Keeping profit margins stable despite exchange rate volatility

Currency markets move quickly, and even small changes in exchange rates can affect profit margins or disrupt budgets. For companies operating with multiple currencies, managing exposure is important for maintaining financial stability. 

Our case study shows how a Swiss business manages its FX exposure. 

How a Swiss company protects profit margins from exchange rate movements 

A Swiss-based machinery importer, with annual turnover of around CHF 28 million, exports specialist tools to several international markets, including the United States. 

A significant share of its revenues is generated in US dollars, creating direct exposure to movements in the USD/CHF exchange rate.

USD 9 million in revenues exposed to exchange rate movements 

Over a six-month period, the company expected to receive around 9 million in revenues in US dollars, based on contracts already agreed with clients and priced using the exchange rate at the time the contracts were signed. Movements in the exchange rate would have affected the CHF value of those revenues and, in turn, the company’s profit margin. 

Stabilizing revenue by locking the exchange rate in advance 

The company regularly converted foreign-currency revenues into Swiss francs to cover local operating costs, including salaries and supplier payments. It was therefore essential to ensure the stability of expected revenue and avoid unpleasant surprises from currency movements. 

To address this exposure, the company worked with SwissFx to create a risk management strategy focused on locking the exchange rate in advance for its expected USD revenues.  

When the US dollar weakened against the Swiss franc

Between May and July 2025, the US dollar weakened against the Swiss franc, with the USD/CHF rate moving from 0.84 down towards 0.80. Without any protection in place, the CHF value of the company’s USD revenues would have fallen in line with the exchange rate. In this scenario, the company would have been around CHF 360,000 worse off, effectively eliminating the margins expected on those revenues. 

With exchange rate risk managed in advance, the business could plan local and staffing costs, manage supplier payments and stand by agreed pricing with greater confidence, independent of short-term currency movements. 

What changes when exchange rate risk is actively managed  

Managing exchange rate risk allows finance teams to stabilize expected revenues and bring greater predictability to financial planning. This example shows the impact that sudden currency movements could have made, had the business not effectively managed their currency risk. 

In reality, many FX setups focus on executing international payments, without offering ways to manage risk. This can leave companies exposed to currency market volatility, with profit margins and costs constantly changing as exchange rates fluctuate. 

In this context, access to risk management tools allows finance teams to take a more active role in shaping financial outcomes. It reduces uncertainty around future cash flows and results in more proactive, instead of reactive decisions.