TomTom 2015 Annual Report Download - page 33

MANAGEMENT BOARD REPORT
TOMTOM / ANNUAL REPORT AND ACCOUNTS 2015 / 32
OPTIDRIVE 360
This year, we launched OptiDrive 360 following extensive
research conducted by the academically-led European Union
ecoDriver project. OptiDrive 360 combines pre-trip, real-time
and post-trip advice to provide a complete approach to driver
improvement. The real-time element uses vehicle and map data
to provide fleet drivers with predictive real-time driving advice.
The success of the product has also resulted in the creation of
partnerships with a number of European eco-driving and road
safety organisations, including DEKRA, RACC and Prévention
Routière. OptiDrive 360 has also been recognised by the
industry, winning the Brake Fleet Safety Product Award, the
Deutschen Telematik Preis and a fleet innovation award from
Link2Fleet.
WEBFLEET TECHNOLOGY PLATFORM
The open WEBFLEET platform, made possible through stable
open APIs and SDKs, was showcased at the 2015 .connect
Developer Conference. This has led to increased integration
possibilities for customers and development of further
connected, third-party applications. An ecosystem of more than
350 software and hardware application developer partners
includes key partnerships with Esri and PTV. The PRO 8 series
driver terminals have extended the WEBFLEET platform by
integrating real-time information captured in the field into
back-end systems. We announced a partnership with Shell this
year to integrate euroShell Card data with the WEBFLEET
platform, making fuel transactions and fuel management
information available for customers in one system.
AFTERMARKET CONNECTED CAR
Further expansion of our WEBFLEET technology has been
achieved by creating opportunities in markets where Connected
Car technology has great future potential. This includes usage-
based insurance (UBI), where new products have been created
with Allianz in France, Woop and Towergate in the UK and
Signal Iduna in Germany. Our CURFER product, underpinned by
LINK 100, was launched to showcase the insurance solution,
using a smartphone app to provide feedback on driving style.
Pon, the largest importer of cars in the Netherlands, adopted the
Connected Car technology from Telematics to offer dealerships
and customers real-time information into their vehicles’ status
and performance.
FINANCIAL REVIEW
Telematics revenue in 2015 was €135 million, a 22% growth year
on year (2014: €110 million). The recurring subscription revenue
for the year was €98 million compared with €76 million in 2014,
an increase of 29% year on year. This strong increase was driven
by the ongoing growth of the subscriber installed base. Hardware
revenue and other services increased by 7% year on year, which is
lower than in previous years as a result of a higher proportion of
hardware rental in our new subscriber sales mix.
(€ in millions,unless stated otherwise) 201512014 y.o.y.
change2
Hardware and other services revenue337.2 34.6 7%
Subscription revenue 97.8 75.6 29%
Total Revenue 135.0 110.2 22%
EBITDA 49.0 39.1 25%
EBITDA margin (%) 36% 35%
EBIT 39.7 33.8 17%
EBIT margin (%) 29% 31%
Monthly subscription ARPU 15.9 16.2 -2%
Subscriber installed base (# in
thousands) 605 464 30%
1. 2015 financial metrics and YoY change percentages exclude Finder S.A.; the
acquisition is effective as of the end of December 2015.
2. Change percentages are based on non-rounded figures.
3. Other services revenue comprises installation services and separately purchased
traffic service and/or map content.
Telematics EBITDA increased by 25% year on year to €49 million
in 2015 (2014: €39 million), which led to an EBITDA margin of
36% in 2015, slightly higher compared with last year. EBIT
amounted to €40 million in 2015, a 17% increase compared with
last year (2014: €34 million). In 2015, Telematics saw a strong
gross margin slightly offset by higher operating expenses.
Telematics increased its sales and marketing cost in 2015 to
support further organic growth. Operating expenses were also
impacted by the integration cost related to our recent
acquisitions. Monthly subscription ARPU was 2% lower year on
year.
BUSINESS OUTLOOK
With our ongoing commitment to innovation,
sustained investment in R&D and capacity to leverage
economies of scale, we are in a strong position to
capitalise on favourable market opportunities. We
expect to see continued strong growth in our
Telematics business in 2016 and we are committed to
continued investment in innovation to build on the
strength, reliability and performance of our
WEBFLEET platform.
The growth potential for aftermarket Connected Car
services offers opportunities for increased adoption of
WEBFLEET and wider TomTom Telematics
technologies, for both consumer and business
solutions. Telematics aims to capitalise on these
opportunities and develop further partnerships with
industries such as insurance and automotive.