PARIS, April 30 /PRNewswire-FirstCall/ -- Key figures for the first quarter of 2008
PARIS, April 30 /PRNewswire-FirstCall/ — Key figures for the first quarter of 2008
– Consolidated revenue of EUR234.5 million was slightly down (by 3.4%), adjusting for divested businesses(1), essentially as a result of refocusing on strategic offerings
– Revenue from the Services & Solutions business was EUR106.6 million, representing a 11.7% increase; orders were lower than in Q1 2007, having been boosted at that time by a major contract with the State of California
– Order intake in the Hardware & Systems Solutions business grew by 18% including significant progress in integrated offerings; revenue for the segment decreased 9.5% in a quarter traditionally weak for this activity
– Backlog increased 8.9% excluding "recurring" activities.
Bull (Euronext Paris: BULL.PA), expert in open, flexible and secure information systems and one of the leading players in the European IT industry, today announced that its revenue for the first quarter of 2008 was EUR234.5 million, representing a 5.1% decrease on the published figure of EUR247.1 million for Q1 2007. However, after recasting1 the figure to take account of businesses divested in 2007, the fall in revenue was 3.4%. After taking into account the additional effects of exchange rates, the fall in revenue amounted to 2.5%.
Didier Lamouche, Bull Chairman and CEO, commented: "Although revenue for the first three months of 2008 was slightly lower than the equivalent period in the previous year, this was above all a key quarter for the Group in terms of the implementation of new offerings. The backlog at the end of the quarter shows a respectable increase over last year reflecting our commercial momentum. The High-Performance Computing (HPC) business is growing in strength. We have launched a number of important initiatives, won prestigious new contracts, and we are on track with our roadmap for the business. Our secure storage offering is now in place, along with the sales resources to support it. The most recent milestone for the company is the launch (in France) of globull, one of the most significant 'product' launches in the whole history of the Group. Reconciling mobility and security, globull allows users to transport their data and work environment and to use them in complete confidence by connecting to a computer, at work, at home or on the road."
New segmentation of Group activities
To better reflect its business activities, from 2008 Bull is adopting a new segmentation that more accurately describes its offerings in line with the criteria of the market in which it operates.
The new 'Services & Solutions' segment includes all activities linked to services businesses: consulting, systems integration and outsourcing services, licenses for Bull and third-party applications, and IT security and sector-specific software solutions. As a result, this definition of services and solutions is more closely comparable with that used by other companies in the same sector.
The new 'Hardware & Systems Solutions' segment includes the Group's core product offerings, such as integrated solutions based on Bull servers (GCOS, Escala and NovaScale), and secure data storage, including the growth offerings in HPC (High-Performance Computing). It illustrates the company's evolution from a hardware manufacturing company to one whose business is to be the architect of integrated solutions. Revenue from Bull hardware supplied under systems integration contracts will still be accounted for in this segment.
The 'Fulfillment & Other Products' segment includes third-party products – outside the Bull catalog – supplied by Bull at its customers' request. This non-strategic offering enables customers who wish to do so, to engage a single supplier to meet the full range of their requirements. The fact that this kind of activity is being separated out into a dedicated segment should make this easier to understand.
Finally, maintenance activities relating to Bull and third-party products will still be accounted for under the 'Maintenance & Product Related Services (PRS)' segment.
First quarter activity: orders and revenue by segment
Services and Solutions
Revenue from the Services & Solutions business was EUR106.6 million in the first quarter representing a growth rate of 11.7%, despite an unfavorable calendar effect reducing billable days by 1.6% in France. This above market-rate growth is in line with the trend observed during recent quarters. For its part, order intake is lower compared to a particularly successful Q1 2007, during the course of which Bull recorded a significant order from the State of California. Even excluding this base effect, order intake in Q1 2008 continued to grow, with particularly strong performance in telecoms.
Hardware & Systems Solutions
Analysis of offerings demonstrates the particular momentum in integrated products – secure storage and High-Performance Computing (HPC) – where there has been a significant increase in orders, contributing to an overall increase of 18% in this segment. Given that this quarter is traditionally weak for this area of the business, revenue from this segment declined by 9.5% to EUR58.1 million in Q1 2008. Nevertheless, new integration offerings based around the Group's storage and HPC solutions grew strongly, confirming the appropriateness of the Group's strategic decisions and investment in sales resources in these areas.
The Group's Maintenance business recorded revenue of EUR48.6 million, a decline of 8% in revenue, the anticipated result of the programmed expiry of a number of contracts linked to proprietary servers. The target for revenue for the Maintenance business for the whole of the financial year remains in line with expectations, slightly lower than in 2007.
Fulfillment & Third Party Products
The sharp fall in revenue from the Third-Party Products business (EUR21.2 million, down by 39%) reflects the deliberate refocus on Bull's own, higher added-value offerings. This decline also accounts for the majority of the overall drop in the Group's consolidated revenue. Bull will continue to be extremely selective when it comes to the orders it takes in this area of the business.
Group financial position
The Group's financial situation remains healthy. The cash picture demonstrates a similar pattern to previous years. The month of March is traditionally a low-point in cash position, which generally mirrors the trend in revenue.
Key highlights in Q1 2008
Continuing the process of refocusing on its strategic business priorities, in January 2008 Bull announced that it had sold 100% of its subsidiary Maine Circuits ImprimÃƒÂ©s (Maine CI) to the Italian group Elco, one of the country's leaders in printed circuit technologies for the aeronautical and military, industrial and telecommunications sectors.
High-Performance Computing (HPC): a strategic commitment
With over 100 customers in 15 countries across three continents, the momentum that Bull achieved in 2007 in HPC continued into the first quarter of 2008, in line with its ambition to double its revenue from this segment in 2008.
The French Atomic Energy Authority (the CEA) and Bull achieved a record performance for image searches in very large databases: enabling some 3.7 million images a second to be searched, five times faster than previously possible. This record-breaking performance was achieved using a supercomputer designed and supplied by Bull, using a multimedia search engine specially developed by the CEA's systems and technology integration laboratory (CEA LIST). This world record also opens the way to a vast spread of applications: from strategic business intelligence to comparison of medical imagery, from intensive 'data mining' on the Internet to e-business and content management.
The new supercomputer that Bull has delivered to Cardiff University to support research projects in this, one of the UK's leading higher education institutions, is capable of some 25 thousand billion operations a second (25 Teraflops). It will enable researchers at the University – including two Nobel Laureates – to approach problems of a new size and complexity.
Storage: a consistent strategy to simplify data protection and management
StoreWay Calypso, the latest software suite launched by the Group, makes use of high technology to unify data management and take the protection of information into a new dimension.
Services business continues its momentum
Bull subsidiary AddressVision Inc. (AVI), which specializes in automated postal solutions, was chosen by Australia Post to modernize its automatic address recognition and postal automation system.
In France, Bull and Medasys have established a new partnership in clinical information systems. This agreement between Bull and France's leading publisher of software for the healthcare sector underlines both companies' commitment to and involvement in the implementation of the French government's HÃƒÂ´pital 2012 initiative, providing solutions that go right to the heart of the projects to implement electronic patient records.
Finally, as part of its program to grow the business, Bull Evidian – Europe's leading provider of Identity and Access Management (IAM) solutions and a top supplier of password management systems with its single-sign-on solution (E-SSO) – announced a new partnership with Quest, a major publisher and distributor of IT infrastructure administration software. The agreement, which centers on worldwide distribution of Evidian's E-SSO offering, will strengthen Evidian's international position and opens up new markets for its solutions, most importantly in North America.
At this year's CEBIT conference in Hanover, Bull announced that it had become a member of the Climate Savers Computing Initiative; in line with its 'Bio Data Center' approach focused on eco-friendly computing, unveiled in 2007. The Initiative is a global, not-for-profit organization whose principal aim is to halve the energy consumption of IT systems between now and 2010.
Outlook for 2008
The Group confirms the outlook announced in February 2008: the objective for EBIT (see glossary) in the 2008 financial year is in the range EUR23 million to EUR27 million with the objective for the second half of the year being higher than the first half. Key factors contributing to the achievement of this target will be to improve the margin in Services, and to grow sales of integrated products such as HPC and storage solutions.
EBIT: Earnings before Interest and Taxes, non-operating and non-recurring items and contribution of equity affiliates.
About Bull, Architect of an Open World(TM)
As one of the leading European IT companies, Bull delivers open, flexible and secure information systems. The group helps public and private sector customers transform their information systems, applying its know-how and expertise in three main areas:
– Capitalizing on its extensive mainframe experience, Bull designs and produces robust, innovative and open servers, based on industry-standard technologies;
– Building on its alliances with leading ISVs and long-standing involvement with Open Source, Bull develops and implements flexible and interoperable application infrastructures which give business processes the freedom to evolve;
– Bringing together recognized expertise in end-to-end IT security, Bull secures data and exchanges that are so critical in preserving customers' business integrity.
Bull has a particularly strong presence in the public, healthcare, finance, telecommunications, manufacturing and defense sectors. Its distribution network and business partners cover more than 60 countries worldwide.
For more information visit: http://www.bull.com Revenue evolution by business activity (unaudited data) EUR million 2007 2007 2008 variation as recast as recast published* (1) published* (1) Revenue 247.1 242.7 234.5 100% -5% -3.4% Services & Solutions 95.5 106.6 45.5% 11.7% Hardware & Systems Solutions 64.2 58.1 24.8% -9.5% Third-Party Products 34.6 21.2 9.0% -38.7% Maintenance 52.9 48.6 20.7% -8.1%
(1) Only the consolidated revenue from 2007 has been restated to exclude the Portuguese business (divested in March 2007) and Maine CI (divested in January 2008). * For comparative purposes, the consolidated revenue as published for 2007 is broken down here according to the new segmentation.
Revenue breakdown by geographic area (unaudited data) First quarter revenue 2007 2008 Variation EUR million recast(1) France 117.5 127.0 -8,0% Europe excluding France 81.7 71.2 -12,8% Rest of the World 43.4 36.4 -16,1% Total 242.7 234.5 -3,4%
(1) Consolidated revenue for 2007 has been restated to exclude the Portuguese business (divested in March 2007) and Maine CI (divested in January 2008).
Revenue from France, the Group's largest market, grew by 8% adjusting for divested businesses1, due to the efforts made in sales over the past few months, particularly focused on services and the Group's new integrated offerings. The Group's deliberate refocusing on its core offerings resulted in a fall in revenue both from Eastern Europe and the Rest of the World.
This Press release includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause expected results to differ.
Although Bull believes that its expectations and the information in this Press release were based upon reasonable assumptions at the time when they were made, it can give no assurance that those expectations will be achieved or that the expected results will be as set out in this Press release. Neither Bull nor any other company within the Bull Group is making any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information in the Press release, and neither Bull, any other company within the Bull Group nor any of their directors, officers or employees will have any liability to you or any other persons resulting from your use of the information in the Press release.
(1) Revenue for 2008 has been recast to exclude the Portuguese business (divested in March 2007) and the Maine CI printed circuit boards business (divested in January 2008). Companies acquired in 2007 contributed EUR11.0 million to consolidated revenue during the period (Q1 2008).
Contacts Investor Relations contacts: Bull: Peter Campbell – Tel: +33(0)1-30-80-32-36 – email@example.com Financial Dynamics: Laurence Borbalan/Eloi Perrin-Aussedat – Tel:+33(0)1-47-03-68-10 – firstname.lastname@example.org / email@example.com Press contacts: Bull: Anne Marie Jourdain – Tel: +33(0)1-30-80-32-52 – firstname.lastname@example.org Financial Dynamics: Tiphaine Bannelier / Elodie Marchand – Tel: +33(0)1-47-03-68-10 – email@example.com / firstname.lastname@example.org