After Putin’s mobilization: European companies in Russia

lAccording to the Chamber of Commerce Abroad, there were 3,651 German companies in Russia at the beginning of the war. It is not known how many of them have left the Russian market so far. A number of companies, including Volkswagen and Siemens, are known to turn 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 its Russian activities. 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 Just like Metro, where the board of directors gives ethical reasons as to why the wholesale group has not withdrawn from Russia.

As a food wholesaler, Metro is responsible for the food supply of people. But there are also tangible business incentives to hold onto the land. Metro owns nearly all 93 local stores itself, and selling them would mean giving up real estate. The retailer Globus also says that if the store were closed there would be a high risk of being “forced to be nationalized” so that the markets would “continue to operate independently”. The DIY chain Obi, which belongs to the Tengelmann Group, had already closed all local stores in March and shortly afterwards sold it to a Russian investor for a symbolic price of 10 euros. The consumer goods group Henkel announced earlier this week that the withdrawal from Russia was also delayed because it wanted to realize a reasonable price for the 11 factories and not just give them away.

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

Due to “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 pullout cost major publicly traded companies $15.8 billion in the summer alone, according to business daily Les Echos. The farewell was especially difficult for the car manufacturer Renault and the major bank Société Générale, which were both in the red in the first half of the year.

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