We are energised by a renewed vigour and discipline and a commitment to deliver value to you. As we celebrated our long and successful past in 2015, we are now more than ever moving confidently toward the future.

Dear Shareholders

Let me begin by saying that it is an honour to be appointed President and CEO of your Company and a privilege to lead an organisation with such a long and proud history. We have a global workforce of dedicated and highly professional people and a large and loyal customer base, including some who have relied on us for a century or more. I am mindful of the challenges ahead of us but I am also excited about the significant growth opportunities Boart Longyear can achieve by continuing to execute on the operational improvement and product innovation initiatives outlined in the Chairman’s Report. I assure you that my team and I will give 100% to ensure we deliver long-term value to you, our shareholders. That we celebrated our 125th anniversary in 2015 is proof of our tenacity and resilience. We see the challenges of our markets as opportunities to improve and transform our business.

In 2015, Boart Longyear’s safety performance was solid, including the achievement of our lowest ever recorded TCIR (Total Case Incident Rate). During 2015, we completed the recapitalisation of our balance sheet by partnering with Centerbridge, and we continued to make progress on costs in both the overhead and operational areas of our business.

We substantially improved cash generation in the second half of 2015 versus the same period in 2014 and believe that there is room for further improvement in 2016. Our debt levels are still too high, although we now have a more favourable structure to aid our overall strategy. Our vision and mission are to lead the next generation of innovation in the drilling industry. We are focused on the short-term demands of our business, but we have not lost sight of the future.

As part of Boart Longyear’s executive leadership team for the past two years, I have been intimately involved in designing and implementing the initiatives to improve our business. Those initiatives are delivering benefits, and I am dedicated to their continuation and success.

The Chairman’s Report has covered many of the achievements of 2015, so I would like to outline the clear and simple priorities that we have put in place for 2016. I am personally committed to each of these five priorities.

1. Safety and Integrity

Safety and integrity must always be cornerstone values for Boart Longyear’s employees. Over the years, we have invested significantly in resources, education and programs to support and enforce these values, but our commitment is to develop a culture where these values are intrinsic to our workforce and all employees recognise their personal accountability to have the dual objectives of safety and integrity guide their actions every day.

2. Customer

Being closer to our customers and understanding their current and longer-term needs are critical to our success. We are investing in increased resources and improved commercial processes to better listen to our customers and offer them better service, value and innovation. We are driven by the desire to find more ways to help our customers continuously decrease costs, increase productivity and improve safety. For them, attaining these goals can be the difference between success and failure, and we are dedicated to their success.

3. People

To help drive our productivity initiatives we need to continue to enhance the skills of our people and drive a mindset of continuous improvement in productivity and efficiency. We are aligning incentives to our business priorities. We will celebrate our wins but will also ensure we learn from our mistakes.

4. Productivity and Efficiency

Our productivity and efficiency initiatives are well underway, and significant achievements were made in this area in 2015. We are confident much more can be achieved and believe that with continuous improvement, we can further drive costs down and improve our service delivery.

Boart Longyear remains unique as the only global drilling services provider with a significant global drilling products business. Harnessing the potential synergies of these businesses through more effective support and collaboration can be one of the Company’s unrivaled competitive advantages and we intend to fully capitalise on that advantage. Our best days are ahead of us, and we are determined to deliver positive results for you.

5. Cash

Cash generation is critical to our ability to ride out the current resources downturn. As we highlighted in our 2015 results presentation, we have reduced our overall expenditure profile by about $1.3 billion since 2012. Ongoing efforts to simplify our operating model and reduce our cost base will result in a more efficient and more flexible business. These improvements will better position Boart Longyear to succeed in all market conditions and phases of the commodities cycle.

We are energised by a renewed vigour and discipline and a commitment to deliver value to you. As we celebrated our long and successful past in 2015, we are now more than ever moving confidently toward the future.

Yours sincerely,

Jeff Olsen
President and CEO