RBA - Earnings call transcript Q4 2017

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Operator

Good morning. My name is Jody, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers Fourth Quarter Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, Instructions] session speakers you. Thank the will question-and-answer be [Operator After turn over the now will I call to Mr. Zaheed the conference Relations to Investor Mawani call. of open Mr. Mawani, conference. begin you may your

Zaheed Mawani

forward-looking Canadian items uncertainties our that as and forward-looking SEC projections are statements well in Good results Financial will fourth quarter Sharon risks Executive full Comments our detailed that joining Julie. Thank of this the you am results. by Officer Officer. auction Driscoll, and and Saligram, morning and to rules our are today cause other and and Web securities by uncertainties. year for Ravi are you, SEC Also discuss with us gross a Investor revenue, available morning, regulations. I proceeds, as our forward-looking on Chief include site. statement Web joined SEDAR XXXX fact, Relations and not our thank prepared Chief our defined be Q&A team. the or future the today other the call of call. considered for the discussion of will including of involve and will and us Q&A statements members on significantly operating The sites, actual them to members portion filings, leadership the the other the The differ Ravi open for financial of the remarks of Sharon and following and joining portion call management as with from and and Canadian SEC risks earnings, our could

our presented used and industry. liquidity those in differ of or not statement in revenue, gross It’s participants of our financial Our transaction measure definition of may other performance, from value not is operations. a by

our full as measures. as encourage to discuss includes SEDAR. fourth year EDGAR after Form and On closed. this are available Web available our non-GAAP market were will site financial well call, We our evening on financial XX-K, which review earnings you which and MD&A we statements results quarter made release yesterday and Our and certain

non-GAAP measure are can and a the figures identification dollars slides indicated. and directly or U.S. otherwise downloaded All XX-K. today. commentary live earnings or These viewed call the two, the measures, unless in today’s our release comparable through of Form most our accompany For be financial Presentation reconciliation the from our Web slides discussed recorded see between webcast on GAAP financial site.

brevity over now been Executive using While changes use for to in we call percent dollar in may or turn Saligram, discussion, calculated the Ravi our million I’ll figures. unrounded have billion all Ravi? Chief figures today’s full Officer.

Ravi Saligram

results in grew despite team. and the detail. reflect am strengthening by we execution both you, Zaheed. In Good reported on more pleased combined thoughts from of earnings equipment discuss quarter to continuing quarter encouraged which to our our supply. like-for-like in am Thank call. you operating especially I results, a I the quarter softness basis then recognition thank morning, pass And XXXX, I’ll share fourth our fourth Sharon financial joining And the closing and it our my for year. of on revenue fourth everyone.

execution, IP transformative course, lift I our are this integrating can of we XX more working Of to if not remain after aspire acquisition competitors. we the largely every behind do excited and of months day as ahead after closing, us, eight stay focused have to of hard months acquisition. announcement and for more but the is now work as on and heavy our we customers serving

in both and variety innovations. Every global And increased sellers choices our is Orlando becoming We a beginning Operationally, deal format future strengthen and significantly have of ways was yet reshaped reach. new of option combination. best our network the progressive to power buyers demonstrated fully unique working the able surge hold. unprecedented equipment. true local to day predicted last OEMs asset the GTV infrastructure of a in the challenging discovering U.S. these of post With XXXX new rates, macro take management that equipment very saw effect multichannel level are projects a significant We week’s the election state teams with and projects to company. to together heavy and both practices, a The $X.X are our needs and markets’ disposition to production leverage ramp year. in channel have offering in presidential on one were In At high supply dramatic face we equipment full to No in utilization time, billion. same not and of especially increase respond the work, year shortage pipeline headwinds, reported construction U.S. the record the and resulting

on up million were X% revenue Our In up and basis a basis, X% forma of down additional combined $XXX XXXX reported like-for-like, with the a X.X% quarter IronPlanet was company from we like-for-like pro basis. a on like-for-like. fourth on

caused on to are year full results salesforce especially in turnover, did, patch equipment delay shortage normal Alberta's however, higher Our supply, progress a than and of the significant oil substantial in reflection many by We uncertainty in approvals regulatory unprecedented softness fronts. of financial the last made that year U.S. led

million $XX dividends. We operating Let million delivered flow me in returning cash few. to mention shareholders a through before $XXX

represent solid market CAT moral our growth, XX expanding and North XX with of with Alliance returned American [Audio including XX contracts XX% CAT foster delivering auction revenue. XX% places business to through signed agreements revenue over total growth and our Gap] dealers, international and internationally. Our

CAT. and providing strong and We made have progress data to Telematics tremendous in

technology volume and brand product to fourth Marketplace our is successfully made completed we XXXX, We’ve stated improved CAT E have on quarter. the and integration across milestones. also fastest synergy management advancement our targets and significant digital Our We geographies. stated growing marketing. exceeded in executed and our for through all slightly dealers deliver

year. team that, express to me let great my for tireless efforts onto it our pass accomplishments countless their I thank to dedication For and would the these during tremendous year, the others gratitude Sharon. With this like and

Sharon Driscoll

you, Ravi and morning Thank good everyone.

Turning fourth quarter consolidated our to results.

The Our driven comps our site $X.X Chehalis notable our Dallas/Fort in to ever was solid GTV by in Worth, auction GTV increase with GTV recorded. performance acquisition quarterly live strong and along in increased primarily XX% billion, Spain. highest

Additionally, sold featured our weekly increased marketplace QX. auction including and through over channels, online our E, GTV XXX% during

period Mascus. services, quarter On versus Our year. revenue XX.XX% company and consolidated our XX revenues solid basis basis, a versus reported revenue declined last year. same increased versus rate to the increased X.X% prior forma from combined RBFS Consolidated was revenues last points to basis This due year. pro Europe other fourth the growth XX% in acquisition, on primarily a revenue and increase value-added including performance the

the However, quarter over dollars this treaty XXXX, revenue performance of revenue impacted both the was the which due decrease rate in private dispersals rate. to in Canadian inventory and cycling fourth strong

of the positive Excluding fourth generated revenue in impact quarter XXXX, those we growth of dispersals were lapped rate the that XXXX. in

Our by million primarily modestly offset partially to and higher to reported and base operating of of costs revenue. income amortization, our SG&A acquisition, in versus declined This services, in decline of million $XX.X by is driven $XX increases quarter the the our due XXXX. fourth all depreciation

the one-time fourth income also restructuring recorded the quarter. and certain of impact severance in operating Our costs included

versus impact basis, the the income for tax revaluation severance quarter long-term the the one-time the earnings and Excluding to debt EPS of the quarter million. impact EPS these IronPlanet. the of income increased and per the last XX% The the higher restructuring of quarter excluding recently the increased of of the 'XX, was cost compared rate the extinguishment our tax for costs position, of estimated the to favorable in Net U.S. On $X.XX delivered impacted adjusted of Net $XX.X $X.XX net $X.X excluded our an $X.X positive fourth to passed quarter included debt reform, fourth incurred on federal adjusted which interest we an increase required year. delivered quarter we resulting for basis, negatively last operating attributable tax compared acquisition fourth to $X.XX in million in or liability diluted to XX% the shareholders million the improvement tax share $X.XX adjusted complete quarter quarter due to XXXX. the incurred costs year. from XX%. the attributable All-in, to by costs U.S. quarter during reducing for for from diluted EPS income revaluation, the of

X% was For our increased consolidated highest the also The increase to GTV a billion, of the driven $X.X GTV. acquisition, number full was GTV by volume primarily year factors. offset by annual our XXXX, in from but

dropping in resulting year-over-year short consignors, supply realization unprecedent the for in underwritten XX% used infrastructure demand which average foremost, and of XXXX to imbalance from U.S. This overall in principally in the for of desire strong GTV. volume XXXX price contracts the resulted equipment environment, with supply from their demand XX% reduced First strong

left 'XX, number Oil we of to XXXX. ever option significant million in GTV in amounting over Namely dispersals, Prairie in Secondly, $XXX a the we sectors XQ in Grand Western in auction and QX the largest Gas including our cycled and XXXX in Columbus Canada U.S. events significant headwinds.

including Our X% from the value-added reported the consolidated in revenues increased to Mascus. basis year. primarily increase revenue a increases services, This and RBFS versus $XX.X acquisition or other million on prior and was due

combined GTV However, factors X% driven have discussed revenues as year, on our declined company forma I a last basis, impacting the by our pro versus earlier.

versus our together our rate bright real growth other assurance period in same environment program, basis accretive improving rate from last the This in year components our such and Our to spot consolidated the our as XX increase this was rate with points business pricing a strong XX.XX% the revenue benefited value-added government business services. us ironclad with year. for

year shareholders is higher basis tax operating diluted of $XX.X ’XX to higher than liability XXXX of an the prior compared share for the decreased lower for $X.XX of diluted $X.XX EPS higher compared year compared income primarily to reform $X.XX of cost in million the as the tax decrease cost, income expenses We per in a of including year. as acquisition the was a tax XXXX. decreased interest operating result as million Net XXXX and the lower adjusted operating earnings the by income on to net operating as ’XX of effective in Our rate, due acquisition benefit. This $X.XX EPS basis. delivered well U.S. reported and $XX.X $XXX.X a $XX.X result for income, offset million for amortization in attributable year valuation lower to adjusted in on to $XX.X million million and

assumptions on, intend like financial say within the were I’m components we of exception but assumptions our on with the actual performance this But of out provided respective those all Before rate. to quarter second our today, the not overall, pleased call. call. we I’d regarding dialogue our go regarding do for to tax close region I each into detail to communicated the and supplementary of I context move our on

acquisition volume. fourth reported tax quarter GTV options IP tax tax by XXXX. of impact the basis, of better lower and deductibility Our on X.X%, came acquisition versus full during estimates. driven estimates synergies, primarily at on year position half this also of expenses XX% our rate and related This identified Getting one-time reform and effective for but resulting second our marketplace compensation tax by realization year U.S. a up net option performance, stock refined in previously liability was by into our prior significantly than valuation was expected of acquisition the the in the than from the tax driven cost quarter, segment our

QX surpassed GTV and of the in our months experienced Our XXXX trailing during dislocation. of oil the previous XX gas hike peak

the Overall, to basis was the improved XX% to growth versus U.S. and increased year. segment acquisition drove options which reported to quarter primarily in fourth XX% U.S. This and quarter. marketplaces the last on $XXX.X increase a revenue. sales to revenue in team million execution, due Turning revenue

to points live see to revenue in treaty fourth Europe fourth and Total Canadian due XXXX. revenue partially private growth in performance transaction revenue decline robust XX%, was revenue XX.XX% reduced continue in this of international XX quarter driven offset segment strong quarter by and to treaty of We Australia. Lapping Canada with volumes by transacted XX% performance an significant option year. private our large last in deal options XX.XX% by also from the of ’XX marketplaces basis the the

Turning other category. now services to

year $X over being financed since now to weekly options. driver. with is And $X.X were a inception, our to up IronPlanet XX% continues Fourth in customers versus now be solid has which volumes million, business, prior equipment revenue growth RBFS up revenues in billion quarter funded offered the Our XX%.

solid also revenues XX% Mascus an generated growth driven the listings million, subscription. in revenue growth by quarter increase to in Our of $X and primarily

leverage of cost increases expenses. reported addition basis, basis, expenses. to of the expenses XX% up million services with XX% increased Turning now operating like-for-like These our to cost million with IronPlanet quarter, flat combined revenue realization SG&A On with essentially the total margin the $XX to improved growth. are in quarter. in a structure, operating disciplined cost are were however, synergy along driven and operating driven With QX, leverage operating quarter in performance, reported with the from by XX% revenue the second cost consolidated with operating On a by company comes $XX full demonstrate quarter we our to that management. our starting of operating

Looking at a our sequential. expenses on

when volumes services expenses are over those flat as of more volumes that costs auction in a function roughly rate and on such in QX came basis, of inspection as are growing. which with higher cost QX Our services auction moving variable a is

declined revenue This sequentially our fourth revenue quarter the of fixed leverage was improvement of deliver of rate our ability sequential and significantly the XX% to improved in demonstrates expense top-line our performance However, XX% rate our model. flow characteristics versus to in improved driven by through XXXX. of and quarter third SG&A cost

As adjusted margins XXXX up QX EBITDA margins additional proof XXXX year QX, adjusted through from XX.X%. driving full EBITDA of XX%, in to XX% to leverage, an flow point rose

our to liquidity Turning balance and metrics.

the year. a pleased Our net we income increased related of the flow cash with our Despite are year-over-year earnings, flow million of interest costs is to challenges, Long well debt increased X.X% of impact our including strong as free in the annual December lower these expenses to X.X% auctions adjusted of level leverage Orlando increased has But technology Evergreen our and from of revenue. term revenue live generated operating our year was of of into for XX, cash year free as a the of below ability during capabilities prior our integrate during $XXX generate EBITDA XX% our sale. the adjusted cash disciplined interest to by extremely $XXX.X and maximum due at the operating debt average invested to the our which with cash and declined adjusted to rate Model we from the digital IronPlanet is to the CapEx free factors, and debt at X.X%. recent million X.X we from did additional testament of supply as model strength business, of XXX% ratio taken This demonstrated weighted net management flow acquisition. acquisition-related times. to XXXX operating incurred companies

level, on we times are metric below this as priority we desired as adjusted focused net to reduce adjusted allocation repayment possible. Although, debt to as our to capital continue to debt EBITDA over quickly a be X.X for

accounting impact from focus optimizing allocation recognition standard. financial the for reform, be revenue Our managing realizing delivering tax will benefits U.S. on our XXXX synergies, capital the the and new of

synergies. to Turning

of the run end of As $XX million XXXX. focused to staying deliver Ravi synergies track mentioned, rate are we fiscal are and be pleased to on at

XXXX exceeded run are that expectations, we completing million of generating rate As $XX the have end synergies. of synergy our at XXXX, initiatives

the the impact rate from U.S. tax of tax of already XX% in has impact to a lower the terms to earnings ‘XX positive tax XX% net position. In liability in of reform, with the our revaluation resulted federal

QX included been the revaluation lower impact 'XX. value of with of booked IronPlanet does the the benefit acquisition, in this has this Although, million $XX tax assets NOL acquired the in

tax will our based In agreements cash our strategies, such that U.S. We significant structures these will as of identified add reviewing are already as and as we transfer still our tax to arrangements. will continue utilized be pricing be long-term resulting generate and changes, U.S. we and a these losses to benefit grow positive our financing operations tax light the overtime. acquisition. believe to the earnings internal from synergies, reforms But current

For may tax quarters. clearer between regulations, and current based a to International we on be for but quarterly suggest modeling as become to tax over next XXXX purposes, Canada volatility would XX% some the regulations rate U.S. current two expect XX%

this look expect In adjusted as lower terms last get Also, We be times or in also of dividends we known have I to are cash a very accounting as pronouncement, change mentioned XXXX. of It not of beginning debt last operate as topic earnings X.X topic allocation, on of reiterate net adjusted business, discussed understanding we on be in the operating quarter our how manage review short-term. to on we nor flow encourage the does is presentation want quarter, from clear, to remarks fundamentally our disclosures earnings, your as or you well we or recognition EBITDA reduction growth adopting call. XX-K does XXX impact. our the change the revenue our of we revenue capital it our provided we as focused net have over we quarter new and profit, to sheet. our any call to XXX will and detail balance our the and to first quarter debt strictly to prioritizing to third assist our additional the impact in do as in continue from ratio third adoption XX-Q,

as you progress keep on to the we expect this quarter. through We issue appraised

I XXXX. the the our for exceptionally their that of to for team across has It thank challenging to Ravi, year perseverance all company I well Ravi? like us members Before in pass was dedication future. for positioned one would a and

Ravi Saligram

Thank you, Sharon.

activities our first of planned for slightly completed milestones our the marked of we’ve quarter, as of XXXX. several milestones well the first past targeted laid of quarters, continue integration we as for Overall, if XXXX. ahead for track in fourth three as here As half the half bulk for the to of not our integration on fourth successfully we’ve over stay completion we've the key the plan, and shared quarter

few Let in of the briefly touch initiatives me the on first half a critical 'XX. of

the We’re we a contract that DLA and have sites. This have stock has non-rolling already to team IronPlanet momentum. be gained very started U.S. dealer large It's in the complex project would excited logistical across our many a won contract mobilizing

site now operational accelerate search end experience. on We of equipment to well Web will We're the excellent listings and journey expect of on continue towards rblistings.ip.com. the be connect create to to and IronPlanet channels to first Customers half. We for growth. our an customer our specifically equipment also traffic site on rboption.com along variety Web our wide have

Let now changed as which in have fees. transaction fee we the comment we refer five At on last bio-feed, investments me despite experience. RBA, the to in customer the not this significant years

our given product sales this our than Importantly, partially up core closer that we sellers tightness harmonize of combination. accounts relationships over mid-January of was record-breaking were of We're especially the year year. buyers make XX% fees fee of our end demand RBA IP structure of supply, the Registrants transaction it penetrated IT. harmonizing in acquisition, customer increased and was for the and execution to to be to and XX%. million with well line online in our of of felt to channel last the per offerings company. historic Despite the our registration across channel. important as implemented consider customers, to agnostic This and power combined laser and like-for-like as more combined and marketing both importantly, will last competitors we revenues. was seller existing A growth of teams to together average combined the with the double-digits week. on coming our was auction a Orlando year IronPlanet positively in delivered testament company wallet. GTV, But loss high a of strength execution of Ritchie point $XXX It this superb with were XX% accretive slightly our as impact last a peak was continued being proof year, be share use teams. Bros focused but barometer We teams leverage operations amounting new Last

sold strong referrals. and good up also high mix GTV IP came was per lot registrants through reflection double-digits, many Average a pricing. Importantly, online of

also We to the IPs live technology brining innovations, implemented several auctions.

Assurance sold to hundreds and auction a sales using by so auctioneer remotely offering value Orlando, moving pictures. but created of we equipment by in Specifically was the an we it lots the high not virtual live quality IronClad

our Atlanta valueable lots time, first sold our rather estate TAL the in For from than real Orlando. in remotely yard using our we

team; and well rebounding on road auction a the of on Ultimately, do which we Orlando success of transportation. trucks is is scope. see global It pricing did was over a to; majority in performance only first, due is the saw not excellent good second, magnet the GTV, Finally, our location of both that construction, Orlando and is a of trucks. in to we execution mega strong

consigners Our great And teams send get parts pricing of you world. consignments to Orlando. Orlando know different from in the

any to add Orlando’s Based to Before I’d careful like as to will short through Supply dealers conversations year. not General's Orlando moving one numerous to or re-loaders, and customers, the the least matter was in the and tight slice still supply you Nevertheless, through XXXX on, are need that of on and first as extrapolate it. is the warning said perspective and quarter aerial with constraint Surgeon XXXX. OEM. persist OEMs, on results great we someone not way which the no dozers, half be as at is excavators,

and by analytics. technology applying a machine our as learning in a capabilities key are business, and enabler of our investing advanced advancing data We’re differentiator and

it solution have leverage locate manage tools now platform to enhanced informed well assets to while insights our across as inventory repository, them Web solutions tools easier rich find sellers an and search our in we as both Specifically, to all our efficient our site the give Buyers capabilities. manner. their data

our all and buyers find easily looking what on quickly We and brands for visibility are providing and equipment inventory while they're the focused access to largest solutions. helping across

allow to to reach manner. a our extend enhanced more now in customers agnostic capabilities channel search Our us

is OEMs now EquipmentOne play launch large Web growing price true IP reach their allow sellers We is and a dealers, and of our companies own We buy growth customers. allow to it features IP and the on Platform of which fronts account Web but provides our daily customer us fastest both very technologies were channel their and Think to year cetera. It also allows marketplace, reserve and and successfully combined of format. Marketplace buyers E November. that and partnership through E throughout Marketplace offer the to rental Solutions make in control leverage by strategic et a become signs, to it’s allows scope store our disposition and ERP within a Umbrella to and customers systems. site them have it, site. sticky them to pricing site connecting Web control customers to channels,

As to provide appropriate based and time tools, trusted customers and make decisions we to advisors, them data disposition specific classes. insights asset on help for real channels needs our allow asset select their

had Our embryonic, but efforts momentum. gaining steady working a are now few IP RB on each and scaling Both we’re offering. in this current this and area

replace live that integrated and simple highly to IP and looking use option operation legacy -- our Finally, highly system we’re integrated to purpose technology.

one We management platform XXXX. options by live will have technology unified operations and online

better experience, simulcast Xcira technology. we’ll called unified platform efficiencies. complexity course, and will in customer use is project a as Mars our us The reduce continue result to Of garnering while

day. flexible online Ritchie experiences another our app. Mobile make seven the hours Bros, As capability a devices. quarter, a can word approximately ability the opportunity and providing and with the now In of world transactions conduct easy our business and we’re were to mobile days made Ritchie a Bros better the weeks, register are they customers on customer using on X% mobile to search, XX technology, so innovation final fourth options provide around our

outlook for of to XXXX. HX our providing let’s you shift Now

it’s As you forecast do know, provide since we this extremely difficult business. not to guidance

the offering XXXX, rental last tight extremely of the continues model XXXX. to insights your to dealer and as continues quarter first through consideration shortages while you at demand be rise, we’re However, be expect Supply following half very to continues for least first utilization to high.

In quarter. XXXX not our in terms Vegas option have we’ll first Las the option comps, of also

You’ll year. ConExpo we had recall last

quarter as fewer expected fleet major lower, in Dallas/Fort sites first private auction two in of a the deals first Canada is as in to large the the from of an well as and deals quarter quarter. in treaty perspective, given result dispersals in calendar close Worth The sale the first year, therefore, previous non-recurrence Edmonton significantly options come

Transportation take about talk is me continues this let with pricing, and picking to seeing challenges. strength pure is Now, hold. demand Pricing up sector the along supply tailwinds.

oil We up prices slightly also stronger. getting see nudging mining of also and the has positive with

sales stabilizing on force Our improving. is multichannel learning curve is and then

today the had have decent Finally, comps. many options of February January and

where created annual our we three and to it year. the fulsome forthcoming recognize Today, shifted XXXX We now the targets was of reiterating some be an all two to this one model a for achieve EBITDA old XXXX Evergreen were Evergreen meant an the update. On our model and need we not the cycle, the we expectation in is to as challenged business were guidance. and of announced our we year Note, are by the since basis base. of a which revenues. you year. with XXXX, We we the average GTV. recognition over seven year conference our ’XX proxy discussion it in with adoption for model on how notably delivering the later reported the XXXX and Model first years In Turning both supply showed of numbers certain Evergreen forward standard, given shortage. time of the to We’ll have our this on a targets targets as definition basis exception of new our restate most subsequently achievement transition except metrics ROIC and grow in our unveiled average margin when a XXXX we in impacted believe to in of new and reflect by annual Evergreen severely going will five investor we to this acquisition timing on Model

our summarize strategies. objectives me long-term Let and

volume to Our dealers, are; refer non-auction penetrate through the the is et the auction segment, all segment is first, $XXX own segment; segment. billion, brokers, the whole non-auction three upstream rental instance, And because that share auction over key are selling companies, the comes segment, second, to of sales, objectives their where upstream as we this gain segment companies, about retail for globally. to And private strategic non-auction rental to large, billion the customers. very way cetera, $XX

The third to deliver customer experiences. is objective magical

to So objectives, strategic key these five we priorities. deliver have

is segment first share tandem, on fleet. customer sometimes to versus depending RBA the on in based flow, IP event by selling auction sometimes increase both The featured needs; Live weekly and auction

to through upstream Solutions, Platform Mascus. Treaty and is Second drive Marketplace Private E, penetration

unused to business. and technology make channels Fourth Third integrate the finally, advantage to on for off continue are to we up is find recognize constraints that to controlling And a necessary, outside land, our touch to connect challenging to the macro supply synergies. dispose enhance sites conclusion, single provide we level search, step structural relating our all and very competitive of efficiencies pursue rationalize experience. control. inefficient by a listings, and In of tying costs, next customers of the improve have aspects environment is to if

face undaunted laser we together this on we’re concentrate outstanding the and and focused we control. on will mode execution. In best driving efforts However, can integration are are in growth our on challenge what our through of we out essence, of coming

grow. company is one, new simple; are move, Our mantra the we for combined build and

on. XX growth, will we of our over focus growth have teams drivers Speaking

thereby improving our growing through of loyal share customers selling wallet sale First, multi-channel, productivity. with

and gas managers aggressively will growth strategic transportation account and in and mining pursue after accounts new construction, while going opportunistically. pursue We’ll acquisition. oil TMs Our agriculture, and

map business. a truly is is GovPlanet a of the and in and the grow will UK on international tremendous RBA believe and growth US We We now engine. this is

with We’re and Europe marrying RBAs Australia. scale in formats IP’s

this we’ll to if we the open and Energy with find financial questions call service may We’re the that demonstrates Platform E about oil a ways institutional business. very and on and incremental structure have prices investors. not for key are fee Ritchie become that we'd Bros new lower new moved increase end keep A&M rate XX% revenues crews segment opportunity XX%. sectorial of up is Consequently, reputable in marketplace rate Thus, will from to the sitting to our by Solutions analysts we increasing from Marketplace that, And generate reaches basis And rate options XX.XX%. segment to to up and grow. the XX range finally, be revenue to IP. points. A&M revenues like our and we still XX.XX% harmonized revenue for Hopefully, revenue will the upstream. our segment to the for

the one questions. calls, that please ask to one follow-up. question limit past open line with would and please you Operator, you yourself we Jody, to As

Operator

comes [Operator Doumet of from Scotiabank. line of Michael Instructions] first question Your the

open. line Your is

Michael Doumet

So was GTV, strong. weakness, looked on the out the company-specific also quarter you impressive. thought broke Ravi, quite results drivers. macro results what versus into were roughly last QX The speaking, you Orlando quite

conditions are improved least on can sense starting supply to or give a pricing GTV believe I salesforce mostly whether strong Anyway you grew drove Now productivity basis combined it's us at macro constraint. GTV and the if improve numbers? a of despite that relatively

Ravi Saligram

us. I come look Michael, that. let to continue force think have that But challenges growing on And strongly clearly, in we we'll behind and we execution long sales get I'd the better. me referred things -- really to say had believe that are answer a way some I I of

we're it beginning longer only say hundreds not no And supply still and a feeling But me highly a fact. they're still challenges, constraints sound sales teams, to there; to motivated it's point broken a the sorry its customers, but force I'm to I also through quite whole We hum. like personally have lot; really record. of and I our in supply XXXX. anecdotal, would are

did is try Recognize rid seasonality, QX QX? gee, of So you then little in a there the the then how see always people and get rise their just up question do to bump is, inventories.

it. were going focused making making a quite we that did focused much laser lose auction of difference we on we we from after is were share, anything, and and after very The focused it, competitors, that though hundreds think going sure even not segment, share. laser were Orlando, fact sure we I have on in on in gain the if same

Operator

line Your next question Kenneson Baird. of Craig from comes of the

open. is line Your

Craig Kenneson

territory in Looking managers, matures? improves still example a saw how number of of loaded manager and maybe sequential I what the a mangers. at your productivity manager team and your in territory discuss territory for year nice you But it's could first as the you their guess, territory uptick composition are percentage question.

Ravi Saligram

Look, did optimization integration the there force companies. the the voluntary involuntary, we combined of at as turnover, beginning both is no the we because of question sales had territory and

like is territory Turnover new managers. it sales have in business do we driven for has always this issue been So an most companies.

Our turnover exacerbated XXXX. clearly in was

third We it the the U.S. versus fourth. quarter in globally. down brought not of so in We brought down range only have turnover significantly but

like QX and up now hard and I we’re to right don’t longevity. learning Suffice getting breakdown think we that. in the working how so that And to shows that curve. by on in their so the XX many say lost I QX, but only people the training six very that have doing you them we’re

-- When you get they for one the lot to relationships. reference have to have us new got how which now changes the people I Now, think we’ve the come bring in positive its where don’t channel the them is behavior easier two and one things. of biases don’t

the making I I think on that with whole we’re progress blend our am of that getting front. a two. we’re satisfied very good

Craig Kenneson

you’ve compensation follow as as could enacted plan a companies? up, just Thanks. the And two any you changes integrated address you've

Ravi Saligram

answer Jeff, U.S.? that do to for the you want

Jeff Jeter

for very to We've talked our team changes that and component new this plan things reps multichannel. namely that a compensation that production to the Ravi the about. XXXX upstream to Craig, quarterly number our about, then for different got for talked strategic are aligned a drive is accounts Ravi driving acquisition volume the hit year view

multichannel going of are components our So upstream or wallet, about whether I share of new its business to good feel objectives very driving comp gaining aligned plan and very the selling. the strategic that after

Operator

Ben line next Raymond Cherniavsky James. of comes question Your of from the

Your line is open.

Ben Cherniavsky

during to you And markets well conditions, out of think coming were ‘XX to just a of in like Ritchie up. the and we the mid-XXXX other re-fleeting, fact or look the and the performed did in recall in OEMs and with industry. let bad good just keep recession if accelerated very how show times. GTV -- out to better prices were cycles, actually numbers bit customers bellwethers GAAP back the the me I activity well rising, used go think where I in at And it times coming XXXX, Ritchie the that well say Ritchie, always or even macro the I’d were and been talk little scrambling previous about has supply misconception a know

not So this why in at re-fleet, the turnover, this pricing be more would Why to -- and trends your it into be be et activity yards? seeing would the translating different you and would cetera, the why higher point? the shortages

Ravi Saligram

you good the is whole times of point times. This and how been So we and great your our not since a cycle. great historian normal on company, fair do, bad concept question have of

And we’ve And my after seeing XXXX, in started as out. mentioned have really pricing seeing had I the and that, up, in options continuing, XX it’s started who so strong. in our started stated was remarks, pricings ’XX go get that about going not November and feel throughout XXXX, in elections we including been because some Orlando customer did in the things -- but so a we on bad anecdotally pricing where single where we

pricing So is strong at right very now a very, level.

suppliers pass, and and to there just lot on of for a not which there of to or a projects single either frenzy basis went of a just of we’ve Most never So supply seen on also those, that of really all related was to reduced was since the have situation really a that things, usual it’s were of U.S. comfortable problem election feeling their capacities. out local is OEMs, sentiment the talked this contractors state I’d especially production. down This And on top has OEM. to that years to demand before. those for it business the is not but the now of having any a start cutting the the basis of bidding lot many majority huge and the created say thing OEMs restricted a that many this, established been loss been recession, release the to and majors, business have a

So from the fast cycles you OEMs caught suppliers. they could, enough issue didn’t was the it’s not part able they lot nominal help ramp to it unless the if that like not have everyone they were even and of a equipment and see. those And up of

China, in ’XX year, Second which been production used they of machines, the China, the where beginning for domestic export their they and business. many took suddenly have and OEMs few so off to who take to parts of of a the care people own of has doldrums have in

huge dealers had situation you So have backlogs. where had a

is been four in that phenomenon, And U.S. have things been machines six months a actively where months, So they’ve have into rentals. et asked maybe cetera. which certain for U.S., getting dealers the

take fleet. to rental as had a they’ve So

they they’re hard all the release no created not OEMs is So the equipment. of one because get to wants their to I working problem. this solve the sure equipment, And where to going are are new that know

that half some are And them of things the will hoping second towards ease.

of when you the in see that’s So at supply, business. you don’t have one it reasons risk our

will extremely our half say customers that can’t money give Brothers away, our because So so strong, well. hey jokingly Ritchie people they do pricing is think

you the if shortfalls GTV highly correlated it’s In volume drop, at the experienced. we’ve that look with fact,

there’s equipment, So long don’t but we when very you answer have very little can do.

Our right execution is now superb.

as used find the the is did we’re Orlando beat huge and and equipment. bushes said going that, having go a equipment market to we this Now in

Ben Cherniavsky

because opportunity mean, has with growth IronPlanet, story I recently at always about and and been your a more to the even your more day, more about the deploying wallet of secular people share Yes end channels. it’s of

So later sooner should to by guys irrespective that, that hit to of to inflection to what macro you you able be you’re through recognizing but the up going growth, deliver grow the cycle just does, right? points get it’s or

Ravi Saligram

focused Well, that's what we're on.

Ben Cherniavsky

-- part strategy or nearby those should other I that taken to into sales your in markets also have But guys the channels closures If not that yards. to make sure could in those yard some consideration. I yards applaud follow-up that and of like the of really you think other the any mentioned one commentary to be for in you to you the some was was XXXX And I of just lose closing on, go marketplace? know business

Ravi Saligram

decisions. every because we’re right but the that strongly the No, absolutely, and account factual and giving very for -- both the you those -- were to into stuff that’s intent we feel headwinds still modeling and keep tailwinds purposes,

closed. which is intent instance, to our for either, so so And Raleigh, we

try Our City to over or get try and it Kansas it get to and Chicago. view Nashville Louis, Atlanta. or to St. is to And it is

So one piece. is the live

get to second on weekly The option. it is to the

any But because stuff just to didn’t so in do. -- our teams the transparent. we noted of change is we’re places, So we so trying exactly that the what of sales all team sales and it clear these that’s

Operator

question next Radbourne from the of Securities. Your of Cherilyn line comes TD

line open. Your is

Cherilyn Radbourne

question to a XXXX XX% the cautious you you the top-line be to Evergreen a I have And margin you're XXXX, to a wanted around in create you of specifically, guide margin that that EBITDA notwithstanding leverage fairly operating What expressing kind ask Model. the growth around gives to to an to view fact that seem of in going to continue the generate confidence from top-line perspective. a XXXX? the

Ravi Saligram

let Cherilyn, can maybe start it me Sharon and stuff. add then

was all -- we're about. Ben's So beat I don't question I articulated and horse. the to notwithstanding a think want challenges what that I think And supply dead we

grow. in to prepared of And Our out the all growth is now remarks my job to that enumerated figure we have. how drivers I

really that's Orlando we're going reasons well. one of customers new the did which what and after So is

which as wallet, Orlando places. and well we in well did other also We getting of share

other's So the sell core, offerings. each -- not to trying of a there's is improve wallet share on because of customer right two overlap and the it lot now we're between companies

half mobilize growth, Second, instance. businesses. And that going saying year full for that's GovPlanet, in a on ’XX. supply we'll of get contract. first we at think of to have And We not and thing through the we that lot huge a have go we're of forever. as other least -- ’XX, revenue this is

are we're So also, at to but up catch OEMs some new find point, places. to going the going

E, Marketplace. on upstream, I growth said namely whole showed the Marketplace so EX we Marketplace which Solutions, individual Platform and this tremendous area of E, Daily of components Third

because growth. only one got number about much It's projects, we've it's is et not whole on of team. cetera, very And one carry integration are that thing And become anymore. team. minds, the on. so still technology a the all we've now so our about thing drive we're revenue There's focused, will And things. just There

Cherilyn Radbourne

effective cash rate Sharon rate? rate question. then guidance on administrative And with of tax your more decompose then tax maybe an a But that and just clarify an could and tax follow-up into the the you just

Sharon Driscoll

financial So is again, the the changes. quoting cash really through what for without show heels would basically financing that agreements is anything tax of by And comes projecting U.S. arrangements. place transfer tax the business, also up we strategies reform coming rate have what line see consideration the price on what type tax statements certainly we some of so the significant or and deferred XXXX what current on tax of benefit driven I I'm but the our internal with have into as are based U.S. a that in now we

Operator

of next Fromson Your Scott from question comes of line the CIBC.

Your line is open.

Scott Fromson

think combined to the just consistent from I service small? feedback Ritchie Bros. the customer on a new Is say the large customers about quick from question spectrum along what our y --

Ravi Saligram

take maybe me because press to in let Scott some shot I closer quotes ground also we have quickly they but quick Brian, I'll So release. think are and in put and comment at Jeff the a Orlando it, then

auction. live in have innovations of were a spirit the Orlando with of that the into been positive. taken far lot the take there able reception the Bros we've to the IronClad incorporate both and how quite all of They using new Ritchie fact were terms So we that a and in very customers in is Assurance

So I think customers are very excited.

other we've but and thrilled about not had at this have the are we've only Our got been consignees and for Phoenix places, auction they them, options pricing a and variety.

of am getting, in talked a Orlando, add? positive all had are customers, customer company. Jeff we and deal of in about want at I the very the all all direction I to lot the huge feedback you think they Brian, I our So anything to least

Jeff Jeter

Ritchie there We building quite obviously that of customers relationship. and talk customers into we One very have overlap. things that brothers unique thought overlap event. going were I did about Where the was both weren’t the we but Orlando had their IronPlanet frankly lot a

the customer quite really into we to a trying refreshing so IronPlanet into we had for we Orlando customers. company weren't forging think there And there it years frankly few of obviously this and that customers into were Ritchie relationships combined went lot our were competing that for we and volume stronger last where even just competing I the big Orlando for the our competing relationships. and we -- right building solutions in as event that there when change our go year felt with to we building went the year, customers the relief both of last for in So And legacy a theirs, our tension and went weren’t in find and into I auction, was equipment. wasn’t

it’s very, positive. been very So

Scott Fromson

increased feed new the is platform, with by structure. So or combined the that covered harmonized is power there pricing

Ravi Saligram

a reflection like don’t and all, I of So to those at supply demand. terms pricing because is use ultimately

our about this variety, of think the that best sellers. experiences get our greedy the to is customers, really and we’re they value you is is provide punish all I be to create try a And buyers, view. be is what they customer is our providing market that will at job to you and all there hundreds competitors, not if

job best provide Our is customers. for value our the to

Operator

the Michael line Bank from of comes of Feniger America. question next of Your

open. line Your is

Michael Feniger

XX%. XX% of past did margins You’re around through XXXX. time use EBITDA by at margins or And XXXX. XX% the EBITDA the past your ARR in from think was to If look I above guiding I guys before, XXXX XX% your margin you

Your closer XX%. above your clearly revenues is now XX.X%, those to ARR levels,

of how So of now fundamentally it earnings. to to get is future grow model more that Ritchie different about revenue? in its possibly business $X like Is just terms

Sharon Driscoll

cost other streams lines segments, Mascus, operational cost think able IronClad also if it in but come do Assurance, other with our et also drive fee have revenue we to profile. that revenue business new have comes cetera. it I some Those of comes be RBFS, that. are we inspection with certainly that So basically with take a different I to so But

that will been minor come still revenue The those with of this profile additional over costs. some changes. improved have there So business is flow-through

XX% costs back the those to acquiring a true. of a that of at necessarily operating was was EBITDA margin that operating at point the so that was increase we company acquisition so announced at profit And what we remains our the to getting and commitment will rate significantly index revenue, are part compared The as not margin still business. lower to base same

Michael Feniger

under quarters with I belt two mean, have you now IronPlanet. your guys

drop sense if we do how should revenues think, you that the XX%, just increased of to mean you incremental right a So through? through. get what arrange expect margin drop I Sharon,

Sharon Driscoll

you slide So to that I’ll sequential point we back showed. that

our on levels. You’ll are you just revenue And will have depending performance on QX. highest efforts volatility our end And execute at a quarters QX clearly the and managed. continue quarter of and addition, QX inside witnessed quarters more in are up drive like would so expenses where to we synergy and with well we our continuing volume we to volume keep what

Ravi Saligram

I flow business, characteristics think just on changed. through our core add, not have to the fundamentally

the the did have But and characteristics. we SG&A their of to critical ’XX was similar we’ve they we through mass getting party of on cost. Now, but of and just brought it’s to say were has hard we didn’t The And confident base. working where took by controlling synergies lot moments now right we IronPlanet. it are in we’re time the in a reason on really

EBITDA seeing of you’re the there margins. good businesses I to through matter revenue so is So it’s step-by-step. business. getting that commitment just a don’t flow it’s the think basis and improvement, on And a many so XX% offer now

Michael Feniger

downturn the And producing XXXX, stopped the auctions. then equipments OEMs and just mix the of I US. believe oil lastly on on put in at in the downturn up industrial you

Thank showing if you maybe the curious of at equipment of Just of the mix you the auctions, could equipment expect XXXX? for comment what out could age you. up

Ravi Saligram

really equipment. with older in the shortages, did a more think Mike, we’re we getting terms I XXXX, in supply of see age degradation

the was so they And giving -- utilized newer find tough being us people field. to it average because were were less were because things all in that

hope supply that we’ll so get able back. to as And be eases we the

increased mix. were pleased, other but one think we with the actually pretty in which we pricing that actually reasons I one strong a nice of lot is and had the Orlando, very was GTV mix

So we’ll working is have partially a good mix is market keep to to aim at what offer the balance continue it it. our can and based on and

Operator

Financials. And our due Sytchev of to question Bank of the final line the time National comes constraints, Maxim from

Your open. line is

Maxim Sytchev

is we some the about QX? how SG&A if first the we we mean thinking But be sticky playing for is think I going Sharon, at as if you When clearly at first may. I terms the to be mean, that percentage it will million roughly about around question you, Q-on-Q. part that of hit $XX should into how year? look million, $XX I much of versus of be should

Sharon Driscoll

up would be little the to have QX, So just I could do SG&A then expect in a experienced costs and you remove be really those restructuring inside bit you the we based the still of pieces to volume be some incremental that QX. of to acquisition lower, information cost provide. piece the line because But type the only only the And other on embedded would would support that incremental larger additional line. severance showed

Maxim Sytchev

or the about absolute talking percentage the you number? Are

Sharon Driscoll

because inside would go just are little think, SG&A. those embedded components of I bit of that number a absolute down still variable-based

Maxim Sytchev

some share about provide whole a internal want shoots green there could with as dynamic color And issue then that you us. supply signs, from when two on tells point trigger I seeing modeling or you the question and any that don’t but or are those OEMs Is may fronts any the belabor be just of the guess improvement. those please? talk to you Ravi your this quick again, second half

Ravi Saligram

were OEM, if Max, it, give a it one because I anyone on not today definitive thing. who it’s it’s ball. wish one don’t I answer crystal if there’s can I a had know --

to OEMs. lot on harmonizations. them. personally lot field our affected constantly and It on in are not dealers, to a a user it’s based a is all I think to the to based firsthand end But OEMs people it’s our get the of talked our then of talking I’ve composite customers view. internal modeling, all the of really

so things can hope will on what getting track to I let’s improve it’s start from half. in at do in first just is what they not half, in the the some So that back categories, least feel going OEMs -- say is, I’ve second heard certain

just the a large worrying in it I about is. way it think focusing am it than our what control, to on market. because -- it’s not I it viewing me because rather is we’re that, now is And is,

to just We’re going go hunt.

clear the what about. We’ve -- all of That’s very are salespeople Our to to improve cannot new this They’ve hunters got wallet. directed, the share to got farmers, just it’s find they’ve business. got other GovPlanet. we've got be look got be at they’ve is drivers, to whether all

of and supply a go thing after is of a has because go after list whole the customers. strategic target that’s those So knows. this what accounts. who Every list There are we new find to new hoping, salesperson and target customers

job our to that’s get growth and what we’re So is focused delivering. laser on

Ravi Saligram

onwards everybody, and upwards. much very you Thank Okay.

Zaheed Mawani

Thank everyone. you. That today. call concludes Thanks, our for

Operator

This concludes today’s conference call.

disconnect. now may You

RB Global (RBA) 2 Mar 182017 Q4 Earnings call transcript