Companies Report $11.98 Billion in Impact to Revenue Due to Currency Volatility

Published: February 10, 2022

Kyriba’s Currency Impact Report (CIR), a comprehensive quarterly report which details the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe, reveals $11.98 billion in total impacts to earnings from currency volatility.

The combined pool of corporations reported $9.86 billion in tailwinds and $2.13 billion in headwinds in the third quarter of 2021. North American companies experienced greater tailwinds than their European counterparts, reporting $9.32 billion in FX-related positive impacts — a decrease of 145% from the previous quarter. By comparison, European corporations reported $541 million in positive currency impacts — a decrease of 20% from the previous quarter.

“Headwinds and tailwinds combine to reveal the vulnerability North American and European multinational corporations’ revenues and earnings per share have to currency movements. As the era of low interest rates and, potentially, the strong US Dollar concludes, these quantified impacts are a troubling warning sign as this next environment will become more challenging for CFOs to achieve the industry standard MBO of less than $0.01 EPS impact and protect their balance sheets and income statements from currency volatility,” said Wolfgang Koester, Chief Evangelist for Kyriba. “CFOs have a long way to go to mitigate risk and include substantial currency gains as part of their earnings revenue.”

Highlights from the January 2022 Kyriba Currency Impact Report include:

    “Supply chain disruption, currency volatility and inflation are testing CFOs and treasurers’ enterprise liquidity strategies. For the remainder of 2022, execution of applicable best practices to protect shareholder value will be a large driver for growth and necessary risk reduction. CFOs need to demonstrate to their investors and Boards how to best optimize enterprise liquidity in this new economic environment. They are going to be expected to demonstrate strong balance sheet and cash forecasting precision with various cash flow scenarios,” said Koester.

    The Kyriba Currency Impact Report is a comprehensive report detailing the impact of foreign exchange exposures among publicly traded companies. All companies analyzed in the report conduct business in more than one currency, with at least 15% of their revenue coming from nations located outside of their headquarters.

    To learn more about specific industries affected and which currencies were most impactful to multinationals, download the latest Kyriba Currency Impact Report here.

    Tags:Kyriba
    Article Last Updated: February 10, 2022