Good day, ladies and gentlemen. Welcome to the TomTom fourth quarter and full year 2015 earnings conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's prepared remarks, at which time, if you would like to ask a question, you may do so by pressing star one on your telephone. If at any time during the call you require audio assistance, feel free to press star zero and a conference coordinator will be happy to assist you. Please note that this conference is being recorded. I will now turn the call over to your hostess for today's conference, Bisera Grubesic, Head of Treasury and Investor Relations. You may begin, madam.
Thank you, Hannah. 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 2015. With me today are Harold Goddijn, our CEO, and Taco Titulaer, TomTom CFO. You can also listen to the call on our website, a recording of the call will be available shortly afterwards. As usually, 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 2015 financial results and the financial outlook for 2016 from Taco. We will then take your questions. With that, Harold, I would like to hand over to you.
Thank you very much, Bisera. Welcome, ladies and gentlemen, and thank you for joining us for today's earnings call. We delivered top-line growth in 2015 for the first time in five years. All our four business units delivered revenue growth in the fourth quarter. 2015 revenue was over EUR 1 billion, which is 6% higher compared with last year. The weakening of the euro impacted our profitability negatively in 2015. Nevertheless, we delivered on our guidance. The net result for the year was EUR 18 million, which translates to adjusted earnings per share of EUR 0.21. Taco will provide further information on the financial highlights and the financial outlook for 2016 later during this presentation. I will now discuss our key operational highlights per business unit. Let's start with the consumer business.
Our consumer drive products held up well in 2015, thanks to resilient PND category and the introduction of niche products. Our PND business developed better than the market this year. We maintained our leading market position in Europe, improved our market share in North America, and strengthened our average selling price, which resulted in value share growth. Our strategy is to continue to extract value from the PND category, which we believe will remain a sizable category for the foreseeable future. Our sports product revenue grew strongly this year. We launched a third-generation GPS sport watch in Q4 with integrated music player, built-in heart rate monitor, and 24/7 activity tracking. We were pleased with the acceptance of those new products, which resulted in a significant year-on-year increase in sales. We entered the action camera market with the launch of the Bandit.
It's the first action camera with a built-in media server. We will continue to bring new innovative products to the market in 2016. Automotive broke the 2014 record for new bookings, which exceeded EUR 300 million in 2015. This, together with orders secured earlier, will deliver revenue growth in our automotive business in the coming years. The level of bookings is substantially higher than in previous years, and is a good indication that we're growing faster than the market. Our renewed product portfolio delivers navigation software to the automotive industry that is easy to integrate and delivers a much improved end-user experience. Our business will continue to require high levels of investments in the near future, and this is needed to support delivery of new business one and a sustainable future growth for TomTom. We announced that BMW has chosen our traffic information in Russia, Australia, and New Zealand.
The service is available cross-car line as part of the ConnectedDrive offer on BMW. In addition, Daimler chose our navigation service for its new Mercedes me app. Our licensing business unit announced a multi-year deal with Uber in the first quarter to provide maps and traffic data for the Uber driver application. Let me now give you a quick update on our maps. We completed the move to our new map-making platform by the end of 2015. This platform is the first of its kind in the industry and a leap forward in map-making technologies. With our new platform, our map is updated continuously using transactions with automatic quality checks. An update will become available to consumer applications as soon as the transaction was completed. This dramatically reduces the time between change detection and publishing a new map, which we can also do incrementally to deliver real-time maps.
Some customer applications, such as automated driving, place a high premium on being up to date with the latest real-world changes. New technologies are in development that rely on artificial intelligence and deep learning that have the potential to automate image recognition and automated map making. Our map making platform is designed with the emergence of those technologies in mind. In combination with existing map making technologies, this will bring us the scalability that we need to make the maps for autonomous driving in a cost-effective way. Our telematics business continued to perform strongly. The subscriber install base passed the 600,000 vehicle landmark by the end of the year and delivered a 30% growth compared to last year. This was achieved through a combination of organic growth and the acquisition of Finder, which is the leading fleet management service provider in Poland.
Today, our telematics business is recognized as the largest and fastest growing telematics provider in Europe. Our established and scalable technology platform, in combination with our ongoing commitment to innovate, sustain investment in R&D, and operational leverage, enables us to continue to capitalize on the favorable industry trends. The extensive vehicle-related data telematics technology can deliver is also opening up new opportunities for aftermarket connected car services. This, ladies and gentlemen, completes my part of the presentation. I'm handing over to Taco now.
Thank you, Harold. On slide six, I shall now begin a more detailed look at our financial results. We generated revenue of EUR 282 million in the fourth quarter, an increase of 9% compared with last year. We saw growth coming through across all of our four business units in the quarter. In 2015, we delivered revenue of over EUR 1 billion. This is 6% higher compared with last year. Our licensing, telematics, and consumer sports businesses grew strongly to offset the reduction in PND revenue, which remained the biggest revenue contributor for the group. Consumer revenue was up 1% year-on-year to EUR 624 million. This is a result of a resilient PND business and a 40% growth in our sports activities.
Automotive revenue delivered a modest decline in 2015 due to the phasing out of certain legacy contracts in combination with a higher share of deferred revenue compared with last year. Our order book is a good leading indicator for future growth in the segment. As Harold already mentioned earlier, our order book for this year is above EUR 300 million. If you compare that with the EUR 220 million over 2014 and the EUR 130 million over 2013, you can calculate a CAGR of 50% over this period. Licensing revenue was up by 27% year-on-year to EUR 142 million. This increase throughout the year is driven both by existing accounts as well as new accounts like Uber. Telematics revenue was up by 22% year-on-year to EUR 135 million. This increase was driven by strong growth in subscriber install base.
The weakening of the euro impacted our profitability negatively in 2015. On a full year basis, our gross margin was 52% compared to 55% last year. FX and an impairment charge of EUR 11 million related to certain automotive customer specific software impacted our gross margin negatively. At constant currencies for the U.S. dollar and the GB pound, our gross margin for 2015 would have been 56%. OPEX for the year amounted EUR 580 million, which is EUR 16 million above last year. This increase is driven by the growth of our workforce and higher marketing, which was partly offset by a decrease in D&A and a one-off gain from a settlement of a litigation case in Q2. We expect the run rate for OPEX in 2016 overall to be up to what we've seen in 2015.
We delivered a net result of EUR 80 million this year, which translates into adjusted earning per share of EUR 0.21 on a fully diluted basis in line with our guidance. If you add the movements in our net deferred revenue and deferred cost of sales year-on-year of close to EUR 42 million, take off 25% corporate income tax and divide by the total number of shares, it would add EUR 0.14 to our bottom line. We generated EUR 190 million cash from operating activities similar to last year. Capital investment equaled to EUR 55 million in the quarter and EUR 154 million for the full year 2015. If you strip out for acquisitions, our CapEx would have been EUR 107 million in 2015.
The majority of the investments related to acquisitions we made this year, as well as investment in our new transactional mapmaking platform, our navigation software, and some customer specific investments we had to make in automotive.
We finished the year with a net cash position of EUR 98 million compared to EUR 103 million last year. Let me conclude with slide seven, our full year outlook. We are committed to deliver revenue and earnings growth in 2016. We expect revenue of around EUR 1.05 billion. The adjusted earnings per share is expected to grow by around 10% to EUR 0.23 a share, and we expect the level of investment, both CapEx and OpEx, in our core technologies to be higher than what we saw in 2015. That concludes the formal part of the presentation. Operator, we would now like to start with the Q&A session.
Thank you, sir. Ladies and gentlemen, if you'd like to ask a question at this time, please press the star or asterisk key followed by the digit one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find your question has already been answered, you may remove yourself from the queue by pressing star two. Once again, please press star one to ask a question. We will pause for just a moment to allow everyone to signal. Our first question is from Peter Olofsen from Kepler Capital. Please go ahead. Your line is open.
Good afternoon. I wanted to ask about the autonomous driving opportunity, and more specifically, the announcement earlier this year by Mobileye. In their presentation at the Consumer Electronics Show, they were basically talking about two camps in autonomous driving with you and HERE in one camp and them in the other camp. Well, the way I understand it seems there are basically two alternatives to get to autonomous driving. What I would like to hear is, what do you think? Do you think what they are offering is a substitute or an alternative to what you are offering? Do you think the offerings will be complementary? I have a follow-up.
That's an interesting question. We're definitely building different products. Of course, we have the street names and the house numbers and the POIs, and on top of that, we're building a layer of lane information. For us, that's an addition. For Mobileye, that seems to be their core product. The way we construct that additional layer is, of course, something that we are fully experimenting with. We see a lot of potential new technologies that do automated recognition, image recognition, video recognition, and find ways to, on a large scale, to produce that data as an additional layer on our existing map data. I think that is the way to look at it.
I think the interesting thing for TomTom is that we already have an awful lot of data, of course, that you can't capture automatically, but also that our map-making platform is designed to ingest and fuse that data that we can collect in a highly automated way in the future as part of our core database.
Listening to their presentation, I got the impression that with their approach, you don't need a very sophisticated map. Would you agree with that view, and do you see that as a potential threat to the autonomous driving opportunity for TomTom?
I think there are important developments taking place, technological developments, artificial intelligence, deep learning, neural networks, that have the potential to capture that data on a large scale at a very cost-effective way. That is where we're focusing on.
Okay. Maybe follow up on R&D spending. I understand R&D will be up in 2016. If we look beyond 2016, is there a chance that eventually R&D spending will start to come down? Will you have to keep on investing in R&D to keep your maps up to date and things like that?
Of course, we see the moment that we get real operational leverage coming through. We see that coming. You have seen that our order intake in the automotive industry has grown significantly. We had higher licensing income that will result in the years to come in higher revenue and the additional expenditure in maps and technology will be lower than the revenue increase. We will see a situation where we do get that operational revenue leverage, and higher levels of profit falling through to the bottom line.
That will have to come from top-line growth, not from a drop in R&D.
Well, it will come predominantly from top-line growth. Also, there's a lot happening in the way we make maps. We have an ambition to do that in a more automated way, do it at lower cost and more scalable We are now in a position where we can actually start to work on those new methodologies. We don't know exactly how fast that will go, but we are planning for significant productivity gains in the future. I don't think you will see that coming through in 2016, those productivity gains, but certainly in 2017, we should be able to get the full benefits of the deployment of those new technologies.
Okay. That's all. Thank you.
Our next question comes from Andrew Gardiner from Barclays. Please go ahead.
Good afternoon. Thanks very much. Another question on the Automotive side. You're seeing good growth on the order front this year, and you're giving us an annual or biannual update there. I was just wondering after what we've seen in 2014, with over EUR 220 million, that grew to EUR 300 million in orders last year. Can you give us a better idea as to the timing or phasing of your backlog now and how much these last two years' worth of orders are going to be contributing to this year's Automotive revenue or next year and year after, just to try and get a better sense as to the path of growth there?
Let me take that answer. The orders that we take in have a duration of anywhere between 3-7 years, I would say. Probably, I think the sweet point is probably somewhere between 3-5 years. They will start after 18-24 months. Before they are properly ramped up, you are looking at 30-36 months. Two and a half to 3 years before you get the real volume in those contracts. It's a bit of a puzzle, but that's the way to look at it.
If I ask it another way, since you had refocused the automotive strategy and gone to the more productized or modular offering, we're still, even in 2016, not seeing much of the revenue. That is really going to be 2017 and beyond from most of the last couple of years of orders.
You will see some of it coming through in 2016.
Yeah. Okay.
The tick-up in Q4 this year in the automotive revenue was a heads-up for that to happen in 2016.
Okay. Just a quick follow-up around automotive. The impairment or write-off that you saw within COGS in the fourth quarter, you mentioned it was related to a specific customer technology or customer software. Was this a legacy product, or is this one of the newer ones that perhaps hasn't gone as you anticipated?
This was mainly legacy automotive related. Yes.
Okay. All right. Thanks very much, guys.
Our next question comes from Martijn den Drijver from SNS Securities. Please go ahead.
Yes, good afternoon. I was wondering if you could elaborate a little bit on the increase in the hardware automotive revenue, because for a couple of years, that revenue line has been in decline. It's up this year. I was actually really interested in hearing what has caused the increase. The second question that I had, let me wait for your answer first.
Yeah, I don't think the hardware revenue went up. Maybe there was a bit of dollar effect.
Product mix.
Product mix, generally speaking, automotive hardware was relatively stable, I think, year on year.
Yeah, for the full year. You saw a bump up in Q4. I think that's more Q4 2014 related than 2015 related. It is on a declining path. There's a bit of a mixed bag of contracts in there as some contracts have a higher ASP than others. If you add that together, it was indeed a strong performance in the fourth quarter, but nothing that you should extrapolate.
The decline in 2016 will be more in line with what we've seen in previous years, or will it actually accelerate?
Yeah, it will go down. We haven't seen a decline this year. It was fairly flat, for 2016, it will go down. Yes.
Going back to the deferred revenue component, you've actually mentioned yourself that it was around EUR 42 million, the net change. On the PND side, all of the models have lifetime maps, lifetime traffic. I guess that will not have such an impact in 2016. Am I right in that understanding?
I don't think we're completely over that all the models have lifetime maps and lifetime traffic. More and more, indeed, that's true. For 2016, we still expect some deferral of consumer business, but it will indeed be lower than what we've seen this year. I think where we expect the most deferral to happen is in the automotive line in 2016.
Would it be possible to give us any indication of what the amount would be, roughly? Ballpark figure. Is it the same type of area, or will it be much less?
Just to get a better understanding.
The way to look at it is that the net deferral is likely to be a bit lower than what we've seen this year, and that the main contributor to the deferral will be automotive this year compared to consumer last year.
Okay. That's it. Thank you very much.
Our next question is from Marc Hesselink, from ABN AMRO. Please go ahead.
Thank you. First question, also on automotive. Remember from the last call that you said that you're winning market share. I remember you also said it in your introduction. How do you see the market on the take rates of the in-builds system? Is the pie also starting to accelerate already? The second question is on your incremental investments, partly ahead of the won contracts. Can you talk a bit more about your decision behind it? Is it that you saw the opportunity now to speed up this, to make sure that you're ready for the clients? Or is it also that you had to repair your products on some white spots? A bit more on your idea from, was it an opportunity to grab there?
Take rates or the investments?
The take rates for the automotive industry are going up. They're still relatively low. I think the industry number is around 27% of take rate for 2015. We expect that the take rate will continue to grow in the next three to four years. On the investments, if you look at our OPEX, and also CapEx, but let's start with the OPEX. The OPEX was roughly EUR 520 in 2015, regarding to an increase of a high single percentage of, I don't know, 8% or 9%. Where that OPEX increase will come from, it's on one hand, it is Telematics. Telematics is growing as a business unit. It has now more than 600 people on the payroll, also because of the acquisition they did at the end of last year.
The run rate, of course, in that organization is going up, not at the expense of margins, as you can see in our press release. Profitability is intact. The baseline is going up. The other thing that we are doing is that we're investing more than what we have in our maps organization. That has to do with deepening, expanding our reach geographically. We're getting new customers in, and we think now is the right time to further improve the product that we have. In the CapEx area, you see similar investments. Investments will continue in our platform. We need to harden that further. We went live at the end of last year, and we moved to this new platform early this year. That will need continued investment.
I think that the pickup that we've seen from 2015 to 2016, I understand that is what it is. On the other hand, I don't think that it will continue to grow at that level in the years after 2016. I'm not saying that it will go down, but especially in some areas, we can already see some operational excellence coming through.
Okay. Maybe as a follow-up on the part on the automotive, the increased investments there, is that something you look at, also from a payoff perspective? This will start to pay off in the next few years?
Yes, this will start to pay off in the next few years. Some of these contracts are things that we can sell relatively without any modifications, and some contracts require additional investment from our end, and we're happy to do that. That will mean that these costs we have to incur up front before we can sell the product.
Okay, thanks.
Our next question is from Andrew Humphrey from Morgan Stanley. Please go ahead.
Hi, thanks. A couple of questions, if I may. One is around, I guess, the automotive product, but more generally on mapping. You obviously have the platform in place now for real-time updates, which is clearly something that your partners need from you. Can I ask whether you are starting to see or are anticipating at any point, a degree of increase in pricing power resulting from the technology changes that you're making there? My second question is around, I guess, the shape of OpEx beyond 2016.
Obviously, I'm not expecting you to give guidance beyond then, but if you could give us an idea about whether the 2016 increases in OpEx we'll see are likely to be repeated in 2017 or whether you believe that step change is something that will set you up for the next few years in terms of the amount you'll need to invest in your newer businesses.
Let me first take the question about pricing power, Andrew. I don't think our pricing power as such is going up, but we have more to offer. Instead of selling a one-off map, we now can sell or license a map plus an update service for a number of years. We can also license traffic information. We have a strong product offering there. Already, we estimate that our market share in Europe is about 80%. We think that we will be able to increase our market share in North America significantly in the coming years. In fact, in 2015, we won an important traffic contract for North American market. We've been in a transition, and we've defined new map formats. We have adopted our navigation software to those new map formats. We have developed incremental map update services.
There is also, on the software side, more that is now really competitive and state-of-the-art. Products we can successfully sell that we couldn't sell, let's say a year or two years ago. I'm not saying that the products themselves are getting more expensive or that their pricing power is increasing, but I do think we have a much broader, much more competitive product portfolio and service portfolio than we had, let's say, a year or two years ago. That eventually will lead to a higher revenue per car than just, let's say, the standard map that we could sell in the past.
Just to follow up on that, your real-time update service that you mentioned that you're now able to sell towards those customers, are you able to price that separately from the core map at the moment?
That comes as a separate component, as an update fee that we typically sell for a period of one year or three years or five years, depending on the requirements of the customer.
Okay. Thank you. Just on the shape of the OpEx beyond 2016?
Yeah. I touched on that with my previous answer a little bit. We think that the OpEx levels that we're reaching in 2016, is there or thereabout for the midterm as well. The increase of the high single-digit % is not something that we see repeating in the years after.
Great. Thank you.
Our next question is from Hans Slob from Rabobank. Please go ahead.
Yes, good afternoon. Two questions. First is on your automotive business. What kind of sales level would be needed to make the automotive unit break even? Based upon your backlog, which year could we expect EBIT profitability for TomTom Automotive? That's the first one. Second one is on your telematics business. What are the main geographical white spots for your telematics business? Should we continue to expect new bolt-on acquisitions, or will you focus on the integration of past acquisitions in the telematics space?
Hans, the profitability for the automotive business is, of course, that depends how you look at that. Automotive business itself, of course, is a big contributor to cover our cost base for mapmaking, but so is licensing. If you look at the combination of licensing, automotive, and mapmaking, that is probably a good way to assess how profitable that part of the business is. At the moment, that's not profitable, but we can see that with the increased order book and resulting increased revenue, based on the bookings, of course, 2015, we can see that improving quickly.
If you look in the press release as well, and if I add to what Harold was just saying, if you take the revenue of automotive and licensing together in 2014 and then look at the combined EBIT of those two, then we see the right trend. The trend is that the top line is growing, but also the combined EBIT of those two units together is getting less negative. Where we will break even, I don't want to give hard targets to that, but one thing that we want to achieve is that we need to continue the trend of a better bottom line.
You had questions about telematics, about the white spots that we see geographically. I think it's fair to say that our telematics business predominantly a European business. We try to be number one or number two in the various markets in terms of market share. We're well on our way to achieve that for most countries in Europe. Our efforts will be to integrate the acquisitions we've done in the last two to three years. That's going well. I think the Spanish acquisitions are fully integrated. All customers have moved. Legacy technology has been put out of operation. There's still work to do for the French and Dutch acquisition that's happening this year. The Finder acquisition will take some time. It's a relatively big one with 60,000 cars.
The focus is to keep selling, with an emphasis on Europe, continue to gain market share, grow faster than the market, then integrate the back end of all those operations. That will take a number of years. If there are other opportunities, we will look at them for acquisitions, but it is fair to say that it is done on a case-by-case basis.
Okay, thanks very much.
Our next question is from Sander van Oort from Van Lanschot Kempen. Please go ahead.
Hi there, Sander from Kempen. Thanks for taking my questions. Maybe you can elaborate a bit on the phasing of OpEx and CapEx throughout the year, is there any important marketing campaign or R&D plan which we need to take into account when modeling the quarterly numbers? Secondly, maybe you can help me in better understanding your sales guidance 2016 because, first of all, Finder already contributes probably around EUR 10 million-EUR 15 million to sales and implies that the underlying increase is probably only EUR 33 million, which is relatively slow growth for the remaining business. What are the moving parts to get to the EUR 45 million-EUR 50 million increase for sales for 2016, which implies quite a slowdown versus the growth seen in 2015? Finally, a question on the working capital, quite a positive contribution in the final quarter of last year.
Is it a structural thing, or should we expect a release in the coming quarters? Thank you.
Okay, phasing. CapEx is fairly simple. If you look at the CapEx 2015, if you strip out the acquisitions we made, it is EUR 107 million. The guidance for 2016 is roughly EUR 130, and that is fairly equally divided over the four quarters. For OpEx, the OpEx is traditionally a bit lower in Q1 and a little bit higher in Q4. That's the way to think about it. What was your next question, was the revenue?
Yeah.
Revenue of EUR 1,050 divided by four business units. The way to think here is that consumer licensing will stay fairly flat. Automotive will see in the growth of high teens and telematics helped by the acquisition of Finder indeed of roughly EUR 10 million of revenue will add mid-20s of revenue growth. Your last question about working capital. Could you repeat that question? Sorry.
There was a positive contribution from the release of working capital in the fourth quarter. I was wondering, is it a structural thing? Is it sticky, or is it likely to release part in the coming quarters?
A big swing factor for working capital in Q4 is always the time that we sell in and when we collect our money from retailers. That is not something that we could easily model or repeat for next year. What I can say is that our aim for 2016 is to generate free cash flow. That's the only guidance that I can give.
Okay, very helpful. Thank you.
Our next question is from Francois-Xavier Bouvignies from UBS. Please go ahead.
Hello, thank you for taking my question. I have two, actually. The first one is, how confident are you that booking will transfer to revenues? What is the conversion rate historically? Can you give us a split between maps, traffic, and navigation by any chance? I will have a follow-up, if I may.
Your first question is the conversion rate between bookings and revenue. How confident are we that if we make the booking that the revenue would also come.
Exactly.
Right?
Yeah.
I haven't seen that many cases that things get canceled. What you will see is that things might get delayed, and that cars go to market a bit later than originally planned. On the other side, there is also a lot of upside. There is often a lot of conservatism in the volumes that are put in the orders or the quotations. I think it will balance each other out and the net effect will be positive, if any.
Can you give us a split of maps, traffic, and navigation in the bookings for 2015?
No, we can't. What we can say is that the lion's share is in maps, then probably traffic, and then navigation.
Okay, thanks. I have a follow-up on telematics. Are you working also or looking at new application because you are focused essentially on the fleet management. Are you looking also on the insurance side, for example? Can you update a bit on this? Because I believe you have a partnership with Allianz, for example, in France. It would be nice to have an update here.
Yeah. You're absolutely right. Our core product is fleet management. That is typically sold to fleet owners who want to operate their fleets cost effectively or to a higher level of quality standards. New types of data types are also interesting. Insurance is a clear one. That is a market that's grown for us. It's a lower ASP, but potentially higher volumes. We haven't seen massive breakthrough in the deployment of usage-based insurance. At the same time, it's growing steadily. It's happening. There are other things that we're working on, in the context of the connected car. We're working with a large distributor here in the Netherlands, who's equipping all their vehicles with a black box, and are collecting data and make that data available to their own dealer organization, to the driver, potentially to the lease company.
If the user of the car desires that, the data can also be used to apply for an insurance quote. There is a lot of movement there and a lot of new opportunities for new value-added services, and we are in the midst of all that. A lot of that is experimentation, but also some real commercial contracts that we are installing at the moment.
Okay, thank you. You don't have any timeline about when it will happen for a new application to come through for TomTom?
Some applications are now fully commercialized. The Dutch VW importer, for instance, that's up and running. That is a commercial product. We expect that that will ramp up in 2016. Contracts with Allianz and others are also real, and are growing in significance.
Okay. Thank you very much.
Our next question is from Shyam Kumar from TT International. Please go ahead.
Hi there. Just in terms of the auto order backlog, which I know you said has had a sort of 50% CAGR the last two years. Given where we are in take rates and some of the new technologies, can we expect similar-ish kind of growth rates going forward, please? First question.
Yeah. It's difficult for me to comment on that. We don't give guidance for the order intake. It's also quite difficult to give you a good indication. It's going to be lumpy. We don't know exactly. We have a reasonable visibility of which contracts are up for grabs this year, but we don't have the full picture, because car makers have made their intentions clear to us. It's difficult to comment on that.
Okay. Fair enough.
Yeah.
Moving on, in terms of HERE having gone to the Germans, any thoughts there in terms of how that positively or not affected your competitive landscape, and also in terms of your ability to keep winning contracts with the Germans? Second question.
Yeah. It's clear that on the back of the announcement about HERE, we've been able to renew and intensify our contacts with a lot of car makers who we did have a relationship with, but are reinvesting in the relationship, looking at the new technologies that we're deploying, a lot of interaction at engineering level To look at what we have to offer, a thing that will help us to continue to win deals in 2016 and 2017. I don't think that the simple fact that HERE is now owned by the Germans is good enough for us to win business. What we certainly see is that there is a higher level of interest and also investment on the OE side to have a look what's happening at TomTom. Those due diligence exercises are going well.
The engineers are impressed how far we've moved on, the state of our technology, our vision of how this will evolve over time, and that will lead to further deals and further contract wins in 2016 and beyond, especially with car makers where we traditionally don't have a very strong relationship with.
Okay, perfect. It's not precluded you from winning contracts with the German themselves because you won that contract with BMW and Daimler?
Well, that remains to be seen. We are invited to RFQs. We have our commercial operations with the German car makers on full steam.
Okay.
How they will develop their relationship with HERE and TomTom remains to be seen over time.
Okay, perfect. Last question, coming back to Peter's original question in terms of Mobileye and I guess just creating a database space of landmarks using visual technologies. Do I understand you correctly in you're saying that stuff is a further layer of complexity on top of the mapping products that you guys deliver?
Yeah. We see that very much as an additional layer.
Okay. It's not really competitive. Okay.
That works seamlessly and is fully connected, and with, let's say, the standard mapping products.
Okay
where you find all the street names and the house numbers, the POIs, and all the other attributes that we have.
By itself, it's not enough to sort of deliver an autonomous driving solution without having the underlying mapping platform as well?
Say that again.
By itself, just a visual product like Mobileye or the like is offering is not enough to deliver an automated driving solution without having the underlying mapping data there. Is that correct?
Well, that remains to be seen. We are all experimenting. Car makers are experimenting. We are experimenting. We are looking for the right combination of data, sensors, and software. It's a race for the future. There are various schools of thinking. Various things are working well in daylight, but then not so good when in the dark or when the sun is low. There's a lot of work going on.
Okay.
It's not clear what eventually the right solution or right combination of technologies will deliver that autonomously driving car.
Okay, perfect. Okay, Harold. Thank you.
All right. Thank you, Shyam. That was the last question for today. 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 very much. Operator, you can close the call.
Thank you, madam. Ladies and gentlemen, that now concludes today's conference call. Thank you for your participation. You may now disconnect.