MAJ: Management report of the Board of Directors (annual accounts as of December 31, 2020)

M.A.J.

A French limited company (société anonyme) with share capital of €142,515,408 31 Chemin Latéral au Chemin de Fer, 93500 Pantin, France

775 733 835 R.C.S. BOBIGNY

MANAGEMENT REPORT OF THE BOARD OF DIRECTORS

TO THE ORDINARY GENERAL MEETING OF JUNE 25, 2021

We have invited you to this Ordinary General Meeting for the purpose of submitting for your review and approval the financial statements for the 12-month financial year beginning January 1 and ending on December 31, 2020.

We inform you that no change in the presentation method of the financial statements was made during the financial year.

FINANCIAL POSITION OF THE COMPANY

M.A.J. is the main operating company for the multi-service group ELIS, a leader in the rental, laundry and maintenance of textile, hygiene and well-being items (HWB) in France, Europe and Latin America. The Group itself or its subsidiaries directly serve hundreds of thousands of customers of all sizes in France, belonging to various professional customer segments: Hospitality, Healthcare, Industry, Trade and Services.

In principle, the wide diversity of its customers and business sectors helps to mitigate how exposed the Company's activities are to the economic environment. However, despite the strong start, 2020 was inevitably impacted by the Covid-19 global crisis and the unprecedented financial consequences it caused. The general lockdown throughout France beginning in March 2020 brought the country's economy to a sudden standstill.

The hospitality industry is hurting given the hotel closures during the first lockdown in addition to the bars and restaurants during the first lockdown and since November 2020, not to mention the ski resorts. Some of the Company's specialized plants in this sector had to be fully or partially shuttered.

Business for Healthcare customers (especially care homes) grew on the other hand in flat linen and clothing (medical gowns) given the high demand.

The clothing industry was less impacted thanks primarily to customers in the pharmaceutical and agrifood industries. New customers along with business development despite the crisis helped to maintain this market.

The Sanitary market was dominated by cleaning service companies and facilities management companies, with strong pressure on prices and direct business with customers in decline. Textile bobbin activity was down sharply in favor of new products (sanitizer gels and masks).

Beverages and Floor Protection were off given the health situation (protective measures required in companies and business closures). Medical waste management made sharp gains yet remains marginal.

The Pest Control business continues to expand given the need to combat parasites during the pandemic (rodents, bedbugs, mosquitos) and to disinfect Covid-19-related facilities.

The steep decline in revenue was offset by significant cost cutting (furlough scheme, moderation in linen purchasing, preventive equipment maintenance during plant closures).

The Company took measures beginning in March 2020 to protect first and foremost the health of its employees and the people they come into contact with, as well as its cash position and profitability.

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TRANSACTIONS RELATING TO THE INCOME STATEMENT

The key figures for the financial year ended 12/31/2020, compared to those for the financial year ended 12/31/2019, are as follows:

(in thousands of euros)	12/31/2019	as a %	12/31/2020	as a %
		(12 months)		(12 months)
Revenue excl. tax		736,718	100.00	587,139	100.00
(including other income)
Depreciation	and	112,583	15.28	109,381	18.63
amortization
Personnel costs		239,048	32.45	189,501	32.28
Operating income		129,780	17.62	71,683
Net financial income		56,050	7.61	(114,146)	(19.44)
O/w indiv. financial income	2,135	0.29	856	n.s.
Net non-recurring income		(4.122)	(0.56)	5,267	0.90
Employee profit-sharing		6,705	0.91	2,425	0.41
Income tax		34,503	4.68	16,940	2.88
Net income (loss)		140,500	19.07	(56,561)	(9.63)
Gross cash		27,917	37.89	52,820	9.00
flow
Cash flow		190,641	25.88	141,186	24.04
Added value		469,714	63.76	325,774	55.48

Specifically against the backdrop of the pandemic, revenue (including other income) from the financial year ended 12/31/2020 posted a decline of 20.3% (€587,139,000 compared to €736,718,000 for the financial year ended 12/31/2019).

The operating income resulted in a net income of €71,683,000 against €129,780,000 as at 12/31/2019. With revenue in decline, operational measures were quickly instituted to confront the extraordinary situation and public measures were implemented (compensation for furloughed staff, in particular). These measures significantly offset the lower revenue; operating expenses represent 91.23% of revenue as at 12/31/2020 (compared to 84.84% as at 12/31/2019).

The average workforce as at 12/31/2020 was 6,700 persons, distributed over 71 centers, compared to 7,432 at 12/31/2019 over 74 centers.

The profit sharing premium for productivity over the financial year (excluding general social contribution [C.S.G.] and social debt repayment contribution [C.R.D.S.]) stood at €4,277,000. It was €5,313,000 on 12/31/2019.

Financial transactions

Financial incomespecifically includes:

• the income from subsidiaries and other equity investments (€856,000),
• the interest received on advances granted within the framework of the cash pooling agreement
  (€1,042,000),
• provision reversals for impairment of equity securities in the subsidiaries Le Jacquard Français,
  Elis Prévention Nuisibles and Elis Italia (€9,950,000),
• other financial income (income from receivables) for €20,000.

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Financial expensesspecifically include:

• interest paid for advances granted by Elis SA and subsidiaries in connection with cash pooling and current account agreements (€5,802,000) in addition to intra-Group loans with Elis SA (€12,580,000),
• additions to provisions for impairment of subsidiaries' securities (€107,237,000), and specifically Elis Colombia (+€1,067,000), Atmosfera (+€105,559,000), and Blanchisserie Blésoise (+€611,000),
• negative foreign exchange losses (€1,690,000).

Ultimately, the net financial expense as at 12/31/2020 was a loss of €114,146,000 compared to an income of €56,050,000 as at 12/31/2019.

Extraordinary transactions

Extraordinary income resulted in a net income of €5,267,000 against a loss of €4,122,000 as of 12/31/2019. It specifically includes:

• movements (reversals and allocations) in the provision for accelerated amortizations,
• movements (income and NBV) in sales of assets,
• costs related to restructuring and site closures, or environmental risks,
• actuarial spreads on employee benefit obligations,
• additional losses directly related to the Covid-19 pandemic.

Net profit, after creating a provision for:
- employee profit-sharing	€2,425,000
- income tax	€16,940,000

resulted in a loss of €56,561,000. As of 12/31/2019, net income was €140,500,000.

TRANSACTIONS CONCERNING THE BALANCE SHEET

The transactions concerning the balance sheet during the last financial year are the following:

1. Property, plant and equipment: The new Saint-Geours plant (Landes) opened in November 2020.
2. The gross value of investment securitiesamounted to €1,497,708,000 against €1,486,667,000 as at
   12/31/2019. Transactions during the financial year related exclusively to the subscription for capital increases at the subsidiaries Elis Colombia (+€1.9 million), Elis Chile (+€1 million) and Le Jacquard Français (+€8.7 million),
3. Other receivables: The advances granted by M.A.J. within the framework of the cash pooling agreements at the end of the financial year stood at €84,839,000. Please note the following subsidiaries were granted advances: Pierrette-TBA (€22,201,000), SPCI (€36,096,000), Elis Manomatic (€12,988,000) and Elis Belgium (€4,705,000).
4. The provisions for risks, totaling €15,434,000 at the end of the financial year, include, in particular, a provision linked to environmental risks (€12,214,000), a provision for litigation (€1,349,000), and a provision for long-service commitments (€1,695,000).
5. Provision for post-employmentbenefits: This stood at €19,484,000 against €19,424,000 as at
   12/31/2019.
6. Payables and other loans:

The Company uses the current account advance granted by the parent company ELIS, the cap on which currently stands at €1,000,000,000, and the intra-Group loan of €87,753,000 granted in 2015 and of €385,670,000 in 2019 to finance the development of its activities and external growth.

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At the end of the financial year, Group debts (cash pool) amounted to €506,819,000, of which €362,387,000 were for the current account advance with ELIS SA.

Ultimately, the debts came to a total of €1,170,110,000 as at 12/31/2020, of which €688,000 was within one year. They were €1,217,728,000 as at 12/31/2019.

NOTE REGARDING THE USE OF FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

The company has adopted ANC Regulation no. 2015-05on forward financial instruments and hedging transactions. The hedge accounting principles are mandatory where hedging is identified in the management and documented. The effects of the financial instruments used by the company to hedge and manage its foreign exchange, interest rate and commodity risks are recognized in the income statement in parallel to those of the hedged item. Impairments or provisions for risks relating to a hedged item take into account the effects of the hedge. If the hedged item disappears, the hedging instrument is treated as a separate open position, the hedge is settled and the losses or gains are recognized in the income statement.

As at December 31, 2020, the company does not hold any derivative instruments not designated as hedged (no separate open positions).

DESCRIPTION OF THE MAIN RISKS AND UNCERTAINTIES

The Company has reviewed the risks that could potentially have a significant adverse effect on its activity, its financial situation or its profits (or on its ability to meet its objectives), and it is of the view that there are no significant risks other than those mentioned in Chapter 3 and 4 of the 2020 Registration Document of the listed parent company ELIS SA, available on the website: https://fr.elis.com/fr/groupe/relations-investisseurs.

The main risks to which the Group (and thus also M.A.J.) believes it is exposed are strategic risks, risks related to operational activities, financial risks, legal risks, regulatory risks, tax risks and non- financial risks (social and environmental).

ACTIVITIES OF SUBSIDIARIES AND EQUITY INVESTMENTS

The company directly or indirectly controls subsidiaries and equity investments in Europe (including France) and in Latin America, whose activity for the majority of them is identical to that of the company (rental, laundry and maintenance services). Other subsidiaries ("Manufacturing Entities") have a manufacturing business (Le Jacquard Français and Kennedy Hygiene Products Ltd).

All financial data for these subsidiaries and equity investments is consolidated in the ELIS SA holding and, for specific details, reference is made in the 2020 Registration Document of the company ELIS SA, available on the website: https://fr.elis.com/fr/groupe/relations-investisseurs.

A - Comments on the business of the company MAJ, its subsidiaries and the Group

The Group, including the company MAJ provides a broad and integrated range of rental, laundry and maintenance services to a diversified base of more than 400,000 customers across, among others, the regions described below (excluding Manufacturing Entities):

With regard to MAJ and its subsidiaries in particular (MAJ scope of consolidation), these geographic areas are consolidated in the breakdown of revenue for the four operating segments: France, (Central and Southern) Europe, Latin America and Manufacturing Entities.

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The Covid-19 pandemic in Europe, which erupted in Q1 2020 and is still ongoing in 2021 along with various lockdown measures and business restrictions imposed on both the public and companies, had a significant impact on the business of many of the Company's subsidiaries and other equity investments. Depending on their business sectors, certain customers of its subsidiaries and holdings have seen their activities suspended temporarily, severely affected or, conversely, strongly supported.

Breakdown of the 2020 consolidated EBITDA and revenue of MAJ and its subsidiaries by geographic area:

		2019			2020
In € million	REVENUE	as a %	EBITDA	REVENUE	as a %	EBITDA
France	1065.7	44.8	406.1	867.8	42.8	329.9
Southern and Central	1029.2	43.3	317.7	902.4	44.5	276.7
Europe1
Latin America	262.5	11.0	79.7	213.4	10.5	72.0
Manufacturing	21.4	0.9	(10.2)	43.5	2.1	(4.3)
Entities and holdings
Total MAJ scope of	2378.8	100.00		2027.1	100.0
consolidation

1. Business activity in the rental and cleaning of textile and hygiene items and pest control services

France

In France, the Group (including the Company but excluding Manufacturing Entities) posted consolidated 2020 revenue of €867.8 million, down 18.6% compared to 2019 and representing 42.8% of consolidated revenue for MAJ (compared to 44.8% the previous year).

In France, the Group serves customers in four main sectors: Hospitality, Healthcare, Industry, and Trade and Services.

The sharp slowdown in Hospitality (which in 2019 accounted for approximately one-third of the country's revenue) has, despite a good summer season, weighed on business since the start of the crisis. Following a widespread decline in activity in the second quarter, business recovered in Industry, Healthcare and Trade & Services, with positive trends in Workwear and Hygiene and Well-being.

The Group continues to post growth in France in the Pest Control market in the Paris region through the acquisition of Cap Services in 2020 and Mondial Hygiène in early 2021.

Europe (excluding France)

In Europe, the Group is divided into 4 areas: UK - Ireland, Central Europe, Scandinavia and Eastern Europe and Southern Europe, and provides services to customers in all segments. Consolidated Group revenue in Europe (excluding France) represents 59.9%.

More specifically, the activities of the Company's subsidiaries are located in Central Europe and Southern Europe, and represent 44.5% of the turnover of the MAJ scope of consolidation.

In 2020, Group revenue from Central Europe was €704.2 million (compared to €731 million the previous year), representing 25% of consolidated revenue. Pro forma organic growth was down 6.0% in Central Europe. The Group provides its services in Central Europe to customers in the Industry, Trade and Services and Healthcare sectors in particular. In this region, where the Group has little

1 Figures for Central Europe include countries and regions outside the MAJ scope (e.g. Berendsen), such as Poland, parts of Germany and the Netherlands.