Question1 : What was the strategic logic for Richemont to invest in YNAP? Was this related or unrelated diversification?

Question2 : Both Hitachi, based in Japan, and GlobalLogic, based in the US, compete around the world. As they merge operations to expand into new market segments, which international approach do you think makes the most sense for them?

Hitachi Ltd. 's $9.6 billion purchase of digital-engineering firm GlobalLogic Inc. amounts to a big bet that enterprise software will unleash the power of big data on heavy industry. The Japanese manufacturing giant follows a string of other old-guard hardware businesses that are investing in fast-growing enterprise-software development, analysts say. Best-known years ago for TV sets, video recorders and batteries, Hitachi is diving headfirst into this area as coronavirus restrictions have all but shoved industries into digitizing their businessesfaster. That's where Hitachi hopes to employ GlobalLogic's engineering know-how in manufacturing, energy and other sectors to expand further outside Japan, said Gajen Kandiah, chief executive of Hitachi Vantara, the firm's digital infrastructure segment. "Unfortunately, you only hear about a small group of companies that are maximizing data," he said. "You don't hear about the 99% that isn't." Digital services and the data analytics that power them have been a competitive advantage for many companies during the pandemic, with global supply chains upended and employees and customers interacting virtually.

10/31/21, 2:25 PM Why Hitachi Is Spending $9.6 Billion to Dive Into the Software Business - WSJ https://www.wsj.com/articles/why-hitachi-is-spending-9-6-billion-to-dive-into-the-software-business-11617650955 2/3 GlobalLogic employs more than 20,000 people in India, Europe and the U.S. to help companies on such digital projects. Shashank Samant, the San Jose, Calif., firm's chief executive, commands a small army of developers who will lay software on Hitachi products, like railroad or factory equipment, in the hopes of hoovering up data and improving efficiency. The two companies also overlap in industrial sectors like auto manufacturing, he said, as Hitachi automates plant machinery and GlobalLogic helps digitize cars. "If you bring two companies together, now you're carrying that entire ecosystem," Mr. Samant said. His firm's website features projects including an artificial-intelligence-powered battery meter for defibrillators; a platform to help a warehouse robotics-developer test its systems, and a mobile app that allows a tool manufacturer to track and analyze its internet-connected products. At the deal's announcement on Wednesday, Hitachi Chief Executive Toshiaki Higashihara also framed it as part of an international push. The Tokyo-based conglomerate's existing software and services business, Lumada, derives about 70% of its revenue from Japan. At GlobalLogic, more than half the firm's clients are in the U.S. and around one-third in Europe, Mr. Samant said. The price tag for GlobalLogic is large, analysts noted, but comes at a time when enterprise software is in particularly high demand. The pandemic has forced chief information officers to help run companies remotely and rethink their relationships with customers, said Tim Crawford, CIO strategic adviser at AVOA LLC, a consulting firm. The right technology can help drive those changes, and software generally can be more tailored to businesses' needs, he said. "The value is not in the hardware," Mr. Crawford said. "It's in the software and services." Tech suppliers have taken note of that demand. Hitachi, which sold its power- tools unit in 2017, joins a growing list of companies that have divested themselves of some old product lines or gone on buying sprees in high-growth sectors to diversify. In 2018, the chip maker Broadcom Inc. bought enterprise software company CA Technologies for $18.9 billion. International Business Machines Corp. spun off its massive information-technology services unit last year as part of a broader push toward cloud-computing. "Hardware is a low-margin business," said Ray Wang, founder of advisory firm Constellation Research Inc. "It's highly capital-intensive and the growth just isn't there."The value is not in the hardware. It's in the soware and services. Tim Crawford, of AVOA

10/31/21, 2:25 PM Why Hitachi Is Spending $9.6 Billion to Dive Into the Software Business - WSJ https://www.wsj.com/articles/why-hitachi-is-spending-9-6-billion-to-dive-into-the-software-business-11617650955 3/3 Appeared in the April 6, 2021, print edition as 'Hitachi Deal Makes Bet on Data.' Copyright 2021 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit https://www.djreprints.com. Software development, on the other hand, is an entry point to an array of markets, ranging from autonomous vehicles to mobile devices, he said. "You write the software once, and then distribute it over the internet," Mr. Wang added. In this sense, Mr. Kandiah said, GlobalLogic will help pull 110-year-old Hitachi into a new era. "We were looking for a while," he said of the company's hunt for the right acquisition. "Kiss many frogs, as they say."

Diamonds and technology don't mix. This may be the only point that an activist investor need make to the owner of French jeweler Cartier. Shares in Geneva-based Compagnie Financire Richemont rose 4% in morning trading Monday following a weekend report in fashion journal Miss Tweed that Daniel Loeb's Third Point hedge fund has built a stake. If confirmed, it would be the fund's second notable European investment in as many weeks, after it recently called for a break up of Royal Dutch Shell with arguments the oil major rejected.

5/6/22, 8:52 PM Cartier Could Be an Easy Win for Activist Third Point - WSJ https://www.wsj.com/articles/cartier-could-be-an-easy-win-for-activist-third-point-11636382507 2/3 Luxury brands have been targeted by activists before, but usually only the names whose shares and voting rights are mostly in public hands. Jana Partners demanded a board shake-up at Tiffany & Co. in 2017. The same year, activist Groupe Bruxelles Lambert built a stake in British trench coat maker Burberry. Richemont, however, is controlled by its South African founder and chairman Johann Rupert, who holds half of the voting rights despite an economic interest of just 9.1% through the company's B shares. This means that a campaign for a major overhaul probably wouldn't get far. But a sale or spinoff of Richemont's struggling online retailer Yoox Net-a-Porter offers a quick way to polish up the stock, which has underperformed peers in recent years. YNAP is losing money despite heavy investment. Over Richemont's last full fiscal year, the division where the online retailer sits made an operating loss of 223 million euros, equivalent to $258 million at current exchange rates. This is dragging down more attractive parts of the business, such as jewelry brands Cartier and Van Cleef & Arpels. Richemont's overall operating margin was 11.2% in its most recent fiscal year, compared with 16.8% before it took full ownership of YNAP in 2018. The company may already be exploring ways to sell the business. When Richemont took a stake in luxury e-commerce company Farfetch this time last year, the Swiss company's shares surged on speculation that it could be an initial step to unloading YNAP through a merger. Strip out the losses and goodwill depreciation associated with the struggling e-commerce website and Richemont's shares could be worth 26% more than they are today, according to Bernstein calculations. Richemont's operating proit margin Source: the company Note: inancial years for the 12 months through March % GBLB -2.69%

5/6/22, 8:52 PM Cartier Could Be an Easy Win for Activist Third Point - WSJ https://www.wsj.com/articles/cartier-could-be-an-easy-win-for-activist-third-point-11636382507 3/3 Appeared in the November 9, 2021, print edition as 'Cartier Could Be an Easy Win for Activist.' Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit https://www.djreprints.com. There are other things about Richemont that might irk an activist, such as its inefficient hoarding of cash3.6 billion euros sat on its balance sheet at the end of Juneand the dual-class share structure that cements Mr. Rupert's control. But the billionaire's thinking on these points seems unlikely to shift, and the only power that outside shareholders can wield is soft. Cartier faces stiffer competition since LVMH bought Tiffany & Co. last year, which is another reason for Richemont to get rid of a distraction like YNAP. If Third Point focuses on this point, it might be pushing on a more open door than it found at Shell.