TomTom N.V.

Bisera Grubesic - IR Harold Goddijn - CEO Marina Wyatt - CFO

Alexander Peterc - Exane BNP Paribas Stuart Jeffrey - Nomura Marc Zwartsenburg - ING Andrew Gardiner - Barclays Andrew Humphrey - Morgan Stanley Marc Hesselink - ABN AMRO Hans Slob - Rabobank Francois Bouvignies - UBS

Thank you, operator. Good afternoon and welcome to our conference call, during which we will discuss our operational highlights and financial results for the fourth quarter and full year 2014.

With me today are Harold Goddijn, our CEO; and Marina Wyatt, our CFO. You can also listen to the call on our website, and the recording of the call will be available shortly afterwards.

And 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 2014 financial results and the financial outlook for 2015 from Marina.

We will then take your questions. And with that, Harold, I would like to hand over to you.

Thank you very much, Bisera. Welcome, ladies and gentlemen.

Thank you for us joining for today’s earnings call. 2014 was a good year for TomTom both operationally and financially.

Group revenue was €950 million and the gross margin was strong at 55%. We delivered EBIT of €21 million and adjusted earnings per share of €0.27.

Marina will provide further information on the financial highlights and the financial outlook for 2015 later during the presentation, I will discuss our key operational highlights per business unit. Let’s start with consumer.

We made good progress towards becoming a multi-category consumer business in 2014. The European PND business performed well.

In 2014 we kept our market share and prices strong but that was offset by lower unit sales in North America. We completed the transition of our PND range onto our new NavKit software platform this year.

All new TomTom Go devices now offer lifetime maps and lifetime traffic services and will benefit further from our continuously improving navigation software. This year we launched a number of new PND such as the extended range for our TomTom GO PNDs and TomTom START making navigation accessible over the enterprise.

With the largest TomTom Bridge we expanded our consumer offering to the B2B markets this year. Our recently launched TomTom Rider specifically for bikers showcases our continuous commitment to designing products that meet the needs of our consumers in different categories.

Moving to our Sports business we successfully entered a GPS Watches Sports category in 2014. We shipped 500,000 watches and we doubled our sports revenue for the second year in a row to €50 million in 2014 and we aim to double this again in 2015.

We’ll continue to invest in this business unit as we are building a broader base consumer business. Our automotive bookings exceeded 220 million in 2014 which together with orders secured earlier will deliver growth in automotive from 2016 onwards.

We’ve extended our relationships with Volkswagen and announced two deals already this year. We will deliver our Maps to Volkswagen North America and our Traffic services in Europe.

We also announced to deliver LIVE services in connected navigation in Fiat’s Uconnect Infotainment System in the new Fiat 500X. We have made efforts to maintain our leadership position in Traffic increasing our global coverage and enhancing the quality of Traffic further.

Now 46 countries around the world have access to TomTom’s historic and real-time traffic information. Our licensing business announced a multi-year deal with Acer in the fourth quarter to bring TomTom turn-by-turn navigation technology to the new Acer smartphones with the launch of the new navigation application.

The app enables users to navigate anywhere in the world without extra roaming charges with the ability to download any TomTom app for free. We also announced a partnership with Intel and Opening Ceremony to power MICA bracelets with location-based services and real-time location information.

Investments in our new map-making platform which started in 2011 are fundamental to our future and will transform our map-making from a batch [ph] process to one in which our map is continuously releasable. Connected cars can then benefit from continuously updated maps and they can form the basis of map dependent safety systems.

Those systems over time will evolve and form the basis of highly automated driving and eventually to drive this car. This new platform allows us to manage and handle customer feedback in new real-time.

In other words, if we make a change to database we can distribute these changes to all our customers instantly. TomTom has already a highly cost effective map-making platform but further extension of the new platform roll out for further automation, including the ability to feed sensor data from cars into the platform.

We believe that overtime the winning map making platform will be the platform that delivers real time maps in the most cost effective way. Hence, our continued commitment to ongoing technology development.

Our fleet management business grew again strongly in 2014. And this was achieved by a combination of solid organic growth but we also made two acquisitions.

One in France and one in the Netherlands that both contributed to 27,000 new subscribers to our install base that has now reached 4,064 connected vehicles by the end of the year. The customers of Coordina, the Spanish acquisition that we made in August of 2013 are now all truly migrated on onto our web fleet platform.

The underlying industry dynamics for fleet management business remains favorable, a combination of shorter and return on investment for our customers and an under penetrated highly fragmented market allows to plan for long-term double-digit growth of our revenue. We continue to look for acquisitions to strengthen our fleet management business.

And this concludes my part of presentation I am handing over to Marina.

Thank you very much, Harold. Let me now look at the financial results in a bit more detail.

So if I then sort of summarize fourth quarter and the full year and then talk a little bit about the outlook. So we generated revenue of €258 million in the fourth quarter, which was a 3% decrease compared to the fourth quarter of last year.

The PND market in Europe declined by 6% in the quarter and we saw a fairly stable market share and higher ASPs. For the year as a whole our European market share gained one percentage point to 52% and ASPs slightly increased and this enabled us to outperform the market as a whole.

In the U.S. the market declined faster and we focused on managing our business tightly.

The two growth areas in our business in 2014 were telematics and sport watches. Sport watch revenue almost doubled in 2014 to €50 million and we plan to double it again in 2015.

In telematics the most important indicator of progress is the growth in our subscription business and this revenue grew by 34% in the year as a whole and by 36% in the fourth quarter. And in 2015 telematics will also benefit from the full year impact of the two acquisitions made during 2014.

On a full year basis the gross margin in the company increased by one percentage points compared to 2013 to 55% due to the combination of different geographical and product mix. Total operating expenses for the year were €502 million an increase of 1% year-on-year and this increase mainly came from higher R&D and R&D related amortization and also from marketing.

The decrease in SG&A expenses was largely explained by lower variable personnel cost offset to some extend by higher sales cost from increases in size of the sales force in Telematics. Our net result for the year was €23 million compared to €20 million in 2013 and this translated into adjusted earnings per share of €0.27 for 2014 compared to €0.26 in 2013.

The €0.27 in 2014 included €0.04 from a one-off tax gain which was recorded in the first quarter of 2014. Our cash flow from operating activities for the quarter was €32 million, compared to €51 million in 2013 in the fourth quarter.

The year-on-year decrease was mainly the result of higher working capital utilization in the fourth quarter of 2014 because of phasing. On a full year basis, cash flow from operating activities was €119 million, compared to €180 million in 2013.

The cash flow used in investing activities for the full year was €107 million, which was an increase of €16 million year-on-year. The majority of the investments we made related to our new transaction based map-making platform, the navigation engine NavKit, customer specific investments in automotive and also the acquisitions we made in Telematics.

On the balance sheet, I want to point out that since the end of last year we have a new revolving credit facility in place that runs through 2018 and can be -- and which can be extended to 2020. And at the end of the year we had drawn €50 million under that facility.

In our press release, we’ve also provided a table which shows a breakdown of deferred revenue by business units. The total deferred revenue grew in 2014 by just over €30 million to €146 million.

And we expect that deferred revenue balance in the balance sheet to increase again in 2015. The deferred revenue, it’s high margin revenue and once tax effected what we are currently holding in our balance sheet represents around €0.50 of earnings per share.

Now let’s turn to our outlook. In 2015 we plan for revenue growth and we expect revenue of around €1 billion.

This revenue growth will be weighted towards the second half of the year. We expect to see growth in three of our four business units.

So not in automotive where we expect a modest decline, but in automotive the 2014 bookings of more than €220 million provide support, that we are on the right track to start to show growth in the segment from 2016 onwards. We are impacted by currency movements.

Our top-line benefits from a strengthening dollar and also British Pound and this is included in our revenue guidance. Our gross margin is impacted negatively and it will be lower in 2015 as a result of the currency movements, we have seen.

As a rule of thumb a 10% strengthening of the U.S. dollar causes around a 2% decrease in our gross margin.

OpEx will go up slightly mainly driven by Telematics sales costs and also by slightly increased R&D. CapEx in 2015 is expected to run at similar levels to 2014, if you exclude the acquisitions we made during the year.

And the majority of our investments again will be allocated to the connected navigation system we’re creating for the automotive industry together with our investments in new map-technology and highly -- and for the requirements of highly automated driving. Our adjusted earnings per share is expected to be around €0.20 for the full year 2015.

So that concludes the formal part of the earnings call and we’d now like to hand over for questions.

Yes, hi. Thanks for taking my question.

I’d just like to dig a little bit into Telematics, so like to understand the underlying market growth there, do you see any acceleration with 15% roughly in underlying growth, if you could comment also on share gains outside of the effective acquisitions in this market in Europe and also I'd like to know how long it takes for you to onboard acquired customer basis fully and how you see the attrition rates. So how many people drop out in this process.

I believe there was about 10%, are you seeing any improvement in this ratio?

Thank you. So the dynamics in Telematics are favorable.

Our market share where we are the leading company in Europe by number of subscribers, our market share is still low. We are becoming in more and more countries in Europe the largest supplier, not every country that we -- more and more countries, we are becoming the largest and it is definitely our impression that we are growing much faster than competition.

So we are confident that we can continue to plan for the foreseeable future for high growth. 30% is what we delivered last year, approximately 30%.

We have no reason to believe that that will slowdown materially in 2015. The integration, the next question of an existing customer always, when we do an acquisition that's working.

We've done that now for Coordina fully. I think that took us all-in-all 12 months to transfer that customer base.

And we did not lose many customers in the process, I don't know the exact number but I believe it's lower than 5%. And what we have seen, especially in Spain is by merging those two businesses the combined growth became higher than the growth of the two individual companies which was a nice side effect of that acquisition that was not expected.

Then I think it there was a third question…

Yes, I'd just like to -- a quick follow up, I think that was little bit on Telematics, just very briefly on the currency you have a negative FX effect, but your major currency is US dollar based, so should we're expect in about 12 months all of the currency effects washout of the gross margins and also how you are hedged. And then a small housekeeping question what drives your revenue seasonality with a stronger H2 versus H1.

Thanks a lot.

Let me talk about that. I mean overtime this impact of what's happening on currency will start to get mitigated because in the end things will get adjusted.

So for us as a company clearly there are options to what costs can we take, further costs we can take out of the supply chain because somebody is benefiting somewhere down the supply chain, roughly [ph] supply chain on this. We need to look at pricing action and we are looking at those and creating more a natural hedge in our business as well by looking at increasing the proportion of our revenue in the group as a whole that is invoiced in other currencies.

But we do expect overtime of course that these impacts will mitigate. I mean in terms of our hedging, TomTom's P&L down to the EBIT level is a fair reflection of actual foreign currency rates and all the impact of our hedging activities is shown in the financial income and expenses line.

And what our policy is, is we take our major exposures and we seek to hedge the impact of cash flows. So foreign currency denominated cash flows over the next few months but it's not a long term hedge.

It's a short term hedge designed to protect our cash flows in the short term and that's the policy we followed for quite a number of years.

Okay, and on the seasonality?

Seasonality, yes so there is some seasonality in our business where our revenue is loaded more to the backend of the year. On top of that we’ve had a number of new products over the last few months which need to continue to build momentum as we go through the year and they will contribute.

And then we’ve got some natural growth coming through in our Telematics business and those are the things really that will drive the fact that the growth will be weighted towards the second half of the year.

Great, thanks a lot.

Thank you.

Hey great, thank you very much. I was wanting to ask about the map.

Could you just talk about how you see the benefits of the new map playing out in terms of any revenue opportunities and also whether or not now that it’s done does that mean that your cost, both expense and capitalized can start to ease off, or is there a new project in the works perhaps to get the map ready for more A dash [ph] type functionality, if you can just talk to that, that would be helpful? Thanks.

Yes, Stuart, thank you. The traditional map new platform is not complete.

That will take us into the end of the year but we are -- some countries now are completely on the new system. Remaining countries will follow before the end of the year.

And we will develop new revenue opportunities in through the year [ph]. I think the increased order intake that we took in 2014 is a clear reflection of the car industry looking with interest to those technologies and see what they can bring in terms of real time mapping.

So there is an immediate use case and that is of course that often in cars maps are out of date and it’s very hard to update them. It’s costly and people don’t do it and it’s major source of dissatisfaction that we want to solve quickly with this new technology and new run time map formats that run in the vehicle.

But it goes beyond that. If we look at future use of map data in the car then the dependency on those maps will increase and they will often be part of a security system whether that is breaking ahead of corners or whether that is actively managing fuel consumption, you can do a lot with an accurate map and but you need to be secure and you need to be able to say that that map is actually accurate.

The new technology will allow us to do that and will take that further into highly automated driving where it becomes really safety critical element than you need to revert to this type of technology. Otherwise it’s not going to work.

So it is a foundational element in our future strategy. Is the investment coming down overtime in engineering?

I think once we have done the full transition we will continue to invest in platform but we will invest in more automations and not in the fundamental map platform but automating a lot of what we currently are mainly doing. We want to bring that into the car automatically and detect changes automatically, make changes to the map database automatically.

And we believe that’s possible, it’s exciting possibility, there’s cameras that are now installed in cars, other sensors. We’re working with Robert Bosch in research programs to make that a reality for instance, speed sign recognition.

We want to do that fully automatic in a close loop system where cameras in the car look at those signs. If there is differences what’s in the database an incident is raised that will go automatically in our map making platform and will be validated and distributed.

So these type of technology will make maps better, higher quality but also have the potential to reduce the cost. Now on the other hand the requirements on maps will go up.

So the other effect is what you see is that provision [ph], the requested provision for digital maps will go up. It needs more detail, 3D lane models are part of that new map so you have different movements, I think in the cost of making them.

Cost are coming down, requirements are going up. How exactly that will pan out is not yet clear but what we strongly believe that is the party with the most cost effective platform, the best technology has a good chance to be the winning platform in this industry.

Just to clarify, a lot of your competitors seem to be driving around using LIVE down [ph] things like that to get that automated data already. Is that also what you are doing and you’re at that same stage or is that something that you still need to get to?

No, that’s what we’re doing. We have in 2014 doubled our van, the number of vans that we are using.

We equipped them with the latest generation of sensors. We have with those vans created the maps that are used for highly automotive driving and as a proof-of-concept those maps have been tested and worked.

As a result we have filed proposals to standardize the map format in the [indiscernible], that has been adopted as well. We have clear specifications and mass production of those new 3D maps have started.

So but the challenge here is not so much doing it once. That is relatively -- dark [ph] as well understood, there are costs associated to that, but it’s almost dramatic.

I think the real challenge is how we are going to keep those maps up to-date and in the future and that is also part of further research and investment.

Okay.

Thanks for taking my questions. First on the order move in automotive in Q4 and the jump on assembly to 220.

That’s quite a jump. Can you give us a little bit of color on what drives that jump in the order book?

I can’t be customer specific but the difference is new contracts have been booked. It’s as simple as that.

There’s not much more to comment on that other than it’s a combination of traffic deals, map deals and software deals.

So it’s in -- can you give us the number of deals that is in there to give a feel for the size?

No, I can’t.

Okay, so it’s at least not one or two deals, it’s a multiple as you referred to.

Yeah, it’s multiple deals, correct.

Okay. Then the question on the PND declines in North America.

The markets in Q4, so not only your market share but also the market itself dropped significantly an accelerated decline. How do you explain that?

Is there more cannibalization for smartphones going on there or is there another explanation for the sudden jump and are you worried that we might also see that in Europe?

So the market in America is different. It’s part of later -- PND started later, it never reached the level of penetration that we’ve seen in Europe and it started to decline earlier as well.

So it’s not as much a trust, it’s form factor and trusted devices as it has become in Europe where tens of millions of people have been using them traditionally to great effect. So it’s really, I think it’s a matter of small installed base that’s familiarity [ph] and that’s why we see these different market developments.

Yes and I’ll just add one thing specifically about Q4 as well. I think in Q4 the U.S.

market is very characterized by commercials and holiday deals and Black Friday and all of this going on in Q4 and when it’s a category that is not -- is declining quite fast and is no top of mind, I think that gets even exacerbated in the Q4 period. So I think that acceleration’s partly due to the fact that it was that season as well.

Okay and then a question on licensing, in 2014 the division [ph] went down a little bit, now you scored a new deal with Acer. Can you give us a sense for the size of the annual revenue to expect from such a deal and obviously licensing is developing going forward should we expect a growing trend or stable?

I mean our licensing business is characterized by quite a large number of customers and there are two parts of business, consumer licensing business and there is a government and information special systems business as well. We’ve got quite a large number of customers.

I think the Acer deal individually is not one that in itself-by-itself moves the dial particularly. I mean it’s just an illustration and example of the types of new businesses, that are emerging in licensing.

We’ve been with this business now -- what we see going forward is that we have strengthened our sales force, clarified our proposition and split the business more to definitely for between consumer and government. And we are beginning to see a higher level of contract wins than we had in the past, but many of them relatively small, many of them we have to see how they develop.

So kind of our feeling about the licensing business is we should see start to see some growth from that business, a little bit of growth in 2015 now, which is encouraging.

Sure. And then on Telematics, the acquisitions there, what kind of sales multiples are you paying there for the acquired businesses?

The way we value those businesses is we look to see -- when we buy one of these businesses, we’re looking to buy an installed base of subscribers, if you like who we can takeover, convert on to the WEBFLEET platform and then strengthen our opposition in a particular country and hopefully accelerate growth off from that. So that’s the model.

So we look at the installed base of subscribers and then we ascribe a value to each subscriber, multiply that by the subscriber base and that’s how we value it.

Okay. Can you any sense?

So well, you can see that both new deals that we took on in 2014 were in the region of 25,000, 26,000 subscribers each time. And then if you look in our cash flow statement you can also see -- get some rough idea what we are spending on acquisition.

So I mean, we haven’t, I’m afraid disclosed the exact sums and there are earns out. So that’s not the full picture.

There was a bit more to come through, but it will give you some measure of it.

Okay, okay. Then the final one for internal tax rate, what should we use for the mobiles going forward?

I would say to use -- if you use 10% for the underlying tax rate, that’s about right.

That’s still the number, okay. Well, that’s it.

Thank you very much for taking my questions.

Okay.

Hi, good afternoon, thank you. I was interested in seeing if you can help a little more on the automotive side.

I appreciate you guys giving us a few more data points there but as and when given a little, we try to ask for more. You are in the practice of announcing certain contracts when allowed by your customers but clearly not all.

And so to rephrase the earlier question, can you give us an idea of what proportion of the 220 million in bookings you’ve signed have been announced by press release and perhaps what hasn’t?

I find it hard to answer. It will be a wild guess, I don’t think I should go there.

But in general, there is a lag to taking a booking and making an announcement in general, that’s the general view.

Okay.

So and if you look at the deals that we have announced in 2015 those were deals that were booked before 2014. So that should give you an indication there is fair deal that has not been announced.

Right.

Okay, But it does vary, as Harold said. So it’s kind of -- it’s difficult to be absolutely specific and only give you that general idea.

Okay. And put another way do you have a rough idea of how much is related to traffic versus how much is related to maps and how much is related to software in terms of your -- especially the relative success between the three modules?

No, again, but where we do a triple play, so that is content combination with services, mostly traffic rules or other synchronization services software, mobile phone integration services that we do over the cloud. And software, so there three pillars of our complete navigation suite that's where we have the strongest core position at the moment.

So we see a lot of demand for that integrated suite of navigation components that can be easily integrated either by tier one or an independent software developer or we doesn’t matter, but the hard things about navigation we have solved and now made available to an increasingly growing software developer community.

Thank you.

Hi there. Thank you very much.

I have got a couple of questions. First thing on automotive and can you help me understand how variable could that revenue base be next year?

For example you obviously know the models you are going into but if those models sell more cars or if there is a higher take up by the end consumer of kind of infotainment systems or mapping in the car. Is that a potential incremental delta on your revenues next year?

There is -- so when we do a contract it’s based on a defined introduction date, typically defined number of cars and the defined period of time and that is quite specific per annum and what have you. Those numbers can vary in reality.

Sometimes it happens A, causes delay sometimes it happened that we sell less than we anticipated but more often the take rate seems to be a little bit higher than originally anticipated when signing the deal. I would say on balance the numbers are fairly accurate and reliable and the deviation from the expected outcome is not that important.

But are you saying like quite, so I think Nokia here, they were talking up kind of take rates Harmon as well as in the U.S. are you seeing any sort of acceleration in take up rates?

Yes we do see that navigation is moving more into the mid-range, higher take rates than traditionally the case. But I think when we take the order and we publish that number, those higher take rates are normally included in the total deal value.

So it is right that the market is growing, more cars, higher attachment rates, moving also to the mid-range.

Okay, perfect. And on the consumer side, sorry.

Yes, no problem sorry.

So on the consumer side and you seem quite confident in doubling your revenues in the sports watch. Can I ask are you just thinking about in terms of the sports watch or is there other products coming into your kind of a 100 million assessment please.

Well we think about it as a sports category.

Okay. So it's not just the watches it’s also the golf watch and any new products you might launch this year.

We see the segment as a sport segment and I think we of course are looking for what we can do in that space and we're now focusing on running but there is -- there are all QCs [ph] there as well we think.

Okay. And is it just widening out your distribution as well as pushing new products to it or just more consumer recognition of what you're doing in that space.

I think the biggest driver is actually coming from consumer recognition. So the products are well received, they are [indiscernible], like them word of mouth is good, customer satisfaction is good.

So the most important driver is TomTom being associated sports category more directly as a reliable supply of reliable and accurate products.

Okay. Perfect.

And just quickly on licensing, I know you mentioned that there are new businesses emerging within the licensing. How many new -- like what's the full growth of new verticals and new businesses that need kind of maps or mapping stuff out in your licensing business deals volume wise.

Yeah I mean it's hard to quantify that. I mean we -- what we see is that there are new use cases coming forward where we can play and what we're trying to do is spot those new trends as they come through with new categories that companies sort of come forward with, we try and pick the winners and partner up with them because there are kind of many, many types of opportunity or types of applications that come forward that we see but the question is which ones are going to be winners.

So it difficult I can’t give the volume, what I really is try to put it in the context of is that we do see that we have a basis to start to slowly grow what we are doing in licensing again because there is wider proliferation opportunity out there.

Perfect, and one last to Harold. And I have spoken to about five to seven or eight CEO and CFO of auto companies, auto parts companies, tech companies; they all seem to say that mapping is critical for any alternative driving automated driving feature.

Can you confirm that in your point of view too?

Yeah, I can confirm that. It is not the only thing that you need but it’s an essential part of the whole overall sender system if you like.

Thank you.

Hi, thanks for taking my question. Just one for me actually.

On the PND market it seems as though the guidance you have given for 2015 implies an improvement in the market compared to what we have seen in the past. And I think this is certainly not the first quarter where you have said that business is performing perhaps better than you would have expected or then has been the case in the past.

Can you just talk a little bit about the trends you are seeing there, whether you feel there is improvement in visibility, how the competitive environment has changed and may be sort of give a view on how good or how bad could the outcomes be there and how much variability you see in PNDs now in 2015?

Yeah, I think -- so there is no -- make no mistake, the markets still declining, so both in Europe and North America, but especially in Europe is going slower. And in some countries you see more growth, nothing spectacular but UK for instance was up 3% in think in volume last year.

So that is -- that is not too bad. ASPs were stronger, a little bit up last year and products generally speaking are getting better and the dynamic element of our products with traffic and dynamic routing and smart routing really fulfill a need.

And it’s a good showcase for us as well. But I don’t think that market will go back to growth.

Now there are other niches that are interested and interesting. So we delivered last year a driver terminal for business to business environment.

That’s not just navigation but also provides a developer platform for specific on-dash [ph] applications. Now we are more interested in developing this specific application by providing an open platform on which software developers can do their thing and that has good traction in the marketplace.

So that’s another niche Rider motorcycle product that we re-launched. That is not something that will be cannibalized by mobile phone applications because of proven it needs to be robust and safe and all that good reasons.

And so there are a number of markets and niches that in itself can grow and are in combination important. So the longer term future for PNDs and similar products is, I think still not looking good, in fact it’s going down but it will be more stable and in that category niches that can grow and can develop and those niches are typically more profitable than the mainstream PND ranges that you buy in retail.

And if I can follow-up on the core PND business that you mentioned stronger prices and you talked about in the press release as well. If I could ask you what is driving that, is that in part a function of recognizing the revenue you started to defer a couple of years back, is it -- are you just presenting more compelling products at the top end?

Are you seeing less competition in Europe as you consolidated the market share there, what’s behind that do you think?

Well, it is a combination of all that expect for the first component you mentioned. It’s not matter of bringing deferred revenue back to the P&L because on balance the deferred revenue will continue to grow.

So that’s it’s more the -- so you see negative effect from deferring that revenue. But the products are better, the connected versions of our products are selling well, that’s the small segment that’s high value.

We disciplined our pricing, competition is relatively disciplined, the landscape is easier. There is not a lot of competition around except for usual suspect.

So it’s a relatively stable business where you see less pricing activity and more kind of a longer term underlying demand that we will continue to supply.

Okay, thank you.

Yes thanks, on automotive as well, obviously some good contract awards. Also the competition Nokia had some good results in the automotive business.

How do you see that, are you winning market share from them or is it just the market is growing as a whole is growing very rapidly? And maybe related to that how do you see the pricing environment in competition with them?

Yeah, so market share now it’s difficult to obtain. There is no independent source our impression is that we’re winning more than we used to win and that is reflected in the total won or intake for 2014.

We expect that we’re going to extend the [indiscernible] at the expense of Nokia but also recognize that the market itself is growing. So I think it’s a mix effect.

Okay, thanks. And the pricing environment to win the contract is that very competitive, or is it other items where people chose the…

Well this – our is competitive let’s make no mistake but at the same time the total portfolio is broadening. So it’s combination of specially combination of maps or services [ph] contain still healthy ASPs.

You see a price pressure on maps so that’s also no news been around for years but we can compensate to a large extent with new value add products that we also bring to the market.

Okay clear. And finally also on highly automated driving, it seems to be lot of test going on by the car makers, it seems that it’s -- I mean it was already a focus but seem to have just getting more and more focus, is that also your impression that it’s more top of mind of them or are there additional investments in there or?

It is top of mind of most car drivers. There is various levels of belief in whether those cars will ever drive completely automated or driverless, but there is increased confidence that at least partial automatic is really possible and that will pave your way for further automation.

So I think within the next four-five years you will see cars that on a certain conditions car can drive without human intervention. No doubt we will start with motorways than it goes to the country roads and perhaps into the city.

But it seems that the technical challenges for getting it to work safely on motorways car makers are well on their way to design and get that working. It will need testing prices of sensors need to come down and there is all sorts of things that need to happen to make it mainstream.

But I think there is increased confidence that at least from a technical perspective things are solvable.

That is clear, thanks.

Yes, good afternoon. A question on the negative U.S.

dollar impact on your cost of goods sold. Would you plan maybe some additional price increases for instance in Europe for your PND business to offset the negative dollar impact or maybe are you possibly switching to maybe to more U.S.

dollar based pricing strategies because it has a significant impact on our gross margin and probably you would like to mitigate that?

Yeah I think the possibilities that are short-term are limited but overtime all competitors are facing exactly the same issues and same problems and challenges. So what you tend to see is that with product introductions, new product launches they are priced on the new realities of higher cost of goods sold.

We are not a disadvantage compared to anyone else in our industry and what we see in the past and we expect is that those price increases will be translated into higher prices but at the same time you get cost reductions in bill of material. There is no reason why the fundamental margin that we are making is going to change dramatically over the mid-term I would say.

So with time lags you are probably going to mitigate the negative impact?

That’s what we expect.

Yes, sure and second one you’re signing more and more multi-year longer-term deals in automotive and in consumer you’re deferring more revenues. What is currently the percentage of let’s say your recurring revenues?

Recurring revenues you mean what goes through the P&L?

Yes, what goes through the P&L.

If you look at the consumer business we are typically every time we make a sale of the PND we are deferring something like similar between 10% and 15% of the selling price is being deferred. All right and in the automotive business you need to look at that on a contract by contract basis but the broad way to look at it is that if it is a map sale and it’s a single instance map sale we take a little revenue.

If it’s a map sale with the map update service built that comes along with that then a relatively small proportion of the overall revenue will get deferred and spread over the length of the contract. With a traffic deal it’s a service, so that’s slightly different and you have to spread that over the period of the contract.

So that’s roughly how it works. What we try to do now is give you more visibility about how much is being deferred.

I think in the consumer business it’s relatively straight forward to see what’s going on but automotive we need to give a little bit more guidance because it depends on the mix of the business.

Yes that would be a fair answer. And you said in the introduction that the deferred sales level has a €0.15 EPS impact.

How do you exactly calculate that?

Okay let me explain what I meant. We’ve now got at the end of 2014 a €146 million of deferred revenue sitting in our balance sheet and that deferred revenue will flow back through our P&L over a period of time.

But if we’re going to say right now we stop deferring any more revenue and we flow that all straight back through the P&L it’s high margin and you just need to tax affect it and the impact of that €146 million flowing straight through the bottom line would be €0.50.

€0.50 all right.

Yes, so that’s what I meant by that.

80% gross margin and a 10% tax rate and you come to that roughly that’s the calculation?

Yes, I mean it’s a rough rule of thumb calculation there.

Okay, thanks Marina.

Hello and thank you for taking my question. I have only one actually.

It’s on your guidance. So you guided like €1 billion for the year and what I was trying to figure out is like how much is on your contracts and what is the impact of the currency in this because when I look at it you will have a tailwind in 2015.

So let’s say 2% and then you have the new contracts, so I want to figure out what is let’s say organic, really what is your new contract annual stood at for example because if it’s a traffic contract, if I understand correctly it will be -- we’ll see through the year. So if you can help me understand is that what you guided to?

Yeah so what we have said in our guidance is roughly €50 million of growth in 2015, is that this three of our businesses will grow. So that is our three businesses, but not automotive.

So we’re not going to see growth. In fact automotive will be down a bit compared to 2014.

So the impact of the new contracts in automotive is very, very limited on 2015.

Okay.

So we’ve got, if you like four components of our growth, which are the three businesses, that are growing and the fastest growth in that will come from Telematics. We also see expect a small amount of growth from consumer and also from licensing.

And then there is also a currency component, because all revenues that we have that are in dollars and Pound Sterling primarily. So those are the components.

And can you quantify the currency impact on the guidance?

No, I can’t exactly quantify but I mean I think roughly, we’ll have something like a 2% impact of that amount that we’re growing by about maybe around 2% of that will come from currency.

Thank you very much.

And with this, we would like to close the today’s call. Thank you all very much for joining us.

And 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.

Operator. You can close the call now