Driving mobility solutions
Annual Report 2021

Who we are:
National Express Group is a leading
international transport provider,
diversified internationally and by
business area
What we want to do and why:
Our vision is to be the world’s
premiershared mobility operator
Our purpose is to lead the modal
shiftfrom cars to mass transit
How we will do this:
We will deliver our vision and
purposebyfocusing on five
distinctcustomer propositions
whichprovide mobility solutions
Strategic Report
1 Highlights
2 At a glance
4 Chairman’s statement
6 Our business model
8 A rapidly changing market
10 Our strategy and priorities
12 Chief Executive Officer’s statement
15 Financial review
21 Divisional review: ALSA
23 Divisional review: North America
25 Divisional review: UK & Germany
28 Key performance indicators
30 ESG disclosure
35 TCFD disclosure
40 Stakeholders
42 Risk management
44 Principal risks and uncertainties
48 Viability Statement
49 Non-financial information statement
Corporate Governance
50 Introduction to corporate governance
52 Board leadership and
Companypurpose
55 Board activity in 2021
56 Section 172(1) statement
60 Purpose, Values and Culture
62 Stakeholder relations
67 Corporate governance framework
68 Division of responsibilities
71 Nominations Committee Report
78 Audit Committee Report
84 Safety & Environment
CommitteeReport
89 Directors’ Remuneration Report
109 Directors’ report
114 Directors’ responsibilities
Financial Statements
115 Independent Auditor’s Report
123 Group Income Statement
124 Group Statement of
ComprehensiveIncome
125 Group Balance Sheet
126 Group Statement of Changes in Equity
128 Group Statement of Cash Flows
129 Notes to the Consolidated Accounts
205 Company Balance Sheet
206 Company Statement of Changes
inEquity
207 Notes to the Company Accounts
Additional Information
220 Five Year Summary
221 Environmental performance
224 Shareholder information
225 Definitions and supporting information
226 Alternative performance measures
Key contacts and advisors
What’s inside Our purpose

Highlights
Summary financials
IFRS basis Underlying basis
2021
£m
2020
£m
2021
£m
2020
£m
Revenue 2,170.3 1,955.9 2,170.3 1,955.9
Operating Profit/(Loss) (36.2) (381.4) 87.0 (50.8)
Profit/(Loss) before tax (84.9) (444.7) 39.7 (106.1)
Profit/(Loss) for the year (77.9) (326.7) 26.9 (76.8)
Basic earnings/(loss) per share (pence) (16.8) (57.9) 0.1 (14.6)
Net cash flow from operating activities (170.9) (114.0)
EBITDA 300.0 186.6
Free cash flow 123.4 (196.0)
Covenant net debt 866.6 782.0
To supplement IFRS reporting, we present our results on an Underlying basis which shows the performance of the business before separately disclosed items, which principally comprise
amortisation of intangibles for acquired businesses, certain costs arising as a direct consequence of the pandemic and restructuring costs. Treatment as a separately disclosed item provides
users of the accounts with additional useful information to assess the year-on-year trading performance of the Group. Further details relating to separately disclosed items are provided on
pages 148 to 149 in note 5 to the Financial Statements. All definitions of alternative performance measures used throughout the Annual Report are included on pages 226 to 228.
Financial highlights
Revenue
£2,170m
2020: £1,956m
Underlying Operating
Profit/(Loss)
£87.0m
2020: £(50.8)m
Underlying Profit/
(Loss) before tax
£39.7m
2020: £(106.1)m
EBITDA
£300.0m
2020: £186.6m
Statutory operating loss
for the year
£(36.2)m
2020: £(381.4)m
Statutory loss
for the year
£(77.9)m
2020: £(326.7)m
Free cash flow
£123.4m
2020: £(196.0)m
Covenant net debt
£867m
2020: £782m
National Express Group PLC Annual Report 2021
1
Strategic Report Corporate Governance Financial Statements Additional Information

At a glance
The group at-a-glance
44,500
employees
11
*
countries
* We will begin operations in Portugal in 2022
50
cities
792m
annual passenger journeys
1/2bn
car journeys avoided
27,000
vehicles operated
National Express at a glance
What we do:
We own and lease buses, coaches and
trains which we use to deliver local,
regional, national and international
transportation services.
All vehicles are driven and maintained
toour global standards.
In Spain, Morocco, North America and
Germany, services are run typically under
an exclusive concession. In the UK, our
bus and coach servicesare unregulated.
Where we operate:
We hold the largest market share
forlong haulcoach transport in
bothSpain and the UK,andarethe
second largest school bus provider
inNorth America. We are the largest
busoperator inMorocco.
National Express Group PLC Annual Report 2021
2

1
5
2
3
7
4
8
6
Revenue breakdown by business line
Multi-modal
Revenue breakdown by territory
5
USA
£816m
2020: £807m
Student transportation
Transitandparatransit
Charterandother
8
Spain
£592m
2020: £459m
Regional/long haul coach
Urban bus
Charter andother
6
Morocco
£115m
2020: £87m
Urban bus
7
Bahrain*
Urban bus
* Joint venture business reported
through associates
1
Canada
£56m
2020: £62m
Student transportation
Transit and paratransit
Charter and other
2
United Kingdom
and Ireland
£398m
2020: £388m
Regional/long haul coach
Urban bus
Charter and other
3
Germany
£182m
2020: £139m
Rail
4
Switzerland
and France
£12m
2020: £13m
Charter and other
Urban bus
Student
transportation
(
North America
s
chool bus)
Urban bus
(
UK Bus, North
A
merica
t
ransit, ALSA)
Regional/long
haul coach
(
ALSA regional and
l
ong haul, UK Coach)
Charter and other
(
North America,
A
LSA and UK)
Rail
(
German Rail)
£590m
£789m
£469m
£140m
£182m
Internationally diversified and geographically well-balanced revenues
National Express Group PLC Annual Report 2021
3
Corporate Governance Financial Statements Additional InformationStrategic Report

Chairman’s statement
Sir John Armitt CBE
Chairman
A clear strategy
forgrowth
Dear fellow shareholder
We have a clear vision
andpurpose
2021 has been the year of transition we had
anticipated, with our services beginning
toreturn to pre-Covid levels across all
theterritories in which we operate.
Before I go any further, I would like
totakethis opportunity to extend
mysincere thanks to every one of our
colleagues across the Group who have
driven the results outlined in this report.
Public transport is an increasingly
dynamicsector and there are many
excitingopportunities resulting from
demographic changes. Governments
around the world are realising the role
public transport can and must play in
creating cleaner, greener, more liveable
andsustainable places and the critical
roleit can play in driving social mobility.
This year, we launched our new Evolve
strategy to ensure we can capitalise on
these opportunities. In it we outline a clear
vision, to be the world’s premier shared
mobility operator and purpose, to lead
modal shift from cars to mass transit.
I believe it’s a vision and purpose that is
both motivating and engaging and has
more relevance today than ever before.
As shareholders will be aware, on
14 December 2021 the Company
announced that it had made an offer to
effect the combination of the Company
withStagecoach. However, on 9 March
2022, the date this Report was approved,
Stagecoach announced that it had
received a competing offer which its
boardof directors intends to recommend.
Accordingly and as at 9 March 2022,
theCompany’s Boardis considering
itsoptions. However, as I explain above
the Company’s Evolve strategy gives
usaclear framework and direction for
capitalising on opportunities for growth
and this strategy is not dependent on
thecombination.
National Express Group PLC Annual Report 2021
4

Reinvigorating our
leadershipteam
Under the leadership of Ignacio Garat,
weare reinvigorated and well positioned
tounlock the opportunities before us.
Delivering on the six outcomes we
outlinein Evolve, which we introduced
tothe capital markets in October,
providesus with both clarity and direction
and will further distinguish us as a true
leader in our industry. We have begun a
comprehensive cascade of the strategy
internally to ensure that every oneof
ourcolleagues understands not only our
vision and purpose but the role they can
play in delivery. I am pleased to say that
we are already seeing the strategy gain
momentum and I am confident that it
willensure we are well positioned for
future growth.
Leading on decarbonisation
We believe that the biggest positive
impactwecan have on the environment
isto tempt people out of their cars and
onto ourvehicles. But we understand
thatwe must go further than this to truly
take environmental leadership and this
year weannounced new targets for
thedecarbonisation of our entire fleet,
buildingon the targets previously
announced for ourfleet in the UK.
We announced a Group net zero target
forScope 1 and 2 emissions, by 2040.
We have incorporated the Task Force on
Climate Related Disclosures (TCFD) fully
into reporting this year and the Board was
excitedto see that the extensive analysis
hasconfirmed our view of the considerable
opportunities arising from modal shift.
In the UK, the Prime Minister launched
thenew UK Bus Strategy from one
ofourdepots in the West Midlands.
Working closely withgovernments and
customers will be key to the transition to
zero emission vehicles (ZEVs) and I am
very pleased to see us leading the way
here. But it isn’t just about decarbonising
and driving down greenhouse gas (GHG)
emissions. As noted above, we recognise
that modal shift has many societal benefits
and, by investing in state-of-the-art ZEVs,
we have the opportunity to engage with
awider rangeof customers and passengers
whotraditionally would not have considered
public transport. Clean, reliable, accessible
and affordable mobility solutions will have
a crucial role toplay in sustainable cities;
in driving social mobility and creating places
that people want to live in. Increasingly,
public authorities are turning to us as a
trusted partner to work with them on
rethinking thecities and towns of the future.
Employer of choice
As well as our determination to take
aleading role on the environment and
putting sustainability goals at the heart of
our business, we are taking decisive action
to ensure we become the employer of
choice. Building on strong foundations,
such as our long-standing commitment
topaying at least the real Living Wage, we
have focused during the year on inclusivity
and diversity, driving action plans through
our global and regional diversity councils.
We have more initiatives planned in the
coming year that will deliver our people
strategy. As a people-led business it is
essential that we are seen as the employer
of choice, particularly at a time when
competition for talent has never been
greater. Only by creating an environment
where people want to join and crucially
want to stay with us will webe able to
deliver for our customers and achieve
ourvision and purpose.
2021 performance
As I said at the outset of this statement,
the last year has been one of transition
andthis has been reflected in our financial
performance. I am pleased to say that
theGroup has delivered Underlying Profit
at the top end of our expectations along
with significant cash generation and an
improving Balance Sheet. Revenue has
grown in every division accompanied
byasignificant improvement in profit
performance. We have seen a strong
recovery in demand for our services,
carrying nearly 800 million passengers
inthe year, a testament to the key role
thatour business plays in the lives of the
people in the towns and cities we serve.
We continue to be grateful for the ongoing
support of our customers, governments
and public authorities during 2021.
We have continued with our growth
strategy, winning new business while
alsosuccessfully mobilising new
contracts, most notably, Casablanca
ourlargest contract in Morocco.
At the same time, we have maintained
atight grip on cost control, with the
benefitof cost actions taken in 2020
flowing through to the improved financial
performance in the year. The significantly
improved financial performance provides
astrong foundation for further growth in
the coming year.
As a Board, we are mindful of how
important dividends are to many of
ourshareholders, and as I said in
myChairman’s statement last year,
wearecommitted to reinstating dividend
payments when performance recovers.
With this in mind, it is the Board’s intention
to reinstate the dividend alongside our
fullyear results in 2022.
The year ahead
The year ahead is an exciting one for
theGroup, but there will be challenges
forour people to overcome as we build
back services in line with the removal
ofmobility restrictions and challenges
geopolitically given the recent events
inUkraine.
We have seen that customer demand for
our services rebounds strongly when
pandemic restrictions are lifted, and we
know that the macro trends are inour
favour. Under Ignacio’s leadership, and
with ourpurpose and vision guiding the
way, Iexpect to see the current trajectory
of improving performance continue as we
execute Evolve.
Sir John Armitt CBE
Chairman
9 March 2022
There has never been a more exciting time for our
sector which has a crucial role to play in tackling
climate change and creating sustainable cities”
National Express Group PLC Annual Report 2021
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Strategic Report Corporate Governance Financial Statements Additional Information

1
2
3
Our business model
An attractive
investmentcase
We have five compelling customer propositions to
leverage the growth opportunity from modal shift
1. Reinvigorate public transport: grow use of public transport in cities
suffering congestion by building partnerships with stakeholders who
wantsustainable solutions.
2. Multi-modal expansion: build more modal capability and city hubs
fromexisting locations where we already have a physical footprint.
3. Operational transformation: application of our processes and
know-howtodriveefficiency, operational improvement and lower costs.
4. Fill the transit gap: encouraging modal shift away from private cars
inareasthat arenot well served by public mass transit.
5. Consolidate & compound: consolidate fragmented markets and
create‘atscale’ operations todrive operating efficiencies and better
customersolutions.
+ Read more about our Evolve strategy on pages 10-11
We have long-term, structural growth
opportunities from modal shift to public transport
Modal shift is the single most important driver of reduced emissions
andcongestion and Government policy around the world is increasingly
committed to public transport – promoting modal shift away from cars
ontobuses, driving passenger growth for years to come.
+ Read more about the rapidly changing market onpages8-9
We are the best-in-class operator
With a focus on continuous improvement in everything we do, we will be:
− The most reliable: leading the industry in reliability by striving for ever
increasing levelsof punctuality, and driving down cancelled services
andlost miles
− The safest: continually driving down accidents
− The environmental leader: leading the transition to zero emission vehicles
− The highest rated by our customers
− The employer of choice: a high performance culture that attracts and
retains thebestpeople
All underpinned by sophisticated technology and passionate and
committedteams.
+ Read more about our KPIs on pages 28-29
National Express Group PLC Annual Report 2021
6

4
5
* Five years to 2019 – prior to Covid-19
Growing revenue…
Strong organic growth
potential through modal
shift opportunity as well
as attractive pipeline
ofnew contract and
M&Aopportunities
converting
ittocash…
Industry-leading margins
driven by a focus on
operational excellence.
Diversity and scale are
animportant factor in
managing indirect costs,
enabling us to optimise
cost and quality across
the Group’s supply base
and delivering
cash flow…
The Group delivered
anaverage of over
£150 million of free cash
flow each year prior to
thepandemic and is
targeting £1.25 billion
offree cash flow from
2022 to 2027 inclusive
to fund returns
and investment
We invest cash back
intothe operations to
grow, having invested
over£800 million*
bothorganically and
inorganically since 2015.
In addition, over the five
years prior to 2020, the
Group returned £327 million*
through dividends
* Five years to 2019 – prior to Covid-19
We are diversified and balanced
We hold market-leading positions where we choose to competeand
witharound half of Group revenues anchored inlong-term contracts.
We hold the largest market share for long haul coach transport inboth
Spainand the UK, and are the second largest school busprovider in
NorthAmerica. We are the largest bus operator inMorocco.
+ Read more on pages 2-3
We have a strong track record of delivering strong financial outcomes
In the 10 years prior to the pandemic, National Express delivered a revenue and profit compound annual growth
rate of 6% and 7% respectively.
Delivering for our stakeholders
Through this approach, we deliver for all our stakeholder groups.
+ Read more about how we engage with our stakeholders on pages 40-41
We are taking environmental leadership
Our ambition is to be the world’s greenest mass transit operator.
To deliver our ambition we target:
− Industry leadership on the shift to solely zero emission vehicles
− UK Bus by 2030
− UK Coach and ALSA bus by 2035
− ALSA coach, Morocco and North America by 2040
− We have committed to never buy another diesel bus in the UK
− Emissions targets are built into senior management incentives
+ Read more about our environment work on pages 30-39
+ For more information
pleasesee page 30
Sustainalytics: Rated in 2nd percentile of
alltransport companies (out of 349) and in
5thpercentile of over 14,000 companies
inSustainalytics global universe
MSCI*: November 2021, MSCI rated AA,
thesecond possible highest rating, with
anindustry-adjusted score of 8.5 out of 10
National Express is a constituent
oftheFTSE4Good Index Series
We are pleased that our work has been recognised:
6
National Express Group PLC Annual Report 2021
7
Strategic Report Corporate Governance Financial Statements Additional Information

The case for modal shift
During the pandemic, we saw a shift in mobility back to
the private car. If this were to continue as we come back
tonormal, we would see over 400 billion passenger
kilometres per year in North America and the UK alone.
Demand for transport is expected to increase by 30%
by2030, putting more pressure on roads and increasing
congestion and air pollution. At the same time, the world
needs to cut carbon emissions to achieve our shared
goals. Private car transport is the primary driver of
carbon emissions. Pre-pandemic, cars generated
70%ofsurface transport emissions in the EU.
The fundamental issues of congestion and population
growth will simply not go away. Crowded, congested,
polluted streets are not places where anyone wants
tolive.
As we transition to a zero emission vehicle future, a
passenger taking a journey on an electric bus, rather
thanan electric car, can save well over 10 times their
totallifetime carbon emissions, and that bus can take
70carsoff the road, significantly reducing congestion
andfreeing up liveable spaces.
Public transport isthesolution
Public transport is the lifeblood of a successful
economy. It provides an essential service for
accesstowork, education and health care.
Modal shift from private cars to public transport
remains the single most important driver of reduced
emissions and congestion. Governments around the
world are increasingly aware of this and are driving
policy around greater use of public transport and
funding ZEVs to meet their decarbonisation and clean
air targets. Progressive partnerships between cities,
businesses and passengers can deliver connected,
reliable, safe, clean transport networks that are the
backbone of liveable cities.
The cost of buses is 25% of that of car ownership.
Affordable, clean, safe and accessible transport
provides connectivity and mobility to everyone,
opening up opportunities, driving productivity and
increasing access to health care, education and jobs.
Modal shift
is essential
Modern diesel cars each
producemore nitrogen
dioxidethan a modern
dieselbusfull ofpassengers
7 million
deaths annually caused
byairpollution
World Health Organization
National Express Group PLC Annual Report 2021
8
A rapidly changing market

Supportive Governmentpolicy
Government support for public transport is better
thanever with policies and investment to encourage
modal shift out of private cars.
In the UK: the recently unveiled National Bus Strategy
will provide £3 billion of investment, including support
for at least 4,000 more zero emission buses.
In the US: there is a $1.2 trillion infrastructure package
including $39 billion of new investment to modernise
transport and improve accessibility for the elderly
andfor people with disabilities.
In Spain: €13 billion of investment is planned by the
Government to boost the transition to electric vehicles.
Pre-pandemic, cars generated 70% of EU surface
transport emissions. Modal shift is key to decarbonisation
and this is going to be a hugely positive factor for
public transport in the coming years.
And it’s not just governments that will be looking to
tackle climate change. Environmentally-conscious
employers will also be looking to zero emission
corporate shuttle services to reduce the emissions
from the employees commuting into work.
44%
of bus trips are for work or
education compared with
27%ofsolocar journeys
26 million
students in the USA rely on the
school bus, saving 17million cars
fromjoining the daily commute
25 billion
kilograms of carbon
emissionsavoided
70x
students 70x more likely
toarrivesafely by bus
thantravelbyprivate car
10x
Per mile, bus travel is 10x
safer than driving a car
70%
of EU surface transport
emissions generated by
cars,pre-pandemic
Modal shift will drive growth
DfT’s ‘Passenger transport by mode’ study shows
amodal shift of 1% from car to bus would result
inanincrease of 23% bus passenger mileage.
The UK Climate Change Committee predicts that
9-12% of car journeys could be switched to bus
by2030, with 17-24% being switched by 2050.
A 20% increase in bus journeys per 1% modal
shiftwould drive an increase in bus passenger
journeys of 180-240% by 2030.
180-240%
increase in bus passenger
journeys by 2030
National Express Group PLC Annual Report 2021
9
Strategic Report Corporate Governance Financial Statements Additional Information

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Vision:
The world’s
premier shared
mobility operator
Purpose:
To lead the modal
shift from cars to
mass transit
Evolve – our strategy
forgrowth
in summary
Digitally enabled
Strong financial returns
We will succeed
inour customer
propositions
byfocusing on
fiveconsistent
outcomes
We deliver this
through five
customer
propositions
We have a clear vision and purpose, which drives
everything we do: to be the world’s premier
shared mobility operator; and to lead the modal
shift from cars to mass transit.
National Express Group PLC Annual Report 2021
10
Our strategy and priorities

These propositions are underpinned by our focused application of technology.
By delivering these outcomes, we will achieve profitable and sustainable growth.
Most
reliable
We will lead the industry in reliability by striving for ever increasing levels of punctuality,
and driving down cancelled services and lost miles.
Safest
We will lead the industry in safety by continually driving down accidents.
Environmental
leader
We will lead the transition to zero emission vehicles.
Most satisfied
customers
Our customers will rate us the highest in the industry.
Employer
of choice
We will embed high performance culture that attracts and retains the best people.
Reinvigorate
public
transport
Grow the use of public transport in cities suffering congestion by building partnerships
with stakeholders who want sustainable solutions.
Multi-modal
expansion
Build more modal capability and city hubs from existing locations where we already
have a physical footprint.
Operational
transformation
Application of our processes and know-how to drive efficiency, operational
improvement and lower costs.
Fill the
transitgap
Encouraging modal shift away from private cars in areas that are not well served by
public mass transit.
Consolidate
&compound
Consolidate fragmented markets and create ‘at scale’ operations to drive operating
efficiencies and better customer solutions.
National Express Group PLC Annual Report 2021
11
Strategic Report Corporate Governance Financial Statements Additional Information

Chief Executive Officer’s statement
Maintaining
momentum
I am delighted to report our full year
resultsfor 2021 which demonstrated
continued sequential improvement, and
delivered financial results at the top end
ofexpectations. Indeed, we have delivered
asteadily improving performance in
revenue, EBITDA, operating profit and
cash over the year, with the result that:
− revenue rose by 15.5% in constant
currency to £2.17 billion;
− EBITDA rose by 60.8% to £300.0 million,
an improvement of £113.4 million
over2020;
− Underlying Operating Profit improved
by£137.8 million to £87.0 million;
− Underlying PBT improved by
£145.8 million to £39.7 million;
− statutory loss before tax improved
by£359.8 million to £84.9 million; and
− we delivered £123.4 million of free cash
flow in the year, an improvement of
nearly £320 million year on year, fuelling
the rapid reduction in Gearing from
6.6times at the end of 2020 to 3.6 times.
This performance has been driven by a
number of factors. We have seen strong
recovery in demand for our services as
economies emerged from lockdown
restrictions, with vaccination programmes
allowing economies to reopen further and
mobility increasing. We have benefitted
from the management actions taken
in2020, with around £100 million of
annualised structural costs permanently
removed across the business. The ongoing
support of customers and authorities has
also contributed towards the improved
performance in the year.
I am extremely proud of our colleagues
across the Group who have continued to
navigate through what has been another
complex stop-start year, always ready to
adjust to the varying restrictions in place in
each of the territories in which we operate.
I am also proud of the strong relationships
with our customers across every division
and how we have worked together
toprovide service as far as possible,
allowingfor the restrictions in place.
Ignacio Garat
Group Chief
Executive Officer
Evolve strategy
During the pandemic we saw a short-term
shift in transport use back to the private
car. If this were to continue as growth
normalises, we would see over 400 billion
more passenger kilometres per year in
North America and the UK alone. Over and
above this, demand for transport is
expected to increase by up to 30% by
2030, putting more pressure on roads, and
increasing congestion and air pollution.
At the same time, the world needs to cut
carbon emissions to achieve our shared
climate goals. Private cars are the primary
driver of carbon emissions: pre-pandemic,
cars generated 70% of surface transport
emissions in the EU. Modern diesel cars
each produce more nitrogen dioxide than
a modern diesel bus full of passengers.
More importantly, as we transition to a
Zero Emission Vehicle future, a passenger
taking a journey on an electric bus rather
than in an electric car can save well over
10times total lifetime carbon emissions,
and that bus can take 70 cars off the
road,significantly reducing congestion
and freeing up liveable spaces.
Modal shift from private cars to public
transport therefore remains the single
most important driver of reduced
emissions and congestion. Governments
around the world are increasingly aware
ofthis and are adjusting policy towards
greater use of public transport to meet
their decarbonisation and clean air targets.
In 2021 we launched our Evolve strategy,
rooted in our vision to be the world’s
premier shared mobility operator with
leading levels of safety, reliability and
environmental standards that customers
trust and value. This, in turn, is embedded
in our purpose, to lead the modal shift
from cars to shared mobility. A 1% modal
shift from cars to buses would increase
bus passenger journeys by 23% and
Evolve provides clarity in terms of both
thesignificant potential growth ahead
andthe path towards it. At our Capital
Markets Day in October we set ambitious
targets for the years ahead:
− A further £1 billion of revenue growth
by2027 compared with 2022.
− Operating profit margin averaging
around 9% over the coming years, with
more than £100 million of additional
profit in 2027 compared with 2022.
National Express Group PLC Annual Report 2021
12

− Cash conversion averaging over 80%
ayear, with a target to generate at least
£1.25 billion of free cash between 2022
and 2027 inclusive.
Core to Evolve are five compelling
customer propositions, each enabled by
our focused application of technology,
delivering superior outcomes for all our
stakeholders. We have already made
progress in 2021 in each of the five
customer propositions as the examples
below demonstrate.
Reinvigorating public transport:
Rebuilding confidence in the public
transport system by offering high quality
operations that passengers want to use.
In ALSA, we have substantially completed
the mobilisation of Casablanca, our largest
contract in Morocco, with the delivery of
new fleet, transforming quality and the
safety of our customers, as well as
significantly improving opportunities for
social mobility in the city. At the same
time, we have been able to cascade fleet
to other cities to support growth in
services, which in somecities, such as
Tangier, are now running ahead of
pre-pandemic levels. We have also started
the mobilisation of our contracts in
Portugal, where we expect services to
commence in Lisbon in the second quarter
of this year. In the UK, ourpartnership
model with Travel for WestMidlands is
widely recognised at both central and local
government levels for delivering for all
stakeholders. In 2021, our UK Bus
operations have delivered the lowest fares
in England, with innovative and flexible
ticketing options such as contactless
capping, helping to boost growth in
passenger demand and revenue.
Multi-modal expansion: Expanding the
breadth of our product offering, based on
global know-how and local relationships.
In the UK, we expanded our transport
solutions business, launching services
inthe West Midlands, leveraging the
existing infrastructure, thereby extending
our offer to private hire, contract coach
work and a full range of transport solutions
in the region. In Spain, we have connected
passengers in Leon to last-mile services,
with the introduction of bike rental services.
Operational transformation: Driving
growth by delivering more efficient
transport solutions.
In 2021, we rolled out the first phase of
ourquality management process through
the ‘Driving Excellence’ programme in
ourNorth America School Bus business,
standardising and improving a number
ofoperational processes and locking
themin with a new technology platform
ensuring automated flow-through to billing.
By focusing on small and detailed
improvements, we are not only delivering
improved performance for the customer, but
are also eliminating waste and reducing
costs. Once fully implemented, we expect
our ‘Driving Excellence’ programme to
deliver annualised benefitsof $40 million.
In the UK, we havecommenced the
roll-outof an engineering transformation
programme, which has already delivered
a12% reduction in breakdowns versus
2019 and permanent cost savings of over
£1 million a year, through measures such
as more efficient use of parts and data to
identify and address repeat defects.
Fill the transit gap: Helping businesses
and cities transition from the private car
inplaces that are not well served by
existing mass public transit.
We continued to win new contracts
inourNorth American Shuttle business
inthe year, worth around $20 million of
annualised revenue. We successfully
mobilised operations for two new
customers and also extended a large
existing account, which is now providing
the opportunity for us to grow with one
ofour largest customers in other cities
andregions across the USA. In the UK,
ourTransport Solutions business has
wonnew shuttle contracts including
withNEXT and the Ministry of Defence,
aswell as providing team transport for
theinaugural Cricket Hundred tournament.
Consolidate and compound fragmented
markets to bring the benefits of scale
andconsistent service.
In 2021, ALSA acquired an urban bus
business in Granada, building on our
existing urban business in Almeria and
regional services, consolidating our
leadership position in Andalusia. We have
also consolidated our existing business;
for example, the business review in our
North American Transit business driving
the exit from, or significant price increases
on, low margin and loss making contracts
and delivering a significant improvement
inprofitability in the year.
All of this has driven significant progress
across each of the Evolve outcomes in 2021.
The safest
Safety remains a top priority across
thebusiness. In Casablanca, we have
delivered a 48% reduction in at-fault
roadaccidents versus 2019, the year in
which we first started operating services
inthe city. Across ALSA, driver behaviour
and the risk score, as measured by
Lytxthrough deployment of DriveCam
technology, have improved by 50% versus
2019, and by 24% versus 2020. Similarly,
in North America, we have seen a 42%
improvement in driver behaviour/risk
scoreversus 2019 and a 12% improvement
in preventable accidents over the same
period. In the UK, both our Bus and
Coachbusinesses have been re-awarded
afive-star British Safety Council audit.
A 1% modal shift from cars to buses would
increase bus passenger journeys by 23%
andEvolve provides clarity in terms of both
thesignificant potential growth ahead and
thepath towards it.”
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
13

Chief Executive Officer’s statement continued
The most reliable
By being the most reliable, we give
ourselves a competitive edge, driving
customer retention and powering growth.
A prime example of this is the largest
emergency award ever in the German
Railmarket, where two rail contracts
wereawarded to our German rail
operations after the incumbent operator
handed back the services to the Passenger
Transport Authorities (PTAs). This award is
a direct result of the reputation as a trusted
partner and reliableoperator we have built
up over thelast few years with the PTAs.
The environmental leader
Following our previously announced
zeroemission fleet targets for our UK Bus
and Coach businesses (2030 and 2035
respectively), we announced ambitious
targets for a completely zero emission
fleetacross the Group: Spain bus by
2035;Spain coach, Morocco and
NorthAmerica by 2040. The plans
supporting these targets underpin
thefirmcommitment that Group as
awhole will achieve a net zero target
forScope 1 and 2 emissions by 2040.
We have made good progress in 2021,
most notably in our UK Bus operations,
where we have started operating 20
hydrogen buses, in partnership with
Birmingham City Council, with the
ambition to scale up to over 200 buses
next year. As lead operator in the UK’s
firstall-electric city, Coventry, we have
placed orders for the first tranche of
176electric vehicles, with services
startinginearly 2023. In addition, we
havesigned ourfirst ‘availability’ contract
in the UK with Zenobe. This effectively
provides theGroup with ‘ZEVs as a
service’ providing buses and charging
infrastructure without the requirement
forupfront capital expenditure and
withthe availability provider accepting
risktransfer for issues such as battery
performance and charging technology.
This will enable us to transition our fleet
faster than we could otherwise do and
weare aiming to replicate similar
structures in North America and ALSA.
The most satisfied customers
Satisfied customers are less likely to
putcontracts out to tender. In 2021,
ourNorth American business recorded
itshighest ever customer satisfaction
score, with 66% of customers rating our
services as five-star (highly satisfied),
asignificant increase from 55% in 2019.
This record rating is a direct result of the
improvements our teams have delivered
through the ‘Driving Excellence’ programme.
Our best in class rating in Morocco was
key to us winning the contract in Casablanca.
The employer of choice
We remain committed to paying the real
Living Wage or 10% above the national
minimum wage, but our ambition goes
beyond this, to becoming the employer
ofchoice across all our markets. Building
on strong foundations, our refreshed
people strategy will focus on sector-
leading employee engagement;
andcreating a diverse and inclusive
workplace. In 2022 we will undertake
ourfirst consistent global employee
engagement survey that will allow us
totrack our improvement across all of
ourmarkets. In 2021 we have focused
onour diversity, inclusion and wellbeing
agenda, through our D&I Council that
wasestablished in 2019. Initiatives include
unconscious bias training to promote
aninclusive workforce, for example,
intheUK we launched our Stronger
Together Campaign.
Strong financial returns
National Express has always been
focusedon cash generation and return
oninvestment. I am pleased to see the
return to strong free cash generation in
2021 and, as we said at our recent Capital
Markets Day, we expect free cash flow
conversion averaging over 80% a year over
the coming years. Over time, our business
will become more asset-light, and we have
made an important move towards that in
2021 through signing the first of potentially
many ‘availability arrangements’ which
reduce the capital burden on the Group’s
balance sheet as well as removing the
residual value and technology change risk.
Our capital allocation discipline remains
unchanged: we will utilise the Group’s
strong free cash flow generation to invest
for growth, targeting investments that
deliver 15% returns; to pay a dividend,
withtargeted cover of at least 2 times;
andto maintain Gearing in a range of 1.5
to2 times. Gearing improved significantly
inthe year to 3.6 times, towards our range
of1.5 to 2 times which we expect to
reachwithin the next two years. The Board
intends to reinstate payment of a dividend
inrespect of full year 2022, based on
ourcurrent expectations for the year.
Outlook
National Express had a track record of
delivering strong and sustainable financial
outcomes in the years before thepandemic
and we expect to continue to deliver strongly
over the coming years. We have seen
consistently that as restrictions are lifted,
demand recovers. The majority of our
businesses rapidly returned to 80% or
moreof pre-pandemic patronage at peak
last year. We will inevitably see some
unevenness over the year ahead, but
wenow have six quarters of increasingly
positive demand trajectory to build from.
Whilst the impact on the Group is expected
to be limited, we note the tragic events
unfolding in Ukraine and our sympathies
goto those affected. Fuel prices have risen
significantly in recent days, but we had
already fully hedged our fuel requirements
for 2022 andthe increased cost of operating
aprivate car has the potential to drive modal
shift into public transport.
We expect to continue to rebuild our
revenue base during 2022 as we position
the business for accelerated growth going
forwards, and anticipate delivering revenue
close to 2019 levels in 2022.
As set out at the launch of Evolve at
ourCapital Markets Day, we expect an
average profit margin of 9% in the period
2022 to 2027, and to have fully recovered
topre-pandemic margin levels of around
10% in the later stages of that period.
However, in the short term we expect the
recovery in profitability to lag our revenue
recovery, and hence for margins initially
tobe below our target 2022 to 2027
average, due to the additional investment
required to rebuild patronage; the current
shortage of drivers we are experiencing in
our North America School Bus operations;
and an elevated level of cost inflation that
has partially offset the structural cost
reductions we have made.
We remain focused on return on
investment and cash generation, and
anticipate free cash flow conversion
in2022 at around the pre-pandemic
average of at least 60%, with ongoing
actions to minimise maintenance capex
and utilise availability arrangements to
source vehicles. Over the medium term
weare targeting an average free cash
flowconversion of at least 80% for
2022to2027, as set out at our Capital
Markets Day.
Ignacio Garat
Group CEO
9 March 2022
National Express Group PLC Annual Report 2021
14

Chris Davies
Group Chief
Financial Officer
Group Chief
Financial
Officer’s
review
2021 began with further mobility restrictions imposed by governments around the world. However, as these werelifted the recovery in
revenue was encouraging; revenue for the first half of the year increased to 77% of 2019 levels (on a constant currency basis) compared
with the second half of 2020, being 66%. This improved further to 87% of 2019 in the second half of 2021. This resulted in full year Group
revenue of £2,170.3 million (2020: £1,955.9m), an increase of 11.0% (15.5% on a constant currency basis) year-on-year.
Public transport, by its nature, relies onacombination of commercial and concessionary revenue and during the year, the Group
received £162.9 million inCovid-related revenue support (2020: £115.5m) representing 7.5% of totalGroup revenue. In the UK, the
Grouprecognised £80.6 million (2020: £83.2m) from the Covid-19 Bus Service Support Grant (CBSSG) in return for maintaining bus
services at around 100% of pre-pandemic levels with social distancing provisions in place. This scheme ended inAugust 2021 and
wasreplaced by the Bus Recovery Grant (BRG) for which the Group recognised £12.2 million revenue in the year. In addition, the Group
recognised £54.2 million (2020: £15.3m) and £15.9 million (2020: £15.6m) for Covid-19 government compensation in ALSA and German
Rail respectively. Had these various revenue-related grants not been available, the Group would have operated asignificantly lower
levelof service in order to further reduce costs. There was no revenue support provided by the Government for UK Coach operations.
Summary Income Statement
Underlying
result
1
2021
£m
Separately
disclosed
items
1
2021
£m
Total
2021
£m
Underlying
result
1
2020
£m
Separately
disclosed items
1
2020
£m
Total
2020
£m
Revenue 2,170.3 – 2,170.3 1,955.9 – 1,955.9
Operating costs (2,083.3) (123.2) (2,206.5) (2,006.7) (330.6) (2,337.3)
Operating profit/(loss) 87.0 (123.2) (36.2) (50.8) (330.6) (381.4)
Share of results from associates (1.0) – (1.0) (2.1) – (2.1)
Net finance costs (46.3) (1.4) (47.7) (53.2) (8.0) (61.2)
Profit/(loss) before tax 39.7 (124.6) (84.9) (106.1) (338.6) (444.7)
Tax (12.8) 19.8 7.0 29.3 88.7 118.0
Profit/(loss) for the year 26.9 (104.8) (77.9) (76.8) (249.9) (326.7)
1
To supplement IFRS reporting, we also present our results on an Underlying basis which shows the performance of the business before separately disclosed items, principally
comprising amortisation of intangibles for acquired businesses, certain costs arising as a direct consequence of the pandemic, restructuring costs and the re-measurement of
theRhine-Ruhr Express (RRX) onerous contract provision. Treatment as a separately disclosed item provides users of the accounts with additional useful information to assess the
year-on-year trading performance of the Group. Further explanation in relation to these measures, together with cross-references to reconciliations to statutory equivalents where
relevant, can be found onpages 226 to 228.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
15

Financial review continued
The Group recorded an Underlying Operating Profit for the year of £87.0 million (2020: £50.8m loss). Theyear-on-year improvement of
£137.8 million reflected theincrease in revenue, combined with continued cost control and support from customers, governments and
transport authorities. Despite variable cost increases as service levels increased to support the11.0% revenue growth and the impact
ofinflation, the increase in Underlying operating costs was contained at 3.8%; this reflected the cost saving programmes implemented
inlate 2020 and early 2021 to remove around £100 million of cost from the Group, as well as increasing occupancy.
After £123.2 million (2020: £330.6m) of separately disclosed items, the statutory operating loss was £36.2 million (2020: £381.4m loss).
At the start of the year a significant number of employees were temporarily laid off or furloughed utilising government income protection
schemes, but the vast majority returned to work during the year with only minimal numbers remaining on such schemes by the end
oftheyear. In total, thecost support received in respect of job retention or wage subsidy schemes was £18.3 million (2020: £45.6m),
comprising £8.9 million in the UK and £9.4 million in North America. In addition, £45.7 million ofcost support was recognised in respect
ofthe Coronavirus Economic Relief for Transportation Services (CERTS) grant inNorth America.
Underlying net finance costs decreased by £6.9 million to £46.3 million (2020: £53.2m) reflecting the impact in the prior year of the
partialdouble-carry of Sterling bonds, aswell as the impact of lower average NetDebt.
After finance costs and a loss of £1.0 million from the share of results from associates (2020: £2.1m loss), the Group recorded an
Underlying Profit Before Tax of £39.7 million (2020: £106.1m loss).
The Underlying tax charge was £12.8 million (2020: £29.3m credit) representing an Underlying effective taxrate of 32.2% (2020: 27.6%)
broadly inline with the weighted average tax ratesin the countries in which the Group operates, the increase being driven by generating
profits in higher taxation jurisdictions and a loss in the UK. The statutory tax credit was £7.0 million (2020: £118.0m credit). Tax losses
inmost jurisdictions have been recognised as deferred tax assets with forecasts of future profits supporting their utilisation.
The statutory loss for the year, after the separately disclosed items explained below, was £77.9 million (2020: £326.7m loss).
Separately disclosed items
£124.6 million (2020: £338.6m) of separately disclosed items were recorded as a net cost before tax in the Income Statement, of which
£44.4 million (2020: £126.9m) represented cash outflows in the year.
Separately disclosed items
Income
Statement
2021
£m
Income
Statement
2020
£m
Cash
2021
£m
Cash
2020
£m
Intangible amortisation for acquired businesses (38.8) (52.6) – –
Directly attributable gains and losses resulting from the Covid-19 pandemic (41.0) (245.7) (31.5) (109.6)
Restructuring costs (12.3) (14.0) (9.4) (10.8)
Re-measurement of the Rhine-Ruhr Express onerous contract provision (27.9) (16.8) (1.5) –
Other separately disclosed items (3.2) (1.5) (0.9) –
Separately disclosed operating items (123.2) (330.6) (43.3) (120.4)
Interest charges directly resulting from the Covid-19 pandemic (1.4) (8.0) (1.1) (6.5)
Total (before tax) (124.6) (338.6) (44.4) (126.9)
Consistent with previous periods, the Group classifies the £38.8 million (2020: £52.6m) amortisation for acquired intangibles as a
separately disclosed item.
£41.0 million (2020: £245.7m) of directly attributable gains and losses due to Covid-19 were incurred in the year. These principally
comprised: £10.3 million (2020: £116.6m) in respect of onerous contracts; £17.0 million (2020: £99.3m) impairments of customer
contracts and property, plant and equipment; and £11.5 million expense (2020: £33.9m gain) in respect of the re-measurement
oftheWeDriveU put liability. Going forward, wedo not expect further Covid-related charges in separately disclosed items other
thanre-measurements of items previously recorded.
Costs of £12.3 million (2020: £14.0m) wereincurred in respect of Group-wide restructuring and long-term cost saving initiatives,
aspartofthe Group’s mitigations against the adverse impact ofthe pandemic on profit and cash.
A £27.9 million (2020: £16.8m) expense was incurred following the re-assessment of the RRX onerous contract inGermany. Whilst
the outlook forthe German Rail business overall is positive, with good profitability anticipated over the remaining lifeof the contracts
inaggregate, the original RRX contract inisolation is anticipated to be onerous, driven by cost inflation for personnelandenergy costs.
Further detail is set out in note 5 to the Financial Statements.
National Express Group PLC Annual Report 2021
16

Segmental performance
Underlying
Operating
Profit/(Loss)
2021
£m
Separately
disclosed
items
2021
£m
Segment
result
2021
£m
Underlying
Operating
(Loss)/Profit
2020
£m
Separately
disclosed
items
2020
£m
Segment
result
2020
£m
ALSA 56.6 (26.4) 30.2 6.7 (100.2) (93.5)
North America 74.4 (27.9) 46.5 12.4 (188.4) (176.0)
UK (22.6) (23.8) (46.4) (49.0) (50.4) (99.4)
German Rail 5.0 (29.1) (24.1) (4.9) (19.1) (24.0)
Central functions (26.4) (16.0) (42.4) (16.0) 27.5 11.5
Operating profit/(loss) 87.0 (123.2) (36.2) (50.8) (330.6) (381.4)
ALSA revenue increased by 33%, resulting in a €58 million increase in Underlying Operating Profit to €66 million. The Urban bus
businesses in Spain as well as in Casablanca are largely revenue-protected, which has provided a stable underpin to performance whilst
patronage is rebuilt. Discretionary and tourist businesses have continued tobe severely impacted by the pandemic but Long Haul has
recovered well, with revenues in the second half of the year improving to within 20% of pre-pandemic levels despite ongoing restrictions.
Morocco revenues grew by 36% to €134 million,principally driven by Rabat and Casablanca but with other cities also recovering strongly.
North America revenue increased by 7%,resulting in an increase in Underlying Operating Profit of $86 million to $102 million. School Bus
service levels built back throughout the first half of the year with 96% of schools back by the end of the school year in June. The second
half ofthe year for School Bus has been impacted by driver shortages which havedriven a large number of lost routes, although the
financial impact of this has been partially mitigated by CERTS grant funding. Transit continues to benefit from the 2020 portfolio review
as well as somekey contract extensions, with revenuepeaking at nearly 80% of 2019levels. Shuttle customers mostly continued to pay
in full such that WeDriveUcontinues to deliver close topre-pandemic levels of profit.
UK revenue increased by 3%, resulting inan increase in profit of £26 million although still producing an Underlying Operating Loss of
£23 million. Within this, the Bus and Coach businesses fared very differently. UK Bus revenue for the year was 1% up onpre-pandemic
levels, with patronage growing sequentially and peaking at over 80% of pre-pandemic levels before dropping again as restrictions were
reapplied. Coach revenue finished the year 48% down on 2019 having peaked at 36% down. The continued mobility restrictions coupled
with building occupancy, bringing back service ahead of passenger demand, drove an operating loss.
Cash management
Funds flow
2021
£m
2020
Restated*
£m
Underlying Operating Profit/(Loss) 87.0 (50.8)
Depreciation and other non-cash items 213.0 237.4
EBITDA 300.0 186.6
Net maintenance capital expenditure** (142.1) (215.9)
Working capital movement 33.0 (95.6)
Pension contributions above normal charge (7.2) (7.4)
Operating cash flow 183.7 (132.3)
Net interest paid (41.1) (56.0)
Tax paid (19.2) (7.7)
Free cash flow 123.4 (196.0)
Growth capital expenditure** (134.4) (35.3)
Acquisitions and disposals (net of cash acquired/disposed) (54.3) (48.0)
Separately disclosed items (44.4) (126.9)
Proceeds from equity instruments – 725.6
Payment on hybrid instrument (5.3) –
Other, including foreign exchange 65.1 (57.2)
Net funds flow (49.9) 262.2
Net Debt (1,069.8) (1,019.9)
* 2020 Net Debt is restated for the reclassification from payables to Net Debt of £78.3m amounts due under advance factoring arrangements. See below for further explanation.
** Net maintenance capital expenditure and growth capital expenditure are defined in the glossary of Alternative Performance Measures on pages 226 to 228.
The Group generated EBITDA of £300.0 million in the year (2020: £186.6m).
The net maintenance capital expenditure of £142.1 million (2020: £215.9m) represented a significant reduction on recent years, reflecting
actions taken to reduce capital expenditure in response to the pandemic. The majority of spend in the year was in respect of fleet
replacement in ALSA andNorth America. At the year end therewas £104.3 million (2020: £289.6m) owing to vehicle suppliers in respect
of either maintenance or growth capex, withthe year-on-year decrease reflecting the payment of growth capex in the year,combined
with tight control of capitaladditions.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
17

Financial review continued
The Group recorded a working capital inflow of £33.0 million for the year (2020: £95.6m outflow), reflecting a partial unwind of the outflow
observed in the previous year, as receivables and payables both increased as a result of the continued recovery in activity levels.
Consistent with previous periods, theGroup makes use of non-recourse factoring arrangements. These take two forms: a) typical
factoring of receivables existing at the balance sheet date (principally utilised for School Bus in NorthAmerica), and b) advance
payments for factoring of divisional subsidies. The latter occurs principally in Germany where the cash flow profile of the RME
contractissuch that it creates a working capital requirement over the first half of the 15-year contract, and we factor certain of the
subsidies due in order to ensure that the contract has a cash neutral impact onthe Group. During the year the Group amended its
accounting policy in respect of this form of factoring such that any amounts drawn down are now classified as borrowings rather
thanasa working capital item – see note 2 to the Financial Statements for further information. At 31 December 2021 there was
£77.9 million (2020: £78.3m) drawn down on these arrangements, which is now classified as borrowings rather than payables in
both2021and 2020. The prior year comparatives in the table above havebeen restated accordingly. In addition to the advance
subsidyfactoring, at 31 December 2021 there was £48.5 million (2020: £33.3m) drawn down on receivables factoring. This increase
reflected the growth in revenues; however, the amounts drawn down on such factoring remained below pre-pandemic levels.
Net interest paid decreased by £14.9 million to £41.1 million (2020: £56.0m). There are two components to this reduction. Firstly, 2020 was
a‘double carry’ year whereby the final interest payment on the 2020 bond maturing in June 2020 (payable annually inarrears) was made
whilst at the same time making interest payments on new borrowings. Secondly, average Net Debt has decreased, resulting in lower interest
charges. Given the double carry impact in the prior year, 2019 is a more comparable year. Net interest paid in that year was £45.4 million,
compared with £41.1 million in 2021; the reduction being broadly in line with the decrease in Net Debt.
The net impact of the factors outlined above was a free cash inflow of £123.4 million in the year (2020: £196.0m outflow), comprising an inflow
of £40.6 million in the first half and an inflow of £82.8 million in the second half.
Growth capital expenditure of £134.4 million (2020: £35.3m) principally comprised vehicles to service new contracts in ALSA and North
America. The year-on-year increase reflected payments in respect of the Rabat and Casablanca fleets, which had been delivered in the
prior year. A £54.3 million outflow for acquisitions and disposals includes £22.8 million for the acquisition of Transportes Rober in Spain
inJune and £17.7 million for the purchase ofa further 10% of the share capital of WeDriveU (upon exercise of put options bythe vendor),
with the remainder being deferred consideration in respect of acquisitions in previous years. The amounts outstanding in respect of
deferredconsideration at the end of theyear had reduced to £13.4 million (2020: £28.8m; 2019: £49.0m).
A cash outflow of £44.4 million was recorded in respect of the items excluded from Underlying results as explained above.
In the previous year the Group received £725.6 million from a combination of the share placing in May 2020, delivering £230.1 million,
and the hybrid instrument issue in November 2020, which raised £495.5 million net of costs. The hybrid instrument is accounted for as
100% equity under IFRS and is subject to a 4.25% coupon, paid annually in February, which is effectively treated as an equity dividend.
£5.3 million of coupon payments on the hybrid instrument were made in theyear, in respect of the first part-year.
Other movements of £65.1 million (reduction to Net Debt) principally reflectthe movement in exchange rates and settlement of foreign
exchange derivatives. The strengthening in the valueof the pound decreased the value ofdebt denominated in foreign currency.
Net funds outflow for the period of £49.9 million (2020 restated: £262.2m inflow) resulted in Net Debt of £1,069.8 million (2020 restated: £1,019.9m).
Please see page 227 for a reconciliation tothe statutory cash flow statement.
Dividend
The Group’s capital allocation policy aimsto achieve a balance between reinvesting in the business for future growth and returns,
reducing gearing towithin our revised target range of 1.5x to2.0x and paying a growing dividend toshareholders. As previously guided,
inlight of the exceptional economic circumstances and conditions attaching toour amended covenants, the Group will not be paying a
dividend in respect of 2021. Looking ahead, reflecting the improving financial performance of the Group and theoutlook for profit and cash
for the year ahead, the Board intends to reinstate a dividend in respect of the full year 2022, at least 2 times covered. We anticipate paying
the entire dividend in respect of full year 2022 based on, and following delivery of, the full year results; reverting to a customary split
between interim and final dividends for subsequent years.
National Express Group PLC Annual Report 2021
18

Treasury management
The Group maintains a disciplined approach to its financing and is committed to an investment grade credit rating. Both Moody’s and
Fitch reaffirmed their investment grade ratings during the year, with Fitch revising outlook upwards.
In light of the impact of the pandemic onEBITDA generation, the Group has renegotiated its covenants. The Gearing covenant has
beenwaived by the lenders throughout 2020 and 2021, and will next apply at 31 December 2022, after which itreverts to the pre-
amended level of 3.5x.The interest cover covenant had been amended to 1.5x and 2.5x for the 30 June 2021 and 31 December 2021
testperiods respectively, and returns toits pre-amended level of 3.5x for 30 June 2022 onwards. In return for thesewaivers and
amendments to the covenants, the Group has agreed to a quarterly £250 million minimum liquidity test and a bi-annual £1.6 billion
maximum Net Debt test during the amendment period. In addition, the Group has agreed topay no dividend during the period of the
amendments if gearing exceeds 3.5xor interest cover is below 3.5x. At 31 December 2021, Gearing was 3.6x (31 December 2020: 6.6x);
almost back within the pre-amended level. Interest coverat the end of the year was 6.3x (31 December 2020: 2.7x); this compares with
anamended covenant of 2.5x. All covenants are on a pre-IFRS 16 basis.
At 31 December 2021, the Group had £1.9 billion (31 December 2020: £2.8bn) ofdebt capital and committed facilities, with an
averagematurity of 4.7 years. The decrease from 2020 reflects the planned maturity of the short-term financing facilities secured
following theemergence of Covid-19, including the£0.6 billion available under the BankofEngland Covid Corporate Financing Facility.
At 31 December 2021, the Group’srevolving credit facilities (RCFs) were undrawn and theGroup had available a total of £0.9 billion
(31 December 2020: £1.9bn) innetcash and undrawn committed facilities. The table below sets out the composition of these facilities.
Funding facilities
Facility
£m
Utilised at 31
December 2021
£m
Headroom at
31 December
2021
£m Maturity year
Core RCFs 495 – 495 2024-2025
2023 bond 400 400 – 2023
2028 bond 241 241 – 2028
Private placement 394 394 – 2027-2032
Divisional bank loans 112 112 – various
Leases 219 219 –- various
Funding facilities excluding cash 1,861 1,366 495
Net cash and cash equivalents (376) 376
Total 990 871
To ensure sufficient availability of liquidity,the Group maintains a minimum of £300 million in cash and undrawn committed facilities at
alltimes. This does not include factoring facilities which allow the without-recourse sale of receivables. These arrangements provide the
Group with more economic alternatives to early payment discounts for the management of working capital, and as such are not included in (or
required for) liquidity forecasts.
At 31 December 2021, the Group had foreign currency debt and swaps held asnet investment hedges. These help mitigate volatility in
the foreign currency translation of our overseas net assets. The Group also hedges its exposure to interest rate movements to maintain
an appropriate balance between fixed and floating interest rates on borrowings. It hastherefore entered into a series of swaps that have
the effect of converting fixed rate debt to floating rate debt or viceversa. The net effect of these transactions was that, at 31 December
2021, the proportion of Group debt at floating rates was 18% (2020: 7%).
Group tax policy
We adopt a prudent approach to ourtaxaffairs, aligned to business transactions and economic activity. We have a constructive and
good workingrelationship with the tax authorities in the countries in which weoperate and there are no outstanding tax audits in any
ofour main three markets of the UK, Spain and the USA. The Group’s tax strategy is published on the Group website in accordance
withUK tax law.
Pensions
The Group’s principal defined benefit pension schemes are all in the UK. The combined deficit under IAS 19 at 31 December 2021
was£95.4 million (2020: £135.1m), with the decrease beingprincipally driven by an increase indiscount rates.
The two principal plans are the UK Group scheme, which is closed to new accrual, and the West Midlands Bus plan, which remains
opento accrual for existing active members only. The deficit repayments on the West Midlands Bus plan will be around £7 million
perannum, rising with inflation, until 2026.
On 23 September 2021, a full buy-out of the UK Group scheme was completed, following which Rothesay Life has become fully and
directly responsible for the pension obligations. On completion of the buy-out, the defined benefit assets and matching defined benefit
liabilities were derecognised from the Group’s Balance Sheet. The buy-out transaction also triggered the return of surplus assets to
theCompany totalling £7.5 million, with theremaining £3.8 million assets retained in the scheme to cover final expenses in completing
itswind up.
The IAS 19 valuation for the West Midlands Bus scheme at 31 December 2021 was a £96.1 million deficit (2020: £141.6m deficit).
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
19

Financial review continued
Fuel costs
Fuel costs represent approximately 7% ofrevenue. Whilst it remains complex to forecast volume at the current time, based on current
projections and as of February 2022, the Group is fully hedged for 2022 at an average price of 34.0p per litre; around 65% hedged for
2023 at an average price of 34.4p; and around 25% hedged for 2024 at an average price of 38.5p. This compares with an average hedged
price in 2020 and 2021 of 37.2p and 37.8p respectively.
TCFD reporting
The Group had previously provided disclosures consistent with many of the recommendations of the TCFD and has now fully adopted
the recommendations for the 2021 Annual Report. This is the culmination of aproject undertaken during the year by an internal working
group, with selected input from external experts. The most significant newactivity was the completion of a detailed climate risk
assessment. Our overall conclusion from this work is that neither an extreme physical scenario risk nor an extreme transition scenario
would be likely to have a material adverse impact on the Group’s profitability, cash flow, gearing or liquidity. On the contrary, we forecast
that any downside impact would be dwarfed by the opportunities from modalshift likely to unfold in either scenario.
Going concern
The Board continues to believe that the Group’s prospects are positive. We are diversified geographically, by mode of transport and
bycontract type, and no single contract contributes more than 4% to revenue. Furthermore, a large proportion of the Group’s contracts
have some form of protection from volatility in passenger numbers. The Group is well positioned tobenefit from the future trends in
transportation. Public transport is key to increasing social mobility as well as being fundamental to addressing the challenges of
congestion and poor air quality.
The Financial Statements have been prepared on a going concern basis as the Directors have a reasonable expectation that the
Grouphas adequate resources tocontinue in operational existence for aperiod of 12 months from the date of approval of the
financialstatements. Details of the Board’s assessment of the Group’s ‘base case’, ‘reasonable worse case’, and ‘reverse stress
tests’aredetailed in note 1 to the Financial Statements.
Chris Davies
Group Chief Financial Officer
9 March 2022
National Express Group PLC Annual Report 2021
20

Divisional review: ALSA
Francisco Iglesias
Chief Executive, ALSA
Overview
ALSA has delivered strong growth in
revenue, Underlying Operating Profit and
cash in the year, driven by an improving
trajectory in trading throughout the year,
coupled with the benefit of actions taken
in2020 to reduce structural costs. ALSA
continues to reap the benefits from the
ongoing diversification strategy, with
nearly 50% of its contracts being revenue
protected, providing both balance and a
stable base to support the growth areas
ofthe business. Revenue grew by 32.8%
to €835.8 million, with strong recovery in
demand in our Long Haul and Regional
services in Spain, and in Morocco, driven
by both new and existing contracts.
Underlying Operating Profit of €65.9 million
represents a €58.4 million improvement
versus last year, with Underlying Operating
Margin recovering to 7.9%. After separately
ALSA is the leading company in the Spanish road passenger
transport sector, and was acquired by NationalExpress in 2005.
With over 100 years’ experience, it operates Long‑distance,
Regional and Urban bus and coach services acrossSpain and
inMorocco and Switzerland. In 2022, we will also startto operate
Urban bus services in Portugal. Apart from its busand coach
services, the business also operates service areas and other
transport‑related businesses, suchas fuel distribution.
disclosed items, the statutory operating
profit was €35.2 million (2020: €105.2m
loss); an improvement of €140.4 million.
We have seen sequential improvement
across all business lines. In Urban bus,
bythe year end passenger numbers
recovered back to nearly 90% of pre-
pandemic levels. Long Haul passenger
demand increased steadily over the
summer and into the autumn, peaking
at70% of pre-pandemic levels (despite
increased rail competition), before the
arrival of the Omicron variant – with
passenger demand bouncing back
strongly in recent weeks to around 70%.
Morocco traded ahead of pre-pandemic
levels, with nearly 290 million passengers
carried in 2021, an increase of 50%
versus2019, in part driven by the new
contracts inCasablanca and Rabat,
Revenue
£718.4m
2020: £559.3m
Revenue
€835.8m
2020: €629.3m
Underlying
OperatingProfit
£56.6m
2020: £6.7m
Underlying
Operating Profit
€65.9m
2020: €7.5m
Statutory Operating
Profit/(Loss)
£30.2m
2020: £(93.5)m
Statutory Operating
Profit/(Loss)
€35.2m
2020: €(105.2)m
Underlying
OperatingMargin
7.9%
2020: 1.2%
ALSA
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
21

A key aspect of the ALSA transformational
plan is the increasing digitalisation of
thebusiness both operationally and
commercially. A number of projects are
underway including the launch of Mobi4U,
a Mobility as a service (MaaS) app.
This single app can be used for travel
onall types of mobility services in the
localarea, making it more convenient
forour customers to plan their journeys,
with real-time information on services,
journey times and intermodal connections.
Making public transport convenient and
easier for our customers will help drive
modal shift away from cars and help
ourcities to achieve their environmental
targets, whilst also building our
relationships with the local authorities.
Already the app has been launched in
fiveareas, four in Spain and one in
Morocco – and we will look to roll it out
further in more towns and cities in 2022.
We have also developed other digital
applications for operational projects,
including the optimisation of driver
scheduling in our Madrid Consortium
Urban bus contracts, covering 1,500
drivers, and are looking to extend this to
further contracts across Spain in 2022.
It’s pleasing to see that our customers
appreciate our efforts, with customer
satisfaction scores back very close to
theall-time record set in 2019 despite
ongoing mobility restrictions this year.
Indeed, our customers love our services
and the innovations we introduce, with a
clear case in point being our Long Haul
services, where the introduction of night
services and new pick-up and destination
stops is helping to offset the impact of new
lower cost high speed rail competition.
We continue to make progress with
ourdecarbonisation agenda, launching
thefollowing targets in the year for
transitioning to fully zero emission fleets:
Urban bus in Spain by 2035; Long Haul
&Regional Coach in Spain by2040; and
Morocco by 2040. Significantly, we are the
first public transport operator inSpain to
launch regular services using hydrogen
buses, where, working alongside the
Madrid Consortium, we are now operating
hydrogen buses in Madrid, building on
ourcommitment to sustainable mobility.
Our reputation as a trusted partner and
fordelivering superior outcomes helps
towin and retain contracts. We have
successfully extended our contract in
Khouribga, Morocco, for a further five
years, and in Spain we retained a number
ofRegional contracts and won new
contracts, including the government
holiday scheme for elderly people, in
partnership with IMSERSO.
Looking ahead
We are excited by the many opportunities
that lie ahead of us, starting with our entry
into an entirely new market, with the first of
our two Urban bus contracts in Portugal
mobilising and operating services in 2022.
Together these contracts are worth
€43 million of revenue on an annualised
basis and open up further opportunities
inthe country.
In addition, we have an attractive pipeline
of both organic and inorganic opportunities
in the next 12 months, worth nearly
€200 million in revenue. We see opportunities
both in our existing markets, particularly in
the Urban and Regional segments, as well
as in adjacent markets such as France and
Italy, and we are actively working on bids.
The Long Haul concession renewal
process remains on hold as the authorities
continue to absorb the impact of the
pandemic on transport and the need to
finalise the network remapping, with no
stated intention to restart the process
inthe near term. As a result, industry
expectations are for no impact from the
Long Haul concession renewal process
until late in 2023 at the earliest.
butalso through growth in existing
contracts with, for example, the
additionofnew routes in Tangier.
Progressing Evolve
ALSA has developed a reputation for
reinvigorating public transport. A prime
example of this is Casablanca, where we
are transforming the lives of the people
who live there. Nearly 600 new buses are
now operating in this city, transforming the
quality and safety of services, significantly
improving social mobility and further
strengthening our strong customer
relationships with the local authorities.
At the same time, we have been able to
cascade fleet to other cities to support
growth in services, where, for example,
Tangier is now seeing passenger journeys
ahead of pre-pandemic levels. This is
resulting in tangible improvements in
safety, with Casablanca seeing a 48%
reduction in at-fault road accidents year
onyear. It is not just the new contracts
where we are seeing such improvements;
we have also driven a significant
improvement in safety standards in
othercities, finishing the year with a
17%reduction in at-fault road accidents
inour existing contracts versus 2019.
We continued to consolidate our position
in the Regional and Urban bus market
inSpain, with the acquisition of Rober,
anUrban bus business in Granada.
This acquisition builds on ALSA’s
existingUrban bus business in Almeria
and in Regional services, consolidating
ourleadership position in the region.
Having subsequently won a small Urban
bus contract in Jaen, we have since
integrated this into our Rober business,
further consolidating our leadership
position in Andalusia.
ALSA is an established multi-modal
operator and, in 2021, we have continued
to add to our diverse offering of mobility
services. In Leon, we added further
services to our multi-modal offering,
withthe launch of bike rental services.
This adds to our existing services in
thecity, where we also provide Urban,
Regional and Long Haul, as well as
dedicated school bus services.
Divisional review: ALSA continued
National Express Group PLC Annual Report 2021
22

Divisional review: North America
Gary Waits
Chief Executive,
NorthAmerica
Overview
North America has delivered growth
inrevenue, Underlying Operating Profit
and cash in the year, with an improving
trajectory in trading throughout the year.
Revenue grew by 7.0% to $1,199.7 million,
led by a strong return to school for the
2021/22 year. Underlying Operating
Profitof $102.3 million represents an
$86.0 million improvement versus last
year, with a significant improvement in
theUnderlying Operating Margin, to
8.5%.After separately disclosed items,
thestatutory operating profit was
$63.8 million (2020: $226.1m loss);
animprovement of $289.9 million.
Our business in North America has three areas of activity:
student transportation, Transit and Shuttle services. We
operatein 34 US states and three Canadian provinces.
The student transportation business operates through
medium‑term contracts awarded by local school boards
toprovide safe and reliable transport for students, and
isthesecond largest private operator in North America.
Our Transit business operates predominantly paratransit
servicesacross the USA.
Our Shuttle business, operating predominantly through
WeDriveU, offers corporate employee shuttle services and
isalsogrowing in the universities and hospital shuttle market.
Our School Bus operations saw an
improving trajectory throughout the year,
with the first half impacted by school
closures and a mix of full in-school
learning and a ‘hybrid’ of in-school
andat-home learning. Encouragingly,
thestart of the new school year saw
allschools returning to full in-school
learning, although a few have closed
sporadically in response to Omicron.
As schools opened back up, this was
accompanied by driver shortages,
whichare likely to persist for the
restofthe2021/22 school year.
These drivershortages have inevitably
impacted wage demands, with wage
Revenue
£872.0m
2020: £869.2m
Revenue
$1,199.7m
2020: $1,121.5m*
Underlying
OperatingProfit
£74.4m
2020: £12.4m
Underlying
OperatingProfit
$102.3m
2020: $16.3m*
Statutory Operating
Profit/(Loss)
£46.5m
2020: £(176.0)m
Statutory Operating
Profit/(Loss)
$63.8m
2020: $(226.1)m
Underlying
OperatingMargin
8.5%
2020: 1.5%
* Revenue and Underlying Operating Profit at constant
currency in respect of the Canadian Dollar to US
Dollar foreign exchange rate movement in the year
North America
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
23

Once fully implemented, we expect our
‘Driving Excellence’ programme to deliver
annualised benefits of $40 million.
One of the five customer propositions
setout in Evolve is ‘filling the transit gap’
and this is best exemplified by our Shuttle
business, where we have won multiple
newcontracts in the year, worth around
$20 million of annualised revenue, and also
retained a number of key contracts, worth
around $30 million of annualised revenue.
Whilst we expect the pandemic will bring
some long-term changes in working
arrangements, our customers view
face-to-face collaboration as critical for
innovation and long-term success and
continue to buy up commercial real estate.
In addition, with employees likely to adopt
ahybrid way of working, there will be
growth opportunities for operating more
hours of service or more vehicles to
accommodate the flexibility the companies
are offering. Reflecting new business wins
and confidence in the recovery of the
existing business, we have raised our
expectations for growth in WeDriveU
overthe next couple of years.
A relentless focus on driving safety
improvements has helped to deliver a
64%improvement in our overall safety
performance, as measured by FWI.
Particularly pleasing is the improvement
inour driver behaviour/risk score, which
has resulted in a 42% improvement in
performance over that recorded in 2019.
This in turn has resulted in a 12%
improvement in preventable accidents
anda 42% improvement in speeding
performance over the same period.
We had no at-fault major injuries in North
America in 2021, an accomplishment
webelieve is unparalleled in a transport
company of our scale.
It is gratifying to see that our School
Busoperations recorded their highest ever
customer satisfaction score in 2021: 66%
of customers gave the highest possible
score, a significant increase from the
scoreof 55% in 2019. This record rating
isa direct result of the improvements our
teams have delivered through the ‘Driving
Excellence’ programme, particularly
interms of on-time performance and
accurate invoicing, together with regular
Covid-related communications and
updates with each of our customers.
This year we set a formal target for a
netzero emission fleet by 2040 and
havemade further progress with our
decarbonisation agenda. We are already
running a number of electric School Bus
pilots and are developing proposals to
scale these to hundreds of buses, building
on the ‘availability contract’ pioneered
inthe UK. Pleasingly, we are seeing
increased demand from a number of
Shuttle customers for ZEVs, where we
currently operatenearly 100 ZEVs.
Looking ahead
We remain confident about the prospects
foreach of our businesses and anticipate
further sequential improvements in
performance in the coming year.
With the additional operational
complexities presented by the current
driver shortages being felt across all
oftheUS School Bus market, we expect
the current year to be one of consolidation,
with a focus on retention of contracts
rather than seeking to gain market share.
Encouragingly, customers are recognising
the challenges we face, and while very
early in the bid season, we are seeing
above-average price increases on
contractrenewals.
In Transit, we will continue to focus our
bidding activity in paratransit opportunities,
which are typically both asset light and
higher margin: we are actively exploring
anumber of tenders that will come up
forbid in the next 12-18 months, worth
around $200 million of revenue.
As noted above, we believe the growth
prospects are very strong for our Shuttle
operations. Indeed, we have a strong
pipeline of bidding opportunities in 2022,
approaching $150 million of annualised
revenue, both in the corporate and
university Shuttle markets, with potential
tofurther expand our geographical
footprint across the USA.
inflation rising to 5.4% in the current
school year. School Bus operators
aresupported by grant funding through
the CERTS programme, which has offset
the increase indriver wages and the other
costs associated with a more complex
start-up to the new school year. We have
taken decisive action to mitigate the
impact of driver shortages including
implementing new standardised recruitment
procedures, supported by an enlarged
centralised driver recruitment team.
At thesame time we introduced various
incentives such as referral and retention
bonus schemes, while also engaging more
regularly with employees throughout the
year, with a particular focus on wellbeing.
In our Transit business, service volumes
recovered to 76% of pre-pandemic levels.
We have benefitted from our review of the
portfolio of Transit contracts conducted
inthe previous year, where we exited loss
making contracts and achieved significant
price increases on a number of other
contracts which were previously
earmarked as potential exits. In addition,
the implementation of ‘Driving Excellence’
measures and tight cost control has
delivered improved profitability for some
previously poor performing contracts.
Our Shuttle business has also seen an
improving trajectory throughout the year,
with increased demand for services to
restart. Earlier in the year only a quarter
ofservices were operating; however,
thesecond saw a strong recovery, with
themajority of our customers returning
totheir workplaces. Encouragingly, 87%
ofservices were operating by the year
end,with more customers indicating
theirintention to return more employees
tothe office in the first half of this year.
Progressing Evolve
We have made significant progress in
theyear in operational transformation,
spearheaded by our ‘Driving Excellence’
programme. The first phase of our quality
management processes has been rolled
out in our School Bus depots, both
standardising and improving operational
processes and locking them in with
theroll-out of enabling technology to
automate the flow-through to billing. This
relentless focus on small improvements
isdelivering improved performance for
thecustomer, while at the same time
eliminating waste and reducing costs.
One example is a 27% improvement in
yard departure performance, resulting
inimproved on-time performance for
ourcustomers, and an 18% reduction
inservice penalties year on year.
Divisional review: North America continued
National Express Group PLC Annual Report 2021
24

Divisional review: UK & Germany
Tom Stables
Managing Director,
UKandGermany
UK
Overview
While the UK had a tough year, with mixed
fortunes in our Bus and Coach operations,
the performance trajectory continued to
improve in terms of revenue and operating
profit, particularly so in the second half
ofthe year. Revenue grew by 2.5% to
£397.8 million (and up nearly 14% in the
second half). The Underlying Operating
Loss of £22.6 million represents a
£26.4 million improvement versus last
year,with all of the loss associated
withour Coach business. Despite these
challenges, the UK delivered a significantly
reduced loss in the year. After separately
disclosed items, the statutory operating
loss was £46.4 million (2020: £99.4m);
animprovement of £53.0 million.
Over the year, Bus has seen a sequential
improvement in passenger demand,
recovering to around 80% of pre-pandemic
levels in November, before the arrival of
the Omicron variant, where the imposition
of ‘Plan B’ restrictions contributed to a
short-term reduction in demand for our
services. However, we observed a rapid
bounce back in passenger demand in the
weeks following the lifting of all restrictions
in England in late January, with passenger
demand now back to 80% and rising.
Our Bus operations continued to receive
government support throughout the year,
initially through the CBSSG, and then latterly
through the BRG, which runs through to the
end of March 2022. With passenger demand
still recovering, we welcome the recent
announcement of a new bus funding
package, worth over £150 million, from
Aprilthrough to October 2022.
Revenue
£397.8m
2020: £388.2m
Underlying
OperatingLoss
£(22.6)m
2020: £(49.0)m
Statutory
Operating Loss
£(46.4)m
2020: £(99.4)m
Underlying
OperatingMargin
(5.7)%
2020: (12.6)%
National Express operates both Bus and Coach services in
theUK. In UK Bus, National Express is the market leader in the
West Midlands – the largest urban bus market outside of London.
We also operate in the accessible transport market. In UK Coach,
we are the largest operator of scheduled coach services in the
UK, operating high frequency services across the country. We
operate non‑scheduled coach operations under one brand –
National Express Transport Solutions – serving the fragmented
commuter, corporate shuttle, private hire and holiday markets.
It is our ambition to have zero carbon emissions in ourBus fleet
by 2030 and in our Coach fleet by 2035.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
25

Divisional review: UK & Germany continued
We have continued to invest and
improveour businesses through the
roll-outof new technology and processes
inthe year. One such example is CitySwift,
a timetable optimisation platform which
uses AI and machine learning to predict
journey times. This has enabled our bus
operations to match service provision to
prevailing traffic conditions, driving both
efficiency improvements and enhanced
customer service.
Filling the transit gap is best exemplified
by our Transport Solutions business,
which has won a number of new Shuttle
contracts, including the provision of
employee Shuttle services for NEXT
andthe Ministry of Defence, as well
asproviding team bussing for the
inaugural Cricket Hundred tournament.
And significantly, Transport Solutions
wonits first ZEV Shuttle contract,
providing Shuttle services to the
HarryPotter World studio tour.
Our relentless focus on safety has been
recognised with both our Bus and Coach
operations re-awarded a five-star British
Safety Council audit.
Our customers are recognising our efforts,
with the Net Promoter Score for our core
coach brand standing at 42.3 versus a
score of 38 in 2019, while our Trustpilot
rating is ‘Excellent’, with a score of 4.4.
We have the most ambitious net zero
emission fleet targets for a large public
transport operator in the UK. We have
made further progress towards those
targets in the year, where, in partnership
with Birmingham City Council, we are
nowoperating 20 hydrogen buses around
Birmingham, the first city in England to
doso outside of London, with the ambition
to scale up to over 200 buses from 2023.
In addition, as lead operator in the UK’s
first all-electric city, Coventry, we have
also placed orders for 130 electric
vehicles, to enter operation in early 2023,
through our first ‘availability’ contract in
the UK with Zenobe. This effectively
provides the Group with ‘ZEVs as a
service’; providing buses and charging
infrastructure without the requirement
forupfront capital expenditure and with
the availability provider accepting risk
transfer for issues such as battery
performance and charging technology.
Looking ahead
Looking ahead, we expect to see a
continuing recovery in demand for
ourbusand coach services, with
thecombination of low fares against
abackdrop of rising costs for car
owners,coupled with the arrival of the
Commonwealth Games in Birmingham
thissummer, all helping to drive further
growth in passenger demand. We
anticipate passenger journeys approaching
2019 levels by the end of 2022.
With countries around the world lifting
travel restrictions for tourists, we
anticipatesignificant pent-up demand
foroverseas holidays this year, which,
inturn, should drive a strong recovery
inour services to airports this summer.
Crucially, we have the contracts with the
airports to access this demand, providing
a significant competitive advantage over
other operators.
Meanwhile, Coach had a tough start to
theyear, with operations temporarily
mothballed in the first quarter as re-
imposed lockdown restrictions were
inplace in the UK. The second quarter
sawsignificantly reduced service levels
relative to pre-pandemic levels, with
restrictions on long distance travel and
social distancing in place for much of that
period. The second half saw a significant
recovery in passenger demand, peaking at
55% of pre-pandemic levels in November
with an occupancy rate of 66%. With the
arrival of Omicron, there was a temporary
slowing, but we have already seen
passenger demand and revenue bouncing
back in the last few weeks to nearly 60%
of pre-pandemic levels. The recovery
hasbeen driven by higher demand on
ourcore intercity routes, while our airport
routes have inevitably seen extremely low
passenger volumes, in line with reduced
levels of international travel. As we rebuild
occupancy, bringing service back ahead
offull patronage, this is impacting profit
recovery in the short term – however, we
believe this is the right strategy to drive
higher medium-term returns. We expect
toreturn to profit in our Coach business
in2022.
Our Transport Solutions business has
alsohad a difficult year, with private
hireand holidays particularly affected
bythe changing messaging around
travelrestrictions. Notwithstanding
thesechallenges, Transport Solutions
recovered to 60% of 2019 revenue, with
some significant contract wins in the year.
Progressing Evolve
Our UK Bus operations have a great
reputation for reinvigorating public
transport, with our partnership model
withTransport for West Midlands (TfWM)
widely recognised at both central and
localgovernment levels for delivering for
all stakeholders. Working in partnership
with TfWM, we have submitted the West
Midlands region’s bid for Bus Service
Improvement Plan (BSIP) funding, with
keyfeatures including bus priority
measures, sustaining low fares and
ticketing innovations such as contactless
capping, together with additional ZEVs
– all aimed at driving modal shift from
carsonto our buses. We already have the
lowest fares inEngland, which has helped
to drive the strong recovery in passenger
demand to around 80% of pre-pandemic
levels; we have also developed our
industry-leading ‘tap and go, never
overpay’ contactless capping ticketing
further, with the launch of three-day
andseven-day options, whichare both
attractive and convenient for customers.
National Express Group PLC Annual Report 2021
26

Germany
Overview
Revenue was up 35.2% to €211.8 million,
reflecting a full year of operations following
the start-up of our third service for the
RRX services in December 2020. The
Underlying Operating Profit of €5.8 million
in the year represents an improvement of
€11.3 million over the prior year, reflecting
good operational control plus receipt
ofadditional subsidies from the local
PTAstocompensate for the reduced
levelsof patronage compared with
pre-pandemic levels. The prior year
alsoincluded contract accounting
adjustments that reduced the in-year
profit, without which the business would
have generated a smallUnderlying
Operating Profit in 2020. After separately
disclosed items, thestatutory operating
loss was €28.0 million (2020: €27.0m).
In 2020 and subsequently also in 2021,
weconducted a review of the profitability
of the RRX contract, which has been
impacted not only by the pandemic but
also by rising costs, particularly rising
energy prices and personnel costs.
This has resulted in an increased onerous
contract provision being recognised in
theyear, the cost of which has been
recorded as a separately disclosed item;
full details can be found in note 5 to the
Financial Statements.
With another successful mobilisation of
services, National Express is increasingly
seen by the local PTAs as an operator
witha reputation for high performance
andreliability. It is this reputation that
hasenabled us to not only adjust terms
onsome existing contracts, thereby
improving their lifetime profitability, but
also to pick up new contracts through
thelargest ever emergency award in
therail industry, with the incumbent
operator handing back services to the
PTA. This new contract award will see us
running further services for RRX for the
next two years, and with a good margin.
The net impact of all of these
developments is clear line of sight to
sustained profitability and cash flow
fromGerman Rail going forward.
Progressing Evolve
The new emergency contract award
demonstrates the importance and value
ofbuilding a reputation as a trusted
andreliable partner with customers, be
they fare paying passengers or local PTAs.
Our success and capability in mobilising
new contracts is a key differentiator, and
with a much shorter mobilisation period
than is normal, we have the opportunity
todeepen our customer relationships
yetfurther. One of the major determinants
for success in rail contract mobilisation
isthe recruitment and training of train
drivers, something which some of our
competitors have struggled with.
Our approach to this key area has not
onlyresulted in successful start-up to
services, but also ensured that we retain
our drivers as we build our reputation
asthe employer of choice.
Looking ahead
As we look ahead, we see revenue
significantly higher than the level seen
in2019, reflecting the new services
mobilised in 2021 and the emergency
contract award. We also see further
growth opportunities through selective
bidding for rail franchises which allow
usto consolidate and, coupled with
asmoother profile of profit delivery,
compound our existing contracts.
Revenue
£182.1m
2020 £139.2m
Revenue
€211.8m
2020 €156.6m
Underlying Operating
Profit/(Loss)
£5.0m
2020 £(4.9)m
Underlying Operating
Profit/(Loss)
€5.8m
2020 €(5.5)m
Statutory Operating Loss
£(24.1)m
2020: £(24.0)m
Statutory Operating Loss
€(28.0)m
2020: €(27.0)m
Underlying
OperatingMargin
2.7%
2020 (3.5)%
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
27

Underlying Operating
Profit (£m)
£87.0m
2020: £(50.80)m
Free cash flow (£m)
£123.4m
2020: £(196.0)m
Return on capital
employed (%)
3.4%
2020: (2.0%)
Safety – Fatalities
andWeighted injuries
2.847
2020: 1.844
Passenger journeys
791.8m
2020: 578.7m
GHG emissions*
25.34
2020: 23.93
2019 20212020
295.3
(50.8)
87.0
2019 20212020
178.7
(196.0)
123.4
2019 20212020
12.4
(2.0)
3.4
2019 20212020
1.780
1.844
2.847
2019 20212020
938.6
578.7
791.8
2019 20212020
19.06
23.93
25.34
KPI definition
Group Underlying Operating Profit
fromoperations.
KPI definition
Free cash flow is the cash flow available after
deducting net interest and tax from operating
cash flow. See reconciliation on page 227.
KPI definition
Return on capital employed (ROCE) is
Underlying Operating Profit, divided by
average net assets excluding net debt
andderivative financial instruments,
translated ataverage exchange rates.
See reconciliation on page 228.
KPI definition
The Fatalities and Weighted Injuries
(FWI)Index weights injuries by severity
togive anoverall standard-based score.
The definition has been amended in the year
toexclude non-responsible minor injuries,
with prior year numbers restated to give
alike-for-like comparison.
KPI definition
Passenger numbers as measured by the
aggregate of passenger journeys across
eachof our operating divisions.
Our numbers for North America are
estimated as our school bus services
arenon-ticketed.
KPI definition
Total Scope 1 and 2 greenhouse gas
emissions divided by the total number of
passenger kilometres travelled across each
of our operating divisions.
* Measured as tCO
2
e/million passenger km.
Relevance to strategy
A key measure of the overall performance
ofthe business.
We are focused on driving growth in
operating profit in order to generate
higherand sustainable returns for our
shareholders and providing the platform
forfurther growth for all our stakeholders
including our employees, our customers
andour partners.
Relevance to strategy
Strong cash generation provides the funding
to invest in initiatives to drive our strategy.
This focus on strong cash generation
ensures that we are running the business
efficiently, converting profit to cash to enable
investment into the business; returns to
shareholders; and providing the platform
forfurther growth for all our stakeholders.
Relevance to strategy
Demonstrates how efficiently the Group is
deploying its capital resources to generate
operating profit.
A focus on ROCE ensures that we
maintainadisciplined approach to capital
investment and continue to invest in those
areas in which we deliver the best returns.
This ensures that we maximise returns to
shareholders for the capital they invest.
Relevance to strategy
Safety is of paramount importance to
apublictransport operator and being the
‘safest’ is one of the five Evolve outcomes.
Safety is at the heart of our values and
isourpriority for both our customers and
ouremployees.
High safety standards also help to drive
sustainable growth through customer
loyaltyand new business wins.
Relevance to strategy
Growth in passenger journeys is a
leadingindicator for growing our business
and hence driving modal shift from cars
tobuses and coaches.
National Express is targeting increased
passenger ridership as a longer-term driver
ofsustainable value for both the business
and the environment, with public transport
akey solution to lowering carbon emissions
and easing travel congestion.
Relevance to strategy
Reducing the environmental impact of
transport is core to our purpose. Per
passenger, bus and coach travel is vastly
lesspolluting than cars and, as such, modal
shift is the single most important thing we
can do. But we are also committed to making
public transport greener. We have adopted
targets through to 2025 that are ‘science
based’ and aligned with limiting global
warming in line with the Paris Agreement.
Performance
− Significantly improved profit performance
reflecting: strong recovery in demand for
our services, with revenue growth of
11.0%; the benefit of cost actions taken in
2020; and ongoing support of customers
and authorities.
− £138 million improvement year-on-year.
− Improved profit performance in every
division, with Group operating margin of 4%.
Performance
− Operating cash inflow of £184 million
reflects the significant improvement in
Underlying Operating Profit to £87 million.
− Free cash of £123 million after investing
£142 million in capital expenditure
tomaintain our fleet, together with a
working capital inflow of £33 million,
reflecting strong cash collection and
apartial reversal in revenue streams
backinto cash-upfront passenger
revenuefrom payments in subsidy
incomewitha longer payment cycle.
− £319 million improvement in free
cashgeneration.
Performance
− ROCE is still depressed as we rebuild
postthe pandemic.
− ROCE of 3.4% – reflects the return to
Underlying Operating Profit in the year,
versusan operating loss in 2020.
− Invested £142 million of net maintenance
capital, predominantly in replacing our
fleet inour existing operations.
− Invested £134 million in growth capital
expenditure including vehicles to service
newcontracts in ALSA and North America.
Performance
− In 2021 we saw an increase in the
scoreto2.847.
− This score compares with the best ever
score recorded in 2019 and remains
significantly better than historical scores
asthe third lowest score.
− Our UK Bus, Spanish and North American
operations all delivered improvements in
their scores vs. 2020, with North America
delivering its lowest ever score for the
third year running, with a 64%
improvement year on year.
− On a per million miles basis, the score of
0.005 represents a 90% improvement
since we first introduced our Driving Out
Harm programme in 2011.
Performance
− Passenger numbers recovered strongly
to792 million, rising by 37% in 2021
aslockdown restrictions eased across
each of our divisions.
− Record number of passengers in
Moroccowith nearly 290 million
passenger journeys, an increase of
50%versus 2019, reflecting new contracts
inRabat and Casablanca, and growth
inexisting contracts such as Tangier.
− Strong rebound in North America, with
schools returning to full in-school learning
in the new school year.
Performance
− Total Group carbon emissions increased
by25% due to the recovery in demand for
our services, with a corresponding higher
level of services operated year on year.
− 6% increase in tCO
2
e/million km to 25.34
due to lower load factors, particularly
where social distancing restrictions
appliedin the first half of the year; with
animproving trend in the second half
oftheyear as restrictions lifted.
− We expect to make progress against
ourtargets in 2022, with a continued
recovery in passenger demand.
− Launched net zero emission fleet targets
across ALSA and North America, following on
from previously announced targets for the UK.
− Launched a Group-wide net zero emission
target for Scope 1 and 2 emissions, by 2040.
Remuneration linkage
Group Underlying Profit before tax is one
ofthree bonus inputs to the Executive
Directors’ and senior managers’ annual
bonus structure.
Remuneration linkage
Free cash flow is one of three bonus inputs
to the Executive Directors’ and senior
managers’ annual bonus structure.
Remuneration linkage
ROCE is one of the performance conditions
for the Long-Term Incentive Plan of Executive
Directors and senior managers.
Remuneration linkage
FWI per million miles is an input into the
Executive Directors’and senior managers’
annualbonus structure.
Remuneration linkage
The Executive Directors’ and senior
managers’ annual bonus structure typically
includes a component of personal objectives
relating to business development metrics.
Remuneration linkage
25% of the Executive Directors’ and senior
managers’ Long-Term Incentive Plan is linked
to reducing GHG emissions and transitioning
to ZEVs. See Remuneration Report
commencing on page 89.
Key performance indicators
Measuring our progress
Financial
National Express Group PLC Annual Report 2021
28

Underlying Operating
Profit (£m)
£87.0m
2020: £(50.80)m
Free cash flow (£m)
£123.4m
2020: £(196.0)m
Return on capital
employed (%)
3.4%
2020: (2.0%)
Safety – Fatalities
andWeighted injuries
2.847
2020: 1.844
Passenger journeys
791.8m
2020: 578.7m
GHG emissions*
25.34
2020: 23.93
2019 20212020
178.7
(196.0)
123.4
2019 20212020
12.4
(2.0)
3.4
2019 20212020
1.780
1.844
2.847
2019 20212020
938.6
578.7
791.8
2019 20212020
19.06
23.93
25.34
KPI definition
Group Underlying Operating Profit
fromoperations.
KPI definition
Free cash flow is the cash flow available after
deducting net interest and tax from operating
cash flow. See reconciliation on page 227.
KPI definition
Return on capital employed (ROCE) is
Underlying Operating Profit, divided by
average net assets excluding net debt
andderivative financial instruments,
translated ataverage exchange rates.
See reconciliation on page 228.
KPI definition
The Fatalities and Weighted Injuries
(FWI)Index weights injuries by severity
togive anoverall standard-based score.
The definition has been amended in the year
toexclude non-responsible minor injuries,
with prior year numbers restated to give
alike-for-like comparison.
KPI definition
Passenger numbers as measured by the
aggregate of passenger journeys across
eachof our operating divisions.
Our numbers for North America are
estimated as our school bus services
arenon-ticketed.
KPI definition
Total Scope 1 and 2 greenhouse gas
emissions divided by the total number of
passenger kilometres travelled across each
of our operating divisions.
* Measured as tCO
2
e/million passenger km.
Relevance to strategy
A key measure of the overall performance
ofthe business.
We are focused on driving growth in
operating profit in order to generate
higherand sustainable returns for our
shareholders and providing the platform
forfurther growth for all our stakeholders
including our employees, our customers
andour partners.
Relevance to strategy
Strong cash generation provides the funding
to invest in initiatives to drive our strategy.
This focus on strong cash generation
ensures that we are running the business
efficiently, converting profit to cash to enable
investment into the business; returns to
shareholders; and providing the platform
forfurther growth for all our stakeholders.
Relevance to strategy
Demonstrates how efficiently the Group is
deploying its capital resources to generate
operating profit.
A focus on ROCE ensures that we
maintainadisciplined approach to capital
investment and continue to invest in those
areas in which we deliver the best returns.
This ensures that we maximise returns to
shareholders for the capital they invest.
Relevance to strategy
Safety is of paramount importance to
apublictransport operator and being the
‘safest’ is one of the five Evolve outcomes.
Safety is at the heart of our values and
isourpriority for both our customers and
ouremployees.
High safety standards also help to drive
sustainable growth through customer
loyaltyand new business wins.
Relevance to strategy
Growth in passenger journeys is a
leadingindicator for growing our business
and hence driving modal shift from cars
tobuses and coaches.
National Express is targeting increased
passenger ridership as a longer-term driver
ofsustainable value for both the business
and the environment, with public transport
akey solution to lowering carbon emissions
and easing travel congestion.
Relevance to strategy
Reducing the environmental impact of
transport is core to our purpose. Per
passenger, bus and coach travel is vastly
lesspolluting than cars and, as such, modal
shift is the single most important thing we
can do. But we are also committed to making
public transport greener. We have adopted
targets through to 2025 that are ‘science
based’ and aligned with limiting global
warming in line with the Paris Agreement.
Performance
− Significantly improved profit performance
reflecting: strong recovery in demand for
our services, with revenue growth of
11.0%; the benefit of cost actions taken in
2020; and ongoing support of customers
and authorities.
− £138 million improvement year-on-year.
− Improved profit performance in every
division, with Group operating margin of 4%.
Performance
− Operating cash inflow of £184 million
reflects the significant improvement in
Underlying Operating Profit to £87 million.
− Free cash of £123 million after investing
£142 million in capital expenditure
tomaintain our fleet, together with a
working capital inflow of £33 million,
reflecting strong cash collection and
apartial reversal in revenue streams
backinto cash-upfront passenger
revenuefrom payments in subsidy
incomewitha longer payment cycle.
− £319 million improvement in free
cashgeneration.
Performance
− ROCE is still depressed as we rebuild
postthe pandemic.
− ROCE of 3.4% – reflects the return to
Underlying Operating Profit in the year,
versusan operating loss in 2020.
− Invested £142 million of net maintenance
capital, predominantly in replacing our
fleet inour existing operations.
− Invested £134 million in growth capital
expenditure including vehicles to service
newcontracts in ALSA and North America.
Performance
− In 2021 we saw an increase in the
scoreto2.847.
− This score compares with the best ever
score recorded in 2019 and remains
significantly better than historical scores
asthe third lowest score.
− Our UK Bus, Spanish and North American
operations all delivered improvements in
their scores vs. 2020, with North America
delivering its lowest ever score for the
third year running, with a 64%
improvement year on year.
− On a per million miles basis, the score of
0.005 represents a 90% improvement
since we first introduced our Driving Out
Harm programme in 2011.
Performance
− Passenger numbers recovered strongly
to792 million, rising by 37% in 2021
aslockdown restrictions eased across
each of our divisions.
− Record number of passengers in
Moroccowith nearly 290 million
passenger journeys, an increase of
50%versus 2019, reflecting new contracts
inRabat and Casablanca, and growth
inexisting contracts such as Tangier.
− Strong rebound in North America, with
schools returning to full in-school learning
in the new school year.
Performance
− Total Group carbon emissions increased
by25% due to the recovery in demand for
our services, with a corresponding higher
level of services operated year on year.
− 6% increase in tCO
2
e/million km to 25.34
due to lower load factors, particularly
where social distancing restrictions
appliedin the first half of the year; with
animproving trend in the second half
oftheyear as restrictions lifted.
− We expect to make progress against
ourtargets in 2022, with a continued
recovery in passenger demand.
− Launched net zero emission fleet targets
across ALSA and North America, following on
from previously announced targets for the UK.
− Launched a Group-wide net zero emission
target for Scope 1 and 2 emissions, by 2040.
Remuneration linkage
Group Underlying Profit before tax is one
ofthree bonus inputs to the Executive
Directors’ and senior managers’ annual
bonus structure.
Remuneration linkage
Free cash flow is one of three bonus inputs
to the Executive Directors’ and senior
managers’ annual bonus structure.
Remuneration linkage
ROCE is one of the performance conditions
for the Long-Term Incentive Plan of Executive
Directors and senior managers.
Remuneration linkage
FWI per million miles is an input into the
Executive Directors’and senior managers’
annualbonus structure.
Remuneration linkage
The Executive Directors’ and senior
managers’ annual bonus structure typically
includes a component of personal objectives
relating to business development metrics.
Remuneration linkage
25% of the Executive Directors’ and senior
managers’ Long-Term Incentive Plan is linked
to reducing GHG emissions and transitioning
to ZEVs. See Remuneration Report
commencing on page 89.
Non-financial
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
29

Becoming the
environmentalleader
As a high quality shared mobility operator,
sustainability is integrated into our business
and reflected in our strategy, ourpurpose,
our values and our culture.
Our purpose, driving the modal shift from
private cars to public transport, is critical to
reducing air pollution and congestion and,
through the accessibility and availability of
public transport increasing social mobility.
But we can have a unique opportunity to
create a multiplier effect by both providing
an alternative to private cars and
decarbonising our fleet at the same time.
Vehicle emissions account for around
95%of the Group’s Scope 1 & 2 emissions.
In terms of reducing the impact of transport
on the environment, we have an opportunity
to provide an alternative to private cars but
we have a further opportunity to act on
climate change by decarbonising our fleet.
Transitioning to cleaner, greener, vehicles
is key to meeting both our environmental
and social goals and in doing so delivering
on our Evolve strategy.
This year we announced new targets
forthe decarbonisation of our entire fleet
and a Group net zero emissions target for
Scope 1 and 2 by 2040.
Reporting
We have benchmarked our strategy
toboth the Sustainability Accounting
Standards Board’s (SASB’s) Materiality
Map
®
and the United Nations Sustainable
Development Goals (SDGs), in order
toensure we are focused on the areas
where we can make the biggest impact
forour stakeholders.
This year, we have incorporated the TCFD
recommendations intoour reporting: outlining
our approach to climate related governance,
the management and integration of climate-
related risk and opportunities, our transition
plans, scenario modelling, metrics and
targets (see pages 35 to 39).
Environmental,
social and
governance
* The use by National Express Group of any data from MSCI ESG RESEARCH LLC or its affiliates and the use of MSCI logos, trademarks, service marks or index names herein, do
notconstitute a sponsorship, endorsement, recommendation, or promotion of National Express Group by MSCI. MSCI services and data are the property of MSCI or its information
providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
We are pleased that our work has been recognised:
National Express is a constituent of the
FTSE4Good Index Series
MSCI*: November 2021, MSCI rated AA,
thesecond possible highest rating, with
anindustry- adjusted score of 8.5 out of 10
Sustainalytics: Rated in 2nd percentile of
alltransport companies (out of 349) and in
5thpercentile of over 14,000 companies
inSustainalytics global universe
National Express Group PLC Annual Report 2021
30
ESG disclosure

SDG
SASB
Air Quality/
GHG Emissions
Selected targets
Sustainable Cities
and Communities
SDG 11
11.2 – as Most reliable
11.6 By 2030, reduce
the adverse per
capitaenvironmental
impact of cities,
included by paying
special attention to
airquality and
municipal and other
waste management.
Responsible
Production and
Consumption SDG 12
12.5 By 2030,
substantially reduce
waste generation
through prevention,
reduction, recycling
and reuse.
Climate Action
SDG13:
13.2 Integrate climate
change measures into
national policies,
strategies and planning.
Key metrics
− Passenger numbers
− Absolute CO
2
emissions (tCO
2
e)
− CO
2
/million
passenger km
SDG
SASB
Access & Affordability/
Quality & Safety
Selected targets
Sustainable Cities
and Communities
SDG 11
11.2 – as Most reliable
Key metrics
− Passenger numbers
− Customer
satisfaction score
(CSATS)
− Net Promoter Score
(NPS)
SDG
SASB
Labour Practices/
Employee H&S
Selected targets
Decent Work and
Economic Growth
SDG8
8.5 By 2030, achieve
fulland productive
employment and
decentwork for all
women and men,
including for young
people and persons
with disabilities, and
equal pay for work of
equal value.
8.8: Protect labour
rights and promote
safe and secure
working environments
for all workers,
including migrant
workers, in particular
women migrants, and
those in precarious
employment.
Key metrics
− Commitment to real
Living Wage (or 10%
above national
minimum wage
where Living Wage
does not exist)
− FWI/million miles
SDG
SASB
Quality & Safety/
Employee H&S/
CriticalIncident
RiskManagement
Selected targets
Good Health and
Wellbeing SDG 3
3.6 By 2020 halve
thenumber of global
deaths and injuries
from road traffic
accidents.
Decent Work and
Economic Growth
SDG 8
8.8 Protect labour
rights and promote
safe and secure
working environments
for all workers,
including migrant
workers, in particular
women migrants, and
those in precarious
employment.
Sustainable Cities
and Communities
SDG 11
11.2 – as Most reliable
Key metrics
− Zero responsible
fatalities
− FWI/million miles
− Leading safety
credential in
eachmarket
− Passenger numbers
Deliver strong financial returns
Focus areas
Be the
most reliable
Be the
safest
Be the
environmental
leader
Have the
most satisfied
customers
Be the
employer
of choice
SDG
SASB
Access & Affordability
Selected targets
Sustainable Cities
and Communities
SDG 11
11.2 By 2030, provide
access to safe,
affordable, accessible
and sustainable
transport systems for
all, improving road
safety, notably by
expanding public
transport, with special
attention to the needs
of those in vulnerable
situations, women,
children, persons
withdisabilities and
older persons.
Key metrics
− Passenger numbers
− On-time
performance
− Breakdowns
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
31

Be the environmental leader
This year we announced new targets for the decarbonisation of our entire fleet, building on the targets previously announced for the UK.
We also announced a Group net zero target for Scope 1 and 2 emissions by 2040.
Our targets for fleet transition to zero emission vehicles can be seen below:
In 2021, our environmental performance
metrics have been impacted by Covid-19,
with absolute environmental measures
down (with services closed), but intensity
measures up, due to lower occupancy
(resulting from ongoing Covid-19
restrictions and corresponding falls in
passenger numbers). See pages 221 to
223 fordetails, data and more information
onour performance.
In the UK Bus operations, we launched
20hydrogen buses, in partnership with
Birmingham City Council, which are the
first in regular service in England, outside
of London. We are pleased to be the lead
operator in Coventry, which is the UK’s
first all-electric city. The West Midlands
has 49 ZEVs operating now, with 130 more
on order which will begin service in 2023.
We also have the ambition to scale up to
over 200 Hydrogen buses from 2023.
In ALSA we introduced our first hydrogen
bus in the year and now operate a total
of21 ZEVs across ALSA. In North
Americawe operate a total of 102 ZEVs,
predominantly in our Shuttle operations.
First of a kind
In 2021, we signed the first ‘availability’
contract in the UK with Zenobe, providing
the Group with ‘ZEVs as a service’, without
the requirement for upfront capital
expenditure, with the availability provider
accepting the risk transfer for issues such
as battery performance and charging
technology. This will enable us to transition
our fleet faster than we could otherwise
doand we are aiming to have similar
contractual structures inNorth America
and ALSA.
In North America, we are running a number
of electric school bus pilots and now
operate around 100 ZEVs in WeDriveU.
We also are the first public transport
operator to run regular services using
hydrogen buses in Madrid, Spain.
Scope 3 emissions are more complex
toascertain, but we have commenced
aproject, working closely with our
coresuppliers, to quantify the Group’s
Scope 3 footprint.
Environment
Our Group target is net zero by 2040 (Scope 1 & 2 emissions)
2030
UK Bus
2035
UK Coach
Zero emission fleet targets
2035
Spain Bus
New
2040
Spain
Coach
New
2040
Morocco
New
2040
North
America
New
National Express Group PLC Annual Report 2021
32
ESG disclosure continued

Social capital
Be the safest
The safety of all our people and how
weembed safety into our culture is a key
priority. Our safety criteria and frameworks
are consistently applied everywhere we
operate. Our Driving Out Harm initiative,
launched in 2011 and refreshed as
technology has advanced, has created
and maintained a strong safety culture,
reflected in our performance.
In particular, we have invested in training
and tools (including Lytx DriveCam, Zonar,
speed monitoring, fatigue monitoring,
virtual wing mirrors, Alcolock and collision
avoidance systems) to continually improve
our safety standards.
In 2021, UK Bus and North America had
zero at-fault major responsible injuries.
A full update on our safety performance
can be found on pages 85 and 86 in the
Safety &Environment Committee Report.
Improving the accessibility and
affordability of public transport is also
keyto our business. The corresponding
positive impact on customer satisfaction
and, in turn, passenger numbers, is key to
our continued success, and our purpose:
to drive modal shift. In the UK, we
currently have Sprint rapid transit lanes
under construction which, when open
in2022, will reduce journey times on
thesame routes by 20%.
Most Satisfied Customers
We are proud of our progress. For example,
ALSA delivered significant increases in the
quality of service in Casablanca, Morocco,
working in partnership with thelocal authority.
Since 2020, measures of customer satisfaction
have increased from6.8 in 2020 to 7.8 in
2021 and the NetPromoter Score has
improved from -21to +23. This has been
driven by improvements in the customer
experience, including safety, reliability and
comfort. We have improved the diversity
ofour driverpopulation, recruiting more
female drivers, and have introduced new
routes providing access for communities
that werepreviously underserved.
North America school bus recorded its
highest ever customer satisfaction score
in2021: 66% of customers gave the
highest possible score.
In Germany, our reputation for performance
and reliability has ledtotheaward of the
largest ever emergencycontract in the
German rail industry.
Most reliable
Our customers expect us to be reliable so
they know they will get where they need to
go on time. In North America, a late school
bus has serious consequence and during
2021 we have continued to focus on
on-time yard departures.
Through detailed analysis of our operations,
we identified driver behaviour and scheduling
as the key issues.
By reviewing and refining our processes
our on-time departure has improved, leading
to more consistent school arrival times and a
reduction in penalties for lateness. This also
supported the improvement in customer
satisfaction scores, referenced earlier.
Driving customer
satisfaction in Morocco
Satisfaction rate
Satisfaction rate improvement from 6.8 in 2020 to 7.8 in 2021 and the NPS from -21 to +23
2021 31%
12%
61%8%
55%
2020
33%
Negative NPS Neutral NPS Positive NPS
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
33

Equal opportunities
We are an equal opportunities employer
and our policy is to treat all employees
equally, irrespective of race, gender,
disability, age, sexual preference, marital
status, employment status, religious or
political beliefs and social background.
We give full and fair consideration to
disabled applicants for employment,
having regard to their skills and
capabilities, as well as recognising
ourobligations in connection with the
continuing employment and training
ofmembers of the workforce who
havebecome disabled whilst in the
Company’s employment.
Where an employee becomes disabled,
the objective is to retain their services
wherever possible. We work to ensure
thecontinued career development of
disabled persons including through
training and promotion wherever their
skills and capabilities permit.
We also promote an environment free
from discrimination, harassment or
victimisation and a culture in which
members of the workforce are able
toraise concerns without suffering
detrimental treatment. They can do this
byspeaking with their line managers,
anyHR team members or via the
Company’s whistleblowing ‘hotline’,
through which colleagues can raise
concerns in confidence and anonymously
ifthey wish. All such concerns raised in
good faith are duly investigated and acted
upon. Material concerns are reported to
theCompany’s Board of Directors.
Governance
Governance is about having the best
people governing our business and
takingdecisions on its behalf at every
levelof the organisation. We believe
thatthe best people are those who
areinvested in the Company’s purpose,
behave in accordance with its values
andare fully engaged in delivering its
strategy. For full details, see our Corporate
Governance Report on pages 50 to 108.
Employer of choice
We take our responsibilities to our 44,500
employees very seriously. In 2021, our
Evolve strategy committed us to being
theemployer of choice.
During Covid-19, we maintained measures
toundertake Pulse surveys in 2021,
andwere pleased to see engagement
remained strong.
We measure progress through local
employee engagement surveys and
listening forums.We will be conducting
ourfirst global employee survey in 2022,
which willenable us to have a consistent
pictureof our engagement scores.
Building on strong foundations, our
refreshed people strategy will focus on
sector leading employee engagement:
creating a diverse and inclusive workforce
and great people processes underpinned
by our values.
Our ‘listening’ strategy is underpinned
byregular and extensive internal
communications with opportunities for
two-way dialogue. The Board held four
listening forums across all our territories
in2021, described in detail on page 64.
We have started the cascade of our Evolve
strategy to all our employees. In doing so
we will involve all employees in its delivery,
promoting a common awareness of
financial and economic factors affecting
our performance.
In 2021, we increased our focus on health
and wellbeing, providing access to wellbeing
resources across divisions and a greater
focus on mental health. We continued to
protect colleagues during Covid-19, topping
up wages impacted during furlough.
As part of our commitment to being
theemployer of choice, we support
ourpeople to participate in local
community initiatives. However,
duetoCovid-19 restrictions, our level
ofcommunity activity and associated
investment was reduced in 2021.
Nevertheless, we remain committed
toour1% PBT target.
Creating a diverse and inclusive workplace
is very important to everyone at National
Express. For example, we have recently
rolled out a programme of unconscious
bias training.
Our approach and performance are
overseen by our Board and our Global
Diversity & Inclusion (D&I) Council.
See pages 74 to 75 of our Nominations
Committee Report for more details.
We are fully committed to equal
opportunities (see below).
Human capital
Health Bus reaches
visitormilestone
We are proud that in the UK, our
employee ‘Health Bus’ won an
awardfor‘Outstanding Contribution
byan Employer to Workplace Health
and Wellbeing’ from the Society of
Occupational Medicine. The award
highlighted the excellent service the
Health Bus has provided since launch
in2014. In 2021, the bus reached the
milestone of more than 10,000 visitors
and will be continuing its journey in
2022with the launch of a new bus.
National Express Group PLC Annual Report 2021
34
ESG disclosure continued

TCFD disclosure
The Group has complied with the requirements of LR 9.8.6 R by including climate-related financial disclosures consistent with the TCFD
recommendations and recommended disclosures.
TCFD recommendation
Where in our TCFD
disclosureis this
addressed?
Governance Board’s oversight of climate-related risks and opportunities A
Management’s role in assessing and managing climate-related risks and opportunities B
Strategy Climate-related risks and opportunities (short, medium and long term) D
Impact of climate-related risks and opportunities on the strategy and financial planning E
Resilience of the organisation’s strategy, considering different climate-related scenarios,
including a 2°C or lower scenario
E
Risk
management
Processes for identifying and assessing climate-related risks C
Processes for managing climate-related risks C
Identifying, assessing and managing climate-related risks, and integration into overall
risk management
C
Metrics
andtargets
Metrics to assess climate-related risks and opportunities in line with strategy and risk
management process
F
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and the related risks G
Targets used to manage climate-related risks and opportunities and performance against targets F
A
Board’s oversight of climate-related risks and opportunities
The Board’s oversight of environmental matters is through its Safety & Environment Committee, which meets three times a year.
The Committee reports to the Board of Directors but all Non-Executive Directors are members of this Committee and the Executive
Directors also attend its meetings in view of the importance of safety and the environment to the Company.
Key activities
The Safety & Environment Committee approved the Group’s environment strategy, centred onthetransition of the Group’s fleet to
zeroemission vehicles (see section F below). The Committee reviewed anumber ofmatters relevant to the strategy, including:
− economics and expected impact on the Group’s Consolidated Income Statement and Balance Sheet;
− timetable and deliverability, including government and customer support and advancement of ZEV technology in each of the Group’s
core geographies; and
− communication to the Group’s stakeholders.
The Committee also reviewed the Group’s process for identifying climate-related risks and opportunities, andthesummary thereof (see
section D below), as well as agreeing the proposed climate scenarios to be financially modelled.Subsequently, the Committee reviewed
the two climate scenarios (see section E below). These reviewsincluded:
− due enquiry into how the risks and opportunities had been identified;
− robust challenge of whether the impact of the risks and the deliverability of the opportunities were realistic; and
− why the two climate scenarios had been chosen.
Training and development
To assist them in discharging their oversight responsibilities on the Group’s environmental strategy and being able to give direction and
raise challenges, the Directors engaged e4tech, a leading energy and sustainability strategy consultancy. The Non-Executive Directors
are also members of Chapter Zero, the UK chapter of the Climate Governance Initiative.
The Task Force on Climate-related
Financial Disclosures
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
35

B
Management’s role in assessing and managing climate-related
risksandopportunities
The Company’s Executive Directors are responsible for the delivery of the Group’s environment strategy and the sponsors of its overall
net zero and zero emission fleet ambitions. They have created a new role and appointed a Group Sustainability Director, who joined the
Group in December 2021, to support this delivery and continue to develop the Group’s environment and wider sustainability strategy.
As the Group’s environment strategy is centred on the transition of the Group’s fleet to ZEVs, the Group hasalso established two
steering groups to oversee and lead the ZEV transition. The below diagram explains the role different managers play in assessing and
managing climate-related risks and opportunities:
TCFD disclosure continued
Company Executive
Management
(Group CEO & CFO)
Principal climate-related
role&responsibilities:
− Delivery of the Group’s overall
strategy, including its zero emission
fleet transition strategy and other
climate-related opportunities
− Ensure effectiveness of the Group’s
risk management system, including
forclimate-related risks
− Management of the Functional
Managers and Divisional Executive
Managers, and being members of
theCompany ZEV Steering Group
Group Head of
Compliance&Risk
Principal climate-related
role&responsibility:
− Supports Company Executive
Management in ensuring there is an
effective risk management system
Group Sustainability Director
Principal climate-related
role&responsibility:
− Supports Company Executive
Management in developing and
delivering a sustainability strategy
Functional Managers
Managers and their climate-
relatedresponsibilities:
− Group General Counsel: assists
withthe identification of climate-
related risks e.g.by advising on
regulatory changes driving
transitional risks
− Group Insurance Manager:
assistswithmanagingclimate-
related risks e.g.by securing
insurance coveragefor physical
risks
− Group Safety Director: assists with
managing climate-related risks e.g.
by devising new safety policies and
procedures to mitigate physical
risks
− Group Procurement Director:
assists with capitalising on
climate-related opportunities e.g.
by securing ZEVsupplies on the
best obtainableterms
− Group Head of Internal Audit:
provides independent assessment
of the effectiveness of climate-
related risk management activities
and of otherfunctions’ climate-
related activities
Divisional Executive Management
(Divisional CEOs & CFOs)
Climate-related role & responsibilities:
− Build climate-related risks and
opportunities into divisional business
plans, allocate resources for their
deliveryand manage and track
theirdelivery
− Build the financial implications of
climate-related risks and opportunities
intodivisional budgets and track these
through forecasts
Company ZEV Steering
Group
Membership: Group CEO, Group CFO,
Divisional CEOs, Divisional ZEV Leads,
Group Procurement Director, Group
Commercial Director
Climate-related activities:
− Lead and oversee progress of
delivery of ZEV transition plans
− Receive reports from Divisional
ZEVSteering Groups on all
mattersreviewed by them
Divisional ZEV Steering
Groups(x3)
Membership: Divisional CEOs,
Divisional ZEV Leads, Divisional
Procurement Directors, Divisional
Commercial Directors
Climate-related activities:
− Develop and track progress against
divisional ZEV transition plans
− Track financial impact of ZEV initiatives
− Review customer appetite for
ZEVmobility
− Review ZEV supply chain relationships
− Review ZEV funding options
− Track ZEV technological advancements
Divisional Commercial
&Operations/Service
DeliveryManagers
Climate-related role & responsibilities:
− Manage the operational impact of
climate-related risks e.g.develop and
implement contingency plans to mitigate
physical risks
− Deliver commercial arrangements
tocapitaliseonclimate-related
opportunities e.g. arrange services to
cover disruption caused by physical risks
and apply for ZEV grant funding
− Assist in identifying new climate-related
risks and opportunities
National Express Group PLC Annual Report 2021
36

Identifying and assessing
The Group’s risk management system
exists to identify, assess and report on
allbusiness risks, including climate-
relatedrisks (see pages 42 to 47 for
moredetail). This year, weintroduced
aspecific climate-related risk self-
assessment, completed by all the
Group’sdivisions. Divisions assigned
aprobability of occurrence and a
financialimpact score against each
oftheclimate-related risks identified.
In assessing these risks, we have considered
materiality. For short- to medium-term risks,
we have applied alevelof materiality broadly
equivalent to that used in the audit of our
Financial Statements (5% of the Group’s
Underlying Operating Profit or £10 million
(whichever is higher)). For longer-term risks,
we assume a materiality of 10% of the
Group’s Underlying Operating Profit, as they
are further away, less certain and the Group
has longer to develop strategies to mitigate.
Physical risks and opportunities
We identified and assessed the
followingrisks:
− Severe weather events damaging
Company assets. For example,
thelossof a key location due to a
natural fire caused by extreme high
temperatures, or a natural catastrophe
such as a hurricane and/or floods.
− Severe weather events resulting in lost
revenue. For example, increased lost
operating days in North America due
tosnow causing schools to close,
orflooding prohibiting us from
operatingservices in certain locations.
− Rising sea levels impacting on
operations located near to coasts,
requiring relocation, additional
insurancepremiums or loss of premises.
− Extreme heat reducing tourism
duringpeak summer months in
Spainand Morocco.
− Increased insurance premiums.
Opportunities that could arise from
thephysical effects of climate change,
even in a scenario where there is no
coordinated, rapid central government
intervention, include the following:
For each risk, divisions have assessed
theexpected ‘velocity’ and activities
andcontrols in place to mitigate the risk,
aswell as the effectiveness of those
controls. The risk assessment is split
intotwo sections: physical risks (such
asextreme weather events), and risks
related to transition to a lower carbon
society, such as the cost or operational
challenges with transitioning rapidly to
azero emission vehicle fleet. Finally,
eachdivision has assessed potential
opportunities related to climate change.
The risk assessments were reviewed by
the Group Financial Controller, the CFO
and the Group Head of Risk, and a report
produced for the Safety & Environment
Committee of the Board (a summary of
therisks and opportunities is set out in
section D below).
However, transition to a lower carbon
society also brings potentially huge
opportunities for a public transport
company, as governments around the
world prioritise investment into public
transport to help cities solve the
challenges of the drive for a cleaner
airenvironment and, at the same time,
meet their countries’ carbon reduction
targets. Furthermore, should governments
introduce bans on vehicles with internal
combustion engines, this could drive
significant modal shift out of private
carsand into public transport.
Managing climate-related risks
Climate-related risks, like any principal
risks, areincluded in the divisional and
grouprisk registers and are assigned
RiskOwners, who are responsible for
theday-to-day management of the risk
and incharge of capturing and reporting
anydevelopments regarding the risk
intheregular Risk Management updates
that take place throughout the year.
Any requirements to increase investment
orexpenditure to further mitigate the
risksare discussed at the correct level
ofmanagement and approved as per the
Group’s delegated authority framework.
Integration into the overall
riskmanagement
The newly introduced climate-related
riskself-assessments feed into the
widerdivisional and group risk
registersand any significant climate-
related risks are captured on those for
review and discussion at the various
levelsof management and the Board.
− Local authorities/city councils could
introduce more stringent congestion
charges or emission-free zones to
counteract the impact of increased
pollution. This would drive modal
shiftonto public transport.
− Extreme weather events could have
moreof a disruptive impact on rail
infrastructure, resulting in increased
cancellations of, or reductions in, rail
services, resulting in modal shift from rail
to bus or coach, as well as opportunities
for rail replacement services.
Transition risks and opportunities
We considered the risk of regulatory
change and/or customer demand requiring
society totransition to zero emission cars
and public transport. The transition would
involve potentially material changes in
procuring, maintaining and operating the
assets, creating execution risk. It would also
require significant change to infrastructure,
along with a need to recruit, train and
retain employees with the necessary
skillsto maintain and repair these
vehicles.Furthermore, a rapid transition
tozero emission fleets could result in a
need to accelerate depreciation on
non-ZEV vehicles.
C
Processes for identifying, assessing and managing climate-related risks
D
Climate-related risks and opportunities
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
37

We developed two principal scenarios, both
of which looked at the impact on the Group
as of 2035: an extreme climate change
scenario (assuming a lack of action to
reduce emissions, resulting in more extreme
weather events) and an extreme transition
scenario (including an assumed ban on
internal combustion engines). We chose
2035 as the year to assess the impact of
ourmodelling as it was sufficiently long term
for the negative impacts of climate change
todevelop whilst also being the earliest
realistic date (even in an extreme transition
scenario) for a potential global ban on the
use of internal combustion engines.
We assessed the impact of these
scenarios on the Group’s profit, cash
flowand net debt, as well as the impact
onthe covenant tests that apply to certain
of the Group’s borrowings.
Extreme climate change scenario
The extreme climate change scenario
assumes governments fail to take
coordinated action to address global
warming, resulting in increased extreme
weather events. This scenario effectively
assumes the current warming rate
continuesunabated; rising to c.+4°C by
theend of the century, as forecast by the
Intergovernmental Panel on Climate Change
(IPCC) in its worst case ‘RCP 8.5’ scenario.
We assumed a confluence of extreme
weather events occurring at least once a
year, every year. These included: damage
to depots from flooding and fires; business
disruption from extreme heat or cold/
snow; and increased insurance premiums.
We considered the impact of these before
mitigations; we anticipate that mitigating
actions could significantly reduce risk, for
example by relocating assets away from
localised flood or wildfire risks.
We concluded that the financial impact
ofthose risks would not be material.
We arrived at this conclusion because
ofthe geographical spread of the Group;
operating from hundreds of depots across
50 cities and 11 countries. Extreme weather
events, whilst potentially very disruptive on
a localised basis, are unlikely to impact all
of the Group’s physical locations in the
same way at the same time. In any case,
the Group’s insurance policies cover many
of the risks of physical damage, as well as
the cost of business interruption.
Extreme transition scenario
This assumes that governments align on a
coordinated decarbonisation strategy to limit
the global temperature increase to 1.5°C
above pre-industrial levels, as projected by
the IPCC’s ‘RCP 2.6’ scenario. Specifically,
we have assumed that this involves a global
ban on the use of any internal combustion
engine vehicles from 1 January 2035,
announced during 2022.
This scenario identified that whilst there could
be financial impact from risks such as failing to
comply with new regulatory requirements,
difficultly in recruiting and retaining employees
with the necessary skills to repair and maintain
vehicles, and changing customer behaviour
(e.g. resulting in lower demand for high carbon
emitting activities such as flying and cruise
ships, which in turn could impact our
associated transport services to and from
those places), these are not expected to be
material either individually or in aggregate.
In modelling the impact of a ban on diesel
vehicles from 1 January 2035, we concluded
that, whilst the Group does not underestimate
the operational challenges and, to that end,
has set up the appropriate governance to
plan for it, there would be no material adverse
financial impact on the Group. This is
because: we would have 13 years to plan for
it; a 2035 target would not necessarily require
much acceleration of fleet replacement
beyond normal replacement cycles and our
existing ZEV targets; and we have already
identified that total cost of ownership for
electric buses is better than for diesel.
Opportunities
In both scenarios there are potentially very
material upside opportunities from modal shift.
In the extreme climate change scenario,
whilst it is assumed that central
governments take no action to reduce
emissions, it is likely that local government
authorities or transport authorities would
unilaterally impose measures to address
congestion and pollution in cities. These
measures could include clean airzones
orcongestion zones that levy fees for
cars,or even ban them from city centres
completely. This would force modal shift
out of private car and into public transport.
In the extreme transition scenario, as well
aslocal authorities potentially imposing
measures, it is likely that central
governments would bring about measures
toeither ban combustion engine cars or
make them prohibitively expensive, as well
as incentivising the transition to ZEVs.
The UK’s Climate Change Committee
predicts that 9-12% of car journeys could
be switched to bus by 2030, with 17-24%
being switched by 2050. According to our
analysis of the Department for Transport’s
‘Passenger transport by mode’ 2019
statistics, a modal shift of 1% from car
tobus would result in an increase of
23%bus passenger kilometres.
Conclusion
Under the most extreme climate scenarios,
we anticipate the modal shift opportunities
tomore than offset the risks.
Our conclusion does rely on various
assumptions, with varying levels of
confidence. The following two assumptions
are of note, as there is uncertainty attached
tothem and we will accordingly monitor
andre-assess closely:
− Whilst electric is becoming established as
a viable, and indeed more cost effective,
alternative for urban buses, the zero
emission solutions for long haul transport
are less developed. The current
expectation is that hydrogen will be the
solution, but the technology is not as
proven as electric buses.
− We have assumed that there will be political
will, and hence government support, in the
USA for electrification of school buses; the
early signs are promising.
E
Impact of climate-related risks and opportunities
TCFD disclosure continued
F
Metrics and targets used to assess climate-related risks and opportunities
To limit the effects of climate change, the Group will focus on reducing its carbon footprint by monitoring metrics and setting emissions
reduction targets.
In 2019, the Group adopted a set of intensity base metrics which are measured year-on-year and are used as the basis for three absolute
science-based targets on GHG emissions, using the Sectoral Decarbonisation Approach (SDA) methodology. These targets have not yet
been registered with the SBTi as the Group is first required to complete its Scope 3 footprint. These metrics or key performance indicators
(KPIs) measure the level of carbon emissions from our vehicles and our sites. Our KPIs were chosen to meet the, then-prevailing, IPCC goal
of controlling the increase in global warming tobelow 2°C. We aim to achieve these SDA KPIs over an initial seven-year performance period,
2019 to 2025, with 2018 being the baseline year. The three science-based targets sit alongside more traditional targets for onsite (Scope 1
&2) emissions, landfilled waste disposal andwater usage.
National Express Group PLC Annual Report 2021
38

As an early adopter of decarbonisation targets, the Group initially set KPIs designed to meet the IPCC goal of controlling the
increasein global warming to below 2°C. These new targets introduce Net Zero targets for the Group for the first time, as well
asnewtargets for fleet decarbonisation at the divisional level, where our vehicles currently contribute around 95% of the Group’s
Scope 1 and 2 emissions.
At the Group level, we have launched a new target to achieve net zero (Scope 1 & 2) by 2040. Delivery of our Group-wide targets
willbe achieved through our ambition to replace all carbon emitting vehicles – see page 32 for full details of our zero emission targets,
and for details of ZEVs we are currently operating. Going forward we will report externally in our annual report onthe number of ZEVs
that the Group is operating.
The performance against KPI intensity targets for 2020 and 2021 has been materially impacted by the significant reduction in passenger
numbers andmandatory requirements limiting occupancy, both of which reduce the environmental efficiency relative to normalised
operation. While absolute emissions have materially improved as we travelled significantly fewer miles and sites have been closed for
long periods, our intensity metrics have worsened (i.e. emissions per passenger km have increased), driven by lower occupancy across
the business and a mix away from long distance coach businesses and into urban bus businesses.
Please see page 98 to 99 for information on how our GHG reduction metrics and increase in zero emission vehicles are used as a
remuneration metric in relation to the Executive Directors’ and senior managers’ LTIP scheme.
The table below shows the overall Group targets through to 2025 and our progress to date from our baseline year of 2018. More detail
onthese targets and on performance against them is set out in the detailed environmental data disclosures on pages 221 to 223.
Reduction target description (metric)
Base year
(2018)
2025
target
Required %
reduction
from2018 2021
% change
from
base year
% change
YOY
(2020-2021)
Required %
reduction to
meet target
Traction Energy: (vehicle fuel and
electricity) MWh/mpkm 66.92 58.72 (12.25)% 86.19 28.8% 20.7% (31.9)%
Traction Carbon Emissions (Scope 1 & 2)
tCO
2
e/mpkm 17.67 15.45 (12.53)% 24.15 36.7% 8.4% (36.0)%
Total Scope 1 & 2 Emissions
tCO
2
e/mpkm 19.26 16.45 (14.59)% 25.34 31.2% 5.9% (34.9)%
Site Scope 1 & 2 Emissions (building use
only) tCO
2
e 41,656 38,199 (8.30)% 31,683 (23.9)% (13.3)% Met
We measure our absolute Scope 1 and 2 emissions and are increasingly developing our Scope 3 emissions reporting. By reducing
ourabsolute emissions, we believe we are reducing our exposure to risks of regulatory change, public policy and changing customer
demands – please see pages 42 to 47 for more information on our principal risks and uncertainties. As the Group decarbonises, these
risks are expected to become opportunities as the Group’s businesses leverage the environmental benefits delivered through greater
use of public transport.
tCO
2
e emissions by scope 2016 2017 2018 2019 2020 2021
% change
YOY
(2020-2021)
1 815,788 801,061 808,650 823,582 514,106 657,239 27.8%
2 95,107 60,682 48,583 49,938 67,879 73,649 8.5%
3 9,620 6,127 7,627 8,221 8,641 5,762 (33.3)%
Total 920,516 867,870 864,859 881,741 590,626 736,650 24.7%
Scope 1 emissions (from combustion of fuels) represent the largest category for emissions, with vehicle emissions representing around
95% of Scope 1 emissions. Scope 2 emissions (from electricity usage) represent energy usage both in our buildings and in our German
rail operations. Scope 3 emissions represents business travel, waste, water and certain other upstream emissions. However there is
more work to be done to quantify a complete set of Scope 3 emissions. We have initiated a screening exercise in order to develop
ourunderstanding of Scope 3 emissions and will report on our progress in our 2022 Annual Report. We recognise the importance of
emissions data, and ESG data more generally, and the quality of data underpinning it. Accordingly we continue to enhance our approach
and processes in line with external expectations. Whilst we do utilise external support in the calculation and compilation of the Group’s
emissions, the Group’s disclosures are not currently subject to independent assurance. For more information on the emissions data,
please refer to our detailed environmental disclosures on pages 221 to 223.
G
Scope 1, 2 and 3 GHG emissions and related risks
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
39

Stakeholders
Engaging our
stakeholders
Colleagues
Passengers and
customers
Why they are important to strategy
Our people are the heart of our business.
They are at the front line of executing strategy,
ensuring that our services are the safest and
most reliable and that our customers are the
most satisfied
Why they are important to strategy
Our ability to win passenger and customer
loyalty and satisfaction in both our B2B and
B2C businesses by meeting expectations for
the provision of safe and reliable services is
central to our ability to consolidate our markets
and compound our growth
Why they are important to strategy
Our suppliers partner with us to supply the
resources we need to deliver our services, and
innovative solutions to continuously improve
those services, in furtherance of our strategy
Why they are important to strategy
Our equity and debt investors give us ready
access to capital which enables us to fund the
delivery of our strategy
Why they are important to strategy
Central and local government authorities
settransport policies and provide funding
fortransport initiatives, which can create
favourable conditions for the delivery of
ourstrategy
Why they are important to strategy
The communities in which we operate drive the
demand for transport services that underpins
our strategy as well as being where our
employees live and work
How we engage
− Group HR oversight with divisional
HRprogrammes
− Regular Group communications and
divisional newsletters
− Open lines of communication with Group
and divisional management and two-way
dialogue with theBoard
− Constructive dialogue with trade unions
− Employee engagement surveys
How we engage
− Local relationships guided by Group standards
− Intuitive and highly rated websites, apps
and social media, and easily accessible
customer service centres, for passengers
− Direct dialogue with transport authority,
school board and corporate customers
− Passenger feedback and customer
satisfaction surveys
How we engage
− Local divisional relationships
supplementedby oversight from
theGroupprocurement team
− Tendering contracts and engaging
incontract negotiations
− Governing contracts including by
formalcontract reviews
How we engage
− Market announcements, financial results
presentations and investor roadshows,
including the Capital Markets Day to
communicate the Evolve strategy
− Annual General Meeting and other direct
engagement by the CEO, CFO, Chair and
other Board Directors with shareholders
and by the CFO and treasury team with
debtproviders
How we engage
− Local relationships guided by Group standards
− Formal alliances, such as the Bus Alliance
inthe West Midlands
− Direct bilateral discussions
− Industry groups and associations
How we engage
− Each division has well established
community support programmes under the
umbrella of the National Express Foundation
− The Youth Promise in the UK
− Partners Beyond the Bus in North America
− The Integra Foundation Partnership in ALSA
What they value
Our employees expect us to look after their
safety, health and wellbeing. They expect a
workplace that values diversity and champions
inclusion, and an employer that respects legal
rights. They want fair reward and recognition for
their work and opportunities for progression.
They value regular and clear communication
What they value
Our customers and passengers want safe and
reliable services, and great value for money.
They value consistent service delivery that
generates trust. They expect prompt and
pragmatic responses to changing demands,
and open and honest communication.
Increasingly they also want to do business with a
socially responsible and sustainable company
What they value
Our suppliers want to work in partnership
andcollaborate with us and invest in
relationships over the long-term to achieve
mutual benefits. They value good line of sight
on placement of orders and fair engagement
and payment terms
What they value
Investors value clarity of strategy and business
model and consistent financial performance and
returns. They expect strong risk management
and internal controls, and compliance with listing
obligations and debt terms. They increasingly
expect commitment to sustainability and
environment, social and governance matters
What they value
Governments want safe, reliable and good
value passenger transport services for the
benefit of the communities they serve. They
seek partners who will work with them to solve
the challenges of clean air and traffic congestion
What they value
The communities in which we operate look to
us for safe and affordable transport services
and opportunities for rewarding employment.
They also value companies which give back to
their communities
Delivering for them
− We maintain the highest safety standards
toprotect health and wellbeing
− We were the first transport company to
adopt the real Living Wage or equivalent
− We have increased investment in
development programmes
− We are promoting diversity and inclusion
Delivering for them
− We are consistently the most trusted
transport provider in B2C passenger trust
scores and we have consistently improved
our B2B customer satisfaction scores
− We invest heavily in our safety programme
− We train our employees to offer great
passenger and customer service
− We adapt our services, develop operational
initiatives and invest in technology, to best
meet our passengers’ and customers’ needs
Delivering for them
− We invest in long-term supply relationships
and give good visibility on orders wherever
we can, with a focus on new long-term
relationships with suppliers of zero emission
vehicles and alternative energy supplies
− We contract on mutually acceptable
commercial terms
− We meet our payment obligations
Delivering for them
− Pre-pandemic, we had a consistent track
record of strong financial performance,
which is being rebuilt post pandemic
− We maintained an investment grade rating
throughout the pandemic, which was
recently upgraded
− We secured MSCI rating AA for ESG, with
particularly strong governance scores
− We are recognised as a top-rated ESG
Performer by Sustainalytics
Delivering for them
− We invest consistently in the safety and
operational reliability of our services
− We keep service standards high while
keeping prices low on services that
generally serve communities
− We are working towards ambitious fleet
decarbonisation targets across our markets
Delivering for them
− We offer attractive employment
opportunities by investing in colleague
healthand wellbeing, paying a fair wage,
investing in training and development, and
promoting diversity and inclusion
− We support our communities through
making donations to community charities
Link to KPIs: FWI Link to KPIs: Passenger journeys and FWI Link to KPIs: ROCE Link to KPIs: Underlying Operating
Profit,free cash flow, ROCE
Link to KPIs: Passenger journeys,
GHGemissions and FWI
Link to KPIs: Passenger journeys and FWI
Market and regulatory factors
− Labour laws can impact working conditions
and cost of employment
− Qualification and training regulations can
impact recruitment time
− Immigration laws can impact access to
labour pools
− Competitor pay and working conditions can
impact recruitment and retention
− Flexible working conditions and benefits can
attract and retain a more diverse workforce
Market and regulatory factors
− Passenger confidence in public transport and
changing travel behaviours as we emerge
from the Covid-19 pandemic impact demand
− Regulation to achieve better air quality in
cities can increase the relative
attractiveness of shared mobility for
passengers and prompt B2C customers
toseek more shared mobility solutions
− The de-regulation or re-regulation of certain
markets can create new opportunities and risks
Market and regulatory factors
− Component shortages and labour shortages
can disrupt the supply chain
− Increased regulation affecting suppliers,
such as changes in import/export rules and
charges, can impact the cost and speed of
the supply chain
Market and regulatory factors
− Macro events such as the pandemic and
itsimpact on our operations and financial
performance can materially impact our
share price and liquidity
− Regulation relating to our equity listing
canincrease our costs
− Regulation of debt providers can impact
access to and/or cost of capital
Market and regulatory factors
− Governments can impose restrictions on
travel, as they did through the pandemic,
impacting demand
− Laws and regulations on driver licensing
and training, vehicle condition and testing,
and Covid-19 vaccinations or testing directly
impact our economics
− Increased regulation to reduce carbon emissions
can create demand for greentechnologies but
make older technologies obsolete
Market and regulatory factors
− Mobility restrictions put in place through
thepandemic have dented the confidence
of some members of communities in
publictransport
− Increasing regulation such as Low
EmissionZones will help drive modal
shifttopublic transport
Opportunities
− An engaged workforce can better support
delivery of strategic goals
− Knowledgeable and well trained employees
can help us innovate and identify new
opportunities
− Favourable workplace conditions can
attract and retain talent
Risks
− Labour shortages can hinder our ability to
deliver reliable services
− Discontent can lead to strikes or attrition
− Mandatory Covid-19 vaccinations or testing
can cause attrition and increased process
and costs
Opportunities
− More optimised transport networks, and
greener fleets, can attract more passengers
− Increased North America school
busoutsourcing and corporate client
shuttlesolutions can create new
customeropportunities
− Increased congestion and clean air
chargingincreases the relative
attractiveness of shared mobility
Risks
− Macro political and economic events can
change travel behaviours and transport funding
− Increased competition can erode market
share and reduce margins
Opportunities
− Our scale and long-term relationships give
us access to more competitive pricing and
to priority in manufacturing slots and so
delivery times
− Investing in long-term relationships can aid
our transition to a zero emission fleet by
giving suppliers confidence to invest in
developing innovative solutions with us
Risks
− Poor quality control by suppliers can
compromise our supplies
− Financial difficulties for suppliers can
compromise our supplies
Opportunities
− Investors’ increased focus on ESG should
increase the demand for quality public
transport stocks
− Cost and access to debt capital should
favour purpose-led companies with positive
environmental impact
Risks
− Constrained equity and/or debt markets
could increase the costs of capital or
debtfinancing
− Capital is diverted towards ‘moon shot’
disruptors impacting fundamental valuations
Opportunities
− UK bus franchising and re-regulation of
certain markets present new opportunities
in markets we are not yet in
− Increased grant funding to support
transition to zero emission fleet can
improveour economics
Risks
− Spanish concession re-tendering and
de-regulation of certain markets can
reducemargins or increase competition
− Reduction or withdrawal of government
support for public transport can worsen
oureconomics
Opportunities
− Increased congestion and clean air charging
increases the relative attractiveness of
shared mobility
− Increasing awareness of global warming
and air quality issues creates demand for
alternatives to the car
Risks
− Community confidence in using public
transport may not return, and/or travel
behaviours by members of the community
may not revert to pre-pandemic norms
Suppliers
National Express Group PLC Annual Report 2021
40

Why they are important to strategy
Our people are the heart of our business.
They are at the front line of executing strategy,
ensuring that our services are the safest and
most reliable and that our customers are the
most satisfied
Why they are important to strategy
Our ability to win passenger and customer
loyalty and satisfaction in both our B2B and
B2C businesses by meeting expectations for
the provision of safe and reliable services is
central to our ability to consolidate our markets
and compound our growth
Why they are important to strategy
Our suppliers partner with us to supply the
resources we need to deliver our services, and
innovative solutions to continuously improve
those services, in furtherance of our strategy
Why they are important to strategy
Our equity and debt investors give us ready
access to capital which enables us to fund the
delivery of our strategy
Why they are important to strategy
Central and local government authorities
settransport policies and provide funding
fortransport initiatives, which can create
favourable conditions for the delivery of
ourstrategy
Why they are important to strategy
The communities in which we operate drive the
demand for transport services that underpins
our strategy as well as being where our
employees live and work
How we engage
− Group HR oversight with divisional
HRprogrammes
− Regular Group communications and
divisional newsletters
− Open lines of communication with Group
and divisional management and two-way
dialogue with theBoard
− Constructive dialogue with trade unions
− Employee engagement surveys
How we engage
− Local relationships guided by Group standards
− Intuitive and highly rated websites, apps
and social media, and easily accessible
customer service centres, for passengers
− Direct dialogue with transport authority,
school board and corporate customers
− Passenger feedback and customer
satisfaction surveys
How we engage
− Local divisional relationships
supplementedby oversight from
theGroupprocurement team
− Tendering contracts and engaging
incontract negotiations
− Governing contracts including by
formalcontract reviews
How we engage
− Market announcements, financial results
presentations and investor roadshows,
including the Capital Markets Day to
communicate the Evolve strategy
− Annual General Meeting and other direct
engagement by the CEO, CFO, Chair and
other Board Directors with shareholders
and by the CFO and treasury team with
debtproviders
How we engage
− Local relationships guided by Group standards
− Formal alliances, such as the Bus Alliance
inthe West Midlands
− Direct bilateral discussions
− Industry groups and associations
How we engage
− Each division has well established
community support programmes under the
umbrella of the National Express Foundation
− The Youth Promise in the UK
− Partners Beyond the Bus in North America
− The Integra Foundation Partnership in ALSA
What they value
Our employees expect us to look after their
safety, health and wellbeing. They expect a
workplace that values diversity and champions
inclusion, and an employer that respects legal
rights. They want fair reward and recognition for
their work and opportunities for progression.
They value regular and clear communication
What they value
Our customers and passengers want safe and
reliable services, and great value for money.
They value consistent service delivery that
generates trust. They expect prompt and
pragmatic responses to changing demands,
and open and honest communication.
Increasingly they also want to do business with a
socially responsible and sustainable company
What they value
Our suppliers want to work in partnership
andcollaborate with us and invest in
relationships over the long-term to achieve
mutual benefits. They value good line of sight
on placement of orders and fair engagement
and payment terms
What they value
Investors value clarity of strategy and business
model and consistent financial performance and
returns. They expect strong risk management
and internal controls, and compliance with listing
obligations and debt terms. They increasingly
expect commitment to sustainability and
environment, social and governance matters
What they value
Governments want safe, reliable and good
value passenger transport services for the
benefit of the communities they serve. They
seek partners who will work with them to solve
the challenges of clean air and traffic congestion
What they value
The communities in which we operate look to
us for safe and affordable transport services
and opportunities for rewarding employment.
They also value companies which give back to
their communities
Delivering for them
− We maintain the highest safety standards
toprotect health and wellbeing
− We were the first transport company to
adopt the real Living Wage or equivalent
− We have increased investment in
development programmes
− We are promoting diversity and inclusion
Delivering for them
− We are consistently the most trusted
transport provider in B2C passenger trust
scores and we have consistently improved
our B2B customer satisfaction scores
− We invest heavily in our safety programme
− We train our employees to offer great
passenger and customer service
− We adapt our services, develop operational
initiatives and invest in technology, to best
meet our passengers’ and customers’ needs
Delivering for them
− We invest in long-term supply relationships
and give good visibility on orders wherever
we can, with a focus on new long-term
relationships with suppliers of zero emission
vehicles and alternative energy supplies
− We contract on mutually acceptable
commercial terms
− We meet our payment obligations
Delivering for them
− Pre-pandemic, we had a consistent track
record of strong financial performance,
which is being rebuilt post pandemic
− We maintained an investment grade rating
throughout the pandemic, which was
recently upgraded
− We secured MSCI rating AA for ESG, with
particularly strong governance scores
− We are recognised as a top-rated ESG
Performer by Sustainalytics
Delivering for them
− We invest consistently in the safety and
operational reliability of our services
− We keep service standards high while
keeping prices low on services that
generally serve communities
− We are working towards ambitious fleet
decarbonisation targets across our markets
Delivering for them
− We offer attractive employment
opportunities by investing in colleague
healthand wellbeing, paying a fair wage,
investing in training and development, and
promoting diversity and inclusion
− We support our communities through
making donations to community charities
Link to KPIs: FWI Link to KPIs: Passenger journeys and FWI Link to KPIs: ROCE Link to KPIs: Underlying Operating
Profit,free cash flow, ROCE
Link to KPIs: Passenger journeys,
GHGemissions and FWI
Link to KPIs: Passenger journeys and FWI
Market and regulatory factors
− Labour laws can impact working conditions
and cost of employment
− Qualification and training regulations can
impact recruitment time
− Immigration laws can impact access to
labour pools
− Competitor pay and working conditions can
impact recruitment and retention
− Flexible working conditions and benefits can
attract and retain a more diverse workforce
Market and regulatory factors
− Passenger confidence in public transport and
changing travel behaviours as we emerge
from the Covid-19 pandemic impact demand
− Regulation to achieve better air quality in
cities can increase the relative
attractiveness of shared mobility for
passengers and prompt B2C customers
toseek more shared mobility solutions
− The de-regulation or re-regulation of certain
markets can create new opportunities and risks
Market and regulatory factors
− Component shortages and labour shortages
can disrupt the supply chain
− Increased regulation affecting suppliers,
such as changes in import/export rules and
charges, can impact the cost and speed of
the supply chain
Market and regulatory factors
− Macro events such as the pandemic and
itsimpact on our operations and financial
performance can materially impact our
share price and liquidity
− Regulation relating to our equity listing
canincrease our costs
− Regulation of debt providers can impact
access to and/or cost of capital
Market and regulatory factors
− Governments can impose restrictions on
travel, as they did through the pandemic,
impacting demand
− Laws and regulations on driver licensing
and training, vehicle condition and testing,
and Covid-19 vaccinations or testing directly
impact our economics
− Increased regulation to reduce carbon emissions
can create demand for greentechnologies but
make older technologies obsolete
Market and regulatory factors
− Mobility restrictions put in place through
thepandemic have dented the confidence
of some members of communities in
publictransport
− Increasing regulation such as Low
EmissionZones will help drive modal
shifttopublic transport
Opportunities
− An engaged workforce can better support
delivery of strategic goals
− Knowledgeable and well trained employees
can help us innovate and identify new
opportunities
− Favourable workplace conditions can
attract and retain talent
Risks
− Labour shortages can hinder our ability to
deliver reliable services
− Discontent can lead to strikes or attrition
− Mandatory Covid-19 vaccinations or testing
can cause attrition and increased process
and costs
Opportunities
− More optimised transport networks, and
greener fleets, can attract more passengers
− Increased North America school
busoutsourcing and corporate client
shuttlesolutions can create new
customeropportunities
− Increased congestion and clean air
chargingincreases the relative
attractiveness of shared mobility
Risks
− Macro political and economic events can
change travel behaviours and transport funding
− Increased competition can erode market
share and reduce margins
Opportunities
− Our scale and long-term relationships give
us access to more competitive pricing and
to priority in manufacturing slots and so
delivery times
− Investing in long-term relationships can aid
our transition to a zero emission fleet by
giving suppliers confidence to invest in
developing innovative solutions with us
Risks
− Poor quality control by suppliers can
compromise our supplies
− Financial difficulties for suppliers can
compromise our supplies
Opportunities
− Investors’ increased focus on ESG should
increase the demand for quality public
transport stocks
− Cost and access to debt capital should
favour purpose-led companies with positive
environmental impact
Risks
− Constrained equity and/or debt markets
could increase the costs of capital or
debtfinancing
− Capital is diverted towards ‘moon shot’
disruptors impacting fundamental valuations
Opportunities
− UK bus franchising and re-regulation of
certain markets present new opportunities
in markets we are not yet in
− Increased grant funding to support
transition to zero emission fleet can
improveour economics
Risks
− Spanish concession re-tendering and
de-regulation of certain markets can
reducemargins or increase competition
− Reduction or withdrawal of government
support for public transport can worsen
oureconomics
Opportunities
− Increased congestion and clean air charging
increases the relative attractiveness of
shared mobility
− Increasing awareness of global warming
and air quality issues creates demand for
alternatives to the car
Risks
− Community confidence in using public
transport may not return, and/or travel
behaviours by members of the community
may not revert to pre-pandemic norms
Equity and debt
investors
CommunitiesGovernments
Our Section 172(1) Statement
Our Company Directors have had regard to our stakeholders’ interests as described on
these pages, and the other matters set out in Section 172(1) (a) to (f) of the Companies Act
2006, when making key decisions on behalf of the Company during the year under review.
Two case studies, examining the way in which they did so when making two of the Board’s
most material decisions, are set out on pages 56 to 59 of the Corporate Governance
Report, and are incorporated into this statement by reference.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
41

The Board recognises that the appropriate
management of risk is key to the delivery
of the Group’s strategic objectives. As a
leading international transport company,
the Group is exposed to an evolving
landscape of risks, whether industry-wide
or more specific to the Group, which
couldpotentially impact performance or
reputation negatively as well as positively.
The Board remains ultimately responsible
for the effective management of risk in
theGroup, and is committed to driving
continuous improvement and adopting
best practice in this crucial area.
In addition to the broad strategic
responsibilities of the Board, it:
− reviews the principal risks faced by
theGroup and approves the Group
RiskRegister;
− approves the Group Risk Appetite
Statement; and
− reviews and approves the Group
Emerging Risk Register.
Risk management
The Audit Committee reinforces the
process further by conducting ‘deep dive’
reviews, either on specific risks such as
cyber security, or through discussions with
divisional leadership teams to challenge
their divisional risk registers.
Prioritising and reporting risks
The management of risk is embedded in
the day-to-day operations of divisional
management teams. A key element of this
is the regular review and update of detailed
‘risk registers’ in each division, in which
risks are identified and assessed in terms
of both the probability of the risk occurring
and its potential impact.
Group-level risks are either derived from
a‘top-down’ review, or from the divisional
risk registers, because the risk either
affects multiple divisions, or is of a
materiality in itself that is considered
ofGroup significance. Each of these
Group-level risks is then assessed by
theBoard in terms of its potential impact
on the Group and its key stakeholders.
The Group prioritises risk mitigation
actions by considering risk likelihood
andpotential severity.
Risk appetite
The Board recognises that continuing to
deliver superior returns for shareholders
and other stakeholders is dependent
uponaccepting a level of risk. Our risk
appetite sets out how we balance risk
andopportunity in pursuit of our strategic
objectives. The acceptable level of risk is
assessed on an annual basis by the Board,
which defines its risk appetite against key
indicators including potential impact of
risk, likelihood of risk and ability to reduce
risk through mitigation. This ensures
alignment between our view of acceptable
risk exposure and the strategic priorities
ofthe Group.
Committed to managing
risk effectively
The effective management of risk is embedded in many ways inday-to-day management activities, for example the usage
ofverygranular, detailed KPI tracking inmonthly divisional reports, or robust due diligence on acquisitions. This is the ‘firstline’
oftheGroup’s risk management structure where internal control and risk management processes are based onthe ‘Three Lines
Model’, summarised below.
Defence Responsibility Actions
Oversight Board
Audit Committee
− Sets strategic objectives
− Determines overall risk cultureand appetite
− Establishes delegated authorities and clear operatingprocesses
− Reviews and approves GroupRisk Register, Risk Appetite Statement and
EmergingRiskRegister
− Conducts ‘deep dive’ reviews of divisional risk registers, or specific Group risks
Third line Group internal audit − Provides reasonable assurance that systems ofrisk management, internal control
andgovernanceareeffective
Second line Group Executive Committee
Group functions includingRisk
− Support divisions with ‘first line’ responsibilities
− Coordinate and report on Group-level risks
− Build risk capability and understanding
First line Divisional Executive Committees
Divisional management
− Identify, assess and report keyrisks
− Regularly review and update divisional riskregisters
− Implement risk mitigation plans
Risk management framework
National Express Group PLC Annual Report 2021
42

Covid-19
The Covid-19 pandemic has had a
significant impact on the public transport
sector, with mobility significantly restricted
by lockdowns across the world. From the
start of the pandemic, the Group sought to
limit its impact by renegotiating contracts,
entering into new arrangements with transport
authorities and other customers to continue
to operate on a pay-per-mile basis, and
taking swift and decisive cost reductions.
Whilst there is good reason to believe
thatthe deployment of vaccination
programmes, and the development and
introduction of new therapeutic treatments
and drugs will speed recovery from the
pandemic, the risk remains that new virus
mutations or problems with the delivery
ofthe vaccine may delay the recovery.
A moderate likelihood, significant impact
risk is reflected in the principal risk matrix
to cover both a materially slower recovery
than base forecasts and lasting
implications such as residual fear of
travelling on public transport; significantly
less travel for shopping; or a material
change in working patterns with more
ofour passengers working from home.
Climate-related risks
In line with the TCFD requirements,
aclimate-related risk assessment
hasbeen undertaken acrossthe
Groupduring 2021 and its results
havebeen reviewed bythe Board.
In summary, it has been assessed that
whilst the Board believes that it is highly
likely that extreme weather events will
increase in frequency and intensity
andanew, more stringent, regulatory
landscape demanding cleaner vehicles
willbe introduced by governments in
mostof the geographies where the
Groupoperates, the net financial
impactofthose risks will be low.
The Group’s operations are geographically
very diverse; the Group has hundreds of
depots across 50 cities in 11 countries.
It is highly unlikely that many of them
would be affected by extreme weather
events simultaneously, and therefore any
damage would be considered immaterial
from a Group-wide perspective. It was
also concluded that although it is probable
that new environmental regulation will lead
to the need to transition to zero emission
vehicles over time, the Group is already
planning to do this and has set industry-
leading targets.
In any climate-related scenario, the
opportunities associated with modal
shiftout of private cars and into public
transport are potentially very material;
more than offsetting any downside
financial impact.
Principal risk matrix
FINANCIAL/REPUTATIONAL IMPACTLOW
LOW
HIGH
HIG
H
LIKELIHOOD
1
2
6
8
7
11
9
3
10
5
4
Macro/external risks
1
Extended Covid-19 impact
2
Economic conditions/
driver shortages
3
Political/geopolitical/
regulatorylandscape
4
Climate risk (physical)
Strategic risks
5
Changing customer expectations
ina digital world
6
Climate risk (transitional)
7
Competition and market dynamics
Operational risks
8
Attraction/retention of talent/HR/
labour relations
9
Cyber/IT failure/data protection
10
Safety, security incident, litigation
and claims
11
Credit/financing
Key
Denotes movement in risk during the year
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
43

Principal risks and uncertainties
1. Extended
Covid-19 impact
2. Economic conditions/
driver shortages
Risk movement Risk appetite
N/A
N/A
Potential impact
– Once restrictions are lifted and mobility
recovers, there may be lasting implications
such as residual fear of travelling on public
transport; significantly less travel for
shopping; or a material change in
workingpatterns with more of our
passengersworking from home
Management/mitigation
– Re-balance investment across our
portfolioin the short term, e.g. less
relianceon airport work
– Remain flexible to scale service up and down
in line with changing demand
– Continued focus on customer service,
highlighting the benefits to society of
qualitypublic transport
– Relentlessly work with customers and
employees toensure safety is paramount
Opportunity
– The Group’s leadership positions in many diverse
and attractive markets are likely to strengthen,
asother operators are unable to withstand
theimpact of the pandemic
– When the world emerges out of the pandemic
itwill be confronted with the need to power
aneconomic recovery with high quality, cleaner
and greener public transport at its heart. The
alternative is inefficient, congested towns and
cities with air pollution
Change in risk in the year
– Sporadic and ongoing local and national
lockdowns throughout the year have
continued to impact mobility and hence
demand for our services
– Extensive vaccination programmes
havetaken place throughout 2021 in
allourgeographies. Vaccines and
newdominantvariants appear to have
reduced the severity of the disease,
andinturn, increased travel confidence
Risk movement Risk appetite
Moderate
Potential impact
– Declining economic conditions, particularly
following the current pandemic, potentially
impact demand for discretionary travel
– Improving economic conditions may impact
the Group’s ability to recruit drivers and other
employees, or cause inflationary pressure on
costs
Management/mitigation
– Geographical diversification of the
Groupprovides a natural hedge to
someeconomic risk
– Strategic plans are stress tested for differing
economic and pandemic scenarios
– Strong strategic focus on people/talent
management and recruitment/retention
– Delivery of excellence in service and operations
Opportunity
– Despite a generally unsettled economic
outlook due to the pandemic, private
consumption and demand conditions for
public transport continue to be strong
– Higher unemployment rates should relieve
pressure on labour costs and turnover
Change in risk in the year
– Global shortages in drivers and concern over
vaccine mandates have led toincreased
difficulties in attracting and retaining drivers
Macro/external risks
Emerging risk
The Emerging Risk Register is reviewed
and approved by the Board. The Group
considers an emerging risk to be one that
cannot yet be fully assessed and is not
currently having a material impact on the
business, but has a reasonable likelihood
of impacting future strategy or operations.
The Group’s approach to managing
emerging risk exposure is to:
− establish a wide universe of potential
emerging risk, using horizon scanning
techniques, published external research
and peer/competitor review;
− preliminarily assess these risks, taking
into account our industry sector and
market position, and our strategy, to
determine broad relevance;
− consider the potential impact of each
risk on the Group’s strategy, finances,
operations and reputation, taking
intoaccount the likelihood of the risk
occurring, and the speed with which
itmay manifest; and
− develop actions to address the risks
where appropriate.
As with the Group’s principal risks,
manyof the emerging risks present
equalor greater opportunities. For
example, climate change and ageing
population demographics, which are risks
fundamental to many sectors, are more of
an opportunity than athreat to the Group.
As part of the process to identify emerging
risks, Group businesses continue to
monitor events that may develop anywhere
in the worldwhich have the potential to
become global (e.g. a health pandemic,
political conflict, climate/weather
catastrophes) or to impact the markets
where the Group operates.
From a very wide universe of potential
emerging risks, the Group has, through
theabove process, identified a number
ofrisks that warrant closer review. These
have been further segregated into those
requiring only amonitoring approach at
present and those where actions are being
developed alongside the principal risks.
There are four risks that currently fall into
the latter category.
These broadly cover the risk of disruption
from integrators and/or demand-responsive
mobility as a service operations as well
asthefuture possibilities offered by
autonomous vehicles.
It should be noted that the Group
considers all these areas to be
significantopportunities as well as risks.
Macro/external risks
Key
Increase in
risk during
the year
Reduction in
risk during
the year
National Express Group PLC Annual Report 2021
44

4. Climate risk (physical)
Risk movement Risk appetite
N/A
N/A
Potential impact
– Loss of a key location to either a man-made
hazard such as fire, or natural catastrophe
suchas a hurricane, can result in asset loss
andlost revenue
– Widespread events such as extreme weather
can also interrupt operations and cause revenue
loss even if the Group’s assets are undamaged
Management/mitigation
– Geographical diversification of the Group
provides a natural hedge to this risk
– Established emergency and continuity plans
in each division
– Insurance coverage is available and in place
for some hazard-related risks
Opportunity
– Potential for increased legislation at local or
national level to drive modal shift to reduce
the impact on the environment
Change in risk in the year
– Continued general increase in extreme weather
events around the globe, including hurricanes,
storms, floods and wildfires
– In-depth Climate-related Risk Assessment
conducted during 2021
5. Changing customer
expectations in
adigitalworld
Risk movement Risk appetite
Moderate
Potential impact
– Increasing expectations of customers to be
ableto buy tickets and manage their travel
plansthrough a variety of digital platforms
– Failure to develop applications and digital
channels that meet these increasing
expectations could affect profitability,
customersatisfaction and the business’
abilityto capitalise on valuable customer
datatoenable commercial initiatives
Management/mitigation
– Comprehensive digital strategies developed
ineach division
– Divisional ‘digital scorecards’ are reviewed
monthly by the Group Executive Committee
tomonitor the effectiveness of various
digitalchannels
– Developing strategies for demand responsive
services
– Oversight by Chief Digital Officer
Opportunity
– Leadership in adopting new technologies will
enhance our service to existing customers
andattract new ones
– Millennials are an increasingly important target
market and more inclined to use public
transportation if the service is right
Change in risk in the year
– Significant investment in potentially disruptive
business models in the mobility space
– Innovation programmes implemented in North
America, UK and Spain continue to improve
thecustomer digital experience
– Continued increases in bookings through online
and digital mobile platforms
3. Political/geopolitical/
regulatory landscape
Risk movement Risk appetite
N/A
N/A
Potential impact
– Changes to government policy, funding
regimesor the legal and regulatory framework
may result in structural market changes or
impact the Group’s operations in terms of
reduced profitability, increased costs and/or a
reduction in operational flexibility or efficiency
– Franchise renewal risk in Spain
– UK Bus franchising or alternative models
– Financial or reputational cost of failure to
complywith changing regulations or legislation
Management/mitigation
– Constant monitoring of the political
landscapeand focus on effective
stakeholdermanagement
– Political risk is specifically considered
whenconsidering bids or new market entry
– The Group carries out appropriate lobbying
and communication, highlighting especially
the importance of public transport to central
and local government
– Focus on operational excellence and
delivering value in our franchises and
contracts, and to our fare paying customers
Opportunity
– Political and social pressure continues to
grow on congestion and clean air, which
favours public transport
– Increasing city regulation and investment
inpublic transport
– Continued liberalisation of markets
inmanyterritories
Change in risk in the year
– Following continued delays in recent years, we
now expect the Spanish Long Haul franchise
renewals process to commence in 2022.
Significant sums of money committed to drive
public transport projects in the UK, the USA
and the EU to combat pollution and congestion
– UK Bus franchising looking more likely in
somecities (e.g. Manchester) and less in
others(e.g. Birmingham)
Macro/external risks Strategic risks
Key
Increase in
risk during
the year
Reduction in
risk during
the year
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
45

6. Climate risk (transitional)
Risk movement Risk appetite
High
Potential impact
– Increasing popular, political and customer
demand for ZEVs
– Transition involves potentially material
changes in financing, to maintain and operate
the assets, creating execution risk
– Requires significant change to infrastructure
Management/mitigation
– Environmental leadership with pledge to
never again buy a diesel bus in the UK.
Ambition to reach zero emissions in UK
Busby 2030; UK Coach and Spain bus
by2035; and Spain coach, North America
and Morocco by 2040
– Cross-division executive leadership
ofZEVstrategy
– Close engagement with new and existing
original equipment manufacturers
– Pilot testing in a number of areas
Opportunity
– ZEVs present potential opportunities
toreduce the cost base of the business,
while helping cities solve the challenges
ofthe drive for a cleaner air environment
– Clear opportunities to fulfil our vehicle
requirements through ‘availability
contracts’,which require no capital
expenditure and reduce technology
risk,enabling a faster transition
Change in risk in the year
– Introduction of 20 hydrogen buses,
potentiallyscaling to 200
– Signed first ‘availability contract’ with
Zenobe for around 200 electric buses and
relatedinfrastructure
– Increased pilots in Spain and North America
– School boards in North America beginning
totake ZEV adoption seriously
– Infrastructure funders looking to facilitate
thetransition
Principal risks and uncertainties continued
8. Attraction/retention
oftalent/HR/labour
relations
Operational risks
Risk movement Risk appetite
Moderate
Potential impact
– Lack of available management talent/
leadership skills can inhibit growth
– Shortages in drivers and other key roles
candisrupt operations and lead to wage
andbenefits cost inflation
– Increased unionisation and/or poor labour
relation presents increased risk of strike or
operational disruption
Management/mitigation
– The Group is committed to employee
engagement and invests in a number
ofretention programmes
– Appropriate training is provided for
managersand supervisors
– Reward and recognition programmes
areestablished to further enhance
employeeengagement
– Focus on the effective management of
stakeholder and union relationships, and
theadvice of specialist outside counsel
issought where necessary
Opportunity
– Ensuring we have an agile, skilled workforce
willenable us to adapt to emerging challenges
and opportunities
Change in risk in the year
– Driver shortages in North America school
bus expected to last for the entire 2021/22
school year
– Lower unemployment levels in key markets
have led to higher pressures on recruitment,
retention and cost inflation
– Up-weighted Group HR team
7. Competition and
marketdynamics
Risk movement Risk appetite
N/A
N/A
Potential impact
– Competition arises from direct price
competition; inter-modal (e.g. coach vs. rail);
and emerging threats such as new market
entrants or disruptive technologies
– Changes in customer demographics impact
demand and the nature of servicesrequired
– Potential ‘disintermediation’ risk created
byaggregators seeking to ‘own’ the
customer relationship
Management/mitigation
– Commitment to service excellence,
providingthe best solutions to our customers
– Price leadership and value for money
– Revenue trends are closely monitored
andRMS deployed
– Investment in technology
– Focus on operational excellence – even
withan aggregator model, service delivery
iscritical
– Targeted acquisitions and growth in the
mostattractive markets
Opportunity
– Ageing population in major markets creates
additional paratransit opportunities
– Continuing urbanisation drives cities to partner
with high quality transportation operators
– Weaker transport operators become targets
for acquisition
Change in risk in the year
– A new discount coach brand entered
theUK(and rapidly entrenched)
– Spanish high speed rail rejuvenated
byde-regulation
Strategic risks
continued
Key
Increase in
risk during
the year
Reduction in
risk during
the year
National Express Group PLC Annual Report 2021
46

9. Cyber/IT failure/
data protection
10. Safety, security incident,
litigation and claims
11. Credit/financing
Risk movement Risk appetite
Low
Potential impact
– Major IT failure could disrupt operations
andlead to loss of revenue
– Data compromise involving a loss of customer
information could result in reputational
damage and significant remedial costs
– Breach of the UK Data Protection Act (DPA),
EU General Data Protection Regulation
(GDPR) or the US California Consumer
Privacy Act (CCPA) could result in a
regulatory investigation and financial losses
Management/mitigation
– Continuous investment in organisational and
technical measures to protect data assets
– A cyber security strategy aligned with the
threat landscape
– Regulatory compliance plans in place,
tailored to each division’s exposure (DPA,
GDPR or CCPA)
Opportunity
– Strengthened resilience against cyber threats
and IT outages increases awareness and
leverage of technology across the Group
Change in risk in the year
– Increase and professionalisation of
ransomware attacks across the globe
targeting all industries
– Additional states in the USA introducing
dataprotection legislation
– Cyber security investment continuously
supporting further resilience and risk
management
Risk movement Risk appetite
Low
Potential impact
– Major safety-related incident could impact the
Group both financially and reputationally
– Higher than planned claims or cash settlements
could adversely affect profit and cash outflow
– Non-compliance with regulations can create
legal and financial risk
– A security incident (e.g. terrorism) would have a
direct impact through asset damage, disruption
to operations and revenue loss
– Potential indirect impact from a general
reduction in the public’s appetite to travel
reducing demand and revenue
Management/mitigation
– Very strong safety culture
– Dedication to leading edge safety technology
– Appropriate insurance coverage for terrorism
and accident-related claims to employees and
third parties with experienced claims
management and legal teams in each division
– All divisions have developed emergency plans
and established safety audit programmes,
validated by Group internal audit
Opportunity
– Continued relentless focus on safety and
investment in technology should facilitate risk
and cost reductions and enable
differentiation in our customer offering
Change in risk in the year
– Whilst the pandemic has exposed the Group to
potential claims from employees or passengers
contracting Covid-19, there have been limited
claims to date and our estimation of the
potential liability has come down
– The Group was able to achieve satisfactory
insurance renewals due to our commitment
tosafety and to effective litigation/claims
management
Operational risks
Risk movement Risk appetite
Low
Potential impact
– Contract-based operations such as North
America and Spanish urban are exposed to late
or non-payment risk from customers, impacting
Group liquidity
– A material increase in interest rates would
increase the Group’s cost of borrowing
– Material tightening in investment grade credit
markets could impact the Group’s liquidity
Management/mitigation
– Close monitoring of receivables and appropriate
provisions made for possible non-collection
– Strong relationships with a number of banks
– Continued monitoring and scenario analysis
over covenants
– Appropriate liquidity maintained through
committed bank facilities, finance lease
programmes and debt capital market issuances
Opportunity
– Investment grade rating and proven track record
give efficient access to credit markets enabling
investment in growth
Change in risk in the year
– Fitch revised its rating up to BBB (stable)
– Over half a billion pounds of facilities
wereallowed to lapse during the year due
totheGroup’s significant liquidity levels
– Lending covenants amended until
December2022
Key
Increase in
risk during
the year
Reduction in
risk during
the year
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
47

Viability Statement
− Regulatory: the outcome of the majority of
themajor Spanish concessions renewals is
expected to have become more certain
− Financing: the Group’s next major refinancing
activity will be complete, with the replacement
of the £400 million bond in November 2023
Assessment of viability
In assessing viability, the Directors have
considered the Group’s three-year financial
projections (the base case) and have then
applied stress tests.
These stress tests have been derived from
theGroup’s principal risks and uncertainties
andthe Group’s estimates of the impact of
Covid-19 and climate change, using external
forecasts (such as those published by the
IMFand OECD) to help inform the shape of
these assumptions.
Covid-19 assumptions
We have specifically not modelled a new ‘black
swan’ event whereby a brand new pandemic
surfaces with little to no notice and for which
there is no vaccine; rather, we have modelled a
protracted recovery from the current pandemic
due to new strains of the virus resulting in
periodic re-impositions of mobility restrictions
orreduced levels of customer confidence to
usepublic transport in the short term.
In this downside scenario we assume that
Grouprevenue (on a constant currency basis)
does notrecover to pre-pandemic levels until
the endof 2023; this is broadly a year later than
ourbase case.
The base case assumes that there will continue
tobe Covid-19-related government support
in2022; this is detailed in the going concern
assumptions in note 2 to the Financial Statements:
the downside assumes a reduction in this funding.
No government support beyond pre-pandemic
levels is assumed beyond 2022 inany scenario.
Climate change
Utilising the Group’s new climate risk
assessment process, which is a very granular
risk assessment that has been built up by
division, the Board has also considered how
climate risks could impact the Group’s viability.
More detail on the Group’s assessment of
risksand opportunities from climate change
iscontained in our TCFD disclosures on pages
35 to 39. The key conclusions pertaining to the
viability assessment were as follows:
− Given the Group’s geographic diversity,
operating from hundreds of depots in
50citiesacross 11 countries, the financial
impact of extreme weather events over
thethree-year viability period was not likely
tobematerial. Nonetheless, for stress test
purposes, the financial projections include
some level of impact from disruption caused
by extreme weather events.
− Transitional risks, from governments taking
concerted action to reduce emissions, were
unlikely to cause any material adverse impact
over the viability period given that, whilst the
vast majority of the Group’s emissions are
from vehicles, the Group is already targeting
industry-leading timescales for transitioning
its vehicles to zero emission.
All other stress tests
The following downsides were evaluated
andmodelled:
Economic conditions/driver shortages:
drivershortages are ongoing and high levels of
inflation on wages and other costs impact profit
margins while also reducing customer demand
as a result of reduced disposable income.
Competition and market dynamics:
there is additional competition in our long haul
markets in the UK and Spain as a result of new
market entrants and aggressive high speed rail
pricing strategies, and new contract wins
assumed elsewhere in the Group in the latter
years of theassessment period are reduced.
Political/geopolitical/regulatory landscape:
the Spanish concession renewal process is
brought forward by a year and results in material
margin loss, while funding for UK Bus is also
reduced as a result of government budget cuts.
Cyber/IT failure/data protection:
ITsystemfailure and data loss following
acyberattackcauses significant revenue
lossand financial penalties.
Safety, security incident, litigation
andclaims:
following a major safety/terrorism-related
incident, either on board our vehicles or in the
wider markets in which we operate, there is a
reduction in demand for discretionary travel.
Conclusion
In the unlikely event of this concurrence of
events, the Board would mitigate through
reduced operating costs and capital
expenditure. During assessment, the
Group’scontinued cash generation, access
toliquidity and funding, and mitigation actions
demonstrated that it could tolerate the impact
ofthe risk scenarios without exhausting liquidity
or breaching covenants.
Viability Statement
Based on the results of the analysis, the Board
has a reasonable expectation that the Group
willcontinue in operation and be able to meet
itsliabilities as they fall due over the three-year
period of assessment.
Assessment of prospects
The Board continues to believe that the
Group’sprospects are positive in the
mediumtolong term.
We are diversified:
− No one contract contributes more than
4%torevenue
− Other than during the Covid-19 pandemic,
theGroup receives only 4% of its revenue
inthe form of grants and subsidies
− The Group operates in 50 cities across
11countries and across multiple modes
orusages of transport
− We are positioned to benefit from the
futuretrends in transportation
− Transport demand continues to grow whilst
private car ownership is beginning to decline;
the gap will be filled by public transport
− Public transport is fundamental to the
long-term solution for the urban challenges of
congestion and poor air quality; our ambition
to be the world’s greenest transport company
places us at theforefront of this opportunity
We invest in the business to secure its future:
− Over the five years prior to the Covid-19
pandemic, 90% of free cash flow was
reinvested into the business
− We invest in technology to allow customers
toaccess our products at competitive
pricesand to deliver our services safely
andefficiently
− We continue to selectively bid for and
winnewbusiness, including the recent
emergency award in Germany and new
winsin school bus and shuttle.
The Group has strong liquidity, with £0.9 billion
of cash and undrawn facilities available as at
31 December 2021. The Group’s credit rating
isinvestment grade.
Principal risks and
assessmentperiod
The Board reviewed the Group’s principal risks
(pages 42 to 47), looking at each risk’s impact,
likelihood and the timeframe over which the risk
was likely to reduce Group cash flows. On this
basis, the highest impact and highest likelihood
risks were considered in modelling a severe
butplausible downside to assess the Group’s
future viability: the specific risks modelled are
outlined below. While there are other principal
risks included in the Group’s risk matrix, these
are not considered to have a material financial
impact in the near term.
The Board concluded that three years would
continue to be an appropriate timeframe
overwhich to assess the Group’s ongoing
viability, aswithin that timeline a number of
risks’impact/likelihood was expected to reduce,
principally including the following:
− Pandemic: the impact of Covid-19 is expected
to have subsided in any scenario
Viability
National Express Group PLC Annual Report 2021
48

Non-financial information statement
The new non-financial reporting requirements contained in Sections 414CA and 414CB of the Companies Act 2006 require us
toprovideinformation to help stakeholders understand our position on non-financial matters. The table below sets out where
youcanfind this information:
Requirement Policies which govern our approach Further information
Environment
− Group Environmental Policy
− Health & Safety Policy
+ Environment page 32
+ Safety & Environment Committee Report
pages84 to 88
+ Environmental performance data
pages221to223
+ www.nationalexpress.com/sustainability
Employees
− Equal Opportunities & Diversity Policy
− Workplace Rights Policy
+ Social capital page 33
+ Human capital page 34
Human rights
− Human Rights Policy
− Modern Slavery Policy
− Whistleblowing Policy
− Privacy Policy
+ Human capital page 34
+ Audit Committee Report pages 78 to 83
Social matters
− Rather than a specific policy, our approach
to social matters is framed by our
Community and Environment Value
+ Social capital page 33
Anti-corruption
andanti-bribery
− Anti-bribery and Corruption Policy
− Purchasing Policy
+ Social capital page 33
+ Audit Committee Report pages 78 to 83
Policy implementation,
due diligence
and outcomes
− Anti-bribery and Corruption Policy
− Purchasing Policy
+ Corporate Governance pages 50 to 70
(including Board activity during the year page
55 and Audit Committee Report pages 78 to 83)
Principal risks
and impact
on business activity
+ Risk management pages 42 to 47
+ Audit Committee Report pages 78 to 83
Description of
businessmodel
+ Our business model pages 6 to 7
Non-financial key
performance
indicators
+ Key performance indicators pages 28 to 29
+ Environmental performance data pages
221 to 223
Our 2021 Strategic Report, from the inside front cover to page 49, has been reviewed and approved by the Board.
Ignacio Garat
Chief Executive Officer
National Express Group
9 March 2022
Non-financial
information statement
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
49

Introduction to corporate governance
Chairman’s introduction
toCorporate Governance
Strong corporate governance
underpinning our purpose
anddecision-making
I am pleased to report that our well
established corporate governance has
helped the Board lead the Company
andits Group through another challenging
but exciting year in which we have seen
that our corporate purpose, of leading
themodal shift from cars to mass transit,
has remained critical to the customers and
communities weserve. This Corporate
Governance Report describes our
governance practices. Our corporate
governance framework within which those
practices operate is set out on page 67.
During the year, the Board and its
Committees took a number of key
decisions and oversaw a range of
initiatives and events, from approving
theGroup’s Evolve strategy and the
adoption of ambitious carbon reduction
targets, to overseeing the performance of
each of the Group’s business divisions and
the development and rollout of the
OPERATE programme, as well as the
delivery of the Company’s Capital Markets
Day.
The Board also decided to make an offer
to effect the potential combination of the
Company and Stagecoach.
Governance ataglance
Effective decision-making, including in
accordance with our s.172(1) duty – see
the Board’s activities on page 55 and the
s.172(1) case studies on pages 56 to 59
A focus on Board and senior management
succession planning, talent development
and diversity – see our Nominations
Committee Report on pages 71 to 77
Robust and ever-evolving risk
management and internal controls –
seeour Audit Committee Report on
pages 78 to 83
A drive to lead the industry in safety
andenvironmental matters – see our
Safety & Environmental Committee
Report on pages 84 to 88
Carefully balanced Director pay decisions,
having regard to all relevant considerations
– see ourAnnual Statement by the
Remuneration Committee Chair and
Directors’ Remuneration Report on
pages 89 to 108
As explained in the Company’s market
announcement made on 14 December
2021, such a combination represents a
strategically compelling proposition which
is expected to createvalue for both the
Company’s and Stagecoach’s
shareholders and otherstakeholders, for
the reasons summarised on pages 56 and
57 which formpart of oursection 172(1)
statement. Shortly prior to the approval of
this Report,Stagecoach announced that it
hadreceived a competing offerwhich
itsboard of directors intends to accept.
The Company’s Board is considering
itsoptions but continues to believethatthe
Company's offer for Stagecoach is
compelling.
Strategy, risk management,
internal control, and safety
&environmental leadership
The Board is responsible for reviewing
theGroup’s strategy and its management
of risk and ensuring that there is a robust
system of internal control in place. The Board,
supported by its Audit Committee, has
been active during 2021 indischarging
these responsibilities, byoverseeing the
launch of the Evolve strategy, conducting
‘deep dive’ reviews of Group-wide and
divisional risks, including climate-related
risks, and monitoring the Group’s overall
compliance programme.
The Board’s Safety & Environment
Committee also continued to monitor the
Group’s all-important safety programme
and its continued drive to demonstrate
environmental leadership in our industry
through the development of the fleet zero
emission transition strategy, reinforced
bythe adoption of new zero emission fleet
targets for the Group’s ALSA and North
American operations which complement
those already adopted for UK operations.
Further details of these matters are set
outthroughout the Strategic Report, in
theAudit Committee Report and in the
Safety & Environment Committee Report.
Board and senior management
composition, succession,
talentand diversity
After welcoming our new Group CEO,
Ignacio Garat, and bidding farewell to
someof our long-standing Non-Executive
Directors in 2020, we continued in 2021
torefresh our Board. We were delighted
towelcome Carolyn Flowers as a new
Non-Executive Director, a Q&A with whom
can befound on page 76. We also said
goodbye toanother long serving Non-
Executive Director, Dr Ashley Steel, who
wethank for her significant contribution
tothe Board during her tenure.
Sir John Armitt CBE
Chairman
Our well established corporate governance has helped the
Board lead the Company and its Group through another
challenging but exciting year”
National Express Group PLC Annual Report 2021
50

During 2021, we developed succession
plans forthe Board and its Committees,
both with and without the potential
combination with Stagecoach, with a focus
on my succession. I will remain asChairman
to provide continuity of leadership to the
Company and the Board throughout its
response to the recent developments on the
combination and pending the selection of
my successor, about which we will update
shareholders indue course. Underlying
these plans, wehave a strong and stable
Board composed of Directors with a wide
rangeof relevant knowledge, skills and
experience, as more fully explained in
ourNominations Committee Report.
This was confirmed in 2021 when, we,
asaBoard and as individual Directors,
underwent anexternal evaluation.
This gave us valuable insights intoour
collective andindividual strengths and
areas forfurther development, positioning
us well tomaintain and further enhance
our effectiveness. The Board’s
Nominations Committee, supported by
thenew Group HR & Communications
Director, also undertook its first ‘deep
dive’into senior management succession
planning and thetalent pipeline, giving us
a deeper understanding of where we have
talent tonurture and gaps to fill and how
management intend to do this.
Further information about the Board’s and
its Committees’ composition, succession
plans and evaluation, senior management
succession and talent development plans,
and how diversity and inclusion are being
fostered on the Board and across the
Group, can be found in our Nominations
Committee Report.
Remuneration balance
betweenrewardand restraint
The Board, through its Remuneration
Committee, is responsible for ensuring
appropriate arrangements are in
placeforrewarding and incentivising
management in the context of Company
and individual performance as well
astheworkforce, shareholder and
widerstakeholder experience.
The Remuneration Committee has sought
to achieve theright balance between
rewarding theExecutive Directors and
incentivising themto continue their work
on leading theCompany’s recovery and
exercising restraint on their total pay,
having regard toboth the majority and
minority shareholders’ views demonstrated
throughtheir voting on the Director pay
resolutions at the Company’s 2021 AGM
and a further consultation undertaken
withmajor shareholders in advance
ofthisyear’s paydecisions.
Further information about the Remuneration
Committee’s decisions onExecutive Director
pay, alongside the regulated information
about all Directors’ pay, can be found in the
Directors’ Remuneration Report.
Stakeholder relations
I explained last year that the challenges
brought on by the Covid-19 pandemic
hadreinforced just how important the
Group’s relationships with its stakeholders
are. Accordingly, considerations relating
tostakeholders haveremained high on
theBoard’s agendain 2021, including
through: directengagement with equity
and debtinvestors on key matters; direct
engagement with the workforce; and
opportunities to hear other stakeholders’
views either directly orviathe Group’s
businesses, as described on pages
62 to66 of this Report.
Annual General Meeting
Our Annual General Meeting (AGM) will
beheld at 2.00pm onWednesday, 11 May
2022 in the Banqueting Hall at Glaziers
Hall, 9 Montague Close, London SE1 9DD.
We intend to conduct this year’s AGM as an
in-person meeting to give shareholders
theopportunity to meet with Directors after
the last few years of this not being possible.
Further information about the AGM and
how to vote your shares on the resolutions
to be proposed at it isset out in the Notice
of AGM which hasbeen made available
alongside thisAnnual Report. However, if
any restrictions are reintroduced by the UK
Government on in-person meetings by the
time of the meeting, we will need to observe
these andwe will keep shareholders
updated onany consequential changes
tothe AGMarrangements via our website
andmarket announcements.
Conclusion
Before introducing the remainder of this
Corporate Governance Report, I would
liketo say that I am extremely proud
oftheway our global businesses have
adapted to the changing mobility
environment in which they work and
howeveryone who works in and with
ourbusinesses, from our colleagues
toourcustomers, suppliers and other
stakeholders, have contributed to and
supported that work. I thank them all
andextend my thanks to my fellow
Boardmembers for continuing to
providestrong leadership in these
changing times.We, as a Board, look
forward to2022 with confidence.
Corporate Governance
Compliance Statement
The Board is pleased to report
thatthe Company has applied the
Principles and complied with the
Provisions of the UK Corporate
Governance Code issued by the FRC
in July 2018 (which can be found at:
www.frc.org.uk) for its financial year
ended 31 December 2021, except part
of Provision 38 (where alignment of
the Group CFO’s pension with the UK
majority workforce rate will occur in
2023 as further explained on page 91).
This Corporate Governance Report
asa whole explains how the Company
has applied the Principles and complied
with the Provisions of the UK Corporate
Governance Code, but below is a guide
to where the most relevant explanations
are given for each of the Principles:
Board leadership and
companypurpose
Principles A, B, C, D and E
Pages52 to 66
Division of responsibilities
Principles F, G and H
Pages67 to 70
Composition, succession
andevaluation
Principles I, J, K and L
Pages71 to 77
Audit, risk and internal control
Principles M, N and O
Pages78 to 88
Remuneration
Principles P, Q and R
Pages89 to 108
Sir John Armitt CBE
Chairman
9 March 2022
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
51

Board leadership and Company purpose
Board of Directors
Sir John Armitt CBE
Non-Executive Chairman
Independent on appointment
Appointed: January 2013 and as
Chairman February 2013
Experience: Sir John has extensive
experience in the transport, engineering
and construction sectors, including of
working with government atministerial
level. He also has significant board-level
experience both as a Chairman and Chief
Executive, having held Chair roles at the
Government Commission on the Thames
Estuary, Olympic Delivery Authority and
Engineering and Physical Science
Research Council, and Chief Executive
roles at Network Rail, Costain Group
andUnion Railways.
Sir John was awarded a CBE in 1996 for
hiscontribution to the rail industry and
aknighthood in 2012 for services to
engineeringand construction.
Key strengths in support
oftheCompany’s strategy:
− Provides effective leadership of
theBoard inits robust review and
careful monitoring ofthe delivery
oftheCompany’s strategy
andmanagement ofrisk
− Offers valuable insights into UK
government policy and priorities on
public transport andinfrastructure
− Promotes strong corporate
governance,including by promoting
theBoard’s understanding of
stakeholders’ views, aiding its
assessment of whether the Company
isachieving the six desired stakeholder
outcomes of the Evolve strategy
Current external appointments:
− Chairman, National Infrastructure
Commission
− Non-Executive Director, Berkeley
GroupHoldings PLC
− Non-Executive Director, Expo 2020
Committee membership:
SE
N
Jorge Cosmen
Non-Independent Deputy Chairman
Appointed: December 2005
Experience: Jorge has accumulated
awealthofexperience in international
business. He currently serves as the
Non-Executive Chair of the Group’s ALSA
holding company, having also held that role
in an executive capacity until ALSA was
acquired by National Express in 2005.
Prior to that, he was Corporate Manager
ofthe ALSA Group and worked in banking,
sales and distribution. He also served for
several years as a Non-Executive Director at
Bankia prior to its merger with Caixabank.
Jorge has an international MBA from
theInstituto de Empresa in Madrid.
Key strengths in support
oftheCompany’s strategy:
− Deploys the breadth and depth of his
knowledge of the Group’s business
insupporting executive management
intheir delivery of strategy and
management of risk
− Uses his insights into the international
passenger transport sector to assist
executive management in identifying
andassessing opportunities and risks
− Supports the Chairman in assisting
theBoard to better understand
stakeholders’ views and track the
delivery of the six desired stakeholder
outcomes of the Evolve strategy
Current external appointments:
− None
Committee membership:
SE
N
Committee membership key
Committee Chair
A
Audit
N
Nominations
R
Remuneration
SE
Safety & Environment
Committee membership is shown
asat9March 2022
Carolyn Flowers
Independent Non-Executive Director
Appointed: June 2021
Experience: Carolyn has held several
significant leadership roles in the North
American passenger transport industry,
inboth the private and public sectors.
She served for many years as Chief
Operations Officer for Los Angeles
Metro,following which she worked
foranumber of US State Transit
Authorities and the US Federal Transit
Administration. She currently serves
onseveral transportation industry and
trade non-profit boards and advises
onUSinfrastructure development
atInfraStrategies.
Key strengths in support
oftheCompany’s strategy:
− Deploys her significant experience of
andexpertise in North American transit
operations to support and challenge
executive management in applying
theCompany’s consolidate and
compound customer proposition as
comprised in its Evolve strategy
totheCompany’s North American
transit business
− Uses her experience of beinga
customer ofNorth American transit
services to support executive
management and the Company on its
pathway to achieving themost satisfied
customer outcome of its Evolvestrategy
Current external appointments:
− Partner and Managing Principal,
InfraStrategies LLC
− Independent Director, CirclePoint
Committee membership:
SE
A N
National Express Group PLC Annual Report 2021
52

Karen Geary
Independent Non-Executive Director
Appointed: October 2019
Experience: Karen is a former FTSE 100
HR Director with an extensive track record.
She brings over 20 years’ of leadership
experience, including of international
HRand business transformation, from
across a variety of industries in the UK,
USand Europe. She held an executive
committee role as Group HR Director
atThe Sage Group plc for more than
10years. After this, she held executive
roles with aUS based software business,
followed by a FTSE 100 software company
which she originally joined as a Non-
Executive Director and Chair of its
Remuneration Committee. Since 2019,
Karen has pursued a Non-Executive
portfolio career.
Key strengths in support
oftheCompany’s strategy:
− Puts people, their wellbeing, inclusion,
recognition, reward and development
attheheart of the Board’s discussions,
supporting the Company onits pathway
to achieving the employer ofchoice
outcome of its Evolve strategy
− Uses her deep experience of supporting
organisations undertaking M&A and
transformation to support theCompany
in the delivery ofits compound and
consolidate customer proposition
comprised initsEvolve strategy
Current external appointments:
− Non-Executive Director, ASOS PLC
− Non-Executive Director, Sabre
Insurance Group plc
Committee membership:
SE
N R
Ignacio Garat
Group Chief Executive Officer
Appointed: November 2020
Experience: Ignacio has more than
26years’ strategic, commercial,
operational and business transformation
experience in the freight andlogistics
industry. Previous roles include CEO Spain
& Portugal and CEO Brazil at TNT and
Senior Vice President for Southern Europe,
France and Benelux at FedEx. He has a
track record of leading international,
complex, operational businesses to
achieve clear strategic purposes,
adoptingan inclusive management culture
in doing so aided by hisfocus on people.
Ignacio has a degree in international
business from the American University
ofParis and a postgraduate diploma
inmanagement and business studies
fromthe University of Warwick.
Key strengths in support
oftheCompany’s strategy:
− Provides strategic and operational
leadership for all five of the customer
propositions comprised in the Evolve
strategy, leveraging his previous
management experience ofdelivering
operational transformation and his
commercial acumen to exploit new
and profitable growth opportunities
− Champions all six of the desired
stakeholder outcomes of the Evolve
strategy, including by maintaining a
dedicated focus on the Company being
the safest and most reliable passenger
transport operator, and having the most
satisfied customers, including through
prioritising the digital agenda
− Drives culture transformation fostering
astrong sense of purpose, including
byempowering people and developing
talent, advancing the Company’s
ambition tobetheemployer of choice
within passengertransport
Current external appointments:
− None
Chris Davies
Group Chief Financial Officer
Appointed: May 2017
Experience: Chris has more than
26years’ financial, commercial,
treasuryand IT management experience.
He hasastrong track record working
withinternational organisations in these
fields in both established and emerging
markets, including in his work with
Andersen Consulting, The Boots
Companyplc and Marakon Associates.
He previously served as Group Financial
Controller and Treasurer and then interim
Group Chief Financial Officer at Inchcape
plc, and Chief Financial Officer for North
America at Diageo plc, where he also
heldseveral other senior roles.
Chris is a qualified management accountant.
Key strengths in support
oftheCompany’s strategy:
− Provides effective financial support
forthedevelopment and delivery
ofCompanystrategy
− Maintains robust management
ofinternal controls, including
riskmanagement, providing a sound
control and risk environment within
which strategy canbedelivered
− Champions the Company’s
environmental leadership comprising
one of the stakeholder outcomes of
theEvolve strategy
− Builds strong relationships with the
Company’s equity and debt investors
helpingto ensure their understanding
oftheCompany’s strategy
Current external appointments:
− Non-Executive Director, Motability
OperationsGroup PLC
Further details about Directors’ independence, conflicts of interest and commitment are set out on pages 69 to 70
ofthisCorporateGovernance Report.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
53

Matthew Crummack
Senior Independent Director
Appointed: May 2015
Experience: Matthew has extensive
international management experience
across multiple functions in the consumer
product and digital services industries,
including online travel, financial services
and consumer goods. He has held
executive management roles including
Group Chief Executive Officer atGoCo
Group plc and Chief Executive Officer
atlastminute.com. Prior to those, he was
SeniorVice President (Lodging, Europe
andUS)at Expedia and he held various
seniorroles atNestlé UK and Procter &
Gamble. He is currently CEO atDomestic
& General Ltd.
Key strengths in support
oftheCompany’s strategy:
− Uses his extensive and current executive
management experience of developing
and delivering strategy to support and
challenge executive management in
their delivery of the Company’s strategy
− Provides advice and support to the
Company on its delivery of the five
customer propositions on which the
Evolve strategy isbuilt through their
digital enablement
− In his role as Senior Independent
Director, facilitates healthy debate
among, and effective decision-making
by, the Board onstrategic matters
Current external appointments:
− Chief Executive Officer, Domestic
&GeneralLimited
Committee membership:
SE
N
R
Board leadership and Company purpose continued
Board of Directors continued
Mike McKeon
Independent Non-Executive Director
Appointed: July 2015
Experience: Mike has wide-ranging
international experience in financial and
business management across a number
ofsectors, having previously served as
Chief Financial Officer at Severn Trent
andChief Financial Officer at Novar.
Earlier in his career,he held various
seniormanagement andadvisory roles
atRolls-Royce, CarnaudMetalbox,
ElfAtochem and PwC. He has also
previously held other Non-Executive
roles,including as Senior Independent
Directorat The Merchants Trust PLC.
Mike is a chartered accountant.
Key strengths in support
oftheCompany’s strategy:
− Provides strong oversight of the
Company’sfinancial and other internal
controls, helping to sustain a controlled
environment in which the Company’s
Evolvestrategy can be delivered
− Uses his previous executive experience
ofdeveloping and delivering strategy
inregulated and complex international
operational businesses to support and
challenge thestrategic plans and
initiatives to achieve theEvolve strategy
customer propositions ofreinvigorating
public transport and delivering
operational transformation
Current external appointments:
− None
Committee membership:
SE
A
Dr Ashley Steel
Independent Non-Executive Director
Appointed: January 2016
Resigned: December 2021
Experience: Ashley has significant
international experience of advising FTSE
listed and Fortune 500 boards, including in
relation to strategy, M&A,organisation
effectiveness, risk management and HR,
across multiple sectors including transport,
infrastructure, technology, media, professional
services and business services, from her role
at KPMG. She has also held a number of
Non-Executive roles with the Civil Aviation
Authority, the British Broadcasting Corporation
(BBC) and GoCo Group plc.
Ashley has a PhD in management from Henley
Business School.
Key strengths in support oftheCompany’s
strategy upto3December 2021:
− Used her significant experience advising
companies on the development and
implementation of strategy in supporting
and challenging executive management
intheir delivery of the Company’s strategy
− Offered wide-ranging insights based on
thebreadth of industries sheadvised
− Had a strong focus on the retention, reward
and incentivisation of management in the
delivery of strategy
External appointments asat3December 2021:
− Non-Executive Director, Cineworld Group plc
− Non-Executive Director, Vistry Group plc
Ana de Pro Gonzalo
Independent Non-Executive Director
Appointed: October 2019
Experience: Ana has extensive financial
andgeneral management experience,
havingworked for a number of multi-
national companies across a variety
ofindustries. She was Chief Financial
Officer at Amadeus, the travel technology
company, for over 10years and, prior
tothat, was General Manager of Sacyr
Vallehermoso, Chief Financial Officer of
Metrovacesa and held aNon-Executive
Director position at Merlin Properties.
She also currently holds a numberof
otherNon-Executive Director roles.
Key strengths in support
oftheCompany’s strategy:
− Provides added strength to oversight
ofthe Company’s financial reporting,
risk management and controls,
mitigating risks to the delivery of
theCompany’s Evolve strategy
− Provides relevant insights from her
recent experience in the online travel
services industry to support the
Company in the digital enablement
ofthe five customer propositions on
which the Evolve strategy is built
Current external appointments:
− Non-Executive Director,
Indra Sistemas SA
− Non-Executive Director, ST
Microelectronics NV
− Non-Executive Director, Novartis AG
− Independent Director, National
AdvisoryBoard, representing
Spainbefore the Global Steering
Groupfor Impact Investment
Committee membership:
SE
A R
National Express Group PLC Annual Report 2021
54

Board activity in 2021
The Board’s principal activities in 2021 were those as set out in the table below:
Strategy,
business and
operational
performance
− Reviewed and approved the Group’s Evolve strategy and its communication to investors via the Capital Markets Day
− Reviewed the launch, implementation and progress of the OPERATE programme across the Group
− Considered and approved a potential combination between the Company and Stagecoach
− Reviewed the performance of each of the Group’s divisional businesses, including ongoing careful monitoring
oftheUK Coach business’ performance and the outcome of the North American transit business review
− Reviewed and approved bids for passenger transport concessions in Dubai, Chile and Ireland, and reviewed
andapproved the acquisition of Transportes Rober in Spain
− Monitored trading and market conditions, competitor activity and the economic, legislative and political landscape
forall the Group’s businesses
Safety and
environmental
leadership
− Received reports from the Safety & Environment Committee on its review of the Group’s safety performance,
including core safety initiatives, any major safety risks or incidents and action plans arising from the same
− Received reports from the Safety & Environment Committee on the Group’s environment performance and the
adoption of ambitious Group-wide environmental targets and zero emission vehicle targets and strategy
− Reviewed the Group’s first zero emission fleet and charging infrastructure availability contract
Financial
performance
− Received reports from the Audit Committee on the integrity and reasonableness of, and reviewed and confirmed,
theCompany’s and its Group’s full year and half year financial results, the going concern basis on which they were
prepared and the Company’s viability
− Approved the Group’s annual budget and reviewed the Group’s performance against both budget and forecasts
inlight of changing market conditions as the Group emerged from the Covid-19 pandemic
− Reviewed the growth and cost synergies capable of being delivered through the potential combination with
Stagecoach, including the Qualified Financial Benefits Statement
− Reviewed the Group’s financing arrangements, including headroom against Board-set liquidity requirements
andBank-set covenants, and approved further amendments to debt covenants for going concern purposes
− Considered the Company’s dividend policy and reconfirmed the Board’s intention to reinstate dividends as soon
asthe Company’s financial performance and the restrictions in its amended debt covenants allow
Risk
management
and internal
control
− Reviewed the Group’s risk appetite and its management of principal and emerging Group-wide risks
− Received reports from the Audit Committee on its reviews of cyber risk and divisional risk management
− Received reports from the Audit Committee on, and made its own conclusion about, the effectiveness of the Group’s
system of internal control, including the findings and effectiveness of the internal audit function and the work of the auditor,
as well as the Group’s compliance framework and its tax and treasury functions' activities
− Reviewed the Group’s guarantees register and approved the annual renewal of the Group’s insurances
− Received legal briefings on the Company’s and its Directors’ responsibilities under the UK Takeover Code in the context
ofthe potential combination with Stagecoach
− Received regular updates on legal and regulatory matters, including material legal claims brought by and against the
Group’s companies and legal aspects of material transactions entered into by the Group’s companies
Leadership,
people and
remuneration
− Received and approved recommendations from the Nominations Committee on the appointment of a new Non-
Executive Director, the proposed size and composition of the Board and its Committees both with and without
thepotential combination with Stagecoach, and the annual re-election and election of Directors at the next AGM
− Received reports from the Nominations Committee on senior management succession plans, talent identification
anddevelopment programmes, and diversity and inclusion initiatives
− Reviewed quarterly people reports, with a particular focus on the conditions in the Group’s labour markets causing
driver shortages and the action plans designed to mitigate such shortages
− Took part in workforce engagement activities
− Received reports from the Remuneration Committee on its activities, including its deliberations on Chair, Executive
Director and senior management pay, bonus awards and long-term incentive awards, made in the context of
consideration of pay conditions across the Group, shareholder and wider stakeholder experience
− Reviewed and approved Non-Executive Director fees
Governance and
stakeholder
relations
− Reviewed and approved the Company’s Annual Report, including its fair, balanced and understandable nature
− Considered the voting outcome at the last AGM, consulted with shareholders to ensure their views were understood
andsought to understand wider stakeholders’ views through various means, including direct engagement
− Reviewed the Board’s schedule of reserved matters, its Committees’ terms of reference and the Group’s delegated
authorities framework, and refreshed the Board’s conflicts of interest and external interests policies
− Considered developments in corporate governance and reporting, including the BEIS consultation on restoring trust
in audit and corporate governance and TCFD recommended disclosures on climate-related risks and opportunities
− Participated in and reviewed the outcome of an external evaluation of the Board, its Committees and individual
Directors, and agreed follow-up actions to address its recommendations
Further details about the Board and Committee meetings held during 2021, Directors’ attendance at those meetings and the Board and
its Committees’ processes are set out on pages 69 to 70 of this Corporate Governance Report.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
55

Board leadership and Company purpose continued
Section 172(1) statement
Among its principal activities during the year under review, the Board decided to make an offer to effect the potential combination of the
Company and Stagecoach as it firmly believed such offer was in the best interests of the Company’s shareholders and wider stakeholders.
In making its decision, the Board also took into account all the matters set out in section 172(1)(a)-(f) of the Companies Act 2006:
The rationale for the Board’s decision
tomake an offer for Stagecoach was
rooted in the long-term benefits the
Company could derive from it, including:
− significant growth and cost
synergies,including through
operational efficiencies across
combined UK networks, shared
operational best practices and
implementing environmental and
sustainability solutions at scale,
whichcould deliver strong value
creation for shareholders;
− a stronger pro forma balance sheet
creating additional capacity for
growth investment, particularly in
theGroup’s North American and
ALSA businesses; and
− enhanced opportunity for contract
winsby the National Express Transport
Solutions business, by leveraging the
broader physical footprint of the
combined group’s operations and
applying the ‘best of both’ of National
Express’ and Stagecoach’s capabilities.
s.172(1)(a)
The likely consequences
ofany decision in
thelongterm
The Board took into account that
allCompany shareholders would
betreated in the same way during
implementation of the potential
combination and would benefit
proportionately and pro rata to their
shareholdings from the potential
combination, with:
− each shareholder having the right to
vote to approve such combination
ona one vote per share basis; and
− each shareholder (together with
Stagecoach’s shareholders) sharing
pro rata in the expected value
creation through accretive earnings
per share and returns on invested
capital, including via a targeted
returnto and growth in dividends.
The Board had particular regard
totheinterests of the Group’s
employees (and the employees of
theStagecoach group) by noting
thatthe potential combination:
− would afford them increased
opportunities, including for
trainingand development and
careerflexibility; and
− was not expected to result in any
joblosses forfrontline employees.
However, the Board also took into
account that the potential combination
would likely involve headcount
reductions in duplicative corporate and
administrative roles, which downside
was weighed in the balance against
both the upsides for other employees
and the benefits to be derived by other
stakeholders, including shareholders,
customers andcommunities generally.
s.172(1)(b)
The interests of the
Company’s employees
Potential combination of National Express and Stagecoach
s.172(1)(f)
The need to act fairly
asbetween members
ofthe Company
National Express Group PLC Annual Report 2021
56

The Board took into account
thatthepotential combination
wasexpected to:
− realise wider benefits for customers,
including optimised routes and
schedules, comfortable and
environmentally friendly fleet, flexible
ticketing options and enhanced
customer engagement technologies;
− create stronger relationships with
existing and potential new suppliers
to service the larger scale supply
needs of the combined group; and
− create a stronger platform for the
combined group in the UK bus
marketfrom which it could deepen
relationships with central and local
government stakeholders, including
via the ‘Bus Alliance’ model adopted
with Transport for West Midlands.
In addition, the Board would work with
other key stakeholders in implementing
the potential combination, including:
− the Group’s debt providers, who
wereapproached for andgavetheir
consent to the potential combination
priortoit being announced;
− the UK Competition and Markets
Authority, with which both the
Company andStagecoach would
work with to obtain clearance for
thepotential combination; and
− the UK Takeover Panel, which
wasand willcontinue to be duly
consulted on all relevant aspects
ofthe potential combination.
s.172(1)(c)
The need to foster
theCompany’s
businessrelationships
withsuppliers, customers
and others
The Board considered that the potential
combination would enable the Group
toextend its zero emission fleet and
netcarbon zero ambitions across the
combined group and toimplement
itsindustry-leading environmental
solutions, such as itszeroemission
vehicle availability model, at scale.
The Board also noted that the
combinedgroup would serve
widercommunities across the UK,
bringing the customer benefits noted
inthe box above to more communities.
The importance of maintaining a
reputation for high standards of
business conduct underpinned the
Board’s approach tothe potential
combination, asdemonstrated by:
− its selection of Stagecoach,
asonewith the same premium
equitylisting obligations, corporate
governance standards, as well
ascommon business ethics and
values, as the Company;
− the financial and legal due diligence
undertaken on the Stagecoach group,
andthe competition risk assessment
conducted, prior to the potential
combination being announced;
− the Company’s approach to funding
Stagecoach’s defined benefit pension
schemes, similar to that for its own
defined benefit schemes; and
− the Company’s and its Directors’
compliance with its and their
obligations under the Companies
Actand UK Takeover Code.
s.172(1)(d)
The impact of the
Company’s operations
on the community
andthe environment
s.172(1)(e)
The desirability of the
Company maintaining a
reputation for high standards
of business conduct
Combining the Company
and Stagecoach…
could accelerate the modal shift from cars to mass transit by expanding the Group’s
presence in the UK, thereby bringing the customer benefits to a wider audience and
accelerating the Group’s expansion in other markets
The Board also considered how the potential combination could advance the Company’s purpose:
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
57

Board leadership and Company purpose continued
Section 172(1) statement continued
The Group’s UK Coach network was particularly hard hit by the Covid-19 pandemic due to its commercial (rather than contracted)
model, the (principally) discretionary nature of its customers’ traveland the absence of UK Government revenue support for coach
services. Throughout the pandemic, the Board therefore closely monitored the performance of this business and, notwithstanding
thefull year loss generated in 2020, took a key decision in Q1 2021 to continue to support the UK Coach business, at a continued
loss,having particular regard to the factors set out in section 172(1)(a), (b), (c) and (d) of the Companies Act 2006:
Employees’ interests featured prominently
in the Board’s deliberations about the
future of the UK Coach network, as:
− while some redundancies had been
made in UK Coach in 2020, and
further potential redundancies were
considered in Q1 2021 when the
network was closed down during the
second lockdown to reduce costs, the
Board rather endorsed the UK Coach
business’ continued use of the UK
furlough scheme to retain UK Coach
employees, and to continue totop
uptheir salaries to 100% while still
onfurlough; and
− the longer-term retention of talent
within the UK Coach business, and
particularly in its sales and marketing,
commercial and network planning
teams, was key to enabling the UK
Coach business to capitalise on the
pent-up demand for travel when
Covid-19 restrictions eased.
In making its decision to support the UK
Coach network through the Covid-19
pandemic, the Board had particular
regard to what it believed was a positive
medium to long-term outlook for the
business. This belief was based on:
− the historic, pre-pandemic, financial
performance of the UK Coach
business, which, since 2012 (and
withdrawal by the UK Government of
the Coach Services Operators Grant),
had consistently grown its revenue
and profit, achieving c.10.5%
compound annual growth per annum,
and was achieving an excellent return
on capital employed of c.63% and a
cash flow conversion rate of c.85%;
− the underlying pent-up demand for
UK coach travel, as demonstrated by
the rebound in passenger numbers in
the summer of 2020 between the first
and second Covid lockdowns and
another rebound when the second
lockdown ended in March 2021;
− the market-leading position and well
recognised and trusted brand
theNational Express coach network
enjoys, which has generated existing
customer loyalty and continues to
winnew customers; and
− the investment and improvements
made in and to the UK Coach
networksince 2012, including
theinvestment in the revenue
management system and single view
customer account, and improvements
in on-board safety, comfort and
entertainment and in network
planning, which helped generate the
pre-pandemic returns and creates
aplatform for further growth.
The Board also had regard to the
shortand longer term consequences
ofany decision to cease operating
theUK Coach network or to not
resumeits operations as soon as UK
Government restrictions permitted,
which were the likely loss of market
share, customer loyalty anddilution
ofthe brand’s reputation, which the
Board considered would damage the
long-term prospects noted above.
s.172(1)(a)
The likely consequences
of any decision
in the long term
Supporting the continued operation of the UK Coach business
s.172(1)(b)
The interests of the
Company’s employees
National Express Group PLC Annual Report 2021
58

Preserving a viable National Express
UKCoachnetwork for the long term ...
facilitates our purpose of leading a modalshiftfrom cars to mass transit
The Board took specific account of the
importance of relationships with other
stakeholders when determining the
appropriate action to take on the UK
Coach network. This was demonstrated
through agreements that:
− coach network operations should
resume as soon as the second
lockdown ended and ramp up
inlinewith passenger demand,
notwithstanding ongoing challenges
such as social distancing which
necessarily reduced coach load
factors and impacted profitability, to
service the pent-up demand from our
customers for UK coach travel and
thereby seek to retain their loyalty;
− the UK Coach business would
continue to support the majority of its
UK network partner operators who
perform parts of the UKCoach
network rather than wholly suspending
or ending those relationships, primarily
tohelp ensure the survival of those
partners, which in turn helped to
ensure the business’ ability to quickly
restart and flexibly ramp up the UK
Coach network in response to
passenger demand after lockdowns
ended and travel demand returned; and
− the UK Coach business would
renegotiate its contracts with
commercial partners, such as
airports, coach stations, sales and
marketing agents, and other suppliers
such as vehicle manufacturers, to
better reflect the reality of short-term
reduced travel demand and
constraints on capital but longer-term
preservation of those well established
and mutually beneficial relationships.
The Board noted that communities and
the environment would also benefit from
the Board’s decision to support the UK
Coach business, as:
− its UK Coach network services more
communities across the UK than any
other coach provider, so continuing in
operation preserves mobility and, for
those communities served by other
intercity transport modes, choice for
customers; and
− the UK Coach business has adopted
the ambitious target of its fleet being
net carbon zero by 2035, and already
represents a lower carbon mode of
transport than cars and other mass
transit modes, so preserving the
network reduces the impact of
mobility on the environment.
s.172(1)(d)
The impact of the
Company’soperations
onthecommunity and
theenvironment
s.172(1)(c)
The need to foster
theCompany’s
businessrelationships
withsuppliers,
customersand others
The Board also considered how supporting the UK Coach business would advance the Company’s purpose:
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
59

People
Investing in our people
enables us to improve
ourcustomer service
offering,reinvigorating
public transport by
growingpatronage
Safety
Our prioritisation of safety,
and reducing accidents,
reinvigorates public
transport by enhancing
passenger confidence
Community & Environment
Our desire to ensure communities
arebetter served by public transport,
andour commitments to reducing our
impact on the environment, encourage
ustofill the transit gap
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Vision:
The world’s
premier shared
mobility operator
Purpose:
To lead the modal
shift from cars to
mass transit
Excellence
Our focus on excellence,
delivered through efficiency
initiatives, leads to
operational transformation
Customers
Putting customers at
theheart of what we do
winsus their loyalty, and builds
our credentials, helping us
winmore multi-modal
expansion opportunities
Purpose, vision, values and strategy
The Company has a clear purpose and vision to be achieved through the execution of the Company’s Evolve strategy. This strategy
isbuilt upon five customer propositions, each underpinned by the focused application of technology, to deliver six outcomes for
stakeholders, all as more particularly explained on pages 10 and 11 of the Strategic Report.
Alignment of purpose, vision, values and strategy
The Company’s traditional values – of Safety, Excellence, Customers, People and Community & Environment – support the execution
ofthe Evolve strategy as they are directly aligned with the six outcomes for stakeholders which the five customer propositions are
intended to achieve, as illustrated by the examples of this alignment given in the diagram below:
Board leadership and Company purpose continued
Purpose, values and culture
National Express Group PLC Annual Report 2021
60

Culture framework Board methods of monitoring culture
Our health and safety priority
The Company’s prioritisation of health and safety, led from the top,
ensures it remains central to all business decisions and operational
practices. The Company’s global safety policies, and numerous health
and safety practices and procedures developed to implement them, set
high and consistent standards of health and safety across our operations
worldwide. The inclusion of stretching safety targets in Executive
Directorand senior manager short-term incentives maintains focus.
− The Safety & Environment Committee of the Board monitors the
development and implementation of, and compliance with, the
Company’s global safety policies and reviews major safety incidents.
− Members of the Safety & Environment Committee perform safety tours
to assess safety compliance and safety culture across different parts
of the business and report on them to the Board.
− The Group CEO, supported by the Group Safety Director, constantly
monitors the Group’s safety performance, including by reference to a
series of KPIs, including FWI, Preventable Accidents and Driver Risk
scores, and reports on such performance to the Board at every Board
meeting and to the Safety & Environment Committee of the Board.
Our environment strategy and ambitions
The Company’s environment strategy, centred on the transition of
theGroup’s fleet to be zero emission, and its environment ambitions to
achieve zero emission fleets within each of its current business divisions
by future dates, is driving a focus on their achievement. Its seven-year
environmental KPIs enable progress against ambitions to be tracked and
the inclusion of carbon reduction and ZEV increase targets in Executive
Director and senior manager long-term incentives maintains focus.
− The Safety & Environment Committee of the Board reviews and
approves the Group’s environment strategy and targets, and monitors
progress against them.
− The Group CEO and Group CFO, assisted by the newly appointed
Group Sustainability Director and newly established Company Zero
Emission Vehicle Steering Group, regularly assess the development
and delivery of zero emission fleet and other environmental initiatives,
track progress against the environmental KPIs, and report on such
performance to the Safety & Environment Committee of the Board.
Our corporate policies
The Company’s corporate policies, including those on anti-bribery and
corruption, anti-slavery and human trafficking, data protection and
whistleblowing, set clear expectations, and mandates, for every member
of the workforce to perform the Company’s business with integrity and in
accordance with applicable laws. During the year under review, a new
Head of Group Compliance was appointed to champion compliance, and
a compliance framework has been developed to bring greater alignment
to corporate policies.
− The Company’s compliance framework, and the corporate policies
which form part of it, are reviewed and approved by the Board.
− The newly appointed Head of Group Compliance leads the Company’s
compliance programme, manages its development andenforcement,
and reports to the Audit Committee of the Board onits effectiveness.
− Any serious allegations of breach of corporate policy or other
wrongdoing, whether identified through internal audits, the
whistleblowing hotline (via which colleagues can raise concerns in
confidence and anonymously if they wish) or otherwise, are duly
investigated, acted upon and brought to the Board’s attention.
Our employee policies and practices
Fair and transparent employee policies and practices ensure thatour
colleagues’ rights are respected in accordance with applicable laws,
theircontracts and recognised collective bargaining agreements.
A number of programmes and initiatives also support our colleagues'
health and wellbeing, develop their talent, recognise their excellence,
encourage innovation and promote diversity and inclusion among them.
− The Board receives quarterly people reports which report on all
keypeople data and trends, including levelsofengagement.
− The Board also receives reports on key people matters as they
arise,including the outcome of staff surveys and the progress of
tradeunion relations.
− The Nominations Committee of the Board performs ‘deep dive’ reviews
into the effectiveness of senior management succession plans, talent
identification & development plans, and diversity & inclusion initiatives.
− The Group CFO chairs the Group Diversity & Inclusion Council
andDirectors engage directly with colleagues via workforce
engagement events.
Our supplier protocols and procedures
Standard supplier protocols and procedures, standard contractual
termsand audits of suppliers ensure that key suppliers operate their
businesses and respect their workers’ rights in the same way that we do.
Building long-term, mutually beneficial, relationships with suppliers also
enables the Company and such suppliers to understand, and assist in the
achievement of, what is important to each other.
− The Board receives stakeholder reports on, and presentations from,
major suppliers to the Group from time to time.
− The Group Procurement team monitors compliance by key suppliers
with the Company’s policies, protocols and procedures and, during the
year under review, reported directly to the Board on how it manages
supplier relationships and the mutual value derived from them.
Our values
The Company has an embedded set of values which all colleagues are
encouraged to live by. The identification in the Evolve strategy of the
sixstakeholder outcomes, by which the Company will measure whether it
is delivering on its strategy and achieving its purpose, is serving to further
reinforce the importance of the values as those outcomes are so closely
aligned with the values as explained on page 60.
− The Board’s engagement with the workforce, through the means
described on pages 63 to 65, enables the Board to assess first-hand
whether our colleagues are living by our values.
− The Board also hears customer, supplier and other stakeholder
viewsthrough the means described on pages 40, 41 and 66,
facilitating afurther assessment of whether our stakeholders
considerwe are living by our values.
Through its monitoring activities, the Board is satisfied that the Company’s culture is strongly aligned with its values.
Culture
The below table sets out the framework of policies and practices which support our culture and explains how the Board monitors culture:
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
61

Board engagement with
equityand debt investors
The Board is committed to maintaining
atwo-way dialogue with its equity and
debt investors. The Chairman, supported
by the Senior Independent Director
andthe Executive Directors, has
overallresponsibility for ensuring
thiscommunication is effective.
The Executive Directors, with the
supportof the investor relations team,
undertook their traditional investor
relations programme during the year
whichis aligned with the Company’s
financial reporting calendar, holding
meetings withand giving presentations
toexisting and prospective equity
investors and participating in analyst-
arranged investor conferences and
investment bank sales desk meetings.
These events are shown by the blue text in
the investor relations programme opposite.
In addition, during 2021 the Executive
Directors, supported by the executive
management team, arranged the
Company’s first Capital Markets Day
inseveral years at which they unveiled
theCompany’s Evolve strategy and
announced the Company’s adoption
ofambitious net zero and zero emission
fleet targets across its wider Group.
Thiseventis shown in yellow opposite.
Further, the Executive Directors,
theChairman and members of the
Remuneration Committee undertook
additional engagement with equity
anddebt investors throughout
theyearinconnection with:
− further rounds of amendments to
theCompany’s financial covenants
initsmajor debt facilities and private
placement note programmes, as shown
in purple text;
− further communications and one-on-one
discussions with major shareholders
about the 2020 Directors’ Remuneration
Report and new Directors’ Remuneration
Policy in the lead up to and following
the2021 AGM, particularly to ensure
theBoard understood the views of the
minority of shareholders who voted
against that Report or Policy at such
AGM, as shown in green text; and
− the potential combination with
Stagecoach, as shown in red text.
The Board is kept fully informed of
theviews of shareholders via regular
reports from the Executive Directors
ontheir investor relations activities and
viafeedback from the Chairman and
otherNon-Executive Directors on their
engagement. The Company’s brokers
andinvestor relations advisers also
provide regular confidential feedback
oninvestor views, perceptions and
opinions which are shared with the Board.
The AGM gives shareholders the
opportunity to engage with the Company
andits Board of Directors regarding the
matters before the meeting and, whereas
shareholders could not be physically
present at the 2021 AGM due to lockdown
restrictions, the Company was pleased
towelcome shareholders virtually.
The Company’s 2022 AGM is proposed to
be held as an in-person meeting togive
shareholders the opportunity to meet with
Directors after two years of not being able
to do so. Further details are in the Notice
of 2022AGM.
However, the Company will observe any
UK Government restrictions on travel and
in-person meetings in place at the time, so
the AGM arrangements could be subject
to change.
Shareholders should look out for any such
changes which will be communicated by
market announcement and the Company’s
website: www.nationalexpressgroup.com
/investors/agm.
During 2021, 10 analysts published equity
research notes covering the Company.
Details of the firms that currently follow
theCompany appear on the investor
section of the Company’s website. Bank
ofAmerica and HSBC analysts were
restricted from publishing research notes
following the Company’s possible offer
announcement for Stagecoach as they
areacting as the Company’s financial
advisers on that transaction.
Investors can find more information about
the Company on the investor relations
section of the Company’s website:
www.nationalexpressgroup.com/investors.
2021 investor relations programme
Jan − Closed period
Feb − Closed period
− Discussions with debt investors on third amendments to financial covenants
Mar − 2020 full year results announcement and full year results investor roadshow
− Meeting with HSBC sales desk
− Fireside investors chat hosted by Berenberg
− Jefferies Pan European investors conference
Apr − Berenberg Sustainable Development Goals investor conference
− Letters sent to major shareholders on executive remuneration matters in advance
ofthe 2021 AGM, following earlier communications in November and December 2020
May − Q1 trading update
− 2021 AGM
− One-on-one discussions with those major shareholders who wished to engage on
executive remuneration matters in advance of and following the 2021 AGM
− Berenberg US investor conference
− Meeting with Berenberg sales desk
− Fireside investors chat hosted by Berenberg
− Fireside investors chat hosted by Jefferies
− Meeting with Exane BNP sales desk
Jun − Meeting with Liberum sales desk
− Fireside investors chat hosted by Liberum
− US group investor meeting hosted by HSBC
− Goldman Sachs Travel and Leisure investor conference
− Pan European Transport virtual fieldtrip hosted by Bank of America
Jul − Closed period
− 2021 half year results announcement
− Meeting with HSBC sales desk
− Discussions with debt investors on fourth amendments to financial covenants
Aug − 2021 half year results virtual investor roadshow
Sep − 2021 half year results virtual investor roadshow cont.
− UBS Business, Transport and Leisure investor conference
− Citi Mid-Cap and Growth investor conference
− Rule 2.4 possible offer announcement about the potential combination with
Stagecoach, followed by(duly chaperoned, in line with the Takeover Code)
one-on-one discussions with certain shareholders
Oct − Q3 trading update
− Capital Markets Day
Nov − US investor meetings in New York
− Investec Best Ideas investor conference
Dec − Berenberg European investor conference
− Meeting with HSBC sales desk
− Rule 2.7 firm offer announcement about the potential combination with Stagecoach
Board leadership and Company purpose continued
Stakeholder relations
National Express Group PLC Annual Report 2021
62

7
Board engagement withtheworkforce
With the lifting of restrictions on mobility and in-person meetings in the second half of 2021, the Board was pleased to resume
itsprogramme of visits to the Company’s operations.
Coventry bus depot site tour
In November 2021, the Board toured the Coventry UK Bus depot which involved a full programme of activities:
Spoke with the
operationsteam about
thenetwork control
activities controlled
fromthe control room
Given a DriveCam
demonstration, including
description of how the
technology works, observation
of driver footage to understand
how driver risk is identified
andexplanation of how driver
coaching is performed to
improve driving standards
Arrived at the Coventry
depot on one of
NationalExpress’ new
zeroemission buses
Educated about the
propulsion mechanisms
forhydrogen and electric
buses and discussed the
operational adjustments
for,andsafety features of,
thesenew technologies
Received feedback from
OPERATE programme
delegates who proudly
presented their projects to
deliver efficiencies and cost
savings at the ground level
Learned about engineering
transformation which is
driving efficiencies and cost
savings, including through
greater use of technology
Met with the engineering
apprentices who
discussedtheir training
anddevelopment
Left the Coventry
depoton a National
Expresscoach
6
8
9
1
10
Boarded the employee
health bus and heard
aboutits valuable
provisionofon-site health
andwellbeing support
forcolleagues, which was
particularly valuable during
the pandemic when there
was reduced access to GPs
4
3
5
Received a welcome
andsafety brief from
thedepot manager
2
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
63

Board engagement with the workforce continued
As in recent years, the Board's programme of site visits wassupplemented by Directors participating in workforce engagement events
with groups of colleagues to discuss matters of importance to both them and the Board. Non-Executive Directors conducted four
workforce engagement events during 2021, each of which took the form ofa roundtable discussion between twoNon-Executive
Directors and members of the workforce drawn froma variety of roles. In 2021, all the Non-Executive Directors participated inat
leastone of these events which ensured every Director benefitted from direct touchpoints with colleagues and was able to take
whatthey learned from talking to colleagues into account back inthe Boardroom. Further detail on these events is set out below:
Board leadership and Company purpose continued
Stakeholder relations continued
Three online discussion groups were heldin
May 2021, one for colleagues fromeach of
the Company’s principal business divisions
of UK & Germany, NorthAmerica and ALSA.
Colleagues’ rolesranged from bus and
coach driversto vehicle technicians and
operational and functional support team
members. The UK event was attended
byKaren Geary and Ashley Steel, the
NorthAmerican event by MikeMcKeon and
Matthew Crummack and the ALSA event
byJorge Cosmen andAna de Pro Gonzalo.
Due to the roles performed by the
colleagues participating in these events,
thediscussions tended to focus on the
front-line successes and challenges
ourcolleagues face. These included the
success of some of the new ways of
working both during the pandemic and
asthe Company has emerged from it, such
as the speed and efficiency of ramping up
and down operations and the ability for
support functions to effectively support
theoperations while working from home.
They also included the challenges that
haveaccompanied those successes, such
as more frequent driver rota changes as
service levels havechanged to respond
topassenger demand and more overtime
working due to higher absences caused
by colleague illness orisolation. Topical
issues,such as how tosolve driver
shortages and whether there should be
enhancements to employees’ medical
benefits, were also discussed.
However, front-line colleagues were also
keen toengage in discussions about the
Company’s strategy and how itcould best
compete against alternative forms ofshared
transit, demonstrating acollective sense of
ownership of and responsibility for the
Company’s success.
Colleagues, when asked about the
Company’s diversity &inclusion,
saidthey felt the Company was
averywelcoming place to work”
It was interesting that colleagues
onthe front-line were keen
todiscuss and know about the
Company’s future. The deep
sense of pride andbelonging that
colleagues feltisvery encouraging”
Karen
Geary
Ana de Pro
Gonzalo
Front-line colleague
roundtable
Management colleague
roundtable
A further online discussion group was
heldinOctober 2021 whichbrought
together middle managers fromacross
theCompany’s principal business
divisions of UK & Germany, North America
and ALSA. The Chairman and Carolyn
Flowers attendedthis discussion group.
This event had an open agenda andsome
of the key themes discussedwere the
Company’s Evolvestrategy, ensuring a
people first approach, the Group’s future
challenges and opportunities, solving the
driver shortage issue, and the Company’s
succession and talent initiatives, all of
which topics echoed those that are
regularly discussed in theBoardroom.
The takeaways from this event have
been very rewarding –itwill help us
asaBoard in assessing the strategic
plan andinitiatives moving forward”
It was pleasing that our people could
attend from all over the world and the
event was uplifting as there was a real
spirit of looking and moving forward”
Sir John
Armitt
Carolyn
Flowers
National Express Group PLC Annual Report 2021
64

Carolyn
Flowers
As part of her induction, Carolyn Flowers:
− visited the WeDriveU headquarters
inSan Francisco where she learned
about theshuttle business’ plans for
expansion, observed a demonstration
oftheir drivermonitoring technology
anddiscussed efficiencies with the
vehicle maintenance team;
− visited a special education facility
inOakland, where she learned
abouttheir route management
partnership; and
− with Group CEO, Ignacio Garat,
visitedthe CDT paratransit operations
in Chicago where they spoke with
drivers, the dispatch team and the
maintenance team, as well as
thegeneral manager. Carolyn and
Ignacio also visited a majorschool
buscustomer’s facility in Chicago
whichgave important insight into
stakeholder views.
I was impressed with what
Iobserved,particularly in terms of
initiatives that could be used as a
differentiator in the paratransit and
transit markets. It was also pleasing
tohear discussions about efficiency
from the ground level in the business”
New Non-Executive
Directorvisits to our
NorthAmerican
operations
Board engagement with the workforce continued
These touchpoints for the Board withthe workforce are not just an important means of monitoring theCompany’s culture, but they
alsoserve to deepen Directors’ understanding of how the Group’s operations function in practice andtohear directly from colleagues
about matters that can be directly relevant to the Board’s decision making or can give better context tothat decision-making.
Whereas the events described on page 64 were organised online in response to pandemic-related restrictions, both colleagues and
Board members have commented on how the videocall format is encouraging more open dialogue. This is because it removes some
ofthe practical and emotional barriers to people coming together and sharing their observations and opinions and therefore a mix
ofin-person and online events will be used going forward.
When restrictions on travel and in-person meetings eased, Carolyn Flowers was able to visit a number of the North American operations:
Our Board workforce engagement methodology
As explained in the Company’s previousAnnual Reports,
ourworkforceengagement events are a variant of the UK
Corporate Governance Code recommended ‘designated
non-executive director’ method ofengaging with the
workforce and are considered by the Board to be more
effective than that or the other Code recommended methods.
This is because: they give more of the Directors and indeed
more colleagues the opportunity tospeak with each other;
they take due account of the size, geographic expanse and
cultural diversity of the Company’s workforce; andthe
relative informality of their nature encourages open and
honest discussion.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
65

Board leadership and Company purpose continued
Stakeholder relations continued
Understanding other stakeholder views
Most engagement with other stakeholders, such as customers and passengers, suppliers, governments and regulators, is led by
theGroup’s business divisions which use a variety of well established methods to engage and understand stakeholders’ views.
Divisional management report on the same to the Board.
However, to supplement these means of the Board understanding stakeholder views, the Board also engages directly with wider
stakeholders where there is appropriate opportunity to do so. As travel and in-person meeting restrictions eased in the second half
of2021,the Board was pleased to welcome Councillor Waseem Zaffar, the cabinet member for Transport and the Environment from
Birmingham City Council (BCC), into the Boardroom to hear more about the Birmingham Transport Plan published in October 2021,
hisplans forthe future of public transport in Birmingham city and what is important to him:
Further information about the Company’s key stakeholders, how we engage with them, what they value, how we deliver for them, as
wellas the risks and opportunities inherent in those relationships,is set out on pages 40 and 41 of the Strategic Report. Examples of
howdifferent stakeholders’ interests have beentaken into account by the Board in its decision-making are also set out on pages 56
to59 ofthis Corporate Governance Report.
BCC needs to work in
partnership with private bus
operators and Iwelcome
the Company’s partnership
approach, the success of
which is proven through
higher levels of bus
patronage in Birmingham
vs the national average
The Birmingham
Transport Plan sets
out clear principles for
unlocking the potential
ofpublic transport in
orderto improve the
cityforeveryone
Introducing the
Birmingham Clean Air Zone
was designed to encourage
the modal shift from cars
to public transport, with
revenues re-invested into
public transport
The Company’s
commitment toazero
emission fleet is a ‘game-
changer’ for clean air
inBirmingham city
BCC, the Company and
TfWM are working together
to secure DfT funding for
hundreds more hydrogen
buses and infrastructure
Giving priority road
access to buses is key to
reducing the congestion
and air pollution caused by
cars on the road, improving
productivity and public
health in the city
Removing Birmingham
city’s flyovers is intended
toaccelerate the modal
shift from cars to
publictransport
The development and
implementation of the
emergency bus response
plan during the pandemic
was evidence of BCC
andthe Company working
well together in partnership
for the benefit of the
localcommunity
The Company’s roll-out
of cross-Birmingham-city
routes is creating greater
connectivity which appeals
to passengers
Public transport is an
enabler, in particular to
help young people
access jobs
The 2019 bus survey
reveals that bus reliability is
the most important factor
in encouraging the use
ofpublic transport
National Express Group PLC Annual Report 2021
66

The Company’s corporate governance framework, and its core component parts, are explained below:
Corporate governance framework
Nominations
Committee
Reviews the structure, size, composition and effectiveness of the Board and
itsCommittees. Oversees succession planning for the Board and senior
management, the development of talent and the promotion of diversity, and
makes recommendations to the Board for the nomination of new Directors.
Audit Committee Reviews and monitors the Group’s financial accounting and reporting
processes and the integrity of published financial statements. Reviews the
Group’s system of internal control, including the effectiveness of its internal
audit function and theindependence and effectiveness of its external auditor.
Safety & Environment
Committee
Reviews and monitors the Group’s strategies, policies and standards, and
itsrisk exposures and opportunities, in relation to safety and environmental
matters andthe Group’s performance of such matters.
Remuneration
Committee
Reviews and recommends to the Board the framework and policy for the
remuneration of the Chairman, Executive Directors and senior management.
Makes decisions within that framework and implements that policy.
Disclosure
Committee
Maintains governance procedures and controls for the identification, treatment
and disclosure of inside information in accordance with applicable laws and
compliance of disclosed information with the Listing Rules and DTRs.
Shareholders
The owners of the Company to whom the Board is ultimately responsible.
Chairman
Responsible for the leadership of the Board and ensuring that it operates effectively.
Board Committees
Committees operate under the delegated authority of the Board and within formal terms of reference.
Their key responsibilities are set out below:
Board
Collectively responsible to the Company’s shareholders for the long-term sustainable success of the Company, by providing
effective leadership, establishing the Company’s purpose and values and monitoring its culture, setting the Company’s
strategyand overseeing its delivery within a system of internal control, setting the Company’s risk appetite and reviewing
itsprincipal and emerging risks and taking other decisions reserved to it. Board members act for the benefit of shareholders
while taking into account the interests of a range of other stakeholders and other factors in accordance with their duties,
including under section 172(1) ofthe Companies Act 2006.
+ Further information about the Board’s activities in the year under review can be found on page 55
+ Further information about the activities of the Board’s principal Committees can be found on pages 71 to 92
Group Executive Committee
An advisory and reporting body to the Group Chief Executive Officer comprised of divisional management and
Groupheadsoffunction. It acts to review and oversee the safety, operational and financial performance of the
Groupanddiscuss,formulate and approve proposals for onward consideration by the Board or its Committees.
Board Executive Committee
A Committee comprised of the Group Chief Executive Officer and Group Chief Financial Officer operating under
thedelegatedauthority of the Board and within formal terms of reference. It acts to review and approve various
executivematters,including bids and contracts, acquisitions and disposals, financing arrangements, and
capitalandoperatingexpenditure below the levels reserved to the Board.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
67

The Board has agreed a clear division of responsibilities between the Chairman and Group Chief Executive. Other roles are also clearly
defined to enhance Board effectiveness. A summary of roles and responsibilities is set out below:
Chairman
Sir John Armitt CBE¹
− Provides overall leadership to, and ensures the effectiveness of, the Board
− Sets the agenda, character and tone of Board meetings and discussions
− Maintains an effective working relationship with the Group Chief Executive
− Leads the annual performance evaluation of the Board and its Committees and ensures
Non-Executive Directors make an effective contribution
− Assists the Board in understanding stakeholders’, including shareholders’, views
Deputy Chairman
Jorge Cosmen²
− Maintains a close dialogue with the Chairman and the Group Chief Executive
− Supports and deputises for the Chairman as required
− Assists the Group Chief Executive in developing strategy, in view of his deep knowledge
oftheGroup and the passenger transport sector
Group Chief
ExecutiveOfficer
Ignacio Garat
3
− Develops the Company’s strategy for consideration and approval by the Board and
provideseffective leadership to the executive team in their delivery of strategy
− Responsible for the management of the Group’s operations, including the Group’s safety
programme and environmental leadership
− Manages, with his executive team, relationships with key stakeholders, from shareholders
tokey customers and suppliers, and leads the workforce
− Communicates the Group’s progress against strategy and operational performance
toinvestors and analysts
− Sets the Company’s culture ‘from the top’
Group Chief
Financial Officer
Chris Davies
3
− Works closely with the Group Chief Executive in the development and delivery of the
Company’s strategy
− Responsible for the financial stewardship of the Company and management of its resources
through appropriate accounting, financial and other internal controls
− Directs and manages the Group’s finance, risk management, internal audit, insurance, tax,
treasury, IT and cyber security functions
− Manages investor relations, including by communicating the Group’s financial performance
toinvestors and analysts
− Chairs the Group’s Diversity & Inclusion Council and champions delivery of the Company’s
environmental ambitions
Senior Independent
Non-Executive
Director
Matthew Crummack
− Acts as a sounding board for the Chairman and a trusted intermediary for other Directors
− Available to investors to discuss any concerns that cannot be resolved through the normal
Chairman or Executive Director channels
− Leads the Board in the annual performance evaluation of the Chairman and in developing
Chairman succession plans
− Meets with Non-Executive Directors without the Chairman present at least annually and more
often as required to discuss Board matters
Independent Non-
Executive Directors
Mike McKeon, Dr Ashley
Steel
4
, Karen Geary, Ana de
Pro Gonzalo and Carolyn
Flowers
5
− Monitor and scrutinise the Company’s performance against its strategic goals and financial plans
− Bring objective perspective to the Board’s deliberations and decision-making, drawing on
their collective broad experience and individual expertise and insights
− Play a lead role in the functioning of the Board’s Committees
− Monitor and assess the Company’s culture, use appropriate and effective means to engage
with the workforce and acquire an understanding of other stakeholders’ views
− Monitor and assess the effectiveness of, and support and constructively challenge, the
Executive Directors
Company Secretary
Jennifer Myram
− Provides advice and support to the Board, its Committees, the Chairman and other Directors
individually as required, primarily in relation to corporate governance matters
− Responsible, with the Chairman, for setting the agenda for Board and Committee meetings
and for high quality and timely information and communication between the Board and its
Committees, and between the Directors and senior management as required
− Ensures that Board and Committee procedures are complied with
1
Independent on appointment
4
Stepped down from the Board on 3 December 2021
2
Non-independent Non-Executive Director
5
Appointed to the Board on 1 June 2021
3
Executive Director
Division of responsibilities
Roles and responsibilities
National Express Group PLC Annual Report 2021
68

Board and Committee meeting attendance
The Board and its Committees conduct their business at scheduled meetings during the year. There were more meetings in the year
under review than in a typical year, in part due to the Board’s continued focus on the Company’s recovery from the Covid-19 pandemic
andin part due to the potential combination with Stagecoach. In addition to its standing Committees, the Board also established a
further sub-committee (comprised of the Executive Directors, Chairman and Chair of the Audit Committee) with authority to consider
appropriate matters relating to the potential combination. The table below sets out theattendance by Directors and Committee members
at meetings of the Board, its standing Committees and its potential combination sub-committee in 2021:
Attendance at meetings
1
Board
Nominations
Committee
Audit
Committee
Remuneration
Committee
Safety &
Environment
Committee
Disclosure
Committee
Potential
combination
Committee
Total meetings in 2021 10 4 5 7 3 9 4
Executive Directors
Ignacio Garat, Group Chief
ExecutiveOfficer 10 – – – – 9 4
Chris Davies, Group
ChiefFinancialOfficer 10 – – – – 9 4
Chairman and Non-Executive Directors
Sir John Armitt *10 4 – – *3 9 4
Jorge Cosmen 10 *4 – – 3 – –
Matthew Crummack 10 4 – 7 3 – –
Carolyn Flowers
2
6 1 – – 2 – –
Karen Geary
3
10 4 – *7 3 – –
Mike McKeon
4
10 4 *5 – 3 – 3
Ana de Pro Gonzalo
4,5
10 4 5 – 3 – –
Ashley Steel
4,6
9 4 5 *7 3 – –
1
Some Board and Committee decisions were taken outside of meetings during the year and the Chairman and Executive Directors were also invited to attend certain meetings
of the standing Committees of the Board where appropriate, neither of which is shown in the table above
² Carolyn Flowers was appointed to the Board and the Safety & Environment Committee on 1 June 2021 and attended all the meetings of the Board and this Committee held in the year
after she was so appointed. She joined the Nominations Committee on 30 November 2021 for the last meeting of this Committee held in the year and she joined the Audit Committee
on 4 December 2021 which was after the last meeting of this Committee in the year
3
Karen Geary was appointed as the Chair of the Remuneration Committee on 3 December 2021, succeeding Dr Ashley Steel in this role
4
Each of Mike McKeon, Ana de Pro Gonzalo and Dr Ashley Steel stood down from the Nominations Committee on 30 November 2021 following the conclusion of the last
Committeemeeting of the year and therefore attended all meetings of this Committee held in the year
5
Ana de Pro Gonzalo joined the Remuneration Committee on 4 December 2021 which was after the last Committee meeting of the year so she did not attend any meetings
ofthisCommittee held in the year
6
Dr Ashley Steel stood down from the Board and all its Committees on 3 December 2021 and attended all meetings of the Board and Committees held during the year prior
tostandingdown
* Board Chairman or Committee Chair (noting that the Chairs of the Disclosure Committee and the potential combination Committee are not noted, as the chair wastaken by different
members of these Committees at different meetings)
Director independence
The Board reviews the independence
ofits Non-Executive Directors annually
inadvance of proposing Directors for
election or re-election at the AGM.
The Nominations Committee also
considers Non-Executive Director
independence on an ongoing basis
aspart of its consideration of the
composition of the Board.
Sir John Armitt was considered
independent on his appointment as
Chairman. Mr Cosmen, the Deputy
Chairman, is not considered independent
due to the interests the Cosmen family
hold in shares in the Company, his
closelinks with Group’s business and
hislong tenure on the Board. However,
MrCosmen’s extensive experience in the
passenger transport industry and deep
understanding of the Group’s business
enables him to provide the Board with
valuable support when reviewing strategic
and operational matters. On theadvice of
the Nominations Committee, the Board
considers allotherserving Non-Executive
Directorsto be independent.
Director conflicts of interest
The Board operates a policy to identify
and manage situations declared by
Directors (in accordance with their
legalduty to do so) in which they or their
connected persons have, or may have,
anactual or potential conflict of interest
with the Company. This policy was
reviewed and refreshed during the year
inreview, including to give guidance on
theprocess to follow should an actual or
potential conflict situation be identified.
The Board considers such situations
asthey arise and decides whether to
authorise any conflict based on the
overriding principle that a Director
mustatall times be able to exercise
independent judgement to promote
thesuccess of the Company.
A register of Directors’ actual and potential
situational conflicts of interest, together
with authorisations previously given by
theBoard, is maintained by the Company
Secretary. Following review by the
Nominations Committee of the application
of this policy during the year under review,
the Board is satisfied that no Director
conflict situation currently exists, save
inrespect of Jorge Cosmen.
Mr Cosmen has a potential conflict
ofinterest due to certain rights and
obligations his family companies have
inconnection with their shareholding in
theCompany. This conflict has been
authorised by the Board on the basis
that,as noted above, Mr Cosmen brings
significant value into the Boardroom.
Director commitment and
external appointments
The Directors’ ability to commit sufficient
timeand attention to the Company,
including having regard to their external
appointments, is also reviewed by the
Board annually in advance of Directors
being proposed for election or re-election
at the AGM, following advice from the
Nominations Committee which also
keepsthis matter under regular review.
All Directors are expected, and required
bytheir appointment terms, to commit
sufficient time to the Board and the
Company as is necessary to carry out
theirduties. They are also required, by
their appointment terms, to seek the
Board’s approval to taking on significant
new commitments.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
69

Division of responsibilities continued
During 2021, the Board introduced a new
policy on Directors’ commitments and
external appointments togive guidance
onwhat constitutes asignificant external
commitment and theprocess toseek
approval for these. While the new policy
ispremised on the overriding principle
thatDirectors should not assume any
significant external commitments which
could prejudice theirability to dedicate
sufficient time andattention to the
Company, the Board will consider requests
by Directors to assume significant new
commitments based on all thefacts and
circumstances. The policy guides that the
Board will not normally approve Executive
Directors holding more than one other
significant commitment, such as a
non-executive directorship in another
publicly traded company, and willnot
normally approve Non-Executive Directors
holding more than five ‘mandates’ as
defined in the policy.
A register of Directors’ external
appointments is maintained by the
Company Secretary. Details of all
Directors’ current significant external
appointments are included in their
biographies on pages 52 to 54 of
thisCorporate Governance Report.
Following review by the Nominations
Committee of the application of this
newpolicy during the year under
review,the Board considers, taking
intoaccount Directors’ attendance at
Board and Committee meetings, their
contributions to the Company outside
theBoardroom and their other current
significant commitments, including
external appointments, that all the
Directors are able to devote sufficient
timeand attention to the Company.
Board and Committee
processes
The Board has a formal schedule of
matters reserved for its approval,
whichmatters include: strategy review;
risk appetite and Group principal and
emerging risk review; major acquisitions,
disposals, bids and contracts; share
capital changes and debtfinancing;
reviewof financial results and approval
ofbusiness plans and budgets; setting
and changes to key corporate policies;
Board and Committee membership; and
corporate governance arrangements.
Other responsibilities and authorities
havebeen delegated by the Board to
itsstanding Committees, comprising its
Nominations, Audit, Remuneration, Safety
& Environment, Executive and Disclosure
Committees. Appropriate authorities in
connection with the potential combination
with Stagecoach were also delegated to
asub-committee of the Board.
The schedule of matters reserved to the
Board and the terms of reference of each
of its standing Committees, which are
reviewed and approved by the Board
annually, can befound on the Company’s
website: www.nationalexpressgroup.com.
Matters that fall outside of those reserved
to the Board or its standing Committees
fall within the responsibility and authority
of the Group Chief Executive Officer and/
or the Group Chief Financial Officer and
are either reserved to them ordelegated
further to their executive teams through a
Group Delegated Authorities Framework,
which is also reviewed and approved by
the Board.
The Chairman and Company Secretary
areresponsible, in consultation with the
Group Chief Executive Officer and Chairs
of the Committees, for maintaining a
scheduled 12-month programme of
business for the Board and its standing
Committees. This incorporates flexibility
for additional business to be discussed
asrequired either at scheduled or at ad
hoc meetings of the Board or its standing
Committees or otherCommittees
established for specific purposes.
The scheduled programme of business
and flexibility around it ensures that all
necessary matters arecovered and
appropriate time is givenfordiscussion and,
if thought fit, approval of relevant business.
At each scheduled Board meeting, the
Board rigorously reviews updates from
theExecutive Directors on the Company’s
safety, strategic, operating and financial
performance, and from the Group General
Counsel and Company Secretary on legal
compliance and corporate governance.
Other regular Board agenda items include
decisions relevant to strategy (such as
those relating toacquisitions, major
contract bids and capital allocation), risk
management (including reviews of risk
appetite and Group-level risks) and those
relevant to stakeholders (such as decisions
relating to investor relations, employee
relations, talent development, diversity
promotion and workforce and stakeholder
engagement).
Committee Chairs also provide summaries
of the main decisions and recommendations
arising from Committee meetings to ensure
non-members are keptup to date with
theworkundertaken by each Committee.
Senior management and external
advisersregularly attend bothBoard
andCommittee meetings where detailed
discussions on specific matters on which
their input or advice isneeded take place.
The Board also seeks to bring external
viewpoints into the Boardroom, including
from customers, suppliers, government
orregulatory officials and experts in
areasrelevant to the Company’s delivery
of strategy or management of risk.
In advance of each Board and Committee
meeting, Directors receive via a secure
web portal high quality papers, prepared
by the Executive Directors, senior
management, the Company Secretary and/
or external advisers where appropriate,
onthe agenda items to bediscussed.
The secure web portal alsogives Directors
access to a range ofother resources,
including previous meeting papers,
minutes, financial reports, business
presentations, investor reports, Company
policies and governance guidelines, and
details of Board and Committee procedures.
If a Director is unable to attend a
meetingdue to illness or exceptional
circumstances, they will still receive all
supporting papers in advance of the
meeting and are directed to discuss
with,and provide input to, the Chairman
orrelevant Committee Chair on the
business to be considered at that
meeting.The Company Secretary provides
direct feedback to the absent Director on
the key decisions taken at the meeting.
The Board has access to the Company
Secretary, for support and advice as
required, and the Company operates a
policy which allows Directors to obtain,
atthe Company’s expense, independent
professional advice where required to
enable them to fulfil their duties effectively.
In addition to Board and Committee
meetings, Non-Executive Directors hold
private meetings without the Executive
Directors present, including to discuss
Executive Director performance.
There arealso opportunities during
theyear for Directors to have informal
discussions outside the Boardroom,
eitherbetween themselves or with
seniormanagement or external advisers.
Further, and as explained on pages
62 to 66 of this Corporate Governance
Report, Non-Executive Directors
participate in a number of stakeholder
engagement activities during the
yearandthey have the opportunity,
throughout the year, to attend seminars
and discussion groups on matters
relevanttotheir Director roles and
responsibilities or ontopics of interest
tothe Company, including through the
Deloitte Academy and Chapter Zero.
Roles and responsibilities continued
National Express Group PLC Annual Report 2021
70

Composition, succession and evaluation
Primary role
To monitor the balance of knowledge,
experience, skills, independence and
diversity of the Board and its Committees,
to ensure that appropriate procedures are
in place for the nomination and evaluation
of Directors and to develop and facilitate
the implementation of succession plans
regarding the Executive Directors and
senior management
The Committee’s terms of reference,
reviewed and approved annually, are
available on the Company’s website at
www.nationalexpressgroup.com
Key responsibilities
− Monitor the structure, size and
composition (including the knowledge,
experience, skills, independence and
diversity) of the Board and its Committees
and make recommendations to the Board
regarding any changes to suchmatters
− Develop and implement effective
succession plans for the Board, its
Committees and senior management,
having regard to the skills and
expertise needed to ensure the
long-term sustainable success of
theCompany, including by overseeing
the development of a diverse talent
pipeline and monitoring the Company’s
diversity policies and initiatives and
their effectiveness
− Lead a rigorous and transparent process
for identifying, interviewing and selecting
candidates to serve as Directors on the
Board and its Committees and making
recommendations to the Board for
theirappointment
− Assist the Chairman with the annual
evaluation of the effectiveness of the
Board, its Committees and the Directors
Activity highlights
− Kept the Board and Committee
composition under review,
recommended the appointment of
anew North American based Non-
Executive Director with extensive
relevant experience in the North
American transit sector and also
commenced a Chairman succession
process, in line with the previously
developed Board succession and
refreshment plans
− Considered and recommended the
proposed size andcomposition of the
Board and its Committees both with
and without the potential combination
with Stagecoach
− Conducted a ‘deep dive’ into senior
management succession plans
andreviewed proposals for the
enhancement of talent identification
and development programmes
acrossthe Group
− Reviewed the diversity of the
Group’ssenior leadership teams
andthe Group’s broader workforce,
andthe diversity and inclusion
initiatives taken across the Group
Nominations Committee Report
1
Independent Non-Executive Director
2
Carolyn Flowers joined the Committee from
thestart of the last Committee meeting of
theyearon 30 November 2021 and therefore
attendedall Committee meetings held in the
yearwhile she was a member *
3
Each of Ashley Steel, Mike McKeon and Ana de
Pro Gonzalo stood down from the Committee on
30 November 2021 following the conclusion of the
last Committee meeting of the year and therefore
attended all Committee meetings held in the year *
Other attendees: Company Secretary and,
byinvitation, Group Chief Executive Officer
andGroup HR & Communications Director
Further information about the Committee members
isset out on pages 52 to 54
Membership, meetings and attendance
Committee member Appointed Resigned
Meetings
attended/
meetings held
Jorge Cosmen (Chair) 01.12.05 – 4/4
Sir John Armitt 01.01.13 – 4/4
Karen Geary
1
01.10.19 – 4/4
Matthew Crummack
1
28.01.20 – 4/4
Carolyn Flowers
1,2
30.11.21 – 1/4
Dr Ashley Steel
1,3
28.01.20 30.11.21 4/4
Mike McKeon
1,3
25.02.20 30.11.21 4/4
Ana de Pro Gonzalo
1,3
25.02.20 30.11.21 4/4
* The Committee thanks Dr Steel, Mr McKeon and Ms de Pro Gonzalo
fortheirsignificant contributions to the Committee and welcomes
MsFlowerstothe Committee
Jorge Cosmen
Committee Chair
The Group’s senior management
succession and talent development
plansare key to the Group’s return to
growth as we organise for success”
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
71

Carolyn was identified as an ideal candidate
to enhance the Board’s collective strong and
relevant experience following market research
conducted by, and recommendations
received from industry contacts by, the
Committee. As part of Carolyn’s induction,
she undertook a programme of visits to our
US operations as described on page 65.
A Q&A with Carolyn, in which she shares her
initial observations of the Group and her
views on aspects of the mass transit industry,
is set out in Appendix 1 to this Report.
In early December 2021, Dr Ashley Steel
stood down from the Board at the end of
anagreed six-year term. Ashley was a
member of all the Board’s Committees and,
since 2019, the Chair of the Remuneration
Committee. I take this opportunity, on
behalf of the Board, to once again thank
Ashley for her significant contribution to
theBoard and its Committees.
Following these changes, the Board is
nowcomprised of nine Directors who,
asdescribed in their biographies on pages
52 to 54 and as shown by the table below,
have, between them, a wide range of
highly relevant knowledge, skills and
experience. This table is used by the
Committee for Board succession planning.
Following these Board changes, the
Committee also reviewed the membership
of all the Board’s Committees to ensure
that each Director's knowledge, skill and
experience was being put to best use
andthat Non-Executive Directors were
maintaining an appropriate share of
Committee responsibilities.
The outcome of this review was that:
− Karen Geary, who was already a
member ofthe Remuneration
Committee, became its chair
followingDr Steel standing down;
− Ana de Pro Gonzalo joined the
Remuneration Committee and stood
down from the Nominations Committee;
− Mike McKeon, who is Chair of the Audit
Committee, stood down from the
Nominations Committee; and
− Carolyn Flowers joined the Audit
andNominations Committees.
The Remuneration and Audit Committees
therefore remain composed of three
independent Non-Executive Directors
whobetween them have both the requisite
disciplinary experience but also wider
relevant experience. As Matthew Crummack,
the Senior Independent Director, and Karen
Geary remain members of the Nominations
Committee with Carolyn Flowers alongside
myself and Sir John Armitt, it remains
composed of a majority of independent
Non-Executive Directors who, between
them, have a good balance of relevant
skillsand experience.
Throughout the year, all Non-Executive
Directors continued to be members
oftheBoard’s Safety & Environment
Committee, reflecting the importance
theBoard attaches to its business.
Dear fellow shareholder
I am pleased to present the Nominations
Committee Report for the year under
review. 2021 was another busy year
fortheNominations Committee as we
progressed certain of our previously
developed Board succession plans and
weconsidered and recommended the
sizeand composition of the Board and its
Committees both with and without the
potential combination with Stagecoach.
We also took our first ‘deep dive’ look
atthe Group’s senior management
succession and talent development plans,
which are key to the Group’s return to
growth as we organise for success.
Board and Committee
composition during the
yearunder review
Throughout 2021, the Committee has
keptthe composition of the Board and
itsCommittees under review.
In line with its previous succession plans
andthe principle of regular refreshment
oftheBoard, Carolyn Flowers was
appointed tothe Board and its Safety
&Environment Committee in June 2021.
Carolyn has significant experience in the
North American passenger transportation
industry and has worked for multiple
stakeholders in that industry, from US
central government transport agencies
toUS area and county transit authorities.
As such, she is well positioned to understand,
support and challenge our North American
businesses and offer valuable insights into
stakeholder views.
Composition, succession and evaluation continued
Nominations Committee Report continued
Name and role of Director
Passenger
transport
industry
experience
1
Closely
adjacent
industry
experience
UK listed
company
experience
1
Operational/
management
experience
International
business
experience
Finance/
accounting
experience
1
People/
remuneration
experience
1
IT/Digital
experience
1
Sir John Armitt, Chairman
Jorge Cosmen, Deputy
Chairman and Nominations
Committee Chair
Ignacio Garat, Group Chief
Executive Officer
Chris Davies, Group Chief
Financial Officer
Matthew Crummack, Senior
Independent Non-Executive
Director
Mike McKeon, Non-Executive
Director and Audit Committee
Chair
Karen Geary, Non-Executive
Director and Remuneration
Committee Chair
Ana de Pro Gonzalo,
Non-Executive Director
Carolyn Flowers,
Non-Executive Director
¹ For all Directors, excluding via their directorships with the Company
National Express Group PLC Annual Report 2021
72

changingdue to customer behaviours,
wider stakeholder expectations and
rapidtechnological advancement.
The Company Chairman, in consultation
with the Company Secretary and following
discussions with several potential
providers and receipt of recommendations
from other FTSE 350 companies, selected
Dr Sabine Dembkowski of Better Boards
Limited to undertake the evaluation.
Neither Dr Dembkowski nor Better Boards
has any other connection with the Group.
The evaluation was designed to assess how
effectively the Board functions as awhole
and how effectively its Committees function.
It was also intended to provide individual
Board members with insights about
themselves to enable them to improve their
personal contribution, in turn increasing
theoveralleffectiveness of the Board and
Committees of which they are members.
The evaluation process is illustrated by
thediagram below. It included akick-off
session, the Directors completing a digital
questionnaire designed around Better
Board’s peer-reviewed research on the
‘seven hallmarks of Board effectiveness’,
one-on-one interviews withthe Directors,
analysis by Better Boards of the questionnaire
answers and interview outcomes, and
one-on-one confidential feedback
sessions with Directors as well as a group
Board follow-up session. The findings of
the Board and Committee evaluation and
actions to be taken in response to those
findings are summarised in Appendix 2 to
this Report.
Senior management
successionplanning
During 2021 and as planned, the Committee
conducted its first formal ‘deep dive’ into
senior management succession planning,
undertaking a comprehensive assessment
ofthe healthofsuccession planning across
theGroup. Whereas previous Committee
reviews of senior management succession
plans focused on a shorter list of the most
senior roles within the operating divisions and
central functions over a shortto medium term
time horizon, this assessment extended to
87 management roles and considered the
succession pipeline for all such roles over four
different time horizons. It also consideredthe
diversity within that pipeline and the talent
identification and development programmes
in place that support the maintenance of that
pipeline. The assessment was sponsored by
the Group CEO who, with the support of
HRteams across the Group, held multiple
discussions with current senior managers
and high potential colleagues tounderstand
their respective capabilities and ambitions
and link these to the Group’s organisational
needs in delivering its strategy.
As a result of the assessment, the Committee
is satisfied there are succession plans and
talented individuals in the pipeline for a
number of the roles over some of the time
horizons but has observed that there is more
work to do to identify successors for all the
roles and over all the relevant time horizons.
Identifying the gaps has laid the necessary
groundwork for that further work. In addition,
whereas the Group hasdeveloped and
implemented a numberoftalent development
initiatives inprior years, the assessment
Board and Committee
composition going forwards
Part of the Committee’s work prior
totheCompany making an offer for
Stagecoach was tocarefully consider
andrecommend to the Board how it and
itsCommittees should be composed if
thattransaction were to complete. Details
of the outcome of these considerations
andrecommendations were included in
theCompany’s firm offer announcement
issued on 14 December 2021.
Succession planning for Sir John Armitt,
who reached his nine-year tenure as
Company Chairman in February 2022,
hadalready commenced in early 2021
butwas paused as a result of discussions
with Stagecoach on the potential combination.
Should the combination notcomplete, the
Committee will revert toitsoriginal succession
planning. In that case and as he confirmed in
his introduction to Corporate Governance,
Sir John will remain as Chairman to provide
continuity of leadership to the Company and
the Board pending the selection of a successor.
Board, Committee and
Directoreffectiveness
During 2021, the effectiveness of the
Board, its Committees and of individual
Directors was assessed by means of an
external evaluation. The Board considered
the timing of the evaluation opportune
asitfollowed closely on from the Board
having led the Group through its most
challenging period since the Company’s
listing and it was performed at a time
whenthe business environment in
whichthe Group is operating is
Kick-off meeting
with training
element
In-depth
interviews
Better Boards
digital board
evaluationquestionnaire
Interview
report
Working session
with the Company
Secretariat & Chair
Individual
confidential
feedback
session
Group working
session
Final presentation
and results
discussion
Individualised
reports
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
73

Composition, succession and evaluation continued
Nominations Committee Report continued
Diversity is also a key consideration
insenior management succession
planning and, as noted before, diversity
within the current senior management
team and the talent pipeline was
considered as part of the ‘deep dive’
review. One of the key objectives ofa
newGroup-wide talent development
programme will be to continue to promote
diversity in the senior management
succession pipeline.
The gender diversity of the Group
Executive Committee (GEC) and its direct
reports as at 31 October 2021, as well as
the gender diversity across our whole
workforce, are illustrated by the pie charts
shown on the next page. We have made
year-on-year progress in promoting
femalediversity in our senior management
teams, and gender diversity also remains
strong across our workforce as a whole.
We do not currently collect ethnicity data
on our senior management teams or
across our workforce as a whole due to
legal restrictions but, empirically, we
believe we have good ethnic diversity
across the workforce as we operate in
many countries and ethnically diverse
cities across the world and our workforce
is drawn from these vibrant communities.
Over recent years, this Committee has
reported on the creation of the Company’s
Global Diversity & Inclusion Council and
itsthree strategic ambitions:
1. Reflecting the communities we
serve by increasing those in under-
represented groups at all levels of the
workforce, with a key emphasis on
those in management roles, in order
that we better reflect the communities
we operate in.
identified the need for more consistency and
so foraGroup-wide talent programme to
beimplemented based on combining the
bestof existing programmes and other best
practice. The Committee is keen tosee the
output of this further work andcreation of the
Group-wide talent development programme,
and will continue toconduct ‘deep dives’ in
future years to assess progress.
Towards the end of 2021 the Company
welcomed Karen Myers as the new
GroupHR & Communications Director.
Karen brings a wealth of experience
fromher previous executive and current
non-executive experience across the
HRand corporate communications
fieldsin listed UK PLCs. She will bring
herexperience to bear to support this
Committee in its continued review
ofsenior management succession
plansand also to support the
Remuneration Committee in the
discharge of its responsibilities.
Board and Company
commitment to diversity
andinclusion
The Board and Company remain committed
to enhancing diversity at alllevels of the
Group’s organisation, fromtheBoard and
senior management team to those working
infront-line roles. The reasons for this
commitment are thosecited previously, as
setout in the box below. They in turn help
support the delivery of our Evolve strategy by
contributing directly to our desired outcome
to be the employer of choice. They also
contribute indirectly to other desired outcomes,
such as to be the safest and most reliable
operator and have the most satisfied
customers, as having the best people in
ourbusiness making the best decisions
willhelp us to achieve those outcomes.
The Board’s policy on diversity
andinclusion is:
− to achieve and then maintain
atleast one third female
representation on the Board;
− to achieve and then maintain
ethnicminority representation
onthe Board;
− to ensure that its membership
reflects the diversity of the
geographies and customers
thatthe Group serves; and
− to respect the differences of its
members and value and encourage
the diversity of thought that such
differences can bring,
in each case and always within the
context of Board members having,
between them, the experience
andskills required to support the
development, oversight and delivery
of the Company’s strategy.
Board (in numbers)
6
3
Men Women
Gender
8
1
White Ethnic Minority
Ethnicity
The Board’s own diversity policy is set out
in the box below and, following review, the
Committee believes this remains the right
policy by specifically promoting gender
and ethnic diversity among Board
members as well as diversity of thought
and inclusiveness within the context of
ensuring all Board members have the
rightexperience and skills.
The Company is committed to
ensuring diversity in all its forms
among, and inclusion of, its
colleagues as these can:
− improve decision-making at all
levels of business by ensuring
thatdiverse perspectives are
brought to bear in those decisions;
− attract, retain and promote the best
talent by developing a culture of
inclusion where all individuals are
respected and supported to reach
their full potential; and
− better serve our customers, other
stakeholders and the communities
in which we work by ensuring
thediversity of our workforce is
representative of the diversity
ofourstakeholders.
The gender and ethnic diversity of the
Board as at thedate of publication of
thisReport isshown by the Board pie
charts above.
National Express Group PLC Annual Report 2021
74

− The NX Pride Bus was part of the
Birmingham Pride Parade.
− The North America business celebrated
National Observance of Hispanic
Heritage Month by sharing the positive
employment experiences of many of
itsemployees of Hispanic descent
oninternal and external social
mediachannels.
− ALSA celebrated gender diversity by
holding a week long ‘Women’s Week’
aspart of International Women’s Day,
with activities such as expert briefings,
webinars and roundtable events.
Strategic Aim 3: Driving a culture
ofempowerment
The Group’s leadership has driven
ownership of strategic ambitions atlocal
level by:
− Creating Diversity & Inclusion Councils
within each of the three principal
divisions which meet regularly with
divisional leadership to proactively
workon solutions together.
− The UK Diversity & Inclusion
Councilrunning a ‘Stronger Together’
Campaignto encourage colleagues
toreport inappropriate behaviours
viaan internal portal.
Proposed re-election and
election ofDirectors
Having regard to the outcome of the
Board, Committee and Director external
evaluation, and in particular its finding
thatBoard members have, between them,
highly relevant knowledge and experience,
a broad range of skills and a collective
deep understanding of passenger
transport, the Committee is satisfied
thatthe Board and its Committees
function effectively and that each
Directorcontributes well to the Company.
The Committee has also considered the
independence of each individual Director
and the overall independent balance of
theBoard and its Committees. The Board,
on the Committee’s advice, is satisfied
thatthere is an appropriate balance of
independence on the Board and all its
Committees and that each Director who
isidentified as being independent on
pages 52 to 54 is so independent.
The Committee further considered each
individual Director’s commitment to the
Company, their external commitments
andany actual and potential conflicts of
interest in line with the refreshed policies
adopted by the Board during the year,
asreferred to on page 70. The Board,
on theCommittee’s advice, is also
satisfied that each Director has dedicated,
and is able to dedicate, sufficient time and
attention totheir duties to the Company.
Accordingly, the Board, on the Committee’s
advice, is recommending that shareholders
re-elect, or elect, all thecurrent Directors
of the Company atthe 2022 AGM.
Jorge Cosmen
Nominations Committee Chair
9 March 2022
2. Creating inclusive and accessible
working environments, free of racism
or any other form of discrimination,
where people respect and value each
other’s diversity and the contribution
they make.
3. Driving a culture of empowerment
by empowering leaders at all levels to
take effective ownership of diversity
and inclusion and deliver
demonstrable change.
During 2021, each of the Group’s business
divisions made progress against these
three strategic aims by building onthe
foundations set in 2020:
Strategic Aim 1: Reflecting the
communities we serve
The Group has focused on embedding
selection practices which are free from
bias by:
− Providing unconscious bias training
throughout the leadership population and
offering 14 specific diversity and inclusion
e-learning courses, with thousands of
colleagues completing these in 2021.
− Creating ‘Guidelines for an inclusive
language’ for all recruiters in ALSA
toensure inclusive language is used in
job offers and overall communications.
− Conducting programmes targeted at
high potential female colleagues to
increase the number of women applying
to lead teams and internal projects.
Strategic Aim 2: Creating inclusive and
accessible working environments
The Group’s divisions celebrated the
diverse backgrounds of their colleagues
bysponsoring events and activities:
− The UK business celebrated Black
History Month by colleagues sharing
stories via video clips as well as NX
West Midlands inspectors wearing ties
to show support for the celebrations.
Gender (in percentages)
67%
33%
Men Women
Direct reports to GEC
65%
35%
Men Women
All colleagues
61.5%
38.5%
Men Women
GEC
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
75

Appendix 1 – Q&A
withCarolynFlowers,
Non-Executive Director
Composition, succession and evaluation continued
Nominations Committee Report continued
Q
How was
your induction?
It was very professional and
comprehensive, and gave me a really good
overview of the business, its governance
and my duties as a director of a UK listed
company. I had one-to-one meetings
(online due to Covid-19 restrictions at
thetime) with each of the Executive
andNon-Executive Directors tohear
theirviews on being a National Express
Board member and I had sessions
withboth internal and external legal
teamstomake sure I was clear onthe
UKregulatory framework and my
UKlegalresponsibilities. When Covid-19
restrictions eased, I was able to visit
sitesin North America and the UK to
seesome of our businesses in operation,
which wasareal highlight. Further details
of these site visits are on pages 63 and 65.
Q
You participated in a workforce
engagement event. Did this give
you agood insight into the views of
members of the workforce?
Yes, I had the opportunity to speak
withcolleagues from across our global
operations, which gave me good insight
into the work they are doing onthe
groundday-to-day and how our decisions
in the Boardroom can affect them. It was
also a great networking opportunity for
colleagues, so something that should be
continued in the future.
Q
What do you think of National
Express’ approach to safety?
I’ve been really impressed; there is a
comprehensive programme of policies
which translate into actions being taken
atevery level to prevent incidents.
There isalso a detailed review of root
causes where incidents do happen and
any appropriate adjustments are made
following such review. Safety really is
thenumber one priority here.
Q
You have valuable experience in
the US transit industry, including
as acustomer. From what you’ve seen
ofNational Express in your first six
months, what do you think we do well
and where do we have more to do?
I’ve been inspired by the people andtheir
dedication to providing the bestservice.
Our people have really stepped up during
the pandemic to meetthe needs of
customers andthewider community,
having to respond quickly and adjust
theirways ofworking to accommodate
changes tocustomer requirements.
In my experience as a customer, it is all
about service; the key is providing the
bestservice at a price the customer can
afford. National Express knows this –
'most satisfied customer' is one of the
outcomes of the Evolve strategy – and,
from my site visits, I can see how the
teams are constantly driven to find ways
toprovide the best service. However,
Ithink technology has more of a role to
play, and in particular how we transition
tousing technology to further improve
therider and employee experience.
This should be a focus for the future.
Q
What do you think of National
Express’ zero emission fleet
ambitions? What opportunities and
challenges doyou think they present?
The transport industry has a responsibility
for reducing emissions. It will be a long
pathway for the whole industry to be zero
emission, but it is a pathway National
Express is already on, as I experienced
first-hand having just travelled on one of
our zero emission vehicles and having
had the opportunity to seeour electric and
hydrogen buses atour Coventry depot.
I can see it is a journey National Express
iscommitted to,which in itself presents
anopportunity for us to lead the way for
the passenger transport industry.
But there will be challenges; zeroemission
vehicles are new technologies which mean
new ways ofworking for our drivers, our
engineers and our operations. They also
import newtypes of risk that we are
updating oursafety programme to deal with.
I also think a major challenge will be around
charging infrastructure and associated
costs. However, these challenges can be
overcome. National Express is already
identifying and resolving challenges and
governments worldwide are aligned on
making resources available. In the USA, the
Biden administration recently passedthe
Infrastructure Investment andJobs Act,
which includes significant resources for
electrification and zero emission technology.
Q
Within the USA, are the labour
shortages an issue for all
industries or only affecting the
transport industry, and are the
shortages country-wide or only
impacting specific regions?
There has been a major shift in the
USlabour market during Covid-19
whichisimpacting other industries such
asretailand hospitality, but is mainly
affecting transit, para transit and school
transport and is a country-wide issue.
We are transporting the most vulnerable
insociety – the most precious cargo –
andthe number of checks that we need
tocomplete to ensure we have suitable
drivers means that the recruitment
processtakes longer for us, and it is
harder for candidates to meet the criteria,
which means we can lose drivers to other
industries. It will be challenging; we have
very high standards in a difficult market,
but we have a plan.
Q
You will have experienced the
Black Lives Matter movement
inthe USA. What do you think
employers should learn from this?
The BLM movement is a clear call for
inclusion and recognition of diversity
– weneed to be constantly aware of and
supportive in recognising and embracing
the values of everyone contributing to an
organisation and society.
National Express Group PLC Annual Report 2021
76

Appendix 2 – Board and Committee Evaluation
As explained on page 73, an external evaluation of the Board and its Committees was undertaken during 2021. The tablebelow
summarises the key findings of the evaluation, as well the actions to be taken to follow up on them:
Key strengths Areas for continued focus Follow up actions
A highly experienced, knowledgeable
anddiverse Board with, among its
members, a broad range of skills and
acollective deep understanding of
passenger transport, benefitting
alsofromstrong diversity in both
members’ backgrounds and thoughts
Ensure individual Directors’ experience
and knowledge is leveraged to the best
benefit oftheCompany
Enhance the Board’s skills and
experience in areas such as digital,
cyberand Environment, Social and
Governance (ESG)
Ensure there are protocols and
procedures to ensure Board decision-
making is as efficient andeffective
aspossible in view ofthe increasing
Board agenda
− Continue to closely monitor Board and
Committee composition to assess if
Board members’ collective experience
and skills are continuing to meet the
Company’s needs, having particular
regard to transformation in the industry,
the Group’s international reach and its
entrepreneurial spirit
− Provide more Board training and bring in
external advisers or specialist speakers to
enhance Board skills and inspire thinking
− Create Board meeting protocols to
facilitate more efficient decision-making,
and clarify the actions required of
theBoard in executive summaries
inBoard papers
Open and collegiate style of Board
discussions, enabled by the Chair’s
andCEO’s approach
Ensure all discussions are goal-orientated
and achieve a better balance between
keyBoard discussions on strategy, risks
and opportunities vs all other business
− Follow new Board meeting protocols
toensure decision-making is as efficient
as possible
− Dedicate more Board time to tracking
progress against strategy and incorporate
a strategy KPI dashboard into Board
papers to facilitate this
Appropriate attention given to succession
planning, with the focusin recent years
on CEO and Chairsuccession planning
Focus more on below Board level
succession planning, including by
reviewing the talent pipeline deeper
downin the organisation
− Nominations Committee ‘deep dives’
intosenior management succession
planning, initiated in 2021, to continue
going forwards and to be expanded to
cover more middle management roles
and provide more detailed assessments
of the Group’s talent identification and
development programmes
Excellent established programme
ofBoard visits to the Group’s
operationsand workforce engagement
opportunities forBoardmembers
Strengthen other stakeholder relations,
through more Chair and Non-Executive
Director shareholder engagement and
through new ways of hearing from
otherstakeholders
− Engage more with shareholders at
appropriate opportunities
− Identify new opportunities for the
Boardto hear directly from more
customer, supplier, regulator
andotherkey stakeholders
Effective Board Committees
dischargingtheir extensive duties
Each Committee to dedicate
appropriatetime to both core and
non-core matters within their remits
andseek specialist management or
external views where appropriate
− Ensure Committee meeting agendas
dedicate sufficient time to both core
andnon-core matters
− Bring more specialist and external
viewsinto Committee meetings
Continued strong focus on the
Group’shealth & safety agenda
andincreasing focus on the Group’s
wider ESG agenda and culture
Create more opportunity to monitorthe
continued development and delivery of
the Group’s environment strategy and the
effectiveness of the Group’s people
initiatives, including particularly those that
underpin andsupport the Group’s culture
− Consider whether the existing Safety
&Environment Committee should be
restructured into a Committee with
awider ESG remit, ensuring sufficient
time is given to these matters but that
thefocus on safety is also maintained
− Identify further ways to monitor the
Group’s culture, including by a review
ofthe outcome of the first Group-wide
staff engagement survey to be
conductedin 2022
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
77

Audit, risk and internal control
Audit Committee Report
Primary role
To assist the Board in fulfilling its
oversight responsibilities by reviewing
and monitoring the integrity of published
financial information, the adequacy and
robustness of the system of internal
control and management of risk and
theadequacy and effectiveness of the
internal audit function and external audit
The Committee’s terms of reference,
reviewed and approved annually, are
available on the Company’s website
atwww.nationalexpressgroup.com
Key responsibilities
− Monitor the integrity of the Group’s
published financial information and
review and challenge as appropriate
any significant financial judgements
and estimates made by management
− Evaluate the adequacy, robustness
andeffectiveness of the Group’s
internal financial and other controls
− Support the Board in evaluating the
adequacy, robustness and effectiveness of
the Group’s management of risk, in terms
of identifying, managing and mitigating
principal risks and identifying and
mitigating where possible emerging risks
− Review the Group’s policies,
processesand controls for the
detection and prevention of fraud, and
for compliance with applicable laws,
regulations and internal policies,
including relating to anti-bribery,
anti-slavery and data protection
− Approve the activities, review
thefindings and assess the
effectiveness of the Company’s
internalaudit function
− Monitor the activities, consider
theopinions and assess the
independence and effectiveness
oftheexternal auditor
− Review the Company’s Annual
Reportand advise the Board whether,
taken as a whole, it is fair, balanced
and understandable, and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy
Activity highlights
− Reviewed and satisfied itself as
totheintegrity and fairness of the
Group’s half and fullyear financial
statements and the appropriateness
oftheir being prepared on a going
concern basis
− Assessed and challenged the
appropriateness of the Company’s
viability statement
− Assessed and challenged
management’s approach to key
accounting judgements and estimates
− Reviewed the findings and monitored
the effectiveness of the internal audit
function, including changes in its
composition and the evolution of its
approach since its last external
quality assessment
− Reviewed the opinions and monitored
the independence and effectiveness of
the external auditor, including changes
in its working practices agreed as part
of the audit tender
− Supported the Board in its management
of risk by its continued programme of
‘deep dive’ reviews into divisional risk
and its ongoing review of cyber risk
− Reviewed the framework of the Group’s
compliance programme and the
corporate policies comprised within it
− Considered compliance with the terms
of Covid-19 related grants and
subsidies claimed during the year
1
Independent Non-Executive Director
2
Carolyn Flowers joined the Committee on
4 December 2021 but did not attend any meetings
of the Committee in the year as none were held
after the date she was appointed *
3
Dr Ashley Steel stood down from the Committee
on 3 December 2021 when she stood down from
the Board. She attended all the meetings of the
Committee in the year as they were all held before
the date she stood down *
Other attendees: Company Secretary and, by
invitation, Company Chairman, Group Chief
ExecutiveOfficer, Group Chief Financial Officer,
Group Financial Controller, Group Head of Internal
Audit, Group Legal Counsel, Group Head of
Compliance & Risk and representatives of the
external auditor, Deloitte LLP
Further information about the Committee members
isset out on pages 52 to 54
Membership, meetings and attendance
Committee member Appointed Resigned
Meetings
attended/
meetings held
Mike McKeon (Chair)
1
03.07.15 – 5/5
Ana de Pro Gonzalo
1
01.10.19 – 5/5
Carolyn Flowers
1,2
04.12.21 – 0/5
Dr Ashley Steel
1,3
01.01.16 03.12.21 5/5
* The Committee thanks Dr Steel for her significant contribution to the
Committee andwelcomesMs Flowers to the Committee
Mike McKeon
Committee Chair
The Committee has championed the
continued reinforcement of the Group’s
controls and compliance, positioning it
well for a return to growth”
National Express Group PLC Annual Report 2021
78

remote possibility that it would not be able
to do so even after the application of
thefurther stress tests. Accordingly,
theCommittee recommended to the
Boardthat the Company’s and its
Group’sfinancial statements at the
halfand full year be prepared on a
goingconcern basis.
Viability assessment
The Committee also carefully considered
management’s view of the Company’s
viability for the three-year period ending
31 December 2024, including the rationale
for assessing viability over a three-year
period. The testing of viability involved
theanalysis of base case and reasonable
worst case scenarios projected forwards
over this three-year period by reference
totrading assumptions drawn from the
Group’s strategic plan, and factored in the
impact of risks including known and likely
future climate risks that could materialise
over this three-year period, offset by
reasonable mitigations. The Committee
satisfied itself that, in boththe base case
and reasonable worst case scenarios,
theGroup should be ableto continue
inoperation and meet itsliabilities as
theyfall due. Accordingly, the Committee
recommended to the Boardthat the
Company make its viability statement as
set out on page 48 of the Strategic Report.
FRC review of 2020 accounts
The FRC conducts a review programme of
FTSE 350 companies’ annual reports and
accounts. During 2021the FRC conducted
such a review of the Company’s 2020
accounts and enquired into three specific
areas of the Company’s reporting.
The first sought clarification on whether
any of the Group’s Covid support grant or
subsidy arrangements gave compensation
for any of the Covid-related costs
presented within separately disclosed
items. Management responded that,
correctly, they did not.
The second enquired why the Group
recognised booking fees at the point of
sale and treated them as consideration
fora separate performance obligation
tothe corresponding ticket revenue.
Although there is a separate legal
obligation, management agreed
prospectively to amendthe Group’s
accounting policy torecognise booking
fees in the period inwhich the related
travel occurs as the amounts concerned
are immaterial.
The third enquired about the Group’s
factoring of advance subsidy payments.
The Group has a number of contracts
withpublic bodies where the future cash
flows are contracted. For some of these,
where the cash flows are back ended, the
Group enters into factoring arrangements
with a bank to factor the future cash
flowsin advance of invoicing the customer,
thus aligning better the cash inflows with
the costs of operations. The amounts
drawn down on such arrangements have
historically been accounted for in a similar
fashion toreceivables factoring and the
Group has, as for receivables factoring,
clearly disclosed the amounts drawn down.
Having regard to recent clarifications
regarding the presentation of financial
liabilities within trade payables, management
proposed that it would be more appropriate
for the resultant liability with the bank to be
recorded within borrowings rather than trade
payables as it does not relate to goods or
services, nor does it represent amounts
invoiced or formerly agreed with a supplier.
The Committee reviewed management’s
assessment of the accounting treatment
ofboth booking fees and factoring of
advance subsidy payments, including by
seeking the view of the external auditor.
While the Committee understood, and
supported the rationale for, the accounting
treatments previously adopted, on the
basis of the new arguments presented
itagreed with management’s proposals
toamend the accounting policies. The
amendment to policy on booking fee
recognition will be made prospectively
andthe amendment to the policy on
factoring advance subsidy payments will
take effect retrospectively and therefore
the Balance Sheet and associated cash
flows have been restatedaccordingly.
Following management’s proposals
andtheir review and acceptance by
theCommittee, the FRC has confirmed
ithasclosed its enquiries.
Risk management
The Board has overall responsible for risk
management. The Committee supports
theBoard by conducting ‘deep dive’
reviews into the Group’s divisions’ risk
management activities as well as certain
specific Group-wide risks, and by reviewing
the Group’s compliance programme.
Group risk appetite and principal
andemerging risk review
The Board’s risk appetite and assessment
of the Group’s principal and emerging
risks, as well as a description of how the
Group manages risk, are set out on pages
42 to 47 of the Strategic Report. The
Group’s climate-related risks and
opportunities areconsidered in more
detail in the TCFDdisclosures on
pages 35 to 39.
Dear fellow shareholder
I am pleased to present the Audit
Committee Report for 2021. During the
year under review, the Audit Committee
has ensured continued focus on and
challenge of the going concern and
viability assessments and management
ofrisk as the Group began its recovery
from the Covid-19 pandemic, and has
championed the continued reinforcement
of the Group’s controls and compliance,
positioning it well for a return to growth.
Financial reporting
The Committee is responsible for
considering and satisfying itself,
afterconsultation with the Company’s
external auditor, that the Company and
itsGroup have adopted suitable
accounting policies and appropriately
applied the same, that management has
made appropriate accounting judgements
andestimates, that the adoption by the
Company of the going concern basis of
accounting is appropriate and that its
viability statement is reasonable.
Key accounting matters
Details of the key accounting matters
addressed by management
whenpreparing the Consolidated Financial
Statements, together with information
about how the Committee assessed,
challenged where appropriate and
satisfied itself that the judgements
andestimates made by management in
relation to them were reasonable, are
setoutin Appendix 1 to this Report.
Going concern assessment
The Committee reviewed and robustly
challenged management’s assessment
that the Group’s financial statements
forthe six-month period ended 30 June
2021 and for the financial year ended
31 December 2021 should be prepared
ona going concern basis.
Management developed both base case
and reasonable worst case financial
scenarios over a 12-month look forward
period using assumptions about trading
drawn from the Group’s strategic plan,
budget and latest financial projections.
They then applied stress teststo both
those scenarios to determine whether the
Company would be able to meet its
liabilities as they fell due, having regard to
the Group’s access to cash and other
committed facilities and the covenant
testsin such facilities, to which the Group
has now secured further amendments
through December 2022. The Committee
satisfied itself that, in both the base case
and reasonable worst case scenarios, the
Group would have sufficient liquidity and
be able to comply with its amended debt
covenants and there was no more than a
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
79

Audit, risk and internal control continued
Audit Committee Report continued
Cyber risk review
Cyber risk remained a standing item on
theCommittee’s agenda in 2021, with the
Group’s ongoing cyber security programme,
and the progress being made against the
specific deliverables comprised in such
programme, assessed at each of the
regularly scheduled Committee meetings.
These assessments were made against
thebackdrop of a significant growth in the
number of cyber attacks being experienced
by companies generally. Indeed, the
Company was subject to a specific cyber
attack during 2021 but, thanks to the
particular actions the Company had taken
in2020 under its cyber security programme,
this attack was detected and neutralised
without any loss of data or compromise to
operational systems. However, it prompted
management and, in turn, the Committee
to review the aptness of the Group’s cyber
security programme. This review validated
that such programmeremained fit for
purpose butthat the timetable for certain
deliverables under it should be accelerated,
including the implementation of more
standardised access controls across
theGroup’s serverestate and its internet
facing software systems, and the roll-out
of anewcyber security Group standard
oncyber incident response, which
werecompleted in the year.
Compliance risk
The Group has a range of existing policies
and procedures for ensuring compliance
with applicable laws and regulations and
relevant codes of conduct, including
Group-wide policies on business ethics,
anti-bribery and corruption, modern slavery
and whistleblowing, and divisional policies
and procedures which either implement or
supplement the Group policies having
regard to local laws, regulations and best
practice. The Group’s whistleblowing
procedures include access to an
independently managed whistleblowing
hotline via which the Group’s stakeholders,
including employees, can raise concerns,
anonymously if they so wish. Reported
concerns are duly investigated and acted
upon by management or the functional
support teams as appropriate, with
seriouscases and their outcomes
reportedto the Board.
Looking ahead to the reforms the UK
Government is expected to make to
auditpractices and corporate governance
following its consultation on restoring
trustin audit and corporate governance,
in2021 the Group engaged a new
dedicated Group Head of Compliance
whohas hands-on experience of
developing and implementing compliance
programmes in multi-national
organisations. The Group Head of
Compliance, working with the Group
ChiefFinancial Officer andGroup General
Counsel and their teams, will keep the
proposed reforms onaudit and corporate
governance under review and will lead
thework and make recommendations
tothe Committee on how to comply with
new legal requirements or implement
newbestpractice recommendations.
Internal control
The Committee is responsible for
monitoring the adequacy and
effectiveness of the Company’s
systemofinternal control and
reportingtothe Board on the same.
System of internal control
The Company’s system of internal
controlis based on a three lines of
defencemodel, with a number of
component controls operating at
each of those lines, as illustrated in
Appendix 2 to this Report.
Internal audit
The internal audit function acts as
thethirdline of defence and provides
theCommittee with assurance on
theeffectiveness of the Company’s
firstandsecond line internal controls,
including financial controls and controls
designed toprevent incidents of fraud.
It does this through theindependent
observation and objectiveassessment of
such controls viaa programme of audits
undertaken throughout the year
againstaplan reviewed and
approvedbythe Committee.
During 2021, the Company enhanced its
internal audit resources by engaging new
team members in North America and by
using more external resource in the UK,
Spain and Morocco. The audit plan
included: audits of standard divisional
financial controls; audits of key safety
and operational controls; audits of
particular operational initiatives including
the driver recruitment process in North
America; andaudits on core Group-wide
controls and initiatives such as the
delivery of the Group’s cyber security
programme and the effectiveness of the
operation of the Group’s whistleblowing
procedures. In addition, in view of the
growing importance of environmental
reporting toinvestors, the internal audit
team conducted an audit of the Group’s
controls around the collection and
reporting of environmental data.
Internal audit reported all the findings
from its audits and recommendations
forfollow-up management actions to
theCommittee.
Divisional risk reviews
During 2021, the Committee reviewed
theGroup’s divisions’ principal and
emerging risks andtheir management of
such risks. Additional dedicated meetings
of the Committee were held at which risk
andsenior managers from each of the
divisions presented theirprincipal and
emerging risk registers and explained
how they were managing and where
possible mitigating risk. Mirroring the
Company’s approved approach to
Group-wide risk, the divisions record
theirrisks in the form of heat maps
whichcategorise both their likelihood
andpotential severity according to Group
developed guidance. Each risk is then
assigned a business owner who develops
and oversees the delivery of mitigating
actions, which actions are tracked at
regular divisional management meetings.
The Committee observed that the
Group’sdivisions had included both
current and emerging strategic, financial,
operational and reputational risks in
theirregisters and had developed action
plans to manage such risks over the
different time profiles over which such
risks could materialise. It was also
pleased to note that certain matters
identified as risks were also viewed
asopportunities and that, following the
exercise to identify climate-related risks
and opportunities asdescribed on pages
37 to 39, environmental risks had been
identified and classified in all divisions’
risk registers. Using insights gained
fromthe Board’s work on overseeing
Group-wide risks andthe Committee’s
work on reviewing divisional risks,
theCommittee was able to challenge
eachdivision on whether ithad identified
and appropriately classified its risks
andwhether it was adopting the
mosteffective mitigation plans, and share
best practices the Committee had
observed within eachdivision.
Through its reviews, the Committee has
been assured that each of the divisions
has a robust risk identification and
management process and was pleased
tosee that risk management has become
embedded in the day-to-day business
activities and culture of the divisions.
Such reviews also have served to deepen
Committee members’ understanding of
the risks the Group’s different businesses
face and, through the Committee sharing
this understanding with the wider Board,
they have informed the Board’s ability
toappropriately set the Group’s risk
appetite, assess the Group’s principal
and emerging risks and weigh up risks
with opportunities when taking key
business decisions.
National Express Group PLC Annual Report 2021
80

External audit
Deloitte LLP is the Company’s auditor.
Deloitte was first appointed as auditor
in2011 and, following its selection in
theCompany’s audit tender conducted
in2020 and shareholders’ approval
givenat the Company’s 2021 AGM,
wasre-appointed in 2021. Deloitte’s
continued appointment will be subject
toshareholders’ annual approval at
prospective Company AGMs. Jane
Whitlock is the Company’s new audit
partner following the mandatory rotation
ofthe Deloitte audit partner in 2021.
The Company has therefore complied
withthe Statutory Audit Services for
LargeCompanies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014.
External audit plan and fee
The 2021 external audit plan, which was
prepared by Deloitte and reviewed and
approved by the Committee, comprised
full scope audit procedures for the
Group’sUK & Germany, ALSA (including
enhanced procedures in Morocco)
andNorth America divisions. It included:
the review by Deloitte of the Consolidated
Financial Statements; its challenge of
management’s significant judgements and
estimates; its review ofcertain of the
Group’s key financial andfraud controls
and of the risk of management override of
controls; and its consideration of certain
aspects of the Group’s non-financial
reporting, including the Group’s TCFD
disclosures. Deloitte’s fee for undertaking
the 2021 audit, of £2.0 million, proposed
as part of its tender for re-appointment,
was also approved by the Committee.
External audit effectiveness
The Committee is responsible for
reviewing the effectiveness of the
Company’s external audit. The Committee
did so by considering the outcome of
colleagues’ evaluation of the quality
andefficiency ofDeloitte’s work and its
own evaluation ofthat work. In addition,
the Committee considered how Deloitte
had performed against the tender
commitments it made to the Company
todevelop and achieve more effective
and efficient ways of workings with the
Company. These included conducting
earlier planning and ensuring prompt
communications, using technology
solutions to conduct aspects of the audit,
and developing audit quality indicators.
Having regard to the outcome of these
evaluations and progress against its
tender commitments, the Committee
issatisfied that Deloitte performed
itswork to a high standard.
External auditor provision of non-audit
services and independence
The Committee is also responsible for
reviewing the auditor’s independence and
objectivity. The Company operates a
non-audit services policy which sets out
the permitted and prohibited non-audit
services its auditor may be engaged to
provide, for the purpose of safeguarding
the auditor’s objectivity. The Committee
reviewed the policy during the year and
determined it remained fit for purpose.
It also reviewed the Company’s compliance
with the policy, which was confirmed
asDeloitte performed only permitted
non-audit services during 2021 for which
its fees totalled £0.2 million, representing
10% of thetotal audit fee.
Having regard to the operation of the
non-audit services policy during 2021,
together with Deloitte’s reports to the
Committee confirming its independence
atthe half and full year and the rotation
ofthe Deloitte audit partner in 2021, the
Committee assured itself of Deloitte’s
ongoing independence.
Board assessment of
effectiveness
Taking account of the Committee’s
workon assessing the effectiveness
ofthe Company’s system of internal
control, and both the Committee’s
anditsown work on assessing the
Group’s management ofrisk, the Board
issatisfied that these are effective.
Fair, balanced and
understandable
Having carefully reviewed the
Company’s2021 Annual Report, and
considered management’s approach to
itspreparation, including in compliance
with applicable laws and having regard to
the UK Corporate Governance Code, the
TCFD recommendations and the FRC’s
best practice guidance, and having heard
the views of its auditor, the Committee
recommended, and in turn the Board
confirmed, that this report, taken as a
whole, is fair, balanced and
understandable, and provides the
necessary information forshareholders
toassess the Company’s position and
performance, business modelandstrategy.
Mike McKeon
Audit Committee Chair
9 March 2022
At the Committee’s specific request, internal
audit also conducted audits of theGroup’s
claims for Covid-19 related subsidies and
grants, which were supplemented by reviews
by an independent accounting firmof certain
aspects of such claims. The Committee was
conscious of the reputational risk that could
attach to making errors in such claims so
assured itself that the Group's operating
subsidiaries who submitted such claims
wereeligible to do so, had calculated their
claims correctly and, where relevant, were
complying with the conditions attached to
thegrants andsubsidies.
Internal audit effectiveness
The Committee is responsible for monitoring
the effectiveness of the internalaudit function.
In respect of its work in 2021, the Committee
monitored this effectiveness by reviewing the
scores colleagues, whose work or controls
weresubject to internal audit, awarded to the
function on a ‘value scorecard’ and by
making its own assessment of the quality
ofthat work. The Committee is satisfied
thattheCompany’s internal audit function
continues to be effective.
Significant weaknesses
orcontrolfailures
Following its review of and conclusions
from all elements of internal and external
assurance, the Committee is satisfied
thatthere are no significant weaknesses
orcontrol failures to report in respect
ofthe Company’s financial year ended
31 December 2021.
In respect of the Company’s financial
yearended 31 December 2020, the
Committee reviewed the need to address
some control findings in its North America
finance function which were identified as
aresult of small manual calculation errors
made in the 2020 financial close process.
While these did not give rise to any
material accounting errors in that year,
management nonetheless instigated a
review of the financial control environment
in the North America division with the
assistance of an independent accounting
firm. This review identified that there
wasagenerally good financial control
environment and compliance culture
inNorth America but that there were
opportunities to formalise the operation
ordocumentation of certain financial
controls to mitigate ad hoc manual errors.
The Committee considered these findings
together with the recommended actions
toaddress them and tracked the progress
made by the North America finance
function in implementing such actions
during the year ended 31 December 2021.
The Committee has satisfied itself that
good progress has been made in improving
financial controls in North America.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
81

Audit, risk and internal control continued
Audit Committee Report continued
Appendix 1 – Key accounting matters
The Committee considered the following key accounting matters as part of its review of the Consolidated Financial Statements:
Key accounting matter Committee action and conclusion
Impairment of
goodwill (see
note 14 to the
Consolidated
Financial
Statements)
In determining whether assets are
impaired,management is required
tomakea number of estimations and
assumptions, including on future cash
flowprojections, discount rates and
perpetual growth rates.
The Committee carefully considered management’s work on the impairment
analysis and testing of the value of the Group’s goodwill balances, applying
particular focus to the value of its ALSA division’s goodwill in view of the
lower level of headroom.
These impairment assessments were based on modelled forecast
cashflows, discounted using a country-specific weighted average cost of
capital (WACC) and a terminal value based on a perpetual growth rate (PGR).
Management refined its methodology for deriving the WACC during the
yearin order to bring it more in line with common practice, although this
hadlimited impact on the resulting WACC.
After considering the assumptions made by management in forecasting
cashflows and its rationale for the WACC and PGR, and taking into
accountthe auditor’s views on these matters, the Committee concurred with
management’s view that goodwill is not impaired as atthebalance sheet date.
Insurance and
other claims
provisions (see
note 26 to the
Consolidated
Financial
Statements)
The adequacy of the provisions associated
with claims arising predominantly from
traffic accidents and employee incidents
inNorth America is subject to estimation
based on an assessment of the expected
settlement value of known claims together
with an estimate of settlement values that
could be made in respect of incidents that
have occurred but not yet given rise to a
claim at the balance sheet date.
Given the level of uncertainty, complexity
and judgement involved in making these
estimations, there is a risk that the eventual
outcome could be materially different from
that estimated and provided for.
The Committee considered the information provided by management
onthestatus of the North America and other material open claims made
against members of the Group together with advice from external actuaries,
legal counsel and insurance brokers, on the likely outcome of such claims,
aswell as management’s explanation of the methodology used to determine
the value of provisions for such claims.
After challenging whether management had considered all material open
claims and incidents that could give rise to claims and the external advice
given in connection with them, the Committee concluded that management’s
estimation of the value of such claims was within an acceptable range of the
potential outcomes and accordingly was fairly stated.
WeDriveU put
option liability
(see note 25 to
the Consolidated
Financial
Statements)
The value of the liability of the put
optionover the shares in WeDriveU
Holdings Inc. not already owned by the
Group is subject to estimation of future
earnings performance.
The Committee considered management’s valuation of the put option
liability. This took account of the fact that the option over 10% of the
shareshad been exercised during 2021, the option over a further 10%
willbeexercised during 2022, and the option over the remaining 20%
sharesis expected to be exercised in early 2023. The valuation also made
assumptions about WeDriveU Inc.’s projected 2022 EBITDA performance
andnet debt position, together with the external auditor’s views on that
estimate. Following this review, the Committee concluded that
management’s valuation was reasonable.
Separately
disclosed items
(see note 5 to the
Consolidated
Financial
Statements)
The Group presents profits and earnings
per share measures before separately
disclosed items to provide more meaningful
information to shareholders onthe Group’s
underlying performance. The classification
of separately disclosed items requires
management judgement having regard to
the nature and intention ofthe transactions
to which they relate.
The Committee considered the nature and extent of the separately disclosed
items identified by management and its rationale for why they did not form
part of the Group’s Underlying Operating Profit (a key APM).
The Committee noted that this was the second year that certain Covid-19
related incremental costs were separately disclosed, but satisfied itselfthat
these represented either the re-assessment of estimations in respect of
items recorded as separately disclosed items in the prior year, orthat they
represented the finalisation of activities such as restructuring programmes
that commenced in 2020 and concluded in 2021.
After discussion with management and the external auditor, the Committee
concurred with the approach taken.
Onerous contract
provisions (see
note 26 to the
Consolidated
Financial
Statements)
The Committee reviewed the approach
taken by management in recognising
£23.1 million as an onerous contract
provision in respect of its RRX German rail
concession.
The Committee reviewed management’s assessment and concurred with the
onerous contract provision recorded.
Pension liabilities
(see note 34 to
the Consolidated
Financial
Statements)
The determination of the defined benefit
obligation of the UK defined benefit
pensionscheme depends on the selection
of certain assumptions. In particular, a key
area of estimation uncertainty is in respect
of the discount rate.
The Committee reviewed the assumptions made by management in
determining the defined benefit obligation, including considering the advice
from independent qualified actuaries, and concluded that they were
appropriate.
National Express Group PLC Annual Report 2021
82

Board of Directors
Sets and monitors delivery of Group strategy, sets Group risk appetite, assesses theGroup’sprincipaland emerging
risksandapprovessignificantmatters reserved to it
Audit Committee
Assists the Board in assessing risk management and reviews the effectiveness of the internal audit function and the external audit
Internal Audit Function
Audits the effectiveness of the Company’s first and second line internal controls through
theindependentobservationandobjectiveassessment of such controls
Group Executive Committee
which monitors the frameworks, policies & procedures and effectiveness of the functions referred to below
Group Compliance Framework
under which corporate policies, such as those on
anti-briberyandanti-slavery, are created and enforced
Group Whistleblowing Procedures
by which internal and external stakeholders
canraiseconcernsabout wrongdoing
Group Safety Policies
set minimum expectations for safety outcomes,
suchasspeedingand driver risk monitoring
Group Standard Operating Procedures
set minimum standards for operations, such as
vehiclemaintenanceand driver rostering
Group Risk Management Reporting
Guidelines & GroupRisk Director
which help track the management
and,where possible, mitigation of
risksandcalibrate the severity
andlikelihood of risks
Group Cyber Security Programme
&GroupCyber Security Team
which set cyber security strategy
andcontrol and monitor progress against
that strategy and compliance with
those controls
Group Environmental Data
ReportingGuidelines & Group
Sustainability Director
which help track delivery
ofenvironment strategy
andensuretheintegrity and
consistencyofenvironmental data
collection anditsreporting
Group Consolidated
FinancialReporting &
GroupFinanceTeam
which consolidate and review
Groupfinancial results
Group Treasury & Tax Functions
which centrally manage Group treasury
activitiesand set Group tax strategy
andreviewtax compliance
Group Legal Reporting &
GroupGeneralCounsel
which monitor, report and providelegal
advice on Group legalrisks
Divisional Executive Committees
which monitor the policies and procedures and the effectiveness of the functions referred to below
Divisional Safety, Operational, Cyber and Environmental policies and/or procedures
which implement Group policies and/or procedures
Divisional Risk Registers & Management
which track divisional risks and develop mitigations
Divisional Budgets & Forecasting
which set divisional financial expectations and monitor delivery
Divisional Finance Teams
maintain the financial ledgers and prepare divisional accounts
Divisional Legal Teams
provide legal advice and assistance on divisional legal risks
Appendix 2 – System of internal control
Second line of defenceFirst line of defence Third line of defence
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
83

Audit, risk and internal control continued
Sir John
Armitt CBE
Committee Chair
Safety & Environment Committee Report
Primary role
To oversee the effectiveness of the
Group’s safety, health & wellbeing
andenvironment strategies, standards,
policies, initiatives and targets, to assess
the Group’s delivery and performance
against them, and to monitor the Group’s
exposure to, and management of, risk in
these areas
The Committee’s terms of reference,
reviewed and approved annually, are
available on the Company’s website
atwww.nationalexpressgroup.com
Key responsibilities
− Monitor the Group’s safety, health
&wellbeing and environment
leadership, performance and culture
− Review the Group’s strategy
andframework of standards,
policies,targets and initiatives
formanaging safety
− Review the Group’s strategy, policies,
targets and initiatives for managing
itsimpact on the environment
− Review the Group’s performance
against these matters and the external
reporting of that performance
Activity highlights
− Monitored the Group’s performance
against its safety standards, policies
and targets, including consideration
ofnew safety risks and measures
beingtaken to mitigate them
− Reviewed major accidents and
incidents and the action plans
developed or lessons learned in
response to them
− Reviewed the Group’s strategy to
transition its global businesses’
fleetsto zero emission and the
newfleet zero emission targets set
todrive delivery against this strategy
− Assessed the Group’s performance
against its 7-year environmental KPIs
− Reviewed the Group’s TCFD
disclosures included in this
AnnualReport
1
Company Chairman, independent on appointment
2
Independent Non-Executive Director
3
Carolyn Flowers joined the Committee at the same
time as her appointment to the Board on 1 June
2021. She participated in all the meetings of the
Committee held in the year after she joined *
4
Dr Ashley Steel stood down from Committee when
she stood down from the Board on 3 December
2021 but she attended all Committee meetings in
the year prior to standing down *
5
Chris Muntwyler was co-opted as a non-Director
member of the Committee throughout the year and
stepped down from his role at the end of the year *
Other attendees: Company Secretary and,
byinvitation, Executive Directors, Group Safety
Director and Group Sustainability Director
Further information about the Director Committee
members is set out onpages 52 to 54
Membership, meetings and attendance
Committee member Appointed Resigned
Meetings
attended/
meetings held
Sir John Armitt CBE (Chair)
1
01.01.13 – 3/3
Jorge Cosmen 01.12.05 – 3/3
Matthew Crummack
2
06.05.15 – 3/3
Mike McKeon
2
03.07.15 – 3/3
Karen Geary
2
01.10.19 – 3/3
Ana de Pro Gonzalo
2
01.10.19 – 3/3
Carolyn Flowers
2,3
01.06.21 – 2/3
Dr Ashley Steel
2,4
01.01.16 3.12.21 3/3
Chris Muntwyler
5
01.06.11 31.12.21 3/3
* The Committee thanks Dr Steel and Mr Muntwyler for their significant
contributions to the Committee and welcomes Ms Flowers to the Committee
Safety, where we believe we are already
an industry leader, remains our priority.
Our zero emission fleet transition strategy
and ambitious net zero and zero emission
fleet targets demonstrate our desire to
become an industry leader in combating
climate change and poor air quality”
National Express Group PLC Annual Report 2021
84

While we hope the worst of the pandemic
is behind us and stronger government-
imposed measures to control Covid-19
arenot reintroduced, our operations
havebeen adept at implementing new
protective measures when and as the need
has arisen. This has given the Committee
and the Board assurance on how well the
business is able to respond to changing
safety risks and in turn we trust it will give
our passengers confidence to either carry
on, begin or return to using our services.
The Group also continues to be alert to the
emergence of new safety risks and to devise
appropriate plans to mitigate their effects.
For example, during the year we have seen
significant driver shortages across a number
of our operations, but particularly those in
North America due to the after-effects of the
pandemic on the general labour market and
Covid infection rates still causing higher than
normal absence rates in our own workforce.
As in other industries, staff shortages place
more pressure and more responsibility on
those staff who remain at work which, in our
industry, could reduce their focus on safety.
Having identified this risk, specific plans
were put in place to mitigate it, including
byreducing the non-safety related
responsibilities of staff to ensure safety
canremain their priority. The Committee
reviewed and approved these plans.
Dear fellow shareholder
I am pleased to present the Safety &
Environment Committee Report for 2021.
Safety, where we believe we are already an
industry leader, remains our number one
priority. Our zero emission fleet transition
strategy and ambitious net zero and zero
emission fleet targets, as described in this
Report, demonstrate our desire to become
an industry leader incombating climate
change and poor air quality.
Safety
Safety governance
The Group CEO has overall responsibility
for the Group’s safety system and
performance, supported by the Group
Safety Director, Divisional CEOs and
Divisional Safety Directors. The
Committee’s role is to review the
effectiveness of the Group’s safety system
and report to the Board on the same.
Safety system
The Company has a well defined and
developed safety system which operates
across its global businesses. This system
has its foundations in the Company’s
‘Driving Out Harm’ programme which
originated in 2011 and comprised the
creation and implementation of a wide
variety of driver and vehicle safety
standards and constantly evolving
safetyinitiatives. It was built upon
in2017with the introduction of five
newGlobal Safety Policies relating to
speed management, driving evaluation,
competence of driving evaluators,
drivermonitoring and driver performance
management. These were fully implemented
across the majority of the Group’s operations
by the end of 2020 but continue to be
implemented in those cities and countries
in which the Group has more recently
commenced operations, such as Rabat
and Casablanca in Morocco. The Committee
is pleased with the progress made to
datein these locations where the safety
programme is already transforming the
safety of passenger transport for the
citizens of and visitors to such cities.
In response to the pandemic, the Group
implemented a range of additional safety
measures, focused on controlling the
spread of Covid-19, which were
summarised in last year’s Committee
Report. Some of these measures have
become regular safety procedures,
including the maintenance of protective
screens between drivers and passengers,
enhanced cleaning of vehicles and the
fitment of enhanced air filtration systems
on vehicles, which measures help to
protect drivers and passengers alike from
Covid-19 and other infectious diseases.
Safety performance
The Committee assesses the Group’s
safety performance by reference to a
number of KPIs which include:
− the Group’s FWI Index score, which
measures and weights according to
severity all responsible major, minor and
lost time injuries and any responsible
fatalities;
− the Group’s Preventable Accidents
score, which counts the number of
vehicle accidents that should, by
compliance with the safety system, have
been capable of being prevented; and
− the Group’s DriveCam Driver Risk score,
which counts the number of driver risk
incidents recorded by the DriveCam
technology on the Group’s fleet.
Both the target scores for these KPIs,
which were set by reference to the
Group’s(best ever) 2019 FWI Index score
and its2019 (last normal year of operation
pre-Covid-19) Preventable Accidents and
DriveCam Driver Risk scores – which
targets also comprised the safety
targetsin Executive Directors’ and
seniormanagers’ 2021 bonuses – and
theactual scores achieved inrespect
of2021 are set out in the table below:
KPI Target
and 2021 Bonus Target
Bonus
Weighting Target Score Actual Score
Group FWI Index score (per million miles) 5% 0.003 0.006
Group Preventable Accidents score 5% 14.38
1
13.62
Group DriveCam Driver Risk score 5% 2400.70 1504.78
1
The 2021 target Group Preventable Accidents score has been restated from that reported in the Company’s 2020 Annual
Report to include the Casablanca operations to ensure a like-for-like basis of calculation with the 2021 actual score
Although clearly disappointing that the Group did not achieve its target Group FWI Index
score, the actual 2021 Group FWI Index score still represented the Group’s third best ever
score in 11years, reflecting the stretching nature of the target and the Group’s continuous
investment in, and relentless focus on, safety. The significant positive impact of that
investment and focus over the last 11 years is illustrated by the graph below:
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0
100
200
300
400
500
600
700
800
2011
FWI/MM
Million Miles
FWI per million miles operated
2012 2013 2014 2015 2016 2017 2018 2019 20212020
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
85

German Rail
safety tour
In November 2021, Chris Muntwyler, accompanied by Tom Stables (UK & Germany CEO),
visited Cologne where they travelled in the driver cab on one of our RRX services and
held meetings with the NX German rail management and safety teamsandwith the
German rail network controller, DeutscheBahn.
As Chris reported to the Committee, the meetings with management and
DeutscheBahnserved:
− to confirm the implementation of the Group’s global safety policies as relevant to
railway operations, representing a positive step-change in the German rail industry;
− as a forum for discussing with DeutscheBahn matters that were within its control
thatcould give rise to safety risks, with a view to influencing those matters; and
− to deepen the understanding of the data privacy concerns held by the German
workscouncil that could affect the effective management of safety risks, with
aviewtoaddressing those concerns.
The Committee welcomed the insights gained and was assured that the German
management team will continue towork with DeutscheBahn and the German works
council inan effort to continuously improve the safety of the Group's German railservices
for the passengers who use them and drivers who operate them.
Audit, risk and internal control continued
Safety & Environment Committee Report continued
The Committee was pleased to see achievement of the Group’s Preventable Accidents
target score and noted that the Group had in 2021 the lowest number of high severity
incidents on record. The Committee was also impressed by the achievement of the target
for, and significant year-on-year improvement in, the Group’s DriveCam Driver Risk score,
noting that Lytx (which owns and manages the DriveCam technology on behalf of its
clients) advised that the Group is 52% less risky on average than the Lytx Transit Industry
Network (comprised of more than 75,000 vehicles). The Group’s divisions’ impressive
DriveCam Driver Risk performance, as compared with this Lytx Transit Industry Network,
during the 18 months to the end of 2021 is illustrated by the graph below:
NX DriveCam Driver Risk vs Lytx Transit Industry Network
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20 Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21 Dec-21
Lynx risk score metric
Industry North America UK Coach UK Bus ALSA
To demonstrate the Group’s continued commitment to safety, its divisions will continue to
include a range of safety targets in their divisional management bonus plans, including a
divisional FWI metric which will be re-positioned as a gateway to payout of the whole
safety element of divisional managers’ bonuses. To enable the Company’s Executive
Directors to retain their focus on the Group’s holistic safety performance, 15% of their
2022 bonuses will be based on the Group’s FWI metric, with the threshold for payout only
being met if there are no responsible fatalities in the year. The on-target payout has been
set by reference to the Group’s average FWI Index score over the last three years
(excluding 2020 due to it being a year of unusually low operations due to Covid-19) and
the maximum payout by reference to the Group’s best ever FWI Index score achieved in
2019. The Executive Director bonus metrics are shown in the table below:
Executive Director 2022 Bonus Target Weighting Threshold On-Target Maximum
Group FWI Index score (per million miles) 15%
Zero
responsible
fatalities 0.006 0.003
Safety performance continued
While KPIs are valuable for assessing
safety performance, they are not the
onlymeans the Committee uses.
During 2021 the Committee also reviewed
allmajor safety incidents affecting the
Group,their root causes and any lessons
tobelearned fromthem, together with the
action plansimplemented in response to
them.
Italso reviewed several specific ongoing
and new aspects ofthe Group’s safety
system. For example:
− It was pleased to observe the Group’s
continued focus on driver fatigue
management, including via the roll-out
across the entire UK scheduled coach
fleet of Guardian’s Seeing Machines
fatigue monitoring technology.
This technology monitors in real-time
forindicators of driver fatigue and alerts
thedriver. The data derived from the
technology is also informing a better
understanding of driver fatigue trends
and the action plans to address those.
− It was also interested in the safety risk
assessments being undertaken at the
Group’s depots and garages which are
now using zero emission vehicles in
connection with the operation of those
vehicles. These encompassed risk
assessments of the new activities of
charging vehicle batteries and receiving
supplies of, storing and using hydrogen
gas at these sites.
Further, during 2021 the Committee
waspleased to be able to resume its
programme of safety tours with a visit
byChris Muntwyler to our German Rail
operations, details of which can be found
in the box below:
National Express Group PLC Annual Report 2021
86

UK Bus
providing services
using ZEVs
The Group’s UK Bus and North American
shuttle businesses are currently leading
the way on the Group’s zero emission fleet
transition, as demonstrated by the case
studies in the boxes below and overleaf.
A number of the Group’s other businesses
are piloting ZEV operations, but discussions
with the key stakeholders of those
businesses, such as the school boards in
North America and the municipalities and
transport authorities in Spain and Morocco,
are the priority to create the conditions in
which the Group can bid to win customer
contracts with ZEVpropositions.
Building on the Group’s commitment to
never buy another diesel bus in the UK
andits ambitions to have zero emission
fleetsinUK Bus by 2030 and UK Coach
by2035, in 2021 the Group adopted wider
ambitions to have zero emission fleets in
Spain bus by 2035 and in each of Spain
coach, Morocco bus and North America
school bus and transit by 2040. While these
remain ambitions as much depends on
what our customers want and whether
central and local governments will support
green agendas over the years to come, they
demonstrate the Group’s desire to achieve
these important goals.
Environment
Environment governance
The Company’s Executive Directors are
responsible for the delivery of the Group’s
environment strategy and the sponsors of
the Group’s environment ambitions,
supported by the new Group Sustainability
Director, the Group Procurement Director,
Divisional CEOs and Divisional specialists.
The Committee’s role is to review the
Group’s environment strategy and its
environment ambitions in the context ofits
broader strategy, to monitor the Group’s
progress on delivering this strategy and
achieving these ambitions and to report to
the Board on the same. It also plays a key
role in overseeing the Group’s environment
reporting, as referred to below.
Environment reporting
The Company’s mandatory disclosures
onenergy consumption and carbon
emissions, including under the Streamlined
Energy and Carbon Reporting Regulations,
can be found on pages 221 to 223 of this
Annual Report. In addition, 2021 marks
thefirst year in respect of which the
Company is reporting on climate-related
risks and opportunities in line with the
recommendations of the Financial
Stablility Board's Task Force onClimate-
related Financial Disclosures, which
disclosures can be found on pages 35
to39 of this Annual Report.
Environment strategy and targets
The Group’s environment strategy is
centred around transitioning the fleet
across its operating subsidiaries to zero
emission vehicles (ZEVs). 95% of the
Group’s carbon emissions originate
fromits fleet, so this transition will
havethegreatest influence in terms of
theGroup reducing its impacton the
environment and improving air quality
inthe communities it operates in.
During 2021, the Committee reviewed
andapproved this strategy. The
Committee noted that such strategy was
developed after significant modelling
ofitsexpected financial impact and
thetimetable for its delivery, including
having regard to the costs and expected
investment returns on ZEVs and the life
cycle of the existing fleetand anticipated
advancement of ZEV technology over
thatcycle. The Committee observed that
such strategy is as much about
overcoming or managing the hurdles for
investment in ZEVs as it isabout making
the right investment at the right time in
ZEVs. For example, the Group intends to
use its vehicle availability model to
mitigate the capex and debt implications
of the higher purchase cost ofZEVs vs
diesel vehicles and the Group will work
with its key customers and other
stakeholders to shape tender requirements
to incorporate ZEVs and to secure grant
funding for ZEVs.
In addition to the 29 electric vehicles and 20 hydrogen vehicles
theUK Bus business is already operating across the West
Midlands, it made a commitment in 2021 to operate a further
176electric vehicles.
These vehicles will be made available to the UK Bus business
under its new vehicle availability contract by which charged
vehicles, and the related charging infrastructure, are made
available on a daily basis by a service provider in return for
anavailability fee.
The purchase of these vehicles by the service provider was
assisted by grant funding awarded by the West Midlands
Combined Authority to the UK Bus business in return for
itscommitment to the operate the vehicles as part of the
CoventryElectric Bus City grant scheme.
With these investments, we are pleased to be able to not
onlyreduce our own carbon emissions but also offer our
passengers the opportunity to reduce their carbon footprints.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
87

North America
shuttlepartnering
with corporate
customers in
using ZEVs
The WeDriveU shuttle business in North America has
around100 electric vehicles, which it is using to transport
theemployees of its corporate customers to and from their
workplaces. These vehicles are owned by customers but
operated and maintained by our drivers and technicians.
As cities around the world introduce more measures to
combatclimate change, improve air quality and reduce
trafficcongestion, including via clean air charging zones
andrestrictions on the number of parking spaces employers
can provide, large employers located in these cities are
lookingfor mobility solutions to enable their employees to
getto and from work in a way which contributes to these
aimsand overcomes these issues.
We are proud to partner with customers who are finding
innovative ways to reduce their own environmental impact
andwho offer their employees the opportunity to do so too.
Environment performance
As explained in previous Committee
Reports, in 2019 the Group adopted six
KPIs to track the Group’s progress over
the seven-year period 2019-2025 in
reducing its impact on the environment.
The KPIs include traction energy, traction
carbon emission and total (scope 1 & 2)
carbon reduction targets, as well as
sitecarbon emission, water consumption
and waste to landfill reduction targets.
The Committee reviewed the Group’s
progress against theseKPI targets at the
end of 2021, as shown by the table on
page 221.
The Committee notes that progress
against the traction energy, traction
carbon and total (scope 1 & 2) carbon
emission reduction targets, which were
setas intensity metrics, remains subdued
as a result of both the Group’s lower
vehicle occupancy levels in 2020 and 2021
and the mix of passenger journeys shifting
towards more short stop-start (so less fuel
efficient) bus journeys rather than
longer-distance coach journeys, in both
cases due to changes in travel behaviours
caused by the Covid-19 pandemic. It also
notes that performance against these
targets was worse in 2021 than 2020 as,
during the second half of 2021 as Covid-19
restrictions were released, the Group
started to build back its transport
networks ahead of the return of
passengers to enable that return.
The Committee is pleased to note the
positive progress against the other targets
but, as these were set as absolute metrics,
is conscious that this progress is boosted
by lower site occupancy, water usage and
waste production in the first half of 2021
when Covid-19 restrictions remained,
so when less site energy was being
used, fewer vehicles were being washed
and more office workers were working
from home.
During 2021, the Committee engaged
withmanagement on whether the current
environment KPIs should bere-set to
better align them with the Paris Agreement
accord of limiting global warming to no
more than 1.5°C above pre-industrial
levels, to be SBTi validated and to become
milestones to track progress towards
achievement of the Group’s overall net
zero and zero emission fleet targets.
The Committee agreed withmanagement
that the Group needs ayear of ‘steady-
state’ operations to create a sound
baseline for revised KPIs,so in 2022
willassess whether the Group’s 2022
operations can form this baseline.
Meantime, the Committee is pleased
tonote that the Group is refining its
environmental data collection and
verification processes to ensure the
newbaseline is as robust as possible.
As also explained in previous Committee
Reports, environment performance
metrics have been included in each of
thelast two LTIP awards made to
Executive Directors and certain senior
managers, theindicative vesting levels for
which are referred to on page 103 of the
Directors’ Remuneration Report. The
Committee notes that progress against the
2020 LTIPnumber of ZEVs performance
metric is currently on track to be achieved
at between on-target and maximum
vesting level, but that both the 2020 and
2021 LTIP carbon emission reduction
metrics are noton track due to being
Audit, risk and internal control continued
Safety & Environment Committee Report continued
intensity metrics and the Covid pandemic
impacting these in the same way as the
environment KPIs.
To demonstrate the Group’s ongoing
commitment to reducing its carbon
emissions and increasing its vehicle
occupancy levels back to at least
pre-pandemic levels, as well as achieving
its zero emission fleet transition strategy,
the Remuneration Committee intends to
include further carbon reduction and ZEV
increase metrics in Executive Directors’
and senior managers' 2022 LTIPawards,
weighted at 25% of the totalawards.
Further details of these metrics, including
their threshold, on-target and maximum
vesting levels, areshown on page 98 of the
Directors’ Remuneration Report.
Evolution of the Committee to having
abroader sustainability focus
As the environment and wider corporate
sustainability matters become ever-more
important to us and our stakeholders,
ensuring we have the right governance of
these matters, alongside our continued
governance of safety matters, is equally
important. To this end, and as referenced
on page 77, we will look in 2022 to evolve
this Safety & Environment Committee to
reflect our broader sustainability focus.
Sir John Armitt CBE
Safety & Environment Committee Chair
9 March 2022
National Express Group PLC Annual Report 2021
88

Directors’ Remuneration Report
Annual Statement by the
RemunerationCommitteeChair
Primary role
To recommend to the Board the
remuneration strategy and framework
forExecutive Directors and senior
management
1
and to determine
andapplywithin that framework a
remuneration policy for Executive
Directors and remuneration practices
forsenior management which have
regard to the Group’s overall
performance, wider workforce pay
practices, the need to fairly reward
andincentivise individual contributions
for past and future performance,
andalign reward to the long-term
sustainable success of theCompany
The Committee’s terms of reference,
whichare reviewed and approved annually,
are available on the Company’s website
atwww.nationalexpressgroup.com
Key responsibilities
− Determine the remuneration of
Executive Directors in accordance with
the Directors’ Remuneration Policy and
with due regard to workforce pay and
related policies and practices across
theGroup
− Determine the remuneration of senior
management, also having regard to
workforce pay and related policies
andpractices across the Group and
succession plans
− Determine the Chairman’s fees
− Oversee pay and related policies and
practices across the Group’s workforce
− Oversee administration of the Group’s
share incentive plans
Activity highlights
− Understanding the views of the
Company’s stakeholders on executive
remuneration matters. This included
engaging with a large number of the
Company’s largest shareholders on
thematters noted below
− Tracking the Company’s financial
results and remuneration outcomes
forExecutive Directors and senior
management, taking into account
theongoing Covid-19 pandemic
− Reviewed and confirmed the 2021
annual bonus and 2019 LTIP award
out-turns for Executive Directors
andsenior management
− Reviewed the Chairman’s, Executive
Directors’ and senior managers’ pay
and benefits for 2022, inthe context
oftheir performance, the Company’s
performance and the Group’s
stakeholder experiences
− Considered and set targets and
performance conditions for the 2022
annual bonus and the 2022 LTIP
awards to be made to Executive
Directors and senior management
− Ongoing review of wider executive
remuneration environment and
bestpractice governance
− Review of Remuneration
Committeeadvisers
− Planning, review andassessment
ofimplicationsassociated with the
potential combination of Stagecoach
Other attendees: Company Secretary and (by
invitation to all meetings) Chairman, Group Human
Resources and Communications Director and
representatives of PwC and Korn Ferry (independent
remuneration advisers), and (by invitation to certain
meetings) Deputy Chairman, Group Chief Executive
Officer and Group Chief Financial Officer – which
Executive Directors do not attend during discussions
relating to their own remuneration
Membership, meetings and attendance
Committee member Appointed Resigned
Meetings
attended/
meetings held
Karen Geary
1,2
01.10.19 – 7/7
Matthew Crummack
1
01.05.16 – 7/7
Ana de Pro Gonzalo
1,3
04.12. 21 – 0/7
Dr Ashley Steel
1,2
29. 01.19 03.12. 21 7/7
¹ Independent Non-Executive Director
2
Karen Geary, who was a member of the Committee throughout the year, became its Chair on 4 December 2021
after Dr Ashley Steel stood down from the Committee on 3 December 2021. Dr Steel stood down from the
Committee at the same time as she stood down from the Board but she attended all the meetings of the
Committee in the year as they were all held before she stood down.
3
Ana de Pro Gonzalo joined the Committee on 4 December 2021 but did not attend any meetings of the Committee
in the year as none were held after she was appointed
Karen Geary
Committee Chair
With an encouraging recovery in evidence
amidst the ongoing impact of the pandemic in
2021, the Committee’s focus has been twofold.
Firstly, on listening to the views of our varied
stakeholders, both internally and externally to
ensure 2021 remuneration outcomes were fair,
balanced and aligned to experience. Secondly,
on ensuring 2022 remuneration decisions
take account of those views and support
thedelivery of the Evolve strategy.”
1
The Company’s senior management whose remuneration is determined by the Committee comprises the divisional managing directors and the Group functional heads who are
direct reports to the Group CEO and/or Group CFO and who together form the Group Executive Committee
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
89

Underlying Operating Profit
£87.0m
2020: £(50.8)m
Underlying Profit Before Tax
£39.7m
2020: £(106.1)m
Free cash flow
£123.4m
2020: £(196.0)m
CEO/CFO pay increase
0%
CEO/CFO bonus
47.5%
of maximum
2019 LTIP vesting
0%
Median CEO pay ratio
37:1
2021 key performance metrics
Dear fellow Shareholder
On behalf of the Board and as Chair
oftheRemuneration Committee, I am
pleased to present the 2021 Annual
Reporton Remuneration. The report
aimsto set out simply and transparently
how remuneration has operated
acrosstheGroup in 2021, including
thedecisions made by the Committee
onChairman, Executive Director and
senior management remuneration,
andtheassociated rationale, and how
theCommittee intends to operate
theDirectors’ Remuneration Policy
intheyear ahead.
As this is my first report as Chair of the
Committee, following my appointment
on3 December 2021, I would like to thank
my predecessor, Dr Ashley Steel, for her
leadership of the Committee during an
exceptionally challenging period and for
her support during my transition to
Committee Chair.
Like 2020, 2021 remained a challenging
year for the Group. The continued impact
of the pandemic, and the associated
government restrictions still in force across
our geographies at different points of the
year, restricted our ability to service
ourcustomers. Management reacted
quickly and effectively to the onsetof
further restrictions, setting the business up
for strong performance. We were pleased
that these actions werereflected in
increased shareholder value over the year.
During 2021, the Committee, through
itsoversight of wider workforce
arrangements, feels that management
effectively supported colleagues
throughout the year. In addition to the
ongoing commitment of National Express
to be a Living Wage accredited employer
in the UK, this was also demonstrated by:
− the decision to top up furlough
payments to employees who
receiveditto 100% of salary;
− the decision to award salary increases
across the global workforce at an
average of 2.5%; and
− the decision to pay employee bonuses
without reduction. Bonus measures
varyacross each business division
andlevels of employee bonus payouts
were between target and below
maximum across the globe, reflecting
the workforce’s significant contribution
tothe Group’s ongoing recovery.
Importantly, the Group’s businesses did
not reduce their capacity to operate in the
future once the impact of the pandemic
isbehind us. This was reflected in a low
level of redundancies in line with normal
business-as-usual optimisation (e.g.
redundancies linked to the pandemic being
less than 0.2% of the global workforce).
The Company had previously repaid
allUKGovernment Loans comprised
of£300 millionof UK Corporate Covid
Finance Facility (CCFF) loans in 2020 with
no further borrowings in 2021. The Committee
and management are also appreciative of
the support received from the Coronavirus
Job Retention Scheme (CJRS) in the first
half of the year, in respect of the UK Coach
business only, which preserved employment
within that business. The Company
intendsto repay the CJRS support
received in respect of its financial year
ended 31 December 2021 at the same time
as itreinstates dividends. As the Chairman
has said in his introduction to this Annual
Report, it is the Board’s current intention
to reinstate afinaldividend for the financial
year ending 31 December 2022.
As a result of the actions taken by
management and the wider workforce
during the pandemic, the businesses are
positioned well to continue their recovery
inthe coming years, demonstrated by the
Group’s 2021 financial performance.
2021 activity and
remunerationoutcomes
2021 AGM resolutions
Following the approval of the Directors’
Remuneration Policy and Directors’
Remuneration Report at the 2021
AGM,the Committee has engaged with
shareholders to further understand the
concerns that led to voting outcomes
of72.6% and 59.3% respectively.
Prior to last year’s AGM we engaged with
our largest shareholders and the main
proxy voting agencies. Whilst most of
these shareholders were supportive of our
proposals and understood the complex
circumstances that the business was
facing, some investors and proxy voting
agencies raised concerns, particularly in
relation to the decisions to increase the
base pay and potential LTIP quantum
ofour CFO, with additional comments
around the LTIP performance targets.
This lack of support was reflected in
thevoting decisions of many of our
shareholders with whom we had not
beenable to engage. Whilst we believe
that the approach was carefully thought
through and taken in the best interests
ofthe Company, we fully appreciate the
concerns raised both lastyear and
National Express Group PLC Annual Report 2021
90
Directors’ Remuneration Report continued
Letter from the Remuneration Committee Chair

inthisyear’s consultation (see below) and
have reflected these intheremuneration
decisions set out inthis report. We are
confident that the Remuneration Policy
that was approved will support the
business in its recovery over the next
fewyears.
In early 2022, ahead of the publication
ofthis report, I wrote to our Top 20
shareholders and the four major proxy
voting agencies to gather views ahead
ofdecision-making in respect of 2021
outcomes, and 2022 implementation.
Given the complicated factors which the
business is facing, we were keen to consult
with shareholders on a number of options
and potential approaches. I am extremely
grateful for the responses I received and
the level of engagement from shareholders,
having personally met with 14 of our Top
20 and received responses from two more
to my letter, in total accounting for c.57%
of our share capital. These meetings have
been invaluable in better understanding
views from last year’s AGM and shaping
the Committee’s decision-making set out
in this report (in particular in relation to
2021 bonus decisions, as described later
inthis letter and in the report), as well as
ensuring a productive and collaborative
relationship regarding future decisions.
2021 results and remuneration outcomes
The business has performed very well
inchallenging market conditions.
Our relationships with our public sector
customers and stakeholders have been
instrumental in maintaining the revenues
ofour businesses in all our geographies.
Some of our concession contracts have
been renegotiated so that the levels of
revenue support and risk have changed
inthe Company’s favour at times of
maximum disruption. Management has
been key to achieving this on behalf of the
Company, preserving jobs, lengthening
contracts and protecting the business.
The budgeting process at the start
oftheyear anticipated some, but not
all,ofthe challenges for 2021 and in the
Committee’s view at the time, robust
targets were set. The Committee
dedicated time throughout the year,
andwhen determining annual bonus
outcomes, carefully considered the
associated impacts of the pandemic and
other key elements of the 2021 business
context. With this in mind, the Committee
remained of the view that the targets set
were robust and stretching.
Annual bonus
Following there being no bonuses payable
in respect of 2020 and minimal vesting of
the 2018 LTIP award, one of the key areas
of discussion with shareholders was in
relation to the annual bonus for 2021,
having regard to there being no vesting
onthe 2019 LTIP award (see below).
The formulaic out-turn of the annual bonus
was up to 95% of maximum for Executive
Directors. The Committee is conscious
that although the employee experience
has been positive this year, the Company
did receive support through the CJRS.
As outlined above, the Board currently
intends to repay the CJRS support
received in respect of its financial year
ended 31 December 2021 at the same
timeas it reinstates dividends. The
Committee was also cognisant that
whilstthe business was profitable on an
underlying basis in 2021 and the share
price increased by 10% over the year
(having recovered strongly from its low in
2020), we have not yet resumed dividend
payments to shareholders.
During our recent consultation, it was
clearthat shareholders had a range of
views but there were also a number of
consistent themes that emerged. Firstly, all
shareholders recognised that there were a
number of complicating factors that needed
to be considered when making decisions in
respect of variable pay outcomes for FY21.
Shareholders appreciated the progress
management had made over the period,
with a number noting no bonus had been
paid in respect of 2020, in addition to the
minimal levels of LTIP vesting last year and
this year.
Taking these and other factors into
account, there was broad appreciation
from shareholders that paying a bonus
inrespect of 2021 was the correct
decision. However, shareholders were
keenthat the Committee ensured that
outcomes were reflective of the wider
stakeholder experience, something about
which the Committee also felt strongly.
Based on this, the Committee determined
that it was appropriate to apply downwards
discretion of 50% to take account of a
number of factors including the wider
business context, in the level of bonus that
Executive Directors should earn. This will
result in a bonus of 47.5% of maximum
being paid to the CEO and CFO.
It should be noted that reductions will not
apply to the payment of bonuses paid to
other employees.
The Committee determined that the whole
bonus will be delivered in shares and
subject to three-year deferral, by which
point dividends should have resumed and
CJRS receipts will have beenrepaid.
This is over and above the 50% one-year
deferral stated within Policy.
LTIP
As the targets under the 2019 LTIP were
not achieved, no LTIP awards will vest in
respect of performance to the end of 2021.
Whilst there are many factors that could
have been taken into account to adjust
theformulaic outcome, the Committee
didnot feel it was right to make any such
adjustments in light of the shareholder
experience during this period. This will
bethe second year of little or no vesting,
following the LTIP vesting last year at 6.5%
of maximum.
2022 remuneration proposals
In addition to discussions regarding the
FY21 annual bonus, the other main focus
of shareholder discussions was in respect
of the approach to remuneration in 2022.
These discussions have also shaped the
decision-making for the year ahead.
Base salary
No salary increases are proposed for
2022for either Executive Director.
The Committee is cognisant that upon
appointment Ignacio Garat’s base salary
was set below market levels, and £128,000
below his predecessor, whose base salary
in the year of departure was £703,000.
The salary (along with reduced bonus
potential versus his predecessor) was
structured to both recognise the operating
environment at the time given the impact
of Covid-19 and to allow development in
the role, at which point the salary would be
increased. Recognising this development,
the Committee will be reviewing Ignacio
Garat’s base salary with the aim of
phasing increases over several years
ifhisstrong performance achieved to
dateiscontinued. We will consult with
shareholders to provide further detail of
thisreview in next year’s report.
Pension
Ignacio Garat’s pension entitlement is 3%
of salary, being the majority UK workforce
pension contribution level, and as given
from his appointment.
Chris Davies’ pension entitlement, currently
25%, will be reduced from 1 January 2023
to also be aligned to the then prevailing
majority UK workforce level.
Annual bonus
The annual bonus opportunity will be
unchanged, with both the CEO and
CFOhaving a maximum opportunity
equalto 150% of salary. For the CEO,
thisis below the policy maximum of 200%,
equal to the maximum opportunity for the
CEO’s predecessor.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
91

The Committee has set stretching
performance targets against which the
annual bonus will be measured. For 2022
the Committee has determined bonuses
will be subject to the following weighted
targets (all aligned to the Evolve strategy
set out at the Capital Markets Day
presentation in 2021):
− 50% Group Underlying Profit Before Tax
− 25% Group free cash flow
− 15% Group Safety – Fatality and
Weighted Injuries (FWI) Index score,
including anunderpin such that this
element willnot pay out if there are any
responsible fatalities
− Specific strategic and risk management
targets, with an aggregate weighting
of10%
LTIP
Recognising shareholders’ views, the LTIP
opportunity for the CFO is to revert to
150% of salary from the 200% of salary
award made on 2021. The CEO’s award
will remain at 200% of salary.
Following careful consideration, the
Committee was of the view that the
Company’s LTIP and the performance
measures attached to awards made
underit achieve a good balance between
incentivising Executive Directors and
senior managers to deliver: (i) financial
returns to shareholders; as well as (ii) the
financial and ESG platforms that both
incentivise and facilitate the delivery of
Company strategy.
Following conversations with shareholders,
we are keen to ensure that LTIP awards
continue to be appropriately stretching
and drive the long-term financial and
non-financial performance of the business.
Therefore, the Committee determined that
the 2022 LTIP awards will be subject to the
same weighted performance measures
asthe 2021 awards (except there
willbeone rather than two TSR
performance measures albeit with
thesame overall weighting – this
approachwasagreed unanimously
inconsultation with shareholders):
− an earnings per share measure,
witha25% weighting;
− a return on capital employed measure,
with a 25% weighting;
− a single total shareholder return
measure relative to the FTSE 250,
witha25% weighting; and
− an environmental measure with a 25%
weighting, split equally between the
Group’s global carbon emissions per
million passenger kilometres (consistent
with the 2021 LTIP) and a new measure
around the transition of our road fleet to
carbon neutral vehicles.
The evolution of ESG measures versus
2021 reflects the business’ commitment
toensuring the delivery of our ESG
strategy, which is vital to the sustainability
and long-term success of the business.
The Committee is also aware of the
general concerns which some investors
have with respect to ESG measures
notbeing sufficiently stretching. The
Committee is confident that, having been
validated by external third parties, the
measures and associated targets are
robust and stretching. The LTIP measures
and targets have been set to align with the
Evolve strategy, as set out at the Capital
Markets Day on 18 October 2021, with
achievement of those numbers designed
to result in an on-target payout.
Full details of these performance criteria
are set out on page 98.
Concluding thoughts
I and my fellow Committee members
remain committed to engaging with
you,our shareholders, and our
colleagueswhere appropriate,
onremuneration matters.
We also thank all our colleagues for their
hard work and dedication during this last
year in what have been exceptionally
challenging circumstances.
Karen Geary
Remuneration Committee Chair
9 March 2022
National Express Group PLC Annual Report 2021
92
Directors’ Remuneration Report continued
Letter from the Remuneration Committee Chair
continued

Alignment to strategy and culture, ensuring risk mitigation and supporting clarity, simplicity,
proportionality and predictability
Ensuring that our Directors’ remuneration arrangements support the delivery of the Evolve strategy is important to the Committee,
andthis is achieved through aligning the performance measures and targets used in our incentive schemes with our key strategic
priorities. The Committee also ensures that the right behaviours and actions are driven from the top of the organisation down by
ensuringthat the focus of these measures and targets is balanced across both financial and non-financial outcomes, for example
theinclusion of employee, customer, and health, safety and environment metrics in both the personal element of the annual bonus
andthe LTIP. The Committee also takes into consideration the Group’s financial and non-financial performance and environment
whenreviewing formulaic outcomes of metrics across all incentives, which is evidenced throughout this report.
The table below explains how the Directors’ Remuneration Policy, and the Committee’s practice in applying it over the year under
review,address the factors set out in Provision 40 of the UK Corporate Governance Code, as well as how they are aligned with the
Company’s culture:
Clarity Simplicity Risk
− This report sets out a summary of the
Remuneration Policy and how it has
operated during the year.
− Clarity and transparency is achieved
through a combination of explanations
for decisions taken and disclosure
ofthe nature and weighting of
annualbonus targets and LTIP
performance measures.
− The Remuneration Policy and
itsimplementation look to
supportthewider National Express
business strategy.
− Achieved by Directors’ remuneration
being composed of a limited number
of elements designed to balance the
retention and incentivisation of
Directors with the delivery of strategy
and shareholder returns.
− Executive Director remuneration
iscomposed of only four elements:
base salary, pension and other
benefits, annual bonus and LTIP.
− The annual bonus and LTIP structure
operated are market typical and are
well understood by shareholders and
executives alike.
− A range of features of Directors’
remuneration assist in mitigating
therisks of excessive rewards and
inappropriate behaviour.
− Executives are expected to build
amaterial shareholding which
mustbemaintained for a period
following departure, which aligns
themto the long-term interestsof
National Express.
− Additionally, variable remuneration
issubject to malus and clawback
provisions, ensuring that there is
long-term alignment of the executives
to any risks the business may have
been exposed to during their period
as an executive.
Predictability Proportionality Alignment to culture
− Some of the same features
ofDirectors’ remuneration
arrangements that mitigate risk
alsoensure that outcomes are
withinapredictable range.
− Shareholders are provided with
potential values which can be
awarded to Executive Directors
underthe annual bonus and LTIP.
− Achieved through the use of variable
remuneration arrangements which
links remuneration outcomes and
thefinancial and non-financial
performance of National Express.
− The Remuneration Committee has
theability to apply discretion to variable
remuneration to ensure that outcomes
are proportionate and reflects the
performance of the business.
− Achieved through strong links
between Directors’ remuneration
andthe Company’s values.
− National Express’ values are Safety,
Excellence, Customers, People and
Community & Environment.
− Elements of the Remuneration Policy
for executives are cascaded through
the business.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
93
Directors’ Remuneration Policy
for Executive Directors

Wider workforce context
Comparison with approach to remuneration across the Group
The Group operates across a number ofcountries and accordingly sets terms and conditions for employees which reflectthe different
legislative requirementsand labour market conditionsthat exist in each country.
We have a framework for recognition and rewards internationally. We will always meet or exceed national minimum standards of
employment in all our business divisions, offering pay and other terms and conditions that are appropriate to each labour market in
which we operate. In particular, we are committed to adhering to the Living Wage in the UK and to at least the national minimum wage
ineach of the other countries we operate in. Base pay is set at a level that allows us to recruit and retain colleagues in each relevant
labour market and performance-related pay arrangements are based on the achievement of business division and teamor individual
goals, objectively assessed. The Company believes in the value of continuous improvement, for boththe individual and the Company.
The Group offers pension and pension savings arrangements to its employees appropriate for the labour markets in whichit operates.
In the UK, in line with market practice, employees are offered membership of a defined contribution plan, with employer contributions
forthe majority of employees equal to 3% of base salary. The Group also has a legacy defined benefit scheme in its UK Bus division,
withemployer contributions of 35% of base salary. In the UK, employees also receive death-in-service benefits and free travel on
theCompany’s transport services, and middle and senior managers may also receive car or travel allowances and/or private medical
insurance, subject to their employee grade.
The Group’s divisions operate various cash bonus incentive schemes for appropriate individuals, incentivising the delivery of particular
divisional strategic, operational, safety and personal objectives. Senior management participates in a bonus scheme which is broadly
aligned with Executive Directors’ annual bonuses, where targets may relate to divisional rather than Group-wide performance and/or
place more emphasis on divisional strategic or safety objectives and/or personal objectives. LTIP awards are also granted to selected
senior managers to incentivise and reward them for delivering long-term value for the Company and its shareholders.
Measures for bonus arrangements across the Group are based on different measures depending on the nature of the business unit,
andtypically outcomes were between target and maximum.
National Express Group PLC Annual Report 2021
94
Directors’ Remuneration Report continued
Directors’ Remuneration Policy
for Executive Directors continued

Directors’ Remuneration Policy for Executive Directors
The table below sets out an abridged version of the Remuneration Policy for the Company which was approved by shareholders
atthe2021 AGM. The Policy took effect from the date of approval and is intended to apply until the 2024 AGM.
The full Directors' Remuneration Policy can be found within the Governance section of the National Express website
Element and link to strategy Operation Maximum opportunity and performance conditions
Base salary – To recruit,
rewardand retain Executive
Directors of a suitable calibre
forthe role and duties.
Salaries for Executive Directors are reviewed
annually by the Remuneration Committee
witheffect from 1 January.
Reviews cover individual performance,
experience, development in the role and
market comparisons.
When reviewing Executive Directors’ salaries, consideration
will always be given to the general performance of the
Company and the approach to employee pay across the
Group. Therefore, salary increases will not normally exceed
the general employee increase. Larger increases may be
necessary in exceptional circumstances.
No increase will exceed 10% above RPI in any one year,
except for internal promotion or where the Executive Director’s
salary is below the market level.
Pension – To provide fair benefits,
in line with the widerworkforce, to
allow individuals to work towards
savings for retirement.
Executive Directors receive a cash allowance
in lieu of a pension provision.
Executive Directors’ pensions are aligned
withthose of the majority of the UK workforce
(which is currently 3% of salary), with the
exception of the incumbent CFO, whose
pension entitlement will reduce to bealigned
with the then prevailing majority UK workforce
pension contribution level from 1January 2023.
The maximum annual cash allowance payable in lieu of a
pension provision for the incumbent Group Chief Financial
Officer will be equal to 25% of base salary for the period until
1 January 2023.
After this date, and for any new Executive Directors appointed
from 1 November 2020, the annual cash allowance payable in
lieu of a pension will be equal tothewider workforce pension
contribution rate.
Benefits – To provide competitive
benefits as part of fixed
remuneration to enable the Group
to recruit and retain high
performing Executive Directors.
Executive Directors receive a
combinationoffamily private healthcare,
death-in-service and life assurance cover
(4xbase salary), long-term sickness and
disability insurance, car allowance, free
travelon the Company’s services and
professional membership subscriptions.
The cost to the Company of providing the benefits may
varyfrom year to year in accordance with market conditions.
This will therefore determine the maximum amount that will
bepaid in the form of benefits to Executive Directors during
the Policy period.
Annual bonus – To incentivise
delivery of near-term performance
objectives which are directly linked
to the financial, strategic delivery
and risk management priorities of
the Group.
Performance conditions are a combination of
financial and non-financial objectives (including
strategic delivery, risk management and
personal) set at thebeginning of each year.
Performance conditions will not be disclosed
in advance (except for any numerical safety
performance conditions) as the Committee
considers this information commercially
sensitive. Performance outcomes will be
reported retrospectively.
50% of the bonus earned is subject to
mandatory deferral into shares for one
yearfrom award.
The annual bonus includes the ability for
theCommittee to use its discretion to adjust
the bonus outcome if outcomes are not
reflective of overall corporate performance
and/or individual performance. Malus and
clawback provisions also apply during the
two-year period post award, including
following cessation of employment.
Bonus payments are paid following
announcement of the Company’s audited
yearend results and are not pensionable.
The maximum bonus award is equal to 200% of base
salaryfor the Group Chief Executive Officer and 150%
ofbasesalary for other Executive Directors.
The financial performance conditions will typically relate
toprofit and/or cash generation, are set on an annual
basisand are intended to be achievable at threshold
andstretching at maximum.
The non-financial performance conditions will be set annually
based on objectives for the year. These may include safety,
operational and business development objectives, customer-
related developments or metrics, colleague-related developments
or metrics, and environmental, socialand governance (ESG)
developments or metrics, asdetermined bythe Committee
onan annual basis.
Normally, the proportion of the bonus determined by
non-financial performance conditions will only become
payable when the Company achieves a threshold level of
underlying profit, but the Committee has discretion to vary
thisin appropriate circumstances.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
95

Element and link to strategy Operation Maximum opportunity and performance conditions
Long-Term Incentive Plan – to
encourage strong and sustained
improvements in financial
performance, in line with the
Company’s strategy to align
executives to the long-term
interestof shareholders.
LTIP awards (in the form of conditional
shares,nil cost options or forfeitable shares)
are granted annually, with vesting subject to
the achievement of performance conditions
measured over a three-year consecutive
financial period commencing with the
yearofaward.
An additional two-year holding period for
vested shares exists post vesting for the
Executive Directors.
Dividend equivalents and dividends can
bepaid on vested shares, in shares, inrespect
of both the performance and holding periods.
Awards are reviewed annually to ensure that
grant levels, performance criteria and other
features remain appropriate to the Company’s
current circumstances.
The LTIP includes the ability for the Committee
to use its discretion to adjust theLTIP
outcomes if such outcome is not reflective
ofoverall corporate performance and/or
individual performance. Malus and clawback
provisions also apply during the two-year
period post vesting, including following
cessation of employment.
The maximum LTIP award is equal to 200% of base salary,
perannum, for all Executive Directors.
For FY22 the LTIP awards will have performance conditions
relating to EPS, ROCE, TSR and ESG measures.
The threshold vesting level will be no more than 25%, and
mayvary by performance condition and from yeartoyear.
There is no ability to retest any of the performanceconditions.
To the extent that legal, regulatory or other investigations
orproceedings are ongoing in relation to such an event,
theCommittee has the discretion to delay the vesting of
anLTIP award (in whole or in part) until those investigations
orproceedings are completed.
The Committee also retains discretion under the LTIP rulesto
amend existing performance conditions to take account of any
events that may arise which would mean, inits opinion, if such
adjustments were not made, theperformance condition would
not constitute a fair measure of the Company’s performance
over the measurement period.
1.1 Shareholding requirement for Executive Directors
Executive Directors are required to build up a shareholding to a value equal to 200% of base salary over a five-year period commencing
from the later of the 2021 AGM or their date of appointment. Compliance with this requirement is a condition of continued participation
inthe Company’s LTIP and other equity incentive arrangements.
A shareholding requirement will continue to apply to an Executive Director for two years after the cessation of employment.
Only shares derived from the 2021 LTIP awards and other share awards granted after the Policy comes into effect will be included in the
post-cessation shareholding requirement. Shares held by an Executive Director prior to the Policy coming into effect or vesting under an
award granted to an Executive Director prior to the Policy coming into effect (other than the 2021 LTIP award), and shares independently
acquired by an Executive Director will not be included.
1.2 Performance conditions under the annual bonus and LTIP
Performance measures for the annual bonus are selected annually to align with the business goals for the year. ‘Target’ performance
istypically set in line with the business plan for the year. If the Committee materially changes the LTIP performance conditions within
thelife of the Policy, it will consult with shareholders in advance on the changes to be made and the reasons for doing so.
1.3 Malus and clawback provisions
Executive Directors’ annual bonus awards and LTIP awards are subject to malus and clawback provision and will be applied in the
following circumstances:
− the discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company for
aperiodthat was wholly or partly before the end of the period over which the performance target applicable to an award was
assessed (or was due to be assessed);
− the discovery that the assessment of any performance target, measure or condition in respect of an award was based on error,
orinaccurate or misleading information;
− the discovery that any information used to determine any performance target, measure or condition in respect of an award (or to
determine the number of shares over which an award was granted) was based on error, or inaccurate or misleading information;
− there is action, inaction or conduct of an award holder which, in the reasonable option of the Committee, amounts to fraud or
grossmisconduct;
− there is action, inaction or conduct of an award holder which has had a significant detrimental impact on the reputation of the
Company; or
− the Company becomes insolvent or otherwise suffers a corporate failure in connection with which the value of the Company’s
sharesis materially reduced, provided the Committee is satisfied after due investigation that the award holder should be held
responsible (inwhole or in part) for that insolvency or corporate failure.
National Express Group PLC Annual Report 2021
96
Directors’ Remuneration Report continued
Directors’ Remuneration Policy
for Executive Directors continued

1.4 Previous arrangements
For the avoidance of doubt, the Committee holds the authority to honour any outstanding commitments (subject to existing terms,
conditions and plan rules, as applicable) entered into with current or former Directors (as previously disclosed to shareholders) before
this Policy took effect or before they became a Director.
1.5 Executive Directors’ service agreements
The Executive Directors have service agreements with the Company, and the table below shows the dates of those agreements and the
relevant notice period to be provided by the parties to them in normal circumstances:
Executive Director Date of service agreement Date of appointment
Notice period from
Company Notice period from Director
Ignacio Garat 11.10. 20 01.11.20 12 months 6 months
Chris Davies 17.01.17 10.05.17 12 months 6 months
As stated in the 2020 Annual Report, Ignacio Garat’s notice was extended from 6 months to 12 months effective from 1 May 2021.
The Committee regularly reviews its policies on executive remuneration and severance in the best interests of shareholders.
Guidance onbest practice expectations is taken into account prior to agreeing Executive Directors’ contractual provisions.
1.6 Approach to the remuneration of newly appointed Executive Directors
When determining the remuneration arrangements for a newly appointed Executive Director, the Committee will take into consideration
all relevant factors to ensure that arrangements made are in the best interests of both the Company and its shareholders.
The Committee will generally seek to align the remuneration of any new Executive Director following the same principles as for the
current Executive Directors.
The Committee may also make awards on the appointment of an Executive Director to ‘buy out’ remuneration arrangements being
forfeited by the individual on leaving a previous employer. Awards made by way of compensation for forfeited awards would be made
ona comparable basis, taking account of performance conditions and achievements (or likely achievements), the proportion of the
performance period remaining and the form of the award..
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
97

Statement of implementation of current Directors’ Remuneration Policy in 2022
(a) Executive Directors’ fixed remuneration
Base salaries are to remain the same for the year commencing 1 January 2022.
Ignacio Garat, Group Chief Executive Officer £575,000
Chris Davies, Group Chief Financial Officer £425,000
Pension and benefits will operate in line with the Directors’ Remuneration Policy.
(b) Executive Directors’ annual bonus
Executive Directors’ annual bonuses for the 2022 financial year will provide a maximum opportunity of 150% of salary for the CEO and CFO.
For the CEO, this is below the policy maximum of 200%, equal to the maximum opportunity for the CEO’s predecessor.
Performance will be assessed by reference to the following performance measures, with weightings indicated in brackets:
− Financial, Group Underlying Profit Before Tax (50%)
− Financial, Group free cash flow (25%)
− Group Safety, Fatalities Weighted (FWI) Index score (15%)
− Personal Objectives, Strategic & Risk (10%)
A zero responsible fatality underpin will also apply to the full 15% safety element.
When considering the bonus structure and setting the bonus targets for 2022, the Committee has taken the following into account:
− The need to fully align to the Evolve strategy set out at the Capital Markets Day (CMD) on 18 October 2021.
− That both Group Underlying Profit Before Tax and free cash flow are key financial measures of the overall financial performance of the
business and linked directly to our financial KPIs – see pages 28 to 29. The Committee is keen to ensure that Executive Directors are
focused on driving growth in profit in order to generate higher and sustainable returns for our shareholders and providing the platform
for further growth for all our stakeholders, including our employees, our customers and our partners.
− The importance of safety to the Group and all its stakeholders. On-target FWI performance has been set as equal to or better than the
normalised three-year average FWI score in the last three years, with maximum payout requiring performance that is equal or better
than the best normalised FWI score in the last three years.
− Personal objectives have been specifically selected in order to drive recovery following the impact of the pandemic, drive delivery of
the Evolve strategy and position the business for future growth.
The Committee will disclose the exact targets, the threshold to maximum performance ranges and the strategic and risk management
objectives (which are considered commercially sensitive), and the actual performance against these financial targets and the non-
financial bonus objectives, in next year’s report.
(c) Executive Directors’ 2022 Long-Term Incentive Plan (LTIP) awards
Executive Directors’ LTIP grants for the 2022 financial year will provide a maximum opportunity of 200% of salary for the CEO and 150%
of salary for the CFO. For the CFO, this is a reduction from the 200% of salary grant level in 2021.
Performance will be assessed against the following measures:
Performance condition Weighting
Threshold (25% vesting for
TSR and EPS, 0% for
others) Target (50% vesting) Maximum (100% vesting)
TSR
1
vs. FTSE 250 Index 25% Median – Upper quintile
EPS
2,3
25% 21.7p 24.9p 26.5p
ROCE
2,4
25% 9% 10.5% 12%
tCO
2
e/million passengerkm–
reduction in tCO
2
e/million
passenger km by 2024
relativeto 2019 base year
5
12.5% 8.4% 9% 9.6%
Fleet transition – number
ofadditional zero emission
vehicles in service or on order
by 31 December 2024 12.5% 400 600 1,000
1
For TSR measures, straight-line vesting will occur between threshold and maximum levels of performance
2
For EPS, ROCE and ESG measures, straight-line vesting will occur between threshold and target, and between target and maximum levels of performance
3
EPS is fully diluted underlying earnings per share in 2024
4
ROCE is return on capital employed in 2024
5
2019 is the baseline used for the sectoral decarbonisation target-setting methodology
National Express Group PLC Annual Report 2021
98
Directors’ Remuneration Report continued
Annual Report on Remuneration

As with the annual bonus, a key objective for the Committee is to ensure remuneration arrangements align to the strategic priorities set
out in the Evolve strategy at the CMD. Vested shares will be subject to a compulsory two-year holding period and malus and clawback
will apply for two years from the date of vesting, including post termination of employment. Dividend equivalents are payable in cash on
vested shares over the vesting period and during the holding period while options remain unexercised.
The 2022 LTIP award will be subject to a single TSR condition, relative to the FTSE 250 Index only. The decision to remove the bespoke
group TSR performance condition reflects the expected shrinking of the peer group due developments with both Stagecoach and
Go-Ahead. The Committee willagain review this approach ahead of the next LTIP grant in 2023.
The EPS performance range is fully aligned with the targets set out at the CMD. Achieving these targets will result in this element of the
LTIP awards paying out at the on-target level. More specifically, the EPS on-target level for 2024 is set on the basis of a) growing revenue
on a straight-line basis to £1 billion of incremental revenue by 2027 and b) achieving the 9% margin targeted.
The ROCE performance range has increased from that set out in recent LTIPs awards where both the 2020 and 2021 LTIP awards
adopted a threshold of 8%, on-target of 9% and maximum at 11%. This reflects the ambitions of the Evolve strategy to grow profit
andcash whilst also containing the Balance Sheet impact from the ambitious zero emission fleet transition targets.
Recognising the ‘Environmental leader’ outcome of Evolve, the Committee revisited the ESG measures to ensure they are appropriate.
During consultation with shareholders, many highlighted their desire for ESG measures to remain a key part of Executive Directors’
overall remuneration but also emphasised a desire that any metrics remain objective, measurable and stretching. The Committee
concluded that although the overall weighting of the ESG element, 25% of the total award, was appropriate, it should also measure
fleettransition rather than solely tCO
2
per million passenger km (as had been the case before 2021). This will provide additional focus
onfleet transition, which is an area that is a particular long-term focus for both shareholders and many of our wider stakeholders.
The Committee will continue to review best practice in this area and evolve the incorporation of ESG measures into variable
remunerationarrangements.
The performance conditions will be measured over the three-year financial period ending 31 December 2024, awards will be subject to
acompulsory two-year holding period post vesting, and malus and clawback will apply for two years from the date of vesting, including
post termination of employment. Dividend equivalent entitlements will attach to any vested shares over the vesting period and during the
holding period while options remain unexercised and will be satisfied in shares rather than cash.
(d) Chairman’s and Non-Executive Directors’ 2022 fees
Non-Executive Director fees will operate in line with the Directors’ Remuneration Policy.
With effect from 1 January 2022, the Committee determined for the Chairman, and the Board determined for the Non-Executive
Directors, that there would be no change to fee levels, which would remain as follows:
Role Fees (gross)
Chairman £259,325
Senior Independent Director (additional fee) £11,000
Non-Executive Director (base fee) £56,000
Committee Chair (additional fee) £12,000
Non-Executive Directors’ dates of appointment and notice periods
The current Chairman’s and Non-Executive Directors’ dates of appointment and current notice periods are shown in the table below:
Director Date of appointment Notice period from either party (months)
Sir John Armitt 01.01.13 3
Jorge Cosmen 01.12.05 1
Matthew Crummack 06.0 5.15 1
Mike McKeon 03.07.15 1
Dr Ashley Steel
1
01.01.16 1
Karen Geary 01.10.19 1
Ana de Pro Gonzalo 01.10.19 1
Carolyn Flowers 01.06.21 1
1
Dr Ashley Steel stood down from the Board on 3 December 2021 with immediate effect
The letters of appointment for the Chairman and the Non-Executive Directors, together with the service agreements for the Executive
Directors, are available for inspection at the Company’s registered office.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
99

1. Single total figure of remuneration for Executive Directors
The table directly below sets out the single total figure of remuneration and breakdown for each Executive Director who served during
the financial year ended 31 December 2021 (with comparative figures provided for 2020). The subsequent information and tables in this
section give more detail on various elements of the Executive Directors’ remuneration.
£’000
Base salary
1
Benefits
2
Pension
allowance
Total fixed
remuneration
Annual
bonus
3
Vested
LTIPs
4
Total variable
remuneration Total
Ignacio Garat 2021 575 48 17 640 410 0 410 1,050
2020 96 38 3 137 – – 0 137
Chris Davies 2021 425 13 106 544 303 0 303 847
2020 366 44 95 505 – 32 32 537
1
The 2020 base salary of Mr Garat reflects that he served as a Director for only part of the 2020 year
2
Benefits comprise the gross of the tax value of car allowance and private medical insurance. Mr Garat is entitled to certain benefits in connection with his appointment and his
relocation to the UK to take up his appointment. These comprise the following four elements: (i) the reimbursement of up to £8,000 of Mr Garat’s qualifying expenditure in connection
with his relocation, which expenditure in 2021 was £1,495 (2020: £1,990); (ii) the reimbursement of the cost of serviced accommodation for Mr Garat in London until 31 March 2021, the
cost of which in 2021 was £12,215 (2020: £9,820); (iii) the reimbursement of the cost of preparation of Mr Garat’s UK and Spanish tax returns for the first two tax periods following his
appointment, the cost of which in 2021 was £2,150 (2020: £3,000); and (iv) the reimbursement of legal advice obtained by Mr Garat in connection with his employment contract, the
cost of which in 2021 was £925 (2020: £4,823). The tax due on the taxable benefits in 2021 was £19,255 (2020: £14,452), paid in the following tax year. (2020 figures updated to reflect
updated taxable values)
3
Full disclosure of the annual bonus amounts and delivery mechanism are set out in section 1 Annual bonus below
4
Mr Garat did not receive a 2019 LTIP award as he joined the Company in 2020. The 2019 LTIP awarded to Mr Davies will vest at 0% with full details set out in section 1(i) LTIP awards
vesting in 2022 below. As the value of LTIP shares which vested to Mr Davies in 2021 in respect of his award granted in 2018 which was subject to performance conditions over the
three-year performance period ended on 31 December 2020 was estimated in last year’s report, the figure shown for 2020 in the table above has been adjusted to reflect the actual
vesting date value for Mr Davies based on the Company’s share price at vesting of 329.4p. The difference in value is £11,664
(a) Annual bonus
The table below summarises the 2021 bonus potential for the Executive Directors that the Remuneration Committee set for 2021:
Weighting
At threshold
performance
(% of salary)
At target performance
(% of salary)
At maximum
performance
(% of salary)
Potential bonus in respect of financial objectives 75% 0% 56.25% 112.5%
Potential bonus in respect of safety objectives 15% 0% 11.25% 22.5%
Potential bonus in respect of personal objectives 10% 0% 7.5% 15%
Bonus potential for 2021 100% 0% 75% 150%
A pre-condition to the award of any element of the 2021 bonus is that there have been no significant negative events that have a material
adverse impact on both the reputation of the Company and its share price as a result of the systematic failure of management to put in
place and operate effective safety processes (the ‘safety underpin’). In addition, 50% of the bonus earned is subject to mandatory
deferral into shares for one year from award.
(i) 2021 bonus out-turn
The formulaic out-turn of Executive Directors’ bonuses, as set out in section 1(ii) – 2021 bonus performance conditions below, was 95%
of maximum. As outlined in the Committee Chair’s annual statement, although the Committee recognised the encouraging financial and
non-financial performance which was achieved during the year, in the context of a challenging business environment for the transport
sector, as well as the ongoing impact of the pandemic and government restrictions, the Committee felt that the formulaic outcome did
not appropriately reflect the overall business context.
The Committee acknowledged that the Group’s wider employee experience over 2021 had generally been positive despite the ongoing
impacts of the pandemic. In addition to the ongoing commitment of National Express to be a Living Wage accredited employer in the UK,
this was also demonstrated by the decision to top up CJRS payments to those employees who received them to 100% of salary, the
decision to award salary increases across the workforce at an average of 2.5% and to play employee bonuses to all eligible employees
without reduction. Bonus measures vary across each business division and the level of employee, but overall bonus payments were
between target and maximum reflecting their significant contribution to the Group’s ongoing recovery.
However, the Committee also acknowledged that the Group did receive support through the CJRS in 2021 for its UK Coach business
only (in the amount of £8.9 million). As outlined in the Committee Chair’s annual statement, the Company intends to repay this CJRS
support at the same time as dividends have been reinstated (having already repaid all UK government borrowings). The Chairman has
stated in the introduction to this Annual Report that it is the Board’s intention to reinstate a final dividend for the 2022 financial year.
The Committee was also cognisant that whilst the Group returned to underlying profitability and the share price increased by c.10%
overthe year (having recovered strongly from its low in 2020), the Company has not yet resumed dividend payments to shareholders.
As such, the Committee was keen to engage with shareholders on a range of options in order to best take account of shareholder
experience in determining final outcomes. All shareholders recognised that there were a number of complicating factors that needed
tobe considered when making decisions in respect of variable pay outcomes for 2021. Shareholders appreciated the progress
management had made over the period, with a number noting no bonus had been paid in 2020, in addition to the minimal levels
ofLTIPvesting last year and this year (see below).
Taking these and other factors into account, there was broad appreciation from shareholders that paying a bonus in respect of 2021 was
the correct decision. However, shareholders were appreciative that the Committee felt strongly about ensuring outcomes were reflective
of the wider stakeholder experience.
National Express Group PLC Annual Report 2021
100
Directors’ Remuneration Report continued
Annual Report on Remuneration
(Audited Information)

As a result, the Committee assessed a number of factors and determined that downwards discretion should be applied. This resulted
inthe formulaic outcome being halved to 47.5% of maximum for both the CEO and CFO. In addition, the whole of the bonus will be
delivered in shares and subject to a three-year deferral period. To facilitate this within the parameters of the Remuneration Policy, the
following approach will be applied to 2021 bonus awards:
− once the 50% of the award deferred into shares has vested after one year (in line with the Remuneration Policy), the net of tax number
will be retained for a minimum of a further two years, to total three years; and
− the other 50% of the bonus earned will, after tax has been deducted, be invested in shares which will be retained for a minimum ofthree years.
Further, these shares will then also be subject to the shareholding guidelines stated within the Remuneration Policy.
2021 salary
Bonus opportunity
(% of salary)
Formulaic outcome
(% of max)
Formulaic outcome
(£)
Determined
outcome
(% of max)
Determined
outcome
(£)
CEO £575,000 150% 95% £819,375 47.5% £409,688
CFO £425,000 150% 95% £605,625 47.5% £302,813
(ii) 2021 bonus performance conditions
The following table sets out performance conditions that were attached to Executive Directors’ 2021 bonus and the associated outcomes.
Category Measure Threshold Target Max Weighting
Outcome
achieved
Bonus
achieved
Financial Group Underlying
ProfitBefore Tax 5.3 20.8
1
36.3 50% 39.7 50%
Free cash flow 81.9 91.0
1
100.1 25% 123.4 25%
Safety FWI 0.0030 5% 0.0055 0%
Driver risk 2,400.7 5% 1,504.78 5%
Preventable
VehicleAccidents 14.38 5% 13.62 0%
Personal 10% 10% 10%
Formulaic 2021 bonus outcome (% of maximum) 95%
2021 bonus outcome following the application of downwards discretion 47.5%
1
Consistent with previous years and associated disclosures, the Group Underlying Profit Before Tax and free cash flow targets are adjusted to align the method of calculation to
thebasis on which the performance out-turn is calculated. The original Group Underlying Profit Before Tax target was set at £25.5m. After adjustment to reflect foreign exchange
movements and variances in acquisition investment (compared to budgeted levels), the revised target was £20.8m, with the threshold and maximum amounts adjusted accordingly.
The original Group free cash flow target was £119.0m. After adjustment to reflect foreign exchange movements and timing of capital expenditure payments (to align with the budgeted
assumptions), the revised target was £91.0m, with the threshold and maximum amounts (set at -/+ 10% of the target) adjusted accordingly
Personal objectives
Personal performance objectives
(10% of maximum total weighting) Performance against objective
CEO − Develop and present strategic priorities to meet Board
and stakeholder objectives
− Met in full – Evolve strategy and key business priorities
launched at CMD on 18 October 2021
2%
− Agree digital strategy for next three years, including
the main technology drivers to support delivery of
strategy
− Met in full – roadmap identified to deliver key customer
propositions set out with Evolve strategy
2%
− Ensure flawless and on time execution of Driving
Excellence Programme in North America and deliver
budgeted results for year 1
− Met in full – Driving Excellence programme embedded
within North America, with operational improvements and
budgeted results achieved
2%
− Build strong relationships with key global
governmental parties and institutions
− Met in full – relationships with key individuals and bodies
further strengthened throughout 2021
2%
− Evolve and improve continuous improvement culture
across the Group to deliver process improvements
− Met in full – embedded Operate policies, process and
culture with training and mindset improvements delivered
across business divisions to all leaders
2%
CEO bonus achieved (out of 10% of maximum)
10%
CFO − Develop and present strategic priorities to meet Board
and stakeholder objectives
− Met in full – Evolve strategy and key business priorities
launched at CMD on 18 October 2021
2%
− Establish pilot external “LeaseCo” operations in one
or both of NA and UK to materially improve ROCE
(annualised capex saving > £50m) and speed the
transition to ZEVs
− Met in full – established with capex savings of £75m
2%
− Put in place the people, processes and technology to
sustain level of cyber security in all divisions across
the Group
− Met in full – full suite of training launched across the
Group in addition to programmes of pen testing, phishing,
test alerts and ongoing awareness)
2%
− Design and lead a full climate risk assessment to
underpin the case for modal shift
− Met in full – assessment completed and roadmap
identified. See ESG section on pages 30 to 34
2%
− Design and lead a cost reduction programme to
reduce permanent fixed cost from the business
− Met in full – £100m of cost savings achieved
CFO bonus achieved (out of 10% of maximum)
10%
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
101

(b) LTIP vesting and awards
(i) LTIP awards vesting in 2022
The three-year LTIP awards granted to Executive Directors in 2019 (which have not already lapsed) are scheduled to vest in April 2022 as
the measurement period relating to them ended on 31 December 2021. Following a formulaic approach, this LTIP award will vest in 2022
at nil, as the threshold vesting level has not been achieved in respect of any of the four performance measures. Whilst there are many
factors that could have been taken into account to adjust the formulaic outcome, the Committee did not feel it was appropriate to make
any such adjustments in light of the shareholder experience during this period.
Details of the performance conditions attaching to the 2019 LTIP awards, which were granted as nil cost options, and the extent to which
they have been met, are set out in the table below:
Performance
condition Weighting
Threshold
(25% vesting for
TSR and EPS, 0%
for ROCE)
Target
(50% vesting)
Maximum (100%
vesting) Actual
Percentage
vesting
TSR
1
vs. FTSE
250 Index 16.66% Median – Upper Quintile
Below Median
191 out of 218
companies 0%
TSR
1
vs.
Bespoke Index
2
16.66% Equal to Index – ≥ Index + 10% p.a. Below Index 0%
EPS
3, 4
33.33% 35.3p 37.4p 39.0p 0.1p 0%
ROCE
3, 4
33.33% 8% 9% 11% 3.4% 0%
Total vesting 0%
1
For TSR performance measures, straight-line vesting occurs between threshold and maximum performance
2
The Bespoke Index comprises three other UK-based passenger transport groups: FirstGroup plc; Stagecoach Group plc; and Go-Ahead Group plc
3
For EPS and ROCE performance measures, straight-line vesting occurs between threshold and target performance, and between target and maximum performance
4
Actual EPS is the fully diluted underlying earnings per share in the last year of the performance period. Actual ROCE is the average return on capital employed over the three-year
performance period
It was a pre-condition to the LTIP awards vesting that the Committee determined that a significant negative event had not occurred
thathad a material adverse impact on both the reputation of the Company and its share price as a result of the systematic failure
ofmanagement to put in place and operate effective safety processes (the safety underpin), which was so determined. However,
thisdidnot affect the outcome which was nil vesting, as explained above.
(ii) Vesting details
The table below shows details of the 2019 LTIP nil cost option award:
Executive Director
Number of shares over
which option was
awarded
Number of shares
scheduled to vest
Amount of award to
vest
Amount of award to
vest attributed to
share price
appreciation
Cash dividend payable
on vesting
Chris Davies 133,624 0 0 0 0
(iii) LTIP awards granted in 2021
Details of LTIP awards granted to Executive Directors in 2021 are set out in the table below:
Executive
Director Grant date
Number of
shares awarded Award type Award amount
Face value of
award £’000
Performance
period
Performance
conditions
Ignacio Garat 22.03.2021 366,943 Nil cost option 200% of base
salary
1150 01.01.21–31.12.23 See below
Chris Davies 22.03.2021 271,218 Nil cost option 200% of base
salary
850 01.01.21–31.12.23
1
The number of shares subject to the LTIP awards was determined by dividing the award amount, being the relevant multiple of Executive Directors’ base salaries, by the Company’s
closing share price on the last business day preceding the date of grant, being 313.40p on 19 March 2021
(iv) Performance conditions attaching to 2021 LTIP awards
Performance condition Weighting
Threshold (25% vesting
EPS and TSR, 0% vesting
ROCE and ESG) Target (50% vesting) Maximum (100% vesting)
TSR
1
vs. Bespoke Index
2
12.5% Equal to Index – ≥ Index +10% p.a.
TSR
1
vs. FTSE 250 Index 12.5% Median – Upper Quintile
EPS
3
25% 25.1 25.6 26.3
ROCE
3
25% 8% 9% 11%
tCO
2
e/million passenger km 25% 6% reduction in
tCO
2
e/million
passenger km by
2023 relative
to 2019 base year
7% reduction in
tCO
2
e/million
passenger km by
2023 relative
to 2019 base year
8% reduction in
tCO
2
e/million
passenger km by
2023 relative
to 2019 base year
1
For TSR performance measures, straight-line vesting occurs between threshold and maximum performance
2
Comprising three other UK-based passenger transport groups: FirstGroup plc; Stagecoach Group plc; and Go-Ahead Group plc
3
For EPS, ROCE and ESG performance measures, straight-line vesting occurs between threshold and target performance, and between target and maximum performance
National Express Group PLC Annual Report 2021
102
Directors’ Remuneration Report continued
Annual Report on Remuneration
(Audited Information) continued

Vested shares will be subject to a compulsory two-year holding period and malus and clawback will apply for two years from the date
ofvesting, including post termination of employment. Dividend equivalents are payable in cash on vested shares over the vesting period
and during the holding period while options remain unexercised.
(v) Indicative vesting levels for outstanding LTIP awards
The indicative vesting levels for other outstanding LTIP awards assuming their respective performance conditions were considered by
the Remuneration Committee. Based on performance measures, achievement to date, and appropriate assumptions, the 2020 LTIP
estimated vesting is between 10% and 15%, while the estimated vesting for the 2021 LTIP is between 35% and 50%.
(vi) Executive Deferred Bonus Plan (EDBP)
The table below sets out the awards under the 2020 EDBP in the form of forfeitable shares in the Company. These awards vested on
18 March 2021 and relate to the one-year deferred element of the bonus for the financial year ended 31 December 2019. No awards were
made under the EDBP in 2021, as no bonus was paid to Executive Directors in respect of the financial year ended 31 December 2020.
Executive
Director
As at
1January
2021
Vested 18
March 2021
Granted
March 2021 Lapsed
As at 31
December
2021
Market price
at date of
vesting Date of grant
Date of
vesting
Ignacio Garat – – – – – – – –
Chris Davies 39,847 39,847 311.00p 09.03.20 18.03.21
1
Executive Directors are entitled to receive dividends on deferred forfeitable shares for so long as they are deferred and held in the Company’s employee benefit trust, but no dividends
were paid on the award included in the table as the Company did not pay dividends during the relevant period. Such shares were held in the EBT
2. Single total figure of remuneration for Non-Executive Directors
The table below sets out the single total figure of remuneration (fees) for the Non-Executive Directors who served during the financial
year ended 31 December 2021 (with comparative figures provided for 2020):
Non-Executive Director
2021 fees
£’000
2020 fees
1
£’000
Sir John Armitt (Chairman and Nominations Committee Chair until 4 November 2020)
2
259 238
Jorge Cosmen (Deputy Chairman and Nominations Committee Chair from 4 November 2020)
2
68 54
Matthew Crummack (Senior Independent Director from 3 April 2020)
3
67 62
Mike McKeon (Audit Committee Chair) 68 66
Dr Ashley Steel (Remuneration Committee Chair until 3 December 2021)
4
63 66
Ana de Pro Gonzalo (Independent Non-Executive Director) 56 54
Carolyn Flowers (Independent Non-Executive Director from 1 June 2021)
5
35 –
Karen Geary (Remuneration Committee Chair from 3 December 2021) 57 54
1
The Chairman’s fee and the Non-Executive Directors’ fees reflect their respective 50% and 20% reductions in fees for two months of the 2020 year
2
The Chairman’s fee is all-inclusive, so no additional fees were payable in respect of his chairmanship of the Nominations Committee until 4 November 2020. Conversely, Mr Cosmen
assumed the chairmanship of the Nominations Committee from 4 November 2020, he waived any additional fee for acting as Chair of the Nominations Committee during the balance of 2020
3
Mr Sander stepped down as the Senior Independent Director on 3 April 2020 when Mr Crummack assumed such role and therefore both received a pro-rated proportion of the Senior
Independent Director’s fee for the 2020 year
4
Dr Ashley Steel stepped down as a Board Director and as Remuneration Committee Chair on 3 December 2021. Karen Geary assumed the role of Remuneration Committee Chair on
4 December 2021 and therefore both received a pro-rated proportion of the Remuneration Committee Chair fee for the year
5
Carolyn Flowers joined the Board on 1 June 2021, so her fee reflects the pro-rated proportion of her annual base fee for the year. A travel allowance is also paid to Carolyn Flowers for
each Board meeting or other Board-related matter she attends outside the North American continent, in an amount per such meeting or matter of £1,000. For 2021, Ms Flowers
received £2,000 in respect of this allowance in addition to her base fee
3. Payments to past Directors and payments for loss of office
(a) Payments to past Directors
No payments were made to past Directors during or in respect of the financial year ended 31 December 2021.
(b) Payments for loss of office
No payments were made to any former Directors for loss of office during or in respect of the financial year ended 31 December 2021.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
103

4. Statement of Directors’ shareholdings and share interests
(a) Executive Directors’ interests in shares
Details of the Executive Directors’ and their connected persons’ beneficial interests in the Company’s shares, and of the Executive
Directors’ other interests in shares, as at 31 December 2021, are shown in the table below:
Shares held directly Other share interests
Executive Director
Shareholding
target
(% salary)
Shareholding
value
(% salary)
1
Beneficially
owned
Forfeitable shares
held under the EDBP
not subject to
performance
conditions
Outstanding LTIP
share option awards
subject to
performance
conditions
Ignacio Garat 200%
2
2.73% 6,100 0 366,943
Chris Davies 200%
3
153.13% 253,031 0 567,835
1
The Company’s closing share price of 257.20p as at 31 December 2021 has been used for the purposes of this calculation and has been applied to the beneficially owned shares in
arriving at the shareholding value as at 31 December 2021
2
Mr Garat’s current shareholding requirement applies to the five-year period commencing from the later of the approval of the Directors’ Remuneration Policy and his date of
appointment and therefore Mr Garat has until 12 May 2026 to reach his shareholding requirement
3
Mr Davies’ pre-existing shareholding guideline of 150% applied to the five-year period commencing from his date of appointment on 10 May 2017. Mr Davies has until 12 May 2026,
being the five-year period commencing from the date of the approval of the Directors’ Remuneration Policy, to reach his incremental increased requirement to 200%
The table below provides more information about Executive Directors’ interests in the Company’s shares under outstanding LTIP awards.
Share interests
The table below sets out the share awards granted to current and former Executive Directors under the rules of the Company’s 2015 LTIP
which either vested or lapsed during 2021 or remain outstanding as at 31 December 2021:
Exercised
LTIP award year/type
Date of
grant
Awards held
at
01.01.21 Granted
Exercised/
Eligible for
exercise Lapsed
Awards held
at
31.12.21
Vesting
date
Latest
exercise
date
1
Ignacio Garat
LTIP 3 -year 22.03.21 – 366,943 – – 366,94
3
22.03.24 22.03.26
LTIP 3-year
(ApprovedCSOP)
2
22.03.21 – 9,572
3
– – 9,572
3
22.03.24 22.03.26
– 366,943
3
– – 366,943
3
Chris Davies
LTIP 2-year (RIA) 10.05.17 61,366 – 61,366
4
– – 10.05.19 –
LTIP 3 -year 03.04.18 139,050 – 9,061
5
129,989 – 03.04.21 –
LTIP 3 -year 15.04.19 133,624 – – – 133,624 15.04.22 15.04.24
LTIP 3 -year 12.03.20 162,993 – – – 162,993 12.03.23 12.03.25
LTIP 3 -year 22.03.21 – 271,218 – – 271,218 22.03.24 22.03.26
LTIP 3-year
(ApprovedCSOP)
2
22.03.21 – 9,572
3
– – 9,572
3
22.03.24 22.03.26
497,033 271,218
3
70,427 129,989 567,835
3
1
Awards vesting under the 2015 LTIP are subject to a two-year exercise period and holding period which run concurrently. Latest exercise dates are shown only for those LTIP awards
which have either yet to vest, or which have vested and are yet to be exercised
2
All LTIP awards are granted in the form of nil cost options, save for LTIP approved CSOP awards which are granted as market value share options with an exercise price per share
equal to the share price at grant. Mr Garat’s and Mr Davies’ 2021 CSOP award were granted with an exercise price of 313.4p per share. LTIP approved CSOP awards comply with the
requirements of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 and can be exercised by way of effective set-off against any shares vesting under the corresponding
LTIP award
3
Due to the effective set-off arrangements explained in the note above, the number of shares subject to LTIP approved CSOP awards are not counted in the total number of awards
held as this would result in a double-count
4
Mr Davies’ 2017 two-year LTIP (Recruitment Incentive) award vested on 10 May 2019 and was exercised on 18 March 2021. Mr Davies sold sufficient shares to satisfy his tax liabilities
arising on such exercise and these shares were not subject to any compulsory holding period. The share price on exercise was 303.51p per share
5
Mr Davies’ 2018 three-year LTIP award vested on 3 April 2021 and was exercised on 6 April 2021. Mr Davies sold sufficient shares to satisfy his tax liabilities arising on such exercise
and he continues to hold the remaining vested shares beneficially in accordance with the two-year mandatory holding period. The share price on exercise was 329.4p per share
National Express Group PLC Annual Report 2021
104
Directors’ Remuneration Report continued
Annual Report on Remuneration
(Audited Information) continued

(b) Non-Executive Directors’ interests in shares
The details of the Non-Executive Directors’ and their connected persons’ interests in shares, for current Non-Executive Directors as at
31 December 2021 and for former Non-Executive Directors as at the date they ceased to be Directors, all of which are held beneficially,
are shown below:
Non-Executive Director Beneficially owned
Sir John Armitt 24,554
Jorge Cosmen
1
47,826
Matthew Crummack 18,844
Carolyn Flowers –
Karen Geary 14,347
Ana de Pro Gonzalo 4,347
Mike McKeon 20,869
Dr Ashley Steel
2
32,870
1
Neither Jorge Cosmen nor his connected persons are now sufficiently closely connected with any of the Cosmen family companies which hold shares in the Company (including
European Express Enterprises Ltd, which is a major shareholder in the Company whose shareholding is shown on page 111) for such family companies’ shareholdings to be
considered his or his connected persons’ interests in Company shares
2
Dr Ashley Steel stepped down from the Board on 3 December 2021 and her shareholding above is correct as at that date
(c) Other information
The Register of Directors’ interests maintained by the Company contains full details of the Directors’ holdings in shares and options over
shares in the Company.
The closing price of a Company ordinary share at 31 December 2021 was 257.20p (2020: 237.40p) and the range during the year ended
31 December 2021 was highest 328.20p to lowest 213.60p per share.
(d) Changes since year end
There have been no changes in current Directors’ shareholdings between 31 December 2021 and the date of this report.
5. Comparison of overall performance
The graph below shows a comparison of the Company’s cumulative total shareholder return (i.e. share price growth plus dividends paid)
and annual return against the FTSE 250 Index and a Bespoke Index over the last 10 years. The FTSE 250 Index has been selected as the
Company is a constituent of that Index.
-50
10
70
130
190
250
31/12/2011
National Express Group – Cumulative return
FTSE 250 – Cumulative return
Peer Group – Cumulative return
Shareholder returns – 10-year history
31/12/2012 31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019
31/12/202131/12/2020
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
105

6. Context of Directors’ pay
The following table sets out the actual percentage change from 2020 to 2021 in certain elements of the remuneration paid (where
applicable) to each of the persons who served as Directors during 2021, compared with the average percentage change from 2020
to2021 in those same elements of remuneration for the Group’s employees. It also sets out, by way of voluntary disclosure,
acomparison with the Group’s whole UK employee population as this provides a more meaningful comparison in view ofthefact
thatthe Company itself only employs a small proportion of the Group’s employees.
The elements of each Executive Director’s remuneration included in the table below comprise base salary, taxable benefits and annual
bonus calculated in the same way as in the single total figure of remuneration table on page 100. The Chairman and Non-Executive
Directors’ fees included in the table below are calculated in the same way as in the single total figure of remuneration table on page 103.
Actual/Average percentage increase/
(decrease) from 2019 to 2020
Actual/Average percentage increase/
(decrease) from 2020 to 2021
Director or comparator group
Base
salary/
fees Benefits
1
Performance-
related
bonus
2
Base
salary/
fees Benefits
1
Performance-
related
bonus
2
Ignacio Garat, current CEO – – – 499.0%
1
200.0%
1
100.0%
2
Chris Davies, current CFO (0.8)%
4
0.0% (100)%
4
16.1%
3
0.0% 100.0%
2
Sir John Armitt, Chairman (5.9)% – – 8.8%
4
– –
Jorge Cosmen, Deputy Chairman 0.0% – – 25.9%
4,5
– –
Matthew Crummack, Senior Independent Director (SID) 14.8% – – 8.1%
4
– –
Mike McKeon, Non-Executive Director 1.5% – – 3.0%
4
– –
Karen Geary, Non-Executive Director 315.4%
7
– – (5.9)%
4,6
– –
Ana de Pro Gonzalo, Non-Executive Director 315.4%
7
– – (5.9)%
4,6
– –
Carolyn Flowers, Non-Executive Director – – – 100.0%
8
– –
Dr Ashley Steel, Non-Executive Director 6.5% – – 4.5%
9
– –
Company employees 5.7% (0.09)% (100)% 4.4%
10
(8.2%)
11
100.0%
2
Company Group UK employees 1.7% (0.09)% (100)% 2.3%
10
(17.0%)
12
100.0%
2
1
Mr Garat joined in November 2020 and the % increase reflects 2020 figure started from join date. No increase in base salary was given for 2021
2
No bonuses were awarded for 2020
3
Reflects the salary increase to £425,000 from 1 January 2021 and the salary sacrifice made in April and May 2020, in light of the pandemic
4
The year-on-year increase reflects salary sacrifices made in April and May 2020 in the light of the pandemic
5
Received an additional £12,000 chair fee from 2021
6
Appointed Chair of the Remuneration Committee on 3 December 2021
7
The significant year-on-year percentage increases in the fees payable to Karen Geary and Ana de Pro Gonzalo reflect that they both joined the Company in October 2019 so only
received fees for 3 months of the 2019 year
8
Appointed on 1 June 2021
9
Resigned on 3 December 2021
10
No general pay rise in 2020, so increase reflective of some employees taking on additional responsibilities during the year and some impact of salary sacrifices in 2020
11
Driven by the net impact of the cost to the Company of providing certain benefits decreasing and the cost of providing others increasing
12
Driven by the net impact of the cost to the Company of providing certain benefits decreasing and the cost of providing others increasing, and the impact of job role changes and promotions
7. History of CEO pay
The table below sets out the total remuneration paid to the Chief Executive Officer over the last 10 years, valued using the methodology
applied to the single total figure of remuneration:
Year
2012 2013 2014 2015 2016 2017 2018 2019 2020
1
2020
2
2021
Chief Executive Officer D Finch D Finch D Finch D Finch D Finch D Finch D Finch D Finch D Finch I Garat I Garat
Single figure total
remuneration (£’000) 1,701 1,553 1,562 3,661 3,887 4,225 4,318 3,048 531 137 1,050
Annual bonus
payment(as% of
maximum opportunity) 100% 95% 93% 96% 83.5% 95% 90% 100% 0% n/a
3
47.5%
LTIP vesting level
achieved(as % of
maximum opportunity) 32.5% 0% 0% 73.4% 80.8% 86.9% 96% 91.53% 0% n/a
3
n/a
4
1
Mr Finch served as Chief Executive Officer from 1 January 2020 to 31 August 2020
2
Mr Garat served as Chief Executive Officer from 1 November 2020 to 31 December 2020
3
In 2020, Mr Garat was not entitled to any bonus award or LTIP award subject to performance conditions whose final year of performance ended during that year
4
In 2021, Mr Garat was not entitled to any LTIP award subject to performance conditions whose final year of performance ended during that year
National Express Group PLC Annual Report 2021
106
Directors’ Remuneration Report continued
Annual Report on Remuneration
(Audited Information) continued

8. CEO pay ratios
The Committee reviewed the Company’s CEO pay ratios and the Group’s employee pay policies and practices when formulating this
Policy, and is satisfied that the structure and quantum of remuneration for the Executive Directors is appropriate in view of their relative
roles and responsibilities.
The following table sets out ratios which compare the CEO’s total remuneration in the Company’s financial year ended 31 December
2021 to that of the Group’s UK employees whose full time equivalent remuneration ranks them at the lower quartile, median and upper
quartile of pay for all of the Group’s UK employees (together with that data for the Company’s previous financial year):
Year Methodology
25th percentile
(lower quartile)
pay ratio
50% percentile
(median) pay ratio
75th percentile
(upper quartile)
pay ratio
2021 Option A 43:1 37:1 31:1
2020 Option A 31:1 26:1 23:1
2019 Option A 156:1 136:1 110:1
Option A was used to calculate the pay ratios as it is the most statistically accurate method and the relevant pay data was available
tothe Company in time for the preparation of this report. The UK employees at the lower quartile, median and upper quartiles
wereidentified as at 31 December 2021 and their full time equivalent total remuneration was calculated in respect of the 12 months
ended 31 December 2021 on the basis explained further below. The employee at the 25th percentile is employed as a cleaner and
theemployees at the 50th and 75th percentiles are employed as bus drivers, with their different pay reflecting overtime and different
pension contributions.
The CEO’s remuneration for 2020 was calculated by:
− combining the total remuneration of the former CEO (Mr Finch) and the new permanent CEO (Mr Garat) as set out in the single total
figure of remuneration table on page 100 and aggregating that sum with the proportion of Mr Davies’ total remuneration as derived
from the single total figure of remuneration table on page 100 which relates to the two-month period during which he served as interim
CEO (including the whole of the fixed salary supplement paid to Mr Davies during that period for acting in that capacity).
The CEO’s remuneration for 2021 was calculated as per the single total figure, shown earlier.
The total remuneration of the UK employees (including those at the lower quartile, median and upper quartiles) has been calculated
using the same methodology as for the CEO’s single total figure of remuneration, noting that:
− a large number of the Group’s UK employees, such as bus and coach drivers and customer service centre staff, work full time but are
paid by the hour (rather than having an annual fixed base salary). Their wages have been calculated as the actual number of hours
worked in the year multiplied by the relevant hourly rates of pay applicable during the year;
− a number of the Group’s UK employees work part time. Those who are paid on a salaried basis have had their salaries and benefits
grossed up to the full time equivalent salary for their role; and
− where the Group’s UK employees were placed on furlough during any part of 2020, the amounts actually paid to them have been
included, including amounts subsequently reimbursed to the Company and its UK subsidiaries by the UK Government under the
Coronavirus Job Retention Scheme and topped-up amounts funded by the Company’s Group.
The table below shows the CEOs’ total remuneration and the salary component of that total remuneration and that of each of the UK
employees at the lower, median and upper quartiles of the Group’s UK employee population for 2021 (together with that data for the
previous year which is calculated on a combined basis):
Year Pay data Group Chief Executive
25th (lower quartile)
percentile
50th (median)
percentile
75th (upper quartile)
percentile
2021 Salary £575,000 £23,768 £25,907 £31,598
2021 Total pay £1,050,106 £24,179 £28,023 £33,707
The Committee considers that the median pay ratio is consistent with the Company’s pay, reward and progression policies. This is
because, when setting CEO pay, the Committee has regard to the same core considerations as those taken into account by the UK
management team when setting UK employee pay, including the Company’s policy to pay market rates of pay that reward employees
fairly for work done and that have due regard to individual performance and Company performance where the individual has the ability
toinfluence wider Company performance. The CEO has ultimate responsibility for, and the greatest ability to influence, the Company’s
performance and returns to shareholders and, to reflect this, a much higher proportion of the CEO’s remuneration comprises
performance-related pay (in the form of an annual bonus and LTIP award vesting) compared with the majority of UK employees.
This means that the pay ratios will fluctuate depending on the outcomes of incentive plans each year, as they did in 2021 (vs. 2020),
reflecting that the CEO’s pay was in line with the Company’s performance and delivery of returns to shareholders, whereas UK
employees’ pay increased in line with their reduced ability to influence Company performance.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
107

9. Relative importance of spend on pay
The table below sets out the total spend on pay in 2021 compared with distributions made to shareholders in 2021 and the figures for
such values in 2020 for further comparison:
Measure
2021
£m
2020
£m
% increase from
2020 to 2021
Overall Group spend on pay including Directors
1
1,156.4 1,138.8 1.55%
Profit distributed by way of dividend
2
0.00%
1
Overall Group spend on pay was calculated by aggregating the Group’s costs of salaries and wages, social security costs, pension costs and share-based payments for all the
Group’s employees whether employed in the UK or overseas in the relevant year, including for these purposes wages and social security costs which have been refunded to the Group
via UK government furlough and equivalent schemes in other countries in which the Group operates. These refunded costs amounted to some £54.3 million, so the overall Group
spend on pay net of such refunds was £1,150.2 million
2
Profit distributed by way of dividend has been used as the comparator measure as it permits a comparison between the Group’s annual investment in its employed workforce and its
annual cost of returning value to shareholders. In 2021 and 2020, this amount was zero as no interim or final dividends were paid in either year
10. Historical results of shareholder voting on remuneration matters
The votes cast on the resolution seeking approval of the Annual Report on Remuneration at the 2021 AGM were as follows:
Resolution % of votes For % of votes Against
Number of votes
withheld
To approve the Annual Report on Remuneration for the year ended 31 December 2020
(advisory vote only) 59.35 40.66 23,473,868
The votes cast on the resolution seeking approval of the current Policy at the 2021 AGM were as follows:
Resolution % of votes For % of votes Against
Number of votes
withheld
To approve the Directors’ Remuneration Policy (binding vote) 72.57 27.43 27,540,836
1
A vote withheld is not a vote in law and is not counted in the calculation of votes For or Against a resolution
11. Retained advisers to the Committee
During the year, the Committee appointed Korn Ferry as its external remuneration consultants following a review of potential advisers by
the Committee. Korn Ferry replaced PwC as advisers, who stepped down to avoid any potential conflicts of interest following appointment
to advise in relation to the potential combination with Stagecoach.
Korn Ferry did not provide any services other than in relation to advising the Remuneration Committee during the year and the
Committee is satisfied that no conflict of interest can arise as a result of these services. Korn Ferry has voluntarily signed up to the
Remuneration Consultants Group Code of Conduct. In view of these factors, the Committee is satisfied that the advice it receives from
Korn Ferry is objective and independent. For the year under review, Korn Ferry received fees of £32,632, and PwC received fees of
£75,900 inconnection with its work for the Committee, which were charged on a time cost basis.
12. Dilution
The Company has permitted share dilution authority reserved to it under the rules of its 2015 LTIP, as previously approved by
shareholders and in line with the Investment Association’s guidelines. However, as the Company’s funding strategy has been and
continues to be to satisfy all outstanding share incentive awards granted under the LTIP (and its other incentive plans) through the
delivery of market purchased shares via the Company’s Employee Benefit Trust, as opposed to by the issue and allotment of new
shares,the Company has not to date used any of its permitted share dilution authority under the 2015 LTIP.
By Order of the Board
Remuneration Committee Chair
9 March 2022
Karen Geary
Independent Non-Executive Director
National Express Group PLC Annual Report 2021
108
Directors’ Remuneration Report continued
Annual Report on Remuneration
(Audited Information) continued

Directors’ Report
Directors’ Report
The information set out on pages 109 to 113 (inclusive), together withthe information referred to below which is incorporated by
reference, comprises the Directors’ Report for the Company’s financial year ended 31 December 2021.
The Company has chosen, in accordance with Section 414(C)(11) of the Companies Act 2006 (as amended), to set out certain information
required to be included in this Directors’ Report in the Strategic Report. The Company has also set out certain other information required to
beincluded in this Directors’ Report in the Corporate Governance Report and the Consolidated Financial Statements. The destinations of
suchinformation are shown in the table below:
Information Annual Report section Annual Report page no(s)
Business model and future business developments Strategic Report 6 to 11
Principal risks and uncertainties Strategic Report 42 to 47
Fostering relationships with suppliers, customers and others
1
Strategic Report
Corporate Governance Report
40 and 41
56 to 59, 62 and 66
Engagement with and other matters relating to employees
2
Strategic Report
Corporate Governance Report
34 and 40
63 to 65
Financial instruments Consolidated Financial Statements 179 to 184
Governance matters, including Corporate Governance Statement
3
and a description
ofthe composition and operation of the company’s administrative, management and
supervisory bodies and their committees
Corporate Governance Report 50 to 108
Description of diversity policies, objectives, implementation and results Nominations Committee Report 74 and 75
Internal control and risk management arrangements for financial reporting Audit Committee Report 78 to 83
Streamlined Energy and Carbon Reporting (SECR)
4
Additional Information 223
1
The Company is not obliged to provide this information in accordance with paragraph 11B of Part 4 of the Large and Medium-sized Companies and Groups (Accounts andReports)
Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018) (the Regulations). This is because it is exempted inaccordance with paragraph 11C
ofPart 4 of the Regulations as the qualifying conditions are met because the Company, as a holding company, does not have aturnover nor does it have more than 250 employees.
However, the Company has voluntarily provided this information.
2
The Company is obliged to provide certain of this information in accordance with paragraph 11 of Part 4 of the Regulations as the Company is the parent company oftheGroup and
the average number of persons employed by the Group within the United Kingdom during the year ended 31 December 2021 was more than 250. It is not however obliged to provide
the information in accordance with paragraph 10 of Part 4 of the Regulations as the average number of persons employed by the Company itself does not exceed 250. The Company
has therefore voluntarily provided this information.
3
The Company is obliged to make a Corporate Governance Statement pursuant to DTR 7.2. The Company is therefore exempted from the requirements of Part 8 of the Regulations
inaccordance with paragraph 22(a) of the Regulations.
4
The Company is obliged to provide this information in accordance with Part 7 of Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended by the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018).
This Directors’ Report and the Strategic Report together form theManagement Report for the purposes of Rule 4.1.8 of the Disclosure
Guidance and Transparency Rules.
The relevant information required to be disclosed under Rule 9.8.4 of the Listing Rules is as follows:
Listing Rule Nature of information Section and page(s) of Annual Report
LR 9.8.4(12) Dividend waivers by shareholders Directors’ Report, page 110
Company status and branches
National Express Group PLC (the Company) is the holding company of the National Express group of companies (the Group).
The Company is a public limited company incorporated under the laws of England and Wales. It has a premium listing on the London
Stock Exchange main market for listed securities (LON:NEX) and is a constituent member of the FTSE 250 Index.
Neither the Company nor any member of its Group has any branches, save that one of the Company’s Spanish subsidiaries, NEX
Continental Holdings, S.L.U., set up a branch in Portugal, NEX Continental Holdings S.L, Sucursal Em Portugal, during the year in review.
Results and dividends
The Company’s and the Group’s results for the year ended 31 December 2021 are set out in the Company financial statements and the
Consolidated Financial Statements on pages123 to 219.
Important events since the end of the financial year
There have been no important events which have affected the Company or the Group since 31 December 2021, save for those disclosed
in note 41 to the Consolidated Financial Statements.
Dividends
The Board has determined not to recommend a final dividend inrespect of its financial year ended 31 December 2021 as theCompany
remains restricted from declaring or paying dividends inaccordance with the terms on which it has obtained amendments to its debt
covenants to assist it in managing the financial impact of the Covid-19 pandemic (2020: 0.0p). As the Board also did not pay an interim
dividend in respect of its financial year ended 31 December 2021, the total dividend for the 2021 year is 0.0 pence per share (2020: 0.0p).
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
109

Directors’ Report continued
Directors’ Report continued
Share capital
The Company has a single class of shares in issue in its capital comprising ordinary shares of nominal value 5 pence each, allranking
pari passu. As at 31 December 2021, there were 614,086,377 ordinary shares in issue and fully paid. The rights attached to the ordinary
shares of the Company are defined in theCompany’s Articles of Association (the Articles). Further details about the Company’s share
capital can be found in note 32 to the Consolidated Financial Statements.
Share rights, obligations and restrictions on transfer of shares
Shareholders are entitled to participate in dividends paid or declaredbythe Company and any return of capital made by the Company in
proportion to their holdings of ordinary shares in the Company. Shareholders are also entitled to attend and vote at all general meetings of
theCompany (subject to the powers under Regulation 74 of the Articles which authorise the Company’s Chairman,Directorsor any person
authorised by the Directors totakesuch action as thought fit to secure the safety of people attending the meeting). Every shareholder has one
voteon a show ofhands and one vote for each ordinary share held on a poll on each resolution putbefore a general meeting. Electronic and
paperproxy appointments, and voting instructions, must be received by the Company’s registrar not less than 48 hours before a general meeting.
Shareholders are subject to the obligations set out in the Articles, including the principal obligation to pay up any unpaid amount on their
ordinary shares.
There are no limitations on the holding of the Company’s shares. There are also no restrictions on the transfer of the Company’s shares
other than: (i) the typical restrictions set out in the Articles (for example, in respect of non-fully paid shares); (ii) restrictions imposed by
law (such as insider trading laws); and (iii) restrictions imposed on the Directors and certain other employees of the Company and
members of its Group pursuant to the Company’s share dealing code.
Full details of the rights, obligations and restrictions attaching tothe Company’s ordinary shares, including in relation to voting rights
andrestrictions on transfer, are set out in the Articles, which are available at: https://www.nationalexpressgroup.com/about-us/
corporate-governance/corporate-governance-framework/.
The Company is not aware of any agreements between existing shareholders that may result in restrictions on the voting rights attaching
to, or the transfer of, the Company’s ordinary shares.
Special control rights over shares
There are no special control rights attaching to the Company’s shares, save that the Company can direct the Company’s Employee Benefit
Trust to release the shares that it holds in the Company to satisfy the vesting of outstanding awards under the Company’s various share
incentive plans (see Employee Benefit Trust).
Authority to issue shares
The Directors were granted the authority at the Company’s 2021 Annual General Meeting to allot new shares in the Company up
toanominal value of £10,234,772 representing one third of its issued share capital or, in the case of a rights issue only, new shares up
toanominal value of £20,469,545 representing two thirds of its issued share capital. The Directors were further authorised to disapply
pre-emption rights on the issue of shares ofup to a nominal value £1,535,215, representing approximately 5% of its issued share capital.
No new shares were issued by Directors under theauthorities granted to them at the Company’s 2021 Annual General Meeting during
the year ended 31 December 2021 or upto 9 March 2022, being the date this Directors’ Report was approved. Such authorities remain
valid untilthe Company’s 2022Annual General Meeting or 30 June 2022, whichever is earlier. The Directors propose to renew the
Directors’ authorities toissue and allot new shares and to disapply pre-emption rights on such issue and allotment at the Company’s
2022 Annual General Meeting to give the Company flexibility to respond tocircumstances and opportunities as they arise.
Authority to purchase own shares
The Company was granted authority at its 2021 Annual General Meeting to make market purchases of up to 61,408,637 of its own
shares,representing approximately 10% of its issued share capital. No shares were purchased under this authority during the year
ended31 December 2021 or up to 9 March 2022, being the date thisDirectors’ Report was approved. Such authority remains valid
untiltheCompany’s 2022 Annual General Meeting or 30 June 2022, whichever is earlier. The Directors propose to renew this authority at
the2022 Annual General Meeting to give the Company the ability to return value to shareholders in this way in appropriate circumstances.
Employee Benefit Trust
IQ EQ (Jersey) Limited is a shareholder in the Company and acts as the trustee (the Trustee) of the National Express Group Employee
Benefit Trust (the EBT). It is used to purchase Company shares in the market from time to time and hold them for the benefitof employees,
including for satisfying awards that vest under the Company’s various share incentive plans. The EBT also holdssome Company shares
in particular ringfenced accounts for specific employees who have had options over such shares vesttothem under the Company’s
share incentive plans but havenot yet exercised those options. The EBT purchased a totalof1,013,976 shares in the market during the
year ended 31 December 2021 for an aggregate consideration of £2.59 million (including dealing costs) and released 402,244 shares
tosatisfy vested share plan awards.
As at 31 December 2021, the EBT held 1,489,069 Company sharesin trust (representing 0.24% of the Company’s issued sharecapital).
The Trustee may vote the shares it holds in the Company at its discretion, but where it holds any shares in a ringfenced accountfor
particular employees it will seek their instructions on how it exercises the votes attached to those shares. A dividend waiveris in place from
the Trustee in respect ofdividends payable by the Company on the shares in the Company held in the EBT, exceptthe shares it holds in
ringfenced accounts for particular employees where it receives the dividends on such shares and passesthem through to such employees.
National Express Group PLC Annual Report 2021
110

Major shareholdings
As at 31 December 2021, the Company had been notified under DTR 5 of the following interests in its shares representing 3% or more
ofthe voting rights in its issued share capital:
Shareholder
Number of
ordinary
shares
Percentage of
total voting
rights
1
European Express Enterprises Limited 66,481,891 10.83%
M&G plc 42,091,624 6.85%
Liontrust Investment Partners PLC 39,306,348 6.40%
JP Morgan Asset Management Holdings Limited
2
30,512,643 4.97%
Newton Investment Management Limited 29,583,062 4.82%
J O Hambro Capital Management Limited
3
25,165,433 4.10%
Nortrust Noms Limited re Greater Manchester Pension Fund 19,016,950 3.10%
1
The total number of voting rights attaching to the issued share capital of the Company on 31 December 2021 was 614,086,377.
2
The last notification under DTR 5 received from JP Morgan Asset Management Holdings Limited (JP Morgan) on 8 December 2021 notes that it has gone “below theminimum
threshold”. From further correspondence with JP Morgan, the Company understands that: JP Morgan benefits from the higher disclosure thresholds specified in DTR 5.1.5R and
therefore the “minimum threshold” referred to in the latest DTR notification is 5%; and as at 31 December 2021, JP Morgan held 30,512,643 ordinary shares representing 4.97% of
thetotal voting rights of the Company, which has been reflected in the table above.
3
The last notification received under DTR 5 from J O Hambro Capital Management Limited (J O Hambro) on 23 October 2018 stated that it held 25,165,433 ordinary shares which, at
that time, equated to 4.92% of the total voting rights but which at 31 December 2021 equated to 4.10% of the total voting rights, as shown in the table above. However, from further
correspondence with J O Hambro during 2021, the Company understands that it holds under 3% of the total voting rights in the Company but was not required to notify the Company
under DTR 5 because it benefits from the higher 5% disclosure threshold specified in DTR 5.1.5R.
It should be noted that these holdings may have changed since theCompany was notified of them as notification of any change isnot
required until the next notifiable threshold is crossed.
The Company received no further notifications in accordance with DTR 5, by way of change to the above information or otherwise, between
31 December 2021 and 9 March 2022, being the period from the end of the Company’s last financial year to the date on which this Directors’
Report was approved (and also being a date which is not more than one month before the date of the Notice ofthe Company’s 2022 AGM).
Directors
The names of the persons who were Directors of the Company atany time during the Company’s financial year ended 31 December
2021, together with the periods during which theyserved as Directors, are:
Director Period served during 2021
Sir John Armitt CBE 1.01.2021 – 31.12.2021
Jorge Cosmen 1.01.2021 – 31.12.2021
Ignacio Garat 1.01.2021 – 31.12.2021
Chris Davies 1.01.2021 – 31.12.2021
Matthew Crummack 1.01.2021 – 31.12.2021
Carolyn Flowers 1.06.2021 – 31.12.2021
Karen Geary 1.01.2021 – 31.12.2021
Mike McKeon 1.01.2021 – 31.12.2021
Ana de Pro Gonzalo 1.01.2021 – 31.12.2021
Dr Ashley Steel 1.01.2021 – 03.12.2021
Directors’ interests
Save as disclosed:
(a) in the Directors’ Remuneration Report, none of the Directors, nor any person closely associated with them, has any interest
intheCompany’s shares, debt instruments, derivatives or other linked financial instruments and there has been no change in the
information inthe Directors’ Remuneration Report regarding such interests between 31 December 2021 and 9 March 2022, being
thedate this Directors’ Report was approved (and also being a date which is not more than one month before the date of the Notice
ofthe Company’s 2022 AGM); and
(b) in note 37 to the Consolidated Financial Statements, none ofthe Directors has or had at any time during the year ended 31 December
2021 a material interest, directly or indirectly, inany contract of significance with the Company or any of itssubsidiary undertakings
(other than the Executive Directors in relation to their Service Agreements).
Directors’ service agreements and letters of appointment
The Executive Directors are party to service agreements with theCompany which contain a rolling service term subject tothe giving by
the Company or relevant Executive Director of therelevant notice to terminate. All the Non-Executive Directors are party to letters of
appointment with the Company which contain a fixed term of appointment of between three and six years, extendable by agreement,
subject to the giving by the Company or the Non-Executive Director of the relevant notice toterminate. All Directors’ continued
appointments are also subject to annual election or re-election by shareholders and the powers of shareholders to remove Directors.
These Directors’ service agreements and letters of appointment are available for inspection at the Company’s registered office.
Further details of these agreements and letters are included in thecurrent Directors’ Remuneration Policy, a copy of which is
availableonthe Company’s website at https://www.nationalexpressgroup.com/about-us/corporate-governance/remuneration/.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
111

Directors’ Report continued
Directors’ Report continued
Directors’ powers
Subject to the Companies Act 2006 (the Act), the Articles and anydirections given by special resolution of the shareholders,
thebusiness of the Company is managed by the Board which mayexercise all the powers of the Company. The Articles may
beamended bya special resolution of the shareholders.
The Directors may pay interim dividends where, in their opinion, the financial position of the Company justifies such payment and the
Directors may recommend that shareholders declare dividends and, if so declared by ordinary resolution of shareholders, arrange for
payment of such dividends. Where authorised to do so by ordinary resolution of the shareholders, the Directors may issue shares or
rights to subscribe for shares or securities convertible into shares in the Company. Where the Company is authorised to do so by
specialresolution of the shareholders, the Directors may arrange for the Company to purchase its own shares, up to any limits
specifiedin such resolution. The Directors may also appoint other Directors in the circumstances described below.
Appointment and replacement of Directors
The rules for the appointment and replacement of Directors are setout in the Act and related legislation and the Articles.
The Board may appoint a Director either to fill a casual vacancy or as an additional Director provided that the total number of Directors
doesnot exceed any maximum number of Directors prescribed in the Articles. A Director so appointed by the Board must retire and seek
election to office at the next Annual General Meeting of the Company. Each incumbent Director must also retire and seek re-election to
office at each Annual General Meeting of the Company.
In addition to the powers of removal conferred by the Act, the Company may by ordinary resolution of which special notice is given
remove any Director before the expiry of their period of office and may by ordinary resolution appoint another person who is willing to act
in their place. The Company may also by ordinary resolution appoint a Director either to fill a casual vacancy or as anadditional Director.
In accordance with the Articles and the provisions of the UK Corporate Governance Code, all the current Directors will retire at the
Company’s 2022 Annual General Meeting and offer themselves for election or re-election. The Board is satisfied that each of the
Directors is qualified for election or re-election to office by theircontribution and commitment to the Board, their key strengths in support
of the Company's strategy as set out on pages 52 to 54 and for the reasons given on page 75 of the Nominations Committee Report.
Directors’ indemnities and insurance
The Company has granted qualifying third party indemnities to each Director and the Company Secretary to the extent permitted by
law.Qualifying third party indemnities (as defined by section 234 of the Companies Act 2006) in relation to losses or liabilities incurred
bythe Company’s Directors and Company Secretary tothird parties in the actual or purported execution or discharge oftheir duties
asofficers of the Company and of its associated companies were in force during the year ended 31 December 2021 and remain in force
as at 9 March 2022, being the date this Directors’ Report was approved. The Company also maintains Directors’ andOfficers’ liability
insurance which provides appropriate coverin respect of legal action brought against its Directors andCompany Secretary.
Significant agreements affected byachangeofcontrol
The Company is party to the following significant agreements thatcould be altered or terminate on a change of control of theCompany
following a takeover bid.
Under the terms of the Company’s revolving credit facilities, the Company would upon a change of control have five days to notify
thelenders of such change of control and if, following 10 days of negotiations to either confirm or alter the terms of such facilities,
noagreement has been reached, outstanding balances under such facilities could become repayable.
Under the terms of the Company’s £1.5 billion Euro Medium Term Note (EMTN) programme (as last updated on 13 October 2020), there is a
change of control put option such that, upon a change of control put event, any holder of EMTNs issued under the programme may require
theCompany to redeem or purchase such EMTNs.
Under the terms of a Note Purchase Agreement entered into on29 October 2019 relating to the issue by the Company of £134,000,000
2.38% Series A Senior Notes due 10 June 2027, €43,000,000 1.11% Series B Senior Notes due 7 May 2027, €137,000,000 1.33% Series C
Senior Notes due 7 May 2030, €60,000,000 1.46% Series D Senior Notes due 7 May 2032 and$81,000,000 3.11% Series E Senior Notes
due 10 June 2027, the Company is required to offer to repay the holders of all suchNotes the entire unpaid principal and interest on such
Noteson a change of control of the Company.
Under the terms of the Company’s £500,000,000 Perpetual Subordinated Non-Call 5.25 Fixed Rate Reset Notes issued on24 November
2020, there is a change of control option such that, upon a change of control event, the Company may redeem such Notes (in whole but
not in part) plus accrued interest, or otherwise incur an interest rate step-up of 5% on the prevailing interest rate effective from the date
on which the change of controlevent occurs.
Under the terms of some of the Group’s vehicle leasing facilities, where the Company is a guarantor of such facilities, a change of control of
theCompany may amount to an event of default which could result in outstanding balances under such leasing facilities becoming repayable.
Under the rules of each of the Group’s active share schemes, following a change of control of the Company the vesting of awards
madeunder such schemes will be accelerated and, whereperformance targets are attached to the awards, the number of awards to
vest will be determined according to the extent to which performance targets have been met. Each of theshare schemes also allows,
under certain circumstances andwhere the acquiring company has agreed, new awards to begranted in the acquiring company in
placeoftheoriginal awards to give substantially equivalent value to the awardees.
National Express Group PLC Annual Report 2021
112

Due to the size of certain of the Company’s credit facilities, notepurchase agreements and leasing facilities, absent consent from the
relevant lenders, noteholders and lessors to a change ofcontrol following a takeover bid or the bidder being able to refinance such
facilities and borrowings upon its takeover bid being accepted and taking effect, their repayment, termination ordefault upon such
change of control could create significant liquidity issues for the Company and could also trigger cross-defaults into other of the
Company’s and the Group’s credit andleasing facilities.
There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or
employment that occurs because of a takeover bid, save that theprovisions of the Group’s active share incentive schemes maycause
awards made under them to Directors and employees in the form of share options to vest on a takeover bid being accepted and taking
effect, or, under certain circumstances and where the acquiring company agrees, new awards to be made inthe acquiring company in
place of the original awards to give substantially equivalent value to the awardees.
Employee matters
Pages 34 and 40 of this Annual Report set out how the Company: engages with its workforce and takes their views into account; involves
employees in Company performance; promotes common awareness among employees of financial and economic factors affecting the
Company performance; and summarises how the Company is an equal opportunities employer.
Political donations, contributions and expenditure
The Company did not make any political donations or contributions or incur any political expenditure during the yearended 31 December
2021 (2020: nil political donations, contributions and political expenditure). The Company’s policy isthat neither it nor its subsidiaries
make what are commonly regarded as donations or contributions to political parties. However, the Act’s definition of political donations
includes expenditure that could capture other business activities which would not normally be thought of as political donations or
contributions, such as subscriptions, payment of expenses andsupport for bodies representing either the transport industry specifically
or the business community in general in policy reviewor reform. The resolution being proposed at the Company’s 2022 Annual General
Meeting to authorise political donations, contributions and expenditure is to ensure that these normal business activities are permitted
and that neither the Company norits UK subsidiaries commit any technical breach of the Act.
Audit information
Each of the persons who are Directors as at 9 March 2022, being the date this Directors’ Report was approved, confirms that, so far
ashe/she is aware, there is no relevant audit information of which the Company’s auditor, Deloitte LLP, is unaware and that he/she has
taken all the steps that he/she ought to have taken asaDirector to make himself/herself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.
Annual General Meeting
The Company’s 2022 Annual General Meeting (AGM or Meeting) will be held in the Banqueting Hall at Glaziers Hall, 9 Montague Close,
London Bridge, London SE1 9DD at 2.00pm on Wednesday, 11 May 2022. A separate circular, comprising a letter from the Chairman,
Notice of the Meeting and explanatory notes on the resolutions proposed, accompanies this Annual Report. Both documents can also
be found on the Company’s website at: www.nationalexpressgroup.com.
As at 9 March 2022, being the date on which this Directors’ Reportwas approved, the Company is intending to conduct its2022 AGM
asan in-person meeting to give shareholders (or their proxies or corporate representatives) theopportunity to meet with the Board, ask
questions on the business before the Meeting and vote on that business either in person (or by proxy or corporate representative).
However, the Company will be observing any UK Government requirements or guidelines on travel and in-person meetings which are
current at the time of the AGM which may mean that we need tochange the time, date and/or venue of the Meeting or the methods by
which shareholders can vote their shares, or it may mean that we need to restrict some or all shareholders from attending the Meeting
physically and/or ask those who do to observe additional health & safety measures, such as social distancing and/or mask wearing
where not exempt. The Company will advise shareholders about any changes to the Meeting arrangements via the Company’s website:
https://www.nationalexpressgroup.com/investors/agm and by market announcement.
Approval
The Directors’ Report was approved by the Board on 9 March 2022.
By Order of the Board
Jennifer Myram
Group Company Secretary
National Express Group PLC
Company number 2590560
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
113

Directors’ responsibilities
Legal and regulatory framework
Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required
toprepare the Group Financial Statements in accordance with International Financial Reporting Standards (IFRS), adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union and Article 4 of the International Accounting Standards Regulation,
and have elected to prepare the parent Company Financial Statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, including FRS 101 ‘Reduced Disclosure Framework’. Under company
law,the Directors mustnot approve the Financial Statements unless they are satisfied that they give a true and fair view of the state
ofaffairs of the Groupand Company and of the profit or loss of the Group and Company for that period.
In preparing the Group Financial Statements, International Accounting Standard 1 requires that Directors:
− properly select and apply accounting policies;
− present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
− provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand
the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
− make an assessment of the Company’s ability to continue as a going concern.
In preparing the Company Financial Statements, the Directors are required to:
− select suitable accounting policies and then apply them consistently;
− make judgements and accounting estimates that are reasonable and prudent;
− state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained
inthe financial statements; and
− prepare such financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue
inbusiness.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure
thattheFinancial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate
Governance Statement that comply with applicable law and regulations.
The Directors are also responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
inother jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
− the Financial Statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
− the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties
that they face; and
− the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company’s and the Group’s position and performance, business model and strategy.
This responsibility statement was approved by the Board of Directors and is signed on its behalf by:
Ignacio Garat
Group Chief Executive Officer
9 March 2022
Chris Davies
Group Chief Financial Officer
9 March 2022
Directors’ responsibilities
National Express Group PLC Annual Report 2021
114

Independent Auditor’s Report to the members of National Express Group PLC
Report on the audit of theFinancial Statements
1. Opinion
In our opinion:
− the Financial Statements of National Express Group Plc (the ‘parent Company’) and its subsidiaries (the ‘Group’) give a
trueandfair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2021 and of the Group’s
lossfor the year then ended;
− the Group Financial Statements have been properly prepared in accordance with United Kingdom adopted international
accounting standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB);
− the parent Company Financial Statements have been properly prepared in accordance with United Kingdom Generally
AcceptedAccounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and
− the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
− the Consolidated Income Statement;
− the Consolidated Statement of Comprehensive Income;
− the Consolidated and parent Company Balance Sheets;
− the Consolidated and parent Company Statements of Changes in Equity;
− the Consolidated Cash Flow Statement;
− the related notes 1 to 40 for the Consolidated Financial Statements; and
− the related notes 1 to 20 for the parent Company Financial Statements.
The financial reporting framework that has been applied in the preparation of the Group Financial Statements is applicable law,
UnitedKingdom adopted international accounting standards and IFRSs as issued by the IASB. The financial reporting framework
thathas been applied in the preparation of the parent Company Financial Statements is applicable law and United Kingdom
AccountingStandards, including FRS 101 “Reduced Disclosure Framework”.
2. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s responsibilities for the audit of the Financial Statements section of our report.
We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of
the Financial Statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services
provided to the Group for the year are disclosed in note 7 to the Financial Statements. We confirm that we have not provided any
non-audit services prohibited by the FRC’s Ethical Standard to the Group or the parent Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
National Express Group PLC Annual Report 2021
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Independent Auditor’s Report to the members of National Express Group PLC continued
Report on the audit of theFinancial Statements
continued
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
− Impairment of goodwill; and
− North American insurance and other claims provisions.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the Group Financial Statements was £11 million which was determined based
onconsideration of three key metrics: EBITDA before separately disclosed items, net assets and revenue.
This approach is consistent with the prior year.
Scoping
The Group is organised into four operating divisions, each of which has multiple trading entities (“Components”),
plus the head office function. Six Components were subject to full scope audits and one Component was subject
to an audit of specified account balances. These Components account for 95% of the Group’s revenue, 84% of
Underlying Operating Profit and 90% of net assets.
Significant changes
inour approach
We have removed classification and disclosure of separately disclosed items as a key audit matter for the current
year. In the prior year, the uncertainty around the pandemic had given rise to new separately disclosed items that
required management judgement around the classification and presentation. Whilst there is still judgement in this
area of work, the effort and volume of audit work has reduced substantially given the recovery from pandemic.
We have removed going concern as a key audit matter for the current year. This reflects the Group’s improved
trading performance, forecast levels of headroom over debt covenants and improved economic and social data
relating to Covid-19, compared to last year.
Our approach to scoping has been refined in the current year. Whereas previously we scoped in each of the
sub-consolidated divisions for a full scope audit, we have identified components at a lower level in the current
year and scoped the audit with reference to the trading entities that exist within each division.
4. Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and parent Company’s ability to continue to adopt the going concern basis
ofaccounting included:
− assessing underlying assumptions which support management’s analysis of its cost base and the levels of inherent risk in its revenue streams;
− challenging the recovery assumptions in the forecast against external economic forecasts from the IMF and OECD, as well as
otherrelevant information about respective markets that may contradict management’s assessment;
− assessing the level of headroom available to the Group from its loan facilities and assessing the risk of breaching the related covenants;
− obtaining signed copies of financial facilities and covenant waivers and agreeing the terms and conditions of the waivers against the
forecast performance;
− challenging management’s reverse stress test analysis by assessing the point at which covenants are breached in the context of a
reasonable worst case scenario and performing a sensitivity analysis on the key variables; and
− assessing the disclosures made by the Group around its going concern assumptions.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and parent Company’s ability to continue as a going concern for a period of at
least 12 months from when the Financial Statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the Financial Statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
National Express Group PLC Annual Report 2021
116

5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon,
andwe do not provide a separate opinion on these matters.
5.1. Impairment of goodwill
Key audit matter
description
Total goodwill at 31 December 2021 was £1,507 million (2020: £1,525 million). The balances relate to the
Spanish(ALSA), UK and the North America divisions which are £785 million (2020: £820 million), £52 million
(2020: £53 million) and £670 million (2020: £653 million), respectively.
There is a risk surrounding the recoverability of these balances, as assessed by management as part of
theirimpairment review, using discounted cash flows on a value in use basis. Further details are outlined
innotes2, 5, and 14 to the Financial Statements.
Estimating a value in use is inherently judgemental, and a range of assumptions can reasonably be applied
indetermining an appropriate discount rate, perpetual growth rate and long-term cash flow assumptions.
As themajority of the value in use resides in the terminal value, the assessment is particularly sensitive to the
perpetual growth rate and long-term operating margin and cash flows for each business, which are considered
tobe the areas of key judgement. In the current year this has required consideration of the business and
economic recovery from Covid-19, as well as the long-term implications of climate change on the business,
including long-term operating and capital expenditure costs of zero emission vehicles, relative to the current
fleet. Certain key assumptions are outlined in note 14 to the Financial Statements.
Despite these key areas of estimation and judgement, the level of headroom calculated in the current year
meansthat management have not considered this to give rise to any key sources of estimation uncertainty
whichreflects a reduced level of risk year-on-year. However, it remains a key audit matter due to the impact it
hason our overall audit strategy, the allocation of resources and the overall efforts of the engagement team.
The Audit Committee Report on page 78 refers to goodwill impairment as an audit focus area. Note 2 to the
Financial Statements sets out the Group’s accounting policy for testing impairment. The basis for the impairment
reviews is outlined in note 14 to the Financial Statements, including details of the pre-tax discount rate and
perpetual growth rate used. Note 14 to the Financial Statements also includes details of the extent to which
thegoodwill impairment test is sensitive to changes in the key inputs.
How the scope of our
audit responded to the
key audit matter
Our procedures for challenging management’s methodology and assumptions included:
− obtaining an understanding of relevant controls around impairment identification, review and the associated forecasts;
− assessing the integrity of the impairment models through testing of the mechanical accuracy and evaluating
the application of the input assumptions;
− understanding the underlying process used to determine the risk-adjusted discount rates;
− assessing the appropriateness of any changes to assumptions since the prior period;
− challenging the cash flow forecasts with reference to historical forecasts, actual performance and independent
evidence to support any significant expected future changes to the business. This included challenge of the
long-term margin assumptions as well as the potential impact of climate change on cash flows. This challenge
was informed through the involvement of subject matter experts and the review and challenge of cost estimates
for zero emission vehicles;
− working with our valuation specialists to benchmark the discount rates and perpetual growth rates applied to
external macro-economic and market data. This involved consideration of the impact of territory-specific risk
adjustments to the discount rate and perpetual growth rates versus the risk adjustments made to the
underlying cash flows;
− evaluating whether there was sufficient headroom or indicators of impairment based on the above assessed
reasonableness of assumptions underpinning the models for goodwill impairment model; and
− assessing the appropriateness of the disclosure included in the Financial Statements including the sensitivity
analysis provided.
Key observations
We determined that there is currently sufficient headroom for all groups of cash generating units such that we
concur with management that no impairment is required to goodwill. We have also concluded that the related
disclosures are appropriate.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
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Independent Auditor’s Report to the members of National Express Group PLC continued
Report on the audit of theFinancialStatements
continued
5.2. North American insurance and other claims provision
Key audit matter
description
The Group operates two levels of insurance, a self-covering level and an outsourced level. Of the total Group
claims provision of £84.4 million at 31 December 2021 (2020: £80.7 million), £70.4 million (2020: £76.2 million)
relates to the North America division. This reflects historical claims being managed by the Group, as well as
provision for new claims identified in the year, including amounts arising from Covid-19, as outlined in notes 2
and 5 of the Financial Statements.
Estimation of insurance and other claims provisions is highly judgemental and is based on assessment of the
expected settlement of known claims together with an estimate of settlements that will be made in respect of
incidents incurred but not reported at the balance sheet date. The measurement of the self-insured claims
provision in North America uses a combination of actuarial assumptions around loss development and
management judgement to ensure that the Group is appropriately provided for.
Given the level of complexity and judgement involved in making these estimations, management utilises an
independent actuarial expert to estimate a range of potential outcomes for the liability relating to their large
portfolio of low value claims. There is a risk of material misstatement, whether due to error or inappropriate
management bias, and therefore the eventual outcome could be materially different from that estimated and
provided for.
There are a number of key judgements in relation to the insurance and other claims provision: appropriateness of
the Income Statement charge; actuarial assessment of the high volume lower value claims, including those relating
to Covid-19, determined by management in conjunction with Willis Towers Watson (“WTW”) as independent
actuaries as noted above; and assessment of the provision for historical acquisition provisions and larger individual
claims. There were no acquired provisions in the year.
There has been an overall reduction of the level of inherent risk within the portfolio of claims in the current year,
including in relation to Covid-19. As such, the overall risk level has reduced. However, it remains a key audit
matter due to the impact it has on our overall audit strategy, the allocation of resources and the overall efforts
ofthe engagement team.
The Audit Committee Report on page 78 refers to North American insurance and other claims provisions as a key
judgement considered by the Audit Committee. This area has also been highlighted as a key source of estimation
uncertainty in note 2 to the Financial Statements.
How the scope of our
audit responded to the
key audit matter
Our procedures performed for challenging management’s methodology and assumptions included:
− obtaining an understanding of the relevant controls around the claims handling process and estimation and
recognition of the liability;
− working with our actuarial specialists, we challenged the assumptions inherent in the valuation produced by
the Group’s actuary in North America for the high-volume lower value claims, such as the loss development
factors and ultimate expected losses, and further challenged the position through re-performing the actuarial
calculation to develop a valuation range. This included an assessment of the historical accuracy of forecasting
and settlements entered into. Additionally, we have assessed the competence of management’s expert and
considered their capability and objectivity;
− for the individually large claims not subject to actuarial review, we discussed the nature of each claim with the
US general counsel and those responsible for claims handling and tested a sample of items to independent
third-party reports to assess the expected range of possible outcomes;
− we compared the overall level of provision recorded to the range determined by management and the Group’s
actuary, to assess whether the level of provision was appropriate.
− We have assessed the appropriateness of assumptions specifically relating to Covid-19 reserve and any the
related reversals through separately disclosed items; and
− we considered the appropriateness of the recognition of the provision in the context of the applicable reporting
framework (IAS 37) and the disclosure of a contingent liability.
Key observations
As part of our detailed audit work testing the various aspects of the provision and Income Statement charge for
the year, we did not identify any material exceptions.
As a result, we concluded the overall balance sheet position is in line with our expectations and lies on the
mid-point of the reasonable range.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the Financial Statements that makes it probable that the economic decisions
of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work
and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole as follows:
National Express Group PLC Annual Report 2021
118

Group Financial Statements Parent Company Financial Statements
Materiality
£11.0m (2020: £10.0m) £8.3m (2020: £8.6m)
Basis for determining
materiality
In determining materiality, we considered EBITDA before
separately disclosed items, net assets, and revenue.
This materiality level equates to 0.8% (2020: 0.7%) of net
assets, 3.7% (2020: 5.4%) of EBITDA before separately
disclosed items and 0.5% (2020: 0.5%) of revenue.
The parent Company materiality has been set at 1.0%
(2020: 0.5%) of the parent Company’s net assets and
capped at 76% (2020: 86%) of Group materiality.
Rationale for the
benchmark applied
Consistent with the prior year, the benchmarks have
beenchosen to determine a materiality that considers
both Balance Sheet and Income Statement metrics as
werecognise users’ concerns have shifted to be more
asset-based and liquidity-based metrics, including those
most relevant to covenant compliance.
Net assets is considered as an appropriate
benchmark for the parent Company given that
itismainly a holding company.
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the Financial Statements as a whole.
Group Financial Statements Parent Company Financial Statements
Performance materiality
65% (2020: 70%) of Group materiality 70% (2020: 70%) of parent Company materiality
Basis and rationale
fordetermining
performance
materiality
When determining performance materiality we have considered the quantum of likely uncorrected misstatements
that we anticipated in planning the audit for the current year.
This included our professional judgement and considerations on:
− the nature, volume and size of misstatements (corrected and uncorrected) in the previous audit;
− relevant factors about the Group’s control environment, specifically the control deficiencies identified
andreported on in the prior year relating to the North American division, as outlined in Section 7.2; and
− the continued impact of Covid-19 on the business and the whether it would affect our ability to forecast
misstatements and its impact on management bias.
The North American control deficiencies mentioned above only impact the Group Financial Statements and
hence the Performance materiality for the parent Company Financial Statements has not been impacted by this
and 70% was sufficient for current year.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to theCommittee all audit differences in excess of £0.55 million (2020: £0.5 million),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee
on disclosure matters thatwe identified when assessing the overall presentation of theFinancial Statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our approach to scoping has been refined in the current year.In the prior year we focused our Group audit scope at thedivisional level
and primarily on the four operating divisions, each with its own sub consolidation, which were all subject to a full scope audit. In the
current year we performed a more granular scoping assessment at a trading entity level within each division (“Component”), considering
components on the basis of their contribution to Group revenue and operating profit as well as those requiring statutory audits in their
jurisdiction. As a result, wedetermined that six Component were subject to full scope audits, and one Component was subject to audits
of specified account balances. These were performed by Deloitte Touche Tohmatsu Limited member firms. Component materiality levels
were determined to be between £3.1 million and £8.3 million (2020: between £3.1 million and £8.6 million). The Group head office work
was performed to a Component materiality level of £8.3 million (2020: £8.6 million). We also tested the consolidation process and carried
out analytical procedures to reconfirm ourconclusion that there were no significant risks of material misstatement to the Group from the
remaining components notsubject to audit. The seven Components subject to audit procedures account for 95% of group’s revenue,
84% of underlying operating profit and 90% of net assets. In the prior yearwe reported coverage relative to the scoping approach we
had used, which reflected that the four operating divisions subject to full scope audits, when taken together with the work performed
ataGroup-level, accounted for 100% of the key Group metrics.
7.2. Our consideration of the control environment
The Group operates a range of IT systems which underpin the financial reporting process. These vary by business and/or by geography.
For the four operating divisions and for head office weidentified relevant IT systems for the purpose of our audit work. These were
typically the principal Enterprise Resource Management systems for each business that govern the generalledger and contract
accounting balances. In addition, weidentified the new Group-level OneStream consolidation system as relevant for which we engaged
IT specialists as part ofour planned audit procedures in relation to the IT control environment. We obtained an understanding of the IT
controls over the OneStream consolidation system during the period, including a review of management’s reconciliation of closing/
opening balances in migrating the data.
During the course of our audit, we placed reliance on controls relevant to the recording of certain revenue streams in the UK division and
the Spanish division which included reliance on relevant IT systems. Other than for the above-mentioned areas, we generally planned for
and executed a fully substantive audit in the current year, with no controls reliance taken in North America or Germany.
National Express Group PLC Annual Report 2021
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Independent Auditor’s Report to the members of National Express Group PLC continued
Report on the audit of theFinancialStatements
continued
Following on from the control deficiencies identified and reported on in the prior year relating to the North American division, management
engaged a third party to perform a base financial control assessment in that division during 2021. We reconsidered our risk assessment and
modified the nature and extent of our testing for the in-scope Component in North America.
7.3. Our consideration of climate-related risks
Throughout 2021 management has undertaken a number of stepsto formalise compliance with requirements as a means todrive
change, progress actions and adopt the Taskforce on Climate related Financial disclosures (“TCFD”) recommendations for the first
timein the FY21 Annual Report. Management have performed a climate-related risk assessment which has been reviewed by the Board.
As aresult, climate change is both a newstrategic and macro/external risk this year under Principal Risks and Uncertainties section in
the Annual Report, page 42. Management also engaged with third parties to review climate risktemplates for completeness of items
before instructing divisions to perform their own assessment. As stated on page35of the Strategic Report, management’s view is that
inanyclimate scenario the upside is potentially very material, whilst the net financial impact of climate-related risks is low and mitigated
by the Group’s geographical diversity. As disclosed in note 14 of the Financial Statements, there are assumptions relating to climate
risksthat have an impact to the terminal value of the impairment assessments.
We have assessed the climate risks and opportunities throughout the disclosures and involved sustainability specialists in challenging
management’s disclosures on TCFD. As noted in Section 5 above under Impairment considerations, we recommend management to
continue to focus on updating their risk assessment and reflecting any changes in their disclosures given this is an evolving area.
We alsoread the disclosures in the Strategic Report to consider whether they are materially consistent with the Financial Statements
andour knowledge obtained in the audit.
7.4. Working with other auditors
The Group audit team continued to follow a programme of plannedoversight designed so that the Senior Statutory Auditor and/or a senior
member of the audit team continually oversees each of the three non-UK divisions where the Group audit scopewas focussed. In previous
years, this included at least onephysical visit per year, but in light of Covid-19 and ongoing social distancing measures this has been
replaced with virtual communications and oversight. In relation to the current year auditthe Senior Statutory Auditor has maintained
oversight through virtual meetings of non-UK components and both UK divisions for component reporting and reviewing purposes.
8. Other information
The other information comprises the information included in theAnnual Report, other than the Financial Statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the otherinformation and, except to the extent otherwise explicitly stated in
ourreport, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
Financial Statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to
amaterial misstatement in the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the Financial
Statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible for assessing the Group’s and the parent Company’s ability to continue
as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whetherthe Financial Statements as a whole are free from material misstatement,
whether due to fraud or error, and to issuean auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee thatan audit conducted in accordance with ISAs (UK) will alwaysdetect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these Financial Statements.
A further description of our responsibilities for the audit of theFinancial Statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
National Express Group PLC Annual Report 2021
120

11. Extent to which the audit was consideredcapable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
ourprocedures are capable of detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance withlaws and
regulations, we considered the following:
− the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration
policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
− results of our inquiries of management, internal audit and the audit committee about their own identification and assessment of the
risks of irregularities;
− any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
− identifying, evaluating and complying with laws and regulations and whether they were aware of any instances ofnon-compliance;
− detecting and responding to the risks of fraud and whetherthey have knowledge of any actual, suspected oralleged fraud;
− the internal controls established to mitigate risks of fraud ornon-compliance with laws and regulations;
− the matters discussed among the audit engagement team, including significant component audit teams, and relevant internal
specialists regarding how and where fraud might occur in the Financial Statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the occurrence ofcertain revenue streams in ALSA and the completeness and accuracy of
deferred revenue in the UK.
In common with all audits under ISAs (UK), we are also required toperform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on provisions ofthose laws
and regulations that had a direct effect on the determination of material amounts and disclosures in the Financial Statements. The key laws
and regulations we considered in this context included the UK Companies Act, Listing Rules, pensions legislation, and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the Financial Statements but
compliance with which may be fundamental totheGroup’s ability to operate or to avoid a material penalty. These included the Group’s
operating licence, regulatory solvency requirements, regulations from the Traffic Commissioners and environmental regulations.
11.2. Audit response to risks identified
As a result of performing the above, we did not identify any keyaudit matters related to the potential risk of fraud.
Our procedures to respond to the risks that were identified included the following:
− reviewing the Financial Statement disclosures and testing tosupporting documentation to assess compliance with provisions of
relevant laws and regulations described as havinga direct effect on the Financial Statements;
− inquiring of management, the audit committee and in-house legal counsel concerning actual and potential litigation andclaims;
− performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement
due to fraud;
− reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with
HMRC and overseas tax authorities in the jurisdictions in which the Group operates;
− assessing the deferred revenue balance at the year end in the UK division by recalculating the deferred income based on journeys
paid for compared to travelled by the year end, and tested the occurrence of certain revenue streams in Spain through reconciling
therevenue system to the general ledger system and agreeing to supporting evidence;
− in addressing the risk of fraud through management override ofcontrols, testing the appropriateness of journal entries andother
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, including
internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
121

12. Opinions on other matters prescribed bytheCompanies Act 2006
In our opinion the part of the Directors’ Remuneration Report tobe audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course ofthe audit:
− the information given in the Strategic Report and the Directors’ Report for the financial year for which the FinancialStatements
areprepared is consistent with theFinancial Statements; and
− the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and their environment obtained in the course
ofthe audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement inrelation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we haveconcluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the Financial Statements and our knowledge obtained during the audit:
− the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 20;
− the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers andwhy the period
isappropriate set out on page 48;
− the Directors’ statement on fair, balanced and understandable set out on page 114;
− the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out onpages 42 to 47;
− the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set
out on pages 79 and 80; and
− the section describing the work of the audit committee set out on pages 78 to 83.
14. Matters on which we are required toreportby exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
− we have not received all the information and explanations we require for our audit; or
− adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received
from branches not visited by us; or
− the parent Company Financial Statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been
made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we wereappointed by the Board of Directors on 14 June 2011 to auditthe
Financial Statements for the year ended 31 December 2011 and subsequent financial periods. Following a competitive tender process,
we were reappointed as auditor for the year ending 31 December 2021 and subsequent financial periods through to 31 December 2030.
The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 11 years, covering periods
from our initial appointment through to the period ending 31 December 2021.
15.2. Consistency of the audit report with the additional report to the audit committee
Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body,in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required tostate to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.14R, these Financial
Statements form part of the European Single Electronic Format (ESEF) prepared Annual Financial Report filed on the National Storage
Mechanism of the
UK FCA in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report provides no
assurance over whether the annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
Jane Whitlock (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, UK
9 March 2022
Independent Auditor’s Report to the members of National Express Group PLC continued
Report on other legal and regulatory requirements
National Express Group PLC Annual Report 2021
122

123
Details relating to separately disclosed items are provided in note 5.
Note
Underlying
result
2021
£m
Separately
disclosed
items
(note 5)
2021
£m
Total
2021
£m
Underlying
result
2020
£m
Separately
disclosed
items
(note 5)
2020
£m
Total
2020
£m
Revenue
4 2 ,170.3 – 2,170. 3 1 ,955.9 – 1,955. 9
Operating costs 5, 6 (2,083.3) (12 3.2) (2,206.5) (2,0 06.7) (330.6) (2,337. 3)
Group operating profit/(loss) 8 7.0 (123.2) (36.2) (50.8) (330 .6)(381.4)
Share of results from associates and joint ventures 18 (1.0) – (1.0) (2.1) – (2.1)
Finance income 10 3.2 – 3.2 3.3 – 3.3
Finance costs 10 (49.5) (1.4) (50.9) (56.5) (8.0) (64.5)
Profit/(loss) before tax 39.7 (124.6) (84.9) (106.1) (338.6) (444.7)
Tax (charge)/credit 11 (12.8) 19.8 7.0 29.3 88 .7 118.0
Profit/(loss) for the year 26.9 (104.8) (77.9) (76.8) (2 49.9)(326.7)
Profit/(loss) attributable to equity shareholders 21.6 (103.2) (81.6) (82.1) (2 49.6) (331.7)
Profit/(loss) attributable to non-controlling interests 5.3 (1.6) 3.7 5.3 (0.3) 5.0
26.9 (104.8) (77.9) (76.8) (2 49.9)(326.7)
Earnings per share: 13
– basic earnings per share (16.8)p (57.9)p
– diluted earnings per share (16.8)p (57. 9)p
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
123
Financial Statements
Group Income Statement
For the year ended 31 December 2021

124
Note
2021
£m
2020
£m
Loss for the year (77.9) (326.7)
Items that will not be reclassified subsequently to profit or loss:
A
ctuarial gains/(losses) on defined benefit pension plans 34 41. 9 (48.4)
Deferred tax (charge)/credit on actuarial movements 11 (2.7) 1 0.8
Gains/(losses) on equity instruments classified as fair value through Other Comprehensive Income 17 1.2 (1.6)
40.4 (39.2)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on retranslation of foreign operations 33 (55. 7) 3 4.5
Exchange differences on retranslation of non-controlling interests (1.3) 0.7
Gains/(losses) on net investment hedges 33 26.5 (10.0)
Gains/(losses) on cash flow hedges 33 52.5 (50.3)
Cost of hedging 33 0.1 0.2
Hedging (gains)/losses reclassified to Income Statement 33 (3.3) 3 4.8
Tax on exchange differences 11 0.5 1.6
Deferred tax on cash flow hedges 11 (9.5) 3.8
9.8 15.3
Comprehensive income/(expenditure) for the year 50.2 (23. 9)
Total comprehensive expenditure for the year (27.7) (350.6)
Total comprehensive (expenditure)/income attributable to:
Equity shareholders (30.1) (356.3)
Non-controlling interests 2.4 5.7
(27.7) (350.6)
National Express Group PLC Annual Report 2021
Financial Statements continued
124
Group Statement of Comprehensive Income
For the year ended 31 December 2021

125
1
Restated for a change in accounting policy where amounts outstanding in relation to advance subsidy factoring arrangements have been reclassified from trade and
other payables to borrowings. See note 2 for further information
2
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information
I Garat C Davies
Group Chief Executive Group Chief Financial Officer
9 March 2022
Note
2021
£m
(Restated)
2020
1,2
£m
(Restated)
2019
1,2
£m
Non-current assets
Intangible assets 14 1,778. 5
1,851.8
1,901.8
Property, plant and equipment 15 1 ,129.6
1,233.2
1,348.2
Non-current financial assets 17 32.6 14.3 24.9
Investments accounted for using the equity method 18 13.7 15.6 17.9
Trade and other receivables 20 147.1 91.7 9.6
Finance lease receivable 35 12.7 10.6 3.6
Deferred tax assets 27 150.6 140.5 31.8
Defined benefit pension assets 34 3.8 12.3 14.2
Total non-current assets 3,268. 6
3,370.0
3,352.0
Current assets
Inventories 21 28.8 27.0 29.4
Trade and other receivables 22 428.3 391.7 496.8
Finance lease receivable 35 4.1 4.3 1.4
Derivative financial instruments 17 31.0 44.9 44 .5
Current tax assets 3.3 2.6 1.6
Cash and cash equivalents 23 508.4 629.8 715.8
Total current assets 1,003. 9
1,100.3
1,289.5
A
ssets classified as held for sal
e
19 18.6 18.8 4.3
Total assets 4,291.1
4,489.1
4,645.8
Non-current liabilities
Borrowings 28 (1,294.3) (1 ,313.0) (1,091.0)
Derivative financial instruments 28 (11.1) (10.6) (9.6)
Deferred tax liability 27 (39.2) (40.7) (56. 4)
Other non-current liabilities 25 (123. 8) (202.7) (178.2)
Defined benefit pension liabilities 34 (99. 2) (147.4) (104.2)
Provisions 26 (68. 8) (54.8) (4 3.1)
Total non-current liabilities (1,636.4) (1,769.2) (1,482.5)
Current liabilities
Trade and other payables 24 (787. 7) (783.0) (998.4)
Borrowings 28 (302.3) (354.6) (944.8)
Derivative financial instruments 28 (24.5) (23. 0) (37.8)
Current tax liabilities (3.0) (2.2) (8.8)
Provisions 26 (89. 0) (81.1) (6 1.0)
Total current liabilities (1,206.5) (1,243.9) (2,050.8)
Total liabilities (2,842.9) (3,013. 1) (3,533.3)
Net assets 1,448. 2
1,476.0
1,112.5
Shareholders’ equity
Called-up share capital 32 30.7 30.7 25.6
Share premium account 533.6 533.6 532.7
Own shares (4.5) (3.5) (6.0)
Hybrid reserve 513.0 497.6 –
Other reserves 33 380.1 367.8 130.7
Retained earnings (45.8) 9.6 391.4
Total shareholders’ equity 1,407.1
1,435.8
1,074.4
Non-controlling interests in equity 41.1 40.2 38 .1
Total equity 1,448. 2
1,476.0
1,112.5
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
125
Group Balance Sheet
At 31 December 2021

126
Share
capital
£m
Share
premium
account
£m
Own
shares
(note 32)
£m
Hybrid
reserve
£m
Other
reserves
(note 33)
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interests
£m
Total
equity
£m
A
t 1 January 2021 30.7 533.6 (3.5) 497.6 367.8 9.6 1,435.8 40.2 1,476.0
(Loss)/profit for the year – – – – –
(81.6)
(81.6) 3.7 (77.9)
Comprehensive income/(expense)
for the year
– – – – 12.3 39.2 51.5 (1.3) 50.2
Total comprehensive income/(expense) – – – – 12.3
(42.4)
(30.1) 2.4 (27. 7)
Shares purchased – – (2.5) – – – (2.5) – (2.5)
Own shares released to satisfy
employee share schemes
– – 1.5 – – (1.5) – – –
Share-based payments – – – – – 1.0 1.0 – 1.0
Tax on share-based payments – – – – – 0.3 0.3 – 0.3
Transaction costs on issuance
of hybrid instrument
– – – (0 .5) – – (0.5) – (0.5)
A
ccrued payments on hybrid
instrument
– – – 21. 2
– (21.2) – – –
Payments on hybrid instrument – – – (5.3) – – (5.3) – (5.3)
Deferred tax on hybrid bond payments – – – – – 4.4 4.4 – 4.4
Purchase of subsidiary shares
from non-controlling interest
– – – – – 4.0 4.0 (4.6) (0.6)
Other movements with
non-controlling interests
– – – – – – – 3.1 3.1
A
t 31 December 2021 30.7 533.6 (4.5) 513.0 380.1 (45.8) 1,407.1 41.1 1,448.2
National Express Group PLC Annual Report 2021
Financial Statements continued
126
Group Statement of Changes in Equity
For the year ended 31 December 2021

127
In May 2020, the Group issued 101,918,947 ordinary shares of 230p each. The net proceeds were £229.1m and as the share issue qualified
for merger relief under Section 612 of the Companies Act 2006, the excess of the net proceeds over the nominal value of the shares issued
was credited to a merger reserve rather than the share premium account. At the same time, the Group directly issued 428,782 ordinary
shares of 230p each to members of the Board and executive management team. The net proceeds were £1.0m and the excess proceeds
over the nominal value of the shares were recorded in share premium.
In November 2020, the Group issued a Sterling denominated hybrid instrument of £500m, with an annual coupon rate of 4.25%. The
contractual terms of the instrument allow the Group to defer coupon payments and the repayment of the principal indefinitely. However any
deferred payments must be made in the event of a dividend distribution. The terms also allow for the instrument to be redeemed at the
option of the Group at five years after issue (first call date) and 10 years (second call date), and subsequently at each coupon date or in the
event of highly specific circumstances (such as a change in IFRS or change of control). As the Group has the unconditional right to avoid
transferring cash or another financial asset in relation to this instrument, it is classified within equity. The annual coupon rate is fixed for the
first five years, and thereafter reset according to the specific terms of the issuance. The net proceeds were £495.5m.
Share
capital
£m
Share
premium
account
£m
Own
shares
(note 32)
£m
Hybrid
reserve
£m
Other
reserves
(note 33)
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interests
£m
Total
equity
£m
A
t 1 January 2020 25.6 532.7 (6.0) – 130.7 391.4 1,074.4 38.1 1,112.5
Loss for the year – – – – – (33 1.7) (331.7) 5.0 (326.7)
Comprehensive expense for the year – – – – 13.0 (37.6) (24.6) 0.7 (23. 9)
Total comprehensive expense – – – – 13.0 (369.3) (356.3) 5.7 (350.6)
Shares issued during the year
(net of transaction costs) 5.1 0.9 – – 224.1 – 230.1 – 230.1
Shares purchased – – (3.9) – – – (3.9) – (3.9)
Own shares released to satisfy
employee share schemes
– – 6.4 – – (6.4) – – –
Share-based payments – – – – – (0.3) (0.3) – (0.3)
Tax on share-based payments – – – – – (1.6) (1.6) – (1.6)
Issuance of hybrid instrument
(net of transaction costs)
– – – 495.5 – – 495.5 – 495.5
A
ccrued payments on
hybrid instrument – – – 2.1 – (2.1) – – –
Deferred tax on hybrid bond payments – – – – – 0.4 0.4 – 0.4
Dividends paid to
non-controlling interests
– – – – – – – (1.6) (1.6)
Other movements with
non-controlling interests
– – – – – (2.5) (2.5) (2.0) (4.5)
A
t 31 December 2020 30.7 533.6 (3.5) 497.6 367.8 9.6 1,435.8 40.2 1,476.0
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
127

128
1
Prior year amounts have been restated with respect to advance subsidy factoring receipts and payments – see note 2 for further information
2
Prior year amounts are net of transaction fees totalling £5.3m
3
Net of transaction fees totalling £4. 5m incurred during 2020. A further £0.5m of transaction costs were paid in 2021
4
Amounts in 2021 include £17 .7m paid on exercise of 10% of the WeDriveU put liability
Note
2021
£m
(Restated)
2020
1
£m
Cash generated from operations 39 231.1 (48.3)
Tax paid (19.2) (8.1)
Interest paid (45.0) (64.7)
Interest received 4.0 7.1
Net cash flow from operating activities 170.9 (114.0)
Cash flows from investing activities
Payments to acquire businesses, net of cash acquired 19 (20. 8) (9.6)
Deferred consideration for businesses acquired 19 (13. 0) (27. 3)
Proceeds from the disposal of business, net of cash disposed 19 (0.9) 4.4
Purchase of property, plant and equipment (168.5) (215.3)
(Costs)/Proceeds from disposal of property, plant and equipment 13.7 17.7
Payments to acquire intangible assets (44.4) (22.7)
Proceeds from disposal of intangible assets 0.7 2.3
Payments to settle net investment hedge derivative contracts – (1 5.7)
Receipts on settlement of net investment hedge derivative contracts 35.1 10.9
Receipts/(payments) relating to associates and investments 0.9 (0.1)
Net cash flow from investing activities (197.2) (255.4)
Cash flows from financing activities
Share issue proceeds
2
– 230.1
Issuance of hybrid instrument
3
(0.5) 495.5
Dividends paid to holders of hybrid instrument (5.3) –
Principal lease payments (118.2) (97. 7)
Increase in borrowings 243.0 858.3
Repayment of borrowings (220.1) (1,049.2)
Payments to settle foreign exchange forward contracts (11.9) (39.8)
Receipts on settlement of foreign exchange forward contracts 20.7 18.8
Purchase of own shares (2.5) (3.9)
A
cquisition of non-controlling interests
4
(18.3) (4.0)
Dividends paid to non-controlling interests (0.4) (2.2)
Dividends paid to shareholders of the Company 12 – –
Net cash flow from financing activities (113.5) 405.9
Increase in net cash and cash equivalents (139.8) 3 6.5
Opening net cash and cash equivalents 520.5 478.3
(Decrease)/Increase in net cash and cash equivalents (139.8) 36.5
Foreign exchange (4.5) 5.7
Closing net cash and cash equivalents 23 376.2 520.5
National Express Group PLC Annual Report 2021
Financial Statements continued
128
Group Statement of Cash Flows
For the year ended 31 December 2021

129
1 Corporate information
The Consolidated Financial Statements of National Express Group PLC and its subsidiaries (the Group) for the year ended 31 December
2021 were authorised for issue in accordance with a resolution of the Directors on 9 March 2022. National Express Group PLC is a public
limited company incorporated in England and Wales whose shares are publicly traded on the London Stock Exchange.
The principal activities of the Group are described in the Strategic Report that accompanies these Financial Statements.
2 Accounting policies
Basis of preparation
These Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations
of the International Financial Reporting Interpretations Committee (IFRIC) as issued by the International Accounting Standards Board
(IASB), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
These Financial Statements are presented in pounds Sterling and all values are rounded to the nearest one hundred thousand pounds
(£0.1m) except where otherwise indicated.
Going concern
The Financial Statements have been prepared on a going concern basis (see the Group Chief Financial Officer’s review (CFO’s Review) on
page 20) under the historical cost convention, except for the recognition of derivative financial instruments, financial assets at fair value
through Other Comprehensive Income and contingent consideration.
In adopting the going concern basis, the Directors have considered the Group’s:
− business activitie
s;
− principal risks and uncertainties as set out on pages 42 to 47;
− exposure to the range of potential impacts of Covid-19 and also the depth and length of support provided by customers and
governments; and,
− financial position, liquidity position and borrowing facilities as set out in the CFO’s report within this Annual Report.
The Group has maintained its strong liquidity position throughout the Covid-19 pandemic. As at 31 December 2021, and also as of the
date of publishing these Financial Statements, the Group had £1.9bn of debt capital and committed facilities, with none of these due to
expire until November 2023 at the earliest. At 31 December 2021, the Group had £0.9bn in net cash and undrawn committed facilities
available to it.
The Group has positive relationships and regular dialogue with its lenders. Certain of the Group’s borrowings are subject to covenant tests
on gearing and interest cover on a bi-annual basis. While amendments have previously been made to the interest cover covenants, these
have reverted to original levels (a minimum of 3.5x EBITDA) for the 30 June 2022 and 31 December 2022 tests. The gearing covenants at 30
June 2022 and 31 December 2022 have been amended to a maximum of 5.0x. In return for these waivers and amendments to the
covenants the Group has agreed to a quarterly £250m minimum liquidity test (up to and including Q1 2023), a £1.6bn maximum net debt
test as at 30 June 2022 and 31 December 2022 and a restriction on dividend payments until covenant amendments have expired (or until
the Group has voluntarily relinquished them). All covenants are assessed on a pre IFRS 16 basis. At 31 December 2021, the gearing ratio
was 3.6x (31 December 2020: 6.6x), although both covenants were waived. The interest cover ratio at 31 December 2021 was 6.3x (31
December 2020: 2.7x); this compares with an amended covenant of at least 2.5x (2020: at least 1.5x).
Since the onset of the pandemic, the Group has, along with the rest of the travel industry, been significantly impacted by the wide ranging
mobility restrictions and social distancing guidance used by governments to contain and curtail the impact of the virus. Thanks to the
success of vaccination programmes which, progressively, were rolled out to all adults in the Group’s key markets over the course of 2021,
new variants of the virus were able to be countered by much less severe restrictions than those utilised when the pandemic first emerged.
As a result, 2021 has seen a marked decrease in the level of restrictions imposed, and a strong recovery in the Group’s revenue, increasing
by 15% relative to 2020 (on a constant currency basis). Encouragingly, Group revenue has rebounded quickly when restrictions have been
rolled back, including in the UK following the easing, in late January 2022, of restrictions imposed in late 2021 in response to the
emergence of the Omicron variant.
Additionally, the Directors continue to have a high degree of confidence in the Group’s long-term prospects. New contracts continue to be
won, with a strong pipeline of opportunities in multiple markets. Climate change is rising exponentially in the public conscience and on
government agendas. In 2021 this was further demonstrated by the commitments made by world leaders at the COP26 conference to
decelerate the pace of global warming, as well as making available up to £100tn of private capital to speed up progress towards net zero
emissions. Clean, safe and efficient public transport is clearly part of the solution to reducing global emissions, and the Group is well
placed to benefit from this; leading the modal shift from private car to public transport is the Group’s defined purpose as set out in the
launch of the Evolve strategy in 2021.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
129
Notes to the Consolidated Accounts
For the year ended 31 December 2021

130
2 Accounting policies continued
Notwithstanding the positive long-term outlook, the pandemic has clearly had an unprecedented impact on the Group and on the transport
sector in general. Throughout 2021 there have been a range of mobility and distancing restrictions imposed and then rolled back at various
points in the year. These have slowed, but not undone, the Group’s progress in revenue recovery towards pre-pandemic levels. Over the
course of the year, revenue has recovered from 32% below 2019 levels in Q4 2020 to around 10% below 2019 levels in Q4 2021 at
constant currency.
Overall, financial performance in 2021 tracked broadly in line with base case projections set out at the time of publishing the 2020 Financial
Statements in March 2021. Revenue was lower than base case primarily due to lower passenger demand in the UK as a result of ongoing
travel restrictions and in North America due to driver shortages. However, careful cost control, success in procuring additional government
funding and the benefits of structural cost saving actions taken in 2020 delivered a favourable profit outcome compared with our
base case.
Our observations of, and responses to, the impact of the pandemic over recent months, along with our latest expectations of its continued
impact over the going concern assessment period, have been carefully considered in arriving at an updated base case and reasonable
worst case. We have then corroborated our own assumptions with external references, such as the predictions published by the IMF and
OECD. The Directors have reviewed the base case and reasonable worst case projections, which cover the period up to March 2023, along
with reverse stress tests. These scenarios and stress tests were used to evaluate liquidity headroom and compliance with revised
covenants.
The key assumptions in the base case scenario are as follows:
− Throughout 2022 Group revenue steadily recovers towards, and then beyond, pre-pandemic levels as Covid-19 related restrictions are
rolled back and confidence in public transport returns.
− In the UK, commercial passenger revenues recover steadily during the year and reach pre-pandemic levels by December 2022. No
further lockdowns or mobility restrictions are assumed.
− In North America, all schools are assumed to be open for in-person teaching. Driver shortages impact the first half of the year, but full
service levels are resumed in time for the new school year commencing in August 2022.
− In ALSA, there is a steady recovery in patronage on long haul franchises and the regional contracts on which we are exposed to demand
risk, but long haul revenue is still expected to remain below 2019 by the end of 2022. Urban revenues are expected to grow strongly due
to the impact of the now fully mobilised Casablanca contract which commenced in Morocco in late 2019 and the acquisition of
Transportes Rober in Spain in June 2021.
− Covid-19 related government support continues to be available as follows:
− The CERTS funding from the US Government was received in 2021 and is being recognised in the Income Statement over the 2021/22
school year. Further support is possible, but none is assumed in our base case.
− Subsidies are received from local government authorities to compensate for revenues lost as a result of ongoing Covid-19 impacts on
demand in ALSA. However the level of subsidies assumed in the base case is materially lower than those received in 2021.
− UK Bus continues to benefit from government funding, specifically the Bus Recovery Grant in H1 of 2022 and then Bus Service
Improvement Plan funding in the latter part of the year. This funding is for bus operators to continue to operate all, or substantially all,
services whilst passenger levels recover.
− There is an ongoing benefit from substantial cost saving initiatives implemented during 2020 and 2021, including group-wide reductions
in administrative and managerial headcount, as well as the benefit of process efficiency improvements.
− A working capital outflow results from the unwind of deferred income in relation to grant funding received in cash in 2021 but for which
the Income Statement recognition is spread over 2021 and 2022.
− Projections for the latter part of the assessment period in Q1 2023 are based on the Group’s strategic plan which assumes a
continuation in revenue recovery across the underlying pre-pandemic business to surpass 2019 levels, as well as incremental growth
from acquisitions and new contract wins that have taken place over 2020 and 2021.
The reasonable worst case scenario assumes significant reductions in revenue across the Group, compared with the base case, due to a
combination of: a prolonged impact from mobility restrictions similar to those seen in recent weeks following emergence of the Omicron
variant; customer reticence to travel; driver shortages; increased competition; and lower government support. This results in a slower
recovery trajectory.
In particular, this scenario assumes that Q1 of 2022 is severely impacted by driver shortages and that customers in each of our main
markets remain reticent to travel in the wake of the Omicron variant. Furthermore, we assume in the reasonable worst case that another
variant of concern emerges in Q4 2022, resulting in a similar reaction from governments and passengers as seen in the response to the
Omicron variant.
Against this reasonable worst case the Group has applied mitigations in the form of further reductions in expenditure, over and above
those reflected in the base case. The majority of these further cost savings have already been identified and could be swiftly implemented
should the reasonable worst case scenario occur. Whilst the cost savings in the base case and reasonable worst case would involve
restructuring activity, they do not involve significant structural changes to the Group. Additionally, cash flow mitigations in the form of
reducing or deferring capital expenditure have also been considered in the reasonable worst case.
In the base case and reasonable worst case scenarios the Group maintains significant headroom against each of its revised covenant tests,
as well as a strong liquidity position. In the reasonable worst case, the monthly cash outflow for the next 12 months averages less than
£10m, compared with the £0.9bn of liquidity as at 31 December 2021.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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In addition to the base case and reasonable worst case scenarios, the Directors have reviewed reverse stress tests, in which the Group has
assessed the set of circumstances that would be necessary for the Group to either breach the limits of its borrowing facilities or breach
any of the covenant tests.
In applying a reverse stress test to liquidity the Directors have concluded that the set of circumstances required to exhaust it are so extreme
as to be considered remote in likelihood.
Covenants that include EBITDA as a component are more sensitive to reverse stress testing, because of the material impact that events or
actions outside of the control of the Group, such as government-imposed travel restrictions, can have on short-term revenue. The Directors
have therefore conducted in-depth stress testing on interest cover and gearing covenants at both June and December 2022, these being
the only covenant tests during the going concern period that contain an EBITDA component. In doing so, the Directors have considered all
cost mitigations that would be within their control, and indeed would have no alternative but to pursue, if faced with a short-term material
EBITDA reduction and no lender support to amend or waive EBITDA-related covenants. Calculations indicate that in order to trigger a
breach of any of these covenants, the revenue loss relative to 2019 levels on a like-for-like basis (at constant currency, excluding
acquisitions and new contract wins over 2020 and 2021), would need to be greater than that experienced during both 2020 and 2021,
whereby the Group’s businesses were subject to significant restrictions imposed by governments to contain the impact of Covid-19.
Taking this into account the Directors concluded that the circumstances that would be necessary for covenants to be breached were
remote in likelihood.
In any case, should there be a more severe set of circumstances than those assumed in the reasonable worst case, the Group could also
have a number of further mitigations available to it including: deeper and broader cost cutting measures; seeking further amendments or
waivers of covenants; raising further equity; sale and leaseback of vehicles; disposal of properties; and disposal of investments or other
assets. Furthermore, during the pandemic, customers, local authorities and governments have demonstrated a willingness to provide
financial support to enable the provision of good quality, reliable transport services in the face of short-term reductions in demand.
In the event that a further, more severe downside akin to that seen in 2020 were to materialise, it is probable that similar support
would be made available.
In conclusion, the Directors have
a reasonable expectation that the Group as a whole has adequate resources to continue in operational
existence for a period of 12 months from the date of approval of the Financial Statements. For this reason, they continue to adopt the going
concern basis in preparing the Financial Statements for the year ended 31 December 2021.
Changes in accounting policies and the adoption of new and revised standards
The accounting policies adopted are consistent with those of the previous financial year except for changes arising from new standards and
amendments to existing standards that have been adopted in the current year.
The following amendments and interpretations have been applied for the first time with effect from 1 January 2021:
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced
by an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:
− A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated as
changes to a floating interest rate, equivalent to a movement in a market rate of interest.
− Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging relationship
being discontinued.
− Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated
as a hedge of a risk component.
These amendments had no impact on the Consolidated Financial Statements of the Group. The Group intends to use the practical
expedients in future periods if they become applicable, but none were needed to be applied during the year ended 31 December 2021.
From a hedge accounting perspective, the Group no longer holds any derivative financial instruments linked to IBOR rates such as LIBOR
and EURIBOR, therefore no existing hedge relationships were affected as a result of adopting this amendment.
Finally the Group has amended its revolving credit facility (“RCF”) and bilateral facilities to replace GBP LIBOR with SONIA and USD LIBOR
with SOFR, effective from 30 November 2021. Interest will be calculated based on a daily, non-cumulative compounded rate with
a five banking day look back. Similarly intercompany loan agreements have also been amended as above effective from 1 January 2022.
Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
This amendment did not have any impact on amounts recognised in prior periods and is not expected to significantly affect the current or
future periods.
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Presentation of advance subsidy factoring liabilities
The Group has a number of contracts with public bodies where the future cash flows are contracted. For some of these contracts, where the
cash flows are back ended, the Group entered into factoring arrangements with a bank to factor certain future subsidy cash flows in advance
of invoicing the relevant transport authority. Given the factoring is in advance of the contractual trigger to invoice the customer, there was no
receivable asset to de-recognise on receipt of cash from the bank and so a liability was recorded in trade payables. This reflected the fact
that the factoring arrangement was on a non-recourse basis i.e. all risks and rewards of default by the customer were transferred to the bank
and the short term nature of amounts outstanding, with the majority of cash repaid to the banks within three months. Reference to this liability
was provided in note 24 ‘trade and other payables’ to the Financial Statements in all years impacted. On subsequent receipt of the cash from
the customer this was then immediately repaid to the bank, and debited against the liability recorded.
The presentation of the cash flows within the Statement of Cash Flows mirrored the Balance Sheet treatment, with the receipt of proceeds
from the bank recorded within operating cash, just as if it had been directly received from the customer.
During the year we received an enquiry from the Financial Reporting Council (FRC) regarding these arrangements. Following this enquiry
and recent clarifications regarding the presentation of financial liabilities within trade payables, the Group concluded, in consultation with the
Group’s auditors, that it is more appropriate that the resultant liability with the bank is recorded within borrowings rather than trade payables.
The rationale is that the liability does not relate to goods or services and does not represent amounts invoiced or formally agreed with a
supplier. The Group has therefore changed its accounting policy accordingly. The presentation of the associated cash flows has also been
adjusted. The initial receipt from the bank will be treated as a financing inflow. As the customer continues to pay the Group, this will be
recorded as an operating cash inflow, with the subsequent repayment to the bank as a financing cash outflow.
This has been applied by restating the earliest comparative period within this report, with the Financial Statement line items impacted
as follows:
As this was a Balance Sheet reclassification, there is no impact to operating profit or earnings per share. Equally, the change has no impact
on the Group’s compliance with covenants as net debt for covenant purposes excludes non-recourse factoring arrangements.
Presentation of cash and cash equivalents and bank overdrafts
After the Group Financial Statements for the year ended 31 December 2020 were issued it was determined that the presentation of cash
and cash equivalents and bank overdrafts did not meet the requirements for offsetting in accordance with 'IAS 32 Financial Instruments:
Presentation'. This resulted in the incorrect presentation of the cash pooling arrangement on the balance sheet. The impact of this change
is to increase both cash and cash equivalents and current borrowings as at 31 December 2020 by £109.3m (2019: £237.5m) on the Group’s
Balance Sheet. This has no impact on net assets, net debt or the Group’s profit in any of the years impacted. Equally there is no change to
the Statement of Cash Flows.
Balance Sheet:
31 December
2020
(Reported)
31 December
2020
(Restated)
31 December
2019
(Reported)
31 December
2019
(Restated)
1 January
2019
(Reported)
1 January
2019
(Restated)
Trade and other payables (current)
(861.3) (783.0) (1,056.5) (998.4) (870.5) (826.8)
Borrowings (current) (167.0) (245.3) (649.2) (707.3) (59.3) (103.0)
Net assets
– – – – – –
Net debt (941.6)(1,019.9) (1,224.0) (1,282.2) (1,165.2) (1,208.9)
Statement of Cash Flows
(Decrease)/increase in payables (122.7) (140.0) 53.4 36.2 – –
Net cash flow from operating activities (96.7) (114.0) 356.2 339.0 – –
Increase in borrowings
732.3 858.3 414.1 513.7 – –
Repayment of borrowings
(940.5) (1,049.2) – (82.4) – –
Net cash flow from financing activities
388.6 405.9 259.9 277.1 – –
Increase in cash and cash equivalents
– – – – – –
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements requires the Group to make estimates and judgements that affect the application of the Group’s
accounting policies and reported amounts.
Critical accounting judgements represent key decisions made by management in the application of the Group accounting policies. Where a significant
risk of materially different outcomes exists due to management assumptions or sources of estimation uncertainty, this will represent a key source of
estimation uncertainty. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Management considered, throughout the year, the financial reporting impact associated with our identified principal risks, which include the
effects of Covid-19 and climate change.
During the year the following changes to critical judgements and keys sources of estimation uncertainty were identified:
− In the prior year, going concern was considered to be a critical judgement due to the level of uncertainty as to the future impact on the
financial performance and cash flows of the Group as a result of Covid-19. This year, going concern is not considered to be a critical
judgement reflecting the Group’s improved financial performance, strong financial position and business prospect
s.
− Also in the prior year, the valuation of the WeDriveU put liability (over 40% of the equity) was considered to be a significant estimate.
During 2021, the first tranche of put options, for 10% of the equity of WeDriveU was settled. The second tranche, for a further 10% of the
equity has been exercised during 2021, and will be settled during 2022. The final tranche for 20%, will be exercised at the final
opportunity on 31 December 2022 and therefore there is no longer any uncertainty over the timing of exercise. The Group has
determined the sensitivity of the valuation to a reasonable change in the future forecasts and discount rate, however given the range was
not considered material, the Directors no longer consider the valuation to be a significant estimate.
− Additionally, onerous contracts were considered to be a significant estimate in the prior year. This reflected the uncertainty over future
forecasts, in particular the extent to which Covid-19 had a lasting impact on the Group’s performance. The Group has updated its
forecasts, including an estimate of the recovery from Covid-19 and together with the short term remaining on the majority contracts
and/or the mitigating actions available to the Group to minimise losses, the Directors no longer consider a reasonable possible change in
the assumptions could result in material change to their carrying value in the next 12 months.
− Finally, in the prior year the impairment of goodwill in ALSA was considered to be a significant estimate. Following an increase in the level
of headroom and the projected recovery from Covid-19, we no longer consider a reasonable possible change in assumptions could
result in an impairment of goodwill in the next 12 months, and accordingly no longer consider this to be a significant estimate.
(i) Critical accounting judgements
Separately disclosed items
The Directors believe that the profit and earnings per share measures before separately disclosed items provide additional useful
information to shareholders on the performance of the Group. These measures are consistent with how business performance is
measured internally by the Board and the Group Executive Committee. The classification of separately disclosed items requires
significant management judgement after considering the nature, cause of occurrence and the scale of the impact of that item on
reported performance. The Group’s definition of separately disclosed items is outlined on page 148. These definitions have been
applied consistently year-on-year. Specifically, judgement has been required to identify incremental costs associated with the
pandemic that are not expected to arise in future periods and do not form part of the underlying operating activities of the Group.
Note 5 provides further details on current year separately disclosed items.
(ii) Key sources of estimation uncertainty
Insurance and other claims
The claims provision arises from estimated exposures at the year end for auto and general liability, workers’ compensation and
environmental claims, the majority of which will be utilised in the next five years. The estimation of the claims provision is based on an
assessment of the expected settlement of known claims together with an estimate of settlements that will be made in respect of incidents
occurring prior to the balance sheet date but for which claims have not been reported to the Group. The Group makes assumptions
concerning these judgemental matters with the assistance of advice from independent qualified actuaries. At 31 December 2021
the claims provision was £84.4m (2020: £80.7m).
In certain rare cases, additional disclosure regarding these claims may seriously prejudice the Group’s position and consequently this
disclosure is not provided. Given the differing types of claims, their size, the range of possible outcomes and the time involved in settling
these claims, there is a reasonably possible chance that a material adjustment would be required to the carrying value of the claims
provision in the next financial year. These different factors also make it impracticable to provide sensitivity analysis on one single measure
and its potential impact on the overall claims provision. For further information see note 26.
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Pensions
The determination of the defined benefit obligation of the UK defined benefit pension scheme depends on the selection of certain
assumptions which include the discount rate, inflation rate and mortality rates. At 31 December 2021 the UK defined benefit pension liability
was £96.1m (2020: £141.6m). The key area of estimation uncertainty is in respect to the discount rate and rate of inflation. Whilst the Board
believes that the assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may
significantly change the pension obligation. The Group makes assumptions with the assistance of advice from independent qualified
actuaries. Details of the assumptions are set out in note 34 to these Financial Statements, along with their sensitivities.
Consideration of climate change
In preparing the Financial Statements we have considered the impact of climate change, particularly in the context of the disclosures
included in the Strategic Report this year. There has not been a material impact on the financial reporting judgements and estimates arising
from our considerations, consistent with our assessment that climate change is not expected to have a meaningful financial impact on the
Group in the medium term, and in the longer term is expected to be a net opportunity to the Group. This conclusion has been arrived at
with reference to the climate risk assessment exercise carried out during the year – see the TCFD disclosures in the Strategic Report. We
have specifically considered the impact of climate change on the carrying value of fixed assets (see note 15) and in our goodwill impairment
assessment (see note 14).
Basis of consolidation
These Consolidated Financial Statements comprise the Financial Statements of National Express Group PLC and all its subsidiaries drawn
up to 31 December each year. Adjustments are made to bring any dissimilar accounting policies that may exist into line with the Group’s
accounting policies.
The Consolidated Income Statement includes the results of subsidiaries and businesses purchased from the date control is assumed
and excludes the results of disposed operations and businesses sold from the date of disposal.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.
Non-controlling interests represent the portion of comprehensive income and equity in subsidiaries that is not attributable to the
parent Company shareholders and is presented separately from parent shareholders’ equity in the Consolidated Balance Sheet.
Summary of significant accounting policies
Subsidiaries
Subsidiaries are entities over which the Company has control. Control exists when the Company has power over an entity, exposure to
variable returns from its involvement with an entity and the ability to use its power over the entity to affect its returns. The existence and
effect of potential voting rights that are currently exercisable or convertible are also considered when assessing control.
Interests in joint ventures
The Group has a contractual arrangement to share control of an entity. The Group recognises its interest in the assets and liabilities of the
entity using the equity method of accounting. The Group Balance Sheet includes the appropriate share of the joint ventures net assets or
liabilities and the Income Statement includes the appropriate share of their results after tax.
Financial Statements of joint ventures are prepared for the same reporting period as the Group. Adjustments are made in the Group’s
Financial Statements to eliminate the Group’s share of unrealised gains and losses on transactions between the Group and its joint venture.
The Group ceases to use the equity method from the date it no longer has joint control over the entity.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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Interests in associates
Companies, other than subsidiaries and joint ventures, in which the Group has an investment representing not less than 20% of the
voting rights and over which it exerts significant influence are treated as associates. The Consolidated Financial Statements include
the appropriate share of these associates’ results and net assets based on their latest Financial Statements under the equity method
of accounting.
Foreign currencies
The trading results of foreign currency denominated subsidiaries, joint ventures and associates are translated into Sterling, the presentation
currency of the Group and functional currency of the parent, using average rates of exchange for the year as a reasonable approximation
to actual exchange rates at the dates of transactions.
The Balance Sheets of foreign currency denominated subsidiaries, joint ventures and associates are translated into Sterling at the rates
of exchange prevailing at the year end and exchange differences arising are taken directly to the translation reserve in equity. On disposal
of a foreign currency denominated subsidiary, the deferred cumulative amount recognised in the translation reserve (since 1 January 2004
under the transitional rules of IFRS 1) relating to that entity is recognised in the Income Statement. All other translation differences are taken
to the Income Statement, with the exception of differences on foreign currency borrowings and forward foreign currency contracts which are
used to provide a hedge against the Group net investments in foreign enterprises. These are taken directly to equity until the disposal of the net
investment, at which time they are recognised in the Income Statement.
Presentation of Income Statement and separately disclosed items
The Group Income Statement has been presented in a columnar format to enable users of the Financial Statements to view the underlying
results of the Group. The Group’s policy is to exclude items that are considered significant in nature and/or value, not in the normal course
of business or are consistent with items that were treated as separately disclosed in prior periods. Treatment as a separately disclosed item
provides users of the accounts with additional useful information to assess the year-on-year trading performance of the Group. Further
details relating to separately disclosed items are provided in note 5 and a full listing of the Group’s alternative performance measures
(APMs) are provided in the glossary on page 226.
Revenue recognition
Revenue is measured based on the consideration specified in the contract with a customer and is recognised when the performance
obligations of the contract have been fulfilled.
Contract revenues
For the purposes of disclosures, the Group has applied the term ‘contract revenues’ to describe documented contracts that typically cover
periods of at least one year, excluding concessions and subsidies. The contracts primarily relate to home to school and transit contracts in
North America, urban bus contracts in Spain and coach contracts in the UK.
Revenues relating to the provision of transport services are recognised as the services are provided and in accordance with the terms of
the contract. Revenue relating to any additional performance measures in the contract are recognised when the performance has been met
and in accordance with the terms of the contract.
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in
exchange for transferring services to the customer. The variable consideration is estimated at contract inception and constrained until the
associated uncertainty is resolved and when it becomes highly probable that a significant revenue reversal will not occur.
Passenger revenues
Passenger revenues primarily relate to ticket sales in the UK, German Rail, intercity coach services in Spain and urban bus services
in Morocco.
Passenger revenue is recognised in the Income Statement in the period in which the related travel occurs. Revenue from tickets that cover
more than one day, for example monthly travelcards and season tickets, is initially deferred as a contract liability and released to the
Income Statement on a straight-line basis over the applicable period of the ticket.
Contract liabilities are reduced when an eligible cancellation arises. Also, where applicable, contract liabilities are reduced for ticket
breakage, being the portion of future travel that is not expected to be exercised.
Other ancillary revenues relating to ticket sales are recognised at point of sale or, if material and related to a future performance period,
recognised by reference to that period.
Passenger revenue in German Rail is allocated between the various transport providers in each region by the tariff authority responsible for
that region, and is recognised based on passenger counts, tariff authority estimates and historical trends.
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Grants and subsidies
Grants and subsidies relating to the provision of transport services are recognised as the services are provided and in accordance with the
terms of the contract.
Private hire
Private hire operations are contracts provided in the UK, ALSA and North America divisions and are typically of a short duration.
Revenue is recognised over the period in which the private hire is provided to the customer.
Other revenues
Other revenues primarily comprise non-passenger services in Spain, maintenance revenues in North America and advertising revenues.
Other revenue also includes sub-leasing income where the Group acts as the lessor.
Revenues for non-passenger services are recognised when the performance of the service has been fulfilled and in accordance with the
terms of the contract. Advertising revenue is recognised over the period of the advertising contract.
Contract costs
Costs to obtain a contract
The incremental costs to obtain a contract with a customer are recognised within ‘contract costs’ if it is expected that those costs will be
recoverable. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained are recognised as
an expense in the period.
Costs to fulfil a contract
Costs that relate directly to a contract, generate resources that will be used in satisfying the contract and are expected to be recovered are
recognised within ‘contract costs’ on the Balance Sheet. Contract fulfilment costs covered within the scope of another accounting
standard, such as property, plant and equipment or intangible assets, are not capitalised as contract fulfilment assets but are treated
according to those standards.
Contract costs are amortised on a straight-line basis over the term of the specific contract they relate to, consistent with the pattern of
recognition of the associated revenue.
Contract assets and liabilities
Contract assets are recognised where the Group has performed its obligations to allow the recognition of revenue. However, it exceeds the
amounts received or receivable from a customer at that time.
Contract liabilities are recognised when amounts are advanced by customers, however the Group has not yet met the performance
obligation under the contract to allow the recognition of the balance as revenue. Contract liabilities are recognised as revenue when the
Group performs such obligations under the contract.
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and that the Group
will comply with the conditions attached to it. When the grant relates to an expense item, it is recognised in operating costs within
the Income Statement over the period necessary to match on a systematic basis to the costs that it is intended to compensate. Revenue
related grants are recognised in grant and subsidy revenue in the period in which the operational revenue it is supporting relates to.
Where the grant relates to property, plant and equipment, the value is included in liabilities as deferred income and credited to the Income
Statement over the expected useful economic life of the assets concerned.
Government grants received in excess of the amounts recognised in the Income Statement are held as deferred grant income within trade
and other payables, whereas government grants recognised in the Income Statement that are yet to be received are held as grant
receivables in trade and other receivables.
Service concession arrangements
In Germany, Spain, Morocco and North America, the Group provides services through public-private partnerships with public authorities
responsible for the provision of public transport services.
Concession arrangements involve the transfer of operating rights for a limited period, under the control of the local authority, using
dedicated facilities supplied by the Group, or made available to it for or without consideration.
The characteristics of these contracts vary depending on the country and activities concerned.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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Financial asset model
The Group applies the financial asset model when the concession grantor contractually guarantees the payment of amounts specified in the
contract or the shortfall, if any, between amounts received from users of the public service and amounts specified.
Financial assets resulting from the application of IFRIC 12 ‘Service Concession Arrangements’ are recorded in the Group Balance Sheet
as financial assets or liabilities within working capital. These financial assets are assessed for impairment in line with the provisions
of IFRS 9.
Income received from the public authorities is recognised in line with the requirements of IFRS 15. In Germany, subsidy income from the
Public Transport Authority (PTA) is recognised over the life of the franchise and by using the input method to measure progress against the
performance obligation. The amount recognised in each period is based on a percentage of completion, applying net costs incurred as a
proportion of total expected net costs, which is what the subsidy is intended to compensate. In accordance with IFRS 15, costs payable to
the PTA are netted against subsidy income. In ALSA and North America, subsidy income from the local authority is recognised as the
services are provided and in accordance with the terms of the contract.
Intangible asset model
The Group applies the intangible asset model when income is directly received from the passengers and there is no contractual guarantee
from the concession grantor. The intangible asset corresponds to the right granted by the public authority to the Group to charge
passengers of the public service.
Intangible assets resulting from the application of IFRIC 12 are recorded in the Group Balance Sheet and are amortised on the basis of
the expected pattern of consumption applicable over the term of the concession.
Income received from passengers is recognised in line with the requirements of IFRS 15 and the policy detailed on page 135.
Infrastructure assets provided by the Group are either purchased or subject to a ‘lease style’ arrangement. Where the Group purchases the
assets on its standard supplier terms (typically one year), the related liability is recorded in contract liabilities until it is settled. Where the
assets are ‘leased’, the liability is recorded at
the present value of the future payments in contract liabilities in accordance with IFRIC 12,
as opposed to IFRS 16. Where lease payments on infrastructure assets are directly re-imbursed from the customer, the asset is recorded
according to the underlying classification of the IFRIC 12 contract (as set out above).
Taxes
Current tax
Current tax is provided on taxable profits earned according to the local tax rates applicable where the profits are earned. Income taxes are
recognised in the Income Statement unless they relate to an item accounted for in Other Comprehensive Income or Equity, in which case
the tax is recognised directly in Other Comprehensive Income or Equity. The tax rates and tax laws used to compute the current tax are
those that are enacted or substantively enacted at the balance sheet date.
Deferred tax
Deferred tax is provided in full in respect of all material temporary differences at the balance sheet date between the tax base and their
carrying amounts for financial reporting purposes, apart from the following exceptions:
− where the temporary difference arises from the initial recognition of goodwill;
− where an asset or liability is recognised in a transaction that is not a business combination and that at the time of the transaction affects
neither accounting nor taxable profit or loss; and
− in respect of investment in subsidiaries, associates and joint ventures where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is measured on a non-discounted basis at tax rates that are expected to apply in the periods in which the temporary
differences reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is considered more likely than not that future taxable profits will be available against
which the underlying temporary differences can be deducted. For this purpose, forecasts of future taxable profits are considered by
assessing the Group’s forecast revenue and profit models, taking into account future growth predictions and operating cost assumptions,
as well as assumptions on the tax elections within the Group’s control.
Accordingly, changes in assumptions to the Group’s forecasts may have an impact on the amount of future taxable profits and therefore
the period over which any deferred tax assets might be recovered.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and when the Group
intends to settle its current tax assets and liabilities on a net basis.
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Business combinations
On the acquisition of a business, identifiable assets and liabilities acquired are measured at their fair value. Contingent liabilities assumed
are measured at fair value unless this cannot be measured reliably, in which case they are not recognised but are disclosed in the same
manner as other contingent liabilities.
The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued. Any contingent consideration is recognised at fair value at the acquisition date and
subsequently until it is settled.
The cost of the acquisition in excess of the Group’s interest in the net fair value of the identifiable net assets acquired is recorded as
goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the Income Statement.
Non-current assets held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally
through a sale transaction rather than continuing use. This condition is regarded as met only when the sale is highly probable, the asset
(or disposal group) is available for immediate sale in its present condition, management is committed to the sale and the sale is expected to
complete within one year from the date of classification. Assets held for sale are stated at the lower of carrying amount and fair value less
costs to sell.
A discontinued operation is a component of the Group that has been disposed of, or is classified as held for sale and either represents a
separate major line of business or geographical area; is part of a plan to dispose of a separate major line of business or geographical area;
or is a subsidiary acquired exclusively for resale.
Discontinued operations are excluded from the results of continuing operations and presented as a single amount after tax. Comparatives
are also represented to reclassify the operation as discontinued.
Intangible assets
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable
assets and liabilities of the acquired subsidiary, associate or joint arrangement at the date of acquisition.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses and is not amortised.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. A cash-generating unit is identified at the lowest
aggregation of assets that generate largely independent cash inflows, and which is reviewed by management for monitoring and managing
the Group’s business operations.
On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Other intangible assets
Customer contracts
Customer contracts acquired as part of a business combination are initially recorded at the fair value attributed to those contracts
on acquisition.
Service concessions
Service concession intangible assets represent a right to charge passengers for the use of the public service. See page 136 for
further details.
Contract costs
Contract costs include costs to obtain and costs to fulfil a contract. See page 136 for further details.
Software
Acquired and internally developed software is capitalised on the basis of the costs incurred to acquire and bring to use the specific
software or fair value if acquired as part of a business combination. Computer software that is integral to a tangible fixed asset is
recognised within property, plant and equipment.
Amortisation is charged on a straight-line basis over the expected useful lives of the assets as follows:
Customer contracts − over the life of the contract (1 to 33 years)
Contract costs − over the term of the specific contract (1 to 15 years)
Software − over the estimated useful life (3 to 7 years)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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2 Accounting policies continued
The useful lives are examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Intangible assets
are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
Property, plant and equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses.
Repairs and maintenance costs are expensed as incurred.
Freehold land is not depreciated. All other property, plant and equipment is depreciated on a straight-line basis over its estimated useful life
as follows:
Useful lives and residual values are reviewed annually and adjustments, where applicable, are made on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from
the continued use of the asset, with any gain or loss arising included in the Income Statement in the period of derecognition.
Impairment
Intangible assets with definite useful lives, and property, plant and equipment are tested for impairment when events or circumstances
indicate that their carrying value may not be recoverable. Goodwill is subject to an impairment test on an annual basis, or more frequently
if there are indicators of impairment. Assets that do not generate independent cash flows are combined into cash-generating units.
The impairment testing of individual assets or cash-generating units requires an assessment of the recoverable amount of the asset or
cash-generating unit. If the carrying value of the asset or cash-generating unit exceeds its estimated recoverable amount, the asset or
cash-generating unit is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs of disposal
and value in use. Value in use is assessed based on estimated future cash flows discounted to their present value using a pre-tax discount
rate that is based on the country-specific weighted average cost of capital (WACC). The outcome of such an assessment is subjective, and
the result sensitive to the assumed future cash flows to be generated by the cash-generating units or assets, the growth rate used to
extrapolate the cash flows beyond the three-year period and discount rates applied in calculating the value in use.
Impairment losses relating to goodwill cannot be subsequently reversed.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another
entity. The Group determines the classification of its financial instruments at initial recognition.
Financial assets
Financial assets are classified at initial recognition as (i) subsequently measured at amortised cost, (ii) fair value through Other
Comprehensive Income or (iii) fair value through profit and loss. The classification depends on the purpose for which the financial assets
were acquired.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives are also classified
as held for trading unless they are designated as effective hedging instruments.
Financial assets at fair value through profit or loss are carried in the Group Balance Sheet at fair value, with net changes in fair value recognised in
the Income Statement within finance costs. Transaction costs arising on initial recognition are expensed in the Income Statement.
Financial assets at fair value through Other Comprehensive Income
The Group has elected to recognise its non-listed equity investments at fair value through Other Comprehensive Income. Gains and losses
on these financial assets are never recycled to the Income Statement. Dividends are recognised as other income in the Income Statement
when the right of payment has been established. Where there is no active market for the Group’s investments, fair value is determined
using valuation techniques including recent commercial transactions and discounted cash flow analyses. Equity instruments designated at
fair value through Other Comprehensive Income are not subject to impairment assessment.
Land and buildings −
15 to 50 years
Public service vehicles − 8 to 20 years
Plant and equipment, fixtures and fittings − 3 to 15 years
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Financial assets at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold assets to collect contractual
cash flows, and its contractual terms give rise on specific dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost include trade and other receivables and cash and cash equivalents in the Balance Sheet.
Financial liabilities
Financial liabilities are classified at initial recognition as (i) financial liabilities at fair value through profit or loss, (ii) loans and borrowings,
(iii)
payables or (iv) derivatives designated as hedging instruments, as appropriate. All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities
include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments. Subsequent
measurement depends on its classification as follows:
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest
method. Gains and losses are recognised in the Income Statement when the liabilities are derecognised. Amortisation is included as
finance costs in the Income Statement. This category applies to interest-bearing loans and borrowings.
For some contracts where the cash flows are back ended, the Group enters into a non-recourse factoring arrangement with a bank to
factor the future cash flows in advance of invoicing the customer, with the resultant liability with the bank recorded in loans and borrowings.
On subsequent receipt of the cash from the customer this is then immediately repaid to the bank. Both the cash receipt and the repayment
to the bank are recorded within cash flows from financing activities in the Statement of Cash Flows.
Put liabilties
Put liabilities are recognised when put options have been issued by the Group in a business combination. Liabilities are recorded at the
present value of the purchase price upon acquisition. The present value of purchase price is re-measured at each reporting date, with
subsequent changes recorded in the Income Statement. The related discount unwind is recognised as a finance cost.
Equity instruments
Hybrid instruments
Hybrid instruments issued by the Group are classified on initial recognition according to the substance of the arrangement. Hybrid
instruments are recorded within equity where the contractual terms of the instruments allow the Group to defer coupon payments and the
repayment of the principal amount indefinitely. These features give the Group the unconditional right to avoid the payment of cash or
another financial asset for the principal or coupon and consequently are classified as equity instruments. These equity instruments are not
re-measured from period to period. Coupon payments made are treated the same as an equity dividend distribution and, where not made,
are accrued within the hybrid reserve, with a corresponding reduction in retained earnings.
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments such as fuel derivatives, interest rate derivatives, foreign exchange forward contracts and
cross currency interest rate swaps to hedge its risks associated with fuel price, interest rate fluctuations and foreign currency. Such
derivative financial instruments are initially recognised at fair value and subsequently re-measured to fair value for the reported Balance
Sheet. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The
fair value of the derivatives is calculated by reference to market exchange rates, interest rates and fuel prices at the period end.
The Group designates certain derivatives as either:
− hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges);
− hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions
(cash flow hedges); or
− hedges of a net investment in a foreign operation (net investment hedges).
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the
hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the
changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
The Group’s interest rate derivatives are designated as either fair value hedges or cash flow hedges. For fair value hedges, the gain or loss
on the hedging instrument is recognised immediately in the Income Statement. The carrying amount of the hedged item is adjusted through
the Income Statement for the gain or loss on the hedged item attributable to the hedged risk, in this case movements in the risk-free
interest rate.
The Group’s fuel derivatives are designated as cash flow hedges. The gain or loss on the hedging instrument that is determined to be
an effective hedge is recognised in equity. The gains or losses deferred in equity in this way are recycled through the Income Statement
in the same period in which the hedged underlying transaction or firm commitment is recognised in the Income Statement.
Foreign exchange forward contracts and cross currency interest rate swaps are used to hedge the Group’s net investment in foreign
currency denominated operations, and to the extent they are designated and effective as net investment hedges, are matched in equity
against foreign exchange exposure in the related assets and liabilities. Gains and losses accumulated in equity are included in the Income
Statement when the foreign operation is partially disposed of or sold.
The Group also uses foreign exchange forward contracts to hedge certain transactional exposures. These contracts are not hedge
accounted and all gains and losses are taken directly to the Income Statement.
For derivatives that do not qualify for hedge accounting, gains or losses are taken directly to the Income Statement in the period. Similarly,
any material ineffective portion of the Group’s cash flow and net investment hedges is recognised in the Income Statement.
Movements in the fair value of the hedging instrument arising from costs of hedging for cash flow and net investment hedges are
recognised in
equity, disclosed separately and amortised to the Income Statement over the term of the hedge relationship on a
rational basis.
Any material ineffectiveness is recognised in the Income Statement within operating costs for fuel derivatives and finance costs for all
other derivatives.
Hedge accounting is discontinued when the hedging instrument or hedged item expires, is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. For fuel derivatives, this can arise due to a change in the highly probable forecast transaction as a result
of a change in divisional volume requirements. In such instances, accumulated fair value gains or losses are transferred from Other
Comprehensive Income to the Income Statement for affected trades when hedge accounting has been discontinued.
Inventories
Inventories are valued at the lower of cost and net realisable value on a first in, first out basis, after making due allowance for obsolete
or slow moving items.
Trade and other receivables
Trade and other receivables are recognised and carried at the transaction price determined under IFRS 15, less provision for impairment.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for
trade receivables. The Group uses provision matrices based on historical ageing of receivables and credit loss experience, adjusted as
necessary for any forward-looking factors specific to the debtors and economic environment.
Trade receivables are derecognised where the Group enters into factoring arrangements without recourse and the risks and rewards have
been fully transferred. The Group classifies the cash flows from receivable factoring arrangements within cash from operating activities in
the Statement of Cash Flows.
Cash and cash equivalents
Cash and cash equivalents as defined for the Statement of Cash Flows comprise cash in hand, cash held at bank with immediate access,
other short-term investments and bank deposits with maturities of three months or less from the date of inception. Bank overdrafts are
included in cash and cash equivalents where a notional pooling arrangement exists and where they form an integral part of the Group’s
cash management. In the Consolidated Balance Sheet, cash and cash equivalents are presented net of bank overdrafts where there is an
intention to exercise a legally enforceable right of offset, taking account of the Group’s normal business practices, otherwise are presented
within borrowings.
Trade and other payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
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2 Accounting policies continued
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are
measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted
to present value where the effect is material using a pre-tax discount rate. When discounting is used, the increase in the provision due to
the passage of time is recognised as a finance cost.
Contingent liabilities are obligations that arise from past events that are dependent on future events. They are disclosed in the notes
to the Financial Statements where the expected future outflow is not probable.
Onerous contracts
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot avoid because it has the
contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable
costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to the
contract (i.e. both incremental costs and an allocation of costs directly related to contract activities).
Where the Group assesses a contract is onerous, the present obligation under the contract is recognised and measured as a provision.
However, before a separate provision for an onerous contract is established, the Group recognises any impairment loss on assets
dedicated to that contract.
Insurance claims
The Group’s policy is to not insure low value, high frequency claims within the businesses. To provide protection against higher value
claims, the Group purchases insurance cover from a selection of proven and financially strong insurers. Provisions in respect of claims risk
include projected settlements for known and incurred but not reported claims. Projected settlements are estimated based on historical
trends and actuarial data and are discounted to take account of the expected timing of future cash settlements. To the extent insurance
liabilities are insured and awaiting settlement, a separate asset is recognised in other receivables.
Leases
Group as a lessee
Lease identification
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identifiable asset for a period of time in exchange for consideration. Non-lease components and
contracts which do not contain a lease are expensed in the Income statement on a systematic basis over the contract term.
Right-of-use asset
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset and the lease term.
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the
lease liability.
Lease liability
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The lease payments include fixed
payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or
a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term
reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised
as an expense in the period in which the event or condition that triggers the payment occurs.
The lease liability is measured at amortised cost using the effective interest method. It is re-measured when there is a change in future
lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be
payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension
or termination option.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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2 Accounting policies continued
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option. It also applies the low-value assets recognition exemption to leases of assets
below £5,000. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis
over the lease term.
Covid-19-related rent concessions
The Group applies the option to not assess whether eligible rent concessions that are a direct consequence of the Covid-19 pandemic are
lease modifications, and accounts for them in accordance with other applicable guidance.
Group as a lessor
As a lessor, the Group continues to classify leases as either finance leases or operating leases and account for those two types of leases
differently. Where the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset it is classified
as a finance lease and if not is an operating lease.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease
classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset.
Where the sub-lease is classified as a finance lease, the right-of-use asset with respect to the head lease is derecognised and a finance
lease receivable is recognised equal to the net investment in the sub-lease. The net investment in the lease is calculated as the present
value of the aggregate of lease payments receivable and any unguaranteed residual value. Where the interest rate implicit in the sub-lease
cannot be readily determined, the Group uses the discount rate used for the head lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of
‘other revenue’.
Retirement benefits
Defined contribution schemes
Payments to defined contribution schemes are charged to the Income Statement as they fall due. The Group has no legal or constructive
obligation to pay further contributions into a defined contribution scheme if the fund has insufficient assets to pay all employees benefits
relating to employee service in the current and prior periods.
Defined benefit schemes
Plan assets, including qualifying insurance po
licies, are measured at fair value and plan liabilities are measured on an actuarial basis, using
the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality corporate bond
of equivalent currency and term to the plan liabilities. The difference between the value of plan assets and liabilities at the period-end date
is the amount of surplus or deficit recorded in the Group Balance Sheet as an asset or liability. An asset is recognised when the employer
has an unconditional right to use the surplus at some point during the life of the plan or on its wind-up.
Current service costs are recognised within operating costs in the Income Statement. Past service costs and gains, which are the change
in the present value of the defined benefit obligation for employee service in prior periods resulting from plan amendments, are recognised
immediately as the plan amendment occurs. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset
and is recognised within finance costs.
Re-measurements comprise actuarial gains and losses and the return on plan assets (excluding amounts included in net interest).
Actuarial gains and losses may result from differences between the actuarial assumptions underlying the plan liabilities and actual
experience during the year or changes in the actuarial assumptions used in the valuation of the plan liabilities. Re-measurement
gains and losses, and taxation thereon, are recognised in Other Comprehensive Income and are not reclassified to profit or loss
in subsequent periods.
Full actuarial valuations are carried out triennially and are updated for material transactions and other material changes in circumstances up
to the end of the reporting period.
Share-based payments
The Group awards equity-settled share-based payments to certain employees, under which the Group receives services from employees
as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of
the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the op
tions
granted, excluding the impact of any non-market service and performance vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the Group over a specified time period). Non-market vesting conditions are included in assumptions
about the number of options that are expected to vest. The total amount expensed is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be satisfied. At each balance sheet date, the Group revises its estimates of
the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to
original estimates, if any, in the Income Statement, with a corresponding adjustment to equity.
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2 Accounting policies continued
Share capital, share premium and dividends
Where either the Company or employee share trusts purchase the Company’s equity share capital, the consideration paid, including
any transaction costs, is deducted from total shareholders’ equity as own shares until they are cancelled or re-issued. Any consideration
subsequently received on sale or re-issue is included in shareholders’ equity.
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s Financial Statements on the date when
dividends are approved by the Company’s shareholders. Interim dividends are recognised in the period they are paid.
New standards and interpretations not applied
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods
and have not been early adopted by the Group:
− Onerous Contracts; Cost of Fulfilling a Contract – Amendments to
IAS 37
− Annual Improvements to IFRS Standards 2018 – 2020
− Property, Plant and Equipment; Proceeds before Intended Use – Amendments to IAS 16
− Revised Conceptual Framework for Financial Reporting
− Classification of Liabilities as Current or Non-current – Amendments to IAS 1
− Amendments to IFRS 17 ‘Insurance Contracts’
− Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
− Definition of Accounting Estimates (Amendments to IAS 8)
− Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable
future transactions.
3 Exchange rates
The most significant exchange rates to UK Sterling for the Group are as follows:
If the results for the year to 31 December 2020 had been retranslated at the average exchange rates for the year to 31 December 2021,
North America would have achieved underlying operating profit of £11.8m on revenue of £815.2m, compared with underlying operating
profit of £12.4m on revenue of £869.2m as reported, and ALSA would have achieved a underlying operating profit of £6.4m on revenue of
£540.9m, compared with underlying operating profit of £6.7m on revenue of £559.3m as reported.
4 Revenue and segmental analysis
The Group’s reportable segments have been determined based on reports issued to and reviewed by the Group Executive Committee,
and are organised in accordance with the geographical regions in which they operate and the nature of services that they provide.
Management considers the Group Executive Committee to be the chief decision-making body for deciding how to allocate resources
and for assessing operating performance.
Segmental performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the
Consolidated Financial Statements. Group financing activities and income taxes are managed on a Group basis and are not allocated
to reportable segments.
The principal services from which each reportable segment derives its revenues are as follows:
− UK – bus and coach operations
− German Rail – rail operations
− ALSA (predominantly Spain and Morocco) – bus and coach operations
− North America (USA and Canada) – school bus, transit bus and shuttle operations
Further details on the activities of each segment are described in the Strategic Report.
Central functions is not a reportable segment but has been included in the segmental analysis for transparency and to enable
a reconciliation to the consolidated Group.
2021
Closing rate
2021
Average rate
2020
Closing rate
2020
Average rate
US Dollar
1.35 1.38 1.37 1.28
Canadian Dollar 1.71 1.72 1.74 1.72
Euro
1.19 1.16 1.12 1.13
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
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4 Revenue and segmental analysis continued
(a) Revenue
Revenue is disaggregated by reportable segment, class and type of service as follows:
Included in grants and subsidies is £92.8m (2020: £84.7m) of grant income recognised in the UK in response to Covid-19. Up to 31 August
2021, £80.6m (2020: £83.2m) of revenue was recognised under the Covid Bus Services Support Grant (CBSSG) in England, in respect of the
shortfall of revenue earned due to Covid-19 and the costs incurred whilst maintaining 100% of pre-Covid-19 service levels. Effective from
1 September 2021, CBSSG was replaced by the Bus Recovery Grant (BRG). The BRG is intended to compensate UK Bus operators for
continuing bus services during the Covid-19 recovery period, and whereby funding has been allocated to the operators according to revenue
and mileage operated. Up to 31 December 2021, a total of £12.2m (2020: £nil) has been recognised in respect of the BRG. Following the
disposal of our Dundee operations in the prior year, no amounts have been recognised under the Covid Support Grant (CSG) in Scotland
during the year (2020: £1.5m). The grant income has been recognised in the Income Statement in the same period that the related revenue
shortfall occurred and to the extent that there is reasonable certainty that Group will comply with the conditions of the grant and that it will
be received and retained (taking account of the potential adjustments to grant payments as a result of the review process).
Also included in grants and subsidies is £15.9m (2020: £15.6m) additional subsidies in Germany in respect of the Federal Framework
Regulation on Aid to Public Transport. Under this arrangement, additional subsidies may be claimed by public transport operators in
Germany to compensate for the loss of passenger revenue due to Covid-19. Similarly, a further £54.2m (2020: £15.3m) was recognised
in ALSA from Public Transport Authorities to compensate for revenue shortfalls due to Covid-19. In both cases, subsidy income has been
recognised in the same period in the Income Statement to match the period in which the related shortfall of revenue occurred and to the
extent there is reasonable certainty that the Group has complied with the conditions.
In ALSA, revenue of £10.8m (2020: £nil) has been recognised for additional services provided to a customer between 2015 and 2020. In
previous years it was considered uncertain as to whether such amounts could be recovered, and therefore such amounts were constrained.
Following an agreement with the customer during the year, the uncertainty has been resolved and the revenue recognised in full.
In German Rail, at the commencement of the Rhine-Münster Express (RME) contract in 2015 a fixed amount of subsidy was agreed with
the PTA for the life of the contract and the amount recognised each year was measured by considering the proportion of contract costs
incurred at each balance sheet date. As it does every year, the Group has re-forecast the contract out-turn and re-assessed its estimate of
the stage of completion. As a result of additional Covid-19 related subsidies and updates in the contract profitability the re-assessment
resulted in the re-phasing of revenue from later years to the current year of £3.8m, whereas in 2020 £5.2m was reversed.
There have been no other material amounts of revenue recognised in the year that relate to performance obligations satisfied or partially
satisfied in previous years. Revenue received where the performance obligation will be fulfilled in the future is classified as deferred income
or contract liabilities and disclosed in notes 24 and 25.
A
nalysis by class and reportable segment:
2021
Contract
revenues
£m
Passenger
revenues
£m
Grants and
subsidies
£m
Private hire
£m
Other
revenues
£m
Total
£m
UK 49.3 195.3 136.5 7.0 9.7 397.8
German Rail – 45.2 136.7 – 0.2 182.1
A
LSA 159.5 323.6 175.1 30.4 29.8 718.4
North America 831.3 – – 33.4 7.3 872.0
Central functions – – – – – –
Total revenue 1,040.1 564.1 448.3 70.8 47.0 2,170.3
A
nalysis by major service type:
Passenger transport 1,040.1 564.1 448.3 70.8 18.7 2,142.0
Other products and services – – – – 28.3 28.3
Total revenue 1,040.1 564.1 448.3 70.8 47.0 2,170.3
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
145

146
4 Revenue and segmental analysis continued
There are no material inter-segment sales between reportable segments.
(b) Operating profit/(loss)
Operating profit/(loss) is analysed by reportable segment as follows:
Further information on separately disclosed items is provided in note 5.
(c) Depreciation
Depreciation is analysed by reportable segment as follows:
A
nalysis by class and reportable segment:
2020
Contract
revenues
£m
Passenger
revenues
£m
Grants and
subsidies
£m
Private hire
£m
Other
revenues
£m
Total
£m
UK 24.1 194.1 135.7 26.1 8.2 388.2
German Rail – 38.5 94.5 – 6.2 139.2
A
LSA 134.1 276.3 106.7 27.9 14.3 559.3
North America
826.4 – – 24.6 18.2 869.2
Central functions
– – – – – –
Total revenue 984.6 508.9 336.9 78.6 46.9 1,955.9
A
nalysis by major service type:
Passenger transport 984.6 508.9 336.9 78.6 24.9 1,933.9
Other products and services – – – – 22.0 22.0
Total revenue 984.6 508.9 336.9 78.6 46.9 1,955.9
Underlying
operating
profit/(loss)
2021
£m
Separately
disclosed
items
2021
£m
Segment
result
2021
£m
Underlying
operating
(loss)/profit
2020
£m
Separately
disclosed
items
2020
£m
Segment
result
2020
£m
UK (22.
6) (23.8) (46.4) (49.0) (50.4) (99.4)
German Rail 5.0 (29.1) (24.1) (4.9)(19.1) (24.0)
A
LSA 56.6 (26.4) 30.2 6.7(100.2) (93.5)
North America 74.4 (27.9) 46.5 12.4 (188.4) (176.0)
Central functions (26.4) (16.0) (42.4) (16.0) 27.5 11.5
Operating profit/(loss) 87.0 (123.2) (36.2) (50.8) (330.6)(381.4)
Share of results from associates and
j
oint ventures
(1.0) – (1.0) (2.1)
– (2.1)
Net finance costs (46.3) (1.4) (47.7) (53.2) (8.0) (61.2)
Profit/(loss) before tax 39.7 (124.6) (84.9) (106.1) (338.6) (444.7)
Tax credit
7.0
118.0
Loss for the year (77.9) (326.7)
2021
£m
2020
£m
UK
35.0 40.8
German Rail 3.9 3.3
A
LSA 60.8 66.1
North America
99.3 112.5
Central functions
0.7 0.9
199.7 223.6
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
146

147
4 Revenue and segmental analysis continued
(d) Non-current assets
Non-current assets and additions are analysed by reportable segment as follows:
(e) Geographical information
Due to the nature of the Group’s businesses, the origin and destination of revenue are the same.
No single external customer amounts to 10% or more of the total revenue.
Information reported to the Group Executive Committee does not regularly include an analysis of assets and liabilities by segment.
Intangible
assets
2021
£m
Property,
plant and
equipment
2021
£m
Total
non-current
assets
2021
£m
Non-current
asset
additions
2021
£m
Intangible
assets
2020
£m
Property,
plant and
equipment
2020
£m
Total
non-current
assets
2020
£m
Non-current
asset
additions
2020
£m
UK
54.7 249.9 304.6 21.3 56.7 293.0 349.7 23.8
Central functions 12.1 1.5 13.6 2.0 10.8 2.0 12.8 2.3
Total UK
66.8 251.4 318.2 23.3 67.5 295.0 362.5 26.1
German Rail 8.5 11.5 20.0 7.6 13.6 10.1 23.7 12.4
A
LSA 910.3 336.7 1,247.0 52.7 960.1 374.4 1,334.5 56.8
North America
792.9 530.0 1,322.9 72.8 810.6 553.7 1,364.3 137.4
Total overseas
1,711.7 878.2 2,589.9 133.1 1,784.3 938.2 2,722.5 206.6
Total 1,778.5 1,129.6 2,908.1 156.4 1,851.8 1,233.2 3,085.0 232.7
Revenue from external
customers Non-current assets
2021
£m
2020
£m
2021
£m
2020
£m
UK 397.8 388.2 318.2 362.5
Germany 182.1 139.2 20.0 23.7
Spain
591.5 458.5 1,154.1 1,233.3
Morocco
115.1 87.4 80.9 88.2
Switzerland
11.8 13.4 12.0 13.0
USA
815.8 807.0 1,202.4 1,238.0
Canada
56.2 62.2 120.5 126.3
2,170.3 1,955.9 2,908.1 3,085.0
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
147

148
5 Separately disclosed items
As set out in our accounting policies, we report underlying measures because we believe they provide both management and stakeholders
with useful additional information about the financial performance of the Group’s businesses.
The total separately disclosed items before tax for the year ended 31 December is a net charge of £124.6m (2020: £338.6m). The items
excluded from the underlying result are:
1
Amounts in 2020 have been represented for consistency with the current year presentation of separately disclosed items
(a) Intangible amortisation for acquired businesses
Consistent with previous periods, the Group classifies the amortisation for acquired intangibles as a separately disclosed item by virtue of
its size and nature. Its exclusion enables comparison and monitoring of divisional performance by the Group Executive Committee
regardless of whether through acquisition or organic growth. Equally, it improves comparability of the Group’s results with those of peer
companies.
(b) Directly attributable gains and losses resulting from the Covid-19 pandemic
The pandemic continued to impact the Group throughout 2021 and therefore directly attributable gains and losses due to Covid-19
continue to be separately identified. The Group has identified a net expense of £41.0m (2020: £245.7m) relating to directly attributable gains
and losses resulting from the pandemic. The net result relates to five separately identifiable areas of accounting judgement and estimates
as follows:
These items are considered to be separately disclosed items as they meet the Group’s definition, being significant in both nature and value
to the results of the Group in the current period or reflect the finalisation of actions initiated during 2020, but completed in 2021. The impact
that Covid-19 has had on underlying trading, such as the impact of lost revenue, is not recognised within separately disclosed items.
Further charges are not anticipated during 2022, other than changes to estimates that have been previously recorded in separately
disclosed items.
(i) One-off costs, cancellation charges and compensation payments – £2.2m expense (2020: £46.4m expense)
Given the re-imposition of lockdowns at the beginning of the year and the scale back of our service offering, the Group continued to make
a number of compensatory payments totalling £4.8m (2020: £12.7m) to third party operators in order to maintain and secure the Group's
supply base for when demand picks up.
In addition, the Group incurred a further £1.4m (2020: £24.7m) of one-off charges relating to incremental health and safety costs and
penalties whereby the pandemic prevented it from fulfilling certain contractual obligations.
A gain of £4.0m (2020: £9.0m expense) also arose following the re-measurement of the provision for employee compensation claims as a
consequence of Covid-19.
(ii) Discontinuation of fuel trades – £nil (2020: £17.3m expense)
During the period, hedge accounting was discontinued for a small number of fuel derivatives where volumes were in excess of actual or
expected consumption. The majority arose in the UK, ALSA and North America following more stringent lockdown measures being
implemented in early 2021 and slower recovery. Overall expenses and gains recycled to the Income Statement from Other Comprehensive
Income netted to £nil (2020: £17.3m expense).
For the remaining effective hedges, gains or losses on the derivatives continue to be recognised in equity and on settlement are recycled
to the Income Statement against the respective operating expense, and are not included in separately disclosed items.
2021
£m
2020
1
£m
Intangible amortisation for acquired businesses (a)
38.8
52.6
Directly attributable gains and losses resulting from the Covid-19 pandemic (b)
1
41.0
245.7
Restructuring costs (c)
12.3
14.0
Re-measurement of the Rhine-Ruhr onerous contract provision (d)
1
27.9
16.8
Other separately disclosed items (e)
3.2
1.5
Separately disclosed operating cost items
123.2
330.6
Interest charges directly resulting from the Covid-19 pandemic (f)
1.4
8.0
Total separately disclosed items
124.6
338.6
2021
£m
2020
1
£m
One-off costs, cancellation charges and compensation payments (i) 2.2 46.4
Discontinuation of fuel trades (ii) – 17.3
Onerous contract provisions and associated impairment (iii) 10.3 116.6
Impairments and associated charges (iv) 17.0 99.3
Re-measurement of the WeDriveU put liability (v) 11.5 (33.9)
41.0 245.7
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
148

149
5 Separately disclosed items continued
(iii) Onerous contract provisions and associated impairment – £10.3m net expense (2020: £116.6m expense)
As a result of the pandemic, the Group undertook a review of its contracts with customers to firstly establish the re-measurement of
previously recognised onerous contract provisions and secondly to identify any new ones. This resulted in a net exceptional expense of
£8.9m reflecting some contracts performing better than anticipated at December 2020, mainly due to a quicker recovery in response to
Covid-19 or additional government support, and some less well, where the recovery from the pandemic has been slower. In addition, some
new onerous contracts were identified, typically where the contract length has been shortened (less time to recover contract losses due to
the pandemic) or where recovery was slower than expected. In conjunction with the review, customer contract intangibles of £0.2m and
property, plant and equipment totalling £1.2m were impaired.
(iv) Impairments and associated charges – £17.0m expense (2020: £99.3m expense)
In addition to the Group’s goodwill impairment test and the identification of assets relating to onerous contracts, the Group reviewed its
non-current assets. During the period the Group has continued to exit certain contracts or lines of business that were anticipated to be low
margin over the medium term and/or that were now considered less strategically relevant. Accordingly, any dedicated assets associated
with these contracts or lines of business were identified and assessed for impairment, after first considering if they could be re-used
or repurposed.
The overall result of this review was the impairment of £10.6m of customer contracts and property, plant and equipment of £6.4m.
(
v) Remeasurement of the WeDriveU put liability – £11.5m expense (2020: £33.9m gain)
The put liability, resulting from the acquisition of WeDriveU, is required to be re-measured at each reporting date. During 2020 the put
liability was reduced by £33.9m reflecting the lower short to medium term projections for WeDriveU, principally driven by the impact of
Covid-19. At December 2021, the liability was reassessed resulting in a net expense of £11.5m principally reflecting improved profitability
for both 2021 and 2022. The expense has been recorded in separately disclosed items due to its size and nature and consistent with the
treatment in the prior year.
The most significant driver for the current year expense is the adjustment to the in-year and future earnings as a result of better customer
support and a more optimistic view of new growth opportunities in response to the pandemic. Consequently the expense has been
categorised as part of the overall impact due to Covid-19.
(c)
Restructuring costs
During the period, the Group incurred £12.3m of costs in respect of Group-wide restructuring initiatives and redundancies, as part of the
Group’s mitigations against the adverse impact of the pandemic on profit and cash.
(d) Rhine-Ruhr Express onerous contract provision
During 2020, profitability of the Rhine-Ruhr Express contract was assessed in light of the launch of the third and final line, the impact of the
pandemic over the short to medium term and an updated outlook on costs. This assessment resulted in the impairment of contract costs
recorded within intangibles of £16.8m. During 2021 a reassessment of the contracts profitability was performed. This identified a further
reduction in profitability, resulting in all remaining contract costs of £4.8m being impaired and an onerous contract of £23.1m being
recognised. The reduction in profitability is driven by an increase in overhead costs, principally energy costs in response to the recent surge
in energy prices and personnel costs following the first full year of operation of all lines. These amounts have been included as separately
disclosed items given their material size and by virtue of their nature.
(e) Other separately disclosed items
Other separately disclosed items relate primarily to transaction fees in respect of the Group’s potential combination with Stagecoach,
totalling £3.5m at December 2021, with further costs expected in 2022. These one-off charges are not considered to be part of the
day-to-day operational costs of the Group and therefore have been treated as separately disclosable on this basis.
Also included in other is a £0.3m credit for the finalisation of the Dundee disposal transaction that took place in December 2020 consistent
with the treatment in the prior year.
(f) Interest charges
Interest charges of £1.4m primarily relate to fees associated with the gearing covenant waivers on the Group’s US private placement and
banking facilities. These costs are not considered to be a normal finance cost of the Group.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
149

150
6 Operating costs
1
Excludes amortisation from acquired intangibles which is included within intangible asset amortisation above.
In addition to revenue related grants as disclosed in note 4, government grants have been recognised in relation to staff costs totalling
£18.3m (2020: £45.6m) in response to the Covid-19 pandemic. These arrangements were designed to provide relief to companies in
respect of staff costs for jobs retained amid the pandemic. The principal arrangements are the Coronavirus Job Retention Scheme (CJRS)
in the UK and the US CARES Act in North America. The amounts recognised reflect the grants receivable in respect of the year ended 31
December 2021 and relate to the costs reclaimable for employees furloughed or retained to the extent that it is reasonably certain that the
grant will be received. These grants have been netted within staff costs.
In addition, on 12 August 2021 the Group was granted an award of £82.3m under the Coronavirus Economic Relief for Transportation
Services (CERTS) scheme in North America. The programme is designed to provide relief to retain jobs, hire back employees previously laid
off and cover applicable overhead and operational expenses. The grant is to be applied against future costs over a 12 month period up to
16 August 2022. The Group must submit quarterly claims to the US treasury and any unutilised amounts must be repaid at the end of the
scheme. Up to 31 December 2021 the Group has recognised £45.7m of the award as a reduction in operating expenses (mostly staff costs)
based on eligible costs incurred during the period. The remainder of the grant is held as deferred grant income within trade and other
payables and will be utilised against eligible costs during the year ending 31 December 2022.
2021
£m
2020
£m
Cost of inventories recognised in expense 78.6 81.0
Staff costs 1,156.4 1,138.8
Depreciation – owned assets 133.8 146.3
– leased assets 65.9 77.3
Intangible asset amortisation 54.2 69.0
Gain on disposal of property, plant and equipment (8.0) (8.7)
Gain on disposal of intangible assets (0.6) (2.3)
A
mortisation of fixed asset grants (3.2) (2.9)
Leases (note 35) – variable lease payments not included in the measurement of lease liabilities 0.1 –
– expenses relating to short-term leases 4.3 7.9
– expenses relating to leases of low-value assets 3.0 5.2
– Covid-19-related rent concessions – (0.7)
Separately disclosed items
1
(note 5) 84.4 278.0
Other charges 637.6 548.4
Total operating costs 2,206.5 2,337.3
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
150

151
7 Auditor’s remuneration
An analysis of fees paid to the Group’s auditor is provided below:
8 Employee benefit costs
(a) Staff costs
The average number of employees, including Executive Directors, during the year was as follows:
Included in the above are the following costs related to the Group’s key management personnel who comprise the Executive Directors of
the parent Company. Further details are disclosed in the Directors’ Remuneration Report:
(b) Share schemes
Details of options or awards outstanding at the end of the year under the Group’s share schemes are as follows:
(i) Long-Term Incentive Plan (LTIP)
The LTIP is open to Executive Directors and certain senior managers with awards made at the discretion of the Remuneration Committee,
normally on an annual basis and in the form of a nil cost option over a certain number of shares in the Company.
The vesting of shares on or around the third anniversary of grant is subject to the Group’s achievement of specific performance conditions
set at the date of grant. These typically comprise underlying diluted earnings per share (EPS), average return on capital employed (ROCE),
and the relative total shareholder return (TSR) of the Group against a relevant comparison. More recent grants have also included certain
environmental targets. Please refer to the Director’s Remuneration Report for details of the performance conditions which are attached to
the awards which are in flight at the end of the year and vested during the year. All targets are measured over the three-year financial period
commencing with the year of grant. Unvested shares automatically lapse.
2021
£m
2020
£m
A
udit of the financial statements 1.5 0.7
A
udit of subsidiaries 0.9 0.9
A
udi
t
-related assurance services 0.1 0.4
2.5 2.0
2021
£m
2020
£m
Wages and salaries 1,001.0 987.8
Social security costs 143.5 139.6
Pension costs (note 34) 10.9 11.2
Share-based payment (note 9) 1.0 0.2
1,156.4 1,138.8
2021 2020
Managerial and administrative 4,426 5,150
Operational 41,022 46,603
45,448 51,753
2021
£m
2020
£m
Basic salaries 1.0 0.9
Benefits 0.2 0.3
Performance-related bonuses 0.7 –
Share-based payment 0.2 (0.4)
2.1 0.8
Number of
share options
2021
Number of
share options
2020
Exercise
price
Future
exercise
periods
Long-Term Incentive Plan 6,181,699 5,307,399 nil 2022-2026
West Midland Travel Long Service Option Scheme 136,776 160,859 175p-412p 2022-2030
Executive Deferred Bonus Plan – 39,847 nil –
6,318,475 5,508,105
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
151

152
8 Employee benefit costs continued
An accrual entitlement in respect of dividends paid by the Company during the vesting period attaches to vested shares and is paid
to participants on vesting. Similarly, an accrual entitlement in respect of dividends is payable on unexercised vested shares held by
Executive Directors during their compulsory two-year holding period, which runs from the date of vesting (in parallel with the two-year
exercise period).
The LTIP allows for the grant to UK participants of an HMRC approved share option over shares with a market value of up to a maximum
of £30,000 outstanding at any time. These are awarded at the same time as, and with the same performance conditions as, the LTIP
awards and work by way of set-off versus the vested LTIP share value on exercise with the excess LTIP option award being forfeited.
Vested shares for all LTIP awards are normally delivered in the form of market purchased shares held in the Company’s Employee Benefit
Trust (the Trust). No cash settlement alternative is available.
(ii) Executive Deferred Bonus Plan (EDBP)
The delivery of the annual bonus award for Executive Directors is structured in two distinct parts, an initial cash payment under the annual
bonus plan and a one-year deferred payment award in the form of forfeitable shares in the Company granted under the EDBP. Release of
the shares on the first anniversary of grant is not subject to any additional performance condition, save for continuing employment. Participants
are entitled to receive any dividends paid by the Company on the shares while they are held in the Trust during the deferred period.
(iii) West Midlands Travel Long Service Option Scheme (WMT LSOS)
The WMT LSOS was used to reward WMT employees who attained 25 years’ service. The market-value option award over a certain
number of shares in the Company is exercisable between the third and tenth anniversary of grant. There are no performance conditions and
shares are delivered on exercise through the Trust. No cash settlement alternative is available. During 2020, the WMT LSOS was closed to
new participants, with exercises on previous awards possible until 2030.
9 Share-based payments
The charge in respect of share-based payment transactions included in the Group’s Income Statement for the year is as follows:
During the year ended 31 December 2021, the Group had three share-based payment arrangements, which are described in note 8(b).
For the following disclosure, share options with a nil exercise price have been disclosed separately to avoid distorting the weighted average
exercise prices. The number of share options in existence during the year was as follows:
2021
£m
2020
£m
Expense arising from share and share option plans 1.0 0.2
2021 2020
Number
of share
options
Weighted
average
exercise
price
p
Number
of share
options
Weighted
average
exercise
price
p
Options without a nil exercise price:
A
t 1 January 160,859 283 134,956 320
Granted during the year – – 45,000 175
Forfeited during the year (2,000) 175 (1,000) 412
Exercised during the year (3,828) 224 (5,351) 285
Expired during the year (18,255) 301 (12,746) 269
Outstanding at 31 December 136,776 283 160,859 283
Exercisable at 31 December 86,776 318 81,859 295
Options with a nil exercise price:
A
t 1 January 5,347,246 nil 6,536,357 nil
Granted during the year 2,752,151 nil 3,248,293 nil
Forfeited during the year (333,116) nil (2,687,710) nil
Exercised during the year (398,416) nil (1,547,568) nil
Expired during the year (1,186,166) nil (202,126) nil
Outstanding at 31 December 6,181,699 nil 5,347,246 nil
Exercisable at 31 December 258,107 nil 540,248 nil
Total outstanding at 31 December 6,318,475 5,508,105
Total exercisable at 31 December 344,883 622,107
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
152

153
9 Share-based payments continued
The options outstanding at 31 December 2021 had exercise prices that were between 175p and 412p (2020: between 175p and 412p)
excluding options with a nil exercise price. The range of exercise prices for options was as follows:
The options have a weighted average contractual life of one year (2020: one year). Options were exercised regularly throughout the year
and the weighted average share price at exercise was 291p (2020: 210p). The aggregate gains of the Executive Directors arising from any
exercise of options during the year totalled £0.2m (2020: £0.9m).
The weighted average fair value of the share options granted during the year was calculated using a stochastic model, with the following
assumptions and inputs. No share options without a nil exercise price were granted during the year, following the closure of WMT LSOS
in 2020.
Experience to date has shown that approximately 24% (2020: 24%) of options are exercised early, principally due to leavers. This has been
incorporated into the calculation of the expected option life for the share options without nil exercise price.
Expected volatility in the table above was determined from historical volatility over the last eight years, adjusted for one-off events that
were not considered to be reflective of the volatility of the share price going forward. The expected dividend yield represents the dividends
declared in the 12 months preceding the date of the grant, divided by the average share price in the month preceding the date of the grant.
For share options granted during the year under the LTIP, the TSR targets have been reflected in the calculation of the fair value of the
options above.
10 Net finance costs
Exercise price (p)
2021
Number
2020
Number
100-300 71,772 84,199
301-350 29,604 32,760
351-450 35,400 43,900
136,776 160,859
Share options without
nil exercise price
Share options with
nil exercise price
2021 2020 2021 2020
Risk-free interest rate – 0.15% 0.12% 0.22%
Expected volatility – 23% 66% 23%
Peer group volatility – – 36%-62% 33%-44%
Expected option life in years – 5 years 3 years 3 years
Expected dividend yield – 3.62% 0.00% 0.00%
Weighted average share price at grant date – 209p 305p 276p
Weighted average exercise price at grant date – 175p nil nil
Weighted average fair value of options at grant date – 38p 281p 231p
2021
£m
2020
£m
Bond and bank interest payable 32.0 36.3
Lease interest payable (note 35) 10.5 12.6
Other interest payable 2.7 4.3
Unwind of discounting (note 26) 2.5 1.6
Net interest cost on defined benefit pension obligations (note 34) 1.8 1.7
Finance costs before separately disclosed items 49.5 56.5
Separately disclosed finance costs (note 5) 1.4 8.0
Total finance costs 50.9 64.5
Lease interest income (note 35) (0.7) (0.6)
Other financial income (2.5) (2.7)
Net finance costs 47.7 61.2
Of which, from financial instruments:
Financial assets measured at amortised cost (1.5) (0.7)
Financial liabilities measured at amortised cost 44.0 51.3
Derivatives (1.8) (2.0)
Loan fee amortisation 1.2 1.7
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
153

154
11 Taxation
(a) Analysis of taxation credit in the year
In the current year, the tax credit on separately disclosed items of £19.8m (2020: £88.7m) comprises a £10.3m tax credit (2020: £11.5m)
on intangibles, £14.9m (2020: £77.2m) tax credit on tax deductible expenditure on exceptional costs and a £5.4m charge (2020: £nil)
of exceptional tax items.
The tax relief relating to intangible amortisation is determined by reference to the tax rates in the jurisdiction to which the intangible
amortisation relates. The effective tax rate relating to intangible amortisation is significantly higher than the UK tax rate of 19% due
to the weighting of intangibles in jurisdictions with higher tax rates than the UK, specifically the USA (26%) and Spain (25%).
(b) Tax on items recognised in Other Comprehensive Income or Equity
2021
£m
2020
£m
Deferred taxation:
Deferred tax charge/(credit) on actuarial (gains)/losses 2.7 (10.8)
Deferred tax charge/(credit) on cash flow hedges 9.5 (3.8)
Deferred tax credit on foreign exchange differences (0.5) (1.6)
Deferred tax credit on accrued hybrid instrument payments (4.4) (0.4)
Deferred tax (credit)/charge on share-based payments (0.3) 1.6
7.0 (15.0)
2021
£m
2020
£m
Current taxation:
UK corporation tax 2.8 (8.4)
Overseas taxation 16.3 10.1
Current income tax charge 19.1 1.7
A
djustments with respect to prior years – UK and overseas 0.2 (1.8)
Total current income tax charge/(credit) 19.3 (0.1)
Deferred taxation (note 27):
Origination and reversal of temporary differences (22.7) (119.6)
A
djustments with respect to prior years – UK and overseas (3.6) 1.7
Deferred tax credit (26.3) (117.9)
Total tax credit for the Group (7.0) (118.0)
The tax credit for the Group comprises:
Tax charge/(credit) on profit before separately disclosed items 12.8 (29.3)
Tax credit on separately disclosed items (19.8) (88.7)
(7.0) (118.0)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
154

155
11 Taxation continued
(c) Reconciliation of the total tax charge/(credit)
Included within the tax reconciliation are a number of non-recurring items, the effect of a reduction in recognition of current year Spanish
and German losses (£5.2m), derecognition of prior year German losses (£8.6m) and the increase of the UK tax rate effect on the deferred
tax asset recognised (credit £11.6m). Items expected to recur in the tax reconciliation for 2021 include the difference in rates between the
UK and our overseas markets and tax incentives on re-investment credits. During the year, a change in the UK corporation tax rate to 25%,
effective from 1 April 2023, was substantially enacted in UK law. As at 31 December 2020 UK deferred tax was calculated at 19% therefore
the current year tax charge includes a deferred tax credit of £11.6m reflecting the change in rates, as well as a £2.0m credit in relation to
current year deferred tax assets. As at 31 December 2021 the UK deferred tax is held at 25%.
(d) Tax provisions
At 31 December 2021, the Group held tax provisions of £1.8m (2020: £2.4m), representing an uncertainty with respect to deferred tax on
the pension scheme of a company no longer trading. All UK corporation tax returns up to 2019 have been submitted and agreed by HMRC.
The net decrease of £0.6m in tax provisions during the year represents: the release of tax reserves where the statute of limitation has
closed (£0.3m) and a decrease in the provision against the UK deferred tax asset on pensions (£0.3m). Based on the experience of the
Group Tax department and after discussions of the various tax uncertainties with our tax advisers, the year end tax provision represents
management’s best estimate of the tax uncertainties of which we are aware.
(e) Temporary differences associated with Group investments
No deferred tax (2020: £nil) is recognised on the unremitted earnings of subsidiaries, associates and joint ventures, as the Group has
determined that these undistributed profits will not be distributed in the near future. As a result of changes to tax legislation in 2009,
overseas dividends received on or after 1 July 2009 are generally exempt from UK corporation tax, but may be subject to withholding
tax. There are no temporary differences (2020: £nil) associated with investments in subsidiaries, associates and joint ventures, for which
a deferred tax liability has not been recognised but for which a tax liability may arise.
(f) Unrecognised tax losses
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit against
future taxable profits is probable. Based on current forecasts, it is estimated that the losses recognised for deferred tax purposes will be
utilised within three to four years. UK and overseas deferred tax assets that the Group has not recognised in the Financial Statements
relates to gross losses of £17.4m (2020: £6.3m), which arise in tax jurisdictions where the Group does not expect to generate sufficient
suitable future taxable profits. The majority of the unrecognised losses relates to German and Moroccan entities where it is uncertain when,
or if, the losses will be utilised.
2021
£m
2020
£m
Loss before income tax (84.9) (444.7)
Notional credit at UK corporation tax rate of 19% (2020: 19%) (16.1) (84.5)
Recurring items:
Non-deductible goodwill amortisation 0.8 1.5
Non-deductible intangible amortisation 0.3 0.3
Effect of overseas tax rates (1.1) (23.7)
Tax incentives (1.3) (0.6)
State taxes/Minimum tax 3.7 (0.6)
Non-recurring items:
A
djustments to prior years within current and deferred tax (excluding significant items) 0.2 (0.1)
Prior year adjustment – write-off of deferred tax asset on German losses 8.6 –
Prior year adjustment – release of tax provisions (0.6) (8.4)
Prior year adjustment – effect of increase in UK tax rate (11.6) –
Non-creditable withholding tax on pension surplus 2.6 –
Effect of increase in UK tax rate on current year profits (2.0) –
Non-deductible income/expenditure 5.6 (0.8)
Overseas financing deductions (1.5) (1.7)
Non-taxable loss/(profit) on disposal of Investment 0.2 (6.5)
Current year losses not recognised 5.2 7.1
Total tax credit reported in the Income Statement (note 11(a)) (7.0) (118.0)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
155

156
11 Taxation continued
(g) Deferred tax included in the Income Statement
Details on the Balance Sheet position of deferred tax are included in note 27.
12 Dividends paid and proposed
No interim or final dividend has been proposed for the current period (2020: £nil).
13 Earnings per share
Basic EPS is calculated by dividing the earnings attributable to equity shareholders, a loss of £102.8m (2020: £333.8m loss), by the
weighted average number of ordinary shares in issue during the year, excluding those held by the Group’s Employee Benefit Trust (note 32)
which are treated as cancelled. Earnings attributable to equity shareholders is inclusive of amounts accruing to the holders of the hybrid
instrument and are calculated as follows:
For diluted EPS, the weighted average number of ordinary shares in issue during the year is adjusted to include the weighted average
number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
The reconciliation of basic and diluted weighted average number of ordinary shares is as follows:
1
Potential ordinary shares have the effect of being anti-dilutive in 2021 and have been excluded from the calculation of diluted earnings per share. Whereas in 2020,
both diluted earnings per share and underlying diluted earnings per share measures excluded potential ordinary shares as they had the effect of being anti-dilutive.
The underlying basic and underlying diluted earnings per share have been calculated in addition to the basic and diluted earnings per share
required by IAS 33 since, in the opinion of the Directors, they reflect the underlying performance of the business’ operations.
The reconciliation of the earnings and earnings per share to their underlying equivalent is as follows:
1
Includes amounts accruing to the holders of the hybrid instrument
2021
£m
2020
£m
A
ccelerated capital allowances 23.5 20.6
Other short-term temporary differences 2.5 (33.6)
Recognition of losses
(52.3) (104.9)
Deferred tax credit (note 11(a))
(26.3) (117.9)
2021 2020
Basic earnings per share (16.8)p (57.9)p
Underlying basic earnings per share 0.1p (14.6)p
Diluted earnings per share (16.8)p (57.9)p
Underlying diluted earnings per share 0.1p (14.6)p
2021
£m
2020
£m
Loss attributable to equity shareholders (81.6) (331.7)
A
ccrued payments on hybrid instrumen
t
(21.2) (2.1)
Earnings attributable to equity shareholders (102.8) (333.8)
2021 2020
Basic weighted average shares 613,117,132 576,031,523
A
djustment for dilutive potential ordinary shares
1
345,497 –
Diluted weighted average shares 613,462,629 576,031,523
2021 2020
£m
Basic EPS
p
Diluted EPS
p £m
Basic EPS
p
Diluted EPS
p
Earnings attributable to equity shareholders (102.8)(16.8) (16.8) (333.8)(57.9) (57.9)
Separately disclosed items 124.6 20.3 20.3 338.6 58.8 58.8
Separately disclosed tax (19.8) (3.2) (3.2) (88.7) (15.4) (15.4)
Separately disclosed non-controlling interests (1.6) (0.2) (0.2) (0.3) (0.1) (0.1)
Underlying profit/(loss) attributable to equity shareholders
1
0.4 0.1 0.1 (84.2) (14.6) (14.6)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
156

157
14 Intangible assets
Goodwill arising on acquisitions of £23.1m comprises £14.0m with respect to the in year acquisition of Transportes Rober Group (see note
19 for further details) and a correction to goodwill of £9.1m relating to deferred tax on acquisition in previous years (note 27). Since the
correction was not material, this has been corrected in the current year with no change to previously reported comparatives.
The impairment charge includes £10.6m of customer contract intangibles (2020: £30.5m) which arose following strategic reviews in the
North America and UK divisions, and with respect to onerous contracts, £0.2m (2020: £12.9m) of customer contract intangibles in ALSA
and £4.8m (2020: £16.8m) franchise contract costs in German Rail.
The Group recognises infrastructure investment intangibles for public service vehicles where the Group has the right to charge passengers
of the public service in accordance with IFRIC 12 ‘Service Concession Arrangements’. Note 38 includes further details of the Group’s
service concession arrangements.
Customer contracts includes the following individually material assets, all of which arose through past acquisitions.
Customer
contracts
£m
Infrastructure
investment
intangible
£m
Software
£m
Contract
costs
£m
Total finite
life assets
£m
Goodwill
£m
Total
£m
Cost:
A
t 1 January 2021 861.8 77.4 126.9 36.8 1,102.9 1,574.1 2,677.0
A
cquisitions 7.1 – – – 7.1 23.1 30.2
A
dditions 1.4 3.2 8.9 1.6 15.1 – 15.1
Disposals (0.1)
– (4.7) – (4.8) – (4.8)
Reclassifications –
– 0.2 (1.2) (1.0) (0.9) (1.9)
Foreign exchange (26.6)
(2.5) (0.7) (2.2) (32.0) (44.2) (76.2)
A
t 31 December 20
2
1 843.6 78.1 130.6 35.0 1,087.3 1,552.1 2,639.4
A
mortisation and impairment:
A
t 1 January 2021 662.8 4.8 85.2 23.7 776.5 48.7 825.2
Charge for year 35.4 4.7 13.0 1.1 54.2 – 54.2
Disposals (0.1) – (4.6) – (4.7) – (4.7)
Impairment 10.8 – – 4.8 15.6 – 15.6
Reclassifications – – 0.6 (0.5) 0.1 (0.9) (0.8)
Foreign exchange (24.0) (0.2) (0.5) (1.5) (26.2) (2.4) (28.6)
A
t 31 December 2021 684.9 9.3 93.7 27.6 815.5 45.4 860.9
Net book value:
A
t 31 December 20
2
1 158.7 68.8 36.9 7.4 271.8 1,506.7 1,778.5
A
t 1 January 2021
199.0 72.6 41.7 13.1 326.4 1,525.4 1,851.8
Segment Nature of contract
Remaining
useful
economic life
at 31
December
2021
Net book
value
at 31
December
2021
£m
Remaining
useful
economic life
at 31
December
2020
Net book
value
at 31
December
2020
£m
North America School bus and paratransit service contract in North America 10 years 20.6 11 years 22.4
North America Employee shuttle contract in North America 8 years 16.9 9 years 19.0
North America Paratransit bus service contract in North America 11 years 12.1 12 years 14.2
A
LSA Urban and charter bus service contract in Spain 4 years 10.5 5 years 13.8
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
157

158
14 Intangible assets continued
Goodwill has been allocated to individual cash-generating units for annual impairment testing on the basis of the Group’s business
operations. The carrying value by cash-generating unit is as follows:
The calculation of value in use for each group of cash-generating units is most sensitive to the assumptions over discount rates and the
growth rate used to extrapolate cash flows into perpetuity beyond the five-year period of the management plan.
The key assumptions used for the cash-generating units are as follows:
Discount rates in North America and ALSA have fallen during the year, but are higher than they were in 2019.
The key estimates applied in the impairment review are the forecast level of revenue, operating margins and the proportion of operating
profit converted to cash in each year. Forecast revenue and operating margins are based on past performance and management’s
expectations for the future, including an estimate of the recovery from the Covid-19 pandemic. A growth rate for each division has been
consistently applied in the impairment review for all cash-generating units based on current forecasts and long-term country-specific GDP
growth rates. The cash flows are discounted using pre-tax rates that are calculated from country-specific WACC, principally derived from
external sources. Capital expenditure is projected over the first three years using a detailed, contract-by-contract level forecast of the
capital requirements of the Group for new and replacement vehicles and other assets. In the extrapolation of cash flows into perpetuity (the
terminal value), capital expenditure is assumed to be a 1:1 ratio to depreciation.
The value in use of the North America division exceeds its carrying amount by £812.0m (2020: £633.6m).
The value in use of the ALSA division exceeds its carrying amount by £425.9m (2020: £266.8m).
Customer
contracts
£m
Infrastructure
investment
intangible
£m
Software
£m
Contract costs
£m
Total finite
life assets
£m
Goodwill
£m
Total
£m
Cost:
A
t 1 January 2020 847.2 74.5 109.1 27.4 1,058.2 1,526.1 2,584.3
A
cquisitions 2.8 – – – 2.8 20.6 23.4
A
dditions – – 15.0 7.8 22.8 – 22.8
Disposals
(0.6) – (1.3) – (1.9) – (1.9)
Reclassifications
(4.6) – 5.3 – 0.7 – 0.7
Foreign exchange
17.0 2.9 (1.2) 1.6 20.3 27.4 47.7
A
t 31 December 2020 861.8 77.4 126.9 36.8 1,102.9 1,574.1 2,677.0
A
mortisation and impairment:
A
t 1 January 2020 565.4 0.9 72.3 4.3 642.9 39.6 682.5
Charge for year
47.8 3.8 15.1 2.3 69.0 – 69.0
Disposals (0.6)
– (1.3) – (1.9) – (1.9)
Impairment
35.8 – 0.4 16.8 53.0 7.3 60.3
Reclassifications
(0.2) – (0.5) – (0.7) – (0.7)
Foreign exchange
14.6 0.1 (0.8) 0.3 14.2 1.8 16.0
A
t 31 December 2020 662.8 4.8 85.2 23.7 776.5 48.7 825.2
Net book value:
A
t 31 December 2020 199.0 72.6 41.7 13.1 326.4 1,525.4 1,851.8
At
1 January 2020 281.8 73.6 36.8 23.1 415.3 1,486.5 1,901.8
2021
£m
2020
£m
UK
52.4 52.6
North America 669.5 652.7
A
LSA 784.8 820.1
1,506.7 1,525.4
Pre-tax discount
rate applied to
cash flow projections
Growth rate used to
extrapolate cash flows
into perpetuity
2021 2020 2021 2020
UK 7.9% 7.7% 2.4% 2.5%
North America 7.2% 7.6% 2.9% 3.1%
A
LSA 7.8% 8.3% 2.9% 3.0%
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
158

159
14 Intangible assets continued
The assumptions used to derive the cash flow projections over the first three years of the impairment assessment are consistent with those
used for the going concern and viability assessments, for which the assumptions are detailed in note 2 (for the going concern assessment)
and in the Viability Statement on page 48. In summary, the base case projections assume Group revenue recovers to pre-pandemic levels
in 2022 whereas the downside scenario assumes this is a year later, in 2023. Whilst the pace of recovery from the pandemic in the next
year could differ from that modelled, the vast majority of the value in use is in the terminal value, which is derived by applying the growth
rate to the terminal year cash flow projection. Beyond the uncertainty over the medium term recovery, the Directors continue to assume
there will not be any long-term net adverse impact from the pandemic based on the rapid recovery in demand for our services as
restrictions have been lifted, the strength of our customer relationships and the revenue protections inherent in a significant proportion of
the Group’s contracts where we are not exposed to demand risk. Applying the downside scenarios used for going concern or viability
assessments does not materially alter the headroom above the carrying value.
The assumptions behind the cash flow projections also take account of the climate change risk assessment exercise carried out during the
year. The principal conclusions relevant for the impairment assessment are as follows:
− Whilst the global temperature rise above pre-industrial levels increases the likelihood of extreme weather events, the geographical
diversity of the Group means that the risk to the Group as a whole is unlikely to be material
.
− The Group’s planning assumption is that input costs will not rise significantly above inflation on the basis that, for electric vehicles for
example, supply will increase to match demand, and technological advances will also help decrease manufacture costs. Furthermore the
Group assumes, based on its detailed modelling of electric vs diesel buses in the UK that the total cost of ownership of zero emission
vehicles will be no worse than their diesel equivalents. This assessment is inclusive of the cost of new electric vehicle infrastructure and
assumes no government funding. The Group expects to utilise hydrogen vehicles in the transition to zero emission fleet in long haul
coach services and, whilst hydrogen vehicle technology is not currently as well developed as electric, the Group assumes that total cost
of ownership for these vehicles will also be no worse than at parity with their diesel equivalents.
− The Group already has ambitious targets for the transition to zero emission fleets. These targets are expected to result in the Group
having a zero emission fleet before any potential ban on diesel vehicles is imposed by governments. The Group has assessed a very low
the risk of the current fleet having a net book value higher than their residual value at the Group’s targeted transition dates and therefore
no changes to the useful economic lives of the Group’s current fleet are required, see note 15 for further details.
− The opportunity from modal shift from private cars to public transport is potentially very material as central governments, transport
authorities and city councils introduce measures to tackle congestion, pollution and emissions. This opportunity has not currently been
factored into the projections.
Sensitivities to key and other assumptions
The sensitivity analysis below has been presented in the interests of transparency only. It is not believed that any reasonably possible
movement in key and other assumptions will lead to an impairment.
(i) North America
For North America, sensitivity analysis has been completed on each key assumption in isolation. This indicates that the value in use of the
North America division will be equal to its carrying value, with an increase in the pre-tax discount rate of 250 basis points (2020: 210 basis
points) or a reduction in the growth rates used to extrapolate cash flows into perpetuity of 270 basis points (2020: 220 basis points).
In addition, for North America, a reduction in operating profit margin of 360 basis points (2020: 280 basis points) will result in the value in
use of the division being equal to its carrying amount.
(ii) ALSA
For ALSA, sensitivity analysis on each key assumption indicates that the value in use will be equal to its carrying amount following an
increase in the pre-tax discount rate of 170 basis points (2020: 110 basis points) or a reduction in growth rates used to extrapolate cash
flows into perpetuity of 170 basis points (2020: 110 basis points).
A reduction in ALSA’s operating profit margin of 250 basis points (2020: 160 basis points) will result in the value in use of the division being
equal to its carrying amount.
The Directors have concluded that there is no risk of impairment for the UK and have not provided sensitivity disclosure required by IAS 36.
The Directors consider the assumptions used to be consistent with the historical performance of each cash-generating unit and to be
realistically achievable in light of economic and industry measures and forecasts, and therefore that goodwill is not impaired.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
159

160
15 Property, plant and equipment
Included in the carrying value of land and buildings are assets under construction of £3.9m (2020: £nil) in relation to the construction of a
new bus depot in the UK.
The impairment charge includes £6.4m (2020: £67.5m) which arose following strategic reviews in the UK division and £1.2m (2020: £3.2m)
with respect to assets relating to onerous contracts in the ALSA division. The total impairment charge of £7.6m is included in separately
disclosed items in the Income Statement, see note 5 for further information.
Depreciation on public service vehicles is calculated using the straight-line method to write off the cost or fair value at acquisition of each
asset to its residual value over its estimated useful life (or lease term, if shorter). The estimated useful lives for owned public service vehicles
range from 8 to 20 years depending on the type of vehicle. The majority of the Group’s public service vehicles are diesel powered, although
the Group expects that over time, an increasing proportion of its vehicle fleet will be zero emission; likely to be a combination of electric
and hydrogen powered vehicles. The actual useful lives of diesel powered vehicles could be affected by measures taken by governments to
tackle climate change by restricting the use of such vehicles.
Whilst governments across the Group’s geographical locations are consulting on a date after which the sale of new diesel powered vehicles
will be prohibited, at this time there is no set date from which diesel vehicles are prohibited from being used. The estimated useful lives
applied are consistent with the previous year and, taking account of the latest proposals from governments and our own internal targets (as
described in the Strategic Report page x), the Directors consider that those estimates of useful lives remain appropriate.
Other than in UK Bus, the carrying value of vehicles in each of the Group’s divisions at the targeted date of transition to a fully zero
emission fleet is £nil. In UK Bus, where the target date is 1 January 2030, the remaining net book value of existing diesel vehicles at
transition is estimated to be £35m, assuming no change to the useful lives. Considering that our transition target is significantly ahead of
the earliest expected date that the UK government would ban the use of diesel vehicles and also that the vehicles impacted are Euro 6
diesel buses (the most environmentally friendly variant of diesel vehicles), the Directors consider that they will be able to recover such value
through their sale. However in a more extreme scenario, assuming the vehicles were not able to be sold and that the residual value was nil
at transition, a £4m increase in the annual depreciation charge would be required from 1 January 2022.
Also assuming a scenario whereby no diesel powered vehicle could be used by the Group after 31 December 2034, then the annual
depreciation expense from 1 January 2022 would be £0.5m higher in addition to above.
Details of leased assets included within property, plant and equipment are provided in note 35.
Land
and
buildings
£m
Public
service
vehicles
£m
Plant and
equipment,
fixtures
and fittings
£m
Total
£m
Cost:
A
t 1 January 2021 313.6 2,194.3 187.3 2,695.2
A
cquisitions 0.5 – – 0.5
A
dditions 33.7 99.3 8.3 141.3
Disposals
(18.4) (125.4) (7.6) (151.4)
A
ssets transferred to held for sale – (8.4) – (8.4)
Reclassifications
(4.2) 0.7 – (3.5)
Foreign exchange
(4.6) (25.3) (4.1) (34.0)
A
t 31 December 20
2
1 320.6 2,135.2 183.9 2,639.7
Depreciation:
A
t 1 January 2021 140.8 1,186.8 134.4 1,462.0
Charge for the year
31.9 155.0 12.8 199.7
Disposals
(13.9) (108.4) (7.2) (129.5)
Impairments
1.2 6.4 – 7.6
A
ssets transferred to held for sal
e
– (7.4) – (7.4)
Reclassifications
(4.5) 0.8 (0.9) (4.6)
Foreign exchange
(2.0) (12.0) (3.7) (17.7)
A
t 31 December 2021 153.5 1,221.2 135.4 1,510.1
Net book value:
A
t 31 December 20
2
1 167.1 914.0 48.5 1,129.6
A
t 1 January 2021
172.8 1,007.5 52.9 1,233.2
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
160

161
15 Property, plant and equipment continued
Land
and
buildings
£m
Public
service
vehicles
£m
Plant and
equipment,
fixtures
and fittings
£m
Total
£m
Cost:
At
1 January 2020 323.6 2,085.5 187.0 2,596.1
A
cquisitions 3.3 9.1 0.6 13.0
A
dditions 28.1 172.6 9.2 209.9
Disposals (22.2) (71.6) (12.8) (106.6)
A
ssets transferred to held for sal
e
(21.8) – – (21.8)
Reclassifications – – – –
Foreign exchange 2.6 (1.3) 3.3 4.6
A
t 31 December 2020 313.6 2,194.3 187.3 2,695.2
Depreciation:
A
t 1 January 2020 116.8 1,004.8 126.3 1,247.9
Charge for the year 33.8 173.9 15.9 223.6
Disposals (11.3) (51.7) (11.4) (74.4)
Impairments 4.8 65.5 0.4 70.7
A
ssets transferred to held for sal
e
(3.0) – – (3.0)
Reclassifications – – – –
Foreign exchange (0.3) (5.7) 3.2 (2.8)
A
t 31 December 2020 140.8 1,186.8 134.4 1,462.0
Net book value:
A
t 31 December 2020 172.8 1,007.5 52.9 1,233.2
At
1 January 2020 206.8 1,080.7 60.7 1,348.2
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
161

162
16 Subsidiaries
The companies listed below include all those which principally affect the results and net assets of the Group. A full list of subsidiaries,
joint ventures and associates is disclosed in note 40, along with the addresses of their registered offices. The principal country of
operation in respect of the companies below is the country in which they are incorporated.
National Express Group PLC is the beneficial owner of all the equity share capital, either itself or through subsidiaries, of the companies.
Incorporated in England and Wales
National Express Limited Operation of coach services
The Kings Ferry Limited Operation of coach services
West Midlands Travel Limited Operation of bus services
Incorporated in the United States
Durham School Services LP Operation of school bus services
Petermann Ltd Operation of school bus services
National Express Transit Corporation Operation of transit bus services
National Express Transit Services Corporation Operation of transit bus services
WeDriveU Inc. Operation of shuttle services
Incorporated in Canada
Stock Transportation Limited Operation of school bus services
Incorporated in Spain
General Tecnica Industrial S.L.U.
1
Holding company for operating companies
NEX Continental Holdings S.L. Holding company for operating companies
Incorporated in Morocco
Groupe Alsa Transport S.A. Operation of bus services
Transport de Voyageurs en Autocar Maroc S.A. Operation of bus services
A
lsa Tanger S.A. Operation of bus services
A
lsa City Agadir S.A. Operation of bus services
A
lsa Citybus Raba
t
-Salé-Temara Operation of bus services
A
ls
a
Al Baida S.A Operation of bus services
1
The main holding companies of the ALSA Group
Incorporated in Germany
National Express Rail GmbH Operation of train passenger services
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
162

163
17 Non-current financial assets
Further information on the Group’s use of derivatives is included in note 31.
Financial assets at fair value through Other Comprehensive Income
The principal financial assets at fair value through Other Comprehensive Income are as follows:
Financial assets at fair value through Other Comprehensive Income comprise holdings in equity shares of non-listed companies. The Group
elected to designate the non-listed equity investments at fair value through Other Comprehensive Income as the Group considers these
investments to be strategic in nature.
The fair value measurement of non-listed equity investments is categorised within Level 3 (i.e. the fair values are determined by reference
to significant unobservable inputs), with the fair value of the two most significant investments totalling £13.9m at 31 December 2021 (2020:
£12.1m). For the first of these, the fair value was determined using recent earnings. A 10% increase/(decrease) in earnings would result in a
£0.7m increase/(decrease) respectively in the fair value of the investment. For the second investment, the fair value was determined using
an estimate of the discounted future cash flows. Future cash flows are estimated based on inputs including passenger growth, consumer
price inflation and operating margin. The fair value is most sensitive to changes in inflation assumptions. A 2% increase in inflation would
result in a £5.9m increase in fair value, and a 2% decrease in inflation would result in a £4.7m decrease in the fair value of the investment.
No strategic investments were disposed of during 2020, and there were no transfers of any cumulative gain or loss within equity relating
to these investments. No dividends were received from the investments during 2021 (2020: £nil).
2021
£m
2020
£m
Financial assets at fair value through Other Comprehensive Income – unlisted ordinary shares 13.9 12.9
Derivative financial instruments – fuel derivatives 9.1 0.4
Derivative financial instruments – cross currency swaps 9.6 1.0
Derivative financial instruments included in non-current assets 18.7 1.4
Total non-current financial instruments 32.6 14.3
Derivative financial instruments – fuel derivatives 20.3 0.4
Derivative financial instruments – interest rate derivatives 0.1 1.5
Derivative financial instruments – cross currency swaps 2.4 2.2
Derivative financial instruments – foreign exchange derivatives 8.2 40.8
Derivative financial instruments included in current assets 31.0 44.9
2021
£m
2020
£m
Fair value:
At
1 January 12.9 14.2
A
dditions in the year 0.2 –
Fair value movement in the year 1.2 (1.6)
Foreign exchange (0.4) 0.3
A
t 31 December 13.9 12.9
Name Segment
2021
Proportion
held
%
2020
Proportion
held
%
Metros Ligeros de Madrid, S.A. ALSA 15 15
Transit Technologies Holdco North America 8.8 8.8
Other small investments within ALSA ALSA 1-16 1-16
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
163

164
18 Investments accounted for using the equity method
Investments accounted for using the equity method are as follows:
The Group’s share of post-tax results from associates and joint ventures accounted for using the equity method is as follows:
(a) Investments in joint ventures
The Group has one interest in a joint venture as follows:
The summarised financial information for the joint venture is set out below:
A reconciliation of the above summarised information to the carrying amount in the Group’s Financial Statements is as follows:
2021
£m
2020
£m
Joint ventures 9.0 9.9
A
ssociates 4.7 5.7
Total investments accounted for under the equity method 13.7 15.6
2021
£m
2020
£m
Share of joint venture’s profit/(loss) 0.1 (0.5)
Share of associates’ loss (1.1) (1.6)
Total share of results from associates and joint ventures (1.0) (2.1)
Name Country of registration Activity Proportion held %
2021 2020
Bahrain Public Transport Company W.L.L. Kingdom of Bahrain Operation of bus services 50 50
Bahrain Public Transport
Company W.L.L.
Share of the joint venture’s Balance Sheet and results
2021
£m
2020
£m
Non-current assets 8.0 11.1
Current assets 5.4 5.8
Share of gross assets 13.4 16.9
Non-current liabilities (0.8) (2.8)
Current liabilities (3.6) (4.2)
Share of gross liabilities (4.4) (7.0)
Net assets 9.0 9.9
Revenue 5.0 5.8
Operating profit 0.5 0.6
Profit/(loss) after tax 0.1 (0.5)
Profit/(loss) for the year and total comprehensive income 0.1 (0.5)
Bahrain Public Transport
Company W.L.L.
2021
£m
2020
£m
Group share of net assets of the joint venture 9.0 9.9
Carrying amount 9.0 9.9
Dividends received from the joint venture 1.0 –
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
164

165
18 Investments accounted for using the equity method continued
(b) Investments in associates
The Group’s interests in associates are as follows:
ALSA’s associates are generally involved in the operation of coach and bus services, management of bus stations and similar operations.
North America associates include a start-up company offering app-based rideshare and childcare services in the San Francisco area and
a software company which provides scheduling, dispatch and time management functions in the student transportation sector.
The summarised aggregated financial information for individually immaterial associates is set out below:
19 Business combinations, disposals and assets held for sale
(a) Acquisitions – ALSA
During the period, the ALSA division acquired 100% control of Transportes Rober Group, a provider of urban bus services in Granada,
Spain.
The provisional fair values of the assets and liabilities acquired were as follows:
As permitted by IFRS 3 ‘Business Combinations’, the fair value of acquired identifiable assets and liabilities have been presented on a
provisional basis. The fair value adjustments will be finalised within 12 months of the acquisition date, principally in relation to the valuation
of intangible assets.
Trade and other receivables had a fair value and a gross contracted value of £24.7m. The best estimate at acquisition date of the
contractual cash flows not to be collected was £0.1m.
Goodwill of £14.0m arising from the acquisition consists of certain intangibles that cannot be separately identified and measured due to
their nature. This includes control over the acquired business and increased scale in our operations in ALSA, along with synergy and growth
benefits expected to be achieved in consolidating the regional and urban bus market in Granada. None of the goodwill recognised
is expected to be deductible for income tax purposes.
Included in the consideration shown above is deferred contingent consideration of £5.6m. The Group is required to pay contingent
consideration on renewal of contracts and other post-closing conditions, with a minimum expected undiscounted payment of £nil and
maximum expected undiscounted payment of £5.6m. Based on projections, the Group expects the maximum amount to be paid. The
amount recognised is undiscounted as the effect of discounting is not material.
Name
Country of
registration
Proportion
held %
A
LSA associates Spain17-80
North America associates North America 20
2021
£m
2020
£m
Share of operating loss (1.1) (1.6)
Share of loss for the year and total comprehensive income and expenditure (1.1) (1.6)
£m
Intangibles
7.1
Property, plant and equipment 0.5
Inventory
0.4
Trade and other receivables
24.6
Cash and cash equivalents
0.2
Borrowings
(2.0)
Trade and other payables
(16.6)
Deferred tax liability
(1.0)
Provisions
(0.6)
Net assets acquired
12.6
Goodwill 14.0
Total consideration
26.6
Represented by:
Cash consideration 21.0
Deferred contingent consideration 5.6
26.6
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
165

166
19 Business combinations, disposals and assets held for sale continued
The acquired business contributed £18.4m of revenue and a £1.5m profit to the Group’s result for the period between the date of
acquisition and the balance sheet date. Had the acquisition been completed on the first day of the financial year, the Group’s revenue for
the year would have been £2,183.8m and the Group’s operating loss would have been £37.9m.
(b) Acquisitions – further information
Deferred consideration of £0.6m was paid in the period relating to acquisitions in ALSA in earlier years. Total cash outflow in the period
from acquisitions in ALSA was £21.4m, comprising consideration for current year acquisitions of £21.0m and deferred consideration of
£0.6m, less cash acquired in the businesses of £0.2m.
In North America and the UK deferred consideration of £10.1m and £2.3m respectively was paid in the period relating to acquisitions
in earlier years.
Total acquisition transaction costs of £0.1m were incurred in the year to 31 December 2021 (2020: £0.4m).
The Group measures deferred contingent consideration at fair value through profit and loss and by reference to significant unobservable
inputs i.e. classified as Level 3 in the fair value hierarchy. The significant unobservable inputs used to determine the fair value of the
contingent purchase consideration are typically forecast earnings or estimating the likelihood that contracts will be renewed over a fixed
period. The fair value movement in deferred contingent consideration in the year is as follows:
(c) Disposals
On 31 December 2020, the Group disposed of its 100% interest in Tayside Public Transport Co Limited, a provider of bus transportation
services in Dundee, Scotland, in exchange for cash. A loss of £0.1m was recognised and comprised gross cash consideration of £11.8m
less transaction costs of £1.3m, working capital adjustment of £0.4m and net assets of £10.2m. During 2020, total cash inflow from the
disposal was £7.2m, comprising consideration of £11.8m, less transaction costs settled of £0.1m and cash disposed in the business
of £4.5m. During 2021, the Group finalised the closing accounts resulting in an increase of the original gain of £0.3m, which has been
recognised in separately disclosed items during the year for consistency. Transaction expenses totalling £0.6m were settled during 2021.
Total cash outflow in the year from the disposal was £0.9m. No further cash flows are expected in 2022.
(d) Assets held for sale
In ALSA, a building with a carrying value of £17.6m (2020: £18.8m) and in the UK, public service vehicles with a carrying value of £1.0m
(2020: £nil) met the held for sale criteria of IFRS 5 at 31 December 2021.
Fair value:
2021
£m
2020
£m
A
t 1 January 28.8 49.0
A
dditions in the year 5.6 7.5
Payments during the year (13.0) (27.3)
Fair value movement in the year (7.9) (1.2)
Foreign exchange (0.1) 0.8
A
t 31 December 13.4 28.8
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
166

167
20 Non-current assets – trade and other receivables
Contract assets have increased primarily in ALSA and North America due to the recognition of infrastructure assets for public service
vehicles where the concession grantor guarantees the contract performance in accordance with IFRIC 12 ‘Service Concession
Arrangements’. Note 38 includes further details of the Group’s service concession arrangements. In addition, contract assets includes
amounts in Germany that are expected to be settled after 12 months.
Other receivables includes £5.5m (2020: £nil) of property disposal proceeds that are payable to the Group on vacant possession and £5.0m
(2020: £nil) of insurance recoveries.
21 Inventories
The movement on the provision for slow moving and obsolete inventory is immaterial.
22 Current assets – trade and other receivables
Trade receivables excludes £48.5m (2020: £33.3m) that was subject to factoring arrangements without recourse and for which no customer
payment had been received at year end.
Contract assets have increased primarily in ALSA due to the recognition of infrastructure assets for public service vehicles where the
concession grantor guarantees the contract performance in accordance with IFRIC 12 ‘Service Concession Arrangements’.
During 2019 the Group entered into an asset exchange transaction in the UK, in which it swapped an existing property for a new piece of
land and a funding arrangement to construct a new property. The funding of the new property was contingent on planning permission being
received, about which there was no certainty and therefore consideration was constrained to the fair value of the new piece of land. At 31
December 2020, the Group has assessed that planning permission was highly probable and as a result recognised a receivable (included in
other receivables) representing the funding due to the Group for construction of the new property. During the current year construction has
commenced and a portion of the receivable unwound and a new property asset has been recognised in property, plant and equipment. At
31 December 2021, the receivable outstanding was £8.6m (2020: £12.5m).
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
Information about the credit risk exposure of the Group’s trade receivables is shown in note 30.
2021
£m
2020
£m
Contract assets 128.1 85.2
Prepayments 6.7 4.6
Other receivables 12.3 1.9
147.1 91.7
2021
£m
2020
£m
Raw materials and consumables
28.8 27.0
2021
£m
2020
£m
Trade receivables 190.5 157.8
Grant receivables 58.0 71.4
Contract assets 97.1 80.8
A
mounts due from associates and joint ventures (note 37) 3.2 3.6
A
mounts due from other related parties (note 37) 1.2 1.3
Trade and grant receivables and contract assets 350.0 314.9
Less: provision for impairment of receivables (39.3) (46.3)
Trade and grant receivables and contract assets – net (note 30) 310.7 268.6
Other receivables 78.1 76.0
Prepayments 38.1 46.7
A
ccrued income 1.4 0.4
428.3 391.7
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
167

168
23 Cash and cash equivalents
1
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
Included within cash and cash equivalents are certain amounts which are subject to contractual or regulatory restrictions, or withholding
tax levied on repatriation of cash. These amounts held are not readily available for other purposes within the Group and total £11.9m
(2020: £24.5m).
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements
of the Group and earn interest at the agreed short-term floating deposit rate. The fair value of cash and cash equivalents is equal to the
carrying value.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents and bank overdrafts in notional cash pooling
arrangements are presented net. Bank overdrafts form an integral part of the group’s cash management strategy as they arise from the
Group’s cash pooling arrangement with its bank. Net cash and cash equivalents comprise as follows:
1
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
24 Current liabilities – trade and other payables
1
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings – see note 2 for further information
Trade payables are normally settled on 30 to 60 day terms and other payables have an average term of four months.
Contract liabilities represent amounts advanced by customers where the Group has not yet met the performance obligation to allow the
recognition of the balance as revenue, for example season ticket or advance ticket sales which cross over the year end date or payments
on account. It also includes amounts outstanding with respect to the purchase of infrastructure assets under IFRIC 12 arrangements.
Contract liabilities have primarily increased year-on-year in ALSA and North America due to liabilities associated with the purchase of
infrastructure assets which are expected to be settled within the next 12 months, and in Germany, due to payments on account having
been receipted prior to completion of our performance obligations.
Other payables includes £103.0m (2020: £204.0m) for the purchase of property, plant and equipment. The Group settles these amounts
in accordance with the supplier’s standard payment terms, typically one year.
Other payables also includes deferred fixed asset grants from government or other public bodies of £2.8m (2020: £1.6m), deferred
expense-related grants (inclusive of CERTS in North America) of £39.0m (2020: £nil) and £2.4m (2020: £15.8m) of deferred contingent
consideration for businesses acquired, of which £nil (2020: £2.5m) relates to businesses acquired in the year (note 19).
2021
£m
(Restated)
2020
1
£m
Cash at bank and in hand
268.1 241.2
Overnight deposits 0.4 49.7
Other short-term deposits
239.9 338.9
Cash and cash equivalents
508.4 629.8
2021
£m
(Restated)
2020
1
£m
Cash at bank and in hand
508.4
629.8
Bank overdrafts (note 28)
(132.2) (109.3)
Net cash and cash equivalents
376.2
520.5
2021
£m
(Restated)
2020
1
£m
Trade payables
209.0
231.2
Contract liabilities
130.8
25.9
A
mounts owed to associates and joint ventures (note 37)
0.5
0.7
A
mounts owed to other related parties (note 37)
1.3
1.5
Other tax and social security payable
39.7
33.5
A
ccruals and deferred income
230.2
236.3
Other payables
158.5
236.4
Put liability
17.7
17.5
787.7
783.0
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
168

169
25 Other non-current liabilities
Contract liabilities have primarily increased year-on-year in ALSA due to liabilities associated with the purchase of IFRIC 12 infrastructure
assets which are expected to be settled over the life of the contract.
Other payables includes £11.0m (2020: £13.0m) of deferred contingent consideration for businesses acquired, of which £5.6m (2020:
£5.0m) relates to businesses acquired in the year (note 19), expense related grants of £7.3m (2020: £nil) and £1.3m (2020: £85.6m) for the
purchase of property, plant and equipment where standard payment terms are 18 months.
The put liability has been derived from an internal valuation, using forecast earnings over the exercise period (consistent with the base case
projections used for going concern) and discounted at a rate of 0.6%. The first tranche of options, over 10% of the equity of WeDriveU,
was settled during 2021. The second tranche, for a further 10% of the equity has been exercised during 2021, and will be settled during
2022. This element of the liability has been recorded in current liabilities (note 24). The remaining option, over 20% of equity will be
exercised at the final opportunity, being 31 December 2022. Consistent with our analysis on page 133, the valuation is no longer
considered to be a significant estimate.
26 Provisions
Claims provision
The claims provision arises from estimated exposures at the year end for auto and general liability, workers’ compensation and
environmental claims, the majority of which will be utilised in the next five years. It also includes provision for employee compensation
claims that in the prior year was treated as separately disclosable. It comprises provisions for claims arising in the UK and North America.
Onerous contracts
Provisions for onerous contracts relate to loss making contracts in ALSA, North America, Germany and UK. With the exception of the
provision in Germany, the remaining amounts are expected to be utilised within the next 12 months. The provision in Germany is in respect
of the Rhine-Ruhr Express contract and is expected to be utilised over the contracts remaining term of nine years. The Group’s latest
assessment identified a reduction in the contracts profitability, and accordingly a provision of £23.1m (2020: £nil) was recognised during
the year (see note 5 for further details).
Other
Other includes a provision for a potential reclaim of subsidies in ALSA of £16.0m (2020: £6.5m) all of which is expected to be utilised over
the next three years, provisions for potential litigation of £4.1m (2020: £3.6m) expected to be utilised in the next five years and restructuring
provisions in the UK, ALSA and North America of £6.4m (2020: £2.8m), all of which is expected to be utilised within the next 12 months.
When the effect is material, provisions are discounted to their net present value.
2021
£m
2020
£m
Deferred fixed asset grants 19.3 27.1
Contract liabilities 44.8 24.2
Other payables 19.6 105.9
Put liability 40.1 45.5
123.8 202.7
Claims
provision
£m
Onerous
contract
provisions
Other
£m
Total
£m
A
t 1 January 2021 80.7 38.0 17.2 135.9
Charged to the Income Statement 23.4 32.0 26.6 82.0
A
mounts settled through insurers 13.2
– –
13.2
Utilised in the year
(35.9) (28.6) (9.7) (74.2)
Unwinding of discount
2.5
– –
2.5
A
cquired in business combinations – – 0.6 0.6
Exchange difference
0.5 (1.7) (1.0) (2.2)
A
t 31 December 2021 84.4 39.7 33.7 157.8
Current 31 December 2021 47.6 24.8 16.6 89.0
Non-current 31 December 2021 36.8 14.9 17.1 68.8
84.4 39.7 33.7 157.8
Current 31 December 2020 40.7 28.7 11.7 81.1
Non-current 31 December 2020 40.0 9.3 5.5 54.8
80.7 38.0 17.2 135.9
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
169

170
27 Deferred tax
Based on current capital investment plans, the Group expects to be able to claim capital allowances in excess of depreciation in future
years at a similar level to the current year.
Deferred tax assets
2021
£m
2020
£m
A
ccelerated tax depreciation (83.2) (112.7)
Losses carried forward 194.9 202.8
Pensions 23.0 24.9
Other short-term temporary differences 15.9 25.5
150.6 140.5
The UK, US and German businesses are included in deferred tax assets of £150.6m and the Spanish and Canadian businesses are
included in deferred tax liabilities of £39.2m.
The deferred tax assets relating to losses carried forward are £217.0m (2020: £225.6m). This comprises £194.9m (2020: £202.8m) within
deferred tax assets and £22.1m (2020: £22.8m) within deferred tax liabilities.
The Group has recognised deferred tax assets across the UK, USA, Spanish and German businesses amounting to £303.4m (2020:
£294.8m) that are considered to be able to be offset against the Group’s future taxable profits. Management has based its assessment on
the latest forecast budget approved by the Board, which reflects improved trading performance across all divisions largely due to the
expansion of the business. The forecast budgets used were consistent with those used in the Group’s going concern and viability
assessments.
2021
£m
2020
£m
A
t 1 January 99.8 (24.6)
Credit to the Income Statement (note 11) 26.3 117.9
(Charge)/credit to Other Comprehensive Income or Equity
(7.0) 15.0
Exchange differences
2.4 (6.7)
A
cquired in business combinations (note 19) (1.0) (2.1)
A
cquired in business combinations – adjustment to goodwill (note 14) (9.1) –
Disposed in business combinations – 0.3
Net deferred tax asset at 31 December 111.4 99.8
Deferred tax liabilities
2021
£m
2020
£m
A
ccelerated tax depreciation (108.8) (82.3)
Losses carried forward 22.1 22.8
Intangibles and deductible goodwill 2.5 8.2
Taxation credits 1.8 2.0
Other short-term temporary differences 43.2 8.6
(39.2) (40.7)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
170

171
28 Borrowings and derivative financial liabilities
1
Restated for the change in presentation of advance factoring liabilities from other payables to borrowings. See note 2 for further information
2
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
An analysis of interest-bearing loans and borrowings is provided in note 29. Further information on derivative financial instruments
is provided in note 31.
2021
£m
(Restated)
2020
1,2
£m
Non-current
Bank loans 90.8 20.4
Bonds 640.9 647.0
Lease liabilities 168.7 239.7
Private placements 393.9 405.9
Non-current borrowings 1,294.3 1,313.0
Fuel derivatives 0.2 3.9
Cross currency swaps 5.2 6.7
Interest rate derivatives 5.7 –
Non-current derivative financial instruments 11.1 10.6
Non-current borrowings and derivative financial liabilities 1,305.4 1,323.6
Current
Bank overdrafts 132.2 109.3
Bank loans 100.3 83.8
Lease liabilities 67.0 86.5
Private placements – 70.9
A
ccrued interest on borrowings 2.8 4.1
Current borrowings 302.3 354.6
Fuel derivatives 0.5 17.0
Cross currency swaps 4.5 –
Interest rate derivatives 0.7 –
Foreign exchange derivatives 18.8 6.0
Current derivative financial instruments 24.5 23.0
Current borrowings and derivative financial liabilities 326.8 377.6
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
171

172
29 Interest-bearing borrowings
The effective interest rates on loans and borrowings at the balance sheet date were as follows:
1
Restated for the change in presentation of advance factoring liabilities from other payables to borrowings. See note 2 for further information
2
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
The Group currently has £495.0m of unsecured committed revolving credit facilities, of which £15.0m matures in 2024 and £480.0m
matures in 2025. At 31 December 2021, there was £nil (2020: £nil) drawn down on the facilities, with £1.5m of capitalised deal fees
remaining and which are classified within other receivables.
Details of the Group’s interest rate risk management strategy and associated interest rate derivatives are included in notes 30 and 31.
The Group is subject to a number of financial covenants in relation to its syndicated credit facilities which, if contravened, could result in its
borrowings under those facilities becoming immediately repayable. These covenants specify maximum covenant net debt to EBITDA and
minimum EBITDA to net interest payable. In light of the impact of the pandemic on EBITDA generation, the Group has renegotiated its
covenants to obtain waivers or amendments on its gearing and interest cover covenant tests.
During 2021, the gearing covenant was waived by the lenders for the 30 June 2021 and 31 December 2021 periods, and the interest cover
covenant was amended to 1.5x and 2.5x for the 30 June 2021 and 31 December 2021 periods respectively.
For 2022, the gearing covenant is amended to 5.0x for both the 30 June 2022 and 31 December 2022 tests, with no amendment to the
interest cover covenant.
2021
£m Maturity
Effective
interest rate
(Restated)
2020
1,2
£m Maturity
Effective
interest rate
Bank overdrafts
2
132.2 – – 109.3 – –
Bank overdrafts 132.2 109.3
7-year Sterling bond 400.1 November 2023 2.54% 400.1 November 2023 2.54%
9-year Sterling bond 240.8 November 2028 GBP SONIA + 1.98% 246.9 November 2028 2.38%
Bonds 640.9 647.0
European bank loans at fixed rate 2.42022-2025 2.03% 2.72021-2025 1.53%
European bank loans at floating rate 10.8 2022-2025 EURIBOR + 0.86% – – –
Moroccan bank loans 26.0 2022-2026 4.28% 4.92021-2022 4.66%
US asset backed bank loans 74.0 2022-2029 2.28% 18.3 2021-2027 2.46%
A
dvance factoring liabilities
1
77.9 2022 0.99% 78.3 2021 0.99%
Bank loans 191.1 104.2
US Dollar leases at fixed rate 122.7 2022-2028 3.03% 192.4 2021-2035 3.89%
European leases at fixed rate 19.7 2022-2035 1.43% 29.6 2021-2025 1.13%
European leases at floating rate 2.92022-2024 EURIBOR + 1.00% 4.22021-2024 EURIBOR + 1.00%
Sterling leases at fixed rate 90.4 2022-2037 3.02% 100.0 2021-2037 3.14%
Leases 235.7 326.2
Euro private placement – – – 70.9 August 2021 4.55%
US private placement 393.9 2027-2032 1.92% 405.9 2027-2032 1.92%
Private placements 393.9 476.8
A
ccrued interest – Bonds 2.1 2.1
A
ccrued interest – Private placement 0.7 2.0
A
ccrued interest on borrowings 2.8 4.1
Total 1,596.6 1,667.6
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
172

173
29 Interest-bearing borrowings continued
The following table sets out the carrying amount, by maturity, of the Group’s interest-bearing borrowings and deposits, including other debt
receivables and finance lease receivables:
A
s at 31 December 2021
< 1 year
£m
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
> 5 years
£m
Total
£m
Fixed rate
Bank loans
(99.4)
(17.4) (16.0) (16.6) (13.1) (17.8) (180.3)
Bonds
–
(400.1) – – – – (400.1)
Finance lease receivables 4.1 3.8 3.1 1.0 0.5 4.3 16.8
Lease liabilities (65.5) (46.2) (31.9) (17.1) (13.3) (58.8) (232.8)
Private placements – – – – – (393.9) (393.9)
Floating rate
Cash assets 508.4
– – – – –
508.4
Other debt receivables 0.8 0.2
– – – –
1.0
Bank overdrafts (132.2)
– – – – –
(132.2)
Bank loans (0.9) (1.0) (8.7) (0.1) (0.1) – (10.8)
Bonds – – – – – (240.8) (240.8)
Lease liabilities (1.5) (1.0) (0.4) – – – (2.9)
1
Restated for the change in presentation of advance factoring liabilities from other payables to borrowing. See note 2 for further information
2
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
30 Financial risk management objectives and policies
Financial risk factors and management
The Group is exposed to risks relating to fuel prices, foreign currency exchange rates, interest rates and the availability of funding at
reasonable margins. The Group has in place a risk management programme that seeks to manage the impact of these risks on the financial
performance of the Group by using financial instruments including borrowings, committed facilities and forward foreign exchange, fuel and
interest rate derivatives.
The Board of Directors has delegated the responsibility for implementing the financial risk management policies laid down by the Board
to the Group Finance Director and the Group Treasurer. The policies are implemented by the Group Treasury department with regular
reporting to the Group Finance Director and the Audit Committee on its activities.
Foreign currency
The Group has major foreign operations in the USA, Canada, Spain and Morocco, and as a result is exposed to the movements in foreign
currency exchange rates on the translation of these foreign currency denominated net assets.
The Group seeks to reduce this foreign currency exchange movement risk by using a combination of foreign currency borrowings and
entering into derivative financial instruments such as cross currency interest rate swaps and foreign exchange forward contracts.
At the year end, the Group had outstanding foreign exchange derivatives for net investment purposes of USD 202.2m, CAD 46.2m and EUR
154.4m, and cross currency interest rate swaps of USD 350.0m and EUR 222.7m. These foreign exchange forward contracts and cross
currency interest rate swaps are derivative financial instruments designated as net investment hedges of foreign currency assets. The
effective portion of the gain or loss on the hedge is recognised in the Group Statement of Comprehensive Income and recycled to the
Income Statement at the same time as the underlying hedged net assets affect the Income Statement. Any material ineffectiveness is taken
to the Income Statement.
(Restated)
A
s at 31 December 2020
1,2
< 1 year
£m
1-2 years
£m
2-3 years
£m
3-4 years
£m
4-5 years
£m
> 5 years
£m
Total
£m
Fixed rate
Bank loans
1
(83.6) (6.2) (3.1) (2.7) (2.9) (4.4) (102.9)
Bonds – – (400.1) – – (246.9) (647.0)
Finance lease receivables 4.3 3.6 3.3 2.4 1.0 0.3 14.9
Lease liabilities (85.0) (64.9) (47.4) (33.6) (17.6) (73.5) (322.0)
Private placements (70.9) – – – – (405.9) (476.8)
Floating rate
Cash assets
2
629.8 – – – – – 629.8
Other debt receivables 1.2 – – – – – 1.2
Bank overdrafts
2
(109.3)
– – – – –
(109.3)
Bank loans (0.2) (0.5) (0.6) – – – (1.3)
Lease liabilities (1.5) (1.3) (1.0) (0.4) – – (4.2)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
173

174
30 Financial risk management objectives and policies continued
The Group expects changes in value of both the hedging instrument and the hedged net investment to offset and systematically move
in opposite directions and that there will be a 1:1 hedge ratio, given that the critical terms are closely aligned.
The Group applies the ‘forward rate method’ under IFRS 9 such that the effective portion of changes in fair value of forward points are
retained in Other Comprehensive Income. The currency basis is excluded from the hedging instrument, and the actual currency basis
on inception of the trade is treated as the ‘cost of hedging’ and recognised in profit or loss over the life of the hedging relationship
on a straight-line basis. Any changes in the currency basis since inception will be deferred into a separate component of Other
Comprehensive Income.
In these hedge relationships, the main source of ineffectiveness results from movements in the Group’s or the derivative counterparty’s
credit spread resulting in fair value movements in the hedging instrument that are not reflected in the fair value movements of the hedged
net investment.
The table below demonstrates the sensitivity of the Group’s financial instruments to a reasonably possible change in foreign exchange
rates, with all other variables held constant. This would affect the Group’s profit before tax and translation reserve. The effect on the
translation reserve represents the movement in the translated value of the foreign currency denominated loans and change in fair value
of the derivative contracts. These movements would be offset by an opposite movement in the translated value of the related portion of the
Group’s overseas net investments. It is estimated that a 10% change in the corresponding exchange rates would result in an exchange
gain or loss in the translation reserve of £27.8m (2020: £35.6m).
Interest rate risk
The Group is exposed to movements in interest rates on both interest-bearing assets and liabilities. It is the Group’s policy to maintain an
appropriate balance between fixed and floating interest rates on borrowings in order to provide a level of certainty to interest expense in the
short term and to reduce the year-on-year impact of interest rate fluctuations over the medium term. To achieve the desired fixed:floating
ratio, the Group has entered into a series of interest rate swaps that have the effect of converting fixed rate debt to floating rate debt. The
net effect of these transactions was that as at 31 December 2021, the proportion of the Group’s gross debt at floating rates was 18%
(2020: 7%), with the increase reflecting that the £250.0m bond maturing in 2028 was converted to floating rate debt during the year.
The Group expects changes in value of both the hedging instrument and the hedged transaction to offset and systematically move in
opposite directions and that there will be a 1:1 hedge ratio, given that the critical terms are closely aligned.
In these hedge relationships, the main sources of ineffectiveness are:
− movement in the Group’s and the derivative counterparty’s credit spread, resulting in fair value movements in the hedging instrument
that are not reflected in fair value movements in the hedged transaction; and
− any changes in the critical terms of the hedged transaction such that they no longer match those of the hedging instrument.
The table overleaf demonstrates the sensitivity of the Group’s financial instruments to a reasonably possible change in interest rates, with
all other variables held constant, on the Group’s profit before tax and on the Group’s hedging reserve.
The sensitivity analysis covers all floating rate financial instruments, including the interest rate swaps. If the interest rates applicable
to floating rate instruments were increased by 100 basis points, it is estimated that the Group’s profit before taxation would decrease by
approximately £0.1m relating to the Euro and £0.3m relating to Sterling. The analysis assumes that the amount and mix of floating rate
debt, including finance leases, remains unchanged from that in place at 31 December 2021.
2021 2020
A
s at 31 December
Strengthening/
(weakening)
in currency
Effect
on
(loss)/profit
before tax
£m
Effect on
translation
reserve
£m
Effect
on profit
before tax
£m
Effect on
translation
reserve
£m
US Dollar 10% – (37.0) – (28.5)
Euro 10% – 12.2 – (4.7)
Canadian Dollar 10% – (3.0) – (2.4)
US Dollar (10)% –
37.0
– 28.5
Euro (10)% – (12.2) – 4.7
Canadian Dollar (10)% –
3.0
– 2.4
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
174

175
30 Financial risk management objectives and policies continued
Commodity prices
The Group is exposed to movements in commodity prices as a result of its fuel usage. The Group’s policy is to provide protection against
sudden and significant increases in fuel prices, thus mitigating volatility in both cash and the Income Statement in the short to medium
term. In order to manage the risk exposure, the Group’s normal policy is to enter into fuel derivatives to hedge 100% of estimated fuel
requirements across all divisions for the next 15 months, and additionally to hedge at least 50% of the estimated fuel requirements in the
Spain and North America divisions 15-24 months into the future. However, due to the continued impact of the Covid-19 pandemic and to
mitigate the risk of over-hedging, the Group has held its hedging levels at 90% of budgeted 2022 usage as at 31 December 2021.
The normal hedging programme has continued for future years and as at 31 December 2021 the Group had hedged approximately 54% of
its expected usage in 2023 and 18% of its expected usage in 2024.
During the year hedge accounting was discontinued for a small number of fuel derivatives where volumes were in excess of actual or
expected consumption due to the pandemic. Further information relating to this is given in note 31.
Risk component hedging has been adopted under IFRS 9, such that the hedged price risk component of the purchased fuel matches that
of the underlying derivative commodity. The hedged risk component, being the commodity index of each location where fuel is purchased,
is considered to be separately identifiable and reliably measurable. The use of commodity derivatives to hedge the fuel exposure is
expected to result in a 1:1 hedge ratio as the notional value of the hedging instrument is consistent with the designated amount of the
underlying exposure. In these hedge relationships, the main source of ineffectiveness is changes in the actual settlement date and/or
settlement amount.
Fuel derivatives are designated as cash flow hedges, with the effective portion of changes in fair value of the hedging instrument
being recorded within a separate component of equity, and recycled to the Income Statement as the hedged item impacts the
Income Statement.
The table overleaf demonstrates the effect of a reasonably possible variation in fuel prices, with all other variables held constant, on the
fair value of the Group’s financial instruments and accordingly on the Group’s profit/(loss) before tax and the Group’s hedging reserve.
The sensitivity analysis includes all fuel derivatives. The effect on the hedging reserve arises through movements on the fair value of the
Group’s fuel derivatives. For these derivative contracts the sensitivity of the net fair value to an immediate 10% increase or decrease
in all prices would have been £11.9m at 31 December 2021 (2020: £9.5m). The figure does not include any corresponding economic
advantage or disadvantage that would arise from the natural business exposure which would be expected to offset the gain or loss on
the derivatives.
2021 2020
A
s at 31 December
Increase/
(decrease)
in basis
points
Effect
on
(loss)/profit
before tax
£m
Effect on
reserves
£m
Effect
on profit
before tax
£m
Effect on
reserves
£m
Sterling 100 0.3 – – –
US Dollar 100 – – – –
Euro 100 0.1 – (0.4) –
Sterling (100) (0.3) – 0.4 –
US Dollar (100) – – – –
Euro (100) (0.1) – – –
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
175

176
30 Financial risk management objectives and policies continued
Credit risk
(i) Risk management
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations.
Credit risk is managed by a combination of Group Treasury and divisional management, and arises from cash and cash equivalents,
derivative financial instruments and credit exposures to amounts due from outstanding receivables and committed transactions. The
maximum credit risk exposure of the Group is the gross carrying value of each of its financial assets, which comprises trade and other
receivables of £344.7m (2020: £312.4m), cash and cash equivalents of £508.4m (restated 2020: £629.8m), finance lease receivables of
£16.8m (2020: £14.9m), investments of £13.9m (2020: £12.9m) and derivative financial instruments of £49.7m (2020: £46.3m); as well as its
contract assets of £225.2m (2020: £166.0m).
Credit risk is primarily attributable to trade and other receivables and is mitigated by a number of factors. Many of the Group’s principal
customers, suppliers and financial institutions with which it conducts business are local public (or quasi-public) bodies, including school
boards in North America, municipal authorities in Spain and Morocco, West Midlands Combined Authority in the UK, and regional
authorities in Germany. The Group does not consider these counterparties to pose a significant credit risk. This has been evident
throughout the Covid-19 pandemic, as these counterparties have continued to pay us. Outside of this, the Group does not consider it has
significant concentrations of credit risk. The Group continues to monitor the economic environment in response to the Covid-19 pandemic
and has taken actions to limit its exposure to customers that are severely impacted. As a minimum, the Group has implemented policies
that require appropriate credit checks on potential customers before sales commence.
Net cash and cash equivalents and derivative financial instruments are held with counterparties with a minimum of BBB- credit rating
assigned by international credit rating agencies. The Group Treasury Committee continually assesses the credit risk of each counterparty,
including monitoring credit ratings and tier 1 capital of each counterparty. Additionally, the Group’s policy sets limits on counterparty
exposure according to credit ratings.
(ii) Impairment of financial assets
The Group applies the IFRS 9 simplified approach to measuring expected credit losses for all trade receivables (including grant receivables
and contract assets) at each reporting date. Provision matrices are used to measure expected losses. The provision rates are based on
days past due for groupings of various customer segments with similar loss patterns, such as geographical region, service type, and
customer type and rating. The calculation reflects the probability-weighted outcome and reasonable and supportable information that is
available at the reporting date about past events, current conditions and forecasts of future economic conditions. The characteristics used
to determine the groupings of customer segments are those that have the greatest impact on the likelihood of default. Given the diversity of
characteristics of different customer segments, the Group applies different definitions of default for different groups of customers. The risk
of default increases once the receivable is past due and increases in 30 day increments.
Whilst Covid-19 has continued to impact the Group, it has not given rise to a significant increase in the impairment of trade receivables.
The majority of the Group’s customers are governmental or similar bodies and hence there are not considered to be any issues
with the recoverability of these receivables. Further, there have not been any significant issues with the recoverability of
non-governmental receivables.
2021 2020
A
s at 31 December
Increase/
(decrease)
in price
Effect
on
(loss)/profit
before tax
£m
Effect on
hedging
reserve
£m
Effect
on profit
before tax
£m
Effect on
hedging
reserve
£m
Sterling denominated diesel 10% – 3.6 – 3.0
US Dollar denominated diesel 10% – 2.2 – 1.4
US Dollar denominated gasoline 10% – 1.5 – 1.0
Euro denominated diesel 10% – 4.6 – 4.1
Sterling denominated diesel (10%) – (3.6) – (3.0)
US Dollar denominated diesel (10%) – (2.2) – (1.4)
US Dollar denominated gasoline (10%) – (1.5) – (1.0)
Euro denominated diesel (10%) – (4.6) – (4.1)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
176

177
30 Financial risk management objectives and policies continued
The table below shows the credit risk exposure on the Group’s trade receivables as at 31 December 2021:
Trade receivables over 90 days primarily comprises amounts due from public authorities in ALSA and receivables for school bus services in
North America where amounts are settled on approval from the local governing bodies at the end of the school period. A loss provision of
£35.1m (2020: £42.5m) is in place against these receivables. Given that these are predominantly ongoing contractual relationships and with
public bodies, the Directors believe that the remaining amounts will be collected.
The closing loss allowance for trade receivables as at 31 December 2021 reconciles to the opening loss allowance as follows:
Trade receivables are written off when there is no reasonable expectation of recovery.
Impairment losses on trade receivables are presented as net impairment losses within operating profit or loss. Subsequent recoveries of
amounts previously written off are credited against the same item.
Impairment provisions in respect of cash and cash equivalents and finance lease receivables are also subject to the requirements of IFRS 9.
As our cash and cash equivalents are held with counterparties with a minimum of BBB- credit rating, no impairment loss was identified at
the reporting date. Similarly, no impairment loss was identified in relation to finance lease receivables.
Liquidity risk
Liquidity risk is the risk that the Group, although solvent, will have difficulty in meeting its obligations associated with its financial liabilities
as they fall due.
Funding for the Group is coordinated centrally by the treasury function and with the Group’s forecast funding requirements and its debt
facilities being reported to and monitored on an ongoing basis by the treasury function and formally via the monthly Treasury Committee.
The level of facilities is maintained such that facilities and term loans exceed the forecast peak gross debt of the Group over a rolling
12-month view, with minimum headroom of at least £300.0m maintained, taking into account market conditions and corporate activity,
including acquisitions and organic growth plans. The minimum funding headroom assumes that factoring facilities are not available.
Days past due
31 December 2021
Carrying
amount
£m
Current
£m
Less than
30 days
£m
Between 30
and 60 days
£m
Between
61 and 90
days
£m
Over 90 days
£m
Expected loss rate 8.2% 0.7% 2.5% 2.3% 8.5% 21.9%
Gross carrying amount – trade and grant receivables and
contract assets (current and non-current) 478.1 235.5 52.1 21.8 8.2 160.5
Loss allowance 39.3 1.7 1.3 0.5 0.7 35.1
Days past due
31 December 2020
Carrying
amount
£m
Current
£m
Less than
30 days
£m
Between 30
and 60 days
£m
Between
61 and 90
days
£m
Over 90 days
£m
Expected loss rate 11.6% 0.8% 4.9% 2.9% 22.2% 25.7%
Gross carrying amount – trade and grant receivables and
contract assets (current and non-current) 400.1 199.5 20.6 10.3 4.5 165.2
Loss allowance 46.3 1.5 1.0 0.3 1.0 42.5
2021
£m
2020
£m
A
t 1 January (46.3) (36.4)
Increase in loss allowance recognised in Income Statement during the year (6.4) (10.7)
Utilised in the year 11.5 1.8
A
rising on acquisitions (0.1) (0.2)
Exchange difference 2.0 (0.8)
A
t 31 December (39.3) (46.3)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
177

178
30 Financial risk management objectives and policies continued
Short-term funding requirements are met through use of cash and cash equivalents and drawings under unsecured committed revolving
credit facilities if required. Most of the Group’s cash is held in the UK, the USA and Spain. In the UK the Group utilises a pooling
arrangement with its main relationship bank to manage its cash on a net basis.
Included within cash and cash equivalents are certain amounts which are subject to contractual or regulatory restrictions, or withholding
tax levied on repatriation of cash. These amounts held are not readily available for other purposes within the Group and total £11.9m
(2020: £24.5m).
The Group currently has £495.0m of unsecured committed revolving credit facilities, which mature between 2024 and 2025. At 31
December 2021, there was £nil (2020: £nil) drawn down on the facilities. The maximum draw down of the revolving credit facility during the
year was £nil (2020: £110.0m), with no drawings made during 2021 as a result of the additional liquidity headroom secured following the
emergence of Covid-19 and the cash generated as a result of the share issue and issue of hybrid instrument in 2020.
Medium and long-term funding requirements are met through committed debt facilities as detailed in note 29.
The Group has secured waivers or amendments from its key covenant tests due to the continued impact of Covid-19 on the Group’s
EBITDA generation. In return for these waivers and amendments, during the period they apply the Group must comply with a £250m
minimum liquidity test and a £1.6bn maximum net debt test, both on a pre-IFRS 16 basis. As at 31 December 2021, the Group had £871m
of net cash and undrawn facilities, and therefore continues to have significant headroom on the minimum liquidity test.
The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2021 based on the contractual
undiscounted cash flows including interest cash flows. As such, the amounts in this table will not agree to the carrying amounts disclosed
in the Balance Sheet or other notes. The table includes cash flows associated with derivative hedging instruments. Their amounts reflect
the maturity profile of the fair value liability where the instrument will be settled net, and the gross settlement amount where the pay leg
of a derivative
will be settled separately to the receive leg.
Y
ear ended 31 December 2021
Carrying
amounts
£m
Contractual
cash flows
£m
< 1 year
£m
1-2 years
£m
2-3 years
£m
3-5 years
£m
> 5 years
£m
Non-derivative financial liabilities
Bank overdrafts (132.2) (132.2) (132.2) – – – –
Bank loans (191.1) (196.2) (100.6)(19.9) (25.9) (31.5) (18.3)
Bonds (640.9) (709.5) (15.9) (414.6) (5.9) (11.9) (261.2)
Lease liabilities (235.7) (243.5)(67.1) (45.5) (30.6) (29.3) (71.0)
Private placements (393.9) (420.5) (3.9) (3.9) (3.9) (7.7) (401.1)
Trade and other payables
1
(667.5) (667.5) (615.1) (52.4) – – –
(2,261.3) (2,369.4) (934.8)(536.3) (66.3) (80.4) (751.6)
Derivative financial liabilities
Foreign exchange derivatives (18.8) (18.8) (18.8) – – – –
Interest rate derivatives (6.4) (6.5) (0.6) (2.1) (2.1) (1.7)
–
Cross currency swaps (9.7
) (10.3) (4.4) 0.3 0.3 0.3 (6.8)
Fuel derivatives (0.7) (0.7) (0.4) (0.2) (0.1) – –
(35.6) (36.3) (24.2) (2.0) (1.9) (1.4) (6.8)
1
Trade and other payables as stated in this table does not directly reconcile with the amounts shown in notes 24 and 25 as it excludes contract liabilities, deferred
expense-related grants and deferred fixed asset grants
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
178

179
30 Financial risk management objectives and policies continued
1
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings. See note 2 for further information
2
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information.
3
Trade and other payables as stated in this table does not directly reconcile with the amounts shown in notes 24 and 25 as it excludes contract liabilities, deferred
expense related-grants and deferred fixed asset grants
Capital risk management
The objective of capital management is to ensure that the Group is able to continue as a going concern whilst delivering shareholder
expectations of a strong capital base as well as returning benefits for other stakeholders.
The Group’s capital structure consists of equity (refer to the Group Statement of Changes in Equity) and net debt (refer to note 39).
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
The Group’s debt is monitored on the basis of a gearing ratio, being net debt divided by EBITDA, further details of which are provided in the
Group Chief Financial Officer’s review.
As a consequence of Covid-19 the Group made two significant adjustments to its capital structure in the prior year. In May 2020, the Group
transacted a share issue through an equity placing and raised £230.1m net of fees and in November 2020 the Group issued a £500.0m
sterling denominated hybrid instrument raising a further £495.5m net of fees. Both measures strengthened the Group’s Balance Sheet.
The Group also uses ROCE as a measure of its ability to drive better returns on the capital invested in the Group’s operations, further
details of which are provided in the Group Chief Financial Officer’s review.
31 Financial instruments (including cash, trade receivables and payables)
Fair values
Financial assets at amortised cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market and include trade and other receivables and cash and cash equivalents. After initial fair value recognition, they are measured at
amortised cost using the effective interest rate method. The fair value of these instruments approximates their carrying amounts, largely
due to the short-term maturities.
Financial assets at fair value through Other Comprehensive Income relates to the Group’s non-listed equity investments.
The Group’s derivatives are measured at fair value. Derivatives, other than those designated as effective hedging instruments, are classified
as fair value through profit or loss and are carried on the Balance Sheet at their fair value, with gains or losses recognised in the Income
Statement. Derivatives designated as hedging instruments in an effective hedge are carried on the Balance Sheet at their fair value. For
cash flow hedges and hedges of net investments in foreign operations, the effective portion of the gain or loss on the hedging instrument is
recognised directly in Other Comprehensive Income, while the ineffective portion is recognised in the Income Statement.
(Restated)
Year ended 31 December 2020
1, 2
Carrying
amounts
£m
Contractual
cash flows
£m
< 1 year
£m
1-2 years
£m
2-3 years
£m
3-5 years
£m
> 5 years
£m
Non-derivative financial liabilities
Bank overdrafts
2
(109.3) (109.3) (109.3) – – – –
Bank loans
1
(104.2) (105.8) (84.2) (7.1) (4.1) (6.0) (4.4)
Bonds (647.0) (727.4)(15.9) (15.9) (415.9)(11.9) (267.8)
Lease liabilities (326.2) (342.1)(91.9) (77.5) (62.9) (54.2) (55.6)
Private placements (476.8) (545.0) (81.3) (7.9) (7.9) (15.7) (432.2)
Trade and other payables
1, 3
(906.9) (906.9) (755.5) (151.4) – – –
(2,570.4) (2,736.5) (1,138.1) (259.8)(490.8) (87.8) (760.0)
Derivative financial liabilities
Foreign exchange derivatives (6.0) (6.0) (6.0) – – – –
Cross currency swaps (6.7) (7.0)
0.2
0.2
0.2 0.5 (8.1)
Fuel derivatives (20.9) (21.1) (17.2) (3.4) (0.5) – –
(33.6) (34.1) (23.0) (3.2) (0.3)
0.5
(8.1)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
179

180
31 Financial instruments (including cash, trade receivables and payables) continued
Amounts taken to Other Comprehensive Income are transferred to the Income Statement when the hedged transaction affects profit
or loss or when the foreign operation is sold or partially disposed of. For fair value hedges, all gains or losses are recognised in the
Income Statement.
The fair value measurement of derivative instruments is categorised within Level 2 (i.e. the fair values are derived based on observable
market inputs). The Group has no financial instruments with fair values that are determined by reference to significant unobservable inputs,
i.e. those that would be classified as Level 3 in the fair value hierarchy, other than the deferred contingent consideration disclosed in note
19 and financial assets at fair value through Other Comprehensive Income in note 17. There have not been any transfers of assets or
liabilities between levels of the fair value hierarchy and there are no non-recurring fair value movements.
In August 2021, the Group entered into a series of interest rate swaps equal in value to the £250.0m bond. They are designated as a fair
value hedge of the interest rate risk on the £250.0m bond. These swaps as measured at fair value through profit and loss, with any gains
and losses being taken immediately to the Income Statement to offset any fair value gains or losses due to changes in the risk-free rate
on the £250.0m bond. Consequently, the carrying value of the bond is adjusted for changes in fair value attributable to the risk being
hedged. This net carrying value will differ from the fair value depending on movements in the Group’s credit risk, movements in interest
rates and unamortised fees. At 31 December 2021, the carrying value of the Group’s bonds was £650.0m (2020: £650.0m) and compares
with the fair value as presented in the table below.
All other liabilities, including the remaining bonds, private placements, leases, bank loans and trade and other payables (excluding
contingent consideration) are held at amortised cost. After initial fair value recognition, these instruments are measured at amortised cost
using the effective interest rate method. The carrying value of these liabilities approximates to the fair value.
The following table illustrates the fair values of all financial assets and liabilities held by the Group at 31 December 2021:
1
Trade and other receivables as stated in this table does not directly reconcile with the amounts shown in notes 20 and 22 as it excludes contract assets, prepayments
and provision for impairment of receivables
2
Trade and other payables as stated in this table does not directly reconcile with the amounts shown in notes 24 and 25 as it excludes contract liabilities, deferred
expense-related grants and deferred fixed asset grants
Classification of financial instruments
A
s at 31 December 2021
Assets and
liabilities at
amortised
cost
£m
At fair value
through Other
Comprehensive
Income
£m
Hedged item
at fair value
£m
At fair value
through
profit or loss
£m
Derivatives
used for
hedging
£m
Total
£m
A
ssets
Investments – 13.9 – – – 13.9
Fuel derivatives
– – – – 29.4 29.4
Interest rate derivatives
– – – 0.1 – 0.1
Cross currency swaps
– – – – 12.0 12.0
Foreign exchange derivatives
– – – 6.1 2.1 8.2
Cash and cash equivalents
508.4 – – – – 508.4
Finance lease receivables
16.8 – – – – 16.8
Trade and other receivables
1
344.7 – – – – 344.7
869.9 13.9 – 6.2 43.5 933.5
Liabilities
Bank overdrafts (132.2)
–
– – – (132.2)
Bank loans
(191.1) – – – – (191.1)
Bonds (400.1) – (240.8) – – (640.9)
Lease liabilities
(235.7) – – – – (235.7)
Private placements
(393.9) – – – – (393.9)
Fuel derivatives
– – – – (0.7) (0.7)
Interest rate derivatives
– – – (6.4)
–
(6.4)
Cross currency swaps
– – – – (9.7) (9.7)
Foreign exchange derivatives
– – – (16.0) (2.8) (18.8)
Trade and other payables
2
(654.1) – – (13.4) – (667.5)
(2,007.1) – (240.8) (35.8) (13.2) (2,296.9)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
180

181
31 Financial instruments (including cash, trade receivables and payables) continued
1
Trade and other receivables as stated in this table does not directly reconcile with the amounts shown in notes 20 and 22 as it excludes contract assets, prepayments
and provision for impairment of receivables
2
Trade and other payables as stated in this table does not directly reconcile with the amounts shown in notes 24 and 25 as it excludes contract liabilities, deferred
expense-related grants and deferred fixed asset grants
3
Restated for the change in presentation of advance factoring liabilities from other payables to borrowings. See note 2 for further information
4
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information
Other receivables and other payables are to be settled in cash in the currency they are held in.
The Group assesses at each year end reporting date whether a financial asset or group of financial assets is impaired. In the financial year
2021, there was no objective evidence that would have necessitated the impairment of loans and receivables except the provision for
impairment of receivables (see note 30).
Embedded derivatives
In accordance with IFRS 9 ‘Financial Instruments’, the Group has reviewed its contracts for embedded derivatives that are required to be
separately accounted for. No embedded derivatives have been identified.
Hedging activities
The Group uses derivative financial instruments to manage exposures to market risk, such as movements in foreign exchange rates, fuel
prices and interest rates. Such derivative financial instruments are initially recognised at fair value and are subsequently re-measured at fair
value at the end of each reporting period. In line with IFRS 9, the Group classifies hedges as: (i) fair value hedges used to hedge exposure
to changes in the fair value of a recognised asset or liability; (ii) cash flow hedges used to hedge exposure to variability in cash flows
associated with a recognised asset or liability or a highly probable forecast transaction; and (iii) hedges of a net investment in a
foreign operation.
In 2021, the Group applied cash flow hedge accounting to hedge fuel price risk and to hedge foreign currency risk on a US dollar
denominated private placement. The Group applied net investment hedge accounting to hedge net investments in its North American and
European foreign operations. The Group also applied fair value hedge accounting on a €78.5m private placement until maturity in August
2021, and on the £250.0m bond, to hedge changes in fair value due to interest rate fluctuations.
(Restated)
Classification of financial instruments
A
s at 31 December 2020
3, 4
Assets and
liabilities at
amortised cost
£m
At fair value
through Other
Comprehensive
Income
£m
At fair value
through
profit or loss
£m
Derivatives
used for
hedging
£m
Total
£m
A
ssets
Investments – 12.9 – – 12.9
Fuel derivatives
– – – 0.8 0.8
Interest rate derivatives
– – 1.5 – 1.5
Cross currency swaps
– – – 3.2 3.2
Foreign exchange derivatives
– – 10.6 30.2 40.8
Cash and cash equivalents
4
629.8 – – – 629.8
Finance lease receivables
14.9 – – – 14.9
Trade and other receivables
1
312.4 – – – 312.4
957.1 12.9 12.1 34.2 1,016.3
Liabilities
Bank overdrafts
4
(109.3) – – – (109.3)
Bank loans
3
(104.2) – – – (104.2)
Bonds (647.0) – – – (647.0)
Lease liabilities (326.2) – – – (326.2)
Private placements (476.8) – – – (476.8)
Fuel derivatives – – (2.4) (18.5) (20.9)
Cross currency swaps – – – (6.7) (6.7)
Foreign exchange derivatives – – (6.0) – (6.0)
Trade and other payables
2,3
(878.1) – (28.8) –(906.9)
(2,541.6) – (37.2) (25.2) (2,604.0)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
181

182
31 Financial instruments (including cash, trade receivables and payables) continued
The movement on derivative financial instruments is detailed below:
A reconciliation of movements in the cash flow hedge reserve, cost of hedging reserve and net investment hedge reserve is shown in
note 33.
At fair value through
profit and loss
Derivatives used
for hedging
Fuel
swaps
£m
Interest
rate
swaps
£m
Foreign
exchange
forward
contracts
£m
Fuel
swaps
£m
Interest
rate
swaps
£m
Cross
currency
swaps
£m
Foreign
exchange
forward
contracts
£m
Total
£m
Net (liability)/asset at 1 January 2021 (2.4)1.5 4.6 (17.7) – (3.5) 30.2 12.7
Movements through Income Statement 2.4 (7.8) (5.7) (4.4) – (1.9) – (17.4)
Movements through Other Comprehensive Income – – – 50.8 – 7.7 4.2 62.7
Cash settlements – – (8.8) – – – (35.1) (43.9)
Net asset/(liability) at 31 December 2021 – (6.3) (9.9) 28.7 – 2.3 (0.7) 14.1
At fair value through
profit and loss
Derivatives used
for hedging
Fuel
swaps
£m
Interest
rate
swaps
£m
Foreign
exchange
forward
contracts
£m
Fuel
swaps
£m
Interest
rate
swaps
£m
Cross
currency
swaps
£m
Foreign
exchange
forward
contracts
£m
Total
£m
Net asset/(liability) at 1 January 2020 – 7.3 (20.4) 1.3 (1.0) 5.0 15.6 7.8
Movements through Income Statement (2.4) (5.8) 4.0 31.5 0.6 (0.3) – 27.6
Movements through Other Comprehensive Income – – – (50.5) 0.4 (5.8) 8.9 (47.0)
Cash settlements – – 21.0 – – (2.4) 5.7 24.3
Net asset/(liability) at 31 December 2020 (2.4) 1.5 4.6 (17.7) – (3.5) 30.2 12.7
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
182

183
31 Financial instruments (including cash, trade receivables and payables) continued
A summary of the Group’s hedging activities is as follows:
1
Represents the carrying value of the €240.0m Euro denominated private placements
2
Inclusive of cash settlements for the period
Hedge of net investments in foreign entities
The Group uses foreign currency borrowings and derivative financial instruments to hedge the net investment in material foreign currency
net assets of the Group, which are used to reduce the exposure to foreign exchange rate movements. At 31 December 2021, the Group
had designated EUR 222.7m of cross currency interest rate swaps, EUR 240.0m of private placements and EUR 154.4m of foreign
exchange forward contracts as net investment hedges of the net assets of the Group’s European subsidiaries. Similarly, USD 202.2m and
CAD 46.2m of foreign exchange forward contracts, and USD 350.0m of cross currency interest rate swaps were designated as a hedge of
the net assets of the Group’s North America subsidiaries. No material ineffectiveness was recognised in relation to these hedges.
Fuel derivatives
The Group has a number of fuel derivatives in place to hedge the different types of fuel used in each division. Fuel swaps are used to match
the timing, type of fuel and currency in which the domestic physical fuel is purchased as closely as possible, with hedges currently in place
from 2022 through to 2024.
During 2021, hedge accounting was discontinued for a small number of fuel derivatives where volumes were in excess of actual or
expected consumption. The majority arose in the UK, ALSA and North America following more stringent lockdown measures being
implemented in early 2021 and slower recovery. Overall expenses and gains recycled to the Income Statement from Other Comprehensive
Income netted to £nil (2020: £17.3m) and have been recorded as separately disclosable for consistency with the treatment in the prior year,
as shown in note 5.
During the year, £50.8m of fair value gains (2020: £50.5m losses) have been transferred to the cash flow hedge reserve due to movements
in market fuel prices. A fair value gain of £1.9m (2020: £29.5m loss) has been transferred from the cash flow hedge reserve to the Income
Statement following settlement of fuel trades; this comprised a loss of £16.0m (2020: £1.8m loss), being the hedging reserve position at
1 January and a £17.9m gain (2020: £27.7m loss) generated during the year due to movements in market fuel prices. No material
ineffectiveness was recognised in relation to these hedges.
Hedge type
Net investment
hedge
Fair value
hedge
Cash flow
hedge
Cash flow
hedge
Risk
Foreign
currency risk
Interest rate
risk
Foreign
currency risk
Commodity
price risk
Nominal amount of hedging
CAD $46.2m
USD $552.2m
€617.1m £250.0m $81.0m 357.0m litres
A
geing of nominal amount:
< 1 year
CAD $46.2m
USD $452.2m
€154.4m
– – 199.5m litres
1-2 years
USD $100.0m
€222.7m – – 117.7m litres
2-5 years – £250.0m – 39.8m litres
> 5 years €240.0m – $81.0m –
A
verage hedged rat
e
–
GBP SONIA +
1.98% 2.4265% £0.33/litre
Maturity 2022-2032 2025 2027 2022-2024
Carrying amount of hedging instruments (£m)
A
ssets – derivatives 13.7 0.1 0.3 29.4
Liabilities – derivatives (7.3) 6.3 (5.2) (0.7)
Liabilities – borrowings (201.6)
1
– – –
Carrying amount of hedged item – borrowings (£m) – (240.8) (59.9) –
Changes in fair value of hedged item for calculating hedge effectiveness
2
(10.4) 6.4 (2.0) (46.9)
Changes in fair value of hedged instrument used for calculating hedge effectiveness
2
10.4 (6.3) 1.8 47.7
A
mounts accumulated in reserves at 31 December 2021, net of tax 43.1 – 1.7 23.4
A
ccumulated fair value hedge adjustment on borrowings
–
6.4 – –
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
183

184
31 Financial instruments (including cash, trade receivables and payables) continued
Fuel derivatives can be analysed as follows:
Interest rate swaps at fair value through profit or loss
In September 2012, the Group entered into a series of interest rate swaps equal in value to the €78.5m Euro private placement, which
matured in August 2021. These interest rate swaps paid floating interest (EURIBOR + margin) semi-annually and received fixed interest
semi-annually with maturities matching the Euro private placement, which matured in August 2021 and were designated as a fair value
hedge of the interest rate risk on the private placement. These swaps were measured at fair value through profit and loss, with any gains or
losses being taken immediately to the Income Statement to offset any fair value gains or losses due to changes in the risk-free rate. During
the year a fair value loss of £0.7m was recognised in the Income Statement and was offset by a fair value gain of £0.7m on the underlying
hedged item due to changes in the risk-free interest rate.
In August 2021, the Group entered into a series of interest rate swaps equal in value to the £250.0m bond. These interest rate swaps all pay
fixed interest annually and receive floating interest (GBP SONIA + margin) annually with cash settlements matching that of the £250.0m
bond. They are designated as a fair value hedge of the interest rate risk on the £250.0m bond. These swaps as measured at fair value
through profit and loss, with any gains and losses being taken immediately to the Income Statement to offset any fair value gains or losses
due to changes in the risk-free rate on the £250.0m bond. During the year, a fair value loss of £6.4m was recognised in the Income
Statement and was offset by a fair value gain of £6.4m on the underlying hedged item due to changes in the risk-free interest rate.
Cash flow hedges
In June 2020, the Group entered into an $81.0m cross currency swap that pays fixed USD interest semi-annually and receives fixed GBP
interest semi-annually. This is designated as a cash flow hedge of foreign currency risk with maturities matching an $81.0m private
placement maturing in June 2027. No material ineffectiveness was recognised during the year.
Fuel derivatives
31 December
2021
Fair value
£m
31 December
2020
Fair value
£m
31 December
2021
Volume
million litres
31 December
2020
Volume
million litres
Sterling denominated – UK 5.3 (5.2) 48.6 55.4
Euro denominated – ALSA 7.4 (7.0) 85.4 84.0
US Dollar and Canadian Dollar denominated – North America 7.1 (4.4) 65.5 47.3
Fuel derivatives included in current assets/(liabilities) 19.8 (16.6) 199.5 186.7
Sterling denominated – UK 3.0 (0.8) 42.6 47.6
Euro denominated – ALSA 3.6 (2.2) 61.8 64.0
US Dollar and Canadian Dollar denominated – North America 2.3 (0.5) 53.1 54.7
Fuel derivatives included in non-current assets/(liabilities) 8.9 (3.5) 157.5 166.3
Total fuel derivatives 28.7 (20.1) 357.0 353.0
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
184

185
32 Called-up share capital
In May 2020, the Group issued 101,918,947 ordinary shares of 230p each. The net proceeds were £229.1m and as the share issue qualified
for merger relief under Section 612 of the Companies Act 2006, the excess of the net proceeds over the nominal value of the shares issued
was credited to a merger reserve rather than the share premium account. At the same time, the Group directly issued 428,782 ordinary
shares of 230p each to members of the Board and executive management team. The net proceeds were £1.0m and the excess proceeds
over the nominal value of the shares were recorded in share premium.
The total number of share options exercised in the year by employees of the Company was 402,244 (2020: 1,552,919) of which all (2020:
all) exercises were satisfied by transferring shares from the National Express Employee Benefit Trust.
Own shares
Own shares comprises 1,489,069 (2020: 877,337) ordinary shares in the Company that have been purchased by the trustees of the National
Express Employee Benefit Trust (the Trust). During the year, the Trust purchased 1,013,976 (2020: 1,025,505) shares and 402,244 (2020:
1,552,919) shares were used to satisfy options granted under a number of the Company’s share schemes. No shares (2020: nil) were sold
during the year to the open market.
The market value of the shares held by the Trust at 31 December 2021 was £3.8m (2020: £2.1m). No dividends were payable on these
shares in either 2021 or 2020.
33 Other reserves
Capital
redemption
reserve
£m
Merger
reserve
£m
Fair value
reserve of
financial
assets at
FVOCI
£m
Cash flow
hedge
reserve
£m
Cost of
hedging
reserve
£m
Net
investment
hedge
reserve
£m
Translation
reserve
£m
Total
£m
A
t 1 January 2021
0.2 239.5
(1.5) (15.2) 1.4 16.0 127.4 367.8
Exchange differences on retranslation
of foreign operations
– – – – – – (55.7) (55.7)
Gains on equity instruments classified as fair value
through Other Comprehensive Income
– – 1.2 – – – – 1.2
Gains on hedges
– – – 52.5 – 26.5 – 79.0
Hedging gains reclassified to Income Statement
– – – (2.8) (0.5) – – (3.3)
Cost of hedging
– – – – 0.1 – – 0.1
Deferred tax
– – – (9.5) – 0.5 – (9.0)
A
t 31 December 2021
0.2 239.5 (0.3) 25.0 1.0 43.0 71.7 380.1
Issued called-up and fully paid: No. of shares
2021
£m No. of shares
2020
£m
At
1 January
614,086,377 30.7
511,738,648 25.6
Issued during the year
– –
102,347,729 5.1
A
t 31 December
614,086,377 30.7
614,086,377 30.7
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
185

186
33 Other reserves continued
The nature and purpose of the other reserves are as follows:
− The merger reserve included the premium on shares issued to satisfy the purchase of Prism Rail PLC in 2000 and the share issue during
2020 as described in note 32.
− The cash flow hedge reserve and net investment hedge reserve records the movements on designated hedging instruments, offset
by any movements recognised in equity on underlying hedged items.
− The cost of hedging reserve records the movements in the currency basis, which are excluded from the hedging instrument on th
e
designated hedging instruments in the cash flow and net investment hedge reserves.
− The translation reserve records exchange differences arising from the translation of the accounts of foreign currency denominated
subsidiaries offset by the movements on loans and derivatives used to hedge the net investment in foreign subsidiaries and cost
of hedging.
− The fair value reserve is for fair value movements on financial assets that are classified as fair value through Other
Comprehensive Income.
34 Pensions and other post-employment benefits
(a) Summary of pension benefits and assumptions
The UK division (UK) and National Express Group PLC (the Company) both operate defined benefit pension schemes.
The Group also provides certain additional unfunded post-employment benefits to employees in North America and maintains a small
defined benefit scheme for National Express Services Limited. These post-employment benefits have been combined into the
‘Other’ category.
The UK, the Company and North America also operate or contribute into a number of defined contribution schemes.
The Company defined benefit scheme was subject to a buy-in transaction on 11 October 2018 whereby the assets of the plan were
invested in a bulk purchase annuity policy with the insurer Rothesay Life under which the benefits payable to defined benefit members
became fully insured. On 23 September 2021, a full buy-out of the defined benefit section was completed, following which Rothesay Life
has become fully and directly responsible for the pension obligations. On completion of the buy-out, the defined benefit assets (comprising
the Rothesay Life insurance policy) and matching defined benefit liabilities were derecognised from the Group’s Balance Sheet. The buy-
out transaction also triggered the return of surplus assets to the Company totalling £7.5m, with the remaining assets retained in the scheme
to cover final expenses in completing its wind-up.
In 2020, the UK division agreed a new six-year annual deficit plan with the trustees of the West Midlands Integrated Transport Authority
Pension Fund, which continues until March 2024 with an average contribution of £7.6m per annum. The plan remains open to accrual for
existing members only.
The assets of the defined benefit schemes are held separately from those of the Group and contributions to the schemes are determined by
independent professionally qualified actuaries.
The Group expects to contribute £7.7m into its defined benefit pension plans in 2022.
The total pension cost charged to underlying operating loss in the year for the Group was £10.9m (2020: £11.2m), of which £6.0m (2020:
£6.7m) relates to the defined contribution schemes.
Capital
redemption
reserve
£m
Merger
reserve
£m
Fair value
reserve of
financial
assets at
FVOCI
£m
Cash flow
hedge
reserve
£m
Cost of
hedging
reserve
£m
Net
investment
hedge
reserve
£m
Translation
reserve
£m
Total
£m
At
1 January 2020 0.2 15.4 – (4.5) 1.5 26.7 91.4 130.7
Shares issued during the year (net of transaction
costs)
– 224.1 –
– – – – 224.1
Exchange differences on retranslation of foreign
operations
– – 0.1
– – – 34.4 34.5
Losses on equity instruments classified as
fair value through Other Comprehensive
Income
– – (1.6) – – – – (1.6)
Losses on hedges
– – – (50.3) – (10.0) – (60.3)
Hedging gains/(losses) reclassified to Income
Statement
– – –
35.8 (0.3) (0.7) – 34.8
Cost of hedging
– – – – 0.2 – – 0.2
Deferred tax
– – – 3.8 – – – 3.8
Corporation tax
– – – – – – 1.6 1.6
A
t 31 December 2020 0.2 239.5 (1.5) (15.2) 1.4 16.0 127.4 367.8
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
186

187
34 Pensions and other post-employment benefits continued
The defined benefit pension (liability)/asset included in the Balance Sheet is as follows:
Through its defined benefit plans, the Group is exposed to a number of risks. Following the buy-out of the Company scheme during the
year, such risks as detailed below, only relate to the UK scheme.
Investment risk
The present values of scheme liabilities are calculated using a discount rate set with reference to corporate bond yields; if the return on
scheme assets is below this yield, it will create a deficit. The UK scheme holds a significant proportion of return-seeking assets (equities
and diversified growth funds) which, though expected to outperform corporate bonds in the long term, create volatility and risk in the
short term.
Interest risk
A decrease in bond interest rates will increase scheme liabilities but this will be partially offset by an increase in the returns on the
scheme assets.
Inflation risk
A significant proportion of the schemes’ obligations are linked to inflation, and higher inflation will lead to higher liabilities. The UK scheme
holds a small proportion of index-linked bonds which will help to protect against this risk.
Longevity risk
The majority of the obligations are to provide benefits for the life of the members, so increases in life expectancy will result in an increase
in the liabilities. The UK scheme includes a buy-in policy covering part of the pensioner members’ liabilities, which partly helps to mitigate
longevity risk.
Legislative risk
Future legislative changes are uncertain. In the past these have led to both increases in obligations, for example, reduced investment return
through the ability to reclaim advance corporation tax, and decreases in obligations, for example, through the ability to use consumer price
index (CPI) inflation instead of retail price index (RPI) to set pension increase rates. For the UK scheme the Group receives professional
advice on the impact of legislative changes.
The valuations conducted for financial reporting purposes are based on the triennial actuarial valuations. A summary of the latest triennial
actuarial valuations for the principal schemes, and assumptions made, are as follows:
2021
£m
2020
£m
Company
3.8
12.3
Pension assets
3.8
12.3
UK
(96.1) (141.6)
Other
(3.1) (5.8)
Pension liabilities
(99.2) (147.4)
Total
(95.4) (135.1)
UK Company
Date of actuarial valuation
31 March
2019
5 April
2016
Rate of investment returns per annum 3.2% 0%-2.1%
Increase in earnings per annum 2.7% –
Scheme assets taken at market value £495.0m £114.8m
Funding level 84% 97%
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
187

188
34 Pensions and other post-employment benefits continued
The most recent triennial valuations are then updated by independent professionally qualified actuaries for financial reporting purposes,
in accordance with IAS 19. Following the buy-out of the Company scheme there are no remaining pension liabilities at 31 December 2021,
therefore a full set of assumptions was not derived. Therefore the Company assumptions listed below are those used to derive the schemes
valuation immediately preceding the buy-out transaction, whereas for the UK scheme the assumptions listed below are those at 31
December 2021.
The Directors regard the assumptions around pensions in payment, discount rate, inflation and mortality to be the key assumptions in the
IAS 19 valuation. The following table provides an approximate sensitivity analysis of a reasonably possible change to these assumptions:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. Aside from the
matching insurance contracts held in the UK scheme, no allowance has been made for any change in assets that might arise under any of
the scenarios set out above.
Scheme assets are stated at their market values at the respective balance sheet dates. The expected rate of return on scheme assets is
determined based on market returns on each category of scheme assets.
(b) Financial results for pension benefits
The amounts charged to the Group Income Statement and Group Statement of Comprehensive Income for the years ended 31 December
2021 and 2020 are set out in the following tables:
In addition, during the year £1.2m (2020: £1.0m) of administrative expenses were incurred.
Group Statement of Comprehensive Income
UK
2021
£m
Company
2021
£m
Other
2021
£m
Total
2021
£m
A
ctuarial gain during the period from obligations 25.5 7.5 0.2 33.2
Expected return on plan assets greater than discount rate 15.8 (7.6) 0.5 8.7
Net actuarial gain/(loss) 41.3 (0.1) 0.7 41.9
2021 2020
UK Company UK Company
Rate of increase in salaries 2.5% – 2.5% –
Rate of increase of pensions in payment 2.8% 3.4% 2.4% 2.9%
Discount rate 1.8% 2.0% 1.3% 1.4%
Inflation assumption (RPI) 3.4% 3.4% 3.0% 2.9%
Inflation assumption (CPI) 2.8% 2.8% 2.4% 2.3%
Post-retirement mortality in years:
Current pensioners at 65 – male 19.6 22.4 19.9 22.4
Future pensioners at 65 – male 21.0 23.7 21.3 23.7
Current pensioners at 65 – female 23.0 25.1 23.2 25.1
Future pensioners at 65 – female 24.6 26.6 24.7 26.6
(Increase)/decrease in the defined benefit obligation
UK
2021
£m
Company
2021
£m
UK
2020
£m
Company
2020
£m
Effect of a 0.5% increase in pensions in payment (30.4) – (27.6) –
Effect of a 0.5% increase in the discount rate 36.1 – 35.8 –
Effect of a 0.5% increase in inflation (34.8) – (32.0) –
Effect of a 1 year increase in mortality rates (18.0) – (18.5) –
Group Income Statement
UK
2021
£m
Company
2021
£m
Other
2021
£m
Total
2021
£m
A
mounts (charged)/credited:
Current service cost (3.8) – – (3.8)
Settlement gain – 0.1 – 0.1
Net interest (expense)/income (1.7) 0.1 (0.2) (1.8)
Total charge/(credit) to Income Statement (5.5) 0.2 (0.2) (5.5)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
188

189
34 Pensions and other post-employment benefits continued
The net interest expense has been included within finance costs (see note 10).
Group Income Statement
UK
2020
£m
Company
2020
£m
Other
2020
£m
Total
2020
£m
A
mounts (charged)/credited:
Current service cost (3.5) – – (3.5)
Past service cost – (0.8) – (0.8)
Net interest (expense)/income (1.8) 0.3 (0.2) (1.7)
Total charge to Income Statement (5.3) (0.5) (0.2) (6.0)
The past service cost in the Company relates to Guaranteed Minimum Pension (GMP) equalisation. In October 2018 the High Court ruled
that GMP should be equalised between men and women. Whilst in 2018 the Group equalised benefits for existing members, a further High
Court ruling in November 2020 provided further detail and this resulted in a further charge with respect to members who have transferred
out of the scheme in prior years.
In addition to the above actuarial movements, the Statement of Comprehensive Income included a £0.6m loss for investment advice that
was incurred directly by the Company, primarily in relation to the buy-in transaction.
The amounts were recognised in the Balance Sheet at 31 December as follows:
None of the pension arrangements directly invest in any of the Group’s own financial instruments nor any property occupied by, or other
assets used by, the Group. The majority of the benefits within the plans are covered by insurance contracts. The insurance assets have
been valued so as to match the defined benefit obligations. The fair value of the remaining equity and debt instruments have primarily been
determined based on quoted prices in active markets.
Group Statement of Comprehensive Income
UK
2020
£m
Company
2020
£m
Other
2020
£m
Total
2020
£m
A
ctuarial gain/(loss) during the period from obligations (71.6) (17.0) (0.8) (89.4)
Expected return on plan assets less than discount rate 24.4 16.4 0.2 41.0
Net actuarial gain/(loss) (47.2) (0.6) (0.6) (48.4)
A
s at 31 December 2021
UK
2021
£m
Company
2021
£m
Other
2021
£m
Total
2021
£m
Equities 96.4 – 2.6 99.0
Bonds and multi-asset credit 63.8 – 0.9 64.7
Insurance policy 171.7 – – 171.7
Diversified growth fund 98.3 – – 98.3
Liability-driven investment 48.0 – – 48.0
Other 1.5 3.8 0.1 5.4
Fair value of scheme assets 479.7 3.8 3.6 487.1
Present value of liabilities and defined benefit obligation (575.8) – (6.7) (582.5)
Defined benefit pension (deficit)/surplus (96.1) 3.8 (3.1) (95.4)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
189

190
34 Pensions and other post-employment benefits continued
The movement in the present value of the defined benefit obligation in the year is as stated below.
The Group’s defined benefit obligation comprises £580.6m (2020: £732.3m) arising from plans that are wholly or partly funded and £1.9m
(2020: £3.9m) from unfunded plans.
The movement in the defined benefit obligations is as follows:
A
s at 31 December 2020
UK
2020
£m
Company
2020
£m
Other
2020
£m
Total
2020
£m
Equities 83.1 – 2.2 85.3
Bonds and multi-asset credit 87.9 – 0.9 88.8
Insurance policy 196.7 109.0 – 305.7
Diversified growth fund 106.9 – – 106.9
Other 0.5 13.8 0.1 14.4
Fair value of scheme assets 475.1 122.8 3.2 601.1
Present value of liabilities and defined benefit obligation (616.7) (110.5) (9.0) (736.2)
Defined benefit pension (deficit)/surplus (141.6) 12.3 (5.8) (135.1)
UK
£m
Company
£m
Other
£m
Total
£m
Defined benefit obligation at 1 January 2021 (616.7) (110.5) (9.0) (736.2)
Current service cost (3.8) – – (3.8)
Benefits paid 27.4 3.7 0.1 31.2
Contributions by employees (0.5) – 2.2 1.7
Finance charge (7.7) (1.1) (0.2) (9.0)
Gain on settlements – 100.4 – 100.4
A
ctuarial gain from changes in financial assumptions 19.9 7.3 0.1 27.3
A
ctuarial gain arising from changes in demographics 8.6 0.2 0.1 8.9
A
ctuarial loss arising from experience adjustments (3.0) – – (3.0)
Defined benefit obligation at 31 December 2021 (575.8) – (6.7) (582.5)
UK
£m
Company
£m
Other
£m
Total
£m
Defined benefit obligation at 1 January 2020 (557.1) (95.1) (8.1) (660.3)
Current service cost (3.5) – – (3.5)
Past service cost – (0.8) – (0.8)
Benefits paid 26.8 4.3 0.1 31.2
Contributions by employees (0.6) – – (0.6)
Finance charge (10.7) (1.9) (0.2) (12.8)
A
ctuarial loss from changes in financial assumptions (75.9) (17.8) (0.9) (94.6)
A
ctuarial loss arising from changes in demographics (2.4) (0.2) – (2.6)
A
ctuarial gain arising from experience adjustments 6.7 1.0 0.1 7.8
Defined benefit obligation at 31 December 2020 (616.7) (110.5) (9.0) (736.2)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
190

191
34 Pensions and other post-employment benefits continued
The movement in the fair value of scheme assets is as follows:
UK
£m
Company
£m
Other
£m
Total
£m
Fair value of scheme assets at 1 January 2021 475.1 122.8 3.2 601.1
Expected return on plan assets 6.0 1.2 – 7.2
Expected return on plan assets greater/(less) than discount rate 15.8 (7.6) 0.5 8.7
Cash contributions – employer 9.9 (7.5) – 2.4
A
dministrative expenses (0.1) (1.1) – (1.2)
Cash contributions – employee 0.4 – – 0.4
Loss on settlement –(100.3) –(100.3)
Benefits paid (27.4) (3.7) (0.1) (31.2)
Fair value of scheme assets at 31 December 2021 479.7 3.8 3.6 487.1
The employer cash contribution of £7.5m in the Company scheme represents the surplus returned to the Group upon the buy-out
transaction completing.
UK
£m
Company
£m
Other
£m
Total
£m
Fair value of scheme assets at 1 January 2020 458.0 109.3 3.0 570.3
Expected return on plan assets 8.9 2.2 – 11.1
Expected return on plan assets greater than discount rate 24.4 16.4 0.2 41.0
Cash contributions – employer 10.2 – – 10.2
A
dministrative expenses (0.2) (0.8) – (1.0)
Cash contributions – employee 0.6 – 0.1 0.7
Benefits paid (26.8) (4.3) (0.1) (31.2)
Fair value of scheme assets at 31 December 2020 475.1 122.8 3.2 601.1
The cumulative amount of actuarial gains and losses recognised in the Statement of Comprehensive Income since 1 January 2004 is a
£135.8m loss (2020: £177.7m loss). The Directors are unable to determine how much of the pension scheme deficit recognised on
transition to IFRS and taken directly to equity of £51.9m is attributable to actuarial gains and losses since inception of those pension
schemes. Consequently the Directors are unable to determine the amount of actuarial gains and losses that would have been recognised in
the Statement of Comprehensive Income before 1 January 2004.
History of experience gains and losses:
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
UK
Fair value of scheme assets 479.7 475.1 458.0 453.0 486.2
Present value of defined benefit obligation (575.8) (616.7) (557.1) (580.3) (620.0)
A
sset ceiling – – – – –
Deficit in the scheme (96.1) (141.6) (99.1) (127.3) (133.8)
Experience adjustments arising on liabilities (3.0) 6.7 52.2 (1.1) (4.3)
Experience adjustments arising on assets 15.8 24.4 8.9 (30.0) 20.2
Company
Fair value of scheme assets 3.8 122.8 109.3 98.6 134.0
Present value of defined benefit obligation – (110.5) (95.1) (83.7) (90.8)
Surplus in the scheme 3.8 12.3 14.2 14.9 43.2
Experience adjustments arising on liabilities – 1.0 0.3 (2.3) –
Experience adjustments arising on assets (7.6) 16.4 10.8 (35.6) (0.4)
Other
Fair value of scheme assets 3.6 3.2 3.0 2.7 2.8
Present value of defined benefit obligation (6.7) (9.0) (8.1) (7.1) (6.7)
Deficit in the scheme (3.1) (5.8) (5.1) (4.4) (3.9)
Experience adjustments arising on liabilities – – – – –
Experience adjustments arising on assets 0.5 0.2 0.2 – 0.2
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
191

192
35 Leases
Group as a lessee
The Group has lease contracts for various items of property, vehicles, plant and other equipment. Lease terms are negotiated on an
individual basis, contain a wide range of different terms and conditions, and may include extension and termination options. These
options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business
needs. Management exercises judgement in determining whether these extension and termination options are reasonably certain to
be exercised.
The Group’s obligations under its leases are secured by the lessor’s title to the leased assets.
(a) Amounts recognised in the Balance Sheet
Set out below is the net book value of right-of-use assets and additions during the year (included in property, plant and equipment – note 15):
Set out below are the carrying amounts of lease liabilities (included in borrowings – note 28) at 31 December 2021:
The maturity analysis of lease liabilities is presented in note 29.
(b) Amounts recognised in the Income Statement
It is not expected that commitments for short-term leases will materially differ from those in place at 31 December 2021.
(c) Amounts recognised in the Cash Flow Statement
2021 2020
Right-of-use assets
Land
and
buildings
£m
Public
service
vehicles
£m
Plant and
equipment,
fixtures
and fittings
£m
Total
£m
Land
and
buildings
£m
Public
service
vehicles
£m
Plant and
equipment,
fixtures
and fittings
£m
Total
£m
A
dditions 25.4 8.0 0.3 33.7 29.6 6.4 0.2 36.2
Depreciation charge (28.8) (36.5) (0.6) (65.9) (30.6) (46.1) (0.6) (77.3)
Net book value at 31 December 97.6 129.9 0.2 227.7 107.0 213.3 1.1 321.4
Lease liabilities
2021
£m
2020
£m
Current 67.0
86.5
Non-current 168.7 239.7
235.7
326.2
2021
£m
2020
£m
Depreciation expense on right-of use assets (note 6) 65.9 77.3
Interest on lease liabilities (note 10) 10.5 12.6
Interest income on sub-leases (note 10) (0.7) (0.6)
Expenses relating to short-term leases (note 6) 4.3 7.9
Expenses relating to leases of low-value assets (note 6) 3.0 5.2
Variable lease payments not included in the measurement of lease liabilities (note 6) 0.1 –
Covid-19-related rent concessions (note 6) – (0.7)
Income from sub-leasing right-of-use assets (included in other revenue) (3.5) (1.6)
2021
£m
2020
£m Included within
Payment of interest
(10.5) (12.6)
Cash flows from operating activities
Payment of principal (118.2) (97.7) Cash flows from financing activities
Payments for short-term, low-value leases and variable lease payments (7.4) (13.1)
Cash flows from operations
Total cash outflow for leases
(136.1) (123.4)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
192

193
35 Leases continued
(d) Extension and termination options
Some property and vehicle leases contain extension or termination options exercisable by the Group before the end of the non-cancellable
contract period. Where practicable, the Group seeks to include extension or termination options in new leases to provide operational
flexibility. The extension and termination options held are exercisable only by the Group and not by the lessors. The Group assesses at
the lease commencement date whether it is reasonably certain to exercise the extension or termination options and re-assesses these
assumptions when there is a significant event or significant change in circumstances within its control. Where the Group determines
it is reasonably certain that a termination option will be exercised, any termination penalty is included in the lease liability.
The Group has estimated that the potential future lease payments, should it exercise the extension or termination options, would result
in an immaterial change in the lease liability.
(e) Variable lease payments
During the year the Group entered into a variable lease arrangement in respect of public service vehicles in North America. The lease
payments are fully variable based on miles driven, and there is no minimum mileage or fixed payment within the contract. Given the lease
payments are fully variable, no lease liability has been recognised in the Balance Sheet. Instead the variable lease payments are included
in the Income Statement as incurred.
(f) Residual value guarantees
The Group has a number of leased vehicles with residual value guarantees. At the lease commencement date the amounts expected to be
payable have been included in the lease liability.
(g) Future lease commitments
During the year the Group has entered into an availability agreement for the provision of 130 electric buses in the UK. However at year end
no vehicles have been made available to us. The agreement includes a substitution clause whereby the service provider makes available to
us a set number of vehicles each day from its wider pool of vehicles. In the Directors’ view, the arrangement does not meet the definition of
a lease. The service provider has control of the vehicles and has a substantive substitution right, having both the practical ability to
substitute the vehicles and an economic incentive to do so. Consequently, no right of use asset or lease liability will be recognised on the
Balance Sheet, and payments under the agreement will be charged to the Income Statement as incurred. These contracts will give rise to
an estimated annual expense of £7.6m.
At the year end, the Group had commitments relating to leases not yet commenced with future lease payments of £0.1m within one year,
£0.7m within five years and £0.5m thereafter (2020: £nil).
Group as a lessor
The Group entered into finance leasing arrangements as a lessor for certain vehicles to its customers. In addition, the Group sub-leases
two properties which are no longer used by the Group. During 2021, the Group recognised interest income on lease receivables of £0.7m
(2020: £0.6m).
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the
reporting date:
The maturity analysis of the discounted lease payments are as follows:
Net investment in the lease
2021
£m
2020
£m
Within one year 4.6 4.7
A
fter one year but not more than five years 9.3 11.0
More than five years 5.6 0.3
Total undiscounted lease receivable 19.5 16.0
Unearned finance income (2.7) (1.1)
Finance lease receivable 16.8 14.9
Net investment in the lease
2021
£m
2020
£m
Current 4.1 4.3
Non-current 12.7 10.6
16.8 14.9
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
193

194
35 Leases continued
The Group also sub-leases some of its property and public service vehicles. The Group has classified these sub-leases as operating leases,
because they do not transfer substantially all of the risks and rewards incidental to the right-of-use assets. The following table sets out a
maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date.
36 Commitments and contingencies
(a) Capital commitments
The Group is committed to vehicle purchases and various land and buildings improvements.
(b) Contingent liabilities
Guarantees
The Group has guaranteed credit facilities totalling £3.7m (2020: £7.3m) of certain joint ventures.
Bonds and letters of credit
In the ordinary course of business, the Group is required to issue counter-indemnities in support of its operations. As at 31 December 2021,
the Group had performance bonds in respect of businesses in the USA of £113.7m (2020: £165.3m), in Spain of £88.1m (2020: £106.7m), in
Germany of £30.0m (2020: £32.0m) and in the Middle East of £6.0m (2020: £6.0m). Letters of credit have been issued to support insurance
retentions of £145.0m (2020: £117.2m).
Legal
Through the ordinary course of our operations, the Group is party to various litigation, claims and investigations. We do not expect the
ultimate resolution of any of these proceedings to have a material adverse effect on the Group’s results, cash flows or financial position.
Tax
Tax authorities in the markets in which we operate (UK, Spain, Germany, USA, Canada and Morocco) carry out tax audits from time to time.
As was detailed in note 11(d) Tax provisions, there are a number of tax uncertainties such as the deductibility of interest expense in the UK
and Spain, and tax audits in Spain. The Directors are satisfied that, based on current knowledge, adequate tax provisions are held to cover
any tax uncertainties. The Group had tax provisions at 31 December 2021 of £1.8m (2020: £2.4m). There are no material contingent
liabilities relating to tax.
Operating lease receipts
2021
£m
2020
£m
Within one year 3.0 1.3
A
fter one year but not more than five years 4.7 1.8
More than five years – –
7.7 3.1
2021
£m
2020
£m
Contracted 97.0 97.1
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
194

195
37 Related party transactions
A number of Spanish companies have leased properties from companies related to the Cosmen family. Jorge Cosmen is a Non-Executive
Director of the Group and was appointed as Deputy Chairman in October 2008. These leases were in place before the Group’s acquisition
of ALSA and are at appropriate market rates.
The details of the post-employment benefit plans operated for the benefit of employees of the Group are disclosed in note 34.
Compensation of key management personnel of the Group
Amounts of
transactions
Amounts due from
related parties
Amounts due to
related parties
2021
£m
2020
£m
2021
£m
2020
£m
2021
£m
2020
£m
Joint ventures
Bahrain Public Transport Company W.L.L. 0.5 0.5 – – – –
A
ssociates
A
LSA associates 3.5 3.7 3.2 3.6 (0.5) (0.7)
Total joint ventures and associates 4.0 4.2 3.2 3.6 (0.5) (0.7)
Trade investments
A
LSA trade investments 4.7 4.9 0.8 0.9 (0.8) (1.1)
North America trade investments 1.0 0.3 – – – –
Total investments 5.7 5.2 0.8 0.9 (0.8) (1.1)
Property transactions
A
LSA property transactions 4.9 3.7 0.4 0.4 (0.5) (0.4)
North America property transactions 2.0 3.2 – – – –
Total property transactions 6.9 6.9 0.4 0.4 (0.5) (0.4)
Total other related parties 12.6 12.1 1.2 1.3 (1.3) (1.5)
Total 16.6 16.3 4.4 4.9 (1.8) (2.2)
2021
£m
2020
£m
Total compensation paid to key management personnel (note 8) 2.1 0.8
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
195

196
38 Service concession arrangements
The following table sets out the nature and extent of the Group’s service concession arrangements:
During the year, no revenue or profit was recognised in exchanging construction services for financial or intangible assets.
39 Cash flow statement
(a) Reconciliation of Group loss before tax to cash generated from operations
1
Excludes amortisation from acquired intangibles which is included within ‘intangible asset amortisation’
2
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings – see note 2 for further information
Concession
Description of the
arrangement
Concession
period
Concession
commencement
Nature of infrastructure
Classification under
IFRIC 12
German Rail
The Group operates
two train services in Germany.
15 years 2015 – 2020 Rolling stock and tracks used
in the operation of the service
are provided by the delegating
authority.
No financial or intangible
asset is recognised for
construction as the
infrastructure is provided
to the Group.
Moroccan Urban Bus The Group has two contracts
with the Moroccan authority for
the operation of public transport
bus services.
15 years September 2019 Public service vehicles used
in the operation are provided
by the Group, some of which
are subject to ‘lease type’
arrangements.
Intangible asset
Up to 15 years November 2019 Initially, public service vehicles
used in operation are provided
by the public authority.
Replacement public service
vehicles will be provided by
the Group and public authority
in future years.
Financial asset
Spanish Regional Bus The Group has a contract with
the Provincial Government of
Bizkaia to operate regional
services.
10 years July 2021 Public service vehicles used
in the operation are provided
by the Group.
Financial asset
Spanish Urban Bus The Group has two
contracts with Spanish Councils
to operate urban commuter
coach services in Spain.
10 years
A
ugust 2019
Public service vehicles used
in the operation are provided
by the Group.
Financial asset
3 years June 2021 Public service vehicles used
in the operation are provided
by the Group.
Financial asset
A
laska Schoolbus The Group has undertaken a
contract for home to school
transportation.
10 years July 2021 Public service vehicles used in
the operation are provided by
the Group.
Financial asset
2021
£m
(Restated)
2020
2
£m
Loss before tax (84.9) (444.7)
Net finance costs 47.7 61.2
Share of results from associates and joint ventures 1.0 2.1
Depreciation of property, plant and equipment 199.7 223.6
Intangible asset amortisation 54.2 69.0
A
mortisation of fixed asset grants (3.2) (2.9)
Gain on disposal of property, plant and equipment (8.0) (8.7)
Gain on disposal of intangible assets (0.6) (2.3)
Share-based payments 1.0 0.2
(Increase)/decrease in inventories (1.9) 2.9
(Increase)/decrease in receivables (85.3) 56.6
Increase/(decrease) in payables 53.2 (140.0)
Increase/(decrease) in provisions 17.1 (22.9)
Separately disclosed operating items
1
84.4 278.0
Cash flows relating to separately disclosed items (43.3) (120.4)
Cash generated from operations 231.1 (48.3)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
196

197
39 Cash flow statement continued
(b) Analysis of changes in net debt
Net debt is an alternative performance measure which is not defined or specified under the requirements of International Financial
Reporting Standards. Please refer to the glossary on page 226 for further information.
1
Net of arrangement fees totalling £1.5m on bank and other loans
2
Net lease liabilities is inclusive of finance lease receivables which are reported separately from borrowings on the face of the Group’s Balance Sheet
3
Excludes accrued interest on long-term borrowings
4
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings. See note 2 for further information
5
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information
Short-term deposits relate to term deposits repayable within three months.
Borrowings include non-current interest-bearing borrowings of £1,294.3m (2020: £1,313.0m) as disclosed in note 28.
Other non-cash movements include lease additions and disposals of £26.6m (2020: £21.1m) and a £1.2m net reduction from the
amortisation of loan and bond arrangement fees (2020: £1.7m). A £7.3m decrease in the fair value of the hedging derivatives is offset by
opposite movements in the fair value of the related hedged borrowings. This comprises a £6.4m fair value increase in bonds and a £0.9m
fair value increase in private placements.
(Restated)
At
1 January
2021
4,5
£m
Cash flow
£m
Acquisitions
and disposals
£m
Exchange
differences
£m
Other
movements
£m
At
31 December
2021
£m
Components of financing activities:
Bank and other loans
1, 4
(101.8) (89.6) (2.0) 4.4 (0.6) (189.6)
Bonds (647.0) – – – 6.1 (640.9)
Fair value of interest rate derivatives 1.0 – – – (7.3) (6.3)
Fair value of foreign exchange forward contracts 4.6 (8.8) – (5.7) – (9.9)
Cross currency swaps (5.7) – – 8.3 – 2.6
Net lease liabilities
2
(311.3) 118.2 – 0.8 (26.6) (218.9)
Private placements (476.8) 66.8 – 15.5 0.6 (393.9)
Total components of financing activities (1,537.0) 86.6 (2.0) 23.3 (27.8) (1,456.9)
Cash
5
241.2 28.7 0.2 (2.0) – 268.1
Overnight deposits 49.7 (47.4) – (1.9) – 0.4
Other short-term deposits 338.9 (98.4) – (0.6) – 239.9
Bank overdrafts
5
(109.3) (22.9) – – – (132.2)
Net cash and cash equivalents 520.5 (140.0) 0.2 (4.5) – 376.2
Other debt receivables 1.2 (0.1) – (0.1) – 1.0
Remove: fair value of foreign exchange forward contracts (4.6) 8.8 – 5.7 – 9.9
Net debt
3
(1,019.9) (44.7) (1.8) 24.4 (27.8) (1,069.8)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
197

198
39 Cash flow statement continued
1
Net of arrangement fees totalling £2.4m on bank and other loans
2
Net lease liabilities is inclusive of finance lease receivables which are reported separately from borrowings on the face of the Group’s Balance Sheet
3
Excludes accrued interest on long-term borrowings
4
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings. See note 2 for further information
5
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information
(c) Reconciliation of net cash flow to movement in net debt
1
Restated for the change in presentation of advance subsidy factoring liabilities from other payables to borrowings – see note 2 for further information
(Restated
4, 5
)
At
1 January
2020
£m
Cash flow
£m
Acquisitions
and disposals
£m
Exchange
differences
£m
Other
movements
£m
At
31 December
2020
£m
Components of financing activities:
Bank and other loans
1, 4
(242.6) 154.0 (11.3) (1.0) (0.9) (101.8)
Bonds
(1,081.9) 448.4 – (12.0) (1.5) (647.0)
Fair value of interest rate derivatives
3.3 – – – (2.3) 1.0
Fair value of foreign exchange forward contracts
(20.4) 21.0 – 4.0 – 4.6
Cross currency swaps
11.7 (2.4) – (15.0) – (5.7)
Net lease liabilities
2
(385.0) 97.7 (4.3) 1.4 (21.1) (311.3)
Private placements
(68.3) (407.9) – (3.6) 3.0 (476.8)
Total components of financing activities
(1,783.2) 310.8 (15.6) (26.2) (22.8) (1,537.0)
Cash
5
348.7
(109.3)
0.7 1.1 – 241.2
Overnight deposits 2.1 47.6 – – – 49.7
Other short-term deposits
365.0 (30.7) – 4.6 – 338.9
Bank overdrafts
5
(237.5) 128.2
– – –
(109.3)
Net cash and cash equivalents
478.3 35.8 0.7 5.7 – 520.5
Other debt receivables 2.4 (1.2) – – 1.2
Remove: fair value of foreign exchange forward contracts
20.4 (21.0) – (4.0) – (4.6)
Net debt
3
(1,282.1) 324.4 (14.9) (24.5) (22.8) (1,019.9)
2021
£m
2020
1
£m
(Decrease)/Increase in net cash and cash equivalents in the year (139.8) 36.5
Cash outflow from movement in other debt receivables (0.1) (1.2)
Cash inflow from movement in debt and leases liabilities 93.4 274.2
Change in net debt resulting from cash flows (46.5) 309.5
Change in net debt resulting from non-cash movements (3.4) (47.3)
Movement in net debt in the year (49.9) 262.2
Opening net debt
1
(1,019.9) (1,282.1)
Net debt (1,069.8) (1,019.9)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
198

199
40 Subsidiary undertakings and other significant holdings
A full list of subsidiaries, joint ventures and companies in which National Express Group PLC has a controlling interest as at 31
December 2021 is shown below, along with the country of incorporation and the effective percentage of equity owned.
Name and country of Incorporation
%
equity
interest Name and country of Incorporation
%
equity
interest
United Kingdom & Ireland
NE Trains South Limited (a)
100
A
irlinks The Airport Coach Company Limited (a) 100
NXEC Trains Limited (a)
100
A
ltram L.R.T. Limited (a) 100
Scotrail Railways Limited (a)
100
Brooke Management Limited (a) 100
Silverlink Train Services Limited (a)
100
Central Trains Limited (a) 100
Solent Coaches Limited (a)
100
Clarkes Holdco Limited (a) 100
Speedlink Airport Services Limited (a)
100
Coachman Limited (a) 100
Stewarts Coach Group Limited (a)
100
Coliseum Coaches Limited (a) 100
Stewarts Coaches Limited (a)
100
E. Clarke & Son (Coaches) Limited (a) 100
The Kings Ferry Limited (a)
100
Eurolines (U.K) Limited (a) 100
Travel Coventry Limited (previously WM Card Systems Limited) (a)
100
H. Luckett & Co. Limited (a) 100
Travel Merryhill Limited (a)
100
Inter-Capital and Regional Rail Limited (a) 40
Travel West Midlands Limited (a)
100
London Eastern Railway Limited (a) 100
Travel WM Limited (a)
100
Lucketts Holdings Limited (a) 100
Travel Yourbus Limited (a)
100
Lucketts Services Limited (a) 100
West Anglia Great Northern Railway Limited (a)
100
Maintrain Limited (a) 100
West Midlands Accessible Transport Limited (previously Travel
Coventry Limited) (a)
100
Midland Main Line Limited (a) 100
West Midlands Travel Limited (a)
100
Mortons Travel Limited (a) 100
W M Property Holdings Limited (a)
100
National Express Bus & Coach Services Limited (b) 100
WM Travel Limited (a)
100
National Express European Holdings Limited (05652775)* (a) 100
W M Ventures Limited (a)
100
National Express Finance Company Limited (a) 100
Wood’s Coaches Limited (a)
100
National Express Financing LP** (a) 100
Woods Reisen Limited (a)
100
National Express Group Holdings Limited (a) 100
Worthing Coaches Limited (a)
100
National Express Holdings Limited (02156473)* (a) 100
Bahrain
National Express Intermediate Holdings Limited (a) 100
Bahrain Public Transport Company W.L.L. (c)
50
National Express International Limited (a) 100
National Express Leisure Limited (previously Lucketts Travel Limited) (a) 100
Germany
National Express Limited (a) 100
National Express Germany GmbH (d)
95
National Express Manchester Metrolink Limited (a) 100
National Express Holding GmbH (e)
100
National Express Middle East Plc (a) 100
National Express Rail GmbH (f)
100
National Express North America Holdings Limited (07855182)* (a) 100
Süddeutsche Regionalbahn GmbH (e)
100
National Express Operations (Stansted) Limited (a) 100
National Express Operations Limited (a) 100
Czech Republic
National Express Petermann UK Limited (07855188)* (a) 100
National Express Cz s.r.o. (g)
100
National Express Rail Replacement Limited (a) 100
National Express Services Limited (a) 100
Netherlands
National Express Spanish Holdings Limited (a) 100
National Express Holdings LLC BV (h)
100
National Express Trains Limited (a) 100
National Express Transport Holdings Limited (04338163)* (a) 100
A
ndorra
National Express UK Limited (a) 100
Estació 2017, S.A. (i)
11
N E Canada Limited (08596333)* (a) 100
Estació d'Autobusos d'Andorra (j)
100
NE Durham UK Limited (08270480)* (a) 100
Transports Dels Pirineus (i)
100
NE Europe Finance Limited (07876047)* (a) 100
NE No.1 Ltd (a) 100
France
NE No.2 Ltd (a) 100
Iberolines (k)
46
NE No. 3 Limited (a) 100
SARL Chamexpress.com (l)
100
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
199

200
40 Subsidiary undertakings and other significant holdings continued
Name and country of Incorporation
%
equity
interest Name and country of Incorporation
%
equity
interest
Morocco
A
utos Cal Pita, S.A. (am) 97
A
lsa al Baida (m) 100
A
utos Pelayo, S.A.U. (z) 100
A
lsa City Agadir S.A. (n) 100
A
utos Rodríguez Eocar, S.L. (an) 80
A
lsa City Sightseeing Maroc (o) 100 Baleares Business Cars, S.L. (af) 100
A
ls
a
City Tour S.A.R.L. (o) 95 Baleares Consignatarios, S.L.U. (ao) 100
A
lsa Education a la Sécurité Routière S.A.R.L. (o) 98 Baleares Consignatarios Tours, S.L.U. (ao) 100
A
lsa Khouribga S.A. (p) 100 Berlinas de Asturias, S.L. (af) 100
A
lsa Tanger S.A. (q) 100 Berlinas Calecar, S.L.U. (ai) 100
Centre de Formation Techn. Profes. Transport S.A.R.L. (o) 99 Berlinas de Canarias, S.L. (af) 100
Groupe Alsa Transport S.A. (o) 100 Berlinas de Toledo, S.L. (af) 100
Immeubles Véhicules Accessoires Maroc S.A.R.L. (o) 80 Berlinas VTC de Cantabria, S.L.U. (ap) 100
Interprovincial Maroc S.A.R.L. (o) 100 Bilboko Hiribus Jasangarría, S.L. (ag) 78
Transport de Voyageurs en Autocar Maroc S.A. (o) 100 Buses de Palencia, S.L. (aq) 100
A
lsa Citybus Raba
t
-Salé-Temara, S.A. (r) 51 Bus Metropolitano de Granada, S.L. (ar) 50
Busturialdea Lea Artibai Bus, S.A. (as) 65
Portugal Bus Urbano de Castro Urdiales, S.L. (ap) 96
A
lsa Metropolitano do Porto, Lda (s) 100 Canary Business Cars, S.L. (af) 100
Tiac Viagens e Turismo Lda (t) 100 Cataluña Business Cars, S.L. (af) 100
A
lsa Todi Metropolitana de Lisboa (u) 65 Center Bus, S.L. (at) 90
Cetralsa Formación, S.L.U. (z) 100
Slovakia Cía. del Tranvía Eléctrico de Avilés, S.A. (au) 87
Efc Spol s.r.o. (v) 80 Compañia Navarra de Autobuses, S.A. (av) 50
Compostelana, S.A.U. (aw) 100
Spain Concesionario Estación Autobuses Logroño, S.A. (ax) 21
A
greda Bus, S.L (w) 70 Ebrobus, S.L.U. (z) 100
A
lianza Bus, S.L.U. (x) 100 Estación Autobuses de Cartagena, S.A. (ay) 54
A
lhambra Bus, S.L.U. (y) 100 Estación Autobuses de Ponferrada, S.A. (az) 49
A
lmeri
a
–Murcia Bus, S.L. (y) 100 Estación Central de Autobuses de Zaragoza, S.A. (ba) 19
A
lsa Atlántica, S.L.U. (z) 100 Estación de Autobuses de Siero, S.L. (bb) 50
A
lsa Ferrocarril, S.A.U. (z) 100 Estación de Autobuses Aguilar de Campoo, S.L. (bc) 67
A
lsa Granada Airport S.L. (y) 100 Estación de Autobuses de Aranda de Duero, S.L. (bd) 43
A
lsa Grupo, S.L.U. (z) 100 Estación de Autobuses de Astorga, S.L. (be 79
A
lsa Internacional, S.L.U. (z) 100 Estación de Autobuses de Aviles S.L. (bf) 100
A
lsa Internacional, S.L.U. y Otros U.T.E. (x) 100 Estación de Autobuses de León, S.A. (ai) 89
A
lsa Metropolitana, S.A.U. (x) 100 Estación de Autobuses de Plasencia, S.A. (bg) 52
A
ls
a
-Mirat Extremadura, S.L. (aa) 50 Estación de Autobuses de San Lorenzo del Escorial, S.A.U. (x) 100
A
lsa Micromobility, S.L.U. (z) 100 Estación de Autobuses de Ribadeo, S.L. (bh) 50
A
lsa Rail, S.L.U. (z) 100 Estación de Autobuses de Vitoria, S.L. (bi) 32
A
plic. y Sist. Integrales Para el Transporte, S.A. (ab) 100 Estación de Líneas Regulares, S.L. (bj) 46
A
ragonesa de Estación de Autobuses, S.A. (ac) 23 Estaciónes Terminales de Autobuses, S.A. (bk) 79
A
rgabus, S.A. (ad) 100 Euska Alsa, S.L.U. (ak) 100
A
rtazo Servicios Integrales, S.L. (ae) 100 Explotación Gasoleo Estación de Autobuses A Coruña, S.L. (bl) 40
A
sturies Berlinas de Luxu, S.L. (af) 100 Ezkerraldea-Meatzaldea Bus, S.A. (as) 65
A
utobuses Urbanos de Bilbao, S.A. (ag) 75 Gal Bus, S.L. (am) 100
A
utobuses Urbanos de León, S.A.U. (ah) 100 G.S. Carretera (bm) 25
A
utocares Castill
a
–Leon, S.A.U. (ai) 100 General Técnica Industrial, S.L.U. (z) 100
A
utocares de Badajoz, S.L. (aj) 100 Gorbea Representaciones, S.L. (ak) 100
A
utocares Discrecionales del Norte, S.L.U. (ak) 100 Guaguas Gumidafe, S.L. (ae) 100
A
utomóviles Luarca, S.A.U. (al) 100 Grupo Enatcar, S.A. (x) 100
A
utomóviles Sigras Carral, S.A. (am) 100 Ibero-Euro Sur, S.L. (x) 20
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
200

201
40 Subsidiary undertakings and other significant holdings continued
Name and country of Incorporation
%
equity
interest Name and country of Incorporation
%
equity
interest
Intercambiadores Europeos, S.L. (z) 60 Transportes Bacoma, S.A.U. (ca) 100
Intercar Business Cars, S.L. (bn) 100 Transportes Rober, S.A.U. (y) 100
International Business Limousines, S.A.U. (bo) 100 Transportes de Viajeros de Aragón, S.A. (ba) 59
Interurbana de Autocares, S.A.U. (z) 100 Transportes Santo Domingo, S.L.U. (ci) 100
Irubus, S.A.U. (x) 100 Viajes ALSA, S.A.U. (z) 100
Jimenez Lopera, S.A.U. (bo) 100 Transportes Terrestres Cantabros, S.A. (ch) 93
Julia Travel y Automóviles Luarca Sa Ute (bp) 50 Transportes Unidos de Asturias, S.L. (cj) 100
La Tafallesa, S.A.U. (av) 50 Transportes Unidos, S.L.U. (z) 100
La Unión Alavesa, S.L. (bi) 50 Transportes Urbanos de Cantabria, S.L.U. (ch) 100
La Unión de Benisa, S.A. (bq) 98 Transportes Urbanos de Cartagena, S.A. (ck) 97
Lineas Europeas de Autobuses, S.A. (br) 43 Tranvía de Vélez, S.A.U. (cl) 100
Los Abades de la Gineta, S.L.U. (x) 100 Transportes Urbanos de Guadalajara, S.L. (cm) 100
Mybustest, S.L (z) 50 Tranvías Metropolitanas de Granada, S.A.U. (cn) 100
Mai Tours, S.L.U. (bs) 100 Tury Express, S.A. (ak) 100
Manuel Vázquez, S.L. (bt) 60 Ute Catamaranes Bahía Cadiz (co) 23
Movelia Tecnologias, S.L. (bu) 78 Ute Ea Cordoba (cp) 50
Mundaka Consultoria, S.L.U. (ak) 100 Ute Extremadura (x) 100
NEX Continental Holdings, S.L.U. (z) 100 Ute Guadalajara (z) 100
NX Middle East, S.L.U. (bv) 100 Ute Mundiplan (cq) 17
Proyectos Unificados, S.A.U. (z) 100 Ute Murcia City Tour (al) 50
Publi Imagen Granada, S.L.U. (y) 100 Ute Ea Alicante (cr) 50
Representaciones Mecánica, S.A.U. (ak) 100 Viajes Por Carretera, S.A.U. (ak) 100
Return Viajes, S.L. (bw) 50 Voramar el Gaucho S.L.U. (cs) 100
Rutas a Cataluña, S.A. (bx) 28
Rutas del Cantábrico, S.L. (ak) 95
Switzerland
Semarvi (z) 34
A
lpyBus S.a.r.l. (ct) 100
Serviareas 2000, S.L.U (z) 100 Eggmann Frey (cu) 100
Servicios Auxiliares del Transporte C.B. (by) 100 GVA Transfers.com SARL (cv) 100
Servicios del Principado, S.A.U. (z) 100 Linien Abfertigung GmbH (cu) 80
Servicios El Temple, S.L. (am) 100 Odier Excursions, S.A. (cw) 100
Servicios Empresariales Especiales, S.L.U. (ak) 100
Servicios Generales de Automoción, S.A.U. (ak) 100
US
Servicios VTC Tibus, S.L.U. (x) 100 The Provider Enterprises, Inc. (cx) 100
Setra Ventas y Servicios, S.A.U. (bo) 100
A
1A Transportation, Inc. (cy) 100
Sevirama, S.L. (bz) 30
A
ristocrat Limousine and Bus, Inc. (cz) 100
Sociedad Anónima Unipersonal Alsina Graells de A.T. (ca) 100
A
&S Transportation Incorporated (cy) 100
Sociedad Concesionaria Interurbano Tolosa Buruntzaldea S.L. (cb) 25
A
tlantic & Southern Transportation (da) 100
Técnicas en Vehículos Automóviles, S.L.U. (x) 100
A
tlantic & Southern Transportation (db) 100
Técnologias Formativas en Simuladores, S.L. (cc) 50
A
tlantic & Southern Transportation (dc) 100
Terminal de Autobuses de Garellano, S.L. (cd) 41 Beck Bus Transportation Corp. (de) 100
Tibus, S.A. (ca) 60 Beck Bus Transportation III, LLC (de) 100
Tibus Berlines de Luxe, S.L.U. (ca) 100 Beck Bus Transportation IV, LLC (de) 100
Tibus Business Cars, S.L.U. (ca) 100 Beck Bus Transportation, LLC (de) 100
Tibus Business Limousines, S.L.U. (x) 100 Bus Co., Inc. (de) 100
Tibus Luxury Services, S.L.U. (ca) 100 Caravan Leasing Vehicles LLC (df) 100
Transporte Colectivos, S.A.U. (ce) 100 Carrier Management Corporation (dg) 100
Transportes Accesibles Peninsulares, S.L. (cf) 100 Chicagoland Coach Lines LLC (dh) 100
Transportes Adaptados Andaluces, S.A.U. (cg) 100 Community Transportation, Inc. (dg) 100
Transportes Adaptados Regionales, S.L.U. (ai) 100 Cook-DuPage Transportation Company, Inc. (de) 100
Transportes Adaptados Cántabros, S.A. (ch) 98 Diamond Transportation Services, Inc. (di) 100
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
201

202
40 Subsidiary undertakings and other significant holdings continued
Name and country of Incorporation
%
equity
interest Name and country of Incorporation
%
equity
interest
Discount Enterprises, Inc. (dj) 100 Trinity Cars, Inc. (dm) 100
Durham D&M LLC (dh) 100 Trinity Coach LLC (dm) 100
Durham Holding I, LLC (dh) 100 Trinity Management Services Co. LLC (ds) 100
Durham Holding II, LLC (dh) 100 Trinity Student Delivery LLC (dm) 100
Durham School Services, L.P. (dh) 100 TWB Transport, LLC (de) 100
Fox Bus Lines Inc. (dk) 100 WeDriveU America LLC (dc) 100
Greensburg Yellow Cab Co. (dg) 100 WeDriveU Holdings, Inc. (dt) 70
Haid Acquisitions LLC (dl) 100 White Plains Bus Co., Inc. (do) 100
JNC Leasing, Inc. (dm) 100 Whitetail Bid Co., LLC (dh) 100
Kiessling Transit, Inc. (dk) 100 Wise Coaches, Inc. (du) 100
Meda-Care Vans of Waukesha, Inc. (dn) 100
MF Petermann Investment Corporation (dh) 100 Canada
Monroe School Transportation, Inc. (do) 100 National Express Canada (Holdings) Limited (dv) 100
MV Student Transportation, Inc. (dp) 100 National Express Canada Transit Ltd (dv) 100
National Express Acquisition Corporation (dh) 100 Stock Transportation Ltd (dv) 100
National Express Durham Holding Corporation (dh) 100
National Express LLC (dh) 100
National Express Leasing Company LLC (dh) 100
National Express Transit Corporation (dh) 100
National Express Transit Services Corporation (dh) 100
New Dawn Transit LLC (do) 100
Petermann Acquisition Co., LLC (dh) 100
Petermann Acquisition Corporation (dh) 100
Petermann Holding Co., LLC (dh) 100
Petermann Ltd. (dl) 100
Petermann Northeast, LLC (dl) 100
Petermann Northwest, LLC (dh) 100
Petermann Partners, Inc. (dh) 100
Petermann Southwest, LLC (dh) 100
Petermann STS, LLC (dh) 100
Petermann STSA, LLC (dh) 100
PM2 Co. LLC (dh) 100
Quality Bus Service, LLC (do) 100
Queen City Transportation, LLC (dl) 100
Rainbow Management Service, Inc. (do) 100
Safeway Training and Transportation Services, Inc. (cx) 100
Septran, Inc. (dc) 100
Smith Bus Service, Inc. (dq) 100
Suburban Paratransit Services, Inc. (do) 100
Total Transit Enterprises, LLC (dr) 100
Trans Express, Inc. (do) 100
Transit Express, Inc. (dn) 100
Transit Express Services, Inc. (dn) 100
Trinity, Inc. (dm) 100
* These subsidiaries are exempt from the requirements of the UK companies Act 2006 relating to the audit of individual accounts by virtue of S479A of the Act.
Outstanding liabilities of the exempt companies at the Balance Sheet date are guaranteed pursuant to Sections 479A-C of the Act.
** National Express Financing LP is exempt from preparing accounts in accordance with Part 2, Regulation 7 of The Partnerships (Accounts) Regulations 2008, as it is
included within the Group consolidated financial statements for the year ending 31 December 2021.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
202

203
40 Subsidiary undertakings and other significant holdings continued
Key
A
ddress Key
A
ddress
(a) National Express House, Mill Lane, Digbeth, Birmingham, B5 6DD (az) Ctra de Asturias, Ponferrada
(b) Terminal 1, Office 10, Link Corridor, Mezzanine Level, Dublin Airport,
Dublin, K67 KD58, Ireland
(ba)
A
vda de Navarra, 80 (Estación Central de Autobuses),Zaragoza (50011)
(c)
Garage 1087, Road 4025, Isa Town 840, Southern Governorate,
Kingdom of Bahrain
(bb) C/ Ramón y Cajal, Pola de Siero
(d) Trakehner Strasse 7-9, 60487 Frankfurt am Main, Germany (bc)
A
vda de Ronda 52 Bis, Aguilar de Campoo (Palencia)
(e) Vogelsanger Weg 38, 40470 Düsseldorf, Germany (bd)
A
vda Valladolid, Aranda de Duero (Burgos)
(f) Johannisstrasse 60-64, 50668 Cologne, Germany (be)
A
vda Las Murallas, nº 52, Astorg
a
-León (24700)
(g) Seifertova 327/85, 130 00 Praha, Zizkov, Czech Republic (bf) C/ Los Telares (Estación de Autobuses) Aviles (33400)
(h) Dr Willem Dreesweg 2, 1st Fl. South Wing, 1185 VB Amstelveen,
The Netherlands
(bg) C/ Tornavacas, 2, Plasencia
(i) Carrer de la Cúria, s/n, Andorra la Vella (bh)
A
vda Rosalía de Castro, Ribadeo
(j)
A
v. de Tarragona, 42, AD500 Andorra la Vella (bi) C/ Los Herran, 50 (Estación de Autobuses), Alava (Vitoria)
(k) 41 Boulevard Poniatowski, 75012, Paris (bj) Plaza de las Estaciones, Santander (Cantabria)
(l) 498 Avenue des Alpages, 74310 Les Houches (bk)
A
vda Menéndez Pidal, nº 13
(
Estación de Autobuses), Valencia (46009)
(m) Twin Center ang Bd Zerktouni Et Al Massira Etg 5 et 6, Casablanca (bl) Rúa Caballeros, 21, 15009 A Coruña
(n) Rue De Teheran, Q.I Agadir (bm) Plaza de la Constitución, Estación de Autobuses, 2ª Planta, Oficina 26,
Lugo
(o)
A
hwaz, Ferme Ahzib Achayech Ferkat Ain Dada, Askedjour, Jamaat Et
Kiadat Saada, Marrakech
(bn) Pol. De Pocomaco, Primera Avenida, 10 Nave Alsa B-15, A Coruña
(p) No 22 Rue Meknes Hay Haboub, Khouribga (bo) Pol. Ind. Las Fronteras. C/ Limite, Torrejón de Ardoz (Madrid)
(q) 37 Rue Omar Ibn Khattab, Inmeuble Maspalomas 2, Tanger (bp) Avda Sancho El Sabio, 31, Donostia
(r) Rue cadi Srayri et Cadi Ben Hammadi, Quartier de la Pinede – Rabat (bq) C/ Comunicaciones, 10 (P. de Babel), Alicante (03008)
(s)
A
venida das Forças Armadas, N 125, 12 Lisbo
a
(br) C/Guillem de Castro, 77, Valencia
(t) Rua de Pedro Nunes, 39, Lisboa (bs)
A
venida de la Hispanidad O- Parking P12, Barajas, Madrid
(u) Estrada de Algeruz, Cruz de Peixe – 2901-279-Setúbal (bt) C/ Jacques Cousteau, 2 – Arteijo (A Coruña)
(v) Tehelná 23 83103, Bratislava – Nové Mesto (bu) C/ Santa Leonor, 65 –Avalón Parque Empresarial, Edificio A, Madrid
(w)
A
vda. Manuel Rodríguez Ayuso, 110 – Zaragoza (bv) C/ Inglaterra, 20-22, Palencia (34004)
(x) C/ Alcalá, 478, Madrid (28027) (bw) Madrid (Las Rozas), Avda de Marsil 33
(y)
A
vda Juan Pablo II, 33, Granad
a
(bx) C/ Musico Gustavo Freire, 1 -1° Dcha, Lugo (27001)
(z) C/ Miguel Fleta, 4, Madrid (28037) (by) C/ Mendez Álvaro (Estación de Autobuses), Madrid
(aa) C/ Túnez, 1 (Estación de Autobuses), Cáceres (bz) Paseo Colón, 18, Bajo Dcha. Sevilla
(ab) Pol. San Mateo, Ctra Coll D’ En Rabassa, Palma de Mallorca (07002) (ca) C/ Ali Bei, 80 (Estación de Autobuses), Barcelona (08013)
(ac) Urbanización Plaza de Roma, F-1, Zaragoza (cb) Barrio Ubilluts, Andoaín – Guipuzcoa
(ad) C/ Real 116 – Arganda del Rey (Madrid) (cc) Newton, 6,Edificio 6, Nave, 6.P, Leganés, Madrid (28914)
(ae) Gáldar (Las Palmas de Gran Canaria), calle Pedro de Arguello, 10 (cd)
A
lameda de Mazarredo, 21, Bilbao
(af) C/ Jorge Juan, 19 – 2º Izquierda, Madrid (28001) (ce) Gran Vía de D. Ingacio de Haro, 81, Bilbao
(ag) C/ Tellaetxebidea 3, Bilbao (cf) C/Pepe Cosmen, (Estación de Autobuses), Oviedo (33001)
(ah) Pol. Ind. Vilecha Oeste, León (24192) (cg) Plaza Coca Piñera, s/n (Estación de Autobuses), Jaén
(ai) Estación de Autobuses, Avda Ingeniero Saenz de Miera, León (24009) (ch)
A
vda Candina, 35-37, Santander (39011)
(aj)
A
venida de la Libertad, s/n, 06800, Mérida (Badajoz) (ci) C/ Investigación. Nº 2 – Getafe (Madrid)
(ak)
A
lameda de Urquijo, no 85, 1o – Dcha., Bilbao- Vizaya (48013) (cj) Pol. Ind. Espírtiu Santo, Oviedo (33010)
(al) Magnus Blikstad 2, Gijón (33207) (ck) Paraje de la Asomada, Cartagena (Murcia)
(am) Ctra. El Burgo-Los Pelamios s/n Culleredo – A Coruña (cl)
A
vda Juan Carlos I, s/n. Ronda del Ingeniero, Vélez Málaga (Málaga)
(an) Cedofeita, c/ Requiande, 1 – Ribadeo-Lugo (cm) Polígono Industrial del Henares, Calle Livorno, 55, Marchamalo,
Guadalajara (19180)
(ao) Carretera Porto Pi, 8-7º, 07015, Palma de Mallorca (cn)
A
venida de Cádiz, número 70, 1
º
-B, Granada
(ap)
A
venida de Candina, nº 35, Santander (39011) (co)
A
vda José León de Carranza, nº20, Cádiz
(aq) C/ Campaneros, 4, 1o Dcha, Palencia (34003) (cp) Glorieta de las Tres Culturas, Córdoba
(ar)
A
venida Juan Pablo II, 33 (Estación de Autobuses), Granada (18013) (cq) C/ Ruiz Perelló, 15, Madrid
(as)
Centro de Transportes de Vizcaya, Barrio el Juncal, Naves 3 y 4 (Valle de
Trápaga-Trapagaran), Vizcaya (48510)
(cr) Muelle de Poniente, Alicante
(at) Paseo de Moret, 7, Madrid (cs) S’ Hort den Serral (San Agustín) Sant Josep de sa Talaia, Illes Balears
(au)
A
vda Conde de Guadalhorce 123, Aviles (33400) (ct) 8 Chemin de Morglas, 1214, Genève
(av) C/ Yanguas y Miranda, 2 (Estación de Autobuses), Pamplona (cu) Rue du Mont Blanc 14, 1201, Genève
(aw) Plaza San Cayetano, s/n. Estación Autobuses Taq. 10, Santiago de
Compostela (La Coruña)
(cv) Chemin de Morglas, 8 – Vernier
(ax)
A
vda de España, 1, Logroño- La Rioja (cw) Chemin Des Aulx 9 – Plan Les Ouates – Switzerland
(ay)
A
vda Trovero Marín. Nº 3,(Estación Autobuses), Cartagen
a
(30202) (cx) 9 Capitol Street, Concord, NH 03301
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
203

204
40 Subsidiary undertakings and other significant holdings continued
Key
A
ddress
(cy) 1200 Pine Island Road, Plantation, FL 33324
(cz) 820 Bear Tavern Road, West Trenton, NJ 08628
(da) 289 Culver Street, Lawrenceville, GA 30046
(db) 3867 Plaza Tower Drive, Baton Rouge, LA 70816
(dc) 334 North Senate Avenue, Indianapolis, IN 46204
(de) 208 S. LaSalle Street, Chicago, County of Cook, IL 60604
(df) 8020 Excelsior Drive, Suite 200, Madison, WI 53717
(dg) 600 N. 2nd Street, Suite 401, Harrisburg, PA 17101-1071
(dh)
1209 Orange Street, Corporation Trust Center, New Castle County,
Wilmington, DE 19801-1120
(di) 4701 Cox Road, Glen Allen, County of Henrico, VA 23060
(dj) 3800 North Central Avenue, Ste. 460 Phoenix, AZ 85012
(dk) 155 Federal Street, Suite 700, Boston, MA 02110
(dl)
4400 Easton Commons Way, Suite 125, Columbus, County of Franklin,
OH 43219
(dm) 40600 Ann Arbor Road E., Suite 201, Plymouth, MI 48170-4675
(dn) 301 S. Bedford St., Suite 1, Madison, WI 53703
(do) 28 Liberty Street, New York, NY 10005
(dp) 40 West Lawrence, Suite A, Helena, Montana 59601
(dq) 2405 York Road, Ste. 201, Lutherville Timonium, MD 21093-2264
(dr) 3800 North Central Avenue, Suite 460, Phoenix, AZ 85012
(ds) 4624 13th St., Wyandotte, MI 48192
(dt) 2710 Gateway Oaks Drive, Suite 150N, Sacramento, CA 95833
(du) 300 Montvue Road, Knoxville, TN 37919
(dv) 40 King Street West, Suite 5800, Toronto, ON M5H 3S1 Canada
41 Post balance sheet events
Although considered a non-adjusting post balance event, the recent events in Ukraine are still unfolding with the knock on effects at this
stage uncertain and unquantifiable. Whilst the events are impacting on current fuel prices, as at the 9 March 2022 the Group is fully hedged
for 2022 and around 65% hedged for 2023, which will help mitigate against such volatility.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Consolidated Accounts continued
For the year ended 31 December 2021
204

205
The Company reported a profit for the financial year ended 31 December 2021 of £9.9m (2020: £56.2m loss).
I Garat C Davies
Group Chief Executive Group Chief Financial Officer
9 March 2022
Company Number 02590560
Note
2021
£m
2020
£m
Non-current assets
Intangible assets 4 0.7 0.6
Property, plant and equipment 5 0.1 –
Investments in subsidiaries 6 2,090.3 1,991.1
Debtors: amounts falling due after more than one year 9 803.2 701.2
Derivative financial instruments 7 9.6 1.1
Deferred tax assets 14 18.7 21.1
Defined benefit pension asset 18 3.8 12.3
Total non-current assets 2,926.4 2,727.4
Current assets
Debtors: amounts falling due within one year 8 37.5 52.8
Derivative financial instruments 7 10.7 44.5
Cash at bank and in hand 10 303.6 389.9
Total current assets 351.8 487.2
Current liabilities
Creditors: amounts falling due within one year 11 (292.1) (238.0)
Derivative financial instruments 7 (24.0) (6.0)
Provisions for liabilities and charges 13 (0.6) (0.9)
Total current liabilities (316.7) (244.9)
Net current assets 35.1 242.3
Total assets less current liabilities 2,961.5 2,969.7
Non-current liabilities
Creditors: amounts falling due after more than one year 12 (1,034.8) (1,052.9)
Derivative financial instruments 7 (10.9) (6.7)
Provisions for liabilities and charges 13 (1.3) (1.9)
Deferred tax liability 14 (0.7) (2.3)
Total non-current liabilities (1,047.7) (1,063.8)
Net assets 1,913.8 1,905.9
Shareholders’ equity
Called-up share capital 16 30.7 30.7
Share premium account 533.6 533.6
Own shares (4.5) (3.5)
Hybrid reserve 513.0 497.6
Other reserves 17 225.4 224.4
Retained earnings 615.6 623.1
Shareholders’ equity 1,913.8 1,905.9
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
205
Company Balance Sheet
At 31 December 2021

206
The Company’s retained earnings include £372.6m (2020: £380.9m) that is available for distribution. Cumulative gains on the Company’s
defined benefit pension scheme, which is currently in a net surplus position, are deemed to be not distributable. In addition, own shares
have been purchased out of distributable profits and therefore reduce the reserves available for distribution. Share premium, the capital
redemption reserve and the hybrid reserve are also not distributable. Within other reserves, the merger reserve is fully distributable, and the
capital redemption, hedging and cost of hedging reserves are not distributable.
Details of dividends paid, declared and proposed during the year are given in note 12 to the Group Consolidated Financial Statements.
In May 2020, the Company issued 101,918,947 ordinary shares of 230p each. The net proceeds were £229.1m and as the share issue
qualified for merger relief under Section 612 of the Companies Act 2006, the excess of the net proceeds over the nominal value of the
shares issued was credited to a merger reserve, within other reserves, rather than the share premium account (see note 17). At the same
time, the Company directly issued 428,782 ordinary shares of 230p each to members of the Board and executive management team. The
net proceeds were £1.0m and the excess proceeds over the nominal value of the shares were recorded in share premium.
In November 2020, the Company issued a Sterling denominated hybrid instrument of £500m, with an annual coupon rate of 4.25%.
The contractual terms of the instruments allow the Company to defer coupon payments and the repayment of the principal indefinitely.
However, any deferred payments must be made in the event of a dividend distribution. The terms also allow for the instrument to be
redeemed at the option of the Company at 5 years after issue (first call date) and 10 years (second call date), and subsequently at each
coupon date or in the event of highly specific circumstances (such as a change in IFRS or change of control). As the Company has the
unconditional right to avoid transferring cash or another financial asset in relation to this instrument, it is classified in Equity. The annual
coupon rate is fixed for the first five years, and thereafter reset according to the specific terms of the issuance. The net proceeds
were £495.5m.
Share
capital
£m
Share
premium
account
£m
Own
shares
(note 16)
£m
Hybrid
reserve
£m
Other
reserves
(note 17)
£m
Retained
earnings
£m
Total
£m
A
t 1 January 2021 30.7 533.6 (3.5) 497.6 224.4 623.1 1,905.9
Profit for the year – – – – – 9.9 9.9
A
ctuarial loss, net of tax – – – – – (0.1) (0.1)
Revaluation through Other Comprehensive Income – – – – 1.8 – 1.8
Transfers to the Income Statement on cash flow hedges – – – – (0.8) – (0.8)
Total comprehensive expense – – – – 1.0 9.8 10.8
Shares purchased – – (2.5) – – – (2.5)
Own shares released to satisfy employee share schemes – – 1.5 – – (1.5) –
Share-based payments – – – – – 1.0 1.0
Issuance of hybrid instrument (net of transaction costs) – – – (0.5) – – (0.5)
A
ccrued payments on hybrid instrumen
t
– – – 21.2 – (21.2) –
Payments on hybrid instrument – – – (5.3) – – (5.3)
Deferred tax on hybrid bond payments – – – – – 4.4 4.4
A
t 31 December 2021 30.7 533.6 (4.5) 513.0 225.4 615.6 1,913.8
Share
capital
£m
Share
premium
account
£m
Own
shares
(note 16)
£m
Hybrid
reserve
£m
Other
reserves
(note 17)
£m
Retained
earnings
£m
Total
£m
A
t 1 January 2020 25.6 532.7 (6.0) – (5.6) 688.5 1,235.2
Loss for the year – – – – – (56.2) (56.2)
A
ctuarial loss, net of tax – – – – – (0.8) (0.8)
Revaluation through Other Comprehensive Income – – – – (0.3) – (0.3)
Transfers to the Income Statement on cash flow hedges – – – – 6.2 – 6.2
Total comprehensive expense – – – – 5.9 (57.0) (51.1)
Shares issued during the year (net of transaction costs) 5.1 0.9 – – 224.1 – 230.1
Shares purchased – – (3.9) – – – (3.9)
Own shares released to satisfy employee share schemes – – 6.4 – – (6.4) –
Share-based payments – – – – – (0.3) (0.3)
Issuance of hybrid instrument (net of transaction costs) – – – 495.5 – – 495.5
A
ccrued payments on hybrid instrumen
t
– – – 2.1 – (2.1) –
Deferred tax on hybrid bond payments – – – – – 0.4 0.4
A
t 31 December 2020 30.7 533.6 (3.5) 497.6 224.4 623.1 1,905.9
National Express Group PLC Annual Report 2021
Financial Statements continued
206
Company Statement of Changes in Equity
For the year ended 31 December 2021

207
1 Accounting policies
Basis of preparation
The separate accounts of the parent Company are presented as required by the Companies Act 2006. The accounts have been prepared
on a going concern basis and under the historical cost convention, except for certain derivative financial instruments which have been
measured at fair value, and in accordance with applicable accounting standards in the United Kingdom.
The Company meets the definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial
Reporting Council. Accordingly, these Financial Statements have been prepared in accordance with Financial Reporting Standard 101 (FRS
101) ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council.
The Company has taken advantage of the disclosure exemptions available under FRS 101 in relation to share-based payments, financial
instruments, capital management, presentation of comparative information in respect of certain assets, presentation of a cash flow
statement, IFRS 16 ‘Leases’, standards not yet effective, impairment of assets and related party transactions. Where required, equivalent
disclosures are included within the Consolidated Accounts.
No Income Statement is presented by the Company as permitted by Section 408 of the Companies Act 2006. The profit or loss attributable
to the Company is disclosed in the footnote to the Company’s Balance Sheet.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Company’s accounts in conformity with generally accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the accounts and the reported amounts of revenues
and expenses during the reporting period. Although these estimates are based on management’s best knowledge, actual results may
ultimately differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision
affects both current and future periods.
No critical accounting judgements or key sources of estimation uncertainty have been identified in the year.
Intangible assets
Acquired and internally developed software is capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. Amortisation is charged on a straight-line basis over the expected useful lives of the assets
as follows:
The useful lives are examined on an annual basis and adjustments, where applicable, are made on a prospective basis. Intangible assets
are reviewed for impairment when events or changes in circumstances indicates that the carrying value may not be recoverable.
Property, plant and equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment. They are depreciated on
a straight-line basis over their estimated useful lives as follows:
The carrying value is reviewed for impairment if events or changes in circumstances indicate that the current carrying value may not be
recoverable. Repairs and maintenance are charged to the Income Statement during the financial period in which they are incurred.
Investments in subsidiaries
Investments are held at historical cost less any provision for impairment.
Software − 3 to 10 years
Land and buildings − 10 years
Plant and equipment − 3 to 5 years
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
207
Notes to the Company Accounts
For the year ended 31 December 2021

208
1 Accounting policies continued
Interest-bearing loans and borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of issue costs. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.
Hedge accounting is adopted where derivatives such as fixed to floating interest rate swaps are held as fair value hedges against fixed
interest rate borrowings. Under fair value hedge accounting, fixed interest rate borrowings are revalued at each balance sheet date by
the change in fair value attributable to the interest rate being hedged.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an
outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.
Retirement benefits
Defined contribution schemes
Payments to defined contribution schemes are charged to the Income Statement as they fall due. The Company has no legal or
constructive obligation to pay further contributions into a defined contribution scheme if the fund has insufficient assets to pay all
employees’ benefits relating to employee service in the current and prior periods.
Defined benefit schemes
Plan assets, including qualifying insurance policies, are measured at fair value and plan liabilities are measured on an actuarial basis, using
the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality corporate bond
of equivalent currency and term to the plan liabilities. The difference between the value of plan assets and liabilities at the period-end date
is the amount of surplus or deficit recorded in the Company Balance Sheet as an asset or liability. An asset is recognised when the
employer has an unconditional right to use the surplus at some point during the life of the plan or on its wind-up.
Current service costs are recognised within operating costs in the Income Statement. Past service costs and gains, which are the change
in the present value of the defined benefit obligation for employee service in prior periods resulting from plan amendments, are recognised
immediately as the plan amendment occurs. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset
and is recognised within finance costs.
Re-measurements comprise actuarial gains and losses and the return on plan assets (excluding amounts included in net interest). Actuarial
gains and losses may result from differences between the actuarial assumptions underlying the plan liabilities and actual experience during
the year or changes in the actuarial assumptions used in the valuation of the plan liabilities. Re-measurement gains and losses, and
taxation thereon, are recognised in Other Comprehensive Income and are not reclassified to profit or loss in subsequent periods.
Full actuarial valuations are carried out triennially and are updated for material transactions and other material changes in circumstances up
to the end of the reporting period.
Share-based payments
The Company awards equity-settled share-based payments to certain employees, under which the Company receives services from
employees as consideration for equity instruments (options) of the Company. The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of
the options granted, excluding the impact of any non-market service and performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the Company over a specified time period). Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. The total amount expensed is recognised over the vesting period,
which is the period over which all of the specified vesting conditions are to be satisfied. At each balance sheet date, the Company revises
its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in the Income Statement, with a corresponding adjustment to equity.
Foreign currencies
Foreign currency assets and liabilities are translated into Sterling at the rates of exchange ruling at the year end. Foreign currency
transactions arising during the year are translated into Sterling at the rate of exchange ruling on the date of the transaction.
Any exchange differences arising are recorded in the Income Statement.
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
208

209
1 Accounting policies continued
Deferred tax
Deferred tax is provided in full in respect of all material temporary differences at the balance sheet date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes, apart from where the Company is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is measured on a non-discounted basis at tax rates that are expected to apply in the periods in which the temporary
differences reverse based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is considered more likely than not that future taxable profits will be available against
which the underlying temporary differences can be deducted. Their carrying amount is reviewed at each balance sheet date on the same basis.
Equity instruments
Hybrid instruments
Hybrid instruments issued by the Company are classified on initial recognition according to the substance of the arrangement. Hybrid
instruments are recorded within equity where the contractual terms of the instruments allow the Company to defer coupon payments and
the repayment of the principal amount indefinitely. These features give the Company the unconditional right to avoid the payment of cash
or another financial asset for the principal or coupon and consequently are classified as equity instruments. These equity instruments are
not re-measured from period to period. Coupon payments made are treated the same as an equity dividend distribution and where not
made, are accrued within the hybrid reserve, with a corresponding reduction in retained earnings.
Derivative financial instruments
The Company uses derivative financial instruments such as interest rate derivatives, foreign currency forward exchange contracts and
cross currency swaps to hedge its risks associated with interest rate fluctuations and foreign currency. Such derivative financial
instruments are initially recognised at fair value and subsequently re-measured to fair value for the reported Balance Sheet. Derivatives are
carried as financial assets when the fair value is positive a
nd as financial liabilities when the fair value is negative. The fair value of the
derivative is calculated by reference to market exchange rates and interest rates at the period end.
For fair value hedges designated as interest rate derivatives, the gain or loss on the hedging instrument is recognised immediately in the
Income Statement. The carrying amount of the hedged item is adjusted through the Income Statement for the gain or loss on the hedged
item attributable to the hedged risk, in this case movements in the risk free interest rate. Hedge accounting is discontinued when the
hedging instrument expires, is sold, terminated, or exercised, or no longer qualifies for hedge accounting.
For cross currency swaps designated as cash flow hedges, the gain or loss on the hedging instrument that is determined to be an effective
hedge is recognised in equity. The gains or losses deferred in equity in this way are recycled through the Income Statement in the same
period in which the hedged underlying transaction or firm commitment is recognised in the Income Statement.
Gains and losses are recognised immediately in the Income Statement.
The Company also uses foreign currency forward contracts to hedge certain transactional exposures. These contracts are not hedge
accounted and all gains and losses are taken directly to the Income Statement.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
209

210
2 Exchange rates
The most significant exchange rates to UK Sterling for the Company are as follows:
3 Directors’ emoluments
Detailed information concerning Directors’ emoluments, shareholdings and options is shown in the Directors’ Remuneration Report.
4 Intangible assets
5 Property, plant and equipment
Not included within property, plant and equipment are leases that fall under the short-term exemption under IFRS 16. Rental costs
expensed during the current year relating to these leases amounted to £0.4m (2020: £0.4m).
2021 2020
Closing rate Average rate Closing rate Average rate
US Dollar 1.35 1.38 1.37 1.28
Canadian Dollar 1.71 1.72 1.74 1.72
Euro
1.19 1.16 1.12 1.13
Software
£m
Cost:
A
t 1 January 2021 0.6
A
dditions 0.1
A
t 31 December 2021 0.7
A
mortisation:
A
t 1 January 2021 –
A
mortisation charg
e
–
A
t 31 December 2021 –
Net book value:
A
t 31 December 2021 0.7
A
t 1 January 2021 0.6
Plant and
equipment
£m
Cost:
A
t 1 January 2021 –
A
dditions 0.1
A
t 31 December 2021 0.1
Depreciation:
A
t 1 January 2021 –
Depreciation charge
–
A
t 31 December 2021 –
Net book value:
A
t 31 December 2021 0.1
A
t 1 January 2021 –
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
210

211
6 Investments in subsidiaries
The addition in the year represents an additional investment in National Express Intermediate Holdings Limited.
The Company assesses its investments in subsidiaries annually for indicators of impairment. The Company has performed a detailed
assessment in the current year given that the Group’s market capitalisation value remains below the net carrying amount of investments in
subsidiaries, which is seen as an indicator of potential impairment; as well as the continued impact of the Covid-19 pandemic on the wider
Group’s future cash flow projections.
This assessment showed that the value in use significantly exceeds the net carrying value of the investment in subsidiaries, and as a result
no impairment was required. The recoverable amount has been determined with reference to the value in use of each of the underlying
trading companies, calculated on the same basis as detailed in note 14 to the Group Consolidated Financial Statements.
During the year an impairment was reversed in relation to the investment held in National Express Financing LP, a US Dollar denominated
investment in a head office financing company. The Sterling-translated recoverable amount has increased such that it is now in excess of
the investment value due to exchange rate movements and an impairment reversal of £9.4m was recorded.
The information provided below is given for the Company’s principal subsidiaries. A full list of subsidiaries and investments can be found in
note 40 to the Group Consolidated Financial Statements. The principal country of operation in respect of the companies below is the
country in which they are incorporated and all holdings are 100% held directly by the Company:
Incorporated in England and Wales
National Express Intermediate Holdings Limited Holding company for the majority of the Group’s operating companies
National Express Finance Company Limited Finance company for Group fuel derivative arrangements
National Express Financing LP UK incorporated limited partnership
£m
Cost or valuation:
A
t 1 January 2021 2,532.4
A
dditions 89.8
A
t 31 December 2021 2,622.2
Provisions:
At
1 January 2021 541.3
Reversed in the year
(9.4)
A
t 31 December 2021 531.9
Net carrying amount:
A
t 31 December 2021 2,090.3
A
t 1 January 2021 1,991.1
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
211

212
7 Derivative financial instruments
Full details of the Group’s financial risk management objectives and policies can be found in note 30 to the Group Consolidated Financial
Statements. As the holding company for the Group, the Company faces similar risks over foreign currency and interest rate movements.
8 Debtors: amounts falling due within one year
Expected credit losses in respect of amounts owed by subsidiary undertakings due within one year were £nil (2020: £1.4m) at the
reporting date.
9 Debtors: amounts falling due after more than one year
Expected credit losses in respect of amounts owed by subsidiary undertakings due after more than one year were £1.9m (2020: £nil) at the
reporting date.
10 Cash at bank and in hand
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
periods of between one day and three months depending on the immediate cash requirements of the Company, and earn interest at the
respective short-term deposit rates. The fair value of cash equals the carrying value.
2021
£m
2020
£m
Cross currency swaps
9.6 1.1
Non-current derivative financial assets 9.6 1.1
Interest rate derivatives 0.1 1.5
Cross currency swaps 2.4 2.2
Foreign exchange forward contracts
8.2 40.8
Current derivative financial assets
10.7 44.5
Interest rate derivatives (5.7) –
Cross currency swaps (5.2) (6.7)
Non-current derivative financial liabilities
(10.9) (6.7)
Interest rate derivatives (0.7) –
Cross currency swaps (4.5) –
Foreign exchange forward contracts
(18.8) (6.0)
Current derivative financial liabilities
(24.0) (6.0)
2021
£m
2020
£m
A
mounts owed by subsidiary undertakings 26.9 49.2
Corporation tax recoverable 3.5 –
Other debtors
0.6 1.2
Prepayments
6.5 2.4
37.5 52.8
2021
£m
2020
£m
A
mounts owed by subsidiary undertakings 801.7 701.2
Prepayments 1.5 –
803.2 701.2
2021
£m
2020
£m
Cash at bank
74.6 60.9
Short-term deposits 229.0 329.0
303.6 389.9
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
212

213
11 Creditors: amounts falling due within one year
Trade creditors are non-interest bearing and are normally settled on 30-day terms.
12 Creditors: amounts falling due after more than one year
13 Provisions for liabilities and charges
Provisions for liabilities and charges relates to restructuring activities and is expected to be utilised within the next five years.
2021
£m
2020
£m
Trade creditors
7.5 3.7
A
mounts owed to subsidiary undertakings 208.2 91.3
A
ccruals and deferred income 15.8 65.5
A
ccrued interest on borrowings 2.8 4.1
Bank overdrafts
57.8 –
Private placements
– 70.9
Corporation tax payable
– 2.5
292.1 238.0
2021
£m
2020
£m
Bonds
640.9 647.0
Private placements 393.9 405.9
1,034.8 1,052.9
Total
£m
A
t 1 January 2021 2.8
Utilised in the year (0.3)
Released in the year
(0.6)
A
t 31 December 2021 1.9
Current 31 December 2021 0.6
Non-current 31 December 2021 1.3
1.9
Current 31 December 2020 0.9
Non-current 31 December 2020 1.9
2.8
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
213

214
14 Deferred tax
Deferred tax included in the Balance Sheet is as follows:
The major components of the provision for deferred taxation are as follows:
A reconciliation of the deferred tax balances is as follows:
Timing differences associated with investments
No deferred tax (2020: £nil) is recognised on the unremitted earnings of subsidiaries and associates, as no dividends have been accrued
as receivable and no binding agreement to distribute the past earnings in the future has been entered into by the subsidiaries.
Unrecognised tax losses
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit
against future taxable profits is probable. Deferred tax assets that the Company has not recognised in the accounts amount to £nil
(2020: £nil).
2021
£m
2020
£m
Deferred tax assets
18.7 21.1
Deferred tax liability (0.7) (2.3)
Net deferred tax asset
18.0 18.8
2021
£m
2020
£m
A
ccelerated capital allowances 0.1 0.1
Other timing differences 0.1 0.1
Losses carried forward 18.5 20.9
Defined benefit pension (0.7) (2.3)
Net deferred tax asset 18.0 18.8
Deferred tax
assets
£m
Deferred tax
liability
£m
Deferred tax at 1 January 2021 21.1 (2.3)
Tax (charge)/credit to Income Statement (6.8) 1.6
Tax credit to Other Comprehensive Income 4.4 –
Deferred tax at 31 December 2021 18.7 (0.7)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
214

215
15 Interest-bearing loans and borrowings
The effective interest rates at the balance sheet date were as follows:
The Company currently has £495.0m of unsecured committed revolving credit facilities, of which £15.0m matures in 2024 and £480.0m
matures in 2025. At 31 December 2021, there was £nil (2020: £nil) drawn down on the facilities, with £1.5m of capitalised deal fees
remaining, which are classified within prepayments.
Details of the Company’s interest rate management strategy and interest rate swaps are included in notes 30 and 31 to the Group
Consolidated Financial Statements.
16 Called-up share capital
In May 2020, the Company issued 101,918,947 ordinary shares of 230p each. The net proceeds were £229.1m and, as the share issue
qualified for merger relief under Section 612 of the Companies Act 2006, the excess of the net proceeds over the nominal value of the
shares issued was credited to a merger reserve rather than the share premium account (see note 17). At the same time, the Company
directly issued 428,782 ordinary shares of 230p each to members of the Board and executive management team. The net proceeds were
£1.0m and the excess proceeds over the nominal value of the shares were recorded in share premium.
The total number of share options exercised in the year by employees of the Company was 402,244 (2020: 1,552,919) of which all (2020:
all) exercises were satisfied by transferring shares from the National Express Employee Benefit Trust.
Own shares
Own shares comprises 1,489,069 (2020: 877,337) ordinary shares in the Company that have been purchased by the trustees of the National
Express Employee Benefit Trust (the Trust). During the year, the Trust purchased 1,013,976 (2020: 1,025,505) shares and 402,244 (2020:
1,552,919) shares were used to satisfy options granted under a number of the Company’s share schemes. No shares (2020: nil) were sold
during the year to the open market.
The market value of the shares held by the Trust at 31 December 2021 was £3.8m (2020: £2.1m). No dividends were payable on these
shares in either 2021 nor 2020.
2021
£m Maturity
Effective
interest rate
2020
£m Maturity
Effective
interest rate
Current
Bank overdrafts 57.8 – – – – –
Euro private placement
– – – 70.9 August 2021 4.55%
A
ccrued interest on borrowings 2.8 – – 4.1 – –
Total current
60.6 75.0
Non-current
7-year Sterling bond 400.1 November 2023 2.54% 400.1 November 2023 2.54%
9-year Sterling bond
240.8 November 2028 GBP SONIA + 1.98% 246.9 November 2028 2.38%
US private placement
393.9 2027-2032 1.92% 405.9 2027-2032 1.92%
Total non-current
1,034.8 1,052.9
Issued called-up and fully paid: No. of shares
2021
£m No. of shares
2020
£m
A
t 1 January
614,086,377 30.7
511,738,648 25.6
Issued during the year – – 102,347,729 5.1
A
t 31 December 614,086,377 30.7 614,086,377 30.7
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
215

216
17 Other reserves
The nature and purpose of the other reserves are as follows:
− The cash flow hedge reserve records the movements on designated hedging instruments.
− The cost of hedging reserve records the movements in the currency basis, which are excluded from the hedging instrument on the
designated hedging instruments in the cash flow hedge reserves.
− The merger reserve included the premium on the share issue during the prior year, as described in note 16.
Capital
redemption
reserve
£m
Cash flow
hedge
reserve
£m
Cost of
hedging
reserve
£m
Merger
reserve
£m
Total
£m
A
t 1 January 2021 0.2 0.7 (0.6) 224.1 224.4
Gains on hedging – 1.8 – – 1.8
Hedging gains reclassified to Income Statement
– (0.8) – – (0.8)
A
t 31 December 2021 0.2 1.7 (0.6) 224.1 225.4
Capital
redemption
reserve
£m
Cash flow
hedge
reserve
£m
Cost of
hedging
reserve
£m
Merger
reserve
£m
Total
£m
A
t 1 January 2020 0.2 (5.8) – – (5.6)
Gains on hedging – 0.2 (0.5) – (0.3)
Hedging gains reclassified to Income Statement
– 6.3 (0.1) – 6.2
Shares issued during the year (net of transaction costs)
– – – 224.1 224.1
At
31 December 2020 0.2 0.7 (0.6) 224.1 224.4
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
216

217
18 Retirement benefits
The Company participates in both the National Express Group Staff Pension Fund (a defined benefit scheme) and a defined
contribution scheme.
Defined benefit scheme
The defined benefit scheme is now closed to all future accrual. The scheme was subject to a buy-in transaction on 11 October 2018
whereby the assets of the plan were invested in a bulk purchase annuity policy with the insurer Rothesay Life under which the benefits
payable to defined benefit members became fully insured. On 23 September 2021, a full buy-out of the defined benefit section was
completed, following which Rothesay Life has become fully and directly responsible for the pension obligations. On completion of the buy-
out, the defined benefit assets (comprising the Rothesay Life insurance policy) and matching defined benefit liabilities were derecognised.
The buy-out transaction also triggered the return of surplus assets of £7.5m, with the remaining assets retained in the scheme intended to
cover final expenses in completing the wind-up of the scheme.
The assets of the scheme are held separately from those of the Company.
The valuation as at 31 December 2021 is based on the results of the 5 April 2016 actuarial valuation, which has been updated by
independent professionally qualified actuaries to take account of the requirements of IAS 19. Following the buy-out of the Company
scheme there are no remaining pension liabilities at 31 December 2021, therefore a full set of assumptions was not derived. Therefore, the
Company assumptions listed below are those used to derive the schemes valuation immediately preceding the buy-out transaction. The
assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescale
covered, may not necessarily be borne out in practice. Details of the latest actuarial valuation are included in note 34 to the Group
Consolidated Financial Statements.
The relevant assumptions used are as follows:
Sensitivities regarding key assumptions are disclosed in note 34 to the Group Consolidated Financial Statements.
The amounts charged to the Income Statement and Other Comprehensive Income for the years ended 31 December 2021 and 2020 are set
out in the following tables:
During the year, £1.1m (2020: £0.8m) of administrative expenses were incurred.
The past service cost in 2020 relates to Guaranteed Minimum Pension (GMP) equalisation. In October 2018 the High Court ruled that GMP
should be equalised between men and women. Whilst in 2018 the Company equalised benefits for existing members, a further High Court
ruling in November 2020 provided further detail and this resulted in a further charge with respect to members who have transferred out of
the scheme in prior years.
2021 2020
Rate of increase of pensions 3.4% 2.9%
Discount rate 2.0% 1.4%
Inflation assumption (RPI) 3.4% 2.9%
Inflation assumption (CPI) 2.8% 2.3%
Post-retirement mortality in years:
Current pensioners at 65 – male 22.4 22.4
Future pensioners at 65 – male 23.7 23.7
Current pensioners at 65 – female 25.1 25.1
Future pensioners at 65 – female 26.6 26.6
Income Statement
2021
£m
2020
£m
Past service cost
– (0.8)
Settlement gain 0.1 –
Net interest income
0.1 0.3
Total credit/(charge) to the Income Statement
0.2 (0.5)
Other Comprehensive Income
2021
£m
2020
£m
A
ctuarial gain/(loss) during the period from obligations 7.5 (17.0)
Expected return on plan assets (less)/greater than discount rate (7.6) 16.4
Net actuarial loss
(0.1) (0.6)
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
217

218
18 Retirement benefits continued
The amounts recognised in the Balance Sheet at 31 December are as follows:
The movement in the present value of the defined benefit obligation in the year is as stated below:
The movement in the fair value of scheme assets is as follows:
2021
£m
2020
£m
Fair value of scheme assets at 1 January
122.8 109.3
Expected return on plan assets 1.2 2.2
Expected return on plan assets (less)/greater than discount rate
(7.6) 16.4
Cash contributions – employer
(7.5) –
A
dministrative expenses (1.1) (0.8)
Loss on settlement
(100.3) –
Benefits paid
(3.7) (4.3)
Fair value of scheme assets at 31 December
3.8 122.8
The employer cash contribution of £7.5m in the scheme represents the surplus returned to the Company upon the buy-out transaction
completing.
2021
£m
2020
£m
Insurance policy
– 109.0
Other 3.8 13.8
Fair value of scheme assets
3.8 122.8
Present value of scheme liabilities and defined benefit obligation – (110.5)
Defined benefit pension surplus
3.8 12.3
2021
£m
2020
£m
Defined benefit obligation at 1 January
(110.5) (95.1)
Past service cost – (0.8)
Benefits paid
3.7 4.3
Finance charge
(1.1) (1.9)
Gain on settlements
100.4 –
A
ctuarial gain/(loss) arising from changes in financial assumptions 7.3 (17.8)
A
ctuarial gain/(loss) arising from changes in demographics 0.2 (0.2)
A
ctuarial gain arising from experience adjustments – 1.0
Defined benefit obligation at 31 December
– (110.5)
History of experience gains and losses:
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Fair value of scheme assets
3.8 122.8 109.3 98.6 134.0
Present value of defined benefit obligation – (110.5)(95.1) (83.7) (90.8)
Surplus in the scheme
3.8 12.3 14.2 14.9 43.2
Experience adjustments arising on liabilities – 1.0 0.3 (2.3) –
Experience adjustments arising on assets
(7.6)
16.4
10.8 (35.6) (0.4)
National Express Group PLC Annual Report 2021
Financial Statements continued
Notes to the Company Accounts continued
For the year ended 31 December 2021
218

219
19 Share-based payments
During the year ended 31 December 2021, the Company had a number of share-based payment arrangements, which are described in note
8(b) to the Group Financial Statements.
The options have a weighted average contractual life of one year (2020: one year). Options were exercised throughout the year and the
weighted average share price at exercise was 291p (2020: 210p).
20 Commitments and contingencies
Contingent liabilities
Guarantees
The Company has guaranteed credit facilities totalling £3.7m (2020: £7.3m) of certain joint ventures. The Company has also guaranteed
certain liabilities of a number of its subsidiaries under Section 479C of the Companies Act 2006. These subsidiaries are highlighted in the
full subsidiaries listing in note 40 to the Group Financial Statements.
Bonds and letters of credit
In the ordinary course of business, the Company is required to issue counter-indemnities in support of its operations. As at 31 December
2021, the Company had performance bonds in respect of businesses in the USA of £113.7m (2020: £165.3m), in Spain of £88.1m (2020:
£106.7m), in Germany of £30.0m (2020: £32.0m), and in the Middle East of £6.0m (2020: £6.0m). Letters of credit have been issued to
support insurance retentions of £145.0m (2020: £117.2m).
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
219

220
1
Net of arrangement fees totalling £1.5m on bank and other loans
2
Lease liabilities are reported net of finance lease receivables that are reported separately from borrowings on the face of the Group’s Balance Sheet
3
Net debt in 2020 and 2019 have been restated for a change in presentation in advance subsidy factoring liabilities from other payables to borrowings – see note 2 for
further information
4
Restated to reflect a change in the presentation of cash and cash equivalents and bank overdrafts. See note 2 for further information
2021 2020
3,4
2019
3,4
2018 2017
Group underlying
Revenue 2,170.3 1,955.92,744.4 2,450.72,321.2
Underlying operating profit/(loss) 87.0 (50.8) 295.3 257.7 241.5
Return on capital 3.4% (2.0)% 12.4% 12.4% 11.9%
Basic EPS 0.1 (14.6) 34.5 32.9 29.1
IFRS
Revenue 2,170.3 1,955.92,744.4 2,450.72,321.2
Operating (loss)/profit (36.2) (381.4) 242.3 215.4 197.9
PBT (84.9) (447.7) 187.0 177.7 156.4
Basic EPS (16.8) (57.9) 27.6 26.6 25.7
Dividends per share Nil Nil 16.4 14.9 13.5
Net (debt)/funds
Cash
4
508.4 629.8 715.8 117.7 314.3
Bank overdrafts
4
(132.2) (109.3) (237.5) – –
Other debt receivable 1.0 1.2 2.4 2.1 0.7
Bonds (640.9) (647.0)(1,081.9) (852.4) (851.9)
Bank loans
3
(189.6)
1
(101.8) (242.6) (9.0) (115.6)
Fair value of derivatives included in financing activities (3.7) (4.7) 15.0 6.4 11.3
Lease liabilties
2
(218.9) (311.3) (385.0) (142.6) (173.1)
Private placements (393.9) (476.8)(68.3) (73.7) (73.6)
Net debt
3
(1,069.8) (1,019.9) (1,282.1) (951.5) (887.9)
National Express Group PLC Annual Report 2021
220
Five Year Summary
Additional information

In 2019, we introduced a new approach to measuring and assessing our environmental performance, using the Sectoral Decarbonisation
Approach (SDA) methodology to set ourselves a number of new environmental targets, alongside more traditional environmental targets or
key performance indicators (together, the KPIs). The SDA methodology is the only approach with transport sector-specific metrics, using
climate science to enable organisations to set targets relevant to their industry. We set new SDA KPIs on traction energy usage, traction
carbon emissions and total (Scope 1 & 2) carbon emissions, which at the time met the 2018 Intergovernmental Panel on Climate Change
(IPCC) goal of controlling the increase in global warming to below 2°C. The SDA KPIs were set over an initial seven-year performance period
– 2019 to 2025 – from a 2018 baseline. We supplemented these SDA targets with KPIs on site emissions, waste to landfill and water usage,
which we also aim to achieve over the same seven-year performance period against a 2018 baseline.
Our intention is to review the SDA KPIs on a regular basis as climate science, technology and forecasting methods improve. In this context,
we are already considering how best to recalibrate the SDA KPIs in light of the updated 1.5°C target arising from the recent revised climate
agreement. At this stage the sectoral guidance has yet to be published. It should be noted that wherever these targets settle, we have
committed to an overarching goal of achieving net zero (Scope 1 & 2 emissions) across the Group by 2040.
Summary 2021 performance
Since the beginning of the global pandemic in 2020, we have seen a significant impact on all aspects of our business, and the restrictions
on mobility have had two marked impacts on our environmental KPIs:
1. absolute metrics have materially improved (i.e. emissions reduced) as we have travelled significantly fewer miles and sites have been
closed for long periods; but
2. intensity metrics have worsened (i.e. emissions per passenger km have increased) driven by lower occupancy across the business
anda mix away from long distance coach businesses and into urban bus businesses.
Reduction target description (metric)
Base year
(2018)
2025
target 2020 2021
Change from
base year
Change
2020-2021
Required to
meet target
Traction Energy: (vehicle fuel and electricity)
MWh/mpkm 66.92 58.72 71.40 86.19 28.8% 20.7% (31.9)%
Traction Carbon Emissions tCO
2
e/mpkm 17.67 15.45 22.28 24.15 36.7% 8.4% (36.0)%
Total Scope 1 & 2 emissions tCO
2
e/mpkm 19.26 16.45 23.60 25.34 31.2% 5.9% (34.9)%
Site Scope 1 & 2 Emissions (building use
only) tCO
2
e 41,656 38,199 36,549 31,683 (23.9)% (13.3)% Met
Landfill Waste Disposal tonnes 7,711 5,783 5,773 4,491 (41.8)% (22.2)% Met
Water Consumption m
3
478,956 439,209 397,731 424,347 (11.4)% 6.7% Met
As the table above shows, not only does 2021 represent a worsening in intensity metrics year-on-year, but they are materially worse than the
base year, now requiring more than 30% improvement by 2025 in order to reach our targets. There remains scope for material improvement
inour intensity metrics as occupancy (and business mix) returns to pre-pandemic levels and we continue to decarbonise the fleet.
To demonstrate the impact of occupancy on intensity metrics, we have normalised the UK Bus and UK Coach performance by setting
occupancy to 2019 levels (holding all other factors fixed). Modelling traction carbon emissions with 2019 utilisation rates gives a normalised
intensity metric similar to 2019 for UK Coach, and an 18% reduction versus 2019 for UK Bus as shown below:
Traction Carbon/mpkm 2019 2021
2021
(normalised)
UK Coach 24.84 27.62 24.79
UK Bus 98.98 136.74 81.64
These are the results we would expect as there has been limited change in fleet specification in UK Coach, whilst in UK Bus we have
retiredthe oldest diesel vehicles and replaced them with Euro VI vehicles or ZEVs.
Absolute emissions
Our absolute traction emissions in 2021 are approximately 84% of the equivalent emissions in 2019 and we have seen significant
improvement in site level (Scope 1 & 2) emissions, waste disposal and water usage.
Scope 1 emissions (from combustion of fuels) have increased by 27.8% in 2021 against 2020 as the business builds back towards
pre-pandemic operating levels, but remain 20% below 2019. Scope 2 emissions (primarily electricity usage) have increased by 8.5%,
primarily driven by the expansion oftheGerman Rail business which mobilised an additional contract in the year. Scope 3 emissions
comprise business travel, waste, water and certain upstream emissions. There is more work to be done to identify and quantify the Group’s
complete Scope 3 footprint. A project has been initiated with that aim in mind and we will report on progress in our 2022 Annual Report.
tCO
2
e emissions by scope 2018 2019 2020 2021
Change
(2020
vs. 2021)
Scope 1 808,650 823,582 514,106 657,239 27.8%
Scope 2 48,583 49,938 67,879 73,649 8.5%
Scope 3 7,627 8,221 8,641 5,762 (33.3)%
Total 864,859 881,741 590,626 736,650 24.7%
Environmental performance
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
221

Additional information
Environmental performance continued
Measuring Scope 2 emissions will become increasingly important as we move towards a more electrified fleet and we expect increasingly
to use renewable energy to recharge our fleets, as we already do in the UK. We have previously noted the complexity in measuring Scope 3
emissions and we have initiated a project to fully capture and quantify our Scope 3 emissions and improve our processes in partnership
with our biggest suppliers. The Group has a multiplier effect on reducing emissions through both modal shift out of cars as well as
decarbonising our own fleet.
We will also continue to report the decarbonisation impact of passengers choosing to travel on public transport rather than in private cars.
tCO
2
e emissions by division 2018 2019 2020 2021
Change
(2020
vs. 2021)
ALSA 317,812 324,007 234,477 368,714 57.3%
Bahrain 20,433 22,833 20,214 17,810 (11.9)%
Germany 25,367 29,269 52,347 58,939 12.6%
United Kingdom 230,354 227,380 142,769 147,789 3.5%
USA and Canada 269,916 276,693 140,168 142,800 1.9%
Business travel & leased vehicles 978 1,559 569 598 5.1%
Group total 864,859 881,741 590,545 736,650 24.7%
Note that the reduction in emissions in Bahrain is due to its refrigerant gas loss halving in 2021, which has more than offset a small rise in traction (diesel) emissions.
In the current year aggregate Scope 1 & 2 GHG emissions in our UK operations amounted to 122,578 tCO
2
e (2020: 93,137 tCO
2
e), and
totalled 582,936 tCO
2
e (2020: 441,532 tCO
2
e) in our global (excluding UK) operations.
Intensity metrics
As our businesses gradually rebuild to normal operating levels, we are rebuilding service ahead of the full return of passengers – passenger
kilometres for 2021 are 63% of the equivalent in 2019. The impact of this is a faster rise in carbon emissions than passenger numbers,
which in turn has resulted in a rise (worsening) in intensity metrics between 2020 and 2021.
Intensity metrics 2018 2019 2020 2021
(2020
vs. 2021)
Group totals (million pass.km) 44,488 46,258 24,656 28,932 17.3%
Traction Carbon Emissions (Scope 1 & 2) tCO
2
e/mpkm 17.67 16.69 22.28 24.15 8.4%
Total tCO
2
e per million pass.km (Scope 1, 2 & 3) 19.46 19.06 23.93 25.34 5.9%
Carbon emissions per passenger kilometre (tCO
2
e/million passenger km) increased by 6% between 2020 and 2021, from 23.93 tcO
2
e/
mpkm in 2020, to 25.34 tcO
2
e/mpkm in 2021. It is important, however, to note that the data shows improvement through the year, with
emissions intensity in the second half of 2021 showing signs of improvement as passenger numbers/load factors continued to recover
atafaster rate to pre-pandemic levels.
Methodology
The method we have used to calculate GHG emissions is the GHG Protocol Corporate Accounting and Reporting Standard (revised
edition), together with the latest emission factors from recognised public sources including, but not limited to, Defra, the International
Energy Agency, the US Energy Information Administration, the US Environmental Protection Agency and the Intergovernmental Panel
onClimate Change.
We have used a materiality threshold of 5%, have accounted for all material sources of GHG emissions and have reported emissions
forthe period 1 January 2021 to 31 December 2021 in line with our Financial Statements.
We are committed to ensuring that our GHG accounting system, results and accompanying reports remain robust, continue to enhance
ourGroup-level emission performance year-on-year and are in compliance with the mandatory requirements of the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (which Regulations implement theGovernment’s
policy on Streamlined Energy and Carbon Reporting (SECR)).
National Express Group PLC Annual Report 2021
222

Streamlined Energy and Carbon Reporting
SECR regulations require the reporting (in MWh rather than tCO
2
in line with existing standards) of the aggregate of:
− the annual quantity of energy consumed from activities for which the Company is responsible, including the combustion of fuel and
the operation of any facility; and
− the annual quantity of energy consumed resulting from the purchase of electricity, heat, steam or cooling by the Company for its own use.
MWh by division 2020 2021
ALSA 840,100 1,325,774
USA and Canada 529,482 515,191
United Kingdom 366,927 489,515
Germany 121,000 137,700
Bahrain 53,314 54,950
All 1,910,823 2,523,130
Energy consumed from the activities for which the Company is responsible, including the combustion of fuel and the
operation of any facility 1,739,101 2,333,066
Energy consumed resulting from the purchase of electricity, heat, steam or cooling 171,721 190,064
All 1,910,822 2,523,130
Proportion of figure that relates to energy consumed in the UK and offshore area 2020 2021
Offshore 1,543,896 2,033,615
United Kingdom 366,927 489,515
UK proportion 19% 19%
This is another way of stating existing disclosures (as it is simply stating the same information in different measurement units) so the drivers of
movement in tCO
2
and kWh for the Group should be broadly the same. The fact that, measured in MWh, emissions are up 32% year-on-year
whereas measured in tCO
2
they are up 25% is driven by a combination of definitions, measurement standards and changes in energy ‘mix’.
Building emissions and waste disposed to landfill have all shown a reduction between 2020 and 2021, but this trend will be skewed by
lower occupancy of buildings. Increased water consumption between 2020 and 2021 reflects greater washing of vehicles as operations
have increased.
During 2021 we have taken a number of steps to improve energy efficiency, including replacing diesel buses with zero emission equivalents.
During 2020 the steps taken to improve energy efficiency included replacing diesel buses with zero emission equivalents and the switching
of energy use in the UK to renewable energy sources.
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
223

Shareholder information
Ordinary shares
The Company’s ordinary shares, each of
nominal value 5 pence, are traded on the
main market for listed securities on the
London Stock Exchange (LON:NEX).
Company website:
www.nationalexpressgroup.com
The Company website contains information
about the Company’s Group and its
operations. Copies of the Company’s
annual reports, results announcements,
general meeting notices and other
corporate communications, together with
information about the Company share price
and dividends, can be found there.
e-Communication
We encourage shareholders to receive
communications from the Company
electronically as this will enable you to
receive them more quickly and securely.
It also allows the Company to communicate
in a more environmentally friendly and cost
effective manner.
To register for this service, you should
goto www.shareview.co.uk.
Unclaimed Assets Register
The Company participates in the
Unclaimed Assets Register (UAR)
programme which provides a search
facility for shareholdings and other
financial assets that may have been
forgotten. For further information call
0333000 0182, or visit: www.uar.co.uk.
ShareGift
ShareGift is an independent charity share
donation scheme administered by the Orr
Mackintosh Foundation (registered charity
number 1052686). Those shareholders
who hold only a small number of shares,
the value of which makes it uneconomic
tosell them, can donate their shares to
ShareGift which will sell them and donate
the proceeds to a wide range of charities.
Further information about ShareGift may
be obtained on 020 7930 3737 or for more
information visit: www.sharegift.org.
Registrar: Equiniti
For assistance and enquiries relating to
the administration of shareholdings in
National Express Group PLC, such as lost
share certificates, dividend payments or
achange of address, please contact the
Company’s Registrar:
Equiniti Limited
Aspect House, Spencer Road
Lancing, West Sussex
BN99 6DA
Telephone from UK:
0371 384 2152*
Telephone from overseas:
+44 (0) 121 415 7047*
Textel (for the hard of hearing):
0371 384 2255*
* Lines are open from 8.30am to 5.30pm, Monday to
Friday, excluding public holidays. Calls are charged
atthe standard geographical rate and will vary by
provider. Calls from outside the UK will be charged
atthe applicable international rate.
If you are registered for online shareholder
communications, you can contact the
Registrar and access details of your
shareholdings electronically via:
www.shareview.co.uk.
Share dealing service
Equiniti provides existing and prospective
UK shareholders with an easy to access
and simple to use share dealing facility
forbuying and selling shares in the
Company by telephone, post or online.
The telephone and online dealing service
allows shareholders to trade ‘real-time’ at
a known price that will be given to them
atthe time they give their instruction.
For telephone dealing, call 0345 603 7037*
(from the UK), +44 121 415 7560* (from
overseas) or 0371 384 2255* (Textel)
* Lines are open from 8.00am to 4.30pm, Monday to
Friday, excluding public holidays. Calls are charged
atthe standard geographical rate and will vary by
provider. Calls from outside the UK will be charged
atthe applicable international rate.
For online dealing, log on to:
www.shareview.co.uk/dealing.
For postal dealing, call 0371 384 2248 for
full details and a dealing instruction form.
Existing shareholders will need to provide
the account/shareholder reference number
shown on their share certificate.
Other brokers, banks and building societies
offer similar share dealing facilities.
Dividends
Having your dividends paid directly into
your bank or building society account is
amore secure way than receiving your
dividend by cheque. If you would prefer
your dividends to be paid directly into
yourbank or building society account,
further information is available from
Equiniti (address and telephone number
tothe left). You will still receive an annual
dividend confirmation detailing each
dividend you receive.
Shareholder security
Share fraud includes scams where
shareholders receive unsolicited calls or
correspondence concerning investment
matters from organisations or persons
claiming or implying that they have some
connection with the Company. These
aretypically from purported ‘brokers’
whooffer to buy shares at a price often
farin excess of their market value. These
operations are commonly known as
‘boilerrooms’.
You should always check that any firm
contacting you about potential investment
opportunities is properly authorised by the
FCA. If you deal with an unauthorised firm
you will not be eligible for compensation
under the Financial Services Compensation
Scheme. You can find out more about
protecting yourself from investment
scamsby visiting the FCA’s website at
www.fca.org.uk/consumers, or by calling
the FCA’s consumer helpline on 0800 111
6768 (overseas callers dial +44 20 7066
1000). If you have already paid money to
share fraudsters contact Action Fraud
immediately on 0300 123 2040, whose
website is: www.actionfraud.police.uk.
Personal data
The Company processes personal data
about its shareholders in compliance
withapplicable laws. A copy of the
Shareholder Privacy Notice explaining
howthe Company processes your
personal data and your rights in respect
ofthat processing can be found at:
https://www.nationalexpressgroup.com/
privacy-centre.
Additional information
National Express Group PLC Annual Report 2021
224

Definitions and
supporting information
Glossary
AGM Annual General Meeting
AI Artificial intelligence
APMs Alternative performance measures
Board The Board of Directors of the Company
Code The UK Corporate Governance Code
published by the FRC in 2018
Company National Express Group PLC
Consolidated
Financial
Statements
The Financial Statements for the Group
for the year ended 31 December 2021
Constant
Currency
Compares current period’s results with
the prior period’s results translated at
thecurrent period’s exchange rates
CPI Consumer Price Index
CRM Customer relationship management
Directors The Directors of the Company
Dividend Dividend amount payable per
ordinaryshare
DTRs Disclosure, Guidance and
TransparencyRules
EDBP Executive Deferred Bonus Plan
EURIBOR Euro Interbank Offered Rate
EV Electric vehicle
Executive
Directors
The Executive Directors of the Company
FCA The Financial Conduct Authority
FRC The Financial Reporting Council
FWI Fatalities and Weighted Injuries
GDP Gross Domestic Product – used to
determine the economic performance
ofawhole country or region
GHG Greenhouse gas emissions
Group The Company and its subsidiaries
andassociates
HMRC Her Majesty’s Revenue and Customs
IAS International Accounting Standards
IFRIC International Financial Reporting
Interpretations Committee
IFRS International Financial
ReportingStandards
KPIs Key performance indicators
LIBOR London Interbank Offered Rate
Listing Rules The Listing Rules of the FCA
LTIP Long-Term Incentive Plan
MaaS Mobility as a service
Net interest
expense
Finance costs less finance income
Non-Executive
Directors
The Non-Executive Directors
oftheCompany
Operating margin
or‘margin’
Ratio of underlying operating profit
torevenue
Ordinary shares Ordinary shares of nominal value
5penceeach in the Company
PBT Profit before tax
RCF Revolving credit facility
RME Rhine-Münster Express
RMS Revenue Management System
RPI Retail Prices Index
RRX Rhine-Ruhr Express
SDA Sectoral Decarbonisation Approach
Stagecoach Stagecoach Group plc
TfL Transport for London
TfWM Transport for West Midlands
TSR Total shareholder return – the growth in
value of a shareholding over a specified
period assuming that dividends are
reinvested to purchase additional shares
Underlying
Operating Margin
Underlying Operating Margin is a measure
used to assess and compare profitability.
It also allows for ongoing trends and
performance of the Group to be measured
by the Directors, management and
interested shareholders
ZEV Zero emission vehicle
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
225

Alternative performance measures
Alternative performance measures
In the reporting of financial information, the Group has adopted various alternative performance measures (APMs). APMs should
beconsidered in addition to IFRS measurements. The Directors believe that these APMs assist in providing useful information on the
underlying performance of the Group, enhance the comparability of information between reporting periods, and are used internally by
the Directors to measure the Group’s performance. The key APMs that the Group focuses on are as follows:
Measure
Closest IFRS
measure Definition and reconciliation Purpose
Underlying
EBITDA
Operating profit
1
Earnings before interest and tax plus depreciation and amortisation.
Itiscalculated by taking Underlying Operating Profit and adding back
depreciation, fixed asset grant amortisation, and share-based payments.
This is illustrated in the Group Chief Financial Officer’s review on page 17.
EBITDA is used as a key measure
tounderstand profit and cash
generation before the impact
ofinvestments (such as capital
expenditure and working capital).
Itisalso used to derive the Group’s
gearing ratio.
Gearing No direct
equivalent
The ratio of covenant net debt to Underlying EBITDA over the last 12
months,after making the following adjustments to EBITDA: including any
pre-acquisition EBITDA generated in that 12-month period by businesses
acquired by the Group during that period; the reversal of IFRS 16 accounting;
the exclusion of the profit or loss from associates; the exclusion of the profit
or loss attributable to minority interest; and the add back of interest costs
arising from the unwind of the discount on provisions.
The gearing ratio is considered a key
measure of balance sheet strength
and financial stability by which the
Group and interested stakeholders
assesses its financial position.
Free cash flow Net cash
generated
from
operating
activities
The cash flow equivalent of Underlying Profit After Tax.
A reconciliation ofUnderlying Operating Profit and net cash flow
fromoperating activities to free cash flow is set out in the supporting
tablesoverleaf.
Free cash flow allows us and external
parties to evaluate the cash generated
by the Group’s operations and is also
a key performance measure for the
Executive Directors‘ annual bonus
structure and management
remuneration.
Net
maintenance
capital
expenditure
No direct
equivalent
Comprises the purchase of property, plant and equipment and intangible
assets, other than growth capital expenditure, less proceeds from their
disposal. It excludes capital expenditure arising from discontinued
operations. It includes the capitalisation of leases incepted in the year
inrespect of existing business.
A reconciliation of capital expenditure in the statutory cash flow statement
to net maintenance capital expenditure (as presented in the Group Chief
Financial Officer’s review) is set out in the supporting tables overleaf.
Net maintenance capital expenditure
is a measure by which the Group
andinterested stakeholders
assessesthe level of investment
innew/existing capital assets
tomaintain the Group’s profit.
Growth capital
expenditure
No direct
equivalent
Growth capital expenditure represents the cash investment in new or
nascent parts of the business, including new contracts and concessions,
which drive enhanced profit growth. It includes the capitalisation of leases
incepted in the year in respect of new business.
Growth capital expenditure is a
measure by which the Group and
interested stakeholders assesses the
level of capital investment in new
capital assets to drive profit growth.
Net debt Borrowings
lesscash and
related hedges
Cash and cash equivalents (cash overnight deposits, other short-term
deposits) and other debt receivables, offset by borrowings (loan notes,
bank loans and finance lease obligations) and other debt payable (excluding
accrued interest).
The components of net debt as they reconcile to the primary Financial
Statements and notes to the accounts is disclosed in note 39.
Net debt is the measure by
whichtheGroup and interested
stakeholders assesses its level
ofoverall indebtedness.
Covenant
netdebt
Borrowings
lesscash and
related hedges
Net debt adjusted for certain items agreed with the Group’s lenders as being
excluded for the purposes of calculating net debt for covenant assessment.
The adjustments principally comprise the exclusion of IFRS 16 liabilities, the
exclusion of amounts owing under arrangements to factor advance subsidy
payments, the add back of trapped cash, and an adjustment to retranslate
any borrowing denominated in foreign currency to the average foreign
currency exchange rates over the preceding 12 months.
Covenant net debt is the measure
thatis applicable in the covenant
gearing test.
Underlying
earnings
Profit after tax Is the Underlying Profit attributable to equity shareholders for the period,
and can be found on the face of the Group Income Statement in the first
column.
Underlying earnings is a key measure
used in the calculation of Underlying
earnings per share.
Underlying
earnings
pershare
Basic earnings
pershare
Is Underlying earnings divided by the weighted average number of shares in
issue, excluding those held in the Employee Benefit Trust which are treated
as cancelled.
A reconciliation of statutory profit to Underlying Profit for the purpose
ofthis calculation is provided within note 13 of the Financial Statements.
Underlying earnings per share
iswidely used by external
stakeholders, particularly in
theinvestment community.
Additional information
National Express Group PLC Annual Report 2021
226

Underlying
Operating Profit
Operating profit
1
Statutory operating profit excluding separately disclosed items, and can
befound on the face of the Group Income Statement in the first column.
Underlying Operating Profit is
akeyperformance measure
fortheExecutive Directors’
annualbonus structure and
management remuneration.
It also allows for ongoing
trendsandperformance of
theGroupto bemeasured by
theDirectors, management
andinterested stakeholders.
Underlying
Operating
Margin
Operating profit
1
divided by
revenue
Underlying Operating Profit/(Loss) divided by revenue. Underlying Operating Margin is
ameasure used to assess and
compare profitability. It also allows
forongoing trends and performance
ofthe Group to be measured by
theDirectors, management and
interested stakeholders.
Return on
capital
employed
(ROCE)
Operating profit
1
and net assets
Underlying Operating Profit divided by average capital employed.
Capitalemployed is net assets excluding net debt and derivative
financialinstruments, and for the purposes of this calculation is
translatedusing average exchange rates.
The calculation of ROCE is set out in the reconciliation tables below.
ROCE gives an indication of the
Group’s capital efficiency and is a
keyperformance measure for the
Executive Directors’ remuneration.
1
Operating profit is presented on the Group Income Statement. It is not defined per IFRS, but is a generally accepted profit measure
Supporting reconciliations
Reconciliation of net cash flow from operating activities to free cash flow
2021
£m
2020
restated
£m
Net cash flow from operating activities 170.9 (114.0)
Remove: Cash payments in respect of IFRIC 12 asset purchases treated as working capital for statutory cash flow* 42.9 –
Remove: Cash expenditure in respect of separately disclosed items 44.4 126.9
Add: Net maintenance capital expenditure (142.1) (215.9)
Add: Other non-cash movements (1.3) (4.0)
Profit on disposal of fixed assets 8.6 11.0
Free cash flow 123.4 (196.0)
* During the year the Group made payments in respect of assets (principally vehicles) acquired to fulfil a contract in Morocco that is accounted for under the IFRIC12 financial asset
model and for which the statutory cash flow for these purchases is accordingly presented as a movement in working capital, with the assets being recorded as contract assets on the
balance sheet rather than in property, plant and equipment or intangible assets. In order to be consistent with the treatment of asset purchases on other contracts, these asset
purchases are reclassified to capital expenditure for the purposes of the “funds flow” presented in the CFO report. The asset purchases in 2021 were in respect of a new contract and
therefore have been reclassified to growth capital expenditure, consistent with other asset purchases for new business and consistent with previous years.
Reconciliation of capital expenditure in statutory cash flow to funds flow
2021
£m
2020
£m
Purchase of property, plant and equipment (168.5) (215.3)
Proceeds from disposal of property, plant and equipment 13.7 17.7
Payments to acquire intangible assets (44.4) (22.7)
Proceeds from disposal of intangible assets 0.7 2.3
Net capital expenditure in statutory cash flow statement (198.5) (218.0)
Add: Profit on disposal of fixed assets (8.6) (11.0)
Add: Capitalisation of leases initiated in the year, less disposals (26.5) (22.2)
Add: Cash payments in respect of IFRIC 12 asset purchases* (42.9) –
Net capital expenditure in the funds flow (presented in the Group Chief Financial Officer’s review) (276.5) (251.2)
Split as:
Net maintenance capital expenditure** (142.1) (215.9)
Growth capital expenditure** (134.4) (35.3)
* See explanation above
** These terms are defined in the glossary of APMs
National Express Group PLC Annual Report 2021
Strategic Report Corporate Governance Financial Statements Additional Information
227

Additional information
Reconciliation of ROCE
2021
£m
2020
restated
£m
Statutory operating profit (36.2) (381.4)
Add back: Separately disclosed items 123.2 330.6
Return – Underlying Operating Profit/(Loss) 87.0 (50.8)
Average net assets 1,462.1 1,294.3
Remove: Average net debt 1,044.9 1,161.1
Remove: Average derivatives, excluding amounts within net debt (13.4) 5.1
Foreign exchange adjustment 33.1 63.9
Average capital employed 2,526.7 2,524.4
Return on capital employed 3.4% (2.0)%
Depreciation and other non-cash items
2021
£m
2020
£m
Depreciation charge 199.7 223.6
Underlying amortisation charge 15.5 16.5
Share-based payments 1.0 0.2
Amortisation of fixed asset grants (3.2) (2.9)
Depreciation and other non-cash items (as disclosed in the “funds flow” in the CFO report) 213.0 237.4
Alternative performance measures continued
National Express Group PLC Annual Report 2021
228

Key contacts and advisers
Group Company Secretary
Jennifer Myram
company.secretarial@nationalexpress.com
Registered office
National Express Group PLC
National Express House
Birmingham Coach Station
Mill Lane, Digbeth
Birmingham, England
B5 6DD
Tel: +44 (0) 8450 130 130
www.nationalexpressgroup.com
Registered in England and Wales
No. 2590560
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Tel: 0371 384 2152*
International: +44 (0) 121 415 7047*
Textel: 0371 384 2255*
www.shareview.co.uk
* Lines are open 8.30am to 5.30pm (UK time), Monday
toFriday excluding public holidays. Calls are charged
at the standard geographical rate and will vary by
provider. Calls from outside the UK will be charged
atthe applicable international rate
Auditor
Deloitte LLP
2 New Street Square
London
EC4A 3BZ
Tel: +44 (0) 20 7936 3000
www.deloitte.com
Corporate solicitors
Ashurst LLP
London Fruit & Wool Exchange
1 Duval Square
London
E1 6PW
Financial advisers
Bank of America Securities
2 King Edward Street
London
EC1A 1HQ
Joint corporate brokers
Bank of America Securities
2 King Edward Street
London
EC1A 1HQ
HSBC Bank plc
8 Canada Square
London
E14 5HA
Financial calendar 2022
2022 AGM
Annual General Meeting
1
2022 reporting timetable
2
Trading update
3
Half year results
3
Trading update
3
2023
Full year results
3
1
The Annual General Meeting will be held in the
Banqueting Hall at Glaziers Hall, 9 Montague Close,
London Bridge, London SE1 9DD at 2.00pm on
Wednesday, 11 May 2022. A separate circular,
comprising a letter from the Chairman, Notice of
Meeting and explanatory notes in respect of the
resolutions proposed, accompanies this Annual
Report. These documents can also be found on the
Company’s website at: www.nationalexpressgroup.com
2
Other trading updates may be released throughout
theyear
3
Provisional dates
Consultancy, design and production
www.luminous.co.uk
Design and production
www.luminous.co.uk
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20
APR
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20
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MAR
Cautionary statement
Certain statements included in this Annual Report are, or may be deemed
tobe,forward-looking. They appear in a number of places throughout this
Annual Report and include statements regarding our intentions, beliefs or
current expectations and those of our officers, Directors and employees
concerning, amongst other things, our results of operations, financial
condition,liquidity, prospects, growth, strategies and the business we
operate.Such statements are based on current expectations and are
subjecttoa number of risks and uncertainties that could cause actual
eventsorresults to differ materially from any expected future events or
resultsreferred to in these forward-looking statements. Forward-looking
statements are not guarantees of future performance and no assurances
canbe given that the forward-looking statements in this document will
berealised. Unless otherwise required by applicable law, regulation or
accounting standard, we do not undertake any obligation to update or
reviseany forward-looking statements, whether as a result of new
information,future developments or otherwise.

National Express Group PLC
National Express House
Mill Lane
Digbeth
Birmingham B5 6DD
Tel: +44 (0) 8450 130130
www.nationalexpressgroup.com