1 Monday, 7 November 2016

Response to CIMIC Takeover Offer Investor & Analyst Briefing

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1. Summary of CIMIC takeover offer

2. UGL Board recommendation

3. Timetable & Next Steps

4. Ichthys Projects Update

5. Refinancing Update

6. Outlook

7. Q&A

Agenda F

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CIMIC unsolicited takeover offer F

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CIMIC’S Unsolicited Takeover Offer

• On 10 October 2016, CIMIC1 announced it had acquired a 13.84% shareholding in UGL and intended to make an offer to buy all the shares in UGL that it does not already own

• On 25 October 2016, CIMIC sent its offer document to UGL Shareholders, containing the terms of the Offer and other information relevant to shareholders

Value of the Offer • $3.15 per UGL share in cash

Timing • The Offer closes at 7:00pm (AEDT) 25 November 2016 , unless it is extended or withdrawn by CIMIC

Terms and Conditions

• The Offer is final and cannot be increased during the Offer Period in the absence of a competing proposal

• It is also unconditional other than in respect of a “prescribed occurrences” condition

• “Prescribed occurrences” such as certain changes to the share capital, insolvency or if UGL divested a substantial part of the business

Funding • The Offer will be funded using CIMIC’s available funds or existing debt facilities

Summary of CIMIC’s unsolicited takeover offer

1 CIMIC Group Limited through a wholly owned subsidiary CIMIC Group Investments No. 2 Pty Limited

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UGL Board recommendation

• In the Majority Directors’ view, the decision as to whether or not to accept the Offer is finely balanced and depends on the circumstances of each individual UGL shareholder

• After careful consideration of the Offer, the Majority Directors recommend that UGL Shareholders ACCEPT the Offer in the absence of a superior proposal

• Mr. Robert Kaye SC, a Non-Executive Director, recommends that you reject the Offer as he believes that the Offer Price may not reflect the full underlying value of UGL

The reasons why you should ACCEPT the Offer are set out below, and outlined in UGL’s Target’s Statement, which your Directors encourage you to read in detail

2 The Offer represents an attractive premium to historic trading prices

1 The Independent Expert has concluded that the Offer is fair and reasonable, in the absence of a superior offer

3 The Offer represents an attractive acquisition multiple

4 The Offer provides UGL Shareholders with certainty of receiving $3.15 per UGL Share in cash, which must be weighed against the risks associated with remaining a shareholder

5 No superior proposal has emerged and CIMIC’s Offer is final in the absence of a competing proposal

6 The trading price of UGL Shares may fall immediately following the close of the Offer in the absence of the Offer or a superior proposal

7 Should CIMIC acquire a controlling ownership stake, there could be a number of potentially adverse consequences for non-accepting UGL shareholders

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• UGL engaged Grant Samuel to prepare an Independent Expert’s Report to assess the merits of the Offer

• Grant Samuel has assessed that the value of UGL on a 100% controlling interest basis ranges from $3.11 to $3.94 per UGL Share

• As the Offer price of $3.15 falls within the Independent Expert’s range the Independent Expert has concluded that the Offer is fair and reasonable, in the absence of a superior offer

The Independent Expert has concluded that the Offer is fair and reasonable, in the absence of a superior offer

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Independent Expert’s UGL Valuation Range

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• The Offer represents a premium to the undisturbed UGL Share price¹ and the VWAP since announcement of the potential for an additional Ichthys provision of 47.2% and 37.7%, respectively

• Premia are in excess of the ~20-35%² levels typically observed in takeovers

The Offer represents an attractive premium to historic trading prices

Implied Offer Premium vs Australian Average Takeover Premium

1 Undisturbed UGL closing share price of $2.14 as at 7 October 2016 2 See Section 6.2.2 of the Independent Expert’s Report

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Average takeover premia: 20% to 35%

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The Offer represents an attractive acquisition multiple

• Implied Offer multiple of 8.5x FY2016 EBITDA¹ is above the median historical EBITDA multiple realised in comparable transactions1

• Infrastructure Services: 6.1x; Engineering Services: 5.6x; Other Services: 4.6x

• On a FY2017 basis, the implied Offer multiple of 8.3x FY2017 EBIT1 is also above the median forecast EBITA multiple realised in comparable transactions1

• Infrastructure Services: 7.7x; Engineering Services: 7.8x; Other Services: 6.0x

Offer Enterprise Value / Historical EBITDA vs Comparable Transactions

1 As set out on page 8 in the Target’s Statement

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Implications of remaining a UGL Shareholder

Base business turnaround is well advanced

The Board believes the Ichthys provision is adequate as at 31 October 2016

• However, UGL debt levels (expect to be approx. $174-$214 million net debt as at 30 June 2017) are higher than industry peers, making UGL more susceptible to unforeseen events which may negatively impact the base business or Ichthys

• To the extent these events extend beyond UGL’s available headroom, UGL may need to seek alternative funding sources

Offer provides UGL Shareholders with certainty of receiving $3.15 per Share in cash which must be weighed against the risks associated with remaining a shareholder

Certainty of the Offer

• Offer is $3.15 per UGL Share in cash

• If you accept and the Offer becomes or is declared unconditional, CIMIC will pay you by the later of:

• 7 business days after the date of receipt of your valid acceptance; and

• 7 business date after the Offer becomes or is declared unconditional

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The Independent Expert noted “Shareholders with a low risk appetite will find the certainty of $3.15 cash per UGL Share attractive.” F

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• Possibility a superior proposal from a third party emerges before the end of the Offer Period

• Would be announced to the ASX and carefully considered by the Board

• However, no superior offer had been made as at the date of the Target’s Statement

• Given the Offer is final, CIMIC cannot increase the Offer Price above $3.15 in the absence of a competing proposal

No superior proposal has emerged and CIMIC’s Offer is final in the absence of a competing proposal

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• UGL share price increased +48.6% following the Offer announcement from undisturbed closing price¹

• Since the Offer announcement, UGL Shares have traded in a range between $3.16 and $3.26²

• In the absence of the Offer and if no superior proposal emerges, the UGL share price may fall below CIMIC’s Offer Price immediately following the close of the Offer

The trading price of UGL Shares may fall in the absence of the Offer or a superior proposal

Share Price Reaction to CIMIC Offer

¹ Undisturbed UGL closing share price of $2.14 as at 7 October 2016 ² Intraday low on 10 October 2016 and intraday high on 12 October 2016

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1.20

1.70

2.20

2.70

3.20

3.70

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16

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UGL Offer Price

10-Oct-16+48.6%

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CIMIC currently has 13.84% relevant interest. Should it acquire a controlling stake there could be a number of potentially adverse consequences for non-accepting UGL shareholders including:

• UGL may need to renegotiate its bank facilities or potentially explore financing alternatives (including a potential equity raising)

• Change of control provisions may be triggered in a number of material contracts (representing ~$1.0 billion, or 38% of FY2017 operating revenue)

• Additional provisions regarding termination of convenience increases total contracts at risk to ~$1.4 billion, or 53%, of FY2017 operating revenue

• Liquidity of UGL Shares may fall

• Potential for removal from certain market indices due to limited free float / liquidity, depending on the number of shares acquired by CIMIC

• May lead to a change in Board composition and management and UGL may not be able to execute its current business plan and turnaround strategy

• May lead to a change in current business mix and possible divestment of certain assets

• May lead to changes to the existing capital structure, dividend and capital management policies, including a potential equity raising

Should CIMIC acquire a controlling ownership stake there could be a number of potentially adverse consequences for non-accepting UGL shareholders

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Mr Robert Kaye SC’s reasons to reject the offer

• Mr Robert Kaye SC recommends that UGL Shareholders REJECT the Offer • Mr Kaye SC is of the view that the Offer Price may not reflect the full underlying value of UGL Shares

The reasons why Mr Kaye believes you should reject the Offer are set out below, and outlined in UGL’s Target’s Statement, which your Directors encourage you to read in detail

2 UGL has a strong base business and is well advanced in its turnaround

1 The Offer of $3.15 per UGL share is only marginally above the lowest end of the Independent Expert’s valuation range of $3.11 to $3.94 per UGL Share

3 The timing of the Offer is opportunistic given UGL’s current exposure to the Ichthys Projects

4 The Offer may not reflect the full strategic value of UGL to CIMIC For

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Process Timetable

Timetable

• 7 November – UGL Target Statement released on ASX

• 9 November – UGL Target Statement dispatched to shareholders

• 25 November – closing date for the Offer (unless CIMIC withdraws or extends)

Next Steps

• Shareholders who do not wish to accept the offer should do nothing

• Shareholders who wish to accept the offer should refer to the Bidder’s Statement

• Acceptances must be received before the end of the Offer Period

More Information

• The Board of UGL will keep you updated on any significant developments

• If you have any questions, call the official UGL shareholder information line:

• Within Australia: 1300 415 866

• Outside Australia: +61 2 8022 7947

After careful consideration of the Offer the Majority Directors recommend that UGL Shareholders ACCEPT the Offer in the absence of a superior proposal

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Ross Taylor

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Ichthys projects

CCPP Project SMP Project

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SMP Project Status

• Construction 60% complete

• Commercial settlement on claims up to 31 May 2016 achieved

• Productivity and program tracking to forecast cost to complete

• Delays and disruption continue which is being managed in line with our contract

Ichthys SMP project

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All values referred to in the diagrams reflect 100% of the project and UGL’s interest is 50% of these values. They do not include the UGL specific management oversight costs. Diagrams are for illustrative purposes only and are not to scale.

1. Including $35m in incentive payments which are conditional upon achieving agreed milestones

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CCPP Project Status

• UGL and CH2M JV scope 79% complete

• First key milestone “ready for gas” achieved

• Likely completion now estimated at October 2018 (from January 2018) based on key client deliverables

• Cost at completion has been reforecast on this basis

• We will look for genuine settlement negotiations over coming months or enter into formal dispute processes

Ichthys CCPP project

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31

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All values referred to in the diagrams reflect 100% of the project and UGL’s interest is 50% of these values. They do not include the UGL specific management oversight costs. Diagrams are for illustrative purposes only and are not to scale.

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• Provision of $375 million raised across both projects remains unchanged

• Fully attributable to the CCPP project

• Includes UGL management costs required to effectively oversee the projects

• Aggregate provision reflects:

• Forecast total project costs to complete based on ongoing impact of delay and disruption

• Current approved revenue and $37.5m (UGL share) unapproved variations on SMP

• Further settlement of claims provides future potential upside or contingency against forecast cost increases

• Estimated future cash flows associated with $375m provision

• Does not allow for further project delays and cost increases which may have to be funded by the JV partners before potential recovery through claims

Overall financial position

Total

FY15 FY16 1H17 2H17 1H18 2H18 1H19

(9) (183) (103) (82) 15 (12) (1) (375)

Actual Forecast

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Refinancing Update

• A Syndicated Facility Agreement has been executed on 4 November 2016 for the following new financing arrangements

• Further to this, UGL is in the final stages of agreeing extensions to a range of bilateral bank guarantee, overdraft and other transactional facilities with an aggregate value of $65m

• Financial close on the refinance is expected to occur after 28 November 2016

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Base business positioned for strong growth in FY17

Description

• Base business revenue growth of ~$300m due to contracts secured in transport infrastructure and asset maintenance

• Ichthys projects expected to generate revenue of $360 million

• Significant progress on Ichthys projects with construction phase largely complete

• Further EBIT margin improvement in base business ~4% due to revenue growth and improved profitability

• EBIT split 35% / 65% between first and second half

• Testing and commissioning phases of Ichthys projects

• Sustainable enterprise and industry leader

• Continue to seek opportunities for growth and value enhancement

FY17

Stage 3: Strong top and

bottom line growth

FY18 + beyond

Stage 4: Consistent

Growth

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Q&A F

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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.

IMPORTANT NOTICE

Presented and delivered by UGL Copyright © 2016 All rights reserved

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