Robotics And Automation

1. Tracking the next Megatrend
May 2015
Richard Lightbound
richard@robostox.com

2. Topics for discussion
1. What is Robotics & Automation?
2. Industry Trends – Why Now?
3. ROBO-STOX Index & Methodology
Bill Gates April 2014 – Anniversary Letter
“Today though, I am thinking much more about Microsoft's future than its
past. I believe computing will evolve faster in the next 10 years than it ever
has before. We already live in a multi-platform world, and computing will
become even more pervasive. We are nearing the point where computers
and robots will be able to see, move, and interact naturally, unlocking many
new applications and empowering people even more.”
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3. Industry in numbers
$1.2 TRILLION
7,000
Businesses will have drone
permits within the next
three years
In robotics-related
spending by 2025
54 %
Growth rate in China
last year alone
Per hour to power an
industrial robot compared to
$20 per employee
75 CENTS
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4. What is Robotics and Automation?

5. Focus on Technology & Applications
INDUSTRIAL MFG MATERIALS HANDLING HEALTHCARE
MILITARY /SECURITY AGRICULTURE ENERGY
3D PRINTING
CONSUMER PRODUCTS
PRE-PROGRAMMED,
REDUNDANT TASKS
SENSING, PROCESSING
AND ACTING
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6. Robotic Applications
Unmanned Aerial Vehicles (Drones):
More than 100,000 jobs will be created upon legalized integration
• Military
• Surveillance
• Farming
• Search and rescue
• Mapping and surveying
• Fire fighting
• Pollution control
Parrot – Assorted range of drones for sales to the
consumer market
AeroVironment – received first FAA drone license
for commercial use
Northrop Grumman– delivers unmanned
aircraft for defense, homeland security and commercial
aviation
DJI – Leaders in quadcopters. Developing products for
use in filmmaking, conservation and energy infrastructure
DEVELOPMENTS COMPANIES TO WATCH
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7. Robotic Applications
HEALTHCARE
$4 trillion annually in the US alone
• Surgical robots
• Pharmacy automation
• Exoskeletons
• Assisted recovery and rehab
• Personalized care
• Non-invasive diagnosis
Intuitive Surgical – DaVinci robotic device is used
for minimally invasive operations. Fewer and smaller
incisions allow quicker recovery.
Accuray Inc. – robotic system for tumor treatment
via radiation therapy – extraordinary precision
Cyberdyne – Hybrid Assistive Limb suit (HAL)
Aethon Inc. – automates internal logistics by
delivering supplies and materials via TUG, smart
autonomous mobile robot
DEVELOPMENTS COMPANIES TO WATCH
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8. Robotic Applications
AGRICULTURE:
The global agricultural robotics market was worth $817 million
in 2013 and is expected to reach $16.3 billion by 2020.
• Drones or UAVs; data gathering
• Automated milking systems
• Agribotics; driverless tractors
and robotic harvesting
equipment
COMPANIES TO WATCH
John Deere – worldwide leader in agriculture
machinery. Developed unmanned tractors capable of
spraying, mowing and harvesting
Trimble Navigation – develops farm navigation
equipment and crop management systems
DEVELOPMENTS
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9. Industry Trends

10. 2014 – Sales go through the roof

11. Industrial Robots penetrate many industries
Automotives industry still dominates the automation space
IFR industrial robots shipped by industry
Automotives
Plastic and chemical
Metal
F&B
Electrical & electronics
Others
Units
0
25000
50000
75000
100000
125000
150000
175000
200000
2008 2009 2010 2011 2012 2013
Gavekal Data/Macrobond
 Industrial Robots have been
around for years and
automation is not a new
concept.
 Most manufacturing in the
last century has been “fixed
automation” around the
dull, dirty and dangerous
tasks.
 Due to technological
limitations, cost and the
effort required to structure
the environment to suit the
tool, traditional industrial
robots have penetrated only
an estimated 10% of the
manufacturing domain.
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12. Robotics is a Global trend
• Robots are going
global unlike the cheap
labour outsourcing era
which was pioneered
by China and other
EMs.
• In the developed world
USA is doing the best
job embracing the
robots revolution.
• Surprisingly Japan is
the worst.
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13. Robot density – look at China
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14. Technology costs are decreasing
Faster price declines will drive higher robots adoption
Global robotics shipment (rhs)
Avg. unit value (lhs)
New price goal? (lhs)
USD
0
10000
20000
30000
40000
50000
60000
70000
80000
0
25000
50000
75000
100000
125000
150000
175000
200000
2000 2002 2004 2006 2008 2010 2012 2014
Gavekal Data/Macrobond
 An increasing number of
companies are finding
robotics a cost-effective
solution to their production
and service needs.
 Robots are becoming
cheaper, more productive,
and more sophisticed while
the cost of human labour
continues to rise.
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15. Convergence of Robot costs and wages
 China wages increased 500%
since 2000 and are expected
to continue at 18% per
annum.
 Robotics and automation
can boost the productivity of
human labour, reducing unit
output costs through scale
production as well as cost-
effective highly precise and
sophisticated production.

16. A labour substitute is mandatory
 The world is aging causing
the traditional working age
population to shrink.
 That process has already
started in Japan and EU
 China could see its working
age population contract as
early as 2020.
 Even India is expected to
experience this trend by
2045.
 These 5 regions produce
approximately 70% of the
world’s output.

17. Automation Tour - Nov’14 Japan & China
• 35 interviews with a broad sample of companies:
– 3 largest robot makers: Fanuc, ABB & Yaskawa
• CN - Siasun Robot & Automation, GSK, Estun Automation and Effort Intelligent
Equipment
• TW - Hiwin and Delta
– Machinery Builders: Fuji Machine, Toshiba Machine, JTEKT, Mitsubishi
– Industrial Automation: Rockwell
– Component suppliers to robot makers:
• Servo Motor: Yaskawa and Delta Electronics
• Industrial Lasers: Rofin-Sinar
– Major suppliers to automotive sector: Fauerica and CSSC
– System integrators
– Feel from the research perspective:
• Professor Sugano – human robotic interaction
• Professor Ishikawa – active control and high speed imaging
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18. Automation Tour - Insights
Key Market Findings and Technology Trends:
1. Automotive and Smartphone capex strong for 2015 and beyond
2. Internet of Things - Software costs coming down due to common standards, open
source coding, machine learning and self teaching
3. Ultra high speed vision – Focus on location & navigation technology driving advances
in machine vision and less expensive: sensors, gyros, accelerometers etc…plus the algorithms
that fuse it all together getting better and cheaper
4. New industry applications – not just automotive and electronics
5. China – Buyer and Maker of Robots1,000 Robot Companies
• “US$154 billion rise of the robots planned for Pearl River Delta manufacturing” – SCMP April 7th 2015
6. Big players going “COBOT”
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19. COBOTS - inexpensive table-top robots will disrupt
light manufacturing
BAXTER SAWYER YUMI
UR3
LBR iiwa
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20. What does ROBO-STOX do…?

21. Part 1 – Industry Analyst Team
Professor Henrik Christensen - Dept.
Chair of Robotics at GA Tech University
Professor Raffaello D’Andrea – ETH
Zurich, Dynamic Systems & Control. Co-
founder of Kiva Systems
Professor Wyatt Newman - Humanoid
Robotics & AI
RESEARCH
Mr. Morten Paulsen - CLSA, Head of
Research for Robotics and Machinery
Industry
Mr. Louis Gave - Gavekal, CEO Money
Management and Global Research
Mr. Scott Davis - Barclays Capital, Head
of Global Industrials Equity Research
ACADEMICS
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22. Part 2 – Global Database w/3,000+ companies
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23. Part 3 – ROBO-STOX Industry Classification
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24. Part 4 – ROBO-STOX UCITS Compliant Index
• This index is global, deliberately broad across the industry and built for the long term which
reflects the early stages of the robotics and automation industry
• Including all players in a proportionate and equally weighted fashion ensures that we capture
the overall growth trend while minimizing company-specific risk.
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25. Equal weighing approach across two tiers
Bellwether Non-Bellwether
 Index made up of “bellwether” stocks (40%) and
“non-bellwether” stocks (60%)
 Bellwether companies are well established leading
companies, whose core business is directly related to
robotics and automation.
 Non-bellwether companies have a distinct portion of
their business and revenue in robotics and
automation and have the potential to grow through
innovation and/or market adoption of their products
and/or services.
 This approach ensure the index provides exposure to
companies in the early stages of new innovation and
technologies as well as the more established players.
 The 40/60 weighting results in each bellwether
having roughly twice the weight of each non-
bellwether
 The index then weights each of its constituents on an
equally weighted basis, avoiding the large
capitalisation and “buy high, sell low” biases of
market capitalisation indices

26. Index Components – bellwether companies

27. Geography and market capitalization

28. Part 5 – ETF Securities
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29. Thank You

30. Disclaimers
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