FirstGroup : Introduction

FirstGroup plc

Annual Report and Accounts 2024

Introduction	Strategic report	Governance report	Financial statements

We are FirstGroup

FirstGroup is a leading private sector provider of public transport. We provide easy and convenient mobility, improving quality of life by connecting people and communities. Our services are a vital part of society, transporting customers for business, education, health, social and leisure purposes. Our businesses are

at the heart of our communities, and the services

we provide also support the delivery of wider economic, social and environmental goals.

Introduction

1. FY 2024 highlights

1. At a glance

Strategic report

1. Chairman's statement

1. How our markets work

1. Our business model
2. Chief Executive Officer's review

1. Chief Executive Officer's Q&A

1. Our strategic framework

1. Key performance indicators

1. Business review

1. Financial review

1. Responsible business

1. Climate-relatedfinancial disclosures

1. Risk management

1. Viability and going concern

1. Our stakeholders

1. Section 172 statement

FirstGroup Annual Report and Accounts 2024

Governance report

1. Corporate Governance report
2. Governance at a glance

106 Board

1. Nomination Committee report

1. Audit Committee report

1. Responsible Business Committee report
2. Remuneration Committee report

158 Directors' report and additional disclosures

161 Statement of Directors' responsibilities

Financial statements

1. Independent auditor's report

1. Consolidated income statement

1. Consolidated statement of comprehensive income
2. Consolidated balance sheet
3. Consolidated statement of changes in equity
4. Consolidated cash flow statement

177 Notes to the consolidated financial statements

1. Group financial summary

1. Company balance sheet
2. Company statement of changes in equity

256 Notes to the Company financial statements

1. Shareholder information

1. Glossary

Introduction	Strategic report	Governance report	Financial statements

Highlights of the year

Material increase in Group profit driven by continued progress in both

First Bus and First Rail further underpinning the Group's strong balance sheet.

FirstGroup Annual Report and Accounts 2024

1

Successful execution of the Group's strategy

Read more on page 17

We have made considerable progress in our financial

Continued focus on operational delivery and driving modal shift

• First Bus on track to achieve
  10% adjusted operating profit margin having grown
  to 9.4% in H2 2024
• West Coast Partnership awarded National Rail Contract to October 2032 with core three-year term
• Lumo has now carried more than 2.5m passengers since October 2021 launch and added 14% more capacity over the last year

Enhancing the Group's sustainability credentials and accelerating decarbonisation in First Bus

• Landmark strategic joint venture with Hitachi, Green Hire Purchase Finance Facility and successful applications for £16m ZEBRA 2 co-funding during the year
• c.300 electric buses delivered in FY 2024 and more than 300 charger outlets installed
• Great Western Railway conducting industry-firstfast-charge battery-only train trial
• FirstGroup joined United Nations Global Compact and First Bus achieved Real Living Wage employer status

Further growth and diversification of the Group's portfolio

• York Pullman acquisition and new Adjacent Services contracts in First Bus
• Formal applications submitted for two new open access operations, the extension of some of Lumo's services to Glasgow, and for additional paths on Hull Trains and Lumo
• First Rail awarded TfL London Cable Car contract and qualified to bid for Elizabeth Line contract

and operational performance in FY 2024 as we continue to transform and grow our leading First Bus and First Rail businesses. This is testament

to the resilience and capability of our people across the Group and leaves us well positioned to grow and create further value for all our stakeholders.

Graham Sutherland

Chief Executive Officer

Introduction	Strategic report	Governance report	Financial statements	FirstGroup Annual Report and Accounts 2024	2

Highlights of the year continued

Financial highlights

Group revenue	Dividend per share
Continuing operations	5.5p
£4,715.1m	FY 2023: 3.8p
FY 2023: £4,755.0

Performance summary

		FY 2024 (£m)		FY 2023 1(£m)
	Cont.	Disc.	Total	Cont.	Disc.	Total
Revenue	4,715.1	-	4,715.1	4,755.0	4.0	4,759.0
Adjusted1 operating profit/(loss)	204.3	(1.9)	202.4	161.0	(6.6)	154.4
Adjusted operating profit margin	4.3%		4.3%	3.4%		3.2%
Adjusted profit/(loss) before tax	139.0	(2.2)	136.8	104.2	(6.3)	97.9
Adjusted EPS2	16.7p	(0.3)p	16.4p	10.9p	(0.9)p	11.6p
Dividend per share			5.5p			3.8p
Adjusted net cash3			64.1			109.9

Group adjusted operating profit

Continuing operations

£204.3m

FY 2023: £161.0m

Significant increase in Group adjusted operating profit to £204.3m (FY 2023: £161.0m) includes extra week

of trading and receipt of higher than accrued FY 2023 variable fees in First Rail (c.£13m)

Share buyback

Continuing operations

c.£117.6m

c.£117.6m returned to shareholders via buyback programmes in FY 2024 (£19.3m remains to be completed as at 10 June 2024)

Statutory

		FY 2024 (£m)			FY 2023 (£m)
Statutory	Cont.	Disc.	Total	Cont.	Disc.	Total
Revenue	4,715.1	-	4,715.1	4,755.0	4.0	4,759.0
LGPS pension settlement and	(146.9)	-	(146.9)
related charges	-	-	-
Other operating (costs)/income	(4,521.7)	(5.3)	(4,527.0)	(4,601.1)	27.3	(4,573.8)
Operating profit/(loss)	46.5	(5.3)	41.2	153.9	31.3	185.2
(Loss)/profit before tax			(24.4)			128.7
Total comprehensive income/			49.0
(loss) for the period					(7.4)
EPS2			(2.4)p			11.8p
Net debt			1,144.8			1,269.1

Adjusted earnings per share	Adjusted year end net cash
Continuing operations	Continuing operations
16.7p	£64.1m
FY 2023: 11.6p	FY 2023: £109.9m
Adjusted EPS of 16.7p (FY 2023: 11.6p)	Strong balance sheet position
enhanced by repurchases of 80.6m shares
during FY 2024

• Bonds, bank and other debt

net of (cash)	(313.7)	(479.5)
- IFRS 16 lease liabilities	1,458.5	1,748.6

'Cont.' refers to the Continuing operations comprising First Bus, First Rail, and Group items. 'Disc.' refers to discontinued operations, being First Student, First Transit and Greyhound US.

1. 'Adjusted earnings' are shown before net adjusting items and excludes IFRS 16 impacts in First Rail management fee operations. For definitions of alternative performance measures and other key terms, see the definitions section on page 262.
2. 'Adjusted EPS' and EPS based on weighted average number of shares in the period of 662.9m (FY 2023: 739.8m) reflecting the current year and prior year share buybacks.
3. 'Adjusted net cash' comprises bonds, bank and other debt net of free cash (i.e. excludes IFRS 16 lease liabilities and ring-fenced cash).

FY 2024 statutory operating loss before tax of £(24.4)m includes predominantly non-cash charges of £146.9m relating to the Group's termination of its participation in two Local Government Pension Schemes during the period with an offsetting £161.0m gain in the Condensed Consolidated Statement of Comprehensive Income.

Introduction	Strategic report

FirstGroup

Who we are

FirstGroup is a leading private sector provider of public transport. We have

a diverse portfolio of businesses including bus, rail, coach and tram operations that provide easy and convenient mobility, improving quality of life by connecting people and communities.

Our purpose

We provide efficient, reliable, safe and increasingly sustainable transport links that connect communities, and our services are critical to ensuring local economies are vibrant and robust.

Our strategy

FirstGroup's four strategic pillars will support us to drive value and sustainable growth and lead the way in our sector.

Read more on page 17

Business split

Revenue	Adjusted operating
(as % of Group)	profit (as % of Group)

	First Bus	21%				First Bus	37%
	First Rail	79%				First Rail	63%

Governance report	Financial statements			FirstGroup Annual Report and Accounts 2024	3
						Find out more about
First Bus	First Rail			FirstGroup online
First Bus is one of the largest regional bus	First Rail is one of the largest UK operators for			Avanti West Coast (Avanti)
companies in the UK, carrying more than a million	nearly three decades, with experience in running
passengers a day. We serve more than 20% of the	all types of passenger rail services. We have		Great Western Railway (GWR)
population in the UK with our local bus services.	a track record of working successfully with a		South Western Railway (SWR)
We are a leading operator in the majority of our	wide range of partners under various types of			Hull Trains
local areas, including major urban centres such	contracts, as well as delivering significant rail			Lumo
as Glasgow, Bristol and Leeds. As well as	infrastructure projects. We have three Department			First Bus operations
commercial networks, we also run buses on	for Transport (DfT)-contracted operations: West
behalf of organisations ranging from schools	Coast Partnership (WCP) which includes Avanti
to distribution centres and major	West Coast (Avanti), Great Western Railway
construction sites.		(GWR), South Western Railway (SWR), and two
Read more on page 34	open access operations: Hull Trains and Lumo.
We operate London Trams on behalf of Transport
1.14m	c.4,800
for London (TfL) and Heathrow Express (HEX)
		on behalf of Heathrow Airport.
passenger	buses	Read more on page 37
750,300	c.3,700
journeys a day
50	c.13,500	passenger	locomotives and
depots	employees	journeys a day	rail carriages			Aberdeen
404	c.15,500
Approximate First Bus market share	Glasgow	Edinburgh
of UK market outside of London (%)	stations	employees

Passenger revenue base

of First Rail operations (%)

Newcastle

Belfast

First Bus

20%

Bradford

York

Others

80%

Hull

Galway

Dublin

Leeds

Manchester

Leisure

63%

Sheffield

Business

18%

Crewe

Stoke-on-Trent

Commuter

19%

Leicester

Norwich

Worcester

Birmingham

Cork

Ipswich

Oxford

glance

Swansea

At a

Slough

Chelmsford

Cardiff

Bristol

London

Basildon

Weston-super-Mare

Bath

Southampton

Weymouth

Portsmouth

Penzance

Truro

Plymouth