FSA GROUP LIMITED — AGM Information 2014

Nov 27, 2014

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FSA Group AGM Presentation 28 November 2014

Agenda

1. Chairman’s address

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2. Executive Director’s address

3. Ordinary business

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Chairman’s address

• Another year of strong performance

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• PAT of $13.5m up 25%

• EPS basic of 10.78c up 27%

• Dividend per share of 6c up 20%

• Focus on growing our loan pools

• In a strong financial position to expand our operations

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Executive Director’s address

• Overview

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• Core division – Services

• Growth divisions – Consumer Lending and Business Lending

• Financial results 2014

• Where are we heading?

• July to October 2014

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Overview

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Overview

Australia’s largest provider of debt solutions; direct lender to individuals & businesses

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Profit after tax $13.5m up 25% FY2014 EPS basic 10.78c up 27% Dividend/share 6.0c up 20% FSA operates across 3 key divisions - Services Divisions - Consumer Lending - Business Lending

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Core Division Services

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Services

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FSA assists individuals wishing to enter into a formal payment arrangement with their creditors through:

1. Debt Agreement

2. Personal Insolvency Agreement 3. Bankruptcy

• FSA is Australia’s largest provider of debt solutions

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Services

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- Largest provider

- 45%* market share for new agreements (49% 5 year average) - Our focus is affordable, viable and sustainable agreements Debt - Reflected by our 61%* market share for paid out agreements Agreements - Over 18,000 clients owing $313m to creditors - Low arrears, $81m paid to creditors in 2014 - Superior returns to creditors compared to market - Fee for service income delivering annuity cash flow

- One of the largest providers PIAs and - Over 1,500 clients Bankruptcy - Fee for service income delivering annuity cash flow

• Calculated using AFSA statistics for FY2014

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FSA is the leader in debt agreements

FSA’s Market Share Market Size

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CAGR = 7.1%

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Growth Divisions Consumer Lending and Business Lending

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Consumer Lending

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Home Loans

FSA is one of the few remaining non-conforming home loan lenders assisting clients with property who wish to consolidate their debt.

FSA offers non-conforming personal loans to existing Personal Loans clients to assist with the purchase of a motor vehicle. Launched in February 2014.

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Consumer Lending

Home Loans – 30 June

Loan Pool Size	$221m
Average Loan Size	$207,951
Average Weighted LVR	67%
Variable Rate Borrowers	100%
Geographical Spread	Australia Wide
>30 day arrears	3.32%

Funding

• Non-recourse funding of $250m

• WBC Senior $230m

• Institutional Mezzanine $20m

• Renewed to October 2016

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Personal Loans – 30 June

Loan Pool Size	$1.1m
Average Loan Size	$23,889
% Secured	100%
Fixed Rate Borrowers	100%
Geographical Spread	Australia Wide
>30 day arrears	NA

Funding

• Corporate funding of $10m from WBC

• Renewed to December 2015

• A structured funding facility will be established

• Lender’s margin delivering annuity cash flow

• FSA’s balance sheet risk limited to 3% equity

• Lender’s margin delivering annuity cash flow

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Business Lending

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FSA Group offers factoring finance to assist small Business Lending businesses with cash flow management.

Business Lending – 30 June

Loan Pool Size	$24m
Average Loan Size	$294,240
Average Weighted LVR	Ranges 55% to 65%
Variable Rate Borrowers	100%
Geographical Spread	Australia Wide
>90 day arrears	5.89%

Funding

• Funding of $35m from WBC

• Renewed to June 2015

• FSA 15% equity

• Lender’s margin delivering annuity cash flow

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Financial Results

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PBT by division

	FY2012	FY2013	FY2014	%
Services	$11.6m	$11.7m	$11.2m	-4%
Consumer Lending	$4.1m	$5.1m	$6.8m	+34%
Business Lending	($0.7m)	$0.8m	$2.8m	+240%
Other	($0.1m)	$0.1m	($0.1m)	-
Profit before tax	$14.9m	$17.8m	$20.8m	+17%

Home Loans pool $232m $221m $221m Personal Loans pool - - $1.1m Business Lending pool $25m $20m $24m

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Group financials

	FY2012	FY2013	FY2014	%
Revenue and income	$59.0m	$64.4m	$65.5m	+2%
Profit before tax	$14.9m	$17.8m	$20.8m	+17%
Profit after tax1	$8.5m	$10.8m	$13.5m	+25%
Operating cash flow2	$9.4m	$14.0m	$12.0m	-14%
NTA backing/share	37.8c	42.3c	47.1c	+11%
EPS basic	6.27c	8.51c	10.78c	+27%
Dividend/share	2.2c	5.0c	6.0c	+20%

1. Profit after tax attributable to members

2. Net cash inflow from operating activities

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PAT	vsOperating cash flowvs Dividends
- 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 2010 2011 2012 2013 2014 Net profit after tax attributable to members Net cash inflow from operating activities Dividends paid

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What's underpinning operating cash flow? Long-term annuity income

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Average client life
(years)
Services - Debt Agreements 4.5 to 5.5
- PIA/Bankruptcy 3
Consumer Lending - Home Loans 3 to 4
- Personal Loans 4 to 5
Business Lending 2.5 to 3.5
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- Growing loan pools Capital requirements

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Operating cash flow - $14m in 2013 and $12m in 2014

Investing cash flow - CAPEX around $500k pa (stable)

Business generating $12m+ a year in free cash flow

Future capital requirements to support loan pool growth

• Home Loans - $0.3m capital required for $10m increase in pool

• Personal Loans - $3.0m[1] capital required for $10m increase in pool

• Business Lending - $1.5m capital required for $10m increase in pool

• Estimated – a structured funding facility has not yet been established for the Personal Loan product.

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Return on Equity

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35%
30%
32%
25%
22%
20%
19%
20% 18%
15%
15%
13%
10%
5%
0%
2008 2009 2010 2011 2012 2013 2014
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Growth in loan pools will be the key to growing profitability at an above average annual rate. ROE expected to increase as loan pools grow.

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Where are we heading? July to October 2014

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Where are we heading?

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Services Maintain our leading position in a niche market Consumer Lending Focus on growing our loan pools Business Lending Focus on growing our loan pools New Product Trial a new product to assist clients with paying their bills Staff Investing in professional development and growth

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July to October 2014

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New client numbers up 16% for Debt Agreements and down 3% Services for PIA/Bankruptcy on previous corresponding period. BDM team established to initiate Home Loans referrals among Consumer Lending other initiatives. Loan pool $222m, expect loan pool growth over 2015. Still trialling Personal Loans, loan pool $2.6m. BDM team expanded. Loan pool $27m, expect loan pool growth Business Lending over 2015. Trialling 100 clients with new product to assist clients with paying New Product their bills. Plan to increase client numbers over 2015. Earnings and Earnings guidance - will be provided after half year results Dividend guidance Dividend guidance - 6.25c to 6.75c per share for FY2015

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Investor Relations Contacts

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Mr. Tim Odillo Maher Ms. Deborah Southon Executive Director Executive Director FSA Group Limited FSA Group Limited Level 3, 70 Phillip Street Level 3, 70 Phillip Street Sydney NSW 2000 Sydney NSW 2000 T: 02 9293 6054 T: 02 9293 6058 F: 02 9293 6032 F: 02 9293 6032 E: tmaher@fsagroup.com.au E: dsouthon@fsagroup.com.au

Further information can be accessed from

fsagroup.com.au

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Disclaimer

• This presentation is designed to provide a general overview of the activities and financial position of FSA Group Limited. The material set out in the presentation is current as at the date of this presentation . It is information in summary form and does not purport to be complete.

• This presentation includes forward looking statements about estimates and outcomes which may be affected by internal and external factors and involve known and unknown risks which may cause actual results and business performance to differ from those expressed or implied in such statements. No assurance or guarantee is, or should be taken to be, given in relation to the future business performance or the likelihood that the assumptions, estimates or outcomes will be achieved.

• Whilst management has taken every effort to ensure the accuracy of the material in this presentation, it is provided for information only. FSA Group Limited, its officers and management exclude and disclaim any liability in respect of anything done in reliance on this presentation.

• It is not intended that the material in this presentation be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered with or without professional advice, when deciding if an investment is appropriate.

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