TomTom 2011 Annual Report Download - page 5

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3
Restructuring programme
—
The macroeconomic downturn impacted our channel partners,
who reduced their own inventory levels. As a result of this
destocking our sales volumes were less than customers purchased.
The lower PND volumes affected our profi tability. To counter this,
we initiated a restructuring programme in order to reduce our cost
base. As part of the programme, we reduced the total number
of jobs within TomTom by approximately 450. As far as possible
our aim was to realise this by attrition. To my regret, however,
a signifi cant proportion of the reduction in the size of our staff
had to be achieved through forced lay-offs.
Milestones
—
Clearly, 2011 was a diffi cult year. Nevertheless, we also reached
a number of important milestones during the period. We are
pleased that car manufacturers Opel and Ford have adopted our
navigation solutions. During the year we also launched our fi rst
GPS sports watch, saw increased take-up of our LIVE Services, and
added our 180,000th WEBFLEET subscriber. We are particularly
proud to say that we sold our 60 millionth navigation solution
this year.
Product development and return on investment
—
TomTom’s R&D is spread across a wide range of technologies
that enable a wide portfolio of products. The majority of these
technologies and products are interdependent, which gives us
a competitive advantage. The technologies involved include
software systems for map-making, as well as navigation software
for data services and for PNDs, in-dash units, smartphones and
tablets and real-time traffi c and fl eet management systems.
As part of the restructuring programme, we have reorganised
our product development activities around eleven product units.
Each unit has a well-defi ned product and technology scope and is
accountable for investing its allocated budget to increase the rate
of new product introductions, as well as for achieving the highest
possible returns.
CEO Letter
In 2011 we saw the PND markets in Europe and North America reduce in size. As a result,
group revenue declined despite the strong performance of our Automotive, Licensing
and Business Solutions business units.