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Consequences of the war in Ukraine: Siemens closes business with Russia

Status: 05/12/2022 09:09

The Siemens group is completely closing its business in Russia. The decision has already cost the company a lot. Further charges are also foreseen in the future.

The Siemens group will fully conduct its business in Russia. “We condemn the war in Ukraine and have decided to end our industrial activities in Russia in an orderly process,” CEO Roland Busch said in the morning. Siemens has already initiated adequate procedures to stop industrial operations and all industrial transactions. “This decision was not an easy one for us,” Busch said. Siemens is currently examining the consequences for the local workforce and “will continue to support them to the best of their ability.”

After Russia’s attack on Ukraine, Siemens had already stopped new international business and supplies to the country and Belarus. Siemens recently achieved around one percent of the group’s sales in Russia and Belarus.

Measures already evident

The measures decided have already put a strain on the second quarter of the 2021/22 financial year, which ended at the end of March. The company recorded, among other things, write-downs of € 0.6 billion. They mainly refer to the train business. The company also believes that further charges in the three-digit mid-range of one million euros are possible – the time when they will be booked is still open.

Profit after taxes fell by almost half to 1.2 billion euros. The previous year Siemens also benefited from a profit from the sale of the transmission manufacturer Flender. Sales grew 16 percent to € 17 billion.

Busch spoke of an extremely difficult environment. In addition to the war in Ukraine, the people of Munich are suffering the consequences of the crown pandemic. It’s also about avoiding major disruptions, although there are greater risks with electronic components, raw materials and logistics. In the automation technology sector, however, delivery times were longer.

Significantly more orders

Despite the disruption of business in Russia, incoming orders increased by nearly a third to nearly € 21 billion. Siemens confirmed its earnings forecast. In terms of sales, management is a little more optimistic than before with comparable sales growth expected to be 6 to 8%.

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