Annual Results 27

th

June 2007

1 Preliminary Results 2007

Definitions

   

Like-for-like

refers to the comparison of businesses and individual operating units that have been part of the Group throughout the whole of the most recent financial year and the immediately preceding financial year.

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.

Preliminary Results 2007 2

Robert Speirs Chairman

3 Preliminary Results 2007

Highlights

      Good underlying revenue growth in all core divisions 63 pence per ordinary share returned to shareholders in May/June 2007 Full year dividend of 4.1p, up 10.8% Further strong growth in profit  Adjusted earnings per ordinary share up 10.4% Strong start to new South Western rail franchise New franchise wins: East Midlands, Manchester Metrolink Preliminary Results 2007 4

Martin Griffiths Finance Director

5 Preliminary Results 2007

Financial summary

Revenue – continuing operations Operating margin* - continuing operations (%) Adjusted earnings per ordinary share* Basic earnings per ordinary share Net funds/(debt) + Dividend per ordinary share Year to 30 April 07 £1,504.6m

9.8% 11.7p

25.4p

£186.4m

4.1p

Year to 30 April 06 £1,343.9m

9.5% 10.6p

10.7p

£(135.9)m 3.7p

Change 12.0% 0.3% 10.4% 137.4% n/a 10.8% * excluding exceptional items and intangible asset expenses + UK GAAP 6 Preliminary Results 2007

Summary income statement

UK Bus operating profit – like-for-like UK Bus operating profit – 2005/6 acquisitions North America operating profit Rail operating profit Share of joint ventures’ profit Restructuring and group overheads Finance income/(charges) (net) Tax

Profit excluding intangibles and exceptionals

Intangibles and exceptionals, net of tax

Reported profit from continuing operations

Year to 30 April 07 £m 82.5

2.0

18.1

58.8

14.2

(14.3) 0.7

(37.8) 124.2

16.3

140.5

Year to 30 April 06 £m 65.0

(1.9) 16.9

58.9

5.6

(11.5) (15.9) (25.3) 91.8

(20.6) 71.2

Change £m 17.5

3.9

1.2

(0.1) 8.6

(2.8) 16.6

(12.5) 32.4

36.9

69.3

Preliminary Results 2007 7

Development of UK Bus

 Operating profit increased  and £267.8m collected from London sale!

Operating profit: Like-for-like 2005/06 acquisitions London Year to 30 April 07 £m Year to 30 April 06 £m 82.5

2.0

5.2

89.7

65.0

(1.9) 23.6

86.7

Change £m 17.5

3.9

(18.4) 3.0

Preliminary Results 2007 8

UK Bus (like-for-like)

Revenue (£m) Operating profit (£m) Operating margin Passenger journeys (m) Year to 30 April 07 608.0

82.5

13.6% 547.9

Year to 30 April 06 551.1

65.0

11.8% 513.9

Change 10.3% 26.9% 1.8% 6.6%      Revenue and journeys benefiting from strong marketing, competitive fares strategy, concessionary travel schemes and continued fleet investment Continued underlying revenue and volume growth Some benefit in second half from more stable crude oil prices Pension scheme changes mitigated potential cost increases in second half Stable insurance & claims costs 9 Preliminary Results 2007

UK Bus (2005/6 acquisitions)

Revenue (£m) Operating profit (£m) Operating margin Year to 30 April 07 82.4

2.0

2.4% Year to 30 April 06* 38.5

(1.9) (4.9)% Change 114.0% n/a 7.3%   Margin improvement from integration of acquired businesses Further margin improvement expected * Partial year, 2007 represents full year 10 Preliminary Results 2007

North America

Revenue (US$m) Like-for-like revenue (US$m)* Operating profit (US$m) Operating margin Year to 30 April 07 463.6

455.6

34.6

7.5% Year to 30 April 06 439.5

417.6

30.0

6.8% Change 5.5% 9.1% 15.3% 0.7% * Adjusted to exclude revenue from businesses sold or closed during the two years and to include revenue from Canada on a constant currency basis     Further margin improvement from optimising asset deployment Double digit margin targeted by 30 April 2009 Excellent response in the US to Megabus Launch of Splash Tours in New York 11 Preliminary Results 2007

North America revenue breakdown

Scheduled service/line run/commuter Charter Sightseeing & tour School bus & contract Like-for-like revenue Closed operations and Canada fx Total Year to 30 April 2007 US$m 191.8

86.5

87.2

90.1

455.6

8.0

463.6

Year to 30 April 2006 US$m 174.3

79.9

79.6

83.8

417.6

21.9

439.5

% Growth 10.0% 8.3% 9.5% 7.5% 9.1% (63.5)% 5.5% Preliminary Results 2007 12

Rail (wholly-owned)

Revenue (£m) Operating profit (£m) Operating margin Passenger miles (000’s) Year to 30 April 07 571.5

58.8

10.3% 3,051.6

Year to 30 April 06 506.7

58.9

11.6% 2,802.1

Change 12.8% (0.2)% (1.3)% 8.9%      Strong start to new South Western franchise Challenging but deliverable revenue and cost targets Manchester Metrolink from July 2007 East Midlands from November 2007 Sheffield Supertram record passenger volumes 13 Preliminary Results 2007

    

Virgin Rail Group

Revenue – 49% share (£m) West Coast CrossCountry Operating profit – 49% share (£m) Operating margin Dividends received (£m) Passenger miles (000’s) Year to 30 April 07 412.5

271.5

141.0

12.4

3.0% 31.1

4,156.1

Year to 30 April 06 357.4

231.9

125.5

5.3

1.5% Nil 3,742.3

Good prospects for re-negotiated West Coast franchise Winning market share from airlines Further yield management Successful marketing campaigns Capacity increases in December 2007 & December 2008 14 Change 15.4% 17.1% 12.4% 134.0% 1.5% n/a 11.1% Preliminary Results 2007

Scottish Citylink/Megabus JV

Revenue – 35% share (£m) Operating profit – 35% share (£m) Operating margin Year to 30 April 07 8.5

1.3

15.3% Year to 30 April 06* 3.8

0.1

2.6% Change 123.7% 1200.0% 12.7%    JV has delivered enormous passenger benefits    Better value-for-money More sensible co-ordination of routes, timetables, etc.

More services Strong support from passengers, politicians and other stakeholders Concerning decision from Competition Commission * Partial year, 2007 represents full year 15 Preliminary Results 2007

Miscellaneous income statement items

Intangible asset expenses (£m) Group overheads (£m) Restructuring costs (£m) Pre tax exceptional items (£m) Year to 30 April 07 (14.7) (11.1) (3.2) 169.6

Year to 30 April 06 (20.5) (10.0) (1.5) 17.4

Change 28.3% (11.0)% (113.3)% 874.7%    Exceptional gains include sale of London Bus and restructuring of main Group pension scheme £4.3m further gain in second half from London Bus completion accounts and tax finalisation Further pension credit in second half of £6.1m

16 Preliminary Results 2007

Finance income/(charges) and credit ratios

Net finance income/(charges) (£m) EBITDA from continuing operations and joint ventures excl exceptional items (£m) Year end net funds/(debt) (£m) Net Debt/EBITDA Net funds increased by £726m for Return of Value & special pension contributions Year to 30 April 07 0.7

229.6

186.4

n/a 2.3

Year to 30 April 06 (15.9) 194.0

(135.9) 0.7

0.7

Change 16.6

35.6

322.3

n/a 1.6

Preliminary Results 2007 17

Interest rate risk

30 April 2007 net funds Approximate return of value (including costs) Special pension contribution – June 2007 Pro forma net debt £m 186.4

(696.0) (30.0) (539.6) £324.6m

60.2% Fixed Rate at 6.2% blended* * Taking account of interest rate derivatives 18 £215.0m

39.8% Floating Rate Preliminary Results 2007

Taxation

Pre-tax Profit* £m 2007 Tax* £m Rate % Excluding intangible asset expenses and exceptional items - Before joint ventures - Joint ventures Intangible asset expenses Exceptional items Joint venture tax Reported in income statement Cash tax paid (net) * Excludes London Bus 19 147.8

17.2

165.0

(14.7) 36.8

187.1

(3.0) 184.1

(37.8) (3.0) (40.8) 2.9

(8.7) (46.6) 3.0

(43.6) 22.9

25.6% 17.4% 24.7% 19.7% 23.6% 24.9% 23.7% Preliminary Results 2007

Capital structure

     c.£700m return of value completed Reflects robust business model Quantum determined with reference to credit ratios, including Net Debt/EBITDA and Debt Service Cover Ordinary shares currently in issue 707.9m

2007/08 pro forma average Ordinary shares in issue 724.3m

Preliminary Results 2007 20

Pensions

     £21.7m* total pension costs (2006: £33.4m)  £18.1m* (2006: £27.1m) continuing operations IAS 19 pre tax deficit of £36.2m (2006: £222.2m) for Group c.£107m of additional contributions to reduce deficit   £77m paid by 30 April 2007 £30m paid in June 2007  further deficit reduction Rail pension schemes: under IFRS, only the part of the deficit that we expect to fund during the relevant franchise is recognised Positive changes to schemes * excluding past service adjustment 21 Preliminary Results 2007

Movement in net debt

EBITDA from Group companies before exceptionals EBITDA from discontinued operations Dividends from joint ventures Movement in retirement benefit obligations Working capital and other operating cash movements Net interest paid Tax paid

Net cash from operating activities

Net capital expenditure including new hire purchase Acquisitions of businesses, intangibles and investments Disposals of businesses and investments Movement in loans to joint ventures Token sales and redemptions Foreign exchange/other

Reduction in net debt before cashflows with shareholders

Equity dividends Other share capital movements Reduction in net debt Opening net debt

Closing net funds

22 30 April 2007 £m 215.4

7.7

31.1

(94.9) 29.8

(3.9) (22.9) 162.3

(82.5) (2.2) 267.2

1.4

(2.3) 16.4

360.3

(41.5) 3.5

322.3

(135.9) 186.4

Preliminary Results 2007

Capital expenditure

UK Bus North America Rail Cash spent on capex* £m 19.1

21.4

4.0

44.5

Capex on new hire purchase £m 49.0

Nil Nil 49.0

Impact of capex on net debt £m 68.1

21.4

4.0

93.5

Disposal proceeds** £m (8.2) (2.8) Nil (11.0) Net £m 59.9

18.6

4.0

82.5

* Excludes capitalised intangible assets of £13.3m (2006: £0.6m) ** Excludes proceeds from selling businesses Note: Vehicles with a capital value of £12.1m were acquired by UK Bus during the year on operating leases (2006: £Nil ) Preliminary Results 2007 23

Brian Souter Chief Executive

24 Preliminary Results 2007

Adjusted EPS* Dividend per Ordinary Share Share Price Return of value announced

Five-year track record

Year ended 30 April 2003 6.4p

2.6p

44.0p

2004 2005 2006 2007 CAGR 6.7p

2.9p

82.25p

£240m 9.5p

3.3p

103.0p

10.6p

3.7p

108.5p

11.7p

4.1p

186.75p

£700m 16.3% 12.1% 43.5% + dividends * Before intangible asset expenses and exceptional items (2002 – 2004: UK GAAP; 2005 – 2007: IFRS) 25 Preliminary Results 2007

The Stagecoach Differential UK Bus

      Revenue growth* 10.3% (22.6% higher than average market revenue growth of 8.4%**) Underlying full fare passenger volume growth of approximately 2.4% Like-for like operating profit up 26.9%* from £65.0m to £82.5m

Lower than average weekly ticket prices  increases financial flexibility  underpins volume growth and long term prospects High fleet reliability Getting modal shift from innovation and marketing * Like-for-like ** Determined from most recently rolling 12 months’ revenues available for UK Bus divisions of major UK-listed Groups 26 Preliminary Results 2007

The Stagecoach Differential North America

   “Sweating” the assets; units closed; segment profitability  revenue growth* 9.1%  further margin improvement from 7.1% to 7.9% Product developments    Splash Tours megabus.com

internet selling Targeting 10% margin on core business by April 2009 * Like-for-like constant currency Preliminary Results 2007 27

   

The Stagecoach Differential UK Rail

Winning Franchises  South Western  East Midlands  Manchester Metrolink Passenger Satisfaction**  South Western 81%   West Coast 87% CrossCountry 84%  strong momentum Revenue growth* 12.9% (9.3% higher than the London and South East TOC average of 11.8%*) Passenger Performance Measure – Punctuality +  South Western 90.3%   West Coast 87.2% CrossCountry 84.3%    London & South East TOCs 89.3% Long distance TOCs 85.2% Industry 79% + * Industry passenger performance measure for calendar year 2006 Year to 31 March 2007 ** Percentage of passengers satisfied overall as determined by Spring 2007 National Passenger Survey 28 Preliminary Results 2007

The Stagecoach Differential “Addressing the issues”

   CAPITAL STRUCTURE    Consistently generating surplus cash for investment & shareholder return £940m returned to shareholders in three years Plus continued dividend growth PENSIONS    Accelerating funding Securing employee pensions  Managing cost and volatility affordable pension scheme INVESTMENT  UK Bus Fleet • Addressing the “London” issue • Modern fleet for a modern business Preliminary Results 2007 29

Current trading and outlook

    Strong start to new financial year Current trading in line with our expectations Continued focus on organic growth and bolt-on acquisitions Good potential for further growth Preliminary Results 2007 30

Annual Results 27

th

June 2007

31 Preliminary Results 2007

Appendices

32 Preliminary Results 2007

Finance income

Gross debt & related derivatives Interest bearing cash balances Non-utilisation/commitment fees Insurance letters of credit Discount on insurance provisions Interest on notes receivable Other Average balance* £m (332.0) 428.0

96.0

Finance income/ (charges) £m (16.6) 20.6

4.0

(0.8) (0.5) (2.9) 0.3

1.2

1.3 ** Annual effective rate % 5.0

4.8

4.2

* Average of month end debt/cash balances ** £0.7m reported as net finance income in income statement and £0.6m relating to London Bus reported within profit from discontinued operations 33 Preliminary Results 2007

Fuel hedging

% of Group fuel hedged - fixed - cap/floor Average hedge price (crude price US$/barrel) - fixed - cap/floor Forecast 2007/08 37% 51% $59 US$59/US$28 Forecast 2008/09 Nil 44% n/a US$89/US$58 Forecast 2009/10 Nil Nil n/a n/a • Continuing Bus divisions use 1.6m barrels of fuel a year • Each US$10 per barrel movement in crude oil price impacts variable fuel costs by approximately US$16m if no hedging in place • 2006/07 year-on-year increase of £21m in fuel costs of continuing operations 34 Preliminary Results 2007

US$ NZ$* C$

Exchange rates

April 2007 Closing rate 1.9999

n/a 2.2102

Average rate 1.9103

n/a 2.1738

April 2006 Closing rate 1.8176

2.4606

2.0368

Average rate 1.7751

2.5641

2.1079

* Average and closing rates up to date of disposal used – 29 November 2005 35 Preliminary Results 2007

Annual Results 27

th

June 2007

36 Preliminary Results 2007