TomTom reports second quarter 2011 results

Operating expenses

Excluding the impairment charge, total operating expenses for the quarter amounted to €142 million, an increase of €6.7 million, or 5% compared to the same quarter last year (Q2 2010: €135 million). Compared to the first quarter, operating expenses increased by €19 million or 16% (Q1 2011: €123 million).

The increase in operating expenses was the result of higher marketing expenses. Marketing expenses increased by €6 million year on year to €30 million (Q2 2010: €24 million) and by €20 million sequentially (Q1 2011: €10 million). In the quarter we launched our Break Free marketing campaign in advance of the summer driving season. As a percentage of revenue, operating expenses (excluding the impairment charge) for the quarter were 45% compared to 37% in Q2 2010 and 46% in Q1 2011.

Financial results

The total interest charge for the quarter was €6.1 million (Q2 2010: €9.0 million, Q1 2011: €6.0 million). The interest expense on the loan facilities for the quarter amounted to €5.0 million. The amortisation of the transaction costs related to the facility amounted to €1.6 million. The interest expense was partially offset by interest income of €0.5 million on cash balances.

The other financial result for the quarter of €2.2 million was comprised of a foreign exchange gain mainly attributed to USD rate fluctuations during the quarter.

Debt financing

On 30 June 2011, the carrying value of our borrowings amounted to €591 million, an increase of €1.6 million compared to the previous quarter which results from amortised transaction costs which are added back to the borrowings over the life time of the borrowings (Q1 2011: €589 million). Excluding transaction costs, which are netted against the borrowings, our outstanding borrowings amounted to €598 million (Q1 2011: €598 million).

Net debt as of 30 June 2011 was €366 million compared to €309 million at the end of the previous quarter. Net debt is the sum of the borrowings (€598 million), minus cash and cash equivalents at the end of the period (€232 million) plus our financial lease commitments (€0.7 million).

Balance sheet

As at the end of Q2 2011, accounts receivable plus other receivables amounted to €248 million. Our accounts receivable balance is driven by our revenues which explains the decrease of €43 million year on year and the increase of €71 million sequentially. The inventory level was €102 million, an increase of €39 million year on year and an increase of €2.9 million compared to the previous quarter. Cash and cash equivalents at the end of the quarter were €232 million.

Current liabilities were €627 million compared to €697 million at the end of the same quarter last year and €635 million in the previous quarter. The year on year decrease was mainly caused by a decrease of €55 million in trade payables and €17 million in other liabilities and accruals. Our equity was impacted by the €512 million impairment charge and decreased by €477 million to €665 million compared to 31 December 2010.

Cash flow

During the quarter, we recorded a cash outflow from operations of €23 million which was mainly driven by the €74 million increase in working capital.

The cash flow used in investing activities during the quarter increased to €25 million from €17 million in the previous quarter (Q2 2010: €12 million), mainly due to increased investment in product development in Automotive.

- END -



30 JUNE 2011


Consolidated statement of income
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statements of cash flows
Consolidated statement of changes in stockholders’ equity
Notes to the consolidated interim financial statements

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