By Federica Mileo and Augustin Turpin
(Reuters) -Dutch navigation and digital mapping company TomTom on Wednesday said it expected its location technology revenue to reach 600 million euros ($593 million) in 2025, driven by its new maps platform and a strong order backlog in its automotive business.
"The maps platform will allow TomTom to accelerate growth, both in the Enterprise and Automotive businesses," CEO Harold Goddijn said in a statement ahead of TomTom's Capital Markets Day.
The global chip shortage that has disrupted the automotive and electronics industries has hit TomTom's supply chain, and the company faces the added challenge of soaring inflation.
The group, whose customers range from major car companies to leading global tech firms, said its record year-to-date automotive order backlog of 2.4 billion euros, a 500 million euros increase compared to last year, provides a "strong foundation for revenue growth".
Finance Chief Taco Titulaer pointed to the recovery in global car production as a key driver for acceleration.
"Following some delays, car production is now forecast to gradually to pick up and we expect to beat the 2019 levels in 2025".
On the back of faster growth TomTom expects a free cash flow yield of 10% of group revenue by 2025.
ING says location technology revenue target is ahead of expectations and notes the growth number is supported by "impressive" order intake year-to-date.
The broker adds the new maps platform will help TomTom against its key competitors in automotive (HERE) and Enterprise (Google (NASDAQ:GOOGL)).
TomTom last month cut its 2023 cash flow target on inflationary pressures and economic uncertainty, but maintained its revenue forecast.
($1 = 1.0120 euros)