TomTom N.V.

Jacoline Overdevest - IR Harold Goddijn - CEO Taco Titulaer - CFO

Francois Bouvignies - UBS Martijn den Drijver - NIBC Markets Marc Hesselink - ABN AMRO Marc Zwartsenburg - ING Andrew Humphrey - Morgan Stanley

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 2016.

With me today are Harold Goddijn, our CEO; and Taco Titulaer, TomTom’s CFO. You can listen to the call on our website and a recording of the call will be available shortly afterwards.

As usual, I would like to point out that Safe Harbor applies to today's call. We will start today’s call with Harold, who will discuss the key operational developments, followed by a more detailed look at the 2016 financial results and the financial outlook for 2017 from Taco.

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

Thank you, Jacoline, and welcome, ladies and gentlemen. Thanks for joining us on today’s earnings call.

We lived on our updated 2016 guidance with revenue of 987 million euro and adjusted earnings per share of 23 euro cents. We are shifting towards high margin software business which now reflect nearly 50% of our revenue mix and more than 70% of our growth results.

As a result growth result grew strongly this year with 9% and gross margin grew to 57%. Taco will provide further information on the financial highlights and the financial outlook for 2017 later during the presentation.

I will now discuss our key operational highlights and strategic priorities. Automotive products continue to do well, and that resulted in order intake for 2016 of more than 300 million euros.

Order intake for previous years now have started to deliver a strong revenue growth in automotive. We are working with a majority of automotive OEMs and tier ones to integrate a high-definition map, for example, in to the self-driving system.

We acquired earlier this year, an autonomous driving start-up with around 35 employees, of which a majority holds a Ph. D.

in fields that are of key importance to autonomous driving such as artificial intelligence, neural networks robotics, [cognitive] location analysis, computer vision algorithms, signal and information processing. We’ve acquired a vast amount of tactical expertise that will be of value in the further development of our location technologies.

In the quarter, we partnered with Lucid Motors and entered some smaller contracts with tier one and tier two suppliers including [Dgin] through which TomTom maps software and services appeared in models for Mitsubishi. Innovative nature of our products was recognized by Fiat/Chrysler, who gave us an award for Innovation Supplier of the Year 2016.

In licensing, we announced a partnership with Microsoft to integrate our APIs in to the user world platform. Our technology will power location component of the Azure intelligent plant and this partnership opens up a large market of enterprises and software developers who are already using Azure for application development.

We also expanded existing agreements with MapQuest, Pitney Bowes and SAP. Telematics business has continued to grow throughout 2016, reaching nearly 700,000 subscribers by the end of the year.

This growth has been realized organically and represent a 15% increase compared to the end of the last year. Our consumer business is transitioning from a decline in PND markets to a growing sports business.

In 2016, we shipped over a million sports devices. To confirm our commitment to the sports business we’ve have introduced TomTom’s sports brand and an advertising campaign to encourage people to get going and live healthier.

Moving to the next slide, let me give you a short update of our strategic priorities. Over the year we have advanced in maps, online services including traffic and navigation software.

These location based applications are licensed through our automotive business to automotive customers and to non-automotive customers through our licensing business. But given the similar nature of the (inaudible) we have decided to combine automotive and licensing business going forward from a strategic and reporting point of view.

In automotive and licensing, we aim to grow through technology leadership and real time map making, traffic services, application software and a wider range of location technologies. New growth opportunities in ADAS and autonomous driving are now materializing.

Within telematics, we continue to grow our fleet management business and new connective cross services such as vehicle leasing will start to contribute to the topline growth in 2017. We expect to increase our market share as the leader in a fragmented European market.

We will capitalize on our scale by continuing to invest our connected car platform to provide new APIs that will form the basis for accelerated product innovation and we will continue to nurture and grow our partner ecosystem software developers will help us to enter new markets and are adding depth and breadth to our service offerings. As I mentioned earlier, consumer is transitioning from a declining P&D markets to growing sports business.

We have established robust and growing consumer sports category and we will invest for further growth with the ambition of being the number sports wearable brand in Europe. As well as having growth potential the sports category is a good fit with the brand and our capabilities in smart devices with associated cloud based applications and smartphone applications.

We will exploit niche growth opportunities in the drive sector such as our bridge driver terminals for businesses, which take advantage of our device platform and capabilities. To summarize, we feel we are well positioned to capture growth opportunities across our automotive and licensing telematics and consumer businesses and many of those growth opportunities are driven by big trends including Connect2Car autonomous driving, smart cities and wearable.

This concludes my part of the presentation. I hand over to Taco.

Thank you Harold. I shall now begin a more detailed look at our financial results.

I will mainly focus on the full year results 2016. In 2016, we delivered revenue of 987 million euro, 2% lower compared with last year.

Automotive, telematics and consumer sports grew strongly largely offsetting the reduction in consumer drive revenue. With 40% of the group total consumer drive remained the biggest revenue contributor for the group.

The percentage was 48% in 2015. Automotive revenue was up by 25% to 133 million euro this year.

This strong growth reflects increase in revenue from a contract that started kicking during 2016, as well as higher revenue on existing contracts. The deferred revenue position of automotive increased to 59 million euro at the end of 2016.

This contributed to our strong gas generation during the year. Licensing revenue decreased year-on-year to 136 million euro and telematics revenue was up 15% year-over-year to 155 million euro.

The recurring subscription revenue for the year increased with 21% to 118 million euro. Recurring subscription revenue represents 76% of the total telematics revenue and that is up from 72% of the total in 2015.

Consumer products revenue decreased by 9% to roughly 0.5 billion in 2016. This decline was driven by lower PND revenue, which was partly offset by strong growth in sports revenue.

Sports revenue amounted to more than 100 million in 2016 and that represents an increase of 53% compared with last year. Consumer PND markets were weak during the second half of 2016, the European PND market experienced a faster rate of decline compared with the first half of the year.

The market in units was down by almost 20% for the year as a whole. As Harold already mentioned, despite a modest decline in our group revenue we are seeing an increase in our growth margin and our growth results this year.

High margin software business now reflects nearly 50% of our revenue mix and more than 70% of our growth results mix. As a constant, our growth results grew strongly this year with 9% and our gross margin increase 57% of total.

Operating expense for the year were 557 million compared to 580 million in 2015. The year-on-year increase was driven by higher amortization cost, which grew with more than 20% to a 123 million in the OpEx lines.

2016 EBITDA grew about 14% year-over-year to €141 million and EBITD amount 9 million euro versus only 1 million in 2015, reflecting the overall higher growth results partly offset by an increase in OpEx. The net result for the year was 12 million euro which translated in an adjusted earnings per share of €0.23 on a fully diluted basis.

Free cash analysis amount 35 million in the year and at the end of 2016 we reported the net cash position of 133 million and that is up from 98 million at the end of 2015. The cash flow used in investing activities was €120 million in the year.

This is a decrease of 34 million compared to last year, which include two acquisitions of combined 42 million. Investments in 2016 is related to our transactional map making platform, the map database and automotive customer specific projects Now let me go to the next slide, the automotive order intake.

What we’ve shown on this graph is the automotive order intake since 2013 in the grey bars and we compare that with the reported automotive revenue and the addition to the deferred revenue on our balance sheet. What I want to highlight here is the developments to order intake and the translation thereof in to recognized automotive P&L revenue and the net deferred revenue on the balance sheet.

Recognized revenue together with net deferred revenue on the balance sheet represents the total operational revenue in a year for automotive. For example, adding recognized revenue of 133 million and a net deferred revenue of 36 million for 2016 totals 169 million in 2016.

If you compare that with the operational revenue of 2015 of 160 million, this represents a growth of 46%. In 2017, we expect to report an automotive growth of more than 20% and together with the addition to deferred revenue on the balance sheet this represents an operational revenue of above 200 million.

Order intakes from 2014, 2015, and 2016 will continue to contribute to strong growth of our automotive business in the coming years. We will deliver growth to our recognized P&L revenue, but also it will continue to increase the automotive deferred revenue balance.

The last slide, the full year outlook of 2017. As already communicated in the press release, we expect revenue of between €925 million and €950 million.

The adjusted earnings per share is expected to grow to around €0.25, and we expect a combined revenue of automotive, licensing and telematics businesses to grow above 10% year-on-year in 2017. This is in line with our previous expectation of their combined revenue CAGR of 15% between 2016 and 2020.

In consumer, we expect the PND revenue to continue to decline and this will be only partially offset growing sports business. We expect the level of investments both CapEx and OpEx to show a modest increase compared with 2016 excluding acquisitions.

In particular, reinvesting in advance content and software for the automotive industry and in our map making activities. This concludes my part of the presentation and operator, we would now like to start with the Q&A session.

I have a couple, if I may, the first one is on your PND performance of the three in ’16 which were lower than expected at least some of it. Given the outlook in this business, what should we expect in terms of actions in ’17 that you could make and what is your strategy for this business going forward given the trajectory of the growth.

The second one is on the M&A strategy, you acquired a new business presently. Do you need to acquire more businesses in ’17 and beyond, that’s the second one.

And the last one is on the order intake, can you give maybe quite a few comments around your number like market share, ISPs, how do you see it going forward as well.

Firstly, let’s look at the PND market. So it’s still a declining market, it has been a declining market for a long time, and we continue to play in the space.

We run that profitable operation, we bring and we have pulled out cost in 2016 in line. With the new market size we expect that the market will continue to decline in 2017 and beyond, and what we will do is we will bring the cost in that segment in line with those realities.

M&A strategy, we’ve nothing planned for 2017 or beyond. It’s not something that we want to acquire of where we are for the look out at this stage.

We consider to look at opportunities for telematics, as you know we’ve done it in the past. We’ve acquired four businesses, if and when there are auto (inaudible) to make a deal in this space, we will look at it very carefully, but otherwise we don’t have anything planned.

And the third question was about order intake for automotive?

Yes. May be your market share, how do you see it evolving and the ASPs and the usual trend of the market inside the (inaudible).

Thank you.

Market share I don’t know, to be honest, because we don’t have the full picture. There’s nothing that we can - there’s no external priority with charting the size of the market.

So that will speculative for me to give you a number there. But I think the trend is that we are increasing our market share, you’ve seen that in 2016 where we continue to grow.

So I think we are on the right track there. ASPs are - we see two things in ASPs, we see the prices for maps as standalone products are coming down slightly, but we also see increased demand for new services and products and that includes software mobile phone applications, update services, traffic services, patent services and so on and so forth.

So the total available amount of money per car is actually going up.

With regards to your CapEx, OpEx in 2017, can you share with us if that assumption includes risk based under current client roster or is that already taking in to account the assumption contract wins? That would be question one.

And if you look at automotive and your ambitions for market share gains and I think that you mentioned Harold 45% or 50% longer term target. How should we then think of CapEx, OpEx going forward?

Do you expect it to continue to increase given that for each large client that you win which is only (inaudible) you have to get to the 45%-50% market share? Do you expect that then OpEx, CapEx to continue to increase or are there some learning effects or other elements that could bring increase to a lower level thank you?

Well let me take the last question first, if you win an automotive deal then couple of things happen. So typically if you sell the full stack, you sell maps, compiled max, software applications, services like traffic and that’s it.

And then of course you need to provide integration services as well to get all of that software running on [that] unit. The only variable bit in principle is the integration service, which is a small proportion of a total deal size and the amount of money we need to spend per car to get that software running on my specific (inaudible) unit is typically coming down and that is because the quality of our components is better and we’ve done it before, we have incorporated features and functionalities on amount of other customers and we can sell those.

So it is a highly scalable business. The same is true for traffic services and other services.

Now sometimes we need to do something extra in the map, because the customer selling cars where our coverage is at par. That doesn’t happen very often, but it does happen and then we need to additionally make some cost in additional map making or improving certain map elements or attributes.

But in principle, the automotive business is highly scalable, except for integration services, but those integration services are a small proportion of a total deal size.

And Martijn to answer your first question, we have an allocated part in our planning for deal wins that means if the structure or the size of the deal wins is more complicated or larger than we have anticipated than OpEx and CapEx can be higher and the other way around.

And to put it differently, if you win a total deal to North America we’re looking at higher CapEx or OpEx, if it’s a contract like (inaudible) you will be fine. Is that’s the way to look at it?

It depends. This is not always volume based, it is more what the customer ask for, so is it standard map or is it a map plus software or map plus software, map updated etcetera.

So the size of the opportunity, their excellent form of correlation, but not necessarily.

And then a final question for Harold, at the TomTom tech event you guys have been very open about the competitive plan that you have relative to a year. Alain was saying that you’ve tried a couple of terms and you have it right now, you have a competitive lead if you will for around three years.

Recently there have been a number of announcement here with partners like Mobileye. I know that these are just announcements of partnerships, but do you feel that your competitive advantage has slipped or do you feel as confident as in November?

Yes I do. No I don’t think that our competitors advantage is slipping at all.

I’m confident that we have that lead and we continue to build on that. And I know the thing - those announcements that you talk about make any different to that competitive position.

So we feel good, and I think we feel good not because we want to feel good, but that’s also what our customers are telling. So our customers are giving us strong indications that we have good grip on HD maps or on real time map making, traffic information, all the things that matter, we do have that edge.

I think we will continue to accelerate that rather than slow down because now we have that platform in 2017, we can start building on top of that and that will lead to a higher degree of automation, reduced cost, reduced cycle times, that real time map is becoming a reality.

Firstly on the product pipeline for automotive, you’ve said in the past that 2016 was a bit more quiet year versus 2015, are you still signing up a similar amount of orders? What is your feel for this year, are there a lot contract awards in the market this year?

That’s what we said, 2016 was a small year in terms of available order size. 2017 will be bigger.

So the RFQs are available to 2017, in aggregate are significantly higher than what was available in 2016. Doesn’t mean we’ve won it, but the opportunity is bigger.

The second one is actually a follow-up on those partnerships. Like you said, doesn’t really impact the competitive advantage at the moment.

But is this kind of partnership, is that something you’re thinking about yourself as well or do you think you are at an advantage if you stay relatively standalone in developing this.

No we have no desire to be standalone and we’re not standalone. We are part of that eco system, we have partnerships with a number of companies in that space.

We are expanding those partnerships. It fits in our vision of more open industry that is driven by standards and I think we are fully embracing that.

So I don’t see any strategic shift or any issues.

Okay, and my final question is on more your view on cost in the medium term. You had a step-up of cost in 2016, now in 2017 the benefit of consumer costs are coming down, but the rest of the year it was still up.

I think that sometimes there’s a fear in the market that you will continue to have invested quite heavily for all these functions in automotive. Do you have a bit of a feel where you think if there’s a continuous high cost growth environment or that it is more modest in the medium term?

So if you see the order intake in automotive, I think that that speaks for itself. You see new partnerships including the one with Microsoft which is important.

We’ve indicated that we will grow 15% per annum, those business-to-business activities for the next four years. So that means that for 2016 that revenue was about €425 million combined.

That will grow by 2020 to about €750 that will give you that 15% CAGR. And that is a very high margin revenue, with an average gross margin of 85%-90%.

So we see very significant growth there. We will increase over the year some of our OpEx and some of our CapEx but nowhere near of what we’re seeing in topline growth in the next four years.

First question, could you give us, maybe underlying EPS for 2016 if you would not have deferred revenue or IFRS, could you give us an indication of the underlying profitability please.

Can you give also the second question then?

I’ve got a multiple, maybe a second one then. If you look through our OpEx and cost of sales there seems to be a step up in your amortization in there of technology.

Could you provide us what the impact was in Q4, but also how you looked to 2017? There will be a step-up again I presume in the amortization.

Can you give us the split how that phases in to both cost of sales or in the OpEx, and maybe comment also then if you strip it out and just look at OpEx excluding these kinds of non-cash items, what then the direction is of your OpEx? Because I still hear a lot of questions about operational averaging or OpEx growth through your topline.

But if I am not mistaken you have to either strip that out. The OpEx growth is actually quite [modest] and maybe also in relation to your EPS guidance how much was the impact of this amortization on that front.

I know you’ve just (inaudible) but it always has some impact. That’s my second question which is quite complex.

So we’ve broken out the amortization in our press release, obviously you’ve seen that. The total amortization in ’16 was 132 million.

If you only look at the OpEx part that was 123 million and that represents a 21% growth. There’s nothing in there what we would identify as an extraordinary item, and that makes us feel that we need to highlight it more than we’re already doing.

No, but there seems to be an acceleration towards the end of the year. Is that correct?

Yeah, in this case, that is the case indeed, but it is not structural apart from that the underlying amortization will continue to go up also next year. And the guidance for next year is that we will see another 10 million to 15 million increase of our G&A line our combined G&A line for 2017.

So I don’t want to go earmarking all kinds of incidentals in every quarter. This is more of a bigger trend that’s happening in our G&A line and that is a continued growth and that is just following the growth that we’ve seen in the CapEx line over the last year.

And the 10 million to 15 million is all in G&A, nothing is in cost of sales?

It’s all in G&A but it’s not all in OpEx. So the cost of sales part is 10 million to 15 million max.

The first question, could you perhaps answer that one first on the EPS adjusted for ’16, do you have that number?

Yeah, I think €0.04 negative impact for the full year.

Okay, so we have to add €0.04 that’s what you’re saying to adjust for the deferred?

We are adding 80 million to the balance, right. And the 80 million that we’re adding to the balance, that’s a higher margin business and that you need to be able to divide it by the outstanding shares.

So that’s roughly 240 million shares that represents €0.04.

Then a question on the revenue guidance, because there’s an abysmal mismatch now between your P&L numbers and your cash flows because of all this deferred revenue. Can you give us any indication what will be, you’ve already given some guidance on deferred revenues for automotive in 2017.

Four years [ago] what was their number, can you give us an indication of the impact you would have on your cash flows next year from capitalizing or releasing it?

So if you look at it line-by-line I think telematics is probably more or less worse or maybe an increase in the (inaudible) that will be single millions. Consumer will start to release on the deferred revenue line, but for automotive we expect a large increase and that increase will be - we expect that it will be more than the increase that we saw in 2016.

And licensing?

Licensing is more triggered by seasonal patterns and customer payments. There is no underlying trend there.

It is similar to telematics.

So if you add it all up, it comes down to the automotive part which we should add to your cash flows?

Yeah, a ballpark numbers lets’ say releasing consumer of 15 million and an increase of automotive of 50 million makes an increase in deferred revenue line of 35.

That’s clear. On the gross margin, what are your expectations there going forward because that makes it improve.

Exactly, the three-year trend where consumers used to be 48% of our group mix in 2015, I think that will decline to one-third of the group mix, so that will have an impact on our gross margin together with the continued increase of especially automotive. So we work over them so that we can pass the 60% for a full year basis in 2017.

The year beyond that I don’t want to give too much complete guidance, but the trends are obviously towards a further strengthening of the gross margin.

Yeah, but would you say for 2017 because you maybe already 4% or 5% increase or is that bit too wild given that you’ve got part of (inaudible).

From what I’ve said, we reported gross margin of 57%, and we are comfortable enough to say that the gross margin for 2017 we’ll start with [6].

And then I’ve one more here, the cash out requisition is expected in the first quarter, what should we take in to account if the payment is still due?

It’s something like 25 million.

And then the last one, coming back to the - I hear (inaudible) is teaming up also with NVIDIA and I think also there was some questions on the capital market there in November where people asked for the exclusivity of the contract and it wasn’t at that stage and that was the answer. But it also seemed a bit like it was rather exclusive or not going to be as competitive.

But then we see the news over here actually two months later than they’re also teaming up. How do you see that that also here it’s in there with NVIDIA, how do you live to those kind of news items and how does it impact you?

As I said it’s a big industry and little players. NVIDIA wants to play an important role as a computing platform in the car of tomorrow.

And I think what is very interesting for us is that the relationship is very good. We have defined joint research environment programs, the derived PX2 platform will come standard sample maps, high-definition maps of (inaudible) included.

So software developers can start playing with that and see how it works in practice. Corporation is developing nicely and I’m very happy with the partnership and we will continue to nurture it.

I have a couple on autos and one on consumer, if I may. Looking at the profile of the orders you’ve been announcing over the last few years in autos and the target you’ve given there for 200 million of revenue.

I’d like to understand could you reach that 200 million effectively without signing any additional orders from today. So what scope is there for growth beyond that figure I guess is how I’d phrase it.

Secondly on the auto business, I’m conscious when you announced booked orders. There are a lot of assumptions on pricing tax rate and the like that go in to those order book numbers.

Any addition that you could give us around that would be great. And my third question on the consumer business is, really it looks to me from the guidance you’ve given as though that’s where the bulk of the downside is there.

There’s clearly also a material decline in the automotive hardware business that goes into the consumer segment factored in there. So my question on that is to what extent are we getting in to the territory of the lower or small numbers with that automotive hardware business and how much conservatism is baked in to your assumptions about that PND which is obviously still somewhat more material there?

So the first question is, can we reach €200 million revenue without signing up any orders? The answer is yes, we can.

Then automotive hardware and consumer, that’s a bit of an old one. We did a deal, I think it was back in 2009 if I’m correct where we started to sell hardware in to one of our customers.

We have long since decided to stop doing hardware, whereas this is the tail end of the contract and it will run down. They have actually a much longer shelf life than everybody had expected, but it is running down and I think that will come down completely in 2019 at this recurrent planning.

So from 2018 even I think it will come down completely to zero. But that is automotive hardware as reported in consumer site and it carries [middle] or high margin there, which was one of the reasons to stop us in the first place.

When we communicated the order book and the order intake, we based ourselves on the numbers that are provided by us in RFQs from the car markers. The car markers obviously give us the numbers both based on their own planning.

Traditionally, those things are reasonably accurate, and often somewhat on the conservative side. They are not a 100% accurate, but for planning purposes they are good enough in our experience.

And then the last question --?

About the prospect of any material difference in the PND business from what you’re currently assuming.

Yes that we don’t know. So the decline was faster in 2016 than we had anticipated and what we could anticipate based on historical numbers.

So the decline in 2015 was very benign, it was bit more aggressive and especially in the second half of 2016, and we continue to plan based on that more aggressive scenario for 2017 and beyond. Yeah, and then we’ve (inaudible) from growth areas as well, so we do most type of product for a programmable terminal four business applications those are - in that mix are growing quite nicely.

But they don’t represent a very large number, but they are growing. And we can play in that space because most of the technology we have to develop anyway.

We are developing for automotive customers, reporting them on the PND, package them if you like, our PND for those types of applications and markets.

Can I just follow-up on consumer. Given this obviously and PNDs in particularly, given its obviously a much less good business than the rest of the group and as facing structural headwinds.

I don’t think it generates much cash. It’s been responsible for two revenue down grade in the last six months which has seen your stock price fall like today 8% to 10%.

I now would argue it’s the reason your company is well fully undervalued a year versus some of the past evaluations from the loads of ABN and ING at 14 to 15. Is it not obviously that a very strategically positive thing to do for shareholders and the stakeholders is either dispose off that business or make a more aggressive attempt to shut it down and divert capital and resources for the software and services part please?

I hear you concerns, I don’t think it is as dramatic as you just pictured that business. It’s not that destructing for management.

But it certainly is for investors, and they are right to being distracted by it, because many investors say that they are not investing in TomTom because what they consider bad hardware business, and I actually on two occasions in the last six months they were right not to have invested on that basis despite the amazing stuff going on in the software and services part of the business which is huge credit to you guys because of the kind of successional revenue downgrade. So in the year 2017 and we’re still having a kind of revenue downgrade and disappointment thanks largely on consumer.

And I just feel a more aggressive approach is needed from you guys at this juncture, because it’s very obviously that PNDs in structural decline. I’m not sure how much cash do you realistically think you’re going to get out of the business and I’m just wondering why the steps and the motion isn’t in place to get ahead of the obvious decline before it turns in to a structural loss making business to try and salvage it now.

I don’t want to comment on that right now. We’ll take in to account.

Thank you.

And I’ve got one more question just on Hero, given the structure of whereby its entered, its’ had stakeholders put its stake in the map, sorry the company itself. Is there not an industrial logic for that and what I’m wondering is, is the industrial logic not based around maybe getting guaranteed access to data.

If they are doing it why is it not logical for you to do? What’s their industrial logic that is not what you’re sharing?

You referred to the Hero situation?

Yeah, the Hero structure, they are selling stakes in their map left, right and center. And there must be an industrial logic to that besides just reclaiming some cash because they’re own way to think there’s also companies in the world.

So is there an industrial logic there thinking which is, hey we get guaranteed access to the data for the rest of our lives which is maybe a risk point that maybe you should address as well.

Yeah, I think the industrial logic for the [404]. The (inaudible) buying here is not strong, and I think there’s a little of negatives as well.

But you’re right, the access to probably a sensitive data is going to be important and we’re fully aware of that, and our customers with whom we are working on HD maps and those location technologies also understand that the data is important for us. So I think what we have pulled off in traffic where we get proper data from all of our customers is a good model for us to continue.

I don’t think you need a -those car makers need to participate in a capital. I think that country is more concerned and more down-sight than just being a neutral player who is making a mark based on technology and to forward looking technology.

So I don’t see there’s industrial logic at the moment. Yes proper data is important and yes we are working on that.

One last probably following one, as the hardware division (inaudible) how much cash can be released from inventory or just lower inventory level going forward please.

As will further the question to the CFO.

Thank you Harold. 10s of millions.

And there are no further questions. 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 all very much.

Operator you can close the call.