Georgia Capital PLC · LSE:CGEO
Georgia Capital — H1 2022 Earnings Presentation
101 slides from Georgia Capital's earnings presentation, August 2022
Slide 1: Investor Presentation 2Q22 & 1H22 results
INVESTOR PRESENTATION 2Q22 & 1H22 results
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: GCAP shareholders at 30-Jun-22
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-JUN-22 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Rank Shareholder name Ownership Other 13.3% 1. Gemsstock Ltd 10.18% 2. Allan Gray Ltd 6.54% 1 Management UK 2 9.2% 3. Coeli Frontier Markets AB 4.38% 31.6% 4. Lazard Asset Management L
Slide 4: Our portfolio overview as at 30-Jun-22
OUR PORTFOLIO OVERVIEW AS AT 30-JUN-22 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 609m Value: GEL 2,097m 23% of the total portfolio value 77% of the total portfolio value LARGE PORTFOLIO COMPANIES NON-CYCLICAL BUSINESSES, CLOSE TO GEL 300 MLN+ VALUE BANK OF RETAIL HOSPITALS INSURAN
Slide 5: Strong NAV per share growth
STRONG NAV PER SHARE GROWTH NAV PER SHARE (GEL) STRONG NAV PER SHARE GROWTH WITH 12% CAGR OVER +12% CAGR THE LAST 3 YEARS RUSSIA-UKRAINE WAR -16.4% 63.0 THE OUTLOOK IS EVEN 52.7 STRONGER ON THE BACK OF THE 48.1 44.3 46.8 MEGA GROWTH OPPORTUNITIES ACROSS OUR PORTFOLIO 31/Dec/18 31/Dec/19 31/Dec/20 31
Slide 6: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 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 2Q22 & 1H22 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 OPPORTUNITIES KEY INVESTMENT METRICS AT GCAP LEVEL IRR MOIC ROIC IS AT THE CORE OF OUR DECISION MAKING WHEN OUR PORTFOLIO COMPANIES ARE INVESTING OR DIVESTING ASSETS / BUSINESSES KEY METRIC FOR REINVESTMENT DECI
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 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 15: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Pro-forma US$ million 31-Mar-22 Change 30-Jun-22 Change 11-Aug-22 30-Jun-22 NCC REPRESENTS AN AGGREGATED Cash and liquid funds 231.7 -2.2% 226.5 NMF 226.6 VIEW OF ALL CONFIRMED, AGREED Loans issued1 6.8 26.7% 8.7 0.7% 8.7 AND EXPECTED CAPITAL OUTFLOWS Accrued di
Slide 16: NCC development overview
NCC DEVELOPMENT OVERVIEW OVER THE CYCLE NCC / Total portfolio value (“NCC ratio”)1 TARGET OUR TARGET IS TO BRING 42.5% 39.8% 31.9% 28.2% 27.0% 23.5% 15.0% DOWN THE NCC RATIO BELOW 15% BY DEC-2025 385.8 365.9 345.7 50.0 50.0 50.0 45.6 48.0 US$ MILLION 75.6 290.2 250.4 249.0 242.1 267.9 50.0 50.0 50.0
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 15% 40% 360o ANALYSIS MEANINGFUL TACTICAL CASH BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY WE PERFORM 360-DEGREE ANALYSIS EACH TIME WE CAPITAL ALLOCATIONS MAKE
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-22 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 1.7x -0.1x 1.6x Up to 1.5x 2.8x AS OF 30-JUN-22
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 ➢ Despite headwinds from COVID-19, leverage profile across our private portfolio GEL MILLION companies improved over the last 2 years. 189 1,039 200 1,062 225 1,025 268 998 258 9
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 2.6x 2.6x 2.4x 623 ➢ LTM EBITDA up 21% as at Jun-22 from Dec-19; 603 624 124 89 131 GEL MILLION ➢ Excluding the minority buyout agreement at Retai
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 2Q22 & 1H22 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: Upcoming split of the Chairman and CEO roles
UPCOMING SPLIT OF THE CHAIRMAN AND CEO ROLES RATIONALE FOR THE SEPARATION OF THE ROLES ➢ The combined Chairman and CEO role served the Company well in the start-up phase of Georgia Capital ➢ As the Company has continued to mature, it has now become clear that the best structure to further institutio
Slide 24: 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 businesses owned through GHG,
Slide 25: Our recent ESG developments
OUR RECENT ESG DEVELOPMENTS KEY ESG ACTIVITIES AT GCAP 01 02 03 04 05 ALIGNING OUR ESG BECOMING A SIGNATORY IMPLEMENTING THE ENHANCING OUR ESG DUE GCAP’S FIRST DISCLOSURES WITH TCFD OF THE UNITED NATIONS RESPONSIBLE DILIGENCE AND SUSTAINABILITY (“UN”) GLOBAL COMPACT INVESTMENT POLICY REPORTING PROCE
Slide 26: 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 Retail (Pharmacy) 3, 8, 12 5, 11 Hospitals 3, 8, 12 5, 11 Insurance 3, 8, 9 1, 10 Renewable Energy
Slide 27: Impact investing: success story in the water utility business
IMPACT INVESTING: OUR SUCCESS STORY IN THE WATER UTILITY BUSINESS KEY ESG DEVELOPMENTS ENVIRONMENTAL ENVIRONMENTAL AND SOCIAL & SOCIAL IMPACT IMPACT • Implementation of the Environmental PROVIDING 24-HOUR WATER AND WASTEWATER and Social Management System (“ESMS”) SUPPLY SERVICES TO C.1.4 MILLION RES
Slide 28: 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 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 29: Our strategic priorities
DELEVERAGING GCAP HOLDCO BY BRINGING DOWN THE NCC RATIO BELOW 15% REDUCE AND MAINTAIN PORTFOLIO COMPANIES’ LEVERAGE TO RESPECTIVE TARGETED LEVELS EXECUTE THE SEPARATION OF THE CHAIRMAN AND CEO ROLE AND ENSURE A SMOOTH TRANSITION ESG SET MEASURABLE ESG TARGETS AT BOTH GCAP HOLDCO AND PORTFOLIO COMPAN
Slide 30: 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 31: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 31
Slide 32: NAV per share (GEL) development overview
NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW DESPITE THE NEGATIVE IMPACT OF % Change q-o-q +4.9% +19.5% +27.2% -2.7% +16.4% +9.7% +5.5% THE ONGOING RUSSIA-UKRAINE +17.5% WAR, NAV PER SHARE STILL REMAINS SIGNIFICANTLY ABOVE RUSSIA-UKRAINE WAR PRE-COVID-19 LEVELS -16.5% +4.4% +0.2% COVID-19 IMPACT 63.03 5
Slide 33: NAV per share (GEL) movement in 2Q22
NAV PER SHARE (GEL) MOVEMENT IN 2Q22 NAV PER SHARE (GEL) -4.9% +3.5% +0.8% +1.5% -0.4% -0.2% +0.2% +4.4% +4.6% UP 0.2% IN 2Q22 ▪ NAV per share (GBP) up 14.4% in 2Q22, reflecting a 14.2% appreciation of GEL against GBP PRIVATE PORTFOLIO ▪ As of 11-Aug-22, NAV per share (GEL) up 4.6% and up 30.0% in G
Slide 34: NAV per share (GEL) movement in 1H22
NAV PER SHARE (GEL) MOVEMENT IN 1H22 NAV PER SHARE (GEL) -5.6% -4.0% -6.6% +3.0% -0.7% -2.5% -16.4% +4.4% -12.7% DOWN 16.4% IN 1H22 ▪ The decrease in NAV per share (GEL) reflects the impact of adverse market movements on portfolio valuations: PRIVATE PORTFOLIO • GEL 276.2 million value reduction in
Slide 35: Portfolio value development in 2Q22
PORTFOLIO VALUE DEVELOPMENT IN 2Q22 PORTFOLIO VALUE UP 3.7% -0.2% -1.6% +5.5% TO GEL 2.7 BILLION IN 2Q22 ▪ GEL 142.6 million loans issued predominantly to our beverages and real estate businesses were converted LISTED AND OBSERVABLE PRIVATE PORTFOLIO COMPANIES into equity in 2Q22, due to the GEL MIL
Slide 36: Portfolio value development in 1H22
PORTFOLIO VALUE DEVELOPMENT IN 1H22 PORTFOLIO VALUE DOWN 25.2% IN 1H22, REFLECTING THE SALE OF THE WATER UTILITY BUSINESS FOR -6.9% -9.3% +4.7% CASH AND UNREALISED LOSSES FROM PORTFOLIO VALUATIONS GEL MILLION LISTED AND OBSERVABLE PRIVATE PORTFOLIO COMPANIES PORTFOLIO COMPANIES 36
Slide 37: NCC ratio development overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC RATIO DOWN BY 1.2 PPTS TO 27.0% IN 2Q22 385.8 365.9 345.7 ▪ Pro-forma NCC ratio down to 23.5%, reflecting the anticipated decrease in the guarantees issued as well as the movements in BoG share price and FX. 42.5% 39.8% 250.4
Slide 38: Progress on the current share buyback and cancellation programme
PROGRESS ON THE CURRENT SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMME 2.8 MILLION SHARES (c.6% OF ISSUED 0.9 TOTAL CAPITAL) HAVE BEEN REPURCHASED 0.8 UNDER THE CURRENT US$ 25 MILLION 0.5 2.8 SHARE BUYBACK AND CANCELLATION 0.4 MILLION 7.4 0.3 PROGRAM
Slide 39: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GCAPS LIQUIDITY UP BY 2.7X IN 1H22, REFLECTING THE +2.7x CASH RECEIPT FROM THE WATER UTILITY BUSINESS SALE +1.1% 232 234 ONGOING STRONG LIQUIDITY AT THE GCAP LEVEL AND ROBUST CAPITAL MANAGEMENT FRAMEWORK LED TO AN UPGRADE IN OUR CORPORAT
Slide 40: Dividend income outlook
DIVIDEND INCOME OUTLOOK DIVIDEND INCOME FROM PORTFOLIO COMPANIES (GEL MILLION) 90-100 2019 1 44.0 28.9 72.9 ROBUST DIVIDEND INCOME OUTLOOK IN 2022 +2.1% GEL MILLION 2020 29.9 INCLUDES PRIVATE PORTFOLIO COMPANIES AND BOG IN 2022 2021 59.9 14.5 74.4 GEL 55.6-65.6 MILLION DIVIDEND INCOME REMAINING IN 2
Slide 41: Aligning our opex ratio with NAV platform costs
ALIGNING OUR OPEX RATIO WITH NAV PLATFORM COSTS TARGETED AT MAXIMUM TARGETED AT MAXIMUM c.2% OF MCAP 0.75% OF NAV CURRENT TARGET TARGET FROM 2024 Management fee expense ratio: 2019 – 1.8%; 2020 – 1.8%; 2021 – 1.7%. 41
Slide 42: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW ▪ 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 QUARTERLY +36.0% REVENUE UP 4.6% Y-O-Y +9.3% IN 2Q22 AND UP 48.6% 905 FROM 2Q20 +48.6% 828 198 +4.6% 666 150 ▪ 1H22 aggregated revenue up 9.3% y-o-y 85 and up 36.0% from 1H20 115 79 450 470 56 86 122 317 45 42 64 29 224 3
Slide 44: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION AGGREGATED EBITDA DOWN +30.0% 20.0% Y-O-Y IN 2Q22 AND -12.1% DOWN 12.1% Y-O-Y IN 1H22 133 20 117 KEY DRIVERS +35.8% 11 90 32 ▪ 2Q22 EBITDA of Retail (Pharmacy) down 11.4% -20.0% 30 y-o-y (up 15.7% y-o-y in 1H22), mainly 3 reflecting
Slide 45: Aggregated cash balance & net operating cash flow
AGGREGATED CASH BALANCE & NET OPERATING CASH FLOW DEVELOPMENT ACROSS PRIVATE PORTFOLIO ORGANIC TRANSITION TO REVENUE GROWTH STRATEGY FROM PREVIOUSLY ADOPTED CASH PRESERVATION STRATEGY TOTAL AGGREGATED NET OPERATING CASH FLOW TOTAL AGGREGATED CASH BALANCE OF PRIVATE BUSINESSES (GEL MILLION) (GEL MILL
Slide 46: Portfolio valuation overview
PORTFOLIO VALUATION OVERVIEW NEW STARTING FROM 1H22, c.90% OF THE TOTAL PORTFOLIO IS VALUED EXTERNALLY % SHARE IN TOTAL The valuation of our large and PORTFOLIO COMPANY FY21 1H22 PORTFOLIO AT investment stage portfolio 30-JUN-22 companies is performed by an Listed and Observable portfolio companies
Slide 47: Portfolio value as of 30-Jun-22
PORTFOLIO VALUE AS OF 30-JUN-22 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 90% IS OF OUR PORTFOLIO 17% 6% 25% 18% 9% 6% 6% 4% 10% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 MULTIPLE: GBP 13.06 OPTION 8.3x 10.5x 11.0x – 14.5x 11.1x 15.3x 9.8x6 BGEO VALUATION2 LTM EV/EBITDA3 LTM EV/EBITDA3 L
Slide 48: Portfolio highlights | June 2022
PORTFOLIO HIGHLIGHTS | 30 JUNE 2022 Gross investment of GEL 1.7b Net investment of GEL 85m Portfolio fair value of GEL 2.7b Listed and Observable assets Private portfolio companies Original 129 220 390 11 150 71 investment MOIC1 7.1 3.6 3.8 23.4 1.3 2.1 1,309 GEL million 456 230 200 153 172 152 121
Slide 49: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 49
Slide 50: Bank of Georgia overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ INVESTMENT RATIONALE • The first entity from Georgia to be listed on the premium segment of the Main Market of the Market opportunity London Stock Exchange (LSE: BGEO) since February 2012. Banking sector assets, loans and depos
Slide 51: Bank of Georgia overview
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) 40.00 Change 2015 2016 2017 2018 2019 2020 2021 2Q21 2Q22 35.00 y-o-y GBP 13.06 30.00 as of 30-Jun-22 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 4.7% 5.3% +0.6 ppts 25.00 20.0
Slide 52: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 366 7 Pharmacies in total The Body Shop stores › Expending retail footprint in Georgia › c.400 pharmacies in 5 years 358 in Georgia 8 in Armenia 1 › International expansion
Slide 53: 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 Margin enhancement 25.3 27.1 28.8 27.6 29.0 7.2 7.4 13.7 15.0 25.5% 25.4% 26.0% 25.1% 29.0% 24.2
Slide 54: Retail (pharmacy) operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +22.6% +4.9% KEY DRIVERS +33.6% 391 373 ▪ 2Q22 and 1H22 revenues of Retail (Pharmacy) GEL MILLION +14.4% reflect the recalibration of product prices due -3.5% 319 to GEL’s appreciation
Slide 55: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +1.7% +19.1% -22.4% +2.1% 8.1x 8.3x 31-Mar-22 30-Jun-22 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 GEL million, unle
Slide 56: 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 Vienna Insurance Group 615 4% increased to manage the
Slide 57: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) Bed occupancy rate CASH FLOW HIGHLIGHTS1 2Q22 1H22 Average length of stay 5.4 5.2 5.6 5.7 5.4 5.1 5.6 5.4 Operating cash flow GEL 4.0m GEL 14.6m Change y-o-y -72.9% -22.3% -8.3ppts -2.1ppts EBITDA to cash conver
Slide 58: Hospitals operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +40.3% -1.4% HOSPITALS 152 150 KEY DRIVERS +55.9% ▪ 2Q22 and 1H22 performance of the business -10.6% GEL MILLION 107 +51.1% reflects the suspension of COVID contracts by the Government in 1Q22 and the subsequen
Slide 59: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q -7.7% -3.5% -12.7% -8.8% 10.3x 10.5x 31-Mar-22 30-Jun-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwis
Slide 60: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 MARKET SHARE 1Q22 (GROSS PREMIUMS WRITTEN) (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia 500 442 (0.8% penetration in property
Slide 61: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | 1H22 COMBINED RATIO MTPL Channel 3% -0.6ppts -1.1ppts 82.1% 81.5% 80.8% 80.2% 79.6% 82.0% 80.9% Partnerships with 73.9% 77.5% 72.6% 75.2% 75.4% Financial Institutions 30% Direct Sales & 41.
Slide 62: Insurance operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW EARNED PREMIUMS NET NET INCOME DEVELOPMENT +17.7% +9.1% 81 INSURANCE 69 75 KEY DRIVERS +25.6% 35 P&C Insurance -15.5% 35 ▪ Increase in earned premiums net in 2Q22 +9.3% GEL MILLION 35 and 1H22 is driven by the growth in the 42 -30.8% -6.5% credit lif
Slide 63: P&C insurance business valuation overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +8.2% 10.6x 11.0x 31-Mar-22 30-Jun-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Jun-22 31-Mar-22 Change
Slide 64: Renewable energy business overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE MARKET OPPORTUNITY ▪ Growth in electricity consumption has been ~6.5x more in TWhs than growth in electricity supply during last 10 years. ELECTRICITY SUPPLY AND CONSUMPTION (TWH) ▪
Slide 65: 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 2022 Generation, Gross 33.8 40.1 34.3 33.8 20.5 23.5 88.6 97.4 35.4 41.4 47.5 44.4 39.6 43.2 122.5 129.1 Commissioned Install
Slide 66: Renewable energy operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +1.9% RENEWABLE ENERGY -5.8% +4.8% 20 19 19 +1.0% KEY DRIVERS -7.6% 6 +10.2% ▪ 2Q22 and 1H22 performance mainly 3 -4.3% 14 GEL MILLION 13 8 reflects GEL’s appreciation against US$ 12 4 -5.9% and decrease
Slide 67: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 EQUITY FAIR VALUE COMPOSITION AT 30-JUN-22 (GEL MILLION) (GEL MILLION) Change q-o-q -1.5% -5.6% +5.1% 42 Total value 172 130 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA
Slide 68: 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 69: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Jun-22 PRIVATE K-12 MARKET IN GEORGIA Capacity utilization, 96.5% Number of learners in private K-12 market Turnover of private K-12 market Excluding expansion2 COVID imp
Slide 70: Education operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +58.8% EDUCATION +36.4% +70.8% KEY DRIVERS 22 GEL MILLION +35.7% ▪ 2Q22 and 1H22 revenue and EBITDA +81.3% growth reflects higher total enrolments, 28.9% 16 +108.1% increase in average fee per learner and 9 14 s
Slide 71: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +25.5% -27.8% +12.7% +25.8% +12.1% 15.3x 12.0x 31-Mar-22 30-Jun-22 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 30-Jun-22
Slide 72: Clinics & diagnostics business overview
Private large 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 rate of 3.8
Slide 73: Clinics & diagnostics business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS DIAGNOSTICS (1H22) 19 17 Market share by number of registered patients 0.6 million 2.3 Community Clinics Polyclinics GHG clinics 601,000 21% Number of patients served Average number of tests
Slide 74: Clinics & diagnostics operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT CLINICS & DIAGNOSTICS +88.6% +3.2% +101.3% KEY DRIVERS +74.1% ▪ Similar to the hospitals business, our clinics +84.2% -31.7% 45 47 GEL MILLION -21.2% business was also impacted by the 10 12 -62.1%
Slide 75: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q -8.4% +23.4% -28.9% -18.9% 9.8x 9.0x 31-Mar-22 30-Jun-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless no
Slide 76: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 76
Slide 77: Real GDP continuing double-digit growth in 2022
REAL GDP CONTINUING DOUBLE-DIGIT GROWTH IN 2022 REAL GDP UP 10.5% Y-O-Y IN 1H22 50% 45% REAL GDP UP 10.5% Y-O-Y IN 1H22 40% 26% 30% 19% 18.0% KEY DRIVERS 20% 14.6% 10% 10% 12% 11.6% 10% 7% 7% 7.2% 10% ➢ Strong external demand supplemented by the migration effect, as 4% 10.6% 0% remittance inflows gr
Slide 78: Georgian Lari appreciating since mid-2021
GEORGIAN LARI – APPRECIATING SINCE MID-2021 APPRECIATING SINCE MID-2021, BRIEFLY INTERRUPTED AFTER THE RUSSIAN INVASION OF UKRAINE, GEL HAS NOW STRENGTHENED CLOSE TO PRE-PANDEMIC LEVELS AGAINST USD Sources: NBG GEL APPRECIATION DRIVERS 3.7 3.5 ➢ Record high remittance inflows, increasing by 65% y-o-
Slide 79: Net external earnings turned positive in 2Q22
NET EXTERNAL EARNINGS* TURNED POSITIVE IN 2Q22 LARGELY ON THE BACK OF REMITTANCE INFLOWS EXTERNAL EARNINGS (US$ MILLION) TERMS OF TRADE HAVE REACHED 112% ON AVERAGE IN 1H22, COMPARED TO 101% IN 2021 (JAN 2017=100) Money transfers (Inflows) Money transfers (Outflows) Tourism revenues Exports Imports
Slide 80: Inflation to decelerate gradually in 2H 2022
INFLATION TO DECELERATE GRADUALLY IN THE 2ND HALF OF 2022 INFLATION Y-O-Y VS. INFLATION TARGET Sources: NBG, GeoStat INFLATION TO DECELERATE BUT REMAIN 16 Headline Inflation Core Inflation Target CLOSE TO DOUBLE DIGITS IN 2022 12 11.5 ➢ Annual inflation reached 11.5% in July 2022 (12.9% on average i
Slide 81: Fiscal deficit to fall to 3.5% in 2022
FISCAL DEFICIT TO FALL TO 3.5% IN 2022 ON THE BACK OF EXCEPTIONAL REVENUE PERFORMANCE AND MODERATING EXPENSES PUBLIC DEBT Sources: MoF FISCAL SUPPORT HAS BEGUN MODERATING External public debt to GDP, % Total public debt to GDP, % 59.9% ➢ Fiscal support moderated in 2022, with current expenditures 60
Slide 82: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 2Q22 & 1H22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 82
Slide 83: Our robust corporate governance framework
OUR ROBUST CORPORATE GOVERNANCE FRAMEWORK BOARD OF DIRECTORS COMPOSITION IRAKLI GILAURI, CHAIRMAN & CEO DAVID MORRISON, Experience: Formerly BGEO Group CEO; Up to 20 years SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Formerly Director at
Slide 84: Georgia Capital's highly experienced management team
Georgia Capital’s highly experienced management team Georgia Capital Management Giorgi Ketiladze, Managing Director, Investments Georgia Capital Irakli Gilauri, Chairman & CEO Georgia Capital Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as Formerly Investm
Slide 85: Medical insurance business overview
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW Largest medical insurer in the country with 23%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 86: 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) Retention rate within the Group1 (%) 300 19.2% 23.3% 34.7% 39.4% 37.4% 37.3% 36.3% 36.5% 38.9% 36.2% 37.5% 250 76.9% 77.5% 78.0% 7
Slide 87: Medical insurance business valuation overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 2Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q -7.9% -12.4% -9.4% 14.0x 14.5x 31-Mar-22 30-Jun-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted No No No 30-Jun-22
Slide 88: Detailed NAV per share movement in 2Q22
DETAILED NAV PER SHARE (GEL) MOVEMENT IN 2Q22 NAV PER SHARE (GEL) UP 0.2% IN 2Q22 -4.9% 0.0% 3.0% 0.5% 0.2% 0.6% 1.5% -0.4% -0.2% 0.2% -1.4% PRIVATE PORTFOLIO LISTED AND OBSERVABLE PORTFOLIO In GBP: In GBP: 12.92 +14.4% 14.78 88
Slide 89: Detailed NAV per share movement in 1H22
DETAILED NAV PER SHARE (GEL) MOVEMENT IN 1H22 NAV PER SHARE (GEL) DOWN 16.4% IN 1H22 -5.6% 0.0% -4.4% 0.4% -7.0% 0.4% 3.0% -0.7% -2.5% -16.4% -9.6% PRIVATE PORTFOLIO LISTED AND OBSERVABLE PORTFOLIO In GBP: In GBP: 15.10 -2.1% 14.78 89
Slide 90: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 30 JUNE 2022 (GEL MILLION) 2022 2023 2024 2025+ Total Large portfolio companies 107.2 68.6 80.5 37.0 293.3 Retail (pharmacy) - 12.0 10.3 25.7 48.0 Hospitals 107.2 56.6 70.2 11.3 245.3 Medical Insurance - - - - - Investment
Slide 91: NAV statement snapshot in 2Q22
NAV STATEMENT SNAPSHOT IN 2Q22 GEL ‘000, UNLESS OTHERWISE NOTED 31-Mar-22 30-Jun-22 Change % GEORGIA CAPITAL 2Q22 RESULTS Total Listed and Observable Portfolio 612,871 608,719 -0.7% Companies Value Large Portfolio Companies 1,410,482 1,389,193 -1.5% Investment Stage Portfolio Companies 447,247 443,9
Slide 92: NAV statement snapshot in 1H22
NAV STATEMENT SNAPSHOT IN 1H22 GEL ‘000, UNLESS OTHERWISE NOTED 31-Dec-21 30-Jun-22 Change % GEORGIA CAPITAL 1H22 RESULTS Total Listed and Observable Portfolio 681,186 608,719 -10.6% Companies Value Large Portfolio Companies 2,249,260 1,389,193 -38.2% Investment Stage Portfolio Companies 461,140 443
Slide 93: Value creation in private portfolio | 2Q22
VALUE CREATION IN PRIVATE PORTFOLIO | 2Q22 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses (14.4) Performance buy-outs / exits and FX 2Q22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 5,038 Water Utility 13,608 GEL MILLION Total Listed and Observable Portfolio Companies 18
Slide 94: Value creation in private portfolio | 1H22
VALUE CREATION IN PRIVATE PORTFOLIO | 1H22 Operating Greenfields / Multiple Change Value Creation in (465.3) Portfolio Businesses Performance buy-outs / exits and FX 1H22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG (202,669) Water Utility 13,608 GEL MILLION Total Listed and Observable Portfolio Compani
Slide 95: NAV statement | 2Q22
NAV STATEMENT | 2Q22 1.Value 2a. 3.Operating 4. Liquidity 2c. GEL thousand unless otherwise noted 31-Mar-22 2b. Buybacks Management/ FX / 30-Jun-22 Change % Creation Investments Dividends Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 473,479 5,038 - - (22,798) - - 45
Slide 96: NAV statement | 1H22
NAV STATEMENT | 1H22 1.Value 2a. 3.Operating 4. Liquidity 2c. GEL thousand unless otherwise noted 31-Dec-21 2b. Buybacks Management/ FX / 30-Jun-22 Change % Creation Investments Dividends Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 681,186 (202,669) - - (22,798) -
Slide 97: Income statement | 2Q22 & 1H22
INCOME STATEMENT | 2Q22 & 1H22 Income statement GEL ‘000, unless otherwise noted 2Q22 2Q21 Change 1H22 1H21 Change Dividend income 32,226 9,691 NMF 34,421 14,430 NMF Interest income 9,364 6,120 53.0% 18,150 10,617 71.0% Realised / unrealised (loss)/ gain on liquid funds (1,197) 1,687 NMF (11,435) 1,
Slide 98: Multiple of invested capital (MOIC) | 30 June 2022
MULTIPLE OF INVESTED CAPITAL (MOIC) | 30-JUNE-2022 Gross GEL million Sell down Dividends Fair Value MOIC Realized MOIC Investment (1) (2) (3) (4) (2+3+4) / (1) (2+3) / (1) Listed and Observable Investments 349 835 268 609 4.9x 3.2x Bank of Georgia Group PLC 129 287 171 456 7.1x 3.5x Water Utility 22
Slide 99: Valuation peer group
VALUATION PEER GROUP RETAIL P&C (PHARMACY) HOSPITALS INSURANCE • NEUCA S.A. | Poland • Medicover AB (publ) | 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
Slide 100: 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 101: 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