Strategic priorities

Business review

Our Automotive business today licenses class-leading software components and services to OEMs and Tier 1 head unit vendors. We previously also developed in-dash hardware and we will continue to manufacture this hardware for existing OEM customers. Our more recent focus on software and services has broadened our customer base such that we are now a strong partner for both OEMs and Tier 1 vendors.

OEM expectations for embedded systems are evolving fast, driven by innovation in consumer electronic devices such as smartphones and tablets. The challenge for car makers is to offer an embedded navigation system that matches the expectations of their customers, while keeping them affordable; navigation products must then be scalable, global, and cover their vehicle range.

Car makers will increasingly demand future-proof solutions that are open, modular and upgradeable. Given the complexity of building state-of-the-art infotainment systems, they are looking for suppliers that can help create competitive products that are low cost, low risk and have a fast time-to-market. TomTom Automotive Connected Navigation System (CNS) components can easily be integrated to create location and navigation functions for connected cars.

We believe that navigation will remain essential to the future of in-vehicle infotainment systems. This will include knowing where you are and how you get to your destination, but the navigation function will evolve to span the entire journey, from beginning to the end of the trip, inside and outside the car. We believe that the best end-user experience will be when the embedded navigation system, with an embedded map, is augmented with connected real-time navigation services. This hybrid navigation approach maximises the use of connected services, while ensuring critical functionality will work even with no connectivity.

Our Automotive strategy has been well received by automotive OEMs and Tier 1 in-dash system vendors. We made good progress in delivering a complete set of leading CNS components to our existing customers and securing new deals and partnerships. We continued to build a reputation as a premium connected traffic service provider in the automotive market in 2014. We announced that we will deliver our real-time traffic service to Daimler, Toyota Motor Europe, Fiat Chrysler and Audi (China).

Renault introduced a new Twingo in 2014 with the latest version of the R-Link infotainment system made by TomTom. TomTom will also provide turn-by-turn navigation and maps into the Uconnect™ 5" Radio Nav infotainment system for the new Jeep Renegade line, the new Alfa Romeo MiTo model and the entire family of the FIAT 500L models for Europe. We started shipping a new navigation system to Daimler in 2014. This in-dash navigation product, developed in partnership with Renault, will be available on the new Smart ForTwo and ForFour lines. It has a 7'' capacitive touchscreen and features TomTom maps, navigation software and real-time traffic service.

Our map-making technology puts TomTom in a leading position to provide advanced map features required for Highly Automated Driving. In 2014, we announced a partnership with Volkswagen Research to join forces for the development of Highly Automated Driving systems. TomTom and Volkswagen Research are working on a concept based on the Navigation Data Standard (NDS) to deliver scalable and cost effective automated driving systems that do not require expensive hardware. We also announced a partnership with Bosch SoftTec to integrate our navigation technology and maps into Bosch's Advanced Driver Assistance Systems (ADAS), providing drivers with a more detailed view of the road ahead.

Financial review

Key figures overview

(€ in millions, unless stated otherwise)



y.o.y. change1









EBITDA margin (%)







EBIT margin (%)



  1. Change percentages are based on non-rounded figures.
  2. Reporting structure for the Automotive business unit was reclassified in 2014. The hardware component of previously developed in-dash hardware sales to automotive clients is now reported in Consumer business unit, in order to clearly identify automotive revenue which comes from CNS components. Additionally, due to client portfolio redistribution a minor amount of revenue was moved from Licensing to Automotive.
  3. Automotive D&A costs mainly include amortisation related to our map asset (including acquisition-related amortisation) and our navigation software development.

Our Automotive business generated revenue of €109 million for the year, compared to €111 million in 2013.  

Automotive generated EBITDA of €20 million in 2014, which compares to €38 million in 2013. The EBITDA margin was 18% in 2014 (2013: 34%). EBIT amounted to -€29 million in 2014 (2013: -€12 million).

Automotive's EBIT for 2014 was limited as a result of relatively flat revenue, while we increased our investments in new products and technologies to support the future growth of our Automotive business. This is reflected in higher R&D costs, which mainly relate to the development of our connected navigation products. Our investments in the navigation software mainly relate to our commitment to use the NDS industry standard map format, which we are integrating into our navigation software.

The first results of our investments give us confidence for the future. Our Automotive business bookings for 2014 exceeded €220 million, which together with earlier secured orders will support growth in our Automotive business from 2016 onwards.

Business outlook

In 2015, we will expand the reach of our CNS products to more automotive OEM and Tier 1 customers and we will continue to explore new growth opportunities in the Highly Automated Driving area. Building on the strategic partnerships we entered into in 2014 with Volkswagen Research and Bosch SoftTec, we will reaffirm our position as a key partner in the automotive market with leading mapping and traffic expertise necessary for the future of Highly Automated Driving.