Slide 1: FY20 Results – Investor Presentation
Steadfast Group FY20 Results – Investor Presentation 25 August 2020
Slide 2: Table of Contents
Table of Contents 04 FY20 Highlights FY20 Results – Investor 12 FY20 Financial Summary Presentation 20 FY21 Outlook 22 Appendices 2
Slide 3: 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) 10 1,400 240 1,200 200 8 1,000 160 6 800 120 4 600 80 400 2 40 200 0 0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY14 F
Slide 4: FY20 Highlights
FY20 Highlights 4
Slide 5: Increase in underlying NPAT of 22.6% despite COVID-19
Steadfast Group Increase in underlying NPAT of 22.6% despite COVID-19 Underlying earnings 1 Statutory earnings1 EBITA +15.5% to $223.5m NPAT loss of $55.2m as flagged at FY19 results NPAT +22.6% to $108.7m Expensing of consideration for the acquisitions of IBNA ($72.7m post tax) and the PSF
Slide 6: FY20 COVID-19 impact on our business
Steadfast Group FY20 COVID-19 impact on our business Steadfast Group In response to the health risks associated with the COVID-19 pandemic, Steadfast Group adopted our crisis management plan with all employees working remotely from home since Tuesday 24 March 2020 Working remotely has resulted i
Slide 7: Professional services model
Professional services model Aligns the interests of all parties in the insurance supply chain As an industry leader, the parent entity, Steadfast Group continues to actively review our service model and the potential implications of the Hayne Royal Commission By engaging with our clients and the
Slide 8: Steadfast Network
Steadfast Network Growth from IBNA and continued moderate price increases from strategic partners FY20 vs FY19 Financial highlights Steadfast Network GWP +34.8% to $8.3 billion driven by: GWP of $8.3bn vs $6.1bn New IBNA members +6.3% organic growth Continued growth from Authorised Representat
Slide 9: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies Record organic GWP and underlying EBITA growth Financial highlights FY20 vs FY19 Steadfast Underwriting Agencies GWP +13.1% to $1.33 billion GWP of $1.33bn vs $1.17bn Primarily driven by price and volume uplift +12.1% organic growth Property lines remain strong
Slide 10: Our insurTech
Our insurTech Steadfast Client Trading Platform and INSIGHT Steadfast Client Trading Platform (SCTP) $638m 9 business lines and 14 insurer and underwriting agency partners live on SCTP GWP transacted through SCTP in FY20 10,168 brokers are active users of SCTP, of which 3,219 access the SCTP thr
Slide 11: Final FY20 dividend
Final FY20 dividend Final dividend up 13.2% Final FY20 dividend of 6.0 cps (fully franked), up from 5.3 cps in FY19, +13.2% 13.0 FY20 target dividend payout ratio of 65% to 85% of underlying NPAT1 11.0 Dividend Reinvestment Plan (DRP) to apply to final FY20 dividend The DRP will operate by t
Slide 12: FY20 Financial Summary
FY20 Financial Summary 12
Slide 13: Impact of IBNA and Steadfast PSF Rebate offer on statutory results
Impact of IBNA and Steadfast PSF Rebate offer on statutory results IBNA Steadfast PSF Rebate offer 100% acceptance rate for takeover of IBNA for consideration of $72.7m (post tax) 74% acceptance rate at a cost of $63.1m (post tax) Revenue commenced 1 July 2019 Revenue commenced 1 July 2019
Slide 14: Group financial performance
Group financial performance Strong underlying earnings growth Underlying earnings – excluding JLG mark-to-market Period-on- 12 months to 30 June Underlying Underlying period Historically the results have included JLG mark-to-market $ million FY201 FY191 growth % adjustment. Going forward, underlying
Slide 15: Drivers of 15.5% YTD growth in underlying EBITA
Drivers of 15.5% YTD growth in underlying EBITA1 Organic and acquisition growth Organic growth: $2.6m (1.3%) Acquisition growth: $27.4m (+14.2%) $223.5m 240 230 $11.4m (+15.5%) 220 $8.0m 210 $8.4m $5.3m ($4.8m) $2.7m 5.9% ($2.2m) $1.3m 200 $193.4m 4.1% 190 (2.5%) 1.4% 2.7% 4.3% (1.2%) 0.7% 180 170 1
Slide 16: Insurance broking
Insurance broking Organic and acquisition growth Insurance broking- consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June 2020 Underlying Underlying Period-on-period Organic Growth from $ million FY201 FY191 growth % growth % acquisitions % Net revenue 534.8 485.0 10.2% 6.3%
Slide 17: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies Strong organic growth driven by price and volume Steadfast Underwriting Agencies – consolidated & equity accounted (assuming 100% ownership) 12 months to 30 June 2020 Underlying Underlying Period-on-period Organic Growth from $ million FY201 FY191 growth % growth % ac
Slide 18: FY20 cash flow statement
FY20 cash flow statement Continued conversion of profits to cash $ million FY20 FY19 Cash flow summary Adjusted net cash from operating activities 138.6 117.7 $ million FY20 FY19 Cash used for dividends (68.0) (62.6) Statutory operating cash flow 206.0 117.7 Free cash flow 70.6 55.1 Less IQumulate c
Slide 19: Statutory balance sheet
Statutory balance sheet Conservatively geared balance sheet with capacity for future growth 30 Jun 20 30 Jun 19 Corporate debt facilities (excludes premium funding) $ million $ million Maturity Total Cash and cash equivalents 211 117 Facility A - Revolving Jan 2023 260 Cash held on trust 449 427 Fac
Slide 20: FY21 Outlook
FY21 Outlook 20
Slide 21: FY21 outlook
FY21 outlook Resilient business model prepared for both the challenges and opportunities ahead Key assumptions include: Guidance1 Steadfast has invested $70m on equity broker acquisitions Underlying EBITA $235 million - $245 million post balance date and is intending to complete the final PSF Reba
Slide 22: Appendices
Appendices Steadfast Group (slide 23) Steadfast Network (slide 28) Steadfast Underwriting Agencies (slide 36) Our insurTech (slide 38) FY20 detailed financials (slide 42) 22
Slide 23: Steadfast Group
Steadfast Group 23
Slide 24: Broker and underwriting agency model
Broker and underwriting agency model Advice based offering primarily focused on SME market Client Steadfast is focused on the SME market Premium Advice Fee Premium Niche insurance products General insurance broker The Steadfast Network is a collection of 458 brokerages who Underwriting agency pool t
Slide 25: Three business units focused on the intermediated general insurance market
Steadfast Group Three business units focused on the intermediated general insurance market Steadfast Group (listed on ASX) Steadfast Network Steadfast Underwriting Agencies Complementary Businesses 458 general insurance brokers 25 underwriting agencies 8 businesses supporting the Steadfast Network a
Slide 26: Size and scale
Steadfast Group Size and scale Largest general insurance broker network in Australasia Largest group of underwriting agencies in Australasia Annual GWP1 458 Annual GWP1 25 $8.3 billion Steadfast Network brokers $1.3 billion Underwriting agencies Steadfast Network collects professional services and o
Slide 27: Our market
Our market $25 billion of intermediated general insurance GWP written in CY19 Australian market – gross written premium1 Steadfast Group is focused on the intermediated $25bn general insurance market, Intermediated market with a primary focus on SME Steadfast Network brokers CY19 $7.7bn2 Intermediat
Slide 28: Steadfast Network
Steadfast Network 28
Slide 29: Steadfast Network Strategy
Steadfast Network Largest general insurance broker Network in Australasia Steadfast Network Strategy Steadfast Network $8.3bn The Steadfast Network has 458 general Exclusive to Steadfast Network brokers Be the best solution for our clients’ needs insurance brokers in Australia, New Zealand Opera
Slide 30: Network brokers have joined the Steadfast Network since IPO
Steadfast Network 253 brokers have joined the Steadfast Network since IPO Number of Steadfast Network brokers 550 16 37 500 78 24 458 12 450 31 400 31 350 97 300 278 250 200 August New brokers Allied NZ Insight IBNA Singapore Hubbing¹ Sold Leavers Jun 2020 2013 (IPO) 253 brokers have joined and 12
Slide 31: Worldwide broker offices
Steadfast Network Worldwide broker offices (excluding unisonSteadfast) 1 United Kingdom 41 Asia 12 353 Northern Territory 189 Queensland 112 Western Australia South Australia 500 New South Wales 110 22 North Island 488 Australian Capital Territory Victoria 1,887 broker offices 32 across Australia, 2
Slide 32: 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 12% 4% 3% 12% 35% 34% Micro (Policy size <$650) Business pack 20% QBE 16% VIC 38% Small Enterprise (Policy size $650 - $5,000) Commerical motor 14% CGU 14% Sm
Slide 33: 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
Slide 34: International footprint
International footprint Steadfast Network model replication 1. New Zealand 49 brokers in the Network Steadfast Underwriting Agencies building market presence utilising NZD $459m of gross written Network distribution premium in FY20 Strong buy-in from insurer partners SCTP introduced 2. Asi
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
Slide 36: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies 36
Slide 37: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies 25 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
Slide 38: Our insurTech
Our insurTech 38
Slide 39: Steadfast Client Trading Platform (SCTP) – benefits for clients, brokers and insurers
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 pricing, competit
Slide 40: Insurer and underwriting agency partners on the SCTP
Our insurTech Insurer and underwriting agency partners on the SCTP Commercial property Domestic home, Business pack Professional risks Liability Commercial motor Strata & ISR motor & landlords 2H FY21 1H FY21 2H FY21 2H FY21 2H FY21 2H FY21 Key: indicates new insurers joining SCTP product lines 40
Slide 41: Steadfast Technologies
Our insurTech Steadfast Technologies Steadfast Client Trading Platform (SCTP) The Steadfast Client Trading Platform is a digital INSIGHT is a broking platform with a powerful search UnderwriterCentral is a cloud-based agency marketplace which provides Steadfast Network brokers with engine which give
Slide 42: FY20 Detailed Financials
FY20 Detailed Financials ¢ 42
Slide 43: Reconciliation of statutory to underlying earnings
FY20 detailed financials Reconciliation of statutory to underlying earnings 12 months ended 30 June 2020 Total statutory Reclassifications Non-trading items Total underlying $’000 Fees and commissions income 592,784 114,105 - 706,889 Premium funding income 61,465 14,062 (2,410) 73,117 Interest incom
Slide 44: Statement of underlying income (IFRS view), exclusive of JLG mark-to-market
FY20 detailed financials Statement of underlying income (IFRS view), exclusive of JLG mark-to-market 12 months ended 30 June Underlying Underlying Period-on-period Organic Acquisitions & $ million FY20 FY19 growth % growth %3 hubbing growth %4 Fees and commissions1, 2 706.9 631.8 11.9% 7.7% 4.2% Oth
Slide 45: Statement of income (underlying IFRS view)
FY20 detailed financials Statement of income (underlying IFRS view) 12 months ended 30 June 2020 Underlying Underlying Underlying Underlying Underlying Underlying $ million 2H20 1H20 2H19 1H19 2H18 1H18 Fees and commissions¹, 2 357.4 349.5 328.9 302.9 286.4 246.6 Other revenue 58.1 61.3 38.5 18.1 18
Slide 46: Statutory cash flow statement
FY20 detailed financials Statutory cash flow statement $ million FY20 FY19 $70.6m free cash flow in FY20 Cash flows from operating activities Cash from operations 206.0 Less IQumulate collections balance date mismatch1 (55.2) Net cash from operating activities before customer 206.0 117.7 trust accou
Slide 47: 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 March 2019 March 2020 March 2019 March 2020 March 2019 Ma
Slide 48: 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 March 2019 Marc
Slide 49: 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 August 2020. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offered
Slide 50: Steadfast
<> Steadfast ‘THE STRENGTH YOU NEED