Record high euro a boon for some German firms

By Iain Rogers - Analysis

BERLIN (Reuters) - Germany's biggest exporters are confounding politicians' complaints about the strong euro by finding benefits in the currency's surge to record highs.

Euro zone finance ministers expressed concern about the euro's strength this week as it surged above $1.50.

However, in Germany -- the world's largest exporter of goods -- top firms like sporting goods maker Adidas (ADSG.DE) and auto parts supplier Continental (CONG.DE) are rubbing their hands.

The strong euro means firms in the single currency region benefit from a significant boost to purchasing power and global players with production sites all over the world in any case enjoy a natural hedge against currency exposure.

Adidas Chief Executive Herbert Hainer said on Wednesday the dollar's weakness -- it has fallen around 16 percent against the euro this year alone -- means materials the company buys in Asia and pays for in the U.S. currency are much cheaper.

"All in all, if we look at the net effect, the weak dollar is an advantage for us," Hainer said after Adidas reported a sharp increase in fourth-quarter net income.

Alan Hippe, chief financial officer at Continental, the world's fifth-biggest supplier of auto parts, said in an interview the euro's strength was "absolutely" a good thing.

Although the company had about $9 billion in sales it also had a substantial amount of U.S. dollar costs that almost balanced them out.

"Don't forget that we are buying a lot of electronics and natural rubber in Asia that we pay for in U.S. dollars," Hippe told Reuters.

Continental tended to avoid paying for expensive hedging strategies against currency exposure and instead opted for "a natural hedge," he said.

"When we start doing business in a certain country and the business grows to a certain size in terms of sales then we also move production to this country. For us exposure to other currencies is not playing a major role."

KEY ENGINE

Germany sold almost 1 trillion euros ($1.5 trillion) worth of goods abroad in 2007, and foreign trade has been a key engine of growth for Europe's biggest economy in recent years.

Euro zone finance ministers said this week the dollar's depreciation no longer reflected economic reality and they expressed concern for the bloc's exporters whose goods are more expensive in real terms.

However, leading German industry groups have played down the impact of the euro's near doubling in value against the dollar from little more than 80 U.S. cents at its weakest in 2000.