1Business Environment

1.1At a Glance

1.1.1Message from the CEO

2021 has been a landmark year for SBM Offshore. We have performed well in progressing our project portfolio, increasing our order book, advancing on our ambitions, and managing significant growth. All of this while taking on the challenges that came with the COVID-19 pandemic.

What we have achieved over the last year is down to the dedication and commitment of SBMers to getting the job done. It has been an intense year, and many of our employees have withstood immense pressure and stress in such difficult circumstances. We have done and will continue to do all we can to support and care for our teams across the globe. They can be rightly proud of their achievements this year.

Overall, our project portfolio is going well: we finalized the construction of FPSO Liza Unity in Singapore at the end of the summer and are now at the commissioning stage, in line with the pre- COVID-19 schedule commitment. On FPSO Sepetiba, we had some significant challenges during construction, but the project is adapting well to these new conditions. We won two new awards in Brazil: the FPSOs Almirante Tamandaré and Alexandre de Gusmão. The construction of these and the FPSO Prosperity are on track and the Fast4Ward^® hull allocated to the Yellow Tail project has been successfully delivered, despite COVID-19 and the consequent supply-chain challenges.

By adding the production capacity of the FPSOs under construction to those we already operate, we expect to produce above 2% of the world’s oil with a significantly lower environmental footprint compared to the wider industry. This is testament to the technology developed through our Fast4Ward^® program and the imagination of the people who embarked on this journey in 2014. Reducing our environmental impact is also the premise of our emissionZERO^® program.

The ongoing digitalization of our operating experience is also sustaining our performance, enabling us to continually learn and refine the operations and environmental footprint of our assets around the world. This gives us a competitive edge and helps us bring new solutions and new ways of working to our clients, both in fossil and renewable energies.

Financially, we delivered results in line with expectations set during the year. The new awards saw our backlog of contracted orders increase to a record year-end level of US$29.5 billion. These contracts, supporting fields with very low break evens and lower than average emissions, provide a cashflow foundation for the next three decades.

On the funding side, we managed to secure US$4.8 billion of debt, all related to facilitating the funding of growth through our FPSO construction projects in hand. This demonstrates the confidence of our financing stakeholders in SBM Offshore’s current and future strength. This year, we also increased our dividend by 10% to US$165 million and in addition we completed a US$180 million share repurchase: this aggregate US$345 million marks a record annual return to shareholders and brings the total we returned over the past six years to over US$1.2 billion. This further illustrates the robustness of the Company, the quality of our execution and the appropriateness of our strategic positioning.

The solid management of our traditional portfolio is what enables SBM Offshore to invest in tomorrow’s technologies: our performance today underpins our future success. We are not in the energy business; we are in the energy transition business. We are firmly focused on radically transforming our business to accompany the energy industry as it evolves away from fossil fuels towards a renewable future.

Our strategy is two-fold: firstly, to reduce emissions, and secondly, to develop solutions for renewable energy production. It’s not just about making clean energy, it’s about making all energies safer, cleaner, and accessible.

On the first goal, enhanced by our emissionZERO^® program, we are steadily reducing our environmental footprint. FPSOs under construction are already set to achieve lower levels of CO₂ per barrel of oil produced, and we continue to invest in reducing this footprint even further in the future. At the same time, we are working to bring existing assets up to a better standard. In this way we are reducing the environmental impact of hydrocarbons through the inevitable transition period.

On the second goal, we have made significant progress this year on our floating offshore wind offer. We are building the first three TLP (Tension-Leg Platform) facilities for the Provence Grand Large project, on behalf of client EDF Renouvelables. Development now is about honing costs to make floating wind competitive, to enable the transition to be accelerated.

We believe there is a significant market potential for floating offshore wind, which dovetails neatly with our strengths in engineering and technology, project management, operations, and financing. We are confident that our skills and experience in complex engineering in a marine environment will be needed throughout the years of radical transformation in the energy industry. We have anticipated and prepared for the future and we are ready to support the transition, both in terms of improving today’s technologies and in developing tomorrow’s.

In the coming ten years, we expect to see the beginning of a commercially viable market for floating offshore wind and a shift in our activities from FPSOs towards this new market. By the mid-2030s, we can even envisage a tipping point, where more new activity will come from floating offshore wind than our traditional portfolio.

As a company, we have embraced the energy transition and have plotted our path into the future. We are well-positioned; we are challenging ourselves to become better every day and we are improving all the time. We are firmly establishing the long-term future of SBM Offshore by being profitable and investing at the right time in the technologies of the future that complement our skills and expertise.

I am confident in our ability to meet the energy challenge and to be at the forefront of the transformation!

1.1.22021 In Brief

A US$850 million non-recourse senior secured notes transaction was successfully priced. The issuer of the notes is the subsidiary company Guara Norte, which owns FPSO Cidade de Ilhabela and in which SBM Offshore has a 75% interest.

Full Year 2020 Earnings: guidance was delivered, year-on-year net increase in backlog of almost US$1 billion and a dividend of US$165 million being an increase of 10% on the previous year.

SBM Offshore signed a Letter of Intent (LoI) with Petrobras for a 26.25 year lease and operate contract for the FPSO Almirante Tamandaré, to be deployed at the Búzios field offshore Rio de Janeiro, Brazil. We will design and construct the FPSO using our industry leading Fast4Ward^® program.

During the Annual General Meeting Douglas Wood was re-appointed as member of the Management Board and Chief Financial Officer and Ingelise Arntsen was appointed as member of the Supervisory Board.

First Quarter 2021 Trading Update: despite COVID-19 strong operating performance and major projects under construction progressing as expected. Fleet operational uptime was 98.6% over the quarter. Financial guidance was maintained.

SBM Offshore completed the project financing of the Prosperity (FPSO) for a total of US$1.05 billion.

SBM Offshore signed, following a binding Letter of Intent (LoI), contracts with Petrobras for the 26.25 year lease and operation of FPSO Almirante Tamandaré.

SBM Offshore signed a Letter of Intent (LoI) with Petrobras for a 22.5 year lease and operate contract for the FPSO Alexandre de Gusmão, to be deployed at the Mero field offshore Arraial do Cabo, Rio de Janeiro state, in Brazil. We will design and construct the FPSO using our industry leading Fast4Ward^® program.

Half Year 2021 Earnings: financial results in line with management expectation, with record-level US$29.5 billion backlog and increased shareholder returns thanks to launch of EUR150 million share repurchase program. Announcement of the Company’s renewable energy ambition to co-develop or participate as a Floating Offshore Wind technology or turnkey provider in 2GW of projects over the next decade.

SBM Offshore completed the project financing of FPSO Sepetiba for a total of US$1.6 billion, which is the largest project financing in our history.

We also secured a US$635 million bridge loan facility for the financing of the construction of FPSO Almirante Tamandaré.

Liza Unity (FPSO) was the first FPSO in the world to be awarded a SUSTAIN-1 notation.

SBM Offshore completed its EUR150 million 2021 share repurchase program.

Third Quarter Trading Update: strong performance despite ongoing COVID-19 challenges, financial results in line with management expectations.

SBM Offshore was awarded contracts by ExxonMobil to perform Front End Engineering and Design (FEED) for an FPSO for the Yellow Tail development project in Guyana. Subject to Guyana government approvals and project sanction and release of second phase of work by the client, SBM Offshore will design and construct the FPSO using its industry leading Fast4Ward^® program.

Following the binding Letter of Intent (LoI), SBM Offshore signed contracts with Petrobras for the 22.5 years lease and operation of FPSO Alexandre de Gusmão.

SBM Offshore secured a US$620 million bridge loan facility for the financing of the construction of FPSO Alexandre de Gusmão.

1.1.3Overall View

SBM Offshore believes the oceans will provide the world with safe, sustainable and affordable energy for generations to come. We share our experience to make it happen. The challenge in producing safe, sustainable and affordable energy is well recognized, particularly by SBM Offshore’s stakeholders, with whom SBM Offshore works on areas important to them, called material topics, to address that challenge. These topics are the basis for SBM Offshore’s objectives and strategy, and are the criteria against which it measures its performance. The table below shows the connection between these elements and are explained in the rest of the Annual Report.

1.2Business Context

1.2.1Markets and Activities

SBM Offshore provides floating production solutions to the offshore energy industry, both in hydrocarbon and in renewable market segments. SBM Offshore’s main activities to date are the design, supply, installation, operation and life extension of Floating Production Storage and Offloading (FPSO) vessels. These are either leased to clients or supplied on a turnkey sale basis. SBM Offshore is also active in the renewable energy market, with a dedicated New Energies & Services (NES) division working on floating offshore wind and wave energy solutions, as well as investing in research and development of products for future markets.

In order to maintain its leading position in its core markets, SBM Offshore focuses on:

• Leveraging SBM Offshore’s experience and business model to strengthen its position and to develop sustainable business in new areas.

• Transformation programs to increase return for customers: Fast4Ward^®, focusing on better performance, delivered faster; emissionZERO^®, focusing on the decarbonization of products; and Digital Transformation, to optimize SBM Offshore’s ways of working and create new services.

• SDG-related targets for the short- and long-term, and delivering on the roadmaps to achieve these targets.

Based on these guidelines, SBM Offshore is developing its product portfolio within the various energy sectors.

SBM Offshore delivers FPSOs with production volumes typically around 200,000 barrels of oil per FPSO per day. A FPSO processes well fluids into stabilized crude oil for temporary storage on board, before being transferred to a shuttle tanker for export from the field. Oil and gas enhanced recovery systems − such as water injection, gas injection, chemical injection and gas lift systems − are used to improve production levels. SBM Offshore’s latest FPSO designs include CO₂ removal from gas streams for reinjection into the well offshore.

SBM Offshore is taking a disciplined and selective approach to market opportunities focusing on the main FPSO markets of Brazil and Guyana that provide for double resiliency − i.e. both relatively low break-even prices and low GHG-emission intensity. SBM Offshore is also looking to develop business in other adjacent regions. Looking ahead, around 25 FPSO projects could reach FID between 2022-2024.

To contribute to double resiliency – SBM Offshore executes its Fast4Ward^® and emissionZERO^® programs, of which further detail is provided in sections 2.1.4 and 2.1.7.

SBM Offshore also has dedicated product lines to provide offshore installation services as well as specific floating equipment and products such as Turret Mooring Systems (TMS) and offshore (off)loading Terminals.

SBM Offshore is the recognized technology provider for Turrets and Mooring Systems (TMS). The Company provides the offshore industry with a complete range and variety of solutions delivered through a full EPCI product lifecycle.

The Catenary Anchor Leg Mooring (CALM) or Single Point Mooring (SPM) terminal is a floating buoy that performs the dual function of keeping a tanker moored and transferring fluids while allowing the ship to weathervane. SBM Offshore provides full lifecycle solutions for terminals including design, engineering, construction, installation and aftersales services.

SBM Offshore delivers tailored solutions for floating unit mooring, flexible flowline and subsea structure installation works. SBM Offshore, together with its joint venture partner, own and operate a dedicated multi-purpose deep water construction vessel, the Normand Installer.

Floating Offshore Wind is opening new possibilities for wind power production locations and will play a critical role in the transition to a cleaner energy supply. Floating offshore wind turbines enable access to deeper water compared to conventional fixed-bottom wind turbines, which expands the viable area for wind energy development, reduces visibility from shore, and can potentially be located in areas with higher and steadier wind characteristics. The FOW market is developing worldwide, in anticipation of future commercial projects. SBM Offshore has been working on Floating Offshore Wind since 2014 and is currently executing its first pilot project, leveraging its experience in EPCI of floating solutions and mooring systems. SBM Offshore is also co-developing Floating Offshore Wind projects and securing seabed rights and relevant permits, together with partners.

While the worldwide resources of coastal wave energy are abundant, successful attempts to harness this energy from the oceans have remained elusive. Since 2009, SBM Offshore has been developing the next generation of wave energy conversion technology, called WEC S3^®. Through direct conversion of the kinetic wave energy into electricity using Electro Active Polymers (EAP), this breakthrough technology addresses the limitations identified in conventional wave energy devices.

The WEC S3^® technology has been successfully developed and tested in SBM Offshore’ s own R&D Laboratory in France. The next step towards scale up and industrialization is to successfully deploy and test a prototype at sea, that will be connected to the electricity grid. SBM Offshore has secured a test location offshore Monaco and is working diligently towards achieving this milestone.

The world’s demand for sustainable energy solutions is increasing and energy transition has been put in the spotlight since climate change is largely recognized as an urgent agenda globally. The energy system is in evolution. Solar PV, wind energy, hydrogen-based technology, bio-fuels and Carbon Capture Utilization and Storage are recognized and envisioned as the frontiers going forward. SBM Offshore is investing in research and development of products within selected segments that support this energy transition.

SBM Offshore commits to a strategy that is compatible with the transition to net-zero by 2050 and takes meaningful actions, not only for new technology development, but also to re-purpose oil & gas facilities and solutions to be used in the decarbonization business. In this way, the technology and experience are transferred in the fastest way to contribute to the energy transition. For example, SBM Offshore has developed a jetty-free Tower Loading Unit (TLU) which can aid in remote areas, such as islands, to switch from coal to gas, producing power from cleaner fuel. This jetty-less fluid transfer solution can have applications in nascent energy markets, among which Carbon Capture Utilization and Storage and Ammonia Transport are the areas of particular promise.

Almost two years after the COVID-19 pandemic changed the world, the demand for oil recovered to near pre-COVID-19 levels and oil prices reached multi-year highs. Whereas in 2020, there were only three FPSOs awarded in the market, in 2021 this figure increased to nine FPSOs. Most of these projects are in SBM Offshore’s key regions of Brazil and Guyana.

During 2021, the energy transition and the demand for lower-emission solutions have been accelerating, with clients repositioning and adjusting their strategies towards operating in a carbon-neutral environment. In addition, there is an increasing focus across most sectors on Environmental, Social and Governance (ESG) targets.

According to the United Nations’ world population projection, by 2040, the world population will surpass 9 billion people, with 65% of the total population living in big cities close to the oceans. Global energy demand is set to grow by more than 25% in the coming decades. While oil and natural gas will still play a significant part in the primary energy mix, renewable energy is increasing its share. The demand for oil is expected to continue to grow in the coming years, after which it should plateau towards the end of the decade. Despite this, field depletion plays an important role for new greenfield projects to be sanctioned. Supply gaps are probable and offshore deep water oil production will continue in the years to come. Geopolitical events make energy supply and demand inherently volatile. Section 1.4.3 presents climate change scenarios which provide insight into various possible developments relating to decelerated and accelerated energy transition paths.

SBM Offshore expects that, in the coming years, a combination of a robust technology portfolio, strong project management and engineering capabilities, operations expertise and financing capabilities will be needed to deliver sizeable deep-water projects across the energy mix. In addition, its success will depend on partnering with other companies similarly committed to its energy transition strategy and activities, with a focus on lifecycle value of projects, from early client engagement until end of field recycling phases.

1.2.2Stakeholders and Material Topics

SBM Offshore values its stakeholder network, which consists of people and organizations with high standards in life and business. This network is the basis for a sustained and sustainable business.

The main stakeholders are SBM Offshore’ clients, employees, business partners, suppliers, shareholders and banks (lenders). Other important stakeholders are regulators, class society organisations, yards, export credit agencies, local communities, non-governmental organizations (NGOs), industry associations, universities, researchers and potential investors. Throughout the year, SBM Offshore engages with these stakeholders and listens to their feedback, as part of its daily business.

In 2021, engagement through digital means was key as the pandemic continued. The process is explained in section 5.1.2, with example engagement mentioned in below table.

Example engagements during 2021

In order to understand stakeholder interests and the impact SBM Offshore has, SBM Offshore conducts interviews with stakeholders to understand which topics are of importance to stakeholders. This assists in determining which topics become the Material Topics against which SBM Offshore measures and assesses its performance, with the outcome explained in this report. These are topics considered a) to influence stakeholder decisions and b) to have significant economic, environmental and social impact. The interviews are carried out to reinforce SBM Offshore’s strategy and amend if necessary, in order to obtain an updated overview of the Material Topics. The below figure illustrates the process. Further explanation is given in section 5.1.2.

The 11 material topics are Ethics & Compliance; Employee Health, Safety & Security; Human Rights; Energy Transition; Economic Performance; Market Positioning; Operational Excellence; Emissions; Innovation; Digitalization and Retaining & Developing Employees. Definition of these and other key topics are found in section 5.1.2. Compared with 2020, the material topics of Energy Transition and Emissions increased in importance and the key topic, Climate Change Management & Adaptation, increased in importance as well. Human Rights became a Material Topic, where previously it was addressed as part of the Employee Health, Safety & Security (HSS) topic. In interviews with some stakeholders at yards and client organizations, Human Rights was mentioned specifically when discussing employee health and safety. Furthermore, the management of SBM Offshore has evaluated this topic as having a higher economic and social impact, owing to increased construction activity and the effects of the COVID-19 pandemic (see section 2.1.3).

Ethics & Compliance and Employee Health, Safety & Security are seen as prerequisites to be in business. Vendors and partners especially rank both topics very highly and aspire to comply with SBM Offshore’s high standards. The regulatory and NGO institutions ranked Ethics & Compliance as the most important topic. Clients put Employee Health, Safety & Security first, with Ethics & Compliance in the top five. Clients see Process Safety Management as a critical topic in ensuring high safety standards and mitigating the risk of hazardous accidents. Employee Health remains a critical topic during the COVID-19 pandemic, with increased attention now needed for Mental Health & Well-being.

On Human Rights, SBM Offshore commits to high standards, the Company being aware of potential risks in its supply chain. SBM Offshore is carrying out a Human Rights Program, including supply chain screening and due dilligence activities. Further detail is provided in section 2.1.3.

A topic that has gained importance is the Energy Transition. Many stakeholders agree that it is one of the key challenges this industry faces, and is critical in dealing with climate change-related challenges, as well as providing a source of future economic value.

Stakeholders see a role for SBM Offshore in applying its experience, technology and capability to make the energy transition happen. Employees value the commitment of SBM Offshore as it allows them to work on renewable energy and other innovative, lower carbon solutions. Furthermore, investors and lenders are interested in working with industry players on the development of new energy solutions. Supply chain partners of SBM Offshore are typically involved in gas and renewable energy developments that contribute to cleaner energy supply.

When it comes to Economic Performance, SBM Offshore’s integrated business model is seen as a strength. Clients and lenders see strong benefits in an integrated contractor that can manage complex projects and risks plus offer financing solutions to enable large offshore developments. A robust business model is critical in navigating shorter market cycles and increased volatility. Market Positioning is seen as driver for future economic performance and is referred to as key enabler in attracting and retaining talent. Strong ranking in ESG ratings is seen as a positive contributor to market positioning.

For most stakeholders, Operational Excellence & Quality drive predictability, which is especially sought after in CAPEX- and resource-intensive projects with a global footprint. The same applies for fleet operation services and managing a global supply chain. Class society companies − providers of classification and certification services − take a specific interest in this area. Joint venture partners of SBM Offshore also value operational excellence & quality as they enable predictable benefits from their stake in the asset.

Emissions, both air- and ocean-related emissions, and particularly greenhouse gas (GHG) emissions, dominate concerns on this topic. Clients and vendors are increasingly committing to net-zero ambitions, in line with the Paris Agreement, with programs in place to reduce CO₂ and methane emissions.

Innovation matters to SBM Offshore’s stakeholders as a source of future value. Stakeholders refer generally to technology development – although innovation is seen as broader. For instance, stakeholders see business model transformation – such as SBM Offshore’s Fast4Ward^® program – as innovation. Regarding Digitalization, stakeholders see strong potential in leveraging data and digital technology to define new businesses and ways of working, as well as partially mitigating the challenge of attracting talent to the industry.

Retaining & Developing Employees is a material topic for multiple reasons, most importantly because large resource-intense projects such as offshore field developments rely heavily on best practices and past experience. Experienced staff increase efficiency and reduce risk in projects.

SBM Offshore’s ongoing engagement with stakeholders, as well as the interviews, has reinforced SBM Offshore’s vision, values and strategy. It also confirms some of the risk mitigations undertaken by SBM Offshore, as highlighted in section 1.4.

Above all, the Material Topics indicate potential conflicting dilemmas, the key ones being:

1. The trade-offs between safe, sustainable and affordable in developing energy projects, especially the continued need for increasingly sustainable hydrocarbon-based energies against global ambitions on climate change. The trade-offs are carefully balanced in taking a course compatible with net-zero by no later than 2050.

2. The trade-offs within and between different stakeholders as interests differ between groups, but also at times, within same stakeholder groups.

Having the right vision and values provides a strong framework for balancing these trade-offs, setting objectives, defining a strategy and managing performance accordingly.

1.3Strategy and Value Creation

1.3.1Vision and Values

Through its vision and subsequent actions, SBM Offshore helps societies and other stakeholders to accomplish the energy transition. Safe, sustainable and affordable energy for generations to come will require renewable energy and cleaner forms of fossil energy – provided by leading companies with the right ethics. SBM Offshore is committed to this, by addressing climate change without interrupting the essential supply of energy needed to support societies. The contribution and participation of global energy companies and service providers such as SBM Offshore are essential to achieve a responsible energy transition. Many people, especially in less developed economies, depend on the relevant experience and resources of those companies. This is where SBM Offshore’s products can play a role. SBM Offshore is partnering with others for this purpose, sharing experience to make it happen.

SBM Offshore’s core values reflect its long history of industry leadership. They are the essence of SBM Offshore, defining who each SBMer is and how SBM Offshore works. The values create the company culture, which guides each employee to help achieve SBM Offshore’s vision wherever SBM Offshore operates around the world.

SBMers act professionally and in an ethical, honest and reliable manner. Transparency, doing the right thing and consistency are essential to the way SBM Offshore behaves towards all of its stakeholders.

SBMers respect and care for each other and for the community. Employees value teamwork and diversity. SBM Offshore listens to all its stakeholders. Health, safety, security and the environment are paramount in everything SBM Offshore does.

SBMers have an entrepreneurial mindset in everything they do. They deliver innovative and fit-for-purpose solutions with passion. In doing so, SBM Offshore aims to exceed its clients’ expectations and proactively achieve sustainable growth through balancing risks and rewards.

SBMers are all accountable for delivering on their commitments and pursuing SBM Offshore’s objectives with energy and determination. Quality is of the essence. SBMers say what they do and do what they say.

1.3.2Ambition and Strategy

SBM Offshore has developed its ambition and a strategy framework by developing a strong understanding of mega trends, with associated scenario-planning and detailed strategies. Combined with feedback from stakeholders, as defined in 1.2.2, SBM Offshore’s strategy ensures stakeholder needs are addressed.

SBM Offshore’s ambition between now and 2030 is to grow and create long-term value for its stakeholders. We refer to this as Ambition 2030. In order to do so, it has set targets and indicators in three main areas: grow free cashflow over the period, ensure a steady flow of new contracts within SBM Offshore’s core business (2+ FPSOs a year) and position SBM Offshore in the gas and renewables market (to achieve >2 gigawatt (GW) floating offshore wind installed or under construction by 2030).

In line with its vision and ambition, SBM Offshore’s strategy is based on three strategic pillars: Optimize, Transform and Innovate:

• Optimize – Improving competitiveness and delivering the backlog, with HSSE and process safety as main priorities; ensuring the highest standards of compliance, operational excellence and quality; focusing on business continuity and on cash generation and preservation.

• Transform – Investing in transformation programs and unlocking value for SBM Offshore’s stakeholders: Fast4Ward^®, Digital Transformation, Sustainability and emissionZERO^®.

• Innovate – Preparing for the future, investing in technology and innovation, and focusing on the energy transition.

SBM Offshore manages its performance through a balanced scorecard framework.

1.3.3Value Creation

Supplying safe, sustainable and affordable energy from the oceans is the basis for long-term stakeholder value, which is defined by the 11 material topics and which form the basis for sustained value creation. Value is defined by the results achieved on the material topics, the associated benefits for SBM Offshore’s stakeholders and the impact SBM Offshore has on Sustainable Development Goals. The outcomes are described in sections 2.1 and 2.2.

In order to create value for stakeholders, SBM Offshore assigns resources to activities along the project lifecycle. The value creation model, below, connects stakeholder expectations with SBM Offshore’s activities and its overall impact on the external environment. For each material topic, the model describes how SBM Offshore deploys capital, which flows into the various activities of the business model. The outputs from the business model create value for stakeholders and have SDG contributions.

As an ocean energy provider, SBM Offshore has a clear understanding of the role it plays in the industry value chain and continuously assesses the greatest possibilities from the marketplace.

At SBM Offshore, there is a belief that there is a value-premium for investing in the future. Business activities are organized to maximize the societal and financial values of SBM Offshore’s stakeholders.

SBM Offshore sustains value through three value platforms: Ocean Infrastructure, Growing the Core and New Energies & Services.

• SBM Offshore’s Ocean Infrastructure is represented by SBM Offshore’s operations on behalf of its clients. These have become increasingly efficient, with a lower carbon footprint and a leading uptime and safety track record. This platform is evolving with new generations of products and the recordable contractual backlog provides cash flow visibilities up to 2050.

• Growing the Core is the value platform for business transformation of the FPSO business. The organization envisions itself as a leader and stays resilient in both competitiveness, with Fast4Ward^®, and in having a low carbon footprint, with emissionZERO^®. SBM Offshore continually brings to market improved value propositions.

• New Energies – Through the delivery of this third value platform, SBM Offshore takes ownership of the energy transition. SBM Offshore’s strategy is to position itself in this growing market sector as the energy mix evolves to give renewables a more dominant role. SBM Offshore is investing in technology development for renewable energy, especially in floating offshore wind and wave energy. New Energies also covers activities that leverage SBM Offshore’s operational data, digital solutions and expertise to continue to deliver value to its customers.

SBM Offshore’s business model is structured around the above value platforms to ensure safety, cost optimization, product transformation and growth.

SBM Offshore’s clients typically control the complete value chain, from the initial offshore exploration phase to the physical distribution of energy. SBM Offshore adds value along the full lifecycle of ocean infrastructure projects, including operations & maintenance services. SBM Offshore also provides energy distribution solutions, such as CALM buoys and digital solutions through its Smart Digital Services offering.

SBM Offshore engages in Research and Development. Business Development works on early market opportunities and product development on further improvement of SBM Offshore’s solutions and the commercial management of prospects. After commercial success, the Project Execution phase begins, during which SBM Offshore executes Engineering, Procurement, Construction & Installation (EPCI). Specific to the renewable energy business is the co-development of Floating Offshore Wind projects and securing seabed rights and relevant permits in cooperation with the client.

Engineering & Design delivers conceptual studies, basic design and detailed design through in-house resources. Procurement of equipment and services represents a substantial part of the total cost of constructing a floating production system. SBM Offshore has an integrated supply chain, in line with its Fast4Ward^® principles, partnering with suppliers to execute projects.

While maintaining responsibility for delivery and project management, SBM Offshore outsources most construction activities and has agreements in place with yards that allow delivery of floating production systems through different execution models and local content requirements. The installation of floating facilities is carried out using specialized installation vessels and requires specific engineering expertise and project management skills.

SBM Offshore provides operation and maintenance services on behalf of its clients. This activity creates value for clients, as the uptime performance of the facility directly impacts the amount of energy produced.

For FPSOs these services can be based on fixed lump sum or reimbursable contracts.

At the end of the lifecycle, facilities are decommissioned and recycled. For FPSOs, SBM Offshore applies the Hong Kong Convention rules and the principles of the EU Ship Recycling Regulation − or equivalent standards should EU Ship Recycling Regulation not be applicable − to recycle its units, using certified and regularly audited recycling yards. The processes surrounding the end-of-life recycling of products are vital to sustainability and SBM Offshore works to ensure that green recycling is carried out and that internationally-recognized regulations are followed. SBM Offshore has a ’Vessel Decommissioning and Recycling Process’, which details the key steps in conducting the green recycling of an offshore unit.

SBM Offshore works with recycling facilities that have adequately trained management and staff and the required health and safety procedures in place. SBM Offshore’s process includes inspecting all vessels for hazardous materials and ensuring a controlled removal and disposal of such materials as part of the decommissioning and recycling of the vessel. SBM Offshore considers the environmental and social impacts related to the decommissioning and recycling activities of each vessel, with the objective of minimizing adverse impact.

SBM Offshore ensures optimum results for clients by offering various financing models:

• Under a Lease & Operate contract, the facility is sold to asset-specific companies to charter the asset for the client throughout its lifecycle. The project debt-financing is arranged at the asset-specific company level, based on the facility’s value (which is based on construction costs and a margin). SBM Offshore’s Revolving Credit Facility is generally used to cover the period before project debt-financing is in place. SBM Offshore tends to optimize debt-financing in asset-specific companies on a ’non-recourse’ basis, in order to optimize return on equity and achieve an appropriate balance of risk allocation. Upon acceptance of the production system by the client, generally upon production start, SBM Offshore’s corporate guarantee is relinquished and the project debt becomes non-recourse to the parent.

• Under a direct sale, the construction is financed by the client, and a margin is generated from the turnkey sale.

• Under a hybrid of the two above, such as the build-operate-transfer (BOT) model, SBM Offshore builds and commissions the unit and operates it during a defined period (the crucial start-up phase). The transfer of ownership to the client then occurs at the end of this defined period.

1.4Risk Management

1.4.1Risk Appetite

The Risk Appetite Statement 2021 sets the guidance and boundaries for the activities conducted by SBM Offshore in pursuit of its strategic objectives. The Management Board reviews the Risk Appetite Statement annually to ensure that SBM Offshore maintains the balance between risk and reward, relative to potential opportunities. The measurement of the underlying metrics is done every quarter and presented to the Audit and Finance Committee.

The significant parts of SBM Offshore’s Risk Appetite Statement are displayed below.

1.4.2Significant Risks to the Business

1.4.3Climate Change Risk & Opportunity

A key challenge, and an opportunity, for SBM Offshore is to make a real and meaningful contribution to the energy transition. SBM Offshore is aware of the time-pressure building for the world to achieve a responsible transition in which energy stays affordable to those in need, while mitigating climate change impacts from greenhouse gas emissions from more traditional forms of energy. SBM Offshore’s vision for safe, sustainable and affordable energy is founded upon the belief that it has a role to play in the physical and transitional challenges that climate change brings.

SBM Offshore commits to a strategy and actions compatible with its ambition to achieve net-zero by no later than 2050, including emissions in Scope 1, Scope 2 and Scope 3 – Downstream Leased Assets. SBM Offshore envisages to apply a science-based approach, using key frameworks such as below, or equivalent:

1. Assess the impact on the business using frameworks from the Task Force on Climate-Related Financial Disclosures (TCFD).

2. Set targets, using guidance from the Science Based Targets initiative.

3. Measure performance, based on guidance from the Greenhouse Gas Protocol and the EU Taxonomy.

4. Disclose performance, leveraging above standards to disclose in this Report and the CDP Benchmark.

Through the above, SBM Offshore contributes to a responsible energy transition, where the safety, affordability and sustainability of energy are balanced to benefit the world.

Climate Change Management and Adaptation is a key topic and discussed at Management Board level.This is the case for regular performance management meetings – where performance of New Energies and the emissionZERO^® transformation program is reviewed. On a quarterly basis, progress on the UN SDGs is discussed, including climate-change-related company targets. Climate change risk and opportunities are also discussed as per the risk-management cycle described in section 3.6. Outcomes of these meetings are, for example, the risk appetite statement mentioned in section 1.4.1, the long-term goals described in section 2.2 and the climate change ambitions and scenarios described in this paragraph. These scenarios are part of an ongoing process to challenge perspectives on the future business environment, rather than predictions of outcomes. Above ambitions reflect current understanding of the business and are subject to further development in the future.

Climate change impact assessments are also undertaken for client projects, in close co-operation with project lenders and external consultants, and provide insight on the physical and transitional risks on these projects. Examples of the physical risk metrics used are the exposure to flooding in yards under different climate scenarios and the number of storms in offshore locations. Transitional risk metrics examine the exposure to oil & gas supply/demand changes under various scenarios and the potential impact of carbon pricing.

SBM Offshore applies these insights to its strategy development and actions as part of its Enterprise Risk Management process. The sections below cover the mitigation of significant risks relating to climate change and portfolio risk, as explained in section 1.4.2.

Taking part in the energy transition and decarbonization of business operations are key elements of SBM Offshore’s strategy. SBM Offshore sets targets accordingly − most notably Ambition 2030, explained in section 1.3, and specific targets under SDGs 7, 9 and 13, as per section 2.2.

Under the strategy pillar Optimize , SBM Offshore focuses its efforts towards Target Excellence over the lifecycle of its assets, including asset integrity and operational readiness in the various weather conditions these assets are designed for. Furthermore, SBM Offshore is working to optimize its disclosure under the TCFD framework.

The strategic pillar of Transform includes the emissionZERO^® program, under which SBM Offshore addresses decarbonization of its solutions, hence contributing to reduction of greenhouse gases.

Finally, under its Innovate strategic pillar, SBM Offshore focuses on the energy transition, i.e. bringing lower and non-carbon energy production solutions to market, such as floating offshore wind, wave energy and hydrogen, as explained in section 2.1.10.

SBM Offshore has adopted two climate change scenarios to future-proof current strategy and take appropriate action. The scenarios are based on the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) data, as explained in section 5.1.4.

1. A steady Climate Change Scenario with a positive impact on climate change, but which falls short of meeting the Paris Agreement goals.

2. A bold Climate Action Scenario providing for strong commitment towards targets, as per the Paris Agreement.

A number of conclusions can be drawn from the two scenarios, based on indicators such as the energy mix, demand for oil, carbon pricing and weather-related indicators such as sea levels, floods, storms and heat waves.

In a steady scenario, oil demand would keep growing until 2040 – beyond SBM Offshore’s assumptions in section 1.2 . In this scenario, there would be prolonged demand for oil- and gas-related floating energy production solutions. At the same time, the market for wind energy would more than triple between 2019 and 2040. The world would face a greater adverse physical impact from climate change. Global sea levels might rise between 44 and 101 cm by 2100, with rainfall extremes and the number of hot days increasing by 36% and 25% respectively. The physical risk for SBM Offshore is a disruption of onshore operations due to extreme weather events and climate patterns, either in its offices or at yard locations. Physical risks are less likely to impact offshore operations, as the units are equipped to withstand and/or avoid extreme weather events as was seen, for example, in the case of Turritella (FPSO) during the 2020 Atlantic hurricane season, where SBM Offshore helped its client Shell to ensure safe operations by leveraging disconnectable technology and associated procedures to activate these in order to mitigate extreme weather events. SBM Offshore mitigates risks via specific emergency response plans tailored to specific scenarios in each location and more generally, through the mitigation of process safety events and project execution risks, as explained in section 1.4.2. Response plans came into effect during the pandemic, and have proven their value, for example, extended rotation schedules for offshore workers, remote office working and dealing with potential disruption in construction activities. Physical impacts could provide opportunities for SBM Offshore – i.e. by providing floating energy production systems with high resiliency. This is supported by the climate change impact assessment undertaken for FPSO financing projects.

In the bold scenario, the energy mix would change more rapidly towards lower and non-carbon energy sources than is assumed today. The demand for wind energy would increase more than sevenfold between 2019 and 2040. This scenario assumes that peak oil will have happened at this stage, with oil supply decreasing by 34% between 2019 and 2040. According to the IEA, this scenario would require a carbon price for advanced economies of US$100 per tonne CO₂ by 2030, leading to additional costs for SBM Offshore customers, adding to CAPEX and OPEX requirements and increasing the break-even prices of specific field developments. Given the relatively low break-even prices and low carbon intensity of the projects SBM Offshore is typically involved in, SBM Offshore expects its markets would suffer a relatively lower impact. This view is supported by the climate change impact assessment undertaken for FPSO projects. Physical risks in this scenario would still be present, but to a lesser extent than in the steady scenario.

• Key risks in this scenario are: insufficient resources to keep up with demand in core markets; and lower new-market development owing to reduced need for diversification and the introduction of local carbon prices. Even if the demand for hydrocarbons grows, access to high-rated funding for these projects might become more challenging.

• Key opportunities in the steady scenario are: the need for resilient ocean energy solutions owing to increased weather events, a sustained demand for FPSOs and a larger opportunity for renewable energy solutions.

The bottom-line impact of the scenario is limited, namely a slight improvement in revenue potential through a stronger FPSO demand outlook and an opportunity for resilient energy production solutions and projects. Any contingency investments needed for weather-related CAPEX investments and operations disruption would need to be borne by project pricing, with potential disruptions being mitigated by force-majeure and emergency response plans. Also, in a steady scenario the growth of the renewable energy demand remains robust and supportive to the growth of SBM Offshore’s New Energies value platform.

• Key risks in this scenario are: the decrease in demand and access to funding for FPSOs with a traditional emissions profile; insufficient internal resources to address the energy transition; and increasing carbon taxes.

• Key opportunities in the bold scenario are: the development of new ocean energy solutions that address the energy transition; increased customer demand for zero-emission oil & gas solutions; and the ability to attract new investors supporting SBM Offshore’s sustainability agenda. An increased carbon price would also lead to a more favorable business case for renewable energy and emissionZERO^® products.

The bottom-line impact of the scenario on demand for SBM Offshore’s traditional markets could be significant if unmitigated and, as such, it is covered by scenario planning under SBM Offshore’s Group Strategy Development and Performance Management approach. In particular, the Growing the Core value platform is important in this respect, as it aims for ’double-resiliency’, with:

• emissionZERO^® ensuring a lower carbon footprint of SBM Offshore’s products and

• Fast4Ward^® increasing the affordability of SBM Offshore’s solutions.

For the New Energies value platform, a bold scenario would mean an increased market size and opportunity for higher revenues. This would require further growth of CAPEX & OPEX into EU Taxonomy-eligible activities, as described in section 5.1.5.

2Performance Review & Impact

Throughout 2021, the continuing challenging circumstances due to the COVID-19 pandemic have been observed globally, and SBM Offshore’s priority has continued to be the health and safety of its staff and contractors, along with ensuring safe operations across all the Company’s activities. The global task force, in place since 2020, has continued to monitor the situation, on a daily basis, across all locations worldwide. Mental health support initiatives as well as a vaccination promotion campaign have been rolled out to mitigate some of the effects or consequences of the virus for individuals and collectivity.

As the pandemic evolved, the Company witnessed improvements in the general operating environment, especially though the reduction in quarantine requirements, for offshore personnel in particular, towards the end of the year, which had a positive impact on fatigue management and associated operational risk, as the vaccination rates increased worldwide. The rise of the Omicron variant in Q4 2021/early 2022 led further revision of protocols for offshore populations.

Looking at SBM Offshore’s performance on the Material Topics explained in section 2.1, SBM Offshore feels confident it was able to live up to stakeholder expectations. Moreover, SBM Offshore has been able to balance ongoing business with a global response to COVID-19 and its economic impact.

For clients SBM Offshore was able to deliver operational excellence and quality and demonstrate solid economic performance − both in SBM Offshore’s projects and fleet, which also benefitted SBM Offshore’s partners in co-owned companies. SBM Offshore is proud to have achieved a strong health, safety and security performance during the COVID-19 pandemic.

For employees, it has been a challenging year where SBM Offshore needed to manage an increased work load and a need to raise efficiency. SBM Offshore maintained an open communication line to employees during this challenging time, remaining focused on the development of people while giving increased attention to mental health and well-being, as explained in section 2.1.5.

SBM Offshore has been able to finance projects while maintaining an open dialogue on ESG performance with key lenders. An enhanced supplier-collaboration approach, explained under 2.1.4, is benefiting SBM Offshore’s vendors and yards. The integrated approach of SBM Offshore led to shareholder value in 2021.

Beyond this, SBM Offshore has made significant steps forward regarding the energy transition, in its approach to reducing emissions and further investing in renewable energy.

In summary, 2021 has been a challenging year for the world, and SBM Offshore is no exception. COVID-19 keeps posing risks and challenges to the business and has caused operational disruptions and well-being impacts. SBM Offshore is involved in multiple large-scale ocean infrastructure projects, has ambitions to succeed in the energy transition and wants to achieve healthy financial returns at the same time. Balancing these various elements in a time of disruption has tested the organization and its stakeholders once again. Nonetheless, SBM Offshore has been able to maintain operations and a solid performance against targets set at the beginning of the year. Overall, SBM Offshore is a company with solid market positioning, a robust backlog generating long-term cashflow, a strong operational track record and the ability to leverage its experience and capabilities to play an active role in energy transition.

2.1Performance Review

This section gives an overview of SBM Offshore’s performance on the Material Topics as presented in section 1.2.2, categorized in Optimize, Transform and Innovate sections, as visualized in section 1.3.2.

The execution of this work is delegated to the business and functions as mentioned in this section, with performance management supervised by the Management Board. For further details on governance, refer to chapter 3.

2.1.1Ethics & Compliance

In all communities in which SBM Offshore operates, SBM Offshore is committed to conducting its business honestly, ethically, and lawfully, which is vital to maintain the trust and confidence of stakeholders in SBM Offshore’s long-term value creation. SBM Offshore does not tolerate bribery, corruption, fraud, or violations of trade sanctions, anti-money laundering or anti-competition laws, or any other illegal or unethical conduct in any form by anyone working for, or on behalf of, SBM Offshore.

All employees, and those working for or on behalf of SBM Offshore, must embrace and act in accordance with the core values of SBM Offshore (see section 1.3.1), the Code of Conduct and SBM Offshore’s internal policies and procedures.

SBM Offshore fosters a culture of trust and fairness, where dilemmas are openly addressed. SBM Offshore’s aim is to enable its employees and business partners to make the right decisions, with commitment to integrity at all levels. SBM Offshore is an active member of International Chambers of Commerce Nederland and Transparency International NL.

For further details on SBM Offshore’s management approach, its purpose and its assessment, refer to sections 1.4.1, 3.6 and 3.6.2.

SBM Offshore uses a single and integrated platform to manage compliance tasks. This platform is continuously improved and uses data to predict and avoid compliance risks. It allows SBM Offshore to standardize and automate processes where possible, aiming for a high level of quality, effectiveness, and efficiency.

The compliance platform includes the following tools:

• Compliance e-Learning, with training hours and completion ratio data available by employee target group.

• Automated continuous monitoring of third parties (due diligence process).

• Registration and approval of charitable contributions and sponsorships.

• Gifts, hospitality and entertainment registration and approval.

• Annual compliance statements of designated staff.

As part of performance management processes, SBM Offshore sets, monitors and reports on compliance KPIs. Integrated quarterly group risk and compliance reports are discussed with the Management Board and the Audit and Finance Committee of the Supervisory Board.

• CGU officially released SBM Offshore from reporting duties in Brazil, ending the monitoring period.

• Revamped Speak Up Policy and Speak Up Line.

• Team organized in accordance with business needs and priorities.

• Annual (virtual) training for all staff (including offshore).

• Tailored training for high-risk functions embedded in business programs.

• Expanded reach through nomination of offshore compliance ambassadors.

• Target group for annual compliance statement expanded to cover all onshore staff.

The number of employees eligible to file the Annual Compliance Statement was in 2021 substantially higher than in 2020 (4,357 employees in 2021 versus 1,083 in 2020). The number of Compliance training courses completed in 2021 is substantially higher than in 2020 (11,011 training courses in 2021 versus 7,380 in 2020).

1. Designated Staff reflects all onshore staff and offshore leadership

1. Including Code of Conduct, theme based e-Learning courses and annual compliance statements
2. New audience, completion ratio impacted by reachability, subject to continuous improvement

1. An employee can have attended multiple face to face trainings
2. An employee can have completed multiple Compliance e-Learning courses

1. Training on relevant Compliance topics for risk based target audiences
2. Mainly strategic vendors, contracted yards and manpower agencies

No confirmed instances of corruption occurred during 2021.

In 2022, SBM Offshore aims to continuously strengthen compliance management and control by focusing on the importance of the right behavior and through continuous alignment with business needs and priorities. SBM Offshore will continue to embed Compliance by:

• Promoting a speak up culture and responsible business conduct.

• Further developing digital tools.

• Increasing monitoring and reporting capabilities by progressing to data-driven compliance.

• Applying a risk-based approach to third-party screening.

2.1.2Employee Health Safety & Security

SBM Offshore is committed to safeguarding the health, safety and security of its employees, subcontractors and assets, as well as to minimizing the impact of SBM Offshore’s activities on local ecosystems and proactively protecting the environment. SBM Offshore applies controls and safeguards based on a lifecycle hazard management process and an integrated management system, the Global Enterprise Management System (GEMS), underpinned by SBM Offshore’s Health, Safety, Security & Environment (HSSE) culture development program. In line with SBM Offshore’s HSSE Human Rights and Process Safety Policy statement endorsed by the Management Board, SBM Offshore defines its HSSE requirements relative to its hazard exposure in compliance with applicable legal requirements and ISO standards, as well as international oil and gas practices.

SBM Offshore is continuing the journey towards Target Excellence (see section 2.1.3), with the objectives of No Harm, No Defects, No Leaks. For the No Harm goal, SBM Offshore expects employees and contractors to intervene on unsafe acts, unsafe situations and non-compliance with the Life Saving Rules, stop the work if they feel anything is unsafe and report any interventions and incidents. The Life365 program, an integral part of the Target Excellence journey, frames the development of the HSSE leadership and culture development in SBM Offshore.

SBM Offshore:

• Follows ISO17776 guidance on hazard management.

• Follows the best practices outlined in Center for Chemical Process Safety (CCPS) and Energy Institute (EI) guidance documents.

• Investigates incidents and identifies the immediate and root causes to prevent re-occurrence.

• Values proactive consultation and open communication with employees, encouraging participation in HSSE-related initiatives, campaigns and Life Day.

• Has a health-control framework, which includes a fitness-to-work process, medical check-ups, health surveillance and medical emergency arrangements.

• Provides HSSE training covering the full range of Company activities.

SBM Offshore assesses Company HSSE performance through a set of indicators. The following table provides the targets set for 2021 and the performance achieved:

1. E.g.relating to marine systems releases with no impact to HSSE
2. For employees
3. None of these security incidents resulted in any actual injury or physical harm to SBM Offshore personnel

SBM Offshore continued to expand HSSE initiatives in 2021, including:

• Further rolling out the Hazards and Effects Management Process (HEMP) in operation and execution scopes, including standardization, as part of Fast4Ward^®. The HEMP is the name of SBM Offshore’s approach to manage the risk of Major Accident Hazards (MAHs) and their associated potential Major Accident Events (MAEs) associated with the operations of the fleet. The HEMP runs throughout the life cycle of an asset.

• Piloted the SBM Offshore live barrier project.

• Developed and began using the IFS Incident Management/Corrective Action Preventive Action (IM/CAPA) module to replace the Single Reporting System (SRS).

• Continued to manage the COVID-19 response worldwide effectively.

• Increased health and welfare awareness with a health-related program on specific topics.

• Maintained security controls on SBM Offshore’s activities, and preparation of measures in a new country.

• Strengthened the ownership of safety culture among leaders and supervisors in projects and offshore operations.

• Organized the company-wide Life Day.

• Maintained compliance with certification requirements on shore bases and offshore units.

The following graph shows that SBM Offshore’s Total Recordable Injury Frequency Rate has remained below the International Association of Oil and Gas Producers’ (IOGP) average since 2018¹.

SBM Offshore has defined the following 2022 targets:

• To achieve a TRIFR better than 0.15.

• To have fewer than 3 Tier 1&2 PSE.

SBM Offshore has planned the following key initiatives for 2022:

• Start rolling out the Serious Injury/Illness and Fatality (SIF) Prevention program.

• Continue rolling out HEMP in operation and execution scopes.

• Reinforce implementation of Process Safety Fundamentals (PSF) while preparing the transition to the recently issued IOGP PSF 2023.

• Maintain security controls on SBM Offshore’s activities, and preparation of measures in a new country.

• Increase health and welfare awareness and health-related programs.

• Maintain compliance with certification requirements on shore bases and offshore units.

• Organize the company-wide Life Day.

2.1.3Human Rights

SBM Offshore is committed to respecting human rights and conducting business in accordance with the United Nations Guiding Principles for Business and Human Rights (UNGPs). SBM Offshore is also committed to adhering to the Organization for Economic Co-operation and Development (OECD)’s Guidelines for Multinational Enterprises (MNE), of which human rights are an important element.

SBM Offshore’s human rights commitments are embedded in SBM Offshore’s corporate values, SBM Offshore’s Code of Conduct, SBM Offshore’s Policy on Health Safety, Security & Environment (HSSE), Human Rights and Process Safety and SBM Offshore’s Human Rights Standards. These documents set out the commitments and principles to be upheld by SBM Offshore’s employees, suppliers and partners.

Human Rights targets and performance align with SBM Offshore’s adoption of the United Nations Sustainable Development Goals (SDGs) and in line with SBM Offshore’s risk-appetite SBM Offshore’s long-term target is to fully embed human rights and social performance within its business undertakings.

SBM Offshore’s performance on human rights is monitored by the Human Rights Steering Committee. The steering committee comprises Management Board and Executive Committee members. During 2021, the steering committee met five times to consider key issues:

• The definition and endorsement of the Human Rights Program.

• The validation of SBM Offshore’s Human Rights salient issues.

• Updates on the due diligence cycle, with identification of key focus points for resolution.

SBM Offshore’s due diligence approach on human rights leads to an understanding of salient issues and recording them in a company-wide tool for continuous risk management, mitigation and prevention. From the various due diligence activities undertaken, four salient issues have been defined. These are: Forced Labour; Overtime, Pay and Fines; Accommodations; and Mental Health & Well-being.

Screening as part of significant investments, e.g. yard and vendor qualification, resulted in the following key outcomes:

• 97% of a pool of high-risk vendors were screened, compared with a 90% target. Based on the outcome and previous screening activities, SBM Offshore follows up with supplier engagement for further understanding, education and potential termination of relationships or removal from qualification processes, where necessary.

• 99.5% of vendors signed the SBM Offshore Supply Chain Charter.

• SBM Offshore took further action to address human rights impacts defined earlier, for example, working with yards in China to remove fine-related deductions from workers’ wages and improving on-site access to grievance mechanisms.

• SBM Offshore agreed upon a due diligence cycle for existing and new construction yards. To ensure progress in times of travel-restriction, SBM Offshore performed desktop screenings of those yards and additional prospective yards.

• On-site due diligence was carried out at a yard, led by a local SBM Offshore multi-disciplinary team, following the above-mentioned training.

• SBM Offshore completed the on-site assessment of a yard associated with decommissioning, finding an overall good performance. SBM Offshore is engaging on non-compliance related to overtime and wages, mainly driven by the nature of the work and local industry practice.

SBM Offshore’s Speak Up policy forms the basis of an effective operational-level grievance mechanism. SBM Offshore’s reporting channels and Speak Up Line enable the leadership to carefully listen to employees and partners in SBM Offshore’s value chain about their concerns regarding human rights or other topics addressed in SBM Offshore’s Code of Conduct. In 2021, SBM Offshore improved the accessibility of the Speak Up Line (see section 2.1.1.). An example of an allegation raised via the Speak Up Line related to the potential misuse of overtime in a yard location. SBM Offshore followed up with an internal investigation and issued management guidance to local yard operations.

SBM Offshore teams up with others to make a meaningful contribution, with the following initiatives being key:

• Building Responsibly − SBM Offshore is an active member of Building Responsibly, a group of leading engineering and construction companies working together to raise the bar in promoting the rights and welfare of workers across the industry. In 2021, SBM Offshore used the human rights questionnaire developed by Building Responsibly to screen suppliers.

• Outreach to clients, competitors and suppliers to ask for collaboration and support in addressing human rights issues.

SBM Offshore expanded its reach by adding human rights resource capacity, both at group level and locally. A company-wide human rights e-Learning course was rolled out and completed by 94% of the targeted workforce. Senior management engagement work was carried out, to ensure the embedding of human rights targets and actions in the various parts of the business. Further embedding of human rights was achieved through inclusion of human-rights-related clauses in company contracts with business partners, including suppliers and yards.

SBM Offshore is aware of the COVID-19 impact on above areas and the limitations it brings to the due diligence process. The pandemic leads to potential risks to workers’ welfare in the supply chain, for instance, exposure to the COVID-19 virus, increased workloads and the impact of extended remote working periods with limited or no opportunity to return home. During the year, SBM Offshore has contacted yard management to request they pay attention to these factors. Some yards have been proactive in seeking to address the human impacts COVID-19 has had on its workforce by providing additional food distribution, regular additional physical and mental health checks and incentives. Travel restrictions during the global pandemic have also delayed on-site assessments, including accommodation visits, of human rights impacts. This has been mitigated in part by training local employees to take on human rights observation activities & listening tours and by planning remote worker-lead interviews.

In 2022, SBM Offshore will follow up its due diligence and supply-chain screening, with planned actions to include management engagement with suppliers with specific risk indicators, and education sessions and mutual sharing of best practices. SBM Offshore is on a journey to fully embed human rights and social performance within SBM Offshore to achieve ’no harm’. In 2022, SBM Offshore plans to increase training and awareness on human rights and to continue due diligence within the supply chain, as specified in the target explained in section 2.2. This will further expand the focus within SBM Offshore and mitigate the potential lack of on-site visibility on human rights in times of travel restriction, which may continue into the coming year.

2.1.4Operational Excellence & Quality

SBM Offshore recognizes that in order to be a high-performance company, it must strive for excellence. As explained in previous sections, key activities are the execution of projects, delivery of floating production systems, together with vendors and supply chain partners, and the operation of these systems to the highest standards.

To support this approach, SBM Offshore maintains a dedicated Operational Excellence organization at Group level, incorporating resources with diverse expertise in operational, technical and process fields.

Key performance indicators for Operational Excellence & Quality include: uptime of the fleet, delivery of projects, performance of the supply chain, costs of non-quality and certifications.

2.1.4.1Operational Excellence Function

The scope of SBM Offshore’s Operational Excellence Function is to continually oversee core business activities across their lifecycle (from ’Win’ to Execute’ to ’Operate’) and drive SBM Offshore towards high performance, not only from an economic perspective (covered in section 2.1.6) but also through effective risk management, quality/compliance assurance and continuous improvement.

Among the various aspects of Operational Excellence within SBM Offshore, are the following main themes:

• Leadership and Culture: with the ambition to ’Target Excellence’, the complementary Life365 and Right365 programs frame the development of SBM Offshore’s leadership and culture, focusing on the combined objectives of ’No Harm, No Defects, No Leaks’.

• Operational governance: as described in section 3.8.

• Process Safety Management and Risk Management: described in sections 2.1.2 and 3.6.1 respectively.

• Management Review: building on International Standards such as ISO 9001, SBM Offshore has established a set of internal processes ensuring a regular, structured review of its management and control framework against its latest strategy and actual performance.

• Knowledge Management and Continuous Improvement: ensuring that lessons are effectively learned, also building on internal knowledge and experience as well as industry best practices.

• New ways of working under Fast4Ward^® and Digitalization – explained in sections Fast4Ward^® and 2.1.8.

• Quality and Regulatory Management described below.

SBM Offshore is committed to performing its business in full compliance with all applicable laws and regulations and to delivering products and services meeting all related regulatory requirements, as well as any applicable specifications and requirements imposed by relevant stakeholders.

As part of the Operational Excellence organization, the combined Quality & Regulatory Management function is dedicated to ensuring that such objectives are consistently met in SBM Offshore’s core business, notably through:

• Promoting a quality and compliance culture.

• Maintaining SBM Offshore’s certification to the ISO 9001:2015 Standard.

• Providing systematic identification of applicable regulatory requirements and ensuring their implementation.

• Ensuring that conformity, compliance and acceptance of SBM Offshore’s products and services are effectively achieved and maintained.

• Supporting continuous improvement of business processes and ways of working.

Regarding Operational Excellence & Quality overall, SBM Offshore is focused on reducing and mitigating risks to its business activities, notably:

• Significant risks related to project execution, process safety, human capital and changes in laws and regulations − as mentioned in section 1.4.

• Other operational risks such as loss of integrity of aging assets, loss of certificate of class and disruption to the supply chain.

SBM Offshore is proud to note the following key achievements:

• Active promotion of ’Target Excellence’ principles through diverse initiatives.

• Maintenance of SBM Offshore’s ISO 9001:2015 certification, including scope extension to the Terminal systems activity.

• Further development of an integrated Product and Regulatory Assurance approach, building notably on project/operational experience to upgrade our processes including ’Cost of Non-Quality’ processes.

• Strengthening of the Right365 program under the banner of ’Target Excellence’, with a specific focus on ’Doing the Right Thing, Right First Time’ with the deployment of mandatory Quality Rules e-Learnings for project personnel.

• Development of a new version of SBM Offshore’s enterprise management system GEMS (’Sapphire project’) to align GEMS structure and content with the new ways of working brought by the Enterprise Resource Planning project ’Integra’.

• Lessons Learned Initiatives performed to improve SBM Offshore’s projects and operations.

• Development of a digital version of technical standards (GTS) that will be available through a Requirement Management Software in 2022.

• Effective use of independent third parties for inspection, verification and assurance services related to Execute and Operate activities.

Importantly, all company offshore facilities were duly accepted by all relevant authorities and regulators, with all related permits, licenses, authorizations, notifications and certificates duly granted and kept valid. Offshore facilities have also remained in class at all times as required from both statutory and insurance perspectives. No significant operational fine was paid in 2021.

For 2022, SBM Offshore will be focusing on the following subjects:

• Process Safety Management objectives as described in section 2.1.2.

• Further development of a Knowledge Management framework to grow in-house expertise and support continuous improvement.

• Roll out of a new version of GEMS, ’Sapphire’.

• Deployment of digital version of the GTS.

• Development and deployment of digital solutions supporting Operational Excellence, including a tool to execute technical assurance.

• Development of technical assurance framework beyond engineering phase.

• Transition from Cost-of-Non-Quality to Quality incidents to improve effectiveness and prevent reoccurrences.

• Maintenance of an effective regulatory watch and interface with regulators.

2.1.4.2Projects

SBM Offshore continues to focus on the development of its portfolio of floating solutions to deliver the best projects aligned with customer needs, building on SBM Offshore’s technology expertise and track record. The success of projects is determined by performance against a budgeted schedule, cost and quality within the HSSE and Target Excellence approaches mentioned in sections 2.1.2 and 2.1.4. KPIs are set accordingly and managed through SBM Offshore’s Project Directorate and Project Dashboards.

The management approach remains based on (i) an early engagement with customers; (ii) standardization in product design and execution in order to improve competitiveness, quality, time to market and reduced emissions; and (iii) an increasing focus on the energy transition, using SBM Offshore’s core competencies to develop affordable, low carbon solutions in the FPSO as well as in the LNG-to-power and renewable markets.

Throughout the year, SBM Offshore continued to meet the additional challenge of the COVID-19 pandemic whilst ensuring business continuity in all projects. The project teams maintained their focus on project delivery and safe operations, while working together virtually, across time zones, with customers, yards and suppliers with the aim of limiting delivery delays. Projects continued to operate in a new environment where readiness for, and mitigations of the risks of, the ongoing pandemic is factored into daily project execution. SBM Offshore is grateful to all the project stakeholders for making this happen.

• Liza Unity (FPSO) – SBM Offshore’s first Fast4Ward^® FPSO has safely arrived in Guyana in line with customer ExxonMobil’s planning. Liza Unity (FPSO) was awarded the SUSTAIN-1 notation, the world’s first FPSO to achieve this recognition. After a fast-track mooring hook-up operation, the FPSO is safely moored and SBM Offshore is currently carrying out offshore commissioning, with FPSO start-up scheduled for early 2022. SBM Offshore will then lease and operate the FPSO for a period of up to two years before handing it over to ExxonMobil.

• FPSO Sepetiba – Following the Fast4Ward^® MPF hull arrival at the Topside yard in China, the topsides modules lifting campaign has begun for this FPSO which Petrobras will lease for 22.5 years, under a contract signed in 2019. First oil is targeted for 2023.

• Prosperity (FPSO) – The Fast4Ward® MPF hull for this FPSO entered dry dock in Singapore and the topsides’ fabrication is progressing in line with the project schedule. The vessel is the first that SBM Offshore is delivering under the long-term FPSO supply agreement signed with ExxonMobil in 2019. The project is progressing in line with the client’s schedule, with planned completion in 2024.

• FPSO Almirante Tamandaré – The engineering activities are progressing, reaching the 60% model review milestone, and topside construction activities have started in China & Brazil. In parallel, the keel-laying milestone has been achieved for the Fast4Ward^® MPF hull. The vessel will operate in the Buzios field, part of the Santos basin, offshore Brazil.

• FPSO Alexandre de Gusmão – Detailed engineering and supply chain activities have started in our Kuala Lumpur office. The Fast4Ward^® MPF hull construction has reached the ‘first steel cut’ as well as the ‘keel-laying’ milestones. Topsides yards selection are completed both in China and Brazil.

• FPSO for Yellowtail development project – SBM Offshore started to carry out a Front-End Engineering Design (FEED) phase for ExxonMobil on the Yellowtail development project, ExxonMobil’s fourth FPSO offshore Guyana. Subject to Guyana government approvals and project sanction and release of second phase of work by the client, SBM Offshore will design and construct the FPSO using its industry-leading Fast4Ward^® program allocating the Company’s sixth new build, MPF hull combined with several standardized topsides modules. The FPSO will be designed to produce 250,000 barrels of oil per day, will have associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day. First oil is expected in 2025.

• This year, two Fast4Ward^® MPF hulls have been delivered and arrived in their respective integration locations (the second MPF hull in Singapore & the third one in China).

• In parallel, major milestones have been achieved for the fourth and fifth MPF hulls at respective Chinese shipyards: ‘hull launching at end of dry-dock’ in SWS for the fourth one; and ‘keel-laying’ in CMIH for the fifth one, both in line with SBM Offshore’s execution plan. These two hulls are now allocated to projects, respectively the FPSO for Yellowtail development project and FPSO Almirante Tamandaré.

• In 2021, the Fast4Ward^® program also welcomed a sixth hull, the fourth one ordered to SWS, which is already reaching the ‘first steel cut’ and ‘keel-laying’ milestones and has been allocated to FPSO Alexandre de Gusmão.

Following successful completion and 2020 delivery of all the Turret Mooring System modules for Equinor’s Johan Castberg FPSO, SBM Offshore was supporting its client Equinor to progress the preparation of Turret-Hull integration activities in Singapore.

In addition to supporting the SBM Offshore internal FPSO Product Line, providing expertise on mooring system designs, the TMS Product Line also carried out a pre-Front-End Engineering Design (pre-FEED) phase for BHP Trion FSO.

SBM Offshore is now constructing three floating offshore wind substructures for the Provence Grand Large project for EDF Renouvelables. The three 8.4MW floaters with mooring systems will be installed offshore Marseille, France. Leveraging the experience gained from this pilot project will enable SBM Offshore to further fine-tune its technology and execution model and to scale up for future wind farm projects.

As part of its offshore installation services, SBM Offshore successfully and safely concluded several offshore operations, including subsea tie-in for the ALEN gas export facility offshore Equatorial Guinea, the soft yoke repair works on the FPSO Sea Eagle offshore Nigeria and Dussafu project SURF installation and subsea tie-in works offshore Gabon. More recently, SBM Offshore completed the Coral ENI FLNG Mooring System installation and pre-lay offshore Mozambique followed by the fast-track mooring hook-up of Liza Unity (FPSO) offshore Guyana.

In parallel, SBM Offshore concluded the sale of its diving support and construction vessel (DSCV) SBM Installer on January 19, 2022.

SBM Offshore will continue to standardize its products in line with the Fast4Ward^® program while seeking to produce environmentally friendlier solutions in line with its emissionZERO^® program. In addition, SBM Offshore will continue to fine-tune its product offering to offer competitive and industrialized solutions to the floating offshore wind and wave energy market. Development in the LNG-to-power market is also key to contributing to lower carbon intensity. These developments add to SBM Offshore’s Ambition 2030, i.e. the addition of 2+ FPSO contracts per year on average and the achievement of >2GW Floating Offshore Wind installed or under construction by 2030.

2.1.4.3Supply Chain

The current business and health environment is driving major changes, with risk resilience and new market and environmental standards requiring that the supply chain organization adapts and evolves. To continue the drive towards energy transition with the highest level of safety, performance and quality, the supply chain management is evolving into a strategic globalized organization. Leveraging long-term relationships with key supply chain partners will also contribute to accelerating the time-to-market objective and performance in the Win phase.

With efficient execution of projects remaining essential, SBM Offshore supply chain management is continuing its efforts to support projects locally by developing capability hubs, for example in China, India and Brazil.

The pandemic has demonstrated the value of ’framing global, acting local’ and aligning supply chain strategy with the product life-cycle. The supply chain organization contributes to SBM Offshore’s strategy as described in section 1.3.2.

The supply chain organization has been developed further around six strategic pillars to enhance the resilience of the function as a whole:

• Strengthening the performance of the function on a global scale and include all areas of SBM Offshore’s business ie. Projects, Operations and non-Project related business.

• Enhancing Quality Assurance and Quality Control within Supply Chain.

• Enhancing the effectiveness of SBM Offshore’s enterprise management processes.

• Effective vendor performance and vendor qualification assessment to include current topics such as climate change measures, human rights and cybersecurity.

• Set function-wide KPI’s and enhance data-driven reporting and visibility into the performance of the entire function against these KPI’s.

• Drive key global issues such as human rights and sustainability goals within the Supply Chain community.

• Enhanced strategic focus during the proposal phase of SBM Offshore’s projects.

• Increased cost-competitiveness and time-to-market by leveraging on global synergies with key vendors.

• Co-development with key vendors on major energy transition initiatives and new technology.

• Globalization of SBM Offshore’s strategic activities to achieve direct benefits from the strategic work done with key vendors for project tenders.

• Enhance business alignment between SBM Offshore and its supply chain community by holding dedicated workshops and global events such as an annual Global Vendor Day.

• Enhanced resource management on SBM Offshore’s projects to maximize utilization of skill sets.

• Dedicated section for FPSOs and FLNGs to strengthen key post-order management activities.

• Work with key vendors to enhance technologies for carbon capture.

• Assess Scope 3 emissions for key components on SBM Offshore’s FPSOs and work with key vendors to explore avenues to reduce emissions.

• Enhance renewable product focus to support development of renewable energy projects.

• Leverage regional supply chain skills in centers such as Brazil (Rio de Janeiro), India (Bangalore) and China (Shanghai).

• Diversify supply chain resources and develop talents across all regions.

• Play a major role in the design and implementation of SBM Offshore’s migration to the new global ERP system.

• Work with the external supply chain community to support digital-twin objectives.

• Support the data-migration activities to enhance automated data-driven reporting and performance measurement of the function.

• 9 Steering committee meetings organized with strategic vendors.

• 1,599 vendors qualified under the revised qualification process since 2017, including more than 120 Chinese vendors.

• 99.5% of vendors have signed the Supply Chain Charter.

• 90 vendors have had their qualification renewed following satisfactory performance.

• 65 vendors have responded to SBM Offshore supply chain organization’s new human rights assessment (more detail in section 2.1.2).

Next year, Group Supply Chain will continue its evolution towards being a resilient function to enhance and maintain high standards of performance across all areas of its business including, but not limited to, supporting human rights, climate change measures, digitalization, quality assurance and quality control, resource and talent management across all SBM Offshore’s centers, enterprise management systems, vendor performance and qualification assessments, and energy transition measures.

2.1.4.4Fleet

The fleet that SBM Offshore operates on behalf of its clients form the Value Platform ‘Ocean Infrastructure’. They are key value drivers for SBM Offshore and generate predictable and sustainable revenue and operating cash-flows. The expertise and experience of almost 3,000 offshore crew and onshore staff ensures value creation through the safe, reliable and efficient operation of SBM Offshore’s offshore fleet.

The Fleet adheres to and applies the management approach of the wider SBM Offshore organization. Key to this are policies, commitments and mechanisms mentioned under sections 2.1.2 and 2.1.4. In addition, SBM Offshore’s Fleet also focuses on:

• Supporting SBM Offshore’s Target Excellence program: the Fleet runs an ‘Excellent Days’ program which measures and rewards safe operational performance by offshore units and crew.

• Uptime: a key indicator for SBM Offshore measures the percentage of time the unit is available to produce. SBM Offshore aims to maintain its industry-leading levels of uptime, at or above 99%.

• Emissions: further increase in the stability of gas handling systems and improved data-analytics leading to reduction of flaring in most of the assets SBM Offshore operates on behalf of its clients. Further details can be found in section 2.1.7.

• Local content and knowledge transfer targets in SBM Offshore’s countries of operations: which are accompanied by social development initiatives, as mentioned in section 2.2.

• A company-wide Responsible Recycling Policy: for the sustainable end-of-life disposal of offshore units, applying the principles of the EU Ship Recycling Regulation 1257/2013 or equivalent.

At the end of 2021, SBM Offshore was responsible for performing operation & maintenance services on 14 FPSOs across the globe and had a non-operating stake in 1 Semi-submersible unit.

With the following historic performance:

• over 6.5 billion barrels of production cumulated to date.

• 9,725 oil offloads cumulatively to date.

• 360 cumulative contract years of operational experience.

2021 represented another challenging, yet ultimately successful, year for SBM Offshore’s operations, with the demands of the global COVID-19 pandemic continuing to impact the operational focus.

Continued strong management of the pandemic and its impact on crew health and safety, logistics and travel ensured business continuity and good performance in offshore operations. Solid results were achieved in terms of occupational and process safety, while maintaining historic production uptime of 99%.

In 2021, no units entered or exited the fleet operated by SBM Offshore.

Despite this, various initiatives and developments progressed and matured this year to enhance operational safety, quality and efficiency through:

• Training and Competency overhaul with focus on digitally driven educational platforms, Virtual Reality and remote learning for safe, efficient onboarding of new crew.

• Health and Fatigue Management programs and recruitment of additional personnel easing rotation planning and providing relief for offshore teams.

• Organizational enhancements and expanded Data Management for globally integrated, connected and date-driven operations.

• Maturing Fleet Support services capabilities through global network.

• Continued implementation of digital solutions and applications for enhanced operational intelligence, asset monitoring and predictive capability. Increased value creation from digitalization of mature Brazil operations, and establishment of same in Guyana.

SBM Offshore’s approach is to target asset preservation with optimal lifecycle costing. In 2021, progress was made on:

• Expansion of the digital environment, data connection and management under the control of global operations monitoring centers and the deployment of predictive maintenance applications for equipment and asset optimization (see section 2.1.8).

• Continued focus on Process Safety Management, barrier management, and enhanced Marine Safety.

• Deployment of solutions and techniques based on Artificial Intelligence and new technologies such as remote work preparation and inspections, offshore mobility devices, drones, VR and equipment integrity programs reducing offshore manhours and shutdown durations.

The MOPU Deep Panuke PFC, which was disconnected in 2020, was taken to a responsible recycling facility in Nova Scotia, Canada for the planned recycling phase. This is being carried out in full adherence to SBM Offshore’s Responsible Recycling Policy, including the above-mentioned commitments to EU regulations. SBM Offshore is proud to have qualified a local yard meeting all requirements and through which SBM Offshore can ensure local economic development and reduction of logistic-related carbon emissions.

During 2021, the project addressed waste management streams, supported habitat creation through reef balls in the surrounding harbor, and invested in local community development, labor opportunities and contributions to schools and First Nation projects. The responsible recycling project is expected to complete in 2022.

As a forward-looking operator, SBM Offshore leverages its unrivalled experience and industry-leading digital and technological solutions to deliver sustainable, ethical operations with the highest standards of safety, reliability and efficiency. SBM Offshore’s core values and approach to responsible business underpin SBM Offshore’s operational philosophy and prioritize the health and well-being of all offshore and onshore employees.

As part of SBM Offshore’s Digital Transformation, ’Smart Operations’ based on quality data, digital analytics and technology is rapidly accelerating the development and deployment of digital tools and technologies across SBM Offshore’s fleet. This provides internal value creation, optimized client service offering and enhanced safety and efficiency.

Emission reduction in downstream leased assets will ensure SBM Offshore’s contributions to Climate Change Mitigation and a subsequent path to net-zero, as explained in sections 1.4.3 and 2.1.7. SBM Offshore has set long-term targets for this. Key elements are:

• The development of the emissionZERO^® FPSO for future projects.

• The development of investment proposals for clients and joint venture partners in the installed base of assets.

Company standardization programs such as Fast4Ward^® also benefit Fleet Operations through the combination of standardized designs for new units and the integration of new digital, data-driven solutions. Operations in Brazil represent the mature frontrunner of this digital value creation, whereby products are tested, incubated and validated. Here structural preparations are also underway to receive the FPSO Sepetiba, a Fast4Ward^® design, after its completion.

In Guyana, operations continue to experience strong growth, both offshore and onshore and take full benefit of enhanced products, programs and operational developments in the wider company. In 2021, SBM Offshore welcomed the second unit, Liza Unity (FPSO) offshore. As at year-end, commissioning activities were progressing towards first oil, targeted for early 2022. Preparations are also ongoing for the arrival of Prosperity (FPSO) in 2023. SBM Offshore continues to expand and embed its presence in-country with the opening of new purpose-built operational headquarters including an Integrated Operation Centre for offshore units. Operations are backed up by strong growth in personnel and investment in a wide range of social, environmental and educational initiatives focusing on local content and knowledge transfer.

SBM Operations has a strong role in managing annual and long-term targets in line with the UN Sustainable Development Goals, as explained in section 2.2.

2.1.5Retaining and developing employees

In 2021, SBM Offshore’s focus continued to be on retaining and developing staff, building and training current and future leaders and protecting employee health and well-being. SBM Offshore runs an HR cycle that contributes to the retention and development of employees. This process is managed under the Group HR function, which is part of the Executive Committee and the CEO-portfolio.

With the ongoing COVID-19 pandemic, and the consequent changes in working practices, SBM Offshore put increased effort into caring for employees, to minimize the effects of fatigue and stress on employees’ physical and mental health. Recruiting, training and developing both our leaders and employees meant a switch to digital methods.

In addition, a particular focus was put on increasing employee headcount, in line with business needs, and increasing the flexible component of the workforce, to ensure the business can respond, in an agile way, to current and future demands. This means ensuring an efficient pipeline of new talent through strategic internal and external recruitment activities.

With the COVID-19 pandemic, SBM Offshore has made great efforts to ensure that its workforce is protected, balancing the needs to execute its projects and commitments against the impact on the workforce of working in the changed COVID-19 environment. For example, SBM Offshore recruited a further 132 people to ease the pressure on existing employees operating under extended offshore rotations and quarantine regimes.

Special care was paid to the mental health of employees working at home, with several online initiatives launched to help employees cope with home-working and social isolation. In addition, extra support was given to employees working away from home for extended periods, with measures put in place to allow them to work from their home countries where possible.

The pandemic also affected how SBM Offshore trains employees, with training now increasingly digitalized, using virtual reality and simulation to minimize interpersonal contact.

SBM Offshore continued to develop its leaders, with the new RISE Leadership Program launched, embodying all that is expected of a leader at SBM Offshore, and identified the technical expert community, to create a career reward and recognition path for senior engineers within SBM Offshore.

SBM Offshore was able to recruit new staff, particularly in China, India and Guyana, successfully onboarding them at events in several locations.

• Workforce increased by 16% to 6,426.

• Diversity and Inclusion network created with ambassadors appointed in 12 countries.

• 4,000 voluntary digitalized training courses undertaken by employees.

• 2,179 employees assessed on their leadership or expert potential.

• Future leadership campaign: 38 Hogan assessments (development centers) and 39 Korn Ferry assessments conducted.

• 72,345 online applications for jobs reviewed: 4,673 retained for the recruitment process.

• Proportion of flexible workers in the workforce increased from 20% to 26% in 2021.

• 42 e-Learning titles developed and made available on FPSO Units.

• 7 Virtual Reality training modules launched.

• 3 Process Simulator Training Centers put in place.

• ‘Pulse’ employee workplace survey conducted and benchmarked.

• 13 action plans developed to respond to employee workplace survey findings.

• New Learning Management System module of the HRIS (LUCY) created.

• RISE Leadership Program launched.

• Expert Program: Identified 337 Experts, Senior Experts and Master Experts in 31 Expertise Families.

In 2022, SBM Offshore will continue to digitalize HR data, adding further functionality to its LUCY reporting tool to allow automatic and tailored career paths to be proposed to employees.

It will continue to roll out the OSCAR digital ‘Offshore Pass’ for FPSOs and the ‘Crew Self-Service’ module alongside other digital tools.

SBM Offshore will finalize its Smart Ways of Working initiative to identify an optimized hybrid model for future working, balancing working from home and working in the office, based on better performance with increased efficiency, while safeguarding employee safety, well-being, and Company core values.

SBM Offshore will continue to give special attention to the ‘employee experience’, in particular taking care of those employees who have been away from home for longer than usual because of the pandemic. Such an emphasis is key to employee retention. Recruitment will remain a significant challenge as the pandemic makes it more difficult to integrate new team members in the usual way. SBM Offshore will therefore improve onboarding, rolling out best practices to ensure that all new employees experience the same high-standard onboarding wherever they are recruited in the world, online or in person.

In 2022, SBM Offshore will continue to deepen its ‘employee experience’ knowledge to further improve all aspects of the organizational culture and nurture a strong sense of belonging.

On Training, SBM Offshore will further improve the content and catalogue of the Learning Management System, a training tool which enables SBM Offshore to become a learning organization where each SBM Offshore learner is an entrepreneur in their career development. In addition, SBM Offshore will make unconscious bias awareness sessions available to the Company at large and will also set ambitious diversity and inclusion targets.

2.1.6Economic Performance

SBM Offshore’s primary business segments are: Lease and Operate and Turnkey. Although financial results are presented per segment, activities between business segments are closely related. In addition to reporting under International Financial Reporting Standards (IFRS) guidelines, SBM Offshore’s Directional reporting methodology was introduced to reflect Management’s view of SBM Offshore and how it monitors and assesses financial performance. This chapter of the Annual Report presents numbers based on directional reporting.

SBM Offshore provides Directional Revenue and EBITDA guidance, which is updated in the event of material change, if any. Economic performance is a result of all company activities, governed as per sections 3.1 Management Board and Supervisory Board and 3.2 Corporate Governance and executed as per the Management Approach sections in chapter 2 Performance Review & Impact.

Economic performance is measured through profitability, cashflow, backlog and the financial position of SBM Offshore.

Adjusted for non-recurring items, Underlying Directional revenue for full-year 2021 came in at US$2,317 million, an increase of 1% compared with 2020. This increase is mainly driven by the Turnkey segment benefiting from the general ramp-up of Turnkey activities with five FPSO’s under construction in 2021, the awarded limited scope on the FPSO for the Yellowtail development project and the higher contribution from the renewable and offshore services product lines. This was partially offset by the comparative impact of the Johan Castberg Turret Mooring System EPC project delivered in 2020. Underlying Directional Lease and Operate revenue was US$1,584 million almost stable versus US$1,622 million in the prior period.

Underlying Directional EBITDA amounted to US$931 million in 2021 compared with US$944 million in 2020. This resulted from a decrease of the Underlying Lease and Operate EBITDA by US$42 million. Despite an overall stronger operational performance of the fleet, this is mainly explained by (i) the net incremental costs from the implementation of additional safety measures linked to COVID-19 and (ii) repair costs incurred in 2021 on damaged mooring lines on one unit and (iii) higher maintenance and repair activities, including maintenance campaigns postponed to 2021 due to the COVID-19 new pandemic context in 2020. The 2020 EBITDA also benefited from the contribution of the Deep Panuke MOPU decommissioning activities. Underlying Directional Turnkey EBITDA increased from US$(9) million in the year-ago period to US$19 million in the current year. Reduced level of EPC activity in the Turret and Mooring product line, following the Johan Castberg Turret Mooring System project delivery was nearly offset by the general ramp-up of other Turnkey activities (including higher contribution from Offshore services). In addition, the Turnkey EBITDA benefited from positive project and risk close out in 2021, while it was impacted by US$(40) million of restructuring costs in 2020.

2021 Underlying Directional net income attributable to shareholders stood at US$126 million, a slight increase compared with US$125 million in the previous year. It should be noted that the ongoing EPC works on FPSO Almirante Tamandaré, FPSO Alexandre de Gusmão, Liza Unity (FPSO), Prosperity (FPSO) and the FPSO for the Yellowtail development project did not contribute to Directional net income over the period. This is because the contracts were 100% owned by the Company as of December 31, 2021 and are classified as operating leases as per Directional accounting principles. Therefore, the contribution of these five FPSO projects to the Directional profit and loss will largely materialize in the coming years, subject to project execution performance, in line with the operating cash flows.

The above Underlying figures adjust several non-recurring items described in 4.1.3 Financial Review Directional.

Thanks to the strong contribution of the fleet, SBM Offshore generated US$715 million of net cash flows from operating activities over 2021.

The fact that the bridge loans related to FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão were drawn in full during the last quarter of 2021 for a total amount of US$1,255 million generated a significant excess of financing cash flow compared with actual investments to date on these two units (approximately US$800 million as of December 31, 2021). As a result, cash and cash equivalents increased from US$383 million at year-end 2020 to US$1,059 million at year-end 2021.

The Directional backlog, which is presented on a pro-forma basis in note 4.1.3 Financial Review Directional, grew to a record total of US$29.5 billion at December 31, 2021, compared with US$21.6 billion at year-end 2020.

This increase was mainly the result of (i) the awarded contracts for the FPSO Almirante Tamandaré project and the FPSO Alexandre de Gusmão project and (ii) the awarded initial scope to begin FEED activities and build a Fast4Ward^® hull for the FPSO for the Yellowtail development project. SBM Offshore’s backlog provides cash flow visibility of 29 years, up to 2050.

SBM Offshore’s financial position has remained strong as a result of the cash flow generated by the fleet and the successful adaptation of the Turnkey segment to a more competitive and unpredictable market.

Directional shareholders equity decreased from US$858 million at year-end 2020 to US$604 million at year-end 2021. This was primarily due to the completion of the EUR150 million (US$178 million) share repurchase program and the dividend distribution to the shareholders for an amount of US$165 million partially offset by the net income of the year. It should be noted that under Directional policy, the contribution to profit and equity of the substantial FPSOs program under construction will largely materialize in the coming years, subject to project execution performance, in line with the generation of associated operating cash flows.

Directional net debt increased to US$5,401 million from US$4,093 million at year-end 2020. While the Lease and Operate segment continues to generate strong operating cash flow, SBM Offshore drew (i) on projects financing and (ii) on bridge loan facilities for FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão to fund continued investment in growth.

Almost half of SBM Offshore’s debt as of December 31, 2021 consisted of non-recourse project financing (US$2.9 billion) in special purpose investees. The remainder (US$3.5 billion) mainly comprised of borrowings to support the on-going construction of five FPSOs which will become non-recourse following project execution finalization and release of the Parent Company Guarantee. SBM Offshore’s Revolving Credit Facility (RCF) was undrawn at year end and cash and undrawn committed credit facilities amounted to US$2,981 million.

For a total overview of SBM Offshore’s financials under IFRS, please see section 4.2 Consolidated Financial Statements of the Annual Report.

Fast4Ward^®

2.1.7Emissions

The topic of emissions is dealt with in various parts of the organization as explained under the HSSE and Environmental Reporting approaches in sections 2.1.4, 5.2.1 and 5.2.2. SBM Offshore is reporting to CDP and considering IOGP statistics to ensure the right benchmarking.

SBM Offshore’s long-term emission reduction ambitions are explained in section 1.4.3. In 2021, SBM Offshore set targets to reduce flare emissions on its activities, develop low- and non-carbon solutions, to have zero oil spills and to reduce air-travel-related emissions. SBM Offshore added scope to its disclosures and further aligned scoping to the GHG-Protocol. This results in the reclassification of the majority of emissions formerly reported under Scope 1 to Scope 3 (see section 5.2.2 for detail).

Furthermore, SBM Offshore strives to outperform industry benchmarks on the following indicators:

• GHG emissions¹, gas flare², energy consumption³.

• Oil in produced water⁴, oil spill per production⁵.

The efforts in emissions management build upon years of action taken to bring emissions down structurally. For example, gas flaring intensity in 2021 is 28% lower than in 2017. Through this approach, SBM Offshore is mitigating risks in the light of climate change and social license to operate, as mentioned in section 1.4.2.

SBM Offshore focuses on GHG emissions while also addressing other emissions − such as emissions to water and non-GHG emissions. Further information can be found in sections 2.2 and 5.3.

During 2021 a total of 5.6 million tonnes of GHG emissions are reported, 99% of this being Scope 3 emissions. The total is 2% lower than in 2020, despite an increase in voluntary disclosure − purchased goods and services − that adds 6% in reported GHG emissions volume compared to last year. Furthermore changes to scoping have been applied during 2021, for which details can be read in section 5.2.2. (’Changes in Reporting’).

Scope 1 emissions comprise the gas powered heating in offices where SBM Offshore is the sole renter of an office building. In 2021 these emissions amounted to 237 tonnes GHG CO₂ equivalent. This is an increase compared to 2020 due to higher project office activity.

Purchased electricity in offices account for 2,019 tonnes of GHG CO₂ equivalent, based on the average energy mix of each location. Accounting for the electricity actually purchased through green contracts, the amount is 752 tonnes. Prolonged remote working contribute to lower office energy related emissions compared to pre-COVID-19 levels, whilst growth in Guyana and India lead to increased consumption of office energy. The Company has expanded its sustainable energy purchasing, with the office in Rio de Janeiro now under a green energy contract as well.

This year, SBM Offshore expands its voluntary emissions disclosure, through addition of this scope. SBM Offshore has calculated emissions resulting from goods procured on FPSO projects. These amount to 370.1K tonnes emissions. The emissions mainly come from steel that is processed for bulk materials and equipment. Based on the outcomes of the initial analysis, and in line with GHG protocol Scope 3 Corporate Value Chain Accounting & Reporting Standard, SBM Offshore will refine the data quality in the coming years and will improve the accuracy of its value chain GHG reporting. More importantly, this will provide a basis for engagement with suppliers.

SBM Offshore provides operation and maintenance services for FPSOs on behalf of clients across the globe, on a finance lease basis. The technical specification and operational requirements for these FPSOs are driven by reservoir characteristics and client criteria. Emissions from downstream leased assets mainly relate to the required production profile of the oil field and the subsequent energy production, e.g. from gas turbines (71%). The other key contributor is flaring (29%).

Emissions from downstream leased assets account for the majority of the carbon footprint reported by SBM Offshore. More than 90% of total emissions giving 5.2 million tonnes of GHG were emitted by downstream leased assets. This volume is 9% lower than in 2020. The carbon intensity of downstream leased assets is 110.99 tonnes of GHG emissions per thousand tonnes of hydrocarbon produced, which is 20% better than the industry benchmark¹ and 8% better than last year.

SBM Offshore instituted a performance program measuring flare emissions following the launch of the internal CO₂ Challenge in 2015. For 2021, SBM Offshore set a target to further optimize operational excellence on the FPSOs it provides operations and maintenance services to. SBM Offshore targeted an absolute volume of gas flared below 1.6 million standard cubic feet per day (scft/d) as an overall FPSO fleet average during year. This was done for a specific part of the volume to which SBM Offshore expects to have the largest form of control, despite it being a Scope 3 category. SBM Offshore nearly achieved this overall target, the actual being 1.66 million scft/d. The target achievement was mainly inhibited by flash gas compressor challenges on two FPSOs. In one case, it was an FPSO in ramp-up phase with inherent challenges and for the other, it was a change in gas compressor operating philosophy by a client. SBM Offshore has defined lessons learnt for improvement and is pleased to see clients taking additional redundancy in gas compression in their basis of design, which should have a lowering effect on future gas flaring.

For the downstream leased assets that (over-)achieved their targets, average reduction of above mentioned flaring scope was 42% compared with 2020. This was achieved mainly by improvement of gas system uptime. The performance was further supported by better insight owing to an improved online emission dashboard. This provides for data-analytics and the basis to the launch of future initiatives. Overall flaring on downstream leased assets was 9% better than the industry benchmark².

In order to address future Scope 3 emissions, SBM Offshore has targets for Innovation, Technology and Infrastructure, in line with SDG 9. In 2021, SBM Offshore spent 60% of its Group Technology R&D budget on non-carbon technology, above the 50% target set. Also, SBM Offshore developed six low-carbon modules for FPSOs, so it can offer a lower carbon footprint to clients in the future.

To further reduce emissions from the power generation aspect of downstream leased assets in operation, SBM Offshore is dependent on investments by clients and partners in co-owned entities. SBM Offshore is ready to lead, co-develop and deliver on such investments. SBM Offshore has set a long-term engagement target for this as part of its SDG approach described in section 2.2.

Total air travel related emissions were 10.9K tonnes in 2021. In 2021, SBM Offshore committed to 20% lower air-travel-related CO₂ emissions compared with 2019. Remote working and less travel, due to the continued COVID-19 pandemic, added significantly to the achievement of this target, with the actual reduction being 61% versus 2019. The target takes into account the fact that a portion of SBM Offshore’s business travel relates to offshore operations, e.g. crew changes, where volumes are difficult to reduce significantly in short time-frames.

Other performance items relating to emissions:

• SBM Offshore is proud to have a B-score in CDP, meaning SBM Offshore is ‘taking climate action’. Further explanation is given in section 1.4.3.

• SBM Offshore’s energy intensity on downstream leased assets is 8% better than the industry benchmark³. Energy consumption volumes can be found in section 5.3.

• The quantity of oil discharged to sea per hydrocarbon production on downstream leased assets was 4.49 tonnes per million tonnes of hydrocarbon produced, 66% below IOGP benchmark⁴ (see also section 2.2.)

• Downstream leased assets had 0 oil spills as per IOGP definition⁵

• SBM Offshore engaged in various projects that resulted in lower emissions. In Guyana a local agricultural project leads to lower emissions from food logistics and investments into a Mangrove project will contribute amongst others to additional sequestration of carbon. More information can be found in section 2.2.

Early 2020, SBM Offshore announced the emissionZERO^® concept, which has evolved into a program targeting near zero emissions. This ambition has also been made part of the sustainability policy.

EmissionZERO^® aims to market floating energy production solutions with near zero emissions. SBM Offshore sets targets in line with the net-zero ambitions of key stakeholders, and calls for their active engagement. EmissionZERO^® is a program for continuous product development, providing a platform for stakeholder engagement at the same time.

Key commitments:

• Strategy and actions compatible with net-zero by no later than 2050.

• Sourcing green energy to run the business (Scope 1 & 2 emissions).

• Working towards net-zero emissions from downstream leased assets (Scope 3).

• Taking a science-based approach towards emission reduction target setting (explained in section 1.4.3).

Development of an emissionZERO^®-based FPSO is a key element of the program and is planned in three phases: Phase 1 consists of including existing low carbon solutions alternatives in tenders; Phase 2 focuses on an all-electric FPSO to maximize energy efficiency, feasibility of carbon capture technology integration and hybrid forms of power generation − for instance importing renewable energy from shore or floating renewable energy solutions; and Phase 3 will look at power from shore technologies and carbon-free fuel power generation.

SBM Offshore is actively developing solutions and working with its stakeholders to drive down emissions from downstream leased assets on a continuous basis. Key achievements on the emissionZERO^® FPSO have been:

• The engagement with strategic and key client accounts and suppliers during the year.

• The enrichment of SBM Offshore’s Fast4Ward^® product catalogue with low-carbon solutions.

• The qualification of new technologies, in particular combined-cycle power generation.

• The use of digital technologies (advanced analytics and predictive maintenance) to optimize energy consumption, reduce equipment trips and associated flaring.

• The establishment of a portfolio of ideas and projects to further reduce the carbon footprint of SBM Offshore’s activities.

The success of the program and the impact on the above stated ambitions is highly dependent on market acceptance. SBM Offshore therefore is open for business on emissionZERO^® and welcomes engagement with its value chain.

SBM Offshore remains committed to the ramp-up of emissionZERO^® in the coming years and to keep setting targets to reduce emissions, as explained in section 2.2. Furthermore, SBM Offshore continues to expand the work under TCFD (see section 1.4.3).

To reduce flaring in 2022, SBM Offshore has set a target for reduction in section 2.2. This target reflects the lessons learned from the achievements and challenges in 2021.

Furthermore, SBM Offshore remains committed to achieve better environmental performance than the 2020 IOGP industry benchmark for energy consumption and oil spills per production; and 50% better than the 2020 IOGP industry benchmark for oil in produced water.

2.1.8Digitalization

The purpose of digitalization is to create value: better safety, emission reduction, cost savings or new revenues, for instance. With digitalization, SBM Offshore creates value through optimization of existing processes, transformation of SBM Offshore’s core products and ways of working or creation of new digital services.

SBM Offshore has reinforced its organization and governance, with the creation of a Transformation Office, which provides the guidance, the framework and the support for SBM Offshore to become more digital. The Transformation Office is under the responsibility of the CEO. Digital solutions are brought to market through the Services function, described in section 1.3.3.

In 2021, SBM Offshore has continued to gain technical insight and has positioned digitalization as a key enabler of SBM Offshore’s strategy and value platforms. SBM Offshore uses Digitalization to:

• Improve safety and enable remote control of SBM Offshore’s assets, thanks to IoT (the ‘Internet of Things’), the OIPOC (Operational Intelligence & Performance Optimization Center) or remote assistance tools.

• Reduce CO₂ emissions through improved work processes. For instance, Process Stability digital tools allow the reduction of equipment trips which, in turn, reduces emissions, thus contributing to the emissionZERO^® program.

• The launch of the first pilot of the new ERP system, to further increase lifecycle value from its projects and operations through end-to-end data connection.

• Ease collaboration and allow SBMers to work together, regardless of their locations, through tools such as Microsoft Teams or collaborative platforms (e.g. the Engineering Collaborative Environment).

• Make better decisions through business intelligence software such as Power BI, enabling better insight of historical data.

• Boost learning and working experience through mobile apps or augmented reality.

• Optimize assets operations and utilize data science and artificial intelligence for predictive maintenance. This has led to operating cost savings in the FPSOs that SBM Offshore services on behalf of its clients.

• Optimize project execution through end-to-end process platforms (Integra), or visualization and planning of work fronts at the construction yards. This includes 3D Construction and Work Fronts Management or ‘Robotic Process Automation’ (RPA) technologies that allow the automation of repetitive tasks.

• Create new opportunities and diversify SBM Offshore’s revenues by delivering high-value digital services to customers through Smart Services, a New Energy & Services Product Line.

• 18% increase in the cumulative number of operational signals, compared with 2020, to above 120k. This includes key process indicators such as pressure, temperature, etc. − stored and leveraged for remote monitoring of rotating equipment and process systems, troubleshooting and machine learning (see below graph).

New technologies are rapidly evolving. SBM Offshore will benefit from these new technologies and will develop the skills and capacity necessary to adopt them.

Digitalization requires adopting an end-to-end approach and assessing value throughout the product lifecycle, with further roll out of the ERP system contributing. It also requires building foundational capabilities that support the entire structure. Hence, SBM Offshore will reinforce its organization with the creation of a central Data Office, responsible for the definition and governance of the Data Model. SBM Offshore will rationalize its digital applications landscape and develop a data platform enabling access and integration of data generated from multiple digital applications. This data platform will become the enabler of the Lifecycle Digital Twin and of the customer portal for new digital services.

2.1.9Innovation

The key objective of innovation at SBM Offshore is to bring valuable solutions to market that are in line with SBM Offshore’s strategy, in particular those related to the energy transition. All parts of the organization are encouraged to contribute to innovations in their field of expertise, from ideation to final implementation.

The development of new technology is managed by the Group Technology Department, which ensures that all innovation programs are aligned with the long-term strategies of the Product Lines and with key programs such as emissionZERO^® and Fast4Ward^®. Development roadmaps are kept up to date with technical and market developments through regular reviews.

SBM Offshore brings new technology to market through a structured stage-gate process to ensure that the technology is properly validated before being offered for sale or introduced into projects. This Technology Readiness Level (TRL) process is based on American Petroleum Institute standards (API RP17N) and includes prototype testing and full FEED level definition of new systems as part of the qualification requirements.

SBM Offshore manages its IP portfolio by registering patents and trademarks, as well as through securing trade secrets and know how. To ensure IP integrity, SBM Offshore manages the classification of documents and non-disclosure agreements with partners and ensures restricted access to technology-sensitive documents. Freedom-to-operate checks are conducted to ensure respect for third-party rights. Through this approach, risks associated with technological developments are mitigated (see section 1.4.2).

In 2021, SBM Offshore continued to increasingly diversify its development efforts in emerging technologies associated with gas, power and renewable energies, allocating 60% of the Group Technology R&D budget to non-carbon technology. Some of the main development projects undertaken in 2021 include:

• SBM Offshore’s unique Floating Offshore Wind TLP concept has been adopted by the PGL floating wind farm development project and is progressing through the EPC phase. In parallel, the next generation of this TLP Floating Offshore Wind foundation, achieving lower cost in mass production, is under development.

• The innovative S3^® Wave Energy Converter (WEC) project at SBM Offshore’s R&D Laboratory has made significant advances. Site work and components qualification are under way to deliver the prototype. The project schedule for completion has been extended, owing to the COVID-19 pandemic.

• SBM Offshore’s emissionZERO^® program is on track to deliver the phase 1 emissionZERO^® FPSO concept. As part of this roadmap, the design of a topside module to capture CO₂ emitted from gas turbine exhaust has been further developed and is expected to be available by 2023.

• In close collaboration with the newly established gas product line, new technologies and concepts have been developed related to blue and green ammonia and hydrogen.

• The first Virtual Reality training for offshore personnel has been delivered and rolled out in the fleet, featuring SBM Offshore’s own accumulated operational experience.

• The Large Diameter High Pressure swivel test bench has been completed in the R&D laboratory. The test bench has been designed and commissioned by SBM Offshore and enables the qualification of new swivel and seal designs.

• Following the Ocean Code Hackathon last year, work has begun in collaboration with a newly created start-up company to produce an artificial intelligence-based system to detect corrosion in FPSO topsides.

• Progress was made to diversify and democratize innovation sourcing within SBM Offshore. Main achievements were the hosting of the first Technology Conference open to the entire SBM Offshore community, and the deployment of a crowd-sourced collaborative innovation management platform.

• SBM Offshore has begun working with external open-innovation platforms to identify promising new technologies under development and potential partnerships with start-up companies, universities, and technology institutes.

Out of the 44 technology development projects that aim to increase Technology Readiness Levels (TRL), 35 have been completed successfully, 3 have been delayed for completion in 2022 and 6 have been cancelled and replaced by more promising non-carbon technology developments.The Company filed 31 new patent applications to strengthen its existing portfolio of 142 patent families; in particular in the area of renewables and digital applications. Over the course of 2021, eleven innovation projects reached TRL 4.This level demonstrates that reliability, function and performance criteria are met in the intended operating condition and the solution can be integrated into a complete system.

SBM Offshore will continue to focus its technology development activities on the energy transition by allocating more than half of its technology development budgets to EU Taxonomy Eligible technology¹. This will ensure sustainability of innovations, attractiveness to investors and contribute to a responsible energy transition required to mitigate climate change impact. In addition, SBM Offshore will invest in topside technologies to deliver the ambitions of SBM Offshore’s emissionZERO^® FPSO program and developments in alternative energy storage and generation. SBM Offshore will also continue to invest in research and development for its innovative S3^® Wave Energy Converter and Floating Offshore Wind solutions.

2.1.10Energy Transition

Key elements that enable SBM Offshore’s success in the energy transition area are:

• Product Development for Floating Offshore Wind and Wave Energy.

• Technology Development supporting these product developments (see more detail in section 2.1.9).

• The emissionZERO^® program explained in section 2.1.7.

• SBM Offshore commits to a strategy and action plan that is compatible with the transition to net-zero by no later than 2050, as explained in section 2.2.

Product development for energy transition is addressed through SBM Offshore’s New Energies & Services business unit, in collaboration with the Technology Department. An important step in this process is the development of prototypes and pilot projects, which can also be done as co-development projects with partners and/or clients. SBM Offshore monitors its commercial pipeline to allow SBM Offshore to achieve its envisioned growth goals in line with its 2030 ambition.

With this management approach for energy transition, SBM Offshore is addressing the significant risks of oil price dependency, portfolio risks and climate change described in section 1.4.2.

SBM Offshore complies with the EU taxonomy regulation and leverages the framework to set targets for and report on the energy transition. Disclosures are found in section 5.1.2.

SBM Offshore has made significant achievements in 2021:

• The newly established New Energies and Services entity is accelerating in building up the organization, expertise and culture for the Renewables, Gas, Terminals and Digital Service markets.

• SBM Offshore has further articulated a clear ambition to have >2GW Floating Offshore Wind installed or under construction by 2030. This ambition statement provides a directly measurable target.

• The project execution of EDF Renouvelables Provence Grand Large 25.2MW Floating Offshore Wind is in full swing with detailed engineering, structure fabrication and assembly activities ongoing.

• SBM Offshore moved forward as a co-developer in the offshore wind industry with the newly established joint venture, Floventis Energy Limited. The first development project Llŷr in the UK, comprising 2 offshore sites each up to 100MW, has received the Crown Estate’s intention to grant lease subject to a Habitats Regulations Assessment.

• Manufacturing for the WEC S3^® prototype is in progress in SBM Offshore Carros-based laboratory.

• Seawater intake riser program is underway with Shell in Brazil to cool FSPO systems and reduce energy use.

• SBM Offshore has invested in renewable energy technology and products development, with 60% of the total 2021 Group Technology R&D budget applied to non-carbon¹ technologies. This includes further development of next generation of Tension-Leg Platform (TLP) floater design, and Wave Energy Converter products, as well as studies in energy storage, desalination, hydrogen and ammonia for offshore applications.

• SBM Offshore is working on projects that address emissions reduction along the lifecycle of its business, as part of its emissionZERO^® portfolio (see section 2.1.7).

The revenues, CAPEX and OPEX associated with these projects and initiatives add to EU Taxonomy eligible business, as reported in section 5.1.5. SBM Offshore’s commitments should lead to higher revenues from eligible business in the future, with 2021 R&D investment already reflected in the EU Taxonomy eligible OPEX KPI stated. Above-mentioned R&D investments are visible in the OPEX KPI reported. These activities support the mitigation of and/or adaptation to climate change impacts.

SBM Offshore will continue to build upon these achievements and is looking at developing from renewable energy pilots to commercial scale energy infrastructure, as well as increasing its role in the supply chain with the aim of creating more value. For 2022, SBM Offshore has set a target of investing 50% of its R&D budget into EU Taxonomy eligible¹ technologies, as can be read in section 5.1.5.

2.1.11Market Positioning

Market positioning is about global presence and engaging in emerging markets in order to adapt to market developments. The size of the business, new business development and sustainability benchmarks are seen as strong indicators of a successful management approach. Examples of metrics are the performance of the fleet, the revenue backlog, the number of projects won, the new developments in the renewables market, and SBM Offshore’s ESG ratings performance.

SBM Offshore aims to provide for ’double resiliency’, meaning achieving a cost-competitive and low-carbon footprint for its products, which will be the choice of the clients. SBM Offshore’s strategy to Optimize, Transform and Innovate, combined with addressing material topics, leads to a market positioning for future success. Through market positioning, SBM Offshore addresses the competitiveness risks mentioned in section 1.4.2.

Performance is detailed in subsections of 2.1. The following table provides the key items of SBM Offshore’s market positioning.

Market positioning − SBM Offshore performance

SBM Offshore is committed to safe, sustainable and affordable energy for generations to come. SBM Offshore aspires to industry leadership, by understanding stakeholder interests and increasing the size and value of the business. In 2022, SBM Offshore’s focus remains the safe and reliable execution of its ongoing projects and operation of its fleet. SBM Offshore also continues to engage early with clients and vendors to make further progress on the emissionZERO^® program and grow its renewables business. SBM Offshore will continue innovating along the energy transition. There will also be more focus on digitalization and offering digital solutions to the market. Finally, sustainability performance is key to long-term market positioning. See section 2.2 for future developments in that area.

2.2Sustainable Development and Local Impact

SBM Offshore is committed to sustainability, which contributes to SBM Offshore’s vision of providing safe, sustainable and affordable Energy. SBM Offshore follows the Global Reporting Initiative (GRI) standards to report on non-financial performance, as well as on indicators for its material topics.

SBM Offshore has a Sustainability Policy which includes commitments and guiding principles for SBM Offshore and its stakeholders. SBM Offshore is committed to alignment with the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (MNE). Furthermore, to provide context for SBM Offshore’s targets and performance, SBM Offshore leverages the UN SDG framework. SBM Offshore has identified seven SDGs that are most material to its business. Building on the long-term guidance presented in 2020, SBM Offshore has set specific time-bound long-term targets for the selected SDGs. These targets and underlying roadmaps are built with inputs and commitments from different business entities as part of business plans and budgets.

Sustainability is positioned in the portfolio of the CEO. In addition to a sustainability department, SBM Offshore has sustainability ambassadors in various business and functional divisions to drive the implementation of the sustainability strategy and embed it within the ways of working.

In 2021, SBM Offshore built on previous years’ efforts and commitments to selected SDG targets. This performance program is linked to SBM Offshore’s Short-Term Incentive (STI) scheme. In 2021, SBM Offshore added a company target for SDG 4 and further developed its SDG-related company targets towards 2030. The table below demonstrates how SBM Offshore has performed on 2021 targets. SBM Offshore aims to achieve 100% completion of targets.

SBM Offshore takes pride in reporting on SDG-linked targets, and the results achieved during 2021, and in taking action for improvement.

On SDG 3, Good Health and Well-being, SBM Offshore is pleased to see it reached 75% of targeted employees taking part in health check programs, above the target set. Furthermore, additional tutorials were rolled out on mental health and well-being during the ongoing pandemic.

SDG 4 target achievement was inhibited by later than expected stakeholder agreement and remained at 23% completion at year-end. Still SBM Offshore was able to train local Guyanese talent for future offshore careers and is pleased with the stakeholder decisions reached before year-end to invest in a local training center. This enables a catch-up on this target during the first half of 2022.

Regarding SDG 7, Affordable and Clean Energy, an explanation of the flare emissions performance is given in detail under section 2.1.7. SBM Offshore is pleased with nearly meeting the target and learned lessons from challenges described in section 2.1.7. On office certification, SBM Offshore finished 98% of its action plan for 2021. In one of the office buildings a gas consumption reduction action was completed to 75%, inhibiting an overall 100% completion on this specific SDG-linked target.

On SDG 8, Decent Work and Economic Growth, SBM Offshore over-achieved on its target on occupational safety, a recordable injury rate of 0.06 was achieved compared to a target of 0.18. Further detail is explained under section 2.1.2. On Human Rights, 97% of high risk vendors were screened, above the set target of 90%. Engagement with SBM Offshore’s supply chain in yards remains a critical element in ensuring respect for human rights in areas where SBM Offshore engages in business.

For SDG 9, Industry, Innovation and Infrastructure, SBM Offshore has invested 60% of its Group Technology R&D budget in non-carbon technologies to facilitate the energy transition and decarbonization (target was 50%). Furthermore, SBM Offshore added 6 low carbon modules to its product catalogue, better than the target of 4 and in line with its ambitions to significantly reduce Scope 3 emissions as explained in section 2.1.7. SBM Offshore takes pride in the SUSTAIN-1 notation as a world’s first on one of the FPSOs delivered this year.

Regarding SDG 13, Climate Action, SBM Offshore achieved air-travel-related emissions reduction of 61%, compared with 2019, which was supported by remote working during the continued pandemic.

With regard to SDG 14, Life Below Water, there were zero hydrocarbon spills exceeding one barrel in volume, while the industry benchmark¹ is 0.5. SBM Offshore takes pride in beating the oil in water discharge benchmark by 66%, well above the target set (50%).

SBM Offshore has applied the lessons learned from performance on these targets for further improvement. SBM Offshore takes pride in its continuous improvement approach and will apply the knowledge gained from its performance in future target setting. This has led to positive and improving ratings in sustainability benchmarks, as per the following table.

Ranking of SBM Offshore in Sustainability Benchmarks

Across the world SBMers took action in the spirit of the SDGs. A few examples are highlighted below.

On SDG 3, employees took part in the global Mental Health & Well-being campaign that was rolled out via e-Learning. In Kuala Lumpur employees distributed meals to local communities during Hari Raya and donated to provide COVID-19 protection equipment. In Guyana, SBM Offshore further supported its partnership with Plympton Farms, an innovative agricultural project that is turning barren earth into lucrative farmland, creating stable jobs for residents in more remote areas of the country.

In Brazil, action was taken on SDG 4 through the Entrepreneurial Trail program. The initiative provides entrepreneurial education for students from public schools in the State of Rio de Janeiro. The remote format enabled an increase in the number of students trained by the project from nearly 4,000 to over 6,000 in 2021.

The Schiedam and Monaco offices took part in the Monaco Energy Boat Challenge, competing in the Energy Class. Running a green hydrogen-powered boat, SBM Offshore is contributing to the development of clean energy (SDG 7).

Across the globe, SBM Offshore launched its Diversity & Inclusion (D&I) program this year, which includes local ambassadors to address D&I throughout the employment journey. Through this, the Company aspires to have an impact on inclusive economic growth (SDG 8). SBM Offshore will further grow its commitment to D&I through SDG 10 ’Reduced Inequalities’ as explained below.

Various initiatives were taken on SDGs 13 (Climate Action) and 14 (Life Below Water). The agreement signed for Mangrove Development in Guyana and the deployment of Reefballs in Canada ensure a meaningful contribution for both these SDGs. Other examples are tree planting initiatives in Malaysia and the USA, net-zero commutes in China, internships on marine research and circularity in Monaco and Amsterdam and a ‘Zero First-Use Plastic’ program in India. In the Monaco office, renovations were carried out to improve energy efficiency, cut waste and support sustainable products.

On June 8, SBM Offshore celebrated World Oceans Day, including a company-wide photo contest and local activities. During Life Day 2021 nearly 700 SBMers participated in a workshop addressing SDGs 13 & 14 whereas other SBMers attended workshops around Speaking Up, Mental Health & Well-being and Work-Life Balance.

Worldwide over 30 charitable donations were made, in line with the SDGs, across the various locations where SBM Offshore is active. These include contributions to local education and scholarships, children’s health and well-being, women’s inclusion in business, sustainable fishing, an ocean protection expedition and COVID-19 support in various countries.

SBM Offshore has formulated SDG-linked targets for 2022 as per below graph. Furthermore, the Company is adding two additional SDGs to its program – in order to further drive performance on diversity & inclusion (SDG 10) and circularity (SDG 12). Explanations of the action and performance for these SDGs are given in the section ’Retaining & Developing Employees’ and the update on Deep Panuke decommissioning under section 2.1.4. Long-term and annual targets for the additional SDGs will be developed and disclosed at a later stage.

During 2022, SBM Offshore will continue to assess SDGs, to see where additional action can be taken in the future.

3Governance

3.1Management Board and Supervisory Board

3.2Corporate Governance

This section gives a broad outline of SBM Offshore’s corporate governance structure by describing the roles of the corporate bodies, the external auditor and of the foundation Stichting Continuïteit SBM Offshore. This section also indicates to what extent SBM Offshore applies the principles and best practice provisions in the Dutch Corporate Governance Code of December 8, 2016 (the Corporate Governance Code). The details on compliance with the Corporate Governance Code can be found on SBM Offshore’s website under ’Rules governing the Supervisory Board’. The full text of the Corporate Governance Code can be found on www.mccg.nl.

3.2.1Corporate Governance Structure

SBM Offshore N.V. is a limited liability company (Naamloze Vennootschap) incorporated under the laws of the Netherlands with its corporate seat in Amsterdam. The Company is listed on Euronext Amsterdam. The Company has a two-tier board consisting of a Supervisory Board and a Management Board. Each board has its specific roles and tasks regulated by laws, the articles of association, the Corporate Governance Code, the Supervisory Board rules and Management Board rules. The Management Board rules and Supervisory Board rules contain details on the ways of working of the Management Board and the Supervisory Board. Both sets of rules are published on SBM Offshore’s website, together with the articles of association.

3.2.2Management Board

The Management Board manages the Company and is responsible for the continuity of the Company and its business. The Management Board focuses on long-term value creation for the Company and its business and takes into account the relevant stakeholders’ interests. In fulfilling its responsibilities, the Management Board is guided by the interests of the Company and its business.

Each year, the Management Board presents to the Supervisory Board the strategy of the Company including the operational plan for the following financial year. The financial and operational objectives that allow quantification and progress measurement of the strategy implementation are regularly reviewed. Both the strategy and the operational plan are adopted after the Supervisory Boards’ approval.

The Management Board is responsible for determining the Company’s risk profile and policy, which are designed to realize the Company’s objectives, to assess and manage the Company’s risks and to ensure that sound internal risk management and control systems are in place. The Management Board monitors the operation of the internal risk management and control systems and carries out a systematic assessment of their design and effectiveness at least once a year. This monitoring covers all material control measures relating to strategic, operational, financial, compliance and reporting risks. Among other considerations, attention is given to observed weaknesses, instances of misconduct and irregularities and indications from whistle blowers. A regular risk report is provided to the Supervisory Board.

The Management Board adopted corporate core values that contribute to a culture focused on long-term value creation for the Company. These values are Integrity, Care, Entrepreneurship and Ownership and are regularly discussed with the Supervisory Board. The Management Board encourages behavior that is in keeping with the values and propagates these values through leading by example. The Management Board is responsible for the incorporation and maintenance of the values. The Management Board has drawn up a Code of Conduct and monitors its effectiveness as well as compliance with this Code. Findings and observations in this context are shared with the Supervisory Board.

The Management Board is accountable to the Supervisory Board and the General Meeting for the performance of its management tasks.

The Management Board currently consists of four members: the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer and the Chief Governance and Compliance Officer. Management Board members are appointed and can be suspended or dismissed by the General Meeting. Further information about the appointment and dismissal of Management Board members can be found in SBM Offshore’s articles of association.

Section 3.1 lists the material mandates of the Management Board outside SBM Offshore. Management Board members shall inform the Supervisory Board before accepting positions outside the Company and shall not accept such position prior to the approval of the Supervisory Board. Mandates are discussed annually in the Supervisory Board meeting. The Company is therefore compliant with best practice 2.4.2 of the Corporate Governance Code. Members of the Management Board may also be appointed to the statutory board of the Company’s operational entities.

3.2.3Supervisory Board and Committees

The Supervisory Board supervises the policies, the management of the Company and its businesses, the effectiveness and the integrity of the internal control and risk management systems and procedures implemented by the Management Board, as well as the general conduct of affairs of the Company and its businesses. The Supervisory Board also supervises the activities of the Management Board in relation to the creation of a culture aimed at long-term value creation for the Company and its businesses. Furthermore the Supervisory Board assists the Management Board with advice in accordance with the Corporate Governance Code, the articles of association and the Supervisory Board rules. In the performance of its duties, the Supervisory Board is guided by the interests of the Company’s stakeholders. In addition, certain (material) decisions of the Management Board, as stipulated in the Dutch Civil Code, articles of association or the Supervisory Board and Management Board rules, require the Supervisory Board’s prior approval.

The Supervisory Board currently consists of seven members. Members of the Supervisory Board are appointed by the General Meeting following nomination by the Supervisory Board. A Supervisory Board member is appointed for a period of four years and may then be re-appointed once for another four-year period. A Supervisory Board member may subsequently be re-appointed again for a third period of two years, which may be extended by at most two years. Further information about the appointment and dismissal of Supervisory Board members can be found in SBM Offshore’s articles of association.

The Supervisory Board appoints one of its members as Chairman and one as Vice-Chairman.

The Supervisory Board has three subcommittees: the Audit and Finance Committee, the Appointment and Remuneration Committee and the Technical and Commercial Committee. The Appointment and Remuneration Committee is a joint committee with two separate chairpersons and two separate tasks: the selection and appointment preparation of Management Board and Supervisory Board members and the preparation of decision-making regarding remuneration matters. The task of each subcommittee is to assist and advise the Supervisory Board in fulfilling its responsibilities. SBM Offshore has an internal audit department with direct reporting to the Supervisory Board through the Audit and Finance Committee. More information about the ways of working of the Supervisory Board and its committees can be found in the Supervisory Board and Committee rules, as available on the Company’s website. The Supervisory Board has drawn up a retirement schedule for its members, which is available on the Company’s website.

Section 3.1 lists the material mandates of the Supervisory Board outside SBM Offshore. Supervisory Board members shall inform the Supervisory Board before accepting positions outside the Company. Positions may not be accepted without the Supervisory Boards’ prior approval. The positions can not be in conflict with the Company’s interests. Mandates are reviewed annually in the Supervisory Board meeting. The Company is compliant with best practice 2.4.2 of the Corporate Governance Code.

3.2.4Share capital

The authorized share capital of the Company amounts to EUR200 million and is divided into 400,000,000 ordinary shares with a nominal value of EUR0.25 and 400,000,000 protective preference shares, also with a nominal value of EUR0.25. The preference shares can be issued as a protective measure, as explained below in the section on the Stichting Continuïteit SBM Offshore.

As per December 31, 2021, 180,671,305 (2020: 188,671,305) ordinary shares are issued. No preference shares have been issued.

As per the Dutch Act on Conversion of bearer shares (Wet omzetting aandelen aan toonder), all bearer shares still outstanding at December 31, 2020 have been converted into registered shares (31,840) held in the name of the Company as per January 1, 2021. A shareholder who hands in a bearer share certificate to the Company before January 2, 2026 is entitled to receive from the Company a replacement registered share. A shareholder may not exercise the rights vested in a share until the shareholder has handed in the corresponding bearer share certificate(s) to the Company.

3.2.5General Meeting

Annually within six months after the end of the financial year, the Annual General Meeting (AGM) shall be held. The agenda for this meeting generally includes the following standard items:

• The report of the Management Board concerning the Company’s affairs and the management as conducted during the previous financial year.

• The report of the Supervisory Board and its committees.

• The remuneration report for an advisory vote.

• The adoption of the Company’s Financial Statements, the allocation of profits and the approval of the dividend.

• The discharge of the Management Board and of the Supervisory Board.

• Corporate Governance.

• The delegation of authority to issue shares and to restrict or exclude pre-emptive rights.

• The delegation of authority to purchase own shares.

• The composition of the Supervisory Board and of the Management Board.

In addition, certain specific topics may be added to the agenda by the Supervisory Board.

Proposals to the agenda of General Meetings can be made by persons who are entitled to attend General Meetings, solely or jointly representing shares amounting to at least 1% of the issued share capital, or with a market value of at least EUR50 million. Proposals of persons who are entitled to attend the shareholders meetings will only be included in the agenda if such proposals are made in writing to the Management Board not later than sixty days before that meeting.

With reference to the articles of association, all shareholders are entitled, either personally or by proxy authorized in writing, to attend the General Meeting, to address the General Meeting and to vote. The articles of association do not provide for any limitation of the transferability of the ordinary shares and the voting rights of shareholders are not subject to any limitation.

At the General Meeting, each ordinary share with a nominal value of EUR0.25 each shall confer the right to cast one (1) vote. Each protective preference share with a nominal value of EUR0.25 each shall confer the right to cast one (1) vote, when issued. None of the protective preference shares have been issued to date. Unless otherwise required by law or the articles of association of the Company, all resolutions shall be adopted by an absolute majority of votes. The General Meeting may adopt a resolution to amend the articles of association of the Company by an absolute majority of votes cast, but solely upon the proposal of the Management Board, subject to the approval of the Supervisory Board. The articles of association are reviewed on a regular basis and were last amended in April 2016.

Due to the COVID-19 pandemic, the 2021 AGM was held virtually and shareholders could cast their votes prior to and real-time in the meeting. 135,310,224 ordinary shares participated in the voting, equal to 71.7% (2020: 64.5%) of the then total outstanding share capital of 188,671,305 ordinary shares. All proposed resolutions were adopted. The outcome of the voting of the meeting was posted on the Company’s website on the day following the 2021 AGM.

3.2.6Issue, Repurchase and Cancellation of Shares

The General Meeting or the Management Board, if authorized by the General Meeting and with the approval of the Supervisory Board, may resolve to issue shares.

The General Meeting or the Management Board, subject to the approval of the Supervisory Board, shall set the price and further conditions of issue, with due observance of the provisions contained in the articles of association. Shares shall never be issued below par, except in the case as referred to in article 2:80 (2) Dutch Civil Code. At the 2021 AGM, the shareholders have delegated to the Management Board for a period of eighteen months and, subject to the approval of the Supervisory Board, the authority to issue ordinary shares up to 10% of the total outstanding shares at that time. In addition, authorization was granted to restrict or to exclude pre-emption rights, as provided for in article 6 of the Company’s articles of association for a period of eighteen months and subject to the approval of the Supervisory Board.

The Management Board may, with the authorization of the General Meeting and the Supervisory Board and without prejudice to the provisions of article 2:98 Dutch Civil Code and the articles of association, cause the Company to acquire fully paid-up shares in its own capital for valuable consideration. The Management Board may resolve, subject to the approval of the Supervisory Board, to dispose of shares acquired by the Company in its own capital. No pre-emption right shall exist in respect of such disposal. At the 2021 AGM, the shareholders have delegated the authority to the Management Board for a period of eighteen months, as from April 7, 2021 and subject to approval of the Supervisory Board, to repurchase up to 10% of the total outstanding shares at that time.

On August 5, 2021 SBM Offshore initiated a EUR150 million share repurchase program, with the objective of share capital reduction and, in addition, to provide shares for regular management and employee share programs. The repurchase program was completed on October 11, 2021. The execution of the share repurchase program was done under the terms of an engagement letter with a third-party and performed in compliance with the safe harbor provisions for share repurchases. In accordance with the European Market Abuse Regulation, the Company informed the market through weekly press releases and updates on its website. In 2021, 8 million shares in the capital of SBM Offshore were cancelled. The EUR150 million share repurchase program and the cancellation of 8 million shares was executed under the authorization of the 2021 AGM resolution. More information can be found in section 4.2.4 of this Annual Report.

3.2.7External Auditor

The external auditor of SBM Offshore is appointed by the General Meeting on the proposal of the Supervisory Board upon the selection process and nomination of the Audit and Finance Committee and the advice of the Management Board.

PricewaterhouseCoopers Accountants N.V. (’PricewaterhouseCoopers’) was first appointed during the 2014 AGM and re-appointed during the 2021 AGM for a period of three years and ending with the audit of the financial year 2023. Pursuant to the Dutch Auditors Profession Act (Wet op het accountantsberoep), the audit firm of a so-called public interest entity (such as a listed company) is required to be replaced if the audit firm has performed the statutory audits of the company for a period of ten consecutive years, which term ends with the audit of the financial year 2023. Based on auditor independence requirements, the lead auditor in charge of the SBM Offshore account is changed every five years.

The external auditor attends all meetings of the Audit and Finance Committee, as well as the meeting of the Supervisory Board at which the financial statements are approved. The external auditor receives the financial information and underlying reports of the quarterly results and is given the opportunity to comment and respond to this information.

Pursuant to the Auditor’s Profession Act, the auditors are prohibited from providing the Company with services in the Netherlands other than ’audit services aimed to provide reliability concerning the information supplied by the audited client for the benefit of external users of this information and also for the benefit of the Supervisory Board, as referred to in the reports mentioned’. During 2021, a small number of limited-scope non-audit services were provided by foreign member firms of the PricewaterhouseCoopers global network, taking into account the external auditor’s independence rules and SBM Offshore’s policy in this regard.

3.2.8Stichting Continuïteit SBM Offshore

In this section, SBM Offshore’s anti-takeover measures are described, as well as the circumstances under which it is expected that these measures may be used.

A foundation ‘Stichting Continuïteit SBM Offshore’ (the Foundation), was established on March 15, 1988. In summary, the objectives of the Foundation are to represent the interests of SBM Offshore in such a way that the interests of the Company and of all parties involved in this are safeguarded, and that influences which could affect the independence, continuity and/or the identity of the Company in breach of those interests are deterred. The Foundation will perform its role, and take all actions required, at its sole discretion. In the exercise of its functions it will, however, be guided by the interests of the Company and the business enterprises connected with it, and all other stakeholders, including shareholders and employees.

The Foundation is managed by a Board, the composition of which is intended to ensure that an independent judgement may be made as to the interests of the Company. The Board consists of a number of experienced (former) senior executives of multinational companies: Mr. A.W. Veenman, Chairman, Mr. B. Vree, Vice-Chairman, Mr. R.H. Berkvens, Ms. H.F.M. Defesche and Mr. J.O. van Klinken. To be kept informed about the business and interests of the Company, the Chairman of the Supervisory Board, the CEO and the CGCO are invited to attend the Foundation Board meetings.

The Management Board, with the approval of the Supervisory Board, has granted a call option to the Foundation to acquire a number of preference shares in the Company’s share capital, carrying voting rights, equal to one half of the voting rights carried by the ordinary shares outstanding immediately prior to the exercise of the option, enabling it effectively to perform its functions, at its sole discretion and responsibility, as it deems useful or desirable.

The option agreement between SBM Offshore and the Foundation was last amended and restated in 2011, to reflect a waiver by the Company of its put option and the alignment of the nominal value of the protective preference shares with the nominal value of ordinary shares by reducing the nominal value of EUR1 to EUR0.25 and the related increase in the number of protective preference shares, as per the amended articles of association of the Company. The Foundation is independent, as stipulated in article 5:71 (1) (c) Financial Markets Supervision Act.

3.2.9Other Regulatory Matters

The members of the Management Board have a services contract with SBM Offshore N.V. These contracts stipulate that members of the Management Board may not compete with the Company. Conflict of interest procedures are included in the Management Board and Supervisory Board Rules and the Company’s Code of Conduct, and reflect Dutch law and the principle and best practices of the Dutch Corporate Governance Code. In 2021, there were no conflicts of interest in relation to the members of the Management Board and Supervisory Board reported other than ordinary course compensation arrangements. The Company is compliant with best practice 2.7.3 to 2.7.4 of the Corporate Governance Code.

In 2021, SBM Offshore did not enter into transactions with persons who held at least ten percent of the shares in the Company. The Company is compliant with best practice 2.7.5 of the Corporate Governance Code.

In addition to the Company’s Insider Trading Rules, the Supervisory Board rules and Management Board rules contain a provision stipulating that Supervisory Board and Management Board members will not trade in Company shares or other shares issued by entities other than the Company on the basis of share price sensitive information if this information has been obtained in the course of managing or supervising the Company’s business. For information about the shares (or other financial instruments) held in SBM Offshore N.V. by members of the Management Board, reference is made to section 4.3.6 of the notes to the consolidated financial statements.

The Company is not a party to any material agreement that takes effect, alters or terminates upon a change of control of the Company following a take-over bid as referred to in section 5:70 of the Dutch Financial Markets Supervision Act, other than as mentioned in this paragraph. SBM Offshore N.V. has a revolving credit facility agreement under which the approval of the participating lenders must be obtained in the event of a change in control of the Company after a public take-over bid has been made. Certain vessel charter contracts contain clauses to the effect that the prior consent of the client is required in case of a change of control or merger or where the company resulting from such change of control or merger would have a lower financial rating or where such change of control or merger would affect the proper execution of the contract. In addition, local bidding rules and regulations (e.g. in Brazil for Petrobras) may require client approval for changes in control. A change of control clause is included in the services contract between the Company and each of the members of the Management Board.

Since the end of 2012, an Executive Committee has been in place. The Executive Committee facilitates decision-making without detracting from the exercise of statutory responsibilities by the members of the Management Board and the internal company authority matrix. Currently, the Executive Committee is comprised of the Management Board members, the Managing Directors of Floating Production Solutions, Global Resources & Services, Operations, Strategic Growth and New Energies & Services, as well as the Group HR Director and the Chief Strategy Officer. In principle, the Executive Committee meets every three weeks. In the meetings strategic, operational and organisational topics are discussed.

In 2021, a revised Diversity Policy for the Supervisory Board and for the Management Boardwas finalised and can now be found on the Company website. Diversity targets found to be relevant are i) nationality/cultural background with a due and fair representation of the geographic regions in which the Company operates and ii) gender. At least one third of the Supervisory Board members should be male and one third should be female. The Company will set diversity targets for the Management Board and senior management in 2022.

In 2021 the members of the Management Board covered four and the members of the Supervisory Board covered six nationalities. Two additional nationalities were represented in the Executive Committee. A broad range of experience in the geographic regions the Company operates is seen, or in case of new regions, experience is being build up. For gender, as at December 31, 2021 28.5% of the Supervisory Board members was female, whereby it is noted that a female candidate is proposed to be appointed at the 2022 AGM.The Management Board consisted of 100% males. More than for re-appointments, whereby experience and good performance are weighing heavily on the decision, new appointments offer opportunity to re-balance the composition in view of fair and equal gender representation when needed. The targets set for (gender) diversity will be taken into consideration when there are vacancies in the Supervisory Board, Management Board and senior management positions.

The Company has a Code of Conduct which is built on the Company’s four core values Integrity, Care, Entrepreneurship and Ownership. Reporting channels and a Speak Up Line are in place and enable SBM Offshoreto carefully listen to its employees and partners in the value chain about concerns related to potential violations against the Code of Conduct, Core Values, or the law. The Speak Up Line, managed by an independent third party, is available 24 hours a day, 365 days a year, supports multiple languages, and allows for anonymous and confidential reporting. For more details on SBM Offshore’s compliance program reference is made to section 3.6.2. The Code of Conduct can be found on the Company website.

SBM Offshore complies with the principles and best practices of the Corporate Governance Code.

3.3Report of the Supervisory Board

In 2021, Laurence Mulliez stepped down after the 2021 AGM after six years of service. Following the departure of Andy Brown, Francis Gugen took over as Vice-Chairman of the Supervisory Board. The Supervisory Board welcomed Ingelise Arntsen who was newly appointed at the 2021 AGM for a period of four years, until the 2025 AGM. In 2021 the Supervisory Board also announced its intention to nominate Hilary Mercer as member of the Supervisory Board. In accordance with best practice 2.2.2 of the Corporate Governance Code, the profile, the competencies and background of the Supervisory Board members already in function, as well as the Diversity Policy for the Supervisory Board, were closely observed for nominations made.

As per year-end, six out of seven Supervisory Board members are independent from the Company within the meaning of best practice provisions 2.1.7 to 2.1.9 inclusive of the Corporate Governance Code. The exception is Jaap van Wiechen in view of his position as member of the Executive Board of HAL Holding N.V./director HAL Investments B.V. Sietze Hepkema who was a Management Board member of SBM Offshore until this appointment as Supervisory Board member in April 2015, qualifies as independent Supervisory Board member as of April 16, 2020.

In 2021, the Supervisory Board held seven scheduled meetings, one additional meeting and some ad hoc calls. Due to the COVID-19 pandemic, Supervisory Board members mostly participated in the meetings via video conferencing. The Supervisory Board assessed that its members have adequate time available to give sufficient attention to the Company. In 2021, the attendance percentage of the Supervisory Board for the meetings was 98.21%. The table below shows the overview of the attendance in 2021 at scheduled meetings for the individual members out of the number eligible to attend.

1. Where a Supervisory Board member retired from or was appointed to the Supervisory Board, stepped down from a Committee or was appointed throughout the year, only meetings during his/her tenure were taken into account

The Management Board prepared detailed supporting documents as preparation for all meetings and several representatives of senior management were invited to give presentations on specific topics within their area of responsibility. The Supervisory Board and Committee meetings were usually held over two days to ensure time for review and discussion. The Management Board attended all scheduled meetings of the Supervisory Board. The customary informal pre-board dinner was cancelled in most instances in 2021 due to the COVID-19 pandemic. Several informal meetings and contacts among Supervisory Board members and/or Management Board members took place. Prior to the scheduled meetings, the Supervisory Board met outside the presence of the Management Board to reflect on agenda items and discuss potential items requiring attention during the meeting. The Supervisory Board also received regular updates from the Management Board outside meetings on relevant developments within the Company.

In 2021, a repeat subject on the agenda of the Supervisory Board meeting was the challenges that came with the COVID-19 pandemic. The Supervisory Board was regularly informed about the impact of COVID-19 on SBM Offshore, its employees, projects, supply chain and fleet operations, as well as measures implemented in relation herewith. In addition, recurring standard items on the agenda of the Supervisory Board meetings were the Company strategy, the commercial activities/projects and the market environment, the operational performance, the financial performance and liquidity position, treasury topics, investor relations topics, compliance, risk management and internal controls, SBM Offshore organisation and culture including diversity and inclusion, corporate governance, succession planning of the Management Board, Supervisory Board and senior management of the Company, remuneration for senior management and the Management Board and ESG topics including SBM Offshore’s approach hereto.

In February 2021, the Supervisory Board approved the 2020 Financial Statements and the proposal to the General Meeting of an all cash dividend distribution. In the same meeting, the 2021 operating plan was approved in its final form. The Supervisory Board also nominated PricewaterhouseCoopers for re-appointment as external auditor. In August, the Supervisory Board approved the launch of a EUR150 million share buyback program. On various occasions during the year, the strategy, progress on the implementation thereof, as well as the risks related to its realization, were reviewed and discussed. As an example, these discussions included the strategic position of the Company in the energy transition for its clients and the fast-developing floating offshore wind market. The Long-Term Strategic Plan was discussed and approved in December. The Supervisory Board annually discusses the Company’s risk appetite. In addition, the Supervisory Board frequently discussed the elements of the Management Board remuneration policy. The feedback of shareholders and institutional investors lead to a proposal to the General Meeting of a revised remuneration policy for the Management Board (RP 2022), which the General Meeting approved. The SBM Offshore organisation in relation to the challenges in relation to the COVID-19 pandemic and in general were regularly discussed. The results of the 2021 Pulse Survey (employee satisfaction survey) and action plans were presented and reviewed. Furthermore, time was spent on talent management and leadership development.

The Supervisory Board has appointed three committees which are formed from among its members. These committees have advisory powers, share the main considerations and conclusions of their meetings in the Supervisory Board meeting and provide recommendations for decision by the Supervisory Board. The composition of each committee as at December 31, 2021 is detailed below.

1. Appointed as per April 7, 2021
2. Appointed as per April 7, 2021
3. Appointed as per January 24, 2021

There is an open invitation to join committee meetings for those Supervisory Board members who are not a member of specific committee. This invitation is regularly made use of.

Sietze Hepkema succeeded Laurence Mulliez as member of the Audit and Finance Committee from April 2021. The Audit and Finance Committee convened five times in 2021. The attendance percentage of the Audit and Finance Committee meetings was 96.7%. The Chairman of the Audit and Finance Committee reported to the Supervisory Board on the principal issues discussed, on actions arising and the follow-up of such actions and made recommendations on those matters requiring a decision by the Supervisory Board.The Management Board, the Group Internal Audit Director, the Group Controller and the external auditor attended the meetings. After each meeting, the Audit and Finance Committee met with the external auditor outside the presence of the Management Board. The Chairman of the Audit and Finance Committee regularly held meetings with the CFO, and separately with SBM Offshore’s Group Internal Audit Director and again separately with PricewaterhouseCoopers.

The Audit and Finance Committee prepares the Supervisory Board’s decision making regarding the supervision of the integrity and quality of the Company’s financial reporting and the effectiveness of the Company’s internal risk management and control systems. Standard agenda topics in 2021 were financial performance, compliance, risk management and internal controls, Internal Audit activities and IT (including cybersecurity). In addition, other items discussed included: the COVID-19 pandemic, funding and liquidity, dividend proposal, share repurchase proposal, functioning of and relationship with the external auditor including the quality of the audit, financing strategy and the SBM Offshore’s approach to tax policy and specific tax issues.

The external auditor participated in all meetings of the Audit and Finance Committee. Discussions were held with PricewaterhouseCoopers about the audit plan, management letter, audit report and financial statements including managerial judgements and key accounting estimates. Additionally, the Audit and Finance Committee formally evaluated the external auditor and discussed its re-appointment, also in view of the change in lead audit partner as from the financial year 2021. The outcome of the evaluation was positive.

The Appointment and Remuneration Committee had five scheduled meetings in 2021. The attendance rate of the Appointment and Remuneration Committee meetings was 100%. In addition to scheduled meetings, various ad hoc meetings took place to prepare and discuss the Management Board remuneration policy. The Appointment and Remuneration Committee consists of two parts as prescribed by the Corporate Governance Code: a part for Selection and Appointment matters and a part for Remuneration matters. During the Supervisory Board meetings, the respective Chairperson reported on the selection and appointment matters and on the remuneration matters reviewed by the Committee, on actions arising and the follow-up of such actions. They made recommendations on those matters that require a decision from the Supervisory Board. The meetings were attended by the Management Board and the Group HR Director, except where the Appointment and Remuneration Committee chose to discuss matters in private.

The main remuneration matters discussed by the Appointment and Remuneration Committee in 2021 were: determination of the relevant remuneration of the Management Board (Short-Term Incentive target setting and realization, and the Value Creation Stake award) and the Remuneration Policy for the Management Board. On Management Board remuneration matters, the views of the Management Board members on their own remuneration have been noted.

The main selection and appointment matters discussed were: succession planning, the proposal to nominate Douglas Wood for re-appointment as member of the Management Board, the proposal to nominate Ingelise Arntsen for appointment as member of the Supervisory Board, talent management, the SBM Offshore organizational structure, employee well-being (Pulse Survey) and culture.

In 2021, Jaap van Wiechen was elected as Chairman of the Technical and Commercial Committee due to the departure of Andy Brown. As from April 2021, Ingelise Arntsen became a member of the Committee. The Technical and Commercial Committee convened six times in 2021. The attendance rate of the Technical and Commercial Committee for these meetings was 100%. The Chairman of the Technical and Commercial Committee reported to the Supervisory Board on the principal issues discussed, on actions arising and the follow-up of such actions and made recommendations on those matters requiring a decision. The meetings were attended by the Management Board, and relevant senior management representatives who gave presentations on specific topics within the remit of the Technical and Commercial Committee.

The main subjects discussed by the Technical and Commercial Committee were the following: the COVID-19 pandemic and the impact on the fleet and operations, Health, Safety, Security and Environment and Process Safety performance, operational performance and strategy, project resourcing and execution, sales, marketing and tender activities, client relationships, technology and innovation developments.

Following appointment to the Supervisory Board, new members receive a comprehensive induction tailored to their needs. This includes sessions with members of the Management Board and senior management in which they are informed on all relevant aspects of the Company as well as site visits. Furthermore, during the first year of appointment, new members often are present at the meetings of committees of which they are not a member. In 2021, SBM Offshore welcomed one new member to the Supervisory Board. Due to the COVID-19 restrictions, the induction program took place in the form of sessions with the Management Board and senior management, as well as participation in the annual mid-year Strategy Seminar. Regrettably, site visits were not possible in 2021.

Both the Management Board and the Supervisory Board spent time on deep dives on various relevant subjects, for example the energy transition and the role of the Company herein. In addition, Supervisory Board members participated in various e-Learnings via the SBM Offshore Compliance platform. Site visits are seen as an opportunity for continuing education. In December a virtual site tour by means of a pre-recorded video was organised for the Supervisory Board to review the progress of the Provence Grand Large project. Site visits in physical form are to be continued if and when is possible.

In August 2021, the Supervisory Board assessed the profiles and the competencies of the individual Supervisory Board members. Annually, an assessment on the functioning of the Supervisory Board, its Committees and its members is performed. In principle this is done with an external advisor every three years. As the 2019 performance evaluation was done with an external advisor, the Supervisory Board conduced a self-assessment in November 2021 via a survey which was completed by the members of the Supervisory Board and the Management Board. Questions asked regarded institutional and procedural matters, the performance of the Supervisory Board members, and the Management Board performance and collaboration with the Supervisory Board. The outcome was discussed by the Supervisory Board in December 2021. The overall feedback from the assessment was positive. The Supervisory Board and the Management Board have discussed how to further enhance and optimise discussions around the strategy. Some practical suggestions on the organization of the meetings were also made and will be implemented, such as a further optimization of the annual schedule of topics to be addressed in the Supervisory Board and Committee meetings. The Chairman of the Supervisory Board frequently spoke with the CEO and other Management Board members outside the meetings. The Management Board reviewed its functioning as a whole and that of the individual Management Board members on various occasions throughout the year. During these sessions, its role and responsibilities, meeting efficiency and the relationship with the Supervisory Board and senior management was also discussed. Overall, it was concluded that both the Supervisory Board and the Management Board function properly and effectively and that the relationship is constructive.

The Financial Statements have been audited by the external auditor, PricewaterhouseCoopers Accountants N.V. Their findings have been discussed with the Audit and Finance Committee and the Supervisory Board in the presence of the Management Board. The external auditor have expressed an unqualified opinion on the Financial Statements.

The members of the Supervisory Board have signed the 2021 Financial Statements pursuant to their statutory obligations under article 2:101 (2) of the Dutch Civil Code. The members of the Management Board have signed the 2021 Financial Statements pursuant to their statutory obligations under article 2:101(2) of the Dutch Civil Code and article 5:25c (2) (c) of the Financial Markets Supervision Act. The Supervisory Board of SBM Offshore N.V. recommends that the General Meeting adopts the Financial Statements for the year 2021 .

Roeland Baan, Chairman

Francis Gugen, Vice-Chairman

Ingelise Arntsen

Bernard Bajolet

Sietze Hepkema

Cheryl Richard

Jaap van Wiechen

Schiphol, the Netherlands

February 9, 2022

3.4Remuneration Report

In this report, the remuneration for the Management Board and Supervisory Board is described. The first part contains a description of the remuneration policy for the Management Board, how it was implemented for the Management Board members over 2021 and various other Management Board remuneration information. The second part describes the remuneration policy for the Supervisory Board and how it was implemented over 2021.

3.4.1Management Board Remuneration Policy

At the 2021 AGM, the Remuneration Policy 2022 (RP 2022) was adopted (90.98% in favor). This policy became effective January 1, 2022. Over 2021, the former policy, RP 2018, still applied. RP 2018 was adopted at the 2018 AGM and became effective January 1, 2018. Full details and the principles and rationale for the RP 2018 are available on SBM Offshore’s website in the remuneration policy section under Corporate Governance Documents.

The Company remunerates members of the Management Board for long-term value creation. RP 2018 and RP 2022 are both based on competitive remuneration aligned with the long-term performance of SBM Offshore. It is built on six reward principles: simplicity, flexibility, predictability, competitiveness, alignment and, most importantly, driving the right results.

This remuneration report has been drafted in accordance with the EU Shareholder Rights’ Directive (SRD II) as implemented in the Netherlands.

SBM Offshore believes the oceans will provide the world with safe, sustainable and affordable energy for generations to come. Our mission is to share our experience to make it happen. In executing our strategy we are guided by our Core Values: Integrity, Care, Entrepreneurship and Ownership.

The underlying principles of the remuneration policy of the Management Board of SBM Offshore N.V. support the vision and ambition and aim for long-term value creation of the Company through the Value Creation Stake balanced with pay for performance through the Short-Term Incentive (STI). Sustainability¹ is an integral part of the STI performance areas (through Health, Safety, Security and Environment).

The Company’s strategy is aimed at optimizing, transformation and innovation of SBM Offshore’s business processes in order to grow in size and create value. This is reflected in the STI performance areas of Profitability, Growth and Sustainability Performance. Through the STI performance areas, Management Board remuneration is directly linked to the success of the Company and the value delivered to shareholders.

Employment conditions and pay of the Company’s employees within SBM Offshore are being taken into account when formulating the remuneration policy, for instance through the internal pay-ratio analysis. Employment conditions for Management Board members may differ from those applicable to employees, also because Management Board members have a service contract rather than an employment relationship. The principles of the remuneration policy are used as a guideline for employment conditions at SBM Offshore as a whole.

The four components of the remuneration package of Management Board members under RP 2018 and RP 2022 are: (1) Base Salary, (2) STI, (3) Value Creation Stake and (4) Pension and Benefits.

The Base Salary is set by the Supervisory Board and is a fixed component paid in cash. Depending on internal and external developments such as market movements, the Supervisory Board may adjust Base Salary levels.

The STI is designed to create a rigorous pay for performance relationship and is a conditional variable component. The STI key performance indicators focus on three performance areas: (i) Profitability, (ii) Growth and (iii) Sustainability Performance. The Supervisory Board, upon the recommendation of the A&RC determines for each of the performance measures the specific performance targets and their relative weighting in the beginning of the financial year. The STI remains unchanged with the implementation of RP 2022.

The three performance areas are specified as follows for RP 2018:

• Underlying and directional EBITDA is used as an indicator of overall short-term profitability.

• Order Intake and/or the number of FEEDs is used as an operational indicator of top line growth.

• Sustainability Performance include targets related to the UN Sustainable Development Goals.

If the Supervisory Board is of the opinion that another measure would be more qualified as an indicator for Profitability, Growth or Sustainability Performance, it will inform the shareholders in the remuneration report. Performance measures will never be adjusted retrospectively.

Performance ranges – threshold, targeted and maximum – are set for each of the key performance indicators. The STI is set at a target level of 100% of the Base Salary for the CEO and 75% of the Base Salary for any other member of the Management Board. The threshold pay-out is at 0.5 times target and maximum pay-out will not exceed 1.5 times target. A linear pay-out line applies between threshold and maximum. Below threshold, the pay-out is zero. The Supervisory Board may adjust the outcome of the STI down by up to 10%, which adjustment will be reported on in the remuneration report.

At the end of the performance year, the performance is reviewed by the Supervisory Board and the pay-out level is determined. The performance measures, target setting, and realization are published in this remuneration report. For reasons of commercial and/or market sensitivity, these details are not published at the start of the performance period. In general, details regarding order intake will not be shared. The STI is payable in cash after the publication of the Annual Report for the performance year.

The Value Creation Stake is an award of restricted shares to create direct alignment with long-term shareholder value. The awarded shares must be held for at least five years. After retirement or termination, the holding period will not be longer than two years. The gross annual grant value for each of the Management Board members is 175% of Base Salary. The number of shares is determined by a four-year average share price (volume-weighted). The Value Creation Stake has a variable element to the extent that the share price develops during the holding period. The Supervisory Board retains the discretion not to award the Value Creation Stake in case of an underpin event. RP 2022 introduces a clearly defined and observable underpin. The underpin serves as a mechanism to ensure an acceptable threshold level of performance and avoid vesting in case of circumstances as defined as underpin event. The underpin is evaluated each year at moment of vesting and in case the criteria are not met, the entitlement to the Value Creation Stake grant at that time will forfeit.

Two pillars have been defined when Supervisory Board is considering withholding the Value Creation Stake – in full or in part:

• Event(s) that threaten long-term continuity of the Company; and

• Where circumstances of the event(s) are/were within control of the incumbent Management Board.

These two pillars are the umbrella criteria: in case an event does not qualify under these pillars, the underpin test does not come into play. Underpins shall be assessed in determining the amount of Value Creation Stake vesting in a year:

• Safety event resulting in the loss of multiple lives and/or significant oil damage to the environment and/or loss of an FPSO; and/or

• Compliance issue resulting in Company being unable to operate in one or more of its primary markets; and/or

• Significant project impairment due to insufficient oversight or gross negligence or deliberate omissions. This relates to large projects with a value exceeding US$1 billion.

Prior to RP 2022 being adopted at the 2021 AGM, this underpin already became effective on January 1, 2021 and was applied to the award of 2021 Value Creation Stake.

All members of the Management Board are required to build up Company stock of at least 350% of Base Salary. The value of the share ownership is determined at the date of grant.

In principle, the Management Board members are responsible for their own pension arrangements and receive a pension allowance equal to 25% of their Base Salary for this purpose.

The Management Board members are entitled to additional benefits, such as a company car allowance, medical and life insurance and (dependent on the personal situation of the Management Board member) a housing allowance.

Each of the Management Board members has entered into a four-year service contract with the Company, the terms of which have been disclosed in the explanatory notice of the General Meeting at which the Management Board member was (re-)appointed. Next to his service contract, Bruno Chabas has an employment contract with Offshore Energy Development Corporation S.A.M., in relation to a split pay-out of his remuneration.

The service contracts with the Management Board members contain an adjustment clause giving discretionary authority to the Supervisory Board to adjust the payment of the STI , if a lack of adjustment would produce an unfair or unintended result as a consequence of extraordinary circumstances during the period in which the performance criteria have been, or should have been achieved. However, the Supervisory Board has determined that upward adjustments will not be considered as part of RP 2018 based on shareholder feedback.

A claw-back provision is included in the services contracts enabling the Company to recover the Value Creation Stake, STI and/or LTI (as granted under RP 2015) on account of incorrect financial data.

The Supervisory Board will determine the appropriate severance payment for Management Board members in accordance with the relevant service contracts and Corporate Governance Code. The current Corporate Governance Code provides that the severance payment will not exceed a sum equivalent to one times annual Base Salary. This also applies in a situation of a change in control.

SBM Offshore does not grant loans, advance payments or guarantees to its Management Board members.

3.4.2Execution of the Management Board Remuneration Policy in 2021

The Supervisory Board is responsible for ensuring that the remuneration policy is appropriately applied and aligned with the Company’s objectives. The remuneration level is determined by the Supervisory Board using a comparison with Dutch and international peer companies, as well as internal pay ratios across the Company.

In order to determine a competitive Base Salary level and to monitor total remuneration levels of the Management Board, a reference group of relevant companies in the industry (the ‘Reference Group‘) has been defined. Pay levels of the Management Board members are benchmarked annually to the Reference Group. In the event a position cannot be benchmarked within the Reference Group, the Supervisory Board may benchmark a position to similar companies. In 2021, the Reference Group consisted of:¹

Also in 2021, the Supervisory Board assessed the Management Board’s remuneration in relation to the Reference Group’s pay levels, revenue and market capitalization, mostly as part of the preparation of implementing RP 2022.

The final determination of pay levels for the Management Board also took into account various scenario analyses to assess the impact of different performance levels and share price developments on the total remuneration paid.

The Supervisory Board also includes internal pay ratios when assessing Management Board pay levels.² Per 2021 , the Monitoring Committee of the Dutch Corporate Governance Code has set guidelines regarding the calculation of the internal pay ratio. In line with the guidelines, SBM Offshore has changed the calculation on two items: (i) contractors with an employment for at least 3 months are now included in the calculation and (ii) the average employee costs are calculated based on FTE rather than headcount. The average total employee and contractor costs per FTE in 2021 was EUR103 thousand.

The pay-ratio’s of each of the Management Board members over 2021 and 2020 are displayed in the following graph (whereas also for 2020 the new calculation method was applied).

The table below provides you with insight in the costs for SBM Offshore for Management Board reward in 2021 (based on RP 2018). The table below presents an overview of the remuneration of the Management Board members who were in office in 2021.

The 2021 and 2020 Base Salary levels of the Management Board members are shown both in the table at the beginning of section: Management Board Remuneration in 2021 and in the table Remuneration of the Management Board by member in section 3.4.3.

For 2021, the Supervisory Board set the following performance measures and corresponding weighting, which led to the following performance realization. For full details regarding the performance under the STI, please refer to the Performance STI 2021 table in section 3.4.3.

Profitability performance reached the maximum threshold of 150% with an underlying directional EBITDA of US$931 million against target level of US$920 million. Growth performance, measured as order intake FPSO and NES resulted in a performance of 125% which is between target and maximum. Sustainability performance performed slightly above target at 104%. The overall weighted performance of the CEO is 133% and for the other Management Board members the performance is 75% thereof (100%).

The Supervisory Board decided to grant the Value Creation Stake for 2021 to the Management Board members in accordance with RP 2018. The underpin test as explained in section 3.4.1 was applied to this grant. As per RP 2018, the granted Value Creation Stake vests immediately. The gross annual value for each of the Management Board members is 175% of Base Salary. The number of shares was based on the four year average share price (volume weighted) at the date of the respective grant. The cost of the granted Value Creation Stake is included in the table at the beginning of this section 3.4.2. The number of shares vested under the Value Creation Stake can be found in section 3.4.3 of this remuneration report under Conditions of and information regarding share plans.

The actual shareholdings of the Management Board members per the end of 2021, in which only conditional shares are taken into account, can be found at the end of the Overview Share-Based Incentives (section 3.4.3). This overview also includes the number of conditionally granted and/or vested shares in the last few years.

The following table contains an overview of shares held in SBM Offshore N.V. by members of the Management Board per December 31, 2021.

All Management Board members met the share ownership requirement, which is set at an equivalent of 350% of their Base Salary. Section 3.4.3 contains more information about the (historical) share plans for the Management Board.

Management Board members received a pension allowance equal to 25% of their Base Salary. In case these payments are not made to a qualifying pension fund, Management Board members are individually responsible for the contribution received and SBM Offshore withholds wage tax on these amounts. For the CEO, two pension arrangements (defined contribution) are in place and its costs are included in the table at the beginning of this section 3.4.2.

The Management Board members received several allowances in 2021, including a car allowance and a housing allowance (Bruno Chabas and Philippe Barril). The value of these elements is included in the table at the beginning of this section 3.4.2 and in section 3.4.3.

3.4.3Other Remuneration Information

Various tables are included in this section, in compliance with the implemented EU Shareholder Rights’ Directive into Dutch law. These tables are designed to increase transparency and accountability for the execution of RP 2018 and aim to allow shareholders, potential investors and other stakeholders to better assess Management Board remuneration.

The following table includes further details regarding the various (historical) share plans, including the changes throughout 2021.

Conditions of and information regarding share plans

1. Opening balance consists of both shares held and unvested grants for conditional plans at assumed maximum target.
2. Closing balance consists of the full grant and vesting of the relevant plan, including any sell-to-cover performed to compensate a wage tax impact.
3. Performance period always refers to a full year
4. Converted at the share price at the date of grant
5. Converted at the share price at the date of vesting
6. Includes additional Value Creation Stake granted due to salary increase

The purpose of this table is to show actual total remuneration of Management Board members during the reported financial year. It includes the STI 2021. The relative proportion of fixed and variable remuneration in the reported financial year is also presented, whereas for the purpose of this table, the Value Creation Stake is earmarked as variable remuneration. This table is in line with the current draft Guidelines on the Standardized Presentation of the remuneration report as regards the encouragement of long-term shareholder engagement.

Remuneration of the Management Board by member in thousands of EUR

1. STI based on accrual accounting, taking into consideration that this reflects the STI to be paid over the performance of that year.
2. The Value Creation Stake does not meet the definition of either fixed or variable remuneration, but for the proportion is considered variable.
3. The extra-ordinary items consist of the sign-on RSUs granted to the Management Board member upon joining the Company.

In the table below, information on the annual change of remuneration of each individual Management Board member is set out over the five most recent financial years. In addition, the performance of the Company (measured in Directional Underlying EBITDA and TRIFR) is displayed as well as the average remuneration on a full-time equivalent basis of employees of the Company (calculated in the same manner as the internal pay ratio in this section). Under RP 2015, LTI shares vested three years after award. Under RP 2018, the LTI was replaced by the Value Creation Stake, which vests immediately upon award. As a result, for the years 2018, 2019 and 2020, this table includes both the former LTI vesting and the Value Creation Stake.

Comparative table on the change of remuneration and company performance over the last five reported financial years

1. Annual change in percentage is calculated comparative to the amount of the current year.
2. Total recordable injury frequency rate trends are positive when downwards.
3. The average employee expenses of the company are based on the IFRS expenses including share based payments. The average employee expenses are influenced by both the composition of the population both in function as well as geographical location and the related foreign currency impacts. This calculation has a different basis than the pay-ratio calculation in accordance with the Dutch corporate governance code.

For more information on the actual performance of the STI 2021, reference is made to 3.4.2 under Short-Term Incentive.

Performance STI 2021

3.4.4Supervisory Board Remuneration Policy

The Supervisory Board remuneration policy encourages a culture of long-term value creation and a focus on the long-term sustainability of the Company. The remuneration of the Supervisory Board members is not dependent on the results of the Company, which allows an unmitigated focus on long-term value creation for all stakeholders.

The Company’s strategy revolves around the themes Optimize, Transform and Innovate. The Optimize pillar is reflected in the competitiveness of the remuneration policy, which is in line with global peer companies that may compete with SBM Offshore for business opportunities and/or talent. The remuneration should enable retaining and recruiting Supervisory Board members with the right balance of experience and competencies while observing the Supervisory Board Profile and Diversity Policy, to oversee the execution of the strategy and the performance of the Company. The remuneration intends to promote an adequate performance of their role. The strategic pillars Transform and Innovate are reflected in the focus of the Supervisory Board on long-term value creation.

Considering the nature of the role and responsibility of the Supervisory Board, the pay and employment conditions of employees are not taken into account when formulating the remuneration policy. The full version of the remuneration policy for the Supervisory Board as approved by the 2020 AGM is available on the Company website.

The fee level and structure for the Supervisory Board remuneration is currently as follows:

All fees above are on an annual basis and are not dependent on the number of meetings. Supervisory Board members also receive an annual amount of EUR500 for expenses, and a lump sum of EUR5,000 per meeting when intercontinental travel is involved.

No share-based remuneration is granted to the members of the Supervisory Board.

The Supervisory Board members do not receive a pension allowance.

Members of the Supervisory Board are appointed by the General Meeting for a maximum term of four years. Re-appointment can take place as per the law, articles of association and the Supervisory Board rules of the Company. The term of the Supervisory Board members terminates at the end of their term, in case of resignation or dismissal by the General Meeting.

SBM Offshore does not provide loans, advances or guarantees (and/or securities) to the members of the Supervisory Board.

3.4.5Supervisory Board Remuneration in 2021

In accordance with the Supervisory Board Remuneration Policy, the remuneration paid out to the Supervisory Board in 2021 is as follows:

Remuneration of the Supervisory Board by member in thousands of EUR

1. Other benefits items for the supervisory board consist mainly of the lump sum for intercontinental travel at EUR 5,000 each and a yearly expense allowance of EUR 500
2. As per April 7, 2021
3. Remuneration based on months after appointment at the AGM
4. Until April 7, 2021
5. As per April 8, 2020, until December 31, 2020
6. Remuneration based on months prior to retirement at the AGM

In the table below, information on the annual change of remuneration of each individual Supervisory Board member is set out over the five most recent financial years.

Comparative table on the change of remuneration and company performance over the last five reported financial years in thousands of EUR

1. For the comparative company performance and average employee expenses on a full-time equivalent basis we refer to the comparative of the Management Board table in section 3.4.3. Annual change in percentage is calculated comparative to the amount of the current year.
2. As per April 7, 2021
3. Until April 7, 2021
4. As per April 8, 2020, until December 31, 2020

None of the Supervisory Board members receives remuneration that is dependent on the financial performance of the Company, as per best practice 3.3. of the Corporate Governance Code.

With the exception of Sietze Hepkema, none of the Supervisory Board members have reported holding shares (or other financial instruments) in SBM Offshore N.V. His entire shareholding relates to the (share-based) remuneration he has received as a Management Board member in the past.

SBM Offshore does not provide loans, advances or guarantees (and/or securities) to the members of the Supervisory Board.

3.5Shareholder Information

SBM Offshore has been listed on Euronext Amsterdam since 1965. The market capitalization as at year-end 2021 was US$2.7 billion. The majority of the Company’s shareholders are institutional long-term investors.

SBM Offshore publishes audited full-year earnings results and unaudited half-year earnings results, which include financials, within sixty days after the close of the reporting period. For the first and third quarters, SBM Offshore publishes a trading update, which includes important Company news and financial highlights. The Company conducts a conference call and webcast for all earnings releases and a conference call only for all trading updates during which the Management Board presents the results and answers questions. All earnings-related information, including press releases, presentations and conference call details are available on the SBM Offshore website. Please see the Financial Calendar of 2022 at the end of this section for details of the timing of publication of financial disclosures for the remainder of 2022.

In 2018, the Company expanded its ‘Directional’ reporting. In addition to the Directional income statement, reported since 2013, a Directional balance sheet and cash flow statement are also disclosed in section 4.3.2 of the Consolidated Financial Statements. Expanding Directional reporting aims to increase transparency in relation to SBM Offshore’s cash flow generating capacity and to facilitate investor and analyst review and financial modeling. Furthermore, it also reflects how Management monitors and assesses financial performance of the Company. Directional reporting is included in the audited Consolidated Financial Statements in section 4.3.2.

The Company’s policy is to maintain a stable dividend, which grows over time. Determination of the dividend is based on the Company’s assessment of its underlying cash flow position.

Regarding capital allocation, the Company prioritizes payment of the dividend, followed by the financing of growth, with the option thereafter to repurchase shares, depending on residual financial capacity and cash flow outlook.

As part of the Company’s regular planning process, following review of its cash flow position and forecast, the Company proposes to pay out a dividend of US$1 per share, equivalent to c. US$180 million, to be paid out of retained earnings. This dividend will be proposed at the Annual General Meeting on April 6, 2022. This represents an increase of 13% compared to the US$0.8854 divdend per share paid in 2021.

Shareholder returns¹

Share price development in 2021 (in EUR)

As at December 31, 2021, the following investors holding ordinary shares had notified an interest of 3% or more of the Company’s issued share capital to the Autoriteit Financiële Markten (AFM) (only notifications after July 1, 2013 are included):

The Company maintains open and active engagement with its shareholders and aims to provide information to the market which is consistent, accurate and timely. Information is provided among other means through press releases, presentations, conference calls, investor conferences, meetings with investors and research analysts and the Company website. The website provides a constantly updated source of information about our core activities and latest developments. Press releases,presentations and information on shareholder communication can be found there under the Investors section.

3.6Risk & Compliance

The Management Board is responsible for:

• determining the Company’s risk profile and policy, which are designed to achieve the Company’s objectives, to assess and manage the Company’s risks and to ensure that sound internal risk management and control systems are in place, and

• ensuring that the entire SBM Offshore organization operates within its clearly defined Compliance Program.

The Management Board monitors the operation of the Compliance Program and the internal risk management and control systems and performs an annual systematic assessment of their design and effectiveness. The results are discussed with the Supervisory Board. This monitoring covers all material control measures relating to strategic, operational, financial, compliance and reporting risks. Among other considerations, attention is given to observed weaknesses, instances of misconduct and irregularities and indications from whistle blowers.

The Chief Governance and Compliance Officer (CGCO) has the overall responsibility for compliance, risk and legal matters. The Group Risk & Compliance Function (GRCF) has a leadership role in proactively advising the Management Board and Management on acting in a compliant manner, both from a strategic and an operational perspective.

The integrated Group Risk & Compliance Function comprises a globally diverse team of fourteen experienced risk and compliance professionals located within the Company’s most prominent locations worldwide. Business leadership has accountability and responsibility to manage compliance and integrity risks within their fields of management control.

3.6.1Design and Effectiveness of the Internal Risk Management and Control System

The Group Risk & Compliance Function brings the skills to support the business in identifying and managing risks, thereby ensuring the risks are managed within the Risk Appetite (see section 1.4.1.) in order for the Company to achieve its strategic goals and objectives. The Risk Assurance Committee (RAC) reviews the significant risks faced by the Company and the relevant control measures. The RAC oversees the integrated risk management approach and brings together the key heads of functions of the second and third line of defense.

3.6.2Compliance Program

SBM Offshore aims to enable its employees and business partners to make the right decisions, with commitment to integrity at all levels. In recognition of this commitment, the Company has implemented a comprehensive Compliance Program applicable to the SBM Offshore group. Our leaders are responsible for ensuring that the company fulfils its commitment to integrity at all levels. They set the tone from the top and are there to respond to any questions, observations and suggestions in a responsible manner, in line with our Core Values and Code of Conduct.

• Respecting the law – our fundamental rule.

• People, culture and behavior – how we work together and how we help each other to succeed.

• Our business activities – how we interact in the marketplace and help our clients to succeed.

• Wider community and corporate citizenship – how we fulfil our wider social responsibilities.

SBM Offshore’s Compliance Program aims to promote an ethical culture throughout SBM Offshore and guides the Company’s Management and employees in making values-led decisions, as well as strengthening the management control system to prevent, detect and respond to compliance risks and potential violations of our Code, the law and other wrongdoing. The program includes proper and independent oversight, risk management, policies and procedures, integrity reporting and investigations, risk-based training and communication to employees, auditing and monitoring.

An important part of the program’s role includes the focus on the prevention of misconduct through the Integrity Panel, which oversees and investigates reports of (potential) misconduct. The Company’s reporting channels and Speak Up Line enable leadership to carefully listen to employees and partners in our value chain about their compliance concerns. On October 1, 2021 the revamped ‘Speak Up Line’ and Speak Up Policy were launched, in compliance with the EU Whistleblowing Directive, with the aim of simplifying the process of reporting concerns.

The Management Board has assessed the Compliance Program against a basic maturity model and concludes that, at the end of 2021, the Company is transitioning from a rules-based approach towards a value-driven business approach. Certain elements of the Compliance Program, notably the focus on responsible leadership behavior, fall within the ’value-led business’ maturity level.

3.7Company Tax Policy

SBM Offshore’s tax policy is summarized as follows:

• The Company aims to be a good corporate citizen in the countries where it operates by complying with the law and by contributing to the countries’ progress and prosperity through employment, training and development, local spending, and through payment of the various taxes it is subject to, including wage tax, personal income tax, withholding tax, sales tax and other state and national taxes as appropriate.

• The Company aims to be tax efficient in order to be cost competitive, while fully complying with local and international tax laws.

• The Company operates in a global context, with competitors, clients, suppliers and a workforce based around the world. A typical FPSO Engineering, Procurement and Construction (’EPC’) project sees a hull construction or conversion in Asia, topsides construction in Asia, Africa or South America, engineering in Europe or, Asia and large scale procurement from dozens of companies in many countries across the globe. Depending on the particulars of the client contract, the EPC phase may be followed by a lease and operate phase involving the country of operations but also support centers of the Company located around the world. In each of these countries, the Company complies with local regulations and pays direct and indirect taxes on local value added, labor and profits and in some cases pays a revenue based tax. To coordinate the international nature of its operations, its value flows and to consolidate its global EPC activities, in 1969 the Company created Single Buoy Moorings Inc, which continues to perform this function today from its offices in Marly, Switzerland.

The Company:

• Complies with the OECD transfer pricing guidelines.

• Supports the OECD’s commitment to enhance tax transparency and is committed to be in full compliance with applicable laws in countries where it operates. Consistent with this approach, the Company supports the initiatives on base erosion and profit shifting, including but not limited to Anti Tax Avoidance Directive 2 (ATAD 2), the upcoming Anti Tax Avoidance Directive 3 or European Union directives enhancing transparency, such as DAC 6. The Company is required to file detailed reports and transfer pricing documentation in accordance with Base Erosion and Profit Shifting’s (BEPS) action 13 as is now implemented in Dutch tax law. The disclosures contained in the country-by-country reporting (‘CbCR‘) have been prepared to meet the OECD requirements and have been filed with the Dutch tax authorities for the year 2020.

• Makes use of the availability of international tax treaties to avoid double taxation.

• Does not use intellectual property as a means to shift profits, nor does it use digital sales. Furthermore, the Company does not apply aggressive intra-company financing structures such as hybrids. In 2021, the Company reported a current corporate income tax charge of US$60 million under IFRS (compared to US$48 million in 2020). Due to the large losses incurred on the legacy projects, some tax loss carry forward positions still exist at the global contracting company, which are limiting the current tax payments in Switzerland and in jurisdictions of the Company’s locations.

• Endorsed the B Team Responsible Tax Principles in August 2021 and published the SBM Offshore Approach to Tax on its website. This explains the key principles applied to tax matters and the associated governance as well as describing the Company’s global tax footprint.

• Regarding the OECD initiative to address the Tax Challenges Arising from the Digitalization of the Economy and its two-pillar solution aiming to reform the international tax system, the Company acknowledges that the implementation of Pillar 2 may have some impacts on its income tax charge. However, those effects will only be known once the OECD has released the Commentary associated to the model rules and that the EU has also released the final version of the directive implementing the Pillar 2 model rules.

3.8Operational Governance

Operational Governance of the Company is supported by an independent team under Group HSSE and Operational Excellence, which encompasses key operational and assurance functions involved in SBM Offshore’s core business activities and reports directly to SBM Offshore’s Management Board. Such functions have a key role in ensuring a coordinated, consistent and controlled approach to core business over the full lifecycle i.e. Win, Execute and Operate phases, and across the Company’s locations, Fleet Operations and Product Lines through:

• Functional leadership within the corresponding communities (distributed across entities) and other functions.

• Ownership and governance of internal systems and procedures, developed in response to known and anticipated risks in line with the strategic direction of the Company.

• Maintenance of GEMS, as introduced in section 3.8.1.

• Maintenance of GTS, as introduced in section 3.8.2.

• Management of improvement initiatives.

• Coordination and harmonization of the Company’s ways of working and internal standards.

• Specific focus on the product lifecycle, notably based on a cross-functional gate process and internal arbitration if necessary.

• A focused hazard and effects management process that builds on experience in order to continuously improve the performance of our HSSE barriers such that the risk exposure is reduced to as low as reasonably practicable.

• An internal Incident Management Committee (connected in turn to the Risk Assurance Committee referred to in section 3.6.1) to ensure that lessons are effectively learned from incidents.

• Coordinated assurance activities focusing on risk management, compliance, effectiveness, business performance.

• Involvement of independent third-parties as certification, verification or classification bodies.

A detailed certification and classification table is provided in section 5.5, mapping compliance with international certification standards and classification rules.

Note: for complementary details on SBM Offshore’s approach to Operational Excellence, refer also to section 2.1.4.

3.8.1Global Enterprise Management System (GEMS)

GEMS is structured around three main process domains: executive processes, core processes and support processes. Core processes are further modelled into the Win, Execute and Operate phases and is represented as shown in the illustration.

The Management System is one of the key enablers for the Company to perform its business activities in a consistent, reliable and sustainable manner, meeting client expectations, adapting to new challenges and continuously improving ways of working.

The Management System of SBM Offshore is called the Global Enterprise Management System (GEMS) and is based on several international standards and other practices.

GEMS is the core of a broader ecosystem including software solutions (e.g. LUCY, SBM Offshore’s Human Capital Management System) and other elements such as SharePoint microsites and Group Technical Standards (GTS) as introduced in section 3.8.2.

The Group’s Vision, Values (section 1.3.1) and Policies are embedded in GEMS to support the correct governance of SBM Offshore’sorganization and business activities. These form the foundation processes that are consistently applied throughout all offices and fleet operations (in-country offices and vessels).

To align GEMS with the new ways of working brought by the new ‘Integra’ ERP platform, a new version of GEMS, ’GEMS Sapphire’, has been developed, which will come into operation in 2022.

GEMS Sapphire’s main core processes have been redesigned to show where the company generates value from its activities.

The existing version of GEMS will remain available and be maintained until the full deployment of Integra across SBM Offshore.

GEMS gives clear and formal ownership of end-to-end processes and clear identification of key controls. It provides a cohesive framework for quality and regulatory compliance, health and safety, security of personnel and assets, protection of the environment, as well as risk and opportunity management throughout the product lifecycle, ensuring the Company’s sustainability.

GEMS can be accessed in its entirety via a single website which ensures easy access to all employees.

3.8.2Group Technical Standards (GTS)

A key driver for the cost of new projects is the technical standards to be applied in addition to the local regulatory requirements. Typically, these standards fall into three categories – customer standards, contractor standards or a hybrid set of customized standards. In the current climate of severe cost pressure, there is a logical push in the industry towards wider acceptance of contractor standards. By leveraging its expertise – notably through its Fast4Ward^® program – SBM Offshore can minimize project customization and efficiently deliver more standard products, with significant cost and schedule savings.

To support this approach, the Company has over the years established its own Group Technical Standards (GTS) by integrating key elements of its accumulated project execution and fleet operational experience. The GTS consist of a set of minimum technical requirements applicable to Company products provided to customers on a Lease & Operate basis. They ensure a consistent design approach, optimized from a lifecycle cost perspective and integrating Company’s policies and standards with respect to personnel safety, environmental protection and asset integrity. Additionally, all GTS documents are formally reviewed and approved by Classification Societies acting as independent third parties.

The GTS are maintained by a team of internal technical authorities and experts covering all key technical aspects of Company products, providing assurance over GTS application during project execution and integrating operational feedback as part of GTS continuous improvement.

To date, the Company has executed over 22 major projects using its GTS as basis of design since they were established in 2003.

GTS are going digital and will be available through a Requirement Management Software by Q1 2022, providing new features for GTS users and the team in charge of GTS development.

The main benefits will be time-saving, enhanced search and filtering functionalities, data re-use capacity, improved overall quality and multi support availability.

3.9In Control Statement

The Management Board is responsible for establishing and maintaining adequate internal risk management and control systems. The implementation of the internal risk management and control framework at SBM Offshore focuses on managing both financial risks and operational risks, as described in section 3.6 of the Management Report. As a key part of its scope, the Risk Management function is responsible for the design, monitoring and reporting on the internal control framework.

During 2021, various aspects of risk management were discussed by the Management Board, including the consolidated quarterly Risk Report and the result of the yearly testing Internal Control Over Financial Reporting (ICOFR) campaign. The responsibilities concerning risk management, as well as the lines of defense, were also discussed with senior management of the Company. There were no major failings in the internal risk management and control systems which have been observed over the period. In addition, the result of the yearly ICOFR testing campaign has been reviewed with the Audit and Finance Committee and Supervisory Board. This testing campaign did not highlight any major control deficiency and concluded to an increased level of conformity rate around the organization.

SBM Offshore prepared the In Control Statement 2021 in accordance with the best practice provision 1.4.3 of the Dutch Corporate Governance Code. With due consideration to the above, the Company believes that:

• The Management Report provides sufficient insights into the Company’s internal risk management and control systems.

• Its internal risk management and control systems provide reasonable assurance that the financial reporting over 2021 does not contain any errors of material importance.

• Based on the current state of affairs, the Management Board states that it is justified that the financial reporting over 2021 is prepared on a going concern basis; and

• Those material risks and uncertainties that are relevant to the expectation of the Company’s continuity for the period of twelve months after the preparation of the report have been included in the Management Report.

However, the Company cannot provide certainty that its business and financial strategic objectives will be realized or that its approach to internal control over financial reporting can prevent or detect all misstatements, errors, fraud or violation of law or regulations. Financial reporting over 2021 was based upon the best operational information available throughout the year and the Company makes a conscious effort at all times to weigh the potential impact of risk and the cost of control in a balanced manner.

With reference to section 5.25c paragraph 2, sub c of the Financial Markets Supervision Act (Wet op het financieel toezicht), the Management Board states that, to the best of its knowledge:

• The financial statements for 2021 give a true and fair view of the assets, liabilities, financial position and profit or loss of SBM Offshore and its consolidated companies.

• The Management Report gives a true and fair view of the position as per December 31, 2021 and that of SBM Offshore’s and its affiliated companies development during 2021. Furthermore, the Management Report includes a description of the principal risks facing SBM Offshore.

Schiphol, the Netherlands

February 9, 2022

Bruno Chabas, CEO

Philippe Barril, COO

Erik Lagendijk, CGCO

Douglas Wood, CFO

4Financial Information 2021

4.1Financial Review

4.1.1Financial Overview

1. EBITDA, earnings (profit attributable to shareholders) excluding net financing costs, income tax expense, depreciation, amortization and impairment as well as share of profit/(loss) of equity-accounted investees

The Company’s primary business segments are ’Lease and Operate’ and ’Turnkey’. Additionally, the Company discloses separately non-allocated corporate income and expense items presented in the category ’Other’. Revenue and EBITDA are analyzed by segment, but it should be recognized that business activities are closely related.

During recent years the Company’s awarded lease contracts were systematically classified under IFRS as finance leases for accounting purposes, whereby the fair value of the leased asset is recorded as a Turnkey ‘sale’ during construction. For the Turnkey segment, this accounting treatment results in the acceleration of recognition of lease revenues and profits into the construction phase of the asset, whereas the asset generates the cash mainly only after construction and commissioning activities have been completed, as that is the moment the Company is entitled to start receiving the lease payments. In the case of an operating lease, lease revenues and profits are recognized during the lease period, in effect more closely tracking cash receipts. Following the implementation of accounting standards IFRS 10 and 11 starting January 1, 2014, it has also become challenging to extract the Company’s proportionate share of results. To address these accounting issues, the Company discloses Directional reporting in addition to its IFRS reporting. Directional reporting treats all lease contracts as operating leases and consolidates all co-owned investees related to lease contracts on a percentage of ownership basis. Under Directional, the accounting results more closely track cash flow generation and this is the basis used by the Management Board of the Company to monitor performance and for business planning. Reference is made to 4.3.2 Operating Segments and Directional Reporting for further detail on the main principles of Directional reporting.

As the Management Board, as chief operating decision maker, monitors the operating results of its operating segments primarily based on Directional reporting, the financial information in this section 4.1 Financial Review is presented both under Directional and IFRS while the financial information presented in note 4.3.2 Operating Segments and Directional Reporting is presented under Directional with a reconciliation to IFRS. For clarity, the remainder of the financial statements are presented solely under IFRS, except where expressly stated otherwise.

4.1.2Financial Highlights

The main financial highlights of the year and their associated financial impact are reported in note 4.3.1 Financial Highlights.

4.1.3Financial Review Directional