Q1 20: Automotive industry outlook is darkening, dragging TomTom in its wake
Q1 20 earnings came in below consensus expectations on the back of a sharper hit from COVID-19, mostly driven by the lower Automotive activities. Q2 is expected to suffer the most and, while the company had already withdrawn its FY20 guidance, FCF is expected to be negative in 2020. Hopefully, the strong balance sheet of the company might help it to cope with this crisis.
15 Apr 20
Q4: Good commercial momentum in Location Technology
Q4 publication was a mix of contrasting moving parts, with an underperformance for Consumer while Location Technology, fuelled by Enterprise, held back. The commercial momentum was also strong for the latter. The company missed the consensus at the EBTIDA level, on the back of higher investment to support its technology.
05 Feb 20
Good traction in the Location technology offer
TomTom’s Q3 release is of good quality, in our view, underpinning the good traction of its Location technology offer. The lower revenue guidance for FY19 has been triggered by accounting treatments, therefore, the cash generation assumption still holds true.
16 Oct 19
Better perspectives, starting next decade
Tomtom has held its Capital Markets Day with a focus on its key Location Technological products and services. In the short term, no major disruptions are expected, especially in a cautious environment for OEMs. However, from 2021 onward, the company is a bit more bullish than anticipated, thanks to a broader OEM adoption of connectivity and ADAS systems, increasing the need for services.
25 Sep 19
Riding the Location technology momentum
Tomtom did not disappoint the market and released another set of a strong results. This quarter has also been helped by an “unexpected” GPS system bug that pulled in replacement sales in its Consumer segment. On the back of these better results, the company has upgraded its revenue guidance for the current year.
18 Jul 19
Call option on the mapping service
Key fact for Q4 Revenues reached €218m, flat yoy and above market expectations Gross margin was 70% vs 59% in Q4 17 Total EBITDA was €44m, up 16% yoy and in line with expectations Key facts for FY 18 Revenues were €861m, down 5% yoy, in line with the consensus Gross margin reached 71% (vs 63% in FY 17) to €610m, up 7% yoy Total EBITDA was €214m, up 35% yoy (€158m in FY 17) Net profit reached €44.8m compared to €-194.4m in 2017 Adjusted EPS was €0.36 per share Cash generation is up, FCF was €145m vs €68.6m in 2017 Net cash position was €252m vs €121m in 2017 Guidance TomTom sees its FY19 revenues reaching €675m (flat yoy, pro forma the Telematics sales). Slight increase in gross margin to at least 70% Sharp opex increase to €555m vs €472m in 2018 (excluding Telematics) Capex should reach c. €55m Adjusted EPS seen at €0.15
06 Feb 19
Strong performance eclipsed by contract loss
The company published a strong Q3, confirming the good trend seen since the beginning of the year, and revised upward its guidance for this year. For Q3, we see a moderate increase in total revenue (+1% yoy) thanks to strong growth in the Automotive & Enterprise activity (+15% yoy). However, the still declining Consumer activity (i.e. Personal navigation assistant) offset the top-line with a drop of 14% in revenue. The Telematics activity also grew by 10% yoy, driven by an increasing base of monthly subscribers (+10%) and steady revenue per subscription. One of the key points came from the changing revenue mix which allows better margins and we see a sharp increase in both EBIT (positive with €23.8m vs €-0.4m last year) and EBITDA (+76% increase yoyto €62m). Cash generation was also strong with a CFO at €56.4m compared to €48.4m for Q3 17 and free cash flow stood at €28.5m (vs €23.5m in Q3 17). The net result came in at €17.2m vs €-1.2m last year. Tomtom now expects revenues for FY18 to be close to €850m vs $825m previously, and an adjusted EPS of around €0.35 vs €0.30 previously. At the same time, the company announced the loss of a contract signed with Volvo in July 2016. This contract, worth c.€250m, was due to begin in 2019 and would have provided location and navigation content services.
16 Oct 18
Tomtom upgrades its FY18 guidance but remains dependent on declining Consumer activity
The revenue trend observed in Q1 continues in Q2 (-9% to €231.4m), while H1 revenues are also down 9% to €423.2m. The EBITDA margin, on the contrary, is up to 27% vs 20% in Q2 17, while the operating margin reached 11% vs -61% in Q2 17. Finally, the adjusted net result for H1 18 reached €34.3m, up from €0.2m in H1 17.
17 Jul 18
Confirmed guidance following solid profitability improvement
Tomtom reported quite good Q1 results confirming the trend observed in recent quarters in its activities. Also, the proportion of revenues linked to data, software and services has continued to increase, pulling upward both the gross and EBITDA margins. Finally, thanks to a solid financial result, the net result reached €6.4m for Q1 18. The group has consequently confirmed its guidance for FY18, expecting revenues of about €800m and adjusted EPS of about €0.25.
17 Apr 18
Outlook disappointing at first, actual impact limited and long-term thesis intact
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.
06 Feb 18
When a downgrade doesn't come as a negative announcement
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.
20 Oct 17
Growth progressing in non-legacy
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.
19 Jul 17
Strong performance in the non-legacy business
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.
20 Apr 17
Another last year of transition?
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.
08 Feb 17
Nvidia opens doors, weak PNDs slam them
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.
21 Oct 16
Positive signals in Automotive and profitability
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).
19 Jul 16
Better than expected gross margin, but rather high opex
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.
19 Apr 16
A deceptive bottom-line and very conservative guidance for 2016
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.
09 Feb 16
Accelerating growth, but bottom-line still suffering from investments and FX effects
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.
20 Oct 15
Solid top-line but gross margin impacted by stronger dollar
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.
21 Jul 15