After the start of the war, Siemens put all new business in and international deliveries to Russia and Belarus on hold. The comprehensive international sanctions, as well as current and potential countermeasures, impact the company’s business activities in Russia, particularly rail service and maintenance.
Roland Busch, President and CEO of Siemens AG, said: “We condemn the war in Ukraine and have decided to carry out an orderly process to wind down our industrial business activities in Russia. This was not an easy decision, given our duty of care for our employees and long-standing customer relationships, in a market where we have been active for almost 170 years. 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.”
The business will manage the orderly process to wind down its activities in line with regulatory requirements and international sanctions.
In Q2, Siemens increased revenue 7% on a comparable basis, excluding currency translation and portfolio effects, to Euro 17.0 billion (Q2 2021: Euro 14.7 billion). Growth in orders was even stronger, increasing 22% on a comparable basis to Euro 21.0 billion (Q2 2021: Euro 15.9 billion). At 1.23, the book-to-bill ratio was at an excellent level. The order backlog totaled Euro 94 billion.
Profit Industrial Business was Euro 1.8 billion (Q2 2021: Euro 2.0 billion) with a profit margin at the Industrial Business of 14.6%, excluding Russia-related impacts, and of 11.0%, including predominantly non-cash impacts of the decision to exit Russia (Q2 2021: 14.7%). Net income totaled Euro 1.2 billion (Q2 2021:Euro 2.4 billion).
The decline in Profit Industrial Business and net income is largely attributable to impairments and other charges totaling Euro 0.6 billion, mainly at Mobility, subsequent to sanctions imposed on Russia. In addition, the prior-year quarter benefited from a one-time gain of Euro 0.9 billion within discontinued operations from the sale of Flender GmbH. Basic earnings per share before purchase price allocation were Euro 2.21, excluding Russia-related impacts, and Euro 1.50, including predominantly non-cash impacts from the decision to exit Russia (Q2 2021: Euro 2.96).
At Euro 1.3 billion for the Siemens Group, free cash flow all-in from continuing and discontinued operations was again at an outstanding level (Q2 2021: Euro 1.2 billion). The Industrial Business generated strong free cash flow of Euro 1.9 billion and a cash conversion rate of 1.07.
