TomTom reported a loss of €160.1 million in its second quarter against earnings of €12.2 million in the same period a year ago.
The latest quarter included a non-cash impairment charge on the entire goodwill of the Consumer segment of €169 million.
“The difficult market circumstances combined with lower sales than planned for the second quarter has resulted in a downward revision in the future profitability projections for Consumer Sports,” said TomTom in a statement. “As a result, TomTom recorded a full impairment charge against the goodwill of the Consumer segment of €169 million in the second quarter 2017. This non-cash impairment charge is included within operating income (loss). The goodwill that was impaired was originally recorded at the time of the acquisition of Tele Atlas in 2008.”
Excluding the charge, earnings would have declined 9.5 percent to €21.0 million from €23.2 million a year ago. Gross margins reached 63 percent, up from 55 percent a year ago. EBITDA reached €45 million against €44 million.
Revenues declined 4.4 percent to €253.4 million. Consumer sales sunk 19.7 percent to €126.3 million. Telematics sales inched up 0.5 percent to €40.1 million while Automotive & Licensing revenue jumped 27.8 percent to €87 million.
TomTom’s CEO, Harold Goddijn, said, “Our strategy is to build on our navigation technologies to provide location-based content, software, and services to business customers, with high margins and recurring income. Combined Automotive, Licensing and Telematics revenue grew by 18% year on year in the quarter, ahead of expectations.”
Looking ahead, TomTom now expects to deliver full year revenue around the lower end of its guidance of between €925 million and €950 million. Outlook for adjusted EPS1 of around €0.25 is unchanged.
Photo courtesy TomTom