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FiREapps CEO Wolfgang Koester on the currency risks that multinational companies such as McDonald’s must deal with.
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To that strong dollar it may sound like a good thing.
When you go to Europe your money buys more right but it hurts global companies that are based here in the United States McDonald's is a perfect example.
They came out with their earnings this morning.
They did not do anywhere as well as people thought they would what other companies might feel the impact and should you be investing.
On the currency -- issued joining us now we've got the guy who knows it's a Fox Business exclusive from Phoenix Wolfgang -- he's the chairman and CEO.
Up fire -- of fire -- of course is a company that.
Fortune 500 companies hire you to teach them how to manage their currency risk do they not and how do you do that.
Yeah I mean we start off good to see again Liz.
We start off by really helping them understand their exposure so they they can manage it and that's a core issue that a lot of corporations have.
McDonald's lots of currencies around the world.
Where all my exposure is -- right get to that quickly and how to act.
The past of in the 1990s in the early 2003.
Financial crisis.
You might have been able to get away with some manual processes today.
You need to have the information at your fingertips you need to be confident that data you need to have it accurately and you need to have a timely.
Okay it won't let me just quickly ask you is McDonald's a client of yours.
They are not a client of okay -- -- bit about this is interesting to be had they bid and what would you have told them to do different.
-- I would have told them to get closer to their exposures.
Their exposure issues the following there's -- believe that.
You know since I have restaurants in the in the in the country.
I have offsetting costs but reality to the fact is that they still buying a lot of commodities.
Dollar base and then there's still supplying food in all these countries so they have to manage the dollar the cost be increasing costs.
Vs the revenue is that's what's -- them.
If they get after that area then they'll actually get that under control we've got lots of companies who have this under control.
Hopefully they'll become a -- sometime.
-- look at the top one right there and then of course we wanna see all of these currencies but there just four on the screen McDonald's has some 400.
Currency pairs they half to.
Wrap their minds and arms and wallets around because it's not just enough to say we sold five million hamburgers.
They've got to be able to deal with something that is almost uncontrollable and that is what certain currency gets weaker or stronger so.
We -- you -- before and I I really wish people would listen because.
Stocks move on the stuff.
McDonald's -- -- -- that are not get out of the ones that might next be burned by certain currency parents now I see that the you want for example.
Is hitting a nine month -- the Chinese currency.
They want it low because it helps them with their trade who gets -- which US companies will get hurt by that.
So -- Yum! Brands is a very good example of a company that's gets lots of revenues out of China.
And as you know what they've done is they've expand -- the band width of the dollar vs the want they still have to stay within a certain rate area.
But everybody in the past as always anticipated.
That the Chinese currencies just gonna keep going up so anybody does revenues in China that's just gonna be good for them I'm thinking I'm -- -- apple I'm thinking.
But yeah you've got a cliff natural resources at -- did they get hurt it with -- a weak area.
They I didn't -- -- -- rather.
They will get hurt especially on the natural resource aside -- unveiled looking for revenues they've got over 50% of their revenues are brought.
33%.
Coming up sign up that's a significant impact apple.
It's not -- clear of a story so when you're looking at currencies China in particular lot of companies have been always either very much heavy focused on revenues out of their pocket or they're actually doing their procurement out of there.
In with respect to apple they will have an overall negative impact but it won't be as a defined as a cleft.
Natural convention 400 currency pairings -- -- sure they have people hired just to look at currency effect thank you so much Wolfgang good to see you.
You bet we'll see you -- Walter chairman and CEO of fire apps has warned in the past.
Viewers -- watch out some of these companies don't hedge properly when it comes to --
