Bull Reports 2014 Half-Year Results

July 29, 2014

PARIS, France, July 29 — The Board of Directors of Bull met on 28 July 2014 to examine and approve its interim consolidated financial statements reviewed by the Company’s auditors.

Philippe Vannier, Chairman and CEO of Bull, commented, “The first half of 2014 has been one of the most important stages in the recent development of the Group, with the launch of the One Bull strategic plan and the proposed combination with Atos that will enable its accelerated implementation. Numerous initiatives relating to the plan have already been launched, with early results fully in line with our expectations and a further increase in the contribution expected in the second half. Successes achieved in cloud computing, security and supercomputers comfort us in our strategy and our ambitions in these promising areas.”

During the first half of 2014:

  • Order intake rose 7.1% to EUR680.3 million, driven by successes in supercomputers and the cloud, with a positive book-to-bill ratio of 116%;
  • Revenues totalled EUR585.4 million, down 2.6% at constant exchange rates and down 3.4% at current exchange rates, with lower investment in traditional IT infrastructure whilst cloud computing saw strong growth;
  • EBIT was EUR14.4 million, an increase of EUR3.0 million on the first half of 2013, driven by a 140 basis point increase in gross margin;
  • Operating cash flow improved significantly, with an outflow of EUR74.6 million, from EUR108.4 million in the same period in 2013;
  • The One Bull strategic plan for 2014-2017, which aims to double EBIT margin to 7% by 2017, was launched, with the activation of the three levers identified in the plan:
  • Focus: a refocusing of businesses on the areas of the cloud and Big Data, with the beginning of a partial or selective withdrawal from certain business areas, offerings or geographic locations, considered non-strategic or dilutive;
  • Efficiency: improvements in the efficiency of the Group through the introduction of a new operating structure. This simplifies the organisation, with a significant reduction in the number of operational units, and will result in a geographical regrouping of Bull worldwide, based on five regional clusters, thus beginning the process of optimising the structure of the Group’s fixed costs;
  • People: the overhaul of the enterprise-wide agreements has begun with the process of termination of the existing agreements and practice relating to the structure and working hours.

Given the progress on these initiatives, the costs of implementing the One Bull plan were recognised in the income statement for an amount of EUR56.9 million, in line with the estimate given at the time the plan was announced.


In January 2014, the Bull Group presented and launched the One Bull plan, which aims to position Bull as the trusted operator for enterprise data and to double EBIT margin to 7% by 2017.

Group results

Order intake rose 7.1% to EUR680.3 million, in the first half of 2014, taking the book-to-bill ratio to 116%. Success in the private cloud market and in the supercomputer field were the main drivers of this performance.

Revenues totalled EUR585.4 million, down 2.6% at constant exchange rates and down 3.4% at current exchange rates, with contrasting trends in different business areas. Weak investment in traditional IT infrastructure hit the Data Infrastructure business, whilst successes in cloud computing, which enjoyed double-digit growth, pushed Data Management revenues higher.

Gross margin was 140 basis points higher in the first half of 2014, at 21.5% of revenues. All Group business activities contributed to this improvement. The efforts made as part of the One Bull strategic plan helped bring about the start of a sequential reduction in fixed costs, which were lower at the end of the half than at the beginning. Moreover, after correction for favourable one-off of 2013, operating costs were lower in the first half of 2014. This illustrates the fact that the fixed cost structure also improved year-on-year.

EBIT thus rose by EUR3.0 million over the first half of the year, to EUR14.4 million, with EBIT margin improving by 60 basis points.

Restructuring costs recognised on the Group’s income statement to 30 June 2014 came to EUR62.1 million. This amount consists of EUR56.9 million of costs relating to the “One Bull” plan, including EUR7.8 million of costs incurred in the first half and EUR49.1 million in provisions against other costs of the plan. Total costs relating to the One Bull plan are in line with the estimates provided at the launch of the plan in January 2014.

The charge for amortisation of intangible assets relating to acquisitions was EUR1.1 million. Income from disposals and other operating income and expenses represented an expense of EUR1.7 million in the first half of 2014, including EUR2 million in the partial amortisation of some goodwill. Income from associates produced a loss of EUR1.8 million, mainly arising from the Group’s share in the results recorded by Numergy, whose initial investment phase is still in progress. Net financial expense came to EUR4.2 million, including a charge of EUR2.6 million for adjustments to retirement benefit liabilities. The tax charge, which included the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE) tax in France, was EUR3.8 million.

Net profit attributable to the Group was negative in the amount of EUR60.4 million, in the first half, compared to a loss of EUR5.5 million in the year earlier period, reflecting the inclusion of the costs of the One Bull 2014-2017 plan in first half figures.

Cash flow and balance sheet

Operating cash flow (see Appendix 2) was negative, as always at this time of year, but the outflow was significantly reduced, from EUR108.4 million in the first half of 2013 to EUR74.6 million this time around. This good performance was due to better management of working capital requirements. The total cash outflow during the first half of 2014 amounted to EUR94.0 million. As in previous years, net cash displayed a high level of seasonal fluctuation, and stood at EUR118.6 million at 30 June 2014. Gross cash meanwhile was EUR213.1 million at 30 June 2014.

Segment information

Data Infrastructure:

This segment covers activities dedicated to the modernisation of enterprise data storage and processing infrastructure. It brings together design, deployment and maintenance of infrastructure, data centres, servers and high-performance appliances together with supercomputers.

In the first half, order intake in the Data Infrastructure business rose 5.9% to EUR297.2 million. This good performance was driven by successes in supercomputers (HPC), particularly at DKRZ, the German meteorological service’s computing centre.

Revenues in the first half of 2014 were EUR262.4 million, compared to EUR291.7 million in the same period of 2013. Weak levels of investment in traditional IT infrastructure, particularly in France and Western Europe, was the main reason for this change. In addition, the actively selective approach to dilutive business identified under the One Bull plan accentuated this phenomenon, resulting in a 10.0% drop in revenues over the period. Under these weak market conditions, the strong growth recorded in supercomputers and high-performance Bullion servers was particularly remarkable.

Strict cost control on customer data centre construction projects coupled with a gradual withdrawal from non-strategic and dilutive product and service offerings under the One Bull plan helped improve gross margin by 170 basis points over the first half. This strategy, combined with work on the structure of fixed costs, not only helped limit the drop in the segment’s profit contribution to less than EUR1 million, but also produced a 50 basis point increase in profit margin, to 8.3%.

Data Management:

This segment covers service activities in the use of enterprise data. It includes systems and applications integration and security solutions as well as private cloud management services.

In the first half, order intake in the Data Management sector rose 8.0% to EUR383.2 million. This dynamic growth was driven by orders relating to private cloud operations and systems integration.

Revenues were 2.7% higher at EUR322.9 million. Private cloud services saw double-digit growth, whilst there was a slight decline in systems integration and security revenues over the period.

Gross margin rose by 160 basis points, driven by improvements in all three divisions. Operating costs rose by EUR1.1 million, but were stable as a percentage of revenues. Thus the profit contribution margin also rose by 160 basis points, with the contribution itself EUR5.4 million higher.

Second-quarter 2014 (unaudited data)

Unlike in 2013, the second quarter of 2014 did not see a significant making up of lost ground in the infrastructure segment in the first quarter, with the result that revenues in infrastructure were down 6.4%. However, order intake was 2.3% higher over the quarter, most notably due to a recovery in systems integration services.


On 20 January 2014, Bull presented “One Bull”, its strategic plan for the period from 2014 to 2017, under which the Group aims to doubt EBIT margin to 7% by 2017 and become the trusted operator for enterprise data. The One Bull plan has three action areas: a refocusing of business activities on the areas of the Cloud and Big Data, efficiency improvements and an overhaul of enterprise wide agreements.

On 26 May 2014, Atos, an international information technology services company, and Bull, trusted partner for enterprise data, presented their friendly combination project, a deal that would create the #1 player in Cloud operations in Europe and a leader in Big Data and security. Atos has submitted a formal bid for all of the Bull shares in issue and in circulation together with the Bull Group’s OCEANE bonds.

Bull’s Board of Directors gave its unanimous support to the bid and recommended that shareholders and holders of the OCEANE bonds accept the offer.

This offer is made only in France and participation in the offer may be subject to legal restrictions outside France. The bid prospectus was approved by the French Financial Markets Authority (Autorité des Marchés Financiers, or AMF) on 24 June 2014:

  • The offer price is EUR4.90 for each Bull share and EUR5.55 including coupons for each Bull OCEANE bond;
  • The offer opened on 27 June 2014 and will run until 31 July 2014 inclusive.

The next steps of this combination project include:

  • July 31, 2014: Closing of the Offer period
  • August 11, 2014: Publication by the AMF of the notice of the result of the Offer
  • August 18, 2014: Settlement and delivery of shares

Cloud Computing

As announced under the One Bull plan, the Group is continuing to expand its activities in Cloud Computing and has received approval from the French Ministry for Health and Social Affairs as a Personal Health Data Hosting Provider for its Le Cloud by Bull — Health Edition offering. This approval will also allow Bull to establish itself as an operator of services for tele-medicine and the archiving and sharing of medical images. Bull will offer these highly secure services under a SaaS model and will help support the healthcare professions as their new requirements in tele-medicine evolve. Le Cloud by Bull — Health Edition is part of a business model that adapts to client needs through a pay-as-you go pricing approach (press release of 24/03/2014).

Big Data

In line with the One Bull plan, the Group is developing appliances to help organisations meet the challenges of Big Data and has launched “bullionDB”, an appliance designed to modernise databases, which are coming under increasing pressure from the growth in data volumes (13/02/2014). Still in the field of Big Data, Bull is investing to be able to offer organisations full solutions in the area of the Internet of Objects (M2M). Thus the Group will be involved in the development of intelligent cities in China under an agreement with the well-respected Chinese company IZP Technologies. Bull was chosen for its experience in “Smart Cities” with projects covering environmental management, management of water supply and intelligent transport. These services are built on technological platforms which combine real-time analysis and value extraction from Big Data and the use of intelligent connected objects (27/03/2014). Lastly, as an example of the clear fit between HPC and Big Data, Bull has supplied the National Genome Analysis Centre in Barcelona with a supercomputer with 2.7 petabytes of storage. Genome research generates huge quantities of data which require correspondingly large computing and storage capacity, for which Bull’s HPC offerings are the ideal solution. The use of high-performance computing is allowing genomics to progress at a pace that opens up the possibility of personalised medicine. At stake is better healthcare and better quality of life (25/06/2014).


As the European leader in high-performance computing (HPC), Bull has supplied the Polish National Nuclear Research Centre with the country’s largest supercomputer. The infrastructure designed by Bull will be cooled by the most energy efficient system in the world, which works with hot water. This technology will allow the Swierk computing centre to save EUR120,000 per year (18/03/2014). Having supplied Météo France in 2013, Bull is now cooperating with DKRZ (Deutsche Klimarechenzentrum), the German climate research centre, in the area of modelling for climate research. An initial EUR26 million contract to supply a petaflops-scale computer covers the supply of the computing and storage systems (12/05/2014). Under the DKRZ contract, Bull has also signed a partnership agreement with Xyratex, one of the leading suppliers of data technologies, for solutions combining bullx and ClusterStor, which will offer 20 times the power and energy efficiency to HPC clients around the world (26/06/2014). In Japan, as part of the international research effort on controlled nuclear fusion (ITER project), the Helios supercomputer designed and operated by Bull has had its processing power increased to 2 petaflops, making it one of the most powerful supercomputers in the world (12/03/2014). Lastly, GENCI (the National Intensive Computing Centre) has followed on from its CURIE supercomputer and once again turned to Bull for its new machine, named OCCIGEN, which has been installed at CINES (Centre Informatique National de l’Enseignement Supérieur), one of the three national computing centres. With 2.1 petaflops of processing power, OCCIGEN is France’s most powerful supercomputer dedicated to research, and can carry out more than two million billion operations per second, giving researchers the resources to perform a variety of intensive calculations and thus supporting the competitiveness of French research (24/06/2014).

About Bull

Bull is the trusted operator for enterprise data. It provides cloud and big data services, as well as integrating and managing high-performance systems and end-to-end security solutions. Bull helps its clients to process all information at their disposal and use it in new ways. Bull transforms organisations’ data into value, in a fully secure manner.

Source: Bull

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