Korian Improves Its Operating Performance and Speeds up Its Expansion.

Regulatory News:

Korian (Paris:KORI), a European leader in Ageing Well, is today announcing its half-year earnings for the period ended on 30 June 2015.

HALF-YEAR INCOME STATEMENT

Yann Coléou, Chief Executive Officer of Korian said: "After dedicating all our efforts to ensure the successful mergers with Medica and Curanum in 2014, the priority has now shifted to our business development. As already reported, we are seeing the first positive results of our actions. In this respect, I am particularly pleased to see that our ambitious plans for Germany have come through. I am also pleased by our ability to identify and carry out targeted acquisitions in all our countries of operation. All these achievements help strengthen our project portfolio and maintain our growth track-record in future. I am confident that the Group can reach the financial targets set for 2015 and revenue of €3 billion in 2017”.

Marked increase in international subsidiaries’ operating profitability

2015 H1 revenue reached €1,264 million, up 32.6%, and 2.7% on a pro forma basis. Revenue for France rose by 2.7% pro forma, to €757.9 million. International subsidiaries generated €506.1 million in revenue, up 2.8% pro forma, accounting for 40% of Group revenue.

EBITDAR (EBITDA before rent) came to €340.8 million. It increased by 34.1%, and by 4.0% on a pro forma basis. In France, EBITDAR growth was limited primarily by virtually nil indexation for nursing homes and by a drop of tariffs in post-acute and rehabilitation care. Abroad, EBITDAR was up 8.3% on a pro forma basis, in particular thanks to the sharp improvement in profitability in Germany and Belgium. In Italy, the disposal of unprofitable facilities meant EBITDAR grew notwithstanding the fall in revenue. Overall, international profitability rose by 140 bp to 27.1%.

Chart omitted, chart available on http://www.korian.com/en/Investors/financial-information/financial-press-releases/

EBITDA stood at €171.7 million, up by 39.4%, and by 5.4% on a pro forma basis. Rental costs were controlled, and rose 2.7% including 0.7% for indexation. The cost/income ratio (Rent/EBITDAR) remained stable compared with H1 2014 around 50%, in line with the Group’s objectives. The operating margin (EBITDA as a % of revenue) is 13.6% up 40 bp compared with H1 2014 pro forma.

Pro forma financial income improved by 3.6%. This rise is the result of the continued implementation of the Group’s financing policy throughout 2014 and in early 2015, and is partly offset by carrying costs for cash and cash equivalents.

At €52.7 million in total, Current net profit Group share more than doubled from H1 2014 on a consolidated basis. This is a 7.2% increase on a pro forma basis.

Adequate financial resources to fund growth projects

Korian’s net financial debt at 30 June 2015 amounted to €1,507 million, including real estate debt of €486 million. Restated for this, the debt ratio is 2.9 times EBITDA, which is stable from 31 December 2014.

On 10 July 2015, Korian issued a €179 million multi-tranche Euro PP in bond format. This deal is part of the ongoing effort to diversify the Group’s sources of financing and to extend the maturity of the debt. Following the issue, Korian had €550 million in available cash, of which €400 million in undrawn credit lines.

In the first half of the year, Korian reported €134 million net cash flow from operations, €94 million of which was allocated to investment. Debt ratios are preserved despite the level of investment. Korian thus proves its ability to finance its growth projects.

Development and acquisitions: Korian steps up the pace

With the major milestones of the merger completed, Korian’s focus is now on accelerating its expansion. After a few months and with the support of sound development teams, this vision is now beginning to bear its fruits. Thus, since 1 January 2015, almost 2,600 beds have been added to the operating network, from both planned openings and acquisitions.

In this period, Korian made 10 targeted acquisitions across all its markets, for a total of 27 facilities:

• Germany: 20 facilities acquired;
• Belgium: 4 facilities acquired;
• Italy: 2 facilities acquired;
• France: 1 facility acquired.

In addition to these acquisitions, the Group continued to develop its project portfolio focusing in particular on Germany. Its portfolio now includes 9,055 beds, of which 4,656 to be created. The portfolio of beds to be created grew by close to 1,400 beds over 12 months.

Korian, committed to innovation and quality in Ageing Well

Korian is continuing to promote innovations that benefit its residents and their families. Together with the Institute for Ageing Well, many of the Group's facilities are involved in research to improve the quality of life for our 60,000 residents. Recently, consideration of the interactions between food and medicines on taste buds has resulted in a rethink of our practices in this area, to improve the experience for residents. It highlights the importance of Korian's decision to develop non-pharmacological techniques and approaches to care.

Moreover, conscious of its social and societal responsibility, Korian and its 40 000 employees work very closely with the families and non-profit associations that are striving every day to improve support for the elderly. For example, in conjunction with the 22nd World Alzheimer's Day, on

18 September 2015, staff at the Group's nursing homes in France will join forces together with residents, their families and friends, to support the non-profit association France Alzheimer.

Lastly, as part of a process of continual improvement, the Group is currently undertaking a satisfaction survey of both its residents and its employees. For the first time, this survey is being carried out Europe-wide.

Next event: 4 November 2015 after close of trading

2015 third-quarter revenue

Watch the video of Yann Coléou , CEO of Korian Group who shares its strategy following the release of 2015 half-year earnings: http://www.korian.com/en/Investors/investors/

ABOUT KORIAN

Korian, European leader in Ageing Well, founded in 2003, has the capacity to accommodate more than 59,000 residents and patients in Europe (France, Germany, Italy and Belgium) and employs around 40,000 staff members. The Group manages 620 facilities in four business lines: long-term care nursing homes, post-acute and rehabilitation care clinics, assisted living facilities and home care services.

For more information, please visit the website: www.korian.com

Korian has been listed on Euronext Paris Compartment A since November 2006 and is included in the following indices: SBF 120, CAC Health Care, CAC Mid 60, CAC Mid & Small and MSCI Global Small Cap

Euronext ticker: KORI - ISIN: FR0010386334 – Reuters: KORI.PA – Bloomberg: KORI.FP

(1) Consolidated financial statements: Incorporation of Medica into the scope of consolidation from 1 April 2014.

(2) The Korian pro forma financial statements have been prepared using the following assumptions:

• merger of the Korian and Medica groups on 1 January 2014;
• consolidation of 100% of Kinetika Sardegna on 1 January 2014. A 28% stake was held in Kinetika Sardegna’s share capital until 30 June 2014. It was consolidated using the equity method for the first half of 2014;
• restatement of expenses in the first half of 2014 related to these business combinations (merger expenses, restructuring of financial hedging instruments, other restructuring impacts, etc.), the tax effect of these expenses and charges related to the change in estimate of the provision for impairment of trade receivables.

(3) The 2014 pro forma income statement differs from the pro forma income statement published in the 2014 half-year financial report primarily due to the application of IFRIC 21, the impact of the allocation of the Medica group acquisition costs and the changed estimates for the provision for impairment of trade receivables.

CONSOLIDATED INCOME STATEMENT

Chart omitted, chart available on http://www.korian.com/en/Investors/financial-information/financial-press-releases/

PRO FORMA INCOME STATEMENT

Chart omitted, chart available on http://www.korian.com/en/Investors/financial-information/financial-press-releases/

CONSOLIDATED BALANCE SHEET

Chart omitted, chart available on http://www.korian.com/en/Investors/financial-information/financial-press-releases/

CONSOLIDATED STATEMENT OF CASH FLOW

Chart omitted, chart available on http://www.korian.com/en/Investors/financial-information/financial-press-releases/

View source version on businesswire.com: http://www.businesswire.com/news/home/20150916006382/en/