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french chamber of commerce in great britain  www.frenchchamber.co.uk

b u s i n e s s



Conventional to Digital Meet the new Ambassador Interview of HE Ms Sylvie Bermann

From gloom to boom? Stephen King, HSBC Global Chief Economist

Fabrice Brégier, President and CEO of Airbus on integration and innovation

Digital currencies: the good, the bad and the ugly

5 minutes with... David Oldroyd, Safran Country Representative

The Food Assembly – a new economic paradigm in the making?

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 - info - november / december

Arnaud Bamberger


President, French Chamber of Commerce in Great Britain, and Executive Chairman of Cartier


t may have seemed like a return to the French-bashing season when a prominent UK retail head’s derogatory remarks about France hit the headlines recently, but to counter that, we have read and heard much more that is positive. At our Franco-British Transport Conference in October, both the Rt Hon Patrick McLoughlin MP, Secretary of State for Transport and Sir Peter Hendy, Commissioner of Transport for London, spoke in glowing terms about their relationships with their French counterparts and how they had learnt and taken inspiration from the French approach to urban transportation. Moreover, our new French Ambassador was dubbed the ‘Glambassador’ in a London Evening Standard interview which cast her in a very positive light. Manuel Vall’s first official visit to London on 6 October was also positive in many respects, and he set out very eloquently the pro-business stance the French government is taking as well as its planned reform programme. It is encouraging to hear such words, but as the British say, ‘the proof is in the pudding’ and we look forward to seeing the reforms implemented fast. Our bilateral relationship is strong economically too, with France being the third largest investor in the UK. At a time when both countries are running high trade deficits, it is also good to remember that the UK accounts for France’s main trade surplus in the world. Such bilateral trade and cross-border business are inevitably affected by the EuroPound exchange rate, which brings us to the theme of this issue of INFO: Currency: conventional to digital. The articles of the Focus look at the past, present and future of currency, from the dominance of reserve currencies and the foreign exchange markets to the rise of a cashless economy and the emergence of digital currencies. How corporates use currencies is also examined from a number of different perspectives – managing risk, hedging, foreign exchange products and operational strategies. It is a weighty but interesting topic. In this issue too, we are pleased to have our own first interview with HE Ms Sylvie Bermann, our French Ambassador to the UK. And we are delighted that she will be speaking at the Franco-British Business Awards on 27 November, which, as always, will provide a chance to commend and celebrate all that is good about Franco-British business. I hope to see you there. And as this is the final issue of INFO for 2014, may I take this opportunity to wish you all a happy and prosperous festive season. I

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Contents issue 215 / November - December 2014


Meet the new Ambassador: HE Ms Sylvie Bermann

Meet the new Ambassador


Interview with Fabrice Brégier, President and CEO of Airbus


Managing foreign currency risk

32 Reserve currencies: from Sterling supremacy to the ‘green back’ reign

8 HE Ms Sylvie Bermann

5 minutes with...

10 David Oldroyd, Safran Country Delegate

News in the City

13 City Shorties 14 From gloom to boom?


17 EDF Energy: European Commission approves


34 35 36 37

The global FX markets and London’s position Overview of RMB internationalisation The rise of the cashless economy Digital currencies: the good, the bad and the ugly

38 Cryptocurrencies: Good prospects for securing the Wild West

40 Managing foreign currency risk 42 Foreign currencies and accounting considerations

19 Areva and Schneider Electric sign R&D

43 Home buying and currency profits 44 Corporate interviews on currency risk 45 The corporate approach to currency hedging 46 How corporate seize market opportunities in

21 Fondation Louis Vuitton opens its door 23 easyJet scoops Business Traveller’s Best

47 Who uses FX products and why? 48 Trading in Renminbi: reducing costs,

Hinkley Point C

18 New Eurostar e320 train to be unveiled marking Eurostar’s 20th birthday cooperation agreement

Low-Cost Airline award

24 School News

Foreign Exchange

managing risks

49 The Financial Transaction Tax and its potential effect on currency and corporates

SMEs & Startups

26 Briefs 28 Profile: The Food Assembly


31 Currency: Conventional to Digital Managing Director: Florence Gomez Editor-in-Chief: Keri Fuller Corporate Communication Executive: Marielle Fraize Graphic Designer: Katherine Millet Advertising & Sales: Suzanne Lycett Publications Assistant: Katie Chadd Subscription: INFO is published every 2 months Printed by: CPI Colour


The Food Assembly

Franco-British Transport Conference

Eat, Drink, Stay

54 Petrossian arrives in London 56 Cheese & Wine Press

News at the Chamber

58 New Members 59 Hello / Goodbye


61 Breakfast with Nicolas Beytout: Is France the sick man of Europe?

62 Interview with Fabrice Brégier, President and CEO of Airbus at Dîner de la Rentrée

64 The Franco-British Transport Conference 68 Discover Ruinart Dîner des Chefs: Alain Ducasse at The Dorchester 71 Luxury Club Breakfast at the ROH

Forum & Clubs

72 Climate Change / Finance Forum: The green economy – how to finance sustainability

74 SME & Entrepreneurs Club: How to fund and manage growth


50 Cirque du Soleil’s KOOZA returns to the Royal Albert Hall

75 HR Forum: How to foster a culture of innovation

76 New Deputy Chair for the Legal Forum

51 What’s on 53 Book reviews

Forthcoming Forums & Clubs

77 Forthcoming Events

Contributors: Marie-Cécile Boulle, Eric Charriaux, Nicolas T Courtois, Stéphane Eyraud, Geraldine Fabre, Xavier Gallant, John Glasby, Sandeep Goenka, Patrick Gougeon, James Kemp, Thibault Lavergne, Leo Malkin, Christian Mouysset, David Pavitt, Andy Powell, Severine Priser, Jonathan Snade, Grégoire Scholler, David Stebbings, Cover images: © Olinchuk; © Yermek


5 minutes with... David Oldroyd

Cover artwork: Katherine Millet

Distribution: French Chamber members, FrancoBritish decision makers, Business Class lounges of Eurostar, Eurotunnel and Air France in London, Paris and Manchester Editorial and Publishing Office: French Chamber of Commerce in Great Britain Lincoln House, 300 High Holborn London WC1V 7JH Tel: (020) 7092 6600; Fax: (020) 7092 6601 www.frenchchamber.co.uk

Meet the new Ambassador

HE Ms Sylvie Bermann

How do you see your role as French Ambassador to the UK? What are your main priorities and objectives?

The Franco-British relationship is very deep in all areas of strategic importance. At a time when the United Kingdom is questioning its membership of the European Union, one of my main priorities will be to maintain an intense dialogue with the British government on all European issues. Another priority of course will be to strengthen economic relations, especially in the energy sector. I am very glad that the European Commission recently confirmed the legality of the agreement for EDF to build two nuclear reactors at Hinkley Point C. It is the biggest foreign investment in the UK since the Second World War. As France and the UK are engaged together in the Middle East, cooperation on foreign policy and defence will also be central to my mission. Our strong defence cooperation, as defined by the Lancaster House treaties,1 must be strengthened even further. And I should mention the fight against climate change, which will be a top priority in 2015, when France will be entrusted with the COP212 presidency. Finally, what also makes our relationship so deep is the wealth of human contacts between our two countries. I am talking about the hundreds of thousands of Britons living in France and French people living in the UK, not to mention the 12 million British visitors to France every year. I will make

every effort to ensure that France remains the British people’s favourite tourist destination. China and the UK, your former and current postings as Ambassador, seem worlds apart in many ways. Is it a great transition for you? What do you feel you could bring from your experience in China to the UK?

China and the UK are indeed worlds apart in many ways, but, at the same time, London reminds me of Chinese cities because of its optimism and the number of skyscrapers being built. What stands out, in my experience, is that in Beijing we are all seen as part of Europe, and the Chinese would not understand it if the European Union started unravelling. China is on the rise, it is a fact of the 21st century, and if we want to go on having influence at a global level we should not deceive ourselves that we could do it without the European Union. Will you bring to bear any of your own particular interests in your role as Ambassador?

Being in London will allow me to indulge in the arts. My job involves promoting French culture. I was doing this recently for the French galleries at FRIEZE, and in October I hosted the French writer Emmanuel Carrère. But I am also looking forward to enjoying many aspects of British cultural life. I’ve just been to see Kristin Scott Thomas, a great Francophile, playing Electra at the Old Vic.

1. The Lancaster House treaties are two treaties between the UK and France for defense and security cooperation, signed on 2 November 2010 by British Prime Minister David Cameron and French President Nicolas Sarkozy. 2. 21st Conference of the Parties on Climate Change

 - info - november / december

Your career has been summarised as ‘10 years for the United Nations, 10 years for the European Union and 10 years in Asia’. Can you tell us a little bit about each?

I actually started my diplomatic career in a UK territory, as I was posted to the French Consulate General in Hong Kong. This was because I had a longstanding interest in China. In the mid-1970s I decided to go and study in Beijing; because it was the time of the Cultural Revolution, this also meant being sent to do agricultural work. I’ve been posted to China several times since then, which has allowed me to witness the incredible development of that great nation. During my 10 years dealing with United Nations matters, I obviously had no closer ally than the United Kingdom, as France and the UK jointly draft the majority of UN Security Council resolutions. I also worked very well with British diplomats during my years in Brussels.

chefs on all five continents will celebrate French food. All chefs are invited to participate and can register online, on the Good France website, until 15 December. How do you plan to respond to the recemt ‘French-bashing’ phenomenon?

In the last few weeks, two French citizens, living and working in France, have received the Nobel Prize: there could be no better answer to the French-bashers. One of those French citizens, Jean Tirole, got the Nobel prize for economics. He said that France was clearly not finished and had many economic strengths. He added that reforms were necessary. How will you be engaging with French businesses in the UK?

Our government has made economic diplomacy a priority, giving embassies a leading role in supporting businesses internationally. The You take up your post in the UK at Embassy and its departments ...i n 2013, the UK a time when it is questioning its take part in and support many accou nted for France’s membership of the EU or at least activities to promote French mai n trade su rplus of seeking a renegotiation. Do you see businesses and expertise, both €8.7 bi l l ion. T his success this as an issue that could strain in London and the various is, of cou rse l i n ked to relations between the two countries British regions. These activities that of ou r national during your tenure? are bearing fruit: in 2013, the champions i n energ y, As I have said, France’s position UK accounted for France’s main transport and fi nance is clear: the European Union is trade surplus of €8.7 billion. This stronger with the UK and the UK success is, of course, linked to is stronger inside the European Union. But this does that of our national champions in energy, transport not mean that the European Union should not be and finance, which are recognised players and reformed. It should be more focused on what matters promote France’s image in the UK. But it is also the most to citizens, i.e. jobs and growth. result of France’s presence in sectors where it is less expected to be present, like computer services, design, At the recent French Ambassadors’ Meeting in France, innovation and research. Foreign Minister Laurent Fabius charged ambassadors with expanding France’s cultural influence. How would you go about this?

How important is the French Chamber of Commerce in supporting and promoting French business in the UK?

The ‘Institut français’ in London is already very active in this field, of course. The Ciné Lumière, recently refurbished and reopened by Catherine Deneuve in 2009, has established itself as one of London’s top repertory cinemas. The ‘Institut’ also presents a phenomenal range of festivals each year (South Ken Kids Festival, Totally Serialized, View – a festival of Art History, It’s All About Piano, etc.) and is very active on the music scene, with a wonderful line-up of classical music concerts and live opera broadcasts. But France’s cultural influence is not only about culture, it is also about promoting French gastronomy, art de vivre and know-how. As an example, on 19 March, the Embassy will participate in the ‘Good France / Goût de France’ event. As winter gives way to spring, 1,000

The French Chamber of Commerce plays an essential role in helping French companies that want to establish themselves in the UK; this complements the work done by Ubifrance. More generally, it is a key place for meetings and exchanges and it helps forge and strengthen ties between the French and British business communities. The fact that the French Chamber of Commerce is the leading London-based Chamber of Commerce – even ahead of the German and American Chambers – is a good indicator of its influence and the strength of those ties. Finally, I welcome the fact that, through its different activities, the Chamber gives UK-based investors a positive and dynamic image of the French economy. I Interview by KF

info - november / december - 

5 m i n u te s w ith ...

David Oldroyd, Safran Country Delegate and Managing Director, Morpho UK Ltd

Safran is a big group with a number of different identities and activities. How does it work together as a whole?

We position ourselves as a leading international high technology group, with three pillars of activity – aerospace, security and defence. Aerospace and aircraft equipment manufacturing accounts for about 80% of our total revenue. Globally we have 66,300 employees, with 71% of those based in Europe. Being a market leader is part of our DNA: we are number 1 worldwide in several fields, for example, engines for mainline commercial aircraft with more than 100 seats (in partnership with GE), helicopter turbine engines, landing gear, automated biometric ID solutions and computed-tomography explosive detection systems, among others. In 2013 our order book increased by 15.9%. Does such diversification work to the business’s advantage?

Obviously being a global player gives us huge benefits in terms of scale, such as the amount we are able to invest in research & development as well as training. As a group we also benefit from the synergies of technologies and work practices across our core activities, especially defence and security Moreover, the portfolio of businesses operating in connected but different markets gives the group a good balance when there are financial and economic challenges. For employees, it provides attractive opportunities for national and international mobility. We are also able to invest heavily in skills and expertise training through our own Safran University in Massy near Paris, which plays a significant role in the induction of new employees, of which there were 8,500 in 2013 alone. What does Safran do in the UK and how important is its UK business in terms of the whole group?

The antecendents of Safran in the UK have a long and proud history, for example Messier-Bugatti-Dowty, founded in 1935 as Dowty Aviation, and our aerospace business has since developed through a process of 10 - info - november / december

acquisitions, the latest being Labinal Power Systems, so historically we have a strong and enduring presence here. Our nine entities are located throughout the UK. Messier-Bugatti-Dowty is split into two companies, one manufacturing and the other providing maintenance, repair and overhaul, employing over 1,200 people in Gloucestershire. Aircelle, which makes nacelle systems for aircraft engines, is the largest employer in Burnley, Lancashire, which brings with it important community and social responsibilities. The other aerospace companies include Turbomeca UK, Labinal Power Systems and Safran Engineering Services, while on the security side we have Morpho UK. Safran UK provides shared services such as finance, purchasing and legal services. Our value to the Group is what we can bring collectively to the table, so we have fostered a high level of communication and co-ordination between the entities to leverage the Safran brand in the UK. Does Safran have any UK specialisations or do its activities mirror those of the Group?

It largely mirrors the three core elements of the Group’s activities but there are of course UK-specific characteristics, such as our bias towards aerospace in terms of employee numbers. Rather than being a separate pillar, defence activities are integrated within the aerospace activities, as certain firms support Ministry of Defence contracts. Security is a smaller but important element, generally targeted around high profile government systems but also having an interest in the defence market. The UK has been at the forefront of innovation both technically and in procurement mechanisms. How does being Safran Country Delegate fit together with being Managing Director of Morpho UK?

It is a dual role, which is very positive. As the Country Delegate, I am the Group ambassador in the UK and facilitate communication and cooperation between

5 m i n u t e s w i t h D av i d O l dr oy d

the elements, but my operational background keeps me grounded because what we are doing as a collective is based on operational needs and requirements. I see the roles as being very complementary: I retain an operational focus and a strategic focus that mutually inform each other. Representing Safran in the UK as a unified whole has increased the Group’s image as a strong local player in aerospace, defence and security, especially in the eyes of the UK Government. It has also helped to create an environment in which internal shared services could move forward, allowing our companies to benefit from services that are necessary to their running, but which fall outside their core businesses.

the correct measures are put in place, particularly around communication, working in a varied cultural environment is very beneficial and supports higher levels of creativity than may be the case otherwise. What are Safran’s main challenges in its core businesses?

One that is the main subject of our discussions within the UK across all our activities is the recruitment, retention and development of people with the appropriate skill levels. Having said that, Safran has certain advantages in this regard as a result of its position within the market, its scale and the investment that it is making through such initiatives as the Safran University, to recognise that skills development in all areas is crucial Does Safran in the UK serve the UK market alone and who to our continuing success. are your clients? The other challenge is remaining in a position We are a big employer and put a huge amount into the of leadership, which requires different skills to supply chain in the UK, but we export more than 70% securing that position in the first instance. Like all of our products, particularly to organisations we have to guard the aerospace market. On the against complacency and place ...we are part of a French security side, the government an emphasis on continuous group, so why not be is our main client, but this area improvement. Investment in R&D proud of it and make the is opening up a bit more into and in people is fundamental to the most of it banking,retailandorganisations way the Group views the future. where the government is not the customer but oversees as a standards authority, How is the business evolving both in the UK and airports for example. Conversely, our aerospace clients worldwide? are predominantly private – civilian rather than military Safran has evolved through a mixture of organic growth aircraft. with appropriate and strategic acquisitions, and I don’t see any reason why that would not continue in the future. It How does your partnership with Rolls Royce work? is a well-balanced approach because there is an emphasis Safran enjoys a very good relationship with Rolls Royce, on improving the skill set through developing the core with Turbomeca partnering with Rolls Royce on the activities while also being alert to new possibilities Ardour programme and Aircelle providing nacelles for within the market place that have a strategic fit. Rolls Royce engines. Being a French company in the UK, how do you manage cross-cultural relations?

One cannot ignore the French antecedents and origins of the Group, but Safran’s global footprint embraces a large number of countries and so sensitivity to other cultural imperatives is required. Cross-cultural relations have to be worked at, with expectations managed on both sides, particularly in key areas of communication, networking and planning. In Morpho, as an example, we introduce the notion of cultural sensitivity at the induction phase for new employees and we think it is important to support and explain to employees the differences in cultural dynamics that they may face. The Chamber’s cross-cultural relations booklet, Light at the End of the Tunnel, is actually required reading. Having had experience of working within a Frenchowned group for some time, I believe that, provided

What does a group like Safran get from being a member of the French Chamber?

Three years ago when I came into the job, I was amazed to discover we weren’t part of the French Chamber and within my first month we became a Patron member. My logic was quite simple: if we are trying to sell ourselves as Safran, we should be engaging with the French Chamber as a valuable source of support in terms of access to other established French companies and the Embassy. I find the networking is particularly useful for getting a flavour of the UK markets and I applaud the efforts made by the Chamber to provide appropriate forums through which member companies can come together. I also use the Chamber as a focus for our companies, for example taking a table at the Gala Dinner, which is a really good way of getting together in a different environment. We are part of a French group, so why not be proud of it and make the most of it! I Interview by KF info - november / december - 11

n e ws i n t h e ci t y Shorties

Ill. N. Elmehed. © Nobel Media 2014

French economist wins Nobel Prize ||| Called ‘one of the most influential economists of our time’ by the jury, Jean Tirole has won the Nobel Prize in Economics, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The economics prize was set up in 1968, not being one of the original awards set out in Alfred Nobel’s 1895 will. Tirole’s work on market power and regulation has given regulators and competition authorities ‘a whole set of tools’ by showing that capping prices for companies with a monopoly and banning cooperation between competitors did more harm than good under some conditions, according to the Royal Swedish Academy of Sciences, which made the announcement. The 61-year-old economist is six years younger than the average age of Nobel economics laureates, and is not the only French winner this year, as compatriot Patrick Modiano was awarded the Nobel Prize in Literature. I KF

Jobs up, pay down ||| It’s a silver cloud with a dark lining – UK unemployment is almost down to pre-crisis levels, dipping below two million for the first time since 2008, but pay is failing to keep step with inflation. According to the Office of National Statistics (ONS), 73% of people aged 16-64 are now in work, just off the all-time

high of 73.2% in 2004-2005. The bad news is that wages are still lagging far behind inflation, even though that too is falling. Average weekly pay grew by 0.9% while inflation fell to 1.5% in mid October, equivalent to a real terms pay cut. It is a sign that companies are taking on more staff, but paying them less than a year ago. And

while pay is in the doldrums, muchneeded productivity is unlikely to gather pace. Notably, these concerns – weak wage growth and low inflation – together with the flagging Eurozone economy, are weighing on the Bank of England as it continues to delay raising interest rates, still on hold at 0.5% since March 2009. I KF

Cash to go plastic ||| Cold, hard cash is set to bend when the Bank of England puts plastic banknotes into circulation in 2016. The first poly mer-pri nted note will be the £5 featuring Winston Churchill, followed by the £10 Jane Austen in 2017. Polymer notes, which are already used by Governor Mark Carney’s native Canada, will last two and a half times longer than the current paper-cotton ones, thereby saving the Bank £100 million a year.

But it won’t be the Bank of England printing them – since 2003 the printer of the nation’s money has been De La Rue. Despite its French-sounding name, De La Rue is actually a 200-year-old British printer (whose founder hailed from Guernsey), with currency credentials that go back to 1860, when it first printed paper money for Mauritius, and now run to producing over 150 national currencies. I KF info - november / december - 13

news in the cit y

From gloom to boom? On the face of it, the UK recovery is surging ahead of France’s with a second quarter growth rate of 3.2% versus 0.5%. But do such comparisons tell the whole story? Speaking at the Chamber’s Quarterly Economic Update in September, Stephen King, HSBC’s Global Chief Economist, looked at the ‘Anglo-French Challenge’ from some less conventional angles. The global context The UK economy is very cyclical so it is worth thinking about UK /France performance over a longer period of time and also how each country has responded to some of the huge changes taking place elsewhere in the world. We often focus too much on the domestic aspect of our economies and don’t think enough about the opportunities coming from elsewhere and whether our economies are geared up to take advantage of those. China is the biggest single theme to emerge in the global economy over the last 30 years, and is dictating a lot of what is happening in the UK and France. In terms of per capita growth, China is delivering 50 years of US economic advance every decade and is now a magnet for global trade. But in the rankings of exports to China, France comes in at 18th, and the UK limps in at 29th. This is partly down to the fact that neither is a commodity or specialist capital goods producer, unlike some of the countries that have benefited greatly from China’s rise, but it is indicative of a reorientation of world trade patterns that is not necessarily within the control of policy makers. A design fault in the Eurozone Within a European context, comparisons between France and the UK’s long-term relative performance are revealing. In the 20-year period before the Euro, the UK and Spain topped the league table of the big five European economies with the highest per capita income gains, while Germany was middling and France the worst performing. But in a post-Euro world, Germany has risen to the top with a revolutionised performance, followed by the UK, while France occupies the middle ground with Spain. This is intriguing because it shows the creation of a ‘winners and losers’ mentality in the Euro world. Behind this is the German view of how the Eurozone should address its issue. This ‘faulty Teutonic solution’ decrees that countries with too much debt and large deficits should deliver austerity, which will in turn drive down labour costs and facilitate the restructuring of labour markets, thereby making the country more competitive. The question is, competitive against whom? If the whole Eurozone were to deliver 14 - info - november / december

the balance of payments surplus that Germany espouses, those countries that are in a weaker underlying position would be trapped in a continuous state of austerity. By way of illustration, Spain is a country that seems to have delivered on the Teutonic script, embarking on massive austerity, slashing labour costs and regaining a level of competitiveness. But it has done so only at the expense of others in the Eurozone. As Spain’s labour costs are relative to those in other Eurozone countries, it is a kind of ‘internal devaluation’ – a way of shifting problems from one country to others. In one sense, France has been caught in this particular trap. What this demonstrates is that there is a fundamental problem in the Eurozone that the UK to a certain degree has been able to escape from, which is that common shocks, such as the global financial crisis and the sovereign bond crisis in the Eurozone, have led to an increase in idiosyncratic risk precisely because a collective problem has been misdiagnosed as no more than a series of individual misdemeanours. Taking incomes as a measure of performance of different countries compared with Germany, in 1999, French and British incomes were 99.1% and 103.2% of German incomes, respectively. As the poorest country, Spain’s were 72.4%. By 2013, French incomes had dropped to 89.2%, British to 99.1% and Spanish to 64.2%. On current trends, by 2027 the percentages will be 80.2%, 95.2% and 56.9%, respectively. Thus the design fault in the Eurozone is that it is a system that creates winners and losers and it will continue to do so in the years ahead, making it increasingly challenging politically. So how could it be fixed? Successful monetary unions almost always have a burden-sharing arrangement in the face of common shocks – an ‘all for one and one for all’ principle. Two examples are the UK and the USA. Both are not just monetary unions, but also political and fiscal unions, and there is a clear mechanism to allow transfers of tax revenues from one part of the union to another, often automatically through the tax or social security system. In the US, municipalities have the option to default, shifting the burden from the debtor. Before the Euro was created, the mechanism to shift the burden between the weak to the strong was clearly the exchange

news in the cit y

rate, and in the face of a common shock, both weak and strong countries picked up some of the costs. In the Eurozone today, such a burden-sharing arrangement does not exist. The strong, i.e. Germany, tend to argue that the fault lies with countries individually rather than with the system as a whole. Consequently, it becomes a longerterm story of continued austerity, low inflation moving to deflation, big problems with debt, deleveraging and prolonged economic weakness.

Another factor is that the UK is becoming the global consumer of last resort – a country that is happy to borrow while everyone else wants to save. In the past the US played this role, post crisis China took it up, and as it slowed down, emerging economies became involuntary consumers of last resort. Now the UK is playing Atlas by absorbing the world’s excess savings. It is great in the short term as money flows in, partly in anticipation of higher interest rates, but the more money that comes in, the bigger the current account deficit, and eventually creditors will turn their backs on the UK. When that happens there could be a Sterling crisis, possibly higher interest rates, and the UK’s outlook could be a lot weaker.

The UK battling its own demons To a certain degree, this explains why the UK has been better off outside of the Euro and why it has recovered more strongly over the past few months. But the UK has its own inner demons. Fork in the road One is its currently peculiar labour market, which The catalyst for this is the ‘Dis-united Kingdom’ as the has big political ramifications. In the old days, when UK faces big constitutional challenges over the next the labour market strengthened and unemployment two or three years, which will make foreign investors fell, you would expect increases in wages which in turn pause for thought. With the General Elections next increased demand and stoked May, Labour is ahead in the opinion the feel-good factor. However, T he design fault in the Eurozone polls, even though Ed Miliband’s over the past few years, despite personal rating is remarkably low, is that it is a system that creates employment picking up, wages as is Labour’s rating for economic winners and losers... making have been falling. In fact, since management. Over the post-war it increasingly challenging 2008, the UK has been through period, never has a party won a politically the biggest real wage squeeze in general election when its leader is at least 100 years. It happened rated so poorly and its reputation because, unlike most European countries, the UK was for economic management is so low, so a Labour able to deliver a massive exchange rate depreciation in win would throw up some intriguing issues. But if 2008-9, although, rather than rebalancing the economy the Conservatives creep in because of this, in a bid to as was intended, it had the effect of lifting inflation and head off the UK Independence Party (UKIP) they have squeezing spending. So it has been a ‘feel-bad’ rather promised a referendum on EU membership by 2017, and than ‘feel-good’ recovery. the deal David Cameron wants to deliver is associated In one sense, what is happening in the UK is closer with the negotiation of a new arrangement with the to the classical model of unemployment, where lower EU. It is not impossible at this stage that the UK will wages mean more jobs, than the Keynesian one, which vote for an exit. Some people in Europe might say good advocates that an absence of demand leads to higher riddance, but it will raise constitutional issues for the unemployment and the last thing you should do is cut EU as a whole as it will be the first time a country has wages as that curbs demand. However, the kinds of jobs actually chosen to leave the EU. being created are part time, temporary and ones with Back in the ‘United’ Kingdom, the day after the flexible hours that offer less security for the worker and Scottish referendum, David Cameron promised a new lack the fringe benefits of traditional jobs. That may be a deal for all the nation states – not only Scotland, Wales reflection of the new reality of our globalised world, and and Northern Ireland, but also England. This means a lesson to be learnt from the UK experience. But it also the UK could be faced with some very interesting raises deeper questions of what kind of labour market challenges over the next few years as it moves towards and job creation we want, and whether that is consistent local rather than national income tax, public spending with a sustained recovery in economic activity. and government debt. The Chancellor of the Exchequer A potential constraint and its long-time Achilles in particular will have to manage fiscal policy with Heel is the UK’s balance of payments deficit. The UK is much more limited fiscal controls than he had before. growing at more than 3% a year, while the Eurozone is So while the UK has a more flexible labour market struggling to reach 1%, but as the EU is the UK’s most and has had good growth in the last 12 months, its important trading partner by a very big margin, the risk weaknesses suggest that all the difficulties that exist is that the deficit widens, creditors become reticent, and in the Eurozone, can be found on the other side of the the UK starts running out of steam. Channel too. I KF info - november / december - 15

Š photo credits: VINCI, Crossrail, BBMV and MVB photo libraries

CONSTRUCTING A SUSTAINABLE FUTURE At VINCI Construction Grands Projets, we engineer solutions that are not only financially competitive, but also work in a way that is sustainable for the planet. Sustainability goes beyond the care we take in protecting our people and our environment. It’s also a commitment to offer new solutions to our clients and stakeholders. We nurture Innovation. Every two years, the VINCI Innovation Awards get increased entries, reaching 2,075 in 2013. These awards reflect the core values of the group and we are proud at VINCI Construction Grands Projets that the Lee Tunnel project (Thames Water) was awarded the Grand Prize in the UK & Ireland. To learn more please visit www.vinci-construction-projects.com/british-isles

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© EDF Energy 2011

EDF Energy: European Commission approves Hinkley Point C

Artist’s impression of Hinkley Point C

||| The European Commission has approved the agreements between EDF Group and the UK Government to build a new nuclear power station at Hinkley Point C in Somerset. Its decision followed a rigorous and detailed examination of the deal during a 12-month investigation. The proposed agreements are for a long-term contract for the electricity generated at Hinkley Point C and for a guarantee for the project’s debt. The Commission found that the long-term contract and the guarantee constitute an appropriate and proportionate way for the UK to meet its need for secure, low carbon energy. The Commission’s decision leaves the key elements of

last October’s agreements unchanged whilst it has reinforced measures designed to share potential future benefits with customers. Approval by the European Commission is another important milestone for the Hinkley Point C project following the granting of planning permission by the Secretary of State, nuclear site licences and the approval of the EPR reactor design by the UK nuclear regulator, and agreement between EDF and the UK Government on key commercial terms in October 2013. The remaining steps require the conclusion of agreements with strategic and financial partners. In parallel, the waste transfer contract arrangements must be approved by the European Commission and by the Secretary of State as part of the Funded Decommissioning Programme. Subject to a final investment decision, the power station is expected to complete commissioning of the first unit in 2023. EDF Energy Chief Executive Vincent de Rivaz said: ‘The approval of the European Commission demonstrates that the proposed package of agreements between the Government and EDF is fair and balanced for investors and consumers now and for the long term.’ I www.edfenergy.com

||| VINCI Construction Grands Projets, working in a 50-50 joint venture with Costain, will build the Shieldhall Tunnel in Glasgow for Scottish Water, the publicly owned water company. It will be the largest wastewater storage tunnel in Scotland, designed to improve water quality and help cope with the risk of flooding in the city and pollution of the River Clyde. The contract, with a value of €105 million,1 covers the construction of two shafts with a diameter of 15 metres each and a depth of 20 metres, a 300 metre long cutand-cover trench and a 5 kilometre tunnel with an internal diameter of 4.70 metres. The technique used will be that of a mud pressure type tunnel boring machine, one of the company’s areas of expertise. Work got under way in October and completion is anticipated in early 2018. VINCI was also involved in the construction of the Thames Water Lee Tunnel, completed in January. I www.vinci-construction-projects.com 1. Approximately £83 million; €1 : £0.787 2014-10-28

©Google Earth; ©2013 Infoterra Ltd & Bluesky

VINCI to build the Shieldhall Tunnel in Glasgow

Extent of the Shieldhall Tunnel info - november / december - 17


New Eurostar e320 train to be unveiled marking Eurostar’s 20th birthday ||| To meet the demand from customers for travel beyond its existing destinations, Eurostar is significantly upgrading its fleet so that it can expand further into Europe delivering unrivalled comfort, style and service for customers. With the production of the new e320 trains progressing well, Eurostar will be unveiling the e320 on 13 November at St Pancras International – a year before the trains are due to enter commercial service and on the eve of the twentieth anniversary of the service. Carrying 900 passengers, these Eurostar e320 trains

will boost capacity per train by 20% and will be capable of a speed of 320 kph (200 mph). With the interiors and external livery designed by Pininfarina, the world famous Italian design house renowned for its iconic car designs, the design boasts a range of innovative features which will create an outstanding travel experience for customers. CEO Nicolas Petrovic said: ‘Over the next two years our customers will see a complete transformation of our service as we upgrade and enhance every stage of the passenger journey.’ I www.eurostar.com

Veolia wins Norwegian oil platform decommissioning project ||| Veolia group, through its UK subsidiary, has won a prestigious contract to decommission a 14,000-tonne oil platform in the Norwegian North Sea. With a recycling goal of 99.7%, this contract, which represents significant revenue, confirms Veolia’s expertise as it continues to strengthen its position in the offshore decommissioning and recycling marketplace. In a unique feat of engineering and the first of its kind, the YME oil platform, spanning some 72 metres in length and 87 metres high, will be removed and towed in a single lift from its current North Sea location and subsequently dismantled by Veolia at its decommissioning site at Lutelandet in South West Norway. Estelle Brachlianoff, Veolia Senior Executive Vice President UK and Ireland said: ‘This new decommissioning operation confirms Veolia’s strategic position and its expertise in this ever-expanding £1 billion a year market, with 2,000 platforms needing to be decommissioned over the next 10 years. This significant contract with YME will be our foothold in the oil and gas sector which is integral to our future growth.’ I www.veolia.co.uk

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Lutelandet, the site in the Norwegian North Sea


||| AREVA and Schneider Electric have signed an R&D agreement to develop a new energy storage solution, called the flow battery in order to produce and store electricity by combining hydrobromic acid and hydrogen. Funded by the European Union, the project aims to optimise the existing 50 kW flow battery prototype designed by EnStorage to a 150 kW demonstration module. Under the cooperation agreement, both companies will test the flow battery technology under real conditions. The aim is to deliver a competitive and highly efficient solution for the integration of renewable energies. AREVA will lead the project, manufacturing, integrating and installing the storage solution while Schneider Electric will design, manufacture and install the complementary power conversion system. I www.schneider-electric.com www.areva.com

Safran Campus opens its doors in Massy, near Paris


AREVA and Schneider Electric sign R&D cooperation agreement

||| Safran opened its corporate campus in early September. Situated in a 13-hectare (32-acre) park in Massy, not far from Paris, the campus houses Safran University, which will provide 220,000 hours of training to 8,500 employees per year. The Campus gives Safran a state-of-the-art venue to foster its corporate culture and values among all employees, support its development, keep pace with changing technological and organisational requirements, harmonise practices within each profession, and mobilise employees to share and transmit knowledge. Safran Campus was also designed as a preferred venue for meetings and discussions between employees and with all of Safran’s customers and partners. In addition to housing the corporate university, the Campus will also host events such as orientation days for new hires, employee conferences and customer or product seminars. I www.safran-group.com

Bouygues UK to convert former boutique hotel into luxury flats ||| Bouygues UK has been chosen as the lead contractor on a luxury residential development at the site of the former Hempel Hotel in London. The joint venture between Amazon Property and British Land will see the Lancaster Gate retreat, famous for its celebrity clientele and high quality, minimalist interior by designer Anouska Hempel,

refurbished and turned into 18 new high-end apartments while retaining the hotel’s beautiful stucco front facade, and part of the rear facade. Bouygues UK expects to start work on site in October once demolition work has been carried out. The project is due to be handed over in early 2016 and is valued at £14.4m. I www.bouygues-uk.com

www.delahayemoving.com | Tel: +44 208 687 0400

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20/10/2014 13:42

info - november / december - 19

Proud to be the UK’s largest producer of low carbon electricity Feel better energy To find out more about our low carbon nuclear generation visit www.edfenergy.com/energyfuture. Character under licence from BeatBots LLC. EDF Energy plc, registered number 2366852, registered office: 40 Grosvenor Place, London, SW1X 7EN. Incorporated in England & Wales.


Fondation Louis Vuitton opens its doors

©Iwan Baan 2014

©2014 Rindoff Charriau

||| Commissioned by Bernard Arnault and designed by Frank Gehry, the Fondation Louis Vuitton is situated in Paris, on the site of the Jardin d’acclimatation in the Bois de Boulogne. The Fondation Louis Vuitton will be principally showcasing artistic creation in all its forms. At the heart of the spaces, the public will be invited to discover the permanent collection made up of works belonging to the Fondation or the Arnault collection, as well as temporary exhibitions – two a year – and musical events in the auditorium. For the opening of the Fondation Louis Vuitton, the artistic programme will unfold in three successive stages between October 2014 and July 2015, each stage will include a temporary exhibition, a partial presentation of the collection and a series of events. Prior to the official opening of the building on 27 October, an inauguration plaque was unveiled on 20 October by the President of the French Republic François Hollande, Bernard Arnault President of LVMH/Moët Hennessy Louis Vuitton and President of the Fondation Louis Vuitton. I www.fondationlouisvuitton.com

Bernard Arnault - Frank Gehry - François Hollande

Iwan Baan for Fondation Louis Vuitton

©John Paul

Production commences at Chivas Brothers’ new distillery ||| Chivas Brothers, the Scotch whisky and premium gin business of Pernod Ricard, has completed the construction of its new Speyside malt whisky distillery, reinforcing its long term growth prospects in the face of increased global demand for Scotch whisky. Production at the new distillery, commissioned by Chivas Brothers in 2012, started in October. Built using the latest innovations and environmental expertise such as heat recovery technology, the distillery is capable of producing up to 10 million litres of high quality Speyside style spirit per year to support the growing global demand for the blended whisky brands within Chivas Brothers’ portfolio, which includes Chivas Regal, Ballantine’s Chivas Brothers’ new Speyside malt and Royal Salute. whisky distillery The new distillery, which is Chivas Brothers’ 14th operating malt whisky distillery, is named Dalmunach after the nearby pool in the River Spey on whose banks the distillery sits. It has already had a positive impact on the local economy with companies from the Speyside area heavily involved in the construction, while an additional eight permanent employees have joined the Chivas Brothers production team. I www.chivasbrothers.com info - november / december - 21

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Worldwide reach Human touch


easyJet scoops Business Traveller’s Best Low-Cost Airline award ||| easyJet, the UK’s largest airline, has again been voted Best LowCost Airline at the prestigious Business Traveller Awards. easyJet has steadily increased its market share of the business travel market – now one in five of its passengers is travelling for business – thanks to the airline’s leading punctuality and unrivalled network of primary airports as well as a number of product enhancements. Anthony Drury, Head of Business for easyJet, collected the award. Commenting on the win he said: ‘We are really pleased to have won the Best LowCost Airline Award as it is judged by key players in the business travel industry and to be recognised

Anthony Drury, easyJet Head of Business

for the ninth consecutive year is testament tohow hard we work to continually improve our passengers’ experience and evolve our product and network.’ I www.easyjet.com

Images reproduced by kind permission of British Baker Magazine. Copyright: William Reed Business Media

PAUL UK wins Baking Industry Award ||| PAUL UK Ltd has won the Baking Industry Award (BIA) for the Speciality Bread Product of the Year 2014, with its famous Pain Ancien Couronne 2kg.Now in its 27th year, the annual Baking Industry Awards, the industry’s equivalent of the Oscars, is the premier event in the UK bakery calendar and has been recognising industry excellence since 1987. Run by the British Baker magazine, the awards are attended by over 800 key industry executives from across the industry with prizes awarded across 11 categories. The jury were convinced by PAUL UK’s French tradition, the simplicity of the preparation, the healthy ingredients and the unique taste of PAUL flour. I www.paul-uk.com

Bircham Dyson Bell named Top Tier firm ||| Law firm, Bircham Dyson Bell has been recognised as a Top Tier firm in the latest edition of The Legal 500, one of the largest and most in-depth surveys of the UK legal market. In The Legal 500 directory rankings the firm is recommended across 31 practice areas and ranked Top Tier for its infrastructure work. Eleven lawyers feature in the elite ‘Leading Lawyers’ list and a total of 41 BDB lawyers are recommended for their work – a significant increase from the 29 recommended in 2013. I wwww.bdb-law.co.uk

Covéa Insurance gets Gold ||| Covéa Insurance has received a gold accreditation from Investors In People (IIP) following a recent assessment, putting the company in the top 3% of IIP accredited organisations. The achievement recognises the significant progress Covéa Insurance has made towards its aspiration of creating a great place to work and shows the company’s genuine commitment to maximising the potential of its employees. ‘Having the IIP Gold status is a fantastic independent endorsement of our rating as an employer,’ said Lisa Meigh, Head of Learning & Development. I www.coveainsurance.co.uk info - november / december - 23

news Schools

Arts et Métiers ParisTech establishes new industrial partnerships ||| After having launched the a new undergraduate Bachelor of Technology course in September, Arts et Métiers ParisTech, which ranks among the top 15 engineering schools in France, is establishing two major industrial partnerships. The first is with Colas, one of the world’s leading road construction and maintenance groups, and the second is with Schneider Electric, a global specialist in energy management. The school entered into a similar partnership with Safran in 2012, through which a scholarship programme for underprivileged students was launched and in addition, thanks to a collaboration with Airbus, Arts et Métiers ParisTech has been commissioned for the conception and industrialisation of Airbus equipment. These new partnerships are set to help modernise both the teaching and learning at the school even further, preparing students for transforming markets and industries while also increasing the number of internship and job opportunities. I www.ensam.eu/en

New accreditation for Callan School London

ESC La Rochelle enters the Financial Times 2014 Ranking

||| Callan School London, the largest English language school in London, was recently accredited by the prestigious international accreditation organisation, ASIC (Accreditation for International Schools, Colleges and Universities). This accreditation rewards the school for the efforts made to respond to its students’ needs, and also reflects the quality of student experience. Following this accreditation, Callan School London is able to help students from around the world with Student Visitor Visa or Extended Student Visitor Visa applications. The school is welcoming more French people too, with the recent launch of classes tailored to the French community, such as Mums’ English Coffees in South Kensington and Intensive IELTS Preparation during the holidays of the French Lycée. I www.callanschoollondon.com

||| ESC La Rochelle has, for the first time, been ranked in the 2014 edition of the prestigious Financial Times Masters in Management world ranking. This ranking is largely based on a survey of graduates. To establish the positions, the Financial Times uses various criteria including whether graduates have found work three months after graduating, the salary of young graduates after three years in work, career progression and feedback on university education. Academic criteria which relate directly to the courses are also taken into account, for example the number of women professors as well as foreign professors and students. The ranking, which is regarded as a benchmark by business schools, places the ESC Grande École Programme among the top 70 accredited Masters in Management worldwide. I www.esc-larochelle.fr

Eleven new professors at NEOMA Business School ||| In line with its commitment to train flexible, imaginative leaders, capable of risk-taking and creating areas of innovation within organisations, the NEOMA Business School has just recruited 11 professors with outstanding academic profiles, whose expertise is directly related to this. ‘The arrival of these new international professors significantly enhances the School’s already highly-qualified teaching staff,’ explains Adilson Borges, Associate Dean for Faculty at NEOMA Business School. Over recent months, the School has deployed an ambitious international recruitment plan to identify academics whose qualities are perfectly in accordance with the School’s ambitions, positioning and expertise. 24 - info - november / december

’These new professors will actively contribute to the development of a NEOMA Business School offer setting us apart from our competitors. At the same time, with this recruitment drive the School continues to internationalise its teaching staff. Today more than 40% of our professors are from abroad, in line with one of our key strategic areas: internationalisation.’ These new professors undertake to train graduates who will follow exceptional career paths, to advance organisational thinking in the field of management and to contribute to best management practice through their research. I www.neoma-bs.com

ESCP Europe launches its first Bachelor in Management

New book from ESCP Europe Professor Anthony J Evans

||| ESCP Europe Business School is launching its first undergraduate degree. Students will spend time in three of its five campuses in London, Paris, Berlin, Madrid and Torino, over three years. Teaching will be in English, but students will receive training in local languages and are expected to be fluent at the end of each year. This challenging academic degree course is aimed at individuals who wish to pursue careers in international management. The course will combine classic areas of management, such as finance and marketing, with liberal arts and humanities subjects, such as psychology and sociology, as well as language and personal development courses. Frank Bournois, Dean of ESCP Europe, says ‘This new degree meets the needs of international students. It addresses business issues as well as environments and cultures of Europe and beyond. We expect to attract a diverse mix of excellent candidates from a range of countries who will benefit from the chance to live, study and work in three different cities, using three languages. These students will be highly employable.’ I www.escpeurope.eu

||| September saw the publication of ESCP Europe Business School Professor Anthony J. Evans’s new book on managerial economics, Markets for Managers. The book is the culmination of Anthony’s many lectures as well as feedback from students on the business school’s flagship Masters programmes. It provides an extensive overview of economics, aimed at all professionals who want a flavour of the subject, combined with links to websites and online videos. The book’s objective is to fill a niche by combining three elements; while providing good coverage of microand macroeconomics and incorporating a market process approach to economics, it also aims to be an enjoyable read that is easy to relate to. I www.escpeurope.eu





Cross-cultural management



PARIS Success Innovation & creativity






The World’s First Business School (est. 1819)

spotlight on s m e s & s ta r t u p s


Albatross Global Solutions joins forces with numberly (1000mercis Group) ||| Albatross Global Solutions, a market research agency, has entered into a strategic partnership with numberly (1000mercis Group), a digital data marketing pioneer. This partnership is just the latest phase in nearly four years of fruitful collaboration between the two companies, most prominently in the production of the ‘Journey of the Luxury Consumer’ seminar series. This partnership provides a unique opportunity for the two parties, both French Chamber members, to develop new solutions to measure multi-channel customer engagement and to provide a holistic picture of the interaction between consumers’ online and offline brand experiences. I

New owner for The Art Newspaper ||| The Art Newspaper has a new owner – the mathematician, engineer and collector, Inna Bazhenova, who has been the publisher of The Art Newspaper Russia since 2012. The sale agreement boosts the financial backing of the paper and allows it to build a greater internet presence. Umberto Allemandi, founder of the Giornale dell’Arte and The Art Newspaper network, now honorary president said: ‘After 50 years in the business, I need to think of the future. I require total independence from outside interference; intelligent choice of news; scrupulous attention to the facts; and indifference to economic advantage. I want my 50 years to have a legacy, so I have chosen Inna.’ Inna herself commented: ‘I feel very fortunate to be the new owner of The Art Newspaper. The quality of its journalism and scholarship are outstanding and its excellent coverage of international art news is vital in our global environment.’ The monthly paper, which publishes news, interviews, reviews and debate about the art world, has an international readership and operates in France through its trademark Le Journal des Arts. I www.theartnewspaper.com

Headoo promotes snack giant Ryvita ||| At various Vue Cinemas across London and the UK recently, cinema goers were provided with more than just a movie experience. Headoo and creative agency Sense produced a photographic interaction for attendees to promote a snack biscuit range for consumer brand Ryvita. The events took place over a three-week period, at different cinemas, with the Headoo digital platform servicing each event. Participants chose a celebrity with whom they wished to share a biscuit, and then shared the image via the platform and on social networks. Along with brand promotion and smart CRM data collection, Headoo provided detailed region of interest (ROI) statistics, analysing the social digital impact of each event. I www.headoo.com

JIN brings PR solution to the British market ||| Having successfully launched in 2012 in Paris, with a €1 million turnover expected in 2014, JIN, a ‘digital native influence’ and PR agency, expanded its operations in the UK over the summer. Eliott Maidenberg, Managing Director of the London-based subsidiary of JIN said: ‘Blue chip companies and more and more mid-cap companies are becoming quite mature as regards their digital relationship management. But the support offered by agencies is not always up to date. That’s why we believe there is a need for our solutions in Britain.’ Plugr, the solution created in-house by JIN, helps companies manage online relationships with influencers and communities and thus better manage their e-reputation risk. JIN’s clients, who include CEOs and Heads of Marketing, Communications and PR, report that Plugr is ‘always open on [our] desk’. To fund its R&D effort, JIN has been granted the Jeune Entreprise Innovante (New Innovative Company) status as well as the Crédit Impôt Recherche, a tax exemption. I uk.jin.sc 26 - info - november / december

Rose’s charity dinner raises the funds to launch English website ||| At the end of September, Rose, a unique magazine which supports women suffering from cancer, hosted a fundraising dinner with proceeds going towards the translation of its website from French into English – an important step in the development of the magazine in the UK and the Rose charity. The dinner took place at the Connaught, courtesy of the Connaught and Michelin-starred Chef Hélène Darroze. The evening was a huge success with £42,000 raised in total and guests, from the health, fashion, culture and media industries, giving very positive feedback. During the course of the evening, Rose also introduced its The founders of Rose: Céline Lis-Raoux (left), honorary committee for the dinner Céline Dupre (right) with Carine Malaussena, which included the Managing the UK representative, at the dinner

Maximise your CSR investment Forward thinking companies want to make the most of every penny they invest, and why should CSR be any different? Research shows that for every £1 invested, invested Emmaus delivers an £11 social, economic and environmental return on investment. This helps us to support people who are trying to investment overcome homelessness and social exclusion by building effective and sustainable social enterprises. To find out more about how you could maximise your CSR impact with Emmaus, contact csr@emmaus.org.uk. Work with us to end homelessness. www.emmaus.org.uk Registered charity number 1064470, registered in England and Wales.

Director of the French Chamber, Florence Gomez, alongside Nathalie Seiler-Hayez (GM of the Connaught), Hélène Darroze, (Chef at The Connaught) and Isabelle Ealet (MD of Goldman Sachs). Launched in 2011, Rose has a print run of 180,000 copies and is distributed free of charge in more than 1,500 French hospitals. Rose’s objective is to provide a positive, life-affirming message to help women and the families of women affected or recovering from cancer. Now that it will be possible to translate the Rose website, the charity aims to complete the English version by the middle of 2015 and then progressively establish links with local partners and contributors in the UK. I www.rosemagazine.fr

spotlight on s m e s & s ta r t u p s


The first UK Food Assembly meeting in Hackney Wick

The Food Assembly The digital and participatory local food distribution network that has spread to the UK is a palpable example of the shared economy in action


nce upon a time, shopping entailed daily, perhaps weekly visits to markets and producers – the butcher, the baker, the grocer, and once in a while, the candlestick maker – with myriad opportunities to catch up with friends, make acquaintances and interact within the local community. That’s no longer practical, but the spirit of it has been captured by The Food Assembly, an innovative shopping platform that brings together customers and local producers, albeit in a decidedly more 21st century way. Launched in France in 2011, the concept was the brainchild of Guilhem Chéron and Marc-David Choukroun, who wanted to find a new way of sourcing and selling local food, using the Internet and social networks, which would bypass the supermarket chains that have disassociated people from food producers and the true value of food. From the first pop-up market amongst neighbours in Toulouse, the network spread across France, where there are now 600 Assemblies (called La Ruche qui Dit Oui – ‘The Hive that Says Yes’), to Belgium, and then this year launched in Germany, Spain and the UK. Etienne de Montlaur, the international coordinator who is overseeing the UK roll out, explains the business model: ‘An Assembly is two things: a social network/ecommerce platform where a host launches a sale every week directly from farmers and food artisans, each with their own online profile, and then an organised gathering at which members pick up what they have bought online directly from the producers themselves 28 - info - november / december

– a kind of pre-paid farmers market’. The advantage for farmers and producers is that they can fix fair prices, set minimum orders for viability, pre-sell their produce directly to customers and distribute it from one point at the weekly two-hour Assembly. Customers can, without obligation, select and buy high quality produce directly from source, pay for it securely online, and then on collection, interact with the growers and producers as well as other members – much like the old days, but with the difference of technology. ‘It is a very decentralised model – designed to give back the power to the people who create the value, and facilitate autonomous and interconnected communities,’ Etienne explains. Each Assembly begins with a host or leader, usually an individual (and 80% of them are women) but it could be a couple, association or enterprise, who sources and signs up farmers and producers from within a 150 mile radius, organises venues and coordinates the weekly meeting. For an Assembly to be viable, it has to have the basics – fruit and vegetable growers, meat and fish producers, bakers and cheesemakers – and at least 50 members. Thereafter, each Assembly starts to take on a local flavour – beers, chutneys, jams, pasta and so on. ‘The idea is to start playing with the whole shopping experience,’ says Etienne, ‘so for instance, in Hackney Wick, the first Assembly launched in the UK, we had a local artist showcasing his work, a brewer selling artisan beers and a pop-up restaurant providing dinner (pre-paid of course).’

spotlight on s m e s & s ta r t u p s

The whole set-up is monetised by a service charge equal to 16.7% of the producers’ pre-tax turnover, with half going to the Assembly host for organising sales as well as managing and mobilising the community, and half going to the ‘Mamassembly’ (officially Equanum, the company behind it all) whose 35 employees support, administer, manage and develop the network, online platform and organisation strategy. All payment transactions are

It is more than food; we want to change the whole economic parad igm done online, with each user making use of an e-wallet. ‘We provide a very powerful tool so people can focus on what they do best – farmers growing the food and meeting the customers, the Assembly host organising and liaising, and members buying what they want when they want.’ Equanum also has commercial backing with social innovation and private equity funding in France, and recently raised €1.5 million1 from Caisse des Dépôts, Paris Initiative Enterprise and BNP Paribas to support its continued development. Since The Food Assembly’s soft launch in April, nine Assemblies are up and running, seven of which are in London, but there are many more in the making right across the country from Canterbury to Frome. Once a critical mass of 100 has been reached in a country, the market will be considered ‘mature’, giving what Etienne calls ‘the movement’ more momentum. ‘It is more than food; we want to change the whole economic paradigm,’ he explains. In that sense, The Food Assembly is a manifestation of the ‘sharing economy’ – that phenomenon of collaborative consumption built around the shared creation, production, distribution, trade and consumption of goods and services by different people and organisations, usually leveraged by information technology. Its social and economic impact is growing, and was, in fact, recognised back in 2012 in France with the granting of the status of ‘Entreprise Sociale & Solidaire’ in addition to ‘Jeune Entreprise Innovante’. For now, The Food Assembly occupies a niche market – direct selling currently constitutes only 2% of all food sold in the UK – but its revolutionary impetus is unmistakable. Within just three years it has gone from nothing to 600 Assemblies across four countries, involving more than 3,000 producers and 200,000 active members, and Assemblies are forming at the rate of 50 a month. Change is in the air! The French Chamber provides payroll and accounting services for The Food Assembly in the UK. I KF 1. Approximately £1.18 million; €1 : £0.787 2014-10-28

info - november / december - 29

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focus Currency: Conventional to Digital


oney – currency – in various forms has been around for millennia. It has been in a continual state of evolution, from commodities that had value to representative money that could be redeemed for a deposited commodity and then to the fiat money of today that derives its value from being declared legal tender by a government. But currency moves on and within our lifetimes, technology has enabled the transformation of physical cash into a virtual medium, so that we now operate in an increasingly cashless economy, able to transact virtually anywhere without coins or notes. The evolution continues as currency goes digital, challenging our preconceived notions of how monetary value is created, stored and traded. In the first part of this Focus we look at currency as we understand it today, how reserve currencies came into being, how currencies are traded and how within a matter of years we have become a cashless society. In different ways all the articles anticipate the next turn of the evolutionary wheel: Will the Renmimbi knock the Dollar off the reserve currency throne? Will London remain the epicentre of the global

foreign exchange market? How will regulators and lawmakers keep pace with the speed of technological development in currency transactions? Will digital currencies change the very structure of financial systems? And is complete security forever going to be a shifting goalpost? Part two turns to the practical use and management of currencies – and their associated risks – in business. Key steps for setting corporate strategies and policies are proffered along with accounting considerations. We ask two companies how they manage currency risk within their particular business contexts. And we consider what tools and foreign exchange (FX in financial parlance) products are available for hedging and seizing market opportunities, including the very new – but potentially beneficial – option of trading in Renmimbi. Finally the potential ramifications of a financial transaction tax on currency and corporates are contemplated. Complex, technical and elusive it may be, but currency has been and always will be an integral part of our social and economic fabric, and as such cannot be ignored. I KF


part one: Currency Past, present and future

32 Reserve currencies: from Sterling supremacy to

the ‘green back’ reign

part two: how companies use currencies

40 Managing foreign currency risk 42 Foreign currencies and accounting considerations

34 The global FX markets and London’s position

43 Home buying and currency profits

35 Overview of RMB internationalisation

44 Corporate interviews on currency risk: Renault and CPI

36 The rise of the cashless economy

45 The corporate approach to currency hedging

37 Digital currencies: the good, the bad and the ugly

46 How corporates seize market opportunities in FX

38 Cryptocurrencies: Good prospects for securing

47 Who uses FX products and why?

the Wild West

48 Trading in Renminbi: reducing costs, managing risks 49 The Financial Transaction Tax and its potential effect on

currency and corporates

info - november / december - 31

focus Part one: currency past, present and future

Reserve currencies: from Sterling supremacy to the ‘green back’ reign Dr Patrick Gougeon, Professor of Finance at ESCP Europe takes a broad view of the evolution of reserve currencies and whether there is any realistic alternative to the dominant dollar


oney fulfils various functions; it is a medium of a large and liquid efficient capital market is also a exchange used for payments, a unit of account decisive factor favouring the detention of a particular and also a store of value. Many different forms of currency. Dominant nations usually tick all these money have existed but precious metals, silver and boxes; it was obviously the case for the UK during the gold essentially, soon became dominant. Following Sterling era. a dematerialisation process, in each country, various Until the dawn of the twentieth century the forms of paper money, denominated in the national dominance of the UK and the might of the British currency, progressively replaced Empire contributed to physical money. This evolution Sterling’s supremacy. Sterling’s Consideri ng the huge and was driven by the willingness strength was, in fact, the basis persistent t wi n deficits i n to facilitate transactions in an of the Gold Standard system the US – trade and budget ever more complex business prevailing at that time. This – one cou ld now question environment and allow central was founded on the principle seriously the Dol lar ’s banks to gain control on the that a nation must guarantee supremacy creation of money, a key element the value of its banknotes of economic policy. with sufficient gold reserves. With the development of international relations a Holding Sterling was obviously seen as the safest new challenge arose: the need to find well-accepted position. instruments, common to all participating nations, As a consequence of the two devastating world denominated in the same currency. The Pound Sterling wars, and after the abandonment of the gold standard, was the first such currency. the Bretton Woods conference in 1944 heralded the Two main reasons can be put forward to explain end of Sterling’s era, allowing the US Dollar to become why a particular currency acquires an international the sole credible currency.1 status. Economic leadership usually goes with trade supremacy; by flooding the world with goods and Where are we now? services a leading nation also generates a technical The weight of a particular currency in the composition demand for its currency as it is then considered an of total foreign exchange reserves is an indicator of its international payment means. Furthermore, economic international attractiveness. Over the last 20 years the strength is a source of trust for those holding the US Dollar has more or less maintained its dominant currency. It reinforces their belief that the currency position, representing about 60% of total reserves. is unlikely to be depreciated and thus is a good store Today new currencies are gaining importance; indeed of value. Offering the possibility to invest safely on the Euro is one of these.


See Kit Dawnay, ‘A history of sterling’, The Telegraph, October 2001; http://www.telegraph.co.uk/news/1399693/A-history-of-sterling.html

32 - info - november / december


...with the growi ng i mportance of emergi ng cou ntries, a new cu rrency deal may su rface i n the long r u n

Composition of foreign exchange reserves

Allocated currency reserves, IMF data (reserves converted in US$ at end of year rate)

The German Mark was clearly the dominant currency in Europe before 1999, representing nearly 15% of total forex reserves. A strong economy and export capacity justify this position. Germany today still represents about 9% of total world exports, and is ranked third in the global league table of exporters led by China, slightly below the US. Then the Euro was launched, and from 19% its weight increased slightly to 25%.2 These numbers suggest that, to a certain extent, the Euro is seen as a substitute for the Mark, with the economic strength of Germany serving as a guarantee. But how sustainable is this?

future. Nevertheless, with the growing importance of emerging countries, a new currency deal may surface in the long run.3 China, for instance, has clearly initiated a policy aimed at promoting the importance of the Renminbi, although it still has a long way to go. The US Dollar’s persistently strong position also comes from the change in the composition of international transactions. World trade flows have increased massively over the last decades, the globalisation of banking activities has meant that international capital flows have accelerated and progressed even more. In this context, providing world investors with the largest and most liquid market – the Treasury Bond market – has become a major incentive for holding US Dollars. Interestingly, when Standard & Poor’s downgraded the credit rating of the US federal government from AAA to AA+ on 5 August 2011, the green back immediately appreciated! And the reason behind that surprising move? Negative prospects for the US are a source of anxiety, prompting investors to move to a safe place… the US Treasury Bond market! I

The Dollar’s supremacy: for how long? The huge and persistent twin deficits in the US – trade and budget – bring into question the Dollar’s supremacy. However it seems there is no immediate alternative. Why? First, considering the volume of international transactions today, technically there is no real substitute. The US has flooded the world with massive amounts of US Dollars, thus shifting to another reserve currency would generate such a shock that it cannot be seen as an option in the near


This evolution is partly due to the appreciation of the Euro against the US Dollar.

3 In particular the currencies of China, Brazil, Russia, India, Mexico, Turkey and South Africa. See Elvis Picardo, ‘Seven Emerging Currencies Challenging the Forex Hierarchy’, http://www.investopedia.com/articles/forex/061314/seven-emerging-currencies-challenging-forex-hierarchy.asp

info - november / december - 33


The global FX markets and London’s position Stéphane Eyraud, CEO of Chappuis Halder & Cie, explains how global foreign exchange markets work and why London takes the lead The foreign exchange market at a glance In a typical foreign exchange (FX) transaction, a party purchases some quantity of one currency by paying with some quantity of another currency. The FX market assists international trade and investments by enabling such currency conversions to allow businesses and individuals to buy and sell goods and services globally. In the longer term, the rate at which the conversion takes place is an assessment of the relative strengths of the economies and interest rate differentials between two currencies. In the shorter term, rates can also be the result of speculation and arbitrage by market participants. The FX market is global, decentralised and trading mostly occurs ‘Over the Counter’ (OTC, meaning currencies are traded via a dealer network) but also on centralised exchange place (EUREX, etc.). The main market places for FX transactions are London, New York, Tokyo, Singapore and Hong Kong. London as the epicentre of the global FX market The FX market has become, by far, the largest financial market in the world by size and actors. Annual currency trading went from $0.006 quadrillion in 1970 to $1.950 quadrillion in 2013, increasing by four times since 2000 ($0.547 quadrillion in 2000). London has emerged as the epicentre of the currency CURRENCY TRADES

markets over New York or Tokyo for two main reasons: • Its convenient geographical location allows it to operate during Asian, Pacific and US market hours. • In the 1980s, British banks began lending Dollars as an alternative to Pounds, so London became the key centre in the Eurodollar market. This expansion of the offshore market was fuelled by US companies borrowing offshore as globalisation unfolded and Euro markets becoming a lucrative and safe area to put excess liquidity for US investors. 34 - info - november / december

Though largely dematerialised and global, world foreign exchange trading is still dominated (in terms of size and sophistication) by London, as evidenced by its FX transactions volumes. In 2013 these were worth $800 trillion (40% of all world currency trades), compared to New York’s $400 trillion (19%) and Tokyo’s $126 trillion worth in 2013 (6%).

Global hub for clearing of FX transactions London’s global institutions bring large amounts of liquidity to the markets, an important factor behind London’s leading position in the FX market. Average daily FX turnover in London is approaching $2 trillion, corresponding to about 40% of the global market. Global hub for bullion market London is by far the largest global centre for OTC transactions followed by New York, Zurich and Tokyo. In 2013, the daily average amount of gold cleared through London was 21.95 million ounces with an average daily value of $31 billion. The corresponding daily average amount of silver cleared through London was 136.5 million ounces with an average daily value of $3.3 billion (these are net figures; the gross turnover of gold and silver is expected to be considerably higher). Global hub for offshore Renminbi? China, the world’s second-biggest economy, is fostering the development of its currency in international trade and is expected to further liberalise the Renminbi (RMB) to become a world currency alongside the US Dollar and Euro in the next few years. London is competing with New York, Paris and other financial centres to be the top offshore RMB centre outside Asia. George Osborne, Chancellor of the Exchequer, has said ‘By acting as a bridge between East and West, we can secure London’s position as the leading financial centre in the world in the years to come. We are not prepared to let anyone steal the march.’ Thus, pushed by political will and supported by commercial appetite, London has become the biggest offshore centre for RMB payments (accounting for 62% of RMB trading conducted outside China and Hong Kong). The China Construction Bank (CCB), the country’s second-biggest lender, was appointed the clearing bank for Renminbi (RMB) trades in London in June 2014, via the launch of a new payment system called China International Payment System (CIPS), available for crossborder RMB settlement. It followed the Bank of England’s

focus agreement in March with the People’s Bank of China to make London a hub for Chinese currency dealing. CCB’s arrival will decrease the risk of making overseas payment in RMB, and will make it easier for companies to invest in China’s onshore capital market. It might also attract Chinese companies likely to invest in Europe. As George Osborne has said: ‘Chinese bonds are now issued in Britain, Chinese assets are being managed here and now the first Chinese clearing bank outside Asia is opening in London.’ London’s ambition to become the Western hub for the offshore RMB market makes the eventual migration of the deliverable Chinese Hong Kong market to London likely in the long run, thanks to its competitive advantages: the City is the world’s largest

foreign-exchange trading centre and has the top financial expertise worldwide, as well as a competitive business environment and market depth. Moreover, London has a huge time zone advantage allowing the city to trade both with Asia and the US in the course of a normal business day. This geographical position allows the city to be much more global than its two main rivals, Hong Kong and New York. Hong Kong might struggle to match the international reach of the London financial market, and its political ties with Beijing might constrict it rather than be an advantage. I Contact: seyraud@chappuishalder.com www.chappuishalder.com

Overview of RMB internationalisation What is RMB internationalisation?

China sees Renminbi (RMB) internationalisation in three steps: as currency for settlement, investment and ultimately as a foreign exchange reserve asset. Geographically, it started from peripheralisation with hard cash circulation around neighbouring countries (Hong Kong, Macau, Myanmar, Nepal, etc), then it successfully completed regionalisation after announcing that banks in Hong Kong, Mainland China and ASEAN countries could participate in China’s pilot scheme of RMB cross border settlement, and is moving towards globalisation and fully convertible RMB.

Where is it going?

Volume of RMB settlement in Hong Kong has totalised 3.8 trillion in 2013. RMB deposits in Hong Kong were 920 billion in February 2014. Following China’s opening of its bond market to foreign banks holding RMB in 2010, China further boosted the RMB offshore investment market by improving measures in Foreign Direct Investment, RMB Qualified Foreign Institutional Investors, RMB offshore bond and equity offerings. China hopes to vitalise the offshore RMB pool and to offer an effective RMB flow-back mechanism. The goal is to increase RMB holdings by foreign enterprises and financial institutions in order to boost global demand for the currency and enhance its potential as a foreign exchange reserve asset.

Why is it important to China and why accelerate now?

RMB internationalisation is an inevitable outcome as China plays an increasingly important role on the world economic and political stage. On the domestic side it became crucially important to China and the ruling Communist Party in the period when capital flowed out of the country to inflation-proof and increment wealth. The authorities started to accelerate the RMB internationalisation process in 2010, as domestic wealth began accumulating.

What is in the way?

Although the RMB internationalisation process has been successful thus far, economists anticipate that it still might take China at least 10 years to complete it. RMB is not expected to challenge the Dollar unless China floats its currency and eases capital controls. As the flexibility of RMB increases, China will further open up its capital account and have market determined interest rate. China is actively reforming the capital market, stimulating domestic consumption and encouraging industrial upgrade to prepare for a less protective currency environment.

How was RMB being offshored previously?

The RMB became deliverable offshore in Hong Kong (primary market) in July 2010, pushing forward the internationalisation of the Yuan. In Hong Kong, RMB can be freely transferred between accounts and can be freely delivered via investment products (once a settlement account has been created). The Chinese Hong Kong (CNH) market is separate from the Onshore Chinese Yuan (CNY) market, with different rate designs. Today, the offshore non-deliverable forwards market in Yuan is losing ground to the CNH market, although it is unlikely to disappear completely until the Yuan is fully convertible. The spread between offshore and onshore Yuan widened to its highest levels recently as investors fled to safe-haven assets like gold and the US debt; an indication of how difficult it is for the CNH market to be seen as durable. info - november / december - 35


The rise of the cashless economy 1987 saw the introduction in the UK of the first debit card using a magnetic strip. Less than three decades later, there have been giant leaps in the way we spend, bank and transfer our money. Even our very understanding of ‘money’ and ‘currency’ is being challenged. Jonathan Snade, Corporate Law Partner at Thomas Eggar LLP looks at what have been the main developments and drivers Technological advancements Undoubtedly the advent of the Internet and other technological developments have enabled individuals, businesses and financial institutions to rethink their perception of payments, currency and banking. Nationwide Building Society was the first UK banking institution to introduce Internet banking in 1997. According to the Office of National Statistics, in 2013, 50% of UK adults accessed their bank accounts online. With all the major banks now offering such facilities and the increase in people owning personal computers, laptops and tablets, the upwards trend in numbers of users is likely to continue. Security concerns While debit cards presented a huge opportunity in convenience when compared to cheques or cash, it was widely accepted that there were also opportunities for fraud and misuse. The early debit cards were protected by holograms and magnetic strips in an effort to combat card forgery, together with a signature specimen to be checked and verified by sales assistants. However, cards and signatures were still relatively easy to copy. And so arrived Chip and PIN technology – embraced by France as early as 1990. The microprocessors contained in the chip protect against card forgery and the PIN guards against card misuse. I remember eating at a restaurant in Paris’s Latin Quarter with friends when I was a student at Paris I in 1997 and being amazed by this technological advancement when the time came to pay the bill. However the UK had to wait until 2003 for Chip and PIN to be trialled, with roll-out only coming in 2006. User expectations Though security issues have been shaping the electronic and digital payments landscape, the need for convenience for users has also been a key driver. Technology has therefore not only enabled developments in the digital commerce space but it has also reacted to these demands. Interestingly, despite the UK being slower to respond to Chip and PIN than France, it has more speedily embraced the easy-to-use ‘contactless’ card technology than its neighbour, with contactless cards having been used in the UK since 2007. 36 - info - november / december

Further, with the meteoric rise in smart phones globally, it has not taken long for banks and app developers to respond to the ‘now’ culture. For example, here we can think of mobile banking services and ‘ecash’ payment apps which many of us now use to buy our coffee on the way to the office each morning, or Apple’s Touch ID via which we can authorise payment for purchasing music using a thumbprint. A move to currency decentralisation More recently, digital currencies have been challenging our very definition of ‘money’ and our understanding of ‘currency’. Digital currencies are currencies which, unlike fiat currencies, only exist in digital form and therefore include e-gold, Rand and Kenya’s M-Pesa, as well as ‘cryptocurrencies’ such as Bitcoin, Litecoin and Peercoin (to name but a few). Cryptocurrencies are a form of digital currency that operate outside of the centralised banking system, relying instead on distributed networks and shared transaction ledgers. The combination of technological advancements, costs advantages and desire for anonymity of use have fuelled a rise in the popularity of cryptocurrencies and therefore growth in their underlying infrastructure. For example, there has been a demand for digital wallet apps in which to store Bitcoins and even ‘Bitcoin ATMs’. Increasingly, merchants are accepting Bitcoins as payment for goods and services, including a clutch of London pubs. However, given concerns from a regulatory and money-laundering perspective, as well as the resistance to cryptocurrencies by certain economies globally (Iceland and Bolivia in particular have fully or partially prohibited Bitcoins from a legal point of view), it will be interesting to monitor developments in Europe in the short to medium term. Looking ahead… What is clear is that, as the connectivity capabilities of our mobile and other devices increase, so too will the ways in which we will be able to transact commercially as consumers and with our peers. However the speed of technological developments is presenting a challenge for law makers and the regulators who are oftentimes struggling to keep up with the pace of innovation. I

Digital currencies:

the good, the bad and the ugly


Geraldine Fabre, a corporate lawyer at Russell-Cooke LLP, examines all sides of the digital coin


n August 2014, Chancellor George Osborne announced a new initiative that will explore the potential role of cryptocurrencies, such as Bitcoins, in Britain’s economy, and commissioned the Treasury to produce a programme of work on cryptocurrencies, examining their potential risks and benefits. London is one of the biggest financial hubs in the world and is by far the largest financial centre in Europe. Venture capital firms around the world are prepared to invest in Bitcoin startups with record levels of financing, betting that some of these companies will become the Google and Facebook of the financial sector, and revolutionise the way in which financial transactions work. Meanwhile, more businesses seem to be prepared to accept Bitcoins as a payment method for the purchase of goods or services (although few retailers in the EU have put systems into place to accept them as payment). Divorce and succession lawyers also worry about assets being hidden in Bitcoins as a mean to reduce a spouse or family’s wealth, or to transfer funds to an offshore destination. A substantial increase in fraud, theft and tax evasion has been noted when it comes to realising or selling a digital currency back into fiat money – that is currency which derives its value from central banks, government regulation or law, or commodity monies such as gold or silver. Cryptocurrencies are becoming popular enough that regulators around the world are considering the need to create rules that can encourage their growth and protect customers whilst limiting illegal activity. Digital monies are often perceived as a fast-paying tool, cheaper than a credit or debit card and potentially providing greater privacy protection (there is no disclosure of important data to initiate the transaction). However, virtual monies are not stable in value, are susceptible to speculation and manipulation, and the confidentiality of their users opens the door to illicit and illegal activities, which could have a negative

impact on the use of Bitcoins for fundraising (such as crowd funding) or other investment activities.

Uncharted legal territory The broader issue seem to be (a) the uncharted legal territory surrounding digital currencies and (b) the fact that the treatment of cryptocurrencies is different from one country to another. Some countries such as China or Japan consider it illegal to transact using digital monies, citing concerns about money laundering amongst other reasons. Others, such as the US, allow these types of transactions to take place but consider Bitcoins not as a currency but rather as a payment mechanism and an asset or a commodity (not as income in their own right). In the UK, the legislative landscape makes the issue of electronic money (real money) a criminal offence, unless authorised by the Financial Conduct Authority (FCA). However, the general consensus is that cryptocurrencies such as Bitcoins are not created against real monies. They are the product of ‘computation work’ of a collective of software programmers or ‘miners’: upon being issued, they are not a claim for value against an identified issuer (such as a central bank) for which a receipt of funds is received. Bitcoins may subsequently be traded for money, and then possibly exchanged against the purchase of low value goods for example, or even refunded, but they still do not represent a money claim on an identifiable issuer. There are also legal uncertainties in the UK as to the applicability of the protection afforded by the laws on Internet payment, such as those regulating and supervising payment service providers, to the exchange of Bitcoins. The protection of consumer rights in relation to refund processing when goods are purchased by a consumer with Bitcoins is also potentially reduced. The value of Bitcoins is rather volatile and in transactions using Bitcoins, the relevant merchant’s refund policies should be reviewed carefully. Not all merchants info - november / december - 37

focus may convert the Bitcoins consumers (and governments Venture capital firms around immediately into Sterling themselves) from the plagues the world are prepared to value or accept a refund in the of cybercrime, tax evasion, Sterling value at the time of the loss of value due to drop in invest in Bitcoin startups... purchase. demand or manipulation of betting that some of these The different tax treatments the currency possibly due to companies will become the of crypto currencies around collusion of holders of large Google and Facebook of the the world raises even more amounts of Bitcoins. The FCA financial sector confusion. In the UK, the recently launched a project creation and trading of Bitcoins called ‘Project Innovate’ with and other virtual currencies is currently exempt from the aim of ensuring ‘positive developments’ in the VAT on the basis that it is a payment service or a digital tech and financial sector such as cryptocurrencies asset with monetary value, rather than a currency. are supported in the UK. The European Banking When it comes to determining liability for income Regulator is also due to appoint an EU task force to tax, capital gains tax or corporation tax, consideration advise as to whether or not ‘virtual currencies’ should will include, among other things, an assessment be regulated in the EU. Although it may be premature of both the activity and the parties involved in the to make a definitive statement on cryptocurrencies’ transaction. lifespan, they are showing a clear potential to establish themselves as a rival payment system to traditional The future forms such as bank wires and credit cards, and many The future of digital currencies will depend on how entrepreneurs and their investors remain positive of central banks and governments regulate them to protect the Bitcoin ecosystem and its potential. I C RY P T O C U R R E N C I E S

Good prospects for securing the Wild West New technology inevitably reshapes society. Nicolas T. Courtois, a former crypto engineer in the smart card industry and now a Senior Lecturer at University College London in the areas of information security, applied cryptography and computer security and payment technology looks at questions of payment security in the new financial landscape


ecurity in the traditional sense is all about the physical dimension with bank vaults, safes and armed guards. But increasingly it is about new technology, such as cryptography or smart cards. Technical innovation not only brings better security and cost reduction, but is also crucial for adapting to the changing threat landscape. As new threats emerge, security is a race against time. Money goes where it can be safely stored, value is created on secure and trustworthy platforms, which connect people and enable business activity. Enter the geek money – Bitcoin, in existence since 2009, and proof that whatever people accept as money, is money. Bitcoin allows people to send monetary units directly to each other without holding deposits at a bank through the magic of cryptography. It makes middlemen such as banks less relevant, and 38 - info - november / december

the monopoly of traditional banks on money and payment is now being eroded. However is Bitcoin good enough, or secure enough?

Security and trust Money, as we understand it, is about security and trust. Governments with their armies stand behind their money. The cost of running the monetary systems that underpin our economy is incredibly high, and governments spend huge amounts on policing fraud and crime. As a result, the counterfeit rates involving coins and paper money are actually very low – roughly 1,000 times smaller than the rates of fraud that occur with all modern payment methods, for example bank card fraud such as skimming and credit card fraud. While Bitcoin cannot ever hope to be as secure as paper money, its adoption would result in a dramatic

focus C RY P T O C U R R E N C I E S

reduction in the cost of running a monetary system. But as an alternative to credit cards and PayPal, we may have to accept that cheaper means less secure. Credit card companies spend billions on security and it is questionable whether Bitcoin technology would have the same level of security without all this effort. Substantial levels of fraud are expected and are likely to be exacerbated by Bitcoin’s current lack of legal protection. Traditional money has benefited from strong legal protection for centuries, and credit cards are also protected by specific laws such as the UK Fraud Act of 2006, but Bitcoin fraud could be hard to deter and harder to prosecute.

individuals. It requires different people or different devices to authorise money transfer, and if one of the devices is lost or stolen, money CAN be transferred to another location without requiring the backup of the keys stored on the lost device. Multisig solutions are absolutely revolutionary and take Bitcoin security to the next level. They offer the sort of robustness against theft that simply could not be achieved in traditional finance without expensive infrastructure underpinned by governments, legal and security systems. Bitcoin could have a lot to offer if we dare to take it on.

Facing up to the issues that Bitcoin exposes On the other side of the Bitcoin Yet even cryptography and Multisig do not resolve Many users store their Bitcoins in the form of all the security problems. Bitcoin has greatly raised confidential cryptographic keys on their mobile awareness of cybersecurity and the need to improve phones or computers, but this greatly increases the it. Academic research has criticised current Bitcoin security risk. With our poor levels software for not using state-of-theof cybersecurity, Bitcoin makes art public key cryptography ahead of Mu ltisig solutions hacker skills convertible into ready future attacks. Cryptography almost are absolutely cash. However, investigators are always gets compromised, sooner or revolutionar y and also adopting new technology later, and while Bitcoin cryptography take Bitcoi n secu rit y and Bitcoin transactions are is not going to be broken overnight, to the next level infinitely more traceable than cash it has to be upgraded for future movements. The risks associated security. with storing money on their computing devices has led There are also other major issues. Current bitcoin to some Bitcoiners keeping their Bitcoin on exchanges. has perverse incentives: the power of miners who are Some exchanges, such Canadian Satoshi Vault or City expected to verify transactions of other people has of London Coinfloor, claim that they are as regulated, now concentrated in too few hands, and there are trustworthy and secure as a bank. However most no monetary incentives to run more network nodes. exchanges still have shoddy standards and many have Various reforms have been proposed to redistribute proven to be unreliable businesses that should never the Bitcoin system. We need to go back to more have been allowed to operate in the financial services democratic and cooperative systems with a wider sector. A large percentage – estimated to be up to 10% base of independent stakeholders that could also be a of all Bitcoin in circulation – has already been lost or model for the financial industry at large. stolen, primarily when the Japanese Bitcoin exchange Bitcoin teaches us a lot about security and allows MtGox collapsed earlier in 2014, but also in countless for the building of more robust financial systems than smaller incidents. Bitcoiners have learned about ever before. It creates a real need for potent solutions. security and trust the hard way. While banks can tolerate a certain level of fraud and reverse problematic transactions, Bitcoin transactions The new frontier of security innovation are irreversible, which ultimately forces people to All the security scandals have led to the development be more careful. Bitcoin has created a new sort of of new technology solutions specific to Bitcoin, technology ecosystem where security is more important which promise to solve these problems in highly and more visible than ever. Security becomes more of innovative ways. Bitcoin has already adopted a new a verifiable property. Bitcoin is allowing the security method of storing money at several locations at the business to thrive, innovate and sell these innovations same time, which means that a compromise at one to customers. Customers, in turn, will have more location would not result in a loss. This technology informed opinions on security, be more aware of the is called Multisig and it is already used internally by need to be cautious and understand that they will have companies such as Coinfloor, albeit not yet by many to pay for additional security solutions. I info - november / december - 39

focus Part two: How companies use currencies

Managing foreign currency risk David Stebbings, Head of Treasury Advisory and Sandeep Goenka, Treasury Senior Manager at PwC consider how businesses manage the risk associated with having to deal with different currencies


ompanies of all sizes are increasingly having to do business in a variety of currencies as they look for growth in new markets and procure more goods and services internationally. Businesses in France and the UK are affected not only by exchange rate movements between the Euro and British Pound on their crossChannel transactions but also by movements in other currencies in relation to overseas suppliers, customers and indirectly their competitors. Managing currency risk is important as business profits, cash flows, asset values and competitive position can be affected by changes in exchange rates. Whilst the volatility of such changes varies over time as is noted below, the point remains that exchange rate movements are not predictable and, therefore, need to be understood, monitored and ultimately managed if the business is to flourish. The textbooks will tell you that currency exposure can be broken down into three categories: 1. Economic exposures arise from selecting markets

Source: Reuters with PwC Analysis

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and choosing office and factory locations plus the currency profile of your competitors; 2. Transaction exposures arise from generating revenues and incurring costs in various currencies; and 3. Translation exposures arising from the revaluation of foreign currency balances (cash, receivables, payables, etc.) in accordance with accounting rules. They will then state that the Board of Directors should set a simple but effective policy for managing risks and go on to talk about the multitude of financial instruments available from your bank to assist you in this task. However, there are several key steps that should be considered to make such a policy effective and in our experience too many businesses do not have the robust processes in place to achieve success. The first is to understand your risk. This can be more difficult than it appears given that: • extracting good quality information on actual and forecast flows and assets by currency from internal financial systems is often challenging; • the economic (indirect) risks associated with competitor actions, the changing demand for products sold outside home markets and the pressure on local costs, when exchange rates move, can be hard to quantify; and • each country, particularly in emerging markets, has its own regulatory constraints which may inhibit the conversion and movement of currency.


Once you understand your key flows and assets time to make the business actions noted above or by currency, the second stage is to understand your protects against immediate covenant breaches. There business sensitivity to currency are also restrictions in the risk. How do changes in use of financial instruments, For... growi ng busi nesses exchange rates affect your particularly in emerging i ncreasi ng thei r global income statement and hence markets, and where hedging is reach, the [cu rrency risk] your tax charge, cashflows, key possible there is a cost whether position may be more financial/ regulatory ratios, it be the spread on a forward bank covenants, asset values contract or the upfront cost of complex, demand i ng senior and market position? This work an option. A further potential management focus and will inform you as to where you problem with the use of ef fective pol icy, reporti ng have natural hedges, where you financial instruments is that and process have major sensitivities and the accounting treatment may what the exchange rates are, not match the economic reality below or above which you suffer business pain and have – a subject that is discussed by Leo Malkin and John to take action. Glasby in the article on page 42. The third task is to understand what actions Examples of the use of financial instruments are you can take in adjusting your business model to many. Clothing retailers use them to protect their mitigate those strategic risks. Your freedom cost of goods in US Dollars from the Far East to decide what action to take and when against Euro or Pound sales on a seasonal to take it will depend upon your basis. For the next season they will look competitive position in your chosen to adjust prices or supplier costs to market. However, examples of reflect new exchange rates subject actions include amending prices to competitive pressures. Airlines or changing suppliers from one similarly hedge the currency cost of currency to another in the near jet fuel in US Dollars against local term or even moving the country currency ticket sales in the short term of your operations if you believe but will look to amend ticket prices the exchange rate change to be more in the medium term to reflect ongoing permanent. currency effects on jet fuel costs. Only when you have gone through these Of course for many businesses currency steps should you turn to financial instruments risk will be a relatively easy issue to manage, (for example, forward contracts or currency options) either they don’t have any or it is simple to see and with banks to hedge the risk. It is important to keep they can change prices or their cost base easily to such hedging simple (could you describe what you are accommodate currency rate changes. For others, doing to an informed person in 3o seconds?) and to particularly growing businesses increasing their understand that it can never be the perfect solution. global reach, the position may be more complex, Hedging does not eliminate underlying risk; it provides demanding senior management focus and effective certainty of cash flows in the short term which buys policy, reporting and process. I

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Foreign currencies and accounting considerations Leo Malkin, partner in Corporate Audit and John Glasby, senior manager in Corporate Audit at Crowe Clark Whitehill consider the challenges and consequences of foreign currency accounting and how businesses can address them

of the payment in February can create a mismatch. This mismatch is recorded in the income statement in February as a gain or loss on foreign currency, depending on which way the currency may have moved.


or any company with overseas interests, clients or suppliers, accounting for the impact of foreign currency can be challenging as the business and economic impact does not always follow the accounting requirements. From the multi-national enterprise with complex hedging and forward purchase arrangements, to the smaller owner-managed business paying a foreign currency invoice, the consequence of the accounting for these transactions can have a significant impact on reported results. We will consider the accounting issues, accounting mitigation and some practical problems.

Accounting for the effects of changing FX rates In considering the accounting under International Financial Reporting Standards (IFRS), which is similar to both British and French ‘Generally Accepted Accounting Practice’, accounting for the effects of changes in foreign exchange rates is documented in IAS 21.1 The rules exist to ensure that accounting entries made in relation to foreign currency transactions are balanced, and this can result in a realised gain or loss for the business. A simple example is in relation to accounting for an invoice for goods received denominated in a foreign currency in January with subsequent payment of that invoice in February. In a cash business there would be no overall impact, but where accrual accounting is used, the rate of exchange to the home currency on the date of the invoice in January and the rate of exchange on the date

Accounting for overseas subsidiaries Another aspect of foreign currency accounting that can be challenging is where a business operates with a subsidiary based overseas and has to bring that entity into the group consolidated financial statements. IAS 21 requires that the assets and liabilities of the overseas subsidiary are translated into the home currency at the rate prevailing at the balance sheet date. However, it also requires that income and expenses are translated at the exchange rate at the date of the transaction. For many groups, this is a level of detail that the individual companies simply do not hold, and would be highly impractical to reconstruct. In practice, where this information is not available, an average exchange rate can be used for the period. The difference between closing rates and actual/average rates creates a further mismatch. Unlike the entity impact detailed earlier, the resulting mismatch is not recorded in the income statement (or profit and loss) but is recorded in other comprehensive income and therefore does not impact on the group’s overall results for the year. This cumulative movement in foreign exchange is recognised in other comprehensive income until the date of disposal of that entity. This means that the foreign exchange impact is not incurred in the income statement until a long time after the transaction has occurred. A third mismatch, arising on the retranslation at each balance sheet date of the original investment in the capital of an overseas subsidiary, is treated differently again, being taken directly as a cumulative movement through reserves. Mitigating the FX impact So how can a business attempt to mitigate these

International Accounting Standards. IAS 21 The Effects of Changes in Foreign Exchange Rates outlines how to account for foreign currency transactions and operations in financial statements, and also how to translate financial statements into a presentation currency. http://www.iasplus.com/en-gb/standards/ias/ias21 1

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impacts? In the previous article by David Stebbings and Sandeep Goenka, there were several key steps outlined which management should consider. After consideration of these steps, larger businesses will often employ the use of forward currency purchase contracts or options. However, forward currency purchase contracts and options by themselves can introduce an additional level of accounting complexity under IFRS, as they are considered to be financial instruments. As such, they must be included at their fair value at the date of measurement and any resulting gain or loss is included in the income statement. Forward contracts and options can in some circumstances become more effective for a business when they are treated as part of a hedging arrangement. Where forward currencies have been purchased in advance of a quantifiable and expected foreign currency liability, the gain or loss on this contract could be recognised in other comprehensive income rather than in the income statement. Practically, the considerations in relation to accounting for whether or not an item could be treated

in such a manner are complex. While almost all large businesses apply hedge accounting to some degree in their operations, it is an area that is not often considered by smaller businesses. This is due in part to the additional, and some consider excessive, complications and administrative expenses in the understanding and application of such arrangements. These are perceived to considerably outweigh any benefit. The upcoming accounting standard IFRS 9 – Financial Instruments attempts to address these complications by introducing a principle-based requirement rather than the current, strictly rule-based requirements, but this area remains challenging and these changes will not come into force until 2018 at the earliest. Foreign currency matters impact the day-to-day accounting for transactions and therefore the ongoing results of that business. Failure to consider the impact of currency movements or addressing them incorrectly could lead to unbudgeted gains or losses, additional taxation burdens and issues with covenants from lenders. With some basic measures, these surprises can be mostly avoided. I

Home buying and currency profits – the luck of the English Property may be location, location, location, but when it comes to financing, timing is everything. Nowhere has this been more evident for overseas home buyers than in the currency aspects of their transactions. In this sense, London homebuyers have certainly shared in the proverbial ‘luck of the English’ (as opposed to the Irish!). A European buyer of London property in 2008 could have sold his Euros at 1.04 to the Pound in late 2008 and then sat back and watched gains of 3.3% as his Pounds strengthened to 1.26 against the Euro. If he had used a 50% mortgage to buy his property the currency gains alone would have been magnified to over 6% a year. And this is not just a Pound versus Euro story. The luck of the English has extended to a whole basket of other major currencies. The Pound has gained by 2.7% per annum against the US Dollar for the last six years. Even against the mighty Swiss Franc the Pound has outperformed by 5.3% a year since 2011. Most recently the great wave of currency appreciation

in London property has come from the emerging markets. This is where the picture and the returns start to get really interesting. Since 2011 the Pound has risen by 14% per year against the Brazilian Real. Since 2013 the gains are 12% per year against the Australian Dollar. Geopolitics seems to be helping London too and since early 2013 the Pound has gained19% per year against the Rouble. Meanwhile, some analysts are saying that there is still room for further gains. In September, Goldman Sachs noted that despite recent strength this year the Pound remains 8% below its historical average. All this shows why a mortgage is not always necessary in London home buying to obtain exceptional returns. Of course, when considering any significant transfer of funds from overseas it is always recommended that you obtain the best professional advice regarding not only currency but also personal tax and UK inheritance implications. I Marie-Cécile Boulle, Director of Boulle International, Residential Property Consultancy

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corporate interviews on currency risk To find out how different businesses deal with currency issues and risks, INFO asked the following questions of a large and a mid-sized company:

1 Which countries do you do business in and what are the key currencies of your cash flows? 2 What are the key currency risks facing your business and how do they affect your business performance? 3 How do you expect currency risk to impact your business plans over the medium term? 4 How do you monitor, analyse and mitigate currency risk? Arnaud Hebert, Finance Director, Renault UK

1 We sell cars and vans in the UK and Ireland. We also manage the relationship with our importers in Malta and Cyprus. Our key currencies in terms of cash flow are Pounds and Euros. 2 Our revenues are exposed to Pounds (UK) and Euros (Ireland and importers). From a consolidated point of view inside the Renault Group we are also exposed to currencies of our sourcing countries. In our case, the main currency involved is the Turkish Lira. Our consolidated accounts are published in Euros. As a result of our financial results being published in Euros, any strengthening of British Pound against Euro has a positive impact on our profitability. Any devaluation of our sourcing country currencies against Euro has a positive impact on our financial results. 3 The evolution of Foreign Exchange is highly

unpredictable on the medium/long term (the past five or six years are a good example of that). Even if we use internal scenarii to cost our budgets or our mid-term plans, these assumptions are updated on a regular basis (at least twice a year). This process is shared between Renault and Nissan inside the Group Alliance. 4 The currency risk is managed at Group level (the exposure of revenues and costs towards any currency is appreciated on a global level). As far as a commercial subsidiary is concerned there is no specific policy to mitigate risks. However, we monitor Foreign Exchange on a monthly basis in our monthly closing process. We also share our vision of Foreign Exchange forecast with corporate financial teams at least twice a year (mid-term plan and budget process) taking into account the latest financial/geopolitical information available and the latest banking/analyst consensus. I

François Golicheff, Chief Executive, CPI UK


CPI as a group operates across Europe – France, Germany, the UK, Spain, the Netherlands and the Czech Republic – and uses the Euro as its key currency. However, CPI UK’s activities are 90% UK based, although it does export to some English-speaking territories such as the US, Singapore and Australia, and its operations are based in Pound Sterling. CPI UK generates about 35% of the group’s turnover and 65% of its operating cashflow (EBITDA). 2 Currency has a significant impact, both positive and negative. Five years ago, the Pound and the Euro were quite close to parity (£1 to €1.04), compared to around £1 to €1.28 now. A strong Pound brings gains when UK profits and cashflow are converted into Euros, which is very good for the Group. It also means that the raw materials we have to import are cheaper. However, a stronger Pound is more of a risk than a benefit because it makes our prices relatively expensive and we start suffering against competition from countries such as Spain and Italy. When the Pound gets to a certain level 44 - info - november / december

– above say €1.15 – our UK customers will find it cheaper to get their printing done abroad, despite the cost of logistics. So to maintain market share and compete against other European printers, I have to reduce my margins and from time to time, that reduction has to be absorbed by significant restructuring to cut costs. 3 I don’t see currency risk changing in the next two to three years because of the economic situation in Europe. The Pound is unlikely to drop suddenly against the Euro. 4 One way of mitigating the currency risk is to adopt a group strategy, adapting our operations to utilise our various factories across Europe for certain contracts. For example, we can use factories in the Czech Republic or Spain, where labour costs are relatively low, for low margin products. Thus through better synergy we can benefit from the weak Euro to protect our group market share. Another way is through technology. Having invested in digital we are able to print on demand – less and more often rather than in huge quantities – and have a quicker turnaround, which makes us a more attractive proposition for our customers compared to printers abroad. I Interviews by KF


The corporate approach to currency hedging Xavier Gallant, Head of Corporate FX Solutions, Northern Europe ex-Benelux, at BNP Paribas looks at the hedging tools businesses might use


mongst the types of risks with which international companies deal, currency risk is the one requiring the most management. Indeed, Foreign Exchange affects all aspects of corporate financials: cash flows, earnings, assets and liabilities. A variety of instruments, from the simplest to the most advanced, can be used by treasurers to hedge their FX exposures. The choice of instruments and hedge maturity will be made after a careful consideration of the reliability of the company cash flow forecasts, the cost of hedging forward and any potential accounting implications these might have. This last point is often mentioned by treasurers as a key driver in their hedging decisions; their main priority being to avoid increasing earnings volatility, while hedging economic risks. The financial crisis changed corporates’ approach to currency hedging in an environment where cash flows have been more difficult to predict. Corporates reduced both their hedging ratio, as well as the maturity of their hedges, using short-dated forwards. The layered forward approach (applying higher hedging ratios to short maturities) is also commonly used by treasurers as a simple variation on the forward hedging strategy, as it has the added benefit of reducing volatility. A growing number of corporates have included FX Options in their hedging toolbox. The extreme low volatility in the G10 world (and in Emerging Markets relative to historical levels) is contributing

to making option premiums much cheaper for treasurers. FX Options have two key advantages for corporate treasurers: first, to reduce the volatility of cash flows attributable to FX and second, to manage the uncertainty of cash flow forecasts. In EUR/GBP for instance, the low volatility level has encouraged European exporters to the UK to hedge using options, especially as the levels of protection achieved were often better than their budgeted rates. Even though the majority of clients are static when hedging with options, some treasurers are dynamically managing their hedging portfolios, by monitoring the value of their options through the life of the hedge and restructuring their positions into forwards should the market move to more favourable levels. Emerging markets have become an area of concern for risk hedgers over the past year; options can be used in this area to improve hedge efficiency as they better capture the cyclicality of emerging market currencies (long appreciation periods followed by sharp depreciation). In this moving landscape, FX strategies must be reviewed regularly to ensure they fully capture the changing market dynamics over time. Treasurers must remain agile in order to fulfil their duty of reducing cash flow volatility in a constantly changing environment. I info - november / december - 45


How corporates seize market opportunities in Foreign Exchange Since 2008, the FX landscape and risk management have changed. Corporate treasurers still have to juggle with a large range of risks such as liquidity, funding currency, emerging markets, but they now also need to monitor their counterparty risk, regulatory needs and the evolving accounting constraints, as Severine Priser, Head of Corporate FX to France-BelgiumLuxembourg at Morgan Stanley explains


y being more attuned to such risks, clients are acting more dynamically on rapid moves in the market. Over the last few weeks, the recent US Dollar rally has been an opportunity for European exporters to hedge their US Dollar revenues by buying Euros at a two-year low. The strategy on products chosen but also the approach taken on tactical execution in such a fastmoving market is a key factor of success.

some treasurers will use both the rally in spot but also the pickup in volatility.

By being tactical, corporate teams average their FX rates and diversify their hedging program. Intraday signals on news, liquidity and technical points help to accompany rallies and for these teams to seize favorable moves. Watching the calendar news and implementing a split execution between spots, forwards and options allows them to seize market opportunities. By using options, treasurers can seize a current low Aside from economic news and pure technical volatility environment and buy hedging vanilla points, watching correlations between currencies and products at a lower price. In G10 currencies, some other assets, such as Credit Default Swap, Interest one-year options, which allow Rates and Commodities, is protection in case the Euro is also an interesting way to T he strateg y on products getting 5% higher than spot, are implement a tactical approach chosen but also the around 50% cheaper than two and better anticipate potential approach taken on years ago. market moves. As an example, tactical execution i n such In this environment, with the US being dependent a fast-mov i ng market is a treasurers may consider a wider on energy imports, a rise in key factor of success use of options for a long-term oil prices may push the US tenure, in case volatility and Dollar lower against the Euro. uncertainty come back. For emerging market currencies, Depending on the context, as a relative-value approach, where the cost of holding a position over a period of any pressure on peripheral countries of the Eurozone time is usually high, a lower volatility environment is could get the Euro down against the Pound and US an opportunity to hedge earnings over several years. Dollar, which is what we saw in summer 2010 when the On the contrary, some corporates are using any Greek government-debt crisis started. More recently, rapid upswing in volatility to trade products that need the accumulation of positive news on the US economy high volatility and low spot. This allows them to enter over summer 2014 gave the market confidence about into strategies where strike is improved but protection the 2015 economic growth prospects for the US, driving limited. Indeed, we can observe that even if accounting the currency higher against the Pound and Euro, and is a relevant factor in choosing hedging solutions, some getting investors and corporates more ‘data-driven’. companies indicate this does not dictate their hedging Hence, in a context of a potentially fast moving approach. Hence, with EUR/USD spot getting off 1.32 to market, treasurers are using both technical and tactical 1.25, representing around 5% drawdown in four weeks, strategy to diversify their hedging programme. I

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Who uses FX products and Why? A pharmaceutical company seeking to sell its products globally A corporate treasury department for a large pharmaceutical company supplying products globally has multiple income and payments streams in different currencies. This will likely result in a mismatch in its currency needs. It will need to convert these balances into other currencies, using FX swaps to avoid borrowing costs and to optimise interest earned. If the company is unable to hedge its costs effectively, the result will be higher overall business costs. It may also decide not to hedge, which in itself risks increasing volatility of earnings. A multinational engineering company with an order book in many currencies but a cost base in Euros A large multinational engineering company has a multi-year order book in multiple currencies, but a cost base in Euros. A large movement in currencies over the relevant period would place volatility into its earnings,

and it therefore needs to hedge as efficiently as possible. FX options will help facilitate this. In the absence of a cost-effective FX options market, companies may well reduce their hedging, and face the currency risk they were hoping to avoid, pushing up operational costs. A global company seeking to hedge cash flows and carry out overseas acquisitions A global corporation uses FX products to hedge its FX exposures, mostly receivables and costs linked to its underlying commercial activities. High transaction volumes are a result of daily monitoring of cash exposures – mitigated by using short-dated FX swaps to match long and short cash positions in various currencies. In addition, some of the corporate’s FX needs are linked to more strategic transactions such as acquisitions / disposals and some financing requirements – for example intercompany loans and capital injections in foreign currencies.

A pension fund invests globally but needs to convert various currency flows to a single balance every week A large pension fund manager investing globally has multiple cash flows in different currencies in various pension portfolios – flowing from redemptions, dividends, investments – and needs to be able to convert all the different currency flows into a single balance on a weekly basis. This allows the pension fund to undertake FX transactions to meet liabilities in different currencies as required through an efficient process. For positive balances, this also allows the pension fund manager to use the most attractive interest rates. Access to cost effective, short-dated FX swaps allows it to carry out this function for the benefit of its investors.Any increases in pension fund costs are ultimately passed on to the underlying funds, and hence reduce fund performance. I James Kemp, Managing Director, Global FX Division, Global Financial Markets Association

Opinions expressed in this article represent only the author’s view.

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Trading in Renminbi: reducing costs, managing risks For businesses that trade with China there are benefits to using Renmimbi. David Pavitt, Managing Director Global Foreign exchange at HSBC explains what these are and how the risks can be managed


here is currently a stark mismatch between China’s huge importance to global trade and the relatively small fraction of global payments that are made in Renminbi. In a recent HSBC survey of international companies conducting business in China,1 only 22% are using Renminbi for settlement. That discrepancy has its roots in the tight restrictions the Chinese government has, until relatively recently, placed on the use of the Renminbi outside China’s borders. However, the situation changed four years ago when the Chinese government introduced measures to allow Renminbi accounts to be held offshore, creating the opportunity for foreign businesses to conduct physical trades in the currency. Firms that do regular business with China, but have not explored the benefits of trading in Renminbi, could be missing out.

Save money, manage risk At a simple level, paying for goods in Renminbi saves money. We have seen that the difference between paying for imported goods in Dollars, versus paying for those goods in Renminbi can be as much as 5%.2 Trading in Renminbi can also help corporates to reduce their foreign exchange risks and to better manage their cash flows. While firms that still deal in US Dollars or Euros can hedge their exposure to the Renminbi using non-deliverable forward contracts (NDFCs), this method creates uncertainty. This is because NDFCs settle at the onshore rate, which on any given day could potentially be percentage points out of line with the offshore rate. As such, the attraction of the physical market is that corporates get much more certainty and control over their cash flow. There are also plenty of offshore options for firms looking to invest their surplus Renminbi. These include time deposits; ‘Dim Sum’ corporate and government bonds, in which yields are often higher than in Dollars; RFQII (Renminbi Qualified Foreign Institutional Investor) funds, which allow offshore 1. HSBC, RMB International Study 2014 (June 2014). 2. HSBC, RMB International Study 2014 (June 2014). 3. ‘Renminbi: the world’s next reserve currency’, HSBC, 4 May 2014.

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entities to invest in the onshore stock market; and Renminbi equities and the soon-to-be-operational Hong Kong / Shanghai Stock Connect. With this combination of benefits – managing risk, reducing costs and new opportunities – Renminbi creates more opportunities for businesses either operating in China, or dealing with Chinese companies.

No going back This is not to say that the switch to Renminbi trading is simple. For firms that have historically traded in US Dollars, there are a number of challenges to navigate. The accounting infrastructure will need to be altered, staff will need to be trained, new relationships built and new accounts opened. This may be one of the reasons why small firms, arguably better able than larger peers to experiment with individual transactions, have been leading the way with Renminbi invoicing and hedging. In time, however, the benefits are likely to outweigh the costs for small and large firms alike. A surprising number of businesses are reluctant to take the plunge because they are worried that upfront costs may be a wasted investment if China decides to reverse the Renminbi’s internationalisation. These fears are probably misplaced. China is not going to rush the internationalisation process. It will move gradually, feeling its way across a river, as the Chinese saying goes, one stepping stone at a time. But there should not be any going back. In fact, HSBC expects the Renminbi to be convertible in three to four years.3 Firms dealing with China should at least explore the new options that are available to them when managing their cash flows. I

Key facts from the HSBC Renminbi Survey 2014 • Out of 1,304 companies doing business in China surveyed by HSBC, 22% use Renminbi for crossborder settlement • 58% of companies are using Renminbi to reduce foreign exchange risks or costs.


The Financial Transaction Tax and its potential effect on currency and corporates As policy makers explore ways to restart economic growth, it is crucial that European companies are not handicapped by ill-advised taxes. In this context, the proposed financial transaction tax threatens to impose substantial costs on the end-users of financial markets, including companies, savers and governments, writes James Kemp, Managing Director, Global FX Division, the Global Financial Markets Association


ecent reports of discussions among the 11 EU member states driving the introduction of the new tax suggest foreign exchange (FX) transactions will not be part of the initial scope of the tax, rumoured to cover equities and certain as-yet-unidentified derivatives. However, uncertainty remains about the scope of the tax and it would be unwise to simply assume that FX will enjoy a permanent exemption. After all, the original Financial Transaction Tax (FTT) concept, the so-called ‘Tobin tax’, was a currency transactions tax. The European Commission has already recognised that including FX spot transactions (typically transactions which settle on the spot day – two business days from the trade date for FX) in the FTT would infringe the free movement of capital under the Treaty on the Functioning of the European Union. However its position seems less clear for other FX products such as FX forwards, NDFs (non-deliverable forwards), swaps and options (transactions which settle after the spot date). It is vital to understand that these products also play a key role in enabling participants to transact with certainty over the exchange rate, and therefore maintain the value of their transactions. They are typically used for issuing bonds to international investors, purchasing raw materials abroad, exporting goods overseas, or protecting the value of pension investments made in other currencies. Including FX products in the scope of any FTT would significantly raise costs for end-users active in international commerce. Analysis conducted by the Global Financial Markets Association (GFMA) shows that for EU corporates, FX transaction costs could rise by up to 700%. For example, analysis of the 2012 FX notional amounts traded by a corporate based in the tax zone shows that it would see its annual FX transactions costs rise from US$2.4m to US$20.4m. For an EU pension fund or fund manager, the potential impact is even greater. These users

could see their transaction costs rise by around 1,500% and possibly by as much as 4,700%. For a pension fund manager whose annual FX transaction costs with a single dealer are currently US$1.6m, transaction costs might exceed US$75m. Imposing an FTT on FX products may cause companies and investors to move away from hedging the risk of their international activities. This will increase earnings volatility and business risk, and act as a brake on investment, employment and economic growth. The views of these end users need to be heard.

Foreign exchange markets – at the heart of international commerce and investment FX constitutes the largest and most liquid financial market in the world. It allows governments, businesses, investors and individuals to convert one currency to another, and to secure a stable income despite volatility in currency markets. It forms the basis for international trade and supports the functioning of the global payments system. Corporates and asset managers regularly participate in the market for real operational needs, including import/ export payments, repatriation of earnings, cross-border investment, M&A activity, hedging currency of foreign assets and liabilities, and portfolio balancing and cash flow management. Central banks also utilise the FX markets to implement monetary policy, adjust currency reserves, influence exchange rates and handle FX transactions for government and public sector enterprises. According to the Bank for International Settlements 2013 survey, the FX market has a daily turnover volume of $5 trillion. Outside FX spot trading (38% of daily volume), 45% are traded as FX swaps, a further 12% as FX forwards, and 5% as options. All these products help end-users to manage currency fluctuations and invest internationally. I info - november / december - 49

Compiled by Katie Chadd

Cirque du Soleil’s KOOZA returns to the Royal Albert Hall ||| Described as ‘an adrenaline rush of acrobatics in a zany kingdom’, the awe-inspiring Cirque du Soleil returns to the Royal Albert Hall with its sensational show KOOZA, which combines the two circus traditions of spectacular acrobatic performance and the art of clowning. Set in an electrifying and exotic visual world full of surprises and thrills, KOOZA tells the story of ‘The Innocent’, a melancholy loner in search of his place in the world. His journey brings him into contact with panoply of contortionists, trapeze artists and tight-rope walkers, who highlight the physical demands of human performance in all its splendour and fragility. For the first time ever, the Royal Albert Hall will be providing behind-the-scenes access to this worldwide phenomenon, as part of an exclusive extra for those who book the VIP Box Experience. Guests will be treated to a pre-show guided tour of the iconic building with a tour or crew member, before the world class performers take to the stage. Post-show, guests will be invited backstage to meet some of the cast and be photographed with some of the artists who have just performed in the show. Commenting on this unique opportunity, Jasper Hope, Chief Operating Officer at the Royal Albert Hall said: ‘Going backstage at the Royal Albert Hall when Cirque du Soleil are in residence is the ultimate thrill for anyone interested in how magical memories are made. This is a unique opportunity and will make for a breath-taking VIP entertainment experience.’ Other hospitality includes exclusive pre-show dining in the Hall’s spectacular Gallery which overlooks the stunning auditorium. I 6 January to 8 February 2015. For more information please call 0207 959 0607 or email: entertain@royalalberthall.com

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w h at ’ s o n : a s e l e c t i o n o f e x h i b i t i o n s i n l o n d o n a n d b e yo n d t h e o l d t r u m a n b r e w e ry , l o n d o n

© Jane Hobson

The Art of the Brick

‘Square,’ ‘Circle,’ ‘Triangle’

||| The Art of the Brick, aptly hosted by the Old Truman Brewery on London’s Brick Lane, showcases over 75 art sculptures made from more than a million LEGO® bricks by American lawyer turned LEGO artist Nathan Saway. The large-scale artworks on display range from a variety of human figures to a T-Rex dinosaur skeleton constructed from over 80,000 LEGO® bricks that measures over six metres in length. The exhibition also plays host to Sawaya’s most recent interpretations of some of the world’s most famous artworks, including Da Vinci’s Mona Lisa, the Venus de Milo and Vermeer’s Girl with a Pearl Earring. Visitors are also invited, regardless of age, to play with the LEGO® in the Interactive Zone where they can explore their creativity. I Until 4 January 2015 / Open Sunday to Wednesday 10am to 6pm, Thursday 10am to 8pm and Friday & Saturday 10am to 7pm. Full price: Mon-Thurs £14.50, Fri-Sun £16.50

r oya l o b s e rvat o ry , g r e e n w i c h

Birds of Paradise | Plumes and Feathers in Fashion

Astronomy Photographer of the Year 2014 exhibition

© Roger Vivier

the bowes museum , county durham

||| As a tribute to the elegance of feathers used in the fashion industry past and present, this exhibition features extravagant catwalk creations from British, Belgian, French and Italian designers including Alexander McQueen, Dries Van Noten, Jean Paul Gaultier, Thierry Mugler, Balenciaga, Prada, Gucci and French Chamber member Roger Vivier. Thanks to their beauty, fragility and value, feathers and plumes have been used throughout history in fashionable dress, both as an accessory and as part of the entire silhouette. The exhibition, organised by MoMu Fashion Museum Antwerp, addresses aspects such as luxury, modernism, femininity, lightness, and also themes of lost innocence and dark romance. The exhibition also looks at the ancient profession of ‘plumassier’ in cooperation with the Parisian Maison Lemarié, one of the last traditional feather studios. I Until 19 April 2015 / Open daily 10am to 5pm Full price: £9.50

© James Woodend

Pump ‘Blue Angel’, from Limited Edition Roger Vivier Rendez-Vous Collection Fall Winter 2012-2013.

Aurora over a glacier lagoon by James Woodend

||| Extraordinary images of the Earth and universe are now on view at the Royal Observatory in Greenwich. The free exhibition, featuring winning entries from the Astronomy Photographer of the Year 2014, includes solar features, eclipses, aurorae, nebulae, star trails and more. First prize went to British photographer James Woodend for his vivid green aurora dancing across the Icelandic night sky and reflected in a large glacial lagoon. Other highlights include a breath-taking view of the Earth taken from the brink of space, snaking swirls of superheated gas on the boiling surface of the sun and a striking portrayal of New Zealand rock formations. I Until 22 February 2015 / Open daily 10am to 5pm Free admission info - november / december - 51

v & a m u s eu m , london

||| This major exhibition re-examines the world of John Constable (1776-1837), one of Britain’s best-loved artists. It explores his sources, techniques and legacy and reveals the hidden stories behind the creation of some of his most-well known paintings. For the first time, Constable’s work is juxtaposed with the art of 17th century masters of classical landscape such as Ruisdael, Rubens and Claude, the compositional ideas and values of whom Constable revered. On display will be such celebrated works as The Hay Wain (1821), The Cornfield (1826) and Salisbury Cathedral from the Meadows (1831). I Until 11 January 2015 / Open daily from 10am to 5.45pm and until 10pm on Fridays/ Full price: £14

the british museum

© Victoria and Albert Museum, London

Constable | The Making of a Master

Salisbury Cathedral from the Bishop’s Ground, Oil on canvas, 1823

t h e s a i n s b u ry e x h i b i t i o n s g a l l e ry , l o n d o n

© The Trustees of the British Museum

Ming | 50 years that changed China

Cloisonné enamel jar and cover with dragons. Metal with cloisonné enamels, Xuande mark and period (1426-1435), Beijing

||| This exhibition explores the pivotal 50-year period from 1400 to 1450 that transformed China during the rule of the Ming dynasty. In this period, the capital was established in Beijing and the borders of China were fixed as they are today. Bureaucrats replaced military leaders in the hierarchy of power, the emperor’s role changed from autocrat to icon, and the decision was taken to centralise, rather than devolve, power. The exhibition includes rare loans of some of the finest objects ever made in China, shedding light on this important part of world history that is little known in Europe. China’s internal transformation and connections with the rest of the world led to a flourishing of creativity in what was, at the time, the only global superpower. I Until 5 January 2015 / Open Saturday to Thursday 10am to 5.30pm and until 8.30pm on Fridays / Full price: £16.50

b l e n h e i m pa l a c e , o x f o r d s h i r e

||| As part of the launch of the Blenheim Art Foundation, Blenheim Palace, the traditional seat of the Duke of Marlborough in Oxfordshire, plays host to the celebrated Chinese artist Ai Weiwei’s largest UK exhibition with more than 50 new and iconic artworks on display throughout the palace and its grounds. Artworks range from photographs taken by Ai Weiwei whilst living in New York during the 1980s, through to a large carpet made especially for the exhibition, on display in the Great Hall. Further artworks include a table formed from wood reclaimed from temples dating to the Qing Dynasty (1644-1911), intricately hand-painted porcelain plates, and Circle of Animals/Zodiac Heads: Gold, Ai Weiwei’s reinterpretation of the legendary bronze zodiac head statues that once surrounded the fountain-clock at Emperor Yuanming Yuan’s Beijing imperial retreat. I Until 14 December 2014 / Open Wednesday to Sunday 10.30am to 5.30pm Full price (Palace, Park & Gardens): £22.50 www.blenheimpalace.com 52 - info - november / december

©Courtesy of Ai Weiwei and Blenheim Art Foundation

Ai Weiwei at Blenheim Palace

Ai Weiwei, Chandelier, 2002

book reviews These books, recently translated into English, were selected by the French Institute

Dear Reader

The Foundling’s War

by Paul Fournel Published by Pushkin Press Translated by David Bellos Original title: La liseuse

by Michel Déon Published by Gallic Books Translated by Julian Evans Original title: Les vingt ans du jeune homme vert

||| Meet Robert Dubois. Cheek resting on a pile of manuscripts, the ageing and perhaps too comfortable publisher of Robert Dubois Books is alone one evening in his office. In walks a pretty intern with an e-reader. For a man who thought he had seen it all, this is a revolution. Can text really live without paper? As Dubois gets to know his new gadget and carries on with his publisher’s life, author lunches and bookshops visits, the reader tucked under his arm tells him of the new paperless world to which he might not belong. Don’t be fooled, Dubois hasn’t given up. Late at night, he secretly plots new forms of literature with a group of interns, with whom he shares his immoderate and timeless love of books and reading... I

Parfums by Philippe Claudel Published by Maclehose Press Translated by Euan Cameron Original title: Parfums

||| In this sequel to his acclaimed novel The Foundling Boy, Michel Deon’s hero comes to manhood and learns about desire and possession, sex and love, and the nuances of allegiance that war necessitates. In the aftermath of French defeat in July 1940, 20year-old Jean Arnaud and his ally, the charming conman Palfy, are hiding out at a brothel in Clermont-Ferrand, having narrowly escaped a firing squad. At a military parade, Jean falls for a beautiful stranger, Claude, who will help him forget his adolescent heartbreak but bring far more serious troubles of her own. Having safely reached occupied Paris, the friends mingle with art smugglers and forgers, social climbers, showbiz starlets, bluffers, swindlers and profiteers, French and German, as Jean learns to make his way in a world of murky allegiances. But beyond the social whirl, the war cannot stay away forever… Born in Paris in 1919, Michel Deon is a member of the Academie française and has authored over 50 works. I

The Intervals of Cinema ||| From the sizzling sharpness of freshly cut garlic to the cool tang of a father’s aftershave; the heady intoxication of a fumbled first kiss to the anodyne void of disinfectant and death, this is a decadently original olfactory memoir. In 63 elusive episodes, we roam freely across the countryside of Lorraine, north-east France, from kitchen to farm to a lover’s bed. Recognising the bittersweet nostalgia of a scent that slips away on the summer breeze, Claudel demonstrates again his impeccable grasp of the personal and the universal, interwoven with a rare, self-deprecating charm. This is an evocative patchwork, at once earthy and ethereal, erotic and heart-breaking. Claudel permits us a glimpse of moments that have driven him to delight or despair, creating through the fading aromas of the past fragments of humour, insight and quite intangible beauty. I

by Jacques Rancière Published by Verso Translated by John Howe Original title: Les écarts du cinéma

||| Cinema, like language, can be said to exist as a system of differences. In his latest book, acclaimed philosopher Jacques Rancière looks at cinematic art in comparison to its corollary forms in literature and theatre. From literature, he argues, cinema takes its narrative conventions, while at the same time effacing literature’s images and philosophy; and film rejects theatre, while also fulfilling theatre’s dream. Built on these contradictions, the cinema is the real, material space in which one is moved by the spectacle of shadows. Thus, for Rancière, film is the perpetually disappointed dream of a language of images. I

info - november / december - 53

eat •

drink •


Petrossian arrives in London ||| Many French people simply call caviar ‘Petrossian’, so synonymous is the brand with the product. It was first introduced to France in 1920 by Armenian brothers Mouchegh and Melkoum Petrossian, who went on to establish the company, as well as the mystique and luxury that are associated with sturgeon eggs to this day. Petrossian has always maintained its quality and tradition – sourcing only the best and knowing exactly how to cure it for optimum taste – but it has also been quick to innovate. After the break up of the Soviet Union, when cheap caviar flooded the market, Petrossian was the first luxury brand to offer farmed caviar in 1998 – a move that showed great foresight as wild caviar is no longer permitted on the market. Petrossian went on to make caviar into a gourmet dining experience by opening a restaurant above the family shop in boulevard de Latour-Maubourg, with a menu devised by one of Paris’s top chefs, and it has continued to evolve its products – pressed caviar, caviar cubes and caviar sheets known as ‘Papierusse’ are just some of its innovations, the latter being the recipient of the 2013

Grand Prix for Innovation at Sirha, the world hospitality and food show. Its latest invention is ‘Fleur de Caviar’ – dried caviar grains that can be sprinkled or ground on food. Over the years, the company diversified into other gourmet foods – traditionally smoked fish, which it first introduced in 1935, king crab, other kinds of fish eggs such as trout or flying fish roe, fois gras, truffles and a variety of specialty chocolates and sweets. Now Petrossian has crossed the Channel, not to open a shop as in Paris, New York, Los Angeles, Dubai or Brussels, but with the idea of supplying the best restaurants and their creative chefs with their iconic products. For Petrossian, it is not just the products but the environment in which they are consumed that should be special. I KF

Makeover for the historical Hermitage Barrière, La Baule ||| Hermitage Barrière, La Baule, situated on the beachfront of the Atlantic coast has recently undergone an extensive refurbishment, including fitting out its 12 meeting rooms with the latest technological equipment to meet the needs of business guests. This is by no means its first major renovation, for the hotel which served as a hospital during the Second World War, suffering severe bomb damage, before being converted back into a hotel almost 70 years ago. Before the war, the Hermitage Barrière had established a name for itself, attracting the rich and famous from France and further afield, including the Prince and Princess of Egypt. Its founder, François André, was also eager to attract British clientele and in 1937 helped finance the new air route between London, Deauville and La Baule, which of course attracted many holidaymakers to the hotel. Following the war, François André continued to strengthen Franco-British relations, organising the London-La Baule air rally with the London Royal Air Club in 1947. More recently, it has been the setting of various films and between 1980 and 1989 it played host to Moët & Chandon’s competition for restaurateurs and hoteliers. Today, this 5-star hotel has 200 rooms including 16 suites, two swimming pools, two restaurants, an ‘Ambassadeurs’ lounge with capacity for 450 people and, of course, 12 high-tech meeting rooms. I KC 54 - info - november / december

Contact: +33 (0)2 40 11 46 15 flenevanen@lucienbarriere.com

About caviar Caviar is the name for the salt-cured roe of the sturgeon, a fish in the Acipenseridae family, of which there are some 27 different species. Traditionally sturgeon were caught wild in the Caspian and Black Sea, but overfishing, smuggling and pollution decimated the population, leading to export embargoes. Now iit is largely farmed in a number of different countries from Bulgaria to China, Israel and the US, with each farm focusing on one type of sturgeon. To ensure the quality of its caviar, Petrossian selects farms that meet strict criteria for water quality, conditions and feed. Sturgeon are slow growing fish that can take up to 20 years to reach sexual maturity, and even then, do not spawn every year. This slow maturation and the fact that caviar is typically produced from unripe, unovulated eggs, which can only be harvested by sacrificing the fish, means that populations take years to recover, and explains why caviar is such a rare and expensive delicacy. Different species of sturgeon produce roe that is distinctive in colour, size, texture and taste. Curing and maturation takes from four to 18 months and the caviar is then graded according to size, colour and

taste by experts. The Beluga sturgeon takes 15-20 years to produce roe, hence the high cost of this particular caviar, which is also the most refined and delicate in taste with large, pale grey, buttery eggs. Petrossian sources its Beluga from one farm in Bulgaria, which has mastered the technique of raising this rare fish. Ossetra caviar by contrast is yellowy grey, smaller in size with a more pronounced flavour that has a hint of walnut. The Ossetra sturgeon takes 10-12 years to produce eggs and is farmed in Italy, Israel, China and Bulgaria. The white sturgeon is an American variety, farmed in California, reaching maturity in 810 years. Its caviar, called Alverta, has a distinctive flavour that comes from the sea salt used in the curing process. Most recognisable is Baeri, with its darker, smaller grains, a melting silkiness of texture and a fruity taste reminiscent of anchovies. Originally from Siberia, Baeri sturgeon are farmed in Europe and China and produce eggs at about seven years of age. So how should it be eaten? Caviar is best served in its most original form, using a non-metallic spoon (traditionally mother of pearl or gold), straight on to lightly toasted bread or directly into the mouth! I KF

LadurÊe’s sweet and sunny end to the year

La Petite Poissonnerie opens new London shop ||| La Petite Poissonnerie, a fishmonger, retailer, caterer and wholesaler is opening a new shop, located in the heart of the Portman Estate area near Marble Arch. The shop officially opens on 11 November and will provide its usual range of locally and sustainably sourced fresh fish, shellfish and smoked fish as well as a large selection of French and Japanese groceries and wine. As in its Primrose Hill branch, its dedicated staff will be on hand to offer culinary advice. I lapetite-poissonnerie.co.uk

||| This winter, LadurĂŠe is breaking with tradition. The luxury baker and sweet maker has exclusively revealed to INFO that it is launching a tropical collection for the Christmas season, with the idea of bringing a bit of sunshine to the long winter months. From vanilla & rum macarons in exotically decorated boxes to a pineapple Yule log, these tropic-themed treats are a far cry from more traditional Christmas fare. The collection will be available from the end of November. I KC info - november / december - 55


roquefort by la cave à fromage ||| It is rare for a food to receive so much attention through the course of history as Roquefort has. Considered by many to be an exceptional cheese, Roquefort deserves its acclaim. At the end of the eighth century, on his return from Spain, Charles the Great, (Charlemagne) dined one Saturday with the Bishop of Albi. As it was a fast day when no meat was eaten, the Bishop was panic-stricken over what to serve him, but decided to send for cheese from Roquefort, presenting it on the imperial table. Charlemagne liked the cheese so much that from then on he ordered two donkey-loads of it every Christmas. In 1411, a Royal Charter was

passed to ensure that only those living in Roquefort had the right to mature the cheese in their caves and later the Parliament in Toulouse protected this right to avoid the production of numerous imitation cheeses. In more recent history, Casanova even proclaimed it had aphrodisiac qualities.

Your wine with Roquefort

||| Blue cheeses are normally paired with medium sweet white wines such as a Jurançon Amistat from the Domaine de Montesquiou in south-west France, but why not try Roquefort with a red for a change? Madiran wines, made mainly from Tannat grapes, are the darkest and most tannic red wines you can find. Their rustic qualities go well with specialities

56 - info - november / december

Made with rich ewe’s milk from herds that graze on the Aveyron plains, the cheese is slowly matured in the caves of Mont Combalou inRoquefort-sur-Soulzon, where the temperature throughout the year is a constant seven to nine degrees, and the particular penicillium roqueforti mould occurs naturally, allowing the Roquefort to take on its distinctive character. Powerful like an emperor and delicate like a lover, Roquefort is certainly unique. I by Eric Charriaux E: eric@cheese.biz T: +44 (0)845 108 8222 W: www.la-cave.co.uk

by wine story

from south-west France such as cassoulet, confit de canard and magret de canard. Clos Basté, the prized wine of Chantal and Philip Mur, would match these rich dishes well, but for the Roquefort, I would choose another wine from the Clos Basté domaine – the L’Esprit de Basté vintage. Not wood-aged, it is fresher, smoother and more acidic than the Clos Basté with 30% Cabernet Franc to complement the Tannat, and this goes well with the acidity and power of Roquefort. Organic Madiran Clos Basté wines can be found on the wine lists of the best restaurants in the UK and not long ago L’Esprit de Basté was ranked among the top 50 best wines in England for less than £30 by Decanter magazine. Madirans are wines to keep you warm in autumn and winter, best sipped beside a roaring fire. I by Thibault Lavergne E: thibault@winestory.co.uk T: +44 (0)7921 770 691 W: www.winestory.co.uk

News at the Chamber W

e are now in the last stretch of the year, but for the Chamber there is no slackening as activities continue apace. Since La Rentrée we have had a number of successful events – most notably a sell-out ‘Dîner de la Rentrée’ with Fabrice Brégier, President and CEO of Airbus, and a stimulating Franco-British Transport Conference – as well as a slew of fascinating speakers and presentations at the regular meetings of our Forums and Clubs. Chamber membership continues to grow: so far this year 115 new members have joined the Chamber, including nine Patron members, and in this issue of INFO we are welcoming a new Patron member, Ardian, another four Corporate members and 18 Active members. Our business services are busier than ever, informing, advising and helping French companies gain a foothold in the UK, as well as providing accountancy, payroll, VAT management and recruitment services. After a slow start, our Business Centre is beginning to fill up. To date we have 12 tenants, attracted by our all-inclusive package of an office in central London, access to all the Chamber amenities as well as membership. Only a couple of places remain, so if it is something you have been considering, don’t procrastinate! Production is in full swing for our annual FrancoBritish Trade Directory, and we hope to have it on your desks in the New Year. Be sure to update your entry, if you haven’t already done so! Our first HR Guide, produced by the HR Forum, is also progressing and if all goes to plan, will be published before year end. Looking ahead, we have a couple of milestones yet to come, the most significant being our first FrancoBritish Business Forum, which takes place on 28 November, the day after the annual Franco-British Business Awards ceremony and dinner. Unprecedented in the UK, the model for this business forum was successfully piloted by the French Chamber in Switzerland (CCI France Suisse), and we anticipate a fruitful day of tailored BtoB meetings and roundtable discussions between directors and decision makers of around 100 French and British companies. Before that we would be delighted if you joined us on 21 November for Breakfast with Marc Pontet, the global CEO of Asendia. And with Christmas (unbelievably) just around the corner, we are already making plans for 2015 – we’ll keep you posted! I KF

Discover the French Chamber


businesses were met and advised by our Business Support Services in 2013

info - november / december - 57

new members 1 New patron member

Ardian | Private equity Represented by Olivier Decannière, Head of Ardian Investment UK Ltd | www.ardian-investment.com Ardian is a premium independent private investment company with assets of US$50bn managed or advised in Europe, North America and Asia. The company, which is majority owned by its employees, keeps entrepreneurship at its heart and delivers investment performance to its global investors while fuelling growth in economies across the world. Ardian maintains a truly global network, with more than 340 employees working through 10 offices in Beijing, Frankfurt, Jersey, London, Luxembourg, Milan, New York, Paris, Singapore and Zurich. The company offers its 345 investors a diversified choice of funds covering the full range of asset classes, including Fund of Funds (primary, early secondary and secondary), and Direct Funds including Infrastructure, Expansion, Mid-cap Buyout, Ardian Croissance, Co-Investment and Private Debt.

4 new corporate members

Honda Motor Europe Ltd | European headquarters of Honda products Represented by Jean-Marc Streng, General Manager – Car Division | world.honda.com Honda Motor Europe Ltd is a subsidiary and the European headquarters of Honda Motor Co. Ltd, duly incorporated in Japan. Honda is the largest engine manufacturer in the world and the business comprises more than 500 companies with productions facilities in 26 countries and R&D centres in 15 countries. Honda designs, manufactures, distributes and sells cars, motorcycles and power equipment.

Lenôtre | Catering company Represented by Laurent Le Fur, Managing Director | www.lenotre.fr The main activities of Lenôtre are catering and reception organisation, boutiques in France and abroad, restaurants in France, a professional culinary training school, a non professional cooking school, consulting and licences.

Profirst UK | Organisation of events in the luxury sector Represented by Aline Vandecasteele, General Manager | www.profirst.com Profirst, based in Brussels, Paris and London, is a communication & event agency working exclusively for luxury brands. It specialises in corporate events such as product launches, store openings, anniversaries, fashion shows, etc., and has three other fields of expertise: design, social sports and private events. Profirst manages every aspect of an event from strategic approach to artistic direction and production.

Publicis London | Advertising and communications Represented by Karen Buchanan, CEO | www.publicis.co.uk Publicis London is an award-winning UK creative agency forming part of the Publicis UK Group, which includes specialist sister agencies POKE (digital), Publicis Chemistry (brand activation) and Publicis Blueprint (content publishers), all part of Publicis Worldwide. Clients include Renault, Procter & Gamble, UBS and Nestlé.

18 new Active members

Maison 32

BK Event

French / English luxury interior design company Represented by Amanda Godfrey, Director www.maison32.com

Design and build of portable displays and custom-made stands Represented by Matthias Pepin, Export Sales Manager www.bkevent.uk

Altios France SAS

Bryan Cave

International business development specialist Represented by Boris Yvan Lechevalier, Partner www.altios-international.com

58 - info - november / december

Diversified international law firm Represented by Eniga de Montfort, Associate www.bryancave.com

Casaque UK


Promotional product development and manufacturing company Represented by Nicole Russell, Sales & Marketing Manager www.groupecasaque.com

Digital native influence and PR agency Represented by Eliott Maidenberg, Managing Director uk.jin.sc

CondĂŠ Nast International

Dress design for senior business women Represented by Michaela Jedinak, Founder/Director www.michaelajedinak.com

Publishing Represented by Thomas Bucaille, Director of Talent www.condenastinternational.com

JOC Business Ltd (Michaela Jedinak)

MATCH Hospitality AG


Event services Represented by Alexandre Portes, Key Account Manager www.match-hospitality.com

Canopies and buildings - fabric architecture Represented by Catherine Dalo, Managing Director www.dalo-solutions.co.uk

MVK Accommodation

Good Angel Innovative smartphone applications for the safety of persons Represented by Karl Auzou, CEO www.good-angel.fr

London accommodation for students and young professionals Represented by Donia Jaziri, Director www.mvkaccommodation.com

HL Trad

Reputation Squad

Legal and financial translation company worldwide Represented by Karine Desplanches, Managing Director UK www.hltrad.co.uk

Reputation management agency Represented by Julien Tissandier, Branch Manager www.reputationsquad.com


TreĂŻs Partners LLP

The international auction website to buy, sell & estimate your wines Represented by Arthur de Lencquesaing, International Development Manager www.idealwine.com

Suppliers of advisory and management services Represented by Matthieu Baumgartner, Founding Partner www.treispartners.com


IT recruitment digital - permanent and contractor Represented by Marine Pastor, Business Developer www.wespot-it.com

E-accessible digital solutions Represented by Eulalie Masson, UK Development Manager www.ipedis.com

We spot IT

For more information (including email, address, phone number etc.), please consult the online directory at www.frenchchamber.co.uk/membership/search-for-members.


Paul Kahn

Wilfrid Petrie


g o o d by e

Paul Kahn was appointed President of Airbus Group UK on 1 October 2014 replacing Robin Southwell who stepped down after more than nine years in the role. A chartered engineer with a Masters in engineering and management systems, Paul worked for Ford Motor Company in Europe and the US before joining the UK Ministry of Defence, where he led a major review of procurement processes. Returning to the private sector he occupied a variety of senior operational and corporate positions within Thales, latterly as President and CEO of Thales, Canada. With a strong track record in the industry Paul has the ambition to develop Airbus Group in the UK to the next level. We would like to thank Robin Southwell for his support of the French Chamber, particularly as a board member since 2013. I Wilfrid Petrie, Executive Vice President, GDF Suez Energy Services and CEO of Cofely UK Limited is the new main representative of GDF Suez. As CEO of Cofely UK he supervises all International Facility Management Businesses within GDF SUEZ. He is also a member of the Executive Board of GDF Suez Energy Services and Executive Vice President of GDF SUEZ Energy Services. Wilfrid is a graduate of Ecole Polytechnique and has had various management positions in France, the US and the UK. He joined the Group in 1999. Olivier Carret, Vice President of the UK Nuclear Project at GDF Suez, remains a Chamber advisory councillor and is still a representative for GDF Suez. I info - november / december - 59


Tarja Stenvall


g o o d by e

Tarja Stenvall has been appointed General Manager for Sanofi UK and Ireland. Tarja joins Sanofi from Astra Zeneca, where she was Country President for Astra Zeneca Belgium and Luxembourg. Tarja holds a degree in Economics from the Helsinki School of Economics and Business Administration in Helsinki (Finland) and an MBA from the University of South Carolina (USA). David Loew, Senior Vice President of Commercial Operations in Europe commented, ‘We are excited to bring Tarja on board as a new member of the European Leadership Team. Her broad experience in diverse markets will ensure she can lead our UK and Ireland affiliates to provide a solid contribution to patients’ needs in those two markets.’I

chamber shorties Alsace trade mission to the UK The French Chamber organised its third trade mission for the Alsace region this year, led by the Alsace Chamber of Commerce. Five companies, offering a range of products from fashion accessories to organic food & drink, met with buyers and distributors. All of them had one goal in mind – to sell to the UK market. A total of 24 B-to-B meetings were organised over two and a half days. One of the companies, Grad Lifetime Decking, wooden decking specialists, confirmed its first order during the mission. For this company, expanding into the UK is an important part of its development. ‘We

know that the outdoor wooden furniture market in Britain is thriving, not to mention the fact that British buying power is greater than in France,’ said one of the company’s representatives. The company had tried to enter the UK market in 2013 with little success, and so sought professional help from the Chamber to better understand local business practices and make the right contacts. ‘The way in which the Chamber’s team searched for potential partners, made initial contact and followed-up on leads was professional and ensured that suitable meetings could be organised,’ the company representative commented. I

Business Centre desks in high demand Over the last couple of months, the Chamber’s Business Centre has welcomed another six companies and with 12 desks filled, has almost reached full capacity. Ten companies from various industries ranging from luxury food and gifts to display design have taken up desks in the Chamber’s central London office and are now enjoying free Active membership, unlimited access to the state-of-the art meeting rooms and exposure in INFO magazine. Ipédis, a company which specialises in digital solutions for disabled computer users, moved to the Chamber last month. According to their representative, Eulalie Masson, using the Business Centre is a great benefit to the company. ‘It is a real asset to be at the Chamber, especially in terms of the networking opportunities and access to the Business Consultancy. Also, being able to tell other companies that we are based at the French Chamber enhances our image.’ Although desks are going quickly, there are still a few available. For more information, please contact businesscentre@ccfgb.co.uk. I

Obituary: Anne Morel It is with sadness that the French Chamber announces the passing on 17 September of Anne Morel. A much loved and well known member of the French Community in London, Anne worked at the Chamber from September 1990 to May 2001 as Finance Director and was a key figure in the development and success of the Chamber’s services to French companies setting up in the UK. We extend our condolences to her family and close friends. I

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recent event b r e a k fa s t w i t h n i co l a s b e y to u t



Is France the sick man of Europe? Over breakfast provided by PAUL at the Four Seasons Hotel London at Park Lane, Nicolas Beytout, the President and Founder of L’Opinion, gave an overview of the French political and economic landscape in an appraisal of whether or not France deserves such an epithet


veteran newspaperman, with years of experience at the helms of Les Echos and Le Figaro, before founding his own daily newspaper, Nicolas Beytout is an old hand at the political cut and thrust in the ‘battle for ideas’ as he calls it. And this battle is the key purpose of his newspaper L’Opinion. Information is everywhere, he observed, but the point is to ‘select, prioritise and deliver an opinion on it’. He acknowledged that digital and the Internet are key factors for delivery but stated that in his experience of launching and establishing the brand of L’Opinion in the last 16 months – both online and as a paper – printing had still proved to be the most influential way of doing business. Nicolas prefaced his evaluation of France’s current situation by noting that L’Opinion’s editorial line is – uniquely amongst French papers – liberal and pro business. ‘France is a record-breaking country,’ he observed with some irony as he listed its zero growth, 3.5 million unemployed (half a million more than when François Hollande came to power), and other highs and lows such as bankruptcies, tax and housing starts. Public spending is 57% of GDP, debt is €200 billion and the deficit is worsening. ‘There is no question France is sick economically and the rest of the picture is not charming either,’ he went on. ‘The French are the most pessimistic in Europe, François Hollande is the most unpopular President ever with a 13% level of confidence, 85% of the population is mistrustful of him and 70% of those who voted for him are no longer confident in him as President.’ Nicolas noted that other countries were not in a good situation either, but France ‘does not want to be treated or does not know how to be treated’. This unsatisfactory impasse Nicolas attributed to the failure of President Hollande’s policies. The President’s abandonment of the platform on which he was elected has also undermined his position. As a result, the left wing has lost its majority in parliament and rifts in the Socialist Party have weakened it considerably. By contrast, the right wing National Front has gained ground to become

the leading party in France with 25% of the vote in the European elections. Nicolas Sarkozy is also poised to make a political comeback as leader of centre right party UMP with his sights set on the Presidency in 2017. Despite all this, Nicolas said that there was room for optimism. He believes that barring a social crisis, the Left will keep going because France’s institutions are strong, and the Right will line up as Prime Minister Manual Vall’s shift to the right forces them to redefine their position and confront their fear of reform. ‘My bet is that the Right Wing will no longer oppose strong reforms,’ Nicolas said. He observed that private affairs were dominating conversations but that the media has to play a role in redirecting attention back to serious issues. A Q&A followed in which Nicolas said that the French outside of France should be a mirror of what France is not, so that their experiences could be a lesson. In an impromptu response, the new Minister Councillor for Economic and Financial Affairs at the French Embassy, Alain de Cointet, took to the podium to pick up on some of the points Nicolas Beytout had made. ‘There is no disputing the situation in France is a difficult one,’ he said, ‘but at the same time there is a need to be optimistic.’ He stressed that the government had been very transparent about the deficit targets overshooting but that as Finance Minister Michel Sapin had made clear, it was due to a substantial deterioration in the eurozone environment rather than a change in policy, and that deficit reduction had to be carried out at a speed that allows for growth. Nevertheless, he asserted that the government is sticking with its ambitious public spending cuts and is ‘highly committed’ to structural reforms. ‘As people in this room will know,’ he said, ‘this is a hard task in France as there is great resistance to change. The French have a tendency to take to the streets when reforms are initiated rather than supporting them.’ He noted that Prime Minister Manual Valls would elaborate on the reform agenda on his visit to London in October. I KF info - november / december - 61

Interview with

Fabrice Brégier, President and CEO of Airbus

Airbus is often cited as an example of European integration working well, operating as it does across four countries. What are the factors that enable this and make the group successful? To the uninitiated, Airbus’s operating model can sound completely implausible. Take the A380, the world’s largest passenger aircraft. We manufacture the wings in the UK, the cockpit and centre fuselage in France, the tailcone in Spain, and the wing flaps and forward fuselage in Germany. And those are just a few of the many parts that make up the A380. For all our different aircraft models, we transport the constituent parts of each plane to a final assembly line in France, Germany, or in a few cases, China, where we fit them together, before delivering the final aircraft to the customer. We’re also currently building a new Final Assembly Line in the US. Despite being dispersed across different countries, our manufacturing system works smoothly. One reason is because it has allowed each of our core countries to develop areas of deep expertise in aircraft manufacturing and the development has taken place over the past 40 years or so. The UK, for example, has world-class expertise in designing and building wings. Around half of the world’s modern large aircraft fly on wings manufactured here. Our ability to draw on that level of expertise is a major advantage for Airbus. The ‘next generation’ A350 airliner will be delivered to its first customer in December after 8 years of development and US$15 billion investment. What has all this time and money gone into?

You must remember that aircraft are among the largest, 62 - info - november / december

most complex industrial projects in the world. The reality is that it takes years of investment and innovation to design, develop and test a completely new aircraft. The A350 is the world’s most advanced passenger jet. It delivers a 25% improvement in fuel efficiency compared with the previous generation of aircraft. That’s the result of cutting-edge technology. More than two-thirds of the plane’s airframe is made from composite materials, titanium and advanced aluminium alloys, rather than traditional metals. The plane’s Rolls-Royce Trent engines use the most advanced propulsion technology. Between June 2013 and September 2014, we carried out flight tests to demonstrate the A350’s readiness to enter service. As you can imagine, these tests were stringent, and covered the aircraft’s ability to cope with extreme temperatures and weather conditions: between them, the five test aircraft clocked up over 2,600 flight hours in more than 650 flights. What are Airbus’s greatest challenges at present and in the foreseeable future?

In the short-term, our most significant challenge is introducing the A350 into service. We are on schedule to deliver the first one to Qatar Airways by the end of 2014. But to stick to our schedule in the longer term, we must raise production to 10 A350s every month by 2018. This will not be easy: these are large aircraft. The bigger of the plane’s two variants will carry 369 passengers. So that will put pressure on our production system and supply chain. It’s important that we succeed, because our customers and shareholders are watching closely to see whether we deliver on our commitments. For Airbus, the A350 is a critical test of credibility.

You have said the pace of innovation is slow in Europe – what is Airbus doing about this to ensure it stays competitive in the high tech aerospace sector?

One of our current priorities is to accelerate the pace at which we bring innovations to the marketplace. We want our customers, the airlines, to benefit from a stream of rapid improvements instead of waiting a decade for a completely new aircraft to be developed. We’re doing this by updating and improving our existing aircraft. An example is the A320neo, which will enter service next year. The A320 family fly on short and mediumhaul routes, such as London to Paris. We sold our first A320 back in 1984. But instead of replacing it with a completely new generation of aircraft, we decided to update our existing models with new engines and wings. The result is the A320neo, which will cut fuel consumption by 20% compared to its predecessor. It’s already the fastest-selling commercial aircraft ever. One reason for its popularity is that it will be available in only around half the time of a completely new aircraft. So a faster approach is sharpening our competitiveness. In the midst of a European shortage of technical and engineering skills, how does Airbus go about attracting the best talent and investing in its people?

One area where we must improve is in attracting people from all backgrounds to work in industry. In particular, we must improve female representation. This is something my own sector has struggled with. But we’re missing out on an enormous pool of talent. It requires firm leadership to put this right – from increasing the number of female senior managers to encouraging young women to become engineers in the first place. At Airbus, we’re making progress by hosting events at our sites to encourage female students to pursue technical careers. We’re also working on a programme in the UK for our female engineers to mentor girls at school. We’re starting to see results. In France, for example, around one-quarter of our engineering recruits are now women, a higher proportion than in our engineering schools. That’s a small but important step in the right direction.

beyond. It will help to ensure the country has the right skills in the right areas for decades to come, thus encouraging businesses to invest here. For example, the partnership plans to fund 500 postgraduate Masters students in aerospace. The partnership is also backed by substantial funding from government and business, including Airbus. That’s a strong model for developing the right people and technology for a competitive Europe. How does Airbus manage its currency risk?

Changes in the Dollar/Euro exchange rate can have a major impact on our business. That’s because we sell aircraft in Dollars, but most of our costs are incurred in Euros. That’s one reason why we’re building our first production facility in the US, located in Mobile, Alabama. It will be a final assembly line for the A320 and is scheduled to deliver its first plane in 2016. Among other things, the plant will help us to hedge against future changes in the Euro/Dollar exchange rate. You have read – and praised – the French Chamber’s crosscultural business guide, ‘Light at the End of the Tunnel’. As President and CEO of a multicultural group, what for you is its most useful tip?

The guide contains much excellent advice for those of us working in multi-cultural environments about how to avoid misunderstandings. For example, it reminds us that we must spend time in appreciating each other’s differences and not jump to conclusions. The guide also recommends that we should be patient and adapt, while showing humility and avoiding arrogance. These are all useful tips to bear in mind. I Interview by KF

You identify deeper cooperation between government and industry as being critical to maintaining Europe as an attractive location for investment. For its part, what is Airbus doing to facilitate this and what do you see as ways of doing this?

Developing the right people and technology for the future is never easy or cheap. So business and government need to work together to nurture Europe’s industrial strengths. A great example is the Aerospace Growth Partnership in the UK. It’s a genuine collaboration between business, government and the university sector. The partnership sets out a long-term vision for the aerospace sector in the UK, for the next 15 years and

Fabrice Brégier was the guest speaker at the Chamber’s annual Dîner de la Rentrée at The Four Seasons Hotel at Park Lane on 23 September, with a near record attendance of 320 guests. The dinner was attended by HE Ms Sylvie Bermann, French Ambassador to the UK.

info - november / december - 63

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Smart urban transport: meeting the challenges for the city of tomorrow Organised by the French Chamber in partnership with the French Embassy and the Franco-British Council, the first Franco-British Transport Conference provided a platform for debate and discussion on the challenges of moving around and between our growing cities, and how to meet them ‘


hen it comes to developing urban transport, Britain are, above all, innovative, made the topic a challenging and France have an enormous amount to learn from but fascinating one for both France and the UK. each other, and what is really striking is that we share most Launching with a presentation on the future of urban of the same challenges,’ Richard Brown, Deputy President mobility, Warwick Goodall, Director at Deloitte, outlined of the Chamber and the former Chairman of Eurostar, findings of a study on this topic. He noted that rapid global said in his opening remarks. As cases in point, both urbanisation is driving three types of innovation in urban London and Paris have hugely ambitious plans to develop transport: new kinds of cars, new ways of living with the transport infrastructure, which have to be financed in an car and new ways of living without the car. Connected, era of public sector austerity and deficit reduction. Both autonomous vehicles on demand are a ‘nirvana scenario’, cities are following the global trend for agglomeration, probably decades away, which promises fewer cars on which means increased the road, more efficient demand for travel as traffic flows thanks more people live and to dynamic routing, work in the city. At the better use of time same time, transport in transit and safer has to reduce its green roads. However, the house gas emissions concept does throw up and account for the questions around the impact on health of its possibility of rebound pollutants. Added to – causing more not less that are the challenges congestion, regulation, as well as opportunities integration with in meeting rising existing infrastructure consumer expectations and cultural acceptance. in the digital age. Digital technology is HE Ms Sylvie Bermann addressing the conference French Ambassador already opening up new to the UK, HE Ms Sylvie Bermann’s address chimed with forms of ‘social’ transport, enabled by social networks, these themes as she observed the common demographic, such as car sharing and ride sharing. There are also economic, social, industrial, technological as well as generational changes, as younger people do not consider climate challenges presented by urban transport in the car a preferred mode of transport and have different our cities, but she stressed the advantage of comparing expectations of ownership, which has implications and sharing urban transport models and best practice. for car manufacturers. In just the last two years, digital Baroness Blackstone, Chairman of the Franco-British technology and real-time data has enabled a dramatic Council, agreed, saying that with the growing populations shift in the way people can plan and manage multiin our capital cities and countries, the need to reduce modal travel, and brought about a user-centred mobility congestion and have sustainable transport systems, which paradigm – personal rather than public transport.

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Moderated by Christian Wolmar, a journalist specialised in transport, the first panel discussion was on financing urban transport, and with a mixture of panellists from the UK and France, provided perspectives on the two very different approaches in the two countries. Roland Ries, Senator-Mayor of Strasbourg and Chairman of GART (French federation of transport authorities) spoke about the French Secretary of State for Transport, the Rt Hon Patrick McLoughlin MP public transport funding model, which includes a transportation tax imposed on companies of more than nine employees, while Trevor Sturmy, Managing Director of Project Finance at HSBC, provided an overview of how public-private partnerships (PPPs) work in the UK, focusing on the motivation and roles of each, although he stressed that in practice the structure could be much more complex. Doris Chevalier, VP of Project Financing at Alstom Transport outlined how PPPs work in France, noting that they were ‘not a miracle solution’ although most delivered on time and on budget, and that flexibility was one of the key factors of success. Préfet Etienne Guyot, CEO of Paris Ile de France Chamber of Commerce and Industry, and former CEO of the Société du Grand Sir Peter Hendy, Commissioner of Transport for London, takes Paris, spoke about the financing for the Grand Paris questions from the audience transportation project, noting that it was largely publically funded with private participation through loans and period of no investment in London’s transport system investment in real estate around the stations. Amongst with the progressive development in Paris enabled by the most notable differences between France and the UK consistent investment, but remarked that London has now to emerge was the length of concessions – 25-50 years in caught up with a medium-term capital plan to rival that of France compared to 15-20 in the UK – and the risks to the Paris, and its 2050 Infrastructure Plan. Sir Peter admitted consumer of this were questioned. that they still struggled to get the financial and legislative More comparisons between London and Paris were capacity to undertake projects quickly and that approval made when Sir Peter Hendy, Commissioner of Transport processes are very slow in the UK. With regard to finance, for London and Etienne Guyot spoke about the transport TfL has had to be innovative in raising private finance projects each metropolis is engaged in delivering. Sir Peter for big projects and looks in envy across the Channel at Hendy noted that between 1984 and 1999, London had the means of local and regional taxation. ‘There are many suffered from a lack of strategic governance, and that great more similarities than differences between London and strides had been made since the Mayor took control of the Paris. People create more value per hour if cities work transport networks in 2000. He compared the prolonged well, as they do in London and Paris and now that we Supporting sponsors

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are closer than ever thanks to Eurostar, we can learn from each other, helping to make our cities grow into more prosperous places,’ he said. Detailing the scope and impact of the Grand Paris project, Etienne Guyot observed that it was the most important investment in France currently, and enumerated its benefits not only for the region but also France as the area generates 30% of the country’s GDP. He noted political will and support had resulted in the acceleration of works, but admitted that there were difficulties around the organisation of institutions, which has impacted the construction of housing. ‘We admire London with its motto of “The winning city” and its organisation of power,’ he said. Taking the bull by the horns, Nicolas Petrovic, CEO of Eurostar, asked – and answered – some of the trickier questions that are posed about high speed intercity links, such as: Why go by train when you can fly? Is there a future for high speed? Are we going to get commoditised by Internet giants? Good rail links change the way people interact, create new markets and regenerate the way people travel, he observed. He also noted that high speed was still in the process of rolling out all over Europe, linking cities and thereby creating wealth. ‘It is expensive, but when it is well done, it is not just about transport, it can literally turn around cities with the regeneration it promotes,’ he said, citing London’s Kings Cross area and Lille as examples. As for the future of the industry, he said that ‘the hope for the rail industry is that there is a lot of innovation by rail actors’ although with fierce competition to carve out value no one is quite sure what the landscape will be in 20 years’ time. The second panel debated innovative solutions for the digital age, with some tensions playing out between private and public transport modes. Edward Peeke, Managing Director of Bouygues Energies & Services set out the challenges that technology will have to address within the realms of transport and infrastructure, noting that digital is a means to an end. Speaking for the electric vehicle (EV) were Cédric Bolloré, Director of Development at the Bolloré Group, which is taking over the SourceLondon electric car charging infrastructure and bringing an electric car-sharing scheme to London, and Vincent Carre, EV Sales and Marketing Director at Renault



Group. Both were positive about the uptake of electric vehicles as technological advances make them easier, more affordable and enjoyable to use, and Vincent Carre noted that by 2016, all automakers will be selling pure EVs. Sharing their vision for reducing traffic and air pollution Peter-Frans Pauwels, Co-founder of TomTom explained how connected cars are driving a silent revolution as the big data they generate is fed back to drivers, enabling travel choices that help to alleviate congestion. Professor David Metz from the Centre for Transport Studies, University College London, observed that there had been a marked shift away from car use in cities as professionals switch from cars to public transport, urban rail in particular. He looked at one potential innovation that looks like a car and behaves like rail, noting that we are on the verge of a ‘back to the future’ rail revival. ‘The future for modern cities is mass transit,’ Alistair Gordon, CEO of Keolis posited, and proposed automation as the solution to the primary issue of capacity because of the efficiency and frequency it enables. Moving people around cities also requires fully integrated customer information and service for different markets, and the future may be a virtual customer service person directing a customer on their network journey through glasses, visual display or headphones. ‘Any city of the future must have a transport system which is healthy for those who use it,’ he concluded, ‘with segregated channels for bicycles and pedestrians.’ Bringing the conference to a close, the Rt Hon Patrick McLoughlin MP, Secretary of State for Transport spoke about the lessons that Britain must learn from France, ‘the most important of which is to plan ahead, to have an ambitious, joined-up vision for the future, and a commitment to invest and deliver’, but also commented that France may also have benefited from British innovation and the way it had successfully embraced the power of the market. But if we are going to meet the transport challenges of tomorrow – urban congestion, carbon emissions, making roads safer, cutting the cost of transport – then we will have to continue learning from each other,’ he concluded. ‘What’s certain is that in this increasingly global economy, there’s never been a better time to work together to find shared answers to common problems.’ I KF info - november / december - 67

recent events d i s cov e r ru i n a rt



Goodbye summer... Hello champagne!


Jo Thornton with Arnaud Bamberger

n the elegant Moët Hennessy offices, just around the corner from Victoria Station, 40 Patron member representatives met to taste Ruinart champagne, eat canapés and network – an ideal way to beat the end of summer blues. After welcoming words from Arnaud Bamberger, President of the Chamber and Executive Chairman of Cartier, and Jo Thornton, the Managing Director of Moët Hennessy UK, the UK ‘s largest luxury drinks distributor, the eagerly awaited tasting began. Ruinart, the oldest established Champagne house, laid on a selection of their finest

dîner des chefs


Blanc des Blancs, Rosé and Dom Ruinart 2004, all of course presented in the distinctive Ruinart bottle. Following the swirling, sniffing and sipping of the champagne came a chance to mingle over delicious canapés. The select number of participants and relaxed atmosphere made this an ideal networking opportunity. As the evening drew to a close, guests, having learnt how to fully appreciate Ruinart’s subtle tastes and aromas, left with smiles on their faces and half bottles of champagne in their hands, kindly provided by Ruinart. I KC

17 s e p t e m b e r

Herland prepares a feast for the Ambassador


The French Ambassador poses with the Chamber’s President Arnaud Bamberger and Chef Jocelyn Herland 68 - info - november / december

he autumn edition of the Dîner des Chefs was one of firsts. It was the first time that this regular event took place at the three Michelin-starred restaurant Alain Ducasse at The Dorchester and, notably, it was the first Chamber event ever attended by the new French Ambassador HE Ms Sylvie Bermann. To mark the occasion, Executive Chef Jocelyn Herland prepared a creative and modern five-course menu using produce sourced from both French and British suppliers that ranged from seared John Dory and baby squid to beef fillet with Périgueux sauce. Drawing on typical Ducasse cuisine but with a Herland twist, the dishes certainly did not disappoint the 60 guests, who included Luxury Club members and gastronomes from a variety of sectors. The menu was accompanied by Champagne, wine and cognac provided by sponsor Pernod Ricard UK and complemented by the impeccable service of Alain Ducasse at The Dorchester. I KC

recent events i n t e r n at i o n a l w i n e a n d s p i r i t ta s t i n g



Mixing global flavours



The French table was one of the most popular

he annual International Wine and Spirit evening was as global as ever with 10 different Chambers of Commerce from countries around the world each bringing and sharing traditional wines and spirits. This year, our tasting range included a very special Chateau de La Gordonne rosé kindly provided by our sponsor Vranken Pommery. In the magnificent surroundings of one of the Grand Connaught Rooms, 250 participants made their way around the different tables sampling what each country had to offer, from Mexican tequila to Japanese sake andFrench wines, their taste buds travelling the world over. While this was officially a tasting event, spitting was kept to a minimum with most agreeing that drinking was the best form of appreciation! With glasses and canapés in hand, participants were able to enjoy the relaxed, convivial atmosphere and make truly international connections. I KC

i n d u l g e n c e at a u b a i n e



When the PAs descended on Mayfair


his PA-only event, now in its third year, took place in the beautiful surroundings of the Aubaine restaurant in Mayfair. Personal assistants of Chamber member representatives took the opportunity to network and finally put faces to the names exchanged in phone calls and emails. In the restaurant’s private area, guests sipped on prosecco and enjoyed canapés featured in the head chef’s latest menu. During the course of the evening, there was a lucky prize draw, the winner of which received dinner vouchers generously donated by Aubaine. Each guest also left with an Aubaine goody bag containing delicious home-made marshmallows and a voucher for a free glass of champagne. I KC

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16 o c t o b e r

The process of creation: how to achieve perfection

Breakfast took place in the beautiful Crush Room


he Royal Opera House was an apt setting for such an exposition, for as the host Jane Storie, Head of Sponsorship and Patrons, observed, it houses 1,000 people involved in making, performing and creating. Bertrand Michaud, Managing Director of Hermès and Chair of the Luxury Club introduced Faye Toogood, a British furniture – and lately fashion – designer with whom Hermès has twice worked, and Wayne McGregor CBE, the multi-award-winning Resident Choreographer of the Royal Ballet and Artistic Director of Wayne McGregor | Random Dance. Although Faye and Wayne had never met before and work in different fields, both eschewed a conventional ideal of perfection. Faye spoke about ‘trying to find perfection in imperfection’ in her work, while Wayne explained how he seeks out each person’s unique physical signature to bring out a very individual perfection within dance, rather than a symmetrical conformity. Faye described how she had sought out not only artisans and craftsmen to make her pieces, but also people in industry and manufacturing – a motorbike maker, for example, who had precision-welded her dressing table out of security mesh. ‘I am not just interested in craft, but also the machine and how you bring it and the individual together,’ she said. More recently, as a ‘greedy designer’, constantly seeking out new challenges, she has turned her attention to clothing, exploring structure and form in fashion that celebrates trade and industry by basing the designs on workwear – from beekeepers to road sweepers, photographers to oil riggers. Each coat is adorned with a silk ‘passport’ naming each and every artisan involved

L to R: Bertrand Michaud, Florence Gomez, Jane Storie, Wayne McGregor, Faye Toogood and Arnaud Bamberger

in its creation. ‘When it comes to creating, the idea of finding perfection is not something that preoccupies me,’ she concluded. ‘I prefer to find the wobbly seat, the man who makes the motor bikes, the hand-painted canvas that is not particularly precious…’ Wayne compared a traditional notion of perfection – citing the purity, precision and formality of the Royal Opera House building as an example – with the ‘dysfunctionality’ of bodies, the ‘material’ that he works with as a choreographer. ‘I look for the creativity and inspiration inside each individual and work out how to get the best out of them,’ he said. He spoke about ‘changing the rules’ rather than a pastiche replication so that classical ballet becomes an ‘evolving, living art form’. Creativity is all about ‘collaborative endeavour’, he went on, not only with other artists but also with different worlds – people with different knowledge sets, such as neuroscientists and social anthropologists. ‘I really believe that you can learn techniques of creativity that are translatable to other domains and expand your capacity to break the rules,’ he said. After an open conversation with the artists, led by Arnaud Bamberger, the Chamber’s President and Executive President of Cartier, the group had a chance to visit the Royal Opera House Wardrobe Department with Faye Fullerton MBE, Head of Costume, and glimpse something of the behind-the-scenes creativity and industry that goes into the making of just one aspect of a ROH production. Thanks go to the Royal Opera House for so graciously hosting the Luxury Club, as well as Faye Toogood and Wayne McGregor for giving such fascinating and erudite insights into the creative process. I KF info - november / december - 71

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finance forum



The green economy – how to finance sustainability At a forum looking at how the green economy can be financed, James Cameron, Founder and Chairman of private equity and specialist investment bank Climate Change Capital painted a picture of the investment landscape and how climate change will transform it, while Josué Tanaka, Managing Director, Energy Efficiency and Climate Change, at the European Bank for Reconstruction and Development (EBRD) revealed what is already being done to transform companies in its sphere of operation


limate change is how the world is – a fundamental, physical fact of life rather than an abstract problem of the future, James Cameron asserted at the outset. He went on to explain that it is also a systems problem, and while humans are good at systems, they can fail catastrophically. Crucial to understanding the risks is being aware that climate change is a non-linear failure – it cannot be assumed to be gradual and its effects on us are unknown – so the costs could be huge and possibly unmanageable.

What can be done? Climate change labels do imply costs, so to gain traction, there is an exercise under way in reframing the building of a resource-efficient economy as an investment in infrastructure, innovation and information. Another way of looking at it would be as a security risk. Climate change is also requiring a new way of thinking about asset classes – what is valuable, what will be revalued because of the climate change risks associated with it, and how to invest in it. However, there needs to be some kind of shock to bring about the realisation that current capital flows are ultimately self-defeating – there will be catastrophic losses because of the reality of climate change. And yet it is extremely hard to move away from the status quo, and the market gives no credit to companies which do so. Who is going to give up the short-term reward of owning fossil fuel stocks and what is the clean energy alternative? Such a big shift cannot take place without the fundamental revaluation of assets, and this will put whole portfolios

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at risk. Plausible, pragmatic, implementable strategies have to be put in place to make the transition over the next 20 to 30 years.

So where can capital flow today? The climate change and investment space is providing the opportunity for a radical shift in thinking and then doing within the financial sector. There is a whole investment class dedicated to new climate intelligent infrastructure, which provides a huge opportunity for capital deployment and in the right size to interest institutional investors. When it comes to information we have never before commanded data as we do now. Data gathering, organisation, visualisation and transformation into sets that are useable for decision-making is a massive area for investment. Finally, innovation, which is key to a more resource efficient economy, is a very attractive investment space, particularly as there is a need for more risk capital in capitalist societies. How EBRD does it Josué Tanaka introduced the EBRD before explaining how it goes about financing green projects. A product of the fall of the Berlin Wall, the EBRD was established in 1991 as an international financial institution to promote the transition to market economies in 35 countries from central Europe to central Asia. In 2011, the Bank expanded its operations to Egypt, Jordan, Morocco and Tunisia. The Bank is owned by 65 countries and two inter-governmental institutions, and has a capital base of €30 billion. Since its inception, it has invested over €88.2 billion in more than 4,000 projects, mainly private enterprises, with an average annual investment of €9 billion, and an emphasis on promoting sustainability, energy efficiency and low carbon economies. So where does the money go? EBRD invests through three vehicles that focus on sustainable energy, municipal infrastructure and sustainable resources, namely water efficiency and industrial materials. The sustainable energy initiative was launched in 2006 off the back of the Gleneagles G8 summit, where a scaling up of financing for energy efficiency and

renewable energy was called for, and it now represents between a quarter and a third of the EBRD’s annual investment. The €16 billion it has so far invested in over 800 projects has resulted in a reduction of 67 million tons of CO2 emissions per year (equivalent to the annual emissions of Romania). One area of activity is big industry energy efficiency projects, such as steel manufacturing, aluminium smelting, cement and glass production, as well as major transport investments. The EBRD also works through local banks with its Sustainable Energy Financing Facilities (SEFFs), to support industrial energy efficiency in SMEs, small-scale renewable energy and Josué Tanaka building energy efficiency projects. In addition, it works with utilities on the retrofit of large powerplants and does not fund more than a third of the project cost, transmission networks to improve energy efficiency, with the market – loan syndicates or banks – and the provides renewable energy project financing and supports company itself funding the rest. In certain cases, where projects to increase the energy efficiency of municipal the risk is perceived by the private sector to be too high, infrastructure, including upgrading and development the EBRD will take the long-term tenure of the loan as a of district heating, public transport networks and water way of matching risk/return expectations. supply systems. Interestingly, while the financial crisis However, the EBRD is not just about money: its brought a surge in demand for operational approach is a trio of renewable energy – albeit driven projects & investments, policy The climate change and more by finances than a concern dialogue and technical assistance. investment space is for the environment – regulatory Like mayonnaise, it is not the providing the opportunity reversals have subsequently had a complicated ingredients, but the way for a radical shift in bad impact on this area. they are mixed together that works. For its municipal infrastructure It starts with the project because thinking and then doing initiative, the EBRD builds on most people want to see something within the financial sector relationships in places where it has tangible before being receptive to historically funded projects, as a policy changes, particularly in the kind of evolution of the financial products that it offers. countries where EBRD works where climate change is In addition to structuring financing of infrastructure, not a big thing. While changing the policy context over equipment and services, it promotes commercialisation time is necessary to get the total effect, it is more often and corporatisation, develops regulatory structures the case of getting the maximum benefit within an and promotes environmental, social, health and safety imperfect policy environment. improvement. Notably the EBRD actively promotes private sector involvement and facilitates commercial Environmental financing instruments cofinancing: it has mobilised over €6.6 billion in The bulk of what the EBRD does is private sector direct cofinancing in addition to investing €5 billion of corporate financing – the most appropriate to help its own. businesses adopt improved technologies – and these are often non sovereign loan and equity loan financing How it works in practice instruments. It also provides indirect financing through A company might approach the Bank for €100m to partnerships with intermediaries – most often loans to double its capacity. The Bank then introduces the energy a bank – as a way of reaching smaller businesses and efficiency option by asking the company if it realises that households. Municipal infrastructure financing can its energy intensity is significantly higher than industry range from state level with sovereign-backed loans to benchmarks, and suggesting an energy audit to see if there private company concessionaire loans, depending on are opportunities for energy efficiency improvement. the level of decentralisation. The Bank’s loan financing The results tend to show there are several investments is in local currency because of the forex risk to entities that could be made with rates of return above that of that get most of their revenues in local currencies. the original expansion project. Some companies will opt The EBRD has developed strong partnerships with to do these instead, a few will stick to their initial plan, the major international financing mechanisms set up while others will do them incrementally – a company to address the climate change challenge such as the in Ukraine, for example, is undertaking the 12 proposed Global Environment Facility, the Climate Investment projects in pairs, starting the next only as the gains of Funds and the Green Climate Fund. The EU also the previous become apparent, and is currently on its provides significant funding support and has been a sixth. Up to 90% of the projects come to the Bank as key driver for climate policy in the EBRD region of something else. On mega projects, the EBRD generally operations. I KF info - november / december - 73

forums recent sme




entrepreneurs club



How to fund and manage growth The workshop on funding and managing growth was kicked off with presentations from Grégoire Scholler, Founder of Nextbankers, who explained how to launch a successful online fundraising campaign, and Christian Mouysset, Founder of Hummus Bros who related his own experience in managing the growth of a startup. They share their insights here


he financial crisis showed the failure of financial intermediaries (private and public) to provide efficient solutions to finance the economy. Disintermediation became the new mantra. Nowadays, entrepreneurs want to connect directly with their audience. They reject the idea of a middleman who captures the creation of value without creating value himself. Crowdfunding is in the air! Before launching a campaign, you should be very clear about the purpose of your fundraising. Is it to collect pure donations, seek sponsoring solutions for an initiative or event, pre-sell an innovative product or service, or finance your personal needs or company’s growth through debt or equity? Answer these questions, and then select the right platform. Being in fundraising mode is demanding. It often takes 100% of your time. And this is something that most entrepreneurs find difficult to manage, as they need to keep running the business. Here are few tips to make your campaign successful: • Involve yourself. Do not assume that success comes naturally. You have to commit yourself to leading this adventure from beginning to end. Don’t surrender leadership of your project! • Define your campaign. Each campaign must have a clear objective. It is critical for backers to understand why you are raising money and how the money

• •

will be used to reach your goal. Making your campaign, clear, simple and transparent will reap dividends. • Create inspiring and realistic rewards. Rewards are what backers will receive from you in exchange of their financial support (do you raise pure donations or is there a product, service or potential return on investment?) • Set your funding target. Obviously, there is no rule here. It all depends on the purpose of your fundraising. Make a great video. Campaigns which display a video have a far higher success rate. Build your campaign carefully. No improvisation. Take the time to prepare well. On average, preparation takes around two weeks. Promote your project shrewdly. Use social media and more… Consider grassroots meet-ups to present your campaign in the real world too. This may boost your base of supporters. Finally, you may want to contact your local press and media, which are always eager to hear good stories. Make useful project updates. At all times, you should build and manage the momentum around your campaign. Fulfil your rewards. To make this last phase as manageable as possible, make sure you plan it ahead. I Grégoire Scholler

Hummus Bros, founded in 2005 by Christian Mouysset and Ronen Givon, is a London-based chain of four restaurants serving healthy and tasty Mediterranean food, which caters for events and meetings as well as operates popups. To manage growth, it is important to have a scalable management system in place. At Hummus Bros we built online operational tools that help manage all aspects of the business. We also hired a COO to manage the day-to-day operations to allow the founders to focus on the long-term strategy. Secondly, it is critical to have strong quality control systems in place to ensure that your service and product remain consistent as you grow. Good ways of doing this are setting up a mystery shopper programme or making it easy for your customers to give you feedback on a regular basis. The third element to manage growth is to have effective reporting in place and regular board meetings to review these. This is crucial to be able to make effective directions and spot trends early on. At Hummus Bros we used a number of funding sources including bank debt, venture capital funds and private individuals investing using the Enterprise Investment Scheme (EIS) as well as bank overdrafts and credit cards. More recently we have been considering crowdfunding to raise capital to expand further. When raising money, it is key to present your vision and strategy as clearly as possible and what you have already done to achieve this vision. The expected return investors will be looking for is multiplying their investment by two to three over a period of three to five years. Finally, when dealing with multiple investors, agree with a subset of investors the amounts they are looking to invest as negotiating with too many people at the same time can prove difficult. I Christian Mouysset 74 - info - september october november //december



recent hr forum


clubs 24 SEPTEMBER

How to foster a culture of innovation Two presentations were given at the forum, with Andy Powell, European Marketing Director at global recruitment agency Hudson, speaking about how successful employers attract the right talent, and Abi Marchant, HR Director at Danone Waters & Danone Dairy UK setting out how the company drives innovation


n the war for talent, the winners will be those who are clear about what their offer is to potential recruits and how they deliver against those promises. Recent research by Hudson revealed top employer brands – those with a reputation for being a great place to work and who are successful in attracting talent – are more likely to: • Invest in a clearly defined employer brand and employee value proposition • have senior executive buy-in for the programme • assign clear organisational responsibilities • spend as much as 50% more on their employer branding activity than other brands. Those organisations are also more likely to employ targeted communications programmes. Social media in particular was singled out as an effective means of communicating with and engaging target talent with LinkedIn, Facebook and Twitter being the preferred channels. The key to getting your message right is, of course, understanding your target audience. For

The Danone Way Innovation is of particular importance to Danone because it is relatively small compared to its competitors in the UK food & drink market. Every aspect of the business is influenced by innovation – from the way customer relationships are managed to internal operations. At the heart of Danone’s culture of innovation is its strong Employer Value Position and the four pillars which encompass the ethos of the organisation: inspiring the leader in everyone, encouraging individuals to make an impact, focusing on health and working together. Danone encourages anyone to take a leading role no matter their

many employers, the challenge lies in the relative importance of relevant skills and experience versus mindset and values. Increasingly, successful employers are focusing on the latter, accepting that technical skills and industry knowledge can be acquired on the job, whereas attitude and behaviour are innate. Being clear about the competencies you’re seeking, what marks out your current top performers and what defines success in your organisation are the foundations of an effective recruitment strategy. Once you have the profile of your desired workforce, utilise psychometric testing to determine whether your applicants fit the bill. Finally, don’t overlook the value of your existing employees as ambassadors for your business. Our research showed that two thirds of top employer brands had a programme designed to communicate their employer brand internally and actively encouraged the participation of existing employees. It may be something of a cliché, but people really are the backbone of organisation success. Doesn’t it make sense that you invest in getting your talent acquisition strategy right? I Andy Powell

position within the company. For example, there have been occasions when interns have led new projects which they helped conceive. Danone therefore embodies a culture of empowerment and trust. This empowerment, however, is not without direction. Danone ensures that each employee understands their role and for those new to the business a strong emphasis is placed on coaching. Individuals must also take responsibility for their contributions and be prepared to receive feedback and take it on board. Collaboration is also actively

encouraged. Danone advocates a strong camaraderie and promotes collaborative working in order to achieve a common goal with all successes both collective and individual being celebrated. Finally, through its mission to bring health to the maximum number of people, Danone encourages a healthy lifestyle for its employees with well-being seminars, fitness classes and massages all provided. Through these four main pillars, therefore, the company aims to create what it calls the ‘Danone effect’. They believe that through living this, their people can be at their innovative best. I KC

info - november / december - 75




legal forum

New Deputy Chair for the Legal Forum as it looks to 2015


en Morrison, the Legal Director of Eurotunnel, has taken up the role of Deputy Chair of the Legal Forum alongside the Chair, Olivier Morel, a Partner at Cripps. Ken, who has been at Eurotunnel since 2002, is responsible for all operational and commercial legal affairs in both France and the UK. Prior to that he was the Head of Legal at Skandia Life, spent time in Paris as the UK/French lawyer at Le Breton and Associates, and was a solicitor in Linklaters’ UK and French property departments. He graduated from Kings College London with an LLB (Hons) and holds a Maitrise from Paris University 1. Says Forum Chair Olivier Morel: ‘I am thrilled Ken has

accepted my invitation to become our Deputy Chair; he has the energy and enthusiasm for such a role; he is also full of ideas and has the drive to see them through to fruition’. With its 2014 busy programme drawing to a close, the Forum is currently seeking views and inviting ideas on topics for 2015 from its members. Subjects are likely to range from specific ‘technical’ law issues that any self-respecting in house counsel must keep abreast of, such as the ever-developing concept of European company law, or the UK Bribery Act and its implications in France, to misnamed ‘soft issues’, such as dealing with the challenge of managing an in-house legal team in a

Franco-British enterprise; articulating English legal concepts in an intelligible way to a predominantly French Board; or devising a training programme on legal concepts for the non-legal staff of the organisation. The Legal Forum is open to privatepractice lawyers and general counsels of Chamber members – drawn from the wide breadth of industries represented across the Chamber’s membership. Anyone with an in-house legal team is actively encouraged to send along a representative to contribute to the lively debate on key legal topics and share experiences/learn from others on all matters of interest to those giving legal advice in a Franco-British environment! I

f o rt h co m i n g f o ru m s & c lu b s

HR Forum

Chair: Jennifer Westen, Group Director HR, International SOS When: 12 November, 8.30-10.00am Theme: Apprenticeship Speaker: Kevin Wilkinson, Senior Vice-President Human Resources ATOS UK and Ireland and Gary Griffiths, Head of Early Careers Programmes, Airbus UK Open to HR directors and managers

Finance Forum

Chair: John Peachey, Managing Director - CFO Global Markets, HSBC Bank Plc When: 14 November, 8.00-9.30am Theme: Brainstorming session. By application only

SME & Entrepreneurs Club

Co-chairs: Sébastien Delecour, Managing Director of Doublet UK Ltd, and Sophie Mirman, Owner and Founder of Trotters Childrenswear & Accessories When: 18 November, 8.30-10.00am Theme: From London to the rest of the world: how to unlock export opportunities Open to all SMEs and Entrepreneurs

Legal Forum

Chair: Olivier Morel, Partner, Cripps Deputy Chair: Ken Morrison, Legal Director, Eurotunnel When: 19 November, 9.00-10.30am Theme: Working session. By application only 76 - info - november / december

Cross-Cultural Relations Forum

Chair: Peter Alfandary, Head of French Team, Reed Smith LLP and Vice President of the French Chamber When: 20 November, 8.45-10.30am Theme: Mini masterclass on cross-cultural skills by Peter Alfandary. By application only

Climate Change Forum

Chair: Richard Brown, Chairman, Department for Transport Franchising Advisory Panel When: 2 December, 10.00am-12.00pm Theme: Energy storage: how new battery technology can unlock the renewable market Speaker: Scott McGregor, CEO Camco Clean Energy By application only

Luxury Club

Chair: Bertrand Michaud, Managing Director, Hermès GB Ltd When: 11 December, 8.15-10.00am Where: Bulgari Hotel Theme: Global trends and topical issues affecting the luxury sector Speaker: Richard Dickinson, Chief Executive, New West End Company. By invitation only All forums and clubs take place at the French Chamber unless otherwise indicated. For more information, please contact Frédérique Compain at fcompain@ccfgb.co.uk or +44 0207 092 6638

f o rt h co m i n g e v e n t s

12 Nov

19.15 - 22:30

18 Nov

18.30 - 22:00

19 Nov

18.00 - 20.00

21 Nov

08.00 - 10.00

Dîner des Chefs Where: Hélène Darroze at The Connaught, Carlos Place, Mayfair, London W1K 2AL Cost: £120+VAT per person Dress code: Business attire We invite you to step through the doors of the Connaught to meet Chef Hélène Darroze in person. She will be preparing the 5-course menu of the evening. Hélène enjoys unique relationships with her suppliers, stretching back many decades, and the exquisite ingredients they provide from field, farmyard and ocean, will be combined with uncompromising passion and skill in Hélène’s intuitive hands. Network with 60 to 70 fellow members who share your passion for gastronomy. Contact Frédérique Compain at fcompain@ccfgb.co.uk or 0207 092 6638

Rameau and les Arts Florissants Where: The Barbican Hall, London EC2Y 8DS Dress code: Business attire Founded by the eminent harpsichordist William Christie in 1979, Les Arts Florissants is one of the world’s most acclaimed ensembles performing Baroque and Classical vocal and instrumental music. On the 250th anniversary of the death of Jean-Philippe Rameau (1683–1764), Les Arts Florissants are exploring two little-known works composed to entertain the court at Fontainebleau: the heroic pastoral Daphnis et Eglé, created to enliven court hunting parties, and the one-act ballet. Open to Patron members & their spouses (Main representatives only) Contact Cécilia Gonzalez at cgonzalez@ccfgb.co.uk or 0207 092 6642

Rendez-vous chez…Caudalie Where: Caudalie Boutique 39 Monmouth street, Covent Garden, London WC2H 9DD Cost: £20+VAT per person Dress code: Lounge suit For 25 guests this will be a chance to relax and network in Caudalie’s new boutique in Covent Garden, while discovering the brand’s products and enjoying wine from its own Bordeaux vineyard. Caudalie experts will be on hand to provide mini treatments and participants will receive an exclusive 20% discount on all purchases. There will be a prize draw, and each guest will receive a complimentary goody bag. Contact Elizabeth Hodkinson at ehodkinson@ccfgb.co.uk or 0207 092 6643

Breakfast with Marc Pontet Speaker: Marc Pontet, Global Chief Executive Officer, Asendia (La Poste) (NEW SPEAKER!) Where: The Four Seasons Hotel at Park Lane, Hamilton Place, London W1J 7RD Cost: £30 +VAT per person; £50+VAT – special price for two Dress code: Business attire Marc Pontet studied at the Institute of Political Studies in Bordeaux and after graduating began his career at La Poste. In 2001, he was appointed Deputy Director of the President’s Cabinet and Secretary of the La Poste Board of Directors. From there he became Head of the Mail Division’s Strategy Department, then Head of Marketing and Sales. Finally, he was appointed Executive Vice President and Chairman of La Poste Global Mail in 2009. Since July 2012, Marc Pontet has been the Chief Executive Officer of Asendia, the joint-venture between La Poste and Swiss Post which provides cross-border postal solutions to more than 6,000 international customers in 15 countries and three continents. Contact Sonia Olsen at solsen@ccfgb.co.uk or 0207 092 6644

info - november / december - 77

f o rt h co m i n g e v e n t s

27 Nov

19.00 - 22.30

Franco-British Business Awards 2014 Where: The May Fair Hotel, London W1J 8LT Main sponsors: Eurostar, HSBC, Mazars Partners: Invest in France Agency, UKTI Press Partner: Ici Londres Cost members: £100+VAT per person; £900+VAT for a table of 10 Cost non-members: £120+VAT per person Dress Code: Business attire Contact Elizabeth Hodkinson at ehodkinson@ccfgb.co.uk or 0207 092 6643 The Franco-British Business Awards, organised by the French Chamber under the high patronage of the French Ambassador to the UK, and the British Ambassador to France, were launched in 2000 to celebrate the bilateral trade and economic links between France and the UK. They acknowledge the accomplishments of French and British companies of all sizes, from startups and entrepreneurs to blue chips on both sides of the Channel, in 4 categories: Innovation, SME/ Entrepreneur, Large Corporate and Jury.

Main Sponsors:

28 Nov

08.30 - 17.30


Press Partner:

Franco-British Business Forum Where: At The Pullman London St Pancras Sponsors: Eurostar, HSBC, Mazars, DHL Supporting Sponsors: Boulle international, Bryan Cave , Invest in France, Ubifrance, UK Trade & Investment Partners: British Chambers of Commerce, CCE Conseillers du Commerce Extérieur, CCI de Bourgogne, CCI France International, CCI Paris île-de-France, CCI International Rhône-Alpes, Enterprise Europe Network Cost: One day only package £290+VAT Cost: All inclusive package (including B-to-B meetings, roundtables, catering, access to the expert village, accommodation and an invitation to the Franco-British Business Awards dinner) £600+VAT Dress code: Business attire A platform for directors and decision makers from French and British companies to meet for topical roundtable discussions in four top sectors of activity – ICT, Silver Economy, Creative Industries, Energy – and tailored B-to-B meetings with potential clients and partners. www.fbbf.co.uk

Main Sponsors:

Supporting Sponsors:

78 - info - november / december

Patron Members of the French Chamber of Commerce in Great Britain

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Date : 31/05/11 Validation DA/DC : Validation Client



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Profile for French Chamber of Commerce in Great Britain

INFO_Magazine_Currency, Conventional to Digital  

INFO, the French Chamber of Commerce in Great Britain's bi-monthly magazine, is the only Franco-British business publication in the UK. INFO...

INFO_Magazine_Currency, Conventional to Digital  

INFO, the French Chamber of Commerce in Great Britain's bi-monthly magazine, is the only Franco-British business publication in the UK. INFO...

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