Groupe Bull reduces loss but U.S., Europe sales fall

Electronic News, April 6, 1992

PARIS -- Groupe Bull last week recorded an improved bottom line, but noted a decline in European and American equipment sales.

The company, blaming the drop in volume on a recessionary world economy and an industry environment, said for the first time, European and American hardware sales decreased, on the order of four percent. For the 1991 year Bull grossed $5.94 billion worldwide, down 3 percent compared with 1990 volume of $6.13 billion.

Of Bull's 1991 revenues, 22 percent were generated in North America, 35 percent in France, 36 percent in other European countries and 7 percent elsewhere.

Consolidated losses came to $585.2 million during the most recent year compared with a $1.204 billion deficit in 1990.

Bull said the 1991 net included a gain of $119.6 million, reversing part of a restructuring charge.

Year-over-year operating margins in 1991 improved more than 50 percent over 1990 levels due to corporate restructuring, according to the company, which said its loss from operations amounted to $204.6 million in 1991 against $417.3 million in 1990.

"Thanks to Bull's deep transformation, we realized significant improvement of our 1991 results," said Francis Lorentz, chairman and chief executive. "We must redouble our efforts this year to adapt to a world market, still in crisis, and to reach profitability. During 1991,

Bull accelerated the restructuring of its distribution and services organization, saving $177.3 million in the cost of sales, general and administration.

In addition, Bull had reduced its worldwide work force by 9,000 by the end of 1991, a decline of 19 percent from the January, 1990, level.

The company also consolidated its financing on a worldwide basis through a $1.1 billion, three-year international credit facility, of which 75 percent has been subscribed by financial institutions outside France.

After a decade of organizational evolution, said Mr. Lorentz, the company finally achieved worldwide management and business integration. This included Bull's decision to take over Bull HN Information Systems Inc. by purchasing Honeywell Inc. shares and exchanging NEC's 15 percent equity stake in Bull HN into a 4.7 percent share of Groupe Bull.

Bull's systems integration business, which also includes its microcomputer subsidiary (Zenith Data System), has shown 40 percent growth in revenues.

Mr. Lorentz also noted that future results would benefit from the company's joint venture agreements.

Citing Bull's alliance with IBM, reinforced by a planned $100 million equity investment, the executive said this venture will enable Bull to extend its range of Unix-based products and to further improve its position in the Unix market, where Bull recorded a 40 percent growth -- about twice the market average. Currency translations were made at an exchange rate of 5.641FF to $1 U.S.