Preliminary Results

Year ended 31 May 2013

Leaders in Solid Fuel Supply & Bulk Material Logistics

Source Process Distribute

Creating an integrated value chain
 Results Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

• Record volumes in UK coal distribution and strong performances from core material handling services
• Discontinued activities – Maltby closure and Belgium wind-down both progressing in line with expectations
• Underlying PBT from continuing operations increased from £49.3m to £52.2m
• Acquisition of ATH assets completed in May 2013 following successful £42m equity raise in April 2013
• Acquisition of assets from Scottish Coal completed post year end – steps underway to commence production
at various sites
• Coke trading operations strong last year but remain exposed to significant steel sector volatility
• Net debt at year end of £77.9m compared with £77.7m last year
• Recommended full year dividend of 20.5p, an increase of 15.2% year on year (signalled intention to move
dividend from 6 times cover to 4 times cover)

Preliminary Results – Year ended 31 May 2013 2

 Highlights
Gordon Banham, Chief Executive Officer

Monckton Coke Works

 Operational Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

Production Industrial Services

Surface Mining
• First full year of production at Tower
• Successfully completed acquisitions of ATH and SRG
• ATH sites producing in excess of 1mt p.a.
• SRG sites target of annualised 1mt p.a.
Monckton
• Robust performance as Monckton adjusts
to Maltby closure
• Strong performance and growth in core materials
handling business
• Disappointing performance on biomass conversion
projects
• Re-focused back to core material handling

Preliminary Results – Year ended 31 May 2013 4

 Operational Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

Energy and Commodities Transport

UK • Bulk fleet delivered solid performance
• Record volumes to power stations and steel works • Tanker business successfully repositioned post loss
• Speciality markets resilient despite demise of of Petroplus contract
UK Coal
Europe
• German business performed well in difficult
coke markets
• Significant coke purchases from UK steel producer
• Belgium setback contained – closure programme
on plan

Preliminary Results – Year ended 31 May 2013 5

 Discontinued Activities
Leaders in Solid Fuel Supply & Bulk Material Logistics

Maltby
• Closure and restoration program on plan
• Closure costs of £59.8m in line with previous guidance
• Target asset realisation achieved to 31 May 2013 with sale of gas assets to Alkane
• Market subdued for remaining underground equipment

Belgium
• Charge of £17.3m in line with guidance
• Closure programme on track
• Trading loss of £4.7m for year treated as discontinued
• Process is on-going to pursue recovery from perpetrators

Preliminary Results – Year ended 31 May 2013 6

 Surface Mining Expansion Update
Leaders in Solid Fuel Supply & Bulk Material Logistics

Acquisition of Assets from ATH

• ATH placed in Administration in December 2012
• Purchase of secured debt in March 2013
• Certain assets acquired for £10.4m in May 2013
• Continuity of operations
• Two surface mines placed in Hivecos
• Hargreaves contracted to provide mining and marketing services to Hivecos
• Option to acquire Hivecos for nominal sum once restoration issues resolved
• Over 200 former ATH staff hired
• First coal production and sales recorded pre year end (expect annual coal production of c. 1 million tonnes)
• Formation and funding of Scottish Mines Restoration Trust (“SMRT”)

Preliminary Results – Year ended 31 May 2013 7

 Surface Mining Expansion Update
Leaders in Solid Fuel Supply & Bulk Material Logistics

Acquisition of Assets from Scottish Coal

(post balance sheet event)
• Liquidators appointed in April 2013 – operations ceased
• Certain assets acquired for £8.4m in July 2013
• Includes extensive property portfolio (30,000 acres)
• Potential future wind farm and other development projects
• Three surface mines placed in Hivecos
• Similar Hiveco structure as ATH (option to acquire once restoration resolved)
• Preparations on-going for recommencement of activities
• Investment of £12m-£15m of capital expenditure expected
• Expect annual coal productions of c. 1 million tonnes
• Target restart of operations at main three sites in current financial year

Preliminary Results – Year ended 31 May 2013 8

Financial & Segmental Performance
Iain Cockburn, Finance Director
 Income Statement Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012 Movement

£’m £’m %

Revenue (continuing) 843.3 617.9 +36.5%
Underlying Operating Profit (continuing) 55.7 53.4 +4.2%
Net Interest Expense (3.5) (4.1) -14.9%
Underlying Profit Before Tax (continuing) 52.2 49.3 +5.7%
Loss for the year from Discontinued Operations (81.8) (1.8)
Total loss/profit for the year (49.6) 30.8
Underlying Diluted EPS (continuing) 134.6p 125.0p +7.7%
Dividend Per Share (proposed) 20.5p 17.8p +15.2%

Preliminary Results – Year ended 31 May 2013 10

 Dividend History
Leaders in Solid Fuel Supply & Bulk Material Logistics

Underlying diluted EPS (pps) Dividend per share (pps)

140 134.6 25
125.0
120 20.5
103.71 20
17.8
100 88.82 15.5
80 76.26 15 13.5
11.8
60 10
40
5
20

0 0
May May May May May May May May May May
09 10 11 12 13 09 10 11 12 13

Dividend cover Dividend payout

8 16% 15.5% 15.3% 15.2%
15.0%
7.0 14.3%
6.5 6.5 6.7 6.6 14%

6 12%

10%

4 8%

6%

2 4%

2%

0 0%
May May May May May May May May May May
09 10 11 12 13 09 10 11 12 13

Preliminary Results – Year ended 31 May 2013 11

 Continuing Segmental Performance
Leaders in Solid Fuel Supply & Bulk Material Logistics

Production Energy & Commodities

Revenue Operating Profit Revenue Operating Profit
£103.2m (+15.1%) £16.7m (+0.0%) £585.0m (+42.0%) £31.9m (+12.3%)
585.0
120 20 600 35 31.9
103.2 16.7 16.7 28.4
100 89.7 500 30
15 412.0
25
80 400
20
60 10 300
15
40 200
10
5
20 100 5

0 0 0 0
12 13 12 13 12 13 12 13
FY13 Operating Margin: 16.2% (FY12: 18.6%) FY13 Operating Margin: 5.5% (FY12: 6.9%)

Industrial Services Transport

Revenue Operating Profit Revenue Operating Profit
£149.3m (+85.0%) £3.0m (-30.2%) £82.7m (+7.0%) £4.0m (-2.4%)
149.3
150 10 100 5
82.7 4.1 4.0
77.3
8 80 4
100
80.7 6 60 3
4.3
4 40 2
50 3.0

2 20 1

0 0 0 0
12 13 12 13 12 13 12 13

FY13 Operating Margin: 2.0% (FY12: 5.3%) FY13 Operating Margin: 4.8% (FY12: 5.3%)

* All continuing underlying operating profit

Preliminary Results – Year ended 31 May 2013 12

 Continuing Performance – Energy & Commodities
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012 Movement

UK Bulk
Volume 4,679 kte 2,609 kte 2,070 kte
Operating profit * £11.0m £6.9m £4.1m
Operating profit per tonne £2.35 per tonne £2.64 per tonne -£0.29 per tonne
UK Speciality
Volume 618 kte 638 kte -20 kte
Operating profit * £13.4m £13.1m £0.3m
Operating profit per tonne £21.68 per tonne £20.53 per tonne £1.15 per tonne
Europe Speciality
Volume 645 kte 511 kte 134 kte
Operating profit * £6.3m £7.5m -£1.2m
Operating profit per tonne £9.77 per tonne £14.68 per tonne -£4.91 per tonne
* Operating Profit excluding joint ventures and non-trading

Preliminary Results – Year ended 31 May 2013 13

 Continuing Performance – Production
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012
£’m £’m

Tower JV share of profits 3.4 0.1
Hargreaves Surface Mining 5.7 3.5
Total Surface Mining 9.2 3.6
Monckton 6.6 7.4
Maltby Continuing 2.0 6.1
Other (1.0) (0.4)
16.7 16.7
Tonnes (kte)
Monckton 236 261
Tower 574 72
Surface Mining 46 –

Preliminary Results – Year ended 31 May 2013 14

 Operating Cash Flow
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012
£’m £’m

Underlying operating profit 55.7 53.4
Depreciation 8.3 7.7
64.0 61.1

Share of JV operating profit (non-cash) (3.7) 0.1

Other non-cash – (0.1)
Operating cashflow pre-working capital 60.3 61.1

Movement in working capital (19.0) (15.5)

Operating cashflow 41.3 45.6

Preliminary Results – Year ended 31 May 2013 15

 Cash Flow Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012
£’m £’m

Operating Cash Flow 41.3 45.6
Interest (2.7) (3.0)
Taxation (9.9) (4.9)
Loans advanced to Tower JV (0.7) (18.8)
Net cash flow from ATH acquisition (8.1) –
Acquisitions – (2.9)
Equity raise 41.7 0.6
Capital Expenditure (8.0) (12.6)
Dividends Paid (5.4) (8.1)
Other (2.2) 0.4
Movement in Net Debt – Continuing 46.0 (3.6)
Movement in Net Debt – Discontinued (46.2) (8.1)
Movement in Net Debt – Total (0.2) (11.7)

Preliminary Results – Year ended 31 May 2013 16

 Working Capital
Leaders in Solid Fuel Supply & Bulk Material Logistics

May May
2013 2012
£’m £’m

Readily Marketable Inventory (RMI) 87.3 81.5
Net Debt (77.9) (77.7)

RMI/Net Debt 112% 105%

Average Capital Employed (Continuing) 193.2 177.0
ROCE 26% 30%

Average Trading Working Capital (Continuing) 114.5 112.0
ROTWC 44% 48%

Stock Days 77 98
Note: ROCE and ROTWC are calculated excluding Tower Joint Venture.

Preliminary Results – Year ended 31 May 2013 17

 Balance Sheet Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

2013 2012
£’m £’m

Goodwill and Intangibles 19.1 29.8
Tangible Fixed Assets 60.1 98.3
Assets held for resale (Discontinued) 15.0 –
Working Capital (Appendix 1) 124.3 124.2
Derivative Financial Instruments (7.6) 0.4
Retirement Benefit Obligations (3.6) (6.0)
Provisions (9.9) (9.3)
Other Net Liabilities (1.1) (23.4)
Net Assets Before Borrowings 196.2 214.0

Net Debt (Appendix 2) (77.9) (77.7)
Net Assets 118.3 136.4

Gearing (Debt/Equity) 66% 57%

Continuing Interest Cover (times) 17.4 14.5
Debt/EBITDA (times) 1.5 1.0

Preliminary Results – Year ended 31 May 2013 18

 Financial Summary
Leaders in Solid Fuel Supply & Bulk Material Logistics

• Disappointing overall result but strong underlying business

• Underlying results in line with our expectations
• Record result for UK coal distribution business
• Close control of working capital with increased requirements reflecting growth in activity
• Maltby closure costs in line with guidance
• Fraud in Belgium fully investigated leading to confidence in estimate of the full impact
• Comfortable with debt levels, headroom and covenants
• Successful £42m equity raise in April 2013 at price at 775p with new and existing investors

Preliminary Results – Year ended 31 May 2013 19

Review & Outlook
Gordon Banham, Chief Executive Officer
 Outlook
Leaders in Solid Fuel Supply & Bulk Material Logistics

Production Industrial Services

• Expansion of surface mining business accelerating
Group towards being largest UK coal producer
• Closure and restoration programme at Maltby
to be completed
• Concern over H2 for Monckton in light of coke
price volatility
• Focus on core materials handling business
• Significant on-going tendering activity
Transport
• Both businesses well placed to deliver profit targets

Energy & Commodities

• Strong UK coal distribution performance continuing
in current financial year
• Limited visibility of volumes in European coke trading

Preliminary Results – Year ended 31 May 2013 21

Hargreaves Services plc Preliminary Results
Year Ended 31 May 2013

Appendices
 Appendix 1 – Trading Working Capital
Leaders in Solid Fuel Supply & Bulk Material Logistics

May 2013 May 2012

UK Europe Total UK Europe Total
£’m £’m £’m £’m £’m £’m
Stock 59.7 36.5 96.2 75.4 36.6 112.0
Trade Debtors 61.6 24.9 86.5 52.3 16.7 69.0
Trade Creditors (50.0) (9.4) (59.4) (53.9) (8.3) (62.1)
Trading Working Capital 71.3 52.0 123.3 73.8 45.0 118.9
Advances to Tower 23.1 – 23.1 22.4 – 22.4
Other Drs/Crs (19.2) (2.9) (22.1) (21.5) 4.4 (17.1)
Total Working Capital 75.2 49.1 124.3 74.7 49.4 124.2

Preliminary Results – Year ended 31 May 2013 23

 Appendix 2 – Net Debt and Facilities
Leaders in Solid Fuel Supply & Bulk Material Logistics

NET DEBT and facilities

UK Europe
Total
Facility
£’m £’m £’m £’m
RCF (83.6) – (83.6) 125.0
Invoice Finance – – – 50.0
Asset Finance (15.5) – (15.5) 25.0
Cash/(Overdraft) 51.1 (32.1) 19.0 52.0
Other 2.2 – 2.2 7.0
Total Net Debt (45.8) (32.1) (77.9) 259.0

Preliminary Results – Year ended 31 May 2013 24

 Appendix 3 – Coal Price
Leaders in Solid Fuel Supply & Bulk Material Logistics

Source: IHS McCloskey

Please note: Prices shown in US Dollars

Preliminary Results – Year ended 31 May 2013 25