TomTom likely to sell Telematics division
Dutch map and navigation services supplier TomTom has announced it is exploring strategic alternatives for its Telematics business unit, which may result in a sale of the division. The decision follows after several expressions of interest and a diligent review during the summer.
TomTom continues to focus on maps, navigation software and real-time traffic information and services. The company says it is also leading in providing 3D lane-level high definition (HD) maps for automated driving systems, from driver assistance to autonomous driving.
TomTom’s telematics is the company’s smallest division, but it has grown by 4 percent last year, posting a €162 million turnover. In total, TomTom registered €903 million in sales in 2017. However, it was unable to return a profit – the 2017 balance shows a loss of €204 million, mainly caused by the unprofitable Consumer division.
Two weeks ago, the Renault-Nissan-Mitsubishi group announced it would end its contract with TomTom and switch to Google Maps instead. The announcement raised serious questions about TomTom's future as an OEM map and connected services provider.
Indeed, these factors could be behind the decisoin to sell the high-potential telematics division - or at least spin it off. ING Bank values the telematics division at €700 million. The market reacted positively yesterday, but the stock value has remained stable since this morning.