STEADFAST GROUP LIMITED — Annual Report 2018

Aug 23, 2018

24 August 2018

Steadfast Group Limited FY18 results Analyst pack

FY18 analyst pack

Contents

▪	Our track record –five years listed on the ASX	3
▪	FY18 highlights	4
▪	FY18 financial summary	9
▪	FY19 guidance	16
▪	Appendices	18

Steadfast Group Our track record - five years listed on the ASX

Underlying NPAT ($m)

Underlying EPS (NPAT) (cents per share)

Steadfast Network brokers Brokers on INSIGHT Steadfast Client Trading Platform GWP ($m)

Underlying EBITA ($m)

DPS (cents per share)

FY18 highlights

Steadfast Group highlights

Strong performance driven by organic and acquisition growth

Underlying earnings1

• EBITA +15.5% to $165.6m
• NPAT +12.9% to $75.0m
• NPATA2 +11.6% to $97.3m
• EPS (NPAT) +9.5% to 9.71cps
• Total dividend +7.1% to 7.5cps

Statutory earnings

▪ NPAT +13.6% to $75.9m

Underlying EBITA ($m)

Organic growth

• Underlying EBITA organic growth +9.6% to $13.8m
• Driven by strong equity broker and underwriting agency performance
• Strong underlying EBITA margins (aggregated):
  • 30.5% for equity brokers (FY17: 30.3%)
  • 44.9% for underwriting agencies (FY17: 42.5%)
• Profit growth is after continuing investment in technology division

Acquisition growth

• Underlying EBITA acquisition growth +5.9% to $8.5m
• Acquisition growth driven by broker and agency related acquisitions particularly contribution from Whitbread Insurance Brokers and Axis Underwriting Services

Investment activity

• Invested $136.1m in FY18, including $100m for Whitbread Insurance Brokers and Axis Underwriting Services acquisition
  • Accompanied by $115m capital raise in December 2017
• Stake in unisonSteadfast increased to 40% in January 2018

Future growth

▪ Unutilised debt facility of $109m available at 30 June 2018 (excluding free cash flow)

1 For statutory reconciliation, refer to slides 44 and 45. 2 Calculated on a consistent basis since IPO. © 2018 Steadfast Group Limited │ 5

Steadfast Network highlights

Solid GWP growth driven by price increases and new brokers joining the Network

Financial highlights

• Steadfast Network GWP +6% to $5.3 billion
  • Primarily driven by price and volume increases and growth in authorised representative (AR) network
  • 5% organic growth in full year compared to pcp (excludes statutory classes)
    • Price increases in business pack, ISR, professional risks and motor lines, with liability subdued
  • Customer retention rate 90%+

Gross Written Premium ($bn)

Operational highlights

• Growth in Steadfast Network brokers +16 to 377
  • 324 brokers in the Australian network
  • 41 brokers in the New Zealand network
  • 12 brokers in the Singapore Network
• Significant investment activity in Steadfast Network brokers in FY18
  • 11 new equity holdings
  • 12 increased equity holdings
• Steadfast Client Trading Platform GWP of $231 million, +136% compared to pcp

Steadfast Underwriting Agencies highlights

Strong growth in hardening market

Financial highlights

• Steadfast Underwriting Agencies GWP +18% to $914m
  • Premium pricing returning to technical levels
  • Driven by price, volume and acquisition growth
    • Property and business lines particularly strong

Gross Written Premium ($m)

Operational highlights

• 25 agencies offering over 100 niche products
• Acquired Axis Underwriting Services in December 2017, key driver of acquisition growth
• London 'super' binder (Miramar) on Steadfast Client Trading Platform (SCTP), live on 4 insurance classes
  • Offers first direct, automated link between Lloyd's of London and Australian market
  • Good early traction with growing share of transactions
• Strong performance despite ongoing investment in several 'greenfield' agencies
  • Blend accident and health
  • Emergence cyber

Key initiatives progress

Delivering on long term strategic initiatives

Technology

Steadfast Client Trading Platform (SCTP)

• 6 business lines and 14 insurer and underwriting agency partners live on SCTP
  • Including Steadfast Direct (retail home, motor and landlords cover)
• Upcoming activity:
  • CGU committed to join business pack shortly
  • Chubb joins business pack in early 2019
  • Berkley joins liability in Q3 19
  • Allianz joins business pack, commercial property, commercial motor in FY19
  • Zurich joins commercial motor in early 2019
• 5 year target: $2.3 billion of GWP and ~$23 million EBITA contribution per annum by FY23 (after amortisation of ~$6m per annum) to Steadfast Group
  • Based on 80% of Network GWP being available on SCTP and 60% usage by brokers in Australian Network
  • Driven by increased revenue from M&A fees and equity brokers
  • Continued but declining technology spend on SCTP, INSIGHT and UnderwriterCentral

INSIGHT (client relationship management and back office system for brokers)

• 75 brokers live on INSIGHT
• Additional 50 brokers currently contracted to migrate onto INSIGHT

Additional contribution to Steadfast Group from SCTP ($m)

Revenue

Gross spend on technology initiatives

FY18 financial summary

Group financial performance

Strong underlying earnings growth

12 monthsto 30 June$ million	UnderlyingFY18	UnderlyingFY17	Year-on-yeargrowth %	Cash flow summary$million	FY18
Revenue ($m)	582.5	504.1	15.5%	Operatingcash flow	96.1
EBITA ($m)	165.6	143.3	15.5%	Dividend	(55.2)
NPAT ($m)	75.0	66.4	12.9%	Free cash flow	40.9
EPS (NPAT) (cents)	9.71	8.87	9.5%	Net acquisition spend	136.1
NPATA1($m)	97.3	87.2	11.6%
EPS (NPATA) (cents)	12.60	11.65	8.2%	99% conversion of

Cash flow summary$million	FY18

NPATA into cash

• Result in line with guidance upgraded in December 2017
• Growth across Steadfast Group driven by:
  • GWP uplift
  • Strong organic growth from equity brokers and Steadfast Underwriting Agencies
  • Acquisitions, particularly Whitbread Insurance Brokers and Axis Underwriting Services
• Strong cash conversion with over 99% conversion of NPATA into cash
• Underlying financial data reconciled to statutory data on slides 44 and 45

Contributions to 15.5% growth in underlying EBITA

Organic and acquisition growth

• 10.8% gross organic growth, 0.6% growth from bolt-ons, offset by additional net technology spend (-1.8%), resulting in net organic growth of 9.6%
• 6.6% gross acquisition growth, 1.2% growth from hubbing, offset by divestments (-1.9%), resulting in net acquisition growth of 5.9%

Equity brokers financial performance

Organic and acquisition growth

Share of FY18 Underlying EBITA

Equity brokers – consolidated & equity accounted (assuming 100% ownership)

12 monthsto 30 June$ million	UnderlyingFY18	UnderlyingFY17	Year-on-yeargrowth %	Organicgrowth %	Growth from acquisitions& hubbing1 %
Net fees & commissions2	334.8	303.3	10.4%	5.6%	4.8%
Netrevenue2	380.0	347.1	9.5%	5.0%	4.5%
EBITA	116.1	105.1	10.4%	5.8%	4.6%
Netrevenue ('traditional' brokers only)2	281.3	257.8	9.1%	3.9%	5.2%
EBITA ('traditional' brokers only)	89.7	80.2	11.7%	6.0%	5.7%

• EBITA of $116.1m from all brokers
  • Driven by both organic and acquisition growth
  • Growth in net fees & commissions due to GWP increases
  • Acquisition of Whitbread Insurance Group in December 2017
  • EBITA from traditional brokers of $89.7m (excludes AR networks and wholesale, life insurance and trade credit brokers)

1 Acquisition growth includes the net effect of acquisitions, divestments, and increased equity stakes. 2 Net of third party payments.

3 EBITA Margin = EBITA / Net revenue.

© 2018 Steadfast Group Limited │ 12

EBITA margin3 : FY16 – FY18

Underwriting Agencies financial performance

Price and volume driven growth

Share of FY18 Underlying EBITA

Agencies – consolidated & equity accounted (assuming 100% ownership)

12 monthsto 30 June$ million	UnderlyingFY18	UnderlyingFY17	Year-on-yeargrowth %	Organicgrowth %	Growth from acquisitions& hubbing2 %
Net fees & commissions1	154.3	133.6	15.5%	13.8%	1.7%
Netrevenue1	159.1	139.0	14.4%	12.8%	1.6%
EBITA	74.6	62.1	20.2%	18.7%	1.5%
Revenue (excl. profit shares, RBUA)	153.5	129.9	18.1%	14.4%	3.7%
EBITA (excl. profit shares, RBUA)	69.0	55.2	24.8%	20.3%	4.5%
Revenue (excl. profit shares, RBUA, investment in'greenfield' agencies)	146.6	126.0	16.3%	12.5%	3.8%
EBITA (excl. profit shares, RBUA, investment in'greenfield' agencies)	68.0	55.1	23.3%	17.7%	5.6%

• Net revenue growth driven by price and volume increases
  • Insurers moving premium prices towards technical levels
• Strong performance led to underlying EBITA growth of 23.3%
  • Excludes profit shares, RBUA agency closed in Feb 2018 and investments in 'greenfield' agencies

EBITA growth FY17 – FY18

1 Net of third party payments.

2 Acquisition growth includes the net effect of acquisitions, divestments, and increased equity stakes. 3 EBITA margin = (EBITA / Net revenue) after removing profit shares and RBUA closure.

EBITA margin3 : FY16 – FY18

Statutory balance sheet

Strong balance sheet with capacity for future growth

$ million	30 Jun 18	30 Jun 17
Cash and cash equivalents	77	67
Cash held on trust	311	263
Trade & other receivables	493	395
Totalcurrent assets	881	725
Goodwill	816	717
Identifiable intangibles	172	155
Equity accounted investments	139	126
Property, plant and equipment	39	28
Deferred tax assets & other	35	49
Total non-current assets	1,201	1,075
Total assets	2,082	1,800
Trade and other payables	660	534
Subsidiaries' borrowings	1	2
Deferred consideration	3	5
Other (including tax payable, provisions)	75	78
Total current liabilities	739	619
Corporate borrowings	171	174
Subsidiaries' borrowings	47	31
Deferred consideration	1	1
Deferred tax liabilities –customer relationships	45	42
Remainingdeferred tax liability & other	22	20
Total non-current liabilities	286	268
Total liabilities	1,025	887
Net assets	1,057	913
Non-controlling interests	59	41

Corporate debtfacilities,$ million	Maturity	Total	Available at30Jun 2018
Facility A	Aug 2020	235	59
Facility B	Aug 2020	50	50
Total available		285	109

• Facility A extended in August 2017 one further year to 2020
• Substantial headroom in financial debt covenants
• Unutilised debt facility of $109m available at 30 June 2018 for future growth
• Gearing well within board-approved maximum:

Gearing ratio	Actual	Max
Corporate1	14.0%	25.0%
Total Group	17.5%	30.0%

▪ Increase in net assets includes capital raise of $115m

1 Calculated as corporate debt/(corporate debt plus equity).

© 2018 Steadfast Group Limited │ 14

Final FY18 dividend

Final dividend up 7%

▪	Final FY18 dividend of 4.7	cps (fully franked), +7%
▪	Total FY18 dividend of 7.5	cps (fully franked), +7%
	▪Total FY18 dividend payout ratio is 79% of	underlying NPAT, in line with target of 65% to 85%
▪	Dividend Reinvestment Plan (DRP) to apply to finalFY18 dividend; no discount▪DRP shares will be acquired on market
▪	Key dates for final FY18 dividend:		cents per share
	▪Ex date:	29 August 2018
	▪Dividend record date:	30 August 2018
	▪DRP record date:	31 August 2018
	▪Payment date:	20 September 2018

FY19 guidance

FY19 guidance

Continued growth while implementing technology initiatives

• FY19 guidance range1 :
  • Underlying EBITA of $185 million $195 million
  • Underlying NPAT of $82.5 million $87.5 million
• Guidance subject to:
  • Insurers continuing to drive moderate premium price increases
  • Increasing contribution from SCTP (see slide 8 for more detail)
  • Ongoing technology investment

Underlying EBITA ($m)2

Underlying NPAT ($m)2

1 Also refer to the key risks on pages 37 – 39 of the Steadfast Group 2018 Annual Report. 2 FY13 and FY14 are pro-forma; FY15-FY18 are underlying.

Appendices

• Steadfast Group (slide 19)
• Steadfast Network (slide 24)
• Steadfast Underwriting Agencies (slide 31)
• Key initiatives (slide 33)
• FY18 detailed financials (slide 42)

Steadfast Group

Addressable market

$17 billion of intermediated general insurance GWP written in 2017

Steadfast Group is focused on the general insurance market

85% of our customer base is small to medium size enterprises (SMEs) with less pricing volatility

Broker and underwriting agency model

Advice based offering primarily focused on SME market

Steadfast Group

Three business units focused on intermediated general insurance market

Steadfast Group (listed on ASX)
Steadfast Network	Steadfast Underwriting Agencies	Complementary Businesses
377general insurance brokers	25underwriting agencies	7businesses supporting the SteadfastNetwork and Steadfast UnderwritingAgencies including Steadfast Technologies(100% owned)
Steadfast Group has equity holdings in64brokers (all of which are members ofthe Steadfast Network)	Steadfast Group has equity holdings in all25underwriting agencies	Mixture of wholly owned, part-owned andjoint venture businesses

Steadfast Group today

Size and scale

Largest general insurance broker Network in Australasia

Steadfast Network

The Steadfast Network has 377 general insurance brokers in Australia, New Zealand and Singapore who receive superior market access, exclusive products and services backed by the size and scale of the Steadfast Group. Brokers in the Network have access to over 160 products and services which support their business and allow them to focus on their clients' insurance and risk management needs. Key benefits of being a Steadfast Network broker include improved policy wordings, broker services, exclusive access to Steadfast's technology and triage support for challenging claims.

Steadfast Network brokers receive all of these products and services at no cost to them.

Insurer partners have access to over $5.3 billion of gross written premium from the small-to-medium enterprise market through the Steadfast Network.

Steadfast Group also holds a 40% stake in unisonSteadfast which is separate from the Steadfast Network. unisonSteadfast broker numbers are disclosed separately to the Steadfast Network (see slide 41 for more detail).

Exclusive to Steadfast Network brokers

Access to over 160 services supporting their business & clients.

Helplines Legal, contractual liability, compliance, human resources & technical.

Steadfast triage Provides expert support across claims, ethics & placement.

Erato PI program Professional indemnity cover for Steadfast Network brokers.

Policy wordings Market-leading wordings utilising broker & triage input.

Market access Access to the leading insurance providers from Australia & around the world.

Strategy

• Operate a Network that is stronger together and the network of choice for brokers
• Build and develop relationships with insurers and other strategic partners
• Grow international presence

Steadfast Network

$5.3bn

gross written premium

377 brokers in the Network

Major insurer partners

143 brokers have joined the Steadfast Network since IPO

Number of Steadfast Network brokers

• 143 brokers have joined and only five brokers have left the Network since the IPO
  • Includes 12 brokers who have joined the Network in Singapore
• Over 160 products and services available to the Network
• Steadfast Client Trading Platform and INSIGHT initiatives generating heightened interest in Network value proposition worldwide

1 Hubbing refers to merging brokers together to create sales and back office cost efficiencies. 2 Steadfast Group and APRA Intermediated General Insurance Statistics (December 2017).

Worldwide broker offices (excluding unisonSteadfast)

Around 1,900 broker offices across Australia, New Zealand and Asia

Steadfast Network Australia – resilient SME customer base

Increasing Steadfast Group's share of growing Network GWP

• The Steadfast Network is a key driver of Steadfast Group
  • Steadfast Group earns marketing and administration (M&A) fees from our insurer partners which are used as a revenue stream to provide products and services to the Steadfast Network
  • Steadfast Group has equity holdings in 64 (after hubbing) of the 377 brokers in the Steadfast Network and receives an ongoing share of dividends from these brokers

• Growth of the Steadfast Network benefits Steadfast Group
  • M&A fees grow as the Steadfast Network grows
  • Steadfast Group continues to be a natural acquirer of Steadfast Network brokers

Investment activity Active investment management

	2H18	1H18	2H17	1H17	2H16	1H16
Acquisitions	4	7	2	7	8	2
Increasedequity holdings	4	8	5	7	7	4
Hubbed	2	-	2	5	1	3

Equity brokers (including bolt-ons)

• Disciplined acquisition criteria based around cultural fit, strategic alignment and financial performance
• Constant stream of potential opportunities in and outside of the Steadfast Network
• All brokers acquired in FY18 were Steadfast Network brokers; we remain open to external acquisitions

Steadfast Underwriting Agencies

• Acquired Axis Underwriting Services as part of Whitbread Insurance Group transaction in December 2017
  • Specialised commercial and residential strata agency

Steadfast Underwriting Agencies

Steadfast Underwriting Agencies

25 agencies, over niche 100 products

Steadfast aims to highlight each agency's specialised service by preserving its brand and unique offering which is important as approximately half of our agencies' business is placed with non-Steadfast Network brokers

Key initiatives

• Monetising our insurTech
• International footprint

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 competition and coverage
  • Market-leading policy wordings
  • Instant policy issue, maintenance and renewal all on a market contestable basis
  • Supported by Steadfast triage
• Benefits for brokers:
  • Automated market access to leading insurers at no access cost
  • Bespoke market-leading policies
  • Fixed commission, same for all insurers
  • In-depth data analytics
  • Stimulates advisory discussions with clients
• Benefits for insurers:
  • Automated access to Steadfast Network for all policies placed on the platform
  • Significantly reduced technology and distribution costs
  • Data analytics and market insights, live 24/7
  • Updated policy wordings, based on prior claims scenarios

Steadfast Direct

• Part of SCTP offering for Steadfast Network brokers
• Automated, contestable platform offering retail home, motor and landlords cover
• Cross-selling opportunity for brokers

Insurers (not clients) pay fixed commissions due to reduced distribution cost, improved efficiency and whole market access

Insurer and underwriting agency partners on the SCTP

Size of the opportunity

Potential Steadfast Network GWP that can be transacted on SCTP

• c.80% of Steadfast Network GWP can potentially be transacted through the platform
  • Business pack
  • Commercial motor
  • Commercial property & ISR
  • Liability
  • Professional risks
  • Strata (currently in beta testing)
  • Retail home, motor and landlords (via Steadfast Direct)
  • Rural and farm under consideration to join SCTP
• Some risks are too niche and specialised for the platform

Ramp up of SCTP usage

• Targeting $2.3 billion annual GWP to be transacted through the SCTP within the next 5 years1
  • 60% of the 80% of available GWP in Australia Network
• Strong few months for business pack following QBE joining the platform and Steadfast Convention in April 2018

Steadfast Network GWP (FY18)

SCTP potential usage1

80%

Steadfast Network GWP which could potentially be transacted on SCTP

60%

of the 80% of available GWP targeted to be transacted through SCTP in the next 5 years

SCTP implementation and return on investment

▪ Net technology spend reaches steady-state level

Steadfast Client Trading Platform (SCTP)

Strong momentum

Steadfast Client Trading Platform

Gross Written Premium ($m)

• 6 business lines live on the SCTP, with 14 insurer and underwriting agency partners
• Steadfast Direct is part of the SCTP offering:
  • Home, motor and landlord products available to Steadfast Network brokers through the Steadfast Client Trading Platform
  • Contestable marketplace for home products with AIG and IAL (part of IAG Group) as underwriters on the platform
  • Instalment payments available to clients

Steadfast Technologies

Powering the Steadfast Client Trading Platform

The Steadfast Virtual Underwriter is a digital marketplace which provides Steadfast Network brokers with access to a variety of insurance products based on a single agreed question set. The system is integrated with a group of leading insurers and provides an efficient way to rapidly receive a range of insurance quotes in a single view. It displays a comprehensive, side-by-side comparison showing the differences in each insurer's terms, products and services for each quote.

The Virtual Underwriter has been seamlessly integrated with insurer and broker back office management systems, including Steadfast's INSIGHT broker platform. This eliminates costly, time consuming and error prone data re-entry into multiple systems.

INSIGHT is a broking platform with a powerful search engine which gives brokers a single view of their customers and an instant view of their business at any time. It is cloud-based, accessible from anywhere and designed as an open platform to enable connectivity to other business applications if required.

There has been strong interest from Steadfast Network brokers wanting to utilise INSIGHT to help manage their business. Steadfast Group is making a significant investment to roll out the platform as it will deliver substantial efficiencies and cost savings for brokers who will be able to remove their dependency on legacy systems.

UnderwriterCentral is a cloud-based agency management system designed specifically for underwriting agencies. It is an effective, flexible and affordable software solution that allows underwriters to manage the full policy lifecycle, as well as implement underwriting rules, rating and claims management.

UnderwriterCentral is the first platform in the world to electronically interface with Lloyd's of London. This allows underwriting agencies to easily deliver data into the London market adding further efficiencies to the underwriting process.

UnderwriterCentral is available to Steadfast Underwriting Agencies and other underwriting agencies.

Key advantages:

• Rapidly generates and compares quotes from different insurer partners without re-keying data into multiple insurer systems
• Real-time, straight-through processing throughout the life of a policy
• Increased client insights from data analytics

Key advantages:

• Controls, analyses and reports all data
• Automated data recovery and back up
• Open to interface with other business systems, accounting or other software packages
• High degree of cyber security protection

Key advantages:

• Turnkey solution for underwriting agencies to manage clients, policies and claims
• Supports multiple, customised insurance products through its powerful configuration capability
• Built-in document management
• eCommerce portal capability

International footprint

Steadfast Network model replication

1. New Zealand

• 41 brokers in the Network
• NZ$366m of gross written premium in FY18
• Steadfast Underwriting Agencies building market presence utilising Network distribution
• Strong buy-in from insurer partners

2. Asia

• Target Singapore initially
• 12 brokers have joined the Singapore Network
• Local CEO appointed
• Two equity investments in brokers by Steadfast Group
• Five insurer partners have agreed to:
  • Pay M&A fees
  • Issue improved policy wordings
  • Pay increased commission

3. London

• Office expanded to meet demand for Lloyd's products
  • Risks suited to Lloyd's market
  • London super binder

unisonSteadfast

Medium term strategy

• 40% equity stake in unisonSteadfast
  • One of the world's largest general insurance broker networks, offering multi-jurisdictional coverage
  • Steadfast Group representatives have joined the Supervisory Board

Recent developments

• GWP aggregation
  • GWP data gathering from unisonSteadfast brokers
  • Discussions planned with global insurers on aggregation of global GWP
  • Leveraging Steadfast Group's relationships with global insurers
• Access to London market for unisonSteadfast brokers
  • Creation of first revenue stream for Steadfast Group
  • Leveraging London 'super' binder to improve access to key market
• Seeking to increase professional indemnity cover for unisonSteadfast brokers
  • Creation of first new product for unisonSteadfast brokers
  • Leveraging Steadfast's relationship with PI provider

unisonSteadfast global network

FY18 detailed financials

Statutory profit and loss statement

12 months ended 30 June$ million	FY18	FY17
Revenue
M&A and other professional services fees	70.6	69.9
Revenuefrom controlled entities	381.8	327.0
Shareof profits of associates and joint ventures	14.5	14.0
Otherrevenue	1.2	3.8
Total revenue	468.1	414.7
EBITA before non-trading items	165.6	143.3
Amortisation	(25.2)	(23.7)
Finance costs	(10.6)	(9.7)
Income tax expense	(40.9)	(31.6)
Profit after income tax and before non-trading items	88.9	78.3
Net gain on deferredconsideration estimates	3.3	3.4
Impairments	(2.3)	(7.1)
Net gainfrom change in value and sale of investment in subsidiaries & associates	0.2	3.0
Non-recurring costs from closure of residential builders agency	(0.4)	0.0
Share-based payment expense on share optionsand executive loans and shares	0.4	0.4
Other	0.3	0.2
Net profit after tax before non-controlling interests	90.4	78.2
Non-controlling interests	(14.5)	(11.4)
Net profit after tax attributable to Steadfast members (NPAT)	75.9	66.8
Other comprehensive income after tax	(0.2)	(0.2)
Total comprehensive income after tax	75.7	66.6

Statutory vs underlying reconciliation

12 months ended 30 June$ million	FY18	FY17
Revenue	582.5	504.1
Underlying NPAT	75.0	66.4
Underlying EPS (NPAT)	9.71	8.87
Reconciliationof earnings
Statutory NPAT	75.9	66.8
Change in value and sale of investments	(0.2)	(2.9)
Share based payment expense on share options on executive loans and shares	(0.4)	(0.4)
Deferred consideration adjustments	(3.1)	(4.2)
Impairments	2.3	7.1
Non-recurring costs from closure of residential builders agency	0.5	0.0
UnderlyingNPAT	75.0	66.4
Underlying NPAT growth	12.9%
Amortisation	22.3	20.8
Underlying NPATA	97.3	87.2
Underlying NPATA growth	11.6%

Statutory vs underlying reconciliation

NPAT and NPATA reconciliation ($m)

NPAT NPATA¹

1 Calculated on consistent basis since IPO.

© 2018 Steadfast Group Limited │ 45

Underlying revenue and EBITA (aggregate view)

12 monthsto 30 June$ million	UnderlyingFY18	UnderlyingFY17	Growth%
Gross writtenpremiums
Brokers	1,676.3	1,540.7	8.8%
Underwriting agencies1	884.1	776.6	13.9%
Total GWP	2,560.4	2,317.2	10.5%
Revenue	UnderlyingFY18	UnderlyingFY17	Growth%	Organic growth%6	Acquisitions &hubbing growth %7
Brokers2	400.0	358.6	11.5%	6.4%	5.1%
Underwriting agencies3	292.8	253.0	15.7%	13.3%	2.4%
Other4	136.0	122.7	10.9%	14.9%	(4.0%)
Total revenue	828.8	734.3	12.9%	10.2%	2.7%
EBITA
Brokers	116.1	105.1	10.4%	5.8%	4.6%
Underwriting agencies	74.6	62.1	20.2%	18.7%	1.5%
Other5	7.6	6.0	26.7%	20.2%	6.5%
TotalEBITA	198.3	173.2	14.5%	10.9%	3.6%

**1**Includes post-acquisition contribution from Steadfast Underwriting Agencies.

**2**Includes gross up of wholesale broker commission expense of $11.5m in FY17 and $20.0m in FY18. 3

Includes gross up of agency commission expense ($114.0m in FY17 and $133.6m in FY18).

4 Other underlying revenue includes ancillary ($29.7m in FY18), premium funding ($47.3m in FY18) and Steadfast Network / Corporate office ($59.0m in FY18).

5 Other underlying EBITA includes ancillary (-$0.7m in FY18), premium funding ($7.0m in FY18) and Steadfast Network / Corporate office ($1.4m in FY18). 6 Includes bolt-on acquisitions.

7 Acquisition growth includes the net effect of acquisitions, divestments, and increased equity stakes.

Statement of income (underlying IFRS view)

12 monthsto 30 June$ million	UnderlyingFY18	UnderlyingFY17	Growth%	Organic growth%2	Acquisitions &hubbing growth%3
Fees and commissions¹	492.4	416.0	18.4%	10.9%	7.5%
M&A and other fees	40.6	35.3	15.0%	15.0%	0.0%
Interest income	7.1	7.0	1.3%	(1.3%)	2.6%
Other revenue	28.5	32.5	(12.5%)	(4.5%)	(8.0%)
Revenue –Consolidated entities	568.5	490.8	15.8%	10.0%	5.8%
Employment expenses	(184.7)	(163.6)	12.9%	6.3%	6.6%
Occupancy expenses	(16.5)	(14.5)	13.9%	4.0%	9.9%
Other expenses including Corporate Office¹	(226.3)	(193.4)	17.0%	14.0%	3.0%
Expenses –Consolidated entities	(427.5)	(371.5)	15.1%	10.2%	4.9%
EBITA –Consolidated entities	141.0	119.3	18.1%	9.1%	9.0%
Share of EBITA from associates and joint ventures	24.6	24.0	2.3%	11.5%	(9.2%)
EBITA	165.6	143.3	15.5%	9.6%	5.9%
Net financingexpense	(10.6)	(9.7)	9.1%	1 Wholesale broker and agency commission expense
Amortisationexpense –consolidated entities	(22.0)	(20.3)	8.3%	(paid to brokers) included in revenues and otherexpenses so impact to EBITA is nil ($126.9m in FY18;
Amortisationexpense –associates	(3.2)	(3.4)	(4.4%)	$104.2m in FY17).2Includes bolt-on acquisitions.
Income tax expense	(40.9)	(31.6)	29.1%	3 Acquisition growth includes the net effect of
Net profit after tax	88.9	78.3	13.5%	acquisitions, divestments and increased equitystakes. Includes growth from associates converted toconsolidated entities.
Non-controlling interests	(14.0)	(11.9)	16.9%	4 For controlled entities, the amortisation of
Net profit attributable to Steadfast members (NPAT)	75.0	66.4	12.9%	customer list add back is before 30% tax but afternon-controlling interests, to reflect Steadfast Group'sproportional share. The balance sheet includes adeferred tax liability to reflect the future non-taxdeductibility of amortisation expense.
Amortisationexpense –consolidated entities4	19.1	17.4	9.7%
Amortisationexpense –associates5	3.2	3.4	(4.4%)	5 For associates, amortisation of customer list is nottax effected (per Accounting Standards).
Net Profit after Tax and before Amortisation (NPATA⁶)	97.3	87.2	11.6%	6 Calculated on a consistent basis since IPO.

Statement of income (underlying IFRS view)

12 monthsto 30 June$ million	Underlying2H18	Underlying1H18	Underlying2H17	Underlying1H17	Underlying2H16
Fees and commissions¹	266.6	225.8	212.9	203.1	195.4
M&A and other fees	19.8	20.8	16.9	18.4	15.8
Interest income	3.4	3.6	3.3	3.7	3.3
Other revenue	15.4	13.0	14.3	18.3	19.0
Revenue –Consolidated entities	305.3	263.3	247.4	243.4	233.4
Employment expenses	(96.8)	(87.9)	(79.9)	(83.7)	(75.6)
Occupancy expenses	(8.7)	(7.7)	(7.2)	(7.2)	(6.7)
Other expenses including Corporate Office¹	(120.2)	(106.1)	(95.5)	(97.9)	(92.6)
Expenses –Consolidated entities	(225.7)	(201.8)	(182.7)	(188.8)	(175.0)
EBITA –Consolidated entities	79.6	61.5	64.7	54.7	58.4
Share of EBITA from associates and joint ventures	13.2	11.4	11.9	12.1	10.8
EBITA	92.7	72.8	76.6	66.7	69.2
Net financingexpense	(5.2)	(5.4)	(4.8)	(4.9)	(4.6)
Amortisationexpense –consolidated entities	(11.7)	(10.3)	(9.5)	(10.8)	(9.9)
Amortisationexpense –associates	(1.6)	(1.6)	(1.7)	(1.7)	(1.6)
Income tax expense	(23.6)	(17.2)	(17.1)	(14.5)	(15.2)
Net profit after tax	50.7	38.2	43.5	34.9	38.0
Non-controlling interests	(8.2)	(5.7)	(7.1)	(4.9)	(4.2)
Net profit attributable to Steadfast members (NPAT)	42.5	32.5	36.4	30.0	33.8
consolidated entities2Amortisationexpense –	10.2	8.9	8.1	9.3	8.7
Amortisationexpense –associates3	1.6	1.6	1.7	1.7	1.6
Net Profit after Tax and before Amortisation (NPATA4)	54.3	43.0	46.2	41.0	44.1
Restated weighted average share #	772.0	753.9	748.7	749.0	746.7
Underlying EPS (NPAT) (centsper share)	5.40	4.31	4.86	4.01	4.51
UnderlyingEPS (NPATA) (cents per share)	6.89	5.71	6.18	5.47	5.90

1 Wholesale broker and agency commission expense (paid to brokers) included in revenues and other expenses so impact to EBITA is nil ($126.9m in FY18; $104.2m in FY17).

**2**For controlled entities, the amortisation of customer list add back is before 30% tax but after non-controlling interests, to reflect Steadfast Group's proportional share. The balance sheet includes a deferred tax liability to reflect the future non-tax deductibility of amortisation expense.

3 For associates, amortisation of customer list is not tax effected per Accounting Standards.

Statutory cash flow statement

$ million	FY18	FY17
Cash flows from operating activities
Net cash from operating activities before customer trust accounts movement	96.1	85.6
Net movement in customer trust accounts	27.1	22.4
Net cash from operating activities	123.2	108.0
Net cash used in investing activities	(135.1)	(19.5)
Cash used for dividends	(55.2)	(46.5)
Other	125.7	(4.5)
Net cash from financing activities	70.5	(51.0)

Net increase/(decrease) in cash and cash equivalents	58.6	37.5
Cash and cash equivalents at 31 December	387.6	329.2
splitinto: Cash held in trust	310.9	263.2
Cash on hand (net of overdraft)	76.7	66.0

$40.9m free cashflow in FY18
$96.1m	Cash from operations
($55.2m)	Dividends paid
$40.9mFree cash flow

99% conversion of NPATA to cash

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 Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun
	2017	2018	2017	2018	2017	2018
Gross written premium ($m)	8,140	8,552	9,012	9,625	4,192	3,575
Number of risks ('000)	11,766	11,846	15,242	15,671	16,138	15,810
Average premium per risk ($)	692	722	591	614	260	226
Outwards reinsurance expense ($m)	2,564	2,566	1,723	1,878	927	862
Gross earned premium ($m)	8,410	8,667	8,681	9,371	4,156	3,853
Cession ratio	30%	30%	20%	20%	22%	22%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	5,057	4,446	6,742	not provided	2,288	2,016
Gross earned premium ($m)	8,410	8,667	8,681	9,371	4,156	3,853
Gross loss ratio	60%	51%	78%	73%	55%	52%
Net incurred claims (current and prior years) ($m)	3,717	3,583	5,438	5,600	1,662	1,613
Net earned premium ($m)	5,846	6,101	6,958	7,493	3,229	2,991
Net loss ratio	64%	59%	78%	75%	51%	54%
Underwriting expenses ($m)	1,647	1,626	1,560	1,553	335	315
Net earned premium ($m)	5,846	6,101	6,958	7,493	3,229	2,991
U/W expense ratio	28%	27%	22%	21%	10%	11%
Net U/W combined ratio	92%	85%	101%	95%	62%	64%

Australian General Insurance Statistics1

Premiums and claims by class of business

	Commercial motor vehicle			Fire and ISRPublic and product liability			Professional indemnity
Premiums and Claims by Class of Business	Year End Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun	Year End Jun
	2017	2018	2017	2018	2017	2018	2017	2018
Gross written premium ($m)	2,278	2,511	3,971	4,169	2,294	2,365	1,697	1,874
Number of risks ('000)	1,668	1,609	1,566	1,541	9,637	9,590	638	631
Average premium per risk ($)	1,366	1,561	2,535	2,706	238	247	2,658	2,968
Outwards reinsurance expense ($m)	310	384	1,722	1,852	578	599	499	542
Gross earned premium ($m)	2,184	2,393	4,128	4,254	2,283	2,304	1,596	1,744
Cession ratio	14%	16%	42%	44%	25%	26%	31%	31%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	1,674	1,760	3,490	2,853	1,263	1,280	1,157	1,699
Gross earned premium ($m)	2,184	2,393	4,128	4,254	2,283	2,304	1,596	1,744
Gross loss ratio	77%	74%	85%	67%	55%	56%	72%	97%
Net incurred claims (current and prior years) ($m)	1,442	1,468	1,711	1,566	827	827	599	850
Net earned premium ($m)	1,874	2,009	2,406	2,401	1,705	1,705	1,097	1,201
Net loss ratio	77%	73%	71%	65%	49%	48%	55%	71%
Underwriting expenses ($m)	481	516	1,014	967	535	531	232	236
Net earned premium ($m)	1,874	2,009	2,406	2,401	1,705	1,705	1,097	1,201
U/W expense ratio	26%	26%	42%	40%	31%	31%	21%	20%
Net U/W combined ratio	103%	99%	113%	105%	80%	80%	76%	90%

Important notice

This presentation has been prepared by Steadfast Group Limited ("Steadfast").

This presentation contains information in summary form which is current as at 24 August 2018. This presentation is not a recommendation or advice in relation to Steadfast or any product or service offered by Steadfast or its subsidiaries and associates. It is not intended to be relied upon as advice to investors or potential investors, and does not contain all information relevant or necessary for an investment decision or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act 2001 (Cth). It should be read in conjunction with Steadfast's other continuous and periodic disclosure announcements filed with the Australian Securities Exchange, ASX Limited, and in particular the Steadfast Group 2018 Annual Report. These disclosures are also available on Steadfast's website at investor.steadfast.com.au.

To the maximum extent permitted by law, Steadfast, its subsidiaries and associates and their respective directors, employees and agents disclaim all liability for any direct or indirect loss which may be suffered by any recipient through use of or reliance on anything contained in or omitted from this presentation. No recommendation is made as to how investors should make an investment decision. Investors must rely on their own examination of Steadfast, including the merits and risks involved. Investors should consult with their own professional advisors in connection with any acquisition of securities.

The information in this presentation remains subject to change without notice. Steadfast assumes no obligation to provide any recipient of this presentation with any access to any additional information or to notify any recipient or any other person of any other matter arising or coming to its notice after the date of this presentation.

To the extent that certain statements contained in this presentation may constitute "forward-looking statements" or statements about "future matters", the information reflects Steadfast's intent, belief or expectations at the date of this presentation. Steadfast may update this information over time. Any forward-looking statements, including projections or guidance on future revenues, earnings and estimates, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are outside Steadfast's control and may cause Steadfast's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forwardlooking statements. Any forward-looking statements, opinions and estimates in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Neither Steadfast, nor any other person, gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur. In addition, please note that past performance is no guarantee or indication of future performance. Possible factors that could cause results or performance to differ materially from those expressed in forward-looking statements include the key risks on pages 37-39 of Steadfast Group's 2018 Annual Report.

Certain non-IFRS financial information has been included within this presentation to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Steadfast uses these measures to assess the performance of the business and believes that the information is useful to investors. Non-IFRS information, including underlying P&L items, pro-forma P&L items, underlying earnings before interest expense, tax and amortisation of acquired intangibles (EBITA), underlying NPAT, underlying net profit after tax but before (pre tax) amortisation (NPATA1 ), underlying EPS (NPAT) (NPAT per share) and underlying EPS (NPATA) (NPATA per share), have not been subject to review by the auditors. FY13 and FY14 results are pro-forma and assume the Pre-IPO Acquisitions and the IPO Acquisitions were included for the full reporting period (all of the IPO Acquisitions completed on 7 August 2013). Prior period underlying EPS (NPAT) and underlying EPS (NPATA) have been adjusted to reflect the re-basing of EPS post the February/March 2015 1:3 rights issue. All references to Aggregate refer to the 100% aggregation of all investees' results regardless of Steadfast's ownership interest.

This presentation does not constitute an offer to issue or sell securities or other financial products in any jurisdiction. The distribution of this presentation outside Australia may be restricted by law. Any recipient of this presentation outside Australia must seek advice on and observe any such restrictions. This presentation may not be reproduced or published, in whole or in part, for any purpose without the prior written permission of Steadfast.

Local currencies have been used where possible. Prevailing current exchange rates have been used to convert local currency amounts into Australian dollars, where appropriate. All references starting with "FY" refer to the financial year ended 30 June. All references starting with "1H" refers to the financial half year ended 31 December. "2H" refers to the financial half year ended 30 June.