Siemens withdraws completely from Russia

Maintenance of trains in St. Petersburg

Siemens withdraws from Russia.

(Photo: picture alliance/dpa)

Munich Siemens withdraws completely from Russia after around 170 years. “We condemn the war in Ukraine and have decided to end our industrial business activities in Russia in an orderly process,” said CEO Roland Busch on Thursday in Munich.

The technology group had already announced at the beginning of March that it no longer wanted to do any new business with Russia. However, the long-term service contracts should initially continue to be fulfilled. But now it was said that the business was to be discontinued – including the service and maintenance business. “This decision was not easy for us, because we have a duty of care towards our employees and long-standing customer relationships in a market in which we have been active for around 170 years,” said Busch.

In the past quarter, the sanctions imposed on Russia already had a significant impact on Siemens’ results. Impairments and other charges – mainly in the railway division – already burdened the profit after tax in the second quarter of the 2021/22 financial year, which ends on September 30, with 600 million euros. Now there could be another low to mid three-digit million amount.

Mainly because of the Russia effect, Siemens profits halved from January to March to 1.2 billion euros. The operating result of the industrial business fell by 13 percent to just under 1.8 billion euros.

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The demand at Siemens is currently higher than expected, but especially in the digital industries with automation and industrial software. In the second quarter, the group’s sales increased by a comparable seven percent to 17 billion euros, and incoming orders even increased by 22 percent to just under 21 billion euros.

Russia withdrawal difficult for Siemens

Busch raised the growth targets for digital industries and intelligent infrastructure, while rail technology will now only stagnate. In the entire group, Siemens expects comparable growth of six to eight percent in 2021/22.

The decision to withdraw completely from Russia was not easy for Siemens. An exit is much more difficult for companies like Siemens than for companies that want to sell consumer goods in Russia. The contracts for the maintenance of Siemens trains often run for decades.

The group has been active in Russia since 1852 and employs a low four-digit number of people there. According to the company, business in Russia accounts for less than one percent of Siemens’ sales.

The Ukraine conflict has long been a difficult issue for Siemens. After the annexation of Crimea, Russia shipped two of Munich’s gas turbines to Crimea against the purchase agreement and the will of Siemens, despite EU sanctions.

At the time, Russian President Vladimir Putin told him the untruth, ex-Siemens boss Joe Kaeser explained in an interview with the Handelsblatt. The current head of the supervisory board of Siemens Energy visited Putin at the beginning of the Crimean crisis in 2014 and spoke of “short-term turbulence”. “It was a mistake I learned from,” said Kaeser.

>> Read the full interview here: Joe Kaeser on his dealings with Putin

His successor Roland Busch is now severing ties to Russia entirely. In doing so, Siemens is following the example of many other Western companies. After initial hesitation, SAP also decided to end business relationships with existing customers.

More: Siemens Energy falls into the red

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