After Putin's mobilization: European companies in Russia



LAccording to the Chamber of Commerce Abroad, 3651 German companies were in Russia. It is not known how many of them have left the Russian market to date. It is well known that a number of companies, including Volkswagen and Siemens, are turning their backs on Russia. Those who stay often have to justify themselves – with different arguments. Medical group Fresenius wants to continue to "contribute to the medical care of the people" - without further expanding the Russian business. Others speak of a responsibility for the employees. Grocers, meanwhile, say they want to maintain basic supplies for the Russian population. Just like Metro, where the board of directors gives ethical reasons when asked why the wholesale group has not withdrawn from Russia.

As a food wholesaler, Metro is responsible for supplying people with food. But there are also tangible business incentives to hold on to the country. Metro owns almost all of the 93 local stores itself, and selling them would mean giving up real estate assets. The retailer Globus also says that if the store were closed, there would be a high risk of being “forcibly nationalized” so that the markets would “continue to operate independently”. The hardware store chain Obi, which is part of the group of companies Tengelman had already closed all the local markets in March and shortly afterwards sold them to a Russian investor for a symbolic price of 10 euros. The consumer goods group Henkel announced earlier this week that its withdrawal from Russia was also being delayed because it wanted to achieve a reasonable price for the eleven plants and did not want to simply give them away.

For all companies that withdraw, it usually means leaving the market with no prospect of returning. And the loss of sales, because many of the businesses are then simply taken over by other market participants. For Metro, this can also be measured in numbers: In the first nine months of the 2021/2022 financial year, sales in the country increased by 8.7 percent currency-adjusted to just over 2 billion euros. At EUR 169 million, adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) were also slightly higher than in the previous year. Has the last word been spoken for all German companies? Probably not, just under a week ago the VW subsidiary Traton announced that the truck manufacturers MAN and Scania will withdraw from Russia.

Because of "maximum pressure"

The Russian adventure is over for many French companies - and has cost them dearly. For years one of the largest foreign direct investors in Putin's empire, the withdrawal cost the large listed companies 15.8 billion euros by the summer alone, according to the business daily Les Echos. The farewell was particularly difficult for the car manufacturer Renault and the major bank Société Générale, both of which were in the red in the first half of the year.



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