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    TOM2   NL0013332471

TOMTOM NV

(TOM2)
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TomTom : Q3 2021 results press release

10/14/2021 | 03:42am EST

Amsterdam

14 October 2021 | TOM2

THIRD QUARTER 2021 RESULTS

TomTom pushes forward despite reduced car production

TOMTOM'S CHIEF EXECUTIVE OFFICER, HAROLD GODDIJN

"The first nine months of 2021 have delivered both positives and negatives. Enterprise continues to perform solidly. But the recovery of Automotive has lagged expectations because industrywide semiconductor supply chain issues are hampering car production volumes.

Encouragingly, the way we engage with our customers is evolving from a traditional supplier relationship to a partner approach. This is leading to longer-term partnerships, customer intimacy, productive software engineering collaborations and better products."

OPERATIONAL SUMMARY

  • The extension of our long-standing partnership with Enterprise software company Precisely, a leading player in data management and integrity
  • The launch of the new Jeep Grand Cherokee and Jeep Compass including our full stack navigation technology
  • The launch of the new Fiat Ducato, Europe's most popular van, equipped with navigation, ADAS and connected services

FINANCIAL SUMMARY THIRD QUARTER 2021

  • Group revenue decreased by 14% (Q3 '20: €148 million)
  • Location Technology decreased by 10% (Q3 '20: €106 million)
  • Automotive operational revenue decreased by 17% to €58 million (Q3 '20: €70 million)
  • Free cash flow is an outflow of €14 million (Q3 '20: outflow of €20 million)
  • Net cash of €302 million (Q2 '21: €319 million)

KEY FIGURES

y.o.y.

y.o.y.

(€ in millions)

Q3 '21

Q3 '20

change

YTD '21

YTD '20

change

Location Technology

95.4

105.6

-10 %

303.4

290.7

4 %

Consumer

32.1

42.3

-24 %

88.4

112.1

-21 %

Revenue

127.5

147.9

-14%

391.8

402.8

-3%

Gross result

103.6

112.0

-7%

312.9

320.3

-2%

Gross margin

81%

76%

80%

80%

EBITDA

-5.3

3.9

-0.4

5.7

EBITDA margin

-4%

3%

0%

1%

Operating result (EBIT)

-22.5

-67.6

-57.8

-209.6

Operating margin

-18%

-46%

-15%

-52%

Net result

-20.8

-67.0

-55.9

-191.7

Free cash flow (FCF)

-13.5

-20.0

-33.2

-60.3

FCF as a % of revenue

-11%

-14%

-8%

-15%

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

2/9

FINANCIAL AND BUSINESS REVIEW

TOMTOM'S CHIEF FINANCIAL OFFICER, TACO TITULAER

"Location Technology revenue declined 10% compared with the previous year as semiconductor supply chain issues limited car production volumes, and therefore Automotive revenue. Enterprise performed solidly with 8% growth compared to the previous year, because of contract expansions from previous periods.

We reiterate our revenue guidance, though we anticipate full year revenue will be at the low end of the range because supply chain issues will continue to limit car production volumes. This has a direct impact on our operational revenue and thus on our cash flow. Consequently, we are lowering our full year 2021 FCF guidance as a percentage of group revenue to around 2%."

OUTLOOK 2021

Updated Outlook

Previous Outlook

Actual

(€ in millions, unless stated otherwise)

2021

2021

2020

Revenue

500 - 530

500 - 530

528

Of which Location Technology

400 - 430

400 - 430

392

FCF as % of group revenue

Around 2%

Around 5%

-5%

REVENUE

Revenue for the third quarter amounted to €127 million, a decrease of 14% year on year (Q3 '20: €148 million).

Location Technology

y.o.y.

y.o.y.

(€ in millions)

Q3 '21

Q3 '20

change

YTD '21

YTD '20

change

Automotive

52.4

65.9

-21 %

176.0

167.3

5 %

Enterprise

43.0

39.7

8 %

127.4

123.3

3 %

Revenue

95.4

105.6

-10%

303.4

290.7

4%

Automotive operational revenue is calculated as follows:

y.o.y.

y.o.y.

(€ in millions)

Q3 '21

Q3 '20

change

YTD '21

YTD '20

change

Automotive revenue

52.4

65.9

-21 %

176.0

167.3

5 %

Movement of Automotive deferred revenue

5.8

4.1

19.7

22.0

Automotive operational revenue

58.2

70.0

-17%

195.7

189.3

3%

Location Technology revenue was €95 million, a decrease of 10% year on year (Q3 '20: €106 million), resulting from a decrease in Automotive revenue.

Automotive generated revenue of €52 million in the quarter, a decrease of 21% compared with the same quarter last year (Q3 '20: €66 million). Automotive operational revenue was €58 million in the quarter, a year-on-year decrease of 17% (Q3 '20: €70 million).

Enterprise revenue increased to €43 million in Q3 '21, 8% higher than the same quarter last year (Q3 '20: €40 million) resulting mainly from higher revenue from existing customers.

Within Automotive, the new Jeep Grand Cherokee and the Jeep Compass were launched including our full stack solution of navigation software, over-the-air-updated maps and connected services. Additionally, Fiat launched its new Ducato, Europe's best-selling light commercial vehicle. The new Ducato, which is also offered as a campervan, utilizes our full stack navigation, extensive connected services and ADAS to ensure safety and avoid roads not suited for the vehicle.

One of the announcements we want to highlight in the Enterprise segment is the extension of our long-term partnership with Precisely, to which we will continue to provide map and traffic data. Precisely incorporates our data into their location and enrichment products. These products are used by insurance, telecommunications, retail and financial companies that rely on highly accurate data to make business decisions. Furthermore, we worked together with Greater Than on a proof of concept to create safer roads and assess the potential to globally predict where, when and why road accidents occur.

3/9

Consumer

y.o.y.

y.o.y.

(€ in millions)

Q3 '21

Q3 '20

change

YTD '21

YTD '20

change

Consumer products

30.6

38.4

-20 %

81.7

101.4

-19 %

Automotive hardware

1.5

3.9

-62 %

6.6

10.7

-38 %

Consumer revenue

32.1

42.3

-24%

88.4

112.1

-21%

Consumer reported revenue of €32 million for the quarter, a decrease of 24% compared with the same quarter last year (Q3 '20: €42 million).

GROSS MARGIN

The gross margin for the quarter was 81% compared with 76% in Q3 '20. The Q3 '20 gross margin was negatively impacted by the start of production of new software platforms in Automotive. The start of production triggers the release of capitalized contract costs associated with customized non recurring engineering (NRE).

OPERATING RESULT

Operating result (EBIT) in the quarter was a loss of €23 million (Q3 '20: loss of €68 million). Total operating expenses in the quarter were €126 million, a decrease of €53 million compared with the same quarter last year (Q3 '20: €180 million). The year-on-year decrease in total operating expenses, reflected in Research and development (R&D) associated with our geographic data, is mainly from lower Depreciation and amortization (D&A) as the Tele Atlas databases were fully amortized during 2020.

Excluding the impact of D&A, operating expenses increased by 1% mainly from increases in R&D associated with our Application layer, partly offset by a decline in Sales and marketing.

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

y.o.y.

y.o.y.

(€ in millions)

Q3 '21

Q3 '20

change

YTD '21

YTD '20

change

R&D - Geographic data

45.3

47.7

-5 %

130.7

138.0

-5 %

R&D - Application layer

35.5

31.2

14 %

101.4

89.4

13 %

Sales and marketing

11.0

12.4

-12 %

32.5

38.7

-16 %

General and administrative

17.2

16.9

2 %

48.7

48.5

0 %

Operating expenses excluding D&A

109.0

108.1

1%

313.2

314.6

0%

Depreciation and amortization

17.2

71.5

-76 %

57.5

215.3

-73 %

Operating expenses

126.2

179.6

-30%

370.7

529.9

-30%

FINANCIAL INCOME, EXPENSES AND INCOME TAX

Total financial result, for the quarter was an income of €2 million (Q3 '20: expense of €4 million), which consisted primarily of foreign exchange gains from the revaluation of monetary balance sheet items.

The income tax expense for the quarter was €0.5 million compared with a gain of €4 million in Q3 '20. The tax gain in Q3 '20 resulted from a release in deferred tax assets and liabilities, which was driven by the amortization of acquisition-related intangible assets.

BALANCE SHEET

Other intangible assets decreased to €81 million from €117 million at the end of 2020 mainly due to amortization of map database. Cash balances, including fixed-term deposits were €302 million at the end of the quarter (Q4 '20: €372 million). The decrease during the year is from share repurchases under the share buyback program and negative cash flow from operating activities.

At the end of the quarter, inventory was €19 million, a €7 million decrease from the end of last year, mainly due to supply constraints. Trade receivables were €130 million at the end of Q3 '21 compared with €80 million at the end of 2020. The increase is due to the seasonality of invoicing.

Current liabilities, excluding deferred revenue, were €106 million, compared with €116 million at the end of 2020. The decrease is mainly due to decreases in trade payables and provisions.

4/9

DEFERRED REVENUE

Deferred revenue increased to €433 million from €404 million at the end of 2020 due to increased deferrals in Automotive and Enterprise, partly offset by the release of deferred revenue in Consumer.

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

(€ in millions)

30 September 2021

31 December 2020

Automotive

371.4

351.7

Enterprise

54.2

34.9

Consumer

27.4

39.7

Gross deferred revenue

452.9

426.3

Less: Netting adjustment to unbilled revenue

19.7

22.6

Deferred revenue

433.2

403.7

CASH FLOW

In Q3 '21, free cash flow (FCF) was an outflow of €14 million versus an outflow of €20 million in the same quarter last year. The improved FCF reflects the timing of cash receipts from customers.

The cash flow from financing activities for the quarter was an outflow of €4 million and relates to the payment of lease liabilities. No options relating to our long-term employee incentive programs were exercised during the quarter (Q3 '20: 12 thousand).

On 30 September 2021, the Group had no outstanding bank borrowings and reported a net cash position of €302 million (Q4 '20: net cash of €372 million).

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

(€ in millions)

Q3 '21

Q3 '20

YTD '21

YTD '20

Cash flow from operating activities

-10.9

-19.0

-24.7

-55.3

Investments in property, plant and equipment

-2.6

-1.0

-8.5

-5.0

Free cash flow

-13.5

-20.0

-33.2

-60.3

- END -

5/9

CONSOLIDATED CONDENSED STATEMENT OF INCOME

Q3 '21

Q3 '20

YTD '21

YTD '20

(€ in thousands)

Unaudited

Unaudited

Unaudited

Unaudited

Revenue

127,469

147,851

391,762

402,750

Cost of sales

23,842

35,861

78,890

82,413

Gross profit

103,627

111,990

312,872

320,337

Research and development expenses - Geographic data

55,822

109,177

164,350

323,793

Research and development expenses - Application layer

37,040

35,271

107,710

100,959

Sales and marketing expenses

10,994

13,536

32,536

42,124

General and administrative expenses

22,315

21,616

66,120

63,016

Total operating expenses

126,171

179,600

370,716

529,892

Operating result

-22,544

-67,610

-57,844

-209,555

Financial result

2,213

-3,716

4,850

-1,094

Result before tax

-20,331

-71,326

-52,994

-210,649

Income tax (expense)/gain

-452

4,358

-2,884

18,914

Net result1

-20,783

-66,968

-55,878

-191,735

Earnings per share (in €):

Basic

-0.16

-0.51

-0.44

-1.47

Diluted2

-0.16

-0.51

-0.44

-1.47

1 Fully attributable to the equity holders of the parent.

  • When the net result is a loss, no additional shares from assumed conversion are taken into account as the effect would be anti-dilutive.

Disclaimer

TomTom NV published this content on 14 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2021 07:41:09 UTC.


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Harold Goddijn Chief Executive Officer
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