Slide 1: Q2 2017 Earnings Review and Update
Q2 2017 Earnings Review and Update August 8, 2017 1
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 3
Slide 4: A transformative combination that accelerates our strategy
A transformative combination that accelerates our strategy Offers a superior customer 1. experience + 2. Accelerates growth Best Together A Dynamic & Strengthens relationships with Differentiated Company 3. OEM’s and Dealers THE RIGHT SALES SOLUTIONS Multiple disposition options Builds on the power
Slide 5: Q2 2017 Business & Financial Review
Q2 2017 Business & Financial Review Sharon Driscoll, Chief Financial Officer 5
Slide 6: Gross Auction Proceeds (GAP/GTV): $1.3Bn in Q2 2017
Gross Auction Proceeds (GAP/GTV): $1.3Bn in Q2 2017 Second quarter GAP volume continues to be impacted by constrained supply Quarterly Gross Auction Proceeds $1,500 $4,500 $1,500 $4,400 $1,250 $1,250 $4,300 $1,000 $1,000 $4,200 $750 $4,100 $750 $4,000 $500 $500 $3,900 $250 $1,229 $1,262 $1,276 $1,25
Slide 7: Q2 2017 highlights
Q2 2017 highlights Edmonton, Alberta: April 25-28, 2017 US$134+ million of GAP Site record for number of sellers Toronto, Ontario: May 10-11, 2017 US$32+ million of GAP Largest Ever Toronto Auction Fort Worth, Texas: May 17-18, 2017 US$41+ million of GAP Edmonton, Alberta: June 13-14, 2017 US$54+ mi
Slide 8: Industrial auction metrics were mixed in Q2
Industrial auction metrics(1) were mixed in Q2 Positive growth in consignors, bidders and buyers while equipment supply constraints impacted number of lots sold Consignors Lots Registered Bidders Buyers +11% -2% +9% +5% 16,700 120,000 180,000 45,000 110,500 163,500 16,000 15,050 108,000 40,400 160,0
Slide 9: Age of equipment is getting older versus a year ago driven by constrained supply
Age of equipment is getting older versus a year ago driven by constrained supply and high equipment utilization Age of Equipment Sold at Ritchie Bros. Auctions 3-5 yrs. old: 24.7% of GAP New to 1 Yr Old 2017 (c) 2 Yrs Old 6.5% 7.4% 10.8% Q2 (d) 3 Yrs Old 3-5 yrs. old: 29.4% of GAP 2016 (e) 4 Yrs Old
Slide 10: Q2 Financial Performance Overview
Q2 Financial Performance Overview Q2 2017 Consolidated Financial Information (All unadjusted unless otherwise noted) ($US Millions except EPS) June 30, June 30, Better / 2017 2016 (Worse) Revenue $166.2 $158.8 4.6% SG&A $ 74.4 $ 74.0 (1%) Acquisition-related costs $ 22.9 $ 0.6 NA Impairment loss $ 8
Slide 11: Clarifying our Q2 2017 results
Clarifying our Q2 2017 results US GAAP (Reported) Adjusted (Non-GAAP) Includes the impact of acquisition related costs and Excludes the impact of non-recurring acquisition impairment loss related costs and impairment loss $0.16 $0.33 Diluted EPS Diluted adjusted EPS attributable to Stockholders attr
Slide 12: Growth Rate
Total revenue growth +4.6% driven by IronPlanet merger • Organic Revenue growth excluding FX impact was flat at -0.4% • Strong Revenue Rate improvements offset most of the impact from volume loss Breakdown of revenue growth/decline, % attributable to item Q2 2017 revenue compared to Q2 2016 revenue
Slide 13: The addition of IronPlanet has been accretive to our revenue rate
The addition of IronPlanet has been accretive to our revenue rate Revenue Rate increased to 13.2% in the quarter compared to 12.5% in Q2 2016 Q2 2017 Revenue Rate Components Quarterly Revenue & Revenue Rate ($US millions) Revenue Rate Revenue 175 16% 14% 13.2 % 12.5% 150 13.2% 14% IronPlanet Revenue
Slide 14: Q2 Cost of services / SG&A
Q2 Cost of services / SG&A • Cost of services and SG&A increased primarily due to the inclusion of 1 month (June 2017) of IronPlanet costs post merger • However, excluding the one month of IronPlanet (for June 2016), cost of services and SG&A decreased over the same period Cost of Services SG&A Cost
Slide 15: Balance sheet and liquidity metrics – YTD Q2 2017
Balance sheet and liquidity metrics – YTD Q2 2017 YTD Q2 2017 Balance sheet and liquidity metrics (All unadjusted unless otherwise noted) 12 months trailing June 30, 2017 June 30, 2016 Better / (Worse) ($US Millions except for percent figures) Operating Free Cash Flow (non-GAAP) $112.7 $131.8 (14%)
Slide 16: 2H Financial Assumptions (Combined Company)
2H Financial Assumptions (Combined Company) The following assumptions are provided on a supplementary basis and applicable only to 2H 2017 Financial Assumptions (2H_FY2017 Only) Commentary Financial Metric Assumption July 2017 Combined GAP of $249 mm • Down 13.8% from July 2016 GAP/Revenue • Macro h
Slide 17: Integration Update
Integration Update Ravi Saligram, Chief Executive Officer 17
Slide 18: Fragmented global multichannel market opportunity for sale of used equipment
Fragmented global multichannel market opportunity for sale of used equipment characterized by sellers with disparate needs Sellers have many disposition channels and sell globally … and these sellers have in excess of $300Bn annually… multiple needs Private Sales End User to Dealer / Rental / Retail
Slide 19: Within our traditional areas of strength, there is significant incremental market opportunity
Within our traditional areas of strength, there is significant incremental market opportunity Full Service Auction Fans Only Give Strategic Accounts Present a Significant Auctions Less than 25% of Their Business Opportunity in the US Alone Using Only Using One of Both RBA RBA or IP and IP Other (16%
Slide 20: We have assembled the broadest coverage in the industry to drive our global opportunity
We have assembled the broadest coverage in the industry to drive our global opportunity and offer a superior customer experience As a result of its acquisition of IronPlanet, Ritchie Bros. is the ONLY full-service, end-to-end asset management and disposition company Multichannel Marketplace Platform
Slide 21: Delivering three core solutions
To accelerate growth and deliver solutions that drive value for our sellers, we will focus our efforts on three core solutions LIVE ONSITE AUCTIONS WITH WEEKLY ONLINE RESERVED ONLINE ONLINE BIDDING AUCTIONS MARKETPLACE THREE CORE SOLUTIONS FOR SELLERS • All-inclusive service • Fast time-to-cash • Co
Slide 22: Technology Together Talent Collaboration
Technology Together Accelerated Talent Collaboration Digital Transformation The combined Teams have quickly IronPlanet gives us company’s senior come together to the opportunity to leadership provide technology improve legacy technology team solutions for our systems at an has 150+ years of unified
Slide 23: Technology Integration Roadmap: 2017 to 2019
Technology Integration Roadmap: 2017 to 2019 WAVE 1: Sales unification, enabling the WAVE 3: Optimize WAVE 2: Buyer Experience combined company Operations Planning and Day 1+ In Progress Unify Online Platforms Unify Operations execution was a success! (Preliminary) (Preliminary) ▪ Employee access to
Slide 24: Immediately upon closing, we took steps to integrate and align our sales teams
Immediately upon closing, we took steps to integrate and align our sales teams • We have optimized sales territories based on market potential; we will have over 400 global sales team members to ensure strong geographic and account coverage – We will have 80 more sales team members than we did in RB
Slide 25: Integration Guiding Principles and Key Pillars
Integration Guiding Principles and Key Pillars GUIDING PRINCIPLES • Do not lose sight of our most important asset Focus on the Customer • Communicate early and often • Make it easy for our customers • Continue to focus on our operating performance Perform While We Transform • Deliver our cost synerg
Slide 26: We have a well-defined integration plan and have key milestones identified
We have a well-defined integration plan and have key milestones identified against which we will measure progress Post Close Q3 2017 Q4 2017 H1 2018 • Deployed training on • Territory Optimization to • Marketplace E launch • Drive combined Orlando “Trusted Advisor” role to integrate sales team, alig
Slide 27: Early Integration Successes – BEST TOGETHER WINS!
Early Integration Successes – BEST TOGETHER WINS! Upon closing we have seen early signs of the power of this combination and early wins… Approx. $90 mm in the pipeline First-time seller consigns multi- to IronPlanet from legacy RB GovPlanet awarded GSA Multiple million dollar 1,000+ trucks and sales
Slide 28: Second half 2017 priorities
Second half 2017 priorities 1. Revenue Growth Position RB to accelerate growth in 2018 Fill TM vacancies, focus on solution cross selling to grow share of 2. Sales wallet, and look to acquire new customers; penetrate new US strategic accounts Grow our global strategic alliance; proactively sign deal
Slide 29: Q&A Members of the RBA Management Team
Q&A Members of the RBA Management Team August 8, 2017 29
Slide 30: Appendix
Appendix 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 Included in the Appendix is a revised Evergreen Financial Model, updated as of Q2 2017 August 8, 2
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 31 31
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 32 32
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 33 33
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 34 34
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 35 35
Slide 36: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 36 36
Slide 37: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 37 37
Slide 38: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 38 38
Slide 39: RB's updated evergreen financial model (post transaction)
RB’s updated evergreen financial model (post transaction) Transaction is expected to bolster growth New Evergreen Model (post transaction) (Average annual expectation over a 5 to 7 year period) KEY SHAREHOLDER VALUE Growth targets Before transaction: PERFORMANCE METRICS DRIVERS Avg. Annual Growth Ta