Baromètre en anglais

Satisfaction of American investors in France February 2023 rd 23 edition

Methodology From December 2022 to mid-January 2023, a questionnaire was sent to the management of subsidiaries of American companies in France We received 135 answers from US companies representing in total: • More than 75,000 employees in France • More than €70 billion turnover in France Source: AmCham-Bain Barometer, Bain analysis #AmChamBainBarometer PAR 200203 - AmCham Bain Barometer ... 3

Respondents’ companies by size and industry Segmentation of sample by number of employees in France Segmentation of sample by industry Other* Healthcare Building/ Public works 0-100 Real Estate Textile/ Clothing Aerospace industry Research and > 1,000 Trade/ Distribution Consultancy Banking/ Insurance Legal Counsel Energy/ O&G Electronics/ Electricity IT Food & Beverage 101-500 Heavy industry 501-1,000 Tourism/ Leisure Chemistry Transportation/ Logistics (*) Other: Education, Non-profit organizations, business services, etc. #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 5

AGENDA France’s attractiveness French talent pool attractiveness Major events impacting France’s attractiveness France’s regions attractiveness AmCham recommendations

One third of respondents expect negative changes in the French economic environment, particularly in light of inflation and labor shortages ECONOMIC CONTEXT In your opinion, will the evolution of the economic outlook for your industry in France over the next 2-3 years be…? “Higher taxes on pharmaceuticals, tighter rules for the RTC* and inflation make the environment difficult for our sector.” Financial Director, Healthcare “In the context of inflationary energy, raw material and debt, we expect macro indicators to stagnate over the next two years to absorb these changes and revitalize the company.” Financial Director, Logistics “The airline industry has seen a strong post-Covid recovery, but disruptions related to the supply chain and energy prices are to be expected.” International Development Director, Logistics “Government's support during the Covid crisis, including partial unemployment allowance, allowed for a fairly strong economic recovery in our industry, reinforced by the importance of tourism in France.” CEO, Leisure/ Tourism Note: In percentage of respondents; (*) RTC = Research Tax Credit (CIR in French) #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 7

The workforce looks set to remain largely stable in 2023, despite the prospect of a possible economic slowdown ECONOMIC CONTEXT How will the number of employees evolve in your company in France over the next 2-3 years? “France remains a growth market for us because we are under- represented given the country's potential.” M&A Director, Research and Consultancy “The number of employees will increase in certain sectors (renewable energies, R&D), to be balanced against an expected market contraction in the fossil fuels sector.” CEO, Energy “Our flexible operations have allowed us to maintain our workforce during the Covid crisis. However, I remain cautious about a potential increase in staff in the years to come.” Executive Director, Education “Our business has grown significantly in 2022, but we expect the recession to slow our progress over 2023-2024.” Practice Leader, Law Note: In percentage of respondents #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 8

58% of respondents think that the perception of France by their corporate headquarters is either good or excellent ATTRACTIVENESS FOR AMERICAN INVESTORS According to you, how do your corporate headquarters view France in comparison with other destinations in terms of investment? “France is a developed economy, with great capacity for innovation and changes/reforms that are going in the right direction to improve the attractiveness of the country.” M&A Director, Research and Consultancy “The low level of digitalization of the industry suggests a great potential of activity for us. The government's desire to reindustrialize the territory is also a plus.” Europe Operations Director, Technology “The historical link between the USA and France, the skills of the workforce, the pro-business reforms (tax, land) and the investment plans are positive points. To be balanced with the administrative complexity, the lack of visibility on public orders and the small size of the energy market.” CEO, Energy “Americans like security: investing in a country that does not speak English well can be a no-go. We therefore prefer to organize events in London or even Frankfurt, because the investment process is more fluid.” France Director, Leisure/ Tourism Note: In percentage of respondents #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 9

The country's NPS as an investment destination eroded to -12%, but remains above the average of past years despite a difficult economic environment ATTRACTIVENESS FOR AMERICAN INVESTORS On a scale of 0 to 10, would you recommend France to a US company seeking to establish business abroad? (10 being the best rating) “French infrastructure is undeniably an asset. Roissy-CDG, for example, is a multimodal hub that is very well connected to Europe, with quality facilities and expansion capacities that other European hubs no longer have.” CEO, Logistics “France has made great progress in terms of attractiveness, but it still lags behind its main competitors: taxation, regulations, social legislation... There is a strong lack of coherence and pragmatismin the face of a competition that will become even fiercer.” CEO, Energy “France remains a high value-added market with untapped potential. However, administrative, fiscal and cultural constraints can be a real obstacle for American companies.” France Director, Leisure/ Tourism “We are very concerned about the stability of tax legislation. Whether it is a question of taxes or contributions, one can never predict what will be adopted in the end, which obstructs the Average = -19% long-term vision of a company implementation.” (*) Net Promoter Score (NPS) = % promoters (grade 9 to 10) - % detractors (grade 0 to 6) Institutional relationships, Food & Beverage Note: In percentage of respondents #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 10

In 2022, the economic context, the social climate and the cost of labor are the main investment decision criteria ATTRACTIVENESS FOR AMERICAN INVESTORS How important are the following factors in your company’s investment decisions? TOP 5* 1 2 3 4 5 Previous rankings Note: In percentage of respondents, (*) Ranking = Very Important + Relatively Important #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 11

France's assets include its quality of life, culture, geographic position, infrastructures, innovation and workforce qualification ATTRACTIVENESS FOR AMERICAN INVESTORS How does France compare with other European countries regarding the following factors? STRENGTHS* WEAKNESSES* (*) Strength if proportion of strong > weak; Weakness of proportion of weak > strong Note: In percentage of respondents, ranking of Strengths = % strong, ranking of Weaknesses = % weak #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 12

Labor and redundancy costs, social legislation and administrative procedures are the priorities for improving France's attractiveness ATTRACTIVENESS FOR AMERICAN INVESTORS + Assets to leverage ce n a r F f o n o i t si o P Improvement priorities - + - Importance of criterion Note: Position of France = % strengths - % weaknesses, Importance of criterion = % very important - % not important #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 13

Over the past decade, France’s position has generally improved on its key assets and has eroded on its historical weaknesses, except for social legislation ATTRACTIVENESS FOR AMERICAN INVESTORS + Assets to leverage ce n a r F f o n o i t si o P Improvement priorities - + - Importance of criterion Against the Criteria in 2011 Criteria in 2022 trend Note: Position of France = % strengths - % weaknesses, Importance of criterion = % very important - % not important #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 14

In 2022, the Netherlands, Germany and Switzerland are France's main competitors for attracting foreign investment in Europe ATTRACTIVENESS FOR AMERICAN INVESTORS In your opinion, regarding the following factors, what European countries would you say are more competitive than France? Macro-economic context Human capital Germany Netherlands Switzerland Germany United Kingdom Netherlands Tax & costs Quality of life and local culture Ireland Luxembourg Netherlands Italy Spain Switzerland Note: Order is proportional to the number of occurrences a country was mentioned #AmChamBainBarometer Source: AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 16

Perception of France as an attractive destination for foreign employees equals the 2018 peak with an NPS of 17% (+3pts vs 2021) ATTRACTIVENESS FOR FOREIGN EMPLOYEES On a scale from 0 to 10 (10 being the highest rating), how likely are you to recommend settling in France to your international colleagues? “The quality of life, the level of wages and the social protection of employees are all aspects that tip the balance in favor of France.” Vice-President, Logistics “France has a high quality of life, a strong healthcare system, a workforce committed to their work, all in a safe environment and a rich culture.” Board Member, Education “Yes, for the environment, but not to make a career, develop and create wealth. It is possible of course but it is less easy than in other countries.” CEO, Energy “Settling in France remains a challenge: it is imperative to speak the language. Integrating and adapting are de facto more difficult than in other European countries.” M&A Director, Research and Consultancy Note: in % of respondents, (*) Net Promoter Score (NPS) = % promoters (grade 9 to 10) - % detractors (grade 0 to 6) #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 17

Quality of life and access to healthcare remain France's greatest advocacy drivers for employees; taxation and social climate are the main deterrents ATTRACTIVENESS FOR FOREIGN EMPLOYEES In your opinion, are the following factors “drivers” or “deterrents” of France’s attractiveness for a company employing foreign workforce? DRIVERS* DETERRENTS* (*) Driver if proportion of Driver > Deterrent; Deterrent if proportion of Deterrent > Driver Note: Ranking of Drivers = % Driver, ranking of Deterrents = % deterrent #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 18

Focus| The country’s innovation capabilities remain a powerful lever of attractiveness, in particular thanks to its skilled workforce ABILITY TO INNOVATE FOCUS DRIVER What is your general perception of the What are France's strengths and weaknesses in terms of innovation and digital in innovation ecosystem in France? the context of your investments? Very negative Weakness Negative Neutral Neutral Strength Positive Very positive “There is a lot of public money available to support innovation, but the barriers to entry (multiple start-up packages, time-consuming procedures...) are sometimes too heavy to take advantage of it. A one-stop-shop could greatly simplify the task of entrepreneurs.” Operations Director, Technology Note: In % of respondents; Ranking of strengths & weaknesses = % Strength #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 20

Focus| More than half of investors (more than in 2021) collaborate with French startups mainly through partnerships ABILITY TO INNOVATE FOCUS DRIVER Does your company work with French startups? If so, how? “France has succeeded in creating an environment conducive to the creation of start-ups, which is an undeniable asset for its attractiveness. However, our start-ups find it difficult to grow beyond a critical size because of labor costs, administrative legislation or brain drain. They end up losing their lead or being bought out by foreign funds.” HR Director, Healthcare Incubators, consultancy… Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 21

AGENDA France’s attractiveness French talent pool attractiveness Major events impacting France’s attractiveness France’s regions attractiveness AmCham recommendations

The perception of the professional training system in France is positive or very positive for more than two thirds of respondents TALENT POOL What is your view on the French professional training system? “The level of qualification of French engineers is a real asset for recruiters.” International development Director, Logistics “The return to favor of apprenticeship is really beneficial for companies, especially for recruitment and retention. Germany understood this a long time ago, France is just starting to implement it.” CEO, Logistics “There is a real awareness of the "international" issues facing the Very negative education system. This will facilitate the attraction of international Negative talent while improving the French position in international Neutral rankings. However, there is a big difference between Paris and the regions.” Positive Institutional Relations, Food & Beverage Very positive “In certain areas, such as digital skills, adaptability and collaborative skills, training has progressed. However, some fields, especially technical ones, have been deserted, which is a problem for the recruitment of operational profiles.” HR Director, Healthcare Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 23

France still seems insufficiently prepared for the challenges of future capabilities (mainly digital and energy transition) TALENT POOL In your opinion, is France sufficiently prepared for the challenges of tomorrow's new professions? “I don't see any difference between my education and my children's education, which is not right. They don't get lessons tailored to the life of tomorrow, no CSR or tech classes, and the science hasn't changed either.” CEO, Logistics “France is rather well placed for the professions of the future, but we have a problem of quantity rather than quality: on the digital side we lack profiles in cybersecurity, and on the energy transition side, we would need recruits in the chemical, energy, automotive industries...” CEO, Energy “France has been rather reactive regarding the professions of the future because new training courses have already begun to emerge. Nevertheless, this should have been anticipated 20 years ago, especially for very specific profiles such as cybersecurity or hydrogen fields.” Development Director, Aeronautics Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 24

France suffers from a labor shortage in all industries, as do other major economies around the world TALENT POOL How would you describe the availability of labor and talent in France? “Highly skilled profiles have always been hard to find, but since Covid, other profile types have also become scarcer. However, this is true throughout Europe, as well as in the US and Asia.” CEO, Technology “The tension on the market is such that our employees are regularly poached. The tension is increased by the lack of geographical mobility of certain profiles.” CEO, Energy “The lack of manpower has worsened since Covid, especially since several companies are trying to expand, which increases the tension. We border Switzerland and are therefore in competition with very high salaries, especially for highly technical profiles. To face these difficulties, we offer training in our employment area to people who are far from employment.” Plant Director, Healthcare Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 25

Work From Home is still very present in companies; perceptions of its impact are polarized but remain largely positive TALENT POOL Do you see an (increase/ decrease/ What has been the impact of the hybrid stability) in Work From Home compared work model on the performance of your to one year ago? company? “Work From Home allows for better attractiveness and therefore better retention. It strengthens the work-life balance.” CEO, Consulting “Employees have more flexibility. Their performance remains similar to face-to-face work, if not better.” CEO, Chemicals “The downside of Work From Home is that it makes teamwork more difficult: connection between colleagues, difficulties in creating/ maintaining a team spirit, reactivity, communication.” CEO, Food & Beverage Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 26

AGENDA France’s attractiveness French talent pool attractiveness Major events impacting France’s attractiveness France’s regions attractiveness AmCham recommendations

The State's climate commitments are mostly well received, but only 43% of respondents believe that their own commitments remain adapted CORPORATE SOCIAL RESPONSIBILITY In your opinion, do the State's efforts in In your opinion, do the current economic “There is a good alignment between the terms of ecological transition have an turbulences put companies’ ambitious European climate requirements and our impact on France's attractiveness? climate commitments at stake? group’s, which facilitates the implementation in the country.” Development Director, Aeronautics “The Americans do not see a political threat in France in terms of ecological transition. CSR criteria are not taken into account for investment decisions.” France Director, Leisure/ Tourism “The commitments made, such as electrifying an entire fleet of vehicles, are unrealistic for the moment: there is not enough electricity in France for all the drivers. We will surely achieve carbon neutrality, but by other means.” CEO, Logistics “Despite inflation, we are meeting our climate commitments because there is a real market demand.” CEO, Chemicals Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 28

Almost two thirds of our respondents’ investments were not negatively impacted by rising energy prices and inflation GLOBAL TURMOIL In your opinion, has the price of energy in In your opinion, did the inflation and the France (compared to other European macroeconomic context impact your countries) had an impact on your company's investments in France (compared company's investments? to investments in other European countries)? “The increase in energy is temporary, whereas our investment decisions are made over 3 to 5 years. It is not a criterion for future investments.” CEO, Chemicals “France has taken the necessary measures to limit inflation and is doing better than its neighbors. We are less exposed than Germany in terms of access to energy and its costs.” Development Director, Aeronautics “Inflation has led us to reduce our investment ambitions, to spread them out over time or to postpone them. However, this situation is similar in other countries than France.” Institutional Relations, Food & Beverage Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 29

Corporate taxes, renewable energies and pensions are seen as priority issues to be addressed, against a backdrop of concerns about the debt POLITICAL SITUATION In your opinion, what are the top priority reforms for President Macron’s second term to increase France’s attractivity? What is your opinion regarding the public debt? Lower public spending, Production taxes, TCVA* reduction, education reform, administrative simplification… 1 2 3 Note: In % of respondents, several answers possible for political reforms, TCVA: Tax on Corporate Value Added (CVAE in French) #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 31

AGENDA France’s attractiveness French talent pool attractiveness Major events impacting France’s attractiveness France’s regions attractiveness AmCham recommendations

Ile-de-France retains its dominance in regional attractiveness, followed by Auvergne- Rhône-Alpes and Hauts-de-France FRENCH REGIONS For each of your regional installations, what were the main In which French region(s) is your company located?* determining factors (maximum 3)? Focus on next All region combined pages Historical site, existing plant, proximity to a hub… Note: In % of respondents; (*) no company present in other regions #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 33

Focus on 3 regions | Geographic location, workforce, quality of infrastructure, and economic dynamism contribute most to the attractiveness of regions FRENCH REGIONS FOCUS For each of your regional installations, what were the main determining factors (maximum 3)? Île-de-France Auvergne-Rhône-Alpes Hauts-de-France Presence of Mainly acquisitions or airports and of Mainly acquisitions or historical sites public authorities historical sites 0% Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 34

Focus on 3 regions | Satisfaction with policies and actions dedicated to regional attractiveness has grown compared to last year FRENCH REGIONS FOCUS Are you satisfied with the policies and actions carried out by the region(s) in which you are located to attract foreign investment? Île-de-France Auvergne-Rhône-Alpes Hauts-de-France Note: In % of respondents #AmChamBainBarometer Source : AmCham-Bain Barometer, Bain analysis PAR 200203 - AmCham Bain Barometer ... 35

AGENDA France’s attractiveness French talent pool attractiveness Major events impacting France’s attractiveness France’s regions attractiveness AmCham recommendations

AmCham recommendations 1 2 3 4 5 Rethink the Persevere in the Accelerate France’s Promote more the Continue and country's education implementation of reindustrialization, attractiveness of accelerate and training ambitious economic particularly in the regions and cities administrative systems, while and social reforms digital, energy and simplification, in promoting the R&D markets order to bring France complementarity of back to its neighbors’ generations and competitiveness equal access to level certain professions #AmChamBainBarometer PAR 200203 - AmCham Bain Barometer ... 37

Contacts Study Marc-André Kamel, Partner Study Eglé de Richemont, Managing Director +33 1 44 55 75 69 +33 1 56 43 45 61 [email protected] [email protected] Press Bain & Company Press Zahira Benabdallah +33 1 44 55 75 75 + 33 6 43 95 23 52 [email protected] [email protected] Image 7 +33 1 53 70 74 70 [email protected] #AmChamBainBarometer PAR 200203 - AmCham Bain Barometer ... 38