Growth outlook by end-market: • Industrial Software – rising adoption and increasing product complexity (all the way to mass-customisation) supports high single-digit growth outlook and we agree with Siemens’ 8% 2020-35 market CAGR estimate. Software cross-pollination of hardware is also becoming increasingly transparent.

• Industrial IoT Platforms – the ‘arms race’ continues with now >500 offerings by traditional automation, software and tech players, but also evidence of consolidation (GE Predix, Rockwell FactoryTalk) and leadership emerging (AWS, Microsoft, Siemens MindSphere); closing the machine-to-machine loop is the ultimate goal.

Cambashi estimates c20% 2020-24 CAGR for the market and expects the number of platforms to shrink over time.

• Discrete Automation – cycle debate aside, we see selective re-shoring and generally rising adoption as positives and supporting Siemens’ 6% 2020-25 market CAGR estimate but have concerns over 1) automotive shift to EVs where drivetrain BOM is ¼ of ICE’s and 2) increasing efforts in PLC virtualisation (unlikely for auto, in our view, but possible for new applications).

• Process Automation – as the most mature segment, we expect growth closer to General IP (c3-4% pa), inline with Siemens’ view of 2020-25 market CAGR of 4%.

• Robotics – auto capex cycle headwind near term but overall rising adoption remains a structural driver; market shift towards cobots to watch.

Strategic Trends: • 1) Hardware vs Software – ‘who eats who?’ – M&A to continue • 2) Tech / Software players competition heating up in IIoT • 3) Cybersecurity capability is becoming a competitive advantage • 4) China competition threat continues to evolve – taking share locally • 5) Near-shoring of manufacturing – a clear positive