TomTom NL0013332471

slides conference call online

1. [verwijderd] 22 februari 2007 11:06

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   investors.tomtom.com/tomtom/presentat...
   
   voor de call zelf is't wachten tot 14u
2. [verwijderd] 22 februari 2007 14:42

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   call is bezig
   
   ben bezig met Q&A session te noteren, ik zal straks mijn nota's online zetten...
3. [verwijderd] 22 februari 2007 15:05

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   de call is gedaan, ben nu nog mijn nota's aan het samenvatten.
4. [verwijderd] 22 februari 2007 15:06

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   Ben benieuwd naar je samenvatting. Heb zelf geen gelegenheid het te bekijken.
5. [verwijderd] 22 februari 2007 15:26

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   hier zijn de nota's in heel ruwe vorm, mijn commentaar staat [binnen vierkante haakjes]
   
   Headcount: 700 Q3 naar 800 Q4
   
   morgan stanley:
   Q:how will you gain share in US? which investments in brand/share will you do?
   A: start gaining market share this year
   Q: what to do with the cash?!
   A: 2007 no dividend, no cash distribution
   
   lehman:
   Q: gross margin: bill of materials, how are you bringing the cost down?
   how to manage the implied 25% asp reduction?
   will we get a different H1 this year because there are no new products?
   A: reduction =
   1. because cost of components down, low component storage (low inv)
   2. design changes: we use less components
   3. scale is working: more pricing power
   but we'll have a lower rate of cost decline
   Q: new products?
   A: there will be product transitions going forward, but less accelerated replacement, now a more gradual replacement, new & old product lines sitting together on the shelf for longer
   Marina: in Q1 of last year, old go range was end of life => low margins, high volume, no longer this year, so better margins
   
   Felix oberdorfer:
   Q: small questions: 1. current traffic users (traffic receiver), what's the penetration?
   A: low % of users are paying for TT plus and the RDS TMC: penetration not very high
   "everybody wants traffic information, but content quality insufficient, which is why it hasn't been adopted widely yet, with the new tech (applied generics), we can address this problem"
   "the computer will calculate on its own what the new route will be"
   result: the PND is no longer a "don't get lost" device, but more often used, used every day to evade traffic jams, this will be visible in 07, will be a slow change in customer's minds
   Q2. investments in people? [more employees?]
   A: engineering, we'll accelerate product r&d, we have a 3 year product roadmap, first results will be visible in 07, more widespread new products in 08
   Q3. are % estimates still valid? [vorige conference call zei marina: 2-3% r&d en 8-10% marketing]
   A: r&d will be 3% of rev, marketing 7%
   Q4. are there any acquisition opportunities?
   A: nothing specific on the horizon, but we'll remain flexible
   Q5: if dollar remains the same, what will be the impact on gross margin & financial results?
   A: if dollar weakens -1%, gross margin +0,4% (with a 1-1,5 month delay due to inventories)
   financial income: about 6 months hedged with contracts, first 3m hedged 100%, immediate impact
   so first: hit in financial expenses, 1m later there are benefits in gross margin [in Q4 was er een hit in fin expenses, gross margin in Q1 zou dus beter moeten zijn]
   
   merril lynch:
   Q: 1. what are your upcoming services, are they related to the acquisition navteq did?
   2. how long will it take to implement app generics worldwide?
   A: rollout is a function of discussions with operators. the time to install & deploy once you have an agreement is +-9-12m
   there is interest from other operators, we hope to be able to announce new agreements during 07
   it's not impossible that by Q108, we will be able to cover a substantial part of our installed customer base
   Q: Navteq?
   A: everybody's pointing strategically in the same direction, everybody knows traffic is important in the industry
   but we have a very unique technology, the best. cheap, uniform service, while all other traffic content generation systems, including nvtq's traffic.com system,
   are based on expensive roadside measuring systems, not scaleable, [dus iedereen doet hetzelfde ivm traffic, maar wij doen het het beste en het goedkoopste]
   Q: You will intensify efforts on the shop floor, is this marketing or people (employee) investments?
   A: it's training and education shop employees, not marketing, no new shops
   after expanding shop footprint in 2006, we're now deepening relations
   
   ABN AMRO:
   Q: FY outlook: your goal is to get market share up, but isn't the goal of 7-8m units conservative if you get market share up?
   A: not a precise goal, with this goal we have a slight decline in market share [dus als market share omhooggaat zal de goal ook aangepast worden]
   Q: tomtom work? how many users? FY06 = building out the sales force, is this ready? will we see more rev in 07? how big is the market?
   A: number of subscribers = 15 000, increase from 8 000 a year ago
   during 2006, we expanded the business outside germany into UK, benelux, good progress, now the infrastructure is in place, ready to deliver sales growth
   Harold: market size is difficult to scope, we will continue to develop the business, looking for healthy growth in 2007
   Q: what are your views on the market and the competition? can we see a reduction in the number of competitors due to price declines?
   or is it too early to expect a shakeout?
   Q2.tomtom ONE, has there been a change in the mix between regional and local? [vraag niet beantwoord]
   Answer: lots of competition, but our margins and volumes have been resilient. Going forward, it will be very difficult to catch up with our technology, it takes larger investments to enter the space,
   this makes it less attractive for generic competitors to enter this space [hij bedoelt algemene consumer electronics bedrijven zoals SOny en philips]
   for example, philips announced plans, they have decided not to do so, we know of larger consumer electronics players who have entered the space and are encountering difficulties
   so will there be a shakeout? not sure, but it will be very difficult, the barriers to entry will go up a lot
   
   Andere bank:
   Q: why is there a low level of price elasticity? price has gone down a lot, but volume did not increase as much as expected, so is the market inelastic? [price elasticity = als de prijs daalt met 1% stijgt het volume met >1%, zodat de omzet toch stijgt]
   A: we don't think about it like that
   volume growth was great, the pricing is now very accessible to a large audience, so there has been price elasticity
   Q: what about price distortion by the mio in Q4? [mio heeft in de US voor thanksgiving koopzondag gps'en verkocht aan $150 als stunt]
   A: it was a bump in the road
   but this was unsustainable, it lasted for a week, very quickly after that the normal market shares were re-established
   US market is also at the stage were it is not in the interest of retailers to drop prices too fast, retailers understand it now, will play the market more strategically
   
   Soleil group:
   Q: operating expenses: marketing will go down in Q1, what about the rest?
   A: Seasonality = marketing, the rest is stable, but r&d will be growing steadily, g&a will go up but at a lower rate
   g&a will increase a little bit in each quarter
   
   Mr charles …
   Q: something about mio discounts, taking losses
   A: we know that mio did not make any margin on their discount sales, return rates have been high
   it's been an exercise that hasn't delivered a result, market share dropped very quickly after discount ended and they lost a lot of money
   this happened before in EU, does not work
   we don't expect this to happen regularly
   there is still excitement about gps systems, a "wow" factor in the USA, while in Europe it's more established, people know what they can expect
   overall: consumer reaction is positive
   Q: forecast of margins? At the IPO you said that you don't want to give margin forecasts because you want to remain flexible??
   A: we're planning the business at 40-20, that's how we plan it, no improvising [dus 40% gross 20% EBIT]
   
   Mark II
   Q: market
6. [verwijderd] 22 februari 2007 15:30

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   Mark II
   Q: marketing: did you spend less than you wanted to spend because of black Friday? [=de thanksgiving actie van mio]
   A: no, we have not changed our strategy
   Q: gross margin lag: if you look at the dollar <-> euro weakening, if this happens again, will you see a benefit?
   A: dollar weakening happened at the end of year, this will come through only in 07, gross margin will go up
   
   last question: Kempen
   Q: r&d & marketing: 3% & 7%, that would imply 8% g&a, 2% stock compensation, is this correct?
   A: this is about rounding, not very precise (g&a etc.), a broad goal
   Q: mobile market, nokia announcement, what's your feeling? Are you planning to launch something different with operators?
   A: maps on phones are interesting, very old, been around since 1998, thus far they have failed to capture the imagination
   in car experience: not good because screen size small, hard to fix in the car
   everything that compromises the ability to call is a high price to pay, that's the problem with phone, when you're using it to navigate you can't call, we don't expect car navigation with phones to take off.
   outside of car, in cities, there will be more use of phones as a last mile, for example "how do i get to the train station on foot", but it's still very early
   there's a big price to pay for phone navigationn, bigger battery, lot of memory, map costs, all sorts of costs
   Q: is there a role for tomtom, mobile searches, with your strong brand?
   A: tomtom mobile is more tactical than strategic, small revenue
   but we keep an open mind, looking for opportunities
   -----------
   
   het belangrijkste is denk ik dat ze dus nieuwe producten gaan introduceren en dat die nog een tijdje naast de oude versies gaan verkocht worden, wil dit zeggen dat het andere producten zijn...?
7. dmzn 22 februari 2007 15:46

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   De krenten in de pap voor mij:
   - er komt geen dividend of share buyback want ze willen hun handen vrijhouden, hoewel ze niet staan te trappelen om overnames te doen
   - verouderde producten blijven nog even in de verkoop naast de nieuwe
   - 1% zwakkere dollar geeft met een maand vertraging een verbetering van de marge van 0,4%
   - op de vraag of de verwachting conservatief is, antwoordde Marina Wyatt 'it is not intented to be too precise'
   - Tomtom heeft een technologische voorsprong en het wordt voor eventuele nieuwe aanbieders steeds moeilijker om de markt te betreden
   - de lagere gemiddelde prijs komt zowel door een relatief groter aantal verkochte ONE's als door prijsverlagingen van de GO range aan het begin van het kwartaal
   - het verlies van marktaandeel van TT rond Black Friday was een tijdelijke zaak en 'dumper' Mio zou er niet aan verdiend hebben. Veel Mio's zijn door de kopers geretourneerd.
   - volgens Goddijn zien de retailers in dat de prijzen niet te ver moeten zakken
   - navigatie op een mobieltje is handig voor in de stad, 'the last mile', maar niet voor in de auto. je moet een apparaat kopen dat gemaakt is voor datgene waar je het voor wilt gebruiken
8. [verwijderd] 22 februari 2007 16:34

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   thnx dmzn
9. [verwijderd] 22 februari 2007 16:53

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   Bedankt voor je bijdragen!