Georgia Capital PLC · LSE:CGEO
Georgia Capital — H1 2023 Earnings Presentation
99 slides from Georgia Capital's earnings presentation, August 2023
Slide 1: Investor Presentation 2Q23 & 1H23 Results
INVESTOR PRESENTATION 2Q23 & 1H23 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: GCAP Shareholders at 30-Jun-23
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-JUN-23 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 4 Rank Shareholder name Ownership 8.4% 3 1. Management & Management Trust 14.46% 1 2. Gemsstock Ltd 10.91% UK 26.9% Management 3 3. Allan Gray Ltd 6.78% 14.5% 4. Coeli Frontier M
Slide 4: Key Figures at a Glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 30-JUN-231 PORTFOLIO VALUE BREAKDOWN AT 30-JUN-23 31.0% Portfolio value Net debt Listed & Observable 3,361 GEL million 325 GEL million 69.0% Private US$ 1,284 million US$ 124 million STARTING FROM 2024, PLATFORM COSTS ARE TARGETED AT MAXIMUM 0.75% OF NAV NAV
Slide 5: Our Portfolio Overview as at 30-Jun-23
OUR PORTFOLIO OVERVIEW AS AT 30-JUN-23 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,042m Value: GEL 2,319m 31% of the total portfolio value 69% 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 2Q23 & 1H23 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 2Q23 & 1H23 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): IRR, MOIC, ROIC
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 2Q23 & 1H23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 15: Net Capital Commitment (NCC) Overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW US$ MILLION 31-MAR-23 CHANGE 30-JUN-23 NCC REPRESENTS AN AGGREGATED Cash and liquid funds 134.5 13.9% 153.2 VIEW OF ALL CONFIRMED, AGREED Loans issued 13.9 -52.0% 6.7 AND EXPECTED CAPITAL OUTFLOWS Accrued dividend income - NMF 20.2 AT THE GCAP HOLDCO LEVEL Gross
Slide 16: NCC Ratio Development Overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC RATIO DOWN BY 2.3 PPTS TO 17.4% IN 2Q23 385.8 365.9 345.7 We are targeting to reduce the balance of “net debt and guarantees issued” close to zero over 42.5% the short to medium term 39.8% 250.1 223.1 2 ~193.0 31.9% 21.1% 17.
Slide 17: 360-Degree Framework
360-DEGREE FRAMEWORK GCAP SHARE PRICE IS AT THE CORE OF NEW OUR INVESTMENT DECISION MAKING NCC RATIO NAVIGATION TOOL tunity Inv es r t po m 15% 40% op en to ack ppo Buyb 360o rtunity ANALYSIS MEANINGFUL TACTICAL CASH BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY Sal e o p p o r
Slide 18: Deleveraging Across Our Private Portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 31-MAR-22 CHANGE 30-JUN-23 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 1.4x +0.3x 1.7x Up to 1.5x 2.8x AS OF 30-JUN-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 3.3x 3.3x 3.2x ➢ Despite headwinds from COVID-19, 3.0x leverage profile across our private portfolio GEL MILLION companies improved over the last 2 years. 1891,039 2001,062 2251,
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 2.6x 2.8x 2.7x 2.8x 2.6x 2.6x 2.5x 2.6x 2.4x ➢ LTM EBITDA up 13.7% as at Jun-23 from Dec-19; 624 GEL MILLION ➢ Excluding the minority buyout agreement at 60
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 2Q23 & 1H23 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: 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 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 2Q23 & 1H23 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 2Q23 & 1H23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 29
Slide 30: Issuance of US$ 150 Million Sustainability-Linked Bonds
ISSUANCE OF US$ 150 MILLION THE PROCEEDS FROM THE ISSUANCE, TOGETHER WITH EXISTING LIQUID FUNDS OF SUSTAINABILITY-LINKED BONDS GCAP, ARE TO BE USED TO FULLY REDEEM THE EXISTING US$ 300 MILLION EUROBOND ON 3 AUGUST 2023, GCAP SUCCESSFULLY ISSUED A US$ 150 MILLION SUSTAINABILITY-LINKED BONDS ON THE GE
Slide 31: Bond Issuance Contributes to Development of Local Capital Market
THE BOND ISSUANCE SIGNIFICANTLY CONTRIBUTES TO THE DEVELOPMENT OF THE LOCAL CAPITAL MARKET THE ISSUANCE ATTRACTED AN UNPRECEDENTED INVESTOR BASE LEVEL OF INTEREST IN GEORGIA, WITH TOTAL DEMAND REACHING US$ 200 MILLION AND SPREADING ACROSS A DIVERSE RANGE OF 275+ IFIs Local Investors RETAIL, CORPORAT
Slide 32: Strong Progress on Deleveraging
STRONG PROGRESS ON DELEVERAGING GROSS DEBT DEVELOPMENT OVERVIEW (US$ MILLION) SIGNIFICANT PROGRESS ON OUR KEY EUROBONDS NEW LOCAL BONDS STRATEGIC PRIORITY OF DELEVERAGING GCAP’S BALANCE SHEET WITH THE GROSS ➢ From the US$ 300 million GCAP Eurobonds, US$ 283.4 million has been repurchased DEBT BALANC
Slide 33: Buyout of Minority Shareholders in Retail (Pharmacy)
BUYOUT OF THE MINORITY SHAREHOLDERS IN RETAIL (PHARMACY) GCAP’S EQUITY STAKE IN RETAIL (PHARMACY) y Inv nit es tu or RECONFIRMING OUR tm p en op CONFIDENCE IN THE VALUE +20.6 ppts t opportunity ck Buyba 360o CREATION POTENTIAL OF ANALYSIS 97.6% THE RETAIL (PHARMACY) BUSINESS al eo it y 77.0% S p p o
Slide 34: Strong NAV per Share Growth
STRONG NAV PER SHARE GROWTH STRONG NAV PER SHARE (GEL) GROWTH NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW WITH 11.8% CAGR SINCE DEC-18 +11.8% CAGR IN US$ AND GBP TERMS, NAV PER SHARE CAGR STANDS AT 12.4% +11.8% 73.3 65.6 63.0 46.8 48.1 44.3 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jun-23 34
Slide 35: Progress on Share Buybacks
PROGRESS ON SHARE BUYBACKS DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMMES 1,000,000 SHARES (2.2% OF ISSUED 4.1 VALUE CAPITAL) HAVE BEEN REPURCHASED 2.7 UNDER THE BUYBACK PROGRAMME 71.0 IN 2Q23 36.0 35.0 US$ MILLION NUMBER OF SHARES ➢ In 2Q23, 372,127 shares with a value of US$ 3.6 6.8 Pre-
Slide 36: 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 28 Free cash flow is determined by subtracting i
Slide 37: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 37
Slide 38: NAV per Share (GEL) Movement in 2Q23
NAV PER SHARE (GEL) MOVEMENT IN 2Q23 RECORD 2Q23 NAV +1.9% +5.2% +2.1% -0.3% -0.7% +8.2% PER SHARE OF GEL 73.28, UP 8.2% Q-O-Q ▪ NAV per share (GEL) performance in 2Q23 mainly reflects continued growth in BoG’s value and the robust operating performance of the private portfolio companies ▪ NAV per s
Slide 39: Portfolio Value Development in 2Q23
PORTFOLIO VALUE DEVELOPMENT IN 2Q23 PORTFOLIO VALUE UP 2.8% TO GEL 3.4 BILLION IN 2Q23 ▪ The value of the listed and observable portfolio increased by GEL 57 million. ▪ The value of the private portfolio increased LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE by GEL 36 million, mainly refl
Slide 40: Liquidity Outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) * LIQUIDITY UP BY 13.8% IN US$ TERMS IN 1H23, MAINLY REFLECTING ROBUST DIVIDEND INFLOWS 300 300 365 365 300 300 FROM THE PORTFOLIO COMPANIES CASH RECEIPT FROM CANCELLATION OF THE WATER UTILITY US$ 65 MILLION FOLL
Slide 41: Dividend Income Outlook
DIVIDEND INCOME OUTLOOK CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES GEL 148 MILLION DIVIDEND INCOME IN 1H23 +57.7% DIVIDENDS INCOME REGULAR ONE-OFF TOTAL (GEL million) 148 BOG 85.0 29.4 114.4 GEL MILLION Of which, cash dividends 52.8 - 52.8 62 Of which, buyback dividends 32.2 29.4 61.6 94 Retail (
Slide 42: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 PERFORMANCE OVERVIEW ▪ Strategic developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 42
Slide 43: Aggregated Revenue Development Across Private Portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP +11.1% 12.3% Y-O-Y IN 2Q23 1,007 906 +12.3% 271 ▪ 1H23 aggregated revenue up 11.1% y-o-y 198 529 85 471 85 150 122 46 42 307 333 622 651 2Q22 2Q23 1H22 1H23 Other portfolio companies Other portfolio companies I
Slide 44: Aggregated EBITDA Development Across Private Portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED EBITDA UP 7.3% +4.4% IN 2Q23 and up 4.4% y-o-y in 1H23 123 118 15 11 ▪ EBITDA growth in 1H23 reflects strong performance of our non-healthcare businesses +7.3% 26 30 and a rebound in the earnings growth of our healthcare b
Slide 45: 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) -40.9% 31-Dec-22 310 -19.4% 83 -69.0% 52 49 31-Mar-23 400 -37.5% 16 30-Jun-23 250 2Q22 2Q23
Slide 46: Portfolio Value as of 30-Jun-23
PORTFOLIO VALUE AS OF 30-JUN-23 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 92% IS OF OUR PORTFOLIO 26% 5% 22% 13% 10% 7% 5% 3% 9% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 MULTIPLE: GBP 29.25 OPTION 9.2x 12.9x 10.1x – 10.4x 12.4x 16.3x6 18.8x7 BGEO VALUATION2 LTM EV/EBITDA3 LTM EV/EBITDA3
Slide 47: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 47
Slide 48: 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 49: Bank of Georgia Overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 29.3 Change 40.0 as of 30-Jun-23 2015 2016 2017 2018 2019 2020 2021 2022 2Q22 2Q23 y-o-y 35.0 30.0 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5.4% 5.3% 6.6% +1.3 ppts 25.0
Slide 50: 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 51: Retail (Pharmacy) Business Overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 383 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 52: 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% 29.0% 29.6% 29.4% 29.7% 25.3 27.1 28.8 27.6 29.0 31.0 7.4 7.
Slide 53: Retail (Pharmacy) Operating Performance Overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +2.5% KEY DRIVERS 391 401 ▪ An increase in 2Q23 revenue was mainly driven by the continued expansion of the GEL MILLION +5.3% pharmacy chain and franchise stores and the +5.1% overall
Slide 54: Retail (Pharmacy) Business Valuation Overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +0.6% +84.2% -91.0% -3.6% 9.3x 9.2x 31-Mar-23 30-Jun-23 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 GEL million, unle
Slide 55: 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 56: Hospitals Business Overview (Cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 2Q23 1H23 BED OCCUPANCY RATE Average Operating cash flow GEL (4.0)m GEL (6.9)m length of stay 3 5.4 5.2 5.6 5.7 5.1 5.1 5.0 5.4 5.1 250.0% Change y-o-y NMF NMF 2.5 200.0% 2 EBITDA to cash -
Slide 57: Hospitals Operating Performance Overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +1.7% HOSPITALS 150 152 KEY DRIVERS ▪ A strong y-o-y rebound in 2Q23 revenue and GEL MILLION EBITDA reflects the gradual organic return to +8.3% pre-pandemic levels of activity, as following the suspension of C
Slide 58: Hospitals Business Valuation Overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +2.7% +9.1% +1.6% -0.2% 12.8x 12.9x 31-Mar-23 30-Jun-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise
Slide 59: 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 (0.7% penetration in property and casu
Slide 60: P&C Insurance Business Overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | 1H23 COMBINED RATIO MTPL Channel +4.5ppts +2.4ppts 3% 82.1% 81.5% 80.8% 79.8% 84.3% 81.2% 83.6% 77.5% 75.2% 75.4% 79.2% 73.9% 72.6% Partnerships with Financial 41.6% 44.0% 47.3% 46.8% 48.4%
Slide 61: Insurance Operating Performance Overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE NET INCOME DEVELOPMENT +20.4% INSURANCE 98 +35.1% KEY DRIVERS 82 14 P&C Insurance 45 +22.6% 3 GEL MILLION ▪ The increase in insurance revenue is mainly driven 10 by the growth in the motor, credit life, agricultural 36 +28.0% 52 and
Slide 62: P&C Insurance Business Valuation Overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +19.2% 10.4x 10.1x2 31-Mar-23 30-Jun-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Jun-23 31-Mar-23 Chan
Slide 63: 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 64: 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 | 30 JUNE 2023 Generation, 34.1 33.8 20.8 34.3 21.9 20.5 76.9 88.6 35.6 35.4 27.5 47.5 33.9 42.7 39.6 105.8 122.5 GWh Gross Commissione
Slide 65: Renewable Energy Operating Performance Overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -6.6% RENEWABLE ENERGY 6 6 -3.6% -16.9% KEY DRIVERS 4 3 -14.2% 4 -16.0% 2 ▪ A y-o-y decrease in revenue and EBITDA in US$ MILLION 5 2Q23 reflects the net impact of: 4 ➢ A 13.2% y-o-y decrease in electrici
Slide 66: Renewable Energy Business Valuation Overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 EQUITY FAIR VALUE COMPOSITION AT 30-JUN-23 (US$ MILLION) (US$ MILLION) Change q-o-q -0.6% -0.9% -0.3% 21 Total value US$ 95 74 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBIT
Slide 67: 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 68: Education Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Jun-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 69: Education Operating Performance Overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT EDUCATION +28.2% 28 KEY DRIVERS +12.6% GEL MILLION ▪ Increase in revenues reflect strong intakes 22 and a ramp-up of utilization, in line with 10 27.5% both the organic growth and expansion of 9 the business. +1
Slide 70: Education Business Valuation Overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +1.6% +7.7 -25.3% +1.8% +5.1% 16.2x 16.3x 31-Mar-23 30-Jun-23 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Jun-23 31-Ma
Slide 71: 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 72: Clinics & Diagnostics Business Overview (Cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (2Q23) DIAGNOSTICS (2Q23) 18 17 Market share by number of registered patients* c.206,000 3.1 Community Clinics Polyclinics Number of patients served Average number of tests per Out
Slide 73: Clinics & Diagnostics Operating Performance Overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT CLINICS & DIAGNOSTICS KEY DRIVERS -5.1% ▪ Similar to the hospitals business, the organic 47 44 GEL MILLION -18.1% transition to the post-COVID operating +18.7% 12 9 environment, has been positively
Slide 74: Clinics & Diagnostics Business Valuation Overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT2 (GEL MILLION) (incl. IFRS 16) Change q-o-q +1.2% 10.6% 1.2% -4.5% 21.0x 18.8x 31-Mar-23 30-Jun-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless not
Slide 75: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 75
Slide 76: Real GDP Up 7.6% in 1H23, Inflation Below Target
REAL GDP UP BY 7.6% IN 1H23, WHILE INFLATION HAS FALLEN BELOW THE TARGET PRELIMINARY ECONOMIC GROWTH STANDING AT 7.6% Y-O-Y IN 1H23, ANNUAL INFLATION STANDING BELOW THE 3% TARGET SINCE APRIL 2023, FOLLOWING UP ON TWO YEARS OF DOUBLE-DIGIT EXPANSION (10.5% AND WITH JULY 2023 INFLATION PRINTED AT 0.3%
Slide 77: ICT Sector Emerged as Significant Driver of Economic Growth
THE INFORMATION AND COMMUNICATION SECTOR HAS EMERGED AS A SIGNIFICANT DRIVER OF ECONOMIC GROWTH THE INFORMATION AND COMMUNICATION (ICT) SECTOR SHARE IN GDP HAS IN THE LAST FOUR QUARTERS (2Q22-1Q23), THE ICT SECTOR HAS BEEN THE SURGED TO 5.5% IN 1Q23, AS OPPOSED TO 3.1% IN 2018-2021 LARGEST CONTRIBUT
Slide 78: Improved External Position
IMPROVED EXTERNAL POSITION CURRENT ACCOUNT COMPONENTS AND FDI INFLOWS (% OF NOMINAL GDP) APPRECIATING SINCE MID-2021, BRIEFLY INTERRUPTED AFTER THE WAR, GEL HAS NOW STRENGTHENED TO ABOVE PRE-PANDEMIC LEVELS AGAINST USD 28% 18% 3.8 USD/GEL 8.0% 3.46 3.40 8% 3.3 12.5% -2% 2.8 -12% -4.0% -3.2% -5.6% -9
Slide 79: 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 60.1% 10.25 60% 8 50% 47.6% 41.8% 4 3.2 3
Slide 80: Macroeconomic Wrap-Up
STRONG GDP PERFORMACE BELOW - TARGET INFLATION ROBUST EXTERNAL BALANCE SHEET MACROECONOMIC WRAP-UP GEL/US$ ABOVE THE PRE-PANDEMIC LEVELS SOUND MACROECONOMIC FRAMEWORK 80
Slide 81: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 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 MASSIMO GESUA’SIVE SALVADORI Experience: Formerly BGEO Group CEO; Up to 20 years INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Currently an a
Slide 83: GCAP's Highly Experienced Management Team
GCAP’S HIGHLY EXPERIENCED MANAGEMENT TEAM IRAKLI GILAURI, CEO & DEPUTY CHAIRMAN IA GABUNIA, CHIEF STRATEGY OFFICER Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as CFO of Bank Formerly Investment Director at Georgia Capital. Joined BGEO as an Investment Dir
Slide 84: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 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 -19.8% RENEWABLE ENERGY 19 -16.5% 15 13 8 -28.4% GEL MILLION 11 -26.1% 6 -25.5% 7 14 6 11 10 -15.5% 8 5 5 11 10 2Q22 2Q23 1H22 1H23 2Q22 2Q23 1H22 1H23 PPA Non-PPA Total revenue KEY OPERATING HIGHLIGHTS 2
Slide 86: Renewable Energy Business Valuation Overview (GEL)
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 EQUITY FAIR VALUE COMPOSITION AT 30-Jun-23 (GEL MILLION) (GEL MILLION) Change q-o-q +1.7% +1.3% +1.9% 55 Total value 248 193 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) 200.0 400 83.3% 83.0% 150.0 95.0% 74.3% 73.4% 76.9% 77.5% 73.4% 78.0% 77.4% 69.7% 70.5% 70.5% GEL million 75.0% 300 +8.0% Thousand
Slide 89: Medical Insurance Business Valuation Overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT2 (GEL MILLION) Change q-o-q +30.0% +2.6% +21.8% 12.6x 10.4x 31-Mar-23 30-Jun-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Jun-
Slide 90: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q23 & 1H23 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 30 JUNE 2023 (GEL MILLION) 2023 2024 2025 2026+ Total Large portfolio companies 85.5 172.0 51.5 100.2 409.2 Retail (pharmacy)1 57.7 60.0 25.8 48.8 192.3 Hospitals 22.8 112.0 25.7 51.4 211.9 Medical Insurance 5.0 - - - 5.0 I
Slide 92: Value Creation in Private Portfolio | 2Q23
VALUE CREATION IN PRIVATE PORTFOLIO | 2Q23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 205.6 Performance buy-outs / exits and FX 2Q23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 145,951 Water Utility 4,000 GEL MILLION Total Listed and Observable Portfolio Companies -
Slide 93: Value Creation in Private Portfolio | 1H23
VALUE CREATION IN PRIVATE PORTFOLIO | 1H23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 282.5 Performance buy-outs / exits and FX 1H23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 166,791 Water Utility 4,000 Total Listed and Observable Portfolio Companies - - - 170,791
Slide 94: NAV Statement | 2Q23
NAV STATEMENT | 2Q23 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Mar-23 ს Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Jun-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 830,077 145,951 - - (93,182) - - 882,846 6.4% Wat
Slide 95: NAV Statement | 1H23
NAV STATEMENT | 1H23 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Dec-22 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Jun-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 830,463 166,791 - - (114,408) - -
Slide 96: Income Statement | 2Q23 & 1H23
INCOME STATEMENT | 2Q23 & 1H23 Income statement GEL ‘000, unless otherwise noted 2Q23 2Q22 Change 1H23 1H22 Change Dividend income 81,316 32,226 NMF 86,503 34,421 NMF Buyback dividend 40,345 - NMF 61,571 - NMF Interest income 5,015 9,364 -46.4% 9,991 18,150 -45.0% Realised / unrealised gain/(loss) o
Slide 97: 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 98: 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 99: 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