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TomTom NV
Earnings Release • Jul 19, 2024
3890_ir_2024-07-19-160332_bd22a273-6081-46b5-b57d-6baca659275d.pdf
Earnings Release
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SECOND QUARTER AND HALF YEAR 2024 RESULTS
Good progress amidst challenging market conditions
TOMTOM'S CHIEF EXECUTIVE OFFICER, HAROLD GODDIJN
"In the first half of the year, we saw the commercial launch of TomTom Orbis Maps with global coverage. These maps form a solid foundation for the strengthening of our competitive position. As a result, we see traction in our Enterprise business, with the uptake of the new maps expanding across both the private and public sectors.
As an important proof point of its quality, Microsoft decided to adopt TomTom Orbis Maps for their location technology needs. With our maps and traffic powering Microsoft's enterprise and consumer offerings, millions of users will be able to benefit from their accuracy, reliability, and global coverage.
Long-term automotive industry trends continue to support a deeper integration of our technologies into the vehicle over time. However, a combination of downward revisions for near-term car production volumes and delays in new model introductions has resulted in a generally less predictable market environment. In light of these developments, we now expect our full-year revenues to come in at the lower end of our guidance."
OPERATIONAL SUMMARY
- Microsoft selected TomTom Orbis Maps, as well as our traffic and navigation, to power location-based features across its product suite
- Various companies chose our location technology to power their products and operations, including Qualcomm, Moody's, Miovision, BMW Motorrad, and Bolt
- We entered the public sector market with TomTom Orbis Maps, licensing maps to the Australian Government
- The Volkswagen Group launched the first car models with our navigation software on board
FINANCIAL SUMMARY SECOND QUARTER 2024
- Group revenue decreased by 3% to €152 million (Q2 '23: €157 million)
- Location Technology revenue increased to €129 million (Q2 '23: €128 million)
- Automotive operational revenue decreased by 2% to €89 million (Q2 '23: €90 million)
- Free cash flow1 is an outflow of €5 million (Q2 '23: inflow of €3 million)
- Net cash of €258 million (Q4 '23: €315 million)
KEY FIGURES
| (€ in millions, unless stated otherwise) | Q2 '24 | Q2 '23 | y.o.y. change |
H1 '24 | H1 '23 | y.o.y. change |
|---|---|---|---|---|---|---|
| Location Technology | 128.7 | 128.2 | 0% | 247.3 | 246.2 | 0% |
| Automotive | 87.3 | 90.9 | -4% | 170.6 | 172.0 | -1% |
| Enterprise | 41.4 | 37.3 | 11% | 76.7 | 74.2 | 3% |
| Consumer | 23.4 | 28.4 | -17% | 44.1 | 51.0 | -14% |
| Revenue | 152.2 | 156.5 | -3% | 291.5 | 297.3 | -2% |
| Gross result | 121.0 | 129.3 | -6% | 241.4 | 250.0 | -3% |
| Gross margin | 80% | 83% | 83% | 84% | ||
| Operating expenses | 126.2 | 132.8 | -5% | 251.5 | 250.9 | 0% |
| Operating result (EBIT) | -5.2 | -3.6 | -10.1 | -0.9 | ||
| Operating margin | -3% | -2% | -3% | 0% | ||
| Net result | -2.3 | -4.5 | -7.2 | -1.5 | ||
| Free cash flow1 (FCF) |
-4.7 | 3.1 | -14.1 | 13.6 | ||
| FCF1 as a % of revenue |
-3% | 2% | -5% | 5% |
1Free cash flow in 2023 excludes restructuring payments related to the Maps realignment announced in June 2022.
This report includes the following non-GAAP measures which are further explained at the end of this report: operational revenue; gross margin; EBIT (margin); EBITDA (margin); free cash flow; net cash and gross deferred revenue.
TOMTOM'S CHIEF FINANCIAL OFFICER, TACO TITULAER
"The developments in the first half of the year have led us to revise our expectations. To reflect lower Automotive operational revenues, we now expect both Group and Location Technology revenues for 2024 to come in at the lower end of the guided range and consequently are adjusting our free cash flow guidance downward. Furthermore, due to the lessened predictability in the automotive industry and longer-than-anticipated sales cycles in Enterprise, we are not yet able to realize our financial ambition by 2025. We will provide guidance for 2025 with the publication of our full-year 2024 results.
Financial performance in the second quarter was mixed. Our Enterprise business recorded a double-digit year-onyear increase in revenues, driven partly by a contract in the public sector. Automotive operational revenues declined year on year, partially explained by a one-off included in the comparative year. On a reported basis, the positive impact from the start-of-production of our contract with Volkswagen Group was more than offset by the aforementioned base year effect, resulting in a year-on-year revenue decline."
OUTLOOK 2024
| (€ in millions, unless stated otherwise) | Updated outlook 2024 |
Previous outlook 2024 |
Actual 2023 |
|---|---|---|---|
| Revenue | 570 - 610 | 570 - 610 | 585 |
| Of which Location Technology | 490 - 520 | 490 - 520 | 491 |
| FCF1 as % of Group revenue |
1% - 5% | > 5% | 5% |
1Free cash flow in 2023 excludes restructuring payments related to the Maps realignment announced in June 2022.
REVENUE AND SEGMENT PERFORMANCE FOR THE PERIOD
Revenue for the second quarter amounted to €152 million, a decrease of 3% compared with the same quarter last year (Q2 '23: €157 million).
LOCATION TECHNOLOGY
Location Technology revenue in the quarter increased to €129 million (Q2 '23: €128 million). Location Technology segment EBIT for the first half of 2024 showed a year-on-year decrease, as the marginal increase in revenues was less than the increase in cost of sales and operating expenses. The second-quarter gross result was negatively impacted by the release of non-recurring engineering (NRE) costs at the start of production of some customers' programs.
| (€ in millions, unless stated otherwise) | Q2 '24 | Q2 '23 | y.o.y. change |
H1 '24 | H1 '23 | y.o.y. change |
|---|---|---|---|---|---|---|
| Automotive | 87.3 | 90.9 | -4 % | 170.6 | 172.0 | -1 % |
| Enterprise | 41.4 | 37.3 | 11 % | 76.7 | 74.2 | 3 % |
| Location Technology revenue | 128.7 | 128.2 | 0 % | 247.3 | 246.2 | 0 % |
| Segment EBITDA | 4.8 | 20.3 | ||||
| EBITDA margin (%) | 8% | |||||
| Segment EBIT | -12.6 | -2.6 | ||||
| EBIT margin (%) | -5% | -1% |
Automotive generated revenues of €87 million in the quarter, representing a 4% decrease year on year. The modest reported decrease in Automotive revenue was primarily the result of a relatively strong comparative year, as revenues in Q2 '23 included a one-off increase from royalties related to previous periods. This base year effect was partially offset by the recognition of revenues related to the aforementioned start of production of some customers' programs in the current quarter.
Automotive operational revenue decreased by 2% year on year, to €89 million (Q2 '23: €90 million), reflecting the aforementioned one-off royalties included in the comparative year. Automotive operational revenue is calculated as follows:
| (€ in millions, unless stated otherwise) | Q2 '24 | Q2 '23 | y.o.y. change |
H1 '24 | H1 '23 | y.o.y. change |
|---|---|---|---|---|---|---|
| Automotive revenue | 87.3 | 90.9 | -4 % | 170.6 | 172.0 | -1 % |
| Movement of Automotive deferred revenue | 1.7 | -0.4 | -2.6 | 2.1 | ||
| Automotive operational revenue | 89.0 | 90.5 | -2 % | 168.0 | 174.1 | -4 % |
Enterprise revenue increased by 11% year on year, to €41 million (Q2 '23: €37 million). This increase reflects, among others, revenues related to the recently-signed contract to supply global map data to the Australian Government, which contributed meaningfully to revenues in the second quarter. Due to the specific nature of contracts in the governmental sector, a comparatively larger portion of revenues is recognized up front.
Next to this new contract to support the Australian Government, our Enterprise business had various other successes during the quarter. Importantly, Microsoft adopted TomTom Orbis Maps to power its enterprise and consumer offerings, including Azure Maps, Bing, Power BI, and the Office suite, reaching millions of users worldwide. As part of the agreement, we entered into a collaboration with Microsoft to infuse our products with artificial intelligence and jointly launch go-to-market initiatives in automotive, logistics, and mobility.
Our map data and Maps APIs were also selected by Qualcomm to support their new asset tracking platform, providing users with real-time location intelligence on a global scale. In addition, ride-hailing and food delivery company Bolt is using our traffic information to drive operational improvements. Bolt's riders, drivers, and delivery partners now benefit from better routing and more accurate travel time estimates. Moody's, Miovision, and a host of other companies selected our location technology as well, to enhance offerings and optimize business processes.
In Automotive, we saw the Volkswagen Group launch the first car models with our navigation software on board. Starting with premium EVs, the software is tightly integrated into Volkswagen Group's vehicle platforms, providing seamless operation across infotainment and the most advanced driver assistance systems. Further, we are supporting BMW Motorrad's global lineup of motorcycles with our full navigation stack, enabling an innovative builtin navigation experience that riders can also access via a dedicated mobile app.
CONSUMER
Consumer reported revenues of €23 million for the quarter, 17% lower compared with the same quarter last year (Q2 '23: €28 million). Consumer segment EBIT increased in the first half of 2024, compared with the same period last year.
| (€ in millions, unless stated otherwise) | Q2 '24 | Q2 '23 | y.o.y. change |
H1 '24 | H1 '23 | y.o.y. change |
|---|---|---|---|---|---|---|
| Consumer revenue | 23.4 | 28.4 | -17 % | 44.1 | 51.0 | -14 % |
| Segment EBITDA | 5.8 | 3.8 | ||||
| EBITDA margin (%) | 13% | 7% | ||||
| Segment EBIT | 5.5 | 3.4 | ||||
| EBIT margin (%) | 12% | 7% |
RESULT FOR THE PERIOD
GROSS MARGIN
The gross margin for the quarter was 80%, which is 3 percentage points lower than the gross margin reported for the same quarter last year (Q2 '23: 83%). This decrease was driven by the release of NRE costs at the start of production of some customers' programs, which more than offset the positive effect from a relatively larger proportion of high-margin Location Technology revenue in our revenue mix.
OPERATING RESULT
Operating result (EBIT) in the quarter was a loss of €5 million (Q2 '23: loss of €4 million). Total operating expenses in the quarter were €126 million, a decrease of €7 million compared with the same quarter last year (Q2 '23: €133 million). This decrease reflects lower depreciation and amortization charges as well as lower personnel expenses.
FINANCIAL INCOME, EXPENSES AND INCOME TAX
The financial result for the quarter was an income of €2.4 million (Q2 '23: income of €0.7 million), driven by interest income on our cash balances.
The income tax gain for the quarter was €0.4 million, compared with an income tax expense of €1.6 million in the same quarter last year. The gain in the quarter results from a prior period adjustment for one of our foreign subsidiaries.
CASH FLOW, LIQUIDITY, AND WORKING CAPITAL
A reconciliation from operating result to free cash flow, to net cash movement is presented below:
| (€ in millions) | Q2 '24 | Q2 '23 | H1 '24 | H1 '23 |
|---|---|---|---|---|
| Operating result (EBIT) | -5.2 | -3.6 | -10.1 | -0.9 |
| Depreciation and amortization | 8.9 | 11.2 | 17.8 | 23.7 |
| Equity-settled stock compensation expenses | 3.7 | 3.9 | 6.4 | 6.6 |
| Other non-cash items | -0.9 | -1.9 | -0.4 | -2.5 |
| Movements in working capital (excl. deferred revenue) | -5.4 | -4.0 | -30.1 | -15.0 |
| Movements in deferred revenue | -5.5 | -3.9 | 3.4 | -0.7 |
| Interest and tax payments | 1.0 | -1.6 | 0.9 | -3.1 |
| Investments in property, plant and equipment, and intangible assets | -1.1 | -2.9 | -2.0 | -4.2 |
| Free cash flow | -4.7 | -2.7 | -14.1 | 3.8 |
| Lease payments | -2.1 | -3.1 | -4.2 | -6.6 |
| Cash flow from other investing and financing activities | -18.9 | 0.4 | -38.8 | 15.3 |
| Exchange rate differences on cash and fixed-term deposits | -0.1 | 0.2 | 0.0 | -0.2 |
| Net cash movement | -25.7 | -5.2 | -57.1 | 12.3 |
In Q2 '24, free cash flow was an outflow of €5 million, versus an outflow of €3 million in the same quarter last year, a decrease of €2 million year on year. This decrease primarily reflects lower EBITDA.
Movements in working capital include, among others, pay-outs related to the reorganization resulting from the further streamlining of our R&D activities as referred to in our Q4 '23 results press release.
The deferred revenue position decreased by €5.5 million during the second quarter, from €442 million to €437 million. The movement in deferred revenue in H1 '24 was an increase of €3.4 million, from €433 million at the end of 2023.
The following table presents the deferred revenue including the effect of netting:
| (€ in millions) | 30 June 2024 | 31 March 2024 | 31 December 2023 |
|---|---|---|---|
| Automotive | 429.2 | 427.6 | 431.8 |
| Enterprise | 20.5 | 21.0 | 10.3 |
| Consumer | 19.8 | 18.7 | 19.6 |
| Gross deferred revenue | 469.6 | 467.3 | 461.7 |
| Less: Netting adjustment to unbilled revenue | 33.0 | 25.1 | 28.4 |
| Deferred revenue | 436.6 | 442.2 | 433.3 |
Investments in property, plant and equipment in the quarter decreased compared with the same quarter last year, as 2023 included capital expenditures related to the refurbishment of our headquarters.
Cash flow from other investing and financing activities in the quarter primarily reflect the cash-out related to our share buyback program. The share buyback program, announced on 30 October 2023, was completed on 26 June 2024. As part of the program, a total of 7.8 million shares were repurchased at an average price of €6.39, for a total consideration of €50 million. In line with the aim of the program, we intend to cancel 7.4 million shares, with the cancellation expected in August 2024. The remaining shares purchased as part of the buyback program will be used to cover commitments arising from long-term employee incentive plans.
On 30 June 2024, the Group had no outstanding bank borrowings and reported a net cash position of €258 million (Q4 '23: net cash of €315 million).
- END -
TomTom NV Semi-Annual Financial Report 30 June 2024 (Unaudited)
Contents
Semi-annual Management Board report Consolidated condensed statement of income Consolidated condensed statement of comprehensive income Consolidated condensed balance sheet Consolidated condensed statements of cash flows Consolidated condensed statement of changes in equity Notes to the consolidated condensed semi-annual financial statements
SEMI-ANNUAL MANAGEMENT BOARD REPORT
TomTom N.V. (the 'company' and together with its subsidiaries referred to as 'the group') is a leading independent location technology specialist, shaping mobility with rich and accurate maps, navigation software, real-time traffic information, and services. TomTom has around 3,700 employees located around the globe.
The commercial activities of the group are carried out through two segments, Location Technology and Consumer. Location Technology provides maps, services (e.g., traffic and travel information), and navigation software to business customers in two different sales channels. Automotive serves customers active in the automotive industry (mainly OEMs and Tier 1 suppliers), while Enterprise serves a wide range of public and private sector customers. Our Consumer business offers products in the form of portable navigation devices (PNDs) and mobile applications, enhancing the driving experience with greater ease, efficiency, and safety.
Within our Location Technology segment, we aim to grow revenue by providing the most useful, up-to-date, and smartest technologies to power a diverse range of use cases. We are well-positioned to capitalize on opportunities in Automotive, related to electrified and automated driving as well as the software-defined vehicle. In Enterprise, we see significant opportunities, with our technologies helping customers across a wealth of markets and industries become more competitive.
Our Consumer business aims to maximize cash flows from the sale of PNDs and mobile applications.
MARKET AND TOMTOM OUTLOOK 2024
During H1 '24, we experienced mixed financial performance. Automotive revenues declined marginally, while Enterprise revenues rose modestly.
A combination of downward revisions for car production volumes and delays in new model introductions has resulted in a generally less predictable market environment. In light of these developments, we now expect both Group and Location Technology revenues for 2024 to come in at the lower end of the guided ranges of between €570 million and €610 million for the Group, and between €490 million and €520 million for Location Technology. Consequently, we are adjusting our free cash flow guidance to between 1% and 5% of Group revenue.
FINANCIAL REVIEW FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2024
REVENUE
The Group generated revenue of €291 million in H1 '24, €6 million lower compared with €297 million in the same period of 2023.
Location Technology generated revenue of €247 million in H1 '24, a marginal increase compared with €246 million in H1 '23.
Automotive revenue decreased by 1% to €171 million (H1 '23: €172 million), reflecting the aforementioned development in the industry and partly due to a one-off royalty revenue from previous periods included in the comparative period of H1 '23. The decrease was partially offset by revenue recognized at the start of production of some customers' contracts in H1 '24.
Enterprise revenue increased by 3% to €77 million (H1 '23: €74 million). Traction in the Enterprise business increased, with the uptake of TomTom Orbis Maps expanding across both the private and public sectors. Among contracts with companies such as Qualcomm, Moody's, and Bolt, H1 '24 saw the signing of a contract with the Australian Government to provide global map data. The contribution from this contract partially explains the yearon-year revenue increase.
Consumer revenue for H1 '24 decreased year-on-year by 14% to €44 million (H1 '23: €51 million).
GROSS RESULT
The gross result for H1 '24 was €241 million, compared with €250 million in the same period last year. The gross margin in H1 '24 was 83%, 1 percentage point lower compared to the same period last year (H1 '23: 84%). The decrease in H1 '24 is mainly driven by releases of the non-recurring engineering (NRE) costs at the start of production of some customer contracts.
OPERATING RESULT
The operating result for H1 '24 was a loss of €10 million (H1 '23: loss of €1 million). Operating expenses in H1 '24 was €251 million, equal to the same period last year (H1 '23: €251 million). An increase in people and peoplerelated expenses was offset by a decrease in depreciation and amortization charges.
FINANCIAL RESULT
The financial result for H1 '24 was an income of €5.3 million (H1 '23: income of €2.3 million).
INCOME TAXES
In H1 '24, the group recorded an income tax expense of €2.3 million, compared with an expense of €2.9 million in the same period last year.
CASH FLOW
The cash flow from operating activities was an outflow of €12 million, €20 million lower compared with the same period last year (H1 '23: inflow of €8 million).
The cash flow from investing activities in H1 '24 was €21 million compared with €54 million in H1 '23. The comparative period, included a higher inflow from maturing fixed-term deposits (H1 '24: inflow of €23 million, H1 '23: inflow of €43 million) as well as proceeds of €15 million from the divestment of our equity interest in Cyient Ltd. Investments in property, plant and equipment in H1 '24 decreased compared with the same period last year, as the comparative year included higher capital expenditures on office refurbishments related to our headquarters.
The cash flow from financing activities in H1 '24 was an outflow of €43 million. Cash flow from financing activities primarily reflect a €39 million cash-out related to our share buyback program, which was completed in June 2024.
RELATED PARTY TRANSACTIONS
For related party transactions please refer to note 9 of our semi-annual financial statements.
PRINCIPAL RISKS AND UNCERTAINTIES H1 '24
The group risks mentioned in the group risk profile section of TomTom's 2023 Annual Report are still relevant and deemed incorporated and repeated in this report by reference.
RESPONSIBILITY STATEMENT
With reference to the statement within the meaning of article 5:25d(2c) of the Financial Supervision Act, the Management Board hereby declares that, to the best of their knowledge:
- the semi-annual financial statements prepared in accordance with IAS 34, "Interim Financial Reporting", as endorsed by the EU give a true and fair view of the assets, liabilities, financial position, profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
- the semi-annual Management Board report gives a fair view of the information required pursuant to section 5:25d(8)/(9) of the Financial Supervision Act.
Amsterdam, July 15, 2024
The Management Board
Harold Goddijn / Chief Executive Officer Taco Titulaer / Chief Financial Officer Alain De Taeye / Member
CONSOLIDATED CONDENSED STATEMENT OF INCOME
| Q2 '24 | Q2 '23 | H1 '24 | H1 '23 | |
|---|---|---|---|---|
| (€ in thousands) | Unaudited | Unaudited | Unaudited | Unaudited |
| Revenue | 152,179 | 156,549 | 291,464 | 297,267 |
| Cost of sales | 31,132 | 27,281 | 50,086 | 47,307 |
| Gross profit | 121,047 | 129,268 | 241,378 | 249,960 |
| Research and development expenses - Geographic data | 43,904 | 45,798 | 86,922 | 87,977 |
| Research and development expenses - Application layer | 46,270 | 49,410 | 92,178 | 91,871 |
| Sales and marketing expenses | 14,905 | 14,158 | 28,547 | 27,140 |
| General and administrative expenses1 | 21,166 | 23,459 | 43,843 | 43,882 |
| Total operating expenses | 126,245 | 132,825 | 251,490 | 250,870 |
| Operating result | -5,198 | -3,557 | -10,112 | -910 |
| Financial result | 2,438 | 699 | 5,281 | 2,299 |
| Result before tax | -2,760 | -2,858 | -4,831 | 1,389 |
| Income tax gain/(expense) | 448 | -1,597 | -2,349 | -2,870 |
| Net result2 | -2,312 | -4,455 | -7,180 | -1,481 |
| Earnings per share (in €): | ||||
| Basic | -0.02 | -0.03 | -0.06 | -0.01 |
| Diluted3 | -0.02 | -0.03 | -0.06 | -0.01 |
1Includes a gain of respectively €0.5 million and €2.4 million in Q2 '23 and H1 '23 from the release of the restructuring provision related to the Maps realignment.
2Fully attributable to the equity holders of the parent.
3When the net result is a loss, no additional shares from assumed conversion are taken into account as the effect would be anti-dilutive.
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
| Q2 '24 | Q2 '23 | H1 '24 | H1 '23 |
|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Unaudited |
| -2,312 | -4,455 | -7,180 | -1,481 |
| 0 | 120 | 0 | 120 |
| 0 | 0 | 0 | 995 |
| 957 | 663 | 957 | -440 |
| 957 | 783 | 957 | 675 |
| -806 | |||
| -1,355 | -3,672 | -6,223 |
1The items of other comprehensive income are presented net of tax (if applicable).
2Fully attributable to the equity holders of the parent.
CONSOLIDATED CONDENSED BALANCE SHEET
| 30 June 2024 | 31 December 2023 | |
|---|---|---|
| (€ in thousands) Goodwill |
Unaudited 192,294 |
Audited 192,294 |
| Other intangible assets | 11,392 | 20,275 |
| Property, plant and equipment | 22,308 | 24,313 |
| Lease assets | 44,316 | 44,624 |
| Other contract-related assets | 22,419 | 24,384 |
| Deferred tax assets | 1,211 | 1,206 |
| Total non-current assets | 293,940 | 307,096 |
| Inventories | 11,666 | 14,823 |
| Trade receivables | 73,089 | 69,156 |
| Unbilled receivables | 48,322 | 42,778 |
| Other contract-related assets | 5,323 | 10,635 |
| Prepayments and other receivables | 35,877 | 36,209 |
| Fixed-term deposits | 204,941 | 227,662 |
| Cash and cash equivalents | 53,182 | 87,532 |
| Total current assets | 432,400 | 488,795 |
| Total assets | 726,340 | 795,891 |
| Total equity | 143,086 | 181,588 |
| Lease liabilities | 37,852 | 38,441 |
| Deferred tax liability | 757 | 1,040 |
| Provisions | 13,486 | 14,841 |
| Deferred revenue | 298,202 | 267,059 |
| Total non-current liabilities | 350,297 | 321,381 |
| Trade payables | 11,399 | 21,168 |
| Lease liabilities | 9,077 | 8,272 |
| Provisions | 7,317 | 10,879 |
| Deferred revenue | 138,431 | 166,171 |
| Other contract-related liabilities | 13,494 | 17,078 |
| Income taxes | 2,836 | 1,594 |
| Accruals and other liabilities | 50,403 | 67,760 |
| Total current liabilities | 232,957 | 292,922 |
| Total equity and liabilities | 726,340 | 795,891 |
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
| Q2 '24 | Q2 '23 | H1 '24 | H1 '23 | |
|---|---|---|---|---|
| (€ in thousands) | Unaudited | Unaudited | Unaudited | Unaudited |
| Operating result | -5,198 | -3,557 | -10,112 | -910 |
| Foreign exchange adjustments | 568 | -1,027 | 1,451 | -989 |
| Depreciation and amortization | 8,870 | 11,180 | 17,775 | 23,688 |
| Change in provisions | -1,513 | -697 | -1,884 | -1,152 |
| Equity-settled stock compensation expenses | 3,651 | 3,944 | 6,437 | 6,552 |
| Other non-cash movement | 0 | -134 | 0 | -341 |
| Changes in working capital: | ||||
| Change in inventories | 3,563 | 1,903 | 4,461 | 3,027 |
| Change in receivables and prepayments | 11,394 | -9,048 | -690 | -12,952 |
| Change in liabilities1 (excluding provisions) |
-25,884 | -741 | -30,511 | -5,814 |
| Cash flow from operations | -4,549 | 1,823 | -13,073 | 11,109 |
| Interest received | 2,617 | 2,447 | 5,494 | 3,871 |
| Interest paid | -470 | -442 | -954 | -757 |
| Corporate income taxes paid | -1,158 | -3,620 | -3,592 | -6,207 |
| Cash flow from operating activities | -3,560 | 208 | -12,125 | 8,016 |
| Investments in property, plant and equipment | -1,123 | -2,868 | -1,974 | -4,239 |
| Proceeds from sale of investments | 0 | 0 | 0 | 14,965 |
| Change in fixed-term deposits | 19,283 | 104,008 | 22,720 | 43,255 |
| Cash flow from investing activities | 18,160 | 101,140 | 20,746 | 53,981 |
| Payment of lease liabilities | -2,053 | -3,113 | -4,165 | -6,569 |
| Proceeds on issue of ordinary shares | 0 | 368 | 0 | 368 |
| Purchase of treasury shares | -18,892 | 0 | -38,812 | 0 |
| Cash flow from financing activities | -20,945 | -2,745 | -42,977 | -6,201 |
| Net (decrease)/increase in cash and cash equivalents | -6,345 | 98,603 | -34,356 | 55,796 |
| Cash and cash equivalents at the beginning of period | 59,632 | 89,497 | 87,532 | 132,729 |
| Exchange rate changes on foreign cash balances | -105 | 214 | 6 | -211 |
| Total cash and cash equivalents at the end of the period | 53,182 | 188,314 | 53,182 | 188,314 |
| Cash held in short-term fixed deposits | 204,941 | 127,745 | 204,941 | 127,745 |
| Net cash at the end of the period | 258,123 | 316,059 | 258,123 | 316,059 |
1Includes movements in the non-current portion of deferred revenue presented under non-current liabilities.
Consolidated condensed statement of changes in equity
| Retained | Total shareholders' |
|||||
|---|---|---|---|---|---|---|
| (€ in thousands) | Share capital | Share premium | Treasury shares | Other reserves1 | earnings | equity |
| Balance as at 1 January 2023 | 26,473 | 338,124 | -30,482 | 72,817 | -207,326 | 199,606 |
| Comprehensive income | ||||||
| Result for the period | 0 | 0 | 0 | 0 | -1,481 | -1,481 |
| Other comprehensive income2 | ||||||
| Currency translation differences2 | 0 | 0 | 0 | -440 | 0 | -440 |
| Actuarial gain on defined benefit plan2 | 0 | 0 | 0 | 0 | 120 | 120 |
| Fair value remeasurement of financial instruments | 0 | 0 | 0 | 995 | 0 | 995 |
| Total other comprehensive income | 0 | 0 | 0 | 555 | 120 | 675 |
| Total comprehensive income | 0 | 0 | 0 | 555 | -1,361 | -806 |
| Transactions with owners | ||||||
| Stock compensation expenses | 0 | 0 | 0 | 6,552 | 0 | 6,552 |
| Reclassification from liability to stock compensation reserve | 0 | 0 | 0 | 2,294 | 0 | 2,294 |
| Reissuance of shares | 0 | 0 | 368 | 0 | 0 | 368 |
| Other movements | ||||||
| Transfers between reserves | 0 | 0 | 5,927 | -20,469 | 14,542 | 0 |
| Balance as at 30 June 2023 | 26,473 | 338,124 | -24,187 | 61,749 | -194,145 | 208,014 |
| Balance as at 1 January 2024 | 26,473 | 338,124 | -34,110 | 56,745 | -205,644 | 181,588 |
| Comprehensive income | ||||||
| Result for the period | 0 | 0 | 0 | 0 | -7,180 | -7,180 |
| Other comprehensive income2 | ||||||
| Currency translation differences2 | 0 | 0 | 0 | 957 | 0 | 957 |
| Total other comprehensive income | 0 | 0 | 0 | 957 | 0 | 957 |
| Total comprehensive income | 0 | 0 | 0 | 957 | -7,180 | -6,223 |
| Transactions with owners | ||||||
| Stock compensation expenses | 0 | 0 | 0 | 6,437 | 0 | 6,437 |
| Repurchase of shares | 0 | 0 | -38,716 | 0 | 0 | -38,716 |
| Other movements | ||||||
| Transfers between reserves | 0 | 0 | 8,377 | -17,069 | 8,692 | 0 |
| Balance as at 30 June 2024 | 26,473 | 338,124 | -64,449 | 47,070 | -204,132 | 143,086 |
1Other reserves include the Legal reserve, the Stock compensation reserve, and the Revaluation reserve.
2The items of other comprehensive income are presented net of tax (if applicable).
NOTES TO THE CONSOLIDATED CONDENSED SEMI-ANNUAL FINANCIAL STATEMENTS
1. GENERAL
TomTom N.V. ('the company') has its statutory seat and headquarters in Amsterdam, the Netherlands. The consolidated semi-annual financial statements comprise the financial information of the company and its subsidiaries (together referred to as 'the group') and have been prepared by the Management Board and authorized for issue on 15 July 2024.
The consolidated semi-annual financial statements have neither been reviewed nor audited.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The principal accounting policies and methods of computation applied in these consolidated semi-annual financial statements are consistent with those applied in the annual financial statements for the year ended 31 December 2023. These policies have been consistently applied to all the periods presented, unless stated otherwise.
Basis of preparation
The consolidated semi-annual financial statements for the six-months ended 30 June 2024 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as endorsed by the European Union (EU). As permitted by IAS 34, the consolidated semi-annual financial statements do not include all of the information required for full annual financial statements and the notes to these consolidated semi-annual financial statements are presented in a condensed format. Accordingly, the condensed consolidated semi-annual financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as adopted by the EU. The presentation currency of the group is the Euro (€).
New accounting standards and interpretations
To the extent relevant, all other IFRS standards and interpretations including amendments that were in issue and effective from 1 January 2024, have been adopted by the group from 1 January 2024. These standards and interpretations had no material impact for the group.
All IFRS standards and interpretations that were in issue but not yet effective for reporting periods beginning on 1 January 2024 have not yet been adopted.
Use of estimates
The preparation of these semi-annual financial statements requires management to make certain assumptions, estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the semi-annual financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of revision and the future periods if the revision affects both current and future periods. For areas involving a higher degree of judgment or areas where assumptions and estimates are significant to the (semi-annual) financial statements, reference is made to note 3 of the Consolidated financial statements in the 2023 Annual Report.
3. SEGMENT REPORTING
The operating segments are identified and reported on the basis of internal reports about the segments of the Group (Location Technology and Consumer) that are regularly reviewed by the Management Board to assess the performance of the segments.
Management assesses the performance of segments based on the measures of revenue and operating result (EBIT), whereby EBIT includes allocations of expenses from supporting functions within the group. Such allocations have been determined based on relevant measures that reflect the level of benefits of these functions to each of the operating segments. The effects of non-recurring items such as restructuring are excluded from management's measurement basis. Interest income and expenses and tax are not allocated to the segments.
There is no measure of segment (non-current) assets and/or liabilities provided to the Management Board.
| H1 '24 | H1 '23 | |
|---|---|---|
| (€ in millions) | Unaudited | Unaudited |
| Revenue | 291.5 | 297.3 |
| Location Technology | 251.9 | 250.7 |
| External customers | 247.3 | 246.2 |
| Inter-segment | 4.5 | 4.5 |
| Consumer | 44.1 | 51.0 |
| Eliminations | -4.5 | -4.5 |
| Revenue by nature | 291.5 | 297.3 |
| License revenue | 162.7 | 163.4 |
| Service revenue | 97.6 | 97.1 |
| Sale of goods revenue | 31.1 | 36.8 |
| Revenue by timing of revenue recognition | 291.5 | 297.3 |
| Goods and services transferred at a point in time | 49.6 | 50.3 |
| Goods and services transferred over time | 241.8 | 247.0 |
| EBIT | -7.1 | 0.8 |
| Location Technology | -12.6 | -2.6 |
| Consumer | 5.5 | 3.4 |
| EBITDA | 10.6 | 24.1 |
| Location Technology | 4.8 | 20.3 |
| Consumer | 5.8 | 3.8 |
A reconciliation of the segments' performance measure (EBIT) to the group's result before tax is presented below.
| H1 '23 | ||
|---|---|---|
| (in € millions) | Unaudited | Unaudited |
| Total segment EBIT | -7.1 | 0.8 |
| Unallocated expenses1 | -3.0 | -1.7 |
| Financial income | 5.3 | 2.3 |
| Result before tax | -4.8 | 1.4 |
1Unallocated expenses in H1 '23 include a gain of €2.4 million from the release of restructuring provision from Maps realignment.
4. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the following:
| H1 '24 | H1 '23 | ||
|---|---|---|---|
| Unaudited | Unaudited | ||
| Earnings (€ in thousands) | |||
| Net result attributable to equity holders of the parent | -7,180 | -1,481 | |
| Number of shares (in thousands) | |||
| Weighted average number of ordinary shares for basic EPS | 125,139 | 128,731 | |
| Effect of dilutive potential ordinary shares (in thousands) | |||
| Share options and restricted stock units | 3,317 | 2,937 | |
| Weighted average number of ordinary shares for diluted EPS | 128,456 | 131,668 |
5. GOODWILL
The group performs its goodwill impairment test at least annually in December and when circumstances indicate the carrying value may be impaired. The methodology, key assumptions used to determine the recoverable amount for the different operating segments, as well as the amount of goodwill, were disclosed in the annual consolidated financial statements for the year ended 31 December 2023.
There were no triggering events for an impairment test in H1 '24 and no impairment charge was recorded in H1 '24 or H1 '23.
6. SHAREHOLDER'S EQUITY
The authorized and issued share capital is as follows:
| 30 Jun 2024 | 30 Jun 2024 | 31 Dec 2023 | 31 Dec 2023 | |
|---|---|---|---|---|
| Unaudited | Unaudited | Audited | Audited | |
| Number | € in thousands | Number | € in thousands | |
| Authorized: | ||||
| Ordinary shares | 300,000,000 | 60,000 | 300,000,000 | 60,000 |
| Preferred shares | 150,000,000 | 30,000 | 150,000,000 | 30,000 |
| Total authorized | 450,000,000 | 90,000 | 450,000,000 | 90,000 |
| Issued and fully paid: | ||||
| Ordinary shares | 132,366,672 | 26,473 | 132,366,672 | 26,473 |
| Of which held in Treasury | 9,606,913 | 4,717,362 |
All shares have a par value of €0.20 per share. In H1 '24, the group purchased 5.9 million shares as part of share buyback program initiated in October 2023. As part of the program, a total of 7.8 million shares were repurchased at an average price of €6.39, for a total consideration of €50 million.
In line with the aim of the program, the group intend to cancel 7.4 million of shares in August 2024. The remaining shares purchased as part of the buyback program will be used to cover commitments arising from long-term employee incentive plans.
In H1 '24, 1.1 million treasury shares were issued to cover vested restricted stock units ('RSU'). No share options were exercised by employees during H1 '24 (H1 '23: 0.8 million treasury shares issued for 0.8 million vested RSU's and the exercise of 49 thousand share options).
7. PROVISIONS
At the end of December 2023, the group had an outstanding restructuring position of €8.0 million, of which €3.3 million was presented under 'Other provision' and €4.7 million under 'Personnel-related accruals'. At the end of June 2024, a remaining amount of €0.5 million was presented under 'Other provision' and €1.8 million under 'Personnelrelated accruals'.
8. STOCK COMPENSATION
Stock compensation expenses amounted to €6.6 million in H1 '24, compared with an expense of €6.8 million in the same period last year.
During H1 '24, the group granted 1.7 million restricted stock units (RSUs) and 1.0 million performance stock units (PSUs) of which 0.6 million PSUs were issued to Management Board members.
The PSUs are assessed against performance criteria that can be both financial and non-financial.
Both the RSU and PSU plans are accounted for as equity-settled, whereby costs are allocated over the vesting period. For further information on our stock compensation, reference is made to note 9 of our 2023 Annual Report.
9. RELATED PARTY TRANSACTIONS
Refer to note 8 for details of stock compensation granted to the members of the Management Board during H1 '24.
10. SEASONALITY
In recent years, revenue for both Location Technology and Consumer was not materially impacted by seasonality.
11. COMMITMENTS AND CONTINGENT LIABILITIES
There were no material changes to the group's commitments and contingent liabilities in the first half of 2024 from those disclosed in note 31 of our 2023 Annual Report.
12. FAIR VALUE AND FAIR VALUE ESTIMATION
The fair values of our monetary assets and liabilities as at 30 June 2024 are estimated to approximate their carrying value. There have been no changes in techniques for fair value estimation nor the hierarchy of the inputs used to measure financial assets and liabilities carried at fair value through profit or loss compared with the methods and hierarchy disclosed in our 2023 Annual Report.
13. SUBSEQUENT EVENTS
There has been no subsequent event from 30 June 2024 to the date of issue that affects the consolidated semiannual financial statements.
- END -
ACCOUNTING POLICIES
The condensed consolidated financial information for the three- and six- month period ended 30 June 2024 and the related comparative information has been prepared using accounting policies and methods of computation which are based on International Financial Reporting Standards (IFRS) as disclosed in the Financial Statements for the year ended 31 December 2023.
Unless otherwise indicated, the quarterly condensed consolidated information in this press release is neither audited nor reviewed. Due to rounding, amounts may not add up precisely to totals. All change percentages are calculated before rounding.
NON-GAAP MEASURES
The financial information in this report includes measures which are not defined by generally accepted accounting principles (GAAP) such as IFRS. We believe this information, along with comparable GAAP measurements, gives insight to investors as it provides a basis for evaluating our operational performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Wherever appropriate and practical, we provide reconciliations to relevant GAAP measures.
Operational revenue is IFRS revenue adjusted for the movement of gross deferred revenue
Gross margin is calculated as gross profit divided by IFRS revenue
EBIT is equal to our operating result
EBIT margin is calculated as operating result divided by IFRS revenue
EBITDA is equal to our operating result plus depreciation and amortization charges
EBITDA margin is calculated as operating result plus depreciation and amortization charges divided by IFRS revenue
Free cash flow is cash from operating activities minus investments in intangible assets and property, plant and equipment
| (€ in thousands) | Q2 '24 | Q2 '23 | H1 '24 | H1 '23 |
|---|---|---|---|---|
| Cash flow from operating activities | -3,560 | 208 | -12,125 | 8,016 |
| Investments in intangible assets | 0 | 0 | 0 | 0 |
| Investments in property, plant and equipment | -1,123 | -2,868 | -1,974 | -4,239 |
| Free cash flow | -4,683 | -2,660 | -14,099 | 3,777 |
| Restructuring-related cash flow1 | 0 | 5,792 | 0 | 9,835 |
| Free cash flow excl. restructuring1 | -4,683 | 3,132 | -14,099 | 13,612 |
Net cash is cash and cash equivalents, plus cash held in fixed term deposits
Gross deferred revenue is deferred revenue2 before the netting of unbilled receivables
1 Restructuring-related cash flows are related to the Maps realignment announced in June 2022.
2 Deferred revenue reflects amounts not yet recognized as revenue as services still need to be delivered. Unbilled revenue represents amounts accrued for when a contractual right to invoice exists. When a single contract has both an accrual, based on contractual invoicing terms, and a deferral, because the underlying services are not yet fully delivered, the unbilled and the deferred positions are netted for presentation on the balance sheet.
FOR MORE INFORMATION
TomTom Investor Relations Email: [email protected] Phone: +31 20 757 5194
AUDIO WEBCAST SECOND QUARTER 2024 RESULTS
The information for our audio webcast is as follows:
Date and time: July 15, 2024 at 13:00 CEST
https://corporate.tomtom.com/investors/financial-publications/quarterly-results
TomTom is listed at NYSE Euronext Amsterdam in the Netherlands
ISIN: NL0013332471 / Symbol: TOM2
ABOUT TOMTOM
Billions of data points. Millions of sources. Thousands of communities.
We are the mapmaker bringing it all together to build the world's smartest map. We provide location data and technology to drivers, carmakers, businesses and developers. Our application-ready maps, routing, real-time traffic, APIs and SDKs empower the dreamers and doers to move our world forward.
Headquartered in Amsterdam with 3,700 employees around the globe, TomTom has been shaping the future of mobility for over 30 years.
For further information, please visit www.tomtom.com.
FORWARD-LOOKING STATEMENTS / IMPORTANT NOTICE
This document contains certain forward-looking statements with respect to the financial position and results of TomTom's activities. We have based these forward-looking statements on our current expectations and projections about future events, including numerous assumptions regarding our present and future business strategies, operations and the environment in which we will operate in the future. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, and you should not place undue reliance on them. Many of these risks and uncertainties relate to factors that are beyond TomTom's ability to control or estimate precisely, such as levels of customer spending in major economies, changes in consumer preferences, the performance of the financial markets, the levels of marketing and promotional expenditures by TomTom and its competitors, costs of raw materials, employee costs, exchange-rate and interest-rate fluctuations, changes in tax rates, changes in law, acquisitions or disposals, the rate of technological changes, political developments in countries where the company operates and the risk of a downturn in the market. Statements regarding market share, including the company's competitive position, contained in this document are based on outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates.
The forward-looking statements contained herein speak only as of the date they are made. We do not assume any obligation to update any public information or forward-looking statement in this document to reflect events or circumstances after the date of this document, except as may be required by applicable laws.
This document contains inside information as meant in clause 7 of the Market Abuse Regulation.