Weekly Barometer 25 janvier 2012 · Product (revenue opportunity, e.g. iPhone) Business model (e.g....

Weekly Barometer 25 janvier 2012

Innovation Certificate

➢ Innovation is becoming core in many industries, allowing companies not only to reduce costs

thanks to automation (artificial intelligence, robotics),

✓ but also to come up with new products, enjoy higher pricing power (smart products) and to

develop new business models (sharing economy…)

➢ This digital evolution has the potential to reshape markets faster than perhaps any force in

history, with the spotlight being currently on the Internet of Things, virtual / augmented reality,

artificial intelligence, robotics, medical devices…

➢ The Innovation certificate gathers our top ideas among innovative technologies that are impacting

current businesses and transforming the economy

➢ The investment universe is naturally composed of Tech, Biotech and MedTech players, it can also

include more traditional companies whose business model shifts thanks to innovation

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Investment Case

Innovation Certificate details

✓ Issuing bank: Natixis, Calculation agent: Natixis SA

✓ ISIN: XS0884325415

✓ Currency: USD

✓ Fees: 1.65% management fee + 15% performance fee, high water mark

✓ Bloomberg ticker: NXSRATRA

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New mobile apps

Robotics

AR & VRSmart consumer goods

Artificial Intelligence

3D printing

Medtech

Fintech

Smart cars


➢ We have reached the 3rd step of technological evolution:

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The Final Stage Of Technology Evolution

TOOL MACHINE AUTOMATION

Machines

taking over

machines

Removal of

human contral

Motion tools

Industrial

revolution

Prehistoric

man

1st Stage 2nd Stage 3rd Stage


➢ The rate of technology adoption has materially accelerated over the years

✓ as costs have been going down

✓ and as technology has become more user (and developer) friendly

➢ Consumers now have an open mind when it comes to technology, with many of them being even

eager to try new technologies

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Technology Adoption Has Accelerated Over The Years

Source: Michael Felton, The New York Times

CONSUMPTION SPREADS FASTER TODAY


➢ Innovation is not exclusive to consumer electronics and healthcare industries anymore

➢ In traditional industries, innovation emerges as a way to confront rising competition from low-cost

countries and products and to drive growth

➢ The cloud and IoT are major breakthroughs

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Processing power & IoT

Cloud

GlobalizationData storage and data processing

power accessible to all

Governments throughout the world have identified innovation as a major source

of economic growth

Pressure to innovate due to

competition

Innovation Is Becoming Core In ALL Industries And For Governments


➢ The self-lacing technology from the 1989 “Back To The

Future 2” movie is now real

➢ Smart apparel is on its way

➢ As are smart home appliances

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Technology Is becoming Ubiquitous

Consumer products companies will get a massive revenue boost thanks to the higher

selling prices of smart products


Innovation Drives Long-Term Economic Growth

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➢ There are 3 main types of innovations:

✓ Process (cost saving opportunity, e.g. robots)

✓ Product (revenue opportunity, e.g. iPhone)

✓ Business model (e.g. sharing economy)

Innovation

Productivity growthTransformation of

economic structures

Long-run economic growth

Health

improvement

New

communication

technologies


➢ As the cost and complexity of technology keep going down, new players are coming from out of

nowhere in many industries

✓ contributing to the global innovation effort as they come up with original ideas, products and

business models

✓ … and putting continued pressure on the cost and complexity of technology

➢ After the GAFA (Google, Apple, Facebook and Amazon), the newcomers to the Tech world are the

NATU (Netflix, Airbnb, Tesla and Uber)

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Who’s Next?

New Players Keep Popping Up

2008

Founded in…

200920031997 1998 20041997 1998 2003 2004 2008 2009


➢ In recent years, R&D spending has been growing at a 5% pace, well above global GDP

growth around 3%

✓ suggesting that many innovative products are about to hit the market soon

➢ Unsurprisingly, artificial intelligence, robotics, data analysis and new medical technologies rank

high in terms of R&D priorities

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R&D Investments Are Stronger Than Ever

Rank R&D Spending

2018 Company 2018 US$ bnChange from

2017% of Revenue Headquarters Industry

1 Amazon.com, Inc. 22.62 40.6% 11.8% United States Internet and Direct Marketing Retail

2 Alphabet Inc. 16.23 16.3% 15.5% United States Internet Software and Services

3 Volkswagen 15.77 14.1% 21.5% Germany Automobiles

4 Samsung Electronics Co., Ltd. 15.31 6.8% 7.6% South Korea Technology Hardware, Storage and Peripherals

5 Intel Corporation 13.10 2.8% 5.3% United States Semiconductors and Semiconductor Equipment

6 Microsoft Corporation 12.29 -5.7% 14.1% United States Software

7 Apple Inc. 11.58 15.3% 21.9% United States Technology Hardware, Storage and Peripherals

8 Roche Holding AG 10.80 -8.7% 25.4% Switzerland Pharmaceuticals

9 Johnson & Johnson 10.55 16.0% 4.7% United States Pharmaceuticals

10 Merck & Co., Inc. 10.21 0.8% 19.4% United States Pharmaceuticals

11 Toyota Motor Corporation 10.02 2.6% 3.8% Japan Automobiles

12 Novartis AG 8.51 -11.1% 12.7% Switzerland Pharmaceuticals

13 Ford Motor Company 8.00 9.6% 4.9% United States Automobiles

14 Facebook, Inc. 7.75 31.0% 14.9% United States Internet Software and Services

15 Pfizer Inc. 7.66 -2.7% 4.8% United States Pharmaceuticals

16 General Motors Company 7.30 -9.9% 4.2% United States Automobiles

17 Daimler AG 7.08 -9.2% 18.1% Germany Automobiles

18 Honda Motor Co., Ltd. 7.08 8.7% 12.8% Japan Automobiles

19 Sanofi 6.57 5.8% 4.9% France Pharmaceuticals

20 Siemens Aktiengesellschaft 6.10 4.9% 21.4% Germany Industrial Conglomerates

TOP 20 Total $214.54 6.4% 12.5%

Source: www.strategyand.pwc.com/innovation100, AtonRâ Partners


➢ McKinsey Global Institute estimates the positive economic impact of technologies on global GDP ($80

trillion) in a range of 17%- 41% by 2025

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Reducing by 50%the number of years for major

economies to double in size

by 2035

could double economic growth

over the next 20 years in 12

developed economies

(Accenture)

Artificial Intelligence

A Huge Potential Ahead Of Us

Size in 2025, $tn


➢ The IoT will soon be at the crossroads of basically everything and will spark the advent of a smart,

connected world

✓ allowing the remote monitoring of devices

✓ feeding Big Data and AI systems

✓ In return, AI systems will make objects smarter

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What’s Hot Right Now? The Internet of Things (I)


➢ Starting as a simple tracking solution, the IoT now allows to

extract and record a variety of data (speed, temperature,

pressure, humidity…) from an unlimited number of items

✓ from consumer and industrial products

✓ to basic materials, food and drugs

➢ The IoT will soon power smart homes, with digital assistants

(Alexa) making the link between humans and machines

➢ Smart factories will be another major field of application

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What’s Hot Right Now? The Internet of Things (II)


➢ Connecting every single object to the Internet

14

80bnObjects will be connected to the

internet in 2020 vs 15bn today

Source: Idate Consulting

EDUCATION

HEALTHCAREPROTECTION

MOBILE

DEVICES

PUBLIC

TRANSPORT

What’s Hot Right Now? The Internet of Things (III)


➢ Both Facebook and Apple are reportedly working on AR glasses and

cameras

➢ The upcoming iPhone 8 is believed to be Apple’s first foray in AR,

with a camera expected to allow depth sensing, picture manipulation

and virtual effects on images

➢ Wide number of AR applications ranging from gaming to driving or shopping:

➢ AR needs tech content, i.e. semiconductors for improved processing power, connectivity, power

management and higher resolution displays

✓ and media content (video games, rich maps…)

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What’s Hot Right Now? Augmented Reality


➢ The auto industry is becoming the next battleground of

tech giants, as illustrated by the recent acquisition of

Mobileye by Intel

➢ The autonomous driving market is expected to reach $50-

100bn in the medium term

✓ assuming tens of millions of cars come out of the

factories each year equipped with such

technologies

✓ and an ASP around $1,000

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What’s Hot Right Now? Smart Cars

Many technologies are vying for the car of the future:

✓ from the Intel Xeon CPU - Mobileye vision sensors

combo

✓ to Google’s LIDAR sensors and NXP’s BlueBox

✓ and to graphics cards for the computing power


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Artificial

Intelligence

VR / AR

FinTech

3D / 4D

Printing

Internet of Things

Robots

How To Play Innovation? (I)


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New internet

models

Health devices New materials

Cyber security

Smart cars Quantum

computing

How To Play Innovation? (II)


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How To Play Innovation? (III)

Smart Consumer Goods


This report has been produced by the organizational unit responsible for investment research (Research

unit) of AtonRâ Partners and sent to you by the company sales representatives.

As an internationally active company, AtonRâ Partners SA may be subject to a number of provisions in

drawing up and distributing its investment research documents. These regulations include the Directives

on the Independence of Financial Research issued by the Swiss Bankers Association.

Although AtonRâ Partners SA believes that the information provided in this document is based onreliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completenessof the information contained in this report.

The information contained in these publications is exclusively intended for a client base consisting ofprofessionals or qualified investors. It is sent to you by way of information and cannot be divulged to athird party without the prior consent of AtonRâ Partners.

While all reasonable effort has been made to ensure that the information contained is not untrue ormisleading at the time of publication, no representation is made as to its accuracy or completeness and itshould not be relied upon as such.

Past performance is not indicative or a guarantee of future results. Investment losses may occur, andinvestors could lose some or all of their investment.

Any indices cited herein are provided only as examples of general market performance and no index isdirectly comparable to the past or future performance of the Certificate.

It should not be assumed that the Certificate will invest in any specific securities that comprise any index,nor should it be understood to mean that there is a correlation between the Certificate’s returns and anyindex returns.

Any material provided to you is intended only for discussion purposes and is not intended as an offer orsolicitation with respect to the purchase or sale of any security and should not be relied upon by you inevaluating the merits of investing in any securities.

20Disclaimer

Weekly Barometer 25 janvier 2012 · Product (revenue opportunity, e.g. iPhone) Business model (e.g....

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