Prospectus - SBM Offshore

The Group's lease and operate contracts expose the Group to the risk of inaccuracies in relation to the
determination of the residual value of vessels. Residual value risk relates to the portion of the vessel which is
not amortised over the initial lease period. Determining the residual value involves taking a view on the
likelihood of the lease being extended, the technical reusability of the vessel and the expected market demand
for that vessel on expiry of the current lease. Correctly estimating the residual value is an important component
of the lease rate calculation. If the Group fails to correctly establish these key parameters, the actual residual
value may turn out to be below the estimated future market value and the Group's business, results and
financial condition may be adversely affected.
(g) The Company believes that the Group's success and results (including its ability to charge a
premium for its services) is in part dependent on the strength of its reputation, as well as the
reputation of its partners. Any damage to the reputation of the Group or its partners may result in
existing customers withdrawing their business from the Group, or not awarding the Group future
business or the opportunity to bid for future business, each of which could adversely affect the
Group's business, results and financial condition.
The Company believes that the Group's success and results depend in part on the strength of its reputation, as
well as the reputation of its partners. The Group attracts (and retains) business and qualified staff partly as a
result of its reputation, and the trust that that engenders in both existing and prospective customers. The
Company also believes that its strong reputation coupled with a strategy to deliver bespoke, premium products
to its customers, entitles it to charge a premium for its products and services. The reputation of the Group (and
its partners) is dependent on a number of factors and may be damaged by, amongst other things, mistakes in
projects, non-compliance with regulations or business principles, health and safety issues (particularly
accidents that result in death or severe injury), customer and supplier issues, litigation, employee misconduct,
difficulties in operational or financial management, or negative publicity (including negative publicity
following an environmental disaster, such as an oil spill). Any damage to the reputation of the Group or its
partners may result in existing customers withdrawing their business from the Group or not awarding the
Group future business or the opportunity to bid for future business, and in an inability to attract new customers,
and may lead to a broader adverse effect on the Group's business and prospects by way of loss of goodwill,
joint venture partners and employees. This may in turn adversely affect the Group's business, results and
financial condition.
By way of example, the challenges faced (and, until the YME Agreement, the stalemate) in relation to the Yme
platform have created questions around the Company's capabilities to deliver high quality technical solutions.
(h) The Group relies significantly on the skills and experience of the managerial staff and other key
personnel and a loss of these individuals could adversely affect the Group.
The Group's competitive position and success has been built on the quality of its engineering skills – on its
ability both to refine existing technologies, and to identify, develop and implement new technologies.
Maintaining a leading role in existing and new technologies requires skilled engineering staff, which refine and
develop those technologies, and skilled managerial staff - both at a project level, to manage the implementation
of the relevant project, and at Company level, where sufficient experience and an in-depth knowledge of the
Group, its business and strategy, and a sufficient understanding of the industry and markets in which the Group
operates, are critical to the successful management of the Group and its business.
The Group may find it difficult to recruit, retain or motivate suitably qualified and experienced engineering
and managerial staff. In particular, the business is dependent on the Group being able to attract and retain
appropriately qualified and experienced senior project managers/directors, process engineers, safety and loss
prevention engineers, electrical and instrumentation engineers, regulatory compliance and health, safety,
security and environment (HSSE) officers. If the Group does not succeed in attracting and retaining
experienced staff in sufficient numbers, this may adversely affect the Group's business, results and financial
condition.
0105735-0000002 AMCO:5624830.1 28