Ituran Location and Control Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to Iteran's second quarter 2023 results conference call. All participants are at present in 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 Itoan's investor relations team at EK Global Investor Relations at 1-212-378-8040 or view it in the news section of the company's website at www.itoan.co.il. I will now hand the call over to Mr. Kenny Green of EK Global Investor Relations. Mr. Green, would you like to begin?

Thank you, Operator. Good day to all of you, and welcome to ITERUN's conference call to discuss the second quarter 2023 results. I would like to thank ITERUN's management for hosting this conference call. With me on the line today are Mr. Eyal Sharadsky, CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamar, CFO of ITERUN. Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We will then open the call for the question and answer session. I would like to remind everyone that the safe harbour statement in today's press release also covers the contents of this conference call. And with that, Eyal, would you like to begin, please?

Thank you, Kenny. I'd like to welcome all of you to our second quarter 2023 call, and I would like to thank you for joining us today. We are clearly very pleased with our achievements in the second quarter. 2023 has so far been an excellent year for it to run. It runs businesses in strong growth phase with the subscriber base growing twice as fast as we grew in the past years. This jump in growth rate is now clearly benefiting our financial results. For the past few quarters, our subscription fees have been constantly at new record levels each quarter and our profits measured in either net income or EBITDA at four-year highs. As you can imagine, we are very pleased with our results. and the progress we've made. Given the way our business is structured with a core and stable subscriber base of well over 2 million paying a monthly retainer and the clear long-term visibility this provides, we have very reason to expect that the current positive trends will continue throughout 2023 and into 2024 and beyond. From a strategic perspective, we experienced strong growth in subscribers, adding a net total of 47,000 subscribers, of which 45,000 were from the aftermarket and 2,000 were from the OEM. As I mentioned, this strong subscriber growth is now being reflected in our record subscription revenue. This is even despite the currency headwind due to the dollar strength in 2023. Q2 subscription revenue grow at 13% year-over-year, or 17% growth when calculated in local currencies, which naturalized the effects of the exchange rate on our growth. Over the past few years, we've entered into a few new verticals, such as a financing business, which are performing well and acting as growth engines. They are one of the main reasons that our business continues to grow well. During the quarter, we announced that the Brazilian subsidiary entered a partnership with Santander Bank, which firmly solidified our presence in the automotive financing market. This strategic alliance aimed to broaden the Brazilian car ownership market by facilitating the credit approval for automotive financing with Ituran's Telematic Services and Santander's financing at attractive rates and credit insurance. This new deal demonstrates that this finance vertical is performing well and supporting our overall subscriber growth. Furthermore, we see further potential and we are looking to cover additional markets and geographies with existing and other finance customers. In terms of the Israeli market, due to the general macroeconomic limit, we have seen a strong increase in the theft rates. Due to our good performance over many years in this vertical of stolen vehicle recovery, it increases the need of the insurance companies to use our services. While this is very much the case in Israel, we also see similar trends throughout Latin America, with the general economic climate contributing to an increase in car safe rates. This is ultimately leading to an increase in demand for our services from insurance companies. This also provides our business with some defense in the face of an economic slowdown. Finally, we've launched a new product in Latin America focused on connectivity and stolen vehicle recovery for the motorcycle market, which is a new sector for us. In 2022 only, there were estimated records of 5.4 million motorcycles sold in Latin America, and we believe our new solution presents a very attractive proposition for this sector. We are already seeing interest from manufacturers and insurance companies, and we are already in discussions. We see strong potential from this new product and service in the region for the coming years. And in summary, we are very pleased with our results of the quarter, and 2023 is shaping up to be record year 421 in all respects. Solid performance in our traditional aftermarket business, as well as recovery in the OEM business, and especially the growth engines we've seeded in the past years, are all driving our strong subscriber growth and record revenue. While we continue to monitor talk of a potential global economic slowdown ahead, historically we've found the theft rates tend to increase in economic downturns, increasing the demand for our services and beyond it. Our 2.2 million subscriber base paying us on an ongoing monthly basis gives us significant resilience in our economic environment. Looking ahead, we expect that our recent accelerated subscriber growth will continue to translate into increased revenues with faster growing profitability due to the operating leverage inherent to our business. We are excited for the coming quarters and anticipate a positive trend will continue throughout 2023 and beyond. And with that, I hand over to Oli. Eli, please go ahead.