Georgia Capital PLC · LSE:CGEO
Georgia Capital — FY2023 Earnings Presentation
95 slides from Georgia Capital's earnings presentation, February 2024
Slide 1: Investor Presentation 4Q23 & FY23 Results
INVESTOR PRESENTATION 4Q23 & FY23 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: GCAP Shareholders at 31-Dec-23
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 31-DEC-23 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS 4 Other Rank Shareholder name Ownership 7.3% 3 1. Management & Management Trust 14.35% 1 2. Gemsstock Ltd 10.94% UK Management 27.4% 14.4% 3 3. Allan Gray Ltd 6.88% 4. Lazard Asset Man
Slide 4: Key Figures at a Glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 31-DEC-231 PORTFOLIO VALUE BREAKDOWN AT 31-DEC-23 38% Listed & Observable Portfolio value Net debt 3,672 GEL million 297 GEL million 62% Private US$ 1,365 million US$ 110 million STARTING FROM 2024, PLATFORM COSTS NAV NAV per share ARE TARGETED AT MAXIMUM 0.
Slide 5: Our Portfolio Overview as at 31-Dec-23
OUR PORTFOLIO OVERVIEW AS AT 31-DEC-23 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,385m Value: GEL 2,287m 38% of the total portfolio value 62% of the total portfolio value LARGE PORTFOLIO COMPANIES BANK OF RETAIL HOSPITALS INSURANCE GEORGIA (PHARMACY) (P&C AND MEDICAL) Value: GEL
Slide 6: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 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 4Q23 & FY23 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: 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 12: 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 13: 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 14: 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 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 15: Net Capital Commitment (NCC) Overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Change Change US$ Million 31-Dec-22 30-Sep-23 31-Dec-23 (y-o-y) (q-o-q) NCC RATIO IMPROVED BY 0.3 PPTS Cash and liquid funds 152.4 -73.7% 37.5 7.1% 40.1 Q-O-Q AND 5.5 PPTS Y-O-Y TO Loans issued 9.9 -65.5% 3.3 3.0% 3.4 15.6% AS AT 31-DEC-23 Gross debt (303.3) -49
Slide 16: 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% We are targeting to reduce the balance of “net 39.8% 250.1 debt and guarantees issued” clos
Slide 17: 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 ppo Buyb 360o rtunity MEANINGFUL TACTICAL CASH ANALYSIS BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY Sal e o p p o r t u
Slide 18: Deleveraging Across Our Private Portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 30-SEP-23 CHANGE 31-DEC-23 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 2.3x -0.1x 2.2x Up to 1.5x 3.1x AS OF 31-DEC-23
Slide 19: 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 3.4x 3.5x 3.3x 3.3x 3.2x ➢ Despite headwinds from COVID-19, leverage 3.0x profile across our private portfolio companies improved over the last 4 years. GEL MILLION ➢ LTM EBITDA
Slide 20: 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 3.1x 3.1x 2.6x 2.8x 2.7x 2.8x 2.6x 2.6x 2.5x 2.6x 2.4x 3.0x 2.0x GEL MILLION 1.0x 8 8 9 89 8 124 0.0x 131 92 93 92 -1.0x -2.0x -3.0x -4.0x 184 186 197 224 2
Slide 21: 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 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 22: 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 22
Slide 23: 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 24: 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 25: 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 26: 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 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 27: Our Strategic Priorities
DELEVERAGING GCAP HOLDCO BY BRINGING DOWN 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 “OTHER” PORTFOLI
Slide 28: 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 29: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 29
Slide 30: Key Developments in 4Q23
1 NAV per share (GEL) up 7.7% q-o-q to GEL 82.94 (GBP 24.23), reflecting strong value creation across our portfolio companies. NAV per share (GEL) was up 26.5% y-o-y in FY23 2 NCC ratio improved by 0.3 ppts q-o-q to 15.6% as at 31-Dec-23 (a 5.5 ppts improvement y-o-y), despite the launch of the US$
Slide 31: 2023 Lookback
2023 LOOKBACK 01 02 03 04 05 06 TRANSFER TO LSE ISSUANCE OF US$ SHARE BUYBACK BUYOUT OF THE SALE OF EXPANSION OF STANDARD LISTING 150 MILLION PROGRAMMES MINORITY HOSPITALITY THE EDUCATION SUSTAINABILITY- SHAREHOLDERS IN BUSINESS ASSETS BUSINESS LINKED BOND RETAIL (PHARMACY) Following the approval of
Slide 32: Proposed Acquisition of Ameriabank CJSC by Bank of Georgia Group
PROPOSED ACQUISITION OF AMERIABANK CJSC BY BANK OF GEORGIA GROUP PLC KEY TERMS TRANSACTION PRICE VALUATION HIGHLIGHTS NET ASSET VALUE P/E 303.6 0.65x 2.6x US$ MILLION AS AT 31 OCTOBER 2023 AS AT 2023 The transaction is subject to shareholder and regulatory approvals and is expected to close in 1Q24.
Slide 33: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 33
Slide 34: NAV per Share (GEL) Movement in 4Q23
NAV PER SHARE (GEL) MOVEMENT IN 4Q23 +5.1% +1.9% +0.9% -0.3% +0.1% +7.7% NAV PER SHARE (GEL) UP 7.7% Q-O-Q TO 82.94 ▪ NAV per share (GEL) performance in 4Q23 mainly reflects the strong value creation across our portfolio companies, supported by the accretive impact of share buybacks. ▪ In GBP terms,
Slide 35: Portfolio Value Development in 4Q23
PORTFOLIO VALUE DEVELOPMENT IN 4Q23 PORTFOLIO VALUE UP 5.5% TO GEL 3.7 BILLION IN 4Q23 PRIVATE PORTFOLIO VALUE CREATION IN 4Q23 LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE PRIVATE PORTFOLIO VALUE CREATION VALUE UP BY 10.7% UP BY 2.7% GEL MILLION GEL million Insurance (P&C & Medical) 42.4
Slide 36: Liquidity Outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) *LIQUIDITY UP BY 7.1% Q-O-Q IN 4Q23, REFLECTING 300 300 365 365 300 150 150 THE NET EFFECT OF DIVIDEND INFLOWS AND SHARE BUYBACKS DURING THE QUARTER Cash receipt from the Cancellation of US$ 65 **LIQUIDITY DOWN B
Slide 37: Dividend Income Outlook
DIVIDEND INCOME OUTLOOK CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES GEL 236 MILLION DIVIDEND INCOME IN FY23 DIVIDENDS INCOME RECURRING ONE-OFF TOTAL +2.5x (GEL million) BOG 124.5 29.4 153.9 236 Of which, cash dividends 80.5 - 80.5 GEL MILLION Of which, buyback dividends 44.0 29.4 73.4 73 Retail (P
Slide 38: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 38
Slide 39: Aggregated Revenue Development Across Private Portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP 7.9% AND 9.1% Y-O-Y IN 4Q23 +9.1% AND FY23, RESPECTIVELY 2,074 1,901 +7.9% 573 484 542 502 155 141 140 134 44 35 334 357 1,275 1,346 4Q22 4Q23 FY22 FY23 Other portfolio companies Other portfolio companies Inves
Slide 40: Aggregated EBITDA Development Across Private Portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION +1.8% AGGREGATED EBITDA DOWN 6.1% Y-O-Y IN 4Q23 AND UP 1.8% Y-O-Y IN FY23 243 248 35 44 ➢ 4Q23 and FY23 performance reflects a -6.1% 52 55 number of regulatory changes, particularly within the healthcare sector, which in the short-te
Slide 41: Aggregated Cash Balance & 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) -34.3% 206 -11.5% 31-Dec-22 310 -33.2% 135 +4.9% 53 30-Sep-23 262 35 31-Dec-23 275 4Q22 4Q23
Slide 42: Portfolio Value as of 31-Dec-23
PORTFOLIO VALUE AS OF 31-DEC-23 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 92% IS OF OUR PORTFOLIO 33% 4% 19% 10% 9% 7% 5% 3% 8% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 GBP 39.75 OPTION MULTIPLE: 13.0x-11.0x 13.8x 12.6x 16.7x 11.7x BGEO VALUATION2 9.7x LTM P/E4 LTM EV/EBITDA3 EV/EBITDA5
Slide 43: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 43
Slide 44: 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 45: Bank of Georgia Overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 39.8 Change 40.0 as of 31-Dec-23 2015 2016 2017 2018 2019 2020 2021 2022 2023 y-o-y 35.0 30.0 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5.4% 6.5% +1.1 ppts 25.0 20.0 NPL
Slide 46: 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 47: Retail (Pharmacy) Business Overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 412 14 3 4 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou Children’s apparel – Carter’s › Continued growth of para
Slide 48: 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% 28.7% 28.3% 25.3 27.1 28.8 27.6 29.0 31.0 31.3 8.5 8.2
Slide 49: Retail (Pharmacy) Operating Performance Overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +4.3% KEY DRIVERS 824 790 +0.5% ▪ The y-o-y increase in revenues reflects: o Increased sales of higher-margin para-pharmacy GEL MILLION +6.9% products o the expansion of the pharmacy c
Slide 50: Retail (Pharmacy) Business Valuation Overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +3.7% +1.0% -4.6% +5.1% 9.7x 9.1x 30-Sep-23 31-Dec-23 VALUATION HIGHLIGHTS1 Y-O-Y PROGRESS ADJUSTED NET DEBT TO EBITDA2 (excl. IFRS 16) GEL
Slide 51: 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 52: Hospitals Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 4Q23 FY23 BED OCCUPANCY RATE - LARGE AND SPECIALTY HOSPITALS Operating cash flow GEL (3.7)m GEL 10.6m Average length of stay 3.0 5.1 4.9 5.0 4.7 250.0% Change y-o-y NMF -66.5% 2.5 200.0% EB
Slide 53: Hospitals Operating Performance Overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +0.2% HOSPITALS 315 315 -18.7% 57 KEY DRIVERS 116 111 ▪ To address the oversupply of beds and 46 GEL MILLION enhance the quality of the healthcare industry 21 in Georgia, the government introduced new -1.4% 12
Slide 54: Hospitals Business Valuation Overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW 13.8x VALUE DEVELOPMENT OVERVIEW (GEL MILLION) IMPLIED LTM EV/EBITDA OF THE HOSPITALS BUSINESS VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA3 (excl. IFRS 16) GEL million, unless noted otherwise 31-Dec-232 30-Sep-232 31-Dec-222 5.3x4 4.4x Enterprise
Slide 55: P&C Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET SHARE 9M23 (GROSS PREMIUMS WRITTEN) MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia (0.7% penetration in property and casu
Slide 56: P&C Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | FY23 COMBINED RATIO MTPL Channel +10.3ppts +10.7ppts 3% 89.5% 89.0% Partnerships with 77.5% 82.1% 81.5% 80.8% 79.2% 78.3% 73.9% 72.6% 75.2% 75.4% Financial Institutions 41.6% 44.0% 53.8% 47
Slide 57: Insurance Operating Performance Overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE NET INCOME DEVELOPMENT +21.4% 208 +3.1% INSURANCE 172 25 26 KEY DRIVERS 91 P&C Insurance 3 7 75 GEL MILLION ▪ The increase in insurance revenue is mainly +22.5% driven by the growth in the motor and credit life +3.7% insurance lines
Slide 58: P&C Insurance Business Valuation Overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q +6.6% 13.0x 11.8x 30-Sep-23 31-Dec-23 VALUATION HIGHLIGHTS1 Y-O-Y PROGRESS NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Dec-23 3
Slide 59: 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 ~3.0x more in TWhs than growth in electricity supply since 2010, resulting in increased deficit. 20.0 ▪ 22.7% of
Slide 60: 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 DECEMBER 2023 Generation, 8.7 10.5 22.3 13.9 19.8 22.8 50.8 47.1 99.7 104.4 68.3 76.6 33.9 86.0 87.3 254.0 268.3 GWh Gross Commiss
Slide 61: Renewable Energy Operating Performance Overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -0.9% RENEWABLE ENERGY -7.1% 15 14 11 KEY DRIVERS 10 +5.3% ▪ A y-o-y increase in the 4Q23 revenue and EBITDA reflect the net impact of: US$ MILLION 6 6 +4.7% o a 7.8% y-o-y increase in electricity +6.6% g
Slide 62: Renewable Energy Business Valuation Overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 EQUITY FAIR VALUE COMPOSITION (US$ MILLION) AT 31-DEC-23 (US$ MILLION) Change q-o-q +0.3% -1.6% +1.8% 21 Total value US$ 99 78 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 Y-O-Y PROGRESS N
Slide 63: 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. Currently Targ
Slide 64: Education Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 31-Dec-23 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market Capacity utilization, 80.2% 12% CAGR 14-19 10% CAGR 20-23
Slide 65: Education Operating Performance Overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT EDUCATION +30.3% +6.0% 55 KEY DRIVERS GEL MILLION ▪ The increase in revenue was driven by: 43 o The organic growth through strong intakes +41.5% 14 and a ramp-up of the utilization; and 14 o expansion of the bus
Slide 66: Education Business Valuation Overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 LTM EV/EBITDA DEVELOPMENT4 (GEL MILLION) Change q-o-q +11.4% +6.8% +27.6% +6.9% +10.8% 16.5x 16.7x 30-Sep-23 31-Dec-23 2 Y-O-Y PROGRESS NET DEBT TO EBITDA VALUATION HIGHLIGHTS1 GEL million, unless noted otherw
Slide 67: 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 68: Clinics & Diagnostics Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (4Q23) DIAGNOSTICS (4Q23) 19 Outpatient diagnostic and treatment services in Tbilisi and major regional cities Market share by number of registered patients* c.201,000 3.3 Clinics
Slide 69: Clinics & Diagnostics Operating Performance Overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +9.7% CLINICS & DIAGNOSTICS 68 +129.9% 62 KEY DRIVERS 18 ▪ The growth in revenue and EBITDA reflects the 20 GEL MILLION increased demand for non-COVID services and 13 +27.0% 49 NMF the expansion of
Slide 70: Clinics & Diagnostics Business Valuation Overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW 11.7x VALUE DEVELOPMENT OVERVIEW (GEL MILLION) IMPLIED LTM EV/EBITDA VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA3 (excl. IFRS 16) GEL million, unless noted otherwise 31-Dec-232 30-Sep-232 31-Dec-222 4.5x 4 Enterprise value 171.8 176.9
Slide 71: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 71
Slide 72: Real GDP Up by 7.5% in 2023, Inflation Below Target
REAL GDP UP BY 7.5% IN 2023, WHILE INFLATION HAS FALLEN BELOW THE TARGET PRELIMINARY ECONOMIC GROWTH STANDS AT 7.5% Y-O-Y IN 2023, FOLLOWING TWO ANNUAL INFLATION STANDING BELOW THE 3% TARGET SINCE APRIL YEARS OF DOUBLE-DIGIT EXPANSION (10.6% AND 11.0% IN 2021-2022, RESPECTIVELY) 2023, WITH JANUARY 2
Slide 73: Improved External Position
IMPROVED EXTERNAL POSITION TOTAL FX INFLOWS INCREASED BY 6.4% Y-O-Y AND AMOUNTED US$ 14.3 BLN IN 2023 CURRENT ACCOUNT DEFICIT HAS NARROWED SIGNIFICANTLY AS FDI CONTINUES TO FULLY FINANCE THE DEFICIT Export of goods Money Transfers Tourism revenues Total FX Inflows Goods, net Services, net Investment
Slide 74: Appropriate Macro Policy Stance
APPROPRIATE MACRO POLICY STANCE INFLATION Y-O-Y VS. INFLATION TARGET GENERAL GOVERNMENT DEBT (% OF GDP) 16 Headline Inflation Core Inflation Target Monetary Policy Rate General Government Debt, External (% of GDP) General Government Debt, Total (% of GDP) 12 60.2% 60% 9.0 8 50% 47.6% 41.8% 4 39.5% 3
Slide 75: Georgia's EU Candidacy and Middle Corridor Opportunities
UNLOCKING NEW LONG-TERM OPPORTUNITIES: GEORGIA’S EU CANDIDACY AND THE RISING SIGNIFICANCE OF THE MIDDLE CORRIDOR RE-EXPORT INCREASED BY 75% Y-O-Y IN 2023 AND BY 196% COMPARED TO 2021, KEY MILESTONES IN EU-GEORGIA RELATIONS PRIMARILY DUE TO THE INCREASED RE-EXPORT OF MOTOR CARS Motor cars Cigars and
Slide 76: Macroeconomic Wrap-Up
STRONG GDP PERFORMACE BELOW-TARGET INFLATION ROBUST EXTERNAL BALANCE SHEET GEL/US$ ABOVE THE PRE-PANDEMIC LEVELS MACROECONOMIC WRAP-UP SOUND MACROECONOMIC FRAMEWORK EU CANDIDACY & MIDDLE CORRIDOR: OPPORTUNITIES FOR GEORGIA 76
Slide 77: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 77
Slide 78: 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 79: 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 80: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 80
Slide 81: Renewable Energy Operating Performance Overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -9.8% RENEWABLE ENERGY 42 -15.3% 38 16 GEL MILLION -4.0% 32 16 3.2% 27 8 8 -13.5% 4.7% 1 1 7 7 26 22 5 5 4Q22 4Q23 FY22 FY23 4Q22 4Q23 FY22 FY23 PPA Non-PPA Total revenue KEY OPERATING HIGHLIGHTS 4Q22 vs.
Slide 82: Renewable Energy Business Valuation Overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 EQUITY FAIR VALUE COMPOSITION AT 31-DEC-23 (GEL MILLION) (GEL MILLION) Change q-o-q +0.8% -1.2% +2.2% 56 Total value 267 211 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 83: 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 84: Medical Insurance Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW (CONT’D) 200.0 NUMBER OF INSURED & RENEWAL RATE REVENUE (NET INSURANCE PREMIUMS EARNED) 150.0 +22.0% 400 81.8% 83.9% 95.0% 76.9% 77.5% 78.0% 77.4% 77.3% 74.3% 73.4% 73.4% 85.0% 69.7% 100.0 91.3 75.0% 300 +3.3% +3
Slide 85: Medical Insurance Business Valuation Overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +22.9% +32.1% +24.7% 11.0x 9.3x 30-Sep-23 31-Dec-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless noted ot
Slide 86: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q23 & FY23 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: Private Portfolio Companies' Debt Maturity Profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 31 DECEMBER 2023 (GEL MILLION) 2024 2025 2026 2027-2036 Total Large portfolio companies 332.9 55.0 53.9 46.4 488.2 Retail (pharmacy)1 168.8 27.2 27.2 13.6 236.8 Hospitals 164.1 27.8 26.7 32.8 251.4 Investment stage portfoli
Slide 88: Value Creation in Private Portfolio | 4Q23
VALUE CREATION IN PRIVATE PORTFOLIO | 4Q23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 223.1 Performance buy-outs / exits and FX 4Q23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 161,316 Water Utility - GEL MILLION Total Listed and Observable Portfolio Companies - - -
Slide 89: Value Creation in Private Portfolio | FY23
VALUE CREATION IN PRIVATE PORTFOLIO | FY23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 680.5 Performance buy-outs / exits and FX FY23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 549,255 Water Utility 4,000 Total Listed and Observable Portfolio Companies - - - 553,255
Slide 90: NAV Statement | 4Q23
NAV STATEMENT | 4Q23 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 30-Sep-23 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 31-Dec-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,092,209 161,316 - - (27,678) - -
Slide 91: NAV Statement | FY23
NAV STATEMENT | FY23 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Dec-22 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 31-Dec-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 830,463 549,255 - - (153,871) - -
Slide 92: Income Statement | 4Q23 & FY23
INCOME STATEMENT | 4Q23 & FY23 Income statement GEL ‘000, unless otherwise noted 4Q23 4Q22 Change FY23 FY22 Change Dividend income 34,148 27,435 24.5% 162,527 93,875 73.1% Buyback dividend - - NMF 73,356 - NMF Interest income 2,345 6,641 -64.7% 16,642 32,955 -49.5% Realised / unrealised gain/(loss)
Slide 93: Valuation Peer Group
VALUATION PEER GROUP RETAIL P&C (PHARMACY) HOSPITALS INSURANCE • NEUCA S.A. | Poland • Medicover AB | 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.A. | R
Slide 94: 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 95: 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