Georgia Capital PLC · LSE:CGEO
Georgia Capital — FY2022 Earnings Presentation
99 slides from Georgia Capital's earnings presentation, March 2023
Slide 1: Investor Presentation 4Q22 & FY22 Results
INVESTOR PRESENTATION 4Q22 & FY22 RESULTS
Slide 2: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 2
Slide 3: Georgia Capital shareholders at 31-Dec-22
GEORGIA CAPITAL (GCAP) SHAREHOLDERS AT 31-DEC-22 GCAP SHAREHOLDERS ALLOCATION BY GEOGRAPHY GCAP TOP 10 SHAREHOLDERS Other Rank Shareholder name Ownership 8.4% 4 1. Management & Management Trust 12.51% 2. Gemsstock Ltd 10.67% Management 3 UK 1 3. 6.63% Allan Gray Ltd 12.5% 32.5% 4. Coeli Frontier Mar
Slide 4: Key figures at a glance
KEY FIGURES AT A GLANCE NAV HIGHLIGHTS AT 31-DEC-221 PORTFOLIO VALUE BREAKDOWN AT 31-DEC-22 30.8% Listed & Observable Portfolio value Net debt 3,199 GEL million 381 GEL million 69.2% Private US$ 1,184 million US$ 141 million STARTING FROM 2024, PLATFORM COSTS ARE TARGETED AT MAXIMUM 0.75% OF NAV NAV
Slide 5: Our portfolio overview as at 31-Dec-22
OUR PORTFOLIO OVERVIEW AS AT 31-DEC-22 LISTED AND OBSERVABLE PRIVATE PORTFOLIO PORTFOLIO Value: GEL 985m Value: GEL 2,213m 31% of the total portfolio value 69% of the total portfolio value LARGE PORTFOLIO COMPANIES NON-CYCLICAL BUSINESSES, CLOSE TO GEL 300 MLN+ VALUE BANK OF RETAIL HOSPITALS INSURAN
Slide 6: Strong NAV per share growth
STRONG NAV PER SHARE GROWTH NAV PER SHARE (GEL) STRONG NAV PER SHARE GROWTH WITH 10.3% CAGR +10.3% CAGR OVER THE LAST 4 YEARS RUSSIA-UKRAINE WAR -16.4% 65.6 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 Dec-18 Dec-19 Dec-20 De
Slide 7: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 7
Slide 8: 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 8
Slide 9: 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 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 10: 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 11: 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 12: 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 13: 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 14: 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 15: 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 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 16: Net capital commitment (NCC) overview
NET CAPITAL COMMITMENT (NCC) OVERVIEW US$ MILLION 30-SEP-22 CHANGE 31-DEC-22 NCC REPRESENTS AN AGGREGATED Cash and liquid funds 133.9 13.8% 152.4 VIEW OF ALL CONFIRMED, AGREED Loans issued 89.3 -88.9% 9.9 AND EXPECTED CAPITAL OUTFLOWS Gross debt (362.9) -16.4% (303.3) AT THE GCAP HOLDCO LEVEL Net de
Slide 17: NCC ratio development overview
NCC RATIO DEVELOPMENT OVERVIEW NCC AND NCC RATIO DEVELOPMENT OVERVIEW1 NCC RATIO DOWN BY 3.3 PPTS TO 21.1% IN 4Q22 385.8 365.9 345.7 In light of a worldwide rising interest rate environment, we are targeting to reduce the balance of “net debt and guarantees issued” 42.5% close to zero over the short
Slide 18: 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 19: Deleveraging across our private portfolio
DELEVERAGING ACROSS OUR PRIVATE PORTFOLIO TARGET AGGREGATED LEVERAGE ADJUSTED NET DEBT/EBITDA 30-SEP-22 CHANGE 31-DEC-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 2.6x AS OF 31-DEC-22
Slide 20: Leverage overview of our private businesses
LEVERAGE OVERVIEW OF OUR PRIVATE BUSINESSES TOTAL NET DEBT/EBITDA 5.5x 5.3x DEVELOPMENT OVERVIEW 4.6x 3.9x 3.7x 3.7x 3.5x 3.3x 3.3x ➢ 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
Slide 21: 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 2.5x 2.6x 2.4x ➢ LTM EBITDA up 12% as at Dec-22 from Dec-19; 623 624 603 GEL MILLION ➢ Excluding the minority buyout agreement at Retail
Slide 22: 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 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APP
Slide 23: 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 23
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 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 4Q22 & FY22 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 SET MEASURABLE ESG TARGETS AT BOTH GCAP ESG HOLDCO AND PORTFOLIO COMPANY LEVELS OUR STRATEGIC PRIORITIES CONTINUED PROGRESS ON THE DIVESTMENT OF “OTHER” P
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 4Q22 & FY22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 31
Slide 32: 2022 lookback
2022 LOOKBACK SEVERAL KEY ACTIVITIES IN 2022 01 02 03 04 05 STRATEGY COMPLETION OF THE MILESTONE BUYBACK OF GCAP SHARE BUYBACK AND UPDATE WATER UTILITY TRANSACTIONS ON EUROBONDS CANCELLATION BUSINESS SALE THE GEORGIAN PROGRAMME IN 2022 CAPITAL MARKET At 2022 Investor Day, the Group • In 2022, GCAP c
Slide 33: Rationale of transferring to LSE standard listing
RATIONALE OF TRANSFERRING TO LSE STANDARD LISTING THE TRANSFER WILL ELIMINATE TRANSACTION DELAYS AND COSTS ASSOCIATED WITH GIVEN ITS SIZE AND STRATEGY, LSE CLASS TESTS AND ENSURE MORE SEAMLESS EXECUTION OF SIGNIFICANT TRANSACTIONS STANDARD LISTING IS MORE SUITED FOR GCAP’S CURRENT REQUIREMENTS THE T
Slide 34: Timeline
TIMELINE 17 February 14 March 11:00 am Publication of the circular and General Meeting notice of the general meeting 2023 10 March 13 April 11:00 am Latest time and date for receipt of form of Proposed Transfer becomes effective proxy, crest proxy instructions and electronic and trading of GCAP shar
Slide 35: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ Georgia Capital results overview ▪ Aggregated portfolio results and valuations overview 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 35
Slide 36: NAV per share (GEL) movement in 4Q22
NAV PER SHARE (GEL) MOVEMENT IN 4Q22 NAV PER SHARE (GEL) -3.8% +6.9% +10.2% +0.8% -0.4% +1.3% +14.9% UP 14.9% IN 4Q22 ▪ NAV per share (GBP) up 8.5% in 4Q22. ▪ 14.9% growth in 4Q22 NAV per share (GEL) mainly reflects PRIVATE PORTFOLIO the continued growth in BoG’s value (BoG’s share price up by 31.0%
Slide 37: NAV per share (GEL) movement in FY22
NAV PER SHARE (GEL) MOVEMENT IN FY22 -11.0% +5.1% +7.1% +5.0% -1.4% -0.8% +4.0% NAV PER SHARE (GEL) UP 4.0% IN FY22 • NAV per share (GBP) up 33.2% in FY22, reflecting a 28.1% appreciation of GEL against GBP PRIVATE PORTFOLIO In GBP: In GBP: +33.2% 15.10 20.12 37
Slide 38: Portfolio value development in 4Q22
PORTFOLIO VALUE DEVELOPMENT IN 4Q22 PORTFOLIO VALUE UP 12.0% TO GEL 3.2 BILLION IN 4Q22 LISTED AND OBSERVABLE PRIVATE PORTFOLIO VALUE UP BY GEL 107 MILLION GEL MILLION PORTFOLIO VALUE UP BY (5.1%) GEL 234 MILLION (31.2%) 38
Slide 39: Progress on the share buyback and cancellation programme
PROGRESS ON THE SHARE BUYBACK AND CANCELLATION PROGRAMME DEVELOPMENT OF SHARE BUYBACK AND CANCELLATION PROGRAMME 3.1 MILLION SHARES (c.7% OF ISSUED 0.9 TOTAL CAPITAL) WERE REPURCHASED UNDER 0.8 THE US$ 25 MILLION SHARE BUYBACK 0.5 0.6 3.1 AND CANCELLATION PROGRAMME AS OF 0.4 MILLION 31-DEC-22 7.4 SH
Slide 40: Liquidity outlook
LIQUIDITY OUTLOOK LIQUIDITY DEVELOPMENT OVERVIEW (US$ MILLION) GROSS DEBT (US$ million) * LIQUIDITY UP BY 13.8% IN 4Q22, REFLECTING THE NET IMPACT OF A) REPAYMENT OF THE US$ 80 MILLION 300 300 365 365 365 365 300 SHAREHOLDER LOAN PROVIDED TO THE RENEWABLE ENERGY BUSINESS AND DIVIDEND AND INTEREST RE
Slide 41: Dividend income outlook
DIVIDEND INCOME OUTLOOK CASH DIVIDEND INCOME FROM PORTFOLIO COMPANIES DIVIDEND INCOME PER SHARE (GEL) 1.6 2.1 2.7-2.9 GEL 94 MILLION DIVIDEND INCOME IN 2022 Estimated CAGR: +19.7%* DIVIDENDS INCOME 150-160 4Q22 FY22 (GEL million) BOG 18.1 40.9 30 Retail (Pharmacy) - 16.0 +26.2% GEL MILLION P&C Insur
Slide 42: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW ▪ Recent developments ▪ 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 REVENUE UP +30.2% 2.0% Y-O-Y IN 4Q22 AND UP +7.6% 7.6% Y-O-Y IN FY22 +17.8% 1,902 1,767 +2.0% 484 1,460 338 ▪ Aggregated revenue excluding Hospitals and Clinics & Diagnostics, which have been 283 170 165 temporarily impac
Slide 44: Aggregated EBITDA development across private portfolio
AGGREGATED EBITDA DEVELOPMENT ACROSS PRIVATE PORTFOLIO GEL MILLION +9.0% AGGREGATED EBITDA UP 1.3% Y-O-Y IN 4Q22 AND DOWN -5.5% 5.5% Y-O-Y IN FY22 257 243 223 21 ▪ Aggregated EBITDA excluding Hospitals and -17.1% 35 Clinics & Diagnostics, is up 22.2% y-o-y in 26 65 +1.3% 4Q22 and up 11.9% y-o-y in F
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 value as of 31-Dec-22
PORTFOLIO VALUE AS OF 31-DEC-22 % SHARE IN TOTAL PORTFOLIO VALUE: 78% OF OUR PORTFOLIO 91% IS OF OUR PORTFOLIO 26% 5% 23% 14% 9% 7% 5% 4% 8% ISVALUED VALUED EXTERNALLY EXTERNALLY1 1 MULTIPLE: GBP 26.05 OPTION 9.1x 12.2x 10.6x – 10.7x 11.4x 16.9x 16.5x6 BGEO VALUATION2 LTM EV/EBITDA3 LTM EV/EBITDA3 L
Slide 47: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 47
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: stock price and financial metrics
Listed Portfolio BANK OF GEORGIA OVERVIEW http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL million) 40 GBP 26.05 Change 2015 2016 2017 2018 2019 2020 2021 2022 35 as of 31-Dec-22 y-o-y 30 NIM 7.7% 7.4% 7.3% 6.5% 5.6% 4.6% 4.9% 5.4% +0.5 ppts 25 20 NPL coverage 83.4% 86.7
Slide 50: Water utility business valuation overview
Option valuation WATER UTILITY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW GCAP and Aqualia have put and call options for the (GEL MILLION) minority 20% equity interest in the water utility business. GCAP’S PUT OPTION AQUALIA’S CALL OPTION 8.25X 8.90X EV/EBITDA EV/EBITDA Exercisable in 20
Slide 51: Retail (pharmacy) business overview
Private large portfolio companies EXTERNALLY VALUED RETAIL (PHARMACY) BUSINESS OVERVIEW Key focus areas in medium and long-term 372 9 2 1 › Expending retail footprint in Georgia Pharmacies in total The Body Shop stores Optics – Alain Afflelou Children’s apparel – Carter’s › c.400 pharmacies in 5 yea
Slide 52: 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 Number of bills issued, million 24.5% 25.5% 25.5% 25.4% 26.0% 29.3% 27.7% 28.7% 25.3 27.1 28.8 27.6 29.0 31.0 8.0 8.5 Margin enhancement Gross profit ma
Slide 53: Retail (pharmacy) operating performance overview
RETAIL (PHARMACY) BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT RETAIL (PHARMACY) +16.3% +1.0% KEY DRIVERS +9.3% 782 790 ▪ 4Q22 and FY22 revenues reflect the GEL MILLION +4.1% 679 +1.0% recalibration of product prices due to GEL’s appreciation against foreign curren
Slide 54: Retail (pharmacy) business valuation overview
Externally valued1 RETAIL (PHARMACY) BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +3.7% -7.9% -0.7% +7.0% 9.1x 8.6x 30-Sep-22 31-Dec-22 VALUATION HIGHLIGHTS1 ADJUSTED NET DEBT TO EBITDA2 GEL million, unless
Slide 55: 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 Hospitals 2,630 15% 11% 10% GHG Clinics 520 3% 10% 9% 9% 9% 9% State 1,281 7% 2,480 • Since 2020 Government spending increased to manage the
Slide 56: Hospitals business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED HOSPITALS BUSINESS OVERVIEW (CONT’D) Bed occupancy rate CASH FLOW HIGHLIGHTS1 4Q22 FY22 Average length of stay 3 5.4 5.2 5.6 5.7 5.1 5.7 5.0 250.0% Operating cash flow GEL 10.2m GEL 28.6m 2.5 200.0% Change y-o-y -33.2% -49.9% 2 -11.0ppts -17.6ppts
Slide 57: Hospitals operating performance overview
HOSPITALS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA1 DEVELOPMENT +25.4% -9.3% HOSPITALS 318 KEY DRIVERS 289 +3.9% ▪ A y-o-y decrease in 4Q22 and FY22 revenue GEL MILLION +10.4% -29.0% and EBITDA reflects: 230 ➢ the suspension of COVID contracts by 74 the Government in 1Q22,
Slide 58: Hospitals business valuation overview
Externally valued1 HOSPITALS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q +1.1% +2.8% +3.2% +0.2% 12.2x 11.4x 30-Sep-22 31-Dec-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise
Slide 59: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW MARKET SHARE 9M22 (GROSS PREMIUMS MARKET & ALDAGI GROSS PREMIUMS WRITTEN1 WRITTEN) (GEL MILLION) INVESTMENT RATIONALE 500 442 • Significantly underpenetrated insurance market in Georgia 450 384 (0.8% penetration in p
Slide 60: P&C insurance business overview
Private large portfolio companies EXTERNALLY VALUED P&C INSURANCE BUSINESS OVERVIEW Distribution Mix (GPW %) | FY22 COMBINED RATIO MTPL Channel -1.1 ppts +0.2 ppts 3% Partnerships with 82.1% 81.5% 80.8% 79.7% 79.5% 79.7% 73.9% 77.5% 75.2% 75.4% 72.6% Financial Institutions 31% Direct Sales & 41.6% 4
Slide 61: Insurance operating performance overview
INSURANCE BUSINESS OPERATING PERFORMANCE OVERVIEW EARNED PREMIUMS NET NET INCOME DEVELOPMENT +22.4% +9.1% +5.1% INSURANCE 173 159 +11.7% GEL MILLION KEY DRIVERS 142 24.6 P&C Insurance 23.4 22.0 75 3.4 ▪ Increase in earned premiums net is mainly 72 driven by the growth in the credit life, +21.6% 6.4
Slide 62: P&C insurance business valuation overview
Externally valued1 P&C INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT (GEL MILLION) Change q-o-q +6.6% 10.7x 10.7x 30-Sep-22 31-Dec-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Dec-22 30-Sep-22 Change
Slide 63: Renewable energy business overview
Private investment stage portfolio companies EXTERNALLY VALUED RENEWABLE ENERGY BUSINESS OVERVIEW INVESTMENT RATIONALE ELECTRICITY CONSUMPTION ▪ Growth in electricity consumption has been ~3.3x more in TWhs than growth in electricity supply since 2010, resulting in increased deficit. 20.0 ▪ 21.5% of
Slide 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 | 31 DECEMBER 2022 Generation, Gross 10.5 8.4 13.9 24.5 22.8 21.0 47.1 53.9 104.4 102.3 76.6 80.3 87.3 83.3 268.3 265.8 Commissioned In
Slide 65: Renewable energy operating performance overview
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +7.7% RENEWABLE ENERGY +6.6% +9.7% 15 +7.9% KEY DRIVERS 14 14 • A y-o-y decrease in revenue and EBITDA in 4Q22 US$ MILLION 11 reflect the net impact of: +20.9% 10 10 +37.8% ➢ A 43.3% y-o-y decrease in ele
Slide 66: Renewable energy business valuation overview
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 EQUITY FAIR VALUE COMPOSITION AT 31-DEC-22 (US$ MILLION) (US$ MILLION) Change q-o-q +5.3% -16.5% +35.5% 18 Total value US$ 83 65 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EB
Slide 67: 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 68: Education business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED EDUCATION BUSINESS OVERVIEW (CONT’D) Operating highlights As of 31-Dec-22 PRIVATE K-12 MARKET IN GEORGIA Number of learners in private K-12 market Turnover of private K-12 market COVID impact Capacity utilization, 73.4% COVID impact 0.5%
Slide 69: Education operating performance overview
EDUCATION BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +65.1% EDUCATION +36.5% +63.2% KEY DRIVERS 43 GEL MILLION +34.8% ▪ Increase in revenues reflect strong intakes and a ramp-up of the utilization. +57.5% 31 +19.9% 14 ▪ EBITDA margin was down by 5.5 ppts y-o-y in
Slide 70: Education business valuation overview
Externally valued1 EDUCATION BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 LTM EV/EBITDA DEVELOPMENT (GEL MILLION) Change q-o-q +12.0% -39.7% NMF +5.8% +0.5% 16.9x 4 14.8x 4 30-Sep-22 31-Dec-22 2 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted otherwise 31-Dec-22 3
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 10.00 3.9 3.9 Georgia has the lowest
Slide 72: Clinics & diagnostics business overview (cont'd)
Private investment stage portfolio companies EXTERNALLY VALUED CLINICS & DIAGNOSTICS BUSINESS OVERVIEW (CONT’D) CLINICS DIAGNOSTICS (FY22) 19 17 Market share by number of registered patients 1.0 million 2.5 Community Clinics Polyclinics GHG clinics 615,700 21% Number of patients served Average numbe
Slide 73: Clinics & diagnostics operating performance overview
CLINICS & DIAGNOSTICS BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT2 EBITDA1 DEVELOPMENT +41.8% -14.5% 101 -13.7% CLINICS & DIAGNOSTICS 86 30 -55.0% KEY DRIVERS 21 -2.2% 20 61 ▪ Similar to the hospitals business, our clinics GEL MILLION 71 business was also impacted by the 66 -69.8% 7
Slide 74: Clinics & diagnostics business valuation overview
Externally valued1 CLINICS & DIAGNOSTICS BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 IMPLIED LTM EV/EBITDA DEVELOPMENT (GEL MILLION) (incl. IFRS 16) Change q-o-q -2.2% +0.7% +9.4% -4.1% 16.5x 12.7x 30-Sep-22 31-Dec-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless not
Slide 75: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES 75
Slide 76: The 2nd consecutive year of double-digit growth
THE 2ND CONSECUTIVE YEAR OF DOUBLE-DIGIT GROWTH PRELIMINARY ECONOMIC GROWTH 10.1% Y-O-Y IN 2022, WITH 4Q22 GROWTH TOTALING 9.5% Y-O-Y 50% 45% REAL GDP UP 10.1% Y-O-Y IN 2022 40% 26% 30% 19% 18.0% KEY DRIVERS 20% 14.6% 12% 11.6% 10% 10% 7% 7% 10% 7.2% 9.7%10.5%8.8% 8.3% 9.3%11.0% ➢ Strong external de
Slide 77: Georgian Lari now above pre-pandemic levels
GEORGIAN LARI – NOW ABOVE PRE-PANDEMIC LEVELS APPRECIATING SINCE MID-2021, BRIEFLY INTERRUPTED AFTER THE RUSSIAN INVASION OF UKRAINE, GEL HAS NOW STRENGTHENED TO ABOVE PRE-PANDEMIC LEVELS AGAINST USD Sources: NBG GEL APPRECIATION DRIVERS 3.7 USD/GEL 3.5 3.46 3.40 ➢ Record high remittance inflows, in
Slide 78: Current account deficit 2.7% of GDP in 9M22
CURRENT ACCOUNT DEFICIT 2.7% OF GDP IN 9M22 ON THE BACK OF A RECORD-HIGH 6% SURPLUS IN 3Q22 CURRENT ACCOUNT BALANCE (% OF NOMINAL GDP) EXTERNAL INFLOWS* INCREASED BY US$ 5.6 BN Y-O-Y IN 2022, O/W INFLOWS FROM RUSSIA INCREASED BY US$ 2.4BN AND INFLOWS FROM OTHER COUNTRIES GREW BY US$ 3.2 BN 40% 1,600
Slide 79: Inflation back to single digits and expected to decelerate in 2023
INFLATION BACK TO SINGLE DIGITS AND EXPECTED TO CONTINUE DECELERATING IN 2023 INFLATION Y-O-Y VS. INFLATION TARGET Sources: NBG, GeoStat DISINFLATION TO CONTINUE IN 2023 16 Headline Inflation Core Inflation Target 12 ➢ Annual inflation reached 9.8% in December 2022 (11.9% on 9.4 average in 2022) and
Slide 80: Public debt projected to have fallen below 2019 levels
PUBLIC DEBT PROJECTED TO HAVE FALLEN BELOW 2019 LEVELS IN 2022, WITH THE DEFICIT/GDP RATIO HALVING Y-O-Y PUBLIC DEBT Sources: MoF FISCAL SUPPORT HAS BEGUN MODERATING External Public Debt (% of GDP) Total Public Debt (% of GDP) 60.1% ➢ Fiscal support moderated in 2022, with current expenditures 60% g
Slide 81: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 81
Slide 82: Our robust corporate governance framework
OUR ROBUST CORPORATE GOVERNANCE FRAMEWORK BOARD OF DIRECTORS COMPOSITION IRAKLI GILAURI, CHAIRMAN & CEO NEIL JANIN, Experience: Formerly BGEO Group CEO; Up to 20 years INDEPENDENT NON-EXECUTIVE DIRECTOR of experience in the banking, investment and finance. Experience: Formerly Chair and Non-Executiv
Slide 83: Georgia Capital's highly experienced management team
GEORGIA CAPITAL’S HIGHLY EXPERIENCED MANAGEMENT TEAM Irakli Gilauri, Chairman & CEO Irakli Gilauri formerly served as the CEO of BGEO Group from 2011 to May 2018. He joined as CFO of Bank Ia Gabunia, Chief Strategy Officer of Georgia in 2004 and was appointed as Chairman of the Bank in September 201
Slide 84: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 84
Slide 85: Renewable energy operating performance overview (GEL)
RENEWABLE ENERGY BUSINESS OPERATING PERFORMANCE OVERVIEW REVENUE DEVELOPMENT EBITDA DEVELOPMENT +0.9% RENEWABLE ENERGY NMF -2.7% -3.9% 32 33 32 44 42 +1.3% GEL MILLION 12 16 +15.9% -21.9% 20 -30.1% 4 10 8 8 10 1 8 8 10 7 6 32 -18.1% 26 5 5 4Q20 4Q21 4Q22 FY20 FY21 FY22 4Q20 4Q21 4Q22 FY20 FY21 FY22
Slide 86: Renewable energy business valuation overview (GEL)
Externally valued1 RENEWABLE ENERGY BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 EQUITY FAIR VALUE COMPOSITION AT 31-DEC-22 (GEL MILLION) (GEL MILLION) Change q-o-q +0.3% -20.4% +29.2% 48 Total value 225 177 Operational assets Pipeline projects VALUATION HIGHLIGHTS1 NET DEBT TO EBIT
Slide 87: Medical insurance business overview
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW Largest medical insurer in the country with 19%1 market share Offering a variety of medical insurance products, with a wide distribution network to the Georgian population BUSINESSES MAJOR GROWTH DRIVERS Market s
Slide 88: Medical insurance business overview (cont'd)
Private large portfolio companies EXTERNALLY VALUED MEDICAL INSURANCE BUSINESS OVERVIEW (CONT’D) NUMBER OF INSURED & RENEWAL RATE REVENUE (NET INSURANCE PREMIUMS EARNED) 300 250 400 83.9% 95.0% 200 74.3% 76.9% 77.5% 78.0% 77.4% 77.1% 73.4% 69.7% 73.4% GEL million 300 -0.9% 75.0% 234 236 -0.9% 150 +3
Slide 89: Medical insurance business valuation overview
Externally valued1 MEDICAL INSURANCE BUSINESS VALUATION OVERVIEW VALUE DEVELOPMENT OVERVIEW | 4Q22 IMPLIED LTM P/E MULTIPLE DEVELOPMENT2 (GEL MILLION) Change q-o-q +36.6% +9.7% +27.4% 10.6x 8.4x 30-Sep-22 31-Dec-22 VALUATION HIGHLIGHTS1 NET DEBT TO EBITDA GEL million, unless noted No No No 31-Dec-22
Slide 90: Contents
CONTENTS 01 GEORGIA CAPITAL AT A GLANCE 02 OUR STRATEGY 03 4Q22 & FY22 PERFORMANCE OVERVIEW 04 PORTFOLIO OVERVIEW 05 MACROECONOMIC OVERVIEW | GEORGIA 06 APPENDICES ▪ Board of directors and management team ▪ Portfolio companies overview ▪ Georgia Capital financial statements 90
Slide 91: Private portfolio companies' debt maturity profile
PRIVATE PORTFOLIO COMPANIES’ DEBT MATURITY PROFILE GROSS DEBT MATURITY AS OF 31 DECEMBER 2022 (GEL MILLION) 2023 2024 2025 2026+ Total Large portfolio companies 163.0 88.2 30.8 45.7 327.7 Retail (pharmacy) 27.2 10.8 10.8 16.2 65.0 Hospitals 135.8 77.4 20.0 29.5 262.7 Medical Insurance - - - - - Inve
Slide 92: Value creation in private portfolio | 4Q22
VALUE CREATION IN PRIVATE PORTFOLIO | 4Q22 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 329.4 Performance buy-outs / exits and FX 4Q22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 250,394 Water Utility 2,000 GEL MILLION Total Listed and Observable Portfolio Companies 25
Slide 93: Value creation in private portfolio | FY22
VALUE CREATION IN PRIVATE PORTFOLIO | FY22 Operating Greenfields / Multiple Change Value Creation in Portfolio Businesses 34.1 Performance buy-outs / exits and FX FY22 GEL thousand (1) (2) (3) (1)+(2)+(3) BoG 190,175 Water Utility 15,608 Total Listed and Observable Portfolio Companies 205,783 GEL MI
Slide 94: NAV statement | 4Q22
NAV STATEMENT | 4Q22 1.Value 2a. 3.Operating 4. Liquidity GEL thousand unless otherwise noted 30-Sep-22 2b. Buybacks 2c. Dividends Management/ FX / 31-Dec-22 Change % Creation Investments Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 598,169 250,394 - - (18,100) - -
Slide 95: NAV statement | FY22
NAV STATEMENT | FY22 1.Value 2a. 3.Operating 4. Liquidity GEL thousand unless otherwise noted 31-Dec-21 2b. Buybacks 2c. Dividends Management/ FX / 31-Dec-22 Change % Creation Investments Expenses Other Listed and Observable Portfolio Companies Bank of Georgia (BoG) 681,186 190,175 - - (40,898) - -
Slide 96: Income statement | 4Q22 & FY22
INCOME STATEMENT | 4Q22 & FY22 Income statement GEL ‘000, unless otherwise noted 4Q22 4Q21 Change FY22 FY21 Change Dividend income 27,435 29,931 -8.3% 93,875 74,362 26.2% Interest income 6,641 6,255 6.2% 32,955 23,140 42.4% Realised / unrealised gain/(loss) on liquid funds / Gain 10,437 (2,110) NMF
Slide 97: 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 98: Forward looking statements
FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or int
Slide 99: Company information
COMPANY INFORMATION Georgia Capital PLC Registered Address 42 Brook Street London W1K 5DB United Kingdom www.georgiacapital.ge Registered under number 10852406 in England and Wales Stock Listing London Stock Exchange PLC’s Main Market for listed securities Ticker: “CGEO.LN” Contact Information Georg