TomTom is back on track

Harold Goddijn, co-founder and CEO of TomTom, generally expresses with caution. Now, he launches his role: "What a fantastic neighborhood!"

Goddijn refers to the revenue growth of the TomTom division which supplies maps to automakers. Orders in this industry are turning so fast that TomTom is raising its expected annual total business turnover from 800 million to 825 million euros. Quickly, TomTom's share went up 7 percent and was Tuesday the biggest climber on the stock market. Is the increase in turnover expectations a tip to raise the price or TomTom on the way home?

The TomTom branch's business turnover grew 6% in the last quarter (and reached 93 million TomTom) business figure of 231 million euros). But growth does not make up for deforestation under the shipping crates. In 2009, TomTom generated a turnover of 1.7 billion euros. Until the smartphone threw a key in the works and the consumer branch began to shrink. The profitability of the consumer business has improved since TomTom canceled its sports watches last year. TomTom continues to develop software to satisfy existing customers, and a buyer for the sports industry is not solicited.

Read also how navigation systems lead us from A to B: How TomTom bypasses traffic jams

Branch of activity

Growth is expected to come from automakers who supply their navigation systems integrated with digital maps and file information. They know TomTom, according to Goddijn. It calculates that the business line's turnover has increased annually by 100 million euros since 2014.

It takes a year or two before the software is in vehicles and that money really arrives; the car industry is slow. But if the trend continues, TomTom can start growing again for the first time in ten years.

"This ladder is always a point," says Goddijn, again in his usual tone. TomTom must be the size to invest in extra-accurate maps. These form the basis of the self-driving car – the future of the automotive industry.

These maps are laborious to build. This is also a new market: the licenses are distinct from the transactions that TomTom currently has with car manufacturers.

This year, fatal accidents with (partly) autonomous vehicles have generated a lot of publicity. For example, Uber abruptly stopped testing with robotic taxis on public roads in Arizona after a pedestrian was killed.

Complex Technology

Does this affect TomTom's ambitions for the autonomous car? Goddijn: "Automakers are concerned about the reaction of the public to such accidents.There is still a lot of uncertainty about this complex technique.The fully autonomous cars, without steering wheel and pedals, seem a little further than expected But on the highway, greater autonomy will actually succeed and road safety will increase steadily, and technology can prove itself and become more affordable cars. "

Last month, TomTom's price dropped after Apple announced that it was going to manufacture cards for the iPhone. Until now, the phone maker TomToms used services for its navigation application. According to Goddijn, Apple has signed a "long-term" license agreement with TomTom, which was renewed in 2015. Apple, which is also developing a self-propelled technology, wants to make a map in California at the moment. Apple hopes to catch up with its competitor Google Maps.