Georgia Capital PLC · LSE:CGEO
Georgia Capital — Q1 2020 Earnings Presentation
86 slides from Georgia Capital's earnings presentation, May 19, 2020
Slide 1: Investor presentation
Investor 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. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices 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: Georgia Capital's response to COVID-19
Georgia Capital’s 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 lev
Slide 8: 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 9: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 9
Slide 10: CGEO:LN performance
CGEO:LN performance LSE premium listed, with more than 90% institutional shareholder base GCAP shareholders allocation by geography Number of outstanding shares as at 31-Mar-20 As of 18 May 2020 39,384,712 (2,650,375) 3,435,438 37,686,056 Average daily 30.1% 28.2% USA (2,483,719) trading volume – GB
Slide 11: Our portfolio at a glance
Our portfolio at a glance Management platform Public portfolio Private portfolio – GEL 1,140m1 Third-party – GEL 660m1 managed capital Late Stage – GEL 613m1 Pipeline - GEL 26m1,3 Georgia Housing P&C Water Utility Auto Service Healthcare Group Development Insurance 70.6% 100% 100% 100% 90%-100%6 GEL
Slide 12: Portfolio highlights | March 2020
Portfolio highlights | 31 March 2020 Gross cash invested of GEL 1.3b Net cash invested of GEL 447m Portfolio fair value of GEL 1.8b Listed Private late stage Private early stage Pipeline Original investment 252 129 214 92 10 143 195 62 101 56 14 9 MOIC1 1.7 6.1 2.4 2.1 17.3 1.1 1.1 1.0 0.1 NMF 1.1 N
Slide 13: Solid track record
Solid track record Created three listed companies from Georgia, on the premium segment of the London Stock Exchange Acquisitions Capital raise Exit IRR The Georgia Capital management team Uniquely positioned given the access 121% IRR from GHG IPO has a track record of executing more to capital in a
Slide 14: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 14
Slide 15: Georgia Capital – Your ground floor investment opportunity
Georgia Capital – Your ground floor investment opportunity Capitalizing on fast-growing economy with strong governance, management and access to capital Access to capital Access to management Three fundamental enablers Strong corporate governance Page 15
Slide 16: Strong corporate governance
Strong corporate governance How we run Georgia Capital Strong board, composed solely of independent directors with extensive international experience Approximately 40 employees at the management company level Highly experienced management team in each portfolio company with a strong measure of indep
Slide 17: Strong corporate governance
Strong corporate governance Aligned shareholder and management interests by share compensation Platform costs - targeted at maximum c.2% of MCAP Key things to know Cash preservation is a key target for GCAP: two thirds of total 1 operating expenses are related to share-based compensation. 33% c. 1%
Slide 18: Managing investments
Managing investments Share ownership plan of management in portfolio companies Investment stage Pipeline Acquisition/ Early Late Target to Listed Possible Entrance completion exit Discovery Young Portfolio Large Portfolio Mature Portfolio of Exit Companies Companies Companies Sector Digital Auto Edu
Slide 19: Our investment philosophy
Our investment philosophy We will pick well, we will manage very well and sell extremely well Cash generation at both GCAP and portfolio company level is a key success factor 2nd exit 1st exit: cash-out ▪ Trade sale, IPO, Fund ▪ Cash inflows through leveraging up and/or Entry dividend payouts ▪ Usin
Slide 20: Capital allocations: 360-degree analysis
Capital allocations 360-degree analysis – a strong foundation for value creation Buying assets at attractive prices is a key part of our investment philosophy Targeting to buy assets at a higher discount to their Discounts at 31 March 2020 listed peers than GCAP’s fair value discount New opportuniti
Slide 21: Capital allocations: Buybacks
Capital allocations Buybacks US$45 million share buyback programme, commenced in Jun-18, was completed in Aug-19 US$ 45 million 3,336,843 GBP 10.45 Programme amount Shares bought back Average price of shares bought back On 1 August 2019 we announced market purchase of CGEO shares of up to US$ 20 mil
Slide 22: Capital allocations: Clear exit paths
Capital allocations Clear exit paths Trade sale IPO Fund Promote Water Utility x x x P&C Insurance x Housing Development x x Renewable Energy x x x Hospitality & Commercial x x Beverages x x Education x x Auto Service x Digital services x Exit options are set prior to making an investment decision P
Slide 23: Capital allocations: How we evaluate investment performance
Capital allocations How we evaluate investment performance ROIC, MOIC and IRR combination is the key decision making matrix ROIC for financing projects and reinvestment MOIC and IRR at GCAP level at portfolio companies’ level Money multiples. We want to know achievable money multiples ROIC. We measu
Slide 24: Additional strategic priorities
Additional strategic priorities Over time Georgia Capital will: 1. Decrease share of listed assets to 20% and 2. manage third-party money Over the next 5 years we will reshape our balance sheet 31-Mar-2020 In 5 years Management company 20% 37% Third-party managed capital 63% 80% GCAP investment port
Slide 25: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 25
Slide 26: NAV Statement | March 2020
NAV Statement | 31 March 2020 1. Value 2a. 3. Operating 4. Liquidity management/ GEL thousands unless otherwise noted Dec-19 2b. Buybacks 2c. Dividends Mar-20 Change % creation Investments expenses FX /Other Listed Portfolio Companies GHG1 430,079 (134,624) - - - - - 295,455 -31.3% BoG1 597,735 (233
Slide 27: 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 28: 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 29: 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 30: 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 31: 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 32: NAV movements in 1Q20
NAV movements in 1Q20 NAV down 35.2% to GEL 1,137 million during 1Q20 GEL millions unless otherwise noted NAV -21.0% -7.8% -0.3% -0.5% -5.6% -35.2% change % GEL 1,754 (368) (137) (6) (8) (98) GEL 1,137 NAV Value creation on Value creation on Buybacks Operating expenses Liquidity NAV 31-Dec-19 listed
Slide 33: Liquidity management at Georgia Capital
Liquidity management at Georgia Capital GEL 660 million Liquid assets & Loans issued | 31-Mar-2020 Net debt | 31-Mar-2020 ► Georgia Capital issued inaugural US$ 300m international corporate bonds in March 2018 Loans issued (44%) GEL millions Net debt overview | 31-Mar-2020 Cash & liquid funds (56%)
Slide 34: Portfolio performance highlights | 1Q20
Portfolio performance highlights | 1Q20 Private late stage Pipeline Water Utility Housing Development P&C Insurance Auto Service -6.1% +78.4% +18.1% +0.4% 33.2 31.2 -10.9% 29.1 NMF +6.5% 23.5 NMF 19.9 16.3 17.4 17.5 -23.2% NMF NMF NMF 17.3 15.4 10.7 9.0 8.2 2.4 8.5 1.8 4.3 3.3 (1.6) (14.8) (0.4) 0.0
Slide 35: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 35
Slide 36: 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 37: Georgia Healthcare Group (GHG) overview
Listed portfolio Georgia Healthcare Group (GHG) overview http://ghg.com.ge/ Investment rationale Total healthcare market (including healthcare services and pharmacy) ▪ Very low base: healthcare services spending per capita only US$ 308 (EU average GEL million CAGR is US$ 3,2111) ▪ Growing market: he
Slide 38: Georgia Healthcare Group (GHG) overview (cont'd)
Listed portfolio Georgia Healthcare Group (GHG) overview (cont’d) http://ghg.com.ge/ Stock price performance Financial metrics (GEL millions) 2015 20161 2017 2018 2019 1Q19 1Q20 Change 4.5 Healthcare services EBITDA, excl. IFRS 16 54 74 70 76 843 21.33 17.03 -20.2% 4 3.5 Pharmacy and distribution EB
Slide 39: Bank of Georgia (BoG) Overview
Listed portfolio Bank of Georgia (BoG) Overview http://bankofgeorgiagroup.com/ Market opportunity Investment rationale ▪ The first entity from Georgia to be listed on the premium segment of the Main Market of the Banking sector assets, loans and deposits London Stock Exchange (LSE:BGEO) since Februa
Slide 40: Bank of Georgia (BoG) Overview (cont'd)
Listed portfolio Bank of Georgia (BoG) Overview (cont’d) http://bankofgeorgiagroup.com/ Stock price performance Financial metrics (GEL millions) GBP 8.15 2015 2016 2017 2018 2019 1Q19 1Q20 Change 23 as of 18-May-20 ROAE 21.9% 22.2% 25.2% 26.4%2 26.1%3 24.5% -18.6% -43.1ppts 18 NIM 7.7% 7.4% 7.3% 6.5
Slide 41: Water utility business overview
Private late stage portfolio Water utility business overview Investment rationale Effect of new consumers on the market ▪ Regulated monopoly in Tbilisi and surrounding districts with high entry barriers ▪ Sectoral output increasing at a robust growth rate (on average 9.5% in the last 10 years) 13.6
Slide 42: Water utility business overview (cont'd)
Private late stage portfolio Water utility business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions) 2015 2016 2017 2018 2019 1Q19 1Q20 Change GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Total revenue 119 127 135 149 163 33.2 31.2 -6.1% LTM
Slide 43: Housing development business overview
Private late stage portfolio Housing development business overview Investment rationale Significant room for further growth in mortgages ▪ Shortage of housing from Soviet era combined with Georgian tradition of multi generations living under one roof - average household size is significantly higher
Slide 44: Housing development business overview (cont'd)
Private late stage portfolio Housing development business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions)1 2015 2016 2017 2018 2019 1Q19 1Q20 Change GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change Apartments sales revenue 45 96 92 95 55 6.3 14.
Slide 45: P&C insurance business overview
Private late stage portfolio P&C insurance business overview Investment rationale Market share FY19 Market composition by • Significantly underpenetrated P&C insurance market in Georgia (0.6% penetration) (earned premium, gross) product lines • Market leader with a powerful distribution network of p
Slide 46: P&C insurance business overview (cont'd)
Private late stage portfolio P&C insurance business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions) GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change 2015 2016 2017 2018 2019 1Q19 1Q20 Change Earned premiums, net 47 50 63 67 75 17.4 17.5 0.4% LTM
Slide 47: Renewable energy business overview
Private early stage portfolio Renewable energy business overview Investment rationale Electricity supply and consumption, 2019 ▪ Growing electricity market as supply lags behind the increasing demand, creating opportunities. ▪ Underutilized energy resources - availability of economically feasible hy
Slide 48: Renewable energy business overview (cont'd)
Private early stage portfolio Renewable energy business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions) GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change 2017 2018 2019 1Q19 1Q20 Change Revenue NMF NMF 16.2 NMF 6.6 NMF At acquisition price (GCAP
Slide 49: Hospitality and commercial real estate business overview
Private early stage portfolio Hospitality and commercial real estate business overview Investment rationale Arrivals of tourists and tourism revenue | Georgia ▪ Increased number of tourists visiting Georgia every year: 5.1 million visitors in 2019, up 6.8% y-o-y, Source: Georgian National Tourism Ad
Slide 50: Hospitality and commercial real estate business overview (cont'd)
Private early stage portfolio Hospitality and commercial real estate business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions)2 GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change 2016 2017 2018 2019 1Q19 1Q20 Change NOI3 from operating leases 3 3 5
Slide 51: Wine business overview
Private early stage portfolio Wine business overview Investment rationale Vineyard productivity – 2019 (TON/HA) ▪ Georgia is considered the “cradle of wine” with a rich, 8,000-year history of wine-making and home to over 500 unique grape varieties ➢ At 5.1 tons per hectare, grapes yield is three tim
Slide 52: Wine business overview (cont'd)
Private early stage portfolio Wine business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions) GEL millions, unless otherwise noted 31-Mar-20 31-Dec-19 Change 2015 2016 2017 2018 2019 1Q19 1Q20 Change Wine Revenue 18 18 20 29 42 7.9 6.9 -12.5% GCAP ownership 87%
Slide 53: Beer business overview
Private early stage portfolio Beer business overview Strong export market for carbonated soft drinks (CSD) Investment rationale ▪ Georgia falls behind beer consumption per capita against EU ▪ Georgia’s favorable trade regimes (free trade agreements with EU and China) Growing market provide potential
Slide 54: Beer business overview (cont'd)
Private early stage portfolio Beer business overview (cont’d) Valuation highlights | 31 March 2020 Financial metrics (GEL millions) 31-Mar-20 Change 2017 2018 2019 1Q19 1Q20 Change GEL millions, unless otherwise noted 31-Dec-19 Beer Revenue 18 29 44 5.8 7.3 26.7% GCAP ownership 87% 87% NMF Beer EBIT
Slide 55: Education business overview
Private early stage portfolio Education business overview Fragmented education market offers attractive opportunity for a scaled player Diversified business model with strategy 1-2-3 Strong platform to facilitate growth and scale to become the leading integrated education player with up to 27,000 le
Slide 56: Education business overview cont'd
Private early stage portfolio Education business overview cont’d Industry investment rationale Medium term demand outlook for private high schools ➢ Highly fragmented private school market ➢ Large and growing market currently- 10% private in 5-years - 20% private ➢ Efficiency upside ➢ High trading m
Slide 57: Attractive service business – Auto Service
Pipeline Attractive service business – Auto Service We aim to build a diversified business model combining different auto-related services to capitalise on the large and growing automotive services market Auto park in Georgia (‘000) Room for growth in the highly fragmented auto service market in Geo
Slide 58: Auto Service business overview
Pipeline Auto Service business overview Investment rationale Valuation highlights | 31 March 2020 ▪ Georgia’s Auto park continues to grow steadily, with 7.4% CAGR during the years 2012-2019 ▪ Georgia lags behind developed countries by number of private passenger cars per capita, showing room for GEL
Slide 59: Acquisition of the leading Georgian digital marketing agency
Pipeline Acquisition of the leading Georgian digital marketing agency Acquisition of Redberry enables us to have a platform for investments in the digital business US$ 2.8 million new capital injected for digital start-up development About Redberry 1 ➢ One of the most successful Georgian digital mar
Slide 60: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 60
Slide 61: Sovereign ratings with favourable macro fundamentals
Sovereign ratings with favourable macro fundamentals Key Ratings Highlights General Facts Rating Agency Rating Outlook Affirmed Ba2 Stable September 2019 BB Stable October 2019 Georgia BB Negative April 2020 Georgia is favorably placed among peers Fitch Rating Country Country Rating Outlook Armenia
Slide 62: Georgia's key economic drivers
Georgia’s key economic drivers Top performer globally in WB Doing Business over the past 12 years Liberal economic ▪ Liberty Act (effective January 2014) ensures a credible fiscal and monetary framework: policy ▪ Fiscal deficit/GDP capped at 3%; Public debt/GDP capped at 60%; ▪ Business friendly env
Slide 63: Institutional oriented reforms
Institutional oriented reforms Ease of Doing Business | 2020 (WB Doing Business Report) Economic Freedom Index | 2020 (Heritage Foundation) New Zealand 1 Singapore 2 Ireland 6 US 6 UK 7 Georgia Norway 7 9 Georgia 12 Up by four places compared to 2018 Lithuania 11 Lithuania 16 Estonia 18 Czech Republ
Slide 64: COVID-19 impact – IMF forecasts
COVID-19 impact – IMF forecasts Gross Domestic Product Consumer Price Inflation Source: IMF Source: IMF US$ b 7% 20 16% 6.0% 6% 15 12% 4.9% 4.7% 5% 10 4.8% 4.8% 5.1% 8% 4.0% 4.0% 3.6% 3.0% 2.9% 4% 5 4% 3% 2.6% 0 0% 2.1% 2% -5 -4% 1% -4.0% -10 -8% 0% 2015 2016 2017 2018 2019* 2020F 2021F 2015 2016 20
Slide 65: Diversified resilient economy
Diversified resilient economy Gross domestic product Diversified nominal GDP structure, 2019 Source: Geostat Source: Geostat InformationOther Industry US$ b Growth was robust in 2019, but will be negative in 2020 due to 3% 9% 20 16% 14% the pandemic, with IMF expecting real GDP to contract by 4% Hea
Slide 66: Room for further job creation
Room for further job creation Unemployment rate down 1.1 ppts y-o-y to 11.6% in 2019 UNDP Human Development Index Sources: GeoStat Sources: UNDP 0.79 0.79 0.78 18.3 0.78 2000 17.4 17.9 17.4 17.3 17.2 16.9 20 0.77 0.77 0.76 15.1 15.4 0.75 1900 14.6 14.1 14.0 13.9 13.9 0.74 13.5 0.74 12.4 12.6 12.7 12
Slide 67: Inflation targeting since 2009
Inflation targeting since 2009 Inflation y-o-y vs. inflation target Inflation y-o-y Source: GeoStat Sources: NBG, GeoStat 10 Core inflation closer to target 10 As demand and supply shocks stemming from the pandemic move inflation in different directions, we expect the demand side to prevail with tim
Slide 68: Current account deficit down to historic lows
Current account deficit down to historic lows Current account balance (% of nominal GDP) Exports and Re-exports, US$ billion Sources: NBG Source: NBG Double digit shrinking in the trade deficit helped current account balance (CAB) to 12.0 improve to a historic low of 5.1% in 2019, providing a strong
Slide 69: Diversified sources of capital
Diversified sources of capital Strong foreign investor interest Visitors and tourism revenues Sources: GeoStat Sources: GNTA, NBG 2,500 25% Tourism revenues fell by 70% in March, while 1Q20 was down by 26% 9.4 2,000 20% 3600 8.7 10.0 7.9 3100 6.7 1,500 11.6% 12.1% 15% 5.9 6.3 8.0 10.4% 10.9% 2600 5.
Slide 70: Tourism sector
Tourism sector Tourism revenues to GDP Spending per arrival, 2017 Sources: NBG, Geostat Source: WDI 18% 18% 3600 17% 20% 1600 1496 3100 14% 1310 13% 1400 2600 15% 1200 US$ million 10% 10% 2100 9% 1000 857 848 823 10% 771 763 757 714 1600 6% 800 692 661 629 591 555 527 1100 600 458 441 5% 600 400 140
Slide 71: Diversified foreign trade
Diversified foreign trade Goods’ Trade Deficit Oil imports Source: GeoStat Source: GeoStat In March 2020, the trade deficit fell by 7.3%, as exports were cut by 21.5% and imports 1200 contracted by 13.5% on the back of the pandemic Oil imports, US$ mn Oil imports, % change, y/y 90% 1000 0 50% 40% 80
Slide 72: Diversified foreign trade
Diversified foreign trade Imports of Goods, contribution to growth Foreign Demand, 1Q20 Source: NBG Source:, Geostat Investment goods Intermediate goods Consumer goods Imports y/y Crude materials, except fuels 30% 25% Machinery and transport equipment 20% 8% 26% Beverages and tobacco 15% 10% Manufac
Slide 73: Prudent monetary policy ensures macro-financial stability
Prudent monetary policy ensures macro-financial stability International reserves Monetary policy rate Sources: NBG Sources: NBG International reserves totaled $3.4b by the end of March 3700 14 NBG lowered the monetary policy rate to 8.5% at the end of April, as the demand shock is 3200 12 expected t
Slide 74: Floating exchange rate - policy priority
Floating exchange rate - policy priority Central Bank’s interventions Real effective exchange rate (REER) Sources: NBG Sources: NBG 250 220 NBG sold $120m in Mar-Apr 2020 on the foreign exchange market 155 200 and declared an active intervention policy to provide liquidity 145 150 120 100 100 135 10
Slide 75: Low public debt
Low public debt Public debt Breakdown of public debt Sources: MOF Source: MOF, as of 31 March 2020 Low public debt ensures a strong position to borrow to fight the 70% 50% pandemic, with IMF expecting public debt to rise to around 60% 50% 40% Multilateral 30% 57% 30% Domestic External 20% 20% 80% 10
Slide 76: Growth-oriented government reforms (2019-2020)
Growth-oriented government reforms (2019-2020) 1 Structural Reforms 2 Promoting Transit & Tourism Hub ▪ Tax Reform ▪ Roads ▪ Favorable tax rates for SME development ▪ Plan to finish all spinal projects by 2020 – East-West Highway, other supporting infrastructure ▪ Special tax regimes for regional of
Slide 77: Content
Content 1. Response to COVID-19 outbreak 2. Georgia Capital at a glance 3. Georgia Capital strategy & capital allocations 4. 1Q20 results discussion | Georgia Capital 5. Portfolio overview 6. Georgian macro overview 7. Appendices Page 77
Slide 78: 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
Slide 79: Multiple of Invested Capital (MOIC) | March 2020
Multiple of Invested Capital (MOIC) | 31 March 2020 Gross GEL millions Sell down Dividends Fair Value MOIC Realized MOIC Investment (1) (2) (3) (4) (2+3+4) / (1) (2+3) / (1) Listed Investments 381 418 138 660 3.2x 1.5x Georgia Healthcare Group PLC 252 131 4 295 1.7x 0.5x Bank of Georgia Group PLC 12
Slide 80: Net Asset Value evolution
Net Asset Value evolution Change since Change since 31-Dec-18 31-Dec-19 GEL 44.32 GEL 46.84 +5.7% GEL 30.18 -35.6% NAV per share GBP 13.05 GBP 12.46 -4.5% GBP 7.41 -40.5% GEL millions, except per share information Private 70% Private 54% 1,225 Private 906 100% 1,140 Listed Listed 59% 58% 978 1,028 L
Slide 81: Acquisitions in 2019 | private portfolio
Acquisitions in 2019 | private portfolio July 2019 August 2019 Buckswood International Alaverdi winery November 2019 May 2019 • The leading school in the mid-level • Purchase of 100% equity stake Redberry segment Qartli wind farm • 244 hectares of vineyards and 135 • Purchase of 100% equity stake Ma
Slide 82: 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 83: Georgia Capital's highly experienced management team
Georgia Capital’s highly experienced management team Georgia Capital Management Irakli Gilauri, Chairman & CEO Archil Gachechiladze, CEO, Bank of Georgia Formerly CEO of BGEO Group since 2011, joined as CFO of Bank of Georgia in 2004. Mr Listed Previously CEO at GGU, the Group’s water utility and re
Slide 84: Glossary
Glossary • Combined ratio equals sum of the loss ratio and the expense ratio in the P&C Insurance. • EBITDA - earnings before interest, taxes, non-recurring items, FX gain/losses and depreciation and amortization; Management uses EBITDA as a tool to measure the portfolio companies’ operational perfo
Slide 85: Company information
Company information Georgia Capital PLC Registered Address 84 Brook Street London W1K 5EH 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
Slide 86: Georgia Capital
GEORGIA CAPITAL