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Sandvik establishes its corporate Pension Fund in Sweden

In August, following a decision by the Board of Directors, Sandvik established a corporate Pension Fund to meet its pension commitments to salaried employees in Sweden in accordance with the ITP supplementary pension plan.

Sandvik's companies in Sweden have transferred SEK 1,069 M, a sum corresponding to the companies' total pension liabilities, to the new Sandvik Pension Fund in Sweden. The statutes of the Fund have been submitted to the local supervisory authority, the Gävleborg County Administrative Board, for approval.

The benefits of the employees will not be affected in any way by the establishment of the new Pension Fund. Sandvik's liability toward current and retired employees is similarly unaffected.

The assets of the Pension Fund constitute a collateral for the Sandvik companies' pension commitments toward salaried employees. The establishment of this collateral means that the corresponding pension liability is eliminated from the Sandvik balance sheet. Total assets and liabilities are affected only marginally, however, since the provision is principally financed through loans.

The objective is that the assets of the Pension Fund shall be invested to generate an average return that exceeds the financial indexing of the pension liability of approximately SEK 50 M per year. As a result, it is estimated that in the future the Fund will result in lower pension costs for the company.

The assets will be successively invested in the Swedish and international capital markets.

Sandviken, 22 August 2001

Sandvik AB; (publ)