Kyriba’s latest Currency Impact Report (CIR) found that the currency impact on earnings reported by both North American and European companies totaled $30 billion in Q3 2023 ($16.01 billion headwinds and $13.92 billion tailwinds). The CIR analyzes the earnings calls of 1,700 publicly traded North American and European companies as part of a continued effort to provide insight into how foreign exchange impacts the revenue, earnings and cash flow of global organizations.
“While the overall currency impact hasn’t greatly fluctuated since the previous quarter, market volatility continues to persist meaning that all global organizations must be on watch to ensure they understand the impact that currency can have on their bottom line,” said Melissa Di Donato, Chair and CEO at Kyriba. “With the looming prospect of interest rate reductions coming later this year, now is the time to be more diligent about managing FX risk.”
“The USD staged a strong comeback in the quarter, but it was not enough to erase the headwinds that many UK and European based companies experienced,” said Andy Gage, senior vice president of FX Solutions and Advisory Services, Kyriba. “Given the stronger performance of the GBP and European currencies against the USD at the end of 2023, we expect the European currency headwinds to strengthen significantly, potentially setting European MNCs up for record currency headwinds in 2024.”
Highlights from the Q3 2023 Kyriba Currency Impact Report include:
-
Publicly traded North American companies reported $16.01 billion in headwinds.
- Down 20% from last quarter
-
Publicly traded North American companies reported $13.92 billion in tailwinds.
- Up $6.4M from last quarter
- The average earnings per share (EPS) impact reported by North American companies in Q3 2023 was $0.05, five times greater than the industry standard MBO of less than $0.01 EPS impact.
- The North American industries most impacted include: Healthcare equipment and supplies; machinery, trading and distribution; life sciences; chemicals; biotech and pharmaceutical.
- The euro was the most mentioned currency. The Chinese renminbi was the second most-mentioned, followed by the Great British pound, the Canadian dollar, and the Japanese yen. While the Chinese renminbi was the third most volatile currency weighted by GDP.
- European companies reported $8.96 billion in FX-related impacts, about 56.6% greater than the previous quarter. Of the 850 Europe-based multinationals analyzed, 12.4% reported headwinds in Q3 2023. Of those, 61.9% quantified their negative impacts.
To learn more about FX impacts to specific industries and which currencies were most impactful to multinationals, download the January 2024 Kyriba Currency Impact Report here.
About Kyriba Corp.
Kyriba empowers CFOs, Treasurers and IT leaders to transform liquidity performance and drive value creation through data-driven financial decisions. Kyriba is a secure, scalable SaaS platform that delivers intelligence and financial automation enabling thousands of multinational corporations and banks to maximize growth, improve financial resilience and increase operational efficiency. For 3,000 clients worldwide, including 25% of Fortune 500 and Euro Stoxx 50 companies, Kyriba manages more than 3 billion bank transactions and $15 trillion in payments annually.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215622501/en/