BOURBON: Press Release - Full Year 2015

PARIS, March 10, 2016 (GLOBE NEWSWIRE) -- BOURBON Full Year 2015: Adjusted EBITDAR increased 7.5% to €547.7 million and adjusted EBITDAR/Revenues margin improved 2.2 points versus 2014 to 38.1%, thanks to proactive cost reductions, stacking of vessels and the impact of the $US

Net loss, group share, of €76.6 million impacted by a reduced utilization rate and an unrealized foreign exchange loss

In a very difficult market, BOURBON generated positive free cash flow of €90 million in 2015

• Adjusted EBIT decreased 54.5% compared with 2014, as improved cost control was more than offset by higher bareboat charter costs and less capital gains
• BOURBON's cost reduction action plan is progressing well, with an 8% reduction in costs in 2015 (on a constant perimeter) compared with 2014
• Proposed to maintain dividend payment of €1.00 per share to shareholders

*** Effect of consolidation of jointly controlled companies using the equity method.
(a) See page 2.

 "BOURBON shows good resilience in a deteriorating market with an EBITDAR of €547.7 million", says Christian Lefèvre, Chief Executive Officer of BOURBON. "The unique positioning of a standardized fleet and cost reduction efforts enabled an increase in the operational margin by 2.2 points. In highly demanding market conditions, BOURBON is demonstrating a solid capacity to adapt quickly, showing, in particular, discipline in spending. Cost reductions and operational efficiency remains a high priority for the upcoming quarters."

(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). As of January 1, 2015, 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.

2015 market and operational highlights

• The price of oil remains very low and oil & gas companies have continued to reduce both their capital expenditures as well as general expenditures
• There remains a high number of deepwater vessels on order with the shipyards, primarily PSVs, that will add to the excess capacity already seen in this market
• BOURBON is focused on operational excellence in service execution:
  • Safety remains a strength at BOURBON, with a TRIR (Total Recordable Incident Rate per million hours worked) of 0.55
  • Strong technical availability of 96.4% in 2015, surpassing the target of 95% for  the end of 2015, reflecting good technical management and the benefits of BOURBON's strategy of investing in an efficient, modern, standardized fleet

Full year 2015 results highlights

• Adjusted EBITDAR increased in 2015 versus the prior year in all segments of Marine Services as well as in Subsea Services, enabling each to realize a stable or increased margin (adjusted EBITDAR/revenues)
• Capital expenditures dropped significantly in 2015 to €298 million (from €568 million in 2014) as the newbuilding vessel investment plan neared its end and there remains only 3 supply vessels to be delivered in 2016
• Net debt increased slightly to €1,395.5 million, notably as a result of foreign exchange effects on US Dollar denominated debt

MARINE SERVICES

Adjusted EBITDAR as a percent of adjusted revenues increased overall, as continued cost reduction efforts, combined with vessel stacking, contributed to a 2 point increase to 36.2%. The reduction in adjusted EBITDA versus 2014 was a combined result of the higher level of bareboat charter costs and lower capital gains. The technical availability rate increased in each of the 3 segments and surpassed the 95% objective set for BOURBON's entire fleet thanks to strong management of the maintenance program.

Marine Services : Deepwater offshore vessels

Adjusted EBITDAR increased 4.6% versus 2014 as cost reductions and vessel stacking were able to contribute to offsetting the decline in the average daily rate and utilization rate. The contributions of the cost reductions is also visible in the margin of adjusted EBITDAR/Revenues. This margin was able to remain flat versus the prior year while absorbing an increase to the fleet of 11% during 2015. Adjusted EBITDA declined versus last year, primarily due to the increase in bareboat charter costs compared with 2014.
Marine Services : Shallow water offshore vessels

The positive effects of cost reduction measures implemented were evident as total costs decreased almost 7%, enabling a significant 3.6 point increase in the margin of adjusted EBITDAR/Revenues. Helping to offset the decline in activity while at the same time absorbing an increase in the fleet of 4%, this improved margin resulted in an increase of adjusted EBITDAR by almost 10%. The decline in adjusted EBITDA versus 2014 was mostly due to the increase in bareboat charter costs over this period.

Marine Services : Crew boat vessels

Compared with 2014, cost improvements efforts yielded a 4% decline in total costs in 2015, enabling an increase in adjusted EBITDAR of almost 7% for the year. The margin of adjusted EBITDAR/revenues increased 2.2 points despite the negative impacts of the decline in average utilization rates and average daily rates during the year. Adjusted EBITDA increased for the year overall, though the second half of the year was more challenging than the first half as the demand for the larger FSIV vessels declined significantly.

Subsea Services

The combination of new Bourbon Evolution 800 fleet entries and cost reductions versus the year ago period enabled adjusted EBITDAR to increase 8% and as a percentage of adjusted revenues, an increase of 2.1 points to 47.4%. The combined effects of higher bareboat charter costs and lower capital gains in 2015 versus the prior year have resulted in a reduction in adjusted EBITDA.

Other

Activities included are those that do not properly fit into either Marine Services or Subsea Services. Making up the majority of the total are earnings from such items as miscellaneous ship management activities, logistics as well as from the cement carrier Endeavor.

Since the start of the Asset Smart action plan, $US1,697 million worth of vessels have been sold, with an additional 3 vessels remaining to be transferred to Minsheng Financial Leasing under the agreement signed in the 4^th quarter 2014.

Having already transferred almost all of the vessels sold under the Asset Smart action plan in 2013 and 2014, there was very little movement in capital employed in 2015.

The gearing ratio was at 0.89 as of December 31, 2015. The gearing ratio is more than 40% lower than it was at the end of June 2013 (1.53), after which the impact of the vessel sale proceeds began to impact net debt.

The two primary sources of cash generation for BOURBON are from the vessels in service as a ship operator and the sale of vessels as a ship owner. From these sources of cash, the stakeholders such as banks, government entities and shareholders receive a portion in the form of interest, taxes and dividends. Another use of cash is for the continued high level of investment in assets for the business and required working capital increases. These various uses of cash make the speed of debt reduction less rapid, though still significant.

The free cash flow generated through the combined vessel operator and vessel owner elements of the business has made a significant improvement since the beginning of the vessel sale and bareboat charter program, having generated total free cash flows of almost €1 billion in the past 3 years. This has enabled BOURBON to reduce its net debt by approximately €756 million since June 30, 2013 while taking delivery of 75 new vessels during this period.

OUTLOOK

2016 will likely see a low point in the cycle for the demand of offshore vessels with a slight rebound in the second half of the year, mainly in the areas of maintenance of production units and of maintaining production of existing oil fields.

BOURBON will focus on excellence in service execution and will strive to maintain a high utilization rate of the fleet in operation (excluding stacked vessels) utilizing its international network, mainly with local partnerships.

The group will continue to stack up to 20% of its supply fleet if there are no commercial opportunities in the medium term in order to reduce operational costs.

In this context, BOURBON anticipates 2016 adjusted revenues to have a moderate decline versus 2015 and the operating margin (adjusted EBITDAR/revenues) to decline slightly compared with 2015. BOURBON is at the end of its investment plan, and expects to take delivery of 3 supply vessels and 4 crew boats in 2016. We therefore expect free cash flow to increase appreciably versus 2015.

As the industry remains in this prolonged downturn, BOURBON remains focused on what it can control: safety, cost control initiatives and operational efficiency

ADDITIONAL INFORMATION

• BOURBON's results will continue to be influenced by the €/US$ exchange rate
• BOURBON set up €/US$ hedging contracts at an average exchange rate of €1 = 1.09 to partially cover its estimated EBITDA exposure in 2016
• The 2015 financial statements were closed by the Board of Directors on March 7, 2016
• The auditing procedures have been completed and the audit report relating to certification is in the process of being issued
• At the next Annual General Meeting, The Board will propose to maintain the dividend payment to shareholders of €1.00 per share, with an ex-dividend date of June 3, 2016 and a payment date of June 6, 2016

FINANCIAL CALENDAR

APPENDIX I

Reconciliation of adjusted financial information with the consolidated financial statements

The adjustment items are the effects of the consolidation of joint ventures according to the equity method. At December 31, 2015 and for the comparative period presented, adjustment elements are:

APPENDIX II

Simplified Income Statement

APPENDIX III

Simplified Consolidated Balance Sheet

APPENDIX IV

Simplified Consolidated Cash Flow Statement

APPENDIX V

Quarterly revenue breakdown

*Effect of consolidation of joint ventures using the equity method

Quarterly average utilization rates for the BOURBON offshore fleet

Quarterly average daily rates for the BOURBON offshore fleet

Quarterly number of vessels (end of period)

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

Quarterly deliveries of vessels

Yearly revenue breakdown

*Effect of consolidation of joint ventures using the equity method

Yearly average utilization rates for the BOURBON offshore fleet

Yearly average daily rates for the BOURBON offshore fleet

Yearly deliveries of vessels

Breakdown of BOURBON revenues by geographical region

Other key indicators

Quarterly breakdown

Annual 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 more than 11,000 skilled employees. Through its 34 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 2015, BOURBON'S revenue came to €1,329.6 million and the company operated a fleet of 511 vessels as of December 31, 2015.

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

Contacts

BOURBON

Investor Relations, analysts, shareholders
James Fraser, CFA
+33 491 133 545
james.fraser@bourbon-online.com

Corporate Communications
Christelle Loisel
+33 491 136 732
christelle.loisel@bourbon-online.com

Media relations agency
Publicis Consultants

Vilizara Lazarova
+33 144 824 634
vilizara.lazarova@consultants.publicis.fr

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