Notes to the consolidated interim financial statements
1. General
TomTom NV (‘the company’) has its statutory seat and headquarters in Amsterdam, the Netherlands. The consolidated interim 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 authorised for issue on 21 July 2015.
The consolidated interim financial statements have neither been reviewed nor audited.
2. Summary of significant accounting policies
The principal accounting policies and method of computations applied in these consolidated interim financial statements are consistent with those applied in the annual financial statements for the year ended 31 December 2014, except as described below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
Basis of preparation
The consolidated interim financial statements for the six months ended 30 June 2015 have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’. As permitted by IAS 34, the consolidated interim financial statements do not include all of the information required for full annual financial statements and the notes to these consolidated interim financial statements are presented in a condensed format. Accordingly, the condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union. The presentation currency of the group is the euro (€).
Other new accounting standards and developments
To the extent relevant, all IFRS standards and interpretations including amendments that were in issue and effective from 1 January 2015, have been adopted by the group from 1 January 2015.
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 2015 have not yet been adopted.
Use of estimates
The preparation of these interim financial statements requires management to make certain assumptions, estimates and judgements that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the interim 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 recognised 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 judgement or areas where assumptions and estimates are significant to the (interim) financial statements, reference is made to Note 3 of the Consolidated financial statements in the 2014 Annual Report.
Change in estimates
In H1 2015 the group changed its estimate of the expected useful life of its new generation navigation technology to better reflect the longer time period the technology is expected to be deployed. This change resulted in lower amortisation charge of approximately €3 million in H1 ‘15. Full year 2015 impact is estimated to be approximately €8 million.
3. Segment reporting
The internal management reporting is structured around four operating segments – Consumer, Automotive, Licensing and Telematics. Consumer generates revenue mainly from the sale of PNDs, sport watches, maps and related navigation products and services. The Automotive business unit develops and sells navigation software, services and content, such as traffic and maps, to car manufacturers and their suppliers worldwide. Licensing generates revenue by licensing high-quality digital maps, traffic and other content to a wide range of customers, and Telematics provides fleet management and connected car services and solutions to fleet owners and B2B2C companies (e.g. car insurance, importers, rental).
Management assesses the performance of segments based on the measures of revenue and earnings before interest and taxes (EBIT), whereby the EBIT measure includes allocations of expenses from supporting functions within the group. As the four operating segments serve only external customers, there is no inter-segment revenue. The allocations of expenses have been determined based on relevant measures, which reflect the level of benefits of these functions to each of the operating segments.
| (in € millions) |
H1 '15
|
H1 '14
|
|||||
| Revenue | 469.9 | 457.3 | |||||
| Consumer | 286.6 | 293.6 | |||||
| Automotive | 49.6 | 59.8 | |||||
| Licensing | 67.6 | 53.2 | |||||
| Telematics | 66.1 | 50.7 | |||||
| EBIT | -0.7 | 18.2 | |||||
| Consumer | 1.3 | 15.8 | |||||
| Automotive | -13.0 | -7.8 | |||||
| Licensing | -6.8 | -6.3 | |||||
| Telematics | 17.8 | 16.5 | |||||
| EBITDA | 53.1 | 73.1 | |||||
| Consumer | 6.6 | 24.5 | |||||
| Automotive | 6.3 | 15.2 | |||||
| Licensing | 17.7 | 14.9 | |||||
| Telematics | 22.5 | 18.5 | |||||
