The Global Leader in Used Equipment Sales 2015 Investor & - - PowerPoint PPT Presentation

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The Global Leader in Used Equipment Sales 2015 Investor & - - PowerPoint PPT Presentation

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The Global Leader in Used Equipment Sales 2015 Investor & Analyst Day New York | January 12, 2015 Forward looking statements This presentation contains forward-looking statements (as such term is defined in Section 21E of the U.S.

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SLIDE 1

The Global Leader in Used Equipment Sales

2015 Investor & Analyst Day

New York | January 12, 2015

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SLIDE 2

Forward looking statements

This presentation contains forward-looking statements (as such term is defined in Section 21E of the U.S. Securities Exchange Act of 1934, as amended), which reflect management's current views with respect to certain future events, company strategy and performance. All statements included in or accompanying this presentation, other than statements of historical fact, are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and

  • assumptions. Actual results may differ materially from those expressed herein. Additional information concerning

factors that could affect the Company’s actual results is included in the Company’s filings with securities

  • regulators. The Company undertakes no obligation to update publicly any forward-looking statements except as

required by securities legislation. Please refer to our website at www.rbauction.com for a description and, as applicable, reconciliation of non-GAAP financial measures such as GAP, EBIT and Adjusted EBIT, ROI and ROIC, RONA, OFCF and OFCF as % net earnings, EBITDA and EBITDA margin rate, Contribution and Profit Margin, Sales Force Productivity, QOWC, Other Working Capital, Capital Intensity, Capex Intensity and Net Capex Intensity, Debt / EBITDA and Net Debt / EBITDA, ARR, OI Margin and Adjusted OI Margin, and Adjusted EPS.

All figures are in US dollars, unless otherwise noted.

2 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 3

Agenda

Estimated time Topics Presenter

10:00 am ET Welcome Remarks Ravi Saligram Historical Performance and Influences On Our Business Rob McLeod 10:20 am Strategic Overview and M&A Ravi Saligram 10:55 am Pillar 1: Reinvigorate Growth Strategies by Geography Rob McLeod, Randy Wall, Jeroen Rijk EquipmentOne and New Channels Jim Barr Ritchie Bros. Financial Services Jim Barr 11:35 am Pillar 2: Efficiencies and Effectiveness Systems and Processes Jim Barr Organizational Structure, Key Enablers and SG&A Todd Wohler Sales Productivity Ravi Saligram 12:05 pm

  • - Lunch --

12:50 pm Pillar 3: Optimize Balance Sheet Capital Structure and Capital Allocation Art Winkleblack Existing Site Returns Rob McLeod Performance Scorecard and Implications for Exec Comp Rob McLeod 1:30 pm Business Model & Outlook Ravi Saligram 1:45 pm Q&A Session Management Team 2:30 ET End of Event

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SLIDE 4

Taking RBA to the next level: Strategic Roadmap Summary

  • Reinvigorating strong top-line growth
  • Driving operating efficiency and effectiveness
  • Utilizing cash flow and potential incremental leverage to fuel growth
  • Enhancing returns on capital and generating

Economic Value

  • Establishing capital allocation priorities
  • Including the initiation of a share buyback program

Taking RBA to the next level of execution and delivery of shareholder value

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SLIDE 5

Key Enablers of Plan Delivery

  • Upgrading our talent – both from inside and outside
  • A decentralized, fully empowered and accountable regional
  • rganization structure
  • An integrated Management Scorecard focused on the key drivers of

shareholder value

  • An incentive compensation program based on the few key metrics

which best align management with shareholder interests

  • Data capture, systems and analytic capabilities to identify
  • pportunities and optimize execution

Establishing the foundation for sustainable, long term success at RBA

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SLIDE 6

Key Drivers of Growth

  • 1. Winning in the US
  • 2. Penetrating Transportation & Agriculture
  • 3. Growing Strategic Accounts & Global Accounts
  • 4. M&A
  • 5. Driving multichannel

Key Enabler: Building People Capacity & Capability

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SLIDE 7

Rob McLeod, Chief Financial Officer

Historical Performance

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SLIDE 8
  • GAP growth since 2009 has been inconsistent
  • Rate has been less than 1/3 of growth rate to 2009

$1,789 $2,093 $2,721 $3,186 $3,568 $3,491 $3,278 $3,714 $3,908 $3,817 $4,212

500 1000 1500 2000 2500 3000 3500 4000 4500 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

GAP 2004–2014 ($mm)

GAP Growth Since 2009

CAGR 2009–2014 = 3.8%

8

CAGR 2004–2009 = 14.3%

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Revenue Rate 10.2% 10.1% 9.5% 9.8% 9.9% 10.8% 10.9% 10.7% 11.2% 12.2%

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SLIDE 9

Revenue drivers – mix has evolved

  • Since 2009, our mix of revenues has changed
  • Fees have increased as a percentage of total

9

92% 8% Revenue by Type – 2009 ($mm)

Commission Revenue – $349 Fee Revenue – $28

20% Revenue by Type – 2013 ($mm)

Commission Revenue – $374 Fee Revenue – $83

80%

Total Revenue: $467 mm Total Revenue: $377 mm

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

$93

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SLIDE 10

Strategic use of at-risk business has increased

79% 21% GAP Type - 2009 28% GAP Type - 2013

Straight Commission At-Risk

72%

  • At-risk business has moved from below our historic range into that range

1

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 11

Geographic mix

  • US revenue has declined to 48% of total revenues (2009 vs. 2013)
  • Canada revenue has increased to 29% of total revenues

11

54% 24% 15% 7% Revenues by Geography – 2009 ($mm)

US – $202 Canada – $90 Europe – $58 Rest of World – $27

48% 29% 14% 9% Revenues by Geography – 2013 ($mm)

US – $224 Canada – $135 Europe – $65 Rest of World – $43

Total Revenue: $377 mm Total Revenue: $467 mm

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 12

Flow-through of revenue gains has been limited

$377 $357 $396 $438 $467 $127 $92 $104 $120 $131

50 100 150 200 250 300 350 400 450 500 2009 2010 2011 2012 2013

Revenues & Earnings from Operations (EBIT, $mm)

Revenues Earnings from Operations (EBIT)*

12 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Revenue CAGR 4%, EBIT CAGR 1%

* EBIT adjusted for CEO Separation agreement

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SLIDE 13

CAPEX has been reduced significantly since 2009

13

$23 $43 $51 $113 $145 $157 $62 $77 $62 $54

20 40 60 80 100 120 140 160 180 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CAPEX ($mm)

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Recent CAPEX has been focused on site maintenance and IT investments

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SLIDE 14

$32 $38 $42 $41 $43

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2009 2010 2011 2012 2013

Depreciation & Amortization 2009–2013 ($mm)

8.4% 10.6% 10.7% 9.4% 9.3%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Increase in depreciation expense now moderating

2009-2014: Auction site development drove increased depreciation expense 2012 forward: Depreciation expense stabilized in line with significantly reduced site development

14

Depreciation expense growth CAGR 2009–2013 = 8.0%

 Depreciation and amortization  Depreciation and amortization as percentage of revenues

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 15

ROIC performance declined due to auction site development combined with subpar growth

15

11% 14% 14% 16% 17% 15% 9% 10% 10% 11%

0% 4% 8% 12% 16% 20% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Return on Invested Capital (ROIC)¹

(1) The Company calculates ROIC as adjusted net earnings divided by invested capital. Invested capital is calculated as the average equity attributable to the equity holders of the parent between the current reporting date and the comparative reporting date, plus the average non- current borrowings between the current reporting date and the comparative reporting date.

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 16

Return on net assets

16

20% 26% 22% 21% 23% 16% 10% 12% 12% 15%

0% 5% 10% 15% 20% 25% 30% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Return on Net Assets (RONA)¹

(1) Trailing Twelve Months Net operating profit after tax / Net assets

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 17

RBA cash flow perspective – last four years

  • Cumulative Operating Free Cash Flow nearly equals cumulative net income

RBA 2010–2013 (cumulative)

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159% 68% 91%

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% Cash from Operations CAPEX Op Free Cash Flow

% of Net Income

(1) RBA CAPEX is net of proceeds on sales of PP&E.

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

CAPEX(1)

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SLIDE 18

Takeaways

  • RBA is a strong cash generator
  • Big Capex days are behind us
  • GAP growth, consistent Revenue Rate and controlling expenses are our

key focus areas

18 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 19

Influences On Our Business

Rob McLeod, Chief Financial Officer

19

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SLIDE 20

Reminders about our model

20 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

RBA’s revenue is generated by transaction activity

  • Can be generated by

both growth and contraction periods

  • f economic and

sector cycles

Our sector coverage is broad and diverse

  • The assets we sell can,

and often do, transfer between sectors (i.e. excavator used in construction originally could be sold for work in mines)

Our global reach provides a natural hedge against regional economic weakness

  • Transcends local

market conditions; provides better pricing for equipment sellers

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SLIDE 21

Macro influences on transaction activity

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Construction (US & Canada)

  • Total Non-Res Construction Spend

(US)

  • Total Res Construction Spend (US)
  • Housing starts (US and Canada)
  • Construction machinery

manufacturing – new orders (US and Canada)

Agriculture

  • Canada total farm receipts
  • Canada Agricultural implement

manufacturing shipments

  • US farm machinery and

equipment manufacturing – seasonally adjusted value of shipments

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 22

Macro influences on transaction activity

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Transportation

  • Transportation equipment –

New orders (US & Canada)

Oil and Gas

  • Oil and gas prices
  • Total consumption of petroleum

products (US and Canada)

  • Active rig counts

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 23

US total construction spend

Source: US Census Bureau; RBA GAP data $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $ $100 $200 $300 $400 $500 $600

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US GAP Total Construction Spend

US total construction spend ($mm)

$mm for RBA US GAP $mm for total US construction spending

  • Construction activity drives equipment transactions
  • Used equipment pricing effects GAP

23 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 24

US construction machinery manufacturing – impacted age of equipment population in following years

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $0 $100 $200 $300 $400 $500 $600

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

U.S. Construction Machinery Manufacturing - New Orders

72% decline Source: US Census Bureau

US construction machinery manufacturing – new orders ($mm)

$mm for RBA US GAP $b for US Construction Machinery Manufacturing

24 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 25

0% 2% 4% 6% 8% 10% 12% 14% New 1 Yr Old 2 Yrs Old 3 Yrs Old 4 Yrs Old 5 Yrs Old 6 Yrs Old 7 Yrs Old 8 Yrs Old 9 Yrs Old 10 Yrs Old 2009 2010 2011 2012 2013 2014

Age of equipment available for sale continues to improve

25 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

The “void” of equipment from 4-5 years ago continues to track as expected

Percent of GAP from asset age

Excludes items with unknown ages

2014

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SLIDE 26

Expected impact of lower oil prices and challenged

  • il and gas sector

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  • Limited exposure to oil and gas assets globally
  • Alberta economy is driven by oil and gas

20 40 60 80 100 120 100 200 300 400 500 600 1/1/2004 7/1/2004 1/1/2005 7/1/2005 1/1/2006 7/1/2006 1/1/2007 7/1/2007 1/1/2008 7/1/2008 1/1/2009 7/1/2009 1/1/2010 7/1/2010 1/1/2011 7/1/2011 1/1/2012 7/1/2012 1/1/2013 7/1/2013 1/1/2014 7/1/2014

Canada GAP US GAP Oil Lag 18M Oil prices Quarterly GAP (Millions)

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

(1) Rolling 4 quarter averages

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SLIDE 27

Takeaways

  • Volume of used equipment transactions drive our business
  • Diversity in sectors and geographies moderate the cyclical nature of

local economies & industries

  • Oil and gas has an impact – negative in some of our markets,

positive in others

27 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 28

Strategic Plan Overview

Ravi Saligram, CEO

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SLIDE 29

Strengths and competencies

  • Leader in unreserved auction &

multichannel

  • Significant online player: $1.8b

GAP in 2014

  • Over $1 billion in underwritten

transactions

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  • Deep customer relationships
  • Operational prowess
  • Exceptional cash generator
  • Employee pride and passion

RBA has a strong business model foundation to drive sustainable & profitable growth

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 30

Our vision: to be the premier equipment asset management and disposition company

Purpose: Trusted, customer-centric advocate connecting global buyers and sellers through multiple channels

  • Customers: We are the preferred choice of customers for equipment

asset management and disposition, offering the greatest value by leveraging data and insights and connecting global buyers and sellers across multiple channels, sectors and geographies.

  • Employees: A disciplined, high performance, customer-focused

service organization that values integrity, celebrates diversity, drives innovation and fosters an entrepreneurial spirit.

  • Shareholders: A growth-oriented cash generator that is intent on

driving superior shareholder value.

30 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 31

Key strategic issues

  • Reinvigorate core growth
  • Scale EquipmentOne and leverage Multi Channel
  • Transform processes and systems
  • Improve SG&A efficiencies
  • Control capital spending
  • Increase site returns

Build organizational capacity and capabilities to build scale; drive performance-oriented culture

31 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 32

Opportunities

Ravi Saligram, CEO

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SLIDE 33

Global equipment market size is $360 billion

33

US alone represents over $50 billion, 7x Canada

Mining Oil & Gas Transportation Agriculture Construction

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Mining Oil & Gas Transportation Agriculture Construction

Source: Internal estimates; based on historical OEM unit sales, estimates of fleet turnover, and average selling prices at RB

  • auctions. Allocation by geography based on sector GDP.
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SLIDE 34

U.S. & Europe are largest construction markets

34

$101B Global Market

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Source: Internal estimates; based on historical OEM unit sales, estimates of fleet turnover, and average selling prices at RB auctions.

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SLIDE 35

Transportation represents biggest sector opportunity

35

$96B Global Market

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Source: Internal estimates; based on RigDig data, estimates of fleet turnover, and average selling prices at RB auctions.

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SLIDE 36

Transportation is an attractive sector due to multiple turns (3+)

36 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Source: Internal estimates based on customer research. Based on US customer research

Sector profile

  • Asset-intensive industry
  • Integral to economy
  • Fragmented market
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SLIDE 37

Agriculture is nearly a $75 billion market

37 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Source: Internal estimates; based on historical OEM unit sales, estimates of fleet turnover, and average selling prices at RB auctions.

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SLIDE 38

The competitive environment is fragmented, diverse and across multiple channels; RBA has scale advantage.

Our direct and indirect competitors include:

  • Private Sales

– Person to person sales – Online marketplaces

  • Craigslist, ebay, Machinery Trader, Kijiji, Alibaba, Mascus, MB Diffusion
  • OEM dealers and independent dealers*
  • Rental companies*
  • Auction companies

– Iron Planet / CAT Auction Services, Auction Time, Euro Auctions, Alex Lyon & Sons, Taylor & Martin, etc.

  • Brokers

Competitive Trends

  • ecommerce has become mainstream and technology is enabling new competitors
  • OEM Dealers have expanded services to offer cradle to grave solutions for customers (rental

services, telematics, finance)

  • Economic cycles influence equipment ownership preferences, impacting in particular the

business cycle of rental companies

* Some of these competitors are also customers

Private Sales remains a major opportunity for RBA to gain share in light of fragmentation

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015 38

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SLIDE 39

RBA strategic roadmap

We are employing three strategic pillars to drive shareholder value.

39

Growth in shareholder value Pillar 1 Pillar 2 Pillar 3 Growth Initiatives Operational Efficiencies Balance Sheet & Capital Structure

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Revenue Growth, Margin Expansion, Strong Cash Flow, RONA improvement Key Outcomes:

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SLIDE 40

1

RBA strategic roadmap to drive shareholder value

40

Objective: Restore revenue & earnings growth, drive cash flow, improve RONA

Strategic Pillars Key Strategies

A: Geographies

  • Drive depth vs breadth
  • Focus on the US
  • Grow UK , Germany and France
  • Evaluate Japan and China

strategic options B: Sectors

  • Leverage construction
  • Focus on transportation
  • Grow agriculture
  • Evaluate Oil & Gas

C: Services

  • Scale RBFS
  • Pilot Logistics

D: Channels

  • Relaunch EquipmentOne
  • Drive Multi Channel

E: Segments

  • Accelerate strategic accounts
  • Develop global accounts

M & A

  • Tuck-ins and bolt-ons
  • Scale enhancers & needle movers
  • Accretive in relatively short time

frame Growth Initiatives F: Underwritten Contracts

  • Utilize aggressively
  • Minimize volatility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 41

Measurement Alberta Texas Multiple Population (M) 4 27.2 6.8 X Real GDP ($M)* $311,898 (+3.9% y-o-y) $1,387,598 (+3.7% y-o-y) 4.4 X Sector GDP ($M)*

  • Construction
  • Transportation & Utilities
  • Agriculture & Forestry
  • Mining

$33,061 $19,026 $5,926 $72,672 $72,596 $89,646 $13,375 $206,220 2.2 X 4.7 X 2.3 X 2.8 X Equipment Trading ($M)**

  • Construction**
  • Transportation***
  • Agriculture & forestry**

Based on machinery CAPEX $1,692 $3,150 $1,108 Based on UCC filings $5,934 $6,615 $1,924 3.5 X 2.1 X 1.7 X Construction Sector Companies D&B 19,479 98,727 5.1 X

Texas has great potential

41

Texas opportunity 2.5x Alberta

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

* US data: US Bureau of Economic Analysis (2013); Canadian data: StatsCan (2012) ** 2013 UCC filing on construction & agriculture represents approx. 60% of the market; 2013 Canadian data: StatsCan *** 2013 RigDig data

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SLIDE 42

However, RBA Alberta outperforms RBA Texas by 1.8x

  • Alberta 3x volume of At Risk % GAP sold in Texas
  • Has done $1 billion in At Risk versus $300 million in Texas
  • Strength in On Site and Off-site farm auctions
  • Alberta TMs have strong hunter skill sets
  • TM coverage needs to increase in Texas in line with potential

42

Transferring Alberta best practices to Texas

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 43

Asia Strategic Options

  • 1. Japan
  • Entered with North American paradigm
  • Need to adapt model to local needs
  • Open to all strategic options
  • Important source market – global export
  • 2. China
  • Significant long-term opportunity
  • However, market immature – challenges to build business
  • Cautious step-by-step approach
  • Judicious investment

43 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 44

1

RBA strategic roadmap to drive shareholder value

44

Objective: Restore revenue & earnings growth, drive cash flow, improve RONA

Strategic Pillars Key Strategies

A: Geographies

  • Drive depth vs breadth
  • Focus on the US
  • Grow UK , Germany and France
  • Evaluate Japan and China

strategic options B: Sectors

  • Leverage construction
  • Focus on transportation
  • Grow agriculture
  • Evaluate Oil & Gas

C: Services

  • Scale RBFS
  • Pilot Logistics

D: Channels

  • Relaunch EquipmentOne
  • Drive Multi Channel

E: Segments

  • Accelerate strategic accounts
  • Develop global accounts

M & A

  • Tuck-ins and bolt-ons
  • Scale enhancers & needle movers
  • Accretive in relatively short time

frame Growth Initiatives F: Underwritten Contracts

  • Utilize aggressively
  • Minimize volatility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 45

1 2

RBA strategic roadmap to drive shareholder value

45

Objective: Restore revenue & earnings growth, drive cash flow, improve RONA

Strategic Pillars Key Strategies

Operational Efficiencies & Effectiveness A: Sales Productivity

  • Territory management & coverage

based on market potential

  • Consistent go to market processes
  • Improve selection, onboarding and

training of new hires

  • Consistently utilize sales tools

C: Org Structure and SG & A

  • Regional org structure with P&L and

B/S accountability

  • Target SG&A growth lower than

revenue growth

  • Flatten levels

D: Performance Metrics

  • P&L and balance sheet scorecard
  • Operational metrics
  • Accountability at all levels

Incentive Compensation

  • Tie to P&L and balance sheet measures
  • Revamp sales compensation

B: Processes & Systems

  • Modernize legacy systems
  • Salesforce.com as unifying platform
  • Focus on CRM
  • Enable scaling business & leveraging

multichannel A: Geographies

  • Drive depth vs breadth
  • Focus on the US
  • Grow UK , Germany and France
  • Evaluate Japan and China

strategic options B: Sectors

  • Leverage construction
  • Focus on transportation
  • Grow agriculture
  • Evaluate Oil & Gas

C: Services

  • Scale RBFS
  • Pilot Logistics

D: Channels

  • Relaunch EquipmentOne
  • Drive Multi Channel

E: Segments

  • Accelerate strategic accounts
  • Develop global accounts

M & A

  • Tuck-ins and bolt-ons
  • Scale enhancers & needle movers
  • Accretive in relatively short time

frame Growth Initiatives F: Underwritten Contracts

  • Utilize aggressively
  • Minimize volatility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-46
SLIDE 46

1 2 3

RBA strategic roadmap to drive shareholder value

46

Objective: Restore revenue & earnings growth, drive cash flow, improve RONA

Strategic Pillars Key Strategies

Operational Efficiencies & Effectiveness A: Sales Productivity

  • Territory management & coverage

based on market potential

  • Consistent go to market processes
  • Improve selection, onboarding and

training of new hires

  • Consistently utilize sales tools

C: Org Structure and SG & A

  • Regional org structure with P&L and

B/S accountability

  • Target SG&A growth lower than

revenue growth

  • Flatten levels

D: Performance Metrics

  • P&L and balance sheet scorecard
  • Operational metrics
  • Accountability at all levels

Incentive Compensation

  • Tie to P&L and balance sheet measures
  • Revamp sales compensation

B: Processes & Systems

  • Modernize legacy systems
  • Salesforce.com as unifying platform
  • Focus on CRM
  • Enable scaling business & leveraging

multichannel Balance Sheet Optimization Existing site returns

  • High, medium and low site return

league table

  • Initiatives to improve medium

and low site returns

  • Dispose of excess assets

Cash Flow

  • Align organization & incentivize
  • Target Op FCF equal to net income

Organic Capital Spends

  • Target net capital spend <10%

revenue

  • Control spending on new sites
  • Focus on IT systems & site

maintenance Capital Structure

  • Institute policy and priorities
  • Return cash via ongoing

dividends

  • Address option dilution
  • Invest in growth-driven M&A

A: Geographies

  • Drive depth vs breadth
  • Focus on the US
  • Grow UK , Germany and France
  • Evaluate Japan and China

strategic options B: Sectors

  • Leverage construction
  • Focus on transportation
  • Grow agriculture
  • Evaluate Oil & Gas

C: Services

  • Scale RBFS
  • Pilot Logistics

D: Channels

  • Relaunch EquipmentOne
  • Drive Multi Channel

E: Segments

  • Accelerate strategic accounts
  • Develop global accounts

M & A

  • Tuck-ins and bolt-ons
  • Scale enhancers & needle movers
  • Accretive in relatively short time

frame Growth Initiatives F: Underwritten Contracts

  • Utilize aggressively
  • Minimize volatility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 47

1 2 3

RBA strategic roadmap to drive shareholder value

47

Objective: Restore revenue & earnings growth, drive cash flow, improve RONA

Strategic Pillars Key Strategies Key Enablers

* Disciplined execution * Analytical DNA * Accountability culture * Learning organization * Rewards & recognition * Talent development * Diversity to drive innovation * Sustainable, profitable growth * Strong cash flow generation * Continuously improving RONA

Key Outcomes

Operational Efficiencies & Effectiveness A: Sales Productivity

  • Territory management & coverage

based on market potential

  • Consistent go to market processes
  • Improve selection, onboarding and

training of new hires

  • Consistently utilize sales tools

C: Org Structure and SG & A

  • Regional org structure with P&L and

B/S accountability

  • Target SG&A growth lower than

revenue growth

  • Flatten levels

D: Performance Metrics

  • P&L and balance sheet scorecard
  • Operational metrics
  • Accountability at all levels

Incentive Compensation

  • Tie to P&L and balance sheet measures
  • Revamp sales compensation

B: Processes & Systems

  • Modernize legacy systems
  • Salesforce.com as unifying platform
  • Focus on CRM
  • Enable scaling business & leveraging

multichannel Balance Sheet Optimization Existing site returns

  • High, medium and low site return

league table

  • Initiatives to improve medium

and low site returns

  • Dispose of excess assets

Cash Flow

  • Align organization & incentivize
  • Target Op FCF equal to net income

Organic Capital Spends

  • Target net capital spend <10%

revenue

  • Control spending on new sites
  • Focus on IT systems & site

maintenance Capital Structure

  • Institute policy and priorities
  • Return cash via ongoing

dividends

  • Address option dilution
  • Invest in growth-driven M&A

A: Geographies

  • Drive depth vs breadth
  • Focus on the US
  • Grow UK , Germany and France
  • Evaluate Japan and China

strategic options B: Sectors

  • Leverage construction
  • Focus on transportation
  • Grow agriculture
  • Evaluate Oil & Gas

C: Services

  • Scale RBFS
  • Pilot Logistics

D: Channels

  • Relaunch EquipmentOne
  • Drive Multi Channel

E: Segments

  • Accelerate strategic accounts
  • Develop global accounts

M & A

  • Tuck-ins and bolt-ons
  • Scale enhancers & needle movers
  • Accretive in relatively short time

frame Growth Initiatives F: Underwritten Contracts

  • Utilize aggressively
  • Minimize volatility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 48

Shareholder value perspective

48

EPS Growth X P/E Multiple = Shareholder Value

  • PILLAR 1: Revenue growth
  • Geographies
  • Sectors
  • Services
  • Channels
  • Segments
  • At Risk rate
  • M&A
  • PILLAR 2: Profit Margin
  • SG&A
  • Incentives
  • Systems
  • Sales Force Productivity
  • PILLAR 3: Balance Sheet
  • # of shares

“Quality of Earnings”

  • PILLAR 1:
  • Growth expectations
  • PILLAR 3:
  • Cash generation
  • Working capital management
  • CAPEX control
  • Use of leverage
  • Return on net assets
  • Capital Allocation
  • Site Returns
  • PILLAR 3:
  • Dividend growth
  • PILLAR 1, 2 & 3:
  • Share Price appreciation

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 49

M&A Strategy

Ravi Saligram, CEO

slide-50
SLIDE 50

Acquisitions & strategic partnerships will complement

  • rganic growth

Role of acquisitions and partnerships:

  • Strengthen core business geographic penetration and scale
  • Enhance sector expertise
  • Build new channel capabilities
  • Expand service platform

Accelerate profitable top line growth

50 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 51

Our approach to acquisitions will be disciplined

Acquisition criteria:

  • Sector/vertical/channel specialization and go to market operational

expertise

  • Strength in underdeveloped RBA geographies; rapid scale in emerging

frontier markets

  • Strong customer relationships
  • Add talent and capabilities to RBA
  • Ability to retain talent post acquisition
  • Asset light
  • Accretive in a relatively short time frame
  • Valuations below RBA EBITDA multiple
  • Evaluate using DCF model – ROIs versus our WACC

Explore Tuck Ins, Bolt Ons, Scale Enhancers & Needle Movers

51 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-52
SLIDE 52

Pillar 1: Reinvigorating Growth

Geographies

Rob McLeod, Randy Wall, Jeroen Rijk

slide-53
SLIDE 53

United States & Latin America

Grow GAP at low double digit % CAGR over the next five years in the US and Latin America

53

Key growth strategies

1. Sectors

  • Continue to build construction sector
  • Transportation: Significant untapped potential

2. Geographies

  • Realize Texas potential
  • Turnaround Eastern region
  • Drive depth in Mexico

3. Channels

  • Accelerate strategic accounts
  • Launch Global Key Accounts
  • Relaunch EquipmentOne

4. Mix

  • Increase and optimize At-Risk model usage

5. Brand

  • Build Ritchie Bros. brand awareness

6. People

  • Appoint US President
  • Roll out field support

7. Process

  • Improve sales productivity
  • Optimize SFA tool usage

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

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SLIDE 54

Canada

54 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Key growth strategies

1. Sectors

  • Construction: Maintain leadership position in core sector
  • Agriculture: Build on leadership position; increase geographic penetration; leverage best

practices in other markets

  • Oil & Gas: Investigate new solutions, deeper understanding & increase penetration
  • Transportation: Significant untapped potential

2. Geographies

  • Continue to expand Agricultural footprint in AB, SK, MB
  • Increase penetration in Canada East

3. Channels

  • Accelerate Strategic Accounts
  • Pilot E1 in selected markets

4. Mix

  • Continued strategic use of At Risk contracts

5. Brand

  • Continue to build Ritchie Bros. brand awareness

6. People

  • Limited sales force growth
  • Selective placement to match sector focus
  • Maintain high productivity levels

7. Process

  • Improve consistency of sales management processes
  • Optimize SFA tool usage

Grow GAP at low single digit CAGR over the next five years in Canada

slide-55
SLIDE 55

Europe

Key growth strategies Grow GAP at low double digit CAGR over the next five years in Europe

1. Sectors

  • Continue to penetrate construction sector
  • Grow agricultural sector across Europe

2. Geographies

  • Realize German, UK and France potential
  • Continue to build fundamentals for Scandinavia and Eastern Europe
  • Act “Glocal”

3. Channels

  • Accelerate Strategic Accounts
  • Pilot E1 in selected markets

4. Brand

  • Build Ritchie Bros. brand awareness

5. People

  • Limited sales force growth required
  • Selective placement to match sector focus

6. Process

  • Increase sales productivity
  • Optimize SFA tool usage

55 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-56
SLIDE 56

Jim Barr, Group President Pillar 1: Reinvigorating Growth

EquipmentOne & New Channels

slide-57
SLIDE 57

Channel opportunity

57 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Core auction value proposition & business model healthy Multichannel approach reinforces and accelerates

  • ur core business
  • Strong geographic growth
  • pportunities
  • Strong sector growth
  • pportunities
  • Enhances value proposition/ ability to

meet broader needs

  • Growth potential
  • Enables “better together” cross-channel

solutions

slide-58
SLIDE 58

2

Our customers use a variety of channels based on current needs

58

Biggest Customer Concerns by Method

83% 78% 58% 54% 45% 49% 51% 54% 41% 43% 17% 22% 42% 46% 55% 51% 49% 46% 59% 57%

0% 20% 40% 60% 80% 100%

Private Sales Craigslist OEMs Local Newspapers Trade Publications Live Onsite Auctions eBay Dealers Online Auctions Brokers

Considered but did not use Considered and frequently used Total considered

15% 74% 58% 35% 33% 30% 30% 29% 26% 22%

%

Selling Methods Considered and Used

Customers and prospects are already using other channels A multichannel approach can address pain points of alternatives

1

3 The size of the prize of the total market ($360B worldwide) and in adjacent channels is very large

Source: RBA 2014 Market Research Study on Market Perceptions of Selling Options of US Equipment Sellers (n=1,026) RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Method Top Concern Private Sales Reaches fewer buyers/time consuming Craigslist Sale uncertainty/do everything yourself Dealers “Take it or leave it” final price Online Auctions Sale uncertainty/cannot negotiate Local Newspapers Sale uncertainty/do everything yourself Onsite Auctions Lower level of control Trade Publications Sale uncertainty/time consuming Brokers Sale uncertainty/cannot negotiate

slide-59
SLIDE 59

The seller journey: sellers choose methods based upon needed degree of control

59 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

High

Control to Seller

Low Effort for Seller Uncertain Certain

Control over: Price Time Location Buyer

Some Certainty of Sale Low High

slide-60
SLIDE 60

Our vision is to position appropriate solutions at each point

  • f seller journey and connect them

60

High

Control to Seller

Low Effort for Seller

Control over: Price Time Location Buyer

Listing Service

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Low High Uncertain Certain Some Certainty of Sale

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SLIDE 61

Complementary & “better together” value propositions

61 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

  • Certainty of sale
  • Global market value
  • Seller access to largest global buying audience
  • Ability to buy at largest global equipment

inventory online and onsite at 350 auctions annually

  • Highest level of service & support

Better Together

  • Single relationship for all occasions
  • Choice to transact anyhow, anytime,

anywhere

  • Choice of control, level of assistance
  • Seller access to the world’s largest equipment

buyer base

  • Buyer access to the largest global

equipment inventory

  • Robust selling price data
  • Technology-enabled

“better together” solutions

  • Greater seller control over price, timing,

location, buyer

  • Access to global buying audience online
  • Strong technology platform
  • Self-service tools or assistance from

world-class sales & operations

  • Ability to buy anytime
slide-62
SLIDE 62

We offer customers the World’s Leading Equipment Exchange… scale is a major competitive advantage

Seller access to the largest equipment buyer base Buyer access to the largest inventory of used equipment

Source: RBA Internal Registration Data (Global, All Auction Types) Source: RBA Internal Data (Global), Internal Estimates (eBay), Public information from company websites (all except eBay)

226,497 244,347 291,021 312,317 329,377 387,453 384,601 444,439 462,663 503,745 558,426 100,000 200,000 300,000 400,000 500,000 600,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Combined # of online/offline registrations

62 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 Ritchie Bros. IP/CAS/Kruse Rest of Top 10 Competitors

Top 10 Auction Companies (2013 GAP)* * Transactional online and offline auctions only. Overall market, including all methods of asset disposition is $360B worldwide and is highly fragmented.

slide-63
SLIDE 63

Key challenges/actions

63

Reinvigorate E1 Product & Team Better Integrate E1 into Core Ritchie Invest in Technology & Insights Focus on “Better Together”

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-64
SLIDE 64

Example EquipmentOne priorities

64

Site Redesign rolled out in phases Grow Buyer Audience Integration with Core RBA E1 Geo Expansion Increase # of Listings Listings Service Enhanced Seller Tools Culture of Innovation, Speed & Agility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-65
SLIDE 65

Key measurements

65

Yield Gross Transaction Value EBIT

EquipmentOne KPIs

Scorecard of E1 Impact on Core Web Visits

Listings Buyers Growth Profit Better Together

Best in Class Score TBD

Customer Sat

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-66
SLIDE 66

The leader in multi-channel asset disposition

  • Already the current leader in multi-channel…
  • $1.8B online, including E1 marketplace
  • Unleashed to grow using the full power of Ritchie
  • Integrated platform enabling seamless experiences
  • Cross-marketing
  • Full power of the sales team or self-serve

Result: Transacting anyhow, anytime, anywhere

66 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-67
SLIDE 67

Pillar 1: Reinvigorating Growth

Financial Services

Jim Barr, Group President

slide-68
SLIDE 68

Ritchie Bros. Financial Services

  • JV partnership – Ritchie Bros.

51% ownership

  • Adjacent line of business
  • Enhances and supports core

auction business

  • Integrated multi-lender platform
  • Rapid growth
  • Strong profitability

68 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-69
SLIDE 69

How it works

69

Great

Small

Big

New Business

Prime

  • U.S.
  • Canada
  • Mexico
  • Australia
  • U.K.

Applications RBFS Compass Portal RBFS Lender Partners RBFS Call Centre

  • Website
  • Onsite
  • Call in
  • Outbound calls
  • Match engine
  • Workflow
  • Documentation
  • Data warehouse
  • Approvals
  • Declines
  • Conversion to

funded transaction

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-70
SLIDE 70

Economic model

70 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

AVERAGE TRANSACTION:

$65,000

AVERAGE TERM:

36-48 months

ANNUAL PERCENTAGE RATE:

4.25% and up

(dependent on credit/ quality/transaction size)

EBITDA MARGIN RATE

Exceeds Ritchie core business

slide-71
SLIDE 71

RBFS growth since inception (3+ years)

71

$175M funded in 2014

CAGR

58%

Application Volume Funded Volume Revenue Contribution

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

CAGR

93%

CAGR

108%

CAGR

540%

slide-72
SLIDE 72

Potential as RBFS Matures

  • Mature OEM/Large Dealer Groups penetration
  • 25 - 60% of new equipment transactions financed
  • 20 - 40% of used equipment transactions financed

Best Sale

26%

Average Sale

9.3%

72 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

RBFS penetration rates in 2014 (3rd year in business):

slide-73
SLIDE 73

Key growth initiatives

  • Increase US Penetration toward Canada levels
  • Enhanced Rate Offering Choices
  • New Products
  • Increase Customer Service Levels

73 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-74
SLIDE 74

Pillar 2: Efficiencies and Effectiveness

Systems and Processes

Jim Barr, Group President

slide-75
SLIDE 75

Forces driving systems modernization

75

Competitive advantage gained through real-time visibility of customer behavior Systems & processes must drive efficiency and top line growth Customers demand systems that can quickly adapt to changing needs

Scalability Insights Flexibility

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-76
SLIDE 76

Updating the business platform

76

Moving the Back-Office to the Cloud Building real-time predictive customer and equipment analytics Providing industry leading online customer self- service Integrating the unreserved and marketplace buying and selling experience

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-77
SLIDE 77

Where we are today …

  • Two years into Systems Modernization journey and continuing
  • Salesforce.com now in place – foundation for our future multi

channel platform

  • Enabling and accelerating customer, equipment and pricing insights

from big data

  • Integrating the buying & selling customer experience to enable world

class multi channel and “better together” scenarios

77 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-78
SLIDE 78

Pillar 2:

Efficiencies and Effectiveness

Org Structure, Key Enablers and SG&A

Todd Wohler, HR Advisor

(CHRO effective March 1, 2015)

slide-79
SLIDE 79

Why a regional structure to deliver on our strategy

  • Regional business leaders with a strong general management focus to

drive sustainable, profitable growth and cash flow of the core auction business

  • Localized and decentralized structure to be more responsive and agile

as a company, meet local customer needs, and foster an increased sense of urgency

  • Externally focused, and tailor ‘go to market’ approaches based on

customer needs and geographic differences

  • Strong data-centric, customer focused leadership team to exploit new

channels, models and services and increase market share

  • Leverage vast customer and equipment data, and improve analytical

rigor to develop powerful insights which will sharpen our strategic focus and strengthen our customer value proposition

79 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-80
SLIDE 80

Executive team organizational chart

80

Ravi Saligram Chief Executive Officer President, US & LATAM President, Canada VP, Managing Director, Asia Pacific SVP, Managing Director, Europe Chief Human Resources Officer Chief Financial Officer Group President, Emerging Bus, Brand Innov & Tech Serv Chief Sales Officer, Global Key Accounts Chief Ops Support & Development Officer

80 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-81
SLIDE 81

Key enablers

  • Disciplined Execution
  • Analytical DNA
  • Accountability Culture
  • Rewards and Recognition

81 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

  • Learning Organization
  • Talent Development
  • Diversity to drive Innovation
slide-82
SLIDE 82

SG&A investments have not yet been able to drive leverage

SG&A growth has been consistent with Revenue growth since 2010

* SG&A adjusted for CEO Separation agreement in 2013 and excludes depreciation and amortization 82

45% 51% 51% 52% 51% 51% 0% 10% 20% 30% 40% 50% 60% 50 100 150 200 250 300 2009 2010 2011 2012 2013 Q3 TTM

SG&A $ and as % of Revenue

SG&A Expenses* SG&A % of Revenues*

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-83
SLIDE 83

2013 cost alignment plan – recap

  • A reduction of approximately 5% of total overhead was actioned
  • Approximately 1/3 of realized cost savings and 2/3 of costs avoided
  • Legacy systems have resulted in high level of manual intervention

(e.g. transactional processing)

Significant Structural changes will be needed to attain next level of efficiency

83 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-84
SLIDE 84

Go forward approach to drive further efficiencies

Actions

  • Continue to review organizational layers and spans of control
  • Flattening the organization
  • Upgrade legacy systems to drive efficiencies in transactional activities
  • Evaluate the use of capital in facilities and autos
  • Lease vs. buy
  • Integrated compensation plans focused on key metrics

84 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

Management is committed to growing SG&A at a lower rate than revenues

slide-85
SLIDE 85

Pillar 2: Efficiencies & Effectiveness

Sales Productivity

Ravi Saligram, CEO

slide-86
SLIDE 86

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 2009 2010 2011 2012 2013

  • SEPT. 2014

50 100 150 200 250 300 350 400

Sales productivity

Sales Force Productivity has remained stagnant.

86

Adding Territory Managers (TMs) has not significantly accelerated growth; exacerbated by high TM turnover

 GAP/R/Revenue Producer (RP)  Avg. No. of Rev. Producers

  • Dec. 31

GAP$’000 RP’s

  • Dec. 31
  • Dec. 31
  • Dec. 31
  • Dec. 31
  • Dec. 31

Revenue Producer: Territory Managers and Regional Sales Managers

RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

2014

slide-87
SLIDE 87

RBA sales force strengths & competencies

Customer Relationships

  • Incredibly strong customer relationships
  • Fervently believe in unreserved model
  • Perceived as valued advisor & trusted advocate
  • Highly entrepreneurial
  • “Pitch” to “Payment” End to End Championship

Equipment Knowledge

  • Solid knowledge of construction equipment
  • Ag expertise in Canada
  • Transportation strength in US West

Valuation

  • Equipment valuation expertise
  • “At Risk” Model offering & process
  • Deal Making / Negotiating Skills

New Business

  • 40% of GAP driven by new consignors
  • Adept at targeting end user contractor

87 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-88
SLIDE 88

RBA sales force areas for improvement

Sales Processes

  • Currently inconsistent go to market processes
  • More disciplined execution is required
  • One size fits all approach for some sectors needs to be modified

New TMs

  • Need consistent quality of talent
  • Need to codify critical competencies
  • Take actions to reduce Turnover

Training & Development

  • More emphasis on coaching versus deal making
  • Improve on-boarding
  • Structured training programs including e-learning

Hunters versus Farmers

  • End to End Service Philosophy reduces customer face time given

broad customer base

  • Hunter skill sets should be on par with Farmer skill sets
  • Consistent use of sales tools to hunt and target

88 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-89
SLIDE 89

Key opportunities

Optimize Potential

  • Scientific territory management based on potential
  • Geographic coverage and resource allocation based on market

potential

  • Evaluate current compensation structure effectiveness

Customer Segmentation

  • Optimize selling of both Unreserved & E1 Models
  • Understand customer needs/equipment life cycle
  • Utilize salesforce.com SFA tool to better target opportunities &

improve hit rate

Sector Focus

  • Improve go to market skill sets in Transportation & Agriculture
  • Transfer best practices

Segment Focus

  • Increase focus on Strategic Accounts
  • Differentiate Strategic Accounts approach versus End User

Contractor approach

  • Create “Big Game Hunters” global accounts team

Processes & Disciplines

  • Codify consistent go to market approaches
  • Structured on boarding, training & coaching
  • Utilize sales tools
  • Consistency in At Risk approach and best practice transfer

89 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-90
SLIDE 90

Go forward priorities

1. Evolve “scalable” Sales Force model 2. Add TMs and allocate resources based on market potential

  • Territory management & geographic coverage

3. Retain entrepreneurial spirit but drive disciplined execution, consistent ‘go to market’ approaches and processes 4. Tailor RBA offerings (Core and E1) based on customer segmentation/needs and sector nuances

  • Recognize different sales skill sets needed for various Sectors, Strategic Accounts,

Global Accounts, End User Contractors, Dealers, Do-it-yourself direct community

5. Evaluate current Sales Compensation Structure in the context of new Strategy (for 2016 and beyond)

90 RITCHIE BROS. | 2015 INVESTOR & ANALYST DAY | JANUARY 12, 2015

slide-91
SLIDE 91

2015 STRATEGIC PLAN | JANUARY 12 2015

91

(Webcast will resume shortly)

Lunch Break 45 min