(Reuters) - Dutch navigation and digital maps firm TomTom on Wednesday reported a forecast-beating 14 percent rise in first-quarter revenue and said it had won two contracts to supply high-definition maps to carmakers.
“We had a good start of the year, winning the first two available HD map deals, which gives us an early position in this growth market,” said CEO Harold Goddijn in a statement.
TomTom in January agreed to sell its fleet management business to Japan’s Bridgestone for 910 million euros, in order to concentrate on its digital map-linked businesses, which it has said it expects to grow by around 15 percent to 430 million euros in 2019.
TomTom’s prospects took a huge knock last year with the entry of Google’s far-reaching supply deal with a group of carmakers including Renault, Nissan and Mitsubishi .
The Amsterdam-based company also faces a long-term decline in the sales of dashboard-mounted satnav devices.
TomTom said the HD contracts were with two of the world’s largest car companies but gave no further detail.
“The key attraction of these wins is strategic,” said ING analyst Marc Hesselink, who rates the stock a “buy”. “By adding clients to the HD platform, TomTom gets more data to improve and update” it.
Shares were up 3.8 percent to 8.47 euros by 1045 GMT, and are up around 7 percent year to date.
First-quarter revenue reached 169.5 million euros ($192 million), above an average forecast of 157 million from analysts polled by the company.
Earnings before interest, tax, depreciation and amortization (EBITDA) of 18.8 million euros also beat an average forecast of 12 million.
TomTom stuck to its full-year outlook for revenue of 675 million euros, including 430 million from its location technology, and free cash flow of around 10 percent of revenue.
TomTom also sells mapping services to software makers. Notably, it is the largest provider of digital maps to Apple , though Apple intends to roll out a maps service in the United States this year using an in-house system.
Reporting by Silvia Recchimuzzi in Gdynia, editing by David Holmes and Louise Heavens