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TomTom, the satellite navigation company, rushes to the Amsterdam Stock Exchange after announcing a loss in the fourth quarter that was lower than market forecasts, thanks to the strong acquisition of orders from the automotive sector. The stock rose by 9.3% to 6.88 euros shortly after 11am. TomTom recorded a negative EBIT of 10.4 million euros in the September-December 2023 quarter, more than double compared to the -4.5 million of the previous year, but the consensus of analysts pointed to an even worse red, equal to 12 million euros.
Renovation costs
Quarterly EBIT, on the other hand, includes restructuring charges of 10 million euros related to the rationalization of research and development activities, Chief Financial Officer Taco Titulaer said in a statement. The quarter’s loss widened to 11.6 million from 8.8 million, while revenue increased 3% to 143.4 million and free cash flow improved to +5 million from -14.6 million.
Annual balance
The full year ended with revenues up 9% to 585 million, an Ebit of -20 million from -98 million and a loss of 21 million versus -103 million. Free cash flow is positive for 32 million against an outflow of 29 million in 2023.
In 2023, the order book of customers in the Automotive sector reached a record level of 2.5 billion euros at the end of the year, compared to 2.4 billion in the previous year, TomTom underlined. After having been the pioneer of road navigation devices for cars, the group suffered the backlash of competition from new digital tools, such as smart phones, and began a major reorganization. Now TomTom is also developing high-definition autonomous driving maps that integrate consumer data and advanced driver assistance navigation systems. “For 2024 our projections are cautiously optimistic. We have a considerable growth pipeline for TomTom Orbis Map. We expect continued growth in our Location Technology revenues, combined with an improvement in our free cash flow,” continued Ticulaer.
For 2024 the group expects a turnover of 560-610 million, 490-520 from Location Technology and an increase of more than 5% in free cash flow. The group also confirmed the target of revenues of 600 million in Location Technology in 2025 with a free cash flow equal to 10% of turnover.