Euro revenue, Swiss franc costs: Can your Swiss site pass the exchange-rate test?

1. Why the currency test comes before the site debate

The useful question is not whether a Swiss site is good or bad. The real question is how large the open currency position is. If euro revenue, Swiss franc costs and other foreign-currency flows are put into one basket, the picture quickly becomes too large or too small. A clean test starts with netting: which flows offset each other, and what remainder stays open ?

Monetary context matters, but only as context. On 24 September 2026, the SNB left the policy rate at 0 %, named exchange-rate developments as an uncertainty factor and said it was ready to act in the FX market if needed. That matters for the environment, but it does not replace a site-level calculation.

• The first question is not whether a Swiss site is strong or weak, but how large the truly open currency position is.
• If euro revenue, Swiss franc costs and other foreign-currency flows are mixed together, the picture becomes blurred fast.
• A clean test starts with netting: what offsets, what remains open ?

2. What moves the franc

On its explainer page, the SNB states that the franc has gained value over the last 15 years, but that this development was driven mainly by low interest rates and phases of global uncertainty. So there is no automatic rule that says the franc always rises. There is a market that reacts to rate differentials and to safe-haven episodes.

For entrepreneurs, that is the key point. A site position is not decided by a view on the next move, but by a clear map of cash flows. Once you know which revenues and which costs fall in which currency, the same calculation remains useful even if the market does not move as expected.

• The SNB does not describe the franc as a one-way street, but as a currency that reacts to rate differentials and risk aversion.
• Its explanation of the last 15 years points mainly to low rates and phases of global uncertainty.
• For businesses, that means measuring exposure rather than guessing a direction.

3. The real calculation: revenue against costs

The calculation question is straightforward. Formula: net cash flow in CHF = EUR revenue × rate − CHF costs. Not everything on the revenue side that appears in euros is automatically open. And not every Swiss franc expense is the offset to the euro business. So only true offsets should be combined, and the remainder should be shown separately.

The key is to keep volumes constant. If you test the rate, you must not change volumes, prices or the cost structure at the same time. Otherwise you are no longer measuring currency risk, but a mixture of growth, margin and exchange rate.

• Simple formula: net cash flow in CHF = EUR revenue × rate − CHF costs.
• Only combine true offsets; show the remainder separately.
• Keep volumes constant if you want to test the exchange rate rather than growth or margin.

4. Three hypothetical rates, same volumes

Take a deliberately simple and explicitly hypothetical example: EUR 1 million revenue, CHF 800’000 costs, unchanged volumes. At 1.05 CHF/EUR, this gives CHF 1’050’000 of revenue; after deducting costs, CHF 250’000 remains. At 1.00 CHF/EUR, CHF 200’000 remains. At 0.95 CHF/EUR, CHF 150’000 remains.

The point is not that one of these rates will occur. The point is more mechanical: the lower the rate, the smaller the open remainder. That is useful because management then talks about a number, not about the franc as a slogan. A later article can show exactly this logic side by side with three explicitly hypothetical EUR/CHF rates and unchanged volumes.

If part of the costs is already in euros or part of the revenue is invoiced in Swiss francs, the remainder shifts. That is precisely why any serious analysis begins with a clean statement of cash flows, not with an opinion about hedging.

• Deliberately simple and explicitly hypothetical example: EUR 1 million revenue, CHF 800’000 costs, unchanged volumes.
• At 1.05 CHF/EUR, CHF 1’050’000 of revenue minus CHF 800’000 of costs leaves CHF 250’000.
• At 1.00 CHF/EUR the remainder is CHF 200’000; at 0.95 CHF/EUR it is CHF 150’000.

5. What the calculation still does not tell you

This calculation does not yet answer the next question: hedge or not, and if yes, how much and when. That is a separate decision. It depends on liquidity, contract maturities, pricing, balance-sheet structure and risk tolerance. The currency test only provides the starting number.

Its value lies in discipline. Once the open remainder is known, the board, financing or pricing can be discussed on a factual basis. Once it is unknown, feeling and exposure are easily confused. And that is usually where the wrong site debate begins.

• The calculation does not yet say whether to hedge, how much to hedge or when to hedge.
• That decision depends on liquidity, contract maturities, pricing, balance-sheet structure and risk tolerance.
• The value of the test is a clear starting number, not a promised location advantage.