Georgia Capital PLC · LSE:CGEO
Georgia Capital — H1 2024 Earnings Presentation
98 slides from Georgia Capital's earnings presentation, August 2024
Slide 1: Investor Presentation 2Q24 & 1H24 Results
INVESTOR PRESENTATION 2Q24 & 1H24 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 30-Jun-24
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-JUN-24 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 4 Rank Shareholder name Ownership 8.3% 1. Management & Management Trust 14.47% 2. Gemsstock Ltd4 10.62% 1 USA Management 3 31.4% 3. Allan Gray Ltd 7.72% 14.5% 4. Lazard Asset Man
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 30-JUN-241 PORTFOLIO VALUE BREAKDOWN AT 30-JUN-24 Portfolio value Net debt 41% Listed & Observable 3,492 GEL million 351 GEL million 59% Private US$ 1,243 million US$ 125 million STARTING FROM 2024, PLATFORM COSTS NAV NAV per share ARE TARGETED AT MAXIMUM 0.
Slide 5: Our portfolio overview as at 30-Jun-24
OUR PORTFOLIO OVERVIEW AS AT 30-JUN-24 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,425m Value: GEL 2,067m 40.8% of the total portfolio value 59.2% of the total portfolio value LARGE PORTFOLIO COMPANIES BANK OF RETAIL INSURANCE HOSPITALS GEORGIA (PHARMACY) (P&C AND MEDICAL) Value:
Slide 6: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 6
Slide 7: 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 7
Slide 8: 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 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 9: 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 10: 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 11: 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 12: Our investment strategy (cont'd)
OUR INVESTMENT STRATEGY (CONT’D) IRR & MOIC1 IS THE KEY DRIVER FOR GCAP TO INVEST IN NEW ROIC IS AT THE CORE OF OUR DECISION MAKING WHEN OUR OPPORTUNITIES PORTFOLIO COMPANIES ARE INVESTING OR DIVESTING ASSETS / BUSINESSES KEY INVESTMENT METRICS AT GCAP LEVEL KEY METRIC FOR REINVESTMENT DECISION MAKI
Slide 13: 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 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 14: 360-degree framework
360-DEGREE FRAMEWORK GCAP SHARE PRICE IS AT THE CORE OF NCC RATIO NAVIGATION TOOL OUR INVESTMENT DECISION MAKING rtunity Inv es t 15% 40% po m op en to ack ppor Buyb 360o tunity MEANINGFUL TACTICAL CASH ANALYSIS BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY Sal e o p p o r t u
Slide 15: NCC ratio development overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC REPRESENTS AN AGGREGATED VIEW OF ALL CONFIRMED, AGREED 385.8 AND EXPECTED CAPITAL OUTFLOWS 365.9 AT THE GCAP HOLDCO LEVEL 345.7 42.5% ▪ NCC ratio as at 12-Aug-24 improved by 3.4 ppts to 39.8% 250.1 15.5%, reflecting collectio
Slide 16: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Change Change US$ Million 30-Jun-23 31-Mar-24 30-Jun-24 (y-o-y) (q-o-q) NCC RATIO INCREASED BY 4.1 PPTS Cash and liquid funds 173.41 -85.5% 25.7 -2.4% 25.1 Q-O-Q AND BY 1.5 PPTS Y-O-Y TO Loans issued 6.7 -39.2% 3.5 14.8% 4.1 18.9% AS AT 30-JUN-24 Gross debt (304
Slide 17: Deleveraging across our private portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 31-MAR-24 CHANGE 30-JUN-24 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 2.3x +0.1x 2.4x Up to 1.5x 3.3x AS OF 30-JUN-24
Slide 18: 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 3.5x 3.5x 3.5x 3.3x 3.2x ➢ LTM EBITDA up 43.4% as at Jun-24 from Dec-19. GEL MILLION 189 1,039 200 1,062 225 1,025 268 998 258 913 238 927 245 803 248 787 245 849 271 946 2, 3 Dec-19 Jun-2
Slide 19: 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 3.3x 3.1x 2.6x 2.8x 2.8x 2.6x 2.6x 2.4x 3.0x 2.0x 702 GEL MILLION 7 1.0x 624 625 603 592 8 9 89 528 8 0.0x 131 93 -1.0x -2.0x -3.0x -4.0x 184 598 186 586 19
Slide 20: 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 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 21: 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 21
Slide 22: 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 healthcare businesses, contri
Slide 23: ESG at the core of our strategy
ESG AT THE CORE OF OUR STRATEGY RECENT KEY ESG DEVELOPMENTS 01 02 03 04 DELIVERED ON THE COMMITTED TO THE ISSUED FIRST EVER ENHANCED ESG STRATEGIC PRIORITY NET-ZERO INITIATIVE SUSTAINABILITY-LINKED EXPERTISE WITH UN BONDS IN THE REGION GLOBAL COMPACT’S GUIDANCE ▪ Georgia Capital delivered on its ▪ I
Slide 24: 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 GCAP HoldCo 8, 10, 13 5 Retail (Pharmacy) 3, 8, 12 5, 11 Hospitals 3, 8, 12 5, 11 Insurance 3, 8,
Slide 25: 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 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 26: Our strategic priorities
DELEVERAGING GCAP HOLDCO BY BRINGING DOWN AND MAINTAINING THE NCC RATIO BELOW 15% REDUCE AND MAINTAIN PORTFOLIO COMPANIES’ LEVERAGE TO RESPECTIVE TARGETED LEVELS ACHIEVE ESG TARGETS AT BOTH GCAP HOLDCO AND ESG PORTFOLIO COMPANY LEVELS OUR STRATEGIC PRIORITIES CONTINUED PROGRESS ON THE DIVESTMENT OF
Slide 27: 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 28: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 28
Slide 29: Key developments
1 NAV per share (GEL) down 12.8% in 2Q24, reflecting the impact on portfolio asset valuations from market movements resulting from the recent volatility in the regional geopolitical environment 2 Strong performance of our private portfolio companies, aggregated revenue and EBITDA up 7.3% and 17.5% y
Slide 30: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 30
Slide 31: NAV per share (GEL) movement in 2Q24
NAV PER SHARE (GEL) MOVEMENT IN 2Q24 PRIVATE PORTFOLIO NAV PER SHARE (GEL) -7.1% +2.3% -7.5% -0.3% -1.5% +1.3% -12.8% DOWN 12.8% Q-O-Q IN 2Q24 ▪ The decrease in NAV per share in 2Q24, reflects the impact on portfolio asset valuations from market movements resulting from the recent volatility in the
Slide 32: Strong NAV per share growth
STRONG NAV PER SHARE GROWTH STRONG NAV PER SHARE (GEL) GROWTH NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW WITH 11.0% CAGR SINCE DEC-18 +11.0% CAGR IN US$ AND GBP TERMS, NAV PER SHARE CAGR STANDS AT 10.0% AND 10.1%, RESPECTIVELY -12.8% 90.04 82.94 78.55 65.56 63.03 46.84 48.12 44.32 Dec-18 Dec-19 Dec-20
Slide 33: Earmarked for share buybacks and dividends through end of 2026
AT LEAST GEL 300 MILLION (US$ 110 MILLION) EARMARKED FOR SHARE BUYBACKS AND DIVIDENDS THROUGH THE END OF 2026 AS PART OF THE US$ 110 MILLION CAPITAL RETURN PACKAGE, US$ 40 MILLION HAS ALREADY IN MAY-24, GCAP ANNOUNCED ITS BEEN ALLOCATED TO SHARE BUYBACKS BOARD’S INTENTION TO MAKE AVAILABLE AT LEAST
Slide 34: Share buyback and cancellation programme
SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF GCAP’S SHARE BUYBACK AND CANCELLATION PROGRAMMES 9.2 MILLION SHARES (US$ 103.3 Number of issued shares MILLION IN VALUE) REPURCHASED 39.4 40.2 47.92 47.1 44.8 43.2 41.4 AND CANCELLED SINCE DEMERGER IN 2018, REPRESENTING 19.3%1 OF THE $103 ISSUE
Slide 35: Free cash flow development
FREE CASH FLOW DEVELOPMENT GCAP’s FREE CASH FLOW DEVELOPMENT (US$ MILLION) SIGNIFICANT INCREASE IN FREE CASH INCLUDING BUYBACK DIVIDENDS FLOW, REFLECTING ROBUST DIVIDEND INFLOWS, WELL-MANAGED OPERATING EXPENSES, AND REDUCED INTEREST EXPENSE IN LINE WITH OUR DELEVERAGING PROGRESS 48 Free cash flow is
Slide 36: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) LIQUIDITY UP BY 2.2x FROM 30-JUN-24, REFLECTING 300 300 365 365 300 150 150 150 150 DIVIDEND INFLOWS SUBSEQUENT TO 1H24 Cash receipt from the water utility business sale Cancellation of US$ 65 million GCAP Eurobo
Slide 37: Dividend income outlook
DIVIDEND INCOME OUTLOOK RECURRING CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES 1 180 GEL 50.3 MILLION DIVIDEND INCOME IN 1H24 DIVIDEND INCOME 2Q24 1H24 (GEL million) 55 GEL MILLION Retail (Pharmacy) 10.0 10.0 P&C Insurance 4.9 9.7 94 Beverages (beer business) - 4.6 44 BOG (buyback dividend) 21.6 25
Slide 38: Extension of debt maturities across private portfolio companies
EXTENSION OF DEBT MATURITIES ACROSS OUR PRIVATE PORTFOLIO COMPANIES % OF TOTAL PRIVATE PORTFOLIO DEBT BY REMAINING MATURITY IN 2Q24, OUR PORTFOLIO COMPANIES MADE SUBSTANTIAL PROGRESS IN ENHANCING THEIR OVERALL FINANCIAL STANDING - LEVERAGE PROFILES WERE IMPROVED SIGNIFICANTLY DUE TO THE EXTENSION OF
Slide 39: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 39
Slide 40: Aggregated revenue development across private portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP 6.0% Y-O-Y IN 2Q24 AND UP +7.3% 7.3% Y-O-Y IN 1H24 1,071 998 271 265 ➢ Aggregated revenue of large and investment +6.0% stage portfolio companies up 10.4% and 9.1% 94 y-o-y in 2Q24 and 1H24, respectively. 74 55
Slide 41: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION +17.5% AGGREGATED EBITDA UP 17.7% Y-O-Y IN 2Q24 AND UP 148 17.5% Y-O-Y IN 1H24 126 33 14 +17.7% 25 34 82 70 18 11 20 15 44 45 87 80 2Q23 2Q24 1H23 1H24 Other portfolio companies Other portfolio companies Investment stage portfolio co
Slide 42: Aggregated cash balance and net operating cash flow
AGGREGATED CASH BALANCE & NET OPERATING CASH FLOW DEVELOPMENT ACROSS PRIVATE PORTFOLIO TOTAL AGGREGATED NET OPERATING CASH FLOW TOTAL AGGREGATED CASH BALANCE OF PRIVATE BUSINESSES (GEL MILLION) (GEL MILLION) +2.1x 111 +17.6% 31-Dec-23 275 +3.7x 66 52 +27.3% 31-Mar-24 254 18 30-Jun-24 323 2Q23 2Q24 1
Slide 43: Portfolio value as of 30-Jun-24
PORTFOLIO VALUE AS OF 30-JUN-24 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 92% IS OF OUR PORTFOLIO 36% 4% 18% 11% 7% 7% 6% 3% 8% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 GBP 40.4 OPTION MULTIPLE: 12.4x 12.5x 11.5x 13.0x 9.3x BGEO VALUATION2 8.8x LTM P/E LTM EV/EBITDA3 EV/EBITDA4 LTM EV/E
Slide 44: Portfolio value development in 2Q24
PORTFOLIO VALUE DEVELOPMENT IN 2Q24 PORTFOLIO VALUE DOWN 12.1% Q-O-Q TO GEL 3.5 , BILLION IN 2Q24 ( ) ( ) , ( ) ( ) PRIVATE PORTFOLIO VALUE CREATION IN 2Q24 ( ) PRIVATE PORTFOLIO VALUE CREATION GEL MILLION GEL million LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE VALUE DOWN BY 16.4% DOWN B
Slide 45: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 45
Slide 46: Bank of Georgia overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ http://bankofgeorgiagroup.com/ INVESTMENT RATIONALE Market opportunity • The first entity from Georgia to be listed on the premium segment of the Main Market of the London Stock Exchange (LSE: BGEO) since February 2012. Banking
Slide 47: Bank of Georgia overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 40.4 Change 65 as of 30-Jun-24 2015 2016 2017 2018 2019 2020 2021 2022 2023 2Q23 2Q24 y-o-y 55 45 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9%
Slide 48: Water utility business valuation overview
Option valuation WATER UTILITY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW ➢ GCAP and the majority shareholder have put and call options (GEL MILLION) for the minority 20% equity interest in the water utility business GCAP’S PUT OPTION MAJORITY SHAREHOLDER’S CALL OPTION 8.25X 8.90X EV/EBI
Slide 49: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 418 15 5 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou › Continued growth of para-pharmacy share in total revenue
Slide 50: 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 Gross profit margin (%) Number of bills issued, million 24.5% 25.5% 25.5% 25.4% 26.0% 28.5% 28.7% 28.8% 30.5% 28.9% 29.9% 25.3 27.1 28.8 27.6 29.0 31.0
Slide 51: Retail (pharmacy) operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +3.6% 411 397 RETAIL (PHARMACY) +3.5% KEY DRIVERS 331 313 ▪ Total revenue growth in 2Q24 mainly reflects a 3.2% 207 +5.9% 200 y-o-y increase in retail revenues, driven by significant recent expansion of
Slide 52: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -6.8% +1.6% -1.7% -10.8% 9.7x , 8.8x ( ) ( ) ( ) Enter rise alue et chan e Enter rise alue et debt inc. inority E uity alue 31-Mar-24 30-Jun
Slide 53: Insurance business (P&C) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW MARKET SHARE 1Q24 (GROSS PREMIUMS WRITTEN) MARKET & Aldagi GROSS PREMIUMS WRITTEN1 (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia 700 (0.7% penetration in property an
Slide 54: Insurance business (P&C) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW (CONT’D) Distribution Mix (GPW %) | 1H24 COMBINED RATIO MTPL Channel +10.3 ppts +4.2 ppts +4.3 ppts 2% 89.5% 84.3% 88.5% Partnerships with 82.1% 81.5% 80.8% 79.2% 83.6% 87.9% Financial 73.9% 77.5% 72.6% 75.2% 75.4%
Slide 55: Insurance business (medical) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) OVERVIEW Largest medical insurer in the country with 33%1 market share Offering a variety of medical insurance products, with a wide distribution network to the Georgian population BUSINESSES MAJOR GROWTH DRIVERS Market
Slide 56: Insurance business (medical) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) OVERVIEW (CONT’D) NUMBER OF INSURED & RENEWAL RATE2 REVENUE (NET INSURANCE PREMIUMS EARNED) 74.3% 73.4% 76.9% 69.7% 77.5% 73.4% 78.0% 77.4% 81.8% 83.3% 78.3% 83.0% 82.7% 150.0 400 +63.8% +63.8% +22.0% 0.0% 300 283 283 1
Slide 57: Insurance business operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE PRE-TAX PROFIT DEVELOPMENT +33.6% 131 INSURANCE 98 +46.5% 64 KEY DRIVERS 76 +15.5% P&C Insurance GEL MILLION 45 ▪ The increase in insurance revenue is mainly 19.2 driven by the growth in the motor and credit life 52 +28.7% 16.6 insu
Slide 58: Insurance business valuation overview
Externally valued1 INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q +3.6% 391 378 12.4x 12.4x ( ) 96 88 289 296 E uity alue eratin ulti le chan e i idends E uity alue 31-Mar-24 30-Jun-24 ar 24 erformance aid un 24
Slide 59: Hospitals business overview
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW State healthcare spending, GEL millions Market share by number of beds, GEL millions 3,500 13% GCAP Hospitals 2,225 14% 14% 3,000 11% State 839 5% 10% 10% 10% 12% Aversi 813 5% 2,500 9% 9% 9% 9% 10% Geo Hospitals 779 5%
Slide 60: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 2Q24 1H24 BED OCCUPANCY RATE - LARGE AND SPECIALTY HOSPITALS Operating cash flow GEL 4.1m GEL 6.6m Average 3.0 5.1 4.9 5.2 4.8 5.3 4.9 250.0% length of stay 2.5 200.0% EBITDA to cash 29.7%
Slide 61: Hospitals business operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT -0.4% HOSPITALS 165 164 -12.1% KEY DRIVERS 60 53 -2.1% 29.6 ▪ 2Q24 revenue developments reflect the net impact of: 26.1 GEL MILLION o A 4.3% y-o-y increase in revenues of Large and -10.8% 8.6 85 83 Specialty H
Slide 62: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -11.1% +4.4% -17.6% -23.3% 13.8x 12.5x ( ) ( ) ( ) Enter rise alue et chan e Enter rise alue et debt inc. inority E uity alue 31-Mar-24 30-Jun-24 ar
Slide 63: Renewable energy business overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE ELECTRICITY CONSUMPTION ▪ Favorable supply-demand dynamics pushing the power prices up. ▪ Georgia is on track to harmonize the current energy market structure with EU directives, le
Slide 64: 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 June 2024 Generation, 35.8 34.1 36.1 20.8 19.9 21.9 91.8 76.8 37.2 35.6 57.5 27.5 39.3 42.7 134.0 105.8 GWh Gross Commissioned Ins
Slide 65: Renewable energy operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +26.3% RENEWABLE ENERGY 7.5 +17.6% 6.0 KEY DRIVERS 4.9 4.0 ▪ A y-o-y increase in the 2Q24 revenue and US$ MILLION 4.2 2.2 +39.4% EBITDA reflects the increase in electricity generation, driven by the resum
Slide 66: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 EQUITY FAIR VALUE COMPOSITION (US$ MILLION) AT 30-JUN-24 (US$ MILLION) Change q-o-q -7.8% -3.0% -11.4% 18 ( ) Total value US$ 88 ( ) 69 Enter rise alue et chan e in EV Enter rise alue et debt E uity alu
Slide 67: Education business overview
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW INDUSTRY INVESTMENT RATIONALE CURRENT OPERATIONAL METRICS AND TARGETS FOR 2025 ▪ Highly fragmented general education market with consolidation opportunity. ▪ Market with strong growth potential. Currently2 Tar
Slide 68: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Jun-24 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market Capacity utilization, 80.9% 12% CAGR 14-19 10% CAGR 20-23
Slide 69: Education business operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +29.2% EDUCATION 36.7 KEY DRIVERS GEL MILLION 28.4 ▪ A y-o-y increase in the 2Q24 revenue reflects: +15.3% +25.6% o The organic growth through strong intakes and a ramp-up of the utilisation; and o expansion of
Slide 70: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 LTM EV/EBITDA DEVELOPMENT4 (GEL MILLION) Change q-o-q -8.0% -23.4% -28.6% -24.2% -4.6% 16.2x 13.0x ( ) ( ) ( ) Enter rise et chan e Enter rise n estment et debt inority E uity alue 31-Mar-24 30-Jun-24 alue in
Slide 71: Clinics & diagnostics business overview
Private investment stage 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 10.0 7.8 4.4 8.0 5.8 15% 5.7 12.2% 3.
Slide 72: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (2Q24) DIAGNOSTICS (2Q24) 18 Outpatient diagnostic and treatment services in Tbilisi Market share by number of registered patients* c.197,000 3.4 Clinics and major regional cities
Slide 73: Clinics & diagnostics operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +23.8% 40.1 CLINICS & DIAGNOSTICS 32.4 10.8 +22.6% KEY DRIVERS 9.2 29.3 ▪ A y-o-y growth in the 2Q24 revenue and EBITDA 20.6 +61.9% GEL MILLION reflects: 16.8 23.2 5.5 o the increased demand for hi
Slide 74: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -5.9% +4.7% -9.6% -10.6% 10.6x 9.3x ( ) ( ) ( ) Enter rise alue et chan e Enter rise alue et debt inc. inority E uity alue 31-Mar-24 30-
Slide 75: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 75
Slide 76: Strong real GDP growth in 1H24, with inflation below target
STRONG REAL GDP GROWTH IN 1H24, WITH INFLATION BELOW TARGET GEORGIA’S ECONOMY CONTINUES TO EXPAND, WITH PRELIMINARY ECONOMIC GROWTH ANNUAL INFLATION BELOW THE 3% TARGET SINCE APRIL 2023, WITH JULY 2024 INFLATION AT 9.0% Y-O-Y IN 1H24 AT 1.8% Y-O-Y Headline Inflation Target End of Period Monetary Pol
Slide 77: Robust domestic economic activity driving higher-than-expected growth
ROBUST DOMESTIC ECONOMIC ACTIVITY IS DRIVING HIGHER–THAN–EXPECTED GROWTH LOANS GROWTH DECOMPOSITION BY SECTORS (ADJUSTED FOR FX) GENERAL GOVERNMENT FISCAL EXPENSES, GEL BLN 25% Legal Entities Households Total Loans Growth rate, % Y-o-Y Current Expenditures Capital Expenditures Total Expenditures Tot
Slide 78: Current account deficit at historically low levels
CURRENT ACCOUNT DEFICIT AT HISTORICALLY LOW LEVELS CAB NARROWED TO -5.0% OF GDP, SUPPORTED BY GROWTH IN THE TRANSFER AND SERVICES FOREIGN CURRENCY INFLOWS HAVE MODERATED BUT REMAIN ABOVE PRE-WAR LEVELS BALANCE Export of goods Money Transfers Tourism revenues Total FX Inflows Goods, net Services, net
Slide 79: Sovereign spread and GEL depreciation expectations
WHILE DEPRECIATION EXPECTATIONS ARE FADING, THE SOVEREIGN SPREAD CONTINUES TO REFLECT INCREASED VOLATILITY IN THE REGIONAL GEOPOLITICAL ENVIRONMENT WIDENED SOVEREIGN SPREAD REFLECTS RECENT GEOPOLITICAL VOLATILITY DESPITE RECENT DEPRECIATION, THE GEL HAS SINCE RECOVERED ITS VALUE, SHOWING ONLY O.2 %
Slide 80: Macro policy stance remains appropriate
MACRO POLICY STANCE REMAINS APPROPRIATE NET NBG INTERVENTIONS ON THE FX MARKET AND OFFICIAL RESERVE ASSETS THE OPERATING BALANCE SURGES DUE TO HIGHER-THAN-EXPECTED TAX REVENUE COLLECTION Net Interventions (LHS) Reserve Assets (RHS) 8000 600 6.0 Tax Revenues Current Expenses Capital Expenses Operatin
Slide 81: Macroeconomic wrap-up
STRONG GDP PERFORMACE DESPITE UNCERTAINTIES BELOW-TARGET INFLATION ROBUST EXTERNAL BALANCE SHEET MACROECONOMIC RECENT GEL DEPRECIATION PROVED TEMPORARY WRAP-UP MACROECONOMIC POLICY FRAMEWORK REMAINS APRROPRIATE 81
Slide 82: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 82
Slide 83: Our robust corporate governance framework
OUR ROBUST CORPORATE GOVERNANCE FRAMEWORK BOARD OF DIRECTORS COMPOSITION IRAKLI GILAURI, CHAIRMAN & CEO MASSIMO GESUA’SIVE SALVADORI Experience: Formerly BGEO Group CEO; more than 20 years INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Currently
Slide 84: GCAP's highly experienced management team
GCAP’S HIGHLY EXPERIENCED MANAGEMENT TEAM IRAKLI GILAURI, CHAIRMAN & CEO GIORGI KETILADZE, MANAGING DIRECTOR, HEAD OF INVESTMENTS Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as CFO of Bank Formerly Investment Officer at BGEO Group. Joined BGEO in 2017. Pr
Slide 85: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 85
Slide 86: Renewable energy business operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +33.6% RENEWABLE ENERGY 21 +26.2% 15 GEL MILLION 14 32 11 11 +90.0% 6 +47.6% 8 6 +30.9% -0.4% 15 10 10 5 5 10 10 8 2Q23 2Q24 1H23 1H24 2Q23 2Q24 1H23 1H24 PPA Non-PPA Total revenue KEY OPERATING HIGHLIGHT
Slide 87: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q24 EQUITY FAIR VALUE COMPOSITION AT 30-JUN-24 (GEL MILLION) (GEL MILLION) Change q-o-q -3.9% +1.2% -7.6% 52 ( ) Total value 246 ( ) 195 Enter rise alue et chan e in EV Enter rise alue et debt E uity alue O
Slide 88: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q24 & 1H24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 88
Slide 89: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 30 JUNE 2024 2024 2025 2026 2027-2036 Total (GEL MILLION) Large portfolio companies 55.5 134.9 106.8 235.2 532.4 Retail (Pharmacy)1 41.2 73.3 43.5 68.0 226.0 Insurance (P&C and Medical) - 3.0 6.5 19.9 29.4 Hospitals 14.3 58
Slide 90: Value creation in private portfolio | 2Q24
VALUE CREATION IN PRIVATE PORTFOLIO | 2Q24 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses (447.5) Performance buy-outs / exits and FX 2Q24 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG (251,645) Water Utility (7,000) Total Listed and Observable Portfolio Companies - - - (2
Slide 91: Value creation in private portfolio | 1H24
VALUE CREATION IN PRIVATE PORTFOLIO | 1H24 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses (140.6) Performance buy-outs / exits and FX 1H24 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 69,899 Water Utility (4,000) Total Listed and Observable Portfolio Companies - - - 65,89
Slide 92: NAV statement | 2Q24
NAV STATEMENT | 2Q24 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Mar-24 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Jun-24 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,543,052 (251,645) - - (21,593) -
Slide 93: NAV statement | 1H24
NAV STATEMENT | 1H24 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Dec-23 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Jun-24 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,225,847 69,899 - - (25,932) - -
Slide 94: Income statement | 2Q24
INCOME STATEMENT | 2Q24 Income statement GEL ‘000, unless otherwise noted 2Q24 2Q23 Change Dividend income 14,914 81,316 -81.7% Buyback dividend 21,593 40,345 -46.5% Interest income 1,681 5,015 -66.5% Realised / unrealised (loss)/gain on liquid funds (409) 654 NMF Interest expense (8,970) (13,000) -
Slide 95: Income statement | 1H24
INCOME STATEMENT | 1H24 Income statement GEL ‘000, unless otherwise noted 1H24 1H23 Change Dividend income 24,375 86,503 -71.8% Buyback dividend 25,932 61,571 -57.9% Interest income 3,320 9,991 -66.8% Realised / unrealised (loss)/gain on liquid funds (961) 1,085 NMF Interest expense (17,579) (26,751
Slide 96: Valuation peer group
VALUATION PEER GROUP RETAIL P&C MEDICAL HOSPITALS (PHARMACY) INSURANCE INSURANCE • NEUCA S.A. | Poland • Dhipaya Insurance | Thailand • Powszechny Zaklad Ubezpieczen SA | • Medicover AB | Sweden Poland • Sopharma Trading AD | Bulgaria • Zavarovalnica Triglav | Slovenia • EMC Instytut Medyczny SAEMC
Slide 97: 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 98: Company information
COMPANY INFORMATION Georgia Capital PLC Registered Address Central Square, 29 Wellington Street, Leeds, LS1 4DL London W1K 5DB United Kingdom www.georgiacapital.ge Registered under number 10852406 in England and Wales Stock Listing London Stock E chan e PLC’s ain arket for listed securities Ticker: