Van die bank die JULLIE zakenbank heeft overgenomen omdat JULLIE er een zooitje van maakten en fraude......
Our analysis: As expected, Automotive revenue was very strong, even stronger
than our above consensus estimate, resulting from model penetration at PSA
Citroen and good volume growth in other contracts (see note of yesterday on PDS
Citroen, Renault and FIAT). Licensing was equally strong but Telematics
disappointed with the CEO saying in the call this morning that “yeah, we need to fix
that”. (ARPU down to EUR 14, subscription growth down to 7%). The gross margin
was very strong meaning that even with somewhat higher than expected opex,
EBITDA came in well higher than expected. The impairment of EUR 169m in fact
wipes out all of the Consumer related goodwill not just Sports. When asked why not
sell the whole Consumer division, CEO Goddijn answered that TT is still the best
owner of the asset (suggesting that bids have been made, in our opinion, but that
these were too low) and that the unit is generating cash. Can TomTom sell Spots?
Given declining revenue, the need for high marketing spend and the competition in
the wearables market, proceeds (if any) will be minimal. Halting the business may
also be the outcome of the strategic review.
For 2H17 TomTom expects revenues to be down ‘markedlly’, solid gross margins
and opex down sequentially and year on year, which despite the negative cash flow
from Sports, bodes well for overall cash flow in 2H17. In fact, CFO Titulaer said on
the call that even with the EUR 50m share buy-back, TomTom would be generating
FCF.
Conclusion & Action: The high growth in Automotive is very positive, as is growth
in licensing but the slowing growth in Telematics is a concern as is the decline in
Sports. A sale or the halting of Sports would lower marketing spend and create
more focus but with the PND business still there, the overall picture does not
change. We remain cautious (Neutral) as we are concerned about the slowing of
Telematics and the long term developments in Automotive, mainly related to
increased competition and uncertainty on map ASPs.