Elbit Systems Ltd (ESLT) 2024 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems third-quarter 2024 results conference call. (Operator Instructions)

女士們先生們，謝謝你們的支持。歡迎參加埃爾比特系統 2024 年第三季業績電話會議。（操作員說明）

As a reminder, this conference is being recorded. I would now like to hand over the call to Daniella Finn, Elbit System's VP Investor Relations.

提醒一下，本次會議正在錄製中。現在我想將電話轉給 Elbit System 投資者關係副總裁 Daniella Finn。

Daniella, please go ahead.

丹妮拉，請繼續。

Thank you, Daniel. Hello, everyone, and welcome to our third quarter 2024 earnings call. On the call with me today are Butzi Machlis, President and CEO; Kobi Kagan, CFO; and myself, Daniella Finn, VP, Investor Relations.

謝謝你，丹尼爾。大家好，歡迎參加我們的 2024 年第三季財報電話會議。今天與我通話的是總裁兼執行長 Butzi Machlis；科比·卡根，財務長；還有我自己，丹妮拉‧芬恩 (Daniella Finn)，投資人關係副總裁。

Before we begin, I would like to point out that the Safe Harbor statement in the company's press release issued earlier today also refers to the contents of this conference call. As usual, we will provide you with both GAAP financial data as well as certain supplemental non-GAAP information.

在開始之前，我想指出，今天早些時候發布的公司新聞稿中的安全港聲明也引用了本次電話會議的內容。像往常一樣，我們將為您提供 GAAP 財務數據以及某些補充非 GAAP 資訊。

We believe that this non-GAAP information provides additional transparency to help understand the performance of the ongoing business. You can find all the detailed GAAP financial data as well as the non-GAAP information and the reconciliation in today's press release.

我們相信，這些非公認會計準則資訊提供了額外的透明度，有助於了解持續業務的績效。您可以在今天的新聞稿中找到所有詳細的 GAAP 財務數據以及非 GAAP 資訊和調整表。

Kobi will begin by discussing the financial results, followed by Butzi who will elaborate on the main events during the quarter and beyond. We will then turn the call over to a Q&A session.

Kobi 將首先討論財務業績，然後由 Butzi 詳細介紹本季及以後的主要事件。然後我們會將通話轉入問答環節。

With that, I would like to now turn the call over to Kobi. Kobi, please go ahead.

說到這裡，我現在想把電話轉給Kobe。科比，請繼續。

Thank you, Daniella. Hello, everyone, and thank you for joining us today. The financial results of the third quarter of 2024, continued to reflect the ongoing strong demand for our technology and solutions, and the progress in the implementation of our operational improvement plans. In fact, this is the third consecutive quarter where we recorded double-digit revenue growth. Turning now to the results of the third quarter.

謝謝你，丹妮拉。大家好，感謝您今天加入我們。2024 年第三季的財務業績持續反映了對我們的技術和解決方案的持續強勁需求，以及我們營運改善計畫的實施進度。事實上，這是我們連續第三個季度實現兩位數的營收成長。現在轉向第三季的業績。

Third-quarter revenue increased by 14% to $1,780 million compared to $1,502 million in the third quarter of 2023. In terms of quarterly revenue by segment, aerospace revenues increased by 7% in the third quarter of 2024 compared to the third quarter of 2023, mainly due to increased UAS sales in Israel.

第三季營收成長 14%，達到 17.8 億美元，而 2023 年第三季營收為 15.02 億美元。從分部門季度營收來看，2024年第三季航空航太收入較2023年第三季成長7%，主要由於以色列無人機銷售增加。

C4I and cyber revenues increased by 13% year over year, mainly due to radio system and command-and-control system sales. ISTAR and EW revenues increased by 13%, mainly due to electronic warfare and electro-optical system sales. Land revenues increased by 24% due to the increase in ammunition and munition sales in Israel.

C4I和網路營收年增13%，主要得益於無線電系統和指揮控制系統的銷售。ISTAR和EW營收成長13%，主要得益於電子戰和光電系統銷售。由於以色列彈藥和彈藥銷售的增加，土地收入增加了24%。

Elbit Systems of America revenues increased by 17%, mainly due to increase in night-vision systems and medical instrumentation sales. Elbit Systems' diverse geographic revenue base helps to reduce revenue volatility and support the long-term sustainability of our business.

美國埃爾比特系統公司營收成長17%，主要得益於夜視系統和醫療儀器銷售的成長。埃爾比特系統公司多元化的地理收入基礎有助於減少收入波動並支持我們業務的長期可持續性。

In the third quarter of 2024, Europe contributed 25% of revenues; North America contributed 23% of revenues; Asia Pacific, 18% of revenues; and Israel contributed 29% of revenues. Israel revenues continued to grow on the back of the prolonged conflict in the region, mainly in the land segment.

2024年第三季度，歐洲貢獻了25%的營收；北美貢獻了23%的收入；亞太地區，佔收入的 18%；以色列貢獻了29%的收入。在該地區長期衝突（主要是土地領域）的背景下，以色列收入持續成長。

The non-GAAP gross margin for the third quarter was 24.4% compared to the third quarter of 2023 at 24.9%. GAAP gross margin in the third quarter was 24% of revenues compared to 24.5% in the third quarter of 2023.

第三季非 GAAP 毛利率為 24.4%，而 2023 年第三季為 24.9%。第三季 GAAP 毛利率佔營收的 24%，而 2023 年第三季為 24.5%。

Third quarter non-GAAP operating income was $140.7 million or 8.2% of revenues in the third quarter of 2024 as compared to $120 million or 8% of revenues in the third quarter of 2023. GAAP operating income for the third quarter was $125.8 million or 7.3% of revenues as compared to $106 million or 7.1% of revenues in the third quarter of 2023.

第三季非公認會計原則營業收入為 1.407 億美元，佔 2024 年第三季營收的 8.2%，而 2023 年第三季為 1.2 億美元，佔營收的 8%。第三季 GAAP 營業收入為 1.258 億美元，佔營收的 7.3%，而 2023 年第三季為 1.06 億美元，佔營收的 7.1%。

The operating expense breakdown in the third quarter was as follows. Net R&D expenses were $119.9 million or 7% of revenues in the third quarter of 2024 as compared to $103.3 million or 6.9% of revenues in the third quarter of 2023. This increase was mainly due to additional R&D efforts in our land segment and continuous investment in our high-power laser solutions.

第三季營業費用明細如下。2024 年第三季的淨研發費用為 1.199 億美元，佔營收的 7%，而 2023 年第三季的淨研發費用為 1.033 億美元，佔營收的 6.9%。這一成長主要歸功於我們在陸地領域的額外研發工作以及對高功率雷射解決方案的持續投資。

Marketing and selling expenses worth $91.3 million or 5.3% of revenues in the third quarter of 2024 as compared to $86 million or 5.7% of revenues in the third quarter of 2023. G&A expenses were $75.7 million or 4.4% of revenues in the third quarter of 2024 as compared to $71.8 million or 4.8% of revenues in the same period last year.

2024 年第三季行銷和銷售費用為 9,130​​ 萬美元，佔營收的 5.3%，而 2023 年第三季行銷和銷售費用為 8,600 萬美元，佔營收的 5.7%。2024 年第三季的一般管理費用為 7,570 萬美元，佔營收的 4.4%，而去年同期為 7,180 萬美元，佔營收的 4.8%。

Financial expenses were $45 million in the third quarter of 2024 as compared to $35.7 million in the third quarter of 2023. The increase in financial expenses is due to the elevated interest rates in both the US and the Israel. Additionally, the rapidly growing backlog due to the Swords of Iron War required higher levels of working capital expenditures.

2024 年第三季的財務費用為 4,500 萬美元，而 2023 年第三季的財務費用為 3,570 萬美元。財務費用的增加是由於美國和以色列的利率上升。此外，由於鋼鐵戰爭導致的積壓迅速增加，需要更高水準的營運資本支出。

We recorded a tax expense of $12.8 million in the third quarter of 2024 compared to $10 million in the third quarter of 2023. The effective tax rate in the third quarter of 2024 was 14.6%, similar to the rate in the third quarter of 2023.

2024 年第三季我們的稅務支出為 1,280 萬美元，而 2023 年第三季為 1,000 萬美元。2024年第三季的有效稅率為14.6%，與2023年第三季的稅率相似。

Our non-GAAP diluted EPS was $2.21 in the third quarter of 2024 compared to $1.71 in the third quarter of 2023. GAAP diluted EPS was $1.77 for the third quarter of 2024 compared to $1.36 in the third quarter of 2023.

2024 年第三季我們的非 GAAP 攤薄後每股收益為 2.21 美元，而 2023 年第三季為 1.71 美元。2024 年第三季 GAAP 攤薄後每股收益為 1.77 美元，而 2023 年第三季為 1.36 美元。

This is the second consecutive quarter of double-digit EPS growth. Our backlog of orders as of September 30, 2024, was $22.1 billion approximately $5.5 billion higher than the backlog at the end of the third quarter of 2023.

這是每股收益連續第二季實現兩位數成長。截至 2024 年 9 月 30 日，我們的積壓訂單為 221 億美元，比 2023 年第三季末的積壓訂單高出約 55 億美元。

In the third quarter of 2024, the company recorded new orders of $2.7 billion of which $1.4 billion came from Israeli market. Approximately 66% of the current backlog was generated from outside of Israel. Approximately 37% of the current backlog is scheduled to be performed during the remainder of 2024 and in 2025, while the rest is scheduled to be performed during 2026 and beyond, which demonstrates the potential of the continuous growth of the company.

2024年第三季度，該公司新訂單27億美元，其中14億美元來自以色列市場。目前約 66% 的積壓訂單來自以色列境外。目前積壓的約37%計劃在2024年剩餘時間和2025年履行，其餘計劃在2026年及以後履行，這顯示了公司持續成長的潛力。

Operating cash flow for the nine months ending September 30, 2024, was $83 million inflow compared to $200 million outflow for the same period last year. The Board of Directors has declared a dividend of $0.50 per share.

截至 2024 年 9 月 30 日的九個月營運現金流流入為 8,300 萬美元，而去年同期流出為 2 億美元。董事會宣布派發每股 0.50 美元的股息。

I will now turn the call over Mr. Machlis, Elbit's President and CEO. Butzi, please go ahead.

現在我將把電話轉給埃爾比特公司總裁兼執行長馬赫利斯先生。布茲，請繼續。

Thank you, Kobi. As in the past year, I would like to express my ongoing gratitude and appreciation for our global workforce who continued to demonstrate the ongoing remarkable commitments to our customers worldwide during this time of elevated demand for cutting-edge products and solutions.

謝謝你，Kobe。與去年一樣，我要對我們的全球員工表示持續的感謝和讚賞，在對尖端產品和解決方案的需求不斷增加的時期，他們繼續向全球客戶展示出持續的卓越承諾。

In order to meet the continued increased demand of our solution, we expanded production facilities, increased inventories -- inventory level in order to address the growing backlog and supply chain challenges and continued to recruit employees.

為了滿足我們解決方案持續成長的需求，我們擴大了生產設施，增加了庫存——庫存水準以解決日益增長的積壓和供應鏈挑戰，並繼續招募員工。

This is the second consecutive quarter we are proud to report over 25% increase in our EPS year over year and the third consequent quarter in which we report double-digit revenue growth. In addition, we recorded a record backlog of $22.1 billion. All these are clear testament of our products and technological superiority.

這是我們連續第二季的每股盈餘年增超過 25%，也是我們連續第三季達到兩位數的營收成長。此外，我們還創下了 221 億美元的積壓記錄。這些都充分證明了我們的產品和技術優勢。

These accomplishments, among others, have continued to advancement of our internal revenue target to reach over $7 billion by 2025 and our internal target of 2026 non-GAAP operating margin of around 10%. We've continued to receive significant orders, which I will discuss in detail.

除此之外，這些成就繼續推動我們的內部收入目標到 2025 年達到 70 億美元以上，以及我們的內部目標 2026 年非 GAAP 營業利潤率達到 10% 左右。我們繼續收到大量訂單，我將詳細討論這些訂單。

Yesterday, we announced that Elbit System was awarded contract worth of total amount of approximately $335 million to supply defense systems to a European customer. The contracts include the supply of PULS, Precise and Universal Launching Systems; rocket launcher and rockets; as well as Hermes 900 UAV equipped with advanced payloads. These are two of our flagship business lines, which are in high demand globally.

昨天，我們宣布埃爾比特系統公司獲得了總價值約 3.35 億美元的合同，為歐洲客戶提供防禦系統。合約包括供應普爾世、精密和通用發射系統；火箭發射器和火箭；以及配備先進有效載荷的赫爾墨斯900無人機。這是我們的兩個旗艦業務線，在全球範圍內需求量很大。

These contracts follow a number of success we announced during the quarter. Our extensive R&D effort in the past years resulted in a contract to supply high-power laser for the Iron Beam air defense system. This breakthrough technological solution provides a robust defense against a variety of threats. We are extremely proud of this development and believe it will be a meaningful technology in the modern battlefield.

這些合約是我們在本季度宣布的一系列成功之後的成果。我們在過去幾年中進行了大量的研發工作，最終簽訂了為鐵束防空系統提供高功率雷射的合約。這項突破性的技術解決方案提供了針對各種威脅的強大防禦。我們對這一發展感到非常自豪，並相信這將是現代戰場上一項有意義的技術。

We will continue to win new contract to supply our Iron Fist Active Protection Systems solution. The latest contract is for the US Army's Bradley's IFVs. This solution is aimed at enhancing the self-defense capabilities of the armed platforms against modern battlefield threat. It is characterized by high performance and low volume, low weight, and power requirements.

我們將繼續贏得新合約來提供我們的鐵拳主動保護系統解決方案。最新的合約是針對美國陸軍的布拉德利步兵戰車。該解決方案旨在增強武裝平台應對現代戰場威脅的自衛能力。其特點是高性能、低體積、低重量、低功率需求。

The system provides Arm platforms with 360-degree protection from a wide variety of anti-armor threats such as anti-tank rockets, Anti-Tank Guided Missiles, UAS and Loitering threats in both open terrain and complex urban environment.

該系統為 Arm 平台提供 360 度保護，抵禦各種反裝甲威脅，例如開放地形和複雜城市環境中的反坦克火箭、反坦克飛彈、無人機和徘徊威脅。

Finally, Elbit Systems was awarded as a partner of the Israeli Defense Ministry that we -- 2024 Israel defense price for three separate innovative first technological system. This includes a price for the whole of the Citron Tree and Golden Almond Battle Management System in the David’s Sling air defense developed by Elisra an Elbit subsidiary. Elbit System was also recognized for its role in developing technology for the IDF The Namer heavy armored personal carrier as well as for a really classified system.

最後，埃爾比特系統公司作為以色列國防部的合作夥伴，被授予我們──2024年以色列國防價格三項獨立創新第一技術系統的合作夥伴。這包括埃爾比特子公司 Elisra 開發的大衛投石索防空系統中整個香櫞樹和金杏仁戰鬥管理系統的價格。埃爾比特系統也因其在為 IDF The Namer 重型裝甲運兵車以及真正機密系統開發技術方面所發揮的作用而獲得認可。

Our ongoing success has been driven by two main -- key factors, Elbit Systems, extensive geographical presence, across Europe, North America, Asia, and Israel and our wide portfolio of advanced technological solutions, which have proven highly effective and increasing global defense budgets. On behalf of myself and the entire company, we continued to deeply wish for the immediate release of all hostages held captive in Gaza.

我們持續成功的動力有兩個主要因素：埃爾比特系統公司（Elbit Systems）、遍布歐洲、北美、亞洲和以色列的廣泛地域分佈以及我們廣泛的先進技術解決方案組合，這些解決方案已被證明非常有效且不斷增加的全球國防預算。我們代表我自己和整個公司，繼續深切希望立即釋放所有在加薩被扣押的人質。

They are constantly in our heart and mind and we eagerly await for their safe return home. And with that, I will be happy to take your questions. Operator?

他們一直在我們的心和腦海中，我們熱切地等待他們安全回家。因此，我很樂意回答您的問題。操作員？

(Operator Instructions) Ellen Page.

（操作員說明）艾倫佩姬。

Congrats on the quarter. I just wanted to ask about the Iron Beam contract that you received in the quarter. I think that one of the first like near-term high-power laser contracts that you've received unless I'm mistaken. And I just wanted to talk -- I wondered if you could talk about that opportunity over the next three to five years and how you think about that program contributing to revenue.

恭喜本季。我只是想問一下你們本季收到的鐵樑合約。我認為除非我弄錯了，否則您收到的第一批近期高功率雷射合約就是其中之一。我只是想談談 - 我想知道您是否可以談談未來三到五年的機會以及您如何看待該計劃對收入的貢獻。

Thank you, Ellen. We in Elbit, we believe that energy weapons are a growth engine for the company. And we invest in technologies in several domains. One of them is high-power lasers. There are great advantages for high-power lasers. Actually, based on subsystems, you can defeat several threats in a very economical way. We hope to deploy next year together with IMOD, the first land high-power laser together with Rafael with the Iron Beam system.

謝謝你，艾倫。我們在埃爾比特，我們相信能源武器是公司的成長引擎。我們投資多個領域的技術。其中之一是高功率雷射。高功率雷射有很大的優勢。實際上，基於子系統，您可以以非常經濟的方式擊敗多種威脅。我們希望明年與 IMOD 一起部署，這是第一個陸地高功率雷射器，與 Rafael 一起使用鐵束系統。

However, in parallel, we continue when we see a lot of potential for these systems abroad as well. In parallel, we continued to develop the urban solution, the urban solution, which we lead in Elbit has great potential activating high-power laser from there will enable us to reach long distances and to increase effectiveness in the system. We are a world leader for such technologies, and we see a growing potential for high-power lasers in general and for additional energy weapons as well.

然而，同時，當我們看到這些系統在國外也有很大的潛力時，我們會繼續下去。同時，我們繼續開發城市解決方案，我們在埃爾比特領導的城市解決方案具有巨大的潛力，從那裡啟動高功率雷射將使我們能夠到達長距離並提高系統的效率。我們是此類技術的世界領導者，我們看到高功率雷射和附加能量武器的潛力不斷增長。

And then on -- as kind of an offset, European sales were down 13% year over year. I think it was a tough comp. But just given a potential change in the funding environment as it relates to like US supplementals in that region. How are you thinking about the opportunity in that region going forward and the demand environment in Europe over the next few years?

然而，作為一種補償，歐洲銷售額比去年同期下降了 13%。我認為這是一場艱難的比賽。但考慮到融資環境可能發生變化，因為它與該地區的美國補充品有關。您如何看待該地區未來的機會以及未來幾年歐洲的需求環境？

Ellen. This is Kobi. So we experienced this quarter, a 17% increase in our Elbit Systems of America sales year-over-year. And this is because of our position in the market. And as we mentioned, higher night vision sales, higher medical instrumentation sales.

艾倫.這是科比。因此，本季我們的 Elbit Systems of America 銷售額年增了 17%。這是因為我們在市場中的地位。正如我們所提到的，夜視儀銷量更高，醫療儀器銷量更高。

And those are the principal issues. So our position in the US, we believe that we are positioned to additional growth in the future. As to the European market, the European market is -- we believe we'll experience higher demand as the push for higher defense expenditure will come. And of course, the threat that this market is experiencing.

這些是主要問題。因此，我們相信我們在美國的地位將在未來進一步成長。至於歐洲市場，我們相信，隨著國防開支的增加，歐洲市場的需求將會增加。當然，還有這個市場正在經歷的威脅。

And just yesterday, announcement of $335 million of European market win of two of our high runner systems, both the PULS and the UAS, the 900 may -- experiencing this potential for the company for additional growth in the future.

就在昨天，我們宣布我們的兩個高效能係統（PULS 和 UAS）贏得了價值 3.35 億美元的歐洲市場，900 可能會體驗到公司未來進一步成長的潛力。

Ella Fried, Bank Leumi.

艾拉‧弗里德，以色列銀行。

It's Ella. I can't hear you very well.

是艾拉。我聽不清楚。

We -- hello, Ella. It's Butzi. We hear you very well. You please continue.

我們——你好，艾拉。是布齊。我們很清楚地聽到你的聲音。請你繼續。

Great. Okay. First, I would like to congratulate you on the results and on the exceptional growth. And I would like to discuss a bit further, your growth targets. First, the growth of 2025. I clearly don't hear so much about your plans beyond 2025. I know that it will be depending very much on the political and the geopolitical environment. But still, I'm sure you have some assumptions. Do you see the growth beyond the '25, '26 as steady or you have other milestones that are leading you to some more growth jumps?

偉大的。好的。首先，我要祝賀你們所取得的成果和非凡的成長。我想進一步討論你們的成長目標。第一，2025年的成長。我顯然沒有聽到太多關於 2025 年後的計劃。我知道這在很大程度上取決於政治和地緣政治環境。但我仍然相信你有一些假設。您認為 25 年、26 年後的成長是否穩定，或者您還有其他里程碑可以引領您實現更多成長跳躍嗎？

Hello, Ella. Good afternoon. We -- as we see -- as you can see from our backlog the company will continue to grow in the coming years. And we expect two-digit growth in the coming quarters. In order to deliver the volume of the backlog we have. We see growing demand all over the world for our solutions. We see it in Europe.

你好，艾拉。午安.正如我們所見，正如您從我們的積壓訂單中看到的那樣，公司將在未來幾年繼續成長。我們預計未來幾季將實現兩位數的成長。為了交付我們所積壓的訂單量。我們看到世界各地對我們的解決方案的需求不斷增長。我們在歐洲看到了這一點。

We see it in the US. We see it in the Far East and, of course, in Israel. Therefore, I expect the company to continue to grow in the future as well. It's difficult for me right now -- and our backlog, by the way, covers not just 2025, It covers also the year after 2025. We have a nice coverage also for '26 and beyond.

我們在美國看到了這一點。我們在遠東，當然，在以色列也看到了這一點。因此，我預計公司未來也將繼續發展。現在對我來說很困難——順便說一句，我們的積壓工作不僅涵蓋 2025 年，還涵蓋 2025 年後的一年。我們也對 26 年及以後的內容進行了很好的報導。

It's difficult for me to predict what would be exactly the numbers in the far future, but I can -- I'm quite confident that the company will continue to grow, also in the future based on the demand we see right now in the market.

我很難預測遙遠的未來的確切數字是多少，但我可以——我非常有信心公司將繼續成長，而且基於我們現在在市場上看到的需求，未來也是如此。

I would like to go if you -- yes?

我想去，如果你──是嗎？

I just want to say that you know that our internal goal was to reach $7 billion by 2026. We are almost there already. So it's quite obvious that next year, we will be above $7 billion. And as I said, we expect to grow further in '25, in '26. And actually, the main bottleneck right now in order to convert the backlog to revenues into profit is execution, is our ability to produce the stuff.

我只是想說，你知道我們的內部目標是到 2026 年達到 70 億美元。我們已經快到了。因此很明顯，明年我們的銷售額將超過 70 億美元。正如我所說，我們預計在 25 年、26 年將進一步成長。實際上，目前將積壓訂單轉化為收入和利潤的主要瓶頸是執行力，是我們生產產品的能力。

In order to meet this, we are enhancing our capabilities. We're going to inaugurate quite soon a new facility for UAS. We are going to activate the production line in Ramat Beka together with the production line in Ramat Hasharon, the current one that we have in Ramat Hasharon. And we are expanding quite a lot our production lines for communication for other stuff. So there is a growing demand.

為了滿足這個目標，我們正在增強我們的能力。我們很快就會落成一個新的無人機設施。我們將啟動拉馬特貝卡的生產線以及拉馬特哈沙隆的生產線，目前在拉馬特沙隆的生產線。我們正在大量擴大我們的生產線，用於其他產品的通訊。因此需求不斷成長。

The backlog is also -- is quite high and I expect the company to continue to grow in the coming years.

積壓訂單也相當高，我預計該公司在未來幾年將繼續成長。

Well, if I can interpret what you said, you clearly mean that even beyond '26, you expect not only these numbers to be sustainable but you expect steady growth. You don't know of which pace, but you expect the steady growth to continue?

好吧，如果我能解釋你所說的話，你的意思顯然是，即使在 26 年後，你不僅期望這些數字可持續，而且期望穩定增長。您不知道速度是多少，但您預計穩定成長會持續下去嗎？

Yes. I think that in general, the answer is, yes. And I did mention, of course, acquisitions. As you know, acquisition is part of our strategy. We continue -- we know how to merge companies into Elbit.

是的。我認為總的來說，答案是肯定的。當然，我確實提到了收購。如您所知，收購是我們策略的一部分。我們繼續——我們知道如何將公司合併到埃爾比特。

And we are looking intensively for additional acquisitions for the company, we are looking for new technologies, which we missed in our portfolio, and we're also looking for new positions in the international market. What we just mentioned was the organic growth.

我們正在積極為公司尋找更多收購，我們正在尋找我們的投資組合中錯過的新技術，我們也在國際市場上尋找新的職位。我們剛才提到的是有機成長。

The following question actually refers to your internal and external target, which is the 10% non-GAAP operational income. And the question is, we are now in a quite positive environment in terms of conversion, and you still have -- I'm not sure that's optimal, but quite positive value of the hedge given the time that passed. So does it mean that most of the improvement will be through operational income and less -- and we should less expect a dramatic improvement in gross margin?

以下的問題其實是指你的內部和外部目標，也就是10%的非GAAP營業收入。問題是，就轉換而言，我們現在處於一個非常積極的環境中，而且我不確定這是否是最佳的，但考慮到時間的流逝，對沖的價值相當積極。那麼，這是否意味著大部分改善將透過營業收入實現，而我們不應該預期毛利率會大幅改善？

So Ella, it's Kobi. As you know, we are providing now segments from stability and revenues data. And if you go and look and compare the profitability for our land segment between '23 and '22, we will provide next quarter also profitability for 2024 numbers.

艾拉，這是科比。如您所知，我們現在提供穩定性和收入數據的部分。如果您去查看並比較我們的土地部門在 23 年和 22 年之間的盈利能力，我們將提供下個季度 2024 年的盈利能力數據。

And if you compare the same one for Elbit Systems America, you see that in both segments, as we mentioned, we are expecting and our internal goals are to have increased profitability expansion on the basis in land of course, increased activity in the land.

如果你比較埃爾比特系統美國公司的同一個部門，你會發現在這兩個領域，正如我們所提到的，我們期望並且我們的內部目標是在土地的基礎上增加盈利能力的擴張，當然，增加土地上的活動。

You saw, previous quarter, 37% growth in revenue this quarter, 24% growth revenue in the land segment. It means a lot of operational efficiency in the land segment and also huge improvements in Elbit Systems of America. We took many actions in Elbit Systems of America to improve profitability.

您可以看到，上一季的營收成長了 37%，本季的營收成長了 24%，土地部門的營收成長了 24%。這意味著陸域部門的營運效率大幅提高，也意味著美國埃爾比特系統公司的巨大進步。我們在美國埃爾比特系統公司採取了許多行動來提高獲利能力。

So we are very happy with the increased 17% year-over-year sales in Elbit Systems of America for us is a huge success, and we're very happy with this expansion in revenues, which will lead also for expansion in the profitability margin. So those are the two places that we expect increased profitability and increased efficiencies. And the other segments, the other three segments keep rather flat in the profitability numbers while expanding revenue as well.

因此，我們對美國埃爾比特系統公司的銷售額同比增長 17% 感到非常高興，這對我們來說是一個巨大的成功，我們對收入的增長感到非常高興，這也將導致利潤率的擴大。因此，我們預期這兩個地方的獲利能力和效率都會提高。至於其他細分市場，其他三個細分市場的獲利能力保持相當平穩，同時收入也在增加。

If I may add. I would like to say that we are starting to see results to the investments we made in the new ERP system, which have cost us a lot in the past. But right now, the entire company is on one platform. And it's a very good way to reduce cost and to be more efficient. And we are very happy that we have the system operation already today.

如果我可以補充的話。我想說的是，我們在新 ERP 系統上的投資已經開始看到成效，而這些投資過去讓我們付出了巨大的代價。但現在，整個公司都在一個平台上。這是降低成本和提高效率的好方法。我們很高興今天系統已經開始運作。

And we continued to evaluate our portfolio all the time and we look for activities which are less synergetic or less or with low GP. And we are looking for a way to that system, that's something we do regularly, and we continue in parallel of looking for new acquisitions, we are looking into the portfolio all the time to look for elements which are less relevant for us, like we did two years ago with the shortest [scale].

我們一直在持續評估我們的投資組合，並尋找協同作用較低或 GP 較低或較低的活動。我們正在尋找一種通往該系統的方法，這是我們經常做的事情，我們繼續尋找新的收購，我們一直在研究投資組合，尋找與我們不太相關的元素，就像我們兩年前使用最短的時間做過[規模]。

If I may, another question on this topic. You mentioned a few times that you are going and you're actually starting to see the improvements brought by improvement of the contracts some of them CPI-linked and other improvements. And of course, lesser inflation in the United States. So when do you think this impact will be at its peak, the strongest?

如果可以的話，關於這個主題的另一個問題。您多次提到您要去，實際上您已經開始看到合約改進帶來的改進，其中一些與 CPI 掛鉤以及其他改進。當然，美國的通貨膨脹率也較低。那麼你認為這種影響什麼時候會達到高峰、最強呢？

Ella, so we experienced fixed price contracts without escalation closes in, mostly in Elbit Systems of America. We flashed all the fixed price contract with those prices, which were relatively lower profitability in night vision completely. In Spartan, the sonobuoys business, we expect to flush those contracts next year.

艾拉，所以我們經歷了沒有升級的固定價格合同，主要是在美國的埃爾比特系統公司。我們把所有的固定價格合約都閃出了這些價格，完全是夜視獲利能力相對較低的。在聲納浮標業務「斯巴達」中，我們預計明年會清空這些合約。

So most of the fixed price contracts with lower profitability, which happened because of the pricing index escalation in the US are behind us. So this is part of the improvement in Elbit Systems of America.

因此，由於美國價格指數上漲而發生的大多數盈利能力較低的固定價格合約已經成為過去。這是美國埃爾比特系統公司改進的一部分。

[Gain Walman, Annoviz].

[增益沃爾曼，安諾維茲]。

Can you hear me?

你聽得到我嗎？

Sure.

當然。

Yes.

是的。

Congratulations on the good results. I have a question about the CapEx. In the past, maybe in two or three years, it was just a little bit under $200 million a year before acquisitions of another -- other companies. With the recent increase in the backlog and the scale of the operation, do you think you're going to need more CapEx in the coming years?

恭喜取得好成績。我對資本支出有疑問。在過去，也許在兩三年內，每年收購另一家公司的費用略低於 2 億美元。隨著近期積壓訂單和營運規模的增加，您認為未來幾年您是否需要更多資本支出？

Hi, Gain. As we mentioned, we had a very big, as Butzi mentioned before, we had a very big investment in the ERP system, which was around $160 million across several years. And we actually inaugurated the system, the system is fully operational now across the company, also in Elbit Systems of America.

嗨，增益。正如我們所提到的，正如 Butzi 之前提到的，我們對 ERP 系統進行了非常大的投資，幾年來投資額約為 1.6 億美元。我們實際上啟用了該系統，該​​系統現已在整個公司（包括美國的埃爾比特系統公司）全面運作。

So this is behind us. So what we see currently is additional investments in the Ramat Beka facility which will wind down during next year. So we estimate the same level of CapEx investment in 2025 with this year with the winding down of the Ramat Beka investment and the concluding of the investment in the ERP system.

所以這已經在我們身後了。因此，我們目前看到的是對拉馬特貝卡工廠的額外投資，該投資將於明年逐步結束。因此，隨著拉馬特貝卡投資的結束和 ERP 系統投資的結束，我們預期 2025 年的資本支出投資水準與今年相同。

Okay. And just to make sure, are you still with the target of 10% operating profit in the medium-term, maybe 2026 and beyond?

好的。只是為了確定一下，你們是否仍然設定了中期（也許是 2026 年及以後）營業利潤 10% 的目標？

So as we mentioned in the -- even just those are the internal goals, we expect to reach the 10% non-GAAP operational profitability in 2026. And as to our EPS, we expect our internal goals is to reach $9 next year and $12 in 2026. So actually, it's doubling the EPS from 2023 to 2026.

因此，正如我們在報告中所提到的，即使這些只是內部目標，我們也預計到 2026 年將實現 10% 的非 GAAP 營運獲利能力。至於我們的每股盈餘，我們預計我們的內部目標是明年達到 9 美元，2026 年達到 12 美元。所以實際上，從 2023 年到 2026 年，每股盈餘將增加一倍。

(Operator Instructions) David Fingold, Dynamic Funds.

（操作員指示）David Fingold，動態基金。

The laser contract, is that for both the airborne and the land-based version?

雷射合同，機載版和陸基版都有嗎？

No, no. The laser contract you got -- hi, David, good morning. The laser contract we got is a production contract for the ground system.

不，不。你得到的雷射合約——嗨，大衛，早安。我們拿到的雷射合約是地面系統的生產合約。

Okay. So it's only for the ground system when I guess is when Rafael's the systems integrator?

好的。所以，當我猜拉斐爾是系統整合商時，它只適用於地面系統？

That's right. There are quite a lot of system integrators, the order is splitted. They got half of it, we got half of it from the IMOD. And this is -- that's a production order after the majority of the development was concluded. In parallel, we, Elbit, continue to develop the airborne version of the system as a prime contractor.

這是正確的。系統整合商相當多，訂單分散。他們得到了一半，我們從 IMOD 得到了一半。這是——這是大部分開發工作完成後的生產訂單。同時，我們埃爾比特作為主承包商繼續開發該系統的機載版本。

Okay. And then that is -- is that research and development? Or is there -- or there's a development contract?

好的。然後就是──這是研究和開發嗎？或者有——或者有開發合約嗎？

Part of it is a development contract and part of it is our own R&D.

一部分是開發合同，一部分是我們自己的研發。

Okay. Do you disclose the size of the development contract?

好的。您是否透露了開發合約的規模？

No, no, we cannot.

不，不，我們不能。

Stanley Bogen, Bernstein.

史丹利·博根，伯恩斯坦。

Yes. What is the significance of the decline in sales in Europe considering what's going on now in the Ukraine?

是的。考慮到烏克蘭目前的情況，歐洲銷量下降有何意義？

Stanley, thank you for the question. So we -- as you see, we have increased the -- we've almost doubled the sales in Israel. And while we still win contracts in Europe, we keep mostly the production with our production limitations and capacity. We keep the same sales in Europe, mostly if you look at three quarters, there is not a significant decline, a small decline in three quarters of revenue. And while our backlog in Europe is increasing.

史丹利，謝謝你的提問。因此，正如您所見，我們增加了以色列的銷售額幾乎翻了一番。雖然我們仍然贏得了歐洲的合同，但我們的生產大部分都受到了生產限制和產能的限制。我們在歐洲保持相同的銷售額，大多數情況下，如果你看三個季度，沒有顯著下降，三個季度的收入有小幅下降。而我們在歐洲的積壓訂單正在增加。

So we hope with increased production capacity that we're working on, and as Butzi mentioned, our efforts to double the production of the munition sites, which was put for this quarter to be in a position where we can ship quicker and fulfill our backlog in Europe and other places around the world. So just we see the increased backlog in Europe. And of course, we need to supply on this backlog.

因此，我們希望透過提高我們正在努力的產能，正如布齊所提到的那樣，我們努力將彈藥基地的產量翻一番，本季度的彈藥基地產量將能夠更快地發貨並完成我們的積壓訂單在歐洲和世界其他地方。所以我們看到歐洲積壓的情況增加。當然，我們需要供應這些積壓的訂單。

There are no further questions at this time. Before I ask Mr. Machlis to go ahead with his closing statements, I would like to remind participants that a replay of this call will be available two hours after the conference ends. In the US, please call 1 (888) 782-4291. In Israel, please call (03) 925-5900.

目前沒有其他問題。在我請馬赫利斯先生繼續結束演講之前，我想提醒與會者，會議結束兩小時後將重播這次電話會議。在美國，請致電 1 (888) 782-4291。在以色列，請致電 (03) 925-5900。

And internationally, please call 972-3-925-5900. A replay of the call will also be available at the company's website, www.elbitsystems.com. Mr. Machlis, would you like to make your closing statement?

國際請致電 972-3-925-5900。電話會議的重播也將在公司網站 www.elbitsystems.com 上提供。 Machlis 先生，您願意做總結發言嗎？

Thank you. First, I would like to welcome Daniella. Good luck, Daniella.

謝謝。首先，我要歡迎丹妮拉。祝你好運，丹妮拉。

Thank you, very much.

非常感謝。

I would like to thank our employees again for their hard work and dedication. To everyone on the call, thank you for joining us today and for your continued support and interest in our company. Have a good day, and goodbye.

我要再次感謝我們的員工的辛勤工作和奉獻精神。對於參加電話會議的每一個人，感謝您今天加入我們並感謝您對我們公司的持續支持和興趣。祝你有美好的一天，再見。

Thank you. This concludes the Elbit Systems Ltd.'s third-quarter 2024 results conference call. Thank you for your participation. You may go ahead and disconnect.

謝謝。埃爾比特系統有限公司 2024 年第三季業績電話會議至此結束。感謝您的參與。您可以繼續並斷開連線。