Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2023 Earnings Presentation
97 slides from Georgia Capital's earnings presentation, May 2023
Slide 1: Investor Presentation 1Q23 Results
INVESTOR PRESENTATION 1Q23 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 31-Mar-23
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 31-MAR-23 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 8.2% Rank Shareholder name Ownership 4 1. Management & Management Trust 13.30% 2. Gemsstock Ltd 10.67% Management 3 UK 1 13.3% 32.4% 3. Allan Gray Ltd 6.63% 4. Coeli Frontier Mar
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 31-MAR-231 PORTFOLIO VALUE BREAKDOWN AT 31-MAR-23 30.1% Portfolio value Net debt Listed & Observable 3,267 GEL million 386 GEL million 69.9% Private US$ 1,276 million US$ 151 million STARTING FROM 2024, PLATFORM COSTS ARE TARGETED AT MAXIMUM 0.75% OF NAV NAV
Slide 5: Our portfolio overview as at 31-Mar-23
OUR PORTFOLIO OVERVIEW AS AT 31-MAR-23 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 985m Value: GEL 2,282m 30% of the total portfolio value 70% of the total portfolio value LARGE PORTFOLIO COMPANIES BANK OF RETAIL HOSPITALS INSURANCE GEORGIA (PHARMACY) (P&C AND MEDICAL) Value: GEL 83
Slide 6: Strong NAV per share growth
STRONG NAV PER SHARE GROWTH NAV PER SHARE (GEL) STRONG NAV PER SHARE GROWTH WITH 10.5% CAGR +10.5% CAGR OVER THE LAST 4 YEARS 67.7 THE OUTLOOK IS EVEN 65.6 63.0 STRONGER ON THE BACK OF THE 46.8 48.1 MEGA GROWTH OPPORTUNITIES 44.3 ACROSS OUR PORTFOLIO Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Mar-23 6
Slide 7: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 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 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
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 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
Slide 16: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW US$ MILLION 31-DEC-22 CHANGE 31-MAR-23 NCC REPRESENTS AN AGGREGATED Cash and liquid funds 152.4 -11.8% 134.5 VIEW OF ALL CONFIRMED, AGREED Loans issued 9.9 39.8% 13.9 AND EXPECTED CAPITAL OUTFLOWS Gross debt (303.3) -1.4% (299.2) AT THE GCAP HOLDCO LEVEL Net deb
Slide 17: NCC ratio development overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC RATIO DOWN BY 1.4 PPTS TO 19.7% IN 1Q23 385.8 365.9 345.7 Subsequent to 1Q23, we have received an additional GEL 26.3 million from participating in the BoG’s buybacks with 295,000 BoG shares sold. This coupled 42.5% 39.8% 250
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 31-DEC-22 CHANGE 31-Mar-23 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 1.6x -0.2x 1.4x Up to 1.5x 2.7x AS OF 31-MAR-23
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 3.3x ➢ Despite headwinds from COVID-19, 3.0x leverage profile across our private portfolio GEL MILLION companies improved over the last 2 years. 189 1,039 200 1,062 225 1,02
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 2.7x 2.6x 2.6x 2.5x 2.6x 2.4x ➢ LTM EBITDA up 10.5% as at Mar-23 from Dec-19; 624 GEL MILLION ➢ Excluding the minority buyout agreement at 603 623
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 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
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 healthcare businesses, contri
Slide 25: Our recent key ESG developments
OUR RECENT KEY ESG DEVELOPMENTS 2022 IN BRIEF 01 02 03 04 05 ENHANCED ESG OBTAINED RENEWED ENHANCED ESG DELIVERED ON THE COMMITTED TO THE TRANSPARENCY MSCI ESG RATING EXPERTISE WITH UN STRATEGIC PRIORITY NET-ZERO INITIATIVE GLOBAL COMPACT’S GUIDANCE ▪ To further enhance the ESG ▪ MSCI ESG rating rei
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 GCAP HoldCo 8, 10, 13 5 Retail (Pharmacy) 3, 8, 12 5, 11 Hospitals 3, 8, 12 5, 11 Insurance 3, 8,
Slide 27: 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 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
Slide 28: 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 29: 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 30: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 30
Slide 31: Recent developments
RECENT DEVELOPMENTS KEY ACTIVITIES IN 1Q23 01 02 03 04 05 ROBUST OPERATIONAL TRANSFER TO LSE SALE OF HOSPITALITY EXPANSION OF THE SHARE AND FINANCIAL STANDARD LISTING BUSINESS ASSETS EDUCATION BUSINESS BUYBACKS PERFORMANCE IN 1Q23 ➢ NAV per share (GEL) up 3.3% ➢ Successful completion of the ➢ Sale o
Slide 32: Completion of the transfer to LSE Standard Listing
COMPLETION OF THE TRANSFER TO LSE STANDARD LISTING FOLLOWING THE TRANSFER, GCAP CONTINUES FOLLOWING THE APPROVAL FROM A 99.99% OF THE VOTING SHAREHOLDERS, TO MAINTAIN THE HIGHEST LEVELS OF: THE TRANSFER TO LSE STANDARD LISTING BECAME EFFECTIVE ON 13 APRIL 2023 CORPORATE GOVERNANCE THE TRANSFER IS AN
Slide 33: Sale of hospitality business assets
SALE OF HOSPITALITY BUSINESS ASSETS THE PROCEEDS FROM THE TRANSACTION WERE FULLY UTILISED FOR DELEVERAGING THE HOSPITALITY BUSINESS BALANCE SHEET ➢ In 1Q23, our hospitality business completed the sale of two operational hotels and a vacant land plot in Tbilisi for a total TRANSACTION HIGHTLIGHTS NET
Slide 34: Expansion of the education business
EXPANSION OF THE EDUCATION BUSINESS TOTAL LEARNER CAPACITY DEVELOPMENT OVERVIEW WE ARE SCALING UP OUR HIGH-QUALITY K-12 EDUCATION IN GEORGIA, IN LINE WITH +21.2% OUR CAPITAL ALLOCATION PROGRAMME 6,870 1,150 5,670 RECENT INVESTMENT PROJECTS: TOTAL CAPACITY AS AT 31-MAR-23 1,020 ✓ Acquisition of a new
Slide 35: Commencement of US$ 10 million share buyback and cancellation programme
COMMENCEMENT OF US$ 10 MILLION SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMME 665,921 SHARES (1.5% OF ISSUED CAPITAL) HAVE BEEN REPURCHASED UNDER THE BUYBACK PROGRAMME AS OF 5-MAY-23 Remaining funds earmarked for buybacks 3.5 10 6.5 Repurchased as of
Slide 36: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 36
Slide 37: NAV per share (GEL) movement in 1Q23
NAV PER SHARE (GEL) MOVEMENT IN 1Q23 NAV PER SHARE (GEL) +2.0% +0.7% +1.1% -0.4% -0.2% +3.3% +4.3% +7.6% UP 3.3% IN 1Q23 ▪ NAV per share (GBP) up 6.4% in 1Q23. ▪ As of 5-May-23, NAV per share (GEL) up 7.6% and up 12.3% in GBP terms from 31- Dec-22, reflecting: (a) GCAP’s share buybacks, (b) particip
Slide 38: Portfolio value development in 1Q23
PORTFOLIO VALUE DEVELOPMENT IN 1Q23 PORTFOLIO VALUE UP 2.2% TO GEL 3.3 BILLION IN 1Q23 LISTED AND OBSERVABLE PRIVATE PORTFOLIO VALUE GEL MILLION PORTFOLIO VALUE1 UP BY GEL 69 MILLION (3.1%) Georgia Capital PLC | 1. A 5.6% growth in BoG’s share price in 1Q23 was offset by GEL 21.2 million buyback div
Slide 39: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) • LIQUIDITY DOWN BY 11.8% IN US$ TERMS IN 1Q23, MAINLY REFLECTING: A) GEL 23.9 MILLION COUPON 300 300 365 365 300 300 PAYMENT, B) GEL 19.3 MILLION CASH OUTFLOW FOR BUYBACKS, AND C) GEL 17.0 MILLION CAPITAL CASH R
Slide 40: Dividend income outlook
DIVIDEND INCOME OUTLOOK DIVIDEND INCOME FROM PORTFOLIO COMPANIES DIVIDEND INCOME 1.6 2.1 1.21 PER SHARE (GEL) DIVIDEND INCOME 1Q23 YTD1 (GEL million) Buyback dividend 21.2 47.5 Regular dividends from Renewable Energy 5.2 5.2 +26.2% TOTAL 26.4 52.7 GEL MILLION 94 * GEL 98-108 GEL 150-160 MILLION DIVI
Slide 41: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 41
Slide 42: Aggregated revenue development across private portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP 10.0% Y-O-Y IN 1Q23 AND UP BY 26.5% FROM 1Q21 +26.5% +2.3% +10.0% 1,902 1,945 ▪ Aggregated revenue excluding Hospitals and Clinics & Diagnostics, which are 484 529 completing their gradual organic return to 479
Slide 43: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED EBITDA UP 0.9% Y-O-Y IN 1Q23 AND UP BY +0.2% 0.6% FROM 1Q21 243 244 +0.6% ▪ Aggregated EBITDA excluding Hospitals and 35 37 Clinics & Diagnostics, is up 12.0% y-o-y in 1Q23. +0.9% 56 53 54 54 55 7 1 4 13 10 11 37 40 40 153
Slide 44: Aggregated cash balance and 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 45: Portfolio value as of 31-Mar-23
PORTFOLIO VALUE AS OF 31-MAR-23 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 91% IS OF OUR PORTFOLIO 25% 5% 23% 13% 9% 8% 5% 3% 9% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 MULTIPLE: GBP 27.50 OPTION 9.3x 12.8x 10.4x – 8.8x 12.6x 16.2x 21.0x6 BGEO VALUATION2 LTM EV/EBITDA3 LTM EV/EBITDA3 LT
Slide 46: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 46
Slide 47: Bank of Georgia overview
Listed Portfolio BANK OF GEORGIA OVERVIEW 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 sector assets, loans and depos
Slide 48: Bank of Georgia overview: stock price and financial metrics
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 27.50 Change 40 2015 2016 2017 2018 2019 2020 2021 2022 1Q22 1Q23 as of 31-Mar-23 y-o-y 35 30 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5.4% 5.3% 6.4% +1.1 ppts 25 20 NPL
Slide 49: 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 50: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 378 9 1 1 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou Children’s apparel – Carter’s › c.400 pharmacies in 5 yea
Slide 51: 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% 29.3% 29.7% 29.9% 25.3 27.1 28.8 27.6 29.0 31.0 7.6 7.6 Margin enh
Slide 52: Retail (pharmacy) operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +14.1% RETAIL (PHARMACY) -0.3% KEY DRIVERS ▪ 1Q23 revenue and EBITDA were largely flat, GEL MILLION notwithstanding a) a significant decrease in +56.7% product prices, due to GEL’s appreciation 199 198
Slide 53: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +1.8% -7.3% +1.9% +3.6% 9.1x 9.3x 31-Dec-22 31-Mar-23 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 GEL million, unless
Slide 54: 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 increased to manage the COVID - Vienna Insurance Grou
Slide 55: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 1Q22 1Q23 Change y-o-y BED OCCUPANCY RATE Operating cash Average 3 5.4 5.2 5.6 5.7 5.1 5.7 5.2 250.0% GEL 10.6 GEL (3.0)m NMF flow length of stay 2.5 200.0% 2 -8.0ppts 150.0% EBITDA to cash
Slide 56: Hospitals operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +4.2% -4.4% HOSPITALS KEY DRIVERS ▪ 1Q23 performance of the business reflects: ➢ the temporary closure of Iashvili Hospital GEL MILLION due to the mandatory renovation works (the works commenced in October 2022
Slide 57: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +1.5% +8.3% 0.0% -1.4% 12.8x 12.2x 31-Dec-22 31-Mar-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise
Slide 58: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 MARKET SHARE FY22 (GROSS PREMIUMS WRITTEN) (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia (0.8% penetration in property and casu
Slide 59: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | 1Q23 COMBINED RATIO MTPL Channel +3.1ppts 4% 82.1% 81.5% 82.5% 85.6% 77.5% 80.8% 79.7% 73.9% 72.6% 75.2% 75.4% Partnerships with Financial Institutions Direct Sales & 41.6% 44.0% 48.9% 51.2
Slide 60: Insurance operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE NET INCOME DEVELOPMENT +30.6% +19.3% INSURANCE 47 GEL MILLION KEY DRIVERS 39 P&C Insurance 36 22 ▪ The increase in insurance revenue is mainly driven by the growth in the credit life, motor 18 +21.6% and border MTPL insurance lines.
Slide 61: P&C insurance business valuation overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +1.9% 10.6x 10.4x 31-Dec-22 31-Mar-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Mar-23 31-Dec-22 Change
Slide 62: Renewable energy business overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE ELECTRICITY CONSUMPTION ▪ Growth in electricity consumption has been ~3.3x more in TWhs than growth in electricity supply since 2010, resulting in increased deficit. 20.0 ▪ 21.5% of
Slide 63: 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 | 31 MARCH 2023 Generation, 1.5 1.6 6.7 13.2 20.8 19.1 28.9 33.9 GWh Gross Commissioned Installed capacity PPA PPA tariff, Generation i
Slide 64: Renewable energy operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT RENEWABLE ENERGY -7.2% KEY DRIVERS • A y-o-y decrease in revenue and EBITDA in -12.8% 1Q23 reflect the net impact of: US$ MILLION ➢ A 49.7% y-o-y decrease in electricity -17.9% generation at Hydrolea HPPs
Slide 65: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 EQUITY FAIR VALUE COMPOSITION AT 31-MAR-23 (US$ MILLION) (US$ MILLION) Change q-o-q +9.6% +4.6% +14.0% 20 Total value US$ 95 75 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBI
Slide 66: 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 67: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 31-Mar-23 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market COVID impact Capacity utilization, 65.7% COVID impact 0.5%
Slide 68: Education operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +87.5% EDUCATION +29.0% KEY DRIVERS 14 GEL MILLION ▪ Increase in revenues reflect strong intakes and a ramp-up of utilization. 11 ▪ EBITDA margin down by 1.5ppts at 38.5% +95.1% y-o-y in 1Q23, reflecting increas
Slide 69: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +1.3% +58.4% +9.7% -0.3% +6.6% 16.9x 16.2x 4 31-Dec-22 31-Mar-23 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Mar-23 31
Slide 70: 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 10.00 3.9 3.9 Georgia has the lowest
Slide 71: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (1Q23) DIAGNOSTICS (1Q23) 19 17 Market share by number of registered patients* c.207,000 3.0 Community Clinics Polyclinics Number of patients served Average number of tests per Out
Slide 72: Clinics & diagnostics operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT +3.0% CLINICS & DIAGNOSTICS KEY DRIVERS -21.7% ▪ Our clinics and diagnostics business’s 28 GEL MILLION -38.9% decreased revenue and EBITDA were due to 21 21 the significantly reduced number of COVI
Slide 73: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT2 (GEL MILLION) (incl. IFRS 16) Change q-o-q +0.5% +5.9% -4.6% -2.4% 21.0x 16.5x 31-Dec-22 31-Mar-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless no
Slide 74: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 74
Slide 75: Real GDP up by 7.2% in 1Q23
REAL GDP UP BY 7.2% IN 1Q23 PRELIMINARY ECONOMIC GROWTH STANDING AT 7.2% Y-O-Y IN 1Q23, FOLLOWING UP ON TWO YEARS OF DOUBLE-DIGIT EXPANSION (10.5% AND 10.1% IN 2021-2022 RESPECTIVELY) ECONOMIC GROWTH REMAINS STRONG 50% 45% 40% 30% 26% ➢ Strong external demand supplemented by the migration effect, 19
Slide 76: Georgia ranks among top performers in the world
GEORGIA RANKS AMONG TOP 10 PERFORMERS IN THE WORLD WITH RESPECT TO VARIOUS ECONOMIC GROWTH INDICATORS RECENT AND PROJECTED ECONOMIC GROWTH INDICATORS IN GEORGIA (IMF) 8th place 8th place 9th place 3rd place 9th place 9th place among all among all among all among countries among all among all countri
Slide 77: Georgian Lari now above pre-pandemic levels
GEORGIAN LARI – NOW ABOVE PRE-PANDEMIC LEVELS APPRECIATING SINCE MID-2021, BRIEFLY INTERRUPTED AFTER THE RUSSIAN INVASION OF UKRAINE, GEL HAS NOW STRENGTHENED TO ABOVE PRE-PANDEMIC LEVELS AGAINST USD GEL APPRECIATION DRIVERS 3.8 Series1 3.46 3.40 3.3 ➢ Record-high remittance inflows, surging by 130%
Slide 78: Current account deficit at a record low of 4.1% of GDP in 2022
CURRENT ACCOUNT DEFICIT AT A RECORD LOW OF 4.1% OF GDP IN 2022, ON THE BACK OF A RECORD-HIGH 5.7% SURPLUS IN 3Q22 CURRENT ACCOUNT COMPONENTS AND FDI INFLOWS (% OF NOMINAL GDP) 28% Goods, net Services, net Investment income, net EXTERNAL INFLOWS AT RECORD-HIGH LEVELS Current transfers, net Current ac
Slide 79: Inflation below the target level in April 2023
INFLATION BELOW THE TARGET LEVEL IN APRIL 2023 INFLATION Y-O-Y VS. INFLATION TARGET Headline Inflation Core Inflation Target Monetary Policy Rate SIGNIFICANT DISINFLATION UNDERWAY 16 12 11.00 ➢ Annual inflation decelerated to 2.7% in April 2023, below the 3% 8 target, decelerating significantly comp
Slide 80: Public debt shrinking and fiscal deficit falling
PRELIMINARY ESTIMATES SHOW PUBLIC DEBT SHRINKING BELOW PRE- COVID LEVELS AND THE FISCAL DEFICIT FALLING UNDER 3% OF GDP IN 2022 GENERAL GOVERNMENT DEBT (% OF GDP) General Government Debt, External (% of GDP) General Government Debt, Total (% of GDP) FISCAL SUPPORT HAS CONTINUED MODERATING 60.1% 60%
Slide 81: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 81
Slide 82: 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 83: Georgia Capital's highly experienced management team
GEORGIA CAPITAL’S HIGHLY EXPERIENCED MANAGEMENT TEAM Irakli Gilauri, Chairman & CEO Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as CFO of Bank Ia Gabunia, Chief Strategy Officer of Georgia in 2004 and was appointed as Chairman of the Bank in September 201
Slide 84: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 84
Slide 85: Renewable energy operating performance overview (GEL)
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -7.5% -6.9% RENEWABLE ENERGY 44 41 1 NMF 33 12 31 +31.2% 16 GEL MILLION -28.0% -36.5% -26.6% -36.8% 7 6 5 -20.6% 4 4 - 2 7 31 25 6 5 1Q21 1Q22 1Q23 LTM LTM 1Q21 1Q22 1Q23 LTM LTM 31-Mar-22 31-Mar-23 31-Ma
Slide 86: Renewable energy business valuation overview (GEL)
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 EQUITY FAIR VALUE COMPOSITION AT 31-MAR-23 (GEL MILLION) (GEL MILLION) Change q-o-q +3.9% -0.9% +8.0% 51 Total value 243 192 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 87: Medical insurance business overview
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW Largest medical insurer in the country with 19%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 88: 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) 300 250 400 78.0% 82.7% 95.0% 200 74.3% 73.4% 76.9% 77.5% 73.4% 77.4% 69.7% 67.7% GEL million 75.0% 300 +7.4% 150 234 236 Thousand
Slide 89: Medical insurance business valuation overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT2 (GEL MILLION) Change q-o-q +9.3% +13.0% +10.4% 10.6x 8.8x 31-Dec-22 31-Mar-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA No No No GEL million, unless noted otherwise
Slide 90: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 90
Slide 91: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 31 MARCH 2023 (GEL MILLION) 2023 2024 2025 2026+ Total Large portfolio companies 101.7 99.9 37.6 86.4 325.6 Retail (pharmacy) 73.9 17.0 15.6 25.9 132.4 Hospitals 27.8 82.9 22.0 60.5 193.2 Medical Insurance - - - - - Investm
Slide 92: Value creation in private portfolio 1Q23
VALUE CREATION IN PRIVATE PORTFOLIO | 1Q23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 76.9 Performance buy-outs / exits and FX 4Q22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 20,839 Water Utility - GEL MILLION Total Listed and Observable Portfolio Companies - - - 20
Slide 93: NAV statement 1Q23
NAV STATEMENT | 1Q23 1.Value 2a. 3.Operating 4. Liquidity GEL thousand unless otherwise noted 31-Dec-22 2b. Buybacks 2c. Dividends Management/ FX / 31-Mar-23 Change % Creation Investments Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 830,463 20,839 - - (21,225) - - 8
Slide 94: Income statement 1Q23
INCOME STATEMENT | 1Q23 Income statement GEL ‘000, unless otherwise noted 1Q23 1Q22 Change Dividend income 5,187 2,195 NMF Buyback dividend 21,225 - NMF Interest income 4,977 8,785 -43.3% Realised / unrealised gain/(loss) on liquid funds 428 (10,239) NMF Interest expense (13,751) (19,853) -30.7% Gro
Slide 95: 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
Slide 96: 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 97: 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