Digital mapping company TomTom anticipates that its location technology unit will achieve annual sales at the lower end of its forecast range of 490-520 million euros ($536-569 million), as announced on Friday, following a decline in demand for new vehicles that affected its third-quarter revenue.

The company reaffirmed its group-level revenue outlook for 2024, projecting figures at the lower end of the 570-610 million euro range.

SIGNIFICANCE

A downturn in global automotive demand has adversely affected TomTom, which derives a significant portion of its revenue from location technology solutions for vehicles. In July, the company suspended its targets for 2025 and revised its revenue expectations for 2024 downward due to these challenges.

The firm, whose stock has plummeted by over 20% since the beginning of the year, is focusing on its new mapping platform, TomTom Orbis, in an effort to offset the ongoing decline in its consumer division by expanding its location technology offerings, particularly in the automotive sector.

BACKGROUND

The automotive market has continued to weaken since TomTom's last quarterly report, with new car sales in the European Union plummeting by 18.3% in August, reaching their lowest point in three years.

Originally known for its navigational tools providing turn-by-turn directions, TomTom is now advancing the development of high-definition self-driving maps that incorporate consumer data and sophisticated driver assistance systems.

FINANCIAL HIGHLIGHTS

In the third quarter, TomTom's revenue decreased to 140.7 million euros, falling short of analysts' expectations of 142 million euros, primarily due to declines in both the automotive and consumer sectors.

The company's loss before interest and tax improved to 4.1 million euros for the quarter, compared to a loss of 8.7 million euros in the same period last year, and was less than the anticipated loss of 5 million euros according to company estimates.