FX Hedging & Treasury Reporting
How an Industrial Group Gained Full Control of Its FX Risks in Just Two Months
Foreign exchange risks are like friction in a machine: they generate no return, yet can quickly erode profits.
For global companies with numerous subsidiaries and project operations, FX exposures often go unnoticed - directly impacting the income statement. Even profitable projects can lose margin due to uncontrolled currency fluctuations.
An international swiss industrial group with subsidiaries in 20 countries and 16 currencies wanted to finally get these fluctuations under control.
The strategy: more transparency, more controllability - without adding operational overhead.
The Challenge
Until now, FX hedging was done on a project-by-project basis - solid, but not holistic. Approximately half of the total exposure remained unhedged, especially in smaller projects, receivables, payables, and intercompany accounts -where the largest FX impacts were hidden.
The goal was a reporting framework that:
- Captures all balance sheet and cash flow FX risks,
- Makes natural hedges visible,
- Provides net exposures per entity and currency at the push of a button.
The Approach
1. Balance Sheet Hedging – Making Hidden Risks Visible
Stahr Treasury analyzed working capital positions over three years, broken down monthly by currency and account type.
Based on this, a Balance Sheet FX Risk Report was created in the Coupa Treasury System, linking all short-term balance sheet positions to existing FX deals. The outcome: monthly net balance sheet exposures by currency and consolidated into group functional currency, enabling Group Treasury to deploy overlay hedges exactly where the balance sheet benefits most.
Result: a measurable reduction in FX impact on the monthly closing.
2. Cash Flow Hedging – From Individual Projects to a Consolidated View
Project-based hedging was expanded to cover all cash flows, not just the larger projects. Daily bank statements (MT940 / camt.053) were automatically imported into Coupa and categorized as:
- Operational
- Investment
- Financial Cash Flows
Each category further segmented by internal and external flows.
This created a Treasury Liquidity Plan capturing every movement in the group - from customer payments to interest flows. The new FX hedging report now provides gross and net exposures, as well as hedge ratios, updated daily for each entity, currency, and period.
The Result
In just two months, an integrated FX reporting framework was established, now jointly used by CFO and Treasury:
✅ Clear decision-making basis for hedging strategies
✅ Measurable reduction of earnings volatility
✅ Automated data integration from SAP and Coupa
✅ Transparent FX exposures at both balance sheet and cash flow levels
✅ Management-ready reports in Excel & PowerPoint
The company now has a tool that makes FX risks not only visible but controllable - without adding operational burden.
Lessons Learned: Why CFOs and Treasurers Should Take Action
FX risks are not just a Treasury issue - they affect results.
A CFO who does not know the group’s FX positions manages profit with uncertainty. Integrated FX reporting provides planning certainty, earnings protection, and clear decision-making foundations.
Stahr Treasury helps companies to:
- Structure treasury data to enable actionable decisions
- Identify hidden risks
- Transform FX management from a cost factor into a competitive advantage
If you want to know where your group’s FX risks truly lie - and how to manage them proactively - let’s talk.
