Dutch navigation and digital mapping company TomTom has slashed its cash flow target for 2023, citing inflationary pressures and economic uncertainty, with the announcement wiping 12% off the company’s share price despite a better than expected third-quarter performance.
The Amsterdam-based firm, which counts Volkswagen, Renault and Microsoft among its clients as well as being a well-known producer of satnav devices for retail markets, forecast free cash flow at break-even for next year, compared to the previous outlook of an inflow of at least 5% of revenues.
“High energy prices, high interest rates and inflation pressure give us quite a bit of uncertainty if we look at the mid term,” TomTom CEO Harold Goddijn said.
TomTom has also been heavily impacted by the global chip shortage that has disrupted the automotive and electronics industries.
The group said the supply chain issues were being resolved but would continue to restrict production in the fourth quarter.