Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2024 Earnings Presentation
89 slides from Georgia Capital's earnings presentation, 2024
Slide 1: Investor Presentation 1Q24 Results
INVESTOR PRESENTATION 1Q24 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 31-Mar-24
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 31-MAR-24 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 4 Rank Shareholder name Ownership 7.5% 3 1. Management & Management Trust 14.20% Management 3 2. Gemsstock Ltd 11.07% 14.2% USA 1 28.6% 3. Allan Gray Ltd 7.09% 4. Lazard Asset Ma
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 31-MAR-241 PORTFOLIO VALUE BREAKDOWN AT 31-MAR-24 Portfolio value Net debt 43% Listed & Observable 3,971 327 57% Private GEL million GEL million US$ 1,473 million US$ 121 million STARTING FROM 2024, PLATFORM COSTS NAV NAV per share ARE TARGETED AT MAXIMUM 0.
Slide 5: Our portfolio overview as at 31-Mar-24
OUR PORTFOLIO OVERVIEW AS AT 31-MAR-24 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,705m Value: GEL 2,266m 42.9% of the total portfolio value 57.1% of the total portfolio value LARGE PORTFOLIO COMPANIES BANK OF RETAIL HOSPITALS INSURANCE GEORGIA (PHARMACY) (P&C AND MEDICAL) Value:
Slide 6: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 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 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
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 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
Slide 14: 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 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% We are targeting to reduce the balance of “net 39.8% 250.1 debt and guarantees issued” clos
Slide 16: 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 17: 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 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 3.4x 3.3x 3.2x ➢ LTM EBITDA up 34.6% as at Mar-24 from Dec-19. GEL MILLION 189 1,039 200 1,062 225 1,025 268 998 258 913 238 927 245 803 248 787 245 849 254 877 Dec-19 Jun-20 Dec
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 3.2x 3.1x 2.6x 2.8x 2.8x 2.6x 2.6x 2.4x 3.0x 2.0x GEL MILLION 1.0x 8 7 89 8 9 0.0x 131 93 -1.0x -2.0x -3.0x -4.0x 184 186 197 224 235 472 223 535 206 435 20
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 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
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 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES
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 1Q24 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 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 30: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 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 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 32: 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 33: 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 34: 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 35: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 35
Slide 36: 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 37: 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 38: 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) -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 39: 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 40: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 40
Slide 41: 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 42: Bank of Georgia overview: stock price and financial metrics
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 50.5 Change 55 as of 31-Mar-24 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q23 1Q24 y-o-y 45 NIM7 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5
Slide 43: 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 44: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 418 14 4 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 45: 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% 29.0% 29.4% 25.3 27.1 28.8 27.6 29.0 31.0 31.3 7.6 8.1
Slide 46: Retail (pharmacy) 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 47: 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 48: 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 49: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW Change HIGHLIGHTS1 1Q23 1Q24 BED OCCUPANCY RATE - LARGE AND SPECIALTY HOSPITALS y-o-y Operating cash 3.0 5.1 4.9 5.4 5.1 250.0% GEL (3.8)m GEL 2.5m NMF Average flow length of stay 2.5 200.0% EBITDA to
Slide 50: Hospitals 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 51: 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 52: Insurance business (P&C) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW MARKET SHARE FY23 (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 53: Insurance business (P&C) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW (CONT’D) Distribution Mix (GPW %) | 1Q24 COMBINED RATIO MTPL Channel 3% +10.3 ppts +4.3 ppts Partnerships with 89.5% 87.1% Financial 77.5% 82.1% 81.5% 80.8% 79.2% 82.8% 73.9% 72.6% 75.2% 75.4% Institutions 31% 41.6
Slide 54: Insurance business (medical) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) 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
Slide 55: Insurance business (medical) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) OVERVIEW (CONT’D) 200.0 NUMBER OF INSURED & RENEWAL RATE REVENUE (NET INSURANCE PREMIUMS EARNED) 150.0 81.8% 82.7% 83.9% 400 95.0% 76.9% 77.5% 78.0% 77.4% +22.0% 74.3% 73.4% 73.4% 85.0% 69.7% 350 75.0% 100.0 91.3 300 23
Slide 56: Insurance 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 57: 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 58: 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 for the harmonisation of current energy market structure with EU direct
Slide 59: 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 2024 Generation, 1.4 1.5 21.4 6.7 19.4 20.8 42.2 28.9 GWh Gross Commissioned Installed capacity PPA PPA tariff, Generation i
Slide 60: Renewable energy 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 61: 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 62: 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 63: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 31-Mar-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 64: Education 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 65: 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 66: 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 67: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (1Q24) DIAGNOSTICS (1Q24) 18 Outpatient diagnostic and treatment services in Tbilisi Market share by number of registered patients* c.221,000 3.3 Clinics and major regional cities
Slide 68: Clinics & diagnostics 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 69: 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 70: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 70
Slide 71: 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 72: 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 73: 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 74: 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 75: 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 75
Slide 76: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 76
Slide 77: 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 78: 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 79: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 79
Slide 80: Renewable energy operating performance overview (GEL)
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT 50.7% RENEWABLE ENERGY 7 32 5 +2.0x 3 GEL MILLION 5 5 4 2 1Q23 1Q24 1Q23 1Q24 PPA Non-PPA Total revenue KEY OPERATING HIGHLIGHTS 1Q23 vs. 1Q24 Change y-o-y Electricity generation (GWh) 28.9 42.2 +46.0% Av
Slide 81: Renewable energy business valuation overview (GEL)
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 1Q24 EQUITY FAIR VALUE COMPOSITION AT 31-MAR-24 (GEL MILLION) (GEL MILLION) Change q-o-q +0.7% +1.8% -0.1% 57 Total value 266 210 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 82: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 1Q24 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: 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 84: Value creation in private portfolio | 1Q24
VALUE CREATION IN PRIVATE PORTFOLIO | 1Q24 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 306.9 Performance buy-outs / exits and FX 1Q24 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 321,544 Water Utility 3,000 Total Listed and Observable Portfolio Companies - - - 324,544
Slide 85: NAV statement | 1Q24
NAV STATEMENT | 1Q24 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Dec-31 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 31-Mar-24 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,225,847 321,544 - - (4,339) - -
Slide 86: Income statement | 1Q24
INCOME STATEMENT | 1Q24 Income statement GEL ‘000, unless otherwise noted 1Q24 1Q23 Change Dividend income 9,460 5,187 82.4% Buyback dividend 4,339 21,225 -79.6% Interest income 1,637 4,977 -67.1% Realised / unrealised (loss)/gain on liquid funds (551) 428 NMF Interest expense (8,610) (13,751) -37.4
Slide 87: 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 88: 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 89: 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 Exchange PLC’s Main Market for listed securities Ticker