Kyriba May 2022 Currency Impact Report

A Quarterly Report Assessing the Impact of Foreign Exchange to North American and European Corporate Earnings

About the Report

The May 2022 Kyriba Currency Impact Report analyzes the reported effects of currencies to North American and European companies’ earnings during the fourth quarter of 2021. To obtain this information, Kyriba analyzed the earnings calls of 1,200 publicly traded North American and European companies as part of a continued effort to provide insight into how foreign exchange impacts organizations. The companies included in this data set are large multinational firms doing business in more than one currency with at least 15% of their revenue coming from overseas.

Currency Impact Report – Overview

Kyriba Currency Impact Report — Key Findings

• The collective quantified negative impact reported by both North American and European companies totaled $6.74 billion in Q4 2021, a 215% increase from Q3 2021.
• 16% of corporates studied (187/1200) quantified +/- impacts totaling $11.21 billion ($6.74 billion headwinds), ($4.47 billion tailwinds).
• The Canadian dollar was the currency most mentioned as impactful by North American companies. The euro was the currency most mentioned as impactful by European companies.
• 132 North American and European companies reported currency headwinds in Q4 2021. Of those companies, 112 companies quantified their FX impacts.

Currency Impact on North American Corporate Earnings

Currency Impact on North American Corporate Earnings

North American companies reported a $4.56 billion collective loss in Q4 2021, ending a downward trend and a 390% increase in the magnitude of aggregate headwinds.¹

The average earnings per share (EPS) impact reported by North American companies in Q4 2021 was $0.04, four times greater than the industry standard MBO of less than $0.01 EPS impact and a maintenance of the level set by the previous quarter.

¹ Impacts are likely underestimates as most companies with currency headwinds generally do not report them.

The Canadian dollar (CAD) was the most mentioned currency, continuing a trend with the CAD being the most mentioned from Q3 2021 as well. The euro was the second most-mentioned, followed by the Chinese renminbi (CNY), and the Russian ruble (RUB). The euro was the most volatile weighted by GDP, while the CNY was the third most volatile and the GBP was the fourth most volatile (page 6).

Currency Impact on European Corporate Earnings

Negative Currency Impact to European Companies (Billions)

Currency Impact on European Corporate Earnings

Increasing from last quarter, European companies reported an 80% percent decrease in negative currency impacts, with companies reporting $2.18 billion in FX-related losses.²

Of the 350 Europe-based multinationals analyzed, 5% reported headwinds in Q4 2021. Of those, 61% quantified their negative impacts (see page 15).

² Impacts are likely underestimates as most companies with currency headwinds generally do not report them.

Top Currencies Referenced by European Companies as Impactful

The euro was the most mentioned currency in earnings calls for Europe, followed by the Swedish krona (SEK) and US dollar (USD). The Great British pound (GBP) was the fourth most mentioned, followed by the Danish krone (DKK). The euro and the pound were all found to be in the top 5 most volatile currencies weighted by GDP as well (page 6).

Number of European Companies Reporting Negative Currency Impact & Percentage of European Companies Quantifying Impacts

Average Negative Impact to European Companies (Millions)

Percentage of European Companies That Fielded Analyst Questions

In Q4 2021 earnings calls, 10 percent of European companies that reported impacts fielded analyst questions.

Most Impacted European Industries

Comparison of Currency Impact to North American and European Companies

Quantified Negative Currency Impact (Billions)

Number of Companies Reporting Negative Currency Impact