Research

Kyriba’s July 2023 Currency Impact Report

CIR Q3 2019 form image.jpg

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

About the Report

The July 2023 Kyriba Currency Impact Report analyzes the reported effects of currencies to North American and European companies’ earnings during the first quarter of 2023. 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.

Table of Contents


 

CIR Backpanel

Currency Impact Report – Overview

Kyriba Currency Impact Report: Key Findings

  • The collective quantified negative impact reported by both North American and European companies totaled $22.52 billion in Q1 2023, a 25.5% decrease from Q4 2022.
  • 14% of corporates studied (166/1200) quantified +/- impacts totaling $32.21 billion ($30.22 billion headwinds), ($1.99 billion tailwinds).
  • The euro was the currency most mentioned as impactful by North American and European companies, the Argentinian peso was the most volatile currency.
  • 162 North American and European companies reported currency headwinds in Q1 2023. Of those companies, 152 (93.8%) companies quantified their FX impacts.

Total Quantified Currency Impacts by North American and European Companies (Billions)

Total Quantified Currency Impacts by North American and European Companies (Billions) table

North American Companies’ Quantified Currency Impact (Billions)

North American Companies’ Quantified Currency Impact (Billions) table

European Companies’ Quantified Currency Impact (Billions)

European Companies’ Quantified Currency Impact (Billions) table

Top 5 Volatile G20 Currencies

Top 5 Volatile G20 Currencies table

Top 5 Volatile Currencies as Weighted by GDP Percentage

Top 5 Volatile Currencies as Weighted by GDP Percentage table

CIR Backpanel

Currency Impact on North American Corporate Earnings

Negative Currency Impact to North American Companies (Billions)

Negative Currency Impact to North American Companies (Billions) table

Average EPS Impact Reported by North American Companies

Average EPS Impact Reported by North American Companies table

*Industry Standard MBO of Less than $0.01 EPS Impact

Currency Impact on North American Corporate Earnings

North American companies reported a $21.24 billion impact in Q1 2023, 27% smaller than the impact in Q4 2022.1

The average earnings per share (EPS) impact reported by North American companies in Q1 2023 was $0.06, six 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.

Top Currencies Referenced by North American Companies as Impactful

Top Currencies Referenced by North American Companies as Impactful Q2-4 2022 table
Top Currencies Referenced by North American Companies as Impactful Q1 2023 table

The euro was the most mentioned currency, a continuation from the prior two quarters. The Canadian dollar was the second most-mentioned, followed by the Chinese renminbi, the Japanese yen, and the Brazilian real. The euro was the most volatile currency weighted by GDP (page 6).

Number and Percentage of North American Companies Reporting and Quantifying Negative Currency Impacts

Number and Percentage of North American Companies Reporting and Quantifying Negative Currency Impacts

Average Negative Impact to North American Companies (Millions)

Average Negative Impact to North American Companies (Millions)

Percentage of North American Companies That Fielded Analyst Questions

Percentage of North American Companies That Fielded Analyst Questions table

In Q1 2023 earnings calls, 3 percent of North American companies that reported impacts fielded analyst questions.

Most Impacted North American Industries

Most Impacted North American Industries table

CIR Backpanel

Currency Impact on European Corporate Earnings

Negative Currency Impact to European Companies (Billions)

Currency Impact on European Corporate Earnings table

Currency Impact on European Corporate Earnings

Stable from last quarter, European companies reported no change in the negative currency impacts, with companies reporting $1.28 billion in FX-related losses.2

Of the 350 Europe-based multinationals analyzed, 2.6% reported headwinds in Q1 2023. Of those, 67% 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

Top Currencies Referenced by European Companies as Impactful table
Top Currencies Referenced by European Companies as Impactful with flags table

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

Number and Percentage of European Companies Reporting and Quantifying Negative Currency Impacts

Number of European Companies Reporting Negative Currency Impact table

Average Negative Impact to European Companies (Millions)

Average Negative Impact to European Companies (Millions) table

Percentage of European Companies That Fielded Analyst Questions

Percentage of European Companies That Fielded Analyst Questions table

In Q1 2023 earnings calls, 2 percent of European companies that reported impacts fielded analyst questions.

Most Impacted European Industries

Most Impacted European Industries table

CIR Backpanel

Comparison of Currency Impact to North American and European Companies

Average Quantified Negative Currency Impact (Millions)

Average Quantified Negative Currency Impact (Millions)

Size of Quantified Negative Currency Impact (Billions)

Size of Quantified Negative Currency Impact (Billions) image

Number of Companies Reporting Currency Impacts

Number of Companies Reporting Currency Impacts image

Percentage of Companies Reporting Impacts That Fielded Analyst Questions

Percentage of Companies Reporting Impacts That Fielded Analyst Questions image

Quantified Negative Currency Impact (Billions)

Quantified Negative Currency Impact (Billions) graphs

Number of Companies Reporting Negative Currency Impact

Number of Companies Reporting Negative Currency Impact table

 

Want to learn more about how volatility in the currency market has impacted earnings? Join Kyriba FX experts in this dedicated webinar to breakdown the key insights from the Kyriba’s July 2023 Currency Impact Report.