Rb Global, Inc. · TSX:RBA
Rb Global — Ritchie Bros. Auctioneers — Q4 2017 Earnings Presentation
30 slides from Rb Global's earnings presentation, Feb 27, 2018
Slide 1: Q4 2017 Earnings Review and Update
DELIVERING CHOICE 04 2017 EARNINGS REVIEW AND UPDATE a“ Auctioneers “il rl RITCHIEBROS.
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: Q4 & FY 2017 Business & Financial Review
Q4 & FY 2017 Business & Financial Review Sharon Driscoll, Chief Financial Officer 4
Slide 5: Q4 Consolidated Financial Performance Overview
Q4 Consolidated Financial Performance Overview ▪ All figures unadjusted unless otherwise noted. (In $US Millions except EPS) GROSS TRANSACTION REVENUE OPERATING DILUTED DILUTED VALUE INCOME EPS ADJUSTED (GTV) EPS 4Q17 4Q16 4Q17 4Q16 4Q17 4Q16 4Q17 4Q16 4Q17 4Q16 $1,295 $1,040 $179 $147 $40.0 $40.6 $
Slide 6: 2017 Consolidated Financial Performance Overview
2017 Consolidated Financial Performance Overview ▪ All figures unadjusted unless otherwise noted. (In $US Millions except EPS) GROSS TRANSACTION REVENUE OPERATING DILUTED DILUTED VALUE INCOME EPS ADJUSTED (GTV) EPS FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 $4,468 $4,335 $611 $566 $107.5 $135
Slide 7: Auctions and Marketplaces Segment - GTV
Auctions and Marketplaces Segment - GTV ▪ Segment GTV increased 24% driven by the IP acquisition volumes and live auction performance in Spain, Chehalis, and Forth Worth. There were no significant shifts in the live auction calendar. $1,500 Auctions and Marketplaces GTV (in $US millions) $4,500 $4,4
Slide 8: Auctions and Marketplaces Segment – Revenue
Auctions and Marketplaces Segment – Revenue ▪ Auctions and Marketplaces revenue increased 20% in 4Q driven by growth due to the acquisition and strong performance in Canada and US ▪ Segment 4Q revenue rate decline – declined 49 basis points to 12.64% versus prior year due to lapping large Private Tr
Slide 9: Other Services Category – 4th Quarter Insights
Other Services Category – 4th Quarter Insights ▪ RBFS Revenues delivered solid 19% growth in the quarter ▪ RBFS Funded volume improved 29% ▪ Mascus delivering strong revenue growth of 40% RBFS RBFS Mascus Revenue Funded Volume Revenue In Thousands In Thousands In Thousands $90,538 $4,623 $2,975 $69,
Slide 10: Consolidated Operating Expenses
Consolidated Operating Expenses ▪ Total 4Q reported Operating Expenses increased 31% versus last year primarily due to the inclusion of the acquisition but was essentially flat on a like for like basis driven by synergy realization and disciplined expense management Q4 Reported Operating Expenses (i
Slide 11: Balance Sheet & Liquidity Metrics – YTD 4Q17
Balance Sheet & Liquidity Metrics – YTD 4Q17 YTD 4Q 2017 Balance sheet and liquidity metrics (all unadjusted unless otherwise noted) Adjusted Net Operating Capex Debt/ Return On Free Cash Flow Intensity Adjusted EBITDA Invested Capital (non-GAAP) (TTM) (non-GAAP) (non-GAAP) 4Q17 4Q16 4Q17 4Q16 4Q17
Slide 12: 2018 Financial Focus
2018 Financial Focus Revenue Capital Synergies US Tax Reform Recognition Allocation (ASU-2014) ▪ Current Income Tax Rate ▪ Exceeded 2017 25% (based on 2017 full ▪ Grow dividends ▪ Q1_2018 adoption synergies realization year) with earnings – delivered $14 ▪ Substantial change million of run-rate ▪ US
Slide 13: Integration & Strategic Update
Integration & Strategic Update Ravi Saligram, Chief Executive Officer 13
Slide 14: Integration Progress Update
Integration Progress Update Q4 2017 1H 2018 Marketplacee launch Drive combined February Orlando auction Integrate sales workflow Implement non-rolling stock GovPlanet contract Customer data integration Unify technology services IronPlanet pricing tool and SalesHub integrated for Connect the Channels
Slide 15: 2018 Orlando Auction
2018 Orlando Auction Delivering Choice Like Never Before…The Combined Strength of Ritchie Bros. and IronPlanet GTV– US$278+MM new company record Record Breaking Auction 24% Combined Company Growth 1 Event….6 Days Sold to online bidders – US$123+MM new company record Total registered bidders (onsite
Slide 16: Leveraging technology to better serve our customers
Leveraging technology to better serve our customers The acquisition of IronPlanet was an inflection point in our business and accelerated our position as a technology enabled asset disposition company Integrated Search Marketplacee Platform Solutions Auction Mgmt Mobile • Helping buyers find • Flexi
Slide 17: 2018 Trends & Insights – Q1/1H Considerations
2018 Trends & Insights – Q1/1H Considerations Headwinds: • Supply continues to be very tight while demand continues to rise; expect shortages to last at least through first half of 2018 • Rental and dealer utilization continues to be extremely high • Non recurring Las Vegas (ConExpo) auction in Q1 •
Slide 18: Evergreen Model (Pre-Transaction + Transition Year)
Evergreen Model (Pre-Transaction + Transition Year) Performance Average Annual 2015 & 2016 Combined 2017 - A Year of Metric Growth Targets Performance Transition & Supply Constraints GAP Growth (%) High Single Digit 5.5% constant currency 3.1% to Low Double Digits Revenue Growth (%) Mid Single Digit
Slide 19: Updated Evergreen Model (Post – Transaction)
Updated Evergreen Model (Post – Transaction) UPDATED Evergreen Model • Post-transaction Post-Transaction (2018 Forward) evergreen model (Average annual expectation over a 5 to 7 year period) metrics assumes Revenue Growth High single digit to low teens 2017 as the base year; the year the EPS Growth
Slide 20: 2018 Strategic Objectives & Priorities
2018 Strategic Objectives & Priorities Three Strategic Objectives Unparalleled Gain Auction Penetrate Customer Market Share Upstream Experience Five Strategic Priorities Marketplacee & RB+IP Revenue Connect The Leverage Structural Platform Growth Channels Technology Efficiency Solutions Growth 20
Slide 21: Revenue Growth Drivers (over next 3 years…)
Revenue Growth Drivers (over next 3 years…) • Share of wallet, new customer acquisition, sales productivity • Sectors and Verticals • GovPlanet • Cat Alliance • International • Services • Energy • Marketplace E and Platform Solutions • Harmonized Transaction Fee We expect our 2018 Auctions & Marketp
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
Ritchie Bros. Auctioneers — Q4 2017 Earnings Presentation on 6ix