Message from the President
« In 2007, BOURBON decided to exercise its option to sell 30% of its Vindemia stock to Casino and to sell its port towage activity to Grupo Boluda Corporación Marítima. Our company is now focused on offshore oil and gas marine services and dry bulk shipping.
At the same time, BOURBON noted that the market conditions used as the basis for defining its Horizon 2010 strategic plan had changed significantly. In fact, investments by oil companies to boost their reserves and guarantee the production necessary to satisfy the market, will be made over a longer drawn out period than initially expected. This situation is primarily due to bottlenecks at equipment and service suppliers, the increase in crude prices and the increasing role of the state-owned companies with decision-making processes that follow rules specific to each producing country.
These two reasons -a longer cycle and a change in the activity portfolio have led BOURBON to extend its Horizon to 2012 by presenting its strategic objectives for the five years from 2008 to 2012.In terms of specific objectives, BOURBON wants to increase its total revenues by 17% per year, with the Offshore Division contributing growth of +21% per year on average over the period, and the Bulk Division +7% per year. We are aiming for a return on capital employed at the end of the plan, i.e. for the year 2012, of 18% margin of EBITDA to capital employed.
The Offshore Division is adding to the investments of the 2010 plan the development of a new "Subsea Services" activity, which offers its clients integrated Subsea Services including:
- IMR support vessels for surface and subsea operations for inspection, intervention, maintenance or repair (IMR).
BOURBON currently has 11 operating vessels and 9 vessels on order. Under the Horizon 2012 plan, BOURBON has invested 450 million euros for the order of a series of 10 new units: new-generation IMR vessels, GPA 696, which will be built in China.- Remotely Operated Vehicles (ROV) necessary for deepwater operations.
In order to have the resources and expertise in this segment, BOURBON has acquired DNT Offshore. This company, founded in Italy 6 years ago, is recognized for its expertise. It owns and operates 7 ROVs. By 2012, BOURBON will invest in 14 new ROVs to increase the operational capacity of DNT Offshore within its new Subsea Services activity.- Engineering and offshore operations Management services.
Provided by Bourbon Offshore Gaia, these services will be expanded to guarantee the strong growth of the Subsea Services activity. By Horizon 2012, the workforce of this subsidiary will be increased from 20 to 200.Investments anticipated for the Offshore Division under the plan total 1,700 million euros in addition to the installments already paid at the end of 2007. 1,100 million euros will be invested in the Marine Services activity, which is expected to generate an average growth of 17% per year, and 600 million in the Subsea Services activity, with projected growth of 38% per year. To continue the strategy that has made BOURBON a leader in modern offshore oil and gas marine services, the Offshore Division intends to focus on services to operating oil fields and to give priority to long-term contracts for fields in the exploration and development phase. In addition, the development of the Subsea Services Activity provides a growth vector for BOURBON, while providing clients with a complete service in the high-growth deepwater market.
In the Bulk Division, BOURBON is accelerating its growth capacity by expanding its owned fleet. To guarantee the successful performance of shipping contracts with its industrial clients, this Division ordered 14 new vessels at the end of 2007: 10-58,000 ton Supramax, to be delivered between 2009 and 2011, and 4-74,000 ton Supramax, to be delivered in 2010. Based on the existing fleet of 6 vessels and the 2 units already ordered, in 2012 BOURBON will have a fleet of 22 vessels, with an average age of less than 5 years. Our Bulk Division is expecting growth of 7% per year over the duration of the plan and a margin of EBITDA to capital employed of 29% in 2012, after an investment of 300 million euros in addition to the installments already paid as of December 31, 2007.
The success of the Horizon 2012 plan is based on the pillars of BOURBON: Safety, Innovation, Human Resources and Cost Control. This strategy will also create value for our shareholders and will give BOURBON, in 2012, a fleet of innovative and efficient vessels; over 450 units with an average age of less than 5 years, both in its Offshore Division and in bulk shipping.
Finally, this plan will be successfully carried out thanks to BOURBON’s employees, women and men who get involved, who share common values and who, in addition to their professionalism, their enthusiasm and their sense of personal responsibility, are united with the world in their commitment to growth that is economically fair, socially responsible, and environmentally friendly. »
Jacques de Chateauvieux