Forward looking statements and non-GAAP measures Caution Regarding - - PowerPoint PPT Presentation
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.
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
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
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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
8
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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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)
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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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
16
Strategic & Operational Update
Ravi Saligram, Chief Executive Officer
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
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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
Key Takeaways
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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
20
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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