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Huawei Annual Report 2020

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Huawei Annual Report 2020 2020 Who is Huawei? Founded in 1987, Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. We are committed to bringing digital to every person, home and organization for a fully connected, intelligent world. We have approximately 197,000 employees and we operate in over 170 countries and regions, serving more than three billion people around the world. Who owns Huawei? Huawei is a private company wholly owned by its employees. Through the Union of Huawei Investment & Holding Co., Ltd., we implement an Employee Shareholding Scheme involving 121,269 employees. Only Huawei employees are eligible to participate. No government agency or outside organization holds shares in Huawei. Who controls and manages Huawei? Huawei has a robust corporate governance system that ensures the company’s independent operations and management. Shareholding employees elect 115 representatives to form our Representatives’ Commission, and the Commission elects the company’s Board of Directors and Supervisory Board. The Commission, along with the Board of Directors and Supervisory Board, decides on, manages, and monitors major company matters. Specifically, the Commission elects the Chairman of the Board and the remaining 16 board directors. The Board of Directors elects four deputy chairs and three executive directors. Three deputy chairs take turns serving as the company’s rotating chairman. The rotating chairman leads the Board of Directors and its Executive Committee while in office. The Board exercises decision-making authority for corporate strategy and operations management, and is the highest body responsible for corporate strategy, operations management, and customer satisfaction. Meanwhile, the Chairman of the Board presides over the Representatives’ Commission. As Huawei’s highest decision-making body, the Commission makes decisions on major company matters, like profit distribution, capital increases, and the elections of members of the Board of Directors and the Supervisory Board. Who does Huawei work with? Externally, we rely on our customers and partners. Customers are at the heart of everything we do, and we create value for them with innovative products. Internally, we rely on our hard-working and dedicated employees. At Huawei, those who contribute more get more. We work with a broad range of stakeholders including partners, industry organizations, open source communities, standards organizations, universities, and research institutes all over the world to cultivate a broader ecosystem that thrives on shared success. In this way, we can help drive advancements in technology and grow the industry as a whole. We create local employment opportunities, pay taxes, and comply with all applicable laws and regulations in the countries where we operate. We also help local industries go digital, and openly engage with governments, the media, and other stakeholders. What do we offer the world? Contents We create value for our customers. Together with our partners, we provide telecom carriers with network products and solutions that are innovative, simplified, intelligent, secure, and 02 Message from the Rotating Chairman trustworthy. We also open up our ICT capabilities to government and enterprise customers, providing them with products and 06 Business Highlights in 2020 services that are intelligent, secure, and trustworthy. With our 07 Five-Year Financial Highlights smart devices, we help people enjoy a better digital experience in work, life, travel, and entertainment. 08 Message from the Chairman We ensure secure and stable network operations. Cyber security and privacy protection are and will always remain our 11 Industry Trends top priorities. We believe strongly in the power of openness and 14 Management Discussion and Analysis transparency, and work hard to make ongoing improvements to our software engineering capabilities and business continuity 80 Independent Auditors’ Report management systems, while enhancing the resilience of our 81 Consolidated Financial Statements networks. Summary 132 Risk Factors For more than 30 years, we have worked closely with our carrier customers to build over 1,500 networks in more than 170 countries and regions. Together, we have connected more than 135 Corporate Governance Report three billion people around the world and have maintained a solid track record in security. 148 Creating Social Value 150 Sustainable Development We promote industry development. Huawei advocates openness, collaboration, and shared success. Through joint 165 Abbreviations, Financial Terminology, innovation with our customers and partners, we are expanding and Exchange Rates the value of ICT to foster a healthy and symbiotic industry ecosystem. Huawei is an active member of more than 600 standards organizations, industry alliances, and open source communities, where we work with our peers to develop mainstream standards and drive the industry forward. We enable sustainable development. Huawei is committed to bridging the digital divide and promoting digital inclusion. We have helped connect places as remote as the highest peaks of the Himalayas and the frigid depths of the Arctic Circle. We are keenly aware of the importance of telecommunications during emergency situations. In response to catastrophic events like earthquakes, floods, conflicts, and public health emergencies, our people on the ground hold fast to restore communications networks in affected areas and ensure the reliable operations of essential telecoms equipment. To further promote sustainability, we prioritize a low-carbon footprint and environmental protection. We are also helping develop the next generation of local ICT talent to boost the digital economy. Message from the Rotating Chairman Needless to say, 2020 was an extraordinary year. According to WHO, more than 100 countries went on lockdown last year, a degree of social distancing the likes of which the world has never seen. This has had a huge impact on both our lives and the economy. At Huawei, for the past year we’ve held strong in the face of adversity. We have kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress. We also took this opportunity to further enhance operations. As a result, our business performance was largely in line with forecast. Despite a challenging business environment, Huawei has remained committed to a globalized and diversified supply chain – one that doesn’t rely on any single country In 2021, we will continue to find or region, but instead leverages global resources to ourselves in a complex and volatile global ensure supply continuity. environment. Resurgence of COVID-19 and geopolitical uncertainty will present As a member of the ICT community, we have been ongoing challenges for the global doing everything we can to support the ongoing fight against the pandemic. We continue to work community. Huawei believes deeply in the closely with our customers to ensure the stable power of digital technology to provide operations of more than 1,500 networks across over fresh solutions to the problems we all 170 countries and regions, and have been actively face. We want to create digital technology using ICT technology to assist the pandemic response that makes lives better, makes businesses in local communities. As part of our commitment more intelligent, and makes society more to multilateral international cooperation, we are working closely with local governments, community inclusive. This will ultimately bring us closer organizations, international organizations, and our to a fully connected, intelligent world. customers and partners to protect the health and safety of the people we serve. 02 Huawei Investment & Holding Co., Ltd. In Malaysia and Saudi Arabia, we installed we don’t. As always, we will keep creating value for telepresence videoconferencing systems so that our customers through quality products and services. different organizations responsible for pandemic response could collaborate more seamlessly. This We continue to innovate in connectivity and allowed doctors to share clinical experience more computing, working with our customers and efficiently and governments to issue guidance more partners to make the most of ICT infrastructure. As effectively. In Ecuador and Italy, we helped hospitals part of these efforts, we are building premium 5G deploy AI-assisted CT scan screening systems networks, leading the development of intelligent IP to expedite the diagnosis of potential COVID-19 networks, and building out optical networks that patients and reduce the strain on their healthcare support deterministic latency in order to help our systems. In Namibia and Argentina, we helped install customers stay at the cutting edge of technology. infrared thermometers in crowded places to prevent By delivering intelligent connectivity that features the spread of the virus. In total, Huawei provided ubiquitous gigabit, deterministic experience, and technical assistance to nearly 90 countries, doing our hyper-automation, we continue to optimize connected best to support our local communities in this time of experience to maximize the value of our customers’ great need. networks. While 2020 had its fair share of challenges, it also Cloud is another area where we’re pushing technology came with opportunity. The pandemic ended up to its limits to bring the benefits of innovation to greatly expediting the digital transformation of
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