(Reuters) - Dutch navigation and digital mapping company TomTom (AS:TOM2) said on Wednesday it expected a negative free cash flow this year and lower revenues from its automotive and consumer businesses because of the coronavirus pandemic.
The Amsterdam-based company, which withdrew its original outlook in late March, had initially said it expected its 2020 free cash flow to be a mid to high single digit percentage of the group's revenue. The group said the outbreak made it impossible to provide specific forecasts for the year.
Its first-quarter revenue from its core location technology business fell 11%, due to a downturn in its automotive segment, but was partly offset by an uptake in its enterprise business, which supplies government bodies, traffic management and tech companies.
"Our Automotive revenue arises principally from customer vehicle sales, which are sharply impacted by factory closures," said the company's chief executive officer, Harold Goddijn.
He added that consumer revenue, which slumped 40% in the first quarter, would be hit by a steep decline in demand arising from retail store closures, retailers reducing inventories, and people not driving, but said strong debt-free balance sheet made the group resilient.
TomTom reported a first-quarter group revenue down 23% at 131 million euros ($143.7 million).
The company had said in its initial outlook it expected its full-year revenue to decline around 5% year-on year, coming in at between 650 and 675 million euros.
TomTom, which is moving away from selling devices to offering software services, also announced it would expand its current agreement with Verizon (N:VZ), which would now begin to integrate TomTom’s Maps APIs and software development kits in its location services products.
($1 = 0.9119 euros)