Success Stories

In the past five years, Hubbell has grown largely through acquisitions, which has increased the company’s international sales from single digits to approximately 20 percent. This global growth has been accompanied by various new risks, including exposure to foreign exchange (FX), across manufacturing divisions and subsidiaries in the U.S., Canada, Puerto Rico, Italy, Brazil, Switzerland, China, Mexico, Australia, and the United Kingdom.

For the past 16 years, Jabil has achieved double-digit growth by strategically building new customer relationships, entering new markets, expanding services, and forging new global operations in key worldwide locations. A natural byproduct of this successful business strategy is exposure to volatility in foreign currencies.

When Frank Pirozzi joined Red Hat as Assistant Treasurer, the goal of eliminating FX surprises was already in place. An effective methodology for achieving that goal, however, was not clearly articulated. The company-wide ERP system did what it was supposed to do very well, but it provided no insight into FX exposures without extensive manual work. “If we wanted to understand something like a Japanese yen/Australian dollar exposure, we had to dig down into our ERP system and find it first,” Frank says. “This involved hours of forensic investigation using a yellow pad and a pencil.”

When a combination of rapid international growth, currency volatility, and a lack of visibility into exposure data began to negatively impact the Other Income line on the P&L statement, the treasury team at Plantronics acted quickly to implement a new process for managing foreign exchange. A cross-functional group from treasury, accounting, tax, and IT worked together to correct multicurrency accounting and remeasurement issues and establish a systematic process for accurately identifying, understanding, and managing the company's true FX exposure and risk.

Under the leadership of a new treasurer with a strong FX background, FLIR’s approach to managing foreign exchange exposure and risk has undergone a dramatic transformation over the past several years. What used to be an informal and labor-intensive manual process is now a structured, automated FX management program that elevates the benefits of exposure elimination and hedging beyond treasury to the corporate level, both strategically and operationally.

ADC Telecommunications used FiREapps to achieve ERP Exposure Data Visibility to Cut Costs and Reduce FX Risks in Less than 30 Days.

A leading provider of innovative merchandising systems for the retail and apparel industries with revenues in excess of US $1B had recently experienced a material impact to earnings as a result of foreign exchange volatility. In an effort to improve earnings predictability and the efficacy of its foreign exchange program, the Treasury department was tasked with finding a fast, yet cost effective solution.

A leading provider of electronic design automation software and services used to design complex integrated circuits for the global semiconductor and electronics industries was interested in increasing efficiencies and improving the overall compliance and effectiveness of its Foreign Exchange Risk Management program.

A leading provider of demand chain software solutions with revenues of approximately US $400m recently executed an acquisition of an industry rival. As a result the company had the daunting challenge of integrating the people, processes, and systems of the two companies. During this transformation, the client relied on the services and technologies provided by FiREapps™ to eliminate currency risk and integrate the foreign exchange programs across the newly formed entity.

A leading global provider of electronic payment solutions with operations located in the US, Brazil, China, Hungary, Mexico and the United Kingdom with reported revenues of US$ 260 million in 2002, operating income of USD 1.6 million experienced a material foreign exchange loss of USD 6.0 million and could not explain why.

During the surge in foreign exchange volatility in late 2008 and early 2009, a leading consulting firm sustained a significant and material foreign exchange loss. This loss was seen as a wake-up call by the newly appointed Assistant Treasurer as it exposed some cracks in the foundation of the firm’s FX Risk Management Program. As the treasury team tried to determine the reason for the FX loss, they concluded that they were unable to capture a timely, accurate, and complete view of the firm’s foreign exchange exposure, despite having conducted all business transactions within their SAP system. This realization, combined with the Assistant Treasurer’s vision for increasing the automation of core treasury processes, led the firm to engage FiREapps.

This international, premier provider of consulting services, with a global team of more than 400 consultants working from more than 60 locations in major world cities, pioneered the establishment of a presence in China and other emerging markets. Over five years, the firm’s geographic distribution of revenue showed a shrinking Americas share, a growing Asia‐Pacific share, and a stable European share that represented more than one‐third of revenues. The firm had also experienced five acquisitions since 2008, gaining a growing number of disparate ERP systems, while a lean, single‐staffed treasury lacked visibility into foreign exchange exposure. It was against this backdrop that the firm’s new CFO mandated the creation of a FX risk management policy and program, recommendations for which would ultimately be presented to the Board.

A new Treasurer with bold, strategic sight quickly realized that whatever the firm was doing to manage its foreign currency exposure, it wasn’t enough; no matter how many people he threw at the problem, Treasury still couldn’t get the needed data in a timely manner. He instigated an effort to automate all treasury processes including building an FX management solution using extracts and reports, but soon understood that such an FX system would be impossible to update and maintain. During a meeting with IT to justify an external versus internal solution, the head of IT, learning of FiREapps’ functionality, asked, “Why would we want to build this ourselves?” The FiREapps partnership soon began.