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08 Nov 2017

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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](http://www.BGEO.com/presentations)

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