Georgia Healthcare Group PLC Annual Report 2018 Strategic Report At a glance The structure of our business We are the largest healthcare services provider in the fast-growing, predominantly privately-owned, Georgian healthcare ecosystem. We lead the market by offering the most comprehensive range of inpatient and outpatient services, targeting the population of the entire country and beyond through our vertically integrated network of hospitals and clinics. We also operate the largest pharmacy and distribution business and are the largest medical insurance provider in the country. GHG’s market-leading position, its unique business model with significant cost and growth synergy advantages, and its experienced management team make it a compelling investment story. Market leader on each operating segment Business model with cost and synergy advantages • The largest healthcare service provider in Georgia: 24.9% • The single largest integrated company in the Georgia healthcare market share by number of referral hospitals and community ecosystem with a cost advantage due to its scale of operation: clinics beds – 3,320.1 – The largest purchaser of pharmaceutical products in Georgia • The largest pharmaceuticals retailer and wholesaler in Georgia: – The next largest healthcare services competitor has only c.30% market share by sales, over two million client2 5% market share by beds interactions per month, with c.0.7 million loyalty card members. • Better access to professional management and high-calibre talent: • In 2019 we became the largest medical insurer in Georgia with – One of the largest employers in the country: c.16,000 c.230,000 insured individuals: in 2018 with c.158.000 insured full-time employees, including c.3,600 physicians, clients, the business held 26.7% market shareby revenue. c.3,300 nurses and c.3,300 pharmacists • The largest diagnostics laboratory in Georgia, as well as • Referral system and synergies with insurance and in the entire Caucasus region (“Mega Lab”): opened in pharmacy and distribution businesses: December 2018. – Presence of patient pathway and referral synergies • Institutionalising the industry: strong corporate governance; – Insurance activities provide steady revenue stream standardised processes; improving safety and quality by for our polyclinics and bolster hospital patient referrals progressive implementation of the Joint Commission – Around 0.7 million loyal customers in our pharma International (“JCI”) benchmarked standards; own personnel business with an upside to cross-sell training centre. A well diversified business GHG Revenue breakdown by segments GHG EBITDA breakdown by segments Healthcare services (34%) Healthcare services (57%) Pharmacy and distribution (59%) Pharmacy and distribution (39%) Medical insurance (7%) Medical insurance (4%) GHG Revenue distribution by payment sources c.16,000 25% Out of pocket (54%) UHC (24%) Full-time employees Market share by beds Other (22%) GHG Healthcare services 30% 27% Market share by revenue Market share by revenue3 Pharmacy and distribution Medical insurance Sources: 1National Centre for Disease Control and Public Health (“NCDC”) data 2 Market size – Frost & Sullivan analysis. as of December 2017, updated by GHG to include the changes before 3 Insurance State Supervision Service Agency of Georgia (“ISSSA”) 31 December 2018. as of 30 September 2018. 4