1 Earnings per fully diluted share count adjusted for acquisition-related amortisation & gain on a post-tax basis.
TomTom's Chief Executive Officer, Harold Goddijn
“Strong growth in Consumer Sports could not offset PND decline we have seen this quarter.
In Automotive, we continue to make good progress in delivering our connected navigation system components to existing and new customers. Our order intake for this year so far is above €200 million, in line with our expectations; TomTom has won the largest deal available to the market this year. Together with orders secured earlier, this will support continued growth in our Automotive business.
This quarter we announced a partnership with NVIDIA to create a cloud-to-car mapping system for High Definition maps for self-driving cars. This collaboration is an important step for TomTom.
Our revenue mix is shifting towards high gross margin, recurring data, software & services income.”
Outlook 2016 updated
As previously announced on 13 October 2016, we are updating our guidance.
Consumer PND markets have been weak over recent periods.
The European PND market is experiencing a faster rate of unit decline compared with what we have seen in the first half of the year and we now expect this market in units to be down by about -20% for the year as a whole. The rate of unit decline of the North American PND market is broadly in line with what we have seen in the first half of the year and for the year as a whole is expected to be around -23%.
The Automotive, Licensing, and Telematics businesses are developing in line with expectations. Hardware revenues are lower than planned because of weak PND sales; data, software & services revenue reported growth, which resulted in a strong gross margin.
As a result of these developments, we now expect full year group revenue of around €980 million, down from previous guidance of around €1,050 million. Outlook for adjusted EPS1 of around €0.23 is unchanged.
We expect the level of investment (both CAPEX and OPEX) in our core technologies to be higher than in 20152. In particular, we are investing in advanced content and software for the automotive industry and in our new map-making platform.
Financial and business review
Revenue for the third quarter amounted to €239 million, 6% lower compared with the same quarter last year (Q3 '15: €254 million). This decline was mainly driven by lower Consumer PND revenue, which was only partly offset by revenue growth in Consumer Sport, Automotive and Telematics. Licensing showed relatively flat revenue compared to last year. Our gross margin equalled to 60% in the third quarter (Q3 '15: 53%). The net result for the quarter was a gain of €0.6 million, which translates to adjusted EPS¹ of €0.05.
2 In 2015 CAPEX was €108 million (excluding acquisitions) and OPEX was €518 million
Consumer
| (€ in millions, unless stated otherwise) | Q3 '16 | Q3 '15 | y.o.y. change | YTD '16 | YTD '15 | y.o.y. change | ||||||
| Consumer products | 126.2 | 146.0 | -14% | 361.4 | 394.5 | -8% | ||||||
| Automotive hardware | 10.9 | 15.2 | -28% | 49.5 | 53.2 | -7% | ||||||
| Total Consumer revenue | 137.1 | 161.2 | -15% | 410.9 | 447.7 | -8% | ||||||
| Key PND market data | ||||||||||||
|
Europe 3 |
||||||||||||
| Market size (# units sold in millions) | 1.4 | 1.8 | -21% | 3.8 | 4.6 | -18% | ||||||
| TomTom market share | 54% | 53% | 54% | 52% | ||||||||
|
North America |
||||||||||||
| Market size (# units sold in millions) | 0.6 | 0.8 | -23% | 1.7 | 2.2 | -22% | ||||||
| TomTom market share | 21% | 19% | 20% | 18% |
