Georgia Capital PLC · LSE:CGEO
Georgia Capital — 9M21 Earnings Presentation
106 slides from Georgia Capital's earnings presentation, Nov 16, 2021
Slide 1: Investor Presentation 3Q21 & 9M21 results
INVESTOR PRESENTATION 3Q21 & 9M21 results 16 November 2021
Slide 2: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 2
Slide 3: COVID-19 statistics
COVID-19 STATISTICS COVID-19 CASES: DYNAMICS IN GEORGIA 37.9% OF TOTAL ADULT POPULATION HAS RECEIVED AT LEAST A SINGLE VACCINE DOSE, WHILE 33.9% IS FULLY VACCINATED AS OF 15 NOVEMBER 2021 900 Total cases (LHS) Daily cases (RHS) 7 % OF ADULT POPULATION FULLY 800 VACCINATED 9% 6 700 +30.4 ppts 5 33.9%
Slide 4: Real GDP on track for double-digit growth, up 11.3% y-o-y in 9M21
REAL GDP ON TRACK FOR DOUBLE-DIGIT GROWTH, UP 11.3% Y-O-Y IN 9M21 Real GDP Y-o-Y change 2021 Real GDP change vs 2019 45% REAL GDP UP 5.4% COMPARED TO 9M19 KEY DRIVERS 26% ➢ Expansionary fiscal policy boosting domestic demand and continuing to contribute significantly to GDP growth; 21% 19% ➢ Robust
Slide 5: Fast indicators show recovery sustaining pace
FAST INDICATORS SHOW RECOVERY SUSTAINING PACE Remittances, y/y Remittances, vs 2019 Exports, y/y Exports, vs 2019 Imports, y/y Imports, vs 2019 180% 180% 80% 80% 80% 80% 120% 120% 40% 24% 40% 40% 40% 22% 60% 40% 60% 0% 0% 15% 0% 13% 0% 0% 0% -40% -40% 9% -60% -60% -40% -40% -80% -80% Jan Jan Oct Mar
Slide 6: Georgian Lari - top performer in the region
GEORGIAN LARI - TOP PERFORMER IN THE REGION AS OF 10 NOVEMBER, GEL HAS APPRECIATED BY 3.6% COMPARED TO THE BEGINNING OF THE YEAR AND BY 8.6% COMPARED TO THE YEAR-TO-DATE LOW 170 GEL APPRECIATION DRIVERS 160 150 140 ➢ Record high remittance inflows, increasing by 28% Y-o-Y in 130 9M21 (+36% compared
Slide 7: Inflation to decelerate from the 2nd half of 2022
INFLATION TO DECELERATE FROM THE 2ND HALF OF 2022 Inflation Y-o-Y vs. inflation target Sources: NBG, GeoStat 14 Headline Inflation Target Core Inflation 12.8 14 SUPPLY SIDE PRESSURES PERSIST 12 12 10 10 ➢ We expect inflation to remain high throughout the year, and 8 6.3 8 decelerate after peaking in
Slide 8: Debt and fiscal deficit on course for consolidation
DEBT AND FISCAL DEFICIT ON COURSE FOR CONSOLIDATION Public debt Sources: MoF External public debt to GDP, % Total public debt to GDP, % FISCAL SUPPORT TO MODERATE 59.9% 60% 52.2% 48.5% ➢ Fiscal expenditures grew by 5% y/y in real terms in 9M21 (14% in 50% 47.5% nominal), including a 20% growth (30%
Slide 9: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 9
Slide 10: Georgia Capital shareholders at 30-Sep-21
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-SEP-21 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Rank Shareholder name Ownership 1 M&G Investment Management Ltd Other 5.04% 16.3% USA3 2 Allan Gray Ltd 23.4% 4.97% 3 Schroder Investment Management Ltd 4.46% 4 Coeli Frontier Markets
Slide 11: Our portfolio overview
OUR PORTFOLIO OVERVIEW LISTED ASSETS PRIVATE ASSETS INVESTMENT STAGE PORTFOLIO LISTED ASSETS LARGE PORTFOLIO COMPANIES COMPANIES OTHER ASSETS • Housing Development • Bank of Georgia (BoG) • Healthcare Services (GHG) • Renewable Energy • Hospitality & • Retail (pharmacy) (GHG) • Education Commercial
Slide 12: Our private portfolio at a glance
OUR PRIVATE PORTFOLIO AT A GLANCE DEFENSIVE, HIGH QUALITY ASSETS WITH STRONG AND GROWING CASH FLOW STREAMS EXPECTED TO CLOSE TO GEL STRONG CASH FLOW DOMINANT MARKET BECOME GEL 0.5BLN+ NON-CYCLICAL 0.5BLN+ VALUE GENERATION POSITION IN VALUE Healthcare Services ✓ ✓ ✓ ✓ LARGE PORTFOLIO Retail COMPANIES
Slide 13: Portfolio highlights | September 2021
PORTFOLIO HIGHLIGHTS | 30 SEPTEMBER 2021 Gross investment of GEL 1.6b Net investment of GEL 545m Portfolio fair value of GEL 3.5b Listed assets Large portfolio companies Investment stage portfolio companies Original 129 390 217 11 149 69 investment MOIC1 8.2 4.0 3.3 25.1 1.5 1.8 1,409 GEL million 64
Slide 14: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 14
Slide 15: 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 15
Slide 16: Capital allocation philosophy
CAPITAL ALLOCATION PHILOSOPHY WE ARE TARGETING TO INVEST IN OPPORTUNITIES WHICH GCAP SHARE PRICE IS AT CORE OF PRODUCE GREATER RETURN THAN BUYING GCAP SHARES OUR DECISION MAKING VIS-À-VIS INVESTMENTS We perform 360-degree analysis each time we make a capital allocation decision and compare: 360o • I
Slide 17: Capital allocation philosophy (cont'd)
CAPITAL ALLOCATION PHILOSOPHY (CONT’D) IRR & MOIC1 IS THE KEY DRIVER ROIC IS AT CORE OF DECISION MAKING WHEN OUR PORTFOLIO FOR GCAP TO INVEST IN NEW COMPANIES ARE INVESTING OR DIVESTING ASSETS / BUSINESSES OPPORTUNITIES KEY MONEY MULTIPLES AT GCAP LEVEL KEY METRIC FOR REINVESTMENT DECISION MAKING AT
Slide 18: Enhancement of our strategy announced on 2020 Investor Day
ENHANCEMENT OF OUR STRATEGY AS ANNOUNCED ON 2020 INVESTOR DAY We will be investing in the sectors/opportunities with potential to be GEL 0.5bln in equity value in the next 3-5 years’ time Larger companies will be attractive for international strategic and financial buyers, which will increase the li
Slide 19: Enhanced strategy is to invest in large opportunities
ENHANCED STRATEGY IS TO INVEST IN LARGE OPPORTUNITIES GCAP invests in Georgia in large opportunities, which have a MONETISE potential to become GEL 0.5bln+ in equity value. GCAP develops and grows portfolio companies to equity value of GEL 0.5bln+ and realizes proceeds through exit, as investments m
Slide 20: New priority #1: realizing value of one large investment
NEW PRIORITY #1 ANNOUNCED ON 2020 INVESTOR DAY: REALIZING VALUE OF ONE LARGE INVESTMENT We believe realizing value of one of our large investments will help to validate the value of our portfolio and to reduce discount to NAV Realizing value of Reduce NAV one large investment discount Therefore, we
Slide 21: New priority #2: divestment of other portfolio
NEW PRIORITY #2: DIVESTMENT OF “OTHER” PORTFOLIO Other portfolio includes small companies with limited potential to achieve GEL 0.5 billion equity value SUBJECT TO 360o ANALYSIS “OTHER” PORTFOLIO EXPECTED TO BE DIVESTED IN THE NEXT 2-3 YEARS 21
Slide 22: Renewable energy and education - key investment areas
RENEWABLE ENERGY AND EDUCATION - OUR KEY INVESTMENT AREAS IN THE MEDIUM TERM GRADUALLY MOVING TO TOTAL NET INVESTMENT OF c. US$ 50MLN IDENTIFIED REINVESTMENT PHASE, FROM GCAP OVER THE NEXT 3-5 YEARS1 GIVEN THE STRONG CASH FLOW GENERATION AT OUR INVESTMENT STAGE of which, in 2021 PORTFOLIO COMPANIES
Slide 23: Investing in renewable energy
INVESTING IN RENEWABLE ENERGY INDUSTRY INVESTMENT RATIONALE TOTAL NET INVESTMENT OF c. US$ 36MLN IDENTIFIED FROM GCAP OVER THE NEXT 3 YEARS2 ▪ High margins, dollar linked cash flows ▪ Over the next 3 years we will be launching pipeline projects: wind farms in ▪ Growing market, with 35% of demand sat
Slide 24: Investing in education
INVESTING IN EDUCATION INDUSTRY INVESTMENT RATIONALE TOTAL NET INVESTMENT OF c. US$ 14MLN IDENTIFIED FROM GCAP OVER ▪ Asset light industry THE NEXT 5 YEARS BY 20253 ▪ High quality revenue with high margins ▪ Scaling up to capacity of 21,000 learners through expansion plans in existing schools and M&
Slide 25: Outlook for our private portfolio in line with enhanced strategy
OUTLOOK FOR OUR PRIVATE PORTFOLIO IN LINE WITH ENHANCED STRATEGY New Strategic New Strategic Priority #1 Priority #2 LARGE PORTFOLIO INVESTMENT STAGE PORTFOLIO SMALL COMPANIES COMPANIES COMPANIES (“OTHER ASSETS”) Exit from one large investment Total identified investment of US$ Divestment over the n
Slide 26: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 26
Slide 27: Buyout of minority shareholders in Retail (Pharmacy)
RETAIL (PHARMACY) BUYOUT OF THE MINORITY SHAREHOLDERS IN RETAIL (PHARMACY) INITIAL TERMS RENEGOTIATED TERMS EFFECTIVE DURING 2023 SPREAD OVER THE NEXT 6 YEARS RECONFIRMING 6.00x OUR CONFIDENCE 5.25x EV/EBITDA MULTIPLE 4.50x 360o IN THE VALUE ANALYSIS CREATION POTENTIAL OF THE RETAIL BUSINESS IN LINE
Slide 28: Expansion of the education business in the affordable segment
EDUCATION EXPANSION OF THE EDUCATION BUSINESS IN THE AFFORDABLE SEGMENT CAPACITY DEVELOPMENT HIGHLIGHTS WE ARE SCALING UP OUR AFFORDABLE AND HIGH-QUALITY K-12 EDUCATION IN GEORGIA, IN LINE WITH OUR CAPITAL ALLOCATION PROGRAMME AS +80.1% 760 ANNOUNCED IN NOVEMBER 2020 15% 5,060 800 RECENT INVESTMENT
Slide 29: Other businesses: commercial real estate sales
OTHER BUSINESSES SALES OF US$ 45.0 MILLION COMMERCIAL REAL ESTATE PROPERTIES SINCE JUNE 2021 TRANSACTION DETAILS - US$ 4.6 MILLION PREMIUM TO 31 MARCH 2021 BOOK VALUES ADDITIONAL SALES OF US$ 10.3 MILLION COMMERCIAL REAL ESTATE Premium to gross value PROPERTIES IN SEP-NOV 2021, +11.3% DEMONSTRATING
Slide 30: Fixed-income fund
FIXED-INCOME FUND WE HAVE PROMOTED A FIXED-INCOME FUND, DOMICILED IN LUXEMBOURG FUND OFFERS HIGH YIELD NICHE MARKET AND MOSTLY SOVEREIGN/QUASI-SOVEREIGN RISK FUNDS’ OBJECTIVE IS TO ACHIEVE INVESTMENT STRATEGY ACHIEVED 24% DOLLAR DENOMINATED GROSS RETURN DURING MAY-19 – AUG-21 HIGH SINGLE-DIGIT DOLLA
Slide 31: NAV per share (GEL) development overview
NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW NAV PER SHARE UP 2.0x SINCE THE START OF THE COVID-19 PANDEMIC CONTROLLABLE (PRIVATE) NAV PER SHARE UP 2.5x SINCE THE START OF THE COVID-19 PANDEMIC % Change % Change -25.0% -0.5% +69.3% +22.1% -1.6% +15.8% -35.6% +4.9% +19.5% +27.2% -2.7% +16.4% q-o-q q-o-q
Slide 32: NAV per share (GEL) movement in 3Q21
NAV PER SHARE (GEL) MOVEMENT IN 3Q21 NAV PER SHARE CHANGE % +2.6% +7.3% -0.4% +0.1% +0.4% -0.3% NMF +9.7% NAV PER SHARE (GEL) UP 9.7% IN 3Q21 • NAV per share (GBP) up 13.7% in 3Q21 • 9.7% growth in 3Q21 NAV per share (GEL) mainly reflects value creation across our resilient private portfolio and a 1
Slide 33: NAV per share (GEL) movement in 9M21
NAV PER SHARE (GEL) MOVEMENT IN 9M21 NAV PER SHARE CHANGE % +4.9% +18.8% +1.4% +1.3% +0.5% -1.2% -1.4% +24.2% NAV PER SHARE (GEL) UP 24.2% IN 9M21 • NAV per share (GBP) up 31.0% in 9M21 • 24.2% growth in 9M21 NAV per share (GEL) on the back of strong value creation across our resilient private portf
Slide 34: Aggregated revenue development across private portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO +35.9% AGGREGATED REVENUE +25.8% UP 24.6% Y-O-Y IN 3Q21 AND UP 34.4% +34.4% 1,423 FROM 3Q19 239 +24.6% 1,130 53 1,047 GEL MILLION 506 198 ▪ 9M21 aggregated revenue 142 52 up 25.8% y-o-y and up 406 89 15 376 35.9% from 9M19 83 17 64 19 13 300 30
Slide 35: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO +50.5% +32.1% AGGREGATED EBITDA +45.4% UP 27.4% Y-O-Y IN 3Q21 +27.4% AND UP 32.1% FROM 298 3Q19 28 109 31 GEL MILLION 8 198 9 205 85 1 ▪ 9M21 aggregated EBITDA 82 11 14 up 45.4% y-o-y and up 5 10 11 32 50.5% from 9M19 12 67 62 91 186 159 239 3Q1
Slide 36: Aggregated cash balance & net operating cash flow
AGGREGATED CASH BALANCE & NET OPERATING CASH FLOW DEVELOPMENT ACROSS PRIVATE PORTFOLIO TOTAL AGGREGATED NET OPERATING CASH FLOW TOTAL AGGREGATED CASH BALANCE OF PRIVATE BUSINESSES (GEL MILLION) (GEL MILLION) +76.6% 31-Dec-19 183 2.1x 2.7x -13.8% +23.9% 289 31-Dec-20 392 249 -0.1% 137 111 30-Jun-21 3
Slide 37: Operating performance: Healthcare Services
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +36.8% +48.6% HEALTHCARE SERVICES 296 +36.5% KEY DRIVERS +53.0% GEL MILLION ➢ The number of admissions up 216 +78.1% 105.1% and 81.1% y-o-y in 3Q21 at 199 +48.0% hospitals and clinics,
Slide 38: Operating performance: Retail (Pharmacy)
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES (CONT’D) REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +28.1% +18.3% RETAIL (PHARMACY) 566 KEY DRIVERS 478 442 +16.5% GEL MILLION ➢ Robust performance of the Retail +31.7% (Pharmacy), reflecting overall improvement in economic acti
Slide 39: Operating performance: Water Utility
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES (CONT’D) REVENUE DEVELOPMENT EBITDA DEVELOPMENT +27.6% +54.0% 152 WATER UTILITY 14 +42.6% +34.6% 119 +91.9% KEY DRIVERS 15 99 GEL MILLION +58.2% ➢ Water supply revenue up 54.9% y-o- +47.5% 97 y, reflecting revised water utili
Slide 40: Operating performance: Insurance
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE LARGE PORTFOLIO COMPANIES (CONT’D) GROSS PREMIUMS WRITTEN NET INCOME DEVELOPMENT +8.6% +15.3% INSURANCE 158 145 KEY DRIVERS 137 -5.8% ➢ Net premiums earned up 18.0% y-o-y in GEL MILLION 59 +12.7% 3Q21, reflecting rebounding demand +0.7% 68 55 and incr
Slide 41: Operating performance: Renewable Energy
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE INVESTMENT STAGE PORTFOLIO COMPANIES REVENUE DEVELOPMENT EBITDA DEVELOPMENT -2.8% 35 34 RENEWABLE ENERGY 1 -6.5% 4 KEY DRIVERS 12 -15.7% 28 ➢ Electricity generation levels down 10 26 9.5% y-o-y in 3Q21, reflecting: GEL MILLION ▪ a) lower generation le
Slide 42: Operating performance: Education
OPERATING PERFORMANCE DEVELOPMENT ACROSS PRIVATE INVESTMENT STAGE PORTFOLIO COMPANIES (CONT’D) REVENUE DEVELOPMENT EBITDA DEVELOPMENT EDUCATION +14.5% KEY DRIVERS GEL MILLION 20 ➢ Revenue up by 6.5% y-o-y in 3Q21, +25.4% reflecting a 15.2% y-o-y growth in 17 average tuition revenue per learner in 9M
Slide 43: Georgia Capital leverage & liquidity profile
GEORGIA CAPITAL LEVERAGE & LIQUIDITY PROFILE LTV RATIO1 IS ON TRACK TO THE TARGETED THRESHOLD OF <30% US$ 133 MILLION LIQUID FUNDS AS OF 30-SEP-21 44.1% 41.9% Pre-COVID average: 22% Cash 33.5% 44 30% 27.9% 28.9% 31.2% 27.4% 51 TOTAL Marketable 20.0% 17.6% 19.2% 25.8% 25.4% securities 133 US$ MILLION
Slide 44: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 44
Slide 45: Portfolio value development in 3Q21
PORTFOLIO VALUE DEVELOPMENT IN 3Q21 PORTFOLIO VALUE UP 6.8% TO GEL 3.47 BILLION IN 3Q21 WATER UTILITY, BOG AND HEALTHCARE SERVICES CONTRIBUTED 79% TO THE TOTAL PORTFOLIO VALUE % SHARE OF LISTED ASSETS GROWTH IN 3Q21 17.7% 18.5% 1% -5% 2% 6% 4 3 -12 14 32% 72 TOTAL PORTFOLIO GEL MILLION 17% 37 VALUE
Slide 46: Portfolio value development in 9M21
PORTFOLIO VALUE DEVELOPMENT IN 9M21 PORTFOLIO VALUE UP 19.3% TO GEL 3.47 BILLION IN 9M21 HEALTHCARE SERVICES, WATER UTILITY AND BOG CONTRIBUTED 73% TO THE TOTAL PORTFOLIO VALUE % SHARE OF LISTED ASSETS GROWTH IN 9M21 18.3% 18.5% 4% 0% 5% 21-1 6% 30 27% 35 152 GEL MILLION 12% 65 TOTAL PORTFOLIO VALUE
Slide 47: Portfolio value as of 30-Sep-21
PORTFOLIO VALUE AS OF 30-SEP-21 % SHARE IN TOTAL PORTFOLIO VALUE: 18% 21% 18% 18% 8% 6% 4% 7% 83% OF OUR PORTFOLIO IS MULTIPLE: BGEO 10.5X 9.0X 9.2X 12.0X – 12.3X 10.3X 12.5X VALUED EXTERNALLY1 PRICE ON LSE GBP 15.54 LTM EV/EBITDA2 LTM EV/EBITDA3 LTM EV/EBITDA2 LTM P/E4 EV/EBITDA5 LTM EV/EBITDA 724
Slide 48: Bank of Georgia overview
Listed portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ INVESTMENT RATIONALE Market opportunity ▪ The first entity from Georgia to be listed on the premium segment of the Main Market of the London Stock Exchange (LSE: BGEO) since February 2012. Banking sector assets, loans and depos
Slide 49: Bank of Georgia overview
Listed portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price Stock price performance performance Financial metrics (GEL million) 40.00 35.00 GBP 15.54 30.00 2015 2016 2017 2018 2019 2020 3Q20 3Q21 Change as of 30-Sep-21 25.00 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.8% 5.0% +0.2pp
Slide 50: Georgian healthcare market overview
Private large portfolio companies EXTERNALLY VALUED GEORGIAN HEALTHCARE MARKET OVERVIEW GROWTH IN HEALTHCARE SERVICES MARKET EXPECTED TO CONTINUE STATE HEALTHCARE BUDGET IS INCREASING FOR THE LAST SEVERAL YEARS Double digit growth on the back of favorable dynamics expected State healthcare spending
Slide 51: GHG at a glance
Private large portfolio companies EXTERNALLY VALUED GHG AT A GLANCE A well diversified business model with cost and synergy advantages Georgia Healthcare Group – The only fully integrated healthcare provider in the region Extensive geographic coverage - diversified healthcare services and pharmacy w
Slide 52: GHG's track record of delivering strong results
Private large portfolio companies EXTERNALLY VALUED GHG’S TRACK RECORD OF DELIVERING STRONG RESULTS REVENUE, GROSS (GEL MILLION) EBITDA1 (GEL MILLION) OPERATING CASH FLOW1 (GEL MILLION) EBITDA to cash conversion ratio1: +27.3% 81% 54% 54% 75% 84% 112% 105% 125% 132% 72% 975.4 920.3 877.7 849.9 747.8
Slide 53: Healthcare Services business overview
Private large portfolio companies EXTERNALLY VALUED HEALTHCARE SERVICES BUSINESS OVERVIEW The largest healthcare service provider in Georgia: c. 20% market share by number of MAJOR GROWTH DRIVERS referral hospitals and community clinics beds – 2,949 Market share by number of beds1 Referral hospitals
Slide 54: Healthcare Services business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HEALTHCARE SERVICES BUSINESS OVERVIEW (CONT’D) HOSPITALS CLINICS Bed occupancy rate 17 19 15 Average Number of referral hospitals length of stay 4.9 5.2 5.5 5.4 5.2 5.6 5.1 5.7 5.4 5.6 Number of community clinics Number of polyclinics +17.6ppts +12
Slide 55: Healthcare Services business valuation overview
Externally valued1 HEALTHCARE SERVICES BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 (GEL MILLION) IMPLIED LTM EV/EBITDA 2 Change q-o-q +4.5% +2.1% NMF +5.6% DEVELOPMENT (incl. IFRS 16) 10.6x 10.5x 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21
Slide 56: Retail (Pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Country’s largest retailer in terms of both, revenue and number of bills issued BUSINESSES MAJOR GROWTH DRIVERS Market share by revenue, 20191 › Expending retail footprint GHG in pharma 615 35% › Enhancing retail
Slide 57: 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 Margin enhancement and strong Gross profit margin (%) Number of bills issued, million growth in para-pharmacy sales 24.5% 25.5% 25.5% 25.4% 25.0% 27.4%
Slide 58: Retail (Pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 IMPLIED LTM EV/EBITDA (GEL MILLION) DEVELOPMENT Change q-o-q -2.9% +3.3% +6.4% (incl. IFRS 16) +4.4% 9.3x 9.2x 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21 30-
Slide 59: 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 60: 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 (%) 19.2% 23.3% 34.7% 39.4% 37.4% 37.3% 34.8% 33.9% 40.5% 35.5% 75.1% 76.9% 77.5% 78.8% 78.2% 90
Slide 61: Medical Insurance business valuation overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q +6.0% +4.5% +5.5% 12.3x 12.3x 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21 30-Jun-21 Change 31-
Slide 62: P&C Insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 MARKET SHARE 1H21 (GROSS PREMIUMS WRITTEN) (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia 400 370 380 (0.8% penetration in prope
Slide 63: P&C Insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW COMBINED RATIO Financial Highlights 3Q21 9M21 -0.6ppts -5.4ppts -0.8ppts Earned premiums gross 32.8m 90.0 82.1% 81.5% 85.6% 82.1% 81.3% 77.5% 80.2% 73.9% 72.6% 75.2% 75.4% Change (y-o-y) +15.2% +19.7% Cash flow from
Slide 64: P&C Insurance business valuation overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 IMPLIED LTM P/E (GEL MILLION) MULTIPLE DEVELOPMENT Change q-o-q NMF +4.9% 12.0x 12.0x 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21 30-Jun-21 Change 31-Dec-20 Chang
Slide 65: Water Utility business overview
Private large portfolio companies EXTERNALLY VALUED WATER UTILITY BUSINESS OVERVIEW INVESTMENT RATIONALE REGULATORY ENIVORNMENT ▪ Regulated monopoly in Tbilisi and surrounding districts with high entry barriers. ▪ Stable regulatory environment with attractive return on investment. TARIFF DERIVATION
Slide 66: Water Utility business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED WATER UTILITY BUSINESS OVERVIEW (CONT’D) OPERATING HIGHLIGHTS REVENUE HIGHLIGHTS EBITDA Total 119 127 135 149 163 131 38 60 99 152 Energy 3Q21 9M21 + 91.9% + 54.0% 20 95 Electricity sales (KWh million) 32.2 106.7 9 14 97 GEL million 10 83 10 6 Chan
Slide 67: Water Utility business valuation overview
Externally valued1 WATER UTILITY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 (GEL MILLION) IMPLIED LTM EV/EBITDA Change q-o-q +4.5% -5.6% +13.0% MULTIPLE DEVELOPMENT 9.3x 9.0x 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21 30-Jun-21 Change 31
Slide 68: Renewable Energy business overview
Private investment stage portfolio companies INTERNALY 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) ▪ U
Slide 69: Renewable Energy business overview (cont'd)
Private investment stage portfolio companies INTERNALY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW (CONT’D) PERFORMANCE HIGHLIGHTS RENEWABLE ENERGY PROJECTS OVERVIEW | 30 September 2021 Generation (GWh) Actual/ Gross 55.8 52.4 12.6 11.4 23.2 19.1 81.5 93.8 39.0 55.8 69.8 62.3 Commissioned Installed ca
Slide 70: Renewable Energy business valuation overview
Internally valued RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 EQUITY FAIR VALUE COMPOSITION (GEL MILLION) AT 30-SEP-21 Change q-o-q -3.7% -2.3% -5.4% (GEL MILLION) 44 Total value 209 165 Operational assets Pipeline projects VALUATION HIGHLIGHTS GEL million, unless
Slide 71: Education business overview
Private investment stage portfolio companies INTERNALLY VALUED EDUCATION BUSINES OVERVIEW INDUSTRY INVESTMENT RATIONALE STRONG PLATFORM TO FACILITATE GROWTH AND SCALE TO BECOME THE LEADING EDUCATION PLAYER WITH c. 21,000 LEARNERS BY 2025 ▪ Highly fragmented general education TARGETING FOR 2025… …THR
Slide 72: Education business overview (cont'd)
Private investment stage portfolio companies INTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights 9M21 PRIVATE K-12 MARKET IN GEORGIA Capacity utilization 62.3% Market growing at 1.6x nominal GDP growth rate Change (y-o-y) -30.8 ppts Private K-12 learners in Georgia Private K-
Slide 73: Education business valuation overview
Internally valued EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q21 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q -3.3% +21.8% -23.2% +0.5% +3.1% 12.5x 12.5x 2 30-Jun-21 30-Sep-21 VALUATION HIGHLIGHTS GEL million, unless noted otherwise 30-Sep-21 30-Jun-21 Change 31-Dec-
Slide 74: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES 74
Slide 75: Sovereign ratings with favourable macro fundamentals
SOVEREIGN RATINGS WITH FAVOURABLE MACRO FUNDAMENTALS Key Ratings Highlights General Facts Rating Agency Rating Outlook Affirmed Ba2 Stable April 2021 BB Negative February 2021 Georgia BB Stable August 2021 Georgia is favorably placed among peers Fitch Rating Country Country Rating Outlook Armenia B+
Slide 76: Georgia's key economic drivers
GEORGIA’S KEY ECONOMIC DRIVERS Top performer globally in WB Doing Business over the past 12 years Liberal ▪ Liberty Act (effective January 2014) ensures a credible fiscal framework; Fiscal deficit/GDP capped at 3%; Public debt/GDP capped at 60%. economic policy ▪ Following the emergency clause activ
Slide 77: Institutional oriented reforms
INSTITUTIONAL ORIENTED REFORMS Ease of Doing Business | 2020 (WB Doing Business Report) Economic Freedom Index | 2021 (Heritage Foundation) New Zealand 1 Singapore 2 Ireland 5 US 6 UK 7 Georgia 7 Georgia 12 Norway 9 Lithuania 11 Lithuania 15 Estonia 18 Czech Republic 27 Kazakhstan 25 Russia 28 Germa
Slide 78: Pace of economic recovery is higher than expected
PACE OF ECONOMIC RECOVERY IS HIGHER THAN EXPECTED Gross domestic product Nominal GDP structure, 1H21 According to preliminary estimates, real GDP grew by 12.5% y-o-y in 1H21, including a 29.9% growth in 2Q21 Other Information and Accommodation and food 8% Industry Nominal GDP, USD mn Real GDP, YoY %
Slide 79: Service sector major driver of 2Q21 rebound
SERVICE SECTOR MAJOR DRIVER OF 2Q21 REBOUND THE SERVICE SECTOR CONTRIBUTED BY 25.5 PERCENTAGE POINTS CONTRIBUTIONS TO REAL GDP GROWTH IN 2Q21 GROWTH 40% Agriculture Industry Services Real GDP Growth 2Q21 vs 2Q19 2Q21 vs 2Q20 35% 2.9% Wholesale and retail trade 5.8% 30% 2.6% Manufacturing 3.8% 25% 2.
Slide 80: Sign of recovery in wages while employment lags behind
SIGN OF RECOVERY IN WAGES WHILE EMPLOYMENT LAGS BEHIND Unemployment rate up to 22.1% in 2Q21 UNDP Human Development Index Sources: GeoStat Sources: UNDP 0.78 0.79 0.81 1450 27.2 27.2 30 0.9 26.7 0.74 0.75 0.76 0.77 0.77 0.78 26.4 0.8 0.71 0.72 0.73 0.73 0.73 0.74 23.0 21.9 21.7 21.6 21.9 22.1 25 0.6
Slide 81: Inflation to decelerate from the 2nd half of 2022
INFLATION TO DECELERATE FROM THE 2ND HALF OF 2022 Inflation Y-o-Y vs. inflation target Inflation components Sources: NBG, GeoStat Source: GeoStat Inflation has picked up pace since May 2021 and reached 12.8% in October All major components contributed to increasing inflation in the past few months m
Slide 82: Current account balance adjusting after record lows
CURRENT ACCOUNT BALANCE ADJUSTING AFTER RECORD LOWS Current account balance (% of nominal GDP) Exports and Re-exports, US$ billion Sources: NBG Source: NBG 30% The CAB was -9.2% in 1H21, with the trade deficit slightly widening as imports 30% While service exports plummeted due to COVID-19, Georgian
Slide 83: Diversified foreign trade
DIVERSIFIED FOREIGN TRADE Exports and imports of goods, Y-o-Y % Foreign Demand, 9M21 Source: Geostat Source:, Geostat 75% Imports, YoY % Exports, YoY % 75% 1% Crude materials, inedible, except fuels 2% 60% 60% 6% 0% Machinery and transport equipment 45% 45% 8% 24% Manufactured goods 30% 30% Beverage
Slide 84: Trade with all types of goods bouncing back fast
TRADE WITH ALL TYPES OF GOODS BOUNCING BACK FAST Export of goods, contribution to growth Import of goods, contribution to growth Source: NBG Source:, Geostat Exports of all types of goods increased in 3Q21, with exports of intermediate and consumer Similar to exports, imports of all types of goods i
Slide 85: Remittances keep pace while tourism revenues have begun recovery
REMITTANCES KEEP PACE WHILE TOURISM REVENUES HAVE BEGUN RECOVERY Tourism revenues to GDP International visitors (by country) Sources: NBG, Geostat Sources: GNTA Tourism revenues rebounded to 50% of 2019 level in July-September 2021, as recovery has begun Number of travelers from Saudi Arabia, Ukrain
Slide 86: Appropriate monetary policy stance ensuring macroeconomic stability
APPROPRIATE MONETARY POLICY STANCE ENSURING MACROECONOMIC STABILITY Monetary policy rate International Reserves Sources: NBG Sources: NBG NBG further increased the monetary policy rate to 10% in August, as inflation is International reserves grew by 4.8% Y-o-Y to reach US$ 4 billion by the end of Oc
Slide 87: Floating exchange rate - policy priority
FLOATING EXCHANGE RATE - POLICY PRIORITY Loans by currencies Dollarization ratios Sources: NBG Source: NBG In parallel with the rebound in economic activity, both GEL and FX loans have started to increase since Both deposit and loan dollarization have fallen since May-June 2021, in parallel with GEL
Slide 88: Revenues and expenditures on track to meet annual plan
REVENUES AND EXPENDITURES ON TRACK TO MEET ANNUAL PLAN TAX REVENUES INCREASED BY 17.8% Y-O-Y IN 9M21, WITH VAT REVENUES TOTAL EXPENSES (CURRENT + CAPITAL) GREW BY 13.9% Y-O-Y IN 9M21, GROWING BY 25.7% AND INCOME TAX REVENUES GROWING BY 13.4% WITH CAPITAL EXPENDITURES RISING BY 10.5% Y-O-Y Consolidat
Slide 89: Debt and fiscal deficit on course for consolidation
DEBT AND FISCAL DEFICIT ON COURSE FOR CONSOLIDATION Public debt Breakdown of public debt Sources: MOF Public debt is expected to fall to 52% of GDP, with a consolidation Source: MOF, as of 30 June 2021 plan in place for the medium run External public debt to GDP, % Total public debt to GDP, % 60% 60
Slide 90: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES ➢ Georgia Capital results discussion ➢ Georgia Capital financial statements ➢ Portfolio compani
Slide 91: Valuation peer group
VALUATION PEER GROUP HEALTHCARE RETAIL SERVICES MEDICAL (PHARMACY) INSURANCE • Med Life S.A. | Romania • NEUCA S.A. | Poland • Powszechny Zaklad Ubezpieczen SA | Poland • EMC Instytut Medyczny SA | Poland • Sopharma Trading AD | Bulgaria • European Reliance General Insurance Company S.A. | Greece •
Slide 92: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 30 SEPTEMBER 2021 (GEL MILLION) 2021 2022 2023 2024+ Total Large portfolio companies 50.1 192.7 30.4 566.0 839.2 Healthcare Services 43.3 187.5 30.1 80.2 341.1 Retail (Pharmacy) 6.8 5.0 - - 11.8 Water Utility - 0.2 0.3 485.
Slide 93: Multiple of invested capital (MOIC) | 30-Sep-2021
MULTIPLE OF INVESTED CAPITAL (MOIC) | 30-SEP-2021 Gross GEL million Sell down Dividends Fair Value MOIC Realized MOIC Investment (1) (2) (3) (4) (2+3+4) / (1) (2+3) / (1) Listed Investments 129 287 134 642 8.2x 3.3x Bank of Georgia Group PLC 129 287 134 642 8.2x 3.3x Private large portfolio companie
Slide 94: 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; Up to 20 years of Experience: formerly Director at Sullivan & Cromwell with a experience in the banking, inves
Slide 95: Georgia Capital's highly experienced management team
Georgia Capital’s highly experienced management team Georgia Capital Management Irakli Gilauri, Chairman & CEO Giorgi Ketiladze, Director, Investments Georgia Capital Georgia Capital Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as Formerly Investment Offic
Slide 96: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES ➢ Georgia Capital results discussion ➢ Georgia Capital financial statements ➢ Portfolio compani
Slide 97: NAV statement | 3Q21
NAV STATEMENT | 3Q21 1.Value 2a. 3.Operating 4. Liquidity 2c. GEL thousands unless otherwise noted 30-Jun-21 2b. Buybacks Management/ FX / 30-Sep-21 Change % Creation Investments Dividends Expenses Other Listed Portfolio Companies BoG 575,394 66,246 - - - - - 641,640 11.5% Listed Portfolio Value 575
Slide 98: NAV statement | 9M21
NAV STATEMENT | 9M21 1.Value 2a. 3.Operating 4. Liquidity GEL thousands unless otherwise noted 31-Dec-20 2b. Buybacks 2c. Dividends 30-Sep-21 Change % Creation Investments Expenses Management/ FX / Other Listed Portfolio Companies BoG1 531,558 110,082 - - - - - 641,640 20.7% Listed Portfolio Value 5
Slide 99: Value creation in private portfolio | 3Q21
VALUE CREATION IN PRIVATE PORTFOLIO | 3Q21 Operating Multiple Change Portfolio Businesses Greenfields Value Creation in 3Q21 Performance and FX 244.6 GEL thousands (1) (2) (3) (1)+(2)+(3) BoG 66,246 Total Listed Portfolio Companies 66,246 Large Portfolio Companies 236,931 - (51,672) 185,259 Healthca
Slide 100: Value creation in private portfolio | 9M21
VALUE CREATION IN PRIVATE PORTFOLIO | 9M21 Operating Multiple Change Portfolio Businesses Greenfields Value Creation in 9M21 Performance and FX 585.1 GEL thousands (1) (2) (3) (1)+(2)+(3) BoG 110,082 Total Listed Portfolio Companies 110,082 Large Portfolio Companies 562,739 - (147,390) 415,349 Healt
Slide 101: Georgia Capital 3Q21 & 9M21 performance overview
GEORGIA CAPITAL 3Q21 & 9M21 PERFORMANCE OVERVIEW Income statement GEL ‘000, unless otherwise noted 3Q21 3Q20 Change 9M21 9M20 Change Dividend income 30,000 9,972 NMF 44,430 14,899 NMF Interest income 6,267 4,834 29.6% 16,884 16,650 1.4% Realised / unrealised (loss)/ gain on liquid funds (547) 475 NM
Slide 102: Contents
CONTENTS 01 COVID-19 UPDATE | GEORGIA 02 GEORGIA CAPITAL AT A GLANCE 03 STRATEGY AND CAPITAL ALLOCATIONS 04 3Q21 & 9M21 RESULTS OVERVIEW 05 PORTFOLIO OVERVIEW 06 9M21 GEORGIAN MACRO OVERVIEW 07 APPENDICES ➢ Georgia Capital results discussion ➢ Georgia Capital financial statements ➢ Portfolio compani
Slide 103: Number of shares outstanding development overview
NUMBER OF SHARES OUTSTANDING DEVELOPMENT OVERVIEW NUMBER OF SHARES OUTSTANDING UPDATE ON THE ONGOING US$ 10 50.00 MILLION SHARE BUYBACK AND 46.28 46.58 46.58 46.46 46.22 45.99 45.93 45.77 45.98 CANCELLATION PROGRAMME 45.00 3Q20: 7.7m AUG-21 – NOV-21: ➢ Since the announcement of the US$ 10 shares iss
Slide 104: Georgian healthcare market overview
GEORGIAN HEALTHCARE MARKET OVERVIEW Healthcare coverage of Georgia’s 3.7m population: ▪ UHC was introduced in February 2013 and replaced most of the previously existing state- 2015 funded medical insurance plans Overview ▪ The main goal is to provide basic healthcare coverage to the entire populatio
Slide 105: 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 106: 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