Steadfast Group Limited · ASX:SDF

Steadfast — Investor Presentation (August 2023)

53 slides from Steadfast's investor presentation, Aug 16, 2023

  1. Slide 1: Steadfast Group FY23 Results Investor Presentation

    Steadfast Group FY23 Results Investor Presentation 2023 16 August

  2. Slide 2: Table of contents

    Table of contents 03 FY23 Highlights FY23 Results Investor Presentation 16 FY23 Financial Summary 24 Outlook 26 Appendices 2

  3. Slide 3: FY23 Highlights

    FY23 Highlights 3

  4. Slide 4: Continued strong track record since listing on ASX

    Continued strong track record since listing on ASX Steadfast Group Steadfast Network GWP ($b) Steadfast Underwriting Agencies GWP ($b) Underlying EBITA ($m) 440 12 2.0 400 360 10 320 1.5 280 8 240 200 6 1.0 160 120 4 0.5 80 40 2 0 0.0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY14 FY15 FY1

  5. Slide 5: Reflection – how did we achieve 498% TSR since listing?

    Reflection – how did we achieve this and deliver 498% TSR since listing? Our long-term strategy of focusing on being the best broker network and providing an exit mechanism to unlock trapped capital Our Australasian success can be attributed to a genuine focus on improving the value our network brok

  6. Slide 6: Increase in underlying NPAT of 22.5% pcp

    Steadfast Group Increase in underlying NPAT of 22.5% pcp Underlying earnings (refer slide 18) Broker and underwriting agency growth  EBITA +26.5% to $430.7m (FY22 $340.4m)  Equity brokers (including Network) aggregate underlying EBITA +27.7% (refer slide 20)  NPAT +22.5% to $207.0m (FY22 $169.0m)

  7. Slide 7: Targeting $280 million of acquisitions in FY24

    Steadfast Group Targeting $280 million of acquisitions in FY24 (funded by debt and free cash flow) FY23 acquisitions Annualised Acquisition EBITA cost IBA acquisition1 $21.2m $286.4m $574.2m total 57 completed Trapped Capital acquisitions $30.1m $287.8m FY23 acquisitions Current pipeline Estimated E

  8. Slide 8: Steadfast's acquisition track record

    Steadfast’s acquisition track record Steadfast has a proven track record of successfully completing earnings accretive acquisitions  Established track record of evaluating, executing and integrating M&A opportunities  Longstanding and dedicated internal acquisitions team  Due diligence is underta

  9. Slide 9: Increasing Steadfast Group's share of growing Network GWP

    Increasing Steadfast Group’s share of growing Network GWP Steadfast Network  Since IPO, Steadfast has successfully implemented the dual strategies of growing our Network as well as increasing equity stakes in the Network  Trapped Capital Project will continue to increase Steadfast’s equity holding

  10. Slide 10: FY23 operating update

    FY23 operating update Insurance and reinsurance markets • Attritional claims in the second and third quarters of FY23 have been above the prior year pcp. • The impact of non-catastrophe claims has not had any effect on the increasing of retention and/or premium reductions by worldwide reinsurance bu

  11. Slide 11: FY23 operating update

    FY23 operating update Succession • We continue to review and add to our executive bench strength to ensure adequate succession plans are in place. • New appointments have now commenced in the business. • Training has been increased, promotions have been made, and new efficiencies have been gained. I

  12. Slide 12: Steadfast broking

    Steadfast broking Sustained growth and further Network acquisitions Financial highlights – FY23 FY23 vs FY221  Steadfast Network GWP +12.8% to $11.6b is driven by 9.8% organic growth for the period: o Price increases across most non-statutory lines GWP of $11.6b vs $10.3b o Volume increase of c.2%

  13. Slide 13: Steadfast Underwriting Agencies

    Steadfast Underwriting Agencies Sustained growth driven by price and volume Financial highlights – FY23  Steadfast Underwriting Agencies GWP +16.7% to $2.1b ꟷ Driven by price and volume uplift FY23 vs FY22 ꟷ Property line pricing remains strong ꟷ Capacity constraints in certain lines  Opportunitie

  14. Slide 14: Our insurTech

    Our insurTech Continued broker take-up of our technology platforms $1.2b Steadfast Client Trading Platform GWP transacted through SCTP in FY23  SCTP delivers strong client outcomes  Genuine contestable marketplace, generating improved pricing competition, +24% coverage and marketing each time a po

  15. Slide 15: FY23 dividends up 15.4% to 15.0 cps

    FY23 dividends up 15.4% to 15.0 cps Final FY23 dividend Underlying diluted EPS (NPAT) (cents per share) 22 20 18 16  Final FY23 dividend of 9.0 cps (fully franked), 14 up from 7.8 cps in FY22, +15.4% 12 10  Dividend Reinvestment Plan (DRP) to apply to the final 8 FY23 dividend 6 ꟷ The DRP will ope

  16. Slide 16: FY23 Financial Summary

    FY23 Financial Summary 16

  17. Slide 17: Reconciliation of underlying NPAT to statutory NPAT

    Reconciliation of underlying NPAT to statutory NPAT 12 months to 30 June $ million FY23 FY22 Underlying net profit after tax (NPAT) 207.0 169.0 Adjustments for non-trading items (net of tax and non-controlling interests): Deferred consideration expense (where actual earnout was more than expected) (

  18. Slide 18: Group financial performance

    Group financial performance Strong underlying earnings growth Underlying earnings 12 months to 30 June Underlying Underlying Period-on-period $ million FY231 FY221 growth % Revenue ($m) 1,409.5 1,135.9 24.1% EBITA ($m) 430.7 340.4 26.5% NPAT ($m) 207.0 169.0 22.5% Diluted EPS2 (NPAT) (cents) 20.15 1

  19. Slide 19: Drivers of 26.5% growth in underlying EBITA

    Drivers of 26.5% growth in underlying EBITA Organic and acquisition growth Organic Growth:$46.4m /13.6% Acquisition Growth: $43.9m /12.9% 470.0 $9.5m / 2.8% $90.3m / 26.5% $34.4m / 10.1% 420.0 $7.2m / 2.1% $39.2m / 11.5% 370.0 320.0 270.0 $430.7m 220.0 $340.4m 170.0 120.0 FY22 EBITA Organic Growth B

  20. Slide 20: Steadfast broking

    Steadfast broking Organic and acquisition growth Equity brokers and network - consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June 2023 Underlying Underlying Period-on-period Organic Growth from $ million FY23 FY22 growth % growth % acquisitions % Net revenue 891.6 716.1 24

  21. Slide 21: Steadfast Underwriting Agencies

    Steadfast Underwriting Agencies Organic growth driven by price and volume Steadfast Underwriting Agencies – consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June 2023 Underlying Underlying Period-on-period Organic Growth from $ million FY231 FY221 growth % growth % acquisiti

  22. Slide 22: Strong conversion of profits to cash

    Strong conversion of profits to cash FY23 cash flow statement Cash flow summary¹ $ million FY23 FY22 Statutory operating cash flow² 318.2 261.0 > 100% conversion of underlying NPATA to cash Less lease obligation payments (18.5) (14.0) Adjusted operating cashflow 299.7 247.0 > 100% conversion of unde

  23. Slide 23: Conservatively geared balance sheet

    Conservatively geared balance sheet Statutory balance sheet $ million 30 Jun 23 30 Jun 22 Corporate debt facility (excludes premium funding) increased and extended August 2023 as follows: Cash and cash equivalents 259 280 $ million Maturity Total Cash held on trust 879 665 Revolving Aug 2026 385 Pre

  24. Slide 24: Outlook

    Outlook 24

  25. Slide 25: FY24 guidance

    FY24 guidance Steadfast FY24 guidance range FY24 guidance range Underlying EBITA $500 million - $510 million Underlying NPAT $230 million - $240 million Underlying diluted EPS (NPAT) growth 10% - 15% Underlying NPATA $277 million - $287 million  The guidance is subject to: ⁻ Insurers to continue to

  26. Slide 26: Appendices

    Appendices Steadfast Group (slide 27) Steadfast Network (slide 31) Steadfast Underwriting Agencies (slide 38) Our insurTech (slide 40) 26 FY23 detailed financials (slide 44)

  27. Slide 27: Steadfast Group

    Steadfast Group 27

  28. Slide 28: Business units focused on the intermediated general insurance market

    Business units focused on the intermediated general insurance market Steadfast Group as at 30 June 2023 Steadfast Group (listed on ASX) Steadfast Network Steadfast Underwriting Agencies Complementary Businesses 426 general insurance brokers 29 underwriting agencies 9 businesses supporting the Steadf

  29. Slide 29: Size and scale

    Size and scale Steadfast Group as at 30 June 2023 Largest general insurance broker network in Australasia Largest group of underwriting agencies in Australasia $11.6 b 426 $2.1 b 29 Annual GWP1 Steadfast Network brokers Underwriting agencies Annual GWP1 Steadfast Network collects professional servic

  30. Slide 30: Our market

    Our market $35b of intermediated general insurance GWP written in CY22 Australian market – gross written premium1 Steadfast Group is focused on the intermediated general insurance market, $35b with a primary focus on SME Intermediated market Steadfast Network brokers CY22 $11.5b Intermediated Privat

  31. Slide 31: Steadfast Network

    Steadfast Network 31

  32. Slide 32: Largest general insurance broker network in Australasia

    Largest general insurance broker network in Australasia Steadfast Network Steadfast Network Strategy Steadfast Network $11.6b1 The Steadfast Network has 426 general Exclusive to Steadfast Network brokers  Be the best solution for our Network brokers insurance brokers in Australia, New Zealand clien

  33. Slide 33: Steadfast Network brokers have joined since IPO

    Steadfast Network 315 brokers have joined the Steadfast Network since IPO Number of Steadfast Network brokers 650 26 135 600 77 550 31 500 20 31 8 426 450 2 150 400 350 300 276 250 200 August New brokers Allied NZ Insight IBNA Singapore Merged Sold Leavers PSC (AU & June 2023 2013 externally NZ) (IP

  34. Slide 34: Worldwide broker offices

    Steadfast Network Worldwide broker offices (excluding UnisonSteadfast) 1 United Kingdom 50 Asia 10 381 Northern Territory 183 Queensland 103 Western Australia South Australia 493 New South Wales 119 19 North Island 469 Australian Capital Territory Victoria 1,882 broker offices 25 across Australia, 2

  35. Slide 35: Australia – resilient SME client base

    Steadfast Network Australia – resilient SME client base 1 GWP mix Diversified by product line Diversified by geography Diversified by insurer 1% 13% 6% 26% 14% 40% Business pack 17% QBE 17% Micro (Policy size <$650) VIC 34% Commerical motor 12% Small Enterprise (Policy size $650 - $5,000) CGU 13% NS

  36. Slide 36: International footprint

    International footprint Steadfast Network model replication 1. New Zealand  63 brokers in the Network  Steadfast Underwriting Agencies building market presence utilising  NZ$690m of GWP in FY23 Network distribution  Strong buy-in from insurer partners  SCTP introduced 2. Asia  Targeted Singapo

  37. Slide 37: International footprint

    International footprint UnisonSteadfast  Steadfast Group has an equity ownership stake of 60% in UnisonSteadfast ꟷ One of the world’s largest global general insurance broker networks, 600+ offering multi-jurisdictional coverage Referrals between the Steadfast Network and UnisonSteadfast ꟷ Superviso

  38. Slide 38: Steadfast Underwriting Agencies

    Steadfast Underwriting 38 Agencies

  39. Slide 39: Steadfast Underwriting Agencies

    Steadfast Underwriting Agencies 29 agencies, over 100 niche products Solutions for novated Complete farm package Caravans, campervans, Commercial and Accident and health Residential and commercial lease, motor fleet and cabins, trailers and horse residential strata strata motor vehicle financing flo

  40. Slide 40: Our insurTech

    Our insurTech 40

  41. Slide 41: Steadfast Client Trading Platform – benefits

    Our insurTech Steadfast Client Trading Platform – benefits for clients, brokers and insurers  Market-leading technology – exclusive to Steadfast Network brokers, clients and participating insurers  Benefits for clients: ꟷ Genuine contestable marketplace generating improved pricing, competition and

  42. Slide 42: Insurer and underwriting agency partners on the SCTP

    Our insurTech Insurer and underwriting agency partners on the SCTP [AIG] Allianz @ @ CHUBe Hollard. ® Business pack BLUE @zvRICH Qizeona Professional i" risks 1°) PROCOVER vero eee 7 cy23 Liability DE are CHUBS ~~ AAmiramar Commercial . property & ISR (cu) AA miramar ® vero\ @zvricu Commercial 2 BLU

  43. Slide 43: Steadfast Technologies

    Our insurTech Steadfast Technologies Steadfast Client Trading Platform SCTP is a digital marketplace which provides Steadfast Network insurance brokers INSIGHT is an insurance broking platform with a powerful search engine which with access to a variety of insurance products based on a single agreed

  44. Slide 44: FY23 Detailed Financials

    FY23 Detailed Financials

  45. Slide 45: FY23 detailed financials

    FY23 detailed financials Reconciliation of statutory to underlying earnings 12 months ended 30 June 2023 Total statutory Reclassifications Non-trading items Total underlying $ million Net fee and commissions income 1,008.4 203.2 - 1,211.6 Premium funding interest income 92.9 - - 92.9 Share of profit

  46. Slide 46: FY23 detailed financials

    FY23 detailed financials Statement of underlying income (IFRS view) 12 months ended 30 December 2023 Underlying Underlying Period-on-period Organic Acquisitions & $ million FY23 FY22 growth % growth %2 hubbing growth %3 Fees and commissions1 1,211.6 993.3 21.9% 9.5% 12.5% Interest Income 23.4 3.9 49

  47. Slide 47: FY23 detailed financials

    FY23 detailed financials Statement of income (underlying IFRS view) Underlying Underlying Underlying Underlying Underlying Underlying $ million 2H23 1H23 2H22 1H22 2H21 1H21 Fees and commissions¹ 638.1 573.5 540.7 452.9 410.4 381.5 Interest Income 14.8 8.6 2.2 1.7 1.6 2.1 Other revenue 93.8 80.7 72.

  48. Slide 48: FY23 detailed financials

    FY23 detailed financials Statutory cash flow statement $ million FY23 FY22 $168.3m free cash flow in FY23 $ million Cash flows from operating activities Cash from operations1 318.2 Net cash from operating activities before customer 318.2 261.0 Less lease obligation payments (18.5) trust account and

  49. Slide 49: Australian General Insurance Statistics

    Australian General Insurance Statistics1 Premiums and claims by class of business Houseowners/householders Domestic motor vehicle CTP motor vehicle Premiums and claims by class of business Year End Year End Year End Year End Year End Year End Mar 2022 Mar 2023 Mar 2022 Mar 2023 Mar 2022 Mar 2023 Gro

  50. Slide 50: Australian General Insurance Statistics

    Australian General Insurance Statistics1 Premiums and claims by class of business Commercial motor vehicle Fire and ISR Public and product liability Professional indemnity Premiums and claims by class of business Year End Year End Year End Year End Year End Year End Year End Year End Mar 2022 Mar 20

  51. Slide 51: Important notice

    Important notice This presentation has been prepared by Steadfast Group Limited ACN 073 659 677 (“Steadfast”). This presentation contains information in summary form which is current as at 16 August 2023. This presentation is not a recommendation or advice in relation to Steadfast or any product or

  52. Slide 52: Questions

    Questions 52

  53. Slide 53: Steadfast

    <$> Steadfast THE STRENGTH YOU NEED

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