EUROPEAN COMMISSION TO FINE OUTOKUMPU EU
OUTOKUMPU OYJ STOCK EXCHANGE RELEASE September 3, 2004 at 1.50 pm
EUROPEAN COMMISSION TO FINE OUTOKUMPU EUR 36 MILLION FOR PARTICIPATION IN COPPER SANITARY TUBE CARTERL - OUTOKUMPU WILL APPEAL Outokumpu Oyj has today received a notification from the European Commission concerning participation by Outokumpus copper tube business in a cartel with respect to sanitary tubes in the European Union. The Commission has concluded that Outokumpu has participated in a cartel and has therefore decided to fine Outokumpu for EUR 36 million. After having received the Commissions complete decision Outokumpu will study it carefully, but will in any case appeal. A provision for the fine will be entered as an unusual item in the third-quarter 2004 results. As part of the same investigation, Outokumpu Oyj received on December 16, 2003 a notification from the European Commission concerning participation by Outokumpus copper tube business in a cartel with respect to air-conditioning and refrigeration (ACR) tubes in the European Union. The Commission concluded that Outokumpu had participated in a cartel and therefore decided to fine Outokumpu for EUR 18 million. A provision for the fine was entered as an unusual item in the fourth-quarter 2003 results. On March 30, 2004, Outokumpu submitted an appeal to the Court of First Instance for Europe with respect of the grounds for the calculation of the fine and the amount of the fine itself. European Commission initiated the cartel investigation concerning producers of copper tubes and fittings in the European Union in March 2001. Outokumpu has from the beginning given its full cooperation to the Commission in the investigation. The Commissions investigation was subsequently divided into three parallel cases: ACR tubes, sanitary tubes and tube fittings. Outokumpu was implicated in the two first cases. In 2003, the net sales of Outokumpus sanitary tube business in Europe were some 2% of the Groups net sales. Since the mid 1990s Outokumpu has issued and implemented detailed business area and group-wide guidelines for the compliance with the competition laws. Training in these issues has covered hundreds of people in Outokumpu management. Regrettably, during the European Commissions investigation it has become evident that those guidelines have not had a strong-enough effect in Outokumpus copper tube business, and that certain individuals have infringed the competition law in conducting the ACR and sanitary tube businesses. Immediately after the start of the investigation in March 2001, Outokumpu CEO issued group-wide instructions requiring full compliance with the competition laws, followed by a comprehensive and strengthened implementation of compliance program within Outokumpu Copper in order to ensure full compliance in the future. Also certain organizational changes were implemented during the spring 2001 with respect to personnel having been implicated in the initial internal investigation by Outokumpu into the activities under the Commissions investigation. Outokumpu CEO, Dr. Jyrki Juusela said: "These infringements with the competition law go against the essence of proper corporate behavior and the Outokumpu values. We have made certain that appropriate guidelines for competition law compliance are in place and that they are strictly followed. Infringement of competition law is not condoned within Outokumpu. As for the fine, we regard it to be totally out of proportion and will certainly appeal. The Commission refers in its decision among others to the stainless steel cartel of 1990 as an aggravating issue, however, Outokumpu was never fined in that case." For further information, please contact: Esa Lager, Executive Vice President Finance and Administration, tel. +358 9 421 2516, esa.lager@outokumpu.com OUTOKUMPU OYJ Corporate Management Eero Mustala Senior Vice President - Corporate Communications tel.+358 9 421 2435, fax +358 9 421 2429 e-mail: eero.mustala@outokumpu.com home page: http://www.outokumpu.com