BOURBON: Financial information 3rd quarter and 9 months 2017

Paris, November 9, 2017

BOURBON Financial information 3^rd quarter and 9 months 2017

Revenue for the 3^rd quarter was down 12.7% (-9.2% at constant rates) compared to the 2^nd quarter of 2017, still impacted by sluggish activity and strong pressure on rates, despite a few positive signs

• In the Deepwater offshore and Shallow water offshore segments, customer willingness to launch exploration projects and renew medium and long-term contracts should be underlined. This is reflected in a slight increase in activity (average utilization rates up 2 points) although rates are still declining.
• The Crew boats segments remained resilient, impacted by the monsoon seasonality in West Africa.
• Revenue from the Subsea activity fell 23.1% compared to the 2^nd quarter of 2017, mainly impacted by a lower number of turnkey projects.

"Our customers have recovered some margin for maneuver but this is not yet reflected in Offshore activity. We believe that we have reached the low point of the cycle, however recovery will be slow. Our policy of operational excellence, cost control and cash preservation remains key in meeting the requirements of our customers," declares Gaël Bodénès, Chief Executive Officer of Bourbon Corporation.

"More than ever, BOURBON must transform in order to respond to this new cycle focused on operational excellence at optimum cost".

(a) Adjusted data:
The adjusted financial information is presented by activity and by segment based on the internal reporting system and shows internal segment information used by the principal operating decision maker to manage and measure the performance of BOURBON (IFRS 8). The internal reporting (and thus the adjusted financial information) records the performance of operational joint ventures on which the group has joint control using the full integration method. Adjusted comparative figures are restated accordingly.

MARINE SERVICES

        * Vessels operated by BOURBON (including vessels owned or on bareboat charter).

The Marine Services business recorded an 8.1% decrease in its adjusted revenues compared to the 2^nd quarter of 2017, mainly impacted by the renewal of the last long-term contracts at new market rates in the Deepwater offshore segment and seasonal trends in the Crew boats activity. Utilization rates improved compared with the previous quarter in Deepwater offshore and Shallow water offshore but pressure on daily rates remains strong, mainly due to the vessel overcapacity in these 2 segments.

Marine Services: Deepwater offshore vessels

* Vessels operated by BOURBON (including vessels owned or on bareboat charter).

Adjusted revenues for the Deepwater offshore segment were mainly impacted by lower average daily rates and the end of contracts for several vessels in West Africa. The recovery of drilling activity was nevertheless confirmed, with stable average utilization rates over 3 quarters. 

Marine Services: Shallow water offshore vessels

* Vessels operated by BOURBON (including vessels owned or on bareboat charter).

In Shallow water offshore, utilization rates were slightly up, as they have been since the 1^st quarter of 2017. Several vessels were reactivated during the quarter in order to serve medium and long-term contracts. However, as daily rates continued to be driven downward, adjusted revenues showed a 3.4% quarter on quarter reduction.

Marine Services: Crew boat vessels

Adjusted revenues for the Crew boats segment were down 6.5% compared with the 2^nd quarter of 2017, impacted by a seasonal slowdown in activity, the renewal of several contracts at lower daily rates and movements of FSIV (Fast Support Intervention Vessels) between different regions to meet new contracts beginning at the end of this quarter.
Overall segment activity was stable with slightly lower utilization rates (-1.3%) compared with the 2^nd quarter of 2017 and price levels up since the 1^st quarter of 2017. Demand remains strong for large Crew boats, representing an economic alternative to helicopter transportation.

Subsea Services

        * Vessels operated by BOURBON (including vessels owned or on bareboat charter).

Adjusted revenues for the Subsea Services activity were down 23.1% compared with the 2^nd quarter of 2017, mainly impacted by a lower number of turnkey projects and the slowdown in contractors' activity. Utilization rates remained stable overall in a very competitive environment reflected in the level of daily rates. The IMR (Inspection, Maintenance & Repair) business remained stable.

BOURBON Subsea Services continues to pursue its diversification strategy with its partners in regions of operation, such as the Persian Gulf, Asia, West Africa and Central America.

Other

Activities included are those that do not fit into either Marine Services or Subsea Services. For the most part, they correspond to the results of various ship management and logistics activities and to the cement carrier Endeavor, which was sold in July 2017.

OUTLOOK

The improvement in the oil companies' financial positions has not yet been reflected in a generalized recovery of their investments and thus by an increase in the activity of our Offshore services market. Customers wish to continue to operate at optimum price levels in order to carry on sanctioning Offshore projects in competition with Onshore projects and shale oil in particular.

Recovery is expected to be slow and the Deepwater offshore and Shallow water offshore segments will continue to be affected by vessel overcapacity throughout 2018 in all geographical regions, although some signs of improvement will be seen at local level. Utilization rates should continue to resist in the Crew boats and Subsea segments.

Facing this "new normal", BOURBON must pursue the radical change of its business model and its efforts to streamline operations, reduce costs and preserve cash. To meet the competitiveness needs of our Offshore business and the new requirements of our customers, we have to respond to the down cycle that is metamorphosing the face of our industry and offer modern vessels, teams capable of providing service excellence, as well as new innovative and efficient ways of operating.

ADDITIONAL INFORMATION

BOURBON's results will continue to be influenced by the €/US$ exchange rate.

FINANCIAL CALENDAR

APPENDIX

Quarterly adjusted revenue breakdown

   * Effect of consolidation of joint ventures using the equity method.

Quarterly average utilization rates for the offshore fleet

Quarterly average daily rates for the offshore fleet

Quarterly number of vessels (end of period)

        * Vessels operated by BOURBON (including vessels owned or on bareboat charter).

Nine month average utilization rates for the offshore fleet

Nine month average daily rates for the offshore fleet

Breakdown of adjusted revenues by geographical region

Other key indicators

Quarterly breakdown

Nine month breakdown

About BOURBON

Among the market leaders in marine services for offshore oil & gas, BOURBON offers the most demanding oil & gas companies a wide range of marine services, both surface and sub-surface, for offshore oil & gas fields and wind farms. These extensive services rely on a broad range of the latest-generation vessels and the expertise of almost 9,300 skilled employees. Through its 37 operating subsidiaries the group provides local services as close as possible to customers and their operations throughout the world, of the highest standards of service and safety.

BOURBON provides two operating activities (Marine Services and Subsea Services) and also protects the French coastline for the French Navy.

In 2016, BOURBON'S revenue came to €1,102.6 million and the company operated a fleet of 514 vessels.

Placed by ICB (Industry Classification Benchmark) in the "Oil Services" sector, BOURBON is listed on the Euronext Paris, Compartment B.

Contacts