STEADFAST GROUP LIMITED — Investor Presentation 2013

Aug 29, 2013

Full Year 2013 Results – 30 August 2013

Presenters

Robert Kelly – Managing Director & CEO Stephen Humphrys – Chief Financial Officer

Important Notice

This presentation contains general information in summary form which is current as at 30 August 2013. It presents financial information on both a statutory basis (prepared in accordance with Australian accounting standards which comply with International Financial Reporting Standards (IFRS)) and non-IFRS basis. This presentation is not a recommendation or advice in relation to Steadfast Group Limited ("Steadfast") or any product or service offered by Steadfast's subsidiaries. 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. It should be read in conjunction with Steadfast's other periodic and continuous disclosure announcements filed with the Australian Securities Exchange, and in particular the Annual Report for the year ended 30 June 2013. These are also available at www.steadfast.com.au.

No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation. To the maximum extent permitted by law, Steadfast, its subsidiaries and their respective directors, officers, employees and agents disclaim all liability and responsibility for any direct or indirect loss or damage 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 is for general information only. 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 gives no undertaking to update this information over time (subject to legal or regulatory requirements). Any forward-looking statements, including projections, 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 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.

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. For example, "FY13" refers to the year ended 30 June 2013.

Agenda

• Who we are
• IPO Highlights
• Transformation of Steadfast
• Steadfast Network Growth
• Financial Highlights
• Financial information
• Growth Strategy & Outlook

Who we are

LARGEST general insurance broker network in Australia1

• and service group for independent brokers
• Network has grown from 43 to ~280 insurance broker businesses representing $4.0bn in GWP
• Equity interests in 62 broker businesses, 4 underwriting agencies and 2 ancillary businesses
• 50% interest in Macquarie Premium Funding

Founded in 1996 as a collective buying 430 offices across Australia and New Zealand

Note: 1: Measured by annual premiums placed and number of licensed brokers

Initial Public Offering (IPO)

• Successfully listed on the ASX on 2 August 2013 under code SDF at IPO price of $1.15 per share
• Raised $334 million to help fund IPO Acquisitions1, retire pre-IPO debt, cover IPO costs and increase balance sheet capacity for future acquisitions
• Completed 100% of the IPO Acquisitions on 7 August 2013
• Listed with no net debt and excess cash position
• Market capitalisation of Steadfast was $711 million based on a closing share price of $1.42 on 26 August 2013

Note: 1: Where used in this presentation, the terms "IPO Acquisitions" and Pre-IPO Acquisitions" have the meaning given in the IPO prospectus dated 11 July 2013

Transformation of Steadfast

Consolidator of insurance broking and complementary businesses in addition to being a broker cluster group

	Steadfast Network	Steadfast EquityBrokers	Steadfast UnderwritingAgencies	PremiumFunding	AncillaryBusinesses
ssensiuBgnstixiE	~280SteadfastNetwork BrokersServices provided to thenetwork includeeducation and training,technical advice, brandand marketing support,information systems andother ongoing supportservicesSteadfastreceivesMarketing &Administration Fees fromStrategic Partners	4insurance brokingbusinesses (acquiredbetween November2012 and April 2013)3broker businessesin Australia (100%)Rothbury Group(17.9% equityinterest), the fourthlargest insurancebroker in New Zealand	Miramar (50%)Sports UnderwritingAustralia (80%acquired in FY13)	50% interest inMacquarie PremiumFundingMacquarie PremiumFunding acquiredPacificPremiumFunding in March2013	None
snositiuiqAcOPI	None	58insurance brokingbusinesses in Australia(equity interestsbetween 25% and100%)Rothbury Group(equity interestincreased to 30.1%)	2underwritingagencies (39.5%and100%)Miramar (shareholdingincreased to 100%)	None	2supportservicesbusinessesWhite Outsourcing(87.5%)Meridian Lawyers(25%)

Steadfast Network growth

Over the past year, Steadfast Network GWP grew 10% exceeding the 6% annual growth rate of Australian commercial gross earned premiums.

Notes: 1: Source: APRA. Commercial lines assumed to be commercial motor vehicles, fire and industrial special risks, marine and aviation, employers' liability, professional indemnity and public and product liability. 2: Premiums calculated for the 12 months to June each year. Premium figures for 2006-2010 based on gross written premiums (gross earned premiums for that period not published by APRA) and based on direct insurers only. Premium figures from 2010 based on gross earned premiums and comprise total industry (direct and reinsurance). 3: Represents forecast for 12 months to June 2013 based on annualised 6 months to December 2012 data.

Financial highlights

• FY13 pro-forma results slightly ahead of forecasts in IPO prospectus on both an IFRS and an Aggregate basis
• Pro-forma NPAT (IFRS view) of $28.1 million was 3.1% above IPO prospectus forecast of $27.2 million
• Marketing & Administration (M&A) Fees increased to $24.5 million, a 13% increase compared to FY12
• Statutory loss before tax was $13.4 million, better than the $15.7 million forecast in the IPO prospectus due to additional revenue from acquisitions, cost savings and M&A Fees being higher than expected

Financial information

Pro Click to Edit Title -forma results (Aggregate view)

FY13 pro-forma results (Aggregate view) slightly ahead of IPO forecasts

Profit& Loss ($ millions)	FY13	FY12	% growth	FY13F	%variance
Revenue
Consolidated brokers	94.2	92.0	2.4%	94.8	-0.7%
Equity accounted	143.6	135.6	5.8%	142.7	0.6%
Revenuefrom brokers	237.8	227.6	4.4%	237.5	0.1%
Underwriting agencies	19.7	18.6	6.0%	19.6	0.5%
Ancillary	21.4	18.1	18.4%	20.1	6.4%
Premium funding	37.9	26.9	40.5%	36.7	3.1%
Steadfast	29.1	24.3	19.6%	27.6	5.5%
Total Revenue	345.9	315.5	9.6%	341.5	1.2%
TotalEBITA (pre-CO)	92.1	81.6	12.9%	90.9	1.4%
EBITA Margins (pre-CO)
Consolidated brokers	31%	32%	-1%	31%	0%
Equity accounted	27%	26%	1%	28%	0%
Underwriting agencies	26%	25%	2%	31%	-4%
Ancillary	17%	15%	2%	15%	2%
Premium funding	23%	29%	-6%	21%	2%
Steadfast	22%	6%	16%	19%	3%
TotalEBITA margin (pre-CO)	27%	26%	1%	27%	0%

• ‒ A number of consolidated brokers have a higher EBITA margin compared to equity accounted brokers, reflecting leverage achieved from size and scale of operations
• ‒ Underwriting agencies margin includes non-recurring claims expense of $600k
• ‒ Premium funding margin better than forecast due to better trading results from Pacific Premium acquisition
• ‒ Steadfast includes rebates from Steadfast Network Brokers (50% FY12, 28% FY13) and M&A Fees which exceeded forecasts

Note: EBITA margins are pre Corporate Office expenses.

Pro Click to Edit Title -forma results (IFRS view)

FY13 pro-forma results (IFRS view) slightly ahead of IPO forecasts

Profit & loss ($ millions)	FY13	FY12	% growth	FY13F	%variance
Fees and commissions	94.6	90.4	4.7%	93.8	0.9%
M&A Fees	24.5	21.7	13.3%	23.9	2.7%
Interest income	2.9	3.9	-25.2%	3.3	-12.1%
Other revenue	22.7	20.5	11.1%	22.6	0.6%
Revenue –Consolidated entities	144.9	136.5	6.2%	143.6	0.8%
Employment expenses	57.4	54.9	4.7%	56.1	2.5%
Occupancy expenses	6.2	6.0	2.3%	6.5	-5.4%
Other expenses	41.1	40.5	1.2%	41.1	-0.1%
Expenses –Consolidated entities	104.7	101.4	3.2%	103.7	1.0%
EBITA –Consolidated entities	40.2	35.1	14.9%	39.9	0.4%
Share of EBITA from associates and jointventure	20.9	19.2	8.5%	20.2	3.4%
EBITA –Pre Corporate Office	61.1	54.3	12.6%	60.1	1.5%
Corporate Office income	-	5.9	n/a	-	n/a
Corporate Office expenses	3.7	1.7	n/a	3.7	n/a
EBITA –PostCorporate Office	57.4	58.5	-1.8%	56.4	1.9%
Net profit after tax	30.6			29.9	2.0%
Non-controlling interests in net profit after tax	2.5			2.7	-8.9%
Net profit attributable to owners ofSteadfast Group Limited	28.1			27.2	3.1%
NPAT -EPS	5.6cps			5.4cps	3.1%
Amortisation expense	7.1			7.1	-
Net Profit after Tax and beforeAmortisation	35.2			34.3	2.5%

vs pro-forma forecasts

• ‒ Revenue up 0.8% due to stronger than forecast growth in Fees and commissions and M&A Fees
• ‒ EBITA post Corporate Office up 1.9% due to better than forecast revenues and lower than forecast costs

vs FY12 results

• ‒ Revenues increased by 6.2% due to 4.7% increase in fees and commissions and 13.3% growth in M&A Fees
• ‒ EBITA pre Corp Office increased 12.6% yoy due to leverage from higher revenues and lower costs

Pro Click to Edit Title -forma balance sheet

Final IPO Price of $1.15per share	$ millions
Current assets	190.1
Equity accounted investments	140.8
Property, plant and equipment	17.7
Identifiable intangibles	71.7
Goodwill	248.1
Deferred tax assets & other	17.0
Total non-current assets	495.3
Total assets	685.4
Trade and other payables	107.5
Loan and borrowings	0.6
Other	16.6
Total current liabilities	124.7
Loans and borrowings	6.2
Deferred tax liabilities & other	33.3
Total non-current liabilities	39.5
Total liabilities	164.2
Net assets	521.2

• ‒ Conservative balance sheet (consolidated basis)
  • $25 million cash, zero debt at holding company
  • $6.8 million debt belongs to broker businesses
• ‒ Medium term gearing ratio1 of 15% allows for debt capacity of $85 million
• ‒ Equity accounted investments and goodwill adjusted to reflect Final IPO Price of $1.15 per share
• ‒ Goodwill and intangibles
  • Goodwill subject to annual impairment testing
  • Identifiable intangibles amortised over 10 years

1: Debt divided by total debt and equity.

Statutory results (IFRS view) Click to Edit Title

FY13 statutory loss (IFRS view) lower than IPO forecasts

Profit& Loss (IFRSview, $ millions)	FY13	FY12	% growth
Revenue
M&A Fees	24.5	21.7	13%
Other revenue	13.3	12.4	7%
Total Revenue	37.8	34.1	11%
EBITA excluding IPO related costs	12.3	9.7	27%
IPO and restructuring costs	(23.8)	-	n/a
Net profit/(loss) after tax	(13.4)	6.2	n/a
IPO and restructuring costs ($millions)	FY13	Non cash	Nonrecurring
IPO and due diligence costs	(13.3)	N	Y
Re-weighting costs	(10.5)	Y	Y
Total	(23.8)

Profit & Loss (IFRS view)

• ‒ Statutory M&A Fees same as pro-forma M&A Fees
• ‒ Net loss after tax lower than forecast due to additional revenue from acquisitions, cost savings and higher than expected M&A Fees

IPO and restructuring costs

• ‒ Further IPO costs forecast in FY14 majority will be deducted from share capital.
• ‒ Includes non cash and non recurring $10.5 million charge due to re-weighting shares for brokers

Growth strategy & outlook

Growth strategy

• Organic growth from our extensive distribution network which primarily caters to the commercial segment of the Australian and New Zealand general insurance market
• Delivering synergies from the acquisitions made to date and from the broader Steadfast Network (i.e. back office cost synergies)
• Growth from acquisitions, being the natural acquirer of brokers in the Steadfast Network
• Cross-selling of products and services within the Steadfast Network
• Building on our existing underwriting agencies with particular focus on specialist products and driving down costs

Back office cost synergies

Synergy costs incorporated into FY14 forecasts however related benefits are not

Back office strategy	"Hubbing" strategy example
−Steadfast is developing a common backoffice platformOperational best practicePilot in FY14 before rollout	Successful individual business−Owner nearing retirement−Broker AYounger principals and authorised−representatives+
Approximately $600,000 of project−expenditure provided for in FY14 forecasts	Large broker−Broker BSuccessful and efficient systems−
No synergy benefits in forecastsLeveraging White Outsourcing acquisition−to deliver platform	=Replicate best practice−Merge back office−Leverage and improve margins−Grow EBITABroker A + B−Retain and incentivise key employees by−enabling Broker A employees to purchaseequity in combined business

Continued growth by acquisitions

Steadfast is the natural acquirer of further interests in Steadfast Network Brokers

Acquisition growth criteria3

• Disciplined due diligence process that takes into account both quantitative and qualitative criteria
• Acquisitions expected to be EPS accretive to shareholders within the first 12 months assuming 85% equity funding
• Intend to principally fund via debt and available cash resources in the near term
  • May also use direct equity to further align vendors

Established balance sheet capacity to support acquisitions

• Debt capacity of $85m due to 15% gearing ratio (=debt/(debt + equity))
• $25m cash for general corporate purposes and potential future acquisitions

Cross-selling product and services

Outlook

• Well placed to grow organically due to network benefits and focus on small to medium enterprise (SME) market
• Foundations in place to be a consolidator and acquirer of broker businesses and builder of our underwriting agencies
• Conservative balance sheet with capacity to fund future acquisitions
• Reaffirming FY14 pro-forma forecasts in the IPO prospectus including IFRS revenue of $152.0 million and EBITA of $60.6 million (which excludes any future acquisitions and potential back office cost synergies)

Ordinary shares on issue post IPO Click to Edit Title

millions	No. ofordinary shares1
Ordinaryshares on issue on completionof the IPO	500.9
Made up of:2
Re-weighting Shares	65.6
Executive Shares	10.9
Consideration Shares	134.2
IPO Shares	290.2

• ‒ 37% owned by Steadfast brokers and associates, employees, Directors and officers
• ‒ 63% free float

Notes: 1: IPO shares were issued at the Final Price of $1.15 per share. Re-weighting Shares, Executive Shares and Consideration Shares were issued at $1.00 per share. 2: The description of shares that make up total ordinary shares have the meaning of those terms given in the IPO prospectus.