#1GEORGIA CAPITAL Georgia Capital Investor Day 27 June 2019 | Tbilisi#2Forward looking statements 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 Capital 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: currency fluctuations, including depreciation of the Georgian Lari, and macroeconomic risk; regional instability; regulatory risk across a wide range of industries; portfolio company strategic and execution risks; investment risk and liquidity risk and other key factors that 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 and also the 'Principal Risks and Uncertainties' included in Georgia Capital PLC's Annual Report and Accounts 2018. No part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in Georgia Capital PLC or any other entity, and must not be relied upon in any way in connection with any investment decision. Georgia Capital PLC and other entities undertake 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 presentation should be construed as a profit forecast. GEORGIA CAPITAL#3Georgia macro overview Nino Vakhvakhishvili Chief Economist, Georgia Capital GEORGIA CAPITAL 3#4Today's key messages 1 Georgia has the highest governance in the region 2 GDP growth has outperformed peer countries and is expected to continue doing so 3 Georgian Lari remains stable compared to other regional currencies 4 FDI surges capital goods import and widens CA deficit itself 5 Economic linkages to EU is stronger than ever 6 We expect Georgia to obtain investment grade rating in 2024 GEORGIA CAPITAL 4#5Georgia has the highest governance in the region Investment friendly environment " Natural hub connecting Eastern European, Central Asian and Middle East countries; ■ Successful reforms in minimizing regulation, cutting corruption, reducing tax burden, opening markets and developing transport and energy infrastructure creates wide range of investment opportunities; ■ Liberty Act effective from 2014 ensures sound fiscal policy: public expenditure capped at 30% of GDP, fiscal deficit capped at 3% of GDP and public debt capped at 60% of GDP; Europe Central Asla Middle East Africa Asia Australia Population: 3.7mln; GDP per capita: US$ 4,346; Literacy: 100%; 4th place in Registering Property World Bank 2nd place in Starting 2nd place in Protecting Minority Interests 6th place in Ease of Doing Business World Bank a Business World Bank World Bank GEORGIA CAPITAL 5th place in Open Budget Index International Budget Partnership 16th place in Economic Freedom Index Heritage Foundation 25th place in Business Bribery Risk TRACE International 5#6Georgia has the highest governance in the region Open governance policy leads country to outperform Governance effectiveness, 2017 WGI Range: -2.5 +2.5 Georgia Turkey Kazakhstan Russia Armenia Azerbaijan Romania Belarus Ukraine 0.6 0.1 0.0 -0.1 -0.1 -0.2 -0.2 -0.3 -0.5 -0.6 Uzbekistan Total tax and contribution rate (% of profit) Control of corruption, 2017 WGI Range: -2.5 +2.5 Georgia Romania Turkey 0.7 0.0 -0.2 Belarus -0.3 Armenia -0.6 Ukraine -0.8 Kazakhstan -0.8 Azerbaijan -0.9 Russia -0.9 Uzbekistan -1.2 60 50 40 40 53.3 46.3 40.8 40.9 41.7 40 32.1 29.4 30 18.5 20 9.9 10 0 GEORGIA Georgia Armenia Kazakhstan Uzbekistan Romania Azerbaijan Turkey Ukraine Russia CAPITAL Belarus Data source: World Bank 6#7Georgia has the highest governance in the region Public debt remains at the well managed level Public debt as % of GDP is capped at 60% 80% 60% 40% 20% 0% Breakdown of public debt External public debt to GDP, % - Total public debt to GDP, % 80% Mostly concessional terms with 2.2% weighted average interest rate 60% 40% Multilateral 59% Domestic 19% External 81% 20% 0% Increasing share of capital expenditure highlights sound fiscal policy consolidated budget expenditure + increase in nonfinancial asset is capped at 30% of GDP 100% Bilateral 14% Eurobond 7% 80% 78.5% 60% 80.5% 75.6% 75.6% 74.8% 73.4% 70.9% 71.0% 40% 20% 24.4% 24.4% 25.2% 26.6% 29.1% 29.0% 21.5% 19.5% 0% 2015 2016 GEORGIA 2017 Capital Expenditures and net lending 2018E 2019F 2020F 2021F 2022F -->Current Expenditures CAPITAL Data source: Ministry of Finance 7#8-3.0 -8.0 12.0 GDP growth has outperformed peer countries' average and is expected to continue doing so Solid growth, softer recession, better recovery GDP growth rate, IMF Key sectors contributing to the growth 2.0 7.0 2000 2001 2002 2003 Long-run growth, % 5.2 2010-2018 2019-2024 12.0 Georgia CIS 4.8% 5.2% Trade 1.0 ppt 2.4% 2.3% Eastern Europe 2.2% 2.2% ☑ Manufacturing 0.7 ppt 7.0 Real estate activities 0.5 ppt 20 Construction 0.5 ppt 2.0 Financial intermediation 0.4 ppt -3.0 Transport 0.4 ppt Public administration 0.4 ppt -8.0 Health and social work 0.3 ppt 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Communication 0.3 ppt GEORGIA CAPITAL Eastern Europe Commonwealth of Independent States -Georgia Data sources: IMF, Geostat 8#9GDP growth has outperformed peer countries' average and is expected to continue doing so Structural reforms enhance growth GDP per capita, current, US$, 2018, IMF Uzbekistan Ukraine Armenia 1,263 2,963 4,149 Georgia 4,400 Azerbaijan 4,569 Belarus Kazakhstan Turkey Russia Romania GEORGIA CAPITAL 6,306 9,237 9,346 11,327 GDP growth rate, IMF ■GDP growth y/y, %, +3y average ■GDP growth y/y, %, -5y average 5.5% Uzbekistan Georgia Armenia 3.2% Kazakhstan 3.0% Romania 2.9% Ukraine 2.9% Azerbaijan 2.0% Belarus Russia 1.7% 4.9% 4.5% 1.0% Turkey 12,285 -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Data source: IMF 9#10Georgian lari remains stable compared to other regional currencies Historically low inflation enhances credibility Annual inflations, IMF % Annual inflations: country comparison 25 20 20 15 10 10 -5 5 0 2000 2001 2002 2003 2004 2005 -Georgia GEORGIA CAPITAL 2006 2007 2008 2009 2010 Eastern Europe Inflation, +3y average 2000-2018 2019-2024 Azerbaijan Georgia 5.0% 2.9% CIS 11.0% 4.7% Armenia Eastern Europe 8.5% 3.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Commonwealth of Independent States Georgia Romania Russia Belarus Kazakhstan Ukraine Uzbekistan Turkey Inflation, -3y average 00 0.0 5.0 10.0 15.0 20.0 Data sources: IMF 10#11% 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 GEORGIA CAPITAL Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 % 20.0 15.0 10.0 5.0 0.0 -5.0 Jan-08 Apr-09 Georgian lari remains stable compared to other regional currencies Monetary policy focuses on price stability Average inflation remains close to target Jul-10 Neutral monetary stance is expected in 2019 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Dec-10 May-11 Oct-11 Mar-12 Aug-12 Headline Inflation Inflation Target 3% inflation target from 2018 Jan-13 Jan-13 May-13 Jun-13 Sep-13 Nov-13 Jan-14 May-14 Apr-14 Sep-14 Sep-14 Jan-15 Feb-15 May-15 Jul-15 Sep-15 Dec-15 Jan-16 May-16 May-16 Sep-16 Oct-16 Jan-17 Mar-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Aug-17 Jan-18 Jun-18 Nov-18 Jan-19 May-19 Data sources: Geostat, NBG 11 6.50 Apr-19 4.7#121300 1200 1100 1000 900 800 700 600 105 125 145 REER (Jan 2003=100) Georgian lari remains stable compared to other regional currencies Floating exchange rate - policy priority REER vs NEER NEER (Jan 2003=100) Linear (REER (Jan 2003=100)) Long term productivity +3% y/y 85 85 Jan-03 Feb-04 Mar-05 Apr-06 May-07 Jun-08 Jul-09 Aug-10 Sep-11 Oct-12 Nov-13 Dec-14 Jan-16 Feb-17 Mar-18 Apr-19 Bloomberg Dollar Spot Index vs GEL/USD index +Dec-04 GEORGIA CAPITAL Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Bloomberg Dollar Index, LHS (2004=1000) Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 Apr-12 Aug-12 GEL/USD index (2004=1000) Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 1300 1200 1100 1000 900 800 700 600 Data sources: NBG, Bloomberg 12 105 125 145#13400 350 Georgian lari remains stable compared to other regional currencies Sound monetary policy ensures exchange rate stability Bilateral ex rates, indices, Dec-2013 = 100 300 250 200 150 100 50 0 Dec-13 May-14 Oct-14 NBG monthly net interventions US$ mln 400 300 200 100 100 0 -100 -200 -300 GEORGIA CAPITAL 388.6 287 2 USD/RUB USD/GEL USD/TRY USD/EUR Mar-15 Aug-15 Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 -130 -165 -198 2014 2015 2016 2017 -362.5 2018 1H2019 Feb-18 Jul-18 Dec-18 May-19 Official reserve assets, US$ mln US$ mln Official reserve assets at record high US$ 3.7bln 3800 3600 3400 3200 3000 2800 2600 2400 2200 US$ purchase US$ sales Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct- Jan-1 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Data sources: NBG, Bloomberg 13 293 197 160 122#14FDI surges capital goods import and widens CA deficit itself Strategic location coupled with investment friendly environment attracts FDI FDI US$ mln ■Reinvestment of Earnings Key sectors attracting FDI (shares in total, 2007-2018, average) Transport and communication 21.5% Equity+Debt Instruments 1,818 1,894 1,666 1,566 1,232 1,021 1,237 1,495 1,508 1,232 Manufacturing and mining 16.4% 674 744 658 559 276 323 334 158 Energy 2013 2014 2015 2016 2017 2018 FDI vs capital goods import 20% 15% 10% 5% 0% GEORGIA CAPITAL FDI as a % of GDP 12.7% Financial 12.0% Capital goods import as a % of GDP 20% 15% Construction 9.5% 10% 2010 2011 2016 2017 2018 5% Real estate 0% 9.5% Data sources: Geostat 14#15-40% GEORGIA CAPITAL -30% 2000 2001 -20% 0% FDI surges capital goods import and widens CA deficit itself Current Account deficit driven by investment-saving gap CA deficit vs FDI 30% -10% -5.8% -6.1% -6.5% -7.0% -9.7% 2002 2003 2004 -11.1% 30% Goods, net Services, net Investment income, net I Current transfers, net Current account FDI 20% 17.2% 20% 15.1% 12.3% 11.8% 12.6% 11.0% 10.9% 9.6% 8.4% 10% 7.1% 4.3% 4.7% 3.4% 7.3% 7.8% 7.6% 6.2% 6.5% 6.3% 10% 2005 2006 2007 -15.2% -19.8% -22.0% 2008 2009 2010 2011 -10.6% -10.3% -12.8% -11.9% 2012 2013 2014 2015 -5.9% -10% -7.7% -8.8% -10.8% -12.6% -13.1% 2016 2017 2018 Data sources: NBG, Geostat 15 -40% -30% -20% 0%#16Economic linkages to EU is stronger than ever Export markets diversification reduces country specific risks Export of goods US$ 0.2bln, 1995 Increased by 22 times Export of goods US$ 3.4bln, 2018 United States China 0% 0% Ukraine 4% EU countries 9% Azerbaijan 9% Other 13% Russia 31% United States 5% Armenia 12% Turkey 22% Ukraine 5% Other 19% EU countries 22% China 6% Turkey 7% Armenia 8% Russia 13% Azerbaijan 15% о Access to 2.8bln customers: DCFTA with EU; FTA with China, Hong Kong, CIS and Turkey; GSP with USA, Canada, Japan, Norway and Switzerland; FTA with India and Israel under consideration. о GEORGIA CAPITAL Data source: Geostat 16#17Economic linkages to EU is stronger than ever Tourism sector supports FX inflows Number of overnight visitors 800 2015 2016 2017 2018 2019 700 5M2019 growth +7.9% y/y 600 500 thousands 425 349 400 328 306 300 248 200 100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Temporary air travel ban impact is manageable GEORGIA CAPITAL Georgian Economy Key highlights for Jan-May 2019 ○ Tourism revenue from EU increased by 24% y/y; ○ Total tourism revenue excluding Iran and Turkey increased by 25% y/y; ○ Air passengers increased by 20.3% y/y with 27.3% share in total; ○ Total Tourism revenue increased by 10% y/y; Tourism share, 7.6% Russia share, 2% Temporary air travel ban, 0.8% Data sources: GNTA, NBG 17#18Economic linkages to EU is stronger than ever Diversified source of capital EU share in FX inflows - 24% $ FX inflows US$ 9.4bln Export Tourism revenues Remittances US$ 3.4bln US$ 1.6bln US$ 3.2bln ☑ Total FX inflows - 58 % of GDP, 2018 EU-14% of GDP Russia - 11% of GDP Export ☑ - FDI GEORGIA CAPITAL - Tourism revenues - Remittances Other -33% of GDP FDI US$ 1.2bln Data sources: GNTA, NBG, Geostat 18#19We expect Georgia to obtain investment grade rating in 2024 Current grade GEORGIA CAPITAL Rating Agency Rating Outlook Affirmed/upgraded MOODY'S Ba2 Stable September 2018 S&P Global BB- Positive Fitch Ratings BB Stable April 2019 February 2019 Major targets Current actions ■ FTAs; Pension reform; External imbalances Banking sector risk- dollarization Capital market developments; Increasing FX reserves; ■ Structural reforms enhancing long-run growth; ■ De-dollarization program; Macro-prudential measures; Improving financial literacy; Responsible lending; Expected investment grade rating in 2024 19#20Key takeaways 1 Georgia has the highest governance in the region 2 GDP growth has outperformed peer countries and is expected to continue doing so 3 Georgian Lari remains stable compared to other regional currencies 4 FDI surges capital goods import and widens CA deficit itself 5 Economic linkages to EU is stronger than ever 6 We expect Georgia to obtain investment grade rating in 2024 GEORGIA CAPITAL 20#21GEORGIA CAPITAL Questions?