The Bull empire foregathered in Paris yesterday to pick over the entrails of the figures from its various constituents, and the most significant announcement by managing director Francis Lorentz was that despite having paid out substantial sums to take its stake in Bull HN Information Systems up to 65%, the company has cash for acquisitions, […]
The Bull empire foregathered in Paris yesterday to pick over the entrails of the figures from its various constituents, and the most significant announcement by managing director Francis Lorentz was that despite having paid out substantial sums to take its stake in Bull HN Information Systems up to 65%, the company has cash for acquisitions, and intends to use it to accelerate its growth – provided it can find suitable targets. Despite a rise in consolidated net profit of 35% to $49m for Groupe Bull, the holding company for the entire empire, the company is far from satisfied with its performance last year, and a commitment to do better this year was manifest. Consolidated group turnover was up 5.7% to $5,069m, and, perhaps the best news, turnover per employee rose 9% to a healthy $111,200m – not achieved without job cuts of course. Debt-to-equity ratio improved to 1.1 from 1.3 and investment in research and development rose 1.1% to $585m – a high 11.5% of total turnover. Breaking down the figures by product sector, mainframes were 30%, mid-range systems 30%, workstations and personal computers 14%, and even smaller systems, 11%. M Lorentz stressed the extent to which Groupe Bull is a truly international company – having done 63% of its business in France in 1982, it now does only 39% there, with the remaining 71% split 63% for Europe, 37% elsewhere. On the Bull SA front – that’s the company that takes in the domestic French and the continental operations, plus sundry small businesses in the Third World, profits were also $49m, and turnover rose 8% to $3,126m. Research and development expenditure rose 1.7% to $332m. On the operating front, business in France rose 7%, in the rest of the company’s territories, 9%. Sales to new customers were up a healthy 20%, and mainframes accounted for 20% of the total, personal computers, 19%. Italy, UK well up, US dismal Bull HN Information Systems, as we have to learn to call the old Honeywell Information Systems business had a pretty rotten year, with profits of just $500,000 on turnover up 7.1% at $2,204m but the profit figure was actually an improvement at the operating level – last year’s reported $17m was almost totally made up from gains on asset sales. Cash flow at the company, which has moved its headquarters to Billerica, Massachusetts from Minneapolis, Minnesota, improved, and investment was also up that new headquarters didn’t come cheap. Bull HN did particularly well in its two big European territories, with business up 31% in Italy and 17% here in the UK – making a 20% aggregate growth in non-US business. But in the US, sales were 6.7% down at $916m. Australia, Latin America and Africa each account for 2% of sales, and a big push for growth is planned for all three regions. There are still no plans to integrate the UK and Italian businesses with the rest of continental Europe, and they will continue to be run from the US indefinitely – although consolidation of product lines and procedures is likely to accelerate this year. Jacques Stern, as reported, wants to quit as chairman in June and is recommending that Francis Lorentz take his place. But M Stern is not cutting all ties with the company – he will sit on a committee being formed to plot long-term strategy for the group. The company looks for 6% growth this year – and it would be faster but for the dull US market – fuelled by a big push for Unix and more business done through resellers and distributors. As well as those 1,600 job cuts on the way at Bull HN, there will be 600 to 700 jobs eliminated at Bull SA this year, but 400 or so more people will be taken on at the skilled end of the spectrum.