Report #2 2019

REPORT #2 2019

In caring hands On the front cover:

“I had the honor of being chosen to create a work of art for the 15th anniversary of Korian. When I have met the teams last September, I discovered the Group through them, by spending time with them and the elders in the Korian homes, and by taking knowledge of the books “Tous Positive Care” and “Vivre”. I appreciated the tone and the perception of the elderly This is a subject that touches me and it is for me a major issue of our modern society: to take a close and careful look on aging and its difficulties. It has inspired me so much, that it has become not a work of art but three immersive spaces and a participatory work that have been created and realized to celebrate 15 years of experience and human adventures around Positive Care.”

Véronique Le Mouël, visuel artist

http://veroniquelemouel.com/?actions=oeuvres-nouvelles

2 KORIAN • REPORT #2 2019 REPORT #2 2019 Contents

P5 INTRODUCTION BY SOPHIE BOISSARD

P7 ABOUT US

P19 THE ISSUES WE FACE

P27 OUR STRATEGY

P53 OUR GOALS FOR THE FUTURE

www.korian.com KORIAN • REPORT #2 2019 3 Our mission is to be a trusted partner for elderly and vulnerable people and their families by providing personalised care and a better quality of life each day.

4 KORIAN • RAPPORT #2 2019 KORIAN: DRIVEN BY DEDICATION

Sophie Boissard or the second year in a row, we are publishing an “integrated” report, Korian group Chief which provides a broader perspective of our strategy, our social Executive Office mission and the issues we face, and outlines our model for balanced Chairperson of growth and shared value creation. the Korian Foundation As Europe’s leading integrated operator of health and care services for Ageing Well Fcatering to the elderly and promoting independent living, with a long and healthy track record since 2003, Korian’s action is based on an inclusive and sustainable vision that is closer to communities. Faced with the challenges of old age and related issues, such as chronic disease and the need for long-term care, Korian develops innovative solutions and diverse services for the 300 000 persons placing their trust in us, in order to adapt to the needs and expectations of vulnerable individuals and their loved ones. To lead this transformation, we apply a balanced growth model that relies on the creation of shared value. This model is driven first and foremost by Korian employees. I would like to thank them for their unfailing commitment to their work. It is also driven by our shareholders, who provide us with the resources to invest and expand, and our partners in the public, non-profit, and private sectors, as well as our suppliers and investors who work with us on a daily basis; without them, none of this would be possible. One of the main forces driving our efforts to build a balanced growth model is our commitment to an open and inclusive society. All our facilities are instrumental in helping us promote social inclusion each and every day, and are directly involved in the social and economic fabric of their respective communities. Thank you all for your commitment! Without your daily commitment, we would not be able to meet the challenges of the very old age and autonomy. Let us continue on the path together, resolutely looking to the future.

www.korian.com KORIAN • REPORT #2 2019 5

ABOUT US

Korian has been consolidating and diversifying its interests for the last 15 years, locking in its position as the European leader of services for elderly and vulnerable people.

www.korian.com KORIAN • REPORT #2 2019 7 ABOUT US • OUR STORY

Korian has been consolidating and diversifying its operations for the last 15 years, shoring up our position as Europe’s leading provider of services for the elderly and vulnerable.

2003 2010 2011 • Korian was founded • Introduction of the • Montessori method in France by the merger Best training program and non-drug of four companies (Finagest, (Good treatment, therapies (NDT) Sérience, Réacti-malt and Ethics, Care for All) introduced in Medidep). in France. France for the first time.

• Creation of the first training centre at Medica, now 2014 known as Korian Academy. • Korian’s employees define the Group’s values: Benevolence, Responsibility, Initiative and Transparency

2013 • Creation of the Korian Institute for Ageing Well. • Korian acquires Curanum and becomes the leader in the German market. 2006 2007 • The Group is listed • The Group acquires on the stock market Phönix in Germany with the aim and Segesta in Italy. of expanding across 2014 - 2015 Europe. • Korian’s merger with Medica and acquisition of the Senior Living Group in Belgium, allowed the creation of the Korian group, European leader of ageing well.

8 KORIAN • REPORT #2 2019 ABOUT US

2018 2016 • Korian creates the “Passeport Gériatrique” • The Korian Academy is spread across (Geriatric Care Passport), the first certified Europe. training course in France. • Korian signs a nationwide partnership with the Union Nationale des Missions Locales in France. • The “Positive Care” approach is • Equity investment in Âges & Vie in France. officially embedded in the Group. • Korian Korian steps up its development • New operators are integrated in in home care and hospital home care Germany (Casa Reha) and Belgium services by acquiring Petits-Fils and (Foyer de Lork, OTV, Senior Assist). CliniDom. Consolidation of the Group’s health services in Italy. • Korian Solutions is created, the first in-house digital agency.

SOLUTIONS

• More acquisitions are made in France (Fondivina) and Belgium (Senior Assist).

2019 • Korian joins forces with 20 large groups to promote a more inclusive economy. • Creation in France of the first joint Apprenticeship Training Centre (CFA) 2017 for the cooking and catering trades alongside Accor, Adecco and Sodexo. • Korian introduces the Centenarian Celebration Day in France on 24 June. • Acquisition of Oméga in France and Schauinsland in Germany. • Korian is the first company in the sector to sign a Quality of Life at Work agreement (France). • Korian moves into Spain • The Korian Foundation for Ageing and the Netherlands by acquiring Well is launched. Seniors and Stepping Stones.

www.korian.com KORIAN • REPORT #2 2019 9 ABOUT US • 2018 KEY FIGURES

53,000 843 Over employees facilities 80,000 beds Figures as of April 26, 2019

REVENUE 300,000 patients and residents €3.3 billion +6.4% vs 2017

20% 21% Clinics and home care services PATIENTS/ RESIDENTS REVENUE Nursing homes and assisted living facilities 79% 80%

EBITDA (% of revenue)1 NET PROFIT, GROUP SHARE2 14.3% €123 million +30 pb vs 2017 +28.1% vs 2017

OPERATING RESTATED REAL ESTATE FREE CASH FLOW3 DEBT RATIO4 PORTFOLIO €204 million 3.0x €1.6 billion +19% vs 2017 Vs 3.2x in 2017 +33% vs 2017

1. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. Corresponds to EBITDAR excluding rents. 2. 2017 NET PROFIT/LOSS, GROUP SHARE, used to calculate the change is restated for the impact of deferred tax, resulting in a restated 2017 net profit Group share of €96 million compared with €163 million before restatement. 3. OPERATING FREE CASH FLOW restated for the VAT refund recognised in 2017. 4. RESTATED DEBT RATIO: (net debt - real estate debt) / (adjusted EBITDA - 6.5% real estate debt).

10 KORIAN • REPORT #2 2019 ABOUT US • KORIAN, A EUROPEAN CHAMPION OF SENIOR CARE AND ASSISTANCE SERVICES

We now operate in six countries: France, Germany, Belgium, Italy, Spain and the Netherlands, representing more than 50% of Europe’s population over 75 years old:

12 260 350

123 12 709 9 127 #1 #1 51% 233 OF REVENUE 29 009 OUTSIDE FRANCE 20 043 #1

408 31 534 20 519

9 58 1 334 6 146 518 2 265

843 facilities 80 992 beds 52 822 employees

Figures at 24 April 2019. Position on the long-term care nursing homes market.

www.korian.com KORIAN • REPORT #2 2019 11 ABOUT US ABOUT US • OUR SOLUTIONS

Korian now covers the whole range of care and assistance services in Europe, catering to the needs of the elderly and promoting independent living:

2016 FRANCE GERMANY BELGIUM ITALY

Specialised clinics

At-home care and services

Assisted living facilities and shared housing for seniors

Nursing homes

2019 FRANCE GERMANY BELGIUM ITALY SPAIN NETHERLANDS

Specialised clinics

At-home care and services

Assisted living facilities and shared housing for seniors

Nursing homes

Core business In the process of being developed

12 KORIAN • REPORT #2 2019 ABOUT US

For the past three years, we have complemented our two core businesses – nursing homes and specialised clinics – by branching out into home care, out-patient care and assisted living facilities in order to offer a broad range of services and integrated care pathways to our patients and residents throughout Europe.

Our 86 specialised clinics provide temporary care (about 30 days) for physically dependent patients after a hospital stay or illness, intended to lessen their physical impairment and help them get back on their feet before returning home. They specialise in 5 areas: musculoskeletal disorders; neurology; cardiovascular Specialised diseases; oncology; addictions and psychiatric illnesses. The clinics are increasingly focused on day hospital care or out-patient care, enabling patients to return home clinics on the same day after being treated.

Our 117 home care facilities provide ongoing care after a stay in hospital. This not only reduces hospital stays but also defers the patient’s institutionalisation. Home care is a way of offering patients overall and coordinated care provided by a multidisciplinary team in their everyday environment. These networks partner up with medical-social facilities (long-term care nursing homes) and post-acute and psychiatric care facilities (hospitals and specialised clinics), healthcare networks, At-home care home-care organisations and various self-employed healthcare professionals to and services offer hospital home care (HHC) services but also home nursing services (HNS) and independent living support such as assistance with meal preparation or with administrative procedures.

Our 86 assisted living facilities host independent seniors who are looking for social contact, do not want to live alone and seek conviviality in an open and shared yet secure environment that promotes independence and well-being. A range of à la carte services (catering, recreational activities, laundry, spa therapy, etc.) is offered, along with medical and nursing supervision provided by one of Assisted living the Group’s home care networks or long-term care nursing homes. facilities and In France we also offer shared housing for the elderly. This consists of small shared housing residential units combining private and shared areas and forming a truly alternative for seniors type of housing for elderly people who are losing their autonomy.

Our 672 long-term care nursing homes host elderly people who are losing their autonomy on either a temporary or permanent basis. They are designed as proper living spaces and are fully integrated into the local healthcare and social network, providing the complete range of care services for residents depending on their needs and capabilities. They are increasingly Long-term care focused on high dependency care and specialise in caring for those suffering from nursing homes neurodegenerative diseases, such as Alzheimer’s disease and related disorders.

www.korian.com KORIAN • REPORT #2 2019 13 ABOUT US ABOUT US

OUR GOVERNANCE

Our governance is well balanced in terms of both composition and set-up, which encourages discussion and effective decision-making on Korian’s issues and challenges in order to create shared value.

Our Board of Directors

Christian Chautard Chairman of the Board of Directors and Member of the Investment Committee

INSTITUTIONAL DIRECTORS

Predica Predica Malakoff Investissements Perm. rep.: Jérôme Médéric PSP Françoise Grivet Assurances Perm. rep.: Debrus Perm. rep.: Alexandre Anne Ramon Gagnon-Kugler Member of the Audit Director appointed Member of the Investment Member of the Investment Committee and by Predica Committee and Committee and Audit Compensation and Chairman of the the Ethics, Quality Committee Appointments Committee Investment Committee and CSR Committee

INDEPENDANT DIRECTORS

Jean-Pierre Duprieu Anne Lalou Markus Müschenich Chairman of the Chairwoman Member of the Audit Compensation of the Ethics, Quality Committee and and Appointments and CSR Committee the Ethics, Quality Committee and Member and CSR Committee of the Audit Committee

Catherine Soubie Jean-François Brin Chairwoman of the Audit Committee Member of the Audit Committee and Member of the Compensation and the Investment Committee and Appointments Committee

14 KORIAN • REPORT #2 2019 ABOUT US

DIRECTORS REPRESENTING EMPLOYEES

The director representing the employees is currently being renewed. At the last General Meeting, Korian’s shareholders voted in favour of an amendment to the Articles of Association allowing the appointment of a second employee representative. This second director will be elected by the Group’s newly created European Works Council. Two employees will therefore sit on Korian’s Board of Directors.

APPOINTMENT OF JEAN-FRANÇOIS BRIN

At the Annual General Meeting on 6th June 2019, Korian’s shareholders appointed a new independent director, Jean-François Brin, recognized for his expertise as a medical practitioner specializing in geriatrics and for his enriching experience in the field of neurodegenerative diseases within renowned pharmaceutical groups.

Composition of the Board of Directors following the General Shareholders’ Meeting of 6th June 2019. Independent directors

Employee representation 2 employee Our board of directors representative 50% The Board of Directors regularly reviews its own composition and the composition of its Committees in order to enhance and advance their Gender balance diversity - in particular with regard to the mix of genders, nationalities on the Board and diversity of expertise - which is a guarantee of objectivity, experience and independence for its shareholders. This multinational and balanced 10 membership, which includes active and committed members with directors 40% (out of 11) complementary experience and skills, ensures the quality of discussions women/men are under the and the appropriateness of the Board’s decision-making. age of 70 In 2017 and 2018, Korian was awarded First Prize for Equality (SBF 80 Diverse nationalities category) and the Equality Prize (Health Facilities and Services category) 3 nationalities represented by the Zimmermann Index.

Specialised Board Committees

Specialised Board committees examine and prepare certain deliberations and submit their opinions, proposals or recommendations for matters within the realm of their expertise.

Audit Committee Investment Committee 6 members – 8 meetings - 81,2% attendance 4 members – 7 meetings – 93,6% attendance Oversees internal control and risk management systems, In-depth strategic reviews of major investment projects. reviews accounting documents and the financial situation. Comité des rémunérations et des nominations Ethics, Quality and CSR Committee 4 members – 2 meetings – 87,5% attendance Appointments and compensation Committee Oversees the application of the Group’s ethical, medical 3 members – 5 meetings - 100% attendance and quality processes and Corporate Social Responsbility Changes to governance and remuneration policy. (CSR) actions.

www.korian.com KORIAN • REPORT #2 2019 15 ABOUT US

The European Top management team in Maastricht, March 2019

The Management Team

Korian’s Group Management Board comprises five business and country unit heads and five functional division heads, under the leadership of Sophie Boissard, CEO. In light of our resolution to pursue our expansion across Europe, we recently set up an International Development Division to explore new geographical considerations in markets close to those we are familiar with.

CAROLINE DE JESSEY ARNO SCHWALIE Group Chief Communication Officer Chief Executive Officer Korian Germany

FRÉDERIC DUROUSSEAU MARIUCCIA ROSSINI Group Chief Real Estate Chief Executive Officer Korian and Developement Officer Italy

DIDIER ARMAINGAUD DOMINIEK BEELEN Group Chief Medical, Ethics Chief Executive Officer Korian and Quality Officer Belgium

Sophie BOISSARD Chief Executive Officer

RÉMI BOYER CHARLES-ANTOINE PINEL Group Chief Human Resources Chief Executive Officer France and CSR Officer Seniors Division

PHILIPPE GARIN NICOLAS MÉRIGOT Group Chief Financial Officer Chief Executive Officer France Healthcare Division

BART BOTS International Development Director

16 KORIAN • REPORT #2 2019 ABOUT US

Our shareholders

Since our initial public offering, we have maintained Shareholding distribution a relationship of trust with our shareholders, both individual and institutional, based on dialogue Predica* Malakoff Médéric Humanis and transparency. We are committed to informing 24,2% 7,8% our shareholders about our business, strategy and development prospects in a transparent, accurate and Self- long-term manner. detention Information media 0,1% We make all published financial information available to the public (press releases, registration document, financial presentations…) through our website www.korian.com, available in a version French and English. 61,4% 6,6%

Free float Investissements PSP Ownership as of June 28, 2019. Number of outstanding shares: 81,985,563. *Predica: Life insurance subsidiary of Crédit Agricole Assurances

Meetings with shareholders In order to establish a permanent dialogue with our Investor meetings individual and institutional shareholders, we participate We participate in many investors meetings in the form throughout the year in many demonstrations or of one-to-one, sectorial conferences or road-shows, meetings: in France and abroad (London, Frankfurt, Brussels, Annual General Meeting Geneva, United States). Moment of listening and dialogue with the Council the Information meetings and site visits General Assembly of Korian is a strong and recurring Two SFAF meetings are held each year for the event in the relationship between the Group and its presentation of the annual and half-year results to the shareholders. It is in particular the opportunity to review financial community (investors, analysts, financial press). the highlights and the strategy implemented during the past financial year. It gives every shareholder the We also organize visits of our facilities in France for opportunity to take important decisions concerning the small groups of investors. Group through the resolutions submitted to the vote.

www.korian.com KORIAN • REPORT #2 2019 17

THE ISSUES WE FACE

The ageing landscape in Europe and key issues for our sector.

www.korian.com KORIAN • REPORT #2 2019 19 THE ISSUES WE FACE

ISSUES RELATED TO AGEING IN EUROPE FOR PLAYERS IN THE SECTOR

The dependency care sector is undergoing a transformation as Europe’s population is getting steadily older and the incidence of age-related illnesses is increasing sharply. To respond to these issues and given the context of a structural supply deficit, each country has introduced a binding regulatory framework and appropriate financing to guarantee the quality of care provided to seniors.

Population trends are forcing change A growing population of over-65s in our societies Life expectancy in Europe has increased to 77.9 years 30% for men and 83.3 years for women (source: Eurostat, 2017). Among other things, this means that the ear- 25% liest-born baby boomers are now in their seventies, shaking up all previous paradigms of intergenerational 20% solidarity.

15% +65 years

Increase in life expectancy 10% 2015 2020 2030 2040 2050

65+ 85+ 100+ Source: Eurostat, 2015. Within the European Union, as a % of the total population Source: Eurostat, 2015. +2.5% p.a. +3% p.a. x2 44-51 6.5-8.7 61,000- million million 153,000 Today, for the first time ever in the Between 2017 and 2027, in France, Germany, Belgium and Italy history of humanity, we have five Source: UN Dept. of Economic & Social Affairs. generations living together.

In parallel, the number of family caregivers is set to This demographic and sociological decline, from 1.05 per elderly person to 0.77 by 2030 upheaval is forcing us to rethink in Germany, Belgium, France, and Italy. our care models and the way we organise our care systems.

20 KORIAN • REPORT #2 2019 THE ISSUES WE FACE

The feel of springtime at Maison Le Gentilé

By 2030, cases of dementia and cognitive diseases such as Alzheimer’s disease will have doubled.

Strong increase in dependency and chronic diseases As the population gets older, chronic age-related illnesses (cancer, cardiovascular disease, neurodegenerative disorders, etc.) will increase in correlation, giving rise to a need for long-term medical care. INSEE estimates that the number of dependent These illnesses often result in serious health and highly dependent people living in France, Italy complications and a gradual deterioration in quality and Germany will increase by more than 2 million of life. Those who are losing their autonomy require between now and 2027. By 2030, cases of dementia specific kinds of support over the long term. and cognitive diseases such as Alzheimer’s disease will have doubled in these countries. Prevalence of at least one non-stable or acute Increase in chronic diseases chronic disease among residents in long-term care nursing homes 45 Arthritis 50 In % 40 Heart 35 disease 40 30 42 25 Cancer 38 37 38 37 20 30 33 Diabetes

Prevalence % Prevalence 15 COPD 26 27 10 20 Asthma 5 16 0 10 14 15 18-24 25-44 45-64 65-74 75-84 >85 10 Age years 0 *Chronic Obstructive Pulmonary Disease. IRG 1 IRG 2 IRG 3 IRG 4 IRG 5-6 Combined Source: Center for Disease Control (CDC) – NCHS, USA. CHRONIC NON-STABLE DISEASES ACUTE DISEASES The IRG (iso-resource group) corresponds to an elderly person’s level of loss of autonomy. IRG 1 is the highest level of loss of autonomy and IRG 6 is the lowest. Source: DREES 2011 LTCNH Survey.

www.korian.com KORIAN • REPORT #2 2019 21 THE ISSUES WE FACE

Growing pressure on residential, care and treatment facilities for the elderly

As the number of over-80s increases, the available supply of long-term care nursing homes – in terms Specific features of Europe’s care sector: of the number of beds – has fallen. Decrease can be observed over the past ten years. 1 • Public and non-profit operators are highly There are about 3 million beds in long-term care nursing predominant, accounting for between 60% and homes in the euro zone. The five countries with the 90% of existing beds. highest number of beds are Germany, Belgium, Spain, 2 • The private sector is highly fragmented, France and Italy, which is where the Group currently has consisting of lots of independent operators. most of its operations. Together these countries account 3 • Pan-European consolidation with large for more than 2.3 million beds. Healthcare professionals international operators buying each other up. estimate there will be a shortage of around 450,000 beds in these countries by 2025-2030*.

*Habiter le 4e âge au XXIe siècle en Europe – Primonial Reim study on the elderly in Europe in the 21st century – November 2018

Estimated need in number of beds in long-term care Breakdown of beds by country and by type of operator nursing homes

IN MILLIONS France 24% 14% 62% 1,5

1,3 Germany 42% 53% 5% 1,0

0,8 Belgium 45,10% 25,90% 29%

0,5

0,3 Italy 18% 35% 47%

0,0 Germany France Italy Spain Belgium Spain 30% 40% 30% ESTIMATED NUMBER OF BEDS to build by 2025/2030 CURRENT NUMBER OF BEDS 0 20 40 60 80 100 Sources: Primonial REIM Research based on data from operators, Eurostat and OECD Equipment ratio in % of the over-80’s population COMMERCIAL PRIVATE NON-PROFIT PUBLIC %

20 We work side by side with 15 the local authorities that deliver

10 our accreditations and help to fund treatments and dependency 5 care, thereby contributing to our

0 Germany France Italy Spain Belgium financial health. Sources: Primonial REIM Research based on data from operators, Eurostat and OECD RATION D’ÉQUIPEMENT (en % de la population de plus de 80 ans)

Sources: Primonial REIM Research based on data from operators, Eurostat and OECD

22 KORIAN • REPORT #2 2019 THE ISSUES WE FACE

Sweetness and light… and a smile at Maison Eyras

The need to adapt funding models A closely monitored and regulated sector

The dependency funding model will have to adapt The European senior care sector in which we operate to these new requirements. The rising costs incurred is highly regulated and closely monitored. by local authorities mean they are no longer able to In France, Belgium, Italy and Spain, any plans to create, fulfil all requirements. Work on the funding model is transform or extend a nursing home or specialised clinic underway in France (as part of the Loi Grand Âge et requires administrative authorisation from the regional Autonomie, an upcoming new law addressing issues and national supervisory authorities. The process of affecting the elderly) and in Germany. obtaining such authorisation varies from one country or region to another, but it is always tightly monitored. As the care capacity deficit widens, public authorities In addition, the number of new authorisations granted are introducing support schemes and/or tax incentives is limited, which means that barriers to entry are high to encourage stay-at-home care. But although this is and competition is low. helping to develop alternative and complementary Germany also has a very strict regulatory framework, models, facilities are finding it increasingly difficult to and compliance with operating, safety, environmental consistently cover staffing requirements to care for and employment standards is tightly controlled by the increasingly dependent residents. There is therefore public authorities. a greater need for specialised staff, and not enough has been done to prepare for this.

www.korian.com KORIAN • REPORT #2 2019 23 THE ISSUES WE FACE

Regulations on covering healthcare expenses and on In our specialised clinics in France and Italy, there are combining revenue streams into flat-rate packages vary two categories of rates: from one type of service or country to another, and for care-related services, rates are set by the they change regularly in line with regulations applicable • regional authorities and financed by the national in each country or region. These flat-rate packages are health insurance; subject to annual or multi-annual negotiations between the public authorities and care sector organisations • rates for ancillary services (or “comfort” services) based on the level of dependency and treatment are freely set and are covered by the patient who required by the residents and patients at each of the requests them. facilities. In France, the activity-based care allowance (Dotation Modulée à l’Activité - DMA) varies according to the disorders covered, but represents a maximum of 10% Our financial solidity enables of the rate. It is also covered by the national health us to provide excellent quality of insurance. care and services and to develop our models by diversifying our business lines.

24 KORIAN • REPORT #2 2019 Pricing structure for nursing homes

BELGIUM GERMANY €110 AVERAGE DAILY RATE €100 AVERAGE DAILY RATE

60% 40% 50% 35% ACCOMMODATION CARE CARE CATERING /SERVICES + DEPENDENCY /SERVICES

15% RENTS

FRANCE €110 AVERAGE DAILY RATE

70% 10% ACCOMMODATION DEPENDENCY /SERVICES 20% CARE

SPAIN ITALY €55 AVERAGE DAILY RATE €90 AVERAGE DAILY RATE

80% 20% 55% 45% ACCOMMODATION DEPENDENCY ACCOMMODATION CARE /SERVICES /SERVICES + DEPENDENCY

Source: Primonial REIM - Company Based Search

Care services are paid for by health The definition and development of insurance and are strictly regulated and accommodation services is regulated. capped. They cover medical services They account for the largest share of required to treat medical conditions Korian’s revenue. This revenue stream and paramedic care required due to also includes catering and social loss of independence. entertainment at the facility. These costs are paid by the resident.

Dependency services cover all the assistance and supervision needed to Additional services are provided to carry out everyday tasks in order to make residents feel more comfortable. make elderly people more independent. These services are growing rapidly They are covered by local and regional as demand increases and research authorities or health insurance, progresses. depending on the country.

www.korian.com KORIAN • REPORT #2 2019 25

OUR STRATEGY

A responsible and well-balanced company strategy built on permanent dialogue with all stakeholders.

www.korian.com KORIAN • REPORT #2 2019 27 OUR STRATEGY

OUR MISSION

We aspire to become a trusted partner for elderly and vulnerable people and their families by providing personalised care and a better quality of life each day. This is why we make sure our social responsibility – reflected in our “Maison Korian” diagram – lies at the very heart of our business model and of everything we do.

GROWTH

THE “MAISON KORIAN”

« LE SOIN À CŒUR » "IN CARING HANDS" Bienveillance - Responsabilité - Initiative - Transparence DIGITAL Benevolence - Responsibility - Initiative - Transparency INNOVATION

DÉPENDANCE FRAGILITÉ DEPENDENCY VULNERABILITY

FONDATION KORIAN FONDATION KORIAN POUR LE BIEN VIEILLIR POUR LE BIEN VIEILLIR REAL ESTATE MANAGEMENT

MAISON DE RETRAITE CLINIQUE RÉSIDENCE SERVICE À DOMICILE NURSING HOME CLINIC ASSISTED LIVING HOME CARE SERVICES

SOLUTIONS IMMOBILIER SOLUTIONS IMMOBILIER

DES L’EXIGENCE L’APPROCHE L’INNOVATION LA PRÉSENCE COMMITTED HIGH QUALITY POSITIVE DIGITAL LOCAL COLLABORATEURS DE LA « POSITIVE CARE » TM DIGITALE LOCALE EMPLOYEES STANDARDS CARETM INNOVATION FOOTPRINT ENGAGÉS QUALITÉ

HUMAN CAPITAL OPERATIONAL EXCELLENCE

28 KORIAN • REPORT #2 2019 OUR STRATEGY

THE KORIAN 2020 PLAN

To meet the demographic and health-related challenges of the elderly, we intend to offer a range of services adapted to different situations - from vulnerability to dependency - with respect for individual choices and aspirations, in every region where we have a presence. To this end, our Korian 2020 strategic plan identifies five levers for change:

REINFORCE Combine organic growth generated from added capacity with efforts to OUR GROWTH optimise existing platforms and bolt-on acquisitions aimed at broadening POTENTIAL our range of services and promoting local synergies.

USE REAL ESTATE Create value and support the Group’s development by actively managing MANAGEMENT our property portfolio, setting up in-house property development teams, TO BOOST OUR establishing global research partnerships with investors and increasing PERFORMANCE our ownership of strategic assets.

ACHIEVE This is essential in order to meet the expectations of our patients, residents OPERATIONAL and families, provide quality services and deliver robust economic and EXCELLENCE financial performances.

INVEST By reinforcing the teams’ quality of life in the workplace and deploying an IN HUMAN active training and skills development policy for our employees to make CAPITAL the most of their expertise and know-how.

A crucial factor enabling the Group to improve its quality of service and stand ACCELERATE out from the rest of the market by developing new concepts in the field of DIGITAL therapeutic care and in the use of digital technologies for the benefit of patients, INNOVATION residents and employees alike.

www.korian.com KORIAN • REPORT #2 2019 29 OUR STRATEGY

KORIAN’S MATERIALITY MATRIX

As an extension of the Korian 2020 plan, in 2017 we conducted our first materiality assessment to build our CSR strategy in keeping with stakeholders’ expectations.

FOCUS ON STAKEHOLDERS PRIORITY ISSUES We ensure that we are always able to Nutrition Well-being and quality of life maintain an open dialogue with all our in the workplace stakeholders: Respect for people’s dignity • The elderly or vulnerable people we and privacy (personal Autonomy, freedom of action possessions and data) and participation in social life support and care for • Families and caregivers Safety and quality of care Quality of dialogue with families • Our employees • Local authorities and communities Broader range of services • Healthcare professionals • Non-profit organisations and research Social dialogue Professional centres and skills development Diversity • Our suppliers and subcontractors Environmental performance Health and safety • Our shareholders of our facilities in the workplace Our materiality matrix highlights the Local and responsible purchasing Waste management CSR issues we need to address through Building safety our CSR strategy and the ethical and Use of digital resources to assist our residents responsible practices we adopt. An open approach to the outside world Partnerships and networks Social inclusion of employees Impact on the local economy Preventing corruption and fraud Transparency and accountability (including pricing strategy) Governance ONGOING ISSUES

FOCUS ON BUSINESS

Maintain the Enhance the Improve the independence Make a positive Be closely Adopt ethical well-being of our quality of our and freedom of contribution to involved in the and responsible employees environment action of elderly ageing well local community practices or vulnerable people

30 KORIAN • REPORT #2 2019 OUR STRATEGY

A GROWTH MODEL IN SUPPORT OF A STRATEGY CREATING SHARED VALUE

Our aspiration as a company is to generate balanced growth and share created value with our stakeholders.

FULFILLING THE VARYING NEEDS OF OLD AGE 1 A range of diverse and integrated services Sustainable growth in our business Innovative care concepts

ENHANCING OUR POSITIVE IMPACT ON COMMUNITIES 2 AND THE ENVIRONMENT THROUGH OUR REAL ESTATE STRATEGY A pleasant, adapted living environment Facilities that respect the environment Continuous support for local development

BEING CONSTANTLY MINDFUL OF THE QUALITY 3 OF CARE FOR THE ELDERLY AND VULNERABLE Help the elderly maintain their autonomy and freedom of choice Provide permanent support for family members Operational excellence to provide quality service

CARING FOR CARERS 4 Attract and develop talent Well-being and quality of life in the workplace Promote diversity and inclusion

PROMOTING DIGITAL INNOVATION AND RESEARCH 5 Digital innovation at the heart of our transformation Scientific research and sociological studies A different perspective on ageing

www.korian.com KORIAN • REPORT #2 2019 31 OUR STRATEGY

FULFILLING THE VARYING NEEDS 1OF OLD AGE

Broadening our business profile and range of services

Elderly people and their families want to see more diverse and personalised care and services with new ways of supporting a loss of independence. This is why we offer integrated solutions including care and assistance services designed for people who are temporarily or permanently vulnerable. The strict restrictions on capacity are also encouraging us to consolidate our positions and focus on our core business (nursing homes and specialised clinics) and to diversify, to develop new forms of care: out-patient hospitalisation, daycare, at-home care and services, assisted living and shared residences for seniors, and nursing homes. A walk hand-in-hand at Maison Eyras Côte Pavée

Building integrated services to fulfil the varying needs of our seniors

DEMOGRAPHIC Elderly people above the Longer life expectancy TRENDS IN age of 65 will account for between 2017 and 2027 EUROPE 1/4 65+ 85+ +100

of the European population +2.5% p.a. +3.0% p.a. x2 in 2027 by 2030

VARYING Medical centres Home care A range of suitable Specialised NEEDS and post-acute services housing solutions facilities care facilities

Assisted living At-home Long-term Specialised facilities and care and care nursing clinics shared housing KORIAN’S services homes SOLUTIONS for seniors LOW DEPENDENCY HIGH

Seniors’ expectations: Digital Financing/price custom solutions to Cutting-edge restrictions encourage independence technology

32 KORIAN • REPORT #2 2019 OUR STRATEGY

Medical progress and technological developments have expanded the palette of support and care solutions available, whether at home or in medical facilities, KORIAN STEPS UP ITS depending on the person’s degree of dependency. DEVELOPMENT IN HOME CARE According to a study by IPSOS*, 68% of people SERVICES BY ACQUIRING surveyed said they would prefer to adapt their home PETIT-FILS so that they could stay there; only 9% of people said The acquisition of Petits-Fils in France is they would like to move into a nursing home. emblematic of our expansion in the home care Korian offers local services, where people need them. segment. These services are an integral part of the general Petit-Fils has 58 agencies in France offering care and services available in each region and are dependent elderly citizens independent living offered in partnership with local healthcare players support services including assistance with meal (GPs, independent specialists, medical and surgical preparation, housecleaning and administrative departments in hospitals and clinics). procedures. Across Europe, we are developing home care services As was the case when Korian bought its to offer seniors and their caregivers diverse solutions majority stake in Âges & Vie in January 2018, adapted to their needs, either before or after a stay in this acquisition is consistent with our strategy of one of our specialised clinics or nursing homes. diversifying and expanding our range of services Out-patient hospitalisation also gives patients under the Korian 2020 plan. the benefit of high-quality medical care and full rehabilitation, while staying in their own homes, with the aim of fostering and extending people’s independence and delaying an eventual move to a facility. In addition, to improve care for the most elderly and vulnerable patients in our nursing homes, we can provide a variety of solutions, through complementary synergies with our specialised clinics, in particular through geriatric care pathways. Our recent acquisition in the Netherlands is a good example of specialisation in extreme dependency. Stepping Stones is a private operator that has developed a unique concept based on small residential care villas adapted to patients suffering from Alzheimer’s disease or cognitive disorders.

It provides personalised care, which is perfectly well- suited to Korian’s “Positive Care” approach, based on the specific needs and wishes of its residents who are mostly highly dependent. Residents are supported until the end of their life thanks to the company’s expertise in palliative care. After buying Ages & Vie in France, we are increasing our foothold in the small senior living communities segment and adapting better to the needs of our customers by expanding our range of specialised care services.

Peeling, frying and laughing together in the Cooking workshop!

* Les personnes âgées en 2030 – Les études de Matières Grises – Septembre 2018.

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Developing innovative and integrated care concepts

Our approach prioritises dialogue with local players to integrate our facilities and services into each region’s local healthcare and support service channels. To achieve this goal, we are developing two types of solutions: • concepts based on innovative and mixed service platforms combining under one roof long-term care units for those losing their autonomy, assisted living facilities, and out-patient care services and centres; • local networks offering local access for long-term care nursing homes to specialised clinics, post- acute and rehabilitation care services and home care services. SENIOR PLAZA BELGIUM: AN INTEGRATED The aim is to switch from MIXED-CARE CONCEPT AT THE HEART OF approaching each activity separately THE CITY CENTRE An example of a multi-purpose, user-centric to an innovative integrated approach building, the Senior Plaza is located right and create a unique and seamless next to the town centre with shops and restaurants nearby, providing a perfect care pathway for each patient and place for people and activities to converge. The ground floor has a lobby that opens resident. out onto the town and features a florist, a These developments combine different public/private restaurant, a hair salon and a doctor’s surgery. funding models and offer personalised solutions to The complex includes a nursing home, an meet the needs of the patient and resident over assisted living facility, healthcare practitioners the long term so that they can be monitored by a (a nutritionist, a psychotherapist, etc.) and a multidisciplinary medical team throughout their care senior daycare centre. pathway.

1 2

Combine integrated Develop platforms under one roof local networks

Post Acute

A FULL PERSPECTIVE ON A MULTIDISCIPLINARY THE CAPACITY TO ADAPT A COMBINATION OF DIFFERENT THE PATIENT’S CONDITION TEAM TO THE PATIENT’S NEEDS MODELS AND A MIX OF PUBLIC OVER THE LONG TERM AND PRIVATE FUNDING

34 KORIAN • REPORT #2 2019 OUR STRATEGY

Making further bolt-on acquisitions in Europe FULFILLING THE VARYING NEEDS In accordance with our strategy of making bolt-on OF OLD AGE acquisitions, expanding our services and diversifying 1 geographically, we are pursuing our development in Europe, with ten transactions in 2018 and five in Q1 2019, with the aim of creating local service and integrated path platforms. Our 2018 results and commitments for the future We have expanded into two new countries, with the acquisitions DIVERSIFY OUR BUSINESS PROFILE of Seniors in Spain and Stepping AND RANGE OF SERVICES Stones in the Netherlands, as we roll JJ58 Petit-Fils agencies and 200,000 hours out our European growth strategy of service each month geared towards establishing local JJTarget: 200 agencies footprints and creating value. to be opened by 2023 JJ20 shared housing The Group also plans to continue increasing its development projects capacity and hopes to have more than 93,000 beds with by 2022 in Europe, spread out as follows: Age & Vie

DEVELOP INNOVATIVE Pipeline Renovation CARE CONCEPTS # beds JJ 114 innovative real End-2022 estate projects in FRANCE 35.372 3.475 Europe, including 30 integrated city-centre GERMANY 31.925 2.715 concepts

BELGIUM 14.838 - CONTINUE MAKING BOLT-ON ITALY 9.235 - ACQUISITIONS IN EUROPE SPAIN 2.085 - JJ3,500 beds opened in 2019 Total 93.455 6.190 JJTarget: 93,000 beds by 2022 JJ29 new facilities JJ€173 million in growth investments including €130 million in bolt-on acquisitions

www.korian.com KORIAN • REPORT #2 2019 35 OUR STRATEGY

A walk in the garden, arm in arm, at Maison Eyras

We aim to step up our efforts to restructure our post-acute and psychiatric care and medical-social ENHANCING OUR facilities in France and offer our POSITIVE IMPACTS patients, residents and employees ON COMMUNITIES AND a care environment complying with the best market standards. 2 THE ENVIRONMENT • Take an active approach to managing the THROUGH OUR REAL Group’s real estate asset portfolio with the aim of expanding and restructuring the network while ESTATE STRATEGY developing a comprehensive and modular range of services to meet the needs of its customers. This approach is backed by our experienced in- house teams and through external partnerships. In France, the Group signed partnerships with Careit, Adopting a real estate strategy that Primonial REIM and the Icade group in 2018 to creates value assist it in developing new projects. • Optimise the Group’s portfolio by selectively Alongside our core business, we have adopted a real increasing its asset ownership rate at a time estate strategy to optimise our investments but also when the conditions for financing property are the locations we choose for our future facilities. Our favourable. The Group’s asset ownership rate at aim is to reinforce our local footprint and create value 31 December 2018 was 19%. from our real estate portfolio. • Continue renegotiating the Group’s leases. This The asset-smart real estate strategy implemented plan, beginning with a portfolio of 150 leases, has since 2017 aims to actively manage the asset base by so far enabled the Group to renegotiate 90 leases, selectively increasing the asset ownership rate, and primarily in France and Germany, and will reduce to reduce rental expenses by renegotiating leases. its rental expenses by more than €5 million in 2019. It has three priorities:

36 KORIAN • REPORT #2 2019 OUR STRATEGY

Together with Korian, we are thinking about what the nursing home of tomorrow We make natural light a centrepiece with ought to look like. wide openings to the outside environment, It is essential to bring life into these enabling residents to follow and identify facilities: first of all social life, with open with the seasons. shared spaces to encourage Our work and our thinking are fully communication – such as restaurants, consistent with Korian’s “Positive Care” cafeterias, day care units – but also private approach and will inspire its future life, with areas designed to respect the construction and renovation projects. person’s need for privacy and autonomy. We took our inspiration from the materials Olivier Saguez, and warm colours found in nature, and designer and founder of Saguez wanted to create homely, inviting and & Partners, a global design agency. comfortable living spaces.

We establish strategic partnerships to benefit from sustainable property expertise and envisage buildings Korian is stepping up its efforts to whose energy consumption, resource requirements and impact on biodiversity are controlled over time restructure its assets with a range and guaranteed by stringent certifications. of innovative real estate concepts For example, the upcoming Ages & Vie shared housing so that it can offer a full range projects in 2019 will be built with wooden framing of assistance services within the according to HEQ (high environmental quality) standards. same area.

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Optimising our existing network

We are actively renovating and restructuring our real estate portfolio through the “Boost” project in order to transform our existing platforms, develop new services and increase our care capacity, particularly in the field of day hospitalisation. This project incorporates the “Positive Care” approach into the construction, renovation and operation of our facilities. The aim is to make care pathways seamless within the healthcare community, for instance with: • key areas of expertise in healthcare and assistance for elderly or vulnerable people • constant attention paid to helping the residents maintain their autonomy and incorporating their choices • efforts to keep living spaces inviting and welcoming In France, the “Boost” project includes plans to renovate 3,000 rooms by the end of 2019 and half of our long-term care nursing homes by 2022. Gardening together at Maison Serena

Reducing our environmental impact

With around 800 sites in Europe, we have a large local and global environmental footprint. We have undertaken an ambitious venture to limit the amounts of water and energy we use and to adopt rational waste management practices. We optimise energy and water consumption and waste management in our facilities in order to keep waste to a minimum. We regularly run awareness campaigns on eco-friendly actions to promote simple yet effective best practices and permanently change the consumption habits of residents, patients, their families and our employees.

With Boost, things are moving in our care homes…

38 KORIAN • REPORT #2 2019 OUR STRATEGY

Contributing to local economic and social development ENHANCING OUR POSITIVE IMPACT ON COMMUNITIES Rooted in their regions and close to local hubs, the 2AND THE ENVIRONMENT Group’s facilities are outwardly open and play a key role in driving local economies, reinforcing social and intergenerational ties, fostering close cooperation with local players, and more. Our 2018 results and We strive to make our purchases locally and are actively working with our partner Sodexo to include commitments for the future increasing amounts of local produce in our food purchases in France. ADOPT A REAL ESTATE STRATEGY We know just how important our facilities are to the THAT CREATES VALUE local environment and community, and we strive J 19% property ownership ratio to create ties between our residents, our activities J and the outside world. We particularly encourage JJReal estate portfolio valued communication and interaction between generations at €1.6 billion (+33% vs. 2017) and build close ties with local schools and non-profit €5 million of savings organisations. JJ generated thanks to renegotiated leases JJ€120 million of investments in renovating and Focus expanding the existing network: renovation of +3,000 beds by 2019

Moulinot, REDUCE OUR ENVIRONMENTAL a local and responsible business FOOTPRINT JJ-9.6% electricity consumption JJ-2.9% gas consumption Moulinot collects the biowaste (MWh per number of beds generated by some of Korian’s facilities in vs. 2016 in Europe) Paris and the Paris region. The food waste is then transported by eco-trucks running on mains natural gas, before being CONTRIBUTE TO LOCAL ECONOMIC transformed into vermicompost and energy. AND SOCIAL DEVELOPMENT This is then used to nourish farm soil or JJ73 %1 of the food we buy is supply biogas and electricity. This is what made or grown2 in France, we call the circular economy. We also offer pathways to integration and JJ98% of bakers are small professional qualifications for the local businesses3 employees of tomorrow who are still some J 97% local distribution3 way away from the job market. J We are very proud to work 1. Of purchasing costs. with Korian! 2. For raw fruit and vegetables. 3. Same administrative region. Stephan Martinez, director of Moulinot.

www.korian.com KORIAN • REPORT #2 2019 39 OUR STRATEGY

BEING CONSTANTLY “Positive Care” means taking care MINDFUL OF THE of others with empathy, while QUALITY OF CARE FOR respecting their choices, dignity 3THE ELDERLY AND and need for privacy. VULNERABLES

Deploying our “Positive Care” approach

Korian has developed a “Positive Care” approach to tailor the care of our residents and patients to their individual abilities, aspirations and the length of their stay. It takes its inspiration from the work of Maria Montessori, who was a famous Italian doctor and psychologist. It is a holistic and positive approach to elderly people, enabling each individual to continue living a fulfilling life, achieving personal development and enjoying their autonomy in a welcoming and friendly environment. We regularly assess each individual, with the support of the family, to evaluate their age-related and/or medical needs; their physical, cognitive, sensory, social and cultural capacities; and their wishes, habits and preferences for their well-being. This assessment helps us to establish a personalised lifestyle and treatment plan with the person, based Relaxation… bathed in pink light in our Snoezelen room… on four aspects:

THE “POSITIVE CARE” APPROACH: OUR STAFF ARE ALWAYS ATTENTIVE TO RESIDENTS, PATIENTS AND THEIR FAMILIES

Leisure Domestic Medical & drug What? Non-drug therapies and entertainment and social activities therapies

Psychologists, Geriatric care physiotherapists, assistants, qualified occupational thera- Recreational nursing assistants, Doctors, nurses, Who? pists, psychothera- therapists psychopathological nursing assistants. pists, psychomotor assistants, Montessori therapists, sports specialists. instructors.

PERSONALISED PLAN How? LIFE PLAN CARE PLAN

40 KORIAN • REPORT #2 2019 OUR STRATEGY

A profusion of colour and light… a unique way of relaxing

The importance of social bonds Non-drug therapies (NDT) We are committed to making sure our residents have We prefer to use non-drug therapies to treat cognitive an active cultural and social life. Every day, our events and functional impairment, mood disorders (anxiety) organisers strive to tackle isolation and give residents and behavioural problems in residents and patients a sense of fulfilment by designing, organising and who have Alzheimer’s or similar conditions. leading enjoyable social activities that fit in with their lifestyle plans and the facility’s goals.

Domestic and social activities Some examples Our teams help our residents spend their days “as if Snoezelen Space they were at home” (cooking, getting the table ready, gardening), the aim being to maintain or restore their A comforting space made up of stimuli and relaxing functional, cognitive and sensorial capabilities and components such as bubble tubes, empathy dolls, enhance their social bonds and well-being. LED wires and comfortable mattresses to help patients and residents relax. Medical supervision The minimal-medication approach is a priority at Korian’s clinics and care facilities. We consider each Flash activity cart patient individually, with one underlying objective: to take their personal needs into account as much Our “emergency cart” for patients or residents in as possible so as to provide them with just the right distress. It contains a range of meditation objects. amount of medication and find the right balance During a prior assessment, we identify the object between efficient treatment and patient well-being. that is most likely to calm each patient during an episode of anxiety. In the event of a panic attack, we know straight away what to offer the person for an immediate calming effect.

Doll therapy At Korian, we all strive to add life to our days, not Our care assistants have been using empathy just days to our lives. “Positive Care” is a new dolls since 2010 to calm elderly people with approach based on empathy and respect neurodegenerative disorders during spells of that considers care as a comprehensive anxiety. Doll therapy channels their distress by whole and puts the patient or resident focusing their attention on a positive object. The at the heart of everything we do. person calms down and communication is restored between the care assistant and the resident without Faye Pires Dolores, speech therapist resorting to sedatives. at the Evere facility in Brussels, Belgium.

www.korian.com KORIAN • REPORT #2 2019 41 OUR STRATEGY

Making quality a priority at all levels

Operational excellence is essential in order to meet the expectations of our customers, provide quality services and thus deliver robust economic and financial performances. Over the past 3 years, our operating model has reached a solid level of maturity that is consistent throughout our different regions and networks. We have achieved this in 4 ways: 1 • By harmonising our standards and processes in a network that is varied by nature, with a particular focus on our IT systems; 2 • By reinforcing all our quality control and performance monitoring systems through routine internal audits carried out in our facilities covering more than 150 topics, but also by providing our employees with the support they need at all times; 3 • By working closely with our suppliers as they contribute to our overall quality of service, with In 2019, we introduced the ISO 9001-2015 standard the introduction of a Group purchasing policy. The throughout the Group, beginning by defining policy now covers 68% of our purchases vs. 40% standards to be applied in all our countries. Our in 2017; entire network is expected to be compliant with 4 • By improving our operational and organisational this standard by 2021. This certification will help us efficiency. This involves pooling and optimising firmly establish our operating model and ensure our our core functions and local support functions. operating performance and quality.

We also use the Ecovadis platform to assess our suppliers’ CSR practices with regard to four aspects: Ethics, Environment, Social, Supply Chain. By the end of December 2018, 150 suppliers had been assessed using the Ecovadis platform, with an average score of 50.8%, which is 8.6 points above the Ecovadis average. Depending on how they fare in different categories, action plans are agreed upon with our suppliers on priority matters.

The highest standards at the Les Trois Tours clinic

42 KORIAN • REPORT #2 2019 OUR STRATEGY

Maintaining dialogue with family members PUTTING ELDERLY AND VULNERABLE PEOPLE AT THE The people closest to a person with an illness, HEART OF EVERYTHING WE DO especially a long-term or progressive condition, are 3 often faced with difficulties and doubts, and are at risk of exhaustion and isolation.

Our unique expertise means we are well placed to Our 2018 results and provide help and practical solutions so that they can improve their skills and the quality of the care commitments for the future they provide in key areas: daily tasks, realising the importance of taking time out to relax, and the correct DEPLOY care practices and actions to adopt when dealing with OUR “POSITIVE CARE” APPROACH cognitive disorders. JJWe applied non-drug We are keen to involve families in therapies in more than 1/3 of our long-term care the day-to-day lives of our patients nursing homes and residents so as to encourage in Europe in 2018 family ties, crucial to their well- JJTarget: 72% in 2019 being and the quality of care they overall, 100% in France receive. JJMore than 23,700 hours of training in Positive Korian’s psychologists and employees are always • in France in 2018 happy to chat with family caregivers, explain things Care and teach them caregiving skills; • We regularly hold “Caregiver cafés” or “Alzheimer MAKE QUALITY cafés” at our facilities to answer any questions A PRIORITY ACROSS THE BOARD families might have; JJQuality audits: 96.4% • We give family caregivers an opportunity to make of the facilities audited a short stay at our facilities, offering them some respite and thus warding off exhaustion. received an A score (64.3%)** or B score JJEcovadis audited 150 suppliers accounting for 77% of the Group’s procurements

MAINTAIN DIALOGUE WITH FAMILY MEMBERS JJCustomer satisfaction rate in 2018 at Group level: 96%

The sound of music at the Les Anabelles facility

www.korian.com KORIAN • REPORT #2 2019 43 OUR STRATEGY

Shared discussion and teamwork

CARING 4FOR CARERS

Attracting new talents The Group’s employees are the The healthcare and service sector needs to hire new talent to support its growth. We plan to recruit at least essential building blocks of our 10,000 new employees each year over the next five performance. years. We continually invest in our To do this, we have committed to an active approach to 52,000 employees to improve their professional promotion. Our employer brand strategy, which is particularly active on social media in Germany, skills, know-how and well-being gives us recognition as a model employer in the sector, while also preparing for our future both for students and young trainees and for more experienced professionals. staff requirements. We promote apprenticeships and therefore establish long-term partnerships for this purpose with local healthcare schools. We take on interims in our facilities so that they can learn more about geriatric care and about our innovative practices. Our teams include 1,500 apprentices in Germany and 500 in France.

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THE FIRST APPRENTICESHIP TRAINING CENTRE FOR THE COOKING AND CATERING TRADES IS LAUNCHED Korian, alongside Adecco, Accor and Sodexo, signed an agreement in March 2019 to set up The Korian group is a growing group a joint Apprenticeship Training Centre (CFA) and we need skills. Apprenticeships for the cooking and catering trades. The event and training are at the heart of our was attended by Muriel Pénicaud, Minister of challenges. The CFA is a solution to Labour. make our business known and attract This partnership involves the cooperation talent. of four leading groups from four different industries and will enable apprentices to take Rémi Boyer advantage of a broad range of skills but also Korian Group Human Resources to follow training programmes culminating in and CSR Director. a professional qualification.

Developing our teams’ skills We are pursuing this commitment We set up the Korian Academy 16 years ago to offer in 2019 with the non-negotiable a broad range of training programmes – including target of providing training for all e-learning sessions – to all our employees in Europe, irrespective of their occupation. 100% of the Group’s employees and We provide training programmes offering the prospect greater efforts to promote of promotion: expertise in geriatric care, programmes apprenticeships in care and culminating in diplomas and certifications (more than assistance services. 300 in France), Validation of Acquired Experience (VAE), managerial programmes, etc. At Korian, a nursing assistant can become a nurse, a nurse can become a head or coordinating nurse, a coordinating nurse can become a healthcare manager or facility director. We have introduced a 3-year “Korian Campus” training programme, which improves the hands-on leadership skills of our directors and facility managers while promoting a shared management style based on team cohesion and the Group’s values. Our goal is to make it easier for our teams to work autonomously, communicate with each other, cooperate and draw on our collective intelligence to accomplish our goals.

22 November 2018 - Congratulations to all the VAE (Validation of Acquired Experience) graduates!

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Enhancing quality of life in the workplace for our employees Focus The safety, health and well-being of employees are essential to our goal to provide quality care and support to the elderly. We pay particularly close attention to preventing musculoskeletal disorders, evaluating Helpline occupational risks and managing psychosocial risks. In 2017, we signed the sector’s first collective Quality of All employees are likely to go through Life At Work agreement in France including practical measures to reduce risks when handling and caring for a difficult period in their work or patients and residents. at home at some point in their life. In view of the emotional burden of In France, we set up a Department of staff specifically working in our industry, and to prevent dedicated to risk prevention in 2019, with the aim of analysing the causes of work-related and occupational and reduce psychological risk among illnesses and helping facilities take concrete measures our employees, we have set up a to improve risk prevention. We also reiterate our confidential telephone helpline for all determination to improve issues pertaining to health our employees, which is available 24/7. and safety in the workplace, which are far from satisfactory across the industry. The aim is to give our employees the Every two years, we conduct an in-house satisfaction opportunity to talk to qualified and survey among employees, called “Kommunity”. The experienced psychologists, receive extremely positive survey results show that our teams support and put into perspective take pride in their work and are increasingly engaged, any difficult situations they may be but they also reveal areas that could improve their well- experiencing or observing. A quarterly being and quality of life in the workplace. The next and annual review is conducted to survey will take place in May 2019. anticipate any potential needs and In our line of work, which is particularly exposed work out what needs to be done to to these issues, maintaining good quality labour improve well-being in the workplace. relations also means being attentive to our teams and providing them with the ongoing psychological and We now also provide our employees, material support they need. In France, there is now an who are mainly women, with an independent body that organises group sessions during emergency childcare solution. which employees can voluntarily express their views about their occupations and day-to-day activities.

Enjoying each other’s company…

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Committed to promoting diversity and inclusion PRENDRE SOIN DE CEUX QUI Our society has undergone a thorough PRENNENT SOIN transformation across Europe. Our Group 4 mirrors our society and its 52,000 employees, 82% of whom are women, are of 120 different nationalities. Our 2018 results and We consider diversity to be a source of social and personal enrichment that encourages us commitments for the future every day to find ways to promote an ever more inclusive and welcoming organisation. Our success depends on the quality of our ATTRACT NEW TALENT services, and this in turn depends entirely on 11,000 new hires in 2018 our expertise, engagement, professionalism and JJ ability to work well together. JJ2,000 apprentices In France, the “Mission Handicap” set up in 2014 in Europe provides individual support to encourage the JJ41% of employees aged integration and retention of disabled workers. over 46, posing a real It covers training, work reviews, adapted job challenge in an already duties, access to equipment and tools to suit their needs, etc. understaffed sector

DEVELOP OUR TEAMS’ SKILLS TO FULFIL THEIR NEEDS JJOver 750,000 hours of training every year in Europe; that’s an average of 15 hours of training for every employee per year JJ100% of facility directors in France received training

ENHANCE QUALITY OF LIFE IN THE WORKPLACE FOR OUR EMPLOYEES JJResults of the Kommunity survey: • 77% of employees feel committed (+9 points) Working at Korian is a vocation • 94% of employees are proud of their work Our success depends on the • More than 2,200 action plans to improve quality quality of our services, and of life in the workplace in this in turn depends entirely Europe on our expertise, engagement, JJ1,495 disabled worker FTEs professionalism and ability in Europe in 2018, 27.5% to work well together. more than in 2016

www.korian.com KORIAN • REPORT #2 2019 47 OUR STRATEGY

Clicking together at Maison La Pompignane PROMOTING DIGITAL INNOVATION AND RESEARCH

5 The purpose of Korian Solutions is three-fold: • Expand our range of home care services in open Making digital technology central partnerships with other sector operators in order to our transformation to meet all the needs of dependent and elderly or vulnerable people; Digital innovation is a crucial factor helping us to • Improve the quality of service offered to our improve our quality of service and the quality of life patients and residents by optimising the operational of our patients and residents. In 2018 we set up an in- efficiency of our staff, for instance by managing staff house digital agency – “Korian Solutions” – with the cover or recording treatments provided; aim of speeding up the Group’s digital transformation. • Encourage communication between elderly people and their family members through social media and new digital tools. By structuring our relationships within our ecosystem and opening up our network of facilities to digital SOLUTIONS innovation, we are consolidating our entrepreneurial culture and our community footprint. Korian Solutions is enabling us to Korian Solutions helps us achieve this by joining forces step up our digital transformation with well-known partners – such as Doctolib or groups like Pharmagest and Patientys that are rolling out new and expand our range of home care modulable home care solutions – but also innovative services. start-ups such as medGo and Familéo.

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KORIAN CASTEL VOLTAIRE: A NEW-GENERATION DIGITAL NURSING HOME Korian Castel Voltaire is located in Châtillon (France). The facility consists of a connected and innovative long-term care nursing home linked up to an assisted living facility. The new technologies that exist at the heart of this unique facility are actively involved in rolling out the Positive Care approach and are making practical improvements in the well-being, safety and comfort of our residents, in their communication with their families and in the quality of life in the workplace for our employees: • immersive displays to enable residents to “travel” each day without even having to move, • modulable lighting depending on the biorhythm of our residents, • rooms equipped with connected boxes that control the temperature, lighting and blinds but that can also sense if a resident has fallen over, • a Connected Services box and dedicated smartphone application to encourage communication with family members.

In France, we have created what we call the Parcours It is innovative because it combines three elements: Objectif Patient (POP) BPCO, an innovative and • the intervention of a coordinating nurse within the coordinated care pathway for those suffering from clinic; COPD (Chronic Obstructive Pulmonary Disease). • a personalised and secure digital platform for sharing The purpose of this comprehensive and innovative medical and psychological/social information that we assistance solution is to improve the quality of life of have developed alongside the Move In Med start-up; our patients. • home care services specifically organised on the basis of a personalised programme of daily physical and breathing exercises.

HEALTHCARE KORIAN PROFESSIONAL FACILITY

DOCTOR PATIENTS AND CARE STAFF

www.korian.com KORIAN • REPORT #2 2019 49 OUR STRATEGY

Research to strengthen our medical A FEW WORDS FROM expertise The Korian Foundation for Ageing Well acts as an innovation laboratory that allows us to actively support scientific research. We are at the heart of an AUDE LETTY, ecosystem of partners that are inventing solutions and Managing Director of the Korian Foundation innovations in our professions. for Ageing Well In close cooperation with world-class research The Korian Foundation, a partner in the institutes and universities, we take part in general- public consultation on “how best to look interest research programmes whose results are after our elderly?” published openly and made available to the entire scientific community and specialists in ageing. “The Korian Foundation is very proud to be a partner in the public consultation on ‘How best to look after our elderly?’ Changing the way society views old age organised by Make.org. The Korian Foundation has a resolutely outward focus The consultation involved 415,000 on its environment and ecosystem, and regularly holds people, 18,300 proposals and 1.7 million debates streamed live on Facebook and theme-based votes. It was a truly popular and civic roundtables in the regions. These debates and the success, and the biggest public scientific results obtained from the extensive research consultation ever held on the subject it conducts enable the Korian Foundation to actively of elderly people. contribute to a broader debate on the issues of old age. The conclusions obtained from the Every 2 years, the Korian Foundation also conducts consultation confirm that there is a need a large study on society in the form of a European ageing well Barometer in conjunction with Stéphane for everyone involved in the sector to Hugon, a sociologist, and the Ipsos Institute. In 2018, a commit to assisting elderly people and representative panel of 8,000 people from four European giving them a role to play in our society. countries (France, Germany, Italy and Belgium) were The Korian Foundation will make use of interviewed for a survey on the recognition and value the results of its studies and public of elderly people’s contribution to society. The results consultations in the regions to drive the of this survey show that the elderly are increasingly transformation workshops that are questioning their role in society and also how essential digital technology is in helping them feel useful and going to be held in 2019 to find practical independent. solutions to the expectations and concerns expressed by society’s members during this consultation.”

“The elderly, officially recognised as serving the public good”, a Korian Foundation debate held in September 2018.

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PROMOTING INNOVATION 5 AND INNOVATIVE CULTURE Focus Street clothing in nursing Our 2018 results and homes helps to improve the commitments for the future quality of communication between care assistants A CENTRAL ROLE FOR DIGITAL TECHNOLOGY and residents IN OUR TRANSFORMATION

The “Korian Generations” A study called STRECLO* was carried out on the JJ initiative of the Korian Foundation for Ageing Well social media app in partnership with the Psychology of Ageing • Korian Generations app and Adaptation Laboratory at François Rabelais used in 100% of our facilities University (Tours) to assess how the clothing worn in France by care assistants (street clothing vs. uniform) affects residents with neurocognitive disorders. • 1 million logins and over sent The results show that removing the lab coat 100,000 messages from interactions reduces the “institutional” since the app came out distance between residents and caregivers and in 2017 helps residents feel more “at home” and have conversations that are more personal and less RESEARCH TO CONSOLIDATE health related. OUR MEDICAL EXPERTISE The study is part of Korian’s determination to identify all the factors that will help it roll out its JJ156 156 facilities Positive Care approach, which involves changing and 820 employees the way care assistants approach and perceive the have taken part people in their care. Operational recommendations in research projects are in the process of being drafted to help Korian’s since 2013 in France facilities bring this practice on board. 44 scientific articles * Abbreviation of STREET CLOTHES JJ

CHANGE SOCIETY’S PERCEPTION OF ELDERLY PEOPLE JJ2,261 participants at Korian Foundation debates and roundtables since September 2017 JJ3,636 logins to Korian Foundation Facebook Live JJ4,000 subscribers to the Korian Foundation newsletter

www.korian.com KORIAN • REPORT #2 2019 51

OUR GOALS FOR THE FUTURE

We formalized 5 key commitments for the future, designed to transform even more our performance into a significant impact on society and on our audiences.

www.korian.com KORIAN • REPORT #2 2019 53 OUR GOALS FOR THE FUTURE

Korian has officially undertaken five key commitments for the future that are aligned with its mission and embedded in its strategy. These commitments encompass all Korian divisions and employees and aim to transform our performance even further with a strong impact on society and our audiences. In this context, we have set out to improve our indicators so that they focus on the impact and results our actions have rather than the resources provided.

Our indicators for creating shared value

FULFILLING THE VARYING Diversify our business profile Develop Innovative care Continue making bolt-on ENSURING THE NEEDS OF OUR SENIORS and range of services concepts acquisitions in Europe SUSTAINABILITY AND THE CONDITIONS OF OUR 1 200 Petit-Fils agencies to be opened by 2023 114 innovative real estate projects Target: 93,000 beds opened by 2022 VALUE CREATION FOR ALL in Europe, including 30 integrated 20 shared housing development projects city-centre concepts €173 million in growth investment with Ages & Vie (+31% since 2017)

ENHANCING OUR POSITIVE IMPACT Adopt a real estate strategy Reduce our environmental Contribute to local economic OFFERING OUR PATIENTS, ON COMMUNITIES that creates value footprint and social development RESIDENTS AND AND THE ENVIRONMENT EMPLOYEES A CARE 2 19% property ownership ratio –9,6% electricity consumption 73% of the food we buy is made or ENVIRONMENT COMPLYING grown in France €120 million of investments in renovating and –2,9% gas consumption WITH THE BEST MARKET expanding the existing network (+3,000 beds by STANDARDS 2019) (MWh per number of beds vs. 2016 in Europe)

PUTTING ELDERLY Deploy our “positive care” approach Make quality a priority Maintain dialogue MAINTAINING THE AUTONOMY AND POWER AND VULNERABLE PEOPLE Target: deployed in 72% of our nursing homes by at all levels with family members AT THE HEART OF EVERYTHING 2019 including 100% in France OF CHOICE OF ELDERLY 3 Quality audits: 96,4% of facilities Customer satisfaction rate in 2018 AND VULNERABLE PEOPLE WE DO audited received an A (64,3%) at Group level: 96% or B score

CARING Attract new talent Develop our team’s skills Enhance quality of life in the ENHANCING EMPLOYEE ENGAGEMENT AND WELL- FOR CARERS 11,000 new hires in 2018 to fulfil their needs work place for our employees BEING AT WORK 4 Over 750,000 hours of training 77% of employees feel committed 2,000 apprentices in Europe every year (+ 25% since 2017), (+9 points) that’s an average of 15 hours of training for every employee per 94% of employees feel proud year of their work

PROMOTING INNOVATION A central role for digital technology Research to consolidate Change society’s perception MOVING WITH CHANGES AND INNOVATIVE CULTURE in our transformation our medical expertise of elderly people TO SOCIETY AND SCIENTIFIC PROGRESS TO 5 The “Korian Generations” social media app 44 scientific articles since 2013 2,261 participants at Korian CATER EMERGING NEEDS used in 100% of facilities in France Foundation debates and roundtables since September 2017

A network of CSR Officers regularly monitors and oversees the performance of extra-financial indicators at Group level and ensures that best practices are shared and harmonised across countries.

54 KORIAN • REPORT #2 2019 Our ambition for the future

www.korian.com KORIAN • REPORT #2 2019 55 ETHICS CHARTER OF KORIAN

// KORIAN GROUP GROUP ETHICS CHARTER

First and foremost, our values and our missions require us to act with integrity, honesty and transparency. That’s why Korian adopted an Ethics Charter in 2018 which sets out the rules and principles of shared actions that apply not only to all the Group’s employees, but also all of our shareholders, customers, suppliers, subcontractors and stakeholders. Among other things, this charter requires us to comply with laws and regulations, tackle corruption, respect human rights and people’s dignity, and maintain confidentiality. Employees can use a warning system to report any situations they feel may be in breach of the ethical principals outlined in the Charter.

The Ethics Charter of Korian is available on line at www.korian.com FIND OUR VIDEOS AND PUBLICATIONS AT: KORIAN.COM

ACCOMPAGNER NOS AÎNÉS, DES MÉTIERS PAS COMME LES AUTRES

TOULOUSE

1ÈRE PIERRE DE LA CLINIQUE DE SOINS DE SUITE ET RÉADAPTATION « ESTELA »

Juin 2019 10 Novembre 2017

EXE_DP-1re pierre Estela-Toulouse.indd 1 06/11/2017 20:30 Des métiers pas La 1ère pierre Engagés face au défi de Troyes, Les Vergers comme les autres de la clinique Estela la maladie d’Alzheimer Cliniques de soins de suite et réadaptation laboratoires d’innovations

IMMOBILIER

L’IMMOBILIER AU SERVICE DE LA SANTÉ ET DU BIEN-ÊTRE

SEPTEMBRE 2018

Plaisir, nutrition, Nous sommes tous Registration L’immobilier au convivialité ; Positive Care ! Document service de la santé ingrédients d’une et du bien-être restauration santé

vivre Textes de Cécile Coumau Photographies de Céline Gaille et Fabrice rondon

« Les gens ne savent pas qu’il y a de la vie ici. »

Ces quelques mots de Nathalie, aide-soignante dans une maison de retraite à Paris, résument parfaitement les journées passées au sein de ses lieux trop longtemps assimilés à des mouroirs. Car il s’agit bien ici de continuer à vivre, autrement certes, mais vivre tout de même. Comment ? En tissant des liens : des liens à la vie avec les souvenirs ô combien précieux, des liens aux autres : ©Céline : Gaille. – avec la famille et les amis, évidemment –, mais aussi en créant de nouvelles attaches, et ce, en dépit de l’âge et du passé de chacun.

« Les résidents », comme on les appelle, se sont confiés sans langue de bois. Ils ont livré leurs vivre souvenirs, leurs anecdotes, leurs difficultés à affronter la vieillesse, leur perte d’autonomie mais aussi leurs joies, leurs petits plaisirs. vivre En face, « le personnel » trouve les bons gestes, les bons mots, les justes regards. Aides-soignants, kinésithérapeutes, animateurs ou psychologues, ils racontent avec authenticité leur quotidien dédié au service des aînés.

Ici on entend leurs voix, on découvre leurs visages. Design & Graphisme : Fabrice Rondon. Photographie couverture de Ce livre s’adresse, en particulier, aux familles et aux soignants, et, en général, à tout le monde puisque nous sommes tous incontestablement concernés par ce sujet, le bien vieillir.

18,90 € Diffusion Volumen www.ateliershenrydougier.com ISBN : 979-10-31204-09-3

COUV_VIVRE_260x240_DOS_8MM.indd 1 30/11/2017 19:31

VIVRE Published by the Korian NOUS NOUS NOUS Foundation in partnership (Les anciens) (Les anciens) (Les centenaires) with Les Ateliers Béziers Marseille Henry Dougier

maisondesmetiers.com An immersive digital space to discover our professions Keep up with the Korian group’s news on: www.presse-korian.com/en www.korian.com @korian

Press contact: [email protected]

Korian - Group Communication Department - July 2019 Design & publishing:

This paper comes from sustainably managed forests. www.korian.com