The Group regularly reassesses the risks related to its activities and its environment in order to:

• ■ensure the quality of operations;
• ■protect the Company’s reputation and the value of its assets;
• ■secure the Company’s decision-making and processes;
• ■ensure that the actions taken are consistent with the Company’s values;
• ■mobilise the Company’s employees around a common vision of the most material risks.

Risk management within the Group is based on a risk monitoring and identification process. The risks are analysed and preventive or corrective measures are implemented to reduce their potential impact.

Identification of risks

Every year the mapping of the Group’s major risks is updated based on an approach combining:

• ■a bottom-up analysis – to collect operational managers’ point of view and the contributions of each country;
• ■a top-down analysis – driven by General Management and the Group’s functional division heads.

Risk analysis and assessment

The risk mapping exercise includes the assessment of the criticality of all major risks.

The gross criticality is assessed based on a joint analysis of two criteria:

• ■the highest probability of the risk materialising; and
• ■the estimated scale of its maximum potential negative impact (non-financial, in particular operational, and financial).

The combination of these two criteria defines the gross criticality of the risk.

The risk management framework allows weighting of the gross probability, the gross impact or both criteria, which gives the net criticality of the risk.

A presentation of the risk factors by category is summarised in the table below, with the net criticality of each risk factor indicated according to the three-level scale: low, medium or high. As this Universal Registration Document only presents significant risks, no low-level risks are mentioned.

The risks are classified by decreasing level of criticality within each category (operational risks, strategic risks, legal, ethics and regulatory risks, or economic and financial risks).

Risk treatment

The Group implements action plans as part of a continuous improvement process. Furthermore, it has taken out insurance coverage to externalise some of the risks.

The risks presented below are those that the Company considers, as of the date of this Universal Registration Document, to be likely to have a significant impact on the Group or of which stakeholders should be made aware.

Main risk factors

In each category, the risk factors are presented in order of importance, starting with the most significant:

• ■presentation of gross risk, as it exists as part of the Company’s business;
• ■presentation of the management systems implemented by the Company.

Other risks may emerge in the future and give rise to a materially adverse impact. The above list of risks is therefore not exhaustive.

Some of the risks described in this chapter are associated with social, environmental or governance (ESG) issues. The main non-financial risks are indicated in the table above and in the paragraphs below with the following symbol: ✪.

Chapter 3 of this Universal Registration Document provides more details about the policies implemented by Korian, particularly as part of its ESG strategy, to identify, prevent and mitigate the occurrence of these risks; it also presents the outcomes of these policies.

Despite technological and medical progress, the pandemics linked to Covid-19 and the H1N1 virus have shown humanity's vulnerability to pathogens. New potential threats to health could arise due to the melting of polar ice, the multiplication of crises or another factor not yet known. Infectious diseases could thus spread across the world.

In the context of the Covid-19 pandemic, the Group established a vigilance plan that has demonstrated its effectiveness and could be rapidly redeployed in all of its establishments and in all its countries of operation (long-term care nursing homes and healthcare facilities ) in the event of a new pandemic. This European standard is continuously updated to incorporate best practices in terms of hygiene, traceability and prevention measures.

The Group also ensures that its network always has a steady supply of protective equipment (masks, gloves, etc.) by building up a permanent stock corresponding to two months of consumption. Hygiene diagnostic campaigns covering all European facilities were entrusted to Bureau Veritas from 1 July 2020, with the aim of checking the proper application of these standards and assisting the teams in their implementation.

The Group implements a development policy to support the strengthening of the Group’s medical activity.  

The implementation of this strategy requires the ability to find suitable targets and development opportunities at acceptable costs and conditions, as well as the implementation of appropriate integration processes, in order to guarantee a high level of quality across the networks.

The local development teams constantly monitor opportunities and business trends in each country.

At Group level, Korian has a dedicated department whose duties include reviewing partners and strategic opportunities, selecting them, carrying out audits and conducting negotiations.

This department relies on rigorous multi-criteria analysis procedures involving external audits and expert opinions. These audits cover operational, quality, and ethics and financial issues.

These analyses make it possible to identify the risks and take them into account when determining the acquisition price of the target and thus limit the risk of overvaluation. Furthermore, the teams in charge of integration are involved in the acquisition audit process with the aim of preparing a preliminary integration plan, in order to minimise the integration risk. This plan will be completed and validated following the acquisition.

Any proposed investment or divestment exceeding €1 million, including partnerships and acquisitions of equity interests, whether or not it results in control being acquired, is subject to the approval of Korian’s Commitments and Investment Committee.

Furthermore, projects with an enterprise value in excess of €15 million or in a new country or outside the scope of the Group’s pre-existing business lines (determined at the local level) must be approved by the Board of Directors on the recommendation of the Commitments and Investment Committee of the Board.

The Group’s medico-social and healthcare activities are subject to laws and regulations in all countries where it operates. In most countries the opening of a medico-social or healthcare facility requires authorisations to be granted. Authorisations are generally issued or renewed subject to compliance of the service provision with assessment and quality control procedures conducted by the supervisory authorities in accordance with the applicable laws in each country.

Furthermore, the pricing of the Group’s facilities is regulated. It includes:

• a portion paid by the residents or patients themselves;
• a portion relating to treatment and care, directly or indirectly subsidised by public funding.

In order to ensure the proper application of the rules on the use of financing, Korian provides Facility Directors with access to information systems that provide a framework for the allocation of resources to the appropriate category of expenditure (care, dependency or hospitality). The same applies to expenses related to medical equipment and devices. The reports produced are subject to controls at facility level and then at central level.

The Group conducts regulatory watch in all of the countries where it operates in order to protect itself against any negative repercussions resulting from changes to regulations or pricing rules. This watch enables the Group to anticipate any major changes while ensuring the compliance of its operations. The Group is also an active participant in trade union activities.

In addition, the fact that the Group operates in several countries and markets, as well as the diversification of its activities, limits the risks resulting from of regulatory change and thus mitigates the impact at Group level.

Furthermore, the Group’s operating licences can only be withdrawn under strictly limited circumstances.

Korian’s activities are based on a fixed cost structure and its dynamic development requires sustained investment. The Group is therefore exposed to risks related to liquidity, volatility and inflation in financing conditions, as well as its ability to integrate acquisitions in order to deliver the expected results.

The Group has set up various sources of funding that are described in Note 8 to the financial statements.

At 31 December 2022, the Group’s total net indebtedness amounted to €3,775 million (excluding lease commitments), and the average maturity of the Group’s financial borrowing was 4.8 years (excluding short-term debt offset by available cash at closing).

Korian’s ability to rapidly integrate acquisitions is fundamental to pursuing its development strategy.

In 2022, 20 facilities were integrated or were in the process of being integrated. In particular, this involves acquisitions in Italy, including Italian Hospital Group, and in the United Kingdom. 

The Group could encounter difficulties or suffer delays in the integration of these assets, impacting the quality of the services provided, the acquisition of control, the expected synergies and its ability to deliver the expected results.

The Group has significant experience in the integration of acquisitions. Starting from the phase of identifying potential targets, the assets the Group is considering acquisition of are subject to in-depth analyses carried out by multidisciplinary teams in order to reduce uncertainties and understand the risks that may arise during integration.

As described above, any proposed investment or divestment exceeding €1 million, including partnerships and the acquisition of equity interests, whether or not control is acquired, is subject to the approval of Korian’s Commitments and Investment Committee.

Furthermore, projects with an enterprise value in excess of €15 million or in a new country or outside the scope of the Group’s pre-existing business lines (determined at the local level) must be approved by the Board of Directors upon the recommendation of the Commitments and Investment Committee of the Board.

All projects are also monitored through a monthly business review for each country.

Every country has a dedicated department whose role is to supervise, support and monitor integrations. These departments are coordinated at Group level. A specific process has been set up in order to:

• ■structure the integration process;
• ■identify and address the risks;
• ■monitor the successful implementation of the business plan;
• ■ensure that the ESG requirements set by the Group are properly met; and
• ■ensure that the Group’s systems and standards are implemented within the desired timeframes.

Since its creation, this department has participated in the integration of many facilities. Due to its extensive experience in the field of integration, this process is industrialised and well-managed.

Progress on the integration of the main acquisitions is monitored by the Board of Directors’ Investment Committee.

The Group has drafted and implemented an internal control and risk management procedure based on the recommendations set out in the AMF’s reference framework (entitled “Reference Framework on risk management and internal control measures”) (the “Reference Framework”).

The risk management and internal control measures complement the control of the Group’s activities. The risk management framework aims to identify and analyse the most material risks and then address them through appropriate action plans. The controls to be implemented as part of these action plans are part of the internal control procedures. The latter thus contribute to the treatment of the risks to which the Company’s activities are exposed.

The internal control system is applied to the Company and to all companies within its scope of consolidation.

Internal control refers to all Group processes that contribute to the rigorous and efficient management of its business activities and the control of its risks.

More specifically, the purpose of internal control is to:

• ■ensure compliance with laws, regulations and the Group’s values;
• ■ensure accounting and financial information is reliable and accurate;
• ■protect the Group’s assets and reputation;
• ■ensure targets are reached; and
• ■prevent and detect fraud and irregularities.

The internal control system is intended to provide reasonable assurance that these objectives are being achieved.

Internal control is based on a centralised structure with a policy of delegating powers and responsibilities to the Group’s operational and functional departments. In particular, the Group ensures that:

• ■its strategy and operational goals are clearly communicated;
• ■optimal guidance is provided to assist everyone in their work, in particular by sharing Best Practices;
• ■its employees have the skills and resources they need to perform their work. To this end, the Human Resources Department in all countries where the Group operates has assessment, periodic monitoring and training procedures in place;
• ■processes are carefully controlled.

The social and societal nature of Korian’s mission means that the Company plays a special role in society. This rests on the heightened sense of responsibility felt by all members of the Company to meet the major challenges of an ageing population in Europe.

The Group’s societal role is at the heart of its mission to “Provide care and support to elderly or fragile people and their loved ones, respecting their dignity and contributing to their quality of life” and of its corporate project. It is manifest in each of Korian’s facilities in Europe, which are deeply rooted in their communities, aware and sensitive to the social and environmental realities of their countries. We are proud of our mission of serving the most fragile and elderly among us.

As an extension of these commitments, and in accordance with the mandate given by our shareholders at the General Meeting of 22 June 2022, we have become a European company and have engaged in dialogue with all our stakeholders in order to prepare for transition to the status of a purpose-driven company, which will be submitted to a vote by our shareholders at the General Meeting convened for 15 June 2023.

Korian’s ESG strategy was designed with consideration for its stakeholders’ expectations to identify priority social, societal and environmental challenges. In 2021, Korian updated its materiality matrix to identify and prioritise the expectations of its stakeholders, as well as the most relevant issues with regard to the Covid-19 pandemic.

In discharging their mission of caring for elderly or fragile people, the Group’s facilities are in close contact with various categories of stakeholders: residents, patients, as well as their relatives and caregivers, employees and their representatives, healthcare professionals, joint authorities and other public and local authorities. At the level of facilities, regions, countries and the Group, Korian is strengthening and structuring its model of stakeholder dialogue.

As a result, Stakeholder Councils are now in place in five of the Group’s seven countries (France, Germany, Belgium, the Netherlands and Italy). The Group has also supported the creation of independent foundations in France, Germany and Spain, whose governance bodies include representatives of the main stakeholders.

• ➤A BROAD STAKEHOLDER ECOSYSTEM

This materiality exercise was updated in 2021 based on feedback collected from all stakeholders across the Group's network in Europe, after the first wave of the Covid-19 pandemic.

Numerous discussion groups were organised in each of the Group’s countries. Nearly 2,000 people took part in these, including patients, residents, their relatives and families, Korian teams, trade union representatives, etc. As a second step, Korian analysed and classified this information, then supplemented it with the perceptions of investors and the media. Qualitative interviews were then conducted with the Group’s key managers, namely the Chairman of the Board of Directors, the Chief Executive Officer, the members of the Group Management Board (including the country Directors) and the main functional departments of the Group.

This process helped to refine the mapping of Group stakeholders and identify priority objectives according to their ESG impact, as related to:

• ■Korian’s mission;
• ■ESG strategic pillars;
• ■non-financial risks.

A weighted assessment of priority issues was then carried out, mapped to both stakeholders' perceptions and Korian's.

This materiality matrix synthesises the five pillars of the Group's ESG strategy and the non-financial risk analysis (see below) to identify the areas Korian should prioritise in light of the expectations of its internal and external stakeholders.

This approach is an integral component of the business model presented in Chapter 1 of this Universal Registration Document.

In 2022, as part of the preparation for its transition to the status of a purpose-driven company, Korian also launched a consultation with its stakeholders to gather their opinions and expectations concerning the Company’s mission and main avenues for progress in achieving it (see details in Section 3.1.2).

Korian’s ESG strategy aims to improve the Group’s social and environmental impact by operating in accordance with its values and taking into account the expectations of its internal and external stakeholders.

The strategy is broken down into five strategic and operational pillars, stemming from our corporate project. This strategy is implemented operationally through action plans, investments and objectives at Group, country and facility levels.

The Group has established a roadmap focusing on 5 pillars and 15 quantified ESG commitments, which meet and are based on the main international non-financial reporting standards (such as those of the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI) and the UN Sustainable Development Goals (SDGs)). These indicators are used to measure the progress of ESG performance. The Group’s CSR Department monitors this matter in conjunction with the countries and functional departments. Indicators are subject to reporting during monthly business reviews.

They are presented to the financial community alongside the publication of annual results, at conferences and in individual meetings with investors, and notably SRI investors.(1)

A correspondence table cross-referencing the SASB Healthcare Delivery industry standard is provided at the end of Chapter 3.

The ESG commitments are incorporated into the annual targets of each business line, distributed throughout the management chain, and assimilated in the long-term performance action plans for Top Management.(2)

The following criteria were included in the variable compensation of Top Management in 2022:

• ■The Net Promoter Score (NPS), measured through customer satisfaction surveys;
• ■A composite HR indicator: stabilisation of average tenure reduction in the frequency rate of work accidents with stoppage and 10% of the workforce enrolled in a qualifying training programme;
• ■Reduction in carbon emissions per sq. metre due to buildings' energy consumption versus 2019.

In 2023, the non-financial criteria will be strengthened with an increased weighting in variable compensation. Five criteria are included in the objectives of Top Management:

• Continuous improvement of the Net Promoter Score (NPS), demonstrating Korian’s quality of service;
• Improvement in workplace quality-of-life, as measured by a “composite” HR indicator;
• The increase in the number of ISO 9001-certified facilities, in line with the 2023 roadmap, which aims for 100% ISO 9001-certified facilities by the end of 2023;
• The reduction in the energy consumption of our facilities, new objective in 2023;
• The quality of care, as measured by a composite indicator (for managers), new objective in 2023.

2023-2025 performance share plan

In 2022, the weight of the ESG indicators in the long-term variable compensation awarded to the Chief Executive Officer and Top Management was increased to 50% of the performance conditions. Furthermore, an additional indicator has been added for 2023.

The 2023 performance share plan includes the following three criteria: the reduction of carbon emissions, the percentage of women members of country management committees and within Top Management, and a composite indicator on the quality of care.

Korian’s ESG priorities are fully integrated in the Company’s financial strategy. A committee comprising representatives of the Finance and CSR departments meets monthly to measure the progress made in this area.

In June 2020, Korian became the first company in the sector to carry out a private bond placement (Sustainability Linked Euro PP) of €173 million, based entirely on non-financial performance criteria and with a maturity of eight years. An additional issue (tap) of €57 million was completed on 6 October 2020, bringing the total amount of the bond series to €230 million.

As a new milestone in the roll-out of the Group’s ESG strategy, this private offering was structured around 3 of the 15 main ESG commitments for 2023. This has strengthened investor confidence in the Group’s ambition and its non-financial objectives:

• ■as regards quality: achieve ISO 9001 certification for all facilities;
• ■as regards employees: double the proportion of staff members participating in qualifying training programmes to reach 8%;
• ■as regards society: reduce direct and indirect CO2 emissions.

Depending on the extent to which each of these targets are met, the interest rate on the bonds may be increased or reduced by up to 20 basis points. If the interest rate increases, half of the increase will be allocated to internal compensatory measures and/or paid to one or more external partners (such as associations or NGOs), the other half being paid to investors.

An independent body, tasked with reviewing the non-financial performance statement, verifies the achievement of the above commitments every year.

• ➤Achievement of the ESG objectives for 2022

In 2021, Korian announced the success of two issues:

• ■a non-convertible green hybrid bond in the amount of £230 million, the purpose of which is to finance the modernisation, acquisition or development of real estate assets, mainly in the United Kingdom. The report on this financing was published on 15 June 2022 on the Korian website on the Sustainable Finance page (https://www.korian.com/en/sustainable-finance), accompanied by the certificate of partial allocation of funds provided by our auditors;
• ■a social bond in the amount of €300 million, based on social criteria, the proceeds of which will be used to finance the growing need for care in Europe, in medico-social and healthcare facilities, as well as in co-living residences or home care services provided by Petits-Fils. The report on this financing was published on 14 October 2022 on the Korian website on the Sustainable Finance page (https://www.korian.com/en/sustainable-finance), accompanied by the certificate of total allocation of funds provided by our auditors.

The quality of care and services is at the heart of our “In Caring Hands” corporate project, which emphasises respect for people, their dignity and their wishes within our facilities.

Korian has developed a dedicated therapeutic approach for its residents, in particular those suffering from dementia (neurodegenerative diseases). This approach focuses on the development and maintenance of autonomy, while taking into account the resident’s expectations and desires. This approach differs from care mainly based on drug treatment, which is not adapted to this type of pathology.

Positive Care, developed by the Group, is based on non-drug therapies, which aim to maintain and stimulate the residents’ physical, motor and cognitive capacities, according to their state of health. By preserving residents’ capacities, Positive Care aims to optimise their quality of life and well-being, by enabling them to express their wishes and make their own choices.

In practical terms, each resident undergoes a clinical assessment during his or her first 90 days, in order to determine his or her capacities and needs. At the end of this assessment, an individualised non-drug therapy plan is established, which takes into account the resident’s interests and life history and specifies the cognitive, functional and behavioural exercises adapted to the maintenance of his or her capacities.

This individualised therapeutic strategy is based on experience and clinical evidence. By training the brain one can compensate for some of the lost capacity related to ageing. Positive Care relies on and encourages natural brain plasticity to prevent and treat fragility and psycho-behavioural disorders related to brain ageing.

This scientific approach is based on numerous studies on residual brain plasticity, including:

• ■research by Prof Gerald Maurice Edelman, an American biologist and the 1972 Nobel Prize winner in Medicine, who demonstrated the fundamental role of residual brain plasticity in adaptive behaviour;
• ■research by Prof Matthew D Lieberman, Professor of Neuroscience and Director of Social Cognitive Neuroscience at the University of California, Los Angeles (UCLA), whose approach encourages social distractions to induce engagement and learning, and to capitalise on untapped neurocognitive resources.

Since 2015, Korian’s Medical, Ethics and Quality-of-Service Department has formalised the Positive Care approach in order to define and translate it operationally. This work has enabled:

• ■the design of non-drug therapies together with their integration, exclusion and assessment criteria on the one hand, and the associated protocols (therapeutic sequences and frequency) on the other;
• ■the consolidation of available therapies in the form of a tree diagram;
• ■assessment of the contribution of each business line to this therapeutic project led by multidisciplinary teams.

The European Positive Care Committee, which brings together the healthcare teams of the countries where the Group operates, has also set out the operational tools required to deploy the Positive Care approach and to support the teams in its implementation, across the Group’s European network, namely:

• ■a set of non-drug therapies tailored to national preferences and skills and by selecting only therapies that have been the subject of scientific publications;
• ■a set of training courses related to these therapies to enable both the appropriation of the therapeutic objectives and proper use of the tools made available;
• ■a basic methodology that promotes the resident-centred approach and the understanding of the challenges of the pathology (Hoffman method, Montessori method, Böhm method, etc.).

Deployment is monitored at Group level, in conjunction with the Positive Care Officers in each country.

This implementation is an integral part of the Group’s ESG strategy and objectives, with the aim of deploying Positive Care in all long-term care nursing homes by the end of 2023.

At the end of 2022, Positive Care non-drug therapy equipment, and the associated training courses, had been rolled out in 97% of the Group’s specialised nursing homes.(3)

The Group’s Positive Care approach – initially focused on non-drug therapies – is being redefined more broadly to include the living conditions, the layout of spaces, the organisation of facilities and the training of teams, in order to individualise the care of residents as much as possible, and more particularly of those suffering from dementia, in accordance with their desires and their needs. This re-definition also aims to extend the Positive Care approach to all of the Group’s activities.

Improving support and care through these multiple dimensions is a co-construction project carried out at Group level, with a dedicated European Committee and a quarterly Operational Monitoring Committee, which coordinate and implement the joint work carried out by monthly thematic working groups.

Korian’s human resources policy, based on the Company’s values – trust, initiative and responsibility – is at the heart of the corporate project “In Caring Hands”, dedicated to the service sector for elderly or fragile people and those with loss of autonomy for whom the quality of care and support provided is essential.

The growth of Korian’s activities requires the ability to attract and develop a wide variety of talent across different professions, in particular caregivers, nurses, doctors, cooks, as well as job roles related to the personal services activities Korian offers (home caregivers for elderly people, care providers, reception staff, etc.).

However, despite the increasing jobs created in the sector, the number of long-term care nursing home workers in relation to the number of people over the age of 65 has stagnated in recent years and the number of people enrolled in caregiver training has remained flat. All the countries where the Group operates are facing a shortage of healthcare workers, exacerbated by the Covid-19 pandemic. According to the Organisation for Economic Co-operation and Development (OECD) and various other European statistical sources, the shortage of caregivers is estimated to reach hundreds of thousands of caregivers per year by 2030.

Developing the attractiveness and appreciation of professions related to elderly and fragile people is, therefore, an essential priority for Korian, to ensure it is able to guarantee excellence and continuity of care for residents and patients.

This attractiveness and appreciation require:

• ■the implementation of an ambitious social foundation for candidates and employees who hold or will occupy these roles, in terms of working conditions, health at work or quality of life at work, and also opportunities for training, to develop their skills and move towards more qualified and better paid positions.
• This social foundation is made possible and supported by a high-quality managerial culture that safeguards the Group’s values and is based on a managerial model driven by our Facility Directors and their teams, the cornerstones of the network;
• ■anticipating the recruitment and skills development needs for our activities. This requires social innovations to secure and expand our external and internal talent base;
• ■an organisation that allows everyone to have a real capacity for action with residents and patients, but also with communities and local stakeholders, in order to support business growth in all the regions where the Group operates.

To meet these various challenges in a context of strong growth, scarcity and volatility of resources, Korian’s Human Resources policy is organised around three priority strategic areas:

• engaging Korian employees around an ambitious social foundation;
• developing skills and talents to ensure quality of care;
• being a committed and responsible social player.

Korian has created two legally independent foundations:

• ■the Korian Foundation, a corporate foundation created in France in September 2017;
• ■the Korian Foundation for Care and Ageing Well, created in Germany in early 2020.

These two foundations carry out actions aiming to:

• ■support and participate in scientific research programmes to advance scientific knowledge and also to tangibly improve the support of residents and patients, the quality of care and the working conditions of caregivers;
• ■conduct societal studies to change views on ageing and contribute to thinking about and inventing a longevity society. This means changing our perspective on ageing and promoting and supporting care occupations and those that support the most fragile, including by inspiring new vocations;
• ■support solidarity actions to combat the isolation of elderly people, promote the professional integration of young people from disadvantaged neighbourhoods, improve access to legal rights and care for caregivers and women in difficulty. The Boards of Directors of the foundations are composed of figures who are internal and external to Korian, divided into three colleges: representatives from the Group, Group employees and representatives of the foundations’ Scientific Boards.

In addition, the foundations benefit from the input and leadership of the members of their Scientific Boards: researchers and academics, practitioners, caregivers, designers, association managers, etc.

The foundations also surround themselves with partners who are both recognised in the field of clinical research and in human and social sciences, along with industrialists and actors from the social and solidarity economy, to galvanise genuine scientific cooperation.

To these two foundations is added the FITA foundation created in 2002 by Ita Salud Mental, a mental health specialist in Spain acquired by the Korian group in 2021.

Taking a research, action and training approach, the professionals of the Korian facilities (medical, paramedical and caregivers) are involved in the development and implementation of scientific protocols in order to ensure their relevance and their feasibility in terms of expertise and needs.

The research also involves residents and patients of Korian facilities (long-term care nursing homes and healthcare facilities) who volunteer to participate.

Created in 2017 for a first five-year cycle, the French Foundation of the Korian group had set itself the objective of contributing to the reflection on Ageing Well, by conducting a series of studies with the IPSOS institute on how people view ageing, by supporting initiatives to promote the social inclusion of elderly people and to promote oral archives, and more broadly by encouraging various applied medical research projects aimed at improving the physical and psychological support provided to elderly people and their families and caregivers, at home and in medico-social or healthcare facilities.

In five years, 15 research projects have been completed, resulting in 30 publications; three prizes have been awarded to associations particularly involved in these themes, while 29 platforms and 21 morning sessions have been organised in Paris and 16 cities in the regions, bringing together a total of nearly 5,200 representatives of associations and professionals in the field of ageing for face-to-face discussions.

In 2022, the Foundation continued its actions to transmit and promote the voice of elderly people through two emblematic projects:

“Territoires et mémoires de vie” (Territories and Memories of Life) – Part 2: One of the missions of the Korian Foundation for Ageing Well is to give a voice to elderly people and carry their voices, their life stories, sharing and promoting their experiences. In this book entitled “Territoires et mémoires de vie”, the Korian Foundation gives the floor to residents who live in nursing homes. For the past two years, the Foundation has been studying local communities and the impact that living spaces can have on our history. After Marseille, the biographer Régine Zohar turned to Bordeaux, collecting the life stories of residents at the Villa Gabriel, Villa Louisa, Villa Bontemps and Clos Serena long-term care nursing homes.

Season 4 of the “La Voix des Aînés” podcast, entitled “Ecology once upon a time”: As the climate and environmental emergency forces us to rethink our lifestyles and consumption, the Foundation wished to let elderly people speak about this topic and share their memories of a time when people were inventive and thrifty out of necessity.

In addition to the projects carried out in favour of Ageing Well, the Foundation supports solidarity actions for four target audiences:

• ■isolated elderly people;
• ■caregivers;
• ■women in difficulty;
• ■young people in priority education areas.

In 2021, the Foundation, together with Fondation Agir Contre l’Exclusion (FACE), launched solidarity workshops to improve employees’ access to rights in healthcare and medico-social facilities. Designed with the support of Korian’s social services and organised by the Korian Foundation, they are led by FACE clubs and structures in the regions. In 2021 and 2022, 47 Group healthcare facilities and long-term care nursing homes and 900 participants benefited from these workshops.

The partnership with the Alliance for Education, aimed at introducing middle-school and high-school students in priority education areas to the elderly care professions, also continued, through the participation of Group employees in five job forums and the hosting of 15 interns under the programme.

The Foundation supports the mobile campaign of the Bus du Coeur, which is led by the Agir Pour le Cœur des Femmes Foundation, which aims to inform, raise awareness and prevent cardiovascular diseases in women. In 2022, the Bus du Cœur campaign enabled 5,000 women to be screened in 14 cities in France.

As part of the Group’s support for the fight against violence against women, the Foundation has a partnership with the Maison des Femmes in Saint-Denis, enabling victims (Korian employees or not) to access social, medical and legal support. The Foundation provides funds for two night nurses.

At the end of this first five-year cycle, the Foundation decided to devote its new cycle of work starting in 2023 to the theme: “Loving to care”. It intends to dedicate its actions to caregivers, care professions and healthcare organisations. The Korian Foundation has identified three key areas for reflection:

• ■the physical and moral health of caregivers: prevention and support, fight against burnout, social inclusion and work-life balance, etc.;
• ■the attractiveness of the care professions: professional recognition, social representation of caregivers, diversity of professions and profiles, new generations and new expectations, etc.;
• ■the meaning of the job: organisational ethics, new forms of management, teamwork and time management, etc.

The well-being of caregivers and more generally of people active in the care sector is a key focus of the Korian Foundation’s actions in Germany. In 2022, stress reduction was at the heart of the Foundation’s work through the distribution of healthy recipes that take into account the pace of work in facilities and aromatherapy training. The Foundation has also published a guide for professionals in the care sector on the topic of end-of-life support, death and bereavement. It aims to offer them tools to support the people concerned and their families and support them in managing the emotional burden associated with this mission.

In December 2022, the German Foundation, in partnership with Korian Germany, the University of Bremen and the Fraunhofer IIS research institute, also launched the “Care 2030” (Pflege 2030) project. The Korian Haus Curanum facility in Karlsfeld was selected to pilot this three-year project, supported by a €3.1 million grant from the Bavarian Ministry of Health and Care, which aims to project itself into the near future of the healthcare sector. The contributions of new technologies and innovative planning methods to the quality of care and working conditions will be studied through their experimentation at the Karlsfeld site.

In Spain, Ita Salud Mental, a mental health specialist acquired by the Korian group in 2021, created the FITA foundation in 2002. Its mission is to contribute to the prevention, awareness and understanding of mental health problems. More specifically, its programmes aim to:

• ■promote emotional well-being;
• ■facilitate the early detection of mental disorders;
• ■contribute to the reduction of their stigma;
• ■support and guide affected people and their families in accessing treatment.

The FITA foundation mainly carries out three types of actions:

• ■care and rehabilitation programmes dedicated to supporting people suffering from or having suffered from mental disorders and helping them towards autonomy and social inclusion. The Foundation’s objective is to be able to meet the diversity of needs through these programmes: accommodation in transitional housing, psychological support, support in day-to-day management, academic guidance, professional integration, financing assistance for treatment. In 2021, 179 people were supported through these programmes, mostly at the end of or after treatment, and 89 relatives and/or education and social action professionals were advised by the Foundation’s teams;
• ■prevention and training programmes: workshops for the general public, continuing training for education and social action professionals. In 2021, 1,300 people took part in prevention workshops and 320 professionals were trained;
• ■awareness-raising actions based on the testimonials of people who have experienced mental health problems, through interventions in schools or the publication of novels written based on these testimonials.

Korian plays an active role in the economic and social development of the communities in which it operates. The Group has more than 1,200 facilities located as close as possible to local communities and employment areas, often close to priority urban areas, but also in rural areas and in “medical deserts”.

A new facility boosts the local economy. For example, in France, a long-term care nursing home or a specialised clinic with around 100 residents and patients represent respectively between 60 and 120 direct jobs that cannot be relocated. In addition to creating stable jobs that cannot be relocated, the opening of a facility contributes to the local economy, both through the building’s maintenance and the purchase of goods and services necessary for its operations.

Ages & Vie shared housing also contributes to regional integration in rural areas. These homes are inclusive solutions located in the heart of small towns and neighbourhoods, near healthcare centres, local shops, schools and associations. Elderly people thus remain in their home environment. Welcoming to relatives and friends, they facilitate exchanges with residents' families. The homes are connected to their communities and welcome multiple generations under one roof (in some facilities, caregivers live with their families in staff accommodation on the first floor). They thus offer an intergenerational environment to elderly residents. From the start, the Ages & Vie concept was designed and developed in partnership with municipalities. It closely matches the needs of mayors looking for an innovative solution that creates jobs, in line with the expectations of their constituents.

By their very nature, our services aim to be local services with a strong commitment to an economy of social inclusion and solidarity.

In order to explore and qualify the mechanisms and actions through which the Company contributes to the common good and to generating economic and societal value in the regions where it operates, the Korian group created the ICP-ESSEC Companies and the Common Good Chair in 2021 in partnership with ICP, ESSEC and six other partner companies (Saint-Gobain, Bayard, Grant Thornton France, Meridiam, Eurazeo and Kea & Partners). The aim of the Chair is to develop multidisciplinary research around the notion of the common good applied to companies. In particular, it has created a “Company and Common Good” university diploma as an initial degree and continuing education, in which two Korian group employees participate every year. In 2022, the Chair began a research programme on the contribution of companies to the common good through their local presence, which runs until 2024. The research areas are as follows: studying the conditions for a successful regional anchoring policy and measuring the impact of companies at the level of local communities.

Regulation (EU) 2020/852, known as the European Taxonomy Regulation, is a key element of the European Commission’s action plan to redirect capital flows towards a more sustainable economy. To this end, the European Taxonomy sets a classification system for environmentally sustainable economic activities.

As a non-financial company, below Korian presents the share of the Group’s revenue, capital expenditures (CapEx) and operating expenses (OpEx) for the 2022 financial year which are associated with taxonomy eligible activities under the first two environmental objectives (mitigation of climate change and adaptation to climate change), in accordance with Article 8 of the Taxonomy Regulation and Article 10 (2) of the Delegated Act supplementing Article 8. The analysis covers all Group entities (scope of fully consolidated entities).

The Korian group has identified among its various activities (see Section 1.1 of the Universal Registration Document for the presentation of the Group’s activities) those covered by the European Taxonomy Regulation with regard to the two climate objectives:

• ■mitigation of climate change;
• ■adaptation to climate change.

These activities are presented in the table below:

The Group’s long-term care nursing home activities are part of Objective 2, adaptation to climate change, Section 12.1 “Residential care activities”. Due to the similarity of the services (extended accommodation and medical care) of post-acute and rehabilitation care clinics and mental health clinics (excluding outpatient solutions), the latter are also considered to be relevant to Section 12.1.

The share of revenue associated with activities eligible for the European Taxonomy was determined based on the segmentation of revenue by activity in the Group’s information systems and reconciled to the line “Revenue and other income” of the consolidated financial statements as at 31 December 2022 (see Chapter 6, Section 6.1 of this document).

Pursuant to Delegated Regulation 2021/4987 published by the European Commission on 6 July 2021 (Appendix I 1.1.1), the revenue from long-term care nursing home and healthcare facility activities meeting Objective 2 “Adaptation to climate change” was excluded due to the non-qualifying nature of the activity.

Only revenue corresponding to rents received from residential solutions (Activity 7.7 “Acquisition and ownership of buildings”) and sales of furnished apartments for non-professional leasing (Activity 7.1 “Construction of new buildings”) is considered eligible.

This resulted in a percentage of Group eligible revenue of 1% for the 2022 financial year. This percentage stems directly from the classification of the Group’s activities as established by the current texts, which do not consider the medico-social housing business, Korian’s main activity, as qualifying under adaptation criteria. This figure does not in any way reflect the Group’s commitment to reducing its carbon emissions. However, these activities are included in the basis for calculating the eligibility ratios for CapEx.

Given the insignificant amount of eligible revenue related to Activity 7.1 “Construction of new buildings” and 7.7 “Acquisition and ownership of buildings”, the Group has not carried out any alignment analysis concerning the revenue generated by these activities.

The breakdown of revenue eligibility and alignment is presented below:

The share of CapEx associated with the eligible activities was calculated on the basis of the amounts paid for the acquisition of tangible and intangible assets and increases in rights of use, including those resulting from business combinations, associated with the eligible activities of the Group.

The CapEx segmentation by activity was carried out on the basis of the right-of-use assets broken down by entity and the Group’s capital expenditure reporting and reconciled to the consolidated financial statements as at 31 December 2022 (see Chapter 6, Note 5 “Goodwill, intangible assets and property, plant and equipment”). The CapEx of small amounts (amounts of less than €1 million) or that cannot be allocated to a single activity (for example headquarters CapEx, IT CapEx, maintenance CapEx not detailed) as well as increases in rights of use were excluded.

At 31 December 2022, the share of eligible and aligned CapEx amounted to 29% and 12% respectively, details of which are presented in the table below.

Given the absence of CapEx related to Activity 7.1 “Construction of new buildings”, the Group focused on Activity 7.7 “Acquisition and ownership of buildings”.

As summarised in the previous analysis table, all of the Group’s CapEx for Activity 7.7 “Acquisition and ownership of buildings” are considered eligible.

In order to analyse the alignment of Activity 7.7 “Acquisition and ownership of buildings” as part of the climate change mitigation objective, the Group focused on investments related to Ages & Vie (which is its alternative housing offering in France) and applied the criteria of substantial contribution and the DNSH prescribed by Appendix 1 to the regulations.

For buildings with a building permit dated after 31 December 2020, the analysis was carried out on the basis of the “NZEB minus 10%” thresholds, i.e. “RT 2012 minus 10%” for buildings with building permits filed under the 2012 Thermal Regulation or “RE 2020” for buildings with a building permit filed under the 2020 Environmental Regulation.

For buildings with a building permit dated prior to 31 December 2020, the analysis was based on the energy performance certificates and the primary energy consumption thresholds of the top 15% established, in France, by the Sustainable Real Estate Observatory (Observatoire de l’Immobilier Durable);

As the Group is located in Europe, Korian has considered as material the climate risks related to heat waves, drought, soil degradation, severe weather and coastal erosion for its centres close to the sea.

To carry out the physical climate risk analyses, Korian based itself on the pessimistic projections of the IPCC on the lifespan of its buildings (Scenario 8.5). These analyses were carried out on all Ages & Vie sites under construction in 2022.

When a building was particularly exposed to a risk given its geographical position, a plan identifying actions for adapting the asset to the climate risk in question as well as the actions to be implemented was decided.

Concerning Activity 12.1 “Residential care activities”, as it concerns an adaptation activity within the meaning of the taxonomy, an analysis of the physical climate risks (as described in the previous paragraph) and the implementation and definition of an adaptation plan are required in order to consider the CapEx as eligible. Such analyses were carried out during the 2022 financial year for a selection of assets in France and Europe in order to assess whether their CapEx related to new construction of facilities, property buybacks and external growth were eligible. No extrapolation was carried out for assets that were not analysed for physical climate risks, which were therefore considered ineligible.

With regard to the DNSH Pollution relating to Activity 12.1, the Group has validated the existence of a waste management plan for each country where it is present, treating the toxic and pharmaceutical waste, while promoting the recycling and reuse of the other types of waste.

In accordance with the details provided by the European Commission on 19 December 2022, Korian has retained as aligned within the meaning of Activity 12.1:

• ■only climate change adaptation CapEx for existing buildings;
• ■for buildings under construction, all CapEx related to the building are taken into account considering that the adaptation measures are included in the various characteristics of the building (for example, the materials used, the depth of the foundations, etc.) and that it is not possible to identify them separately. In addition to the physical climate risk analyses carried out as part of the eligibility, the new standards in force in the countries of these new constructions promote the adaptation to climate change of the building as a whole.

The overall amount of the Korian group’s operating expenses meeting the definition of the Taxonomy represented 3.0% of total consolidated operating expenses for the 2022 financial year, i.e. €104 million for total operating expenses of €3,531 million. The Group has chosen to apply the materiality exemption allowed by Paragraph 1.1.3.2 of Appendix I of the Delegated Regulation of July 2021.

Korian has ensured compliance with the minimum guarantees. In particular, the Group is subject to and complies with the obligations of the Sapin 2 and Duty of Vigilance acts (see Chapter 3, Section 3.7). All of the Group’s processes related to human rights, labour law, business ethics (see Chapter 3, Section 3.5.6), corruption and taxation (see Chapter 3, Section 3.5.7) are in place and ensure compliance with the requirements of the Taxonomy Regulation. Korian also verifies the quality of its suppliers by auditing them in order to verify the correct application of its Responsible Purchasing Charter and Ethics Charter (see Chapter 3, Section 3.5.2).

In addition, Korian has not been subject to any material judicial convictions in relation to the various dimensions of the minimum guarantees.

The Group is subject to French Act No. 2017-399 of 27 March 2017 pertaining to the corporate duty of vigilance incumbent on parent companies and contracting companies. As such, Korian is required to establish and implement a vigilance plan covering the activities conducted by the Group and any subsidiaries it owns.

The Vigilance Plan sets out the reasonable vigilance mechanisms in place with a view to identifying and preventing:

• ■serious violations of human rights and fundamental freedoms;
• ■violations of personal health and safety;
• ■harm to the environment,

ensuing from activities conducted by the companies owned by Korian, or resulting from the activities carried out by subcontractors or suppliers with which Korian has an established business relationship.

The Vigilance Plan consists of the following mechanisms:

• ■risk mapping system;
• ■regular assessment procedures for subsidiaries, subcontractors and suppliers;
• ■appropriate risk mitigation and prevention measures;
• ■whistleblowing mechanism and alert reception system;
• ■system for tracking the measures implemented and assessing their effectiveness.

The Vigilance Plan first sets out the governance matters relating to the duty of vigilance, the methodology for devising a Vigilance Plan, and the whistleblowing mechanism covering all risks identified in respect of the duty of vigilance.

The table presented on the following pages lists all of the mechanisms in place (assessment procedures, mitigation actions, tracking systems for the measures used) and the results of these in respect of each of the main risks identified. Cross-referencing is included whenever these systems are detailed in another section of the Universal Registration Document.

The implementation of the Vigilance Plan is managed by the General Secretariat, integrating the key functions. The development and deployment of the Vigilance Plan are presented to the Risk, Ethics and Compliance Committee, which meets bimonthly (see Section 1.5).

The General Secretariat decides on the action priorities and the evolution of the plan in close coordination with the Group CSR Department as well as with the Audit Department through a control questionnaire including action points relating to CSR and the duty of vigilance. The Group’s subsidiaries also actively participate in the deployment of the plan through their local manager in charge of implementing compliance actions within their scope.

The Sustainability Accounting Standards Board (SASB) is an American non-profit organisation that has developed a system for classifying industries according to their ESG risks and opportunities. The SASB standards identify environmental, social and governance issues related to the financial performance of each industry, in order to propose indicators of the company's value that are relevant to both investors and companies. As the SASB standards are based on American practices and regulations, some of the indicators are therefore not applicable to the Group.

In 2021, Korian published for the first time a reconciliation of the data included in its Universal Registration Document with the SASB Healthcare Delivery standard, to which the Group adheres.

However, the Healthcare Delivery activity is only one component of the Group’s business (described in Chapter 1 of this Universal Registration Document). The residents and patients of the Group’s post-acute and medico-social facilities are monitored medically (mainly for chronic pathologies), but the Group has no hospital activities and its surgical clinics are located solely in Italy. Some of the indicators of this standard do not, therefore, apply to the Group’s business. In such cases, the Group has proposed, where possible, an alternative indicator to address the topic.

For the financial year ended 31 December 2022 

To the shareholders: 

As an independent third-party body, member of the Mazars network, Korian’s statutory auditor, accredited by COFRAC Inspection under number 3-1058 (scope of accreditation available on www.cofrac.fr), we carried out work aimed at formulating a reasoned opinion expressing a conclusion of moderate assurance on the historical information (recorded or extrapolated) of the consolidated non-financial performance statement, as well as, at the request of the company and outside the scope of accreditation, a conclusion of reasonable assurance on a selection of information, prepared in accordance with the entity’s procedures (hereinafter the “Guidelines”), for the financial year ended 31 December 2022 (hereinafter respectively the “Information” and the “Statement”), presented in the group’s management report in accordance with the provisions of Articles L. 225-102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code. 

Based on the procedures that we implemented, as described in the section “Nature and scope of our work”, and the information that we collected, we did not identify any material anomaly likely to call into question the fact that the consolidated non-financial performance statement complies with the applicable regulatory provisions and that the Information, taken as a whole, is fairly presented, in accordance with the Guidelines. 

List of key performance indicators and other quantitative results considered to be the most important and selection of contributing entities and countries that have been tested in detail.

(√) Information reviewed with reasonable assurance.
 

The year 2022 was marked by a crisis in the long-term care nursing home sector in France and serious questions about the model of care for elderly people, on behalf of the Committee, I want to salute the tremendous daily commitment of all teams. I would also like to thank the Chief Executive Officer, the Chairman of the Board of Directors and the Management teams for their unwavering involvement throughout this year.

The Compensation and Appointments Committee, two-thirds of whose members are independent, met six times to address numerous topics within its remit, in particular setting the CSR performance criteria applicable to the annual and long-term compensation of executive corporate officers and implementation of the employee shareholding plan.

On behalf of the Committee, I am pleased to present the compensation paid during or awarded in respect of the 2022 financial year to corporate officers as well as the proposed compensation policy for the latter for 2023, which will be submitted for approval by shareholders at the 2023 General Meeting.

The compensation policies for 2022 have been applied unchanged from those that received broad support from shareholders at the 2022 General Meeting.

With regard to the variable compensation of the Chief Executive Officer for 2022, the achievement of performance criteria stood at 98.5%. This takes into account the high level of achievement on qualitative criteria, in particular the creation of indices to measure quality of care and the care of patients and residents, as well as the creation of Korian care schools aimed at providing training in care professions to compensate for a general shortage of caregivers in the sector in France and in other countries where the Group operates, and a fulfilment of non-financial criteria that reflect efforts made by the Group towards all its stakeholders.

It is recalled that the payment of variable compensation is subject to approval at the 2023 General Meeting.

The Group’s Human Resources Department participates in the following aspects of the process of formulating and determining the compensation of corporate officers:

• ■it ensures that the compensation policy for corporate officers complies with the various laws and best practices, in particular Say-on-Pay, jointly with the Group General Secretary;
• ■it engages suitable experts to carry out external compensation benchmarking studies, which allow for an objective assessment of the compensation policy and determine whether it is competitive;
• ■it selects external compensation experts to provide input to the meetings of the Compensation and Appointments Committee;
• ■it makes recommendations to the Compensation and Appointments Committee;
• ■it ensures that the compensation offered is fair and consistent with internal and external policies;
• ■it ensures that the compensation policy complies with the Group’s strategy using the associated performance criteria.

The Ethics, Quality and CSR Committee is consulted on the selection and achievement of the non-financial criteria relating to the annual variable compensation and the long-term variable compensation of the Chief Executive Officer and the members of the Group Management Board.

For further information:

• ■Section 4.1.3.3.4 “Ethics, Quality and CSR Committee” of the 2022 Universal Registration Document.

The Audit Committee is consulted on the selection and achievement of financial criteria relating to the annual variable compensation and the long-term variable compensation of the Chief Executive Officer and the members of the Group Management Board.

For further information:

• ■Section 4.1.3.3.1 "Audit Committee" of the 2022 Universal Registration Document

The Compensation and Appointments Committee makes recommendations to the Board of Directors on:

• ■the compensation policy for executive and non-executive corporate officers;
• ■the loyalty programmes for managers and principal senior managers;
• ■the selection of quantifiable and qualitative targets for the Chief Executive Officer’s annual variable compensation;
• ■the determination of achievement thresholds for the performance criteria to be met for the variable compensation of the Chief Executive Officer and for the long-term compensation of the Chief Executive Officer and the relevant principal senior managers;
• ■the Group’s policy on equality in the workplace and equal pay;
• ■projects associated with Group employee savings schemes proposed by the Chief Executive Officer.

In accordance with the AFEP-MEDEF code, the Compensation and Appointments Committee principally comprises Independent Directors and is chaired by an Independent Director.

For further information:

• ■Section 4.1.3.3.2 “Compensation and Appointments Committee” of the 2022 Universal Registration Document.

On the recommendation of the Compensation and Appointments Committee, the Board of Directors determines a compensation policy for corporate officers that is consistent with the Company’s interests, the long-term success of the business and its commercial strategy. The Board decides whether to award long-term compensation to the Chief Executive Officer and, on the proposal of the Chief Executive Officer, to the Group’s principal senior managers.

It ensures, in particular, that the performance criteria, conditions and targets of the annual and long-term variable compensation components are consistent with the strategic plan.

It discusses the business’s policy on equality in the workplace and equal pay.

The Chief Executive Officer and the Chairman of the Board of Directors do not participate in meetings that relate to their own situations.

For further information:

• ■Section 4.1.3.2.1 “Duties and powers of the Board of Directors” of the 2022 Universal Registration Document.

In accordance with the applicable laws and regulations, Korian’s shareholders are invited to vote on:

• ■the compensation policy for corporate officers;
• ■the total compensation and benefits of all kinds paid in respect of their office during the financial year ended or granted in respect of the same financial year to all corporate officers; and
• ■the total compensation and benefits of all kinds paid in respect of their office during the financial year ended or awarded in respect of that financial year to each executive corporate officer.

They are also periodically asked to vote on resolutions relating to the granting of free shares or capital increases restricted to employees in connection with the Group Savings Plan.

In order to maintain dialogue with its stakeholders, Korian regularly communicates with its shareholders and proxy voting agencies. The Group consults these stakeholders in advance on compensation policies. Thus, during the 12 months preceding the publication of this Universal Registration Document, the Group organised several meetings prior to its Annual General Meeting.

The high approval rate of resolutions relating to the compensation policy and the compensation components of executive corporate officers is testament to the quality, transparency and regularity of the dialogue between Korian and its stakeholders.

Over 2022 Korian has continued to develop its network to best respond to the expanding needs for care across Europe:

Care Homes:

• ■acceleration in adapting the network to high dependency needs with 65 facilities refurbished over the year, and 56 facilities have been sold or closed over the last 24 months (around 8% of the network).

Healthcare facilities:

• ■pursuit of the modernisation of Korian network with notably 13 healthcare facilities built or extended in France, bringing the number of facilities restructured to c.50% of the network at the end of 2022. All French healthcare facilities now operating under the Inicea brand;
• ■acquisition of highly specialized healthcare facilities (including Mental Health) in Italy, with strong outpatient capacity: Italian Hospital Group (IHG) in Lazio and Borghi in Lombardia;
• ■development of the European mental health platform with the integration in Spain of ITA Salud and the acquisition of Grupo 5 (closed in January 2023), a high quality and complementary network with embedded growth.

Alternative living solutions:

• ■Ages & Vie now has 243 co-living facilities in France, after completing 79 this year, compared to 44 in 2018;
• ■signature of a second Ages & Vie equity partnership with Banque des Territories and Credit Agricole;
• ■strong growth of home care activities with 330 agencies (+60 in 2022), including 253 in France where the Petits-Fils franchise has become the largest private network, with more than 15,000 clients at the end of 2022.

At end December 2022, Group’s network is composed of 87,994 beds, after the disposals and closings of 69 facilities in the last 24 months. During this period of 2 years the Group has also delivered around 3,500 beds through greenfield development.

Korian set out an ambitious ESG roadmap in 2019 with the majority of the targets set for 2023. At the end of the 2022 financial year a large number of these targets are already achieved.

Regarding the quality of care provided, 68% of Korian facilities have achieved ISO 9001 certification under the quality programme launched in 2019, and Korian’s own Positive Care medical standards have been deployed at 97% of facilities, vs 72% in 2019.

The Group’s Human Resources policy paying off handsomely, with 11.8% of staff now participating in training programmes that lead to professional certification, vs 4% in 2019. The number of work-related accidents fell by 15%. The number of women in the top 150 executives of the Company has now reached 56%.

2022 has also been marked by an active social dialogue and a new milestone in employee’s engagement with the Group’s first employee shareholding scheme:

• ■Korus: a successful pan European shareholding plan with 15% of employees subscribing (25% in France) and now representing 3% of shareholding;
• ■following the transformation into a European company, the signature of an agreement to establish a European Company Works Council.

Finally, the Group supports local communities and plays an active role in protecting the environment. In 2022:

• ■80% of purchasing was done locally in the countries of the Group and 99% of our facilities are involved in local projects;
• ■the Group’s CO2 emissions have been reduced by 24% compared to 2019.

In 2022, revenue totalled €4,534 million, up 5.6%, with a -3.6% impact from disposals and closings in the last 24 months, part of Korian efforts to streamline its asset portfolio in the long-term Care activities.

The overall organic growth of 6.2% reflects positive dynamics in the Group's three activities: 

• ■care homes: the 7.2% organic growth was driven by the Group-wide recovery of occupancy rates and the ramping-up of new facilities in the Netherlands, Spain and the United Kingdom;
• ■healthcare facilities: organic growth is 3.1%, in an activity environment which has normalised, driven by continued enhancement of the network, with notably ambulatory activities growing by 18% at c. €152 million revenue, i.e. c.14% of healthcare revenue;
• ■alternative living solutions: organic growth is 7.5%, with a high growth trajectory fuelled by strong demand pressure in home care as well as assisted living facilities development.

The Group’s EBITDAR in 2022 is €1,090.7 million and the EBITDAR margin is 24.1% reduced by 80 basis points on 2021 reflecting the impact of higher costs passed through in the revenue, notably due to the salary reset in Germany, time lag between tariff increase and costs inflation, and energy costs increase, which represent €20 million.

By country:

• ■In France, Spain and the United-Kingdom(1), revenue growth is +2.7%, and 4.4% organically. The EBITDAR margin is recovering by 110 basis points from 24.8% to 25.9% mainly as a consequence of higher occupancy offsetting staff costs continued increase.

• ■In Germany, reported revenue rose by 1.4%, with 5.6% organic growth. Limited reported growth is the effect of the disposals of 30 facilities during the last two years.
• ■In the Benelux(2) region the reported growth remained high at 13.6% driven by the organic expansion in the Netherlands, as well as dynamic occupancy progress in Belgium. Organic growth stood at 14.0%. The EBITDAR margin decreased to 21.3% (versus 23.6% in 2021) following important pass-through effects, notably in relation salaries increase.
• ■In Italy, revenue was up by +18.4% driven by acquisitions with a continued focus on healthcare services with a training and local cluster approach in key regions. Organic growth was very resilient as well at 6.4% due to high nursing homes occupancy rate and dynamic healthcare activities, notably in outpatient care which register a 17% growth. The EBITDAR margin showed resiliency at 21.0% (versus 20.5% in 2021) in spite of a year marked by costs inflation.

It should be noted that the financial indicators Korian uses to monitor its performance exclude IFRS 16.

EBITDAR is Korian’s preferred indicator for measuring operational performance independently of its real estate strategy. EBITDAR is operating income before rental expenses that do not qualify as IFRS 16 leases, depreciation, amortisation and provisions and other income and expenses.

EBITDA is the aforementioned EBITDAR after rental expenses and thus reflects the performance of the Group’s real estate strategy.

Korian’s EBITDA totalled €607.1 million in 2022, up 1.7% on 2021 (-50 bps in margin from 13.9% to 13.4%), a resilient performance on the back of a stability of rental costs, reflecting Korian active rent management and past investments in Real Estate. Including IFRS 16 impact, EBITDA is €1,003.2 million reflecting a 22.1% margin, down 120 bps vs 2021 in line with EBITDAR margin evolution.

Korian Real Estate portfolio has grown by c.€300 million to €3.5 billion. The capitalisation rate retained by independent expert has increased from 5.3% to 5.4%, reflecting the resilience of the Healthcare asset class in countries where Korian is present. Owned properties represent c.28% of Korian’s network.

Current Earnings before interest and taxes (EBIT) amounted to €315.3 million, i.e. 7.0% of revenue (versus 8.0% in 2021).

The Group’s share of net profit of €52.0 million (vs €113.8 million in 2021) was notably impacted by the exceptionally high level of non-recurring expenses incurred in 2022 for the transformation of the network in France, Germany and Belgium, which required the closing and sale of various facilities.

Non-current assets break down as follows:

• ■goodwill of €3,237.3 million, up by €23.4 million, mainly due to acquisitions in the United Kingdom and Italy and the reclassification, in accordance with IFRS 5, of goodwill allocated to discontinued operations as assets held for sale;
• ■intangible assets with a value of €2,256.7 million;
• ■property, plant and equipment, totalling €3,552.5 million, for an annual increase of €474.4 million;
• ■right-use-assets amounting to €3,451.9 million, vs €3,469.4 million in 2021. This decrease is attributable to the reclassification, in accordance with IFRS 5, of rights of use relating to discontinued operations as assets held for sale, and to disposals in Germany.

Current assets mainly comprise:

• ■trade receivables stood at €440.4 million;
• ■other receivables and current assets totalled €422.9 million, and thus declined by €30.4 million;
• ■cash and cash equivalents came to €733.7 million, down €480.9 million from 2021.

• ■Consolidated equity totalled €3,867.9 million, up €103.5 million versus 2021.
• ■Financial liabilities amounted to €4,508.3 million, up €66.1 million.
• ■Lease liabilities and commitments totalled €3,762.2 million, vs €3,785.3 million in 2021, this decrease being attributable to the reclassification, in accordance with IFRS 5, of lease liabilities relating to discontinued operations as assets held for sale, and to disposals in Germany.

The payment of dividends or any other distribution depends on the Group’s financial results, notably its net profit and its investment policy.

The dividend payment policy is explained in section 7.3.6 of this document. The table below shows the amounts of the dividends and distributed income eligible for the 40% allowance provided for in Article 158, par. 3-2, of the French General Tax Code in respect of the three previous financial years:

There are currently no governmental, court or arbitration proceedings involving the Company, including any pending or threatened proceedings of which the Company is aware, which may have, or have had over the past 12 months, a material impact on the financial position or profitability of the Company and/or the Group.

We are unaware of any significant change in the Group’s financial position since the end of the last financial year for which audited financial statements have been issued.

On 11 January 2023, Korian announced the closing of its acquisition of the Spanish mental health operator Grupo 5 (about 3,000 employees) after obtaining the necessary approvals from regulatory and competition authorities. This acquisition, which should generate revenue of around €120 million in 2023, is in keeping with the Group’s strategy to develop its Healthcare activities and marks a further step in building a leading platform of mental health services in Europe.

Korian’s medium-term financial outlook reflects the evolution of the Group’s strategic priorities and is marked by sustained and essentially organic growth, a rebound in margin amounts after 2023, and prioritisation of investments to reduce the Group’s debt leverage and thus strengthen its statement of financial position.

The significant investments made in the Group’s network in recent years, including the development of outpatient services and the opening of new facilities (around 3,500 beds over the last two years), the normalisation of occupancy rates and activity, as well as price increases reflecting cost increases, currently enable Korian to benefit from strong embedded growth.

The growth prospects are also supported by Korian’s strategic priorities, as part of the “At your side” corporate project, including:

• ■the strengthening of fundamentals, supporting our overall level of activity, beyond the effects of “normalisation”;
• ■the focus on the development of solutions in the alternative living solutions business, in response to a strong acceleration in demand in all the countries where the Group operates.

Korian therefore expects organic growth of more than 8% in 2023, and more than 5% in 2024-2025.

In the short term, margins will grow less quickly than revenue and are expected to be stable in amount in 2023 compared to 2022, reflecting the cost inflation and the repercussions of salary expenses in regulated rates.

From 2024, the evolution of margins should follow the growth in revenue, under the effect of the increase in occupancy rates, the development of outpatient services and home care services.

The Group has invested heavily in the transformation of its network and the diversification of its activities since 2018. The gradual slowdown in investments from 2023 is expected to enable the Group to reduce its debt leverage to below 3.5x in 2023, and to approximately 3x in 2024 and 2025.

Financial year ended 31 December 2022

To Korian’s General Meeting of shareholders:

In performance of the assignment for which we have been appointed by your General Meetings of shareholders, we have audited Korian’s consolidated financial statements for the financial year ended 31 December 2022, as appended to this report.

We certify that, in light of the IFRS accounting framework as adopted in the European Union, the consolidated financial statements are true and accurate and give a fair view of the transactions during the past financial year, as well as of the financial position and assets at the end of the financial year, of the whole comprised of the persons and entities within the consolidation scope.

The opinion expressed above is consistent with the content of our report to the Audit Committee.

Company financial statements (unless otherwise indicated, all amounts are expressed in thousands of euros).

Financial year ended 31 December 2022

To Korian’s General Meeting of shareholders:

In performance of the assignment for which we have been appointed by your General Meetings of shareholders, we have audited Korian’s annual financial statements for the financial year ended 31 December 2022, as appended to this report.

In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company and of the results of its operations for the financial year then ended in accordance with French accounting principles.

The opinion expressed above is consistent with the content of our report to the Audit Committee.

We have performed our audit in accordance with the accounting standards applicable in France. We consider that the information that we have collected is sufficient and appropriate as a basis for our opinion.

Our responsibilities under these standards are described in the section of this report entitled “Responsibilities of the Statutory Auditors in relation to the audit of the annual financial statements”.

At 31 December 2022, Korian’s share capital was divided into 106,505,206 shares with a par value of €5 each, for a total of €532,526,030. All shares are fully paid up.

Each share carries one vote at shareholders’ General Meetings.

In accordance with Article 9 of the Company’s Articles of Association, no shares carry double voting rights.

The Company successively increased its share capital:

• ■on 6 June 2022, for an amount of €124,460, through the issue of 24,892 new shares with a par value of €5 each, following the issuance of fully vested shares to certain employees and corporate officers (see Section 7.2.4.3 of this Universal Registration Document);
• ■on 21 July 2022, for an amount of €544,065, through the issue of 108,813 new shares with a par value of €5 each, following the subscription to the employee shareholding plan pursuant to the 19th resolution of the General Meeting of 27 May 2021;
• ■on 21 July 2022, for an amount of €761,175, through the issue of 152,235 new shares with a par value of €5 each, following the subscription to the employee shareholding plan pursuant to the 20th resolution of the General Meeting of 27 May 2021;
• ■on 21 July 2022, for an amount of €3,128,040, through the issue of 625,608 new shares with a par value of €5 each, following the payment of the dividend in new shares;

The changes in the allocation of the Company’s share capital between 31 December 2020 and 31 December 2022 are shown in the table below.

To the Company’s knowledge, no other shareholder held more than 5% of the share capital or voting rights during the period from 31 December 2021 to 31 December 2022.

In addition, at 31 December 2022, the employee mutual funds “Korian Actionnariat” and “Korus” held 118,232 and 2,590,391 Korian shares, respectively.

Korian is listed on the Euronext Paris stock exchange (Compartment A) and is eligible for the deferred settlement system (SRD).

Shareholder participation in General Meetings is governed by the legislation and regulations in force applicable to companies whose shares are admitted to trading on a regulated market, and by Article 15 of the Company’s Articles of Association.

In accordance with Article 15 of the Articles of Association, all shareholders may, subject to the Board of Directors’ approval upon convening the General Meeting, take part by videoconference and vote by any means of telecommunication or remote transmission, including the Internet, in accordance with the regulations applicable to its usage in force at that time. This decision must be indicated in the notice of meeting and in the convening notice.

The Company’s latest General Meeting was held on 22 June 2022 on first call.

Person responsible for the Universal Registration Document: Mrs Sophie Boissard, Chief Executive Officer.

The Statutory Auditors are selected by the Board of Directors on the recommendation of the Audit Committee, which is responsible for ensuring compliance with the rules requiring the rotation of firms and key signatory partners, in accordance with legal and regulatory provisions and appointed by the Shareholders’ General Meeting.

Mazars and Ernst & Young et Autres are in compliance with the regulations on the rotation of signatory partners (Article L. 822-14 of the French Commercial Code and Article 17 of Regulation (EU) No. 537/2014) as:

• ■Mrs Anne Veaute, the signatory partner of Mazars, certified the Company’s financial statements for the first time for the financial year ended 31 December 2019;
• ■Mrs Anne Herbein, the signatory partner of Ernst & Young et Autres, certified the Company’s financial statements for the first time for the financial year ended 31 December 2022.

Activities relating to the support of fragile people are highly regulated and supervised.

The processes for obtaining operating authorisations, as well as the regulatory framework, vary between countries and sometimes even within regions of the same country.

The pricing of dependency care facilities is regulated in all European countries. The regulatory framework distinguishes between care and medical expenses, on the one hand, financed by health insurance schemes, and accomodations and catering, on the other hand, payable by the resident or patient or covered by social welfare.

The tables below set out the regulations and provisions governing the pricing and financing of healthcare activities and medico-social activities in the seven countries where the Group operates. 

The table below contains a definition of the terms and acronyms used in this Universal Registration Document.

The cross-reference table below identifies the information in this Universal Registration Document that is referred to in the different sections of Annexes 1 and 2 of Commission Regulation (EC) No. 2019/980 of 14 March 2019.