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Research Tree provides access to ongoing research coverage, media content and regulatory news on TomTom. We currently have 11 research reports from 1 professional analysts.
TomTom reported Q4 revenues of €219.7m, down 17.3% yoy and up 1% sequentially. Consumer decreased by 40.2% yoy to €91m, as well as Licensing (€32.8m, -6.3%). The two other businesses grew by 46.9% for Automotive (€53.9m) and 1% for Telematics (€42m). The three non-legacy businesses combined grew by 13.6% to €128.7m, accounting for 59% of the total revenues. The gross margin came in at 59.4%, up 180bp yoy, while EBIT came in at €-29.5m. EPS came in at €-0.15 and adjusted EPS at €0.06. For FY17, revenues came in at €903.4m (-8.5%), with a strong decrease in Consumer (€412.5m, -26.8%) and the three non-legacy businesses up by 15.8% (€490.9m, 54% of total revenues). The gross margin came in at 62.4%, and the EBIT margin at -22.1%; reported EPS came in at €-0.87, and adjusted EPS at €0.26. For 2018, and under the new IFRS 15 & 16 rules, the company guided revenues of about €800m, a gross margin close to 70%, adjusted EPS of about €0.25 and combined opex and capex (excluding acquisitions) of about €700m. The restated adjusted EPS for FY17 was €0.18, the impact on revenues close to zero, the gross margin 63.1% and the EBIT margin -20.6%. The €50m share buy-back programme was completed on 8 December for a total of 5,384,450 shares.
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 11 research reports from 1 professional analysts.
Ethernity (ENET) designs and licenses data processing technology for the Carrier Ethernet market, so far deploying into over 500k systems globally. ENET is now working towards attracting Tier 1 Telcos and OEMs through the launch of its Smart NIC solutions, among various other initiatives. While market delays have resulted in share price volatility, we believe ENET’s market position, strong balance sheet and long-term potential to leverage a US$100bn+ market in network virtualisation are undervalued. Our scenario analysis shows the market is already pricing in a two year delay in commercialisation relative to our forecasts. We believe this is overly cautious and see a compelling balance of risk and reward.
Companies: Ethernity Networks
Steve “Woz” Wozniak, infamous co-founder of Apple, was the latest culprit to send shivers across the tech world by claiming Cybersecurity is the greatest threat the world has faced since the atom bomb. Mr Wozniak was alluding to the heightened sense of fear that recent high profile breaches have caused Cybersecurity to be put at the forefront of political, corporate and now it would appear, investor agendas. As the topic gains increasing awareness, it gives rise to a number of companies claiming to be a “thought leader” in the Cybersecurity space, holding the best IP and the best routes to market. With many companies singing from the same loss making hymn sheet it is making it ever difficult to spot the true “Spartacus” from the crowd.
Companies: BA/ BVC BLTG CHRT 9537 CNS DFX ECK EXPN GBG IGP MPAY NCC OSI SCH TERN
Q3 sales at end December were down by 3% yoy (they were down by 1% in Q2) with still a good performance by EE (+4%) but a continued sharp revenue decrease of 10% in Global Services. With no surprise, Q3 EBITDA was down by 2% yoy (vs -4% in Q2 and -2% in Q1). Note EE’s EBITDA was down 6% (but still up by 10% for the first 9m), due to higher customer investment costs in the quarter, following the launch of new, premium smartphones and watches. The cautious outlook given by the group nine months ago, due to the pressures in the UK public sector and international corporate markets (added to the uncertainty around the the nature of the UK’s future trading relationship with the EU and globally following Brexit), has been reiterated: for 2017/18, the group continues to expect revenues to be broadly flat yoy, while EBITDA is expected to be between £7.5bn and £7.6bn.
Companies: BT Group
Spirent’s results last week showed good traction from the group’s strategic growth areas (Lifecycle Service Assurance and Application Security), which combined with effective cost control, resulted in strong earnings growth and excellent cash generation. The group remains heavily H2 weighted, but we believe it is well placed to deliver a long awaited return to top-line growth going forwards. With gross margins remaining strong and management maintaining a tight grip on costs, we expect the growth to result in continued margin expansion across our forecast period. We make significant upgrades to all forecast years and increase our target price to 139p. Buy.
Companies: Spirent Communications
Gamma has reported Adjusted EBITDA 2% ahead of our estimate at £41.6 million. Overall, revenue, margins and earnings increased despite the continued decline of the traditional business in the partner channel. While the mobile proposition has been slower to become established in the channel, it is now growing and Gamma’s Cloud PBX and SIP Trunking products continued to grow ahead of the market. Gamma launched its initial fixed/mobile converged offering in December and its new high capacity national optical network project remains on schedule. The direct business announced a number of significant contracts as it produced its best year to date with the Public Sector base securing new wins. The outlook statement states that the Group is ‘in great shape for 2018 and the foreseeable future’. Gamma has also announced the appointment of new CEO Andrew Taylor who will take over from Bob Falconer following May’s AGM. We have upgraded estimates for FY 2018E and FY 2019E to reflect good growth prospects, and we introduce new FY 2020E estimates.
Companies: Gamma Communications
CyanConnode is a global leader in designing and deploying narrowband Internet of Things (IoT) solutions, principally using its RF mesh networking technology. It offers better performance for lower total cost of ownership than rivals, with easy deployment and secure IP-based machine-to-machine (M2M) communication. It has spent many years and £30m developing narrowband RF mesh networking technology and commercialising it in a world-class, award-winning narrowband IoT platform enabling M2M interface for smart-city or IoT applications, including smart metering and smart lighting. The business model currently focuses on volume hardware deployment together with recurring software licences per device, migrating to a licensing/royalty model as volumes increase and improving gross margin. Once a utility has borne the heavy cost of a network deployment, it is likely to be kept for many years and can now be upgraded for new IoT applications; leading to years of recurring high-margin licence fees.
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 DSCV AXS AMPH ALU AEP AVG CAPD CAR FENR FLO GINV GHH HDD IOF MPE RE/ RNO RBN SOLI SOM SCE TRI VANL VEL ZAM TRT
MTI Wireless Edge Ltd (MWE.L, 31p/£16.0m) Contract win and Q3 results: Further military contract (13.09.17 & 09.11.17) | Newmark Security Plc (NWT.L, 0.175p/£4.1m) Grosvenor tie up with WorkForce Software: Route to market (13.11.17) | The Character Group plc (CCT.L, 398p/£84.2m) Products feature in influential Xmas guides (08.11.17) | Eagle Eye plc (EYE.L,222.5p/£56.6m) Trading update: performance against 'win, transact, deepen' strategy (09.11.17) | Crossrider plc (CROS.L,75p/£106.4m) CMD: Ongoing transition to software subscriptions (10.11.17)
Companies: CROS EYE CCT NWT MWE
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.
Ethernity published a Trading Update this morning, highlighting key developments from H2’17 (6m to Dec’17). There are two important points to note: (1) a large licensing deal with an existing customer was modified from a design license to FPGAs, shifting an upfront payment expected in ’17 into revenues from ’19 onward; and (2) customers delayed purchases under two existing contracts, postponing the supply of products from ‘17 into ‘18.
Companies: Ethernity Networks
In terms of service revenues, Q3 was a little bit disappointing with organic growth at constant change of 1.1%, slightly lower than that recorded in the previous quarter (1.3% in Q2). European growth moderated to 0.3% or 1.9% excluding the impacts of the roaming regulation and the handset financing in the UK (these growths are indeed 0.5% below the Q2 numbers). Note, however, in parallel, growth in AMAP was still strong at +6.8% during the quarter (vs 6.2% in Q2). Note also that, as usual, reported numbers exclude the results of Vodafone Netherlands following the disposal of its consumer fixed business and subsequent merger into VodafoneZiggo (this has an impact of 5.3% on the European revenues).
Companies: Vodafone Group
Amino’s full year results earlier this week showed continued progress, with high quality software and services revenue continuing to increase within the mix. FY’18 has started positively, with two new contract wins post the period end and a strong order backlog and pipeline. We continue to believe that the group’s evolving product portfolio is well aligned with industry trends and the increasing level of recurring revenue should drive a re-rating over time. With multiple medium term growth drivers, and significant balance sheet strength to augment organic growth with earnings enhancing acquisitions, we retain our Buy recommendation and 243p target price.
Companies: Amino Technologies