1. Challenges and Opportunities in Baltic Economies, Tech Industry 2016, Riga Heldi Kell, Head of Manufacturing Sector , DNB

2. EXPORT – is (and will be) the main driver of Baltic economic growth 0 5 000 10 000 15 000 20 000 25 000 30 000 2010 2011 2012 2013 2014 2015 Estonia Latvia Lithuania Total exports ( goods + services, mEUR ) Good recovery after crises , however , stagnation over last few years Difference in main export partners, but also in goods and services Manufacturing makes up nearly 60% of Estonian goods exports (40% of total exports )

3. Growth in gross salaries – faster than GDP growth for the last 3 years * Forecast from Ministy of Finance, September 2016 Estonian economy faces a number of challenges : Declining population – over the past decades 1260000 1320000 1380000 1440000 2013 2014 2015 2016F 2017F 2018F GDP real growth, % 1.6 2.7 1.5 1.3 2.5 3.0 Gross salary growth, % 7.0 5.9 6.0 6.7 5.5 5.5 Relatively low levels of productivity – in combination with high levels of empolyment limits investments to the region 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 6 6,5 7 7,5 8 8,5 9 9,5 Sales income and employment costs ratio Net profit and employment costs ratio (right-hand scale) Geopolitical situation – the influence of the Russian markets ? Economic situation of main export partners

4. Source : Eurostat

5. Source : Eurostat 2011 2012 2013 2014 2015 2016F 2017F 2018F GDP real growth, % 7,5 4,3 1,6 2,7 1,5 1,3 2,5 3,0 Consumer Price Index, % 5,0 3,9 2,8 – 0,1 – 0,5 0,2 2,7 2,7 Gross salary growth, % 5,9 5,7 7,0 5,9 6,0 6,7 5,5 5,5 Unemployment rate, % 12,4 10,1 8,7 7,4 6,2 6,2 7,2 8,4 * Ministry of Finance forecasts , September 2016

6. Source : Eurostat

7. European Commission Digital Economy & Society Index (DESI) Estonian overall score 0.59 7th place among 28 EU states

8. To overcome these challenges and grow export , we need cooperation Estonia, Latvia and Lithuania are to remain small open economies where sustainable economic growth must come from export The preliminary promising signs in 2016 should be viewed cautiously . Structural changes take place gradually and need time Industries in all 3 countries need scale for new investments and export opportunities – vertical, horizontal and geographical co – operation S marter investments – automation and digitalization (Industry 4.0), investments into education system and labour qualification My governing thoughts

9. DNB BALTIC STRATEGY: – To achieve scale , DNB and Nordea have decided to combine their Baltic activities