RBA - Earnings call transcript Q1 2019

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Operator

Good morning. My name is Kim and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Bros. Auctioneers' First 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 your

Zaheed Mawani

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

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

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

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

Ravi Saligram

Good thank constant you for delivered Zaheed. X% everyone, earnings first growth basis. a morning, call. you, quarter Thank our and GTV joining on currency We

growth. Bro. share achieved by Our inventory the mix driven we sales consecutive of growth XX% year XX% which compared In proud Ritchie double-digit particular, last was a growth, to per Services, reported of that's of revenue revenue improved of are revenue, very Financial featured excellent and GTV our and We're higher XXth ongoing Marketplace-E free X%. of performance up significant IronPlanet earnings growth. quarter channel of our and the perspective, cost our way, operating including From GovPlanet led option up and improvements XX%. flow X% also cash up X%, control. in a business discipline capital pleased online weekly strong with The growth

channels the our GTV strong fast led year's Our the for US double-digit supply heartening growth of constraints. GTV years volume another after solid in Orlando performance two strong new Strategic customer see from acquisition. together Accounts Group, and to our with solid US delivering in It's the temporary growth quarter, posted our across growth Regionally $XX GTV live was by auction. million of US by finished up impacted unfavorably last pretty business which all non-repeat business X% the

last Notably pending the positive uncertainty both and elections to stemming QX. provincial solid year, lower metrics start Edmonton the with team decline helped and but results from a good strong on, is create for CADXXX.X that majority from west. very renewed performance. auction Canadian auction Alberta of and The in off oil energy million very and Grande The last was of the in of driven by GTV than and Moving Alberta year's Prairie last posting some super our April overhang elections significantly gas concluded week, was non-repeat our in in sector. flagship flow Canadian the

Toronto week, GTV auction this of achieving We CADXX million. also had record a in

was excavators nearly in last currency XX% QX and very inflection the X% was group pricing doubled begun Marketplace-E the first GTV in by up A have and a by such of Excavators quarter certain led has salient wheel classes loaders flattened a on pricing has reported to assets online an out driven its platform as international year. volume and over volume basis, dealers. significant Our asset International while feature basis constant Marketplace-E. growth higher led business good on and the decline.

a to Recognized to and age total and just a in underperform, to On and big auctions. material of the deals nearly of XX% Orlando of competitive five hold-up, deal in as quarter particular went lower both deals market, few a that other is particular, our of first with just quarter certain We XXXX with not equipment, to in XXX perform act inventory auction. articulated Many be guarantees there. act, inflation underwritten high of of combined Price Moerdijk XXXX XX supply from performance the continued comprise XX.X% pressures equipment strength these extremely gives model points. spot far XX.X% to continues GTV, did deals to for while in XXXX. see us strategic to hand of hour, of in other these first expectations inflection GTV late had those well. five low to start-up equipment our affected demand handling important in of large performed to show costs reduction deals out Age in of the global are years dump up soft, deals in perspective basis some but packages, classes, a assets sweet trucks larger three tractors asset access continue of

aggregate. last of and of five billions not we're stride. these have take deals in underperforming, in in billions While dollars the our about happy successfully we and years Brothers Ritchie deals, underwritten it XX

been a performance portfolio We in have as have profitable and every underwritten delivered whole, year. single our outstanding

Our the and dynamics given hammer age teams, In drops sales is nature equipment. when Also in of of classes deals cyclical two the pricing due and offered first auction. teams of we to That and we industry. to ahead we three But at the the the business. chase exhorted based inflects, nature class inventory sale. the volume what the in pricing predict, are will asset the pricing supply our often industry. cannot of are do purchase our as guaranteed, XXXX, Consequently, heads I to infractions, best occur Market constraints. always underwritten on months aggressively periodically the inflect, of

GTV, In problem. pivoted. the of to inflection, grow goal was rate recent Our a not was light already we've

not a In away make we where fact, from sense. walked deals the economics last did month, few

We tightened better and deals, striking approval rate and have a between balance for are volume. criteria achieving

learning deals We applied the on already in prices. of half confident forward. the our go model, achieve better of are We're again deals our also on benefits seen at-risk with to back straight we'll data, piloting, we as second XXXX. our at-risk algorithmic, machine rates for based when commission shoot predictive parsing We've track, pricing algo be

growing our online continues penetration, our overall to and GTV reflect on between Marketplace-E live channel. turning focus to within our highlights, QX our online mix, Now auction

comparable channel, GTV of on industrial QX grew, XX% from auctions XXXX, our posted over about Marketplace-E In increases live our slightly to in of XX%. total XX% online XXXX. GTV site Our live

quarter internationally just up, sale saw before February. was in and up performances Houston notable Some XX% our the was up days Los in XX%. Orlando Angeles massive XX%, Moerdijk

embrace than versus online in fewer quarter, year. last year. unprecedented and have last XX our by XX% auctions which technologies. auction buyers, all advantage was ag access five buyers leverage. was events XX% take We of GTV And total of the flexibility, and channels, as And our live our to industrial Across purchased the continue

Looking on IronPlanet the at XX% buyers highest ever. our online in marketplaces, grew QX, new

listed buyers Our Marketplace-E by threefold. increase items, in XX% growth GTV significant and up underpinned and nearly both bids was in

shutdown business breadth U.S. our they our items We're regardless sell-through more to Finally, we ecosystem. non-rolling of strong quarter. program, delivered shutdown, of into stock beginning entered from which still is Excuse channel, specifically first listed the a challenges resulting program of growth And building across instances don't new last bids it we and momentum. while and during some of buyers, despite account of our is the buyers number our year platform, have leverage and government scale our base seeing me. the government

channels. the generate network couple one, subsequent and we in and to same period, tangible site couple do registered but Ritchie not to of suggest share register effect they These effects, two, February customer the was buyer in XXXX, in a Marketplace-E But starting again our active examples. RBA like GovPlanet strategy XXXX, and examples good across GovPlanet. In over but diversification Brothers all TruckPlanet you. this, day the transacted XXXX, purchase GovPlanet, across enormous. meant XX -- in on customers buyer their when the of volume is obviously had the example double In in on behave Our example are to that with multiplier it's customer XXXX and a

why of new on enormous. the the see can customers you is focus because Now value business, lifetime

Let times purchasing couple two XX% the purchased since buyers XXXX, buyers that of per on XX% just on five buyers platforms, property interesting GTV of on a is me approximately IronPlanet on of of leave or buyers level buyer of platform. one IronPlanet on you more over with average, purchasing statistic, But properties. active multiple all the

be that excited so Ritchie make year. starting is platform, channel powerful in generating in now, on effects. to buyers and order truly we're multi-channel we buyers' multi-channel, completely will A why Brothers see harmonization can sellers QX fees, comment strong this final of You a network agnostic, full implementing both

Specifically, fee smaller call identical will fee on let auction made structure. Sharon. pass lots IronPlanet's structure the me pertaining that, live With the in to one to be to remaining our

Sharon Driscoll

you, was contract resulted in driven by Total Overall XX% the the X% everyone. offset decline in partially inventory revenues Services revenue growth X% prior a XX% inventory at by of U.S. our was a well Thank in decline XX%, sales growth lower the growth. due partially resulting commission from in by and as guarantee for driven offset other auction channel by partially as significantly the versus higher live was in of and Canada. lots, quarter sales of revenue the total was revenue Europe of value to growth contract revenues, inventory transacted improvement services mix revenue. good from commission lower level the XX% in revenue fees the a performance GTV GovPlanet rate impacted was in quarter by inventory primarily up growth decline in deals higher as sales increase in Ravi, volume total growth of volume in year. a inventory revenue revenues volume the total segment driven RBFS, revenue, well and morning, in an of revenue fee The X% in by The as U.S. lower strong lower mix services combination offset services

and by SG&A Our X% was a million. revenue, total in -- operating Moerdijk sold, last decline cost resulting the contracts to lower these great and inventory improved in new higher profit expenses from up of acquisition was $XX.X costs. as the improvements cost and improvement driven Offsetting higher QX GovPlanet X% Orlando the XXXX. surplus operating performance of started growth only in our software year The in versus

quarter Additionally, higher amortization for with driven improved taxed investment strategic diligent expenses our tax with rates. by on lower we partially resulting growth income a a in CapEx income other XX.X%, the by tax from Mars primarily jurisdictions of in of expenses, due income increased proportion X%, depreciation our interest the our X%, being continued our debt together projects. and net focus operating technology by rate to All-in, higher in repayment, greater offset reflecting and

implemented to inventory remind in is you XXXX new standard we and on, sales will volatile want sensitive the investors accounting Topic that presentation in we highly of mix. as Moving to XXX this recall QX, revenue and revenue fluctuations

revenue volatility and you slide, see last demonstrates out and resulting service it relative this revenue revenues, quarters broken mix. total highlights revenue on nine from total the fluctuations on sales can clearly As inventory inventory revenue by of in growth growth revenue, year-over-year the sales

the up forecasting three offset next two to auction XX%, revenues in in marketplace revenue, down this X% to frame the decline increase total revenue performance Further understand, change revenue. U.S. contracts due can primarily volume A&M by rate X%, XX% higher we with XX% up lower X%, last of for felt Canada was you which sales revenue and sales down in was making a mix you revenue international by current two inventory was were the up revenues. revenue. key to A&M sales by see service I to Overall the is rate To our lower measure can quarters, driven inventory we measures, and segments, commission due the it total And revenues revenue an how As revenue, mix the A&M been important flat breaking in on offset swing extremely quarter. service XX%, rate rate will of versus XX% a partially and inventory between primarily a growth lower moment. down revenue, a fee slides, up volume has deals, over implied for service challenging. year total the and rate decline X% segment and service our in commission guaranteed a inventory at look last and of discuss return the revenues performance in

of GTV. A&M Calculated rate. revenue service Let's revenue total start as a percentage service with as

this lower service The consignor service fees revenue points proceeds contracts QX roughly service on and commission buyer last related but both include rates basis basis guarantee of have to has experienced because A&M our earlier. to revenues Ravi guaranteed revenues, similar performance commission as contracts. XX We discussed than saw was inventory We and rate contract rate straight straight XX.X%, QX lower consistent year our method used contracts a calculation and in performance. in sequential on A&M but

in mix due primarily value the Our rates increase loss. fee positively in quarter the of growth affected to lower

our QX deal through our and and primarily inventory Conversely revenue GovPlanet inventory Regionally, was included larger XX% auction large our marketplaces inventory insolvency last XXX% the sales Prairie auction auction our as at sales U.S. the growth over year. our by was Canadian live inventory onto channel. Moving of segment of revenue. last XXXX exceeded contracts down one strong QX year, U.S. that Grande event driven up

overall at volatility in was Our but sales conditions highlights have impact quarter, inventory higher resulting Europe, when inventory particularly of with the on basis nearly our by international up Middle parts some higher in up a revenue driven And XXX%, single non-recurring what large of a East GTV can and from inventory deals in mix in XX.X% from on Asia, further volume was region basis. points year. on QX XXX the than deals measure a down QX, sequential This macroeconomic Australia. mix region, looked by was slightly that of quarter last volume basis

sold as than and Again, on in a both was of XX% inventory Looking softer In realization less cost the packages. quarter return achieved QX compression inventory QX, at this our implied few rate year. of function over of underwritten a inventory sales rate revenue. we our price in sales larger the primarily QX of X.X% the inventory revenue deals, sequentially inventory of calculated rate this which lower was rate last on was

Moving onto our costs.

in considering Our lot services of growth favorable overall total quarter. cost which growth X%, declined was our and the GTV

partially in business digital offset to Our through had control controllable government and the technology advertising, quarter, related spending. support Ancillary core travel, shipping services cost X%, platforms. seen disciplined the SG&A our stock auction live services is when lower provided of in non-rolling ongoing an professional businesses, program. result promotion, to fees by investments marketing as share in the and in such year. year-on-year of costs due still over costs events $X.X support a to Ritchie million mark-to-market virtually costs, higher and flat XXXX of cost declined the X% reductions and efficient the of or QX, fewer particularly considered decreased unit cost with line Brothers paint hauling, revenue last you repair, in declined cost our SG&A GovPlanet in quarter. are to increase growth the made flat when PSU Services, expenses remove and amendments. light This result positive of impact SG&A in Financial very our We as services

our liquidity balance to Turning and sheet metrics.

driven year. improvement inventory The in balances Orlando of cash Our decrease a significant operating working X% from a a by through XX-month million sold improved income as in over quarter capital we net the flow trailing last up and and underpins CapEx amount in million Effective higher improvements this was On business year, operating our be it inventory will our CapEx QX of Europe. in basis, XXX% flow range. $XX we characteristics model. million annual guidance dollars year rate was the measures our of cash evergreen to $XX last which cash tremendous from XXXX, discontinuing free generation and replacing are $XXX with

to be the $XX expect year, our range of For investments CapEx million we $XX the to in million. full

technology site by in continuing focused other will led imperatives our to CapEx business. investments, growth GovPlanet be technology platform spend capital investments Our to addition and driven MARS continue and our our support initiatives on maintenance to

well with Our $XX repayment debt reduction ahead of an of continues additional to quarter be this million. schedule voluntary

on quarter performance intend current results allocation X.X the evaluate EBITDA together Our reinstating we'll an levels month times dividends and of ratio progress has to within capital with and continue which priorities. in a normal our times. repayment below net Based in resulted positive cash our debt ratios, is XX are evergreen range our operating we our to debt on annual paydown adjusted strong adjusted increase cycle. well an current basis our on pre-acquisition trailing We target flow leverage of X.X in debt to

XX offset $XXX.X on Directors of XJ. XXXX bid This Share of GAAP liability to under common January $XXX authorized lease the repurchase In normal of As months repurchases cash the over million balance also our million quarter, to financial the statement, operating the our affects a value approvals. under subject and for the company assets repurchase announced principally to we right-of-use return the of sheet, next yesterday recognized payments debt issuer dilution. no of of lease are present disclosed new aimed on in but worth option U.S. covenants and our has shares as Note exchange Board future capital. significant impact share program up accounting as the course XXX flow P&L, Topic invested X, statement standard of lease implemented or

generator progress demonstrate We continue ROIC measure key and To XX X.X% QX, against see a continue the cash the intact from financial and progress model significant With X.X% and our Ravi. with sum remain last remain that, technology year. a made turn health strategic initiatives control. to continue positive of to back our I'll growth to to to business flow have improve. call improving we and up We on fundamentals basis and on cost trailing progress strong month

Ravi Saligram

Thanks, Sharon.

that the of journey has we are beyond the IT Now integration completed, about been auction most our extending segment. excited growth

acquisitions can used IronPlanet, of three As the to customers increase We cater share customers portfolio needs that now of by acquire divide Xcira, customers. different of the we equipment new of wallet excellent market AssetNation, a Mascus, the of technology an unbeatable result have enabled and segments. to existing into

The and is first, which approximately billion we XX% $XX the auction segment have share. market

is leadership here objective growing to protect position, share. Our our while

by in principal second selling their and personal the $XXX auction. base and services billion. contacts featured users end and our segment are We is and other is on segment midstream call customer This live this own through online customer independent segment that products privately end-users RB key auction relationships. of weekly the it's listing broker's dominated Our dealers over thousands selling or and

this here drive is objective segment. of penetration to Our

through alternative leveraging brokers variety control through is a to growing or and Our MPE months that reach RB consignors strong reserve a consignors using over offers key in value basis pricing, global is, $XXX strong achieving selling platforms et Marketplace-E, of XX the network offer Marketplace-E cetera effects. rapidly On over which after GTV already a own by just their on formats. trailing are will launch. price case the who million product complete buyer XX-month offering

keep head Finally, dealers business enduring they're customers. OEM segment we're long-term to referred upstream players the decision as infrastructure and companies. dominated through important their strategic pay partnerships retail on relationships. in embedding the in objective clear to enablers accounts and not rental made largest of create by segment this is in with to very a is commonly by since OEMs. to Instead competing these We that value-added ourselves our

asset go-to-market next systems Our will leadership cetera. to pricing this on RB offering have these key be three-pronged which the strong we of each We're here we product that organization inventory sales have ensure is several years. solutions, management segments growth segments. confident in driver focus structure apps realigned tools Consequently, et a includes key our of inspection

go-to-market Given as focus Strategic upstream opportunity. is our on Overseas largest market North Jeff Jeter will long-term strategy President. upstream now and our overseeing America's accounts

Our our team will bags. while sell sell to to offerings continuing channel product Strategic exclusive the our be all Accounts

regional our teams to products core handle Our and share protect our auctions including increase MPE, and midstream. penetrate will all and RBA in IP

sales the world-class you process hallmark sales the organization. let minutes implementing In a and we newly the couple Sales accelerate supplier other is to is change the the which market note, to U.S. sales manager Engine is also to stage that, with and selling multi-channel regional new for Kari key closely enhance level. field-based of for take an will assume focused next At enterprise-wide organization, Kari teams the an environment conditions. a responsibility initiative difficult data successfully Sales help better role, online She The driven it provides any work Chief program, SAGE even territory it's productivity. overlaid heart sales momentum of multi-channel understand as effectiveness U.S. with to that initially this take brought activity behavioral new and in Taylor, SAGE. business tools will to sales On in accelerate focus me the the growth this field Generation created our with stands of mindset Regions. and that on our Activity and Officer our succeed teams

focus timely consignors customer will KPR and our team. common to expectations the acquisition We've creating using business. and lists growth pursue of SAGE global when the generates allow increased territory will this call new framework acquisition, which sales of later key launched in We sets to Sales second be outcomes have salesforce.com customer that and be face SAGE half SAGE special customer measurement Cloud created, time they a new by and globally on TMs already on loaded targets existing to business will new feedback we multi-channel XXXX. clear a our new and incentive. of as month

ahead as supply to progresses gradual of the equipment while demanding constraints easing expect US. a we Looking rates year recognizing the in we year the start especially for of a remain that Toronto to high Edmonton in environment with utilization in trending the well the We're of rest and it's that performed QX. weeks first see and me to QX positively. off excuse good growth Canada highly in – momentum. and GTV pleasing it's regaining is six is

large States the have ahead in insolvency few deal partnership a pipeline released also We we're that building we and with of ago. press Brothers in us days QX Gordon which in a United

revenue modeling new combined will agency of investors with in reporting difficulties the the proceeds, business. Given presentation our the discontinuation analysts we and have recognize that

key of state categorically terms nothing changed of the our drivers. or to want the has fundamentals we However, business in that

ourselves to Model basis. all hold to stated continue be as and that of on Evergreen incentivized continue the to We accountable previously same measure

affected that measures to EPS by key model refresh presentation that range discontinuation the digits and And On of double to of your low was is growth. the agency not mid-teens. the in Evergreen has proceeds been memory in

for and new share generate consequently, we our expect per guidance, volumes, do five and provide have business deliver our at-risk conviction rates growth strong in earnings key the strong execute full ability against we to to annual XXXX priorities, a not XXXX. year of we normalize Although,

I are thank two please open hard entire conclude, want let's Bros. and it take for work team line globe with questions. across the to we ready our questions Operator, to person. Before per limit Ritchie to their And and all that to dedication. Operator? we the

Operator

[Operator Instructions] from first Spronck comes from question Derek Your RBC.

Your line is open.

Derek Spronck

equipment, you are indications continues of thank because there equipment for the age. at used any taking to constraints starting that looks it supply looking to it my the loosen Yes, like Are questions. age

suggest it's metrics would So other you the I would opposite, that but starting seeing that would loosen? any assume that to are indicate

Ravi Saligram

you Thank geography. one Few hi. things it Derek, for that. depends on

we U.S., in core pause to been is and elections and flowing of Canada, the why a we're really Toronto is And GTV Edmonton auction, has quarter see back as and places button Canada sure beginning of, suddenly, we're the and there U.S. in seeing pause of For that's unpaused which and seeing in we and sort seeing and -- tremendous other also things tremendous friend really sure, internationally people a that's which supply have is auction we're in good. seeing the primarily as definitely X% two are mean says X% of politics waited more first why is Bryan because encouraging. after deals. for very that rather pretty button some I Europe, -- that's of inventory its the for provinces kind we're damn fact had that loosening constraint, of Turkey my with loosening the like growth we business In years the real parts on

are indications. those definitely So

Secondly production definitely, sense we're huge tsunami hitting we But It's when we are a not and be us. gradual. U.S. like seeing going when to in a look levels. at the talk that step-by-step we to is and beginning dealers, now to is it's there surge

that is supply there going think I is demand a -- demand on. harmonization

not So, I'd go all-in-all headwinds don't definitely, bad say, tailwinds bite if What for say XXXX. gradual the improvement you as as I least can it. at sure it's or have is XXXX

Derek Spronck

or proceed say we Okay, bit a went that's the rates allowed higher. agency commission to when I the we'll Could but helpful. a little know that rates you to I don't you proceed of move the pickup harmonization quickly harmonization And that include am lots agency see fee same once fee, expect if this, in full rates? just smaller the

Ravi Saligram

say So agency Derek, proceeds, you I can't. can just

I means to really that is I effects we ultimately we maybe the yes, one channel make same But, a to conscious on you harmonization -- one. that the all to positive yes do we're our similar they reason the we say, should expect it was because the think sure sure one smaller buyers. really lots governed SEC, we done by are for it fee but impact rates especially and experience That's the due think harmonization -- the yes, make So continue. was by are This you but can not by top-line big are that last not want still and competitive the key that first but have the look to do at all want very the improvements did we extent agnostic. piece, really

Derek Spronck

the you. Thank thank you Okay, for time.

Operator

Ben from Your comes James. Raymond next Cherniavsky from question

line open. Your is

Ben Cherniavsky

guys. morning, Good

Ravi Saligram

Ben. Hello,

Sharon Driscoll

morning. Good

Ben Cherniavsky

to want clarify around just I the commentary Evergreen. the

they still changed or have the relevant I been proceeds the ROIC So being emphasized pulled in is know assume that they or growth something what particular what? agency components are But that by target is correct? still is that's all all that you would un-impacted are intact. of EPS I And

Ravi Saligram

Yes, a as with had because our -- agency the of we just set, nothing Sharon didn't average that presentation a objectives sort We talk that -- talking as thought me then proceeds volatility are are we very are all it thing cannot things are to of things add people that to that of start ROIC and because and of any like and we CapEx, that that we But ratio, that agency has it did absolutely against percent you so inventory, felt one payout relevant -- the in add. can mention felt tenants the talking sort proceeds was the sometimes about All use dividend doing present Because the that didn't a forth now. that of are all cannot of presentation, if we're we meaningless. Ben revenue, on five tracking intact. as Evergreen seven that was do to Sharon completely or year let to unchanged percent will was do think express The it those it percent. we EPS, clearly about. be things and tenants

So we've of hey on annual just guidance a anything there give is there? that. you to on add you to Sharon want range said, sort just

Sharon Driscoll

are previously still as too that made comment we kind Model original the Evergreen the incentivized metrics think I of Well presented. we internally was all on

them. work we'll deliver very So our to still for we standpoint, targets are those committed to and

Ravi Saligram

basis. that And our incentive still go on

views about just instance for committed key all all we have and can our the calculations those of but to It's measures the also those we own you we're statements EBITDA certainly those. was and how of we're and come cannot all doing -- to all former margins presentation expression, one your information. and very at tenets on because look so against the And talk

Ben Cherniavsky

Can ROIC me just the for what quarter disclosure, you months? the trailing I was is it remind new just but know first sorry it's and target maybe XX what

Sharon Driscoll

and is trailing, end quarter X.X% by the of Evergreen for first XXXX. So the was XX% the target

Ben Cherniavsky

think that that's And sights? there's you wide achievable in you gap still there your think a

Sharon Driscoll

capital it's We're doing within that reducing right so and in is job very still growth our estimates kind good certainly debt, the the a and certainly predicated getting of today of earnings it's on reach. shape

Ben Cherniavsky

were was sort investments I'm plan you've target some that original appreciate initiatives or four the not And in your years to because making guys got going GovPlanet lot three a of and debt sure of that's technology also generate ago? be that and of part the of come obviously investments you these of part you're equation, other down. some set the that'll when that all capital -- cash will But

Sharon Driscoll

technology that The capital of originally model just for range investments that in set dollar the we are investments still overall it certainly all that Evergreen range in estimate our CapEx and total are within covered provided guidance. we've

issue. that depreciation the basis, And an not also not is to be EBITDA an should margin attached that number. on the impacting So

Ravi Saligram

range capital that say even below we fact, below gave, range. In I'd the with well guidance the is the

clearly on a monetize very in sites. trying then global to make do then careful also capital when to and new than lease have investing expenditures sites and [indiscernible] other you not change systematically are to have U.K. the because or So we expired, you any

EPS that And something ROIC are so margins, we are those have the EBITDA focused the is laser we -- on. things very the

Ben Cherniavsky

Okay great. That's much. very to I Thanks clarify. what want

Ravi Saligram

you. Thank

Operator

Your next Research. John from Northcoast question Healy comes from

Your open. line is

John Healy

lend I of other little potential Wanted the on And continue you was there. what's at well you to be continuous so in could the proposed. ancillary you in the some growth ask RBFS ancillary as terms in the more comments secondly, service does services move as then as just can that much you. of RBFS do rate if there omni-channel is Thank those the or the offering, RBF to runway a of line, get the we some about helped assess or offerings customer curious those penetration or base? to you to help other bit different do see customer the products lag to base you those of how and attach your able as terms neutral can business, kind guys maybe of be those penetration amazed to rates ways

Sharon Driscoll

Ravi add rates talked and business start pleased previously Certainly, we type of it view it and certainly penetrations like that internally kind card of model. how so the has reaching Certainly, our within are Yes, grown. we captive color. to capable with almost I'll can of RBFS very kind credit we've

currently amount mid-XX me Ravi, overall I kind rates. so am XX here if with and we're to wrong correct penetration but private in, card the think I of XX% of And kind

just opportunity that customer see that existing we auctions. they addressable follow if items unsuccessful help outside of GAAP through auction, we our are still in sold purchases So we will our the as so servicing have of program, them approved, are basically fairly customers significant the to is equally, that at a are fund and customer channel. But

ways to point the a accelerate opens to so more and to our even into that in and is customer looking of And that can existing the other service team value up financial result, add at also continuing entrepreneurial potential nature in of your types very base. driving growth as products

John Healy

Good.

Sharon Driscoll

brokerage other moving that assisting launched shipping is deals which With ancillary, the different are that and Logistics places is we've RB and a hauling factors of doing couple with in network. growing of these is other which we're offer respect the in a international which inter-country key international a is type inventory region equipment growth to through our lot there

Ravi Saligram

So only between who et their gave captive urgent what the cetera look, thing companies have to the she answer was anywhere I'd add said to and finance XX%. OEMs XX% Sharon very

issue So direct to is We now we addressable that as out. you to customers rate, take customers, an as but want competitor, and pointed we auctions follow it's RBFS as for touched if go real who the something infinite want our also good at with buy the team our on a et the they long to actually people buy dealer now and so addressable buy in GTV progress could OEM have allow and not their all to they making but financing allow Sharon if it's go front. we not of them approvals. we'll also run think cetera, still now are financing offering

over will Gov help. thing also think time So I the

a their there if and amazing and -- So mark that other the as it that and with very related our double-digit people take out is of proud effect of do it to connecting a and to is fantastic is team go more also don't addressable things supply work we replenish RBFS two-year job years, build is GTV, us launching start leased really lender partners and part get getting a comes proud, those to the three network of do the growth gem you're just very teams. so lot our lot equipment, for But we is a helped. before why how very, closely quarters the pay Case you things as learning Jim and XX because for to to to say this of market and ever efforts. with the an do we your I'm more pad going are at it used if their to

John Healy

just understood the I question on wanted make Great. buyback to last And wordings. the sure I announcement, one just

So are million expect of just you've $XXX XX the which exhaust color time just end within the XX stock dual-listing, nuances up do for the that with Is to gotten over authorization that buyback by $XXX get in I any months? next be do million was Or authorization next there worth expected there. is this to pace that months can secondly or whole you to repurchased. I'd that year? Board to hoping some you And then

Sharon Driscoll

Yeah over the but of that do just it time will certainly, we're it we are we it still is now exchanges. will subject, applying period do for it, expectation and certainly through we our a

done are what -- this we've waiting we've their we approval. we different for than before. So When no is before. This done

any So I to think listings. dual there's intricacies don't related the

is We base that taking, route purchase both are that TSX on to so will exchanges. are the doing but we be it able NCIB the through which is we

Ravi Saligram

And this to John, very offset to is be really option to just clear, dilution. clearly add,

and to blanket need So to one the extent the shouldn't be on that -- we we authorization dilution. get auction it cover

tranches of whatever do it option needed we for year, this will offset some couple dilution more. then be because may is year to next the and it So

in we get place. just So the to that but so NCIB the we authorization, want have

it's but and and offset much just it's we So can allocation less. capital that option nothing to where be the we very nothing have -- dilution tailored more, for

John Healy

Excellent. Thank you so much.

Operator

from next William De Your Larry question comes from Maria Blair.

is open. line Your

Larry De Maria

morning good everybody. Question. Hi

you're actions and As you relates it the said forward. just to going revenue rates, taking understand to -- your you're on you auction back service know track some wanted marketplace I and are revenue I comments.

mid in first kind that upper for toward moving revenue, given of service XX% performance the reversible that we implying comping the forward? the should actual that XX.X% is weaker be trend quarter secondly the the should So up probably range? is bottom And that then

Sharon Driscoll

relatively estimate. understanding One, to a we again an new the a revenue want is level and perspective this to XX% focus to forward, that -- just best be that improvement that It achieve we will your a to metric because new we range type Yes be of in there's may of make mention to the conclusions kind calculation. in so. is on service it at calculated, show that assume low XX% operating there you we historic on you going can expect divided we're guaranteed sure how the continue to this but with mark own of the clarity so terms will is presented, contracts. it's it We've is safe draw we given that total GTV's measure. a by are on how graph Based to

Ravi Saligram

as we we our but get this we'll along, point. is starting own go you good And metric, showing more as experience you with I give a think Sharon perspective

Larry De Maria

to we're more those it get rate up revenue are And or again. actions they around raising back to trying this to guys was where service Ravi, designed you the comping are revenue taking,

Sharon Driscoll

performance when actually of the -- that is top look all we've I still this at at our historical relatively end previous at, range. So, guided quarter's that back ranges

necessary. we're correction looking So, not certainly a major that's at

was not had going just kind inside we're -- of the necessarily to cautioned market rates it XXXX, lofty that we the we think experienced repeat. I of

I inventory now of rate what to we're does up not at and QX doing our inflection think the in guaranteed contract. how and performance our piece improve experienced the this is commission looking that now we're price to only that of that we're looking pick relates we've managing on business matter

Ravi Saligram

we it's range depends. have it even which down, because all fluctuate the can also and have call and I cautioned guidance you If this underwritten over-egging rate very up -- we which previous with while basis, bounce point but pretty because to important something reiterate bounce along is to business that our overall, talk consistent can to previous business, can we Sharon the been quarter can we have you against said sometimes adhered on including what we adhere have about that just do sometimes really lot rate can't fundamental

rate. strategic usually more a business Ag you lower we lower, that to international be if accounts tends are get more get at business strategic If accounts more you get If lower that's -- growth rates.

higher. depends be to So, it -- tend the all Dow rates

view, good over we but think off the in range and even given a It's caution either overly it. past clear we just really -- pessimistic. past, that we've come very guided a pretty us. has has for mix about getting the feel exuberance We have been the a -- not always the we marker So, we're or way

Larry De Maria

understand. you much. very Okay, Thank

Operator

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

open. line is Your

Maxim Sytchev

Hi good morning.

Ravi Saligram

Max. Hi

Maxim Sytchev

be maybe kind of of Ravi you was question it just a at And lower. to right at-risk bit down up seems think there dial got RBA, I when then started contracts. now, to a terms in that process thought a it's ramped

generating? the can maybe perspective I and of from the or that point to exposure in guys initiatives that What analytics terms some not do overall was bucket in if a internal term are mean to performance obviously you So, productive improve objectively you at-risk. very QX you can

Ravi Saligram

to -- deals up that give try will you few do more will and you on south And to of we that, rate you we as pricing out go five look depended don't I said that Max, the -- factors after is about team this this good we of underwritten why clear is so there; very GTV? ask think -- are as of Yes, have if here's deals, very lot XXX the stuff on occasionally, because of and dollars people and it really and the classes, asset is historically I do of weren't business we inflects. underwritten have a are said, hey, I there go they this continue that critical business large be go but in. that -- were thing number area. when a to ironic when billions question at It and pretty go supply like And the constraints and when

-- big So, have whole last competitors be who in year we have goal not our problem, think look, volume. volume I try don't alone and it pivot really are us, a we grow great has all been the teams but told just here we volume, have the XXX U.S. aggressive, was the after and think we -- the I to going

So to that deals seed take you auctions. that need sometimes strategic to

don't and just walked all where to from there few the back downside business. here, fundamental going there's give a Head who we knowing sure but that that all pricing at Olive, valuation if we've realized certain that Doug sense that I and don't his will don't bit, the a of to a with of taking pivot. make getting classes have were pivoted a and impression to tremendous a this some their right are we've sitting a clamping that the really right my more mentioned down we'll Pricing through that our away Tommy from gone people little of making because focus to valuations. was XXXX-XXXX part the into go better to in are make bit a now amount we in pivot but sure after. walk and we kind want prepared but as good we're deal now, how asset So, in just know is But that economic don't to money, both running look And deals upside, They I I issue, -- things them. an back is that remarks, and now now there stock, them deals want we is of away actually lose luck are that

addressed end too judgment. aid that bit. with machine hey, are world. overall, that that's under on a the my I our we Yes. piloting together. saying, I'll I because the has lost little god, in last are that's say one phenomenon and affected few thing performance stuff a see fact is this July, So, what from by learning a if into data model the we're one we'll going -- taxonomies more will a issues and to it oh we refined all do. deals the But of the No, thing to get IronPlanet came like think I piloting And it this worked to this had and it. has we of been as and I and we refined we voice use team, But a for whole have been up temporary But, and pricing that the rates about am it algo is essentially which you analytics not the

We are good at it.

Maxim Sytchev

terms year auctions in of, that helpful. unusuals sure of if QX the can question provide you quarter? pacings And of on no. for an terms should last are Yeah, if just versus of aware there on That's we anything any for last update very the in be upcoming

Ravi Saligram

on… can you that up if put So

Brian Glenn

share. retail The

Ravi Saligram

we and just Why that just on let's will and that going put here. we're that the don't put get together through -- because website,

Maxim Sytchev

Okay. Thank you.

Operator

comes Kennison Craig question next Baird. from Your from

open. line Your is

Craig Kennison

this good Hey, last changes, now that force sales your conversation. change the few asked morning. sales and years, SAGE IronPlanet your have leadership changes of about to lot I In in a and and with ask introducing you're wanted to SAGE. you other embrace

the sense change this has to and Just Just trying the impact has the -- pulse had any on to get it team of or team here. a all turnover of been receptive productivity? how of

Ravi Saligram

who are I'll Look, me people our from very sales both got hear call Great. are win, quick you to view Jeff to want SAGE are the and then I committed, And the both we've -- think I let and give around passionate. should a close the who really directly think amazing and Carl. on very Brian, ultimately world that. sales on people

person but trying the an to yeah, Ritchie person, new, so, multi-channel online. they And or trying sell are is onto all us taking now whether live who's to IronPlanet sell a it's Brothers

You see brand. new mean Marketplace-E plus success the had I fantastic. our one $XXX think we million year, with on have tremendous just that's I in can

more need this So, we -- of -- predictable, very look, day, though the makers is the at is the sales and SAGE to essentially our is and are to business the force, you need routinized we go just next what is -- to market. make best is deal regular evolution this a of this it world's what way end

bottom [indiscernible] support. full done have launching so whole It's as been to up, all this this with inputs down Council, And get with we as conjunct in RSMs. program we've TM top their we're the and much created

all the to the I and of come end think the customer spend because the that, of can time place. sales the want putting face so your of on more way we're look, to Ritchie Brothers' trade we're saying, bread. they're at looking take they we this in things day the road and old enthusiastically, We're now lot the just do face people trying how that to used in fairly enablers be at time of time, because our and all with you plus enable a

So -- is productivity improving. and

who and why pretty from you to comment Brian? but have the you So a hear sales want manage good, don't directly all-in-all, Jeff, I the guys feel forces. quick then

Jeff Jeter

them, key about think why mentioned, sales the that and what I managers, territory efforts we've simplify, from Craig, initiative sure. do enterprise Yeah, feel the leadership have as the can know we support about you thoughtful time, how sales of they more is the we can their the listening good selling how right. standpoint this to for look, so been really Ravi a I can team this organization, very thing

money the it is something organization don't look is and and that I have for them that intent more the as it I to how at by it, at make for to So we being for, at asking corporate down that's are to come and have to them more market time, is make what more more. them in this tools and this the this the built for be we've productive, look instituting. ability constructed as

feel about I will on, about cues very that's feel team confident good initiative Like good approached every really day. a embraced, that it but will It's because -- with get be of it. journey. be by it living the a way very just the will So, will any light it My feels with that from flip it. I that switch taking we've it our people not

Craig Kennison

you. Thank

Ravi Saligram

Brian?

Brian Glenn

learnings design refine faced just be stars brightest together teams make help sales company -- a Jeff's -- designed helping with I Brothers our not Yes. and able team's this and brightest took these better said processes. perspective and our two the and concern to continue across field of Craig, companies to and is And and manufacture both I we brought I with that's more And in were we stars our simply all and say and improve capture of to went processes Ritchie design in the no them a a we our to lot and IronPlanet we as sides. that of statements. there refine the like echo our from this best business. with on coming was would to just mean turnover some ultimately we of

going I be success. a to great it's think

Ravi Saligram

you have to add did on that? Karl, anything internationally

Karl Werner

the outlook. Even group international Yes. in it's same the

because driven practices proven of this our it's teams win both from a consistent as down -- all Jeff So mainly share and but it's to project approach top the help not a that. and will definitely companies it's top field a said producers to best our support thing, for like

Ravi Saligram

I before that question take the our question of I Cherilyn, auctions. We'll think, about Super. from think was next but number asked by

number we ag varies. as ag have last and in XX So same total the XX industrial, a but is XXX, which XXX of this composition XX QX the industrial, year, so that's auctions XXX

this and that Hope on. so So live more in auctions the and but include but industrial about talking doesn't and are so you business the IP have the nine auctions, Gov overall less we the are ag and question. numbers answers Cherilyn? of terms same

Operator

Your TD from next question comes from Cherilyn Radbourne Securities.

open. is line Your

Cherilyn Radbourne

Thanks very much good and morning.

wanted has So year-over-year is to and where just live the in has driven And coming of should growth. wondering ask GTV flat that? online this I'm second on row been a auctions most the quarter out we the interpret relatively site how of

Ravi Saligram

when a -- many that Cherilyn you of that shift. think, would are We terms that's that's on Online I really channel it as look live MTE we're lot not down million growing Prairie, at a QX which and a there so Grande if and because new takes at was as look want you why we grow that offering. look at I a drive trying where reason was of brought is are is Yes, down. in quarter $XX primary the number to customers huge the puts live one and what

So options of we in is, that's long had live auctions also reason news GTV. think as good five rates fewer but channel and the affects auction that we in inflection why QX we're soft also hey, kind GTV. exchange a an recent big There's everything QX there is fewer in then suddenly Orlando so kind growth, the also recognize are overall I disquieting and also agnostic you this our which and and that affected as the in quarter had so of went impact. And got getting

of large a very, good. we I So feel things, lot it's business think but our very

of the should XXXX. is One comfort things one you take some is

comped I our we positively. of said I live XX% And first sites in quarter, XX% or think XX%. think

closed auctions, but if an that we make on where business But have sure that you're to GTV we and We're definitely making picking we also and sure auctions we're online. had revenues. a impact, So overall, that our sites feel we bigger thing up have just trying is strong. growing few overall overall is

Cherilyn Radbourne

of follow-up, totally you what percentage you that GTV Okay. the And XX% quick was online without physically think buyers, and as said just actually those do for online inspect buyers your a purchase maybe visiting I transact online versus in physically people of ever have then of the site? a purchased sense come by machine make their who

Ravi Saligram

two-thirds the some is the a come, but we be auction. periodically to send XX% of that the with to the do right come percent the lot do if doesn't think, survey, includes sense One Cherilyn. those-that could customers simulcast dramatically least people -- thing we I they least they last in actually people has on But get to of that definite or prevalent historically a made at live prior theatre, have survey auction and business, auction Yeah technology now that you don't changed mechanic at a so of owner portion.

as your theatre may that live online, in As may and smartphone, theater. you in you the maybe will they and itself but be smartphone show your actually bidding auction in the have

each because anonymity buyers other. So or bidding they against are come and have inspected may for

online anonymity they that. them and So want provides

think just excitement, went was then it live auction this think parts Toronto. of live having the the had example as the we we MPE community, in still equipment MPE they and broke conjunction, an sorts week I advent and actually had with you the records people in -- saw At creating week. all creating some had mean events, could the see same we whole lots -- the whole quick the where So time, We that auctions, in I ran with think technology. a the I of great the Edmonton the is

best are network each think and our the interacting using valuable and we of produce So using to with are channels the this very our three are all effect of results. about driving all all of other channels. three We they

Cherilyn Radbourne

from That's you. Thank all me.

Ravi Saligram

that was -- Thank very We last you much. -- last the question. call

to forward that and with next is you. We onwards wrap. we look your appreciate a upwards. support quarter Thank So with you chatting it and

Operator

today's concludes conference call. This

You disconnect. may now

RB Global (RBA) 10 May 192019 Q1 Earnings call transcript