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

Published 

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:

  • The average earnings per share (EPS) impact from currency volatility reported by North American companies in Q3 2021 went up to $0.04 — four times greater than the recommended standard of $0.01 EPS impact.
  • Publicly traded North American companies that qualified to be monitored in the Q3 2021 CIR reported a combined $9.32 billion in positive currency impacts, and $929 million in negative currency impacts.
  • North American companies indicated the Canadian dollar (CAD) as the most impactful currency, with 33% of companies referencing it as impacting revenues; the euro (EUR) was second with 27% of North American companies identifying it as impactful.
  • The euro was the currency most mentioned as impactful by European companies on earnings calls, followed by the Swedish krona and the U.S. dollar ranking third.
  • The top five industries that experienced the greatest impact from currencies in North America were (in ranked order): machinery, trading & distribution, professional services, biotech & pharmaceuticals, healthcare equipment & supplies, and electronic equipment, and instruments & components.

“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.

Most recent episodes

£15 Billion Stimulus Pumped into UK Economy to Ward Off Recession Fears

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 7th June...

04:44

Advantage Treasury

Eleanor Hill is joined in the virtual TreasuryCast studio by Nicolas Cailly and Philippe Penichou (Societe Generale) to look at treasury trend predictions for the remainder of 2022, with a particular focus on virtual accounts. In this deep dive into current and future treasury priorities, our guests...

24:22

40th Annual New York Cash Exchange: What Can Treasurers Expect?

Ahead of the 40th annual New York Cash Exchange, two of TMANY's distinguished board members, David Miller and Timothy T. Hesler, CTP, provide TMI CEO, Robin Page, with a quickfire rundown of what attendees can expect from this year’s conference. Our guests share their aspirations for the event, explain...

09:58

Expectation-Beating Inflation Prints Ratchet Up Pressure on Monetary Policy

Welcome to the third edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 9th May...

04:48

Making the Sustainable Transition: A Roadmap to ESG in Treasury

Over the last 18 months, Societe Generale has experienced a steady increase in requests from their corporate clients to integrate ESG features in treasury management.  Louis-David Rouyer, Philippe Pougeard, and Emmanuelle Petelle (Societe Generale) provide TMI's Eleanor Hill with a whistlestop run...

22:24

Lift Off for Fed Rate Rises

Welcome to the latest edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 5th of...

04:58

Treasury in 2022 and Beyond

Industry experts Bob Stark (Kyriba) and Sebastian di Paola (PwC) join TMI's Editor, Eleanor Hill, to explore the very latest treasury trends - and to discuss how smart treasurers can get ahead of th...

43:21

How BearingPoint Harnessed Data-Driven Forecasting with CashAnalytics and SAP

Listen back to our recent forecasting masterclass, where Group Treasurer Eveline Stam, and Conor Deegan (CashAnalytics) provided TMI's Eleanor Hill with a comprehensive overview of how consultancy firm BearingPoint achieved company-wide cash forecasting nirvana by combining specialist solutions from...

37:14

The 3 T’s of The Future: Tech, Treasury, and Transformation

Over the past two years, an increasingly dynamic environment has not only accelerated technology development – from quantum computing to blockchain technology, and even the metaverse – but also technology adoption, bridging colleagues and breaking down silos in a remote work world. In this podcast,...

44:02

Monetary Policy Continues to Drive Markets as Ukraine Invasion Weighs on March Meetings

Welcome to the second edition of Liquidity Link Live, your exclusive market analysis provided by Northern Trust Asset Management, one of the world’s largest cash managers. Tune in each month to discover the very latest insights on the UK, Eurozone and US markets. This edition was recorded on the 3rd of...

05:25