Ituran Location and Control Ltd.

Ladies and gentlemen, thank you for standing by. Welcome to the eTouran fourth quarter and full year 2023 results conference call. All participants are 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 eTouran'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, www.eturan.co.il. I will now hand over the call to Mr. Ehud Helft of EK Global 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 fourth quarter and full year 2023 results. I would like to thank each of our management for hosting this call. With me today on the call are Mr. Eyal Sheratzky, CEO, Mr. Udi Mizrahi, Deputy CEO in VP Finance, and Mr. Eli Kamar, 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'd like to remind everyone that the safe harbor in the press release also covers the content of this conference call. And now, Eyal, would you like to begin, please? Thank you, Eyal.

I'd like to welcome all of you to our fourth quarter and full year 2023 call. I'd like to thank you for joining us today. We are pleased with our 2023 results, which was a record year for it to run. We are all the more pleased given that we achieved these strong results despite difficult fourth quarter in which our country faced a major terrorist attack at the start of the quarter, which resulted in a war which effectively paused the economy for a few weeks. This new challenge followed by many challenges that everyone has faced over the past few years, including the corona pandemic, supply chain issues, and recently a slowing global economy. As our strong financial results demonstrate, our business is in very good shape and resilient against challenges. I want to also highlight that part of the reason for our resilience is that Ituran is a global, diverse business based on a loyal subscriber base of more than 2.2 million customers, primarily in Israel and Brazil, but also in many other countries in Latin America, as well as elsewhere in the world. And therefore, any impact in one specific region will have a limit effect on its overall business. The initial impact of the war on new car sales in Israel, which drives our new subscribers in that country and aftermarket product sales, temporarily caused a complete pause in the local car market. However, this pause was relatively short-lived, and as of end of January 2024, new car sales in Israel continue at the former long-term trend, and new car sales were up 3% year over year. Our subscriber base continued to show strong growth, adding 42,000 subscribers in the quarter, well ahead of our expectations of between 30 and 35 thousands that we shared with you last quarter. This is still well in advance of the long-term rate we had in 2021 and earlier of between 20 and 25 thousands per quarter. Overall, as you can imagine, we are pleased with our relative strengths in Q4 and furthermore, the overall picture in 2023 is very strong. Looking at our balance sheet strengths, we ended the quarter with over $50 million in net cash with almost no debt. Given our ongoing growth, our solid profitability, our strong cash generation each quarter, and our strong net cash level for the second quarter in a row, we have decided to increase the dividend. Last quarter, we increased the ongoing dividend from $3 million to $5 million per quarter, and this quarter we are further increasing the quarterly dividend to $8 million per quarter. We are very pleased to share the fruits of our success and we see our dividend as well as our ongoing buyback program as a reward to our loyal shareholders for the long-term support of our company. Starting from 2024, given the stability of our business and our ability to continue performing even during challenging times, we have decided to provide EBITDA guidance ahead. For 2024, we currently expect to report full EBITDA of between $90 and $95 million and expect to cross the $100 million EBITDA landmark in 2025. We expect the subscriber growth to continue growing at around current rate of approximately 35,000 to 40,000 net new subscribers per quarter. I note that the expectations are as of today. Our EBITDA expectations are based on the relevant currency levels remaining at around current average rates and also assumes that current global macroeconomic situation globally and political situation specifically in Israel doesn't significantly worsen. In summary, 2023 was a solid year of performance for it to run in all respects. and we believe that 2024 will continue on this trend. I want to add that I am very proud of the courage and commitment of the Turan team, both in Israel and globally, especially in the challenging time we have had recently, and wish to personally thank them for their resilience and dedication during these times. As has been true throughout our long history and will continue to add over the long term, our constantly growing subscriber growth will continue to translate into increased revenues with faster growing profitability over the long term due to the operating leverage inherent to our business. And with that, I hand over to Eli. Eli, please go ahead.