“Overall, we reported a solid set of results in the second quarter. Our gross margin continued to strengthen, as we are reducing our dependency on hardware products by growing recurring content and services business.
Our Automotive order intake is on track, and we are especially pleased that Volvo Cars selected us as global provider of maps, navigation and traffic.
In this quarter, Telematics added a record number of 27,000 vehicles to its installed base and signed an important agreement with PSA Group to offer value-added fleet management services.”
We are reiterating our guidance for the year. We expect to grow our revenue to around €1,050 million and adjusted EPS1 to around €0.23.
We expect the level of investment (both CAPEX and OPEX) in our core technologies to be higher than in 20152. In particular, we are investing in advanced content and software for the automotive industry and in our new map-making platform.
Financial and business review
We generated revenue of €265 million in the second quarter, flat compared with the same quarter last year (Q2 '15: €265 million). The decline in Consumer and Licensing revenue (Licensing included a one-off catch-up of €5 million in Q2 '15) was offset by growth in Automotive and Telematics.
We reported a strong gross margin of 55% in the second quarter (Q2 '15: 51%) mainly driven by a higher share of content and services revenue.
The net result for the quarter was a gain of €12 million (Q2 '15: €2.5 million), which translates to an adjusted earnings per share of €0.10 (Q2 '15: €0.05).
|(€ in millions, unless stated otherwise)||Q2 '16||Q2 '15||
|H1 '16||H1 '15||
|Total Consumer revenue||157.2||164.9||-5%||273.9||286.6||-4%|
|Key PND market data|
|Market size (# units sold in millions)||1.3||1.6||-18%||2.4||2.9||-16%|
|TomTom market share||54%||52%||53%||52%|
|Market size (# units sold in millions)||0.6||0.8||-22%||1.1||1.5||-22%|
|TomTom market share||21%||18%||19%||17%|
Change percentages and totals calculated before rounding