FX Impacts Rock Multinationals for a Record $49 Billion
Quarterly report finds North American companies hit by $34 billion in currency headwinds, Up to 3,583% in less than a year
SAN DIEGO, October 18, 2022–(BUSINESS WIRE)–Kyriba’s Currency Impact Report (CIR), a comprehensive quarterly report that details the impacts of foreign exchange (FX) risk among 1,200 multinational companies based in North America and Europe that account for at least 15% of their revenues foreign sources, reached $49.09 billion in total earnings impacts due to currency volatility. The combined group of companies reported headwinds of $11.82 billion and headwinds of $37.27 billion in the second quarter of 2022. North American companies reported headwinds of $34.25 billion in the second quarter of 2022, an increase of 134% over the previous quarter and an increase of 3,583% since the third quarter. 2021. European businesses reported a 68% increase in negative currency effects, with businesses reporting $3.02 billion in currency-related headwinds.
“Multinational companies with a major impact on the foreign exchange market are likely to see their net worth, or earnings per share, decline,” said Wolfgang Koester, Kyriba Chief Evangelist. “Companies that don’t monitor and manage their currency exposures with modern industry best practices will be the ones to flag the impacts in earnings calls. With dollar strength at its highest level in 20 years, CFOs need to eliminate risky EPS, and CEOs need to understand the vulnerability of their balance sheets and income statements to supply chain risks, inflationary pressures and currency volatility.”
Highlights from Kyriba’s October 2022 Currency Impact Report include:
The average earnings per share (EPS) impact of currency volatility reported by North American companies in the second quarter of 2022 increased to $0.10.
North American listed companies reported $34.25 billion in headwinds
North American publicly traded companies reported $220,000 in tailwinds.
North American businesses cited the Russian ruble (RUB) as the most impactful currency, with 33% of businesses citing it as impacting revenue; the Canadian dollar (CAD) was second at 26.7%, and the euro (EUR) was third, with 20% of North American businesses identifying it as having an impact.
The euro is the currency most mentioned as having an impact on earnings calls by European companies, followed by the dollar and the rouble.
The top five industries that suffered the greatest currency impact in North America were (in order of ranking): machinery, trade and distribution, professional services, healthcare equipment and supplies, biotechnology and pharmaceuticals, and chemicals.
“The currency impact increased significantly in the last quarter, with an average impact of $0.10 on North American corporate EPS, as global market volatility led to a $49 billion decline in earnings in due to currency exposure What is more critical today in this environment of volatility and uncertainty is the ability of CFOs and risk managers to leverage best practices in cash management. business, getting more sophisticated analytics to make FX programs more effective in combating the effects of currency headwinds,” Koester said.
To learn more about currency impacts on specific industries and which currencies have impacted multinationals the most, download Kyriba’s October 2022 Currency Impact Report here.
About Kyriba Corp.
Kyriba empowers CFOs, Treasurers and their IT counterparts to transform treasury, payments, working capital and connectivity solutions to enable liquidity as a dynamic, real-time driver of growth and value creation . Kyriba is a secure and scalable SaaS platform that leverages artificial intelligence, automates payment workflows and enables thousands of multinationals and banks to maximize growth, protect against fraud and financial risk losses and reduce operational costs. With more than 2,500 customers worldwide, including 25% Fortune 500 and Eurostoxx 50 companies, Kyriba handles more than 1.3 billion banking transactions per year and 250 million payments for a total value of 15 trillion dollars a year.
Kyriba is headquartered in San Diego with offices around the world. For more information, visit www.kyriba.com.
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