Good day, ladies and gentlemen. Welcome to TomTom's 1st quarter 2023 results 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 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. Please note that this conference is being recorded. I will now turn the call over to your host for today's conference, Freek Borst, Investor Relations. You may begin. Thank you, operator. Good afternoon, everyone. Welcome to our conference call, during which we will discuss our operational and financial highlights for the first quarter of 2023. With me today are Harold Goddijn, our CEO, and Taco Titulaer, our CFO. We will start today's call with Harold, who will discuss key operational developments, followed by a more detailed look at the financial results and outlook from Taco. We will then take your questions. As usual, I would like to point out that safe harbor applies. With that, Harold, I would like to hand it over to you. Thank you very much, Freek, and welcome, ladies and gentlemen. Good morning, good afternoon. Thank you for joining us today. I will briefly go over the key operational highlights and progress, after which Taco will provide further information on the financials. We had a good start to the year. Location technology business continued to gather momentum and showed robust growth. We've been consistently outperforming the growth of car production volumes in our core markets for some time now, and this trend continued in the first quarter. We reached a substantial milestone as well, as we now power more than 10 million automated vehicles with our advanced driver assistance systems solution. Those systems are important. They ensure driver safety and comfort. We're proud to be an important part of that. There continues to be a healthy demand for our maps, our software, and our services beyond the automotive industry as well. For example, our Navigation SDK, which helps businesses integrate our services into their products, is gaining traction in markets like fleet and logistics, ride hailing and food delivery. Also in enterprise, we extended our partnership with SAP. Our Maps APIs are integrated with SAP HANA Spatial Services, the cloud-based solution that helps companies access, combine, and process geotagged data. It enables SAP customers to use more advanced mapping services, adding context and visualization to location data. Looking ahead, we expect that our new maps platform, which we announced last year, will enable us to make further inroads in the enterprise and automotive markets. The new maps will add significant value and create new opportunities for our customers and partners. They will provide global coverage, rich attribution, and fast data integration, thereby enabling a wider variety of use cases. We are on track for a phased launch across geographies and markets and will add features to support increasingly sophisticated use cases. In anticipation of the start of the rollout, we have increased our sales and marketing efforts during the quarter. With that, I'd like to hand over to Taco. Thank you, Harold. I will provide insights on our Q1 financials and our outlook for the year, followed by a Q&A session. Our group revenue for the quarter was EUR 141 million, a 10% increase compared to the same quarter last year. Location technology revenue saw 12% growth, reaching EUR 180 million. Let's break down our revenue business by business, beginning with automotive. Automotive operational revenue reached EUR 84 million in Q1 compared to EUR 68 million in the same quarter last year, making a robust 22% year-on-year increase. Our performance exceeded car production growth of approximately 11% in our core markets of Europe and North America, driven by higher take rates and market share gains. Automotive IFRS revenue saw 34% year-on-year increase to EUR 81 million. The increase can partly be attributed to the change in IFRS revenue recognition for the new map subscription contracts, which we disclosed last quarter. Enterprise revenue declined by 70% year-on-year, settling at EUR 37 million. This anticipated decrease is due to contract renewals at lower values. Consumer revenue remained stable year-on-year at EUR 23 million. Our gross margin improved to 86% in Q1, up from 85% in Q1 of 2022, driven by a higher proportion of high-margin software and content revenue in our overall revenue mix. Operating expenses decreased to EUR 180 million, a reduction of EUR 11 million compared to the same quarter last year. Excluding depreciation and amortization, operating expenses dropped by EUR 8 million. The reduction in spending stems from efficiencies realized in our geographical data R&D, partially offset by ongoing investment in our app-application layer and increased sales and marketing efforts. Free cash flow for the quarter was positive at EUR 10 million, a significant improvement compared to the outflow of EUR 23 million in the same quarter last year. This figure excludes a one-off proceeds from the sale of our equity interest in Cyient and restructuring-related payments. The improvement in free cash flow is the result of a stronger operating result and lower investment in intangible assets compared to the same quarter last year. Our net cash position at the end of the quarter was EUR 321 million, up from EUR 304 million at the end of last year, benefiting from the one-off proceeds of the divested equity interest investment. With our Q1 results covered, let's move on to our outlook, as presented in the next slide. We had a strong start to the year and are confident reiterating our guidance today. We continue to project positive free cash flow for 2023, supported by top-line growth. Group revenue for the full year is anticipated to be between EUR 540 million and EUR 580 million. We expect robust growth in automotive revenue to counterbalance the projected declines in both consumer and enterprise revenues. Location technology revenue is forecasted to range between EUR 455 million and EUR 485 million in 2023. It's essential to highlight our commitment to achieving growth in a profitable manner. Our free cash flow is projected to be between 0% and 5% of group revenue for 2023. The guidance excludes charges related to the restructuring announced in June 2022. Of the total restructuring charge, EUR 12 million was paid in 2022, and EUR 4 million in Q1 of 2023. We expect to pay the remaining EUR 8 million over upcoming quarters. Operator, we are now ready to begin the Q&A session. Thank you. We will now begin the question-and-answer session. If you have a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, if you'd like to ask a question, please press star one and one. We will now go to your first question. One moment, please. Your first question comes from the line of Harry Blaiklock from UBS. Please go ahead. Your line is open. Yeah. Good afternoon. Thanks for taking my questions. The first is just on full year guidance. With Q1 reported, and the strong results that you kind of achieved, it now seems to imply limited sequential growth throughout the year, and that's in the context of the enterprise drag ending in Q4 and then auto production recovering as well. It looks like you're kind of seeing a bit of a slowdown throughout the year. I was just wondering whether you could give some color on the reason behind that. If you look at our Q1 performance, and you compare that with the consensus that was collected by ourself from the analysts, you see that we outperformed mainly in automotive, but also in consumer and we disappointed in enterprise. If you compare these results also with our internal planning, our budget, automotive was aligned with budget. Yes, it was up year-over-year, but it was projected to go up with these amounts. That in itself is for us not a trigger to increase overall guidance. What we see for the full year is that the reported revenue that we saw in Q1 for automotive is a good indicator for the rest of the year. I agree with you that it is fairly flat. Maybe in Q3 a little bit softer, in Q4 a little bit higher. The reason for that is that we saw some, yeah, maybe catch-up demand in the first quarter, higher production volumes. Yeah, we rely on the data that we get from our customers, and this is what it's telling us. I don't think it's a slowdown in any way, but it's just more an overperformance in the first quarter. In enterprise, it was slightly soft compared to budget, also compared to consensus. That is a factor of the softer dollar than where we thought we were at the start of the year. Consumer, there is a slight overperformance. Got it. One quick follow-up and then another question if I may. The quick follow-up to that is just in terms of the production growth that you're assuming for the year, what level are you assuming for that for automotive? Based on an aggregation of different sources, including our own sources, where we think of our core markets as the EU and North America, we project 7% increase for the full year. That is the market, right? And this was 11% in the first quarter. Okay. One last one, if I may. Just in terms of the market share gains, you made in Q1 in automotive, I wondered whether you could provide some color on what's been driving that, and kind of any feedback you've got from customers, why they've chosen your solutions over competitors. One is, for example, the contract that we announced last year is with Hyundai Kia. That's market share gain. We were not providing them before. Also the decision by Hyundai Kia to make navigation no longer an option, but a standard element of the car that is produced, that drives both our market share and our take rate. Hyundai Kia is a big element of that outperformance compared to car production units. Great. That's me done. Thanks, Taco. Yeah. Thank you. We will now go to our next question. One moment, please. Your next question comes from the line of Wim Gille from ABN AMRO – ODDO BHF. Please go ahead. Your line is open. Yes. Good morning. Can you hear me? Yes, we can. Very good. From me, a few questions. First on the SAP HANA announcement that you made. Is this just a normal extension of an existing contract, or are you really deepening the relationship and selling new functionality that allows you to increase your share of wallet within the SAP HANA ecosystem? If you can give a bit more detail on kind of what's changed versus kind of, let's say the existing contract that you had in place. The second is on the new mapmaking platform. You are now live in the Netherlands for some of the functionality. Can you give us a bit more feeling to what extent or what the speed is of the rollout, both regionally throughout Europe as well as, let's say, when you expect to have the full functionality of the new base map or new mapmaking platform available in Europe throughout the coming months or quarters? Then lastly, like to have a bit of a feeling how the discussions are going with automotive clients, whether you expect any new sign-ups on the back of the new mapmaking platform already this year or if that is due to the lead times in this industry, a bit more for 2023. Likewise for enterprise, which obviously has much shorter lead times in than the automotive space. Thanks. Thank you. It's Harold here. The SAP HANA extension is indeed an extension, new functionality that we're introducing there. That is a bigger contract and a more intense and a deeper integration into their platform. New maps. Yeah. It's happening. It's on schedule. We're happy about the performance of the new platform. The first maps that will become available are covering the United States, Great Britain and the Netherlands. They look good and extensive user testing, end user testing will commence shortly. Those maps are currently in alpha release for internal scrutiny. There is still quite a bit of work to do to iron out some edge cases and, you know, as you would expect. It is just work we need to get through. We're confident that we will start launching the new map in selected markets and selected use cases in Q2 of this year. A further rollout for the rest of the world will follow shortly after that. Yeah, I think it looks good. We have issued sample data to some of our key customers for evaluation purposes, so that's happening as well. Automotive clients and the interest in the new mapping platform and whether that leads to new contracts or not. It's a bit early to be honest, but what we do see is significant interest in the new platform. Also what we see is some OEMs planning to become partner in the Overture Foundation. You know, what our customers say is they like the idea, they like the idea of having a standardized base map to which they can themselves also put information. That's a functionality that's not really readily available right now. They see that as a good path forward, and there is significant interest also from what you would expect, a more conservative OEMs, is what we see. Enterprise, shorter lead times, but also with there we need to be really ready with the commercial launch. It's not quite there as I said, but also their traction for the SDK, the Navigation SDK. The Navigation SDK provides a seamless path to integration of the new map platform. It just, you can start with the old maps and then over time switch seamlessly to the new maps platform. We see that that's a valued property of the Navigation SDK, and we see traction for that SDK in enterprise markets. Again, before that, you know, it takes time. It needs to be integrated, it needs to be rolled out. It's important that we close those deals. Significant impact in revenue will take a bit longer, but that's also in line with our expectations. Maybe just 2 small follow-ups. First on the SAP HANA, obviously, it's a huge ecosystem. Is this something that we will see in the enterprise revenues going forward? If so, which quarter will the new contracts or the improved contract terms commence? Secondly, if you look at enterprise, and I appreciate it's difficult to give a bit of feeling about timing, new contracts and what have you. Is it fair to assume that based on your current expectations, we should be able to see year-over-year growth in enterprise again as of the fourth quarter of 2023? Yeah. Yeah, that's what we expect, growth again as of Q4 in the enterprise segment is what we are planning for. Going back on this SAP contract that's available now, it's integrated in the platform, but we need to see, of course, how it's taken up by the SAP customers and how it will be used in practice. That's not entirely clear to us yet, but we will get that clarity over time. Is it more kind of a contract based on API calls, or, is it? Exactly. volume based? No, it's volume. Okay. It's volume based. Yes, indeed. Thank you very much. Thank you. We will now go to the next question. One moment, please. The next question comes to the line of Marc Hesselink from ING. Please go ahead. Your line is open. Great. Thank you. The first question is actually a little bit the dynamics that you're seeing in the industry. You're launching your new map platform. Also some stories out that maybe some of the German OEMs are looking to making deeper partnerships with maybe the likes of Google and Apple. What are the things that you're hearing? What kind of moves are people making, and what does it mean for your relative position versus HERE and Google and maybe even Apple? Yeah. It's a good question. I think key part of our strategy and our planning is that the world needs a mapping platform other, you know, next to, next to Google. Google has a phenomenal product. It's used on mobile phones extensively, there are also limitations, both in the business model, in the data consumption and whatnot. The world needs a platform on which it can innovate, can bring data together. Obviously our strategy is to become that alternative. If you need more than a standard API, if you want to integrate with self-driving maps, it does maps. If you want to integrate the data you're collecting yourself as a user, they need more flexibility and more. That in itself will enable innovation. Our strategy is to become, over time, a clear alternative to what is there and become in that free market segment, the leader in location technology. I think that resonates. Our customers tell us that too. They want to have choice. They want to be able to innovate. They like what they see, our intent. I can see that in the interaction with our customers, the type of questions we get, the type of interaction we're having, that this is met with considerable support. Does that answer your question, Marc? Yes, it does. Maybe then as a bit of a follow-up, like those stories that are out there that maybe some of the German OEMs, which are hopefully not with you, but with your competitor, but are thinking about maybe getting closer to using software from Silicon Valley guys. Is it something that you also hear? I mean, do you see that kind of movements in the industry? Yeah, we've seen, of course, the announcement of Mercedes. It's not a customer of ours. It's a customer of HERE, obviously. It does put out a strong signal that, you know, we as an industry need to work hard to create that alternative. We're not completely there yet, but the route to having a competitive and competing platform with the associated services and SDKs is now truly within reach. Okay. Okay, thanks then. The second question is more, more financial. Your EBITDA in the quarter was actually quite a bit better than I expected. There will be moving parts in the coming quarters, but is this sort of level of EBITDA that you had in the first quarter, is that something that you can also achieve in the coming quarters? Well, EBITDA is a factor of EBIT and DA. I think DA will be fairly stable. I don't think that the EBIT will be as strong in the rest of the year. The answer is no. We had the OPEX that we recorded in the first quarter will go up in the quarters that we have in front of us, Q2, Q3, Q4. There was a release in the OPEX, but there's also a factor of the merit, the new merit that will kick in by the end of Q1, and further also in Q2, Q3, Q4. EBITDA for the rest of the year, the other quarters will be lighter, lower. Okay. Okay, okay, clear. Maybe to go a little bit further down into the free cash flow, also related to your guidance. If I, if I make the calculation, even including a bit more cost in the coming quarters, I tend to get a little bit above the 5%. Also taking into account that you now actually are receiving some interest on your cash position. Is this something that you take into account for your guidance, that if you will continue to receive that interest? Yeah, sure. That is a part of, we have over, we have roughly EUR 300 million in cash or long-term deposits. The split between cash and longer term deposits is one-third, two-thirds, two-third of that is in long-term deposit. On those deposits, we get a 3% yield, roughly, 3% plus. That's part of our free cash flow. It's nice, it will not significantly change anything. For the free cash flow, we continue to focus on 0%-5%. Based on where we are now, it might be closer to 5% than 0%. Yes. Okay. Clear. Thank you. Thank you. Ladies and gentlemen, once again, as a reminder, if you would like to ask a question, please press star one and one. We will now go to your next question. One moment, please. Your next question comes from the line of Martin Verbeek from the IDEA!. Please go ahead. Your line is open. Good afternoon. It's Martin Verbeek of the IDEA!. Firstly, you have sold your interest in Cyient. We do see that in the cash flow statement. However, when I compare that amount to your book value, there is a difference. I was just wondering if you had a financial impact in your P&L account selling this interest. The answer is no. The whole transaction doesn't influence the P&L. The difference between the book value that you see on the balance sheet, the balance sheet of the 31st of December 2022, is that we booked we compared it to the market value. Cyient is a listed stock, so we just took the share price at that time. In the meantime, the share price went up in the 1st quarter. That compares the difference between the EUR 50 million proceeds and the EUR 30 million that you see in the year book value. It didn't have any impact on our P&L. Okay, thank you. On consumer, surprisingly, a good performance this first quarter flat. Do you have some particular reasons why it was so strong? Secondly, you also guided for consumer that you expected it to be 10% lower decrease compared to last year. Do you still reiterate that, or have you become a little bit more positive on consumer? No, I think I let Harold answer the first question, but, for on the guidance, it's indeed that we stick to roughly EUR 90 million for the full year. Yeah. On sales of personal navigation are still going down, but we are now addressing a more hardcore group with more specialized users, where the demand is decreased, is lower. Think about truck drivers and specialized products that are still in demand in the market. That decline is partially offset by some growth in downloadable applications for smartphones that are paid for. Okay, thanks. Lastly, in the fourth quarter, due to IFRS changes, regarding revenue recognition in automotive, you had some EUR 9.6 million additional revenue. How much was that in the first quarter of this year? Well, or the delta. The delta between reported revenue, automotive and operational revenue, was EUR 3 million, roughly. I think for the full year, the delta is expected to be something like EUR 10 million. On a normal basis, that would have been EUR 14 million or so. The delta is EUR 30 million. Okay, thank you very much. Ladies and gentlemen, since there are no further questions, I would like to thank you all for joining us this afternoon. Operator, you may now close the call. Thank you. This concludes today's presentation. Thank you for participating. You may now disconnect.