TomTom Wants to Steer Its Own Course as It Remodels Business

TomTom, the navigation and mapping company, intends to remain independent but could work with other groups as it focuses more on winning business from major carmakers, its chairman said on Tuesday.

The Dutch group earlier reported better than expected first-quarter core earnings, despite a decline in sales, sending its shares higher.

Speaking to investors at its annual meeting, Chairman Peter Wakkie stressed that the company intended to remain independent but could work with other groups as it shifts away from the consumer market.

That "doesn't mean that TomTom is not open to partnerships of whatever kind: there is no objection to that from within TomTom, in principle," Wakkie said.

But, the company will only disclose new partnerships or deals once they become concrete, he added.

In March, Reuters reported that TomTom has engaged Deutsche Bank to help seek a buyer for some or all of the company. After initially declining comment, TomTom said it has not mandated an advisor for a sale of the whole company.

The Dutch company sees itself as a provider of navigation and mapping technologies that will play an important role in assisted driving and self-driving cars. It has already signed partnerships with Germany's Bosch and China's Baidu, among others.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at EUR 43 million ($53.25 million), beating average expectations of EUR 34 million in a company-published poll and unchanged from the first quarter of 2017.

The company's shares gained 2.6 percent to EUR 8.006 by 1215 GMT, giving it a market value of around EUR 1.8 billion. The shares have lost around 3 percent this year.

Sales dropped by 10 percent to 192 million euros as the company's personal navigation device (PND) business shrank further.

The company's automotive sector sales rose by 42 percent to EUR 78 million, following long-term contract wins from several major carmakers.

CEO and founder Harold Goddijn told shareholders it was too early to forecast the size of new automotive contracts the company may win this year, although he said the overall value of contracts available in 2018 will be less than it was in 2017.

The company maintained a forecast for overall 2018 sales to drop to EUR 800 million from EUR 903 million in 2017, as the popularity of PNDs fade.

© Thomson Reuters 2018