Nestle Russia placed under temporary administration

A presidential decree has been made that places the assets of Nestle Russia under temporary administration where they are to be run by a local company AO L.E.V. Menedzhement, set up in 2024. Nestle has stated that it takes note of Russia's presidential decree and is assessing the situation and its options. Nestle Russia accounts for ~2% of sales and we estimate between 2-3% of EBIT. We would expect the stock to fall by the potentially lost earnings. The read across to other Staples is negative in Food/HPC to Haleon (Sell, last close 339.70p), which we estimate is ~4-5% EBIT from Russia (and part of the margin story), though there have been no reports that this could be transferred.