Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2021 Earnings Presentation
37 slides from Georgia Capital's earnings presentation, May 18, 2021
Slide 1: 1Q21 Results Call Presentation
1Q21 RESULTS CALL PRESENTATION 18 May 2021
Slide 2: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 2
Slide 3: COVID-19 Statistics
COVID-19 STATISTICS COVID-19 CASES: DYNAMICS IN GEORGIA 3.1% OF TOTAL ADULT POPULATION HAS BEEN VACCINATED ECONOMY NEARING FULL REOPENING AS AT 16-MAY-21 350 6 Total cases (LHS) Daily cases (RHS) 27% 300 5 TOTAL NUMBER 41% AstraZeneca 250 OF VACCINATED PEOPLE 4 Pfizer-BioNTech 200 88,522 Thousand 3
Slide 4: Macroeconomic Indicators in 2021
MACROECONOMIC INDICATORS IN 2021 RECORD HIGH REMITTANCES AND REBOUNDING MERCHANDISE REAL GDP GREW BY 4% IN MARCH 2021 ON THE BACK OF LIGHTER EXPORTS SUPPORTING RECOVERY RESTRICTIONS AND THE BASE EFFECT 2021 2021 Remittances, USD million (RHS) Remittances, y/y (LHS) 30% Real GDP, y/y VAT Turnover, y/
Slide 5: Exchange Rate Performance
EXCHANGE RATE PERFORMANCE OFFICIAL RESERVE ASSETS REACHED A HISTORIC HIGH OF US$ 4.1 THE REAL EFFECTIVE EXCHANGE RATE HAS DEVIATED FROM BILLION BY THE END OF MARCH 2021, UP 20.6% Y-O-Y THE LONG-TERM TREND FOR MORE THAN TWO YEARS 4,000 Official Reserve Assets, US$ mln Net Foreign Assets, US$ mln REER
Slide 6: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 6
Slide 7: US$ 65 Million Eurobond Tap Issue in March 2021
US$ 65 MILLION EUROBOND TAP ISSUE IN MARCH 2021 OUR STRONG LIQUIDITY HAS BEEN FURTHER ENHANCED, UP 64.4% TO GEL 467 MILLION IN 1Q21 USE OF PROCEEDS TOTAL ISSUE C.$30 ➢ US$ c.35 million will be used to fund capital allocations to US$ 65 C.$35 our portfolio companies ▪ On 9-Mar-21, JSC Georgia Capital
Slide 8: Aggregated Revenue Development Across Private Portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO +3.9% AGGREGATED 1,657 REVENUE UP 8.3% 1,595 Y-O-Y IN 1Q21 AND 331 UP 30.7% FROM 1Q19 307 42 68 GEL MILLION ▪ LTM 1Q21 aggregated +30.7% revenue up 3.9% y-o-y +8.3% 426 393 326 75 65 38 14 14 288 314 337 1,246 1,258 1Q19 1Q20 1Q21 LTM 1Q20 LTM
Slide 9: Aggregated Revenue Across Private Large Portfolio Companies
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES RESILIENT PERFORMANCE OF HEALTHCARE SERVICES, NET 1Q21 REVENUE OF RETAIL (PHARMACY) REMAINED LARGELY REVENUE UP 23.3% Y-O-Y IN 1Q21. LTM 1Q21 NET REVENUE FLAT (DOWN 0.7% Y-O-Y). LTM 1Q21 REVENUE UP 5.3% Y-O-Y UP 3.8% Y-O-Y +3.8%
Slide 10: Aggregated Revenue Across Private Large Portfolio Companies (Cont'd)
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES (CONT’D) REVENUE OF WATER UTILITY UP 22.2% Y-O-Y IN 1Q21, TOTAL GROSS PREMIUMS WRITTEN OF P&C AND REFLECTING THE IMPACT OF INCREASED TARIFFS1 SINCE JAN-21 MEDICAL INSURANCE UP 21.6% Y-O-Y IN 1Q21 REFLECTING THE REBOUNDING DEMAND
Slide 11: Aggregated Revenue Across Private Investment Stage Portfolio Companies
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE INVESTMENT STAGE PORTFOLIO COMPANIES 1Q21 REVENUE DOWN BY 1.6% Y-O-Y, REFLECTING 5.6% EDUCATION REVENUE DOWN 3.4% Y-O-Y IN 1Q21 REFLECTING Y-O-Y DECREASE IN TOTAL ELECTRICITY GENERATIONS A DECREASE IN THE NUMBER OF ACADEMIC DAYS +86.3% +35.4% 42.5 25.5 G
Slide 12: Aggregated EBITDA Development Across Private Portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO +6.3% 307 AGGREGATED EBITDA 289 UP 25.3% Y-O-Y IN 40 9 1Q21 AND UP 45.9% 25 FROM 1Q19 39 GEL MILLION ▪ LTM 1Q21 aggregated +45.9% EBITDA up 6.3% y-o-y +25.3% 77 61 9 53 1 6 8 57 53 62 255 228 (4) 1Q19 1Q20 1Q21 LTM 1Q20 LTM 1Q21 Large portfolio
Slide 13: 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) +90% 31-Dec-19 183 +12% 318 284 -11% 31-Dec-20 392 31-Mar-21 347 -65% 90 31 GCAP LIQUIDITY A
Slide 14: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 14
Slide 15: NAV per Share (GEL) Development Overview
NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW NAV PER SHARE DOWN 2.7% TO GEL 46.80 IN 1Q21 CONTROLLABLE (PRIVATE) NAV PER SHARE DOWN 1.6% TO GEL 38.71 IN 1Q21 % Change q-o-q -35.6% +4.9% +19.5% +27.2% -2.7% % Change q-o-q -25.0% -0.5% +69.3% +22.1% -1.6% 46.84 48.12 46.80 GEL 39.32 38.71 GEL 37.84 31.67
Slide 16: NAV per Share (GEL) Movement in 1Q21
NAV PER SHARE (GEL) MOVEMENT IN 1Q21 NAV PER SHARE CHANGE % -1.2% +0.5% +0.2% +0.9% +0.1% -0.4% -2.8% -2.7% NAV PER SHARE DOWN 2.7% • 2.7% decline in 1Q21 NAV per share (GEL) mainly reflects a 4.0% GEL depreciation against USD and a 9.8% decrease in BoG share price, partially offset by the value cre
Slide 17: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 17
Slide 18: Portfolio Value Development in 1Q21
PORTFOLIO VALUE DEVELOPMENT IN 1Q21 PORTFOLIO VALUE UP 0.5% TO GEL 2.92 BILLION IN 1Q21 % SHARE OF LISTED ASSETS 18% 17% GEL MILLION 18
Slide 19: Portfolio Value as of 31-Mar-21
PORTFOLIO VALUE AS OF 31-MAR-21 % SHARE IN TOTAL PORTFOLIO VALUE: 17% 21% 18% 16% 9% 7% 4% 8% 81% OF OUR PORTFOLIO IS MULTIPLE: BGEO 12.5X 9.5X 9.6X 11.4X – 9.8X 9.7X 12.5X VALUED EXTERNALLY1 PRICE ON LSE GBP 11.00 LTM EV/EBITDA2 LTM EV/EBITDA2 LTM EV/EBITDA3 LTM P/E4 EV/EBITDA5 LTM EV/EBITDA (ON A
Slide 20: Healthcare Services Business Valuation Overview
Externally valued1 HEALTHCARE SERVICES BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 IMPLIED LTM EV/EBITDA (GEL MILLION) DEVELOPMENT (incl. IFRS 16) Change q-o-q +7.4% +11.7% +4.1% +5.8% 13.2x 12.5x 2 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar
Slide 21: Retail (Pharmacy) Business Valuation Overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 IMPLIED LTM EV/EBITDA (GEL MILLION) DEVELOPMENT (incl. IFRS 16) Change q-o-q -0.4% +8.3% +2.3% -3.1% 9.5x 9.1x 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar-21 31-
Slide 22: Medical Insurance Business Valuation Overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q +6.7% +6.2% +5.6% 10.1x 9.8x 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar-21 31-Dec-20 Change Comb
Slide 23: P&C Insurance Business Valuation Overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 IMPLIED LTM P/E (GEL MILLION) MULTIPLE DEVELOPMENT Change q-o-q NMF NMF NMF +3.4% 11.6x 11.4x 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar-21 31-Dec-20 Change Combina
Slide 24: Water Utility Business Valuation Overview
Externally valued1 WATER UTILITY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 (GEL MILLION) IMPLIED LTM EV/EBITDA Change q-o-q MULTIPLE DEVELOPMENT +1.8% +6.8% -3.0% 9.6x 9.4x 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar-21 31-Dec-20 Change Com
Slide 25: Renewable Energy Business Valuation Overview
Internally valued RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 EQUITY FAIR VALUE (GEL MILLION) COMPOSITION AT Change q-o-q +3.8% 7.9% -1.6% 31-MAR-21 (GEL MILLION) 43 Total value 207 164 Operational assets Pipeline projects VALUATION HIGHLIGHTS GEL million, unless n
Slide 26: Education Business Valuation Overview
Internally valued EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q21 LTM EV/EBITDA (GEL MILLION) DEVELOPMENT Change q-o-q +3.4% +44.0% +2.4% +3.2% +10.9% 12.5x 12.5x 2 31-Dec-20 31-Mar-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 31-Mar-21 31-Dec-20 Change Valuati
Slide 27: Georgia Capital Leverage & Liquidity Profile
GEORGIA CAPITAL LEVERAGE & LIQUIDITY PROFILE LTV RATIO1 IS ON TRACK TO THE TARGETED THRESHOLD OF <30% US$ 137 MILLION LIQUID FUNDS AS OF 31-MAR-21 44.1% 41.9% Cash Pre-COVID average: 22% 38 33.5% TOTAL 30% 27.9% 28.9% 31.2% Marketable 25.8% securities 137 20.0% 19.2% US$ MILLION 17.6% Loans issued 1
Slide 28: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 28
Slide 29: Solid Performance Across Our Private Portfolio, Outlook Even Stronger
SOLID PERFORMANCE ACROSS OUR PRIVATE PORTFOLIO, WITH OUTLOOK BEING EVEN STRONGER PERFORMANCE HIGHLIGHTS ✓ Strong operating performance across our private portfolio, aggregated y-o-y revenues and EBITDA up 8.3% and 25.3%, respectively, in 1Q21 ✓ Enhanced liquidity at GCAP, up 64.4% to GEL 467 million
Slide 30: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 1Q21 RESULTS OVERVIEW 03 1Q21 NAV DEVELOPMENT 04 1Q21 VALUATION OVERVIEW 05 WRAP-UP 06 ANNEX 30
Slide 31: Other Businesses
OTHER BUSINESSES OTHER PORTFOLIO PERFORMANCE HIGHLIGHTS 1Q21 LTM 1Q21 EBITDA Revenue EBITDA Revenue Operational Change LTM Change 2021 Change Change Change Change 1Q21 GEL GEL GEL GEL metrics y-o-y 1Q21 y-o-y TARGET million y-o-y million y-o-y million y-o-y million y-o-y Number of WINE bottles solid
Slide 32: Valuation Peer Group
VALUATION PEER GROUP HEALTHCARE RETAIL SERVICES MEDICAL (PHARMACY) INSURANCE • Med Life S.A. | Romania • NEUCA S.A. | Poland • Powszechny Zaklad Ubezpieczen SA | Poland • EMC Instytut Medyczny SA | Poland • Sopharma Trading AD | Bulgaria • European Reliance General Insurance Company S.A. | Greece •
Slide 33: Private Portfolio Companies' Debt Maturity Profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 31 MARCH 2021 (GEL MILLION) 2021 2022 2023 2024+ Total Large portfolio companies 86.2 197.1 38.8 614.2 936.3 Healthcare Services 73.0 197.1 38.8 86.5 395.4 Retail (Pharmacy) 13.2 - - - 13.2 Water Utility (Green bonds) - - -
Slide 34: NAV Statement | 1Q21
NAV STATEMENT | 1Q21 1.Value 2a. 3.Operating 4. Liquidity GEL thousands unless otherwise 2c. Share in total 31-Dec-20 2b. Buybacks Management/ FX / 31-Mar-21 Change % noted Creation Investments Dividends Expenses portfolio (%) Other Listed Portfolio Companies BoG1 531,558 (26,452) - - - - - 505,106
Slide 35: Value Creation in Private Portfolio | 1Q21
VALUE CREATION IN PRIVATE PORTFOLIO | 1Q21 Operating Multiple Change Portfolio Businesses Greenfields Value Creation in 1Q21 8.5 Performance and FX GEL thousands (1) (2) (3) (1)+(2)+(3) BoG (26,452) Total Listed Portfolio Companies (26,452) Large Portfolio Companies 24,106 - (12,794) 11,312 Healthca
Slide 36: Government Measures
GOVERNMENT MEASURES ACCUMULATED BUFFERS AND INTERNATIONAL SUPPORT HAVE ALLOWED THE GOVERNMENT TO LAUNCH SIZEABLE MEASURES US$ 3 billion funding facility Economic Plan – US$ 3 billion (predominantly loans) from international Budget – GEL 3.5 billion (1st stage) Budget – GEL 1.1 billion (2nd stage) do
Slide 37: 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