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Shareholder Review 2011UGL Limited ABN 85 009 180 287

www.ugllimited.com

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UGL country presence

Contents

2 Welcome4 Tenyearsofprofitablegrowth6 Yearinreview8 Driversforgrowth

10 FinancialStrength12 SustainableEarnings14 SectorFocus18 BusinessPositioning22 MarketLeadership26 RiskManagement

31 Corporatedirectory 32 Financialcalendar

UGL is a part of your every day life.

UGL is a global leader in outsourced engineering, asset management and property services that enhance the environment in which we live.

UGL plays an integral part in shaping the environment of the communities in which we operate – from delivering clean water to your taps, devising the optimal environment for you to work in, building the trains to get you there on time, to designing the facilities that allow you to heat your homes, UGL is there. Every day.

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With operations across 14 countries worldwide and more than 46,000 employees and sub-contractors, we play an essential role in helping customers maximise the value of their investments.

We provide customised solutions to meet the needs of public, private, commercial, government and industrial customers in four complementary service lines: our engineering, operations and maintenance businesses across Infrastructure, Rail and Resources; and our Services business that brings together our offerings in outsourced business processes, corporate real estate and facilities management.

The complementary nature of these services means UGL can offer local customers tangible and tailored solutions to shape, develop or enhance their asset’s performance, over the

life of the asset – from seamlessly managing Ivy League campus facilities to support the finest learning environments, delivering and maintaining more fuel efficient locomotives to transport a country’s vital resources, to managing community and business-critical ATM networks, UGL is there. Every day.

The company’s international presence, financial strength and focus on innovation, combined with the wide-ranging experience and expertise of our employees, are the assets on which UGL relies to deliver solutions that enhance our daily lives.

UGL is a part of our lives every day.Welcome to UGL.

• poWER • WATER • RAIL • MInInG • oIL & GAS • pRopERTy • TRAnSpoRT • coMMUnIcATIonS

UGL operates in the following sectors:

Shareholder Review 2011 | 1

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Welcome from the Managing Director & cEo

Delivering GrowthAs Managing Director and cEo, I would like to welcome you to UGL’s 2011 Shareholder Review.

I’m pleased to report that Financial year 2011 saw UGL increase net profit after tax to $158.5 million, a 10 per cent increase on the prior year, with underlying earnings of $164.4 million* and earnings of 99.0 cents per share.

UGL’s business continues to mature and we are emerging as a leading outsourced services business with an expanding international footprint. Our strong operating and financial performance reflects the reliability and robust nature of our business model.

We have held to our strategy of partnering with blue-chip companies and government departments, working with the world’s leading technology providers, building our recurring revenue base, and targeting sectors that have long term growth characteristics. As a result, we are pleased to report our tenth consecutive increase in full year net profit after tax which is another record performance for UGL.

Excellence in safety is a never-ending focusThe safety of our people remains UGL’s most important priority. This year we have raised the bar in terms of safety management and invested heavily in new systems, processes and training under our USafe program. UGL is one of Australia’s safest employers and we intend to remain so for the well-being of our people.

We are further developing the UTrac safety database so we can proactively measure lead indicators to identify safety improvements and implement actions accordingly.

We continue to retain the services of a world renowned safety expert who is engaging with our teams to develop sustainable safety improvement strategies throughout the world.

In excess of 90 per cent of UGL’s workplaces are lost time injury free. The lost time injury frequency rate (LTIFR) for UGL’s operations was steady at 1.4, and globally the LTIFR rate was 3.9. Our North American business, which employs some 32,000 people, showed a steady improvement.

This year we increased the size of the UGL team by 8 per cent to 46,000 people. As we attract new people to the group, it is essential that we show them that their safety is our first priority.

* Adjusted for amortisation of acquired intangibles

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HighlightsThroughout the year, all of UGL’s businesses strengthened their operations, with over $4 billion worth of new project wins, continued international expansion, and largely successful project execution.

UGL Infrastructure built on its leading position in the power sector with new projects to upgrade and construct power projects in New Zealand and Queensland. The business also secured new projects in the water, transport and telecommunications sectors.

UGL Rail performed exceptionally well. We were awarded a third extension to the OSCar passenger rail build project where we are building a further 25 safe and reliable rail cars for the Sydney passenger rail network, and through the MTM franchise, we strengthened the performance of the Melbourne passenger rail network which is now consistently meeting its performance hurdles. We also won a number of new projects to supply freight wagons and locomotives to customers in the transport, coal and iron ore sectors.

For some time UGL Rail has looked to broaden its manufacturing base in order to compete over the longer term. During the year we were pleased to formalise a joint venture with India’s leading freight rail car manufacturer, Texmaco. Together we are establishing a manufacturing facility in India to produce freight wagons which will allow us to compete globally and remain competitive domestically.

UGL Resources was successful in securing a number of new projects and strengthening its base of maintenance related contracts. Despite some challenges in isolated projects, which we are addressing, the business has excellent growth potential.

UGL Services delivered stable and predictable earnings and revenue. We strengthened our presence in the Middle East by signing a joint venture to provide facilities management and property services in Saudi Arabia. In China we have doubled our workforce to 500 people providing property related services and energy management solutions. In North America, we have greatly improved our corporate real estate services business. Our Asian and Australian businesses also gained market share.

Our strong order book gives us confidence in the futureUGL’s order book remains solid at $8.2 billion with over 73 per cent of the order book made up of long term recurring maintenance projects. Additionally, we have a further $1.1 billion worth of work in the preferred tenderer stage, and almost $8 billion of weighted and qualified opportunities.

Our order book remains one of our key strengths, comprising more than 2000 individual contracts providing diversification and reducing risk across all of our key sectors. We have continued a deliberate strategy of only securing

projects with acceptable commercial risk profiles – thus maintaining the quality of our order book. We have not compromised our risk management process simply to deliver revenue and order book growth. As always, we are taking a longer term view and protecting UGL’s future earnings pipeline.

All of our businesses are forecasting growth in the coming year. We expect that the trend to outsource non-core services such as property and real estate services will grow, and we are witnessing continued investment in the Australian resources sector. Also, infrastructure investment in some sectors such as power, transport and communications is expected to increase.

UGL is cementing its future as a proven and dependable services company. The contribution from our team of 46,000 people has again been outstanding, and I would also like to thank our shareholders, customers and partners. UGL has a bright future.

Richard A LeupenManaging Director and cEo

10 Year Total Shareholder Return (TSR) UGL vs S&P/ASX 200

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UGL LimitedS&P/ASX 200

UGL LimitedS&P/ASX 200

June2000

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June2002

June2003

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UGL S&P/ASX 200

1-year 7.0% 11.7%

5-years 3.2% 2.4%

10-years 25.1% 7.4%

TSR


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Ten years of profitable growth

Earnings Per Share* (cents)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2001 2003 2005 2007 2009 2011

99.091.967.845.829.113.0

46,269People 42,39811,0997,8795,0123,690

50

100

150

200

0

Net Profit After Tax* ($m)

2004Acquisition of a major Asian Infrastructure business

2005Acquisition of a major Australian & NZ transport business

2002Acquisition of a major Australian Services business

2005Acquisition of a major Asian Services business


FinancialStrong, consistent and reliable financial performance and a robust balance sheet to support growth.

OperatingDiverse multinational, multi-sector operating platform across all our sectors.

SafetyUGL is one of Australia’s safest employers and we intend to remain so for the well-being of our 46,000 people.

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Earnings Per Share* (cents)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2001 2003 2005 2007 2009 2011

99.091.967.845.829.113.0

46,269People 42,39811,0997,8795,0123,690

50

100

150

200

0

2006Acquisition of a major US Services business

2007Acquisition of a major US Services footprint

2009Renamed to UGL

RiskUGL’s sustainable, balanced and proactive approach to managing risk is supported by robust systems and processes.

SustainabilityEnvironmental sustainability plays an integral role in UGL’s essential services business.

LocationsUGL operates across 14 countries covering more than 2,000 sites and 1,400 projects globally.


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year in review

Divisional overview

Group financial highlights

UGL Infrastructure UGL Rail

UGL Infrastructure has been operating across Australia, New Zealand and South East Asia as a provider of engineering and construction solutions to the infrastructure sector for more than 50 years.

our capabilities embrace engineering, design, supply, project management, construction, commissioning and ongoing maintenance of essential infrastructure. Through partnerships with international companies such as Alstom, GE, Balfour Beatty and Mitsubishi, UGL is able to offer its clients the world’s leading technology and best practice.

EBIT grew 6 per cent to $83.3 million and revenue was $1.1 billion .̂ The business has a growing pipeline of tendering opportunities in the power, transport and communications sectors and is well placed for growth this year.

Highlights & outlook• Revenue steady at $1.1 billion^ • Record EBIT of $83.3 million• Improved margin performance• Major projects secured in the water, power,

transport and communication sectors• Order book at $1.6 billion• Solid pipeline of new business opportunities

• Underlying net profit after tax of $164.4 million*, up 9 per cent

• Operating revenue of $4,583.6 million ,̂ up 5 per cent

• Secured $4.1 billion of new contracts and extensions

• Underlying earnings per share of 99.0 cents*, up 8 per cent

• Dividend per share of 70 cents fully franked – a record payout

• Healthy order book of $8.2 billion and solid opportunity pipeline

• Well placed for continued earnings growth in Fy2012

UGL Rail is Australia’s largest and most experienced provider of rolling stock and infrastructure solutions to the passenger, freight and rail systems sectors. The business has a growing presence in the Asian rail industry.

UGL Rail’s history dates back more than a century, and today has over 2,800 staff supplying, maintaining and managing rail technology.

The business combines many years of local expertise in each of its markets through partnerships with market-leading international technology providers such as GE, Mitsubishi and Alstom to deliver the best possible outcome for its clients.

UGL Rail performed exceptionally well during the year with revenue increasing 10 per cent to $1.2 billion ,̂ and EBIT by 53 per cent to $84.8 million. The business’ strong performance was driven by healthy activity levels across both the freight and passenger markets.

UGL Rail is well positioned for Fy2012 with a solid pipeline of tendering opportunities in freight and passenger markets and a growing international profile.

Highlights & outlook• EBIT up 53% to $84.8 million• Significant margin improvement• OSCar 3 continues to perform above expectations• MTM franchise in Melbourne performing strongly• Order book at almost $2.8 billion

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new contract wins and extensions

UGL Resources UGL Services

UGL Resources is one of Australia’s leading providers of project delivery and asset services in the mining and mineral processing, oil and gas, chemical and industrial processing industries.

UGL Resources is one of only a few companies in Australia capable of supporting customers throughout the entire asset lifecycle – from conceptual engineering design through to project management and construction, culminating in continuing asset management, shutdown services and industrial maintenance.

EBIT was $44.0 million with revenue increasing 22 per cent to $959 million .̂ Asset maintenance projects performed well and whilst some isolated projects impacted EBIT, UGL Resources continues to build its base of projects to generate solid recurring revenue.

Tendering opportunities with blue-chip customers in the oil and gas, coal and mineral processing sectors present significant growth opportunities this year.

Highlights & outlook• Revenue up 22% to $959 million^• EBIT of $44.0 million – strong recovery in the

second half• Multiple long term maintenance projects awarded

in the coal and alumina sectors• Order book steady at $1 billion – made up primarily

of recurring projects

UGL Services is one of a limited number of global companies able to provide end-to-end outsourced corporate real estate and facilities management services to corporations, governments and institutions in Australia, New Zealand, Asia, North America and the Middle East.

EBIT increased by 7 per cent to $76.5 million* and revenue was steady at $1.3 billion. Improved performance was driven by corporate real estate services, strong contributions from the Asia-Pacific region, and an increase of activities in the Middle East.

The trend for governments and large corporations to outsource non-core services is increasing, and by continuous investment in leading edge, innovative systems and processes, UGL Services is positioning itself to fulfill this demand both at a local and a global level.

Highlights & outlook• Revenue steady at $1.3 billion• EBIT grew 7% to $76.5 million*• Successful expansion in the Middle East and China• Excellent performance from Asia-Pacific operations• Order book of $2.8 billion – supported by multiple

growth opportunities

$4.1 BILLION In nEW WInS AnD ExTEnSIonS

$0.9 billion

AMERIcAS

AUSTRALIA & NZ

ASIA & MIDDLE EAST

$2.6 billion

$0.6 billion

^ Revenue includes Joint Ventures * Adjusted for amortisation of acquired intangibles


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Driving growth through financial strengthOur financial strength comes from our diversity

• Strong balance sheet • Low capital intensity • Robust cash flow • Flexibility to grow

Drivers for growth

Driving growth through market leadershipOur ability to combine and tailor our services to suit our customers’ unique requirements

• People • Safety • Technology partnerships • Intellectual property • Outstanding customer service

Driving growth through sustainable earningsOur business model has been structured to support a consistent and growing earnings base

• Balanced recurring revenues • Long term capital works alliances • Diverse earnings streams • Healthy order book • Solid opportunity pipeline

Driving growth through business positioningOur priority sectors are those in which demand is high and steady growth is predicted

• Exposure to long term growth trends • Significant market opportunities • Strong technical component • World class technology

Driving growth through risk managementWe take a proactive approach to managing risk

• Robust systems and processes • Alliance and cost-plus contracts • Blue-chip and government clients • Sensible, balanced trading terms

Driving growth through sector leadershipWe enable our clients to focus on their core business

• Oil and gas, mineral processing • Transport and rail engineering • Infrastructure and the environment • Property management

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Strong balance sheet p10

Low capital intensity p10

Robust cash flow p11

Flexibility to grow p11

over the past decade, UGL’s strong balance sheet and prudent financial management has supported significant development across the business.

The quality of the company’s customer base is no better reflected than in the strength and consistency of our operating cash flow.

St Marys Water Recycling Project p23

An integral part of the local community – Ballarat Workshop p24

Delivering, for Rolls-Royce, one of the largest first quarter real-estate leasing agreements in the United States p25

Property services at an Ivy League University p25

UGL recognises the impact its projects can have on the local communities and takes its responsibilities seriously.

over 60 years of experience helping educational institutions with capital planning and renewal programs in the United States.

With international demand for energy growing, UGL Resources is working with its customers to help meet this demand and secure our region’s energy future.

A world leading large-scale project producing very high quality recycled water to both conserve drinking water and enhance river health.

The core of UGL’s essential services business model is to operate in sectors and services which have low capital expenditure (capex) requirements or ‘low capital intensity’.

Balanced recurring revenues p12

Solid opportunity pipeline p13

Diverse earnings streams p12

Healthy order book p13

UGL’s revenues of $4.6 billion are supported by a strong focus on essential maintenance and recurring services.

The company’s strength and diversity is helped by the quality of our order book, which currently stands at $8.2 billion.

The company is well placed to benefit from several long term growth trends.

UGL’s diversified business model across a number of key growth markets has resulted in the company achieving a consistent and reliable earnings stream over an extended period of time.

Singapore Sports Hub p19

Sustainable energy solutions at Verve Energy’s Kwinana Power Station p20

UGL delivers customer focused freight solutions for the long haul p21

Value-based contracting supports Australia’s oil and gas industry p21

UGL has been delivering leading freight rail solutions for over 100 years.

clean energy supply is one of the key environmental challenges of the 21st century.

UGL and GE, delivering integrated solutions and world leading eco-technology to the rail and resources sector p27

North Island Grid Upgrade – New Zealand p28

Blue-chip clients – Supporting the world’s leading Japanese car manufacturer in the United States p29

Industry leading Safety Management Systems p29

At UGL, we play a leadership role in workplace safety because we passionately believe in the cause of zero harm.

Alliance contracts are a preferred contract delivery model because they involve a collaborative process.

A reliable provider to government agencies p17

Outsourcing and township management for Jurong Town Council in Singapore – A pioneering project p16

CITIC Pacific Mining – Sino Iron project p15

OSCar 3 – An innovative approach to project management p17

Australia’s iron ore mining industry is expected to generate revenue of $49.5 billion in 2010-11.

In a highly competitive and mission critical environment, an industry leader must constantly and actively innovate to maintain its leadership position.

UGL’s objective when managing capital is to safeguard the ability of the business to continue.

FY06 FY07 FY08 FY09 FY10 FY11

2,273.4

2,685.5

3,573.2

4,843.74,583.6

4,359.1


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Over the past decade, UGL’s robust balance sheet and prudent financial management has supported significant development across the business.

During this time, UGL’s total shareholders’ funds have increased more than eightfold from $135.8 million to $1,165.9 million and dividends have increased from 10 cents to 70 cents per share.

UGL’s strong balance sheet allows us to operate effectively and pursue growth, while continuing to target a dividend payout between 65 and 75 per cent of earnings each year.

The core of UGL’s essential services business model has been to operate in sectors and services which have low capital expenditure (capex) requirements or ‘low capital intensity’.

UGL’s low capital intensity allows us to generate consistent and healthy levels of cash flow in order to support ongoing business growth, dividends to shareholders and a strong balance sheet.

It also provides UGL with considerable strength, flexibility and resilience in an uncertain world.

Strong balance sheet

Low capital intensity

Driving growth through Financial Strength

UGL’s financial strength comes through our diversity – diversity in our services, in our operational sectors, our geographical presence, and our leading technology partnerships.

Capex* / Sales^ (%)


1.0

0.9

0.6

0.7 0.7

0.8

* Capex is calculated on a net PP&E basis ^ Sales = operating revenue including UGL’s

share of joint ventures


520.8 596.2

1,056.01,119.0

1,158.4 1,202.3


520.8 596.2

1,056.01,119.0

1,158.4 1,165.9

Shareholders’ Funds ($m)

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The quality of UGL’s customer base coupled with upfront cash flow positive contract profiles produces strong, constant operating cash flows.

UGL targets a cash realisation rate of at least 65 per cent (revenue to operating cash flow) and regularly exceeds this due to contract terms, a hallmark of our business model.

This provides considerable financial strength and options for growth.

UGL’s objective when managing capital is to safeguard the ability of the business to continue as a going concern whilst providing adequate returns to shareholders and maintaining an optimal capital structure to reduce the cost of capital.

For over a decade, UGL’s focused business strategy and conservative approach to capital risk management has provided financial flexibility within the group in order to facilitate strong growth.

UGL will continue to conservatively manage our capital and gearing in order to support the ongoing development of the business.

Robust cash flow

Flexibility to grow

FY06

100%

Cas

h R

ealis

atio

n %

50%

FY07 FY08 FY09 FY10 FY11

57%

105%

98% 93%

113%

69%

130.2

171.3183.4

229.4

150.6

60.0

Operating Cash Flow ($m)

Gearing (%)**

** Gearing = net debt / (net debt plus equity)


24.1

31.0

20.822.5

16.8

13.3


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UGL’s diversified business model across a number of key growth markets has resulted in the company achieving a consistent and reliable earnings stream over an extended period of time.

For more than a decade, UGL has achieved consecutive increases in underlying full year net profit after tax through a considered focus on a variety of sectors, services, customers and geographies.

We continue to focus on risk management, talent, systems and operational excellence in order to deliver strong outcomes for customers as well as dependable earnings for our shareholders into the future.

Diverse earnings streams

over the past decade, UGL has grown from being a Western Australia-based resources construction company to become a diverse multinational, multi-sector outsourced services business.UGL’s business model has been structured to support a consistent and growing earnings base reducing susceptibility to fluctuations in market conditions. This effectiveness is demonstrated by our resilient performance during the recent global financial crisis.

A focus on a healthy order book, balanced recurring revenues, long term capital works alliances, diverse earnings streams, and a strong pipeline of opportunities continue this growth strategy.

Driving growth through Sustainable Earnings

Underlying NPAT* ($m)

UGL’s revenues of $4.6 billion are generated by a strong focus on essential maintenance and recurring services.

The strength of revenues is aided by the quality of customers and the recurring mix of projects across all sectors as demonstrated by the quality of our order book.

Balanced recurring revenues

Operating Revenue^ ($m)


2,273.4

2,685.5

3,573.2

4,843.74,583.6

4,359.1

^ Includes UGL’s share of joint ventures



78.7

92.7

136.1

150.3 151.1

164.4

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UGL’s strength and diversity is no better represented than in the quality of our order book, which stands conservatively at $8.2 billion. This represents signed contracts and secure ongoing activities, before considering other potential opportunities.

Much of the order book is comprised of long term recurring revenues from blue-chip customers, governments and institutions. In total, approximately 89 per cent of UGL’s order book is maintenance and services or alliance-style projects across the energy, rail, resources, property, transport and water sectors.

UGL is well placed to benefit from several long term growth trends, including the ongoing shift toward outsourcing of property services, long term investment in the Australian resources sector and the sustainable development of the rail, water and power sectors.

Over the past year, the weighted and qualified pipeline grew by 34 per cent to $7.7 billion, supported by a healthy near term pipeline including over $1 billion of work at the preferred tenderer stage and $1.4 billion in tenders submitted and in negotiation.

Healthy order book

Solid opportunity pipeline

Order Book^ ($m)

** Weighted and qualified excludes any opportunities with a go-get less than 25%

^ Includes UGL’s share of joint ventures


4,283 4,401

7,401

8,151

9,062

8,220

Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1

FY11FY10FY09

H2 H1H1H2H1H2H1FY11FY10FY09

4,070

4,938

6,158

4,417 4,570

5,763

6,857

5,572

6,158 5,764

4,417

3,794

4,570

5,643 5,7635,930

6,857

8,403

7,741

Weighted & Qualified Pipeline** ($m)


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Driving growth through Sector Focus

Sector Focus

UGL is a market leader in the Rail and Transport sectors; Sustainable and Environmental Design; Management Systems and Solutions; Water and Wastewater; Energy Supply and Management; Resources – particularly oil and Gas, Mineral processing; Facilities Management and corporate Real Estate.our clients choose us because we have the technical knowledge and the in-house resources to be able to reliably and seamlessly deliver cost-effective solutions that meet the challenges of the 21st century.

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Australia’s Iron ore mining industry is expected to generate revenue of $49.5 billion in 2010-11, compared with $15.5 billion in 2005-061. Approximately 98% of iron ore is used to make steel – a metal that underpins almost all the developed and developing world’s industrial activity. A number of industry sources have predicted a doubling in global demand for iron ore within the next decade, and UGL is well placed to support the growth in the industry.UGL’s “process plant-to-port” strategy is based on significant iron ore experience and delivers engineering, procurement, construction and asset management services across the full process chain. This includes mine development projects as well as all power, water, communication and rail transport needs.

UGL is currently in Western Australia’s pilbara region supporting CITIC Pacific Mining in the delivery of a number of essential pieces of infrastructure at its Sino Iron project. our in-house engineering resources, expertise across multiple technical disciplines and our niche completions capability have been key to our engagement on this project.

UGL is engaged in a number of capacities; to complete the construction and commissioning of a 51 gigalitre desalination plant, constructing the sub-station and transmission lines associated with the mine’s 450 megawatt Combined Cycle Power Station, whilst also completing the construction of the power station itself and facilitating its full commissioning.

UGL provides customers in the mining industry, such as CITIC Pacific Mining, with multi-disciplinary, end-to-end asset solutions. By doing so, we enable our clients to focus on their core business and support them as they reach their full-production potential.

CITIC Pacific Mining – Sino Iron project

1 IBIS World, “Iron ore Mining in Australia”. 2011 Australian Industry Report


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Sector Focus

outsourcing and township management for Jurong Town Council in Singapore – A pioneering project

The trends in Asia of both outsourcing and environmentally sustainable growth continue to offer opportunities for UGL to expand its essential services offerings. We recently renewed our managing agent contract with Jurong Town Council in Singapore for another three years with effect from February 2011.

As part of the Jurong Group Representation Constituency, Jurong Town Council (JRTC) has a size of almost 62,500 property units including housing, shops and offices.

JRTC was the first township in Singapore to experiment, recommend and convince the town council to replace the light fittings for the entire town under Jurong Township with Light Emitting Diode (LED) lightings. A total of 95,000 lighting points were retrofitted with LEDs. The adoption of LED is expected to save up to S$1.1 million in electricity bills annually for the town council. Moreover, the shelf life of LED lighting is more than five times that of a fluorescent lamp, which further reduces maintenance and replacement cost.

The LED re-lamping project was registered as a programmatic clean Development Mechanism (pCDM) project activity with the United Nations – the first public sector pCDM project activity in Singapore.

Following the footsteps of JRTC to adopt LED for public housing lightings, 12 other Town councils have committed to switch to this energy-efficient option and engaged UGL Services to coordinate and register their projects as pCDM project activities.

This energy-saving project is a perfect example of how to reduce energy consumption and costs while improving sustainability. Town-wide implementation of such energy efficient LED will contribute significantly to emission reductions and sustainable development in Singapore.

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In a highly competitive and mission critical environment, an industry leader must constantly and actively innovate to maintain its leadership position. Australia’s reliance on first-rate, safe, efficient rail infrastructure to move people, goods and resources across its vast expanse continues to grow.Railcorp is Australia’s most populous state’s passenger train operator. They are responsible for the safe operation, crewing and maintenance of all of new South Wales’ passenger trains and stations, with more than 304 million journeys1 made on its networks every year. As a new South Wales government agency delivering services to the broader community, the selection of a reliable private partner to help deliver safe, cost-effective and efficient rail services is of critical importance.

UGL has multiple contracts with Railcorp, under a variety of contract models. The $225 million Digital Train Radio System (DTRS) project with

UGL Infrastructure consists of design, construction and maintenance of a complete communication network for train safety and control throughout RailCorp’s entire electrified rail network.

UGL is also responsible for deployment of a sophisticated network Management System which allows detailed monitoring and interrogation of all network elements from the network operations centre, or by remote dial-in for maintenance support.

UGL’s contract includes training of Railcorp engineering and field staff enabling them to manage and control the DTRS network. A long term technology supply contract with logistic services and maintenance is also included.

Through this contract and its other innovative freight and passenger train solutions for Australia’s rail industry, UGL continues to be regarded as the leading, safe and reliable provider to government and industry alike for rail solutions.

1 Railcorp 2009-2010 Annual Report

oScar Stage 3 is a $474 million contract to deliver 99 modern double deck passenger carriages for cityRail’s outer suburban services on the Sydney network. The contract’s outstanding success can be attributed to UGL’s alliance project management arrangement with Railcorp which delivered the first train set five weeks before schedule.

oScar Stage 3 trains have been delivered not only on-time or early, but with very few variations, a much improved and consistent quality of build and no disputes. The project also remains under budget and has been successfully delivered against a very tight timescale. These achievements have led to contract extensions to manufacture a further 27 cars in addition to the original order of 72. The oScar Stage 3 project was recently nominated for the ‘Project Management Achievement Awards’ for 2011.

oScar 3 – An innovative approach to project management

A reliable provider to government agencies


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Driving growth through Business positioning

Business positioning

The international market’s appetite for resources; the developing world’s need for energy to power its transformation; global urbanisation and the accompanying pressure on transport networks; the continued trend towards outsourcing of non-core functions to achieve greater efficiencies; the urgent need for communities, industry and government alike to conserve precious natural resources; and the inherent requirement for industry and government to deliver their products and services to the community in an environmentally responsible and sustainable way; these are some of the key global economic and environmental imperatives that drive UGL’s strategic positioning.

Our priority sectors are those in which demand is high, steady growth is projected and where the issues are complex or require cutting-edge technology, resources and rare expertise – all clear market differentiators where UGL excels.

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UGL is a leader in Sports and Stadium Facilities Management in the United States, and we have successfully extended this expertise into other international regions.The Singapore Sports Hub is a fully integrated sports, entertainment and lifestyle hub in Singapore. The Hub is the largest sports facilities infrastructure public-private-Partnership (PPP) project in the world. It is also Singapore’s largest and flagship PPP project entailing a 25-year Design, Build, Finance and operating contract.

UGL is part of the Sports Hub Pte Ltd consortium (formerly known as Singapore Sports Hub Consortium) that has been contracted by Singapore Sports council to demolish the existing stadium, build the new 35-hectare Sports Hub and operate it on a 25-year lease.

Besides being an equity partner of the consortium together with Dragages, HSBC Infrastructure Fund (UK) and Global Spectrum Asia, UGL Services provides integrated facilities management services and lifecycle management to the existing Singapore Indoor Stadium and the remainder of new Sports Hub valued at approximately S$600 million over the 25-year term.

With a targeted completion date of 2014, the new Sports Hub will include a 55,000-seat stadium with a retractable roof, a 6,000-seat aquatics centre, a sports institute and a water sports centre.

Through this flagship project, UGL Services is set to engage in other ppp opportunities in Asia to deliver long term and sustainable growth for the company by positioning itself as the preferred facilities management partner for large-scale projects in Asia.

Singapore Sports Hub


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Business positioning

Clean energy supply is one of the key environmental challenges of the 21st Century.Kwinana Power Station, owned by Verve Energy, is unique in Western Australia in that it can burn three fuels, coal, gas and oil, thereby reducing the area’s reliance on coal and limiting the environmental impact of the power station.

UGL was contracted by Verve Energy to undertake the Kwinana High Efficiency Gas Turbine Project (HEGT) at Kwinana Power Station because we have the unique ability to leverage our areas of expertise and deliver reliable and technically complex solutions that meet today’s environmental standards.

The overall project scope envisages the replacement of existing generation assets with a nominal gross total of 200 megawatt of new plant. The HEGT Project Works comprises 2 x General Electric (GE) LMS100 gas turbines of nominal 100 megawatt output each and the Gas Turbine Generator (GTG), including auxiliaries, generator, turbine and DcS.

The benefit to the client is that they have a single supplier, UGL Infrastructure, who has the integrated ability to provide all the engineering, design, procurement, construction, installation, commissioning and testing of the complete HEGT Works (GTG and Balance of Plant), including all mechanical, civil, electrical, control and other services required.

Sustainable energy solutions at Verve Energy’s Kwinana Power Station

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UGL delivers customer focused freight solutions for the long haul

UGL has been delivering leading freight rail solutions for over 100 years.In 2010, UGL Rail successfully delivered 10 high performance c44Aci locomotives to support xstrata’s growth goals of meeting higher export targets from the Hunter Valley region of New South Wales in Australia. UGL Rail’s partnership approach in delivering these locomotives has now enabled xstrata to have full control over their coal supply chain, from mine to port.

The success of this project has led to a contract extension of an additional 10 c44Aci locomotives and a 10-year maintenance agreement to support their ongoing fleet operation.

Value-based contracting supports Australia’s oil and gas industry

UGL Resources is supporting Esso Australia’s oil and gas operations in Victoria through the provision of multi-disciplinary maintenance and minor project services. These services are being delivered under a 7-year General Maintenance Services and Field Managed Modifications contract, awarded to a joint venture between UGL and KAEFER in July 2010.The first 12 months of this contract have seen the UGL-KAEFER joint venture establish a core team working across both offshore and onshore facilities, delivering safe shutdown and general maintenance projects.


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Driving growth through Market Leadership

Market Leadership

clients rely on UGL to help them meet some of their biggest challenges – sustainable management and development of assets and resources that drive both local and global economies.The mainstays of the market leading value provided by UGL for our customers are: the variety of service delivery models we can operate under; our considerable in-house resources and the expertise of our people; our technology partnerships; the strength of our global network brought to bear in local delivery; our ability to combine and tailor the scope of our service offerings to suit the customers’ unique requirements; our commitment to meeting our customers’ needs as shown by our delivery track record; and our industry leading safety systems and standards.

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In 2007, Sydney Water contracted Deerubbin Water Futures [UGL Infrastructure, GE Water and process Technologies and Mcconnell Dowell Constructors (Aust)] to build the St Marys Water Recycling Project in western Sydney.This is believed to be the world’s first large-scale project producing very high quality recycled water to both conserve drinking water and enhance river health.

The $209 million project, launched in October 2010, takes tertiary treated wastewater from existing treatment plants at St Marys, Penrith and Quakers Hill and further treats it at the new St Marys Water Recycling Plant. More than 50 kilometres of new pipelines were built as part of the project to link the plants and carry concentrate waste from the water recycling process.

Using reverse osmosis and ultrafiltration technologies, pre-treated wastewater is treated at the St Marys plant to a standard similar in quality to drinking water.

The plant produces up to 50 megalitres/day or 18 gigalitres/year of highly treated recycled water which is pumped to penrith and

released to the Hawkesbury Nepean River. This enables water releases to the river from Warragamba Dam, Sydney’s major water supply, to be saved for drinking. The project also reduces the volume of nutrients discharged to the river, which benefits river health.

The new water recycling plant has so far exceeded expectations on water quality, achieving far lower concentrations (about 50% less) than the targets set for ammonia, nitrogen, total oxidised nitrogen, total nitrogen and total phosphorus.

UGL, as the majority proponent of the Deerubbin Consortium, led the successful delivery of the project through a strategic technology partnership with GE Water and process Technologies. UGL integrated GE’s unique technologies in the construction of the St Mary’s Water Recycling plant and continues to work in partnership with GE as part of the Deerubbin consortium operating and maintaining the plant for the next 10 years.

The project is an excellent example of the strength of UGL’s partnerships and the success of the complementary people and skills of the Deerubbin consortium.

St Marys Water Recycling Project


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An integral part of the local community – Ballarat Workshop

UGL recognises the impact its projects can have on local communities and we take our responsibilities seriously through sound environmental management, economic development and community involvement.The Ballarat Workshop provides overhaul and maintenance services to Metro Trains Melbourne and yarra Trams. The Ballarat Workshop is also currently subcontracted by Alstom to fit out 19 new x’Trapolis™ trains that Alstom is manufacturing and delivering to the Department of Transport, Victoria. (X’Trapolis™ is a trade mark of ALSTOM).

The site has a long rail history, with the Workshop originally constructed in 1917. It passed from State Government control in the 1990s to Alstom Australia Limited which leases the site to UGL.

There are 130 permanent and 40 fixed-term employees on site, consisting of a mixture of trade and non-trade roles.

The impact of the Ballarat Workshop on the local economy is significant, with up to 10 indirect roles in local businesses flowing on from each person employed by UGL Rail.

Ballarat Workshop was recently recognised for its service in the local community winning the United Way Corporate Volunteers Award. This award was presented for volunteer services to the community undertaken by UGL Rail.

The management team at Ballarat is also very connected to the local community with active involvement with groups such as The committee for Ballarat, as well as receiving a nomination for the Ballarat Business Award for 2011.

UGL’s ongoing presence in Ballarat continues to support regional business and we are very proud of our commitment to providing opportunities for the local community.

Market Leadership

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property services at an Ivy League University

With over 60 years of experience helping educational institutions with capital planning and renewal programs in the United States, UGL has developed unique and leading Facilities Management solutions for the education sector to extend the life and enhance the value of its assets and create environments that inspire staff and students alike.With several leading tertiary institutions in its portfolio, including Harvard University, in 2010 UGL Services secured the contract for custodial services, specialty cleaning services and light duty maintenance at another leading Ivy League University.

This institution is recognised as one of the world’s leading research and teaching institutions. Located in palo Alto, california, its faculty holds more than 50 Nobel Prize and Turing Awards. The campus covers 8,180 acres, 4.5 million square feet and 225 buildings.

Just as these institutions lead in education and developing our future innovators, UGL Services is committed to using the latest innovations in our delivery. UGL’s GreenClean program combines certified chemicals, tools, processes, training, service and support to provide the clean, appealing and healthy work environment that is essential in attracting and retaining students, faculty and staff, as well as reducing student and faculty illness and extending the life of the asset.

UGL continues to be a leader in the recovering corporate Real Estate market in north America. our north American brokerage team represented Rolls-Royce, a global provider of integrated power systems and an industry-leading aircraft engine-maker, in a long term leasing agreement to occupy 404,000 square feet of office space in Indianapolis, IN now known as the Rolls-Royce Meridian center. This noteworthy transaction was one of the largest leasing agreements reported in the first quarter of 2011 in North American markets, and culminates a two-year relocation and consolidation project.

Delivering, for Rolls-Royce, one of the largest first quarter real-estate leasing agreements in the United States


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Driving growth through Risk Management

Risk Management

UGL has a proactive approach to managing risk and this is a key driver of operational performance and continuous improvement.We manage risk through the careful selection of partners and clients, the diversified nature of our operations, the preference for alliance contracting models where possible and appropriate, and the market leading safety systems we adhere to. These are deliberate strategies to deliver sustainable growth and stability for our shareholders and our employees.

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The sustained growth of the resources sector and the sheer scale and size of the projects involved continue to offer opportunities for UGL to bring its exceptional multi-sector expertise and technology partnerships to bear in delivering truly innovative integrated solutions for our clients.UGL Rail’s partnership with GE Transportation delivers world leading green technologies to our freight customers. The Evolution Series Locomotive is an example of our ability to integrate innovative technology to produce outstanding products for our clients. Introduced to the Australian market in 2008 to Rio Tinto, this locomotive delivers an incredible combination of power, performance and efficiency.

Its use allows resource sector clients to deliver their products to port in a cleaner and greener way.

A closer look at the Evolution Series Locomotive reveals GE engine technology that delivers savings in fuel consumption and maintenance costs, whilst greatly reducing the impact on the environment. The 12-cylinder diesel engine produces the same 4,400 HP as its 16-cylinder predecessor but with less fuel. It delivers efficiency, lower emissions and extended overhaul intervals. Utilising enhanced cooling and higher-strength materials, the engine also delivers dramatically improved reliability that allows for future increases in power and efficiency.

The Evolution Engine has been UIC certified, compliant with the stringent demands of UIc Stage IIIa emissions standards. Through this and many other examples, UGL is delivering cutting-edge, environmentally sustainable solutions to the rail and resources industry.

UGL and GE, delivering integrated solutions and world leading eco-technology to the rail and resources sector


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Risk Management

Alliance contracts are a preferred contract delivery model because they involve a collaborative process that aims to promote openness, trust, risk – and responsibility sharing – and the alignment of interests between clients and contractors. These often allow more innovative solutions to emerge as the parties aren’t encumbered by risk apportionment concerns throughout the project.The north Island Grid Upgrade Project is one of New Zealand’s largest electricity transmission projects and will help to provide a secure, and lasting, electricity supply to the upper north Island.

The northern Grid Alliance is made up of Transpower NZ LTD, and a joint venture between UGL and Balfour Beatty. It is contracted to design and build the 400 kilovolt overhead transmission line.

The project includes the erection of 426 towers, including seven monopoles, and the decommissioning and removal of an ageing 110 kilovolt line.

construction work is progressing well with over 200 towers erected and the project is on target to meet the completion in 2012.

The northern Grid Alliance was recently nominated in the prestigious national Deloittes Energy Awards in recognition for their outstanding work in environmental management on the project, in addition to gaining a number of industry safety awards.

North Island Grid Upgrade – New Zealand

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Industry leading Safety Management Systems

The diversity and quality of UGL’s client base is one of the many factors that differentiates UGL from its competitors. UGL Services provides Total Facilities Management and Capital Project Management services to Toyota Motor Sales, U.S.A. (TMS), Toyota Motor corporation’s U.S. sales and marketing arm. As their service provider, UGL Services is expected to lead all efforts as the subject matter expert using new and innovative methods to deliver best-in-class service.

The TMS facility portfolio is comprised of sales and marketing, vehicle and parts distribution facilities at 44 locations including: office buildings – maintained to class A building standards; warehouses; technical training areas (classrooms and training service garages); and vehicle processing facilities. It spans 1,600 acres of property; 8.3 million square feet; and 104 buildings. Innovation and sustainability are key features in our delivery program including gain sharing, minority supplier partnerships and an overall reduction of impact to the environment.

At UGL, we play a leadership role in workplace safety because we passionately believe in the cause of zero harm.Our Health, Safety, Security and Environment (HSSE) approach uses leading and lagging indicators to manage safe behaviour, safety leadership and safe work methods. This approach has seen us achieve outstanding results across the business, with an industry leading total recordable injury frequency rate of below 4.0 per million hours worked. Statistics such as 9 years lost-time-injury free (LTIF) at Incitec Pivot’s

Phosphate Hill Fertiliser Facility, three million man-hours LTIF at Lynas corporation’s Advanced Materials Plant in Kuantan, Malaysia and 1.5 million man-hours LTIF at Dyno Nobel’s Moranbah Project speak for themselves.

our USafe program strives for zero harm. We manage HSSE through strategies integrated with our quality endorsed systems, and this year, we have teamed up with a leading international academic to further develop our innovative and industry leading behavioural-based health and safety approach.

Blue-chip clients – Supporting the world’s leading Japanese car manufacturer in the United States


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www.ugllimited.com

To help us minimise our paper usage and our impact on the environment, we would encourage all of our stakeholders to view our documents electronically.

You can find us at www.ugllimited.com

our 2011 Shareholder Review is available as an interactive microsite.

our 2011 Annual Report and Shareholder Review are available for download as PDF files.

our full year results presentation is available to listen to as a webcast.


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corporate directory

DirectorsTrevor C Rowe AO Non-executive Chairman

Guy M Cowan Non-executive Director

Richard G Humphry AO Non-executive Director

John W Ingram AM Non-executive Director

Richard A Leupen Managing Director & Chief Executive Officer

Kathryn D Spargo Non-executive Director

Richard D White Non-executive Director

Chief Financial OfficerRobert Bonaccorso

Company SecretariesDennis Mentzines Lyn Nikolopoulos

Registered OfficeLevel 10 40 Miller Street North Sydney NSW 2060 Australia Telephone: +61 2 9492 8888

AuditorsKPMG 10 Shelley Street Sydney NSW 2000 Australia

Share RegistryLink Market Services 680 George Street Sydney NSW 2000 Australia Telephone: 1800 200 296 Overseas: +61 2 8280 7796

UGL LimitedLevel 10 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Australia Telephone: +61 2 9492 8888 Facsimile: +61 2 9492 8844 Email: [email protected] Website: www.ugllimited.com

UGL InfrastructureLevel 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Australia Telephone: +61 2 8925 8925 Facsimile: +61 2 8925 8926 Email: [email protected]

UGL RailLevel 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Australia Telephone: +61 2 8925 8925 Facsimile: +61 2 8925 8926 Email: [email protected]

UGL ResourcesLevel 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Australia Telephone: +61 2 8925 8925 Facsimile: +61 2 8925 8926 Email: [email protected]

UGL ServicesLevel 5 40 Miller Street Locked Bag 903 North Sydney NSW 2060 Australia Telephone: +61 2 8925 8925 Facsimile: +61 2 8925 8926 Email: [email protected]

UGL Services – Equis Operations161 N Clark Street Suite 2400 Chicago IL 60601 United States Telephone: +1 312 424 8000 Facsimile: +1 312 424 8080 Email: [email protected]

UGL Services – Premas OperationsBlk 750 Oasis, Chai Chee Road Technopark @ Chai Chee # 01-01 Singapore 469000 Telephone: +65 6876 0088 Facsimile: +65 6538 8146 Email: [email protected]

UGL Services – Unicco Operations275 Grove Street Newton MA 02466 United States Telephone: +1 617 527 5222

+1 800 751 9100Facsimile: +1 617 969 2210 Email: [email protected]


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Financial calendar

2011

15 August 2011 Full Year Results Released

22 August 2011 Final Dividend Ex-Date

26 August 2011 Final Dividend Record Date

08 September 2011 Final Dividend Payment Date

27 October 2011 Annual General Meeting

31 December 2012 Half Year End

Further informationis available from the UGL website:www.ugllimited.com

Alternatively, please contact:[email protected] the Registered Office via the address details provided.

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UGL country presence

Contents

2 Welcome4 Tenyearsofprofitablegrowth6 Yearinreview8 Driversforgrowth

10 FinancialStrength12 SustainableEarnings14 SectorFocus18 BusinessPositioning22 MarketLeadership26 RiskManagement

31 Corporatedirectory 32 Financialcalendar

UGL is a part of your every day life.

UGL is a global leader in outsourced engineering, asset management and property services that enhance the environment in which we live.

UGL plays an integral part in shaping the environment of the communities in which we operate – from delivering clean water to your taps, devising the optimal environment for you to work in, building the trains to get you there on time, to designing the facilities that allow you to heat your homes, UGL is there. Every day.

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www.ugllimited.com

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