During this quarter, revenue was €528 million, Ebitda was €98 million and net profit €70 million. Gross profit margin was 45%, Ebitda margin 19%. TomTom generated €251 million cash flow from operations. The net debt of the company is now €1,109 million, reduced by €213 million (Q3 2008 €1,322 million).
For the full year 2008 TomTom Group revenue was €1,674 million, down 3.6% from 2007 (1,737 million).
PND market decline
According to TomTom, in the Fourth quarter the whole European PND market declined 7% year on year to 4.9 million units and grew sequentially by 19%. In North America the market increased 12% year on year to 8.0 million units which represents sequential growth of 150%.
TomTom shipped 4.443 million PNDs in the quarter, an increase of 76% sequentially (Q3 2008: 2.526 million) and an increase of 4% year on year (Q4 2007: 4.278 million).
The average selling price for TomTom’s PNDs in the fourth quarter was €100, a decrease of 26% compared to the previous quarter (Q3 2008: €136) and a decline of 29% compared to the last quarter of 2007 (Q4 2007: €141). On that topic TomTom said “the sequential decrease in ASP is due to geographical and product mix shifts as well as promotional activities. We expect that the pace of ASP decline will reduce in 2009.”
Market shares were rather stable sequentially; TomTom estimates its share to be 46% in Europe and 23% in North America during the Fourth quarter.
TomTom also gave an update about its PND inventory: “Channel inventory of TomTom PNDs continued to decrease in absolute terms in the past quarter, especially in Europe. However retailers are cautious, and channel inventory still needs to be reduced which will limit our sell in opportunities in the first quarter.”
Tele Atlas results for the full year have been disappointing, as a matter of fact the map maker generated 6% less revenue than in 2007 and an operating loss of €9 million (€1 million last year). While The PND category grew by more than 30% in 2008, its PND map revenue was down 11% and the number of map licenses sold (PNDs, in-dash and other) only grew 8%. Today the mapping company represents only 10% of TomTom’s Group revenue.
Those poor results explain the goodwill impairment charge of €1,048 million. “Tele Atlas is core to the strategy of the group”, explained the press release, “however the worsening macro environment means that currently we cannot sustain the full valuation of the acquired business of Tele Atlas as established at the time of the acquisition.” This €1 billion write off is pretty much in line with what the bidding war against Garmin cost to TomTom. Its first bid for Tele Atlas was €2 billion but after a €2.3 billion offer from Garmin the Dutch company ended up paying €2.9 billion.
In the last quarter of 2008 73% of the map licenses sold by Tele Atlas (6.062 million) were to TomTom (4.443 million PNDs), a 9% increase from a year ago (6.667 million licenses; 4.278 million TomTom PNDs) which underlines the shrinking addressable PND market for Tele Atlas outside of its parent company.