The year 2022 was already described by CEO Harold Goddijn as a ‘sad year’ in February, because the chip shortage ensures that the number of new cars is expected to remain low. The outlook for 2022 therefore does not extend beyond sales consolidation for TomTom’s most important operations, with a sharp decline in sales from consumer navigation boxes. Growth is not expected until 2023.
The Amsterdam-based company came out on Friday with a net loss of 55 million euros for the second quarter, partly due to a 31 million euro charge it is taking for restructuring it announced in early June. With automated map creation processes, TomTom can manage with less than 500 people (about 10% of its workforce). Sales were in line with analysts’ forecasts, and losses were slightly ahead of consensus, while lower cash flow provided a welcome surprise.
Help from the dollar
Technology sales to automakers grew 12% to €71 million, due to increased vehicle sales and contract expansion. TomTom navigation technology appeared in the new Opel Astra and Citroën C5 models, among others. The 8% increase in revenue from third-party booking technology sales was primarily due to a higher dollar. Consumers still sold 27.3 million in navigation and map boxes, which was again 10% less than a year ago.
According to CEO Harold Goddijn, his company has performed as expected and there is “strong activity regarding contracts with the automotive industry”. CFO Taco Titulaer speaks in a press release about the ‘solid performance’ for the last quarter and the ‘belief that we can reach our initial estimate’, of stable revenue for the technology area in 2022 and growth in 2023. free cash flow between of 2022 and 2023 is driven by a combination of efficiencies following improvements in our mapping process and growth in operating income, the latter accounting for more than half of the impact.”
No deals or developments in the field of self-driving car navigation and related technologies in which TomTom has invested heavily in recent years were not disclosed on Friday.