# Factbox – Companies count the cost of ditching Russia
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-26
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Multinational Companies Count Losses From Exiting Russia
Meta Description: Learn how multinational firms like Adidas, Renault, and Citigroup are calculating losses after exiting the Russian market post Ukraine invasion.
URL: https://financedigest.com/factbox-companies-count-the-cost-of-ditching-russiahtml

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(Reuters) – Multinational companies that announced their exit from Russia, or suspension of activities there, after its invasion of Ukraine have started to calculate losses associated with their decisions.

Below is a list of firms by sector that have provided cost estimates related to their temporary or permanent halt of business in Russia:

APPAREL

ADIDAS

The [German sportswear company warned in March of a hit](https://www.financedigest.com/cash-loving-germans-fret-over-exploding-atms-as-cross-border-crime-wave-hits.html "Cash-loving Germans fret over exploding ATMs as cross-border crime wave hits") to sales from closing business in Russia, without giving an estimate. It [operates 500 stores](https://www.financedigest.com/ikea-stores-owner-ingkas-annual-operating-profit-rises-9.html "IKEA stores owner Ingka’s annual operating profit rises 9%") in the country, a quarter of its total. It also said Ukraine could pose a risk to sales of up to 250 [million euros](https://www.financedigest.com/amazon-grants-1-5-million-euros-to-dutch-seaweed-farm-project.html "Amazon grants 1.5 million euros to Dutch seaweed farm project") ($271 million), or about 1% of the group total in 2021.

LPP

Fourth-quarter results of LPP, Poland’s biggest fashion retailer, were [hit with a 335 million](https://www.financedigest.com/pwc-hit-with-8-9-million-penalty-for-serious-breaches-on-babcock-audits.html "PwC hit with .9 million penalty for ‘serious breaches’ on Babcock audits") zloty ($78.05 million) write-down, covering closure of its stores in Russia. In 2021/2022, Russia was LPP’s second-biggest market after Poland, constituting 19.2% of the [retailer’s full-year sales](https://www.financedigest.com/valentines-day-spending-boosts-british-retail-sales-in-february-brc.html "Valentine’s Day spending boosts British retail sales in February – BRC") revenue. The [company sees the suspension of business in Ukraine and closing](https://www.financedigest.com/hundreds-of-tyson-foods-employees-to-depart-as-company-closes-offices-wsj.html "Hundreds of Tyson Foods employees to depart as company closes offices – WSJ") stores in Russia to cost 25% of revenue.

TJX The U.S.-based fashion retailer TJX said it would [sell its 25% stake](https://www.financedigest.com/intercos-fund-shareholders-l-catterton-otpp-sell-6-stake-at-7-discount.html "Intercos fund shareholders L Catterton, OTPP sell 6% stake at 7% discount") in the Russian low-cost apparel shop chain Familia. The [stake was valued at $186 million](https://www.financedigest.com/iag-agrees-to-buy-80-stake-in-air-europa-for-400-million-euros.html "IAG agrees to buy 80% stake in Air Europa for 400 million euros") at the end of January, lower than the $225 million TJX paid for it in 2019. TJX said it might need to record an impairment due to the divestiture if the fair value of the Familia investment declines below its carrying value on the balance sheet.

AUTOMAKERS

[RENAULT Renault said in March it considered](https://www.financedigest.com/renault-considers-making-mass-market-evs-in-india-sources.html "Renault considers making mass-market EVs in India -sources") a 2.2 billion-euro ($2.38 billion) non-cash writedown to reflect the potential costs of suspending operations in Russia. Lost sales in Russia accounted for 166 million euros of revenue loss in Q1, though the country remained the company’s second-largest market after France.

VOLVO

The Swedish truck maker said on April 8 it had set aside provisions worth $423 million after suspending activities in Russia that amounted to 3% of group sales.

BANKS

CITIGROUP The U.S. [bank said in connection with its quarterly report it sees a loss of up to $3.0 billion](https://www.financedigest.com/first-abu-dhabi-bank-could-renew-35-billion-offer-for-stanchart-bloomberg-news.html "First Abu Dhabi Bank could renew  billion offer for StanChart -Bloomberg News") from its exposures in Russia in a severely adverse scenario. The company said it had reduced its total exposure to the country since December 2021 by $2.0 billion to $7.8 billion. The most global of the American banks added $1.9 billion to its reserves in the first quarter to prepare for losses from direct exposures in Russia and the economic impact of Ukraine war.

[CREDIT SUISSE](https://www.financedigest.com/mitsubishi-ufj-to-postpone-at1-bond-issuance-in-credit-suisse-fallout.html "Mitsubishi UFJ to postpone AT1 bond issuance in Credit Suisse fallout") The Swiss bank estimated on April 20 the impact of the Russian war in Ukraine will cost it 200 million Swiss francs ($209.10 million) in Q1 2022.

SOCIETE GENERALE The French bank said it would quit Russia and write off 3.1 billion euros ($3.35 billion) from selling its Rosbank unit to Interros Capital. The amount comprises a 2 billion-euro hit on Rosbank’s book value and the rest linked to the reversal of rouble conversion reserves.

UBS Group AG The [Swiss bank](https://www.financedigest.com/swiss-regulator-monitoring-banks-and-insurers-after-svb-collapse.html "Swiss regulator monitoring banks and insurers after SVB collapse") said on April 26 in connection with its Q1 report that Russia’s invasion of Ukraine had a cost of about $100 million. UBS had also cut its [exposure in Russia to $400 million](https://www.financedigest.com/frasers-hugo-boss-exposure-falls-to-691-million.html "Frasers’ Hugo Boss exposure falls to 1 million") at the end of March from $600 million originally.

CONSUMABLES

ESSITY The [Swedish hygiene products group said it would record a write-down of 1.4 billion crowns](https://www.financedigest.com/dollar-edges-down-from-six-week-peak-swedish-crown-jumps.html "Dollar edges down from six-week peak, Swedish crown jumps") ($147.66 million) after it shut down all production and sales in Russia in March. The [company generated around](https://www.financedigest.com/around-40-of-german-companies-expect-output-decline-in-2023-iw-institute.html "Around 40% of German companies expect output decline in 2023 – IW institute") 2% of its total sales in the country last year, amounting to 2.8 billion crowns ($295.32 million).

PHILIP MORRIS

The tobacco giant took a charge of 3 cents per share related to the war in Ukraine in Q1, after discontinuing sales of a number of Marlboro and Parliament cigarette products in Russia. Philip Morris’ Q1 earnings fell 3.6% to $2.32 billion, or $1.50 per share, including the 3-cent charge. Russia generated revenue of more than $1.8 billion last year for the company, around 6% of its global sales

ENERGY

EXXON MOBIL CORP

The [oil giant’s decision to leave Russia and discontinue oil and gas operations will hit](https://www.financedigest.com/oil-hits-3-week-high-as-china-eases-covid-curbs.html "Oil hits 3-week high as China eases COVID curbs") earnings, oil production between 1% and 2%, the company’s CFO said. [Exxon Mobil’s Russian oil](https://www.financedigest.com/exxon-sues-eu-in-move-to-block-new-windfall-tax-on-oil-companies.html "Exxon sues EU in move to block new windfall tax on oil companies") and gas operations were valued at more than $4 billion.

OMV

The Austrian energy group said on April 8 it would take a 2 billion-euro hit in the first quarter from its pullback from Russia, split evenly between its connection with the [Nord Stream](https://www.financedigest.com/denmark-invites-nord-stream-operator-to-help-salvage-unidentified-object.html "Denmark invites Nord Stream operator to help salvage unidentified object") 2 pipeline project and adjustments to the consolidation method of two Russian entities.

SHELL

The world’s largest liquefied natural gas trader will write down up to $5 billion following its decision to exit Russia, above the $3.4 billion previously disclosed, the company said on April 7. The increase was due to additional potential impacts around contracts, writedowns of receivables, and credit losses.

STREAMING SERVICES

NETFLIX

The global streaming giant said on April 19 its decision to suspend services in Russia resulted in the loss of 700,000 members as the company lost subscribers for the first time in more than a decade.

FOOD & BEVERAGES

AB INBEV

The Belgian brewer announced on April 22 it would [sell its non-controlling stake](https://www.financedigest.com/kkr-sells-50-stake-in-spains-x-elio-to-partner-brookfield.html "KKR sells 50% stake in Spain’s X-elio to partner Brookfield") in its Russian joint venture AB InBev Efes. The divestiture will result in a $1.1 billion impairment charge in the first quarter. The joint venture has 11 breweries in Russia and three in Ukraine.

CARLSBERG

The Danish brewer said the decision to [sell its Russian business](https://www.financedigest.com/reasons-why-you-should-hire-a-business-broker-to-sell-your-business.html "Reasons Why You Should Hire a Business Broker to Sell Your Business") would result in a write-down of about 9.5 billion crowns ($1.4 billion). The company generated 10% of its revenue and 6% of its operating profit in Russia in 2021. It also said it expected 300 million crowns of Ukraine impairment charges, plus goodwill writedowns of 700 million crowns for the Central and Eastern Europe region, which includes Ukraine.

HEINEKEN NV The Amsterdam-based brewer decided in late March to leave Russia, concluding that ownership of any business there is no longer sustainable or viable in current environment. Heineken added it will not [profit from any transfer of ownership and expects](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") an impairment and other non-cash exceptional charges of about 0.4 billion euros ($432.96 million) in total.

MCDONALD’S

McDonald’s said in March the closure of its Russian restaurants would cost it about $50 million a month. The company operates 847 sites – of its global total of over 38,000 – in Russia. Brokerage Piper Sandler expects the restaurant chain’s [halt to operations in Russia](https://www.financedigest.com/kfc-franchisees-in-russia-ask-govt-to-halt-sale-of-stores-to-local-operator-ria.html "KFC franchisees in Russia ask govt to halt sale of stores to local operator – RIA") to result in an earnings per share hit of $1.19 in 2022.

TOY MAKERS

HASBRO

The American toy maker warned on April 19 of a potential revenue [hit of about $100 million this year](https://www.financedigest.com/uk-car-sales-hit-30-year-low-in-2022-but-could-grow-15-this-year-smmt.html "UK car sales hit 30-year low in 2022, but could grow 15% this year – SMMT") due to its decision to pause toy shipments to Russia.

OTHER

ALFA LAVAL

The Swedish engineering company, which has paused all new orders in Russia, said on April 26 that due to sanctions, orders amounting to 602 million Swedish crowns ($62 million) had been cancelled. In addition, it booked 327 million crowns of provisions to cover various costs related to existing contractual obligations concerning Russia.

HUSQVARNA

The Swedish gardening equipment maker said April 21 it had booked write-downs of 119 million crowns ($12.6 million) in the first quarter of 2022 as a result of stopping all exports and investments in Russia. In 2021, Russia accounted for 1.5% of group sales.

KONECRANES

The Finnish engineering group said it made a write-down of 79 million [euros in orders from Russia in the first quarter](https://www.financedigest.com/euro-having-a-laugh-a-quarter-of-brits-take-the-wrong-currency-on-holiday.html "Euro having a laugh: a quarter of Brits take the wrong currency on holiday"). It also cancelled 32 million euros ($34.62 million) of sales to the country which negatively impacted the quarter’s operating [profit by about 39 million euros](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros").

METSO OUTOTEC

The Finnish provider of mining solutions, which halted deliveries to Russia in March, said on April 21 that operative assets related to Russian customers of about 100 million euros ($109 million) could be at [risk if is unable to wind down existing contracts in a controlled way](https://www.financedigest.com/analysis-watch-out-risk-assets-the-rout-in-bonds-is-coming-your-way.html "Analysis-Watch out risk assets, the rout in bonds is coming your way"). The company, which generated 10% of revenue from Russian sales in 2021, added it had 269 million euros of advance payment guarantees tied to deliveries to Russia at end-March.

SKF

The Swedish bearings and seal maker said on April 22 it will cease all operations in Russia and plans to [divest its Russian business](https://www.financedigest.com/pizza-firm-dp-eurasia-considers-divestment-of-russian-business.html "Pizza firm DP Eurasia considers divestment of Russian business") in a controlled manner. The decision triggers a write-down of about 500 million Swedish crowns ($52.70 million) in the second quarter. Russian sales accounted for about 2% of the group’s total sales in 2021.

SSAB

The Swedish steelmaker said on April 26 concerns related to its sales office in Russia had led to asset writedowns of 158 million Swedish crowns ($16.23 million) in the country. The war and sanctions also impacted prospects for the Fennovoima project in Finland, the shares of which were written down by 272 million crowns to zero in value. SSAB has [ended direct sales](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") to Russia and Belarus, and discontinued new purchases of ore and coal from Russia, until further notice.

STORA ENSO The Finnish forestry company said on April 25 it had divested its two sawmills and forest operations in Russia to local management, resulting in an impairment of 70 [million euros ($75 million) in Q1, and triggering an additional loss on transaction under IFRS accounting rules of about 60 million euros upon closing](https://www.financedigest.com/optable-closes-20-million-series-a-financing-broadens-investor-syndicate-in-new-round.html "Optable Closes  Million Series A Financing, Broadens Investor Syndicate in New Round") of the deal.

The company had previously said it would stop all production and sales in the country. Its Russian revenues accounted for about 3% of total group revenues.

($1 = 0.9243 euro)

($1 = 6.8341 Danish crowns)

($1 = 4.2921 zlotys)

($1 = 0.9565 [Swiss franc)](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse")

($1 = 9.7480 Swedish crowns)

(Compiled by Padraic Halpin, Marie Mannes, Agata Rybska, Antonis Triantafyllou, Patrycja Zaras and Tristan Chabba; Editing by Mark Potter and Matthew Lewis)


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