Financial summary Q4 '13
Financial summary FY '13
Operational summary Q4 '13
Change percentages are based on non-rounded figures
TomTom's Chief Executive Officer, Harold Goddijn
"2013 was a solid year for us, both operationally and financially. We
launched important new products, such as our new PND range and our first
TomTom own branded GPS sports watches, and we increased the velocity and
productivity of our development activities. We delivered a strong gross
margin and generated significant cash from operations.
We achieved a net cash position mid-way through the year and built on
this through to the end of the year. In the year ahead we plan to step
up our investments in our new map making platform and navigation
software, which will further strengthen TomTom's capabilities and its
For the group we expect full year revenue of around €900 million.
In the Consumer market, our strategy is to maximise value from the PND
category and to diversify into other product categories that have a
natural fit with our brand, distribution and product design capabilities.
In fleet management (Business Solutions), we achieved market leadership
in Europe and our strategy is to continue to grow through a combination
of organic growth and targeted acquisitions.
Revenue development in Automotive in 2014 will be muted as we transition
ourselves to a pure content and software supplier. Our strategy going
forward is to offer individual connected navigation system components,
such as maps, traffic services and navigation software, as well as a
complete pre-integrated connected navigation system.
In the Licensing segment, which includes mobile device vendors,
government organisations and internet service providers, we are working
to licence a wider portfolio of products and to capitalise on our
flexible approach to partnering.
We expect the gross margin to stay strong, we will maintain tight
control on operating costs and we expect to deliver adjusted earnings
per share of around €0.20.
Our capital investments are expected to increase to more than €100
million, as we invest at a higher level in our map and navigation
software and we continue to target acquisitions in the fleet management
Financial and business review
We generated revenue of €268 million in the fourth quarter, a decline of
7% compared to €289 million in Q4 '12. On a full year basis, our
revenue, although lower year on year, performed well relative to market
trends. The net result for the year was €20 million, which translates to
adjusted earnings per share of €0.26 for 2013.
Consumer revenue for the quarter was €165 million, a decline of 12%
compared to the same quarter last year (Q4 '12: €187 million). PND is
the main revenue contributor in the Consumer segment.
The PND market size in Europe3 was 2.2 million units in the
fourth quarter, 14% lower compared to Q4 '12. For the full year, the PND
market size in Europe equalled 8.4 million units, 14% lower compared to
2012. Our European PND revenue declined less than the rate of market
decline because of increased market share and strengthening of our ASP.
We estimate our European market share for the quarter at around 53%, up
by three percentage points compared to Q4 '12.
The PND market in size in North America was 1.8 million units in the
fourth quarter, 27% lower compared to Q4 '12 and remains a challenging
market for our PNDs. The PND market size in North America equalled 5.4
million units in 2013, 26% lower compared to 2012. We estimate our North
American market share for the quarter at around 15%, down by four
percentage points compared to Q4 '12. We will introduce our new PND
range in North America during the first quarter of 2014.
Our Automotive business generated revenue of €46 million in the fourth
quarter, which is 3% higher compared to €44 million in Q4 '12. This
increase was driven by higher revenue from systems sales.
Automotive revenue in 2013 was €192 million, a decline of 9% compared to
€212 million in 2012. Our Automotive business unit is in transition.
Although we will continue to manufacture previously-developed in-dash
hardware, when quoting for automotive contracts, we focus on maps,
traffic and navigation software.
Our Licensing revenue declined to €32 million in Q4 '13 from €37 million
in Q4 '12. On a full year basis, Licensing reported total revenue of
€119 million, which is €14 million lower compared to €133 million in
2012. This decline mainly resulted from the phasing out of a major
contract, which has not yet been fully replaced by new contract wins,
and lower GIS Licensing revenue.
In the quarter, we announced a partnership agreement with Clear Channel
(Total Traffic + Weather Network) in North America. The agreement
combines TomTom's real-time and predictive traffic flow data with Total
Traffic + Weather Network's traffic incident, construction and
congestion data to create the most comprehensive traffic solution
available in North America. The combined data offering will be available
across multiple platforms including radio, television, automotive,
online and mobile.
We continued our commitment to expanding our map and traffic coverage
globally. Currently our navigable map covers 41 million km of roads in
114 countries and we expanded our traffic service to Brazil.
Our fleet management business enjoyed another quarter of strong growth,
and reported revenue of €24 million in Q4 '13, a 19% increase compared
to €20 million in Q4 '12. This increase is driven by growth in the
WEBFLEET subscriber base and the related recurring revenue. The
recurring SaaS revenue amounted €16 million for the quarter, 30% higher
compared to Q4 '12.
Revenue for 2013 was €85 million, which represents 16% growth year on
year (2012: €73 million). The recurring SaaS revenue amounted €57
million, a 25% increase year on year (2012: €46 million). At the end of
the year, Business Solutions reported 27,000 customers, the largest
managed fleet management systems customer base in the world, and an
installed base of 330,000 active subscribers, a 38% increase from
239,000 at the start of 2013.
Hardware and Content & Services revenue split
Hardware revenue for the quarter was €177 million compared to €191
million in Q4 '12. Content & Services revenue in the quarter was €91
million, 8% lower compared to Q4 '12, mainly due to lower Licensing
revenue and lower Consumer service revenue. As a percentage of revenue,
Content & Services revenue remained at 34%, the same as in Q4 '12.
On a full year basis, revenue from Content & Services was €371 million
(FY '12: €400 million) and accounted for 38% of total revenue (FY '12:
38%). Content & Services revenue was impacted by lower Licensing revenue
and by the trend towards bundling lifetime maps and traffic on the sale
of a PND.
Geographical revenue split
From a regional perspective, 72% of our revenue in the fourth quarter
was generated in Europe (Q4 '12: 66%), 21% in North America (Q4 '12:
27%) and the remaining 7% in the rest of the world (Q4 '12: 7%).
On a full year basis, 74% of our revenue was generated in Europe (FY
'12: 73%), 18% in North America (FY '12: 20%) and the remaining 8% in
the rest of the world (FY '12: 7%).
The gross margin for the quarter was 54%, which is one percentage point
higher compared to 53% in Q4 '12. On a full year basis, we reported a
gross margin of 54% in 2013 (FY '12: 52%).
Total operating expenses for the quarter were €139 million, which is
€9.5 million higher compared to the same quarter last year (Q4 '12: €130
million). The increase was mainly caused by higher marketing expenses as
we ran radio, outdoor and print campaigns to support our recent product
On a full year basis, total operating expenses totalled €496 million
compared to €484 million in 2012, explained by higher SG&A (higher
variable personnel expenses) and marketing expenses.
Financial income and expenses
The net interest charge for the quarter was €0.8 million versus an
interest charge of €2.4 million in Q4 '12. The lower interest charge
reflects a lower interest rate applied against lower outstanding
borrowing this year. The other financial result for the quarter was a
gain of €0.3 million (Q4 '12: charge of €0.3 million), which consisted
primarily of foreign exchange gains.
On a full year basis, the total financial income and expense charge
equalled €4.6 million compared to €10.4 million in 2012.
The net income tax charge for the quarter was €0.6 million versus a net
income tax gain of €77 in Q4 '12. The income tax gain in the prior year
resulted from settlement of prior years' tax discussions with the Dutch
tax authorities. The effective tax rate (ETR) for the quarter was 16.5%
compared to a normalised ETR of 11.7% in Q4 '12, which excludes the
one-off €80 million tax settlement from the Dutch tax authorities in
2012. The ETR for the full year equalled 16.7% compared to 18.8% in
2012. Our ETR reflects benefits from the tax incentives which are made
available for companies with significant research and development
activities in the Netherlands.
Net result and adjusted¹ EPS
The net result for the quarter was €3 million compared to €99 million in
Q4 '12. Excluding the impact of the €80 million one-off tax gain in
2012, the net result for Q4 '12 would have been €19 million. The
adjusted EPS for Q4 '13 was €0.06 versus an adjusted EPS of €0.13 in Q4
'12. Adjusted EPS for 2013 was €0.26 compared to the adjusted EPS of
€0.40 in 2012.
Trade receivables at the end of the quarter equalled €115 million
compared to €150 million at the end of Q4 '12. The year on year decrease
is attributed to better collection results and to lower revenue.
Inventory was €42 million, €2 million lower compared to Q4 '12. Cash and
cash equivalents increased from €164 million at the end of Q4 '12 to
€258 million at the end of Q4 '13.
At the end of Q4 '13 the carrying value of our outstanding borrowings
was €173 million (Q4 '12: €247 million). The nominal amount of the
outstanding borrowings excluding the transaction costs was €175 million
(Q4 '12: €250 million).
Current liabilities excluding deferred revenue were €383 million
compared to €398 million at the end of Q4 '12. The year on year decrease
was mainly driven by lower provisions in 2013. Trade payables amounted
to €82 million, €2 million lower compared to Q4 '12. Tax and social
security liabilities amounted to €28 million compared to €33 million at
the end of Q4 '12. This decrease is mainly due to a lower corporate
income tax provision.
Deferred revenue for the quarter ended at €114 million (Q4 '12: €95
million). The main reason for the year on year increase is related to
the increase of deferred revenue related to the lifetime maps content
and lifetime traffic services bundled in our PND ranges.
At 31 December 2013 we had a net cash position of €83 million (Q4 '12:
net debt of €86 million). Net cash is the sum of the cash and cash
equivalents at the end of the period (€258 million) minus the
outstanding gross borrowings (€175 million).
Cash flow from operating activities for the quarter was €51 million
compared to €91 million in Q4 '12. The year on year decrease was mainly
driven by lower results and higher working capital utilisation in Q4 '13.
On a full year basis, we generated strong cash flow from operating
activities of €260 million compared to €167 million in 2012. Excluding
the one-off €80 million refund from the Dutch tax authorities, our cash
flow from operating activities was €180 million which represents an 8%
increase year on year. The year on year increase is mainly attributed to
strong working capital management.
The cash flow used in investing activities during the quarter increased
by €7 million year on year to €21 million. On a full year basis the cash
flow used in investing activities was €91 million, an increase of €40
million year on year. Maps continues to be our largest area of
investment and we also saw increased activity in customer specific
Automotive projects and in navigation software development.
Consolidated condensed statement of income
Consolidated condensed balance sheet
Consolidated condensed statements of cash flows
Change in liabilities (excl. Provisions)4
Accounting policies - basis of accounting
The condensed consolidated financial information for the three-month and
twelve-month periods ended 31 December 2013 with related comparative
information have been prepared using accounting policies which are based
on International Financial Reporting Standards (IFRS). Accounting
policies and methods of computation followed in the condensed
consolidated financial information, for the period ended 31 December
2013, are the same as those followed in the Financial Statements for the
year ended 31 December 2013. Further disclosures as required under IFRS
for a complete set of consolidated financial statements are not included
in the condensed consolidated financial information. The consolidated
and company financial statements of TomTom NV for the year ended 31
December 2013 have been prepared and audited but are not yet published.
The quarterly condensed consolidated information in this press release
Audio webcast fourth quarter and full year 2013 results
The information for our fourth quarter and full year 2013 results audio
webcast is as follows:Date and time: 11 February 2014 at 14.00 CETcorporate.tomtom.com/presentations.cfm
TomTom is listed at NYSE Euronext Amsterdam in the NetherlandsISIN:
NL0000387058 / Symbol: TOM2
TomTom empowers movement. Every day millions of people around the world
depend on TomTom to make smarter decisions. We design and develop
innovative products that make it easy for people to keep moving towards
their goals. Our map-based components include map content, online
map-based services, real-time traffic, and navigation software. Our
consumer products include PNDs, navigation apps, and GPS sports watches.
Our main business products are custom in-dash navigation systems and a
fleet management system, which is offered to fleet owners as an online
service with integrated in-vehicle cellular devices. Our business
consists of four customer facing business units: Consumer, Automotive,
Licensing and Business Solutions. Founded in 1991 and headquartered in
Amsterdam, we have 3,600 employees worldwide and sell our products in
over 35 countries. For further information, please visit www.tomtom.com
Forward-looking statements/Important notice
This document contains certain forward-looking statements with
respect to the financial condition, results of operations and business
of TomTom NV and its subsidiaries (referred to as 'the company' or 'the
group') and certain of the plans and objectives of the company with
respect to these items. In particular the words 'expect', 'anticipate',
'estimate', 'may', 'should', 'believe' and similar expressions are
intended to identify forward-looking statements. By their nature,
forward-looking statements involve risk and uncertainly because they
relate to events and depend on circumstances that will occur in the
future. Actual results may differ materially from those expressed in
these forward-looking statements, and you should not place undue
reliance on them. We have based these forward-looking statements on our
current expectations and projections about future events, including
numerous assumptions regarding our present and future business
strategies, operations and the environment in which we will operate in
the future. There are a number of factors that could cause actual
results and developments to differ materially from those expressed or
implied by these forward-looking statements. These factors include, but
are not limited to, levels of customer spending in major economies,
changes in consumer tastes and preferences, changes in law, the
performance of the financial markets, the levels of marketing and
promotional expenditures by the company and its competitors, raw
materials and employee costs, changes in exchange and interest rates (in
particular changes in the US dollar and GB pound versus the euro can
materially affect results), changes in tax rates, future business
combinations, acquisitions or disposals, the rate of technological
changes, political and military developments in countries where the
company operates and the risk of a downturn in the market. Statements
regarding market share, including the company's competitive position,
contained in this document are based on outside sources such as
specialized research institutes, industry and dealer panels in
combination with management estimates. Where full-year information
regarding 2013 is not yet available to the company, these statements may
also be based on estimates and projections prepared by outside sources
or management. Market shares are based on sales in units unless
otherwise stated. The forward-looking statements contained refer only to
the date in which they are made, and we do not undertake any obligation
to update any forward-looking statement to reflect events or
circumstances after the date of this document.
1 Earnings per share adjusted for acquisition-related
amortisation & gain on a post-tax basis.2 €180
million excludes a €80 million one-off tax gain received from the Dutch
tax authorities.3 Europe refers to EMEA17: AT, CH, DE,
BE, NL, FR, IT, GB, ES, PT, TR, CZ, PL, DK, SE, FI, ZA.4 Includes
the movement of non-current deferred revenue
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