The revenue growth of the TomTom only business (excluding Tele Atlas) over the past quarter amounted to €175 million or 66% sequentially and €58 million or 15% year on year.
The reported Group results include one month of Tele Atlas revenue as Tele Atlas was acquired in early June 2008. For the full quarter pro forma Tele Atlas revenue increased to €72 million, up from €59 million in the first quarter of 2008. Year on year Tele Atlas revenue was stable (Q2 2007: €73 million).
TomTom PND sales represented 83% of pro forma Group revenue in the quarter (Q1 2008: 76%; Q2 2007: 81%) and increased by €168 million or 72% compared to the first quarter, to €402 million. (Q2 2007: €352 million).
Europe represented 73% of total pro forma revenue for the Group for the quarter (Q1 2008: 67%; Q2 2007: 80%), North America represented 24% of total revenue (Q1 2008: 32%; Q2 2007: 16%) and the rest of the world was 3% of total revenue (Q1 2008: 1%; Q2 2007: 4%). In the TomTom only business revenue from North America for the quarter represented 23% of revenue, an increase of 8 percentage points year on year (Q2 2007: 15%) and a decrease from 32% in Q1 2008.
TomTom shipped 3,066 million PND units in the quarter, an increase of 54% sequentially (Q1 2008: 1,997 million) and an increase of 70% year on year (Q2 2007: 1,807 million).
The average selling price for PNDs in the second quarter was €131, an increase of 12% compared to the previous quarter (Q1 2008: €117). But compared to the same quarter last year the ASP decreased by 33% (Q2 2007: €195). ‘The sequential increase in ASP was driven by new product introductions and a reduction in end of life promotional activities”, said TomTom.
The gross margin for the Group was 45.6%. The pro forma gross margin was 50.2%, an increase of 1.6 percentage points sequentially (Q1 2008: 48.6%) and a decrease of 4.2 percentage points compared to the second quarter of last year (Q2 2007: 54.4%). The gross margin for the TomTom only business increased by 5.2 percentage points sequentially to 41.6% (Q1 2008: 36.4%).
“The increase in gross margin mainly results from the increased ASP and from reductions in the bill of material costs”, said TomTom. “The higher Group gross margin is explained by the high gross margin contribution of Tele Atlas”, added the TomTom press release.
During the second quarter TomTom estimates the European market grew by more than 30% compared to the same period last year to approximately 4.3 million units and the North American market grew by 140% to approximately 3.7 million units. TomTom estimates its European market share “between 45% and 50%” (Q2 2007 was “around 50%”) and its North American share of “more than 20%” (same as Q2 2007).
TomTom expects “the European and North American markets for PNDs to each grow to 20 million units this year, representing a total growth of over 50% compared to last year”.
TomTom Group’s Chief Executive Officer, Harold Goddijn commented the results saying: “Consumer demand for our products and services proved resilient in the face of difficult macro economic conditions.”
Therefore TomTom maintains its volume outlook of selling between 14 million and 15 million PND units worldwide and continue to expect revenue for the TomTom business of between €1.8 billion and €2.0 billion.”