Investor Presentation Second quarter and half-year of 2019 results - PowerPoint PPT Presentation

Investor Presentation Second quarter and half-year of 2019 results Investing in the growth and quality of healthcare in Georgia August 2019 ghg.com.ge

Contents GHG | Overview GHG | Strategy Macroeconomic and industry overview Annexes 2

The only fully integrated healthcare provider in the region Our presence 3

A unique investment story supported by compelling theme GHG ’ s (1) market leading position, a unique business model with significant growth potential and highly experienced management team make it a credible investment opportunity Market leader Long-term high-growth opportunities 3 1 ✓ Low base: Georgia with low per capita expenditure on healthcare – US$324 (5) , and with only 3.7 ✓ The largest healthcare service provider in Georgia: 23.2% market share by number of referral hospitals and community clinics beds – 3,320 (2) . outpatient encounters per capita annually (6) , has the vast potential for further increase. ✓ Supported by attractive macro environment: Georgia – one of the fastest-growing countries in Eastern ✓ The largest pharmaceuticals retailer and wholesaler in Georgia: c.30% market share by sales (3) , Europe, is an open and easy emerging market to do business (7) , with real GDP growth averaged 4.5% over two million client interactions per month, with 0.8 million loyalty card members. annually in 2007-2018. c.9% of GDP is spent on healthcare and spending is growing at 11.5% compound In 2019 we became the largest medical insurer in Georgia: 31.1% market share (4) by revenue, ✓ annual growth rate (“CAGR”) between 2000 and 2014; Government spending more than doubled between 230,000 insured individuals as of June 2019. 2011 and 2018 (8) . ✓ The largest diagnostics laboratory in Georgia, as well as in the entire Caucasus region (“Mega ✓ Implying long-term, high-growth expansion that is driven by: Lab”): opened in December 2018. – Universal Healthcare Program (UHC) ✓ Institutionalising the industry: strong corporate governance; standardised processes; improving – safety and quality by progressive implementation of the Joint Commission International (“JCI”) Pick-up in polyclinics (outpatient market) benchmarked standards; own personnel training centre. – Adding new services – Developing medical tourism 2 4 Business model with cost and synergy advantages Strong management with proven track record ✓ The single largest integrated company in the Georgia healthcare ecosystem with a cost advantage ✓ Strong business management team – an increased market share by beds from under 1% in 2009 to due to its scale of operation: 23.2% currently, by building the modern infrastructure. Entered the pharmacy and distribution market in − The largest purchaser of pharmaceutical products in Georgia 2016, where currently GHG holds 30% market share based on revenues. − The next largest healthcare services competitor has only 5% market share by beds ✓ Robust corporate governance: exceptional in Georgia’s healthcare sector, as it is the only Premium ✓ Better access to professional management and high-calibre talent: Listed company in the Georgian healthcare industry (LSE: GHG LN) (9) ; 57% of our shares are owned by − Georgia Capital PLC (LSE: CGEO LN) – a UK listed holding company of a diversified group of One of the largest employers in the country: 16,173 full-time employees, including 3,645 physicians, 3,425 nurses and 2,983 pharmacists companies following completion of its demerger from BGEO Group PLC on 29 May 2018. The rest of the shares are owned by institutional investors and by our management as part of the Employee Stock ✓ Referral system and synergies with insurance and pharmacy and distribution businesses: Ownership Plan (“ESOP”). − Presence of patient pathway and referral synergies − ✓ Insurance activities provide steady revenue stream for our polyclinics and bolster hospital patient In-depth knowledge of the local market. referrals − Around 0.8 million loyal customers in our pharmacies with an upside to cross-sell Sources: (5) Frost and Sullivan analysis - data for 2016 (1) Georgia Healthcare Group established in Georgia and in UK (2) National Center for Decease Control (“NCDC”). Data as of December 2018, updated by GHG to include the changes before 30 June 2019, excluding specialty beds (6) NCDC preliminary data 2018 (7) Ranked #6 in World Bank ’ s 2018 “ Ease of Doing Business Report ”, ahead of all its neighboring countries and several EU countries. (3) Market size 2017 – Frost & Sullivan analysis 4 (4) Market share by gross revenue as of March 2019 ; Insurance State Supervision Service Agency of Georgi a (“ISSSG”) (8) Ministry of Finance, Ministry of Economy (9) GHG Group PLC successfully completed its IPO of ordinary shares on the Premium Segment of the LSE on 12 November 2015.

Extensive Geographic Coverage Broad geographic coverage and diversified healthcare services and pharmacy network covering 3/4 of Georgia’s population 3,320 hospital beds 18 hospitals 19 community clinics 15 polyclinics 279 pharmacies Mestia 1 1 1 1 1 1 1 1 Chkhorotsku Tsalenjikha +1 1 1 1 1 Martvili Zugdidi 5 Sachkhere Tkibuli 1 1 Khoni Tskaltubo Tchiatura Khobi Senaki 1 1 Samtredia +1 1 3 1 +1 Kutaisi 4 1 Abasha 16 Lanchkhuti 1 3 Poti Terjola 1 1 1 Georgia 1 3 Ozurgeti 1 9 7 1 Gori 1 2 2 1 4 Zestafoni Akhmeta Kaspi 1 Khashuri +1 Kobuleti 2 170 1 Kvareli Kareli Telavi Baghdati Mtskheta Number of Hospitals +10 +1 1 Lagodekhi Chakvi 1 1 3 Akhaltsikhe 1 2 Borjomi 1 Gurjaani +1 Adigeni Number of Community Clinics Khulo Tbilisi 1 1 1 Sagarejo 13 Shuakhevi Aspindza Batumi 1 Keda 1 Rustavi 2 + Number of Polyclinics Akhalkalaki Tsnori 1 Marneuli 2 1 9 Gardabani Bakuriani 1 Number of Pharmacies 1 1 2 Bolnisi 1 1 1 +1 1 Dmanisi 2 Regions of Presence Ninotsminda 5

GHG businesses overview Clinics Hospitals Pharmacy and Distribution 230,000 279 1 Healthcare services 19 18 15 Medical insurance Diagnostics Mega Lab Individuals insured Referral Hospitals Pharmacies Community Clinics Polyclinics Full range of diagnostics Range of private General and specialty Wholesaler and urban- Outpatient and basic Outpatient diagnostic and services, including basic insurance products hospitals offering retailer, with a inpatient services in treatment services in and complex laboratory purchased by individuals outpatient and inpatient countrywide distribution regional towns and Tbilisi and major regional tests and employers services in Tbilisi and network municipalities cities major regional cities Market share 23.2% by beds (1) (total 3,320 beds) c.30% by revenue (2) 31.1% by revenue (3) c.3% by revenue N/A EBITDA margin (4) EBITDA Margin: 4.9% EBITDA Margin: 25.5% EBITDA Margin: 18.1% EBITDA Margin: 10.5% EBITDA Margin: 4.2% GHG revenue breakdown by segments GHG EBITDA breakdown by segments GHG revenue breakdown by payment sources 1% 3% Sources (1) NCDC 2018, updated by GHG to include the changes before 30 June 2019; excluding specialty beds (2) Market size 2017 – Frost & Sullivan analysis (3) Market share as of 31 March 2019 6 (4) EBITDA margin excluding IFRS 16 effect

Hospitals business overview 18 Hospitals Referral Hospitals Revenue share in Group’s revenue Referral hospitals are located in Tbilisi and major regional cities and provide secondary or tertiary level outpatient and inpatient diagnostic, 29% surgical and treatment services. Our referral hospitals serve as hubs for patients within a given region. EBITDA share in Group’s EBITDA 51% Highlights Change, Change, 2Q19 2Q18 1H19 1H18 y-o-y % y-o-y % Revenue (GEL, millions) 74.2 67.8 9.5% 149.0 132.1 12.8% EBITDA excluding IFRS 16 (GEL, millions) 18.8 17.4 8.1% 38.0 34.5 10.1% EBITDA margin excluding IFRS 16 (%) 25.4% 25.7% -0.3 ppts 25.5% 26.1% -0.6 ppts Number of Hospital beds 2,967 2,967 - 2,967 2,967 - Bed occupancy rate (1) (%) 64.1% 61.2% 2.9 ppts 65.6% 63.1% 2.5 ppts Average length of stay (days) 5.4 5.4 - 5.4 5.5 -0.1 Average revenue per hospital bed (GEL, thousands) 100.1 91.4 9.5% 100.4 89.0 12.8% 7 (1) Adjusted to exclude the Tbilisi Referral Hospital and Regional Hospital; the calculation also excludes emergency beds

Successful ramp-up of Regional Hospital ▪ Opened in March 2018 Positioned as hospital of choice, the Regional Hospital is already in country’s top 5 largest hospitals by revenue ▪ Double-digit EBITDA margin since 1Q19 In 2Q19 the hospital revenue reached GEL 9.5 million Revenue 14.0 12.0 9.5 10.0 8.9 8.3 8.0 GEL millions 6.1 5.3 6.0 4.0 1.2 2.0 - 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 More than 60% of revenue comes from elective care services More than 41% of revenue is paid out-of-pocket - in line with our initial plan 306 9 Number of beds Number of operating rooms 38.6% (1) 1 Occupancy rate Average number of surgeries per operating theater 8 (1) Occupancy rate as for 2Q19