SBM Offshore N.V. (SBMO) Earnings Call Transcript & Summary

[Presentation] Ladies and gentlemen, my name is Floris Deckers as Chairman of the Supervisory Board of SBM Offshore. And we -- it is my pleasure to open this Annual General Meeting. COVID-19 is affecting the whole world, and we wanted to start this meeting by showing you a video of our crews on board of the SBM FPSOs off the coast of Brazil. You can see that some of them are in quarantine and you can see that all of them are in good spirits, notwithstanding the difficult circumstances they have. These circumstances affect this meeting as well, that we have had to decide after careful considerations and in light of the health and safety of all our stakeholders, to change the procedure of this Annual General Meeting. You, therefore, do not see us at Crowne Plaza Hotel in Hoofddorp, but in SBM Offshore's headquarters at Schiphol, the Netherlands. Furthermore, you will be following this meeting through a live broadcast instead of in person. Under the current circumstances and having faced significant limitations in a technical sense, too, it has been our choice not to bring people together in a meeting room itself. We, therefore, regret that we cannot have the exchange and dialogue with our shareholders like we would have at a regular meeting. And although we have tried as best to mirror this meeting today as much as possible with the usual setting, we realize it is not perfect, and we apologize for the inconvenience. Voting has been possible through e-voting only. We thank you for having made use of that opportunity. And in the absence of being able to vote in the meeting, we have lengthened the time that this system was open, and we will present the results, of course, in this meeting. We have received a number of questions, and we will try to answer all of them correctly during this AGM meeting. We emphasize that shareholders, of course, can ask questions or provide feedback to our Investor Relations department. Contact details, you will find on the website. The meeting will be conducted in English, as this is the official language of the company as was decided in the Extraordinary General Meeting of Shareholders held on February 11, 2005. Given the exceptional situation, we have also decided that only a very limited number of persons will physically participate in this meeting. That means that my colleagues of the Supervisory Board as well as Bruno Chabas, our CEO; Philippe Barril, our Chief Operating Officer; and Douglas Wood, our Chief Financial Officer, are not with us in the room today. Our auditors, PwC, are also not present. In this meeting room, and complying with the correct social distance, and we measured it, are with me Erik Lagendijk, member of the Management Board and Chief Governance and Compliance Officer; and Barbara van Lohuizen, our company Secretary. To facilitate the taking of the minutes of this meeting, the proceedings are recorded. The invitation and the agenda with attachments for this meeting have been published on the 26th of February 2020, on the website of the company, of Securities Info and of ABN AMRO e-voting. Updates in light of the COVID-19 developments were posted on March 11 and March 19, 2020, with the details of a dial-in number for this live stream being added on April 7, 2020. Agenda, annual report and the consolidated financial statements have all been made available free of charge at the office of the company and of ABN AMRO in Amsterdam and on the company website. They have been sent to those shareholders who have asked for hard copies. There has been no request for including additional items on the agenda from shareholders holding 1% or more of the ordinary shares. In accordance with the corporate governance code, the minutes of last year's AGM of April 10, 2019, have been posted as a draft on the company website within 3 months. Shareholders who attended the meeting were given the opportunity to comment on the draft minutes within the 3-month period. This period has expired without receiving any comments, and the minutes have subsequently been adopted and posted as such on the website. I conclude that all legal and statutory requirements have been satisfied so that this AGM has the capacity to adopt the resolutions as per the agenda for this meeting. The registration date to attend this AGM was March 11, 2020. On that registration date, the total issued share capital of the company amounted to EUR 49,667,826 or 198,671,305 ordinary shares and 193,055,786 number of voting rights. Shareholders had the opportunity to issue their votes on the items on the agenda of this meeting for an extended period, namely until April 7, 2020, by 12:00. There are 128,140,565 shares represented at this meeting. We are now at agenda item 2, report of the Management Board for the financial year 2019. Erik Lagendijk, our Global Legal Officer, will start with an introduction on this topic.

Thank you, Floris. After having presented the formalities of this meeting, we obviously need to start with the impact of the unprecedented COVID-19 global crisis. I'm indeed the Chief Governance and Compliance Officer and member of the Management Board, and given the special circumstances, as Floris mentioned, I am the Management Board member currently present in our head office in Amsterdam. On behalf of Bruno Chabas, our CEO; Philippe Barril, our Chief Operating Officer; and Douglas Wood, our CFO, I will talk about the impact of the COVID-19 crisis on the company and on all SBMers. And hereafter, you will hear from Bruno Chabas and Douglas Wood via prerecorded messages. It is great to witness a strong united front from everyone at SBM Offshore. As we arise to the challenges and go about our work activities, we put health and safety first. SBMers are working hard with our clients, partners and suppliers to adjust to the circumstances. We will continue to monitor the evolving situation and take whatever action required to continue the safe operations of our fleet, our projects and all our activities. Much will depend on how long the measures taken by authorities around the globe will remain necessary. Here are some more details on our global response to the situation. SBM Offshore's priority is the health and safety of our staff, contractors and our families, while at the same time, we ensure safe operations across all activities. A global task force continues to monitor the situation on a daily basis in our worldwide locations, and we follow the advice from the relevant authorities and medical experts. We do so in close contact with our clients, partners and suppliers. Safe operations of our fleet is of the essence. In the first quarter, the year-to-date uptime of the fleet has been in line with our historical track record. Business continuity protocols have been activated at shore basis as well as for offshore operations. To keep offshore operations safe and stable, only essential maintenance is performed. Crew changes have become more difficult as travel restrictions often apply in and out of countries where the company has operations or where crew members are located. Crew rotations have been extended for those offshore while their upcoming counterparts are in self-quarantine at monitored facilities onshore. As of today, SBM Offshore has transported some crew members with systems from one FPSO back to shore. Further test of these members have now confirmed a number of COVID-19 cases, and these crew members have been isolated and are going through medical assessment and received further care. And we obviously continue to monitor and assess the situation with -- together with the clients and the authorities. SBM is carrying out construction activities in many parts of the world, and additional measures and protocols have been put in place to ensure the health and well-being of staff and contractors at the yards. Construction yards in China reopened in February and are now close to planned capacity. In Singapore and Dubai, the yards have remained open until the end of March. Since last week, the authority suspended activities at the yard in Singapore for a period of 2 weeks, and the company is in close contact with our clients and business partners to manage the situation, adjust execution planning and, where appropriate, create mitigation plans. So all in all, construction is continuing, but some delays in project execution will be unavoidable. In SBM Offshore's office locations, most SBMers continue to work from home and activities continue. Staff are updated on a regular basis and are supported with advice for a healthy balance between professional and personal lives. Activity and operations, therefore, continue, although with some incremental expenditure to keep operations running safely. In this regard, measures have been taken to postpone nonvital programs to reserve cash to help offset these impacts. The unprecedented effects of the combined supply and demand shocks in the oil and gas industry have a major impact on oil and gas companies across the globe. In order to preserve liquidity and cash, measures to reduce and defer expenditure are in the process of being implemented by most oil companies across all of their business segments. SBM Offshore is assessing where the company may be able to assist its clients while creating a solution which is fair for all parties. Now let me turn to some subjects that are also relevant for the agenda of this shareholders' meeting. We have a business and cash flow model which has proved its resilience and robustness over the past years. This supported the launch of the share repurchase program in February 2020, which was completed on the 3rd of April this year. The company continues to have access to sufficient liquidity from its operating cash flow, committed project financing and revolving credit facility as well as from cash, and Douglas Wood will elaborate on these topics in a few minutes. The company will provide regular updates on its website and expects further visibility on the impact of the current situation on the company's business and financial as part of the regular 2020 first quarter trading update on May 14, 2020. Taking into consideration developments in the coming weeks, an update on the status of the outlook and guidance for 2020 financials will be provided at that time. In summary, on the COVID-19 pandemic, life is also changing at SBM Offshore. We must remain vigilant as the health and safety of everyone is our priority whilst we work hard to keep the operation going. These are challenging times for companies and society as a whole. It is uplifting to see that our sense of community at SBM is so strong. We are proud of how everyone at SBM has embraced our value of care, and we wish to use the opportunity of this shareholder meeting to say to our shareholders, but also to all our other stakeholders, clients, suppliers, partners, to all SBMers and their families, stay safe and keep well. We will now continue with the messages from Bruno Chabas and Douglas Wood. And as mentioned, and in light of the circumstances today, their messages and presentations have been recorded.

Welcome, everybody, and thank you for joining SBM Offshore 2020 Annual General Meeting. My name is Bruno Chabas, CEO of SBM Offshore. I will present the general strategic update of the company, after which, Douglas Wood, our CFO, will talk you through the financials. Please note the disclaimer to this presentation. You should know also like many of you who are working from home, and this presentation has been prerecorded since we don't have the pleasure to be in front of you today. So let's go into the meat of the presentation. Today, the world is facing extremely challenging times. This crisis affect many, if not all, industry. It is also felt by SBM Offshore. The spread of COVID-19 virus, combined with the OPEC and Russia not getting to an agreement to cut oil production, resulted in a severe supply-demand shock in the oil market. This double black swan event in the oil and gas market introduced today's uncertainty. This has led to clients announcing cost-cutting measures in order to preserve cash and to manage the current situation. Looking at the current situation, what does this mean for SBM Offshore? If we take a step back, we continue to have a vision and to take a structured approach to how we will get to the position where we want to be. With different times, we deploy different tactics and emphasis, but our strategy remains consistent. Under optimize, we really look at our people and their family. That's the short-term priority on health and safety of our clients, staff and contractor. We have a global taskforce managing the situation. We keep each other informed, follow authority guidelines and work remotely. Protocols are put in place to ensure health of personnel at the yard. Business continuity plans are implementing at the offshore base and offshore operations. And contingency plans were put in place for offshore and onshore operations. Second of all, under optimize, we focus on business continuity, continue to deliver our project and minimize the delivery uptime -- or the disruption to the delivery uptime, I should say. Our backlog and experience allow us to optimize our cash flow from the backlog. We're able to maintain the proposed doubling of our dividend through our backlog. Furthermore under optimize, we look after cash. As such, we are cutting all nonessential programs in the company, and we have been doing so over the past few weeks. Under transform, we look at the future demand of our market. We believe that the projects which are going to be successful in the future are going to be project with the best economic returns and the lowest impact to the environment. As such, our Fast4Ward program and our eMission programs which is aiming at developing a competitive product with limited impact to the environment, are the right program in order to position ourselves for the future and to participate at the future development in the oil market, which are going to happen. Under innovate, we're looking at the future of the energy world. This crisis will leave a lasting impact on the ways of working and behavior also in the energy business. Our ambition 2030 help us to prepare our company for our future, while gas and renewables will play an essential role in the energy mix. Now let's turn to the HSSE and ESG topics. Over the past years, our safety record has been solid. It compared favorably to the industry benchmark. 2019 Total Recordable Injury Frequency Rate landed at 0.13, a major improvement year-on-year from 0.29. Despite this solid performance, we regret to report the passing of a diving contractor, the result of an accident late December last year. This again shows that safety can never be taken for granted, especially in an industry where activities tend to carry various risks. Our Target Excellence campaign is an example of further maintaining awareness, better performance and continuously improvement across our business activities. Especially with today's circumstances, SBM Offshore prioritize the health and safety of our clients, staff and subcontractors and assets. Furthermore, we aim at minimizing our impact on local ecosystems and proactively protecting the environment. Over the year, we look at translating SDGs into result. For 2019, SBM Offshore selected 3 sustainable development goals to further embed sustainability in our strategy. Early 2019, ambitious target was set and performance was measured. As the management of a company, we're pleased with the progress made within the different areas, having set some ambitious targets and difficult targets. And also we have not reached every target. We have made substantial progress almost across the board. It gave us an additional incentive to embark on our eMission Zero to develop FPSO with 0 net carbon footprint for its production. We will continue on this path, targeting improvement and being transparent on our performance. For 2020, we will maintain the KPIs that we have selected for 2019 with new targets. In addition, we selected 3 new SDG for which we have quantified targets for 2020. We will measure and report performance at the end of the year. Our priority will be where the company can make the most impact through reducing its greenhouses emission. Let's now turn to the market and our current thinking about it. Before the COVID-19 crisis, the FPSO market development was in line with our expectation. That was before. At present, markets, including the FPSO market, have become very uncertain. Our companies, our clients have announced CapEx reductions of up to 30% so far. Further reductions and delays cannot be excluded. At this stage, it is impossible to comment on the outlook for the FPSO awards. Now one positive comment in all of this is that the project that we're targeting as a company tend to have the lowest breakeven price available to our clients. And as such, they should be on top of their priority list once they decide to go ahead. Let's now move to our strategy. Let's move to the way we're planning to tackle the current environment and what we expect in the future. As I mentioned in the introduction, our vision and strategy are consistent, resilient and adapted for multiple scenarios, including the current turmoil. Optimize, transform and innovate is guiding us through the crisis. Our approach will not change: focus on people with priority on health and safety; focus on business continuity, with the priority of generating cash from the fleet and delivering our current project; focus on the cash of the company; focus on future FPSO business, helping our clients with decreased breakeven prices through our Fast4Ward program with the lowest impact to the environment; and focus on the future energy market while retaining the balance between delivering products in the old market today and generating technology solutions for the energy of the future. So let's go in turn to our different pillars of our strategy, and let's start with optimize. We spoke under optimize for the COVID-19 period to look at our people, to look after the business and continue to perform during this period and to look after the cash of the company. All of this means that we ought to remain disciplined so we can deliver value to our stakeholders while ensuring that the deepwater industry can continue to compete. From the wind side, we're not after market share. We're aiming at winning the right opportunities for us. During the design and construction phase, we aim to continue to build on our track record of delivering on time and on budget and to limit as much as feasible the impact of COVID-19 disruption. In 2019, FPSO Liza Destiny produced first oil 30 months after the start of the construction. This is a case in point. During the operational phase, we then focus on delivering our backlog. It is key that we maintain uptime at the highest possible level. Our uptime track record is world-class, with 99% on average. This is what generates the cash for the company and its shareholders, including the dividend of $150 million that we're proposing today. Under the transform pillar of our strategy, we're looking at the future demand for our products. The current situation only emphasized the urgency of developing reliable, lower-cost and rapidly deployable products to answer our clients' need. This has been the foundation of Fast4Ward from the beginning, and we are now able to capitalize on the investment made over the past few years. We're going to be able to capitalize on standardization, and we're going to be able to capitalize on working directly with our clients and our suppliers in order to find win-win solutions. Looking at future FPSO demand, we believe that the future deepwater oil project will not only be the most cost-effective ones but also the ones with the lowest impact to the environment. As such, our eMission Zero program, aimed at developing near-zero-emission FPSO is a critical component of our transform program and of our future project. A significant of percent of the emission while producing hydrocarbons come from the use of energy, followed by flaring and, to a lesser extent, venting. We're creating targets for the production phase on flaring and venting. For the future, our eMission Zero is to develop an FPSO with a 0 net carbon footprint during the production phase. SBM Offshore believes that we can make a difference as operator of around 1% of the global oil production worldwide. Innovate is a critical pillar of our strategy. This crisis will certainly emphasize the need to have different sources of energy to fuel humanity going forward. The world will need a lot more energy, while, in the same time, significantly reducing its impact to the environment. Oil is expected to retain a large portion of the energy mix but increasingly supplemented by gas and renewable energy. As such, SBM Offshore will play its role as a technological innovator. We will invest in technology for developing sustainable energy solutions for the future, and we will monitor the market trend. By 2030, we aim to generate 25% of the company revenues from gas, as a cleaner transition fuel, and renewable. This is an ambitious goal. Reaching it depends on client demand and market development. So on this, I'll leave the floor open for Douglas to speak about the financials of the company. Thank you.

Thank you, Bruno, and good afternoon, everybody. Before getting into the financial results, as Bruno mentioned in the previous part of the presentation, with the double black swan events, our industry has very rapidly entered into another downturn with uncertain outcome. However, the underlying strength and resilience of our business and cash flow model has been apparent over the past years and our results for 2019 were also a testament to this. It is capable of supporting the consistent execution of our strategy in multiple scenarios, including the current turmoil. The strength and resilience of the business and cash flow model supported the launch of a EUR 150 million share buyback program in February, which has now been completed. It also supports our proposal for a material increase in the dividend to an aggregate level of $150 million. Despite the current uncertainty for the global economy, underpinned by the robustness of our model, we are able to increase the dividend while, at the same time, preserving the requisite liquidity to navigate through the current challenging period. I will explain the basis for this in a moment, but first, to the key 2019 financial results metrics on this page. These reflect, in various ways, the increased activity and growth that we saw during 2019 and the very good performance in both divisions in line with guidance. Revenue of $2.17 billion increased by 27% compared with the previous year mainly a function of the increased activity we saw in the Turnkey business. Underlying EBITDA of $832 million was up 6% year-on-year driven by the increased activity in Turnkey, plus improved fleet performance. And then on top of the underlying results for EBITDA, we had a net additional $90 million gain relating to the acquisition of a minority share portfolio in 5 of our Brazilian FPSOs. This reflects the value accretion generated from the deal. This brought total reported EBITDA to $921 million. Then it's important to highlight the fact that EBITDA, in particular, does not reflect the current Turnkey activity or performance as none of the FPSOs under construction, namely Liza Destiny, Liza Unity and Sepetiba contributed to EBITDA in 2019. With Liza Destiny achieving first oil at the end of 2019, this will generate results in lease and operate going forward. And then you see the impact of the new awards, Liza Unity and Sepetiba, reflected in the backlog, which, combined with the acquisition of the Brazilian FPSO minority share portfolio, led to around a $6 billion increase. And the backlog now stands at a substantial $20.7 billion. Finally, the increase in net debt of $1.1 billion is entirely driven by the investment in growth that we saw during the year given our model of largely using debt to finance the cost of our short-term build-operate-transfer, BOT projects, plus lease and operate projects in order to enhance return on equity. And this is what you see in the balance sheet as at the end of 2019, where all the debt is correlated to specific lease and operate or BOT projects, either under construction or in the operating phase. All of these projects are supported by firm contracts reflected in the backlog. Turning to liquidity. We have invested a substantial balance of investments in project assets under construction which will largely, except some working capital items, be returned to corporate level when we progressively draw under the construction debt facilities. And as you see from the pie chart, at the end of 2019, we had $1 billion of undrawn project facilities on top of our undrawn $1 billion revolving credit facility. Including cash, this meant we had $2.5 billion of liquidity at the year-end. Our loan is in place for the Liza Unity project and the financing process with banks and export credit agencies for the FPSO Sepetiba project has been launched and is continuing. Next, we would like to focus on our revenue backlog, which provides us with a very solid foundation, which is the basis for the robustness of our cash flow model. This slide shows the status as at the end of 2019, where the backlog increased by $6 billion to $20.7 billion. $17.4 billion was from the lease and operate fleet, the dark blue bars on the chart; $3.2 billion from Turnkey, including the anticipated proceeds from disposal from BOT projects shown in solid orange on the chart. I want to focus on the lease and operate backlog, which you can see gives us visibility on our cash flows for the next 25 years. On a net cash basis, after debt financing and operating costs, the lease and operate backlog is expected to deliver, on average, around $240 million net cash per year over this period, with a higher expected cash per year in the short to medium term. The lease and operate backlog is contractually committed and is based on SBM Offshore's ability to generate availability. As such, this backlog is not linked to oil price or production, with the exception of 1 small contract Thunder Hawk, which has some production linkage. The average cost that our clients pay for the lease and operation of our FPSOs is around $7 per barrel, which shows how competitive our solutions are even today. Now we use this lease and operate backlog as the basis for determining our dividend. And on this next slide, we have mapped out the average cash flow related to the lease and operate backlog for the next 6 years as at the end of 2019. This period represents 2 construction cycles for an average FPSO. We take out debt servicing, so that's interest and amortization, then we allocate all corporate overheads and tax in full to lease and operate. Putting all this together results in $105 million per annum net cash generation on average over the next 6 years. And on the basis we can manage our Turnkey business, at least breakeven over the period, we look at this in hand future cash flow, which does not include future awards, as effectively underpinning our dividend, contractually guaranteed with very long visibility. Based on this and also our assessment of the company's liquidity position considering today's circumstances, we are recommending an increase in the dividend to $150 million, which corresponds to approximately $0.81 per share. We believe that backed by the in-hand cash flow from the backlog explained on the previous slide, our dividend can be sustained going forward. And having reviewed our overall liquidity position at the end of last year, we determined that we once again have the capacity to execute a share buyback while, at the same time, retaining sufficient flexibility to respond quickly to future opportunity or challenges. We, therefore, launched a EUR 150 million repurchase program on February 13, which was completed on the 3rd of April. The program resulted in the purchase of more than 6% of our stock for an average price of EUR 12.40 per share. Our business and cash flow model has demonstrated its resilience in the face of overall industry and other specific challenges over the past years. We remain confident that this, combined with our ongoing strategy, will allow us to successfully navigate the current period of uncertainty, leaving us well positioned thereafter. Thank you, and that concludes our presentation.

Thank you, Bruno, and thank you, Douglas. We received the following 4 questions from the Dutch Association of Investors for Sustainable Development, VBDO. Question one. VBDO values SBM Offshore efforts to report on climate-related issues to stakeholders. According to information reported in the Carbon Disclosure Project benchmark, a commitment was made by SBM Offshore to conduct and report on climate-related scenario analysis. Climate-related scenario analysis are by definition conducted for the long term. Nevertheless, SBM Offshore argues that it considers long-term to be up to 10 years, while climate-related impacts can increase substantially over a longer period. This is surprising, especially because some of SBM offshore contracts run until 2040. Would SBM offshore be willing to extend the period of the scenario analysis in order to at least meet the term of its current contracts and report on the outcomes in 2020? End of question. The answer to this question is, yes. And in practice, we do as our floating solutions consider scenarios in terms of marine conditions over a full lifetime. In 2019, SBM Offshore performed a climate risk assessment. For 2020, we commit to further development of climate change scenarios and we'll look at best practices in terms of time horizons. Question two. VBDO compliments SBM Offshore with its efforts to report on climate-related issues in accordance with the TCFD recommendation. SBM Offshore pays attention to risks, strategies, opportunities, concern and climate mitigation, but little to no attention has been given to climate adaptation. The only explicitly named risk is for the onshore operations due to extreme weather, but this risk is considered as not applicable to the offshore operations because those assets are equipped to withstand such conditions. VBDO would like to learn whether climate adaptation experts have been involved with this risk analysis and to what extent shipyard workers, local communities and their resilience have been taken into consideration in this analysis. Would SBM Offshore be willing to consider cooperating with local authorities and/or NGOs as part of its climate adaptation strategies? The answer to this question is, so far, analyses were made and done by SBM Offshore experts supported by sustainability consultants. Naturally, SBM Offshore is willing to consider cooperating with local authorities. Question number three. VBDO compliments SBM Offshore for its ambition to develop a human rights control framework and to continue due diligence work in 2020 at a number of business locations and in the supply chain. Part of SBM Offshore's supply chain consists of ship dismantling companies on coastal demolition yards that purchase amortized ships. In September 2019, a broadcast from Zembla at the Dutch television suggested that SBM Offshore would bring ships containing hazardous substances to ship graveyards off the coast of India. The allegation would be that workers at the demolition yards are working under abominable conditions without suitable safety measures such as equipment for and proper understanding of labor involved with hazardous substances. VBDO would like to know to what extent has SBM Offshore since then improved its risk management and mapped its entire supply chain and workforce of subcontractors with an associated assessment of risks and vulnerable groups; and b, if SBM Offshore would be willing to transparently and proactively communicate about policies and corrective actions linked to the outcomes of such assessments and strategies to its stakeholders. The answer to this question three is regarding Yetagun FSO we refer to the message from the CEO at section 1.6 in the Annual Report 2019 as well as the statement published at the time. We do not agree with the picture as presented by Zembla. We work in line with international standards with health and safety of workers as our #1 priority. Direct stakeholder engagement has taken place following the broadcast of Zembla. The subquestions a and b and the respective answers I will give, we consider as generic to our supply chain and yard approach. We take a focused approach, considering the exposure on workloads in the location. Focus has been on key yards for FPSO projects, China and the turret project -- mooring project in the Middle East. In light of SDG 8, as mentioned in section 2.3 of the Annual Report, SBM Offshore set a target to include human rights screening in the vendor qualification process. As more vendors will be qualified over time, our understanding will grow as well. First of all, and that's b, direct engagement about corrective -- with our broad communication has delivered best progress so far. Furthermore, as the topic will directly affect suppliers, yards and the workforce, SBM Offshore is not at liberty to always share this information publicly, although we will continue to try to be as transparent as we possibly can. Question number four. In the annual report of 2019, SBM Offshore mapped the male/female ratio of the entire organization in the 5-year key sustainability figures. Generally, women are often still disadvantaged compared to men. On average, women in the European Union earn approximately 16% less than men. Organizations that treat our employees fairly may find an increase in productivity that comes from higher morale and employee commitment. Such companies may find it easier to recruit and retain a skilled workforce as well as sustaining or improving their reputation. Would SBM Offshore be willing to analyze the gender pay gap within the entire workforce and report on this matter to its stakeholders? The answer to this question is yes, we would and we have. We would analyze and we have analyzed. At SBM Offshore, there is no gender pay gap at this point. We will engage with our auditors on how best to report on this. We also received the following question from a shareholder. Could you please clarify if and what force majeure clauses are included in your contracts with clients and yards? And could your clients have the right to call force majeure for low oil price or lack of global oil storage capacity? We have received this question or similar questions from other stakeholders as well, and we will come back to this at a later stage where we will answer a number of generic questions. I would like now to move to item 3 on the agenda. And item 3 on the agenda is the report of the Supervisory Board for the financial year 2019. As mentioned in the report of the Supervisory Board on Page 62 and following of the annual report, the Supervisory Board, in 2019, supervised the business and activities of the company, amongst others, through 22 scheduled and ad hoc meetings, both in person and through conference call. In addition, the Supervisory Board had various informal or [ proprietor ] contacts. The main items, which were reviewed by the Supervisory Board and its committees in 2019 next to normal recurring items are mentioned on Page 63 and following of the annual report. I draw your attention to some important events in 2019. On various occasions during the year, strategy, progress and implementation thereof as well as risks related thereto were discussed. The company's strategic principles of optimize, transform and innovate were applied and were checked time and time again. Also the Supervisory Board reviewed the commercial activities in 2019, amongst others, leading to the award of contracts for FPSO Liza Unity and FPSO Prosperity by ExxonMobil in Guyana. The next phase of the FPSO Prosperity project remains subject to government approvals, project sanction and authorization. Contracts were also signed with Petrobras for the 22.5 years lease and operation of FPSO Sepetiba, also known as Mero 2, which was followed by the divestment of a 35.5% interest in the special purpose companies related to the lease and operation of that FPSO to long-standing business partners. In 2019, 5 roads were under constructions. Of these 5, 3 are allocated to projects of our clients, ExxonMobil and Petrobras. I now move to the composition of the Supervisory Board. The terms of office of Thomas Ehret, Vice Chairman of the Supervisory Board and Chairman of the Technical and Commercial Committee; Francis Gugen, member of the Supervisory Board and Chairman of the Audit and Finance Committee; and that of myself will expire at this AGM. Both Thomas Ehret and myself have served the company for 12 years due to the exceptional situation the company was in at the end of our 8-year term in 2016, and both of us will retire after this meeting. Francis Gugen has indicated that he is prepared to stand for reelection, and his reappointment is proposed under item 19. As announced in the press release of the 13th of February, we are pleased to inform shareholders that the Supervisory Board nominates Andy Brown and Jaap van Wiechen for election as members of the Supervisory Board, which is proposed under items 20 and 21 of this agenda, respectively. No questions were received on this agenda item. We will now move to item 4 of the agenda. Item 4, Corporate Governance: summary of the Corporate Governance policy. I refer to the Corporate Governance chapter in section 3.5 of the 2019 annual report with a summary of the Corporate Governance policy, which aligns with the best practices of the Dutch Corporate Governance Code. The Supervisory Board rules and Management Board rules were lastly amended in November 2019 and are published on the company's website. The 2019 annual report sets out how SBM Offshore has implemented the key themes of the code, including the long-term value creation and culture. I would also like to refer to the Risk Management chapter in section 3.7 of the annual report, which describes the company's risk appetite, the design and effectiveness of the internal risk management and the company's control system. Finally, I would like to refer to the in control statement by the Management Board in section 3.11. No specific questions were received on this agenda item. We will now move to point 5 of the agenda, which is the remuneration report 2019. 5.1, remuneration report 2019 of the Management Board. Today, we will have several items on the agenda dealing with remuneration. Agenda item 5 deals with the remuneration report 2019, both of Management Board and Supervisory Board. This item is presented to you for an advisory vote in line with new Dutch legislation. Agenda item 6 regards the proposal for changes to the Remuneration Policy 2018 for the Management Board to comply with new Dutch legislation, which came into effect on January 1. Agenda item 7 contains the proposal for the adoption of the remuneration policy for the Supervisory Board. Mrs. Cheryl Richard, the Chair of the Appointment and Remuneration Committee dealing with remuneration matters, cannot be with us today, and I will handle these agenda items. I will provide a short introduction on executive remuneration at SBM Offshore. Afterwards, I will go through the individual voting items. SBM Offshore current remuneration policy of the Management Board, also referred to as Remuneration Policy 2018, was approved at the AGM of 2018. That is why it's called Remuneration Policy 2018. That results in full alignment, according to the view of the Supervisory Board, with our shareholders and rewards long-term corporate performance. For details about Remuneration Policy 2018 and for the execution of this policy in 2019, I refer to the remuneration report, which is included in paragraph 3.4 of the annual report 2019 and the information in paragraph 4.3.6 of the financial statements 2019. Remuneration in 2019. 2019, and we look backwards, of course, has been a successful year for SBM Offshore. The company won 2 FPSO contracts. We are deploying the Fast4Ward strategy successfully. We have been working on reducing our carbon footprint successfully and significantly. And we have announced a doubling of dividend of 2019 and another share repurchase for our shareholders, which has been completed on April 3, as per Douglas Wood report. For further details, I refer to the 2019 annual report and the presentations earlier this meeting. What can we further say about reward in 2019? We have expanded our remuneration report by providing more explanation on the Supervisory Board's considerations. We have made those changes to our remuneration report as required by the implemented shareholders' rights directive. We've held an extensive road show with shareholders and other stakeholders to discuss remuneration at SBM Offshore, and we have taken earlier feedback on Board and decided that the Board will no longer apply its discretion to increase the short-term incentive for the Management Board. It will retain its discussion to decrease the short-term incentive. Before I go to the voting on the remuneration agenda items, I would like to thank the Management Board for the very strong performance over the past year as well as over 2019. The next item on the agenda is number 5, remuneration report. Firstly, we will go to the remuneration report for the Management Board. As announced in the convocation documents, we have asked you for an advisory vote. No questions were received on this agenda item. We will now proceed with the voting results of the advisory vote on the 2019 remuneration report of the Management Board. The votes for the 2019 remuneration report of the Management Board are: 113,710,430 votes, for; 14,329,210 votes, against; and 100,925 abstentions. This means that the 2019 remuneration report of the Management Board has been supported by the shareholders, for which I thank you. We will now move to item 5.2 of the agenda, which is the remuneration report 2019 of the Supervisory Board. The second topic under agenda item 5 is the remuneration report for the Supervisory Board. For this item, we have also asked for your advisory vote. For the details of the Supervisory Board remuneration report, I refer to section 3.4 of the annual report. No specific questions were received on this agenda item. We can now proceed with the voting results of the advisory vote on the 2019 remuneration report of the Supervisory Board. And the vote of the -- for the 2019 remuneration report of the Supervisory Board: 127,278,212 votes, for; 729,599 votes, against; and 132,754 abstentions. This means that the 2019 remuneration report of the Supervisory Board has been supported by the shareholders, for which I thank you. We will now move to item 6 of the agenda, which is the remuneration policy. 6.1 regards required changes to the remuneration policy for the Management Board to comply with the legislation as implemented in the Netherlands on January 2020 under the Shareholders' Rights Directive. This proposal, in accordance with Dutch law, must be adopted with a majority of at least 75% of the votes cast. This agenda item deals with some changes we are required to make to RP 2018. This is to comply with the legislation in Book 2 of the Dutch Civil Code, further to the implementation of the Shareholders' Rights Directive in the Netherlands. We heard from some stakeholders that they would have preferred that we would have presented a materially revised remuneration policy for our Management Board. However, since Remuneration Policy 2018 was approved by the shareholders in 2018, we have limited ourselves to the compulsory regulatory changes. This proposal must be adopted with a majority of at least 75% of the votes cast. The Supervisory Board will continue to engage with shareholders as well as other stakeholders in order to get further feedback on Remuneration Policy 2018. It will consider this feedback during a review of Remuneration Policy 2018 in 2020. We have received the following question from Ms. Faryda Lindeman of NN Investment Partners. There are several U.S.-based companies in your peer group. Can you provide more information from which companies your staff members are recruited? Our answer is that as a company, we do not systematically register the information from what companies our staff members are recruited. We have several examples of senior staff who were working for U.S.-based companies. We also have an execution center with senior staff in Houston. We experience market pressure from U.S. companies. The oil and gas industry and labor market is almost, by definition, global with a strong U.S. presence and U.S. dollar denomination. We can now proceed with the voting results on proposed changes to the Remuneration Policy 2018 of the Management Board. The votes to the proposed changes to the remuneration policy of the Management Board are: 87,185,730 votes, for; 37,408,976 votes, against; and 3.5 million, 3,545,855 abstentions. That means that there is almost 70% in favor, which is almost the same percentage with the RP 2018 was approved in 2018. But I conclude that required numbers of votes for adoption of the changes of -- to RP 2018 have not been met. This means that Remuneration Policy 2018 will remain in place as it is today. The Supervisory Board will continue to liaise with you to take your feedback into consideration during the review of Remuneration Policy 2018 in 2020 and use this input for a proposal for a new remuneration policy in the next annual meeting of shareholders in 2021. We will now move to item 7 of the agenda, remuneration policy for the Supervisory Board. Again, in accordance with the law, this proposal must be adopted with a majority of at least 75% of the votes cast. The next item on the agenda is item 7, adoption of the remuneration policy for the Supervisory Board. What I would like to say here is that the policy for the remuneration of the Supervisory Board has not yet changed. You, as shareholders, have already approved the elements of the current policy during previous meetings and, lastly, during the AGM in 2015. However, the implemented Shareholders' Rights Directive in the Netherlands prescribes the Supervisory Board remuneration policy, as such, is formally and in its whole adopted by the AGM. For that reason, we now move to the voting results for these items. No specific questions were received on this agenda item. We can now proceed with the voting results on the remuneration policy of the Supervisory Board. The votes for the proposed remuneration policy of the Supervisory Board are: 127,280,931 votes, for; 722,373 votes, against; and 137,261 abstentions. This means that the proposal is adopted by the general meeting of shareholders, for which I thank you. I will now move to item 8 of the agenda, which is about the financial statements 2019 and about the dividend. We begin with information by PricewaterhouseCoopers N.V. on the audit at SBM Offshore. The 2019 financial statement, consisting of the consolidated financial statements and the notes to the consolidated financial statements and the other financial data, can be found as of Page 120 of the annual report 2019. The 2019 financial statements have been audited by PricewaterhouseCoopers Accountants N.V., the company's external auditor in 2019. A copy of the annual report signed by both the Supervisory Board and the Management Board and the copy signed by the external auditor are available with the company secretary. As indicated at the start of this meeting, as PricewaterhouseCoopers is not present, I will, therefore, read the statement of PricewaterhouseCoopers in relation to the 2019 audit. That statement begins with the words, "My name is Michael de Ridder," which I'm not. So I hope you will excuse me and invent yourself the quotes here. So "My name is Michael de Ridder, and I appreciate the opportunity to present my views today." Those are his views. "I am the Lead Partner of PwC signing the auditor's report on the financial statements of SBM Offshore. I do this in close cooperation with my fellow partner, [indiscernible]. She has also been responsible for signing the assurance report with the sustainability information this year. We have performed our work with some 50 colleagues across the globe. We will elaborate on the activities performed to substantiate our independent auditor's reports and our conclusions reached. Conclusion. Upon conclusion of our work as independent auditors of the company, we have issued an unqualified auditor's report dated to February 12, 2020, on the financial statements of SBM Offshore N.V. for the year 2019. We believe these financial statements provide a true and fair view. The accounting policies are consistently applied and appropriately based on the company as a going concern. We have concluded that the information included in the annual report is consistent with the financial statements as well as compliance with laws and regulations in this respect. We have no specific matters to report on this. We conclude that the description of the risk management and control systems in the annual report is in line with the results of our audit work and that the main risks, which we consider relevant from an audit perspective, have been appropriately disclosed in the annual report. We also point to the conclusions of our review of the sustainability informations as included on Page 241 to 244 of the annual report. We have issued an unqualified assurance report with respect to the sustainability information. Approach, materiality and scope. A summary of our audit approach is included in our auditor's reports on Page 209 to 217, and I would like to take the opportunity to explain some further details of our audit approach, the materiality level applied and to the scoping. Our audit starts with the risk assessment. This risk assessment focuses on risks that may cause a material misstatement to the financial statement. After this risk assessment, we assess the company's control environment, and we test this whether relevant. There is focus on the judgmental items with substantial impact on the financial statements, most of which have been addressed in the key audit matters. Most of these items are managed and controlled from the Amsterdam, Monaco and Marly locations of the company. Our work, therefore, has a major focus on these 3 components or locations. We have used profit before tax as a benchmark for materiality. We used this benchmark and the rule of thumb percentage based on the common information needs of users of the financial statements, including, but not limited to factors such as the headroom on covenants and the financial position of the company. The benchmark differs from prior year where we used net assets as a benchmark for materiality. This is, however, a return to the benchmark of 2016 and reflects the increase in activities and margin in the Turnkey segment during 2019. Materiality has been set at USD 27 million. The materiality used is an overall materiality. This means that at a component level, the materiality levels are lower. This allocation of materiality is based on the composition of the component. Also we take qualitative factors into account when determining materiality. We always consider the risk of management override of controls and the risk of material misstatement due to fraud and revenue recognition. As part of our planning procedures, we have involved our forensic specialists to assess the risk of fraud as well as determine our audit response to those risks. Specific attention is paid to, for instance, operations in countries with a higher corruption risk and payment to agents. Also where external parties are involved to obtain audit evidence, we can assure the shareholders that we have critically evaluated the work done or prepared by those external parties. We have included members with relevant industry expertise, valuation experts, forensic specialists, IT specialists to audit IT controls and cyber risks, tax specialists, sustainability and corporate governance specialists to review the report of the Management Board. All of this comes together in an audit plan, which we discussed with the Management Board and the Audit and Finance Committee of the Supervisory Board. After we complete the work, we formally report on our findings in the management letter and the Board report. Key audit matters. In relation to our key audit matters, those areas wherein our judgments were of the most significance to the audit are the following: estimates and judgments in construction contracts; the engineering and construction of FPSOs and turret's complex, involving significant management estimates, for instance, relating to the cost to complete and the measurement of progress towards complete satisfaction of the performance obligation. Significant management judgment is applied in identifying the performance obligation and determining whether they are distinct and the method of revenue recognition as either point in time or over time and in assessing contract modifications and variable considerations. Given the unique nature of each separate project and each separate contract, management performed a contract analysis on a case-by-case basis to determine the applicable accounting for revenues from construction contracts under IFRS 15. We have performed detailed audit procedures to assess management judgment, performance obligations and considerations. We have also audited the contract analysis made by management and performed look-back procedures. Furthermore, we have assessed the adequacy of -- related to IFRS 15 disclosures in the financial statements. Our audit procedures did not indicate material findings with respect to the estimates and construction contracts and disclosures thereto. Valuation of property, plant and equipment. The company identified impairment triggers with respect to the Thunder Hawk semisubmersible production unit and the Deep Panuke mobile offshore production unit. We performed audit procedures on management's triggering the event analysis to determine its completeness, and we challenged the assumptions such as revenue and margin, the discount rate, terminal value, operational and capital expenditures, number of employees and growth rates. Our audit procedures did not indicate material findings with respect to the impairments as recorded and disclosed in the financial statements. Comparison with prior year key audit matters. In prior years, we also commented on the situation in Brazil. As this matter was resolved during the year, it was not included in our auditor's report. And as closing, I would like to conclude my summary here. Thank you for listening." Mr. de Ridder of PricewaterhouseCoopers. No specific questions were received on this agenda item. We then go to agenda item 9, which is adoption of the financial statements 2019. The financial statements have been approved by the Supervisory Board in accordance with article 28 of the articles of association of the company, and it is now proposed for this AGM to adopt the financial statements. No questions were received on this agenda item. We can now proceed with the voting results on the adoption of the 2019 financial statements. The voting results for the 2019 financial statements are: 123,529,150 votes, for; 806 votes, against; and 4,610,609 abstentions. This means that the 2019 financial statements have been adopted by this general meeting. We will now move to the next agenda item, which is item 10. Item 10, dividend policy. 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. The topic is brought to the general meeting for information. No questions were received on this agenda item, and that means we will now move to agenda item 11. Agenda item 11 is the dividend distribution proposal. Douglas Wood said at the beginning of this meeting that the strength and resilience of the business and its cash flow model has supported the launch of $150 million share buyback in February, which has been completed early April. It also on that same strength and resilience and cash flow model, support our proposal for material increase in the dividends to an aggregate level of USD 150 million. Despite the current certainty for the global economy underpinned by the robustness of our model, we are able to do this while at the same time preserving the requisite liquidity in order to navigate through the current challenging period. The proposed dividend of USD 150 million over 2019 results in a dividend of approximately $0.81 per share in cash, in line with our dividend policy. The proposed ex-dividend date is April 14, 2020, and the dividend will be payable on May 6, 2020. SBM Offshore realizes that our tax differences for some of its shareholders between a share or a cash dividend. At this time, the company's strong liquidity position has driven the decision to pay the dividend in cash. Although we are aware that some shareholders have a preference for dividend issuance, as explained during previous general meetings, we consciously choose an all-cash dividend, taking into account both the current and long-term interest of all shareholders. The dividend will be payable in euros. Based on today's exchange rate to dividend EUR 0.745 per share. No questions were received on this agenda item, and that means we can proceed with the voting results on the proposal on the dividend distribution of 2019. The votes are: 128,088,217 votes, for; 45,119 votes, against; and 7,229 abstentions. This means that the proposal is being adopted by this general meeting, for which I thank you. We will now move to agenda item 12, which is discharge. Agenda item 12 is the discharge of the Managing Board members for the Managing Board during the financial year 2019. In accordance with the articles of association, it is proposed to grant discharge to the members of the Management Board for their management during the year 2019. No questions were received on this agenda item, and that means we can proceed to the voting results on the discharge of the Management Board members for their management during the year 2019. And the voting results are: 123,361,021 votes, for; 151,970 votes, against; and 4,627,572 abstentions. And that means that this proposal has been adopted by the general meeting. Thanks. We will now move to agenda point 13, most important one of all, the discharge of the Supervisory Board members for their supervision during the financial year 2019. In accordance with the articles of association, it is proposed to grant discharge to the members of the Supervisory Board for their supervision during the year 2019. As there were no questions received on the specific agenda items, we can now proceed to the voting results on the discharge of the Supervisory Board members for the supervision during the year 2019, and those are: 123,369,061 votes, for; 143,971 votes, against; and 460 -- 4,627,533, abstentions. This means that this proposal has been adopted by the general meeting. I thank you. We will now move to agenda 14 -- item 14, excuse me, authorizations of the Managing Board. 14.1, designation of the Management Board as the corporate body authorized, subject to the approval of the Supervisory Board, to issue ordinary shares and to grant rights to subscribe for ordinary shares as provided for in article 4 of the company's articles of association for a period of 18 months up to 10% of the company's issued ordinary shares as per the 2020 AGM. In accordance with article 4 of the company's articles of association, it is proposed to designate the Management Board as the corporate body authorized, subject to the approval of the Supervisory Board, to issue ordinary shares and to grant rights to subscribe for ordinary shares. The period for the requested authorization is 18 months as of the date of this 2020 Annual General Meeting. Upon adoption of this agenda item, the authorization granted at the AGM of April 10, 2019, for a period of 18 months will be canceled as regards to the remaining periods. In other words, the 2 approvals will not run concurrently. The authorization is limited to 10% of the issued ordinary shares as per this 2020 AGM. No questions were received on this agenda item, and the voting results are: 120,933,772 votes, for; 7,200,266 votes, against; and 6,527 abstentions. This means that this proposal has been adopted by the general meeting. Thank you. We then move to point 14.2 of the agenda, designation of the Management Board as the corporate body authorized, subject to the approval of the Supervisory Board, to restrict or to exclude preemption rights as provided for in article 6 of the company's article of association for a period of 18 months. For information, this proposal must be adopted with a majority of at least 2/3 of the vote cast if less than half of the issued share capital is present. Since more than half of the issued share capital is represented, the resolution can be adopted with an absolute majority of the votes cast. In accordance with article 6 of the company's articles of association, it is proposed to designate the Management Board as the corporate body authorized, subject to the approval of the Supervisory Board, to restrict or to exclude preemption rights in connection with the issue and/or granting of rights to subscribe for ordinary shares in accordance with the relevant articles of the Dutch Civil Code. This designation is limited to a period of 18 months as of today's general meeting. Upon adoption of this agenda item, authorization granted at the AGM on April 10, 2019, for a period of 18 months will be canceled for the remaining period. There were no specific questions on this agenda item. That means we can move to the votes. And the votes are: 120,866,726, for; 7,247,324 votes, against; and 26,515 abstentions. And this means that this proposal has been adopted by the general meeting. Thank you. I will now move to item 15 of the agenda. 15.1, authorization to repurchase ordinary shares. In accordance with article 7 of the company's articles of association, the request is made to authorize the Management Board, subject to the approval of the Supervisory Board and without prejudice to -- of the relevant provisions of the Dutch Civil Code, to acquire ordinary shares representing up to 10% of the company's issued share capital as at the date of this AGM. The period for the requested authorization is 18 months as of this date. The mandate is requested to acquire ordinary shares at a price per ordinary share between the nominal value of the ordinary shares and 110% of the average price of the ordinary shares on Euronext Amsterdam N.V.'s stock exchange during the 5 trading days prior to the acquisition. The authorization to repurchase ordinary shares provides the Management Board, subject to the approval of the Supervisory Board, with the required flexibility to fulfill any purpose, including but not limited to stock dividend and/or its obligations deriving from Management Board and employment-related share plans. The duration of this authorization is 18 months as of the adoption of this resolution at today's annual general meeting. Subject to disapproved proposal being approved, the authorization granted at the General Meeting of April 10, 2019, for a period of 18 months will be canceled for the remaining period. No questions were received on this agenda item. And that means we can move to the voting results. And the voting results are: 127,286,751 votes, for; 825,730 votes, against; and 28,084 abstentions. This means that the proposal has been carried by the general meeting. Thank you. I then move to item 15.2 of the agenda, which is the cancellation of ordinary shares held by the company. Now that you have approved agenda item 15.1, the company requests the AGM to resolve to cancel shares to be repurchased by the company under the share repurchase authorization referred to in agenda item 15.1. The cancellation may be executed in 1 or more tranches. The exact number of ordinary shares that will be canceled shall be determined by the Management Board, subject to the approval from the Supervisory Board. The number of shares that will be canceled will not exceed the total of shares potentially repurchased under reauthorization requested under item 15.1. This proposal should be adopted with a majority of at least 2/3 of the votes cast if less than half of the issued share capital is represented. Since more than half of the issued share capital is represented, the resolution can be adopted with an absolute majority of the votes cast and no questions were received on this agenda item. We can then move to the voting results, which are: 127,265,928 votes, for; 814,030 votes, against; and 60,607 abstentions. This means that this proposal has been carried by the general meeting. Thank you. I will now move to item 16 of the agenda, which is the composition of the Management Board. We see his picture. It's the reappointment of Mr. Bruno Chabas as member of the Management Board and as designated Chief Executive Officer. We now come to approve the proposal to reappoint Bruno Chabas as a member of the Management Board and of its CEO. Mr. Chabas has served 8 years as management -- member of the Management Board and CEO of the company. The Supervisory Board has concluded that it is in the best interest of the company that Bruno continues as CEO. In light hereof and in accordance with article 17 of the articles of association, the Supervisory Board has resolved to make a nonbinding nomination to the Annual General Meeting to reappoint Bruno Chabas as a member of the Management Board for a 4-year term of office expiring at the 2024 AGM. The personal details of Bruno Chabas are included in the notes to the agenda. We received the following question from Ms. Faryda Lindeman of NN Investment Partner. Given the current market -- certain circumstances and the implications on the oil and gas sector, it remains uncertain what the effects on your business will be. We are, therefore, asking to reconsider the proposed increase of base salary for Bruno Chabas. Is the Supervisory Board willing to do that? The Supervisory Board has considered the proposed increase overall as fair. In light of the more recent market developments and the COVID-19 crisis, the Supervisory Board and Bruno Chabas jointly have discussed the increase again. In light of the special circumstances, it has been decided to defer the effectiveness of the new package. The period of time for the deferral will be decided at a later stage when the effects of the COVID-19 crisis have become clearer. We now move to the voting results on the proposal to reappoint Bruno Chabas as a member of the management board for a third term of 4 years. And the voting results are: 128,010,512 votes, for; 120,766 votes, against; and 9,287 abstentions. This means that this proposal has been adopted by this general meeting. Thank you. And, Bruno, my heartfelt congratulations. I will now move to item 17 of the agenda, composition of the Supervisory Board. Due to my end of terms and the resignation as a member of the Supervisory Board, Roeland Baan will be Chairman of the Supervisory Board as after closing of this meeting. No questions were asked -- received on this agenda item. And that means I can now happily move to item 18 of the agenda, which is the end of term resignation of Mr. Tom Ehret as a member of the Supervisory Board. Tom has also reached his end of term. On behalf of the Supervisory Board, I would like to thank Tom for the very, very valuable contribution he has made to the Supervisory Board, more specifically, but not limited to, his role as the Chairman of the Technical and Commercial committee. And I wish him all the best in the future. No questions were received on this agenda item. I will now move to item 19 of the agenda, which is reappointment of Mr. Francis Gugen as a member of the Supervisory Board. Francis Gugen is not with us today. Until today, Mr. Gugen has served 10 years as Supervisory Board member. In accordance with article 23 of the articles of association with SBM Offshore, the Supervisory Board has resolved to make a nonbinding nomination to the Annual General Meeting to reappoint Francis Gugen as a member of the Supervisory Board for an additional term of 2 years until the AGM of 2022. In case of reappointment, Mr. Gugen will be designated to continue as Chairman of the Audit and Finance Committee. The personal details of Francis Gugen are mentioned in the notes to the agendas. No questions were received on this agenda item. We will then move to the vote. And the voting results are: 127,328,477 votes, for; 725,865 votes, against; and 86,223 abstentions. This means that this proposal has been adopted by the general meeting. Thank you. And, Francis, thanks for being willing to serve another 2 years as Chairman of the Audit and Finance Committee, and to provide continuity there. Thank you. I will then move to point 20 of the agenda, which is the appointment of Mr. Brown as member of the Supervisory Board. We now move to the proposed appointment of Andy Brown as a member of the Supervisory Board. Mr. Brown is not present. The Supervisory Board has resolved in accordance with article 23 of the company's articles of association to make a nonbinding proposal to appoint Andy Brown as a member of the Supervisory Board for a first term of office of 4 years, expiring at the (sic) [ 2024 ] AGM. For the personal details of Mr. Brown, I refer you to the explanatory note on this agenda point. I would like to inform you that since the date that the convocation papers were published, Mr. Brown has accepted the positions of senior adviser to McKinsey & Company and as an adviser to ZeroAvia. I also would like to inform you that it is the intention that Mr. Brown will chair the Technical and Commercial Committee. No questions were received on this agenda item. And that means that we will move to the voting results, and there are: 117,842,703 votes, for; 10,059,639 votes, against; and 238,223 abstentions. This means that this proposal has been adopted, for which I thank you. I will then move to item 21 of the agenda, which is the appointment of Mr. van Wiechen as a member of the Supervisory Board. We now move to the proposed appointment of Jaap van Wiechen as a member of the Supervisory Board. Mr. van Wiechen is not present. The Supervisory Board has resolved in accordance with article 23 of our company's articles of association to make a nonbinding proposal to appoint Jaap van Wiechen as a member of the Supervisory Board for a first term of 4 years expiring at the AGM of 2024. For the personal details of Mr. van Wiechen, I refer you to the explanatory note of this agenda point. We received the following question from Ms. Faryda Lindeman of NN Investment Partners. What were the specific reasons for HAL to recommend a Supervisory Board member while HAL was not interested to do so in 2012? Is there a formal or informal agreement that Mr. van Wiechen will step down if HAL's interest in SBM Offshore will or would be reduced to below a specific level? If so what is that level? I answer this question as follows. The end of term, resignation of myself and the foreseeable resignation of the Audit and Finance Committee, given his long tenure, created demand to strengthen the financial know-how at the Supervisory Board. We are pleased that with the addition of Jaap van Wiechen to the Board, this will be the case. We consider it an appointment of a very qualified individual and not primarily as that over seat taken by our largest shareholder. Consequently, there are no further arrangements related to a percentage of shareholding. We will, of course, maintain a strict policy to avoid any conflict of interest. We now move to the voting results on the proposal to appoint Jaap van Wiechen as a member of the Supervisory Board for the first term of 4 years. And the voting results are: 127,534,778, for; 367,477 votes, against; and 238,310 abstentions. This means that this proposal has been adopted by this general meeting. Andy and Jaap, very welcome aboard. You will be a major reinforcement of our Supervisory Board, and I'm very happy on a personal level that you both have joined. We then have a number of generic questions, about 13, that we have received from the -- [ rendered in effect ] in visitors and we'll deal with those under point 23, communications and questions, and I will leave the answering of those questions to Erik Lagendijk.

Thank you, Floris. Indeed, we have received a list of questions. And the first question is that in the annual report, it is noted that up to 35 FPSO projects could come to the market for FID. And what impact does the current crisis have on this expectation? As Bruno mentioned in his presentation, at present, all markets, including the FPSO market, have become very uncertain, and clients have announced CapEx reductions of up to 30% so far, so further reductions and delays cannot be excluded. Therefore, at this stage, it is impossible to comment on the outlook for FPSO awards. The second question is referring to our materiality metrics that we have on Page 22 of our annual report, presenting 31 topics and their impact on the SBM business and its stakeholders. Pandemic is not mentioned separately. And what topics besides employee health and safety are directly exposed to the pandemic? If the metrics was drawn again today, would SBM consider including pandemic threats as a separate topics and where would it be placed in the matrix? Worth mentioning that the materiality metrics in the annual report is developed based on engagement with relevant groups of stakeholders based on which topics of stakeholder interest are mapped with impact on the business, and therefore, the ability to sustain value over time. And indeed, fair to say that pandemics has not been a topic generally discussed at large in this context, which obviously expect to happen more going forward. And as already covered in my opening remarks to the presentation, apart from health and safety of staff and contractors, which is the top priority, there is impact on the material topic, fleet management and project performance, where we have seen some impacts on operations of our fleet and construction projects. But we have implemented mitigation measures and as such, activities and operations. The first question relates to whether we can provide an interim figure for the production uptime of the fleet. And if not, can we give a prognosis on this performance indicator for the full year, which was 99.4% in 2019. As I have indicated earlier, the uptime year-to-date number for the fleet is in line with historical average of above 99%. The fourth question is about the contracts for FPSOs and whether they contain articles or clauses that may be triggered by the current crisis and have a negative impact on SBM and its stakeholders. For the benefit of listeners that are not lawyers, force majeure clauses cover events that are beyond a party's reasonable control, and contracts' risk may be allocated to either party. In general, our contracts have terms and conditions that are customary in the industry and will reflect the negotiation power of a contractor versus a major oil company. And circumstances like low oil price or lack of global oil storage capacity are risks usually our clients run. The next question, what would happen to SBM if government regulations bans deep sea oil and gas? Clearly, there would be 0 new orders, but could the existing backlog becomes stranded as well? And what would be the impact on cash flow and the balance sheet? And we received a number of these what/if questions, like what would be the impact on the expected number of new tenders if oil prices would structurally remain below $10 or USD 20 or USD 30? Or to what degree could the existing backlog become stranded if oil prices would structurally remain below 10% (sic) [ $10 ], and what would be the impact on cash flow and the balance sheet? As I have said, we have received more of these what/if questions around the impact of various low oil price scenarios or actions by governments to reduce oil and gas production. And particularly at times like these, naturally questions arise around all sorts of what/if scenarios and even if remote, but we find it not constructive to engage in speculation. We have highlighted the uncertainty right now on the outlook for future awards, and then in terms of existing lease and operate contracts in the backlog, these are contractually committed, linked to uptime, so not linked to oil price or production. The question has also been asked, to what extent these fundamental or essential scenarios have been discussed with the Supervisory Board and whether -- are your auditor, PricewaterhouseCoopers, have reviewed them. And why are these analyses or events like we are seeing now not covered in the annual report? With the Supervisory Board, we continually review our strategy, plans and liquidity for a range of scenarios with reasonable upside and downside cases as you would expect in order to test robustness. These analyses are also shared and discussed with our auditors. And to give you a specific example, in our Board and committee meetings this week, together with our auditors, we have discussed detailed analysis supporting our ability to continue as a going concern in response to current circumstances associated with the coronavirus and status of the oil market. And fair to say, the combination of exceptional events we are now witnessing were not reasonable, foreseeable at the end of last year, and this is something why you would not see full disclosure in the annual report of 2019. The next question is about piloting opportunities for the floating wind and wave energy segments. How many years will SBM need before the pilots can be marketed, and what the impact of the current crisis on those developments can be? A number of years of operation will likely be required for both wind likely to reach commercial maturity before wave. Regard to the current crisis, the initial pilot project for floating offshore wind in the Mediterranean that we are hoping to support EDF EN, you would need to ask them. And start-up of our wave energy, initial pilot offshore Monaco will likely to be delayed because we are fabricating this in our R&D laboratory in France where work currently has had to be suspended. We have also received questions on capital allocation and, in particular, our dividend distribution proposal. As Douglas Wood has said in the beginning of this meeting and as Floris Deckers has also explained, the strength and resilience of the business and cash flow model, supported the launch of EUR 150 million share buyback in February, which has now been completed. And it also supports our proposal for a material increase in the dividend to an aggregate level of USD 150 million. We have explained this previously so I conclude my answering on this topic here. We have also received a question about whether we can commit to refrain from issuing new shares or at least commit to not do so compared to a discount -- [ of a ] discount compared to the market price. And the answer to that is that currently, we have no plans at all to issue new shares. And whether SBM is considering repurchasing shares. As explained a few times, we have just completed EUR 150 million buyback announced in February and no consideration to repurchase further shares at this point in time exists. There was also a question on the increase of the base salary of the CEO. I think, Floris, you have already answered that question. Do you think I need to repeat it here? Floris, you want me to repeat it?

Go ahead. You can repeat it. Please, yes.

Okay. As explained before, and I specifically refer to the, say, a bay that has mentioned that it is against any increase. The Supervisory Board considered the proposed increase overall fair. And in light of the more recent market developments and the COVID-19 crisis, the Supervisory Board and Bruno Chabas jointly have discussed the increase again and decided to defer the effectiveness of the new package, and the period of time for the deferral will be decided at a later stage when the effects of the COVID-19 crisis have become clearer. There was also a question whether the Supervisory Board would consider to use their discretionary power to reduce or slash all or any variable components in variable payments. For instance, because the pay-for-performance relation is weaker than ever in the current turbulence. The Supervisory Board considered that variable pay over 2019 should not be affected by the current special circumstances. Obviously, variable pay over 2020 is not on the agenda today. So pay-for-performance discussions are at -- will be held at a later stage. But to give an indication of preparedness, earlier, this Management Board has participated in voluntary cut in base pay if the circumstances require this. And if and when needed, comparable measures may need to be considered again. Then there was a question on the 2 nonexecutive roles for the CEO and the VEB has explained that it is not in favor of executives with more than 1 nonexecutive position. And our response to that is that the decisions for executives to take nonexecutive positions are being reviewed to ensure the avoidance of conflict of interest and best complementarity with SBM Offshore, all of which depends also on the allocated time. And the nonexecutive positions are reviewed on a regular basis to ensure that these criteria are being met, which is presently the case for all nonexecutive positions being held. This concludes the Q&A that we have received. And I refer to the earlier remark that shareholders can always ask questions and direct it to the Investor Relations department, and the contact details can be found on our website.

Thank you, Erik. And just as a reminder, one of the well-known expressions of management is that nothing is impossible for the man or woman who doesn't have to do themselves. I happily defer further questions to my successor. I wish you well. I wish all of you the best of health and safety in these times. Thank you for everybody who has been under more or less severe lockdowns. And I know that many of you are under very severe lockdowns, all the best in coping with these difficult circumstances. I wish my successors well, and I declare this annual general meeting of shareholders of SBM Offshore N.V. closed. And also thanking all of you for participating and assisting in this unusual format.

And just before you do so I would like, on behalf of your colleagues of the Supervisory Board, the Management Board, and everybody associated to SBM, to thank you for your many contributions. And there will be no further speeches now. And obviously, in line with all the rules and regulations that flowers will be handed to you after the meeting. But thanks a lot, Floris.

Thank you.