TomTom N.V.

Bruno Priuli - IR Harold Goddijn - CEO Taco Titulaer - CFO

Francois Bouvignies - UBS Marc Hesselink - ABN AMRO Martijn den Drijver - NIBC Markets Marc Zwartsenburg - ING

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 of 2017.

With me today are Harold Goddijn, our CEO; and Taco Titulaer, TomTom's CFO. You can also 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. We will start today's call with Harold, who will discuss the key operational developments, followed by a more detailed look at the financial results from Taco.

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

Thank you very much Bruno, and welcome ladies and gentlemen, thank you for joining us today. We delivered on our updated 2017 guidance with total revenue of €903 million and adjusted earnings per share of €0.26.

Combined revenue from automotive, licensing and telematics grew by 16% year-on-year. Our business is clearly shifting to high gross margin business with long term contracts, better predictability and more upwards cash flow.

Over 60% of our revenue mix is now derived from data, software and services, which is now contributing 83% of our total gross profit. Taco will provide further information in the financial highlights and the financial outlook for 2018 later during his presentation.

Our Connected Car products continued to do well and the order intake for 2017 exceeded €400 million and this is a new record for our automotive business. We significantly improved our position in the North American markets with important contract wins.

We also announced a number of new product introductions during 2017 with PSA latest car lines, maps for Daimler in North America, and a full navigation set for Alfa Romeo’s new SUV, the STELVIO. Also during 2017, we acquired Autonomos, a Berlin startup that brought us critical expertise in automated driving systems and smart camera technology that will form the basis for high volume, low cost data acquisition to build and maintain HD maps.

At CES 2018, we launched AutoStream, a new real time map delivery system that enables vehicles to build virtual horizon for the road ahead by assuming map content that can be created only seconds ago. We announced a partnership with Baidu, who will use TomTom’s map making platform and AutoStream to produce and distributed HD maps for automated driving applications in China.

AutoStream will be accessible for developers as part of Baidu’s Apollo open source project for self-driving cars in and outside of China. Moving to enterprise, at the end of 2017, we announced that our online APIs are now integrated in the newly launched Microsoft Azure Cloud platform.

By offering our location technology on Azure, we have access to a broad range of enterprise and developers who can use our APIs to power a variety of applications including IOT and smart city applications. We’ve also repositioned our own development portal for online APIs during the quarter.

The portal offerings and pricing and are now geared towards developers small and medium sized businesses. We also announced new collaborations and contracts with Sony, TripAdvisor, Michelin and Mappy during this year.

Our telematics business surpassed 809,000 subscribers by the end of the year, and this represents a 16% increase year-over-year. During 2017, Telematics was recognized as Europe’s largest provider for maximum solutions and a mark of research insight.

This is the third year we’ve been running as we have lasted the European market. In the Connected Car service segment, we announced a contract with LeasePlan.

This is an important partnership we are bringing Connected Car services in to the main stream and are using Connected Car technology to serve the broad range of stakeholders including drivers, insurance providers, car maintenance companies and more. Moving to the next slide, I give you a short update on the strategic priorities.

We will continue to target growth opportunities with Connected Cars, fleet management and online APIs. In Connected Cars, we aim to grow through technology leadership in real time map making, traffic services, application software and a wide range of location technologies.

We will continue to grow our fleet m management business and target new customer sentiments such as leasing. We will continue to nurture and grow our partner ecosystem of software developers who help us turn to new markets and are adding depth and breadth to our service offerings.

We’ll capitalize on our scale by investing in our Connected Car platform and to provide new APIs at well formative basis for accelerating product innovation. In line with the previously announced strategic review, we have reduced the size of this fourth business to align at cost base with the market developments.

We will continue to develop PNDs as the Drive business will continue to provide a valuable platform for consumer insights and for collecting location data. To summarize, TomTom is well positioned to capture growth opportunities across our automotive enterprise telematics businesses.

Many of our growth opportunities are driven by big industry trends including connected car, autonomos driving and smart city. This concludes my part of the presentation.

I’m now handing over to Taco.

Thank you Harold. Let me make a couple of comments on the financials.

In 2017, we reported revenue of €903 million, which is 9% lower compared with last year. Automotive, Enterprise, Telematics delivered a combined year-on-year revenue growth of 16%.

Automotive revenue was up with 44% to €191 million. The increase was driven by a combination of higher take rates and more customers purchase the previous year.

The deferred revenue position of automotive increased to €113 million at the end of 2017. This is almost doubling year-over-year.

This contributed to our strong cash generation during the year. Enterprise revenue was flat year-over-year at €138 million, as a large proportion of our revenue is dollar denominated we showed the effects of the weakening dollar in the year.

Telematics was up with 4% year-on-year to €162 million. The recurring subscription revenue in the full year increased at 7%.

Consumer revenue decreased with 27% year-on-year to €413 million. Close to 80% of our revenue is PND related.

The remaining revenue is equally split over sport and automotive hardware. The gross margin in 2017 was strong at 62% and that’s an increase of 5 percentage points year-over-year.

Our EBITDA was flat year-over-year. Our adjusted net results was 61 million, which translates in an adjusted earnings per share of €0.26.

This compares to €54 million and an adjusted earnings per share of €0.23 in 2016. At the end of 2017, we reported a net cash position of €121 million.

Our cash flow before financing for the year was 28 million, 12% higher than last year. And we would correct for the acquisition of Autonomos in early 2017, our cash flow before financing doubled year-over-year.

Let me now turn to slide 5, the automotive order intake. The graph on slide 5 shows automotive order intake versus automotive recognized revenue and net deferred revenue on an annual basis.

What we want to highlight here is the development of the order intake and translation thereof in to recognized automotive IFRS revenue and net deferred revenue on the balance sheet. Operational revenue is the reported revenue plus the net change in the deferred revenue position.

As we sell throughout that include multi-year updates and subscriptions, some of that revenue is deferred. Automotive operational revenue in the year amounted €245 million.

This is an increase of 45% compared to last year. This €245 million is already above the order intake that we saw in 2014 of €220 million, and has gradually grown towards order intake amount we announced in 2015.

Order intakes from the past years will continue to contribute to a strong growth of our automotive business in the coming years. It will deliver growth through our recognized IFRS revenue, but it will also continue to increase the automotive deferred revenue balance.

Then on slide 6, I want to make a short comment on the operating cash flow. On this slide we report the growth we are experiencing of our operating cash flows.

Cash flows from operating activities grew strongly with 20% in 2017 to €173 million, as you can see in the graph. And this trend is expected to continue in 2018.

Then the new accounting standards, on slide 7, we discussed the P&L impact of IFRS ’15 and IFRS ’16. As of the 1 January, 2018 TomTom adopted IFRS ’15 revenue from contract with customers.

And the IFRS ’16 leases accounting standards. The IFRS ’16 standard is early adopted in order to have only one transition year.

This transition involves making adjustments to the opening balance and providing appropriate forward-looking comments reflecting the new accounting methodology. We have provided in the press release and also at the end of this presentation in the appendix a full disclosure of the restated 2017 P&L and balance sheet.

On slide 7 and slide 8, I will discuss the most important changes. Again for a more detailed overview, I would like to point you at the appendix slide in the deck.

Let’s start with P&L, revenue; on group level total revenue is more or less flat. However automotive showed an increase of €5 million compared to our 2017 reported numbers.

While consumer revenue is under the new standard, 6 million lower. The increase in automotive is mainly driven by changes in our net revenue recognition and the lower consumer revenue is due to the reclassification of so called co-op advertising costs from OPEX to revenue.

In cost of sales, the impact of the treatment of NRE, non-recurring engineering work is visible. The new standard requires that customization work which is delivered to an OEM at the start of the production should be amortized at once.

The related revenue must be recognized upfront as well if these are considered highly certain. Under the old standard, we amortized NRE engineering expenses on a per unit basis.

As a result, our 2017 restated cost of sales is 6 million lower compared with our reported numbers. Then OPEX, the restated OPEX is impacted by both IFRS ’15 and IFRS ’16.

The IFRS ’15 element is related to consumer marketing already explained before. The IFRS ’16 impact is €2.6 million lower OPEX is related to the treatment of our office leases which is partly offset due to an increase in our interest expenses.

Then let me briefly touch on the impact of our balance sheet as well on slide 8. The impact on IFRS ’15 is mainly visible in our other intangible assets and deferred revenue.

The decrease in other intangible assets relates to the before mentioned NRE treatment. Deferred will show an increase of 18 million.

An increase in telematics is partly offset by decrease in automotive. For IFRS ’16, our office lease commitments are now visible on the balance sheet under other non-current assets and non-current borrowings.

To summarize 2017, restated group is unchanged at 903 million, restated gross margin is 1 percentage points higher at 63% and restated net results is 10 million higher. Let me now explain the changes in the adjusted earnings per share definition on the next slide i.e.

slide 9. Totaling the implementation of IFRS ‘15 and ’16, combined with the ongoing transition to become a software company, we changed the definition of adjusted earnings per share to better reflect our operational revenue and related cash generation.

As you want to contain the number of adjustment, we decided to no longer correct for acquisitions also as a majority of the 60.9 as shown in the first column on this slide or well over 70% is related to the Tele Atlas acquisition of 2008. The new adjusted earnings per share is closer to free cash flow generation in absolute, but specifically the trends highly correlates with the progress that we are making.

We expect a 24.1 million as shown in the second column in the slide to more than double in 2018. This is leading to our forecast of an adjusted unit per share of €0.25.

That leads me to the last slide of my prepared remarks, slide 10. We expect revenue of around €800 million, reflecting the continuous decline in consumer business, but also the growth that we’re experiencing in automotive.

And as we transition in to a more super technology company, we will continue to increase revenues related to data, software and services. Thus we expect gross margin to approach 70% in 2018.

As already mentioned, the adjusted earnings per share is expected to be around €0.25. This reflects a 40% increase from a like-for-like basis.

We expect the levels of investments, CapEx and OPEX combined to show a modest decrease compared to 2017, this is excluding potential acquisitions. Operator, we would now like to start with the Q&A session.

The first one and I have a couple. The first one I had is on your order bookings of about 400 million.

Can you tell us a bit what are the moving parts inside this order bookings. Do you feel that you won the market share, how is the ASP trending and the penetration of (inaudible) would be very helpful?

On the automotive bookings as well, and you mentioned the US customer win this year. Can you clarify this for the maps, and should we expect these trends to continue this year, meaning wining shares over the US OEMs over orders, but just maybe this one first.

So we won as I think the order book 400 million plus was satisfying and we were happy with that, and we were also happy that we didn’t lose any customers and we added new customers to the order book that we didn’t serve before. So I think that was a satisfying year.

We significantly strengthened our position in North America as we said also in the press release and we won a significant contract with a large North American OE for full connective cars stack. So not only software, maps, but also maintenance of the system map updates services et cetera.

Last question are we thinking that that can continue in 2018? I can’t make any comments on that.

I think the momentum we had in 2017 was good and convincing, but at 1 January, we start from here and again we will see what the year will bring. It’s not just North America that we’re focusing on, there’s important business to be done this year also in Europe and in Asia.

And in terms of deals available in the market, how do you see ’18 as a global market, like the (inaudible) available versus ’17 or ’16?

I think the total market available better what we know today will more resemble 2016 and 2017.

So it will be more like ’16 that ’17? So is it so, I didn’t get you.

Yeah, that’s turbo market, that doesn’t say much about what we think we can win. But we think the total market opportunity will be more of the size of 2016 than it was in 2017.

A couple of follow-ups on HD maps, can you update like how is it going, you conversation with your customers. Should we expect some contract this year and the business model for this HD maps?

It was not a year of good progress on technology, on proving the technology proof of concept with a number of lease proof of concept with a number of (inaudible) makers, who want to work with us to assemble information, manage information and distribute information. So I think we made good progress on the technical side and product side, also commercially I think we are on the right track and hopefully in 2018 we’ll get some significant, real opportunities to conclude some of those contracts.

What we see for self-driving is that the requirements, the demand from car makers are for yearly maintenance fee and that’s what we’re doing. So in standard navigation and standard products it’s mostly one-off payment.

When the vehicle is shipped, we see a trend in autonomous driving that car makers want to pay an annual fee per car to keep the maps and technology up to date.

The other question I had is, I’m surely its important about Bosch and Continental or what’s going on with your main competitors here in sales as well. I guess it’s something you’re looking at.

And the question I had is, how do you respond to that, as you competitor is gaining stronger and getting more partners. Bosch is historically a strong partner of yours, Volkswagen as well.

So how do you respond to these trends of your competitor getting more and more traction?

Well you need to be careful here and you can’t read too much in it. I think it’s important to realize that both Conti and Bosch both share strong owners.

So there’s no new money invested in to here. There was a transfer of certain shares.

And I think the relationships that we have with both Continental and Bosch continue to be very strong and very deep. I think there’s a bit of politics there going in, does go on as well.

We are not too worried about it, and we are [careless]. We are satisfied with the progress we are making and we hear this from our customers as well in to those technology and what we have to offer.

So you don’t think you need as well to strengthen or may need some help from others like the way they do for the industry to be more collaborative?

We do a lot of work on collaboration and so there is no question that self-driving technology is complex. There’s a little place in the (inaudible) chamber and we recognize that and you see that also in our announcements.

We are working with Baidu, we are work with Zenuity, we are working with Bosch, a number of others where we are working with that we have not disclosed. And I don’t think it’s necessary to have for shareholdings to make those partnerships flourish.

I think we are – you can see also in the market place that we are considered to be a good partner to work with. You can see there’s also in the progress we are making in the various territories.

And I don’t think that is actually a position where we can be flexible at job, respond to customer requirements quickly. I think that’s what our customers really like.

And maybe two quick ones, one is your 2017 automotive revenue that you recognize on the P&L. Did you recognize already 2015 booking or its 2014, where is the backlog in ’17 and starting in ’18.

That’s my question. And the other one, given your net cash is 120 million, what are you going to do with that.

I’m sure you have a lot of investments to make, so should we think about M&A, telematics, automotive? What’s the pipeline?

So for automotive the revenue that you see reported in 2017 is both the order intake ’13-’14 and definitely also ’15. But if it’s in the later years than its more share process related.

So the time to market is then shorter than if its content and software related. So the time to market for purely surface contract can be 12 months or even shorter if you do a full system meaning the content and the software and services there tends to be time lag of at least 24 months.

So you’re saying more and more contract of this kind, no?

Well we have - our offering is more assured in models, so we can offer it in a complete stack, but we can also offer it individually. I think the trends in the market are that the bigger OEMs tend to show multiple models from us in one go.

So, no I would not say that the trend is that we sell it more separately. On our cash position we decided to buy shares in 2017.

It was only done to stop further dilution as a result of our employee share option plan, and that was the only purpose as we now over 5 million treasury shares, we think that we’ll last at least this year. So we don’t foresee to buy back any shares this year.

We will make that assessment again next year. What we’ll do with our current cash position and also the cash renewal at this year is indeed what you aid that we will always assess Bolton acquisitions either in the technology area of HD mapping or what we did with Autonomos can also be telematics.

But that will be the focus of our cash position.

My first question is actually a follow-up of what you just said on the new pricing for Autonomos driving functions. It was an annual fee, what will it do for your – what you’re getting out of that is that a better pricing, is it better because its more definition map, how you’re going to make that transition towards the new business model going from the license upfront towards the annual fee?

Second question is on discussion that you had before with the - your competitors are here with the investments from Bosch and Continental and the other ones. Sometimes you read stuff in the market that rest of it will be some kind of winner takes it all kind of platform, because one platform will get all the data and therefore we’ll become the best platform.

And then the other discussion that whatever happens it will be dual sourcing because the industry wants to have options. What is your feeling that that discussion?

And the final question is on the guidance that you gave on OPEX plus CapEx to be down. Can you give a bit more detail on that one, because if I’m correct your OPEX also includes your D&A.

So what will be the cash impact, what do you think also in the separate efficiency program a lot lower cash hours in the sports and the consumer in general. Do you expect to invest more in automotive and telematics?

I’ll take the first two question and I’ll hand over the third one to Taco. When we talk about standard metrics [de-maps] and the different pricing, I don’t see a big transition taking place.

I think what we see at the moment is this price is for HD mapping on a yearly basis are significantly higher than what we pay or that we can invoice for standard definition maps. However, the volumes are very small certainly at the moment, and also we noticed that car makers are not sure about volumes that we’ll produce of cars where they need HD maps.

So the range in the volumes is much wider than for standard definition maps and that is because of uncertainty of course, the part you have taken in those new technologies. But the prices are going to be significantly higher and that we’ll repeat every year.

So the total amount per car per contract of the life time of the car is a little higher than what we concurrently charge for a standard definition maps and services. The second question, is this a winner take all market?

No its not, that’s not how the world works. And we see for car makers also that they are influencing the sensor makers to make data available also to TomTom that’s coming out of the vehicle to have competing technologies in the market place and that is what we’re seeing.

And as a result that we are intensifying also collaboration with sensor makers across the world who are coming to us to see how they can integrate their data on top of an HD map. So it’s quite an interesting development that we’ve last year.

And that includes – and I don’t think there’s any sensor maker that we’re not talking to in that respect, where we don’t have proof of concept, so where we have exchanges of technical information and product requirements. And then the third I defer that to Taco.

So our OPEX in 2017 was 595, roughly if you include everything that is expected to decline with roughly 50 million more than that amount we will see in consumer and we’ll see an increase over expense in our mapping platform. So we will invest higher through CapEx or OPEX more to further develop our mapping platform.

Then if you have 545 for OPEX, the remainder is CapEx, ending south of 150 do realize that if you want to make a like-for-like that you need to add roughly 20 million in that CapEx number that’s IFRS ’16 related. So if you take that out, you end up with 125 million of CapEx.

And maybe one follow-up just to be sure. You said that the annual charge for the high definition map is higher than the full lifetime license that you’re selling right now, is that correct?

Yeah, that’s correct.

Just going back to the order book, just was wondering if you can provide a little bit more color on, for example, the impacts of having a contract from North America, is that lower ASP, higher ASP corrected for volume, is there any (inaudible) content in there? That would be my first question.

And the second question relates to sports. It’s been properly downsized, but what was the EBIT loss if you will in 2017 that would help a lot in accessing the true performance going from 2017 in to 2018?

That the second question, and I was also wondering, you had somewhat longer term guidance with a CAGR of 15% for enterprise automotive and telematics. Are you still abiding by that guidance or do you think it needs some updating?

If I can take the last two questions; to start with CAGR, so during our and listening to investor meeting at the end of 2016 we said that automotive enterprise and telematics would see a CAGR of 15% from 2016 up to 2020. Due to the change in accounting we need more time to update that number and we want to defer that question to our Q1 results.

The thing with IFRS ’15 is that you need to go through all the automotive contract one by one, and we’ve done that for 2017 now. We’ve done that for 2018, but we still need to do that also for the years to come.

So I would like to defer that answer to April if you’ll allow me. And then the other question was about sport, we have not provided even numbers for that business line specifically.

We know that the EBIT for consumer as a whole was not possible in 2017. It is clear that it’s not acceptable and we estimate and we give a forecast that there is profit for our segment consumer in 2018.

That means that our sports business line will be breakeven at worst starting 1 of January this year. And then for the first question about ASPs in automotive segments.

Harold?

So you referred to Martijn specifically to the North American contract, I can’t say too much about it. But the ASPs are very much in line with what we have seen.

But we need to provide more components for that. So you did the math, we’re doing the map update, we’re doing application (inaudible) and we’re doing services.

So in combination there’s a full package with ASPs that we have seen in the past as well.

So it would be fair to say that you’re not just having to go an extra mile in terms of ASPs to get your foot in the door within the North American market that would be too harsh?

There’s competition, and of course there’s and we’re working hard and you win it always on combination of things at the price of one. But we are happy with what we achieved.

It was a good deal for everyone involved. Good product, we’re happy about the product we delivered.

We can show the world our technology in the mainstream car. For the North American market, I think that will help us to further improve our market position in North America.

So it was high five all around.

And just one question with regards to Q4, is there any specific reason why the gross margin in the fourth quarter was so low – relatively low. It was up year-on-year, but relatively low to some of the upticks we’ve seen in previous quarters.

Despite having strong growth in automotive, reasonable in telematics and a decline in the lower margin consumer, I was just wondering if you have a bit more granularity on that, a bit more color?

The reason for this is consumer support, and so we had a very thorough look together with our accounts through our book and what we’ve provided for and we had to take some additional provisions in Q4 that affected our gross margin. The real focus for gross margin is now in the year that we’re in and that is if we will grow towards 70%.

You don’t want to quantify the additional provisions that impacted your gross margins. I know you’ve given the guidance for 2018, but still just to get a better understanding.

I would like to quantify, I don’t have that at hand. So I will follow-up later.

First of all Taco or Harold, do you have any idea or can you give an indication of what percentage wins of RFQs and where the total market opportunity was in ’17. Just to get a feel for how should we interpret the size of the order intake in ’17 compared to a bit of market share feel.

Sorry Marc, but we don’t have that number. We haven’t worked it out and it is – and I can’t give it to you.

Our impression is that we are on the good side of the market share with customers that are pulled in to our camps, with whom we’ve never had a relationship especially North America, we had a break through. And so our impression is that we are gaining market share.

It’s all the business that’s available is most feasible to us as you can imagine. So it will be difficult to give you an overall market size number and our market share in terms of wins.

And then looking to automotive, can you give us an indication how we should look to 2018 in terms of facing in or form of order intake and how that compares to the period after ’18 because I have an indication from the outlook and the topline that your growth in automotive will be a bit less than what we see in ’17, but is that a phasing effect and can you give us a bit of a feel for how this previous order intake phase in in ’18 and in both ’19 and ’20.

Well you will see automotive coming through 2018, but also let me – putting a bit larger proportion of ranking on the balance sheet is deferred income due to the new rules. It’s difficult if you’re more covert and what we’ve done already, I figured we (inaudible) on the automotive side going, it’s called -- while you can it in the order intake so see it as a trend.

I think that’s what we’re looking at.

But is it fair to say that you will see a mid-double digit growth in automotive previously more than 40 and that perhaps an acceleration after ’18 just due to the phasing of this goal facts that have previously been signed.

I wouldn’t dare saying that. Of course last year we had a full [PSA] for incoming on stream that gave us a big kicker that’s still going to repeat itself in 2018, and it will take no more of 40 - 2017 [CAGR] will that’s got the revenue that we booked in 2017 will materialize before 2019.

And then maybe across at the beginning of January and also bit early, can you give us an indication of the IFRS ‘15 impact or ’18 whether that is also say a small positive or a large positive or maybe a negative, can you give us an indication maybe Taco?

We have provided that information in a call we organized in January and now also the slides that we present today. What we said right, consumer is structurally lower because the co-op marketing activities can no longer be seen as revenue.

Automotive can be higher or lower, it depends. So you can’t’ say it will be structurally higher or lower.

And then there are things happening in the cost of sales line that normally cost would flow out during the lifetime of the contract and you know you need to take them at once. So of all the facts of IFRS ’15 are not necessarily bad, but they are just different that what we’ve seen before.

We can’t yet say for 2018 whether it will be positive or whether it will negative, is that’s too early or is that a good understanding of where we are standing at the moment?

The differences in recognizing revenue in automotive is that you approach the contract on a total value basis instead of the volume approach. And it can be that during executing that contract it can be within the first year or the second year you have a different perspective due to tailwinds or headwinds.

IFRS ’15 will tell you that you need to take that correction at once. So if you’re assessments say well, the total value of that contract with hindsight or during executing that contract is higher or lower, you can see corrections.

So is ’18 higher or lower compared to what. So we have provided the guidance on the basis of IFRS ’15.

And then perhaps a question on the OPEX line, there’s quite a surge in some technology and databases in Q4 and therefore also the cost base with IFRS ’15 and ’16, and everything in there the cost base is higher under the old situation. It should be more mobile going forward the technical amortization at the level we’ve seen in Q4 is that how we should work together.

They already said there were some incidentals, so I think that amortization line in the OPEX but not go up in ’18. So it will drop a 1/10 in 2017 and it will go to 100 or so in ’18.

D&A as a whole that’s a different story, because there we had a restated number, it’s roughly 180 and we think that the decline will be bigger as we’ll go to 155 or so.

So if I then elude to your statement on a 50 million lower OPEX line, how should I read that and will it exclude only one off that we’ve seen in ’17, how would it the develop 2018 through 2017, because you mentioned the 50 million decline, but I’m not sure if that includes a few of these one-offs.

This is what I just gave you is a like-for-like comparison.

So we go to 545 roughly in OPEX and that is excluding any fuzz and funny etcetera?

Yes.

And then perhaps a final one on the deferred revenue in 2018 on cash flow, because you had said a free cash flow in ’17 of around 50. That should go up in ’18, but can you also give a bit of an indication how much and where it should come from?

So it will go up with more than 50%, and where it comes from, yeah what we already alluded to is that it is mainly due to the increase of our automotive business.

So our free cash flow generation, if you correct for the Autonomos acquisition and if you correct for the share buyback was close to 50 million, and we foresee that number to go up with let’s 50% or so this year, and that’s also reflected in the adjusted earnings per share guidance that we’ve given.

But it’s more on the growth in automotive, so is that also released from deferred revenue or am I missing something.

No, the opposite, the deferred revenue will increase.

The releasing deferred revenue will not have an effect from a free cash flow.

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?