Boskalis Annual Report 2018

ANNUAL REPORT 2018 – BOSKALIS 5

resulting in the announcements early 2019 that Boskalis intends to sell its stake in Saam Smit Towage and Kotug Smit Towage.

Along with a raft of smaller contracts the order book at Dredging & Inland Infra increased in 2018 with a mixture of long-term multi-year projects and near-term work. All in all with the projects in hand, we have good visibility for the fleet for the frst half of 2019. OFFSHORE ENERGY Our Offshore Energy division on the one hand continues to be affected by the lackluster investment climate in Oil & Gas, which in particular led to the decision to exit the low-end transport market. On the other hand, the early cyclical survey activities and offshore wind prospered in 2018. The Ostwind 2 project is an excellent example and with a value of EUR 250 million it is also the largest cable-laying contract ever acquired by Boskalis. This renewables project will combine multiple in-house disciplines including UXO survey, geotechnical and geophysical surveys, seabed preparation works, the transport and installation of 270 kilometer export cable and seabed reinstatement. Furthermore, we won the Triton Knoll and Moray East cable installation contracts with a combined value of EUR 200 million. A good example of early contractor involvement is the contract that we signed for the Inch Cape offshore wind farm. A project with a potential value of over EUR 200 million with a transport and installation (T&I) scope comprising turbine foundations, inter-array and export cables and an offshore substation. In the fourth quarter Boskalis in partnership with Lamprell joined the Long-Term Agreement for Offshore Facilities (LTA) program of Saudi Aramco. The LTA covers engineering, procurement, construction, transportation and installation (EPCI) contracts in support of Aramco’s offshore investment program under which it expects to invest billions of euros each year. All in all, a prestigious framework agreement that provides us with plenty of scope for T&I and subsea work in the next 10 years. Moreover, it supports our strategy aimed at expanding our T&I activities towards the higher end of the S curve. In 2018 the BOKA Vanguard broke numerous records with the transport of the 90,000-ton P67 FPSO from China to Brazil. With this project we demonstrated the huge benefts of the dry transportation of box-shaped FPSOs in terms of time and reliability. Our relatively young Survey (Gardline) and Subsea businesses were busy sowing the seeds for 2019 and the years to come. The redevelopment of the Tyra offshore gas feld holds potential for subsea, including engineering, procurement, production and installation work. Most of the offshore work will be carried out using the DSV BOKA Atlantis that we acquired in late 2017. Early 2019 Gardline acquired a new vessel which will be equipped to become a high-end geophysical vessel to accommodate the Northwest European market. Early 2019 we also announced the acquisition of a majority share in Horizon survey which will offer us access to the attractive survey market in the Middle East. TOWAGE & SALVAGE The volumes at Towage continue to be relatively stable, albeit that increased competition and client concentration in container shipping resulted in further pricing pressure. The rapidly changing market conditions initiated a fundamental discussion about the future and our position within the harbor towage joint ventures

Salvage had a busy and good year. Early in 2018 we were awarded the contract for salvaging the ultra-large container ship Maersk Honam. The vessel caught fre in the Arabian Sea and was rescued by the Salvage colleagues along with most of the cargo. The ship was then towed to Dubai, where the remaining cargo was offloaded and fre-damaged waste was discharged and cleaned. In addition to this sizable project we also succeeded in acquiring the contracts for salvage in two of the three geographic zones in the world as defned by the U.S. Navy. The third zone was acquired by our U.S. partner Donjon, meaning that we are now able to provide salvage services to the U.S. Navy around the globe. QUALITY MANAGEMENT In the past year we also made great strides in terms of further harmonizing our activities. In 2018 we continued with the roll-out of our Way of Working program, the new common standard for the quality assurance of our processes. From tendering to delivery, all steps in a single system, on a single platform, making it easier to provide our clients with a one-stop shop for multidisciplinary projects. It is by combining activities and services that we can provide a unique proposition to the market. Which is exactly why in 2018 we transitioned to a single brand name for all our activities: Boskalis. SUSTAINABLE HORIZONS Sustainability is very much on the agenda at Boskalis and in 2018 many interesting new developments took place. As part of our Boskalis on Bio program launched in 2015, Boskalis Nederland joined forces with GoodFuels in a partnership aimed at reducing the CO 2 emissions of our equipment in the Netherlands. We also launched a large-scale experiment on board of our hopper dredger Shoalway aimed at reducing emissions by applying fuel water emulsion on the main engines. 2018 also saw the frst LNG-powered harbor tugs in southeast Asia enter into service at Keppel Smit Towage. As a company we often fnd ourselves in a position in which we are able to make a difference in many places in the world, as can be seen from the many social initiatives on our projects and that you can read about in our CSR report. In addition to supporting these local initiatives we also share a lot of our expert knowledge and capabilities with NGOs of which The Ocean Cleanup founded by Boyan Slat is a great example. Like Boyan and his team we believe we can move boundaries and create new sustainable horizons together. On behalf of the Board of Management I want to thank all colleagues for their hard work and great achievements during the past year, and thank our clients, partners and shareholders for the trust and confdence they place in us.

Peter Berdowski