# TomTom shares fall as 2023 uncertainties outweigh Q3 beat
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-14
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: TomTom cuts 2023 cash flow target amid economic uncertainty
Meta Description: Dutch navigation company TomTom cuts cash flow target for 2023, citing inflation and uncertainty. Despite strong Q3 performance, shares drop 12%.
URL: https://financedigest.com/tomtom-shares-fall-as-2023-uncertainties-outweigh-q3-beathtml

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By Federica Mileo and Augustin Turpin

(Reuters) – Dutch navigation and digital mapping company TomTom on Friday cut its cash flow target for 2023, citing inflationary pressures and economic uncertainty, sending its shares tumbling 12% despite better than expected third-quarter performance.

The Amsterdam-based group, whose customers range from major car companies to global tech firms, forecast free cash flow at break-even for next year, compared with a previous outlook for an inflow of at least 5% of revenues.

High energy prices, high interest [rates and inflation](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister") pressure give us quite a bit of uncertainty if we look at the mid term,” Chief Executive Officer Harold Goddijn told Reuters.

TomTom, which counts Volkswagen, Renault and Microsoft among its clients, has also been hit by the [global chip shortage that has disrupted the automotive and electronics industries](https://www.financedigest.com/german-industry-calls-for-delay-to-global-minimum-tax-bdi.html "German industry calls for delay to global minimum tax – BDI").

The group said the [supply chain strains were easing](https://www.financedigest.com/uks-j-d-wetherspoon-returns-to-profit-as-supply-issues-ease.html "UK’s J D Wetherspoon returns to profit as supply issues ease") but would continue to restrict production in the fourth quarter.

The increased car production and [strong location technology sales](https://www.financedigest.com/indias-tata-motors-jumps-to-a-7-month-high-on-strong-q4-jlr-sales.html "India’s Tata Motors jumps to a 7-month high on strong Q4 JLR sales") drove the third-quarter revenue to 136.3 million euros ($132.6 million), above analysts’ 126-million-euro estimate and up 7% on the year.

We don’t see [disruption of the supply chain](https://www.financedigest.com/ikea-warns-supply-chain-disruptions-likely-to-last-into-2022.html "IKEA warns supply chain disruptions likely to last into 2022") so much,” Goddijn said, pointing to “slightly higher” production numbers in the quarter.

“So I think the direct impact of the war (in Ukraine) is limited,” he said.

The company [raised 2022 revenue outlook to 505-520 million](https://www.financedigest.com/ride-hailing-app-cabify-raises-110-million-for-expansion-in-latam-spain.html "Ride-hailing app Cabify raises 0 million for expansion in LatAm, Spain") euros, including 410-425 million from its core location technology business, against its previous guidance of 470-510 million in total revenue.

It expects free [cash outflow of around 2% of the revenue](https://www.financedigest.com/orpea-shares-jump-on-q4-revenue-and-cash-boost.html "Orpea shares jump on Q4 revenue and cash boost") this year, excluding the restructuring of its Maps unit.

The [beat is driven by automotive](https://www.financedigest.com/tomtom-raises-2023-revenue-outlook-as-automotive-drives-q4-beat.html "TomTom raises 2023 revenue outlook as automotive drives Q4 beat") clients ramping up production volumes now that supply-chain issues ease. At the same time the [company became more cautious on 2023,” ING analyst Marc Hesselink says](https://www.financedigest.com/french-unions-unanimously-sign-wage-agreement-with-edf-company-says.html "French unions unanimously sign wage agreement with EDF, company says").

($1 = 1.0281 euros)

(Reporting by Federica Mileo and Augustin Turpin in Gdansk; editing by Milla Nissi and Tomasz Janowski)


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