For the year ended December 31, 2006, Paris, France-based Bull posted a net loss of 17.1m euros ($22.4m), compared to a profit of 15.8m euros ($20.7m) in 2005, reflecting the impact of sale of Bull’s Italian operations and deferred tax assets, plus the acceleration of the Group’s restructuring aimed at positioning Bull more rapidly on a trajectory of profitable growth.

Sales meanwhile fell 2.3% to 1.15bn euros ($1.51bn) from 1.2bn euros ($1.54bn) a year ago, thanks to a decrease in products and maintenance activities.

The fourth quarter was marked by the sale of our Italian activities to Eunics SpA, said chairman and CEO Didier Lamouche. This initiative has enabled the Group to divest itself of a long-standing loss-making business, and to focus on its priority strategic targets.

Just before Christmas the company announced it had sold its Italian subsidiary, Bull Italia SpA, to Eunics SpA for an undisclosed sum. Prior to that in September 2006, it acquired internet infrastructure outsourcing and managed online services vendor Agarik SA for an undisclosed sum.

Agarik was the latest in a string of acquisitions announced by Bull over the past year in an attempt to revise its fortunes. It also snapped up the postal automation software business of Firstlogic and Selisa Software, a provider of video coding services. In April 2006, Bull paid an undisclosed sum for Human Resources Business Consulting, while in March it bought Polish systems integrator AMG.Net.

Last year Bull unveiled its Horizon 2008 plan after its promising financial performance in 2005. The key aspect of this new plan was to accelerate the growth of its services business to become the major source of the company’s revenues, to enhance operational efficiency in the business, and to reshape the profile of the company as a result.

This was not the first time that Bull was staking its future on IT services. Five years ago it sold its services business outside of France (Integris) to the French services outfit Steria SA.

Indeed, the plan seemed to have worked somewhat during 2006. For the past 12 months, revenue from services made up 31.4% of total group yearly revenues, at 359.7m euros ($473m) compared to 320.7m euros ($422m) in 2005.

But this did not translate into growth in Bull’s other main business areas, after annual revenues from product sales declined to 47.1% of total sales, at 539.6m euros ($709m) from 578.7m euros ($761m) in 2005. Likewise, revenues from maintenance fell to 21.6% of total revenues, at 247.3m euros ($325m) compared to 273.7m euros ($360m) in 2005.

Looking forward, Bull expects full 2007 EBIT to be in the range of 20m euros ($26m) to 24m euros ($32m), with the objective for the second half of the year being higher than for the first half. Bull said the key factors to achieve this target was to reduce the rate of decline in its maintenance business, to improve the margin in the services business, and to grow sales in the open servers market.