Mobico Group Plc

Good morning, everyone. Welcome to our 12 months 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 met all 3 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 1 of our 5 divisions, as said, was really making any real money. Today, we are here to talk to you about the stability we brought to the business as well as the momentum being gradually built up as we implement our Simplify for Success program.

And 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 counseled by our advisers 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 whole 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 financial 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 GBP 2.8 billion, while adjusted operating profit increased by 9% to nearly GBP 200 million.

Operationally, we achieved nearly 25 (sic) [ 24 ] billion passenger [ kms ] secured new contracts worth over GBP 1 billion. Our German rail business provided a full service in December, would you believe for the first time in 2 years.

And importantly, as you've seen, we've reached an agreement with the 5 German PTAs in North Rhine-Westphalia on the restructuring of all our rail contracts. This derisks 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 experienced some issues with certain contracts, and we fully recognized 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 road map 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 as what I call the corporate glue, the surge of large and listed companies, the duplication of functions and processes going through procedures, waiting for yes and nos. It takes a hell of amount of time to do this and slows us down in the past.

By being smarter and integrating our operations where it makes sense, we are becoming a leaner, faster and more effective organization. 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 scrutinized 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 H2 performance of GBP 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 GBP 75 million of cost savings in '26 with an annual run rate of GBP 100 million by the end of the year. We have largely integrated UK Coach into 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 CARTA contract in WeDriveU. Despite the progress to date, we do recognize 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. WeDriveU completed its first year as a stand-alone entity, and we are applying lessons learned there to improve operational and financial performance.

We exited early the loss-making CARTA contract at the start of this year, '26. This contract had lost over [ $303 million ] in 2025.

You'll see from our RNS that we've provisioned GBP 52 million for WMATA. 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 client, but we are ensuring this no longer distracts from our profitable core business.

In the U.K., the integration of UK Coach into Alsa is now largely complete with operational 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 a full service. This result was achieved through our investment in driver training and increased recruitment.

It 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 GBP 450 million, whilst maintaining a disciplined conversion rate of 28% on new deals. This compared to 23% last year.

It's really worth noting that these contracts exclude nonconsolidated stuff like joint ventures and joint operations. Most notably, the project of Qiddiya in Saudi Arabia and the Guadalajara Health bid will bring the total value of new contracts secured in '25 in excess of GBP 1 billion.

We also expect to be awarded 2 key contracts in Spain shortly. These include a retention of one of Alsa's largest 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 reached a new milestone of 640 million passengers. This was largely driven by a growth of 10% in Spanish domestic demand, mainly regional and urban resorts.

As you can see from the charts, we're 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 behavior.

I will now hand over to Brian, who will take you through the numbers in more detail.

Okay. Thank you very much, Phil, for that, and good morning, everyone.

Before going into the 2025 figures, I want to mention the 2024 numbers have been restated for a GBP 0.8 of a million EBIT impact in Germany. They also reflect the discontinued operations of NASB and NXTS.

This ensures a clean and like-for-like comparison for the performance we are discussing today. Revenue of GBP 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 GBP 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 WeDriveU 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 GBP 138 million versus GBP 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 operational performance and the benefit of cost savings arising from the restructuring and efficiency improvements that we've been making.

Free cash flow was GBP 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.

Covenant gearing improved by 0.1x from the end of 2024. And again, this has been helped by the proceeds from the school bus sale.

In terms of statutory results, operating profit from continuing operations decreased from GBP 12 million to GBP 21.9 million. To understand the bridge between our adjusted statutory operating profit, there are several nonoperating charges that I'll walk you through.

There were no charges to the German rail onerous contract provisions in the period. However, we did utilize GBP 56 million in the provision during the year, leaving the remaining provision at GBP 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 WeDriveU. We have made a GBP 52 million onerous contract provision in respect of the WMATA contract.

And we are seeking legal address, which Phil as mentioned, for -- 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 favorable outcome.

However, the process is expected to take 18 to 24 months. It's a long process.

In the year, the utilization of the provision was just over GBP 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 GBP 38.5 million charge has been recognized 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 GBP 19 million.

In Morocco, following a rapid change in local operating environment, we have taken a GBP 27 million charge. This reflects a combination of price concessions we made in Casablanca, which enabled outstanding debts to be settled and also a noncash 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 EUR 8 million compared to just under EUR 13 million in 2024. Amortization of intangibles with acquired businesses from continuing operations increased by GBP 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 stabilize and improve the group's performance, we invested GBP 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 GBP 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 provisions at the bottom of the slide. We currently have GBP 133 million remaining on the German OCP.

We will reevaluate the provision for our 15-month audited results as it will be dependent upon the finalization of the legally binding agreements with the PTAs, which are due to be signed before the 30th of June. Of the GBP 47 million remaining provision for WeDriveU, we expect to utilize GBP 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 GBP 1.5 billion mark. And operating profit increased by 14% to GBP 212 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 WeDriveU, revenue increased by just under 5% to GBP 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 CARTA 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 with WeDriveU improving to a GBP 17.6 million profit in H2.

This recovery is expected to continue in 2026. On the other hand, the U.K.

business continues to face a very challenging environment, but has shown great resilience with revenue decreasing only 4.6% to GBP 587 million despite intense competition in the Coach business. Breaking this down, UK Coach contributed GBP 315 million revenue, while U.K.

Bus delivered GBP 272 million. Given the separation of the U.K.

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 31st of 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. Within U.K.

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 U.K.

During the period, we also sold Acocks Green depot and Oak Road. This resulted in a GBP 4.3 million increase in the adjusted operating profit for the 12 months.

Overall, the U.K. reported a GBP 4.6 million operating loss, as I said, largely due to the competitive pressures in U.K.

Coach, also combined with 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% (sic) [ 1.4% ] to GBP 253 million. And whilst the -- the adjusted operating profit increased to GBP 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 RRX contract were GBP 56 million, and this is a cash outflow, which -- this is the significance of the German contracts that we're in the process of finalizing.

Central Function costs increased by GBP 2.3 million, principally due to higher costs in relation to professional services and include a higher audit fee. However, this sort of hides the underlying cost savings that have been made during the year.

Looking forward to 2026, we expect Alsa to maintain current levels of performance. For WeDriveU, we expect continued underlying recovery, whilst we continue to redress WMATA through the legal process.

By integrating UK Coach into Alsa, the business is becoming more competitive. Nevertheless, we expect 2026 to be a challenging year.

U.K. Bus is expected to be at breakeven, subject to finalization of funding discussions with Transport for the West Midlands.

And in Germany, our rail business is benefiting from operational improvements and will be derisked once we have the PTA agreement signed by the 30th of June. By the way, that'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 GBP 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 tax is due to a one-off refund because of the change in tax law, which significantly reduced our cash tax payments in 2024.

And we are looking -- 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 U.K., most of our profits are in Spain, and therefore, we don't have an offset for interest.

We are targeting a total CapEx of GBP 120 million for 2026. This reflects our commitment to disciplined spending, maximizing cash conversion as we move forward.

And Phil has mentioned this in his presentation and Phil has -- or Paco is also going to mention 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 GBP 286 million inflow, reflecting the cash proceeds from the school bus disposal. We recorded a cash outflow of GBP 118 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 hybrid on coupon for 2025, which is the last payment at GBP 21 million. The next payment due is GBP 40 million, which is in February 2027.

There was a GBP 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 GBP 127 million for the period. The funds inflow was offset -- has offset the loss of school bus EBITDA, resulting in a covenant gearing improving to 2.7x.

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 EUR 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 -- sorry, almost finally, I want to briefly walk through our financial calendar for 2026. As you may have noted, we have adjusted our 2025 and '26 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 31 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 audited results in late June, early July. Looking into the second half, we will report 6-month interim results for the period ending September 30 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 9-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 maximize 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 program, which is currently targeting GBP 75 million of cost savings in 2026 with a run rate of GBP 100 million from the end of 2026. We are targeting an adjusted operating profit of GBP 195 million to GBP 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. WeDriveU is on a recovery path, and our U.K.

and German businesses are leaner and more resilient with GBP 75 million in targeted savings and an operating profit guidance of GBP 195 million to GBP 210 million and positive net cash in 2026. I will now hand over to Paco, who will go through the operational 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 -- as you have noticed, I'm Spanish, but you probably don't know is I'm from the South of Spain, 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 a 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 on that well, this is Alsa, you know that I know Alsa a little bit. I've been working for Alsa for 34 years, and I'm very proud in 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 that you probably know that Long Haul is like a jewel of the crowd, long haul is 17% of the company.

It's just 17%. Where we are growing more at the moment, what we are growing a lot in international that was almost 0, 5 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 franchisees process. But if you see the figures, we have managed to keep growing in 2 digits in terms of revenue and also in terms of profit.

And the margin, to be honest, is unbelievable. I think it's to achieve 14% 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 in to get the strategy and the numbers done.

And a couple of points regarding the environment that Alsa, especially in Spain are now involved. One is very important is 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 is a new law after 40 years.

And why it's 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 very important. And also this new law secure the system of franchising and concession for long haul in Spain.

So I think it's very important. It's something that has been very controversial in the past regarding if it's going to be regulated or liberalized now with the new law is 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. It's like because it's not subsidies to the companies is to reduce price for the passengers to use more public transport.

And I think it's -- the current government 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 2 months, I cannot show you the figures, but the starting of the year '26 is going -- is performing very well.

Let me give you an example of growth. This is Qiddiya, the Saudi city on that.

How can we -- growth in that contract is EUR 500 million contract in 8-year plus a potential extension of 2 more. And it fits exactly with the strategy of Alsa.

It's asset-light, is low risk and it's a project that is absolutely scalable because this is one of the -- it's the first mega project that the Saudi government is building in the country, but the plan is to have 10 projects like Qiddiya, 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 the, what I call the Champion League because we were competing there with the state owned -- French state-owned company, the Italian one, the Singaporean one.

Well, the top of the, company and Alsa that is -- 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 is one of the main -- 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 WeDriveU, as Brian mentioned, I think despite the total figures, the figure from H2 has been very, very positive. We have managed to change the trend that we had in the past.

You know that from the H1, we have the separation process with the school bus that 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're managing in the States almost 100 contracts, but there are 3, 4 of them that are negative. And 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 the states I passed a lot of times in the last year, there is a lot of room for improvement. Our market share in the state is very, very little.

For example, one of our competitors have 10x the size of WeDriveU. That means we have a lot of place.

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 U.K., I think it's -- we cannot share the figures from bus and coach, but I can give you some light on that. On the bus, we are -- a slight increase on revenue, but it's true that the passengers are going down, not that much, but I think it is in the same trend that all the urban industry in U.K.

are doing and are suffering right now. But I think positive news is we have managed with the authority to secure the fundings in order to have at least, I would say, breakeven in '25 and of course, in '26.

Also very important in the coach that I would define that the integration of U.K. Coach and Alsa is completely success.

Now here, I can see Javier, who is in charge of U.K. Coach in Birmingham.

And we are in just less than 6 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 in 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 specific routes 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. So I'm also very optimistic regarding '26 that we can manage to reverse the situation that we have.

Finally, Germany, I think as Phil mentioned, I think it's several milestones. For the first time, we have -- 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 driver that we were using in the past came from third parties for agencies now 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 -- and 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 1 year working on the -- throughout the group, 5 things that I have identified that we are working in the same page.

This is -- these are facts. This is not only narrative.

This is -- there is fact behind all this statement. First, all the divisions are performing better than last year, these numbers.

Second is we have huge opportunities of all around the world. I mentioned Saudi.

I mentioned states, but we have also 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 divisions.

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 that is linked with the next point that we are improving the margin on every single contract. We are avoiding totally loss-making contracts.

This is a process that we're going to finish in the next months, and we are trying to get a little bit more of every single contract to gain 1% in every single contract, you can imagine that it has a huge impact on profit. And finally, probably this is not a real -- it's a fact, but it's not a number behind that 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 4 CEOs or Vice President or whatever.

We have the same protocols. We have the same 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 the other. For example, U.K.

Coach, we are using the pricing technology of Alsa or -- but we have also exported some from the states in terms of Chatel to the business -- or France in the business that we have started in Spain, for example. So -- that's all.

I would like to end thanking all of you. Any question after Phil's conclusion, but I want to convey that we as a team are strong.

We are excited with the present and the future and myself are very, very optimistic with '26. We will see you in the next month again for your presentation.

So 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 apologize for your English. People can probably understand.

I'm not mentioning you. But Paco, your accent from the south of Spain, it's much easier for people to understand than my accent from the north of England, but well done.

That was a great presentation. Let's conclude.

We're not going to keep you much longer over 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 exited 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, cost 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 6 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 are 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.

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, returning the brilliant talent that we have in our business, and I can tell you, we have some brilliant talent.

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 run our trains, whose jobs can be both very difficult and dangerous, we owe a hell of a lot to these guys. 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. Yes, 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.

Now we couldn't do it without you guys really, really appreciate it. But 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 service, and I'm sure you'll enjoy it.

So thanks very much for everything. Thank you.

And over to Q&A. Are you going to manage this?

Gerald, do you want to kick off? Gerald, be nice.

Gerald Khoo from Panmure Liberum. I'll start with 3, 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 WMATA does, I know you're all confident that it won't. And then, again, on the exceptionals, you talked about sort of more cost reductions, what exceptional should we expect associated with that?

And finally, on U.K. Bus asset monetization, I think you sold 2 depots.

You gave us the game. Are you able to give us the proceeds from those 2 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 exceptional stuff?

Okay. Morocco, we started just to put you in context, we started Morocco in 1999.

So it's 27 years ago. And we reached 6 operations in Morocco in 5 years ago.

So until more than 20 years, we didn't reach the size of the business that we have. Now we are running 4 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 our bidding process. Sometimes you win, sometimes you lose.

This is nothing to be at fault. And we are still the largest urban operator in Morocco.

And what we have done with the exception is just to all the assets we have and the staff that we need 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 '26. 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 past. But we have also some areas that I cannot say, but some areas of diversification that we can enter in the Morocco market.

So my view is it's been -- 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, 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. And I think that's what's happened to us in Morocco.

But on the numbers, Brian?

Yes. Morocco, we had a provision of just roughly GBP 20 million at the half year.

So this -- 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 2 depots, just over GBP 4 million, the proceeds from those.

And then we look to monetize the rest of the U.K. Bus business.

That was all that we had at the end of the year. 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 takeout. We'll give more guidance on that for the -- at the 15-month stage.

We have a better handle on that. And then the final one was the adjustments.

So I can very quickly go through them. I mean, obviously, the -- we drive new contract provision, which you mentioned, I mean, we do absolutely expect to be successful in litigation.

But -- that is -- that won't 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 being cash because it's a provision for settlements. On the intangibles, that's noncash write-down and the restructuring cost is mainly -- that is mainly cash.

That is mainly cash. 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 has now gone. It's not a cash -- it's not -- the debt has disappeared effectively.

And Gerald, on the West Midlands depots. One is a depot 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 garage and a bit of land.

It sounds like it was in the books [indiscernible].

Yes.

Yes. A little bit more than that.

But...

There was no write-down was there?

No, no. We made a profit of [ GBP 4 million ].

I think it was in the books, it was about [ GBP 7 million ] was in the books.

Muneeba Kayani, Bank of America. So firstly, just on your guidance, the low end implies a decline in profits and EBIT.

So can you explain how you've thought about that in 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 Alsa for '26 as you've thought about it?

Yes. I'll give -- I might ask Paco for some help on the second one.

But for the first question, we've taken a view on the guidance for next year. We felt it was right to start at the more or less where we entered this year, I guess, 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, which has been a constant theme in the past is where we give guidance and then miss it.

So we want to give content that we're very firmly believe that we can achieve. And then on the margins.

On the margins, Alsa had an extraordinarily strong performance this year. And again, maintaining that performance, and there are some challenges, for example, in Morocco, we've just discussed.

So making sure that we can 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 Alsa.

I don't know whether you have anything to add?

Yes. Yes.

Okay. Of course, I said in the presentation that 14% is unbelievable.

It's something that even if you have asked me 1 year ago, I would say that's very, very difficult to achieve 14%. What I can say is the trend in Alsa that we are growing in terms of revenue through business as usual, passengers that are growing even 2 digits, thanks to a lot of things.

But also because we are winning new contracts, for example, that figure is not included the contract or it's not included in 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 is that we are still growing. There is room for improvement in terms of revenue, in terms of passengers, even in terms of profit if you are not obsessed that I need to reach 14% of margin, I'm obsessed that we need to keep growing in all the opportunities we have.

If the margin is 12%, it's fine for me. If the margin is 20% much with it.

I think you might think we're a bit cautious. I think -- we think by being open and realistic 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 totally failing and failing to hit guidance year-on-year. I don't think that's the best way to go.

And if I may ask a third question on the Qiddiya 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?

Well, my experience you know that we run the 3 contracts in Middle East, 2 in Saudi and 1 in Bahrain. This Qiddiya project, this is a fact we were awarded, and we need to start in 45 days after the sign 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 -- and we have been asked the time line day to ask 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 #1 because it's not a risk contract.

It's a gross cost. So it's -- so if I have to bet, I would say that it's something that is going to happen quite quickly.

Jack Cummings at Berenberg. Three questions, please.

The first one is just on 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 the business in what divisions? And the second is on the pipeline.

Obviously, you 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 2.7x 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 3 to 6 when North America School Bus comes out and then full? Just any more color there would be great.

I'll do the corporate glue 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 GEC, our group 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.

Attending these big corporates where we've all worked before, they lose -- their nimbleness goes. And the slower they are on making decisions and getting bogged down, 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. And this is danger, by being so pretty slow, you can miss such a lot by being too careful.

We've got this governance. 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 that we are now, as Mobico running 12 countries. If you compare 12 countries with our main competitors in the Champion 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 releasing the exact pipeline.

But it also is a fact that we submit roughly 30, 3-0, bidding process in a year. I would say less than half in Spain.

This is the line of their share, but more than 50% out of Spain in the other 11 countries that we run, we are preparing something too. But not only that, we are also having a look or -- not footprint, but some researches and some ongoing negotiations with at least 5 more countries where we are not in at the moment.

So let me say that I'm not going to say you the opportunity because they are competitors. But I can assure you that we have a lot of opportunity.

I'm not sharing -- I'm not sure that we're going to win all of them. You know that the ratio of winning contract is about 30%, but you can imagine that if we have this size of opportunities, I don't know, 1, 2, 3, we will win, I hope.

If not, it has to fire me.

Brian, can you do the cost stuff?

Just in terms of cost savings, so GBP 75 million, that is spread right across the group. Head office is -- I mean, just in very rough terms, there's around GBP 15 million at head office.

The big focus, as we've mentioned in really all the presentations has been on U.K. Coach, which is about [ GBP 25 million ] and then it's [ GBP 10 million ] out of the other divisions.

So Germany, Alsa and WeDriveU. So -- 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 obviously, the covenant ratio, but probably in the 3s.

But I'm probably getting stared now, I'm not supposed to say. So it will be in 3 excluding Germany, with Germany, and that again, depends on accounting, it would be lower.

And by the year-end, it will be below 3.

Questions, guys?

Ruairi Cullinane, RBC. The first question on Alsa concession renewal.

So what percentage of Alsa's revenues are up for renewal in full year '27? Is there anything else coming in the years after that?

If you could even 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 will be GBP 8 million of utilization from the WeDriveU 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?

Yes, I'll leave it at that.

Okay. Thanks, Ruairi.

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

Yes. Well, the franchise process is ongoing.

This -- it's true that it has been a general delay but it's something, for example, right now, there is 1 or 2 contracts on the table. We are not incumbent, but in Spain, we have -- in March, it's -- we need to submit at least 2 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 long haul 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, but it's something that is happening.

And of course, we haven't lost a single contract in long haul in the history in Spain. And as I show the revenue of long haul is 17% of the company is a good margin.

And of course, after a bidding process you usually lose a bit of margins, but 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. So 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 organization to us, political organization and they have got a lot of people who they report to, including their elected members and offices 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 profit-making contract.

And we're also changing the basis of our profit-making contract to gross costs rather than net cost, and that takes away a lot of revenue risk. All, 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.

I think the important one is when you put the 3 contracts together, the cash leakage is going to stop. That's the intention.

And Brian, on provisions and stuff?

Well, I think only the 2 provisions. So on WMATA, it can be GBP 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.

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'll be 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.

Thank you.