BGL Industrials Insider Industrial Automation August 2020

BGLCO.
COM AUGUST | 2020
INSIDER
INDUSTRIAL
TECHNOLOGY
ANDREW K. PETRYK LEO T. MAHON JUSTIN A. WOLFORT TA B L E O F C O N T E N T S

HEAD OF INDUSTRIALS INDUSTRIALS INDUSTRIALS
312.658.4781 216.920.6629 2 E X E C U T I V E S U M M A RY
216.920.6613
APETRYK@BGLCO.COM LMAHON@BGLCO.COM JWOLFORT@BGLCO.COM 4 G LO B A L I N D U S T R I A L A U TO M AT I O N M A R K E T
2
12 RO B OT I C S M A R K E T
3
20 5 G ’ s RO L E I N FAC TO RY A U TO M AT I O N
22
22 S E L E C T M &A I N A U TO M AT I O N A N D RO B OT I C S
23 APPENDIX
25 ABOUT US
2 INDUSTRIAL TECHNOLOGY
INDUSTRIAL TECHNOLOGY
GLOBAL INDUSTRIAL AUTOMATION MARKET
EXECUTIVE SUMMARY
• A recent industry survey of 200 decision makers found that although the coronavirus has negatively impacted
investments in automation in the near-term, it is likely to accelerate investment over the longer-term. Survey
participants also believe domestic manufacturing will rise by 25 percent compared to pre-COVID levels as the
pandemic and trade tensions with China have exposed weaknesses of complex global supply bases.
• According to IoT Analytics, most IoT projects are being initiated in Manufacturing/Industrial settings, with
verticals such as Transportation/Mobility, Energy, Retail, and Healthcare having also increased their relative
share. IoT Analytics tracks verticals in which IoT projects are publicly announced and has compiled data
based on over 1,400 projects that were explored as part of its research-tracking IoT platforms.
TOP 10 IoT APPLICATION AREAS, 2020
GLOBAL SHARE OF ENTERPRISE IoT PROJECTS Trends
1 Manufacturing / Industrial 22%
2 Transporta�on / Mobility 15%
3 Energy 14%
4 Retail 12%
5 Ci�es 12%
6 Healthcare 9%
7 Supply Chain 7%
8 Agriculture 4%
9 Buildings 3%
10 Other 3%
Source: IoT Analytics

Source: IoT Analytics
EXECUTIVE SUMMARY
• Certain segments of the automation industry have been consolidated with technology vendors such as IBM
and Amazon World Services, as well large industrial automation players such as ABB and Rockwell, having
established positions to shape the digital transformation of factory production. However, other automation
market segments remain less consolidated, including:
• Devices on the “edge” (i.e., devices on the factory floor that move materials and detect movement) such as
valves, sensors, drives, motors, robots, and machine vision.
• Linux-based software systems are enabling de-coupling of hardware and software, allowing factories and
machine builders to acquire products from smaller software companies and avoid being captive to the
large automation vendors.
• The global robotics market has seen accelerated double-digit growth since the capex recession of
2015/2016. The service robotics market, in particular, is seeing expanded applications in consumer-facing
and service industries.
“Industrial IoT is transforming the rules of manufacturing, fueling cloud and

edge innovation, accelerating the evolution of digital factories, and enhancing
operational performance.”
Satya Nadella, CEO of Microsoft, 2019

KEY MEGA-TRENDS DRIVING AUTOMATION AND ROBOTICS GROWTH
Individualized Labor shortage

consumer A quarter of China’s
population will be
60+
Americans
1/4 have bought

personalized
products1 by 20302
Digitalization Uncertainty
Connected factory data / day= 40%

160 million of U.S. companies with
operations in China are
books 3
considering or have already
reduced their footprint in China4
1
ABB
2
State Council on Aging
3
Intel
4
AmCham Shanghai and AmCham China joint survey
GLOBAL AUTOMATION MARKET SIZE

2019 & 2021P, BY SEGMENT
$250
R7%
CAG $214B
$200
$186B
FACTORY AUTOMATION
$150 PROCESS AUTOMATION
IN $ BILLIONS
ROBOTICS
$100 INDUSTRIAL SOFTWARE
3D PRINTING
$50
ARTIFICIAL INTELLIGENCE
DRONES
$0
2019 2021P
Source: Statista
INDUSTRIAL AUTOMATION MARKET FORECAST
Industrial Automation Software: Cole According to IoT Analytics, more Discrete Automation: Cyclicality
Market Research projects the industrial powerful edge processing, the aside (auto OEMs and tier 1 suppliers
automation software market is expected increasing popularity of Linux, and new are the largest discrete automation
to see a CAGR of over 8 percent from virtualization technologies are helping end markets), reshoring, adjustments
2019 through 2024. The market is drive two key trends that are enabling to supply chains— receiving
highly competitive and consists of a smaller automation vendors to better more attention due to COVID-19
number of major players including ABB, compete with the larger vendors. production disruptions and the trade
Siemens, GE, Schneider Electric, and tensions with China— and rising
Honeywell, among others. Supervisory • De-Coupling of Hardware and adoptions are driving expectations
Control and Data Acquisition (SCADA) Software: Traditional industrial for a ~6 percent CAGR through 2025.
software demand has shown rapid connectivity included embedded
growth over the past decade. SCADA software that was written Process Automation: Due to high
specifically for that hardware.
enables OEMs to analyze data collected industry penetration it is expected
Moving forward, industrial
during the manufacturing process and to grow more in-line with general
connectivity hardware will be
make rapid informed decisions from a industrial production.
increasingly Linux-based and
remote location. able to run a variety of third-
party industrial connectivity Robotics: Robots are becoming more
Industrial IoT Platforms: An IoT software applications. Factories intelligent, increasingly connected
platform operates on a multi-layer and machine builders are with the cloud, and easier to use.
infrastructure that handles, stores, and adopting these de-coupled, According to the International
transfers information via the Internet Linux-based solutions in part Federation of Robotics, the annual
to and from connected devices. The because they help avoid being global installations of industrial
industrial IoT platform market is captive to their hardware vendors robots is projected to grow at a
expected to grow at a 20 percent- and enable more scalable and ~12 percent CAGR between 2019
future-proof architectures.
plus CAGR through 2023. While there and 2022. In addition, the market
are over 500 offerings by traditional • Consolidation of the Hardware for professional service robots is
automation, software, and technology Stack: Industrial connectivity projected to grow at a ~44 percent
vendors, the leading industrial IoT functions can now be performed CAGR over the same period.
on a single piece of Linux-based
platforms are offered by:
hardware using software from
• ABB: Ability 3rd parties. Combining all of
this functionality on a single
• GE: Predix
device (such as an industrial PC
• Rockwell Automation: Parametric or data center) reduce hardware
Technology Corporation – Rockwell
made a $1 billion PIPE in PTC (~8 costs for end users who have
percent stake) traditionally purchased separate
• Siemens: MindSphere – Siemens pieces of equipment to perform
acquired a 12 percent stake in each function.
privately-held Bentley Systems
• Schneider Electric: Ecostructure
DISCRETE vs PROCESS AUTOMATION
The biggest difference between discrete and process manufacturing is the way the product is made. Manufacturing
processes utilizing both discrete and process automation are termed hybrid.
DISCRETE MANUFACTURING
In discrete manufacturing, parts are manufactured and DISCRETE AUTOMATION MARKET BY END MARKETS, 2019
assembled to a finished product. The raw materials used to Oil & Gas 4%
create these products are the same from the first job to the next.
Other
Discrete automation vendors supply: 10%
• Programmable logic controllers (PLC) General

Industrials
• Drives Automove
29%
• Sensors 28%
• Motors
Consumer
• Robots Technology Goods
• Human machine interfaces (HMI) Hardware 14%
15%
• Software and engineering
PROCESS MANUFACTURING
Process manufacturing becomes more complex due to its PROCESS AUTOMATION MARKET BY END MARKETS, 2019
nature in converting materials and ingredients. With process Pulp & Paper Other 2%
4%
manufacturing, the end product is unable to be disassembled to
Marine
its original raw materials. 4%
Oil & Gas
Process automation vendors supply: 28% Americas
27%
Energy
• Distributed control systems (DCS) 19%
• Actuators to provide movement or control

(e.g., air compressor, motor, valve, drive) Water Chemicals
1% 7%
• Sensors Pharmaceucals Mining
• Electrical components 8% 15% EMEA
35%
Consumer Goods
• Software and engineering
7% General Industrial
5% 5%
Source: Wall Street Research, BGL

GLOBAL
GLOBALAUTOMATION
AUTOMATIONMARKET
MARKETBY
BYPRODUCT,
PRODUCT,2019
2019
GLOBAL AUTOMATION MARKET BY PRODUCT, 2019
Other
1%
Relays &
Switches
3% Motors &
Drives
Product Lifecycle
10%
Management (PLM)
Sensors So ware
7% 19%
Machine
Vision
4% Enterprise Resource
Planning (ERP)
Robocs So ware
8% 18%
Other DCS
So ware 7% 4% Manufacturing
PLC Execuon
2% SCADA
4% MES Systems (MES)
13%
4%
GLOBAL AUTOMATION
DISCRETE MARKET BY PRODUCT, 2019
DISCRETEvs
vsPROCESS
PROCESSAUTOMATION
AUTOMATIONSEGMENTS
SEGMENTS
End Market Use of Discrete and Process Automa
on Systems
Machines Fabricated Electronics Electrical Automo

ve Food & Water Pharma Cement Metals & Pulp & Paper Chemical Power Gen Refining Petrochem
Metals Equipment Beverage Mining
100%
100% Discrete / PLC Hybrid Segments Process /
DCS
Source: Schneider Electric, BGL

Source: Schneider Electric, BGL
The Discrete Automation Market has an attractive organic growth outlook.
DISCRETE AUTOMATION MARKET DRIVERS
GLOBAL ADDRESSABLE MARKET1 MARKET GROWTH DRIVERS

IN $ BILLIONS
• Flexible manufacturing (digital factory >10% p.a.)

~6% ~$110B • Electric vehicle production (>10% p.a.)
GR
CA
• Increasing automation
• Flexible manufacturing (digital factory >10% p.a.)
~$75B • New products, technologies (e.g. 5G)

• Automation of more complex tasks
AUTO OEMs
• Increasing automation, including for SMEs (>10% p.a.)
AUTO TIER 1 • Ease of use
ELECTRONICS
• More packaged goods, eCommerce
GENERAL
INDUSTRY • Logistics (>25% p.a.) & service (>25% p.a.) robotization
CSSR2
• Increasing automation
MACHINE
AUTOMATION • New technologies, e.g. vision, track, machine-centric robotics (>15% p.a.)
2019 2025P
1
ABB, INTERNATIONAL FEDERATION OF ROBOTICS, BGL
2
CONSUMER SEGMENTS & SERVICE ROBOTICS
The automation pyramid classifies the different IT layers of industrial automated production plants. Every layer or level
has its own tasks and IT infrastructure within the production plants.
CLOUD
(AWS, Azure,
IBM, etc.)
S
TH
DA
ON
ENTERPRISE Enterprise Resource Planning system enables top

YS
BUSINESS
/M
management to see and control operations from

/M
PLANNING & PLM / ERP manufacturing, to sales, to purchasing, to finance

YS
ON
LOGISTICS and payroll, etc.

DA
TH
S
BUSINESS UNIT Manufacturing Execution Systems monitor the

MANUFACTURING & entire manufacturing process in a plant or factory
HO
S
MES
UR
OPERATIONS MANAGEMENT from the raw materials to the finished product.

UR
HO
Supervisory Control and Data Acquisition can monitor and

PLANT
ES
control multiple systems from a single location. Human

MIN
UT
MONITORING & SUPERVISING SCADA / HMI Machine Interface (HMI) is an interface that allows humans
MIN
to interact with the machine (e.g., machine with touch display,

UT
a push button, a mobile device, or a computer with a keypad).

ES
Control & manipulation of the devices in the field that

LINE actually do the physical work. Collection of information
DS
SEC
SENSING & MANIPULATING DCS / PLC from sensors, switches & other input devices to make
ON
decisions on what outputs to turn on or complete the

ON
SEC
programed task.
DS
FIELD Devices on the factory floor to move materials and

Valves, Sensors,
detect movement. The process is the epicenter of
PRODUCTION PROCESS Drives, Motors, Robots, the “edge” computing trend which relocates data
processing to the devices, reducing latency.
DS
Machines, Vision &

MIC
ON
Tools, 3D Printing
SEC
RO
SEC
RO
Platforms for connectivity that integrates the

MIC
ON
various software and hardware systems to form

INDUSTRIAL IoT PLATFORMS an autonomous unit.
DS
Source: Medium.com
1
LATENCY
LATENCY MEASURES THE TIME IT TAKES BETWEEN HUMAN ACTIONS AND THE RESPONSE
1
BETWEEN THE COMPUTER, THE INTERNET, AND EVERYTHING IN BETWEEN.

The automation pyramid classifies the different IT layers of industrial automated production plants. Every layer or level
has its own tasks and IT infrastructure within the production plants.
CLOUD
(AWS, Azure, CO M P E T I T I V E E N V I RO N M E N T
IBM, etc.)
I N D U ST RY OTHER TOP
LEADERS PA RT I C I PA N T S
S
TH
DA
ON
ENTERPRISE
YS
BUSINESS
/M
/M
PLANNING & PLM / ERP

YS
ON
LOGISTICS
DA
TH
S
BUSINESS UNIT
MANUFACTURING &
HO
S
MES
UR
OPERATIONS MANAGEMENT
UR
HO
PLANT
ES
MIN
UT
MONITORING & SUPERVISING SCADA / HMI

MIN
UT
ES
LINE
DS
SEC
SENSING & MANIPULATING DCS / PLC

ON
ON
SEC
DS
FIELD
Valves, Sensors,
PRODUCTION PROCESS Drives, Motors, Robots,
DS
Machines, Vision &

Tools, 3D Printing
MIC
ON
SEC
RO
SEC
RO
MIC
ON
INDUSTRIAL IoT PLATFORMS

DS
1
LATENCY
LATENCY MEASURES THE TIME IT TAKES BETWEEN HUMAN ACTIONS AND THE RESPONSE
1
BETWEEN THE COMPUTER, THE INTERNET, AND EVERYTHING IN BETWEEN.

Automation architecture is evolving to adapt to an increasingly

THE IT - OT CONVERGENCE connected factory floor to secure real time information.
Information Technology (IT) and some form of on-premises or remote In order to successfully respond to
Industrial Automation (OT) converged collection system. As the number of these challenges, companies will need
in the 1990s to form the Pyramid connected industrial assets grow and to use new technologies to connect
Architecture described above. A incorporate more processing power, a their OT assets to their ERP systems
number of vendors are creating a new vast amount of data is being generated and other IT assets. This connection
data collection architecture that could by assets on factory floors – the outer enables data collection from OT assets
challenge the architecture status quo “edge” of computing networks.
to be used in smart factory control,
and promise to usher in a new area
predictive maintenance, condition
of more scalable and cost-efficient The data generated on the edge has
monitoring, and other Industrial IoT
industrial connectivity solutions. historically been relayed back to the
central network server, usuallyLorem
housed ipsumapplications.
Industrial communication networks in a data center. The problems the
continue to expand rapidly. According historical architecture cause are the
to IoT Analytics, 50 percent of time required for the data to travel and
industrial assets are connected to the tremendous strain on bandwidth.
EDGE-TO-CLOUD ARCHITECTURES
New technology is enabling edge-to-cloud architectures that bypass the tradional 5-layer stack
5-Layer Stack Edge-to-Cloud Architecture
Cloud
ERP/ ERP/
PLM PLM
MES INFORMATION TECHNOLOGY MES Cloud
SCADA SCADA
PLC / DCS OPERATIONAL TECHNOLOGY PLC / DCS
I/O I/O
Source:
Source: IoT Analytics,
IoT Analycs, BGL BGL
ROBOTICS MARKET SEEING STRONG GROWTH - ASIA HAS LED ADOPTION
TECHNOLOGICAL DEVELOPMENTS EXPANDING ROBOT ADOPTION
TODAY TOMORROW
• More intelligent components • “Machine learning” enables
(e.g. Smart Grippers) Robots
• Greater connectivity - to learn by trial-and-error or by
•
video demonstration.
(e.g., “Plug & Play” Interfaces
and Cloud Computing) - to self-optimize.
•
• Easier to use - to communicate with other
•
(e.g.“Programming by Demonstration”) machines to improve entire
processes.
• New business models
(e.g. Robots as a Service (RaaS))
ANNUALOF
ANNUAL INSTALLATIONS INSTALLATIONS OF INDUSTRIAL ROBOTS
INDUSTRIAL ROBOTS
300
Asia /
CAGR Europe America
Australia
2008 - 2015 15% 5% 12%
240 2016 - 2018 13% 16% 16%
Thousands of Units
180
120
60
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Asia / Australia Europe America

Source: International Federation of Robotics, BGL
Source: Internaonal Federaon of Robocs, BGL
TYPES OF ROBOTICS
There are many categories of robotics that researchers and professionals have identified. The following are
among the most important ones:
Collaborative Robots: Next generation, highly advanced robots that have

emerged in the last few years. Unlike the heavy industrial robots in the 1900s,
these robots can be taught to learn complex tasks and act as a “collaborative”
function for skilled workers. They typically have multiple arms, are flexible,
and can be easily reprogrammable. Their highly adaptive nature opens up new
productivity potential for manufacturers and professionals.
Telepresence Robots: Telecommunication robots with a broad use for video

conferencing and voice communication. These robots have been adapting to
modern times in which it offers an adequate alternative to being physically
present.
Warehouse and Logistics Robots: Automation in industrial logistics applications

have a substantial impact on global commerce today. Many retailers are
revamping their operations toward automation, ranging from retrofit, such as
self-guided carts that can move between packing stations, to comprehensive
solutions, encompassing long distances of conveyor belts and thousands of
robotic pickers and grabbers.
Healthcare Robots: Surgical and personal assistant robots are playing much
bigger roles in healthcare today. Robot-assisted surgery is a less invasive, more
precise procedure that will likely open new horizons for surgical treatments
while personal assistant robots are growing in presence in countries with rapidly
aging populations, such as Japan.
Self-Driving Vehicles: There are many new generation vehicles equipped with
autonomous features, most prominently from Tesla, Google, and Uber, where
extensive testing on self-driving applications are being initiated. Self-guided
vehicles have significant impact on many professional fields, including the semi-
autonomous trucks that help long-haul truckers navigate long distances.
BROAD ROBOTICS CLASSIFICATIONS
The robotics market has evolved into two broad classifications of robots, Industrial Robotics and Service Robotics. These
two types are further divided into various other categories based on level of activity, functionality, and end market.
INDUSTRIAL ROBOTICS
• Attractive Mid- to Long-Term Market Growth at 2x GDP
Annual Global Installaons of Industrial Robots 2013 - 2022P

Thousands of Units
CAGR 14% 584
522
465
465
422 421
400
304
254
221
178
2013 2014 2015 2016 2017 2018 2019 2020P 2021P 2022P

Source: Internaonal Federaon of Robocs
SHORT-TERM VOLATILITY, BUT THE FUTURE FOR ROBOTS IS VERY BRIGHT
TODAY TOMORROW
• Automotive Industry Transition • Increased Manufacturing
from ICE to EV Flexibility: Batch Size = 1
• Scarcity of Labor • Demographic “Time Bomb”
• Political Environment • Emerging and Rapidly-Growing
• Aerospace & Defense Market Segments
• Consumer Electronics • Business and Technological
• Industrial Electronics & Controls Innovation, e.g. for SME
• Medical Products & Eqiuipment Category
INSTALLATIONS OF INDUSTRIAL ROBOTS BY INDUSTRIES, 2019

ANNUAL INSTALLATIONS OF INDUSTRIAL ROBOTS BY INDUSTRIES, 2019
All Others
Automove
27%
29%
Americas
27%
Food
4%
Plasc and Chemical EMEA
Products 35%
5%
Metals and
Electrical / Electronics
Machinery
25%
10%
Source: World Robotics 2019, BGL

SERVICE ROBOTICS
• Service Robotics comprise Professional Service and Domestic Service end markets
PROFESSIONAL SERVICE ROBOTS

$ in billions
MARKET GROWTH DRIVERS
$50.0
$40.0 CAGR 44% $38.0 Hyper-Customizaon
$30.0
Quality Control
$20.0
$12.6
$10.0
Predictability
$-
2019 2022 Repeatability
DOMESTIC SERVICE ROBOTS

$ in billions
Labor Shortage
$15.0
CAGR 36%
$12.0 $11.5
Drive for Sustainability
$9.0
Growth of eCommerce
$6.0
$4.6
$3.0
$- Acceleraon in New Roboc Technology

2019 2022

PROFESSIONAL SERVICE ROBOTS:

MAIN VALUE GROWTH DRIVERS ARE LOGISTICS SYSTEMS
• Medical Robots - Most valuable service robots

• Field Robots - The future of ag (plowing, milking, etc.)
SERVICE ROBOTS FOR PROFESSIONAL USE:

MAIN APPLICATIONS
$25.0
$22.5
$20.0 CAGR
58%
$15.0
$ in bilions
CAGR 35%
$10.0 $9.1
$5.7 CAGR 8% CAGR 12%

$5.0 $3.7
$1.1 $1.4 $1.2 $1.7
$-
Logiscs & Medical Robocs Field Robocs Defense
Material Handling
2019 2022
PERSONAL/DOMESTIC SERVICE ROBOTS
• Vacuuming and Floor Cleaning robots are established Personal/Domestic Service robots
SERVICE ROBOTS FOR PERSONAL/DOMESTIC USE
$12.0
$9.7
$10.0 CAGR 43%
$8.0
$ in billions
$6.0
CAGR 9%
$4.0 $3.3
$1.7
$2.0 $1.3
$-
Domesc Tasks Entertainment
2019 2022
LEADING ROBOTICS VENDORS
BROAD AND STRONG PORTFOLIO:

ABB HAS THE BROADEST COMBINED AUTOMATION AND ROBOTICS OFFERING
Robocs Porolio
Automaon Porolio
Engineered Machine-
Robot Products Robot Cells Service PLC/IPC Servo Moon Track System
Soluons Centric Robots
Source: ABB, BGL

Source: ABB, BGL
5Gs ROLE IN FACTORY AUTOMATION
5G is the fifth-generation technology speeds, eventually up to 10 gigabits per

standard for cellular networks, which second. Due to the increased bandwidth, it
cellular phone companies began deploying is expected that the new networks will not
worldwide in 2019, the planned successor just serve cellphones like existing cellular
to the 4G networks which currently provide networks, but also enable machine-to-
connectivity to most cellphones. Like its machine communication.
predecessors, 5G networks are cellular
networks in which the service area is During the last 30 years we have automated
divided into small geographical areas called everything which can be automated in the
cells. All 5G wireless devices in a cell are factory using wired technology. The main
connected to the Internet and telephone processes which have not been automated
network by radio waves through a local are the integration of logistics, material
antenna in the cell. The main advantage handling and factory automation – this
of the new networks is that they will have integration can only be achieved using
greater bandwidth, giving higher download wireless technology.
VISION OF THE FUTURE FACTORY
• In this vision a truck arriving

with the material for the
factory announces its arrival to
the factory and communicates
directly with an automated
guided vehicle (AGV).
• Assembly lines, machines
and robots in the factory are
connected wirelessly in order
to maintain a high degree of
flexibility.
• Workers are mobile and use
wireless devices to monitor
and control the factory.
• Finished products are placed
in an automated warehouse.
Source: IoT Analytics, BGL

5Gs ROLE IN FACTORY AUTOMATION
The introduction of wireless Latency measures the time it takes In case the factory owner prefers
technologies in industrial production between human actions and the to use licensed frequencies, a
has already started. Today, we see a response between the computer, license can be obtained from
multitude of wireless technologies the internet, and everything in the government or alternatively
being used for different use cases in between. Ultra-Reliable Low Latency sublicensed from a mobile operator.
industrial production. Initially, wireless Communications (URLLC) allows Factory owners looking to outsource
technologies were used for select latency below 1 millisecond on the the operation of the factory 5G
non-critical applications, but wireless radio interface as well as availability network can make an agreement
technology is increasingly becoming the exceeding 5-nines (99.999%). From an with a public mobile operator to
norm and more mission critical. industrial production perspective, this provide the service. The service level
type of service will enable: agreement will cover aspects such as
5G is the first cellular generation availability, coverage, bandwidth, life
which specifically targets machine- • Motion control cycle management, etc.
to-machine communications. LTE- • Mobile robots Source: HMS Industrial Networks, Inc.
Machine Type Communication, which
includes enhanced Machine Type • Human remote control
Communication (eMTC), is a type of • Mobile control panels with
low-power wide-area network radio safety function
technology standard to enable a wide
range of cellular devices, specifically 5G is primarily intended for public
for machine-to-machine and IoT networks in licensed bands, but it is also
applications. eMTC allows vast numbers possible to use as a private network.
of battery-operated low-power devices For some factory owners, it is important
to be connected. From an industrial to own and control the communications
production perspective, this type of infrastructure. In this case, it is relevant
service will enable: to use either unlicensed frequencies
or to get a license to operate in a
• Wireless sensor networks licensed band. The advantage of using
• Location and asset tracking unlicensed spectrum is that it is easy
to deploy without obtaining a license
first. The downside is the possibility of
interference from other users in the area
as well as limitations in transmit power.
SELECT M&A ACTIVITY IN AUTOMATION & ROBOTICS
($ in USD millions)
Enterprise
Date Target Target Relevance Buyer Value Product / Service
May-20 ASEM S.p.A. provides digital home and industrial automation N/A Digital home and industrial
technology products and services. automaon products
Apr-20 ProLeiT AG develops automation and process control technology N/A Automaon and process
software solutions for industrial process plants worldwide. control technology soware
Dec-19 Rebellion Photonics, Inc. operates a platform that provides N/A Automated visual gas
intelligent, automated, and visual monitoring solutions. monitoring soluons
Oct-19 Onshape Inc. develops cloud based 3D designing and drawing $470 Automaon soware for 3D
software solution. It offers a next-generation cloud design design and data management
platform that provides data management, collaboration,
workflow automation, assemblies, integrations, analytics,
configurations, and security.
Sep-19 Process Systems Enterprise Limited provides process modeling $17 Advanced digital process
software, and digital design and operation technology and modelling automaon
services to the process industries. soware
Jul-19 TruTrak Flight Systems, Inc designs and manufactures digital and N/A Autopilot soware
standard autopilots for experimental and light sport aircraft.
Jul-19 Soware and The Software and Automation Businesses of Zedi Inc. comprises N/A Oil & gas process automaon
Automaon of a cloud supervisory control and data acquisition (SCADA) soware
Businesses platform for the oil and gas producers and automation business.
Feb-19 GE Intelligent Platforms, Inc. develops and manufactures rugged N/A Process automaon
high performance embedded computing and graphics solutions. technologies (PLC)
Dec-18 AE Valves SPRL designs and manufactures a range of industrial N/A Innovave valve technologies
valves for chemical, petrochemical, polymers, oil, coal gas,
cryogenic, and heavy industries.
Nov-18 Transnorm Beteiligungen GmbH manufactures conveyor $482 Automated warehouse
modules for use in bin and box conveyor systems, and parcel and soluons
airport baggage handling systems.
Nov-18 Yaskawa Siemens Automation & Drives Corp. manufactures N/A Industrial automaon
motors, drive equipment, controllers, and generators. equipment
Sep-18 ABB Robotics Solutions N.V. designs and manufactures industrial N/A Industrial automaon
automation solutions. soluons for warehouse &
logiscs, food & beverage,
Sep-18 AB Rotech develops robotic automation systems for automotive, N/A Roboc automaon systems
electronic, and food and beverages sectors. for automove, electronics,
and food & beverage
Jul-18 Aventics GmbH develops and manufactures pneumatic $616 Smart pneumacs
components and systems. technologies for machine and
factory automaon
Jun-18 Austemper Design Sys. Provides state-of-the-art safety analysis, Mentor Graphics N/A Safety automaon soware
auto-correction and fault simulation functional safety Corporaon
technologies.
May-18 Electrical and Electrical and Automation Business of Larsen & Toubro $1,876 Electrical automaon
Automaon comprises low and medium voltage switchgear, electrical products
Business systems, and marine switchgear manufacture business.
Median $ 482
Source: S&P Capital IQ
Mean $ 692
APPENDIX: SELECT PRODUCTS WITHIN AUTOMATION SOLUTIONS
Source: ABB, BGL
Controllers: Enable motion and control and enable quick integration of additional
hardware. Controllers are key to the robot’s performance in terms of accuracy, speed,
cycle-time, programmability and synchronization with external devices. Other features
include a touch screen and joystick programming. Controllers include software and
electronics which increase the functionality for robot users – enabling multi-tasking,
transfer of information from file to robot, communications with external systems or
advanced motion tasks. This technology also enables human-robot collaboration.
Importantly, controllers are developed and tested to comply with international safety
standards to ensure safe and predictable robot motion.
Programmed Path and Robot Speed
Controller programming language ensures the motion path followed by the robot is
the same as the programmed path – regardless of the robot speed.
1 m/s 0.1 m/s 0.1 m/s - 1 m/s
Tradional TrueMoveTM Model
Source: ABB
Machine Vision: Machine vision is the technology and methods used to provide
imaging-based automatic inspection and analysis for such applications as automatic
inspection, process control, and robot guidance, usually in industry. Machine vision
refers to many technologies, software and hardware products, integrated systems,
actions, methods and expertise.
There are a wide range of robotic vision-guided systems available on the market.
The systems locate, inspect and guide parts – performing tasks that are practically
impossible for people to do reliably and consistently.
APPENDIX: SELECT PRODUCTS WITHIN AUTOMATION SOLUTIONS
Human Machine Interface: HMI’s are designed to achieve the highest

plant productivity, availability and safety as well as operator efficiency.
The newest versions provide clear and intuitive graphical interfaces for
process displays, faceplates and workplace layout providing operators
with relevant process information in its situational context. This enables
awareness of any given situation in a plant. They also offer an extensive
set of options for adapting presentation so that focus can be tailored,
and users can access the required information more quickly than older
generations.
Servo Motion Control: Servo Motors incorporate positional feedback

in order to control the rotational or linear speed and position. Servos
are used in radio-controlled airplanes to position control surfaces like
elevators, rudders, walking a robot, or operating grippers. Servo motors
are small, have built-in control circuitry and have good power for their
size.
Safety Products: OEMs need to factor in health, safety and environmental

considerations in all aspects of product design, manufacturing and
construction and life cycle services – helping customers minimize risks,
lower project costs and shorten project schedules. A variety of safety-
oriented products are applied to simple and complex functional safety
applications like material handling (cranes, hoists, mobile platforms,
distribution centers, harbors, airports, etc.), robotics, wind turbines and
many more.
Examples of safety-oriented equipment include:
• Safety controllers
• Fencing systems
• Safety, sensors, and locks
• Arc fault detection systems
• Arc resistant switch gear and motor control center
Track Systems: These serve to extend the robot’s working area, enabling
the same robot to serve many machines and minimize the number of
robots required. Track Systems are designed to ensure reliable and
effective utilization of a robot’s capacity and to maximize the value of a
user’s automation investment.
25 INDUSTRIALS | ABOUT US
INDUSTRIALS
Focus Areas
DIVERSIFIED INDUSTRIALS ENGINEERED EQUIPMENT
• Building Products • Industrial Equipment & Systems
• Engineered Materials • Material Handling & Conveyance
• Industrial Distribution • Power Generation, Transmission & Management
• Industrial Technology & Cleantech • Specialty Vehicles
• Precision Manufacturing
AUTOMOTIVE & AFTERMARKET METALS & METALS PROCESSING
• Automotive Aftermarket • Metals Recycling
• Tiered Vehicle Suppliers • Mills & Foundries
• Vocational Vehicles • Metal Service Centers
• Manufacturing
Who We Are
Leading Independent Firm Comprehensive Capabilities
• Independent investment banking and financial advisory services M&A ADVISORY CAPITAL MARKETS
for the global middle market since 1989
Sell-Side Advisory All Tranches of
• A
firm culture built on the core principles of integrity,
accountability, commitment, and relationship focus; as a Acquisitions & Divestitures Debt & Equity Capital for:
partnership owned exclusively by our professionals, we are Growth
Public & Private Mergers
singularly focused on helping our clients succeed
Acquisitions
Special Committee Advice
• O
n every engagement, our clients receive senior-level attention Recapitalizations
from experienced bankers who bring a wealth of industry Strategic Partnerships & Joint Ventures
knowledge, transaction expertise, and deep relationships Fairness Opinions & Fair Value Opinions
Dividends
• W
e are energized when presented with unique challenges and
known throughout the industry for our ingenuity in developing
and executing creative solutions to deliver outstanding results FINANCIAL ADVISORY RESEARCH
• D
eep industry experience in Business & Industrial Services,
Consumer, Healthcare & Life Sciences, Industrials, and Real Estate General Financial & Strategic Advice Primary Research
• B
road client base including family/entrepreneurially-owned, Balance Sheet Restructurings Industry Benchmarking
private equity-backed, and publicly owned companies Sales of Non-Core Assets or Businesses Operating Advisor Network
• Investment banking offices in Chicago, Cleveland, and §363 Auctions White Papers
Philadelphia; real estate brokerage offices in Chicago, Cleveland,
Industry Surveys
Denver, and San Antonio; and access to experience and capital in
more than 30 countries worldwide via Global M&A Partners, Ltd.
The information contained in this publication was derived from proprietary research conducted by a division or owned or affiliated entity of Brown Gibbons Lang & Company LLC. Any projections, estimates or other
For questions about forward-looking statements contained in this publication involve numerous and significant subjective assumptions and are subject to risks, contingencies, and uncertainties that are outside of our control, which
content and circulation, could and likely will cause actual results to differ materially. We do not expect to, and assume no obligation to update or otherwise revise this publication or any information contained herein. Neither Brown Gibbons
please contact editor, Lang & Company LLC, nor any of its officers, directors, employees, affiliates, agents or representatives makes any representation or warranty, expressed or implied, as to the accuracy, completeness or fitness of any
information contained in this publication, and no legal liability is assumed or is to be implied against any of the aforementioned with respect thereto. This publication does not constitute the giving of investment
Rebecca Dickenscheidt,
advice, nor a part of any advice on investment decisions and nothing in this publication is intended to be a recommendation of a specific security or company, nor is any of the information contained herein intended
at rdickenscheidt@ to constitute an analysis of any company or security reasonably sufficient to form the basis for any investment decision. Brown Gibbons Lang & Company LLC, its affiliates and their officers, directors, employees or
bglco.com or affiliates, or members of their families, may have a beneficial interest in the securities of a specific company mentioned in this publication and may purchase or sell such securities in the open market or otherwise.
312-513-7476. Nothing contained in this publication constitutes an offer to buy or sell or the solicitation of an offer to buy or sell any security.
INDUSTRIALS
DEDICATED LEADERSHIP
ANDREW PETRYK PROFESSIONAL EXPERIENCE EDUCATION
EDUCATION
Man agi n g Di rect or • Leads BGL’s Industrials practice
H ead of In du st ri al s • Over 25 years of investment banking and corporate finance
• B.S., Miami University
experience • M.B.A., Weatherhead School of
• Ernst & Young Entrepreneurial Services Group Management at Case Western Reserve
University
• Formerly with the Structured Finance Group at
Key Bank (predecessor Society Bank)
• Prior experience in private equity, corporate finance,
and institutional sales
• Non-practicing Certified Public Accountant
• Former President of the ACG Cleveland Chapter
LEO MAHON PROFESSIONAL EXPERIENCE EDUCATION

EDUCATION
Man agi n g Di rect or • Over 25 years of investment banking and corporate finance • B.S., Marquette University
Industrials experience • - Finance
• Former investment banker at SunTrust Robinson Humphrey, • B.S., Marquette University
Citigroup, Goldman Sachs, and Morgan Stanley.
• - Accounting
• M.B.A., The University of Chicago
Booth School of Business
JUSTIN WOLFORT PROFESSIONAL EXPERIENCE EDUCATION

EDUCATION
Di rect or • Over 15 years of investment banking and corporate finance • B.S., Syracuse University
In du st ri al s experience
• M.B.A., Indiana University
• Former investment banking and corporate finance positions Kelley School of Business
at Western Reserve Partners, KeyBanc Capital Markets, and
McDonald Investments
CHICAGO CLEVELAND PHILADELPHIA

O n e M a g ni f i ce nt Mile On e C levelan d Cen t er O ne Libe rty Pl ace
9 8 0 N . M i c h i g a n Aven ue 1 3 7 5 Eas t 9 t h St reet 1650 Marke t S tre e t
Sui t e 1 8 8 0 Suit e 2 5 0 0 S u ite 3600
C h i c a go, IL 6 0 6 1 1 C levelan d, OH 4 4 1 1 4 Phil ade l phia, PA 19103
p. 3 1 2 . 6 5 8 . 1 6 0 0 p. 2 1 6 .9 2 0 .6 6 1 3 p. 610.941.2765
INDUSTRIALS
CHICAGO CLEVELAND PHILADELPHIA

O ne M a g ni f i ce nt Mile On e C levelan d Cen t er O ne Libe rty Pl ace
9 8 0 N . M i c hi g a n Aven ue 1 3 7 5 Eas t 9 t h St reet 1650 Marke t S tre e t
S ui t e 1 8 8 0 Suit e 2 5 0 0 S u ite 3600
C h i c a go, IL 6 0 6 1 1 C levelan d, OH 4 4 1 1 4 Phil ade l phia, PA 19103
p. 3 1 2 . 6 5 8 . 1 6 0 0 p. 2 1 6 .9 2 0 .6 6 1 3 p. 610.941.2765

BGL Industrials Insider Industrial Automation August 2020

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

BGL Industrials Insider Industrial Automation August 2020

Uploaded by

Copyright:

Available Formats

BGLCO.

COM AUGUST | 2020

ANDREW K. PETRYK LEO T. MAHON JUSTIN A. WOLFORT TA B L E O F C O N T E N T S

TOP 10 IoT APPLICATION AREAS, 2020

GLOBAL SHARE OF ENTERPRISE IoT PROJECTS Trends

1 Manufacturing / Industrial 22%

2 Transporta�on / Mobility 15%

Source: IoT Analytics

“Industrial IoT is transforming the rules of manufacturing, fueling cloud and

Satya Nadella, CEO of Microsoft, 2019

KEY MEGA-TRENDS DRIVING AUTOMATION AND ROBOTICS GROWTH

Individualized Labor shortage

1/4 have bought

Connected factory data / day= 40%

GLOBAL AUTOMATION MARKET SIZE

$100 INDUSTRIAL SOFTWARE

INDUSTRIAL AUTOMATION MARKET FORECAST

DISCRETE vs PROCESS AUTOMATION

Discrete automation vendors supply: 10%

• Programmable logic controllers (PLC) General

• Actuators to provide movement or control

Source: Wall Street Research, BGL

Machines Fabricated Electronics Electrical Automo

Source: Schneider Electric, BGL

The Discrete Automation Market has an attractive organic growth outlook.

DISCRETE AUTOMATION MARKET DRIVERS

GLOBAL ADDRESSABLE MARKET1 MARKET GROWTH DRIVERS

• Flexible manufacturing (digital factory >10% p.a.)

~$75B • New products, technologies (e.g. 5G)

ENTERPRISE Enterprise Resource Planning system enables top

management to see and control operations from

PLANNING & PLM / ERP manufacturing, to sales, to purchasing, to finance

LOGISTICS and payroll, etc.

BUSINESS UNIT Manufacturing Execution Systems monitor the

OPERATIONS MANAGEMENT from the raw materials to the finished product.

Supervisory Control and Data Acquisition can monitor and

control multiple systems from a single location. Human

to interact with the machine (e.g., machine with touch display,

a push button, a mobile device, or a computer with a keypad).

Control & manipulation of the devices in the field that

decisions on what outputs to turn on or complete the

FIELD Devices on the factory floor to move materials and

Machines, Vision &

Platforms for connectivity that integrates the

various software and hardware systems to form

BETWEEN THE COMPUTER, THE INTERNET, AND EVERYTHING IN BETWEEN.

PLANNING & PLM / ERP

MONITORING & SUPERVISING SCADA / HMI

SENSING & MANIPULATING DCS / PLC

Machines, Vision &

INDUSTRIAL IoT PLATFORMS

BETWEEN THE COMPUTER, THE INTERNET, AND EVERYTHING IN BETWEEN.

Automation architecture is evolving to adapt to an increasingly

5-Layer Stack Edge-to-Cloud Architecture

MES INFORMATION TECHNOLOGY MES Cloud

PLC / DCS OPERATIONAL TECHNOLOGY PLC / DCS

ROBOTICS MARKET SEEING STRONG GROWTH - ASIA HAS LED ADOPTION

TECHNOLOGICAL DEVELOPMENTS EXPANDING ROBOT ADOPTION

Asia / Australia Europe America

Collaborative Robots: Next generation, highly advanced robots that have

Telepresence Robots: Telecommunication robots with a broad use for video

Warehouse and Logistics Robots: Automation in industrial logistics applications

BROAD ROBOTICS CLASSIFICATIONS

Annual Global Installaons of Industrial Robots 2013 - 2022P

$40.0 CAGR 44% $38.0 Hyper-Customizaon

$- Acceleraon in New Roboc Technology

Tradional TrueMoveTM Model

• Building Products • Industrial Equipment & Systems

• Engineered Materials • Material Handling & Conveyance

• Industrial Distribution • Power Generation, Transmission & Management

• Industrial Technology & Cleantech • Specialty Vehicles

• Automotive Aftermarket • Metals Recycling

• Tiered Vehicle Suppliers • Mills & Foundries

• Vocational Vehicles • Metal Service Centers