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Key takeaways on capturing and managing FX exposure

In their presentation on  FX exposure management, Rob Waddell and Mark Stegman from Brown-Forman, the 'producer and marketer of fine quality beverage alcohol brands',  they listed the key takeaways from their experience:

  • first, understand the company's overall risk profile and risk tolerance AND remember that hedging only delays the impact FX exposure, it buys you time
  • develop a system or process to capture true global FX exposure, including US functional FX B/S and foreign functional earnings translation
  • hedge or at least identify and aggregate FX exposure centrally to ensure you take advantage of natural offsets
  • consider extending hedge tenor to reduce year over year volatility
  • further reduce Earnings Per Share volatility by ensuring hedge accounting is achieved.

 


Excellent advice from experienced practitioners.

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