RBA - Earnings call transcript Q2 2018

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Operator

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

Zaheed Mawani

on us discuss Good today's morning Officer. Sharon will by Chief results. items, a projections actual involve fact, including and the statement be for risks team. our regulations. Driscoll, for revenue, websites, thank detailed our Canadian website morning, risks results this today Securities joining Saligram, Officer; of forward-looking and statements Investor not uncertainties. Canadian and our operating I'm Q&A joined are gross at uncertainties available call and forward-looking second discussion our of SEC from other our Relations The our investor.ritchiebros.com. differ of Also considered SEC and us the Executive to Ravi and to and cause quarter are our that will well could XXXX The you Financial portion forward-looking as earnings, the on and defined with call are other Comments as in leadership members and and the following financial SEC by significantly future filings include statements auction of that the as proceeds and SEDAR rules Chief

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

measures. which and available EDGAR our earnings as which Form close. SEDAR. available on evening well financial On discuss market review certain our encourage results are this includes financial We website you XX-Q, made quarter non-GAAP to call, and were statements yesterday second our MD&A and as Our we'll release after

today. today's through in Saligram, our of our or dollars turn otherwise XX-Q. recorded reconciliation on release and unless slides financial Officer. our downloaded accompany are see comparable the call viewed be Ravi the financial the discussed over most now Executive For slides directly between figures Presentation Chief earnings can or U.S. and from These the measures a Ravi? Form to commentary GAAP call to I'll non-GAAP live webcast two, the website. identification measure All our indicated.

Ravi Saligram

you, thank our Thank reported everyone, Good quarter morning, second was growth on for up call. and XX% joining in Zaheed. GTV basis second X% you like-for-like and quarter basis. a a on up earnings the

live XX% encouraging, EPS level XX% and last fewer live Overall, fee up a robust across price year. the a were acquisition performance, customer year of versus these selling XX%. second and online high diluted results quarter and positive buyer basis channels, contribution. like-for-like equipment reported proceeds utilization are agency by realization considering all led Our up on in on auction strong prior basis Adjusted versus and was days very new

Let second me review highlights. quarter how the

sign. U.S. positive growth were with strong First, auction together report U.S. quarter, revenues our live had am through extremely online postacquisition. comps, integration. working ever of the which to equipment largest quarters challenges quarter complex is team a and pleased company after an led like-for-like in enduring I tough up, excellent The several the led supply U.S. quarter an in business by the

part auction our and are more online repeat. me driving points with embracing customers dialogue the teams Let demonstrating confidently proof acquisition. ever are of that combined new Largest actively customer as a quarter. These solution tangible multichannel

significantly sales in year new company, pleased teams and best last After quarter, first Strategic Accounts a had report grew, that I'm combined acquisition Our our the back below through execution. Accounts voluntary as tough very as lowest now multichannel focused turnover team's our as Strategic as half. turnover integration with since at has the work thoughtfully strongly in my I'm quickly stabilization XXXX after came X U.S. our on team a that quarters well squarely a performance and particular, and its effort to XX% the point proud in strategy embraced driving possible, group, transactions to is show the to continue levels, first of positioned are now with but a of XXXX. but with we operational

business. at looking our Now Canadian

Grande price positives growth macro underpinned performances, strong Our were from sentiment positive in We improving was packages in saw live auction calendar due vocational GTV Online and Western decreases with and combined U.S. than large the a business. continuing oilfield in our ag assets complete in adoption in very partially our the weakness startup. into offset the at is our Edmonton shift, dispersals auction. deferred softness agency strong momentum proceeds auction These by performance stage by and Canada. of East different the driven which to April Prairie a Canada by complete it's since some third quarter and

level West to rive the auction channel, foundation which d Western is live customers to rather parts and such, existing of The not Canada team new online, services Canada contributed led of remote infrastructure a performance win reprogram Overall, Europe; in Marketplace-E growth experienced live team as Nova changes Scotia more country are of decisions across Middle and on by estate. momentum existing we're revenue, the we strong Quebec, with we customers to of and core in Ontario online and and already about slated Canada. to willing over Canada, the projects flight as acquisition Asia looking more but new are XX inventory customers to Australian to poised inventory Canada encouraging. In sequential additional quite government of the demand in it and fee sales; growth auction partially regular complement to our Canadian auction complementary soft on a drive what loves East. wallet weekly built projects and real In from seems revenue and solid our part in last by concerning the with the and over to growth positive the agriculture We good our start. and share infrastructure or July, significant Eastern higher use calendar regions the the building strengthens is all International, GTV auction, and by to Australia basis were years. live optimistic driven acquisition; offset

historically, Our live particularly that markets. suited in promising culture. are was in success back-to-back collaboration fast auction Marketplace-E Europe. our to in an Chinese demand results auction where Marketplace-E has by not been international some in dealers is and in showing region, it's volumes Japan strong led another given CAT Online growing International the there with markets

continuing to our We cash a our today dividend an to $X.XX, board management's X% rewarding announce underscoring a are increase to commitment dividend, shareholders confidence and pleased dividends. in increase and to through generation strong raising the

the made expense. Finally, the the repayment minimize quarter another our our on flow to voluntary quarter, debt top The strength of in cash $X scheduled grow addition the amount in we to payments. us million model of million repay and prepayment debt $XX our to in dividends first debt of of interest of our $XX this ability on million affords

positive QX in all operational Over first Looking as fewer auctions in our with now our comp growth them versus business showing the last highlights. while It half industrial performance site, auctions that but our XX% live of year-over-year events having year. selling in auction at momentum. bigger, our auction as growth online per Marketplace-E. live definitely also well flow-through channels between QX, XX% strategy is second this major Combined auctions over in making overall of our geographies showed quarter delivering live reinforces through featured

Some notable include our Chehalis, XX% U.S. delivered Chehalis the and X Washington auction, largest in which years auction growth. year-over-year auctions, was

growth. ever auction. the auction Rounding U.S. Florida also out the and million our in largest auction, GTV delivered driving Our national was in key Nashville, growth XX% Tennessee and $XX Orlando, was XXX% notables year-over-year

many vehicles. And motivated and items The we act. Edmonton Canadian displayed than team display Auction down for our our executed in more full to conducted as including XX% Edmonton estate and and at April right X Our put full real auction June we to flagship light-duty which us dispersal in pricing strong our to heavy-duty, sellers shop on GTV one-stop packages, million growth. capability IronPlanet saw auctions buyers the Edmonton allowed The $XXX site yard.

of over million since impressive equipment strength in renewed Edmonton $XX Lastly, auction Saskatoon, million $XX our in the of year. growth in the the the that, the This auction, XX% of Moerdijk, another Prairies, team record-breaking it Canada. Moerdijk the auction on which majority was to auctioned sold Western were In Canada, the on GTV grew Western was pass comp. me proof which Sharon. in let auction positive a delivered XXXX. GTV and is an XX% With largest Internationally, Netherlands previous

Sharon Driscoll

Ravi. you, Thank

with results. by consolidated only of acquisition of our in growth was the X quarter to XXXX. to Turning QX second XX% compared X full quarter of in IronPlanet GTV driven month months in this quarter the

In of shift to strong June impact channels, Grand and across addition, July. by our online the changes and we the Prairie both auctions partially notably of saw offset calendar, Moerdijk live auction from most performance to

spot diluted operating increased a excludes and was XXXX, fee $XX million improved the in result Adjusted We adjusted first X XXXX. $X.XX by million QX and asset rates the and in shareholders the $X.XX is age earnings quarter of million second adjusted higher-value quarter. to income conditions EPS and agency by of approximately excavators, driven income trucks, by 'XX. amortization acquisition, by growth quarter the harmonization crawler the of of categories the the higher costs fee of XXX hydraulic growth in The in per as leverage, revenue of we of articulated an utilization commission drivers points item in in has years year-over-year of economic inventory in overall supported also by channels, plus most tractors and and dump was equipment per U.S. The On proceeds of charge for acquisition. our of growth. higher adjusted partial XX% increase the in of implemented positive versus intangibles depreciation attributable to sold second sector. rental XX% of is saw was result items year-over-year the growth incurred as GTV impairment diluted compared $XX.X operating basis, percentage X equipment. impacted agency offset the higher down proceeds an from share a the strong to some sweet our basis increase price as equipment in which contributing this at-risk The in amortization the to the roughly driven XX% in to and modest nonrecurring approximately cost $X of an total average the expenses the strong these partially been late-model increase revenue in of of quarter rates a increased increase Offsetting all in particularly revenue acquisition-related of

to a We outcome cost million our contain growth, with proceeds year. expenses and same of are effective approximately tax as this was the rate last lower it by while $X interest versus deliver pleased agency observing higher growth ability period drive driven

segment grew the our at-risk Turning driven performance agency by the acquisition, improved realization, Auctions in agency impact of to harmonization. A&M price and quarter and XX% Marketplaces partial proceeds fee strong proceeds. the favorable the

region of execution, brunt is growth major supply the our our the sequential XXX at-risk attributable felt environment, X on This harmonization U.S. channels keep with improvement past improved was the business meaningful our in A&M performance year-over-year and on implemented constraints government of rate positive agency over to the rate basis, contracts, in last our strong of leading posted partial equipment we All U.S. and first is the of the XX.X% deliver entirely the pricing to proceeds like-for-like to however, the quarter. extremely basis our by driven upon performance continuing On impact which versus of improving like-for-like and The live encouraging, versus fee able favorable the is largest way. basis quarters geographies rate and momentum type XXXX. growth being look across significant. back on a the year, QX online better building a and business half. to flat core is both points The rate has performance

rate are current agency imbalance core time. our from QX any changes our at of our the we moment, equipment, to at-risk at of benefiting range rate A&M above end due construction XX.XX%, and making While rate for is slightly for top as such, expected supply-demand to not the strong performance proceeds estimate this

other our services to now category. Turning

of to returns year up the Our and areas is RBFS XX% $X.X in seeing last up XX% were $XXX we of and the funded volumes excellent revenues additional XX% on continue volume the are million, year versus relatively to and with immediate RBFS prior and where million. one invest versus application resources, talent we spend.

also our in to are the ancillary XX% see $X.X business capabilities to fuel continued also of foundational continue Mascus and proceeds this the and very will pleased services our our up as business quarter with we revenue growth of generated we XX% with our as of We this quarter. to revenue key one growth. Overall, RBFS agency businesses. performance million, support growth strong

of reported, acquisition, XX% only the to X% postimplementation in costs X on due some On growth of like-for-like grew comments X basis, as Moving of year-on-year a increased primarily which the services months to of and recognition a I logistical excluding On XXXX Cost million, ancillary to and well XX%. $XX second in revenues. on the quarter. agency last services by of compared full XXXX, expenses. standard expenses to to service month our increased incremental of the support revenue basis, combined costs in the cost and additional of as quarter. wanted new provide growth like-for-like service appraisal of a to within inspection proceeds take cost SG&A moment reported includes and to combination costs our as expenses, the XX% quarter compared services, second

accounting million, expenses are and $XX.X the under When services the been services XX% second proceeds XXXX. expenses from Our $XX.X net agency cost of is reported had removed the logistical represents amount net of million, $XX recorded now and cost ancillary which logistics of which services, include XX% million ancillary against previous previously revenues service of versus of quarter of practices. in

this versus QX RBFS as growth year by cost. we stronger being our business the proceeds how reported incentive compensation due lines 'XX, quarter the to our expenses X change prior manage plans higher Higher performance were of incentive and launched for reminder, previously managed in continue the and to recognition versus costs and in fuel of how to cost we new last combination IronPlanet million, same business only primarily have a in business month multichannel months today. agency increased the full As X quarter investments plus XX% our up government revenues compensation the and with represents our revenue historically $XXX.X SG&A being implemented to driven in XXXX. period with to

higher share share cycling XXXX. quarter, that agency the preceding proceeds, total XX% We basis, expenses unit the which year-over-year was down have expense of due rate sequentially mark-to-market primarily lower On had quarters. also price in in to over the QX is from in a decreasing a XXXX SG&A resulted

SG&A commented QX achieved in our we SG&A as than XX% leverage to expected anticipated on our rate XXXX proceeds, As align cost of this of to and call, a rate earnings we our quarter. agency percentage QX closer better

the to the half year. Looking back of

as such, to expenses improve this greater to critically looking We discuss identify and cost macro our thoughtfully offset at profitability, begin continuing to will all it efficiency the and incumbent and upon us Ravi operating shortly. would opportunities backdrop. will of achieving leverage on drive focus be

Turning to balance liquidity our and metrics. sheet

full as well trailing the increase cash consignors declined of of from million of versus as deals affecting quarter operating to last Our timing of and cash as year free of the of affecting result flow XXXX, timing expenses the XXXX the result million in XX-month a outflows year the fourth as year-end $XXX acquisition. inventory cash a auctions $XXX flows of a interest in

functionality infrastructure basis net projects. projects, We and invested XX-month capital we've enhanced share on as online foundational channels a our in higher other market integration also spending have had trailing

CapEx agency our be XX% proceeds continues agency was of X.X% below Model to year-over-year rate flat and Evergreen Our maximum of of proceeds.

a was X.X%. with MARS Our million $XX were $XXX end at investments GovPlanet of debt, over the weighted integration technology the have was the debt rate our of million CapEx average platform principally and quarter in we investments, interest our infrastructure $XX to Long-term voluntary. the now investments initiatives, the first annual stock half, non-rolling towards which of million the quarter of support program. of end led backend At weighted of by implementation repaid the

debt in results EBITDA resulted Our of the in has ratio debt without an operating repayment, to adjusted favorable adjusted X.Xx. quarter, net together

that determined full addition also still reduction we rate access pleased over which assessed on to also in operational availability adequate we $XXX quarter, credit million, are this the repayment charges. this overall result We facilities SG&A bank our million. savings took year debt will to to in to $XXX announce by a $XXX,XXX run have and is reduce We manage excess our availability by revolver and revolving our driven our will voluntary coverage, We have steps lower of needs. on excess

Before I'd turn the should share I X.X%, sorry. some CapEx I like first half not on say that thoughts to of I guess I'm Ravi, to call the XX%. 'XX. back was – I said

So X.X%. sorry,

Before half I back from am our to with position. share of Overall, of to Ravi, health the pleased the like first XXXX. thoughts overall some I'd turn call I financial the

sheet. to flow Ravi. over earnings cash dividend our turn a repayment, we strong improved to With has and Our call balance and leverage, accelerate are us maintaining solid the debt support driving that, while enabled operating I'll increase our

Ravi Saligram

Sharon. you, Thank

has first Our momentum the second quarter. early from built quarter on the

team across the it's at of contract the GovPlanet Our Defense first effective business XX established fully DLA to of operations Department inventory its In now highly continues XXX the facilities program half, The and U.S. led stock the an additional nonrolling the a making receive positive trajectory. team rollout operational. bases

team services government year-over-year team. increase results and moved the managers for already half business The the our XXXX. of state municipal sector-focused from local through sellers state, in also and first strong XX% responsibility sales local specialized-government yielding specialized to is We with territory regionally-based

a also for in addition the surplus, weekly team of the Wednesday rolling to on auction GovPlanet established Our nonrolling Tuesdays stock. auction second stock

continue we of capture business believe growth that more us. our share to on We to highly-fragmented mobilize government it'll be the bullish opportunity driver be a and for as market strong

certainly bright in performance Our quarter. spot online a was the

and particularly quarter halls, We during U.S. sales Jeter, President town roundtable This and weekly key Jeff seeing more called customer are the managers and new through conducted driving country, online the all territory and with was online and our auctions. our I online. volumes measure strategic progress, the to Hearts across U.S. We the managers, focused now TMs team performance. focus regional acquisition the consigning XXX get Tour, and specific with SAMs of laser higher on and socialized sales frequently managers account to directors embracing metrics X Minds meeting very as The with individual

TM identified smaller barrier inability online barriers and quickly was team driving or especially act such SAM onesies and solicited And to feedback to the nimbly on One more suitable twosies online. on as deals starters. the

of with hosting to our incremental and continues stronger grow dealer with The quarter. growth. in at ideas to and level, an are the and Alliance of sessions positive allow these agreements we the to several business relationships the the a from deals. best And As This allowing more compete empowerment their drive CAT the we'll to at facilitate win second meetings. practices autonomy providing leverage cross engagement, pollinate and of scale is result, internationally signed and end more encore, one more teams to examples as run changes Canada instituted dealer positively network them outcome and to immediately ability local and online be strong

volume backlogs a CAT aggregate high Our down Caterpillar Alliance utilization in relationship new modest to as from have the was but dealer due severe equipment. CAT on experienced we best seen. and is with dealer growth rental We that the whole, ever

continue the great We for future growth a are us. confident, driver in however, CAT will be Alliance the to that

would outcomes, the of terms into our the a now growth transaction, the be of review would it several for we term. to positioning acknowledge terrific fitting macro which overhang in and we our the to long didn't of where In are in a strategically the progress. occupied We remised be thought year us briefly has significant if are integration headlines, year,

largest overall, the plan executed through integration now I parts are would back, complex we integration. And Looking we say of most and well. very the the

has Our come well. team extremely executive together

We are execution. completely complementary skill and focused aligned have driving we we on are and sets collectively,

to drove Our feasible live prior and not leveraging enter and online live business acquisition. began channels, the Orlando markets second teams result key not embraced. was the where auction culture leveraged widely built our and the in sites Marketplace-E on combined something record-breaking auction to in to quarter. February, was sales our capabilities immediately new quarter beachheads online featured momentum that both weekly X in with We our internationally drive We several as first and rationalized

solutions. live infrastructure We and by cost continue investment are brand growing our of our a international investment. intend We growth side to without online the greenfield presence our led marketplace

foundational, is differentiator a and growth. and they capabilities and having innovation our efforts functionality The GTV of year the been instantly don't pace long-term in technology while the benefits, our enablement past over have not we're capabilities. and Finally, the place core our will compromise truly accelerating drive

see all our in RB under significant and all significantly will can Our power customers the platform our growth globally unify launching our search, in and variety truly integrated scale. place roof size increased by one one will of which from power and We the so auction channels management listings drive consolidates marketplaces MARS deficiencies. systems

We solutions. of our also increased around investment platform and innovation pace

by volume. platform the now at around I growth launch solutions for and technology have of excited expect We drive end trusted been than to sellers become the our I do capability to partner ahead. partner in years will and globe am enterprise the full our with upstream more never year the company what their

driven aspire unprecedented the business while and fact integration. we complex shortage, relationships the satisfied more. not technology-enabled disproportionally shortages connects not for equipment our a a the are was our remains team equipment global however, year, through challenges These we are by factors that with without the and and navigating supply impacted and sellers. buyers results We from the performance,

an in sales is growth our We become and crutch drive not need it or teams customers a control cannot have through made excuse. continue it our to clear that we increase of equipment that share new and supply to wallet. First, to

are line. probability improved profitability. Second, but driving clear-eyed the improving driving in on our We're efficiency that and as focused grow our confident we we and top and work performance about flow-through

a returns. and to improve are business applying are our parts level of higher looking We to our accessibility, performance all of

stringently rationalizing We our privatizing additional simplifying and structure and cost discretionary initiatives, are pursuing efficiencies.

built July and share have by some which we In the and we off Marketplace-E. we perspectives start double-digit we the growth like a on in year. including start The half. both the delivered over to quarters, is driven on momentum online has discussed our good in relentlessly and previous second the XX% We focus and both positive like-for-like a adapt, throughout increase was But learn quarter. profitable X GTV also $XXX avoid our to by over a right channels, QX strong million basis as growth. the ensuring July was GTV, past shown actions as I'm closing, encouraged on to agility driving as organization focus I'd on the inactions live

we generated As no company. online more gains And we're of XX% increasing mix second GTV was to postacquisition, momentum. this Over said, have continue auction marketplaces. as online a live through expect our our we quarter longer just

and GTV website. monthly posted auction traditionally metrics have our on We

GTV However, basis. postacquisition we less face of is the the metrics believe publish monthly a on to a as changing of auction relevant, result it and company,

just and acquisition to is we the of important it anniversary want didn't the and was business. get the understand mentioned, auction only. make we are thus, our metrics as part published one industrial to part changes for – to Additionally, to We live overall like-for-like this auctions metrics. any compares, And

the full For first year postacquisition.

these closing, I a solid will had In half. monthly we longer auction say but must we forward, industrial and Going publish no we basis. have on and GTV results a metrics metrics, provide quarterly will that first

reported Our and are a XX% agency on year basis. proceeds prior like-for-like versus up XX%

buyer for for X%. up Bids demands listed were items driving our are We industry-leading base.

million Our all channels, of Mascus, including XX%. average X.X was across up monthly users

were second our as progress and X.X% did compared there in devices. we our continue In our base XX% Additionally, XXX online a mobile the GTV platform. live is our truly year. our Edmonton alone, our sites, make our to strong mobile channels, on the on was mobile sold Brothers of and buyer we prior XXXX of online relationships, Through GTV Ritchie in X.X% to of combination becoming quarter technology, on seller online, purchases

And the institutional are We drive our open that over that, call effects we'd years. next network from continue with investors. to to and questions to confident several like the analysts platform will

As – question limit follow please would Operator, ask we open that and questions? you please one yourself to you up. line to the one

Operator

[Operator Instructions] comes with Radbourne Your first from TD Cherilyn Securities. question

is line open. Your

Cherilyn Radbourne

very much and good Thanks morning.

give Grande just I if auctions was would same-store was July – bit for of hoping in on QX a question perspective First could the in have like, movement you us and Prairie growth and of not what July June? GTV looked Moerdijk into instead of

Ravi Saligram

have but... we Cherilyn, the don't if percentages, know I exact

Sharon Driscoll

sales sales. There most But sale. of with few came the basically prepare with cost might of be most June additional the the go that a to into costs Yes, for the auction. flow the

Ravi Saligram

Moerdijk look of on it did some probably at history our metrics. we could back those what you that give sense go have year. And last and and But Grande on you Prairie since should websites

Cherilyn Radbourne

the million in Okay. were that looked there it net terms repeatable then sales like historical whether of in number? And of inventory a some perspective in I quarter, about that's result proceeds hoping the was QX. for just and $XX.X on And

Sharon Driscoll

Cherilyn, deals are those inventory So deal-by-deal results.

at do the We vary of look and tend we've they had quarters economics weaker significantly to had on that. so particular each strong depending quarters. We've deal. And

services are sale the in included is to and streams revenues. it on profit the that the actual revenue recall, additional are related selling not also the does that include asset you If asset only of and that the that fees

Ravi Saligram

our the deals around because business, full And times. one other this deals disposition are opportunistically business dispersals. at come inventory world and They different is up dependent thing really, business, underwritten Cherilyn on of inventory part is

revenues you you we because to the because at the drive our has to sometimes because constancy – have model are standards be. next think model And deal for to the We'd performance, the have business us sense And lows. because reason accounting really continue we, sure, agency out very and not like-for-like that run the inventory trying why deals, highs, with things. have yourself is that frankly, look way you forecast judge proceeds standard where inventory accounting in you proceeds that's really history one will can encourage those Sometimes investors now and to in cannot figure or volatile. agency

Zaheed strongly take not clarity And analysts investors, we again, So the about how to if and happy through that. it, or would to will think encourage. people on those there's than be differentials more

Cherilyn Radbourne

thank you. That’s Okay, questions. my two

Ravi Saligram

you. Thank

Operator

Your Derek Spronck Markets. comes Capital next with from question RBC

Your line is open.

Derek Spronck

structural Good you changes the any supply any issue sorry, do in afternoon. sort and supply of total it – equipment of – seeing there more that that being the within capturing the their change an see focused the to the have they are equipment equipment element on in it equipment I'm is total of think you you do structural economics dealers Are environment, the fact due own businesses? lifecycle their

Ravi Saligram

Derek. Hi, Sure.

So things. a couple of

we the public on get – filings. only those then evidence Our see we and anecdotal

backlogs and is scripts to the based seen equipment of OEMs that have we shortages. most earnings and – think supply continues on reporting their are I calls be that new there

many harmonized And think this mentioned that OEM remarks, the imbalance I now that fact equipment think supply-demand equipment not as been are of dealers, the rental So got and my in fact the the new the had dealers over more business. yet. also has has OEM fact I backlog backlog, that doing that I prepared that splitted

all the they – to and dealers, the told it at to enough think especially are teams. Bros. off got up. of but we – important able just just farmers. that control me, least, faster, are be to that, customers, Go equipment that's has that. catch why growth point we Don't rentals, mean been Having just OEM those table to like to don't figure just hunters, and don't we've milk churn those in new is are new I what's Go all new but give to us waiting taking for I sales Find as existing we think to customers it, execution, said me that's us, focus out. We what so but their relationships. find because the why that's markets. delivering as the sense. start can't have not large about customers stuff want – far I supply existing on very I I'm Ritchie concerned, our I've So

to to thing, Very me supply for or it don't ball. it. about have So we us tough crystal the the about think talk

driving Let's new getting focus is what which we execution, on control, can customers.

Derek Spronck

That makes sense.

and having Just bit. declined incentivize productivity a that? how about trend more basis do the in Sales that your quarter-over-quarter And for the hunter. for because being a that little you see on are to on productivity you hunting going aggressive being equipment Is a front forward? sales

Ravi Saligram

was. declared sales on to the legacy certain So cause, is IronPlanet about the sold, it's less because team variation And that GTV me just main we've thing more than what I I rather quarter-to-quarter the than significantly it, the think talking of think of – RB they the a had important which level model. was

versus X% like was it XX%. think I

the sales very catch So there's are legacy I'm on up. and and teams with sales And time getting beginning auction embraced beginning conversely, well well. take They're they've a them are our – live online. sell since to RB team, IronPlanet all our period it they to extremely to impressed for doing

lot because up. ramping time ramp business, we them start X people. there'll have, harmonization. takes takes In more with be and legacy that each year to bring overtime, and are not to for as recognize new legacy sell team this product it people years curve. the then more up, a the to a of of each team, coming it And learn IP a turnover to learning also sales or new of sales to And who we there's in of RB, the So period the to have

So all continue the U.S. the sales particularly those how major very the factors in started embracing more. biggest issue, encouragement U.S. us. combined. for But in and productivity good about the quarter improve Jeff this team where particular and I, confident overtime that and Karl happening. feel we will really there's because sales are progression's in will And particular to but be and legacy driver Brian, We sales the in in teams, our very RB gave us online a

Derek Spronck

Ravi. the appreciate you. color, I Okay, Thank

Operator

with Ben from comes Raymond James. lesson next Your Cherniavsky

is open. line Your

Ben Cherniavsky

guys. morning Good

Ravi Saligram

Ben. Hi,

Sharon Driscoll

Good morning.

Ben Cherniavsky

decision stop By the think helpful monthly and way, it's because to publishing your just sensible applaud anymore. not I comprehensively data, I probably the it's

good a So move. that was

Ravi Saligram

Thank you, Ben.

Ben Cherniavsky

just evaluate I to it's how – on but is to sales. some if does familiar deals? money the going them. reflect why your just to I other sustainably how number ebbs deals change, into metric But rate to not, that ability to come more so, that, to underwritten on When on extent that question your rate to old you back And become sure use going understand revenue up I'm they In here you business, predict. going And and guess, if saying because auction the that define make inventory and going like the the My has extent, for and the revenue you difficult hands. better comfortable up, just your been and market this is opportunities higher? out strip make words of wouldn't flows ability to auction – me, does the those would money in

Sharon Driscoll

Ben, I'll at-risk we very confident in are we Again, tackle positions the our deals. that. take with in

pretty what now would as type right readily think don't not as markets the we is the there's available simply deal feel of risk. is and seeing as that we're like, are to that hot customers access I

actually purchased to they are They're a So therefore, path down guaranteed less the straight-rate proceeds. preferring going inventory either go of basis. or to a of

of that into not as we sure imbalance. just start supply want see of we been that that we normal come perform that our above are So we result, would cautious strongly the deals. did very make rate see actually have the about. we – that that positions when being as back But egging we when just on well as of over balance And to at-risk inventory I demand part look over kind rates. we've those we all we're think and the at a And marketplace to our time, talked quarter,

that competition and enough forward. see want to also basically, the We is continue also to just room to give business very fierce be packages compete, those to able ourselves on drive to

Ravi Saligram

add And something. Ben, I'll

proponent in much leaving on how at-risk team's the a teams which that times, think I behind, the too have is – rates behind. with we've rates. we deals those, been pushed major and of been and vociferous supply GTV sales very our and are about – yourself we'll the And leave fact we in constrained our worry to not

better – with all at were year, suddenly, know. capability, that the we analytics just we have, make Africa in Now X are think usually improvement. as amazing we knows looking in do. braggadocious Have absolutely. an a the over I it. come deal, strong overly been Occasionally, we the data stars that that there's side. out, place a the just think, and network from, without good the people where years, X will our are getting our That's over deal will the it where with few some able that got Like a better have and yes, we Gabon Sharon be actually we and have don't last have, south, our align I that we It's and But our to pointed on deals – for larger the in effects we just made we deals better. very underwritten with the just history. being muscle go the

of quarter, because want That's we And steadily more, are to increase. the underwritten will just the yes, in predictable. so from historic move highs it flexibility. kind to volume we taking And And not didn't our X so you only just thing. down it's off. feel these We are on with larger terms more have that. I'd just rates it up deals, want think rather still of I they get

Ben Cherniavsky

that's in as business, should if you still I then and But better at and think should that. think appreciate do up number the I data overtime. and color a which scale that Okay. happen lot that I better mean of it move underwritten analytics, evident is getting are I you

Ravi Saligram

I don't I'm know Ben. further, if think Sorry. I'm going to

Ben Cherniavsky

there it's there an when Okay. conditions change, is you higher market right? I good money probability like you're also higher margin, to tough – the swings, mean, same And be element a that that probability I make of guess, to going in it's a market. is rising make

Ravi Saligram

Yes. the because And Canada, start, in ag you stone. fairly different. hot, and construction, it very happen somewhere to quite in different the be and ag now to get and of thing the completely sectors middle. that, especially especially the And is you in deal in we size embed And But could is, same thing are probably The transpiration you is markets, if construction big is true soft. other Right don't if are ag, once well. it do vary. want – not for a

the everything best that's comfortable So sectoral job because we matters. our – thing I pretty it view, give think But on also I so is. think our to is that we feel know and where based

Ben Cherniavsky

Okay.

quick – up. that have as If I count you follow a a can

from why customer just towards? that be GTV something have the why be more GTV existing on would Or that focus curious fees guys growth some would an drive – you and target, I'm the you're on guys indicative a of organic Evergreen to elected mean base? would of Just that share drive wallet trying to just what you Model. take revenue is not as growth. I

Ravi Saligram

certainly Ben, Yes, very driver look, and significant GTV understand I is of our think, very definitely it. business. focused it it, acknowledge we part are And on

our changed bit, is GTV the relationship things our and the like, quite we've different. the government business However, business, and revenue with as quite models in versus a and – GTV

no the has So business services GTV.

little So like-for-like instance, agency proceeds change. and we think, had, when for X% GTV is I where quarter, growth, there you XX% this look a at

are rate. doesn't were – that a agency what point really really importance, we put completely opposed as on understand for volume, auction not Evergreen focus think that's starting we we but felt diminish company. driving just And the is – We've where because the I to Model, its that got keep down to to about proceeds. a So want that's just just that's we we pure when want to live we marker but

Ben Cherniavsky

okay, Right, fair Thanks enough. very much.

Ravi Saligram

Ben. Thank you,

Operator

Schneeberger with question Scott comes next Your Oppenheimer. from

is line open. Your

Unidentified Analyst

for visibility year about to Scott. the your a on the half a we it talk in bit on Can bit of GTV back please? guys. markets? little comes when Hey, Elaborate Daniel growth there, It's international expectations the little for

Ravi Saligram

markets international first done in half. have well our Daniel, the

at all doing. one the how good doing, we're which seeing will team to in perform. the progress we East Asia area is of And shifts very And they is so feel Europe political soft we given how that. The I'll Australia what are and for parts about far, not performing, But is leave major and any them is just that it feel very about how good is Middle how around very doing, turmoil that. continue

Unidentified Analyst

expectations – about the margin Second me. back and also think us help SG&A we progression? half the in one Can for

Sharon Driscoll

take that. It's I'll Sharon. Sure.

our So back kind SG&A to by quarters. of guided quarter, – recall go you if the one as is of we've shows smaller QX slide that you

So we rate QX would it to our SG&A how similar expect went. to more trend

what be thinking So starts be that about. revenue agency or kind some being fixed. what said, would should improvement. your act of at for thinking agency And proceeds depending We're projection proceeds, see you should to on of some we to XX% XX% is SG&A point, then

$XXX into should for models say million factoring SG&A QX. we your more you in anything that be than not So would

Unidentified Analyst

you. Thank

Operator

comes question next Fromson Scott with from CIBC. Your

open. line is Your

Scott Fromson

Hi, folks.

rather a question. other as or a verticals opportunities would deploy to the as Ritchie to I'm U.K., signed is at look Is Ocado thinking principal the quick to where Bros. technology, its partnership to online point a agreements and which kind food its how use there Just new know a of geographies? partner. the the model in retailer, similar its of a in IP deploy

Ravi Saligram

very take platform. the we're our fact I'm – about Yes, that you're let Scott, Yes, right me technology that. about excited

the right and fulfill still However, embryonic on business potential work U.S. to and we core need in We lot our agriculture. are growth of that. in there's a now

We've that. solve for We to have not code. cracked the got

got something to vertical And us, almost a we've so like – that there. new is it's

stay to we whole is we in on. us. on Absolutely. opportunistically, IronPlanet already cars, thing it's while classic and got We've think – to we strategic, So the not don't opportunities? term, our And something term, the there Long I that's looked it. for so have, is want like are something at focus medium focused be get that our near will an opportunistic But hosting it is distracted. core.

– there's get think don't and We Let's execution, distracted. focused I still mentioned. our on I And meaning it's here. the the to very say room laser only that opportunity really agriculture When it's now all about is I want provision right there's priorities.

Scott Fromson

very that’s Thank Thanks, helpful. you.

Operator

next Financial. comes Maxim question Your from Sytchev Bank National with

open. Your line is

Maxim Sytchev

I terms was talking Hi, of if maybe some mind that that profitability? EBITDA don't updating around wondering in you good we're Ravi, level level way able morning. your back margin the XX% to comfort of being attain

Ravi Saligram

I'll Sharon that. take let

Sharon Driscoll

Max. Hi, Yes.

QX, we very kind think level. historic are which standalone delivered is on basis, back our that margin, actually getting pleased a more into I we XX% of of EBITDA

forward, So we looking certainly see certainly, we as we reason our are no to change targets.

costs. bring that bottom help containing consciously sustainable We to are leverage it as growth leverage, getting on very well will basically operating X that fronts, as the to revenue driving

overall We this efficiency we are better cost structures for into much X are. where transaction, visibility opportunities year our and around so have

we are that's confident target. very much So a achievable that, very still

Ravi Saligram

for But EBITDA on like-for-like growth agency X%. because very team, really and executive And XX% of sequentially the XX% promise that. pretty we'll part pleased and in the But beauty year a cost and good a Maxim the model but growth thing only just delivering for year team, the of job RB back we've it that deliver is that very going X. it, The continue in our important for that on look it it add track grew proceeds we already drive there, flow-through first it's done and XX% we just of that, revenue And ones. me very – other I'm on QX, get to – was already it's X. not on is also was we and rely I promised important continue our just synergies to In – we'll we has X%. additional that was margin. quarter, is I'll But Sharon to and are mentioned for reinforce

some but cost XX% point, want tell progressively growth rate the try that So can't and we to at getting want you half it gets in Ideally first if to down. get XX%, ratios, at to was you quarter and we of when, the keep I that growth. look where second to quarter, revenue

sharing we are calculation. to, committed we if making in the is it. revenue very So lower on XX%, whole we to very we've are the that focused that It's arithmetical are is got of a EBITDA sure marker. nice That's drivers flow-through, growth key than just committed margin organization very – get The message. this and And significantly so a growth. cost

Maxim Sytchev

being And progression, the that's mind, to level where talking able grow you at possible? maybe, the get about half costs timeframe if that the revenue around to do

Ravi Saligram

because rather way it. think working I we to our – than at this just – point, are it's

leave job it that. Our improve is and like try to to at I sequentially to just

Maxim Sytchev

now Okay, That’s me. much. it you helpful. Thank very for that’s

Operator

This concludes remarks. to closing Q&A conference. to back like for session And the now turn CEO, the Ravi I'd for any Saligram,

Ravi Saligram

Thank very you your all appreciate We much. support and upwards. onwards

Zaheed Mawani

Thank you, everyone.

Operator

call. This concludes today's conference

You may now disconnect.

RB Global (RBA) 12 Aug 182018 Q2 Earnings call transcript