Amsterdam-based TomTom, the location technology specialist, has announced the resumption of its share buyback program to repurchase ordinary TomTom shares.
The original program was to repurchase shares for an amount up to €50M. However, due to the Covid-19 pandemic, in March 2020, the company had to withdraw its decision. This was because there was uncertainty regarding the duration of the pandemic’s economic impact, which could not have been assessed at that time.
An overview of the buyback program
“Until the program’s suspension, a total of 2.35 million shares were repurchased for an aggregate consideration of €16.6M leaving a remaining amount for the repurchase of €33.4M,” mentions the company in a press release.
TomTom claims it will use the shares to cover the commitments of its long-term employee incentive plans. Based on the closing price of the share on Euronext Amsterdam on 12th February 2021 of €7.92, the remaining amount represents approximately 3 per cent of TomTom’s issued share capital.
The share buyback program will end on 30th July 2021, unless the amount of €33.4M has been repurchased prior to that date. If that happens, the program will end on the date on which this amount is reached and the early termination will be disclosed.
According to the company’s statement, “The program will be executed by an intermediary to allow for share buybacks in the open market during both open and closed periods. The program will be executed within the limits of relevant laws and regulations and the existing authority granted by our General Meeting.”
Growth in Location Technology in 2021
Earlier this month, TomTom also announced its financial results for the fourth quarter and full-year 2020. The company’s revenue for 2020 fell by 25 per cent to €528M, when compared to 2019’s €701M. For the fourth quarter of 2020, the group’s revenue slipped by 20 per cent to €125M, when compared to Q4 ’19’s €156M.
For the entire year of 2020, it has a net cash position of €372M, which was €437M in FY ’19. The group’s Location Technology revenue also dipped by 8 per cent to €392M for 2020 – FY ’19: €426M.
“The past year has been a turbulent one. COVID-19 continues to impact people’s lives and disrupt the global economy. While we have also been affected, our Enterprise business showed resilience by increasing year on year. Our Automotive operational revenue improved since the lows experienced in the second quarter,” says Tomtom’s CEO, Harold Goddijn.
“We maintained an Automotive backlog of €1.8B. Our 2020 order intake was strong, but our customers’ lower near-term car production forecasts impacted our backlog. During the last year, we managed our costs by cutting discretionary spend but kept investment levels up for our mapping and application platforms. In 2021, we plan for revenue growth of around 10 per cent in Location Technology and a positive free cash flow for the Group,” he further adds.
Founded in 1991 by Corinne Vigreux and Peter Frans Pauwels, TomTom is a digital mapping and routing company that focuses on car navigation. They aim to gain a competitive advantage through superior products, a leading brand, and a flexible production structure.
The company delivers better maps through a combination of its high-quality map database that is continuously kept up to date through input from their extensive fleet of surveying vehicles and their large community of users. It regularly processes close to 2 billion map changes per month, which helps it maintain the freshest maps.
It’s estimated that 10% of the global road network changes every year. TomTom partners with logistics companies and on-demand industries to share the map editing process to provide real-road conditions.
In January 2021, TomTom announced that it has joined the Autoware Foundation. Autoware is a non-profit organisation supporting open-source projects that accelerate the development of autonomous driving technology.
According to the company, it will support the Autoware Foundation by creating a turnkey open-source interface to TomTom AutoStream. “This will enable users and developers of Autoware to scale their applications by accessing TomTom’s global coverage of high definition maps. AutoStream is an innovative map delivery service that automatically streams the latest map to the car in real-time, ensuring automated vehicles drive with up-to-date map content.”