TomTom 2015 Annual Report Download - page 29

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MANAGEMENT BOARD REPORT
TOMTOM / ANNUAL REPORT AND ACCOUNTS 2015 / 28
and Autonomous Driving solutions. In line with this vision, in
2015, TomTom released the industry’s first commercial HD map
for a complete country. TomTom’s HD Map of Germany, covering
the complete Autobahn network, provides a 3D lane map for
24,000 kilometres of roads. By delivering this highly accurate
border-to-border model of the road, TomTom’s HD Map enables a
vehicle to see beyond its sensors.
Our Automotive strategy has been well received by automotive
OEMs and Tier 1 head unit vendors, reflected in a record level of
bookings for 2015 of over €300 million. This will continue to
support our top-line growth in Automotive business from 2016
onwards.
We made good progress in delivering a complete set of leading
connected navigation components to our existing customers as
well as securing new deals and partnerships. TomTom provides
real-time traffic services, turn-by-turn navigation and maps for
the new Jeep Renegade, the new Alfa Romeo Giulia and the entire
Fiat 500 family for Europe. Our real-time traffic service is also
provided to most Hyundai and Kia models in Europe. TomTom
traffic was also chosen by Volkswagen Group for its cars across
Europe, beginning with Audi and Volkswagen. In addition,
TomTom provides turn-by-turn navigation and maps to
SsangYong in Europe, as well as for the Fiat Bravo, Punto and
Linea for Latin America. Finally, Daimler chose TomTom’s
navigation services for its Mercedes me app.
In 2015, we partnered with Tech Mahindra to showcase their full
line-up of Advanced Driver Assistance Systems services, creating
an innovative portfolio for the Connected Car market. In
addition, we continued to strengthen and build on existing
partnerships with Bosch SoftTec and Volkswagen Research. The
latter partnership also resulted in TomTom maps powering
Audi’s 550-mile automated test drive from the west coast of
California to Las Vegas leading up to CES 2015 in January.
FINANCIAL REVIEW
Revenue for the year was €106 million, compared with €109
million in 2014. The modest year on year decline was mainly the
result of the phasing out of certain legacy contracts in
combination with a higher share of deferred revenue compared
with 2014. Deferred revenue in Automotive relates to map and
traffic services from recent contract wins that will be delivered
over time.
(€ in millions, unless stated otherwise) 2015 2014 y.o.y.
change1
Revenue 105.9 109.4 -3%
EBITDA226.1 20.1 30%
EBITDA margin (%) 25% 18%
EBIT -33.9 -28.7 18%
EBIT margin (%) -32% -26%
1. Change percentages are based on non-rounded figures.
2. Automotive D&A costs mainly include amortisation related to our map asset
(including acquisition-related amortisation) and our navigation software
development.
Automotive generated EBITDA of €26 million in 2015, which
compares to €20 million in 2014. The EBITDA margin was 25% in
2015 (2014: 18%). The maps cost are shared between the business
units based upon certain allocation keys, of which one of them is
revenue. As Automotive revenue modestly declined and
Licensing revenue strongly grew in 2015, Automotive was
allocated relatively less maps cost in 2015 compared with last
year. This explains the year on year improvement of Automotive
EBITDA and EBITDA margin.
EBIT amounted to -€34 million in 2015 (2014: -€29 million). This
year on year decline is mainly as a result of a €11 million
impairment charge on a certain customer specific technology
partly offset by the above-mentioned relatively lower allocated
maps cost and lower navigation software cost.
BUSINESS OUTLOOK
In 2016, we will continue expanding the footprint of
our maps, software components and services to more
automotive OEM and Tier 1 customers, seizing new
ADAS and Autonomous Driving opportunities.
Building on our strategic partnerships with Tech
Mahindra, Volkswagen Research and Bosch SoftTec,
we will reaffirm our position as a key partner in the
automotive industry with the mapping, navigation and
traffic expertise necessary for the future of
Autonomous Driving.