1. Interim Results 2003 Interim Results 10 December 2003

2. Interim Results 2003 2 Robert Speirs Chairman

3. Interim Results 2003 3 Highlights  Delivery of strategic objectives in 6 months to 31 October 2003  New South West Trains and Island Line franchises agreed  Coach USA restructuring largely completed  Innovative growth ideas in UK Bus introduced  Strong trading performance across the Group  Disposal of Citybus  Net debt down from £560.0m to £210.9m  Interim dividend up 12.5% to 0.9p per share

4. Interim Results 2003 4 Martin Griffiths Finance Director

5. Interim Results 2003 5 Financial Performance  Strong financial results  Operating profit growth in all four retained divisions  Operating margin improvement  Actively managing cost pressures  Revenue growth initiatives to offset cost increases  Reduction in central overhead  Risk sharing with Strategic Rail Authority  Asset utilisation  Targeting investment in growth areas

6. Interim Results 2003 6 Turnover Total operating profit/(loss)* - pre exceptionals & goodwill* (after restructuring costs) Profit/(loss) before tax - pre exceptionals & goodwill Free cash flow ** Adjusted EPS Dividend per share October 2003 £m October 2002 £m 963.8 67.3 76.9 44.8 60.3 100.3 3.2p 0.9p 1,067.7 (512.4) 86.9 (524.1) 75.2 100.2 4.4p 0.8p Financial Highlights * After restructuring costs of £4.1m (2002 - £2.9m) ** Free cash flow comprises net cash inflow from operating activities, dividends from associates, net cash inflow/(outflow) from returns on investments and servicing of finance, and taxation

7. Interim Results 2003 7 2002 PBT Operating profit of retained businesses - UK Bus - New Zealand - Coach USA - Rail – underlying Overheads Reduction in underlying finance charges Exceptionals & goodwill Citybus disposal Rail – non-recurring liquidated damages Restructuring JVs & associates Gain on repurchase of bonds in 2002 2003 PBT Profit Reconciliation (599.3) - 575.0 - 8.8 (15.5) - (15.5) (524.1) 3.2 0.5 575.1 9.8 0.3 10.1 8.8 83.7 (11.6) (7.2) (1.2) (3.9) (15.0) 44.8 75.2 3.2 0.5 0.1 9.8 0.3 10.1 - 99.2 (11.6) (7.2) (1.2) (3.9) (15.0) 60.3 Reported £m Exceptionals & Goodwill £m Pre goodwill & exceptionals £m

8. Interim Results 2003 8 Margin Improvement Retained Divisions UK Bus New Zealand Coach USA Rail Turnover £m Op profit £m 293.8 21.5 334.2 206.0 855.5 31.1 4.4 15.8 18.9 70.2 8.2% 2002 UK Bus New Zealand Coach USA Rail Turnover £m Op profit £m 317.9 26.4 234.0 216.7 795.0 34.3 4.9 15.9 21.5 76.6 9.6% 2003 8.2% 9.6% 2002 2003 Operating margin excl goodwill & exceptionals Six months to 31 Oct 1.4%

9. Interim Results 2003 9 EBITDA UK Bus (£2.2m lower due to impact of operating leases) Coach USA Overseas Bus - New Zealand - Discontinued Rail VRG thetrainline Road King Others Overheads & restructuring EBITDA before exceptionals 2003 £m 2002 £m 54.0 25.3 6.8 3.5 22.5 5.0 (1.7) 5.0 (0.7) 119.7 (8.3) 111.4 50.4 37.1 5.9 20.6 20.2 7.7 (1.4) 5.8 (0.6) 145.7 (7.2) 138.5

10. Interim Results 2003 10 2003 £m 2002 £m (5.1) (1.1) 0.3 Nil (5.9) Nil (575.0) - Loss on sale of Coach USA divisions -Loss on sale of Chongqing investment -Gain on sale of Citybus -Coach USA exceptional items Redundancy/restructuring costs*  £4.1m (2002 - £2.9m) Exceptional Items Exceptionals and Restructuring Costs * Charged against operating profits

11. Interim Results 2003 11 Opening net debt Cash flows from operations Net interest received Dividends paid Net capital expenditure and new hire purchase/finance leases Acquisition of businesses and net debt assumed Sale of businesses and net debt eliminated Foreign exchange, tax and other movements Closing net debt £m (560.0) 111.4 1.0 (23.8) (35.5) (6.5) 305.7 (3.2) (210.9) Movement in Net Debt

12. Interim Results 2003 12 UK Bus Trading Results  Turnover growth 8.2% to £317.9m  Underlying passenger growth outwith London 1.3%  Strong contribution from London companies  19.8% revenue growth  Improved operating margin  10.8% versus 10.6% in 2002  11.3% versus 10.7% excluding operating lease impact

13. Interim Results 2003 13 UK Bus Profit Analysis Turnover Operating profit Add back increased operating lease costs Deduct saving in depreciation arising from operating leases Add back Megabus & Taxibus R&D Exclude Devon Adjusted margin October 2002 £m 317.9 34.3* 10.8% 2.6 (0.9) 36.0 11.3% 0.3 (0.4) 35.9 11.3% 293.8 31.1 10.6% 0.4 (0.2) 31.3 10.7% - (1.6) 29.7 10.1% October 2003 £m *after £3.5m increase in pensions/NI costs and £3.3m increase in insurance costs

14. Interim Results 2003 14 Coach USA Trading Results  Turnover £234.0m (2002- £334.2m)  3.1% like for like revenue decline*  Operating profit** £15.9m (2002 - £15.8m)  strong cost control  profit levels maintained on reduced revenue  Operating margin up from 4.7% to 6.8% * Like for like revenue decline is measured as the change in revenue excluding the impact of acquisitions, disposals and foreign exchange ** Pre exceptional items and goodwill amortisation throughout presentation

15. Interim Results 2003 15 Coach USA Turnover Breakdown Residual businesses - North East - North Central - Canada Discontinued Remaining taxi operations (to be sold) October 2003 113.7 57.5 22.5 193.7 156.0 32.3 382.0 Turnover $m October 2002 115.7 59.7 23.1 198.5 276.4 34.9 509.8 Turnover $m

16. Interim Results 2003 16 New Zealand Trading Results  Turnover £26.4m (2002 - £21.5m)  Underlying 6.1% revenue growth (excluding currency movements)  Operating profit £4.9m (2002 - £4.4m)  Operating margin 18.6% (2002 – 20.5%)  Passenger volumes up 5.5%

17. Interim Results 2003 17 Rail Trading Results Rail Subsidiaries  Turnover £216.7m (2002 - £206.0m)  Operating profit £21.5m (2002 - £18.9m*)  Operating margin 9.9% (2002 – 9.2%)  Passenger volumes up 3.1% at SWT  Sustained improvement in SWT-caused delay minutes * Included £7.2m of non-recurring liquidated damages

18. Interim Results 2003 18 Rail Profit Analysis Operating Profit per Bid Passenger income Net Sch 7/Sch 8 EC4T Other Costs Revenue/Profit share to the SRA Actual SWT operating profit Other Total Rail operating profit October 2003 £m 12.7 8.8 1.7 5.2 5.3 (11.7) 22.0 (0.5) 21.5

19. Interim Results 2003 19 Joint Ventures & Associates Virgin Rail Group  Share of revenue £149.5m (2002 - £140.6m)  Share of operating profit £5.0m (2002 – £7.7m) thetrainline  Share of revenue £5.4m (2002 - £5.1m)  Share of operating loss £1.7m (2002 - £1.4m) Road King  Share of operating profit £5.0m (2002 - £5.8m)

20. Interim Results 2003 20 Completed in six months to 31 Oct 2003: - Coach USA - Citybus - Chongqing associates Non-core: - Road King - Remaining US taxi businesses Net cash proceeds £m (Loss)/gain before tax £m 133.0 128.7 0.9 262.6 (5.1) 0.3 (1.1) (5.9) Disposals Reduction in net debt £m 133.0 171.8 0.9 305.7

21. Interim Results 2003 21 Balance Sheet & Financing  Net debt down to £210.9m (April 2003 - £560.0m)  EBITDA*/Interest cover 6.7 times  Progressive dividend policy  Evaluate optimum balance sheet structure in conjunction with 2004 re-financing of Eurobond and bank facilities * pre exceptionals

22. Interim Results 2003 22 Current Trading & Outlook  Maintaining Coach USA profit on lower revenue base  H1 is seasonally stronger  Sustainable SWT profits at upper end of original expectations  Operating profit growth in UK Bus and New Zealand  H2 to date in line with expectations

23. Interim Results 2003 23 Brian Souter Chief Executive

24. Interim Results 2003 24 Group Strategy (1) Objectives in the last 12 months STATUS –Seek new SWT franchise Done –Restructure Coach USA Largely complete –Seek substantial improvement in SWT’s own train performance Ongoing –Get the basics right at UK Bus Ongoing Fares Driver recruitment Engineering Core networks

25. Interim Results 2003 25 Group Strategy (2) Where next for Stagecoach? UK Bus –Continue to get the basics right –Research and development –Challenge is the delivery of organic growth Rail –Priority to renegotiate XC and WC franchises –Other franchise opportunities Integrated Kent Manchester Metrolink UK Intercity North America –Deliver profitable growth –Small bolt on acquisitions –Fleet improvement New Zealand –Sustain revenue and profit growth

26. Interim Results 2003 26 Summary  Delivery of strategic objectives  Strong trading performance across the Group  Focused management  Strengthened balance sheet  Increased dividend  Current trading in line with expectations

27. Interim Results 2003 Interim Results 10 December 2003

28. Interim Results 2003 28 Appendices

29. Interim Results 2003 29 UK Bus Revenue Development 2002 Turnover Passenger volumes outside London London contract changes Fares/tender prices 2003 Turnover London £m Provincial £m 69.2 - 11.7 2.0 82.9 224.6 2.9 - 7.5 235.0 Total UK Bus £m 293.8 2.9 11.7 9.5 317.9

30. Interim Results 2003 30 82.9 235.0 317.9 9.0% 11.4% 10.8% 7.5 26.8 34.3 69.2 224.6 293.8 9.8% 10.8% 10.6% 6.8 24.3 31.1 UK Bus - London/Other October 2003 Operating Turnover Profit Margin £m £m % London Other October 2002Operating Turnover Profit Margin £m £m %

31. Interim Results 2003 31 Rail Revenue Development 2002 Turnover SWT Passenger volumes SWT Fares Other 2003 Turnover £m % 206.0 6.3 4.1 0.3 216.7 3.1% 2.0% 0.1% 5.2%

32. Interim Results 2003 32 Overseas Bus Revenue Development 2002 Turnover Disposal of Citybus and Australia Currency movements Volumes Fares 2003 Turnover Citybus £m New Zealand £m 70.3 (45.5) (4.5) (2.5) - 17.8 21.5 - 3.4 1.3 0.2 26.4 Other £m 0.5 (0.5) - Total £m 92.3 (46.0) (1.1) (1.2) 0.2 44.2

33. Interim Results 2003 33 Overseas Bus Segmental results 70.3 21.5 0.5 92.3 17.9% 20.5% 0.0% 18.4% 12.6 4.4 - 17.0 17.8 26.4 - 44.2 5.6% 18.6% 0.0% 13.3% 1.0 4.9 - 5.9 October 2003 Operating Turnover Profit Margin £m £m % Citybus* New Zealand Other Total October 2002Operating Turnover Profit Margin £m £m % * Disposal completed June 2003

34. Interim Results 2003 34 Coach USA Revenue Development 2002 Turnover Disposals Currency movement Underlying decline 2003 Turnover £m % 334.2 (76.2) (16.4) (7.6) 234.0 (22.8)% (4.9)% (2.3)% (30.0)%

35. Interim Results 2003 35 Gross debt & related derivatives Cash Joint ventures & associates Non-utilisation/commitment fees Amortisation of bond issue costs/bank charges Insurance letters of credit Discount on insurance provisions Other Finance charges £m Annual Effective rate % 16.9 (3.0) 13.9 (0.6) 0.3 0.4 0.8 1.5 0.3 16.6 5.6% 2.5% 7.5% Finance Charges Average balance* £m 607.0 (237.0) 370.0 *Average of month end debt/cash balances

36. Interim Results 2003 36 Interest/Debt Ratios Finance charges* (net) EBITDA pre-exceptionals EBITDA pre-exceptionals/Finance charges 2003 £m 2002 £m 16.6 111.4 6.7 times 11.7* 138.5 11.8 times * 2002 includes £15.0m gain on repurchase of bonds

37. Interim Results 2003 37 Taxation Pre-goodwill and exceptionals Exceptional items Goodwill amortisation Pre-tax £m Tax £m 60.3 (5.9) (9.6) 44.8 (17.9) 2.0 0.8 (15.1) % 29.7% 33.9% 8.3% 33.7% 2003

38. Interim Results 2003 38 10.9 - 10.9 21.9 9.3 5.9 1.1 38.2 (1.8) (0.8) (0.1) - (2.7) 20.1 8.5 5.8 1.1 35.5 11.0 9.3 5.9 1.1 27.3 Capital Expenditure UK Bus Coach USA Overseas Bus Rail Capex on new hire purchase £m Impact of capex on net debt £m Disposal proceeds £m Net £m Cash spent on capex £m

39. Interim Results 2003 39 Fuel Hedging % of group fuel usage hedged Average hedge price $/barrel* Average floating price $/barrel* Variable fuel costs FY2004FY2003 100% $24 $30 c.£40m 63% $24 $20 c.£50m FY2002 90%** $24 $23 c.£53m *Based on blended comparable crude oil price for the year **6 months to April 2002

40. Interim Results 2003 40 Exchange Rates US$ HK$ NZ$ Closing rateAverage rate 1.5645 12.2017 3.2177 1.5252 11.8957 3.2177 October 2002 Closing rateAverage rate 1.6970 13.1780 2.7617 1.6324 12.7120 2.7875 October 2003