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BGEO hosts Investor Day in Tbilisi

08 Nov 2017

BGEO Group PLC (“BGEO” or the “Group”) announces that the Group is hosting an Investor Day for analysts and investors in Tbilisi on Thursday 9 November 2017.

As part of the investor presentations BGEO will update investors on its strategic goals and priorities as summarised below:


Within the banking business
:

  • Over the next few years, Bank of Georgia (the “Bank”) will continue its successful client centric, multi-brand strategy with the product per client ratio in the mass retail bank targeted to increase to 3.0 products, from a current 1.8  products
  • The Bank will continue to strengthen its market leading digital offering, and introduce data mining solutions within the Retail Bank
  • In the ExpressBankingsegment,theBankwillaimtodoublethenumberoftransactionsoverthe next2-3 years
  • InSoloBanking,theBankwilltarget toincreasethe numberofSoloclientsto40,000(currently 28,492)
  • The bank will aim to develop a significant regional private banking franchise
  • In addition, over the medium-to-longterm:

       - The Bank will aim to maintain its return on average equity in excess of 20% per annum

       - The net interest margin is expected to be in excess of 7.0% (currently 7.3%)

       - The Bank aims to manage to a cost/income ratio of around 35% (currently 38%)

       - The Bank will continue to enhance its already prudent risk management practice, and will aim to maintain its Non-Performing Loans coverage ratio in the range of 80-120% (currently 93.6%)

       - Through the long-term economic cycle, the Bank's cost of risk ratio is expected to remain at c.2.0% per annum

  • The Bank will aim to maintain a dividend payout in the range of 25%-40% of earnings


Within the Investment Businesses:

  • The Investment Business is a Georgia focused diversified investment company targeting a minimum IRR of 25%.  The business has a highly disciplined approach to unlocking value through opportunistic investments – acquiring early stage, developing businesses or establishing greenfield businesses, whilst establishing clear exit paths through IPO or trade sale over a 5-10 year period
  • The investment business currently manages a portfolio of the following 5 investments in Georgian businesses:


Georgia Healthcare Group (GHG) (57% stake)

The strategy of GHG is to:

       - Target 30%+ market share in Hospitals (currently 24%)

       - Target c.15%+ market share in Polyclinics (currently 2%)

       - Maintain the largest market share as a pharmaceuticals retailer and wholesaler in Georgia (currently 29%)

       - Exceed 30% market share in health insurance (currently 30%)


Georgia Global Utilities (GGU) (100% stake)

GGU is targeting to reach combined utility and energy EBITDA in excess of GEL 100 million in 2019. Within its segments, GGU’s strategy is as follows:


Utility business

       - Substantially reduce water losses -  currently 70% technical and commercial losses

       - Invest GEL 215 million in infrastructure rehabilitation projects


Energy Strategy

       - Construction of Hydro, Wind and Solar generation plants


Real Estate business (m2) (100% stake).

The strategy of m2 Real Estate is to focus on the asset light strategy as described below, while also entering hotel development business:

       - Unlock land value by developing housing projects

       - Developing third party land – franchise m2 brand name

       - Grow yielding asset portfolio through developing hotels

       - Generate fee income from third party construction projects


P&C Insurance business (Aldagi) (100% stake).

Aldagi is aiming to grow its net income to GEL 50 million in 5 years


Beverage business (Teliani) (72% stake). 

  • The strategy of  Teliani Valley is to:

       - Grow in line with wine market by stimulating exports, currently 35% market share, while exporting wine to at least 13 countries

       - Enhance distribution product portfolio and become the leading FMCG distributor in Georgia

       - Achieve 30% market share in beer sales in Georgia

       - Export beer and lemonade products launched in 2017

 

A full set of the presentation slides can be viewed on the BGEO website at www.BGEO.com/presentations

 

BGEO hosts Investor Day in Tbilisi