Ituran Location and Control (ITRN) 21 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Ituran Third Quarter of 2024 Results Conference Call. [Operator Instructions] 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 EK Global Investor Relations at 1-212-378-8040 or view it in the news section of the company's website, www.ituran.co.il.

the to hand now will call Mr. over I Investor Green of Global EK Kenny Relations. Mr. like begin? would to Green, you

Thank Good the to Ituran's Ituran's results. you, and would management conference you, operator. I call. call day for to hosting to to discuss like third this XXXX of quarter thank all welcome

by CEO; quarter's Mr. with with of Deputy Ituran. Udi will Udi begin CEO results, Eli and the With me Mr. Mr. CFO today VP summary Kamer, the of a followed Eyal Sheratzky, of summary Mizrahi, Finance; and a Eyal financials.

for We open the will then the call question-and-answer session.

remind I would of like harbor that to the conference release this everyone press in also content covers statement today's safe call. the

And you to now please? begin, like would Eyal,

third today. call, joining quarter you for Kenny. thank XXXX all you, Thank like our to and us I'd welcome to of you

are our with revenue profit across steady quarter we geographies presenting and results, operate. pleased We which in the growth in third

report subscribers the quarter, level also high of happy are end of net top came to which our expectations. XX,XXX We the a in in add at

achieved The in in local negative strength the dollar lowered U.S. which quarter, the denominated the results dollars. results when currency despite U.S. impact presented of were our

local we of in our terms, geographies in the which In growth in operate fact, higher. currency even was most

XX,XXX. by the net end and in is increased high our We subscriber base at quarter which XX,XXX a between the of XX,XXX of expectation, our

well as launch the geographies success for to and operate. which various from demand our services continued traction Our in as reflects initiatives product we the ongoing and location-based new in continue services, we telematics

automakers OEMs vehicle many new in new partnership of a will our them with with tens the Under ] the preinstalled models, with a and customers Nissan's provide years. vehicle Mexico. Chile, of week, vehicle which of a [ thousands X location over is years have units Ituran potentially Chilean them, in contract and with partner leading one Nissan, announced Nissan we Last world's with long-term X-year contract for we

provide also and services. recovery will We telematics vehicle stolen

Following Nissan, customer's which purchase, pay vehicle and will Ituran. car branded Nissan to with the enjoy Nissan paid trial they they which by a will after continue Chile have on will use-free access services comprehensive application. have service, to to Nissan they their will of Ituran Customers option

will customer and Ituran in theft the center the also breakdown have Additionally, XX-hour toeing. as and contact assistance to of Chile's services access event such assistance emergency vehicle

This very customers Mexico Nissan replicate additional the agreement can for in culmination in will [indiscernible] well discussions has Chile. service to with our satisfaction this is new in I agreement us Chile expand in of believe our Nissan and regions the strong from over that cooperation in future. use Nissan how on strong the this to bring new service shows This Mexico, to we and enable that

the build a of aiming leveraging many Chile also regions We aftermarket to experience are business other operate. the we we this strong strong have in which in in market in

We that in are in of OEM active those manufacturers discussions work addition to major with. a number we with car already also

provide we OEM looking well in America. as additional South bring partners are services the OEMs existing We as new to to broaden countries

million full-year potential We we year, our and see a remain meet with XXXX, From is on throughout to via We million. of long-term growth the EBITDA the that between currency strong $XX perspective, this targets. headwinds past financial guidance our for track even initiative. reiterate $XX

be for subscribers. growth quarter, the XX,XXX to new will XX,XXX between subscriber continue expect net that We and

million came position to quarter. over $XX.X Given million in cash the $XX ongoing strong generation, net cash which of the our

and same share XX% issued quarter. year We is of strong ago dividend last $X that dividend of quarterly shareholders. over the we level quarter continue million increase to the a our This with that at

a from stable X%, which annualized yield dividend over company. an represents a basis Our solid a return return and of strong on very is

see as long-term support reward We shareholders of their and our to loyalty Ituran. ongoing our dividend a for

In Ituran's performance. with pleased summary, remain we

continue to the long and subscriber on a operating our well regions. aim manufacturers number to all increased additional the of our enhance the leverage car with new are growth inherent revenue, we active improved again to I growth growing coming constantly translate forward business. engaged customers to Our potential as quarters. current our margins across look into major will We America South profitability due in services OEM and our in discussions updating our customers countries both to and subscriber to to term new greater growth, bring in currently OEM you progress as over

I please Eli. hand with that, over Eli, to And go ahead.

a will results. summary the provide Thanks, Eyal. of financial I short

release You the press can find the that earlier in we results issued today. more detailed

into . Revenues quarter revenues were subscription various local year-over-year. currencies local Third in XX%. in the In the XX% X% strengthening dollar of U.S. $XX.X X% by the of year-over-year in last a compared increase and Product an currencies, in $XX.X million, The revenue impacted in, when from currencies, million, X%. in year-over-year revenues the were currencies, third increase of an increase quarter revenues an quarter X% local of with year. decrease million, U.S. increase dollars. grew the were revenues of million $XX.X a local fees and $XX.X Ituran quarter translated in of versus the operates which

end was previous XX,XXX of expanded XX%; World, of third Rest by Brazil, quarter increase as the million of Israel, quarter, geographic end XX%; in the the The the revenues subscriber quarter. of base from breakdown an of third to XX%. The follows: ] [ X,XXX the

of of year-over-year. $XX.X was currency, of or grew local $X.XX, per third compared quarter in of last with grew X% the revenues $XX.X third the share increase the of local per or diluted EBITDA for quarter last diluted million year. $XX.X compared third XX.X% in for income to quarter million earnings million EBITDA share earnings currencies, or year. $X.XX an X% was net Net year-over-year. the In $XX.X XX% of revenue, of In quarter of income million or of increase XX.X% EBITDA an X%

quarter for million. Cash XXXX third flow of the $XX.X from was operations

XX, net $XX.X million and cash net a compared a cash of $XX.X marketable debt marketable had This including $XX XXXX, of is company a $X.X As September cash, to a debt of of million of of amounting million to of with securities of XXXX. position million, $XX.X amounting position and securities the including million cash, $X.X million. year-end as

strong Directors ongoing of the Board quarter profitability, continuing declared dividend cash dividend $X balance company's current for flow The sheet. The a takes account strong million. the into positive and of

to for Operator. question-and-answer with the I'd And that, like the open call session.

first The Instructions] question [Operator Sergey is Glinyanov from Freedom Capital. from

but not But [indiscernible] price results. else. see excellent decline segments only in something obviously [indiscernible] it's company service we might So because

mentioned, Service talking previous to are comparing year last comparing to as you you the revenues, or quarter.

Comparing previous year.

Yes. The previous year.

exchange did effect. So $XXX,XXX. almost service down the is revenues went reason main the by But currency

exclude you currency only So about it, the if $X that are -- was on an effect getting you million. of

expected. So as basically, their up went revenues service

operating What operation G&A impacted? to decrease. margin the Pleased better to -- components, due main see is which margin

the third last Margin, quarter to year XX% XX.X%. for margin the were was operating margins comparing

the And in operating the basically, went the the is business main up. leverage reason So margin model.

revenue May an mentioned further Okay. product Got you signed it. post Chile. agreements recently agreement any with Nissan, And sales. that you've

typical years with The contract many that in for have Mexico. Nissan contract we a is

to and we talking paying market smaller contract, of because than us. that Of is customers/subscribers directly of thousands longer-term tens Chile include services about it's a Mexico, Nissan the new still are are course, hardware a since but contract

to us to extend with along and the contract our a with profit that Add to the allow higher renewals the profitability that, years. also experience renewals

is question Klee next Group. The from [ from ] Maxim Allen

get and someone them financing your ones companies up. are to And are you decide or Could to to auto insurance to through for with to whatever with what talk partnerships hurdles can automakers, compelling someone a arguments you to you sign say the major would most get little potential that companies. What like make up? the sign

There that -- several is this are long. BXB it, cycle let's call the and segment reasons sales in

of be, the basic these that all, Santander, one a Generali, or which such international mentioned, a of First leaders is [indiscernible] car industries et or if cetera. each bank a strategy it's it's can of is consider is very manufacturer, as and if companies again, you insurance marketing or that we HDI, a brand brand or this

of day first end and the to in in strategy. their So go it's invest because all, the solutions offer to decision those and pay their for of have they

is this their decision. So own

have here be to will role with it them Of strong something course, that convince a benefit. we

Second, technology aspect, into once we they facilities Brazil, decide installations, Mexico they have then to choose spread how get the partner around and countries. right it's such and and as other regions, large

is of this validation. takes how the It pilots. So It that's a there like, time. third negotiation And look is contract then lot a take includes time. includes

want pay more, Usually, want the they're get et to KPIs, to suppliers customers cetera. less,

a when which expenses that attach and take we you aspects company because a supplier. the thing has and Nissan X supplier example, taking like Nissan everybody we are in it's of that drives for brand And a problem, as So driver large has the one, with Nissan car create time. these their a And should that confidence marketing every when long is another such a problem. a Ituran Mexico, brand their know to last it's

to their very, is that their brand as respective. I have can that I a they very, with own to think, trust know So they brand thing not brand hope attach we one will important the this most downgrade of it happy that I which they are answered.

environment countries -- to that about talk also makes that you see what see you're great. there it there for product? the big you opportunities positive. was about the you you that in, your of Could And that is up that that countries the other Yes, are set as some will bigger attractive --

have that more large driver. basic more cannot has this of mentality. in the people full is I people a those solution almost lot something important. is in is, the very them And that -- and we a we America. strong would I the brand in our as example, say, of, different Then is afford needs of more for country of need the In There or security, provide countries stronger. each have an insurance is are say, themselves will security The a say, let's main main would Then most someone They have lot countries the and example. is This reason. the us Latin a for confidence. more -- Brazil, most a problems. is operation, This experience,

insurance. with kind Ituran know, So the we found you a is like which ICS, of solution

which on And something unique, do that us we hand, large business. cannibalism -- main it in and very that with and allowed insurance, is companies this case, payment. are monthly other their do car insure only car-theft for insurance not other And it his create to segment that not the something a is selling attached

care take if they manufacturers or to you after their offer car they which the their to they their when dealer. also, customers that dealers, out go talk they we and -- car is to took the even And for about again, car segment, other want security, for from it care show

So businesses. the it better market this emerging for say reason more why I is America, Latin ground globally Ituran would

My the opportunity you is look question what involved -- last talk you you usage-based where do see you can insurance. and -- about how And at in you're there?

basic a his mileage from the comes driver more more and skills better secure. drives as It driving much idea or are that as

companies they will payment and accidents because less insurance have So expenses they less will less have of claims. have will

So hand, premium. they insurance the something can companies can the on which other customize get

-- when that traditional, very traditional we so something cycle depend from very longer also that large, be something because takes components companies. very think, something to more we I for know interesting is it which attach So a customized corporates going you is takes insurance to sales X, It's change large is the time It technology. on very methods insurance time. to these to companies thought

we companies join major our types that to Israel, convincing X.X X, have about it in that offers. terms I in technology. and solution. this first am Since I train succeed our happy would by the adopt X adopt years to of then, of the do insurance company and ago that portion insurance insurance technology, we of the And decided say in industry Israel

allow that provides method offer hardware and One this online has create data for that a for solution right to the and our of the driver our his evaluate module that the risk risk. using the service hardware then includes billing

different, that that's of profitability, depends our or in we in started it's partners companies program iPhone say, hardware prices in to is each contract and equal. something I grow. our are with the And very that in insurance the terms phone, attach we with integrated the without and did own us. Android also it's to second without would is The We some application Israel, very the the an what and hardware do order that using it car software it the

in It's will have start insurance at it few And enough. we and something we in yet mature because more Israel, that. putting also needs in markets take The would industries those It's now and say, companies look in them, or seeds took I in years. how not Mexico. to Argentina it's convince still insurance time a some also us that

experience also record in to I we see Our penetration will or Israel faster and that think a operate. support track will other geographies I

actually did thought of. I X question have great. other I just That's

For your you that opportunity could you the what announcement with be? think explain of Santander, just could size

something X talking with when of also announcement we contract, about ago. years after when The we they is to almost pilot. aim almost started is a that by loans thousands year to hundreds was, extend the Santander I subscribers. This think, of years. And are a from the way, expand and car They This needs more their we collateral derive their to buyers. provide to secure of to

And us months. their basis, risk it annual that have be when it of thousands loan pay course, Santander they or release of those And their XX service the but an tens loan decreasing Ituran. them that to then, finish for means with on we aware provide or the subscribers XX going from or to are subscribers,

So of it's cycle. kind

the be in of net around average the hundreds -- in thousands of subscribers, be will So of XXX,XXX should XXX,XXX year. the every the or it on end end,

America. the our extend I regions Brazil, On Santander Brazil, Latin to we are way, to in by other in hope, doing and efforts it only

is from Barclays. question Reimer from Chris next The

A quick with line? you remind seasonality ones there's Can me. of us either any . of just your couple for revenue if

diversified of geographies. of Most No. all, our business, between a we -- very diversified between first have segment diversified

is others, as will So seasonality by even area, it still, no a in appoint there which hedged group. is I'm X saying not specifically, something cannot material which there but if in general, be is I

how just the any like. color What's give And Yes. as the that's insurance motorcycle it. Got been initial reaction on to touching you Can products. trending?

is security It started cost. even provide risky we segment steal to a would more we lot then say, for -- develop than which very motorcycle drivers. car. a more there succeed solution because different And steal those a here, a I But insurance to is of easy to have insurance X motorcycle It's motorcycles.

do not Israel, ensure motorcycles, motorcycle. In buy for example, their people that they

of the to solution software. and a using was have motorcycles, very, risk high. as needs market and And in So market total on with Brazil, since a companies back owners recovery. the risk motorcycle the but motorcycle we based vehicle Motorcycle they insurance is to office use Ituran ensure AI very technology large want our the their reduce compared because to and very high rate

this succeed it, base driver with we more with that insurers. traction motorcycles ago, out get to reduce proposal see base, So a also more and our about that we ramping and and came and motorcycle customer up we year --

next The from is [ Straus ] from Hardy. Josh Pekin question

questions. of couple a had I Yes,

about the the face that of talk the rough [indiscernible] right pretty in have market war. face in consistency of GDP in you guys now, biggest rather of like And impressive core It's digits. worsened First, business a to Israel down the I'd the double in Israel. economy

business so you're guess, a keep as the right coming of lot trying import how -- it can't able I And arms there's as my And new get I imagine I'm around to now. to cars is. just of importing in stable

So start there. let's just

Okay.

that the and you're these unique. car But It's growth in something car the support times this is because dramatically right. The Israel, cetera. for is high and because of even So here, the went at not first et situation, tough of that rate of -- theft cars our cost all, the went down. dollar importers things

to countries solutions more understand provide growing, attraction the that where And usually, Ituran economic this become we is is going. there there when or rate growing. security as is and is have violence problems stronger. or no of say, getting in We it would problems car situation theft also needs the violence And I such means the

they to didn't security a that we tens or bought So thousands first ago, the companies ask the get insurance just decade a cars when is after this explained, almost were for of a X of year that years year system.

to Now them they install Ituran. when when renew system insurance policy, XX% send of install want us their they security to

there So get I losing we we kind in I'm hand, that not down was of about of or remember, things we sure as the course, quiet cars, a December other the to area, a not old are become of and and Ituran on here I'm in 'XX, we not sure commercial course, beginning X as let's But went brand-new hand, November, car. down, call the it, recovered XXXX almost talk October, life when of a a Regard the secondhand but and GDP were but living the the except at in business more, year. of normal. the are shut moving long very rest everything

stable Right, in on hard -- not right. in war, area it's just of with that's talk us any to pond, thanks it's side Bringg but a particularly Aviv helpful. Bringg? other the for imagine business [indiscernible] is Tel most on surprising, the the of this for about population Well, it's we Certainly, color. it going but the on Can what's here updates there the

a general times to in this the of the SaaS information, of billion And achieve business for growing course, on private was valuation terms million than I, and market last But different partners plan. of that done a financial specific Bringg understand company, startups. $X entity, led succeed cannot that of business It's XX%. inside more we was provide the by a round investment there that $XXX and have they plan. a numbers has only and year, It's everything. we are talking

a example, holdings So for can now, liquid of but IPO or by it's thing it do M&A sell to we that whether the not by in market. course, it's our or

we be to we So prefer wise wait. and

the members. really are of a and We optimistic good we position part on, know it. course, Board in in to Of we're future do the regard being what's going in

value balance to in sheet our Just you that remind Bringg X. is

I contribute of will bonus the profits. So in or be will believe that future, it a

market right. agree. at all [indiscernible] question. Right, X more remember One I values the well. too right, I too And no, No, is

assets. other got -- increasing does was what going I and flow statement, and mean? in you've terms So know and wanted current looking noncurrent what's was your I $X in there? billion I a at to gap on just cash almost of . year-over-year, that And What

are about? Which item period... talking you For which

In it your increase a year-over-year much -- decrease increase year in had and X-month you terms not million This X-month assets. standpoint, standpoint, doesn't an a in cash show a current of flow a $X.X of but a difference $XXX,XXX million. in $X statement other there's a year, much of noncurrent of of was difference from last

I so it, find can to help you. trying I'm

flow You at look the statement. cash

Let you item that back specific between between me get that you. back there check to is that nothing on a can quarters because we and capital There on it's this get periods. volatility there and that that can it -- is we But or is can specific probably nothing again, working check change. to

or sheet revenues I'm hit not curious on or not that yet something very the like income on an that. Yes, statement have balance whether it's

the for just Great But -- give the keep stock guys, forward. yes, call, there. it going So see quarter, what and forward is me please to now. me going me shoot story that's know know let looking

Instructions] There questions further no are at this [Operator time.

ahead Ituran's call closing statements. Mr. Before a his replay your you ask Sheratzky of I to like make www.ituran.co.il. that will participants Mr. available I remind concluding would would on be tomorrow website, like this to with to Sheratzky, statement, go

thank and business. shareholders I On the months, Ituran, with our In investors presenting behalf interest at management [indiscernible] our there. be see of continued of to long-term will would for support the and also coming we we meeting your like of

out team. or our feel with If Investor to Relations in meeting to interested you reach are free us, speaking

our that, end with good a we and And call, have day.

Third Ituran of concludes Thank This Call. Quarter your the you. for Results XXXX participation. you Thank Conference

disconnect. may You and ahead go