RHÖN KLINIKUM : Interim Report H1/2023

HALF‐YEAR FINANCIAL REPORT

2023

CONTENTS

GROUP INTERIM REPORT	1
CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENT	9
RESPONSIBILITY STATEMENT	28
REVIEW REPORT	29

For computational reasons, rounding

differences of ± one unit (€, %, etc.) may occur in the tables.

GROUP INTERIM REPORT

REPORT ON THE FIRST HALF OF 2023

• In the first half of 2023 we treated 446,022 patients in our hospitals and medical care centres,

generating revenues of € 728.2 million, EBITDA of € 45.2 million and consolidated profit of

• € 12.2 million.

• The first half of 2023 continued to be impacted by the geopolitical risks brought about by the war in Ukraine, higher energy and commodity prices as well as inflation.
• Our key figures were negatively impacted by the weekslong labour dispute at Universitätsklinikum Gießen und Marburg early this year, which resulted in massive cuts in outpatient and inpatient care.
• A successful agreement was reached with the Federal State of Hesse on the granting of investment funding as well as on the enhancement of separate accounting at Universitäts‐ klinikum Gießen und Marburg (UKGM) at the end of February 2023.

BASIC PRINCIPLES OF THE RHÖN‐ KLINIKUM GROUP

The condensed interim consolidated financial statements of RHÖN‐KLINIKUM AG for the period ended 30 June 2023 have been prepared in accordance with the provisions of IAS 34 in condensed form, and applying section 315e of the German Commercial Code (Handelsgesetzbuch, HGB) in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) as well as the related Interpretations of the International Financial Reporting Interpretations Committee (IFRIC), which are the subject of mandatory adoption in accordance with Regulation No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards in the European Union in financial year 2023.

The accounting policies applied, to the extent already applied in financial year 2022 and consistently applied in financial year 2023, are set out in detail in the Consolidated Financial Statements of RHÖN‐KLINIKUM AG as at 31 December 2022. No new or amended Standards and Interpretations exceeding such

scope to be applied as of 1 January 2023 or subsequent years and already adopted by the European Union are explained in the Condensed Notes to this Interim Report. These will have the effects as stated in the Condensed Notes on the net assets, financial position and results of operations of the Group of RHÖN‐KLINIKUM AG.

In accordance with IAS 33, earnings per share were determined according to the weighted average number of ordinary shares out‐ standing on a pro rata temporis basis.

If data are provided below on individual companies, these are values before consolidation. For computational reasons, rounding differences of ± one unit (€, %, etc.) may occur in the tables.

CORPORATE GOVERNANCE

At the virtual ordinary Annual General Meeting of RHÖN‐KLINIKUM AG on 7 June 2023, the shareholders, in addition to the appropriation of net distributable profit, approved the actions of the members of the Board of Management and Supervisory Board, the Remuneration Report pursuant to section 162 of the German

Group Interim Report 1

Stock Corporation Act (Aktiengesetz, AktG), the appointment of the statutory auditor for financial year 2023 as well as various amendments to the Articles of Association. The amendments to the Articles of Association relate in particular to the streamlining of the Articles of Association in various respects, in particular with regard to provisions on the composition and term of office of the members of the Board of Management, the official duties of the Supervisory Board and modalities of Supervisory Board meetings as well as provisions on the convening and holding of Annual General Meetings. Furthermore, in the revised Articles of Association a number of supplemented provisions and powers were approved. These include the provision that the Supervisory Board members as a general rule must attend the Annual General Meeting in person unless they are prevented from doing so for personal reasons. In the event of a Virtual Annual General Meeting, the participation of Supervisory Board members may also take place via video and audio transmission if no personal reasons preventing this exist. Moreover, the shareholders approved the amendment of the Articles of Association with regard to the authorisation of the Board of Management to convene virtual Annual General Meetings which take place within five years from the provision of the Articles of Association being filed to the commercial register.

The composition of the Board of Management and the Supervisory Board has not changed since 31 December 2022.

Moreover, the allocation of responsibilities within the Board of Management as well as within the Supervisory Board is regularly adapted to changing requirements.

During the first six months of financial year 2023, RHÖN‐KLINIKUM AG received no notifications pursuant to section 33 et seq. WpHG and no notifications on transactions for own account by persons discharging managerial responsibilities pursuant to Article

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19 of the Market Abuse Regulation (EU) No 596/2014.

The Declaration on Corporate Governance and the Declaration of Compliance pursuant to section 161 of the AktG jointly issued by the Board of Management and the Supervisory Board were updated and published on our website in financial year 2023 and 2022. All other elements of our corporate constitution have remained unchanged during the financial year to date. In this regard we refer to our explanations provided in the Management Report of the Consolidated Financial State‐ ments of financial year 2022.

The White Paper Agreement Plus (Zukunftsvereinbarung Plus) signed at the end of February 2023 between the Federal State of Hesse, RHÖN‐KLINIKUM AG, Asklepios Kliniken GmbH & Co. KGaA, Universitäts‐ klinikum Gießen und Marburg GmbH (UKGM), as well as their universities with their faculties of medicine, relating to the granting of investment funds for UKGM provides, as of 1 January 2023, for a re‐transfer of shares to the Federal State of Hesse under certain circumstances in the event of a change of control. A change of control exists if 50% of the shares in RHÖN‐KLINIKUM AG or more than 50% of the shares in Asklepios Kliniken GmbH & Co. KGaA or its personally liable shareholder is acquired by another natural or legal person. With regard to further contracts providing for a change‐of‐control clause, we refer to our statements in the Management Report of the Consolidated Financial State‐ ments of financial year 2022.

ECONOMIC REPORT

MACROECONOMIC AND SECTOR‐ SPECIFIC ENVIRONMENT

The mood in the German economy has become significantly more bleak. After hitting 91.5 points in May 2023, the ifo business

climate index fell to 88.5 points in June 2023. A considerable level of uncertainty continues to hang over the German economy. Whereas the external economic environment is proving weak, the first domestic indicators of economic stabilisation are emerging. The factors still having a dampening effect on domestic economic activity are the losses in purchasing power resulting from high, albeit declining, inflation which is hampering private consumption. Economic performance is proving very sluggish.

The geopolitical developments culminated in a disruption in supply chains and an accom‐ panying general rise in price levels. Whereas the Group subsidiaries of RHÖN‐KLINIKUM AG were for the most part able to offset direct price increases in the area of energy thanks to delivery quantities contracted in the past, price increases with our suppliers put a greater burden on the result.

In the view of the Board of Management of RHÖN‐KLINIKUM AG, the discord between the statutory reimbursement mechanisms in the hospital area on the one hand and the inflationary price trend on the other will end up having a considerable impact on the German healthcare industry. Many hospitals will be exposed to uncontrollable risks from the huge cost pressures in the area of energy, medical goods and services, and in the wake of the planned hospital reform.

By introducing a gas and electricity price brake in the middle of December 2022, the German Federal Parliament (Bundestag) adopted relief payments for hospitals from financial year 2023. Given the steep hike in energy prices and hospitals' heavy reliance on natural gas, a total of € 6 billion - of which

• 1.5 billion for indirect increases in energy costs as a lump sum payment based on hospital beds and € 4.5 billion in the form of individual hospital relief for direct increases in energy prices - has been earmarked

for the period	from 1 October 2022 to
30 April 2024. On	23 June 2023, the German

Federal Parliament (Bundestag) approved the Act Amending the Gas and Heat Price Brake Act (Gesetz zur Änderung des Erdgas‐Wärme‐ Preisbremsengesetzes (EWPBG)) and the Electricity Price Brake Act (Gesetz zur Änderung des Strompreisbremsengesetzes (StromPBG)). Under these amendments, the funds in the amount of € 6 billion to provide relief for energy price increases for hospitals thus remain unchanged. Nonetheless, a reallocation was made. Since it is emerging that the amount of

• 4.5 billion originally intended to compensate for direct increases in energy costs cannot be called in the full amount by the hospitals, an amount of € 2.5 billion of this will now be distributed likewise as a lump sum on the basis of bed numbers. On 7 July 2023 the Federal Council (Bundesrat) gave its approval to the Amending Act. The law came into force on 3 August 2023.

On 10 July 2023, the Federal Government and the States reached agreement on the key points of a hospital reform. The results are being incorporated in the draft bill to be prepared during the summer recess of parliament. The act is to enter into force from 1 January 2024. The Key Issues Paper provides for reforming the system of purely volume‐ based DRG remuneration and introducing a remuneration component for the services of somatic hospitals for keeping capacities available that is largely independent of the services rendered. Under this scheme, the existing case flat rates (DRGs) are to be lowered. The level of financing capacity availability is linked to service groups which are assigned to the individual hospitals by the Federal States and which require compliance with uniformly defined quality criteria.

We will be able to gauge the specific effects of the reform on our hospitals at the earliest when the ministerial draft announced for September is issued, and in particular when

Group Interim Report 3