PROTECTING AND IMPROVING PROFITABILITY BY MANAGING FOREIGN EXCHANGE RISK

2 RISK MANAGEMENT WU Business Solutions today Source: Study Oxford ME Economics, April K TRADE PAYMENTS A DAY MAKING 100K CLIENTS IN 31 COUNTRIES TO 130 CURRENCIES TO 200 COUNTRIES PRINCIPAL ANNUALLY 80B $ SENDING AIM: Be the leading provider of cross-border cross-currency payments and services to businesses globally

3 RISK MANAGEMENT Visibility Certainty Efficiency Instant insights need to manage FX exposures; and track payments to forecast cash flow Greater certainty of costs need to accurately forecast profits and foreign cash flow Reduce time & effort need to manage international payments 50% don’t track exposures 31% track on spreadsheets 91% negatively impacted if cost of payables runs higher than planned On average, spend 1 day per week managing international payments SMTWThFS * Source: SME Study Oxford Economics **Source: East & Partners % don’t know value of foreign invoices until time of payment or after Did you know**… ? Technology eliminates limitations enabling accelerated international growth

4 THE POWER OF PAYING IN LOCAL CURRENCY LOCAL CURRENCY PAYMENTS Starting to pay in local currency is simple. Negotiate Request non-USD invoices Suggest a fair local currency price Negotiate more favourable terms Pay Pay in 130+ currencies Plan We’ll help build a simple plan to reduce currency exposure and create certainty around profit margins Gain Control Create certainty of FX conversion Create efficiency with faster more transparent payments in in local currency Strengthen Relationships Foreign suppliers prefer to receive their local currency Streamlined payment process can give you a competitive advantage Improve Profits Negotiate preferable pricing and payment terms Eliminate costs associated with maintaining foreign currency accounts 123 Three time and money saving benefits in 3 steps

5  Currency markets trade over $1.5 trillion each day – more than the stock market trades annually  2015 experienced high FX market volatility  Global names lost huge profits Impact on businesses?  Difficult to track currency fluctuations and contain costs  Hard to forecast cash requirements, puts profit margins at risk  Struggle to manage currency exposures on spreadsheets RISK MANAGEMENT FX volatility puts businesses at risk GBP/USD – 2015 GBP/USD depreciated by 8% up to Jan A $500,000 invoice could have cost $540,000

Gain full visibility and certainty over your FX exposures with the WUBS Cash Management Platform Design a program to support your short and long term foreign currency requirements Protect profits from currency fluctuations Create certainty of costs Grow business in international markets and protect your company from exposure 4-STEP PROGRAM Reduce exposure with a 4-step Risk Management Program RISK MANAGEMENT PROGRAM STEP 1: Review Exposure Identify where your profits are at risk with help from the Cash Management Platform STEP 2: Set Goals Work with a specialist to define your short and long term risk management goals STEP 3: Develop Strategy Build a simple plan with a variety/mixture of products to reduce currency exposure and create certainty around profit margins STEP 4: Execute Plan Implement the right combination of hedging tools to meet your goal. Work with our specialists and regularly asses performance

7 Minimize costs Cross-currency payments avoid unnecessary currency conversion. Minimize costs Cross-currency payments avoid unnecessary currency conversion. No need for a foreign bank account Hold money in 40+ currencies for up to 90 days in our Holding Balance foreign currency accounts. No need for a foreign bank account Hold money in 40+ currencies for up to 90 days in our Holding Balance foreign currency accounts. Deal when the rate hits your target spike Use Market Orders to make a payment when a target rate is hit. Simply pay a foreign invoice SPOT payments let you buy or sell foreign currency to pay your international invoices Get payment certainty in volatile markets Forward Contracts lock in an FX rate for the a future date to secure margins even if the market moves Protect and Participate Options provide protection from adverse market developments, and gives you the opportunity to participate in favorable moves COMPLETE SOLUTIONS RISK MANAGEMENT Visibility of exposure Cash Management creates visibility into exposures and ability to forecast cash flow. Visibility of exposure Cash Management creates visibility into exposures and ability to forecast cash flow. Reduce the risk of foreign payables and receivables

8  A EUR€200,000 payment in April time would cost USD210,000 at a rate of EURUSD  A possible rate of in July would equal USD220,000 - that is USD10,000 more.  Currency volatility can have serious repercussions for international businesses Why use a Forward Contract? You could have a fixed rate at 1.05 rate using a Forward Apr 15 May 15Jun 15 Jul 15 EURUSD1.150 RISK MANAGEMENT FORWARD CONTRACTS - US Rate in July 1.10 EURUSD1.250 EURUSD1.100 EURUSD1.075 EURUSD1.050 Protects profits from fluctuating rates Provides certainty around costs and profits X Unable to benefit should rates move your way Forward Contracts lock-in today’s exchange rate for a future time period

9 Simple hedging solution used by many businesses today Key benefit – protection from adverse market developments, opportunity to participate in favourable moves Can be used alone or in combination with other hedging tools to create a powerful risk management strategy Diverse range of currency Options available, suitable for businesses of all sizes N.B. typically you must agree to a protection rate that is less favourable than the current market forward rate, in exchange for the potential participation you might achieve. RISK MANAGEMENT CURRENCY OPTIONS Bottom line protection, plus flexibility

10 HEDGING SOLUTIONS RISK MANAGEMENT Demystifying Options: Flexible hedging solutions  If you knew the exchange rate was only going to move in your favour…?  If you knew the rate was only going to move against you…?  …. When was the last time the currency markets only moved in one direction for any period of time?  Currency options have been designed to cater for every other eventuality Myths  Options are expensive  Options are only for speculation  Options are only for big corporates Facts  Options structures are usually zero cost  Protect a worst case rate like a forward  Allow you to also participate in upside  Now used by your direct competitors

11  Risk specialists help ensure you have the right blend of Forwards, Options and SPOT trades in place  Overall strategy is to drive outperformance, not to predict the market  Each month your exposure is reviewed to ensure your hedge profile is aligned with your business goals  If required, leverage the SPOT market to ‘top up’ your baseline hedge Baseline hedge Floating rates (SPOT) As the month “rolls off”, you top up the protection in line with the baseline hedge% 1–6 months 80% hedged ` 7–12 months 50% hedged ` 1–6 months 80% hedged ` 7–12 months 50% hedged ` RISK MANAGEMENT STRATEGY IN ACTION A ‘rolling hedge’ approach to risk management strategies

12 WU EDGE PLATFORM SUMMARRY In summary  Technology is helping to eliminate limitations for businesses to expand globally, however expansion creates complexity in managing international payments  Fluctuating exchange rates and a changing landscape of legislation create challenges to trading profitability when making and receiving international payments, and potentially create cash flow unpredictability  Companies are increasingly looking for long term partners to support short and long term foreign currency requirements with risk management programs  WU EDGE platform is a free technology platform that enables companies to pay in local currency, keep abreast of currency volatility and exposure, engage with a partner to create a cash management strategy