Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2020 Earnings Presentation
32 slides from Georgia Capital's earnings presentation, May 19, 2020
Slide 1: 1Q20 trading update call presentation
1Q20 trading update call presentation 19 May 2020 Page 1
Slide 2: Forward looking statements
Forward looking statements Disclaimer This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, p
Slide 3: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 3
Slide 4: Georgia has managed to effectively deal with COVID-19
Georgia has managed to effectively deal with the COVID-19 Lowest number of confirmed cases and deaths per capita in the region Georgia: COVID-19 response COVID-19 cases: dynamics in Georgia ➢ Border checks began on 27 February and schools switched to distance learning from 800 29 February Peak on 2n
Slide 5: COVID-19 update | Government measures
COVID-19 update | Government measures US$ 3 billion funding facility Government Economic Plan ➢ US$ 3b (predominantly loans) from international ➢ Special support package for the tourism and agriculture sectors, to be followed by construction Total budget – GEL 3.5 billion donors (incl. US$ 450m from
Slide 6: Macro developments in 1Q20
Macro developments in 1Q20 Gross domestic product Real GDP grew by 1.5% in 1Q20, according to rapid estimates. IMF forecasts that real Source: Geostat, IMF GDP will contract by 4% in 2020, rebounding to 4% in 2021. US$ billions 20 16% 15 12% 10 4.8% 4.8% 5.1% 8% Inflation at 6.4% on average in Jan-A
Slide 7: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 7
Slide 8: Our response to COVID-19
Our response to COVID-19 Cash accumulation and preservation is our key priority during the global COVID-19 pandemic Limited capital allocations at GCAP level, only critical investments throughout the remainder of 2020, if any Minimising capital investments at each portfolio company level Optimising
Slide 9: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 9
Slide 10: 1Q20 performance highlights
1Q20 performance highlights Georgia Capital performance Georgia Capital NAV overview GEL thousands GEL thousands, except per share information 1Q20 1Q19 Change 31-Mar-20 31-Dec-19 Change (y-o-y) (y-o-y) Total portfolio value creation (504,400) 137,497 NMF NAV per share, GEL 30.18 46.84 -35.6% of whi
Slide 11: Value creation in 1Q20
Value creation in 1Q20 Operating Portfolio Businesses Greenfields Multiple Change FX Value Creation Performance GEL thousands (1) (2) (3) (4) (1)+(2)+(3)+(4) Listed (367,747) GHG (134,624) BoG (233,123) Private (61,140) (1,585) (77,939) 4,011 (136,653) Late Stage (12,752) - (52,350) (14,556) (79,658
Slide 12: Operating cash flow | Portfolio companies
Operating cash flow | Portfolio companies Strong operating cash flow generation - up almost 3x to GEL 92m in 1Q20 from GEL 36m in 1Q19 GEL millions, unless otherwise noted ➢ GHG 1Q20 operating cashflow* at GEL 43.2m (up 64.6% y-o-y) with Late stage: +3.2x Early stage: +3.3x EBITDA to cash conversion
Slide 13: Capital allocations in 1Q20
Capital allocations in 1Q20 GEL millions Investments Buybacks Dividends Total Investments highlights BOG - - - - Listed portfolio ➢ Renewable Energy: GHG - - - - o GEL 38.7m for RP Global buyout (34.4% minority) Water Utility 0.2 - - 0.2 Private late stage o GEL 5.6m for Zoti HPP Housing Development
Slide 14: Total portfolio growth in 1Q20
Total portfolio growth in 1Q20 ➢ Total portfolio value decreased by 20.1% to GEL 1.8 billion, mainly reflecting negative impact of COVID-19 on valuation multiples 4. Liquidity GEL thousands unless otherwise 1. Value 2a. 3. Operating Dec-19 2b. Buybacks 2c. Dividends management/ FX Mar-20 Change % no
Slide 15: NAV per share (GEL) movement in 1Q20
NAV per share (GEL) movement in 1Q20 NAV per share down 35.6% to GEL 30.18 in 1Q20 GEL unless otherwise noted ➢ NAV per share (GEL) down 35.6% in 1Q20, resulting NAV per share -21.0% -7.8% -1.0% -0.5% -5.4% -35.6% from decrease in valuations of the listed assets. change % o GEL 368m decrease in the
Slide 16: NAV per share (GBP) movement in 1Q20
NAV per share (GBP) movement in 1Q20 NAV per share down 40.5% to GBP 7.41 in 1Q20 GBP unless otherwise noted NAV per share -21.0% -7.8% -1.0% -0.5% -10.2% -40.5% change % GBP 12.46 (2.62) (0.97) (0.12) (0.06) (1.28) GBP 7.41 NAV per share Value creation on listed Value creation on Buybacks Operating
Slide 17: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 17
Slide 18: Portfolio overview | March 2020
Portfolio overview | 31 March 2020 GEL thousands unless otherwise noted Ownership % Valuation Method Multiples / Share prices Fair Values Mar-20 Dec-19 Mar-20 Dec-19 Change Listed Portfolio Companies 660,067 1,027,814 -35.8% GHG 70.6% Public markets GEL 3.2 GEL 4.6 295,455 430,079 -31.3% BoG 19.9% P
Slide 19: Water utility business overview
Water utility business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics GEL millions, unless otherwise noted 1Q20 1Q19 Change LTM EBITDA 952 95 NMF Revenue 31.2 33.2 -6.1% Multiple applied 8.5 8.8 -3.4% O
Slide 20: Housing development business overview
Housing development business overview Valuation highlights | 31 March 2020 Selected metrics 31-Mar-20 31-Dec-19 Change Financial metrics GEL millions, unless otherwise noted GEL millions, unless otherwise noted 1Q20 1Q19 Change Enterprise value 221 205 8.2% Apartments sales revenue 14.5 6.3 NMF Net
Slide 21: P&C Insurance business overview
P&C Insurance business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics LTM net income 181 18 NMF GEL millions, unless otherwise noted 1Q20 1Q19 change Earned premiums, net 17.5 17.4 0.4% Multiple applied
Slide 22: Renewable energy business overview
Renewable energy business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics GEL millions, unless otherwise noted 1Q20 1Q19 Change At acquisition price (GCAP share) 151 107 41.4% Revenue 6.6 - NMF Net debt
Slide 23: Hospitality & Commercial Real Estate business overview
Hospitality & Commercial Real Estate business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics2 NAV 219 246 -11.0% GEL millions, unless otherwise noted 1Q20 1Q19 Change LTM ROIC1 5.6% 6.5% -0.9ppts NOI3 f
Slide 24: Wine business overview
Wine business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics GCAP ownership 87% 87% NMF GEL millions, unless otherwise noted 1Q20 1Q19 Change LTM EBITDA 10.81 9.5 12.9% Revenue 6.9 7.9 -12.5% Multiple a
Slide 25: Beer business overview
Beer business overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics GCAP ownership 87% 87% NMF GEL millions, unless otherwise noted 1Q20 1Q19 Change LTM Revenue1 47 47 NMF Revenue 7.3 5.8 26.7% Multiple applie
Slide 26: Education business overview
Education business overview Financial metrics Key points GEL millions, unless otherwise noted 1Q20 1Q19 Change ➢ The education business EBITDA grew 26% and EBITDA margin was at 40% in 1Q20. Revenue 7.7 5.9 31.5% ➢ 77% contribution in 1Q20 EBITDA from premium schools (BGA), followed by 13% from mid-l
Slide 27: Auto service (PTI, Amboli & Carfest) overview
Auto service (PTI, Amboli & Carfest) overview Valuation highlights | 31 March 2020 Selected metrics GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Financial metrics PTI EBITDA2 6.7 6.7 NMF GEL millions, unless otherwise noted 1Q20 1Q19 Change Multiple applied 8.7 10.4 -16.3% Revenue
Slide 28: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 28
Slide 29: COVID-19 portfolio implications (excluding BoG)
COVID-19 portfolio implications (excluding BoG) Most of our portfolio companies operate across structurally important, defensive sectors Level of resilience High Medium Low Renewable Housing Hospitality & Water Utility P&C Insurance Digital Services Energy Development Commercial RE GHG Education Bev
Slide 30: Key takeaways
Key takeaways Leveraging the successful model and capabilities built over the years at GCAP Strong pre-COVID-19 macro Continued capital Defensive portfolio fundamentals were reflected allocation with diversified in the country’s 1Q20 GDP discipline revenue streams growth of 1.5% y-o-y Solid 1Q20 res
Slide 31: Content
Content 1. 1Q20 developments | Georgia 2. Updated strategy | Georgia Capital 3. 1Q20 NAV developments 4. Portfolio overview 5. Wrap up 6. Appendix Page 31
Slide 32: Maturity profile across private portfolio companies
Maturity profile across private portfolio companies Average maturity Gross debt maturity1 (in years) Gel millions, unless otherwise noted 2020 2021 2022 2023 2024 2024+ Total 31 March 2020 Late Stage 25 79 156 42 104 194 600 4.2 Water Utility 25 61 39 40 45 190 400 4.8 Housing development2 0.4 18 11