Industry 4.0 Performance Index Bringing the fourth industrial revolution to your portfolio Financial Products Advisory & Distribution
Investment theme "Industry 4.0 the fourth industrial revolution" Industry 4.0 is no longer just a theory The Internet of Things is taking hold in production, giving rise to a new kind of logistics in which all-encompassing connectivity turns production chains into value networks. This has the potential to provide a strong boost to the productivity of many traditional industries. Industry 3.0 Beginning of the 1970s Industry 4.0 Today 4 th industrial revolution Based on cyber-physical systems 1. Industry 2.0 Beginning of 20 th century 3 rd industrial revolution Electronics and IT used to further automate production. Industry 1.0 End of 18 th century 2 nd industrial revolution Introduction of mass production based on division of labour and powered by electricity. 1 st industrial revolution Introduction of mechanical production facilities powered by steam and water. Source: Braincourt quoted in computerwoche.de 1: Cyber-physical systems are systems where IT and software components are linked to mechanical / electronic components, with the transfer and exchange of data as well as monitoring and steering taking place in real time via infrastructure such as the internet (for more information see gabler.de). 2
Investment theme "Industry 4.0 the fourth industrial revolution" More efficient, more individual Production chains will be replaced by value-adding networks optimized in real time solution to balancing the conflicting requirements of bespoke production and efficiency gains (economies of scale). Suppliers, production plants and processes will be networked entirely new production logistics, leading to greater value creation. Significant investment required in implementing Industry 4.0. Projections (see chart) show the digitalization of production in Europe is likely to lead to clear productivity gains, with higher margins on the back of the resulting scale effects. Industry 4.0: rising profitability & capital intensity PROFITABILITY 1 high Return expected by investors (ROCE) 3 = 15% TRADITIONAL INDUSTRY Europe 2012 INDUSTRY 4.0 Europe 2030 low low CAPITAL INTENSITY 2 high Sources: Roland Berger Strategy Consultants, Think Act, Industry 4.0; 03/2015 1: EBIT as % of value added; margin: low = below 5%, high = above 20%, 2: Capital employed/value added; margin: low = below 0.5; high = above 1.3 3: ROCE = profitability x capital intensity 3
Investment theme "Industry 4.0 the fourth industrial revolution" Switzerland and Germany at the head of the field German industry to invest EUR 40 billion p.a. through to 2020 1 European companies are already well set up for Industry 4.0. If they are also to assume a leading role in the future, they will have to keep investing EUR 90 billion a year over the next 15 years (a total of EUR 1,350 billion). According to a PwC survey from 2014, German companies alone are likely to invest EUR 40 billion p.a. through to 2020 (see chart). Besides Switzerland and Germany, countries such as France and the UK are also promising candidates that are similarly well prepared. According to official estimates, SMEs practising lean management are the most likely to address Industry 4.0 solutions both technically and organizationally. Mechanical engineering Automotive industry 2 Process industry Electronics and electrical systems Investment amount (% of annual revenues) 3.5% 2.9% 2.7% 3.3% Investment volume 3 (in EUR billions p.a.) 8.5 11.2 10.1 6.0 Information and communications 3.9% 4.3 Totale 3.3% 40.1 1: Source: PwC 2014 2: Projection for the entire automotive industry (economic sector 29: production of motor vehicles and motor vehicle parts). 3: Projection on the basis of survey results relating to the total revenues per sector in Germany in 2012 according to the Federal Statistical Office. 0 5 0 50 4
Investment theme "Industry 4.0 the fourth industrial revolution" Index composition Concept and quantitative/qualitative selection criteria Index concept Industry 4.0 Performance Index The Industry 4.0 Performance Index tracks the performance of companies that generate significant revenues in the Industry 4.0 segment. Automation Robotics Sensors Software and data services Mechanical engineering The index is adjusted twice a year and its members equally weighted. Dividends and other distributions are reinvested in the index. The index is calculated and published by Solactive AG. Selection of index members Rules From the selection pool, the index advisor picks the 20 most promising companies on the selection day based on the following four criteria: 1 High entry barriers in terms of: strong brand awareness comprehensive patent protection networks and alliances creating high added value uniqueness of business model Four qualitative selection criteria Selection pool 2 3 Product appeal and market growth: the companies products and solutions must serve a market that is as large as possible and promises to deliver sustained, long-term growth. Quality of management Index members 4 Internationality of business Source: index guidelines, Solactive.com 5
Key product data Industry 4.0 Performance Index Initial composition of the Industry 4.0 Performance Index COMPANY SECTOR COUNTRY ABB Ltd. Automation Switzerland COGNEX Corp. Automation US Krones AG Automation Germany Rockwell Automation Inc. Automation US Yaskawa Electric Corp. Automation Japan Bertrandt AG Mechanical engineering Germany Duerr AG Mechanical engineering Germany Indus Holding AG Mechanical engineering Germany Parker Hannifin Corp. Mechanical engineering US FANUC Corp. Robotics Japan KUKA AG Robotics Germany Teradyne Inc. Robotics US ARM Holdings Sensors UK Infineon Technologies AG Sensors Germany Keyence Corp. Sensors Japan National Instruments Corp. Sensors US Alphabet Inc. Software/data services US Autodesk Inc. Software/data services US Dassault Systèmes SA Software/data services France SAP SE Software/data services Germany Termsheets with the legally binding information and other details can be downloaded at any time from www.derinet.ch. All information is indicative and subject to change. 6
Key product data Industry 4.0 Performance Index Key product data VONCERT Open End VONCERT OPEN END SSPA product type Tracker certificate (1300) Underlying Industry 4.0 Performance Index Initial fixing / payment date 1 April 2016 / 8 April 2016 Term Open end Management fee 1.20% p.a. Issuer Vontobel Financial Products Ltd., DIFC Dubai (is not subject to any prudential supervision and has no rating) Guarantor Vontobel Holding AG, Zurich (Moody's A3) Currencies CHF USD Valor / symbol Issue price VONCERT reference price 3161 2760 / ZSLABV CHF 101.50 (CHF 1.50 frontload fee included) CHF 100.00 3161 2761 / ZSLADV USD 101.50 (USD 1.50 frontload fee included) USD 100.00 Termsheet Details on derinet.ch Termsheet Details on derinet.ch Termsheets with the legally binding information and other details can be downloaded at any time from www.derinet.ch. All information is indicative and subject to change. 7
Important information for investors Industry 4.0 Performance Index Significant risks for investors Economic crises and changes could have a detrimental impact on the shares underlying the participation certificate. New technologies offer the potential of promising business models, but also entail risks. This can lead to corresponding share price volatility. New competitors could engage the established firms in the index in a fight for market share. Issuer risk Currency risk No capital protection 8
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