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The impact of Brexit on the BEL20 constituents

Thesis · August 2022

DOI: 10.13140/RG.2.2.24681.98404

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 The impact of Brexit on the
BEL20 constituents

Qualitative research submitted in partial fulfilment for the degree of

MSc. International Business Management with finance

London South Bank University

August 2022

Research by Stephanie Dewit

Student number:4032012
In text words:10752
Acknowledgements

Firstly, I would like to thank the participants of the BEL20 companies, for taking the
time to provide me with the necessary knowledge and answers to complete this
Capstone Business Project.

Secondly, I want to take the opportunity to thank my supervisor, Mrs. Khan who guided
me during the execution of this research. I would also like to thank my course director,
lecturers and friends for their support.

Lastly, I am deeply grateful for my partner and family, who were there when I needed
them during this project, but also throughout my entire journey in London at LSBU.

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Declarations

This Capstone Business Project is completed as partial fulfilment of the requirements

for the degree of Master of science in International Business Management with finance
at the London South Bank University. I declare that this is my own research, excluding
the parts where ideas and/or theories are taken from other sources, which are
referenced throughout this research.

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Executive Summary

This Capstone business Project researches the impact of Brexit on the BEL20
constituents. It aims to understand the perspectives and actions of companies. The
understanding of these implications add value to organisations on how to tackle
uncertainty and macroeconomic shocks. The research consists of five main chapters.

An introduction chapter justifies the research questions, objectives and aim of the
study. It shows the value in researching the impacts from the announcement in 2016
until 2022 and any future views.

The second chapter provides relevant literature in order to understand the more
general impact of Brexit and how companies normally deal with uncertainty. The
literature review underpins the research problem, as there is an obvious lack of
information on businesses’ personal experiences with Brexit.

The third chapter justifies the methods for this qualitative research using interviews as
an instrument to reach the objectives. It provided the methodologies, which were
applied in gathering the information on the targeted population.

Chapter four presents and discusses the results of the interviews after the data
analysis. It is concluded that the BEL20 companies benefit from being global and
having high resource capabilities. The companies did experience more complexity in
changing regulations and required resources to solve these issues. The transition time
allowed them to calculate financial impacts and prepare to the greatest extend
possible. This, together with extending regulations by policy makers, limited the Brexit
impact. However, uncertainty towards the future remains.

This research recommends continuous assessments on the impact of Brexit for EU

businesses active in the UK, to cope with diverging regulatory changes. The
importance in assessing SMEs’ ability in coping with Brexit’s impact was also
uncovered.

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List of tables

Table 1...................................................................................................................... 15

Table 2...................................................................................................................... 16

Table 3...................................................................................................................... 20

Table 4...................................................................................................................... 26

List of Abbreviations

ECB – European Central Bank

EU27 – European union (27 countries)

GDP – Gross domestic product

IFO - The ifo Institute

KUL – Katholieke Universiteit Leuven

SMEs - Small and medium-sized enterprises

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Table of Contents

Acknowledgements ...................................................................................................... i

Declarations................................................................................................................. ii

Executive Summary .................................................................................................... iii

List of tables ............................................................................................................... iv

List of Abbreviations ................................................................................................... iv

Table of Contents ........................................................................................................ v

1 Introduction.......................................................................................................... 1

1.1 Research questions ....................................................................................... 2

1.2 Research objectives ...................................................................................... 2

1.3 Research aim ................................................................................................ 3

2 Literature review .................................................................................................. 4

2.1 Introduction to key concepts .......................................................................... 4

2.1.1 European Union ...................................................................................... 4

2.1.2 Brexit ....................................................................................................... 4

2.2 Theories and previous research on impact of Brexit ...................................... 5

2.2.1 Uncertainty and the impact on businesses ............................................. 7

2.3 The relation between Brexit and COVID-19 ................................................ 10

2.4 Conclusion ................................................................................................... 10

3 Methodology ...................................................................................................... 12

3.1 Logic of inquiry ............................................................................................ 12

3.2 Research Method ........................................................................................ 13

3.3 Sampling ..................................................................................................... 13

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 3.4 Data Collection ............................................................................................ 16

3.5 Data Analysis............................................................................................... 17

3.6 Ethical Consideration................................................................................... 18

3.7 Method Limitations ...................................................................................... 18

4 Presentation and discussion of results .............................................................. 20

4.1 BREXIT - Announcement until end transition period ................................... 21

4.1.1 First key concerns ................................................................................. 21

4.1.2 Managing uncertainty and strategies to tackle estimated issues .......... 22

4.2 BREXIT - After the transition period and TCA ............................................. 24

4.2.1 TCA view & Impact ............................................................................... 24

4.2.2 Financial Impact .................................................................................... 25

4.2.3 Relation with COVID-19 ........................................................................ 26

4.2.4 Impact on Company Operations ........................................................... 26

4.2.5 Strategies .............................................................................................. 28

4.3 BREXIT - View on future ............................................................................. 29

4.3.1 Concerns of future Brexit implications ................................................... 29

4.3.2 Attractiveness of UK market.................................................................. 30

4.4 Discussion of results.................................................................................... 31

5 Conclusions and recommendations................................................................... 35

6 References ........................................................................................................ 38

7 Appendices: ....................................................................................................... 44

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1 Introduction

On the 23rd of June 2016, the UK held a referendum on its membership of the
EU. The referendum resulted in a majority vote for the United Kingdom to exit
the European Union. On the 31st of January 2020, the UK officially left the
European Union and entered the transition period, forcing both parties to
enormous change. New relationships had to be established between the EU
and the UK, causing uncertainty in different industries all over Europe and in
the UK itself.

The UK left the EU single market and customs union on the 31st of December
2020 in the midst of the global pandemic. Europe, the UK, and the rest of the
world had a turbulent couple of years. The economic shock from COVID-19
overshadowed the impact of Brexit especially because of the numerous and
long durations of lockdowns.

The decision of the UK was forecasted to entail a series of effects on global

economies and trading, especially concerning countries within the EU.
Numerous studies and research were conducted to assess the future impacts
through forecasting, simulating and analysing data. The most prominent issues
the exit would inflict on the EU-17 were uncertainty of the situation, concerning
‘Deal’ or ‘No-deal’ scenario, future import and export issues, new obligated
documents, change in business operations, immigration and travel restrictions.

After two years of Brexit, there is an opportunity to investigate what impact

Brexit had on companies within the EU.

The official seats of the European union, the council and the parliament of the
EU are based in Brussels, also known as the “capital of Europe.” The Belgian
city is said to be the heart of Europe due to the presence of European and
international institutions which generate over more than 100,000 jobs. The
importance and location Brussels holds within the European union, gives the

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opportunity to target the Belgian market for this research and leads to the
following question:

What is the impact of Brexit on the constituents of the benchmark stock market
index of Euronext Brussels “BEL20”?

1.1 Research questions

- What were the first concerns and strategies of BEL20 Constituents followed
by the uncertainty caused by the Brexit announcement?
- What impact did the TCA have on BEL20 constituents?
- How did Brexit affect the BEL20 constituents financially?
- What is the relation between COVID-19 and Brexit for assessing financial
impacts on BEL20 companies?
- How would BEL20 constituents describe the overall impact of Brexit on
their company?
- How did Brexit impact the view of BEL20 companies on the future of the
UK market?

1.2 Research objectives

The above research question can be divided in five main objectives.

- Explore the concepts of Brexit, European Union and BEL20.

- Explore and examine the general effects (uncertainty, strategies, concerns)
Brexit inflicted on the BEL 20 Constituents.
- Investigate the financial and operational impact of Brexit on the
constituents.
- Examine the relationship of COVID-19 and Brexit and how it affected the
constituents.
- Explore the future threats and opportunities Brexit will hold for the BEL20
listed companies.

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1.3 Research aim

The literature review concludes the research problem derived from the
literature. This research addresses this problem by examining the effects
Brexit had on the BEL20 listed companies. The aim is to receive insights in
direct and visible consequences from managers within these companies. This
leads to a better understanding of the present and future effects Brexit inflicted
on large Belgian companies and provides the ability to explore future
opportunities and threats.

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2 Literature review

This literature review will explore the key concepts of Brexit and provide
information about previous research performed by the ECB on the implications
for the economy. This chapter also provides insights on uncertainty, its effect
on businesses and how policy makers play a crucial role in this. Lastly, the
relation of the COVID-19 Pandemic and Brexit are discussed, followed by a
conclusion of the literature view, which forms the justification for this research.

2.1 Introduction to key concepts

The first part of this literature review will introduce the reader to the concept of
the European Union and the event of Brexit and growing “Euroscepticism”.
These key concepts build the basis of the research question of this Capstone
Project and are therefore clarified underneath.

2.1.1 European Union

The European Union is a political and economic group of countries, built with
the aim to receive peace amongst neighbour countries, right after World War
ΙΙ. Establishing trade agreements between countries, would mean less
chances of going to war with each other. The EU grew into a ‘common market’
inflicting growth and kept on expanding (European Commission, Directorate-
General for Communication, 2020). Today the European Union counts twenty-
seven countries. It promotes democratic values and is the largest trader of
manufactured goods and services in the world. Nineteen of the EU countries
share the euro as official currency (European Union, 2022).

2.1.2 Brexit

On the 23rd of June 2016, the UK voted in a referendum on its membership of

the EU. ‘Should the UK remain a member of the European Union or leave the
European Union?,’ was the question asked. The referendum resulted in
51.89% of voters to vote for a European Union exit (European Union, 2022).
Later in 2019 after the elections, the British parliament ratified the withdrawal
agreement with the European Union. Both parties negotiated for months to find

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agreements on their future relationships. The European Union Act 2020
‘withdrawal agreement’ became law. On the 31st of January 2020, the UK
officially left the European Union and entered the transition period. 2020 began
with some major changes in the European union and would lead to a turbulent
transition time (Annette, 2022).

In 2010 Dr Chris Gifford had already performed research about the sovereignty
and the Euroscepticism of Britons. Years later new decisions by the EU led to
growing Euroscepticism in the UK. A high inflow of new workers, causing a big
impact on employees’ pay level and the opening of the borders by Merkel for
over more then 1 million immigrants, are said to be the main reasons for Brexit
(Wlaszcuk, 2018). Britons wanted to take back control over their country from
the Westminster and Brussels elites and wish to restore sovereignty and
greatness of the United Kingdom (Gifford, 2020).

2.2 Theories and previous research on impact of Brexit

In October 2020, the European Central Bank published a review of economic

analyses on the potential impact of Brexit. They use seven studies, which all
analyse the economic impact that Brexit has on individual EU countries.

The ECB reviewed and presented the economic trade impacts surveyed by
Patrick Bisciari. Bisciari sampled academic studies (published before 2018) on
the long-term impact of Brexit on GDP and welfare for both the UK and EU27.
His paper shows a variety of results, depending on diverse scenario’s and by
adding different channels such as trade, global value chains, EU budget and
integration. By adding different parameters, a clear and overall consistent
estimation on the economic losses of the EU27 and the UK can be made
(European Central Bank, 2020).

When looking solely at the trade channel, the small open economies closely
related to the United Kingdom, will be impacted more then other EU member
states. The more impacted countries are Ireland due to its geographical
proximity and Luxembourg because of its specialisation in financial services.
As part of the UK’s commonwealth countries, both Cyprus and Malta are also

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estimated to be impacted more. Following the assumptions while only using
the trade implications, Belgium’s GDP losses are around an average of one
percentage (Bisciari, 2019). The studies covered by Bisciari, estimated results
that differ widely for the GDP losses of Belgium. When looking at some of the
individual studies, the KUL gives a result of 2.3% GDP losses and IFO a result
of 0.5% (Vandenbussche, 2017) (IFO, 2017). This all depends of course on
the different modelling approach they use and the extent of the trade
agreement, soft /hard Brexit deals (European Central Bank, 2020). The study
explains the difference with Germany, France, Italy and Spain. Belgium is an
example of a relatively smaller country with strong UK trade relations, whereas
the larger EU counties are anticipated to trade less with the UK (Alessandrini,
et al., 2022). The average loss of GDP estimates 0.6 percentage in the EU27
(Bisciari, 2019).

Both the ECB, Bisciari and the reports he sampled show the importance of the
Free Trade Agreement (FTA) between the EU and UK. The FTA is expected
to halve the GDP losses. In case of a no-deal Brexit scenario, the study
estimates a much bigger impact, especially for the UK. In all scenario’s
different studies shown by the ECB expect a lose-lose situation for the UK and
EU27. Brexit will inflict losses of GDP for both parties in the upcoming years,
which also hold implications for companies (Hill, et al., 2019).

Important to note is that these studies were carried out before Brexit became
law. It is now known that both parties were able to sign the Free Trade
Agreement.

The EU–UK Trade and Cooperation Agreement (TCA) is a free trade

agreement agreed upon by the negotiators on 24 December 2020, one week
before the end of the transition period (Mackul’akovà & Hynek, 2022). The
Parliament house of commons Library published the agreement stating that it
provides arrangements in areas such as trade in goods and in services,
intellectual property, transport, energy, fisheries, public procurement, law
enforcement, legal/criminal matters and collaboration in Union programs. The
agreement is “underpinned by provisions ensuring a level playing field and

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respect for fundamental rights” (Fella, et al., 2020). The agreement however is
no match to the economical integration before Brexit. The European
commission did voice that the agreement provides “a solid basis for preserving
our longstanding friendship and cooperation.” (European Commission, 2020)

Signing the TCA as mentioned before was a vital factor to reduce the impact
of Brexit on EU countries and its companies. However, uncertainties have
been weighing heavily on economic activity. Uncertainties and impacts often
felt by companies relying on trade and/or business with the United Kingdom
(Alessandrini, et al., 2022).

2.2.1 Uncertainty and the impact on businesses

Ongoing negotiations concerning the future relationships post-Brexit, covered

various scenarios that implied different impacts on individual economies. The
uncertainty of the relation between the UK and the remaining EU27 countries
caused political and economical concerns, especially after the referendum.
Potential future effects, such as trade barriers, tariffs and different jurisdiction,
could hardly be anticipated in the period after the referendum.

The surprise of the outcome was also reflected on the financial markets around
the world. As mentioned earlier, it is hard to measure the direct impact on stock
markets, since multiple events of political destress occurred during the time of
the referendum. Earlier studies performed by Ramiah et al. (2017) and
Breinlich et al. (2018) did provide evidence that an increase of political
uncertainty effects stock markets in a negative way. Belke et al. (2018) shows
that political uncertainty caused by the Brexit referendum, provokes instability
in key financial markets and has the potential to damage the economy not only
in the UK, but also in European countries. Additionally, this uncertainty
generates concerns about legal frameworks for companies in the UK that
performed business with the EU and vice versa. Uncertainty can have severe
effects on their business models (Kreuzer, et al., 2022).

US economist Frank Knight (1921) was first in examining the important role of
‘uncertainty in shaping economic behaviour’. He made a distinction between

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risk and uncertainty. Knight concluded that risk can be measured, but
uncertainty is not easily quantifiable. ‘Black swan events’ (Taleb, 2017), such
as Brexit (as it was initially perceived) and the Covid-19 pandemic cause such
acute uncertainty, that they hold severe consequences of an ‘unknowable risk’
for firms (Brown, et al., 2020).

Uncertainty has always been a big concern for companies. “Uncertain

economic growth” is considered to be the biggest threat to businesses around
the world, according to a global CEO survey performed by PwC. Figure 1
below shows the variation in forecasts of UK economic growth between April
2014 and October 2016.

Figure 1: Forecasts of UK GDP growth are becoming increasingly uncertain (PwC analysis, Consensus)

Similarly, the Economic Uncertainty Index (EPU) showed enormous peeks

during this period. The UK election result and the Brexit referendum were a
major source of additional political uncertainty. For UK-based businesses, but

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also European companies and other businesses closely in relation to the UK,
it became increasingly difficult to operate and strategize with confidence.
Uncertainty is said to have a cross cutting impact on the entire economy, as it
affects households, businesses and financial markets. For example,
consumers will save more money instead of spending, businesses cut back on
productions and investments and financial markets tend to be more volatile
with higher risk premiums (Kupelian, 2017).

Unexpected events disturb a company’s understanding of their environment

and how they can manage a complex situation in order to pursue their business
activities (Maitlis & Christianson, 2014). When facing uncertainty, a business
must figure out, interpret and analyse as many signs as possible to understand
the changing environment, in order to react adequately (Camp & Lesort, 2019).

Policy makers play an important role in times of uncertainty. They have the
ability to mitigate uncertainty by ensuring regulatory changes are as gradual
and predictable as possible, for example by establishing, transparent and well-
communicated strategies with flexibility to act quickly (Kupelian, 2017).

Previous research suggests that SMEs have lower resilience against

unexpected shocks, compared to multinational enterprises. (Brown, et al.,
2020; Laufs & Schwens, 2014; Doshi, et al., 2018) SMEs are often controlled
by managers with limited resources, contingency planning or foresight
capabilities, which makes it more difficult to handle uncertainty as opposed to
multinational enterprises (Brown, et al., 2020). Limited financial and personnel
resources might also limit SMEs’ ability to enter foreign markets (Laufs &
Schwens, 2014). The last thing is of significant importance for this research
since the United Kingdom left the European customs union and the
single market.

Brown, et al. (2020) voices that uncertainty is becoming the ‘new normal’. The
Brexit referendum, the ongoing financial crisis, the pandemic and recent war
conflicts, all underpin this argument. The ECB concludes that in 2020

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uncertainty increased to historically high levels, which is directly linked to the
COVID-19 outbreak.

2.3 The relation between Brexit and COVID-19

The importance of Brexit was not to be underestimated, businesses had to

develop plans to tackle the situation and Europe and the UK faced challenges
in negotiating the appropriate agreements. However, Brexit was no longer the
expected centre of attention in 2020. Just one day before Brexit became law,
the WHO declared the coronavirus outbreak (TUC, 2020). Now the European
union and the UK had two major events to deal with, that both could have
serious impacts on the financial situation and future of companies (Gorynia, et
al., 2021). The global impact of the pandemic, combined with uncertainty about
the impact of Brexit, contributed to increased volatility on the European and
British financial markets (Mackul’akovà & Hynek, 2022). The fact that Brexit
and COVID-19 occurred at the same time, makes it also more difficult to
distinguish and measure their influence and impact on the stock market (De
Lyon & Dhingra, 2021).

Apart from distinguishing causes for stock market volatility, there are other dual
effects in play as well. For example, the justifications for the collapse of trade
with the European Union from the UK. This collapse is due to a couple of
overlapping factors. The national blockades introduced in response to the
rapidly increasing number of COVID-19 cases and the new border rules
entered into force on 1 January 2021, both impacted import and export from
and to the UK (Milliken & Schomberg, 2021). The extent of the economic
consequences of Brexit are therefore difficult to measure on a financial aspect
(Mackul’akovà & Hynek, 2022).

2.4 Conclusion

Previous conducted studies, as described above give a general insight on how

Brexit affected the economy of different countries and how it is connected to
an increased level of uncertainty together with COVID-19. Most studies on
European and Belgian companies were conducted to forecast the Brexit

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impact, without knowing the extend of the deal/no-deal scenario’s (Belke, et
al., 2018; Vandenbussche, 2017; Bisciari, 2019; Camp & Lesort, 2019).
Additionally, Brexit was implemented two years ago, which implies limited
research and available knowledge on the topic, especially more detailed
knowledge on business’s experiences with Brexit. The lack of personal
business perspectives on the matter and the difficulty of the COVID-19
pandemic to assess the impacts of Brexit, form the basis of this research
problem.

More then two years after Brexit, there is an opportunity to assess the impact
it had on the Belgian based companies by looking at the point of view of
managers and business leaders.

This study takes place after the TCA agreement, and thus has the advantage
to gain insights in businesses experiences with Brexit, after the referendum,
during the transition period, after the TCA and the two-year period of
implementation. Therefore the uncertainty aspect as well as the relation with
COVID-19 in 2020 will be taken in to account and can be evaluated from a
business point of view.

A direct approach in assessing the effects and the anticipated changes by

these companies can provide more practical implications to some of the
theories mentioned above.

This research uses a qualitative approach, to better understand the

perspectives and experiences of businesses, more specifically the BEL20
companies. Given they represent the benchmark index of the country and are
active in diverse sectors, these companies give an overall view on the effects
of Brexit on listed companies of Belgium. The index is also the general
indicator of the Belgian stock market. It serves as an underlying for structured
products, funds, exchange traded funds, options and futures (Euronext, 2022).

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3 Methodology

This chapter will discuss and give an understanding of the applied research
methodology of this Capstone Business Project. A justification will be provided
for the logic of inquiry, research method, sampling, data collection and
analysis. The ethical consideration, reliability and validity as well as the
limitations are also discussed in this chapter.

3.1 Logic of inquiry

As the literature review shows, Brexit has been researched widely to forecast
its impacts on economies within the EU and the UK. These studies focus
primarily on quantitative data. This research aims to capture the personal
experiences and perspectives of companies. This is done by doing a
qualitative study focussed on interviewing the companies’ key members of the
Brexit period.

The five research philosophies in the business and management environment

are: realism, positivism, interpretivism, pragmatism and postmodernism
(Saunders, 2019). This research will follow the interpretivism philosophy.
Throughout this research small samples of qualitative in-depth investigations
will be held. The way managers perceive and experience the impact of Brexit
may vary from company to company and person to person. These diverse
views and different approaches to tackle the impact of Brexit, will contribute to
a better understanding of the overall situation.

Studies can be performed to measure Brexit’s financial, economical, and legal

impacts on countries and companies, by deductive reasoning and testing the
hypothesis of studies performed in the past. This study however, will be based
on understanding the meaning managers attach to an event like Brexit.
Therefore an Inductive approach will be followed by reasoning specific
observations to broad generalizations and theories (Solomonoff, 1960;
Saunders, 2019)

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3.2 Research Method

According to Saunders (2019), three methods can be used in the research

strategy: qualitative, quantitative, and mixed methods. In this study as
mentioned before, a qualitative research strategy will be approached, because
of the intensive interviews with the participants. Interviews were identified in
this research as the most appropriate and effective instrument to solve the
research problem. These interviews will be semi-structured and questions
are open-ended to receive and collect in-depth information on opinions,
experiences and business related behaviour about the subject (Saunders,
2019). This method of interviewing allows the interviewees to answer a
structured number of questions, while adding information and thoughts
throughout the process of the interview. This extra information enables the
opportunity to identify additional relevant themes, which only strengthens the
result of the research question (Kallio, et al., 2016).

3.3 Sampling

This research aims to understand the impact of Brexit, in specific on Belgian

companies. The BEL20 is a free float market capitalization weighted index that
represents the performance of the twenty largest and most actively traded
shares listed on the Brussels Stock Exchange (Euronext, 2022). By using the
BEL20 constituents as target population, lots of important data and
conclusions can be made as it represents the benchmark stock market
index of Euronext Brussels. Constituents of the BEL20 are also active in a
variety of sectors, such as the pharmaceutical, Insurance, beverages and
banking sector. Table 1 underneath lists all the constituents of the BEL20 and
is therefore determined as sampling frame.

List of BEL20 Constituents 2022:

COMPONENT ISIN TRADING ISSUER

LOCATION COUNTRY

AB INBEV BE0974293251 Euronext Brussels Belgium

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 ACKERMANS BE0003764785 Euronext Brussels Belgium
V.HAAREN

AEDIFICA BE0003851681 Euronext Brussels Belgium

AGEAS BE0974264930 Euronext Brussels Belgium

APERAM LU0569974404 Euronext Amsterdam Luxembourg

ARGENX SE NL0010832176 Euronext Brussels Netherlands

COFINIMMO BE0003593044 Euronext Brussels Belgium

COLRUYT BE0974256852 Euronext Brussels Belgium

D'IETEREN GROUP BE0974259880 Euronext Brussels Belgium

ELIA GROUP BE0003822393 Euronext Brussels Belgium

GALAPAGOS BE0003818359 Euronext Amsterdam Belgium

GBL BE0003797140 Euronext Brussels Belgium

KBC BE0003565737 Euronext Brussels Belgium

PROXIMUS BE0003810273 Euronext Brussels Belgium

SOFINA BE0003717312 Euronext Brussels Belgium

SOLVAY BE0003470755 Euronext Brussels Belgium

UCB BE0003739530 Euronext Brussels Belgium

UMICORE BE0974320526 Euronext Brussels Belgium

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 VGP BE0003878957 Euronext Brussels Belgium

WDP BE0974349814 Euronext Brussels Belgium

Table 1: BEL20 Index composition © 2022 Euronext

Out of the sample frame, this research determined a sample size of five
companies, and thus five different interviewees had to be selected. The
selection was done based on non-probability sampling. This type of sampling
does have a higher risk of sampling bias. Making assumptions about the
population with the non-probability sampling is weaker than with probability
samples. This is because you use a subjective and non-random selecting
method. This can lead to more limited conclusions. Therefore the subjective
selecting process should be made as representative as possible. This type of
sampling technique is often used in qualitative studies, where the aim is not to
test hypothesis of large populations, but to develop new insights on a rather
small population.

The sampling procedure started with contacting the chairman of one of the
BEL20 constituents that had already been interviewed once before by the
researcher. The same chairman is also president of a Belgian federation of
enterprises. This contact person enabled the researcher to find participants in
a population that is difficult to access. The non-probability sampling technique
that is used here is called “Snowball Sampling.” The collaboration with this
person, enabled the researcher to have access to the entire sample frame.

The targeted participants within the different companies were required to have
sufficient knowledge on the Brexit situation effecting their company. The
participants had to reflect on practical impacts of Brexit on the company’s
financial situation, operations and strategies and needed authority on sharing
this information. Therefore higher management participants were needed, a
population that is indubitably difficult to access, especially when it involves
stock listed companies that are part of a country’s benchmark index. By
obtaining the snowball technique for the non-probability sampling, the first
participant, the chairman of a BEL20 Constituent, was defined. Later in the

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process of contacting other constituents (with the help of the first participant),
the desired sample size of five was reached. Underneath a representation of
the five participants and their individual role within the BEL20.

COMPANY SECTOR ROLE OF INTERVIEWEE

1 Company A Financials Chief Economist
2 Company B Pharmaceutical Senior Manager Global Trade
Compliance & Member of Brexit
taskforce
3 Company C Pharmaceutical Head of investor relations
4 Company D Financials Chairman
5 Company E Industrial metals Senior Vice President
Table 2: Research participants (BEL20 constituents)

3.4 Data Collection

As mentioned before, primary data was collected by adapting a qualitative

research approach. The Data collection happened by performing one on one
interviews, asking participants open-ended questions. Semi-structured
interviews were performed to help define the areas that needed to be explored
and to provide the participant and interviewer with the freedom to pursue an
idea or response in detail. The flexibility of this approach often leads to new
insights and findings in research (Saunders, 2019).

All interviews were pre-arranged through email and the list of questions was
send out beforehand. The interview question list that was send out and used
during each interview can be found in appendix 1. Four out of five interviews
were held through Microsoft Teams and Zoom. One interview was held in the
office. All interviews took between thirty minutes to one hour, depending on
the amount of information provided by each participant. A voice recorder or
phone were used to capture the entire content of the interviews. It also allowed
the interviewer to focus more on asking follow-up questions. Before the start
of the meeting, the purpose and confidential nature of the research was
explained. Consent of recording was asked before the start of each interview
and granted by the participants.

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Throughout this research different measurements were used. Because of the
in-depth interviews, the measurement is mostly nominal. Ordinal data was also
collected, when asking different participants about providing a scale to
measure financial impacts. Important to note is that the financial impact of
Brexit will not be based on annual statements or hold quantitative value, since
the cause for financial impacts, alongside the dual affects of COVID-19 are
hard to determine and distinguish. The research is solely to understand the
view, actions and perceptions of the participants and the related BEL20
companies.

3.5 Data Analysis

Once the meetings were finished, the recordings were played again to
transcribe the interviews. By reading the transcriptions two to three times, a
first categorization of responses into key themes was made. Thematic
coding is performed to analyse particular occurrences of themes in
unstructured texts (Saunders, 2019).

This first step was later reviewed again to check the categorizing and to make
new adjustments until the appropriate themes were identified. These themes
where given a code, which were allocated next to the corresponding extracts
of passages in the transcripts (Seidman, 2012). This led to an overview of
responses of all five interviews, together with the corresponding theme code.
By printing the transcripts, the process of linking themes and connecting them
was simplified. The process of summarizing the matching extracts/responses,
to the corresponding themes was conducted through Microsoft Word.
Examples of themes used are “initial concerns” (IC), “initial actions” (IA),
“Uncertainty” (UC), “Taskforce” (TF) and so on. After this process, the
corresponding extracts were put together with the right theme code, while also
providing each extract with a company code (see table 3). After the allocating
process, the themes were categorized under the appropriate subtitles/core
themes. The titles of the analysis are structured in a chronical way, in line with
the interview questions and the discussed subevents of Brexit. After this

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process all the data was organised and structured to be further described
under the “Presentation and discussion of results” chapter.

The transcripts (shown in appendices 2 to 6) were anonymised, to ensure the

confidential nature towards the companies.

3.6 Ethical Consideration

This Capstone business Project complies with ethical guidelines alongside the
guidance and approval provided by LSBU. This research is based on
interviews with higher management personnel of BEL20 listed companies. The
participants are adults and were informed on the purpose of the research. Each
participant gave consent to partake, before commencing the interview. The
interview questions were also delivered approximately three days before the
interview, so that they would be previously informed on the nature of the
questions. Participants had the right to withdraw during the entire process. The
information they were willing to share completely relied on their wishes.

Constituents of the BEL20 are stock listed companies, this is why anonymity
was granted to the participants and corresponding companies, even though
this was not a necessity for them. Additionally, information was double
checked with each participant to ensure a trustworthy environment. The
information used for the analysis (also provided in the transcriptions), is
information the participants agreed on to use for this project.

3.7 Method Limitations

Like in any research, some limitations should be considered. As mentioned

before a small sample is used, due to the limited time of ten weeks. The limited
amount of time required the appropriate time management during this process.
Additionally the Non-probability sampling technique leads to selecting on
availability and access, so it is not randomly chosen.

These factors and the subjectiveness of interpretation by the researcher during

the interviews, might affect the reliability of the research. This reliability aspect
has been considered, since all interviews were recorded and later also

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transcribed. Recordings were listened to carefully, to ensure correct
transcriptions. These additionally strengthened the perception of what has
been said.

A small sample size also carries a validity burden. The five interviews were in
line with the targeted sample size. The interviewees were also extremely well
matched with the research question, since it were all members of top
management, with lots of expertise. This added much value to the research,
since it was focussed on practical impacts, experiences and perceptions,
which could only be assessed in qualitative research with top-level
participants. The results obtained by the interviews are also answering the
desired questions and thus are confirmed within the aspects of reliability and
validity.

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4 Presentation and discussion of results

The interviews seek to form an answer to the research question and sub
questions, in order to determine a conclusion on what impact Brexit inflicted
on BEL20 constituents. Five interviews were conducted, which are listed in
table 3 below. The research covers companies of three different sectors, with
a variety of activity in the UK. All companies however do have strong links with
the UK market, in terms of having UK offices, research centres or trading
goods to/from the British market. Table 2 in the methodology chapter, provides
an overview of the different company roles of the participants. As mentioned
before, the participants are experts in their field, highly qualified and authorised
to provide answers. An overview of the interview questions (appendix 1) and
transcriptions (appendix 2-6) can be found in the appendices section and are
identified with the company code.

COMPANY CODE SECTOR UK OFFICES TRADE OF GOODS

WITH UK

1 Company A CAF Finance Yes No

2 Company B CBP Pharmaceutical Yes (research Yes

centre)

3 Company C CCF Finance Yes No

4 Company D CDM Materials No Yes

5 Company E CEP Pharmaceutical Yes Yes

Table 3: Overview of company (&codes), sectors and activity or dependence on UK market.

The results section has been organised chronology, in line with the Brexit
events. The first section provides results on questions related to the Brexit
announcement until the end of the transition period, followed by the results for
the period after the transition period, and introduction of the TCA. After that,
the participants’/companies’ view on the future after Brexit is covered. The last
section provides a discussion/evaluation of the results, with interpretations
related to the existing literature.

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4.1 BREXIT - Announcement until end transition period

The first set of questions asked to the different companies, are related to the
period from the announcement of Brexit to the end of the transition period in
December 2020. This period is known for its uncertainty, regarding the extent
of the Brexit deal. The questions for the participants in this section, show a
view on the companies’ first key concerns, their way to handle the uncertainty
and the first strategies to tackle issues directly related to Brexit. This part is an
important first step in assessing the overall impact Brexit had on BEL20
companies.

4.1.1 First key concerns

The key concerns of the companies varied depending on which sector each
company was active in. For the financial companies there were concerns
around the financial regulations. Company A stated that “An important first
question for us was: Is our business continuity assured?” (CAF) Company C
specifically addressed their concerns around the solvency routine. The fixed
capital requirements for insurance companies are homogenized within the EU.
They state that: “The UK might change the rules, which means that all the work
we did to make that coherent in our group, would have to be redone.” (CCF)

The two pharmaceutical companies stated their concerns on the overall

uncertainty. Company E expressed worries about changing documentations,
in this case related to their medicines. “The UK and Europe had a global view
on the approval process on pricing and indications. The big worry was that
there would be different regulations about medication within the UK market.”
(CEP)

Company D also shared concerns about increasing complexity and risk.

Because of the uncertainty they had no idea of the impact on their trade,
administration, custom regulation, cross border transactions etc. The
participant expressed their early concern on new taxation regulations, because
of the low margin on their metals, extra taxation in the UK could “wipe out the
complete margin.” Just as all the other companies there are also concerns

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about changing regulations, this time about emission controls within the EU.
“If this suddenly became different in the UK, we must create different
technology roadmaps and also different products for a single market. On a
global scale the UK is a relatively small market, so this increases our costs for
a very small benefit.” (CDM) Company D also mentioned that the UK is a
“strong contributor to innovation and technological development” and that the
EU research programs, allowed them to easily collaborate with UK universities.
The company had concerns for the future of these beneficial collaborations
with the UK. (CDM)

4.1.2 Managing uncertainty and strategies to tackle estimated issues

Overall companies had a challenging time figuring out what impact Brexit
would have on their company before an agreement was made at the end of
2020. This section will provide more insight on how the companies acted on
the concerns and how they strategized during these uncertain times.

Company A answered to the uncertainty with contingency planning. Given the

quick signal from the financial regulators within the EU and UK, the company
was reassured after the Brexit announcement. The participant explains that
the financial institutions provided regulations that would not depend on the
progress of the Brexit negotiations. This was done in the form of extending
existing equivalence statements, which allowed most financial operations to
continue as before. (CAF) Additionally, Company A stated that they have a
branch in London mainly because this is a HUB but is not part of their main
export channel. “As long as our facilitative activities in London could continue
undisturbed, it was important to do a bit of contingency planning before
implementing very concrete actions and new strategies.” (CAF)

Company C, as mentioned above had concerns about their solvency routines,

due to fixing capital requirements that might change. Just like company A, they
were also reassured by the extension of the equivalence statements. The
company also stated they did not have to rethink their own value chain or
structure, since they have a legal entity with local management in each country

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they operate in. Those teams and the local Brexit taskforce with members of
corporate managers will tackle future issues in the UK. (CCF)

Both pharmaceutical companies put together a taskforce as well. Company B

stated that the European federation of pharma associations build up different
subgroups to share experiences with other pharma companies. Those
opinions and questions were collected and lobbied between different
authorities and the European Commission, to make sure the pharma voice was
heard. By getting insights via this association, they could handle their
uncertainty and tackle issues early on. The company also had to separate the
supply to the UK and the republic of Ireland, but mentioned that this was
transitioned early on. “Another thing that we did is building stock, to the
greatest extent possible, because of the unknown.” The company expresses
that their main aim is to supply their patients, so because of the estimated
troubles of import and export after Brexit, this is how they handled the
uncertainty. (CBP)

Unlike company B, which has the taskforce based in Belgium, Company E has
a local taskforce in the UK. This is because company E has an operating office
in the UK and company B does not, but has research centers in the UK.
Together with the head of the UK, the taskforce followed everything and
worked together closely with local authorities on regulatory affairs and supply
chain. Company E had a more wait and see approach, but was ready to adapt
her strategies when new regulations within the UK were introduced. (CEP)

Company D, started of by answering the question that it is difficult to prepare

for the unknown. They did perform practical preparations since they rely on
tight scheduling in the company. For their business continuity, intime
shipments both import and export are really important. “This was the most
crucial and sensitive part for us in the transitioning period.” To ensure the
preparations, the company also put a global taskforce in place, specifically for
their purchase and transportation teams. (CDM)

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4.2 BREXIT - After the transition period and TCA

The UK officially signed the withdrawal agreement and entered a transition

period at the beginning of 2020. During that year new negotiations were done
to cover the future of the UK-EU relationship. One week before the end of the
transition period, the TCA was announced. The next section covers the
answers of the participants after the transition period, which started of with the
announcement of the TCA. This section covers the impacts of Brexit until the
end of July 2022.

4.2.1 TCA view & Impact

The first question asked in this section, was directly related to the BEL20
companies’ first impression and implications on/of the TCA.

The two companies’ active in the finance sector, ‘CAF’ and ‘CDF’ answered
fairly the same. For both companies the TCA did not have much effect,
compared to the years before. “As long as we don't trade goods ourselves, this
agreement means little to us and as long as the equivalence statements are
extended, we just focus on contingency plans.” (CAF)

Both Pharmaceutical companies, also have an aligned view on the TCA.

Company B states that “because we are a pharma company, our finished
medicines that we supply to our markets are free of duty.” “From that point of
view there were little benefits for us, if we compare to the time before the TCA.”
(CBP) Company E additionally mentions that the regulatory regime in Great
Britain broadly aligns with EU regulations but warns that the TCA might not
provide a mutual recognition of UK and EU pharmaceutical regulations in a
few years. (CEP)

An important additional factor for Company B is related to their research

centers in the UK. For the company it is of foremost importance to minimize
the impact on their research cycles. Research components, however need to
be send back and forth from UK to Europe and the other way around, to
undergo more tests. Some of these components are dutiable products, but

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there is not always time to check the concrete rules of origin and potentially
benefit from some TCA regulations. Here they choose cost over longer lead
time. In some of these cases they do however benefit from the TCA to avoid
costs, but this is minimal. (CEB)

The materials company assures that their core business is untouched, but that
the administration got more complex, in the period after the TCA. (CDM)

4.2.2 Financial Impact

“You have to adjust key data and systems, everything in big companies is
automated (contracting, shipment bills, purchase orders, delivery notes).” “This
is a lot more work, and work costs money.” This statement of Company D
shows that changing regulations lead to more resources to finance, to get the
extra work done.

The two pharmaceutical companies had a different way of strategizing which

led to a different impact on a financial level. Company B, as mentioned before
built an enormous amount of stock to tackle import issues. Both company B
and E, mention that the extra resources needed for additional paperwork did
cost the company money.

The financial companies both agree there were additional financial costs to
calculate risks and to add new resources to implement strategies.(CAF)
Company B adds that for a company with over 2000 employees in the UK there
was maybe additional work for ten employees, for a smaller group this cost
would weigh heavier then for a global company like “CCF”. Company C also
adds that there were no significant changes in their share price when Brexit
was announced.

Financial Impact Scale

allocated

Company A Low

Company B Moderate

Company C Low

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 Company D Moderate

Company E Very Low

Table 4: Financial impact scales

The financial impacts scales were based on the global perspective of the
companies. Company D even stretches the following: “with a focus on UK only,
the work that we had to do to accommodate to the UK flows, is significant. If
we just allocate the cost necessary to only to the UK part, this is considerable
high.” (CDM)

4.2.3 Relation with COVID-19

Related to the financial section, there was a question specifically asked to

understand the participants’ view on the distinction and relation of the Brexit
impacts and COVID-19.

Company C mentioned the greater impact of the pandemic, but also the fact
that it is difficult to separate both impacts from one another. Company A states:
“COVID-19 overshadowed everything and certainly on the PNL. That
overlapping period of Brexit and Covid makes it very difficult to distinguish one
from the other.”

Company B and E are also positive COVID-19 led to more disruption, than
Brexit. The company adds “Maybe also because we didn’t have as long to
prepare for it, because no one anticipated it at all.” (CBP)

“In big companies it is difficult to look at which impact is allocated to one

another. That is very hard for our company, especially since it were such
turbulent times.” The materials company made this statement. (CDM)

4.2.4 Impact on Company Operations

An overview of the overall impact the companies endured of Brexit after the
transition period, will be addressed in this section of the results.

Company A had lots of questions following the period after the TCA
agreement, but expected a greater impact. The Chief Economist who was

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interviewed for this company says that both “CAF” and their customers had
enough time to adapt to the new situation and that the company experienced
it as a gradual process. The participant did mention that with Brexit everything
got more complicated, because you have to take a new set of regulations into
account. With having operations in a new market, the company did experience
some difficulties in helping EU clients with transactions in the UK. For now, as
mentioned before, the company is reassured by the extension of the equivalent
statements. “Brexit was kind of an additional shock, because we are very
diversified and since our core market is not in the UK, this is less important to
us.” (CAF)

The chairman of Company C states the following: “Lots of contracts had to be

reviewed, it was a tick the boxes exercise. Contracts we have with the UK
providers of robotics and AI, had to be reviewed. Will they still align with the
regulations of UK and Europe, was a big question? For us as a group the
transition went rather smooth, we didn’t suffer but also did not receive
opportunities due to Brexit.” (CCF). In the interview the chairman also
concluded again that they experienced little impact, mainly because they are
an international company, and are accustomed to handling different markets
and regimes.

Company B explains that they needed external support to read through

documents, which impacted the company on a moderate financial scale. The
head of compliance expresses that the gradual implementation of checks at
the border by the UK, led the company to still discover and finding out every
day, what needs to be done and what will be of an impact to them. The
participant concludes that the overall impact on ‘CBP’ is minor “We have
prepared it for years, so we also didn’t experience it as such a sudden event.”
“We are used to cross border movement and sending ship materials cross
border.” (CBP)

Company E was very firm on the impact of Brexit. The head of investor
relations voices that the general operations were not impacted. On their UK
operations the participant answered: “It was a bit of a headache to get

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 everything right. Especially to work with the local regulators and organize the
supply chain and everything, but no major impacts at all.” The company
however is still looking closely at the regulations. New changes can have a
bigger impact and would be important to identify early on for their business
operations. (CEP)

Company D mentioned their early concerns regarding the collaboration with

universities. “We already see now as a result of Brexit, that there is almost no
interaction with the Europe programs. This is a quite negative development.”
The Vice president says this is because they now miss the power of a bigger
consortium. The participant also expressed the need to adapt the
automatization systems for the new UK market. That impact led to a higher
cost due to more resources. “If we look back now on the experience that we
have had over the past years, things have simply become much slower and
more expensive for ‘CDM’.”

4.2.5 Strategies

The figure below, gives an overview of the answers of participants regarding

their current/ future strategies.

Figure 2: Strategies visualisation derived from data analysis

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4.3 BREXIT - View on future

This capstone business project also examines the views of the companies on
Brexit’s impact on the future. This is done by assessing their concerns towards
the future, followed by the companies’ view on attractiveness of the UK market.

4.3.1 Concerns of future Brexit implications

For company A the main concerns towards the future are remaining compliant
with both UK and European regulations, which could start deviating more over
time. A direct concern linked to this; are the legal risks the company needs to
continue monitoring. The company also continuously asks following quoted
questions: “What if those equivalence statements are no longer extended?
What if the UK is really seen as a third country? Is it still opportune to stay
there for ‘CAF’?”

Company C has the same concern regarding the deviation in regulations. “We
now see they are moving away a little bit from the European regulations, so
we will expect some changes, for a group like us some risk models will have
to be redone for the UK market. This is a non neglectable cost.” The Chairman
also states the following: “The political situation again is a little bit unstable with
the exit of Boris Johnson, so a lot will depend on the successors what the
attitude towards Europe will be.”

The concerns of company B are in line with the financial companies. The head
of compliance mentions that “uncertainty remained, also post Brexit.” Now the
regulatory regime in Great Britain broadly aligns with EU regulations however,
The TCA might not provide a mutual recognition of UK and EU pharmaceutical
regulations in a few years.

Company E expresses that same concern in more detail: “For our medicines,
the UK and Europe had a global view on approval process and on pricing and
indications.” The participant mentioned that right now everything is nicely
aligned, but future changes could complicate operations, so they remain
cautious.

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The fact that emission control in the EU is quite strict and “CDM” has adapted
their technology roadmaps to this, is a number one concern of Company D. If
regulations diverge between UK and EU, this implies the development of
different products for a single market. “On a global scale the UK is a relatively
small market, so this increases our costs for a very small benefit.” (CDM)

4.3.2 Attractiveness of UK market

Company A is clear about the fact that the UK has never been their main
market. They do admit it is an important market for flanking, hedging and
clearing operations. “London remains a global financial center and therefore it
is important to have the necessary presence there as well.” “The UK will remain
important for us, certainly as long as it is not made impossible to carry out
financial operations there.” (CAF)

“The UK market has always been a very volatile market; in Belgium we can
better predict what the profits will be. This is because of the fact that it is a very
competitive market, not always rational.” (CCF) However, Company C needs
the UK market for their diversification, which is very important in their line of
business.

Company B expressed that they saw the UK as an attractive market prior to

Brexit and still do. The attractiveness for the company in the UK market is the
research knowledge, universities and capabilities that we benefit from being in
the UK. Company B will not disengage any activities in the UK due to Brexit,
on the contrary the company is investing in the UK. “We have announced at
the end of last year, that we are opening a new research site. We will be
moving there in 2023.” (CBP)

Company E is also firm in their answer: “Yes, the British market remains
attractive for us, because we have products that are very important to this
market. So, because of Brexit we would still not transfer our activity, because
our activity is country specific.” (CEP)

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The fact that company D supplies to an automotive industry and clean mobility
is trending in the UK adds value to the attractiveness of the market. “‘CMD’ will
continue to pursue all the business prospects in the UK. Since we do not have
any business operations within the UK now, we will preserve this for only the
EU, also in the future. With the current agreement in place there is no need to
invest in production in the UK for the UK market. We can still serve them.”
(CDM)

4.4 Discussion of results

When Brexit was announced the first key concerns were all related directly to
the uncertainty of change in regulations and documentations, trade, increasing
prices, business continuity and collaborations. For the financial companies this
was more related to the extension of equivalent statements and changing
solvency routines. For the pharmaceutical companies there were worries
about deviating regulations on medicines and pricings. The materials company
was also focused on regulations on emission control, impact of new taxation
regulations and the difficulties on future collaboration with UK academic
institutions.

The results suggest that these concerns were managed differently per
company. Where one does contingency planning without setting up a local
taskforce, the other company tries to tackle the problems locally with a UK
taskforce. Out of five companies, four of them had set up a taskforce. The
results indicate that the financial companies were quickly assured due to the
cooperation with European and local UK finance regulators. It can be
concluded that policy makers do play an important rule in mitigating uncertainty
(Kupelian, 2017). It is also important to stretch that Company A does not
perform big operations in the UK, Company C however does, but has a local
entity in the UK, which is quick in adapting to the new market. This of course
had an impact on their first strategies, which remained rather a wait and see
approach. The same can be implied about the pharmaceutical companies.
Company E also has local offices in the UK and a local taskforce, whereas
company B, does only have research centers in the UK. This suggests that

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Company E could oversee the situation more locally and have a wait and see
approach towards the future implications of Brexit. Company B did had to
proactively strategize by building stock and actively sharing information
through multidisciplinary teams and the taskforce. For company D, which also
does not have offices in the UK, the situation appears the same. The UK is an
important market for them, which they need to supply (in time). The company
needed resources to accustom all the automatization systems to the new
regulations and strategized through a global taskforce. For these two
companies there was also a bigger financial impact. Overall, it can be implied
that the financial impacts stayed relatively low for all the interviewed
companies. There is also an occurring answer of the participants, the fact that
they are global companies and focused on different markets, which means
now they must adapt to ‘one extra market’, which does not weigh heavily on
their overall global financial situation. Brown et al. (2020) stated the importance
of financial and personnel resources to manage uncertainty and/or to enter
new markets. Its importance is inline with the findings form the interviews.

All companies agree on the fact that COVID-19 makes it a little harder to
distinguish the affects from one another. This statement is inline with previous
research on the stock market by De Lyon & Dhingra, (2021) and on collapse
of trade due to blockades and new border rules (Milliken & Schomberg, 2021).
This might also imply that the actual financial scale impacts are not completely
accurate. However, this research only focusses on the participant’s view on
the impact and not on concrete financial numbers.

The results suggest that for the financial companies, the TCA had negligible
impact. The pharmaceutical companies also saw little impact with the TCA, but
are worried for changes in a few years. Together with the Materials company,
it is clear that everything in terms of documentation or applying new rules is
very cumbersome. For now the impact of the TCA is aligned with the previous
research by Bisciari, who stated the importance of the TCA. The companies
did not experience a big impact, since “ The agreement is underpinned by
provisions ensuring a level playing field and respect for fundamental rights.

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(Fella, et al., 2020)” but it is clear that it is also a complex process to apply the
new agreement.

This conclusion is fairly the same for the overall impact on the BEL20
companies’ operations. None of the interviewed companies were heavily
impacted by Brexit. Operations sometimes went a little slower, had to be
adapted, documentation had to change and new rules had to be applied.
However, looking at the strategies they implemented, the companies that
needed more preparation were prepared to the greatest extend, companies
that relied on the TCA or equivalent statements, are adapting a wait and see
approach. The results also imply that the companies are all very agile and
prepared, even for uncertain events. It is concluded more then once in the
interviews, that being global has lots of perks. More resources, more
experiences on different markets and diversification. Global companies like
these have a higher resilience against unexpected shocks (Brown, et al., 2020;
Laufs & Schwens, 2014; Doshi, et al., 2018). Their high resilience is of
foremost importance towards the future. Since there are still lots of concerns
for post Brexit implications. All companies agreed on the continuous
uncertainty regarding the regulations.

The UK also did not lose attractiveness in the eyes of the interviewed BEL20
Companies. Yes, uncertainty remains and concerns are still present, but today
the benefits of being in the UK outweigh the impacts/risks. Predictions
published by Yung in 2016 showed a significantly diminished role for London
as the world's leading financial center (Yung, 2016). The results about the
financial companies, active in London, indicate that it remains a global financial
center, important for financial companies to stay active on. This outcome is
supported with recent evidence on the ‘GFCI31’ on global financial centers. It
proves London is still second as global financial center, right after New York
(Foy, 2022). The results show the UK is aslo an important innovative market,
for both the material as the pharmaceutical companies.

To end the discussion of these results, it is important to also state that all
interviews were professionally and successfully completed. In the case of

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arising problems, due to lack of internet connections or last-minute changes,
issues were swiftly taken care of and did not affect the quality of the research.
Same counts for any misinterpretations or incomplete answers. The numerous
interview questions ensured complete answers to the research questions,
which are all stated and answered above. The interviews provided this
research with the appropriate data, to analyze, discuss, conclude and
ultimately learn form.

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5 Conclusions and recommendations

This research started with Bisciari forecasting some of Brexit’s impacts on a

wide economic scale in 2019 before signing the TCA. GDP losses for Belgium
varied widely between individual studies. GDP attempts to measure all the
activity of companies, governments, and individuals within a country (Bisciari,
2019). This past research provided broad implications on how it could affect
the Belgian market, and thus also the BEL20 companies. However, it did not
provide information, where organisations could practically benefit from. The
research problem was identified due to a lack of recent evidence on how
businesses cope with Brexit, how they react, which elements of their
organisation are impacted and what the general perspectives on their UK
activity are. This gives organisations in Belgium, but also the rest of the world
practical input on how the biggest Belgian companies respond to unforeseen
shocks. In times like these, were uncertainty is becoming the new normal, it
becomes increasingly important for organisations to be prepared for sudden
shocks (Gorynia, et al., 2021; Brown, et al., 2020).

The research problem, led to the identification of the objectives and were
pursued as described below.

- The literature review provided the exploration of the concepts of ‘Brexit’,

the ‘European Union’ and the ‘BEL20’.
- Due to a lack of practical implications of Brexit, the literature review
explored theories about uncertainty and the impacts on businesses. This
objective was then examined for Brexit, through data collection and
analysis on BEL20 constituents.
- The third objective was the understanding of the financial and operational
impact.
- The fourth objective examined the companies’ view on the relationship of
COVID-19 and Brexit.
- The last objective was to explore the future threats and opportunities Brexit
will hold for the BEL20 listed companies.

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Student-ID: 4032012
The research was able to achieve the objectives, to provide an answer to:
“What is the impact of Brexit on the constituents of the benchmark stock market
index of Euronext Brussels ‘BEL20’?”

The period from 2020 till 2022 was very turbulent for companies. All the results
show that Brexit was overshadowed by the wallop of COVID-19 on the BEL-
20 companies, this corresponds with the literature review (Smith, 2021). Camp
& Lesort (2019) stated previously that when facing uncertainty, a business
needs to figure out, interpret and analyse as many signs as possible to
understand the changing environment, in order to react adequately. It can be
concluded that since Brexit was announced in 2016, followed by a transition
period in 2020 which ended later that year, these companies were well
prepared and reacted adequately. Combined with their experience in different
markets worldwide, their available resources and early on extensions of
regulations, these can be seen as the main reasons of why Brexit’s impact on
BEL20 constituents was limited. Nonetheless they were affected in terms of
extra administration, changes in regulations, less participation with university
programs and additional personnel and money needed to ensure a smooth
transitioning to ‘the new market.’ Post Brexit uncertainty also remains an
important topic for BEL20 companies, this shows that the story of Brexit and
its impact continues. This could imply different answers to the research
questions that were solved in this research of 2022. It is therefore
recommended to do continuous assessments on the implications of Brexit. It
holds opportunities in identifying new problems, but also strategies that helps
global and local companies tackle the issues in the aftermath of Brexit. The
literature and the results show the importance of the availability of resources
and knowledge of global activity, therefore more research on SME’s could be
helpful, who often tend to struggle more with uncertainty and thus also with
Brexit (Brown, et al., 2020).

By interviewing these top-level managers, I personally gained a lot of insight

on how the most important Belgian companies manage macroeconomic
events and uncertainty. This could be extremely helpful knowledge in my future

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Student-ID: 4032012
business career, since it made me understand the importance of identifying
key concerns and strategizing early on. It also provided insight in the key role
of policy makers and local regulatory services, to ease uncertainty. The
resilience of BEL20 companies is very high and I am glad I had a chance to
personally interview some of the most important key members of these
companies. Using interviews as an instrument led me to identify new
limitations. The sample of five companies out of twenty BEL20 companies, do
not cover all different sectors. The three sectors of the sample are always
mentioned in the results chapter, to avoid misinterpretations. I was very
depending on the participant’s (changing) time schedule, some answers were
too brief and internet connection problems occurred. Thematic coding and
transcribing myself was also very time consuming. However, I learned to
manage my time efficiently, developed my problem solving and organisation
skills. My research question ultimately required a personal approach. I am very
happy with the results of this project. I achieved answers to a topic I am
extremely interested in, developed research, critical thinking, communication
and business skills, along with growing my professional network.

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6 References

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 7 Appendices:

Appendix 1: (Document of interview questions used and send to

participants)

The impact of Brexit on

the BEL-20 constituents
MSC INTERNATIONAL BUSINESS MANAGEMENT WITH FINANCE

2021-2022

Research by Stephanie Dewit

Student number:4032012

Interview Questions

BACKGROUND
1. What is your function within the company?

2. What sector is this company active in and what are the main
operations of the company?

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Student-ID: 4032012
 3. Which countries / regions is this company active in?

4. Is/was the company active and/or depending on trade in and out of the
UK?

BREXIT- after the referendum

5. What were the key concerns of Brexit for your company and the
industry?

6. How did the company manage the uncertainty (deal/no deal and the
transition period) of Brexit?

7. Were certain strategies/ decisions made to tackle current/future

issues?

BREXIT - after the transitioning period and TCA

8. What is the company’s view on the TCA? How did this effect the
business?

9. How has Brexit impacted the (general) operations of the company and
your work?

10. How would you describe the period before and after Brexit? (While
linking it with changes, challenges, events… happening during this
period)

11. How would you briefly describe the company’s experience (after TCA)
with the UK on:

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 - Contracts, jurisdiction and disputes
- Trade (goods tariffs, (transport) regulations, custom procedures)
- Employment
- Business travel
- Investments & M&A
- Data protection
- Other implications?

12. What are the biggest differences between operations of the company
with the European internal market and with the UK?

13. What were the biggest problems that occurred for the company’s
operations during the beginning of Brexit and now that Brexit is in full
effect?

14. What strategies did the company undertake or will undertake in the
future to tackle these issues?

15. How do you think other companies (part of the BEL 20 Constituents)
are affected?

16. Are there any reasonable changes on the financial level of the
company that are related to Brexit?

- Would you classify these impacts as VERY HIGH | HIGH |

MODERATE | LOW | VERY LOW |?
- What is the cause of these financial changes?
- Did you experience difficulties distinguishing the financial effects
between COVID-19 and Brexit (considering both events occurred
at the same time)?

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 17. Would you say the British market remains an attractive destination for
your company and industry? Why?

- Would you consider transferring your international activity to other

regions instead of the UK because of Brexit?

18. What is the company’s outlook for Brexit in the future, are more
changes being anticipated, any concerns towards the future and why?

19. What future opportunities for the company and other BEL20
constituents in the aftermath of Brexit can you picture?

20. What is your main viewpoint on how Brexit effected your company and
other EU based companies?

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Appendix 2: Interview CAF

The first questions, are not shown in this transcription as it would give to much
information about the company’s identity. This specific Company shared
confidential information that could not be published. The following part on
Brexit related questions of this transcription were authorized to use in the
capstone project.

BREXIT Announcement until end transitioning period

Interviewer: We will start with the period of the announcement of Brexit, after
the referendum. This period is until the end of the transitioning period. What
were the key concerns of Brexit for your company?

Company A: An important first question for us was: Is our Business continuity

assured. The UK is not our main market, but remains an important additional
market, so in that aspect it had to be checked from the start.

Interviewer: Ok, thank you, my next question is: How did the company
manage the uncertainty in that period since no one had an idea of the extend
of Brexit such as deal/no deal and the transition period?

Company A: Like any other company, we experienced lots of uncertainty, will

it be a hard Brexit or gradually implemented, will we experience lots of impact
of it on short or long term and so on. For a company like ‘Company A’ this are
important matters.
But important for us was from the beginning, specially since London is such
important center for financial activity and since Brexit was in first place more
about immigration and goods and trade etc. Company A was not directly
addressed in the matter. This also since the financial regulators were really
fast with coming together both on European side, with the European
commission as on the UK side with the FSA. They met to make certain
transitional regulations independent of the progress of those negotiations.
There were actually extensions of existing equivalence statements from the
regulations, these allowed quite a number of financial operations to continue

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Student-ID: 4032012
as before. In the very short term, those risks of business continuity were
bridged very quickly in the short term. This was a great reassurance.

Interviewer: Okay I see, could you elaborate a bit more on those statements
you just mentioned?

Company A: These were equivalence statements (renewed year after year),

mainly by the European Commission who said that London is a very important
center for all things clearing and derivative trading etc. So the question was for
the European financial sector, can we do those operations that we do in
London in clearing terms, can we still consider it legitimate and according to
European regulations yes or no? The UK threatened to become a third country,
so can we continue to negotiate with a third country and trade in financial terms
as we have done that with them as an EU member state. These equivalence
statements from the member states gave year after year the possibilities to
continue to do this, which is very reassuring.

Interviewer: Those statements definitely seemed to be a reassurance for the

company yes. Were certain strategies / decisions then made to tackle
current/future issues in this time period?

Company A: ‘Company A’ performed contingency planning very quickly. But

given that a signal came relatively quickly from those equivalence statements,
there has not necessarily been an immediate need to completely change
strategy overnight, also because London is a HUB for us, we have a branch,
this one is important, so we do have to make some adjustments, but it's not
like we suddenly had a lot of investments to do or this was our main export
channel of our financial services. This was not really the case for our company.
Rather, they were kind of facilitative activities that we have there, so as long
as our facilitative activities in London could continue undisturbed, it was
important to do a bit of contingency planning before implementing very
concrete actions and new strategies.

BREXIT - after the transitioning period and TCA

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Student-ID: 4032012
Interviewer: We now move on to the period after the transition period, i.e.
when Brexit went into full effect. This is also when the Trade and cooperation
agreement was announced. What was your take on the TCA and how has it
affected your business?

Company A: think the TCA has changed very little concretely for 'CAF'. As
long as we don't trade goods ourselves, this means little to us and as long as
the equivalence statements are extended, we just focus on contingency plans.

Interviewer: Ok clear, so few substantive changes also in terms of impact on

your business operations?

Company A: We expected a greater impact. Example, hypothetically what are

we going to do with our clearing operations, What are we going to do, transfer
them to Amsterdam or Paris, What are we going to do with these cases if there
are problems. changes yet, so these strategies are not necessary. Our
customers also had enough transition time to adapt to this new situation. Brexit
was not a big bang for us, rather a gradual process.

Interviewer: Can give you a brief description of the period before and after
Brexit, with a link to changes, obstacles and events in this period. This gives
me a better idea of the overall impact.

Company A: Everything becomes a lot more complicated, you go from your

own market to two completely different economies, in which the regulatory
drive can be completely different and the countries are diverging rather than
converging and that makes it rather difficult, if you have to ensure that you
remain compliant with the rules in Europe, but also those of the UK. You have
to take into account different regulations in the UK, which could cause
problems. If we look in the long run and rules start to deviate more and more,
there is a major legal risk that we have to monitor.

Interviewer: Can you also briefly describe what the company's experience is
with the following elements, after the announcement of the TCA and it’s impact.
So impact on contracts, trade, personnel, investments, data protection, etc.

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Student-ID: 4032012
Company A: That London branch is so small for us, I'd say the impact we can
assess is actually low and moderate. For us from a macroeconomic
perspective, this is small beer compared to what came next. The period before
and after Brexit is the period before and after Covid. So if we look at what those
Brexit operations have brought, in terms of trade flows and problems, we might
be talking about a macroeconomic half percent impact in Belgium when it
comes to COVID, 14 percent on a quarterly basis. These are the shocks that
actually really bothered us. Brexit was then a kind of an additional shock.
Because we are very diversified and so our core market is not in the UK, this
is less important to us. I think there is actually relatively low impact on all those
things that you said to us.

Interviewer: Then if you look at the European market now, compared to the
UK market, what are the biggest differences you notice now?

Company A: It is more difficult to help our European customers in their

transactions with the UK, because a single market is simpler than different
markets. You have to make sure that you are in order with different legislations
instead of one. If you have to help someone and have to think about GDPR
within different markets, for example, that is time-consuming. The new
regulations make everything difficult, but okay for us personally it's not that
bad. We are now mainly looking at the UK as a third country, where it is
probably no longer very interesting to make long-term investments, I can well
imagine that it is less interesting for general companies to make long-term
investments there now and to see the market as a home market.

Interviewer: Can you list some of the key issues associated with Brexit during
this period?

Company A: You have to deal with trade barriers, political disputes, different
regulations, with differences in perception. For any company of the BEL 20 I
can imagine that Greenfield investments in those kinds of countries, in order
to set up a business there that is less attractive. Investment charts in the UK

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Student-ID: 4032012
also showed a strong decline. We haven't really done a recent M&A there
either. We are there for our flanking operations, but that's it now.

Interviewer: Have you chosen certain strategies to deal with these problems
or future issues?

Company A: The problems will certainly be addressed. We mainly look to the

future: What if those equivalence statements are no longer extended? Are
regulations drifting far apart? What if the UK is really seen as a 3rd country. Is
it still opportune to stay there for CAF? Is it better to stay within the European
market instead of the UK? Do we still want Financial operations on the
mainland with one FIXED regulation? We deal with these questions in terms
of strategy.

Interviewer: Do you have an idea how other BEL 20 companies deal with this?

Company A: BEL20 companies that trade more goods have the greatest
impact

Interviewer: okay, and ow has Brexit impacted you on a financial level?

Company A: The direct impact of Brexit is difficult to estimate because our

business continuity is not disrupted. But there have been some additional
financial costs, to calculate risks, additional resources to research strategies,
etc.

Interviewer: Was it difficult to distinguish the financial impact of Brexit with

Covid-19, as this was announced around the same period, and how?

Company A: COVID has overshadowed everything and certainly on the PNL.

That overlapping period of Brexit and Covid makes it very difficult to distinguish
one from the other. The companies that trade with the UK here are often also
present on the international markets, then everything collapsed and everything
is only now trying to recover, this makes everything difficult to distinguish one
from the other.

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Student-ID: 4032012
Interviewer: Would you classify these impacts as : VERY HIGH | HIGH |
MODERATE | LOW | VERY LOW |?

Company A: Brexit low and moderate impact on an operational level, and on

a financial level the PNL certainly doesn't count Brexit among the things that
cost us profit, so rather LOW.

One of the major risks or fears that people had is that the entire London
financial sector would move to, for example, Amsterdam, Paris or Frankfurt
and that there would actually be a huge competition around European
finances. But that is something that has certainly not been seen at the moment,
there has been a bit of movement, but due to the fact that the financial market
is still artificially kept alive, this is not so bad.

Covid and Russia, energy crisis, inflation, all come to the fore, but Brexit is not
seen as a major threat to the world economy or Belgian economy, rather it is
considered an additional risk. Our macroeconomic analysis showed the
urgency of covid and energy crisis, the impact of Brexit driven too the
background. Brexit is only the exit of one company in the EU, Covid affected
our entire global economy.

Interviewer: Do you still see the UK as an attractive market, or would you just
avoid this market more?

Company A: The UK has never been our main market, we will never outrun
it, but it is not one of the markets we target. We do not want to develop all our
activities and developments there. An important market for flanking operations,
hedging and clearing operations. So London remains a global financial center
and therefore it is important to have the necessary presence there as well. You
cannot afford not to be present in a global financial center. Even if it is to help
your customers who are present in this market. The UK will remain important
for us, certainly as long as it is not made impossible to carry out financial
operations there.

Interviewer: What is your view on the future, looking at Brexit?

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Student-ID: 4032012
Company A: The UK will become more and more an isolated market.

Interviewer: What is your general view now 2 years after the UK leaving the
EU?

Company A: It is the first time that a country has opted to exit the EU and
triggered Article 50. Politically, this is a very important event and opens the
possibility too other countries to decide to leave. So maybe indirectly it caused
a bit of macroeconomic volatility in the market, The Grexit, Italianexit… it could
cause some uncertainty in the future. For 'CAF' the shocks are relatively minor
if we look at the overall impact of Brexit.

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Student-ID: 4032012
Appendix 3: Interview CBP

Interviewer: What sector is this company active in and what are the main
operations of the company?

Company B: ‘Company B’ is a pharmaceutical company, active in the

pharmacy sector.

Interviewer: and which countries / regions is this company active in?

Company B: Our main operations are in Belgium, in the UK and the US. The
US Is our biggest market, The UK is where the majority of our research is,
together with Belgium. We also have production facilities in Japan and In
China.

Interviewer: Is/was the company active and/or depending on trade in and out
of the UK?

Company B: There is a lot of movement from the company within the UK and
France and The UK and Belgium.

BREXIT Announcement until end transitioning period

Interviewer: First we will discuss the period after the referendum, so when the
announcement of Brexit happened, till the end of the transitioning period. So
since you have a strong link with the UK, What were the first key concerns of
Brexit for your company?

Company B: First reactions there were what about all those uncertainties, lots
of questions asked on the extent of the impact. What was immediately done
was putting together a task force. I joined the company in 2017 and became
one of the Prominent members of that taskforce in 2017 , with representation
from public affaires, regulatory, trade compliance, legal, supply chain, talent,
human resources (very important) and the first thing on our agenda was people
are important. What we did when Brexit was announced, was getting together
and actually listing all the questions and domains of the potential impacts that

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Student-ID: 4032012
we could further discuss, with our peers and external advisor insights of what
was available at the time so we could make it clear what had to be done.

Interviewer: You already made some of my next question clear, but maybe
you can elaborate it a little bit more. How did the company manage the
uncertainty (deal/no deal and the transition period) of Brexit?

Company B: so, we managed by composing a taskforce and other platforms

with peers. Insights via external advisor was something they invested in.
Association of pharma companies. EFBIA. They have a customs subgroup,
European federation of pharma associations. They have different sub groups,
to share experiences with other pharma companies. Then they group opinions
and questions and they lobby with different authorities and European
Commission to make sure the pharma voice is heard.

Interviewer: Great, and were certain strategies/ decisions made to tackle

current/future issues?

Company B: Tons of decisions were made, but some of the things that we did
was, we used to supply the UK and Ireland as One. Medicines, they always
need to have leaflet right with an instruction on how to take the drug. For
Ireland and the UK it is in the same language, so it was one product that we
had going to the UK and to Ireland. But we had to separate this again. And we
also separate the supply, so rather then shipping for example from Belgium to
the UK then to Ireland, we are now shipping to the UK and now separately to
the republic of Ireland. These decisions of transitioning were stargazed pretty
early on.

Another thing that we did is building stock, to the greatest extent possible,
because of the unknown. We didn’t know how long those queues were going
to be at the boarder or how difficult it was going to be to perform an import
declaration etc. So we build stock to the extent possible. There were a lot of
orders placed and medicines bought prior to Brexit, to make sure that we could
supply. This is our aim, making sure we can continue to supply our patients.

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Student-ID: 4032012
This is what is always in the back of our mind. This is a way we handled the
uncertainty.

BREXIT - after the transitioning period and TCA

Interviewer: Let’s go then to the time after the transitioning period, This is
when the Trade and cooperation agreement was announced as well. What
was the company’s view on the TCA and how has this agreement affected/
impacted the business?

Company B: Very little affect on our business. The TCA doesn’t make a big
difference for us today, because we are a pharma company, our finished
medicines that we supply to our markets are free of duty. Every country is of
course happy to import medicine, because it if for their inhabitants to help
them, so from that point of view there were little benefits for us if we compare
to the time before the TCA. Are clinical studies are with finished drugs so as
well free of duty, so little impact.

We also have a large research component in the UK as I mentioned. The

difficulty with those research components is, we discover new components and
then they need to be send back and forth. We also want to minimize the impact
on our research cycles. So the compounds are being send back and forth,
researched in Belgium, back to the UK for next tests and again. The longer the
shipment takes, the longer our research cycles are and this makes an impact
on our development timeline. Lead time was more important then cost here,
so some of those compounds are dutiable products, but it is hard to take time
to review the rules of origin that are applicable to make calculations to see to
are savings could be to potentially benefit from the TCA. There is one theme
that we are today working with and have put that in practice. Where we are
applying the TCA and are avoiding some of those costs. But other then that
we are not benefiting that much from the TCA.

Interviewer: knowing now that these issues are there, would you transfer
business activity out of the UK?

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Company B: In our overall business that we conduct, we haven’t made any
decisions to disengage from some activities in the UK. To the contrary. We
have that research entity there, we have a lot of talent in the UK, strong
collaborations with Universities and we are actually continuing to invest. We
have announced at the end of last year, that we are opening a new research
site. We will be moving there in 2023. We are actually investing and not the
opposite at all.

Interviewer: How would you describe the period before and after Brexit?

Company B: We were prepared to the extend possible, we build stock, we

made sure all the teams that could be impacted where informed, knew where
to go to retreat information, there was no customs border first and now there
is, so everyone needed access to additional information for requirements. We
made sure that we registered everything, we were in close contact with our
HMRC direct contact person. An assigned contact person who kept us
informed on upcoming changes.

If you ask me before Brexit and the months after Brexit, Yes there was the day
that Brexit happened and after custom declarations were needed, but
uncertainty remained, also post Brexit. Given the gradual implementation by
the UK of checks at the border and additional documentation required, we are
still learning and finding out, what needs to be provided as of which date and
especially with cases being postponed. We definitely did not experience it as
a big bang , that couldn’t be solved. We have prepared it for years, so we also
didn’t experience it as such a sudden event. It is actually also because, ‘CBP’
was very prepared and had strategized the issues and uncertainty, that we
were less hurt. We had a global taskforce on company level and then per
different area we had other taskforces, we made sure that in our teams we
stayed connected, with our peers, … It was really a big topic in the company
and active sharing on information of potential areas of concerns, so if I would
read something, I would bring it to the taskforce and would ask a colleague
hey have you seen this and should we dive into this further together? Yes or
no? We were well prepared for sure.

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Interviewer: How would you briefly describe the company’s experience (after
TCA) with the UK on: Contracts, jurisdiction and disputes Trade of goods,
tariffs, transport regulations, custom procedures Employment, Business travel,
Investments, M&A, Data protection, Other implications?

Company B: Of course all the documents had to be revised, form a people

point of view it became more difficult right for EU nationals to travel to the UK
because of the separations, this raised some concerns: are people going to
leave the Uk because of that? We were measuring the percentage of leavers
In 2018 we had a bit more then the average end this was following the
announcement of Brexit, following the uncertainty. This raised Questions for
people , what is my situation going to be post Brexit if I am an EU national.
This happened more before Brexit. Now we are even investing more.

To us looking back now, it definitely not negatively impacted ‘CBP’, Brexit.

From a strategizing perspective it didn’t change our approach, indeed we are
opening a new site, we continue to invest in the UK. There are no pre or post
Brexit concerns on should we take action as in moving activities elsewhere.

Interviewer: What other strategies did the company undertake or will

undertake in the future to tackle these issues?

Company B: We just had to work with external support and additional people
hiring to read through contracts and work efficiently. Putting in place that
taskforce with cross functions for the entire company was pretty impressive. I
never worked before with such a variety of people and for such a long period
of time, this has really paid off.

Interviewer: Could you now elaborate a little bit more on the financial impact?

Company B: There was a financial impact on people and there was a financial
impact in terms of transactions to get the product to the market. The fact that
we build stock, costed money of course. We had to cross the border with
additional paperwork, we had to pay service providers to get this done. There
was without a doubt a financial impact, but we did our best to calculate and

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anticipate beforehand, so this would be taken in account in our budget
exercises.

Interviewer: Could you put a scale on the impact: let’s say: VERY HIGH |
HIGH | MODERATE | LOW | VERY LOW |?

Company B: Overall I think it will be a low to moderate financial impact.

Interviewer: Was it difficult or is it still to distinguish the financial effects

between COVID-19 and Brexit, since both events occurred at the same time?

Company B: It certainly was, I am positive that COVID 19 led to more

disruption, then Brexit. Maybe also because we didn’t have as long to prepare
for it, because no one anticipated it at all. So Covid led to a lot a lot of people
falling sick, costs rising, transportations rising. This made it also more difficult
to measure some effects of Brexit. But overall Covid impacted our business a
lot more, because of the fact that we couldn’t anticipate the impact.

Interviewer: So this overshadowed Brexit?

Company B: For sure, definitely agreed that COVID 19 overshadowed the

effects of Brexit.

Interviewer: okay and knowing all of this, do you still consider the UK an
attractive market?

Company B: This stayed the same for us, it has been an attractive market
prior to Brexit and it still is. Mainly because of the research knowledge in the
UK, capabilities that we benefit from being in The UK and staying there.

Interviewer: So you are not considering moving activities away from the UK?

Company B: Because of the knowledge that is in the UK and all those

universities and research institutes, no we are certainly not considering moving
away from the UK because the arguments are not strong enough to do so.

Interviewer: Do you see opportunities, related to Brexit?

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Company B: Because of Brexit? My conclusion is that trade with the UK and
doing business with them is still very much possible. And that I think is the
main takeaway for us as a company. Has the UK become more attractive no I
don’t think so. Has it been less attractive? Not really for us.

Interviewer: For the final question, I would like to ask you to give a global
conclusion on how Brexit as impacted the company over the years, you can
add any relevant information you want.

Company B: For ‘CBP’, since we were prepared in such a good way, we have
not suffered that much from Brexit. I think that for us as a company as I said,
it has not been influencing our strategy to a far reaching extent. For other
companies in general I can understand it has. but because we are a global
company, we are used to cross border movement and sending ship materials
cross border, if you do not have this experience and especially with the
different implementations, I can understand that it is very challenging and that
this will make the UK less attractive. But for sure it remains possible to even
do business within the UK and with them. We are very happy with the path we
have chosen there.

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Appendix 4: Interview CCF

Interviewer: What sector is this company active in and what are the main
operations of the company and which countries / regions is this company active
in and are you specifically active in the UK?

Company C: We are active in 14 countries, 9 in Asia and 5 in Europe. The

one in the UK is only offering non life insurance, cars and home insurances,
somewhere in the private market. We distribute through brokers comparative
site (people looking online for car and motor insurance who choses based on
price and the best offer)

BREXIT Announcement until end transitioning period

Interviewer: Now we will discuss Brexit on the period after the referendum, so
when the announcement of Brexit happened, till the end of the transitioning
period. Because you do business directly in the UK, What were the key
concerns of Brexit for your company?

Company C: Main concerns, was fear for the European regulations around
solvency routine (fixing the capital requirements for insurance companies)
which was homogenized for whole Europe, That UK might change the rules,
which means that all the work we did to make that coherent in our group, would
have to be redone. Until now it did not have that impact because of equivalence
statements. Today the UK operations, have a separate legal entity, own way
of pricing and business management. We do not see direct impacts of Brexit
on our operations. In the total picture of Company C, the contribution of the UK
is only 6-7% of operations this means it is not a matter of survival.

Interviewer: Okay that Is clear, and how did the company manage the
uncertainty (deal/no deal and the transition period) of Brexit?

Company C: I wanted to add that I think Customs and import, export

operations of companies were impacted more. The only impact we had got is
that uncertainty had an impact on the relative value of the pound against the

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Euro, that due to uncertainty in the market and (maybe more now) consumers
have been behaving a bit differently, which definitely has an impact on
insurances. But still other goods companies that do transport are much more
impacted. For them the uncertainty and the decisions on Brexit have been
extremely impactful, they had to rethink there whole value chain, which is
something we didn’t have to do.

Interviewer: Yes, understandable. But for ‘company C’ were certain

strategies/ decisions made to tackle current/future issues related to Brexit?

Company C: A number of financial institutions that had there headquarters in

the UK, due to the Brexit they had to put up a new hub within the EU ex Lloyds
in Brussels) For us we believe that the best way to handle is that we have in
each country where we operate to have a legal entity and local management
so from that perspective we didn’t have to change our structure, our team their
will manage changes in the future.

The bank sector after Brexit (Belgium banks) BNP and Ing, they closed there
business in the UK for individual and SME’s. If you are a Belgian small
company or startup, starting in the UK, you will not be able to get a banking
account in the UK Because of the complexity to open an account after Brexit

Interviewer: That is not the case for your clients then?

Company C: Indeed no, Belgian customers for us if they want to get insured,
they can just contact ‘Company C’ in the UK. Overall in our case we had no
real direct impact from Brexit. It is a bit strange for me that other financial
institutions had a huge impact. In every country we have not created central
activities in Belgium; the only thing we have central is finance and risk
departments, overall risks of the group, corporate communications, basically
all the activities that are more related to being a group are concentrated in
brussels. Everything else that is related with the customers is always local.

BREXIT - after the transitioning period and TCA

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Interviewer: Let’s go then to after the transitioning period, with the agreement
of trade and cooperation. What was the company’s view on the TCA and how
has this agreement impacted the business?

Company C: TCA didn’t make a big impact, the impact of Covid was much
higher then impact of Brexit. These two are not fully disconnected. Brexit has
created for the British population problems of scarcity.

Interviewer: And how has Brexit impacted the (general) operations of the
company and your work, now after Brexit went into full affect?

Company C: Every country has its supervisory authorities, the FCA, the
national bank, the risk and regulatory authorities. Before they were working in
European context, we know see they are moving away a little bit from the
European regulations, so we will expect some changes, For a group like us
some risk models will have to be redone for the UK market. This is a non
neglectable cost. High quality people have to work it out. It is more a diversion
from European rules, where the British regulators will make our lives a little bit
more complex. The real basics will not change but some calibration. If you
have one accounting system that you can imply on a whole market or you have
to diverse per country this asks a lot more IT resources. For us this is okay
because we have an international company. For an only European player you
suddenly move from one system to two systems.

Interviewer: Can you give a description of the period before and after Brexit?

Company C: The biggest impact in the beginning was on the mental front. You
had discussions on how possible Brexit was. It was talked about with board
members. It created an uncomfortable situation in the UK between colleagues.
For some companies it is a complete shift and a lot of extra effort. Some turn
the threats into an opportunity (automatization of the customs process) they
can offer services that a smaller offer can not offer and increased there market
share (but ads financial investments, stress).

Interviewer: Can you give more information on the taskforce, is it still in place?

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Company C: We had a taskforce, due to our structure we had it in the UK
operations, with some people of the corporate center involved to be sure that
we had all the information. We have a very decentralized team, with top
managers from other countries part of that team, now the members of the
taskforce can be reduced.
Interviewer: How would you briefly describe the company’s experience (after
TCA) with the UK on jurisdictions and contracts?

Company C: Lots of contracts had to be reviewed, it was a tick the boxes

exercise. Contracts we have with the UK providers of robotics and AI, had to
be reviewed, will they still align with the regulations of UK and Europe, was a
big question? But for us as a group the transition went rather smooth, we didn’t
suffer but also did not receive opportunities.

Interviewer: Are there any reasonable changes on the financial level of the
company that are related to Brexit?

Company C: We always work with the currency of the country or of the

European Union. If we look at the result in the UK it gets transformed to our
global report in Euro. Depending on relation between pound and euro we
sometimes have a gain or loss, but as the UK is only 5 to 7 precent of the
result, it is small. On the investments we make ( we collect millions on
premiums, not immediately paid out) then of course fixed income, bonds. In
corporate bonds of UK companies, impact now again (risk of recession) but I
can not remember if Brexit had a big impact, but now the impact will be bigger.
Bond and equity markets going down. From financial point of view Brexit did
not cause a huge impact on us, I would say LOW impact.

But all this kind of changes give you additional work (2400 people in UK +
maybe additional work for 10 people) , for us this is a small extra but a smaller
group would experience more costs.

Interviewer: did you actually see fluctuations on you share price?

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Company C: The local companies of our group are not listed, so we can’t see
all the variations. The share price of the group however was not impacted when
Brexit was announced, the market didn’t fear the impact . When Covid was
announced we dropped and are now recovering, the market saw Brexit not a
s a threat for us, when Covid came there were questions of deaths that would
cost a lot, long time in hospital → rising costs, for the insurance companies it
was okay because of the life insurances. Mostly older people died. Medical
cost was high but many other patients other then covid were postponed. Car
insurance less drivers so less accidents. In first place we are an insurance
company for private. The biggest impact was for business interruption and this
activity we didn’t have that much in portfolio. If you were more in to this portfolio
as a company you were impacted more.

BREXIT- View on future

Interviewer: Do you still see the UK as an attractive market for your business?

Company C: The UK market has always been a very volatile market, in

Belgium we can better predict what the profits will be. This is because of the
fact that it is a very competitive market, not always rational. Many of our
investor analysts push us sometimes to sell the UK market because it is too
unstable, in terms of results, we continue to say that we want to be there, first
of all because we have and need the diversification. For insurances, if you are
in different countries you can have diversification for fires in Portugal to floods
in different countries. The more diversified the more advantage you have in
need of capital. If we didn’t have the UK we needed more capital investment
to do our business. That alone is a very important reason for us to stay. The
competitiveness gives us more push for continuous innovation in this country
so it is an inspiration. We made the general statement that for us the major
importance is to be very vigilant in the UK to be sure that our expected of
profitability is realized, but we do not plan extra activities in m&A files, but this
last thing is not directly linked to Brexit.

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Interviewer: What about the future, do you see more troubles or threats
related to Brexit?

Company C: The political situation again is a little bit unstable with the exit of
Boris Johnson so it will depend a lot from successors what the attitude towards
Europe will be. If it is harder then Johnson then we believe the changes on
regulations will be more heavy then good for us. If it someone who tries to
reestablish the collaboration with Europe it will make our lives a bit easier.
What could impact us is a lot are the local regulators.

Interviewer: Can you picture any opportunities because of Brexit?

Company C: Consequences in the UK are that the import from Europe to the
UK is much heavier with custom facilities an troubles in transport. It
incentivizes a number of players to get out of the UK. Knowing that the UK is
company that lives from import. A company that is specializing in all this
formalities and digitizes them, they have good position to deliver new services.
Maybe companies might start to produce in the UK instead of solely depending
on trade there.

Interviewer: Okay that is clear, can you just now give me your general
conclusion on Brexit’s impact in this period on you company?

Company C: Very little impact, because we have almost like 10 regions in our
group. China with a specific political environment, Malaysia, Thailand, India
and they are 4 completely different, the smaller countries (in volume and
business) Philippines, Vietnam, Laos, Singapore. We are used to treat
different regimes and different dynamics. There is always one country in the
group where there are big issues. Now Turkey with inflation of almost 100
percent. And we can adapt in a change in a regime, also in the UK. It is know
instead of 10 , 11 different system, this is not a big issue going from 10 to 11.
For a number of companies Belgium is 6th or 7th trade partner of the UK. In
Flanders a lot of export goes to the UK so of course a number of companies

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really suffered and had to diversify to other countries. Although again if it is
about the food market. The UK they have to get it from somewhere. Brexit
brought some imbalance in the European system, Europe as a continent has
to not fall a sleep and not loose competition with China or other markets.

Interviewer: How does ‘CCF’ cope with sudden impacts and uncertainty?

Company C: We have since 2018 a very well established treatment of trend

scanning, as a group we follow 145 trend that could impact our business and
they are put together in 10 areas (future of work, customer behavior, mobility
changes, political, financial area) 25 people form all the countries where we
are, continuously provide information about these trends, we score these twice
year. We ask 2000 people withing group (diversified geo, gender, age, level
comp) 20 are rated with a score of estimated impact and the speed with which
this trend will be at the summit of its impact, these trends are scanned through
an artificial ap, where lots of trends are being checked on sources like SM,
news papers, website, the AI gives a position on impact and duration and then
we compare it. Sometimes very similar review (people + Ai) then we check if
they are covered in our business plans if the impact is reasonable , sometimes
AI says Alarm, and we don’t think so. Then we do a deeper review. Brexit was
not part of it and Covid was not into it because it was not calculated.

Company C: You have to be structured in such a way that the unsodden

situations can be quickly organized to cope with it. Trying to see what might
happen, but also look at if something happens you have to be able to
immediately create e acris committee and crisis communication committee.
We have this, we know what we have to do tomorrow if something might
happen, who we bring together, who will analyze and start to prepare
communication. There is a book about radical uncertainty that talks about this.
Bottom line the Ai tool screens a lot but does not know the ‘future’.

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Appendix 5: Interview CDM

Interviewer: What sector is this company active in and what are the main
operations of the company?

Company D: ‘CDM’ is a leading circular materials technology company, we

focus on recycling, electrification and clean air. These activities are global
activities, we do production, research and development in every region in the
world.

Interviewer: So then I assume the company is also active in the UK and

maybe also depending on trade in and out of the UK?

Company D: Yes we have a very specific relationship with the UK. The UK
has car manufacturing activities (assembling) as a result we are supplying
some products to the UK. We don’t have a manufacturing plant in the UK. Our
reactions with UK are on a trade level, we both sell and export to Europe ,
northern America and we buy things from the UK.

BREXIT Announcement until end transitioning period

Interviewer: So now we will discuss the time when the announcement of Brexit
happened, till the end of the transitioning period. You have an important
relationship with the UK; What were the key concerns of Brexit for your
company?

Company D: The first concerns were in term of increasing complexity for us.
And increasing risk, the fact that the UK was a member of the EU region and
union made the trade much easier and it would be very uncertain in terms of
what it would be for administration, custom regulation, cross border
transaction, task. Why important for us? We produce metal based products
and in most of the products that we make the price / cost of the product is
mainly the price of the metal , plus the conversion cost and profit margin. This
margin is really low, only like 1 or 2 precent on the total product,. You can
imagine if taxation is going to change it is always on the product price, this can

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either create a huge margin if positive, or wipe out the complete margin. This
makes or breaks a complete product towards the UK.

Secondly regulation. Our business is driven by regulation , emission control in

Eu is quite strict. This drives the technology roadmaps of the car makers and
also our own roadmaps. If this suddenly became different in the UK, we have
to create different technology roadmaps and also different products for a single
market. On a global scale the UK is a relatively small market, so this increases
our costs for a very small benefit. This has been our number one concern. But
so far this has not been the case. We know this can be a risk going forward.

Third element Is if you look at technological development, UK is a strong

contributor to innovation and tech development. Within the European context,
and EU research programs, they were always fully part of that. It was easy to
collaborate with universities and academic institutes un the UK. We already
see now as a result of Brexit, that there is almost no interaction with the Europe
programs. This is a quite negative development. This of course doesn’t mean
that these universities no longer want to work with you, but you miss the power
of the bigger consortium, where you can bring all the components together in
one funded program both academic and industry together and now that is a
big CON because you have to work only on bilateral basis or a 1 on1 basis
with an academic institute and then you have to focus on one specific element
of the components they have. So this can be considered as a pretty negative
development for us.

Interviewer: Thank you for the elaboration of the three most important
concerns of company D. So to tackle these (future) concerns, were certain
strategies/ decisions made?

Company D: It was just important to be prepared for the impact to happen.

But it is difficult to prepare for what you don’t know. You can never prepare for
everything. For us the most important thing was the practical preparation,
Because we need the in time delivery schedule, I led the truck leave today to
make sure tomorrow morning it can be used. This is a critical part, making sure

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that during that transitioning period, we were able to still have trucks leaving
and have shipments leave into the UK. This was the most crucial and sensitive
part for us in the transitioning period.

Interviewer: I see, but then how exactly were you able to insure a smooth
process, did you put together a team?

Company D: We had a taskforce in our purchase and transportation team.

This was global group working fully on Brexit consequences.

BREXIT - after the transitioning period and TCA

Interviewer: We will now discuss the time after the transitioning period, so
when Brexit went into full effect. This is when the Trade and cooperation
agreement was announced. What was your view on the TCA and how has it
affected your company?

Company D: Fundamentally our business is untouched, our business

programs can be rolled out, but this is much more complex, administration is
often very cumbersome.
If we look back now on the experience that we have had over the past years
things have simply become much slower and more expensive for ‘CDM’.

Interviewer: Can give you a view on your experience of the period before and
after Brexit, with a link to changes, obstacles and events in this period on your
company? Maybe you can link this to operational impacts?

Company D: The first element is that our UK business is relatively small

compared to the rest. We never assumed that this would fundamentally
change our operations. Looking now at the UK interactions , the first couple of
months were chaotic and unpredictable. We relatively soon realized that the
fundamentals of our business flows with and from UK where unaffected, but
the practical rollout was difficult and stressful. Some suppliers and customers
had to be disappointed , due to delivery issues and logistics issues with the
UK. The overall situation, I have the impression that it starts to sink in that any

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interaction that we assumed normal before (technical , research, innovation,
supply chain) all these things have now suddenly become much more difficult,
even for our situation in Belgium it was very straightforward before with the UK
(like we were neighbors speaking the same languages , but now it has been
like dealing with a country on the other side of the world. Because of different
product norms, new registration systems had to be established. It is a new
way of bringing services and products to this market so now it is like two steps
back instead of a couple of years ago.

Interviewer: Could you elaborate more on the impact on your trade?

Company D: On trade there is not that much fundamentally changed, tariffs

did not make the new business flow interesting, no new opportunities, but this
wasn’t dramatically. The operational part was impacted more. It was easier for
us adapting to the new market, because we are a global company. For us
instead of 8 markets it is one more now. Change for us is relatively speaking
less, then if you are only focused on the European market. Being global does
have it perks.

Interviewer: You mentioned you had a taskforce to deal with the first issues,
is this team still in place?

Company D: The taskforce is no longer in place and thinking about transport

and logistics, things are clarified, we found alternatives, we optimized our
flows, optimized administration and somethings are now more automated then
before. We see some improvements there. But even if they are automatized it
is a different system then in the beginning, and we have to make sure that they
are all adapted. There is development but in the end it is more variation
(different automations for UK and other markets) and this comes with a cost.

Interviewer: Cost is the next topic I actually wanted to explore with you. Could
you tell me something about the financial impact Brexit had on ‘CDM’?

Company D: You have to adjust key data and systems, everything in big
companies is automated (contracting, shipment bills, purchase orders, delivery

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notes) you have to change the systems and adjust these, with new country
codes, tariffs that are applied, etc. This is a lot more work, and work costs
money.

Interviewer: Would you classify these impacts as : VERY HIGH | HIGH |

MODERATE | LOW | VERY LOW |?

Company D: Full ‘CDM’ point of view? Impact on financial level is moderate.

But with a focus on UK flows only, the work that we had to do to accommodate
to the UK flows, is significant. If we just allocate the cost necessary to only to
the UK part this is considerable high.

Interviewer: Did you experience difficulties distinguishing the financial effects

between COVID-19 and Brexit (considering both events occurred at the same
time)?

Company D: In big companies it is difficult to look at which impact is allocated

to one another. That is very hard for our company, especially since it were
such turbulent times.

Interviewer: Would you say the British market remains an attractive market
for your company and why?

Company D: For us it does, we supply to an automotive industry, clean

mobility is a very strong trend in the UK, for our battery materials, this is the
market we want to serve and luckily the agreement is clear on that and the
business flows from Europe to the UK are still possible. It is an important
market. So ‘CMD’ we will continue to pursue all the business prospects in the
UK. But since we do not have any business operations within the UK now, we
will preserve this for only the EU, also in the future. With the current agreement
in place there is no need to invest in production in the UK for the UK market,
we can still serve them. As long as we can serve them from Europe we don’t
see a need to have dedicated production facilities in the UK, but for other
companies this might be a necessary next step.

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Interviewer: What is your main viewpoint on how Brexit effected your
company?

Company D: First of all on the way to the Brexit agreement it was the
uncertainty. If you don’t know what is coming it is hard to be prepared. There
was a big risk that a lot would change. The business interactions with UK are
purely linked on trade (no significant operations in UK) so we could focus on
all the trade aspects, invoicing billing etc. We had to be prepared with our
automated systems to be able to change on a very short time period. The
change in systems had to be done to keep our flows and transport short. The
agreement had for us little impact on our business, even thought it clarified
things for trade. Bottomline line whatever you do with the UK has become more
complex and costs more now for our company, this is the red line. I believe the
biggest impacts are on the SME’s that used to trade a lot with the UK. If they
were focused on one market, they now suddenly have to, the EU and the UK.

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Appendix 6: Interview CEP

Interviewer: What sector is this company active in and in which regions/

countries are you active?

Company E: We are a pharmaceutical company listed on the stock market

and part of the BEL 20. The headquarters are in Belgium. We have offices in
the Netherlands, Switzerland, France the UK and the US. We have sales
offices throughout Europe, Germany, Italy, Spain, Scandinavian countries.

Interviewer: What kind of activity do you have with the UK?

Company E: So we have a product on the market, for patients in the UK. We

have someone who is in the UK responsible for supply chain throughout the
UK. We do have a separate office there, there has to be an office because we
are regulated for the UK market, that concerns itself over manufacturing and
Regulatory affairs. This is a small office though.

BREXIT Announcement until end transitioning period

Interviewer: there is activity in the UK , could you explain some the key
concerns of Brexit for your company that you had when the referendum was
announced and the period after (before TCA)?

Company E: So for our medicines, the UK and Europe had a global view on
approval process on pricing and indications. The big worry was that there
would be different regulations about medication within the UK market. So far
this still seems to be nicely aligned, no big issues. But we do have to be
cautious. If the MAY’ European regulators will change something, there is no
need for the UK to change as well, so this could complicate things, if they use
there own rules.

Interviewer: Since you didn’t know regulations would change, this was a
cause of concern maybe especially of the uncertainty? How did the company
manage this and where decisions made to tackle the issues that would arise?

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Company E: Our strategy was the head of the UK following everything closely.
We also had people specifically working in the UK dedicated to Regulatory
affairs and supply chain. So this taskforce team in the UK was put in place to
work with the local authorities.

It was a bit of a wait and see approach in the beginning, because the
regulations came, we also assessed risk factors of our annual report. But it
was more a wait and see approach because we had to see what the first steps
of the UK would be and that we could adapts our strategies specifically to new
regulations.

BREXIT - after the transitioning period and TCA

Interviewer: We will discuss the period after the transitioning period, so when
Brexit went into full effect. This is when the Trade and cooperation agreement
was announced. What was your view on the TCA and how has this agreement
affected the business?

Company E: Basically the regulatory regime in Great Britain broadly aligns

with EU regulations, but we have to keep an eye on it because it might diverge
in the future. The TCA might not provide a mutual recognition of UK and EU
pharmaceutical regulations in a few years, but for now everything is nicely
aligned, so no big divergence for now.

Interviewer: How has Brexit impacted the (general) operations of the

company and your work?

Company E : General operations were not really impacted, just the part of the
UK for day to day operations were impacted. But we are looking closely to
different reviews of whether regulations will change or not. This is really
important for our business operations.

Interviewer: So what strategies did the company undertake to tackle those

issues?

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Company E: There is someone specifically dedicate to supply chain in the UK,
but that is just one person who oversees this, given it is not the biggest part of
the business. The first couple of years, was a wait and see approach, watching
closely how everything will play out. But now our people are used to the setup
as it is now, so no new strategies.

Interviewer: How would you describe the period before and after Brexit?

Company E: No huge issues after the TCA, just keeping close steps on
whether the UK regulations will differ from the general European regulations.

Interviewer: Could you think of any future concerns due to Brexit?

Company E: Hard to say, this depends, there is a different authority in the UK

who does our pricing. If there is an update on the product class and regulations
are different between EU and UK, that might become an issue. It is more about
drug regulations, for example Europe says first line treatment and the UK says
something else. This is of course a difficulty that needs resources to make the
adaptation for each separate market.

Interviewer: You mentioned a task force for Brexit, is this team still in place?

Company E: Yes the team stays in place, because we are also in the US with
products and there we also have a local team for the regulations. I am sure the
team can become smaller and different tasks may be allocated. Even in
Europe some countries have local regulations for our pharmaceutical sector.
So we are used to changes in regulations, but this time regulations can have
a much bigger impact.

Interviewer: Did your company experience an impact on the financial situation

because of Brexit?

Company E: For our general business we didn’t see any financial impact. But
on our UK operations (which is small) there was a minor impact. Just because
we needed some extra resources. For the overall business it is in the risk
factors every year but doesn’t weigh heavy on our PNL.

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Interviewer: Could you rate the impact: VERY HIGH | HIGH | MODERATE |
LOW | VERY LOW |?

Company E: For the global part the impact financially is very low, for the UK
part I would still say Low. The main cause of the minor impacts are related to
a bit more resources, personnel and supply chain but still relatively small. And
again we need to have local people in every country we are active in.

Interviewer: so you would not consider transferring your international activity

to other regions instead of the UK because of Brexit?

Company E: No, It is still not a big bottleneck to supply. It is not an issue even
though it needs to be arranged more.

Interviewer: Did you experience difficulties distinguishing the financial effects

between COVID-19 and Brexit, considering both events occurred at the same
time?

Covid overshadowed the impacts of Brexit definitely. Our product launching

got impacted a lot by COVID, even though we were able to manage it anyways.
But it is hard to distinguish impacts from certain events yes.

Interviewer: How is your view on the UK now, do you still see it as an attractive
market, also if you look at the future?

Company E: Yes the British market remains attractive for us, because we
have products that are very important to this market. So because of Brexit we
would still not transfer our activity, because our activity is country specific. No
withdrawal or holds on future activities will be made.

Interviewer: okay that’s clear, and even do you will remain active in the UK,
are there any concerns towards the future?

Company E: Of course there will remain differences now between UK and EU.
Especially differences on label updates, studies requests and all that. But it is
crystallized now what the impact is, we don’t expect big shocks, just continue

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following the local regulators, which helps for us that we have a team in place
in the UK, and are used to different markets.

Interviewer: What future opportunities for the company and other BEL20
constituents in the aftermath of Brexit can you picture?

Company E: Our companies does no see any opportunities related to Brexit.

Interviewer: so now a bit of a concluding question. What is your general point

of view on Brexit on you company? On the impact and also any other things
you want to mention related to Brexit and your company?

Company E: For our company it was a bit of a headache to get everything

right. Especially to work with the local regulators and organize the supply chain
and everything, but no major impacts at all. I think we handled it very well just
by following what we needed to do locally, I don’t think we couldn’t have
handled it better.

Everything now fell in to place. Typically for uncertain events we put a task
force in to place, we keep measuring the impacts and we document it in our
annual report our risk factors. For a stock listed company this is very important
because we have to inform our investor as well. So our Taskforce works
together with local authorities and we try to navigate to get things done and to
limit the impacts of macro economic events and also the impacts of Brexit.
When the news comes in we look at liabilities, risk and how we need to manage
them and then our task force organizes everything. We are really agile, which
is easier as a multinational. Also we already had a team in the UK so our
taskforce was efficiently and fast composed to tackle the issues, and will
continue to do so.

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Appendix 7: Interview CAF: Original Transcription in Dutch

Translated in Appendix 2 to English

Interviewer: Welke bezorgdheden kwamen er bij het bedrijf op toen Brexit

verkondigd werd?

Company A: Een belangrijke eerste vraag voor ons was, is onze business
continuïteit verzekerd. The UK is een goede bijkomende markt voor ons, dus
dit moest even afgetoetst worden in het begin.

Interviewer: Ok dank u, mijn volgende vraag is hoe jullie omgingen met deze
onzekerheid, aangezien niemand een idee had van hoe zwaar Brexit ging
doorwegen, rekening houdend met de deal, no deal en de transitie periode?

Company A: Zoals elk ander bedrijf, heel veel onzekerheid, Hard Brexit,
geleidelijke Brexit, gaan we daar hebben op korte of lange termijn. Wordt er
eerst onderhandeld of niet, al deze fuss wordt op dat moment heel belangrijk
voor een bedrijf zoals ons.

Maar wat belangrijk is dat van in het begin, omwille van het feit dat Londen zo
een belangrijk centrum was voor financiële activiteit en ook omwille van het
feit dat die Brexit in de eerste plaats ging over Immigratie en over trade en
goods ezv, dat dat de belangrijke kanalen waren, was ‘CAF’ veel minder direct
aangesproken en ook omwille van het feit dat relatief snel de financiële
regelgevers, de Europese Commissie aan de kant van Europa en ik dan dat
(Britse tegenhanger FSI of de FSA) zijn samengekomen om bepaalde
overgangsregelgevingen te maken, onafhankelijk van de vooruitgaan van die
onderhandelingen. Er waren eigenlijk verleningen van bestaande equivalentie
verklaringen van de regelgevingen , deze lieten toe dat een heel aantal
financiële operaties konden doorgaan zoals voorheen. Op hele korte termijn
waren die risico’s van business continuïteit waren heel snel overbrugd op korte
termijn. Dit was een grote geruststelling.

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Interviewer: Oke dat begrijp ik, kan u misschien deze verklaringen kort verder
toelichten?

Dit waren equivalentie verklaringen (jaar na jaar verlengd, vooral door de

Europese commissie die dat zei van Londen is een heel belangrijke centrum
voor alles wat clearing en derritve trading is enzv. Dus was de vraag voor de
Europese financiële sector, kunnen we die operaties die we doen in London in
clearing termen, kunnen we die nog legitiem en volgens de Europese
regelgeving beschouwen ja dan neen? De UK dreigde om een third country te
worden. Dus kunnen wij met een third country blijven onderhandelen en
handel voeren in financiële termen zoals we dat gedaan hebben met hun als
Eu lidstaat. Deze equivalentie verklaringen van de lidstaten gaven dat jaar na
jaar de mogelijkheden om dit te blijven doen, dit is een hele geruststelling.

Interviewer: Deze verklaringen blijken duidelijk een gerststelling zijn te

geweest voor het bedrijf. Hebben jullie in deze periode strategieën of
beslissingen gemaakt om de huidige of geanticipeerde problemen van de
toekomst aan te pakken?

Company A: ‘CAF’ heeft heel snel aan contingency planning gedaan. Maar
gegeven dat er relatief snel een signaal kwam van die equivalentie
verklaringen, is er niet noodzakelijk een directe noodzaak geweest, om van de
ene dag op de dag totaal van strategie te veranderen, ook omdat Londen is
voor ons een HUB, we hebben daar een branche, deze is belangrijk, dus we
moeten wel wat aanpassingen doen, maar het is niet zo dat er plots een hele
hoop investeringen hadden of dit onze belangrijkste exportkanaal was van ons
financiële dienstverlening. Voor ons bedrijf was dit niet echt het geval. Het
waren eerder soort van faciliterende activiteiten dat we daar hebben, dus
zolang deze ongestoord door konden gaan was het wel belangrijk om een
beetje aan contingency planning te doen al vorens hele concrete acties en
nieuwe strategieën uit te voeren.

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Interviewer: We gaan nu over naar de periode na de transitie periode, dus
wanneer Brexit in full effect ging. Dit is ook het moment waarop de Trade and
cooperation agreement werd bekendgemaakt. Wat was jullie kijk op de TCA
en hoe heeft het jullie bedrijf beïnvloedt?

Company A: Ik denk dat de TCA voor ‘CAF’ heel weinig concreet heeft
veranderd. Zolang dat wij niet aan goederen handel doen zelf, heeft dit weinig
te betekenen voor ons, zolang uiteraard de equivalentie verklaringen er zijn en
we kunnen bouwen op de contingency plannen.

Interviewer: Ok duidelijk dus weinig inhoudelijke veranderingen ook op vlak

van impact op jullie business operations?

Company A: We hadden grotere impact verwacht. Voorbeeld, hypothetisch

wat gaan we doen met onze clearing operaties, Wat gaan we doen, deze
overbrengen naar Amsterdam of Parijs, Wat gaan we doen met deze zaken
moest het zo zijn dat er problemen zijn. Wat gaan we doen moest er nu plots
een probleem zijn om onze producten te verkopen op de Britse markt als zijnde
equivalent. Moeten we daar speciale bijkomende kapitaal vereiste voor gaan
regelen? Dit alles bleef uit. Eerder deze contingency planning en geen hele
concrete sterke acties.

We zijn wel bezig met worst case scenario’s, maar dus geen harde
veranderingen, deze strategieën zijn niet nodig. Ook onze klanten hebben
voldoende veel overgangstijd gehad om zich aan te passen aan deze nieuwe
situatie. Het was geen big bang eerder een geleidelijk proces.

Interviewer: Kan u een korte beschrijving geven over de periode voor en na

Brexit, met een link naar veranderingen, obstakels en gebeurtenissen in deze
periode. Zo krijg ik een beter beeld van de algemene impact.

Company A: Alles wordt een pak ingewikkelder, je gaat van een eigen markt
naar twee totaal verschillende economieën, waarin dat de regeldrift totaal
anders kan zijn en de landen eerder aan het divergeren zijn in plaats van
convergeren en dat maakt het dan wel eerder moeilijk, als je moet zorgen dat

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je compliant moet blijven met de regels in Europa, maar ook die die van de
UK. Je moet rekening houden met afwijkende reglementering in de UK, wat
wel eens kan gebeuren en voor problemen zou kunnen zorgen. Als we op
termijn kijken en regels gaan meer en meer afwijken, is er een grote Legal risk
die we moeten opvolgen.

Interviewer: Kan je ook kort beschrijven wat het bedrijf haar ervaring is met
volgende elementen, na de verkondiging van de TCA en deze impact hiervan.
Dus impact contracten, trade, personeel, investeringen, data protectie, etc.

Company A: Die branch in Londen is voor ons zo klein, ik zou zeggen dt de

impact die we kunnen asessen is eigenlijk laag en gematigd. Voor ons vanuit
macro economisch perspectief is dit klein bier in vergelijking met wat er daarna
kwam. De periode voor en na Brexit, is de periode voor en na covid. Dus als
we dan kijken wat die Brexit operaties hebben meegebracht, qua
handelsstromen en problemen dan spreken we misschien over macro-
economisch half procent impact in Belgie als het gaat over COVID, 14 procent
op kwartaal basis. Dit zijn de shocken die ons eigenlijk echt hebben
beziggehouden. Brexit was dan een soort van bijkomend schokje. Omdat wij
heel gediversifieerd zijn en dus onze kern markt niet inde UK is is dit voor ons
minder belangrijk. Ik denk dat dit eigenlijk relatief laag is die impact op al die
zaken die u zei voor ons.

Interviewer: Als u dan kijkt naar de Europese markt nu, in vergelijking met de
Britse markt, wat zijn de grootste verschillen die u nu opmerkt?

Company A: het is moeilijker om onze Europese klanten te helpen in hun

transacties met de UK, Want een ééngemaakte markt is simpeler dan
verschillende markten. Je moet zorgen dat je in orde bent met verschillende
wetgevingen in plaats van 1. Al je iemand moet helpen en moet nadenken aan
GDPR binnen verschillende marketen bijvoorbeeld, dat is tijdrovend. De
nieuwe regelgevingen, maken alles moeilijk, maar oké voor ons persoonlijk
valt het nog mee. We kijken nu vooral naar de Uk als een derde country, waar
het waarschijnlijk niet langer heel interessant is om lange termijn investeringen

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te gaan doen, ik kan me goed voorstellen dat het minder interessant is voor
algemene bedrijven , om daar nu lange termijn investeringen te doen en om
de markt nog als thuis markt te gaan zien.

Interviewer: Kan u enkele van de belangrijkste problemen opsommen die

gepaard gingen met Brexit in deze periode?

Company A: Je krijgt te maken met trade Barriers, politieke geschillen,

verschillende reguleringen, met perceptie verschillen. Voor eender welk bedrijf
van de BEL 20 kan ik me voorstellen dat Greenfield’s investment in dat soort
van landen, om daar een business op te zetten dat dat minder attractief is.
Investeringsgrafieken in de UK tonen ook een zeer sterke daling. Wij hebben
daar nu ook niet echt een heel recente M&A gedaan. We zijn daar wel
aanwezig voor onze flankerende operaties, but that’s it.

Interviewer: Hebben jullie dan bepaalde strategieën gekozen om met deze

problemen of toekomstige problemen om te gaan?

Company A: Op de problemen wordt zeker in gegaan. We kijken vooral naar

de toekomst: Wat indien die equivalentie verklaringen niet meer verlengd
worden? Gaan reglementeringen ver uit elkaar driften? Wat als de Uk echt als
een 3rd country wordt gezien. Is het dan nog opportuun om er dan te blijven
voor CAF? Is het dan beter om binnen de Europese markt te blijven i.p.v. de
UK. Willen we dan toch Financiële operaties op het vaste land binnen 1 VASTE
regulering. Met deze vragen houden we ons bezig op vlak van strategie.

Interviewer: Heeft u een idee hoe andere BEL 20 bedrijven hier mee omgaan?

Company A: BEL20 bedrijven die meer goederen handel drijven, hebben te

maken met de grootste impact.

Interviewer: is er op financieel level een impact gevoelt van Brexit?

Company A: De directe impact van Brexit is moeilijk in te schatten omdat onze

business continuïteit niet verstoord is. Maar er zijn wel wat extra financiële

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kosten geweest, om risico’s te berekenen, extra resources om strategieën te
onderzoeken enz.

Interviewer: Was het moeilijk om financiële impact van Brexit te

onderscheiden met Covid-19, aangezien dit rond dezelfde periode verkondigd
werd.

Company A: COVID heeft alles overschaduwd en zeker op de PNL. Die

overlappende periode van Brexit en Covid maakt het heel moeilijk om het een
van het ander te onderscheiden. De bedrijven die handel voeren met de UK
hier, zijn vaak ook op de internationale markten aanwezig, toen is alles
ingestikt en alles probeert zich nu pas te herstellen, dit maakt alles moeilijk om
het 1 van het ander te onderscheiden.

Interviewer: Kan u deze impact een klasse toewijzen: VERY HIGH | HIGH |
MODERATE | LOW | VERY LOW |?

Company A: Brexit low and moderate impact op operationeel vlak, en op

financieel vlak gezien de PNL zeker Brexit niet tellen bij de zaken die ons winst
hebben gekost, dus eerder LOW.

Één van de grote risico’s of vrezen die men had is dat de hele Londense
financiële sector zou verhuizen naar bv Amsterdam, Parijs of Frankfurt en dat
dus eigenlijk een gigantisch grote concurrentie zou komen rond de Europese
financiën. Maar dat is iets dat op dit moment zeker nog niet gezien is, er is wel
een beetje beweging geweest, maar omwille van het feit dat die financiële
markt nog wat artificieel in leven wordt gehouden valt dit mee.

Covid en Rusland, energiecrisis, inflatie, komen steeds naar voor, maar Brexit
wordt niet gezien als een belangrijke dreigende factor voor de wereld
economie of Belgische economie, eerder opgenomen als een additioneel
risico. Onze macro economische analyse toonde de urgentie van covid en
energie crisis, Impact van Brexit op achtergrond gedreven. Uk blijft een land,
Covid tastte onze hele wereldeconomie aan.

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 Interviewer: Zien jullie de Uk nog als een attractieve markt, of zouden jullie
deze markt nu net meer ontwijken?

Company A: De UK is nooit onze hoofdmarkt geweest, we zullen deze nooit

ontlopen, maar het is niet 1 van de marketen die we targeten. We willen er niet
al onze activiteiten ontplooien en ontwikkelingen. Wel belangrijke markt voor
flankerende operaties, hedging en clearing operaties. Dus Londen blijft een
globaal financieel centrum en daarom is het belangrijk om daar ook de nodige
aanwezigheid te hebben. Je kan je niet permitteren om niet aanwezig te zijn
in een globaal financieel centrum. Ook al is het om je klanten te helpen welke
aanwezig zijn op deze markt. De UK blijft belangrijk zeker zolang het niet
onmogelijk wordt gemaakt om daar financiële operaties door te voeren.

Interviewer: Wat is jullie kijk hier over naar de toekomst toe?

Company A: De Uk zal meer en meer een geïsoleerde markt worden.

Interviewer: Wat is jullie algemene kijk nu 2 jaar na exit van de UK?

Company A: Het is de eerste keer dat er een land is uitgetreden en artikel 50

heeft getriggerd. Politiek is dit een heel belangrijk event en de mogelijkheid
opent dat ook andere landen uittreden. Dus misschien indirect voor een beetje
macro economische volatiliteit heeft gezorgd in de markt, The Grexit,
Italianexit… het kan wat voor onzekerheid zorgen in de toekomst. Voor
‘CAF’vallen de shocken relatief goed mee.

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