After 170 years, Siemens will leave Russia for invasion of Ukraine

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May 13, 2022 | 1:53 p.m.

Siemens will leave the Russian market due to the invasion in Ukrainehe said Thursday, taking a hit from €600 million ($630 million) in its business during the second quarter, with more costs to come.

The German industrial and technological group became the last multinational in announcing losses related to its decision to leave Russia after the invasion of February 24.

Various companies, from breweries Anheuser-Busch InBev and Carlsberg to sportswear manufacturer Adidasthe car manufacturer Renault and several banks have been calculating the cost of suspend operations or withdraw from Russia.

Siemens CEO, Roland Bushdescribed the conflict as a “turning point in history”.

We, as a company, have clearly and strongly condemned this war. We are all shaken by war as human beings. And the financial figures must take a backseat to the tragedy. However, like many other companies, we are feeling the impact on our business,

Busch told reporters.

During the second quarter, Siemens incurred 600 million euros in impairment and other charges recorded primarily in its mobility business train manufacturing after the sanctions against Russia, confirmed the company.

Busch explained that more impacts were expected, mainly from charges non-monetary related to the liquidation of legal entities, the revaluation of financial assets and restructuring costs.

“From today’s perspective, we see further potential risks to net income in the low to mid triple-digit million range, although we cannot define an exact time frame,” he added.

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Siemens shares fall after announcement

Siemens shares fell 5% in early trading as the company missed analysts’ expectations for second-quarter earnings.

The Munich company employs 3,000 people in Russiawhere it has been active for 170 years. He first went to Russia in 1851 to deliver devices for the telegraph line between Moscow and Saint Petersburg.

The country now contributes about 1% of Siemens’ annual revenue, with most of the current business related to maintenance and service work on high-speed trains. Your sites in Moscow and Saint Petersburg now they are shrinking, Busch said.

Costs weighed on Siemens’ second-quarter earnings, with net income cut in half to €1.21 billion ($1.27 billion), below analyst forecasts of $1.73 billion.

In addition, the company registered a industrial profit of 1,780 million euros13% less than the previous year and also below forecasts.

But demand remained strong, with orders 22% higher on a like-for-like basis and revenue 7% Taller.

As a result, it confirmed its outlook for the full year, with comparable revenue growth of 6% to 8% for the full year, with the slowdown in mobility expected to be offset by faster growth in factory automation and digital buildings.

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