Slide 1: TomTom N.V. Second quarter 2008 results
TomTom N.V. Second quarter 2008 results Harold Goddijn – CEO Marina Wyatt - CFO
Slide 2: Disclaimer
Disclaimer 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 operate
Slide 3: Market and business review
Market and business review Harold Goddijn – CEO
Slide 4: Second quarter highlights
Second quarter highlights • Resilient consumer demand for our products and services • PND product portfolio completely renewed • Unique IQ Routes™ technology introduced • Acquisition of Tele Atlas without remedies • Reported revenue €453 million • Operating result of € 92 million • Net profit of €52
Slide 5: Market size – history and forecast
Market size – history and forecast Market size PND (sell-out) Market size PND (sell-out) Europe North America 7 12 Million units Million units 6 10 5 8 4 6 3 4 2 2 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 (FC) Europe 4 8.5 15 20 US 1 3 11 20 Source: GfK, NPD and TomTom estimates 5 All percentag
Slide 6: Resilient consumer demand, PNDs growing strongly
Resilient consumer demand, PNDs growing strongly • European market grew by 4.3 million units or 30% year on year 80 70 Penetration Level 60 (Europe & North America) • US market grew by 3.7 million units (% of cars with some sort of navigation) 50 40 30 20 or 140% year on year 10 0 • Penetration rate
Slide 7: Market share
Market share Europe North America June 2008 June 2008 TomTom 49% 21% TomTom Q2 2008 Q2 2008 45% TomTom 20% TomTom 7 All percentages and sums are calculated on non rounded numbers © 2008 TomTom
Slide 8: Our product line-up
Our product line-up • TomTom renewed its entire PND product portfolio • Successfully executed product transition - all our new PNDs were available for sale before the start of the important driving season • Positive reception of the new product portfolio • TomTom ONE and TomTom XL - New sleeker desi
Slide 9: TomTom’s added value
TomTom’s added value • Difference between volume and value market share is increasing in Europe • More educated customers lead to more educated purchases • TomTom is transforming the function of car navigation • From a don’t get-lost device to an everyday travel companion 9 All percentages and sums
Slide 10: Tele Atlas – focus on quality and efficiency
Tele Atlas – focus on quality and efficiency • Strengthen market position by delivering superior quality maps – Use TomTom’s customer base and latest technologies – Continued investments in map production capabilities – First results available end 2008 • Increase efficiency – Create a truly focused
Slide 11: Outlook 2008
Outlook 2008 • Outlook TomTom standalone maintained – European and North American markets expected to grow to 40 million units in ‘08, up from 26 million units in ‘07 – Revenue expectation for ‘08 of between €1.8 billion and €2.0 billion – PND unit forecast for ‘08 of between 14 million and 15 milli
Slide 12: Financial review
Financial review Marina Wyatt - CFO
Slide 13: Financial summary – Q2 ‘08 TomTom Group reported
Financial summary – Q2 ‘08 TomTom Group reported (Tele Atlas consolidated from 1 June 2008) in € millions Q2 ’08 Q2 ’07 ∆ Q1 ’08 Revenue 453 380 19% 264 Gross profit 207 169 22% 96 Gross margin 46% 45% - 36% Operating result 92 93 -1% 9 Operating margin 20% 25% - 3% Net result 52 68 -24% 7 Net margi
Slide 14: Financial summary – Q2 ‘08 TomTom Group pro forma
Financial summary – Q2 ‘08 TomTom Group pro forma (Tele Atlas consolidated from 1 January 2007) in € millions Q2 ’08 Q2 ’07 ∆ Q1 ’08 Revenue 485 432 12% 307 Gross profit 243 235 3% 149 Gross margin 50% 54% - 49% Operating result 87 91 -4% (6) Operating margin 18% 21% - -2% Net result 38 42 -10% (24)
Slide 15: Segmental revenue analysis – TomTom only
Segmental revenue analysis – TomTom only Revenue (in € millions) ASP PNDs (in €) 250 500 200 438 150 36 100 195 400 380 50 117 131 28 0 Q2 '07 Q1 '08 Q2 '08 300 264 30 Units PNDs (in '000s) 200 402 352 4,000 234 3,000 100 2,000 3,066 1,000 1,807 1,997 0 0 Q2 '07 Q1 '08 Q2 '08 Q2 '07 Q1 '08 Q2 '08 PN
Slide 16: Operating expenses overview – TomTom only
Operating expenses overview – TomTom only in € millions Q2 ’08 Q2 ’07 Q1 ’08 R&D 16.5 10.2 19.1 % of revenue 3.8% 2.7% 7.3% Amortisation of technology & databases 4.9 3.3 5.6 % of revenue 1.1% 0.9% 2.1% Marketing 36.5 33.3 20.5 % of revenue 8.3% 8.8% 7.8% SG&A 35.5 21.5 36.5 % of revenue 8.1% 5.6% 1
Slide 17: Segmental revenue analysis - Tele Atlas (Apr-Jun)
Segmental revenue analysis - Tele Atlas (Apr-Jun) Revenue (in € millions) Units Maps (in '000s) 80 5,000 73 72 70 16 16 59 60 18 50 14 17 40 4,000 15 30 4,496 20 39 42 27 3,752 10 3,393 0 3,000 Q2 '07 Q1 '08 Q2 '08 Q2 '07 Q1 '08 Q2 '08 PNDs Automotive Other 17 All percentages and sums are calculated
Slide 18: Operating expenses overview – Tele Atlas
Operating expenses overview – Tele Atlas* in € millions Q2 ’08 Q2 ’07 Q1 ’08 R&D 26.7 23.5 26.6 % of revenue 37.1% 32.3% 45.3% Amortisation of technology & databases 11.1 11.3 11.3 % of revenue 15.4% 15.5% 19.1% Marketing 7.4 8.6 7.4 % of revenue 10.4% 11.8% 12.5% SG&A 20.2 21.0 19.4 % of revenue 28
Slide 19: Earnings overview TomTom Group
Earnings overview TomTom Group (Tele Atlas consolidated from 1 June 2008) in € millions Q2 ’08 Q2 ’07 Q1 ‘08 Operating result 92.1 93.4 8.7 Interest result (1.6) 4.6 3.5 Other finance result (2.8) (5.0) 10.9 Result of associate (8.8) - (4.6) Taxation (27.1) (24.6) (11.3) Effective tax rate 34.3% 26.
Slide 20: Earnings overview TomTom Group pro forma
Earnings overview TomTom Group pro forma (Tele Atlas consolidated per 1 January 2007) in € millions Q2 ’08 Q2 ’07 Q1 ‘08 Operating result 86.9 90.8 (5.6) Interest result (24.0) (26.0) (24.7) Other finance result (2.5) (4.9) 11.1 Result of associate (0.7) 0.7 (0.6) Taxation (22.1) (18.5) (3.8) Effect
Slide 21: Cash flow overview TomTom Group
Cash flow overview TomTom Group (Tele Atlas consolidated from 1 June 2008) in € millions Q2 ’08 Q2 ’07 Q1 ’08 Operating result 92 93 9 Depreciation and amortisation 13 5 8 Other (15) 0 2 Changes to provisions 17 21 (6) Changes in working capital (51) (15) 40 Cash generated from operations 55 105 52
Slide 22: Balance sheet TomTom Group
Balance sheet TomTom Group FY ’07 in € millions Q2 ’08 pro FY ‘07 forma Non-current assets Goodwill 1,942 1,895 0 Intangible assets 1,005 1,013 56 Property, plant & equipment 56 42 18 Deferred tax assets 32 34 24 Investment in associate 7 10 817 Current assets Inventories 144 132 131 Receivables, pr
Slide 23: Debt financing
Debt financing • Acquisition debt of €1,585 million incurred from 10 June 2008 • The interest on the loan is based on Euribor plus a margin. The Repayment schedule % of principal borrowings Euribor rate has been hedged • Covenants are based on a net debt over LTM EBITDA* ratio and interest cover 50%
Slide 24: Questions?
Questions? Save the date: TomTom holds its first Capital Markets Day in Amsterdam on 25 September 2008
Slide 25: Appendix
Appendix Tomtom fs)
Slide 26: Accounting charge for share based compensation
Accounting charge for share based compensation Under IFRS, share options have to be accounted in the P&L through a specific charge TomTom accounts for this charge as follows: • At the date of issuance, options were valued by a Black & Scholes model and the calculations have been reviewed by our audi
Slide 27: Explanation accounting result associates
Explanation accounting result associates • Year-to-date result May ’08 of Tele Atlas -/- € 45.4m • Additional amortisation (after tax) resulting from PPA1 € 0.4m • Net loss Tele Atlas adjusted for TomTom PPA corrections -/- € 45.0m • Calculation result associate Tele Atlas: -/- €45.0m * 29.9% = -/-
Slide 28: Outstanding shares
Outstanding shares Common shares outstanding end of Q1 2008 121,804,920 Common shares outstanding end of Q2 2008 121,804,920 Average shares outstanding end of Q1 2008 121,804,920 Share options as of end of Q1 2008 9,537,919 Exercised share options in Q2 2008 0 Forfeited share options in Q2 2008 1,49