Maintaining Today, Creating Tomorrow Shareholder Review 2009 Australia & New Zealand All UGL’s businesses have significant operations throughout Australia and New Zealand, working for blue‑chip companies Americas and federal and state We have governments. longstanding operations in the facilities management and corporate real estate sectors and have also begun operating in the infrastructure sector. From its beginnings in Western Australia as a construction partner to the mining sector, UGL has grown to become a multinational, multi‑sector service provider operating in engineering, construction, maintenance and asset management through four divisions: UGL Infrastructure, UGL Rail, UGL Resources Asia & Middle East and UGL Services. Our property services division operates in many Asian countries. We also operate in the rail and infrastructure sectors. UGL provides essential services. Contents We design, construct and maintain the 2 Welcome 4 Safety transport, power and water assets on 6 Sustainability which cities and communities rely. 8 People We manage the facilities and properties from which our clients conduct their business. Our project delivery and asset management expertise help the resources sector thrive. Our three engineering Our property business businesses offer our provides integrated clients end‑to‑end facilities management, solutions for design, business process construction and outsourcing and maintenance of vital corporate real estate infrastructure and advice to the users of resources assets. large property assets and portfolios. 12 Engineering 20 Property 14 UGL Infrastructure 22 Americas 16 UGL Rail 23 Australia & 18 UGL Resources New Zealand 24 Asia & Middle East Shareholder Review 2009 | Page 1 Welcome from the CEO Welcome to UGL’s review for the 2009 financial year. My name is Richard Leupen, and I am the company’s Managing Director & CEO. I’m pleased to report that UGL has delivered another year of growth, and is well placed to continue on its journey in the 2010 financial year and beyond. UGL’s vision is to be the leading provider Our property business, UGL Services, the company increased its operating of services in the essential sectors in incorporating the UGL Premas, UGL Equis revenue to $4.8bn in the 2009 financial which we operate: water, energy, rail, and UGL Unicco brands, offers a full year. Underlying net profit after tax rose transport, resources and property. Our range of solutions to the users of large to $150.3m. This was the eighth business supports our clients’ needs over property assets and portfolios across consecutive year in which UGL’s earnings the long term, providing a sustainable, many countries. Our services range from had risen by more than 10% and allowed recurring base for shareholder returns. day-to-day janitorial services through us to increase fully-franked dividends to to integrated facilities management, 64¢ a share. Our three engineering divisions – UGL environmental services and corporate Infrastructure, UGL Rail and UGL Resources This ongoing success has not been real estate advisory. – offer total life-cycle support to clients possible without financial and commercial from project conception and design We are driven by five core values: safety, discipline and sound risk management. through to construction, installation and integrity, teamwork, outstanding customer UGL goes to great lengths to ensure long-term asset support, refurbishment service, and openness and honesty it does not take on excessive levels of and overhaul. in communication. Throughout the financial or operational risk and looks 14 countries in which we operate, we look for commercial structures that enable for people and partners who embody these appropriate balance of risk and reward. values, and aim to develop them in the We work predominantly for blue-chip 28,000 people we employ directly and the companies, governments and institutions. 15,000 subcontractors who work for us. The bulk of our revenue comes from recurring sources, and our multi-sector These values have provided a sound base approach ensures we are not overexposed for UGL’s financial performance. Despite to any one cycle. some challenging economic conditions, Safety is a core value at UGL, represented by the USafe culture that we embed in all that we do. We are committed the continuous improvement of our practices and systems in the area of health, safety, security and environment. Our safety focus extends to our employees, subcontractors, clients and partners as well as to the community at large. For more information on UGL’s safety culture and USafe, please turn to page 4. Page 2 | United Group Limited Operating Revenue ($m) EBIT ($m) Adjusted NPAT ($m) Our 4,754.4 232.3 150.3 Technology H1 H1 211.6 H1 136.1 Partners H2 H2 H2 3,478.2 2,438.1 121.9 81.5 148.6 124.3 92.7 84.1 2,549.5 1,913.2 120.2 78.7 2,232.4 86.3 1,247.1 57.4 69.6 42.8 1,124.8 47.5 1,254.9 63.4 2,316.3 110.4 0 30 60 90 120 150 31.6 68.8 40.0 87.3 753.0 1,565.0 52.0 1,302.4 62.3 1,107.6 50.6 35.9 35.3 501.9 23.4 15.9 FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09 FY05 FY06 FY07 FY08 FY09 4. Total Revenue 5. EBIT (Group) 1. NPAT We also count among our partners some at $8.2bn and we were in the final stages of the world’s leading technology providers of negotiations on further contracts with – such as GE, Mitsubishi and Alstom. This a value in excess of $2bn. In addition, we allows us to offer our clients market-leading have options to extend existing contracts technology solutions in all our sectors, worth $2.1bn, and the value of our recurring an increasingly important factor as our maintenance work over five years, assuming communities look to increase the efficiency, an ongoing retention rate of 90%, is $5.3bn. cleanliness and environmental responsibility The company is well placed to benefit from of their operations. several long-term growth trends, including the ongoing shift toward outsourcing of Whether we are providing clean solutions property services, long-term investment in the rail transport sector, helping our in the Australian resources sector and the property service clients improve their sustainable development of the rail, water environmental performance or working and power sectors. on clean water or power projects, sustainability is a crucial part of UGL’s Thank you for your interest in UGL. business. Internally, we have also recently rolled out USustain, the brand under which our initiatives make our own business more sustainable, in line with the needs of our clients and shareholders. Richard A Leupen UGL is in good shape. At the end of the Managing Director & CEO 2009 financial year, our order book stood Share price growth – UGL vs S&P/ASX All Ordinaries Index Our Values 3,000 • Safety 2,500 United Group Limited • Integrity ASX All Ordinaries 2,000 • Teamwork 1,500 • Outstanding customer service 3000 1,000 • Openness and honesty2500 500 in communication 2000 Total shareholder return (indexed) Total 0 June June June June June June June June June June 1500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1000 500 Shareholder Review 2009 | Page 3 0 Miguel Beltran and Ruben Vazquez, UGL Unicco lighting technicians who cover 214,000 square Safety metres for Honeywell Engine Systems & Services in Phoenix, Arizona, prepare for a Safety is a core value at UGL, and the safe working day. company is committed to continuous improvement of its practices and systems in the area of health, safety, security and environment. Our safety focus extends to our employees, • UGL Services in Australia & New Zealand subcontractors, clients and partners as well as to recorded zero incidents on its contracts with the community at large. Bunnings, GE, Ernst & Young, Edith Cowan University, La Trobe University and the At the end of the 2009 financial year, our rolling New South Wales Department of Correctional 12‑month total recordable case frequency rate Services. We were also one of just 22 contractors was 10.28 per million man hours and our lost‑time of approximately 1,000 at BHP Billiton’s Olympic injury frequency rate was 4.05 per million man Dam site in South Australia to achieve more than hours. During this period, many of our operations a million man hours without an incident. recorded significant injury-free periods, or were recognised by clients for their commitment to • Our international property services operations safety. received recognition for safety, including an Award of Honor with Distinction from the Greater Some achievements included: Omaha chapter of the National Safety Council • UGL Infrastructure’s team at the Tamar Valley in the United States for UGL Unicco’s operation power station in Tasmania went more than at Cargill’s Blair operation and several BizSafe 700,000 man hours without a lost‑time injury; awards from the Workplace Safety & Health the Cleaner Seas Alliance water project in Cairns Council in Singapore for UGL Premas. went 580,000 man hours without a lost‑time At all our operations, we continue to follow our injury, and the PARR Alliance water project USafe policies and to look for ways to maintain and in Sydney went 350,000 man hours without a improve our safety performance. lost‑time injury. The importance of ongoing review and • Twenty‑six of UGL Resources’ 32 operational improvement of our safety systems and processes sites went the full financial year without a was highlighted in the most regrettable fashion lost‑time injury and 15 of these same sites went in September 2008, when an employee working the full financial year without a medical treatment for our power transmission joint venture, Balfour injury.