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Salesforce eyes Dublin amid Brexit uncertainty; to drop UK-based European model

Salesforce.com inc. plans to start transitioning away from its "U.K.-centralized European structure" in fiscal 2020 to contain its foreign currency exposure, as it turns to Dublin, Ireland, to partially mitigate the impact of Brexit.

The application software company currently conducts its European operations through a U.K. subsidiary, which has a functional currency of the British pound. This results in a two-step currency exchange process, wherein amounts in European currencies are first converted into the British pound and then into the U.S. dollar for reporting purposes.

In a bid to reduce its foreign currency exposure, the company plans to allow some of its European subsidiaries to directly record revenues and expenses in local currencies, eliminating the need to convert into sterling.

Total revenues generated in Europe were approximately 19%, 18% and 16% of total revenues in fiscal 2019, 2018 and 2017, respectively, of which substantially all were recorded in the U.K. subsidiary.

Salesforce, which is investing in Dublin, said it will continue to monitor Brexit negotiations for any changes that may impact the company's operations.

The company booked $13.28 billion in revenues in fiscal 2019 ended Jan. 31 and is targeting revenue in the range of $15.95 billion to $16.05 billion for fiscal 2020.