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[Trade Finance Global]

Diageo, Unilever and Facebook: Lessons Learned Around FX Volatility

Trade Finance Global heard from Stephen Hubble, Chief Analyst at Centtrip, on how even the largest businesses struggled to deal with currency volatility and market uncertainty as a result of the current climate.

Diageo, Unilever and Facebook: Lessons Learned Around FX Volatility

All organisations, from sole traders to the world’s biggest brands face overseas costs in some way, shape or form. From the immediate costs of foreign exchange, international payments and logistical costs to less obvious influences such as price changes due to an increase in supply chain costs or a slowdown in demand because currency costs have made locations cost inefficient.

Take, for example, Diageo. Once the world’s largest distiller and proudly counting Smirnoff, Johnnie Walker, Baileys and Guinness in its portfolio, the drinks group warned last September that currency fluctuations and volatility in emerging markets had hit its full-year profits with sales £454 million lower during the financial year ended 30 June 2018.

Unilever is another such example. The multinational company said its revenue and profit decreased by 8.9 per cent, according to a company transcript, as trade tensions between the US and China continued to ruffle corporate earnings. Facebook also felt the pinch, having partly attributed its slower-than-expected growth to currency swings.

Unprotected exposure

The key learning from this abridged list of examples is that no one is immune from currency fluctuations. However, whatever the size of your company, if you trade overseas you can still manage these sudden swings well and minimise their negative impact on your business, or in some cases even to take advantage of them. How?

Read the article in full: Trade Finance Global


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