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TomTom's activities at a glance

Our activities are organised around three businesses: Automotive & Licensing, Telematics and Consumer.

2.2.1

Automotive & Licensing

Automotive & Licensing business licenses maps, online services such as traffic and navigation software, to customers as components to use in their applications. These location-based application components are licensed through our Automotive business unit to automotive customers (mainly OEMs and Tier1 head unit vendors) for in-vehicle navigation, ADAS and Autonomous Driving. Through our Licensing business unit we provide these components to other than automotive customers such as technology companies, geographical information systems (GIS) providers, governmental bodies and traffic management institutions. Many customers, particularly automotive customers, use our system integration service to help them integrate our components into their navigation application systems.

Telematics

Telematics business provides a range of telematics services for businesses with a fleet of connected vehicles, including fleet management and other Connected Car services. Telematics also offers under-the-bonnet telematics devices and over-the-dash driver terminals.

Consumer

Consumer business develops and markets smart consumer electronics devices in the Drive and Sports categories. Drive products consist mainly of consumer portable navigation devices but also includes driver terminals for businesses. Sports products consist mainly of wrist-based wearables for sports and fitness activities.

2.2.2

2.2.3 Our People & Culture

2.2.3.1

WE ARE PAVING THE WAY FOR AN ENTREPRENEURIAL, AUTONOMOUS & LEARNING CULTURE; TomTom has over 4,700 global 'Intrapreneurs', all driving us into the future and leading the way for TomTom to be a success

2.2.3.2

People first, entrepreneurial, accessible, not standing still, trust and democratisation. These key values are the 'red thread' that binds the TomTom culture. These values are at the core of TomTom. Being able to think for yourself, taking risks and ownership and showing accountability are traits that can be found in almost every employee, at every level in the organisation. At TomTom, everyone acts as a business owner. Everyone is accountable.

After 25 years in business, the start-up mentality has never left the building. It is in our DNA. This environment allows for creative thinking, quick solutions and does not let organisational layers impede the process to just get things done. We aim to remain as flat as possible so that employees are able to work faster, smarter and with few constraints.

Our founder-spirit rubs off on each and every employee. The founders are still very involved in the company. TomTom is more than just an employer. TomTom invests in the growth of employees. It is a company where people can grow and learn faster than they can at other companies. And, given the influx of a new generation of young talent, learning and development is valued as one of the top three drivers and motivators of this generation.

Our employees are motivated, skilled and are ready to push the boundaries of what is achievable every day. At TomTom, they are encouraged to do just that.

2.2.3.3

2.2.4 Research & Development

2.2.4.1

TomTom invests a high proportion of its revenue in R&D, which covers all product development, including our map releases, our mapmaking information systems, product-related online services, device software, and hardware development projects.

In 2016, our R&D cash spending totalled to €283 million, an increase of 6% compared with 2015. We have over 3,100 people working in R&D across 36 countries.

 In our Automotive & Licensing business, the R&D investments include the following:

  • Transitioning our mapmaking and navigation software to the NDS industry standard navigation map format, which has been extended for ADAS applications and for Autonomous Driving;
  • Building an HD map for Autonomous Driving applications;
  • Ongoing development of our mapmaking information systems;
  • A new online service for predicting on-street parking availability, based on analysing location traces;
  • Machine learning in Autonomous Driving.

In our Telematics business, the R&D investment include transitioning our WEBFLEET back-end into a telematics service platform that can support a wider set of Connected Car services and modernising the WEBFLEET user interface framework.

In our Consumer business, the majority of R&D investments will be in our Sports category in 2017. We are also investing in our Bridge driver terminal range. 

2.2.4.2

2.2.5 Key Financials for 2016

2.2.5.1

 

WE REPORTED REVENUE OF €987 MILLION IN 2016 AND GROSS RESULT OF €566 MILLION; we are reducing our dependency on hardware products by growing high gross margin, recurring data, software & services business

2.2.5.2

In 2016, we delivered revenue of €987 million, a 2% decline compared with €1,007 million in 2015.  Automotive, Telematics and Consumer Sports businesses grew strongly, partially offsetting the reduction in Consumer Drive revenue; Consumer Drive remained the biggest revenue contributor for the group. Licensing showed a modest decline year on year. The proportion of hardware revenue was 51% (2015: 55%) of total revenue in 2016 and revenue from data, software & services accounted for 49% of total revenue (2015: 45%). From a regional perspective, 78% of our 2016 revenue was generated in Europe (2015: 77%), 17% in North America (2015: 18%) and the remaining 5% in the rest of the world (2015: 5%).

This year, our gross result increased with 9% to €566 million (2015: €519 million), mainly due to a change in our product mix. Gross margin was 57% compared with 52% in 2015. EBITDA reached €141 million, an increase of 14% compared with 2015 (2015: €124 million). EBIT amounted to €9 million in 2016, (2015: €1 million) reflecting the higher gross result partially offset by an increase in operating expenses. The net result for 2016 was €12 million (2015: €18 million), translating to adjusted earnings per share of €0.23 (2015: €0.21). At the end of 2016, the net cash position was €133 million (2015: €98 million).

2.2.5.3

 
For an explanation of the Non-GAAP measures mentioned above please refer to the section Non-GAAP measures.