BOURBON: 1st Quarter 2018 Financial information

Marseilles, May 3, 2018

BOURBON 1^st Quarter 2018 financial information

Adjusted revenue for the 1^st quarter 2018 amounted to €171 million (consolidated revenue was €157.6 million), down 13.2% compared to the 4^th quarter 2017, impacted by the reduced activity in Subsea Services

• The 1^st quarter 2018 reflected a challenging Offshore services market, mainly impacted by deteriorated conditions in Subsea and Shallow water offshore. However, average utilization rates in Marine & Logistics improved, in particular in Deepwater offshore (+3.9 points compared to the 4^th quarter 2017 and +4.2 points compared to the 1^st quarter 2017).
• Although still affected by the overcapacity in Supply vessels, average daily rates stabilized.
• In the Subsea activity, business remained weak for vessels servicing contractors' construction work, leading to a sharp decline in average utilization rates (-17.7 points compared to the 4^th quarter 2017).  
• Weakening of the US dollar against euro weighed on this quarter revenue.

"In an Offshore services market that has been impacted over the long-term by vessel overcapacity, utilization rates in both Deepwater offshore and Shallow water offshore are now heading in the right direction and prices stabilizing. The Subsea business is being hampered by the weakness in the contractors' activity and a reduced number of turnkey projects", declared Gaël Bodénès, Chief Executive Officer of BOURBON Corporation. "The rollout of our strategic action plan#BOURBONINMOTION is underway and we are thus positioning ourselves optimally to benefit from the market upturn under the best competitive conditions."

(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. Furthermore, internal reporting (and again the adjusted financial information) does not take into account IAS 29 (Financial Reporting in Hyperinflationary Economies), applicable for the first time in 2017 (retroactively from January,1) to an operational joint venture in Angola.

BOURBON MARINE & logisctics

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

Adjusted revenue in the Marine & Logistics business fell by 7.7% compared to the 4^th quarter 2017, chiefly impacted by the dollar's weakening. At constant rates, the decline is contained at -0.7%.  

Although continuing to be affected by vessel overcapacity, daily rates remain low but are stabilizing. In Shallow water offshore in particular, these rates are not facilitating the recommissioning of vessels.

Average utilization rate remain stable in this market (+0.8 points compared to the previous quarter). In Deepwater offshore, average utilization rates have increased by nearly 4 points compared to the previous quarter, driven by the resumption of drilling activities and the recovery of the Asian market.

BOURBON MOBILITY

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

Adjusted revenue for the 1^st quarter fell 5.5% compared to the previous quarter, significantly impacted by the dollar's drop (-0.2% at constant rates). Average utilization rate (54.4 %) keeps resisting compared to the previous quarter, reflecting a market that seems to stabilize.

Average daily rates held up well, showing a steady rise since the 1^st quarter 2017, sign of a mix effect of the reactivation of large "Crewliner"-type vessels (long-distance transport) and FSIVs. This resistance in prices also reveals a rise in demand for "Crewliner"-type vessels and recovery in the "spot" market for "interfield" vessels (daily transport of equipment and personnel between fields). The decline in the use of helicopters seems to be confirmed.

BOURBON Subsea Services

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

This 1^st quarter 2018 remains marked by the weakness in activity for vessels servicing contractors' construction work, which could last throughout the year.

New contracts in West Africa have been slow to get off the ground, leading to a 17.7 points decrease in the average utilization rate compared to the previous quarter. Recovery in the Asian market has been sluggish, but should prove more dynamic in the 2^nd quarter, as for the Middle East.

Turnkey projects activity is still low this quarter compared to the 1^st quarter 2017, also affecting revenue.

Other

Activities included are those that do not fit into either Marine & Logistics, Mobility or Subsea Services. The majority of the total represents earnings from miscellaneous ship management activities.

OUTLOOK

While investments notably in onshore projects clearly seem to have resumed, investment growth in the offshore sector is expected to be very gradual in 2019. Prices will be held down by vessel overcapacity in the PSV and AHTS segments.  

Clients now concentrate on short term and quick Return on investment's projects but launch exploration campaigns to renew their reserve and therefore face the growing demand.

In this context, BOURBON concentrates its efforts on cash preservation and costs reduction.  

In order to benefit from the announced upturn, BOURBON deploys its action plan #BOURBONINMOTION to steer its business model towards more integrated services, capitalize on digital revolution to connect its fleet and make its new organization more agile and decentralized.

MAJOR EVENTS AND OPERATIONS

BOURBON has initiated discussions with its main financial partners, both in France and abroad, in order to balance the servicing of its debt with the expected gradual market recovery and the corresponding upturn in the group's performance. As a consequence, a general waiver should be finalized with BOURBON's leasers and debt holders in order to allow the group to withhold all payments.
In this context, the group has suspended servicing both its leases and debt commitments, during the negotiation period. This allows BOURBON to focus on its operational priorities and market turnaround and should encourage all parties to make negotiations as short as possible.

The general meeting of the Bondholders held on April 20 has authorized BOURBON to postpone this interest payment for an approximate amount of €3.9 million by one year (payment initially due on April 24, 2018).

The company is confident in its ability to find before year end a balanced solution with all its lenders - often long-standing partners - that suits all parties and allows the company to adapt its financing to its future development.

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 in operation

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).

Breakdown of BOURBON adjusted revenues by geographical region

Other key indicators

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 8,400 skilled employees. Through its 29 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 three operating activities (Marine & Logistics, Mobility and Subsea Services) and also protects the French coastline for the French Navy.

In 2017, BOURBON'S revenue came to €860.6 million and the company operated a fleet of 508 vessels.

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

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