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
