Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on TomTom. We currently have 10 research reports from 1 professional analysts.
TomTom reported Q3 revenues of €217.6m, down 9.1% yoy and 14.1% sequentially. Consumer decreased by 29.1% yoy to €97.2m, as well as Licensing (€33.8m, -1.7%). The two other businesses grew by 50.8% for Automotive (€47.2m) and 7.9% for Telematics (€39.4m). The three non-legacy businesses combined grew by 17.8% to €120.4m, accounting for 55% of the business. The gross margin came in at 64.6%, up 420bp yoy, while EBIT came in at -€5.9m. EPS came in at €-0.02 and adjusted EPS at €0.08. The company updated its guidance for FY17: the target for adjusted EPS remains at around €0.25, but revenues are now expected at about €900m due to the reorganisation in Consumer Sport. Capex and opex are also expected to grow marginally compared to 2016 (vs. modestly). Concerning the €50m share buy-back programme, 63,797 shares worth €6.1m have been acquired during the quarter.
TomTom reported Q2 revenues of €253.4m, down 4.4% yoy and up 19.1% sequentially. Consumer decreased by 19.7% yoy to €126.3m, representing the only down-mover. The three other businesses combined grew by 17.7% to €127.1m, with in decreasing order Automotive (€48.4m, +38.7% yoy), Licensing (€38.6m, +16.3%) and Telematics (€40.1m, +0.5%). The gross margin came in at 63.4%, up 860bp yoy, while the EBIT was strongly negative (€-159.5m) due to a €168.7m impairment charge related to Consumer. EPS came in at €-0.68 and adjusted EPS at €0.09. The company re-iterated its guidance for FY17 with adjusted EPS of around €0.25, but warned that the revenues would come in at the lower end of the previously communicated €925-950m range. The non-legacy business is expected to grow by 15%, while strategic options are being looked at for the Sport business. A €50m share buy-back was also announced.
TomTom reported Q1 revenues of €212.7m, down 2% yoy and 19.9% sequentially. Consumer decreased by 16% yoy to €98m, representing the main down-mover. The three other businesses combined grew by 14.1% to €114.7m, with in decreasing order Automotive (€41.1m, +38.4% yoy), Telematics (€40.6m, +9.4%) and Licensing (€33m, -2.1%). The gross margin came in at 62.2%, up 540bp yoy, while the EBIT margin lost 30bp to -2.3% (-€4.8m). EPS came in at €-0.02 and adjusted EPS at €0.03. The company re-iterated its guidance for FY17 with adjusted EPS of around €0.25 and revenues of between €1,025 and €1,050m.
TomTom reported Q4 revenues of €265.6m, up 11% sequentially but down 6% yoy. Consumer accounted for most of the decrease (€152.3m, -13.4%), while Licensing was also down double-digit (€35m, -10.9%). Telematics and Automotive were up by double-digit (respectively €41.6m and +12.4%, and €36.7m and +21.1%). The gross margin came in at 57.6% (up 840bp yoy), for a negative EBIT margin of 0.2% (down 30bp yoy). For FY16, revenues reached €987.2m, down 1.9%. Consumer displayed here too the biggest decrease (€563.2m, -9.7%) followed by Licensing (€136.3m, -4.1%). Telematics and Automotive were also up by double-digit (respectively €155.1m and +14.9%, and €132.9m and +25.2%). Telematics almost reached the 700k subscribers mark (696k), corresponding to a 15% increase over FY15. The gross margin came in at 57.4%, up 590bp yoy, and the EBIT margin at 0.9%, up 80bp yoy, with a strong negative EBIT in Automotive (-€33.9m) offset by a strong performance in Telematics (€44.5m). The FY16 adjusted EPS came in at €0.23 (€0.21 in FY15). For FY17, the company is expecting revenues to decrease to a range of €925-950m, with a net decline in Consumer partially offset by a 10% combined growth in the rest of the business. Adjusted EPS is expected to reach €.25, while capex and opex are expected to grow modestly.
TomTom reported Q3 revenues of €239.3m, down 5.9% yoy and 9.8% sequentially. Consumer decreased by 15% yoy to €137.1m, representing the biggest down-mover. Automotive’s top-line grew by 20.4% to €31.3m, Telematics by 14.8% to €36.5m, while Licensing showed some weakness (€34.4m, -2.3%). The gross margin came in at 60.4%, up 730bp yoy, while the EBIT margin lost 150bp to 0.4% (€1m). EPS came in at zero and adjusted EPS at €0.05. Despite the weak market conditions in Consumer, the company re-iterated its adjusted EPS guidance for FY16 of around €0.23, while the revenues are now estimated to be around €980m, down from €1,050m.
TomTom reported Q2 revenues of €265.2m, flat yoy (+0.2%) and up 22.2% sequentially after the usual seasonal dip of Q1. Consumer decreased by 4.7% yoy to €157.2m, while the biggest down mover was Licensing with a 14% decrease at €33.2m. Automotive’s top-line growth accelerated by 34.2% to €34.9m, while Telematics decelerated but remained strongly positive at +13.7% (€39.9m).
TomTom reported Q1 revenues of €217.2m, up 5.7% yoy and down 23.2% sequentially due to the traditional seasonality. Consumer decreased by 4.1% yoy at €116.6m, while similarly to the previous quarter all other businesses displayed double-digit growth: 25.8% for Automotive (€29.7m), 16.2% for Licensing (€33.7m) and 19.3% for Telematics (€37.1m). The gross margin came in at 56.8%, up 330bp yoy, but a surge in opex led to a negative EBIT margin of -2% (€-4.3m); no divisional profitability was provided this quarter. In the end, after the income tax gain, EPS came in at €0.02 and adjusted EPS at €0.03. The company re-iterated its guidance for FY16, that is to say revenue of €1,050m and adjusted EPS of around €0.23.
TomTom reported Q4 revenues of €282.5m, up 9.3% vs. the previous year. Consumer accounted for the majority of the revenues with €176m, but saw its yoy growth slowing down to 2.2%. All the other segments grew by double-digit figures: 28.4% for Automotive (€30.3m), 24.4% for Licensing (€39m) and 19% for Telematics (€37m). For the full year 2015, revenues reached €1,007m, up 5.9%. Consumer accounted for most of the revenues and displayed flattish growth (€624m, +0.7%), due to lower PND revenues. Automotive was down 3.3% (€106m), due to the phasing out of legacy products. Licensing (€142m) and Telematics (€135m) were up by double-digit figures, respectively 27.3% and 22.5%. Telematics reached the 605,000 subscribers mark, up 30% from the 464,000 2014 figure, due to dynamic organic growth and the acquisition of the Polish fleet management solutions provider Finder in December, which added over 60,000 vehicles. The gross margin for Q4 came in at 49.2%, down 220bp yoy and 390bp sequentially, mostly due to an €11m impairment charge in Automotive. For the full year, the gross margin decreased to 51.5% from 55.1%, due to strong negative currency effects (at constant exchange rates, it would have reached 56%). The EBIT margin for the full year was nil, hampered by the Automotive business (-32%) but offset by Telematics (29.4%), while Consumer and Licensing are neutral. For the full year 2016, the company is expecting revenues to grow to c. €1,050m, and adjusted EPS to increase by 10%, with higher investments (opex and capex) in core technologies, especially in Automotive.
TomTom reported Q3 revenues of €254m, up 8.4% vs. the previous year. Consumer accounted as usual for most of the revenues, coming in at €161m for the quarter, representing a 5.4% increase yoy. The segment was driven by a favourable product mix as well as resilient growth in PND. Automotive reached €26m, flat yoy, vs. a 17.3% decrease in H1. The partnerships with Fiat-Chrysler were extended, as well as with South Korean’s SsangYong. A partnership with Bosch has been announced to collaborate in the field of mapping technology for autonomous vehicles. Licensing and Telematics reached €35.2m and €31.8m, growing by respectively 30.4% and 13.6%. In Telematics, the user base increased by 26% vs. the previous year, reaching 522,000 subscribers. The gross margin reached 53%, down from 57% last year, mainly due to the weakening of the euro vs. the dollar, EBITDA decreased by 20% at €33m, while EBIT decreased by 37% at €4.9m, corresponding to a 1.9% operating margin. With similar exchange rates, the gross margin would have reached 58% and the operating margin 6%. The company reiterated its guidance for the year. Revenues are still expected to reach around €1bn, with adjusted EPS at around €0.20. Both capex and opex should be slightly higher vs. the previous year.
Revenues grew 5% to €265m, up from: €252m in Q2 14 (3% revenue growth in H1 15 to €470m, up from €457m in H1 14). Consumer sales fell by 2% to €164.9m, driven by a single-digit decline of PND and related content & services revenue, offset by a mid double-digit increase in sports revenue. Automotive saw a strong 15% decline as anticipated to €26m due to the draw down on certain Automotive Hardware contracts which were linked, however TomTom continued to book new business at levels which will support a growing business from next year onwards. Telematics continued to grow strongly in Q2 (up 37% and 30% over H1) with sales reaching €35m as TomTom passed 500k subscriptions. Finally, Licensing also grew by 42% over the course of Q2 to €35.1m (€25m in Q2 14) or 27% over H1 15 (€67m in revenues) reflecting the improved deal with Apple and the signing of a deal with Telefonica and Mozilla to supply Maps Online and Nav Online to mobiles running Firefox OS. TomTom’s gross margin fell to 51% from 56% in Q2 14, impacted by 5ppts by the stronger dollar. As a result, EBITDA fell to €28m (Q2 14: €37m) and TomTom's net result came in at €3m, down from €9m in Q2 14. At the end of Q2, TomTom maintains a very healthy net cash position of €77m. The guidance for revenue and adjusted EPS for the full year is maintained. TomTom continues to expect revenues to grow to around €1bn, and adjusted EPS is expected to come in at c. €0.20. TomTom does however now expect to increase its investments moderately in terms of both capex and opex to develop further its core technologies. This is mostly as a result of the stronger dollar.
Research Tree provides access to ongoing research coverage, media content and regulatory news on TomTom. We currently have 10 research reports from 1 professional analysts.
A look back at our 2017 ideas In aggregate our analyst picks outperformed the FTSE All Share last year by 9% and the cumulative performance of our portfolio over 6 years would have given a total return of 300% (almost double the return on the FTSE All Share). In addition, many of our top-down themes played out very well such as our focus on secular growth in Tech, Life Sciences, Healthcare and Financials, an increase in M&A, our cautious stance on the Consumer and especially our bet on continued strength in the Industrials last year and solid growth in the global economy. What does 2018 have in store? We continue to play ongoing secular growth themes in Tech, Life Sciences, Healthcare and Financials. In addition, we tap into domestic areas of cyclical strength such as regional construction and house building, plus self-help initiatives and potential market share gains. We maintain a favourable view of Industrials given the global economic backdrop but think this could moderate during the year. Other changes of nuance include the potential for a better H2 in the Consumer sectors, which remain under pressure for now, and a better outlook in Media from a mini-quadrennial year in 2018.
Companies: AMO AVG CBP CVSG DNLM EKF FENR IOM SAA GLE PURI SFR PGIT PURI SFR SOG VRP
Delivery on one of the major project orders announced last year has been delayed until H1 2018. Management had been expecting deployment to commence prior to the Y/E but due to external circumstances the customer has yet to call down the modules. However, it has assured CyanConnode that it remains committed to using its technology in this and other major projects. This delay has implications for our FY 2017 sales forecasts which relied on it in H2; we are forced to cut expectations from £2.1m to £1.2m and while this revenue is now set for FY 2018, we anticipate the knock-on delay to push revenue on into FY 2019, so we leave current year sales forecast unchanged at £10.0m. Given the scale, bottom-line impact is relatively small; we increase FY 2017 adj. LBT by 5% to £10.4m and cost control should actually see FY 2018 loss reduced slightly to £7.0m.
We estimate that SigmaRoc’s recently announced acquisition of pre-cast concrete products business Topcrete should be earnings and margin enhancing to the group this year, with further benefits in 2018. Assuming Topcrete continues to perform at past levels (conservative – SigmaRoc sees scope for better optimising certain commercial aspects of the business), we estimate it will lift group-level EBITDA by 7% compared with our pre-deal estimate for the current year, and by 37% for 2018. EBITDA margins could rise from 20% to 23%. After adjusting for positive working capital within the business, the acquisition price equates to just 6x incremental EBITDA – excellent value given SigmaRoc’s pre-deal market EV/EBITDA multiple of 10x, and illustrating the merits of its niche-asset buy-and-build growth strategy. Adjusting our EV estimate for debt taken on to fund the transaction, SigmaRoc is now trading at just 8.7x our revised 2018 EBITDA estimate for the enlarged group. This represents an attractive valuation relative to the peer-group median of 10.4x, notwithstanding the potential for more earnings growth as the group further rolls out its deal pipeline.
BCA Marketplace and stevia sweeteners developer Purecircle are the latest former AIM companies to be moving into the FTSE 250 index. The changes take place on 18 December and will take the number of former AIM companies in the FTSE 250 to 20 – although Booker and Paysafe are being taken over.
Companies: CFHL TRAK BMN BXP TRCS SND
Amino has announced the deployment of an end-to-end multiscreen entertainment service with Dutch multi-service (cable TV) operator Delta. The release is light on detail as to the contract size and potential value to Amino, although management confirm the deal will not have a material incremental impact on current-year revenues. We therefore make no revisions to forecasts following the announcement, but believe the contract represents another strong endorsement of the MOVE TV platform. It also demonstrates Amino’s capability to leverage existing customer relationships and also its ability to assist customers migrate existing cableTV subscriber bases to IP-based multiscreen service delivery.
Companies: Amino Technologies
Spirent has released its Q3 trading update showing a number of key contract wins and a continued focus on cost management. Revenue for the 9 months to September ’17 was $326.1m versus $324.4m at the same point last year, with adjusted EBIT significantly higher at $33.4m (2016: $20.6m). Net cash at the end of Q3 was $115.6m. We leave our forecasts and target price methodology unchanged meaning our DCF derived TP remains 116p. After the recent share price weakness this results in our recommendation moving to Buy. Execution remains key in the crucial Q4 period, however with a safe yield of 3.2% and a return to high double-digit EBIT margins possible over the medium term, we believe the shares are attractive.
Companies: Spirent Communications
TalkTalk (TALK.L) has reported Q3-17 trading in-line with market expectations, but importantly, the outlook for Q4 and beyond has improved. Further, retiring CEO Dido Harding took the unusual step of confirming that the H2-17 dividend payment of 10.58p per share will be paid. This is unquestionably positive and based on the H2-17 dividend alone, the stock is now yielding 6.4%. The dividend outlook for FY-18 was not discussed however, and we believe that a 50% dividend cut is now factored into the share price. This may not happen, or any dividend cut could be less than 50%. Thus with the management change, a slightly brighter business outlook and a lower dividend for next year factored in, we see more upside potential than downside risk. Buy.
Companies: Talktalk Telecom Group
BlackRock Smaller Companies Trust is considering ending the restriction on AIM investment in its portfolio. Currently, the trust is not allowed to invest more than 40% of its portfolio value in AIM-quoted companies. If the required consents and regulatory approvals are received, a resolution may be put forward at the annual general meeting in June. Vets practices owner CVS is currently the largest investment in the trust’s portfolio and wound management firm Advanced Medical Solutions is also in the top ten. The rest of the top ten are fully listed companies. The best performer in February was telematics equipment and services provider Quartix. BlackRock is considering this change at a time when the Small and Mid-Cap Investors Survey 2017 suggests that there is a positive change in attitude towards AIM. Overall, investors believe that AIM is better than it has ever been. The average size of companies continues to rise and this is taken as an indication of maturity but there is still concern about the lower end of the market. There is little pressure on AIM companies to move to the Main Market even if they are relatively large for AIM. There are currently eight companies on AIM valued at more than £1bn, accounting for around one-sixth of the total market value of AIM.
Companies: MANX INS FRAN ACSO NAH GMAA TCM
TalkTalk (TALK.L) reported its FY-17 results with a surprise cut of the final dividend to 5.00p, even after 10.58p was confirmed only two months ago by former CEO Dido Harding. Clearly new CEO Tristia Harrison and new Executive Chairman Charles Dunstone decided that a fresh start was necessary. The FY- 17 results themselves were disappointing, but Q4 suggested a better trend in the customer base, with some 22,000 positive net adds (customers) in Retail and Wholesale. Emphasis is now on growing the business, followed by improving cash generation and then profitability, in that order. We wait to see evidence of delivery and with the stock trading on some 7.9x FY-18 EV/EBITDA, valuation is full. We thus downgrade our recommendation to Hold (Buy) with target price of 155p (205p), based on 7.5x FY-18 EV/EBITDA.
Companies: Talktalk Telecom Group
Gamma has reported strong interim results with near 10% revenue growth and adjusted EBITDA at half our annual estimate for FY 2017E – the latter reflecting good profitability in both the Direct business and the growth products in the Indirect business. Adjusted EPS increased by 15% and the Group has declared a 12% interim dividend increase. Superior performance from Cloud PBX and SIP Trunking continues and growth in data products was also c.20%. The direct business reported a pleasing number of key new business wins and the indirect business saw Channel Partner numbers increase again. Gamma saw increased data traffic on its new mobile network and the Group remains on track to launch its converged fixed/mobile product later in 2017. The outlook statement is positively enthusiastic. At this stage, we make modest increases to our FY 2017E estimates to reflect the strong interim performance and prospects for the second half. We think the balance of risk remains on the upside. Our estimates for FY 2018E and FY 2019E also increase to reflect the adjustments to the current financial year.
Companies: Gamma Communications
SigmaRoc has delivered strong H1 2017 results, its maiden set of financials to incorporate its Ronez vertically-integrated aggregates business on the Channel Islands which was acquired at the turn of the year. Operational level EBITDA from Ronez was up by 53% vs H1 2016, reflecting improved trading conditions on Jersey but also efficiencies implemented by SigmaRoc since taking control of the business. Assuming no material downturn in trading conditions in H2, Ronez looks on course to meet our forecast operational EBITDA of c£6m (vs £5m in 2016). This would translate to £5m EBITDA at the corporate level, putting SigmaRoc on a 2017 EV/EBITDA multiple of just under 10x. The latter trails the construction materials peer group and, in our view, undervalues SigmaRoc’s above-average growth potential. Having successfully integrated Ronez, management is focused on the next stage of its niche asset ‘buy-and-build’ strategy – twelve opportunities have been reviewed to date, some now in exclusivity. Executing on these opportunities should be a significant catalyst for share price appreciation going forward.
Highlights this quarter: Economics: Generally, the data points to modest growth continuing, with a more positive trend in PMI surveys suggesting decent m manufacturing momentum over the next six months. Currency weakness continues to be a double-edged sword for U K manufacturers, with exporters gaining competitiveness while input prices have risen. There has recently been a divergence of sterling’s performance against the euro and the USD. Those in commodity or competitive product areas may well have seen margin erosion, while many in intermediary goods have already passed on price increases to their customers. With low unemployment, the prospect of tighter labour markets post-Brexit and public sector pay caps starting to come off also signals the potential for some labour inflation, long absent from the UK industrial scene. Topic of the quarter: We believe that powerful macro and sectoral pressures will drive further significant changes to the manufacturing supply chain over the next few years. We investigate some of these pressures, with the move to outsource suppliers to low- cost centres, like China, now seeing a slight reverse flow with some restoring to shorten complex and often inflexible supply chains. We see systems technology facilitating greater supply-chain control and efficiency. Brexit will present challenges to the UK supply chain with price and time to market barriers likely to rise, presenting challenges to the UK’s highly integrated and time-sensitive supply chain. Slick distribution infrastructure and greater information sharing with suppliers are likely to prove winning strategies in optimising logistics and gaining stock efficiencies. Sector valuation: The industrials sector has continued to exhibit strength, with small-cap industrials outperforming by 2 % on last year and larger cap industrials by 17%. Currency and improving economic data have been a positive for the sector. While some other sectors have seen a pick-up in profit warnings over recent months, industrial technology companies have announced generally positive or in-line trading updates that have helped to drive the small-cap Industrials to an EV EBITDA of 8.4x and a P/E of 16.7x with the traditional small-cap discount narrowing.
Companies: SIXH ACL AXS AMPH ALU AEP AVG CAPD CAR FENR FLO RAD GHH HDD IOF MPE RE/ RNO RBN SOLI SOM SCE TRI VANL VEL ZAM TRT
This quarter we use finnCap’s Slide Rule to provide both top-down and bottom-up analysis of the UK’s Technology and Telecoms sectors. Our findings are very reassuring: the Tech sector scores the best (across all sectors) when considering Growth and Quality – Taptica*, Frontier Developments* and dotDigital* in particular stand out on these metrics. Given these attractive characteristics and growth prospects, the Tech sector is unsurprisingly one of the most expensive – currently trading at 17.2x FY1 EV/EBIT and 23.8x FY1 P/E, versus 15.0x and 18.5x respectively for the wider market. Despite valuations appearing high, we believe there are value opportunities. For example, Proactis* features in finnCap’s QVGM+ portfolio (ranked 17/462) – the company offers attractive organic and inorganic growth, with earnings forecast to grow by 26% CAGR over the next two years, but despite this, only trades on 15x FY1 earnings and offers 8% FCF yield in FY2.
Companies: 7DIG ALT AMO ARTA BOTB BLTG CTP CFHL CYAN ISL DTC DOTD ELCO ESV FDEV GBG IDEA IDOX IMTK IGP IOM KBT KCOM KWS LRM MAI MMX NASA NET ONEV PHD QTX QXT RCN 932 SSY SEE SIM SPE SRT STR TAP TAX TEP TPOP TRAK UNG VIP ZOO
Telekom Austria, now rebranded A1 Telekom Austria Group, has announced the call and redemption of the €600m hybrid bonds issued in 2013. According to the company, the hybrid bonds will be redeemed at their nominal value plus all interest on February 1st, 2018. This is also the first call date. The hybrid bonds had a coupon of 5.625% and reached a peak price of 109.344% on 2nd March 2015. Since February 2017, the price has steadily declined to 100%.
Companies: Telekom Austria