Provisional results for the first six months of 2006

Paris , 27 July 2006:

•  Significant growth in order intake during first six months of 2006: up by 21%, with a 55% increase in the Services business

•  Slight decline of -2.2% in overall revenues, with 9% growth in the Services activities

•  Noticeable slowdown in rate of decline of revenues from Maintenance business in Q2

•  Operating losses in Italy in line with the financial announcement made on 13 June 2006

•  Group EBIT * for first half of 2006 expected to be in excess of €8 million

•  Net cash standing at €213 million as at 30 June 2006

•  Complete accounts for the first six months will be presented in October, following review of balance sheet items related to the company’s ‘Return to Better Fortune’ Clause (CRMF) and to deferred tax assets

•  Finalization and implementation of a series of actions over the coming weeks designed to improve the Group’s operational performance

•  The Group confirms its EBIT objectives for 2006 of between €13 million and €18 million

The Board of Bull, meeting on 26 July 2006 , acknowledged the following provisional, unaudited results for the first six months of 2006.

Commenting on these results, Didier Lamouche, Chairman and CEO of the Bull Group, said:

“ All Bull’s teams around the world are focused on implementing our strategy, as the increased order intake in our Services business demonstrates. We are all the more determined to immediately address the difficulties we are facing. The halting of the downward trend in our Maintenance business, which we need to confirm in the second half of 2006, clearly shows our ability to improve the Group’s fundamental performance .”

Significant growth in order intake

Order intake recorded during the first six months of 2006 was €439 million. This represents an overall increase of 21.3% compared with the first six months of 2005 and includes a 55.4% increase in orders recorded by the Services business, confirming Bull’s strengthening position in this area.

When the effect of the major services contracts announced in recent months with the French Post Office and Barnsley Metropolitan Borough Council in the UK is taken out of the equation, the growth in orders in the Services business remains 21%.

As a result of this, the order backlog stood at €448 million at 30 June 2006 , an increase of 24% compared with 30 June 2005 . In particular, the backlog of orders to be recognized in revenues beyond twelve months increased by 76%.

Slight decline in revenues

Group revenues were €559.2 million in the first six months of 2006, representing a fall of 2.2% compared with the first half of 2005. This slight decline is due mainly to the negative effect of the Italian business and to a lesser extent to the slowdown in the Products business (UNIX® servers):

•  Revenues from the Products business were €264.8 million, representing a decline of 3.7% compared with the first six months of 2005, mainly due to a less dynamic global market than in the equivalent period in 2005, resulting in an unfavorable basis for comparison since in the first half of 2005 a growth rate of 11% was recorded.

•  In an increasingly tight marketplace, the slowdown in the open UNIX®/Escala area of the Products business was confirmed in Q2, as anticipated in our announcement on 13 June 2006 . This trend is particularly noticeable in Europe , however a good level of orders was recorded in France in the first six months. It is notable that excluding Italy , revenues from this business area were virtually stable (see table below).

•  The Services business continued to grow, recording revenues of €170.7 million: a growth rate of 9.0% in a market that remains well on track despite slightly slower growth in Q2.

•  The Maintenance business achieved a notable slowdown in its rate of decline during Q2 2006, and eventually recorded revenues of €123.7 million for the entire first six months of 2006, 11.7% lower than the first six months of 2005 (and 9.7% lower in Q2).

Breakdown of activities by geographic region shows a continued high growth rate in Latin America (+65%) and Eastern Europe (+34%), as well as in the Telecoms business (+38%).

The acquisitions made in the first half of 2006 – AMG.net, HRBC and Selisa Software (see below) – had a negligible impact on revenues for the period.

The impact of the significant slowdown in the Italian business, outlined in the announcement on 13 June 2006 , is illustrated in the following table:

Operating performance

EBIT for the first six months of 2006 is expected to be in excess of €8 million.

The definitive full accounts will be presented in October 2006, following a review of balance sheet items relating to the Group’s CRMF clause (the ‘Return to Better Fortune’ clause in favor of the French State, with an accrual of €54 million on 31 December 2005) and the effect of deferred tax assets (which stood at €51 million at 31 December 2005).

Financial structure

Net cash flow from operations was €2.7 million, while non-recurring items resulted in a net cash-out of €23.9 million, mainly related to payments for acquisitions made during the first six months of 2006, as well as to restructuring charges.

At 30 June 2006 gross cash stood at €296 million, while net cash was €213 million.

Italy

As indicated in the announcement of 13 June 2006 , orders recorded during the first half of 2006 were 50% lower than during the same period in 2005. Revenues were €34 million in the first six months of 2006, a fall of 28% compared to the first six months of 2005. First half 2006 EBIT is in line with the trading statement issued on June 13 with a full year 2006 expected EBIT of €-18 million.

A new management team (Managing Director, Sales Director and Financial Director) is in place, as of July 2006. The restructuring program completed in May should bear fruit in the second half of 2006, with the number of employees having been reduced from 585 at 31 December 2005 to 447 at 30 June 2006 .

In parallel, the sales force has been refocused in line with Bull’s overall commercial priorities, in order to concentrate on a range of offerings in three of the Group’s seven strategic targets for growth: High-Performance Computing (HPC), telecoms and storage solutions.

Highlights for the first half of 2006

In the servers business , Bull focused its development on the design and production of high-end open servers for IT infrastructures. This strategy was reflected in two major launches relating to two currently available product lines:

•  The second generation of the NovaScale server family – designed to enhance the flexibility and ease of implementation of infrastructures – supplemented in June 2006 with the announcement of the new R600 and T800 models

•  Bull also extended its range of servers with the launch of the Bull NovaScale 3005 series dedicated to clustered applications in both scientific and business environments, and featuring the new Intel® Itanium® ‘Montecito’ processors.

The recent TOP500 listing of the world’s most powerful supercomputers confirmed Tera-10 – the system designed and implemented by Bull for the French Atomic Energy Authority (CEA) – as number one in Europe . Tera-10 is a cluster of 602 NovaScale servers. In the UK , t he National Oceanography Centre at Southampton (NOCS) has confirmed its trust in Bull by increasing the number of NovaScale servers that run its HPC applications.

Bull strengthened its commercial progress with OEM partnerships in China (with PowerLeader) and with Basis Bay for the NovaScale range in Malaysia and Thailand .

Bull also consolidated its commitment to Open Source with the opening of a second services center in Marseille, dedicated to open systems software and new technologies. Alongside this, Bull also announced the launch of Open Desktop™, its services offering dedicated to workstations in open environments, reflecting the company’s capabilities and ambition to promote the development of Open Source. Recognizing its expertise in Open Source, Bull has been chosen by health insurer CNAMTS to support its Open Source Linux distributions, as well as by Dassault Aviation for Linux Real-Time support.

In the services arena , the recently signed partnership between Bull and Barnsley Metropolitan Borough Council (BMBC) is a significant endorsement of Bull's decision to re-enter the IT managed services market in the UK . Bull and Barnsley’s partnership takes the form of a joint venture company that will manage BMBC's IT operations and proactively pitch for IT support contracts in the wider market. The contract is worth €110m over ten years with limited impact on the accounts for the first six months of 2006.

In order to expand its capabilities in its target areas, Bull acquired HRBC (Human Resources Business Consulting) during the first six months of 2006. HRBC is a French company specializing in information systems for Human Resources. The move reinforces Bull’s leading position in ERP integration, as well as its presence in the market for high added-value services such as consulting and systems integration.

Bull also recorded notable successes, particularly in Telecommunications , one of its key priorities for strategic development. The contract awarded to Bull by the Moroccan telecommunications operator Maroc Connect – which provides fixed and mobile services – for the implementation of its information system illustrates the Group’s expertise in telecoms and competitive offering. In the same sector, Bull acquired AMG.net, a Polish consulting and new technology company specializing in telecoms.

Bull’s international growth continued during the course of the first six months, most notably in Latin America. In Brazil, Bull was named company of the year in the ‘project consultancy for corporate services’ category by IDG (International Data Group). The award is part of IDG’s yearbook “ 100 Biggest in Corporate Services” , which analyzed over 200 companies to select the best ones .

Bull also recorded significant growth in the countries of Eastern and Central Europe . Poland chose Bull to help modernize 1,200 schools by connecting them to the Internet and equipping them with LAN networks, as part of a project jointly funded by the European Union. And in Bulgaria, Bull is modernizing the information systems for the country’s customs authorities to bring them in line with international standards. This means that eight of the ten most recent EU accession countries have chosen Bull’s Web-oriented customs solutions, based on industry standards, to ensure greater automation, control, interoperability and conformance to European standards.

As part of the Group’s moves to reposition itself as offering high added value systems integration for complex systems, Bull today announces the creation of a new worldwide business focusing on postal services, along with two acquisitions to extend its offerings:

•  The Software Department of Selisa – a subsidiary of Sofiposte – which specializes in video coding. This offering is a key element of the automatic address interpretation system project awarded by the French Post Office (La Poste) to Bull as part of its new mail sorting platforms, as well as being used as part of Coliposte’s parcel sorting system.

•  The postal software application development activities of First Logic Inc – a company recently acquired by Business Objects – for its automated address processing solutions that also form a core element of mail sorting systems. These activities were placed in a subsidiary, AddressVision Inc , which becomes part of Bull’s new line of business.

Group plan of action

Given the adverse trends encountered during the first six months of 2006, and in line with the commitments made on 13 June, the Group plans to finalize and implement a series of actions over the coming weeks designed to improve its operational performance:

1. In R&D, the systems and platforms capabilities will be integrated with the Products business, while the Open Source capabilities will be integrated with the Services business. The aim of this reorganization is to speed up the generation of new products and services, ensure that the Group’s penetration of markets for high added value offerings is sustained and encourage further synergies.

2. The sales organization will be restructured, with the creation in France of a common sales force for products and services, and the reorganization of the sales network under new management in the rest of Western Europe , excluding France , with the aim of stimulating product sales in countries where these are falling off. The aim is to maximize our commercial presence and our ability to penetrate new accounts.

3. Growth offerings will be aggressively marketed as a result of the establishment of dedicated sales forces in European countries, focusing on the strong technological base of these solutions (HPC, telecoms, storage). The Group’s solutions and services offering for taxation and customs authorities will be further focused, with the creation of a new global business unit.

4. Finally, the Group will focus on reducing its operating costs, and is already taking the following measures:

•  Salary freeze in France

•  Reduction in the remuneration packages for senior management

•  Launch of a reskilling program for a number of employees in France , with the aim of reducing sub-contracting costs in particular

•  Limit on recruitment only to immediately revenue-generating positions

•  In terms of purchasing, both the strategy and practices are currently being optimized by the new Director who joined the Group in May 2006.

The Group is examining further possible measures and these will be announced during the course of the second half of 2006.

Outlook

Bull confirms that its EBIT for the 2006 financial year, as restated on 13 June 2006 , is expected to be in the order of €13 million to €18 million.

* Earnings before interest and tax and other gains or losses

About Bull, Architect of an Open World™

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 100 countries worldwide.

For more information visit: http://www.bull.com

Press Contact

Anne Marie Jourdain – Tel : 01 30 80 32 52 - anne-marie.jourdain@bull.net