Georgia Capital PLC · LSE:CGEO
Georgia Capital — 9M22 Earnings Presentation
102 slides from Georgia Capital's earnings presentation, November 2022
Slide 1: Investor Presentation 3Q22 & 9M22 Results
INVESTOR PRESENTATION 3Q22 & 9M22 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: GCAP Shareholders at 30-Sep-22
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-SEP-22 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Rank Shareholder name Ownership Other 14.8% 1. Gemsstock Ltd 10.31% 2. Allan Gray Ltd 6.63% 2 UK 32.3% 3. Coeli Frontier Markets AB 4.45% Management 1 7.7% 4. Lazard Asset Management L
Slide 4: Key Figures at a Glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 30-SEP-221 PORTFOLIO VALUE BREAKDOWN AT 30-SEP-22 26.3% Listed & Observable Portfolio value Net debt 2,857 GEL million 396 GEL million 73.7% Private US$ 1,008 million US$ 140 million PLATFORM COSTS - TARGETED AT MAXIMUM C.2% OF MCAP: NAV NAV per share two
Slide 5: Our Portfolio Overview as at 30-Sep-22
OUR PORTFOLIO OVERVIEW AS AT 30-SEP-22 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 751m Value: GEL 2,106m 26% of the total portfolio value 74% of the total portfolio value LARGE PORTFOLIO COMPANIES NON-CYCLICAL BUSINESSES, CLOSE TO GEL 300 MLN+ VALUE BANK OF RETAIL HOSPITALS INSURAN
Slide 6: Strong NAV per Share Growth
STRONG NAV PER SHARE GROWTH NAV PER SHARE (GEL) STRONG NAV PER SHARE GROWTH WITH 7% CAGR OVER +7% CAGR THE LAST 4 YEARS RUSSIA-UKRAINE WAR -16.4% 63.0 THE OUTLOOK IS EVEN 57.04 52.7 STRONGER ON THE BACK OF THE 48.1 44.3 46.8 MEGA GROWTH OPPORTUNITIES ACROSS OUR PORTFOLIO 31/Dec/18 31/Dec/19 31/Dec/2
Slide 7: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 7
Slide 8: Our Strategy
OUR STRATEGY 01 02 03 INVESTING IN CAPITAL- OUR ROBUST CAPITAL ESG AT THE CORE LIGHT OPPORTUNITIES ONLY MANAGEMENT FRAMEWORK OF OUR STRATEGY ESG 8
Slide 9: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY ▪ Investing in capital-light opportunities only ▪ Our capital management framework ▪ ESG at the core of our strategy ▪ Our strategic priorities 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 10: The Capital-Light Investment Strategy
THE CAPITAL-LIGHT INVESTMENT STRATEGY STRONG VALUE CREATION POTENTIAL GCAP INVESTS IN GEORGIA IN WITHOUT SIGNIFICANT CAPITAL SECTORS NOT REQUIRING COMMITMENTS INTENSIVE CAPITAL COMMITMENTS Manage third-party money and/or establish OUR BREAD AND BUTTER partnerships in capital heavy industries STRONG
Slide 11: Mapping Existing Portfolio to Regional Growth Opportunities
MAPPING EXISTING PORTFOLIO TO THE REGIONAL GROWTH OPPORTUNITIES CURRENT REGIONAL LONG-TERM REGIONAL LARGE CAPITAL-LIGHT EXPANSION POTENTIAL EXPANSION POTENTIAL Hospitals ✓ No No LARGE PORTFOLIO COMPANIES Retail ✓ ✓ Yes Yes (Pharmacy) Insurance (P&C No No and medical) ✓ Renewable No No PORTFOLIO COMP
Slide 12: Large and Capital-Light Portfolio Companies Eligible for Regional Expansion
LARGE AND CAPITAL-LIGHT PORTFOLIO COMPANIES ARE ELIGIBLE FOR THE REGIONAL EXPANSION TO FOLLOW THEIR NATURAL GROWTH PATH, GCAP ENABLES ITS LARGE, LARGE CAPITAL-LIGHT CAPITAL-LIGHT PORTFOLIO COMPANIES BUSINESSES BUSINESSES CURRENT TO EXPLORE REGIONAL GROWTH REGIONAL EXPANSION OPPORTUNITIES Hospitals P
Slide 13: Our Investment Strategy
OUR INVESTMENT STRATEGY GCAP INVESTS IN CAPITAL-LIGHT, MONETISE LARGE OPPORTUNITIES, WHICH HAVE A POTENTIAL TO BECOME GEL 300 MLN+ IN EQUITY VALUE OVER 3-5 YEARS THE CYCLE OF GCAP’S STRATEGY Invest Our key strategic principle is to develop or buy capital-light businesses at affordable prices. Grow G
Slide 14: Our Investment Strategy (Cont'd)
OUR INVESTMENT STRATEGY (CONT’D) IRR & MOIC1 IS THE KEY DRIVER FOR GCAP TO INVEST IN NEW OPPORTUNITIES KEY INVESTMENT METRICS AT GCAP LEVEL IRR MOIC ROIC IS AT THE CORE OF OUR DECISION MAKING WHEN OUR PORTFOLIO COMPANIES ARE INVESTING OR DIVESTING ASSETS / BUSINESSES KEY METRIC FOR REINVESTMENT DECI
Slide 15: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY ▪ Investing in capital-light opportunities only ▪ Our capital management framework ▪ ESG at the core of our strategy ▪ Our strategic priorities 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 16: Net Capital Commitment (NCC) Overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Pro-forma US$ MILLION 30-JUN-22 CHANGE 30-SEP-22 CHANGE 11-AUG-22 30-SEP-22 NCC REPRESENTS AN AGGREGATED Cash and liquid funds 226.5 -40.9% 133.9 13.3% 151.8 VIEW OF ALL CONFIRMED, AGREED Loans issued 8.7 NMF 89.3 -89.6% 9.3 AND EXPECTED CAPITAL OUTFLOWS Accrued
Slide 17: NCC Ratio Development Overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC RATIO DOWN BY 2.6 PPTS TO 24.4% IN 3Q22 385.8 365.9 345.7 Pro-forma NCC ratio down to 22.2%, reflecting the results of the MDA and subsequent movements in 42.5% BoG’s share price and FX. 248.5 39.8% 249.0 245.7 In light of a
Slide 18: 360-Degree Framework
360-DEGREE FRAMEWORK GCAP SHARE PRICE IS AT THE CORE OF NEW OUR INVESTMENT DECISION MAKING NCC RATIO NAVIGATION TOOL 15% 40% 360o ANALYSIS MEANINGFUL TACTICAL CASH BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY WE PERFORM 360-DEGREE ANALYSIS EACH TIME WE CAPITAL ALLOCATIONS MAKE
Slide 19: Deleveraging Across Our Private Portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 30-JUN-22 CHANGE 30-SEP-22 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 1.6x +0.1x 1.7x Up to 1.5x 2.5x AS OF 30-SEP-22
Slide 20: Leverage Overview of Our Private Businesses
LEVERAGE OVERVIEW OF OUR PRIVATE BUSINESSES TOTAL NET DEBT/EBITDA 5.5x 5.3x DEVELOPMENT OVERVIEW 4.6x 3.9x 3.7x 3.7x 3.5x 3.3x ➢ Despite headwinds from COVID-19, leverage profile across our private portfolio GEL MILLION companies improved over the last 2 years. 189 1,039 200 1,062 225 1,025 268 998
Slide 21: Aggregated Leverage Overview Across Large and Investment Stage Companies
AGGREGATED LEVERAGE OVERVIEW ACROSS OUR LARGE AND INVESTMENT STAGE PORTFOLIO COMPANIES ADJUSTED1 NET DEBT/EBITDA DEVELOPMENT OVERVIEW 3.2x 3.1x 2.6x 2.8x 2.6x 2.6x 2.5x 2.4x ➢ LTM EBITDA up 19% as at Sep-22 from Dec-19; 623 624 603 GEL MILLION ➢ Excluding the minority buyout agreement at 124 89 552
Slide 22: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY ▪ Investing in capital-light opportunities only ▪ Our capital management framework ▪ ESG at the core of our strategy ▪ Our strategic priorities 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 23: Core Strategy Enablers
CORE STRATEGY ENABLERS THREE FUNDAMENTAL ENABLERS: 01 Superior corporate governance THREE FUNDAMENTAL ENABLERS 02 Access to management 03 Access to capital STRONG ACCESS TO ACCESS TO CAPITAL CORPORATE MANAGEMENT GOVERNANCE 23
Slide 24: ESG Principles Lie at the Heart of Our Business
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRINCIPLES LIE AT THE HEART OF OUR BUSINESS WE INVEST IN INDUSTRIES WHICH HAVE POSITIVE IMPACT OUR PORTFOLIO IS CONCENTRATED ACROSS ON PEOPLE AND PLANET STRUCTURALLY IMPORTANT INDUSTRIES IN GEORGIA, CONNECTING US TO THE COUNTRY’S Our businesses owned through GHG,
Slide 25: Our Recent ESG Developments
OUR RECENT ESG DEVELOPMENTS KEY ESG ACTIVITIES AT GCAP 01 02 03 04 05 ALIGNING OUR ESG BECOMING A SIGNATORY IMPLEMENTING THE ENHANCING OUR ESG DUE GCAP’S FIRST DISCLOSURES WITH TCFD OF THE UNITED NATIONS RESPONSIBLE DILIGENCE AND SUSTAINABILITY (“UN”) GLOBAL COMPACT INVESTMENT POLICY REPORTING PROCE
Slide 26: Increased Focus on Impact Investing
INCREASEAD FOCUS ON IMPACT INVESTING COMMITTING TO UN’S PRINCIPLES AND MAPPING OUR BUSINESSES TO THEIR SUSTAINABLE DEVELOPMENT GOALS (“SDGS”) Direct SDG Supportive / Indirect SDG Business Impact Impact Retail (Pharmacy) 3, 8, 12 5, 11 Hospitals 3, 8, 12 5, 11 Insurance 3, 8, 9 1, 10 Renewable Energy
Slide 27: Impact Investing: Success Story in Water Utility Business
IMPACT INVESTING: OUR SUCCESS STORY IN THE WATER UTILITY BUSINESS KEY ESG DEVELOPMENTS ENVIRONMENTAL ENVIRONMENTAL AND SOCIAL & SOCIAL IMPACT IMPACT • Implementation of the Environmental PROVIDING 24-HOUR WATER AND WASTEWATER and Social Management System (“ESMS”) SUPPLY SERVICES TO C.1.4 MILLION RES
Slide 28: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY ▪ Investing in capital-light opportunities only ▪ Our capital management framework ▪ ESG at the core of our strategy ▪ Our strategic priorities 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 29: Our Strategic Priorities
DELEVERAGING GCAP HOLDCO BY BRINGING DOWN THE NCC RATIO BELOW 15% REDUCE AND MAINTAIN PORTFOLIO COMPANIES’ LEVERAGE TO RESPECTIVE TARGETED LEVELS SET MEASURABLE ESG TARGETS AT BOTH GCAP ESG HOLDCO AND PORTFOLIO COMPANY LEVELS OUR STRATEGIC PRIORITIES CONTINUED PROGRESS ON THE DIVESTMENT OF “OTHER” P
Slide 30: Our Long-Term Aspiration
OUR LONG-TERM ASPIRATION Significantly reduced leverage at the GCAP HoldCo level ACHIEVEMENT OF OUR STRATEGIC PRIORITIES Capacity to redeploy our existing capital WILL ENABLE GCAP TO without the need for new equity share GRADUALLY TRANSFORM issuance/raise INTO A SUSTAINABLE PERMANENT CAPITAL Consist
Slide 31: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 31
Slide 32: Demonstrated Superior Access to Capital
WE HAVE ONCE AGAIN DEMONSTRATED OUR SUPERIOR ACCESS TO CAPITAL IN OCTOBER 2022, OUR RENEWABLE ENERGY AND HOUSING BUSINESSES SUCCESSFULLY COMPLETED BOND PLACEMENTS ON THE GEORGIAN CAPITAL MARKET RENEWABLE ENERGY HOUSING DEVELOPMENT Transaction terms Transaction terms ▪ Offering amount: US$ 80 million
Slide 33: Strong Progress on Deleveraging GCAP
STRONG PROGRESS ON OUR KEY STRATEGIC PRIORITY OF DELEVERAGING GCAP GCAP EUROBOND BUYBACKS OVERVIEW (US$ MILLION) US$ 102 MILLION EUROBONDS RE- PURCHASED TO DATE In October 2022, we conducted a Modified Dutch Auction (“MDA”), through which, we bought back US$ US$ 37m 29 million GCAP Eurobonds. HELD I
Slide 34: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 34
Slide 35: NAV per Share Movement in 3Q22
NAV PER SHARE (GEL) MOVEMENT IN 3Q22 NAV PER SHARE (GEL) -4.7% +5.9% +6.1% +0.9% -0.4% +0.4% +8.2% +6.3% +14.5% UP 8.2% IN 3Q22 ▪ NAV per share (GBP) up 25.5% in 3Q22, reflecting the 16.0% appreciation of GEL against GBP during the third PRIVATE PORTFOLIO quarter and strong growth in GEL terms ▪ As
Slide 36: NAV per Share Movement in 9M22
NAV PER SHARE (GEL) MOVEMENT IN 9M22 NAV PER SHARE (GEL) -9.9% +1.3% -1.6% +4.1% -1.0% -2.3% -9.5% +5.3% -4.2% DOWN 9.5% IN 9M22 ▪ The decrease in NAV per share (GEL) reflects the impact of: • value reduction across our PRIVATE PORTFOLIO listed and observable and private portfolio companies with a 1
Slide 37: Portfolio Value Development in 3Q22
PORTFOLIO VALUE DEVELOPMENT IN 3Q22 PORTFOLIO VALUE UP 5.6% TO GEL 2.9 BILLION IN 3Q22 LISTED AND OBSERVABLE PRIVATE PORTFOLIO VALUE UP BY GEL 9 MILLION GEL MILLION PORTFOLIO VALUE UP BY (0.4%) GEL 142 MILLION (23.4%) 37
Slide 38: Progress on Share Buyback and Cancellation Programme
PROGRESS ON THE SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMME 3.1 MILLION SHARES (c.7% OF ISSUED 0.9 TOTAL CAPITAL) HAVE BEEN REPURCHASED 0.8 UNDER THE US$ 25 MILLION SHARE 0.5 0.6 3.1 BUYBACK AND CANCELLATION 0.4 MILLION PROGRAMME AS OF 30-SEP-22 7
Slide 39: Dividend Income Outlook
DIVIDEND INCOME OUTLOOK DIVIDEND INCOME FROM PORTFOLIO COMPANIES 94 DIVIDEND INCOME +31.3% PER SHARE (GEL) 1.6 c.2.1 ROBUST DIVIDEND INCOME IN 2022 GEL MILLION IN 2022 +26.4% c.94.0 DIVIDENDS INCOME 3Q22 TO DATE GEL MILLION (GEL million) c. 9.5 74.4 BOG - 40.9 14.5 2 40.91 Retail (Pharmacy) 16.0 16.
Slide 40: Liquidity Outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) 300 300 365 365 365 365 300 * GCAP LIQUIDITY DOWN BY 42.8% IN 3Q22, MAINLY REFLECTING THE SHAREHOLDER LOAN ISSUED TO RENEWABLE ENERGY -42.8%* 232 234 ** LIQUIDITY UP BY 13.4% WHEN ADJUSTED FOR THE GCAP EUROBOND B
Slide 41: Aligning Our Opex Ratio with NAV Platform Costs
ALIGNING OUR OPEX RATIO WITH NAV PLATFORM COSTS TARGETED AT MAXIMUM TARGETED AT MAXIMUM c.2% OF MCAP 0.75% OF NAV CURRENT TARGET TARGET FROM 2024 Management fee expense ratio: 2019 – 1.8%; 2020 – 1.8%; 2021 – 1.7%. 41
Slide 42: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 42
Slide 43: Aggregated Revenue Development Across Private Portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP +35.3% 10.6% Y-O-Y IN 3Q22 AND +9.8% UP 9.8% Y-O-Y IN 9M22 1,400 +34.1% 1,275 350 +10.6% 239 ▪ Aggregated revenue excluding Hospitals and 1,035 Clinics & Diagnostics, which have been 121 125 495 198 temporarily
Slide 44: Aggregated EBITDA Development Across Private Portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED EBITDA UP 1.8% +20.6% Y-O-Y IN 3Q22 AND DOWN 7.4% Y-O-Y IN 9M22 -7.4% 201 +7.6% 186 ▪ Aggregated EBITDA excluding Hospitals and 28 Clinics & Diagnostics, is up 31.6% y-o-y in 154 30 +1.8% 3Q22 and up 9.1% y-o-y in 9M22. 47
Slide 45: Aggregated Cash Balance & Net Operating Cash Flow
AGGREGATED CASH BALANCE & NET OPERATING CASH FLOW DEVELOPMENT ACROSS PRIVATE PORTFOLIO ORGANIC TRANSITION TO REVENUE GROWTH STRATEGY FROM PREVIOUSLY ADOPTED CASH PRESERVATION STRATEGY TOTAL AGGREGATED NET OPERATING CASH FLOW TOTAL AGGREGATED CASH BALANCE OF PRIVATE BUSINESSES (GEL MILLION) (GEL MILL
Slide 46: Portfolio Value as of 30-Sep-22
PORTFOLIO VALUE AS OF 30-SEP-22 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 90% IS OF OUR PORTFOLIO 21% 5% 24% 15% 9% 6% 6% 4% 10% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 MULTIPLE: GBP 19.88 OPTION 8.6x 11.4x 10.7x – 12.7x 10.7x 14.8x 12.7x6 BGEO VALUATION2 LTM EV/EBITDA3 LTM EV/EBITDA3
Slide 47: Portfolio Highlights | September 2022
PORTFOLIO HIGHLIGHTS | 30 SEPTEMBER 2022 Gross investment of GEL 1.7b Net investment of GEL 66m Portfolio fair value of GEL 2.9b Listed and Observable assets Private portfolio companies Original 129 220 390 11 151 76 investment MOIC1 8.2 3.6 3.7 24.6 1.4 2.2 1,267 GEL million 598 200 214 174 153 120
Slide 48: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 48
Slide 49: Bank of Georgia Overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ INVESTMENT RATIONALE • The first entity from Georgia to be listed on the premium segment of the Main Market of the Market opportunity London Stock Exchange (LSE: BGEO) since February 2012. Banking sector assets, loans and depos
Slide 50: Bank of Georgia Overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) 40 Change 2015 2016 2017 2018 2019 2020 2021 3Q21 3Q22 35 GBP 19.88 y-o-y 30 as of 30-Sep-22 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5.0% 5.3% +0.3 ppts 25 20 NPL coverage
Slide 51: Water Utility Business Valuation Overview
Option valuation WATER UTILITY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW GCAP and Aqualia have put and call options for the (GEL MILLION) minority 20% equity interest in the water utility business. GCAP’S PUT OPTION AQUALIA’S CALL OPTION 8.25X 8.90X EV/EBITDA EV/EBITDA Exercisable in 20
Slide 52: Retail (Pharmacy) Business Overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 368 8 2 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou › c.400 pharmacies in 5 years › International expansion (Ar
Slide 53: Retail (Pharmacy) Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW (CONT’D) REVENUE AVERAGE BILL SIZE & NUMBER OF BILLS ISSUED 24.5% 25.5% 25.5% 25.4% 26.0% 27.4% 29.7% 25.3% 29.5% Number of bills issued, million 25.3 27.1 28.8 27.6 29.0 7.4 7.5 21.1 22.5 Margin enhancement Gros
Slide 54: Retail (Pharmacy) Operating Performance Overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +21.4% +2.6% KEY DRIVERS 566 581 +12.9% +18.9% ▪ 3Q22 and 9M22 revenues of Retail GEL MILLION 478 (Pharmacy) reflect the recalibration of product -1.8% +5.2% prices due to GEL’s apprec
Slide 55: Retail (Pharmacy) Business Valuation Overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +0.9% -0.7% +3.8% +0.9% 8.6x 8.3x 30-Jun-22 30-Sep-22 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 GEL million, unless
Slide 56: Hospitals Business Overview
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW State healthcare spending, GEL millions Market share by number of beds1 13% GHG 2,524 18% 11% 10% 10% Aversi 714 5% 9% 9% 9% 9% • Since 2020 Government spending 2,480 Vienna Insurance Group 615 4% increased to manage the
Slide 57: Hospitals Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) Bed occupancy rate CASH FLOW HIGHLIGHTS1 3Q22 9M22 Average 3 5.4 5.2 5.6 5.7 5.7 4.6 5.6 5.1 250.0% length of stay Operating cash flow GEL 3.8m GEL 18.4m 2.5 200.0% Change y-o-y -83.6% -55.9% 2 -24.1ppts -11.7pp
Slide 58: Hospitals Operating Performance Overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +31.4% -7.2% HOSPITALS 233 216 KEY DRIVERS +12.3% ▪ 3Q22 and 9M22 performance of the +15.0% GEL MILLION 164 business reflects the suspension of COVID -32.5% -18.1% contracts by the Government in 1Q22 and the su
Slide 59: Hospitals Business Valuation Overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q -4.8% +8.5% -3.1% -9.6% 11.4x 10.5x 30-Jun-22 30-Sep-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise
Slide 60: P&C Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 MARKET SHARE 1H22 (GROSS PREMIUMS WRITTEN) (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia 500 442 (0.8% penetration in property
Slide 61: P&C Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | 9M22 COMBINED RATIO MTPL Channel -2.7ppts -1.6ppts 3% Partnerships with 82.1% 81.5% 80.8% 80.2% 73.9% 77.5% 72.6% 75.2% 75.4% 77.5% 81.3% 79.7% Financial Institutions 29% Direct Sales & Bro
Slide 62: Insurance Business Operating Performance Overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW EARNED PREMIUMS NET NET INCOME DEVELOPMENT +22.7% +10.3% 128 INSURANCE 116 +11.3% GEL MILLION 104 KEY DRIVERS 55 +10.5% P&C Insurance ▪ Increase in earned premiums net in 3Q22 and 54 +32.6% 51 +65.0% 18.0 9M22 is mainly driven by the growth in the 16
Slide 63: P&C Insurance Business Valuation Overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +6.7% 11.0x 10.7x 30-Jun-22 30-Sep-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Sep-22 30-Jun-22 Change
Slide 64: Renewable Energy Business Overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE MARKET OPPORTUNITY ▪ Growth in electricity consumption has been ~6.5x more in TWhs than growth in electricity supply during the last 10 years. ELECTRICITY SUPPLY AND CONSUMPTION (TW
Slide 65: Renewable Energy Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW (CONT’D) PERFORMANCE HIGHLIGHTS RENEWABLE ENERGY PROJECTS OVERVIEW | 30 SEPTEMBER 2022 Generation, Gross 58.6 52.4 15.2 11.4 24.9 19.1 98.7 82.8 94.0 93.8 62.7 55.8 64.5 62.3 221.2 211.9 Commissioned In
Slide 66: Renewable Energy Operating Performance Overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +4.9% RENEWABLE ENERGY +12.0% +5.3% KEY DRIVERS +5.1% 12 +16.4% 11 • In US$ terms, revenue and EBITDA were up 10 US$ MILLION +6.2% 23.9% and 30.4% y-o-y in 3Q22, respectively, +23.9% reflecting an increas
Slide 67: Renewable Energy Business Valuation Overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 EQUITY FAIR VALUE COMPOSITION AT 30-SEP-22 (US$ MILLION) (US$ MILLION) Change q-o-q +2.2% 0.6% +4.5% 14 Total value US$ 61 47 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITD
Slide 68: Education Business Overview
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINES OVERVIEW INDUSTRY INVESTMENT RATIONALE ▪ Highly fragmented general education TARGETING FOR 2025… …THROUGH market with consolidation opportunity. ▪ Market with strong growth potential. REMAINING GCAP BUILT LEARNER EBITDA
Slide 69: Education Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Sep-22 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market COVID impact Capacity utilization, 72.8% COVID impact 0.5%
Slide 70: Education Business Operating Performance Overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT EDUCATION +68.9% +47.5% +107.2% KEY DRIVERS 29 GEL MILLION +65.2% ▪ In 3Q22, the education business increased its capacity by 590 learners to 5,650 9 learners. +113.9% 20 +78.6% ▪ Strong intakes in 2022-2023 aca
Slide 71: Education Business Valuation Overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +6.6% +5.3% -16.8% +7.0% +7.7% 15.3x 14.8x 30-Jun-22 30-Sep-22 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Sep-22 30-J
Slide 72: Clinics & Diagnostics Business Overview
Private large portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW HIGH GROWTH PROSPECTS IN THE CLINICS BUSINESS Outpatient visits per capita, Georgia Outpatient encounters per capita Government Expenses on Primary Care VS GDP 10.00 3.9 3.9 Georgia has the lowest rate of 3.8
Slide 73: Clinics & Diagnostics Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS DIAGNOSTICS (9M22) 19 17 Market share by number of registered patients 0.8 million 2.4 Community Clinics Polyclinics GHG clinics 608,000 21% Number of patients served Average number of tests
Slide 74: Clinics & Diagnostics Operating Performance Overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT +65.4% -9.1% CLINICS & DIAGNOSTICS 72 +20.0% 65 -48.9% KEY DRIVERS +27.0% 22 16 16 ▪ Similar to the hospitals business, our clinics GEL MILLION -29.7% 40 -62.6% business was also impacted by the su
Slide 75: Clinics & Diagnostics Business Valuation Overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q -2.6% -2.3% -9.0% -2.6% 12.7x 9.8x 30-Jun-22 30-Sep-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless note
Slide 76: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 76
Slide 77: Real GDP Continuing Double-Digit Growth in 2022
REAL GDP CONTINUING DOUBLE-DIGIT GROWTH IN 2022 REAL GDP UP 10.2% Y-O-Y IN 9M22 50% 45% REAL GDP UP 10.2% Y-O-Y IN 9M22 40% 26% 30% 19% 18.0% KEY DRIVERS 20% 14.6% 10% 10% 12% 11.6% 9.7% 10.5% 8.8% 10% 7.2% 7% 7% ➢ Strong external demand supplemented by the migration effect, as 10% 4% 10.6% remittan
Slide 78: IMF Projects Georgian Economy to Grow 9% in 2022
IMF PROJECTS THE GEORGIAN ECONOMY TO GROW BY 9% Y-O-Y IN 2022, THE 8TH HIGHEST GROWTH IN THE WORLD REAL GDP GROWTH FORECASTS FOR 2022 | IMF GDP PER CAPITA BY COUNTRIES # Country GDP growth forecast, 2022 50,000 180% 1 Guyana 57.8 2 Fiji 12.5 45,000 162% 160% 3 Seychelles 10.9 159% 4 Barbados 10.5 40
Slide 79: Georgian Lari – Back to Pre-Pandemic Levels
GEORGIAN LARI – BACK TO PRE-PANDEMIC LEVELS APPRECIATING SINCE MID-2021, BRIEFLY INTERRUPTED AFTER THE RUSSIAN INVASION OF UKRAINE, GEL HAS NOW STRENGTHENED TO PRE-PANDEMIC LEVELS AGAINST USD Sources: NBG GEL APPRECIATION DRIVERS 3.7 3.5 3.46 ➢ Record high remittance inflows, increasing by 65% y-o-y
Slide 80: 83.5K Migrants Have Opened Georgian Bank Accounts
83.5K MIGRANTS HAVE OPENED GEORGIAN BANK ACCOUNTS, WORTH OVER $500 MN, SINCE THE START OF THE WAR NUMBER OF NEW BANK ACCOUNTS BY RESIDENCY, THOUSANDS NON-RESIDENTS’ DEPOSITS IN GEORGIAN BANKING SYSTEM BY RESIDENCY, GEL BLN 3.0 Russia Ukraine Belarus + US$ 635 MLN since war 12.5 0.2 2.5 0.2 0.5 2.0 0
Slide 81: Inflation to Decelerate Gradually in 2023
INFLATION TO DECELERATE GRADUALLY IN 2023 INFLATION Y-O-Y VS. INFLATION TARGET Sources: NBG, GeoStat INFLATION TO DECELERATE BUT REMAIN 16 Headline Inflation Core Inflation Target CLOSE TO DOUBLE DIGITS IN 2022 12 ➢ Annual inflation reached 10.6% in October 2022 (12.3% on average in 10.6 10M22) and
Slide 82: Public Debt to Fall Below 2019 Levels in 2022
PUBLIC DEBT TO FALL BELOW 2019 LEVELS IN 2022, WITH THE DEFICIT PROJECTED AT 3.2% OF GDP PUBLIC DEBT Sources: MoF FISCAL SUPPORT HAS BEGUN MODERATING External public debt to GDP, % Total public debt to GDP, % 59.9% ➢ Fiscal support moderated in 2022, with current expenditures 60% growing by 9% y-o-y
Slide 83: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 83
Slide 84: Our Robust Corporate Governance Framework
OUR ROBUST CORPORATE GOVERNANCE FRAMEWORK BOARD OF DIRECTORS COMPOSITION IRAKLI GILAURI, CHAIRMAN & CEO NEIL JANIN, Experience: Formerly BGEO Group CEO; Up to 20 years INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Formerly Chair and Non-Executiv
Slide 85: Georgia Capital's Highly Experienced Management Team
Georgia Capital’s highly experienced management team Georgia Capital Management Giorgi Ketiladze, Managing Director, Investments Georgia Capital Irakli Gilauri, Chairman & CEO Georgia Capital Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as Formerly Investm
Slide 86: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 86
Slide 87: Renewable Energy Operating Performance Overview (GEL)
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +68.5% -1.6% RENEWABLE ENERGY +1.5% +5.3% 34 34 KEY DRIVERS -5.2% -4.3% 28 27 ▪ 3Q22 and 9M22 performance mainly 26 12 GEL MILLION +12.5% 16 reflects GEL’s appreciation against US$ 20 +18.4% and increase
Slide 88: Renewable Energy Business Valuation Overview (GEL)
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 EQUITY FAIR VALUE COMPOSITION AT 30-SEP-22 (GEL MILLION) (GEL MILLION) Change q-o-q -1.1% -2.6% +1.2% 41 Total value 174 133 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 89: Medical Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW Largest medical insurer in the country with 23%1 market share Offering a variety of medical insurance products, with a wide distribution network to the Georgian population BUSINESSES MAJOR GROWTH DRIVERS Market s
Slide 90: Medical Insurance Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW (CONT’D) NUMBER OF INSURED & RENEWAL RATE REVENUE (NET INSURANCE PREMIUMS EARNED) 300 85.0% 76.9% 77.5% 78.0% 78.8% 78.2% 75.6% 400 74.3% 73.4% 73.4% 250 69.7% 70.0% 200 GEL million 300 -4.9% -4.9% 234 236 211 Th
Slide 91: Medical Insurance Business Valuation Overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q -3.3% 10.4% 0.9% 14.5x 12.7x 30-Jun-22 30-Sep-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted No No No 30-Sep-22 30
Slide 92: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q22 & 9M22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 92
Slide 93: Private Portfolio Companies' Debt Maturity Profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 30 SEPTEMBER 2022 (GEL MILLION) 2022 2023 2024 2025+ Total Large portfolio companies 51.1 157.1 79.0 34.7 321.9 - 26.4 9.2 23.7 59.3 Retail (pharmacy) 51.1 130.7 69.8 11.0 262.6 Hospitals - - - - - Medical Insurance Investm
Slide 94: Value Creation in Private Portfolio | 3Q22
VALUE CREATION IN PRIVATE PORTFOLIO | 3Q22 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 169.9 Performance buy-outs / exits and FX 3Q22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 142,450 Water Utility - GEL MILLION Total Listed and Observable Portfolio Companies 142,45
Slide 95: Value Creation in Private Portfolio | 9M22
VALUE CREATION IN PRIVATE PORTFOLIO | 9M22 Operating Greenfields / Multiple Change Value Creation in (295.4) Portfolio Businesses Performance buy-outs / exits and FX 9M22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG (60,219) Water Utility 13,608 GEL MILLION Total Listed and Observable Portfolio Companie
Slide 96: NAV Statement | 3Q22
NAV STATEMENT | 3Q22 1.Value 2a. 3.Operating 4. Liquidity GEL thousand unless otherwise noted 30-Jun-22 2b. Buybacks 2c. Dividends Management/ FX / 30-Sep-22 Change % Creation Investments Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 455,719 142,450 - - - - - 598,169
Slide 97: NAV Statement | 9M22
NAV STATEMENT | 9M22 1.Value 2a. 3.Operating 4. Liquidity GEL thousand unless otherwise noted 31-Dec-21 2b. Buybacks 2c. Dividends Management/ FX / 30-Sep-22 Change % Creation Investments Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 681,186 (60,219) - - (22,798) - -
Slide 98: Income Statement | 3Q22 & 9M22
INCOME STATEMENT | 3Q22 & 9M22 Income statement GEL ‘000, unless otherwise noted 3Q22 3Q21 Change 9M22 9M21 Change Dividend income 32,019 30,000 6.7% 66,440 44,430 49.5% Interest income 8,165 6,267 30.3% 26,315 16,884 55.9% Realised / unrealised (loss)/ gain on liquid funds (1,719) (547) NMF (13,154
Slide 99: Multiple of Invested Capital (MOIC) | September 2022
MULTIPLE OF INVESTED CAPITAL (MOIC) | 30 SEPTEMBER 2022 Gross GEL million Sell down Dividends Fair Value MOIC Realized MOIC Investment (1) (2) (3) (4) (2+3+4) / (1) (2+3) / (1) Listed and Observable Investments 349 835 268 751 5.3x 3.2x Bank of Georgia Group PLC 129 287 171 598 8.2x 3.5x Water Utili
Slide 100: Valuation Peer Group
VALUATION PEER GROUP RETAIL P&C (PHARMACY) HOSPITALS INSURANCE • NEUCA S.A. | Poland • Medicover AB (publ) | Sweden • Dhipaya Insurance | Thailand • Sopharma Trading AD | Bulgaria • EMC Instytut Medyczny SAEMC SA | Poland • Zavarovalnica Triglav | Slovenia • S.C. Ropharma S.A. | Romania • Med Life S
Slide 101: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or int
Slide 102: Company Information
COMPANY INFORMATION Georgia Capital PLC Registered Address 42 Brook Street London W1K 5DB United Kingdom www.georgiacapital.ge Registered under number 10852406 in England and Wales Stock Listing London Stock Exchange PLC’s Main Market for listed securities Ticker: “CGEO.LN” Contact Information Georg