Rb Global, Inc. · TSX:RBA
Rb Global — Ritchie Bros. Auctioneers — Q4 2018 Earnings Presentation
33 slides from Rb Global's earnings presentation, Feb 27, 2019
Slide 1: Q4 2018 Earnings Review and Update
DeNNE bmoeNOS. ts PLAWET ictioneer Q4 2018 EARNINGS REVIEW AND UPDATE RITCHIE BROS.
Slide 2: Forward looking statements and non-GAAP measures
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”), in
Slide 3: Opening Remarks
Opening Remarks Ravi Saligram, Chief Executive Officer
Slide 4: A Day in the Life at Ritchie Bros.
A Day in the Life at Ritchie Bros. Generating Network Effects and moving beyond just auctions…. December 6, 2018 59% of total • Approximately 295,000 unique users GTV across all channels visited RB properties around the purchased by globe online buyers • Users generated approximately 390,000 session
Slide 5: Fourth Quarter Business & Financial Review
Fourth Quarter Business & Financial Review Sharon Driscoll, Chief Financial Officer 5
Slide 6: Q4 Consolidated Financial Performance
Q4 Consolidated Financial Performance All figures unadjusted unless otherwise noted. (In $US Millions except EPS) GROSS TRANSACTION TOTAL AGENCY ADJUSTED DILUTED VALUE REVENUES PROCEEDS OPERATING ADJUSTED (GTV) (non-GAAP) INCOME EPS (non-GAAP) (non-GAAP) 4Q18 4Q17 4Q18 4Q17 4Q18 4Q17 4Q18 4Q17 4Q1
Slide 7: Fourth Quarter A&M Segment – Agency Proceeds
Fourth Quarter A&M Segment – Agency Proceeds Agency proceeds growth of 8% driven by GTV, strong online auction performance, partially offset by some inventory rate softness in the U.S. Auctions and Marketplaces Agency Proceeds rate (non-GAAP) increased 80 basis points to 13.4% over 4Q17 due to c
Slide 8: Fourth Quarter - Other Services
Fourth Quarter - Other Services Other Services Revenues improved 20% RBFS Revenue growth of 50% RBFS Funded Volume improved 35% Mascus revenue growth of 3% RBFS RBFS Mascus Revenue Funded Volume Revenue In Millions USD In Millions USD In Millions USD $7.0 $122.0 $3.1 $90.5 $4.6 $3.0 4Q17 4Q1
Slide 9: Fourth Quarter - Costs of Services / SG&A
Fourth Quarter - Costs of Services / SG&A 4Q18 Total Revenue growth of 22% / Agency Proceeds growth of 8% outpacing SG&A growth of 3% 4Q18 SG&A leverage – roughly 200 basis point rate improvement (SG&A as a % of Agency Proceeds) vs. 4Q17 Costs of Services increased 18% Costs of Services and SG
Slide 10: Balance Sheet & Liquidity Metrics
Balance Sheet & Liquidity Metrics 2018 Balance sheet and liquidity metrics (all unadjusted unless otherwise noted) TTM Agency Adjusted Net Operating Proceeds Capex Debt/ TTM Return On Free Cash Flow Rate Adjusted EBITDA Invested Capital (non-GAAP) (non-GAAP) (non-GAAP) (non-GAAP) 4Q18 4Q17 4Q18 4Q17
Slide 11: 2019 Financial Focus
2019 Financial Focus Revenue Operating Cash Flow Capital Recognition Leverage Management Allocation (ASU-2014) Priority on debt repayment; Discontinue use of Agency Continued expense Continued focus on cash Proceeds beginning in and maintaining leverage management - focus on flow generation
Slide 12: Strategic & Operational Update
Strategic & Operational Update Ravi Saligram, Chief Executive Officer 12
Slide 13: 2018 Full Year Consolidated Financial Performance
2018 Full Year Consolidated Financial Performance All figures unadjusted unless otherwise noted. (In $US Millions except EPS) GROSS TRANSACTION TOTAL AGENCY Reported Adjusted VALUE REVENUES PROCEEDS EPS EPS (GTV) (non-GAAP) (non-GAAP) 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 $4,964 $4,468
Slide 14: 2018 – Growth Drivers
2018 – Growth Drivers Our Online Channel had a Banner Year Significant Services Growth Online volume of $829 million significantly $829MM + exceeded IP 44% Revenue Growth 21% Revenue Growth Other standalone pure 41% Funded Volume Growth Services online volume in Revenue 390 bps YoY improvement in is
Slide 15: 2018 – Solid Progress Against our Strategic Objectives
2018 – Solid Progress Against our Strategic Objectives In addition to our growth drivers….we made very good strides on our strategic objectives Grow Auction Business Penetrate Upstream • Live auction GTV growth with >65% auctions delivering • Launched Marketplace-E – scaling well with comp growth In
Slide 16: 2018 – Solid Progress Against our Strategic Objectives
2018 – Solid Progress Against our Strategic Objectives In addition to our growth drivers….we made very good strides our strategic objectives Improve Customer Experience & Operational Efficiencies • Integrated listings launched across RB and IP • MARS Platform delivery is well underway; modules succe
Slide 17: 2018 Evergreen Model Metrics Review
2018 Evergreen Model Metrics Review Evergreen Model (Average annual expectation over a 5 to 7 year period) 2015/2016 Description Target 2017 2018 Combined Agency Proceeds High single digit to low 8.5%, 13.5%1 7.8% 19.4% Growth Rate teens [10.5% LFL] EPS Growth Rate Low double digits to mid 16%2 -30%
Slide 18: Creating Value
Creating Value 2018 2015-2018 Total Return* 32.76% 32.23% RBA 1 Year (2018) & 22.08% 18.30% S&P 500 3 Year (2015-2018) 11.56% MidCap 400 Russell 2000 -4.38% -11.08%-11.01% Cumulative Cumulative Operating Free Cash 563 675 Operating Free 450 Flow 2014-2018 302 Cash Flow 119 2014 2015 2016 2017 2018 C
Slide 19: Early look into 2019 Auction Highlights
Early look into 2019 Auction Highlights Total Gross Transactional Value $297 Million 7% growth • Amount sold to online bidders – US$146+ A new million Company *new company recordRecord • Total registered bidders (in person and online) – 15,900+ *new site record • Registered online bidders – 11,300+
Slide 20: 2019 Trends & Insights – Q1/1H Considerations
2019 Trends & Insights – Q1/1H Considerations • End user projects/contracts healthy but not as robust as 2018 • Supply constraints appear to be easing and 2019 is expected to be better than 2018 • Early GTV momentum in 2019 with Orlando, Houston and Tipton auctions TAILWINDS • Will look to capitaliz
Slide 21: 2019 Executional Priorities
2019 Executional Priorities 1 Multi-channel New Customer Acquisition 2 Scale Marketplace-E 3 Grow our Government business profitably 4 Key Set of Reference Accounts for RB Asset Solutions 5 Efficient operations and improved customer service Keep SG&A growth significantly lower than Agency Proceeds g
Slide 22: Q&A Members of the RBA Management Team
Q&A Members of the RBA Management Team 22
Slide 23: Appendix
Appendix DELIVERING CHOICE
Slide 24: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 24
Slide 25: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 25
Slide 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 26
Slide 27: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 27
Slide 28: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 28
Slide 29: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 29
Slide 30: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 30
Slide 31: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 31
Slide 32: Topic 606 – Supplementary Schedule
Topic 606 – Supplementary Schedule 2018 2017 2016 GTV 4,964 4,468 4,335 Straight commissions % total GTV 84% 84% 75% Guarantee contracts % total GTV 9% 8% 12% Inventory contracts % total GTV 8% 8% 13% Agency Proceeds 729 611 566 Service Revenues 750 624 556 Inventory Revenues 421 347 571 Total Reven
Slide 33: Ritchie Bros. Equipment Segment Mix: 2018 GTV
Ritchie Bros. Equipment Segment Mix: 2018 GTV Equipment Segment Mix: 2018 GTV (USD) Other, 13% GovPlanet, 1% Oil & Gas, 2% Agriculture, 9% Construction 57% Transportation 17% Notes: Equipment segments assigned by primary use of equipment make models. Oil and Gas, for example, has a significant compo
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