Capio France

Presentation to investors at Capio Clinique de Domont, Paris

March 22, 2017

Philippe Durand, Head of Capio France

2

The company

The market

The strategy

Agenda

3

• Mostly DRG payment since 2005

• Self employed doctors

This is Capio in FranceA significant proportion of Capio

This is Capio in FranceCoherent clusters in key regions

4

Capio France

Sales of 561 MEUR

22 units, mostly MSO :

- 8 emergency hospitals

- 10 local hospitals

- 3 specialist clinics

- 1 day surgery center

734.5 no. of patients out of which

more than 81% are outpatients

>25% market share in surgery

in almost every local market

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A leadership recognized by our peers

This is Capio in FranceRecognized as most advanced in Modern Medicine

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An ambitious training program recognized by industry peers

This is Capio in FranceRecognized as most advanced in Modern Management

2017-03-2120170322 – Investors meeting 7

The company

The market

The strategy

Agenda

Market growth and fundingA solid public financing basis

• Market growth >3% in volumes

but managed c.2% through strong

regulation

• Spendings level is decided

annually by the government and

approved by Parliament

• Public financing remains strong at

78% and stable over time

8

Split of healthcare expenditures (%)

A growing market due to new patients needs

Market growth (%)

9

Total spending on French healthcare expenditure, 20122

EUR bn

Private care

Public care64

48

21

174

GPs and

specialists2

47

47

Medicine,

Surgery,

and Obstetrics

(MSO)

16

Total

healthcare

132

65

67

Rehab.,

post

-acute and

psychiatry

Hospital care

Relevant healthcare market for Capio

GPs and

specialists3

• Private provision

represents c.50% of total

• Relevant market (acute

care) for Capio

represents c. € 20 billion

• Split fairly stable along

the years

The private market leads the change in the industry

Market size and private provisionThe largest private market in Europe

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• To avoid higher

deficits, Government

keeps healthcare

spendings growth as

close as possible from

GDP growth

• Considering volumes

growth higher than

GDP, this drives price

decrease

Healthcare expenditures & GDP

Healthcare environment – price trendsUnder tension to protect deficits

11

Annual % of increase (decrease) 2017

ONDAM - national healthcare spendings target 2,10

Volumes regulation & government cost-cutting plan -3,00

Take back of tax and social cuts (only for private providers) -0,49

Prudential coefficient (*) -0,70

Total price increase (decrease) -2,09

(*) Applicable in case ONDAM target is exceeded

• The Government sets

ONDAM target for the

year

• It then sets tariffs after

taking into

consideration natural

volumes increase and

some cost-cuttings

requests to the

providers

Tariff constructionApplication to March 2017 tariffs

• A market mostly publicly financed but largely privately run

• Fundamental demographic and social trends sustain market

growth

• A strong public regulation seeking for efficiency of the system

and pushing the shift from inpatients to outpatients

• Top private providers focused on quality and productivity have

room to benefit

Capio well positioned due to systematic implementation of Modern Medicine

France – Market summaryConclusion

2017-03-2120170322 – Investors meeting 13

The company

The market

The strategy

Agenda

14

• Increased focus on patient needs

• Mobilize patients through deeper involvement

• Monitor process all along the care chain

• Measure results

The strategyA systematic approach to quality

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Our 2 strategic pillars have positive effects on performance!

Modern Medicine and Modern ManagementQuality drives productivity

Modern Medicine and Modern ManagementFocus on AVLOS reduction

Still room for improvement compared to Swedish practices!

Modern Medicine and Modern ManagementCapio ahead of the market

Source: ATIH and company data

2017-03-2118

From 31 % to 100% depending on the

units!

From 38 % to 92 % on cruciate

ligamentoplasty

The transfers to ambulatory will continue!

Modern Medicine and Modern ManagementAmbulatory is the future of the market

Ambulatory is the future of hospitalization!

Modern Medicine and Modern ManagementCapio is leading the ambulatory trend

Source: ATIH and company data

PURCHASING

ORGANISATION – PROD SUPPORT

HUMAN RESOURCES

IT

MEDICAL PRESCRIPTION

MODERN MEDICINE

MARKETING

Medical protocols drive 80% of our processes and costs

Modern Medicine and Modern ManagementHow do we achieve this?

Modern Medicine and Modern ManagementConsolidation and star network strategy

2007: Importing of Capio

Model to France

Future: Integrated regional hubs

structured along a star networkToday: Strong

regional hubs

Increasing

productivity Closing beds Merging

Consolidation strategy

• A “star network” is a physical and virtual

network around main units

• Modern “main units” with a large set of

activities attracting both patients and doctors

• Several small specialized units (e.g., day

care center, rehabilitation and post-acute,

psychiatry)

• Individual medical practices, consultations

and homecare in areas surrounding Capio’s

clinics

Star network

• Regroup existing facilities into new

facilities

• Optimize flows and cost of

operations

• Attract new doctors and patients

Surgery

Daycare

Consultancies

Maternity

Medicine

Emergencies

Capio clinic

General

practitioners

Proximity care

centres

Day care

centres

Rehab

Specialists

Homecare

Health

Insurance/

Regional Health

Authority

Compli-mentary

Insurances

• Dedicate doctors to

local points of care

• Improve accessibility for

patients

• Attract new patients

Consolidation strategyRegroup facilities to improve leverage

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Increasing

productivity Closing beds Merging

BELHARRA :

Regroup 3 existing clinics

Into a new building

ST VINCENT :

Regroup Orangerie rehab

beds into St Vincent clinic

ORANGE :

Regroupe Provence clinic

on Orange clinic

ATLANTIQUE :

Regroup Mail clinic onto

Atlantique clinic

DOMONT –

Dedicated daycare centre

QUINT FONSEGRIVES:

Regroup 2 existing clinics

in a new building

MEDIPOLE:

Regroup 2 existing clinics

+ 4 clinics from Mutualité

into a new building

Done

To come by 2018

Increased synergies – lower fixed costs – nicer environment

3 programs were sponsored by Regional Health Authorities

2017-03-2123

• Belharra : core unit with

emergency, ICU,

maternity, …

• Aguilera : moving from

surgery to geriatric

medicine; dedicated to

expand our offer in the

South West of the area

• Jean Le Bon : mostly

ambulatory, dedicated to

expand our offer in the

North of the area

• Cardio center : focused

factory, JV with the

public hospital (75%

Capio)

Offer the best medical service to the population through

focused and coordinated centers

1

1

2

2

3

3

4

4

Consolidation and star networkA clear regional footprint: example of the Bayonne area

Capio’s star network in the Val d’Oise region

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- 3

1

1

2

Ermont3

2

The development of Capio in Val d’Oise region is a good example of the implementation of the “star

network”, which saves the healthcare offer by favoring the efficiency of technical equipment, thus

increasing added value for the patient.

3

CCB : Core unit with

emergencies, ICU,

maternity,…

Domont : Dedicated

daycare centre

Cormeilles : Short

stay medical &

surgical center

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• Very strong demand from

GPs

• Can add-on up to 1%

organic growth annually

Completed In Progress

Additional initiativesDevelop the geriatric business

• Strengthening of our actions in

FY17

• European & French levels –

leverage on volumes

• Suppliers should become partners

of modern medicine

• Short-term and long-term actions

2017-03-2126

Additional initiativesStrengthened procurement strategy

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• Connect the patient to

us before and after

treatment

• Before : improved

patient preparation

• After : secures patient

follow-up

Overall improves:

- Service level

- Productivity

- Quality data capture

- Long-term connection to the

patient and GP

Already sponsored by 2 Regional Health Authorities

Additional initiativesDigitalization : the E-Fitback tool

Prices decrease, BUT:

Operating model is designed to drive productivity

Strategy is supported by Health Authorities

Strong local implementations to attract best medical teams

New perspectives for sales development and productivity

(geriatry, digital, procurement)

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A strong asset within Capio

ConclusionStrengthened procurement strategy