Forward looking statements and non-GAAP measures Caution Regarding - - PowerPoint PPT Presentation

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Forward looking statements and non-GAAP measures Caution Regarding - - PowerPoint PPT Presentation

Forward looking statements and non-GAAP measures Caution Regarding Forward-Looking Statements This presentation contains forward-looking statements and forward-looking information within the meaning of applicable US and Canadian securities


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Forward looking statements and non-GAAP measures

Caution Regarding Forward-Looking Statements This presentation contains forward-looking statements and forward-looking information within the meaning of applicable US and Canadian securities legislation (collectively, “forward-looking statements”), including, in particular, statements regarding the benefits and synergies of the IronPlanet transaction, future

  • pportunities for the combined businesses of Ritchie Bros. and IronPlanet, future financial and operational results and any other statements regarding events or

developments that Ritchie Bros. believes or anticipates will or may occur in the future. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as “expect”, “plan, “anticipate”, “project”, “target”, “potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend” or “believe” and similar expressions or their negative connotations, or statements that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond Ritchie Bros.’ control, including risks and uncertainties related to: general economic conditions and conditions affecting the industries in which Ritchie Bros operates; Ritchie Bros.’ ability to successfully integrate IronPlanet; the ability to realize anticipated growth, synergies and cost savings in the IronPlanet transaction; the maintenance of important business relationships; our ability to commercialize new platform solutions and offerings; deterioration of or instability in the economy, the markets we serve or the financial markets generally; as well as the risks and uncertainties set forth in Ritchie Bros.’ Annual Report on Form 10-K for the year ended December 31, 2018, which is available on the SEC, SEDAR, and Ritchie Bros.’ website. The foregoing list is not exhaustive of the factors that may affect Ritchie Bros.’ forward-looking

  • statements. There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in,
  • r implied by, these forward-looking statements. Forward-looking statements are made as of the date of this presentation and Ritchie Bros. does not undertake

any obligation to update the information contained herein unless required by applicable securities legislation. For the reasons set forth above, you should not place undue reliance on forward-looking statements. This presentation contains certain non-GAAP financial measures. For a discussion of non-GAAP measures and the most directly comparable GAAP financial measures, see the Appendix to this presentation as well as our earnings release and our Form 10-Q interim report, which are available at: investor.ritchiebros.com. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understand and assessing our financial condition and results. Therefore, these measures should not be considered in isolation or as alternatives to measures of profitability, liquidity or other performance under GAAP. These measures may not be comparable to similarly-titled measures used by other companies. This presentation also includes certain forward-looking non-GAAP financial measures. We are unable to present a quantitative reconciliation of this forward- looking non-GAAP financial information because management cannot reliably predict all of the necessary components of such measures. Accordingly, investors are cautioned not to place undue reliance on this information. All figures are in US dollars, unless otherwise noted.

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Opening Remarks & Review of f th the Quarter

Ravi Saligram, Chief Executive Officer

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Performance Highlights

▪ All figures unadjusted unless otherwise noted. (In $US Millions except EPS)

GROSS TRANSACT CTION VALUE

(in n billions ns)

TOTAL REVENUE

(in n millions ns)

DI DILUTED EPS (T (TTM) FREE CA CASH FLOW

Non

  • n-GAAP

(in n millions ns)

$1.1 .17 +1 +1.2% $303.4 +1 +17% $0.1 .17 +6 +6% $117 $117 +1 +170%

Listed Items Bids Sold Items Price per Sold Item

% of winning GTV online Unique Sellers

▪ FX headwinds: on a constant currency basis, Gross Transaction Value +3% ▪ Live on site GTV flat ; Online GTV +9% ▪ Marketplace-E (MPE) delivers strong GTV growth of 14% with International MPE business doubling

  • ver 1Q18

▪ At risk business mix moving higher in the quarter although softer pricing experienced in Orlando drove lower year over year rate performance on U.S. at-risk deals ▪ US Strategic Accounts delivers double-digit GTV growth; US Total GTV +6% ▪ RBFS grows revenues by 32% and reaches $2 billion (CAD$) mark for volume funded since inception ▪ Voluntary debt repayment of $10 million ▪ Two MARS modules successfully deployed and overall program ON-TRACK

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Trailing 4 quarter price inflation trends for Q1 ‘19 vary depending on the asset category

ADT prices show annualized inflation continuing in Q1 ’19

Positive Price Inflation Price Deflation

Excavator prices show zero annualized inflation Q1 ‘19 Loader prices continue their declines begun in Q4 ’18

Positive Price Inflation Price Deflation Positive Price Inflation Price Deflation

Notes: Each quarter reflects price index change in trailing 4 quarters vs same quarter prior year trailing 4 quarters Machine learning methodology controls for make, model, location, asset age/usage, category/type and other factors to isolate impact of time on price change

5

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Age of Equipment Review

  • Overall, the age of

equipment sold has increased over the last 3 years. Equipment aged 6+ years made up 58%

  • f GTV in 2016 and

has gone up to 66% in 2019

  • In 2019, 24.7% of

equipment is in the “sweet spot” which is down 60 bps from 2018 6

3-5 yrs. old: 24.7% of GTV 3-5 yrs. old: 25.3% of GTV

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Auction Highlights

82.7% 17.3%

2019 GTV Mix

Live Onsite Online Marketplaces 83.9% 16.1%

2018 GTV Mix

Live Onsite Online Marketplaces

Live On site Auctions Online Marketplaces

Orlando, FLA US$297 million +7% Houston, TX US$45 million +11% Los Angeles, CA US$25 million +25% Moerdijk, NLD US$42 million +70% Dubai, UAE US$26 million +31%

Live Auction Notes (Tot.Live Auctions = Live + AG)

48% of live industrial auctions posted year-

  • n-year growth comps

9% Online Marketplaces GTV growth led by MPE, GOV growth

Live Auction Performance Highlights Online Marketplaces Highlights

▪ Across all channels, 60% of total GTV was purchased by online buyers in Q1 vs. 56% in Q1 last year ▪ 54% growth of new buyers on IronPlanet. The highest growth ever. ▪ Marketplace-E bids up +46%; items sold up +43%; buyers up + 40% ▪ GovPlanet bids up +278%; items listed up 283%; buyers +93%

1Q19 1Q18 + / - Total Live Auctions 47 52

  • 5

Non Recurring 2018 auctions Grande Prairie 1

  • 1

North Franklin NH 1

  • 1

UK auctions 2

  • 2

Auctions moving from Q218 to Q119 Columbus 1 1 Minneapolis 1 1 Nashville 1 1 New Q119 auctions Las Vegas 1 1 Fewer Ag auctions 5

  • 5

4 9

  • 5
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Network Effects

ITEM DETAIL

  • Portable Car Crusher
  • Purchased on MPE on April 4, 2019
  • 7 offers; 10 watchers

BUYER INFORMATION

  • Auto recycler located in Michigan
  • Registered on Ritchie Bros. on February 13,

2019

  • Activity on RBA; MPE; and GovPlanet over

last 45 days

Example 2 Example 1

Our Channel Diversification Is Starting To Generate Tangible Network Effects

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Q1 2019 Fin inancial Review

Sharon Driscoll, Chief Financial Officer

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Consolidated Performance

SERVICE REVENUE IN INVENTORY SALE LES REVENUE TOTAL REVENUE OPERATING INC INCOME NET INC INCOME

$172.4

  • 2%

$131.1 +56% $303.4 +17% $33.6 +2% $18.2 +6%

All figures unadjusted unless otherwise noted. (In $US Millions except EPS)

  • Tot
  • tal inventory sales

sales revenue as a % % of f tot total l GTV (mix ix) ) 11 11.2% vs

  • vs. 7.

7.3% 3% in n 1Q18 1Q18

  • Inventory

y sales sales revenue +5 +56% 6% in n line ne wi with th hi high gher inventory y GTV

  • Tot
  • tal se

servic ice revenue as a % % of f tot total l GTV 14 14.7% vs. 15 15.2% in n 1Q 1Q18 18

  • Other Segment

revenue +5 +5%; %; RBFS S revenue +3 +32% 2%, Anc ncill illary y revenue de decli lined $1 $1.7 mi milli llion

  • 9%

9% de decrease in n com

  • mmis

issio ions offset by by 7% 7% inc ncrease in n fees

  • Hi

Higher revenues wi with th mix mix of f Inventory y revenues

  • f

f 43 43% % vs vs 32 32% % PY PY, couple led with with lower com

  • mmis

issio ions, offset t by by hi high gher cos

  • st of

inventory y sold sold

  • 2%

2% de declin line in n SG&A

  • D&A +6

+6% % inc ncrease from

  • m IT investm

tments for

  • r MARS

S and nd oth ther str trategic ic pr proje

  • jects

ts

  • Inc

ncrease dr driv iven by by hi high gher inventory y sales sales revenue and nd gr grow

  • wth

th in n Other se segment t revenue

  • Low

Lower interest t exp xpense from

  • m de

debt t repayments

  • Hi

Higher ta tax exp xpense – effective ta tax rate of f 26 26.8% in n 1Q 1Q19 19 vs. 23 23.4% in n 1Q 1Q18 18

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Service, Inventory and Total Revenue Growth

  • 6%

5% 17% 34% 43% 24% 11% 8%

  • 2%
  • 39%
  • 28%
  • 54%
  • 31%

11% 18% 3% 45% 56%

  • 22%
  • 8%
  • 24%
  • 1%

30% 22% 8% 22% 17%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Service Revenue Inventory Revenue Total Revenue

Pre-IronPlanet

In 1Q19 Inventory sales growth contributed entirely to Total revenue growth as Service revenue growth declined

Reported Basis Like for Like

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12

Auctions & Marketplaces – Service Revenue

$103,206 $21,726 $23,474

2018 by region

US Canada Int'l

$102,975 $19,768 $20,694

2019 by region

US Canada Int'l

▪ The de decline in in ser service revenue resu esulted fr from a a de decrease in in com

  • mmiss

ssions revenue attributable to

  • lo

lower pr price rea ealization on

  • n gua

guarantee contracts s and and a a de decrease in in the volume of

  • f straight com
  • mmiss

ssion con

  • ntrac

acts. s. ▪ Fee ee revenue inc increased du due to

  • moderately hig

higher GTV volume and and hig higher pr proportion of

  • f lo

low val alue lots lots.

$148 $180 $135 $163 $143

12.8% 12.6% 12.9% 12.2% 12.2%

11.6% 11.8% 12.0% 12.2% 12.4% 12.6% 12.8% 13.0% $- $50 $100 $150 $200 1Q18 2Q18 3Q18 4Q18 1Q19

A&M SERVICE REVENUE

Service Revenue ($mm) Service Revenue as a % of Total GTV (Rate)

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Auctions & Marketplaces – Inventory sales revenue

$19,498 $37,161 $27,502

2018 by region

US Canada Int'l

$67,944 $3,785 $59,328

2019 by region

US Canada Int'l

▪ Inventory sa sale les s revenue inc increas ased 56 56% pr primarily du due to

  • an

an incr increase in in volume of

  • f in

inventory sa sale les s contracts s in in the US S and and Eur Europe. ▪ Cos

  • st of
  • f in

inventory sold sold inc increas ased 59 59% to

  • $1

$120 20.5 5 mill illion, in in lin line with ith hig higher acti activity in in in inventory sa sale les s revenue

84 94 84 158 131 76 82 74 143 120

10% 13% 12% 10% 8%

0% 5% 10% 15%

  • 50

100 150 200

1Q18 2Q18 3Q18 4Q18 1Q19

REVENUE / COST / RETURN RATE

Revenue ($mm) Cost of Inv. ($mm) Return Rate %

$84 $94 $84 $158 $131

7.3% 6.6% 8.1% 11.8% 11.2%

0.0% 5.0% 10.0% 15.0% $- $50 $100 $150 $200 1Q18 2Q18 3Q18 4Q18 1Q19

A&M INVENTORY SALES REVENUE

Revenue ($mm) Revenue as a % of Total GTV (Mix)

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14

$14.6 $13.8 $22.1 $22.3 1Q18 1Q19 Ancillary Costs of Services

Costs of Services / SG&A

▪ Cos

  • sts of
  • f ser

services s de declined 2% 2%; ; favorable con

  • nsidering GTV and

and lot lot gr growth ▪ SG SG&A de declined 2% 2% dr driven by con

  • ntinued cos
  • st control disci

discipline and and lap lapping hig higher shar share uni unit expenses s in in 1Q2 1Q2018 18, part partially

  • f
  • ffse

set by continued in investments s to

  • sup

support gr growth pr priorities

$63.3 $61.5 $15.3 $15.9 $9.7 $9.1 $9.2 $8.7 1Q18 1Q19

Professional Fees/Other Travel/Adv/Promotion Buildings/Facilities/Technology Employee Compensation

  • 2%

COS OSTS S OF OF SE SERVICES SG SG&A &A

  • 2%

$36.7 $36.1 $97.5 $95.2

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15

Balance Sheet & Liquidity Metrics

TTM Oper eratin ing Free Ca Cash Flo low (n (non

  • n-GAAP)

Ca Capex Spend Adjusted Net t De Debt/ Adjusted EBI BITDA (n (non

  • n-GAAP)

TTM Retu turn On In Inves ested Ca Capital (n (non

  • n-GAAP)

1Q1 1Q19 1Q1 1Q18

$117M $117M $43M $43M

1Q1 1Q19 1Q1 1Q18

1.7X 2.5X

1Q1 1Q19 1Q1 1Q18

7.7% 6.5%

2019 Balance sheet and liquidity metrics (all unadjusted unless otherwise noted)

Note te: : The he Evergreen Capex measure will be be dis disconti tinued. Effective 2019, RB RB will no now pr provide ann nnual Capex guid uidance.

$45M M to

  • $55M

2019 Capex Range

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Strategic & Operational Update

Ravi Saligram, Chief Executive Officer

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Multi-channel Growth Strategy

REVENUE GENERATION SEGMENTS Seller Segments

UPSTREAM MIDSTREAM AUCTION OEM & Dealers / Rental / Strategic Accounts Brokerage / Private Sales End Users

RBA Solutions

D2D

Go-To- Market Drivers

N.A. Strategic Accounts

Mascus

N.A. Strategic Accounts

International / US Regions / Canada Regions / Gov Bus.Dev./ State & Local / N.A. Agriculture

Alliance

Protect, Penetrate, Partner ….not just auctions

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SAGE - Sales Activity Generation Engine

18

CATALYSTS ACTIVITIES PIPELINE CONTRACTS

▪ La Launchin ing in n 2H H 2019, SAGE GE giv gives sale ales teams the the too

  • ols

to

  • suc

ucceed in n a a mul multi-channel l en envir iron

  • nment, reg

egardle less of

  • f

sup upply ly or

  • r mar

market con

  • ndit

itions ▪ Ac Activ ivit ity & & beh behavio ior focu

  • cused, corr
  • rrela

latin ing g to

  • imp

mproved

  • u
  • utcomes

▪ Mu Mult lti i cha hannel l and and cus ustomer ac acquisit ition focu

  • cused

▪ Real ealignments to

  • al

allow sale ales team eams to

  • focu
  • cus mo

more on

  • n

revenue gene eneratin ing ac activ ivit itie ies, op

  • ptim

timiz ize sel elli ling pr precis isio ion ▪ Giv Gives a a com

  • mmon globa

global l me measurement fr framewor

  • rk and

and regu egular mo moni nitor

  • ring of
  • f sale

ales execution ou

  • utcomes

Strategic Objectives

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SLIDE 19

Key Takeaways

19

1 2 3

Overall we operated well in the first quarter

  • Continue to be confident about 2019 -

Q2 Focus on at-risk valuations Value Creation

4

Platform driving tangible network effects

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Q&A

Members of the RBA Management Team

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Appendix

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Reconciliation of non-GAAP measures

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Reconciliation of non-GAAP measures

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Reconciliation of non-GAAP measures