Companies From L’Oreal to Bayer See Profits From Euro Below $1.32
Hedging at 1.26? Wow 
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L’Oreal SA (OR) Chief Financial Officer Christian Mulliez told analysts last month there’s one guaranteed earnings driver for the world’s largest cosmetics maker this year: the euro.
“There may be some negative factors, factors that we can’t quantify today,” he said on a Feb. 12 conference call. “But we know that we have at least one positive upside, which is that of the currency hedges,” he said, referring to contracts that lock in costs and sales at a predetermined exchange rate.
Europe’s biggest companies are betting a second year of recession in the region will drive down the common currency, helping them better compete as countries from Japan to the U.S. battle for exports. L’Oreal is hedging at $1.26 per euro this year, down from $1.36 in 2012. Bayer AG (BAYN), BASF SE (BAS), Heineken NV, Deutsche Telekom AG (DTE), MTU Aero Engines, Infineon Technologies AG (IFX) and Beiersdorf AG predict exchange rates ranging from $1.25 to $1.31, compared with the $1.3193 the euro closed at on Dec. 31.
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