Slide 1: Acquisition of IronPlanet
August 29, 2016 Acquisition of IronPlanet
Slide 2: Forward looking statements and non-GAAP measures
2 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 U.S. and Canadian securities legislation (collectively, “forward - looking st
Slide 3: Strategy enhances customer choice
3 Strategy enhances customer choice IronPlanet ® is a trusted online auction/marketplace brand for transacting heavy equipment and other durable assets, with GMV¹ of $956 TTM² (June 30, 2016) • Multiple formats, core being weekly unreserved auctions • Focus on construction sector • Through their cor
Slide 4: Summary of transaction terms
4 Summary of transaction terms CONSIDERATION • ~US$758.5 million cash transaction¹ • 13.0X multiple of 2017E EBITDA² EXPECTED FINANCIAL BENEFITS • The transaction is expected to be earnings accretive within the first year ³ • Annual cost synergies of ~$ 20 million , expected to be achieved by 2018 •
Slide 5: IronPlanet brings exciting new opportunities to Ritchie Bros.
5 $49 $72 $- $20 $40 $60 $80 H1 2015 H1 2016 $395 $567 $- $100 $200 $300 $400 $500 $600 $700 H1 2015 H1 2016 IronPlanet brings exciting new opportunities to Ritchie Bros. About IronPlanet IronPlanet is the leading online marketplace for used heavy equipment. US$787 million of GMV ¹ (GAP) in 2015 • 2
Slide 6: IP has built a platform for growth based on different value propositions
6 IP has built a platform for growth based on different value propositions PRODUCTS Featured Marketplace • Scheduled public online unreserved auctions held weekly One - Owner Marketplace • Similar to “Featured Marketplace” but targets single - owner, single - event sales Daily Marketplace • Equipmen
Slide 7: Combining RB and IronPlanet is transformative for our business
7 Combining RB and IronPlanet is transformative for our business Offers a superior customer experience a) Multiple sales channels for used equipment sellers and buyers b) More diversified, multichannel, multi - format live and digital sales ecosystem c) Equipment buyers and sellers will be able to t
Slide 8: Offering the ultimate customer experience
8 Offering the ultimate customer experience Ritchie Bros. IronPlanet Combined Core strengths of customer offering • Live on site /online event driven auctions • Established brand equity in Canada, strong foundation in the U.S. • Penetration of construction, Transportation and Agriculture sectors • I
Slide 9: Providing unprecedented choice to used equipment sellers & buyers
9 Live on site and live simulcast online auctions Event - based sales of used construction and heavy equipment Online sales of used construction and used trucks and trailers Online reserve auction and marketplace Online sales of government surplus rolling stock Event - based sales of used oil and ga
Slide 10: Accelerates growth
10 Accelerates growth Ritchie Bros. IronPlanet Combined Revenue growth inputs • Established global network; largest buyer base in the world • Internationally recognized and trusted brand • Mature business with operational scale to drive meaningful revenue flow through • RBFS financing services exten
Slide 11: Strengthens relationships with OEMs and dealers
11 Strengthens relationships with OEMs and dealers Ritchie Bros. IronPlanet Combined Benefits to OEMs and Dealers • Largest used equipment buyer base in the world • Global marketing efforts • Larger numbers of buyers and sellers generate global market pricing • Established, trusted relationship and
Slide 12: Builds on the power of our strong global platform
12 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 Builds on the power of our strong global p latform Ritchie Bros. IronPlanet Combined Leveraging our strong core capab
Slide 13: Enhances technology and digital capabilities
13 54% 46% 0% 10% 20% 30% 40% 50% 60% 70% Q1 2012 Q 2 Q 3 Q 4 Q1 2013 Q 2 Q 3 Q 4 Q1 2014 Q 2 Q 3 Q 4 Q1 2015 Q 2 Q 3 Q 4 Q1 2016 Q2 Online Onsite ¹ For illustrative purposes, Ritchie Bros. and IronPlanet combined would rank 40 th worldwide for value of online sales, according to Internet Retailer’s
Slide 14: Snapshot of combined company
14 RB Auctions EquipmentOn e Snapshot of combined company (US$ millions, combined TTM¹ June 30, 2016) Combined company will have the scale and platform necessary to support growth T TM COMBINED GAP/GMV (Includes online transactions through RB Auctions, E1 and all IronPlanet transactions¹) T TM COMBI
Slide 15: The RB combined company ecosystem of Selling, Buying & Listing solutions
15 The RB combined company ecosystem of Selling, Buying & Listing solutions Buy, Sell or List… Where You Want, How You Want, When You Want Premier Onsite Integrated Simulcast Auction Premier Online Platform With Multiple Formats Premier European Listing Service Reserved Marketplace Innovative Aggreg
Slide 16: Financing plan and pro forma capitalization
16 0.9 0.9 0.6 0.6 0.6 0.5 0.6 0.7 0.6 3.0 2.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 FINANCING PLAN AND PRO FORMA CAPITALIZATION Financing plan and pro forma capitalization • RB has secured a financing commitment sufficient to fund the acquisition until permanent capital structure can be put in place • Pe
Slide 17: RB's updated evergreen financial model (post transaction)
17 PERFORMANCE METRICS Before transaction: Avg . Annual Growth Targets GAP Growth (%) High Single Digit to Low Double Digits Revenue Growth (%) 1 Mid Single Digit to High Single Digit Operating expense Growth (%) Will grow slower than revenues Operating Income Margin 50 bps+ EPS Growth 2 (%) High Si
Slide 18: Mergers and acquisitions strategy
18 MERGERS AND ACQUISITIONS Tuck - Ins and Bolt - Ons Scale Enhancers & Needle Movers Accretive in Relatively Short Time Frame GEOGRAPHIES Drive Depth vs Breadth Focus on the US as #1 priority, grow Middle East and Australia Optimize Canada & Europe, turnaround LATAM Position China for long term SEC
Slide 19: Appendix
Highly Confidential Draft As of 16 - Aug - 2016 Appendix Revenue by region Size of used equipment market Ritchie Bros. family of brand (post transaction)
Slide 20: Revenue breakdown by region
20 93% 3% 4% Americas Canada Europe IP’s platform will benefit from RB’s established international presence Growth potential of IronPlanet sales channels can be bolstered through Ritchie Bros. established global infrastructure Ritchie Bros. support services (RBFS, Refurb , Xcira ) can benefit from i
Slide 21: Caters to different segments of the addressable market
21 Caters to different segments of the addressable market RB and IronPlanet have complementary businesses which when combined will facilitate penetration in fragmented global used equipment disposition market Global annual equipment market size is $ 360 bn » RB is a global leader in used equipment s
Slide 22: The Ritchie Bros. family of brands
22 The Ritchie Bros. family of brands Ritchie Bros. will offer five main sales channels to equipment owners Business units are supported through Ritchie Bros. ownership of Xcira (online auction technology provider) and Ritchie Bros. Financial Services (financial solutions partner for equipment buyer
Slide 23: Question & Answer session
Highly Confidential Draft As of 16 - Aug - 2016 Question & Answer session Available for questions on Investor Call: Ravi Saligram, CEO – Ritchie Bros. Sharon Driscoll, CFO – Ritchie Bros. Greg Owens, CEO – IronPlanet
Slide 24: Reconciliation of non-GAAP measures
Highly Confidential Draft As of 16 - Aug - 2016 Reconciliation of non - GAAP measures The following tables reconcile non - GAAP measures referred to in this presentation to the most directly comparable GAAP measure reflected in the Company’s financial statements
Slide 25: Reconciliation of Ritchie Bros. non-GAAP measures: Debt/Adjusted EBITDA
25 Reconciliation of Ritchie Bros. non - GAAP measures Debt/Adjusted EBITDA Our balance sheet scorecard includes the performance metric, Debt/Adjusted EBITDA, which is a non - GAAP financial measure. We bel ieve that comparing Debt/Adjusted EBIDTA on a 12 - month rolling basis for different financia
Slide 26: Reconciliation of Ritchie Bros. non-GAAP measures: EBITDA and EBITDA Margin
26 Reconciliation of Ritchie Bros. non - GAAP measures Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and EBITDA Margin EBITDA and EBITDA Margin are non - GAAP financial measures that we believe provide useful information about the growth or decline of our net income when