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    TOM2   NL0013332471

TOMTOM NV

(TOM2)
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TomTom : N.V., - SECOND QUARTER AND HALF YEAR 2021 RESULTS

07/15/2021 | 03:55am EST

Amsterdam

15 July 2021 | TOM2

SECOND QUARTER AND HALF YEAR 2021 RESULTS

TomTom's Location Technology revenue grows 10%

TOMTOM'S CHIEF EXECUTIVE OFFICER, HAROLD GODDIJN

"Looking back on the first half of 2021, our Enterprise unit showed a strong performance and while we have seen a marked improvement in Automotive, full recovery will take longer.

Our innovative technology, including ADAS features, continues to be incorporated by leading brands. We have started to see multiple carlines feature our over-the-air map updates, contributing to a better end-user experience. This success validates our decision to accelerate our online product offerings.

We are investing in opportunities to significantly improve our mapmaking platform, leading to more detailed and fresher maps to address a broader set of market segments."

OPERATIONAL SUMMARY

  • The launch of the new Nissan Qashqaifeaturing TomTom maps, including ADAS features, and real- time traffic
  • A new deal with Genesis, one of Hyundai-Kia Motor Group's premium brands, to provide maps, including ADAS features, and real-time traffic
  • A new deal providing maps and traffic data to Loop, an AI-based auto insurance provider
  • A new product launch, TomTom Virtual Horizon, an all-in-one solution for Intelligent Speed Assistance
  • The completion of our share buyback program

FINANCIAL SUMMARY SECOND QUARTER 2021

  • Group revenue increased by 8% to €133 million (Q2 '20: €124 million)
  • Location Technology revenue increased by 10% to €103 million (Q2 '20: €94 million)
  • Automotive operational revenue increased by 63% to €63 million (Q2 '20: €39 million)
  • Free cash flow is an outflow of €16 million (Q2 '20: outflow of €54 million)
  • Net cash of €319 million (Q1 '21: €352 million)

KEY FIGURES

y.o.y.

y.o.y.

(€ in millions, unless stated otherwise)

Q2 '21

Q2 '20

change

H1 '21

H1 '20

change

Location Technology

103.2

93.8

10%

208.0

185.1

12%

Consumer

29.9

29.9

0%

56.3

69.8

-19%

Revenue

133.1

123.7

8%

264.3

254.9

4%

Gross result

102.7

105.8

-3%

209.2

208.3

0%

Gross margin

77%

86%

79%

82%

EBITDA

-2.3

7.3

5.0

1.9

EBITDA margin

-2%

6%

2%

1%

Operating result (EBIT)

-21.1

-64.2

-35.3

-141.9

Operating margin

-16%

-52%

-13%

-56%

Net result

-23.6

-62.0

-35.1

-124.8

Free cash flow (FCF)

-15.8

-54.0

-19.7

-40.3

FCF as a % of revenue

-12%

-44%

-7%

-16%

This report includes the following non-GAAP measures which are further explained at the end of this report: operational revenue; gross margin; EBITDA (margin); EBIT (margin); free cash flow; net cash and gross deferred revenue.

Investor Relations

Phone | +31 20 757 5194

Email | ir@tomtom.com

www.tomtom.com

2/19

FINANCIAL AND BUSINESS REVIEW

TOMTOM'S CHIEF FINANCIAL OFFICER, TACO TITULAER

"Automotive revenue increased year-on-year, although full recovery is taking longer because of industry-wide shortages in semiconductors that are needed for car production.

During the quarter, one of our Automotive customers started production of several carlines that utilize our software. This triggered the release of customer-specific costs from our balance sheet, temporarily lowering our gross margin.

Our net cash position decreased quarter-on-quarter due to the completion of our share buyback program and the seasonality of free cash flow.

We have updated our guidance and now expect to achieve Location Technology revenue of between €400 million and €430 million and free cash flow of around 5% of group revenue. This takes into account the uncertainty within the Automotive supply chain, which is expected to lead to lower Automotive (operational) revenue and lower free cash flow."

OUTLOOK 2021

Updated Outlook

Previous Outlook

Actual

(€ in millions, unless stated otherwise)

2021

2021

2020

Revenue

500 - 530

520 - 570

528

Of which Location Technology

400 - 430

420 - 450

392

FCF as % of group revenue

Around 5%

Around 6%

-5%

REVENUE

Revenue for the second quarter amounted to €133 million, an 8% increase compared with the same quarter last year (Q2 '20: €124 million).

Location Technology

y.o.y.

y.o.y.

(€ in millions)

Q2 '21

Q2 '20

change

H1 '21

H1 '20

change

Automotive

61.0

51.6

18 %

123.6

101.4

22 %

Enterprise

42.2

42.2

0 %

84.4

83.7

1 %

Location Technology revenue

103.2

93.8

10%

208.0

185.1

12%

Segment EBITDA

-3.2

-5.5

EBITDA margin (%)

-2%

-3%

Segment EBIT

-42.8

-148.7

EBIT margin (%)

-21%

-80%

y.o.y.

y.o.y.

(€ in millions)

Q2 '21

Q2 '20

change

H1 '21

H1 '20

change

Automotive revenue

61.0

51.6

18 %

123.6

101.4

22 %

Movement of Automotive deferred revenue

2.1

-13.0

13.9

17.9

Automotive operational revenue

63.1

38.6

63%

137.5

119.3

15%

Location Technology revenue in the quarter increased by 10% to €103 million (Q2 '20: €94 million) from increases in Automotive revenue.

Automotive generated revenue of €61 million in the quarter, representing an 18% increase year on year. Automotive operational revenue increased by 63% to €63 million (Q2 '20: €39 million). The strong year-on-year growth in Automotive operational revenue came despite the supply chain constraints in the Automotive industry, as factory closures from COVID-19 lockdown restrictions impacted last year's operational revenue.

Enterprise revenue was flat year-on-year at €42 million (Q2 '20: €42 million).

Location Technology segment EBITDA for the first half of 2021 showed a year-on-year improvement as a result of higher revenue, partly offset by increased operating expenses in our application layer.

Our Automotive business announced that the new Nissan Qashqai will feature TomTom maps and connected services. TomTom will provide the new Qashqai's NissanConnect infotainment system with

3/19

an innovative over-the-air map update solution allowing drivers to enjoy TomTom's maps for navigation as well as its array of connected services. TomTom's Advanced Driver Assistance (ADAS) features will also support the new Qashqai's upgraded ProPILOT with Navi-link driver assistance.

Global luxury brand Genesis has chosen TomTom maps and real-time traffic services for their upcoming models in Europe. In addition to maps supporting the built-in navigation, TomTom's ADAS features will support smart cruise control and other advanced automated driving functions.

TomTom Virtual Horizon launched, offering an all-in-one solution from a single supplier helping automakers meet Intelligent Speed Assistance (ISA) requirements, simplifying development and accelerating go-to-market time.

Our Enterprise business announced a new multi-year agreement with Loop, the community-driven auto insurance provider. TomTom will provide Loop with its speed profiles, traffic stats and maps to help Loop customers make safer driving choices and receive insurance rates based on fair, bias-free criteria.

Enterprise revealed a new multi-year deal providing Maps API's to GreenMile, a logistics software company specializing in last-mile transportation.

Following collaborations with Hubject and Eco-Movement, we announced enhancements to our Electric Vehicle (EV) suite, including upgraded range and routing features and industry-leading data on charging points.

Consumer

y.o.y.

y.o.y.

(€ in millions)

Q2 '21

Q2 '20

change

H1 '21

H1 '20

change

Consumer products

27.7

27.9

-1 %

51.1

63.0

-19 %

Automotive hardware

2.2

2.0

11 %

5.2

6.8

-23 %

Consumer revenue

29.9

29.9

0%

56.3

69.8

-19%

Segment EBITDA

11.4

10.5

9%

EBITDA margin (%)

20%

15%

Segment EBIT

10.9

10.0

9%

EBIT margin (%)

19%

14%

Consumer revenue for the quarter was €30 million, flat compared with the same quarter last year (Q2 '20: €30 million).

Consumer segment EBITDA improved as lower operating expenses more than offset the decline in revenue.

GROSS MARGIN

The gross margin for the quarter was 77% compared with 86% in Q2 '20. The start of production of various software platforms in Automotive triggered the release of capitalized contract costs associated with platform customization (NRE), reducing the gross margin for the quarter. Adjusting for this, the normalized gross margin would have been 84%.

OPERATING RESULT

Operating result (EBIT) in the quarter was a loss of €21 million (Q2 '20: loss of €64 million). Total operating expenses in the quarter were €124 million, a decrease of €46 million compared with the same quarter last year (Q2 '20: €170 million). The decrease in operating expenses and improvement in operating result is mainly from lower amortization as the Tele Atlas databases were fully amortized in 2020.

Excluding the impact of depreciation and amortization (D&A), operating expenses increased by 7% mainly from increases in Research and development (R&D) associated with our Application layer and General and administrative expenses (G&A).

4/19

A reconciliation of Operating expenses excluding D&A is presented below:

y.o.y.

y.o.y.

(€ in millions)

Q2 '21

Q2 '20

change

H1 '21

H1 '20

change

R&D - Geographic data

44.0

44.0

0 %

85.4

90.3

-5 %

R&D - Application layer

33.6

29.9

12 %

65.8

58.3

13 %

Sales and marketing

11.3

11.3

0 %

21.5

26.2

-18 %

General and administrative

16.2

13.3

21 %

31.5

31.7

0 %

Operating expenses excluding D&A

105.0

98.5

7%

204.3

206.5

-1%

Depreciation and amortization

18.8

71.5

-74 %

40.3

143.8

-72 %

Operating expenses

123.8

170.0

-27%

244.5

350.3

-30%

FINANCIAL INCOME, EXPENSES AND INCOME TAX

Total financial result, for the quarter was an expense of €1.8 million (Q2 '20: expense of €2.5 million), consisting primarily of foreign exchange losses from the revaluation of monetary balance sheet items.

The income tax expense for the quarter was €1 million compared with a gain of €5 million in Q2 '20. The Q2 '20 tax gain was mainly from a release of deferred tax liability related to the amortization of acquisition-related intangible assets, which were fully amortized at the end of 2020.

BALANCE SHEET

Other intangible assets decreased to €92 million from €117 million at the end of 2020 primarily due to the amortization of map databases. Cash balances, including fixed-term deposits, decreased by €54 million to €319 million (Q4 '20: €372 million) from share repurchases under the share buyback program and negative cash flow from operating activities.

At the end of the quarter, inventory was €24 million, a €3 million decrease from the end of last year. Trade receivables were €65 million at the end of Q2 '21 compared with €80 million at the end of 2020, explained by lower operational revenue in the second quarter versus the the last quarter of 2020.

Current liabilities, excluding deferred revenue, were relatively flat versus the end of 2020 (Q2 '21: €112 million, Q4 '20: €116 million).

DEFERRED REVENUE

Deferred revenue is €377 million at the end of quarter built up of a gross deferral of €407 million and an unbilled netting adjustment of €30 million. The decrease in deferred revenue from Q4 '20 is driven by the release of deferred revenue in Enterprise and Consumer, partly offset by increasing deferrals in Automotive.

The following table presents the deferred revenue including the effect of netting:

(€ in millions)

30 June 2021

31 December 2020

Automotive

365.6

351.7

Enterprise

11.1

34.9

Consumer

30.3

39.7

Gross deferred revenue

407.0

426.3

Less: Netting adjustment to unbilled revenue

29.6

22.6

Deferred revenue

377.3

403.7

CASH FLOW

In Q2 '21, free cash flow (FCF) was an outflow of €16 million versus an outflow of €54 million in Q2 '20. The year-on-year improvement is mainly because of higher Automotive operational revenue.

Cash flows from investing activities includes cash flows from fixed-term deposits. Some fixed-term deposits matured during the quarter, resulting in a cash inflow as fixed deposits decreased.

The cash flow from financing activities for the quarter was an outflow of €16 million mainly from the completion of our share buyback program. During the quarter we reported an outflow of €4 million relating to lease payments offset by cash inflows from option exercises. During Q2 '21 773 thousand

5/19

options relating to our long-term employee incentive programs were exercised (Q2 '20: 205 thousand options).

On 30 June 2021, the Group had no outstanding bank borrowings and reported a net cash position of €319 million (Q4' 20: net cash of €372 million).

Free cash flow is reconciled to the cash flow statement as follows:

(€ in millions)

Q2 '21

Q2 '20

H1 '21

H1 '20

Cash flow from operating activities

-13.1

-52.1

-13.8

-36.3

Investments in property, plant and equipment

-2.7

-1.8

-5.8

-4.0

Free cash flow

-15.8

-54.0

-19.7

-40.3

SHARE BUYBACK

The share buyback program was resumed on 15 February 2021 and it concluded on 27 May 2021. During 2021, 4.3 million shares were purchased for an aggregate consideration of €33.4 million.

Since the program's initial launch in 2020, a total of 6.7 million shares were repurchased for €50 million, at an average price of €7.48 per share.

- END -

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

TomTom NV published this content on 15 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 July 2021 07:54:03 UTC.


© Publicnow 2021
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