If since the beginning of the Russian invasion of Ukraine, the percentage of companies that closed operations in Russia has risen sharply by mid-March, in the last month the ratio of those who leave or stay is virtually unchanged. although we still see a periodic increase in the share of those companies that remain in the Russian market. However, about 39.2% of foreign companies have already announced their withdrawal from the Russian market, but another 39.9% are still remaining in the country, 17.2% are waiting and only 3.7% made a complete exit⁴.

At the same time, it is difficult not to overestimate the impact on the Russian economy of only 105 companies that completely left the country, since they employed almost 20% of the personnel employed in foreign companies, and the companies owned about 12% of the assets invested by foreign companies in the country, and only last year they generated revenue of $24.4 billion or 8.3% of total revenue, data on 1,300 TOP companies are presented in the table above.

More infographics and analytics see in a special section at the link https://leave-russia.org/bi-analytics

THE KSE DATABASE HAS BEEN SUBSTANTIALLY UPDATED – OVER 100 COMPANIES HAVE EXITED COMPLETELY!

Until the middle of July this year, we had three statuses, which we used to describe the attitude of foreign companies to work on the Russian market: stay→wait→leave.

Since the middle of July, we have added a new status – exited. We assign it to those foreign companies that owned shares in legal entities, and have already disposed of them.

Exited – does not mean the best. There are cases when the company sells its Russian division to management, but continues to supply products there and receive a hidden profit. And there are cases when the company had no business, but stopped supplying.

But still, in our opinion, the exited status is important because it shows the final severance of legal ties with Russia. And the fact that the company stops paying taxes.

How do we know about it? As we wrote earlier, for approximately 1.3 thousand companies from our database, we know their legal assets in the Russian Federation (almost 1.8 thousand JSCs and LLCs). We have now built a system that automatically scans Russian registers of legal entities and detects cases of sales of shares or shares by foreigners to the benefit of Russian companies or individuals. This allowed us to expand the database about companies that fully exited more than twice – up to 105 cases (it should be understood that the addition to our database does not mean the release date, it could have happened much earlier). Their total revenue in the Russian Federation is more than 24 billion US dollars (the total revenue of 1.3 thousand foreign companies in the Russian Federation is 295 billion US dollars).

Here are just a few deals that happened in the last week:

Petro Welt Technologies (Austria, Energy, oil and gas) sold all its Russian assets (PETRO WELT TECHNOLOGIES, KATKONEFT, KATOBNEFT, KATOIL – LEASING, KATOIL-DRILLING) to managers (headed by the chairman of the board Denis Stankevich). Revenue in the Russian Federation – 268 million US dollars.

Schmitz Cargobull (Germany, Automotive) owned LLC “Schmitz Cargobull Russland”, which was sold to a local firm. Revenue in the Russian Federation – 233 million US dollars.

Halliburton (USA, Energy, oil and gas) on September 8 announced it completed the sale of its Russia operations to a Russia-based management team made up of former Halliburton employees. As a result, Halliburton no longer conducts operations in Russia. The company owned Burservice LLC, which was sold to a group of managers. Business turnover in the Russian Federation – 64 million US dollars.

Helly Hansen (Norway, Consumer goods and clothing) is a Norwegian manufacturer and seller of clothing and sports equipment. The company sold LLC “HELLY HANSEN” to a Russian company. Revenue in the Russian Federation – USD 33 million.

Sony Music Group (USA, Entertainment) completely withdraws from Russia 6 months after ceasing operations in the country. The company was owned by Sony Music Entertainment LLC, which was sold to management and changed its name. Revenue in the Russian Federation – USD 36 million.

More information and examples at this link https://leave-russia.org/companies-that-exited 

Of course, if you have information that a company has sold its Russian business, you can always write to us via the feedback form at https://leave-russia.org/ 

WEEKLY FOCUS: Did well-known catering companies leave the Russian market, or did they just change their brand design?

Since the beginning of the full-scale invasion of Russia on Ukraine, many international companies have left the Russian market to not cooperate with the aggressor country and not become a sponsor of the war. Among these companies are well-known catering brands.

Such companies as Burger King, Compass Group, Dunkin Donuts, Jamie Oliver Group, Little Caesars, Ninja Sushi, Papa John’s, Starbucks, Krispy Kreme, Hesburger, Marugame Seimen, Autogrill, McDonald’s have announced their intention to cease operations in Russia completely.

But only McDonald’s and Starbucks stopped their activities and sold their business in the aggressor country.

Russian companies believe that if they copy some foreign brand creating a similar logo design, it will become an adequate substitute for the company. Previously, owners of original brands could go to court and copying or creating similar logos was prohibited. Currently, the possibility of obtaining fair verdicts from Russia’s courts is limited.

McDonald’s became one of the first companies to condemn Russia’s actions and began the exit procedure in the spring. In May, the company completed the sale to existing licensee Oleksandr Govor. In June, the new owner announced the opening of all restaurants in two months. Some of these restaurants received a new name, “Vkusno & tochka” (“Tasty & that’s it”), with the design very similar to the original – McDonald’s.

After Starbucks exited the Russian market, coffee shops with a similar design but with a different name, Stars Coffee, were opened. The media even wrote⁵ that it was the international company that rebranded and did not leave the Russian market, but there is no evidence to confirm this.

Not all international companies in the catering sector have entirely left the Russian market.

Yum Brands has only partially withdrawn from Russia. It is an American fast-food corporation that manages the KFC brand. The company announced a complete exit in July following the completion of the KFC Yum! Brands transaction, but as of now, the transaction has not been confirmed.

AmRest, Focus Brands (Cinnabon), Subway, Hard Rock Café, Inspire Brands (Dunkin’ Donuts, Baskin Robins), and DP Eurasia are companies that have partially withdrawn from the Russian market. The reasons for partial withdrawal are different for each company.

For example, DP Eurasia, which manages the Domino’s Pizza brand in Turkey and Russia, saw a 1.5% decline in sales in Russia in the first four months of the year, which is relatively insignificant. “It’s still very early to talk about new store openings (in Russia). But … our Russian business is sustainable” CEO Aslan Saranga told analysts⁶, saying the group had good relationships with its franchisees in the country.

The CEO said in April that half of the group’s stores in Russia were franchised, and even if the company wanted to close them, it could not do it. This company is also present in Ukraine and still works despite the war.

As can be seen, most international catering brands are in no hurry to exit the market and continue to sponsor the war with few exceptions. On the other hand, the exit of certain companies, especially McDonald’s, had great reputational significance, and no attempt by local companies to replace it on the market could be successful. Therefore, even if public catering businesses are not of critical importance to the Russian economy, their withdrawal is also essential.

You can also contribute by spreading the status of the company calling for the exit from Russia on social networks directly from the company cards on the website https://leave-russia.org/.