As Siemens AG leaves Russia over Ukraine war, Siemens Healthineers will stay

While the multinational conglomerate Siemens AG announced plans today to remove its industrial businesses from Russia due to the ongoing invasion of Ukraine, the separately managed medtech division—Siemens Healthineers—will remain in the country and continue to provide its healthcare products and services.

Though Russia accounts for a small portion of its global haul, Siemens AG took a hit of 600 million euros ($621 million) to profits over the previous quarter, largely due to the impacts of sanctions halting the sales of its rail cars, train engines and maintenance services.

“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,” said Roland Busch, president and CEO of Siemens AG, which also maintains a diverse portfolio spanning power grid technologies, manufacturing automation and heavy equipment, among others.

“We join the international community in condemning the war in Ukraine and are focused on supporting our people and providing humanitarian aid,” Busch added. “We are evaluating the impact on our people and we will continue to support them to the best of our abilities.”

Siemens AG put all new business and international deliveries to Russia and Belarus on hold after the start of the war in late February. Now, it hopes to “manage the orderly process to wind down its activities in line with regulatory requirements and international sanctions,” the company said.

Meanwhile, Siemens Healthineers—which Siemens AG holds a majority stake in, following the medtech’s 2018 IPO in Germany—reiterated its position that access to healthcare is a fundamental human right in a statement today to Fierce Medtech.

Siemens AG’s decision to exit Russia does not include Siemens Healthineers, according to the company, which previously said it would continue to support healthcare providers and patients in the country even as other companies departed the region in early March.

In its latest quarterly earnings report (PDF) delivered earlier this month, Siemens Healthineers addressed the conflict saying: “It is assumed that developments related to the war in Ukraine will have no material adverse effect on our business activities,” as the current sanctions generally do not target the healthcare industry.

On a call with investors May 4, Siemens Healthineers CFO Jochen Schmitz also said that any drop in revenue from the region would be replaced by the company’s stronger sales gathered elsewhere. However, the war has also affected the cost side of the company’s overall business, Schmitz said according to a transcript, with impacts on logistics and the global supply chain.

For the second quarter of the 2022 fiscal year, Siemens Healthineers reported companywide revenue of about 5.5 billion euros ($5.8 billion), representing year-over-year growth of nearly 16%.

Contributing to that growth, and supporting a 37% boost in its diagnostics division, was the launch of its COVID-19 rapid antigen test in the U.S. this past January, leading to a double-digit increase in the company’s revenues in the Americas.