Kyriba’s Currency Impact Report Reveals $27.87 Billion in Total FX Volatility for North American and European Multinational Corporations

Published: November 10, 2021

Kyriba’s Currency Impact Report (CIR), a comprehensive quarterly report that details the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe, reveals $27.85 billion in total impacts to earnings from currency volatility. The combined pool of corporations reported $23.62 billion in tailwinds and $4.25 billion in headwinds in the second quarter of 2021. North American companies experienced greater headwinds than their European counterparts, reporting $2.32 billion in FX-related negative impacts -- a decrease of 153% from the previous quarter. By comparison, European corporations reported $1.93 billion in negative impacts – a decrease of 45% from the previous quarter.

“Despite the overwhelming tailwinds North American multinationals experienced this quarter, positive impacts are not a positive development. Headwinds and tailwinds reveal the vulnerability North American and European multinational corporations’ revenues and earnings per share have to currency movements,” said Wolfgang Koester, Chief Evangelist for Kyriba. “With many reporting 10% or more of earnings affected by currency gains or losses, protecting the balance sheet and income statement are critical components of a CFO’s enterprise liquidity strategy.”

“Supply chain disruption and inflation will test CFOs and treasurers’ liquidity strategies and application of best practices to protect EPS, drive growth and reduce supply chain risk in the coming months. Cash forecasting precision and the ability to deliver multiple cash flow scenarios will be expected of CFOs as they demonstrate to the Board how to best optimise enterprise liquidity. The capacity for buyers to inject liquidity into the supply chain and help suppliers access cash to remain solvent is becoming mandatory. This needed capacity will be especially challenging as higher borrowing costs typically stimulates fewer opportunities to return cash to stakeholders,” said Koester.

Highlights from the October 2021 Kyriba Currency Impact Report include:

The Kyriba Currency Impact Report is a comprehensive report detailing the impact of foreign exchange exposures among publicly traded companies. All companies analysed 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 October 2021 Kyriba Currency Impact Report here.