1 Annual Results

Year ended 28 April 2018

28 June 2018 2 Cautionary statement

This document is solely for use in connection with a briefing on the group headed by Stagecoach Group plc (“the Group”). This document contains forward-looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries, sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the forward- looking statements in this presentation will be realised. The forward-looking statements reflect the knowledge and information available at the date of preparation. This document is not a full record of the presentation because it does not include comments made verbally by Stagecoach Group management or by others. 3

ROSS PATERSON FINANCE DIRECTOR 4 Good momentum in bus and rail

Financial

▪ Adjusted EPS 22.3p (2017 restated: 23.3p) ▪ Basic EPS of 12.3p (2017: 5.5p) reflect exceptional charges ▪ Full year dividend per share rebased to 7.7p (2017: 11.9p) ▪ No significant change to our 2018/19 adjusted EPS expectation

Bus & Coach

▪ Commercial and technology-led initiatives to drive growth ▪ UK bus pricing and network changes delivering improved revenue per vehicle mile ▪ Moderating capital investment following several years of significant fleet and technology expenditure

Rail

▪ Greater clarity on Virgin Trains East Coast – operation of train services now transferred to publicly owned company ‒ £85.6m net exceptional expenses ▪ East Midlands Trains franchise extended to March 2019, with plan for further Direct Award ▪ New Virgin Trains West Coast Direct Award franchise expected to run to at least September 2019 ▪ Bid submitted for new South Eastern franchise ▪ Progressing work on our shortlisted bids for East Midlands and West Coast Partnership franchises ▪ Reduced revenue risk on new franchise opportunities 5 UK Bus (regional operations) Focus on improving short-term revenue per mile & long-term revenue growth

Year to Year to 29 April 2017 28 April 2018 (Restated) Change Revenue (£m) 1,012.5 1,015.7 (0.3)% Like-for-like revenue (£m) 1,012.3 1,013.8 (0.1)% Operating profit (£m) 112.9 117.0 (3.5)% Operating margin (%) 11.2% 11.5% (30)bp Estimated like-for-like passenger journeys* (m) 652.6 671.5 (2.8)%

▪ Actions to adjust pricing and networks ▪ Like-for-like revenue per vehicle mile up 2.7% ▪ Like-for-like revenue per journey up 2.7% ▪ Commercial growth initiatives ▪ 90% customer satisfaction ▪ No significant change to our 2018/19 operating profit expectation

* Excludes inter-city coach services operated as a sub-contractor 6 UK Bus (London) Positive tender results in a competitive market

Year to Year to 28 April 2018 29 April 2017 Change Revenue and like-for-like revenue (£m) 251.8 263.4 (4.4)% Operating profit (£m) 13.3 18.4 (27.7)% Operating margin (%) 5.3% 7.0% (170)bp

▪ Positive tender results in year ▪ Maintaining sustainable contract pricing ▪ New site in South East London ▪ Pressure on staff costs versus historic bidding assumptions ▪ 2018/19 operating margin expected to remain below 7% 7 North America Building on 2017/18 management actions

Year to Year to 29 April 2017 28 April 2018 (Restated) Change Revenue (US$m) 630.0 632.3 (0.4)% Like-for-like revenue (US$m) 628.7 630.6 (0.3)% Operating profit (US$m) 28.1 23.5 19.6% Operating margin (%) 4.5% 3.7% 80bp

▪ Continued focus on new contract wins ▪ New megabus.com website performing well ▪ Looking to build on management actions in 2018/19 ▪ Higher oil prices should be “net positive” for the business 8 Rail Clarity on the way forward and new opportunities ahead

Year to Year to 29 April 2017 28 April 2018 (Restated) Change Revenue (£m) 1,495.2 2,160.7 (30.8)% Like-for-like revenue (£m) 1,183.7 1,142.6 3.6% Operating profit (£m) 24.9 28.5 (12.6)% Operating margin (%) 1.7% 1.3% 40bp

▪ Good profits from East Midlands Trains and South West Trains ▪ 3.5% revenue growth at East Midlands Trains, franchise extended to March 2019 with plan for further direct award ▪ Unwinding residual matters on South West and East Coast franchises ▪ Bids for three new franchises ▪ UK Rail franchises moving to a more balanced risk profile 9 Virgin Trains East Coast A clear decision

▪ Services transferred to publically-owned company ▪ Period of transition and legal/financial unwind

2017/18 exceptional items: Income statement OCI* Total £m £m £m Provision for payment in lieu of performance bond (21.0) - (21.0) Pensions actuarial loss - (32.9) (32.9) Onerous contract and other adjustments (28.0) - (28.0) (49.0) (32.9) (81.9) Tax (14.5) 2.5 (12.0) (63.5) (30.4) (93.9) Non-controlling interest 5.6 2.7 8.3 (57.9) (27.7) (85.6)

* Other comprehensive income 10 Virgin Rail Group (incorporates West Coast franchise) New franchise and continued good financial performance

Year to Year to 28 April 2018 29 April 2017 Revenue – 49% share (£m) 574.0 556.8 Operating profit – 49% share (£m) 30.0 31.5 Operating margin (%) 5.2% 5.7% Dividends received (£m) 24.1 28.1

▪ Continued good financial performance ▪ High customer satisfaction ▪ New Direct Award franchise to potentially March 2020 ‒ Successor franchise currently planned from September 2019 11 Modest current rail revenue risk and risk capital

East Midlands Virgin Trains Trains West Coast Season ticket bonds (£m) 7.2 ** Performance bonds (£m) 15.0 ** Guarantees to suppliers (£m) 3.0 ** Undrawn parent company loan facilities (£m) 25.0 ** Total risk capital (£m) 50.2 ** Latest end date March 2019* March 2020 Revenue risk GDP sharing with DfT takes 90% of DfT revenue variance in excess of 1% variance to “bid”

* A new East Midlands direct award franchise is being negotiated to start from March 2019 ** Currently, there is no recourse to Stagecoach for Virgin Trains West Coast risk capital 12 More inclusive sharing of rail revenue risk

▪ Forecast Revenue Mechanism (“FRM”) ‒ DfT shares in revenue variances to bid, irrespective of cause ‒ FRM start date varies by franchise ‒ Deadband and sharing % varies by franchise ‒ Need to “elect” for “revenue support” in advance ‒ Additional obligations and lower profit share thresholds when revenue support elected

West Coast South Eastern East Midlands Partnership Franchise start (date) April 2019 August 2019 September 2019 GDP share from (date) n/a n/a September 2019 Deadband n/a n/a 2% DfT share n/a n/a 90% FRM from (date) April 2020 April 2021 April 2021 Deadband 3% 4% 4% DfT share 80% 80% 80% 13 Rail value

Existing franchises Share of April 18 Net assets £m East Midlands 7.3 + post-tax profits to March 2019 Virgin Rail Group (West Coast) 21.2 + post-tax profits to March 2019 28.5

Negotiating/extension opportunities

East Midlands DA Competitively tendered franchise not expected to begin before August 2019 West Coast extension Competitively tendered franchise not expected to begin before September 2019; DfT option to extend up to March 2020

Shortlisted bids

▪ South Eastern (expected 80% share) ▪ West Coast Partnership (50% share) ▪ East Midlands (100% share) 14 Stagecoach Group Good financial position

Year to Year to 28 April 2018 29 April 2017 Change Net finance charges (including share of net finance income of joint ventures) (£m) (34.7) (33.6) (1.1) EBITDA from continuing operations and joint ventures* (£m) 334.4 345.4 (11.0) Closing net debt (£m) (395.8) (409.4) 13.6 Net Debt/EBITDA* 1.2x 1.2x - EBITDA*/Net finance charges (including share of net finance income of joint ventures) 9.6x 10.3x (0.7)x

▪ Net pension liability down £90.3m to £142.2m ▪ Non-rail net debt down £61.8m to £567.0m ‒ further forecast reduction in 2018/19 ‒ lower capital expenditure and dividends

* excluding exceptional items 15 Dividend policy

▪ Board recognises that dividends are important to shareholders ▪ Dividend rebased to 7.7p per share per annum ▪ Rebased to sustainable level, covered by normalised non-rail cash flow ▪ Broadly 50:50 split between interim and final ▪ No change to earnings expectation or growth ambitions 16

MARTIN GRIFFITHS CHIEF EXECUTIVE 17 Progress in 2017/18 Clear Group strategy with progress across bus and rail:

▪ Digital technology: development of industry-leading ticketing and information tools for bus and rail customers ▪ People: biggest employee engagement programme to date ▪ Customer: strong passenger satisfaction across bus, tram and rail ▪ Commercial initiatives: piloting new mobility services; launched new low-cost sightseeing product; successful partnership with Norwegian Airlines ▪ Contract markets: tender wins in London and North America ▪ Competitive and regulatory environment: more balanced rail risk profile; partnership working on bus and rail 18 Rail: Bidding with confidence

▪ Trusted and experienced rail partner ▪ Lessons learned from Virgin Trains East Coast and other franchises ▪ More inclusive sharing of revenue risk with DfT ▪ Moderating levels of risk capital ▪ Relatively few competing bids per franchise 19 Demand drivers analysis: Greater Manchester ▪ Biggest upside opportunity from addressing car dependency/congestion ▪ Modest impact from taxi use and switch to online shopping Drivers of change 10 8.2m 8 205.9m trips 6 5.0m 2011/12 4.4m 4 3.5m 2.2m 2 Overall estimated impact over the time period

Bus Bus trips 0 (0.1)m (0.0) (0.1)m (0.6)m (0.3)m (4.5)m (2) (1.5)m (1.9)m (4)

(6)

(8) (7.1)m (8.0)m (8.2)m

(10)

Rail

Taxi

Car

Online

Flexible working

Caruse

services

times

Residual

Metrolink

Economy

Busfares

ownership

Population

Busquality structure

Busjourney 201.4m Employment Demographic trips Alts to travel 2016/17

Economic and labour Alts to Price and quality of By theme Socio-demographics Price and quality of other modes Residual market impacts travel bus services

0.1% (1.4%) (0.7%) 0.7% (1.9%) 1.0% Historical trends 2011/12 to 2016/2017 20 Demand drivers analysis: Cambridge ▪ Biggest upside opportunity from tackling car dependency/improving bus journey times impacted by congestion ▪ Marginal impact from taxi use and switch to online shopping Drivers of change 0.3 0.2m 0.2 0.2m

0.1 0.1m 12.6m 0.0m trips 0.0m 0.0m 2011/12 0.0 (0.0)m (0.0)m (0.1) (0.1)m

Overall estimated Bus Bus trips (0.2) (0.2)m impact over the time period

(0.3) (0.3)m (0.3)m (1.4)m (0.4)

(0.5) -10.9% (0.5)m (0.5)m

(0.6)

Rail

Taxi

Car

Online

Flexible working

Caruse

services

times

Residual

Economy

Busfares

ownership

Population

structure

Busjourney

BusQuality

Employment (Punctuality) Demographic

11.2m trips Alts to 2016/17 travel Economic and labour Alts to Price and quality of Socio-demographics Price and quality of other modes Residual By theme market impacts travel bus services

(2%) 0% (1%) (9%) 1.% 0%

Historical trends 2011/12 to 2016/2017 21 Positive outlook, creating value

▪ Positive outlook for public transport as governments face up to challenges of road congestion, air quality and drive for economic growth ▪ Clear roadmap for UK Bus and North America ▪ Continued value and new opportunities in UK Rail ▪ Good financial position ▪ No change to our expectation of 2018/19 earnings per share 22

ANNUAL RESULTS YEAR ENDED 28 APRIL 2018 23

APPENDICES 24 Summary income statement

Year to Year to 29 April 2017 Change 28 April 2018 (Restated) £m £m £m UK Bus (regional operations) operating profit 112.9 117.0 (4.1) megabus Europe operating loss - (4.3) 4.3 UK Bus (London) operating profit 13.3 18.4 (5.1) Citylink profit after tax 1.2 1.4 (0.2) North America operating profit 21.0 18.2 2.8 UK Rail operating profit 24.9 28.5 (3.6) Virgin Rail Group profit after tax 25.9 24.8 1.1 Restructuring costs, Group overheads and other items (19.3) (18.9) (0.4) Operating profit 179.9 185.1 (5.2) Finance charges (net) (35.1) (34.1) (1.0) Tax (17.9) (19.3) 1.4 Profit excluding non-software intangibles and exceptionals 126.9 131.7 (4.8) Non-software intangibles and exceptionals, net of tax (63.1) (113.6) 50.5 Reported profit from continuing operations 63.8 18.1 45.7 Adjusted earnings per share (pence) 22.3p 23.3p (1.0)p 25 Divisional income statements – Year ended 28 April 2018

UK Bus UK Bus (Regional) (London) North America UK Rail £m £m US$m £m Revenue 1,012.5 251.8 630.0 1,495.2 Rail franchise premia - - - (606.4) Rail revenue support - - - 105.0 Other operating income 11.2 1.9 8.2 173.7 Staff costs (558.2) (153.3) (267.8) (361.9) Fuel costs (i.e. Diesel) (111.4) (30.9) (47.1) (57.2) Insurance and claims costs (18.8) (4.9) (58.3) (3.5) Depreciation, amortisation and impairment (84.4) (6.7) (58.1) (15.6) Rolling stock costs – lease & maintenance - - - (249.1) Other operating leases (11.6) (18.8) (16.6) (14.4) Network Rail - - - (140.0) Electricity for trains - - - (31.9) Commissions payable - - - (48.8) Materials & consumables (38.6) (7.4) (51.7) (43.5) Other costs (91.8) (18.4) (110.5) (176.7) Gain on land and buildings 4.0 - - - 112.9 13.3 28.1 24.9 26 UK Bus (regional operations) Growth analysis

Like-for-like growth Year to 28 April 2018 Revenue Journeys Implied yield megabus.com UK 9.5% 8.0% 1.4%

Other commercial 1.6% (2.1)% 3.8%

Concessionary (2.2)% (4.5)% 2.5%

Tendered and school (2.5)%

Contract and other revenue (13.5)%

Total (0.1)% (2.8)% 2.7% 27 Taxation

Year to 28 April 2018 Pre-tax profit Tax Rate £m £m % Excluding exceptional items 149.6 (22.7) 15.2% Exceptional items (49.5) (13.6) (27.5)% 100.1 (36.3) 36.3% Reclassify joint venture taxation for reporting purposes (4.8) 4.8 Reported in income statement 95.3 (31.5) 33.1%

Cash tax paid (net) (16.3) 28 Movement in net debt

Year to 28 April 2018 £m EBITDA from Group companies before exceptional items 302.9 Gain on disposal of property, plant and equipment (3.2) Equity-settled share based payment expense 1.2 Dividends from joint ventures 27.2 Working capital movements (93.0) Net interest paid (26.3) Tax paid (16.3) Net cash from operating activities 192.5 Net capital expenditure including new hire purchase and finance leases (100.4) Acquisitions/disposals of businesses and intangibles (15.6) Token sales and redemptions (0.3) Cash generation 76.2 Foreign exchange, income statement and other movements 6.7 Equity dividends (68.3) Net own shares purchased (1.0) Decrease in net debt 13.6 Opening net debt (409.4) Closing net debt (395.8) 29 Fuel hedging

UK Bus UK Bus (regional) (London) North America UK Rail 2017/18 - % of forecast consumption hedged 99% 82% 76% 63% - average hedge price (per litre) 34.1p 33.6p 44.2 cents 25.6p 2018/19 - % of forecast consumption hedged 95% 75% 61% 83% - average hedge price (per litre) 28.7p 37.5p 46.6 cents 33.1p

2019/20 - % of forecast consumption hedged 94% 27% 38% - - average hedge price (per litre) 33.8p 31.4p 50.1 cents - 2020/21 - % of forecast consumption hedged 70% 14% - - - average hedge price (per litre) 33.1p 33.9p - - Market price (per litre) 44.0p 44.0p 57.6 cents 44.0p

Market prices are as at 31 May 2018. Prices exclude delivery margins, duty, taxes and Bus Services Operators Grant (“BSOG”) 30 Definitions

▪ Like-for-like amounts are derived, on a constant currency basis, by comparing the relevant year- to-date amount with the equivalent prior year period for those businesses and individual operating units that have been part of the Group throughout both periods. Where the number of days differs between the current and prior year periods, the prior year amount is normalised for that when calculating like-for-like amounts. ▪ Operating profit or loss for a particular business unit or division within the Group refers to profit or loss before net finance income/costs, taxation, non-controlling interests, non-software intangible asset amortisation, exceptional items and restructuring costs. ▪ Operating margin for a particular business unit or division within the Group means operating profit or loss as a percentage of revenue. ▪ Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or incidence in order to allow a proper understanding of the underlying financial performance of the Group. ▪ Gross debt is borrowings as reported on the consolidated balance sheet, adjusted to exclude accrued interest and the effect of fair value hedges on the carrying value of borrowings. ▪ Net debt (or net funds) is the net of cash/cash equivalents and gross debt. ▪ DfT refers to the United Kingdom Department for Transport, a Government department. 31

ANNUAL RESULTS YEAR ENDED 28 APRIL 2018