Key figures 2015–2019 in € '000 Revenues Consolidated profit according to IFRS EBT EBIT EBIT – ratio (%) EBITDA EBITDA – ratio (%) Equity according to IFRS Return on equity (%) Earnings per ordinary share (in €) Number of employees (headcount) Number of cases (patients treated) Beds and places 1 Plus 455 students of specialist health professions. 2015 2016 2017 2018 2019 1,108,189 1,176,349 1,211,077 1,232,908 1,303,898 87,443 90,288 93,138 8.4 154,161 13.9 58,635 60,862 96,993 8.2 156,860 13.3 36,737 37,116 38,697 3.2 97,817 8.1 51,188 63,178 64,943 5.3 125,543 10.2 44,479 54,242 56,804 4.4 125,326 9.6 1,108,713 1,113,383 1,125,256 1,159,222 1,185,809 67.8 1.19 15,654 765,109 5,218 76.5 0.84 16,486 813,747 5,348 76.5 0.53 16,688 836,387 5,370 72.9 0.73 16,985 850,147 5,369 72.7 0.65 17,687 1 860,528 5,312 REVENUES in € billion EBITDA in € million 1.23 1.30 1.21 1.11 1.18 154.2 156.9 125.5 125.3 97.8 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Content Our Mission Highlights of the Year Letter to Shareholders Report of the Supervisory Board The RHÖN-KLINIKUM share A Word with the Board of Management CORPORATE RESPONSIBILITY Corporate Social Responsibility Report Corporate Governance Report GROUP MANAGEMENT REPORT Content Basic Characteristics of the RHÖN-KLINIKUM Group Economic Report Forecast Report Opportunities and Risk Report Reporting pursuant to section 315 (4) HGB CONSOLIDATED FINANCIAL STATEMENTS Content Consolidated Balance Sheet Consolidated Income Statement Consolidated Statement of Comprehensive Income Statement of Changes in Equity Statement of Cash Flows Notes Responsibility Statement Independent Auditor’s Report SUMMARY REPORT OF RHÖN-KLINIKUM AG Balance Sheet and Income Statement Proposed Appropriation of Profit FURTHER INFORMATION Independent Auditor’s Report on Non-Financial Reporting Financial Calendar, Legal Notice (Impressum), Disclaimer 3 4 8 12 19 22 29 51 55 57 71 77 78 84 85 86 88 89 90 91 92 155 156 162 163 164 166 2 RHÖN-KLINIKUM AG | Annual Report 2019

Highlights of the year

HIGHLIGHTS OF THE YEAR July TELE MEDICINE A first in Hesse August MIT Patient care secured at MIT Doctors from Giessen University Hospital for the first time implanted the latest generation of a heart monitor enabling precise monitoring of cardiac activity and transmitting arrhythmia promptly to the doctor. With the aid of an app, patients can share possible symptoms with the doctor via smartphone and RHÖN-KLINIKUM AG has assumed responsibility for the technical operation of the Marburg Ion Beam Therapy Centre (MIT) and Uniklinikum Gießen und Marburg (UKGM) the clinical operations of MIT. MIT is only one of two centres in Germany that offer the possibility of performing heavy ion radiation with actively support their treatment. carbon ions in addition to proton irradiation. September OR October daVinci at UKGM At Uniklinikum Gießen operations are performed with the aid of a robot. The 2.3 million euro daVinci system ensures New CPECT CT in nuclear medicine (FFO) Klinikum Frankfurt (Oder) has one of the most modern SPECT/CT. Combining both procedures in a single less invasive interventions. The doctor is still in charge. device allows for a much more precise and safe diagnosis The robot remains an assistant. of various oncological or heart conditions. November 3.8MILLION EURO JFC FUNDING December TELEMEDICINE Cross-sector care oriented to needs of patients Better quality of life for patients with heart failure – thanks to greater integration of care under a corresponding remuneration model. The funded project underscores the innovative strength of the Company and rounds off the Medgate Deutschland founded Telemedicine has the potential to develop into an additional business field of the Company alongside the core business of hospital services. By establishing Medgate Deutschland, RHÖN-KLINIKUM AG is looking to close the growing gaps in RHÖN Campus approach. physician care, particularly in rural regions. 6 RHÖN-KLINIKUM AG | Annual Report 2019

LETTER TO SHAREHOLDERS Dear Ladies and Gentlemen, Dear Shareholders, Chairman of the Board of Management Stephan Holzinger Before I talk about the challenges and successes of RHÖN-KLINIKUM AG in the 2019 financial year, I would like to take the opportunity to briefly discuss the takeover by Asklepios: the stalemate amongst the major shareholders is now over following the voting majority in RHÖN-KLINIKUM AG reached by the Asklepios-Münch joint venture. The Board of Management will carefully review the offer submitted. Following this review, we will submit a detailed statement on the takeover offer to the shareholders of RHÖN-KLINIKUM AG. Now for a look at the past financial year: in 2019, RHÖN-KLINIKUM AG – like the entire sector – was confronted with a difficult market environment. There were a growing number of insolvencies, distressed sales as well as mergers. These were brought on by the politically motivated shake-up of the market particularly borne from often ill-informed regulation and even more red tape, as well as shortage of qualified staff. In 2019, the Company has also faced greater operative challenges at some of its sites. 8 RHÖN-KLINIKUM AG | Annual Report 2019

LETTER TO SHAREHOLDERS The stalemate among the major shareholders is now over following the voting majority in RHÖN-KLINIKUM AG reached by the Asklepios- Münch joint venture. After a careful review, we will submit a detailed statement on the takeover offer to the shareholders of RHÖN-KLINIKUM AG. The development of the operating result was influenced by several factors: firstly, in the previous year we were able to realise on the balance sheet for the first time the positive results from the agreement on what is referred to as separate accounting at Universitäts- klinikum Gießen und Marburg. That means that EBITDA in 2018 was positively impacted in a one-off amount of 20 million euros. As a counter-effect to the challenges faced in the industry and the operative burdens, we recorded positive effects in the 2019 financial year thanks to higher revenues from the university outpatient units in Giessen and Marburg as well as delayed effects from the earlier Fresenius/Helios transaction. The year 2019 was also marked by the start-up effects of the new Campus Bad Neustadt. There we established our innovative campus approach for a new path-breaking, cross-sector and digitally networked form of patient care on a state-of-the art health campus for rural areas. To achieve this result, hospitals that for decades had previously operated separately had to be moved into a new, huge building complex, the existing hospitals had to be vacated, new medical and building technology as well as new software programs had to be put into service and new processes had to be adopted for all employees involved. All that took longer than planned and had a noticeable negative impact on the trend in our operating result in 2019 – despite this innovative care approach being extremely well received by patients. The potential areas for operative improvement at the Campus Bad Neustadt have been identified, and allocations of responsibilities have been clearly communicated. We therefore expect to achieve noticeable progress with the Campus Bad Neustadt in 2020. With this approach, we already have a working, highly innovative concept, praised by many experts and market partici- pants, by which we can actively engage in the ineluctable shake-up of the market and create an attractive offering particularly for rural regions in Germany. Those holding the reins of political power are well aware that in Germany we still have too many hospitals that are too poorly equipped, not enough qualified staff, and too many patients being treated in the wrong places within the healthcare system – all the while accepting and condoning a policy of a shortage in hospital funding running into the billions that has been perpetuated by the respective federal states now for many years. Politicians, with their biggest and most basic concern being to get re-elected in this country, have settled for an indirect, arbitrary market shake- out currently being played out along socialist-Darwinian lines on the backs of a great number of patients, employees and, in our case, also shareholders. 10 RHÖN-KLINIKUM AG | Annual Report 2019

REPORT OF THE SUPERVISORY BOARD Dear Shareholders, Chairman of the Supervisory Board Eugen Münch In the following I report to you on the work of the Supervisory Board and its committees during the 2019 financial year: Cooperation between Supervisory Board and Board of Management During the 2019 financial year also, the Supervisory Board examined on an ongoing basis and in detail the situation and development of the Company, fully performing the duties incumbent on it by law, the Articles of Association and the Terms of Reference: these include continuously monitoring manage- ment activity and regularly advising the Board of Management in connection with the directing of the Company. At the same time the Supervisory Board, in performing its duties, was at all times guided by the decisive principles of appropriateness, compliance with legal provisions, expediency and efficiency. Observance of these principles by the Board of Management was monitored by regularly reviewing the Company’s general organisation and verify- ing the instruments used for internal risk control. The Supervisory Board was involved in fundamental and important decisions taken by the Board of Management of RHÖN-KLINIKUM AG. The Board of Management as a general rule complied with its information duties, keeping us informed on a timely basis both in written form and orally, with documents and records of relevance for decisions being provided to the Supervisory Board in good time prior to the respective deliberations and formal meetings. The Supervisory Board reviewed the reporting and the infor mation submitted by the Board of Management regarding strategic and operative business performance, compliance issues as well as risks and risk management for plausibility and comprehensibility, advised the Board of Management, discussed issues of develop- ment comprehensively with the Board of Management and also scrutinised the same whenever appropriate. The areas of focus of deliberations in the corporate bodies and with the Board of Management – as already in the previous years as well– were the further strategic development of the Group, with the main focus this year being on issues, projects and measures for implementing new care concepts reflecting the needs of patients. The role of escorting the Board of Management in these changes in an ongoing advisory capacity, e.g. in putting into service the pilot project RHÖN-Campus at Group headquarters in Bad Neustadt an der Saale, the implementation of the new RHÖN flow principle, the entry into telemedicine as well as the digitalisation of the business model, were among the key tasks of the Supervisory Board. 12 RHÖN-KLINIKUM AG | Annual Report 2019

REPORT OF THE SUPERVISORY BOARD The Audit Committee of the Supervisory Board met five times in the year under review (attendance rate: 90 per cent). All meetings were attended by the Board of Management. Two meetings were attended by the statutory auditor, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PWC). For selected agenda items, the committee – as proposed by the Board of Management – consulted the heads of the Internal Auditing, Compliance as well as Accounting, Tax, Controlling and Finance departments, who were available to the committee for additional reports and questions. This committee notably was responsible for reviewing and pre- paring the RHÖN-KLINIKUM AG consolidated annual financial state- ments for financial year 2018. Also reviewed and discussed were the stand-alone financial statements, the management reports and the respective audit reports of the Group subsidiaries which were subjected to critical review by the members of the committee, as well as the proposal on the appropriation of the net distributable profit. The Audit Committee assessed the independence of the auditor designated for auditing the annual financial statements for the 2019 financial year and for the review of the Half-Year Financial Report, obtained the statement regarding the auditor’s independ- ence pursuant to Item 7.2.1 of the German Corporate Governance Code, recommended to the plenary session of the Supervisory Board a proposal for the election of the auditor to be submitted to the Annual General Meeting and – after the election – issued the auditor with the audit mandate and concluded with it a reasonable remuneration agreement for the same. The statutory auditor more- over reported to the committee on orders for services performed in addition to the auditing services rendered. The qualification of the statutory auditor was monitored by the committee. A list of audit items was once again prepared and defined for the audit in 2019. Questions of fundamental importance relating to accounting, corporate planning, the capital base, the supervision of the accounting process, as well as the effectiveness of the internal controlling system, risk management system (including special business risks), and the internal audit system were discussed with the Board of Management and in some cases also with the statutory auditor. The interim reports were thoroughly discussed on a regular basis with the Board of Management prior to their publication, as well as the half-year financial report with the Board of Management and in the presence of the statutory auditor, giving due regard to the review by the latter. The Group controlling report on performance and finance con- trolling submitted quarterly, which forms part of our risk manage- ment system, was thoroughly discussed at every meeting with the Board of Management. Here, the development of service volumes and earnings of the Group and of the individual Group hospitals was also analysed, questioned and discussed with the Board of Management, also with regard to deviations from targets. The body kept itself regularly informed about the activity of the Internal Auditing department by the responsible member of the Board of Management and by reports submitted by the head of Internal Auditing, and examined the auditing plan for 2019 as well as its update. The auditing plan for 2020 was approved. The audit reports of the Internal Auditing department as well as the 2018 activity report were then submitted and discussed with the Board of Management. We kept ourselves informed by the Board of Management on the implementation of the recommendations by the Internal Auditing department through information on the results of follow-up reporting and inspection. We once again satisfied ourselves of the effectiveness of the Internal Auditing department. In updating, and amending during the year under way, of the Declaration of Compliance pursuant to section 161 of the German Stock Corporation Act (Aktiengesetz, AktG) relating to the recom- mendations of the German Corporate Governance Code, the version of 7 February 2017 was reviewed as to its application and duly considered, with a corresponding resolution proposal being submitted to the Supervisory Board as a whole. The Committee was responsible for the preparing the tender procedure for the auditor of the accounts from 2021 and adopted the tender for the audit of the financial statements. For the non-financial declaration at the Company level and Group level to be submitted in the form of a separate condensed non-financial report for 2019, the committee once again adopted a resolution on the performance of a voluntary external audit. The audit assignment was issued on the basis of an offer and by fee agreement to the statutory auditor, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PWC). The Committee for Compliance and Communication serves to advise and supervise the Board of Management and senior executives with respect to compliance with legal and other provisions as well as with regard to communication by the Company with the media and the capital market. To ensure close and non- bureaucratic coordination with the Audit Committee, which, among other things, is responsible for supervising the Internal Auditing department, the chairman of the committee for Compliance and Communication is assigned a seat on the Audit Committee. 14 RHÖN-KLINIKUM AG | Annual Report 2019

REPORT OF THE SUPERVISORY BOARD Annual General Meeting after a prior discussion of the agenda items. Further approval resolutions were adopted for, among other things, the Report of the Supervisory Board, Corporate Governance Report and the Declaration on Corporate Governance pursuant to section 289f of the German Commercial Code (Handelsgesetzbuch, HGB). After the Supervisory Board completed its own review, the separately summarised non-financial report audited by PWC was approved for 2018. At the meeting on 3 July 2019, the plenary session first decided once again to consult an external expert to conduct an efficiency audit regarding the activity of the Supervisory Board. At this meeting the focus of the deliberations, as a result of the reporting from the committee’s work, was on subjects like optimising the care concept at our hospitals to improve economic efficiency and on the control measures required for this to ensure use of resources according to the needs of patients. When submitting the divisional and hospital results, the Board of Management reported exten- sively on the stage reached in the rehabilitation of the Marburg Ion Beam Therapy Centre (MIT GmbH). Another key subject was the analysis of the impending earnings development and the impact of extraordinary effects on earnings planning and annualisation for 2019. At the Supervisory Board meeting on 6 November 2019, the Super- visory Board, in the absence of the Board of Management, first looked at Board of Management matters and issues internal to the Supervisory Board. A special focus continued to be on the impact of the tightened industry-specific regulatory framework conditions on the current and future trend in earnings and counter-measures or strategies to exploit opportunities. A resolution on a recommen- dation by the Audit Committee was adopted for the annually submitted Declaration of Compliance pursuant to section 161 of the German Stock Corporation Act (Aktiengesetz, AktG) regarding the recommendations of the German Corporate Governance Code. Corporate Governance Code and Declaration of Compliance During the past financial year, the Supervisory Board also examined the further development and implementation of the recom- mendations and suggestions as set out in the German Corporate Governance Code. The Declaration of Compliance issued on 8 November 2018 pursuant to section 161 of the AktG as amended during the year under way on 18 January 2019, was revised and, giving due regard to the Code as amended on 7 February 2017, was replaced by an updated Declaration of Compliance issued on 6 November 2019 by the Board of Management and the Super - visory Board. An addition was made by the amendment in the year under way of this Declaration of Compliance on 19 March 2020. The declarations were permanently made available to the share holders on the Company’s website. In accordance with Item 3.10 of the German Corporate Governance Code, the Board of Management and the Supervisory Board jointly report on corporate governance on pages 51ff. of this Annual Report. Examination and approval of the 2019 financial statements The Board of Management adopted the financial statements of the Company and the management report for the year ended 31 December 2019 in accordance with the provisions of the German Commercial Code (HGB), while the consolidated financial statements and Group management report for the year ended 31 December 2019 were adopted pursuant to section 315e of the German Commercial Code (HGB) in accordance with the principles set out in the International Financial Reporting Standards (IFRS). The auditor, PricewaterhouseCoopers GmbH Wirtschaftsprüfungs- gesellschaft, Frankfurt am Main, has examined the financial state- ments of the Company and Management’s report as well as the consolidated financial statements and Management’s consolidated report for the year ended 31 December 2019. The auditors of the accounts issued an unqualified auditor’s report in each case. The financial statements of the Company and management report, the consolidated financial statements and Group management report as well as the reports of the auditors on the result of their audit were received by all members of the Supervisory Board together with the Management’s proposal for the appropriation of the net distributable profit for the year. These documents were examined by the Supervisory Board and extensively discussed by the Audit Committee and by the Supervisory Board with represen- tatives of the auditors at the respective balance sheet meetings. As 16 RHÖN-KLINIKUM AG | Annual Report 2019

REPORT OF THE SUPERVISORY BOARD OVERVIEW OF THE ORGANISATIONAL STRUCTURE OF THE SUPERVISORY BOARD AND COMPOSITION OF THE STANDING COMMITTEES (period of 1 January–31 December 2019) Chair of the Supervisory Board Eugen Münch Chairman Georg Schulze-Ziehaus 1st deputy chairman Wolfgang Mündel 2nd deputy chairman Composition of the committees Investment, Strategy and Finance Committee Mediation Committee Committee for Compliance and Communication Eugen Münch Chairman Dr. Annette Beller Prof. Dr. Ludwig Georg Braun (until 5 June 2019) Jan Hacker (from 24 June 2019) Stefan Härtel Klaus Hanschur Wolfgang Mündel Oliver Salomon Georg Schulze-Ziehaus Personnel Affairs Committee Eugen Münch Chairman Stefan Härtel Dr. Brigitte Mohn Georg Schulze-Ziehaus Eugen Münch Chairman Prof. Dr. Ludwig Georg Braun (until 5 June 2019) Jan Hacker (from 24 June 2019) Meike Jäger Georg Schulze-Ziehaus Audit Committee Wolfgang Mündel Chairman Dr. Annette Beller Peter Berghöfer Meike Jäger Christine Reißner Dr. Katrin Vernau Dr. Annette Beller Chairman Evelin Schiebel Dr. Katrin Vernau Natascha Weihs Medical Innovation and Quality Committee Eugen Münch Chairman Prof. Dr. Ludwig Georg Braun (until 5 June 2019) Prof. Dr. Gerhard Ehninger Jan Hacker (from 24 June 2019) Klaus Hanschur Evelin Schiebel Nomination Committee Eugen Münch Chairman Dr. Brigitte Mohn Wolfgang Mündel 18 RHÖN-KLINIKUM AG | Annual Report 2019

THE RHÖN-KLINIKUM SHARE RHÖN-KLINIKUM SHARE IN COMPARISON in % 130 120 110 100 90 80 70 in € 30 28 26 24 22 20 18 16 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RHÖN-KLINIKUM share SDAX® performance Source: XETRA®. indexed (2 January 2019 = 100) The very small free float and significantly lower average trading volumes compared with previous years have made the share price more vulnerable to external market factors. In addition to geopo- litical and macroeconomic factors, the performance of the RHÖN share was adversely impacted primarily by excessive regulation of the German hospital market. The share was negatively impacted to a significant extent particularly by the expected burden on earn- ings from nursing regulation aimed especially at private hospital operators. The RHÖN-KLINIKUM share is listed in the Prime Standard of the Frankfurt Stock Exchange and represented on the SDAX® share in- dex. At year-end 2019, the 66.96 million non-par shares in issue had a market capitalisation of 1.2 billion euros (previous year: 1.5 billion euros). The RHÖN-KLINIKUM share thus ranked 164th (previous year: 156th) in the index as at 30 December 2019. The mean value of the daily average trading volume on the German stock exchang- es including Xetra® trading stood at 25,557 shares in 2019 (previous year: 40,040 shares). Dividend Our dividend policy is geared to a payout ratio of roughly 40 per cent. With this ratio, our Company secures its investment activity in the medium term and at the same time a reasonable participation of shareholders in the Company’s success. For financial year 2019, the Board of Management and the Super- visory Board therefore propose to the Annual General Meeting the distribution of a dividend of 0.25 euros (previous year: 0.29 euros) per non-par share with dividend entitlement. 20 RHÖN-KLINIKUM AG | Annual Report 2019

A WORD WITH THE BOARD OF MANAGEMENT A word with the Board of Management From left to right PROF. DR. BERND GRIEWING Board Member for Medical STEPHAN HOLZINGER Chairman of the Board of Management DR. GUNTHER K. WEISS Operative Board Member 22 RHÖN-KLINIKUM AG | Annual Report 2019

A WORD WITH THE BOARD OF MANAGEMENT A new remuneration system that seeks to sensibly reflect modern care concepts like the campus model should also reasonably take account of prevention, coordination and networking. PROF. DR. BERND GRIEWING Board Member for Medical In 2019 you announced your entry into the growth market of telemedicine. What goals are you pursuing with Medgate in Germany? STEPHAN HOLZINGER Telemedicine is a market of the future. By entering this field, we are rounding off our clinical portfolio: digital before outpatient before inpatient is the formula we are relying on. In future we will offer straightforward advice and treatment, 365 days a year, for which time and location are no longer relevant. The health- care system is set to be transformed over the coming years and demand for telemedical offerings will grow. Our existing clinical business will of course be maintained. That is because with our campus approach we provide path-breaking healthcare delivery and, with the university hospitals in Giessen and Marburg, have a very important facility in the area of research and teaching whose importance is also highlighted by Asklepios. Telemedicine has the potential of developing into an important business field for our Company. It is only a matter of time before persons under statutory health insurance will also have access to it, as patients increasingly expect modern standards of care. The potential of telemedicine is also revealed by the example of the coronavirus. Generally speaking, its importance will grow. With our commitment in the area of telemedicine, we are making ourselves more independent from the overregulation and arbitrary policy decisions that we experience in the existing business on a daily basis. Business operations of the new company with its registered office in Berlin are scheduled to begin in 2020. PROF. DR. BERND GRIEWING The healthcare system in Germany is currently faced with many different and daunting challenges, particularly in view of the steadily growing medical care gaps in rural regions. To meet these challenges, RHÖN-KLINIKUM AG has been active in the field of telemedicine for many years. Already various telemedical 24 RHÖN-KLINIKUM AG | Annual Report 2019

A WORD WITH THE BOARD OF MANAGEMENT What projects have you implemented in 2019 at the Campus Bad Neustadt? PROF. DR. BERND GRIEWING We have begun implementing the second construction phase. In addition to the construction of an outpatient OR centre, it also includes, among other things, expanding staff apartments and the company kindergarten. With the expansion of our Psychosomatic Clinic to include an inpatient rehabilitation department, this will enable us to meet the rising demand of patients for precisely such services. On 1 January 2020, we also broadened our medical service offering by the Clinic for Neurosurgery. Together with the Clinics for Neurology, Neuro- logical Intensive Care, Neurological Early Rehabilitation as well as Neurological Rehabilitation, the new specialist area forms the Neurological Centre in which patients receive comprehensive treatment and rehabilitation and which benefits from the inter- disciplinary collaboration of all specialist departments. With the new centre – fully consistent with our campus approach – we are making a further step towards full-coverage medical care in rural areas. Telemedicine has the potential of developing into an important business field for our Company. It is only a matter of time before persons under statutory health insurance will also have access to it, as patients increasingly expect modern standards of care. The potential of telemedicine is also revealed by the example of the coronavirus. Generally speaking, its importance will grow. STEPHAN HOLZINGER Chairman of the Board of Management 26 RHÖN-KLINIKUM AG | Annual Report 2019

Corporate Responsibility We assume our medical, ecological and social responsibilities as a provider of health- care services, an employer and a Company. We wholly embrace quality and sustainable commitment as we are convinced that in addition to high-quality medical care a healthy working and living environment is also a necessary part of successful healthcare delivery in the long term. 28 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Sustainability Management and Organisation Material subjects | To identify the issues of relevance for the CSR-RUG, we performed a materiality analysis in 2017. In this process, all relevant departments of the Company as well as the Board of Management were involved. In 2018 and 2019 the results were once again reviewed for relevance and continued to be regarded as material. | For RHÖN-KLINIKUM AG, the following four items within the aspects of social and employee matters identified as material are thus subject to reporting: – Patient well-being – Network medicine – Education – Continued and higher-qualification training | These subjects are of special strategic importance for business development and show the areas in which RHÖN-KLINIKUM AG sees its areas of focus. We report in detail on the objectives, actions and results in the relevant sections as set out for you in the table below. | With the materiality analysis it was determined that the aspects of environmental issues, respect of human rights as well as com- bating corruption and bribery are not material within the meaning of the CSR-RUG. Accordingly, no concepts within the meaning of the German Commercial Code are reported with regard to these aspects. But since we regard both these issues and the subject of supplier management as forming an important part of responsible corporate governance, we report on them voluntarily. | NFR REFERENCING Ensuring integrity at all times is part of our self-perception. | You can find detailed description on the materiality analysis procedure on page 41 of the Annual Report 2017 and in the Annual Report 2018 on pages 56/57. Aspect acc. to section 289 (2) HGB RHÖN-KLINIKUM AG matter Reporting in section Social matters Employee matters Environmental matters Anti-corruption Respect of human rights Patient well-being Network medicine Ongoing, continued and higher-qualification training Subjects not material as defined in law Subjects not material as defined in law Medical excellence Employees Voluntary reporting in section “Environmental protection” Voluntary reporting in section “Compliance” 30 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Medical Excellence MEDICAL EXCELLENCE One of our most important management tasks is to continually improve our medical excellence. We have created interfacility structures to press ahead with network medicine, to introduce innovations and innovative processes and to define and achieve quality at all levels. Control and organisation | Medical excellence is something controllable and predictable. That is why we control and monitor systematically improvements in our medical quality under the management of the head of the Medical division of our Board of Management. These include the areas of – network medicine and innovation, – medical process management, – patient safety, quality management and hygiene. | He also escorts the hospital sites strategically and promotes their interdisciplinary medical exchange. Given that medical excellence is present everywhere in the Group and at all levels, many medical and management staff assist him in his decisions. They are organised in the Medical Board and the expert panels, with medical exchange also taking place at summit meetings and in dialogues between the medical and commercial decision-makers (e.g. MVZ dialogues). Expertise through Medical Board and expert panels | The Medical Board is our standing advisory body which is made up of top-ranking physicians and whose task is to advise the Board of Management and management bodies of the hospitals. Within the Medical Board we prepare for decisions relating to medical- strategic issues and the further development of care quality. The members of the Medical Board work together with their colleagues at the | MEDICAL BOARD – ADVISORY BODY MADE UP OF TOP-RANKING PHYSICIANS Neurology Cardiovascular Medicine Oncology Outpatient Medicine Musculoskeletal Surgery Laboratory Medicine MEDICAL BOARD Anaesthesia Quality and Clinical Risk Management Intensive care Nursing Management Psychiatry/ Psychosomatics Expert panels Hygiene 32 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Medical Excellence | Objectives for patient well-being – Continuous improvement in medical quality – Further enhancement of patient safety through expansion of hygiene management and clinical risk management – Improvement in patient communication and patient services – Analysis and description of patient-relevant core medical processes Numerous measures taken in reporting year 2019 are helping to achieve these objectives. We describe these in detail in the follow- ing sections. Network medicine Successful first year of RHÖN Campus Bad Neustadt | The RHÖN-KLINIKUM Campus Bad Neustadt is pursuing the approach of full-coverage, one-stop care delivery in rural regions. Since the individual clinics moved into the new premises at the beginning of January 2019, patients from a core catchment area of roughly 100 kilometres around the Campus have been provided with comprehensive care at one location. At the RHÖN Campus, they find integrated outpatient and inpatient offerings as well as numerous medical services and care offerings. Specialist doctor’s practices and other medical service providers have set up their offices on site and can now be found in the Centre for Outpatient Medicine. | We will use our experience from commissioning the Campus in future to roll out the campus approach at other suitable sites. Founding of Medgate Deutschland | To expand our offering in the area of digital health and tele- medicine, we established Medgate Deutschland GmbH in December 2019 together with the company Medgate, a globally operating Swiss provider of telemedicine. Business operations are slated to begin in 2020. Patients can obtain medical advice by phone or by video using a smartphone app. This is particularly attractive for patients in rural areas or for those with limited mobility, since it no longer matters how far they are from the doctor. The offering supports our objective of “digital before outpatient before inpatient”. For regulatory reasons in particular, the offering is being addressed initially to private health insurance companies and self-payers. There are also plans to work together with statutory health insurance funds as well as to expand the offering. Expanding intermediate medical care centres | At intermediate care centres at all our sites, our patients find pooled expertise for certain medical fields. In Frankfurt (Oder) it is e.g. geriatrics and in Giessen the oncology centre, the certified emer- gency ward with supraregional trauma centre as well as the old-age trauma centre which was certified by the German Association of Trauma Surgery e. V. (DGU). During the reporting year, we pressed ahead with expanding our centres. For example, Bad Neustadt a. d. Saale was given a Centre for Musculo-Skeletal Surgery and Frankfurt (Oder) a Centre for Vascular Medicine. In Bad Berka we reoriented the Centre for Cardiology through new appointments from the cardiology field. In 2020 we will expand the Outpatient Centre and the Neuromedical Centre in Bad Neustadt by implementing neurosurgery. Improving outpatient treatment | More and more inpatient hospital stays are currently being scru- tinised by the health insurance funds where such cases might have been handled on an outpatient basis. The inpatient sector has to prepare for this development just as much as the outpatient area. For that purpose, we have expanded our reporting internally and established the Expert Panel on Outpatient Medicine made up of members from all hospital sites. Generally, we take the view that we have developed a functioning, long-term solution with the RHÖN Campus approach. | Moreover, we offer two new outpatient services in the financial year: – Outpatient Operation Centre (OOC) at the Campus in Bad Neustadt a. d. Saale (separate new head physician department) In the OOC, surgical procedures are carried out that can be per- formed on an outpatient basis without difficulty. Patients are thus spared the planning and stress associated with a hospital stay lasting several days and can be sent right back home afterwards. 34 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Medical Excellence RHÖN QUALITY CONCEPT Internet pages of selected service areas Statutory quality reports Statutory quality assurance Selected service areas Transparency RHÖN Quality Cockpit Quality comparison IQM findings RHÖN QUALITY CONCEPT Medical- nursing care Combined RHÖN Review Structured RHÖN Quality Dialogue Documentation Coding Management body Medical directorship Hospital management Recommendations Unusual medical findings By site By hospital The RHÖN quality concept | Our RHÖN quality concept is a comprehensive approach towards steadily improving our medical quality. Its most important elements are the RHÖN Quality Cockpit, “structured RHÖN quality dialogues” and “combined RHÖN reviews”. A regular exchange between related disciplines, management bodies, medical directors and the quality management of the sites takes place in structured dialogues and what are referred to as “combined RHÖN reviews”. The results are regularly presented to the Medical division of the Board of Management and in some cases also discussed in the Medical Board. Further development of RHÖN Quality Cockpit | The purpose of the RHÖN Quality Cockpit is to manage our medical quality. We measure and continually assess defined quality indicators and derive improvement measures from them. In 2019 we particularly emphasised statutorily relevant indicators; these were planning-relevant quality indicators and what are referred to as mini- mum volumes. The purpose of the statutorily relevant indicators is to help give patients an orientation basis for choosing a hospital in terms of the best possible quality and patient safety. Survey results from what is referred to as the “White List” of Bertelsmann Stiftung – a guide to better orient people in the healthcare system – are also included in the RHÖN Quality Cockpit. This ensures that in addition to the objective medical results quality patients’ subjective perception is also taken into account. | In addition to the quantitative management, we have established a structured RHÖN quality dialogue through which the Board member for the Medical division can liaise with the hospitals on quality assur- ance and implementing the quality strategy. The experiences gained from this format are included in the work of the Medical Board and the expert panels. | In 2018 we introduced the combined RHÖN reviews (and incidentally were the only hospital group to do so) and continued them in 2019 as well. In this regard, different areas are looked at together and proposals are made for improvement wherever poten- tial is identified: medical and nursing care, documentation and coding 36 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Medical Excellence – During the reporting year we opened the digital theme park Digitale Erlebniswelt. Tomorrow’s healthcare is based on a com prehensive understanding of medical care and patient empower ment. To explain this transformation, visitors to the digital theme park are introduced to new roles, processes and techno logies. This is done by presenting them with a realistic and interactive view of the digital tools used daily in practice and by providing them with comprehensive information. In the second half of 2019 the active world of Digitale Erlebniswelt was initially opened for a limited time to visitors, patients and employees. In the form of planned tours, we will evaluate the acceptance and user-friendliness as well as further develop the theme park Digitale Erlebniswelt. – In the healthcare magazines of our hospitals, we are communi- cating our approach towards comprehensive healthcare with readable reports, interviews, info charts and articles on health- related topics, sports or also nutrition. With the magazines we also present ourselves as an attractive employer. – In one pilot project we are exploring digital anamnesis. In neurology at the Bad Neustadt a. d. Saale site and at the central- ised emergency ward in Frankfurt (Oder), patients in the waiting room fill out medical and administrative questionnaires on a tablet. The data are then transferred directly to their electronic patient file. In Frankfurt (Oder), a comprehensive evaluation is to be performed in 2020. We are also planning to design further medical questionnaires. Based on the results, the possibility of rolling these out over all hospital sites is being reviewed. – With our online appointment management system we can be reached around the clock. In Bad Neustadt, patients can make their appointments for specific consultations online. We expanded this service in 2019. – Furthermore, we are organising a RHÖN health blog addressed to patients, employees and anyone interested in health issues and covering current medical subjects and new topics of rele- vance for patients. – The quality of a hospital’s communication also includes how it manages complaints. If patients have experienced a situation they are not happy about or want to complain, they can contact our complaints management department directly. This may be done by phone, e-mail, normal post or also through a personal meeting with one of the employees of the quality management department. If a complaint has been received, the patient receives a correspond- ing confirmation of receipt directly. The team from the complaints management department document the objection and look into it immediately. Together with the contact persons of the respective specialist department, the case is analysed and a position is stated. In this way patients can be provided as soon as possible with feed- back on their particular concern. We also take each complaint as an opportunity to develop improvement measures by perform- ing an extended analysis across all facilities. Complaints relating to suspected medical malpractice are processed with us directly by the senior management concerned. The chairman of the Board of Management is informed of these complaints. Good commu- nication with our patients is part of our quality. 38 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Employees Our objectives employee area The best of two worlds | We approach our key subjects in the employee area strategically. We have set ourselves the following qualitative objectives: Objectives for continued and higher-qualification training – Qualitative expansion of continued and higher-qualification training programmes at the sites – Expansion of continued training of teaching staff Objectives for training – Qualitative enhancement of training – Continued positioning as attractive employer on employment/training market During the reporting year, we have enhanced our position in these areas through numerous measures. Continued and higher-qualification training | RHÖN-KLINIKUM AG invests in the development of its employees and promotes all professional groups represented within the Group with numerous continued and higher-qualification training. That is just as true for our nursing employees as it is for our doctors and therapists. Physicians, for example, have the option of obtaining supplementary qualifications and of being trained as specialists at all the Company’s sites. | Each hospital organises its further training itself – with its own budget. In this way, we can continue to rely on our time-proven approach of regional training, continued training and higher-quali- fication training. In particular, though, this enables us to specifi- cally take account of the qualification needs of the individual site, thus including the continued training requests and suggestions of employees in the planning. | In 2019, in the context of continued and higher-qualification training at the Group level, an executive staff conference dealing with the subjects of management, communication and conflict manage- ment was held, and was a resounding success. The positive expe- riences we were able to gather from such events in previous years were confirmed. The Board of Management invited medical directors, managing directors, Group managers, nursing directors and human resources directors to attend. Moreover, following on from and build- ing on the nursing summit from 2018, there was a valuable exchange between the site human resources directors and the nursing service directors in preparation for the continuation and further development of the nursing summit. This format is being continued already at the beginning of 2020. Expenditure on continuous, higher-qualification and further training totalled roughly 4 million euros in 2019 – after 3.5 million euros in the previous year. | In 2018 we implemented a learning management system (LMS) that is accessible to every employee. In addition to web-based online training courses it also covers organisation and management of attendance training courses. As the digitalisation of the Company advances, we want to further expand the share of E-learning In the medium term, in parallel to our attendance training courses. In this way we can ideally exploit the advantages of both system under a blended-learning approach with the aim of providing all employees with theoretical knowledge and practical know-how. | Our online offerings are varied. We offer mandatory employ- ment law training courses on the subjects of hygiene, brand and occupational protection, compliance and data privacy. We also convey theoretical knowledge for nursing. Voluntary general course material includes burnout and violence prevention in the healthcare system. In addition to that, there are also course materials which the hospitals have created for their needs. For example, the Bad Neustadt site has its voluntary training course on process management and the possibility of registering via the portal for a attendance training course on addiction prevention. Zentralklink Bad Berka has published numerous handbooks in the library. At the Group level, we inform ourselves regularly on further development opportunities in the areas of soft skills and audio learning with a view to expanding the training offering (on a voluntary basis). | The development of discipline-specific and teaching-pedagogical content for e-learning is done in the schools by specialist groups led by a specialist pedagogical coordinator. Teaching staff training courses with a focus on digitalisation | We regularly provide our instructors with continued training didactically and methodologically – in external and internal train- ing courses. In 2019 the focus was on digitalisation to enable our instructors to familiarise themselves and become proficient in the use of digital media and devices. From a didactic-methodological viewpoint, the focus was on use of digital concepts in courses. In this regard, each instructor follows a continued training schedule created specifically for them through the LMS. IN 2019 WE SPENT ROUGHLY 4 MILLION EUROS ON CONTINUED, HIGHER-QUALIFICATION AND FURTHER TRAINING. 40 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Employees | One measure for raising the quality of training is our digitalisa- tion strategy by which we are digitalising the learning environment of our schools. For this purpose we established a “Team Digital” in 2019 which has already created a medial paedagogical concept for digitalisation and submitted the same to the Bavarian Ministry of Education. Course subjects are equipment planning, interdisciplinary medial instruction concepts and a higher-qualification training concept. The first decisions on the grant of funding from the Federal Government and the Federal State of Bavaria have been obtained. “Experts learning from beginners” very well received | In 2018 we had introduced the teaching project “Experts learning from beginners“ to continuously raise the quality of training. The students prepare a newly learned instruction subject which they present to the specialist staff on the ward or carry out jointly with the specialist staff. In that way the specialist staff reflect on their own activity and can even learn new methods. At the same time, the students can elaborate and put into practice what they have learned from that. It was carried out in practical training for patient nursing at the Bad Neustadt a. d. Saale site and very well received by all those involved. We therefore continued it in 2019 as well. RHÖN-KLINIKUM promotes MINT formation | Arousing interest in medical technology and information tech- nology already among pupils through practice-based approaches is the aim of a cooperation project launched in February 2019. It is aimed at boosting 11th graders’ technical skills in natural sciences and getting them enthusiastic about careers in the medical and health professions. It was designed together with the young researchers’ initiative Initiative Junge Forscherinnen und Forscher e.V. (IJF) in coopera tion with the technical and vocational college Staatliche Fachoberschule und Berufsoberschule Bad Neustadt a. d. Saale. In the “Team Digital” we have developed a medial paedago- gical concept for digitalisation. The project enables the young persons to establish a transfer be- tween theory and practical application in daily clinical practice and to become familiar with specific professional profiles in the healthcare system. During the three-year project period, young scientists of the IJF carry out practice-based experiments at the school. Excursions to the campus in Bad Neustadt a. d. Saale are part of the project. APPRENTICES M/F BY TRAINING PROFESSION ON TWO-YEAR COMPARISON Headcount 984 Apprentices Total 2018 683 167 25 9 66 34 1,526 Apprentices Total 2019 1,217 163 26 7 475 139 Apprentices, nursing professions (nursing, etc.) Apprentices, commercial professions Apprentices, other professions Female Male 42 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Employees EXECUTIVE EMPLOYEES BY MANAGEMENT LEVEL M/F Headcount Management level 1 Management level 2 Management level 3 Total Total Female Male 45 221 1,008 1,274 13 51 439 503 32 170 569 771 Harmonising work and family important to us At the hospitals, shift work defines the lives of many of our employees. We provide for the necessary work-life balance by making working hours as flexible as possible. For example, our employees work under trust-based, flextime or part-time schemes. In 2019, 8,065 employees (45 per cent) were employed part-time. We have entered into individ- ual agreements for each site in which we take account of employees’ personal priorities to a greater extent. In addition to that are clear staff back-up rules, preferred working hours, call service, relief employee pools, and for some activities the possibility of working in a home office. Work-life balance means that an employee’s professional and family life can be combined in a good balance. We are committed to that. Our employees and their families benefit from the extensive offer- ing. For example, we run our own kindergartens or cooperate with local institutions, and in the case of external continued training or a mandatory event provide for individual care options. We also help relatives providing nursing care to harmonise work and the nursing of their relatives. In 2014, Universitätsklinikum Gießen und Marburg (UKGM) signed the charter “Career and Nursing” – an initiative of the Hesse Ministry of Social Affairs and Integration and the Hesse Hospital Association. It has been certified as a family-friendly employer already since 2009, and during the reporting year was once again recertified on a non-forfeitable basis for three years. We provide for occupational safety and health protection The health of our employees is important to us, which is why we engage in company health management at all hospital sites. Within this framework we offer, among other things, preventive offerings on sports and nutrition. To cope with crisis situations, we keep mediation or supervision offerings available. Moreover, at UKGM all executives take part in the programme “Gesund managen” (Engl.: Managing your health) so that they can pass on this attitude and standard to the employees. We furthermore deal intensively with the subject of occupational safety, analyse systematically the workplace design and working situation of our employees and organise Health Week conferences. Through constructional measures, we create good working condi- tions. For example, most of our operating theatres and staff rooms have natural daylight. We are planning to increase the level of safety in our hospitals through de-escalation training. Particularly in the emergency ward, our colleagues and also patients are occasionally exposed to a sharp tone which has to be handled in a professional manner. Fair remuneration thanks to in-house collective agreement and special benefits Job satisfaction is also influenced by fair salary structures. In this regard, our employees benefit from our in-house collective agree- ments that we have negotiated together with the social partners ver.di and Marburger Bund for our hospitals. Compared with the other collective wage scales within the healthcare system, our employees for example enjoy high night-shift premiums exempt of tax, which were just raised by 10% in Frankfurt (Oder), as well as a collective child allowance. Our executive employees enjoy a remuneration scheme with fixed and variable components providing them with incentives to help achieve the Company’s goals. Our collective agreements guarantee the same thing by giving even all our employees a share in the result. With these collective remuneration components, our employees receive non-cash benefits such as public transport passes, employee discounts, gifts or bonuses for events such as weddings, births or Company anniversaries. We pay an allowance for child care and enable employees in Bad Neustadt a. d. Saale e.g. to use night buses free of charge. Offers of our corporate health management are also attractive benefits that are much in demand. 45% WE ENABLE PART-TIME EMPLOYMENT FOR 45% OF OUR EMPLOYEES. 44 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Compliance In addition implementing the rules, we also keep our CMS up-to- date at all times and adapt the rules as required. That is because we want to prevent such breaches from the outset by identifying and averting risks in good time. Adaptations may be occasioned by both internal incidents and information on compliance breaches at similar companies. How we handle compliance reports Through our whistleblower hotline, employees can report com- pliance breaches on an anonymous basis. The contact persons avail- able for this are the compliance officers at the hospitals, the head of the Central Compliance department, the Chairman of the Board of Management of RHÖN-KLINIKUM AG as well as the Chairman of the Supervisory Board Committee for Compliance and Communi- cation. If a compliance report is made through one of the above contact persons, it is sent immediately – regardless of its form or the person submitting it – to the Central Compliance department. The Central Compliance department and the compliance officer then jointly review whether a compliance event exists. If required, they consult the Internal Auditing and Risk Management departments. If the investigations reveal a sufficient suspicion of a breach, they initi- ate appropriate measures to make sure such breach does not happen again in future. Moreover, the team determine the risk and level of damage and prepare a written report to the Chairman of the Board of Management of RHÖN-KLINIKUM AG. According to the provisions in the Rules of Procedure for Compliance, anyone suspecting a com- pliance breach may report the same either to the compliance officer of his or her site or directly to the Central Compliance department. Data protection The General Data Protection Regulation (GDPR) and the resulting revised German federal and state rules on data protection have been in force since 25 May 2018. In addition to provisions on managing personal data in compliance with data protection legislation, they also include various new or amended requirements. In this context, the Board of Management of RHÖN-KLINIKUM AG adopted a data protection guideline which is adapted to the rules and regulations and addresses key points of the new Regulation, presents the Com- pany’s data protection law strategy and sets out the organisational framework for employees. Each hospital has its own compliance officer who reports to the Central Compliance department. In addition to Group-wide statements, for example on data protection management, roles and responsibilities as well as consequences in the event of breaches of requirements of data protection legislation, the guideline also includes information on the operative implemen- tation which is being adapted by the Group-affiliated facilities in the context of their own data protection concepts. The implementation of data protection-compliant actions is rounded off by manifold tech- nical and organisational measures. Internal and external audits help ensure compliance with the requirements and enable the measures established to be improved. In addition, employees and executive staff are given greater awareness of the lawful management of per- sonal data through web-based training and target group-based class- room training sessions. 46 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Environmental protection Switch to lighting based on LED technology At our sites we are gradually switching over to lighting based on modern, dimmable LED technology, for example for outdoor lighting, in multi-storey car parks or on pathways. At the Campus in Bad Neustadt, we have also installed a centralised lighting control system in the ward corridors and public corridors. This system makes it possible control the illumination level depending on the time of day, and thus also energy consumption, in accordance with energy requirements. We generate electricity with our own cogeneration plants We not only save electricity but also generate it. For over 20 years, we have been pursuing efforts in generating our own energy using our highly efficient cogeneration plants (CHPs) that supply electrical energy and heat by burning natural gas. With this energy, we re- duce our CO2 footprint. Parallel to that, we use this heat to generate the required cooling energy with absorption coolers. We thus save electrical energy that would otherwise be needed for cold genera- tion. in 2019, combined heat and power units generated a total of 39.523 megawatt hours (MWh) of electricity, thus covering roughly 41 per cent of our requirements – at the Bad Berka site the figure was even 59 per cent. This is cost-efficient and saves around 1,390 t in CO2 emissions each year as compared with conventional energy supply. Compared with the previous year, electricity consumption at RHÖN-KLINIKUM AG in 2019 increased by approximately 3 per cent to 96,194 MWh. Roughly 56 per cent of the electricity purchased comes from renewable energies. Heat consumption decreased by approximately 7 per cent to 136,752 MWh due to weather conditions. Emissions At RHÖN-KLINIKUM AG, emissions are produced primarily in the form of CO2 from heat generation or electricity purchases. Such emissions can be counteracted by modernisation measures, energy efficiency improvements and by increasing the use of renewable energies. For example, the electricity purchased by us is produced with a significantly higher share of renewable energies compared than the national average. Moreover, for Zentralklinik Bad Berka we are currently developing a future-viable energy concept that will further optimise existing capacities. To further lower the emissions of our hospitals, we are modernising our cooling and heating systems. For example, cooling in Bad Berka in 2019 was brought in line with the latest standards with installation of highly efficient re-cooling units, thus reducing energy and water consumption. The modernisation of the heat supply unit at Marburg University Hospital, Ortenberg site, as well as the installation of a centralised steam generation unit at Giessen University Hospital are planned. The trend towards higher energy requirements of our hospitals is being accompanied in turn by higher CO2 emissions. What are re- ferred to as Scope 1 emissions are produced directly on site in our own heat and electricity generation. During the reporting period, these amounted to over 37,278 t of CO2. Scope 2 emissions cover all indirect emissions from district heating and electricity deliveries. In 2019 they were roughly 26,572 t of CO2. Scope 3 emissions, i.e. emissions produced by suppliers, service providers or by employees during their daily commute to work will not be calculated by us in future either because the effort and cost involved are too high com- pared with the insight gained. Nonetheless, we are endeavouring to lower them. For example, in Bad Berka we are financing the expansion of bus frequency of the bus line between the federal state capital of Erfurt and Zentralklinik, thus making local public transport significant- ly more attractive. This reduces not only individual journeys made for patient visits but also the individual journeys of our commuting employees. Each day, that translates into 50 km of journeying route less per vehicle. Waste For reasons of hygiene, single-use products need to be used at the hospitals in many areas, thus contributing to an increase in waste volumes. We counteract this by a consistent waste management approach: each of our hospitals has its own waste officer. We also regularly train our staff in the proper sorting as well as disposal of waste and the sparing use of consumables. 48 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Social Responsibility Report | Supplier management SUPPLIER MANAGEMENT We have centralised our supplier management activities for the entire Group and work closely with our decentralised purchasing managers of the hospitals. Thanks to this pooling of the purchasing process implemented already from 2018, we have made a positive impact on quality and prices. We value long-term partnerships. This approach has further strength- ened the relationship of trust between our suppliers and ourselves over the past years – with the result that quality, supplier reliabil- ity and efficiency meet our requirements. This is also helped by the annual evaluation of our main suppliers. Thanks to the long-term partnership and the resulting reliability of our suppliers, we reduce the risk of supply shortages. Of course, we cannot eliminate that risk completely since we procure material for our medical equipment and medical supplies almost exclusively from external sources. As a rule, however, we can overcome such shortages when they do occur thanks to our special inventories and market alternatives (generics). We moreover work together with at least two suppliers for each product group. Standardisation and harmonisation for reliable availability Standardisation and harmonising of products is a subject of intensive discussion in the Group within the expert panels with the doctors. The primary objective is to use only those products which on the one hand have proven themselves from a medical standpoint and are characterised by outstanding quality and excellent long-term results, and on the other are economically feasible. As the open discussion amongst the materials management heads and in the medical expert panels has revealed, such standardisation does not lend itself to all products. We use the advantages of standardisation i.a. in the following medical areas: – Endoprosthetics (hips, knees, kyphoplasty) – Cardiology (pacemakers, defibrillators, heart valves, stents) – Anaesthetics (tubing, syringes and sensors) – Laboratory medicine (urine diagnostics, blood gas analysis, i. a.) – Nursing area (urine measurement systems, OR drapes, suction- ing, dressing materials, infusion solutions, sanitary products, i. a.) – Hygiene products (water filters, disinfectants, i. a.) In the non-medical area, we are pursuing for example the standardi- sation of office items or paper, harmonisation of service providers in the technical area as well as changing over our goods management systems to one uniform system for all sites. Key goods categories of RHÖN-KLINIKUM AG are: – drugs and blood products (blood supplies and blood coagulation factors) – transcatheter aortic valve implants (TAVI) – cardiac pacemakers and defibrillators – stents – endoprosthetics – nursing items 50 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Governance Report Dealings of RHÖN-KLINIKUM AG and its subsidiaries with related parties, as well as companies related to such parties, are disclosed in the Consolidated Financial Statements. Contracts entered into with related parties were reviewed and approved by the Supervisory Board. In the view of the Board of Management and the Supervisory Board, such contracts have no impact on the independence of the member of the Supervisory Board. Shareholders and the Annual General Meeting At the Annual General Meeting of the Company, which is normally held within the first six months of each year, the Board of Manage- ment and the Supervisory Board of RHÖN-KLINIKUM AG report to their shareholders on the business performance as well as the finan- cial position and results of operations. Based on the scope of possibilities afforded to them by the Articles of Association, it is stipulated that the shareholders of RHÖN- KLINIKUM AG avail themselves of their rights exclusively at the Annual General Meeting by exercising their voting rights. Share- holders are free to decide whether to exercise their voting rights themselves or through an authorised person of their choice, or may have themselves represented by proxies appointed by the Company for this purpose. Each share confers one vote. In the interests of securing the resolution procedure, we maintain, at the present time, the system whereby voting rights are exercised by attendance in per- son or by legitimised representation at the Annual General Meeting. On the convening of the Annual General Meeting, the Invitation with the Agenda as well as the reports and documents required by law including the Annual Report are made accessible on our website under the Annual General Meeting section. Board of Management and Supervisory Board In keeping with the requirements of German legislation governing joint stock corporations and corporations, RHÖN-KLINIKUM AG has a dual management system subject to the strict separation at the personnel level between the management and supervisory bodies. The Board of Management has powers to direct the Company and the Supervisory Board powers to supervise the Company. The current composition of our Board of Management, the Supervisory Board and its committees is published on our website at www. rhoen- klinikum-ag.com. Simultaneous membership in both corporate bodies is not permissible. To achieve the objective of sustainable value-added, the Board of Management and the Supervisory Board have committed themselves to cooperating closely in a spirit of mutual trust in the best interests of the Company and on the basis of a balanced allocation of duties and responsibilities in accordance with the law, the Articles of Association and the Terms of Reference. The Board of Management informs the Supervisory Board regularly and timely on the current situation of the Company. At the level of RHÖN-KLINIKUM AG and its subsidiaries, the Board of Management has implemented a compliance and risk management system. Our Group-wide compliance management system pursues the aim of ensuring that statutory requirements and ethical codes of conduct are observed over all hierarchical levels. Our Rules of Procedure and Guidelines for Compliance define the relationship with our patients, customers, suppliers, shareholders and the general public, as well as the conduct of employees among one another. Our compliance activities are focused on combating corruption both actively and passively. Thus, any contraventions in the area of corruption are not tolerated and strictly sanctioned at all management and employee levels. The initiation and implementation of measures is event-driven. RHÖN-KLINIKUM AG moreover maintains a whistle-blowing system in which everyone enjoys protection when they report evidence of legal violations within the Company. To identify risks of substantial losses in time, a risk management system has been implemented Group- wide. The risk profile allows the Board of Management to respond early and adequately to changes in the Group’s risk position and to exploit opportunities. Our handling of risks and opportunities is also consistent with the principles of responsible corporate behaviour. The risk management system is reviewed by our auditor as part of the annual audit of the financial statements. Both for members of the Supervisory Board and for members of the Board of Management, RHÖN-KLINIKUM AG has taken out indemnity insurance cover (D&O insurance) with an adequate coverage concept and in accordance with the deductible mandatory in accordance with Code Item 3.8 (2) and (3) GCGC. In this connection, the insurance premium (including insurance tax) paid by the Company in financial year 2019 was € 151 thousand. Management Board The Board of Management is responsible for directing the Company. In accordance with the Terms of Reference, its business operations are carried out under joint responsibility. Each member of the Board of Management has their own areas of responsibility as determined by operative and/or functional competencies. The chairman of the Board of Management is responsible for corporate policy as well as the Group’s fundamental strategic orientation. When filling manage- ment positions within the Company, the Board of Management gives due regard to the principle of diversity and has defined targets at the management levels below the Board of Management which are published in the Declaration on Corporate Governance accessible on our website. The Board of Management reports regularly, without delay and com- prehensively, to the Supervisory Board on all significant issues relating to the business development and position of the Group and its sub- sidiaries. The Board of Management, furthermore, coordinates with the Supervisory Board on the Group’s further strategic development and discusses its implementation. If any events of special significance should arise, the chairman of the Board of Management informs the 52 RHÖN-KLINIKUM AG | Annual Report 2019

CORPORATE RESPONSIBILITY | Corporate Governance Report The Audit Committee prepares the resolutions of the Supervisory Board on the adoption of the annual financial statements and the approval of the consolidated financial statements. This is done by way of a preparatory internal review of the annual financial statements and management reports. It reviews the resolution on the appropria- tion of profit and discusses the annual financial statements and audit reports with the auditor and the Board of Management. The Audit Committee is moreover responsible for selecting and appointing the statutory auditor, including agreeing on the auditing fees and concluding the required agreements pursuant to the German Corporate Governance Code for the performance of the audit of the annual financial statements. Prior thereto, the Audit Committee is required to thoroughly satisfy itself of the independ- ence of the statutory auditor and to assure itself that neither grounds for disqualification nor grounds for bias exist. The Audit Committee is further responsible for reviewing and monitoring the auditor, the auditor’s independence and quality, as well as the services addition- ally provided by the auditor. The monitoring of financial reporting including the interim reports, the accounting process, the effectiveness of the internal controlling system, risk management system and the internal audit system like- wise fall within the scope of duties of the Audit Committee, as does dealing with questions of fundamental importance relating to ac- counting and corporate governance. For all members elected to the Audit Committee, due regard is given to their independence and particular experience and knowledge with regard to the application of accounting rules and internal controlling processes. The chairman of the Audit Committee, Mr. Wolfgang Mündel, possesses the required knowledge of the Company and its market environment given his long-standing membership in the Supervisory Board of RHÖN-KLINIKUM AG. He meets the requirements pursuant to Item 5.3.2 of the German Corporate Governance Code for this challenging position thanks to his qualification as auditor and tax adviser. Mr. Mündel is the 2nd deputy chairman of the Supervisory Board and performs his duties on the Supervisory Board in a full-time capacity. The Audit Committee comprises three financial experts who satisfy the conditions of section 100 (5) AktG. The Investment, Strategy and Finance Committee is responsible for advising the Board of Management regarding the strategy for the Company’s further development. It furthermore adopts resolu- tions pursuant to section 107 (3) AktG on the approval of hospital take overs, on other investments subject to approval and their financing. Reports to be remitted by the Board of Management to the Super visory Board on the Company’s investment and financial development, as well as on fundamental strategic developments, are reviewed and commented by this committee. The Compliance and Communication Committee may be approached in all compliance matters directly by all patients, employees, suppliers and other third parties, and devotes its efforts to advising on and monitoring the Group’s compliance management as well as communication with the media and the capital markets. To ensure close ties to the Audit Committee, the chairman of the Compliance and Communication Committee is also represented on the Audit Committee. She has the right in certain cases to request a special audit. The Nomination Committee selects candidates from the share- holder representatives to be members of the Supervisory Board and proposes them to the Supervisory Board for nomination. The Medical Innovation and Quality Committee works in an advisory capacity, particularly with regard to developments and trends in medicine. It also monitors the development of medical quality at the Company. The Supervisory Board internally reviews the efficiency of its activity on an ongoing basis and at regular intervals arranges for an efficiency audit to be carried out with consultation by an external consultant. In 2019/2020, an independent external audit, which included question- naires and interviews, was once again carried out. Its results were in line with the Supervisory Board’s expectations in terms of the efficient performance of duties. A detailed overview of the work of the individual committees and their composition in financial year 2019 is provided in the Report of the Supervisory Board in the 2019 Annual Report. The remuneration report and the remuneration tables of the Super- visory Board and the Board of Management are disclosed in the Notes to the Group Management Report. Bad Neustadt a. d. Saale, 19 March 2020 The Supervisory Board The Board of Management This Report is published in connection with the Declaration on Corporate Governance on our website at www.rhoen-klinikum-ag.com under the Corporate Governance section. 54 RHÖN-KLINIKUM AG | Annual Report 2019

Group Management Report In financial year 2019, our patient numbers at our hospitals and medical care centres (MVZs) increased by 1.2%. The trend in revenues and EBITDA was in line with the forecast. The operating result is significantly influenced by increasing regulatory intervention, a highly competitive environment and difficult conditions for recruiting qualified staff. Financial year 2019 was also marked by the start-up effects of the new Campus Bad Neustadt. The move of four clinics into the new building complex as well as the related decline in patient numbers adversely affected the trend in operating earnings. In July 2019, a registered bond with a total nominal value of € 60.0 million and a term of 20 years was issued as part of our long-term financing strategy taking advantage of the favourable trend in interest rates. 56 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group The campus approach was first implemented at the Bad Neustadt site. After a construction period of three years, RHÖN-KLINIKUM Campus Bad Neustadt was put into service at the turn of the year 2018/2019 on completion of the first construction phase. As the Campus Bad Neustadt was further developed, the second construction phase was started at the end of 2019. It comprises the expansion of the outpatient OR centre with the establishment of a day-care clinic. In addition, the Psychosomatic Clinic was expanded to include an inpatient rehabilitation department. RHÖN-KLINIKUM AG is thus taking account of the rising demand for such services. On 1 January 2020 we broadened our service offering in Bad Neustadt by the Clinic for Neurosurgery. Together with the Clinics for Neurology and Neurological Intensive Care, Neurological Early Rehabilitation as well as Neurological Rehabilitation, the new specialist area forms the Neurological Centre in which patients receive comprehensive treat- ment and rehabilitation and benefit from the interdisciplinary collab- oration of all specialist departments. With the Neurological Centre and the integration of the Neurological Specialist Department, we are making a further step towards full-coverage medical care in rural areas. In financial year 2019, the effects of putting into service the new facilities initially burdened our result. In financial year 2020, operating processes will be further optimised based on the insights gained. Marburg Ion Beam Therapy Centre (MIT) With effect from 1 January 2019, we assumed financial responsibility for the Marburg Ion Beam Therapy Centre from Universitätsklinikum Heidelberg. Since 1 August 2019, the patients can be treated at MIT under the sole responsibility of Giessen and Marburg University Hospital. We have thus made our contribution towards ensuring high- quality oncological care where a public university hospital had deliberately retreated. Despite a one-year transition period, the number of patients in whom treatment at the ion beam therapy facility was begun was increased to 291 patients. Separate accounting The basis is the agreement reached in 2017 between RHÖN-KLINIKUM AG, Universitätsklinikum Gießen und Marburg GmbH (UKGM), the Federal State of Hesse and the two Universities of Giessen and Marburg pro- viding for a new remuneration scheme for research and teaching at our university hospitals. The agreement concluded now sets out an adequate cost-covering remuneration scheme in this area for the first time. The term of the agreement runs until the end of 2021 but has the potential of serving as a permanent solution beyond the agreed term. UKGM is the third-largest and the only privatised university hospital in Germany. Since 2006, it has been 95.0% owned by RHÖN-KLINIKUM AG also fulfils public statutory tasks in the area of research and teaching. The agreement paved the way for a comprehensive and sustaina- ble investment programme to the tune of € 100.0 million for both university hospitals that will benefit patients, employees and the region of Central Hesse. In financial year 2019, the new construction for the paediatric and juvenile psychiatry facility was commenced i.a. in Marburg. UKGM has moreover undertaken until the end of financial year 2021 to forego redundancies and to take over trainees into per- manent employment if they possess the right qualifications for those positions. In financial year 2019, the Board of Management began negotiations on a new agreement. Digitalisation RHÖN-KLINIKUM AG has pressed ahead further with digital network- ing to integrate all players in the treatment process – communi- ty-based practitioners, hospitals and healthcare service providers. Our objective is to make the work of doctors and nursing staff easier and care for patients even safer and better. The basis for our interfacility information systems and digital applications is a modern, high-per- formance IT infrastructure ensuring the security of patient data. In financial year 2019 we announced the stake we were taking in Tiplu GmbH. Here we are pursuing the goal of securing revenues by improving processes in case coding. We use the coding software Tiplu Momo for complete and performance-based invoicing, revenue securing and duration-of-stay control. The digital applications already in use at our individual sites include digital self-anamnesis, online appointment management as well as the Medical Cockpit used at the Campus Bad Neustadt. This search engine helps process relevant information found in doctor’s letters, OR reports and X-ray findings in structured form and provides the treating medical staff with an interface enabling them to gain a faster and more comprehensive overview. The Cockpit is integrated into the hospital configuration system and accesses a universal archive. Action plan for improving earnings The earnings improvement programme launched in 2017 was read- justed in financial year 2019. Moreover, implementation of the second stage of the optimisation programme with the focus on medical and administrative processes was adopted. Here we are first of all looking to better assess our potential in what are referred to as open-ended feasibility studies. Building on these, the aim is then to establish and implement measures to improve earnings. 58 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group The implications of floors for nursing staff and staffing shortages will result not only in rising personnel costs but also increasing bed closures. Already over one year ago, we took a close look at the respective regional competitive environment and the respective port- folio of medical services. From this analysis we established numerous packages of specific organisational, technical and personnel measures which continue to be consistently implemented but which of course also require a certain lead time. The first successes in this regard area are making themselves felt at individual sites. In a further step, we will review the efficiency reserves in OR, bed, duration-of-stay and discharge management as well as within administration. Throughout the Group we are also striving to further improve patient management to increase comfort for patients as well as prevent mis- referrals and misallocations. Here, software-based innovations are helping us to optimise operative processes in all areas of the hospi- tals. In connection with digitalisation, whose applications include the digital self-anamnesis, the Medical Cockpit or online appointment management, one of our objectives is to make the work of doctors and nursing staff easier and care for patients even safer and better. In future also, we will make acquisitions in line with our strategy as the right market opportunities arise and/or take out strategic stakes in companies with which we can further implement and pursue our digitalisation strategy. In the face of the growing shortage in skilled staff in nursing as well as with doctors and e. g. IT, we will continue our successful recruiting drives and the wide-ranging measures to hire new employees. The numerous personnel measures also include our International Scholar- ship Programme that has been successfully based at RHÖN-KLINIKUM Campus Bad Neustadt for many years. Given the positive experience in this area – both in the integration of foreign doctors and in nurs- ing – we are planning to soon roll out this programme to the other sites of the Group. Our objective is to counter staffing shortages with the structured and systematic recruiting of qualified physician and nursing employees from abroad and to supplement local staffing measures by the programme. In the growth market of telemedicine, we will establish and further expand the telemedical service offering. This is aimed at supple- menting and relieving stresses in existing care structures through upstream telemedical offerings, i. e. providing patients with prompt care by phone and video whenever it is medically appropriate and expedient to do so. 1.4 Controlling system The RHÖN-KLINIKUM AG Group is controlled giving due regard to strategic and financial targets. Our target system defines key figures of relevance for control, such as revenues and EBITDA, as well as key figures for growth in service volumes and consolidated profit. Key ratios are monitored by the Board of Management. Monthly reporting to the Board of Management includes the hospitals. Group management costs are fully distributed to the operative segments. The monthly target-to-actual and actual-to-actual comparison in the report to the Board of Management, by aggregating the operative segments into one reporting segment, serves to control the targets published in the Company forecast. In our view, profitable growth in our service volumes, number of cases or our valuation ratios as well as our revenues are important factors when it comes to increasing our enterprise value. Valuation ratios are key figures used to account for medical services at hospitals. For each group of patients, the respective valuation ratio is obtained in combination with the case-mix index (variable indicating average case severity in the system of diagnosis related groups, DRG). The valuation ratio is thus a measure of how severe a medical case is and also of cost expenditure. If the valuation ratios are multiplied by the base rate, the material amount that a payer (health insurance fund) has to pay to a hospital for an inpatient treatment case is obtained. Through supplementary fees and remuneration, e. g. for new forms of treatment, this amount may increase even further in certain cases. Even if the share of outpatient revenues in controlling-relevant total revenues is increasingly rising, inpatient revenues still represent the most important indicator of financial performance. For the purposes of measuring and controlling, revenues as a general rule are adjusted for consolidation effects so as to calculate organic growth. EBITDA describes our operative performance efficiency before depreciation/amortisation, interest and tax and represents a further important controlling-relevant financial performance indicator. Our objective is to achieve EBITDA margins throughout the financial year which are amongst the most attractive in the hospital market in keep- ing with the orientation of the individual facilities. These margins are defined as the quotient of EBITDA and revenues. Consolidated profit after tax is used to measure and control earnings strength at the Group level. This figure has the biggest influence on earnings per share (EpS) used for capital market communication. 60 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group 1.8 Corporate Governance Issued share capital The subscribed capital of RHÖN-KLINIKUM AG stated in the consoli- dated financial statements is completely made up of 66,962,470 ordinary voting bearer shares (non-par shares) each having a nominal share in the registered share capital of € 2.50. Restrictions on voting rights or the transfer of shares – even if these may result from agree- ments of shareholders – do not exist or are not known to us. None of our shares is issued with special rights that confer on its holder special powers of control. Employees who hold shares exercise their voting right freely. Shareholders may exercise their voting rights themselves at the Annual General Meeting or through proxies appointed for this purpose. Based on the threshold events notified to us, the following picture pursuant to sections 33, 34 of the WpHG in terms of shareholder structure emerges as at the relevant key date of 31 December 2019: Person subject to notification requirement B. Braun Melsungen Aktiengesellschaft Asklepios Kliniken GmbH & Co. KGaA Eugen Münch Ingeborg Münch Landeskrankenhilfe V. V. a. G. Published on Held directly % Attributed % Voting rights held % Date that interest exceeds/falls below the threshold Interest exceeding/ falling below threshold in the case of Notification pursuant to section 33 f. WpHG Attribution pursuant to WpHG/ additional information: 11 March 2019 5 January 2018 0.0005 28 November 2017 26 October 2015 22 October 2018 6.94 5.44 5.21 25.23 25.10 7.61 12 December 2018 29 December 2017 23 November 2017 15 October 2015 19 October 2018 25.23 25.10 14.56 5.44 5.21 >25 % >25 % attributed (section 34 WpHG): B. Braun Melsungen Aktiengesellschaft attributed (section 34 WpHG): Asklepios Kliniken GmbH & Co. KGaA >10 % attributed (section 34 WpHG): HCM SE >5 % >5 % held directly (section 33 WpHG) held directly (section 33 WpHG) Consolidated financial statements, communication with shareholders and analysts The consolidated financial statements are drawn up in accordance with the provisions of International Financial Reporting Standards (IFRS) applicable within the European Union and applying section 315e of the HGB, and audited in accordance with both national and international auditing standards. The half-year financial statements are subjected on a voluntary basis to a review by a statutory audi- tor in accordance with the same aforementioned principles. When issuing auditor mandates, due care is taken to ensure the requisite independence of the auditors appointed. The audit mandate for the annual financial statements and for the half-year financial statements of the Group as well as for the Group's ultimate parent company is issued by the chairman of the Audit Committee after due examination pursuant to the resolutions adopted at the Annual General Meeting. We publish our consolidated financial statements in March of the following financial year. The Annual General Meeting normally takes place within the first six months of the new financial year. We announce our forecasts for the respective financial years in accord- ance with the requirements. We conduct analyst and analysis and investor discussions and also report on business performance in analyst conference calls. With our financial calendar published in the Annual Report and in the Internet on our homepage, we inform our shareholders, shareholder associations, analysts and the media of all other recurring key dates. 62 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group The remuneration of the members of the Board of Management is comprised of a non-results-based and a results-based component as well as short-term and long-term incentives. The non-results-based part is comprised of the basic salary and fringe benefits, and the results-based component covers a management profit sharing com- ponent. Provisions for a minimum remuneration and for a cap on total remuneration have been put in place to compensate for unexpected earnings developments. Moreover, there was a long-term share-based remuneration (virtual stock options) for some former members of the Board of Management which was tied to a long-term development of the RHÖN-KLINIKUM AG share and is disclosed in the Group Man- agement Report. These virtual shares were paid out to the former members of the Board of Management as agreed in financial year 2019. The virtual stock scheme has thus been ended. The contingent retirement benefits are always based on the annual remuneration at the time when the service relationship is terminated. These benefits are thus influenced by the non-results-based and results-based com- ponents of the remuneration scheme. The basic salary as a rule is € 192,000 p.a. and is paid out as non-perfor- mance-linked remuneration in twelve equal monthly instalments. The chairman of the Board of Management is normally entitled to 1.5 times to twice said standard salary or currently a fixed annual basic salary. Any permanent representative of the chairman of the Board of Man- agement can receive a 10% higher basic salary for this. The members of the Board of Management also receive additional non-cash benefits essentially consisting in the value determined by the tax guidelines for use of a company car, the insurance premiums for accident insurance, moving expenses and the D&O insurance. Since use of a company car and the accidence insurance premiums are remuneration components, each individual member of the Board of Management has to pay tax on these benefits. As a general rule, all members of the Board of Man- agement are entitled to these in the same way, the amount of which varies depending on the member's personal situation. The managing profit sharing element represents the results-based component of the remuneration. The multi-year or one-year assess- ment basis for its level is the development of the consolidated result after minority interests in accordance with the currently applicable IFRSs as the reference value. In the event that the consolidated result has been influenced by extraordinary developments, the one-off impacts of such developments are not included. The calculation of the management profit sharing bonuses is adjusted to the changed circumstances of the Group. The provisions for the management profit sharing bonuses of the members of the Board of Management hold- ing office in financial year 2019 comprised the following elements: The assessment basis of the management profit sharing bonuses follows from the average of consolidated results of the last three financial years weighted by the factors of 3, 2 and 1. The consolidated results which are furthest in the past are weighted with the lowest factor. The assessment basis for the chairman of the Board of Man- agement is calculated from the consolidated result of the year less a fixed pre-determined basic amount. The consolidated result used as a basis is the consolidated result after minority interests in accordance with the currently applicable IFRSs. In the event that the consolidated result has been influenced by extraordinary developments, the one- off impacts of such developments are eliminated. The rate of manage- ment profit sharing is defined by the Supervisory Board individually for each member of the Board of Management on recommendation by the Personnel Affairs Committee, giving due regard to the perfor- mance, duties and number of terms of office. Normally, the chairman of the Board of Management receives 1.5 times to twice the rate of management profit sharing. For members and in particular deputy members who have been appointed to the Board of Management for the first time, it is possible to agree on an appropriate reduction in the rates of management profit sharing. This option exists when justified by special grounds, also for the other members of the Board of Management. As of financial year 2016, the members of the Board of Management receive a guaranteed a total annual remuneration (sum of base salary and management profit sharing) of at least € 600,000. The caps are each represented individually and in the Group Management Report. The guaranteed total remuneration for the year is paid out in advance in twelve equal monthly instalments. As a general rule, the minimum remuneration and the cap can be fixed at up to 2.5 times these amounts for the chairman of the Board of Management and at up to twice these amounts for his permanent representative and the chief financial officer (CFO). In the event of a change of control at the level of RHÖN-KLINIKUM AG, the chairman of the Board of Management has the right, within a period of four months, to resign from his Board of Management position and to give notice of termination of his service contract subject to a defined severance package. In 2014, members of the Board of Management holding office during that year were granted an incentive programme of virtual shares. This was a long-term share-based remuneration component. The aim was to support the Company’s re-orientation in the long term. Each incumbent member of the Board of Management in 2014 had received vested virtual shares participating in all capital-adjustment measures and dividends. After five years (as calculated from 2014), the respective (former) members of the Board of Management were remunerated for the remaining virtual shares – as mentioned – as at 13 June 2019 at the average market prices of the previous three months. If a service contract of a member of the Board of Management ends without this being attributable to good cause in the person of such member, or in the event of decease of the member of the Board of Management during such member’s term of office, the member of the Board of Management receives (or, in the event of decease, that member’s heirs receive) an old-age pension benefit in the form of a one-off payment. For each full year of work as member of the Board of Management, this benefit amounts to 0.125 times the annual pay- ments (annual basic salary plus management profit sharing excluding virtual shares) for the calendar year in which such member leaves the Board of Management or deceases – not more than 1.5 times such latter payments, but at least 1.5 times the average remuneration 64 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group in € ’000 Incumbent member of Board of Management Prof. Dr. Bernd Griewing (member of Board of Management) Inducements granted Inflow Base salary (fixed remuneration) Fringe benefits Total One-year variable remuneration Management profit sharing Total payments Pension expense 1 Total remuneration 1 Pension expenditure includes past service cost according to IAS 19. 2019 2018 2019 (min.) 2019 (max.) 192 12 204 1,008 1,212 157 1,369 192 12 204 1,008 1,212 158 1,370 192 12 204 1,008 1,212 157 1,369 192 12 204 1,308 1,512 157 1,669 2019 192 12 204 1,008 1,212 157 1,369 in € ’000 Incumbent member of Board of Management Dr. Gunther K. Weiß (member of Board of Management from 1 May 2018) Base salary (fixed remuneration) Fringe benefits Total One-year variable remuneration Management profit sharing Total payments Pension expense 1 Total remuneration 1 Pension expenditure includes past service cost according to IAS 19. Inducements granted 2019 2018 2019 (min.) 2019 (max.) 192 13 205 708 913 121 1,034 128 8 136 472 608 79 687 192 13 205 708 913 121 1,034 192 13 205 1,308 1,513 121 1,634 Inflow 2019 192 13 205 708 913 121 1,034 2018 192 12 204 1,008 1,212 158 1,370 2018 128 8 136 472 608 79 687 66 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group in € ’000 Former member of Board of Management Jens-Peter Neumann (member of Board of Management until 23 February 2017) Inducements granted 2019 2018 2019 (min.) 2019 (max.) Inflow 2019 0 0 0 0 0 2,353 2,353 0 0 2018 0 901 0 901 0 52 953 1,050 2,400 4,403 Base salary (fixed remuneration) Basic salary (arrears payment for the previous year) Fringe benefits Total One-year variable remuneration Management profit sharing Multi-year variable remuneration Virtual share options Total payments Pension expense 1 Severance payments Total remuneration 0 0 0 0 0 355 355 0 0 355 0 901 0 901 0 0 901 0 2,400 3,301 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,702 1,702 0 0 1,702 2,353 1 Pension expenditure includes past service cost according to IAS 19. On termination of their service contracts, the board members receive a post-retirement benefit when certain conditions are met. This compensation amounts to 12.5% of the annual remuneration owed on the date of termination of the service contract for each full year (twelve full calendar months) of service as member of the Board of Management, but not exceeding 1.5 times such latter remunera- tion. For such post-termination entitlements of the members of the Board of Management, the following provisions have been formed for post-employment benefits: in € ’000 Retirement benefits Incumbent members of the Board of Management Stephan Holzinger Prof. Dr. Bernd Griewing Dr. Gunther K. Weiß Total Provision as at 31 Dec. 2018 Change in retirement benefits Provision as at 31 Dec. 2019 Nominal amount on contract expiry 1 470 469 79 1,018 292 196 136 624 762 665 215 1,642 1,125 750 413 2,288 1 Claim according to expiry of service contract of the incumbent members of the Board of Management based on remuneration. 68 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Basic characteristics of the Rhön-Klinikum Group Expenses (excluding VAT) for members of the Supervisory Board break down as follows: in € ’000 Total payments Eugen Münch Georg Schulze-Ziehaus Wolfgang Mündel Dr. Annette Beller Peter Berghöfer Björn Borgmann (until 28 February 2018) Prof. Dr. h. c. Ludwig Georg Braun (until 5 June 2019) Prof. Dr. Gerhard Ehninger Jan Hacker (from 5 June 2019) Stefan Härtel Klaus Hanschur Meike Jäger Dr. Brigitte Mohn Christine Reißner Oliver Salomon (from 1 March 2018) Evelin Schiebel Dr. Katrin Vernau Natascha Weihs Shareholdings of members of corporate bodies As at 31 December 2019, the members of the Supervisory Board and the Board of Management and their related parties together held, pursuant to Article 19 of the Market Abuse Regulation (MAR), 20% of the Company’s registered share capital, of which the Supervisory Board and its related parties account for 20% of the shares in issue. The members of the Board of Management and their related parties do not hold any interests in the registered share capital. We continue to disclose all transactions of members of the Board of Management and the Supervisory Board which are subject to notifi- cation pursuant to Article 19 of the MAR. Other contracts containing a change-of-control clause The company purchase agreements of the hospitals acquired by us contained provisions according to which, subject to the condition of a change of control as a result of a takeover bid for RHÖN-KLINIKUM AG a re-transfer of the company shares can be demanded. This rang true Fixed basic remuneration Fixed attendance fee Fixed total remuneration Total 2019 Total 2018 120 80 80 36 40 0 14 36 26 40 40 40 36 40 40 40 36 40 32 32 44 52 20 0 8 10 8 16 16 20 8 20 16 22 22 18 200 26 172 73 40 0 11 13 15 26 26 40 10 40 26 26 34 22 352 138 296 161 100 0 33 59 49 82 82 100 54 100 82 88 92 80 357 138 301 172 100 17 73 54 0 82 82 91 56 100 59 80 112 80 784 364 800 1,948 1,954 in particular for Universitätsklinikum Gießen und Marburg GmbH up to the end of financial year 2019. Likewise, various contracts relat- ing to financial instruments exist in which the lenders may demand immediate re-payment in the event of a change of control. In this regard a change of control is defined as the takeover of more than 50% of the interests in RHÖN-KLINIKUM AG. For the anchor share- holders B. Braun Melsungen AG/Asklepios Kliniken GmbH & Co. KGaA/Mr. Münch (HCM SE) and Ms. Münch, exceptions exist in the promissory note loan agreement from financial year 2018 and the registered bond from financial year 2019. According to the contract documentation, no change of control exists if one or more of the anchor shareholders acquire(s) more than 50%, but no more than 70.1% maximum (promissory note loan agreement 2018) or 70.3% (registered bond 2019) of the voting shares in RHÖN-KLINIKUM AG within the group of anchor shareholders. 70 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Economic Report 2.3 Business performance The change in capacities compared with 31 December 2018 is accounted for entirely by our inpatient capacities: 2.3.1 Overall statement on economic position With revenues up by € 71.0 million (5.8%), we record a slight decline in EBITDA by € 0.2 million or 0.2% to € 125.3 million, a decline in EBIT by € 8.1 million or 12.5% to € 56.8 million, as well as a decline in con- solidated profit by € 6.7 million or 13.1% to € 44.5 million in financial year 2019 compared with the same period last year. In this regard it has to be kept in mind that in financial year 2019 provisions for legal and tax risks were reversed in the amount of € 39.2 million based on new information (previous year: € 5.7 mil- lion). Moreover, financial year 2018 was influenced by a one-off pos- itive EBITDA contribution from the agreement reached on separate accounting at Universitätsklinikum Gießen und Marburg to the tune of € 20.0 million. As a counter-effect to the challenges faced in the industry and the operative burdens, such as the implications of nursing staff floors and staffing shortages – which in addition to rising personnel costs are giving rise to increasing bed closures –, we record in financial year 2019 higher revenues from our university outpatient units as well as positive delayed effects from the Fresenius/Helios transac- tion. Consolidated profit was also adversely affected by a provision for fiscal risk in connection with a ruling by the Federal Fiscal Court (Bundesfinanzhof ). Financial year 2019 was also marked by the start-up effects of the new Campus Bad Neustadt. The move of four clinics into the new building complex as well as the related initial decline in patient numbers had an adverse effect on the trend in operating earnings. 2.3.2 Trend in service volumes Approved beds/ places Change 31 Dec. 2019 31 Dec. 2018 absolute % Inpatient capacities Acute hospitals Rehabilitation hospitals and other inpatient facilities Semi-inpatient and day-clinical capacities Total 4,617 4,637 –20 –0.4 500 537 5,117 5,174 195 195 5,312 5,369 –37 –57 0 –57 –6.9 –1.1 0.0 –1.1 With the legal amalgamation of Herz- und Gefäß-Klinik GmbH Bad Neustadt and Neurologische Klinik GmbH Bad Neustadt/Saale as at 1 January 2018 as well as the implementation of the RHÖN Campus approach, the number of hospitals, based on hospital requirement planning as at 1 January 2019, decreased from eleven hospitals to eight hospitals and the number of beds/places from 5,369 beds/ places to 5,312 beds/places. As at 31 December 2019, we operate seven medical care centres with a total of 47.50 specialist practices: Hospitals Beds As at 31 December 2018 11 –3 – 8 Opened/acquired MVZ Bad Neustadt a. d. Saale MVZ Frankfurt (Oder) MVZ Marburg 5,369 –57 – 5,312 Disposals MVZ Marburg As at 31 December 2019 As at 31 December 2018 Amalgamation of subsidiaries Change in capacities As at 31 December 2019 72 Medical care centres Specialist practices 7 – – – – 7 42.00 4.00 1.50 0.25 –0.25 47.50 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Economic Report Compared with financial year 2018, revenues witnessed a rise of € 71.0 million or 5.8%. As in the same period of the previous year, revenue figures include income from the invoicing of an additional remuneration component for the medicamentous treatment of spinal muscle atrophy as well as income from the invoicing of an additional remuneration component for the treatment of multiple sclerosis applied for the first time in the second quarter of 2018. The aforementioned supplementary fees are remuneration along with the pure DRGs (diagnosis related groups) and negatively impacts the materials and consumables used item by nearly the same amount. For the first time as of financial year 2019, revenues include applied cost reimbursements for cancer immunotherapies that negatively impact the materials and consumables used item by the same amount. More- over, in financial year 2019 we were helped by higher revenues from our university outpatient units. In financial year 2019 provisions for legal and tax risks were reversed in the amount of € 39.2 million based on new information (previ- ous year: € 5.7 million). The income was recognised under the other income item. The rise in other income is also accounted for, among other things, by increased sales of pharmaceuticals (including income from the invoicing of a drug for treating MS (multiple sclerosis) that negatively impacts materials and consumables used by the same amount) and cytostatics as well as personnel costs for students of healthcare professions refinanced for the first time. Here it has to be taken into account that in the previous year one-off income of € 12.8 million from the agreement of separate accounting was rec- ognised under this item as well as a further € 7.2 million under the employee benefits expense item: in % Materials ratio Personnel ratio Other cost ratio Depreciation and amortisation ratio Finance result ratio Effective tax ratio 2019 2018 31.3 66.5 10.2 5.2 –0.2 0.8 30.2 64.6 9.9 4.9 –0.2 0.9 Compared with the same period last year, materials and consuma- bles used witnessed a rise in financial year 2019, disproportionate to the rise in revenues, by € 35.5 million or 9.5%. The cost-of-materials ratio climbed from 30.2% to 31.3%. Materials and consumables used includes expenditures for the medicamentous treatment of spinal muscle atrophy, multiple sclerosis, and for the first time from financial year 2019 expenses for cancer immunotherapies (e. g. of CAR T-cell therapy) which are remunerated in nearly the same amount and reported under revenues or other income. Adjusted for this effect, the cost-of-materials ratio increased from 28.5% to 29.5% resulting from the use of material cost-intensive services. As a result of manda- tory adoption of the new standard IFRS 16 “Leases” for the first time as of financial year 2019, expenses previously recorded under mate- rials and consumables used amounting to € 0.7 million are no longer reported under materials and consumables used. The rights of use in the lease properties are amortised over the term of the respective lease contract, with the lease liabilities being charged interest using the effective interest method and recognised at € 0.7 million under depreciation/amortisation and impairments or the finance result. In addition to a rise in the number of employees, general wage increases as well as share-based remuneration of former members of the Board of Management in the form of virtual shares had an expenditure-increasing effect compared with financial year 2018. Moreover, personnel expenses for students of healthcare professions were included in financial year 2019 for the first time, which compared with reimbursement payments in the same amount in the Other income item. The personnel expense ratio rose from 64.6% to 66.5%. The other expenditure ratio rose slightly from 9.9% to 10.2%. As a result of the initial adoption of IFRS 16 “Leases” as of financial year 2019, expenses of financial year 2019 amounting to € 1.6 million previously recorded under the other expenses item are no longer reported under other expenses. The rights of use in the lease prop- erties are amortised over the term of the respective lease contract, with the lease liabilities being charged interest using the effective interest method and recognised at € 1.6 million under depreciation/ amortisation and impairments or the finance result. The negative result from the impairment on financial assets in the amount of € 0.2 million results from IFRS 9, subject to first-time man- datory adoption as of 1 January 2018, which among other things governs the future expected losses of financial assets. The depreciation and impairment item rose compared with the same period of the previous year by € 7.9 million or 13.0% to € 68.5 million. This is attributable among other things to the Campus Bad Neustadt being put into service at the turn of the year 2018/2019. The depre- ciation/amortisation ratio rose from 4.9% to 5.2%. The initial adoption of IFRS 16 “Leases“ as of financial year 2019 results in a total increase of € 2.2 million. The negative finance result deteriorated in financial year 2019 by € 0.9 million to € 2.6 million. This was essentially attributable to finance expenses in connection with the registered bond issued in July 2019 as well as the promissory note issued in October 2018. In connection with the initial adoption of IFRS 16 “Leases“ as of financial year 2019, interest expenses amounting to € 0.1 million are recog- nised under the finance result. 74 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Economic Report The origin and appropriation of our liquidity are shown in the following overview: in € million January to December Cash generated from (+) /cash used in (-) operating activities Cash generated from (+)/cash used in (-) investing activities Cash generated from (+) /cash used in (-) financing activities Change in cash and cash equivalents Cash and cash equivalents at 1 January Cash and cash equivalents as at 31 December of which held-for-sale cash and cash equivalents as at 31 December of which cash and cash equivalents not held for sale as at 31 December 2019 2018 47.3 49.5 –86.7 –125.0 35.1 –4.3 132.3 85.3 9.8 122.5 128.0 132.3 0.3 – 127.7 132.3 In this regard, top priority is given to securing liquidity with the objective of fixing terms at matching maturities and in line with the Company’s planning and project horizon. To secure the Company’s liquidity, internal cash flows are available. Cash is invested on extremely conservative terms. As at the balance sheet date, we have cash investments available in the short term as well as available credit lines together amounting to roughly € 346.1 million. 2.3.5 Investments Aggregate investments of € 103.8 million (previous year: € 187.2 mil- lion) in financial year 2019 are shown in the following table: in € million Use of grants Use of own funds Current investments Takeovers Total 27.5 – 27.5 69.4 6.9 76.3 Total 96.9 6.9 103.8 Cash and cash equivalents decreased in financial year 2019 by € 4.3 million (increase in financial year 2018 by € 9.8 million). In this context, a positive operating cash flow was achieved in the amount of € 47.3 million (previous year: € 49.5 million). The change in cash and cash equivalents compared with the same period of the previous year was on the one hand attributable to the decline of € 38.3 million in cash used in investment activities. Whereas in financial year 2019 investment payments in property, plant and equipment as well as in intangible assets were made in the amount of € 87.0 million, the figure for this item in financial year 2018 was € 146.0 million as a result of the campus new build in Bad Neustadt a. d. Saale. On the other hand, cash generated from financing activities decreased by € 50.2 million. Whereas in financial year 2019 a regis- tered bond with a total nominal value of € 60.0 million was issued, financial year 2018 saw the successful issuing of a promissory note with a total nominal value of € 100.0 million. The finance management department of RHÖN-KLINIKUM Group is essentially centrally organised and encompasses the functions of rais- ing capital, capital investment, Group-internal liquidity management as well as settlement. The processes implemented give due regard to the fundamental principles of checks performed by a second person, segregation of functions as well as transparency. We have established the finance management department as a service provider within our business model. Our finance management has to deal with the competing goals of securing liquidity, minimising risk, and ensuring profitability and flexibility. During financial year 2019, we invested a total of € 103.8 million (previous year: € 187.2 million) in intangible assets, in property, plant and equipment as well as in investment property. Of this total, € 27.5 million (previous year: € 17.4 million) relates to capital expendi- ture funded under the Hospital Financing Act (KHG), with the grants being reflected as a deduction from acquisition cost. In the consolidated financial statements we report net investments of € 76.3 million (previous year: € 169.8 million). Current capital expend- iture accounted for € 69.4 million (previous year: € 169.2 million) and assets and specialist practices acquired on takeovers for € 6.9 million (previous year: € 0.6 million) of total net investments during the year under review. Current investments financed from Company funds of the previous year were dominated by our campus new build in Bad Neustadt a. d. Saale. An analysis of investments financed from company funds by site in financial year 2019 is given below: in € million Gießen, Marburg Bad Neustadt a. d. Saale Bad Berka Frankfurt (Oder) Total 32.6 25.6 11.3 6.8 76.3 76 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Forecast Report | Opportunities and Risk Report Leading economic institutes current see the biggest risk to the econ- omy in a renewed escalation of the trade conflicts between the USA and China or the European Union as well as the structural transforma- tion in the car industry that might come at the expense of well-paid jobs and drive more companies out of the market than previously thought. The jobless rate, according to the German government, will remain stable at roughly 5.0%. The increase in the workforce will continue – albeit at a slower pace. The tightened regulatory regime for hospitals and plans for legis- lation such as the Regulation on Nursing Staff Floors (Pflegepersonal- untergrenzen-Verordnung, PpUGV), the Nursing Staff Strengthening Act (Pflegepersonalstärkungsgesetz, PpSG) and minimum volume requirements will result in a market consolidation which in the end will likely see fewer hospitals in Germany. This is the conclu- sion reached by studies conducted by RWI – Leibnitz-Institut für Wirtschaftsforschung e. V. as well as the Bertelsmann Foundation. Digitalisation, investment financing as well as the spin-off of nursing costs from the DRGs confront hospitals with big challenges. The shortage in skilled staff, particularly in the nursing area and with doctors, will become further exacerbated, making it increasingly dif- ficult to cover the related staffing requirements. According to the DKI, at the end of 2019 three quarters of the hospitals were having problems filling vacancies in intensive care or on general wards. At the national level, some 17,000 nursing positions are vacant – since 2016 an increase of 50% in intensive care and more than 200% on general wards. Technical innovations – innovations from the areas of digitalisation, telemedicine, artificial intelligence, robot assistance – will become increasingly important when it comes to reducing the workload of doctors and nurses. For hospitals to remain economically viable and efficient, they have to gear their strategic targets to the current and future challenges, such as social and demographic change, advances in medical care and technology as well as digitalisation. The latter is providing medicine the opportunity to diagnose and treat patients in future more individually and with greater precision. 3.3 Forecast Also in the coming year, the economic basis of the RHÖN-KLINIKUM Group will be provided by its five large sites in four federal states counting some 5,300 beds and nearly 17,700 employees. That ranks us amongst the large hospital operators in Germany. For the current financial year 2020, we expect revenues of € 1.4 billion within a range of plus or minus 5%. For earnings before interest, tax and depreciation/amortisation (EBITDA), we expect a level of between € 72.5 million and € 82.5 million. This forecast reflects the further heightened regulatory interference by the German legislature compared with 2019, such as the Regu- lation on Nursing Staff Floors (Pflegepersonaluntergrenzen-Verord- nung, PpUGV), the Nursing Staff Strengthening Act (Pflegepersonal- stärkungsgesetz, PpSG) and minimum volume requirements, which will put an additional burden on our Group in financial year 2020 in the low double-digit million euro range. Our outlook is of course subject to any regulatory measures impacting our remuneration structure in 2020. 4 | OPPORTUNITIES AND RISK REPORT A decisive element of a value-oriented and sustainable corporate governance is a company’s wholehearted embracement of risk and opportunity management. The capacity to adequately weigh up opportunities and risks is a crucial factor of entrepreneurial success, and that decisively depends on the quality of the decisions made by a company’s management. Within the Group of RHÖN-KLINIKUM AG, we therefore see managing risks and opportunities and controlling them effectively and on a sustainable basis as a core entrepreneurial task firmly enshrined in our management culture. The objectives of our value-oriented corporate strategy are to protect the Company’s resources from risks of substantial losses and to identify new opportu- nities whilst safeguarding the interests of our shareholders and other capital market participants. Our corporate activity is inseparably bound up with risks and oppor- tunities. As a service provider in the healthcare sector, we operate in an extremely complex risk environment. The challenge for us is to ensure reasonable management of these risks – since it is only companies that recognise their material risks in time and take steps to systematically counter the same that are also able at the same time to identify the opportunities arising and to exploit them in an entre- preneurially responsible manner. This involves continuously weighing up opportunities against the risks. As a provider of healthcare services, we always regard the risk posed to the life and health of our patients and our employees as the greatest risk. We give utmost priority to measures that avoid even the smallest errors in the medical and nurs- ing area. Further factors such as the regulatory and legislative envi- ronment, continually mounting cost, competitive and consolidation pressures within the sector, the rising expectations for the quality of inpatient healthcare delivery and the expectations of patients present opportunities but also involve risks. 78 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Opportunities and Risk Report 4.1.2 Risk assessment Not all risks are to be weighted equally. To ensure efficient risk man- agement, we perform a systematic assessment of the risks identified. Within the context of risk evaluation, the probability of occurrence and potential monetary impact of the risk are determined, also giv- ing due regard to already existing and planned measures. Using a risk matrix, probability of default and impact of risks are classified to the three levels: low, medium and high. Risks whose probability of occurrence and impact are high are classified as posing a threat to the Company’s existence. We classify a medium probability of occur- rence as being greater than 30%, and a high probability of occur- rence as greater than 70%. Generally, all risks meeting the definitions of the Group risk guideline are to be reported, irrespective of their risk amount. Risks posing a threat to the Company’s existence are assessed as high. IMPACT High Medium Low 9 Low 2 Medium High PROBABILITY OF OCCURRENCE Throughout the Group, eleven relevant risks from various risk fields were reported. No risks posing a threat to the Company’s existence were identified. Based on the risk assessment and giving due regard to the measures initiated, all risks are classified as being relatively low. We continue to rate the overall risk position as low. We expect a risk expectation value for the full year of roughly € 1.0 million. Given the developments in service volumes as well as further cost-cutting potential, these risks should not have any material impact on plan- ning for 2020. In addition to risk classification, risks are also categorised in the risk fields below that have an influence on general business performance as well as the development of our net assets, financial position and results of operations: General environment and industry risks We are affected only indirectly by developments in the German econ- omy since healthcare spending is influenced by contribution volumes of the insured and thus by the job market situation. We are for the most part unaffected by foreign economic factors given our exclusive focus on the German healthcare market. For any future potential company transactions and their selection, we continue to follow our dual strategy of digitalisation and the campus model. Any legal risks arising on takeovers or equity investments are reviewed, monitored and evaluated by us as required. As a healthcare service provider, our Company operated under the already known framework conditions over the past financial year as well. These are currently marked by heightened influences from healthcare policy regulation. At the beginning of the year 2019, new regulatory requirements gradually entered into force. In particular the new rules on nursing floors (PpUGV) and the changes brought in in 2020 by the Nursing Staff Strengthening Act (Pflegepersonal- stärkungsgesetz, PpSG) create new levels of bureaucracy, and instead of making the medical and nursing professions more attractive will continue to put a drag on earnings. To implement successfully the dynamic potential and complexity of digitalisation, policy framework conditions have to be created where patients must be the focus of interest. For us, digitalisation is one of the prerequisites for innovations and better healthcare delivery. Two other developments still continue to influence our sector deci- sively. Demand for medical services, in particular also cutting-edge medical services, continues to rise. By contrast, the remuneration of the services provided is not being adjusted adequately and there is an increasing shift of previously inpatient services to the outpatient care sector. The above developments have already been taken into account in our targets. Looking to the future, we will counter them through suitable activities and measures. Further regulatory and industry risks relating to us are classified as very low. The new legislation may lead to further risks for the Group of RHÖN-KLINIKUM AG. Risks to service volumes In Germany, hospitals approved under state hospital planning enjoy de facto state regulated protection in their respective catchment area. Traditional market and revenue risks exist only where site closures are ordered or a hospital’s quality is assessed by referring physicians or by patients as significantly worse than that of neighbouring hospitals. In the latter case, that results in large numbers of patients switching to other hospitals. The increasing auditing activities of the Medical 80 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Opportunities and Risk Report necessary young talent for our staff. At the same time we have gradu- ally expanded our internal training capacities and i.a. have partnered to help design a new specific curriculum “Digital Medicine, eHealth and Telemedicine” for young doctors at the University of Giessen. We also want to gradually introduce the international scholarship scheme of Campus Bad Neustadt at our other sites to better integrate foreign nursing staff. Given the establishment and expansion of structured recruiting and qualification concepts for doctors, nursing and health- care professions as well as for our executive talent, however, we cur- rently see opportunities to efficiently counteract the current shortage of personnel and currently still classify personnel risks throughout the Group as relatively low. Procurement risks For materials procurement in the areas of medical facilities, equip- ment as well as supplies, we rely on external providers. These business ties can give rise to risks that are triggered, for example, by delivery and quality problems. Particularly affected by supply shortages and the procurement of alternative drugs are consumption-intensive spe- cialist departments such as neurology and oncology. In the context of the programme of measures, Materials Management is currently undertaking intensive and systematic efforts to reach Group contract agreements as well as to overhaul and simplify the product range and to optimise internal procurement processes. By ongoing market and product monitoring we moreover ensure that dependency on sole suppliers, on single products and service providers is kept to a bare minimum and classify the risk position in this area also as low overall. Financial risks Our Company is characterised by a high and sound capital base, a sustainable internal financing strength and a strong liquidity position in the triple-digit million euro range. In the wake of the strategic reorientation in 2014, we redeemed all financial liabilities. In Octo- ber 2018 we issued a promissory note in the amount of € 100.0 mil- lion. In July 2019 we expanded our strategic financing by the long- term component of a registered bond with a total nominal value of € 60.0 million. We see both issues as a sensible complement to our syndicated line of credit taken out already in October 2017 as an integral part of our long-term financing strategy. A combination of exclusively fixed-interest tranches with different maturities pro- vides for long-term financing and planning certainty. We currently see no financing and liquidity risks. Since we operate exclusively in Germany, we are not subject to any transaction and currency risks. No securities (except for 24,000 treasury shares) are held within the Group of RHÖN-KLINIKUM AG. Likewise, there are no corresponding credit rating and share price risks eith. Overall assessment RHÖN-KLINIKUM AG has implemented risk reduction measures. In the context of the risk evaluation for financial year 2019 on a net view of risks, no risks were identified that are or will be very likely to have a serious adverse impact on the aspects. Neither were any risks posing a threat to the Company’s existence reported. The principles of the statutorily prescribed system of early identification of risks jeopard- ising the Company’s existence were continued in the reporting year as in the previous years. As an overall assessment based on our analysis of the risk position within the Group and at its subsidiaries for financial year 2019, we have concluded that there are no risks that could endanger the exist- ence of the subsidiaries or the Group of RHÖN-KLINIKUM AG, and do not see any matters having an adverse effect on corporate develop- ment. The risks at the individual companies as well as at the Group as a whole continue to be rated as low. 4.2 Report on opportunities To take advantage of opportunities, it is sometimes necessary to deliberately accept potential risks. Taking just one example: any medical intervention will expose patients to a risk, but at the same time also holds out the prospect or opportunity of recovery and/or cure. Our management of opportunities thus covers the totality of all measures promoting the systematic and transparent handling of opportunities. We control and optimise our processes and strategies on a contin- uous basis. For example, we have further pursued our activities to optimise our sites by reviewing their service portfolios and identify- ing performance potential. The process and communication paths involved are analogous to risk management. Similar to the concept of risks, we understand opportunities as events and potential developments within and outside RHÖN-KLINIKUM AG that might favourably impact the achievement of the Company’s stated objectives, future performance of tasks as well as the quality and reputation of RHÖN-KLINIKUM AG. Steadily increasing regulation from new legislation, especially in the field of nursing financing, is putting the hospital sector before tre- mendous challenges which foreseeably will lead to a fundamental changes in the hospital sector. RHÖN-KLINIKUM AG wants to seize the opportunities that such market shake-up will entail. We see ourselves in a very good position, also given how our portfolio of hospitals has been adjusted. Our Company has a moderate level of debt and 82 RHÖN-KLINIKUM AG | Annual Report 2019

GROUP MANAGEMENT REPORT | Reporting pursuant to section 315 (4) of the German Commercial Code (Handelsgesetzbuch, HGB) 5 | REPORTING PURSUANT TO SECTION 315 (4) OF THE GERMAN COMMERCIAL CODE (HANDELSGESETZBUCH, HGB) ON INTERNAL CONTROL AND RISK MAN- AGEMENT SYSTEMS PERTAINING TO THE ACCOUNTING PROCESS Within the Group of RHÖN-KLINIKUM AG, the accounting-related internal control system is made up of the internal control and the internal monitoring system that ensures preparation of the annual financial statements for the Group of RHÖN-KLINIKUM AG and RHÖN-KLINIKUM AG itself and its subsidiaries. As a component of the internal control system, the risk management system, with reference to accounting, is also concerned with the risk of misstatements in accounting as well as in external reporting. The accounting-related internal control system within our Group embraces all principles, processes and measures to ensure the effec- tiveness, efficiency and adequacy of accounting as well as compliance with the relevant legal regulations. The Group’s accounting process is organised in such a way that for each of the subsidiaries on each reporting date – i. e. monthly, quar- terly and annually – a financial statement according to the HGB is prepared in the Group’s own data centres based on a uniform Group- wide accounting guideline and a uniform Group-wide accounting programme. From these financial statements, a consolidated financial statement is derived for each quarter in accordance with the Interna- tional Financial Reporting Standards (IFRSs). The data for the financial statements of the subsidiaries are aggregated to form one consoli- dated financial statement using certified consolidation software after capital consolidation and a consolidation of expenses and earnings, receivables and liabilities as well as an elimination of any intercom- pany profits. IFRS-relevant revaluations and/or reclassifications are performed at the Group level according to uniform accounting and valuation methods. After the end of the respective reporting date, the financial state- ments are reported promptly to the Group accounting department and then prepared and published. The financial statements are ana- lysed, subjected to a plausibility test and evaluated together with the controlling department and in certain cases also with the Internal auditing department. Both for the preparation of the separate financial statements accord- ing to HGB and for the preparation of the consolidated financial statements according to the valid IFRS, comprehensive accounting requirements and guidelines whose compliance is strictly monitored are observed to ensure uniform accounting. Responsibilities for the preparation of the annual financial statements are clearly defined both for the individual companies and within the Group. The controls applied in this context, which depending on the specific case may be preventive or downstream, manual or automated, give due regard to the principles of segregation of functions. The quarterly financial statements, the half-year financial statements and the annual financial statements are submitted for review to the Audit Committee of the Supervisory Board. The findings of the Audit Committee are documented. Moreover, the Audit Committee also regularly engages the statutory auditor to conduct an accounting- related in-depth audit. If the examinations by the Audit Committee and of the statutory auditor call for improvements in the Group accounting process, these are implemented without delay. Bad Neustadt a. d. Saale, 14 February 2020 The Board of Management Prof. Dr. Bernd Griewing Stephan Holzinger Dr. Gunther K. Weiß 84 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Consolidated balance sheet Consolidated balance sheet 31 DECEMBER 2019 ASSETS in € '000 Non-current assets Goodwill and other intangible assets Property, plant and equipment Investment property Investments accounted for using the equity method Deferred tax assets Other financial assets Current assets Inventories Trade receivables Other financial assets Other assets Current income tax assets Cash and cash equivalents Held-for-sale assets Notes 31 Dec. 2019 31 Dec. 2018 6.1 6.2 9.3.3 6.4 6.3 6.5 6.6 6.7 6.8 6.9 6.10 6.11 4 178,128 858,151 2,349 388 626 29,290 176,707 852,100 2,490 390 3,178 4,682 1,068,932 1,039,547 28,437 226,606 167,928 10,479 1,482 127,694 361 25,939 212,376 169,276 7,820 2,047 132,283 – 562,987 549,741 1,631,919 1,589,288 86 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Consolidated income statement Consolidated income statement 1 JANUARY TO 31 DECEMBER 2019 in € '000 Revenues Other income Materials and consumables used Employee benefits expense Depreciation/amortisation and impairment Other expenses Result of impairment on financial assets Operating result Result of investments accounted for using the equity method Finance income Finance expenses Result of impairment on financial investments Finance result (net) Earnings before taxes Income taxes Consolidated profit of which non-controlling interests shareholders of RHÖN-KLINIKUM AG Earnings per share in € undiluted diluted Notes 2019 2018 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.9 5.9 5.9 5.9 5.9 5.10 5.11 5.12 5.12 1,303,898 229,938 1,232,908 183,469 1,533,836 1,416,377 407,923 866,975 68,522 133,460 152 372,440 796,136 60,600 122,080 178 1,477,032 1,351,434 56,804 64,943 80 194 –2,976 140 –2,562 54,242 9,763 83 342 –2,046 –144 –1,765 63,178 11,990 44,479 51,188 1,202 43,277 0.65 0.65 2,195 48,993 0.73 0.73 88 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Statement of changes in equity Statement of changes in equity in € '000 As at 31 Dec. 2017/1 Jan. 2018 before adjustments Adjustments through adoption of IFRS 9 (after tax) As at 31 Dec. 2017/1 Jan. 2018 after adjustments Equity transactions with owners Dividend payments Consolidated profit Other comprehensive income Other changes Changes in consolidated companies As at 31 Dec. 2018 As at 31 Dec. 2018/1 Jan. 2019 Equity transactions with owners Dividend payments Consolidated profit Other comprehensive income Other changes Changes in consolidated companies Issued share capital Capital reserve Retained earnings Treasury shares Equity attributable to shareholders of RHÖN-KLINIKUM AG Non-controlling interests in equity 1 Equity 167,406 574,168 360,803 – – –1,122 167,406 574,168 359,681 – – – – – – – – 167,406 167,406 574,168 574,168 – – – – – – – – –14,728 48,993 –125 – 393,821 393,821 –19,412 43,277 2,320 – –76 – –76 – – – – –76 –76 – – – – 1,102,301 22,955 1,125,256 –1,122 –30 –1,152 1,101,179 22,925 1,124,104 –14,728 48,993 –125 – 1,135,319 1,135,319 –19,412 43,277 2,320 –1,217 2,195 – – 23,903 23,903 –947 1,202 – –15,945 51,188 –125 – 1,159,222 1,159,222 –20,359 44,479 2,320 – 147 147 As at 31 Dec. 2019 167,406 574,168 420,006 –76 1,161,504 24,305 1,185,809 1 Including other comprehensive income (OCI). 90 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Contents Notes CONTENTS 1 | General information 2 | Accounting policies 2.1 Principles applied to the preparation of the financial statements 2.3.1 Transactions with non-controlling interests 2.3.2 Associated companies and joint ventures 2.3.3 Sale of subsidiaries and associated companies 2.3.4 Segment reporting 2.2 Consolidation 2.3 Subsidiaries 2.4 Goodwill and other intangible assets 2.5 Property, plant and equipment 2.6 Government grants 2.7 2.4.1 Goodwill 2.4.2 Computer software 2.4.3 Other intangible assets 2.4.4 Research and development expenses Impairment of property, plant and equipment and intangible assets (excl. goodwill) 2.8 Financial assets 2.8.1 2.8.2 Assets measured at fair value through profit or loss Assets measured at fair value directly in equity (fair value through other comprehensive income, without recycling) 102 2.8.3 Assets measured at amortised cost 2.8.4 Assets measured at fair value directly in equity (fair value through other comprehensive income; with recycling) 94 94 94 98 98 99 99 99 100 100 100 100 101 102 102 102 102 102 103 103 Investment property 2.9 2.10 Inventories 2.11 Trade receivables 2.12 Cash and cash equivalents 2.13 Equity 2.14 Financial liabilities 2.15 Current and deferred taxes 2.16 Employee benefits 2.16.1 Pension obligations and other long-term benefits due to employees 2.16.2 Termination benefits 2.16.3 Management profit sharing and employee profit sharing 2.18.1 Inpatient and outpatient hospital services 2.18.2 Interest income 2.18.3 Income from distribution and dividends 2.16.4 Share-based payments 2.17 Provisions 2.18 Revenue recognition 2.19 Leases 2.20 Costs of borrowing 2.21 Dividend payments 2.22 Financial risk management 2.22.1 Financial risk factors 2.22.2 Credit risk 2.22.3 Liquidity risk 2.22.4 Interest rate risk 2.22.5 Management of equity and debt 103 3 | Critical estimates and assessments in accounting and valuation 3.1 Estimated impairment of goodwill 3.2 Revenue recognition 3.3 Income taxes 4 | Company acquisitions 103 103 103 104 104 104 104 104 104 104 106 106 106 107 107 107 107 107 107 107 107 107 108 108 108 108 109 109 109 110 111 92 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | General information | Accounting policies 1 | GENERAL INFORMATION RHÖN-KLINIKUM AG and its subsidiaries build, acquire and operate primarily acute-care hospitals of all categories, with the focus being on cutting-edge medicine oriented towards maximum care with a direct tie-in to universities and research facilities. At some sites, rehabilitation services are also offered for selected medical disciplines to complement existing acute inpatient offerings. Moreover, outpatient structures in the form of medical care centres are also being expanded. Currently, preparations are under way for entry into the area of telemedicine. We provide our services exclusively in Germany. The Company is a stock corporation established under German law and has been listed on the stock market (SDAX®) since 1989. The registered office of the Company is in Bad Neustadt a. d. Saale, Salzburger Leite 1, Germany. The Company is entered in the Commercial Register of the Register Court of Schweinfurt under HRB 1670. 2 | ACCOUNTING POLICIES The consolidated financial statements have been prepared on the basis of uniform accounting policies which have been consistently applied. The functional currency of the Group is the euro, which is also the currency used for preparing the financial statements. The figures shown in the Notes to the consolidated financial statements are generally shown in millions of euros (€ million). The nature of expense method has been used for presenting the income statement. For computational reasons, rounding differences of ± one unit (€, %, etc.) may occur in the tables. 2.1 Principles applied to the preparation of the financial statements The consolidated financial statements of RHÖN-KLINIKUM AG for the year ended 31 December 2019 have been prepared applying sec- tion 315e of the German Commercial Code (Handelsgesetzbuch, HGB) in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), London, as well as the related Interpretations of the International Financial Reporting Standards Interpretations Committee (IFRS IC), which are the subject of mandatory adoption in accordance with the European Parliament and Council Directive number 1606/2002 concerning the application of international accounting standards in the European Union in financial year 2019. No early adoption of new Standards is planned at this time. a) New accounting rules from financial year 2019 The following new or revised standards and interpretations – to the extent adopted by the European Union – are to be applied as of finan- cial year 2019. As far as can be seen at present, they have a material impact on, no material impact on or are of no practical relevance for the consolidated financial statements of RHÖN-KLINIKUM AG as of financial year 2019 as well as subsequent years: Standard/Interpretation New New Amendments Amendments Amendments Amendments Mandatory adoption date Endorse- ment 1 Impact IFRS 16 IFRIC 23 IFRS 9 IAS 19 IAS 28 Leases Uncertainty over Income Tax Treatments Financial Instruments Employee Benefits Investments in Associates 1 Jan. 2019 1 Jan. 2019 1 Jan. 2019 1 Jan. 2019 1 Jan. 2019 Annual improvements to IFRS: 2015–2017 cycle Collective Standard for amendments to various IFRS 1 Jan. 2019 Yes Yes Yes Yes Yes Yes Material impact No material impact No practical relevance No material impact No material impact No practical relevance 1 Adoption of IFRS standards and/or interpretations by the European Union. 94 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies Amendments to IFRS 9 “Financial Instruments” On 12 October 2017, the IASB published amendments to IFRS 9. The amendments are to allow a measurement at amortised cost or fair value through other comprehensive income (FVOCI) also for financial assets with prepayment features that permit or require a party either to pay or receive reasonable compensation on termination. Furthermore, the amendments provide that the exception that had already applied pre- viously for compensation payments in the event of termination may also apply to the extent that the reasonable consideration mentioned there is negative for the early termination, i.e. de facto represents consideration for the terminating party. The supplementary provision makes it necessary to modify the existing exemption in such a way that according to its wording it is now based on “reasonable consid- eration” (instead of on “reasonable additional consideration” as was previously the case). As was already previously the case, the amount of early repayment essentially must represent the nominal contractual value and the contractual interest accrued but not yet paid and may include reasonable consideration for the early termination of the con- tract. The amendments to the Standard IFRS 9 are to be applied as of financial years beginning on or after 1 January 2019. The adoption of IFRS 9 is of no practical relevance for RHÖN-KLINIKUM AG. Amendments to IAS 19 “Employee Benefits” On 7 February 2018, the IASB published amendments to IAS 19 which relate to accounting of plan amendment, curtailment or settlement. The amendments prescribe on what basis the current service time cost and net interest expenditure or net interest income are to be calcu- lated for the period between the change and the end of the reporting period. In the case of a plan amendment, curtailment or settlement during the year under review, the service time cost and the current net interest expenditure (or net interest income) after the change are to be determined using the actuarial assumptions and the net liability (or net asset) at the time of the change (IAS 19.122 A et seq.). The amend- ments to the Standard are to be applied to financial years beginning on or after 1 January 2019. The amendments to this Standard have no material impact for RHÖN-KLINIKUM AG. Amendments to IAS 28 “Interests in Associates” The amendments to IAS 28 published by the IASB clarify that interests which, in substance, form part of the net investment of a company accounted for using the equity method are to be recognised and measured in accordance with IFRS 9 in relation to the determination of any impairments. However, the provision of IAS 28.38 whereby such interests are also to be taken into account in the loss allocation when applying the equity method to the value of equity investments continues to apply. Here, losses are to be allocated first to the equity carrying amount and only subordinately to the other long-term inter- est. The amendments to the Standard are to be applied to financial years beginning on or after 1 January 2019. The amendments to this Standard have no material impact for RHÖN-KLINIKUM AG. Annual improvements to IFRS: “2015–2017 Cycle” The “Annual improvements to IFRS: 2015–2017 Cycle” published as part of its process for making improvements to Standards and Inter- pretations, which as a general rule are applicable for the first time for financial years beginning on or after 1 January 2019, relate to the following Standards and/or clarifications: – Amendments to IFRS 3: “Business Combinations” If by acquiring further interests a company obtains control within the meaning of IFRS 10 over a previously joint activity, the provisions of IFRS 3 on a business combination achieved in stages are to be applied and thus a revaluation of the previously held interest to be performed in accordance with IFRS 3.42. The IASB also clarifies that the entire previously held interest in the joint activity is to be measured anew and not by the assets and liabilities previously recognised on a pro rata basis. The amend- ments are of no practical relevance for RHÖN-KLINIKUM AG. – Amendments to IAS 12: “Income Taxes” The consequences of dividend payments for income tax are to be treated, based on the general basic rule, in accordance with the treatment of the transactions that gave rise to the tax effect. In this regard, the IASB considers that the income tax consequences of dividend payments are more directly linked to past transactions or events from which dividend eligible profits were generated than to the distributions to owners. The decisive causal transaction is therefore not to be regarded as the dividend in the sense of an equity transaction but the business events resulting in the profit to be distributed. The income tax consequences thus as a general rule are to be recognised directly through profit and loss unless the underly- ing transactions were not recognised in the income statement. The provision applies retroactively only to those income tax consequences resulting from dividend payments made on or after commencement of the earliest comparative period shown in the financial statements. The amendments are of no practical relevance for RHÖN-KLINIKUM AG. 96 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies Amendments to IFRS 9, IAS 39, IFRS 7: “Interest Rate Benchmark Reform” The amendments to the Standards provide for particular facilitations in connection with the IBOR reform. The facilitations relate to hedge accounting result in the IBOR reform not generally leading to the termination of the hedge accounting relationship. However, any ineffectiveness is to continue to be recognised in the income state- ment. The amendments are to be applied to financial years beginning on or after 1 January 2020. They are of no practical relevance for RHÖN-KLINIKUM AG. Various amendments: “Conceptual Framework for IFRS Standards” The IASB has revised its Framework Concept for Financial Reporting. This will unlikely result in any immediate amendments to the IFRS, but the IASB and the IFRS IC will use the Framework Concept as the basis for preparing future Standards. The amendments to the Framework Concept are to be applied to financial years beginning on or after 1 January 2020. The effects of the amendments are currently the sub- ject of detailed review by the Management of RHÖN-KLINIKUM AG. c) Estimates Preparing consolidated financial statements in accordance with IFRS requires assumptions and estimates to be made. Moreover, the appli- cation of Group-wide accounting policies means that management has to exercise reasonable judgment. Areas that call for a greater degree of judgment to be exercised or that are characterised by a higher degree of complexity, or areas for which assumptions and estimates are of decisive importance for the consolidated financial statements, are set out and explained. The preparation of the con- solidated financial statements was based on historical cost, qualified by the financial assets and financial liabilities recognised at fair value through profit or loss. d) Publication The consolidated financial statements will be approved for publica- tion by the Supervisory Board on 19 March 2020. 2.2 Consolidation The annual financial statements of the companies included in the consolidated annual report have been prepared in accordance with uniform accounting and valuation principles in relation to the same date as the consolidated financial statements. Subsidiaries 2.3 Subsidiaries are all entities (including structured entities) which the Group has the possibility of controlling pursuant to IFRS 10. When assessing whether control exist, it is examined whether the parent has power over the subsidiary, obtains positive or negative variable returns and from it can influence the amount of such returns through exercising its power. The Group examines whether control is exer- cised also when the parent company does not hold the majority of the voting rights but has the possibility of controlling the relevant activities of the subsidiary based on de facto control. De facto control exists for example in the case of voting right agreements or high minority rights. Subsidiaries are included in the consolidated financial statements (full consolidation) from the date that the Group obtains control and are deconsolidated when the control ends. Acquired subsidiaries are accounted for using the purchase method. The cost of the acquisition is measured as the fair value, at the transac- tion date, of assets rendered, equity instruments issued, and liabilities incurred or acquired. They also contain the fair values of all recognised assets and liabilities resulting from a contingent consideration agree- ment. Upon their first-time consolidation, assets, liabilities and contin- gent liabilities identifiable within the scope of a business combination are recognised separately at their fair values at the acquisition date. For each company acquisition the Group decides on a case-by-case basis whether the non-controlling interests in the acquired company are recognised at fair value or based on the proportionate share in the net assets of the acquired company. Costs relating to the acquisition are expensed as incurred. In the event of a successive business combination, the previously acquired equity capital share of the company is redefined at its fair value applicable at the acquisition date. The resulting profit or loss is recognised in the income statement. 98 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies 2.3.4 Segment reporting According to IFRS 8 – Operating Segments –, segment information on operating segments is to be presented in accordance with the internal reporting to the chief operating decision maker (manage- ment approach). An operating segment is a company component – which carries out business activities from which revenue is earned and for which expenses may be incurred. For us these include all revenues relating to services provided directly and indirectly for patients, as well as all expenses necessary for pro- viding services, – whose operating result is regularly reviewed by the company’s chief decision maker to make decisions about resources to be allocated to this segment and assess its earnings strength, and – for which separate financial information is available. The chief decision making body in our Group is the Board of Manage- ment. It is in this body that the strategic decisions are made for the Group and to this body that the key ratios of the hospitals, which represent our operating segments, are reported. We generate all revenues for all our areas of activity in Germany. We generate most of our revenues in the inpatient, outpatient, rehab and nursing area with the statutory health insurance funds, the state pension insurance agency, the statutory occupational insurance agencies and the other public healthcare institutions. Only a small share of revenues is generated with private health insurance funds or self-payers. Regarding the breakdown of revenues by business areas and federal states, we refer to section 5 of the Notes. 2.4 Goodwill and other intangible assets 2.4.1 Goodwill Goodwill is the excess of the cost of the company acquisition over the Group’s interest in the fair value of the net assets of the acquired company at the acquisition date. Goodwill arising on acquisitions is allocated to intangible assets. Goodwill is subjected at least to an annual impairment test and measured at its historical cost less any impairment losses. A review is also performed when there are events or circumstances indicating that the value might be impaired. Impair- ment losses are not reversed. Profits and losses arising on the sale of a company include the carrying amount of the goodwill allocated to the company sold. Monthly reporting to the Board of Management includes the hospitals. Group management costs are fully distributed to the operative seg- ments. The monthly target-to-actual and actual-to-actual comparison in the report to the Board of Management, by aggregating the opera- tive segments into one reporting segment, serves to control the targets published in the Company forecast, in particular the EBITDA margin. For the purpose of the impairment test, goodwill is allocated to cash generating units. At RHÖN-KLINIKUM AG these correspond as a rule to the individual hospitals (each hospital site with its inpatient, semi-inpatient and outpatient care structures including any existing rehabilitation facilities) unless the related goodwill of co-operating units is monitored at a higher level. If the recoverable amount is below the carrying amount, an impair- ment is recognised. Here, the recoverable amount is the higher of the two fair value amounts less costs to sell the asset and its value in use. 2.4.2 Computer software Purchased computer software licences are recognised at cost plus the cost of bringing them to their working condition. These costs are amortised over the estimated useful life (three to seven years, straight- line method), and are shown under “depreciation/amortisation and impairment” in the income statement. Given our understanding of an integrated healthcare services offering, we do not make any distinction in control by whether the services as defined in German social insurance legislation are attributed to the inpatient or the outpatient sector, or to the rehab or nursing sector. All expenses and income which are directly or indirectly related to patients are included under the operating segments. The operating segments are aggregated to one reporting segment since they exhibit similar economic characteristics. As a result of the same structural framework conditions, the operating segments in the Group with the healthcare services provided are characterised by a similar risk and rewards profile whose economic environment is largely regulated by legislation. The politically desired state inter- ference is felt both on the income side and with expenses. It is thus possible for the operating segments to achieve similar EBITDA mar- gins. We thus continue to have only one operating segment subject to reporting. 100 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies On every balance sheet date, a test is performed to establish whether there are any indications that an impairment recognised in previous reporting periods no longer exists or might have diminished. If such an indication exists, the recoverable amount is estimated. An impairment previously recognised has to be reversed if there has been a change in the estimates used for determining the recoverable amount since the last impairment was recognised. If this is the case, the carrying amount of the asset has to be increased to the recover- able amount of the asset. However, this must not exceed the carrying amount which would have resulted after the recognition of deprecia- tion/amortisation if no impairment had been recognised in previous years. Any such reversal of a prior impairment has to be recognised immediately in the profit or loss for the period. After a prior impair- ment has been reversed, the amount of depreciation/amortisation in future reporting periods has to be adjusted in order to systematically distribute the revised carrying amount of the asset, less any residual value, over the remaining useful life of the asset. Financial assets 2.8 Financial assets in principle comprise receivables, other financial assets, equity instruments, derivative financial instruments with pos- itive fair values, and cash. These financial assets are principally divided into the following cate- gories as defined in IFRS 9: – Measured at fair value through profit or loss – Measured at fair value directly in equity (fair value through other comprehensive income, without recycling) – Measured at amortised cost – Measured at fair value directly in equity (fair value through other comprehensive income, with recycling) All purchases and sales of financial assets are recognised at the settle- ment date, i.e. the date when the purchase or the sale is transacted. Derivative financial instruments are recognised on the trading date. Initial recognition of all financial assets takes place at fair value. Assets measured at fair value directly in equity (fair value through other comprehensive income, without recycling) are measured after initial recognition at their fair values. Financial assets in the category of amortised cost are carried at amortised cost using the effective interest method. Financial assets are derecognised if the rights to payments from the investment expire or have been transferred and the Group has substantially transferred all the risks and rewards of ownership of the financial asset. Investments in equity instruments (equity interests) are carried in accordance with IFRS 9 at RHÖN-KLINIKUM AG as fair value through other comprehensive income (without recycling). These are strategic investments and the Group considers this classification to be more meaningful. Related gains and losses from the sale are not reclassified in the income statement. If no active market exists for financial assets or if these assets are not listed, the fair values are calculated using suitable measurement methods. These may include references to recent transactions between independent business partners, the use of current market prices of other assets that are substantially similar to the asset under consider- ation, discounted cash flow methods, as well as option price models which make use as far as possible of market data and as little as possible of individual company data. On each balance sheet date it is reviewed whether any losses incurred or already expected losses are to be recognised. Unless the simplified impairment approach is applied to trade receivables, an additional differentiation is made as to whether or not the default risk of financial assets has materially deteriorated since their acquisition. If the default risk has deteriorated significantly (e.g. if the financial asset can no longer be allocated to the investment grade rating category), all expected losses as of that point in time are recognised over the entire term. Otherwise, only those losses expected over the term of the instrument are taken into account which result from future potential loss events within the next twelve months. Within the Group of RHÖN-KLINIKUM AG, the general impairment model is essentially applied to fixed deposit investments. In this regard, the expected credit loss is calculated taking into account external ratings, rates of insolvency as well as future-oriented information on credit default swaps (CDS). 2.8.1 Assets measured at fair value through profit or loss According to IFRS 9, financial assets are subject to mandatory meas- urement at fair value through profit or loss if they are held neither as part of a business model whose purpose consists in holding assets to collect contractual cash flows, nor as part of a business model whose purpose is fulfilled if contractual cash flows are collected and financial assets are sold. Moreover, financial assets are to be measured at fair value through profit or loss if they do not fulfil the cash flow conditions as defined in IFRS 9. At RHÖN-KLINIKUM AG, no assets in the form of debt capital instruments that could be allocated to this category exist. 102 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies 2.12 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, demand deposits, and other short-term, highly liquid financial assets with original maturities of up to three months. Utilised bank overdrafts are shown on the balance sheet as liabilities to banks under the item current financial liabilities. 2.13 Equity Ordinary shares are classified as equity. Costs that are directly attrib- utable to the issuance of new shares are recognised in equity (net of tax) as a deduction from the issuance proceeds. If a company belonging to the Group acquires treasury shares of RHÖN-KLINIKUM AG, the value of the consideration paid including directly attributable additional costs (net of tax) is deducted from the equity capital attributable to shareholders of the company until the shares are either redeemed, re-issued or re-sold. If such shares are subsequently re-issued or re-sold, the consideration received, net of directly attributable additional transaction costs and related income tax, is recognised in the equity attributable to the shareholders of RHÖN-KLINIKUM AG. 2.14 Financial liabilities Financial liabilities in principle comprise financial debt (including the negative fair values of derivative financial instruments), trade paya- bles as well as other financial liabilities. Loan liabilities are classified as current liabilities unless the Group has the unconditional right to postpone settlement of the liability to at least twelve months from the balance sheet date. Financial liabilities as well as financial debt are initially recognised at fair value (less transaction costs). In subsequent periods they are measured at amortised cost; any difference between the disburse- ment amount (after deduction of transaction costs) and the repay- ment amount is recognised over the term of the loan in the income statement in the finance result using the effective interest method. Derivative financial instruments are measured at fair value. For current financial liabilities this means that they are recognised at their repay- ment or settlement amount. 2.15 Current and deferred taxes The tax expense of the period is made up of current and deferred taxes. Taxes are recognised in the income statement unless they relate to items which were directly recognised in equity or in other income. In this case, taxes are likewise recognised in equity or other income. Deferred tax is recognised using the liability method for all temporary differences between the tax basis of assets and liabilities and the respective IFRS consolidated carrying amounts. If, however, in a trans- action which is not a business combination, deferred tax arises from the initial recognition of an asset or liability which at the time of the transaction affects neither accounting nor taxable profit or loss, no deferred tax is recognised. Deferred taxes are measured subject to the tax rates (and tax laws) that apply or have been substantively enacted on the balance sheet date and that are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. Deferred taxes have been calculated using a corporate income tax rate of 15.0% (plus the 5.5% solidarity surcharge on corporate income tax). Deferred tax assets are recognised to the extent it is probable that they will result in a tax benefit when offset against taxable profits. Deferred tax liabilities in connection with temporary differences aris- ing from equity interests in subsidiaries are always recognised unless the point in time of the reversal of the temporary differences can be controlled by the Group and a reversal of the temporary differences is not probable in the foreseeable future. 2.16 Employee benefits 2.16.1 Pension obligations and other long-term benefits due to employees Various pension plans exist within the Group. These plans are financed by payments to insurance companies or pension funds or by rec- ognising provisions (direct commitments) whose amount is based on actuarial calculations. The Group has both defined benefit and defined contribution pension plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (insurance company or pension fund). The possibility of claims being asserted against the Group for payment of additional contributions exists only within the scope of subsidiary liability. Since RHÖN-KLINIKUM AG regards the risk of default of an insurance company or pension fund as extremely low, such commitments are accounted for as defined contribution plans. 104 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies Given insufficient information, it is not possible to make any statement on the level of participation in the pension schemes based on the contributions paid by the Group of RHÖN-KLINIKUM AG compared with the aggregate payments to the VBL and other public service pension schemes (BVK). In the event of a VBL participation being terminated, the legal conse- quences arising therefrom are defined in section 23 of the VBL Rules. Termination of a VBL participation also triggers the end of the manda- tory insurance schemes. Since the VBL also continues to settle the pen- sion claims and entitlements arising up to the end of the participation, the withdrawing party, as compensation, is required to pay an equiva- lent value which does not include those components financed under the funded scheme. This equivalent value comprises the full funding of existing entitlements and coverage of administrative expenses as well as future benefit claims. The supplementary pension insurance scheme ZKV also stipulates a similar provision. Since in the case of withdrawal from PAYGO financing the risks of the other participants of the system also have to be compensated pro rata, a plausible actuarial calculation can be made only by the pension fund itself. Membership in VBL/BVK exists only due to the acquisition of hospi- tals from public ownership. The hospitals in Gießen and Marburg are members of the VBL, and RHÖN-Kreisklinik Bad Neustadt a. d. Saale is a member of the BVK. 2.16.2 Termination benefits Termination benefits are provided if an employee is made redundant before the normal retirement date or accepts voluntary redundancy in return for severance compensation. The Group recognises sever- ance compensation payments if it is committed to terminating the employment of current employees subject to a detailed formal plan which cannot be rescinded or is committed to paying severance com- pensation if employees accept voluntary redundancy. Termination benefits which fall due more than twelve months after the balance sheet date are discounted to their present value. 2.16.3 Management profit sharing and employee profit sharing Management profit sharing and employee profit sharing are recog- nised as liabilities using a measurement method based on the con- solidated result or the results of consolidated subsidiaries. The Group recognises a liability in the cases in which a contractual obligation exists or an obligation arises from a past practice. 2.16.4 Share-based payments Share-based payments are recognised in accordance with IFRS 2. In financial year 2014, warrants in the form of virtual shares were issued. These are accounted for as payment with cash settlement. The pro- vision for the liability resulting from the virtual shares was formed in the amount of the expected expenditure. The fair value of the virtual shares was calculated using a binomial model. The obligations under virtual stock options were fully settled by way of payment in June 2019. Moreover, the incumbent and former members of the Board of Management held an equity interest of 3.0% (previous year: 3.0%), and other employees an interest of 3.0% (previous year: 3.2%), in the registered share capital of the company RHÖN-Innovations GmbH founded in March 2016. The payments made on founding of the company for the interests in the total amount of € 0.3 million (previous year: € 0.3 million) – of which € 0.1 million (previous year: € 0.1 million) is attributable to the members of the Board of Man- agement) – are reported under the other liabilities item as share- based remunerations as defined in IFRS 2 (cash-settled share-based payment transactions). In this connection, the members of the Board of Management are granted a put option to tender the interests to RHÖN-KLINIKUM AG in each case after five years, for the first time as at 31 December 2020. Moreover, the option of returning the interests on termination of the service relationship exists. In 2018 a now retired employee has made use of this provision. The interests are measured at fair value, but at least at their nominal value. In 2019 a now retired employee has made use of this provision. The interests were meas- ured at fair value, but at least at their nominal value. The interests are not freely disposable. 2.17 Provisions Provisions for restructuring and legal obligations are recognised when the company has an obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation in the future, and the value of the outflow of resources can be reliably determined. Restructuring provi- sions essentially include the costs of early termination of employment contracts with employees. Where there are a number of similar obligations, the probability of an outflow of resources being required for settlement is assessed based on an aggregate view of such similar obligations. A provision is also recognised if the probability of outflow for any one of such obligations is deemed to be small. 106 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Accounting policies 2.22.2 Credit risk The Group provides over 90% of its services for members of the stat- utory social insurance scheme, and the remainder to persons who pay medical invoices themselves and who have taken out private health insurance. There are no significant concentrations with respect to individual payers. The cost of hospital services is normally settled by payers within the legally prescribed period. With regard to the default risks in financial year 2019, please refer to our comments in the sections “Trade receivables”, “Other financial assets” and “Other assets”. The maximum risk of default is equal to the aggregate amount of the financial assets (less impairments) recognised on the balance sheet. Counterparty risks from entering into financial transactions are minimised by adherence to rules and limits. 2.22.3 Liquidity risk Careful liquidity management includes holding a sufficient reserve of cash, having the possibility of obtaining finance for an adequate amount under agreed credit lines, and being able to raise liquid- ity from market issuances. Given the dynamic nature of the mar- ket environment in which the Group operates, the objective of RHÖN-KLINIKUM AG is to maintain the necessary flexibility in finance matters by having sufficient credit lines available and access to the capital markets at all times. A minimum strategic liquidity of cash and free, immediately available credit lines is held in order to ensure the Group’s ability to act at all times. A liquidity report is prepared daily for monitoring liquidity risk. Short- to medium-term liquidity planning calculations are also carried out. 2.22.4 Interest rate risk Interest rate risk results from uncertainty about future developments in the level of interest rates and affects all interest-bearing items as well as interest derivatives. RHÖN-KLINIKUM AG is therefore always exposed to interest rate risks. In July 2019, RHÖN-KLINIKUM AG placed a registered bond in the amount of € 60.0 million with a term of 20 years. In October 2018 a promissory note in the amount of € 100.0 million was issued. The tranches exclusively bearing fixed interest with bullet maturities have terms of five, seven and ten years. The funds collected from both transactions are being used for general corporate finance. In 2017, a syndicated line of credit in the amount of € 100 million was issued. As at the balance sheet date, this line had not been utilised. As already in the previous year, no monitoring of interest rate risks was performed in financial year 2019 by means of sensitivity analyses given the reduced risk. 2.22.5 Management of equity and debt The aim of the Management with regard to the handling of equity and debt is to adopt a strict policy of matching maturities ( horizontal balance sheet structure) of source and use of funds. Non-current assets should be funded on a long-term basis. The items of equity and non-current liabilities shown in the balance sheet are included under the source of long-term funds. This ratio should be at least 100%, and amounted to 128.1% in the year under review (previous year: 122.7%). Long-term appropriation of funds relates to financial assets and property, plant and equipment. Although given the personnel cost ratio of more than 50% the Group of RHÖN-KLINIKUM AG is fre- quently attributed to the services sector, our business model has a long-term focus and is for the most part investment-driven. It is to be ensured that at least 35.0% of capital expenditure is sustainably backed by equity. As at 31 December 2019, this ratio at the Group level was 72.7% (previous year: 72.9%). Group growth is also managed by way of appropriate equity meas- ures through resolutions on the appropriation of profits for the con- solidated companies. With regard to retaining parts of the net income, the Management focuses on an equity ratio of 25%. As at the balance sheet date, 53.8% (previous year: 53.6%) of cash at banks was invested at a variable interest rate subject to 30 days’ termination notice or callable daily, and 46.2% (previous year: 46.4%) at a fixed or variable interest rate with a maximum residual term of up to 15 months (previous year: 12 months). If debt capital is used, the Management focuses on the following management ratios for minimising risks. The aim is to limit the ratio between net financial debt (= financial liabilities less cash and cash equivalents) and EBITDA to a maximum 3.5-fold multiple. 108 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Critical estimates and assessments in accounting and valuation In order to create planning and revenue certainty, the remunera- tion regulations normally provide for prospective fee agreements. In practice, however, these negotiations take place only in the course of the financial year or even thereafter, creating uncertainties as to the service volume for which consideration is received at the balance sheet date. These are reflected in the balance sheet through objec- tive, reliable estimates of receivables or liabilities based on empirical values. Past experience has shown that the inaccuracies relating to the estimates are negligible for the Group’s financial position and results of operations. The Group generates over 90% of its revenue from the statutory health insurance funds. As a general rule, the various budgets for the individual hospitals are defined together with the statutory health insurance funds at the beginning of each year. Diagnosis related groups (DRGs) are measured nationally on a uniform basis through the DRG catalogue (output method as defined in IFRS 15). The meas- urement ratios are reviewed and adjusted each year by Institut für das Entgeltsystem im Krankenhaus GmbH (InEK). If the service volume invoiced by a hospital (number, severity or type of service) at the end the financial year does not correspond to the budget negotiated for that year, this results in either revenue surpluses or shortfalls that are compensated by way of income com- pensation between the health insurance funds and the respective hospital. If the actual volumes exceed or fall short of the agreed total budget, only the additional variable costs are paid or saved variable costs deducted, using fixed rates. The receivables (contract assets) or liabilities (contract liabilities) arising as a result are reported in the consolidated balance sheet and revenues are corrected accordingly. Approved fee agreements existed at some of the hospitals at the time the consolidated balance sheet was prepared; this meant that any compensation payments for excess revenues or shortfalls could be calculated precisely. In hospitals in which no fee agreements had yet been concluded for 2019 or for previous years, we adhered strictly to the legal framework in our accounting. We assume that the agreements for 2019 will not have any negative impact on the result in 2020. Moreover, pursuant to section 275 German Social Insurance Code V (Sozialgesetzbuch V, SGB V) as well as section 17 of the German Hos- pital Financing Act (Krankenhausfinanzierungsgesetz, KHG), payers as a rule have a right of review with regard to the coded income by the Medical Review Board of the Statutory Health Insurance Funds (MDK). In the assessment of trade receivables or liabilities and of revenues from hospital services rendered, estimates are made with reference to the complaint rate of the MDK and, based on empirical values, corresponding corrections in revenues taken into account for this. The final results from the reviews of the MDK in turn have an influence on the income compensation for the respective financial year. Income taxes 3.3 Estimates are required for the recognition of tax provisions as well as deferred tax items. For determining the actual value of deferred tax assets, it is essential to assess the probability of the reversal of the valuation differences and the extent to which it is possible to use the tax loss carry-forwards that led to the recognition of deferred tax assets. This depends on the generation of future taxable profits during the periods in which tax valuation differences are reversed and tax loss carry-forwards can be utilised. Uncertainties exist with regard to the interpretation of complex tax regulations as well as the amount and timing of future taxable income that result in changes in the tax income or expense in future periods. The Group recognises adequate provisions for the possible consequences of audits by the tax authorities. The amount of such provisions is based on various factors, such as experience from past tax audits and differing interpretations of substantive tax law by the taxable entity and the competent tax authorities on specific issues. 110 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Company acquisitions The management of Marburger Ionenstrahl-Therapie Betriebs- Gesellschaft des Universitätsklinikums Heidelberg mit beschränkter Haftung, in which RHÖN-KLINIKUM AG initially held an interest of 24.9%, filed for insolvency in September 2018. In the fourth quarter of 2018, the agreement was reached with Universitätsklinikum Heidel berg, which until then had held 75.1% in the company, on the take over of these corporate interests as at 1 January 2019 and the appointment of the management by RHÖN-KLINIKUM AG from January 2019. Approval by the German Cartel Office was given in December 2018. As of 1 January 2019 we thus exercise control and consolidate the company operating under the name Marburger Ionen strahl-Therapie Betriebs-Gesellschaft mit beschränkter Haftung (MIT) fully in the consolidated financial statements as of the afore- mentioned date. The purchase price allocation as at 1 January 2019 has the following impact on the Group’s net assets in 2019: in € million Marburger Ionenstrahl-Therapie Betriebs- Gesellschaft mbH Fair value after acquisition Acquired assets and liabilities Intangible assets Property, plant and equipment Inventories Trade receivables Cash and cash equivalents Other assets Trade payables Deferred tax Other liabilities Net assets acquired + Goodwill Cost as defined by IFRS 3 ./. Acquired cash and cash equivalents Cash outflow on transaction at date of first-time consolidation Payments already rendered Purchase price yet to be paid 0.0 6.6 0.2 3.1 0.5 2.0 –2.4 –1.0 –1.1 7.9 0.0 7.9 –0.5 7.4 3.8 4.1 Using protons and heavy ions to achieve pinpoint precision, the Ion Beam Therapy Center offers a highly effective way of treating tumour disease whilst minimising the impact on high-risk organs such as the heart, lungs, liver and kidneys. During the reporting period, MIT’s contributions to revenues is € 8.7 million and to consolidated profit € –1.5 million. Thanks to the greater integration of MIT with the uni- versity hospitals in Giessen and Marburg, RHÖN-KLINIKUM AG is look- ing to secure continued ongoing care to patients with an innovative treatment therapy. In the context of the acquisition, consultancy fees were incurred in financial year 2018 in the amount of roughly € 0.2 million. No further significant consulting fees were incurred in financial year 2019. Trade receivables are due in the short term and were not impaired. Acquisition of physicians’ practices In financial year 2019 a total of three physicians’ practices were acquired whose conditions of validity as per agreement were satis- fied during the reporting period of 2019. Consolidation in the Group also took place in financial year 2019. No costs were incurred from the acquisition of these physicians’ practices. The revenues and annual results generated since their inclusion in the consolidated statements are of minor importance for the Group of RHÖN-KLINIKUM AG. The final purchase price allocation has the following impact on the Group’s net assets in 2019: in € million Purchase of physicians’ practices, January to December 2019 Acquired assets and liabilities Property, plant and equipment Net assets acquired + Goodwill Cost ./. Purchase price payments outstanding ./. Acquired cash and cash equivalents Cash outflow on transaction Fair value post acquisition 0.0 0.0 0.3 0.3 –0.1 0.0 0.2 112 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated income statement 5 | NOTES TO THE CONSOLIDATED INCOME STATEMENT 5.2 Other income Other operating income comprises: 5.1 Revenues The development of revenues by business areas and geographical regions was as follows: in € million Income from services rendered Income from grants and other allowances Income from indemnification payments/ other reimbursements Other 2019 2018 163.3 13.7 2.1 50.8 229.9 154.5 13.1 0.6 15.2 183.4 in € million Business areas Acute hospitals Medical care centres Rehabilitation hospitals Regions Bavaria Saxony Thuringia Brandenburg Hesse 2019 2018 1,261.8 1,192.5 16.1 26.0 14.9 25.5 1,303.9 1,232.9 265.8 0.2 170.7 146.6 720.6 256.5 0.2 164.5 136.3 675.4 1,303.9 1,232.9 According to IFRS 15, revenues constitute revenues generated from the provision of services and in financial year 2019 rose by € 71.0 mil- lion or 5.8% to reach € 1,303.9 million. Of that, our acute and reha- bilitation hospitals accounted for € 1,287.8 million (previous year: € 1,218.0 million) and the medical care centres for € 16.1 million (pre- vious year: € 14.9 million). As in the previous year, revenue figures include income from the invoic- ing of an additional remuneration component for the medicamen- tous treatment of spinal muscle atrophy as well as income from the invoicing of an additional remuneration component for the treatment of multiple sclerosis applied for the first time in the second quarter of 2018. These supplementary fees are remunerated along with the pure DRGs (diagnosis related groups) and negatively impact the materials and consumables used item by nearly the same amount. Furthermore, revenues for the first time as of financial year 2019 are influenced by cost reimbursements for cancer immunotherapies that negatively impact the materials and consumables used item by the same amount. We were also helped in financial year 2019 by higher revenues from our university outpatient units. Income from services rendered includes income from ancillary and incidental activities amounting to € 155.6 million (previous year: € 147.7 million) as well as income from rental and lease agreements amounting to € 7.7 million (previous year: € 6.8 million). The Group received grants and other allowances as compensation for certain purpose-tied expenses in connection with publicly financed measures (e.g. costs of personnel and materials for research and teach- ing, benefits under German legislation governing semi-retirement schemes, and for other subsidised measures). Compared with the previous year, the other income item witnessed a rise of € 46.5 million or 25.4% to € 229.9 million. In this regard, provi- sions for legal and tax risks were reversed in financial year 2019 in the amount of € 39.2 million based on new information (previous year: € 5.7 million). The income was recognised under the other remaining income item. The rise in other income is also accounted for, among other things, by increased sales of pharmaceuticals (including income from the invoicing of a drug for treating MS (multiple sclerosis) that negatively impacts materials and consumables used by the same amount) and cytostatics as well as personnel costs for students of healthcare professions refinanced for the first time. It furthermore has to be taken into account that in the previous year an amount of € 12.8 million was recognised under this item as one-off income of from the agreement of separate accounting as well as a further € 7.2 million under the employee benefits expense item. 5.3 Materials and consumables used in € million Cost of raw materials, consumables and supplies Cost of purchased services 2019 2018 369.9 38.0 407.9 341.3 31.1 372.4 114 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated income statement 5.8 Research costs Research activities relate primarily to process optimisations in the area of inpatient hospital care and not to making marketable products. The research results are therefore generally produced as a result of or in objective connection with the activities of healthcare provision. For this reason, differentiating and measuring these in isolation is possible only to a very limited extent. Depending on the volume of costs to be attributed to research activities, annual research expend- iture is roughly estimated to be within a range of 0.5% to 2.0% of revenues. They are primarily accounted for by personnel expenses and other expenses. As part of the takeover of the two university and scientific sites Gießen and Marburg, we committed ourselves to provide funding to the two medical faculties in an amount of at least € 2.0 million p.a. The negative finance result increased in financial year 2019 slightly by € 0.8 million to € 2.6 million. This was essentially attributable to the rise in finance expenses for bank liabilities in the amount of € 1.9 mil- lion relating in particular to the registered bond issued in July 2019 and the promissory note issued in October 2018. An opposite effect came from the decline in other interest expenses by € 1.0 million due to a derecognition of a financial investment recognised in the previous year. Furthermore, the items reported under other interest expenses include i.a. interest expenses from tax liabilities. Moreover, finance income declined by € 0.1 million as a result of a moderate decline in other interest income essentially including interest income from tax assets. In addition, income from the impairment on financial assets under IFRS 9 were recognised in the amount of € 0.1 million (previous year: expense of € 0.1 million). Finance result – net 5.9 The finance result is shown as follows: in € million Result of investments accounted for using the equity method Income of investments accounted for using the equity method Expense of investments accounted for using the equity method Finance income Bank balances Other interest income Finance expenses Liabilities to banks Other interest expenses Result of impairment on financial investments Income from impairment on financial investments Expense from impairment on financial investments 2019 2018 An amount of € 0.1 million for interest expenses relating to the appli- cation of IFRS 16 “Leases” as of 1 January 2019 was recognised for the first time under the other interest expenses item. 0.1 – 0.1 0.1 0.1 0.2 –2.4 –0.6 –3.0 0.1 – 0.1 –2.6 0.1 – 0.1 0.1 0.2 0.3 –0.5 –1.6 –2.1 – –0.1 –0.1 –1.8 The net negative interest income under IFRS 7 for financial assets and liabilities which are not included in the category “financial assets and liabilities shown at fair value in profit and loss” amounted to € 2.5 mil- lion in financial year 2019 (previous year: € 1.7 million), and comprises income of € 0.3 million (previous year: € 0.3 million) and expenses of € 2.8 million (previous year: € 2.0 million). The higher expenses result from higher financing costs in connection with the promissory note issued in 2018 as well as the registered bond issued in 2019. 5.10 Income taxes Income taxes consist of the corporate income tax including the sol- idarity surcharge, and to a lesser extent of trade tax. This item also includes deferred taxes resulting from differences between the IFRS and tax balance sheets as well as from consolidation adjustments and expected realisable tax loss carry-forwards which, as a rule, have no expiry date. Income tax comprises the following: in € million Current income tax Deferred taxes 2019 2018 8.7 1.1 9.8 5.8 6.2 12.0 116 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet 6 | NOTES TO THE CONSOLIDATED BALANCE SHEET in € million 6.1 Goodwill and other intangible assets in € million Other intangible assets Goodwil Cost 1 Jan. 2018 Total Additions due to changes in consolidated companies Additions Disposals Transfers 31 Dec. 2018 Cumulative depreciation and impairment 1 Jan. 2018 Depreciation Disposals 31 Dec. 2018 Balance sheet value as at 31 Dec. 2018 Cost 1 Jan. 2019 Additions due to changes in consolidated companies Additions Disposals Transfers 163.9 43.9 207.8 0.3 0.0 0.0 0.0 0.0 4.5 0.1 0.2 0.3 4.5 0.1 0.2 31 Dec. 2019 164.2 48.5 212.7 Cumulative depreciation and impairment 1 Jan. 2019 Depreciation Disposals Transfers 31 Dec. 2019 Balance sheet value as at 31 Dec. 2019 0.0 0.0 0.0 0.0 0.0 164.2 31.1 3.5 0.1 0.1 34.6 13.9 31.1 3.5 0.1 0.1 34.6 178.1 Other intangible assets Goodwill Total 163.3 39.8 203.1 0.6 0.0 0.0 0.0 163.9 0.0 0.0 0.0 0.0 163.9 0.0 4.8 0.7 0.0 43.9 28.6 3.2 0.7 31.1 12.8 0.6 4.8 0.7 0.0 207.8 28.6 3.2 0.7 31.1 176.7 The item other intangible assets primarily includes software. There are no restrictions on title and/or other rights related to the assets. Goodwill is subjected to an annual impairment test for its respective cash generating unit (each hospital with its inpatient, semi-inpatient and outpatient care structures, unless the related goodwill of co- operating units is monitored at a higher level). This impairment test is performed on 1 October of each year. The carrying amount of the cash generating unit is compared with the recoverable amount for the unit which was determined at the fair value less costs to sell of the unit. The fair value is calculated on the basis of a discounted cash flow method (DCF method). In this regard, a corresponding present value is projected with assumptions on long-term growth rates on the basis of an operative detailed five-year plan – which also includes expectations on future market development in the healthcare system – and calculated with subsequent recognition of a perpetual annuity. The calculated cash flows are discounted at the WACC to calculate the present value of the perpetual annuity. In view of unforeseeable measures by the legislature, a discount of 0.5% (previous year: 0.5%) was included in the discounting factor of the perpetual annuity. This forms an integral part of the Company's planning and is accordingly based on the management’s actual expectations for the respective unit as well as on the statutory framework in the healthcare system. We believe that it is only with this longer detailed view that the meas- ures already planned at the time of the company acquisition (e.g. demolition and rebuilding, modernisation measures) can be correctly 118 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet 6.2 Property, plant and equipment in € million Cost 1 Jan. 2019 Additions due to changes in consolidated companies Additions Disposals Transfers 31 Dec. 2019 Cumulative depreciation and impairment 1 Jan. 2019 Depreciation Impairment Disposals Transfers 31 Dec. 2019 Balance sheet value as at 31 Dec. 2019 Held-for-sale assets Balance sheet value as at 31 Dec. 2019 in € million Cost 1 Jan. 2018 Additions due to changes in consolidated companies Additions Disposals Transfers 31 Dec. 2018 Cumulative depreciation and impairment 1 Jan. 2018 Depreciation Impairment Disposals 31 Dec. 2018 Balance sheet value as at 31 Dec. 2018 Land and buildings Technical plant and equipment Operating and office equipment Plant under construction 1,150.2 56.4 345.5 0.0 19.9 1.0 –1.2 0.0 1.6 1.1 1.0 6.6 23.4 11.7 5.0 1,167.9 57.9 368.8 446.0 30.9 0.0 0.9 0.0 476.0 691.9 0.0 691.9 36.2 237.0 4.0 0.0 1.1 0.0 39.1 18.8 0.0 18.8 30.0 0.0 11.4 –0.1 255.5 113.3 0.0 113.3 19.2 0.0 20.0 0.0 –5.0 34.2 0.0 0.0 0.0 0.0 0.0 0.0 34.2 0.0 34.2 Total 1,571.3 6.6 64.9 13.8 –0.2 1,628.8 719.2 64.9 0.0 13.4 –0.1 770.6 858.2 0.0 858.2 Land and buildings Technical plant and equipment Operating and office equipment Plant under construction Total 958.0 50.0 301.3 114.3 1,423.6 0.0 88.7 1.1 104.6 1,150.2 416.7 30.4 0.0 1.1 446.0 704.2 0.0 6.5 0.2 0.1 56.4 32.9 3.5 0.0 0.2 36.2 20.2 0.0 56.6 15.3 2.9 345.5 226.9 23.4 0.0 13.3 237.0 108.5 0.0 12.6 0.1 –107.6 19.2 0.0 0.0 0.0 0.0 0.0 19.2 0.0 164.4 16.7 0.0 1,571.3 676.5 57.3 0.0 14.6 719.2 852.1 120 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet Deferred tax assets for tax loss carry-forwards are recognised in the amount of the associated tax benefits that can probably be realised as a result of future taxable profits. Tax loss carry-forwards in connection with previous hospital acquisitions are included in the tax base for recognising deferred tax assets if they are sufficiently determinable for tax purposes. In a tax-detrimental sale of shares in companies, any existing deferred tax is transferred to loss carry-forwards. Deferred tax assets from tax loss carry-forwards are recognised on the basis of tax planning calculations for a period of five years. The tax base used for deferred taxes is € 2.5 million (previous year: € 12.9 million). On the balance sheet date, tax losses carried forward which have so far not been utilised amounted to € 26.4 million (previous year: € 23.5 million); no deferred tax assets were recognised in relation to € 23.9 million (previous year: € 10.6 million) of this figure. In Germany, tax loss carry-forwards can reduce the taxable result for an unlimited term. The annual taxable result can reduce tax loss carry-forwards fully up to an amount of € 1.0 million and beyond that only at the rate of 60.0% of the remaining current taxable result. Deferred taxes from property, plant and equipment result from the difference between their useful lives defined in tax law and the eco- nomic depreciation periods in accordance with IFRSs. In addition, accelerated tax depreciation and write-downs were corrected in IFRS. Changes in deferred taxes are shown as follows: in € million 31 Dec. 2019 31 Dec. 2018 Deferred tax assets at beginning of year 3.2 9.1 Recognition of deferred taxes directly in equity in connection with changes in the fair value of investments recognised directly in equity Recognition of deferred taxes directly in equity in connection with the initial adoption of IFRS 9 Recognition of deferred taxes directly in equity in connection with revaluation of defined benefit pension plans recognised in equity Recognition of deferred taxes directly in equity in connection with company acquisitions Expense/income from current netting in the income statement Deferred tax assets at end of year –0.4 – 0.1 0.2 0.0 –0.1 –1.1 –1.1 0.6 – –6.1 3.2 Deferred tax liabilities for non-distributed profits of subsidiaries total- ling € 122.3 million (previous year: € 120.0 million), which lead to non-tax-deductible expenses of 5.0% of the total dividend for the parent company, were included in the consolidated financial statements. 6.4 Financial investments accounted for using the equity method 6.4.1 Investments accounted for using the equity method No associates (previous year: one) and one joint venture (previous year: one) were measured in the consolidated financial statements using the equity method. Joint ventures accounted for using the equity method 2019 Name of company Joint ventures Registered office Capital share % Energiezentrale Universitätsklinikum Gießen GmbH Gießen 50.0 122 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet The € 0.2 million increase in impairments at the balance sheet date is essentially attributable to the higher volume of fixed deposits. Inventories 6.6 Inventories in the amount of € 28.4 million (previous year: € 25.9 mil- lion) are attributable to raw materials, consumables and supplies and mainly consist of medical supplies. Impairments of € 3.1 mil- lion (previous year: € 2.9 million) were effected. All inventories are owned by RHÖN-KLINIKUM AG and the companies affiliated with RHÖN-KLINIKUM AG. There are no assignments or pledges of inventories. 6.7 Trade receivables As at the balance sheet date of 31 December 2019, we report trade receivables in the amount of € 226.6 million (previous year: € 212.4 mil- lion). The fair values of trade receivables essentially correspond to their carrying amounts since they are primarily short-term in character. Trade receivables as well as impairments within the meaning of IFRS 9 show the following maturity structure as at the balance sheet date of 31 December 2019: Trade receivables as well as impairments within the meaning of IFRS 9 had the following maturity structure as at the balance sheet date of 31 December 2018: in € million Impairment matrix 31 Dec. 2018 Not overdue Between 0 and 30 days overdue Between 31 and 90 days overdue Between 91 and 180 days overdue More than 180 days overdue Total Gross carrying amount Expected credit loss 177.8 12.6 8.5 5.8 8.6 213.3 0.3 0.1 0.2 0.1 0.2 0.9 The development of impairments pursuant to IFRS 9 recognised under the item of trade receivables is shown in the table below: in € million Impairment matrix 31 Dec. 2019 Not overdue Between 0 and 30 days overdue Between 31 and 90 days overdue Between 91 and 180 days overdue More than 180 days overdue Total Gross carrying amount Expected credit loss in € million 192.3 11.5 6.8 7.3 9.6 227.5 0.3 0.1 0.1 0.2 0.2 0.9 Impairment As at 1 Jan. pursuant to IFRS 9 Changes in consolidated companies Allocation Utilisation Write-back Currency translation difference As at 31 Dec. pursuant to IFRS 9 2019 2018 0.9 – 0.9 – 0.9 – 0.9 0.6 – 0.9 – 0.6 – 0.9 With regard to the impairments on trade receivables, reference is made to the further Notes in the section Accounting policies. Trade receivables were derecognised in the income statement in the amount of € 2.5 million in financial year 2019 (previous year: € 2.5 mil- lion). Settlement mechanisms in accordance with the Hospital Remu- neration Act (KHEntgG) partially compensated for these defaults. Inflows of € 0.1 million (previous year: € 0.1 million) were recognised in the income statement in relation to previously derecognised trade receivables. 124 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet The remaining other financial assets (current, not including fixed depos- its) as well as the corresponding impairments within the meaning of IFRS 9 show the following maturity structure as at the balance sheet date of 31 December 2019: in € million in € million Impairment matrix 31 Dec. 2019 Not overdue Between 0 and 30 days overdue Between 31 and 90 days overdue Between 91 and 180 days overdue More than 180 days overdue Total Gross carrying amount Expected credit loss 76.7 1.2 0.2 0.1 0.3 78.5 0.1 0.1 0.1 0.0 0.1 0.4 The remaining other financial assets (current, not including fixed deposits) as well as the impairments within the meaning of IFRS 9 had the following maturity structure as at the balance sheet date of 31 December 2018: Impairment As at 1 Jan. pursuant to IFRS 9 Changes in consolidated companies Allocation Utilisation Write-back Currency translation difference As at 31 Dec. pursuant to IFRS 9 2019 2018 0.8 – 0.6 – 0.8 – 0.6 0.6 – 0.8 – 0.6 – 0.8 Of the impairments as at the balance sheet date in the amount of € 0.6 million (previous year: € 0.8 million), € 0.3 million (previous year: € 0.6 million) is attributable to fixed deposits. The € 0.3 million decrease is essentially attributable to the lower volume of fixed deposits. Within the Group, settlement receivables due from and settlement liabilities to the payers under fee/budget agreements of the current year and the previous years are stated on a netted basis. A similar approach is taken towards claims under government grants for invest- ments and grants not yet used for their intended purpose. On a gross basis, the statement is as follows: in € million Impairment matrix 31 Dec. 2018 Not overdue Between 0 and 30 days overdue Between 31 and 90 days overdue Between 91 and 180 days overdue More than 180 days overdue Total Gross carrying amount Expected credit loss in € million 53.6 1.2 0.1 0.0 0.2 55.1 0.1 0.1 0.0 0.0 0.0 0.2 Receivables according to the KHG/KHEntgG (gross) Liabilities according to the KHG/KHEntgG (gross) Balance sheet value 31 Dec. 2019 31 Dec. 2018 68.6 –8.7 59.9 59.3 –20.0 39.3 The development of the impairments recognised under the item of other financial assets (current) pursuant to IFRS 9 is shown in the table below: Regarding the statement on a gross basis of the corresponding liabil- ities in accordance with the KHG/KHEntgG, please refer to the section “Other financial liabilities”. 6.9 Other assets (current) Of other current assets in the amount of € 10.5 million (previous year: € 7.8 million), essentially € 8.4 million (previous year: € 5.5 mil- lion) is attributable to prepaid expenses, mainly insurance expenses, and € 1.9 million (previous year: € 2.2 million) is attributable to reim- bursement claims against insurers under liability claims. Of this rise, € 2.4 million is essentially attributable to Marburger Ionenstrahl-Ther- apie Betriebs-Gesellschaft fully consolidated for the first time as of 1 January 2019. 126 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet last Annual General Meeting, the shareholders approved the proposal of the Board of Management and of the Supervisory Board so that an actual dividend payment of 29 cents (previous year: 22 cents) was made in financial year 2019. Non-controlling interests in equity of € 24.3 million (previous year: € 23.9 million) relate to interests held by non-Group third parties in the following consolidated subsidiaries: in % Hospital companies Universitätsklinikum Gießen und Marburg GmbH, Gießen Zentralklinik Bad Berka GmbH, Bad Berka Medical care centre companies MVZ UKGM GmbH, Marburg MVZ Zentralklinik GmbH, Bad Berka Service companies Non-controlling interests 31 Dec. 2019 31 Dec. 2018 5.0 12.5 5.0 12.5 5.0 12.5 5.0 12.5 RK-Reinigungsgesellschaft Süd mbH i. L., Bad Neustadt a. d. Saale – 49.0 Other subsidiaries Medgate Deutschland GmbH, Bad Neustadt a. d. Saale 49.0 – 6.13 Financial liabilities in € million 31 Dec. 2019 31 Dec. 2018 Remain- ing term > 1 year Remain- ing term < 1 year Remain- ing term > 1 year Remain- ing term < 1 year Non-current financial liabilities Liabilities to banks Total non-current financial liabilities Current financial liabilities Liabilities to banks Total current financial liabilities 158.3 158.3 – – Total financial liabilities 158.3 – – 0.9 0.9 0.9 99.5 99.5 – – 99.5 – – 0.3 0.3 0.3 In the fourth quarter of 2017, a syndicated line of credit in the amount of € 100.0 million was taken out. For this line of credit a change-of- control clause is stipulated providing, in the event of a change of control when the line of credit has been utilised, for early repayment and for the right of the lenders to exclude new lendings. As at the balance sheet date, this line had not been utilised. The syndicated loan is subject to a financial covenant. This financial ratio limits net financial debt to a maximum of 3.5 times EBITDA. The financial ratio was complied with by RHÖN-KLINIKUM AG in financial year 2019. In October 2018, RHÖN-KLINIKUM AG placed a promissory note in the amount of € 100.0 million. The tranches exclusively bearing fixed interest with bullet maturities have terms of five, seven and ten years. For the promissory note a change-of-control clause is stipulated pro- viding for early repayment in the event of a change of control. Under the contract, no change of control exists if one or more of the anchor shareholders (B. Braun Melsungen AG, Asklepios Kliniken GmbH & Co. KGaA, Mr. Münch (HCM SE) and Mrs. Münch) acquire(s) more than 50%, but no more than 70.1% maximum, of the voting shares in RHÖN-KLINIKUM AG within the group of anchor shareholders. In July 2019, RHÖN-KLINIKUM AG placed a registered bond in the amount of € 60.0 million with a term of 20 years. For the registered bond a change-of-control clause is stipulated providing for early repayment in the event of a change of control. Under the contract, no change of control exists if one or more of the anchor share- holders (B. Braun Melsungen AG, Asklepios Kliniken GmbH & Co. KGaA, Mr. Münch (HCM SE) and Mrs. Münch) acquire(s) more than 50%, but no more than 70.3% maximum, of the voting shares in RHÖN-KLINIKUM AG within the group of anchor shareholders. The funds collected are used for general corporate finance to ensure sufficient funds for investments planned in the medium-to-short term. 128 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet The provision volume on the balance sheet relates only to one-off payments: The commitments have a term of > 1 year. There are no reimbursement claims resulting from pension liability insurance policies entered into by reason of pension commitments to employees. in € million 31 Dec. 2019 31 Dec. 2018 Commitment for one-off payments Provision for pensions (defined benefit liability) 1.6 1.6 2.2 2.2 The calculation of pension provisions is based on the following assumptions: The weighted average duration of the pension liabilities is eight years (previous year: seven years). The sensitivity of the pension obligations in terms of fluctuation range due to changes in the various actuarial valuation assumptions is shown in the table below: Change in assumption in percentage points Increase in assumption Reduction in assumption in % 31 Dec. 2019 31 Dec. 2018 Rate of interest Projected increase in wages and salaries Projected increase in pensions 0.98 2.50 2.00 1.85 2.50 2.00 Impact on the commitment (in %) as at 31 Dec. 2019 Interest rate Remuneration trend 0.2 0.2 Mortaility +/– 1 year –1.6 1.6 0.1 1.7 –1.6 –0.2 We used Prof. Dr. Klaus Heubeck’s 2018G Tables (previous year: Prof. Dr. Klaus Heubeck’s 2018G Tables) as actuarial tables. All pension costs are reported under the pension costs item. The development of the defined benefit obligation in financial year 2019 compared with the previous year is shown in the following: Change in assumption in percentage points Increase in assumption Reduction in assumption –1.4 1.4 0.1 1.4 –1.4 –0.1 in € million As at 1 January Service time cost Interest expense Losses from plan changes Pension payments Actuarial gains/losses from changes in financial assumptions Experience-based adjustments Payments rendered As at 31 December Impact on the commitment (in %) as at 31 Dec. 2018 Interest rate Remuneration trend 0.2 0.2 2019 2018 Mortaility +/– 1 year 2.2 0.7 0.0 0.0 0.0 0.1 –0.5 –0.9 1.6 2.3 0.6 0.1 0.0 0.0 0.0 0.3 –1.1 2.2 The effects of the sensitivity were calculated using the same method as the obligations at the end of the year. In this regard, effects of a simultaneous change in several assumptions were not examined. Since the commitments remaining at the end of the financial year are capital commitments, no or no material changes result from the change in the pension trend; consequently, no disclosure of sensi- tivity in this regard was made. 130 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet 6.16 Trade payables in € million 31 Dec. 2019 31 Dec. 2018 The liabilities under the KHG/KEntgG relate to public grants not yet used in accordance with the conditions for their use granted under state legislation as well as repayment obligations under the federal hospital compensatory schemes – the Hospital Remuneration Act (KHEntgG) and the Federal Hospital Nursing Rate Ordinance (BPflV). Trade payables 84.5 0.0 115.9 0.0 < 1 year > 1 year < 1 year > 1 year The purchase prices from company purchases relate to contractually stipulated obligations. Trade payables exist with regard to third parties. The total amount of € 84.5 million (previous year: € 115.9 million) is due within one year. 6.17 Other financial liabilities 35.1 23.8 23.6 15.2 in € million Liabilities according to the KHG/KHEntgG (gross) Receivables according to the KHG/KHEntgG (gross) Balance sheet value 31 Dec. 2019 31 Dec. 2018 30.7 –8.7 22.0 33.5 –20.0 13.5 The carrying amounts of the current financial liabilities recognised under this item correspond to their fair values. The carrying amounts of other non-current liabilities have been discounted using the effec- tive interest method on the basis of historical market rates. Of the figure stated for remaining non-current financial liabilities with remaining maturities of more than five years in the amount of € 1.6 million (previous year: € 3.2 million), € 1.6 million (previous year: € 3.2 million) is attributable to obligations arising from research grants owed to the universities in Gießen and Marburg. Within the Group, settlement receivables due from and settlement liabilities to payers under fee/budget agreements of the current year and the previous years are stated on a netted basis. A similar approach is taken towards claims under government grants for investments and grants not yet used for their intended purpose. On a gross basis, the statement is as follows: in € million Liabilities under KHG/ KHEntgG Purchase prices Leases Other financial liabilities Other financial liabilities (financial instruments) 31 Dec. 2019 31 Dec. 2018 < 1 year > 1 year < 1 year > 1 year 22.0 0.7 3.2 9.2 – 4.2 9.8 9.8 13.5 0.7 1.0 8.4 – – 4.7 10.5 132 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet 6.21 Additional disclosures regarding financial instruments 6.21.1 Carrying amounts, recognised figures and fair values according to measurement categories The table below presents the carrying amounts and fair values of the individual financial assets and liabilities for each individual category of financial instruments pursuant to IFRS 9 as at 31 December 2019: in € million ASSETS Non-current assets Other financial assets of which investments of which investments of which other Current assets Trade receivables and other financial assets Cash and cash equivalents LIABILITIES Non-current liabilities Financial liabilities Other financial liabilities Measurement category according to IFRS 9 Measured at fair value directly in equity (fair value through other comprehensive income, without recycling) Measured at fair value through profit or loss Measured at amortised cost Measured at amortised cost Measured at amortised cost Financial liabilities measured at amortised cost of which other financial liabilities Financial liabilities measured at amortised cost of which leases Current liabilities Trade payables Financial liabilities Other financial liabilities of which other financial liabilities of which leases n.a. Financial liabilities measured at amortised cost Financial liabilities measured at amortised cost Financial liabilities measured at amortised cost n.a. Aggregated according to measurement categories, the above figures are as follows: Financial assets measured at amortised cost Financial assets measured at fair value directly in equity (fair value through other comprehensive income, without recycling) Financial assets measured at fair value through profit or loss Financial liabilities measured at amortised cost 134 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet Furthermore, € 0.3 million of cash and cash equivalents relate to assets held for sale. In this regard we refer to chapter 4 “Company acquisitions”. The levels of the fair value hierarchy and their application to assets and liabilities are described below: The fair values of financial assets and liabilities accounted for as defined in IFRS 9 as at 31 December 2019 are classified as follows to the three levels of the fair value hierarchy: in € million Other non- current financial assets (investments) Other non- current financial assets (remaining) Trade receivables, other current financial assets Non- current financial liabilities Other non- current financial liabilities Current trade liabilities Current financial liabilities Current other financial liabilities Level 1 Level 2 Level 3 Total 31 Dec. 2019 Total 31 Dec. 2018 – – – – – – – – 9.5 19.8 394.5 172.6 24.9 84.5 0.9 35.1 – – – – – – – – 9.5 4.7 19.8 – 394.5 381.7 172.6 101.7 24.9 84.5 0.9 16.5 115.9 0.3 35.1 23.6 – Level 1: Listed market prices for identical assets or liabilities on active markets – Level 2: Other information in the form of listed market prices which are directly (e.g. prices) or indirectly (e.g. derived from prices) observable – Level 3: Information on assets and liabilities not based on observable market data. The principal part of financial assets is measured at RHÖN-KLINIKUM AG, pursuant to IFRS 9, at amortised cost. Trade receivables, other financial assets as well as cash and cash equivalents covered by this in general have short remaining maturities. Their carrying amounts as at the reporting date therefore correspond to their fair values. The fair values of other non-current financial assets were calculated on the basis of the current level of interest rates. Investments in the amount of € 9.5 million (previous year: € 4.7 mil- lion) are measured as of acquisition pursuant to IFRS 9 at fair value directly in equity (fair value through other comprehensive income, without recycling). These investments relate to start-up equity inter- ests whose market value was calculated based on current equity transactions between market participants in the context of additional financing rounds or applying the DCF method. Moreover, additional immaterial investments amounting to € 0.0 million are measured at fair value (fair value through profit or loss). Changes in the market valuation of investments, which are measured at fair value directly in equity (fair value through other comprehensive income, without recycling), resulted in total in gains in the amount of € 2.2 million (previous year: loss of € 0.4 million) (after tax), which are recognised directly in equity under other comprehensive income (OCI). The fair value of non-current other financial obligations and non- current financial liabilities of RHÖN-KLINIKUM AG is calculated on the basis of the discounted cash flow. A risk- and maturity-related rate appropriate for RHÖN-KLINIKUM AG has been used for discounting purposes. For trade payables, other financial obligations and finan- cial liabilities with short remaining maturities, the carrying amounts correspond to their fair values on the reporting date. The fair value of liabilities under leases was calculated using a market interest curve as at the balance sheet date and corresponds to their carrying amount. 136 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Notes to the consolidated balance sheet | Statement of cash flows The above table includes all financial liabilities held as at the balance sheet date and for which payments had been contractually agreed. Planned payments for new liabilities in the future have not been included in the calculations. Interest payments were included in the future cash flows under agreements in effect as at the balance sheet date. Current liabilities and liabilities which can be terminated at any time are shown under the shortest time horizon. 7 | STATEMENT OF CASH FLOWS The statement of cash flows shows how the item “Cash and cash equivalents” of RHÖN-KLINIKUM Group has changed in the year under review as a result of cash inflows and outflows. The impact of acquisi- tions, divestments and other changes in consolidated companies has been eliminated. In accordance with IAS 7 (Statement of Cash Flows), a distinction is made between cash flows from operating activities, investing activities as well as financing activities. The liquidity shown in the statement of changes in financial position includes cash on hand, cheques as well as cash with banks. For the purposes of the statement of cash flows, bank overdrafts are deducted from cash and cash equivalents. As at 31 December 2019, as in the previous year, there were no bank overdrafts. Operating cash flow decreased slightly from € 49.5 million in the previous year to € 47.3 million in financial year 2019. The decline is essentially attributable to the one-off effects of the previous year in connection with the entry into effect of separate accounting at Univer- sitätsklinikum Gießen und Marburg and back-payments for previous years relating to that. A counter-effect to this was the change in other working capital due, among other things, to a higher one-off effect from the reversal of provision for guarantees. Cash used in investment activities improved from € –125.0 million in the previous year to € 86.7 million in financial year 2019. This develop- ment was attributable to lower investments in property, plant and equipment as well as intangible assets, higher inflows from govern- ment grants and lower inflows from reversal of fixed deposits. Changes in cash generated from financing activities essentially result from the issue of a registered bond in the net amount of € 59.0 million (previous year: issue of a promissory note in the net amount of € 99.7 million). In this connection, costs in the amount of € 0.3 million (previous year: € 0.2 million) were incurred. After the Annual General Meeting in June 2019, € 19.4 million (previous year: € 14.7 million) was paid to the shareholders of RHÖN-KLINIKUM AG. Dividend payments made to non-controlling interests in 2019 amounted to € 1.0 million (previous year: € 1.2 million). The cash flow statement included a total of € 9.6 million (previous year: € 37.7 million) in outstanding construction invoices. The statement of cash flows sets out the change in cash and cash equiv- alents between two balance sheet dates. In the RHÖN-KLINIKUM Group, this item exclusively comprises cash and cash equivalents attributable to continuing operations because no operations were discontinued. Financial liabilities changed as follows: in € million Lease obligations Current financial liabilities Non-current financial liabilities Non-current financial liabilities/other payments Proceeds from issuing of financial liabilities Total liabilities from finance activities 31 Dec. 2018 Cash changes Non-cash changes 31 Dec. 2019 5.7 0.3 99.5 – –0.6 104.9 –3.4 – 59.0 –0.3 – 55.3 10.7 0.6 0.1 – 0.2 11.6 13.0 0.9 158.6 –0.3 –0.4 171.8 138 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Shareholdings in € ’000 8.2 Other companies according to section 313 (2) No. 2 et seq. HGB Interest held in % Result for the year Equity in € ’000 Other companies/shelf companies Energiezentrale Universitätsklinikum Gießen GmbH, Gießen Kinderhort Salzburger Leite gemeinnützige Gesellschaft mbH, Bad Neustadt a. d. Saale KLINIK “HAUS FRANKEN” GMBH Bad Neustadt/Saale, Bad Neustadt a. d. Saale Marburger Ionenstrahl-Therapie Betriebs- Gesellschaft mbH, Bad Neustadt a. d. Saale (vormals: Marburger Ionenstrahl-Therapie Betriebs-Gesellschaft des Universitäts- klinikums Heidelberg mit beschränkter Haftung, Heidelberg) Medgate Deutschland GmbH, Bad Neustadt a. d. Saale Psychosomatische Klinik GmbH Bad Neustadt/Saale, Bad Neustadt a. d. Saale PTZ GmbH, Marburg RHÖN-KLINIKUM Energie für Gesundheit GmbH, Bad Neustadt a. d. Saale (vormals: RHÖN Energie für Gesundheit GmbH, Bad Neustadt a. d. Saale) RHÖN-Innovations GmbH, Bad Neustadt a. d. Saale RK Klinik Betriebs GmbH Nr. 35, Bad Neustadt a. d. Saale Wolfgang Schaffer GmbH, Bad Neustadt a. d. Saale 50.0 100.0 100.0 775 180 702 160 11 1 100.0 –40,961 –249 51.0 100.0 100.0 316 15 346 –34 –7 –11 100.0 1,564 63 100.0 6,848 –910 100.0 100.0 122 569 –6 –5 Interest held in % Result for the year Equity 4QD – Qualitätskliniken.de GmbH, Berlin 1 20.0 989 –131 Bäderland Bayerische Rhön GmbH & Co. KG, Bad Kissingen 1 HOSPIZ MITTELHESSEN gemeinnützige GmbH, Wetzlar 1 Inovytec Medical Solutions Ltd., Hod Hasharon (Israel) 2 CLEW Medical Inc., Delaware (USA) 2 Seniorenpflegeheim GmbH Bad Neustadt a. d. Saale, Bad Neustadt a. d. Saale 1 Soemmerring GmbH privates Institut für Bewegungsstörungen und Verhaltensneurologie i. L., Bad Nauheim 3 Telesofia Medical Ltd., Tel Aviv (Israel) 2 Tiplu GmbH, Hamburg Siebensachen GmbH, Hamburg 0.1 8 15.9 504 0 3 10.2 12.1 1,937 1,418 –1,924 –3,840 25.0 1,335 286 31.7 12.2 5.0 0.004 22 471 2,352 2 –1 –501 1,636 –22 1 Figures according to annual financial statements of 31 December 2018. 2 Figures according to annual financial statements of 31 December 2018, converted at closing/ average exchange rate 31 December 2019. 3 Figures according to annual financial statements of 31 December 2016. 140 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Other disclosures Leases within the Group 9.3 The new Standard IFRS 16 is subject to mandatory adoption within the Group as of 1 January 2019. It defines a lease as a contract which conveys the right to use an asset for a period of time in exchange for consideration. Within the Group, the modified retroactive approach was applied. Numerous property leases contain renewal options. Further details on the change as of 1 January 2019 are presented in chapter 2.1 “Principles applied to the preparation of the financial statements”. 9.3.1 Exceptions and transfer of operating leases For leases with a term of twelve months maximum amounting to € 0.3 million as well as for leases relating to low-value assets in the amount of € 0.1 million, no rights of use and no lease liabilities are recognised within the Group of RHÖN-KLINIKUM AG. The lease rates are recognised as before within the income statement. The table below shows the development of operating leases stated as at 31 December 2018 in relation to the recognised lease liabilities as at 1 January 2019: in € million Obligations under operating leases stated as at 31 December 2018 Discounted at the incremental borrowing rate at the time of first-time adoption of IFRS 16 Lease liabilities according to IFRS 16 as at 1 January 2019 Liabilities under finance leases recognised as at 31 December 2018 Total lease liabilities as at 1 January 2019 of which current lease liabilities of which non-current lease liabilities 1.7 6.5 8.2 5.7 13.9 3.1 10.8 Details on recognised rights of use are set out in chapter 6.2 “Property, plant and equipment”. 9.3.2 Obligations of lessees Under finance leases, the Group mainly rents copier and printer systems as well as laboratory equipment. In the Group, there is a principle of always acquiring ownership of operating assets. in € million Liabilities from leases – minimum lease payments Due in subsequent year Due in two to five years Due in five years Future financing costs under leases Present value of liabilities under leases in € million Present value of liabilities under leases Due in subsequent year Due in two to five years Due in five years 2019 2018 3.3 8.3 2.0 13.6 -0.6 13.0 1.1 3.8 1.1 6.0 -0.3 5.7 2019 2018 3.2 9.3 0.5 13.0 1.0 3.6 1.1 5.7 Investment property 9.3.3 The Group lets residential space to employees, office and commercial space to third parties (e.g. cafeteria), as well as premises to doctors co-operating with the hospital and to joint laboratories as part of cancellable operating leases. The most significant operating lease contracts by amount stem from the letting of property to third parties. The largest item in absolute terms is the letting of a property to a nursing home operator. Based on the provisions of IFRS 13.97, fair value is calculated for the assets to be stated according to IAS 40. The fair value determined in this regard cannot be observed on an active market nor can be derived from a quoted market price and are thus classified to Level 3 of the fair value hierarchy of IFRS 13. The fair value is determined using a capitalised value approach in which the 142 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Other disclosures From the point of view of the Group, the volume of transactions with companies consolidated using the equity method in financial year 2019 was as follows: in € ’000 Expenses 2019 Income 2019 Receivables 31 Dec. 2019 Liabilities 31 Dec. 2019 Energiezentrale Universitätsklinikum Gießen GmbH, Gießen 692 692 – – – – 98 98 The receivables and liabilities result from supply and service relation- ships. Related persons are defined as the members of management in key positions as well as their first-degree relations and their spouses in accordance with section 1589 of the German Civil Code (Bürgerliches Gesetzbuch, BGB). The Board of Management of RHÖN-KLINIKUM AG as well as the members of the Supervisory Board were included among the members of management in key positions. In the year under review, members of the Supervisory Board of RHÖN-KLINIKUM AG, or companies and entities related with these as well as companies within the meaning of IAS 24, rendered the following services at arm’s length terms: in € ’000 Related party Companies as defined by IAS 24 Nature of services Prof. Dr. Gerhard Ehninger AgenDix – Applied Genetic Diagnostics – Gesellschaft für angewandte molekulare Diagnostik mbH Laboratory services Peter Berghöfer Klaus Hanschur Dr. Katrin Vernau B. Braun Konzern (primarily B. Braun Melsungen AG and Aesculap AG) Supervisory board activity at an affiliated company Purchase of medical products Supervisory board activity at an affiliated company Supervisory board activity at an affiliated company Supervisory board activity at an affiliated company Expenses 2019 2018 22 1 14 1 10,900 12,544 3 3 1 4 3 3 The expenses were recognised in the income statement under the materials and consumables item as well as the other expenses item (as in previous year). No impairments were to be recognised in finan- cial year 2019 (as in previous year). 144 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Other disclosures 9.5 Total payments of Supervisory Board, the Board of Management and the Advisory Board in € ’000 2019 2018 No loans were granted to members of the Supervisory Board and the Board of Management. The members of the Supervisory Board and their related parties together have a shareholding interest in RHÖN-KLINIKUM Aktiengesellschaft of 20.0% (previous year: 45.2%) of total equity capital. As at 31 December 2019, the members of the Board of Management do not hold any shares of RHÖN-KLINIKUM Aktiengesellschaft. Remuneration of the Supervisory Board Remuneration of the incumbent Board of Management Remuneration of former members of the Board of Management 1,948 4,020 1,065 1,954 3,852 1,281 During the 2019 reporting period, RHÖN-KLINIKUM AG received no notifications on transactions for own account by persons discharging managerial responsibilities pursuant to Article 19 of the Market Abuse Regulation (EU) No 596/2014. The total expenditures (excluding VAT) for members of the Supervisory Board are broken down below: in € ’000 Eugen Münch Georg Schulze-Ziehaus Wolfgang Mündel Dr. Annette Beller Peter Berghöfer Björn Borgmann (until 28 February 2018) Prof. Dr. h. c. Ludwig Georg Braun (until 5 June 2019) Prof. Dr. Gerhard Ehninger Jan Hacker (from 5 June 2019) Stefan Härtel Klaus Hanschur Meike Jäger Dr. Brigitte Mohn Christine Reißner Oliver Salomon (from 1 March 2018) Evelin Schiebel Dr. Katrin Vernau Natascha Weihs Fixed basic remuneration Fixed attendance fee Fixed total remuneration Total 2019 Total 2018 120 80 80 36 40 0 14 36 26 40 40 40 36 40 40 40 36 40 32 32 44 52 20 0 8 10 8 16 16 20 8 20 16 22 22 18 200 26 172 73 40 0 11 13 15 26 26 40 10 40 26 26 34 22 352 138 296 161 100 0 33 59 49 82 82 100 54 100 82 88 92 80 357 138 301 172 100 17 73 54 0 82 82 91 56 100 59 80 112 80 784 364 800 1,948 1,954 146 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Other disclosures in € ’000 Incumbent member of Board of Management Dr. Gunther K. Weiß (member of Board of Management from 1 May 2018) Base salary (fixed remuneration) Fringe benefits Total One-year variable remuneration Management profit sharing Total payments Pension expense 1 Total remuneration 1 Pension expenditure includes past service cost according to IAS 19. Inducements granted Inflow 2019 2018 2019 (min.) 2019 (max.) 2019 2018 192 13 205 708 913 121 1,034 128 8 136 472 608 79 687 192 13 205 708 913 121 1,034 192 13 205 1,308 1,513 121 1,634 192 13 205 708 913 121 1,034 128 8 136 472 608 79 687 in € ’000 Former member of Board of Management Dr. Dr. Martin Siebert (permanent representative of the Board of Management until 28 March 2018) Base salary (fixed remuneration) Fringe benefits Total One-year variable remuneration Management profit sharing Multi-year variable remuneration Virtual share options Total payments Pension expense 1 Total remuneration 1 Pension expenditure includes past service cost according to IAS 19. Inducements granted Inflow 2019 2018 2019 (min.) 2019 (max.) 2019 2018 0 0 0 0 355 355 0 355 96 5 101 279 0 380 48 428 0 0 0 0 0 0 0 0 0 0 0 0 1,702 1,702 0 1,702 0 0 0 0 2,353 2,353 0 2,353 96 5 101 279 20 400 48 448 148 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Other disclosures On termination of their service contracts, the board members receive a post-retirement benefit when certain conditions are met. This com- pensation amounts to 12.5% of the annual remuneration owed on the date of termination of the service contract for each full year (twelve full calendar months) of service as member of the Board of Management, but not exceeding 1.5 times such latter remunera- tion. For such post-termination entitlements of the members of the Board of Management, the following provisions have been formed for post-employment benefits: in € ’000 Retirement benefits Incumbent members of the Board of Management Stephan Holzinger Prof. Dr. Bernd Griewing Dr. Gunther K. Weiß Total Provision as at 31 Dec. 2018 Change in retirement benefits Provision as at 31 Dec. 2019 470 469 79 1,018 292 196 136 624 762 665 215 1,642 Nominal amount on contract expiry 1 1,125 750 413 2,288 1 Claim according to expiry of service contract of the incumbent members of the Board of Management based on remuneration. in € ’000 Retirement benefits Former member of the Board of Management Dr. Dr. Martin Siebert (until 28 March 2018) Total Provision as at 31 Dec. 2018 Change in retirement benefits Provision as at 31 Dec. 2019 1,181 1,181 –1,181 –1,181 0 0 150 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Corporate bodies of RHÖN-KLINIKUM AG 10 | CORPORATE BODIES OF RHÖN-KLINIKUM AG The Supervisory Board of RHÖN-KLINIKUM AG comprises the following persons: Eugen Münch Bad Neustadt a. d. Saale, Chairman of the Supervisory Board Other mandates: – HCM SE, Bad Neustadt a. d. Saale (Chairman of the Board of Directors and Managing Director) – Stiftung Münch, München (Board of Management) Georg Schulze-Ziehaus Frankfurt am Main, 1st Deputy Chairman, Regional Director of ver.di, region of Hesse Wolfgang Mündel Kehl, 2nd Deputy Chairman, Wirtschaftsprüfer (German public auditor) and tax consultant in own practice Prof. Dr. h. c. Ludwig Georg Braun (until 5 June 2019) Melsungen, entrepreneur Also a member of the Supervisory Board of: – B. Braun SE, Melsungen (Chairman of the Supervisory Board) – B. Braun Melsungen AG, Melsungen (Chairman of the Supervisory Board) – Frankfurter Allgemeine Zeitung GmbH, Frankfurt am Main (until shareholders' meeting 2019) – WIKUS-Sägenfabrik Wilhelm H. Kullmann GmbH & Co. KG, Spangenberg Other mandates: – B. Braun Medical AG, Luzern, Schweiz (Vice-President of the Board of Directors) Other mandates: – Jean d’Arcel Cosmétique GmbH & Co. KG, Kehl (Chairman of the Advisory Board) (until 24 January 2020) – HCM SE, Bad Neustadt a. d. Saale Prof. Dr. Gerhard Ehninger Dresden, Medical Doctor – Cellex Gesellschaft für Zellgewinnung mbH, Dresden (Managing Director) (Deputy Chairman of the Board of Directors) – GEMoaB Monoclonals GmbH, Dresden (Managing Director) Dr. Annette Beller Kassel, member of the Management Board of B. Braun Melsungen AG Also a member of the Supervisory Board of: – Universitätsklinikum Gießen und Marburg GmbH, Gießen – Universitätsklinikum Schleswig-Holstein, Kiel Other mandates: – Landesbank Hessen-Thüringen Girozentrale, Frankfurt am Main (member of the Board of Directors) Dipl.-Kfm. Jan Hacker (from 5 June 2019) Corporate consultant, Bayreuth Peter Berghöfer Münchhausen, Head of Finance, Universitätsklinikum Gießen und Marburg GmbH, Gießen Stefan Härtel Müllrose, Male Nurse, Klinikum Frankfurt (Oder) GmbH, Frankfurt (Oder) Also a member of the Supervisory Board of: – Universitätsklinikum Gießen und Marburg GmbH, Gießen Other mandates: – Klinikum Frankfurt (Oder) GmbH, Frankfurt (Oder) (member of the Advisory Board) 152 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Notes | Corporate bodies of RHÖN-KLINIKUM AG The Board of Management of RHÖN-KLINIKUM AG comprises the following persons: Stephan Holzinger Business address Bad Neustadt a. d. Saale, Chairman of the Board of Management Dr. med. Gunther Karl Weiß, M.Sc. Business address Bad Neustadt a. d. Saale, Operative Member of the Board of Management Member of the Supervisory Board of: – Universitätsklinikum Gießen und Marburg GmbH, Giessen Member of the Supervisory Board of: – P. E. G. Einkaufs- und Betriebsgenossenschaft eG, Munich (Chairman of the Supervisory Board) – Medgate Deutschland GmbH, Bad Neustadt a. d. Saale (Chairman of the Supervisory Board) (from 20 December 2019) Other mandates: – Universitätsklinikum Gießen und Marburg GmbH, Giessen (Chairman of the Board) Other mandates: – Stiftung Münch, Munich (Chairman of the Board of Directors) – Mittelhessische Medizin-Stiftung am Universitätsklinikum Gießen und Marburg, Giessen (member of the Board of Directors) (until 30 September 2019) Prof. Dr. med. Bernd Griewing Business address Bad Neustadt a. d. Saale, Board of Management Medicine Member of the Supervisory Board of: – Universitätsklinikum Gießen und Marburg GmbH, Giessen Other mandates: – Stiftung Münch, Munich (Board of Trustees) – Zentrum für Telemedizin e. V., Bad Kissingen (Board of Management) (until 31 December 2019) – Stiftung Deutsche Sporthilfe, Frankfurt am Main (member of the Board of Trustees) Bad Neustadt a. d. Saale, 14 February 2020 The Board of Management Prof. Dr. Bernd Griewing Stephan Holzinger Dr. Gunther K. Weiß 154 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Independent auditor’s report Independent auditor’s report To RHÖN-KLINIKUM Aktiengesellschaft, Bad Neustadt a. d. Saale Report on the Audit of the Consolidated Financial Statements and of the Group Management Report Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our audit has not led to any reservations relating to the legal com- pliance of the consolidated financial statements and of the group management report. Audit Opinions We have audited the consolidated financial statements of RHÖN-KLINIKUM Aktiengesellschaft, Bad Neustadt a. d. Saale, and its subsidiaries (the Group), which comprise the consolidated state- ment of financial position as at 31 December 2019, and the consoli- dated statement of comprehensive income, consolidated statement of profit or loss, consolidated statement of changes in equity and consolidated statement of cash flows for the financial year from 1 January to 31 December 31 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the group management report of RHÖN-KLINIKUM Aktiengesellschaft for the financial year from 1 January to 31 December 2019. In accordance with the German legal requirements, we have not audited the content of those parts of the group management report listed in the “Other Information” section of our auditor’s report. In our opinion, on the basis of the knowledge obtained in the audit, – the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional requirements of German commercial law pursu- ant to § [Article] 315e Abs. [paragraph] 1 HGB [Handelsgesetz- buch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as at 31 December 2019, and of its financial performance for the financial year from 1 January to 31 December 2019, and – the accompanying group management report as a whole pro- vides an appropriate view of the Group’s position. In all material respects, this group management report is consistent with the consolidated financial statements, complies with German legal requirements and appropriately presents the opportunities and risks of future development. Our audit opinion on the group management report does not cover the content of those parts of the group management report listed in the “Other Informa- tion” section of our auditor’s report. Basis for the Audit Opinions We conducted our audit of the consolidated financial statements and of the group management report in accordance with § 317 HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as “EU Audit Regulation”) and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). We performed the audit of the consolidated finan- cial statements in supplementary compliance with the Interna- tional Standards on Auditing (ISAs). Our responsibilities under those requirements, principles and standards are further described in the “Auditor's Responsibilities for the Audit of the Consolidated Financial Statements and of the Group Management Report” section of our auditor’s report. We are independent of the group entities in accord- ance with the requirements of European law and German commer- cial and professional law, and we have fulfilled our other German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2) point (f ) of the EU Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appro- priate to provide a basis for our audit opinions on the consolidated financial statements and on the group management report. Key Audit Matters in the Audit of the Consolidated Financial Statements Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consoli- dated financial statements for the financial year from 1 January to 31 December 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our audit opinion thereon; we do not provide a separate audit opinion on these matters. 156 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Independent auditor’s report 2 patient management system and the underlying agreements. With respect to any corrections by the MDK, we assessed the processes for determining the service quantities (coding) and for determining the corresponding corrections. We also ana- lyzed and assessed the development of MDK’s verification and objection rates as well as its audit focal points. In doing so, we were able to satisfy ourselves that the estimates applied and the assumptions made by the executive directors concerning the recognition and measurement of revenue from hospital services provided were sufficiently documented and that the estimates applied and the assumptions made by the executive directors were consistently derived. 3 The Company’s disclosures relating to revenue recognition are contained in sections 3.2 and 5.1 of the notes to the consolidated financial statements. 2 1 Recoverability of goodwill In the Company’s consolidated financial statements goodwill of EUR 164.2 million (10.1 % of consolidated total assets) is reported under the “Goodwill and other intangible assets” balance sheet item. Goodwill is tested for impairment by the Company once a year or when there are indications of impairment to deter- mine any possible need for write-downs. The Company allocates goodwill to the respective cash-generating units. The carrying amount of the relevant cash-generating units, including good- will, is compared with the corresponding recoverable amount in the context of the impairment test. The recoverable amount is generally calculated on the basis of fair value less costs of disposal. Goodwill is generally measured as the present value of the future cash flows of the respective cash-generating unit. The relevant present value is calculated using discounted cash flow models. For this purpose, the adopted medium-term business plan of the Group forms the starting point for future projections based on assumptions about long-term rates of growth. Expectations relating to future market developments and assumptions about the development of macroeconomic factors are also taken into account. The discount rate used is the weighted cost of capital for the relevant cash-generating unit. The impairment test determined that no write-downs were necessary. The outcome of this valuation exercise is dependent to a large extent on the estimates made by the executive direc- tors with respect to the future cash inflows from the respective cash-generating units, the discount rate used, the rate of growth and other assumptions, and is therefore subject to considerable uncertainty. Against this background and due to the complex nature of the valuation, this matter was of particular significance in the context of our audit. As part of our audit, we assessed the methodological procedure adopted for the purpose of the impairment tests and evaluated the calculation of the weighted cost of capital, among other things. After matching the future cash inflows used for the cal- culation against the adopted medium-term business plan of the Group, we assessed the appropriateness of the calculation, in par- ticular by reconciling it with general and sector-specific market expectations. We also assessed the appropriate consideration of the costs of Group functions. With the knowledge that even rela- tively small changes in the discount rate applied can have material effects on the goodwill calculated in this way, we focused our testing in particular on the parameters used to determine the dis- count rate applied, including the weighted average cost of capital, and assessed the calculation method. Furthermore, in order to take into account existing uncertainties inherent in the forecasts and projections, in addition to the sensitivity analyses carried out by the Company we performed our own sensitivity analyses and, taking into account the information available, determined that the carrying amounts of the cash-generating units, including the allocated goodwill, were adequately covered by the discounted future net cash inflows. Overall, the measurement inputs and assumptions used by the executive directors are in line with our expectations and are also within the ranges considered by us to be reasonable. 3 The Company’s disclosures pertaining to goodwill are contained in sections 2.4.1, 3.1 and 6.1 of the notes to the consolidated financial statements. Other Information The executive directors are responsible for the other information. The other information comprises the following non-audited parts of the group management report, which we obtained prior to the date of our auditor’s report: – the statement on corporate governance pursuant to § 289f HGB and § 315d HGB included in section 1.9 of the group manage- ment report – the corporate governance report pursuant to No. 3.10 of the German Corporate Governance Code (with the exception of the remuneration report) – the separate non-financial report pursuant to § 289b Abs. 3 HGB and § 315b Abs. 3 HGB The annual report is expected to be made available to us after the date of the auditor’s report. 158 RHÖN-KLINIKUM AG | Annual Report 2019

CONSOLIDATED FINANCIAL STATEMENTS | Independent auditor’s report We exercise professional judgment and maintain professional skep- ticism throughout the audit. We also: – Identify and assess the risks of material misstatement of the consolidated financial statements and of the group manage- ment report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our audit opinions. The risk of not detecting a material misstate- ment resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omis- sions, misrepresentations, or the override of internal control. – Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrange- ments and measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of these systems. – Evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of estimates made by the executive directors and related disclosures. – Conclude on the appropriateness of the executive directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the group man- agement report or, if such disclosures are inadequate, to modify our respective audit opinions. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to be able to continue as a going concern. – Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements present the underlying transactions and events in a manner that the con- solidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German commercial law pursu- ant to § 315e Abs. 1 HGB. – Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express audit opinions on the consolidated financial statements and on the group management report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinions. – Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with Ger- man law, and the view of the Group’s position it provides. – Perform audit procedures on the prospective information presented by the executive directors in the group management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by the executive directors as a basis for the prospective information, and evaluate the proper derivation of the prospective infor- mation from these assumptions. We do not express a separate audit opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information. 160 RHÖN-KLINIKUM AG | Annual Report 2019

SUMMARY REPORT FOR RHÖN-KLINIKUM AG | Balance sheet and income statement Balance sheet and income statement BALANCE SHEET INCOME STATEMENT in € million in € million 31 Dec. 2019 31 Dec. 2018 2019 2018 Assets Intangible assets Property, plant and equipment Financial assets Fixed assets Inventories Receivables and other assets Securities, cash and cash equivalents Current assets Prepaid expenses Deferred tax assets 8.1 277.6 654.9 940.6 7.3 96.0 212.1 315.4 2.8 7.2 Revenues Changes in services in progress Other operating income Materials and consumables used Employee benefits expense Depreciation Other operating expenses Operating result Investment result Finance result Taxes 3.5 267.5 666.1 937.1 5.4 90.8 212.3 308.5 1.5 9.0 1,266.0 1,256.1 Net profit for the year Profit carried forward from previous year Net distributable profit 258.9 1.3 45.3 94.4 139.9 21.5 33.1 16.6 13.2 8.9 4.9 33.8 169.7 203.5 218.6 –1.0 22.6 57.0 124.2 15.5 31.4 12.1 12.7 11.1 4.2 31.7 157.4 189.1 in € million 31 Dec. 2019 31 Dec. 2018 Shareholders' Equity and Liabilities Subscribed capital/issued capital Capital reserve Retained earnings Net distributable profit Shareholders' equity Contributions to finance fixed assets Provisions Liabilities 167.4 589.0 0.1 203.5 960.0 13.0 45.1 247.9 167.4 589.0 0.1 189.1 945.6 7.3 114.4 188.8 1,266.0 1,256.1 The annual financial statements of RHÖN-KLINIKUM Aktien- gesellschaft, which have been audited and certified by Pricewater- houseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, will be published in the Federal Gazette (Bundesanzeiger) and deposited with the Commercial Register. The report can be obtained from the Company on request. 162 RHÖN-KLINIKUM AG | Annual Report 2019

FURTHER INFORMATION | Independent practitioner’s report Independent Practitioner’s Report ON A LIMITED ASSURANCE ENGAGEMENT ON NON-FINANCIAL REPORTING 1 To RHÖN-KLINIKUM Aktiengesellschaft, Bad Neustadt a. d. Saale, We have performed a limited assurance engagement on the combined separate non-financial re-port pursuant to §§ 289b Abs. 3 und 315b Abs. 3 HGB ("Handelsgesetzbuch": "German Commer-cial Code") of RHÖN-KLINIKUM AG, Bad Neustadt a. d. Saale, (hereinafter the “Com- pany”) for the period from January 1, to December 31, 2019 (hereinafter the “non-financial report”). The non-financial report comprises the sec- tions marked with a check mark in the Corporate Social Re-sponsibilitiy Report of the company for the financial year 2019. Responsibilities of the Executive Directors The Management Board of the Company is responsible for the prepa- ration of the non-financial report in accordance with §§ 315c in con- junction with 289c to 289e HGB. This responsibility of Company’s executive directors includes the selection and application of ap-propriate methods of non-financial reporting as well as making assumptions and estimates related to individual non-financial disclosures which are reasonable in the cir- cumstances. Furthermore, the executive directors are responsible for such internal control as they have considered neces-sary to enable the preparation of a Non-financial Report that is free from material misstatement whether due to fraud or error. Independence and Quality Control of the Audit Firm We have complied with the German professional provisions regarding independence as well as other ethical requirements. Our audit firm applies the national legal requirements and profes- sional standards – in particular the Professional Code for German Public Auditors and German Chartered Auditors (“Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer“: “BS WP/vBP”) as well as the Standard on Quality Control 1 published by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany; IDW): Requirements to quality control for audit firms (IDW Quali-täts- sicherungsstandard 1: Anforderungen an die Qualitätssicherung in der Wirtschaftsprüferpraxis - IDW QS 1) – and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical require- ments, professional standards and applicable legal and regulatory requirements. Practitioner´s Responsibility Our responsibility is to express a limited assurance conclusion on the non-financial report based on the assurance engagement we have performed. Within the scope of our engagement we did not perform an audit on external sources of in-formation or expert opinions, referred to in the non-financial report. 1 PricewaterhouseCoopers GmbH has performed a limited assurance engagement on the German version of the separate non-financial report and issued an independent assurance report in German language, which is authoritative. The following text is a translation of the independent assurance report. 164 RHÖN-KLINIKUM AG | Annual Report 2019

FINANCIAL CALENDAR DATES FOR SHAREHOLDERS AND ANALYSTS 21 February Publication of Preliminary Results for the 2019 financial year 24 March Publication of 2019 Annual Financial Report, Press Conference 7 May Publication of Interim Report for the quarter ending 31 March 2020 3 June Annual General Meeting 6 August Publication of Half-Year Financial Report as of 30 June 2020 6 November Publication of Interim Report for the quarter ending 30 September 2020 RHÖN-KLINIKUM AG DISCLAIMER The information provided in this Report does not constitute an offer or solicitation to buy shares of RHÖN-KLINIKUM AG. All reasonable care has been taken to ensure that the content of this Report was accurate on the date of publication. However, RHÖN-KLINIKUM AG accepts no warranty that all information is complete, accurate and up-to-date. Any investment in shares of RHÖN-KLINIKUM AG must be made on the basis of the information contained in the Company’s prospectus in its authorised form. Although as a general rule we employ the masculine form for better readability when referring to persons. This form covers all persons of the respective group, irrespective of their (social) gender and gender identity. Postal address: 97 615 Bad Neustadt a. d. Saale Germany Visitors’ address: Salzburger Leite 1 97 616 Bad Neustadt a. d. Saale Germany T. +49 (0) 9771 65-0 F. +49 (0) 9771 97467 Internet: rhoen-klinikum-ag.com E-mail: rka@rhoen-klinikum-ag.com Published on 24 March 2020 This Annual Report is also available in German. Annual Report on the Internet en.rhoen-klinikum-ag.com/annual-report 166 RHÖN-KLINIKUM AG | Annual Report 2019

RHÖN-KLINIKUM AG Salzburger Leite 1 97 616 Bad Neustadt a. d. Saale Germany