Georgia Capital PLC · LSE:CGEO
Georgia Capital — 9M 2024 Earnings Presentation
95 slides from Georgia Capital's earnings presentation, November 2024
Slide 1: Investor Presentation 3Q24 & 9M24 Results
INVESTOR PRESENTATION 3Q24 & 9M24 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 30-Sep-24
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 30-SEP-24 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other 4 Rank Shareholder name Ownership 8.4% 1. Management & Management Trust 15.08% 2. Gemsstock Ltd 8.06% USA 1 Management 3 29.9% 3. Allan Gray Ltd 8.05% 15.1% 4. Lazard Asset Manag
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 30-SEP-241 PORTFOLIO VALUE BREAKDOWN AT 30-SEP-24 38% Listed & Observable Portfolio value Net debt 3,468 GEL million 269 GEL million 62% Private US$ 1,270 million US$ 99 million STARTING FROM 2024, PLATFORM COSTS NAV NAV per share ARE TARGETED AT MAXIMUM 0.7
Slide 5: Our portfolio overview as at 30-Sep-24
OUR PORTFOLIO OVERVIEW AS AT 30-SEP-24 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 1,306m Value: GEL 2,161m 37.7% of the total portfolio value 62.3% of the total portfolio value LARGE PORTFOLIO COMPANIES BANK OF RETAIL INSURANCE HOSPITALS GEORGIA (PHARMACY) (P&C AND MEDICAL) Value:
Slide 6: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 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 3Q24 & 9M24 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: 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 12: 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 13: 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 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 14: 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 ppor Buyb 360o tunity MEANINGFUL TACTICAL CASH ANALYSIS BUYBACKS & BUYBACKS & PRESERVATION INVESTMENTS INVESTMENTS STRATEGY Sal e o p p o r t u
Slide 15: 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 AT THE GCAP HOLDCO LEVEL 345.7 42.5% We are targeting to reduce the balance of “net 39.8% 250.1 235.5 debt and guarantees issued
Slide 16: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW Change Change US$ Million 30-Sep-23 30-Jun-24 30-Sep-24 (y-o-y) (q-o-q) NCC RATIO IMPROVED BY 3.0 PPTS Cash and liquid funds 37.5 -0.4% 25.1 48.5% 37.3 Q-O-Q (FLAT AT 15.9% Y-O-Y AS OF Loans issued 3.3 29.1% 4.1 5.7% 4.3 30-SEP-24) Accrued dividend income - NMF
Slide 17: Deleveraging across our private portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 30-JUN-24 CHANGE 30-SEP-24 (OVER THE CYCLE) ACROSS OUR PRIVATE LARGE AND INVESTMENT STAGE LARGE PORTFOLIO COMPANIES PORTFOLIO COMPANIES AT Retail (pharmacy)1 2.4x -0.2x 2.2x Up to 1.5x 3.1x AS OF 30-SEP-24
Slide 18: 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 3.5x 3.5x 3.5x 3.3x 3.2x 3.3x ➢ LTM EBITDA up 48.8% as at Sep-24 from Dec-19. GEL MILLION 189 1,039 200 1,062 225 1,025 268 998 258 913 238 927 245 803 248 787 245 849 271 946 281 919 Dec-
Slide 19: 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 3.3x 3.1x 3.1x 2.6x 2.8x 2.8x 2.6x 2.6x 2.4x 3.0x 2.0x 702 686 GEL MILLION 7 8 1.0x 624 625 603 592 8 9 89 528 8 0.0x 131 93 -1.0x -2.0x -3.0x -4.0x 184 598
Slide 20: 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 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 21: 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 21
Slide 22: 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 23: 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 24: 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 25: 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 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 26: Our strategic priorities
DELEVERAGING GCAP HOLDCO BY BRINGING DOWN AND MAINTAINING 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
Slide 27: 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 28: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 28
Slide 29: Key developments
1 Sale of an 80% holding (an effective 73.9% equity stake1) in the beer and distribution business to Royal Swinkels at a premium to the business’ investment value as at 30-Jun-24. See slides 4-6 2 NAV per share (GEL) up 6.2% in 3Q24, reflecting the overall strong operating performance of our private
Slide 30: Sale of 80% holding in beer and distribution business to Royal Swinkels
SALE OF AN 80% HOLDING IN THE BEER AND DISTRIBUTION BUSINESS TO ROYAL SWINKELS KEY TERMS NET CASH PROCEEDS COMPLETION OF THE TRANSACTION AND THE RECEIPT OF FULL SALES PROCEEDS IS EXPECTED BEFORE 31-DEC-24 AT LEAST 63.0 US$ MILLION The disposal is subject to customary closing conditions, including th
Slide 31: Transaction rationale
TRANSACTION RATIONALE THE SALE IS IN LINE WITH GCAP’S CAPITAL LIGHT INVESTMENT STRATEGY AND REPRESENTS ANOTHER SUCCESSFUL EXIT FROM OUR PRIVATE ASSETS THE DISPOSAL: Realises material cash proceeds, translating into a premium to the business’ investment value as at 30-Jun-24. The use of the sales pro
Slide 32: Operating performance development in beer and distribution business
OPERATING PERFORMANCE DEVELOPMENT IN THE BEER AND DISTRIBUTION BUSINESS EBITDA MARGIN (7.4)% 5.9% 7.9% 13.7% 15.8% STRONG TOTAL REVENUE AND EBITDA GROWTH WITH A 29% AND 79% CAGR, RESPECTIVELY, OVER THE 197.7 PAST THREE YEARS 175.3 114.3 31.2 92.4 24.1 89.5 9.0 5.5 (6.7) 2019 2020 2021 2022 2023 Reve
Slide 33: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 33
Slide 34: NAV per share (GEL) movement in 3Q24
NAV PER SHARE (GEL) MOVEMENT IN 3Q24 PRIVATE PORTFOLIO NAV PER SHARE (GEL) UP 0.0% +7.5% -3.8% -0.3% +0.4% +2.4% +6.2% 6.2% Q-O-Q IN 3Q24 3 ▪ The increase in NAV per share (GEL) in 3Q24 reflects the robust value creation across our private portfolio companies and an accretive impact of share buyback
Slide 35: Strong NAV per share growth
STRONG NAV PER SHARE GROWTH STRONG NAV PER SHARE (GEL) GROWTH NAV PER SHARE (GEL) DEVELOPMENT OVERVIEW WITH 11.6% CAGR SINCE DEC-18 +11.6% CAGR IN US$ AND GBP TERMS, NAV PER SHARE CAGR STANDS AT 11.2% AND 10.2%, RESPECTIVELY +6.2% 82.94 83.41 78.55 65.56 63.03 46.84 48.12 44.32 Dec-18 Dec-19 Dec-20
Slide 36: Share buyback and cancellation programme
SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF GCAP’S SHARE BUYBACK AND CANCELLATION PROGRAMMES 10.8 MILLION SHARES (US$ 123.3 Number of issued shares MILLION IN VALUE) REPURCHASED 39.4 40.2 47.92 47.1 44.8 43.2 39.8 AND CANCELLED SINCE DEMERGER IN 2018, REPRESENTING 22.5%1 OF THE $123 ISSU
Slide 37: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) LIQUIDITY UP BY 90.6% IN 3Q24, REFLECTING 300 300 365 365 300 150 150 150 STRONG DIVIDEND INFLOWS DURING THE QUARTER Cash receipt from the water utility business sale Cancellation of US$ 65 million GCAP Eurobond
Slide 38: Dividend income outlook
DIVIDEND INCOME OUTLOOK RECURRING CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES GEL 191.9 MILLION DIVIDEND INCOME IN 9M24 1 180 DIVIDEND INCOME 3Q24 9M24 169 (GEL million) GEL MILLION BOG (recurring cash and buyback dividends) 96.3 122.2 55 47 BOG (one-off buyback dividend) 22.6 22.6 Renewable Energ
Slide 39: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW ▪ Key developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 39
Slide 40: Aggregated revenue development across private portfolio
AGGREGATED REVENUE DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION RECORD AGGREGATED QUARTERLY REVENUES, UP +8.9% 11.9% Y-O-Y IN 3Q24 AND UP 8.9% Y-O-Y IN 9M24 1,656 1,521 439 ➢ Aggregated revenue of large and investment +11.9% 427 stage portfolio companies up 15.5% and 11.2% y-o-y in 3Q24 and 9M24
Slide 41: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION +15.3% AGGREGATED EBITDA UP 16.5% Y-O-Y IN 3Q24 AND 227 UP 15.3% Y-O-Y IN 9M24 197 52 35 +16.5% 48 40 79 68 19 21 14 12 34 46 121 126 3Q23 3Q24 9M23 9M24 Other portfolio companies Other portfolio companies Investment stage portfolio
Slide 42: 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) +2.1x 215 -1.7% 31-Dec-23 275 +2.0x 1 102 103 30-Jun-24 273 -1.1% 51 30-Sep-24 270 3Q23 3Q24
Slide 43: Portfolio value as of 30-Sep-24
PORTFOLIO VALUE AS OF 30-SEP-24 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 91% IS OF OUR PORTFOLIO 33% 5% 19% 12% 7% 7% 5% 3% 9% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 GBP 36.8 OPTION MULTIPLE: 10.9x 11.5x 11.2x 13.0x 10.6x BGEO VALUATION2 8.8x LTM P/E LTM EV/EBITDA3 EV/EBITDA4 LTM EV/
Slide 44: Portfolio value development in 3Q24
PORTFOLIO VALUE DEVELOPMENT IN 3Q24 PORTFOLIO VALUE DOWN 0.7% Q-O-Q TO GEL 3.5 BILLION IN 3Q24 3, 3, PRIVATE PORTFOLIO VALUE CREATION IN 3Q24 ( 3) ( ) PRIVATE PORTFOLIO VALUE CREATION GEL MILLION GEL million LISTED AND OBSERVABLE PORTFOLIO PRIVATE PORTFOLIO VALUE Others 62.9 VALUE DOWN BY 8.3% UP BY
Slide 45: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 45
Slide 46: Bank of Georgia Group PLC overview
Listed Portfolio BANK OF GEORGIA GROUP PLC OVERVIEW http://bankofgeorgiagroup.com/ 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 201
Slide 47: Bank of Georgia Group PLC overview (cont'd)
Listed Portfolio BANK OF GEORGIA GROUP PLC OVERVIEW (CONT’D) http://bankofgeorgiagroup.com/ http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) GBP 36.75 Change 65 as of 30-Sep-24 2016 2017 2018 2019 2020 2021 2022 2023 2Q23 2Q24 3Q24 y-o-y 55 45 NIM 7.4% 7.3% 6.5%
Slide 48: 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 0 CALL OPTION 8.25X 8.90X 0 0
Slide 49: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 415 14 5 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou › Continued growth of para-pharmacy share in total revenue
Slide 50: 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% 28.5% 28.7% 30.0% 31.6% 29.3% 30.5% 25.3 27.1 28.8 27.6 29.0 31.0
Slide 51: Retail (pharmacy) business operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +3.9% 618 RETAIL (PHARMACY) 594 +4.6% KEY DRIVERS 499 ▪ Total revenue growth in 3Q24 mainly reflects a 6.0% 206 471 +6.0% 197 y-o-y increase in retail revenues, driven by significant -8.0% recent expans
Slide 52: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +2.2% -5.5% +0.0% +6.3% 8.8x 8.8x 3 (30 ) ( ) Enterprise value Net change Enterprise value Net debt inc. inority E uity value 30-Jun-24 30-S
Slide 53: Insurance business (P&C) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW MARKET SHARE 1H24 (GROSS PREMIUMS WRITTEN) MARKET & Aldagi GROSS PREMIUMS WRITTEN1 (GEL MILLION) INVESTMENT RATIONALE • Significantly underpenetrated insurance market in Georgia (0.8% penetration in property and ca
Slide 54: Insurance business (P&C) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (P&C) OVERVIEW (CONT’D) Distribution Mix (GPW %) | 9M24 COMBINED RATIO MTPL Channel +10.3ppts -15.1ppts -3.2ppts 2% Partnerships with Financial 99.5% Institutions 82.1% 81.5% 80.8% 79.2% 89.5% 84.4% 89.7% 86.5% 73.9% 77.5% 72.6%
Slide 55: Insurance business (medical) overview
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) OVERVIEW Largest medical insurer in the country with 34%1 market share Offering a variety of medical insurance products, with a wide distribution network to the Georgian population BUSINESSES MAJOR GROWTH DRIVERS Market
Slide 56: Insurance business (medical) overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED INSURANCE BUSINESS (MEDICAL) OVERVIEW (CONT’D) NUMBER OF INSURED & RENEWAL RATE REVENUE (NET INSURANCE PREMIUMS EARNED) 200.0 74.3% 73.4% 76.9% 69.7% 77.5% 73.4% 78.0% 77.4% 81.8% 83.6% 81.4% 83.2% 81.1% 400 150.0 +67.2% +2.1x +2.1x 0.0% +22.0% 111
Slide 57: Insurance business operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW INSURANCE REVENUE PRE-TAX PROFIT DEVELOPMENT +44.7% 220 INSURANCE KEY DRIVERS +49.8% 152 P&C Insurance 111 ▪ The increase in insurance revenue is mainly 32.2 GEL MILLION +65.0% driven by the growth in the motor, agricultural and credit life insurance
Slide 58: Insurance business valuation overview
Externally valued1 INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 IMPLIED LTM P/E MULTIPLE (GEL MILLION) DEVELOPMENT Change q-o-q +4.1% 407 12.4x 391 97 10.9x 96 ( ) ( ) 296 310 E uity value perating ultiple change ividends E uity value 30-Jun-24 30-Sep-24 30 un 2 performanc
Slide 59: Hospitals business overview
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW State healthcare spending, GEL millions Market share by number of beds, GEL millions 2,600 13% 14% GCAP Hospitals 2,219 14% 11% State 839 5% 2,100 10% 12% 800 10% Aversi 813 5% 9% 9% 9% 9% 10% 1,600 8% Geo Hospitals 779
Slide 60: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) CASH FLOW HIGHLIGHTS1 3Q24 9M24 BED OCCUPANCY RATE - LARGE AND SPECIALTY HOSPITALS 3.0 5.1 4.9 4.9 5.0 5.2 4.9 250.0% GEL 16.5m GEL 23.1m Average Operating cash flow length of stay 2.5 200.0% -24.4% +61.0% 2.0 -
Slide 61: Hospitals business operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +2.5% HOSPITALS -1.2% 237 243 KEY DRIVERS 38.2 37.8 ▪ Total revenue increase in 3Q24 reflects the business’ 85 78 GEL MILLION 10.5 8.9 gradual return to its normal operational levels +9.0% following mandatory
Slide 62: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +1.0% +1.1% +0.0% +0.9% 12.5x 11.5x 3 3 ( ) ( ) Enterprise value Net change Enterprise value Net debt inc. inority E uity value 30-Jun-24 30-Sep-24
Slide 63: Renewable energy business overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE ELECTRICITY CONSUMPTION ▪ Favorable supply-demand dynamics pushing the power prices up. ▪ Georgia is on track to harmonize the current energy market structure with EU directives, le
Slide 64: Renewable energy business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW (CONT’D) PERFORMANCE HIGHLIGHTS RENEWABLE ENERGY PROJECTS OVERVIEW | 30 September 2024 Generation, 57.2 55.4 24.8 18.5 20.9 23.6 102.8 97.5 94.4 91.0 82.3 46.0 60.2 66.3 236.9 203.3 GWh Gross Commission
Slide 65: Renewable energy business operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +17.3% RENEWABLE ENERGY 13.5 +24.5% 11.5 KEY DRIVERS 10.4 ▪ 3Q24 revenue was up 7.6% y-o-y, resulting +7.6% US$ MILLION 7.7 from both improved electricity generation 5.4 +11.2% 8.4 (up 5.5% y-o-y) and inc
Slide 66: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 EQUITY FAIR VALUE COMPOSITION (US$ MILLION) AT 30-SEP-24 (US$ MILLION) Change q-o-q +0.6% +1.0% +0.3% 19 Total value US$ 88 ( 0) 68 Enterprise value Net change in EV Enterprise value Net debt E uity val
Slide 67: Education business overview
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW INDUSTRY INVESTMENT RATIONALE CURRENT OPERATIONAL METRICS AND TARGETS FOR 2025 ▪ Highly fragmented general education market with consolidation opportunity. ▪ Market with strong growth potential. Currently2 Tar
Slide 68: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 30-Sep-24 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market Capacity utilization, 81.4% 12% CAGR 14-19 10% CAGR 20-23
Slide 69: Education business operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +26.3% EDUCATION 45.7 KEY DRIVERS 36.1 GEL MILLION ▪ The third quarter is usually a slow season for the education business, as the schools are not operational during the July-August holidays. +10.1% ▪ A y-o-y in
Slide 70: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 LTM EV/EBITDA DEVELOPMENT4 (GEL MILLION) Change q-o-q -5.5% +4.3% +53.7% -8.0% -6.4% 13.0x 13.0x 0 ( ) ( ) (3 ) Enterprise Net change Enterprise nvestment Net debt inority E uity value 30-Jun-24 30-Sep-24 valu
Slide 71: Clinics & diagnostics business overview
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW HIGH GROWTH PROSPECTS IN THE CLINICS BUSINESS Outpatient visits per capita, Georgia Outpatient encounters per capita Government Expenses on Primary Care VS GDP 10.0 7.8 4.4 8.0 5.8 15% 5.7 12.2% 3.
Slide 72: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS (3Q24) DIAGNOSTICS (3Q24) 16 Outpatient diagnostic and treatment services in Tbilisi Market share by number of registered patients* c.175,000 3.4 GCAP Polyclinics 390,450 13% Numbe
Slide 73: Clinics & diagnostics business operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT1 EBITDA2 DEVELOPMENT +20.8% 59.1 CLINICS & DIAGNOSTICS 48.9 15.9 KEY DRIVERS 13.5 ▪ The growth in revenue and EBITDA of the +15.0% 43.3 GEL MILLION +40.0% combined clinics and diagnostics business in 35.5 3Q23 reflects
Slide 74: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 3Q24 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q 2.4% +12.7% +0.0% -3.0% 11.0x 10.6x 0 ( ) (3) Enterprise value Net change Enterprise value Net debt inc. inority E uity value 30-Jun-24
Slide 75: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 75
Slide 76: Strong real GDP growth in 8M24, with inflation below target
STRONG REAL GDP GROWTH IN 8M24, WITH INFLATION BELOW TARGET GEORGIA’S ECONOMY CONTINUES TO EXPAND, WITH PRELIMINARY ECONOMIC GROWTH ANNUAL INFLATION BELOW THE 3% TARGET SINCE APRIL 2023, WITH SEPTEMBER 2024 AT 10.0% Y-O-Y IN 8M24 INFLATION AT 0.6% Y-O-Y 15% 13% 12% 12% Headline Inflation Target End
Slide 77: Stronger-than-expected economic growth supported by domestic activity
STRONGER-THAN-EXPECTED ECONOMIC GROWTH IS SUPPORTED BY ROBUST DOMESTIC ACTIVITY AND RECOVERING EXTERNAL FLOWS LOANS GROWTH DECOMPOSITION BY SECTORS, (ON A CONSTANT CURRENCY BASIS) GENERAL GOVERNMENT FISCAL EXPENSES, GEL BLN 25% Legal Entities Households Total Loans Growth rate, % Y-o-Y Current Expen
Slide 78: Deleveraging underway as external balance sheet improves
DELEVERAGING UNDERWAY AS EXTERNAL BALANCE SHEET SHOWS SIGNIFICANT IMPROVEMENT CAB NARROWED TO -6.0% OF GDP, SUPPORTED BY GROWTH IN THE TRANSFER AND SERVICES NET EXTERNAL EARNINGS TURNED POSITIVE IN SUMMER AS SEASONAL FACTORS COME BALANCE INTO PLAY Goods, net Services, net Investment income, net Net
Slide 79: Overview of continued volatility in market sentiment
OVERVIEW OF THE CONTINUED VOLATILITY IN MARKET SENTIMENT DESPITE RECENT DEPRECIATION, THE GEL HAS SINCE RECOVERED ITS VALUE, WIDENED SOVEREIGN SPREAD REFLECTS RECENT POLITICAL DEVELOPMENTS SHOWING ONLY 1.1% YTD DEPRECIATION 700 EMBI diversified sovereign spread Georgia sovereign z-spread 600 3.6 3.4
Slide 80: Macro policy stance continues to be appropriate
MACRO POLICY STANCE CONTINUES TO BE APPROPRIATE NET NBG INTERVENTIONS ON THE FX MARKET AND OFFICIAL RESERVE ASSETS THE OPERATING BALANCE SURGES DUE TO HIGHER-THAN-EXPECTED TAX REVENUE COLLECTION Net Interventions, US$ mln (LHS) Reserve Assets, US$ bln (RHS) 5.4 213 5.5 250 205 8000 176 Tax Revenues
Slide 81: Macroeconomic wrap-up
STRONG GDP PERFORMACE BELOW-TARGET INFLATION EXTERNAL DEMAND IS SUPPORTING GROWTH AGAIN MACROECONOMIC ROBUST EXTERNAL BALANCE SHEET WRAP-UP MACROECONOMIC POLICY FRAMEWORK REMAINS APRROPRIATE 81
Slide 82: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Georgia Capital financial statements 82
Slide 83: 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; more than 20 years INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Currently
Slide 84: GCAP's highly experienced management team
GCAP’S HIGHLY EXPERIENCED MANAGEMENT TEAM IRAKLI GILAURI, CHAIRMAN & CEO GIORGI KETILADZE, MANAGING DIRECTOR, HEAD OF INVESTMENTS Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as CFO of Bank Formerly Investment Officer at BGEO Group. Joined BGEO in 2017. Pr
Slide 85: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 3Q24 & 9M24 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Georgia Capital financial statements 85
Slide 86: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 30 SEPTEMBER 2024 2024 2025 2026 2027-2036 Total (GEL MILLION) Large portfolio companies 46.6 141.0 107.2 217.5 512.3 Retail (Pharmacy)1 38.4 67.5 43.2 67.7 216.8 Insurance (P&C and Medical) - 3.0 6.5 20.0 29.5 Hospitals 8.
Slide 87: Value creation in private portfolio | 3Q24
VALUE CREATION IN PRIVATE PORTFOLIO | 3Q24 Operating Multiple Change and Portfolio Businesses Value Creation in 3Q24 115.1 Performance FX GEL thousand (1) (2) (1)+(2) BoG (4,478) Water Utility 5,000 Total Listed and Observable Portfolio Companies - - 522 GEL MILLION Large Portfolio Companies 169,863
Slide 88: Value creation in private portfolio | 9M24
VALUE CREATION IN PRIVATE PORTFOLIO | 9M24 Operating Multiple Change and Portfolio Businesses Value Creation in 9M24 (25.5) Performance FX GEL thousand (1) (2) (1)+(2) BoG 65,422 Water Utility 1,000 Total Listed and Observable Portfolio Companies - - 66,422 GEL MILLION Large Portfolio Companies 172,
Slide 89: NAV statement | 3Q24
NAV STATEMENT | 3Q24 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 30-Jun-24 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Sep-24 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,269,814 (4,478) - - (118,865) -
Slide 90: NAV statement | 9M24
NAV STATEMENT | 9M24 2a. 4. Liquidity 3.Operating GEL thousands unless otherwise noted 31-Dec-23 1.Value Creation Investments and 2b. Buybacks 2c. Dividends Management/ FX / 30-Sep-24 Change % Expenses Divestments Other Listed and Observable Portfolio Companies BoG 1,225,847 65,422 - - (144,798) - -
Slide 91: Income statement | 3Q24
INCOME STATEMENT | 3Q24 Income statement GEL ‘000, unless otherwise noted 3Q24 3Q23 Change Dividend income 95,001 41,876 NMF Buyback dividend 46,619 11,785 NMF Interest income 2,081 4,304 -51.6% Realised / unrealised loss on liquid funds /Loss on GCAP Eurobond 159 (3,430) NMF buybacks Interest expen
Slide 92: Income statement | 9M24
INCOME STATEMENT | 9M24 Income statement GEL ‘000, unless otherwise noted 9M24 9M23 Change Dividend income 119,376 128,379 -7.0% Buyback dividend 72,551 73,356 -1.1% Interest income 5,401 14,296 -62.2% Realised / unrealised loss on liquid funds /Loss on GCAP Eurobond (802) (2,348) -65.8% buybacks In
Slide 93: Valuation peer group
VALUATION PEER GROUP RETAIL P&C MEDICAL HOSPITALS (PHARMACY) INSURANCE INSURANCE • NEUCA S.A. | Poland • Dhipaya Insurance | Thailand • Powszechny Zaklad Ubezpieczen SA | • Medicover AB | Sweden Poland • Sopharma Trading AD | Bulgaria • Zavarovalnica Triglav | Slovenia • EMC Instytut Medyczny SAEMC
Slide 94: 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 95: Company information
COMPANY INFORMATION Georgia Capital PLC Registered Address Central Square, 29 Wellington Street, Leeds, LS1 4DL London W1K 5DB United Kingdom www.georgiacapital.ge Registered under number 10852406 in England and Wales Stock Listing London Stock Exchange PLC’s ain arket for listed securities Ticker: