STEADFAST GROUP LIMITED — Investor Presentation 2018

Feb 20, 2018

21 February 2018

Steadfast Group Limited 1H18 results

Presenters: Robert Kelly -Managing Director & CEO

Stephen Humphrys - Chief Financial Officer

Important notice

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

This presentation contains information in summary form which is current as at 21 February 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 2017 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 2017 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.

1 Calculated on consistent basis since IPO

1H18 investor presentation

Contents

• Our track record 4
• 1H18 highlights 5
• 1H18 financial summary 10
• Outlook and guidance 17
• Appendices 21

Steadfast Group Our growth record

Brokers on INSIGHT

Steadfast Direct GWP ($m)

Steadfast Network GWP ($bn)

Underlying NPAT ($m) (run rate)

Underlying EPS (NPAT) (cents per share)

Steadfast Underwriting Agencies GWP ($m)

Underlying EBITA ($m) (run rate)

1H18 highlights

Steadfast Group highlights

Strong 1H18 performance driven by organic and acquisition growth

Underlying earnings1

• EBITA +9.1% to $72.8m
• NPAT +8.4% to $32.5m
• NPATA2 +5.0% to $43.0m
• EPS (NPAT) +7.7% to 4.31 cents per share
• Interim dividend +7.7% to 2.8 cents per share

Statutory NPAT of $33.8m, down 10.9% due to lower non-trading gains

Underlying EBITA ($m)

Organic growth

• Underlying EBITA organic growth of $3.5m, +5%
• Driven by record first half GWP across the Group
• Profit growth is after continuing investment in our technology division

Acquisition growth

• Underlying EBITA growth of $2.6m, +4%
• Driven by broker and agency related acquisitions (net of divestments), Johns Lyng investment and increases in equity stakes in existing businesses
  • Minor contribution from Whitbread Group acquisition

Investment activity

• $121m of net total investments made in 1H18
  • Whitbread Group acquisition primarily funded by $100m capital raise
  • Stake in unisonSteadfast increased to 40% in January 2018
• Acquired c.2% stake in Johns Lyng due to strategic alignment

Future growth

▪ Unutilised debt facility of $89m available at 31 December 2017

1 For statutory reconciliation refer to slides 49 and 50. 2 Calculated on a consistent basis since IPO.

© 2018 Steadfast Group Limited │ 6

Steadfast Network highlights

Record first half gross written premium of $2.6 billion

Financial highlights

• GWP +8% to $2.6 billion
  • Primarily driven by price increases and growth in authorised representative (AR) network
  • 4.4% price growth in first half compared to pcp (excludes statutory classes)
    • Price increases in business pack, ISR, professional risks and motor lines

Gross Written Premium ($bn)

Operational highlights

• Growth in Steadfast Network brokers +15 to 376 at 31 December 2017
  • 326 brokers in the Australian network
  • 41 brokers in the New Zealand network
  • 9 brokers in the Singapore Network
    • Further 3 new brokers joined in January 2018
• Significant investment activity in Steadfast Network brokers in 1H18
  • 7 new equity holdings
  • 6 increased equity holdings
• Steadfast Direct GWP +69% compared to pcp

Steadfast Underwriting Agencies highlights

Strong price, volume and acquisition growth

Financial highlights

• GWP +16% to $449m
  • Strong momentum in 1H18
  • Growth primarily 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 as part of Whitbread Group transaction
• London 'super' binder (Miramar) has four classes live on Steadfast Client Trading Platform (SCTP)
  • SCTP integration opens direct, automated link between Lloyd's of London and Australian market

Key initiatives progress

Delivering on long term strategic initiatives

Technology

Steadfast Client Trading Platform (SCTP)

• Connected insurer partners include: AIG, Allianz, Calibre, CGU, CHUBB, Miramar, Procover, Vero and Zurich
  • QBE to go live in April 2018
• Revenue commences in FY18 with further uplift in FY19

Back office system

▪ Migrating Network brokers onto INSIGHT, some migrating from eClipse

	eClipse		INSIGHT
	Brokers	Seats	Brokers	Seats
Current	13	739	56	466
By end of FY18	8	495	74	1,134

▪ An additional 41 brokers are contracted to migrate onto INSIGHT with over 200 prospects in negotiation

International footprint

• Steadfast model successfully replicated in New Zealand and Singapore
  • New Zealand GWP +12% to $NZ189m in 1H18
    • 41 brokers in Network
  • 9 brokers have joined the Network in Singapore, with a further 3 in January 2018
    • Steadfast Group equity investments in 3 Singapore brokers
• 40% equity stake in unisonSteadfast
  • One of the worlds largest general insurance broker networks offering multi-jurisdictional coverage
  • Steadfast Group CEO and COO have joined the Supervisory Board
  • Aggregation of global GWP underway and discussions commenced with global insurer partners

1H18 financial summary

Group financial performance

Strong underlying earnings growth

Six monthsto 31 December$ million	Underlying1H18	Underlying1H17	Year-on-yeargrowth %	Cash flow summary$million	1H18
Revenue ($m)	269.6	250.1	+7.8%	Operatingcash flow	51.4
EBITA ($m)	72.8	66.7	+9.1%	Dividend	(33.0)
EBITAmargin	27.0%	26.7%		Free cash flow	18.4
NPAT ($m)	32.5	30.0	+8.4%	Net acquisition spend	120.7
EPS (NPAT) (cents)	4.31	4.01	+7.7%
NPATA1($m)	43.0	41.0	+5.0%	100%+ conversion of
EPS (NPATA) (cents)	5.71	5.47	+4.3%	NPATA into cash

Cash flow summary
$	million1H18

100%+ conversion of NPATA into cash

• Result in line with guidance
• Growth across Steadfast Group driven by:
  • GWP uplift
  • Acquisitions
  • Strong organic growth from Steadfast Underwriting Agencies
• Strong cash conversion with over 100% conversion of NPATA
• Underlying financial data reconciled to statutory data on slides 49 and 50

Underlying NPAT ($m)

Contributions to 9.1% growth in underlying EBITA

Organic and acquisition growth

• 5.8% gross organic growth, 0.1% growth from bolt-ons, offset by additional net technology spend (-0.6%) resulting in net organic growth of 5.3%
• 5.4% gross acquisition growth, offset by divestments (including White Outsourcing) resulting in net acquisition growth of 3.8%

1 Comparison of existing business in 1H18 and 1H17

2 Non-capitalised additional direct expense (including amortisation) on technology initiatives including Steadfast Client Trading Platform, INSIGHT and UnderwriterCentral

© 2018 Steadfast Group Limited │ 12

Equity brokers financial performance

Price increases offset by one-off expenses

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

Sixmonthsto 31 December,$ million	Underlying 1H18	Underlying 1H17	Year-on-yeargrowth %	Organic growth %	Growth from acquisitions& hubbing1 %
Net fees & commissions2	154.9	146.3	5.8%	2.3%	3.6%
Netrevenue2	177.4	166.8	6.3%	3.1%	3.2%
EBITA	50.2	49.1	2.1%	-1.4%	3.5%
EBITA (excl. redundancy costs)	50.9	49.1	3.6%	0.1%	3.5%

• EBITA of $50.9m (excluding one-off redundancy costs) driven by acquisition growth
• Growth in net fees & commissions due to price increases across classes
  • Some revenue fell into January 2018 due to delayed invoicing over Christmas period
  • Some competitive fee pressure on higher value accounts
• Strong start to 2H18 expected to improve margin above FY17 levels

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.

Underwriting Agencies financial performance

Strong net earnings growth driven by price and volume increases

Six monthsto 31 December,$ million	Underlying 1H18	Underlying 1H17	Year-on-yeargrowth %	Organic growth %	Growth from acquisitions& hubbing2 %
Net fees & commissions1	72.3	65.3	10.7%	9.5%	1.2%
Netrevenue1	74.5	68.4	8.9%	7.8%	1.2%
EBITA	33.1	29.3	13.1%	12.2%	0.9%
EBITA (excl. profit shares, RBUA)	30.3	25.5	18.8%	17.8%	1.0%

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

• Net revenue growth driven by price and volume increases
• Strong performance led to EBITA growth of 18.8%
• 2.6% margin growth driven by strong revenue growth in rising price environment and cost containment

EBITA margin3 : 1H16 – 1H18

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.

Statutory balance sheet

Strong balance sheet with capacity for future growth

$ million	31 Dec 17	30 Jun17
Cash and cash equivalents	79.8	66.5
Cash held on trust	290.9	263.2
Trade & other receivables	369.9	395.2
Totalcurrent assets	740.6	724.9
Goodwill	806.3	717.4
Identifiable intangibles	173.4	155.0
Equity accounted investments	125.4	125.7
Property, plant and equipment	29.4	27.5
Deferred tax assets & other	55.2	49.5
Total non-current assets	1,189.7	1,075.1
Total assets	1,930.3	1,800.0
Trade and other payables	537.6	534.0
Subsidiaries' borrowings	1.2	1.5
Deferred consideration	1.4	5.2
Other (including tax payable, provisions)	76.4	78.3
Total current liabilities	616.6	619.0
Corporate borrowings	191.5	174.0
Subsidiaries' borrowings	41.8	31.2
Deferred consideration	1.4	1.4
Deferred tax liabilities –customer relationships	45.9	41.5
Remainingdeferred tax liability & other	17.5	19.8
Total non-current liabilities	298.1	267.9
Total liabilities	914.7	886.9
Net assets	1,015.6	913.1
Non-controlling interests	45.3	41.0

Corporate debtfacilities,$ million	Maturity	Total	Available at31Dec 2017
Facility A	Aug 2020	235	39
Facility B	Aug 2020	50	50
Total available		285	89

• Facility A extended in August 2017 one further year to 2020
• Substantial headroom in financial debt covenants
• Unutilised debt facility of $89m available at 31 December 2017 for future growth
• Gearing well within board-approved maximum:

Gearing ratio	Actual	Max
Corporate1	15.9%	25.0%
Total Group	18.8%	30.0%

▪ Leverage capability extends c.$50 million beyond current corporate debt facilities

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

© 2018 Steadfast Group Limited │ 15

Interim FY18 dividend

Interim dividend up 8%

• Interim FY18 dividend of 2.8 cps (fully franked), up from 2.6 cps, +8% compared to pcp
  • FY18 target dividend payout ratio of 65% to 85% of underlying NPAT
• Dividend Reinvestment Plan (DRP) to apply to interim FY18 dividend; no discount
  • DRP shares will be acquired on market
• Key dates for interim FY18 dividend:
  • Ex date: 26 February 2018
  • Dividend record date: 27 February 2018
  • DRP record date: 28 February 2018
  • Payment date: 22 March 2018

Outlook & guidance

Strategy and outlook

Organic and acquisition growth

Steadfast Group
▪Constantly seeking organic and acquisition growth▪Improving margins via back office streamlining▪Strong acquisition pipeline inside and outside the Network▪Continue to implement our technology solutions, includingSteadfast Business Solutions	▪Strong balance sheet capacity with $89m of unutilised debt capacityas at 31 December 2017 to fund future growth▪Additional leverage capacity of c.$50 million available beyondcurrent debt facilities▪Management team intact and efficient
Steadfast Network	Steadfast Underwriting Agencies
▪Broker product and service offering and technology solutions, tocontinue to attract new brokers and retain brokers in the Network	▪Constantly reviewing start-up and acquisition opportunities in newand existing markets
▪SCTP efficiency and client benefits attractive to the client▪Marketing initiatives taking effect▪Moderate pricing increases expected to continue into 2H18	▪Growth from international opportunities, particularly from Londonbinder which is now on the SCTP▪System automation smoothing processes▪Pricing increases expected to continue in 2H18, particularly in
Key initiatives	property lines
Technology	International
▪Four business lines expected to have all insurer partners live by end ofFY18, with QBE live in April	▪Steady growth of New Zealand and Singapore networks in theremainder of FY18
▪INSIGHT targeting over 70 brokers migrated onto platform by end of FY18▪Cost containment well demonstrated	▪Discussions to take place with global insurers regarding aggregatingunisonSteadfast premium (worldwide) to create new revenue steams

FY18 guidance Increased FY18 guidance reaffirmed

▪ FY18 guidance range increased to reflect the Whitbread Group acquisition in December 20171 :

	Underlying EBITA	Underlying NPAT
Guidance range2	$155m -	$70m -
(August 2017)	$165m	$75m
Increased guidance range	$160m -	$72.5m -
(December 2017)	$170m	$77.5m

$62.3m $90.4m $129.6m $143.3m 0 20 40 60 80 100 120 140 160 180 FY13 FY14 FY15 FY16 FY17 FY18F $160m-$170m

Underlying EBITA ($m)3

Underlying NPAT ($m)3

1 Also refer to the key risks on pages 37 – 39 of the Steadfast Group 2017 Annual Report. 2 Refer to slide 32 of the Steadfast Group FY17 investor presentation 3 FY13 and FY14 are pro-forma; FY15-FY18 are underlying.

Questions

Appendices

• Steadfast Group (slide 22)
• Steadfast Network (slide 28)
• Steadfast Underwriting Agencies (slide 33)
• Key initiatives (slide 35)
• 1H18 detailed operational highlights (slide 42)
• 1H18 detailed financials (slide 47)

Steadfast Group

Addressable market

$16 billion of intermediated general insurance GWP written in 2017

Steadfast Group is focused on the general insurance market

86% 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
376general insurance brokers	25underwriting agencies	7businesses supporting the SteadfastNetwork and Steadfast UnderwritingAgencies
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 Five year financial summary

Gross revenue ($m) $231m $250m $270m $93m $102m $196m $239m $254m 0 100 200 300 400 500 FY13 FY14 FY15 FY16 FY17 1H18 $169m $188m $309m $470m $504m

Underlying NPAT ($m)

Underlying EPS (cents per share)

Steadfast Group today

Size and scale

Largest general insurance broker Network in Australasia

Steadfast Network

The Steadfast Network has 376 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 $5.0 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 to the Steadfast Network. unisonSteadfast broker numbers and GWP are disclosed separately to the Steadfast Network (see slide 39 for more detail).

Exclusive to Steadfast Network brokers

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 Best in class wordings utilising broker & triage input.

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

$5.0bn+

gross written premium

376 brokers in the Network

US$17bn unisonSteadfast network GWP

Major insurer partners

Worldwide broker offices

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

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 as well as rebates to brokers
  • Steadfast Group has equity holdings in 64 (after hubbing) of the 376 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

Steadfast Network Australia – resilient SME customer base

2 Allocation based on policy size (retail <$1k, small $1k – $9.9k, medium $10k – $299k and corporate $300k+).

3 Metrics above consist of non-IFRS financial information used to measure the financial performance and condition of Steadfast.

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 50% of our agencies' business is placed with non-Steadfast Network brokers

Key initiatives

• Technology
• International footprint

Key initiative - technology

Technology implementation and return on investment

Key initiative – Steadfast Client Trading Platform

Launched in June 2016 – end to end platform for brokers, agencies and their clients

• Exclusive to Steadfast Network brokers, clients and participating insurers
• Insurer partners contracted to provide one or more insurance class on the SCTP: AIG, Allianz, Allied World, Berkley, Calibre, CGU, CHUBB, London super binder, Procover, QBE, Vero and Zurich
• Benefits for clients: market leading policy wording, instant policy issue, genuine contestable marketplace, market leading wordings underpinned by Steadfast triage
• Benefits for brokers: automated market access to leading policy providers, improved remuneration, complete data analytics
• Benefits for insurers: automated access to Steadfast Network for all policies placed on the platform, significantly reduced technology costs, improved data analytics
• Separate SCTP wordings for each class of insurance
• Insurers contracted on SCTP for:
  • Business pack June 2016
  • Professional lines September 2016
  • Liability December 2016
  • Property March 2017
  • Commercial motor April 2018

Revenue commences in FY18 with further uplift expected in FY19

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

Capital light expansion model

Replicate Steadfast Network

• Build revenue streams to fund development
  • M&A fees on products placed with strategic partners
• Replicate Steadfast Network model
  • Improved policy wordings
  • Broker services
  • Technology

unisonSteadfast global network

unisonSteadfast

• 40% stake in existing global broker network unisonBrokers which was renamed unisonSteadfast
• Minimal impact on short term revenue
• Steadfast's current operations in Australia, New Zealand, Asia and London (wholesale) not included

International footprint

Steadfast Network model replication

1. New Zealand

• 41 brokers in the Network
• NZ$330m of gross written premium in FY17
• Steadfast Underwriting Agencies building market presence utilising Network distribution
• Strong buy-in from insurer partners

2. Asia

• Target Singapore initially

• Nine brokers have joined the Singapore Network with a further three in January 2018

• Local CEO appointed

• Three 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

International footprint

unisonSteadfast

• In June 2017, Steadfast Group acquired a stake in unisonBrokers to create unisonSteadfast, a global growth opportunity
  • One of the world's largest general insurance broker networks1
  • Established in 2005, headquartered in Hamburg, Germany, with office in Chicago, USA
  • Brokers offer multi-jurisdictional coverage to clients by leveraging network's global presence
• First Supervisory Board meeting held in August with additional Directors:
  • Robert Kelly (Steadfast Managing Director & CEO)
  • Samantha Hollman (Steadfast COO)
  • Heinrich Eder (former Managing Director, Munich Re Australia)
• Medium and long term priorities for unisonSteadfast partnership:
  • New markets provide brokers with access to Steadfast Underwriting Agency products and London super binder
  • Market impact develop deeper partnerships with insurers across the globe
  • Services review jurisdictions to assess what services can be offered
  • Equity / succession pathway consider acquiring equity holdings in suitable brokers

• 200 brokers
• 130 countries
• $US17 billion of GWP written across the network

1H18 detailed operational highlights

• Premium pricing outlook
• Steadfast Network
• Investment activity
• Steadfast Direct

Premium pricing outlook

Market is hardening

137 brokers have joined the Steadfast Network since IPO

Number of Steadfast Network brokers

• 137 brokers have joined and only three brokers have left the Network since the IPO
  • Includes nine brokers who have joined the Network in Singapore with a further three joining in January 2018
• 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 2017).

Investment activity

Active investment management

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

Equity brokers (including bolt-ons)

• Strict 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 1H18 were Steadfast Network brokers; we remain open to external acquisitions

Steadfast Underwriting Agencies

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

Steadfast Direct

Strong momentum

Steadfast Direct Facility

1H 2H

• Home, motor and now 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 now available to clients will drive further sales in FY18

1H18 detailed financials

Statutory profit and loss statement

Six months ended 31 December$ million	1H18	1H17
Revenue
M&A and other fees	20.8	18.4
Revenuefrom controlled entities	188.8	182.1
Shareof profits of associates and joint ventures	6.5	6.9
Otherrevenue	0.8	0.9
Total revenue	216.9	208.3
EBITA before non-trading items	72.8	66.7
Amortisation	(12.0)	(12.4)
Finance costs	(5.4)	(4.9)
Income tax expense	(17.2)	(14.4)
Profit after income tax and before non-trading items	38.2	35.0
Net gain on deferredconsideration estimates	3.6	3.6
Impairments	(2.3)	(0.4)
Net gainfrom sale of investment in subsidiaries & associates	0.4	4.2
Non-recurring costs from closure of residential builders agency	(0.4)	-
Share-based payment expense on share optionsand executive loans and shares	0.2	0.2
Net profit after tax before non-controlling interests	39.8	42.6
Non-controlling interests	(6.0)	(4.7)
Net profit after tax attributable to Steadfast members (NPAT)	33.8	37.9
Other comprehensive income after tax	(1.0)	(0.1)
Total comprehensive income after tax	32.8	37.8

Statutory vs underlying reconciliation

Six months ended 31 December$ million	1H18	1H17
Revenue	269.6	250.1
Underlying NPAT	32.5	30.0
Underlying EPS (NPAT)	4.31	4.01
Reconciliationof earnings
Statutory NPAT	33.8	37.9
Change in value and sale of investments	(0.4)	(4.0)
Share based payment expense on share options on executive loans and shares	(0.2)	(0.2)
Deferred consideration estimates	(3.5)	(4.1)
Impairments and fair value adjustments	2.3	0.4
Non-recurring costs from closure of residential builders agency	0.5	0.0
UnderlyingNPAT	32.5	30.0
Underlying NPAT growth	8.4%
Amortisation	10.5	11.0
NPATA	43.0	41.0

Statutory vs underlying reconciliation

NPAT and NPATA reconciliation ($m)

1 Calculated on consistent basis since IPO

© 2018 Steadfast Group Limited │ 50

Underlying revenue and EBITA (aggregate view)

$ million	Underlying1H18	Underlying1H17	Growth%
Gross writtenpremiums
Brokers	787.1	721.3	9.1%
Underwriting agencies1	418.4	385.7	8.5%
Total GWP	1,205.6	1,107.0	8.9%
Revenue	Underlying1H18	Underlying1H17	Growth%	Organic growth%4	Acquisitions &hubbing growth %5
Brokers2	185.5	172.6	7.5%	4.1%	3.4%
Underwriting agencies3	137.3	125.6	9.3%	7.5%	1.8%
Ancillary	13.3	18.4	(27.6%)	7.3%	(35.0%)
Premium funding	25.1	23.9	4.8%	4.8%	0.0%
Steadfast network/ Corporate Office	28.7	22.5	27.4%	20.8%	6.7%
Total revenue	389.9	363.1	7.4%	6.5%	0.9%

Total revenue	389.9	363.1	7.4%	6.5%	0.9%
EBITA
Brokers	50.2	49.1	2.1%	(1.4%)	3.5%
Underwriting agencies	33.1	29.3	13.1%	12.2%	0.9%
Ancillary	(0.7)	1.0	(163.7%)	(57.1%)	(106.6%)
Premium funding	3.9	3.8	2.0%	2.0%	0.0%
Steadfast Network/ Corporate Office	1.7	(1.3)	226.1%	112.1%	114.0%
TotalEBITA	88.2	81.9	7.6%	4.7%	2.9%

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

Includes gross up of wholesale broker commission expense of $5.8m in 1H17 and $8.1m in 1H18. 3

Includes gross up of agency commission expense ($57.2m in 1H17 and $62.8m in 1H18) 4

Includes bolt-on acquisitions.

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

© 2018 Steadfast Group Limited │ 51

Statement of income (underlying IFRS view)

Six monthsto 31 December,$ million	Underlying1H18	Underlying1H17	Growth%	Organic growth%2	Acquisitions &hubbing growth%3
Fees and commissions¹	225.8	203.1	11.1%	7.3%	3.8%
M&A and other fees	20.8	18.4	13.3%	13.3%	0.0%
Interest income	3.6	3.7	(0.3%)	0.0%	(0.3%)
Other revenue	13.0	18.3	(28.6%)	(5.3%)	(23.3%)
Revenue –Consolidated entities	263.3	243.4	8.1%	6.7%	1.4%
Employment expenses	(87.9)	(83.7)	5.1%	5.0%	0.1%
Occupancy expenses	(7.7)	(7.2)	7.2%	3.9%	3.3%
Other expenses including Corporate Office¹	(106.1)	(97.9)	8.4%	8.1%	0.4%
Expenses –Consolidated entities	(201.8)	(188.8)	6.9%	6.6%	0.3%
EBITA –Consolidated entities	61.5	54.7	12.4%	7.2%	5.3%
Share of EBITA from associates and joint ventures	11.4	12.1	(5.7%)	(3.0%)	(2.7%)
EBITA	72.8	66.7	9.1%	5.3%	3.8%
Net financingexpense	(5.4)	(4.9)	9.8%	1 Wholesale broker and agency commission expense
Amortisationexpense –consolidated entities	(10.3)	(10.8)	(4.0%)	(paid to brokers) included in revenues and otherexpenses so impact to EBITA is nil ($59.1m in 1H
Amortisationexpense –associates	(1.6)	(1.7)	(2.7%)	FY18; $52.4m in 1H FY17)2Includes bolt-on acquisitions
Income tax expense	(17.2)	(14.5)	18.6%	3 Acquisition growth includes the net effect ofacquisitions, divestments and increased equity
Net profit after tax	38.2	34.9	9.7%	stakes. Includes growth from associates converted toconsolidated entities.
Non-controlling interests	(5.7)	(4.9)	18.1%	4 For controlled entities, the amortisation of
Net profit attributable to Steadfast members (NPAT)	32.5	30.0	8.4%	customer list add back is before 30% tax but afternon-controlling interests, to reflect Steadfast Group's
Amortisationexpense –consolidated entities4	8.9	9.3	(4.4%)	proportional share. The balance sheet includes adeferred tax liability to reflect the future non-taxdeductibility of amortisation expense.
Amortisationexpense –associates5	1.6	1.7	(3.2%)	5 For associates, amortisation of customer list is nottax effected (per Accounting Standards).
Net Profit after Tax and before Amortisation (NPATA⁶)	43.0	41.0	5.0%	6 Calculated on a consistent basis since IPO

Statement of income (underlying IFRS view)

Six monthsto 31 December,$ million	Underlying1H18	Underlying2H17	Underlying1H17	Underlying2H16	Underlying1H16
Fees and commissions¹	225.8	212.9	203.1	195.4	189.0
M&A and other fees	20.8	16.9	18.4	15.8	16.6
Interest income	3.6	3.3	3.7	3.3	3.4
Other revenue	13.0	14.3	18.3	19.0	17.0
Revenue –Consolidated entities	263.3	247.4	243.4	233.4	226.1
Employment expenses	(87.9)	(79.9)	(83.7)	(75.6)	(71.3)
Occupancy expenses	(7.7)	(7.2)	(7.2)	(6.7)	(6.3)
Other expenses including Corporate Office¹	(106.1)	(95.5)	(97.9)	(92.6)	(97.9)
Expenses –Consolidated entities	(201.8)	(182.7)	(188.8)	(175.0)	(175.5)
EBITA –Consolidated entities	61.5	64.7	54.7	58.4	50.5
Share of EBITA from associates and joint ventures	11.4	11.9	12.1	10.8	9.8
EBITA	72.8	76.6	66.7	69.2	60.4
Net financingexpense	(5.4)	(4.8)	(4.9)	(4.6)	(4.6)
Amortisationexpense –consolidated entities	(10.3)	(9.5)	(10.8)	(9.9)	(10.5)
Amortisationexpense –associates	(1.6)	(1.7)	(1.7)	(1.6)	(1.7)
Income tax expense	(17.2)	(17.1)	(14.5)	(15.2)	(13.6)
Net profit after tax	38.2	43.5	34.9	38.0	29.9
Non-controlling interests	(5.7)	(7.1)	(4.9)	(4.2)	(3.3)
Net profit attributable to Steadfast members (NPAT)	32.5	36.4	30.0	33.8	26.6
Amortisationexpense –consolidated entities2	8.9	8.1	9.3	8.7	9.6
Amortisationexpense –associates3	1.6	1.7	1.7	1.6	1.7
Net Profit after Tax and before Amortisation (NPATA4)	43.0	46.2	41.0	44.1	37.9
Restated weighted average share #	753.9	748.7	749.0	746.7	743.5
Underlying EPS (NPAT) (centsper share)	4.31	4.86	4.01	4.51	3.58
UnderlyingEPS (NPATA) (cents per share)	5.71	6.18	5.47	5.90	5.10

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 1H FY18; $52.4m in 1H 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.

Underlying profit and loss items

Other revenue

$million	1H18	1H17	Variance
Fee income for other professional services	7.5	13.0	(5.5)
Other income	5.5	5.3	0.2
Total other revenue	13.0	18.3	(5.3)

Other expenses

$million	1H18	1H17	Variance
Selling expenses	11.0	9.1	1.9
Commission expense1,2	59.1	52.4	6.7
Administrationexpenses	28.0	28.7	(0.7)
Depreciation of PP&E	1.8	1.6	0.2
Corporate Office expenses	6.2	6.1	0.1
Total other expenses	106.1	97.9	8.2

1 Commission paid by wholesale brokers and agencies to brokers. 2 Grossed up in "fees & commissions" and deducted in "other expenses" so nil impact to EBITA.

Statutory cash flow statement

$ million	1H18	1H17
Cash flows from operating activities
Net cash from operating activities before customer trust accounts movement	51.4	39.1
Net movement in customer trust accounts	8.8	4.2
Net cash from operating activities	60.2	43.3
Net cash used in investing activities	(104.2)	(14.5)
Cash used for dividends	(33.0)	(27.0)
Other	118.7	(2.6)
Net cash from financing activities	85.7	(29.6)

Net increase/(decrease) in cash and cash equivalents	41.7	(0.8)
Cash and cash equivalents at 31 December	370.7	291.0
splitinto: Cash held in trust	290.9	230.9
Cash on hand (net of overdraft)	79.8	60.1

$18.4m free cashflow in 1H18
$51.4m	Cash from operations
$(33.0)m	Dividends paid
$18.4m	Free cash flow

100%+ 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 Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep
	2016	2017	2016	2017	2016	2017
Gross written premium ($m)	7,881	8,188	8,625	9,133	4,090	4,016
Number of risks ('000)	11,651	11,838	15,183	15,232	14,624	15,525
Average premium per risk ($)	676	692	568	600	280	259
Outwards reinsurance expense ($m)	2,491	2,552	1,638	1,768	647	995
Gross earned premium ($m)	8,189	8,466	8,366	8,827	3,775	4,191
Cession ratio	30%	30%	20%	20%	17%	24%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	4,403	5,058	6,175	8,214	2,784	2,179
Gross earned premium ($m)	8,189	8,466	8,366	8,827	3,775	4,191
Gross loss ratio	54%	60%	74%	Not provided	74%	52%
Net incurred claims (current and prior years) ($m)	3,539	3,743	5,136	5,525	2,158	1,543
Net earned premium ($m)	5,698	5,914	6,728	7,059	3,128	3,196
Net loss ratio	62%	63%	76%	78%	69%	48%
Underwriting expenses ($m)	1,610	1,627	1,468	1,586	358	337
Net earned premium ($m)	5,698	5,914	6,728	7,059	3,128	3,196
U/W expense ratio	28%	28%	22%	22%	11%	11%
Net U/W combined ratio	90%	91%	98%	101%	80%	59%

Australian General Insurance Statistics1

Premiums and claims by class of business

	Commercial motor vehicle		Fire and ISR		Public and product liability		Professional indemnity
Premiums and Claims by Class of Business	Year End Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep	Year End Sep
	2016	2017	2016	2017	2016	2017	2016	2017
Gross written premium ($m)	2,148	2,312	3,742	3,981	2,243	2,287	1,562	1,698
Number of risks ('000)	1,570	1,669	1,541	1,532	9,542	9,710	531	694
Average premium per risk ($)	1,368	1,385	2,429	2,598	235	236	2,942	2,447
Outwards reinsurance expense ($m)	271	321	1,699	1,720	877	576	450	512
Gross earned premium ($m)	2,094	2,230	4,009	4,161	2,247	2,279	1,543	1,619
Cession ratio	13%	14%	42%	41%	39%	25%	29%	32%
Gross incurred claims (current and prior years) net
of non-reinsurance recoveries revenue ($m)	1,606	1,706	2,538	3,606	1,459	1,219	1,137	1,158
Gross earned premium ($m)	2,094	2,230	4,009	4,161	2,247	2,279	1,543	1,619
Gross loss ratio	77%	77%	63%	87%	65%	54%	74%	72%
Net incurred claims (current and prior years) ($m)	1,424	1,461	1,750	1,647	439	822	666	652
Net earned premium ($m)	1,822	1,909	2,311	2,442	1,370	1,702	1,094	1,107
Net loss ratio	78%	77%	76%	67%	32%	48%	61%	59%
Underwriting expenses ($m)	511	496	998	1,002	545	528	244	216
Net earned premium ($m)	1,822	1,909	2,311	2,442	1,370	1,702	1,094	1,107
U/W expense ratio	28%	26%	43%	41%	40%	31%	22%	20%
Net U/W combined ratio	106%	102%	119%	108%	72%	79%	83%	78%