TomTom Reports Second Quarter 2016 Results

Total Consumer revenue for the quarter was €157 million, a decline of 5% compared with the same quarter last year (Q2 '15: €165 million). Consumer products revenue in Q2 '16 was down by 7% year on year, driven by a decline in the PND market, which was only partly compensated by strong growth in sports revenue. The Automotive hardware revenue in the first half of this year was strengthened by stronger sales on a legacy platform, which will go end of life at the start of the next quarter.

In Q2 '16, we saw a unit decline of 18% in the European PND market, whilst the North American market declined by 22%. The decline of the European PND market was above our expectation, partly explained by the European Football Championship. Our market share in both Europe and North America improved YoY.

In the quarter, we launched three new TomTom PNDs within the TomTom START range. We introduced TomTom Traffic Checker on the MyDrive App, targeting ‘commuters’. Additionally, we introduced TomTom Jam Ahead Warnings on the Speed Cameras App, alerting drivers to rapidly slowing, or stationary, traffic on the highway ahead. Finally, we announced the availability of truck trip planning, enabling professional drivers to save on driving time by conveniently planning a route anytime, and anywhere, with TomTom MyDrive.

Automotive

Our Automotive business generated revenue of €35 million in the quarter, compared with €26 million in Q2 '15. This increase is the result of higher volumes on our existing contracts and partially by the go-live of new contracts.

In the quarter, we announced that Volvo Cars selected TomTom as global provider for maps, traffic and navigation for its new infotainment platform. From 2019, Volvo Cars’ customers across the globe, across all carlines, will be able to enjoy an exceptional navigation experience powered by TomTom’s complete suite of location technology components, both embedded and cloud based.

We also announced coverage expansion of our High Definition (HD) Map and RoadDNA products to 17 new states across the United States delivering more than 54,000 kilometres of new coverage for interstates.

Licensing

Our Licensing revenue was €33 million in Q2 '16, 14% lower compared with the same quarter last year (Q2 '15: €39 million). The year on year decrease is explained by a catch-up of €5 million we recorded in Q2 '15. Excluding this catch-up, the year on year revenue was flat.

In the quarter, we announced a partnership with sensewhere, a provider of indoor positioning technology. The combination of TomTom’s maps – both indoor and traditional navigation maps - and sensewhere’s accurate indoor positioning will enable a seamless navigation experience indoors and outdoors.

Telematics

(€ in millions, unless stated otherwise)   Q2 '16   Q2 '15  

y.o.y.
change

  H1 '16   H1 '15  

y.o.y.
change

 
                           
Hardware and other services revenue1   10.7   11.0   -3%   18.9   19.5   -3%  
Subscription revenue   29.2   24.1   21%   58.1   46.7   25%  
Total Telematics revenue   39.9   35.1   14%   77.0   66.1   16%  
                           
Monthly subscription ARPU (€)   15.0   16.2   -7%              
Subscriber installed base (# in thousands)   652   507   29%              

Change percentages and totals calculated before rounding

             

1Other services revenue comprises installation services and separately purchased traffic service and/or map content.

 
                           

Telematics revenue for the quarter was €40 million, a 14% increase compared with €35 million in Q2 '15. The recurring subscription revenue for the quarter increased by 21% year on year to €29 million (Q2 '15: €24 million). The subscriber installed base increased to 652 thousand at the end of the quarter, a record quarterly increase of 27 thousand (Q1 '16: 625 thousand). Monthly subscription ARPU decreased year on year, owing to the impact of the Finder acquisition in Poland.

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