Financial summary Q4 '13
Financial summary FY '13
Operational summary Q4 '13
|( in millions)||Q4 '13||Q4 '12|
|FY '13||FY '12|
|OPERATING RESULT (EBIT)||4||25||-83%||26||70||-64%|
|Adjusted1 EPS, diluted||0.06||0.13||-52%||0.26||0.40||-34%|
Change percentages are based on non-rounded figures
TomToms Chief Executive Officer,
2013 was a solid year for us, both operationally and financially. We launched important new products, such as our new PND range and our first
We achieved a net cash position mid-way through the year and built on this through to the end of the year. In the year ahead we plan to step up our investments in our new map making platform and navigation software, which will further strengthen TomToms capabilities and its competitive position.
For the group we expect full year revenue of around 900 million.
In the Consumer market, our strategy is to maximise value from the PND category and to diversify into other product categories that have a natural fit with our brand, distribution and product design capabilities.
In fleet management (Business Solutions), we achieved market leadership in
Revenue development in Automotive in 2014 will be muted as we transition ourselves to a pure content and software supplier. Our strategy going forward is to offer individual connected navigation system components, such as maps, traffic services and navigation software, as well as a complete pre-integrated connected navigation system.
In the Licensing segment, which includes mobile device vendors, government organisations and internet service providers, we are working to licence a wider portfolio of products and to capitalise on our flexible approach to partnering.
We expect the gross margin to stay strong, we will maintain tight control on operating costs and we expect to deliver adjusted earnings per share of around 0.20.
Our capital investments are expected to increase to more than 100 million, as we invest at a higher level in our map and navigation software and we continue to target acquisitions in the fleet management area.
Financial and business review
We generated revenue of 268 million in the fourth quarter, a decline of 7% compared to 289 million in Q4 '12. On a full year basis, our revenue, although lower year on year, performed well relative to market trends. The net result for the year was 20 million, which translates to adjusted earnings per share of 0.26 for 2013.
Consumer revenue for the quarter was 165 million, a decline of 12% compared to the same quarter last year (Q4 '12: 187 million). PND is the main revenue contributor in the Consumer segment.
The PND market size in
The PND market in size in
Our Automotive business generated revenue of 46 million in the fourth quarter, which is 3% higher compared to 44 million in Q4 '12. This increase was driven by higher revenue from systems sales.
Automotive revenue in 2013 was 192 million, a decline of 9% compared to 212 million in 2012. Our Automotive business unit is in transition. Although we will continue to manufacture previously-developed in-dash hardware, when quoting for automotive contracts, we focus on maps, traffic and navigation software.
Our Licensing revenue declined to 32 million in Q4 '13 from 37 million in Q4 '12. On a full year basis, Licensing reported total revenue of 119 million, which is 14 million lower compared to 133 million in 2012. This decline mainly resulted from the phasing out of a major contract, which has not yet been fully replaced by new contract wins, and lower
In the quarter, we announced a partnership agreement with Clear Channel (Total Traffic + Weather Network) in
We continued our commitment to expanding our map and traffic coverage globally. Currently our navigable map covers 41 million km of roads in 114 countries and we expanded our traffic service to
Our fleet management business enjoyed another quarter of strong growth, and reported revenue of 24 million in Q4 '13, a 19% increase compared to 20 million in Q4 '12. This increase is driven by growth in the WEBFLEET subscriber base and the related recurring revenue. The recurring
Revenue for 2013 was 85 million, which represents 16% growth year on year (2012: 73 million). The recurring
Hardware and Content & Services revenue split
Hardware revenue for the quarter was 177 million compared to 191 million in Q4 '12. Content & Services revenue in the quarter was 91 million, 8% lower compared to Q4 '12, mainly due to lower Licensing revenue and lower Consumer service revenue. As a percentage of revenue, Content & Services revenue remained at 34%, the same as in Q4 '12.
On a full year basis, revenue from Content & Services was 371 million (FY '12: 400 million) and accounted for 38% of total revenue (FY '12: 38%). Content & Services revenue was impacted by lower Licensing revenue and by the trend towards bundling lifetime maps and traffic on the sale of a PND.
Geographical revenue split
From a regional perspective, 72% of our revenue in the fourth quarter was generated in
On a full year basis, 74% of our revenue was generated in
The gross margin for the quarter was 54%, which is one percentage point higher compared to 53% in Q4 '12. On a full year basis, we reported a gross margin of 54% in 2013 (FY '12: 52%).
Total operating expenses for the quarter were 139 million, which is 9.5 million higher compared to the same quarter last year (Q4 '12: 130 million). The increase was mainly caused by higher marketing expenses as we ran radio, outdoor and print campaigns to support our recent product launches.
On a full year basis, total operating expenses totalled 496 million compared to 484 million in 2012, explained by higher SG&A (higher variable personnel expenses) and marketing expenses.
Financial income and expenses
The net interest charge for the quarter was 0.8 million versus an interest charge of 2.4 million in Q4 '12. The lower interest charge reflects a lower interest rate applied against lower outstanding borrowing this year. The other financial result for the quarter was a gain of 0.3 million (Q4 '12: charge of 0.3 million), which consisted primarily of foreign exchange gains.
On a full year basis, the total financial income and expense charge equalled 4.6 million compared to 10.4 million in 2012.
The net income tax charge for the quarter was 0.6 million versus a net income tax gain of 77 in Q4 '12. The income tax gain in the prior year resulted from settlement of prior years tax discussions with the Dutch tax authorities. The effective tax rate (ETR) for the quarter was 16.5% compared to a normalised ETR of 11.7% in Q4 '12, which excludes the one-off 80 million tax settlement from the Dutch tax authorities in 2012. The ETR for the full year equalled 16.7% compared to 18.8% in 2012. Our ETR reflects benefits from the tax incentives which are made available for companies with significant research and development activities in
Net result and adjustedΉ EPS
The net result for the quarter was 3 million compared to 99 million in Q4 '12. Excluding the impact of the 80 million one-off tax gain in 2012, the net result for Q4 '12 would have been 19 million. The adjusted EPS for Q4 '13 was 0.06 versus an adjusted EPS of 0.13 in Q4 '12. Adjusted EPS for 2013 was 0.26 compared to the adjusted EPS of 0.40 in 2012.
Trade receivables at the end of the quarter equalled 115 million compared to 150 million at the end of Q4 '12. The year on year decrease is attributed to better collection results and to lower revenue. Inventory was 42 million, 2 million lower compared to Q4 '12. Cash and cash equivalents increased from 164 million at the end of Q4 '12 to 258 million at the end of Q4 '13.
At the end of Q4 '13 the carrying value of our outstanding borrowings was 173 million (Q4 '12: 247 million). The nominal amount of the outstanding borrowings excluding the transaction costs was 175 million (Q4 '12: 250 million).
Current liabilities excluding deferred revenue were 383 million compared to 398 million at the end of Q4 '12. The year on year decrease was mainly driven by lower provisions in 2013. Trade payables amounted to 82 million, 2 million lower compared to Q4 '12. Tax and social security liabilities amounted to 28 million compared to 33 million at the end of Q4 '12. This decrease is mainly due to a lower corporate income tax provision.
Deferred revenue for the quarter ended at 114 million (Q4 '12: 95 million). The main reason for the year on year increase is related to the increase of deferred revenue related to the lifetime maps content and lifetime traffic services bundled in our PND ranges.
Cash flow from operating activities for the quarter was 51 million compared to 91 million in Q4 '12. The year on year decrease was mainly driven by lower results and higher working capital utilisation in Q4 '13.
On a full year basis, we generated strong cash flow from operating activities of 260 million compared to 167 million in 2012. Excluding the one-off 80 million refund from the Dutch tax authorities, our cash flow from operating activities was 180 million which represents an 8% increase year on year. The year on year increase is mainly attributed to strong working capital management.
The cash flow used in investing activities during the quarter increased by 7 million year on year to 21 million. On a full year basis the cash flow used in investing activities was 91 million, an increase of 40 million year on year. Maps continues to be our largest area of investment and we also saw increased activity in customer specific Automotive projects and in navigation software development.
Consolidated condensed statement of income
|( in thousands)||Q4 '13||Q4 '12||FY '13||FY '12|
|Cost of sales||124,126||134,678||442,207||502,398|
|Research and development expenses||43,324||45,257||165,408||166,315|
|Amortisation of technology and databases||22,175||21,777||81,436||84,011|
|Selling, general and administrative expenses||45,288||46,698||178,300||169,716|
|Stock compensation expense||535||1,723||7,980||7,140|
|Total operating expenses||139,204||129,693||495,701||484,487|
|Other finance result||317||-290||-1,619||1,642|
|Result of associates||112||137||3,091||726|
|Result before tax||3,862||22,112||24,073||60,533|
|Net result attributable to:|
|Equity holders of the parent||3,255||99,112||19,539||128,724|
|Basic number of shares (in thousands)||222,061||221,895||221,950||221,895|
|Diluted number of shares (in thousands)||224,994||222,316||223,307||222,024|
Consolidated condensed balance sheet
|( in thousands)|
|Other intangible assets||803,635||821,233|
|Property, plant and equipment||25,804||26,770|
|Deferred tax assets||9,681||13,610|
|Investments in associates||2,854||3,880|
|Total non-current assets||1,223,543||1,247,062|
|Other receivables and prepayments||38,121||118,262|
|Other financial assets||376||444|
|Cash and cash equivalents||257,785||164,459|
|Total current assets||453,971||477,382|
|Equity attributable to equity holders of the parent||852,146||835,775|
|Deferred tax liability||171,727||170,909|
|Total non-current liabilities||365,232||410,744|
|Tax and social security||28,101||33,263|
|Other liabilities and accruals||174,003||173,837|
|Total current liabilities||458,021||475,283|
|Total equity and liabilities||1,677,514||1,724,444|
Consolidated condensed statements of cash flows
|( in thousands)||Q4 '13||Q4 '12||FY '13||FY '12|
|Depreciation and amortisation||29,083||28,528||117,419||110,670|
|Change in provisions||1,293||-928||-5,285||-9,428|
|Equity-settled stock compensation expenses||-29||1,210||4,440||5,700|
|Changes in working capital:|
|Change in inventories||12,865||12,861||3,753||13,819|
|Change in receivables and prepayments||21,557||33,058||33,059||47,660|
Change in liabilities (excl. Provisions)4
|Cash flow from operations||58,608||98,391||188,036||186,676|
|Corporate income taxes (paid)/ received||-7,093||-4,244||73,196||-11,025|
|Cash flow from operating activities||50,837||90,895||259,508||166,940|
|Investments in intangible assets||-15,380||-11,075||-68,414||-42,990|
|Investments in property, plant and equipment||-5,898||-3,519||-16,184||-9,311|
|Acquisition of subsidiary||0||0||-6,942||0|
|Cash flow from investing activities||-21,243||-14,554||-90,504||-50,814|
|Repayment of borrowings||0||-290,000||-75,000||-388,000|
|Proceeds of new term loan||0||247,140||0||247,140|
|Redemption of vested equity instruments||0||-4,605||0||-4,605|
|Proceeds on issue of ordinary shares||1,351||0||1,508||0|
|Cash flow from financing activities||1,177||-47,782||-73,869||-145,782|
|Net increase/(decrease) in cash and cash equivalents||30,771||28,559||95,135||-29,656|
|Cash and cash equivalents at beginning of period||227,538||136,528||164,459||193,579|
|Exchange rate effect on cash balances held in foreign currencies||-524||-628||-1,809||536|
|Cash and cash equivalents at end of period||257,785||164,459||257,785||164,459|
Accounting policies - basis of accounting
The condensed consolidated financial information for the three-month and twelve-month periods ended
Audio webcast fourth quarter and full year 2013 results
The information for our fourth quarter and full year 2013 results audio webcast is as follows:
Date and time:
ISIN: NL0000387058 / Symbol: TOM2
Forward-looking statements/Important notice
This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of
1 Earnings per share adjusted for acquisition-related amortisation & gain on a post-tax basis.
2 180 million excludes a 80 million one-off tax gain received from the Dutch tax authorities.
4 Includes the movement of non-current deferred revenue
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