Slide 1: Steadfast Group 1H23 Results Investor Presentation
Steadfast Group 1H23 Results Investor Presentation 2023 21 February
Slide 2: Table of Contents
Table of Contents 1H23 Results 03 1H23 Highlights Investor Presentation 14 1H23 Financial Summary 22 Outlook 24 Appendices 2
Slide 3: 1H23 Highlights
1H23 Highlights 3
Slide 4: Continued strong track record since listing on ASX
Continued strong track record since listing on ASX Steadfast Group Steadfast Network GWP ($bn) Steadfast Underwriting Agencies GWP ($bn) Underlying EBITA ($m) 2.0 360 12 320 10 280 1.5 240 8 200 1.0 160 6 120 4 0.5 80 40 2 0 0.0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY221H23 FY14 FY15 FY16 FY17
Slide 5: Increase in underlying NPAT of 18.2% pcp
Steadfast Group Increase in underlying NPAT of 18.2% pcp Underlying earnings 1 (refer slide 16) Broker and underwriting agency growth EBITA +22.5% to $188.6m (1H22 $153.9m) Equity brokers (including Network) aggregate underlying EBITA +21.9% (refer slide 18) NPAT +18.2% to $90.2m (1H22 $76.3m)
Slide 6: On target to complete $220 million of Trapped Capital acquisitions in FY23
Steadfast Group On target to complete $220 million of Trapped Capital acquisitions in FY23 Trapped Capital acquisitions update 1H23 Annualised Acquisition $177.7m of Trapped EBITA cost Capital acquisitions completed year to IBA acquisition1 $21.2m $301.0m date 27 completed Trapped Capital acquisitio
Slide 7: 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
Slide 8: 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
Slide 9: 1H23 operating update
1H23 operating update Reinsurance market • The rate of attritional and catastrophe claims has not ebbed • Reinsurers are requiring higher retentions and significant rate increases • CY23 will see further cost escalation for Australian insurers in retention of risk, the cost of reinsurance and impact
Slide 10: Steadfast broking
Steadfast broking Sustained growth and further Network acquisitions Financial highlights – 1H23 1H23 vs 1H221 Steadfast Network GWP +14.7% to $5.6bn is driven by 11.5% organic growth for the period: GWP of $5.6bn vs $4.8bn o Price increases across all non-statutory lines +11.5% organic growth o Vo
Slide 11: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies Sustained growth driven by price and volume Financial highlights – 1H23 1H23 vs 1H22 Steadfast Underwriting Agencies GWP +18.8% to $1.0bn ꟷ Driven by price and volume uplift ꟷ Property line pricing remains strong ꟷ Capacity constraints in certain lines GWP of $1.0bn
Slide 12: Our insurTech
Our insurTech 8.6m Continued broker take-up of our technology platforms Quotes provided since SCTP inception $559m Steadfast Client Trading Platform (SCTP) GWP transacted through SCTP in 1H23 SCTP delivers strong client outcomes Genuine contestable marketplace, generating improved pricing compet
Slide 13: Interim dividend up 15.4%
Interim dividend up 15.4% Interim 1H23 dividend Underlying diluted EPS (NPAT) (cents per share) 18 Interim 1H23 dividend of 6.0 cps (fully franked), 16 up from 5.2 cps in 1H22, +15.4% 14 Dividend Reinvestment Plan (DRP) to apply to interim 1H23 12 dividend 10 ꟷ The DRP will operate by the on-mar
Slide 14: 1H23 Financial Summary
1H23 Financial Summary 14
Slide 15: Reconciliation of underlying NPAT to statutory NPAT
Reconciliation of underlying NPAT to statutory NPAT 6 months to 31 December $ million 1H23 1H22 Underlying net profit after tax (NPAT) 90.2 76.3 Adjustments for non-trading items (net of tax and non-controlling interest): Deferred consideration expense for outperforming acquisitions (8.3) (1.4) Mark
Slide 16: Group financial performance
Group financial performance Strong underlying earnings growth Underlying earnings 6 months to 31 December Underlying Underlying Period-on-period 1H231 1H221 growth % Revenue ($m) 662.8 520.9 27.2% EBITA ($m) 188.6 153.9 22.5% NPAT ($m) 90.2 76.3 18.2% Diluted EPS2 (NPAT) (cents) 9.06 8.41 7.7% NPATA
Slide 17: Drivers of 22.5% growth in underlying EBITA
Drivers of 22.5% growth in underlying EBITA Organic and acquisition growth Organic Growth: $14.3m/9.3% Acquisition Growth: $20.4m/13.2% 200.0 $5.3m / 3.4% $34.7m / 22.5% 190.0 $15.1m / 9.8% 180.0 $2.4m / 1.6% 170.0 $11.9m / 7.7% 160.0 $188.6m 150.0 140.0 $153.9m 130.0 120.0 1H FY22 EBITA Organic Gro
Slide 18: Steadfast broking
Steadfast broking Organic and acquisition growth Equity brokers and network - consolidated & equity accounted (assuming 100% ownership) 6 months to 31 December Underlying Underlying Period-on-period Organic Growth from $ million 1H23 1H22 growth % growth % acquisitions % Net revenue 413.2 335.6 23.1
Slide 19: Steadfast Underwriting Agencies
Steadfast Underwriting Agencies Organic growth driven by price and volume Steadfast Underwriting Agencies – consolidated & equity accounted (assuming 100% ownership) 6 months to 31 December Underlying Underlying Period-on-period Organic Growth from $ million 1H231 1H221 growth % growth % acquisition
Slide 20: Strong conversion of profits to cash
Strong conversion of profits to cash 1H23 cash flow statement Cash flow summary¹ $ million 1H23 1H22 Statutory operating cash flow² $138.7 $113.8 > 100% conversion of underlying NPATA to cash Less lease obligation payments ($9.1) ($7.7) Adjusted operating cashflow $129.6 $106.1 > 100% conversion of
Slide 21: Conservatively geared balance sheet
Conservatively geared balance sheet Statutory balance sheet $ million 31 Dec 22 30 June 22 Corporate debt facility (excludes premium funding) $ million Maturity Total Cash and cash equivalents 251 280 Tranche A – Revolving Nov 2024 320 Cash held on trust 843 665 Tranche B – Term Nov 2024 140 Premium
Slide 22: Outlook
Outlook 22
Slide 23: FY23 guidance upgraded
FY23 guidance upgraded Steadfast upgraded its FY23 guidance range Previous FY23 guidance range Upgraded FY23 guidance range Underlying EBITA $400m - $420m $420m - $430m Underlying NPAT $190m - $202m $198m - $208m Underlying diluted EPS (NPAT) growth 5% - 11% 10% - 15% Underlying NPATA $233m - $245m
Slide 24: Appendices
Appendices Steadfast Group (slide 25) Steadfast Network (slide 29) Steadfast Underwriting Agencies (slide 37) Our InsurTech (slide 39) 24 1H23 detailed financials (slide 43)
Slide 25: Steadfast Group
Steadfast Group 25
Slide 26: Business units focused on the intermediated general insurance market
Business units focused on the intermediated general insurance market Steadfast Group as at 31 December 2022 Steadfast Group (listed on ASX) Steadfast Network UnisonSteadfast Steadfast Underwriting Agencies Complementary Businesses 417 general insurance brokers 272 brokers in UnisonSteadfast 29 under
Slide 27: Size and scale
Size and scale Steadfast Group as at 31 December 2022 Largest general insurance broker network in Australasia Largest group of underwriting agencies in Australasia $11.5 bn 417 $1.9 bn 29 Annual GWP1 Steadfast Network brokers Underwriting agencies Annual GWP1 Steadfast Network collects professional
Slide 28: Our market
Our market $34bn of intermediated general insurance GWP written in FY22 Australian market – gross written premium1 Steadfast Group is focused on the intermediated $34bn general insurance market, Intermediated market with a primary focus on SME Steadfast Network brokers CY22 $11.5bn Intermediated Pri
Slide 29: Steadfast Network
Steadfast Network 29
Slide 30: Largest general insurance broker network in Australasia
Largest general insurance broker network in Australasia Steadfast Network Steadfast Network Strategy Steadfast Network $11.5bn1 The Steadfast Network has 417 general Exclusive to Steadfast Network brokers Be the best solution for our clients’ needs insurance brokers in Australia, New Zealand Ope
Slide 31: Steadfast Network brokers joined since IPO
Steadfast Network 291 brokers have joined the Steadfast Network since IPO Number of Steadfast Network brokers 600 22 123 77 550 500 31 20 31 5 450 2 417 130 400 350 300 276 250 200 August New brokers Allied NZ Insight IBNA Singapore Merged Sold Leavers PSC (AU & December 2013 externally NZ) 2022 (IP
Slide 32: Adoption of Steadfast Technologies by non-equity brokers
Steadfast Network Adoption of Steadfast Technologies by non-equity brokers Steadfast Network CY22 GWP using INSIGHT and SCTP SCTP GWP, $0.4b, 4% Other, $2.2b, 19% SCTP GWP, $0.2b, 2% Non-equity brokers received $11.5b Insight demo and/or proposal, Network GWP $1.4b, 12% $1.0b Equity brokers, $5.2b,
Slide 33: Worldwide broker offices
Steadfast Network Worldwide broker offices (excluding UnisonSteadfast) 1 United Kingdom 46 Asia 12 371 Northern Territory 191 Queensland 105 Western Australia South Australia 508 New South Wales 100 21 North Island 473 Australian Capital Territory Victoria 1,884 broker offices 24 across Australia, 3
Slide 34: 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% 14% 27% 6% 14% 38% Business pack 17% QBE 18% Micro (Policy size <$650) VIC 35% Retail 12% Small Enterprise (Policy size $650 - $5,000) CGU 13% NSW 26% Comm
Slide 35: International footprint
International footprint Steadfast Network model replication 1. New Zealand 53 brokers in the Network Steadfast Underwriting Agencies building market presence utilising NZ$674m of GWP in CY22 Network distribution Strong buy-in from insurer partners SCTP introduced 2. Asia Targeted Singapo
Slide 36: International footprint: UnisonSteadfast
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
Slide 37: Steadfast Underwriting Agencies
Steadfast Underwriting 37 Agencies
Slide 38: Steadfast Underwriting Agencies over niche products
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
Slide 39: Our insurTech
Our insurTech 39
Slide 40: 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: ꟷ Genuine contestable marketplace generating improved pricing, competit
Slide 41: 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 CY23 FY23 Key: indicates new insurers joining SCTP product lines 41
Slide 42: Steadfast Technologies
Our insurTech Steadfast Technologies Steadfast Client Trading Platform (SCTP) The Steadfast Client Trading Platform is a digital INSIGHT is an insurance broking platform with a UnderwriterCentral is a cloud-based agency marketplace which provides Steadfast Network insurance powerful search engine wh
Slide 43: 1H23 Detailed Financials
1H23 Detailed Financials
Slide 44: Reconciliation of statutory to underlying earnings
1H23 detailed financials Reconciliation of statutory to underlying earnings 6 months ended 31 December 2022 Total statutory Reclassifications Non-trading items Total underlying $ million Net fee and commissions income 460.6 112.9 - 573.5 Premium funding interest income 47.1 - - 47.1 Share of profits
Slide 45: Statement of underlying income (IFRS view)
1H23 detailed financials Statement of underlying income (IFRS view) 6 months ended 31 December 2022 Underlying Underlying Period-on-period Organic Acquisitions & $ million 1H23 1H22 growth % growth %2 hubbing growth %3 Fees and commissions1 573.5 452.9 26.6% 13.3% 13.3% Other revenue 89.3 68.0 31.2%
Slide 46: Statement of income (underlying IFRS view)
1H23 detailed financials Statement of income (underlying IFRS view) Underlying Underlying Underlying Underlying Underlying Underlying $ million 1H23 2H22 1H22 2H21 1H21 2H20 Fees and commissions¹ 573.5 540.7 452.9 410.4 381.5 357.4 Other revenue 89.3 74.3 68.0 51.7 56.3 58.1 Revenue – Consolidated e
Slide 47: Statutory cash flow statement
1H23 detailed financials Statutory cash flow statement $ million 1H23 1H22 $60.5m free cash flow in 1H23 $ million Cash flows from operating activities Cash from operations1 138.7 Net cash from operating activities before customer 138.7 113.8 Less lease obligation payments (9.1) trust account and pr
Slide 48: 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 2021 Sept 2022 Sept 2021 Sept 2022 Sept 2021 Sept 20
Slide 49: 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 2021 Sept
Slide 50: 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 21 February 2023. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offere
Slide 51: Questions
Questions 51
Slide 52: Steadfast
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