STEADFAST GROUP LIMITED — Interim / Quarterly Report 2019

Feb 19, 2019

20February2019

SteadfastGroup 1H19 results Analyst pack

Presenters:

Robert Kelly - Managing Director & CEO Stephen Humphrys - Chief FinancialOfficer

1H19 results - analyst pack

Contents

▪	1H19 highlights	3
▪	1H19 financial summary	8
▪	FY19 guidance	15
▪	Appendices	17

1H19 highlights

Steadfast Group

Underlying earnings driven by organic and acquisition growth

Underlying earnings1

• EBITA2 +21.3% to $86.5m
• NPAT +17.6% to $38.2m
• NPATA3 +16.9% to $50.3m
• EPS (NPAT) +12.0% to 4.83 cps
• Interim dividend +14.3% to 3.2 cps

Statutory earnings

▪ NPAT +19.8% to $40.5m

Underlying EBITA2 ($m)

1 For statutory reconciliation, refer to slides 45 and 46.

**2**Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment.

3 Calculated on a consistent basis since IPO. © 2019 Steadfast Group Limited │ 4

Organic growth

• Underlying EBITA2 organic growth $9.5m, +13.3%
• Driven by equity brokers and a particularly strong performance by the underwriting agencies

Acquisition growth

• Underlying EBITA acquisition growth $5.7m, +8.0%
• Driven by broker and agency acquisitions with strong ongoing contribution from recent acquisitions

Investment activity

• Net investment of $94m in 1H19
  • Including CBN and HMIA acquisitions

Future growth

▪ Unutilised debt facility of $99m available at 31 December 2018 (plus free cash flow)

Royal Commission

• Supportive of recommendations which improve client outcomes aligns with Steadfast's ethos, offering and processes
• Steadfast's market-leading policy wordings, triage and Steadfast Client Trading Platform support strong client outcomes with non-volume based remuneration and non-variable commission terms
• Industry has three years to work on issues of conflicted remuneration where they exist in general insurance

Steadfast Network and equity broker

GWP and underlying EBITA growth driven by price and volume

Financial highlights

• Steadfast Network GWP +12% to $2.9 billion
  • Driven by price and volume increases, growth from authorised representatives (AR) and new brokers joining the Network
  • 7% organic growth in half year compared to pcp (excludes statutory classes)
    • Price increases in business pack, ISR, professional risks, motor lines and liability
• Network GWP is 88% commercial lines, 12% retail

Gross written premium ($bn)

Operational highlights

• Growth in Steadfast Network brokers +11 to 388
  • 332 brokers in the Australian Network
  • 43 brokers in the New Zealand Network
  • 13 brokers in the Singapore Network
• Significant investment activity in Steadfast Network brokers in 1H19
  • 4 new equity holdings (2 bolt-ons), 4 increased equity holdings
• Steadfast Client Trading Platform 1H19 GWP of $190 million, +109% compared to pcp

Equity broker highlights (aggregate)

• Underlying net revenue of $205.2 million, +16%
  • Organic growth of +9% and acquisition growth of +7%
• Underlying EBITA of $57.4 million, +14%
  • Organic growth of +9% and acquisition growth of +5%
• 'Traditional' broker margin1 maintained at 29.4%

Steadfast Underwriting Agencies

Record GWP and underlying EBITA growth

Financial highlights

• Steadfast Underwriting Agencies GWP +24% to $558 million
  • Primarily driven by price and volume uplift, with some acquisition growth
  • Property and business lines particularly strong
• Price rises creating significant opportunities for agencies
• Underlying EBITA1 of $42.6 million, +48.8% on a like-for like basis

$58m $101m $378m $386m $449m $558m $88m $284m $367m $391m $465m 0 100 200 300 400 500 600 700 800 900 1,000 Pf FY14 FY15 FY16 FY17 FY18 1H19 $145m $385m $745m $777m $914m

Gross written premium ($m)

Operational highlights

• 26 agencies offering over 100 niche products
• Strong performance also due to long-term strategy of closely aligning capacity providers and technology to products in order to capitalise on hardening premium pricing
• Acquired HMIA, heavy motor vehicle specialist
• London 'super' binder (Miramar) on Steadfast Client Trading Platform (SCTP), live on 4 insurance classes
  • Maintain market share of growing GWP written on platform
• Return on investment in 'greenfield' agencies (including cyber) as products gain traction in the market

© 2019 Steadfast Group Limited │ 6 1 Excludes profit shares, RBUA agency closed in Feb 2018 and investments in 'greenfield' agencies.

Our insurTech

Steadfast Client Trading Platform and INSIGHT

Steadfast Client Trading Platform (SCTP)

• 6 business lines and 13 insurer and underwriting agency partners live on SCTP
• SCTP delivers strong client outcomes, addressing several issues raised by the Royal Commission
  • Genuine contestable marketplace, generating improved pricing competition, coverage and marketing each time a policy is amended or renewed
  • Market-leading policy wording, supported by learnings from Steadfast triage and Erato professional indemnity program
  • Fixed commission rates, all underwriters pay the same for each class with no volume based guarantees
• SCTP usage up 109% with over 300 brokers using the platform
  • Second half weighted due to seasonality and new insurers going live
    • Allianz delayed in joining business pack due to their testing failure, expect to pilot in three months
    • Delay by supporting insurers in launching auto-rater for liability

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

• 90 brokers live on INSIGHT, with over 1,000 users
  • Additional 1,500 users on BrokerPlus, eClipse and CBN platforms
• Additional 60 brokers committed to migrate onto INSIGHT, ongoing discussions with another 100 brokers

+109%

year-on-year growth in GWP transacted through SCTP

300+ brokers have used the SCTP

SCTP activity

• CGU live on business pack
• Chubb to join business pack in FY20, Allianz hopeful of going live in early FY20
• Auto-rating of liability in Q1 20, Berkley joining
• Zurich joins commercial motor in 2019

1H19 financial summary

Group financial performance

Strong underlying earnings growth

Six monthsto 31 December$ million	Underlying1H191	Underlying1H18	Year-on-yeargrowth %	Cash flow summary$million	1H19
Revenue2($m)	320.9	261.8	22.6%	Operatingcash flow	62.4
EBITA2($m)	86.5	71.3	21.3%	124% conversion of NPATA into cash
NPAT ($m)	38.2	32.5	17.6%
EPS (NPAT) (cents)	4.83	4.31	12.0%	1H19 underlying EBITA mix
NPATA3($m)	50.3	43.0	16.9%	7%
EPS (NPATA) (cents)	6.35	5.71	11.2%

Steadfast equity brokers Steadfast Underwriting Agencies Other businesses

• Growth across Steadfast Group driven by:
  • Premium price and volume uplift
  • Organic and acquisition growth from equity brokers
  • Particularly strong organic growth from Steadfast Underwriting Agencies
• Continued strong cash conversion with 124% of NPATA converted into cash

Drivers of 21.3% growth in underlying EBITA1

Organic and acquisition growth

Equity brokers financial performance

Organic and acquisition growth

Share of 1H19 underlying EBITA

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

Six monthsto 31 December$ million	Underlying1H19	Underlying1H18	Year-on-yeargrowth %	Organicgrowth %	Growth from acquisitions& hubbing1 %
Net fees & commissions2	181.7	154.9	17.3%	10.3%	7.0%
revenue2Net	205.2	177.4	15.7%	9.0%	6.7%
EBITA	57.4	50.2	14.4%	8.9%	5.5%
Netrevenue2 ('traditional' brokers only)	147.6	130.9	12.8%	6.3%	6.5%
EBITA ('traditional' brokers only)	43.3	38.3	13.1%	5.5%	7.6%

• EBITA of $57.4m (+14.4%) from all equity brokers
  • Driven by both organic and acquisition growth
  • Growth in net fees & commissions driven by hardening market and volume growth
  • Fee & commission split of ~30%/70% in-line with historic average
• EBITA from 'traditional' brokers of $43.3m (+13.1%) (excludes AR networks and wholesale, life insurance and trade credit brokers)
  • Margin3 maintained at 29.4%

EBITA growth: 1H18 – 1H19

Acquisition growth includes the net effect of acquisitions, divestments, and increased equity stakes. Net of third party payments. EBITA margin = EBITA / Net revenue. © 2019 Steadfast Group Limited │ 11

Steadfast Underwriting Agencies financial performance

Strong organic growth driven by price and volume

Share of 1H19 underlying EBITA

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

Six monthsto 31 December$ million	Underlying1H19	Underlying1H18	Year-on-yeargrowth %	Organicgrowth %	Growth from acquisitions& hubbing1 %
Net fees & commissions2	89.0	72.3	23.2%	17.2%	6.0%
Netrevenue2	92.0	74.5	23.5%	17.6%	5.9%
EBITA	42.9	33.1	29.4%	25.3%	4.1%
Net revenue2 (excl. profit shares, RBUA)	92.5	70.1	31.9%	19.3%	12.6%
EBITA (excl. profit shares, RBUA)	43.3	29.2	48.1%	30.3%	17.8%
Net revenue2 (excl. profit shares, RBUA,investment in 'greenfield' agencies)	88.0	67.3	30.8%	17.7%	13.1%
EBITA (excl. profit shares, RBUA, investment in'greenfield' agencies)	42.6	28.6	48.8%	30.5%	18.3%

• Net revenue growth driven by strong price and volume increases
  • Insurers continuing to increase premium prices providing opportunities for agencies
• Strong performance led to underlying EBITA growth of 48.8%
  • Excludes profit shares, RBUA agency closed in Feb 2018 and investments in 'greenfield' agencies

EBITA growth: 1H18 – 1H19

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

Statutory balance sheet

Strong balance sheet with capacity for future growth

$ million	31 Dec 18	30 Jun 181
Cash and cash equivalents	115	77
Cash held on trust	393	311
Trade & other receivables1	149	156
Totalcurrent assets	657	544
Goodwill	914	816
Identifiable intangibles	190	172
Equity accounted investments	111	139
Other (including PPE, deferred tax assets)	109	74
Total non-current assets	1,324	1,201
Total assets	1,981	1,745
Trade & other payables1	464	362
Deferred consideration	24	3
Other (including tax payable, provisions)	35	37
Total current liabilities	523	402
Borrowings	330	218
Deferred consideration	5	1
Deferred tax liabilities –customer relationships	48	45
Remainingdeferred tax liability & other	16	22
Total non-current liabilities	399	286
Total liabilities	922	688
Net assets	1,059	1,057
Non-controlling interests	77	59

Corporate debtfacilities,$ million	Maturity	Total	Available at31 Dec 2018
Facility A	Aug 2020	335	89
Facility B	Aug 2020	50	10
Total available		385	99

• Increased debt facilities by $100m to $385m in October 2018
• Significant headroom in financial debt covenants
• Unutilised debt facility of $99m available at 31 December 2018 for future growth
• Total Group gearing (corporate + subsidiary debt) within board approved maximum:

Gearing ratio	Actual	Max
Total Group2	24.1%	30.0%

• Balance sheet reflects change in global interpretation of accounting standards
  • Minimal P&L impact

1 Amounts have been restated to ensure comparability to global policies

2 Calculated as corporate plus subsidiary debt/(corporate plus subsidiary debt plus equity).

Interim FY19 dividend

Interim dividend up 14%

• Interim FY19 dividend of 3.2 cps (fully franked), up from 2.8 cps in 1H18 (+14.3%)
  • FY19 target dividend payout ratio of 65% to 85% of underlying NPAT
• Dividend Reinvestment Plan (DRP) to apply to interim FY19 dividend; no discount
  • DRP shares will be acquired on market
• Key dates for interim FY19 dividend:
  • Ex date: 25 February 2019
  • Dividend record date: 26 February 2019
  • DRP record date: 27 February 2019
  • Payment date: 21 March 2019

FY19 guidance

FY19 guidance FY19 guidance confirmed

• FY19 guidance range1 :
  • Underlying EBITA of $190 million $200 million
  • Underlying NPAT of $85 million $90 million
• Strong 1H19 earnings support our FY19 guidance (as upgraded in October 2018)
• Guidance also subject to:
  • Insurers continuing to drive moderate premium price increases
  • Increasing contribution from SCTP
  • Ongoing technology investment

Underlying EBITA ($m)2

1 Refer to the key risks on pages 37 – 39 of the Steadfast Group 2018 Annual Report. 2 FY13 and FY14 are pro-forma; FY15-FY19F are underlying. **3**Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment

1H19 results - analyst pack

Appendices

• Steadfast Group (slide 18)
• Steadfast Network (slide 24)
• Steadfast Underwriting Agencies (slide 31)
• Key initiatives (slide 33)
  • Our insurTech (slide 34)
  • International footprint (slide 41)
• 1H19 detailed financials (slide 43)

Steadfast Group

Our market

$18 billion of intermediated general insurance GWP written in FY18

Australian market – gross written premium1

Steadfast Group is focused on the intermediated general insurance market

84% 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
388general insurance brokers	26underwriting agencies	7businesses supporting the SteadfastNetwork and Steadfast UnderwritingAgencies including Steadfast Technologies(100% owned)
Steadfast Group has equity holdings in66brokers (all of which are members ofthe Steadfast Network)	Steadfast Group has equity holdings in all26underwriting agencies	Mixture of wholly owned, part-owned andjoint venture businesses

Steadfast Group

Size and scale

Steadfast Group Our track record since listing on the ASX

Underlying NPAT ($m)

Steadfast Underwriting Agencies GWP ($m) 1,000 FY14 FY15 FY16 FY17 FY18 1H19

Underlying EPS (NPAT) (cents per share)

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

1H 2H

DPS (cents per share)

Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment.

© 2019 Steadfast Group Limited │ 23

Largest general insurance broker Network in Australasia

Steadfast Network

The Steadfast Network has 388 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 $5.6 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 42 for more detail).

Exclusive to Steadfast Network brokers

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

Erato PI program Professional indemnity cover for Steadfast Network brokers.

input.

Policy wordings Market-leading wordings utilising broker & triage

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 strong relationships with insurers and other strategic partners
• Grow international presence
• Be the best solution for our clients' needs

Major insurer partners

$5.6bn

gross written premium in CY18

388 brokers in the Network

155 brokers have joined the Steadfast Network since IPO

Number of Steadfast Network brokers

• 11 brokers joined in 1H19
• 155 brokers have joined and only six brokers have left the Network since the IPO
• 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 (June 2018).

Worldwide broker offices (excluding unisonSteadfast)

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

Steadfast Network Australia – resilient SME customer base

© 2019 Steadfast Group Limited │ 28

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 insurer partners which are used as a revenue stream to provide products and services to the Steadfast Network
  • Steadfast Group has equity holdings in 66 (after hubbing) of the 388 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

	1H19	2H18	1H18	2H17	1H17	2H16	1H16
Acquisitions (including bolt-ons)	5	4	7	2	7	8	2
Increasedequity holdings	7	4	8	5	7	7	4
Hubbed	1	2	-	2	5	1	3

Equity brokers (including bolt-ons)

• Disciplined acquisition criteria based around cultural fit, strategic alignment and financial performance
• Strong pipeline of potential opportunities in and outside of the Steadfast Network
• CBN authorised representative network acquired September 2018

Steadfast Underwriting Agencies

• Acquired HMIA in 1H19
  • Specialised heavy vehicle agency

Steadfast Underwriting Agencies

Steadfast Underwriting Agencies

26 agencies, over niche 100 products

Hospitality, leisure and entertainment sector

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

© 2019 Steadfast Group Limited │ 32

Key initiatives

• Our insurTech (slide 34)
• International footprint (slide 41)

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:
  • 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 rates, 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

Market-leading policy wordings, non-volume based and non-variable commission terms

Our insurTech

Insurer and underwriting agency partners on the SCTP

Our insurTech 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

Steadfast Network GWP (1H19)

SCTP potential usage1

80%

Steadfast Network GWP which could potentially be transacted on SCTP in Australia

60%

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

Our insurTech

Five year target

Steadfast Client Trading Platform (SCTP)

• 6 business lines and 13 insurer and underwriting agency partners live on SCTP
  • Including Steadfast Direct (retail home, motor and landlords cover)
• Five 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

0 1 2 3 GWP transacted through SCTP ($bn)

Additional contribution to Steadfast Group from SCTP ($m)

FY19 FY20 FY21 FY22 FY23

Our insurTech

SCTP implementation and EBITA contribution

• 60% of the 80% of available GWP in Australian Network
• Net technology spend reaches steady-state level

Our insurTech Steadfast Client Trading Platform

Steadfast Client Trading Platform (SCTP)

Gross Written Premium ($m)

• 6 business lines live on the SCTP, with 13 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

Our insurTech 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

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

• 43 brokers in the Network
• NZ$221m of gross written premium in 1H19
• Steadfast Underwriting Agencies building market presence utilising Network distribution
• Strong buy-in from insurer partners

2. Asia

• Target Singapore initially
• 13 brokers have joined the Singapore Network
• Local CEO in place
• Two equity investments in Network 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 Lloyds products
  • Risks suited to Lloyds market
  • London super binder
• Granted licence to operate as a broker in the UK and a Lloyds broker internationally
  • Improve Lloyds access for all agencies and brokers, particularly the unisonSteadfast network

International footprint

unisonSteadfast

• 40% equity stake in unisonSteadfast
  • One of the world's largest global general insurance broker networks, offering multi-jurisdictional coverage
  • Supervisory board contains two Steadfast Group representatives
  • Medium to long-term strategy

Recent developments

• GWP aggregation
  • GWP data gathered from unisonSteadfast brokers
  • Discussions have taken place 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

Statutory profit and loss statement

Six months ended 31 December$ million	1H19	1H18
Revenue
M&A and other professional services fees	38.7	33.1
Revenuefrom controlled entities	215.5	176.5
Shareof profits of associates and joint ventures	7.5	6.5
Otherrevenue	1.3	0.8
Total revenue	263.0	216.9
EBITA before non-trading items and adjustments for investment in listed securities	86.5	71.3
Dividends and mark to market adjustments for investment in listed securities	(1.1)	1.5
Amortisation	(13.9)	(12.0)
Finance costs	(6.2)	(5.4)
Income tax expense	(19.4)	(17.2)
Profit after income tax and before non-trading items	45.9	38.2
Net gain on deferredconsideration estimates	-	3.6
Impairments	-	(2.3)
Net gainfrom change in value and sale of investment in subsidiaries & associates	2.7	0.4
Non-recurring costs from closure of residential builders agency	-	(0.4)
Share-based payment expense on share optionsand executive loans and shares	-	0.2
Other	(0.1)	-
Net profit after tax before non-controlling interests	48.5	39.8
Non-controlling interests	(8.0)	(6.0)
Net profit after tax attributable to Steadfast members (NPAT)	40.5	33.8
Other comprehensive income after tax	1.4	(1.0)
Total comprehensive income after tax	41.9	32.8

Statutory vs underlying reconciliation

Six months ended 31 December$ million	1H19	1H18
Underlying revenue1	320.9	261.8
Underlying NPAT	38.2	32.5
Underlying EPS (NPAT)	4.83	4.31
Reconciliationof earnings
Statutory NPAT	40.5	33.8
Change in value and sale of investments	(2.4)	(0.4)
Share based payment expense on share options on executive loans and shares	-	(0.2)
Deferred consideration adjustments	-	(3.5)
Impairments	-	2.3
Non-recurring costs from closure of residential builders agency	-	0.5
Other	0.1	-
UnderlyingNPAT	38.2	32.5
Amortisation	12.1	10.5
Underlying NPATA	50.3	43.0

1 Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment..

Statutory vs underlying reconciliation

NPAT and NPATA reconciliation ($m)

1 Calculated on consistent basis since IPO.

Underlying revenue and EBITA (aggregate view)

Six months ended 31 December$ million	Underlying1H19	Underlying1H18	Year-on-yeargrowth %
Gross writtenpremiums
Brokers1	841.8	681.8	23.5%
Underwriting agencies2	546.3	418.4	30.6%
Total GWP	1,388.2	1,100.2	26.2%

Revenue	Underlying1H19	Underlying1H18	Year-on-yeargrowth %	Organicgrowth %	Acquisitions &hubbing growth %
Brokers3	218.5	185.5	17.8%	9.6%	8.2%
Underwriting agencies4	174.3	137.3	27.0%	18.7%	8.3%
Other5	77.0	65.6	17.4%	17.4%	-
Total revenue	469.8	388.4	21.0%	14.1%	6.9%
EBITA
Brokers	57.4	50.2	14.4%	8.9%	5.5%
Underwriting agencies	42.9	33.1	29.4%	25.3%	4.1%
Other6	1.9	3.4	(42.2%)	(42.2%)	-
TotalEBITA	102.2	86.7	18.0%	13.2%	4.8%

1 Excludes large authorised representative networks.

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

**3**Includes gross up of wholesale broker commission expense ($8.1m in 1H18 and $13.3m in 1H19).

4 Includes gross up of agency commission expense ($62.8m in 1H18 and $82.3m in 1H19).

5 Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment.

6 Other underlying EBITA includes ancillary (-$1.4m in 1H19), premium funding ($5.3m in 1H19) and Steadfast Network / Corporate office (-$2.0m in 1H19).

Statement of income (underlying IFRS view)

Six months ended 31 December$ million	Underlying1H19	Underlying1H18	Year-on-yeargrowth %	Organicgrowth %2	Acquisitions &hubbing growth%3
Fees and commissions¹	278.1	225.8	23.2%	10.5%	12.7%
M&A and other fees	24.8	20.8	19.1%	19.1%	-
Interest income	4.1	3.6	12.0%	(18.4%)	30.4%
Other revenue4	13.9	11.5	20.5%	12.0%	8.5%
Revenue –Consolidated entities	320.9	261.8	22.6%	10.8%	11.8%
Employment expenses	(105.7)	(87.9)	20.2%	6.6%	13.6%
Occupancy expenses	(8.9)	(7.7)	15.1%	(0.6%)	15.7%
Other expenses including Corporate Office¹	(132.7)	(106.1)	25.0%	14.1%	10.9%
Expenses –Consolidated entities	(247.2)	(201.8)	22.5%	10.3%	12.2%
EBITA –Consolidated entities	73.6	60.0	22.8%	12.7%	10.1%
Share of EBITA from associates and joint ventures	12.9	11.4	12.9%	16.3%	(3.4%)
EBITA –excluding mark-to-market of investment in Johns Lyng Group	86.5	71.3	21.3%	13.3%	8.0%
Mark-to-market of investment in Johns Lyng Group	(1.1)	1.5		1 Wholesale broker and agency commission expense
EBITA	85.4	72.8	17.2%	(paid to brokers) included in revenues and otherexpenses so impact to EBITA is nil ($59.1m in 1H18;
Net financingexpense	(6.2)	(5.4)	14.6%	$73.3m in 1H19).2Includes bolt-on acquisitions.
Amortisationexpense –consolidated entities	(12.4)	(10.3)	19.8%	3 Acquisition growth includes the net effect ofacquisitions, divestments and increased equity stakes.
Amortisationexpense –associates	(1.5)	(1.6)	(5.8%)	Includes growth from associates converted toconsolidated entities.
Income tax expense	(19.4)	(17.2)	12.7%	4 Excludes impact from dividend income and mark-tomarket adjustments for Johns Lyng Group investment
Net profit after tax	45.9	38.2	20.0%	5 For controlled entities, the amortisation of customer list
Non-controlling interests	(7.6)	(5.7)	33.1%	add back is before 30% tax but after non-controllinginterests, to reflect Steadfast Group's proportional share.The balance sheet includes a deferred tax liability toreflect the future non-tax deductibility of amortisationexpense.
Net profit attributable to Steadfast members (NPAT)	38.2	32.5	17.6%
Amortisationexpense –consolidated entities5	10.5	8.9	18.0%	6 For associates, amortisation of customer list is not tax
Amortisationexpense –associates6	1.5	1.6	(5.3%)	effected (per Accounting Standards).7 Calculated on a consistent basis since IPO.
Net Profit after Tax and before Amortisation (NPATA7)	50.3	43.0	16.9%

Statement of income (underlying IFRS view)

Six months ended 31 December$ million	Underlying1H19	Underlying2H18	Underlying1H18	Underlying2H17	Underlying1H17
Fees and commissions¹	278.1	266.6	225.8	212.9	203.1
M&A and other fees	24.8	19.8	20.8	16.9	18.4
Interest income	4.1	3.4	3.6	3.3	3.7
Other revenue2	13.9	15.4	11.5	14.3	18.3
Revenue –Consolidated entities	320.9	305.3	261.8	247.4	243.4
Employment expenses	(105.7)	(96.8)	(87.9)	(79.9)	(83.7)
Occupancy expenses	(8.9)	(8.7)	(7.7)	(7.2)	(7.2)
Other expenses including Corporate Office¹	(132.7)	(120.2)	(106.1)	(95.5)	(97.9)
Expenses –Consolidated entities	(247.2)	(225.7)	(201.8)	(182.7)	(188.8)
EBITA –Consolidated entities	73.6	79.6	60.0	64.7	54.7
Share of EBITA from associates and joint ventures	12.9	13.2	11.4	11.9	12.1
EBITA	86.5	92.7	71.3	76.6	66.7
Mark-to-market of investment in Johns Lyng Group	(1.1)	-	1.5	-	-
EBITA	85.4	92.7	72.8	76.6	66.7
Net financingexpense	(6.2)	(5.2)	(5.4)	(4.8)	(4.9)
Amortisationexpense –consolidated entities	(12.4)	(11.7)	(10.3)	(9.5)	(10.8)
Amortisationexpense –associates	(1.5)	(1.6)	(1.6)	(1.7)	(1.7)
Income tax expense	(19.4)	(23.6)	(17.2)	(17.1)	(14.5)
Net profit after tax	45.9	50.7	38.2	43.5	34.9
Non-controlling interests	(7.6)	(8.2)	(5.7)	(7.1)	(4.9)
Net profit attributable to Steadfast members (NPAT)	38.2	42.5	32.5	36.4	30.0
Amortisationexpense –consolidated entities3	10.5	10.2	8.9	8.1	9.3
Amortisationexpense –associates3	1.5	1.6	1.6	1.7	1.7
Net Profit after Tax and before Amortisation (NPATA4)	50.3	54.3	43.0	46.2	41.0
Restated weighted average share #	792.0	772.0	753.9	748.7	749.0
Underlying EPS (NPAT) (centsper share)	4.83	5.40	4.31	4.86	4.01
UnderlyingEPS (NPATA) (cents per share)	6.35	6.89	5.71	6.18	5.47

1 Wholesale broker and agency commission expense (paid to brokers) included in revenues and other expenses so impact to EBITA is nil ($59.1m in 1H18; $73.3m in 1H19).

2Excludes impact from dividend income and mark-to-market adjustments for Johns Lyng Group investment.

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

4 Calculated on a consistent basis since IPO.

Statutory cash flow statement

$ million	1H19	1H18
Cash flows from operating activities
Net cash from operating activities before customer trust accounts movement	62.4	51.4
Net movement in customer trust accounts	13.2	8.8
Net cash from operating activities	75.6	60.2

Net cash used in investing activities	(23.0)	(104.2)
Cash used for dividends	(37.3)	(33.0)
Other	104.4	118.7
Net cash from financing activities	67.1	85.7

Net increase/(decrease) in cash and cash equivalents	119.6	41.7
Cash and cash equivalents at 31 December	507.6	370.7
splitinto: Cash held in trust	392.8	290.9
Cash on hand (net of overdraft)	114.8	79.8

$25.1m free cashflow in 1H19
$62.4m	Cash from operations
($37.3m)	Dividends paid
$25.1m	Free cash flow

124% 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	Year End	Year End	Year End	Year End	Year End
	Sept 2017	Sept 2018	Sept 2017	Sept 2018	Sept 2017	Sept 2018
Gross written premium ($m)	8,188	8,663	9,133	9,773	4,016	3,556
Number of risks ('000)	11,785	12,026	15,228	15,751	15,524	16,127
Average premium per risk ($)	695	720	600	620	259	221
Outwards reinsurance expense ($m)	2,552	2,648	1,768	1,915	995	800
Gross earned premium ($m)	8,466	8,816	8,827	9,540	4,191	3,698
Cession ratio	30%	30%	20%	20%	24%	22%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	3,701	3,447	6,822	Not provided	2,179	1,932
Gross earned premium ($m)	8,466	8,816	8,827	9,540	4,191	3,698
Gross loss ratio	60%	51%	77%	73%	52%	52%
Net incurred claims (current and prior years) ($m)	3,539	3,593	5,136	5,631	2,158	1,577
Net earned premium ($m)	5,914	6,168	7,059	7,625	3,196	2,899
Net loss ratio	63%	58%	78%	74%	48%	54%
Underwriting expenses ($m)	1,644	1,664	1,574	1,558	337	298
Net earned premium ($m)	5,914	6,168	7,059	7,625	3,196	2,899
U/W expense ratio	28%	27%	22%	20%	11%	10%
Net U/W combined ratio	91%	85%	100%	94%	59%	65%

Australian General Insurance Statistics1

Premiums and claims by class of business

	Commercial motor vehicleFire 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 2017	Sept 2018	Sept 2017	Sept 2018	Sept 2017	Sept 2018	Sept 2017	Sept 2018
Gross written premium ($m)	2,312	2,563	3,981	4,318	2,287	2,391	1,698	1,947
Number of risks ('000)	1,653	1,687	1,506	1,561	9,646	9,599	678	646
Average premium per risk ($)	1,398	1,519	2,643	2,767	237	249	2,505	3,015
Outwards reinsurance expense ($m)	321	416	1,720	1,930	576	607	512	554
Gross earned premium ($m)	2,230	2,453	4,161	4,371	2,279	2,322	1,619	1,785
Cession ratio	14%	17%	41%	44%	25%	26%	32%	31%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	1,707	1,775	3,606	2,795	1,220	1,333	1,157	1,903
Gross earned premium ($m)	2,230	2,453	4,161	4,371	2,279	2,322	1,619	1,785
Gross loss ratio	77%	72%	87%	64%	54%	57%	72%	107%
Net incurred claims (current and prior years) ($m)	1,424	1,470	1,750	1,550	439	870	666	829
Net earned premium ($m)	1,909	2,037	2,442	2,441	1,702	1,715	1,107	1,231
Net loss ratio	77%	72%	67%	63%	48%	51%	59%	67%
Underwriting expenses ($m)	496	519	1,002	986	528	522	216	233
Net earned premium ($m)	1,909	2,037	2,442	2,441	1,702	1,715	1,107	1,231
U/W expense ratio	26%	25%	41%	40%	31%	30%	20%	19%
Net U/W combined ratio	102%	98%	108%	104%	79%	81%	78%	86%

Important notice

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

This presentation contains information in summary form which is current as at 20 February 2019. 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 Group'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 forward-looking 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.