Slide 1: Third Quarter 2006 Results
Third Quarter 2006 Results 26 October 2006
Slide 2: Important Notice
Important Notice This Presentation has been produced by TomTom N.V. (the “Company”) and is furnished to you solely for your information. This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and the industry in which it o
Slide 3: Agenda
Agenda Topic Speaker Market Developments Harold Goddijn (CEO) and Business Update 2006 Q3 Financials Marina Wyatt (CFO) 3
Slide 4: Third Quarter Highlights
Third Quarter Highlights €353 million revenue and €73 million net profit, highest quarterly revenue and earnings ever by TomTom 1.2 million PNDs shipped: record number, over twice as many as in Q3 2005 Gross margin of 44% Cash generated from operations of €117 million Launch of new ONE; ne
Slide 5: Market Development
Market Development Portable Navigation seen increasingly as an indispensable tool for car drivers; products are becoming more affordable, smarter and easier to use Penetration levels are still low and increasing rapidly as the market grows The market size in the third quarter, compared with th
Slide 6: TomTom's Approach to the Market
TomTom’s Approach to the Market TomTom drives growth – Product portfolio is aimed at a wide spectrum of user needs from entry level to high end – Content and services enhance user experience Margin protection remains a priority – Cost engineering products – Exploiting scale benefits – Controlled
Slide 7: Resilient European Market Share
Resilient European Market Share Jun-Sep Market Share Evolution 80% TomTom’s market share declined in the early summer 70% due to supply shortages of the new GO range ~ over 60 Competitors 60% Production ramp up and ONE Market Share (PND Units) 50% introduction led to market share rebound 40% 30%
Slide 8: Continued to Build on #2 Position in North American Market
Continued to Build on #2 Position in North American Market TomTom Retail Outlets Continued strong in-roads 17,500 into North American market 16,000 15,000 Second range of products introduced; ONE is second 12,500 best selling SKU 0% Number of Retail Outlets 11,000 22 + 10,000 Supply shortages
Slide 9: Launch of New ONE…
Launch of New ONE… • New, improved entry level product • Seamless transition from existing version, which was the world’s best selling PND • Positive reactions from retail channels and consumers • Helps TomTom further penetrate the mass market 9
Slide 10: Fourth Quarter Business Outlook
Fourth Quarter Business Outlook We are well prepared for the fourth quarter: – market leading position – broad product range – strong retail presence – appropriately stocked channels – strong order book Supported by marketing campaigns in Europe and the US Given this and the growth in the mark
Slide 11: Q3 2006 Financial Results
¥Q3 2006 Financial Results tomtom
Slide 12: Financial Summary
Financial Summary Q3 Q2 change vs. Q3 change vs. (in € millions) 2006 2006 Q2 2006 2005 Q3 2005 Revenue 353 277 27% 250 41% Gross Profit 154 118 30% 108 42% Gross Margin 44% 43% 43% Operating Profit 101 64 58% 82 22% Operating Profit Margin 29% 23% 33% Net Profit 73 38 92% 59 24% Net Profit Margin 2
Slide 13: Revenue by Product and Geography
Revenue by Product and Geography By Product Group By Geography FY 2005 FY 2005 5% Australia 1% 9% North America 6% Europe 93% 86% Q3 2006 Q3 2006 1% 4% Australia 4% North America 8% Europe 88% 95% PNDs PDA/smartphone solutions Other 13
Slide 14: Revenue Analysis
Revenue Analysis Revenue (in € millions) ASP PND’s (in €) 400 500 353 14 400 402 350 3 310 285 300 300 200 277 12 250 8 100 250 13 0 20 Q3 '05 Q2 '06 Q3 '06 200 Units PND’s (in '000s) 336 150 1,250 1,180 257 1,000 217 830 100 750 538 50 500 250 0 0 Q3 '05 Q2 '06 Q3 '06 Q3 '05 Q2 '06 Q3 '06 PND’s PDA
Slide 15: Margin Comparison
Margin Comparison Margins 50% 43.3% 43.5% 42.5% 40% 32.9% 30% 28.5% 23.0% 23.5% 20.6% 20% 13.7% 10% 0% Gross Margin Operating Margin Net Profit Margin Q3 ‘05 Q2 ‘06 Q3 ‘06 15
Slide 16: Operating Expenses Overview
Operating Expenses Overview Q3 % of Q2 % of Q3 % of (in € millions) 2006 revenue 2006 revenue 2005 revenue R&D 8.6 2.4% 9.2 3.3 % 2.3 0.9% Marketing 15.5 4.4% 25.8 9.3 % 10.5 4.2% SG&A 24.0 6.8% 14.2 5.1 % 12.2 4.9% Operating expenses 48.1 13.6% 49.3 17.8 % 25.0 10.0% Stock compensation 5.1 1.4% 4.9
Slide 17: Earnings Overview
Earnings Overview Q3 Q2 Q3 (in € millions) 2006 2006 2005 Operating profit 100.6 63.7 82.2 Financial income and (expenses), net 3.3 (11.9) 3.4 Of which FX gains / losses 0.8 (13.4) 2.1 Income tax (31.2) (14.0) (27.0) Effective tax rate 30.1% 26.9% 31.5% Net profit 72.6 37.8 58.7 Average # of shares
Slide 18: Cash Flow
Cash Flow Q3 Q2 Q3 (in € millions) 2006 2006 2005 Operating profit 100.6 63.7 82.2 Depreciation and amortization 4.5 5.7 0.9 Additions to provisions 10.3 2.5 9.1 Changes in working capital 2.0 (1.7) (39.9) Other operating items 0.1 (4.9) 3.6 Cash generated from operations 117.4 65.3 55.9 Interest re
Slide 19: Balance Sheet
Balance Sheet (in € millions) 30 Sep ‘06 30 Jun ‘06 31 Dec ‘05 Intangible assets 41.8 42.6 15.8 Property, plant & equipment 8.0 7.3 5.2 Inventories 108.7 50.0 103.2 Receivables & others 282.8 233.4 161.0 Cash and equivalents 378.0 281.3 178.4 Total assets 819.3 614.6 463.6 Shareholders’ equity 462.9
Slide 20: 2006 FY Financial Outlook
2006 FY Financial Outlook Full year 2006 guidance increased Revenues now expected to be in the range of €1.3 billion to €1.4 billion (previously €1.1 billion to €1.3 billion) Units in the range of 4.4 million to 4.7 million (previously 3.6 million to 3.9 million) We expect a gross margin of
Slide 21: Questions
Questions
Slide 22: Appendix
Appendix
Slide 23: Financial Summary (first 9 months)
Financial Summary (first 9 months) YTD YTD (in € millions) 2006 2005 change Revenue 886 431 106% Gross Profit 360 187 92% Gross Margin 41% 43% Operating Profit 215 128 68% Operating Profit Margin 24% 30% Net Profit 142 95 50% Net Profit Margin 16% 22% * The figures in the table contain rounded numbe
Slide 24: Revenue Analysis (first 9 months)
Revenue Analysis (first 9 months) Revenue (in € millions) ASP PND’s (in €) 395 1000 400 298 886 300 39 21 800 200 128 94 100 0 600 YTD '05 YTD '06 Units PND’s (in '000s) 431 2,772 23 400 826 49 2,400 1,600 200 909 359 800 384 222 0 0 YTD '05 YTD '06 YTD '05 YTD '06 PNDs PDA/smartphone solutions Othe
Slide 25: Operating Expenses Overview (first 9 months)
Operating Expenses Overview (first 9 months) YTD % of YTD % of (in € millions) 2006 revenue 2005 revenue R&D 23.4 2.6% 6.0 1.4% Marketing 56.2 6.3% 27.7 6.4% SG&A 51.4 5.8% 24.1 5.6% Operating expenses 131.0 14.8% 57.8 13.4% Stock compensation 14.8 1.7% 1.9 0.4% expenses Total operating expenses 145
Slide 26: Earnings Overview (first 9 months)
Earnings Overview (first 9 months) YTD YTD (in € millions) 2006 2005 Operating profit 214.5 127.7 Financial (expenses) and income, net (13.4) 10.8 Of which FX gains / losses (18.7) 9.0 Income tax (59.3) (44.0) Effective tax rate 29.5% 31.8% Net profit 141.7 94.5 Average # of shares outstanding, dilu
Slide 27: Cash Flow (first 9 months)
Cash Flow (first 9 months) YTD YTD (in € millions) 2006 2005 Operating profit 214.5 127.7 Depreciation and amortization 13.1 1.8 Additions to provisions 16.1 10.2 Changes in working capital 15.0 (58.5) Other operating items (2.4) 6.2 Cash generated from operations 256.3 87.4 Interest received 5.9 1.