Ituran Location and Control Ltd (ITRN) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Ituran's Second Quarter 2023 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 Global Investor Relations at 1 (212) 378-8040 or view it in the news section of the company's website at www.ituran.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?

女士們先生們，感謝你們的支持。歡迎參加 Ituran 2023 年第二季度業績電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在你們應該已經收到了公司的新聞稿。如果您尚未收到，請致電 1 (212) 378-8040 聯繫 Ituran 全球投資者關係部門的投資者關係團隊，或在公司網站 www.ituran.co.il 的新聞部分查看。我現在將把電話轉給 EK 全球投資者關係部的 Kenny Green 先生。格林先生，您想開始嗎？

Thank you, operator. Good day to all of you, and welcome to Ituran's conference call to discuss the second quarter 2023 results. I would like to thank Ituran's management for hosting this conference call. With me on the line today are Mr. Eyal Sheratzky, CEO; Mr. Udi Mizrahi, Deputy CEO and VP Finance; and Mr. Eli Kamer, CFO of Ituran.

謝謝你，接線員。祝大家美好的一天，歡迎參加 Ituran 的電話會議，討論 2023 年第二季度的業績。我要感謝 Ituran 管理層主辦這次電話會議。今天與我通話的有首席執行官 Eyal Sheratzky 先生； Udi Mizrahi 先生，副首席執行官兼財務副總裁；以及 Ituran 首席財務官 Eli Kamer 先生。

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 harbor statement in the press release also covers the contents of this conference call. And with that, Eyal, would you like to begin, please?

Eyal 將首先總結本季度的業績，然後由 Eli 總結財務狀況。然後我們將開始問答環節。我想提醒大家的是，新聞稿中的安全港聲明也涵蓋了本次電話會議的內容。那麼，Eyal，您願意開始嗎？

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 as so far been an excellent year for Ituran. Ituran's business is in strong growth sales with the subscriber base growing twice as fast as we grow in the past years. This jump in growth rate is now clearly benefiting our financial results.

謝謝你，肯尼。歡迎大家參加我們的 2023 年第二季度電話會議。我要感謝您今天加入我們。顯然，我們對 2023 年第二季度的成就感到非常滿意，因為迄今為止對於 Ituran 來說是非常出色的一年。 Ituran 的業務銷售強勁增長，用戶群增長速度是過去幾年增長速度的兩倍。增長率的跳躍現在顯然有利於我們的財務業績。

For the past few quarters, our subscription fees have been constantly at new record levels each quarter and our profits measured in added net income or EBITDA at 4-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 are very reason to expect that the current positive trends will continue throughout 2023 and into 2024 and beyond.

在過去的幾個季度中，我們的訂閱費每個季度都不斷創下新的紀錄水平，而我們以增加淨利潤或 EBITDA 衡量的利潤則達到了 4 年來的新高。正如您可以想像的那樣，我們對我們的成果和取得的進展感到非常滿意。鑑於我們的業務結構方式，擁有超過 200 萬每月付費的核心穩定用戶群，以及由此提供的清晰的長期可見性，我們有充分理由預計當前的積極趨勢將在 2023 年持續到 2023 年。 2024年及以後。

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.

從戰略角度來看，我們的用戶增長強勁，淨增用戶47,000名，其中45,000名來自售後市場，2,000名來自OEM。正如我所提到的，這種強勁的訂閱者增長現在已經反映在我們創紀錄的訂閱收入中。儘管 2023 年美元走強導致貨幣逆風，但情況仍然如此。

Q2 subscription revenue grew 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 financing business, which are performing well and acting as growth engines. They are one of the main reasons that our business continued to grow well.

第二季度訂閱收入同比增長 13%，按當地貨幣計算增長 17%，這自然化了匯率對我們增長的影響。過去幾年，我們進入了一些新的垂直領域，比如融資業務，這些領域表現良好，成為增長引擎。它們是我們業務持續良好增長的主要原因之一。

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 aim to broaden the Brazilian car ownership market by facilitating the credit approval for automatic financing with Ituran Telematics Services and Santander's financing at attractive rates and credit insurance.

本季度，我們宣布巴西子公司與桑坦德銀行建立合作夥伴關係，鞏固了我們在汽車融資市場的地位。該戰略聯盟旨在通過 Ituran 遠程信息處理服務和桑坦德銀行以有吸引力的利率和信用保險進行自動融資的信貸審批，從而擴大巴西汽車擁有市場。

These new deals demonstrate 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.

這些新交易表明，這個金融垂直領域表現良好，並支持我們的整體用戶增長。此外，我們看到了更大的潛力，並且希望與現有和其他金融客戶一起覆蓋更多市場和地區。就以色列市場而言，由於整體宏觀經濟的限制，我們看到盜竊率大幅上升。

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 contributed to an increase in car theft rates. This is ultimately leading to an increase in demand for our services from insurance companies.

由於我們多年來在被盜車輛追回領域的良好表現，增加了保險公司使用我們服務的需求。雖然以色列的情況非常普遍，但我們在整個拉丁美洲也看到了類似的趨勢，總體經濟環境導致汽車盜竊率上升。這最終導致保險公司對我們服務的需求增加。

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 on stolen vehicle recovery for the motorcycle market, which is a new sector for us. In 2022, only, there were an estimated record of 5.4 million motorcycles sold in Latin America and we believe our new solution presents a very attractive proposition for this sector.

這也為我們的業務在面對經濟放緩時提供了一些防禦。最後，我們在拉丁美洲推出了一款新產品，專注於摩托車市場被盜車輛追回的連接，這對我們來說是一個新領域。僅 2022 年，拉丁美洲的摩托車銷量估計就達到了 540 萬輛，我們相信我們的新解決方案對該行業提出了非常有吸引力的主張。

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 a record year for Ituran in all respects.

我們已經看到製造商和保險公司的興趣，並且我們已經在進行討論。我們看到這一新產品和服務在未來幾年在該地區的巨大潛力。總而言之，我們對本季度的業績感到非常滿意，2023 年將成為 Ituran 在各方面創紀錄的一年。

Solid performance in our traditional aftermarket business as well as recovery in the OEM business and especially the growth engines. We've seen that 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 found the theft rates tend to increase in economic downturns, increasing the demand for our services and beyond it.

我們的傳統售後市場業務表現穩健，主機廠業務尤其是增長引擎也有所復甦。我們看到，在過去的幾年裡，所有這些都推動了我們強勁的用戶增長和創紀錄的收入。雖然我們繼續關注有關未來全球經濟可能放緩的討論，但從歷史上看，我們發現在經濟低迷時期盜竊率往往會上升，從而增加了對我們服務及其他服務的需求。

Our 2.2 million subscriber base, paying us on an ongoing monthly basis, gives us significant results in our economic environment. Looking ahead, we expected 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 the positive trend will continue throughout 2023 and beyond. And with that, I hand over to Eli. Eli, please go ahead.

我們的 220 萬訂閱者每月持續向我們付費，這為我們的經濟環境帶來了顯著的成果。展望未來，我們預計，由於我們業務固有的運營槓桿，我們最近加速的用戶增長將繼續轉化為收入的增加和盈利能力的更快增長。我們對未來幾個季度感到興奮，並預計這一積極趨勢將持續到 2023 年及以後。就這樣，我把任務交給了伊萊。伊萊，請繼續。

Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed results that we issued in the press release earlier today. Revenues for the second quarter of 2023 were $28.6 million (sic) [$81.6 million], an 11% increase compared with revenues of $73.4 million last year. In local currency, the year-over-year growth was 15%.

謝謝，埃亞爾。我將提供財務業績的簡短摘要。您可以在今天早些時候的新聞稿中找到我們發布的更詳細的結果。 2023 年第二季度的收入為 2860 萬美元（原文如此）[8160 萬美元]，比去年的 7340 萬美元收入增長 11%。以當地貨幣計算，同比增長 15%。

Second quarter revenues from subscription fees were $59.2 million, an increase of 13% over the second quarter of 2022 revenues. In local currency, the year-over-year growth was 17%. Prior base amounted to 2,162,000 as of June 30, 2023. This represents an increase of 47,000 net over that of the end of the period quarter and an increase of 190,000 year-over-year. During the quarter, there was an increase of 45,000 in the aftermarket subscriber base and an increase of 2,000 in the OEM subscriber base.

第二季度訂閱費收入為 5920 萬美元，比 2022 年第二季度收入增長 13%。以當地貨幣計算，同比增長 17%。截至 2023 年 6 月 30 日，前期基數為 2,162,000 人。這意味著比本季度末淨增加 47,000 人，同比增加 190,000 人。本季度，售後市場用戶群增加了 45,000 名，OEM 用戶群增加了 2,000 名。

Second quarter product revenue were $22.5 million, an increase of 7% compared with that of the second quarter of 2022. The geographic breakdown of revenues in the second quarter was as follows: Israel, 48%; Brazil, 26%; rest of world, 26%. EBITDA for the quarter was $21.8 million or 26.7% of revenues, an increase of 12% compared with EBITDA of $19.4 million or 26.5% of revenue in the second quarter of last year.

第二季度產品收入為2250萬美元，較2022年第二季度增長7%。第二季度收入地域分佈如下：以色列，48%；巴西，26%；世界其他地區，26%。本季度 EBITDA 為 2180 萬美元，佔收入的 26.7%，比去年第二季度的 EBITDA 1940 萬美元，佔收入的 26.5% 增長了 12%。

In local currencies, the year-over-year growth was 15%. Net income for the second quarter was $12.2 million or 15% of revenue or diluted earnings per share of $0.61 an increase of 40% compared to $8.7 million or 11.9% of revenues or diluted earnings per share of $0.43 in the second quarter of last year. In local currency, the year-over-year growth was 44%.

以當地貨幣計算，同比增長 15%。第二季度淨利潤為1,220 萬美元，佔收入的15%，或攤薄後每股收益0.61 美元，較去年第二季度的870 萬美元，佔收入或攤薄後每股收益0.43 美元的11.9% 增長40 %。以當地貨幣計算，同比增長 44%。

Cash flow from operations for the second quarter of 2023, was $17.5 million. On the balance sheet, as of June 30, 2023, the company had cash, including marketable securities of $34.5 million and a debt of $4.5 million, amounting to a net cash of $30 million. This is compared with cash, including marketable securities, of $28.2 million and a debt of $12.2 million, amounting to a net cash of $16 million as of December 31, 2022.

2023 年第二季度運營現金流為 1750 萬美元。截至2023年6月30日，資產負債表上，該公司擁有現金，包括3450萬美元的有價證券和450萬美元的債務，相當於淨現金3000萬美元。相比之下，截至 2022 年 12 月 31 日，現金（包括有價證券）為 2820 萬美元，債務為 1220 萬美元，淨現金為 1600 萬美元。

For the second quarter of 2023, a dividend of $3 million was declared. In the second quarter, under our share buyback program, Ituran purchased -- 155,138 (sic) [156,138] shares for a total of $3.5 million. Share repurchases were funded by available cash and repurchases of Ituran's ordinary shares were made based on SEC Rule 10b-18. And with that, I'd like to open the call for a question-and-answer session. Operator?

2023年第二季度宣布派發股息300萬美元。第二季度，根據我們的股票回購計劃，Ituran 購買了 155,138（原文如此）[156,138] 股，總價為 350 萬美元。股票回購由可用現金提供資金，並且 Ituran 普通股的回購是根據 SEC 規則 10b-18 進行的。接下來，我想開始問答環節。操作員？

(Operator Instructions) The first question is from Chris Reimer of Barclays.

（操作員說明）第一個問題來自巴克萊銀行的 Chris Reimer。

Congratulations on the strong results. You mentioned in the past operational leverage, and I was wondering how much expansion is possible under the current operational conditions you have right now?

祝賀取得了優異的成績。您剛才提到了經營槓桿，我想知道按照您現在的經營條件，可以擴張到多少？

Practically, when you look on the numbers today, so we actually increased from 20% to 20.4% in a very short period, and we expect that this trend will continue. This is actually what the Ituran revenue model allow us to do in the future.

實際上，當你看今天的數字時，我們實際上在很短的時間內從 20% 增加到了 20.4%，並且我們預計這種趨勢將持續下去。這實際上就是 Ituran 收入模式讓我們未來可以做的事情。

Okay. And in your view, what is underpinning the consistency subscriber growth?

好的。在您看來，是什麼支撐著訂閱用戶的持續增長？

Can you repeat it regarding subscribers?

關於訂戶，您能重複一下嗎？

Chris, can you repeat your question, please?

克里斯，你能重複一下你的問題嗎？

Yes, I'm sorry. In your view, what is underpinning the consistent subscriber growth?

是的，對不起。您認為是什麼支撐用戶持續增長？

Actually, I think that generally, I said it. So first of all, the traditional segments, which are very depend on cost of rate. It's in the last quarters. And as we see, it's in a growth mode, which create a strong request from, I would say, insurance companies as well as the -- even the car owner needs to secure the car more and more because it's [hear] them a lot. So this is from something that it depends on the economy as well as the financing market, which we penetrate just recently. And we see that after this penetration, other players in Brazil as well as in other countries in Latin America are interesting in this solution.

事實上，我認為一般來說，我都這麼說了。首先，傳統細分市場非常依賴於費率成本。已經是最後幾個季度了正如我們所看到的，它處於增長模式，這對保險公司提出了強烈的要求，甚至車主也需要越來越多地保護汽車，因為他們經常聽到他們的聲音。所以這取決於經濟以及我們最近才滲透的融資市場。我們看到，在這種滲透之後，巴西以及拉丁美洲其他國家的其他參與者對這個解決方案感興趣。

And of course, there is always the regular growth drivers, such as our brand is the strongest one in the region, very high credibility from B2B and B2C customers. So we have a good feedback from the market plus new segments that we entered recently. We believe that this will demonstrate or will lead to continue the growth of the subscribers.

當然，總是有定期的增長動力，比如我們的品牌是該地區最強的品牌，B2B 和 B2C 客戶的信譽非常高。因此，我們從市場以及我們最近進入的新細分市場獲得了良好的反饋。我們相信這將證明或將導致訂戶的持續增長。

The next question is from Josh (inaudible) of (inaudible). Please go ahead.

下一個問題來自（聽不清）的 Josh（聽不清）。請繼續。

Josh, we don't hear you, but you can go ahead and ask your question.

喬什，我們聽不到你的聲音，但你可以繼續問你的問題。

Sorry, my bad. I was on mute. Good to see this terrific quarter, guys. I wondered whether or not you could provide any color on what's happening with Bringg? I mean I know it's a passive private investment, but I was curious if you get any color that you want to provide on what's going on with that investment?

對不起這是我的錯。我當時處於靜音狀態。伙計們，很高興看到這個出色的季度。我想知道你能否提供有關 Bringg 發生的事情的任何信息？我的意思是，我知道這是一項被動的私人投資，但我很好奇您是否能就該投資的進展情況提供任何信息？

Practically, Bringg is going quite well with its business plan, and let's call it, internal and privately all projections. I think that we had -- we did the right move when we did the last round about 1 year, 1.5 years ago, before the -- let's call it before the changes in the stock market and the financial markets and the company did the right adjustment to use those proceeds for more years than we thought at the beginning because we have to adjust the company to the -- again, to the financial markets. But from the operational side of view, the company is really provide the results as it's -- well, of course, I want to remind all of you that it's something that it's only on our balance sheet, and it's 0 value in our balance sheet. So we don't influence anything in our P&L. And I would say that it's hiding assets, which we count that it's in the future, of course, will provide profits.

實際上，Bringg 的商業計劃進展順利，我們可以稱之為內部和私下的所有預測。我認為，大約 1 年、1.5 年前，我們在股票市場和金融市場發生變化之前進行最後一輪投資時，我們採取了正確的舉措，公司採取了正確的舉措。調整後使用這些收益的時間比我們一開始想像的要長，因為我們必須使公司適應金融市場。但從運營角度來看，公司確實提供了結果——當然，我想提醒大家，這只是在我們的資產負債表上，而且在我們的資產負債表中是 0 值。所以我們不會影響損益表中的任何內容。我想說的是，它隱藏了資產，我們認為它在未來當然會提供利潤。

Okay. Well, looking forward to seeing that thing getting monetized at some point in the future. The second question I had was couple of years back, you had levered up the balance sheet slightly, which was unlike you guys historically because you've been pretty conservative management team, in order to buy Road Track. And over the years, you've been paying back your debt. Your debt is -- your gross debt is almost 0. Your net debt has been positive for some time. And I'm very thankful for the buybacks and the dividends. But I'm curious on how the plans may or may not change going forward, given the war chest of cash that you have? Is it going to be just more of the same and an occasional small early-stage VC investment in Israeli companies that relate to your business. So can you just give us a color on what your plans are over the next couple of years?

好的。好吧，期待在未來的某個時候看到這個東西被貨幣化。我的第二個問題是幾年前，你們稍微提高了資產負債表，這與你們歷史上的不同，因為你們的管理團隊非常保守，為了購買 Road Track。多年來，您一直在償還債務。您的債務是——您的總債務幾乎為零。您的淨債務已經有一段時間為正值了。我非常感謝回購和股息。但我很好奇，鑑於你們擁有大量現金，這些計劃未來可能會或可能不會改變？是否會更加相同，並且偶爾對與您的業務相關的以色列公司進行小型早期風險投資？那麼您能給我們介紹一下您未來幾年的計劃嗎？

First of all, the investment in the small, as you said, we see our start-ups, which is linked to potential systems or for mobility market, It's something that has nothing with the loan that we took because we do it. It's -- let's say, on an arrogant way, it's not a material cash that we use. The main cash needs that we did was to, as you said, to acquire Road Track. Now it's the last payment of our loan after these 5 years, and simultaneity, of course, increase our cash flow position and cash flow generation.

首先，正如你所說，對小型企業的投資，我們看到我們的初創企業，它與潛在的系統或移動市場相關，這與我們所獲得的貸款無關，因為我們這樣做。可以傲慢地說，這不是我們使用的物質現金。正如您所說，我們的主要現金需求是收購 Road Track。現在這是我們五年後最後一次還款，同時性當然會增加我們的現金流狀況和現金流生成。

So actually, as we did in the past, we have not any intent to keep the money for nothing in the bank. So first of all, we will do our best to find -- to use the money that we generate for growth, which means most of the time for acquisition, for partnerships and things like this. If we find it, this is the first priority. But this is not something easy. We are conservative. We don't want just to spend money and say that we did. By the way, regard Road Track, today, we are very happy that we did it. The contribution of Road Track today it's called Ituran. It's fully emerged to the business and integrated and we create a synergy and everything now is as we sought to do. And since we did it on a conservative way, it succeeded. If we find something that will be good for our inorganic growth, we will do it first. Of course, if not, or meanwhile, as long as we generate cash, of course, we will let all our shareholders, of course, to benefit from this cash flow.

所以實際上，就像我們過去所做的那樣，我們無意將錢無償地存入銀行。因此，首先，我們將盡最大努力找到——將我們產生的資金用於增長，這意味著大部分時間用於收購、合作夥伴關係和類似的事情。如果我們找到了，這是第一要務。但這並不是一件容易的事。我們很保守。我們不想只是花錢就說我們做到了。順便說一句，關於Road Track，今天我們很高興我們做到了。今天，Road Track 的貢獻被稱為 Ituran。它已完全融入業務並整合，我們創造了協同效應，現在一切都如我們所追求的那樣。由於我們以保守的方式做到了這一點，所以它成功了。如果我們發現有利於我們無機生長的事情，我們會首先去做。當然，如果沒有，或者同時，只要我們產生現金，當然，我們會讓我們所有的股東，當然，從這個現金流中受益。

As -- by the way, we did simultaneity with the debt because if you can, for example, take this quarter, you see that almost $7 million went back to the shareholders or buy dividend or buyback. And of course, if we will generate more cash and we will not need it for growth, we will or at least I will recommend our Board to increase this dividend or buyback, of course, depend on the situation. But we will not keep the money. We always think how to grow with this money.

順便說一句，我們與債務同時進行，因為如果你可以，例如，以本季度為例，你會發現近 700 萬美元回到了股東或購買股息或回購。當然，如果我們將產生更多現金並且我們不需要它來實現增長，我們將或至少我將建議我們的董事會增加股息或回購，當然，這取決於具體情況。但我們不會保留這筆錢。我們總是思考如何利用這筆錢實現增長。

(Operator Instructions) The next question is from Abba Horovitz from Old School Partners.

（操作員說明）下一個問題來自 Old School Partners 的 Abba Horovitz。

And congratulations on a real milestone. This is quite an amazing quarter relative to the last couple of years. I wanted to really drill down on the motor cycle opportunity. And if I may ask, how are you selling anything to the motorcycle market? And where -- how rapidly do you see this being implemented? And how meaningful can it be to the overall business?

祝賀您實現了真正的里程碑。與過去幾年相比，這是一個相當驚人的季度。我想真正深入研究摩托車的機會。如果我可以問的話，你們如何向摩托車市場銷售任何東西？您認為這項技術在哪裡、以多快的速度實施？它對整體業務有何意義？

Okay. So I will divide it for the two different markets. One is the Israeli market where we, for a few years already sell a product and service for motorcycles. But we have to understand that in Israel, which is different than in Latin America, the motorcycle trend is quite low, meaning most of the people buy cars than expensive motorcycle. So the market here in Israel, for us, is a niche. I mean, we do it with the insurance company sometimes or with some dealers. But what we realized after we cover the car environment in Latin America, and again, we looked for additional growth segments. We understood that, for example, in Brazil, cars and motorcycle ratio is very not similar, but almost similar. Millions of motorcycle being sell every year in -- only in Brazil. The situation is that -- and this is all around the world.

好的。所以我會將其分為兩個不同的市場。其中一個是以色列市場，幾年來我們已經在那裡銷售摩托車產品和服務。但我們必須明白，與拉丁美洲不同，在以色列，摩托車趨勢相當低，這意味著大多數人購買汽車而不是昂貴的摩托車。因此，對我們來說，以色列市場是一個利基市場。我的意思是，我們有時會與保險公司或一些經銷商合作。但在我們報導了拉丁美洲的汽車環境後，我們意識到，我們再次尋找其他增長領域。我們了解到，例如在巴西，汽車和摩托車的比例很不相似，但幾乎相似。僅在巴西，每年就有數百萬輛摩托車售出。情況是這樣的——全世界都是這樣。

It's very difficult to ensure motorcycles. It's more risky to the insurance companies and it's the nature of motorcycle. So the prices of insurance are very high. But on the other hand, it's a segment which insurance company don't want to believe -- don't want to leave. And on the other hand, the motorcycle dealers and producers want to find a solution for their customers. So we start, of course, future of this market.

保證摩托車的安全是非常困難的。這對保險公司來說風險更大，這是摩托車的本質。所以保險的價格非常高。但另一方面，這是保險公司不願相信、不願離開的部分。另一方面，摩托車經銷商和生產商希望為他們的客戶找到解決方案。當然，我們首先要討論這個市場的未來。

And as we did with the finance, as we did with the fleet management in the past, we were the first to build or to develop internally a unit, which is very, very customized for a motorcycle driver and a motor cycle, which included application include SVR, includes other sensors, which will create benefit to the drivers. And we went with this to the market, and we see a lot of traction. Now as every segment, when we start, if I'm not saying that tomorrow, it will be material because we have already 2.2 million subscribers. It takes time to show something which will be more material for, let's say, to announce it and to see it in the results. But since we believe that this can be something material, something substance in the coming future, this is the reason why I decided to share it today to understand that we found in other segments, we do our best to penetrate and to lead this segment, specifically in Brazil and in Latin America.

正如我們在財務方面所做的那樣，正如我們過去在車隊管理方面所做的那樣，我們是第一個在內部構建或開發一個單元的公司，該單元是為摩托車駕駛員和摩托車量身定制的，其中包括應用程序包括SVR，包括其他傳感器，這將為駕駛員創造利益。我們將其推向市場，並看到了很大的吸引力。現在，對於每個部分，當我們開始時，如果我明天不這麼說，那將是重要的，因為我們已經有 220 萬訂閱者。展示一些更重要的東西需要時間，比如說，宣布它並在結果中看到它。但因為我們相信這在未來可能是物質的、實質的東西，這就是為什麼我今天決定分享它，以了解我們在其他細分市場中發現的情況，我們盡最大努力滲透並領導這個細分市場，特別是在巴西和拉丁美洲。

And really, I can't now talk about numbers or who are the potential customers in terms of manufacturer or insurance companies. But we really feel that it will happen and there is a traction. And this is I believe, will be more substance in the coming or in the future years.

事實上，我現在無法談論數字或誰是製造商或保險公司的潛在客戶。但我們確實覺得這會發生並且有動力。我相信，這將在未來或未來幾年變得更加實質性。

Okay. Would this mean that using this product now an insurance company, do be more willing to provide a cheaper insurance alternative. And that's what this product is doing? Or would it even would someone get this product without the insurance even?

好的。這是否意味著現在使用該產品的保險公司確實更願意提供更便宜的保險替代方案。這就是這個產品的作用嗎？或者甚至有人會在沒有保險的情況下購買該產品嗎？

Okay. So some of the -- this segment I would divide it to two. In one hand, it's insurance companies that, of course, with the right solution, they will be able to join, let's call it, our ICS Ituran Com Seguro process also for motorcycles. And also in Brazil, especially, it's very, very common to rent motorcycles and rental companies and the manufacturers actually spread motorcycles around the country for renting, whether it's how are you renting like ride kind of ridesharing or rented for like leasing. So in that case, those dealers and manufacturers also interesting in a solution to, I would say, to secure their assets, their assets, they rent it. So they want a solution because a financial -- a high financial damage is when those motorcycle being still.

好的。所以，我會把這個部分分成兩部分。一方面，保險公司當然可以通過正確的解決方案加入我們也適用於摩托車的 ICS Ituran Com Seguro 流程。尤其是在巴西，租賃摩托車和租賃公司非常非常普遍，製造商實際上在全國范圍內傳播摩托車進行租賃，無論是像乘車共享一樣租賃還是像租賃一樣租賃。因此，在這種情況下，那些經銷商和製造商也對解決方案感興趣，我想說，為了保護他們的資產，他們的資產，他們出租它。所以他們想要一個解決方案，因為當這些摩托車靜止不動時，會造成巨大的經濟損失。

Okay. Okay. And would it be safe to assume that you'll be able to leverage the monitoring part of the business from the same infrastructure that you have currently?

好的。好的。是否可以安全地假設您將能夠從當前擁有的相同基礎設施中利用業務的監控部分？

Of course. Everything we do, by the way. At the end of the day, I would say that Ituran today it's a black box first. This black box can get any frame where we want. So when we find a segment, we take the same black box, give it to our R&D people, and then they develop the frameware, which will allow this black box to be offered to other segments. So it's like modules. So in terms of technology, we use always the same technology. That's why we can leverage it. This is why we can create operating leverage for those technology.

當然。順便說一句，我們所做的一切。歸根結底，我想說今天的 Ituran 首先是一個黑匣子。這個黑盒子可以得到我們想要的任何幀。因此，當我們找到一個細分市場時，我們將相同的黑匣子交給我們的研發人員，然後他們開發框架，這將使這個黑匣子可以提供給其他細分市場。所以它就像模塊。所以在技術方面，我們總是使用相同的技術。這就是為什麼我們可以利用它。這就是為什麼我們可以為這些技術創造運營槓桿。

On the other hand, in the service side, when we talk about SVR, this is our specialty. But when we talk about other services, of course, that we do on the job train and we learn what is the needs of the market, but we are a service company. So for us, it's something that we must be excellent. So in the end of the day, of course, we use and integrate always our current infrastructure.

另一方面，在服務方面，當我們談論SVR時，這是我們的專長。但是，當我們談論其他服務時，當然，我們在工作培訓中所做的事情，我們了解市場的需求是什麼，但我們是一家服務公司。所以對於我們來說，這是我們必須要優秀的事情。因此，最終，我們當然會始終使用和集成當前的基礎設施。

Okay. And is it the same price as a car would be? Or is it cheaper than a car?

好的。它的價格與汽車相同嗎？還是比汽車便宜？

It will be already a cheaper product. The installation, which is part of the cost, it's also cheaper because the nature of the motorcycles for installation is easier than when you are cutting a car to install a unit. But in terms of the service side, it depends on what type of services. It's the same as the car. If it's only SVR, whether it includes application, whether you want, for example, as you know, Ituran is -- or you don't know, I will remind. Three years ago, we acquired a company in Brazil, which is a company that developed car sharing and riding, billing and managing solution. So after that, we now offer it as a part of our black box. So in that case, when we talk about renting motorcycles or renting cars, for example, with this technology, we charge more, depends what is the service that the customer needs.

它已經是一種更便宜的產品。安裝是成本的一​​部分，它也更便宜，因為摩托車的安裝性質比切割汽車來安裝單元更容易。但就服務端而言，就看什麼類型的服務了。這和汽車是一樣的。如果只是SVR，無論它是否包括應用程序，無論你是否想要，例如，如你所知，Ituran是——或者你不知道，我會提醒。三年前，我們收購了巴西的一家公司，這是一家開發汽車共享和乘車、計費和管理解決方案的公司。因此，在那之後，我們現在將其作為黑匣子的一部分提供。所以在這種情況下，當我們談論租賃摩托車或租賃汽車時，例如，使用這項技術，我們收取更多費用，取決於客戶需要什麼服務。

The next question is from (inaudible) of (inaudible).

下一個問題來自（聽不清）或（聽不清）。

So you talked in the past, I don't know if you talked about it on this call about reestablishing associated long term. reaccelerating the business you're doing with OEMs in Brazil. And I wondered if there was any additional progress worth noting.

所以你過去談到過，我不知道你在這次電話會議上是否談到過重建相關的長期關係。重新加速您與巴西 OEM 廠商的業務發展。我想知道是否還有其他值得注意的進展。

Actually, OEM and manufacture is something that the cycle is usually much longer because all the validation that we have to do in every country, by the way, has to approve from (inaudible) validation, but I just can say that we are working or we believe that we will succeed to exceed, to expand our relationship with the current car manufacturers to other geographies, of course, mainly at the near future in Latin America to other countries. I don't know yet to say which country, what will be a specific contract and quantities. But I know to tell that we see a traction we see and discuss it. And I believe, or at least I want to believe that we will be able to expand it to other countries based on the OEM segment.

實際上，OEM 和製造的周期通常要長得多，因為順便說一句，我們必須在每個國家/地區進行的所有驗證都必須獲得（聽不清）驗證的批准，但我只能說我們正在工作或我們相信，我們將成功地超越，將我們與當前汽車製造商的關係擴展到其他地區，當然，主要是在不久的將來拉丁美洲到其他國家。我還不知道是哪個國家、具體合同和數量。但我知道要告訴大家的是，我們看到了我們看到的牽引力並進行了討論。我相信，或者至少我願意相信，我們將能夠基於 OEM 細分市場將其擴展到其他國家。

Okay. And what about the progress you're making with financial institutions in Brazil for the sub-prime customer? I'm trying to get my hands around how material that opportunity is in the years ahead? And I know we're still in the early part of developing that market. But I'm just trying to understand how big that market really can be both in Brazil and elsewhere for trying to monitor the sub-prime customer for insurance companies and what have you?

好的。您與巴西金融機構在次級貸款客戶方面取得的進展如何？我正在嘗試了解這個機會在未來幾年有多麼重要？我知道我們仍處於開發該市場的早期階段。但我只是想了解，在巴西和其他地方，為保險公司監控次級貸款客戶的市場到底有多大，你們有什麼？

So currently or a month ago, we report about, I think, a very luxury contract that we did with one of the largest banks in the world, Santander in Brazil. Santander on an exclusive basis will finance cars, and we talk about very important customer base potential through Santander and this is regard the Brazilian market currently. Of course, as we know, Santander has offices all around Latin America. So I believe I want to use this contract to leverage out of Brazil. But for the time now, only this contract is very much mutual -- very immaterial for us.

因此，目前或一個月前，我們報導了我們與世界上最大的銀行之一巴西桑坦德銀行簽訂的一份非常豪華的合同。桑坦德銀行將獨家為汽車提供融資，我們通過桑坦德銀行談論非常重要的客戶群潛力，這就是目前巴西市場的情況。當然，據我們所知，桑坦德銀行在拉丁美洲各地都設有辦事處。所以我相信我想利用這份合約來槓桿化巴西。但就目前而言，只有這份合同是相互的——對我們來說非常無關緊要。

And of course, when -- what we see, when I say attraction, when other banks or other finance companies see or learn about the contract that we did with Santander, we see that they, of course, want to find a way to copy it. Regard the Brazilian market, the contract with a commercial bank is under exclusivity from both sides. So we will have -- or we will regard Brazil in the coming years. We will have to, of course, find other kind of finance companies, but not a commercial bank. Just to mention that Santander in Brazil is the largest of this segment anyway. This is why we decide to go on a [customer] basis. And of course, it's open -- I think it's open segment for other banks and other places in the world.

當然，當我們看到，當我說吸引力時，當其他銀行或其他金融公司看到或了解我們與桑坦德銀行簽訂的合同時，我們看到他們當然想要找到一種方法來複製它。就巴西市場而言，與商業銀行的合同是雙方排他性的。因此，我們將在未來幾年關注巴西。當然，我們必須找到其他類型的金融公司，但不能是商業銀行。順便提一下，巴西的桑坦德銀行是這一領域中最大的。這就是為什麼我們決定以[客戶]為基礎。當然，它是開放的——我認為這對於世界上其他銀行和其他地方來說是開放的。

The next question is from Fred Foulkes of Boston University.

下一個問題來自波士頓大學的弗雷德·福克斯。

Congratulations on an outstanding quarter and very informative call. I just was curious, given all the challenges and troubles in your country right now, is that having any impact on worker productivity recruiting, retention, et cetera?

祝賀您度過了一個出色的季度和內容豐富的電話會議。我只是很好奇，考慮到貴國目前面臨的所有挑戰和麻煩，這對工人生產力、招聘、保留等有什麼影響嗎？

Actually, no. Actually, no. I think that the situation here in Israel is mainly from the political side. I would say the -- it's not influenced directly yet. And as I said, Ituran also historically, when the economy is in a bad shape. So unfortunately, the violence in the car theft rate increasing. And in this situation, the request for our solutions is increasing and the needs become much more strong. So I'm not -- currently, it's not influenced, but I'm not expecting that it will influence. But if you come to Tel Aviv, will feel that nothing happened by the way. But the press is different than the life. But yes, we have a challenge now here.

事實上，沒有。事實上，沒有。我認為以色列目前的情況主要是來自政治方面。我想說的是——它還沒有受到直接影響。正如我所說，伊圖蘭在歷史上也是如此，當經濟狀況不佳時。因此不幸的是，暴力盜竊汽車的比率不斷增加。在這種情況下，對我們解決方案的要求越來越高，需求也越來越強烈。所以我不——目前，它沒有受到影響，但我不認為它會產生影響。但如果你來到特拉維夫，就會覺得順便什麼都沒發生。但媒體與生活不同。但是，是的，我們現在面臨著挑戰。

The next question is from Charles Elliott of IBI.

下一個問題來自 IBI 的 Charles Elliott。

I'd like to ask about a deal that you announced in July. With 99 app ride share company acquired by Didi Chuxing, where you will provide SVR on the BYD models. And it sounds like a small deal in itself, but I wondered if it could be pretty significant because this would be your Ituran's first step into being a platform for car sharing.

我想問一下你們七月份宣布的一項交易。通過被滴滴出行收購的99應用乘車公司，您將為比亞迪車型提供SVR。這聽起來像是一件小事，但我想知道這是否會非常重要，因為這將是 Ituran 邁向汽車共享平台的第一步。

Just from a carriers point, what did you mean where did we report it?

從運營商的角度來看，我們在哪里報告的是什麼意思？

It was in the Brazilian newspaper, I think, was on our 28th -- 28th of July.

我記得那是在我們 7 月 28 日至 28 日的巴西報紙上。

Okay. We didn't -- of course, we didn't report it from for the NASDAQ and SEC aspects because it's not a material deal currently. But you're right. BYD launched their brand in Brazil, together with us. And what they did, it was a kind of a mutual, I would say, mutual marketing way. As I said, BYD spread cars around Sao Paulo in order to rent it on an hourly or daily rent, and they need our units in order to control it, to bill it and of course, to secure it. So we are their partners for Brazil. But at this stage, it was, I would say, BYD marketing or BYD penetration program. So it's not yet something that can -- we can say that it will lead, for example, to an OEM deal in Brazil, but we've been choosing as their partners for this specific campaign. For the future, let's see.

好的。我們沒有——當然，我們沒有在納斯達克和美國證券交易委員會方面進行報告，因為目前這不是一項重大交易。但你是對的。比亞迪與我們一起在巴西推出了他們的品牌。他們所做的，我想說，這是一種相互的營銷方式。正如我所說，比亞迪在聖保羅各地散佈汽車，以便按小時或日租出租，他們需要我們的車輛來控制它、為其計費，當然還有確保它的安全。所以我們是他們在巴西的合作夥伴。但在這個階段，我想說，這是比亞迪營銷或比亞迪滲透計劃。因此，這還不是可以的——我們可以說，這將導致，例如，在巴西達成 OEM 協議，但我們一直在選擇作為他們的合作夥伴來開展這項特定的活動。對於未來，讓我們拭目以待。

Of course, it's very luxury, again. Very luxury transaction, a very luxury relationship because we know that BYD is now in a very strong penetration also to Latin America, but it's just started. And as I said, OEM deals is something which has a long cycle. But we also think for the long way and for the marathon and for the long future. So we started with this. We have nothing to announce now. But for the future, we will see what happen.

當然，這又是非常奢侈的。非常豪華的交易，非常豪華的關係，因為我們知道比亞迪現在對拉丁美洲的滲透也非常強大，但才剛剛開始。正如我所說，OEM 交易是一個週期很長的事情。但我們也著眼於長遠、馬拉松和長遠的未來。所以我們就從這個開始。我們現在沒有什麼要宣布的。但對於未來，我們會看看會發生什麼。

There are no further questions at this time. Before I ask Mr. Sheratzky to go ahead with his closing statement, I would like to remind all participants that a replay of this call will be available tomorrow on Ituran's website at www.ituran.co.il. Mr. Sheratzky, would you like to make your concluding statement?

目前沒有其他問題。在我請 Sheratzky 先生繼續其結束語之前，我想提醒所有與會者，明天將在 Ituran 網站 www.ituran.co.il 上重播本次電話會議。 Sheratzky先生，您願意做一下總結髮言嗎？

Yes. On behalf of our management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. We ought to be speaking with some of you over the coming quarter. And if you are interested in meeting or speaking with us, please feel free to reach out to our Investor Relations team. And with that, we end our call. Thank you, and have a good day.

是的。我謹代表 Ituran 管理層感謝您，我們的股東，感謝您對我們業務的持續關注和長期支持。我們應該在下個季度與你們中的一些人交談。如果您有興趣與我們會面或交談，請隨時聯繫我們的投資者關係團隊。至此，我們結束通話。謝謝你，有一個美好的一天。

Thank you. This concludes Ituran's Second Quarter 2023 Results Conference Call. Thank you for your participation. You may now go ahead and disconnect.

謝謝。 Ituran 2023 年第二季度業績電話會議至此結束。感謝您的參與。您現在可以繼續並斷開連接。