Boskalis Annual Report 2018

boskalis at a glance ANNUAL REPORT 2018 – BOSKALIS 14 Emergency Response business. Furthermore we use our own assets and apply our expertise in both engineering and contract and risk management to secure wreck removal contracts. Offshore Energy The Expand pillar of our strategy remains strongly geared to Offshore Energy. In terms of prospects, this relates both to traditional fossil fuels such as oil and gas as well as renewables, more specifcally offshore wind. Despite the sharp decline in the oil price and the cutback in capital expenditure by the offshore oil and gas industry over the last couple of years, specifc segments in this market remain attractive for Boskalis. Boskalis offers a broad range of capabilities, which can be subdivided into contracting-focused Installation & Intervention (I&I) activities, Subsea activities including IRM, Offshore Wind activities and Survey, and the more short-term-focused Heavy Marine Transport and Marine Services business. Given the nature of the contracting business, where we are expected to take on a broader responsibility with a higher reward potential, the I&I, Subsea and Offshore Wind activities are positioned higher on the S curve and are therefore an area where we want to pursue further development. Installation & Intervention The I&I market comprises the installation and decommissioning of floating and fxed structures and landfall-related activities. The competitive landscape for the installation and decommissioning of floating and fxed structures is highly fragmented, with the combined market share of traditional global Engineering, Procurement, Construction and Installation (EPCI) players estimated to be less than 40%. Many of the other players are active with just one or two key assets and due to the market downturn an increasing number of them are suffering from weak fnancial performance and overleveraged balance sheets. This presents us with an opportunity to step into this market and to position ourselves as an attractive independent player just below the EPCI contractors with a geographic focus on Northwest Europe, Africa and the Middle East. Results: In 2018 we were selected as a contractor under Saudi Aramco’s Long Term Agreement for Offshore Facilities (LTA) program. The LTA is part of an ambitious offshore investment program and covers EPCI contracts to support a large part of Saudi Aramco’s investment program. It gives Boskalis with its partner Lamprell the right to bid for tenders put out by Saudi Aramco, together with a select number of other contractors. It marks an important milestone for Boskalis supporting our ambition to grow towards becoming a full-scope transport & installation contractor at the high-end of the offshore energy market. To position ourselves higher on the S curve in the floating installation market, we added a construction support vessel (CSV) to the fleet late 2018. The Boka Falcon is a modern DP2 vessel with a bollard pull in excess of 400 ton, two ROVs, a 150-ton crane, ample crew capacity and large deck space. The vessel is on a multi-year charter and will enter into service in March 2019. If the right opportunity were to present itself, Boskalis will consider adding a second CSV to the fleet.

Subsea Solutions Over the years Boskalis has developed a modest but successful position in the subsea services market, focusing on survey and UXO clearance, diving and Inspection, Repair and Maintenance (IRM) work in shallow water regions in Northwest Europe, Africa and the Middle East. This is another highly fragmented market, with the vast majority of players operating just one or two survey and diving support vessels in a region. With numerous players also being fnancially stretched, we see opportunities for expanding our position in Northwest Europe, Africa and the Middle East by acquiring assets or by acquiring a player with assets. The global shallow water SURF (Subsea, Umbilicals, Risers and Flowlines) market is also substantial in size. Based on the market outlook and Boskalis’ existing subsea contracting capabilities, we want to look into a gradual expansion into the shallow water SURF market and will explore acquisition opportunities to achieve this. Results: 2018 was the frst full year for Gardline as part of the group. The survey market and performance of Gardline was strong and Boskalis took further steps to expand its survey activities. Late 2018 a new vessel was acquired which will be converted into a high-end geophysical survey vessel for the European market and in February Boskalis announced a further geographic expansion of its footprint into the Middle East after acquiring a 62.5% majority stake in the Horizon Group from the United Arab Emirates. Boskalis also expanded its Subsea Services business in 2018 with the opening of a new offce in Aberdeen. In line with the ambitions set out in the business plan, Boskalis successfully acquired a SURF contract for phase II of the redevelopment of the subsea installation of the Tyra gas feld for which our diving support vessel Boka Atlantis will be deployed. Offshore Wind The position of Boskalis in the Offshore Wind market lies primarily around foundations and cables. With our wealth of seabed know-how and broad asset base we are capable of transporting and installing all types of wind turbine foundations offshore. Over the years Boskalis has also developed its subsea cables and flexibles activities. Boskalis is currently the leading European player in the feld of subsea export and array cables. The offshore wind market has taken off in earnest in recent years but despite an impressive drop in cost per kWh the economics of offshore wind remains dependent on government subsidies. The offshore wind-related market in Northwest Europe is expected to be relatively stable with an average addressable market of EUR 1.5-1.7 billion annually for the coming years. Boskalis’ share in this ranges from around 10% (foundations) to around 35% (cables) and the company is committed to maintaining a strong presence in the European market. Results: The Bokalift 1, a 3,000 ton DP2 crane vessel, was commissioned early 2018 and was virtually fully booked in its frst year on an offshore wind foundation installation project. Demonstrating its versatility, the vessel’s next assignment involves the decommissioning of a number of offshore platforms starting in mid-2019. During the