Full-Year 2011 Results PresentationUGL Services PresentationBob Shibuya, Group President - UGL ServicesMonday, 24 October 2011
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UGL Overview
MarketCapitalisation(as at 21 Oct 11)
Ourvalues
Sectors Geography Customers Services
A service company supporting essential infrastructure, resources and property sectors
safety, integrity, outstanding customer service, teamwork, honesty and openness in communication
• Technology partners• Alliance or
risk-sharing contracts• EPCM• Global coverage• PPPs
• Energy• Rail• Resources• Property• Transport• Water
• Australia & New Zealand
• Asia• Middle East• North America
• Government• Blue-chip companies• Public institutions
• Consulting• Project management• Design• Construction• Fabrication• Operations
& maintenance• Asset management• Facilities management• Corporate real estate
A$2.0bPeople(including contractors) 47,829
Delivery method
Revenue EBIT Order Book
$4.6b $249.4m $8.2b
*figures based on the 2011 financial year
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UGL Business Unit Overview
UGL Infrastructure is a leading provider of design, construction and maintenance services to the water, energy and transport systems sectors in Australia, New Zealand, Asia and North America.
UGL Services provides end-to-end corporate real estate and facilities management services to corporations, governments and institutions in Australia, New Zealand, Asia, North America and the Middle East.
UGL Rail is Australia’s largest and most experienced provider of rolling stock and infrastructure solutions to the passenger and freight rail sectors – and a growing player in the Asian rail industry.
UGL Resources is a leading provider of project delivery and asset services in the mining and mineral processing, oil and gas, chemicals and industrial processing industries.
Revenue$1,066m
EBIT$83.3m
Order Book$1,595m
29%
23%
19%
Revenue$1,250m
EBIT$84.8m
Order Book$2,815m
27%
29%
34%
Revenue$959m
EBIT$44.0m
Order Book$973m
21%
15%
12%
Revenue$1,329m
EBIT$76.5m
Order Book$2,837m
29%
27%
35%
* figures based on the 2011 financial year
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How does UGL Services fit into the UGL Strategy?
Sector Leadership
• Resources• Power• Water• Property• Rail• Transportation
Risk Management
• Robust systems and processes• Alliance and cost-plus contracts• Blue chip and government clients• Sensible, balanced trading terms• Geographic diversification
Financial Strength
• Strong balance sheet• Low capital intensity• Robust cash flow• Flexibility to grow
Sustainable Earnings
• Balanced recurring revenues• Long term capital works alliances• Diverse earnings streams• Strong order book• Solid opportunity pipeline
Market Leadership
• People• Safety• Technology partnerships • Intellectual property • Outstanding customer service
UGLStrategy
Business Positioning
• Exposure tolong term growth trends
• Significant market opportunities• Strong technical component• World class technology• End to end solutions
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UGL Services Global Team
Bob ShibuyaGroup President
North America
George KechesChief ExecutiveBoston
David MontrossChief ExecutiveChicago
ANZ
Henry ArundelChief Executive
ASIA
Michael SuChief Executive
EMEA
Stuart CarmichaelExecutive GeneralManager
GLOBAL INFRASTRUCTURE
Jeff PetersonChief Information Officer
Mary TamakiGlobal Director of Marketing
Caren Shadel-SevilGroup ManagerHuman Resources –Services
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UGL Services Overview Bob Shibuya, Group President - UGL ServicesMonday, 24 October 2011
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UGL Services offers world-class real estate and facilities management services at unparalleled performance levels to corporations, governments and institutions across the globe.
Our client focused, end-to-end solutions model allows us to incorporate real estate advisory, integrated facilities management, project management and sustainability services, with the flexibility and expertise to meet the most exacting of client service needs on a local, regional and global basis.
20,000 employees | 74 offices | 13 countries | Over 9 billion square feet under management
UGL Services – Global Positioning
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UGL acquires Boston-based facilities services business UNICCO Service Company, adding 20,000 employees in North America
1994 1996 1998 2000 2002 2004 2006 2008 2010 2011
Knight Frank and Price Waterhouse establish Knight Frank Price Waterhouse –KFPW
UGL acquires Kilpatrick Green
UGL acquires KFPW
UGL expands into New ZealandMerges KFPW with Kilpatrick Green facilities management business
UGL acquires Singapore-based PremasInternational –expanding into 16 major cities in Asia UGL acquires Chicago-
based corporate real estate business Equis Corporation, establishing a presence throughout the United States and India
KFPW acquires Australian Property Group
Listed on ASX as United Construction Group
History of UGL Services
Rebranded UGL Services
1896Knight Frank founded in London
1849Price Waterhouse founded by Samuel Lowell Price
1949Unicco founded
1984Equis founded
1999Premasfounded
Significant Dates of Legacy CompanyFor
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UGL Services – Service Offering
Who we are today: Integrated RE / FM services provider
Real Estate
• Strategic Consulting• Lease Administration• Site Selection/
Government Incentives
• Transaction Advisory and Brokerage Services
• Portfolio Management
• Corporate Finance• Financial Incentives• Audit and Recovery
Project Management
• Workplace Strategy• Project Management• Move Management• Tenant Improvement• Development
Consulting• Construction
Management• Facility Strategy
Operations and Maintenance
• Utilities• Heating/HVAC• Recycling and Waste
Management• Environmental
Management• Engineering• IT and Telecom• Façade Maintenance
Soft Services
• Janitorial • Exterior Services• Office Services• Logistics• Space Management
Sustainability
• Energy Management
• Environmental Reporting
• Environmental Strategy
• LEED Certification
• Procurement
• Program Delivery
REAL ESTATE INTEGRATED FACILITIES MANAGEMENT
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UGL Services 20,000 Employees13 Countries
Alliance PartnershipsAccess to an additional 290,000 peoplein 65 additional countries
UGL Services Coverage
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Singapore Sports Hub, Singapore353,000 m2 Sports Hub/stadium• Equity partner• Integrated facilities management• Lifecycle management
Rolls Royce, North America70 locations, 650,000 m2• Portfolio and transaction management• Data management• Project management• Audit & Recovery• Integrated facilities management
Sydney Opera House, AustraliaWorld renowned cultural landmark, hosts more than 1 million visitors and 2,500 live performances each year• Building conservation • Operations and maintenance • Sustainability services
Aspire Zone, QatarSports complex: 50,000 seat stadium, sports hall, Academy, aquatic center, orthopedic hospital, mosque, and more• Integrated facilities management• Engineering and maintenance• Energy management• Project management• Call center operations
Chrysler, North America205 locations, 73.4 million m2• Portfolio and transaction management• Data management• Audit & Recovery• Integrated facilities management
Zurich, North America441 locations, 827,000 m2• Portfolio management• Transaction advisory• Strategic consulting• Integrated facilities management• Project management
Representative Projects
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Client Advocate Scores 2011 Overall% of Advocates
UGL Services 72.0%
Jones Lang LaSalle 52.5%
CB Richard Ellis 28.0%
NAI Global 19.2%
DTZ 19.0%
UGL Services ranks the #1 most recommended corporate real estate firm
The Watkins Research Group, Inc., in a joint project with Flaspöhler Research Group, conducted interviews with 208 corporate real estate decision makers. The survey evaluated 23 corporate real estate service providers and identified key considerations in selecting these providers.
For each firm a respondent said they used we asked,
“How likely are you to recommend (firm used) to a business associate or colleague?
10 most used factors UGL’s RankDelivers results on time and within budget 1Is business “savvy” 2Understand and avoids conflicts of interest 1Adapts service to fit my firm’s needs and culture 1Financial strength 5Pricing is rational 1Has a strong and respected reputation 5Monitors performance with metrics 3Uses State of the Art technology 4Has offices where I need them 4
The 10 most used factors to evaluate “what’s best for my situation”.
UGL Services ranks in the top 5 for all 10 factors and #1 in 4 of them
Leaders in Customer Satisfaction
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Operational Report - Services
2011 Highlights• Successful expansion in the Middle East and
China• Excellent performance from Asia-Pacific• Continued turnaround in the US Corporate
Real Estate business• Ongoing improvement in Australia and New
Zealand • Stable revenue and earnings contribution
2012 Outlook• US turnaround expected to deliver solid
growth• Middle East has further expansion prospects• Australian, NZ and Asian businesses in
excellent shape• Outsourcing trend will gather pace
$m FY11 FY10 Change
EBIT $m
Sales - $m 1,328.9 1,361.9 (2%)
EBIT - $m 76.5 71.5 7%
EBIT / Sales 5.8% 5.2%
Order book - $b 2.8 2.8 -
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Market Outlook
Uncertainty on the horizon
“Consumer confidence at Great Recession level”
August, 29, 2011, CNN World
“Pent up commercial demand due to release”
September 2, 2011, Brokernews.com / ANZ
“Strong outlook for Asia Pacific office markets”
August 4, 2011, Propertywire
“UK FM sector looks overseas for opportunity”
July 2, 2011, FM World
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• Flight to Quality
• Consolidation of service provider relationships
• Outsourcing increasingly popular
• Global tenders becoming more prevalent
Market Trends and Issues
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Impact on Property Services Industry
• Consolidation of property services industry
• Strategic alliances on the rise
• Delay and downsizing of occupancy lease/purchase commitments
• Technology infrastructure costs drive smaller firms out of Accounts business
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Evolution of IFM and RE Sourcing
Pre-1980s 80s toMid-90s
Mid-90s To 2000
Early 2000sTo mid-2000s
Mid-2000sAnd onward
Most, if not all, activities are performed in-house.
Self-perform Out-tasking Outsourcing Integrated facilities management
Global integrated business services
Low-tech services such as cleaning, security, food services and landscaping are individually sourced by different locations to external providers
A combination of low-tech and high-tech services – such as electrical, mechanical-are outsources in service bundles
Facilities management and real estate services are outsourced to a single service provider, which manages subcontractors
Facilities management and real estate services are organizationally aligned with other support services such as finance, HR, procurement and IT –and outsourced in a global bundle across business units. Bundled business process outsourcing (BPO) across multiple functions is emerging as an option
Source: KPMG 2011 Real Estate and Facilities Management Outsourcing Pulse Survey
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Size of Market
62%United States
18%Europe
20%Asia
$5.1BCBRE $3.2B
JLL $4.2BJCI
$1.8BC&W
$1.4BUGL
$1.1BColliers
$107BAll Others
Estimated revenue = $125 billion (US$)
2010 Market Share by Revenue2010 Global Market
Source: UMS Advisory Source: Public Information
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Global/Controlled
Local/Alliance
Coverage
Narrow
Jones Lang LaSalleCB Richard Ellis
C & W
UGL
CresaPartnersStudley
BroadScope of Services
DTZSavills
Cassidy TurleyNewmark
Grubb & Ellis
Colliers
Knight FrankBNP
GVAAOS
Competitive Position – Real Estate
Key Attributes
• Global Coverage
• Single Brand
• Majority/Equity Ownership
• Full Service
Real Estate Services – Key Players
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ABMCarillionCBREDalkiaEmcor
FluorJohnson ControlsJones Lang LaSalle
Competitive Landscape – FM
Global FM market is dominated by bundled and I-FM service providers, with majority of the large players operating across multiple countriesFM market is mostly ruled by bundled and I-FM service providers, with FM services forming just a small part of their overall portfolio; top players are generally engaged in a myriad of industrial and economic business sectors, ranging from energy and construction services to FM and consultancy services.
Service Integration
I-FM Service Providers.
Provide the entire gamut of FM services, including cleaning,
support, property, catering and security services, to public and
private sector clients.
Bundled Service Providers.
Provide a set of five or more FM related services, such as support services, property management,
security services, technical maintenance and waste
management. They may enter into strategic partnerships to provide
the complete spectrum of services.
Single Service Providers.
Provide single FM related service, such as support
services or specialized software for FM. Generally, these
companies are relatively small in size with limited geographic
presence.
Bundled and I-FM service providers are global players operating in a broad array of industries, in addition to FM services, such as:• Health, Energy, Science, Transport, Real Estate, Natural Gas, Construction, Home Affairs, Infrastructure and Government Services
Source:Company Websites; TSC Research and AnalysisService Integration
AramarkBilfinger+BergerISSMitieSerco
SodexoUGL Services
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REFM Outsourcing Usage Trends
Source: KPMG 2011 Real Estate and Facilities Management Outsourcing Pulse Survey
Workplace services
Facilities services
Transactions/brokerage
Lease administration
Project mgt ($20M+)
Facilities management
Project mgt(<$20M)
Space management
Real estate and facilities IT
Portfolio strategy/planning
60%
48%
46%
33%
26%
24%
20%
16%
11%
27%
37%
30%
28%
33%
47%
50%
43%
32%
22%
7%
11%
20%
30%
33%
22%
24%
36%
48%
72%
Currently fully outsourced Currently partially outsourced No plans to outsource
Planning to outsource innext 12 months
Planning to outsource 12+ months out
Current REFM outsourcing usage and market demand conditions
Key Findings• Most commonly outsourced REFM
process area is workplace services• The second most frequently outsourced
area is facilities, e.g. HVAC, electrical, mechanical, building repair
• REFM portfolio strategy and planning was the least often outsourced area
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Strategy
Consolidate and build brand UGL
Opportunity Target Objective
Premas, Equis and Unicco have transitioned from sub-brands to divisions
Progress-to-date
Leverage existing client relations
Deliver integrated RE and FM consistently throughout the world
Optimize efficiency and best practices
Grow profitably at 10%+
Consolidate sale and client management teams
Establish best-in-class platforms in Europe and Asia
Develop global leadership team
Expand into new geographic markets and service sectors
Search for new global sales and client management leadership underway
Active discussions with people and firms in target markets
New CIO, new marketing director, inbound CFO/COO
Active M&A pipeline and recruitment of high-profile firms, teams and individuals
Global Strategy
Become a top three global property service provider
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Q&A
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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 UGL Limited (“UGL”) 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 UGL, 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, UGL 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, UGL 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.
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