Kyriba’s Currency Impact Report (CIR), a comprehensive report detailing the impacts of foreign exchange (FX) exposures among 1,200 multinational companies based in North America and Europe, revealed negative impact from currency volatility of $6.16 billion. European companies experienced greater headwinds than their North American counterparts in the fourth quarter of 2020, reporting $4.77 billion in FX-related negative impact. By comparison, North American corporations reported $1.39 billion in negative impact. Kyriba is a global leader of treasury, finance and IT cloud software.
“Without additional U.S. Government stimulus spending in the foreseeable future, North American CFOs are now on notice that this quarter was their last chance to address currency exposure risks,” said Wolfgang Koester, Chief Evangelist for Kyriba. “The losses North American companies suffered in this quarter were preventable. In order to manage currency exposure and reduce negative impacts from inevitable spikes in volatility to come, CEOs are expecting their finance chiefs to be better prepared.”
Highlights from the Q4 2020 Kyriba Currency Impact Report include:
For the second quarter in a row, North American companies indicated the euro (EUR) as the most impactful currency, with 33 percent of companies referencing the euro in their Q4 earnings calls. The Brazilian real (BRL) moved up a spot as the second most referenced currency.
The British pound (GBP) was the third most impactful currency for North American companies, followed by the Chinese yuan renminbi (CNY) and Swiss franc (CHF).
The average earnings per share (EPS) impact from currency volatility reported by North American companies in Q4 2020 dropped to $0.03—three times greater than the industry standard MBO of less than $0.01 EPS impact.
The top five industries that experienced the greatest impact from currencies in North America (in order) were electronic equipment, professional services, healthcare equipment, biotech and pharmaceuticals and technology hardware. The top five industries that reported the greatest impact for Europe (in order) were electronic equipment, biotech and pharmaceuticals, chemicals, healthcare equipment and auto components.
Publicly traded European companies that qualified to be monitored in the Q4 2020 report had a collective currency loss of $4.77 billion.
The U.S. dollar (USD) remained the currency most mentioned as impactful by European companies during Q4 2020 earnings calls, followed by the euro, with the Swedish krona (SEK) ranked third.
The Kyriba Currency Impact Report is a comprehensive report detailing the impact of foreign exchange exposures among publicly traded companies. All companies in the report do business in more than one currency, with at least 15 percent of their revenue coming from nations that are located outside of their headquarters.
Source: AETOS Wire