Financial summary Q1 '17
Operational summary Q1 '17
Full year outlook re-iterated; revenue expected in the range of €925
million to €950 million and adjusted EPS1 expected of around
Change percentages and totals calculated before rounding.
This report includes the following non-GAAP measures: gross margin, EBIT
(margin), EBITDA (margin), adjusted net result, adjusted EPS and net
cash, which are further explained on page 10 of this report.
TomTom's Chief Executive Officer, Harold Goddijn
"Combined Automotive, Licensing and Telematics revenue grew by 14%
year on year, in line with our expectations. High margin recurring
software revenue now accounts for 60% of group revenue and more than 75%
of gross result in the quarter.
Automotive revenue came in strong because of overall growing car
sales and new car models launched with our products. We are happy that
the international motor press selected the PEUGEOT 3008 as the Car of
the Year 2017 featuring our products.
We continued to make progress in Autonomous Driving during this
quarter. Volvo selected our products for their Drive Me research
programme and our HD Map and RoadDNA coverage was further extended."
We are re-iterating our guidance for the year.
In 2017, we expect full year revenue of between €925 million and €950
million. Adjusted EPS2 is expected of around €0.25.
We expect the combined revenue of the Automotive, Licensing and
Telematics businesses to grow above 10% year on year in 2017, in line
with our previous expectations of their combined revenue CAGR of 15%
between 2016 and 2020.
We expect the level of investments (both CAPEX and OPEX) to show a
modest increase compared with 20163, excluding acquisitions.
Financial and business review
Revenue for the first quarter amounted to €213 million, 2% lower
compared with the same quarter last year (Q1 '16: €217 million).
Automotive, Licensing and Telematics jointly grew by 14% year on year,
which was offset by lower Consumer revenue. Our gross margin equalled to
62% in the first quarter (Q1 '16: 57%). The net result for the quarter
was a loss of €4.6 million, which translates to adjusted EPS¹ of €0.03.
Automotive & Licensing
Automotive & Licensing combined revenue in the quarter was €74 million
(Q1 '16: €63 million).
Automotive generated revenue of €41 million in the quarter, representing
a 38% increase year on year. This growth mainly came from higher revenue
on a contract that started to kick in during the first half of 2016.
Licensing revenue in Q1 '17 was €33 million compared with €34 million in
the same quarter last year.
In the quarter, Automotive business announced that Alfa Romeo selected
TomTom navigation, software and maps, globally, for its Stelvio SUV. It
was also revealed that all new Renault cars with the R-LINK infotainment
system will come with 3 years' TomTom Traffic, and 3 years' European map
updates included. Furthermore, the Opel Crossland X, unveiled at the
Geneva Motor Show, will be equipped with TomTom components, including
software and maps.
We completed the expansion of our HD Map product to the entire mainland
US interstate network, now covering over 185,000 kilometres of
interstates and highways across the country. Also, Volvo Cars selected
our HD Map to power the Volvo Drive Me programme, a research project
where real drivers will use Autonomous Driving in their daily lives on
public roads. In addition, we announced a new project to crowdsource
high definition map data together with Qualcomm, exploring the
connectivity and compute capabilities of their Drive Data Platform.
In January, we acquired Autonomos, a Berlin-based Autonomous Driving
start-up. Autonomos has built up expertise and technologies for
automated vehicle assistance systems, including a full
demonstration-level Autonomous Driving software stack, 3D sensor
technology, and digital image processing.
Our Licensing business announced the extension of our relationship with
Mappy, including access to TomTom traffic data from 10 countries to the
whole of Europe. Frankfurt and Düsseldorf have implemented an
intelligent traffic control system, developed by Munich-based GEVAS
software, which includes TomTom's detailed live traffic data for an
enhanced view of the cities' traffic flows.
The introduction of TomTom Traffic in Argentina and Colombia increased
the coverage in South America to four countries and extends the global
reach of our traffic service to 54 countries. The growth in coverage has
been aided by the continuous growth in the GPS trace input to the TomTom
traffic fusion engine from our community, which has now surpassed 500
million connected data sources that include smartphones, embedded
automotive systems, telematics systems and portable navigation devices.
1 Change percentages and totals calculated before
rounding.2 Other services revenue
comprises installation services and separately purchased traffic service
and/or map content.
Telematics revenue for the quarter was €41 million, a 10% increase
compared with €37 million in Q1 '16. The increase is driven by an
increase in both the recurring subscription revenue as well as from
hardware sales. The recurring subscription revenue for the quarter
increased by 6% year on year to €31 million (Q1 '16: €29 million).
Monthly revenue per subscription declined by 7% year on year, mainly due
to a mix effect caused by growing aftermarket connected car volumes,
which are priced at lower levels compared with the traditional fleet
At the end of the quarter, TomTom Telematics surpassed 723,000
subscriptions to its connected car and fleet management solutions. This
represents a 16% increase compared with 625,000 at the end of Q1 '16.
Consumer revenue for the quarter decreased by 16% year on year to €98
million (Q1 '16: €117 million), reflecting a decrease in both Consumer
products as well as Automotive hardware revenue. The Automotive hardware
revenue declined by 35% year on year due to discontinuation of a legacy
platform, that went end of life at the start of Q3 '16. Consumer
products revenue in Q1 '17 was 12% lower year on year, mainly driven by
the continued decline in the PND market.
In the quarter, Sports launched the TomTom Touch Cardio that monitors
heart rate, adding to a more accurate calculation of calorie burn,
measures the intensity of efforts, and providing insight about fitness
level. Sports also released the completely renewed Sports app with a
more engaging and motivating way to view activities, trends and
comparisons, and monitor performance.
Data, software & services and Hardware revenue split
Data, software & services revenue in the quarter was €127 million, 10%
higher compared with €116 million in Q1 '16, mainly due to increasing
Automotive revenue. Data, software & services accounted for 60% of the
revenue in Q1 '17 compared with 53% in Q1 '16. Hardware revenue for the
quarter was €86 million, 16% lower compared with €102 million in Q1 '16.
Our gross result increased by 7% to €132 million in the quarter compared
with €123 million in Q1 '16. The gross margin for the quarter was 62%,
which is five percentage points higher compared with 57% in Q1 '16,
reflecting the shift of revenue mix towards higher margin data, software
& services revenue.
Total operating expenses for the quarter were €137 million, €10 million
higher compared with €128 million in the same quarter last year. This
increase is mainly due to higher R&D and SG&A expenses as well as
modestly higher amortisation of technology & databases. The increase in
our R&D and SG&A line is mainly caused by higher expenses on the
long-term employee incentive plan.
¹The Q1 '17 income and expense in US dollar and GB pound have been
converted to euro using Q1 '16 average rates. All other foreign
currencies have not been converted.
Depreciation and amortisation
Total depreciation and amortisation costs amounted to €33 million
compared with €30 million in Q1 '16. This increase is mainly caused by
higher amortisation of technology and databases, which is a result of
increased capital expenditures in the past years.
Financial income and expenses
The net interest charge for the quarter was €0.2 million versus a net
interest charge of €0.3 million in Q1 '16. The other financial result
for the quarter was a gain of €0.4 million (Q1 '16: gain of €1.7
The net income tax for the quarter was close to nil versus a net income
tax gain of €7.3 million in Q1 '16. The income tax gain in Q1 '16 was
mainly the result of remeasurement of our deferred tax assets and
Net result and adjusted EPS
The net result for the quarter was a loss of €4.6 million compared with
a gain of €4.8 million in Q1 '16. The net result adjusted for
acquisition-related expenses & gains on a post-tax basis was a gain of
€7.0 million compared with €7.9 million in Q1 '16.
Adjusted EPS for the quarter was €0.03, flat compared with the same
quarter last year.
At the end of the quarter, trade receivables plus other receivables
totalled €188 million compared with €178 million at the end of Q1 '16.
The inventory level at the end of the quarter was €63 million, compared
with €57 million at the end of the same quarter last year. Cash and cash
equivalents at the end of the quarter were €84 million versus €115
million at the end of Q1 '16.
Current liabilities excluding deferred revenue were €249 million
compared with €247 million at the end of Q1 '16.
Deferred revenue was €211 million at the end of Q1 '17, compared with
€183 million at the end of the same quarter last year. The year on year
increase reflects the increased deferred revenue position related to
Automotive contracts with upfront payments for multi-year service
At 31 March 2017, we reported a net cash position of €79 million (Q1
'16: net cash of €50 million). Net cash is the sum of the cash and cash
equivalents at the end of the period (€84 million) minus the borrowings
The cash flow from operating activities for the quarter was an outflow
of €1.8 million compared with an outflow of €18 million in Q1 '16. The
year on year improvement in operating cash flow was mainly driven by
lower utilisation of working capital in Q1 '17.
The cash flow used in investing activities during the quarter increased
by €22 million year on year to €53 million (Q1 '16: €31 million) mainly
due to the acquisition of Autonomos.
The cash flow used in financing activities was €3.2 million, reflecting
a repayment of €5 million of our revolving credit facility partly offset
by proceeds from the exercise of options related to long-term employee
incentive programmes. In the quarter, 0.5 million options (Q1 '16: 0.3
million options) were exercised resulting in a €2.2 million cash inflow
(Q1 '16: €1.2 million).
- END -
Consolidated condensed statement of income
Consolidated condensed balance sheet
31 March 2017Unaudited
31 December 2016Audited
¹ Other liabilities includes short-term borrowings of €380
Consolidated condensed statements of cash flows
Change in liabilities (excluding provisions)3
Net (decrease) in cash and cash equivalents
Exchange rate changes on cash balances held inforeign
3 Includes the movement of non-current deferred revenue
presented under Non-Current liabilities.
Accounting policies - basis of accounting
The condensed consolidated financial information for the three-month
period ended 31 March 2017 with related comparative information has 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 March 2017, are the same as those
followed in the Financial Statements for the year ended 31 December
2016. Further disclosures as required under IFRS for a complete set of
consolidated financial statements are not included in the condensed
consolidated financial information. Unless otherwise indicated, the
condensed consolidated financial information in this press release has
not been audited nor reviewed.
The financial information in this report includes measures, which are
not defined by generally accepted accounting principles (GAAP) such as
IFRS. We believe this information, along with comparable GAAP
measurements, gives insight to investors because it provides a basis for
evaluating our operational performance. Non-GAAP financial measures
should not be considered in isolation from, or as a substitute for,
financial information presented in compliance with GAAP. Wherever
appropriate and practical, we provide reconciliations to relevant GAAP
Gross margin is calculated as gross result divided by revenue
EBIT is equal to our operating result
EBIT margin is calculated as operating result divided by revenue
EBITDA is equal to our operating result plus depreciation and
EBITDA margin is calculated as operating result plus depreciation
and amortisation charges divided by revenue
Adjusted net result is calculated as net result attributed to
equity holders adjusted for acquisition-related expenses and gains on a
Adjusted EPS is calculated as adjusted net result divided by the
weighted average number of diluted shares over the period
Net cash is defined as our cash and cash equivalents minus the
nominal value of our outstanding borrowings
Audio webcast first quarter 2017 resultsThe information for
our first quarter 2017 results audio webcast is as follows:Date
and time: 19 April 2017 at 14.00 CETcorporate.tomtom.com/presentations.cfm
TomTom is listed at NYSE Euronext Amsterdam in the NetherlandsISIN:
NL0000387058 / Symbol: TOM2
TomTom (TOM2) 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, traffic, and navigation software. Our consumer
products include PNDs, navigation apps, sports watches and action
camera. 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: Automotive, Licensing,
Telematics and Consumer. Founded in 1991 and headquartered in Amsterdam,
we have more than 4,700 employees worldwide. 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 position and results of TomTom's activities. 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. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in
the forward-looking statements, and you should not place undue reliance
on them. Many of these risks and uncertainties relate to factors that
are beyond TomTom's ability to control or estimate precisely, such as
levels of customer spending in major economies, changes in consumer
preferences, the performance of the financial markets, the levels of
marketing and promotional expenditures by TomTom and its competitors,
costs of raw materials, employee costs, exchange-rate and interest-rate
fluctuations, changes in tax rates, changes in law, acquisitions or
disposals, the rate of technological changes, political 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 specialised research institutes, industry and dealer
panels in combination with management estimates.
The forward-looking statements contained herein speak only as of the
date they are made. We do not assume any obligation to update any public
information or forward-looking statement in this document to reflect
events or circumstances after the date of this document, except as may
be required by applicable laws.
This document contains inside information as meant in clause 7 of the
Market Abuse Regulation.
1 Earnings per fully diluted share count adjusted for
acquisition-related expenses & gains on a post-tax basis.2
Earnings per fully diluted share count adjusted for acquisition-related
expenses & gains on a post-tax basis.3 In 2016,
CAPEX was €118 million and OPEX was €557 million.
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