Mobico Group Plc

Good morning, everyone. Welcome to our 12-month unaudited results presentation. As you know, I'm Phil White. I'm executive chair of Mobico. Introducing to my colleagues, we've got Brian Egan, who is our CFO, and Paco, who is our COO. You've met all three of us before at our half-year results. And you can remember at that time, we weren't really in the best of places. and at that time you will recall that only one of our five divisions of ZEN was really making any real money. Today we're here to talk to you about the stability we've brought to the business as well as the momentum being gradually built up as we implement our Simplify for Success programme. An apology first, I'm sorry that the results we are presenting today are unaudited but as you know We were left without an auditor late in the day last year, but I'm really pleased to say that we now have KPMG on board. That's a big win, believe it or not, getting an auditor. I know I'll probably be cancelled by our advisors for saying this, but please forgive me. I will only use the word unaudited once. because I could use it in every sentence as we go along so and I think the same applies to the word adjusted so forgive me on that because I don't want to be here all day and I'm sure you don't want to be here all day too the reporting schedule again for this year is quite complex and we'll spend most of 2026 would you believe in close periods but Brian will explain the schedule in more detail As is usual, I'll start with the highlights. Brian will follow on the finance review, and then Paco will do all the operational stuff. But let's start with the highlights first, guys. As you can see, we've delivered significant progress in 2025. Revenue increased by 6% to $2.8 billion, while adjusted operating profit increased by 9% to nearly $200 million. Operationally, we achieved nearly 25 billion passenger Ks and secured no contracts worth over a billion. Our German rail business provided a full service in December, would you believe, for the first time in two years. And importantly, as you've seen, we've reached an agreement with the five German PTAs in North Rhine-Westphalia on the restructuring of all our rail contracts. This de-risks the business and ensures that our rail operations are sustainable in the long term. All of this has been achieved while making solid progress on safety across the whole business. Something as you know is absolutely integral to the way we operate. In business we all know that not all contracts are perfect and we've inherited a few difficult ones. But in business you also have to deal with the unexpected. when this happens i always believe it's better to be totally transparent and to be very open too open some people will say but that's my style in 2025 as you know we experience some issues with certain contracts and we fully recognize this in the year whilst at the same time demonstrating the strength of our underlying business honestly we would prefer the scale of the adjusted items to be much smaller and that certainly is our ambition going forward. Before we dive into the numbers I just want to remind you of our strategy that we announced at our H1 results for 25. Our roadmap is unchanged and we remain focused on stripping away complexity to reveal the high performing businesses that we know are there. While continuing to cut through the noise It means really streamlining our management structure and aggressively attacking overheads. We are removing what I call the corporate glue, the scourge of large and listed companies, the duplication of functions and processes, going through procedures, waiting for yes and no's. It takes a hell of amount of time to do this and slows us down in the past. By being smarter and integrating our operation where it makes sense, we are becoming a leaner, faster and more effective organisation. Our financial health is absolutely paramount. We are very focused on generating cash, improving liquidity and reducing debt. Every pound of capex is now being scrutinised to ensure maximum value and we are leveraging ALSA's operational excellence to unlock synergies group-wide. Through simplifying and strengthening we are putting the business back on the path to success just like where we used to be. The financial impact of actions across the group are already visible with operating profit of 192 performance of 138 million and I'm pleased to say that in H2 all our divisions were profitable. In Germany we've taken the necessary steps to make our rail business sustainable for the long term by eliminating the significant cash flows over the remaining life of the contracts. Once the agreement is formally signed we'll be able to provide you guys with a more detailed breakdown of the figures. Until then I would ask you to please bear with us in respect to the amount of detail we can give you today. We're aggressively reducing costs with some savings delivered in 25 and we're announcing today that we will deliver 75 million of cost savings in 26 with an annual run rate of 100 million by the end of the year. We have largely integrated UK coaching to ALSA to create a more robust business, one that will meet the challenges of increased competition. We have also completed our exit of loss-making businesses in NXTS, in our coach division, and the loss-making Carter contract in We Drive You. Despite the progress to date, we do recognise the challenges ahead. Our priorities for 26 are very clear. As I said, our strategy is indeed simple. Simplify, strengthen and succeed. Whilst our operational story today is one of transition, this should not take away the fact that ALSA has delivered another record year. This was driven by growth in Spain and further revenue diversification. In Morocco we have faced and resolved several challenges and this has led us to a reduced operating footprint in the country. We Drive You completed its first year as a standalone entity. and we are applying lessons learned there to improve operational and financial performance. We exited early the loss-making Carter contract at the start of this year, 26. This contract had lost over $303 million in 2025. You'll see from our R&S that we've provisioned $52 million for Womata, We aren't waiting for a miracle there. As I said, we want to be open and transparent. We are pursuing legal redress with our clients, but we are ensuring this no longer distracts from our profitable core business. In the UK, the integration of UK coaching to ALSA is now largely complete, with operation and functional benefits starting to be seen from the start of this year. And in BUS, Preparations continue for franchising. In Germany, as mentioned previously, we are now operating at full service. This result was achieved through our investment in driver training and increased recruitment. Sounds pretty easy really, it's pretty obvious anyway. Across the group we have maintained strong momentum securing 25 new contracts with a total value of £450 million whilst maintaining a disciplined conversion rate of 28% on new deals compared to 23% last year. It's really worth noting that these contracts exclude non-consolidated stuff like joint ventures and joint operations. Most notably the project of Imkidia in South Arabia and the Guadalajara health bid would bring the total value of new contracts secured in 25 to in excess of £1 billion. We also expect to be awarded two key contracts in Spain shortly. These include a retention of one of ALSA's largest lead regional contracts and the expansion of our business in Ibiza where we'll become the largest operator in the island. A key highlight is the ongoing growth in ALSA passenger volumes, which increased a new milestone of 640 million passengers. This was largely driven by a growth of 10% in Spanish domestic demand, mainly at regional and urban results. As you can see from the charts, we are witnessing consistent upward growth in passenger numbers across Spain. This isn't merely a seasonal trend, it's a fundamental shift towards public transport and one that is being supported and driven by the Spanish government across the whole country. We do expect this momentum to continue in 2026 as a Spanish single ticket which offers unlimited travel for a flat monthly rate becomes embedded in consumer behaviour. I will now hand over to Brian who will take me through the numbers in more detail.

Okay, thank you very much, Phil, for that. Good morning, everyone. Before going into the 2025 figures, I want to mention the 2024 numbers have been restated for a 0.8 of a million EBIT impact in Germany. They also reflect the discontinued operations of NASB and XNXTS. This ensures a clean and like-for-like comparison for the performance we are discussing today. Revenue of 2.8 billion represents a 6.2% increase from 2024, driven primarily by ALSA's strong growth at 12.8%, and ALSA has now reached 1.5 billion in revenue, reflecting the continued diversification in addition to a great performance in both regional and urban. We've also enjoyed good revenue growth in We Drive You of 4.7% from new contracts, wins both in shuttle and in transit business. Revenue growth helped deliver a 9.3% increase in operating profit, noting second half performance was significantly better at $138 million versus $60 million in the first half. It also, if you look on the very right hand side, shows the improvement in performance this year versus the same period for last year. This reflects the improved underlying operation performance and the benefit of cost savings arising from the restructuring and efficiency improvements that we've been making. Free cash flow was 77.3 million. This was lower than last year, but that was mainly caused by cash outflows related to the school bus business, which were made prior to its sale in July, so in the first half of the year. Coven gearing improved by 0.1%. from the end of 2024. And again, this has been helped by the process from the school bus sale. In terms of statutory results, operating profit from continuing operations decreased from 12 to 21.9. To understand the bridge between our adjusted statutory operating profits, there are several non-operating charges that I'll walk you through. There were no charges to the German rail owners contract provisions in the period. However, we did utilize 56 million in the provision during the year, leaving the remaining provision at 133 million. This provision will be reviewed in detail for the 15-month audited results, so it's reviewed in detail once a year. Moving to eDriveU, we have made a 52 million onerous contract provision in respect of the WMATA contract. We are seeking legal redress, which Phil has mentioned, in order to recover ongoing losses. We expect the outcome of these legal proceedings to be successful and the contract losses significantly reduced. However, the benefit of this legal settlement is not included in the provision calculation. We are confident of a favourable outcome. However, the process is expected to take 18 to 24 months. It's a long process. In the year, the utilisation of the provision was just over £4 million. It's worth also taking a moment to say that we have learned from the WMATA contract. We have overhauled our North American bidding process to include vigorous review procedures. A £38.5 million charge has been recognised in the income statement for retained legal liabilities tied to the open insurance claims from the NASB sale, the school bus sale. The charge stems largely from material adverse developments in more significant individual cases. The year-end cash impact from settled claims was just under £19 million. In Morocco, following a rapid change in local operating environment, we have taken a £27 million charge. This reflects a combination of price concessions we made in Casablanca which enabled outstanding debts to be settled. and also a non-cash impairment charge following the abrupt transfer of Marrakech and Tangier contracts in December. To put this adjustment in perspective, on an adjusted basis, Morocco contributed an operating profit of €8 million compared to €130 million in 2024. Amortization of intangibles with acquired businesses from continuing operations increased by 2.8 million during the period. This represents the annual charge for intangibles such as acquired brands and customer contracts. This happens every year. Finally, as part of our strategic initiatives to stabilise and improve the group's performance, we invested 35 million on restructuring and streamlining costs and also some transaction fees related to the school bus disposal. The year-end cash impact for restructuring was 29.8 million. Overall, there was a cash outflow due to adjusting items in the period. This figure includes adjusting items for discontinued operations. So now turning to our balance sheet, which is the bottom of the slide, we currently have 133 million remaining on the German OCP. We will re-evaluate the provision for our 15-month orders results, as will be dependent upon the finalisation of the legally binding agreements with the PTAs, which are due to be signed before the 30th of June. Of the 47 remaining provisions for We Drive You, we expect to utilise 8 million in 2026. And again, as I mentioned, this is still subject to the legal process. Moving to our divisional breakdown, ALSA was our most significant growth driver, with revenue increasing by just under 13% to reach the 1.5 billion mark, and operating profit increased by 14% to 112 million. As I've already mentioned, underpinning these numbers is strong underlying demand in Spain. Both regional and long-distance sectors are performing well, supported by a better expected trading environment, particularly towards the end of the year. In We Drive You, revenue increased by just under 5% to $432 million, driven by new contract wins, and as again, as I mentioned, both in shuttle and in transit businesses. However, the full-year profit remained below 2024 levels due to challenges with WMATA contract and the car contract, which has now been exited, which Phil mentioned in his presentation. We saw a meaningful change in the second half of the WMATA performance. which we drive you improving to a £17.6 million profit in H2. This recovery is expected to continue in 2026. On the other hand, the UK business continues to face a very challenging environment, but has shown great resilience with revenue decreasing only 4.6% to £587 million despite intense competition in the coach business. Breaking this down, UK Coach contributed 350 million revenue, while UK Bus delivered 272 million. Given the separation of the UK Coach as it has moved under ALSA, a profit split isn't available in these financial results. However, a breakdown will be provided in the full 15-month results ending 31 March. With ongoing competition in key routes, it has been a very difficult year for UK coach, with revenues declining by 6.2%. However, passenger numbers only fell by 3.8%. And on a positive note, the market appears to be growing and growing quite strongly. In UK bus, revenues rose by 2.4%, and this is largely due to the fare increases that we implemented towards the end of June. The decline in passenger numbers reflects the wider problem right across the industry in the UK. During the period, we also sold Acox Green Depot and Oak Road. This resulted in a $4.3 million increase in the adjusted operation profit for the 12 months. Overall, the UK reported a $4.6 million operating cost, as I said, largely due to the competitive pressures in the UK coach, also combined with a rise in employer national insurance costs. We expect to see this performance improve as we move into 2026 along with the benefits of integration into ALSA. In Germany, revenue decreased by 1.6 to 2.53 million and whilst the RME adjusted operating profit increased to 15.6 million due to improved operational performance and this actually was very significant. We recovered from the loss to a profit making position. the in-year losses on the ORX contract were 56 million. And this is a cash outflow, which this is the significance of the German contracts that were in the process of finalizing. Central function costs increased by 2.3 million, principally due to higher cost-related professional services and including a higher audit fee. However, this sort of hides the underlying cost savings that have been made during the year. Looking for 2026, We expect ALSA to maintain current levels of performance. For We Drive You, we expect continued underlying recovery, whilst we continue to redress WOMATA through the legal process. By integrating UK coach into ALSA, the business is becoming more competitive. Nevertheless, we expect 2006 to be a challenging year. UK bus is expected to be at break-even, subject to financial funding discussions with Transport for West Midlands. And in Germany, our rail business is benefiting from operational improvements and will be de-risked once we have the PTA agreement signed by the 30th of June. By the way, it's important to mention that the revised contracts will be backdated and effective from the 1st of January 2026. In respect of central functions, we expect further cost reductions. Moving to our cash flow performance for the period, the most important point to highlight is the impact of school bus, which is shown in the middle column. In 2025, school bus was a significant drag on group liquidity prior to its disposal. The school bus cash outflow was driven by substantial investment in CAPEX and working capital requirements that were committed in 2024. Excluding school bus, the group free cash flow was 76 million. Key year-on-year movements include a working capital net inflow due to the timing of cash collections in ALSA. The increase in taxes due to a one-off refund because of the change in tax law. which significantly reduced our cash tax payments in 2024. And we have an ongoing project to look at managing our tax burden. As one of the problems we have is that our debt is sitting in the UK, most of our profits are in Spain, and therefore we don't have an offset for interest. We are targeting a total CAPEX of 120 million for 2026. This reflects our commitment to discipline spending, maximizing cash conversion as we move forward. And Phil has mentioned this in his presentation, and Phil or Paco is also going to mention it. There is very, very strict CAPEX control now in the organization. However, despite the strong CAPEX control, we are able to pursue new growth opportunities, focusing on CAPEX light contracts. In terms of net debt, we saw a £286 million inflow reflecting the cash proceeds from the school bus disposal. We recorded a cash outflow of £180 million related to items excluded from our adjusted results and I talked through these earlier in the presentation. It should be noted that we have paid the highbrow coupon for 2025, which is the last payment at £21 million. The next payment due is £40 million, which is in February 2027. There was a 9.6 million outflow from other items, primarily driven by exchange movements and derivative settlements. This is partly offset by the sale of an investment. When we pull all of this together, the group achieved net total net funds inflow of 127 million for the period. The funds inflow has offset the loss of school bus EBITDA, resulting in a covenant gearing improving to 2.7 million. I should mention that the covenant gearing for the 15 months would be dependent on a number of factors, including the German rail agreement, which has quite complicated accounting implications. However, we can confirm that we will be within the covenant requirement. In terms of debt maturity, at the 31st of December 2025, the RCFs were all undrawn, and we had nearly $900 million in total between cash and undrawn committed facilities available to us. The majority of our RCF will only expire in 2029. Notably, the interest rates on our instruments are relatively attractive, and we have significantly reduced our exposure to interest rate volatility with over 90% of our debt now at fixed rates, in fact, 94%. We have sufficient liquidity to meet our debt maturities arising in 2027. And then finally, just to talk through... almost finally. I want to briefly walk through our financial calendar for 2026. As you may have noted, we have adjusted our 2025 and 2026 accounting periods following the appointment of KPMG as our new auditor, which took place in November. These changes are designed to provide KPMG with sufficient time to complete their audit work. However, we do plan to return to a December 31st year end in 2026. Our current financial year will be for a period of 15 months. to the 31st of March 2026 and we expect to release our audit results in late June, early July. Looking into the second half, we will report six month interim results for the period ending September 30th and expect to release those in late November. And finally, to bring us back into alignment with the standard calendar year, the final accounting period for 2026 will be a shortened nine-month period ending the 31st of December 26. Results for the period are expected to be released in March of 2027, making a return to a normal 12-month December year-end. In terms of financial imperatives, the focus remains on ensuring our strong top-line growth translates to sustainable value creation. As such, we've implemented a disciplined approach to cost control. Specifically, we are implementing controls over capital expenditure and working capital to maximise cash generation and reduce debt. As Phil mentioned, the mission is simply to succeed, to simplify to succeed. Behind this, we have our Simplify for Success cost programme, which is currently targeting 75 million of cost savings in 2026, with a run rate of 100 million from the end of 2026. We are targeting an adjusted operating profit of 195 to 210 million in 2026. I note, and this is quite important, that this does not include the positive impact of the revised contract changes from the German rail businesses. Once these agreements become legally binding, which we expect will happen by 30th of June of this year, we will update our guidance. In summary, ALSA remains an engine of growth, We Drive You is on a recovery path and our UK and German businesses are leaner and more resilient. With 75 million in targeted savings and an operating profit guidance of 195 million to 210 and positive net cash in 2026. I will now hand over to Paco who will go through the operation review.

Hello, good morning. Thank you Brian, thank you Phil. Thank you all of you for being here. For me, it's the first time I'm in the floor, and it's an honor to share some words with you. Just to ask, as you have noticed, I'm Spanish, but what you probably don't know is that I'm from the south of Spain, and that means that my accent is a little bit poor, so apologies for that, but I hope you can understand me better. I'll try to give you more view on the operational side after all the numbers that Brian and the strategy from Phil. I would like to say something a little bit different. Well, this is ALSA and you know that I know ALSA a little bit. I've been working for ALSA for 34 years and I'm very proud of the last 10 years as CEO. But I would like to explain what is behind the figures of ALSA and I think it's important to know what's the portfolio of the business that ALSA maintains at the moment. You probably know that Long Haul is like a jewel of the crowd. Long Haul is 17% of the company. We are growing more at the moment. We are growing a lot internationally. That was almost zero five years ago, because Morocco is there. And also in the diversification area that we are also improving and the largest part of the company right now is the regional one that is also under a concession, under franchises process. But if you see the figures, we have managed to keep growing in two digits in terms of revenue and also in terms of profit. And the margin, to be honest, is unbelievable. I think to achieve 14 percent margin is challenging for the future. But I would like to convey that it's been a record year for ALSA, but not only in terms of revenue or profit or margin, but also number of passengers, customer satisfaction index, safety target, digital sales. So it's a mix, a combination of all the factors that we are working into to get the strategy and the numbers done. And a couple of points regarding the environment that also, especially in Spain, are now involved. One is very important, there is no direct impact in the figures, that is the approval of the mobility law in Spain. Just for you to know that the former mobility law took place in, if I'm not wrong, 87. So that means that it's a new law after 40 years. And why is it important that? this mobility is now a right for the citizens in Spain. It's not only a word, it's something that is like a new pillar of the well-being of the society in Spain, as the healthy or the pensions, we have also now mobility on the top of the priorities of the government, and this is It's very important. And also this new law secures the system of franchising and concession for long haul in Spain. I think it's very important. It's something that has been very controversial in the past regarding if it's going to be deregulated or liberalized. Now with the new law it's secure. And the other point is the strong support from the government, from this government to the public transport, not only by the law, but also for the... It's not subsidy, because it's not subsidy to the companies, it's to reduce price for the passengers to use more public transport. And I think it's the current government that has put on the table million of euros to support all kind of transport, rail, coach, buses and the rest. So I think it's important you to know. And my view on 26 is very positive and the first two months I cannot show you the figures but the starting of the year 26 is performing very well. Let me give you an example of growth. This is Kyrgyzstan, the Saudi city. How can we grow in that contract? It's a 500 million euro contract in HDR plus potential extension of Tumor. And it fits exactly with the strategy of ALSA, which is asset light, is low risk, and is a project that is absolutely scalable, because this is the first megaproject that the Saudi government is building in the country. But the plan is to have ten projects. 10 projects like Kyria in the next year. So we have been awarded in the first one, so we are well positioned for the rest of the tendering process that will take place. And it's also remarkable that we have won this contract competing in what I call the champion league. Because we were competing there with the French state-owned company, the Italian one, the Singaporean one. Well, the top of the top of the company. And ALSA, the size of ALSA is not that high as you can imagine, as some of our competitors. And we won the contract through technology and through innovation. For example, you cannot see very well, but this... One of the strong points in our offer is to build what we call the station for the future. That is a new concept of how people are going to move in the country. And I think it's key that it's not a question of price, not only price, it's a question of technology, where we are the technical support for the government as well. If we move to We Drive You, as Brian mentioned, I think despite the total figures, the figures from H2 has been very, very positive. We have managed to change the trend that we had in the past. You know that from H1 we have the separation process with the school bus. It has some cost. And now we are focused on, once the separation has been made, we are focused on the strategy of cost and also to improve operation and to have better margins on that. So, and also as Brian and Phil mentioned, One of the main points is to get rid of the loss-making contract. We don't have much. We manage in the States almost 100 contracts. There are three, four of them that are negative. We are in the process of avoiding all this risk for the future because that will make directly an improvement in the final figures. Also, to say that in the States, where I passed a lot of times in the last year, there is a lot of room for improvement. Our market share in the States is very, very little. For example, one of our competitors has ten times the size of We Drive You. That means we have a lot of And we are now entering some new areas of the industry, like universities, where I see very interesting through technology and through good performance. And I'm quite happy about the future as well in 2026. If we go to UK, I think we cannot share the figures from bus and coach, but I can give you some light on that. On the bus, there is a slight increase in revenue, but it's true that the passengers are going down, not that much, but this I think is in the same trend that all the urban industry in UK are doing, are suffering right now. But I think the positive news is we have managed with the authority to secure the fundings in order to have at least, I would say, a break-even in 25, of course in 26, Also very important in the coach that I would define the integration UK coach and ALSA is a completely success. Now here I can see Javier who is in charge of UK coaching in Birmingham and we are in just less than six months we have changed a lot of things and again if we go to the numbers the decline on passengers in long haul has been less than 4%. But if you consider that our competitor, our main competitor in long haul has doubled the size of the flights and the routes that they are operating, our less passenger is very, very little. and we still have the majority market share in long haul by far to our competitor and we have also a very clear strategy on focusing on a specific route with the new pricing tool on technology that we have completely changed a new structure that we have put in place leaner more close to the ground to have to know the problems And to have several areas depending on the different products that Javier is running there. For example, we have a clear vision that we need to grow in airports, that we are in the overall figures, we are growing a lot. And of course we are tackling with massive savings with no impact on safety, not impact at all in the operational excellence. And also very optimistic regarding 26 that we can manage to reverse the situation that we had. Finally, Germany, I think it's several milestones. For the first time, we are running 100% of the services after years. And what is even more important, we have achieved the number of drivers that we need. that you know that we have a shortfall in drivers in the last year that made us some penalties with the PTA. Now we have all the drivers and what is more important, we have all the drivers with a lower cost because you know that part of the drivers that we were using in the past came from third parties, from agencies. and with a higher cost. Now we are running all the operation with our own drivers. And for 26 I think it's very important because it's the year, not only because of the agreement with the PTA that they are doing extremely well, but also because they are going to start the new process of bidding there. So I think we are now in a very good position after the agreement with the drivers, with good KPIs in operation to try to keep growing in that market that I see also very interesting for the future. And this is my final slide. I would like to say that this is after one year working throughout the group, five things that I have identified that we are working in the same page. These are facts. This is not only narrative. There is fact behind all these statements. First, all the divisions are performing better than last year, these numbers. Second, we have huge opportunities all around the world. I mentioned Saudi, I mentioned states, but we have some other opportunities in some other places. The massive cost reduction that we are implementing all around the divisions, including ALSA, but also the rest of the countries. So we are going to work in the future, in the present, we are right now working in the present with a leaner and more efficiency base of cost. So that gives us the opportunity to be more profitable. with the next point that we are improving the marking of every single contract. We are avoiding totally loss making contracts. This is a process that we are going to finish in the next month and we are trying to get a little bit more of every single contract to gain 1% in every single quarter, you can imagine that it has a huge impact on profit. And finally, probably this is not a fact, but it's not a number behind the term, I've been working, as I said, with National Express in the past for the last 20 years. And for the first time, and thanks to these guys, we are working as a group. Now it's not there are four CEOs or vice president or whatever. We have the same protocols. We have the same rules. capex view we have the same procedure for safety we have everything so I think it's very important in order to get synergies from one part of the world to another for example UK coach we are using the pricing technology of ALSA, but we have also exported some from the States in terms of shuttle to the business of transit, the business that we have started in Spain, for example. That's all. I would like to end thinking of you. Any question after feels the conclusion. But I want to convey that we as a team are strong. We are excited with the present and the future. And my fellow, very, very optimistic with 26. We will see you in the next month again for new presentations. You can check if I was right or wrong. I hope I was right. Thank you.

Just to conclude Special thanks to my buddies over here, Paco and Brian. Let me say, Paco, you have no need at all to apologise for your English. People can probably understand... I'm not mentioning you.

I wouldn't use it.

But, you know, Paco, your accent from the south of Spain is much easier for people to understand than my accent from the north of England. Well done, that was a great presentation. Thank you. Let's conclude, we're not going to keep you much longer with the presentations, but I suppose to conclude the first half of the year, compared to that we're in a much better position in the H2, and there's been a significant turnaround throughout the business, especially coming up in 2026. We've streamlined our business by getting rid of the corporate glue, as I say, and exiting loss-making operations. No point in running them if you're not making money. We are streamlining and simplifying, removing unnecessary layers and complexity. We're working smarter, becoming leaner, more agile and better able to respond positively to market trends and opportunities. And there's still lots and lots of opportunities out there for us. As Brian mentioned, costs and cash flow are now the key priorities for strengthening the business. And of course, we continue to seek every opportunity to deleverage. Everything we've discussed today is about creating a sustainable business. I spent the first six months of my tenure looking backwards, trying to fix things that had happened probably years ago. We're now no longer just looking backwards to manage challenges. We're rewiring and rebuilding our business to deliver long-term profitable growth for our shareholders. And for our millions of customers, we are committed to delivering what they deserve. and that's the best possible service we can provide we are here for them you know they are not here for us and that's important so in summary we're fixing the businesses that need our focus we are simplifying and integrating where it counts importantly we are taking our people with us on this journey Retaining the brilliant talent that we have in our business. I can tell you we have some brilliant talents I'm not just saying that's easy to say but working with these guys since I've joined Very young and they make me feel young too, and I love that But from the board up to the guys who turn out every day to run our buses to run our coaches and and run our trains whose jobs are can be both very difficult and dangerous. I love a lot to these guys. There are thousands of them who do this on a regular basis. A couple of thank yous. Thank you for coming along today and thanks for the patience you've given us over the last 12 months or so. A very special thanks to our advisors over there who support us all the time. Give us a nudge when we need it. Pull us back when we need it. and stop us for saying silly things, which is mainly me when I'm feeling a bit crazy. You know, we couldn't do it without you guys. I really, really appreciate it. But, you know, thanks for turning up today. I can tell you I'm very looking forward to a number of site visits in Ibiza, right, where I can show you our late night and early morning services, and I'm sure you'll enjoy it. So, you know, thanks very much for everything. Thank you. And over to Q&A. Gemma, are you going to manage this? Gerald, do you want to kick off? Gerald, be nice.

Morning, everyone. Gerald Koo from Pamu or Liverum. I'll start with three if I can. Morocco, can you talk us through what's gone wrong, when did it go wrong, and why has it led to such a large exceptional charge? And on the topic of exceptionals, can you talk through how much of those turn into cash? And let's assume the market does, I know you're confident that it won't. And then, again, on the exceptionals, you talked about more cost deductions, what exceptionals should be expected associated with that? And finally, on UK bus asset monetisation, I think you sold two depots, you gave us the gain, are you able to give us the proceeds from those two sales? And how many depots have you got left?

Can you do the operational stuff in Morocco first, explaining what happened there? And Brian, can you deal with the exceptional stuff?

Well, okay.

I think your mic's working here.

Okay, sorry. All right. Morocco. We started, just to put you in context, we started Morocco in 1999, so it's 27 years ago. And we reached sixth operation in Morocco five years ago. So until more than 20 years we didn't reach the size of the business that we have. Now we are running four cities and we are running the first and the second cities in Morocco, that is Casablanca and Rabat as you know. So I think it's part of a bidding process. Sometimes you win, sometimes you lose. There's nothing to be at fault. And we are still the largest urban operator in Morocco. And what we have done with the exceptional is just to all the assets we have and the staff that we need to... to be out of the company because of the process of losing Tangier and Marrakech. This is the cost. But if you ask me, are you optimistic in Morocco? We are making money in Morocco. We will make money in Morocco to exist. We have some opportunities in the future to keep growing. But as the largest operator there, it will be more difficult because now there are more big companies competing with us that we don't have in the in the past, but we have also some areas that I cannot say, but some areas of diversification that we can enter in the Moroccan market. So, my view is, of course, I prefer to win rather than to lose. But I think it's part of the normal business, and I'm not especially worried, and I'm optimistic for the future in Morocco.

I think when you're operating a successful business and you grow it to the extent that we did, there's always a lot of people, a lot of competitors who want a share of it. They'll come in and take it, whatever business you're in, whatever profits you're making. I think that's what's happened to us in Morocco. But on the numbers, Brian.

In Morocco, we had a provision of just roughly 20 million at the half year. So then in the second half of the year, we had this issue where the authorities ended a contract and we had to impair some of the assets. In terms of the other questions, the sales of the depots, we sold two depots, just over 4 million, the proceeds from those. And then we looked to monetize the rest of the UK bus business. That was all that we had at the end of the year. And on the exceptionals for the cost restructuring, we don't have a number for this year at the moment. We're working through more cost take out, we'll give more guidance on that for the, at the 15 month stage. We'll have a better handle on that. And then the final one was the adjustments. So I can very quickly go through them. Obviously, the We Drive You contract revision, which you mentioned, we do absolutely expect to be successful with litigation, but that is, that would be a cash cost if we were unsuccessful, but that certainly is not what we expect. and the legal advice is very solid. On the legal claims, that will end up in cash, because it's a provision for settlements. On the intangible steps, non-cash, right, Jan? And the restructuring costs, that is mainly cash. That is mainly cash.

And the lockout?

And Morocco going forward, that is really, in terms of a go forward, that isn't an impact because that's a provision against, in other words, we're not going to recover that debt, that debt is now gone. It's not a cash, it's not a, the debt has disappeared effectively.

Gerald, on the West Midlands depots, one is a depot at Acocks Green, it's very old, in need of a lot of maintenance, and the other property was a bit of car parking land, so it's one bus garage and a bit of land.

It sounds like it was in the books at Berkeley Mill.

Yeah.

Yeah.

Well, it was a little bit more than that. There was no rock down, was there? No, no. We made a profit of $4 million. I think it was in the books. It was about $7 million.

Yeah, $7 million it was in the books. So, firstly, just on your guidance, the low end implies a decline in profits. So can you explain how you've thought about that and the range, like the bottom and top-end scenarios? Secondly, on ALSA, so if I understand your outlook, you are saying kind of maintain profitability. Is that a comment on the margin, given the strong margin that you saw last year? So you still expect top-line growth? If you could just... clarify kind of the moving parts between the top line and the margin outlook on ELSA for 26 as you've thought about it.

I might ask Paco for some help on the second one but for the for the first question you know we've taken a view on on the guidance for next year we felt it was right to start at the more or less where we where we ended this year I guess We're very slightly below. I mean, we certainly hope to do better than the minimum, but that is where we felt being sensible about guidance was the right place to be. What we don't want to do is just being... constant theme in the past is where we give guidance and then miss it. So we want to give guidance that we're very firmly believed that we can achieve. And then on the margins, you know, ALSA had an extraordinarily strong performance this year. And again, you know, maintaining that performance and, you know, there are some challenges, for example, Morocco we've just discussed. So making sure that we can you know, maintain that level of profitability going forward I think is what we believe is achievable. I mean there are quite a lot of challenges within the mix of ATSA. I don't know if you have anything to add.

Yeah, yeah, yeah. Okay, of course, I said in the presentation that 14 is unbelievable. It's something that even if you have asked me one year ago, I would say that that's very, very difficult to achieve 14%. What I can say is that the trend in Alsa that we are growing in terms of revenue through business as usual, passengers that are growing even two digits, thanks to a lot of things, but also because we are winning new contracts. For example, in the figures is not included the PDR contract, or is not included the new contract that we are going to start in Ibiza or some other places, or Guadalajara. So, I don't To be honest, I don't know if we can reach 14% of margin, but I can say that we are still growing. There is room for improvement in terms of revenue, in terms of passengers, even in terms of profit. I'm not obsessed that I need to reach 14% of margin. I'm obsessed that we need to keep growing with all the opportunities we have. If the margin is 12, it's fine for me. If the margin is 20, much better.

I think you might think we're a bit cautious. I think we think we're being realistic and we've got to rebuild a lot of trust with you guys and with our shareholders. And I think by being open and realistic then putting figures out that end up to be meaningless is the best way to go rather than you know totally failing and failing to get guidance year on year I don't think that's the best way to go

Thank you. And if I may ask a third question on the Qibya project in Saudi Arabia. We've heard in other projects there, there have been many delays. So kind of as you think about this project and other projects in Saudi, how do you factor in kind of timing of these projects and impacts from your perspective?

My experience, you know that we ran three contracts in the Middle East, two in Saudi and one in Bahrain. This Kiriya project, this is a fact, we were awarded and we need to start in 45 days after the signing of the contract. So my experience is they are doing very quickly because they know they need to have these cities running and for example they are now launching a project with rail that we are not in but we have been asked the timeline day to us that we can manage a second project there so I'm not worried about that and also to say that in the first month of operation it was like a wide operation we made profits from the day number one because it's not a risk contract it's a gross cost so If I have to bet, I would say that this is something that is going to happen quite quickly.

Thank you.

Good morning. Jack Cummings at Berenberg. Three questions, please. The first one is just on the cost savings program. I was wondering if you could just flesh out a little bit more. I know you mentioned kind of corporate glue, but what specifically you are taking out of the business and in what divisions? The second is on the pipeline. Obviously, you've won a decent amount of revenue and contracts both outside of the joint venture and including it. What's the pipeline looking like for full year 26? And then just finally on covenant leverage, I think 2.7 times at year end. How should we think about how that's going to trend over the next 12 months? Will it tick up a little bit in the next three to six when North America School Bus comes out and then fall? Just any more colour there would be great. Thank you.

I'll go the corporate blue one because it's my theme, this one. It's quite easy, really. And it's what Paco said. It's the first time we've been really operating as a team, probably since I left a long time ago. We work together. We've got a strong team. GEC, our group of executives. But importantly, it's how you deal with requests, either for approvals or for help. We deal with them quickly. If it's a no, we tell them no straight away. We don't just ask them, can you give me more information? Can you give me more information? And then tell them no. And if it's a yes, we're pretty positive about that. It's all about the speed of things. The big corporates where we've all worked before, They lose the nimbleness goes, you know. And the slower they are on making decisions and getting bogged down, the more chance that opportunities disappear. And we've had one already, I mean, an acquisition in another country in Europe. We've delayed it and deferred it and messed about with it in the past and it's gone away, hasn't it? And there's a danger by being so bloody slow you can miss such a lot by being too careful. Oh, we've got this governance. You know, I know you guys think governance is important and I appreciate that, but governance doesn't make you any money. It makes you do things right and you know the difference between right and wrong. But there's a balance between good governance and good and quick decision making and that's getting rid of that glue that's sticking us everywhere.

Let me add something. We are now, as MoVico, running 12 countries. If you compare 12 countries with our main competitors in the Champions League, they are running in 40, 50 countries. So that means that there is a lot of room for places to go. Let me not release the exact pipeline, but... It also is a fact that we submit roughly 30 bidding process in a year. I would say less than half in Spain, but more than 50% out of Spain. Other 11 countries that we run, we are preparing something to... But not only that, we are also having a look, not a footprint, but some researches and some ongoing negotiations in at least five more countries where we are not in at the moment. Let me say that I'm not going to show you the opportunity because they are competitors. But I can assure you that we have a lot of opportunity. I'm not saying, I'm not so... that we are going to win all of them. You know that the ratio of winning contracts is about 30%. But you can imagine that if we have this size of opportunities, one, two, three, we will win. I hope. If not, he has to fire me.

Frankly, the cost of... Just in terms of cost savings, so 75 million, that is spread right across the group. Head office is about, I mean, just in very rough terms, it's about 15 million out of head office. The big focus, as we've mentioned in really all the presentations, has been on UK coach, which is about 25, and then it's 10 out of the other divisions, so Germany, Alta, and We Drive You. But it really is right across the business. On the covenant, it's a little bit complicated because of the German settlement, because that's going to influence the ratios very significantly. And in fact, the accounting is quite complicated. In fact, even KPMG are getting technical advice as to how it's treated. But it will be, without Germany, it will be in, it will be though, obviously, the covenant situation. conference ratio, but probably in the threes. But, you know, I'm probably getting stared at now, I'm not supposed to say that. It will be in the threes, excluding Germany. With Germany, and that again depends on accounting, it would be lower, and by the year end, it will be below three.

Questions, guys?

Rory Cullinane, RBC. First question on AUSA concession renewals, so what percentage of AUSA's revenues are up for renewal in full year 27? Is there anything else coming in the years after that, if you could give us an indicator of what percentage of earnings that would be even better. Then secondly, on provisions on the balance sheet, you've hopefully quantified that there'll be 8 million of utilisation from the We Drive You onerous contract provision. You may not be able to comment on German Rail, but if you can, that would be appreciated. And then is there anything else we should be thinking about?

Can you talk a bit about concessions coming up, Paco? This year and next year?

Yes, well, the franchise process is ongoing. It's true that it's been a general delay, but it's something, for example, right now, there is one or two contracts on the table. We are not the incumbent, but in Spain we have in March it's... We need to submit at least two offers in the process. So we will have the process. I don't expect that we will have in all, of course not all of them because if I'm not wrong we manage 21 contracts in Spain. So probably it's a process that will take at least a couple of years to finish. And after that you know that there is a process of mobilization, claims and so on. So I don't have the crystal ball, but I think it's something that for sure is not going to impact 26. It's strange that could impact in 27 or at least in the first half of 27. That is something that is happening and of course we haven't lost a single contract in the whole history in Spain. And as I show, the revenue of Long Haul is 17% of the company. It's a good margin, and of course after a bidding process you usually lose a lot of margins because you have to reduce price, but after that there is a recovery coming from the increase on passengers. So it's a process like a peak on that. I don't know if that answers your question or not, but this is my expectation.

On German Rail, I'm sorry I can't give you any more, because that's a commitment we've made to the local authorities there until we get the contract signed. They're a different organisation to us, a political organisation, and they've got a lot of people involved. their reports including their elected members and officers and also central government but we did say in the announcement that we're reducing the length of our loss making contract we're increasing the length of our profit making contract and we're also changing the basis of our profit making contract to gross costs rather than net costs and that takes away a load of revenue risk Well, I can say there have been long negotiations and we're very happy with the outcome. There's a lot of tricky accounting I can't understand, but as Brian says, we're seeking help there, but we are very satisfied with the outcome.

But I think the important one is when you put the three contracts together, the cash leakage is going to stop. That's my intention.

And Brian on provisions and stuff?

I think only the two provisions so on will matter. It'll be 8 million be released next year and then on the German one we just have to finalize the contracts and we disclose that so hopefully again with the full year results. Okay. Any more questions guys?

Are we done? I think we are. Thank you very much for coming along. Really enjoyed meeting as usual. we're seeing a lot of you in the future particularly in this year please don't get too bored with us I know we're not the most exciting people but we do our best thank you very much