TomTom posted strong sales of smart sports watches and other sports products in the second quarter, partly offsetting a drop in its overall revenues of consumer product revenues, which declined by 5.0 percent from the year-ago quarter, down to €157.2 million. On the other hand, revenues from the automotive and telematics segment jumped by 34.0 percent and 14.0 percent, respectively, while income from the licensing segment dropped by 14.0 percent. TomTom's total revenues remained flat at €265.2 million.
While investing in contents and services to reduce its dependency on hardware, the Amsterdam-based company has established the sports business as a strategic priority. Sales of its MySports activity tracking service reached one million users in the quarter. TomTom has also stepped up efforts to differentiate itself in the sports watch market with models that can store up to 500 songs and play them over wireless headphones, along with watches for running, golf and fitness.
The company's gross margin gained 4.0 percentage points to 55.0 percent, while the operating margin jumped by 5.0 percentage points to 16.0 percent before amortization (Ebitda). Adjusted net profit rose by 87.0 percent to €23.2 million. The company reiterated its guidance for the full year, with revenues expected to reach around €1.05 billion.
