Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2024 Earnings Presentation
46 slides from Georgia Capital's earnings presentation, May 1, 2024
Slide 1: 1Q24 Results Call Presentation
1Q24 RESULTS CALL PRESENTATION 1 MAY 2024
Slide 2: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 2
Slide 3: Key Developments in 1Q24
1 Record NAV per share of GEL 90.04, up 8.6% q-o-q, supported by BoG’s outstanding performance and share price growth 2 Strong performance of our private portfolio companies, aggregated quarterly revenue and EBITDA up 8.8% and 17.3% y-o-y, respectively 3 NCC ratio improved by 0.8 ppts q-o-q to 14.8%
Slide 4: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 4
Slide 5: Strong Real GDP Growth in 1Q24, with Inflation Below Target
STRONG REAL GDP GROWTH IN 1Q24, WITH INFLATION BELOW TARGET GEORGIA’S ECONOMY CONTINUES TO EXPAND, WITH PRELIMINARY ECONOMIC GROWTH ANNUAL INFLATION BELOW THE 3% TARGET SINCE APRIL 2023, WITH MARCH 2024 AT 7.8% Y-O-Y IN 1Q24 INFLATION AT 0.5% Y-O-Y Headline Inflation Target End of Period Monetary Po
Slide 6: Current Account Deficit at Historically Low Levels
CURRENT ACCOUNT DEFICIT AT HISTORICALLY LOW LEVELS CAB NARROWED TO -4.3% OF GDP, SUPPORTED BY STRONG GROWTH IN THE SERVICES BALANCE FOREIGN CURRENCY INFLOWS HAVE MODERATED BUT REMAIN ABOVE PRE-WAR LEVELS Export of goods Money Transfers Tourism revenues Total FX Inflows Goods, net Services, net Inves
Slide 7: Strong Labor Market Supporting Economic Activity
STRONG LABOR MARKET SUPPORTING ECONOMIC ACTIVITY UNEMPLOYMENT RATE AT HISTORICAL LOWS, DOWN TO 16.4% IN 2023 FROM 17.3% IN 2022 LABOR FORCE STRUCTURE Employed Unemployed Labor force Labour force participation rate,% 30 27.2 26.7 25 23.0 21.7 22.1 1,676 1,654 1,655 1,641 20.4 1,604 1,625 1,627 1,629
Slide 8: Appropriate Macro Policy Stance
APPROPRIATE MACRO POLICY STANCE NET NBG INTERVENTIONS ON THE FX MARKET AND OFFICIAL RESERVE ASSETS GENERAL GOVERNMENT DEBT STRUCTURE FAVOURABLE, WITH 3.4% WEIGHTED AVERAGE INTEREST RATE Net Interventions (LHS) Reserve Assets (RHS) 600 6.0 430 400 265 4.8 5.0 164 200 73 100121 93 94 111 20 4.0 50% of
Slide 9: Macroeconomic Wrap-Up
STRONG GDP PERFORMACE BELOW-TARGET INFLATION ROBUST EXTERNAL BALANCE SHEET MACROECONOMIC GEL/US$ ABOVE PRE-PANDEMIC LEVELS WRAP-UP SOUND MACROECONOMIC FRAMEWORK 9
Slide 10: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW AGGREGATED PORTFOLIO RESULTS OVERVIEW NAV PER SHARE DEVELOPMENT OVERVIEW UPDATE ON DELEVERAGING 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 1
Slide 11: Aggregated Revenue Development Across Private Portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP 8.8% Y-O-Y IN 1Q24 AND UP +9.4% 9.4% ON AN LTM BASIS 2,109 1,928 590 +8.8% 519 166 515 138 474 132 118 33 43 322 339 1,271 1,354 1Q23 1Q24 LTM 31-Mar-23 LTM 31-Mar-24 Other portfolio companies Other portfolio c
Slide 12: Aggregated EBITDA Development Across Private Portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION +6.1% AGGREGATED EBITDA UP 17.3% Y-O-Y IN 1Q24 AND UP 261 6.1% ON AN LTM BASIS 246 55 38 +17.3% 50 60 65 56 15 4 10 14 43 36 158 147 1Q23 1Q24 LTM 31-Mar-23 LTM 31-Mar-24 Other portfolio companies Other portfolio companies Investment
Slide 13: Aggregated Cash Balance & Net Operating Cash Flow Development
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) -29.5% 213 31-Dec-22 -17.5% 308 150 +31.1% -7.6% 31-Dec-23 275 45 34 31-Mar-24 254 1Q23 1Q24
Slide 14: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW AGGREGATED PORTFOLIO RESULTS OVERVIEW NAV PER SHARE DEVELOPMENT OVERVIEW UPDATE ON DELEVERAGING 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 1
Slide 15: NAV per Share (GEL) Movement in 1Q24
NAV PER SHARE (GEL) MOVEMENT IN 1Q24 RECORD NAV PER SHARE +9.6% -0.5% +0.8% -0.3% -1.0% +8.6% OF GEL 90.04, UP 8.6% Q-O-Q IN 1Q24 ▪ NAV per share (GEL) development in 1Q24 mainly reflects BoG’s outstanding performance and share price growth. ▪ In GBP terms, the NAV per share growth in 1Q24 was 9.3%,
Slide 16: Strong NAV per Share Growth
STRONG NAV PER SHARE GROWTH STRONG NAV PER SHARE (GEL) GROWTH NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW WITH 14.5% CAGR SINCE DEC-18 +14.5% CAGR IN US$ AND GBP TERMS, NAV PER SHARE CAGR STANDS AT 14.3% AND 14.4%, +8.6% RESPECTIVELY 90.0 82.9 63.0 65.6 46.8 48.1 44.3 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
Slide 17: Share Buyback and Cancellation Programme
SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF GCAP’S SHARE BUYBACK AND CANCELLATION PROGRAMMES 7.9 MILLION SHARES (US$ 87 Number of issued shares MILLION IN VALUE) REPURCHASED 39.4 40.2 47.92 47.1 44.8 43.2 42.7 AND CANCELLED SINCE DEMERGER IN 2018, REPRESENTING 16.5%1 OF THE $87 ISSUED SH
Slide 18: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW AGGREGATED PORTFOLIO RESULTS OVERVIEW NAV PER SHARE DEVELOPMENT OVERVIEW UPDATE ON DELEVERAGING 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 1
Slide 19: Net Capital Commitment (NCC) Overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Change Change US$ Million 31-Mar-23 31-Dec-23 31-Mar-24 (y-o-y) (q-o-q) NCC RATIO IMPROVED BY 0.8 PPTS Cash and liquid funds 134.5 -80.9% 40.1 -35.9% 25.7 Q-O-Q AND 4.9 PPTS Y-O-Y TO Loans issued 13.9 -74.5% 3.4 3.2% 3.5 14.8% AS AT 31-MAR-24 Gross debt (299.2)
Slide 20: 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 21: Free Cash Flow Development
FREE CASH FLOW DEVELOPMENT GCAP’s FREE CASH FLOW DEVELOPMENT (US$ MILLION) SIGNIFICANT INCREASE IN FREE CASH FLOW, REFLECTING ROBUST DIVIDEND INFLOWS, WELL-MANAGED OPERATING EXPENSES, AND REDUCED INTEREST EXPENSE IN LINE WITH OUR DELEVERAGING PROGRESS 34 FY24 ESTIMATE Free cash flow is determined by
Slide 22: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 22
Slide 23: Portfolio Value as of 31-Mar-24
PORTFOLIO VALUE AS OF 31-MAR-24 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 93% IS OF OUR PORTFOLIO 39% 4% 17% 10% 8% 7% 5% 3% 7% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 GBP 50.50 OPTION MULTIPLE: 12.4x 13.8x 12.4x 16.2x 10.6x BGEO VALUATION2 9.7x LTM P/E LTM EV/EBITDA3 EV/EBITDA4 LTM EV
Slide 24: Portfolio Value Development in 1Q24
PORTFOLIO VALUE DEVELOPMENT IN 1Q24 PORTFOLIO VALUE UP 8.1% Q-O-Q TO GEL 4.0 BILLION IN 1Q24 PRIVATE PORTFOLIO VALUE CREATION IN 1Q24 LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE PRIVATE PORTFOLIO VALUE CREATION VALUE UP BY 23.1% DOWN BY 0.9% GEL MILLION GEL million Education 13.3 Clinics
Slide 25: Retail (Pharmacy) Business Operating Performance Overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +3.6% RETAIL (PHARMACY) 197 204 KEY DRIVERS GEL MILLION +8.7% 168 ▪ A y-o-y increase in revenues reflects: 154 o An 8.7% y-o-y increase in retail revenues, driven by significant recent expansion of the
Slide 26: Retail (Pharmacy) Business Valuation Overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -2.1% -0.8% 0.0% -2.8% 9.7x 9.7x 31-Dec-23 31-Mar-24 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 (excl. IFRS 16) GEL million, unless
Slide 27: Hospitals Business Operating Performance Overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +1.5% 81 HOSPITALS 80 27 GEL MILLION KEY DRIVERS 30 -13.4% ▪ The y-o-y increase in the 1Q24 revenue reflects the net impact of: 14 12 o Increase in revenues from Iashvili Hospital in 1Q24, +7.7% 4 which was cl
Slide 28: Hospitals Business Valuation Overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -1.9% +7.5% -0.2% -8.7% 13.8x 13.8x 31-Dec-23 31-Mar-24 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless noted otherwise
Slide 29: Insurance Business Operating Performance Overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE PRE-TAX PROFIT DEVELOPMENT +18.9% 55.0 INSURANCE 46.2 23.5 KEY DRIVERS +0.4% GEL MILLION 21.8 ▪ The increase in insurance revenue is mainly driven by the growth in the motor, credit life and medical 7.7 7.8 insurance lines. 1.5 2.1
Slide 30: Insurance Business Valuation Overview
Externally valued1 INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q 0.0% 378 378 12.4x 12.4x 92 88 286 289 31-Dec-23 31-Mar-24 P&C Insurance Medical Insurance VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million,
Slide 31: Renewable Energy Business Operating Performance Overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +46.5% RENEWABLE ENERGY 2.6 KEY DRIVERS 1.8 1.1 +97.7% US$ MILLION ▪ A y-o-y increase in the 1Q24 revenue and EBITDA reflects the increase in electricity generation, driven by 1.8 the resumption of operat
Slide 32: Renewable Energy Business Valuation Overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 EQUITY FAIR VALUE COMPOSITION (US$ MILLION) AT 31-MAR-24 (US$ MILLION) Change q-o-q +0.5% +1.5% -0.3% 21 Total value US$ 99 78 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBIT
Slide 33: Education Business Operating Performance Overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +32.8% EDUCATION 18.5 KEY DRIVERS GEL MILLION ▪ A y-o-y increase in the 1Q24 revenue was driven by: 13.9 o The organic growth through strong intakes and a ramp-up of the utilisation; and +10.0% o expansion of th
Slide 34: Education Business Valuation Overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 LTM EV/EBITDA DEVELOPMENT4 (GEL MILLION) Change q-o-q +5.1% +2.0% -25.0% +5.6% +7.1% 16.7x 16.2x 31-Dec-23 31-Mar-24 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Mar-24 31-
Slide 35: Clinics & Diagnostics Business Operating Performance Overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +25.1% 19.5 CLINICS & DIAGNOSTICS 15.6 5.4 KEY DRIVERS GEL MILLION 4.4 ▪ A y-o-y growth in the 1Q24 revenue and EBITDA reflects: +83.0% o the increased demand for high revenue-generating services d
Slide 36: Clinics & Diagnostics Business Valuation Overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +3.6% -6.7% +10.1% +8.8% 11.7x 10.6x 31-Dec-23 31-Mar-24 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless no
Slide 37: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 37
Slide 38: Liquidity Outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) *LIQUIDITY DOWN BY 35.9% Q-O-Q IN 1Q24, REFLECTING SHARE BUYBACKS DURING THE 300 300 365 365 300 150 150 QUARTER AND COUPON PAYMENT ON US$ 150 MILLION SUSTAINABILITY-LINKED BOND Cash receipt from the water utilit
Slide 39: Dividend Income Outlook
DIVIDEND INCOME OUTLOOK RECURRING CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES 180* GEL 13.8 MILLION DIVIDEND INCOME IN 1Q24 DIVIDEND INCOME (GEL million) 55 GEL MILLION P&C Insurance 4.8 Beverages (beer business) 4.6 BOG (buyback dividend) 4.3 94 44 TOTAL 13.8 73 74 53 166-176 44 SOLID DIVIDEND IN
Slide 40: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 40
Slide 41: Solid Performance Across Our Portfolio
SOLID PERFORMANCE ACROSS OUR PORTFOLIO PERFORMANCE HIGHLIGHTS ✓ Record NAV per share of GEL 90.04, up 8.6% q-o-q, supported by BoG’s outstanding performance and share price growth ✓ Strong performance of our private portfolio companies, aggregated quarterly revenue and EBITDA up 8.8% and 17.3% y-o-y
Slide 42: Contents
CONTENTS 01 KEY DEVELOPMENTS 02 MACROECONOMIC UPDATE | GEORGIA 03 1Q24 PERFORMANCE OVERVIEW 04 1Q24 PORTFOLIO RESULTS AND VALUATIONS OVERVIEW 05 LIQUIDITY AND DIVIDEND INCOME OUTLOOK 06 WRAP-UP 07 ANNEX 42
Slide 43: Deleveraging Across Our Private Portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 31-DEC-23 CHANGE 31-MAR-24 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 2.2x +0.1x 2.3x Up to 1.5x 3.2x AS OF 31-MAR-24
Slide 44: Private Portfolio Companies' Debt Maturity Profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 31 MARCH 2024 (GEL MILLION) 2024 2025 2026 2027-2036 Total Large portfolio companies 220.6 87.4 47.3 45.3 400.6 Retail (pharmacy)1 117.0 30.0 27.0 18.6 192.6 Hospitals 103.6 57.4 20.3 26.7 208.0 Investment stage portfolio c
Slide 45: 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 46: 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