Q3 2020 RESULTS
Harold Goddijn - CEO Taco Titulaer - CFO
14 October 2020
Operational highlights
- Market conditions continue to improve
- A multiyear contract extension to provide maps, traffic and maps APIs to Uber
- A map editing partnership with Uber helping us maintain the freshest maps
- A new global deal to provide maps, navigation and traffic to Maserati
- A new product launch, RoadCheck, allowing for safer activation of automated driving functions
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Financial highlights
- Group revenue of €148m (Q2 '20 €124m | Q3 '19: €164m)
- Automotive operational revenue of €59m
(Q2 '20: €48m | Q3 '19: €88m)
- Gross margin of 76% (Q2 '20 86% | Q3 '19: 78%)
- Free cash flow -/- €20m (Q2 '20 -/- €54m | Q3 '19: €23m)
- Net cash of €346m (Q2 '20: €373m | Q3 '19: €393m)
Quarter on quarter development
Automotive operational revenue | Free cash flow |
in € millions | in € millions |
85
+24%
14 59
48
-20
Q1 '20 | Q2 '20 | Q3 '20 | Q4 '20 | -54 | ||
Q1 '20 | Q2 '20 | Q3 '20 | Q4 '20 |
Strong sequential growth expected in Q4 '20 | Free cash flow is expected around €30m in Q4 '20 |
2020 Outlook
- Full year revenue expected around €530m
- Full year free cash flow expected around -/- €30m
Thank you - Any questions?
Revenue breakdown
BY SEGMENT | ||
YTD '20 | YTD '19 | |
28% | ||
€403m | 42% | €545m |
58%
72%
Location Technology
Consumer
BY TYPE
YTD '20 | YTD '19 |
18%
34%
€403m€545m
66%
82%
Software & content
Hardware
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P&L
(€ in thousands) | Q2 '19 | Q3 '19 | Q4 '19 | Q1 '20 | Q2 '20 | Q3 '20 | YTD '20 | YTD '19 | ||
REVENUE | 210,803 | 164,206 | 156,223 | 131,197 | 123,703 | 147,851 | 402,750 | 544,536 | ||
Automotive | 75,944 | 55,404 | 69,190 | 49,788 | 51,588 | 65,945 | 167,320 | 196,474 | ||
Enterprise | 40,156 | 41,141 | 41,187 | 41,481 | 42,211 | 39,654 | 123,346 | 119,130 | ||
Consumer | 94,703 | 67,661 | 45,846 | 39,928 | 29,904 | 42,252 | 112,084 | 228,932 | ||
Cost of sales | 68,759 | 36,277 | 32,249 | 28,631 | 17,921 | 35,861 | 82,413 | 153,309 | ||
GROSS RESULT | 142,044 | 127,929 | 123,974 | 102,566 | 105,782 | 111,990 | 320,337 | 391,227 | ||
Gross margin | 67 % | 78% | 79% | 78% | 86% | 76% | 80% | 72% | ||
Research and development expenses | 78,840 | 80,272 | 91,175 | 76,195 | 75,055 | 80,155 | 231,405 | 231,610 | ||
Amortization of technology and databases | 106,561 | 65,038 | 65,120 | 64,740 | 64,314 | 64,293 | 193,348 | 196,073 | ||
Marketing expenses | 6,432 | 7,057 | 9,002 | 6,854 | 4,946 | 5,825 | 17,625 | 20,434 | ||
Selling, general and administrative expenses | 33,170 | 32,647 | 36,398 | 32,524 | 25,665 | 29,327 | 87,514 | 96,346 | ||
TOTAL OPERATING EXPENSES | 225,003 | 185,014 | 201,695 | 180,313 | 169,980 | 179,600 | 529,892 | 544,463 | ||
OPERATING RESULT (EBIT) | -82,959 | -57,085 | -77,721 | -77,747 | -64,198 | -67,610 | -209,555 | -153,236 | ||
EBIT margin | -39% | -35% | -50% | -59% | -52% | -46% | -52% | -28% | ||
EBITDA | 30,983 | 15,854 | -4,588 | -5,442 | 7,313 | 3,856 | 5,726 | 65,616 | ||
EBITDA margin | 15% | 10% | -3% | -4% | 6% | 3% | 1% | 12% | ||
Net result from continuing operations | -65,254-43,429-68,958-62,753-62,015 | -66,968 | -191,735 | -124,008 | ||||||
Net result tax profit from discontinued operations | 807,237 | 825,852 | ||||||||
NET RESULT | 741,983 | -43,429-68,958-62,753-62,015 | -66,968 | -191,735 | 701,844 | |||||
Automotive operational revenue | 89,639 | 88,254 | 116,010 | 85,339 | 47,858 | 59,354 | 192,551 | 264,632 | ||
Diluted EPS from continuing operations | -0.34 | -0.33 | -0.52 | -0.48 | -0.48 | -0.51 | -1.47 | -0.67 |
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Balance Sheet
(€ in thousands) | 30-Jun-19 | 30-Sep-19 | 31-Dec-19 | 31-Mar-20 | 30-Jun-20 | 30-Sep-20 |
ASSETS | ||||||
Goodwill | 192,294 | 192,294 | 192,294 | 192,294 | 192,294 | 192,294 |
Intangible assets | 509,597 | 444,646 | 380,160 | 312,168 | 247,122 | 181,458 |
Other contract related assets | 21,606 | 23,679 | 23,923 | 26,519 | 29,885 | 25,864 |
Other non-current assets | 73,421 | 72,125 | 71,454 | 78,481 | 79,026 | 74,443 |
Inventories | 19,033 | 27,483 | 25,315 | 23,971 | 31,902 | 27,611 |
Trade receivables | 111,981 | 136,755 | 99,776 | 66,507 | 52,751 | 110,105 |
Unbilled receivables | 42,621 | 33,359 | 34,374 | 42,393 | 52,688 | 56,400 |
Other receivables and prepayments | 56,891 | 59,435 | 45,351 | 44,539 | 38,996 | 35,016 |
Cash and cash equivalents and fixed term deposits | 372,030 | 392,865 | 436,520 | 431,563 | 373,369 | 346,463 |
TOTAL ASSETS | 1,399,474 | 1,382,641 | 1,309,167 | 1,218,435 | 1,098,033 | 1,049,654 |
TOTAL EQUITY | 774,619 | 735,016 | 665,932 | 574,294 | 516,281 | 450,503 |
Deferred tax liability | 57,605 | 42,764 | 27,283 | 20,570 | 14,216 | 7,527 |
Lease liability | 36,757 | 34,672 | 34,268 | 42,924 | 43,926 | 40,143 |
Provisions | 67,261 | 56,809 | 55,020 | 53,555 | 49,482 | 54,706 |
Trade payables | 52,871 | 46,651 | 47,085 | 32,266 | 25,144 | 22,169 |
Deferred revenue | 296,861 | 348,230 | 369,317 | 395,411 | 371,950 | 396,954 |
Other contract related liabilities | 40,519 | 37,692 | 26,745 | 21,031 | 18,150 | 19,274 |
Accruals and other liabilities | 72,981 | 80,807 | 83,517 | 78,384 | 58,884 | 58,378 |
TOTAL LIABILITIES | 624,855 | 647,625 | 643,235 | 644,141 | 581,752 | 599,151 |
TOTAL EQUITY AND LIABILITIES | 1,399,474 | 1,382,641 | 1,309,167 | 1,218,435 | 1,098,033 | 1,049,654 |
Net cash | 372,030 | 392,865 | 436,520 | 431,563 | 373,369 | 346,463 |
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Cash flow
(€ in thousands) | Q2 '19 | Q3 '19 | Q4 '19 | Q1 '20 | Q2 '20 | Q3 '20 | YTD '20 | YTD '19 | |
Operating result | -82,959 | -57,085 | -77,721 | -77,747 | -64,198 | -67,610 | -209,555 | -134,220 | |
Financial gains/(losses) | -208 | 1,424 | -1,098 | 145 | -1,059 | -2,249 | -3,163 | 779 | |
Depreciation and amortisation | 113,942 | 72,939 | 73,133 | 72,305 | 71,511 | 71,465 | 215,281 | 218,852 | |
Other | -1,764 | -12,608 | -9,031 | 800 | -1,151 | 78 | -273 | -14,568 | |
Changes in working capital | 1 | -6,830 | 23,431 | 68,062 | 22,596 | -53,089 | -19,185 | -49,678 | -17,585 |
CASH GENERATED FROM OPERATIONS | 22,181 | 28,101 | 53,345 | 18,099 | -47,986 | -17,501 | -47,388 | 53,258 | |
Interest received | 213 | 339 | 357 | 95 | 585 | 266 | 946 | 829 | |
Interest (paid) | -1,203 | -262 | -409 | -386 | -798 | -353 | -1,537 | -1,902 | |
Corporate income taxes (paid)/received | -6,816 | -1,062 | -2,034 | -2,004 | -3,932 | -1,399 | -7,335 | -9,765 | |
CASH FLOWS FROM OPERATING ACTIVITIES | 14,375 | 27,116 | 51,259 | 15,804 | -52,131 | -18,987 | -55,314 | 42,420 | |
CASH FLOWS FROM INVESTING ACTIVITIES | 867,491 | -4,445 | -226,046 | -1,949 | 32,216 | 36,340 | 66,607 | 853,133 | |
CASH FLOWS FROM FINANCING ACTIVITIES | -750,221 | -2,231 | -3,762 | -18,633 | -2,971 | -3,996 | -25,600 | -755,354 | |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 131,645 | 20,440 | -178,549 | -4,778 | -22,886 | 13,357 | -14,307 | 140,199 | |
Free cash flow | |||||||||
Cash flow from operating activties | 14,375 | 27,116 | 51,259 | 15,804 | -52,131 | -18,987 | -55,314 | 42,420 | |
Investments in intangible assets | -3,530 | -1,573 | -1,462 | -9,954 | |||||
Investment in tangible assets | -2,592 | -2,872 | -2,118 | -2,111 | -1,849 | -1,027 | -4,987 | -10,526 | |
Free cash flow from total operations | 8,253 | 22,671 | 47,679 | 13,693 | -53,980 | -20,014 | -60,301 | 21,940 | |
Free cash flow from discontinued operations | 7,378 | -3,866 | |||||||
Free cash flow from continuing operations | 15,631 | 22,671 | 47,679 | 13,693 | -53,980 | -20,014 | -60,301 | 18,074 | |
FCF from continuing operations as a % revenue | 7% | 14% | 31% | 10% | -44% | -14% | -15% | 3% |
1 Includes the movement of non-current deferred revenue. | 13 / 15 |
Outstanding shares
Q3 '20 | YTD '20 | ||
Common shares outstanding at the end of the period | 132,366,672 | 132,366,672 | |
Shares in issue at the beginning of the period | 130,207,823 | 131,541,998 | |
Shares in issue at the end of the period | 130,223,136 | 130,223,136 | |
Average shares in issue during the period1 | 130,220,376 | 130,670,717 | [A] |
In the money share options at the beginning of the period | 928,280 | 2,709,084 | |
In the money share options at the end of the period | 928,280 | 1,465,154 | |
Average potential dilutive share options outstanding during the period2 | 941,164 | 1,637,960 | |
Average non-dilutive share options during the period | 658,260 | 1,114,226 | |
Average shares outstanding from dilution of options3 | 282,904 | 523,734 | [B] |
Average shares outstanding from dilution of restricted stock units | 474,586 | 536,564 | [C] |
Average fully diluted shares outstanding during Q3 '20 and YTD '204 | 130,977,866 | 131,731,015 | [A+B+C] |
- Shares held in treasury of 2 143 536 are taken into account when calculating the weighted average shares outstanding.
- In the money options based on average share price for the period.
- Weighted average diluted options based on the period outstanding.
4 The average share price for the quarter was €7.04 and the average share price for the year was €7.81 | 14 / 15 |
Important Notice
DISCLAIMER
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 TomTom operates and the risk of a downturn in the market. Statements regarding market share, including TomTom'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.
You will be solely responsible for your own assessment of the market and the market position of TomTom and you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of TomTom's business. This document does not constitute or form part of, and should not be constructed as, an offer or invitation to subscribe for or purchase any TomTom securities.
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 because 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 deferred and unbilled revenue Gross margin is calculated as gross profit divided by revenue
EBIT is equal to the operating result
EBIT margin is calculated as operating result divided by revenue
EBITDA is equal to operating result plus depreciation and amortization charges
EBITDA margin is calculated as operating result plus depreciation and amortization charges divided by revenue
Net cash is defined as our cash and cash equivalents, including cash classified as held-for-sale (IFRS 5) minus the nominal value of our outstanding bank borrowings
Free cash flow is cash from operating activities from continuing operations minus capital expenditure (investments in intangible assets and property, plant and equipment) of continuing operations
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TomTom NV
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ir@tomtom.com
+31 20 757 5194 www.tomtom.com/investors
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TomTom NV published this content on 14 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2020 12:49:06 UTC