GHG Investor DayTbilisi, Georgia | June 2019

ghg.com.ge

GHG financial performance overview

Speaker: Irakli Gogia, CFO

2

Contents

Q&A

GHG | Financial performance overview

GHG | From Capex to cash flow

GHG | Capital allocation strategy

Annexes

3

(GEL '000)mn11Q19 1Q18

Change,

Q-o-Q2018 2017

Change,

Y-o-Y

GHG

Revenue 235,211 207,689 13.3% 849,917 747,750 13.7%

EBITDA(1) 37,409 31,399 19.1% 132,274 108,148 22.3%

ROIC normalised(2) (%) 14.4% 13.5% 0.9% 13.9% 12.8% 1.1%

Net Profit(1) 18,273 16,012 14.1% 53,239 45,940 15.9%

EPS(1) 0.09 0.08 16.4% 0.27 0.23 18.0%

Hospitals (referral hospitals)

Revenue 74,774 64,290 16.3% 268,270 235,426 14.0%

EBITDA(1) 19,162 17,100 12.1% 70,665 65,021 8.7%

EBITDA margin(1) (%) 25.6% 26.6% -1.0% 26.3% 27.6% -1.3%

EBITDA margin without roll-outs(1) (%) 27.8% 28.9% -1.1% 29.6% 30.0% -0.4%

Clinics (policlinics and community clinics)

Revenue 11,107 9,434 17.7% 38,321 29,576 29.6%

EBITDA(1) 2,076 1,375 51.0% 5,203 3,904 33.3%

EBITDA margin(1) 18.7% 14.6% 4.1% 13.6% 13.2% 0.4%

Pharmacy and distribution Business

Revenue 145,779 126,868 14.9% 518,578 450,315 15.2%

Gross margin 26.3% 24.7% 1.6% 25.5% 24.5% 1.0%

EBITDA(1) 15,561 12,644 23.1% 52,215 38,854 34.4%

EBITDA margin(1) (%) 10.7% 10.0% 0.7% 10.1% 8.6% 1.5%

Medical Insurance Business

Revenue 17,493 13,302 31.5% 55,112 53,710 2.6%

Combined ratio(1) (%) 97.9% 100.0% -2.1% 94.0% 102.5% -8.5%

Diagnostics

Revenue 1,154 696 65.8% N/A N/A N/A

EBITDA(1) 48 77 NMF N/A N/A N/A

* The above figures include allocation of head office costs to segments

(1) Excluding IFRS 16 effect

(2) Return on invested capital (“ROIC”) adjusted to exclude newly launched hospitals and polyclinics that are in roll-out phase

Progress towards major KPI’s

4

7.09.4

11.1

6.8

10.07.6

8.9 8.210.0

29.6

38.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

1Q

17

1Q

18

1Q

19

2Q

17

2Q

18

3Q

17

3Q

18

4Q

17

4Q

18

20

17

20

18

59.3 64.374.8

59.467.8

56.064.1 60.7

72.0

235.4

268.3

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1Q

17

1Q

18

1Q

19

2Q

17

2Q

18

3Q

17

3Q

18

4Q

17

4Q

18

20

17

20

18

186.4207.7 235.2

184.6211.8

179.1202.9 197.6

227.5

747.8

849.9

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1Q

17

1Q

18

1Q

19

2Q

17

2Q

18

3Q

17

3Q

18

4Q

17

4Q

18

20

17

20

18

GHG Hospitals

GE

L m

illi

on

s

GE

L m

illi

on

s

Clinics (community clinics and polyclinics)

GE

L m

illi

on

s

13.3%

11.4% 14.7% 13.3% 15.1%

13.7%

16.3%

8.4% 14.1% 14.4% 18.8%

14.0%

17.7%

35.0%47.2% 17.2% 21.9%

29.6%

Double digit revenue growth in all GHG segments

5

14.0 13.3 17.5

13.4 13.7 14.0 14.2 12.4 13.9

53.7 55.1

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1Q

17

1Q

18

1Q

19

2Q

17

2Q

18

3Q

17

3Q

18

4Q

17

4Q

18

20

17

20

18

111.4 126.9

145.8 110.9

127.3 106.6

123.3 121.4 141.0

450.3

518.6

0.0

100.0

200.0

300.0

400.0

500.0

600.0

1Q

17

1Q

18

1Q

19

2Q

17

2Q

18

3Q

17

3Q

18

4Q

17

4Q

18

20

17

20

18

Pharmacy and distribution Medical Insurance

GE

L m

illi

on

s

GE

L m

illi

on

s

14.9%

13.9% 14.8% 15.7%16.2%

15.2%

31.5%

-4.7%2.2% 2.0%

12.1%

2.6%

Double digit revenue growth in all GHG segments

6

12.6 15.6

38.9

52.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1Q18 1Q19 2017 2018

1.4 2.13.9

5.2

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1Q18 1Q19 2017 2018

17.1 19.2

65.070.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1Q18 1Q19 2017 2018

31.437.4

108.1

132.3

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

1Q18 1Q19 2017 2018

GHG Hospitals

Clinics

Pharmacy and distribution

Medical insurance

(1) EBITDA excluding IFRS 16 effect

EBITDA

margin

EBITDA

margin

EBITDA

margin

EBITDA

margin

Without

roll outs

26.6% 25.6% 27.6% 26.3%

28.9% 27.8% 30.0% 29.6%

14.6% 18.7% 13.2% 13.6%

23.1%

34.4%

10.0% 10.7% 8.6% 10.1%

0.2 0.6 -0.4

4.1

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1Q18 1Q19 2017 2018

175.5%

1.5% 3.2% -0.8% 7.4%

GE

L m

illi

on

s

19.1%

22.3%

12.1%

8.7%

51.0%33.3%G

EL

mil

lion

s

EPS,

GEL0.08 0.09 0.23 0.27

Double digit EBITDA growth in all GHG segments

7

Q&A

GHG | Financial performance overview

GHG | From Capex to cash flow

GHG | Capital allocation strategy

Annexes

Contents

8

PPE + goodwill & intangibles

Deleveraging

321.1 280.5

329.2 360.5 367.9 363.4

384.7 390.4 373.7

2.6 2.6

2.8 2.7 2.8 2.8 2.82.6 2.5

0

0.5

1

1.5

2

2.5

3

100.0

200.0

300.0

400.0

500.0

600.0

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Debt Net debt to EBITDA

648.0

786.5 850.3

200.0

400.0

600.0

800.0

1,000.0

1,200.0

2016 2017 2018

Goodwills and intangibles PPE, without IFRS 16

+21.4% +8.1%

GE

L m

illi

on

sG

EL

mil

lion

s

Gross debt

EBITDA based on last 12 months

Reduced investments and debt

9

1Q192016

▪ Added 6 new polyclinics

▪ Started renovation works at the

Regional Hospital and Tbilisi

Referral Hospital

▪ Launched 64 new services in 14

different referral hospitals

▪ Added 2 new polyclinics

▪ Acquired Khashuri Referral

Hospital and Kareli Community

Clinic

▪ Launched 54 new services in 11

different referral hospitals.

▪ Opened Tbilisi Referral Hospital

▪ Added 1 new polyclinic

▪ Completed our largest development and renovation

project and launched the flagship Regional Hospital with

306 newly-renovated beds

▪ Launched 26 new services in 15 different referral

hospitals

▪ Opened Mega Lab, the largest diagnostics laboratory in

the entire Caucasus region

3.8% 3.6% 3.6% 3.7%Hospitals maintenance

Capex % of revenue

20182017

101.6 79.7

52.6

6.3

9.4

9.6

11.1

3.2

111.0

89.3

63.7

9.5

-

20.0

40.0

60.0

80.0

100.0

120.0

2016 2017 2018 1Q19

Development Capex Maintenance Capex

Steadily decreasing Capex

10

Favorable effective rate dynamics

(% Share in Total)

Maturity breakdown of borrowings

12.6% 12.8%12.3% 12.0% 12.0% 11.9% 11.8% 11.8% 11.7% 11.2%

6.50% 6.75% 7.00% 7.00% 7.25% 7.25% 7.25% 7.00% 7.00% 6.50%

5%

7%

9%

11%

13%

15%

4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

GHG average cost of funding (effective) NBG rate

c.55% of our debt

is linked to NBG

Ref. rate

16.1%

28.4%55.5%

less than 1 year 1-3 years more than 3 years

Decreasing average cost of funding

11

30.3% 27.7%

12.1%13.2%

-5.8%

-10.6%-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2017 2018

Healthcare services

Pharmacy and distribution

Medical Insurance

Net working capital need

49.4% 50.6% 50.7%

47.2% 47.2%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Receivables from

government as % of

revenues from state

Room for the improvement

Improved working capital need trend in healthcare is supported by state receivables

Decreasing working capital need

12

GEL thousands, unless otherwise noted FY18 FY17Change,

Y-o-Y

EBITDA 132,274 108,148 22.3%

Net cash flows from operating activities 99,580 58,239 71.0%

EBITDA to Cash Conversion 75% 54%

Net cash used in investing activities, of which (85,347) (128,748) -33.7%

Purchase of PPE and intangibles (70,123) (93,808) -25.2%

Net cash flows from financing activities (26,917) 96,647 -127.9%

Effect of exchange rate changes(2) (537) -99.6%

Net increase (decrease) in cash and cash equivalents (12,686) 25,601 NMF

Cash at period, beginning 48,840 23,239 110.2%

Cash at period, ending 36,154 48,840 -26.0%

Bank deposits, beginning 14,768 23,876 -38.1%

Bank deposits, ending 11,807 14,768 -20.1%

Cash and bank deposits, beginning 63,608 47,115 35.0%

Cash and bank deposits, ending 47,961 63,608 -24.6%

2H18

1H18

70.6%

79.5%

Targeting +80% EBITDA to cash conversion ratio

Improved cash generation

13

Q&A

GHG | Financial performance overview

GHG | From Capex to cash flow

GHG | Capital allocation strategy

Annexes

Contents

14

Investing in new opportunities

• Strategic acquisitions of already revenue generating assets

• 20%+ marginal ROIC investments

Capital expenditures

C.GEL 15-20 million growth capex to support organic growth:

• Adding new pharmacies, outpatient centres

• Adding new services

• Software development

C.GEL 15-18 million maintenance capex:

• 3%-3.5% of revenue in hospitals

• under 1% of revenue in pharmacy and distribution

Growth oriented capital allocation strategy

15

Disposal of low ROIC assets

Low performing assets

Minority buyouts

• Pharmacy and distribution business minority share – 33% Exercisable in 2023

• HTMC hospitals minority share – 50%

• KNMC hospitals minority share – 33%

Unused assets

Transforming the asset / Disposing the asset

Growth oriented capital allocation strategy

16

Dividend policy

Deleveraging

• Adopted a new dividend policy: 20%-30% of annual profit attributable to

shareholders will be distributed as dividends

• GHG will pay its first dividends of GEL 0.053 per share on 12 July 2019, in

respect of the 2018 financial year.

• The Group targets managing the Group balance sheet, on an

ongoing basis, at an average less than 2.0 times net debt to EBITDA

from the end of 2020

Growth oriented capital allocation strategy

17

EBITDA to cash conversion ratio

Target

80%+

Cash conversion ratio improved from 54% in

2017 to 75% in 2018

Reduced Capex c.35 million

1Q19 Capex stood at GEL 9.5 million

Cost of funding 10.5%-

Cost of funding improved from 12.6% in 4Q16

to 11.2% in 1Q19

Marginal ROIC investments 20%+

ROIC improved from 10.6% in 1Q18 to 12.3%

in 1Q19

Revenue growth Double digit

Revenue CAGR comprised 41% in 2016-2018

years

Disposal of low ROIC assets

Cash generating assets acquisition

Strong free cash flow

generation

ROIC 15%+

Double digit EPS

growth

Summary Next 5-year targets

Questions?

GHG Investor DayTbilisi, Georgia | June 2019

ghg.com.ge

19

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, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals

relating to financial position and future operations and development. Although Georgia Healthcare Group PLC believes that the expectations and opinions reflected in such forward-

looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct. By their nature, these forward-looking statements

are subject to a number of known and unknown risks, uncertainties and contingencies, and actual results and events could differ materially from those currently being anticipated as

reflected in such statements. Important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, certain of which are

beyond our control, include, among other things: business integration risk; compliance risk; recruitment and retention of skilled medical practitioners risk: clinical risk; concentration

of revenue and the Universal Healthcare Programme; currency and macroeconomic; information technology and operational risk; regional tensions and political risk; and other key

factors that we have indicated could adversely affect our business and financial performance, which are contained elsewhere in this document and in our past and future filings and

reports, including the “Principal Risks and Uncertainties” included in Georgia Healthcare Group PLC's Annual Report and Accounts 2018. No part of these results constitutes, or

shall be taken to constitute, an invitation or inducement to invest in Georgia Healthcare Group PLC or any other entity, and must not be relied upon in any way in connection with any

investment decision. Georgia Healthcare Group PLC undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or

otherwise, except to the extent legally required. Nothing in this document should be construed as a profit forecast