Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2018 Earnings Presentation
77 slides from Georgia Capital's earnings presentation, June 2018
Slide 1: Georgia-focused investment company: 1Q18 results
Georgia-focused investment company Investor Presentation: 1Q18 results
Slide 2: Forward looking statements
Forward looking statements Disclaimer 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, p
Slide 3: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Investment portfolio 4. Georgian Macro Overview 5. Appendices
Slide 4: Georgia Capital at glance
Georgia Capital at glance Georgia Capital portfolio Investment company focused on investing in and developing businesses in Georgia LSE listed Private Early stage Bank of Georgia Hospitality & (Banking) Energy Beverages (managed by GGU) Commercial real estate (managed by Teliani) 19.9% (managed by m
Slide 5: Early stage portfolio – 3x1,000 target
Georgia Capital’s early stage portfolio – 3x1,000 target Target Current | 31 March 2018 1,000 Georgia Capital targets to have 1,000 hotel rooms in its Currently 760 rooms of which 152 are operational and 608 are in the pipeline hotel rooms hospitality business portfolio over the next 3 years 1,000 h
Slide 6: 1Q18 performance highlights
1Q18 performance highlights 1Q18 Revenue y-o-y growth 1Q18 EBITDA y-o-y performance(2) +27.5% +10.6% ► 1Q18 revenue, adjusted to include revenue of the discontinued ► 1Q18 EBITDA, adjusted to include EBITDA of the discontinued operations(1), was GEL 296.7mln, up 16.3% y-o-y operations, was GEL 46.1m
Slide 7: Georgia Capital – 1Q18 results highlights: Income Statement
Georgia Capital – 1Q18 results highlights Consolidated Income Statement Quarterly income statement change change GEL thousands, unless otherwise noted 1Q18 1Q17 4Q17 y-o-y q-o-q Gross utility and energy profit 20,850 17,527 19.0% 22,869 (8.8%) Gross insurance profit 6,852 6,890 (0.6%) 6,305 8.7% Gro
Slide 8: Georgia Capital – 1Q18 results highlights: Balance Sheet
Georgia Capital – 1Q18 results highlights Consolidated Balance Sheet For the quarter ended change change GEL thousands, unless otherwise noted 31-Mar-18 31-Mar-17 31-Dec-17 y-o-y q-o-q Cash and cash equivalents 528,697 359,629 47.0% 374,301 41.2% Amounts due from credit institutions 37,667 174,248 (
Slide 9: Key portfolio highlights | March 2018
Key portfolio highlights | 31 March 2018 GEL 2.1 billion GEL 418 million GEL 240 million Portfolio value | 31-Mar-2018 Liquid assets | 31-Mar-2018 Net debt |31-Mar-2018 Estimated fair value of 19.9% equity holding ► Cash at bank of GEL 341 million ► Georgia Capital issued inaugural US$ 300mln LSE Ma
Slide 10: Georgia Capital's US$300mm Eurobond issuance
Georgia capital’s US$300mm Eurobond issuance First ever non-sovereign owned corporate international bond from Georgia Notes: US$ 300 million, 6 year, 6.125% Eurobonds Georgia Capital’s risk management policy key Listing: Irish Stock Exchange, GEM market measures Notes rating: B2 (Moody’s) / B+
Slide 11: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Investment portfolio 4. Georgian Macro Overview 5. Appendices
Slide 12: Georgia Capital – strategy
Georgia Capital – strategy Georgia Capital strategy is based on three pillars 1 2 3 Capital allocation & Georgia 3-fundamental enablers Managing investments Leading economy in the region Access to capital Capital allocation Diversified non-commodity reliant economy with consistently high GDP Hig
Slide 13: Access to a Market with 2.8bn population without Customs Duties
1 2 3 Capital allocations & 3-fundamental Georgia managing enablers investments Access to a Market with 2.8bn population without Customs Duties Georgia is the second country in the world, after Switzerland, with FTAs with both EU and China Georgia highlights WTO member since 2001 Very simple and
Slide 14: Ground floor opportunity
1 2 3 Ground floor opportunity Georgia 3-fundamental enablers Capital allocations & managing investments Georgian Economy 1990-2017: collapse, stabilization, acceleration, crisis, rebound, sustainable economic growth and finally strong future growth potential Real GDP Index, 1990=100 160 140 120 100
Slide 15: Georgia Capital value proposition – 3 fundamental enablers
Georgia Capital value proposition – 1 2 3 Capital allocations & 3-fundamental enablers 3-fundamental Georgia managing enablers investments 1 2 Superior access to capital Access to management Only investment company in Georgia Reputation among talented managers as the - “best group to work for”
Slide 16: Capital allocation & harvesting investments
1 2 3 Capital allocation & harvesting investments Capital allocations & 3-fundamental Georgia managing enablers investments Georgia Focused Diversified Investment Company Targeting Minimum IRR of 25% 1 Highly disciplined approach to unlock value through investments, targeting High-multiple busin
Slide 17: Georgia Capital's board of directors
Georgia Capital’s board of directors Board of Directors - Georgia Capital PLC Irakli Gilauri, Chairman & CEO David Morrison, Senior Independent Director Experience: formerly BGEO Group CEO; MS in banking from Experience: formerly Director at Sullivan & Cromwell with a CASS Business School, London; B
Slide 18: Highly experienced management team
Georgia Capital’s highly experienced management team Georgia Capital Management Irakli Gilauri, Chairman & CEO Nikoloz Gamkrelidze, CEO, Georgia Healthcare Group Formerly CEO of BGEO Group since 2011, joined as CFO of Bank of Previously deputy CEO (Finance) of BGEO Group. Our healthcare business sto
Slide 19: Portfolio management principles
1 2 3 Portfolio management principles Capital allocations & 3-fundamental Georgia managing enablers investments Investment Stage Early Late Exit Acquisition/Entrance Target to Exit Possible Completion of Exit Discovery Young Portfolio Large Portfolio Mature Portfolio Companies Companies Companies Re
Slide 20: Healthcare and pharmacy business (GHG) overview
Healthcare and pharmacy business (GHG) overview Key facts Market opportunity Market Leader 26.4% market share by number of beds (3,320) Total healthcare market (including healthcare services and pharmacy) 30% market share by Pharma sales. GEL million The widest population coverage: over 3/4 of
Slide 21: Bank of Georgia (BoG) Overview
Bank of Georgia (BoG) Overview Key facts Market opportunity High standards of transparency and governance Banking sector assets, loans and deposits 40 34.6 The first entity from Georgia to be listed on the premium segment of the Main Market of the London Stock Exchange 35 30.1 (LSE:BGEO) since Feb
Slide 22: Water utility and energy business (GGU) overview
Water utility and energy business (GGU) overview Key facts Market opportunity Utility GWh 22,000 6.1 Natural monopoly 17,000 Twh Stable cash collection rates 12,000 Growing dividend payment capacity 7,000 RAB-based tariff methodology 2,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 23: Housing development & Hospitality business (m²) overview
Housing development & Hospitality business (m²) overview Key facts Market opportunity Outstanding track record Generated IRR ranging from 31% to 329% on 7 completed residential projects Tourist inflow expected to double over the next 3 years Cost advantage through the vertical integration of its
Slide 24: P&C insurance business (Aldagi) overview
P&C insurance business (Aldagi) overview Key facts Market opportunity Industry investment rationale Penetration (GPW I GDP) & Density (GPW per Capita USD)(1) Underpenetrated insurance market Lack of digitalisation providing first-mover advantage Compulsory border TPL kicked in from 1 March 201
Slide 25: Beverage business (Teliani valley) overview
Beverage business (Teliani valley) overview Key facts Market opportunity Industry investment rationale Low consumption per capita compared to peers High growth sector which has doubled during last 5 years to GEL 1.8 billion Beer consumption in Peer Countries 2016 (l/capita) High multiple busines
Slide 26: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Investment portfolio • m2 Real Estate 4. Georgian Macro Overview 5. Appendices
Slide 27: m2 financial highlights: Income statement
m2 financial highlights Income statement Housing development Hospitality Consolidated1 Change Change Change Change Change Change GEL thousands, unless otherwise noted 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q Revenue from apartments sales 27,861 18,399 51.4% 30
Slide 28: m2 financial highlights: Balance Sheet
m2 financial highlights Balance Sheet Change Change GEL thousands, unless otherwise noted Mar-18 Mar-17 Dec-17 y-o-y q-o-q Cash and cash equivalents 107,822 48,636 121.7% 34,751 NMF Amounts due from credit institutions 208 179 16.2% 114 82.5% Prepayments 45,656 17,842 155.9% 34,932 30.7% Inventories
Slide 29: m2 financial highlights: Cash Flow
m2 financial highlights Cash Flow Change Change GEL thousands, unless otherwise noted 1Q18 1Q17 4Q17 y-o-y q-o-q Cash flows from operating activities Proceeds from apartments sales 21,489 27,740 (22.5%) 33,042 (35.0%) Cash outflows for development of apartments (24,165) (22,362) 8.1% (18,399) 31.3%
Slide 30: m2 – a leading player on Georgian real estate market
m2 – a leading player on Georgian real estate market Housing Development – Market of US$ 1.1 bln1 1 Affordable housing 2 Franchise m2 3 Construction Management Fully Develop land bank with total Develop third-party land plots under Earn Construction management fees value of US$ 29 mln and c.3,6973 m
Slide 31: Targeting to spin-off yielding properties as a listed REIT
Targeting to spin-off yielding properties as a listed REIT managed by m2 Hospitality & Commercial real estate – Market of US$ 6.8bln1 1 Rent-earning assets 2 Hotels Grow Portfolio of rent-earning assets through Develop hotels with combined room-count of residential developments/opportunistic acquisi
Slide 32: m2 housing development business performance highlights
m2 housing development business performance highlights Strong sales performance 1Q18 apartments sales track record 94% of apartments are sold-out 1800 1,691 2 1600 11* 217 35 1400 1,202 # of apartments 2 1200 6 5 153 3 1000 164 800 1,680 600 1,049 400 200 0 Inventory Tamarashvili Kartozia Skyline Ka
Slide 33: m2 – affordable housing track record
m2 – affordable housing track record Operating/Financial data for completed and on-going projects at 31 March 2018 Deferred Actual / Number of Number of revenue Number of Planned Recognised as Deferred Number of apartments apartments Start date Construction Total Sales expected to be Land value Real
Slide 34: m2 housing development business – market opportunity
m2 housing development business – market opportunity Average household size and home ownership | 2016 # of housing units developed by time periods Source: Eurostat, Colliers International Source: Colliers International 93% 96% 90% 90% 86% 90% 83% 82% 81% Thousands 69% 123 88 3.3 2.8 2.7 2.7 2.6 2.4
Slide 35: m2 hospitality & commercial real estate performance highlights
m2 hospitality & commercial real estate business performance highlights Strong Performance Yielding portfolio growth Yielding portfolio composition 30 30 30 30 63.7% 1 1 US$ millions US$ millions 18 16 18 16 15 15 6 2 12 14 14 15 14 14 1 31-Dec-16 31-Dec-17 31-Mar-18 31-Dec-16 31-Dec-17 31-Mar-18 Pr
Slide 36: m2 hospitality & commercial real estate – market opportunity
m2 hospitality & commercial real estate business – market opportunity Arrivals of tourists and tourism revenue | Georgia Key performance metrics of hotels | Tbilisi Arrivals at airports (mln) | Georgia Source: Georgian National Tourism Administration Source: STR Source: Georgian Civil Aviation Agenc
Slide 37: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Investment portfolio • GGU – Georgia Global Utilities 4. Georgian Macro Overview 5. Appendices
Slide 38: GGU Financial highlights: Income statement
GGU Financial highlights Income statement Utility Energy1 Eliminations Consolidated Change Change Change Change Change Change GEL thousands, unless otherwise noted 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q Revenue from water supply to legal 19,08
Slide 39: GGU Financial highlights: Balance sheet
GGU Financial highlights Balance sheet Utility Energy Consolidated GEL thousands, unless otherwise noted Mar-18 Mar-17 change Dec-17 change Mar-18 Mar-17 change Dec-17 change Mar-18 Mar-17 change Dec-17 Change y-o-y q-o-q y-o-y q-o-q y-o-y q-o-q Cash and cash equivalents 36,120 2,867 NMF 55,950 (35%
Slide 40: GGU Financial highlights: Cash flow
GGU Financial highlights Cash flow GEL thousands, unless otherwise noted Change Change 1Q18 1Q17 y-o-y 4Q17 q-o-q Cash received from customers 35,743 30,582 16.9% 44,768 (20.2%) Cash paid to suppliers (11,966) (11,330) 5.6% (11,387) 5.1% Cash paid to employees (3,591) (3,859) (6.9%) (3,265) 10.0% In
Slide 41: GGU - water utility and energy business overview
GGU - water utility and energy business overview Utility Energy Operating HPPs GWP - Tbilisi Water Zhinvali HPP (130.0MW) Gardabani Tetrikhevi HPP Saguramo HPP Pshavela HPP2 Rustavi Water Mtskheta Water WWTP1 (12.0MW) (4.4MW) (2.9MW) At a glance Committed projects Bodorna HPP Mestiachala HPP Zoti HP
Slide 42: GGU - water utility and energy business performance highlights
GGU - water utility and energy business performance highlights Strong performance EBITDA Revenue composition EBITDA Margin 50% 53% 45% 36* 32* 19 4 GEL millions 29* 3 GEL millions 14 3 15 2 1 2 33 30 16 27 13 13 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 EBITDA Utility EBITDA Energy *Includes eliminations Revenu
Slide 43: Georgian electricity market overview
Georgian electricity market overview Electricity supply and consumption, 2017 Actual and forecasted consumption GWh Source: ESCO GWh 23,000 1,500 6.1 TWh 18,000 1,000 13,000 500 8,000 3,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Generation, renewables Generation, TPPs Generation, actual G
Slide 44: Georgian utility market overview
Georgian utility market overview Largely privatized utility sector with high barriers to entry Coverage Coverage by by population population ■ Utilities sector represents ~3% of total economic output in Georgia and is constantly growing at a sustainable rate (CAGR 8.3% in 2006 – 2016) Water ■ Bulk o
Slide 45: GGU: A privately-owned natural monopoly
GGU: A privately-owned natural monopoly Business strategy Current standing Medium term goal Targeting IPO in 2020-2021 REVENUE 1Q18: GEL 30.2m 1 Utility EBITDA 1Q18: GEL 12.8m EBITDA 2021: GEL 75mln+ Dividend provider REVENUE 1Q18: GEL 3.1m 2 Energy EBITDA 1Q18: GEL 1.7m EBITDA 2021: GEL 120mln+ Val
Slide 46: Agenda
Agenda 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Portfolio companies • Aldagi - P&C insurance 4. Georgian Macro Overview 5. Appendices
Slide 47: Aldagi financial highlights: Income Statement
Aldagi financial highlights Income Statement Change Change GEL thousands, unless otherwise noted 1Q18 1Q17 4Q17 y-o-y q-o-q Gross premiums written 18,114 18,907 (4.2%) 17,962 0.8% Earned premiums, gross 19,950 18,520 7.7% 21,891 (8.9%) Earned premiums, net 14,925 14,436 3.4% 16,578 (10.0%) Insurance
Slide 48: Aldagi financial highlights: Balance Sheet
Aldagi financial highlights Balance Sheet Change Change GEL thousands, unless otherwise noted Mar-18 Mar-17 Dec-17 y-o-y q-o-q Cash and cash equivalents 2,071 6,143 (66.3%) 4,186 (50.5%) Amounts due from credit institutions 29,273 27,450 6.6% 25,968 12.7% Investment securities 4,423 2,562 72.6% 4,18
Slide 49: Aldagi financial highlights: Cash flow
Aldagi financial highlights Cash flow Change Change GEL thousands, unless otherwise noted 1Q18 1Q17 y-o-y 4Q17 q-o-q Cash flows from operating activities Insurance premium received 17,000 15,558 9.3% 21,107 (19.5%) Reinsurance premium paid (3,639) (2,685) 35.5% (2,952) 23.3% Insurance benefits and c
Slide 50: P&C insurance market overview
P&C insurance market overview Market & Aldagi Revenue Market Share (earned premium, gross) Market PL & Combined Ratio YE17 Market Aldagi Market share 38% 227 CAGR 2010-2017 202 Market – 11% 179 Total Market Profit Aldagi – 17% GEL 19.5 mln 16.5 * 116% 142 108% 21% 115 122 96% 99% 106 91% 90% 92% 100
Slide 51: Aldagi – P&C insurance business performance highlights
Aldagi – P&C insurance business performance highlights Earned Premium, gross (GEL ‘000) Earned Premium, gross | Composition Profit (GEL ‘000 ) +7.7% y-o-y +4.1% y-o-y GEL 20 mln Government, Other, 12% GEL 3.9mln 2% 21,891 4,169 3,902 18,520 19,950 Credit Life, 3,750 13% Motor, 37% 8,478 1,283 1,955
Slide 52: Aldagi – P&C insurance business overview
Aldagi – P&C insurance business overview Well-diversified business model Motor Property Credit life Liability Other Key Segments CAR (2), Commercial property, Financial risk, employer's liability, Motor own damage, motor third party Household Property, Machinery professional indemnity, GTPL(3), Loan
Slide 53: Aldagi - P&C insurance business targets & priorities
Aldagi - P&C insurance business targets & priorities 2017 ALDAGI PROFIT 2022 16.3 MLN GEL Retail 5.8mln GEL 50.0 10.5mln GEL mln GEL Corporate 0mln GEL SME Retail | Penetration SME | Penetration Zero Corporate | Penetration Local MTPL insurance to be introduced Underpenetrated market Good inve
Slide 54: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Portfolio companies • Teliani – beverage business 4. Georgian Macro Overview
Slide 55: Teliani financial highlights: Income Statement
Teliani financial highlights Income Statement Change Change GEL thousands; unless otherwise noted 1Q18 1Q17 4Q17 y-o-y q-o-q Wine Business 4,593 3,446 33.3% 7,164 (35.9%) Beer Business 4,921 - NMF 4,736 3.9% Distribution Business 2,902 2,940 (1.3%) 5,383 (46.1%) Revenue 12,416 6,386 94.4% 17,283 (28
Slide 56: Teliani financial highlights: Balance Sheet
Teliani financial highlights Balance Sheet Change Change GEL thousands unless otherwise noted Mar-18 Mar-17 y-o-y Dec-17 q-o-q Cash and cash equivalents 9,055 17,085 (47.0%) 17,455 (48.1%) Amounts due from financial institutions 3,330 6,742 (50.6%) 4,381 (24.0%) Trade and other receivables 10,714 5,
Slide 57: Teliani - Beverage business targets & priorities
Teliani - Beverage business targets & priorities Goal Become leading beverages producer and distributor in Caucasus Wine business Distribution business Beer production business Russian Federation Caspian Black Sea Sea Poti Georgia Batumi Tbilisi Rustavi Azerbaijan Baku Turkey Armenia Business C. 732
Slide 58: Teliani - Beverage business performance highlights
Teliani - Beverage business performance highlights Exclusive Heineken producer in Caucasus Highly concentrated beer market Strong performance of local beer brands Domestic market segmentation 1Q18 Local Beer Gross sales dynamics Local beer brands: ICY & Black Lion Launched 3.1 Efes Georgia 13.0% mar
Slide 59: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Portfolio companies 4. Georgian Macro Overview 5. Appendices
Slide 60: Sovereign Ratings with Stable Outlook and Favourable Macro Fundamentals
Sovereign Ratings with Stable Outlook and Favourable Macro Fundamentals Key Ratings Highlights General Facts Rating Agency Rating Outlook Affirmed Ba2 Stable March 2018 BB- Stable May 2018 Georgia BB- Positive March 2018 Georgia is favorably placed among peers Country Country Rating Rating Outlook A
Slide 61: Georgia's key Economic Drivers
Georgia’s key Economic Drivers Top performer globally in WB Doing Business over the past 12 years Liberal economic Liberty Act (effective January 2014) ensures a credible fiscal and monetary framework: policy Public expenditure/GDP capped at 30%; Fiscal deficit/GDP capped at 3%; Public debt/GDP
Slide 62: Institutional Oriented Reforms
Institutional Oriented Reforms Ease of Doing Business | 2018 (WB-IFC Doing Business Report) Economic Freedom Index | 2018 (Heritage Foundation) New Zealand 1 Estonia 7 Singapore 2 US 6 UK 8 Top 9 in Europe region out of 44 Georgia 16 Norway Georgia 8 9 up from 16th in 2017 USA 18 countries Estonia 1
Slide 63: Diversified resilient economy
Diversified resilient economy Gross domestic product Diversified nominal GDP structure, 2017 Source: Geostat Source: Geostat Education Other Agriculture Growth was 5.2% in 1Q18 Healthcare 5% 8% 20 12.6% 16% 5% Construction 6% 9% 9.6% 9.4% 12% Public 15 administration 7.2% 5.8% 6.2% 6.4% 4.6% 5.0% 8%
Slide 64: Room for Further Job Creation
Room for Further Job Creation Unemployment rate down 0.2ppts y/y to 11.8% UNDP Human Development Index Sources: UNDP in 2016 0.77 0.77 Sources: GeoStat 0.76 2,000 20% 0.76 0.75 1,800 15% 0.74 0.74 1,600 0.73 10% 1,400 1,200 5% 1,000 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 2009
Slide 65: Inflation targeting since 2009
Inflation targeting since 2009 Inflation y/y vs. inflation target Inflation y/y Sources: NBG, GeoStat Source: GeoStat 8 8 12.0 Inflation target is 3 % for 2018-2020 years 12.0 7.0 7.0 3 3 2.0 2.0 -2 -2 Jan-15 Mar-15 May-15 Nov-15 Jan-16 Mar-16 May-16 Nov-16 Jan-17 Mar-17 May-17 Nov-17 Jan-18 Mar-18
Slide 66: Current account deficit supported by FDI
Current account deficit supported by FDI Current account balance (% of nominal GDP) Exports and Re-exports, US$ bln Sources: NBG Source: NBG 30 20 3.0 3.0 4.0 20 10 2.6 3.2 3.4 2.0 10 0 1.6 0 1.3 1.1 3.1 -10 1.3 3.1 -10 -5.8 0.9 2.5 2.5 3.1 -10.3 -8.6 0.7 2.6 -10.9 -10.6 -11.7 -10.7 -12.0 -20 1.9 2.
Slide 67: Diversified sources of capital
Diversified sources of capital Strong foreign investor interest Visitors and tourism revenues on the rise Sources: GeoStat Sources: GNTA, NBG 1.5 mln visitors in 1Q18, up 15.5% y/y 3,100 8 2,000 25% Tourism inflows up 29% y/y to US$ 560 mln in 1Q18 2,600 17.2% 20% 6 1,500 15.1% 2,100 12.3% 12.3% 11.
Slide 68: Diversified foreign trade
Diversified foreign trade Contribution to import growth Foreign Demand, 2017 Source: NBG Source:, Geostat 30% 30% 20% 20% Food and beverages 0% 12% Industrial supplies 10% 10% 26% 0% 0% 11% Fuels and lubricants -10% -10% 3% Capital goods 4% -20% -20% Transport equipment -30% -30% Consumer goods Jul-
Slide 69: Prudent monetary policy ensures macro-financial stability
Prudent monetary policy ensures macro-financial stability International reserves Monetary policy rate Sources: NBG Sources: NBG 3500 3500 9% 9% 3000 3000 8% 8% 2500 2500 7% 7% 2000 2000 6% 6% 1500 1500 5% 5% 1000 1000 4% 4% 500 500 3% 3% 0 0 2% 2% -500 -500 1% 1% Jan-04 May-07 Jan-09 May-12 Jan-14 M
Slide 70: Floating exchange rate - policy priority
-200 -150 -100 -50 0 50 100 150 200 250 20 40 60 80 0 100 120 140 160 180 Dec-12 Jan-14 220 -80 Sources: NBG Sources: NBG Mar-13 Apr-14 Jun-13 Jul-14 Sep-13 -120 Oct-14 Dec-13 4040 Mar-14 Jan-15 120 EUR/GEL Jun-14 4040 Apr-15 Sep-14 Jul-15 Dec-14 Oct-15 Mar-15 27202020 60 Jun-15 Jan-16 RUB/GEL -15 S
Slide 71: Low public debt
Low public debt Public debt as % of GDP is capped at 60% Breakdown of public debt Sources: MOF 70% 70% 60% 60% 50% 50% 40% 40% Multilateral 30% 30% Domestic External 57% 20% 20% 21% 79% 10% 10% 0% 0% Bilateral 2017E 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2018F 13% Euro
Slide 72: Government 4-pillar of Reforms
Government 4-pillar of Reforms 1 Structural Reforms 2 Promoting Transit & Tourism Hub Tax Reform Roads Corporate income tax reform Plan to finish all spinal projects by 2020 – East-West Highway, other supporting infrastructure Enhancing easiness of tax compliance Rail Capital Market Re
Slide 73: Content
Content 1. 1Q18 results discussion | Georgia Capital 2. Investment strategy & portfolio overview 3. 1Q18 results discussion | Portfolio companies 4. Georgian Macro Overview 5. Appendices
Slide 74: Georgia Capital - consolidated income statement
Georgia Capital - consolidated income statement Quarterly income statement GEL thousands unless otherwise noted 1Q18 1Q17 y-o-y change (%) 4Q17 q-o-q change (%) Utility and energy revenue 30,654 27,236 12.5% 33,286 (7.9%) Cost of utility and energy (9,804) (9,709) 1.0% (10,417) (5.9%) Gross utility
Slide 75: Georgia Capital - consolidated balance sheet
Georgia Capital - consolidated balance sheet For the quarter ended GEL thousands unless otherwise noted 31-Mar-18 31-Mar-17 y-o-y change (%) 31-Dec-17 q-o-q change (%) Cash and cash equivalents 528,697 359,629 47.0% 374,301 41.2% Amounts due from credit institutions 37,667 174,248 (78.4%) 38,141 (1.
Slide 76: Water utility and energy business (GGU) – cash flow
Water utility and energy business (GGU) – cash flow Quarterly cash flow statement GEL thousands unless otherwise noted 1Q18 1Q17 y-o-y change (%) 4Q17 q-o-q change (%) Profit before income tax 6,778 7,019 (3.4%) 9,077 (25.3%) Adjustments for: Depreciation and amortisation 6,117 4,821 26.9% 5,229 17.
Slide 77: Georgia Capital
GEORGIA CAPITAL