After 170 years of business in Russia, German giant Siemens will exit the market as a result of the war in Ukraine.
After the start of the February 24 invasion, Siemens put all new business in and international deliveries to Russia and Belarus on hold. It has now started proceedings to completely wind down its operations and business activities in the country.
The announcement to exit the Russian market was made at the same time as Siemens released detailed information on its Q2 earnings, illustrating the financial effects of its sanctions on Russia.
Roland Busch, president and CEO of Siemens AG, said in a statement: “We condemn the war in Ukraine and have decided to carry out an orderly process to wind down our industrial business activities in Russia.
“We are evaluating the impact on our people and we will continue to support them to the best of our abilities. At the same time, we provide humanitarian assistance to our colleagues and the people of Ukraine and stand with the international community in calling for peace.”
In an interview with Bloomberg, Busch reaffirmed the company’s decision as a necessity, “It’s a tough decision, after being 170 years in the county, but there is no alternative and it’s very clear that this is the way the sanctions are supposed to work.”
Have you read:
Renewables, nuclear and energy efficiency in IEA plan to break EU reliance on Russian gas
Norwegian giant Equinor announces exit from Russia
IEA – Cut EU reliance on Russian gas with renewables, nuclear and energy efficiency
Impact
Siemens, which kicked off its business in Russia in 1851 by delivering telegraph materials, now employs 3,000 people across different businesses.
The move from the German conglomerate will trigger at least a €600 million ($630 million) hit to their business, due to impairments and other charges, mainly in mobility.
According to Reuters, Busch stated further impacts were to be expected, mainly from non-cash charges related to the winding-down of legal entities, revaluation of financial assets and restructuring costs. Siemens shares also dropped 5% in early trading as the company missed analysts’ expectations for second-quarter profit.
The country currently contributes about 1% of Siemens’ annual revenue, with most of the present-day business concerned with maintenance and service work on high-speed trains.
The announcement makes Siemens one of the latest companies – almost 1000 to date – to withdraw their business from Russia due to the events transpiring in Ukraine, which have been described by Moscow as “special military operations”.
The business will manage the orderly process to wind down its activities in line with regulatory requirements and international sanctions.
