Tomtom Nv · EURONEXT:TOM2
Tomtom Nv — Q4 2005 Earnings Presentation
28 slides from Tomtom Nv's earnings presentation, Feb 14, 2006
Slide 1: Fourth Quarter Results Presentation
Fourth Quarter Results Presentation 14 February 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
Slide 3: Agenda
Agenda Topic Speaker 1) 2005 Highlights Harold Goddijn (CEO) 2) 2005 Q4 Financials Marina Wyatt (CFO) 3) 2006 Strategy and Harold Goddijn (CEO) Goals 3
Slide 4: 2005 Highlights
“2005 Highlights tomtom
Slide 5: Key success drivers
Key success drivers Category-Defining Products Leading Brand Highly Scalable Strong Distribution Business Model 5
Slide 6: Despite rapid growth, still a large under-penetrated market
Despite rapid growth, still a large under-penetrated market 20% Europe: 200 million 16% cars on the road but 12% 8% only 13%* with 4% 0% navigation 2002 2003 2004 2005 Europe: % of total cars on the road with navigation Source: market research and analysts estimates US: 220 million cars 20% 16%
Slide 7: TomTom growth in 2005
TomTom growth in 2005 € 800 € 600 € 400 Strong growth in consumer € 200 adoption of personal €0 2002 2003 2004 2005 navigation TomTom Revenue in millions 2,000 1,500 TomTom grew rapidly: 1,000 –Revenue nearly 4 times 500 0 –Volumes of integrated units 2002 2003 2004 2005 nearly 7 times TomTom In
Slide 8: Growing market share
Growing market share European Market Broad and deep retail 60% 50% distribution 40% 30% 20% J/F M/A M/J J/A S/O N/D Consistent product European market share development 2005 (Source: GfK) and channel strategy US Market 25% Broad product line up 20% 15% 10% 5% 0% Apr May Jun Jul Aug Sep Oct Nov
Slide 9: Gross Margin
Gross Margin: Focus on volumes and costs to drive profitable growth 800 € 500 € 400 600 € 300 400 € 200 200 € 100 0 €0 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Integrated units volumes (000s) Average selling price € 125 50% € 100 46% € 75 42% € 50 38% € 25
Slide 10: Q4 highlights
Q4 highlights Sell through doubled Increased market share Successful ramp up of TomTom ONE Relatively stable prices 16% 16% QQ onon QQ revenue revenue growth growth stable stable gross gross margin margin at at 43% 43% 10
Slide 11: Q4 Financial Results
YQ4 Financial Results tomtom
Slide 12: Financial Summary
Financial Summary Q4 ‘05 Q3 ‘05 ∆ FY ‘05 FY ‘04 ∆ (€ millions) Revenue 289.0 250.0 16% 720.0 192.4 274% Gross Profit 123.4 108.3 14% 310.8 85.2 265% Gross Margin 43% 43% - 43% 44% - Operating Profit 67.4 82.2 (18%) 195.1 43.4 350% Operating Profit Margin 23% 33% - 27% 23% - Net Profit 48.4 58.7 (17%
Slide 13: Revenue Analysis
Revenue Analysis Revenue (€ millions) ASP (€) 400 402 289.0 337 280 10.1 300 16.4 250.0 200 13.5 240 125 116 20.0 100 200 0 Q3 05 Q4 05 160 Units (thousands) 262.5 800 779 120 216.5 600 538 80 400 40 200 160 140 0 0 Q3 05 Q4 05 Q3 05 Q4 05 Integrated Non-Integrated Other 13
Slide 14: Revenue by Product and Geography
Revenue by Product and Geography By Product Group By Geography FY 2005 FY 2005 9% 5% North America 6% Australia 1% Europe 93% 86% Q4 2005 Q4 2005 6% 3% North America 9% Australia 1% Europe 90% 91% Integrated Devices Non-Integrated Devices Other 14
Slide 15: Margin Comparison
Margin Comparison Margins 50% 44.3% 43.3% 42.7% 43.2% 40% 32.9% 30% 27.1% 23.3% 23.5% 22.6% 19.9% 20% 16.8% 14.4% 10% 0% Gross Margin Operating Margin Net Profit Margin Q3 ‘05 Q4 ‘05 FY ‘04 FY ‘05 15
Slide 16: Operating Expenses Overview
Operating Expenses Overview Q4 ‘05 Q3 ‘05 €m % of Rev. €m % of Rev. R&D 3.0 1.0% 2.3 0.9% Marketing 35.9 12.4% 10.5 4.2% Other SG&A 13.9 4.8% 12.2 4.9% Operating Expenses 52.7 18.2% 25.0 10.0% Accounting Charge for Share 3.3 1.2% 1.1 0.4% Options Total Operating Expenses 56.1 19.4% 26.1 10.4% * The
Slide 17: Operating Expenses Overview (full year)
Operating Expenses Overview (full year) FY 2005 FY 2004 €m % of Rev. €m % of Rev. R&D 8.9 1.2% 4.6 2.4% Marketing 63.6 8.8% 19.4 10.1% Other SG&A 38.0 5.3% 16.8 8.7% Operating Expenses 110.5 15.3% 40.8 21.2% Accounting Charge for Share 5.2 0.7% 1.0 0.5% Options Total Operating Expenses 115.8 16.1% 4
Slide 18: Earnings Overview
Earnings Overview (€ millions) Q4 2005 Q3 2005 FY 2005 FY 2004 Operating profit 67.4 82.2 195.1 43.4 Financial expenses and 3.8 3.4 14.7 (0.8) Income, Net Of which FX gains / losses 3.3 2.1 12.3 (0.4) Income tax 22.8 27.0 66.8 14.9 Effective tax rate 32.0% 31.5% 31.8% 35.0% Net Profit 48.4 58.7 143.
Slide 19: Cash Flow
Cash Flow (€ millions) Q4 2005 Q3 2005 FY 2005 FY 2004 Operating profit 67.4 82.2 195.1 43.4 Depreciation and amortization 1.7 0.9 3.4 1.1 Additions to provisions 10.7 9.1 20.9 0.3 Changes in working capital (76.1) (39.9) (134.6) (2.5) Other operating items 11.4 3.6 17.7 2.1 Cash generated from oper
Slide 20: Balance Sheet
Balance Sheet (€ millions) YE 2005 Q3 2005 YE 2004 Non-Current Assets Intangible assets 15.8 13.8 1.0 Property, plant & equipment 5.2 3.8 2.1 Current Assets Inventories 103.2 68.0 13.4 Receivables, Prepayments & 161.0 136.2 34.3 Financial Instruments Cash and Equivalents 178.4 230.5 40.2 Total Asset
Slide 21: 2006 Outlook
2006 Outlook We have assumed the European market for integrated portable navigation devices will grow to around 7.0 million units in 2006, up from around 3.8 million units in 2005 We estimate that integrated unit volumes for TomTom will almost double to 3.0m – 3.3m units Revenues are estimated
Slide 22: 2006 Strategy and Goals
we 2006 Strategy and Goals tomtom
Slide 23: Our Strategy
Our Strategy Continue to deliver innovative new products supported by Maintain market investment in the brand Broaden the scope of leading position in our products in the Europe and continue to business to business grow the market in the market US Continue to build the Develop deeper and retail chan
Slide 24: Headline Goals for 2006
Headline Goals for 2006 I. Successful introduction of a range of innovative new products II. Grow US market and broaden distribution III. Expand automotive and mobile operator channels IV. Introduce TomTom WORK Leverage off data factory acquisition to provide connected navigation and tracking & trac
Slide 25: Appendix
“ Appendix tomtom
Slide 26: Accounting Charge for Share Options
Accounting Charge for Share Options 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 are valued by a Black & Scholes model and the calculations are reviewed by our auditors The monthly cha
Slide 27: Average number of fully diluted shares outstanding
Average number of fully diluted shares outstanding Common Shares Outstanding end of Q3 2005: 107,281,473 Common Shares Outstanding end of Q4 2005: 107,281,473 Average Shares Outstanding Q4 2005: 107,281,473 Share Options as of end of Q3 2005: 10,878,259 New Shares Options as of 10 Nov 2005(1): 3,314
Slide 28: Share options vesting schedule 2006-2008
Share options vesting schedule 2006-2008 8 Jan 24 Mar 1 Jun 3 Jun 1 Sep 28 Nov 1 Jun 1 Nov 1 Dec 10 Aug 10 Nov 2006 1 2006 2006 2006 2006 2006 2007 2007 2007 2008 2008 1,151 € 0.02 2,000 € 0.02 164 € 0.25 164 € 0.02 2,000 € 0.25 164 € 0.25 2,081 € 0.75 1,500 € 3.75 Number of options 214 € 3.75 to be