FirstGroup plc Proposed sale of First Student and First Transit
23 April 2021 Successfully delivering the strategy
▪ Deal signed for sale of First Student and First Transit to EQT Infrastructure for EV of $4.6bn
▪ Full strategic value achieved for these high quality assets – 8.9x FY20 EBITDA (pre-IFRS 16)
▪ Transaction rationalises portfolio, addresses longstanding North American self-insurance and pension liabilities, and enables UK pension schemes to move to a low dependency funding basis
▪ £365m proposed return of value (30p per share) to shareholders during current calendar year, following sale completion expected in H2 calendar 2021
▪ Retained Group has a strong platform on which to create sustainable value: − Well-capitalised and de-risked balance sheet − Cash generative operating model that will support an attractive dividend − Critical enabler of economic, social and environmental goals at key inflection point for public transport
First Student EQT Infrastructure ▪ Largest student transportation provider in North America ▪ Global investment organisation founded in 1994 ▪ c.1,000 multi-year contracts from 435 locations in 40 US states and ▪ Parent EQT AB listed on the Swedish stock exchange (market cap of c.$30bn) 7 Canadian provinces; c.42,000 owned or operated vehicles ▪ c.€84bn commitments since inception across multiple strategies; 99 portfolio companies today globally First Transit ▪ Deployed $11bn in equity in North America since 2012 ▪ One of the largest private sector providers of public transit ▪ Active investor in infrastructure since 2007, with almost €30bn raised across five funds management and contracting in North America ▪ North American infrastructure investments include Direct ChassisLink, Restaurant ▪ Operates 12,500 vehicles from 295 locations Technologies Inc. and WASH Multifamily Laundry Systems
23 April 2021 Proposed sale of First Student and First Transit 2 Unlocking the value
▪ Transaction follows full review of all strategic options by the Board and is the best means to unlock value for all shareholders
▪ Agreement with EQT Infrastructure follows a comprehensive and competitive process
▪ Recognises long-term, strategic value of First Student and First Transit
Key transaction terms: $m £m1 ▪ Certain long term debt and debt like items including pension, self-insurance and environmental liabilities relating to First Student and First Transit are transferred to Headline Enterprise Value 4,555 3,255 the Purchaser
▪ Consideration payable by the Purchaser in cash at Completion is after customary working Self-insurance provisions (545) (390) capital and locked box adjustments
▪ Agreement includes First Transit earnout of up to $240m First Transit earnout (240) (170)
− Full $240m would be received by FirstGroup on achievement of a First Transit enterprise value of c.$765m, with FirstGroup sharing in any upside above $380m, Debt transferred to the Purchaser (305) (220) either three years after completion or on a sale if earlier Pension and environmental liabilities, working capital and (400) (285) other adjustments, transaction costs etc
Net Disposal Proceeds 3,065 2,190
1 Based on USD:GBP rate $1.40: £1.
23 April 2021 Proposed sale of First Student and First Transit 3 Use of proceeds
Board focused on balancing five principal considerations in determining the use of proceeds:
▪ Return value to shareholders, recognising value achieved on the sale of First Student and First Transit
▪ Address the substantial legacy liabilities of the Group, including for pensions and insurance in North America and for rail termination sums in the UK
▪ Repay the liquidity buffer provided by the UK Government’s CCFF scheme in response to the pandemic
▪ Make a responsible contribution to address the UK Bus pension scheme deficit, recognising its funding plans had relied on a parent company guarantee supported in part by First Student and Transit earnings
▪ Ensure Retained Group has adequate financial resources in the short term for a range of pandemic-related eventualities as well as a path to an appropriate balance sheet for the medium term
23 April 2021 Proposed sale of First Student and First Transit 4 Use of proceeds
Transaction strengthens balance sheet, addresses key legacy liabilities of the Group, and allows for a return of c.£365m or 30p per share in value to shareholders: 1 Significant reduction in level of debt for Retained Group: £m ▪ March 2021 net debt of c.£1.4bn, of which c.£220m will transfer with Target businesses ▪ £200m 2024 bond and c.£45m in First Bus finance leases will be retained Net Disposal Proceeds (excluding Transit earnout)1 2,190 ▪ Remaining c.£935m of debt instruments and facilities to be repaid
Reduction of the Group’s financial indebtedness, including 1 (935) repayment of £300m CCFF loan from UK Government 2 Principally for redemption of £325m 2022 bond and US private placement notes
3 c.£345m of cash retained to discharge certain liabilities: 2 Make whole costs towards repayment of Group debt instruments (65) ▪ To be used to buy out Greyhound pension and de-risk self-insurance liabilities, make payments for rail franchise termination sums and other short term capital requirements 3 Cash retained to discharge certain liabilities (345) 4 UK Defined Benefit pension schemes de-risked: ▪ £220m cash contribution and further £95m held in escrow for First Bus scheme – moves Sub-total before contribution to UK pension schemes 845 toward a low dependency funding position; £21m also held in escrow by Group scheme ▪ Escrow amounts may be released back to Group in future2 4 Contribution to UK Bus and Group pension schemes (336) 5 c.£100m in pro forma net debt3 as at 31 March 2021:
Net proceeds available to Retained Group 509 ▪ c.£145m gross cash retained (offsetting c.£245m in bond and finance leases), to ensure Retained Group has adequate financial resources available while UK end markets begin to emerge from pandemic 5 Cash in Retained Group (144) 30p per share (c.£365m) proposed return of value to shareholders during current calendar year: Proposed return of value to shareholders 365 ▪ Potential for further distributions to shareholders in due course, including following resolution of Greyhound, crystallisation of the First Transit earnout, and as UK end 1 See page 3 for detail of Net Disposal Proceeds. markets recover 2 Following the conclusion of subsequent triennial valuations and subject to scheme performance. 3 Excluding First Rail ring-fenced cash and IFRS 16 right-of-use leases.
23 April 2021 Proposed sale of First Student and First Transit 5 Transaction timeline
▪ Transaction conditional on FirstGroup shareholder and North American regulatory approval
▪ Shareholder circular expected to be published as soon as practicable
▪ Shareholder General Meeting to approve transaction expected to be held in calendar Q2 2021
▪ Completion expected in calendar H2 2021 following North American regulatory approval timetable
▪ Proposed return of value to shareholders to be executed during current calendar year; distribution mechanism will be announced in due course following consultation with major shareholders
23 April 2021 Proposed sale of First Student and First Transit 6 The Retained Group is a strong platform for sustainable value creation and shareholder returns A strong platform for further value creation
A leader in public transportation in the UK, with a well-capitalised balance sheet and a strategy focused on the future
1 Leading positions in bus and rail transportation in the UK
2 Inflection point for growth, underpinned by supportive government and social policies
3 Digital innovation to attract more customers, enhance business efficiency and flexibility
4 First Bus: ready to complete trajectory to 10% margin post-pandemic
5 First Rail: well-placed for lower risk, long term and cash generative rail operations
6 Opportunities from adjacent markets in UK bus and rail and new geographies over time
7 Critical enabler of society’s ESG goals, accelerating the transition to a zero-carbon world
23 April 2021 Proposed sale of First Student and First Transit 8 1 Leading positions in bus and rail transportation in the UK
First Bus and First Rail are leaders in their respective sectors of UK public transport
▪ One of the largest regional bus operators, serving two thirds of the ▪ UK’s largest rail operator, many years experience running all types of UK’s 15 largest conurbations passenger rail ▪ A leading operator in majority of its markets, including major urban ▪ Four DfT-contracted operations (GWR, SWR, TPE, Avanti West areas such as Glasgow, Bristol and Leeds Coast) and two open access routes (Hull Trains and East Coast from September) Janette Bell Steve Montgomery MD First Bus MD First Rail
20% 14,000 27% 17,000 share of UK regional Share of UK passenger employees across all five employees bus market rail revenues train companies
, First Bus carried Our TOCs carried £836m £4.1bn 500m FY20 revenues of current 340m FY20 revenues passengers in FY20 rail operations passengers in FY20
5,200 vehicles in our fleet
Note: Rail revenue pro forma for full year of Avanti West Coast.
23 April 2021 Proposed sale of First Student and First Transit 9 2 Inflection point for growth, underpinned by supportive government and social policies
Significant opportunities for public transport as society looks to ‘build back better’
Secular trends Our role English National Bus Strategy, 15 March 2021
▪ £3bn in bus funding during current Parliament, including for 4,000 zero ▪ Facilitating modal shift from private cars to buses and trains with emission buses Climate lower per-passenger mile environmental impact change ▪ Zero Emission Bus Regional Areas (ZEBRA) scheme funds up to 75% of ▪ Transitioning our own vehicles to zero-carbon differential cost of zero emission buses and related infrastructure vs diesel ▪ Local authorities required to cooperate more closely with operators to play their part in improving services ▪ Public transport is integral to meeting the economic growth “Levelling up” agenda, particularly for “left behind” towns and cities ▪ Emphasis on bus prioritisation, enhancing passenger convenience and other and economic measures to grow bus patronage and accelerate modal shift recovery ▪ Buses are most cost-effective way to expand the scale and interconnectivity of communities and address city centre decline ▪ Enhanced Partnerships expected to be the approach chosen by most local authorities to access funding ▪ BSOG consultation to change from current diesel use basis Liveable ▪ Managing demand for easy-to-use public transport services in towns and cities in response to congested roads, deteriorating cities air quality and higher costs of motoring “Buses are lifelines and liberators, connecting people to jobs they couldn’t otherwise take, driving pensioners and young people to see their friends, sustaining town centres and protecting the environment. As we build back from the pandemic, better buses will be one of our first acts of levelling up… our reforms will make buses the transport of choice, reducing the number of car journeys and improving quality of life ▪ Supporting Government’s objectives via our own employees for millions” Boris Johnson, Prime Minister Green jobs and those in the public transport industry supply chain
Key long-term Scottish bus funding schemes
Smarter ▪ More convenient customer experiences – ticketing, travel info, ▪ Scottish Ultra-Low Emission Bus Scheme (SULEBS) funding for up to 75% of customer mobile, contactless options the differential costs of ultra low/zero emission buses and related infrastructure solutions ▪ More efficient multi-modal transport solutions vs diesel and BSOG enhancement for zero-emissions vehicles ▪ More than £500m in funding for bus priority infrastructure
23 April 2021 Proposed sale of First Student and First Transit 10 3 Digital innovation to attract more customers, enhance business efficiency and flexibility
Innovating to support convenience for our First Bus customers…
Real-time seat capacity available on Bus app ‘Tap and Cap’ ticketing ▪ First bus app to allow customers to check how many ▪ Daily and weekly tickets via contactless seats are available on an approaching bus, including ▪ Customers never pay more than the price of a day or the wheelchair space week ticket, no matter how many journeys they make ▪ Implementation was fast-tracked at start of pandemic ▪ Rolling out to multiple locations across the network to assist customers with social distancing following successful trials
…for our First Rail customers…
Avanti smart cards Evo-rail 5G onboard WiFi ▪ Customers now able to store tickets on one card, for ▪ FirstGroup and Blu Wireless, working in partnership greater security and convenience compared with with DfT and Network Rail, are pioneering the use of traditional paper tickets 5G technology to enable reliable streaming, rapid ▪ Smart tickets now account for 70% of Avanti West browsing and connectivity on the railways Coast journeys sold ▪ SWR first network to benefit from FirstGroup’s ▪ Smart cards are now available on all our franchises proprietary technology solution, Avanti to follow in 2021
…and to drive further efficiencies in our business
Bus network and driver management system First Rail integrated passenger contact centre ▪ Optibus advanced data analytics system reduces time ▪ Built bespoke contact centre for several First Rail required to create and amend bus schedules operations, based on scalability and latest technology ▪ Uses machine learning to optimise driver/vehicle hours ▪ High levels of customer satisfaction and efficiency at much lower cost vs. previous outsourced approach ▪ Deployment due to complete in current year ▪ Third party opportunities
23 April 2021 Proposed sale of First Student and First Transit 11 4 First Bus: ready to complete trajectory to 10% margin post-pandemic
Margin progress was interrupted by the pandemic – but transformation underpinning it has continued
A Efficiency actions underway pre-pandemic ▪ Operational/engineering efficiency action plans were accelerated during pandemic 10% ▪ Divisional overhead also reconfigured – £3m per annum in savings target ▪ Both enhance operational gearing to future volume growth
7.4% A B Data-driven pricing strategy ▪ More personalised and agile pricing strategy underway, assisted by increasing B 5.7% 5.5% proportion of tickets sold contactless or online ▪ Ticket initiatives (e.g. tap and cap) and other innovations help drive revenue 4.3% CDE C Near-term passenger volume reset post-pandemic ▪ Near-term passenger demand unclear at present, but volumes quickly reached c.60% of pre-pandemic levels in some areas when some restrictions eased during 2020 1 ▪ Currently planning for a range of passenger volume scenarios – between 80 and 90% during first year after social distancing restrictions on public transport come to an end
D Realign networks post-pandemic 2017A 2018A 2019A 2020A margin Medium term ▪ Plans ready to reshape routes and timetables to align with observed demand and margin margin margin (pandemic margin growth potential when UK government’s bus support scheme ends affected) ▪ Actions will be based on real-time passenger flow data now available following digital transformation initiated prior to pandemic
Targeting 10% margins in first full financial year E Resolve underperforming locations post-pandemic ▪ Possible that post-pandemic passenger demand may no longer support viable after social distancing restrictions on public transport end commercial operations on some routes ▪ Local Authority engagement under Enhanced Partnership or franchising structure to explore options for such routes under new National Bus Strategy funding mechanisms ▪ Route/location reductions may also need to be considered
23 April 2021 Proposed sale of First Student and First Transit 12 5 First Rail: well-placed for lower risk, long term and cash generative rail operations
As the largest incumbent with four UK rail operations expected to be in place until at least 2023, we will benefit from the transition to a new contract structure with a far better balance of risk and reward
Previous UK passenger rail franchising structure Emerging National Rail Contract structure
Contractual ▪ Franchising system; commitments to key deliverables and schedule of ▪ Concession-based National Rail Contract; operators earn annual structure annual franchise premium payments at start of contract management fee for service delivery with performance incentives
Passenger ▪ Capabilities/plans assessed as part of bids and important for delivering ▪ Operational skills and expertise directly incentivised through service delivery revenue goals – but not directly incentivised passenger service performance metrics
▪ High – expected passenger growth the core driver of bid differentiation Revenue risk ▪ None – passenger volume and revenue variability lies with DfT ▪ Some franchises included limited macroeconomic risk sharing with DfT
▪ High – some offset mechanisms for network or other operator incidents, Cost risk ▪ Low – recoverable costs clearly defined but limited protection
Contingent ▪ High – Commitments dependent on scale of operators’ multi-year ▪ No significant contingent capital risk expected capital risk revenue plans relative to DfT baseline
▪ Low single-digit margin opportunity, with little upfront capital and good ▪ No revenue risk and minimal cost and contingent capital risk Proposition for cash conversion if bid expectations were met… ▪ Annual fee equivalent to low single-digit margin expected – more shareholders ▪ …but volatile cash flows and substantial contingent capital at risk, consistent cash generation each year, greater resilience including for events well outside of operators’ influence
23 April 2021 Proposed sale of First Student and First Transit 13 6 Opportunities from adjacent markets in UK bus and rail and new geographies over time
Growth potential in our core addressable markets with opportunities to leverage our considerable industry knowledge, skills and experience in adjacent markets
▪ Additional post-pandemic local authority tenders through ▪ East Coast (starting later in 2021), other open access opportunities new Enhanced Partnerships ▪ Evo-rail partnership for 5G WiFi – first contract signed Adjacent UK ▪ Further B2B private contracts ▪ System developments – multi-operator call centre, train location opportunities ▪ Other charter projects analytics, etc ▪ Third party Electric Vehicle charging, Mobility as a Service (MaaS), ▪ Rail consultancy, building on HS2 and other expertise demand responsive transport (DRT), autonomous vehicles, etc
Geographic ▪ Bus services and solutions internationally over time ▪ Light rail contracting opportunities internationally over time opportunities
Bus, rail and tram Bus, rail and tram journeys in Great Britain1 journeys in Great Britain1 Tram 4% Tram 4% ●Addressable UK passenger operator income 1.7bn rail of £12.8bn in 2020 comprised 91% Rail 27% 4.5bn bus ●£4.2bn regional bus market size, made up of Rail 27% journeys passenger revenue and 9% net support from journeys Core UK c.60% passenger fares, c.25% Government addressable public 2.1bn concessionary travel; remainder includes London ●23 Train Operating Companies (TOCs) Bus 69% BSOG and tenders from Local Authorities National Rail transport Bus 69% provided more than 20k services a day market ●First Bus also operates in B2B market for addressable 2.4bn market size ●FirstGroup operates four contracted rail Regional short and long-term bus charter services of £12.8bn TOCs and Hull Trains open access operation Regional Bus addressable market size of £4.2bn
Source: Company Information, Department for Transport – Transport Statistics Great Britain for year to end March 2020.
23 April 2021 Proposed sale of First Student and First Transit 14 7 Critical enabler of society’s ESG goals, accelerating the transition to a zero-carbon world
FirstGroup has a clear social purpose – we provide easy and convenient mobility, improving quality of life by connecting people and communities
▪ Public transport has proven to be critical, long-term green infrastructure, as demonstrated through the pandemic FirstGroup will continue to build on its strong ESG credentials: ▪ FirstGroup is an attractive proposition – already low carbon, and with a long-term commitment to a zero-emission trajectory that will increase our EU Green Taxonomy eligibility year by year
▪ As part of our Mobility Beyond Today sustainability framework we are formally committed to: Top 200 cleanest 98th percentile in sector − First Bus: operating a zero-emission fleet by 2035, with no plans to purchase new diesel buses after 2022 publicly traded firms Constituent for 18 worldwide consecutive years − First Rail: helping deliver the UK Government’s goal to remove all diesel trains from service by 2040
− implementing the TCFD’s recommendations, publicly disclosing our progress in helping to combat climate change and improve local air quality in our 2021 reporting ESG score in top 15% ESG risk: ‘low’, of the industry globally. − setting a science-based target (SBT) for reaching net zero emissions by 2050 or earlier, in accordance with the SBT Ranked 14th of 323 in Included in 2021 S&P initiative – the first UK road and rail operator to do so sector globally Sustainability Yearbook
The following six UN Sustainable Development Goals (‘SDGs’) are those where we as a public transport provider can have ‘Leader’ in managing Consistently in the top the greatest impact: ESG risks and quartile of global opportunities, AA rating industry respondents
‘ESG Prime’ rating from Longstanding ISS ESG – top decile participant in CDP
23 April 2021 Proposed sale of First Student and First Transit 15 Investment case underpins financial framework
The Retained Group will be a cash generative business with a well-capitalised balance sheet and an operating model that will support an attractive dividend
▪ Bus: Planning for a range of post-pandemic scenarios; central case envisages passenger volumes recover to between c.80 and 90% of pre- Revenue pandemic levels during first year after social distancing restrictions on public transport end, with further growth thereafter ▪ Rail: opportunities to build on base business of four contracted operations with no revenue risk
▪ Bus: targeting 10% margin in first full financial year after social distancing restrictions on public transport end Profitability ▪ Rail: profitability driven by delivering against performance targets while adding earnings in adjacent rail opportunities ▪ Reduction in central costs of at least £10m per annum from FY23
▪ Bus: c.£90m per annum from FY23, mainly driven by zero-emission bus fleet commitments Investment ▪ Rail: expected to continue to be cash capital-light under National Rail Contracts
Leverage ▪ Targeting less than 2.0x net debt (pre-IFRS 16): Bus and non-contracted Rail EBITDA, plus contracted Rail dividends, minus central costs
▪ Intention to pay regular dividends to shareholders commencing in FY23; subject to a normalisation of trading conditions post-pandemic, targeting Dividend annual dividend around 3x covered by new Adjusted Profit After Tax measure policy ▪ Adjusted Profit After Tax defined as Bus and non-contracted Rail adjusted operating profit, plus contracted Rail dividends, minus central costs, minus treasury interest, minus tax
23 April 2021 Proposed sale of First Student and First Transit 16 Delivering the strategy, unlocking the Retained Group’s potential
▪ Long-term strategic value achieved for high quality First Student and First Transit businesses
▪ Transaction substantially rationalises portfolio and addresses significant longstanding liabilities
▪ 30p per share or c.£365m proposed return of value to shareholders following sale completion
− Potential for further distributions to shareholders in due course, including following crystallisation of the First Transit earnout, resolution of Greyhound and as UK end markets recover
▪ Retained Group has a strong platform on which to create sustainable value:
− Well-capitalised balance sheet and cash generative operating model, supporting attractive dividend
− The vital role of public transport has never been clearer – critical to economic growth, combating climate change and creating vibrant, sustainable communities
23 April 2021 Proposed sale of First Student and First Transit 17 Appendix Greyhound
▪ Greyhound remains non-core and we continue to pursue all exit options to conclude the Group’s portfolio rationalisation strategy
− Sale discussions ongoing; process affected by the pandemic’s impact on this passenger volume-based business
− Effect on financial performance continues to be mitigated by tight capex and cost control, reduced operating mileage as well as CARES Act 5311(f) grants for operating key services
▪ c.$250m of the Transaction sale proceeds will be utilised to buy out legacy pension and de-risk self-insurance liabilities associated with Greyhound
▪ Liability de-risking will result in a better capitalised balance sheet for Greyhound, which also includes its substantial property portfolio
− The Group will continue to actively manage the property portfolio for value as part of Greyhound’s network transformation plans
23 April 2021 Proposed sale of First Student and First Transit 19 Historical financials for First Student and First Transit
12 months ended 6 months ended 30 Unaudited, £m 31 March 2018 31 March 2019 31 March 2020 September 2020
Revenue 2,840.6 2,918.2 3,109.1 888.9
EBITDA 414.5 423.0 450.1 96.0
EBITDA margin 14.6% 14.5% 14.5% 10.8%
Adjusted operating profit1 214.2 219.8 186.7 (36.8)
Adjusted operating profit1 margin 7.5% 7.5% 6.0% n/m
Note: Unaudited, Transaction perimeter. 1 Before other intangible amortisation charges and certain other items.
23 April 2021 Proposed sale of First Student and First Transit 20 Retained Group pro forma net debt1 overview
Underlying Cash held for legacy liabilities 31 March 2021 £m £m $m
Gross debt Greyhound pension and insurance 180 250
Rail termination sums and short term - Bonds (200) 165 capital requirements
- Finance leases and other excl. IFRS 16 (45) Total 345
Total (245)
Gross cash excl. ring-fenced cash 145
Pro forma net debt (pre-IFRS 16 leases and ring- (100) fenced cash)
Note: Unaudited. 1 Retained Group of Bus, Rail and Corporate. Excludes non-core Greyhound net debt of £17m. 2 As at 31 March 2021, unaudited rail ring-fenced cash was c.£640m and IFRS 16 lease liabilities relating to the Retained Group were c.£1.7bn.
23 April 2021 Proposed sale of First Student and First Transit 21 Pro forma statement of net assets
30 Sep 2020 FirstGroup Adjustment for Greyhound Pro forma Greyhound adjusted for Transaction (as reported Student and legacy liability Retained property sales Greyhound fund flows 30 Sep 2020) Transit1 de-risking Group2,3 £m, unaudited property sales Non-current assets 5,939 (19) 5,920 (3,125) 0 0 2,795 Current assets 1,171 0 1,171 (421) 0 0 750 Total assets 7,110 (19) 7,091 (3,546) 0 0 3,545 Current liabilities (2,297) 0 (2,297) 546 0 26 (1,725) Non-current liabilities (829) 0 (829) 328 336 218 53 Total liabilities (3,126) 0 (3,126) 874 336 244 (1,672) Segmental net assets per notes to the accounts 3,984 (19) 3,965 (2,672) 336 244 1,873
Analysis of net debt: Bonds (875) 0 (875) 0 675 0 (200) CCFF, bank loans, overdrafts (1,169) 0 (1,169) 0 1,169 0 0 Other gross debt pre-IFRS 16 lease liabilities (210) 0 (210) 155 0 0 (55) Cash excluding ring-fenced cash3 701 97 798 2,380 (2,629) (264) 285 Net (debt)/cash (pre-IFRS 16 and ring-fenced cash) (1,553) 97 (1,456) 2,535 (785) (264) 30 Ring-fenced cash 738 0 738 (12) 0 0 726 IFRS 16 lease liabilities (2,140) 0 (2,140) 142 0 0 (1,998) Net (debt)/cash (post-IFRS 16 and ring-fenced cash) (2,955) 97 (2,858) 2,665 (785) (264) (1,242)
Group items (10) 0 (10) 0 0 0 (10) Taxation (3) 0 (3) 28 0 0 25 Total net assets 1,016 78 1,094 21 (449) (20) 646
Memo: Balance sheet net pension (liability) / asset (360) 0 (360) 55 336 170 201 Memo: Greyhound net (liabilities) / assets with IFRS 16 (171) (19) (190) 0 0 244 54 assets and liabilities allocated Note: Unaudited. US dollar balances translated at 30 September rates. 1 First Student and First Transit cash adjustment comprises net proceeds excluding a working capital peg movement. 2 Retained Group of First Bus, First Rail, Corporate, and non-core Greyhound net assets. 3 Proforma closing net debt does not contemplate cash flows for rail termination sums and short term capital requirements.
23 April 2021 Proposed sale of First Student and First Transit 22 Pro forma historical financials for Retained Group
12 months ended 6 months ended 30 Unaudited, £m 31 March 2018 31 March 2019 31 March 2020 September 2020 Retained Group revenue 3,554.6 4,205.2 4,642.8 2,212.7 First Bus 879.4 876.1 835.9 311.0 First Rail 1,985.0 2,683.7 3,203.6 1,741.9 Group items - 0.3 0.1 - Continuing UK Group 2,864.4 3,560.1 4,039.6 2,052.9 Greyhound 690.2 645.1 603.2 159.8
First Bus and Group items EBITDA 87.7 78.7 82.9 36.2 Greyhound EBITDA 58.8 38.6 35.3 (0.9)
Retained Group adjusted operating profit1 102.3 94.3 69.7 47.3 First Bus 50.2 65.1 46.1 17.4 First Rail 57.5 70.7 70.4 59.4 Group items (30.9) (44.1) (35.2) (13.7) Continuing UK Group 76.8 91.7 81.3 63.1 Greyhound 25.5 2.6 (11.6) (15.8)
Retained Group adjusted operating profit1 margin 2.9% 2.2% 1.5% 2.1% First Bus 5.7% 7.4% 5.5% 5.6% First Rail 2.9% 2.6% 2.2% 3.4% Continuing UK Group 2.7% 2.6% 2.0% 3.1% Greyhound 3.7% 0.4% (1.9)% (9.9)%
1 Before other intangible amortisation charges and certain other items. From 2021 Tramlink will be reported within First Rail (previously in Group items). Historic financials above have been adjusted for this.
23 April 2021 Proposed sale of First Student and First Transit 23 Disclaimer
This document includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including (but not limited to) the terms anticipates, believes, could, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this document and include, but are not limited to, statements regarding FirstGroup plc (“FirstGroup”) and its intentions, beliefs or current expectations concerning, among other things, the business, results of operations, prospects, growth and strategies of the Group, First Student, First Transit and the Retained Group.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of operations of the Group, First Student, First Transit and the Retained Group, and the developments in the industries in which they operate, may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. In addition, even if the results of operations of the Group, First Student, First Transit and the Retained Group and the developments in the industries in which they operate are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in law and regulation, currency fluctuations, changes in business strategy and political and economic uncertainty.
Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this document reflect FirstGroup’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to FirstGroup and its operations, results of operations and growth strategy.
Other than in accordance with its legal or regulatory obligations (including under the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), the Group is not under any obligation and the Group expressly disclaims any intention or obligation (to the maximum extent permitted by law) to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Percentages in this document have been rounded and accordingly may not add up to 100 per cent. Certain financial data have also been rounded. As a result of this rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data.
The Unaudited Pro Forma Financial Information is shown for illustrative purposes only and because of its nature addresses a hypothetical situation. It does not represent the actual financial position of the Retained Group. Furthermore, it does not purport to represent what the Retained Group’s financial position would actually have been if the Transaction had been completed on the indicated date and is not indicative of the results that may or may not be expected to be achieved in the future.
Unless otherwise stated, no statement in this document is intended as a profit forecast or estimate for any period and no statement in this document should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Group, First or the Retained Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for the Group, First Student, First Transit or the Retained Group, as appropriate.
This document is not a circular or a prospectus and it does not, and is not intended to, constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation of any offer to sell, dispose of, purchase, acquire or subscribe for, any security. FirstGroup’s shareholders are advised to read carefully the circular that the Group will publish in due course.
23 April 2021 Proposed sale of First Student and First Transit 24