Rb Global, Inc. · TSX:RBA
Rb Global — Ritchie Bros. Auctioneers — Q4 2019 Earnings Presentation
26 slides from Rb Global's earnings presentation, Feb 28, 2020
Slide 1: Move | Build | Grow
~ MOVE| BUILD | GROW CHE 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: Ann Fandozzi, Chief Executive Officer
Ann Fandozzi Chief Executive Officer 3
Slide 4: Sharon Driscoll, Chief Financial Officer
Sharon Driscoll Chief Financial Officer 4
Slide 5: Fourth Quarter Highlights
Fourth Quarter Highlights TOTAL YTD Cashflow GTV REPORTED ADJUSTED from (in billions) REVENUE (in millions) EPS EPS Operations (in millions) $1.4 +3.5% $332 -7% $0.47 +47% $0.44 +38% $333 +131% ▪ US Region delivered strong double-digit GTV growth in both live and online channels ▪ Online GTV acceler
Slide 6: Fourth Quarter Consolidated Performance
Fourth Quarter Consolidated Performance INVENTORY ADJUSTED NET SERVICE REVENUE TOTAL REVENUE OPERATING INCOME REVENUE INCOME + 10% - 28% - 7% + 27% + 36% 355.9 332.2 71.5 158.2 218.5 48.2 197.8 56.3 113.7 35.5 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 • 7% increase in • Total inventory sales
Slide 7: Auctions & Marketplaces - Service Revenue
Auctions & Marketplaces - Service Revenue ▪ Service revenue increase of 13% driven by both strong guarantee rate performance and higher fee revenue from fee harmonization and GTV growth ▪ US Service revenue +19% ▪ Canada Service revenue +7% ▪ International Service revenue 1% A&M Service Revenue (Dol
Slide 8: Auctions & Marketplaces – Inventory Sales Revenue
Auctions & Marketplaces – Inventory Sales Revenue • Inventory sales revenue A&M INVENTORY SALES REVENUE (MIX) decreased 28% driven $200 15.0% by International/Canada 11.8% 11.2% 10.6% 10.3% $150 • Supply softness and 8.1% 8.2% 10.0% $100 non-repeat of contracts 5.0% in International region $50 $84 $
Slide 9: SG&A Expenses
SG&A Expenses ▪ Normalized SG&A was $99.9 million in 4Q19; 4Q19 64.1 16.1 9.8 9.9 up $4.3 million over last $99.9 year including a one 4Q19 time $4.1 million stock vs based compensation 4Q18 62.2 15.1 8.9 9.4 recovery 4Q18 $95.6 Employee Compensation Buildings/Facilities/ Technology ▪ Reported SG&A
Slide 10: Full Year Consolidated 2019 Performance
Full Year Consolidated 2019 Performance ADJUSTED NET GTV TOTAL REVENUE SG&A ADJUSTED EPS INCOME + 4% + 13% --% + 24% + 23% 382.7 1.33 145.6 4.96 5.14 1,319 382.4 1.08 117.7 1,170 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 • $5.1 billion GTV • Service Revenue +7% • Includes favorable $4.1 • In
Slide 11: 2019 Growth Drivers & Executional Priorities Recap
2019 Growth Drivers & Executional Priorities Recap 2019 Growth Drivers 2019 Executional Priorities 2018 • 16.4% online marketplaces GTV Multi-channel New 2019 growth 1 Customer Acquisition • Strong live and online performance in 2019 • Successful implementation of SAGE → good field adoption; positiv
Slide 12: Balance Sheet & Liquidity Metrics
Balance Sheet & Liquidity Metrics 2019 Balance sheet and liquidity metrics Adjusted Net TTM Operating Debt/ TTM Return On Capex Spend Free Cash Flow Adjusted EBITDA Invested Capital (non-GAAP) (non-GAAP) (non-GAAP) 4Q19 4Q18 2019 Capex Spend 4Q19 4Q18 4Q19 4Q18 $298M $112M $41M1 1.0X 1.9X 9.4% 7.6%
Slide 13: Free Cashflow & Capital Allocation
Free Cashflow & Capital Allocation Cumulative Operating Free Cash Flow Cumulative Cash Returned to Shareholders 2014 – 2019 2014-2019 126 84 972 84 84 424 563 675 341 450 47 266 302 193 119 58 122 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 Cumulative Dividends Paid Cumulative Shares
Slide 14: 2019 Evergreen Model Metrics Review
2019 Evergreen Model Metrics Review Evergreen Model (Average annual expectation over a 5 to 7 year period) 2019 Description Target Actual EPS Growth Rate Low double digits to mid 23%3 teens OFCF as a % of Net Income >100% 204%3 ROIC 15% by 2021 9.4% Dividend Payout Ratio 55% - 60% 55.4% Net Debt to
Slide 15: 2020 Financial Focus
2020 Financial Focus Cash Flow Operating Leverage Capital Allocation Management ▪ Prioritize growth; ▪ Continued focus on cash ▪ Debt Repayment Invest resources in flow generation and high growth optimization / Working ▪ Return Cash to opportunity channels Capital efficiency Shareholders ➢ Maintain
Slide 16: Early look into 2020 Auction Highlights
Early look into 2020 Auction Highlights Total Gross Transactional Value $237 Million • Amount sold to online bidders – US$126+ million (53%) • Total registered bidders (in person and online) – 18,100+ *new Company record • Registered online bidders – 14,100+ *new Company record • Total lots sold – 1
Slide 17: 2020 Trends & Insights – Q1/1H Considerations
2020 Trends & Insights – Q1/1H Considerations ▪ Supply constraints in the US continued to ease through 2019 and cautiously optimistic for similar trends in 2020 ▪ Eastern Canada strong demand for equipment. Usage is high and TAILWINDS outlook is positive ▪ Increasing sales force traction selling our
Slide 18: 2020 Near Term Priorities
2020 Near Term Priorities ENABLING OUR COMMITTED ACHIEVING CHANNELS WITH PRIORITIZING AND EVERGREEN MODEL TECHNOLOGY TO DRIVE FOCUSING OUR EFFORTS TARGETS GROWTH MAINTAINING AND STRENGTHENING OUR CULTURAL VALUES 18
Slide 19: Q&A Members of the RBA Management Team
Q&A Members of the RBA Management Team 19
Slide 20: Appendix
Appendix rb RITCHIEBROS.
Slide 21: Fourth Quarter – Auction Calendar Notes
Fourth Quarter – Auction Calendar Notes 4Q19 Live Auction Notes 1Q20 Provisional Live Auction (Total Auctions = Live Industrial + Agriculture) Notes 4Q19 4Q18 +/- 1Q20 1Q19 +/- Total Live Auctions 82 76 +6 Industrial Auctions 39 38 1 Non Recurring 2018 Auctions AG Auctions 6 12 -6 Irvine Scotland, S
Slide 22: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 22
Slide 23: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 23
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
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