activities involve research and development, production and sale of telecommunications equipment and provision of related services. ii) Construction Revenue When the outcome of a construction contract...

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    ... lease rentals are payable as follows: 2007 2006 USD'000 USD'000 Less than one year Between one and two years Between two and five years Total 33,434 20,281 11,007 64,722 43,710 27,643 4,483 75,836 The Group leases a number of warehouses, factory facilities, office premises and staff apartments...

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    Copyright©2008 Huawei Technologies Co., Ltd. All Rights Reserved. The information contained in this document is for reference purpose only, and is subject to change or withdrawal according to specific customer requirements and conditions.