United Group Limited Investor Day. Thursday November 6, 2008 The Ivy, Sydney

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1 United Group Limited Investor Day Thursday November 6, 2008 The Ivy, Sydney

2 Introduction Richard Leupen, Managing Director & CEO

Today s Topics Group update Summary of trading conditions, impact of financial crisis, strategy and outlook Business update Overview from operational

3 Today s Topics Group update Summary of trading conditions, impact of financial crisis, strategy and outlook Business update Overview from operational heads on trading, strategy and outlook Finance & Risk Update on risk management, funding and balance sheet Discussion Lots of it: please ask questions 3

4 Rough Agenda When What Who 08:30am 09:00am Group update Richard Leupen 09:00am 09:30am UGL Services David Nelson 09:30am 10:00am UGL Rail Andy Summers 10:00am 10:30am Break 10:30am 11:00am UGL Resources Jon Birman 11:00am 11:30am UGL Infrastructure Richard Leupen 11:30am 11:45am Risk management David Simpson 11:45am 12:00pm Finance update Phil Mirams 12:00pm 12:30pm 12:30pm Open discussion Close 4

Today s Speakers Richard Leupen Managing

Executive, UGL Resources Joined 2002 David

Pacific); Chief Development Officer Joined

2006 Andy Summers Chief Executive, UGL Rail

5 Today s Speakers Richard Leupen Managing Director & CEO Joined 2000 Jon Birman Chief Executive, UGL Resources Joined 2002 David Nelson Chief Executive, Property (Asia Pacific); Chief Development Officer Joined 2007 David Simpson Chief Legal Officer Joined 2006 Andy Summers Chief Executive, UGL Rail Joined 2005 Phil Mirams Chief Financial Officer Joined

6 Group Update Richard Leupen, Managing Director & CEO

Safety 25 Rolling 12-month safety performance Frequency per million man hours 20 15 10 5 UGL Unicco

7 Safety 25 Rolling 12-month safety performance Frequency per million man hours UGL Unicco acquisition 0 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Lost time injuries Total recordable cases 7

8 Global Presence 8

9 People Skills shortage Remains an issue despite slowing economy 896 vacancies throughout UGL Higher unemployment may ease pressure 43,932 staff at September 30 30,164 direct employees 13,768 sub-contractors United Group Limited workforce Head office 1% UGL Infrastructure 5% UGL Rail 8% UGL Resources 9% UGL Services 77% 9

10 Business Model Key strengths Recurring revenue streams Robust risk management Strong balance sheet Government/blue-chip clients Technology partnerships Focus on essential infrastructure Strong positions in core markets Well-placed to ride out any downturn 10

11 Order Book Order book of $8 billion UGL order book by division $1.6 billion in contracts secured FY09 to date Preferred tenderer on additional $2.6 billion UGL Services $2,970m UGL Infrastructure $2,656m Further tendering pipeline of $7.6 billion UGL Resources $712m UGL Rail $1,658m 11

12 Order Book continued Contract wins Tamworth Regional Council wastewater treatment alliance Order book growth $7.4bn $8.0bn Extension of Transpower maintenance program Rail signalling maintenance contract with BHP Billiton Extensions to asset services contracts with Queensland Alumina and Rio Tinto Alcan $4.3bn $4.4bn Pipeline highlights $2.7bn Victoria Schools PPP MainTrain negotiations Airport Link alliance FY05 FY06 FY07 FY08 Q109 12

13 Trading Conditions UGL well-placed Conservative debt position Strong balance sheet Blue-chip clients, technology partners UGL order book by year Potential impact No material affect on FY09 Still expect growth in FY10 Watching ANZ government/resources spending US corporate real estate weak US facilities management strong Asian operations performing well $3.1bn $2.0bn $1.0bn $1.9bn FY09 FY10 FY11 Beyond 13

14 Financial Crisis What s changed? Availability of funding Business confidence Resources cycle What s stayed the same? Outsourcing trend Need for infrastructure investment ($20bn Building Australia Fund) Recurring, maintenance bias of UGL earnings (~70 per cent) What are we doing? Managing capital, credit and cash Redoubling risk disciplines Focusing on our clients Iron ore wagon, Pilbara 14

15 Infrastructure Investment Public capital formation as a % of GDP, year to 30 June

16 Strategy Update Engineering services Focus on organic growth Targeted geographic expansion Potential to streamline Property services Develop global model Gap analysis Systems and process integration Mergers & acquisitions Always of interest if returns are apparent Access to capital markets constrained Asset prices low but real value yet to emerge 16

17 Conclusion Well-positioned in slowing economic cycle Conservative balance sheet Recurring revenue streams Diverse earnings base Guidance for FY09 unchanged Earnings growth within range of analyst expectations (10% to 20%) Expect to maintain pay-out ratio; dividends fully-franked UGL Rail workshop 17

18 UGL Services David Nelson, Chief Executive, Property (Asia Pacific) & Chief Development Officer

34,000 people throughout Americas, Asia, Middle East, Australia and New

19 Who We Are Provider of property services including facilities management and real-estate services to bluechip corporations, institutions and governments 34,000 people throughout Americas, Asia, Middle East, Australia and New Zealand Four companies: UGL Services (ANZ), UGL Premas, UGL Unicco and UGL Equis 19

20 Business Model Strengths Bulk of revenue from long-term, essential maintenance for large facilities and social infrastructure Recurring revenue streams from high quality clients with large, diverse portfolios Broad geographic reach and service-line provision World class HSSE standards and performance Flexibility of service lines to meet client requirements and evolving market needs Opportunities Establishing a global, end-to-end property services model Unifying business around brand, culture, systems and processes Capturing growth in outsourcing of property services Regional excellence, global readiness 20

21 Business Model continued Portfolio strategy Workplace strategy Financing & incentives Project management Portfolio management Transaction brokerage Construction management Facility strategy Account management Customer solutions Business support Engineering services Facilities management Environmental consulting Property management Technology consulting Property accounting Energy management Industrial & logistics 21

22 Growth Strategy Sustain Organic growth of existing businesses Ongoing improvement and standardisation of systems and processes Attract, train and retain our people How do you expect your level of outsourcing will change in the next 12 months? Grow Geographic diversification in US, Asia, Middle East, Europe Cross-sell to customers across service lines and geographies New service lines to existing and new customers No change 60% Increase 34% Decrease 6% Source: JPMorgan survey of blue-chip companies, October

23 Outlook Order book Order book stands at record of almost $3bn Recent contract wins with National Foods, South Australia Water UGL Unicco new sales at record levels Dominated by government and blue-chip clients UGL Services order book Q109 FY08 $2,484m $2,970m Immediate pipeline Membership of consortium in exclusive negotiations over Victoria Schools PPP Preferred tenderer status secured on ~$200m contracts in Australia and New Zealand Singapore Sports Hub nearing financial close FY07 FY06 FY05 $762m $650m $1,023m 23

Operations Asia-Pacific ANZ management team installed FY08 and gaining momentum Restructuring and upgrading systems and processes Asian operations continue to grow Promising signs from India, Middle

24 Operations Asia-Pacific ANZ management team installed FY08 and gaining momentum Restructuring and upgrading systems and processes Asian operations continue to grow Promising signs from India, Middle East and China North America Facilities management yet to feel an impact from economic downturn No expectation for short-term change in depressed conditions in corporate real estate Further opportunities to integrate UGL Equis and UGL Unicco operations Singapore Sports Hub 24

25 Global Leadership Management board Richard Leupen, Managing Director & CEO Phil Mirams Chief Financial Officer David Simpson Chief Legal Officer David Nelson Chief Executive, Asia Pacific Louis Lanzillo Chief Executive, Americas & Europe Robin Silvester CE, UGL Services (ANZ) Tony Seah CE, UGL Premas George Keches President, UGL Unicco David Montross President, UGL Equis 25

26 Conclusion Strong business model (end-to-end service lines) in a long-term market Need to build in some geographies and grow others Strong customer base giving long-term, recurring and reliable revenue Optimising systems and processes throughout existing businesses Sydney Opera House 26

27 UGL Rail Andy Summers, Chief Executive

operating in Australia, New Zealand, Hong Kong and South East Asia Growing business in Asia

28 Who We Are Largest and most comprehensive rail provider in Australia A pre-eminent provider of rolling-stock solutions and asset management services in the rail industry 3,650 people operating in Australia, New Zealand, Hong Kong and South East Asia Growing business in Asia through partnerships with MTR Corporation and GE Developing relationships in China and India 28

Business Model Strengths Largest rolling-stock provider in Australia with 125-year history Engineering ability and reputation with skilled, experienced teams Long-term alliances with key partners

29 Business Model Strengths Largest rolling-stock provider in Australia with 125-year history Engineering ability and reputation with skilled, experienced teams Long-term alliances with key partners (GE/Alstom/Mitsubishi/MTR) ~50% Government and 35% blue-chip client base End-to-end solution capability Recurring revenue Opportunities Taking maintenance expertise offshore Leveraging existing alliance partnerships International supply-chain Knowledge management and asset services QR National coal wagon 29

Growth Strategy Capture and maximise shift from road to rail, driven by environmental and economic factors Organic: extend, expand and strengthen existing alliances, partnerships and client

30 Growth Strategy Capture and maximise shift from road to rail, driven by environmental and economic factors Organic: extend, expand and strengthen existing alliances, partnerships and client relationships Work with existing partners to expand Asian maintenance business Potential partnership with Texmaco (Birla Group) to establish engineering centre in India: wagons, components and services Bring innovation to all levels of build and maintain: eg, Six Sigma Pacific National locomotive 30

31 Outlook Order book 80% of FY09 order book sold Major maintenance contracts near end of lifespan (MainTrain, MainCo, Hong Kong) Immediate pipeline 10-year extension of spare parts/build/ maintenance and service agreement with GE Locomotive heavy haul tenders to iron ore and coal players (east & west coast) Intermodal tenders east & west coast Wagon tenders to iron ore, coal and intermodal players (East & West Coast) Ongoing discussions regarding MainTrain extension MR3 Hong Kong extension and expansion UGL Rail order book Q109 FY08 FY07 FY06 FY05 $1,658m $1,869m $1,532m $2,033m $1,453m 31

32 Passenger Operations Australia-wide passenger growth suggests growing demand Australian rail passenger growth by city Build Oscar/HRC Refurbishment opportunities Hong Kong LRV contract Phuzen 12.7% 9.0% Maintenance MainTrain (Sydney) expires March 2009; negotiations ongoing Melbourne: strong rail consortium with MTR and John Holland; aligned with incumbent Yarra Trams Promising negotiations should lead to expansion of Hong Kong contracts in 2009, possibly to China 5.0% 4.5% 0.0% Melbourne Brisbane Perth Sydney Adelaide 32

33 Freight Operations Sectoral drivers Resources sector: growth in volumes not prices Thermal coal demand still growing Inter-modal sector: shift from road to rail Maintenance task growing Pacific National contract (Spotswood) Parts supply to 1,500-strong locomotive fleet Pilbara, QR opportunities Urbanisation will continue in the long term in China and India Environmental drivers to replace/upgrade older locomotives 33

Conclusion Well-placed to benefit from ongoing growth in demand for passenger and freight rail products and services Strength and depth in management and client

34 Conclusion Well-placed to benefit from ongoing growth in demand for passenger and freight rail products and services Strength and depth in management and client base underpinned by recurring revenue streams Well-positioned to continue expansion into Asia with asset-management proposition Tangara train Sydney Harbour Bridge 34

35 Break

36 UGL Resources Jon Birman, Chief Executive

people throughout Australia and New Zealand Metals and

37 Who We Are Leading provider of project delivery and asset management services to the resources sector 3,900 people throughout Australia and New Zealand Metals and minerals, oil and gas, chemicals and industrial processing 37

Business Model Strengths Business mix: ~60% of earnings from recurring asset services Capacity to deliver end-to-end solutions throughout project life cycle Clients include Alcoa, BP, BHP Billiton,

38 Business Model Strengths Business mix: ~60% of earnings from recurring asset services Capacity to deliver end-to-end solutions throughout project life cycle Clients include Alcoa, BP, BHP Billiton, Incitec Pivot, Rio Tinto and Shell Diverse Earnings with limited exposure to single clients or commodities Opportunities Ensuring long-term basis of earnings from asset services Positioning business for international expansion driven by existing client profile Maintaining exposure to investment in coal, iron ore, alumina, LNG and chemicals Improve intellectual property management Heath Schiemer, Superintendent Newcastle Workshop 38

39 Business Model continued Service Project management Engineering Project delivery Manufacturing Asset management Industrial maintenance Minor capital works Turnarounds/shutdowns Process technology Capability Engineering, procurement and construction management (EPCM) Pre-project studies, front-end engineering and design (FEED), detail design and shop detailing Engineering, procurement, construction management and commissioning Multi-discipline fabrication, repair and refurbishment Development and implementation of operations and maintenance strategies Management and execution Integrated engineering, procurement and construction Outage planning, management and execution Integration and management 39

40 Outlook Order book Budgeting for strong growth in revenue and earnings this financial year Extensions to Rio Tinto Alcan Gove and Queensland Alumina contracts UGL Resources order book Q109 $712m Immediate pipeline Significant liquefied natural gas opportunities in Australia Alliance over five years with oil and gas major to manage turnarounds in Asia Further asset services contract extensions at major projects FY08 FY07 FY06 FY05 $289m $228m $252m $905m 40

Moranbah Project Completion first quarter of 2010 calendar year UGL Resources has $376m share in $683m alliance with Bilfinger Berger and BGC Capacity of 330,000 tonnes of ammonium nitrate per

41 Moranbah Project Completion first quarter of 2010 calendar year UGL Resources has $376m share in $683m alliance with Bilfinger Berger and BGC Capacity of 330,000 tonnes of ammonium nitrate per day Satisfying performance to date as we target shared incentives Opportunities exist for long-term maintenance and capital works relationship with Incitec Pivot Moranbah ammonium nitrate plant 41

42 Asia In final stages of negotiating first asset services contract in Asia Provision of turnaround management services over five years Opportunity to establish pan-asian asset services business in oil and gas Partnership with UGL Premas 42

43 Conclusion Core strength in managing asset and execution risk Focus on recurring revenue and bluechip client base positions us well through the cycle Major projects are performing well in terms of schedule, budget and riskmanagement Gove Alumina Refinery 43

44 UGL Infrastructure Richard Leupen, Managing Director & CEO

working predominantly in Australia and New Zealand

45 Who We Are Leading provider of services in water, power and transport systems sectors 2100 people working predominantly in Australia and New Zealand Growing international business in Asia, North America 45

Business Model Strengths We work on essential infrastructure: the things people have to have Engineering-led with specialist capability End-to-end solution: design and construct, commission, operate

46 Business Model Strengths We work on essential infrastructure: the things people have to have Engineering-led with specialist capability End-to-end solution: design and construct, commission, operate and maintain Risk management Rolling alliance-based contracts Technology partners Opportunities Extracting full value from transport business Consolidation of operations under UGL Infrastructure brand Ongoing shift of delivery model towards capped-downside work Louise Gardner, Project Services Manager 46

Growth Strategy Geographic diversification Breakthrough in North America with ATCO Electric alliance Asia: Hong Kong, Singapore, Malaysia, Thailand New Zealand: focus on larger projects Middle East

47 Growth Strategy Geographic diversification Breakthrough in North America with ATCO Electric alliance Asia: Hong Kong, Singapore, Malaysia, Thailand New Zealand: focus on larger projects Middle East Existing business Possible desalination alliance with Befesa Rail infrastructure: replicate full-service model of power transmission business with Balfour Beatty Market-share expansion in power generation: partners include GE and Mitsubishi PARR Alliance, North Head 47

48 Outlook Order Book On track for strong growth in 2010 financial year Tamworth Regional Council: waste-water upgrade alliance Transpower: extension of maintenance services contract BHP Billiton signalling UGL Infrastructure order book Q109 $2,656m Immediate pipeline Negotiating a third GE gas turbine installation project Further construction services work in New Zealand power Finalising terms of Airport Link contract FY08 FY07 $1,557m $2,144m Tendering pipeline Northern Link: $300m alliance Hunter Water $700m alliance program PSP alliance $250m re-bid Auckland re-signalling contract FY06 FY05 $332m $1,260m 48

Operations Major projects ATCO Electric: C$700m alliance Melbourne Water: $600m in alliances Trackstar: $700m program Powerlink: ongoing alliance program North South Bypass Tunnel: $200m Contract

49 Operations Major projects ATCO Electric: C$700m alliance Melbourne Water: $600m in alliances Trackstar: $700m program Powerlink: ongoing alliance program North South Bypass Tunnel: $200m Contract issues East Link: in contract close-out phase No further impact expected from issues at Revesby and Perth Metro Risk management processes improved in transport business North South Bypass Tunnel 49

North America C$700m ($800m) ATCO Electric alliance signed in August was significant entry into North American market Now have a team on the ground able to explore further opportunities independently

50 North America C$700m ($800m) ATCO Electric alliance signed in August was significant entry into North American market Now have a team on the ground able to explore further opportunities independently and through Balfour Beatty relationship Minor market-share in North American infrastructure would have a significant positive impact on our revenue Isolated and fragmented nature of North American power networks presents shortterm opportunity Longer term opportunities in transport and water ATCO Electric Alliance, Canada 50

Conclusion Infrastructure spending is a long trend much of which is essential to catch up with under-investment International markets are opening up and represent a sizeable

51 Conclusion Infrastructure spending is a long trend much of which is essential to catch up with under-investment International markets are opening up and represent a sizeable opportunity for us to export our expertise Anticipate ongoing sales and earnings growth, underpinned by growing and diversifying order book Trackstar, Beerburum to Landsborough 51

52 Risk Management David Simpson, Chief Legal Officer

53 Risk Management Policy ASX principle: companies should establish a sound system of risk oversight and management and internal control UGL risk management umbrella At UGL, Chief Legal Officer sets minimum contract terms for key risks and mitigation measures Divisional legal counsel must review all contracts: departure from terms requires group approval Projects Estimating Legal Finance People Safety Investment Final contract execution resides within head office 53

Group Tender Committee GTC reviews tenders: outside financial delegations of relevant chief executive in a country in which UGL has not worked for five years involves significant or unusual design or

54 Group Tender Committee GTC reviews tenders: outside financial delegations of relevant chief executive in a country in which UGL has not worked for five years involves significant or unusual design or process risk does not comply with Minimum Contract Terms Policy allows an unacceptably low margin involves a shut-down and work in excess of $5m allows negative cash-flow or excessive bank guarantees involves a new joint venture or appointing another party as UGL s agent 54

Other Matters Audit Internal audit function established Group policies and directives reviewed and communicated Insurance Appointment of Corporate Counsel, Insurance & Projects March 2008 Marsh

55 Other Matters Audit Internal audit function established Group policies and directives reviewed and communicated Insurance Appointment of Corporate Counsel, Insurance & Projects March 2008 Marsh acting as global broker, engaged with businesses to ensure minimum financial ratings for insurers Training Programs with Freehills and Mallesons Stephens Jaques for continuous training for UGL employees 55

56 Conclusion We ve been developing our risk management model over many years and through many cycles UGL s risk management polices ensure responsible revenue and earnings growth We would rather refuse to bid than take on unnecessary risk 56

57 Finance Update Phil Mirams, Chief Financial Officer

58 Overview Balance sheet Adequate available facilities High interest cover Gearing 21% at June 30 $US250m long-term fixed-rate notes Debt maturity profile ($m) Debt maturity Average maturity 5.3 years Sufficient undrawn capacity to replace 12-month obligations Short-term debt drawn because its cheaper Adequate undrawn capacity to replace 12- month obligations Credit exposure Minimal debtors risk Government and blue-chip clients Days sales outstanding: 34 days at September > > > > > > 10 Years Limits Drawn 58

59 Currency Earnings Positive translation impact on US operating earnings Negative translation impact on US interest Minimal NPAT impact Funding Stronger USD translates to higher nominal AUD debt Impact on balance sheet ratios $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 USD/AUD exchange rate ( ) $0.10 $- Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 59

60 Cash-flow & Profit Performance Q1 cash-flow seasonally weak Redoubled focus on cash conversion Cash management improving in Q2 Constraints Timing of cash receipts in FY08 WIP impact of larger projects Rising days sales outstanding probable Forecast Expect usual weighting toward H2 Higher invoicing of WIP in Q3 Strong FY operating cash-flow Underlying NPAT ($m) H1 H2 Total H2 share FY % FY % FY % FY % FY % 60

61 Capital Management Debt facilities Dividends per share ( ) ~$100m of facilities at June 30 converted to bank guarantees 58 Assessing renewal of ~$100m of bank debt Rising funding costs Dividend Ample franking credits Expect to maintain payout ratio Dividend H1 Dividend H2 Special Dividend 61

62 Conclusion Richard Leupen, Managing Director & CEO

Conclusion Well-positioned in slowing economic cycle Conservative balance sheet Recurring revenue streams Diverse earnings base Guidance for FY09

63 Conclusion Well-positioned in slowing economic cycle Conservative balance sheet Recurring revenue streams Diverse earnings base Guidance for FY09 unchanged Earnings growth within range of analyst expectations (10% to 20%) Expect to maintain pay-out ratio; dividends fully-franked UGL Rail workshop 63

64 Discussion Questions please 64

66 Important Notice This presentation and any oral presentation accompanying it: is not an offer, invitation, inducement or recommendation to purchase or subscribe for any securities in United Group Limited ( United Group ) or to retain any securities currently held; is for information purposes only, is in summary form and does not purport to be complete; is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor, potential investor or any other person. Such persons should consider seeking independent financial advice depending on their specific investment objectives, financial situation or needs when deciding if an investment is appropriate or varying any investment; may contain forward looking statements. Any forward looking statements are not guarantees of future performance. Any forward looking statements have been prepared on the basis of a number of assumptions which may prove to be incorrect or involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of United Group, which may cause actual results, performance or achievements to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward looking statement reflects views held only as of the date of this presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, United Group does not undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation and any oral presentation accompanying it. To the maximum extent permitted by law, United Group and its related bodies corporate, and their respective directors, officers, employees, agents and advisers, disclaim and exclude all liability (including, without limitation, any liability arising from fault or negligence) for any loss, damage, claim, demand, cost and expense of whatever nature arising in any way out of or in connection with this presentation and any oral presentation accompanying it, including any error or omission therefrom, or otherwise arising in connection with any reliance by any person on any part of this presentation and any oral presentation accompanying it. 66

Richard Leupen, Managing Director & CEO UGL Delivering Sustainable Growth. Macquarie Capital Securities Conference May 2008

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