Jan. 2006 — Following Outokumpu’s announcement that it would cease operations at the Coil Products business in Sheffield (CPS), a consultation process has been taking place between Management and the local Trade Unions in line with legislation to consider ways of avoiding or reducing job losses or mitigating the impact of the job losses.

As a result of this process, both parties have accepted that there are no financially viable internal options to continue operations at CPS. To this end, appropriate employee severance, outplacement and career support arrangements have been agreed with the local unions to mitigate against the job losses. The Trade Unions have agreed that the consultation process for CPS is now concluded.

A final decision has now been made to cease operations at CPS at the end of April 2006. Detailed plans to satisfy remaining customer orders and to wind down operations at CPS in a safe manner are being finalized.

Personnel affected by the decision include some 570 in CPS and some 100 in the Sheffield meltshop, which will in the future supply raw material only to Outokumpu’s long products and plate operations. Cessation of operations at CPS will result in non-recurring write-downs and provisions, which will be recorded in the fourth quarter 2005 accounts, as previously announced.

The effect on the Group’s 2005 gearing will not be significant due to released working capital. The improvement of the Group’s future operating profit level is estimated to be some EUR 50 million annually from the second half of 2006 onwards, compared to continuing business as usual within the current structure, and with the prevailing price and loading levels.

Outokumpu says it will continue to deliver customers with its extensive selection of stainless grades and products, and complemented with commercial excellence will strive to retain or even increase market share in Europe. The UK market will continue to be served with Outokumpu’s stainless steel through its UK sales and distribution company, including the new service center in Sheffield, and all customer contacts will remain unchanged.