Sandvik announces a non-recurring charge for the second quarter related to Russia

Rhea-AI Summary

Sandvik has decided to wind down its operations in Russia following its initial pause on February 28, 2022. This decision arises from the ongoing situation in Ukraine. A non-recurring charge of approximately SEK 1 billion will be recorded in the second quarter results, comprising a SEK 0.7 billion write-down and a SEK 0.3 billion provision for personnel costs. As of May 31, 2022, remaining assets in Russia, excluding cash, are about SEK 0.7 billion. In 2021, Russian revenues accounted for 3.6% of Sandvik's total revenues.

Positive

• None.

Negative

• Non-recurring charge of SEK 1 billion impacting second quarter operating results.
• SEK 0.7 billion write-down may indicate significant asset loss in Russia.
• 3.6% revenue exposure to Russian customers highlights vulnerability.
• Potential for additional costs due to ongoing wind-down process.

SANDVIKEN, Sweden, June 29, 2022 /PRNewswire/ -- As previously communicated, Sandvik paused its business activities in Russia on February 28 due to Russia's war in Ukraine. Since then, the company has continuously been assessing and adjusting to the situation, and has taken the decision to wind down operations in Russia.

As a consequence Sandvik will record a non-recurring charge of about SEK 1 billion in the second quarter operating results (EBITA), of which SEK 0.7 billion is a write-down and SEK 0.3 billion a provision mainly relating to personnel costs. These costs will be treated as items affecting comparability. Following the write-down, total remaining assets related to Russia, excluding cash, amounted to approximately SEK 0.7 billion on May 31, 2022.

The wind-down process is ongoing and progressing in a controlled way, where Sandvik seeks to act responsibly towards its employees, and follows applicable regulations and sanctions. Depending on the progress of the wind-down procedures, additional costs may be incurred in the coming quarters.

In 2021, about 3.6 percent of Sandvik Group revenues was from Russian customers.

Stockholm, June 29, 2022 

Sandvik AB

For further information, contact
Louise Tjeder
VP Investor relations
phone: +46(0)70782 6374 

Johannes Hellström 
Press and Media Relations Manager
phone: +46(0)707211008.

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Sandvik announces a non-recurring charge for the second quarter related to Russia

 

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SOURCE Sandvik

FAQ

What is Sandvik's recent decision regarding operations in Russia?

Sandvik has decided to wind down its operations in Russia as of June 29, 2022, due to the situation in Ukraine.

How much will Sandvik record as a non-recurring charge in Q2 2022?

Sandvik will record a non-recurring charge of about SEK 1 billion in its Q2 2022 results.

What percentage of Sandvik's revenues came from Russian customers in 2021?

In 2021, approximately 3.6% of Sandvik's revenues were derived from Russian customers.

What are the components of the SEK 1 billion charge Sandvik will incur?

The SEK 1 billion charge includes a SEK 0.7 billion write-down and a SEK 0.3 billion provision mainly for personnel costs.

Are there any additional costs expected as Sandvik winds down its Russian operations?

Yes, depending on the progress of the wind-down procedures, additional costs may be incurred in the coming quarters.