1. Annual Results 2003 1 Annual Results 25 th June 2003

2. Annual Results 2003 2 Robert Speirs Chairman

3. Annual Results 2003 3 Highlights  Continued profitability in all four key operating divisions  Strong cash generation across the Group  £214.6m (28%) debt reduction since April 2002  Free cash flow up 18%  c. £300m of disposals announced post year-end  US £136m; Hong Kong £176m  Good progress in restructuring Coach USA  Terms of new franchise at South West Trains agreed with SRA  Final dividend of 1.8p per share (giving full year dividend of 2.6p (2002: 2.6p))

4. Annual Results 2003 4 Martin Griffiths Finance Director

5. Annual Results 2003 5 Turnover Total operating (loss)/profit - pre goodwill & exceptionals (Loss)/profit before tax - pre goodwill & exceptionals Free cash flow* Adjusted earnings per share Dividend per share 2003 £m 2002 £m 2,076.6 (466.2) 146.4 (500.2) 112.9 217.8 6.4p 2.6p 2,111.4 96.5 166.6 42.0 106.8 184.3 6.3p 2.6p Financial Highlights * Free cash flow comprises net cash inflow from operating activities, dividends from joint ventures and associates, net cash outflow from returns on investments and servicing of finance, and taxation.

6. Annual Results 2003 6 EBITDA UK Bus Coach USA Overseas Bus Rail Virgin Rail Group thetrainline.com Road King Others Overheads & restructuring EBITDA before exceptionals 2003 £m 2002 Restated £m 112.0 49.5 51.8 40.9 7.2 (4.3) 10.5 (0.8) 266.8 (15.1) 251.7 105.2 81.9 57.0 34.1 10.8 (4.4) 12.9 (0.8) 296.7 (17.4) 279.3

7. Annual Results 2003 7 Opening net debt Cash flows from operations Road King dividends Net interest paid Tax paid Dividends paid Net capital expenditure and new hire purchase finance Acquisition/disposal of subsidiaries/investments Net token cash Foreign Exchange and other movements Closing net debt £m (774.6) 272.2 5.3 (51.9) (7.8) (27.6) (52.3) (4.8) 2.1 79.4 (560.0) Movement in Net Debt

8. Annual Results 2003 8 Coach USA Trading Results  Results in line with expectations set in December  Turnover £603.0m (2002 - £682.3m)  3.4% like for like revenue decline*  0.4% like for like decline in coach and bus  Operating profit** £14.0m (2002 - £38.4m)  strict cost control  Insurance and claims costs up 38.2% in US$  Decline in taxicab sales and utilisation  Results stated after all claims costs (one-off and recurring) *Like for like revenue decline is measured as the change in revenue excluding the impact of acquisitions, disposals and foreign exchange movements ** Pre exceptional items and goodwill amortisation

9. Annual Results 2003 9 Coach USA – 2002/03 build-up Businesses sold & closed in 2002/03 Disposals announced since 30 April 2003: - West/South Central - Transit - New England Disposals planned: - Taxi - South East - Canada North East/North Central Total turnover Turnover $m 41.7 215.9 100.8 49.5 407.9 118.2 49.8 38.4 614.3 324.7 939.0

10. Annual Results 2003 10 UK Bus Trading Results  Sales and profit are growing  Turnover growth 5.4% to £598.4m  Underlying passenger growth 3.2%  Strong contribution from London companies  13.7% revenue growth  Improved operating margin  11.2% versus 11.0% in 2002  11.3% versus 11.0% excluding operating lease impact  Delivered through revenue growth and operating efficiencies

11. Annual Results 2003 11 Overseas Bus Trading Results  Turnover £183.7m (2002 - £ 194.7m)  Operating profit £30.3m (2002 - £33.4m)  Operating margin 16.5% (2002 - 17.2%)  Impact of SARS and sluggish Hong Kong economy on Citybus  Further sales and profit growth in New Zealand  New Zealand  Operating profit £11.2m (2002 - £9.0m)  Operating margin 22.0% (2002 - 21.3%)  Passenger volumes up 8.5%

12. Annual Results 2003 12 Rail Trading Results Rail Subsidiaries  Turnover £413.6m (2002 - £402.8m)  Operating profit £38.2m (2002 - £31.0m)  Passenger volumes up 2.1% at SWT (0.9% excluding strike action in prior year)  Financial performance benefited from significant operational improvements at South West Trains  Operating profit stated after franchise bid costs

13. Annual Results 2003 13 Joint Ventures and Associates Virgin Rail Group  Share of revenue £276.1m (2002 - £261.2m)  Share of operating profit £7.2m (2002 - £10.8m) Trainline  Share of revenue £11.0m (2002 - £11.7m)  Share of operating loss £4.3m (2002 - £4.4m) Road King  Share of operating profit £10.5m (2002 - £12.9m)

14. Annual Results 2003 14 Disposals announced Disposals completed in year ended 30 April 2003 - Australia - Coach USA – various units Disposals announced since 30 April 2003 - Citybus - Coach USA – South Central & West - Coach USA – New England - Coach USA – Transit Gross consideration £m 2.1 4.9 7.0 176.5 97.0 25.0 14.1 319.6 Deferred consideration £m - 16.6 4.4 - 21.0 Reduction in consolidated net debt £m 2.1 4.9 7.0 176.5 80.4 20.6 14.1 298.6 Foreign currency amounts have been translated using the average exchange rate for the year ended 30 April 2003 for disposals completed in the year and using the 30 April 2003 rate for the other disposals

15. Annual Results 2003 15 As at 30 April 2003 Disposals announced post year-end Pro-forma net debt £m (560.0) 291.6 (268.4) Balance sheet impact  Minimal net asset impact from disposals  No significant gain or loss  Net Debt  Pro-forma gearing – 84.6%  Significant improvement (i.e. reduction) in Net Debt/EBITDA

16. Annual Results 2003 16 Pensions  Increased employer and employee contributions  £31.2m total pension costs (2002 - £18.0m)  £26.9m cash paid (2002 - £19.5m)  FRS17 post-tax deficit of £156.2m for UK Bus/Group  Financial support in new SWT franchise allows for cost of funding the deficit for SWT  Managed as part of overall cost base

17. Annual Results 2003 17 Current Trading  Group trading in line with expectations  Continuing revenue and profit growth in UK Bus  SWT trading under the terms of the one-year franchise extension  Coach USA  restructuring ongoing  no significant change in trading environment  Further growth in New Zealand  Virgin Rail Group - one year SRA budget 2003/04

18. Annual Results 2003 18 Divisional Strategy

19. Annual Results 2003 19 Graham Eccles Director – Rail Operations

20. Annual Results 2003 20 Rail  The new SWT Franchise  Prospects for Virgin Rail Group  Rail Business Development

21. Annual Results 2003 21 Brian Souter Chief Executive

22. Annual Results 2003 22 Coach USA  Reducing exposure to leisure related businesses  Realising value through sales process  Reducing management stretch  Retaining businesses with geographically large units and more predictable revenue streams  Redeploying assets to maximise utilisation and eliminate unnecessary capital expenditure 30/70 70/30

23. Annual Results 2003 23 Hong Kong - Citybus Disposal  HK$2.2 billion enterprise value – compelling offer for the business  Economic uncertainty  Changing political landscape  Pressure to reduce fares  Costly bus modifications relating to the environment, e.g. catalytic convertors  Pressure for market consolidation  Increasing capital spend to retain franchises  New depot  Fleet replacement  Competition – Railway extensions

24. Annual Results 2003 24 Other Overseas Interests  New Zealand  Commercial structure  Organic growth  Dominant market share  Strong management team core part of the Stagecoach portfolio  Road King  Sound underlying business but non core to Stagecoach Group  Would exit if the right opportunity arose

25. Annual Results 2003 25 UK Bus  Historic performance and trends  Growth prospects  London  Provincial companies  Organic growth in southern networks  Refresh “tired” northern networks  New Products  Taxibus  Kick Start

26. Annual Results 2003 26 Summary  Coach USA sales programme and restructuring on schedule  Terms of new franchise at SWT agreed with SRA  Ongoing discussions between VRG and the SRA to re-negotiate the West Coast and Cross Country franchises  Operating margin improvement at UK Bus  Continued organic growth in New Zealand  US and Citybus disposals – substantial debt reduction  Significant de-risking of the Group portfolio

27. Annual Results 2003 27 Where next for Stagecoach?  Maximise shareholder value from existing Portfolio  A portfolio now dominated by UK Bus and Rail businesses  Organic growth  New products  Maximise value from existing rail franchises  Residual US Portfolio  Over US$300m of revenue  More predictable  $22m operating profit in 2002/03 can be sustained and grown despite lower revenue base; EBITDA base of approximately $40m  Organic growth opportunities/small bolt on acquisitions  Growth characteristics in New Zealand  Strong cash generation  Further debt reduction  Well placed for refinancing in 2004  Evaluate capital structure post US restructuring  Progressive Dividend policy

28. Annual Results 2003 28 Annual Results 25 th June 2003

29. Annual Results 2003 29 Appendices

30. Annual Results 2003 30 UK Bus Revenue Development 2001/02 Turnover Passenger volumes outside London London contract changes Fares/tender prices/business mix 2002/03 Turnover £m % 567.9 1.8 14.6 14.1 598.4 - 0.3% 2.6% 2.5% 5.4%

31. Annual Results 2003 31 144.2 454.2 598.4 10.5% 11.4% 11.2% 15.1 51.9 67.0 126.8 441.1 567.9 10.6% 11.2% 11.0% 13.5 49.2 62.7 UK Bus - London/Other 2003 Operating Turnover Profit Margin £m £m % London Other 2002 Operating Profit Margin TurnoverRestated Restated £m £m %

32. Annual Results 2003 32 Overseas Bus Revenue Development 2001/02 Turnover Disposal of Portugal and Australia Withdrawal of PRC services Currency movements Volumes -Severe weather impact in prior year -Underlying growth Impact of SARS Fares 2002/03 Turnover Citybus £m New Zealand £m 148.6 - (0.1) (11.9) 0.9 (2.3) (2.9) - 132.3 42.2 - 3.8 - 4.6 - 0.4 51.0 Other £m 3.9 (3.5) - 0.4 Total £m 194.7 (3.5) (0.1) (8.1) 0.9 2.3 (2.9) 0.4 183.7

33. Annual Results 2003 33 Overseas Bus Segmental results 148.6 42.2 3.9 194.7 17.0% 21.3% - 17.2% 25.2 9.0 (0.8) 33.4 132.3 51.0 0.4 183.7 14.4% 22.0% - 16.5% 19.1 11.2 - 30.3 2003 Operating Turnover Profit Margin £m £m % Citybus New Zealand Other Total 2002 Operating Profit Margin TurnoverRestated Restated £m £m %

34. Annual Results 2003 34 Revenue SARS effect- March - April Normalised revenue (excluding SARS) 2003 HK$m 2002 HK$m 1,607.4 7.3 27.634.9 1,642.3 1,660.3 Nil 1,660.3 Citybus – SARS Impact  May 2003 revenues 20% down on prior year

35. Annual Results 2003 35 133.2 63.5 485.6 682.3 12.7% 7.1% 3.5% 5.6% 16.9 4.5 17.0 38.4 91.4 64.7 446.9 603.0 5.1% 0.0% 2.1% 2.3% 4.7 - 9.3 14.0 Coach USA Segmental results 2003 Operating Turnover Profit Margin £m £m % Taxi Transit Coach & Bus Total 2002 Operating Profit Margin TurnoverRestated Restated £m £m %

36. Annual Results 2003 36 Capital Expenditure UK Bus Coach USA Overseas Bus Rail Capital Expenditure £m Disposal Proceeds* £m 15.8 21.5 13.3 2.3 52.9 (13.9) (5.1) (1.1) - (20.1) 2003 Net £m 1.9 16.4 12.2 2.3 32.8 2002 Net £m 19.6 48.4 7.4 1.6 77.0 *excludes proceeds from selling businesses

37. Annual Results 2003 37 Interest/Debt Ratios Finance charges* (net) EBITDA pre-exceptionals EBITDA pre-exc/Finance charges Net Debt/EBITDA 2003 £m 2002 £m 33.5 251.7 7.5 times 2.2 times 59.8 279.3 4.7 times 2.8 times * 2003 includes £13.1m net gain on early redemption of bonds and close out of interest rate swaps

38. Annual Results 2003 38 Taxation Pre-goodwill and exceptionals Exceptional items Goodwill amortisation Cash tax Pre-tax £m Tax £m 112.9 (575.5) (37.6) (500.2) (28.8) Nil 3.8 (25.0) (7.8) % 25.5% Nil 10.1% 5.0% 2003  33.4% effective rate excluding £575.0m Coach USA write-downs

39. Annual Results 2003 39 Annual Results 25 th June 2003