“The economic headwind in Southern Europe impacted Consumer and Automotive revenue in the quarter. We saw consumer discretionary spending decline and OEMs adjusting their production accordingly, which was largely in line with our expectations. Due to a bug in a third party component some of our products stopped functioning properly after 31 March. We released a software update to fix this product issue for our customers and have been working with our partners to deliver a solution for the affected devices in the channel.
The first positive results of last year’s reorganisation are becoming apparent. The product focus is starting to pay off and is resonating well. I am proud that in the quarter we could announce our first traffic deal with an automotive company in China.
We reiterate our full year guidance for revenue and EPS.”
1 Earnings per share adjusted for impairment,
acquisition-related amortisation and restructuring charges on a post-tax
basis
2 Operating expenses include restructuring charges
of €0.6 million in Q1 2011 and €13.6 million in Q4 2011
Outlook 2012
We continue to expect to grow our Automotive, Licensing and Business Solutions revenues, whilst the visibility about the rate of decline in our core PND markets remains limited.
We maintain our guidance of full year revenue of around €1.1 billion and adjusted earnings per share of around €0.35. Our guidance takes into account our estimate of the aggregate impact of the product issue.
Business review
The market size in Europe for PNDs was 2.0 million units compared to 2.4 million units in the same quarter of last year. The North American market size was 1.4 million units compared to 2.1 million units last year. Our market shares in Europe and North America were fairly flat at 46% and 24% respectively.
At the start of the year Consumer introduced a new product line up of PNDs for the North American market. The new line-up classifies TomTom's navigation solutions in to three step-up ranges named Start, VIA, and GO. Consumer expanded geographically by launching the Via and GO series of PNDs in Indonesia.
Automotive extended its partnership with Renault with the upcoming R-Link. R-Link is Renault's new integrated, connected multi-media system with a seven-inch display and steering wheel mounted controls with features which include HD Traffic, IQ Routes and speech recognition. Zoe, the first Renault car model to be equipped with R-Link will be launched later this year. We signed our first deal with an automotive OEM for the Chinese market; Qoros Auto will equip its car models as of 2013 with HD Traffic. In the quarter we also announced that Chevrolet dealerships are offering TomTom PNDs to customers.
In the quarter we announced several new traffic customers. Agreements were signed with the government of the Basque Country and Atkins who will analyse traffic conditions through use of our Custom Travel Times product. Delcan Corporation will use our historical traffic data for a comprehensive research programme. In addition an agreement was signed with the British Automobile Association (the AA) which will use TomTom HD Traffic to provide its website visitors with a live view of road conditions and areas of congestion.
TomTom announced the expansion of coverage of its portfolio of real time traffic products for licensing customers to include the Czech Republic, Denmark, Finland, Norway and Sweden, bringing the total count to 23 countries.
The quality of our real-time traffic information was corroborated by independent research conducted by the German Aerospace Centre. Solutions with TomTom’s HD Traffic outperform competing solutions and reduce average drive times by 13% and up to 30% in congested areas.
Licensing signed an agreement with Samsung whereby TomTom maps and location content will power the Wave3 smartphone. We extended our partnership with HTC to provide the maps, points of interest and turn-by-turn directions for a range of HTC smartphones in India.
Business Solutions entered the car insurance market in line with its strategy to more broadly leverage its technologies. Our fleet management technology is used in Motaquote’s new insurance product, which bases premiums on driving behaviour. WEBFLEET’s installed base grew by 36% compared to the first quarter of 2011 to 194 thousand. An updated version WEBFLEET Mobile extends the use of the app to iOS and Android tablets.
Financial review
|
Revenue split |
||||||||||||||||||||
| (in € millions) | Q1 '12 | Q1 '11 |
y.o.y.
|
Q4 '11 |
q.o.q.
|
|||||||||||||||
| Consumer | 126 | 157 | -20% | 242 | -48% | |||||||||||||||
| Automotive | 58 | 60 | -3% | 56 | 5% | |||||||||||||||
| Licensing | 33 | 34 | -3% | 40 | -19% | |||||||||||||||
| Business Solutions | 16 | 14 | 14% | 19 | -15% | |||||||||||||||
| Hardware | 135 | 169 | -20% | 250 | -46% | |||||||||||||||
| Content & Services | 98 | 96 | 2% | 107 | -9% | |||||||||||||||
|
Change percentages are based on non-rounded figures |
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