Georgia Healthcare Group PLC Annual Report 2018 Strategic Report From capex to cash flow From capex to cash flow – Healthcare services business From the capital expenditure perspective, we have now completed our three-year investment programme aimed at creating high-quality care facilities with the necessary capacity to serve our patients. Over the past three years, the Group engaged in sizeable Thus, in recent years, the healthcare services business has been development projects with considerable investment in our in a roll-out phase. The 2018 performance reflects a significant healthcare facilities. The major projects of the investment programme, progress against the investment programme and towards the declared at IPO in November 2015, are now finalised. These projects business’ strategic priorities. Much of the heavy lifting has now include renovation and development of acquired healthcare facilities, been completed, and we are starting to see the benefits materialise. Regional Hospital and Tbilisi Referral Hospital, financing expansion The business has completed the heavy capex programme and, and enlarging the network of polyclinics, and investing in the going forward, our focus will remain on the successful roll-out development of different elective medical services across the of newly-launched hospitals, polyclinics, laboratory and services Group’s hospitals. as well as better utilisation of our facilities. From a capital expenditure perspective, we have now completed our principal development projects (GEL million) Start of the Peak capex stage Phase out from the capex programme Continued renovation works for the capex programme Declared three-year capex projects, including reconstruction Completed vast majority capex programme at IPO of two agship hospitals, launch of new of projects from three-year on November 2015 services, opening of new polyclinics investment programme 120 9.4 100 101.6 9.6 80 79.7 7.2 60 64.0 11.1 52.6 40 20 0 2015 2016 2017 2018 Development capex Maintenance capex 26