Georgia Capital PLC · LSE:CGEO
Georgia Capital — FY2022 Earnings Presentation
24 slides from Georgia Capital's earnings presentation, 2023
Slide 1: Macroeconomic Overview 4Q22 & FY22 Results
MACROECONOMIC OVERVIEW 4Q22 & FY22 RESULTS
Slide 2: 2nd consecutive year of double-digit growth in 2022
2ND CONSECUTIVE YEAR OF DOUBLE-DIGIT GROWTH IN 2022 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% 10% 9.7%10.5%8.8% 8.3% 9.3%11.0% 10% 7% 7% 7.2% ➢ Strong ext
Slide 3: WB: Economic growth in Georgia to be 7th highest in the world in 2022
WB: ECONOMIC GROWTH IN GEORGIA TO BE 7TH HIGHEST IN THE WORLD IN 2022, WITH RECOVERY 2ND STRONGEST AMONG ECONOMIES THAT SHRANK IN 2020 REAL GDP GROWTH FORECASTS (2022, ALL COUNTRIES) | WB GDP PER CAPITA BY COUNTRIES # Country GDP growth forecast, 2022 50,000 180% 1 Guyana 57.8% 2 Fiji 15.1% 45,000 1
Slide 4: 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 5: Net external earnings positive since 2Q22, record-high external surplus
NET EXTERNAL EARNINGS* HAVE REMAINED POSITIVE SINCE 2Q22, DELIVERING A RECORD-HIGH EXTERNAL SURPLUS EXTERNAL EARNINGS (US$ MILLION) TERMS OF TRADE HAVE REACHED 107% ON AVERAGE IN 11M22, COMPARED TO 101% IN 2021 (JAN 2017=100), PEAKING IN 1Q22 Money transfers (Inflows) Money transfers (Outflows) Tour
Slide 6: 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 7: 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 8: Public debt projected to have fallen below 2019 levels in 2022
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 9: Sovereign ratings with favourable macro fundamentals
SOVEREIGN RATINGS WITH FAVOURABLE MACRO FUNDAMENTALS Key Ratings Highlights General Facts Rating Agency Rating Outlook Affirmed Ba2 Negative April 2022 BB Stable February 2022 Georgia BB Positive January 2023 Georgia is favorably placed among peers Fitch Rating Country Country Rating Outlook ▪ Area:
Slide 10: 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 11: Institutional oriented reforms
INSTITUTIONAL ORIENTED REFORMS Open Budget Index, 2021 | International Budget Partnership Economic Freedom Index | 2022 (Heritage Foundation) (Budget Transparency) Ireland 3 Georgia 1 Sweden 3 Lithuania 17 Norway 6 Latvia 18 Italy 10 Czech Republic 21 UK 12 Germany 14 Georgia 26 France 15 Bulgaria 2
Slide 12: Economic growth continuing at pace
ECONOMIC GROWTH CONTINUING AT PACE Gross domestic product Nominal GDP structure, 9M22 Nominal GDP, GEL bn (LHS) Real GDP, YoY % Industry Other 17% 70 24% 23% 60 60 51 20% 49 49 50 45 43 41 16% 40 34 36 10.4% 11.2% 10.3% 29 31 12% 25 27 30 8% Health Trade 20 4% 15% 4% 10 Education 0% 4% 0 Finance -10
Slide 13: Strong external demand evident in accelerating FX inflows
STRONG EXTERNAL DEMAND EVIDENT IN ACCELERATING FX INFLOWS, WHILE DOMESTIC DEMAND ALSO REMAINS ROBUST DESPITE FISCAL SUPPORT MODERATING Remittances, y/y Remittances, vs 2019 80% Exports, y/y Exports, vs 2019 80% Imports, y/y Imports, vs 2019 211% 80% 80% 240% 240% 40% 42% 180% 180% 40% 40% 40% 40% 32
Slide 14: Unemployment down at historic lows
UNEMPLOYMENT DOWN AT HISTORIC LOWS Unemployment rate at historical lows Labour force participation rate by contributions Sources: GeoStat Sources: UNDP 1450 27.2 27.2 26.7 Employed, Thsd Unemployment, % 30 26.4 Hired Self-Employed Unemployed Participation Rate 23.0 25 54% 54% 55% 55% 54% 54% 21.9 21
Slide 15: Inflation to continue decelerating in 2023
INFLATION TO CONTINUE DECELERATING IN 2023 Inflation Y-o-Y vs. inflation target Inflation components Sources: NBG, GeoStat Source: GeoStat Food and non-alcoholic beverages Alcoholic beverages and tobacco 16 Headline Inflation Core Inflation Target Transport Housing and utilities 16 Other Inflation 1
Slide 16: 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) Exports and Re-exports, US$ billion Sources: NBG Source: NBG 30% 30% Service exports Goods exports, geo-originated Re-exports 1.0 1.3 0.8 20% 20% 0.5 1.1 1.1 0.9 3.9
Slide 17: Diversified foreign trade
DIVERSIFIED FOREIGN TRADE Exports and imports of goods, Y-o-Y % Foreign Demand, 2022 Source: Geostat Source:, Geostat 75% Imports, YoY % Exports, YoY % 75% 2% Machinery and transport equipment 3% 60% 60% 0% 6% Crude materials, inedible, except fuels 22% 45% 45% 9% Manufactured goods 30% 30% Beverage
Slide 18: Remittances at record high levels as tourism revenues bounce back
REMITTANCES AT RECORD HIGH LEVELS DUE TO THE MIGRANT EFFECT AS TOURISM REVENUES ALSO BOUNCE BACK Tourism revenues to GDP Tourism revenues by country Sources: NBG, Geostat Sources: GNTA Tourism Revenues, $ mn Tourism Revenues, % of GDP 259% 272% Tourism Revenues in 2022 (% of 2019 level) 242% 229% 35
Slide 19: Appropriate monetary policy stance ensuring macroeconomic stability
APPROPRIATE MONETARY POLICY STANCE ENSURING MACROECONOMIC STABILITY Monetary policy rate International Reserves Sources: NBG Sources: NBG 14 International reserves reached a record-high of $4.9 bn by the end of September 2022, up 15% y-o-y and providing ample cover 12 11.00 6,000 Official Reserve As
Slide 20: GEL appreciating since mid-2021 and now above pre-pandemic levels
80 90 100 110 120 130 0% 10% 20% 30% 40% -10% 50% Jan-21 Mar-17 Sources: NBG Feb-21 Jun-17 Mar-21 Sep-17 Sources: NBG, Bloomberg Apr-21 Dec-17 May-21 Mar-18 Jun-21 Loans by currencies Jul-21 Jun-18 Exchange rate indices Aug-21 Sep-18 Sep-21 Dec-18 Oct-21 Mar-19 Nov-21 Jun-19 GEL Loans, YoY Dec-21 Se
Slide 21: Tax revenues continue overperformance while expenditure growth moderated
TAX REVENUES CONTINUE OVERPERFORMANCE WHILE EXPENDITURE GROWTH HAS MODERATED TAX REVENUES GREW BY 28% Y-O-Y IN 20M22, WHILE TOTAL EXPENSES GREW BY 12% Y-O-Y (9% FOR CURRENT AND 22% FOR CAPITAL EXPENSES), AS THE OPERATING BALANCE IMPROVED FROM GEL -227 MN IN 2021 TO GEL 2.6 BN IN 2022 2500 Tax Revenu
Slide 22: Public debt projected to have fallen below 2019 levels in 2022
PUBLIC DEBT PROJECTED TO HAVE FALLEN BELOW 2019 LEVELS IN 2022, WITH THE DEFICIT/GDP RATIO HALVING Y-O-Y AVERAGE WEIGHTED INTEREST RATE WAS 1.72%, WHILE REMAINING Public debt Sources: MOF MATURITY TOTALED 9.4 YEARS AS OF 31 SEPTEMBER 2022 Source: MOF External Public Debt (% of GDP) Total Public Debt
Slide 23: 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 24: 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