Good afternoon, welcome to our conference call, during which we will discuss our operational highlights and financial results for the fourth quarter and full year of 2017. With me today are Harold Goddijn, our CEO, and Taco Titulaer, TomTom's CFO. You can also listen to the call on our website, a recording of the call will be available shortly afterwards. As usual, I would like to point out that Safe Harbor applies. We will start today's call with Harold, who will discuss the key operational developments, followed by a more detailed look at the financial results from Taco. We will then take your questions. With that, Harold, I would like to hand it over to you.
Thank you very much, Bernal, welcome, ladies and gentlemen. Thank you for joining us today. We delivered on our updated 2017 guidance with total revenue of EUR 903 million, adjusted earnings per share of EUR 0.26. Combined revenue from automotive licensing and telematics grew by 16% year-on-year. Our business is clearly shifting to a high growth margin business with long-term contracts, better predictability, and more upfront cash flow. Over 60% of our revenue mix is now derived from data, software, and services, which is now contributing 83% of our total gross profit. Taco will provide further information on the financial highlights and the financial outlook for 2018 later during his presentation. Our connected car products continue to do well, the order intake for 2017 exceeded EUR 400 million, that is a new record for our automotive business.
We significantly improved our position in the North American market with important contract wins. We also announced a number of new product introductions during 2017 with PSA latest car lines, maps for Daimler in North America, and the full navigation stack for Alfa Romeo's new SUV, the Stelvio. During 2017, we acquired Autonomos, a Berlin startup that brought us critical expertise in automated driving systems and smart camera technology that will form the basis for high volume, low-cost data acquisition to build and maintain HD maps. At CES 2018, we launched AutoStream, a new real-time map delivery system that enables vehicles to build a virtual horizon for the road ahead by streaming map content that can be created only seconds ago. We announced a partnership with Baidu, who will use TomTom's map-making platform and AutoStream to produce and distribute HD maps for automated driving applications in China.
AutoStream will be accessible for developers as part of Baidu's Apollo open source project for self-driving cars in and outside of China. Moving on to enterprise. At the end of 2017, we announced that our online APIs are now integrated in the newly launched Microsoft Azure cloud platform. By offering our location technologies on Azure, we have access to a broad range of enterprises and developers who can use our APIs to power a variety of applications, including IoT and smart city applications. We've also repositioned our own development portal for online APIs during the quarter. The product offerings and pricing are now geared towards developers, small and medium-sized businesses. We also announced new collaborations and contracts with Sony, TripAdvisor, Michelin, Mappy during this year. Our telematics business surpassed 809,000 subscribers by the end of the year, this represents a 16% increase year-on-year.
During 2017, telematics was recognized as Europe's largest provider of fleet management solutions by the market research firm Berg Insight. This is the third year we've been running that we have led the European market. In the connected car service segment, we announced a contract with LeasePlan. This is an important partnership. We are bringing connected car services into the mainstream and are using connected car technology to service a broader range of stakeholders, including drivers, insurance providers, car maintenance companies, and more. Moving to the next slide, I give you a short update on the strategic priorities. We will continue to target growth opportunities with connected cars, fleet management, and online APIs. In connected cars, we aim to grow through technology leadership in real-time map-making, traffic services, application software, and a wide range of location technologies.
We will continue to grow our fleet management business and target new customer segments such as leasing. We will continue to nurture and grow our partner ecosystem of software developers who help us to enter new markets and are adding depth and breadth to our service offerings. We'll capitalize on our scale by investing our connected car platform and to provide new APIs that will form the basis for accelerating product innovation. In line with the previously announced strategic review, we have reduced the size of the sports business to align the cost base with the market developments. We will continue to develop PNDs as the drive business will continue to provide a valuable platform for consumer insight and for collecting location data. To summarize, TomTom is well positioned to capture growth opportunity across our automotive enterprise telematics businesses.
Many of our growth opportunities are driven by big industry trends, including connected car, autonomous driving, and smart city. This concludes my part of the presentation. I'm now handing over to Taco.
Thank you, Harold. Let me make a couple of comments on the financials. In 2017, we reported revenue of EUR 903 million, which is 9% lower compared with last year. Automotive enterprise telematics delivered a combined year-on-year revenue growth of 16%. Automotive revenue was up with 44% to EUR 191 million. The increase was driven by a combination of higher take rates and more customers versus the previous year. The deferred revenue position of automotive increased to EUR 113 million at the end of 2017. This is almost a doubling year-over-year. This contributed to our strong cash generation during the year. Enterprise revenue was flat year-on-year at EUR 138 million. As a large proportion of our revenue is USD denominated, we saw the effects of the weakening USD in the year. Telematics was up with 4% year-on-year to EUR 162 million.
The recurring subscription revenue for the year increased with 7%. Consumer revenue decreased with 27% year-over-year to EUR 413 million. Close to 80% of our revenue is PND related. The remaining revenue is equally split over sports and automotive hardware. The gross margin in 2017 was strong at 62%, and that's an increase of 5 percentage points year-over-year. Our EBITDA was flat year-over-year. Our adjusted net results was EUR 61 million, which translates in an adjusted earnings per share of EUR 0.26. This compares to EUR 54 million and an adjusted earnings per share of EUR 0.23 in 2016. At the end of 2017, we reported a net cash position of EUR 121 million. Our cash flow before financing for the year was EUR 28 million, 12% higher than last year. If we would correct for the acquisition of Autonomos early 2017, our cash flow before financing doubled year-over-year.
Let me now turn to slide five, the automotive order intake. The graph on slide five shows automotive order intake versus automotive recognized revenue and net deferred revenue on an annual basis. What we want to highlight here is the development of the order intake and translation thereof into recognized automotive IFRS revenue and net deferred revenue on the balance sheet. Operational revenue is the reported revenue plus the net change in the deferred revenue position. As we sell products that include multi-year updates and subscriptions, some of that revenue is deferred. Automotive operational revenue in the year amounted EUR 245 million. This is an increase of 45% compared to last year. This EUR 245 million is already above the order intake that we saw in 2014 of EUR 220 million, and is gradually growing towards the order intake amount we announced in 2015.
Order intakes from the past years will continue to contribute to a strong growth of our automotive business in the coming years. It will deliver growth to our recognized IFRS revenue, but it will also continue to increase the automotive deferred revenue balance. On slide six, I want to make a short comment on the operating cash flows. On the slide, we plot the growth we are experiencing of our operating cash flows. Cash flows from operating activities grew strongly with 20% in 2017 to EUR 173 million, as you can see in the graph. This trend is expected to continue in 2018. The new accounting standards. On slide seven, we discuss the P&L impact of IFRS 15 and IFRS 16. As of January 1, 2018, TomTom adopted IFRS 15 revenue from contracts with customers and IFRS 16 leases accounting standards.
The IFRS 16 standard is early adopted in order to have only one transition year. This transition involves making adjustments to the opening balance and providing appropriate forward-looking comments reflecting the new accounting methodology. We have provided in the press release, and also at the end of this presentation in the appendix, a full disclosure of the restated 2017 P&L and balance sheet. On slide seven and slide eight, I will discuss the most important changes. Again, for a more detailed overview, I would like to point you at the appendix slides in the deck. Let's start with the P&L. Revenue. On group level, total revenue is more or less flat. However, automotive showed an increase of EUR 5 million compared to our 2017 report numbers, while consumer revenue is, under the new standard, EUR 6 million lower.
The increase in automotive is mainly driven by changes in our map revenue recognition. The lower consumer revenue is due to the reclassification of so-called co-op advertising cost from OpEx to revenue. In cost of sales, the impact of the treatment of NRE, non-recurring engineering work, is visible. The new standard requires that customization work, which is delivered to an OEM at the start of the production, should be amortized at once. The related revenue must be recognized upfront as well, if these are considered highly certain. Under the old standard, we amortize the NRE engineering expenses on a per unit basis. As a result, our 2017 restated cost of sales is EUR 6 million lower compared with our reported numbers. OpEx. The restated OpEx is impacted by both IFRS 15 and IFRS 16. The IFRS 15 element is related to consumer marketing, already explained before.
The IFRS 16 impact is EUR 2.6 million lower OpEx, is related to the treatment of our office leases, which is partly offset due an increase in our interest expenses. Let me briefly touch on the impact on our balance sheet as well, on slide eight. The impact on IFRS 15 is mainly visible in our other intangible assets and deferred revenue. The decrease in other intangible assets relates to the before mentioned NRE treatment. Deferred revenue will show an increase of EUR 18 million. The increase in telematics is partly offset by a decrease in automotive. For our IFRS 16, our office lease commitments are now visible on the balance sheet under other non-current assets and non-current borrowings. To summarize, 2017 restated group revenue is unchanged at EUR 903 million. Restated gross margin is 1 percentage point higher at 63%. Restated net result is EUR 10 million higher.
Let me now explain the changes in the adjusted earnings per share definition on the next slide. That is slide nine. Following the implementation of IFRS 15 and IFRS 16, combined with the ongoing transition to become a software company, we changed the definition of adjusted earnings per share to better reflect our operational revenue and related cash generation. As we want to contain the number of adjustments, we decided to no longer correct for acquisitions. As the majority of the EUR 60.9, as shown in the first column on this slide, or well over 70%, is related to the Tele Atlas acquisition of 2008. The new adjusted earnings per share is closer to free cash flow generation in absolutes, specifically, the trend highly correlates with the progress that we are making.
We expect the EUR 24.1 million, as shown in the second column on this slide, to more than double in 2018. This is leading to our forecast of an adjusted earnings per share of EUR 0.25. That leads me to the last slide of my prepared remarks, slide 10. We expect revenue of around EUR 800 million, reflecting the continuous decline in consumer business, also the growth that we're experiencing in automotive. As we transition into a more software technology company, we will continue to increase revenues related to data, software, and services. We expect gross margin to approach 70% in 2018. As already mentioned, the adjusted earnings per share is expected to be around EUR 0.25. This reflects a 40% increase on a like-for-like basis. We expect the levels of investments, CapEx and OpEx combined, to show a modest decrease compared to 2017.
This is excluding potential acquisitions. Operator, we would now like to start with the Q&A session.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press star one if you wish to ask a question. We will just pause for one moment to allow everyone an opportunity to signal for questions. Our first question comes from François-Xavier Bouvignies from UBS. Please go ahead.
Hi, TomTom. Thank you for taking my questions. The first one, I have a couple. The first one I had it is on your auto bookings of above EUR 400 million. Can you tell us a bit what are the moving parts inside these auto bookings? Do you feel that you won market share? How is the ASP trending and the penetration of in-dash maybe would be very helpful. On the auto bookings as well, you mentioned a U.S. customer win this year. Can you clarify if it is for the maps? Should we expect this trend to continue this year? Meaning winning shares over the U.S. OEMs. I have others, but just maybe this one first.
Yeah, thank you, François. I think the order book, EUR 400 million plus was satisfying, and we were happy with that. We were also happy that we did not lose any customers, and we added new customers to the order book that we did not serve before. I think that was a satisfying year. We significantly strengthened our position in North America, as we said also in the press release. We won a significant contract with a large North American OE for a full connected car stack. Not only software maps, but also maintenance of the system, map updates, services, et cetera. Last question. Are we thinking that that can continue in 2018? I cannot make any comments on that. I think the momentum we had in 2017 was good and convincing.
At the 1st January, we start from zero again. We will see what the year will bring. It's not just North America that we're focusing on. There's important business to be done this year also in Europe and in Asia.
On terms of deals available on the market, how do you see 2018 as a global market, like as a number of deal available versus 2017 or 2016? How do you
I think the total market available based on what we know today, will more resemble 2016 or 2017.
It will be more like 2016 than 2017, so you said? Sorry, I didn't catch it.
Yeah, that's total markets. That doesn't say much about what we think we can win. We think the total market opportunity will be more the size of 2016 than it was in 2017.
Okay. Thank you. A couple of follow-ups. On HD maps, can you update, how is it going, your conversation with your customers? Should we expect some contract this year and the business model for these HD maps?
Yeah. It was another year of good progress on technology, on improving the technology, proof of concept with a number of OEs, proof of concept with a number of sensor makers who want to work with us to assemble information, manage information, and distribute information. I think we've made good progress on the technical side, on the product side. Also commercially, I think we were on the right track. Hopefully in 2018, we get some significant real opportunities to conclude some of those contracts. What we see for self-driving is that the demands from car makers are to quote for yearly maintenance fee, and that's what we're doing. In standard navigation and standard products, it's mostly a one-off payment when the vehicle is shipped.
We see a trend in autonomous driving that car makers want to pay an annual fee per car to keep the maps and the technology up to date.
Okay. That's helpful. The other question I had, I'm sure it's important about Bosch and Continental, what's going on with your main competitor here, Intel as well. I guess it's something you are looking at. The question I had is how do you respond to that as your competitor is getting stronger and getting more partners? Bosch is historically a strong partner of yours, of Volkswagen as well. How do you respond to this trend of your competitor getting more and more traction?
Well, you need to be careful here. You can't read too much in it. I think it's important to realize that both Conti and Bosch bought shares from the owners. There was no new money invested into here. It was a transfer of secondary shares. I think the relationships that we have with both Continental and Bosch continue to be very strong and very deep. I think there's a bit of politics there going on as well. We're not too worried about it. We are satisfied with the progress we're making. We hear it from our customers as well in terms of technology and what we have to offer.
You don't think you need as well to strengthen or may need some help from others like this, the way they do to try for the industry to be more collaborative?
Well, we do a lot of work on collaboration. There is no question that self-driving technology is complex. There's a lot of players in the value chain. We recognize that. You see that also in our announcements. We're working with Baidu, we're working with Nvidia, we're working with Bosch, a number of others where we're working with what we have not disclosed. I don't think it's necessary to have core shareholdings to make those partnerships flourish. You can see also in the marketplace that we are considered to be a good partner to work with. You can see that also in the progress we're making in the various territories. I think that is actually a position where we can be flexible, agile, respond to customer requirements quickly. I think that's what our customers really like.
Okay, that's clear. Maybe two quick ones. One is in your 2017 automotive revenue that you recognize on your P&L, did you recognize already 2015 bookings, or it's 2014? Where is the backlog in 2017, starting in 2018? That's my question. The other one is, given your net cash of EUR 120 million, what are you going to do with that? I'm sure you have a lot of investment to make. Should we think about M&A, telematics, automotive? What's the pipeline? Thank you.
Yeah. I can take that one. For automotive, what the revenue that you see reported in 2017 is what we saw on the order intake in 2013, 2014, and definitely also 2015. If it's in the later years, then it's more services related. The time to market is then shorter than if it's content and software related. The time to market for a pure service contract can be 12 months or even shorter. If you do a full system, meaning the content and the software and services, there tends to be a time lag of at least 24 months.
You're seeing more and more contracts of this kind now?
Well, our offering is in modules, so we can offer it in a complete stack, but we can also offer it individually. I think the trend in the market is that the bigger OEMs tend to source multiple models from us in one go. No, I would not say that the trend is that we sell it more separately. On our cash position, we decided to buy shares in 2017. That was only done to stop further dilution as a result of our employee share option plan. That was the only purpose. As we have now over five million treasury shares, we think that will last at least this year. We don't foresee to buy back any shares this year. We'll make that assessment again next year.
What we will do with our current cash position and also the cash that we'll add this year, is indeed what you said, that we will always assess bolt-on acquisitions, either in the technology area of HD mapping or what we did with Autonomos, can also be telematics. Yeah, that will be the focus of our cash position.
Okay, that's great. Thank you very much.
Our next question comes from Marc Hesselink from ABN AMRO.
Yes, thank you. My first question, actually, a follow-up what you just said, the new pricing for autonomous driving functions towards an annual fee What will it do for what you're getting out of that? Is that a better pricing? Is it better because it's a more definition map? How are you going to make that transition towards the new business model, going from the license upfront towards the annual fee? Second question is on discussion also you had before with your competitor HERE, with the investments from Bosch and Conti and earlier the other ones. Sometimes you read stuff in the market that there will be some kind of winner-takes-all kind of platform, because one platform will get all the data and therefore will become the best platform.
There's the other discussion that it will be, whatever happens, it will be dual sourcing because the industry wants to have options. What is your view on that discussion? The final question is on the guidance that you gave on OpEx plus CapEx to be down. Can you give a bit more detail on that one? Because if I'm correct, your OpEx also includes your D&A. What will be the cash impact for the, you think, also in the separate division, you probably have a lot lower cash out in the Sports and the Consumer in general. Do you expect to invest more in Automotive and Telematics? Thanks.
Yeah. Thanks, Marc. I'll take the first two questions, then I'll hand over the third one to Taco. When we talk about standard maps or HD maps and the different pricing, I don't see a big transition taking place. I think what we see at the moment is that prices for HD mapping on a yearly basis are significantly higher than what we pay, or that we can invoice for standard definition maps. However, the volumes are very small, certainly at the moment. Also we noticed that car makers are not sure about the volumes they will produce of cars where they need HD maps. The range in the volumes is much wider than for standard definition maps. That is because of uncertainty, of course, about the uptake of those new technologies.
The prices are going to be significantly higher, and they will repeat every year. The total amount per car, per contract over the lifetime of the car is a lot higher than what we can currently charge for standard definition maps and services. Second question, is this a winner-take-all market? No, it's not. That's not how the world works. We see from car makers also that they are influencing the sensor makers to make data available also to TomTom that's coming out of the vehicle, to have competing technologies in the marketplace. That is what we're seeing. As a result of that, we are intensifying also collaboration with sensor makers across the world who are coming to us to see how they can integrate their data on top of an HD map. It's quite an interesting development that we've seen last year.
That includes, and I don't think there's any sensor maker that we're not talking to in that respect, where we don't have proof of concepts or where we have exchanges of technical information and product requirements. The third question, I defer that to Taco.
Our OpEx in 2017 was EUR 595, roughly, if you include everything. That is expected to decline with roughly EUR 50 million. More than that amount, we will see in consumer, and we will see an increase of our spend in our mapping platform. We will invest either through CapEx or OpEx more, to further develop our mapping platform. If you have EUR 545 for OpEx, the remainder is CapEx, ending south of EUR 150. Do realize that if you want to make a like for like, that you need to add roughly EUR 20 million in that CapEx number that's IFRS 16 related. If you take that out, you end up with, let's say, EUR 125 million of CapEx.
Okay. Thanks. Maybe one follow-up, just to be sure. You said that the annual charge for the high definition map is higher than the full lifetime license that you're selling right now. Is that correct?
That's correct.
Okay. Clear. Thanks.
Our next question comes from Martijn den Drijver from NIBC. Please go ahead.
Yes, good afternoon, gentlemen. Going back to the order book. I was wondering if you can provide a little bit more color on, for example, the impact of having a contract from North America. Is that lower ASP, higher ASP corrected for volume? Is there any ADAS content in there? That would be my first question. The second question relates to sports. I know it's been properly downsized, but what was the EBIT loss, if you will, in 2017? That would help a lot in assessing the true performance from going from 2017 into 2018. That's the second question. I was also wondering, you've had somewhat longer-term guidance with a CAGR of 15% for enterprise, automotive, and telematics. Are you still abiding by that same guidance, or do you think it needs some updating? Thank you.
Yeah, if I can take the last two questions. To start with the CAGR. During our analyst and investor meeting at the end of 2016, we said that automotive, enterprise, and telematics would see a CAGR of 15% from 2016 up to 2020.
Due to the change in accounting, we need more time to update that number, and we want to defer that question to our Q1 results. The thing with IFRS 15 is that you need to go through all the automotive contracts one by one. We've done that for 2017, and we've done that for 2018, but we still need to do that also for the years to come. I would like to defer that answer to April, if you'll allow me. The other question was about sports. We have not provided EBIT numbers for that business line specifically. We know that the EBIT for consumer as a whole was not profitable in 2017. It is clear that is not acceptable, and we estimate, and we give a forecast that there is profit for our segment consumer in 2018.
That means that our sports business line will be break-even at worst, starting first of January this year. For the first question about ASPs in automotive segment. Harold?
Yeah. You referred, Martijn, specifically to the North American contract. I can't say too much about it. The ASPs are very much in line with what we have seen.
We need to provide more components for that. You do the maps, we're doing the map updates, we're doing application software stack, and we're doing services. In combination, that is a full package with ASPs that we have seen in the past as well.
Okay. It would be fair to say that you're not having to go an extra mile in terms of ASPs to get your foot in the door within the North American market, that would be too harsh?
Well, yeah, there's competition. Of course, there's competition and we're working hard. You win it always on a combination of things. Price is one. We're happy with what we achieved. It was a good deal for everyone involved. A good product. We're happy about the product we deliver. We can show off our technology in a mainstream car for the North American market. I think that will help us to further improve our market position in North America. It was high five all around.
Okay. Just one question with regards to Q4. Is there any specific reason why the gross margin in the fourth quarter was so low, relatively low? It was up year-on-year, but relatively low to some of the upticks we've seen in previous quarters, despite having strong growth in automotive, reasonable growth in telematics, and a decline in the low margin consumer. I was just wondering if you have a bit more granularity on that, a bit more color.
Yeah. The reason for that is consumer sports. We had a very thorough look together with our accountants through our books and what we provided for. We had to take some additional provisions in Q4 that affected our gross margin. The real focus for gross margin is now in the year that we're in, and that is that we will grow towards 70%.
Okay. You don't want to quantify the additional provisions that impacted your gross margin? I know you've given the guidance for 2018, but still, just to get a bit better understanding.
I would like to quantify it. I don't have it at hand, I will follow up later.
Okay. Thank you, gentlemen.
Thank you.
We will now take our last question from Marc Zwartsenburg from ING.
Yeah, thank you for my questions. First of all, Taco or Harold, do you have any idea or can you give an indication of what percentage wins of the RFQs that were in the total market opportunity was in 2017? Just to get a feel for how I should interpret the size of the order intake in 2017 compared to a bit of market share feel?
I'm sorry, Marc, we don't have that number. We haven't worked it out and I can't give it to you. Our impression is that we are on the good side of market share with customers that fall into our camp, with whom we've never had a relationship, especially in North America. We had a breakthrough deal. Our impression is that we are gaining market share, but some of the business that's available is not visible to us, as you can imagine. It will be difficult to give you an overall market size number and our market share in terms of wins.
Okay. Looking to automotive, can you give us an indication how we should look to 2018 in terms of phasing in of former order intake and how that compares to the period after 2018? I have the indication from the outlook and the top line that your growth in automotive will be a bit less than what we've seen in 2017. Is that a phasing effect? Can you give us a bit of a feel for how these previous order intakes phase in 2018 and then perhaps 2019, 2020?
Well, you will see growth in automotive, of course, in revenue coming through in 2018. Also that we are putting a larger proportion of our income on the balance sheet as deferred income due to the new rules. It's difficult to give you more color than what we've done already. I think the motoring on the automotive side is going well. You can see it in the order intake. You see it as trends. I think that's what we're looking at.
Is it fair to say that you say that you will see mid to double digit growth in automotive, previously more than 40, and that perhaps an acceleration after 2018 again, just due to the phasing of these contracts that have previously been signed?
I wouldn't dare saying that. Of course, last year we had a full PSA volume coming on stream that gave us a big kicker. That's not going to repeat itself in 2018. It will take longer for the 2017 kicker, that kind of revenue that we booked in 2017 will not materialize before 2019.
Maybe because at the beginning of January it was a bit early, can you give us an indication of the IFRS 15 impact on 2018, whether that is also, say, a small positive or a large positive or maybe a negative? Can you give us an indication maybe, Taco?
We hope to have provided that information in the call we organized in January and also the slides that we presented today. What we said, consumer is structurally lower because the co-op advertising activities can no longer be seen as revenue. Automotive can be higher or lower, it depends. You can't say it will be structurally higher or lower. There are things happening in the cost of sales line that normally costs would flow out during the lifetime of the contract, and now you need to take them at once. Overall, the effects of IFRS 15 are not necessarily bad, but they are just different than what we've seen before.
We can't yet say for 2018 whether it will be positive or whether it will be negative. That's too early. Is that a good understanding of where we stand at the moment?
One of the differences in recognizing revenue in automotive is that you approach the contract from a total value basis instead of a volume approach. It can be that during the executing that contract, it can be within the first year or second year, you have a different perspective due to tailwinds or headwinds. IFRS 15 will tell you that you need to take that correction at once. If your assessment says, well, the total value of that contract with hindsight or with hindsight during executing that contract is higher or lower, you can see corrections. Is 2018 higher or lower compared to what? We have provided the guidance on the basis of IFRS 15.
Yeah. Okay. Then perhaps a question on the OpEx line. There's quite a surge in the amortization of technology and databases in Q4, and therefore also the cost base with IFRS 15 and 16, everything in there. The cost base is higher than under the old situation. Should we model going forward the tech amortization at the level that we've seen in Q4? Is that how we should work?
Well, already said there were some incidentals. I think that the amortization line in the OpEx specifically will not go up in 2018. It was roughly EUR 110 in 2017, and will go to EUR 100 or so in 2018. D&A as a whole, that's a different story, because there we had the restated numbers is roughly EUR 180, and we think that the decline will be bigger as it will go to EUR 155 or so.
If I then look to your statement on the EUR 50 million lower OpEx line, how should I read it then if I exclude all the one-offs that we've seen in 2017? How would it then develop 2018 to 2017? Because you mentioned the EUR 50 million decline, but I'm not sure if that includes a few of these one-offs.
This is what I just gave you, is a like for like comparison.
We go to EUR 545 roughly in OpEx, and that is excluding any funnies, et cetera.
Yeah.
Okay. Perhaps a final one on the deferred revenue in 2018 or cash flow. Because you had, say, a free cash flow in 2017 of around EUR 50. That should go up in 2018, but can you also give a bit of an indication how much and where it should come from?
Yeah. It will go up with more than 50%. Where it comes from, what we already alluded to, is that it is mainly due to the increase of our automotive business. Our free cash flow generation, if you correct for the Autonomos acquisition and if you correct for the share buyback, was close to EUR 50 million. We foresee that number to go up with, let's say, 50% or so this year. That's also reflected in the adjusted earnings per share guidance that we've given.
It's more than the growth in automotive. Is there also release then from deferred revenues or am I missing something?
No, the opposite. The deferred revenue will increase. Releasing deferred revenue will not have an effect on our free cash flow.
Okay. All right. Those were my questions. Thank you very much.
Thank you. I would like to thank you all for joining us this afternoon. If you have any follow-up questions at a later time, please don't hesitate to give us a call. Thank you all very much.