Georgia Capital PLC · LSE:CGEO
Georgia Capital — 9M23 Earnings Presentation
99 slides from Georgia Capital's earnings presentation, November 2023
Slide 1: Investor Presentation 3Q23 & 9M23 Results
INVESTOR PRESENTATION 3Q23 & 9M23 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 30-Sep-23
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-SEP-23 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 4 Rank Shareholder name Ownership 9.0% 3 1. Management & Management Trust 14.14% UK 1 2. Gemsstock Ltd 10.77% 26.5% Management 3 3. Allan Gray Ltd 6.78% 14.1% 4. Lazard Asset Man
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 30-SEP-231 PORTFOLIO VALUE BREAKDOWN AT 30-SEP-23 36% Portfolio value Net debt Listed & Observable 3,479 GEL million 294 GEL million 64% Private US$ 1,299 million US$ 110 million STARTING FROM 2024, PLATFORM COSTS NAV NAV per share ARE TARGETED AT MAXIMUM 0.
Slide 5: Our portfolio overview as at 30-Sep-23
OUR PORTFOLIO OVERVIEW AS AT 30-SEP-23 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,251m Value: GEL 2,228m 36% of the total portfolio value 64% 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 3Q23 & 9M23 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 3Q23 & 9M23 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)
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 3Q23 & 9M23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 15: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Change Change Now US$ Million 30-Sep-22 30-Jun-23 (y-o-y) (q-o-q) 30-Sep-23 NCC RATIO IMPROVED BY 8.5 PPTS Cash and liquid funds 133.9 -72.0% 153.2 -75.5% 37.5 Y-O-Y AND 1.5 PPTS Q-O-Q TO Loans issued 89.3 -96.3% 6.7 -50.2% 3.3 15.9% AS AT 30-SEP-23 Accrued divi
Slide 16: 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 365.9 345.7 AT THE GCAP HOLDCO LEVEL 42.5% We are targeting to reduce the balance of “net 39.8% 248.5 250.1 debt and guarantees issued
Slide 17: 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 18: Deleveraging across our private portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 30-JUN-23 CHANGE 30-SEP-23 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 1.7x +0.6x 2.3x Up to 1.5x 3.1x AS OF 30-SEP-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 3.4x 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 4 years. 1891,039 2001,062
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 3.1x 2.6x 2.8x 2.7x 2.8x 2.6x 2.6x 2.5x 2.6x 2.4x ➢ LTM EBITDA up 13.1% as at Sep-23 from Dec-19. GEL MILLION 8 89 8 131 124 92 93 92 184 186 197 224 235 47
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 3Q23 & 9M23 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: 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 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 3Q23 & 9M23 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 3Q23 & 9M23 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 29
Slide 30: Significant progress on deleveraging
SIGNIFICANT PROGRESS ON DELEVERAGING NET DEBT1 DOWN 25% Y-O-Y AND DOWN 13% Q-O-Q TO US$ 110 MILLION AT 30-SEP-23 SIGNIFICANT DECREASE IN NET DEBT, Net debt (US$ million) 1 REFLECTING STRONG CASH GENERATION 350 Gross debt (US$ million) AND SUCCESSFUL REFINANCING OF 500 EUROBONDS 300 363 400 250 304 ✓
Slide 31: Commencement of new US$15 million share buyback program
COMMENCEMENT OF A NEW US$ 15 MILLION SHARE BUYBACK AND CANCELLATION PROGRAM DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMMES nity Inve st tu or GCAP SHARE m pp en ko t op 2.7 PRICE IS AT CORE Buybac 360o 2.3 portunity ANALYSIS OF OUR DECISION 0.9 1.0 c. 1.2 1 NUMBER OF SHARES MAKING 36.0 8.1
Slide 32: Update on the expansion of the education business
UPDATE ON THE EXPANSION OF THE EDUCATION BUSINESS NUMBER OF LEARNERS AND TOTAL LEARNER CAPACITY DEVELOPMENT OVERVIEW NUMBER OF LEARNERS CAGR: 37.4% 1st grader INCREASED AT 23.1% CAGR intakes 245 246 279 548 873 1st grader intakes OVER THE LAST 4 YEARS 8,500 7,270 8,000 7,500 7,000 ▪ In 3Q23, the tot
Slide 33: Strategic reorganisation across our healthcare businesses
STRATEGIC REORGANISATION ACROSS OUR HEALTHCARE BUSINESSES CURRENT STRUCTURE NEW STRUCTURE FACILITIES SHARE IN EBITDA TO CAPTURE EMERGING OPPORTUNITIES HOSPITALS ARISING FROM NEW GOVERNMENT Large portfolio REGULATIONS, ENSURE UNINTERRUPTED LARGE AND SPECIALTY 6 c.60% BUSINESS OPERATIONS, AND ENHANCE
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 12.3% CAGR SINCE DEC-18 +12.3% CAGR IN US$ AND GBP TERMS, NAV PER SHARE CAGR STANDS AT 12.3% AND 13.1%, +17.4% RESPECTIVELY 77.0 63.0 65.6 46.8 48.1 44.3 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Sep
Slide 35: 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 31 Free cash flow is determined by subtracting 1
Slide 36: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 36
Slide 37: NAV per share (GEL) movement in 3Q23
NAV PER SHARE (GEL) MOVEMENT IN 3Q23 +7.3% -1.5% -0.3% -0.4% +5.1% NAV PER SHARE (GEL) UP 5.1% Q-O-Q TO 76.99 ▪ NAV per share (GEL) performance in 3Q23 mainly reflects continued recovery in BoG’s share price. In GBP: +6.0% In GBP: 22.12 23.44 37
Slide 38: Portfolio value development in 3Q23
PORTFOLIO VALUE DEVELOPMENT IN 3Q23 PORTFOLIO VALUE UP 3.5% TO GEL 3.5 BILLION IN 3Q23 ▪ The value of the listed and observable portfolio increased by GEL 209.4 million. ▪ The value creation in the private portfolio LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE amounted to negative GEL 46.
Slide 39: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) * LIQUIDITY DOWN BY 75.4% IN US$ TERMS IN 9M23, 300 300 365 365 300 150 150 MAINLY REFLECTING THE REDEMPTION OF GCAP’S EUROBONDS IN 3Q23, WHICH WAS PARTIALLY FINANCED BY GCAP’S EXISTING LIQUID FUNDS Cash receipt
Slide 40: Dividend income outlook
DIVIDEND INCOME OUTLOOK CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES GEL 202 MILLION DIVIDEND INCOME IN 9M23 +2.2x DIVIDENDS INCOME RECURRING ONE-OFF TOTAL (GEL million) 202 BOG 96.8 29.4 126.2 Of which, cash dividends 52.8 - 52.8 Of which, buyback dividends GEL MILLION 44.0 29.4 73.4 73 Retail (Ph
Slide 41: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 41
Slide 42: Aggregated revenue development across private portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED REVENUE UP +9.6% 6.7% Y-O-Y IN 3Q23 1,532 1,398 +6.7% 433 ▪ 9M23 aggregated revenue up 9.6% y-o-y 350 525 492 126 125 162 152 40 41 301 322 923 973 3Q22 3Q23 9M22 9M23 Other portfolio companies Other portfolio companies I
Slide 43: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED EBITDA UP +4.2% 3.8% IN 3Q23 AND UP 4.2% Y-O-Y IN 9M23 193 185 30 36 +3.8% ➢ 3Q23 and 9M23 performance reflects a 41 number of regulatory changes, particularly 44 within the healthcare sector, which in the 67 70 short-term
Slide 44: 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) -34.6% 153 31-Dec-22 310 -15.6% -27.0% 100 70 30-Jun-23 +4.6% 51 250 30-Sep-23 262 3Q22 3Q23
Slide 45: Portfolio value as of 30-Sep-23
PORTFOLIO VALUE AS OF 30-SEP-23 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 91% IS OF OUR PORTFOLIO 31% 5% 20% 11% 10% 7% 5% 3% 9% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 GBP 36.90 OPTION MULTIPLE: 12.5x 11.8x-9.3x 12.5x 16.5x6 12.8x7 BGEO VALUATION2 9.1x LTM EV/EBITDA3 LTM P/E4 EV/EBITD
Slide 46: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 46
Slide 47: 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 48: Bank of Georgia overview: stock price and financial metrics
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 36.9 Change 40.0 as of 30-Sep-23 2015 2016 2017 2018 2019 2020 2021 2022 3Q22 3Q23 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 49: 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 50: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 394 11 1 1 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou Children’s apparel – Carter’s › Adding more pharmacies ›
Slide 51: 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% 29.7% 31.0% 29.5% 30.2% 25.3 27.1 28.8 27.6 29.0 31.0 7.5 7.
Slide 52: Retail (pharmacy) business operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +3.3% KEY DRIVERS 600 581 +8.5% ▪ The y-o-y increase in revenues and EBITDA reflects the expansion of the pharmacy chain and GEL MILLION +5.2% franchise stores, along with overall econ
Slide 53: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +2.6% +28.0% NMF -6.1% 9.2x 9.1x 30-Jun-23 30-Sep-23 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 (excl. IFRS 16) 2.3x GEL million, un
Slide 54: Hospitals business overview
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW State healthcare spending, GEL millions 3,500 13% 14% 3,000 11% 12% 10% 10% 10% 2,500 9% 9% 9% 9% 10% 2,000 800 8% 1,500 946 980 6% • Country’s expenditure on healthcare as a 964 % of GDP reached 4.0%. 1,000 4% 829 1,680
Slide 55: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 3Q23 9M23 BED OCCUPANCY RATE Operating cash flow GEL 21.7m GEL 14.8m Average length of stay 3 5.4 5.2 5.6 5.7 5.1 4.6 4.7 5.1 5.0 250.0% Change y-o-y NMF -19.5% 2.5 200.0% EBITDA to cash 2
Slide 56: Hospitals business operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +2.0% HOSPITALS 220 KEY DRIVERS 216 ▪ To address the oversupply of beds and GEL MILLION enhance the quality of the healthcare industry -3.8% in Georgia, the government introduced a new facility regulation, effe
Slide 57: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -5.2% +3.9% 0.0% -10.4% 12.9x 12.5x 30-Jun-23 30-Sep-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless noted otherwise
Slide 58: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 MARKET SHARE 1H23 (GROSS PREMIUMS WRITTEN) (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia (0.7% penetration in property and casu
Slide 59: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | 9M23 COMBINED RATIO MTPL Channel 3% +22.8ppts +10.1ppts Partnerships with 99.5% 89.7% Financial 77.5% 82.1% 81.5% 80.8% 79.2% 76.7% 79.6% 73.9% 72.6% 75.2% 75.4% Institutions 31% 41.6% 63.3
Slide 60: Insurance business operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE NET INCOME DEVELOPMENT +21.0% +2.8% 152 INSURANCE KEY DRIVERS 126 P&C Insurance 67 17 18 ▪ The increase in insurance revenue is mainly GEL MILLION +22.0% 54 1 driven by the growth in the motor, credit life and 4 agricultural insuran
Slide 61: P&C insurance business valuation overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q -3.3% 11.8x 10.1x 30-Jun-23 30-Sep-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Sep-23 30-Jun-23 Change
Slide 62: 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 63: 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 SEPTEMBER 2023 Generation, 55.4 58.6 18.5 15.2 23.6 24.9 97.4 98.7 91.0 94.0 46.0 62.7 33.9 66.3 64.5 203.2 221.2 GWh Gross Commis
Slide 64: Renewable energy business operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -2.3% RENEWABLE ENERGY -9.9% 12 11 KEY DRIVERS +2.8% +0.1% -2.7% 9 ▪ A 2.8% y-o-y increase in 3Q23 revenue 5 US$ MILLION 5 8 reflects the net impact of: o A 1.3% y-o-y decrease in electricity 5 6 generati
Slide 65: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 EQUITY FAIR VALUE COMPOSITION AT 30-SEP-23 (US$ MILLION) (US$ MILLION) Change q-o-q 0.3% -3.1% 2.9% 21 Total value US$ 97 77 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 66: 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 67: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Sep-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, 81.2% COVID impact 0.5%
Slide 68: Education business operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT EDUCATION +25.1% -6.4% 36 KEY DRIVERS GEL MILLION ▪ A 14.7% y-o-y increase in 3Q23 revenues were driven by: 29 +14.7% o organic growth through strong intakes and a 8.6 ramp-up of the utilization; 8.0 o expansion
Slide 69: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -8.5% +2.5% -3.3% -8.6% -7.2% 16.3x 16.5x 30-Jun-23 30-Sep-23 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Sep-23 30-Ju
Slide 70: 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 71: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (3Q23) DIAGNOSTICS (3Q23) 18 17 Market share by number of registered patients* c.164,000 3.4 Community Clinics Polyclinics Number of patients served Average number of tests per Out
Slide 72: Clinics & diagnostics business operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT -1.3% CLINICS & DIAGNOSTICS 65 65 KEY DRIVERS +33.8% 16 13 ▪ The y-o-y increase in total revenues in 3Q23 is 11 GEL MILLION attributable to higher demand for non-COVID +7.9% 49 51 NMF 8 1 regular a
Slide 73: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 IMPLIED LTM EV/EBITDA DEVELOPMENT2 (GEL MILLION) Change q-o-q -3.3% 3.4% -7.5% -8.0% 18.8x 12.8x 30-Jun-23 30-Sep-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless not
Slide 74: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 74
Slide 75: Real GDP up by 6.8% in 9M23, inflation below target
REAL GDP UP BY 6.8% IN 9M23, WHILE INFLATION HAS FALLEN BELOW THE TARGET PRELIMINARY ECONOMIC GROWTH STANDS AT 6.8% Y-O-Y IN 9M23, ANNUAL INFLATION STANDING BELOW THE 3% TARGET SINCE APRIL 2023, FOLLOWING TWO YEARS OF DOUBLE-DIGIT EXPANSION (10.5% AND 10.1% IN WITH SEPTEMBER 2023 INFLATION PRINTED A
Slide 76: ICT sector boosts GDP growth and foreign currency flows
ICT SECTOR: BOOSTS GDP GROWTH AND EMERGES AS A NEW SOURCE FOR THE FOREIGN CURRENCY FLOWS THE INFORMATION AND COMMUNICATION (ICT) SECTOR SHARE IN GDP EXPORTS OF ICT SERVICES (US$ MLN) STANDING AT 4.9% IN 2Q23, AS OPPOSED TO 3.1% IN 2018-2021 Information and Communication, Value Added (GEL mln, LHS) T
Slide 77: The growing importance of Middle Corridor
THE GROWING IMPORTANCE OF “MIDDLE CORRIDOR” RE-EXPORT INCREASED BY 89% Y-O-Y IN 9M23, AND BY 199% COMPARED TO THE REVENUES FROM ROAD USAGE CHARGE (RUC) INCREASED BY 59% Y-O-Y AND BY 9M21, MOSTLY DUE TO THE INCREASED RE-EXPORT OF MOTOR CARS 176% COMPARED TO 9M21 Motor cars Cigars and cigarettes Medic
Slide 78: Improved external position
IMPROVED EXTERNAL POSITION TOTAL FX INFLOWS INCREASED BY 17.8% Y-O-Y AND AMOUNTED TO US$ 11.1 BLN CURRENT ACCOUNT DEFICIT HAS NARROWED SIGNIFICANTLY AS FDI CONTINUES IN 9M23 TO FULLY FINANCE THE DEFICIT Export of goods Money Transfers Tourism revenues Total FX Inflows Goods, net Services, net Invest
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 60.2% 10 60% 8 50% 47.6% 41.8% 4 39.8% 37
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 3Q23 & 9M23 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, CHAIRMAN & CEO 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 Director i
Slide 84: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 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 business operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT -12.8% RENEWABLE ENERGY 34 -19.2% 30 -3.9% 16 GEL MILLION -9.1% 27 14 -9.0% 22 15 15 8 8 13 -15.8% 12 7 6 19 16 3Q22 3Q23 9M22 9M23 3Q22 3Q23 9M22 9M23 PPA Non-PPA Total revenue KEY OPERATING HIGHLIGHTS 3
Slide 86: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 EQUITY FAIR VALUE COMPOSITION AT 30-SEP-23 (GEL MILLION) (GEL MILLION) Change q-o-q +2.6% -0.9% +5.3% 56 Total value 261 205 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 85.0% 83.6% 83.2% 150.0 95.0% 74.3% 73.4% 76.9% 77.5% 73.4% 78.0% 77.4% 75.6% 69.7% GEL million 75.0% +23.7% 300 +6.6% T
Slide 89: Medical insurance business valuation overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q23 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +14.0% -17.2% +6.1% 10.4x 9.3x 30-Jun-23 30-Sep-23 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA (excl. IFRS 16) GEL million, unless noted oth
Slide 90: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q23 & 9M23 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 SEPTEMBER 2023 (GEL MILLION) 2023 2024 2025 2026+ Total Large portfolio companies 25.9 252.4 51.8 100.8 430.9 Retail (pharmacy)1 17.1 125.2 26.1 49.5 217.9 Hospitals 8.8 127.2 25.7 51.3 213.0 Investment stage portfolio c
Slide 92: Value creation in private portfolio | 3Q23
VALUE CREATION IN PRIVATE PORTFOLIO | 3Q23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 174.9 Performance buy-outs / exits and FX 3Q23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 221,148 Water Utility - GEL MILLION Total Listed and Observable Portfolio Companies - - -
Slide 93: Value creation in private portfolio | 9M23
VALUE CREATION IN PRIVATE PORTFOLIO | 9M23 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 457.4 Performance buy-outs / exits and FX 9M23 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 387,939 Water Utility 4,000 Total Listed and Observable Portfolio Companies - - - 391,939
Slide 94: NAV statement | 3Q23
NAV STATEMENT | 3Q23 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 30-Jun-23 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Sep-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 882,846 221,148 - - (11,785) - - 1
Slide 95: NAV statement | 9M23
NAV STATEMENT | 9M23 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-Sep-23 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 830,463 387,939 - - (126,193) - -
Slide 96: Income statement | 3Q23 & 9M23
INCOME STATEMENT | 3Q23 & 9M23 Income statement GEL ‘000, unless otherwise noted 3Q23 3Q22 Change 9M23 9M22 Change Dividend income 41,876 32,019 30.8% 128,379 66,440 93.2% Buyback dividend 11,785 - NMF 73,356 - NMF Interest income 4,304 8,165 -47.3% 14,296 26,315 -45.7% Realised / unrealised gain/(l
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