Georgia Healthcare Group PLC Annual Report 2018 Strategic Report Our business model continued Healthcare services – Referral hospitals Referral hospitals are located in Tbilisi and major regional cities and provide secondary or tertiary level outpatient and inpatient diagnostic, surgical and treatment services. Our referral 16 hospitals, which serve as hubs for patients within a given region, had a 56.2% bed utilisation rate in 2018. Excluding the effect of newly-launched Tbilisi Referral Hospital and Regional Hospital, the bed utilisation rate stood at 63.3%. The referral hospitals generated US$40,300 revenue per bed in 2018.1 Referral hospitals Successful ramp up of newly-launched hospitals 85% Revenue share in healthcare services business 2,825 Number of beds Regional Tbilisi Referral Hospital Hospital Revenue The diagnostic department opened in Opened in April 2017 with newly- (GEL million) 3Q16 and the inpatient department in renovated 220 beds. In December March 2018. The hospital operates with 2017, additional capacity of 112 beds 306 beds and, as a result of successful was added and the hospital was fully 256.8 ramp-up phase, after nine months launched. We are pleased to see 225.5 of its opening the occupancy stood that the hospital has been generating at 32.7% in 4Q18. As planned, more positive EBITDA since 1Q18, with +13.9% than 60% of its revenue comes from the occupancy rate standing at elective care services and more than around 46.5% in 4Q18. 40% of revenue is paid out-of-pocket. The hospital has been generating positive EBITDA since 3Q18. 2017 2018 Revenue dynamics by quarters, Revenue dynamics by quarters, EBITDA and adjusted EBITDA margin2 Regional Hospital (GEL million) Tbilisi Referral Hospital (GEL million) (GEL million) 5.9 73.3 8.3 67.6 4.1 4.1 6.1 3.7 5.3 29.2% 28.7% 1.2 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 2017 2018 1Excludes data for newly-launched Tbilisi Referral Hospital and Regional Hospital. 2Adjusted EBITDA margin are for referral hospitals and community clinics and excludes data of newly-launched Tbilisi Referral Hospital and Regional Hospital. 12