BOURBON Presentation to shareholders September 25, 2015 DISCLAIMER - - PowerPoint PPT Presentation

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BOURBON Presentation to shareholders September 25, 2015 DISCLAIMER - - PowerPoint PPT Presentation

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BOURBON Presentation to shareholders September 25, 2015 DISCLAIMER This document may contain information other than historical information, which constitutes estimated, provisional data concerning the financial position, results and strategy of

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Presentation to shareholders September 25, 2015

BOURBON

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SLIDE 2

DISCLAIMER

This document may contain information other than historical information, which constitutes estimated, provisional data concerning the financial position, results and strategy of BOURBON. These projections are based on assumptions that may prove to be incorrect and depend on risk factors including, but not limited to: foreign exchange fluctuations, fluctuations in oil and natural gas prices, changes in oil companies investment policies in the exploration and production sector, the growth in competing fleets, which saturates the market, the impossibility of predicting specific client demands, political instability in certain activity zones, ecological considerations and general economic conditions. BOURBON assumes no liability for updating the provisional information based on new information in light

  • f future events or any other reason.

2 Meeting September 25, 2015

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BOURBON IS INFLUENCED BY OIL PRICES

  • Oil price is above all a policy price
  • Oil revenues are key for balancing budgets of the largest producers
  • The decline in output from existing fields will make a recovery in investment

unavoidable

  • Shale oil production is here to stay but has little influence on the rise in prices
  • The forecasts are unreliable given the very strong differences observed

Meeting September 25, 2015 3

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_Oil price is above all a policy price

BOURBON IS INFLUENCED BY OIL PRICES

20 40 60 80 100 120 140

1987 1992 1996 2000 2004 2008 2012 2015 Iraqi invasion of Kuwait Reducing quotas OPEC OPEC production cuts Financial crisis Attack 09/11

Source : IEA

Meeting September 25, 2015 4

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SLIDE 5

Meeting September 25, 2015 5

_Oil revenues are key for balancing budgets of the largest producers

BOURBON IS INFLUENCED BY OIL PRICES

Source : IMF, Deutsche Bank

Breakeven point for producing countries ($/bbl)

Source : Rydstad Energy

Breakeven point for production ($/bbl)

Onshore Middle East Onshore Row Offshore Shelf Deepwater Onshore Russia Extra Heavy oil NAM Shale Artic Oil Sands

Bra

Ultra Deepwater

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SLIDE 6

Meeting September 25, 2015 6

_The decline in output from existing fields will make a recovery in investment unavoidable : Shale oil

production is here to stay but has little influence on the rise in prices

BOURBON IS INFLUENCED BY OIL PRICES

Source: Les Echos, AIE Source: Présentation Schlumberger

US shale oil production

In millions of barrels/day IEA predicts production to decline 400,000 barrels/day next year

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Meeting September 25, 2015 7

_ The forecasts are unreliable given the very strong differences observed

BOURBON IS INFLUENCED BY OIL PRICES

Source: Douglas Westwood

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Meeting September 25, 2015 8

BOURBON IN A BOTTOM OF CYCLE

  • BOURBON has the greatest resistance capacity to adverse market conditions

in relation to its competitors

  • BOURBON continue to focus on what he can control: operational excellence

and costs reduction

  • The relative change of BOURBON’s share price remains favorable, despite a

drop of 50% in one year

  • BOURBON maintains its objectives:

› a stable and growing dividend › debt ratios maintained at satisfactory levels

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SLIDE 9

BOURBON RESILIENCE FACTORS

Operational resilience factors Local partners and Diversified client base Operational excellence Relative utilization rate Diversification by business segment

Meeting September 25, 2015 9

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Meeting September 25, 2015 10

_Safety performance

OPERATIONAL RESILIENCE FACTORS

TRIR Objective per year TRIR: total recordable incidents per one million hours worked, based on 24h/day LTIR: total recordable accidents with work stoppage per one million hours worked, based on 24h/day 10 0,69

0,76

2,21 2,28 1,12 0,65 0,64 0,68 0,69 0,48 0,76 0,69 0,6 1,14 0,22 0,07 0,05 0,1 0,1 0,07 0,1

0,5 1 1,5 2 2,5

2006 2007 2008 2009 2010 2011 2012 2013 2014 30/06/2015 0,48

2,00

0,64

0,64

0,68 0,69 0,76

0,69

0,60 1,00 0,75 0,70 0,67

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SLIDE 11

11

93% 94.3% 94.5% 95.5% 96.4% 93.5% 95%

90% 91% 92% 93% 94% 95% 96% 97%

2011 2012 2013 2014 H1 2015

Technical availabilityrate for BOURBON fleet

Technical availability rate

  • bjective

OPERATIONAL RESILIENCE FACTORS

Meeting September 25, 2015

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Meeting September 25, 2015 12

_Diversification of types of business

OPERATIONAL RESILIENCE FACTORS

59% 4% 23% 14% 30% 32% 21% 17%

2014 2006

Mari Marine ne serv service ices (83 (83%) Mari Marine ne serv service ices (86 (86%)

Deep water vessels Shallow water vessels Crewboarts IMR

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Meeting September 25, 2015 13

OPERATIONAL RESILIENCE FACTORS

_Relative supply vessel utilization rates/ focus on BOURBON

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Meeting September 25, 2015 14

_BOURBON client portfolio diversification

OPERATIONAL RESILIENCE FACTORS

33,6% 13,3% 6,6% 4,6% 4,4% 3,9% 2,9% 2,6% 2,5% 2,4% 23,2% OTHERS ENI CHEVRON MARINE NATIONALE STATOIL PETROBRAS BP NORSK HYDRO SHELL EXXON TOTAL 19,0% 8,0% 7,0% 6,0% 6,0% 4,0% 4,0% 3,0% 2,0% 2,0% 39,0% OTHERS MARINE NATIONALE MAERSK SAIPEM PETROBRAS PERENCO PEMEX BP EXXON CHEVRON TOTAL

2014 2006

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SLIDE 15

JV Project JV Affiliates

15

_A unique partner network

OPERATIONAL RESILIENCE FACTORS

Meeting September 25, 2015

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BOURBON RESILIENCE FACTORS

Financial resilience factors « a stable family shareholder base» Value of $ and low interest rate Maturity of business model and free cash flow Amount of net debt Financial discipline

Meeting September 25, 2015 16

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Meeting September 25, 2015 17

_Maturity of business model

FINANCIAL RESILIENCE FACTORS

  • 800
  • 400

400 800

* Free Cash flow : Cash flows linked to operating activities – outflows linked to purchases of property, plant and equipment and intangible assets + inflows linked to disposals of property, plant and equipment and intangible assets

M€

  • 800
  • 400

400 800 2007 2008 2009 2010 2011 2012 2013 2014 E 2015 E 2016 vessel investments cash received sale & leaseback net investments

Asset smart Strategy

Net investment (vessels only) Free cash flow*

M€

JACCAR estimate January 2015

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Meeting September 25, 2015 18

_Net Debt

FINANCIAL RESILIENCE FACTORS

500 1000 1500 2000 2500

june 06 dec 06 june 07 dec 07 june 08 dec 08 june 09 dec 09 june 10 dec 10 june 11 dec 11 june 12 dec 12 june 13 dec 13 june 14 dec 14 e 2015 e 2016

M€

JACCAR estimate January 2015

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Meeting September 25, 2015 19

_Financial discipline

FINANCIAL RESILIENCE FACTORS

BOURBON ratios 2006 June 2013 2014 Objective Net Debt / Equity 0.89 1.56 0.8 < 0.5 Net Debt / adjusted EBITDA 1.83 4.96 3.0 < 2 Rent / adjusted EBITDAR

  • 22 %

30 %

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Meeting September 25, 2015 20

_External factors : exchange rates & interest rates

FINANCIAL RESILIENCE FACTORS

1 2 3 4 5 6 1 1,2 1,4 1,6

2006 2007 2008 2009 2010 2011 2012 2013 2014 e 2015 e 2016

EUR/US$ Euribor 3M

JACCAR estimate, January 2015

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BOURBON RESILIENCE FACTORS

21 Meeting September 25, 2015

Safety Utilization rate Balanced revenues from market segments Diversified customer base Net Debt/FCF generation Debt Orderbook /EBITDA External Factors - USD

BOURBON BOURBON vs competitors Tidewater Gulfmark Farstad

Source: public data, BOURBON estimates

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Meeting September 25, 2015 22

BOURBON VS THE MARKET ENVIRONMENT

Source : Pareto, IHSPetrodata, Farstad

Drop in OSV utilization rate Number of stacked vessels increasing

Utilization rate Supply vessels (average June 2015) BOURBON Tidewater GulfMark Hornbeck 81.9% 68.8% 65-70% 60.5% AHTS+PSV (July 2015) BOURBON Tidewater GulfMark Hornbeck Farstad # stacked vessels 23 54 16 18 6 % of fleet 10% 21% 22% 36% 11%

Source : IHSPetrodata, Bourbon, Sec filings

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Meeting September 25, 2015 23

_One year Stock performance - BOURBON vs competitors

BOURBON’S RESILIENCE RECOGNIZED BY THE MARKET

20 40 60 80 100 120 sept.-14

  • ct.-14

nov.-14 déc.-14 janv.-15 févr.-15 mars-15 avr.-15 mai-15 juin-15 juil.-15 août-15 sept.-15

Bourbon Tidewater Gulfmark Farstad

Base 100

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Meeting September 25, 2015 24

_The ability of a company to pay a dividend based on:

BOURBON: OUTLOOK ?

  • Corporate accounts. Those of BOURBON have a distributable balance of €615 million at the

beginning of 2015, nearly nine years of dividends

  • The projected cash flow, excluding sales of vessels in future years. The generation of free cash

flow shows that BOURBON has the necessary cash after taking into account its commitments (investments, loan repayments, financial expenses, taxes, ...)

  • A good level of activity: the breakeven of BOURBON is well below the values required for the

cash breakeven even at low part of cycle

  • The objective of a stable or slightly increasing dividend is very much within reach of BOURBON
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Meeting September 25, 2015 25

BOURBON:THE DIVIDEND POLICY HAS ALWAYS BEEN RESPECTED

10 20 30 40 50 60 70 80

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

+ exceptional dividend M€

Annual amount of dividends paid

X 5.2 + 18 % per year 13.8 71.6

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Meeting September 25, 2015 26

BOURBON: OUTLOOK ?

BOURBON confirms its debt reduction policy and free cash flow generation due to :

  • From a high level of EBITDA after rent payments, which reflects customer confidence

(utilization rate) and cost control (proactive stacking of vessels, reduction of G&A)

  • A strong reduction in vessel investment, an average of 450 million for the last 8 years,

to:

  • 85 million in 2016
  • 50 million in 2017
  • Opportunity for vessel sales, with or without long term bareboat charter, to achieve the

debt objectives as soon as possible:

  • 0.5 debt ratio (Net debt/Equity)
  • 2 x EBITDA
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Meeting September 25, 2015 27

_ BOURBON shareholders want a regular dividend growth, and when they have to sell, a price that

reflects the economic value of the company: can the stock market play this role?

BOURBON : GROWTH & YIELD GO TOGETHER?

  • 500

1 000 1 500 2 000 2 500 3 000 M€

Market capitalization of BOURBON

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Meeting September 25, 2015 28

CONCLUSION

  • BOURBON is well equipped to get through this low cycle of offshore markets

and will continue to strengthen its resilience capacity

  • In the short term, BOURBON
  • confirms its dividend policy
  • confirms its debt reduction objectives and financial structure for the future
  • Beyond this, BOURBON will have to choose between various possible

solutions to:

  • Strengthen the capacity of constant and significant growth of its dividend
  • Seek a valuation of the company inline, as much as possible, with its long-term

economic value, and a form of liquidity at that price