Medilink North of England News Autumn Winter 2018 Volume 2 - Page 4

EXPERT VIEW JEREMY THOMAS-COOK CHIEF ECONOMIST WORLDFIRST HOW DO EXCHANGE RATES AFFECT A BUSINESS? Currency risk can come in a variety of forms and impact businesses of all sizes, as evidenced by GlaxoSmithKline, the world’s sixth largest pharmaceutical company, who recently announced their Q1 performance results. As a company headquartered in the UK and with group revenue reported in GBP, we can see that the pound gaining value against the dollar from Jan-March had a negative impact for GSK. Despite seeing sales volumes in the US grow by 7%, GSK actually saw a 4% decline in US sales revenue. For the three months to the end of March, overall revenue declined 2% and the company has warned against the negative impact of currency movements for the remaining part of the year. For example, over the last 90 days the currency pair could have achieved a high of 74p to the dollar or a low of 69p to the dollar. 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