Content thumbnail European attractiveness survey January 2017
LONGER-TERM AGENDA

ey.com/attractiveness 3. Foreign investors in Europe are focused on managing the present — for now Companies feel the consequences The impact of the Brexit vote Since the EU referendum, 71% of foreign investors have already felt some impact of the EU referendum results across their European operations on a least one area of their business. There is no single “pain point,” but the impact is typically felt in one or two areas, especially operating margins, cost of purchases and sales. Referendum This is not surprising, given the uncertainty regarding the future relationship between the UK and the EU. Many companies have reported lower profits in the aftermath of the Brexit referendum, % most commonly as a result of the weakening pound or of softer 29 demand. Some companies have raised prices or are considering % 21 71 raising prices in the UK since the Brexit vote. UK-based companies with extensive overseas operations will Companies impacted by the referendum on at least one area benefit from the weaker pound, in so far as it will bolster their Companies not impacted by the referendum profits when reported in sterling. But the companies we surveyed Source: EY’s European attractiveness survey January 2017 (total respondents: 254). report their results in various currencies, and more respondents reported worsening results than reported an improvement. Since the Brexit referendum, what effect have you already seen on your business regarding … ? 89% 69% 63% 59% 15% 25% 25% 3% 6% 12% 4% 2% 14% 2% 9% 3% Staff availability and Sales Operating margins Cost of purchases recruitment decisions 79% 80% 81% 85% 4% 9% 8% 5% 9% 8% 3% 8% 5% 6% 6% 4% Appetite for Investment in Relations with EU Relations with non-EU acquisitions or disposals fixed assets business partners business partners Improved No effect Deteriorated Can’t say Source: EY’s European attractiveness survey January 2017 (total respondents: 254). 21 “Ahead of Brexit Talks, Companies Puzzle Over the Pound,” The Wall Street Journal website, http://www.wsj.com/articles/ahead-of-brexit-talks-companies-puzzle-over-the- pound-1476142800, accessed 14 December 2016. EY’s European attractiveness survey January 2017 19

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INTRO
EY's attractiveness surveys and program Contents How EY designed the research An EY survey on foreign investment Ten lessons learned (1-5) Ten lessons learned (6-10)
FOREIGN INVESTORS
Keen on Europe, yet cautious Global economic volatility and fragmentation EY POV - Jeremy Jennings EY POV - Alessandro Cenderello More active investment strategies EY POV - Jean-Benoit Berty
PAN-EUROPEAN INVESTMENTS
A rethink of pan-European investments EY POV: automotive -Jörg Hönemann The UK's attractiveness will be affected EY POV - Mark Gregory Europe's FDI map starting to shift Corporate income tax rate across Europe Cities compete for foreign investment
MANAGING THE PRESENT
Investors in Europe are focused on managing the present Deterioration in operating margins Plans to redesign supply chains EY POV - Olivier Macard EY POV - Mats Persson
LONGER-TERM AGENDA