Earnings call transcript: Georgia Capital Q3 2025 highlights growth and strategic acquisitions

Georgia Capital PLC (CGEO) reported strong financial results for the third quarter of 2025, showcasing significant growth in key areas such as net asset value (NAV) per share and dividends. The company also announced strategic acquisitions and expansions across its healthcare and pharmacy sectors. With a market capitalization of $1.05 billion and an impressive year-to-date return of 95.83%, Georgia Capital’s stock trades near its 52-week high. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculation, suggesting potential upside for investors.

Key Takeaways

• NAV per share increased by nearly 8% in Q3.
• Dividends grew by 30% for the quarter and the first nine months.
• Pro forma free cash flow rose from $48 million to $63 million.
• The company acquired the GORMED healthcare network, expanding its regional presence.
• Georgia Capital reduced its debt to $50 million, reflecting a strong financial position.

Company Performance

Georgia Capital demonstrated robust performance in Q3 2025, driven by strategic investments and operational efficiencies. The company’s NAV per share grew by nearly 8%, reflecting its strong asset management and investment strategies. With an excellent Financial Health Score of 3.76 from InvestingPro and an impressive return on assets of 40.63%, the company’s operational excellence is evident. The acquisition of the GORMED healthcare network, which includes three clinics in central Georgia, marks a significant step in expanding its healthcare footprint.

Financial Highlights

• Revenue: Not specified in the earnings call summary.
• NAV per share: Increased by nearly 8% in Q3.
• Dividends: Grew by 30% in Q3 and the first nine months.
• Pro forma free cash flow: Increased from $48 million to $63 million.
• Share buyback: 15.2 million shares repurchased for $221 million.

Outlook & Guidance

Georgia Capital expects a strong performance in Q4, with continued growth across its business segments. Trading at an attractive P/E ratio of 2.19 and showing strong momentum with a 127% return over the past year, the company continues to demonstrate value creation potential. The company plans to announce its 2026 dividend outlook with the Q4 results, alongside potential new capital return programs. A continued focus on share buybacks is anticipated, aligning with the company’s disciplined capital allocation strategy. For detailed analysis and additional insights, including 8 key ProTips and comprehensive financial metrics, visit InvestingPro.

Executive Commentary

Irakli Gilauri, CEO of Georgia Capital, emphasized the company’s focus on reducing debt, stating, "Our goal is to be debt-free at the GCAP level." He also highlighted the simplicity and discipline in their capital allocation strategy, which has contributed to the company’s strong financial performance.

Risks and Challenges

• Market Saturation: The fragmented insurance market poses challenges in maintaining market share.
• Regulatory Environment: Changes in regulations, such as PIFIC restrictions, could impact operations.
• Economic Conditions: While the Georgian economy is growing at 7%, any downturn could affect consumer spending and company revenues.

Georgia Capital’s Q3 2025 earnings call highlights its strong financial performance and strategic initiatives, positioning the company for continued growth. However, potential risks and market challenges remain factors to monitor in the coming quarters.

Full transcript - Georgia Capital PLC (CGEO) Q3 2025:

Irakli Gilauri, CEO, Georgia Capital: Q3. We’ll talk about the performance of Q3 in IMAS. Then we will have our portfolio companies’ CEOs talking about their respective large portfolio, large company performance. As you saw, the numbers are staggering. It’s a really top performance our CEOs are showing, and it will be good to discuss with them outlook as well. Giorgi, our CFO, will talk about the portfolio company valuation, liquidity, and dividend outlook. In the end, I’ll do the wrap-up followed by the Q&A session. Let me start with the highlights. NAV per share in the quarter grew nearly 8%. Excellent performance was posted by Lion Finance Group share price performance. Most importantly, our private large portfolio companies showed excellent operating performance, and they continue to deliver staggering results. 30%, nearly 30% dividend growth in Q3, and it’s been a nine-month performance being also 30-plus.

That’s kind of one of the world’s large portfolio companies. We, and our goal is to be debt-free at GCAP level. $50 million is really a very small debt for us, but we still want to do debt-free holdco. In terms of the SEC ratio, we improved to 5.4%. That’s another good development. We continue to buy back our shares. 1.4 million shares were bought back in Q3. In total, 15.2 million shares we bought for $221 million. Looking at the average price, what we have bought, the 15.2 million shares is really a big value creation we created by the buybacks. That’s another reason to like or love buybacks. We did, our healthcare group did the acquisition, bolt-on acquisition, small one, but we like the pricing and we like the momentum our management is delivering. They have been delivering excellent performance, operating performance.

I think it’s a great platform for us to invest more money to grow our business even further. I think that was a good vision of what our management has executed. We also entered the MSCI index, GCAP index, which played a positive role in the share price of our shares in general. Let me give you an overlook of the progress of the GEL 700 million capital return program, which we announced in August this year. Nearly half of this program is done. $100 million is the paydown of the debt, and out of $50 million, nearly $26 million we already executed in buybacks, and we continue to execute on the remaining $24 million. Now, you see on the next slide the progress, and you see that after delivering our $50 million buyback, only $300 million will be left to return to the shareholders.

It’s kind of a, we are moving in a very lightning progress on this capital return of $700 million as previously reported a year and a half earlier. It seems like we’ll be delivering this capital return program earlier than we anticipated in the beginning. I want to just highlight this. Giorgi, our CFO, put this slide together, and I like this slide because it kind of reflects on the ownership of GCAP shares. By holding the 100 GCAP shares, sorry, ownership of the Bank of Georgia shares through GCAP. If you hold the 100% GCAP shares, you used to hold 20.4 Bank of Georgia shares in December 2020, for instance. That has changed over time, and now it’s actually you hold more, 21.8 shares, which reflects our buybacks, basically. In reality, we did sell down a little bit of Bank of Georgia because of the PIFIC reasons.

At the same time, by buying back GCAP shares, we actually did not really change much the ownership of the Bank of Georgia shares through GCAP. That kind of reflects that our shareholders have a good exposure on Bank of Georgia performance. I want to update now on the capital market to our portfolio on market marketing has been generating in the local market, and we are more and more relying on the exits or capital raising, that capital raising on the local market. We like this fact very much. For instance, the GEL 350 million of debt in lari was raised by our healthcare group at 3.75% margin. That’s a kind of a five-year maturity, and the funds are our healthcare, we find out what the healthcare business did.

On the other hand, our hospitality business issued a very small bond on one of our hotels, which we sold most of our hotels, but we have one hotel remaining, a Gudauri Ski Resort. We think it’s a good asset, and we think we want to sell it at a good price. We are not in a rush here. We decided to raise a $10 million bond. It’s a small bond, but it actually reflects well that even small businesses can access the capital markets locally. This is an acquisition I earlier talked about in the healthcare business, a bolt-on acquisition. We bought it for less than four times EBITDA, forward-looking EBITDA, this business. We think that integration and synergies, I mean, I think that the four times is a safe way to assume that we can achieve the four times for next year.

The economy continues to perform extremely well, in every sense. One thing which needs to be highlighted is the National Bank reserves, which have been accumulating pretty fast. In the past three quarters, GEL 1.5 billion unprecedented interventions, and the National Bank bought the $1.5 billion of reserves, and now it’s record high at $5.4 billion international reserves. In terms of the GDP growth, you see a 7% GDP growth. Years of higher growth than the IMF does. Let me talk about the NAV development, NAV per share development. A 7.9% increase was mainly driven by Bank of Georgia share price increase and the operating performance of our large portfolio companies. The good thing is that we have not changed anything on the multiple side. We had a 4.6 percentage point gain on the Bank of Georgia and 2.8 percentage point gain in operating performance of all our large companies.

We had a buyback at 1.2 percentage point positive impact. Emerging in other portfolio companies also contributed positively, nearly 0.5%. Operating performance was minus 0.2, and the other was 0.9, 0.9 percentage point. This mainly reflects the litigation case, legacy litigation case, what we had in the past, which has been, now it’s done and over. In terms of on slide 12, you see an NAV growth over time. Past three years, we have achieved the 33%. Five years, 29% CAC, and 18% CAC we have achieved since the GCAP inception. 18% needs to be improved for sure, but we are very happy with 3 and 5 percent NAV CAC growth for sure. In terms of the free cash flow development on this slide 13, you see that after the paydown of debt, our pro forma free cash flow increased from $48 million in 2024 to $63 million.

The growth is even more attractive per share basis because we were buying back the shares meanwhile. Per share free cash flow has increased by 45.6%. It is another important. We are not tiring of talking about the buybacks. We have bought back 50 million shares plus, which is $221 million. Now we are at 35.4 million shares, all-time low number of shares. We are really fighting the share count. We like the share count to decrease the discount anywhere we are. Let me performance. This, revenue is up. It’s slide 16. Revenue is up 13.5% in Q3. Nine months is 16.2% increase. Q3 EBITDA 29.5% increase, and nine months 34%. This continues the high growth momentum. We are happy that our management of portfolio companies are delivering, and I will talk about why they are so good later on.

Here you see the cash flow developments, same growth, high growth here. In the nine months, we have a 20.7% free cash flow growth. In Q3, we had a 3.7%, which, in Q4, we will most likely see a way higher growth in cash flow as we will have more cash coming in pre-Christmas. You have aggregate cash balances also growing of our portfolio companies that stands at GEL 250 million. Now, on NCC development, as I said, we have 5.4% NCC, which has been decreased nearly three times over the year. One thing which we need to highlight is that our contingency liquidity buffer of $50 million will be decreased due to this litigation case being over. Also, the debt levels in Georgia Capital have decreased, and our portfolio companies are in a very healthy leverage ratio.

We do not need to have such a huge liquidity buffer of $50 million. In Q4, we will substantially. NCC ratio development here, you see that’s coming down, and we were at a record 42.5%, and we are at 5.4% after that. It’s a nice development. It’s along with our announced strategy of delivering the Georgia Capital. Now, let me hand over to the two Retail Pharmacy CEOs, who will talk about the performance of our retail pharmacy business. Then we will have the Insurance Company CEO, Giorgi Paratashvili, talking about insurance, and then Irakli Gilauri, CEO of Healthcare Business, who will talk about the developments in healthcare business.

Tornike, CEO of Retail Pharmacy Business, Georgia Capital: Hello everyone. I’m pleased to share a brief business overview and update on the performance of our retail pharmacy business for the third quarter and nine months of 2025. Let me remind that our business consists of three main directions: retail, wholesale business, and international operations. Retail business is our core, generating around 75% of our revenue. Wholesale business is our biggest focus for growth. In international, we are, let’s say, in a startup mode, believing to expand farther in the region. We have a unique category structure in retail, having around 50% share of non-medication versus med category. Non-med category can be described by higher margins and no price regulation risks. Based on 2023 figures, we continue to be the largest player in the retail pharmacy market in Georgia with around 36% market share in organized trade.

We are operating under two well-positioned retail brands, GPC, which targets the high-end segment, and Pharma Depot, serving the mass market. We also operate two franchise brands, The Body Shop and Alana Fleur Optics, and are active in Armenia and in Azerbaijan as well. We expanded our network by eight new pharmacies added in Q3, including one additional in Armenia, most of them in cost-efficient formats that require limited capital. As of September 2025, we operate 438 pharmacies. In terms of operating performance, our retail revenue grew by 6.1% in nine months and 7.5% in quarter three, respectively, supported by same-store growth of 5.3% and 6.6% in nine months and quarter three. This was despite the exit from our textile retail business, which slightly affected the headline growth. We are encouraged by this trend as it reflects healthy consumer demand and solid in-store execution.

As in Q2, we continue strong growth on the wholesale side. Revenue grew by 33% as we continue to deliver on our strategic focus to grow in wholesale. It was achieved across all wholesale channels, mainly driven by increased product availability. We also increased the average bill size by around 10% year over year, and gross profit margins improved to record high 33.4% in quarter three, driven by a better sales mix and improved supplier terms. On the next slide, let me share how it’s translated in financial performance. EBITDA grew by 30.6% in nine months, with record high $73.7 million. In quarter three alone, EBITDA grew by 18%. Cash conversion from EBITDA is back on 90%+ threshold for nine months due to strong quarter three performance. From a balance sheet standpoint, we remain cautious and disciplined.

Our adjusted net debt to LTM EBITDA continued to improve, reaching 1.3 times, which is below our target ceiling of 1.5 times. We also distributed GEL 10 million in dividends during the quarter. In addition, we plan to distribute GEL 15 million dividends in quarter four. In total, the dividend for the year will be GEL 35 million, reflecting confidence in our cash flow and overall financial health. On the next and last slide, let me summarize. We have maintained solid revenue momentum, especially with same-store sales growth and strong wholesale results. Profitability has improved, supported by gross margin improvement and prudent cost discipline. Leverage remains at a healthy level, giving us flexibility for future investments and shareholder returns. Thank you again for your time. I am happy to take your questions during the Q&A session. Now, let me hand over to Giorgi Paratashvili.

Irakli Gilauri, CEO, Georgia Capital: Thank you, Tornike. Hello, ladies and gentlemen. I will overview the insurance business today. Our insurance business comprises two main business lines that we divide. It’s property and casualty that is run under the brand name of Aldagi, and we run another line of business, the main line of business, medical insurance under the mass brand of Imedi L and the medium to upper-influent brand under the name of Ardi. I would like to underline that Q3 was a record high, and I would say the record high during all its existence of the insurance business in GCAP, and I will dive you in both business lines separately. To go to the insurance revenues, our insurance revenue grew by 9%, and nine months over nine months, the growth was almost 30%. Our pre-tax profit grew even more by 22%, and nine months over nine months grew by 23%.

Just a quick update on the key operating data. We have a growth of 11% in net premium written, while our P&C business grew by 14%, while the medical grew by 8%. Going forward into the separate slides and separate business lines, at this point, there are 19 insurance companies operating on the territory of Georgia, and Aldagi, our P&C business line, business provider, is the undisputed leader with 35% of market share, with the closest competitive company with 23%. There’s quite a big difference between the second player and Aldagi. We had an amazing growth in insurance revenues of 16% Q over Q and almost more than 20% nine months over nine months. The main expansion was driven by the retail motor portfolio as retail remains a key strategic focus on our agenda together with the credit life insurance.

The good point is that our net profits, our pre-tax profits grew even more than the revenues that underline our healthy portfolios and the disciplined underwriting. The pre-tax profit grew by 23%, and that translates into the record high ROEs of more than 40%. That is a historic high that we never envisaged. Key operating data, net premiums written grew by 14%, as I have already mentioned. The good point is that the combined ratios were improved by almost 1.1 points, driving it down, dragging it down to 83%. Individual insurance grew by 14%, while the insurance written policy grew by 13%. The renewal rate stays still very high and promising at 75%.

The good point to underline is the good accomplishment that I would like to underline is the combined ratio that is mainly driven by the improved loss ratios in the corporate motor segment that was announced last year that will be eliminating loss-making clients and dragging down the combined ratio. The moves that we put into life are effective, and we are really happy with the management and the actions that they took, they put into life. Our combined ratios are in our target of 85% to them in the medium term. Going to the health insurance, we had also another record high health insurance quarter in terms of the profitabilities, even though the revenue in Q3 was minor because of elimination of a few big loss-making clients and a few state tenders that we didn’t participate in.

Going forward, we think that Q4 will be we will return to double-digit growth. Nine months over nine months was about 40% growth in health insurance. The actions that we put on in life mainly reflect the loss ratio improvement by 1.3%. We had an 18% record high increase also in a single quarter of 18% for the single policy issued. Pre-tax profit grew at 15%. That translates into record high, also the record high ROEs of about 38%. Key operating metrics, net premiums written grew by 8%. Combined ratios went down, and that is I’m happy that it is because of the eliminating loss-making clients in Q3 and not participating in a few big state tenders, putting down our combined ratio by one point. Individual insurers are a bit down because of not participating in the state tenders, while the corporate segment grew by 17%.

I mean, the direct insurance. The renewal rate still remains very strong at 80%, which is considered very high and very strong in the health insurance. Both brands are doing very well. Ardi has launched our higher affluent brand, has launched the new application, the new digital solutions, and Imedi L also has launched the new updates for the web. That was translated into 73% of the digital bookings, putting down, bringing down the costs and affecting our combined ratio. That is in line with our digitalization of all brands, all three brands in total. Going forward, the medical insurance still also remains the leader on the market. We hold about 32% of the market share. That is in line and the appetite of 30% to 35% of the targeted market.

Going forward, and a few words to remember about Q3, we had an outstanding performance in both P&C and medical insurance, resulting in record high profits and all-time high ROEs of 40%, more than 40% in P&C and almost 40% in health insurance, with an exceptional result in motor insurance, especially the corporate motor, that underlines again the healthy underwriting and the healthy portfolios in the middle of our operating principle. New brand identity was launched for the transfer, and transformation was done in both brands of health insurance, Imedi L and Ardi, and the new digital solutions were also launched in both health insurance lines. We paid almost $2 million in Q3, translating into $15.6 million and more cash to come to Georgia Capital in Q4. The expectations are very good and very promising.

We are hoping for even better Q4 in both P&C and health insurance throughout all three insurance companies in revenues and in profits. That was a short and short about the health and P&C business, insurance business. Let’s wait for the Q4. I do hope that it will be much better. Thank you. I’ll pass the floor to Irakli Goghia, who will underline our healthcare business.

Hello everyone. I will walk you through the healthcare services business latest results. I’m very pleased to report another strong quarter. We continued our focus on the outpatient direction by attracting new doctors and diversifying our services. We also optimized our revenue mix and improved patient retention. As a result, our outpatient revenue grew by 28% year over year in the third quarter, and share of outpatient revenues grew further by 2.4 percentage points from 40.8% to 43.2%. We launched new services in several hospitals and clinics, addressing previously underserved medical needs. This includes the introduction of arthroscopy, sports medicine, gynecology, and interventional cardiology in several hospitals. Our initiatives helped us to deliver 19, 20% revenue growth with our EBITDA growing by 46% in Q3 and EBITDA margin surpassing 19% as well.

Our last 12 months EBITDA reached GEL 89 million, up from GEL 58 million from September 2024 result, which led to net debt to EBITDA decrease from 5 times to 3.8 times. On the next slide, in our hospitals business in the third quarter 2025, we delivered revenue growth of 19% and EBITDA growth of 44%. Operating cash flows grew by 39% during nine months of 2025, and we think that Q4 cash conversion will be very decent. Occupancy rates increased by 8.5 percentage points during the same period, while the average length of stay decreased by 0.3 days as a result of our efficiency-focused initiatives. On the next slide, in the polyclinics business, the number of admissions increased by 8%, while the number of tests performed in our diagnostics business increased by 15%. This resulted in revenue growth of 26% and EBITDA growth of 55%.

In diagnostics business, we still operate at below 50% capacity and intend to increase our utilization significantly going forward. On the next slide, we signed a binding agreement to acquire GORMED, a regional healthcare network with three clinics in central Georgia. The transaction is subject to approval by the competition agency. GORMED covers three cities with a combined population of circa 300,000 people with 80,000 registered patients. Most notably, we entered Gori, Georgia’s fifth largest city. Through this acquisition, we are strengthening our regional network in Southern and Central Georgia, enhancing our patient referrals and optimizing staff utilization across seven interconnected clinics. In two cities, GORMED was our only competitor, pressuring our margins, and the acquisition will enable us to merge the two hospitals and extract synergies and increase effectiveness. The acquisition offers a 2026 EBITDA multiple of under 4 times.

We expect an improvement of 0.6 percentage points in annualized ROIC on the healthcare services business level, demonstrating our continued focus on shareholder value creation. That concludes my part of the presentation, and I will hand over to Giorgi Alpaidze.

Giorgi Alpaidze, CFO, Georgia Capital: Thank you, Irakli. Hello everyone. I will briefly take you through what these excellent results mean for GCAP’s balance sheet and our NAV statement. Starting with the overview, we updated the valuations based on the internal valuation mechanisms. This is in line with what our independent third-party valuation company, Kroll, does every six months. This time we looked at the DCFs. We looked at how the projections that were set forth at the six-month period, the results were actually delivered in the third quarter. Overwhelmingly, all our large portfolio companies actually delivered higher EBITDA, higher revenues than what we were projecting at the end of June. This has helped us create value across the board. Briefly, in the overall overview, we did have a little bit of sales in the Lion Finance Group shares, but still it continues to be the largest investment that we have on our NAV.

It was 47% of our portfolio. Within the private portfolio investments, retail pharmacy was the largest business, followed by healthcare services and the insurance business. On the next slide, you will see that the multiple development in the third quarter was pretty much in line with the multiples at the end of the second quarter, with only a small minor increase in insurance, but it was broadly in line. On the next slide, you will see how these multiples affected the portfolio value development. Overall, the portfolio value increased by GEL 100 million. However, it was a result of many movements. In the Lion Finance Group, you see this decrease, but that was because of the dividends that we received in the quarter, which was actually a combination of the full-year dividends of 2024, plus the interim dividends where the ex-dividend date actually fell in September.

We had to record those dividends in the third quarter as well. Also, the sales where we sold about 600,000 shares of Lion Finance Group resulted in the decrease of this stake. Overall, we recorded gains in the Lion Finance Group. In the private portfolio, the excellent growth meant that the retail pharmacy business contributed about GEL 51 million to our P&L. That includes the value creation within the business, but also the dividends that they paid us. That was followed by healthcare services business at GEL 40 million and insurance at GEL 36 million. Now, on the next slide, you will see how these value creations translated into the new portfolio values or the latest portfolio valuations for each business.

Within retail pharmacy, the EBITDA growth that Tornike spoke about was GEL 42 million P&L impact for GCAP that was driven by EBITDA and additional GEL 4 million from the positive net debt change where the net debt improved, notwithstanding the GEL 10 million dividends that they paid us. That’s how we get to overall about GEL 50 million profit within our third quarter NAV statement from retail pharmacy. In insurance, we also had a 5.1% growth because of the growth in the net income, which you saw on the previous slides across the board in P&C insurance and the medical insurance that was also supported by the net debt change. Overall, this value was created by the net income growth and the strong cash flow performance. In the healthcare services business, EBITDA growth delivered GEL 60 million.

That was partially offset by the cash conversion as the operating cash conversion in the third quarter was relatively low that we expect to recover, as Irakli mentioned earlier, in the fourth quarter. We would expect this net debt change to be reversed as we go into the fourth quarter. Overall, the healthcare business did deliver about GEL 40 million value creation for us. This concludes the valuations. Briefly into the liquidity, our liquidity continues to be very strong, even as the gross debt balance that we have carried, as you can see on the top of this chart, has been reducing over time. Despite that, our liquidity has increased. We finished the quarter with $77 million worth of liquidity, which for the first time since GCAP’s merger from Bank of Georgia Group, we actually had a positive net cash balance.

Given that our gross debt is only $20 million, we were actually negative net debt or net cash of $27 million. Now on the next slide, we are now projecting the increase in our dividend inflows from previous GEL 180 million. We now expect GEL 200 million, around circa GEL 200 million. We have so far collected, as you see on the slide, GEL 168 million. As it was mentioned earlier by the private portfolio companies, we expect to get more dividends from the pharmacy business as well as from the insurance business. On top, our other portfolio companies, renewable energy and the auto services, will also be paying us more dividends, which we think in the fourth quarter will bring the full year to GEL 200 million dividends.

What’s important here, I would highlight that on a per-share basis, given the number of shares that we bought back this year, which is more than 10% so far, this means that we will be having about 31% growth on a per-share basis in terms of the dividend inflows per share. That concludes my presentation and over to Irakli for the wrap-up of these excellent set of results.

Thank you, Giorgi. I will not repeat the points we have here, but basically, I think that this short summary is that we have excellent performance and the team is delivering. Q4 outlook also looks positive. The economy continues to grow. Our companies continue to deliver. Let’s move on to the Q&A session. Some questions?

Moderator, Georgia Capital: Yeah, we can go to the Q&A session. If you have any questions, please type those into the question and answer panel or raise your hand. As I see, we have a first question from Dimitry. Dimitry?

Yes. Hi everyone. Congratulations on a really good set of results. I have four questions, please. The first one is on the ongoing capital allocation. You did great progress with your GEL 700 million capital return program. You paid down a good amount of debt. My question is about the priority between buybacks and debt, maybe for the next 10 months. What should we expect? What would be the priority for you? Would it be buyback or debt? Thank you. That’s the first question.

Irakli Gilauri, CEO, Georgia Capital: Thanks, Dimitry. I think that even the fact that the leverage is really low now, $50 million at GCAP level, our priority is buyback, especially at the current NAV discount level. That’s clearly a buyback at this discount level for sure.

Thank you. The second question is about Lion Finance Group. I understand that’s your key holding and pays you very good dividends. Maybe in the near future, do you plan to trim the stake a little more, or are you currently happy at the current position?

We are happy with the current position. The only thing, I don’t know whether you followed this epiphany development, what we had, and we had to trim a little bit off. That’s kind of where we are. We are happy with LFG holding. It continues to perform well. It’s a very well-run bank in a very good geography and economy.

Thank you. That’s clear. The next one is on the healthcare segment regarding the deal which you’ve done. Obviously, the multiple is very good. My question is on the EBITDA impact for 2026. I mean, it’s a small one, but just to double-check whether you expect any near-term pressure on the EBITDA margin, maybe in the first quarter or in the second quarter of 2026, or you don’t expect any of that.

For healthcare, we don’t expect the EBITDA margin pressure at all. We are actually expanding EBITDA margin, as you see, and we will continue to expand because we are adding more profitable services. We are making more efficient operations. This is a kind of a smaller position, but it gives you a flavor at what prices we have the appetite to invest, allocate the capital. I think that every little bit helps to grow the business and grow the profitability, generate more cash. That’s what we are for here.

Understood. That’s very clear. The last one is on Armenia in the pharmacy business. If you could give me an update about the current market share and how it developed over the last 12 months, it’s quite an attractive market.

I think it’s better we have Tornike talking about that, our CEO of the pharmacy business. Tornike.

Tornike, CEO of Retail Pharmacy Business, Georgia Capital: Thank you for the question. In Armenia, unfortunately, we don’t count the market share because as we do in Georgia, it’s transparent how the big companies are reporting their data, but it’s not the case for the Armenian market. We don’t have any market. Also, it’s very fragmented in Armenia. The key accounts, as they are holding in Georgia, around 90% of the total market. It’s very much fragmented in Armenia.

Okay, thank you.

Thanks.

Moderator, Georgia Capital: Thank you, Dimitry. Now I will read out the question that we have in the question and answer panel. The question comes from Eduardo Lopez. Many thanks and congrats to all Georgia Capital team. Here are some questions. On retail, can you give us more color in relation to strong wholesale growth and evolution of international expansion? The second question is about the insurance. Could you give us an insight in the breakdown of growth volume and price, especially in P&C insurance? Could you also comment the evolution of reinsurance business and potential unique economics?

Irakli Gilauri, CEO, Georgia Capital: I think let’s have Tornike and Giorgi answering this question, right?

Tornike, CEO of Retail Pharmacy Business, Georgia Capital: Thank you. For wholesale, let me mention that the biggest impact for our wholesale business, such a big growth, is the portfolio enhancement, in fact, which means that we have additional new contracts for exclusive brands and products which we are selling in wholesale in all channels. The second part is that we opened for our existing portfolio, which we were selling before, let’s say, exclusively in our retail. Now we opened that for big pharmacy accounts and also pharma traditional trade as well. That gave us a result.

Giorgi Paratashvili, CEO of Insurance Business, Georgia Capital: I’ll answer the first question about the pricing. The first question is about the pricing, and mainly our actuaries and underwriters are looking at the portfolio analysis. Mainly last year in Q3, we had a growth in corporate motor. We adjusted the prices according to the loss ratios that we look at, and we usually monitor the portfolios. We are always pricing our products at market price, and even more so, a bit more than the market price because of the brand and because of our high NPS. Whenever there is a yellow flag from our actuaries, of course, we reprice the price. Mainly, it’s in P&C where we use the actuarial opinion in each line. As far as for the health insurance, it’s really in collaboration with the healthcare providers, health service providers.

They’re also adjusted annually or maybe even twice per annum because of the growing demand and utilization. We see in health insurance, we see quite a big utilization because the AI developed quite well. This year, we had two adjustments because our patients usually ask ChatGPT to ask AI tools, and then they come directly to the doctors and ask for the prescription. Utilization is growing, meaning that we need to adjust the prices. We always have our hands on the pulse to keep the combined ratios at a healthy level. We put the healthy portfolios in the middle of our working principles. That’s the first part. In terms of the international inventory insurance, the development is really, really good. As you know, in Q2, our P&C business has been upgraded to the investment grading, and we became the first company in Georgia with the investment grading.

Our announced strategy was that we will keep up to 10% of the total revenues at this point in the medium term for the inventory insurance. The good news is that we had a meeting in Baden-Baden with our reinsurance right now, and they increased our inventory insurance limit from $5 million to $15 million. That’s the recent development. Because of the prudent underwriting and the good healthy portfolios also in the inventory insurance, what we should expect is that we should expect growth in inventory insurance, but we will take it really cautiously. We are learning the market. We are learning the region, but we really love this business to be presented in the region without any equity and using our insurance treaties. The first one is, yes, we will be developing. We will be increasing our portfolios, but cautiously, up to 10% of our total revenues.

The good development is that the recent development is that our main partner, HanoverRe, granted us increased, tripled our inventory insurance limit from $5 million to $15 million. That’s the recent development. That’s the answer. Thank you.

Moderator, Georgia Capital: Thank you, Giorgi and Tornike. The next question comes from Ben. Ben, you can talk now.

Hi, can you hear me?

Irakli Gilauri, CEO, Georgia Capital: Yes, yes, we do.

All right. Okay. Thank you for taking my questions. I’ll just call a few. The first one is on the capital return program. This is obviously meant to run to the end of 2027, but you’re tracking well ahead of that at the moment. Would you expect to announce another program next year, possibly? That’s my first question. The second question is on acquisitions. The acquisition of the healthcare business seems to be positive and done at a good price. Should we expect bolt-on acquisitions and buybacks rather than larger M&A until the discount to NAV narrows? Kind of related to that, at what discount to NAV would buybacks no longer make sense for you guys? Just on the existing investments you have, do you expect to monetize any of these in the near term? Is that more of a 2026, 2027 event?

My final question is just on the dividend guidance. I saw that you upgraded it this year, but I was just wanting to get if you’re able to give us any color for the dividend you expect in 2026 and beyond. Thank you.

Thank you. Let me start with the capital return program. We did say end of 2027. It seems like we are moving faster, and we may do it in 2026, announce a new one once we finish. I don’t want to make a new deadline. So far, we are working with 2027. In the last program, you know that we did a year and a half earlier. We finished a year and a half earlier than originally anticipated. Let’s see how we go about here. As you saw on the slide, we had GEL 300 million. Only GEL 300 million will be left after we are done with the $50 million buyback program. Now, in terms of the healthcare acquisition and the expectations about the investments, basically, we always say that we are running a very simple capital allocation strategy.

If we can find somebody who is cheaper than GCAP, we’ll buy it. Before, when we were running at 50%, 60% NAV discount, it was impossible to find anything. Now we did, and we were only doing the buybacks. Now that it decreased, the NAV discount is at 32%. We could have, we found some things, not a lot, but some things we did find. We don’t expect to find many at 32% discount to NAV. We may find from time to time some acquisition opportunities, which we’ll pursue, and it will be very simple. Can we buy this company cheaper than we can buy the GCAP? It’s a very simple question we need to answer every time we make an investment. We found in healthcare, and we bought it. We don’t expect to find a lot at the 32% plus discount to the fair price.

Therefore, at this point, you do not expect to at this discount level. Once we will be trading on premium, then we probably will be investing more. That’s kind of a very simple approach. Regarding the monetizations, monetizations are not planned or etc. They are, in a way, it’s periodic. If we see the opportunity to sell, we do that. Of course, we look at the GCAP discount levels. More discount closes down on GCAP share price, more difficult it will be to sell. It’s easier to sell at a higher discount than at a lower discount. It’s basically a very simple, straightforward capital allocation program we run. It is scientific, but there is some art involved in this as well. As you know, it’s not mathematically, you cannot really measure everything. You know, what is the investment in healthcare in the region versus the investing in GCAP?

It’s not dissimilar. It has to be, you know, the GCAP investment is way better than investing in the regions in healthcare. Basically, there is a lot of science, but we also use art there. In terms of the dividend outlook, so far, we did announce in 2026 what we are expecting, and we will announce ’27 outlook towards the end of the, our CFO, Giorgi Alpaidze. Correct me if I’m wrong. You know when we’ll be announcing the dividend outlook for ’27.

Giorgi Alpaidze, CFO, Georgia Capital: We announced 2025. We will be announcing for 2026 when we publish our fourth quarter numbers. At the moment, we do expect that number to grow compared to 2025, Ben.

Okay. Thank you. Can I just ask one more quick question about if we have time? Just again, related to acquisitions, given all the hard work you’ve been doing through buybacks to reduce the share counts and back down to, you know, before the merger level, I assume that going forward, you wouldn’t expect to, you know, issue further shares to fund an acquisition, or is that something that you’d still look at potentially to try and finance another acquisition?

Irakli Gilauri, CEO, Georgia Capital: I mean, the buybacks is not hard work. To be honest, it’s very simple work. We just don’t work much, actually. We just buy back. Buying something is hard work. You know, you need to do due diligence, negotiation, etc. We would rather do little and do the buybacks, to be honest. Sorry, I did not fully catch the question.

No, that’s fair enough. I’m just wondering if, you know, going forward, should we expect the share count to increase ever again, or are you quite keen to keep it?

No, no, no, no, no. We don’t like the share count to increase. We like the share count decreasing. I mean, our goal is to become a permanent capital vehicle, which is basically don’t issue new capital and reinvest. If we want to invest something somewhere, we need to sell something. If we need to, we can do the bridge. We can attract some bridge loans if we want to invest somewhere, and then have a very clear path of repaying this loan. We have a very firm commitment of not increasing the number of shares. Contrary, we want to decrease. We like the share price, share count decreasing. We have our internal targets how far down we want to go. It’s actually one share, but so far, we are, you know, we have a long way to go. We have a long way to go.

Okay, great. Thank you.

Thanks.

Moderator, Georgia Capital: Thank you, Ben and Irakli. The next question comes from Melker Samuelson. Melker, you can talk.

Giorgi Paratashvili, CEO of Insurance Business, Georgia Capital: Hello. Can you hear me?

Yes.

Yes. I wrote my questions on chat as well, so I will just read them out. With regard to the Imedi L litigation, given that it was stated that there was low perceived risk in the annual report of 2024, I just wanted to ask firstly if you have an updated view on the other BGA litigation and what was mentioned in the pharmacy, and if you think more provisions might be needed there, if you have anything relevant to share.

Irakli Gilauri, CEO, Georgia Capital: No, at this stage, basically, we don’t anticipate anything, any provisions. We did have on NCC the liquidity buffer on Imedi L, and we did have some provision to that Imedi L, basically. You know that unfortunately, it worked out that way. At this stage, we don’t see any need to provision anything else.

Okay. Thank you. Secondly, I mentioned the returns that you’re putting up in the insurance segment is truly phenomenal. I just want to see if you think this is sustainable and how you strategize, if so, to keep those returns. How is the market, the Georgian insurance market, looking overall? Is it above market level returns you’re earning? Is it not? Just some commentary around how the returns on equity can be so exceptional in your insurance business.

Giorgi, maybe you want to address.

Giorgi Paratashvili, CEO of Insurance Business, Georgia Capital: Yeah, I’m going to take the question. Thanks for the question. To start with the first part, we’re introducing the exceptional return on equity for the last 10 years. We are outperforming the market twice for the last 10 years, and it’s not for one or last two years. For the last 10 years, Aldagi, our P&C business, has produced twice higher ROIs than the market, meaning that our main principle and approach is that we put in the middle the discipline underwriting. We don’t jump from one side to another. We follow our strategy. That is the discipline underwriting, meaning that we are very sure, and the management is sure, that the high ROIs and the profitability and the returns we provide are very sustainable because of the healthy loss ratios that we keep.

Our strategy is to keep the loss ratios in the region of 85% to 87% in the medium term for the next five years. We’ve been doing this for the last 10 years, meaning that even though the market is very fragmented, there are three main players. The idea is that we don’t dampen the prices. We follow our brand and we follow our underwriting, meaning that we are not going to, the returns will be sustained for the forthcoming years that we are really, really sure. The competition is quite high, but the main players are three. The rest are small. That’s it mainly that allows us to keep the high returns with the exceptional. We are the only company in Georgia mainly keeping the big division of the actuaries.

We do not make any decision without the actuarial opinion, and they have the right to raise yellow and red flags. Every decision made by the company is made by the recommendation of the actuaries. We will keep and we will stick to the discipline underwriting in the coming years.

Okay. That’s great. I mean, the combination of growth and underwriting margin in your insurance business is truly spectacular.

Thank you very much.

Congratulations at that. What’s a quick follow-up maybe on that? What’s the name of the three competitors or the three main players?

Yeah, the main group, there are three main competitors. It’s us. One is us. The second is the Vienna Insurance Group. We only have one international player at this point present with the Vienna Insurance Group by two companies. The third one is a captive insurance company, which is owned by one of the banks, 100%.

Okay, great. Thank you.

Mainly dependent, which is dependent on the bank portfolios.

All right. Thank you very much. If I may, just a last final one. With regards to the whole PIFIC situation, has there been any discussion around alternative solutions here? It just seems to me that Bank of Georgia can be very strongly argued to be your cheapest asset and your cheapest investment based on contribution to NAV. It seems that this will be preventing monetization in other mature businesses, for example, healthcare, given that a big return of cash would prevent you from doing buybacks or returning that to shareholders. You would again cross the PIFIC limit by quite a lot. Just keen to hear if you have any comments and thoughts on this dynamic and if you’ve explored other solutions.

Irakli Gilauri, CEO, Georgia Capital: I think, yeah. Basically, we are, to be honest, the Bank of Georgia thing we had to fix quickly because it nearly doubled from year-end. It has happened in such a short period of time. We did not have anything else to fix that problem other than to trim the Bank of Georgia. In six months when the share price nearly doubles, it’s very difficult to come up with alternatives. I’d love to come up with alternatives, but at that point of time, we did not have any alternative.

Do you have any other alternatives going forward if the given Bank of Georgia is still relatively lowly rated, if this would continue?

Basically, we are exploring, but Georgia is not, I don’t know, USA. That overnight or in a couple of months, three months, it’s not happening like that. You need time to monetize business in Georgia.

Giorgi Alpaidze, CFO, Georgia Capital: For example, as we grow our private portfolio, as the assets on the private portfolio side grow, that is helping to keep the passive share of assets down when it comes to Bank of Georgia. For that.

Irakli Gilauri, CEO, Georgia Capital: This acquisition, which is not yet complete, but the bolt-on in the healthcare business, it adds the asset base. It adds the land, it adds the building value, etc. That’s positive for PIFIC, for example.

Tornike, CEO of Retail Pharmacy Business, Georgia Capital: Yes, of course. I’m just saying it seems like you’ve so far been selling your cheapest assets based on rating.

Irakli Gilauri, CEO, Georgia Capital: At the same time, we’re being banked back. That’s why we had that one slide, which shows you that even when we are selling, when you look at it on a look-through basis, you still own the same amount of or more amount of Bank of Georgia shares than what you owned three years ago or four years ago, for example.

Tornike, CEO of Retail Pharmacy Business, Georgia Capital: No, of course. Yes, very clear. Okay, thank you.

Irakli Gilauri, CEO, Georgia Capital: Sure.

Thank you, Malcolm, for the interesting questions. We also have one question in our Q&A panel. The question comes from Barry Cohen. The question is, what does the management team think is the spread between the discount to NAV tightness enough where use of capital shifts to portfolio investments versus share repurchases?

Giorgi Alpaidze, CFO, Georgia Capital: I think we answered that question. Basically, it is, you know, as NAV discount gets lower, smaller, more investment opportunities come and will come to us. That’s kind of a will be available for us to make an investment. It’s a process.

Perfect. The last question that we have is from Brad Verbitsky. It seems like you took the slides out of the presentation regarding focusing on capital-like businesses versus capital-intensive. You also made a capital-intensive acquisition. I’ll be the cheap one. Is that a sign of a change in strategy?

No, I don’t know whether we took a slide off. That’s a very good observation. The slide should go back in there. I think that this acquisition was mostly opportunistic, and it improves the exitability of the healthcare business. Basically, I mean, we cannot say that we cannot invest. If we invest, that we improve the exit opportunity, why not? We did that. We are not changing our strategy. We are very much committed to the capital-like. This acquisition was pretty much, first of all, very small ticket size. Second of all, it was a bolt-on to our current business. Thirdly, it is improving the exit opportunity for our capital-heavy business, basically.

Irakli Gilauri, CEO, Georgia Capital: If I were to add just two cents, we didn’t take out any slides, Brad, maybe it’s in a different presentation. One thing that’s great about this bolt-on is it comes with no leverage. They have no debt, and we’re buying this at less than four times. You can imagine we can leverage this at three times, and we only put down one time as equity. As you rightly said, it was a very attractive structure in that sense. I don’t know. Over to you. Any more questions?

Yes, thank you. Thanks, Giorgi and Irakli. No, there are no pending questions currently. If some of you want to or have any questions, please do not hesitate to write it in the Q&A panel or raise your hands.

Giorgi Alpaidze, CFO, Georgia Capital: It seems like there are no further questions. Thanks for your time and stay tuned for Q4 as we continue to deliver on the results. On great results. Thank you.

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