Kyriba’s February 2024 Currency Impact Report

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

About the Report

The February 2024 Kyriba Currency Impact Report analyzes the reported effects of currencies to North American and European companies’ earnings during the second quarter of 2023. To obtain this information, Kyriba analyzed the earnings calls of 1,700 publicly traded North American and European (850/850) companies as part of a continued effort to provide insight into how foreign exchange impacts organizations. The size of European companies included in the current index was increased in Q2 2023 to 850. 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 $16.01 billion in Q3 2023, a 20.5% decrease from Q2 2023.
• 22.8% of corporates studied (388/1700) quantified +/- impacts totaling $29.93 billion ($16.01 billion headwinds), ($13.92 billion tailwinds).
• The euro was the currency most mentioned as impactful by North American and European companies, while the Argentine peso was the most volatile currency.
• 197 North American and European companies reported currency headwinds in Q3 2023. Of those companies, 119 (60.4%) companies quantified their FX impacts.

Currency Impact on North American Corporate Earnings

North American companies reported a $7.05 billion impact in Q3 2023, 51.1% smaller than the impact in Q2 2023.¹

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.

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

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. The Chinese renminbi was the third most volatile currency weighted by GDP (page 6).

In Q3 2023 earnings calls, 6 percent of North American companies that reported impacts fielded analyst questions.

Currency Impact on European Corporate Earnings

European companies reported $8.96 billion in FX-related losses, about 56.6% greater than the previous quarter.²

Of the 850 Europe-based multinationals analyzed, 12.4% reported headwinds in Q3 2023. Of those, 61.9% quantified their negative impacts (see page 15).

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

The euro was the most mentioned currency in earnings calls for Europe, followed by the United States dollar and the Swedish krona. The British pound was the fourth most mentioned, followed by the Danish krone. The euro was the most volatile currency weighted by GDP, respectively (page 6).

In Q3 2023 earnings calls, 4 percent of European companies that reported impacts fielded analyst questions.