Ituran Location and Control Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the Ituran first quarter 2021 results conference call. All participants are present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Ituran's investor relations team at GK Investor and Public Relations at 1-646-688-3559 or view it in the news section of the company's website www.eturan.com. Now, I would like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin?

Thank you, Operator. Good day to all of you and welcome to Eturan's conference call to discuss the first quarter of 2021 results. I would like to thank you to our management for hosting this conference call. With me today on the call are Mr. Eyal Sharadsky, the Co-CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamar, the CFO. Eyal will begin with a summary of the quarter results, followed by Eli with a summary of the financials. We will then open the call for the questions and answers session. I would like to remind everyone that the safe harbor in the press release also covers the contents of this conference call. Ena, OER, would you like to begin, please? Thank you, Ehud.

I'd like to welcome all of you and thank you for joining us today. We are very pleased with the results of the first quarter, which outperformed our expectations. It demonstrated that Iran is well on the way to full recovery and renewed growth. This is despite ongoing impact from the pandemic, which still affects many of the geographies in South America in which we operate. Not only have we maintained our profitability and strengths, we grew our subscriber base at the highest rate we have seen for many quarters, at 20,000 net ads. While the OEM segment is stabilizing, the strength was driven by the aftermarket segment, which grew at a remarkable 25,000 net. This is a rate which is nicely ahead of our typical range of between 15,000 and 20,000s. We are very happy with this strong increase, and it is a promising sign for potential growth in the subscription revenues over the many quarters ahead. For the first quarter of 2021, revenues were at $67 million, 6% ahead of those of the fourth quarter and just 1% behind the $68 million reported in the first quarter of last year, pre-pandemic. All this demonstrates that Ituran has now recovered to its former strength and is primed for new growth in the quarter's head. On the profitability side, as you know, over the past year, we carefully managed the business which allowed us to maintain our cash generation and profit. As we return to the growth trend in the coming quarter, we expect that the operating leverage inherent in our business model, which enable us to add subscribers on a more or less fixed operating base, will allow us to see the top-line revenue growth from the increase in subscribers drop down to the bottom line. From the profitability standpoint, for the quarter, we reported EBITDA of $17 million, our highest level since before the pandemic. Again, it is a strong statement to the overall resilience and stability of our business model. On the cash side, we had first-quarter cash flow from operating activities at $9.2 million, bringing our cash and marketable securities position to $70 million. I'd like to go into more details on the various parts of our business. During the quarter, as I said, our aftermarket business returned to above its normal growth rate of 25,000 new net subs. The regions that were particularly strong were Israel and the U.S. It is worth mentioning that in Brazil, even though the situation with the pandemic still remains tough, We are pleased with the stabilization in the aftermarket subscriber base. I note that in Q1, Israel had its highest level of new car sales in history, an increase of 18% year-over-year increase. This is another sign that 2021 has started well in our key geographies. Many countries in South America are still highly impacted by the virus, and the economies remain weak there. but we are seeing improving trends in Brazil and in Mexico. During the quarter, we saw an overall decline of 5,000 OEM customers. This decline has slowed from last year and it's moving in the right direction. One of the major goals of the acquisition of the OEM business was to harvest synergies across our entire business and in all the various geographies, cross-selling and really taking successful business models and sales from one region to another. We are very much in the process of doing this now and tapping our large subscriber base of almost 1.8 million, regularly paying customers to bring them new and valuable telematics and related services by which we can organically grow our sales. And in summary, overall, we are pleased with our start to 2021 Ituan has resumed its growth trend, and the strong increase in subscriber base sets adds up well for the coming quarters. And I will now hand the call over to Eli for a financial review. Eli? Thanks, Eyal.