Bourbon 2015 Leadership Strategy

Monday, June 28, 2010

The Bourbon 2015 Leadership Strategy consists of further investing in innovative and cost effective vessels to satisfy customers’ increasing focus on safe and efficient vessels to support their offshore activities, and to enable them to reduce their overall operation costs. By adding 80 supply vessels and 64 crewboats through a $2b investment plan in new buildings, Bourbon will be operating a fleet of 600 vessels for deepwater and shallow water logistics services by 2015.

The Bourbon 2015 Leadership Strategy will be built on the Bourbon Liberty series of vessels, to speed up the renewal of the old and obsolete existing shallow water fleet and on the proven expertise of its deepwater operations for exploration and production, including subsea activities. The target for vessel availability rate should reach 95% and running costs index should be reduced by 4% at constant rate by 2015.

Key financial objectives
Based on the existing fleet and the delivery of new vessels including those built under the new investment plan, Bourbon’s key financial and operational objectives can be summarized as follows:

2011-2015
5 years
New buildings investment in offshore vessels    2 billion US$
Average yearly growth of offshore revenues    17%
Vessel availability rate    > 95%

By 2015
EBITDA / Revenues for the Offshore activity    45%
EBITDA / Capital employed    20%
Offshore running costs index at constant rate    -4%

Following the 28% average annual growth of the Bourbon Offshore Division revenues between 2002 and 2009, the new plan provides for a 17% average annual growth from 2011 to 2015 (based on $1.30 for 1€). The combined effect of improved utilization rates, increased vessel availability rate, and reduced costs of operation should contribute to the significant increase of the gross return on revenues and capital employed ratios.

This new investment financing will benefit from:
•    $613.9m of assets disposal in 2010, mainly consisting of sales of Bourbon fleet of 16 supramaxes and of the remaining non-core assets;
•    reduced installments paid on vessels under construction, 75% of the vessel price being paid on delivery;
•    a $400 million 12-year loan provided by China Exim Bank.

The combined effect of cash flow generated by operations, of the disposal of assets in 2010 and the new payment terms policy will result in an expected gearing of less than 0.5 and a net debt to EBITDA ratio of less than two by 2015. This means Bourbon should be generating positive cash flows as from 2013. Bourbon dividend policy will be to pay out about 40% of its consolidated profit.

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