FULL YEAR 2019 FINANCIAL HIGHLIGHTS 25 March 2020 Disclaimer This - - PowerPoint PPT Presentation

FULL YEAR 2019 FINANCIAL HIGHLIGHTS

25 March 2020

2

Disclaimer

This presentation (the “Presentation”) has been prepared by The Ardonagh Group Limited (“Ardonagh” or the “Group”) and is its sole responsibility. For the purposes hereof, the Presentation shall mean and include the slides that follow, any oral presentation by Ardonagh or any person on its behalf, any question-and-answer session that may follow the oral presentation, and any materials distributed at, or in connection with any of the above. The information contained in the Presentation has not been independently verified and some of the information is in summary form. No representation or warranty, express or implied, is or will be made by any person as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information or opinions expressed in the Presentation. No responsibility or liability other than that implied by law is or will be accepted by Ardonagh, its shareholders, subsidiaries or affiliates or by any of their respective officers, Directors, employees or agents for any loss howsoever arising, directly or indirectly, from any use of the Presentation or its contents or attendance at any presentation or the question-and-answer session in relation to or in connection with this document. Ardonagh cautions that the Presentation may contain forward looking statements in relation to certain of Ardonagh’s business, plans and current goals and expectations, including, but not limited to, its future financial condition, performance and results. These forward looking statements may be identified by the use of forward looking terminology, including the words “aims”, “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will”, “plans”, “predicts”, “assumes”, “shall”, “continue” or “should” or, in each case, their negative or other variations or comparable terminology or by discussions of strategies, plans, objectives, targets, goals, future events or intentions. Any projections or forward-looking information (including any underlying assumptions) contained herein are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the control of Ardonagh. By their very nature, all forward looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Ardonagh’s control, including but not limited to insurance pricing, interest and exchange rates, inflation, competition and market structure, acquisitions and disposals, and regulation, tax and other legislative changes in those jurisdictions in which Ardonagh and its subsidiaries and affiliates operate. In particular, the unprecedented and rapidly evolving nature of the global COVID-19 pandemic (including the short-term and long-term effects thereof) creates unprecedented and extraordinary uncertainties for most businesses including Ardonagh and its subsidiaries and

• affiliates. As a result, any projections or forward-looking information (including any underlying assumptions) contained herein are subject to significant uncertainties and contingencies and no assurance can be

given that any particular projections or forward-looking information (including any underlying assumptions) will be realised. Actual results may differ from any projections or forward-looking information and such differences may be material. This presentation contains unaudited financial statements following the FCA and FRC’s request for a moratorium on the publication of preliminary financial statements for at least two weeks as listed companies and the audit profession are facing unprecedented practical challenges during the Coronavirus crisis. The Group will reschedule the release of its audited financial statements when further guidance from the FCA and FRC has clarified the position. The information and opinions contained in the Presentation have not been audited or necessarily prepared in accordance with international financial reporting standards and are subject to change without

• notice. The unaudited financial results in this document and the Presentation include certain financial measures and ratios, including EBITDA, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Organic growth and

certain other related measures that are not presented in accordance with IFRS and are also unaudited. These measures may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures, but should not be considered a substitute for results that are presented in accordance with IFRS. The information contained in the Presentation, including but not limited to any forward-looking statements, is provided as of the date hereof and is not intended to give any assurance as to future results. No person is under the obligation to update, complete, revise or keep current the information contained in the Presentation, whether as a result of new information, future events or results or otherwise. The information contained in the Presentation may be subject to change without notice and should not be relied on for any purpose. The Presentation is solely for informational purposes and does not constitute or form part of, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person to purchase, underwrite, subscribe to or otherwise acquire securities in Ardonagh or any of its subsidiaries nor does it constitute an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (“FSMA”). The Presentation does not constitute an invitation to effect any transaction with Ardonagh or to make use of any services provided by Ardonagh. The distribution of the Presentation in certain jurisdictions may be restricted by law. Recipients of the Presentation should inform themselves about and observe such restrictions. Ardonagh disclaims any liability for the distribution of the Presentation by any of its recipients. This document is for distribution only in the United Kingdom and the Presentation is being made only in the United Kingdom to persons falling within Articles 19, 43, 47 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended), to persons who have professional experience in matters relating to investments or to persons in the United Kingdom to whom this document may otherwise be lawfully distributed. This document is being supplied and the Presentation made to you solely in that capacity for your information. This document may not be reproduced, redistributed or passed on to any other person, nor may it be published in whole or in part, for any purpose. By accepting the Presentation, you agree and acknowledge (i) that the Presentation and its contents may contain proprietary information belonging to Ardonagh and (ii) to be bound by the foregoing limitations, undertakings and restrictions. Note: Adj. EBITDA includes benefit from IFRS 16 implementation in 2019 throughout this document unless otherwise stated

Business Overview

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1) Pro forma for all material acquisitions and disposals. EBITDA includes annualisation of cost savings from completed actions and actions expected to be completed during next 12 months

£182m

Available Liquidity

>4m

Policies Under Management

+288%

EBITDA Growth

27%

Total Income Growth

33%

PF Adj. EBITDA Margin

(1)

“Best of the Best Broker”

As voted by 3,000 leading insurance professionals at the British Insurance Awards in July 2019

Highly Diversified:

No material exposure to any single market, carrier, customer or producer

90%

Operating Cash Conversion

>£3bn

Gross Written Premium

3%

Organic Income Growth

2019 At a Glance Business Overview

Ardonagh at a Glance - A highly diversified, leading insurance distribution platform, connecting clients and premium to global capital

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1. Convergence of Pro Forma Adj. EBITDA and EBITDA – To improve the overall quality of earnings, with convergence leading to enhanced margins

• +660bps Adj. EBITDA margin growth vs. prior year
• +288% increase in EBITDA vs. prior year to £115m
• 35% reduction in total “add backs” whilst integrating and closing branches at Swinton

2. Cash conversion and free cashflow – Ensuring we quickly achieve our free cashflow positive position to allow further strengthening of the company to de-lever or reinvest

• 90% Operating Cash Conversion and Free Cash Flow(1) +ve in 2019

3. And finally Organic Growth – Aiming for mid-single-digit, so we have a growing business which builds

• n the efficient platforms we have created
• Organic growth +3% with growth across all platforms

2019 At a Glance Business Overview

We have delivered on all our key objectives for 2019…..

1) Free Cash Flow defined as cash flow after proceeds from disposals, investments and interest, but before ETV costs, M&A and other financing cash flows

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We have built a highly resilient business, well prepared for current macro uncertainty

COVID-19 Business Overview

Swiftly taking required actions with many initiatives already completed Diversified, highly resilient, business of scale

• Non-life insurance is not a discretionary purchase in most cases and the broking market has proven extremely resilient

and defensive in past macro downturns

• Ardonagh is highly diversified and not materially exposed to a single market, carrier, customer or producer

– No carrier more than 11% Ardonagh GWP, no class of business more than 15% and class of business diversified further by end market – Limited direct exposure to industries particularly impacted by COVID-19 - travel, leisure and hospitality c.3.5% total Group income

• Our unique scale and operational efficiency ensures we can compete effectively in an uncertain market environment
• We rapidly implemented key business continuity measures, leveraging our well invested IT and operational infrastructure

– Over 70% of all staff are currently working from home with only client facing “key workers” remaining in offices

• We are proactively reducing/ delaying discretionary opex and capex spend including travel, entertaining, marketing, non-

business critical IT upgrades, etc.

• We maintain a substantial liquidity buffer of >£180m as of Dec’19 and >£140m as of Mar’20 after seasonally lower Q1

cash flow generation and semi-annual interest, and trading momentum to date remains strong and ahead of 2019

• We are working with government and regulatory bodies to ensure that we are at the forefront of business support

initiatives to support our commercial and personal clients through this challenging period

• We monitor lead KPIs on a daily/ weekly basis to ensure we are ready to react swiftly to further market changes

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Ardonagh has taken action to protect the wellbeing of our employees and clients, while ensuring that we continue to meet our obligations to them

COVID-19 Business Overview

Specialty Advisory Retail

✓ Significant investment in our digital platform has enabled seamless end-to- end connectivity with our clients and wide-scale remote working capability ✓ 97% all staff currently working from home ✓ Lloyds have issued Emergency Trading Protocols (ETP) to ensure the flow of business when trading room is closed ✓ Travel and entertaining is restricted and client interactions are being done online and by phone ✓ Less than 5% total income direct from hardest hit industry sectors of travel, leisure and hospitality ✓ Our aviation exposure is predominantly military not commercial ✓ Segregation in place between and within

• ur 7 major contact centres

✓ Ability to transfer calls to other locations and sites accross the Platform ✓ Diversion of simple tasks, usually done

• ver the phone, to digital channel

✓ Re-skilling of workforce initiated to provide further cover for absent colleagues ✓ Work from home capability for all non- client facing staff available ✓ Virtual contact centre capability available and wide-scale deployment being tested ✓ Only c. 1.5% total income direct from hardest hit industry sectors of travel, leisure and hospitality ✓ Segregation maintained between 70+ sites and contact centres – typically less than 5% headcount in any one location ✓ Client interactions are being done online and by phone ✓ Most staff including back-office currently working from home ✓ Key functions such as finance and client money are working remotely ✓ c. 5% total income direct from hardest hit industry sectors of travel, leisure and hospitality ✓ 80%+ total income related to product lines that essential for clients to trade and requirements of bank/ lease/ mortgage agreements or mandated by industry regulatory bodies

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Specialty

We have built three highly scaleable, integrated, industry-leading platforms, with best-in-class capabilities, IT and operating systems

Platform Highlights Business Overview

Lutine

£142m +4.3% 22%

Income

• Org. Gth

Margin Global distribution leveraging heritage Price Forbes brand and expertise at Lloyd’s, combined with leading specialist MGAs

Advisory

£223m +3.3% 31%

Income

• Org. Gth

Margin Established community-based SME broking and advisory platform, driving growth through trusted relationships to meet client needs

Retail

£294m +0.4% 33%

Income

• Org. Gth

Margin Multi-brand personal lines digital platform, driving growth through leveraging advanced consumer data and pricing analytics

Total Ardonagh

Includes lean corporate centre

£667m +3.0% 27%

Income

• Org. Gth

Margin

Note: Specialty and MGA businesses will continue to operate as separate segments

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A year of integration and focus on organic growth has delivered successes across all three business Platforms

Platform Highlights Business Overview

Specialty Advisory Retail

✓ Successful recruitment of leaders in a number of niche and specialist areas, continuing our strategic vision to invest in top market talent in our specialist target markets ✓ Acquisition of minority investment in Hong-Kong based Sino Insurance Brokers to complement existing APAC regional strategy ✓ Focused investment in modernisation of the Specialty operating model, reducing costs, standardisation of processes and digitisation of front end portfolio offerings ✓ Successful delivery of cost savings in MGA to right-size the expense base following disposal of loss-making Commercial MGA

• n 1 Jan’19

✓ Successful Swinton integration ahead of plan with significant cost reductions achieved, margins now on par with rest of Retail – All 44 Swinton branches remaining at completion closed by Q3’19 ✓ Overall live policy count, Dec’19 +1.0% vs. Dec’18, including back-books ✓ Live policy growth +6% across Autonet and Carole Nash driven by new business improvement in motor and bike ✓ PSL now number 1 share of new business with all major IFA networks – new APIs with market leading flexible integration capability ✓ S&P successfully migrated to high margin niche markets, retreating from unprofitable business – continued strong delivery of cost savings ✓ Acturis roll-out completed in 2019 and 100% of in-scope branches have now completed a full annual renewal cycle ✓ Large corporate new business wins include £5bn turnover global broadcaster and the UK’s largest charity ✓ Successful integration of highly complimentary HIG and MHG businesses ✓ Significant progress in executing placement strategy to reduce the number

• f carriers and deliver better outcomes

for clients ✓ Won the ‘Commercial Lines Broker of the Year – SME/Mid-Corporate’ award at the British Insurance Awards in Jul’19 ✓ Health and Protection won five awards at the Health Insurance & Protection Awards in Oct’19, including Adviser of the Year

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£183.4 £198.7 £217.4 £0.1 £15.2 £18.8

2019 Reported

• Adj. EBITDA

Annualisation of Acquisitions and Disposals Cost Savings and Synergies PF Adj. EBITDA

• excl. New Cost

Savings New Cost Savings and Synergies 2019 Pro Forma

• Adj. EBITDA

Significant EBITDA uplift expected from actions already taken and in process

2019 Adj. EBITDA Bridge (£m)

Remainder of the £36.2m 2018 Annualised Cost Savings and Synergies (£21.4m as at Sep’19) More than 80% from annualisation of actions already taken Clearly defined near-term Cost Savings and Synergies identified in Q4 More than 80% from actions planned in 2020 Growth Strategy Business Overview Nevada 3

1) Pro forma for all material acquisitions and disposals. EBITDA includes annualisation of cost savings from completed actions and actions expected to be completed during next 12 months

(1)

Completed synergistic M&A “tuck-ins” Maturation of existing newly hired producers Highly accretive growth in APS Increased retention

Further Growth Drivers:

Cross-selling and new products

Financial Overview

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Operating Cash Conversion Free Cash Flow(3)

Strong income growth and rapid margin expansion, combined with significant improvement in cash flow – Delivering in line with plan

• Adj. EBITDA and Margins

Income and Organic Growth

3.5% 3.0% 2.5%

Target 4-6%

19% 27% 21% 33%

(1)

1) Pro forma for all material acquisitions and disposals. EBITDA includes annualisation of cost savings from completed actions and actions expected to be completed during next 12 months 2) Ardonagh target organic growth

(1)

3) Free cash flow post interest and disposal proceeds 4) Adjusted for pro forma interest of £33.6m as no interest on SSN issued June’17 paid in 2017; excludes round-tripped interest from bond raises

(2) (1)

Organic Growth:

• Adj. EBITDA Margin:

FCF >15% Adj. EBITDA Reported Reported

Target >30%

(4)

Financial Summary Business Overview

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Full year reported income growth +26.6% and +660bps margin expansion, driven by economies of scale and strong delivery of cost savings

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for all material acquisitions and disposals 3) 2019 results are set out post IFRS 16 implementation and 2018 results have not been restated to reflect this revised accounting standard in line with IFRS guidance - £3.2m impact in Q4’19 and £12.9m full-year 2019 4) Including £34.0m pro forma for annualised cost savings

Overview Financial Update Reported Result(1) Pro Forma Result(2) 2019 Variance Variance PF Adj. Full Year (£m) 2019 2018 £m % 2019 2018 £m % EBITDA(4) Income 667.5 527.1 140.4 26.6% 668.5 663.6 4.9 0.7% Staff Expenses (311.0) (277.5) (33.5) (12.1%) (311.7) (316.9) 5.3 1.7% Operating Expenses (173.1) (139.3) (33.7) (24.2%) (173.3) (196.3) 23.0 11.7%

• Adj. EBITDA as Reported(3)

183.4 110.3 73.2 66.4% 183.5 150.3 33.2 22.1% 217.4 Margin % 27.5% 20.9% 660 bps 27.4% 22.7% 480 bps 32.5% Staff Costs as % of Income 46.6% 52.7% 610 bps 46.6% 47.8% 110 bps

• Op. Expenses as % of Income

25.9% 26.4% 50 bps 25.9% 29.6% 370 bps

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Strong improvement in quality of earnings as cost savings are delivered and

• ne-time costs reduced

Quality of EBITDA Financial Update

• +66% increase in Adj. EBITDA from £110.3m in 2018 to

£183.4m in 2019 on a reported basis

• +288% improvement in EBITDA from £29.7m to £115.3m in

2019 on a reported basis

• Improvement in underlying reported EBITDA driven by

income growth and successful delivery of cost saving programmes, combined with reduction in one-time costs to deliver savings as programme terminates

• Exceptionals (excluding Swinton integration costs, M&A,

financing and ETV costs) represent 21% of 2019 Adj. EBITDA, a significant reduction vs. 74% in 2018 LTM Reported Adj. EBITDA(1) Commentary

1) Reported result includes acquisitions and disposals from the completion date

21% 74% 63% 27%

£110.3m £122.7m £143.1m £165.2m £183.4m £29.7m £115.3m 2018 LTM Q1'19 LTM Q2'19 LTM Q3'19 2019 Exceptionals excl. ETV, Financing and M&A Swinton Exceptionals ETV, Financing and M&A Reported EBITDA

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£527.1 £667.5 £668.5 £126.9 £5.0 £11.6 £1.0 (£3.1)

2018 Reported Acquisitions & Disposals FX/ Accounting Q1'19 Investment and Headwinds Growth 2019 Reported Annualisation

• f Acquisitions

2019 Pro Forma

(1)

+27%

• vs. 2018

Reported +28%

• vs. 2018

Reported

(1) (2)

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19)

Income progression driven by a combination of continued strong organic growth and selective M&A

Income Bridge Financial Update

2019 full year vs. 2018 full year Income Bridge (£m)

Acquisitions: Swinton, Nevada 3 Disposals: Claims, Commercial MGA FX impact in Price Forbes Hedge accounting Accounting standard changes Organic growth +3.0% in 2019 New producer hires, strong retention and new business delivering growth, offset by back- book and reduced profit share Nevada 3 acquisition

• n 31 Jan 2019

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£110.3 £183.4 £183.5 £217.4 £45.4 £12.4 £20.0 £0.1 £15.2 (£4.7) £18.8

2018 Reported Acquisitions & Disposals FX/ Accounting Q1'19 Investment and Headwinds Growth and Net Cost Savings 2019 Reported Annualisation

• f Acquisitions

2019 Pro Forma Annualised Cost Savings & Synergies 2019 Pro Forma

• Adj. EBITDA

+66%

• vs. 2018

Reported

(1)

+66%

• vs. 2018

Reported +97%

• vs. 2018

Reported

(1) (2) (3)

Strong growth in Adj. EBITDA as both acquisitions and cost savings convert into reported earnings

EBITDA Bridge Financial Update

2019 full year vs. 2018 full year Adj. EBITDA Bridge (£m)

Acquisitions: Swinton, Nevada 3 Disposals: Claims, Commercial MGA FX impact in Price Forbes Hedge accounting Accounting standard changes (incl. £12.9m IFRS 16) £21.1m gross cost savings delivered in year Organic growth offset by cost inflation and back-book

• Adj. EBITDA

Nevada 3 acquisition

• n 31 Jan 2019

Q1’19 Discretionary investment in Retail and Specialty plus Marine contract loss

£34m

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19) 3) Includes annualisation of cost savings from completed actions and actions expected to be completed during next 12 months

Margin 20.9% Margin 27.5% Margin 32.5%

Remainder of the £36.2m 2018 Annualised Cost Savings and Synergies (£21.4m as at Sep’19) More than 80% from annualisation

• f actions already taken

Clearly defined near-term Cost Savings and Synergies identified in Q4 More than 80% from actions planned in 2020

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Advisory Financial Highlights

• Strong overall income growth in 2019 driven by acquisitions

and underpinned by +3.3% organic income growth(6) resulting from continued improvement in income retention rate (+280bps vs. prior year(3)) in both Insurance Broking and Health & Protect

• Adj. EBITDA margin expansion of +700bps driven by income

growth combined with delivery of cost saving plans (Adj EBITDA margin excl IFRS16 impact +480bps vs. 2018)

• Roll-out of Acturis completed during the year and 100% of in-

scope sites have now completed a full annual renewal cycle

• Execution of Insurance Broking placement strategy to reduce

the number of carriers and deliver better outcomes for clients

• Towergate Health and Protection won five awards at the

Health Insurance & Protection Awards in October 2019, including Adviser of the Year

• Towergate Insurance Brokers won the ‘Commercial Lines

Broker of the Year – SME/Mid-Corporate’ award at the British Insurance Awards in July 2019 2019 Key Highlights

Strong organic growth of +3.3%, accretive bolt-on acquisitions and delivery of cost savings resulted in income growth of +10.2% with margin expansion of +700bps

GWP £1.1bn

+21.0% (2018: £0.9bn)

• Adj. EBITDA Margin

31.0%

+700bps (2018: 24.0%)

Retention(3)(5) 88.7%

280bps (2018: 85.9%)

New Business(4)(5) £24.2m

• 3.5% (2018: £25.1m)

Advisory Segmental

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for the small acquisitions of HIG and MHG, completed 31 Jan’19 3) Retained income vs. prior year 4) Gross new business before introducer/payaway costs 5) Excludes transferred Swinton Commercial book and adjusts to reflect trend after payaways 6) Organic income growth excludes acquisitions (HIG & MHG) and the CTM closed back-book

Reported Result(1) Pro Forma(2) £m 2019 2018 Variance 2019 Income 222.9 202.2 +10.2% 223.8

• Adj. EBITDA

69.0 48.5 +20.5 69.1

• Adj. EBITDA Margin

31.0% 24.0% +700bps 30.9%

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Retail Financial Highlights

• Strong reported income growth driven by acquisition of Swinton,

completed 31 Dec’18

• Organic income growth for 2019 of +0.4%(5) as the business

continues to invest in accelerating new business policy growth across the brands

• Total policies under management grew +2.5% vs. prior year

despite expected decline in Swinton, with Autonet, Carole Nash, PSL and S&P all growing

• PSL full-year income growth of +3.2% as core growth is
• utstripping declines in back-book
• Swinton integration completed and cost savings are ahead of

plan – all remaining branches closed by Q3’19

• Margin broadly stable overall despite mix impact of Swinton at

lower margin and investment in new business policy growth

• Margin growth of +430bps on a pro forma basis, following

completion of Swinton integration, branch closures and continued strong cost saving delivery in S&P 2019 Key Highlights

Swinton acquisition driving +71.1% income growth, with integration now complete and significant cost savings, ahead of plan, driving minimal margin erosion

Retail Segmental

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for Swinton acquisition. Excludes closed book of monthly products (+1.0% including closed book of monthly products) 3) Pro forma for Swinton acquisition. Retained policies vs. renewals available for Retail Operating Segment and PSL and retained commission vs. renewal commission available for S&P

#Policies Under Mgmt.(2) 3,326k

+2.5% (2018: 3,245k)

• Adj. EBITDA Margin

33.4%

• 90bps (2018: 34.3%)

Retention(3) 73.5%

• 70bps (2018: 74.2%)

#New Bus. Policies(4) 878k

+7.5% (2018: 817k)

Reported Result(1) Pro Forma £m 2019 2018 Variance 2019 Income 294.2 172.0 +71.1% 294.2

• Adj. EBITDA

98.4 59.0 +39.3 98.4

• Adj. EBITDA Margin

33.4% 34.3% (90bps) 33.4%

4) Excludes S&P 5) Organic income growth excludes acquisition of Swinton and the Claims Disposal, the impact of closed back-books and profit shares

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Speciality Financial Highlights

• 2019 Income decline of 3.0%, the net result of: organic income

growth+4.3% (4), driven primarily by transformational hires and underlying growth in core business lines; offset by Commercial MGA disposal

• Recent strategic hires generating income in Q4’19. Prior hires

progressing on plan, as we execute our strategic direction to invest in market leading talent in niche and specialist areas

• Adj. EBITDA margin expansion of +670bps driven through

continued focus on delivering operational efficiencies and execution of cost saving programmes, partially offset by continued investment in producers as they build towards full maturity

• Minority investment in Sino Insurance Brokers completed

during the year – provides Asian platform for growth

• Focused investment to rationalise and enhance the clarity of
• ur offering is the basis on which we modernise our operating

model through process standardisation, consolidation, digitisation and automation 2019 Key Highlights

Growth from investment in producers offset by MGA disposal; Adj. EBITDA margin expansion of +670bps driven by right-sizing the MGA cost base

Specialty Segmental

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for the small acquisition of PfP, completed on 31 Jan’19 3) Stated at constant GBP:USD FX: 1.3237 - Actual GBP:USD FX: average 1.2757 for 2019 and 1.3237 for 2018 (54% 2019 Specialty platform income in USD), and removing the impact of hedging

Producer Retention

• c. 55% 5+ years

(c. 85% 3+ years)

Producer Hires 20

(during 2019)

4) Organic income growth at constant FX, excludes acquisitions and disposals, accounting standard changes, profit share and other non-recurring items

Client Retention

• c. 50% 10+ years

Reported Result(1) Pro Forma(2) £m 2019 2018 Variance 2019 Income 142.5 147.0 (3.0%) 142.5

• Adj. EBITDA

30.9 22.0 +8.9 30.8

• Adj. EBITDA Margin

21.7% 15.0% +670bps 21.6% At Constant Forex & Excluding Hedge Accounting: (3) Income 138.0 147.0 (6.1%) 142.5

• Adj. EBITDA

31.2 22.0 +9.2 30.8

• Adj. EBITDA Margin

22.6% 15.0% +760bps 21.6%

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37.5 77.1 18.5 5.0 5.1 4.8 6.2 19% 21% 23% 24% 26% 27%

Delivered by Dec'17 Savings in 2018 Q1'19 Q2'19 Q3'19 Q4'19 Delivered by Dec'19

Consistent focus on cost saving and synergy delivery is part of Ardonagh DNA – A further £6.2m delivered in Q4 2019

1) Reported result includes acquisitions and disposals from the completion date 2) Delivered during 2016 and 2017

• £77.1m total cost savings delivered to December 2019
• £21.1m cost savings delivered in 2019
• 100% of in-scope Advisory sites have now completed a

full annual renewal cycle on Acturis

• MGA restructuring savings post Commercial MGA

disposal

• Benefits from central management and support

services restructuring

• Specialty operating structure and process efficiencies
• London property footprint consolidation saves £1.3m

in annual rent – 70% reduction in sq ft

• Adj. EBITDA margin increased from 19% in 2017 to 27% in

2019, +8,100 bps

• Pro Forma cost adjustments reduced from £36.3m at Dec’18

to £15.2m at Dec’19

Cost Savings Financial Update

Delivered Cost Savings and LTM reported Adj. EBITDA Margin(1) Commentary

£36.3m Pro Forma Adjustment: £31.3m £26.1m £21.4m £15.2m

(2)

21

£34m of EBITDA upside expected from clearly defined near-term cost savings - £15.2m remaining from previous initiatives and a further £18.8m identified in Q4

Cost Savings Financial Update

Remaining Cost Savings & Synergies Cost Savings & Synergies Identified in Q4 Total:

• Benefits from further business integration, management

and back office savings

£8.9m £18.8m

• Operational excellence programme focused on digital

transformation, reduced admin and back-office staff costs, central procurement savings and rationalisation of underperforming teams

• Leveraging Group prior experience and resource

£0.7m

• Continued optimisation of cost base across the Retail
• perating segment – Autonet, Carole Nash, Swinton
• Annualisation of benefits from Swinton branch closures

and integration with Autonet

• Further benefits from integration of PSL and S&P retail

business with Autonet, Carole Nash and Swinton

£8.3m Specialty Advisory Retail

• Annualisation of benefits from Acturis implementation

(BSC), property rationalisation, business integrations and support function simplification

• Benefits from final completion of original Towergate

Transformation programme

£3.0m £5.3m £2.6m

• Annualisation and completion of support function

rationalisation in S&P

• Third party vendor savings in PSL
• Annualisation optimisation of cost base across the Retail
• perating segment
• Annualisation of cost savings from right-sizing the MGA

expense base following the Commercial MGA disposal

• Annualisation of Specialty back-office savings

Corporate £4.4m

• Annualisation of staff savings across central support

functions and property footprint rationalisation

• Annualisation of benefits from final completion of original

Towergate Transformation programme

Total: £15.2m £0.9m

• Third party support cost savings

More than 80% from annualisation

• f actions already taken:

More than 80% from actions planned in 2020:

22

Key drivers for further growth

Growth Drivers Business Overview

✓ Several small, highly accretive synergistic “tuck-ins” completed and signed in Q1 2020 ✓ Bolt-on acquisition of Bennetts exchanged on 17 Feb’20, highly complimentary to existing motorcycle offerings in Retail ✓ Bolt-on acquisition of Rural, a specialist underwriter, completed on 2 Mar’20 – augments existing agriculture book in MGA ✓ Substantial further upside from Specialty producer hires already with the business as they rapidly reach revenue maturity ✓ Continued investment in recruitment of producers ✓ Platform-level growth initiatives driven by platform CEOs – focus

• n retention and customer

service, cross-selling and driving new business ✓ Significant revenue opportunity to capitalise on our scale with risk markets ✓ Centralisation of placement through a dedicated team in APS ✓ Appeals to traditional markets and alternative risk capital ✓ Natural next step in Ardonagh’s development Completed synergistic M&A “tuck-ins” Maturation of existing newly hired producers Highly accretive growth in APS

23

1) Cash impact of IFRS 16 2) Free Cash Flow defined as cash flow after proceeds from disposals, investments and interest, but before ETV costs, M&A and other financing cash flows 3) Movement in Available Cash as set out in extracts from unaudited financial statements for the year ending 31 December 2019

• Operating cash conversion of 90% in 2019 (pre IFRS16 basis

89%), a substantial improvement on prior year

• £41.3m of discretionary Business Transformation investment

and £15.8m discretionary Project Capex in 2019, made up of: – £40.8m invested in Ardonagh cost savings programmes during 2019, including change resource, property footprint consolidation and redundancy costs – £16.3m invested in Swinton during 2019 to close all 44 retail branches and integrate business

• £17.9m legacy costs in 2019, primarily legacy LTIP payments,

loss corridors, legacy insurer administration “clean up” and litigation costs, minimal cash spend in Q4

• £41.8m discretionary M&A, minority equity and MIP buy-
• uts (c. £7.7m acquired EBITDA), debt redemption, plus

associated costs (including Swinton transaction costs)

• £7.5m financing costs from Swinton bond raise Dec’18
• ETV redress payments of £15.9m in 2019 (£9.5m paid in

Q4’19) with remaining £47.6m expected to be paid to claimants over the next 12-18months (c. £9m paid Q1’20)

• 2019 free cash flow of +£6.2m and net cash outflow of

£63.9m results in a closing Available Cash of £61.7m and, with £120m Available RCF as at 31 December, a total Available Liquidity of £181.7m

Cash Financial Update

Operating cash conversion of 90% and free cash flow positive in 2019

Quarter 4 Full Year £m 2019 2018 Var 2019 2018 Var Adjusted EBITDA 39.0 20.8 18.2 183.4 110.3 73.2 Working Capital Movement 15.1 4.0 11.1 (16.2) (20.2) 4.0 Maintenance Capex (0.9) (0.1) (0.8) (2.3) (1.6) (0.8) Operating Cash Flow 53.2 24.7 28.5 164.9 88.5 76.4 Operating Cash Conversion 137% 119% 18% 90% 80% 10% IFRS 16 Lease Payments(1) (4.2)

• (4.2)

(14.0)

• (14.0)

Transformational Hires (0.9) (3.6) 2.7 (5.5) (17.7) 12.2 Project Capex (9.3) (6.1) (3.2) (15.8) (18.3) 2.4 Business Transformation (7.1) (6.1) (1.0) (41.3) (24.1) (17.2) Investment Spend (17.2) (15.8) (1.5) (62.6) (60.1) (2.5) Legacy Costs and Other Non-Recurring 0.6 (9.0) 9.6 (17.9) (31.6) 13.7 Interest on Notes and RCF (0.4) 1.2 (1.6) (90.6) (76.6) (14.0) Disposals 0.6 24.2 (23.6) 26.3 66.6 (40.2) Free Cash Flow pre ETV, Equity, M&A(2) 32.5 25.2 7.3 6.2 (13.2) 19.4 M&A, Equity, Debt Purchase (23.1) (110.1) 87.0 (41.8) (123.7) 81.9 Financing and Associated Costs

• 149.1

(149.1) (7.5) 208.0 (215.5) Regulatory (incl. ETV redress) (10.9) (0.0) (10.8) (20.7) (3.6) (17.1) Net Cash Flow(3) (1.4) 64.2 (65.6) (63.9) 67.5 (131.4) Opening Available Cash 63.2 61.4 1.7 125.6 58.1 67.5 Closing Available Cash 61.7 125.6 (63.9) 61.7 125.6 (63.9)

24

1) Movement in Available Cash as set out in extracts from unaudited financial statements for the year ending 31 December 2019 2) USD 520m SSN at hedged USD/ GBP FX rate of 1.2742; USD 235m SSN at hedged FX of 1.2979; Note that Q3 2019 Interim Report translates USD debt at balance sheet FX of 1.3187 3) Including pro forma for SINO completed acquisition 4) Pro forma interest excludes RCF commitment fees 5) RCF committed facility extended to £170m as at 18 Mar’20 in addition to £50m LoC for ETV liabilities 6) Available Liquidity defined as Available Cash plus Available RCF 7) Includes pro forma EBITDA for producers to maturity, signed M&A and APS

Leverage Financial Update

Significant reduction in leverage thanks to strong EBITDA growth. Available Liquidity increased to £181.7m

(3)

Dec'18 Dec'19 Dec'19 £m Excl IFRS16 Incl IFRS16 Available Cash(1) 125.6 61.7 61.7 Adjustment 20.0

• Adjusted Available Cash

145.6 61.7 61.7 SSRCF (£120m)

• GBP Senior Secured Notes

553.3 553.3 553.3 USD Senior Secured Notes(2) 589.2 589.2 589.2 Net Secured Debt 996.9 1,080.7 1,080.7 Other Debt 4.6

• Lease Liabilities
• 43.5

Total Net Debt 1,001.5 1,080.7 1,124.2 LTM Pro Forma Adjusted EBITDA 186.5 206.3 218.0 Interest on Senior Secured Notes and SSRCF(4) 93.3 93.3 99.6 Net Secured Leverage 5.34x 5.24x 4.96x Total Net Leverage 5.37x 5.24x 5.16x Interest Cover 2.00x 2.21x 2.19x Undrawn SSRCF (5) 120.0 120.0 120.0 Available Liquidity (6) 215.6 181.7 181.7

25

1. Strong 2019 income growth: +26.6% reported income growth, +3.0% organic income growth 2. Significant margin expansion: +660bps vs. prior year 3. High operating cash flow conversion at 90%, at high end of our guidance 4. Significant improvement in quality of earnings and free cash flow 5. Strong trading momentum as we transition into 2020 6. Substantial additional income and EBITDA potential from APS and highly disciplined M&A 7. In these uncertain times, we remain very confident in the strength and resilience of our business

Summary

Summary Financial Update

Appendix

27

We have built a highly diversified and resilient business

Lloyd’s and ABI broker channel GWP (£bn)(1) GWP by Class of Business(2)

1) Source: ABI, Lloyd’s Statistics, MSCI, ONS 2) Estimated 2019 GWP pro forma for all material acquisitions and disposals. Nuclear, downstream energy and mining facilities classified as property

Market Exposure

Travel, leisure & hospitality sectors

• c. 3.5% total Group income

28

We have invested in leading edge IT capabilities – for example Specialty’s online client facing tool “Edge” ensures seamless client/broker connectivity

IT Platforms

• Edge is a proprietary online client and broker facing

tool initially developed to target USA Property and Casualty clients

• Ardonagh Specialty Brokers use Edge in the Lloyds

Market to show the underwriters the Risks in real-time and also feedback to clients the quotes as they come in

29

Quarter 4 2019 financial performance

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for all material acquisitions and disposals 3) 2019 results are set out post IFRS 16 implementation and 2018 results have not been restated to reflect this revised accounting standard in line with IFRS guidance - £3.2m impact Q4’19 and £12.9m full-year 2019

Q4 2019 Reported Result(1) Pro Forma Result(2) Variance Variance Quarter 4 (£m) 2019 2018 £m % 2019 2018 £m % Income 162.1 123.6 38.5 31.1% 162.1 155.0 7.1 4.6% Staff Expenses (77.9) (68.7) (9.2) (13.4%) (77.9) (79.2) 1.3 1.7% Operating Expenses (45.2) (34.1) (11.1) (32.4%) (45.2) (47.9) 2.7 5.7%

• Adj. EBITDA as Reported(3)

39.0 20.8 18.2 87.6% 39.0 27.8 11.1 40.1% Margin % 24.1% 16.8% 720 bps 24.1% 18.0% 610 bps Staff Costs as % of Income 48.1% 55.6% 750 bps 48.1% 51.1% 300 bps

• Op. Expenses as % of Income

27.9% 27.6% (30 bps) 27.9% 30.9% 300 bps

30

£165.2 £183.4 £183.5 £217.4 £9.5 £3.1 £5.6 £0.1 £15.2 £18.8

LTM Q3'19 Reported Acquisitions & Disposals FX/ Accounting Growth and Net Cost Savings 2019 Reported Annualisation

• f Acquisitions

2019 Pro Forma Annualised Cost Savings & Synergies 2019 Pro Forma

• Adj. EBITDA

+11%

• vs. 2018

Reported

(1)

+11%

• vs. 2018

Reported +32%

• vs. 2018

Reported

(1) (2) (3)

Rapid growth in Adj. EBITDA as both acquisitions and cost savings convert into reported earnings

• Adj. EBITDA Bridge

Q4 2019

2019 full year vs. Q3’19 LTM full year Adj. EBITDA Bridge (£m)

Acquisitions: Swinton, Nevada 3 Disposals: Claims, Commercial MGA FX cash impact in Price Forbes Hedge accounting Accounting standard changes (incl. £3.2m IFRS 16) £6.2m gross cost savings delivered Organic growth offsetting cost inflation and back-book Nevada 3 Additional cost savings identified Remainder of the £21.4m Q3’19 Annualised Cost Savings and Synergies

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19) 3) Includes annualisation of cost savings from completed actions and actions expected to be completed during next 12 months

£34m

31

Segmental

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for all material acquisitions and disposals including; acquisition of Swinton (31 Dec’18), acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19), disposal

• f Claims business (16 Oct’18), and disposal of Commercial MGA (1 Jan’19)

2019 Performance by Platform

Reported Result(1) Pro Forma Result(2)

• Org. Gth
• Org. Gth

Quarter 4 (£m) 2019 2018 Variance (%) 2019 2018 Variance Q419 v Q418 (%) Q419 v Q418 (£m) Income Advisory 56.6 47.9 18.3% 56.6 50.8 11.4% 4.1% 1.9 Retail 67.4 36.7 83.8% 67.4 68.6 (1.8%) 7.1% 2.2 Specialty 35.6 37.4 (4.8%) 35.6 33.8 5.2% 1.7% 0.6 Corporate 2.4 1.7 2.4 1.7 0.3 Total 162.1 123.6 31.1% 162.1 155.0 4.6% 4.4% 5.0

• Adj. EBITDA

Advisory 13.3 7.5 5.8 13.3 7.7 5.7 Retail 21.5 11.8 9.7 21.5 18.3 3.2 Specialty 8.5 6.9 1.6 8.5 7.3 1.2 Corporate (4.4) (5.5) 1.1 (4.4) (5.5) 1.1 Total 39.0 20.8 18.2 39.0 27.8 11.1 Reported Result(1) Pro Forma Result(2)

• Org. Gth
• Org. Gth

Full Year (£m) 2019 2018 Variance (%) 2019 2018 Variance 2019 v 2018 (%) 2019 v 2018 (£m) Income Advisory 222.9 202.2 10.2% 223.8 216.3 3.5% 3.3% 6.6 Retail 294.2 172.0 71.1% 294.2 309.5 (4.9%) 0.4% 0.6 Specialty 142.5 147.0 (3.0%) 142.5 131.8 8.1% 4.3% 5.7 Corporate 7.9 5.9 7.9 5.9 1.2 Income 667.5 527.1 26.6% 668.5 663.6 0.7% 3.0% 14.1

• Adj. EBITDA

Advisory 69.0 48.5 20.5 69.1 52.7 16.5 Retail 98.4 59.0 39.3 98.4 90.3 8.1 Specialty 30.9 22.0 8.9 30.8 26.7 4.2 Corporate (14.9) (19.3) 4.5 (14.9) (19.3) 4.5 Total 183.4 110.3 73.2 183.5 150.3 33.2

32

1) Reported result which includes acquisitions and disposals from the completion date 2) Pro forma for all material acquisitions and disposals including; acquisition of Swinton (31 Dec’18), acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19), disposal of Claims business (16 Oct’18), and disposal of Commercial MGA (1 Jan’19)

Summary Quarterly Financial Performance

Quarterly Summary Segmental

3) 2019 results are set out post IFRS 16 implementation and 2018 results have not been restated to reflect this revised accounting standard in line with IFRS guidance

Reported Result(2) (£m) Q1'18 Q2'18 Q3'18 Q4'18 2018 Q1'19 Q2'19 Q3'19 Q4'19 2019 Q1'19 vs. Q1'18 Q2'19 vs. Q2'18 Q3'19 vs. Q3'18 Q4'19 vs. Q4'18 2019 vs. 2018 Income Advisory 50.3 55.2 48.9 47.9 202.2 52.0 60.4 53.8 56.6 222.9 1.7 5.2 4.9 8.8 20.6 Retail 41.3 47.7 46.3 36.7 172.0 70.0 78.8 78.0 67.4 294.2 28.7 31.1 31.7 30.7 122.2 Specialty 36.1 38.1 35.4 37.4 147.0 33.9 37.8 35.2 35.6 142.5 (2.3) (0.3) (0.1) (1.8) (4.5) Corporate 0.2 3.0 1.1 1.7 5.9 1.6 2.8 1.0 2.4 7.9 1.5 (0.1) (0.2) 0.8 2.0 Income 127.8 143.9 131.7 123.6 527.1 157.6 179.9 168.0 162.1 667.5 29.7 35.9 36.3 38.5 140.4

• Adj. EBITDA

Advisory 13.0 17.4 10.6 7.5 48.5 17.0 23.5 15.2 13.3 69.0 3.9 6.0 4.7 5.8 20.5 Retail 12.5 18.1 16.5 11.8 59.0 18.6 29.2 29.0 21.5 98.4 6.1 11.1 12.4 9.7 39.3 Specialty 5.6 6.2 3.3 6.9 22.0 6.7 8.2 7.4 8.5 30.9 1.1 2.1 4.1 1.6 8.9 Corporate (4.3) (3.2) (6.3) (5.5) (19.3) (3.0) (2.0) (5.5) (4.4) (14.9) 1.3 1.2 0.8 1.1 4.5

• Adj. EBITDA(3)

26.9 38.5 24.0 20.8 110.3 39.3 59.0 46.1 39.0 183.4 12.4 20.4 22.1 18.2 73.2 Pro Forma Result(2) (£m) Q1'18 Q2'18 Q3'18 Q4'18 2018 Q1'19 Q2'19 Q3'19 Q4'19 2019 Q1'19 vs. Q1'18 Q2'19 vs. Q2'18 Q3'19 vs. Q3'18 Q4'19 vs. Q4'18 2019 vs. 2018 Income Advisory 53.1 60.5 51.9 50.8 216.3 53.0 60.4 53.8 56.6 223.8 (0.1) (0.1) 2.0 5.8 7.5 Retail 78.7 81.8 80.4 68.6 309.5 70.0 78.8 78.0 67.4 294.2 (8.7) (3.0) (2.4) (1.2) (15.3) Specialty 32.3 33.7 32.0 33.8 131.8 33.9 37.8 35.2 35.6 142.5 1.6 4.1 3.2 1.7 10.7 Corporate 0.2 3.0 1.1 1.7 5.9 1.6 2.8 1.0 2.4 7.9 1.5 (0.1) (0.2) 0.8 2.0 Income 164.2 179.0 165.4 155.0 663.6 158.5 179.9 168.0 162.1 668.5 (5.7) 0.9 2.6 7.1 4.9

• Adj. EBITDA

Advisory 13.6 20.2 11.2 7.7 52.7 17.1 23.5 15.2 13.3 69.1 3.5 3.3 4.0 5.7 16.5 Retail 18.1 28.4 25.4 18.3 90.3 18.6 29.2 29.0 21.5 98.4 0.5 0.8 3.6 3.2 8.1 Specialty 7.0 7.5 4.8 7.3 26.7 6.6 8.2 7.4 8.5 30.8 (0.3) 0.7 2.6 1.2 4.2 Corporate (4.3) (3.2) (6.3) (5.5) (19.3) (3.0) (2.0) (5.5) (4.4) (14.9) 1.3 1.2 0.8 1.1 4.5

• Adj. EBITDA(3)

34.4 53.0 35.1 27.8 150.3 39.4 59.0 46.1 39.0 183.5 5.0 6.0 11.1 11.1 33.2

33

1) Reported result which includes acquisitions and disposals from the completion date

IFRS 16 Implementation – Impact by Platform

IFRS 16 Impact Segmental Adjusted EBITDA (£m)(1) Q1'19 Q2'19 Q3'19 Q4'19 2019 Excluding IFRS 16 Advisory (Insurance Broking) 15.0 22.8 14.1 12.3 64.2 Retail 17.5 28.2 27.8 20.7 94.3 Specialty 5.9 7.7 6.5 7.7 27.8 Corporate (3.5) (1.6) (5.8) (4.9) (15.8)

• Total

34.9 57.1 42.7 35.8 170.5 IFRS 16 Impact Advisory (Insurance Broking) 1.9 0.7 1.1 1.0 4.8 Retail 1.1 1.0 1.2 0.8 4.1 Specialty 0.8 0.5 0.9 0.8 3.1 Corporate 0.5 (0.4) 0.3 0.5 1.0

• Total

4.4 1.9 3.5 3.2 12.9 Including IFRS 16 Advisory (Insurance Broking) 17.0 23.5 15.2 13.3 69.0 Retail 18.6 29.2 29.0 21.5 98.4 Specialty 6.7 8.2 7.4 8.5 30.9 Corporate (3.0) (2.0) (5.5) (4.4) (14.9)

• Total

39.3 59.0 46.1 39.0 183.4

34

The Group presents results to investors using alternative performance measures (‘APMs’). Pro Forma for Completed Transactions information seeks to present the results as though the acquisitions of Swinton, Nevada 2 and a small book purchase as well as the disposals of the Claims and Commercial MGA businesses had occurred on 1 January 2018. The Group presents EBITDA and Adjusted EBITDA as important APMs for both reported and pro forma results. The objective of presenting APMs is to facilitate readers’ understanding of progress irrespective of the capital structure and before deduction of significant business investment and transformation costs, which have been a key element of the Group’s fix, build and grow strategy in recent years. This slide presents the reconciliations between the unaudited IFRS comprehensive gain/(loss) for the year and the key APMs. The full IFRS results for the 12 months ended 31 December 2019 will be made available when the Company publishes its audited report and accounts. EBITDA and Adjusted EBITDA measures may not be comparable to similarly titled measures used by other companies. EBITDA, Adjusted EBITDA and EBITDA margins are not measurements of financial performance under IFRS and should not be considered as alternatives to other indicators of the Group’s operating performance, cash flows or any other measure of performance derived in accordance with IFRS. The Group adopted IFRS 16 by applying the modified retrospective approach, which requires the cumulative effect of initial application of IFRS 16 to be recognised as an adjustment to the opening balance of retained earnings on the 1 January 2019 date of initial application, without restating prior years. As such, the 2018 profit and loss has not been restated.

1) Reported result includes acquisitions and disposals from the completion date 2) Pro forma for all material acquisitions and disposals including; acquisition of Swinton (31 Dec’18), acquisition of Nevada 3 Businesses MHG, HIG & PfP (31 Jan’19), disposal of Claims business (16 Oct’18), and disposal of Commercial MGA (1 Jan’19)

Note: Extracts are from unaudited financial statements

3) 2019 results are set out post IFRS 16 implementation

Reconciliation of YTD IFRS Loss to Alternative Performance Measures

Reconciliation to IFRS

Reported Full Year(1) Pro Forma for Completed Transactions Full Year(2) 2019(3) 2018 2019(3) 2018 Reconciliation of the IFRS Loss for the period to EBITDA and Adjusted EBITDA Loss for the period (74.0) (102.7) (76.9) (125.7) Eliminate: Items excluded from EBITDA Finance costs 113.6 94.7 113.6 109.6 Tax credit (30.2) (35.1) (30.2) (35.0) Depreciation, amortisation and impairment of non-financial assets 95.7 71.3 96.0 82.1 Adjustment to goodwill in respect of prior years

• 3.1
• 3.1

Fair value (gain) / loss on derivatives 0.6 (2.5) 0.6 (2.5) Loss from disposal of assets 6.8 1.4 6.8 1.4 Foreign exchange movements 2.8 (0.4) 2.8 (0.4) EBITDA 115.3 29.7 112.6 32.6 Eliminate: Items excluded from Adjusted EBITDA Transformational hires 6.0 22.9 6.0 22.9 Business transformation 39.5 31.2 39.5 59.5 Legacy and other costs 6.2 27.8 6.2 28.0 Regulatory costs 14.0 0.3 14.0 0.3 Acquisition and financing costs 6.5 5.9 5.2 7.1 Adjustment to gain on disposal of associate (1.8)

• Gain on disposal of associate
• (7.5)
• Gain on disposal of business

(2.2) (0.0)

• Adjusted EBITDA

183.4 110.3 183.5 150.3 Reconciliation of IFRS loss for The Ardonagh Group Limited for the period to Alternative Performance Measures (£m)

35

This investor presentation contains non-IFRS measures and ratios, including Adjusted EBITDA and Pro Forma Adjusted EBITDA, that are not required by, or presented in accordance with, IFRS. Non-IFRS measures are defined by us as set out below. “EBITDA” defined as earnings after adding back finance costs (including from 1 January 2019 effective interest on lease liabilities), tax, depreciation (including with effect from 1 January 2019, depreciation of lease right-of-use assets), amortisation, impairment of non-financial assets, profit/loss on disposal of non-financial assets (except for right-of- use assets in the year of transition to IFRS 16), foreign exchange movements and dividends received. “Adjusted EBITDA” or “Adj. EBITDA" defined as EBITDA after adding back discontinued operations, restructuring costs, Transformational Hires, Business Transformation Costs, Legacy Costs and Other Costs, regulatory costs, acquisition and financing costs, profit/loss on disposal of businesses or investments, share of operating profit/loss from associate, reduction/increase in the value of contingent consideration, as applicable. Adjusted EBITDA is stated before exceptional costs and one-off items as determined by management. “Pro Forma Adjusted EBITDA” or “Pro Forma Adj. EBITDA” defined as the Adjusted EBITDA of the business as adjusted for certain cost saving initiatives and cost synergies. “Pro Forma for Completed Transactions” defined as meaning adjusted to: (a) include the results of new acquisitions from the first day of the comparative year, (b) remove the results and gain or loss on disposal of discontinued operations, and of other business disposals from the current and prior year, where they have occurred prior to the end of the reporting period, and (c) reflect financing transactions as if they had occurred on the first day of the prior year. “Adj. EBITDA Margin” defined as Adjusted EBITDA divided by total income. “Organic” defined as excluding the impact of acquired or exited businesses and other non-recurring items and is set out at constant FX. “LTM” defined as the arithmetical sum of the last twelve months results, it should be noted that the 2017 results have not been restated for IFRS accounting standard changes. “Transformational Hires” defined as net losses associated with new joiners hired to drive transformational business growth in the Insurance Broking, Specialty & International

• r MGA segments to whom a capacity restriction (no insurer to underwrite policies) or restrictive covenant applies. The net losses are calculated as the recruitment costs, sign
• n fees, costs of retention and salary (‘salary related costs’) incurred during the period of the capacity restriction or covenant, or during one year after the capacity restriction
• r covenant has ended, less the income generated by those new joiners during that period. (If the net losses become negative, so that income generated exceeds salary-

related costs, this is no longer a Management Reconciling Item). “Business Transformation Costs” defined as costs (other than restructuring costs) incurred in transforming the legacy Towergate business, in realising synergy benefits from acquired businesses by reorganising management and business structures and by implementing new systems and processes, in reorganising group structures, in transforming business processes, in terminating contractual arrangements, and in driving a cost base that is the right size for the Group. “Legacy and Other Costs” defined as pre-2016 or non-repeatable costs arising from retention payments to key staff so as to provide long-term stability to the business, from insurer loss ratio performance for legacy underwriting disciplines and decision making, from external reviews and process improvements in cash and liquidity reporting, from write down of legacy IBA balances, from remediation work in the Finance function, and from commercial disputes.

Non-IFRS Financial Measures

Glossary

36

“Operating Cash Conversion” defined as Adjusted EBITDA less working capital movement and maintenance capital expenditure, over Adjusted EBITDA. This excludes one-off costs, other capital expenditure and exceptional costs related to cost saving and income growth initiatives. “Free Cash Flow” defined as cash flow after proceeds from disposals, investments and interest, but before ETV costs, M&A and other financing cash flows. “Available Cash” defined as total unrestricted own funds plus ETV restricted funds. “Available Liquidity” defined as Available Cash plus Available RCF. “Available RCF” defined as available and undrawn RCF (Revolving Credit Facility).

Non-IFRS Financial Measures (cont’d)

Glossary