FSA GROUP LIMITED — AGM Information 2016

Nov 23, 2016

AGM Presentation 24 November 2016

Agenda

• Overview

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• Segments

• Services

• Consumer Lending

• Business Lending – sold 30 May 2016

• Financial Results 2016

• 5 Year Strategic Plan 2016 to 2020

• July to October 2016

FSA Group Limited – AGM Presentation 2016

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Overview

Overview

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

What we do For over 15 years, FSA has helped thousands of Australians take control of their debt. Our large and experienced team of professionals offers a range of debt solutions and direct lending services, which we tailor to suit individual circumstances and to achieve successful outcomes for our clients.

Segments

Operates across 2 segments:

• Services - Consumer Lending Business Lending – sold 30 May 2016

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Services

Services

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Debt Agreements FSA offers a range of services to assist clients wishing to enter into a payment arrangement with their creditors. These services include informal arrangements, debt agreements, PIAs and personal insolvency agreements and bankruptcy. Bankruptcy FSA offers a bill paying service which allows clients to plan for Easy Bill Pay and take control of their bills.

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Market

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FSA is the leader in debt agreements

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Services

Debt Agreements

PIAs and Bankruptcy

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Market share 41%* 5% decrease in new clients 19,553 clients under administration up 4% $346m of debt managed $79m paid to creditors

Market share impacted by lower new client numbers due to staffing challenges in the first half. Appropriately staffed for 2017. One of the largest trustees 10% decrease in new clients 1,424 clients under administration down 12%

~~* Calculated using AFSA statistics for FY2016~~ Easy Bill Pay Still trialling 2,132 clients 131,408 bills paid totalling $14.8m

Investing in a new web site, mobile application and marketing strategy for launch in 2017

• Calculated using AFSA statistics for FY2016

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Consumer Lending

Consumer Lending

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Home Loans

FSA offers non-conforming home loans to assist clients with property who wish to consolidate their debt.

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

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Loan pools

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Loan Pools	FY2015	FY2016	% Change
Home Loans	$233.0m	$262.0m	+12%
Personal Loans	$5.9m	$19.8m	+237%
Total	$238.9m	$281.8m	+18%
Arrears > 30 day	FY2014	FY2015	FY2016
Home Loans	3.32%	2.87%	2.17%
Personal Loans	Not applicable	Nil	0.59%

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Loan pools

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Loan Pool Data Home Loans Personal Loans Average loan size $304,832 $25,299 Security type Residential home Motor vehicle Average loan to valuation ratio 67% 100%+ Variable or fixed rate Variable Fixed Geographical spread All states All states Funding Facility Type Provider Limit Renewal Date	Loan Pool Data Home Loans Personal Loans Average loan size $304,832 $25,299 Security type Residential home Motor vehicle Average loan to valuation ratio 67% 100%+ Variable or fixed rate Variable Fixed Geographical spread All states All states Funding Facility Type Provider Limit Renewal Date
Home Loans	Non-recourse senior Westpac $275m* Oct-17
	Non-recourse mezzanine Institutional $20m Oct-17
Personal Loans	Recourse corporate Westpac $20m** Jul-17

• Increased by $25m during November 2016

• ** Looking at putting in place a $50m facility

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Financial Results

PBT by segment from continuing operations

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Profit before tax by segment	FY2015	FY2016	% Change
Services	$14.8m	$14.2m	- 4%
Consumer Lending	$ 5.1m	$5.2m	+ 3%
Other/unallocated	$0.1m	($2.5m)*
Profit before tax	$19.9m	$16.8m	- 16%

Excludes Business Lending segment sold 30 May 2016

Services Profit was impacted by lower new client numbers (due to staffing challenges in the first half) and an increase in marketing costs. Appropriately staffed for 2017.

Consumer Lending Profit was impacted by an increase in staff numbers and marketing spend to grow our loan pools. As our loan pools grow our business will benefit from higher incremental margins due to fixed cost leverage.

Other/unallocated * Includes the before tax $2.4m mark to market unrealised loss in 2016 on our 5 year interest rate swap agreements. These swap agreements were put in place to enable us to protect our borrowers on a case by case basis in the event of interest rates increasing.

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Group financials from continuing operations

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Financial Overview	FY2015	FY2016	% Change
Operating income	$62.3m	$62.1m	0%
Profit before tax	$19.9m	$16.8m	- 16%
Profit after tax attributable to members	$12.9m	$10.7m	- 18%
EPS basic	10.34c	8.52c	- 18%
Net cash inflow from operating activities	$10.9m	$11.2m	+ 3%
Dividend/share	6.50c	7.00c	+ 8%
Shareholder Equity	$71.4m	$76.8m	+ 8%

Excludes Business Lending segment sold 30 May 2016

Impacted by the before tax $2.4m mark to market unrealised loss in 2016 on PBT, PAT, EPS our 5 year interest rate swap agreements.

Operating cash flow

Strong net cash inflow driven by long term annuity income from clients.

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Group financials from continuing operations, excluding loss on swap agreement

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Financial Overview	FY2015	FY2016	% Change
Profit before tax	$19.9m	$19.2m	- 3%
Profit after tax attributable to members	$12.9m	$12.3m	- 5%
EPS basic	10.34c	9.85c	- 5%

Excludes the before tax $2.4m mark to market unrealised loss in 2016 on our 5 PBT, PAT, EPS year interest rate swap agreements.

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

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		No of clients/ loan pool size	Average client life in years
Services	- Debt Agreements	19,553	4.5 to 5.5
	- PIA/Bankruptcy	1,424	3
	- Easy Bill Pay	2,132	Expect > 5
Consumer Lending	- Home Loans	$262m	3 to 4
	- Personal Loans	$20m	4 to 5

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5 year strategic plan

5 year strategic plan 2016 to 2020

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Debt Agreements, PIAs and Bankruptcy

• Maintain our leading position in a niche market

Services

Easy Bill Pay

• Aiming to add over 500 new clients per month over the next few

• years

• Expand our product offering

Consumer Lending

• Focus on growing our loan pools

• Aiming to grow to around $500m – 16% growth rate p.a.

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5 year strategic plan 2016 to 2020

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• Earnings Expect average long term earnings growth of around 10% pa - Growth rate in earnings may be lower in earlier years

• Capital Dividends around 50% to 60% of earnings -

• Management Balance of earnings to be re-invested to support the capital requirements of our growing loan pools

• • Strategy is self-funding. We do not expect to raise equity capital

• Headwinds Consumer debt levels are at a record high and demand for our products and services is strong. However, we may face a number of headwinds over the next few years, including historically low interest rates adversely affecting certain areas of our business.

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July to October 2016

Debt Agreements:

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• New client numbers up 4% on pcp - Clients under administration up 1% on June

• PIAs and Bankruptcy:

• Services - New client numbers up 25% on pcp - Clients under administration up 5% on June

• Easy Bill Pay:

• Clients 2,597 up 22% on June - 189,021 bills paid to date totalling $21.1m

Home Loans:

Consumer

• Loan pool $269.1m up 3% on June - Arrears > 30 day 1.56%

Lending Personal Loans:

• Loan pool $25.7m up 30% on June

• Arrears > 30 day 0.91%

Earnings and Earnings guidance - will be reviewed after half year results Dividend FY2017 Dividend guidance - 6.50c to 7.50c per share

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FSA Group Limited – AGM Presentation 2016

Investor Relations Contacts

Mr. Tim Odillo Maher Executive Director FSA Group Limited Level 3, 70 Phillip Street Sydney NSW 2000 T:02 8985 5090 F:02 8985 5310 E: tmaher@fsagroup.com.au	Ms. Deborah Southon Executive Director FSA Group Limited Level 3, 70 Phillip Street Sydney NSW 2000 T:02 8985 5091 F:02 8985 5333 E:dsouthon@fsagroup.com.au

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Further information can be accessed from fsagroup.com.au

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Cautionary Statements and Disclaimer Regarding Forward-Looking Information

This release may contain forward-looking statements, including statements about FSA Group Limited’s ( Company ) financial condition, results of operations, earnings outlook and prospects. Forward-looking statements are typically identified by words such as “plan,” “aim”, “focus”, “target”, “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions.

The forward-looking statements contained in this release are predictive in character and not guarantees or assurances of future performance. These forward-looking statements involve and are subject to known and unknown risks and uncertainties many of which are beyond the control of the Company. Our ability to predict results or the actual effects of our plans and strategies is subject to inherent uncertainty.

Factors that may cause actual results or earnings to differ materially from these forward-looking statements include general economic conditions in Australia, interest rates, competition in the markets in which the Company does and will operate, and the inherent regulatory risks in the businesses of the Company, along with the credit, liquidity and market risks affecting the Company’s financial instruments described in the Company’s latest Annual Report.

Forward-looking statements are based on assumptions regarding the Company’s financial position, business strategies, plans and objectives of management for future operations and development and the environment in which the Company will operate. Those assumptions may not be correct or exhaustive.

Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements.

Forward-looking statements are based on current views, expectations and beliefs as at the date they are expressed. The Company disclaims any responsibility to and undertakes no obligation to update or revise any forward-looking statement to reflect any change in the Company’s circumstances or the circumstances on which a statement is based, except as required by law.

The Company disclaims any responsibility for the accuracy or completeness of any forward-looking statement to the extent permitted by law. Unless otherwise stated, the projections or forecasts included in this release have not been audited, examined or otherwise reviewed by the independent auditors of the Company.

This release is not an offer or invitation for subscription or purchase of, or a recommendation of securities.

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