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Licensing Business & Financial review

4.1


STRATEGIC PRIORITIES

• Take advantage of the new mapmaking platform to deliver real-time maps
• Maximise Licensing revenue via existing and new customers
• Broaden product portfolio by new map feature offerings and by stronger location-based services delivering online maps

4.2Business review

In 2015, we have seen an increased interest in our strengthening product portfolio, especially as a result of the development and launch of our new mapmaking platform. In addition, recent developments within the mapmaking landscape and competition led to an increased number of existing and new customer discussions. As a result, our sales channels, Consumer Licensing, TomTom Geospatial and Expansion Markets, grew and diversified their global customer base during the year.

We signed several new partnerships, such as Uber, who will be using our global maps and traffic products for the Uber driver application. We have also renewed and extended many existing partnerships, including with Apple, which renewed its global agreement with TomTom for maps and related information.

The partnership announced with Mozilla to bring our Maps and Navigation online apps to the Firefox OS smartphone devices is a good example of the ongoing diversification in our product portfolio, which now also contains online maps. By using our maps online, consumers have the benefit of not having to download the full map content to their device.

With the growing crowd-source reports and expanding sensor input (e.g. probes) received via our customer partnerships we continue to improve our real-time map products with high levels of efficiency. Through these partnerships we were also able to further improve and expand our traffic product.




4.3Financial review

Licensing revenue in 2015 was €142 million, 27% higher compared with last year (2014: €112 million). The increase in revenue was driven by the renewal and increased scope of existing contracts, addition of new customers in the B2BC segment as well as good progress made in the Geospatial segment.

Table_3 Key Figures Licensing

 
 
(€ in millions, unless stated otherwise) 2015 2014 y.o.y. change1
Revenue 142.1 111.6 27%
EBITDA2 42.3 30.1 41%
EBITDA margin (%) 30% 27%  
EBIT 0.0 -11.4 -100%
EBIT margin (%) 0% -10%  
 
1. Change percentages are based on non-rounded figures.
2. Licensing D&A costs mainly relate to our map asset (including acquisition-related amortisation).

Licensing generated EBITDA of €42 million in 2015, 41% higher compared with last year (2014: €30 million). This translates into an EBITDA margin of 30% (2014: 27%). Licensing EBIT amounted to nil in 2015 (2014: -€11 million). The year on year increase in Licensing profitability is the result of a higher revenue and improved gross margin partly offset by higher investments in our maps.



BUSINESS OUTLOOK

We believe that the trend of growing location awareness will provide a wealth of future opportunities. As TomTom is a truly independent content and service provider that has developed the technology of the future, we are well positioned to play an important role.

The new mapmaking platform will enable us to create fresh and more detailed maps with high quality that takes full advantage of the growing sensor data offered through connected devices. These maps, combined with our leading traffic products and online delivery platform, give us a very competitive and complete product portfolio.

In 2016, we will focus on growing our online maps and traffic business. We aim to achieve this by further broadening the customer base and with new product
introductions.