What do European and UK companies think of Brexit? A social media perspective

Foreword If all goes according to plan the United Kingdom will leave the European Union on March 29th, 2019. This will herald one of the biggest shake-ups in the economic architecture of Europe since the fall of the Berlin Wall and the accession to the EU of countries from Central and Eastern Europe. It will fundamentally alter the trading relationship between the UK and its former EU partners. Since the Brexit referendum in June 2016, there has been much debate among politicians, academics and commentators about the economic impact of Brexit. But what do businesses themselves think? This joint analysis by Madano-BOLDT is based on research conducted by Madano s specialist Insights team in January and February 2018, which gathered and analysed the social media activity of 1000 of the top companies in Europe based on revenue. The research shows that companies are keeping their heads down in the Brexit debate, leaving the trade associations to do their bidding for them. When businesses are vocal on social media, they are focused on reassuring customers and suppliers that it will be business as usual. The question is can this last? Unless we see a dramatic breakthrough in the negotiations, there will come a point soon when companies reassuring messages will no longer be credible. London/Brussels, March 2018 3

Objectives To understand how companies in Europe have responded publicly to Brexit, with reference to key sectors e.g. transport, construction & housing, pharmaceutical & biotechnology, technology, food & drink, finance and energy. To understand the differences between the main industry sectors in their attitudes towards Brexit, examining the industry sectors that are the most concerned or the most communicative, and the reasons for this. To be the first study to analyse the differences in the attitudes of UK versus European companies through the lens of social media in this case Twitter, as this is the platform most commonly used by companies and trade bodies when communicating public policy positions. 4

Key Findings Companies are keeping their heads down when it comes to Brexit it s still a case of business as usual. UK companies are more concerned about specific sectoral impacts of Brexit. European companies are worried about the macro-economic consequences. Trade associations are taking the lead by being more vocal and active in talking about Brexit. They are most worried about the impact on trade, labour shortages and regulations. The financial sector is by far the most active sector across the UK and Europe when it comes to tweeting on Brexit. The sector focuses on market access as its primary concern. 5

Approach 6

Approach: Methodology 1. Identification of companies/trade bodies Study identified c.1000 top companies based on their revenue from this 701 companies twitter accounts were identified of which 165 have tweeted about Brexit during 2017. Study identified 93 trade bodies from across Europe of which 53 have tweeted about Brexit. 2. Extraction of tweets Extraction of tweets from companies and trade bodies published in the last year (of which c.5000 mention Brexit). 3. Development and application of content analysis framework Analysis of tweets to define a framework of topics. Manual coding of tweets based on topic. 4. Quantitative/ qualitative Discourse Analysis Analysis of key topics such as economic, industry and company impact. 7

Approach: Sample of Companies Total of 701 companies included identified from lists of Top EU companies, Top UK companies and Global 2000 List. Bias towards UK in the sample of countries, and therefore in overall number of tweets per country. Some countries tend to be more active (e.g. Netherlands and Denmark). 165 companies (of the 701) identified) tweeted regarding Brexit in the past year. Country # of companies included # of companies tweeting re:brexit # of Brexit tweets from country UK 249 70 932 US 82 18 178 Germany 73 16 461 France 58 20 206 Netherlands 26 6 256 Spain 26 6 53 Italy 25 5 78 Switzerland 25 10 39 Sweden 24 5 49 Denmark 12 2 175 Belgium 8 2 4 Norway 8 1 1 Austria 4 1 3 Japan 2 1 1 Ireland 1 1 3 South Korea 1 1 1 Other 77 0 Total 701 165 2440 8

Approach: Sample of Companies & Trade Bodies Sector # of companies in sector Companies # of companies in sector posting # of Brexit posts Finance 117 56 1493 Insurance 54 23 566 Technology 118 25 100 Engineering 26 4 36 Energy 78 10 32 Built environment 49 13 30 Aerospace & defence 89 11 47 Chemicals 37 8 41 Pharmaceuticals 67 9 27 Industrial 1 0 0 Transport 18 2 2 Telecommunications 6 2 64 Food & Drink 29 2 2 Mining 12 0 0 Total 701 165 2440 Sector Trade bodies # of trade bodies # of trade bodies posting about Brexit # of Brexit post Food & Drink 17 10 817 Energy 12 8 332 Technology, Telecomms & Media 16 4 280 Pharmaceuticals & biotechnology 11 8 666 Transport 12 9 665 Construction & Housing 16 9 228 Finance 9 5 535 Total 93 53 3250 9

Key Research Findings 10

Findings: On average UK and European companies communicate on a similar level about Brexit European companies On average a similar proportion of European and British companies are talking about Brexit. The activity of these companies varies across Europe. French and Swiss companies are communicating the most. UK companies are tweeting more than the European average. Not-tweeted 74% Not-tweeted 72% Tweeted 26% UK companies Tweeted 28% Country Percentage Austria 25.00 Belgium 25.00 Denmark 16.67 France 34.48 Germany 21.92 Ireland 100.00* Italy 20.00 Netherlands 23.08 Norway 12.50 Spain 23.08 Sweden 20.83 Switzerland 40.00 UK 28.11 Europe 26.90 *In Ireland only one company tweet was identified on Brexit 11

Findings: Companies are playing safe. Trade bodies are taking on the bigger Brexit issues Companies are unwilling to talk about Brexit the subject is mostly referred to in a neutral context. Companies are much more likely to talk about the economic impact than trade bodies this is largely because of the disproportionate number of companies in the finance sector. Company impact (what actions a company is looking to take in regard to Brexit, or how it feels Brexit might impact it) has negligible mentions (<60). Debate engagement Industry impact Economic Impact Political Development General Political Opinion Advice Company impact Key topics mentioned 0 200 400 600 800 1000 1200 1400 1600 Trade body Company 12

Findings: European companies appear concerned by the macroeconomic impact of Brexit. UK companies appear preoccupied by impact of Brexit on specific industrial sectors European companies tend to talk more about general developments and overall topics. UK companies are more likely to mention specific industry impacts and appear concerned about the future of their industry. Key topics mentioned by companies (broken into UK vs European companies) Debate engagement (questions/events) Economic Impact Political Development General Political Opinion Industry impact Company impact Advice 0 100 200 300 400 500 600 700 800 900 Europe UK 13

Findings: UK companies are very concerned by Brexit s potential impact on industry across a wide range of issues particularly the competitiveness of UK sectors. European companies appear less worried 140 Comparison between UK and European companies industry impact discussion 120 8.0% 100 24.8% Preparation Cost increase Industry robustness 80 14.4% 12.7% Market / business opportunities Regulation 60 4.8% 3.2% 21.5% Supply Chain Sector down turn / uncertainty 40 20 19.2% 13.6% 15.2% 8.0% 16.5% 10.1% Market access Labour shortage Relocation 14 0 8.8% UK 10.1% Europe

Sample tweets from UK and European companies showing attitudes to Brexit 15

Business as usual both UK and European companies are communicating about a wide range of topics relating to Brexit and are trying to reassure clients with support and statements of commitment to the UK Business opportunities Commitment to the UK Company robustness Preparation Relocation Company downturn / uncertainty Customer support (e.g. workshops, hotline, books) Labour shortage Unchanged priorities Business opportunities Customer support 29% Labour shortage 2% Unchnaged priorities 2% 2% Political engagment 2% Commitment to UK 25% Political engagement Company down turn / uncertainty 4% Company robustness 15% 16 Relocation 6% Preparation 13%

Findings: Sample tweets from European companies Siemens public commitment to the UK Santander comment on manufacturing sector impact ING Economics political commentary 17

Sector Findings 18

Trade bodies communicating are actively and mostly focused on trade, labour shortages and regulations across all analysed industry sectors Industry impact mentioned by trade bodies Preparation Cost increase Industry robustness Market / business opportunities Regulation Supply Chain Sector down turn / uncertainty Market access / Eexport Labour shortage Relocation 0 20 40 60 80 100 120 140 160 180 200 Finance Technology, Telecomms & Media Energy Construction & Housing Transport Pharmaceuticals & biotechnology Food & Drink 19

Trade body tweets about specific industry sector issues 20

Transport trade bodies: Transport trade bodies are mostly concerned by supply chain issues, market access and labour shortages Transport Trade Bodies' industry impact perspective Relocation 1% Sector down turn / uncertainty 18% Industry robustness 2% Cost increase 5% Market / business opportunities 3% Preparation 4% Labour shortage 15% Supply Chain 19% Regulation 6% Market access 27% 21

Transport companies: UK companies are communicating about potential sector downturn and preparations for life after Brexit. European companies are talking about market access UK vs European transport companies industry impact topics 18 Preparation 16 Cost increase 14 12 10 8 Industry robustness Market / business opportunities Regulation 6 Supply Chain 4 Sector down turn / uncertainty 2 Market access 0 UK Europe Labour shortage 22

Construction & housing trade bodies: Labour shortages and sector downturn are biggest issues for construction trade-bodies in the UK and the EU Construction & Housing Trade Bodies' industry impact perspective Sector down turn / uncertainty 30% Supply Chain 0% Regulation 3% Market access 3% Relocation 3% Industry robustness 11% Cost increase 6% Market / business opportunities 3% Preparation 1% Labour shortage 40% 23

Construction & housing companies: Robustness of the construction sector is a primary issue for UK companies mixed with sector uncertainty. Worries across UK and Europe are centred around potential sector downturn 30 UK vs European construction & housing companies industry impact topics Preparation 25 Cost increase 20 15 Industry robustness Market / business opportunities Regulation 10 5 Supply Chain Sector down turn / uncertainty Market access Labour shortage 24 0 0 0

Pharmaceutical & biotechnology trade bodies: Supply chain and regulation are major worries for pharmaceutical and biotechnology trade bodies Pharmaceuticals & biotechnology Trade Bodies' industry impact perspective Sector down turn / uncertainty 7% Relocation 8% Industry robustness 3% Cost increase 1% Market / business opportunities 5% Supply Chain 28% Preparation 10% Labour shortage 2% Market access 7% Regulation 29% 25

Pharmaceutical & biotechnology companies: Market opportunities and future supply chain arrangements are major issues for UK companies. European pharma firms appear publically to be relatively unconcerned 16 UK vs European pharmaceutical & biotechnology companies industry impact topics 14 12 10 8 6 4 2 Industry Preparation Cost increase Industry robustness Market / business opportunities Regulation Supply Chain Sector down turn / uncertainty Market access / Eexport Labour shortage Relocation 26 0 UK Europe

Energy trade bodies: The future regulatory regime remains a major concern for energy trade bodies but balanced by possible market opportunities Supply Chain 1% Energy Trade Bodies' industry impact perspective Sector down turn / uncertainty 17% Relocation 0% Industry robustness 3% Cost increase 2% Market / business opportunities 12% Preparation 4% Labour shortage 7% Regulation 43% Market access 11% 27

Energy companies: Future business opportunities are a primary issue for UK energy firms. European companies are focused on regulation, Brexit preparation and industry robustness UK vs European energy companies industry impact topics 7 Industry 6 Preparation 5 Cost increase Industry robustness 4 Market / business opportunities 3 Regulation 2 Supply Chain 1 Sector down turn / uncertainty Market access / Eexport 0 UK Europe Labour shortage 28

Food and drink trade bodies: Food industry takes a negative view of Brexit due to supply chain worries and potential skilled labour shortages Sector down turn / uncertainty 19% Food & Drink Trade Bodies' impact perspective Relocation 1% Industry robustness 5% Cost increase 9% Market / business opportunities 7% Supply Chain 20% Preparation 8% Labour shortage 17% Regulation 6% Market access 8% 29

Food and drink companies: UK and European food and drink companies communicating similar message about market opportunities and industry robustness UK vs European food & drink companies industry impact topics 6 5 Preparation Cost increase 4 Industry robustness 3 2 Market / business opportunities Regulation Supply Chain 1 0 UK Europe Sector down turn / uncertainty Market access 30

Technology trade bodies: Concerns in the technology industry focus on access to the best talent as well as free flow of data Technology, Telecomms & Media Trade Bodies' industry impact perspective Sector down turn / uncertainty 10% Supply Chain 3% Regulation 6% Relocation 0% Industry robustness 6% Cost increase 0% Market / business opportunities 8% Preparation 6% Market access 33% Labour shortage 28% 31

Technology companies: UK tech companies are talking much more about Brexit than their European counterparts on a wider range of issues 10 UK vs European technology, telecoms & media companies industry impact topics 9 8 7 6 5 4 3 2 Preparation Cost increase Industry robustness Market / business opportunities Regulation Supply Chain Sector down turn / uncertainty Market access Labour shortage Relocation 1 32 0 UK Europe

Finance industry trade bodies: Sector downturn a primary concern for finance industry trade bodies. The finance industry does not cite labour shortages as a pressing concern Finance Trade Bodies' industry impact perspective Relocation 3% Industry robustness 4% Cost increase 6% Sector down turn / uncertainty 33% Market / business opportunities 10% Preparation 13% Supply Chain 0% Regulation 10% Market access 19% Labour shortage 2% 33

Finance companies: European finance companies are talking much more about Brexit than their UK counterparts though industry robustness a joint concern. Market opportunities of Brexit not prominently mentioned 120 Finance companies industry impact comparison UK vs European companies Preparation 100 Cost increase Industry robustness 80 60 Market / business opportunities Regulation Supply Chain 40 Sector down turn / uncertainty Market access Labour shortage 20 Relocation 34 0 UK Europe

Degree of conformity between UK and European companies Pharmaceutical & Biotechnology Energy Food & Drink Finance Technology Transport Construction & Housing Least conformity Degree of conformity Most conformity 35

What does this all mean? 36

Analysis How much longer will it be business as usual? This research shows that companies are keeping their heads down in the Brexit debate, leaving the trade associations to do their bidding for them. When businesses are vocal on social media, they are focused on reassuring customers and suppliers that it will be business as usual. The question is can this last? The negotiations appear to have reached yet another an impasse. There will come a point soon when companies reassuring messages will no longer be credible. The threat of a disorderly Brexit will mean that they can no longer rely on trade bodies to tell their story. The risks of not communicating directly with their customers and business partners will be too great. Pro-Brexit UK politicians argue that the EU27 will have no option but to strike a trade deal on favourable terms because European companies are concerned about losing access to the UK market and will therefore put pressure on the EU27 governments not to punish the UK for leaving the EU. However, these findings suggest that although UK companies are indeed concerned about the impact of Brexit on their respective sectors, European companies are more concerned about the overall impact of Brexit and so a strategy of driving a wedge between EU27 governments and business is likely to fail. 37

Analysis Hard trade-offs to come The findings suggest that trade associations and companies are most concerned about trade, supply chains, labour shortages and regulations. This puts them on a collision course with many pro-brexit politicians and voters who are prepared to accept trading on WTO terms and border checks as a reasonable price to pay for a clean break with the EU. This could lead to a breakdown in trust between businesses and consumers unless business does more to explain the economic consequences of a hard versus a soft Brexit. The research found that many industry sectors share the same concerns on both sides of the channel. This is particularly true for the finance, construction and food and drink industries. This could be due to the fact that these are highly integrated industries which operate on a pan-european level on the basis of the same rules, and which are heavily reliant on free movement of workers. In sectors such as pharma, tech, energy and transport there is less convergence. This is likely due to sector-specific issues such as the relocation of the European Medicines Agency from London to Amsterdam (pharma), the question of data regulation in the UK just as the EU is moving to a new standard (the GDPR), transport (where geography-related issues are particularly important) and energy (where there is still a large degree of regulatory divergence between member states). 38

Analysis Trade bodies come under strain An open question is what impact Brexit and the negotiations leading up to it will have on trade bodies. This is arguably the first time in the social media age that trade bodies across sectors are having to take on such an active and visible role in a pan-european political debate. The interests of the members of trade bodies will most likely start to diverge as detailed negotiations for a UK-EU trade deal get underway in 2018. This could lead to UK industry associations and UK-based companies leaving their European trade associations or being given some kind of observer status. Aside from the organisational and budgetary impacts that this will have on those associations, and depending on how the negotiations are concluded, it could lead to EU27-based trade associations adopting more continental-style policies, with less emphasis on deregulation and self-regulation. In some sectors at least, UK trade bodies could evolve in the opposite direction, exerting pressure on the government to diverge from EU standards. 39

About Madano Based in central London, Madano is a strategic communications consultancy that works in highly regulated sectors. We apply clear thinking to deliver clear solutions for clients. Madano is part of AVENIR GLOBAL, an international public relations network with 600 staff and 17 offices in Canada, the U.S. and in Europe. Madano s Communications, Insights and Creative practices work with clients to provide an integrated approach to building reputation and addressing business challenges. Madano s practice areas include Energy, Technology, Infrastructure and the Built Environment, Healthcare and Transport. Contact: Michael Zdanowski, Head of Energy Michael.zdanowski@madano.com +44 (0) 772 020 0805 Kira Scharwey, Account Director Kira.scharwey@madano.com +44 (0) 772 143 5020 40

About BOLDT BOLDT s Purpose is to deliver business strategy and communications advice to leaders to help transform organisations and performance. We currently have a presence in Brussels, Cologne and Oslo and will be opening a Zurich office this year. Our services range from CEO positioning, brand and reputation, organisational culture and engagement, issues management and crisis communications to public affairs, public policy and political risk analysis. Our practice areas include Energy, Environment, Food and Beverage, Healthcare, Tech, Transport and Trade, as well as Brexit. Contact: Michiel van Hulten, Founding Partner and Head of Brexit advice michiel.vanhulten@boldt.partners +32 483 20 41 58 41

2018 BOLDT / Madano 42