Bourbon

Horizon 2012 strategy

"Horizon 2012" conference

• February 6th 2008 Press Release
• Download the slideshow
• Listen to Webcast of February 6, 2008 at 6:00pm (CET): BOURBON enlarges its horizon to 2012 – Strategy and Outlook
• or listen the Conference Call Audio record

  Audio record of the conference call by Jacques de Chateauvieux, Chief Executive Officer (CEO) of BOURBON Download the mp3 file

In February 2006, BOURBON announced the Horizon 2010 plan, a strategy based on an original vision of the market and substantial investments in a modern fleet. In February 2008, BOURBON is announcing its Horizon 2012 strategic plan, which continues and prolongs its outlook.

Extension of the Horizon 2010 outlook, this new strategic plan illustrates the ongoing improving approach adopted by BOURBON which, based on continued analysis of changing demand, positions itself as a leader in trends. By anticipating services and resources today and expanding its offer, BOURBON will confirm its position, in 2012 and beyond, as a leader in modern offshore oil and gas marine services.
Added to that, the continuity of the investments will also keep BOURBON on the leading edge of innovation to offer to the most demanding oil and gas clients more and more productivity and greater efficiency.

Ambitious objectives

By 2012, BOURBON is targeting:

• expected average annual revenue growth of 17%, including 21% for the Offshore Division,
• a large increase in the number of vessels,
• a ratio of EBITDA (Gross Operating Income) to average capital employed of 18% in 2012,
• investment, in addition to the installments paid in 2007, of 2 billion euros, 85% of which will be devoted to the Offshore Division and largely financed by cash flow.

Ongoing analysis to anticipate changes and adapt

The last Horizon 2010 strategic plan was developed at the end of 2005, in a context of strong demand from oil operators, who expressed their intention to make massive investments in offshore to extend their reserves and develop their production.
BOURBON was then positioned in three marine sectors via the Offshore Division, the Towage and Salvage Division, and the Bulk Division.

Two years later, two new factors, external and internal, have led BOURBON to update its strategic vision. In the offshore oil and gas market, BOURBON notes that oil and gas investments are expected to be higher than initial estimates and that growth has been slowed by bottlenecks at equipment suppliers. As a result, the investments made in oil fields are expected to be spread out over time and generate a positive extension of the production cycle.

Within the group, the sale of the port towage business to the Spanish company Grupo Boluda Corporación Marítima, which was closed on December 21, 2007, gives BOURBON new maneuvering room in the two remaining Divisions: Offshore (which now includes the salvage business of Les Abeilles International), and Bulk transport.

Facing these major changes, BOURBON has decided to update its strategic plan and enlarge it to 2012.

A unique positioning

Against this backdrop, BOURBON is implementing a unique strategy, without equivalent among its rivals. By capitalizing on the assets of its fleet and investment in rapid and steady growth, BOURBON intends to transform its main competitive advantage into a decisive edge. This strategy is primarily based on the following components:

• massive investments in modern vessels, including Offshore Support Vessels, IMR Vessels or bulk carriers. Bourbon Offshore’s next generation fleet will be able to operate in both the deepwater and continental offshore segments. By targeting the old vessel replacement market, BOURBON will be the sole operator in the market in a position to offer continental offshore customers the technological excellence of deepwater offshore;
• a full range of modular services based on modern resources as well as recognized experienced personnel, trained in the most recent techniques. Through its subsidiary Bourbon Subsea Services, BOURBON is able to meet the needs of oil and gas clients seeking contractors who can provide all IMR services;
• an ambitious recruitment and training program, with nearly 5 000 new employees who will join BOURBON by 2012, more than doubling its current workforce. The measures already taken to achieve previous recruitment and training objectives will be expanded to meet the challenges in the offshore sector: to recruit the best candidates and train all employees to guarantee the BOURBON Standard of Expertise in cooperation with the Norwegian DNV (Det Norske Veritas) classification company.

Efforts focused on the Offshore Division

Within the Offshore Division, the Horizon 2012 plan is characterized by:

• an expansion of the offer, by integrating and developing a new “Subsea Services” Activity, which results in a new organization for the Division:
  
• expected average annual revenue growth of 21% a year for the Offshore Division, including 17% for the Marine Services Activity and 38% for the Subsea Services Activity,
• investment of 1.7 billion euros, in addition to the installments paid in 2007, essentially for the expansion of the fleet of Offshore vessels and ROVs. To this end, 10 GPA 696 type IMR vessels were ordered at the beginning of 2008 at a cost of 450 million euros.

In the Bulk Division, in a favorable environment, BOURBON’s goal within the next 5 years is to strengthen its position as a shipowner and expand its line of bulk carriers to better meet the needs of its industrial clients.

The Horizon 2012 plan for the Bulk Division is characterized by:

• expected revenue growth of 7% a year,
• investment of 300 million euros for 16 new bulk carriers (4 Panamax, 11 Supramax and 1 Cement carrier).

With its owned fleet, which will represent about 30% of the bulk carriers needed by Setaf Saget for its business, BOURBON also intends to maintain a satisfactory level of profitability in a context of fluctuating market rates.

By 2012, BOURBON intends to become the leader in modern offshore oil and gas marine services, by offering to the most demanding oil and gas clients worldwide a full line of new generation, innovative, high performance vessels and an expanded offer of subsea services.

BOURBON continues to protect the French coastline with its vessels chartered by the French Navy, and is developing its bulk transport business for industrial groups within long-term contract relations.