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January 30, 2020 4:50 PM

In what way is Sdiptech affected by Brexit?

The UK will leave the European Union on 31 January - often called Brexit Day. As the UK is one of Sdiptech's most important markets, we often get questions about how we prepare for this event. The UK's infrastructure has been considered under-invested for many years. And since the end of 2008, the UK has followed a fiscal policy called austerity, which is a program aimed at reducing public spending and the country's financial deficit.[1] However, with new Prime Minister Boris Johnson promising "huge investments in infrastructure", the government has made it clear that they believe the program is over.

Thanks to our infrastructure focus, which primarily operates in local markets and with a limited portion of export, Brexit will have very small impact on our companies operating in the region. As an example, the demand for services for claims management of underground infrastructure or the establishment of traffic surveillance cameras, will not be affected by Brexit. Despite this, we have established detailed plans for all our UK companies. Among others, we keep larger inventories, that can mitigate the risk of a temporarily weakening GBP, or disturbances at border customs. In addition, and to avoid potential customs duties as well as import problems, some Asian shipping routes have been redirected straight to UK, without passing EU. Finally, and due to possible uncertainties regarding government funding pending Brexit, we have implemented general savings and precautionary measures with costs.

We will continue to keep track of the situation and maintain ongoing dialogues with our supply chains. Overall, we feel optimistic about the fact that there is now a final Brexit decision and that there are less uncertainties about the future.