2017 REGISTRATION DOCUMENT

BOURBON 2017 Registration Document 69 MANAGEMENT REPORT Risk factors 3 performance vessels like those belonging to the BOURBON fleet. This made more than 25 years old vessels obsolete and increased the need to substitute these old vessels. BOURBON has established long-term relationships with major oil companies, thereby enabling it to better understand their expectations. This has led BOURBON to develop a four-pillar model of operational efficiency, i.e . safety of people and materials, respecting the environment on land and at sea; monitoring skills to guarantee service quality; technical availability of vessels to ensure continuity of service; optimization of cost and fuel consumption through the use of low fuel consumption diesel-electric propulsion vessels, enabling net savings on diesel. It is important to note the increased attention of oil and gas companies and the industry in general towards reducing energy consumption not only to reduce air emissions but also to reduce the energy costs of the projects. In this context, BOURBON’s diesel- electric propulsion vessels are particularly appreciated for their low fuel consumption. BOURBON cannot, however, guarantee that it will always be able to perfectly predict its clients expectations, nor discount the fact that, in one or more of the geographical areas where it has a presence, some of its competitors may, due to their size or expertise, have at their disposal financial, commercial, technical or human resources that are equivalent, or superior, to those offered by BOURBON and that are also likely to meet the requirements of the major oil companies, which could, under certain circumstances, lead to market losses for BOURBON. 5.1.2 Risks related to changes in supply In the deepwater offshore vessels market, in the event of new ships being delivered faster than the growth in demand, a temporary over capacity may lead to BOURBON experiencing a reduction in daily rates as well as a reduction in utilization rates for its deepwater offshore vessels in certain geographical regions. Investments by oil companies in offshore exploration and production expenditure dropped by 9% in 2017 (source: Rystad Energy). Most of the regions where BOURBON operates have been affected by this slowdown. With an utilization rate of 61.2% in deepwater offshore and 40.8% in shallow water offshore in 2017, BOURBON was able to maintain client confidence despite the depressed market. BOURBON’s commercial strategy focuses on long-term contracts, which minimizes the risks of exposure to short-term market fluctuations. Finally, in a deteriorating market with a very low barrel price, together with a sharp capital expenditure downtrend in the oil sector, BOURBON reacted quickly by anticipating the stacking of vessels with very low utilization rates. Concerning strategic choices, it is possible that certain BOURBON competitors may decide to develop their market share in specific geographical regions or with targeted clients through an aggressive commercial policy. The immediate consequences for BOURBON would be the loss of new contracts or failure to renew existing ones in a particular area or vis-à-vis a client. This type of commercial approach would need substantial investment, both by the competitor providing availability of a dedicated fleet of vessels corresponding to the needs of clients or of the targeted geographical region, by establishing a pricing policy that is considerably below the market price. Generally, a targeted attack from a competitor is a localized event and difficult to sustain over time as it is limited by operating costs and investments in vessels. In the context of the current decline in market demand, the risk of price attacks is not limited, with competitors being forced to be more aggressive on daily rates. In light of this risk, the first measure taken by BOURBON is to actively monitor the positioning of the fleets of its principal competitors and their pricing policy. The second measure is to geographically diversify the positioning of its fleet and the third is to screen its client portfolios, and thereby ensure diversification of the client portfolio. This market oversight did not reveal any significant movements by the competition of their fleets from one market to another. Moreover, Bourbon adapted its pricing policy to customer expectations, allowing us to maintain our market share and a utilization rate 5 to 10 points above the average (Source: Clarksons, BOURBON). BOURBON has secured key agreements with its main customers (such as TECHNIP, BP, TOTAL, EXXON and CHEVRON) and forged local partnerships, enabling us to continue working in countries even if they close themselves off again to protect their industry. This market information was reported during the BOURBONINMOTION conference on February 13, 2018. This strong presence of our local teams in areas where the vessels operate, allows active monitoring of vessels working in production or exploration. The sales network monitors market trends on a permanent basis and is supported by a network of Contracts Managers who are in daily contact with the clients to respond to their requirements in real time. The task of these teams is to keep an eye on the vitality of the market and on client satisfaction in order to provide them with service that is always adapted to their needs. Nevertheless, sporadic intensification of competition as a result of an aggressive commercial and/or pricing policy targeted at geographical areas may lead to the loss of new contracts. 2010 2011 2012 2013 2014 2015 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Bourbon UR 82.5 88.8 90.6 89.5 88 80.3 62.1 45.8 48.1 50.2 51.9 Market UR 91 92 89 92 89 64 42 41 42 43 45