presentation to shareholders sept 2015
TRANSCRIPT
Presentation to shareholders September 25, 2015
BOURBON
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 arebased on assumptions that may prove to be incorrect and depend on risk factors including, but not limitedto: foreign exchange fluctuations, fluctuations in oil and natural gas prices, changes in oil companiesinvestment policies in the exploration and production sector, the growth in competing fleets, whichsaturates the market, the impossibility of predicting specific client demands, political instability in certainactivity zones, ecological considerations and general economic conditions.
BOURBON assumes no liability for updating the provisional information based on new information in light of future events or any other reason.
2 Meeting September 25, 2015
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, 20153
_ Oil price is above all a policy price
BOURBON IS INFLUENCED BY OIL PRICES
0
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, 20154
Meeting September 25, 20155
_ 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)
OnshoreMiddle East
OnshoreRow
OffshoreShelf
Deepwater
OnshoreRussia
Extra Heavy oil
NAMShale
Artic
OilSands
Bra Ultra Deepwater
Meeting September 25, 20156
_ 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, AIESource: Présentation Schlumberger
US shale oil productionIn millions of barrels/day
IEA predictsproduction to decline 400,000 barrels/day nextyear
Meeting September 25, 20157
_ The forecasts are unreliable given the very strong differences observed
BOURBON IS INFLUENCED BY OIL PRICES
Source: Douglas Westwood
Meeting September 25, 20158
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
BOURBON RESILIENCE FACTORS
Operational resiliencefactors
Local partnersand
Diversified client base
Operationalexcellence
Relative utilization rate
Diversificationby business
segment
Meeting September 25, 20159
Meeting September 25, 201510
_ 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
2,212,28
1,12
0,65 0,64 0,68 0,69
0,48
0,760,69
0,6
1,14
0,220,07 0,05 0,1 0,1 0,07 0,1
00
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
0,680,69
0,76
0,69
0,60
1,000,75
0,70 0,67
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 availability rate for BOURBON fleet
Technicalavailabilityrateobjective
OPERATIONAL RESILIENCE FACTORS
Meeting September 25, 2015
Meeting September 25, 201512
_ Diversification of types of business
OPERATIONAL RESILIENCE FACTORS
59%
4%
23%
14%
30%
32%
21%
17%
20142006
Marine services (83%)
Marine services (86%)
Deep water vessels Shallow water vessels Crewboarts IMR
Meeting September 25, 201513
OPERATIONAL RESILIENCE FACTORS_ Relative supply vessel utilization rates/ focus on BOURBON
Meeting September 25, 201514
_ 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
20142006
JV
Project JV
Affiliates
15
_ A unique partner network
OPERATIONAL RESILIENCE FACTORS
Meeting September 25, 2015
BOURBON RESILIENCE FACTORS
Financial resiliencefactors
« a stable familyshareholder base»
Value of $ and low interest rate
Maturity of business model and
free cash flow
Amount ofnet debt
Financial discipline
Meeting September 25, 201516
Meeting September 25, 201517
_ Maturity of business model
FINANCIAL RESILIENCE FACTORS
-800
-400
0
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
0
400
800
2007 2008 2009 2010 2011 2012 2013 2014 E 2015 E 2016
vessel investmentscash received sale & leasebacknet investments
Asset smart Strategy
Net investment (vessels only)
Free cash flow*M€
JACCAR estimate January 2015
Meeting September 25, 201518
_ Net Debt
FINANCIAL RESILIENCE FACTORS
0
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
Meeting September 25, 201519
_ 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 / adjustedEBITDA
1.83 4.96 3.0 < 2
Rent / adjustedEBITDAR
- - 22 % 30 %
Meeting September 25, 201520
_ External factors : exchange rates & interest rates
FINANCIAL RESILIENCE FACTORS
0
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
BOURBON RESILIENCE FACTORS
21 Meeting September 25, 2015
Safety
Utilization rate
Balanced revenuesfrom market
segments
Diversified customerbase
Net Debt/FCFgeneration
Debt
Orderbook/EBITDA
External Factors -USD
BOURBON BOURBON vs competitors
Tidewater
Gulfmark
Farstad
Source: public data, BOURBON estimates
Meeting September 25, 201522
BOURBON VS THE MARKET ENVIRONMENT
Source : Pareto, IHSPetrodata, Farstad
Drop in OSV utilization rate Number of stacked vessels increasing
Utilization rateSupply 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
Meeting September 25, 201523
_ One year Stock performance - BOURBON vs competitors
BOURBON’S RESILIENCE RECOGNIZED BY THE MARKET
0
20
40
60
80
100
120
sept.-14 oct.-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
Meeting September 25, 201524
_ 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
Meeting September 25, 201525
BOURBON:THE DIVIDEND POLICY HAS ALWAYS BEEN RESPECTED
0
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
+ exceptionaldividend
M€Annual amount of dividends paid
X 5.2+ 18 % per year
13.8
71.6
Meeting September 25, 201526
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:
o 85 million in 2016o 50 million in 2017
Opportunity for vessel sales, with or without long term bareboat charter, to achieve the debt objectives as soon as possible:
o 0.5 debt ratio (Net debt/Equity)o 2 x EBITDA
Meeting September 25, 201527
_ 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 000M€ Market capitalization of BOURBON
Meeting September 25, 201528
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