(News Bulletin 247) – The two groups listed on the CAC 40 had to pass significant accounting impairments and give up a relatively large part of their income.

A year after Moscow’s invasion of Ukraine, many CAC 40 groups have retreated, the impact of sanctions making it difficult to maintain their presence in Russia. Legrand was the latest, announcing at the beginning of the month its desire to withdraw from the country and passed a depreciation on the assets in question reaching 147 million euros.

A cost that turns out to be relatively modest – Russia represents only 1.5% of the company’s total sales – in view of the impact that other companies in the Parisian index had to suffer.

Renault gave up its second market

The car manufacturer Renault was particularly hard hit. Even if, thanks to excellent financial performance elsewhere, its share price did not ultimately feel it too much, the share price evolving at 41.56 euros, which is more than the 37 euros posted by the title before the market fears then does not act the Russian invasion.

The diamond group simply had to separate from its second market after France, with 482,264 registrations in 2021 (compared to 521,000 for France) and a market share close to 29%. Renault was present both through Renault Russia and its Russian subsidiary AvtoVAZ, known for the famous Lada brand, and had three factories in Moscow, Togliatti and Izhevsk. In terms of revenue, Russia accounted for 10% of the group’s total, or 4.55 billion euros.

Above all, AvtoVAZ posted in 2021 an operating profitability significantly higher than that of Renault, around 8.7% against 3.6% for Renault as a whole.

The ace. International sanctions have gradually prevented Russian factories from operating, with in particular supply difficulties for certain electronic components. After a few weeks of “stop and go”, Renault decided in May to sell 100% of Renault Russia to the city of Moscow and its 67.7% stake in AvtoVAZ to NAMI, a research institute dependent on the Russian Ministry of Energy. ‘Industry. “A painful decision”, will recognize Luca de Meo, the general manager. According to several media, these transfers were made at the price of the symbolic ruble. The group has nevertheless provided an option to buy back its stake in AvtoVAZ over the next six years.

From an accounting point of view, the withdrawal resulted in an accounting charge of 2.3 billion euros, effectively drawing a line under the value of these Russian assets. This prevented Renault from publishing a profit for 2022 with a net loss of 338 million euros. Beyond the figures, the abandonment of Russia, if it constituted a necessary evil, reinforced the vulnerability of the group on the European continent.

SocGen has closed an adventure

For Societe Generale, the withdrawal from Russia was also painful. The country represented 18.6 billion euros of exposure (all counterparties and risks of a bank) or 1.7% of the total in 2021. In value, this amount turns out to be four to six times higher than those of Crédit Agricole and BNP Paribas.

Moreover, Russia contributed to the net banking income, the equivalent of the turnover for a bank, up to 2.8% of the total, and a bit less (2.7%) to the net result group share. Societe Generale was present in particular through its subsidiary Rosbank, which represented approximately 80% of its exposure in the country and of which it had become the majority shareholder in 2008. At the end of 2021, Societe Generale had made it a priority to become a leader in sustainable development in Russia. and had assigned it a target of growing its customer base in retail banking by 5% to 10% per year.

But here again the Banque de la Défense had to resolve to cut ties with Russia. In April, Societe Generale sold its banking and insurance activities in the country and sold Rosbank to Interros Capital, owned by Russian billionaire Vladimir Potanin, and former owner of…Rosbank.

This “orderly exit”, as the bank called it, weighed on its net profit by 3.3 billion euros over the whole of 2022. Without this exceptional charge, the establishment would have equaled its profit record. in 2021.

Unlike Renault, Societe Generale has since failed to recover its share price, which exceeded 30 euros before the escalation in Ukraine. Its share is currently at 27.72 euros.

The heavy depreciations of TotalEnergies

Still, the heaviest burden was borne by the oil group TotalEnergies, with depreciations and provisions of 14.8 billion dollars for 2022, which did not prevent the major from generating record net income of more than 20 billion dollars (19 billion euros) thanks to the jump in the price of hydrocarbons on the market. In particular, the company wrote down its entire 19.4% stake in Russian natural gas producer Novatek, a stake it cannot sell due to sanctions against Russia.

The oil giant still has, in addition to its shares in Novatek, a 20% stake in the liquefied natural gas project, Yamal LNG. “Since the beginning of the year, we have gradually withdrawn from all contracts, all projects and all fields which had only a domestic vocation. We have been a partner in a certain number of gas fields for domestic use, We are out of it. We only have a stake in the Yamal LNG plant and this famous liquefied natural gas contract, which is a European contract and a commitment”, explained the group CEO in November 2022 before the deputies. .

“To disengage, two solutions are available to us: either the Russian authorities expropriate us – which is not totally impossible, they have just done it for other Western groups -; or the European Union decides to sanction imports of Russian gas. But it has not decided it, nor the European leaders with whom we are in contact. We therefore continue to transport this liquefied natural gas”, he continued. “The question is not financial, the question is to supply Europe with liquefied natural gas”, assured the leader.