FX Review Agrichemicals, Global

Client Brief

Following its acquisition by a financial sponsor, we were asked by a large Agrichemicals group to assist it to gain a better understanding of FX exposures and help manage the exposures arising from its operations in Europe, Asia, North and South America.

PMC Solution
  • Perform a qualitative analysis of the operational environment (via face-to-face meetings, teleconferences, and questionnaire-based interviews with commercial and finance staff based in the USA, Brazil and France);
  • Gather quantitative data and develop a detailed FX model which identifies exposures both regionally and at a consolidated Group level;
  • Act as interim FX risk manager and draft a detailed risk management policy document and establish regular currency cash flow and exposure reporting);
  • Provide hedging advice to manage currency exposures arising from the mismatches between debt financing and EBITDA mix.
Results & Recommendations

Our qualitative and quantitative analyses enabled the business to gain a strong understanding of its FX exposures. Our subsequent provision of interim FX risk management expertise assisted the business to devise a sound FX risk management approach.

  • Understand the real, underlying FX exposures that your business faces
  • Show how your FX risks can be better managed in both financial (cash flows and balance sheet) and commercial terms
  • If you have a new management team
  • When FX markets are volatile
  • During acquisition/divestment activity
  • Or if you simply want a specialist to optimize your approach

Your bespoke review will consist of two phases:

  • Stage 1 – Management level meeting to understand your FX risks, the current risk management approach and any other commercial/financial constraints. We will then provide practical recommendations for improvement
  • Stage 2 – Generation of an FX model and draft Board policy document, providing the quantitative basis and governance framework for hedging activity

We also offer representation on Treasury Committees where FX is a key risk being managed.

  1. Experienced and independent specialists providing clear insights into, and applying current market practices towards the management of, your FX risks
  2. Providing a clear road map for improvement or reassurance that no change is needed

At the end of this process, you will have the practical analytical and policy tools, in a bespoke solution, for the ongoing and effective management of your FX risk