FSA GROUP LIMITED — AGM Information 2017

Nov 23, 2017

AGM Presentation 24 November 2017

Agenda

• Overview

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• Segments

• Services

• Consumer Lending

• Financial Results 2017

• Strategy and Outlook

FSA Group Ltd AGM presentation 2017

Overview

Overview

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

What we do

For over 17 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

FSA Group Ltd AGM presentation 2017

Overview

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

Founded with director loans of $50,000. Initial offering debt 2000 a reements then PIA’s and bankru tc then home loan brokerin g p y, g Back door listing raised $600,000 for shareholder spread 2002 re uirements q 2006 Commenced home loan lending 2009 Raised $5.2m to underpin home loan pools 2015 Commenced car loan lending 2017 Market capitalisation of circa $180m 2011 to 2017 $50m returned to shareholders in buybacks and dividends 2002 to 2017 Shareholder return of 17.7% pa assuming dividends are re-invested

FSA Group Ltd AGM presentation 2017

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, personal insolvency agreements and PIAs and Bankruptcy bankruptcy.

Easy Debt Management[FSA offers a service which assists clients with paying ] their debts.

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FSA Group Ltd AGM presentation 2017

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Market

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FSA Group Ltd AGM presentation 2017

FSA is the leader in debt agreements

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FSA Group Ltd AGM presentation 2017

Services

Debt Agreements

Market share 40%* 8% increase in new clients 20,194 clients up 4% $366m of debt managed $81m paid to creditors

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Our market share remains under pressure. We will never sacrifice quality and customer benefit for volume and market share.

PIAs and

One of the largest trustees

• Calculated using AFSA statistics for FY2016 Bankruptcy New clients steady 1,404 clients down 1%

Easy Debt 2,575 clients 318,730 bills paid totalling $34m Management

• Calculated using AFSA statistics for FY2017

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FSA Group Ltd AGM presentation 2017

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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FSA Group Ltd AGM presentation 2017

Loan pools

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Loan Pool Data	Home Loans	Personal Loans
Average loan size	$325,718	$25,483
Security type	Residential home	Motor vehicle
Average loan to valuation ratio	68%	100%+
Variable or fixed rate	Variable	Fixed
Geographical spread	All states	All states

FSA Group Ltd AGM presentation 2017

Loan pools

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Loan Pools	FY2016	FY2017	% Change
Home Loans	$262.0m	$306.3m	+17%
Personal Loans	$19.8m	$35.3m	+78%
Total	$281.8m	$341.6m	+21%
Arrears > 30 day	FY2015	FY2016	FY2017
Home Loans	2.87%	2.17%	2.21%
Personal Loans	Nil	0.59%	1.56%
Impairments	FY2015	FY2016	FY2017
Home Loans	$173,288	$564,867	$259,895
Personal Loans	Nil	$20,222	$294,911

FSA Group Ltd AGM presentation 2017

Loan pools

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Funding	Facility Type Provider Limit Renewal Date Non-recourse senior Westpac $300m October 2019 Non-recourse senior Westpac $25m September 2019 Non-recourse mezzanine Institutional $25m October 2019 Recourse corporate Westpac $40m December 2017
Home Loans
Personal Loans

For Personal Loans we continue our discussions in relation to securing a larger facility to support future growth.

FSA Group Ltd AGM presentation 2017

Financial Results

PBT by segment from continuing operations	PBT by segment from continuing operations	PBT by segment from continuing operations	PBT by segment from continuing operations
Profit before tax by segment	FY2016	FY2017	% Change
Services	$14.2m	$14.9m	+5%
Consumer Lending	$5.2m	$7.0m	+34%
Other/unallocated	($2.5m)	$1.6m
Profit before tax	$16.8m	$23.5m	+39%

Services Profitability positively impacted by higher new client numbers and a decrease in marketing costs. Negatively impacted by an upfront investment in resources.

Consumer Lending[Loan pool growth continues to exceed our expectations. As our loan ] pools grow our business will benefit from higher incremental margins due to fixed cost leverage. Other/unallocated[Includes the before tax mark to market unrealised loss of $2.4m in ] 2016 and unrealised gain of $1.4m in 2017 on our 5 year interest rate swap agreements.

FSA Group Ltd AGM presentation 2017

Group financials from continuing	Group financials from continuing	operations	operations
Financial Overview	FY2016	FY2017	% Change
Operating income	$62.1m	$70.6m	+14%
Profit before tax	$16.8m	$23.5m	+39%
Profit after tax attributable to members	$10.7m	$15.4m	+44%
EPS basic	8.52c	12.27c	+44%
Net cash inflow from operating activities	$9.9m	$11.1m	+13%
Dividend/share	7c	7c	-
Shareholder Equity	$76.8m	$83.3m	+8%

Group financials from continuing operations

Impacted by the before tax mark to market unrealised loss of $2.4m in PBT, PAT, EPS 2016 and unrealised gain of $1.4m in 2017 on our 5 year interest rate swap agreements.

FSA Group Ltd AGM presentation 2017

Group financials from continuing operations, excluding impact of swap agreement

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Normalised Financial Overview	FY2016	FY2017	% Change
Normalised profit before tax	$19.2m	$22.1m	+15%
Normalised profit after tax attributable to members	$12.3m	$14.4m	+17%
Normalised EPS basic	9.85c	11.48c	+17%
Excludes the before tax mark to market unrealised loss of $2.4m in 2016
PBT, PAT, EPS and unrealised gain of $1.4m in 2017 on		our 5 year interest rate swap
agreements.

FSA Group Ltd AGM presentation 2017

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

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		No of clients / loan pool size	Average client life inyears
Services	- Debt Agreements	20,194	4.5 to 5.5
	- PIA/Bankruptcy	1,404	3
	- Easy Debt Management	2,575	Expect > 5
Consumer Lending	- Home Loans	$306m	3 to 4
	- Personal Loans	$35m	4 to 5

FSA Group Ltd AGM presentation 2017

Strategy and Outlook

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Strategy - 5 year plan 2016 to 2020

Services	Maintain our leading position in a niche market
Consumer Lending	Aiming to grow our loan pools to around $500m 14% growth rate pa
Earnings	Expecting average long term earnings growth of around 10% pa
Capital Management	Dividends around 50% to 60% of earnings Balance of earnings to support growing loan pools Strategy is self funding
Headwinds	Historically low interest rates adversely affecting certain areas of our business

FSA Group Ltd AGM presentation 2017

Outlook

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• New client numbers for July to October 2017 vs pcp -

• Services up 16% for Debt Agreements and - down 19% for PIA/Bankruptcy

Consumer Lending

Home Loan pool $327m up 7% on June Personal Loan pool $39m up 11% on June Combined pool $366m up 7% Targeting combined over $385m by June 2018

Earnings and Dividend Guidance FY2018

PAT to members (excluding swaps) to be up 5% - 15% EPS in the range of 12.0c to 13.2c Dividend 7c per share

Future Tailwind

Consumer debt levels are at a record high, new enquiries are increasing and demand for our products and services is growing. This is currently occurring in a historically low interest rate environment. As interest rates normalise demand for our products and services will accelerate.

FSA Group Ltd AGM presentation 2017

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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FSA Group Ltd AGM presentation 2017

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.

FSA Group Ltd AGM presentation 2017