Preliminary Results 2010
1

This document is solely for use in connection with a briefing on 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 forwardlooking 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.
2

3

 Successful management of business through economic cycle

Further revenue growth

Tight cost control

Continued investment

Robust financial position
 Adjusted EPS 18.7p (2009: 22.9p)
 8.3% increase in full year dividend per share
 Positive outlook for 2010/11
4

5

UK Bus operating profit
North America operating profit
North America joint ventures’ profit after tax
UK Rail operating profit
Virgin Rail Group profit after tax
Restructuring costs, group overheads and other items
Operating profit
Finance charges (net)
Tax
Profit excluding intangibles and exceptionals
Intangibles and exceptionals, net of tax
Reported profit from continuing operations
Year to
30 April 10
£m
126.1
9.1
7.6
41.6
19.2
(11.6)
192.0
(30.7)
(27.2)
134.1
(26.3)
107.8
Year to
30 April 09
£m
125.6
25.2
0.3
55.7
34.0
(13.0)
227.8
(31.4)
(33.0)
163.4
(29.9)
133.5
Change
£m
0.5
(16.1)
7.3
(14.1)
(14.8)
1.4
(35.8)
0.7
5.8
(29.3)
3.6
(25.7)
6

Revenue (£m)
Like-forlike revenue (£m)
Operating profit (£m)
Operating margin (%)
Estimated like-for-like passenger journeys (m)
Like-for-like vehicle miles operated (m)
Year to
30 April 10
875.4
839.5
126.1
14.4%
650.1
314.7
Year to
30 April 09
830.8
805.9
125.6
15.1%
653.0
319.2
Change
5.4%
4.2%
0.4%
(0.7)%
(0.4)%
(1.4)%
2009/10 performance
 Robust financial performance despite weak
UK economy and some severe weather
 Flexible services and cost base
 Revenue growth: Spring 2009 fare increases; concessions
 £28.1m more fuel and pensions costs but profit maintained
Outlook
 Slowing revenue growth as Spring 2009 fare increases now in base revenue
 Relatively modest 2010/11 fare & revenue growth
 Significant fuel cost reduction in 2010/11

Fuel costs likely to rise in 2011/12
 Well placed for 2010/11 profit growth
7

Revenue
– wholly owned (US$m)
Revenue – joint ventures (US$m)
Revenue - total (US$m)
Operating profit – wholly owned (US$m)
Operating profit
– joint ventures (US$m)
Operating profit – total (US$m)
Operating margin (%)
Year to
30 April 10
426.3
64.1
490.4
14.6
12.8
27.4
5.6%
Year to
30 April 09
499.5
9.6
509.1
42.3
0.5
42.8
8.4%
Change
(3.7)%
(36.0)%
(2.8)%
2009/10 performance Outlook
 Weaker revenue and profit – weak North
American economy, some severe weather, and

 higher fuel costs
Strong growth at megabus.com – full-year profit
Positive performance from Twin America
 Signs of improving revenue trends but patchy by geography and product type
 Significant fuel cost reduction in 2010/11
 Fuel costs likely to rise in 2011/12
 Evaluating megabus expansion potential
 2010/11 profit recovery potential
* Includes US$60.0m for business transferred to Twin America from 31 March 2009
8

Revenue (£m)
Like-forlike revenue, excluding tram (£m)
Operating profit (£m)
Operating margin (%)
Estimated passenger miles
– S Western (m)
Estimated passenger miles – E Midlands (m)
Year to
30 April 10
1,026.7
968.9
41.6
4.1%
3,262.0
1,214.9
Year to
30 April 09
977.7
932.4
55.7
5.7%
3,298.4
1,219.6
Change
5.0%
3.9%
(25.3)%
(1.6)%
(1.1)%
(0.4)%
2009/10 performance
 Central London employment levels better than feared
 Cost reduction programme – over £70m annualised savings – protected profit
 Positive resolution of open items with Department for Transport – e.g. revenue support, smartcards
 Improved customer satisfaction
Outlook
 Improving revenue trends in recent months
 East Midlands Trains likely to be loss making in
2010/11 and 2011/12 – revenue support period begins November 2011
 South Western Trains revenue support now confirmed from April 2010
 Well positioned to deliver another year of good UK
Rail profitability in 2010/11
9

Revenue
– 49% share (£m)
Operating profit 49% share (£m)
Operating margin (%)
Dividends received (£m)
Estimated passenger miles
Year to
30 April 10
355.3
25.5
7.2%
25.1
3,318.8
Year to
30 April 09
322.3
42.7
13.2%
43.9
2,757.4
Change
10.2%
(40.3)%
(6.0)%
(42.8)%
20.4%
2009/10 performance
 Strong revenue growth - January 2009 capacity increases; improved Network Rail performance; investment in marketing
 Significantly improved punctuality

90% customer satisfaction
Outlook
 Already benefiting from revenue support

Exploring franchise extension and retendering opportunities
10

Target revenue
– year to 31 March 2010 (£m)
Actual revenue – year to 31 March 2010 (£m)
Revenue shortfall (£m)
Theoretical revenue support (£m)
Actual revenue support (£m)
South
Western
785.9
703.8
(82.1)
43.7
Nil
East
Midlands
303.8
257.3
(46.5)
28.7
Nil
West
Coast
795.6
671.0
(124.6)
77.4
77.4
Revenue support bands
 Up to 2% below target revenue
– no revenue support

Between 2% and 6% below target revenue
– 50% revenue support
 Over 6% below target revenue – 80% revenue support
Notes
 “Revenue” for this purpose includes items other than reported revenue such as Network Rail performance regime payments, commissions payable and commissions receivable
 Target revenue figures include the effects of indexation and other required adjustments
 Theoretical revenue support shows the amounts that would have been receivable for the year to 31 March 2010 if the train company were contractually entitled to revenue support
11

Citylink joint venture (£m)
Group overheads (£m)
Restructuring costs (nonexceptional) (£m)
Intangible asset expenses (£m)
Posttax exceptional items (£m)
Year to
30 April 10
1.2
(11.6)
(1.2)
(11.6)
(11.1)
(13.0)
Year to
30 April 09
1.0
(11.5)
(2.5)
(13.0)
(13.4)
(18.7)
Change
0.2
(0.1)
1.3
1.4
2.3
5.7
 Exceptional items include £20.5m of ineffective interest rate derivatives arising in connection with December 2009 bond issue
12

Net Group finance charges* (£m)
EBITDA from continuing operations and joint ventures* (£m)
Yearend net debt (£m)
Net Debt/EBITDA*
EBITDA*/Net finance charges*
Year to
30 April 10
(30.7)
283.9
(296.7)
1.0x
9.2x
Year to
30 April 09
(31.4)
300.1
(340.1)
1.1x
9.6x
Change
(2.2)%
(5.4)%
(12.8)%
(0.1)x
(0.4)x
13
* excluding exceptional items

Excluding intangible asset expenses and exceptional items
Intangible asset expenses
Exceptional items
Reclassify joint venture taxation for reporting purposes
Reported in income statement
Cash tax paid (net)
Year to 30 April 2010
Pre-tax
Profit
£m
Tax
£m
Rate
%
168.7
(11.1)
(24.3)
133.3
(7.4)
(34.6)
1.7
7.4
(25.5)
7.4
20.5%
15.3%
30.5%
19.1% n/a
125.9
(18.1)
(0.7)
14.4%
14

EBITDA from Group companies before exceptional items
Operating exceptional items
Loss on disposal of plant and equipment
Equity-settled share based payment
Dividends from joint ventures
Movement in retirement benefit obligations
Working capital movements
Net interest paid
Tax paid
Net cash from operating activities
Net capital expenditure including new hire purchase and finance leases
Acquisitions /disposals of businesses, intangibles and investments
Token sales and redemptions/others
Cash generation
Foreign exchange/income statement movements
Equity dividends
Share capital movements
Decrease in net debt
Opening net debt
Closing net debt
Year to
30 April
2010
£m
255.9
(1.8)
2.0
6.3
35.7
(17.2)
(10.7)
(53.1)
(0.7)
216.4
(101.9)
(1.4)
(0.2)
112.9
6.3
(76.7)
0.9
43.4
(340.1)
(296.7)
15

UK Bus
North America
UK Rail
Cash spent on capex*
£m
(32.5)
(10.6)
(46.1)
(89.2)
New hire purchase and finance leases
£m
(63.8)
(1.9)
Nil
(65.7)
Impact of capex on net debt
£m
(96.3)
(12.5)
(46.1)
(154.9)
Disposal proceeds**
£m
4.1
Nil
48.9
53.0
Net
2009/10
Actual
£m
(92.2)
(12.5)
2.8
(101.9)
* Excludes capitalised intangible assets and assets acquired through business combinations
** Excludes proceeds from selling businesses
16

Net Debt (£m)
Undrawn, committed bank facilities (£m)
Average debt maturity (years)
Net Debt / pre-exceptional EBITDA
Pre-exceptional EBITDA / Finance charges
30 April 10 30 April 09
296.7
340.1
345.9
508.0
6.3
1.0x
9.2x
2.3
1.1x
9.6x
Change
(12.8)%
(31.9)%
4.0
(0.1)x
(0.4)x
2009/10 performance

Robust financial position
 Debt maturity extended

Reliance on bank debt reduced
 £400m 5.75% bonds issued, due Dec 2016
 c.£180m new / extended bonding facilities
 £285m facilities cancelled by Group
Outlook

Commitment to investment grade credit rating
 Re-financing of bank facilities expiring 2012

Investment through the economic cycle
 Capital discipline
17

Track record of relatively low leverage
Year
2003/4
2004/5
2005/6
2006/7
2007/8
2008/9
2009/10
Net debt/EBITDA
0.3
1.0
0.7
(0.8)
1.2
1.1
1.0
Investment grade credit ratings of new bonds
Agency
S&P
Fitch
Moody’s
Rating
BBB-
BBB
Baa2
Strong conversion of profits to cash
Net cash flows from operating activities after tax
Profit after tax
Exclude:
Depreciation
Amortisation
Non-cash net gains on disposals of businesses and fixed assets
Profit after tax excluding significant non-cash items
5 years to
30 Apr 10
£m
1,155.5
887.0
361.2
72.7
(145.0)
1,175.9
Conversion ratio 98%
18

UK Bus/Central
North America
UK Rail
2010
Pension expense
£m
22.0
1.7
21.1*
44.8
2009
Pension expense
£m
15.3
1.0
12.4
28.7
2010
Cash contributions
£m
33.8
1.0
27.2*
62.0
2009
Cash contributions
£m
37.3
1.0
22.4
60.7
* Includes £5.7m increase from salary sacrifice

Posttax deficit of £145.7m (2009: £57.7m)
 Accounting value of pension assets, liabilities and costs will continue to vary with market fluctuations and assumptions

Rail
– risks mitigated with obligations limited to contributions payable over duration of franchises

Bus
– schemes closed to new entrants and contributions have stabilised
19

 Results significantly ahead of original expectations
 Positive management action underpins profitability
 Strong financial position and reduced leverage
 Track record of strong cash conversion
 Positive outlook for 2010/11
 Encouraging start to the new financial year
20

21

22
 Comparative fares data extracted from TAS National Fares Survey 2009. The tables compare urban single fare levels by bus operator ownership.

Operational performance Customer service
23

Figures used refer to the measure of train punctuality
– also known as PPM (public performance measure) – which is commonly used throughout Europe. For long distance operators, such as East Midlands Trains, this shows the percentage of trains arriving within ten minutes of timetabled arrival at final destination.
London and south east operators (including South Western Trains), and regional operators show the percentage arriving within five minutes of the timetabled arrival. data covers the period 3 May 2009 to 1 May 2010. National Rail average is for all franchised train operating companies.

Data extracted from National Passenger Survey, Spring Wave 2010. Percentages are for overall satisfaction The National Passenger Survey (NPS) is conducted twice a year from a representative sample of passenger journeys across the UK. It surveys passengers’ overall satisfaction and satisfaction with 30 individual aspects of service for each individual train operating company (TOC). Passenger ratings are totalled for all TOCs across the country to provide a National Rail average.

megabus.com revenue
UK and North America
70
60
50
40
30
20
10
03/04
2003: first pilot routes in
UK
2005: megatrain launch; Scottish
Citylink JV
04/05 05/06 06/07 07/08
2006: first routes in North America
2007: UK megabus network in profit
08/09 09/10
2009: North America megabus network in profit
10/11
2009: megabus launched in Canada
24

UK
25
42 locations in United
States and Canada
50 locations in UK, plus 28 destinations with megatrain.com and 10 on megabusplus.com

26
 The graph compares the performance of the Stagecoach Group Total Shareholder Return (‘TSR’) (share value movement plus reinvested dividends) over the 5 years to 30 April 2010 compared with that of Arriva, First Group, Go-Ahead, National Express, the
FTSE Transport and Leisure All-Share Index, and the FTSE 250 Index.

 Improving trends, consistent with economic recovery
 UK Bus less sensitive to economic cycle
 Cautious on bus fares: organic volume growth as economy recovers
 Lower fuel costs in 2010/11 with increase in 2011/12
 Revenue support at South Western Trains and West
Coast Trains
 Well placed to increase earnings in 2010/11
27

28

29

Year ended 30 April 2010
Revenue
Rail revenue support
Rail franchise support
Other operating income
Staff costs
Fuel costs (i.e. diesel)
Insurance and claims costs
Depreciation
Rolling stock costs – lease & maintenance
Other operating leases
Network Rail
Electricity for trains
Commissions payable
Materials & consumables
Other costs
Operating profit
UK Bus
£m
875.4
-
-
16.6
(437.5)
(122.2)
(30.9)
(54.8)
-
(11.4)
-
-
-
(35.6)
(73.5)
126.1
North
America
£m
266.1
-
-
2.8
(117.8)
(38.7)
(19.4)
(20.1)
-
(6.8)
-
-
-
(19.2)
(37.8)
9.1
UK Rail
£m
1,026.7
7.8
(148.7)
67.7
(264.0)
(31.7)
(6.4)
(16.7)
(186.8)
(2.9)
(181.3)
(41.4)
(24.0)
(52.6)
(104.1)
41.6
Virgin Rail
Group (100%)
£m
725.1
72.1
(95.1)
43.8
(134.1)
(18.2)
(3.7)
(1.9)
(211.7)
-
(154.8)
(41.6)
(44.0)
(0.7)
(83.1)
52.1
30

Like-for-like
Acquisitions:
Highland excluding Inverness depot (acquired May 2008)
Inverness depot (integrated Highland and Bluebird business)
Preston Bus (acquired January 2009)
Eastbourne / Cavendish (acquired December 2008)
Islwyn (acquired January 2010)
Year to
30 April 2010
£m
839.5
9.3
8.5
7.7
5.9
0.7
Start-ups:
Rail replacement (started May 2008)
Total reported
3.8
875.4
Year to
30 April 2009
£m
805.9
9.3
8.6
2.3
1.9
-
2.8
830.8
Change
%
4.2%
5.4%
31

Scheduled service/line run/commuter
School bus & contract
Charter
Megabus
Sightseeing & tour
Like-for-like revenue
“Disposed” & closed operations and Canada fx
Total North America
Year to
30 April 2010
US$m
182.9
86.7
83.9
45.1
19.1
417.7
8.6
426.3
Year to
30 April 2009
US$m
196.9
90.4
91.5
32.8
20.7
432.3
67.2
499.5
% Growth
(7.1)%
(4.1)%
(8.3)%
37.5%
(7.7)%
(3.4)%
(87.2)%
(14.7)%
32

Year to 31 March:
2010
2011
2012
2013
2014
2015
2016
2017
South
Western
£m
(41.7)
(99.8)
(166.6)
(242.0)
(313.7)
(387.3)
(462.7)
(454.2)
East
Midlands
£m
96.9
61.2
17.6
(14.2)
(33.8)
(91.5)
-
-
West Coast
£m
(100.6)
(147.2)
(200.2)
-
-
-
-
-
The above amounts are subject to adjustment for: (1) various inflation measures (2) risks borne by the Department for Transport (3) called options and (4) changes in Regulated Network Rail charges. The amounts shown above are based on estimated inflation and options called to date.
The amounts shown above for South Western and East Midlands do not reflect changes to subsidy/(premium) amounts arising from changes to Network Rail charges for Control Period 4, which began on 1 April 2009, because these changes are not yet finalised.
33

North
America
76.6 cents 2009/10 - average effective price (per litre)
UK Bus
45.4p
2010/11 - % of forecast consumption hedged
- average hedge price (per litre)
2011/12 - % of forecast consumption hedged
- average hedge price (per litre)
98%
36.0p
60%
40.6p
83%
50.5 cents
77%
57.7 cents
Market price (per litre) 38.9p
54.9 cents
UK Rail
32.5p
77%
31.3p
50%
41.1p
38.4p
Market prices are as at 16 June 2010
Prices exclude premia payable on fuel caps, delivery margins, duty, taxes and Bus Services Operators Grant
34

UK Bus, excluding BSOG*
UK Bus, BSOG*
UK Bus, including BSOG*
North America
South Western Trains
East Midlands Trains
Total
Latest forecasts
Fuel costs Volumes
2008/09
Actual
£m
(175.4)
75.9
(99.5)
(32.8)
(5.4)
(20.0)
(157.7)
2009/10
Actual
£m
(201.2)
80.0
(121.2)
(38.7)
(5.0)
(21.3)
2010/11
Forecast
£m
(184.5)
77.4
(107.1)
(30.7)
(6.2)
(21.5)
2011/12
Forecast
£m
(195.1)
76.2
(118.9)
(33.4)
(6.2)
(25.6)
(186.2) (165.5) (184.1)
2010/11
Forecast
Litres m
193.1
69.1
12.4
49.2
323.8
Market prices are as at 16 June 2010, when Brent Crude was US$76 per barrel
Forecast costs for the unhedged element of fuel are based on 16 June 2010 spot prices
Above costs include delivery margins, duty and taxes (duty forecast at current levels) but exclude 3 rd party fuel costs
* Bus Services Operators Grant (“BSOG”) represents a rebate of an element of fuel duty costs in respect of certain UK Bus services
35

 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.
 Operating profit for a particular business unit or division within the Group refers to profit before net finance income/charges, taxation, intangible asset expenses, exceptional items and restructuring costs.
 Operating margin for a particular business unit or division within the Group means operating profit 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, deferred gains on derivatives and the effect of fair value hedges on the carrying value of borrowings, and to include the effect of foreign exchange derivatives that synthetically convert an element of borrowings from one currency to another.
 Net debt (or net funds) is the net of cash and gross debt.
36

37