Prospectus - SBM Offshore

contractual obligations. In countries where the Group is directly involved in activities such as engineering,
construction or vessel operation, such events could affect the ability to secure revenues and meet objectives.
Some operations take place in regions which present identifiable security risks, including piracy and terrorism.
Acts of piracy on vessels have recently increased in frequency. Although the Group's fleet has not to date
fallen victim to piracy, there can be no assurance that it will not do so in the future. Any such occurrence could
adversely affect the Group's business. Acts of piracy have historically occurred in areas where the Group has
operated, such as the West coast of Africa, or in areas where Groups assets may be in transit, such as the
Indian Ocean or Indonesian waters, and there is a risk that acts of piracy will continue to occur in those areas,
as well as other regions. The Group mitigates this risk through security arrangements and insurance, but in the
future such arrangements may be unavailable, may only be available at increased costs or may prove to be
insufficient or to provide insufficient coverage. In addition, crew costs could also increase if piracy continues
to be a risk. Detention hijacking as a result of an act of piracy against the vessels, or an increase in cost or
unavailability of insurance for the Group's vessels could have a material adverse impact on Group's business,
results and financial condition.
(k) The Group's current corporate transformation campaign may fail to meet objectives and generate
risks (such as resistance to the transformation campaign by personnel) as well as ineffective
processes or tools. If the Group is unable to deliver expected improvements the Group's business,
results and financial condition could be adversely impacted.
The Group launched in 2012 and continues to develop a transformation campaign aiming at improving the
ways of working in line with the "Work as One, Perform and Shape the Future" strategy. The changes
implemented by the Group include the delegation of responsibilities to five execution centres, merging of the
Group's Turnkey Systems and Turnkey Services activities, streamlining of internal processes, systems and
objectives and amendments to the Group's performance and evaluation system. The Group has significantly
increased staff numbers (from 2,500 in 2004 to more than 7,000 in 2012) and has replaced 53 of the top 120
senior managers since 1 January 2012. The Management Board members have changed, including a new CEO
since 1 January 2012 and the creation of the new position of Chief Governance and Compliance Officer. The
current Management Board have been working together for a relatively short time (since July 2012).
There can be no assurance that the planned strategy will be successful, that the Group will not encounter
difficulties or delays in implementing it, or that the Group's revised internal control systems and risk
management will, once implemented, adequately identify all risks, or that the Group will properly assess the
impact of such risks and address them in an adequate manner. As a result, the Group may suffer financial
losses or damage to its reputation. This may have an adverse effect on the Group's business, results and
financial condition.
Changes to the Company's internal organisation and processes could affect morale and cause loss of motivation,
reduced productivity, increased turnover of staff. There could be gaps and mistakes in execution or reporting
due to changes in the organisation, processes or tools not having being adequately implemented. For example,
changes in the information system the Group is using could affect performance and reporting during a
transition period whilst staff and managers get used to different ways of working. Any of these factors could
adversely affect the Group's business, results and financial condition.
(l) The Group may not succeed in redeploying vessels at existing rate levels or at all, and may be
subject to higher than anticipated demobilisation, refurbishment and redeployment costs.
The Group's vessels are generally designed according to specifications from the customer. Lease and operate
contracts are usually structured to secure an acceptable return on the investment within the contract period.
When the lease contracts expire, or if they are terminated early, the Group may encounter difficulties
redeploying those vessels at existing rate levels, or even redeploying those vessels at all. The Group currently
has one FPSO, FPSO Falcon, that is not under contract. The redeployment of a vessel typically requires that it
be refurbished and upgraded according to the specific requirements of the new customer contract, which
involves additional cost. Also, the residual value of the unit may not end up being competitive in the market
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