“We have a dream”

IR-communication in Danske Bank

Tonny Thierry Andersen, CFOMartin Gottlob, Head of Investor Relations

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IR according to Danske Bank- Integrated internally and externally

Executive Management

Investor Relations

The market

Analysts Authorities

Rating agencies

Investors

Journalists

Credibility

TransparencyAccessibility

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Why dream about excellent IR?- Make money!

CoCi = Rf + i(Rm – Rf)i = im/m

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im = Covariance between stock i and market

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Why dream about excellent IR?- Having fun… and WIN!

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“Houston we have a problem!”- Poor IR ranking in 2002

• IR function: #14 in Denmark

• Website: #336 in EU*• Website: #36 in DK*• Number of FTE: 1.5• Annual budget: < DKr3m*Webranking by Hallvarsson & Halvarsson

www.danskebank.com/ir in 2002

• Financial information

• Share information

• Shareholder information

• Corporate Governance

• News releases and events

• Presentations

• Ethics

• Analysts and investors

• General information about the Group

• Subscription services

• Structure

• Archive

• Contact information

• Webcasts

• Touch and feel

Existing information, but some development necessaryExisting information, but significant development necessaryShould be developed from scratch

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The plan in all its essence- Five steps in reaching the goal

2006

Situation analysis Fix and repair Agility and execution power

Competence is vital Technology – Key driver Reaching your goals

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Where are we now?

• IR function: #4 in Denmark

• Website: #10 in EU*• Website: #1 in DK*• Number of FTE: 3• Annual budget: DKr10m*Webranking by Hallvarsson & Halvarsson

www.danskebank.com/ir in 2005

• Financial information

• Share information

• Shareholder information

• Corporate Governance

• News releases and events

• Presentations

• Ethics

• Analysts and investors

• General information about the Group

• Subscription services

• Structure

• Archive

• Contact information

• Webcasts

• Touch and feel

Existing information, but some development necessaryExisting information, but significant development necessaryShould be developed from scratch

Completed, but continuous improvement

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IR in practise- The Danske Bank way

Planning

Jan.

Feb.

Mar.

Apr.

May

Jun.Juli

Aug.

Sep.

Okt.

Nov.

Dec. Jan.

Feb.

Mar.

Apr.

May

Jun.Juli

Aug.

Sep.

Okt.

Nov.

Dec. Jan.

Feb.

Mar.

Apr.

May

Jun.Juli

Aug.

Sep.

Okt.

Nov.

Dec.

Transparency IR-intelligence

IFRS M&AEvaluation of hosts

5: Outstanding

4: Better than expected

3: As expected

2: Fairly good

1: Poor

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Four quarters of Investor Relations- First the basic one……

Annual report

Q1 report

Interim report

Q3 report

Jan.

Feb.

Mar.

Apr.

May

Jun.Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Silent period

Road show

Silent period

Silent period

Silent period

Road show

Road show

Road show

• Conferences

• Capital markets day

• 1-n-1 with analysts and investors

Planning

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Four quarters of Investor Relations- Information input and output

Jan.

Feb.

Mar.

Apr.

May

Jun.Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Internal web audit 1

Internal web audit 2

Internal web audit 3

Internal web audit 4

External web audit 1

External web audit 2

• Daily: News watch service

• Monthly: What’s the story? Internal financial reports

• Continuously: Feedback from CFO: Reports, internal memos, presentations

Meeting with EXCO

Meeting with EXCO

IR Intelligence

IR Intelligence

IR Intelligence

IR Intelligence

Planning

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Increasing transparency- More than just financial reports

Transparency

2001

Financial report

Fact Book Speech & transc.

White Papers

Presentation - analystsPresentation - press

Live picture

2004 & 2005

Interactive accounts

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Preparing a financial report- Diary up to an announcement

T-22 Attend meetings where the story line is discussed

T-21 to T-3 Assist in preparing the report and Fact BookPresentation & speech – conference callPresentation & speech – press conference*

T-7 Dry run 1 with CFO

T-5 “The flip side” – Essential road show input

T-4 FAQ from the press

T-3 Dry run 2 with CFO

T-1 Dry run 3 with CFO

T-1 Management meeting

T Announcement day. IR open until 9 pm

T+5 sec. E-mail to analysts and investors

T+1 day Calibration IR/CFO (CEO). Reactions to our story

Details combined with the full picture

*) Q2 and Q4 only

Transparency

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The flip side- Helping you in telling your story

Comments Y/Y

Comments Q/Q

Transparency

Guidance

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Web site and web cast- Always room for improvement

Structure

Contents

Touch & feel

Audit Commitment

Development is a continuous process

Not only financials• Policies • Integrated communication• Interactive elements

• Alerts and reminders• Flexible elements and

adaptations:font size, contrast

• Customised web sites and targeted micro sites

Transparency

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Sources of information- Be open minded!

Corp

ora

t eB

est

Pra

ctic

e

And of course…

Transparency

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IR intelligence (I/II)- Get and give the message

Questions answered:• Conference call & web cast

• How many participated? • Participant composition

(journalists, investor, analysts)• Topics discussed during the Q&A

• Road show• How many meetings?• Percentage of shareholders met?• Topics discussed• Feedback from road show

(strengths, weaknesses, opportunities, concerns)

• Share price development• Compared to peers

IR intelligence

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IR intelligence (II/II)- Get and give the message

Questions answered:• Analysts estimates

• How have they changed?• How have they developed over time?• Do they follow our guidance?• Where are the most important deviations

to our guidance?• Have the recommendations changed?

• Analyst/broker evaluation• What analyst/broker were closest to total income,

expenses, profit before credit losses, net profit?• Evaluation of road show

IR intelligence

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Evaluation of hosts- Good performance gets rewarded

Evaluation of hosts

Criterion WeightInvestor quality 20%Client profiles 10%Pre road show communication 5%Planning of the day 10%Host 5%Feedback from clients 15%Continuity of DB coverage 20%Analysts knowledge of DB 15%Total 100%

Rating scale

1. Poor2. Fairly good3. As expected 4. Better than expected5. Outstanding

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Communication is difficult- Penalties for insufficient communication

IFRS

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Getting to know your audience- Early and continuous dialogue with key stakeholders

• Analysts’ IFRS knowledge is inconsistent, with the majority lacking basic IFRS training

• Analysts require detailed new numbers to update their valuation models

• Created a menu of self-service tools providing a range of information – from high level to detailed numbers

• Make language less technical and accounting oriented

• Provide analysts with the underlying parameters for financial ratios

IFRS announcement

Follow-up

Feb. 2005 March. 2005Sept. 2004

IFRS drafts sharing

Nov. 2004

Early conversation

s (Danish analysts)

Dec. 2004

2nd round of conversation with foreign

analysts

Jan. 2004

Amendments

Findings Changes made

IFRS

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No questions unanswered- Overview of information published

Presentation/Web cast White paper Spreadsheet with comments

Information provided

Top line Granular Changes in top line

numbers Top line description of

changes Top line impact of each

new standard Financial ratios

Detailed differentiation of quantitative changes due to valuation and presentation

Explanation of how interpretations were reached, deviation from sector trends

Potential future performance trends

Detailed comments on each effect

Full balance sheet and P&L Excel = copy paste in to

your own model

All information published on www.danskebank.com/irifrs

IFRS

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Communication M&A- Transparency needed when surprising the market

Contents• Market data

Macro economics, description of the two banking sectors, competitive landscape, external links

• Acquisition processWhat will happen next? When is approval expected?

• The two targetsFinancials for the two banks and consolidated numbers

• FAQ25 questions and answers

• Downloads13 files: presentations, press releases, Q&A, rating confirmations, excel spreadsheet with dataStatistics – December 14

.COM 1,200 hits

.DK 1,800 hits

M&A

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And of course a web cast- Record high participation

Participation• Teleconference: 143• Web cast (Dec. 14): 124• Web cast (Dec. 15-18): 83

M&A

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Everybody got a dream- What is your IR dream?

www.danskebank.com/ir