Steadfast Group Limited · ASX:SDF

Steadfast — H1 2020 Earnings Presentation

44 slides from Steadfast's earnings presentation, Feb 26, 2020

1. Slide 1: 1H20 Results – Investor Presentation

   Steadfast Group 1H20 Results – Investor Presentation 25 February 2020

2. Slide 2: Table of Contents

   Table of Contents 03 1H20 Highlights 1H20 Results – Investor 08 1H20 Financial Summary Presentation 16 FY20 Guidance 19 Appendices 2

3. Slide 3: 1H20 Highlights

   1H20 Highlights 3

4. Slide 4: 1H20 Highlights

   Steadfast Group Increase in underlying NPAT of 39% Broker and underwriting agency growth4 Underlying earnings 1  Equity brokers and network aggregate EBITA +27.4%  EBITA +27.5% to $108.9m  Underwriting agencies aggregate EBITA +13.4%  NPAT +39.1% to $53.2m  NPATA2 +32.5% to $66.7m  SCTP long t

5. Slide 5: Network and equity brokers

   Steadfast Network and equity brokers Growth from IBNA and continued moderate price increases from strategic partners 1H20 vs 1H19 Financial highlights  Steadfast Network GWP +32% to $3.9 billion driven by: GWP of $3.9bn vs $2.9bn  New IBNA members +6.5% organic growth  Continued growth from Autho

6. Slide 6: Underwriting Agencies

   Steadfast Underwriting Agencies Record GWP and underlying EBITA growth Financial highlights 1H20 vs 1H19  Steadfast Underwriting Agencies GWP +21% to $673 million GWP of $673m vs $558m  Primarily driven by price and volume uplift, with some acquisition growth from full impact of HMIA +19% organic

7. Slide 7: Our insurTech

   Our insurTech Steadfast Client Trading Platform and INSIGHT Steadfast Client Trading Platform (SCTP) $287m  8 business lines and 13 insurer and underwriting agency partners live on SCTP GWP transacted through SCTP in 1H20 +51%  SCTP delivers strong client outcomes, addressing several issues raised

8. Slide 8: 1H20 Financial Summary

   1H20 Financial Summary 8

9. Slide 9: Impact of IBNA and Steadfast PSF Rebate offer on financial results

   Impact of IBNA and Steadfast PSF Rebate offer on financial results IBNA Steadfast PSF Rebate offer  100% acceptance rate for takeover of IBNA for consideration of $72.7m (post tax)  c. 70% acceptance rate at a cost of $60.2m (post tax)  Revenue commenced 1 July 2019  Revenue commenced 1 July 201

10. Slide 10: Group financial performance

    Group financial performance Strong underlying earnings growth Underlying earnings – including JLG mark-to-market Underlying earnings – excluding JLG mark-to-market Period-on- Period-on- 6 months to 31 Dec Underlying Underlying period 6 months to 31 Dec Underlying Underlying period $ million 1H201 1H

11. Slide 11: Equity brokers and network

    Equity brokers and network Organic and acquisition growth Equity brokers and network - consolidated & equity accounted (assuming 100% ownership) 6 months to 31 December 2019 Underlying Underlying Period-on-period Organic Growth from $ million 1H201 1H191 growth % growth % acquisitions % Net revenue

12. Slide 12: Underwriting Agencies

    Steadfast Underwriting Agencies Strong organic growth driven by price and volume Steadfast Underwriting Agencies – consolidated & equity accounted (assuming 100% ownership) 6 months to 31 December 2019 Underlying Underlying Period-on-period Organic Growth from $ million 1H201 1H191 growth % growth %

13. Slide 13: Drivers of 21.4% growth in underlying EBITA

    Drivers of 21.4% growth in underlying EBITA1 Organic and acquisition growth Organic growth: $2.3m (+2.6%) Acquisition growth: $16.3m (+18.8%) 120 $105.2m 110 $5.7m (+21.4%) $4.3m 100 $3.5m $5.5m ($2.3m) $2.8m ($1.2m) $0.3m 6.6% $86.6m 90 5.0% 4.0% (2.7%) 3.2% 80 6.3% (1.4%) 0.4% 70 60 50 40 30 20 10

14. Slide 14: Statutory balance sheet

    Statutory balance sheet Strong balance sheet with capacity for future growth $ million 31 Dec 2019 30 Jun 19 Corporate debt facilities $ million Maturity Total Cash and cash equivalents 197 117 Facility A - Revolving Jan 2023 260 Cash held on trust 477 427 Facility B - Revolving Jan 2025 75 Premium

15. Slide 15: Acquisition of IQumulate

    Acquisition of IQumulate Impact on balance sheet and statutory profit IQumulate Steadfast Group acquired the remaining 50% of Macquarie 31 Dec 19 Group Premium Funding (renamed IQumulate) late in FY19 to now hold Group Pro forma 31 Dec 19 Group $ million 31 Dec 19 impact Pro forma 30 Jun 19 100% Cas

16. Slide 16: FY20 Guidance

    FY20 Guidance 16

17. Slide 17: Interim FY20 dividend

    Interim FY20 dividend Interim dividend up 12.5% 12.0  Interim FY20 dividend of 3.6 cps (fully franked), up from 3.2 cps in 1H19, +12.5%  FY20 target dividend payout ratio of 65% to 85% of 10.0 underlying NPAT  Dividend Reinvestment Plan (DRP) to apply to interim FY20 dividend; no discount 8.0  D

18. Slide 18: FY20 guidance

    FY20 guidance Reconfirm top end of underlying EBITA and NPAT guidance Underlying EPS growth uplifted to reflect current guidance and the lower than anticipated share count Guidance now excludes mark-to-market adjustments for Johns Lyng Group Guidance (excluding JLG mark-to-market) Underlying EBITA $

19. Slide 19: Appendices

    Appendices Steadfast Group (slide 20) Steadfast Network (slide 24) Steadfast Underwriting Agencies (slide 30) Key initiatives (slide 32)  Our insurTech (slide 33)  International Expansion (slide 34) 1H20 detailed financials (slide 36) 19

20. Slide 20: Steadfast Group

    Steadfast Group 20

21. Slide 21: Our track record since listing on the ASX

    Steadfast Group Our track record since listing on the ASX 1 Steadfast Network GWP ($bn) Steadfast Underwriting Agencies GWP ($m) Underlying EBITA ($m) 1,200 200 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 FY19 1H20 FY14 FY15 FY16 FY17 FY18 FY19 1H20 FY13 FY14

22. Slide 22: Three business units focused on intermediated general insurance market

    Steadfast Group Three business units focused on intermediated general insurance market Steadfast Group (listed on ASX) Steadfast Network Steadfast Underwriting Agencies Complementary Businesses 473 general insurance brokers 26 underwriting agencies 8 businesses supporting the Steadfast Network and S

23. Slide 23: Size and scale

    Steadfast Group Size and scale Largest general insurance broker network in Australasia Largest group of underwriting agencies in Australasia Annual GWP1 473 Annual GWP1 26 $7.1 billion Steadfast Network brokers $1.3 billion Underwriting agencies Steadfast Network collects professional services and o

24. Slide 24: Steadfast Network

    Steadfast Network 24

25. Slide 25: Largest general insurance broker Network in Australasia

    Steadfast Network Largest general insurance broker Network in Australasia Steadfast Network Strategy Steadfast Network $7.1bn The Steadfast Network has 473 general Exclusive to Steadfast Network brokers  Operate a network that is stronger together insurance brokers in Australia, New Zealand and the

26. Slide 26: Network brokers have joined the Steadfast Network since IPO

    Steadfast Network 245 brokers have joined the Steadfast Network since IPO Number of Steadfast Network brokers 600 550 15 33 78 10 500 7 473 450 31 31 400 90 350 278 300 250 200 August New brokers Allied NZ Insight IBNA Singapore Hubbing¹ Sold Leavers Dec 2019 2013 (IPO)  245 brokers have joined and

27. Slide 27: Worldwide broker offices

    Steadfast Network Worldwide broker offices (excluding unisonSteadfast) 1 United Kingdom 47 Asia 17 417 Northern Territory 231 Queensland 138 Western Australia South Australia 609 New South Wales 104 30 North Island 533 Australian Capital Territory Victoria 2,185 broker offices 26 across Australia, 3

28. Slide 28: Australia – resilient SME client base

    Steadfast Network Australia – resilient SME client base 1,2 GWP mix Diversified by product line Diversified by geography Diversified by insurer Corporate 4% Retail & small enterprise 12% Medium enterprises 84% Business pack 20% CGU 16% VIC 35% Commerical motor 14% NSW 21% QBE 15%  88% commercial li

29. Slide 29: Increasing Steadfast Group’s share of growing Network GWP

    Steadfast Group Increasing Steadfast Group’s share of growing Network GWP  The Steadfast Network is a key driver of Steadfast Group  Steadfast Group earns professional service fees (PSF) from insurer partners which are used as a revenue stream to provide products and services to the Steadfast Netw

30. Slide 30: Steadfast Underwriting Agencies

    Steadfast Underwriting Agencies 30

31. Slide 31: Underwriting Agencies

    Steadfast Underwriting Agencies 26 agencies, over 100 niche products Complete farm package Caravans, cabins and trailers Commercial and residential strata Accident and health Base essentials strata Residential and commercial strata Home and contents for Specialised and exotic motorcar Emerging risks

32. Slide 32: Key Initiatives

    Key Initiatives Our Insurtech (slide 33) International footprint (slide 34) 32

33. Slide 33: Our insurTech

    Our insurTech Insurer and underwriting agency partners on the SCTP Commercial property Domestic home, motor Business pack Professional risks Liability Commercial motor & ISR & landlords Q1 2020 H2 2020 Auto Rate Q1 2020 H2 2020 Auto Rate Q1 2020 H2 2020 33

34. Slide 34: International footprint

    International footprint Steadfast Network model replication 1. New Zealand  48 brokers in the Network  Steadfast Underwriting Agencies building market presence utilising  NZ$482m of gross written premium Network distribution in CY19  Strong buy-in from insurer partners  SCTP introduced 2. Asia

35. Slide 35: International footprint

    International footprint unisonSteadfast  Steadfast Group holds a 40% equity stake in unisonSteadfast  One of the world’s largest global general insurance broker networks, offering multi-jurisdictional coverage 600+ Referrals between the Steadfast Network and unisonSteadfast  Supervisory board con

36. Slide 36: 1H20 Detailed Financials

    1H20 Detailed Financials 36

37. Slide 37: 1H20 detailed financials

    1H20 detailed financials Reconciliation of statutory to underlying earnings 6 months ended 31 December 2019 Total statutory Reclassifications Non-trading items Total underlying $’000 Fees and commissions income 235,093 81,626 - 316,719 Professional Services and other fees 50,442 (17,709) - 32,733 Pr

38. Slide 38: 1H20 detailed financials

    1H20 detailed financials Statement of income (underlying IFRS view), exclusive of JLG mark-to-market 12 months ended 30 June Underlying Underlying Period-on-period Organic Acquisitions & $ million 1H20 1H19 growth % growth %2 hubbing growth %3 Fees and commissions¹ 316.7 278.1 13.9% 8.7% 5.2% Profes

39. Slide 39: 1H20 detailed financials

    1H20 detailed financials Statement of income (underlying IFRS view) 6 months ended 31 December 2019 Underlying Underlying Underlying Underlying Underlying $ million 1H20 2H19 1H19 2H18 1H18 Fees and commissions¹ 316.7 305.3 278.1 266.6 225.8 Professional Services and other fees 32.7 23.5 24.8 19.8 2

40. Slide 40: 1H20 detailed financials

    1H20 detailed financials Statutory cash flow statement $ million 1H20 1H19 $45.8m free cash flow in 1H20 Cash flows from operating activities Cash from operations $109.2m Less IQumulate collections balance date mismatch2 ($20.6)m Net cash from operating activities before customer 109.2 62.3 trust ac

41. Slide 41: 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 Sept 2018 Sept 2019 Sept 2018 Sept 2019 Sept 2018 Sept 20

42. Slide 42: 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 Sept 2018 Sept

43. Slide 43: 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 25 February 2020. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offere

44. Slide 44: Steadfast

    <> Steadfast ‘THE STRENGTH YOU NEED

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