Korian : Universal Registration Document 2020

UNIVERSAL

REGISTRATION

DOCUMENT

Annual Financial Report and Integrated Report

2020

Contents

1	Korian, the leading European
	care services group for elderly
	and fragile people	5
	Presentation of the Korian Group	7
	Korian faces Covid-19 pandemic	29
	Our ecosystem and ESG challenges	33
	Our strategy	41
	Governance, internal control and risk
	management	51
	Our business model	57
2	Risk factors	61
	2.1	Operational risks	63
	2.2	Strategic risks	68
	2.3	Legal, ethical and regulatory risks	69
	2.4	Economic and financial risks	71
	2.5	Internal control and risk
		management	74
3	Environmental, social and
corporate governance	81
3.1	Deploying an ESG strategy that
		advances the Group's social mission	84

3.2 Providing care excellence whilst

	ensuring dignity and choice	101
3.3	Be the employer of choice	111
3.4	Contributing to finding innovative
	solutions for a more inclusive society	135

3.5 Being a committed and responsible

local partner

143

3.6 Reducing our environmental

footprint

148

3.7 Adopting ethical and responsible

practices	158
3.8 Note on methodology	168

3.9 Independent third-party report on the consolidated non-financial

performance statement included
in the management report	171

5	Activities and performance analysis	249
5.1	2020 highlights	250
5.2	Activity overview	252
	5.3	Review of consolidated results
		and financial position
		at 31 December 2020	254
	5.4	Proposed allocation of profit and
		dividend payment	261
	5.5	Legal and arbitration proceedings	262
	5.6	Significant changes in the Group's
		financial position since the end of
		the last financial year	262
	5.7	Material events since the year-end	262
	5.8	Foreseeable changes - outlook	264

	6	Financial statements for the year
	ended 31 December 2020	265
	6.1	Consolidated financial statements
		for the year ended
			31 December 2020	266
		6.2	Statutory Auditors' report
			on the consolidated financial
			statements	321
		6.3	Annual financial statements
			at 31 December 2020	325
		6.4	Statutory Auditors' report
			on the annual financial statements	343
		6.5	Statutory Auditors' special report on
			related-party agreements	347
	7	Information on the Company, share
		capital and ownership	349
		7.1	Information on the company	350
		7.2	Information on the share capital	354
		7.3	Shareholders	363
		7.4	Information on the Korian share	366
		7.5	Conditions for shareholder
			participation in General Meetings	368

						8	Further information	369
4	Corporate governance	177
		8.1	Person responsible for the universal
4.1	The Company's administrative
				registration document	370
	and management bodies	180			8.2	Entities responsible for auditing
	4.2	Compensation	223					the financial statements	371
							8.3	Glossary	372
							8.4	Cross-reference tables	374

UNIVERSAL

REGISTRATION

DOCUMENT

Annual Financial Report and Integrated Report

2020

The universal registration document was filed on 20 April 2021 with the AMF in its capacity

as the competent authority under European Regulation (EU) 2017/1129, without any prior approval

pursuant to Article 9 of said regulation.

The universal registration document may be used for the purpose of a public offering of financial securities or the admission of financial securities to trading on a regulated market if it is supplemented by a prospectus and, where applicable, a summary and all the amendments made to the universal registration document. The whole thus formed is approved by the AMF in accordance with European Regulation (EU) 2017/1129.

The universal registration document may be viewed free of charge upon request to the Company as well as on the Company's website (www.korian.com) and the AMF's website (www.amf-france.org).

Historical financial information

Pursuant to article 19 of European Regulation (EU) No. 2017/1129, the following information is included by way of reference in this universal registration document:

• the key figures given on pages 8 and 9 and the consolidated financial statements for the financial year ended 31 December 2019, the notes to the financial statements, the Statutory auditors' report as presented on pages 223 to 280 of the 2019 universal registration document filed with the AMF on 7 May 2020 under number D.20-0452.
• the key figures given on page 8 and the consolidated financial statements for the financial year ended 31 December 2018, the notes to the financial statements, the Statutory auditors' report as presented on pages 224 to 280 of the 2018 registration document filed with the AMF on 25 April 2019 under number D.19-0400.

This is a translation into English of the (universal) registration document of the Company issued in French and it is available on the website of the Issuer.

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• UNIVERSAL REGISTRATION DOCUMENT 2020 •

Message from the Chief Executive Officer

2020 is a year that will go down in history, with the Covid-19 pandemic emerging in February and gradually spreading across all the countries in which Korian operates. The pandemic poses a particular threat to the elderly and those with chronic diseases and has therefore been especially challenging to all those involved in healthcare and elderly care, including Korian and its stakeholders.

As I look back over the year, I wish to begin by sending my warmest thoughts to the residents, patients and Korian's employees who have been affected by the pandemic, and to their loved ones. I would also like to express my gratitude to the families, relatives and all our local partners who have been so dedicated and attentive, even when lockdown measures forced us to place a full ban on visits to their loved ones, with all the pain and worry this caused. Last of all, I would like to pay tribute in particular to all of Korian's teams throughout Europe; their commitment and solidarity have been exemplary in ensuring continuity of care, saving lives and offering protection against an exceptionally contagious virus.

Since the end of February 2020, the entire Group has devoted its efforts to tackling the coronavirus. Like everyone else, we have had to keep moving forward despite the uncertainty caused by the strict requisitions and lockdown measures. We were determined to keep adapting to continually changing circumstances and we learned how to do so in order to support our staff and ensure that our supply chains continued to operate. Having learned that we must now operate under epidemic conditions on a long-term basis, we have implemented a European Vigi-Covid standard. Starting from late December, the entire Group rallied with determination and in close cooperation with the local health authorities to ensure that the first vaccination campaign was a success.

We have, throughout this period, been acutely aware of the profound purpose underlying our corporate mission: provide care and support to ageing and fragile people and their loved ones, respecting their dignity and contribute to their quality of life. We have seen how deeply impactful we can be through our corporate values, our sense of initiative and responsibility, and especially the bonds of trust we create, which are paramount in forming a united front against such an unprecedented situation.

The crisis did not put a stop to the in-depth work started since 2019 on our corporate project "In Caring Hands", the aim of which is to continually improve the quality of our services, strengthen our HR policies, particularly in terms of

social dialogue, qualifying training and quality of work, to diversify and enrich our care pathways in close cooperation with local partners by focusing on digital, and modernising our real estate portfolio.

This extensive project helped us improve many of our ESG metrics in 2020, for instance in terms of customer satisfaction, employee loyalty and career advancement (with 8% of Korian employees now engaged in qualifying training programmes compared to 4% in 2019), local procurement (with over 80% of our purchases now sourced locally) and energy savings.

Despite the crisis, we also pursued our development drive by starting up or acquiring 107 additional facilities across Europe. This will allow us over the coming years to meet growing needs for care services to fragile people, that are expected to double due to an ageing population and the increasing prevalence of chronic diseases.

All this enabled us to deliver another solid economic and financial performance in 2020, with revenue up 7.2% at almost €3.9 billion, an operating margin excluding one-off Covid expenses of 13.6% (just 120 basis points lower than in 2019) and a stronger balance sheet with a debt ratio reduced to 3.

Korian today is a European network with 57,500 employees in 7 European countries caring for over half a million people, whether in our ~1,000 healthcare and medico- social facilities and residences or through our 200 home care networks in France, Belgium and Germany. It is also now a major player in the mental health segment - mental issues are the third cause of chronic diseases in Europe - having taken over Inicea in France and Ita Salud Mental in Spain.

We have been able to accomplish all this thanks to the confidence shown in us by our shareholders. Back in October they subscribed on a large scale to the first capital increase carried out since our listing, amounting to €400 million.

I am deeply grateful and proud of the Group's resilience in 2020, which it achieved with the support of a strong and highly involved governance structure under the chairmanship of Mr. Christian Chautard and then Mr. Jean-Pierre Duprieu who succeeded him in October.

Today, more than ever, we are determined to continue our mission to serve the elderly and fragile people.

Sophie BOISSARD

Chief Executive Officer of Korian

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