? Year-on-year revenue decline of 19.5% on a currency comparable basis, to a large extent driven by lack of activity at Seabed Geosolutions.
? EBIT margin was low single digit, compared to mid-single digit in the same period last year. Results were below expectations due to lower revenue, mainly caused by technical downtime of some vessels, mainly in Europe, and hurricanes in the Americas, negatively impacting EBIT by around EUR 10 million.
? Agreement reached to divest the non-core trenching and cable-laying business.
? Net debt/EBITDA of 2.9 within covenant requirement to not exceed 3.0; expected to improve in the fourth quarter.
? As a matter of financial prudency, today Fugro launches a subordinated convertible bond of EUR 100 million. Proceeds will be offered to the USPP noteholders for early repayment. Pro forma net debt/EBITDA per the end of September is 1.8 including assumed proceeds of EUR 100 million from
this bond.
? Backlog for the next 12 months, excluding the non-core marine construction and installation business, decreased by 5.6% on a currency comparable basis. Backlog in the early cycle Marine Site Characterisation business line increased 11.1%.
? Outlook 2017: For the full year Fugro anticipates a double-digit decrease in revenue, with only a single digit decrease in the fourth quarter. The EBIT margin (excluding exceptional items) is expected to improve during the second half of the year compared to the first, resulting in a negative low-single digit
margin for the full year. Cash flow from operating activities after investments will be negative for the full year mainly as a result of the later than anticipated start of a Seabed Geosolutions project, pushing the
related cash collection into early 2018.

Key figures (x EUR million) unaudited
Q3 2017 Q3 2016 reported growth comparable growth*
Revenue 364.0 474.1 (23.2%) (19.5%)
Backlog remainder of the year 348.9 365.6 (4.6%) 9.7%
Backlog next 12 months 867.2 1,055.1 (17.8%) (5.6%)
Net debt/ EBITDA 2.9 1.8
*Revenue corrected for currency effect; backlog corrected for currency effect and for portfolio changes related to marine construction & installation activities

Paul van Riel, CEO: “The offshore oil and gas market appears to be reaching its inflection point. The backlog in our early cyclical marine site characterisation business is up, which is an important early indicator. We are also growing in the building & infrastructure market and have strong positions in the renewables market with good potential for further growth.
This quarter, results were unfortunately impacted by technical downtime of some vessels and hurricanes. The agreement reached in the quarter to divest the trenching business is an important step in aligning our portfolio with the ‘Building on Strength’ strategy and is accretive to results.
We continue to relentlessly implement cost reduction and performance improvement measures to restore results and generate positive cash flow going forward. At the same time we are investing in delivery excellence and innovation to enhance our position with clients.”

Cost reduction and performance improvement measures
Fugro continues to implement cost reduction and performance improvement measures to counter the continued challenging market conditions. In the third quarter:
? Headcount was reduced by a further 102 employees to 10,250.
? Third party expenses (excluding exceptional items) were further reduced by 15.9% on a currency comparable basis.
? Working capital decreased to 12.9% of revenue from 15.1% in the same period last year.
? Capex was EUR 40.3 million (year-to-date EUR 83.4 million), which is significantly higher than current run rate due to the purchase of the REM Etive vessel and investments in Seabed Geosolutions’ Manta® nodes.
As announced at the publication of the half-year results, additional measures are taken to restore profitability, including:
? Significant improvement in the charter terms and conditions of two IRM vessels active in the marine Asset Integrity business line, one of which has been completed in the third quarter and the other is expected to be completed shortly.
? Divestment of the non-core cable-laying and trenching business.
? Winding down of the two remaining long term chartered construction and installation vessels in the
fourth quarter.
? Retirement of two old owned vessels from the fleet in the fourth quarter.
? Down-manning of vessels and vessel support enabled by standardisation and application of new
technologies.
? FTE reduction and more flexible staffing to deal with seasonality.
? Further streamlining of the organisation by standardising work processes, further reducing the number of legal entities and consolidation of support functions into shared service centers.
In total, cost savings and performance improvement measures are expected to result in an annualised contribution to EBITDA of EUR 50 to 70 million during the coming quarters.

Operational review per division
Marine division
(x EUR million) Q3 2017 Q3 2016 reported growth comparable growth*
Revenue 251.6 295.9 (15.0%) (11.4%)
Backlog remainder of the year* 200.3 220.6 (9.2%) 12.6%
Backlog next 12 months* 508.2 646.8 (21.4%) (3.0%)
*Revenue corrected for currency effect; backlog corrected for currency effect and for portfolio changes related to marine construction & installation activities

? Revenue for the quarter decreased by 11.4% at constant currencies to EUR 251.6 million. Vessel utilisation was similar to last year. Pricing remains competitive due to over-supply. The low-single digit EBIT margin was slightly below last year.
? Site characterisation revenue dropped by 18.4% at constant currencies to EUR 100.3 million. The EBIT margin improved quarter-on-quarter, however it was low-single digit negative and below the same period last year. Mainly in Europe, the division was faced with technical down time of some vessels and the late availability of a chartered vessel, leading to project delays. Most of these issues have been resolved. Activities were also hampered by the impact of hurricanes in the Americas.

The total impact of the technical downtime and hurricanes was around EUR 10 million. Results were
positive in all regions, except in Asia Pacific, due to lower utilisation of the geophysical fleet.
? Asset integrity revenue decreased by 6.0% at constant currencies to EUR 151.3 million. The highsingle
digit EBIT margin improved compared to the same period in 2016. Results in Europe and in the
Middle East improved, while Asia Pacific was faced with the later start of a long term IRM contract.
? Significant project awards in the third quarter include:
o A large multi-site site characterisation survey, including geo-consulting for Pemex in Mexico.
o A one-year extension for one of the tripartite IRM vessels in Brazil.
o Two IRM contracts on the North West Shelf of Western Australia, deploying the Rem Etive vessel.
? Backlog for the next 12 months, excluding the non-core construction and installation business,
decreased by 3.0%. Site characterisation backlog grew by 11.1% to EUR 196.8 million. Asset integrity
backlog, excluding the non-core construction and installation business, was EUR 308.7 million, which
is 10.2% lower.
Land division
(x EUR million) Q3 2017 Q3 2016 reported growth comparable growth*
Revenue 115.4 126.5 (8.8%) (4.7%)
Backlog remainder of the year 115.5 124.5 (7.2%) (4.4%)
Backlog next 12 months 279.7 342.9 (18.4%) (15.8%)
*Corrected for currency effect
? Divisional revenue declined as decreasing oil and gas activity in North America and Australia could not be fully offset by increasing activity in the building & infrastructure and power segments. The midsingle digit EBIT margin was slightly up versus the same period last year as overall profitability in Europe, Middle East and Africa improved.
? Site characterisation revenue decreased by 3.4% to EUR 89.9 million due to declining activity levels on LNG facilities in North America partly offset by higher revenue from large infrastructure projects in Europe and the Middle East. The EBIT margin was mid-single digit and similar to the same period last year as lower revenue in the Americas was offset by improvements in all other regions.
? Asset integrity revenue decreased by 9.0% to EUR 25.6 million as a result of reduced oil and gas activity in Australia and the USA. Last year’s revenue also included a large traditional aerial mapping project in Turkey. The road, rail transport and power sectors all experienced comparable or slightly higher revenue, especially for large state highway surveys in the USA. The EBIT margin was low single digit and improved compared to last year on the back of cost management measures.
? Significant project awards in the quarter included:
o Hail and Ghasha project in the Middle East for ADNOC, involving nearshore bathymetric surveys and the collection and analysis of soil samples for new oil and gas installations.
o Heathrow Airport third runway site investigation work in the United Kingdom.
o Three large framework contracts for road inspection in the USA.
o Aerial digital inspection of the power network of SP Energy Networks in Scotland and Wales.
? Backlog for the next 12 months is down 15.8% at constant currencies compared to last year. Site characterisation backlog decreased by 15.3%, caused by a decline in projects for oil and gas facilities in North America. In addition, backlog on two large nuclear power plant projects in Europe was not fully replaced. Backlog in the Middle East increased. Asset integrity backlog dropped by 17.5%, caused by continued focus on higher margin sectors, reduced oil & gas activity and the completion of the large traditional aerial mapping project mentioned above.

Geoscience division
The Geoscience division almost fully consists of Fugro’s 60% stake in Seabed Geosolutions (fully
consolidated) and some indirect interests in Australian exploration projects, via Finder Exploration.
(x EUR million) Q3 2017 Q3 2016 reported growth comparable growth*
Revenue 0.0 51.7 (100.0%) (100.0%)
Backlog remainder of the year 33.1 20.5 61.5% 69.6%
Backlog next 12 months 79.3 65.4 21.3% 26.9%
*Corrected for currency effect

? By the end of June, the shallow water crew had completed its operations in the United Arab Emirates for ADNOC. Following this completion, no revenue was generated during the third quarter. After a permit related delay, the ocean bottom node crew recently started its reservoir monitoring survey at the Lula oil field in Brazil, as a follow up to the first survey on the same location in 2015.
? In the third quarter, Seabed Geosolutions was loss-making caused by an absence of revenues, mitigated by continued stringent cost saving measures.
? Compared to the same period last year, the 12-month backlog increased by 26.9% on a currency comparable basis. The pipeline of potential projects is solid, confirming an anticipated growth of the market in 2018.
? Early 2018, Seabed Geosolutions will start the industry’s largest ever ocean bottom node survey in the Santos Basin in Brazil, for which it will use its new Manta® node technology and associated efficiency enhancing technologies.

Financial position
Cash flow from operating activities after investments was slightly positive. The outflow related to the purchase of the REM Etive vessel was largely offset by the proceeds from the sale and lease back of an office building in UK. An improvement in working capital contributed positively to the quarterly cash flow.
Working capital was 12.9% of revenue compared to 15.1% a year ago. Days of revenue outstanding was 101 days, up three days compared to 98 at the end of September 2016.
Net debt/EBITDA increased from 2.2 at the end of June to 2.9 at the end of September, within the covenant requirement of not exceeding 3.0, and is expected to improve in the fourth quarter of 2017.
As a precautionary measure, Fugro obtained a waiver for this covenant for the third quarter. A waiver was also obtained for the minimum EBITDA requirement related to the sale and lease back of two geotechnical vessels, which Fugro did not meet per the end of the third quarter. The fixed charge cover was 1.9 compared to 2.3 at the end of June, fulfilling the covenant requirement not to fall below 1.8. As a matter of financial prudency, today Fugro launches a subordinated convertible bond of EUR 100 million. The proceeds will be offered to the USPP noteholders for early repayment. The bond results in increased headroom under the financial covenants, increased financial flexibility, reduced interest expense and extension of the debt maturity profile. Pro forma net debt/EBITDA per the end of September amounts to 1.8 including the assumed proceeds of EUR 100 million from this bond.

Outlook
The company is seeing signs of a stabilising oil and gas environment. In the building & infrastructure and renewables markets Fugro expects continued growth, driven by global economic growth, population growth, urbanisation and an ongoing shift towards renewable energy.
For the full year 2017, Fugro anticipates a double-digit decrease in revenue, with only a single digit decrease in the fourth quarter. The EBIT margin (excluding exceptional items) is expected to improve during the second half of the year compared to the first, resulting in a negative low-single digit margin for the full year. Cash flow from operating activities after investments will be negative for the full year mainly as a result of the later than anticipated start of a Seabed Geosolutions project, pushing the related cash collection into early 2018. Capex will be around EUR 100 million.

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE PROHIBITED BY APPLICABLE LAW.


Fugro announces offer of EUR 100 million subordinated convertible bonds
Fugro NV (“Fugro”), the world’s leading, independent provider of geo-intelligence and asset integrity solutions for large buildings, industrial facilities, infrastructure and natural resources, announces today an offer (the “Offering") of EUR 100 million subordinated unsecured convertible bonds due 2024 (the “Bonds").

The proceeds will be offered to the United States Private Placement (USPP) noteholders for early repayment, resulting in additional headroom under the financial covenants, reduced interest expense, increased financial flexibility and extension of the debt maturity profile. Fugro will use any remaining proceeds to repay senior debt.

The Bonds will be convertible into certificates (certificaten van aandelen) representing ordinary shares in the capital of Fugro (the “Certificates”). In case of an insolvency event, any claims of holders of the Bonds against Fugro will be subordinated to claims of certain of Fugro’s senior creditors. In addition, there will be restrictions on certain payments under the Bonds if there is a default in respect of claims of certain senior creditors.

The Bonds are expected to carry a coupon in the range of 4.0% to 4.5% per annum, payable semi­annually in arrear in equal instalments on 2 May and 2 November in each year, and a conversion premium of 40% to 50% over the volume weighted average price of the Certificates quoted on Euronext Amsterdam on 30 October 2017.

The Bonds will be issued at 100% of their principal amount. Holders of the Bonds will be entitled to require an early redemption of their Bonds on the fifth anniversary of their issue, at the principal amount. Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed at their principal amount on or around 2 November 2024.


Upon exercise of their conversion rights, and subject to the Cash Alternative Election (as defined below), holders will receive Certificates, as determined by the then prevailing conversion price. Prior to receiving the relevant authorisation to adjust Fugro’s authorised share capital to enable Fugro to settle the Bonds entirely in Certificates (assuming the exercise in full of all conversion rights), Fugro will have the option to settle any conversion rights in cash (the "Cash Alternative Election") and/or Certificates. The relevant authorisations are expected to be in place within 6 months from the Issue Date (as defined below). Once the relevant authorisations have been obtained, the Cash Alternative Election will no longer be available. Fugro will have the option to convert all but not some of the outstanding Bonds into Certificates at the then prevailing conversion price at any time from 23 November 2020, if the value of the Certificates underlying a Bond exceeds EUR 150,000 for a specified period of time.

The Bonds are expected to be issued on 2 November 2017 (the “Issue Date”). Application is expected to be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange no later than 30 days after the Issue Date.
The final terms of the Bonds are expected to be announced later today.


HSBC is acting as Sole Global Coordinator and Sole Bookrunner on the Offering. ABN AMRO, ING and Rabobank are acting as Co-managers.

In addition, Fugro intends to conduct a consent solicitation exercise in respect of its EUR190m Subordinated Convertible Bonds due 2021 (ISIN XS1508771216) (the “2021 Bonds”), to amend the subordination provisions of the 2021 Bonds so that they rank fully pari passu with the Bonds. The consent solicitation exercise will be the subject of a separate announcement by Fugro at the relevant time. The issue of the Bonds is not conditional on the launch or completion of any such exercise.

tijd 10.05
Fugro EUR 10,50 -1,25 vol. 2,4 milj.

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE PROHIBITED BY APPLICABLE LAW.


Fugro successfully places EUR 100 million subordinated convertible bonds
Fugro N.V. (“Fugro”), the world’s leading, independent provider of geo-intelligence and asset integrity solutions for large buildings, industrial facilities, infrastructure and natural resources, announces today the successful placement of its offering (the “Offering") of EUR 100 million subordinated unsecured convertible bonds due 2024 (the “Bonds").


The proceeds will be offered to the United States Private Placement (USPP) noteholders for early repayment, resulting in additional headroom under the financial covenants, reduced interest expense, increased financial flexibility and extension of the debt maturity profile. Fugro will use any remaining proceeds to repay senior debt.
The Bonds will be convertible into certificates (certificaten van aandelen) representing ordinary shares in the capital of Fugro (the “Certificates”). In case of an insolvency event, any claims of holders of the Bonds against Fugro will be subordinated to claims of certain of Fugro’s senior creditors. In addition, there will be restrictions on certain payments under the Bonds if there is a default in respect of claims of certain senior creditors.


The Bonds will carry a coupon of 4.5% per annum, payable semi­-annually in arrear in equal instalments on 2 May and 2 November in each year. The initial conversion price will represent a premium of 42.5% over the volume weighted average price of the Certificates quoted on Euronext Amsterdam on 30 October 2017.
A separate announcement will be released after market close today confirming the volume weighted average price and the conversion price.
The Bonds will be issued at 100% of their principal amount. Holders of the Bonds will be entitled to require an early redemption of their Bonds on the fifth anniversary of their issue, at the principal amount. Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed at their principal amount on or around 2 November 2024.


Upon exercise of their conversion rights, and subject to the Cash Alternative Election (as defined below), holders will receive Certificates, as determined by the then prevailing conversion price. Prior to receiving the relevant authorisation to adjust Fugro’s authorised share capital to enable Fugro to settle the Bonds entirely in Certificates (assuming the exercise in full of all conversion rights), Fugro will have the option to settle any conversion rights in cash (the "Cash Alternative Election") and/or Certificates. The relevant authorisations are expected to be in place within 6 months from the Issue Date (as defined below). Once the relevant authorisations have been obtained, the Cash Alternative Election will no longer be available. Fugro will have the option to convert all but not some of the outstanding Bonds into Certificates at the then prevailing conversion price at any time from 23 November 2020, if the value of the Certificates underlying a Bond exceeds EUR 150,000 for a specified period of time.
The Bonds are expected to be issued on 2 November 2017 (the “Issue Date”). Application is expected to be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange no later than 30 days after the Issue Date.
HSBC acted as Sole Global Coordinator and Sole Bookrunner on the Offering. ABN AMRO, ING and Rabobank acted as Co-managers.
In addition, Fugro intends to conduct a consent solicitation exercise in respect of its EUR190m Subordinated Convertible Bonds due 2021 (ISIN XS1508771216) (the “2021 Bonds”), to amend the subordination provisions of the 2021 Bonds so that they rank fully pari passu with the Bonds. The consent solicitation exercise will be the subject of a separate announcement by Fugro at the relevant time. The issue of the Bonds is not conditional on the launch or completion of any such exercise.