Full Year Results

About this update from Mobico Group Plc

[{"type":"text","content":"\n \n Mobico Group PLC (\"Mobico\" or the \"Group\"): results for the twelve months ended 31 December 2024 \n FY24 Adjusted Operating Profit in-line with guidance with continued revenue growth and disciplined cost management \n Announced sale of North American School Bus an important step in reducing net debt \n   \n   \n Full year results, twelve months ended 31 December 2024 \n   \n Summary \n Group \n § FY 24 Adjusted Operating Profit in line with market guidance, growth of 11.3% to £187.7m \n § Statutory Group operating Loss after Tax of £793.8m \n o  Reflects principally non-cash adjusting items including goodwill impairment of NASB, write-off of deferred tax assets in UK and North America, and an increased onerous contract provision in German Rail; see adjusting items section below \n § Continued Group revenue growth* of 8.3% \n o  Record progress at ALSA + further growth in WeDriveU (WDU) & School Bus (NASB) + good progress in UK Bus \n § Covenant gearing reduced to 2.8x \n o  Good Free Cash Flow generation of £210.2m (£163.7m in FY23) \n o  Organic debt reduction initiatives delivered targeted £25m of benefits in the year \n o  Ample liquidity with no maturities for over 24 months and intention to refinance well ahead of time \n § Announced sale of North America School Bus for an enterprise value of up to $608m \n o  Expected upfront net proceeds of approximately $365 - 385 million # \n o  Delivers on the Group's commitment to accelerate net debt reduction - with further deleveraging options  under review \n o  Enables the Group to reallocate cash flows from the capital-intensive School Bus business \n o  Creates a simpler portfolio with a stronger platform to delever alongside allowing the Group to focus strategically on fully unlocking ALSA's high quality growth and return potential \n § Important Board and management appointments \n o  Phil White as Chair from 1 May 2025, Francisco ( Paco ) Iglesias as Group COO (ongoing ALSA CEO) to drive operational improvements, and Kevin Gale as UK & Germany CEO, bringing substantial transport experience \n Divisions \n § ALSA \n o  Delivers another record performance in FY 24 \n o  13.9 % growth in revenue, driven by Regional and Long Haul \n o  Continuing diversification with strong growth in International and New Markets \n § North America \n o  Revenue growth of 8.0 % reflects NASB route wins prior to disposal \n o  Whilst NA School Bus EBIT has grown $6.2m persistent market challenges such as driver wage inflation and increased maintenance costs has meant that FY 24 performance was below expectations and impacted future forecasts leading to a goodwill impairment. \n o  Continuing organic revenue growth (18.9% vs FY 23) in newly separated and strengthened WeDriveU \n § UK & Germany : \n o  In UK Bus an improved funding agreement agreed with TfWM for 2025 as an important first step towards sustainable profitability. UK Bus benefitted from an increase in demand for services and the benefit of price rises, with commercial passenger numbers up 9.5% and a price increase from July 2024 of 6% being implemented. \n o  Significant restructuring within UK Coach making progress, with margin upside expected in FY 25 from a range of different initiatives \n o  German Rail performance reflects continuing industry challenges. Discussions with local PTAs are ongoing and remain constructive \n Outlook \n § Further to the appointment of the new chair Philip White, effective 1 st May 2025 and the North America School Bus transaction, we expect provide a trading update ahead of the AGM in June 2025. \n § In FY25, on a continuing business basis, the Group expects to make continued revenue and adjusted operating profit progress, with further strong performance from ALSA and ongoing growth in WeDriveU, alongside further recovery in UK & Germany \n § Sale of North America School Bus expected to complete early in Q3 \n § Group expects Covenant Gearing to remain broadly neutral for FY25 depending on the timing of, and closing adjustments for, the disposal of North American School Bus. The Group continues to target organic reduction to 1.5-2.0x range over time \n   \n *All revenue performance numbers are expressed on an organic, constant currency basis (OCC). \n # Net upfront proceeds for covenant deleveraging, after deduction for debt-like items including IFRS 16 leases, deferred capital expenditure, and other items, as well as transaction fees. The net proceeds figure does not include the earn-out amount. The final amount of Net Proceeds will be subject to customary completion adjustment by virtue of the completion accounts mechanism and dependent on the timing of completion. \n   \n Ignacio Garat, Mobico Group Chief Executive, said: \n \"The Group achieved good revenue growth in 2024, with adjusted profits in line with guidance, at the lower end of the range. This performance was driven by another record result from ALSA, tight cost control, and targeted pricing actions, along with a mixed performance in the UK and the impact of continuing industry challenges in German rail.  The sale of North America School Bus, announced on 25 April 2025, represents an important first step in strengthening our balance sheet, and we continue to explore further options to accelerate debt and leverage reduction. Looking ahead, the disposal will also enable us to reallocate capital to attractive growth opportunities across the Group, particularly in ALSA. We look forward to making progress in 2025.\" \n   \n \n \n \n \n   \n \n \n  FY 24 \n \n \n FY 23 \n Restated 2 \n \n \n Change (Constant FX) \n \n \n Change (Reported) \n \n \n \n \n Group Revenue \n \n \n £ 3.41 bn \n \n \n £3.15bn \n \n \n 10.3 % \n \n \n 8.3 % \n \n \n \n \n Group Adjusted EBITDA 1 \n \n \n £ 426.2 m \n \n \n £386.0m \n \n \n 13.1 % \n \n \n 10.4 % \n \n \n \n \n Group Adjusted 1 Operating Profit \n \n \n £ 187.7 m \n \n \n £168.6m \n \n \n 14.4 % \n \n \n 11.3 % \n \n \n \n \n Group Adjusted 1 Profit Before Tax \n \n \n £ 101.1 m \n \n \n £92.9m \n \n \n \n \n \n \n \n \n \n \n Adjusted basic 1 EPS \n \n \n 4.8p \n \n \n 4.5p \n \n \n \n \n \n \n \n \n \n \n Dividend per share \n \n \n 0.0p \n \n \n 1.7p \n \n \n \n \n \n \n \n \n \n \n Return on Capital Employed \n \n \n 10.2% \n \n \n 7.0% \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Statutory \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Group Operating Profit/(Loss) \n \n \n £ (519.9) m \n \n \n £(43.2)m \n \n \n \n \n \n \n \n \n \n \n Group Loss Before Tax \n \n \n £(609.3) m \n \n \n £(120.1)m \n \n \n \n \n \n \n \n \n \n \n Group Loss After Tax \n \n \n £(793.8) m \n \n \n £(184.2)m \n \n \n \n \n \n \n \n \n \n \n Basic EPS \n \n \n (134.2)p \n \n \n (33.7)p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Free cash flow \n \n \n £ 210.2 m \n \n \n £163.7m \n \n \n \n \n \n \n \n \n \n \n Covenant net debt \n \n \n £991.3m \n \n \n £987.1m \n \n \n \n \n \n \n \n \n \n \n Covenant gearing \n \n \n 2.8x \n \n \n 3.0x \n \n \n \n \n \n \n \n \n \n \n   \n   \n Enquiries \n   \n \n \n \n \n Helen Cowing, John Dean \n \n \n Mobico Group \n \n \n Tel: +44 (0)121 803 2580 \n \n \n \n \n Stephen Malthouse,  Matt Denham,  Antonia Pollock \n   \n \n \n Headland \n \n \n Tel: +44 (0)7734 956 201 \n Tel: +44(0) 7551 825 496 \n Tel: +44 (0)7789 954 356 \n \n \n \n \n A live webcast of the analyst meeting taking place today at 9:00 a m (BST) will be available on the investor page of the Group's website: www.mobicogroup.com.   \n   \n Notes \n 1. To supplement IFRS reporting, we also present our results (including EBITDA) on an adjusted basis to show the performance of the business before adjusting items. These are detailed in note 5 to the Financial Statements and principally comprise intangible amortisation for acquired businesses, re-measurement of historic onerous contract provisions and impairments. In addition to performance measures directly observable in the Group financial statements (IFRS measures), alternative financial measures are presented that are used internally by management as key measures to assess performance. \n \n 2. FY 2023 has been restated in respect of a correction to the onerous contract provisions in German Rail. This has changed 2023 Group Statutory Operating Profit/Loss from £(21.4) m to £ (43.2 m ) , Group Statutory (Loss) Before Tax from £( 98.3 m ) to £( 120.1m) Group Statutory Loss After Tax from £( 162.7 )m to £( 184.2)m and FY 2023 statutory EPS from ( 30.2) p to (33.7) p . Please see note 1 to the Financial Statements. \n   \n 3. This announcement contains forward-looking statements with respect to the financial condition, results and business of Mobico Group. By their nature, forward-looking statements involve risk and uncertainty and there may be subsequent variations to estimates. Mobico's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standard, Mobico does not undertake to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Forward-looking statements can be made in writing but also may be made verbally by members of the management of the Group (including without limitation, during management presentations to financial analysts) in connection with this announcement.   \n   \n   \n Results overview \n In FY 24, the Group has delivered another good revenue performance across most of the major business units reflecting a continuing ability to capture growth in markets with attractive long-term drivers. ALSA has delivered another record performance. Crucially the results reflect another year of continued and substantive change, principally within two of the divisions, North America and UK & Germany. Both have embarked on a plans to reposition their operations to address markets that have either faced significant structural challenges (German Rail, UK Bus & UK Coach), or where that repositioning will make them more effective and able to unlock further opportunity (NA School Bus and WeDriveU). In each case, the businesses have taken decisive action that will together have a further positive impact in FY 25. As we continue to drive these improvements, the Group's priority - debt and leverage reduction - remains; the divestment of NA School Bus, which will be completed in Q3 25, is an important first step in accelerating that process. \n   \n \n \n \n \n   \n \n \n Adjusted \n \n \n   \n \n \n Statutory Restated 1 \n \n \n   \n \n \n \n \n £m \n \n \n FY 24 \n \n \n FY 23 \n \n \n Change \n \n \n FY 24 \n \n \n FY 23 \n \n \n Change \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ALSA \n \n \n 1,327.6 \n \n \n 1,165.4 \n \n \n 13.9% \n \n \n 1,327.6 \n \n \n 1,165.4 \n \n \n 13.9% \n \n \n \n \n North America \n \n \n 1,205.3 \n \n \n 1,115.6 \n \n \n 8.0% \n \n \n 1,205.3 \n \n \n 1,115.6 \n \n \n 8.0% \n \n \n \n \n UK and Germany \n \n \n 879.5 \n \n \n 869.9 \n \n \n 1.1% \n \n \n 879.5 \n \n \n 869.9 \n \n \n 1.1% \n \n \n \n \n Group \n \n \n 3,412.4 \n \n \n 3,150.9 \n \n \n 8.3% \n \n \n 3,412.4 \n \n \n 3,150.9 \n \n \n 8.3% \n \n \n \n \n Operating profit/(loss) \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n ALSA \n \n \n 186.1 \n \n \n 136.8 \n \n \n 36.0% \n \n \n 176.9 \n \n \n 121.0 \n \n \n 46.2% \n \n \n \n \n North America \n \n \n 38.3 \n \n \n 27.1 \n \n \n 41.3% \n \n \n (531.6) \n \n \n (7.1) \n \n \n (7387.3)% \n \n \n \n \n UK and Germany \n \n \n (2.8) \n \n \n 23.7 \n \n \n (111.8)% \n \n \n (109.0) \n \n \n (120.6) \n \n \n 9.6% \n \n \n \n \n Central Functions \n \n \n (33.9) \n \n \n (19.0) \n \n \n (78.4)% \n \n \n (56.2) \n \n \n (36.5) \n \n \n (54.0)% \n \n \n \n \n Group \n \n \n 187.7 \n \n \n 168.6 \n \n \n 11.3% \n \n \n (519.9) \n \n \n (43.2) \n \n \n (1103.5)% \n \n \n \n \n Operating margin \n \n \n 5.5% \n \n \n 5.4% \n \n \n 0.1% \n \n \n (15.1)% \n \n \n (1.4)% \n \n \n (13.9%) \n \n \n \n \n   \n 1 FY 23 has been restated in respect of a correction to the onerous contract provisions in German Rail. Please see note 1 to the financial statements. \n Revenue grew by £261.5m (8.3%) on a reported basis, and by 10.3% on an OCC (organic constant currency) basis. This principally reflects record performances at ALSA , continuing passenger growth in most other businesses, and positive impact from price increases of £116.1m (equivalent to around 3.7%). Adjusted Operating Profit grew 11.3% to £187.7m (with Statutory Operating Loss of £(519.9)m). \n ALSA 's record performance continued to reflect growth across the business, including strong performances in Regional and Long Haul, with Adjusted Operating Profit up 36.0%, driven by revenue growth of 13.9%. Long-Haul was supported by the renewed 'Young Summer' scheme, though Long-Haul growth progressed after that programme ended in September, driven by effective revenue management and CRM. ALSA continued also to see revenue from the multi-voucher scheme which has been extended to H1 2025 under the current framework. \n North America grew revenue by 8.0% on a reported basis (11.0% at on an OCC basis), reflecting progress in both School Bus and WDU (WeDriveU). WDU delivered revenue growth of 15.8%, despite the previously flagged $25m reduction in volumes from one technology customer in the period. Adjusted Operating Profit increased to £38.3m (up 41.3% vs. FY 23), with both route recovery and pricing gains contributing to the School Bus result, and with important contract wins in WDU also having an impact. However, persistent market challenges such as driver wage inflation and increased maintenance costs have impacted future forecasts leading to a goodwill impairment in School Bus. \n In the  UK and Germany , revenues increased 1.1%. With continued mixed trading in  UK Coach  and  UK Bus  with the latter's patronage improving, UK turnover grew 2.1%. However, the divisional result was also affected by a further decline in  German Rail .  Adjusted Operating profit in UK and Germany declined £(26.5)m in FY24 principally reflecting the continuing challenges faced by the Group due to the ongoing challenges in the German Rail Industry. Discussions with the local PTAs to address the ongoing challenges with the German Rail contracts are ongoing and remain constructive. The UK business benefited from a reduction in losses at NXTS due to the turnaround work undertaken. UK Coach profit decline reflects, in part, the result of fewer Rail strikes compared to FY 23. UK Bus closed the year having taken an important step forward in its changing relationship with its main customer, TfWM (Transport for West Midlands) with the announcement of a new funding agreement to December 2025, as all parties continue to evaluate franchising.  The expectation is that the new agreement with UK Bus should result in improvements following the recent history of weak financial performance. \n   \n \n \n   \n Balance Sheet \n At 31 December 2024, the Group had £803.1m of cash and undrawn, committed facilities and a covenant gearing ratio of 2.8x (FY 23: 3.0x). The Group continues to benefit from strong liquidity having earlier in the year extended the vast majority of its Core RCF facility a further year to 2029. Nonetheless, our overarching priority to reduce leverage & debt remains in place, as does our longer-term ambition to maintain an Investment Grade rating. \n Adjusted net interest charges for FY 24 rose to £89.8m (£75.2m in FY 23) as a consequence of higher bond coupons and interest on the RCF when drawn. 77.6% of our debt is fixed, with the majority of the floating portion due to revert to fixed in 2025. \n Mobico has made clear its commitment to debt and leverage reduction and the announced sale of the North America School Bus business, which is expected to complete in Q3 25, is an important step in that process. In addition, operational controls have been tightened, particularly over-aged debt collection and capital expenditure appraisals, and there has been an increased focus on asset-light transactions. These measures will help strengthen our balance sheet and will, together with our wider business repositioning activities, drive more commercial behaviours in our operations, improved profitability and better cash flows. \n   \n Adjusting items \n During FY 24, the Group incurred adjusting items after tax of £849.9m (FY 23 restated: £234.6m); principally comprising of the following three items: \n   \n ·      A goodwill impairment of North America School Bus of £547.7m ($695.8m). Whilst School Bus has demonstrated its recovery from the pandemic effects it continues to face significant headwinds such as driver wage inflation and rising maintenance costs. These headwinds reduced profitability below expectations and have been reflected into future cash flow forecasts. Furthermore, future improvements have only been included to the extent that they can be objectively evidenced as of the FY24 year end. Consequently, the carrying value of the business has been reduced significantly and is now more closely aligned to the expected market value. \n ·      A £194.4m tax charge in relation to derecognition of deferred tax assets in the UK and North America. This is as a result of the length of time it would take to utilise the losses, based on the same future cash flow forecasts as described above; as well as further negative evidence as to ongoing recognition including further tax losses being made in the UK in FY 24 and the goodwill impairment in North America as described above. This write-off has no impact on the ability of the Group to utilise the losses in future years and hence no impact on future cash tax. \n ·      An £86.4m charge for the remeasurement of the German Rail onerous contract provision relating to the RRX contracts. This was as a result of the worsening of industry-wide cost pressures compared to our previous expectations; most pertinently in relation to driver shortages, which have not recovered as quickly as we had previously anticipated. This has also had a subsequent impact on higher investments being required in driver pay, recruitment and training to attempt to improve the shortage issues. \n   \n A full breakdown of all adjusting items is shown in the CFO report. \n   \n Dividend \n As the Group remains focused on reducing debt and leverage, the Board has decided that no 2024 dividend will be paid. \n   \n Outlook \n In FY25, on a continuing business basis, the Group expects to make continued revenue and adjusted operating profit progress, with further strong performance from ALSA and ongoing growth in WeDriveU, alongside further recovery in UK & Germany. \n   \n Long - term guidance \n Given the significance of the sale of NA School Bus, we are reviewing the Group's long-term financial targets and will update the market in due course. \n   \n Strategic Commentary \n Despite another year characterised in part by significant, continuing challenges in some businesses and some consequently disappointing results, 2024 has been another year of hard work and meaningful positive change across the Group, with each of the businesses at different stages of structural improvement or growth. It is also an important characteristic of the Group that, although diverse, it has a clear, unifying purpose - improving social mobility, reducing harmful emissions from transport, and facilitating economic development across regions. The underlying momentum in demand for low emission and mass transit mobility solutions is likely to provide long-term structural support to many of our key markets. \n In FY 24, the further progress delivered by both ALSA and the North America businesses has been particularly encouraging. The former has continued to capture significant volume growth with ALSA delivering another record year. The latter has reaped the rewards of important improvements made to its operations over the last 18 months. NA School Bus delivered a strong bid season with net routes won for the first time in a decade. And WDU delivered good growth in revenue and profits, despite reduced spending from one significant customer. \n In three of our businesses, ( UK Bus, UK Coach and Germany ), leadership continued to take decisive action, both in anticipation of and in response to, continuing challenges, as well as potential market change. They too have taken important steps forward even if it will take a little time before the rewards are as clearly evident. In UK Coach important changes have been made to operations to better address seasonal business fluctuations and optimise profitability, whilst continuing to improve our customer offering and strengthen our market positions. In UK Bus , we enter a new phase in our partnership arrangement with TfWM (Transport for West Midlands) as we transition from an operating model that formally ended in December 2024, has subsequently been extended to December 2025, and will likely evolve as we and the authority contemplate the potential move towards franchising. \n   \n German Rail negotiations \n Discussion with German Rail PTAs (Passenger Transport Authorities) are continuing and remain constructive. Nonetheless, the outcome of those discussions remains critical to the fortunes of our German business. The increase in the onerous contract provision principally reflects the continuation of, and the worsening of compared to prior expectations, industry-wide issues - particularly around driver shortages and the consequent increased costs and investments to attempt to mitigate where possible, and penalties for the subsequent service reductions. \n   \n Post year-end leadership changes \n In February we announced that Helen Weir had informed the Board that, for personal reasons, she does not intend to stand for re-election as a member of the Board at the Group's 2025 AGM. We have since appointed a new Chair, Phil White, who assumes the role with the Group on 1 st May, at which time Helen will step down. We are grateful to Helen for her contribution to the Mobico Group whilst in the Chair and wish her well. We're delighted to welcome Phil to the business, who brings considerable and relevant experience to the role. \n   \n We have also made two changes to operational leadership. We're delighted that Francisco (Paco) Iglesias has accepted the role of Group COO (Chief Operating Officer), whilst remaining as CEO of ALSA. Paco brings 30 years of experience with ALSA - a business which has a very strong track record of delivery. In the UK & Germany, following the departure of Alex Jensen as CEO, Kevin Gale has assumed that leadership role. Kevin brings wide-ranging operational experience within the transport (Bus and Rail) industry and was previously Group Operations Director at Mobico Group, which he joined in 2013. \n   \n Key contract wins \n During FY 24 we secured 36 new contract wins, compared with 43 won in FY 23, with annual contract revenues higher than in FY 23 (£144m vs. FY 23: £126m), and total contract values of £ 766m . Average Operating Profit margins on those contracts are 10%, with 28% ROCE. The overall conversion rate on bids submitted and awarded was 23%. The largest part of those contracts are Asset-Light in nature, consistent with our strategic ambition to improve ROCE. \n   \n Priority remains debt & leverage reduction \n Debt & Leverage reduction remains an immediate and continuing priority for the Group with the sale of NASB an important first structural step in that process. The Board, in partnership with the management team, continues to review all available options. In the meantime, our increased discipline around capital allocation, a disciplined CapEx approvals process, and a clear focus on cash has delivered early benefits that will grow as profitability does. \n Achieved, so far: \n •     Targets for organic reduction in debt set out at HY 24 have been achieved, and this remains an important initiative driving better outcomes for the business. \n •     Our two successful 'Accelerate' cost reduction programmes have both now concluded, having delivered savings of £34m in FY24, in excess of target. \n •     The divestment of School Bus has progressed the Group's commitment to debt reduction . \n Further step-change options? \n •     Further options to reduce debt and leverage remain under active consideration albeit the business enjoys ample liquidity and no debt refinancing for the vast majority of the Core RCF facility due until 2029. \n After launching a Company-wide initiative focused specifically on cash improvement and debt reduction at HY 24, those programmes have delivered significantly in excess of the projected FY 24 target of £25m. Further, we remain on-track to deliver the target of an additional £25m in FY25. This programme sits outside the Accelerate cost-reduction initiatives that have themselves delivered ahead of expectations in FY24, with £52m of savings achieved and a further small uplift expected in FY25 as these savings annualise. The measures taken have both reduced costs and fundamentally improved the competitiveness of our businesses across the portfolio, underpinning profit sustainability. \n   \n Environmental, Social & Governance \n Mobico's Evolve strategy remains directly aligned to pressing environmental and social needs in society. It operates tailored solutions that enable communities to transition from low occupancy modes of transport to much more efficient, cleaner and safer mass transit choices. Those choices advance global ambitions for both a low carbon society and greater social mobility. \n The Group is retaining focus on our transition to Zero Emissions Vehicles (ZEVs) in fleets across businesses, around the world - whilst also ensuring that their adoption is financially and commercially sensible for our customers and our wider stakeholders. Profitability is critical to innovation and investment, and Mobico is determined to deliver sustainable solutions that are also financially sustainable. \n Mobico has previously set out zero emission fleet targets to reach net zero by 2040 (Scope 1 & 2 emissions) and an interim target of 1,500 ZEVs in service or on order by the end of 2024. However, during the year we made the commercial decision to slow the rate of further ZEV orders in the short term, to reflect our unrelenting focus on cash generation and deleveraging while our business performance continues to improve. As a consequence, our 2024 outturn on ZEVs was 1,100 compared with the target of 1,500. Nonetheless, our longer term targets remain unchanged at the current time, subject to any necessary adjustment in the event of the sale of School Bus. We will continue to review those and other targets in the context of the overall scale of the Group as well as financial, commercial and sustainability priorities. \n   \n Divisional Results overview \n The following section describes the performance of the Group's continuing business for the twelve month period to 31 December 2024, compared to the same period in 2023. \n   \n ALSA \n ALSA is the leading company in the Spanish road passenger transport sector. It has, over a number of years, significantly diversified its portfolio away from predominantly Long Haul services to having a multi-modal offering, which today spans Regional and Urban Bus and Coach services across Spain, Morocco, Switzerland, Portugal and Saudi Arabia. \n   \n \n \n \n \n   \n \n \n FY 24 \n \n \n FY 23 \n \n \n Change \n \n \n Change \n \n \n \n \n   \n \n \n m \n \n \n m \n \n \n m \n \n \n % \n \n \n \n \n Reporting currency (£) \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n \n \n \n Revenue \n \n \n £1,327.6 \n \n \n                   £1,165.4 \n \n \n £162.2 \n \n \n 13.9% \n \n \n \n \n Adjusted Operating Profit \n \n \n £186.1 \n \n \n £136.8 \n \n \n £49.3 \n \n \n 36.0% \n \n \n \n \n Statutory Operating Profit/(Loss) \n \n \n £176.9 \n \n \n £121.0 \n \n \n £55.9 \n \n \n 46.2% \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Local Currency (€) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n €1,568.5 \n \n \n €1,340.4 \n \n \n €228.1 \n \n \n 17.0% \n \n \n \n \n Adjusted Operating Profit \n \n \n €219.8 \n \n \n €157.4 \n \n \n €62.4 \n \n \n 39.6% \n \n \n \n \n Adjusted Operating Margin \n \n \n 14.0% \n \n \n 11.7% \n \n \n 2.3% \n \n \n 2.3% \n \n \n \n \n Statutory Operating Profit/(Loss) \n \n \n € 209.0 \n \n \n €139.2 \n \n \n €69.8 \n \n \n 50.1% \n \n \n \n \n Statutory Operating Margin \n \n \n 13.3% \n \n \n 10.4% \n \n \n 2.9% \n \n \n 2.9% \n \n \n \n \n FX rates: FY 24: €1.18:£1; FY 23: €1.15:£1 \n   \n KPIs \n   \n \n \n \n \n ALSA Long Haul (as reported) \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n PAX total Long Haul (000's) \n \n \n 16,675 \n \n \n 14,574 \n \n \n 15.2% \n \n \n \n \n PAX (9 main corridors) (000's) \n \n \n 11,269 \n \n \n 9,905 \n \n \n 13.8% \n \n \n \n \n Yield (9 main corridors) \n \n \n 22.37 \n \n \n 21.38 \n \n \n 4.7% \n \n \n \n \n Occupancy (9 main corridors) \n \n \n 62% \n \n \n 61% \n \n \n 1%pt \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ALSA Urban \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n PAX (000s) \n \n \n 103,960 \n \n \n 97,674 \n \n \n 6.4% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ALSA Regional Risk & Venture \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n PAX (000s) \n \n \n 50,572 \n \n \n 45,098 \n \n \n 9.8% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n ALSA \n Highlights \n   \n ALSA continues to grow across a diverse portfolio delivering another strong result in the year; a new record for the business, on different measures including revenue: \n   \n ▪     Strong growth with revenues up 17.0% (at constant currency) (13.9% on a reported basis) and Adjusted Operating Profit growth of 39.6% (at constant currency); Statutory Operating Profit of €209.0m, an increase of 50.1% versus FY 23; \n ▪     Regional revenues 11.9% higher vs. FY 23 due to operational efficiencies, passenger growth and the multi-voucher scheme impact \n ▪     Long Haul 9 Main Corridors revenues up 19.1% vs. FY 23 driven by passenger growth (up 13.8%) and yields (up 4.7%); \n ▪     Urban up 0.9%, despite absorbing the impact of the Bilbao strike; \n ▪     Diversification and international expansion (including Portugal) continue with revenue growth of 67.4% and 87.6% respectively, vs FY 23; \n ▪     Sophisticated CRM and revenue management enables customer segmentation and management of KPIs; \n ▪     Successfully managing increased competitive pressure from HSR (High-Speed Rail); \n ▪     New businesses: CanaryBus and Medical Transport, progressing well \n   \n ALSA \n Commentary \n   \n ALSA delivered another record year with Revenue of £1,327.6m, up 17.0% (at constant currency) when compared to FY 23. Adjusted Operating profit was £186.1m, a 36.0% improvement over the previous year. \n ALSA's new record performance in FY 24 further enhanced its reputation as the leading operator in the market. Continued close control of key metrics - Occupancy, Revenue Management, Digital Sales and Customer Experience, all of which are improved vs last year - has again contributed to this performance. \n At the half-year stage, one key expectation for the balance of 2024 was the continued growth of Long Haul, including from the renewed Young Summer discount scheme (90% discount for passengers aged 18 - 30, travelling between 1 July and 30 September) - and that continuing growth has been delivered. Along with a number of record days in the Summer season, Young summer scheme carried 1.5m passengers in 2024 representing a +13.7% increase vs 2023 figures. Encouragingly, demand continued to be strong after the Young Summer scheme ended in September. The business has also delivered strong growth from Regional, as well as upside in some Urban contracts. Diversification through the award of new contracts - and Portugal - have also been key contributors. \n   \n Competition \n The most notable competition risk to ALSA Long Haul continues to be from the liberalisation of HSR (High Speed Rail) corridors, which has been affecting a growing number of ALSA routes (Madrid-Murcia has recently joined Madrid-Barcelona and Madrid-Alicante as key areas of overlap), particularly when those operators run aggressive pricing campaigns. This is another reason why the quality of ALSA's service and of the whole experience delivered is so crucial, and why it succeeds in retaining the loyalty of so many. \n Business plans are not predicated upon a repeat of Young Summer - or any other such short-term incentives - and the business continues with its long-established strategy of broadening the range of markets and segments to which it and The Group are exposed. In the meantime, we await clarity on whether the Young Summer scheme will be repeated. We continue to progress with the proportion of ticket sales via digital platforms, reflecting our strategic focus on enhancing the customer experience and improving retention. Digital sales closed FY 24 at 71.4% (vs 65.7% in FY 23). \n   \n International expansion and diversification \n In recent years, international expansion has strengthened ALSA's position in key markets. Successful entry into 3 countries in the last 5 years is supported by a strong pipeline of opportunities, including M&A and tenders in emerging geographies. Switzerland/France have built a successful hub in five years, creating an extensive EU network with urban PSO contracts, as well as school and occasional services. Portugal continues to experience organic growth, while MENA ( Middle East & North Africa ) is progressing with strategic developments and new opportunities and tenders. Progress was also delivered in KSA ( Saudi Arabia ) and others. An extension to our contract in Bahrain was also secured. Whilst in Switzerland the market was affected by reduced demand, ALSA became the first operator to run 100% EVs in Geneva. And there remain opportunities in FY 25 for further service-distance growth, brand unification and cost optimisation. \n   \n During FY 24 CanaryBus , the most recent 'new territory' acquisition, has performed well in its first ten months of ALSA ownership, and in line with the business case at acquisition. The integration process has been meticulously managed across all departments, fostering operational excellence and safety. With continuing growth in the Tourism market likely, CanaryBus promises further underlying progress in FY 25. \n   \n ALSA continues to evaluate other opportunities to broaden its scope in new countries - whilst also considering opportunities in discretionary services, especially in sectors such as MICE ( Meetings, Incentives, Conferences, and Exhibitions ) and corporate transport, which are linked to high-potential regions. \n   \n New contracts and opportunities \n There remains a strong pipeline of opportunities for ALSA to pursue, to build on the high level of retentions consistently enjoyed by the business. In 2024 an asset-light was won for the operation of healthcare transport service in the Basque country, and for 2025 Catalonia, covering both scheduled and urgent services. The opportunity in Basque Country came about after the failure of an incumbent and could be worth c.€154m in total. Furthermore in Catalonia, ALSA was awarded a lot with the best technical evaluation of all the bids (gross cost contract worth €152m in 6 years) with expected start of operation by year end. More importantly, it's a vindication of ALSA's strategy to develop into new and adjacent markets, like Healthcare, and progressively build their positions. \n   \n North America \n The North America business operates in thirty-four states and two provinces in Canada. School Bus operates through medium-term contracts awarded by local school boards. Within WeDriveU, Transit focuses predominantly on Paratransit (the transportation of passengers with special needs) and Urban Bus. Shuttle offers corporate employee shuttle services to a range of sectors including Technology, Biotechnology, Manufacturing and Universities such that we now have a stronger, diversified portfolio of sectors and customers. \n   \n \n \n \n \n \n \n \n FY 24 \n \n \n FY 23 \n \n \n Change \n \n \n Change \n \n \n \n \n \n \n \n m \n \n \n m \n \n \n m \n \n \n % \n \n \n \n \n Reporting currency (£) \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n \n \n \n Revenue \n \n \n £1,205.3 \n \n \n £1,115.6 \n \n \n £89.7 \n \n \n 8.0% \n \n \n \n \n Adjusted Operating Profit \n \n \n £38.3 \n \n \n £27.1 \n \n \n £11.2 \n \n \n 41.3% \n \n \n \n \n Statutory Operating Profit/(Loss) \n \n \n £(531.6) \n \n \n £(7.1) \n \n \n £(524.5) \n \n \n (7387.3)% \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Local currency ($) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n $1,540.5 \n \n \n $1,387.7 \n \n \n $152.8 \n \n \n 11.0% \n \n \n \n \n Adjusted Operating Profit \n \n \n $49.0 \n \n \n $33.7 \n \n \n $15.3 \n \n \n 45.4% \n \n \n \n \n Adjusted Operating Margin \n \n \n 3.2% \n \n \n 2.4% \n \n \n 0.8% \n \n \n 0.8% \n \n \n \n \n Statutory Operating Profit/(Loss) \n \n \n $(679.4) \n \n \n $(8.8) \n \n \n $(670.6) \n \n \n (7620.5)% \n \n \n \n \n Statutory Operating Margin \n \n \n (44.1)% \n \n \n (0.6)% \n \n \n (43.5)% \n \n \n (43.5)% \n \n \n \n \n FX rates: FY 24: $1.28:£1; FY 23: $1.24:£1 \n   \n KPIs \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NA - Shuttle \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n PAX (000's) \n \n \n 11,125 \n \n \n 8,899 \n \n \n 25.0% \n \n \n \n \n Service Level (avg no. of vehicles through year) \n \n \n 1,061 \n \n \n 957 \n \n \n 10.9% \n \n \n \n \n   \n North America \n Highlights \n   \n   \n ▪     North America delivered an encouraging performance in 2024, with Revenue of £1,205.2m, up 11.0% (at constant currency) (8.0% on a reported basis) when compared to FY 23. Adjusted Operating profit was £38.3m, a 41.3% improvement over the previous year. This reflects continuing progress within both NA School Bus and WeDriveU - despite the distraction created for both businesses through the year as a consequence of the School Bus disposal process. \n ▪     The statutory loss principally reflected a £547.7m impairment charge in relation to sale of School Bus (as described in detail above) and when compared to the adjusted profit represented a £524.5m deterioration when compared with FY 23. \n ▪     Since the pandemic Mobico has sought to address the long-term challenges which the pandemic \n created for School Bus. Following the appointment of a new leadership team in 2023, significant operational improvements have been made, focused on improving driver retention and recruitment, route reinstatement, and improved contract pricing. The business has also improved fleet allocation which has led to better asset utilisation, cash flow and customer satisfaction. All of these culminated in School Bus delivering a net positive route outcome for the current school year bid season, the first in over a decade. \n ▪     However, whilst School Bus has demonstrated its recovery from the pandemic effects it continues to require significant maintenance and growth capital investment and experienced persistent market challenges such as driver wage inflation and maintenance costs. \n ▪     These headwinds reduced profitability below expectations and have been reflected into future cash flow forecasts leading to a goodwill impairment. \n ▪     As announced on 25 April 2025, the Group has agreed to sell the North America School Bus business to I Squared for an enterprise value of up to $608 million, including an earn-out of up to $70 million which is dependent on certain future performance conditions. Further details of the transaction can be found in the RNS announcement. School Bus will appear in the accounts as held for sale for the period in FY 25 up to the completion date and will report as such. The net proceeds are broadly in line with the carrying value of the business; and the disposal is in line with our stated strategic objectives to improve liquidity and leverage. \n ▪     The separation of WeDriveU will allow that business to flourish with its now separated and focused infrastructure. Whilst the process has necessitated some temporary costs along the way, it is expected that through the balance of FY 25 returns will start to improve as profitability flows through from a strengthening revenue base. \n ▪     WeDriveU delivered strong new order wins, alongside the separation of its operations and support infrastructure from that of School Bus. In terms of total annualised revenue, WDU has secured $73m worth of contracts during the year, contributing $33m of that to revenue in FY 24. As the business settles into its new operating structure, the expectation is to continue to gradually expand operating margins to achieve their sustainable, long-term potential - whilst also capturing a good share of available volume opportunities in this attractive segment. An increasing number of those opportunities are asset-light in nature with all the implications that has for improved capital efficiency. \n   \n School Bus \n Highlights \n   \n ▪     Underlying revenue growth delivered FY 24 7.3% higher (4.4% higher on a reported basis)] than in FY 23; \n ▪     First net positive route outcome (routes won vs routes lost) in over a decade; \n ▪     Improved driver recruitment and retention contributes to competitive strength \n ▪     Much improved fleet allocation to contracts (with 544 vehicles cascaded in the year) and optimised life spans, driving stronger CapEx and cash control; \n ▪     Strong, above inflation, pricing performance with average rate increases for SY 24/25 of 10.3% on expiring contracts and 6.3% on the portfolio overall, ahead of inflationary cost increases; \n ▪     Persistent cost headwinds such as driver wage inflation and higher maintenance costs have offset some of this growth, reducing profitability below expectations and have been reflected into future cash flow forecasts leading to a goodwill impairment. The separation of the two North America businesses into two cash generating units in the year was also a contributing factor to the impairment, as School Bus generates lower cash flows relative to its asset base, compared to WeDriveU. \n ▪     Achievement of targeted cost savings in organisation design workstream, as part of the Accelerate programme. \n   \n School Bus \n Commentary \n As was reported at HY 24, School Bus delivered another successful bidding season in preparation for the School Year 2024 / 2025; a school year start-up process that has subsequently launched well, as expected. The season's route outcome (routes won vs routes lost) was the first to deliver net route gains in over a decade. Overall, in SY 24/25 bidding, the contract retention rate was 94% - an improvement over both of the previous two years. So far, there have been no contract losses for the SY 25/26 bid season, and several successful negotiations already. \n In the three months September to November 2024, the business has secured 228 routes, representing an encouraging early start ahead of the formal bidding process covering the forthcoming SY 25/26 (for which the same process as the prior year will be followed). \n During 2024, the business also completed its latest phase of price increases on contracts that were ready for renewal. That means that for the SY 24/25, prices on the renewing portfolio rose by 10.3% (6.3% overall) having risen for the earlier renewing portfolio (i.e. different contracts) for SY 23/24 by 13.1% (7.5% overall). This is all part of the normal cycle of price renegotiations which will continue as the team approaches the bidding season for SY 25/26, when a new batch of contracts will be subject to review. \n Operational efficiencies have continued to be a focus in the business. In September 2024 a new Asset Management team was created to centrally manage our cascade and asset utilisation process, which has traditionally been handled by maintenance leaders. The business is now far more adept at identifying and tracking under-utilised fleet having created and deployed the new MOR ('Max On Road') system that highlights underutilised assets and makes them available elsewhere. In FY 24, we cascaded 544 buses to meet contract requirements in this way. This improved fleet allocation of vehicles no longer suited to one customer, to other contracts, is helping to improve asset utilisation, cash flow and customer satisfaction. \n At the half year we reported that the team's restructuring, to better service high priority CSCs (Customer Service Centres), was having a positive impact on driver recruitment and retention - historically a significant pressure point for the wider industry. Drivers employed at the end of 2024 numbered 12,116 (vs. 11,689 at the end of 2023). This means that, at the close of the year, only 13 locations (8%) have a driver gap of 10 or more - well within the manageable risk level. This represents a competitive differentiator in the market and ensures we can deliver market leading levels of reliability in our service to customers. \n As at 20 December 2024 we operated 11,198 routes (for SY 23/24 we operated 10,986 routes). New contract wins included West Ada, Idaho; Calgary Catholic in Alberta; and Indian River, New York. Contracts where we are to provide an expanded service include: Duval County, Florida and San Bernardino in California. \n The roll-out of new technology is also continuing. Bytecurve (the system used to generate live time performance data to analyse and improve service) is currently running in 146 of 167 CSCs, with other pilots running and further deployment planned as remaining sites require it. Centralised billing is currently in use at 58 CSCs with planned completion in late 2025. \n   \n WeDriveU \n Highlights \n   \n •     Following separation from School Bus, WDU now enjoys a strengthened operating structure from which to build on its good recent growth. \n •     Continued organic growth with FY 24 revenues up 18.9% (15.8% on a reported basis) vs FY 23. \n •     Further notable contract wins, retentions and mobilisations secured, including with Netflix, Amazon and Uber, with continuing momentum throughout the year; \n •     Rapid expansion of services for WMATA (Washington Metropolitan Area Transport Authority), while maintaining prior year operational service levels; \n •     100% retention of key strategic contracts (only 3 losses elsewhere); \n •     Completed the process of both combining Transit & Shuttle operations, establishing a central services model, and separating the unified WDU from School Bus; \n   \n WeDriveU \n Commentary \n During 2024 WeDriveU , hitherto the lead brand in the Shuttle business, has been adopted as the single, unifying brand for the whole Transit & Shuttle operation, bringing together the seven North America Transit brands that existed previously. \n FY 24 has been an encouraging year insofar as contract wins and retentions have continued to be secured whilst the business has been implementing very significant operational changes in support of both the establishment of a central services model for the newly combined WDU entity, and the final separation of WDU from School Bus. \n Workstreams separating the now combined WDU business from School Bus have been wide-ranging and are now largely complete. These include establishing our new Finance systems, transitioning our payroll and our Maximo maintenance systems, and the Standardisation team's focus on building a suite of Standard Operating Procedures (SOPs). We anticipate process improvements and efficiencies to continue to build throughout 2025 as these systems and associated processes mature. \n We also realigned our people resources and added strategic talent in key positions in H2 24 to lead strategic plans and implementations enabling independence from School Bus systems, resources and processes. This realignment will increasingly bear fruit as we execute on our 3-year plan. \n The greatest success of WDU in 2024 is that it has all but completed such fundamental changes across its operations, albeit with some disruption to the business. The objective of all those improvements to the business is to properly equip it to address what we continue to believe is a long-term growth market, where the WDU reputation is one of the strongest in the market. \n Delivering improvements in profitability remains a key priority and will be gradually delivered as the business settles into its new structure. In FY 24 WDU progressed further with its initiative to improve margins from contracts that have been deemed less profitable than is acceptable. Such measures have improved EBIT by 40 basis points, generat ing an additional $2m in additional profits for the year. Areas of focus - across different CSCs - have included subcontractor spend, liquidated damages (LDs), and staffing levels & costs. Plans for improvement, along with clear responsibilities, have been allocated to each. \n In the meantime, new order wins have continued the momentum of the first half of the year and through FY 24 the business won contracts that will deliver $73 m in annualised revenue. In addition, approximately 95% of strategic contracts have been retained, where they have come for renewal. Key customers who have renewed or extended their agreements with WDU include Amazon Los Angeles and Netflix Los Angeles adding to a new win with Uber. \n Our partnership with a leading electric car manufacturer has seen significant growth as the customer has rapidly expanded its operations. Our ability to adapt and respond quickly to their evolving needs has strengthened their trust in us and demonstrated our capacity to take on additional responsibilities, further solidifying the partnership. \n The business has continued to demonstrate the importance of high quality of service levels - including regarding safety, on time performance, and reliability. And they remain important performance measures to drive, especially where there is greater competition or customer budget pressure. \n The rapid launch in July of the extended Paratransit service for WMATA represented the fastest launch and most expansive contract WDU has mobilised, involving over 750 additional vehicles, significant numbers of new drivers and control of 2 new facilities, which were launched in c3-4 weeks. As a result of the rapid-scaling of volume and routes after mobilisation, we established a third hub in Montgomery County at relatively low-cost to boost on-time performance and service delivery. \n After the gradual recovery of public transit ridership, we experienced in H1 24, we continue to see modest improvement in ridership trends as some employers embrace transportation to facilitate a return to the office. University accounts continue to be stable . We continue to pursue numerous opportunities for growth, especially those that are asset-light and margin-accretive as WDU enters the next phase of its development. \n Pricing has changed little. Though, as reported in H1 24, continuing pressure in some government agency budgets (which seem unlikely to ease under President Trump) will continue to affect some operators and routes. \n   \n WDU has successfully sponsored and developed three major Zero Emission Leadership Coalition events for FY24, reinforcing our thought leadership and engagement with key stakeholders as we continue to adopt ZEV technologies where it is appropriate to do so. \n   \n UK & Germany \n   \n The UK Bus & Coach businesses have successfully executed major organisational change over the last twelve months as each repositions in the face of structural headwinds and emerging opportunities. The German Rail business in particular has acted to address significant industry challenges with critical negotiations with the PTAs (Passenger Transport Authorities) continuing. \n   \n Across UK Bus and Coach, turnover grew 2.1% with the German Rail performance adversely affecting the overall division's result which reported FY 24 Turnover down (1.3)% vs FY 23. In the UK, FY 24 Adjusted Operating Loss reduced (72.3%) when compared to FY 23, significantly impacted by the reduction in rail strike benefit in FY24. In the early part of 2024 a significant cost reduction programme was developed with momentum building through FY 24, spanning both network and operational cost savings as well as organisational and overhead savings as part of the Accelerate 2.0 programme. Those initiatives have laid the groundwork for further improved financial and operational performance in UK Bus and UK Coach in FY 25. \n   \n The German Rail business in particular has acted to address significant industry challenges with critical negotiations with the PTAs (Passenger Transport Authorities) continuing with the objective of resetting the underlying profitability of these long term contracts. \n   \n In Germany, Adjusted Operating Loss declined to £(9.3)m pertaining fully to the RME contract. The increased loss versus the prior year is principally due to a reduction in the expected overall lifetime contract value, which results in adjustments to the IFRS 15 contract asset, and the ending of the Lot1 Emergency Award contract. \n   \n UK \n In the UK Bus sector, Mobico is the market leader in the West Midlands - the largest UK urban bus market outside London. UK Coach is the largest operator of scheduled coach services in the UK, and also serves the fragmented commuter, corporate shuttle, private hire and accessible transport markets. \n   \n \n \n \n \n UK \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n FY 24 \n \n \n FY 23 \n \n \n Change \n \n \n Change \n \n \n \n \n   \n \n \n m \n \n \n m \n \n \n m \n \n \n % \n \n \n \n \n Reported / Local currency (£) \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n \n \n \n Revenue \n \n \n £623.0 \n \n \n £610.1 \n \n \n £12.9 \n \n \n 2.1% \n \n \n \n \n Adjusted Operating (Loss) / Profit \n \n \n £6.5 \n \n \n £23.5 \n \n \n £(17.0) \n \n \n (72.3)% \n \n \n \n \n Adjusted Operating Margin \n \n \n 1.0% \n \n \n 3.9% \n \n \n (2.9)% \n \n \n (2.9)% \n \n \n \n \n Statutory Operating (Loss) / Profit \n \n \n £(12.2) \n \n \n £1.3 \n \n \n £(13.5) \n \n \n (1038.5)% \n \n \n \n \n Statutory Operating Margin \n \n \n (2.0)% \n \n \n 0.2% \n \n \n (2.2)% \n \n \n (2.2)% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n \n \n \n \n UK Bus \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n Commercial and Concessionary PAX (000's) \n \n \n 231,358 \n \n \n 212,241 \n \n \n 9.0% \n \n \n \n \n Commercial PAX (000's) \n \n \n 199,312 \n \n \n 182,037 \n \n \n 9.5% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n UK Coach Core \n \n \n FY 2024 \n \n \n FY 2023 \n \n \n vs FY 2023 % \n \n \n \n \n PAX (000's) \n \n \n 18,397 \n \n \n 19,212 \n \n \n (4.2)% \n \n \n \n \n Yield \n \n \n 13.94 \n \n \n 13.54 \n \n \n 2.9% \n \n \n \n \n Occupancy \n \n \n 67% \n \n \n 70% \n \n \n (3)%pts \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n UK \n Highlights \n   \n The UK delivered Turnover of £623.0m, up 2.1% when compared to FY 23. Adjusted Operating profit was £6.5m, a (72.3)% reduction over the previous year. \n   \n UK Bus revenue grew 7.9% year on year principally driven by fare rises in July 2024 of 6% and July 2023 of 12.5%.  In addition FY23 suffered from the bus drivers strike in H1 23 impacting both revenue and profitability. The fare increases achieved in both 2024 and 2023 were the first two increases since 2017. \n   \n Year on year operating profit was broadly flat, with the negative impacts from cost inflation and lease cost increases from new electric vehicles offset by the absence of driver strikes in 2024, as well as the growth in revenue from passenger and fare rises and overhead cost savings delivered through the year. \n   \n   \n UK White Coach revenue increased by 0.4% but grew 6.7% when adjusted to exclude the FY23 and FY24 impact of rail strikes. The underlying revenue growth was primarily driven by strong yield management - a discipline that National Express continues to prioritise. \n   \n Revenue on our competed routes grew by 4.2%, with PAX (passenger numbers) on these routes reduced YoY by c.0.5%.  Overall, PAX numbers reduced 4.2%, partly as a result of increased competitor activity, and as a result of a network optimisation initiative implemented during Q3 24, which resulted in a c.10%  reduction in service capacity, while improving profitability of services through H2 24. \n   \n The year on year Coach operating profit performance was impacted materially by the scale of rail strikes in 2023 (c£13m negative year on year impact). Further year on year cost pressures were also seen as a result of the significant re investment in new vehicles (post covid network rebuild) impacting lease costs and reflecting general levels of cost inflation.  Together these cost increases outstripped revenue growth from passenger numbers and yield improvement as the business addressed strong competition from both rail and other coach operators.  The impact of these pressures was mitigated by action taken to address the losses within the NXTS business, network optimisation actions (described above) and organisational and overhead efficiencies delivered through the year. \n   \n UK Bus \n Highlights \n   \n •     UK Bus Revenue £265.5m (+7.9%) benefiting from the reversal of the drivers strike impact in 2023, steady passenger growth post Covid rebuild and the benefit of the fare rises secured  in July 2024 of 6% and July 2023 of 12.5%. \n •     Successful negotiations with TfWM in Q4 24 result in a new transition arrangement, with ongoing discussions around our long-term future relationship. The funding settlement between regional bus operators and TfWM has been secured for FY25,  with discussions commenced regarding 2026 onwards in light of potential franchising of the region. \n •     Improvement in operational KPIs, including on-time performance, driven by a continued focus on network performance and reliability. \n •     Overhead costs reduced, moving from 20% of revenue in FY23 to 16% of revenue in FY24 \n •     Collaborative approach to marketing, with joint campaigns with TfWM throughout the year, ending with a free travel scheme over Christmas to drive passenger awareness. \n   \n UK Bus \n Commentary \n   \n FY 24 Revenue growth of 7.9% is the highest in the last 5 years and has been underpinned by fare rises in July 2024 of 6% and July 2023 of 12.5%, on a network that is now 13.5% smaller in mileage terms than it was in 20 19.  Despite this, the West Midlands still remains the cheapest metropolitan operator in the country to its customers. \n Our intensive focus on operational KPIs resulted in achieving higher scores in six of the seven metrics for customer satisfaction in 2024 when compared to 2023 (Your Bus Journey - independent bus user survey - 2024, conducted by transportfocus) \n •     Of which one was customer satisfaction in relation to punctuality where we delivered our best performance metrics on record. (70%, an 8% improvement on 2023). \n •     Continuous improvement on customer satisfaction in 2025, with 9% decrease in the overall number of customer complaints Q1-25 vs Q1-24, with a 20% drop in service reliability complaints. \n •     'Project Clockwork' initiative, which was delivered under 'OPERATE' management principles, aimed at improving punctuality and enhancing our customer's' experience with us and was recognised at the British Quality Foundation Excellence Awards, with our team crowned winners of the Excellence in Customer Experience Award. \n   \n As transport authorities around the country - including TfWM (Transport for West Midlands) - contemplate a shift towards franchising, both National Express and other regional operators are doing the same, with the consultation currently underway. We are committed to exploring the opportunities of franchising, however, the need to strike the balance of risk and reward is the priority; maintaining an appropriate, high quality service to our valued customers, whilst generating a fair return for our shareholders. At the end of December 24, our funding agreement with TfWM came to its scheduled conclusion and an interim agreement has subsequently been successfully concluded for 2025. \n \n \n \n UK Coach \n Highlights \n   \n •     Year on year reduction in Adjusted Operating Profit reflects the loss of rail strike related financial benefit in FY 24 vs FY 23 (c.£13m profit headwind for the full year). \n •     Excluding the impact of fewer rail strikes there was moderate underlying growth in demand in FY 24, yield was up 5.8% with flat customer numbers. Reported passenger volumes, without adjusting for rail strikes, were 4.2% down year on year while yield increased by 2.9%. \n •     A full review of network design and capacity, using OPERATE principles, was performed through H1 24.  This resulted in a timetable relaunch and optimisation of network capacity in May and Sept, delivering significant run rate efficiency through the H2 24 and into 2025; \n •     NXTS profitability improved by £5m year on year, with further work underway to eliminate the remaining run rate losses within the business during 2025; \n •     Retained key routes serving London Stansted and Dublin, meaning across both 2023 and 2024 UK Coach has won all the airports routes that it bid for. \n   \n   \n UK Coach \n Commentary \n   \n   \n FY24 marked a period of market evolution for the UK Coach business.  Settlement of the rail driver disputes marked an end to the significant financial upside for Coach travel across the UK, and the re-establishment of rail as a reliable transport provider and competitor.  Flixbus also stepped up activity within the intercity coach market growing significantly through the year and emerging as a strengthening competitor moving into 2025.  The exit of  Megabus from a number of competed services in the final month of 2024 also reflects the challenging economic environment in the scheduled coach sector.  \n   \n Against this backdrop, UK Coach has delivered Improved yield and maintained strong underlying passenger numbers in FY 24.  After adjusting for the rail strike benefit in both FY 23 and, to a lesser extent, in FY 24, both revenue and yield are both up vs. last year. Regional intercity and regional airport routes have performed well. Route optimisation and efficiency actions have included moving from a static seasonal schedule to a flexible seasonality adjusted schedule. \n Specifically, the UK Coach network has been scaled down from September onwards, by approximately 10%, to opti mise our service and better respond to customer demand. Since this has taken place, utilisation (occupancy) on impacted services has improved and revenue levels have remained broadly consistent with the same period in FY23, with a lower cost of delivery boosting route profitability.  This initiative has only been live since early September, with full benefit expected in 2025. \n Other Coach initiatives are gaining momentum with particular focus on further pricing optimisation, driving conversion rates through an improved web and app solution and le verage of CRM and expanding revenue potential through additional ancillary offers. \n In Ireland, the business has grown in size and profitability over the course of the year, delivering excellent customer service in a market impacted by competition and rail disruption. \n The NXTS business delivered a £ 5 m reduction in losses in FY 24, but did not achieve a return to run-rate profitability in H2 24.  However, following the sale of Stewarts and Mortons (FY24), and the closure of the Gillingham (FY24) and Sydenham (FY23) loss-making operations the business enters FY25 in a much improved financial position.  Management continues to address performance through a number of different initiatives. \n   \n Germany \n In Germany , Mobico is the second-largest rail operator in North Rhine-Westphalia and one of the top five operators in Germany. \n   \n \n \n \n \n   \n \n \n FY 24 \n \n \n Restated 1 \n FY 23 \n \n \n Change \n \n \n Change \n \n \n \n \n   \n \n \n m \n \n \n m \n \n \n M \n \n \n % \n \n \n \n \n Reporting currency (£) \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n \n \n \n Revenue \n \n \n £256.5 \n \n \n £259.8 \n \n \n £(3.3) \n \n \n (1.3)% \n \n \n \n \n Adjusted Operating (Loss) / Profit \n \n \n £(9.3) \n \n \n £0.2 \n \n \n £(9.5) \n \n \n (4750.0)% \n \n \n \n \n Statutory Operating (Loss) 1 \n \n \n £(96.8) \n \n \n £(121.9) \n \n \n £25.1 \n \n \n 20.6% \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Local currency (€) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n €303.0 \n \n \n €298.8 \n \n \n €4.2 \n \n \n 1.4% \n \n \n \n \n Adjusted Operating (Loss) / Profit \n \n \n € (11.0) \n \n \n €0.2 \n \n \n €(11.2) \n \n \n (5600.0)% \n \n \n \n \n Adjusted Operating Margin \n \n \n (3.6)% \n \n \n 0.1% \n \n \n (3.7)% \n \n \n (3.7)% \n \n \n \n \n Statutory Operating (Loss) 1 \n \n \n €(114.4) \n \n \n €(140.3) \n \n \n €25.9 \n \n \n 18.5% \n \n \n \n \n Statutory Operating Margin 1 \n \n \n (37.8)% \n \n \n (47.0)% \n \n \n 10.6% \n \n \n 10.6% \n \n \n \n \n FX rates: FY 24: €1.18:£1; FY 23: €1.15:£1 \n 1 FY 2023 has been restated in respect of a correction to onerous contract provisions. \n   \n German Rail \n Highlights \n   \n Germany had another difficult year reporting Revenue of £256.5m, down (1.3)% (on a reported currency basis) ((1.4%) on a constant currency basis) when compared to FY 23. Adjusted Operating Loss was £(9.3)m. \n   \n ▪     Revenue continued to be impacted by higher operational penalties as a result of train cancellations caused by the continued worsening of industry-wide factors: worsening infrastructure reliability, increased infrastructure repair and renewals activity, both of which impact on driver availability and utilisation \n ▪     In addition, an €102m charge was taken to increase the onerous contract provisions for RRX1 and RRX2/3.  This reflects the further deterioration in anticipated profitability of these contracts, impacted by the worsening industry-wide factors described above. \n   \n It should be noted that the German results presented are stated prior to any mitigations that might be agreed (between the Group and the PTA) in the context of contracts that require both the operator and the PTA to economically re-balance the contract if events outside of the control of the operator impact the original profitability assumed within the contract. \n   \n German Rail \n Commentary \n   \n Passenger volumes were boosted by the German Government's €49 monthly travel initiative, which was extended until the end of 2025, albeit with an increased ticket price of €58 starting January 2025. Despite this, revenue reduced by €4.2m (1.4%) on a constant currency basis due to lower net subsidies received (net of penalties) due to the ongoing industry wide challenges impacting the sector. \n   \n The main structural issues continuing to fundamentally impact our German business and the wider sector remain: industry-wide labour shortage of drivers within the market; mileage and operational disruption caused by a growing level of infrastructure repair and maintenance activity; and continued energy market price volatility and uncertainty. \n   \n The adjusted operating loss of (€9.3m) reflects performance of the RME contract alone, as both RRX contracts are both onerous contracts with in-year losses being offset by utilisation and remeasurements of the onerous contract provision. In relation to RME, the impact of ongoing drivers shortages, network disruption due to construction activity, and changes in energy market price forecasts have impacted on the forward looking profit assumption for the contract. This reduction in total contract value results in an adjustment to the IFRS 15 contract asset. \n   \n In 2023, the German Business benefitted from the performance of the RRX1 Emergency Award contract.  This delivered an operating profit of £4m in 2023.  This contract ended in December 2023 and was replaced by the long term RRX1 contract running from Dec 2023 to Dec 2033.  This contract has now been assessed as onerous and therefore does not contribute to Operating Profit / Loss in 2024; with remeasurements of the onerous contract provision treated as an adjusting item. \n   \n Planned and reactive infrastructure investment on the network in Germany continues to be an operational challenge with significant levels of cancellation of services in the region. This results in significant disruption under our contracts and ongoing elevated levels of performance penalty and challenging resource utilisation. \n \nThe German Rail management team continues to work closely with the German Rail PTAs to address the structural issues facing the industry, and to protect Mobico's interests, within the terms of the current contracts. Whilst it is still too early to tell how those critical discussions might conclude,  it remains clear that all parties are motivated to arrive at a sustainable and commercially viable conclusion. \n   \n Despite the above challenges, significant progress has been made in the year to address the underlying driver shortage and to ensure a stronger resource position moving through 2025 and into 2026.  A significant driver recruitment, training, retention and development programme was launched in early 2024 to arrest the decline experienced in the number of drivers and to reverse the dependency of the business on agency drivers.  By the end of 2024, there were a total of 164 candidates in training (a c12-14 month training process), with a further 152 expecting to commence training during 2025.  This represents a c.€12m pa investment in driver training and development. \n   \n   \n Group Chief Financial Officer's review \n   \n Mobico Group has delivered EBIT within guidance in the full year 2024, with a corresponding improvement in free cash flow and debt.  An underlying good performance with some headwinds mean we have more to deliver but are continuing on a positive journey.  \n   \n Mobico Group has benefitted from continuing positive passenger demand across much of the Group with strong revenue growth of 8.3% over 2023. Profit improvement initiatives across the Group, including Accelerate, remain on track with Adjusted Operating Profit increasing by 11.3% to £187.7m, with divisions at various stages of turnaround. \n   \n Statutory operating loss increased significantly to a £519.9m loss in FY24, compared to a £43.2m loss in the prior year; primarily driven by a goodwill impairment charge of North America School Bus; and an increased onerous contract provision in German Rail. \n   \n The Group is showing strong cash generation, with Free Cash Flow of £210.2m up 28.4% year on year (£163.7m in FY23), coupled with clear plans to reduce leverage further into FY25 with further cash generation initiatives. \n   \n Group adjusted net debt was stable on FY23, with covenant gearing improving to 2.8x (FY23: 3.0x). \n   \n   \n \n \n   \n Group Performance \n \n \n \n \n \n \n \n Year ended 31 December \n \n \n \n \n \n \n \n Adjusted result 1 \n 2024 \n£m \n \n \n Adjusting items \n 2024 \n £m \n \n \n Statutory total \n 2024 \n £m \n \n \n Adjusted result 1 \n 2023 \n£m \n \n \n Adjusting items 2 \n 2023 \n £m \n \n \n Statutory total 2 \n 2023 \n £m \n \n \n \n \n Revenue \n \n \n 3,412.4 \n \n \n - \n \n \n 3,412.4 \n \n \n 3,150.9 \n \n \n - \n \n \n 3,150.9 \n \n \n \n \n Operating costs \n \n \n (3,224.7) \n \n \n (707.6) \n \n \n (3,932.3) \n \n \n (2,982.3) \n \n \n (211.8) \n \n \n (3,194.1) \n \n \n \n \n Operating profit/(loss) \n \n \n 187.7 \n \n \n (707.6) \n \n \n (519.9) \n \n \n 168.6 \n \n \n (211.8) \n \n \n (43.2) \n \n \n \n \n Share of results from associates \n \n \n 3.2 \n \n \n - \n \n \n 3.2 \n \n \n (0.5) \n \n \n - \n \n \n (0.5) \n \n \n \n \n Net finance costs \n \n \n (89.8) \n \n \n (2.8) \n \n \n (92.6) \n \n \n (75.2) \n \n \n (1.2) \n \n \n (76.4) \n \n \n \n \n Profit/(loss) before tax \n \n \n 101.1 \n \n \n (710.4) \n \n \n (609.3) \n \n \n 92.9 \n \n \n (213.0) \n \n \n (120.1) \n \n \n \n \n Tax charge \n \n \n (41.4) \n \n \n (143.1) \n \n \n (184.5) \n \n \n (42.5) \n \n \n (21.6) \n \n \n (64.1) \n \n \n \n \n Profit/(loss) for the year \n \n \n 59.7 \n \n \n (853.5) \n \n \n (793.8) \n \n \n 50.4 \n \n \n (234.6) \n \n \n (184.2) \n \n \n \n \n   \n 1: To supplement IFRS reporting, we also present our results on an adjusted basis which shows the performance of the business before adjusting items, principally comprising amortisation of intangibles for acquired businesses, goodwill impairment, remeasurement of onerous contract provisions and restructuring costs. Treatment as an adjusting item provides users of the accounts with additional useful information to assess the year-on-year trading performance of the Group. Further explanation in relation to these measures, together with cross-references to reconciliations to statutory equivalents where relevant, can be found in the Alternative Performance Measures section below. \n 2: Restated for correction to the German Rail onerous contract provision, see note 1 in the Financial Statements for further information. \n   \n Group Revenue increased by £261.5m (8.3%) year-on-year to £3,412.4m (FY23: £3,150.9m). Overall, passenger growth in the key parts of the business that are exposed to passenger volume-related revenues continued to be strong; particularly in ALSA Long Haul, ALSA Urban Bus and UK Bus commercial; only partly offset by lower UK Coach passenger numbers. \n   \n Additionally, price increases have benefitted revenue with UK Bus increasing fares in July 2024 of 6% together with the annualization of the July 2023 price rise of 12.5%. \n   \n In North America School Bus, an average 7.5% price increase across School Bus contracts renewed for the 2023/24 school year was achieved and revenue has also benefitted from the early effects of a 6.1% price increase for the 2024/25 school year. \n   \n German Rail revenue has continued to be impacted by higher operational penalties as a result of train cancellations.  These are driven by continued worsening of industry-wide factors, including driver shortages and increased track maintenance and repair activities. \n   \n The business continues to grow both organically through contract wins as well as through acquisitions. There were 36 new contract wins secured in FY24 coupled with the Canary Bus acquisition in ALSA. \n   \n Overall, Group profitability has increased with Adjusted Operating Profit up £19.1m (11.3%) from £168.6m to £187.7m, despite several of the Group's divisions being in varying stages of recovery. Both the ALSA and North America divisions have performed well, with both revenue and profit up on prior year - Adjusted Operating Profit up 36.0% and 41.3% respectively (on a reported basis). This was partly offset by lower profitability in the UK and Germany. \n   \n Adjusted Operating Margin was 5.5% (FY23: 5.3%), with the increase on the prior year largely reflective of price increases as explained above, and the benefit of cost-reduction initiatives such as Accelerate. This has been partly offset by the impact of inflation on the cost base, particularly driver costs, and lower Covid-19 funding (down £26.0m on 2023) as explained below. \n   \n Covid-19 funding recognised within Adjusted Operating Profit for FY24 was £0.3m, down £26.0m on the prior year amount of £26.3m (which principally related to ALSA government compensation and the UK Bus Recovery Grant). \n   \n After £707.6m (FY23 restated: £211.8m) of adjusting items, described in further detail below, the statutory operating loss increased to £519.9m (FY23 restated: £43.2m loss). \n   \n Adjusted Net Finance Costs increased by £14.6m to £89.8m (FY23: £75.2m), as anticipated and in line with previous guidance, due to both the annualization of the €500m bond interest cost (which in September 2023 replaced a maturing bond that had a lower interest rate), and the impact of higher interest rates on the Group's floating rate debt. \n   \n The Group recorded an Adjusted Profit Before Tax of £101.1m (FY23: £92.9m), and the statutory loss before tax was £609.3m (FY23 restated: £120.1m loss). \n   \n The Adjusted tax charge was £41.4m (FY23: £42.5m). The Adjusted effective tax rate of 40.9% (FY23: 45.7%) continues to be significantly impacted by an interest disallowance in the UK due to the Corporate Interest Restriction rules (restricting interest deductions to 30% of Tax EBITDA) and higher interest rates. \n   \n The statutory tax charge was £184.5m (FY23 restated: £64.1m), with a tax charge on adjusting items of £143.1m (FY23 restated: £21.6m charge), consisting of a £39.7m tax credit (FY23: £nil) on the US School Bus goodwill impairment, a £9.8m credit (FY23: £10.4m credit) on amortisation of intangible assets, a £1.8m tax credit (FY23 restated: £53.2m credit) on tax deductible adjusting items, and a £194.4m charge (FY23 restated: £85.2m charge) on the derecognition of deferred tax assets in the UK and US which is also considered adjusting as it is material in size and non-recurring in nature. \n   \n The statutory loss for the period was £793.8m (FY23 restated: £184.2m loss). \n   \n Adjusting items \n Adjusting operating items of £707.6m (FY23 restated: £211.8m) were recorded as a net cost in the Income Statement, of which £99.2 million (FY23: £71.0m) represented cash outflows in the period.  These largely relate to goodwill impairment in School Bus recognising the need to reduce the  value of School Bus based on more realistic future cash flows. \n   \n \n \n \n \n Adjusting items \n \n \n Income statement \n 2024 \n£m \n \n \n Income statement \n 2023 1 \n£m \n \n \n Cash \n 2024 \n£m \n \n \n Cash \n 2023 \n£m \n \n \n \n \n Goodwill impairment of North America School Bus \n \n \n (547.7) \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Re-measurement of the Rhine-Ruhr onerous contract provision \n \n \n (86.4) \n \n \n (121.0) \n \n \n (45.7) \n \n \n (27.9) \n \n \n \n \n Restructuring and other costs \n \n \n (50.6) \n \n \n (30.1) \n \n \n (41.4) \n \n \n (26.2) \n \n \n \n \n Intangible amortisation for acquired businesses \n \n \n (27.7) \n \n \n (35.3) \n \n \n - \n \n \n - \n \n \n \n \n Re-measurements of onerous contracts and impairments resulting from the Covid-19 pandemic \n \n \n 4.1 \n \n \n (2.1) \n \n \n (1.4) \n \n \n (7.1) \n \n \n \n \n Re-measurement of onerous contract provision charges and impairments in respect of North America driver shortages \n \n \n 0.7 \n \n \n (12.0) \n \n \n (1.8) \n \n \n (9.8) \n \n \n \n \n Final re-measurement of the WeDriveU put liability \n \n \n - \n \n \n (2.4) \n \n \n - \n \n \n - \n \n \n \n \n Repayment of UK Coronavirus Job Retention Scheme grant ('Furlough') \n \n \n - \n \n \n (8.9) \n \n \n (8.9) \n \n \n - \n \n \n \n \n Total adjusting items before tax \n \n \n (707.6) \n \n \n (211.8) \n \n \n (99.2) \n \n \n (71.0) \n \n \n \n \n 1 Restated for correction to the German Rail onerous contract provision, see note 1 in the Financial Statements for further information. \n   \n Goodwill impairment reviews are carried out annually by comparing the carrying value of each cash generating unit ('CGU') with the net present value of its future cash flows. As a result of the most recent impairment review, a non-cash goodwill impairment charge in the School Bus CGU amounting to £547.7m (FY23: £nil) was identified. This results in a full impairment of the goodwill balance for this CGU. This arose as a result of reduced future cash flow generation in the forecasts used for the impairment assessment; as whilst the strategic plan forecasts prepared in 2024 include profit improvement actions that aim to improve the future financial performance of School Bus, these have not been included in the forecasts used for the goodwill impairment assessment as they cannot currently be objectively evidenced at this stage in the turnaround. The separation of the two North America businesses into two CGUs in the year was also a contributing factor to the resulting impairment charge as School Bus generates lower cash flows relative to its asset base, compared to WeDriveU. \n   \n In Germany, the Rhine-Ruhr (RRX) onerous contract provision, relating to Lots 1 and Lots 2/3, which run to 2033, has been re-measured based on the latest forecasts of future losses anticipated; resulting in a £86.4m charge (FY23 restated: £121.0m charge) to the income statement. Persisting levels of driver shortages (which have a consequent impact on contractual penalties suffered due to train cancellations), higher pay inflation, increased investment in driver recruitment and training, and central overhead costs, are the key contributing factors to the significant increase to the RRX onerous contract provision, as at 31 December 2024 compared to prior year. \n   \n Restructuring and other costs of £50.6m (FY23 £30.1m) comprise the impact of costs relating to the sale of the School Bus business and Group wide strategic initiatives and restructuring. Consistent with the prior year, these include Accelerate initiative projects which focus on organisational design, procurement and digital enablement.  These costs reduced on a run rate basis during the second half. \n   \n Non-cash intangible amortisation in respect of acquired businesses, reduced by £7.6m in the period. Consistent with previous periods, the Group classifies the non-cash amortisation for acquired intangibles as an adjusting item by virtue of its size and nature. This enables monitoring and comparison of divisional performance regardless of whether through acquisition or organic growth. Equally, it improves comparability of the Group's results with those of peer companies. \n   \n Amounts relating to re-measurement of the remaining onerous contracts and impairments, resulting from both the Covid-19 pandemic and North America driver shortages, were significantly reduced due to improvements in profitability of those onerous contracts with a total credit of £4.8m in the period (FY23: £14.1m charge). \n   \n The tax charge on adjusting items of £143.1m included a £194.4m charge in relation to derecognition of deferred tax assets in the UK and North America; arising from reduced future cash flow generation in the forecasts used, which were consistent with those used for goodwill impairment as described above. \n   \n   \n Segmental performance \n \n \n \n \n   \n \n \n Year ended 31 December \n \n \n \n \n   \n \n \n Adjusted Operating Profit/(Loss) \n2024 \n£m \n \n \n Adjusting items \n2024 \n£m \n \n \n Statutory \n total \n2024 \n£m \n \n \n Adjusted Operating \nProfit/(Loss) \n2023 \n£m \n \n \n Adjusting   items 1 \n2023 \n£m \n \n \n Statutory \ntotal 1 \n2023 \n £m \n \n \n \n \n ALSA \n \n \n 186.1 \n \n \n (9.2) \n \n \n 176.9 \n \n \n 136.8 \n \n \n (15.8) \n \n \n 121.0 \n \n \n \n \n North America \n \n \n 38.3 \n \n \n (569.9) \n \n \n (531.6) \n \n \n 27.1 \n \n \n (34.2) \n \n \n (7.1) \n \n \n \n \n UK \n \n \n 6.5 \n \n \n (18.7) \n \n \n (12.2) \n \n \n 23.5 \n \n \n (22.2) \n \n \n 1.3 \n \n \n \n \n German Rail \n \n \n (9.3) \n \n \n (87.5) \n \n \n (96.8) \n \n \n 0.2 \n \n \n (122.1) \n \n \n (121.9) \n \n \n \n \n Central Functions \n \n \n (33.9) \n \n \n (22.3) \n \n \n (56.2) \n \n \n (19.0) \n \n \n (17.5) \n \n \n (36.5) \n \n \n \n \n Operating profit/(loss) \n \n \n 187.7 \n \n \n (707.6) \n \n \n (519.9) \n \n \n 168.6 \n \n \n (211.8) \n \n \n (43.2) \n \n \n \n \n   \n 1 Restated for correction to the German Rail onerous contract provision, see note 1 in the Financial Statements for further information. \n \n \n \n \n ALSA's Adjusted Operating Profit has increased by £49.3m to £186.1m as a result of strong passenger demand with Spanish Long Haul performing particularly well.  There were high levels of occupancy and increased yields, benefitting from the continuation of the multi-voucher scheme. The Regional business has also seen continuing growth, boosted by increased mobility and network increases. The acquisition of Canary Bus completed successfully within the year, integration into the ALSA business is materially complete, and performance is in line with the acquisition business case. Adjusting items in ALSA related to both intangible amortisation for acquired businesses and re-measurements of onerous contracts, resulting from the Covid-19 pandemic. \n   \n North America Adjusted Operating Profit also increased by £11.2m to £38.3m, benefiting from a 7.5% average price increase across School Bus contracts renewed for the 2023/24 school year and the early effects of a 6.1% price increase for the 2024/25 school year, which will then annualise into FY25. \n   \n WeDriveU has delivered strong new order wins in FY24 and has materially completed its separation from the School Bus business to operate independently. The segment result is impacted by a goodwill impairment charge, as set out in the Adjusting items section below, and costs related to the prospective sale of the School Bus business. \n   \n In the UK, Adjusted Operating Profit reduced by £17.0m to £6.5m, driven by a reduction in funding from Covid-19 Bus Recovery Grant and Bus Service Improvement Plan (BSIP) of £8.7m and £4.3m respectively, coupled with increased scheduled coach hire costs, a reduction in Core Coach passenger numbers, fewer high-margin rail strikes, and lower ancillary income. This was only partly offset by an increase in demand for services and the benefit of price rises in UK Bus, with commercial passenger numbers up year on year and a price increase from July 2024 of 6% being implemented. The UK continues to progress its turnaround and restructure its operations. Adjusting items are reduced by £3.5m on FY23 and principally reflect restructuring costs. \n   \n German Rail Adjusted Operating Loss of (£9.3m), is down £9.5m on prior year. The RRX contracts contributed £nil to Adjusted Operating Profit as they are covered by the remeasurement of the onerous contract provision; with the Adjusted Operating Loss pertaining fully to the RME contract. The increased loss versus the prior year is principally due to labour and overhead inflation and higher penalties which have resulted from industry-wide driver shortages causing an increase in train cancellations. The segment result was impacted by a £86.4m charge relating to the increase in the onerous contract provision, reflecting the latest view of profitability of the RRX contracts over the remaining contract life to 2033. \n   \n Central Functions costs included incremental restructuring, legal and bonus costs of £14.0m (FY23: £nil) related to (i) improved performance of the Group resulting in higher costs of performance linked remuneration benefits, (ii) commission payable on completion of a property transaction in the year, and (iii) the costs incurred in the current year relating to the close out of the FY23 year end process. The remainder of the year on year increase (£0.9m) was reflective of pay inflation and targeted investments in critical Group functions. The segment result is also impacted by the costs relating to the sale of the School Bus business and other restructuring costs.  \n   \n   \n Treasury & cash management \n   \n \n \n \n \n Funds flow \n \n \n 2024 \n £m \n \n \n 2023 \n £m \n \n \n \n \n Adjusted Operating Profit \n \n \n 187.7 \n \n \n 168.6 \n \n \n \n \n Depreciation and other non-cash items \n \n \n 238.5 \n \n \n 217.4 \n \n \n \n \n Adjusted EBITDA* \n \n \n 426.2 \n \n \n 386.0 \n \n \n \n \n Net maintenance capital expenditure* \n \n \n (157.8) \n \n \n (135.7) \n \n \n \n \n Working capital movement \n \n \n 48.0 \n \n \n 9.1 \n \n \n \n \n Pension contributions above normal charge \n \n \n (7.6) \n \n \n (7.5) \n \n \n \n \n Operating cash flow \n \n \n 308.8 \n \n \n 251.9 \n \n \n \n \n Net interest paid \n \n \n (83.6) \n \n \n (61.0) \n \n \n \n \n Tax paid \n \n \n (15.0) \n \n \n (27.2) \n \n \n \n \n Free cash flow \n \n \n 210.2 \n \n \n 163.7 \n \n \n \n \n Growth capital expenditure* \n \n \n (59.3) \n \n \n (17.9) \n \n \n \n \n Acquisitions (net of cash acquired/disposed) \n \n \n (57.9) \n \n \n (59.6) \n \n \n \n \n Adjusting items \n \n \n (99.2) \n \n \n (71.0) \n \n \n \n \n Payment on hybrid instrument \n \n \n (21.3) \n \n \n (21.3) \n \n \n \n \n Dividend \n \n \n - \n \n \n (41.1) \n \n \n \n \n Other, including foreign exchange \n \n \n 26.7 \n \n \n 53.4 \n \n \n \n \n Net funds flow \n \n \n (0.8) \n \n \n 6.2 \n \n \n \n \n Adjusted net debt* \n \n \n (1,202.5) \n \n \n (1,201.7) \n \n \n \n \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n * Adjusted EBITDA, Adjusted net debt, net maintenance capital expenditure and growth capital expenditure are defined in the glossary of Alternative Performance Measures. \n   \n The Group generated Adjusted EBITDA of £426.2m in the period, (FY23: £386.0m) is driven by the improvement in Adjusted Operating Profit as explained above. \n   \n £157.8m of maintenance capital expenditure is principally related to asset purchases in North America and ALSA and is £22.1m higher than FY23 as the Group accelerated capital expenditure at the end of December 2022 in order to secure production slots, resulting in a lower cash outflow in FY23. \n   \n Working capital benefitted from strong cash collections in FY24 resulting in an inflow of £48.0m, compared to an inflow of £9.1m in the previous year. \n   \n Net interest paid increased by £22.6m reflecting the first €500m bond interest payment (which in September 2023 replaced a maturing bond that had a lower interest rate), and the impact of higher interest rates on the Group's floating rate debt and RCF facility. \n   \n Tax paid of £15.0m (FY23: £27.2m) was reduced by a tax refund in ALSA relating to historical tax losses, which was a receivable on the balance sheet at the end of FY23. \n   \n Free cash inflow is £210.2m in the period (FY23: £163.7m), representing strong free cash flow conversion and a significant increase of 28.4% on the prior year. \n   \n Growth capital expenditure of £59.3m has increased by £41.4m (FY23: £17.9m outflow) reflective of (a) increased investments as a result of growth contract wins in North America; (b) the timing of fleet purchases in ALSA; and (c) the prior year outflow of £17.9m benefitting from being net of a £12.0m funding receipt from the local authority relating to the new Casablanca fleet; which lowered growth capital expenditure in the prior year. \n   \n Acquisitions cash outflow of £57.9m (FY23: £59.6m) relate primarily to the acquisition of CanaryBus in ALSA, a leading provider of tourist and discretionary services in the Canary Islands, as well as deferred consideration paid for previous acquisitions. The prior year reflects multiple smaller acquisitions in ALSA. \n   \n A cash outflow of £99.2m was recorded in respect of the items excluded from adjusted results as explained above. £21.3m of coupon payments on the hybrid instrument were made in the period, in line with prior periods. No final FY23 dividend nor an interim FY24 dividend have been declared, therefore no external dividend has been paid in FY24; the prior year included a dividend payment of £41.1m. Other inflows of £26.7m reflect the movement in exchange rates, principally on the Group's Euro denominated debt, and settlement of foreign exchange derivatives. \n   \n Net funds outflow for the period of £0.8m (FY23: £6.2m inflow) resulted in adjusted net debt of £1,202.5m (FY23: £1,201.7m). \n   \n See the Supporting Reconciliations section below for a reconciliation to the statutory cash flow statement. \n   \n The Group maintains a disciplined approach to its financing and is currently rated by Moody's and Fitch at (Ba2/Stable) and (BBB-/Stable) respectively. \n   \n The Group has two key bank covenant tests; a <3.5x test for gearing and a >3.5x test for interest cover. At 31 December 2024, covenant gearing was 2.8x (FY23: 3.0x) and interest cover was 4.6x (FY23: 5.2x). \n   \n At 31 December 2024, the Group had utilised c.£1.2 billion of debt capital and committed facilities, with an average maturity of 4.9 years. The Group's RCFs were undrawn and the Group had available a total of £0.8 billion in cash and undrawn committed facilities. The table below sets out the composition of these facilities. \n   \n \n \n \n \n Funding facilities \n \n \n Facility \n   \n £m \n \n \n Utilised at 31 December 2024 \n £m \n \n \n Headroom at 31 December 2024 \n £m \n \n \n Maturity year \n \n \n \n \n Core RCFs* \n \n \n 600 \n \n \n - \n \n \n 600 \n \n \n 2028-2029* \n \n \n \n \n 2028 bond \n \n \n 250 \n \n \n 250 \n \n \n - \n \n \n 2028 \n \n \n \n \n 2031 bond \n \n \n 414 \n \n \n 414 \n \n \n - \n \n \n 2031 \n \n \n \n \n Private placement \n \n \n 396 \n \n \n 396 \n \n \n - \n \n \n 2027-2032 \n \n \n \n \n Divisional bank loans \n \n \n 101 \n \n \n 101 \n \n \n - \n \n \n various \n \n \n \n \n Leases \n \n \n 194 \n \n \n 194 \n \n \n - \n \n \n various \n \n \n \n \n Funding facilities excluding cash \n \n \n 1,955 \n \n \n 1,355 \n \n \n 600 \n \n \n \n \n \n \n \n Net cash and cash equivalents \n \n \n \n \n \n (203) \n \n \n 203 \n \n \n \n \n \n \n \n Total \n \n \n \n \n \n 1,152 \n \n \n 803 \n \n \n   \n \n \n \n \n   \n * During the year the Group extended the vast majority of its Core RCF facility a further year from the original expiry in 2028. £571m of the facility will now mature in 2029 with £29m maturing in 2028. The Group has a further one year extension option available later in 2025 to further extend the maturity to 2030. \n   \n To ensure sufficient availability of liquidity, the Board requires the Group to maintain a minimum of £300 million in cash and undrawn committed facilities at all times. This does not include factoring facilities which allow the without-recourse sale of receivables. These arrangements provide the Group with more economic alternatives to early payment discounts for the management of working capital, and as such are not included in (or required for) liquidity forecasts. \n   \n At 31 December 2024, the Group had foreign currency debt and swaps held as net investment hedges. These help mitigate volatility in the foreign currency translation of our overseas net assets. The Group also hedges its exposure to interest rate movements, to maintain an appropriate balance between fixed and floating interest rates on borrowings. At 31 December 2024, the proportion of Group debt at floating rates was 21% (FY23: 21%). \n   \n The Group hedges its exposure to fuel prices in order to provide a level of certainty of cost in the short term and to reduce the year-on-year impact of price fluctuations over the medium term. Fuel cost represents approximately 8% of revenue (FY23: 9%). At 31 December 2024, the Group is around 98% hedged for 2025 at an average price of 51.8p per litre; around 52% hedged for 2026 at an average price of 47.0 per litre; and around 13% hedged for 2027 at an average price of 44.6p per litre. This compares to an average hedged price in 2023 and 2024 of 48.5p and 51.6p per litre respectively. \n   \n Return on capital employed \n The return on capital employed at the end of the period was 10.2% (FY23: 7.0%).  Demonstrating the conversion from pipeline of more profitable contracts versus capital invested. \n   \n Dividend \n A final dividend has not been proposed for the current period (FY23: £nil). \n   \n Pensions \n The Group's principal defined benefit pension scheme is in the UK. The combined deficit under IAS 19 on 31 December 2024 was £11.5m (FY23: £32.6m), with the IAS 19 deficit for the Group main's scheme, West Midlands Bus being £11.3m (FY23: £30.0m), a decrease of £18.7m on the prior year, mostly driven by an increase in the discount rate. \n   \n Going concern \n The Financial Statements have been prepared on a going concern basis as the Directors are satisfied that the Group has adequate resources to continue in operational existence for a period of not less than 12 months from the date of approval of the financial statements. Details of the Board's assessment of the Group's 'base case', 'reasonable worse case', and 'reverse stress tests' are detailed in note 1 of the Financial Statements. \n   \n Principal risks and uncertainties \n...

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