SBM OFFSHORE 2016 YEAR END UPDATE

December 7, 2016

As the Company nears its year end, and ahead of the scheduled FY2016 earnings announcement, the Management Board announces the following non-cash adjustments to its accounts, which are the result of its regular year-end review taking into account uncertainties in outlook for certain areas of its operations reflected in its updated business planning assumptions¹:

Summary

• Impairment of net investment in construction yard Paenal in Angola of approximately US$60 million
• Recognition of DSCV SBM Installer long term charter as onerous contract at a cost of approximately US$30 million

Investment in JV holding Construction Yard Paenal

The activity outlook for SBM Offshore's investment (30% ownership) in the Joint Venture owning the Paenal construction yard operating in Angola has deteriorated. As a result, the Company's carrying amount for the net investment in this entity is to be impaired by approximately US$60 million. Because this investment is consolidated using the equity method, this non-cash impairment is recognized in the Company's Consolidated Income Statement on the line item share of profit of equity-accounted investees.

DSCV SBM Installer Charter Contract

SBM Offshore has a long-term charter contract with the Diving Support and Construction Vessel (DSCV) SBM Installer. Due  to the ongoing industry downturn, which has created significant over-supply in offshore markets, the vessel's projected utilisation has decreased. As a result, the contract is classified as onerous and a non-cash provision of approximately US$30 million is to be recognized in the Gross Margin of the Turnkey segment. SBM Offshore's investment (25% ownership) in the Joint Venture which owns the vessel is consolidated using equity accounting.

Outlook and Guidance

The Company confirms its FY2016 Directional² revenue guidance of at least US$2.0 billion. Including the above charter contract provision of approximately US$30 million Directional² FY2016 EBITDA guidance is around US$720 mln, compared to the previous guidance of around US$750 million. However on an underlying basis, adjusting for the aforementioned provision and the increase in compliance related settlement provision of US$22 million reported in the 2016 Half Year Earnings, underlying Directional² FY2016 EBITDA guidance is around US$ 770 million.