Slide 1: Steadfast Group Limited FY18 results Analyst pack
24 August 2018 Steadfast Group Limited FY18 results Analyst pack
Slide 2: Contents
FY18 analyst pack Contents ▪ Our track record – five years listed on the ASX 3 ▪ FY18 highlights 4 ▪ FY18 financial summary 9 ▪ FY19 guidance 16 ▪ Appendices 18
Slide 3: Our track record - five years listed on the ASX
Steadfast Group Our track record - five years listed on the ASX Steadfast Network GWP ($bn) Steadfast Underwriting Agencies GWP ($m) Underlying EBITA ($m) 6 1,000 160 5 800 4 120 600 3 80 400 2 200 40 1 0 0 0 FY13 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 Underl
Slide 4: FY18 highlights
FY18 highlights <3> Steadfast ”
Slide 5: Steadfast Group highlights
Steadfast Group highlights Strong performance driven by organic and acquisition growth Underlying earnings1 Organic growth ▪ EBITA +15.5% to $165.6m ▪ Underlying EBITA organic growth +9.6% to $13.8m ▪ NPAT +12.9% to $75.0m ▪ Driven by strong equity broker and underwriting agency performance ▪ NPATA2
Slide 6: Steadfast Network highlights
Steadfast Network highlights Solid GWP growth driven by price increases and new brokers joining the Network Financial highlights Operational highlights ▪ Steadfast Network GWP +6% to $5.3 billion ▪ Growth in Steadfast Network brokers +16 to 377 ▪ Primarily driven by price and volume increases and ▪
Slide 7: Steadfast Underwriting Agencies highlights
Steadfast Underwriting Agencies highlights Strong growth in hardening market Financial highlights Operational highlights ▪ Steadfast Underwriting Agencies GWP +18% to $914m ▪ 25 agencies offering over 100 niche products ▪ Premium pricing returning to technical levels ▪ Acquired Axis Underwriting Ser
Slide 8: Key initiatives progress
Key initiatives progress Delivering on long term strategic initiatives Technology GWP transacted through SCTP ($bn) Steadfast Client Trading Platform (SCTP) 3 ▪ 6 business lines and 14 insurer and underwriting agency partners live on SCTP 2 ▪ Including Steadfast Direct (retail home, motor and landlo
Slide 9: FY18 financial summary
FY18 financial summary <3> Steadfast ”
Slide 10: Group financial performance
Group financial performance Strong underlying earnings growth 12 months to 30 June Underlying Underlying Year-on-year Cash flow summary $ million FY18 FY17 growth % $ million FY18 Revenue ($m) 582.5 504.1 15.5% Operating cash flow 96.1 EBITA ($m) 165.6 143.3 15.5% Dividend (55.2) NPAT ($m) 75.0 66.4
Slide 11: Contributions to 15.5% growth in underlying EBITA
Contributions to 15.5% growth in underlying EBITA Organic and acquisition growth Organic growth: $13.8m (+9.6%) Acquisition growth: $8.5m (+5.9%) 180 170 $1.7m ($2.7m) $9.5m $165.6m 1.2% (1.9%) 160 $15.5m ($2.6m ) $0.9m (1.8%) 0.6% 6.6% 150 $143.3m 140 10.8% 130 120 110 100 FY17 EBITA Organic growth
Slide 12: Equity brokers financial performance
8 % Equity brokers financial performance 42 % 50% Organic and acquisition growth Share of FY18 Underlying EBITA Equity brokers – consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June Underlying Underlying Year-on-year Organic Growth from acquisitions $ million FY18 FY17 grow
Slide 13: Underwriting Agencies financial performance
Underwriting Agencies financial performance 42 % 50% Price and volume driven growth Share of FY18 Underlying EBITA Agencies – consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June Underlying Underlying Year-on-year Organic Growth from acquisitions $ million FY18 FY17 growth
Slide 14: Statutory balance sheet
Statutory balance sheet Strong balance sheet with capacity for future growth $ million 30 Jun 18 30 Jun 17 Cash and cash equivalents 77 67 Corporate debt facilities, Available at Cash held on trust 311 263 $ million Maturity Total 30 Jun 2018 Trade & other receivables 493 395 Facility A Aug 2020 235
Slide 15: Final FY18 dividend
Final FY18 dividend Final dividend up 7% ▪ Final FY18 dividend of 4.7 cps (fully franked), +7% 10.0 ▪ Total FY18 dividend of 7.5 cps (fully franked), +7% 9.0 ▪ Total FY18 dividend payout ratio is 79% of 8.0 underlying NPAT, in line with target of 65% to 85% 7.0 ▪ Dividend Reinvestment Plan (DRP) to
Slide 16: FY19 guidance
FY19 guidance <3> Steadfast ”
Slide 17: FY19 guidance
FY19 guidance Continued growth while implementing technology initiatives 2 ▪ FY19 guidance range1: Underlying EBITA ($m) 200 185 ▪ Underlying EBITA of $185 million - $195 million 180 $185m-$195m ▪ Underlying NPAT of $82.5 million - $87.5 million 160 140 120 ▪ Guidance subject to: 100 80 $165.6m ▪ In
Slide 18: Appendices
Appendices ▪ Steadfast Group (slide 19) ▪ Steadfast Network (slide 24) ▪ Steadfast Underwriting Agencies (slide 31) ▪ Key initiatives (slide 33) ▪ FY18 detailed financials (slide 42)
Slide 19: Steadfast Group
Steadfast Group <3> Steadfast ”
Slide 20: Addressable market
Addressable market $17 billion of intermediated general insurance GWP written in 2017 Australian market – gross written premium1 $17bn Intermediated market Non-intermediated Steadfast Network brokers Private $4.9bn Health $22bn $82bn General Australian $37bn insurance market Life $23bn Non-intermedi
Slide 21: Broker and underwriting agency model
Broker and underwriting agency model Advice based offering primarily focused on SME market Client Premium Steadfast is focused on the SME market Advice Fee Premium Niche insurance products General insurance broker The Steadfast Network is a collection of 377 brokers who pool Underwriting agency thei
Slide 22: Steadfast Group
Steadfast Group Three business units focused on intermediated general insurance market Steadfast Group (listed on ASX) Steadfast Network Steadfast Underwriting Agencies Complementary Businesses 377 general insurance brokers 25 underwriting agencies 7 businesses supporting the Steadfast Network and S
Slide 23: Steadfast Group today
Steadfast Group today Size and scale Largest general insurance broker network in Australasia Largest underwriting agency group in Australasia Annual GWP1 377 Annual GWP1 25 $5.3 billion Steadfast Network Brokers $914 million Agencies Steadfast Network collects Marketing & Administration (M&A) and ot
Slide 24: Steadfast Network
Steadfast Network <3> Steadfast ”
Slide 25: Steadfast Network
Steadfast Network Largest general insurance broker Network in Australasia Steadfast Network Strategy Steadfast Network $5.3bn The Steadfast Network has 377 general Exclusive to Steadfast Network brokers ▪ Operate a Network that is stronger insurance brokers in Australia, New Zealand together and the
Slide 26: 143 brokers have joined the Steadfast Network since IPO
Steadfast Network 143 brokers have joined the Steadfast Network since IPO Number of Steadfast Network brokers 450 12 29 31 400 10 31 5 377 69 350 Largest general insurance broker 300 network in Australia 278 with 29% market share by GWP2 250 200 August New Brokers Allied NZ Insight Singapore Hubbing
Slide 27: Worldwide broker offices
Steadfast Network Worldwide broker offices (excluding unisonSteadfast) 1 United Kingdom 47 16 Asia Northern 355 Territory Queensland 192 116 512 Western Australia South Australia 25 New South Wales 83 North ACT 457 Island Victoria 35 18 Tasmania South Island Around 1,900 broker offices across Austra
Slide 28: Australia – resilient SME customer base
Steadfast Network Australia – resilient SME customer base 1,2,3 GWP mix Diversified by product line Diversified by geography Diversified by insurer Corporate Other retail 4% 1% Retail – home/motor 10% Small to medium enterprises 85% Business pack 22% VIC 30% CGU 18% ▪ 85% of customer base relates to
Slide 29: Increasing Steadfast Group's share of growing Network GWP
Steadfast Network Increasing Steadfast Group’s share of growing Network GWP ▪ The Steadfast Network is a key driver of Steadfast Group ▪ Steadfast Group earns marketing and administration (M&A) fees from our insurer partners which are used as a revenue stream to provide products and services to the
Slide 30: Investment activity
Investment activity Active investment management 2H18 1H18 2H17 1H17 2H16 1H16 Acquisitions 4 7 2 7 8 2 Increased equity holdings 4 8 5 7 7 4 Hubbed 2 - 2 5 1 3 Equity brokers (including bolt-ons) ▪ Disciplined acquisition criteria based around cultural fit, strategic alignment and financial perform
Slide 31: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies
Slide 32: Steadfast Underwriting Agencies: 25 agencies, over 100 niche products
Steadfast Underwriting Agencies 25 agencies, over niche 100 products Personal accident, sickness Complete farm package Commercial and residential strata Accident and health Home and contents for and travel owner-occupied homes Residential and commercial strata Specialised and exotic motorcar Emergin
Slide 33: Key initiatives
Key initiatives ▪ Monetising our insurTech ▪ International footprint
Slide 34: Steadfast Client Trading Platform - benefits for clients, brokers and insurers
Monetising our insurTech Steadfast Client Trading Platform (SCTP) - benefits for clients, brokers and insurers ▪ Market-leading technology - exclusive to Steadfast Network brokers, clients and participating insurers ▪ Benefits for clients: ▪ Genuine contestable marketplace generating improved pricin
Slide 35: Insurer and underwriting agency partners on the SCTP
Monetising our insurTech Insurer and underwriting agency partners on the SCTP Commercial Commercial Business pack Professional risks Liability Steadfast Direct property & ISR motor (FY19) (FY19) (FY19) (Q3 19) Steadfast Underwriting Agency (Early 2019) London ‘super’ binder (shortly) Steadfast Under
Slide 36: Size of the opportunity
Monetising our insurTech Size of the opportunity Potential Steadfast Network GWP that can be transacted on SCTP Steadfast Network GWP (FY18) ▪ c.80% of Steadfast Network GWP can potentially be transacted Business pack 22% through the platform Commerical motor 14% Retail home & motor 10% ▪ Business p
Slide 37: SCTP implementation and return on investment
Monetising our insurTech SCTP implementation and return on investment Investment FY16 FY17 FY18 FY19 Implementation FY17 FY18 FY19 FY20 FY21 Return on investment FY18 FY19 FY20 FY21 beyond FY18 FY19 FY20 FY21 & beyond ▪ First revenue from SCTP ▪ Insurers live on 6 current lines ▪ SCTP usage continue
Slide 38: Steadfast Client Trading Platform (SCTP) Strong momentum
Steadfast Client Trading Platform (SCTP) Strong momentum Steadfast Client Trading Platform Gross Written Premium ($m) 250 $231m 200 $140m FY18 vs FY17 150 GWP of $231m vs $98m 100 $98m $40m $59m +136% growth 50 $91m $24m $39m $0.5m $16m 0 FY15 FY16 FY17 FY18 ▪ 6 business lines live on the SCTP, with
Slide 39: Steadfast Technologies
Steadfast Technologies Powering the Steadfast Client Trading Platform The Steadfast Virtual Underwriter is a digital marketplace INSIGHT is a broking platform with a powerful search UnderwriterCentral is a cloud-based agency management which provides Steadfast Network brokers with access to engine w
Slide 40: International footprint
International footprint Steadfast Network model replication 1. New Zealand ▪ 41 brokers in the Network ▪ Steadfast Underwriting Agencies building market presence ▪ NZ$366m of gross written utilising Network distribution premium in FY18 ▪ Strong buy-in from insurer partners 2. Asia ▪ Target Singapore
Slide 41: unisonSteadfast medium term strategy
unisonSteadfast Medium term strategy ▪ 40% equity stake in unisonSteadfast ▪ One of the world’s largest general insurance broker networks, offering multi-jurisdictional coverage ▪ Steadfast Group representatives have joined the Supervisory Board Recent developments unisonSteadfast global network ▪ G
Slide 42: FY18 detailed financials
FY18 detailed financials <3> Steadfast ”
Slide 43: Statutory profit and loss statement
Detailed financial overview Statutory profit and loss statement 12 months ended 30 June $ million FY18 FY17 Revenue M&A and other professional services fees 70.6 69.9 Revenue from controlled entities 381.8 327.0 Share of profits of associates and joint ventures 14.5 14.0 Other revenue 1.2 3.8 Total
Slide 44: Statutory vs underlying reconciliation
Detailed financial overview Statutory vs underlying reconciliation 12 months ended 30 June $ million FY18 FY17 Revenue 582.5 504.1 Underlying NPAT 75.0 66.4 Underlying EPS (NPAT) 9.71 8.87 Reconciliation of earnings Statutory NPAT 75.9 66.8 Change in value and sale of investments (0.2) (2.9) Share b
Slide 45: Statutory vs underlying reconciliation
Detailed financial overview Statutory vs underlying reconciliation Revenue reconciliation ($m) 700 $123.3m ($3.3m) ($0.4m) ($4.7m) ($14.5m) $582.5m 600 $568.5m $14.0m 500 $468.1m 400 300 200 100 FY18 Add: Commissions paid Less: gain from deferred Less: net gain from change Less: Less: statutory shar
Slide 46: Underlying revenue and EBITA (aggregate view)
Detailed financial overview Underlying revenue and EBITA (aggregate view) 12 months to 30 June Underlying Underlying Growth $ million FY18 FY17 % Gross written premiums Brokers 1,676.3 1,540.7 8.8% Underwriting agencies1 884.1 776.6 13.9% Total GWP 2,560.4 2,317.2 10.5% Underlying Underlying Growth
Slide 47: Statement of income (underlying IFRS view)
Detailed financial overview Statement of income (underlying IFRS view) 12 months to 30 June Underlying Underlying Growth Organic growth Acquisitions & $ million FY18 FY17 % %2 hubbing growth %3 Fees and commissions¹ 492.4 416.0 18.4% 10.9% 7.5% M&A and other fees 40.6 35.3 15.0% 15.0% 0.0% Interest
Slide 48: Statement of income (underlying IFRS view)
Detailed financial overview Statement of income (underlying IFRS view) 12 months to 30 June Underlying Underlying Underlying Underlying Underlying $ million 2H18 1H18 2H17 1H17 2H16 Fees and commissions¹ 266.6 225.8 212.9 203.1 195.4 M&A and other fees 19.8 20.8 16.9 18.4 15.8 Interest income 3.4 3.
Slide 49: Statutory cash flow statement
Detailed financial overview Statutory cash flow statement $ million FY18 FY17 Cash flows from operating activities Net cash from operating activities before customer trust accounts movement 96.1 85.6 Net movement in customer trust accounts 27.1 22.4 Net cash from operating activities 123.2 108.0 $40
Slide 50: 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 Jun Year End Jun Year End Jun Year End Jun Year End Jun Year End Jun 2017 2018 2017 2018 2017 2018 Gro
Slide 51: 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 Jun Year End Jun Year End Jun Year End Jun Year End Jun Year End Jun Year End
Slide 52: Important notice
Important notice This presentation has been prepared by Steadfast Group Limited (“Steadfast”). This presentation contains information in summary form which is current as at 24 August 2018. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offered