TomTom Reports First Quarter 2013 Results

Change percentages are based on non-rounded figures


TomTom generated €202 million revenue for the quarter, a decrease of 13% compared to the same quarter last year (Q1 2012: €233 million).

The revenue of the Consumer business unit over the past quarter amounted to €101 million which is a €24 million decrease compared to the same quarter of last year (Q1 2012: €126 million). The year on year decrease is the result of the declining PND demand partially compensated by an increase in fitness revenue.

The PND market size in Europe in the quarter was 1.7 million units compared to 2.1 million units in the same quarter of last year. The North American market size was 1.1 million units compared to 1.5 million units last year. Our market share in Europe grew by 5 percentage points year on year to 51%. In North America our market share decreased by 1 percentage point year on year to 23%.

Automotive revenue decreased by €7.7 million or 13% year on year to €51 million (Q1 2012: €58 million). The decline resulted mainly from lower new car sales by our Automotive customers.

Licensing revenue declined by €2.6 million or 8% year on year to €30 million (Q1 2012: €33 million). The year on year decrease results from lower Consumer licensing sales.

Business Solutions revenue increased by €3.4 million or 21% year on year to €19 million (Q1 2012: €16 million) driven by both higher hardware and subscriptions revenue.

Hardware revenue across the group was €111 million, a decrease of 18% year on year (Q1 2012: €135 million).

Content & Services revenue was €91 million for the quarter compared to €98 million in Q1 2012, a decrease of 7%. Lower content and services revenue from our Consumer segment was the main contributor to the decrease. Content & Services revenue represented 45% of total revenue (Q1 2012: 42%).

Gross margin

The gross margin for the group was 56% compared to 49% in the same quarter last year. The gross result in the previous year was impacted by one-off provision for a malfunctioning GPS chip. Excluding this one-off the gross margin in the first quarter of 2012 would have been 55%.

Operating expenses

Total operating expenses for the quarter amounted to €112 million, a decrease of €1.8 million, or 2% compared to the same quarter of last year (Q1 2012: €114 million). The year on year decrease is explained by lower amortisation charges for technology and databases (-11%) as well as lower marketing expenses (-15%) offset by an increase in selling, general and administrative (SG&A) expenditures (+7%).

R&D expenses for the quarter were flat compared to the first quarter of last year at €38 million (Q1 2012: €38 million).

Lower amortisation of technology and databases for the quarter is explained by the fact that some intangibles were fully written off during the prior year.

Marketing expenses decreased by €1.9 million year over year to €11 million.

SG&A expenses for the quarter amounted to €43 million, representing a year on year increase of €2.9 million (Q1 2012: €40 million).

Financial results

The total interest charge for the quarter was €1.1 million (Q1 2012: €3.5 million). Interest expense on the term loan and revolving credit facility for the quarter amounted to €0.9 million. The amortisation of the transaction costs related to the facility amounted to €0.6 million. The interest expense was partially offset by interest income of €0.4 million on the cash balances.

Net result and adjusted EPS

The net result was -€2.3 million compared to -€1.5 million in the prior year, which represents adjusted earnings per share of €0.03 and €0.04 respectively.

Debt financing

On 31 March 2013, the carrying value of our borrowings amounted to €173 million, a decrease of €74 million compared to the previous quarter because we made an early repayment of €75 million on our borrowings (Q4 2012: €247 million). Excluding transaction costs, which are netted against the borrowings, our outstanding borrowings at the end of the quarter amounted to €175 million (Q4 2012: €250 million).

Net debt as of 31 March 2013 decreased to €14 million from €86 million at the end of the previous year. Net debt is the sum of the borrowings (€175 million), minus cash and cash equivalents at the end of the period (€161 million).

The net debt to the last twelve months EBITDA ratio was 0.1 times compared to 0.5 at year end 2012.

Balance sheet

As at the end of Q1 2013, accounts receivable plus other receivables totalled €172 million. This is an increase of €16 million year on year and a decrease of €96 million sequentially, the latter follows from a €70 million tax receipt. The inventory level was €53 million, a decrease of €2.0 million year on year and an increase of €9.0 million in comparison to the previous quarter. Cash and cash equivalents at the end of the quarter were €161 million.

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