Mobico Group Plc · LSE:MCG
Mobico — National Express Group — Investor Day (October 2021)
78 slides from Mobico's investor day presentation, Oct 18, 2021
Slide 1: Capital Markets Day 18th October 2021
Slide 2: Part 1 Introduction and Overview
Part 1 Introduction and Overview Ignacio Garat Group Chief Executive
Slide 3: An attractive investment case
An attractive investment case We have five We are the compelling, best-in-class hard-to-replicate operator customer propositions to leverage this growth national express
Slide 4: Case study video on the case for Modal Shift
Please see our website at https://www.nationalexpressgroup.com/CMD21 for our case study video on the case for Modal Shift
Slide 5: Agenda for the day
Agenda for the day national express Part 1 Introduction Part 2 The Evolve Strategy Part 3 Divisional Overviews Part 4 Financial Framework Part 5 Summary and Close Part 6 Q&A Close London time 14:00 14:05 14:45 15:25 15:40 15:45 16:15
Slide 6: Only UK listed internationally diversified, multi-modal transport provider
National Express is the only UK listed internationally diversified, multi-modal transport provider Geographically well balanced 4, Internationally a revenues diversified * @North America @ALSA @ German Rail @UK | . ° High proportion of revenue is @ Contracted epel|egeccce national EXPTESS date: the
Slide 7: The Group at a glance
The Group at a glance employees annual passenger journeys countries annual car journeys avoided vehicles operated NALONASl SXPTESS ——ote:tnese numbers represent the pepandemic ures
Slide 8: An industry-leading team
An industry-leading team Presenting today Ignacio Garat Chris Davies Francisco Iglesias (Paco) Gary Waits Tom Stables Group CEO Group CFO ALSA CEO North America CEO UK & Germany CEO Kevin Gale Alison Forster Karen Myers Jennifer Myram Dorothy Capers Debbie O’Shea James Stamp Group Operations Group S
Slide 9: Part 2 The Evolve Strategy
Part 2 The Evolve Strategy Ignacio Garat Group Chief Executive
Slide 10: An exciting time to be in public transport
An exciting time to be in public transport nationalexpress National Bus Strategy
Slide 11: Business Review — The strategic review process
Business Review — [he strategic review process Where? World’s premier + Where we operate: in which geographies operator and cities to be considered the world’s leading operator What? Products * What products we offer in our selected markets customers wan How? tS) Clear A cclear set of outcomes: what
Slide 12: Business Review — The strategic review process
Business Review — The strategic review process Near term pipeline of £1.5bn bidding opportunities in existing footprint 790 £4bn of revenue city targets opportunities national EXPTESS ote: the £1.50n pipeline of opportunities represents annualised revenue £1.5bn shortlist UK&G North America ALSA 12
Slide 13: The Evolve strategy: vision and purpose
The @volve strategy We have a clear vision and purpose, which drives everything we do... national express Vision: The world’s premier shared mobility operator Purpose: To lead the modal shift from cars to mass transit 13
Slide 14: Five customer propositions
The @volve strategy ...We deliver this through five customer propositions... national express 14
Slide 15: Enabled by focused application of technology
The @volve strategy ...Which are enabled by focused application of technology... national express pigitally enableg 15
Slide 16: Superior outcomes for all our stakeholders
The @volve strategy ... 10 deliver superior outcomes for all our stakeholders F $ 2 i} 2 g ca 9 i % national express
Slide 17: The world's premier shared mobility operator
national express The world’s premier shared mobility operator Purpose: To lead the modal shift from cars to mass transit Fill the Transit GaP 2 3 ie 7) fo] iS o é
Slide 18: We have five compelling, hard-to-replicate propositions
The @yolve strategy We have five compelling, Reinvigorate Public Transport Grow use of public transport in cities by building partnerships with stakeholders who want sustainable solutions national express Multi-Modal Expansion Build more modal capability and city hubs from existing locations where w
Slide 19: Reinvigorate Public Transport
The @yolve strategy Reinvigorate Reinvigorate Public Transport is... rebuilding confidence in the public transport system by offering high-quality operations that passengers want to use + We have consistently + We enhance social mobility demonstrated our ability to in the communities we serve revers
Slide 20: Multi-Modal Expansion
The @volve strategy Multi-Modal Expansion is... expanding the breadth of our product offering, based on global know-how and local relationships * There are opportunities to “land and expand” as we enter new cities * We have already implemented this in cities such as Birmingham, Chicago, Coventry, Ma
Slide 21: Operational Transformation
The @volve strategy Route planning technology used on our paratransit vehicles in the US and UK Operational Transformation is... driving growth by delivering transport solutions more efficiently than our competitors through processes enabled by technology * Operations playbook - the NX way: globally
Slide 22: Fill the Transit Gap
The @volve strategy Fill the Transit Gap is... helping businesses and cities transition from the private car in places that are not well served by existing public mass transit * $2 billion US corporate shuttle market growing at over 4% CAGR + WeDriveU serves many of the largest businesses on the Wes
Slide 23: Consolidate & Compound
The @volve strategy Consolidate & Compound is... the consolidation of fragmented markets to bring the benefits of scale and consistent service + US School Bus: acquire ‘bolt ons’ at attractive multiples, drive c.15% returns * Spain: consolidate regional and urban services from initial acquisition po
Slide 24: Digitally enabled
The ¢ strategy Digitally enabled DriveCam safety technology deployed on one of our vehicles Reviewing DriveCam footage showing driver behaviour national express 24
Slide 25: Digitally enabled: Two examples
The @yolve strategy Digitally enabled: Two examples The most reliable Speeding Network a | control optimisation technology software to 2% driver linking data cut costs, ae and telematics grow revenue to give us and improve real-time the customer Wey information to experience monitor and improve safe
Slide 26: Superior outcomes for all our stakeholders
The @volve strategy Superior outcomes for all our stakeholders go10u? yo JeA0}duig ayy national express The most reliable 26
Slide 27: We will lead the industry in safety
The @volve strategy Please see our website at https://www.nationalexpressgroup.com/CMD21 for our case study video on Safety We will lead the industry in safety by continually driving down accidents KPI: FWI* national EXPTESS ‘rw-Fataities weighted index 27
Slide 28: Outcomes: The safest
The @yolve strategy Outcomes: The safest 10-year Group FWI progression Lytx Risk Score* 30 25 20 15 Lytx Risk Score Metric 10 —lIndustry average —National Express national express * This is a risk score produced by Lytx, the providers of DriveCam. The National Express score represents the UK Bus bus
Slide 29: The most reliable
The @volve strategy We will lead the industry in reliability by striving for ever increasing levels of punctuality, and driving down cancelled services and lost miles KPI: OTP* and lost miles National express. -o1-on-ime Pero The most reliable 29
Slide 30: The most reliable: how customers award quality marks
The @yolve strategy The most reliable national express A typical split of how customers award quality marks in assessing bids: °® Safest Environmental leadership © Most reliable © Most satisfied customers © Employer of choice © Other 30
Slide 31: Lead the transition to zero emission vehicles
The @volve strategy national express We will lead the transition to zero emission vehicles KPI: Vehicle emissions 31
Slide 32: Zero emission fleet targets
The ¢ strategy Zero emission fleet targets New New New New Spain UK Spain North KB Mor : UK Bus Bus Coach Coach OO America Scope 1 and 2 emissions net zero target national express
Slide 33: Our customers will rate us the highest
The @volve strategy national express Our customers will rate us the highest in the industry KPI: Net promoter score 33
Slide 34: The most satisfied customers
The @yolve strategy [he most satisfied customers Satisfied customers drive loyalty, retention and better financial returns School Bus customers rating 5 out of 5 70% 60% 50% 40% 30% 20% 10% 2018 2019 2020 2021 Best passenger transport company in Spain* 00) a ww ALSA net promoter score 2014 2015 2016
Slide 35: High performance culture
The @yolve i aa‘ We will embed a high performance culture that attracts and retains the best people go10u? yo JeA0}duig ayy KPI: Engagement score national express 35
Slide 36: The world's premier shared mobility operator
national express The world’s premier shared mobility operator Purpose: To lead the modal shift from cars to mass transit Fill the Transit GaP 2 3 ie 7) fo] iS o é
Slide 37: Proposed combination with Stagecoach
Proposed combination with Stagecoach — Accelerating our strategy * Generates significant additional capacity to accelerate growth investment in ALSA and North America Creating a stronger platform in an increasingly ‘bus- | | friendly’ UK market ahead of £3bn National Bus Strategy | Exciting opportun
Slide 38: Part 3 Divisional Overviews
Part 3 Divisional Overviews Francisco Iglesias ALSA CEO Gary Waits North America CEO Tom Stables UK & Germany CEO national express 38
Slide 39: Part 3a ALSA Overview
Part 3a ALSA Overview Francisco Iglesias ALSA CEO national express Please see our website at https:/Awww.nationalexpressgroup.com/CMD21 for our Introduction to ALSA video 39
Slide 40: ALSA - Examples of our customer propositions
ALSA - Examples of our customer propositions < . euntie Muy, . Example: Casablanca 3 bgt Example: Madrid See “Reinvigorating Public Transport” video Example: Bilbao national express
Slide 41: ALSA - Reinvigorating Public Transport: Bilbao
ALSA - Reinvigorating Public Transport: Bilbao Before 39 days lost * Service interruptions, frequent strikes throu gh * Poor relations with unions and employees strikes * Unhappy customers between * Poor reliability and maintenance 2008-2012 715 * Weak relationships with Pt accidents in the local au
Slide 42: Bilbao: After
After * Safety significantly improved - 69% reduction in at-fault accidents * Significantly improved union and employee relationships -No strikes for 6 years * Quality of service significantly improved — Urban Transport company of the year * Strong relationship with the local authorities — Contract
Slide 43: ALSA - Multi-Modal Expansion
ALSA - Multi-Modal Expansion National Express acquires ALSA Entry into Taxi and Car Transfer market with ALSACab and Uber Corporate Shuttle and expansion of Urban bus 2017 national express Expansion in Long Haul and Urban bus Expansion in Taxi services and Urban bus Further expansion of Urban bus St
Slide 44: ALSA - Future growth prospects
ALSA - Future growth prospects: * Government policy to meet decarbonisation and clean air targets driving demand and modal shift Regional * Continued diversification of Spanish business €1 7 7bn * Increase penetration of Urban and ket si Regional markets: greater mix of revenue market size protected
Slide 45: ALSA - Future growth prospects: Morocco and International
ALSA - Future growth prospects: Morocco and International Morocco * Further urban gross contract opportunities * Opportunities within our existing contracts * Entry into the €300m intercity coach market International * Expanding in our existing markets — Switzerland and Portugal * Over £100m pipelin
Slide 46: North America Overview
North America Overview Please see our website at https:/Awww.nationalexpressgroup.com/CMD21 for our Introduction to North America video
Slide 47: North America — Examples of our customer propositions
North America — Examples of our customer propositions \@ Example: Chicago Example: Shuttle Example: Driving Excellence See “Operational Transformation” video national express 47
Slide 48: North America — Multi-Modal Expansion: Chicago
North America — Multi-Modal Expansion: Chicago * Acquisition of CDT in 2017 * Rapidly expanded from core paratransit to: - Student transportation - Charter and field trips * Expanded presence winning further paratransit contracts * Harnessing efficiencies through shared depots, maintenance facilitie
Slide 49: North America - Fill the Transit Gap: Shuttle
North America - Fill the Transit Gap: Shuttle * Acquired WeDriveU in 2019 * Transporting employees and students to large and growing campuses where public transport provision is poor and environmental restrictions limit private car use * Helping successful corporations attract the best people and im
Slide 50: North America — Future growth prospects: School Bus
North America - Future Breakdown of US school bus market growth prospects: School Bus @ Insourced @ Outsourced Over £300m annual revenue from upcoming organic and inorganic opportunities in a large and fragmented market * Consolidation of smaller operators as the industry continues to professionalis
Slide 51: North America — Future growth prospects: Transit
North America — Future growth prospects: Transit Significant organic growth opportunities in a large and growing market * Our sweet spot is Paratransit * Ageing US demographic supports growth - forecast market growth over 4% p.a. through to 2030 * Success in Chicago, Boston and Washington proving ou
Slide 52: North America — Future growth prospects: Shuttle
North America — Future growth prospects: Shuttle Attractive underlying growth markets -— significant opportunities to fill the transit gap Growing with existing customers who are expanding rapidly Geographic expansion with our customers across the US Significant growth potential in the University sh
Slide 53: Part 3c UK & Germany Overview
Part 3c UK & Germany Overview K raaatelal E Please see our website at Tom Stables UK & Ge ay CEO https:/Avww.nationalexpressgroup.com/CMD21 for our Introduction to UK and Germany video national express 53
Slide 54: See Reinvigorating Public Transport video
See “Reinvigorating Public Transport” video national express
Slide 55: Rapid improvement in service through digitalised processes
¢ Rapid improvement in service through digitalised processes: — Data driven routing driving efficiency — Real-time performance information, journey tracking and logging — Safety technology reduced costs of claims * Improved quality of service and contract profitability and won additional business in
Slide 56: Consolidating small regional businesses into NETS
* Consolidating small regional businesses into NETS — our Transport Solutions business * Leveraging the National Express brand and reputation for customer service and safety to drive consolidation in a large fragmented market * Shared infrastructure driving efficiencies and providing competitive adv
Slide 57: Platform to accelerate our growth
+ Platform to accelerate our growth * Exciting opportunity to deliver significant operational efficiencies and bring ‘best of both’ from combined operational capabilities * Creating a stronger platform in an increasingly ‘bus friendly’ UK market ahead of £3bn National Bus Strategy * Continue to enha
Slide 58: Part 4 Financial Framework
Part 4 Financial Framework Chris Davies CFO
Slide 59: Financial Framework: Delivering strong financial returns
Financial Framework Delivering strong financial returns @yolve Note: unless otherwise stated, all information herein is excluding the impact of the potential all-share combination with Stagecoach Group plc announced on 21 September 2021 national express 59
Slide 60: Strong track record of delivering strong financial results
Financial Framework — Strong track record of delivering strong financial results Revenue EBIT 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Notes: national express 1. Previous years restated to remove Rail and Midland Metro, where appli
Slide 61: Revenue recovered by 2022, adding £1bn over following 5 years
Financial Framework — Revenue recovered by 2022, adding £1bn over the following 5 years gan 9 Targeting additional £1bn of revenue by 2027 2019 2020 2021 2022 2027 AVION exe S Sm sass Perea era oO co ee 61 interpreted to mean that earings or earnings per share for National Express, as appropriate, f
Slide 62: Strong pipeline of growth opportunities
Financial Framework — Strong pipeline of growth opportunities £1.5 billion pipeline by customer proposition national express Reinvigorate Public Transport Multi-Modal Expansion Operational Transformation Fill the Transit Gap Consolidate & Compound £1.5 billion pipeline by division @ North America @
Slide 63: Margin averaging circa 9%, adding over £100m EBIT by 2027
Financial Framework — Wargin averaging circa 9%, adding over £100m EBIT by 2027 Margin averaging 9% c 2 Short term margin recovery impacted by: £ . . 2 c. 10% 6.9% + Mix of business 5 average average + Investment to encourage customers back a © + Competitive intensity in UK and Spanish Coach busines
Slide 64: £100 million of permanent cost reductions
Financial Framework — £100 million of permanent cost reductions 2019 costs £2.5bn Split of £100m Cost reduction exercise in 2020 and 2021 Overheads, cost savings has permanently removed £100m of cost: other + Headcount overheads meray + Increased automation of sales activities pe rty + Reducing thir
Slide 65: Strong and improving cash generation
Financial Framework — Strong and improving cash generation with at least £1.25bn free cash flow between 2022 and 2027 Targeting at least Over 80% £1.25bn of free cash flow EMMVERIS between 2022 and 2027 c. 65% average Free cash conversion* —_—EE——— a eae 2015 to 2019 2022 to 2027 * Free cash convers
Slide 66: Our capital allocation model remains unchanged
Financial Framework Our capital allocation model remains unchanged We will utilise the Group’s strong free cash flow generation to: Return to Maintain a prudent Shareholders balance sheet (dividend at least (net debt to EBITDA in a 2.0x covered) range of 1.5 to 2.0 times) Invest for growth (targetin
Slide 67: De-carbonising and freeing up capital
Financial Framework — De-carbonising and freeing up capital Total cost of ownership of EV is now lower than diesel AN » This chart shows the lifetime present value cash flow of a single UK “platinum” bus in three different procurement scenarios £500k £480k £430k - Availability arrangement is better
Slide 68: No liquidity concerns, gearing rapidly reducing
Financial Framework — No liquidity concerns, gearing rapidly reducing * No material refinancing © Weeins| reaui RCF quirement before 2023 © Other debt * £1bn cash and committed ee headroom” “ © Hybrid * Moody’s and Fitch confirmed ratings soa * Supportive banking group ‘eo * Target net debt to EBITD
Slide 69: Proposed combination with Stagecoach
Financial Framework — Proposed combination with Stagecoach Pre-Covid Side-by-Side’ Pre-Covid Revenue by Geography? (%) nationalexpress ©)Stagecoach? Pro Forma Standalone Pro Forma standalone (Ex. Synergies) Revenue £2,744m £4,001m @UK EBITDA £510m £212m £722m @ North America EBIT Margin 10.8% 9.8% @
Slide 70: Significant growth and revenue synergies
Financial Framework Significant growth and revenue synergies Accelerate reduction in leverage towards 1.5-2.0x target Increased investment in high-return growth pipeline driving further earnings and cash flow fed that the realisation of these synergies will require one-off costs of up to ¢.£40 milli
Slide 71: A track record of significant transactions
Financial Framework A track record of significant transactions... WeDriveU Petermann c.$150m c.$250m ALSA c.£450m 71
Slide 72: Financial Framework summary
Financial Framework Revenue back to 2019 levels in 2022, targeting an Margin averaging 9% for 2022 to 2027, national express Free cash conversion a year, targeting at least of free cash generation from 2022 to 2027 Paying a dividend at least targeting 2022 reinstatement A lower levered business: tar
Slide 73: Part 5 Summary and Close
Part 5 Summary and Close Ignacio Garat Group Chief Executive national express
Slide 74: The world's premier shared mobility operator
national express The world’s premier shared mobility operator Purpose: To lead the modal shift from cars to mass transit Fill the Transit GaP 2 3 ie 7) fo] iS o é
Slide 75: Strong pipeline of growth opportunities
Strong pipeline of growth opportunities £1.5 billion pipeline by customer proposition national express Reinvigorate Public Transport Multi-Modal Expansion Operational Transformation Fill the Transit Gap Consolidate & Compound £1.5 billion pipeline by division @ North America @ ALSA © UK & Germany 75
Slide 76: An attractive investment case
An attractive investment case We have five We are the compelling, best-in-class hard-to-replicate operator customer propositions to leverage this growth national express
Slide 77: Part 6 Q&A
Part 6 Q&A national express 77
Slide 78: Important information disclaimer
The information in this presentation is general information and background only, and is not intended to be relied upon as advice to investors or potential investors as it does not take into account their particular investment objectives, financial situation or needs. The contents of this presentatio