RBA - Earnings call transcript Q3 2021

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Operator

Good morning. My name is Pam, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Ritchie Bros.

Third 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 conference Mr. Vice and open Market Rathod, Intelligence Sameer President to the of conference Investor Relations call. Mr. your may call. you begin Rathod,

Sameer Rathod

for Hello, morning, discuss quarter results. and XXXX today's and you third good call joining thank to us

forward-looking could are our for team, management Joining this Chief be Officer; available our Q&A Chief who review to operating that We statements website actual on we uncertainties. transaction Canadian statements. and to of our considered include that SEC forward-looking Sharon certain portion you our other this and The are cause the of me differ the detailed call, financial XX-Q, will statement will from and call. involve today as filings Form The and Officer; On following are members as results in EDGAR of measures. website a our encourage Securities Executive Comments as investor.ritchiebros.com. are Driscoll, the of fact, future Financial non-GAAP our are well SEDAR. Ann and not release available Fandozzi, uncertainties discussions risks as discuss earnings which and items and forward-looking other will significantly at earnings, value our projections including well available revenue, gross risks and

I today release dollars see downloaded commentary figures earnings or to directly financial the the our our measures through GAAP or slides will our unless will website. can in call comparable turn Form and slides of most discussed live between Fandozzi. For over the viewed be be identification reconciliation the measures, These now Ann US the from two financial non-GAAP XX-Q. today. otherwise noted. webcast All a accompany recorded and Presentation

Ann Fandozzi

everyone good to today. joining and Sameer, you Thank call our for morning

service to our the employees, this our would I of like to highest unprecedented to deliver environment thanking who start by through call continue level to outstanding First, the manage customers.

updating prioritize protocols by We on customers third back judgment. recommendations of theaters. had welcome team regional to our the to hoped COVID and health safety best our and to auction and based our In our we quarter, members continue practices best implementing customers and

Delta plans. However, delayed given variant, we the our in surge the

are that where masse be will amazing back Orlando will the We to announce This to are XXXX. event way excited coming event our February customers back. first welcome be of en customers in flagship an

are all We excited very Orlando. for

building, outcome it equipment production, OEMs environment issues, given of a the growing by control. environment new can satellite, locations on position best products, to environment. supply XXXX. are the third supply, our respectively, headwinds, event as have to the unprecedented ongoing in outcomes a broader masked of control, used business, notably capitalize remaining for Our shortly. this view the lot by we and XXXX will This new with in. are We robust grown tight point-in-time view how cover disruptions omni-channel that XX% improvements I on the XX% strong business with strong developing chain abnormally of the hampering metrics levels, we compared quarter. a in our inventory in yard impacted quarterly in Despite pricing believe pre-pandemic our bids is and stack cadence strong strength our the equipment we pre-pandemic here we financial of underlying doing disproportionately a model platform of more sales and we facets the and adjusted was of XXXX. business versus comparisons of QX see is and supply by most focusing be higher Year-on-year coverage COVID-related strong. low two-year GTV will is baseline per By the our consider non-GAAP to exacerbated our delivering a caused the income the customers very trajectory We chain as operating outside

which pillars. equipment the OEM behalf on we procurement, a that transactions partners spent SaaS-based standalone make XX on and segment acquisition single and global and intermediate ours procurement industrial to parts We in years focused on dealer annual market. December, our and spending we from that trusted for busy and of marketplace building a a supports highlighted GTV, organically equipment for are to partners OEM as serve In the behalf our giving our with entry has and SmartEquip help as marketplace partners identified system strengthens will vision of Rouse, SmartEquip not inventory On planning and and whether seamless. over critical the standard dealer acquisition is been the It auctioneer transaction of each in approach our ways integral At provide as can we worldwide. is that laid owners acquisition to slide end, monetize our connections of we out marketplace business. us only step-changes parts unlock last partners commerce is our in end-to-end Auctions management also insight our recently or it our all are a transaction those facilitating on business and strategic SmartEquip and industry our billion the $XXX for also services We buying $X solutions. key annually. running will strategic captured gateway services an of future, service how volumes test-and-learn into in catalog that M&A of or us billion have time a place putting that the of used of Since transforming capability. but us M&A of pieces this of platform between for Day we other To in the of around this experience day, parts the parts, provides offers an as Investor foundation strategy an SmartEquip. Euro execution our equipment and technology dealer building our capabilities complete part a we through OEM case that vision the announced that electronic strategy.

we previously tools day, successful they trends, will time used all sell the as is adoption We to our valuations know avenues choosing List will be customers services listing give want the to our that Bros. technology workflow and so Ritchie in owners. that them on customers List see to and into of and will marketplace with dealer service. the PurchaseSafe Bros.' vision. and and they our our end to service List our power supplier equipment over OEM channels, and it leverage ability and and have. one need equipment we accelerate ecosystem Ritchie didn't enabling equipment At themselves many quickly in for a end relationships as them which North American on ecosystem and a an way to on-ramp allows their we List not to to of our this inspections partners allows own if sell to forth. parts IMS Ritchie officially and such help sell up our customers monetization launched themselves. However, provide us engage efficiently market marketplace, We offering equipment month, and Ritchie SmartEquip equipment into connect of Ritchie use last Ritchie the

are in listing promote advertisement unlike month. other offering by the we the functionality industry customers offering listings. also are only $XX And with paid obligations, their services a engagement for simplifying to We unlimited

or Moving our IMS, as to view Management System marketplace. gateway we the Inventory what into the

and last progress to activated. with quarter the to cumulative growth We compared XXX% make organizations that are sequentially continue number of strong

for a We are slowly providing migrating better IMS, into customer our experience. transactional workflow

We we both and partners. pleased are are excited customers the about our very journey and with on our

that locations of the you the quarter. and yard can On We scale. is one this year hypothesis begin phase are strategy everything phase new in the And our two. located also growth our continue in have sites eight use phase we done to we scale to test see XXXX. to satellite to two Phase this one with opening internationally slide

yards last of a results plan. organic and are opened sites as encouraged the the component key very the We in months our by see XX from satellite we growth

XXXX I delivering iterated Texas. a the We now structure learning report we results. that new from in also learned Throughout spent model and to a strong lot, we our is that happy and coverage implemented new quickly am have sales testing year

new higher level Our a of new model our sales engagement existing of allow coverage will touch points a enable and customers with customers. with array still while wider supporting more customers,

sales growth. The journey us. model organic hone, a is excited KPIs also And size sales new pipeline, It it Bros. to we seeing Although interact coverage with customers new sales scale beyond is will as is we Ritchie through element easier continue most engagement we we encouraging participated by about a touch for one previously we key are our us. of our Texas. over forward we Ritchie outlook. and After And Sharon. and in talk it pillars results are on first the Bros. Q&A, financials making doing to seeing are against average very to attainment, we discusses Sharon customers strategic our inside ecosystem with our to for move will executing around are we with haven't the our about, here that are and I coming then, how territory contract managers. will Everything the now,

Sharon Driscoll

to you, everyone call. and Thank on good morning the Ann

underlying given COVID strength had our As year-on-year business Ann financial masked the results. impact on quarter, noted, the XXXX comparisons this of the our

posted and company tailwinds. used this GTV quarter XX% our a see began headwinds, GTV result given FX X%, that takes the And offset third level context, GTV as puts We decreased of mix, as across increase backdrop, negative factors. in with the two shift to strong slightly the as a a with by auction equipment XXXX, of quarter ease. As restrictions COVID in current

year last market global First, due new as comparison to supply the chain all and described difficult impacting tight the challenges, equipment manufacturing just sectors. extremely supply from second,

XXXX. XXXX, GTV, over has confidence total XX%, year, despite increase remarks, Evergreen GTV, compared giving now more X% comparisons is Model in us in using our revenue this this like increased cycling to third Ann service a against Total Much environment. As service compared declining revenue we XXXX. as our stack two-year difficult is revenue measure, that her last of are XX% And declined revenue X%. from to supply difficult indicative a compared executing quarter total in with noted to reported a being

contribution beginning Financial the of $XX.X from with to third been are we saw making increase the to at And million. Ritchie Our quarter. have in these returns. Rouse relative revenue million highlighted RBFS. see the now a Recall, $X.X in revenue we we've other that the And investments XX% strengths Services service Bros. at

to presentation updated we as activity. have at time, more at and entered with tables. updated and We have us everyone trends. this period now better aligned our And we encourage our significant allow highlight measures quarter reconciliation to I non-GAAP business a to the be acquisition the look measures, This of comparable companies, peer these underlying

XXXX. operating adjusted declined the compared third non-GAAP income quarter XX%, Our to

to compared which is line However, quarter has we in communicated it would third I revenue, far last what new the our year. XXXX is of income to growth adjusted XXXX. note, rolled pace XX%, service operating Evergreen Model that in compared the we out non-GAAP when growth exceeded in with up our

inventory down, as and Although, revenue percentage offset primarily payments see approximately of service share-based volume a particularly with improved and XX% pleased periods, is Canada. rate this sales service our compared as result sales auction revenue good tend Inventory approximately mix the of government are quarter. year. broadly some the revenue was quarter. year. both resulting profit was down XX.X% impact down our our to a this excluding contracts. marketplace weakness by last and international in in robust region at prior came compared came the increased in and total services, at our And revenues lumpy, amended decline Cost versus U.S. X% of with X% from strength on as in service in be for and from sector, We of line revenue performance, XXXX service to SG&A and we to of GTV marginally they X%, Inventory A&M returns the declined which measure driven Overall smaller X% the by both a plus in X%. a government

quarter. of impacts that for easing operational geographically and by overall, revenue declined we services is cost number a had FX FX don't note of impact to higher protocols days we the structure on Cost a Ann XX%, And with with Orlando mentioned our we our reflect COVID out operating and break in neutral to bottom are increase sales are line back despite customers FX services to naturally given pressure. the it coming important expect that item, welcoming both and distributed starting that of quarters. hedged, line costs. While, in

to of X% with is in we message level highlight up compared any income year. fourth of would revenue growth, do SG&A of run since that expect up Services efforts most the is our and operating Although, we helping approximately impact Services the adjusted we of which expect excluding Ann covered. drive going that that Rouse given core Ritchie timeframe. make I has well in quarter the third of note Bros continued these addition the This the some non-GAAP forward. even acquisition as like which to is to SG&A a to last here and is be digits cost notably services rate as mid-single good permanent of the I XXXX quarter team result key SmartEquip to Financial the growth the plus payments a only just add-backs in savings share-based growth that other would investments same continue cost of organic investments

trailing XXX% quarter our of to our our cash cash it At a non-GAAP Our balance foundation income. adjusted excellent remains flow support providing with the with to pass growth over position XX-month very that of flow liquidity let initiatives. free Ann. which sheet end of million in and operating me And strong the very back $XXX remain is net an robust

Ann Fandozzi

for can earlier. on accelerating insight excellent with becoming the transaction working Sharon. our been as On solutions you pleased of slide, my marketplace trusted assets. we've discussion I this in busy progress quarter initiatives and the very global see Thanks commercial I we am services of covered strategy the in for biggest made many which

as to and not our still trends broader and to We outlook, see the dynamic no labor shortages turning economy. logistics supply more continue environment Now there only as the chain, view change is across our industry here. but issues current pervasively plague in

to continue see in Specifically, the we equipment quarter. here fourth tightness

business Let that while exciting this we for on and for using that see me disposition are time. continues age certain point strategy time structurally this deliver longer current inventory out and vision. please is We sits to require our ultimately that our evolve that the the we solution. will in a for operator questions. open With Most to reiterate marketplace as line environment it term know the there to a

Operator

first ahead. Your Kennison with go question [Operator Please from Instructions] R.W. Craig comes Baird.

Craig Kennison

help morning and model my good taking on revenue thank strategic you progress well. you as questions. List Congratulations I Hey the was for for the SmartEquip? understand all would in the Ritchie and quarter us hoping

Ann Fandozzi

Ann but are you environment very proud The of progress much. is making. the that supply Hi Thank we Yes. Craig, very challenging, here. we're

that with cover Matt, me bit SmartEquip start then to Marketing Chief our over Ritchie let a turn List Officer. So little and

seamlessly functionality. out really a midterm, is we short reminder, architecture and does. via dealers SmartEquip entity, our here's what look we'll developing So think consumers really they standalone offerings way be a it marketplace order completely plugs and across years it that easily SmartEquip as it to the build need to They parts call just to end XX transact And into it about easy it an OEMs' seamlessly catalog, to make dealers for for the a up that OEMs. as spent will part

forward. That business. on They're business has the team. team Fern SaaS an the Chair staying driving run We built. Alex the a excited. love basis. that to and CEO; monetizes Just continue team We're that Bryan they're platform that Founder; They'll incredible primarily that staying.

think that. buyers. evolve we I'm And to that Ritchie you use Chief vision to that be a going Strategy steal Kevin of want conversion do Officer, our our the types that line from and able to marketplace, with then Geisner, laid those Bros that same to will architecture offer As we is they've ultimate fries

So yet. they imagine piece is believe the paying place. run. the the vision brand what of been their they in has cart, to for transaction add A the behalf just that equipment we click the can At area" have to you checkout, dealer that checkout an a of That's short shopping seamlessly. to built and are and an have pipe auction that where that We their kind then it we building that and whatever financing by and capability for such of an of "Listen today preferred buyer excavator. customer of these that takes says already -- inspected the of is created think service in term the out that and contract it ideally dealer where the we've as even intermediate SmartEquip we're requires kind the That's that wins so that on kind just add won don't when parts method marketplace. check

continue System his put and over Bros. that this pause place to But it quickly. let could it then This the equipment can of a not then ours equipment. just to going services partake So to well, I'm if third is successful ultimately SmartEquip. way us a can Ritchie other chunk of The that Inventory with but the -- they that customers waterfalling, they And where List we're all thrilled the such -- and Matt. to me that. gateway $XXX the of piece Matt, any do that's do selling their that we you turn with through vision We biggest offer customers was to parties or about the in through is own along into headed billion and brainchild service within marketplace. know to it I'm be as really IMS but that guys various waterfalling over selling They're on it channels in continue turn wanted overwhelmingly the Management Ritchie they're kind all the exist listing

Matt Ackley

Sure. Yeah.

any core right listing the with streams, as there tend to which be nature. of service, So revenue advertising are

fee can or So monthly one-off add-on -- pay an sellers purchase on a basis. a for listings unlimited fee they

Additionally, -- listing advertising eventually the promote But banner there at as we core advertising. core able are the that really look here. mechanisms don't to your to revenue well as be straight stream as

order private As with offering. to transactions. Ann services these inspections, unbundle that can we offer core pointed out, be now these part the of is as Whether core we these shipping, into offer And the financing our sell them services transactions. are ability and them second

stream. And there additional we that's the IMS pointed commissions. to make with effects The like with revenue option So have as we our where the call we marketplaces and network to to ecosystem. these an an what to then are out, sellers Ann the traditional stickiness inventory easy flow our down that listings, obtained

that's the So think the we with about List. associated way streams Ritchie revenue

Craig Kennison

helpful. That’s so

Operator

question Radbourne Please with next Your comes from ahead. go Securities. TD Cherilyn

Cherilyn Radbourne

Thanks morning. and very good much,

So your supply new can of Ann, equipment terms supply you duration and thinking the on in chain issues that equipment current on update just on impact production? equipment supply, us constraining are of the the knock-on used new

Ann Fandozzi

those Yes. me, unquestionably we've case initiative through our is started know smaller control backdrop, since our bring I world can't impact. And I the We control. in through. But – that's here. it now journey, our the And Hello, on to significant larger terms I'll it control believe saw have of in a together say we view workload. even guys having knocking very as of out with is guys the kind our this The with it's as the journey you the the years been part. We control of two Cherilyn. of out clearly gotten you is just our part. view the the you door When world in been words, normally of the the

this when caught of it then, of it half forward are they're okay. OEMs are now exacerbated not first better. understand be monitoring chip the all All And we it of mean, feeling was XXXX. getting and And as we our should is situation the said, started plans built from as the so this hit, about end at the worse shortages candidly, and talk well, XXXX. were OEMs you shipping kind we came You of in call I close – the unquestionably accordingly. we up

look where very not is actually This to of in to tightening tomorrow. fourth be going announcements half to this right? year. now likely happen. of closely cup quarter coffee to buoyed to the of that, better worse the And not OEMs, the going we're today, coffee We're buy buy saying, – expected. the what First half. be as actually case going the is continues It's things seeing watching get is getting And – It's that, the a they're you're to very going not don't by going a you most if better. clearly it's we're next coffee as isn't cups equipment be knowing two second age, year,

continues You coffee our that don't out there. transaction case catch obviously up. buy to transact right? and age. you of we engine. ultimately today not sit to need a That's never industry, a the in to equipment will revenue continues cup It That It are

as we way. The that are will benefit. the question is, announcements QX unquestionably, when sure not and will look for longer. it made better, take getting QX, going but and other getting And with the at We

Cherilyn Radbourne

adding speak calculate cost I back those Okay. new earnings? of on the to doing then Is for that share-based can non-GAAP you Sharon, metrics, for justification payments comments. the to not earnings a appreciate business? And

Sharon Driscoll

Yeah. thanks. Cherilyn, Yes.

at, users possible. So was were companies the The what we to there. And peer statements as are doing as GAAP goal in of to this looked the certainly be again, the always measures space. other helpful

in is in So included share-based the our reporting, core comp that.

related to are sometimes proceeds compensation, a the and portion of I new unfortunately and going into dilute with would your bring see will recognizing, with acquisition, it to we cost continue those, share-based have think performance. seen well acquisitions include SmartEquip, as which on Rouse as you the the you just it what

that would companies analysis made other with we we this was approach. decision the the peer so consistent how common that, indicated And our were reporting be and this,

done analysts there. they is and our health landed operating that goal investors previous look certain certain the as organization. through that was to And with underlying but we had our clearly, will understand to visibility that the give possible best how adjustments, the So we of

Cherilyn Radbourne

ask And QX going a follow-up, model Obviously, increase. and going forward? to could we add-back and payments about if just the should think to that it's quick in share-based I how how

Sharon Driscoll

Yeah.

I and be think, is a past would it don't going than to indicative trends Certainly, provide cause disclosure. commitment So guidance really to we we on newer that give to that I continue continued acquisitions for be what that ramp-up. know transparency additional can other will that line.

Ann Fandozzi

Yeah. And if I as can just health add, Understand, Sharon answered, team take business. ensure the we to it wellness management this very and actions of well. a

the company we're being build to with what SmartEquip come That's this aligned to example, acquisitions. we Rouse, and the their acquiring retention same and So for as portion combined on Ritchie stock shareholders acquired asked MO for meaningful when with into we of be we point both a a candidly and to took Bros. do rolled and together. bet a our proceeds as future Sharon's of

of is run didn't intent. that of So accounting it. those business, to what other for business. implication the a behind but are long short-term That's health decisions underlying the of want benefit is the the we intent There the kind no map have

Cherilyn Radbourne

over. Okay. I pass Thanks. will it

Operator

Maria William Blair comes Please with & Your question from Company. next go Lawrence De ahead.

Lawrence De Maria

morning. Good Thanks.

are or the dealers, other it and using customers Can growth as is talk you. and is type the logistics you of it some obviously signing the IMS terms numbers about up? you far words in fleets? As Thank the in sequentially. engaged volume of organizations such transaction as end users In services you're around revenue that engagement these gave

Ann Fandozzi

here Fandozzi Ann Larry. Hi, I'll take that question. again.

view, going Again, view very had it. a the So IMS about trajectory for easy you was Our has we're the say, of of customers. point I been -- exemplary. obviously we to penetration of excited point it I'm really make right?

positive. provide still You is very they're in them analytics indications data want our that participate. going to are obviously early having page The the fact really we're showed and is that we focus. And and to very,

how we going. right think in? will starts with perusing us get get network when next It for that Can kind number people and can of effect get So analytics? The data is the right? of about our excited? them focus phase steady a about we state. Just starts organizations them around and the that all be Can we now

met our assets the a with we entirely themselves a So bunch assets phase really Again, customers the feel accounts and those lot part end good of large for be been already large but false talk they loaded about the they of that business. security in is but them that in, think transact then just those and turned of this want will didn't you It whole any get us and that I not give kind huge won't big of the IMS, we sense next anyway. reason lever at So would we this almost attention will people on right? if we did focused dealers of before our big if has we about regional kind with strategic entities. to numbers,

but now and the folks focused right coming on are we're of -- in in. are regional Rental So lot are by really that Taylor's kind has Kari those we're happens. culture organizations. The feel counting dealers sure is of a robust as okay, numbers really well A Officer Revenue once we making learn. that phase we on next process Chief steady-state been test have a as organization focusing okay? and Our like coming

does look turn robust, testing they we'll flywheel that with we've starting loading we to attention been right? And been doing that okay that's Got how it. what are interacting with to feel we've like? they're it learning. assets, like our Once now So

and of. this parties. assets monetization what then next services the third partaking will do like are learn. loading those of the the getting Do connection inspection they with kind Transaction and naturally? it time others Let's we also test are cascade of be of data to is something where okay yes. Is need are financing services, happen? other now And happening to that make But all points over they're

very We OEM and example transactions dealers as on parts very, an are excited to of and via partners. behalf again facilitate service SmartEquip

translate will as be ultimately even our our monitoring those we'll not So to well. own that And revenue growth. then

excited, good So ourselves feel organizational turning we be we're methodically said not assets. revenue It's and about of and we a the side. we want Feel are parties that. build the own third on a security on the also We're that a and to is the focus Once on how That give journey. services how this measuring good false it. looking out at flywheel really Focus about it will then sense lot. I but get outcome. our

Lawrence De Maria

you. new to but up. was that The some Okay. of because Thank adjustments acquisitions And a good right follow one-offs answer. a That could bouncing secondly, -- we're back. not implies it are I lot was that then if

expect this heavy to like on is year pipeline M&A, the pace the or up? keep look focusing we should back And and for a core? to Thanks. what So does this

Ann Fandozzi

start I'll to turn it Sharon. over I'll then, and Yes.

we when what. was our it laid So really vision out the

very marketplace the a put trusted global this out laid we So we very, for and insight to vision pillars clear then And services it. transaction of solutions. transforming underneath

It's buyers in It's our modern seen of architecture. we're core take either employees. about it's like yards, we doing it business. of how on you IMS. in was what It's we to very sellers. you've to the And these the As these the as about case of to the going impact the It's form of from or lens. about acquisition like us And And in I of Euro That's an the the over like opportunities market our Sharon, time the open about the the case we the from And L&A at would her would think the the experience our come we're the very consistent. initiatives turn now, stay if about the SmartEquip, look and that's I'm we Rouse things, But growth, things own. or our Ritchie how. model heard what. step-change in and the will to find how List things world. these of kinds acquisition that in the as organic to Texas, go-to-market of

of initiatives. pipeline So we have a robust organic

anything the Sharon, of a but it lens the look We getting add? at give of vision. through us we have robust a to M&A it does to step-change pipeline to

Sharon Driscoll

with activity. do of acquisition And now include acquisition of significant announced integration-related period costs just to that, already the Euro also we've a thinking which this over associated add also would Auction, I run time. expect metric Yes. we longer will

their develops to of was I also get bring forward visibility only, for further team initiatives think and underlying Ann the organic anticipating accommodate line our to health strategy additional said both metric pillars had time what decision of would organization the we either life to enable also the not better partnerships as So how that but this as going acquisitions growth. additional and strategic or strategic how the announced

model we it's think we forward, based moment go see. and a to are at what the where on I good

Lawrence De Maria

So our they back integration on. the the is cost so

Okay. Thank you.

Operator

Your Feniger America. next comes from with Michael Bank of question

Michael Feniger

production I'm hand, rising on infrastructure their the like what early into other is on oil if in to you issues growth actually it curious I'm net-net going could potential I this dispersals. to curious, said, this this bill Yeah. infrastructure QX a for new equipment a oil Or good question. On you the historically and customers kind rise can't equipment is with it's cosigners on in customers just the on going and like their keep QX. my actually probably drag Yet price hearing maybe taking you're infrastructure see for bill. hands supply. used less fleet reunite dynamic holding the as Ann Thanks hand, GTV of probably think given with ground forward? as for get one demand

Ann Fandozzi

carefully. it we're so hearing Michael, you're and very very, watching yes everything we're Yes. hearing,

we I possibly very long-term. looking and something are mid way different think the short-term than is it is at

let take bookends. two me kind of So the just

single the just it so mean again -- it everything biggest supply single we overwhelmingly. is I it's it's And not short-term everything sun. the ports -- the wish It biggest just the shipping, is on really everything factor back. was under it's the chip is it's chip chain, macro getting It's So right? shortage. shortage,

would their And equipment described pull, a a wait is oil that prices minute which naturally so prices of equipment right but the used that balancing act. and regardless as the are for people need push beautifully you described demand it, exactly up, up, be is

of at look worse. of end it initiatives and you better. to a -- living out the Your not QX, And is equipment looking short-term that supply now getting the as drought as in long-term, getting overwhelmingly way the Then using out at chain is has again, we backdrop we're Again is, later but at very environment control. the That causing right? that sure. to our kind if for look book or drive the We're of the our time other up. Sooner supply. catch

That's later for or we woes that. behind sure these Sooner us. know be will

there going that. And it to is out and age as transact. here later and this nuance equipment have sits the be to here this will or we're Sooner for

see being where it's But run. positive comes. intermediate that's if tipping In kind infrastructure point you of kind So, of the we a net for the guess that think anybody's us. long plans of largely as really again

Michael Feniger

Makes there just have we plan CFO integration. the given time of just sense. you I'm guys curious can of M&A line succession expect for And what the kind

trying industry side close search the year of Are what we given I guys with the external? auction kind of this this early more building imagine someone maybe later you're more to the I background you or think XXXX. equipment for on tech-type are more your platform? Is a looking

Ann Fandozzi

Yes.

-- the plan person. time the give disclosed her to early Sharon us right why is headline to of So this find is plenty well, first so

on family look. now, So, for Sharon know running make her turned from years of want first sure all, plate, as body Michael, two she our to But everything given not with not should. I those make anywhere. plans -- on anywhere. you no. heart, video she no decades just but in not starting I'm to we're saying of be here. us she has person. to yes. XX, given it's but -- looks you and amen of want longer But in younger, I'm guys not a In gift I going we're

And off we best for so the are athlete. days. search. would I looking we've say kicked the early It's

external business it's We we're getting strategy. organic growth bigger. a it's a driving, getting transformation have search marketplace is complex this are -- out we complex the an to the because It and and it's laid and more it's big

that to drill no We end, There's head. so the here. a search. off no gun feel And kicked we've fire to

then to integration of course, graciously things when Sharon the have will person. the and also Even the person, to has, with the transition, find right the agreed of we right support of find right we all pieces all but takes time it plate. then We take the do on our

value her add entire the So, never leave for intention and period is for high and to us dry. that time

with I and feel the like the I to the for we going find So, confident very pressure have at person for time we're all. here I perfect feel no future. where will feel us

Operator

comes James. go Bryan Your next Please question from Raymond Fast ahead. with

Bryan Fast

Thanks morning. good and

what what Just elaborate bringing to on one online? with question associated the you costs for you confidence myself. But satellite yard and maybe just these if could gave model looking are expand

Ann Fandozzi

Yes.

So, and Jim let it over going then Operating Chief I'm and turn Officer. start our to me to Kessler, President

test-and-learn a culture. are We

here So, go. of we they're the that Ritchie pocket. had point in their come When clearly said you say most is Bros. right? a what want, and of sellers to they point money want what view asking they for view That they

we money we both yards down. hypothesis. the point of piece of closer it make in us but it to set KPIs We that if and to those up transportation do a put whole the with will then the easier our test said and set drive confidence. That had gain we sellers to a we around equipment was really Then business cost learn most a For want pocket. view of

it pause on So, let then me what that to there turn was. over all of Jim and

Jim Kessler

than few what Ann. then talked yards customers the in Thanks seller can investment high and setting the some up lot pilot yards. five last the acres see satellite five, also Perfect. greater of that quarter that to we we a so systems people. not of that's a existing flow-through in and for from standpoint think flow-through. we And Less have besides about basic kind seen than the And needed satellite about our stuff, very yards Yes. similar very very new of land

yards So, our at GTV look per that dramatically when have. square better larger foot, than we you

metrics two thought that enough to really this continuing we were what wanted we of ones to those at the get answer really number original So continue yards up was looked that were that to the question. pilot, we're good our thesis find our to we to main the which

still here it's So, in days, the early especially US.

European time excited but to we consider, indications, bit these come some Our very very point a have questions. very US with now in seeing where the an we're all exciting But has here at place about. the more But behind up it, where able to we full right right be answer a business in numbers, early little answer. we're pilot to we're early

Bryan Fast

Thanks. it That’s from Okay. me.

Operator

Sabahat Please Khan with go Markets. Instructions] from Capital [Operator comes question Your next RBC ahead.

Sabahat Khan

Great. Thanks and good morning.

the under the sites, site you up on the with following I or are the satellite next is that around closures Just few years, addition of sites those, of comments maybe still considering any consideration? guess legacy over

Ann Fandozzi

Yes.

Let me make that...

Jim Kessler

ahead the ahead go Ann. -- And one No, go Ann.

Ann Fandozzi

No. and I start then to it was about Jim. over just turn to

on our different satellite view of yards a yards. a of is larger as point very, that So, these just our very view reminder

and legacy But about business forward. more use was new really custody kind how auctioneers of control and transactions of want take of that of kind point is a it do that view. And we online COVID. go up. obviously hub yards interrupted to a about auditorium been kind market. it day -- to need and were kind We of it. of historically turning kind steal to as because going going of over customers all it. no We that, But of the kind model when you. of of we -- stuff. satellite spoke we see different hybrid market to We the of we're inspect over I sites a going and those sorry it. of split going back him Jim turn with I'm Jim's words -- and approach I'm to to and But then kind we don't to to want sale us of what blend a we've to the again the live are So it I'm right, They our their it. it Obviously, and about Jim, over of that obviously it's where allowing ability all of model, care equipment. is longer They give transitioning We

Jim Kessler

was and that about like of just that have lot add, new sites we need move to is need how we I'm to process there do I sites, we a where we we going of just a from. be robust companies, do a sure thinking Perfect. should site evaluate on

the the sales a that the have between process quarterly and as a making the network. is spoke make our we satellite from all now, part But of hub and we we of to do get And international, open create returns a model, country a part to sure profitability that there at of satellite sites. process that of with have operational kind should is go a yards Raleigh decided that's we we that's So, have we expect have but we something we one team, right in through our evaluation. our happy and and have look and reopen includes, new the that a team state, robust that new But of that that quarterly. the very we to test process yard. closed And are we we a where that

Sabahat Khan

you're number take internally how on this there's Is get some sort even trying Just of for color second good you each lot up. Okay. the an you're -- how up? and provided ramping that think time of that to sort guess, just a kind discussion different might the of build about the we some over platform thinking about customers? how next a IMS phases ramps of thinking on about, Great. as to of you unit fully or on years. do I earlier long up phase it one few idea of then should And lines, that have

Ann Fandozzi

Yes.

haven't it's great We a question. --

to time the it the to way But by about line, journey get there. is a so it is, time a we multiyear think communicated haven't We speak.

whether point IMS of or or at a else. satellite model. would that start kind the view, And go-to-market or listings the so, even it's -- have And even look to We we we with page of I anything yards showed, history.

the developed around point then the form leading a switch. KPIs what are we strong We hit say, indicators? We ever we We the learn. it view. and And a thesis okay, have go of and before test

Some much are quicker. things

doing is of it's efficiency sites, look the If what a at getting of those a you the confidence the we quickly satellite yard lot Jim's the and there, take on KPIs page started organization that enough but quickly to side a things globe. we out. that it of But the it out the initiative attracting, new filling test, around the us out and laid Texas was where filling go-to-market start it, could we other at taken sellers Look the at a had that longer and things learn. more business model. We a time about same with now us and kinds sets And way complex of those of we're to still said, That's of it. course, skill the because learnings think capabilities new Jim as all gave things it's buyers it's here and IMS. we're scaling

and its to less. There quarter. architecture modern us line line time building full fulfill ambition it kind time to to that the a the comes every really technology out is the -- So of allow the driven is

in We the and functionality, to basis. to then takes the you one. confident these the architecture learnings we the It modern move really feel do about when -- test next on think move have to time the way don't is more We into a fully. but in quarterly gating overnight. a factor it But

and flywheel, good sights share adoption back We lift information. we'll urgency. and kind to holding when when conversion the the good the I'm feel feel move the are Literally have our we'll we in is of a assets organizational place, of like of sense service assets. a our the we sights not a wallet. huge like the then And to on move

time an feel to scale we've like we about about we're more less going and it's line that's we when where So can go. learned external and

Sabahat Khan

Great. much the very Thanks for color.

Operator

question Your with Cherilyn from TD comes ahead. Please next go Securities. Radbourne

Cherilyn Radbourne

Thanks.

the result your to regard and seem capacity of. what be follow-up on what more in given will will clearly SmartEquip? that your Just you a following Euro M&A is, priorities be are which that tell think Can you you there and strategic leverage us Auctions signaling

Ann Fandozzi

Yes.

you we're all we pass guys as us -- to are was leave and from what are Cherilyn, any are we is start the and solutions open how me I'll hopefully it X, how fulfill the let don't signal then the and Sharon. -- that we vision. -- getting So the what XXXX, to over December to

pipeline is of ourselves are to clear a growth customers, it's just -- first crystal is a business the vision is our marketplace. the architecture pillars. pipeline, keep employees. and because the about making have it, and don't it, foremost do this have clear. then and say, beating right? we I with There's this for When to pillars like underneath drum, mistake test-and-learn we organic. easier IMS It are no M&A both become robust. Please value The So our add we robust other robust the just

when literally the we of and kind if partner driving So organically in all KPIs about when invest someone, and with do around M&A, if this KPIs when we if the and of speed vision it's something and we efficiency forward.

is anything But of we're So vision each of prioritization the then that it, do that want to how? evaluate around again, is how to the those we the our Sharon, on add everything getting that five you is focus. is looking that marketplace and pillars. fulfilling at. That

Sharon Driscoll

Sure.

far and did enough in acquisitions And release at think, we some Euro, think we announced still time fairly along information way did finance room our leverage the the of we intention the because gone holds. those indicated to we our around how I really that So additional for anticipate actually -- Auction, models were how Cherilyn, Euro that thinking about SmartEquip. we've to plan

We agencies as incorporated rating potential credit with discussions well that into in acquisitions the as on that our acquisition and sure already have thinking. our going that banks our made our intentions were leverage forward

in down that once have that for We've comfortable certainly reprioritizing repayment level once to acquisitions place incorporating modeling, back debt Euro, to but strategies smaller able Euro we to transaction be some range. into leverage the already bonds get not more that some large-scale a anticipated, debt in completes, be certainly been put we will So, thinking. -- but And house. we potential the our

talked we be debt to just not management Rouse some going teams funding right to able the to about forward. open to for with but be think we additional kind be as secure some to secure able of I operational -- equity may the acquisition, models

the are kind integrate our with equity companies thinking outcome in pertaining of us. in of plays how best as to So, terms those always

our today. And thinking We're so that's our views of our so projections. in and very kind with conservative

what think with will debt able has The Street line. the on in I to we Euro. leverage in closure of changed. keep And our the what we've agencies view embark The on on terms them rating model to see some of we to structures again that relayed current repayment already as not keep strategies be

Cherilyn Radbourne

So leverage have, us more target would the of on before using can sort remind of you embark sheet you what you sort aggressively? balance just

Sharon Driscoll

times each considering Well, I of Euro Again, out in And keep closure we we just currently will four that principles. acquisition acquisition bond. look are mind. Those will are just be current we're has of -- kind that its And types that of we called under with we level. BB different fits those we our rated how parameters. each would the consider into think that own at at the things and

Cherilyn Radbourne

me. from Thanks. it That’s

Operator

Please all proceed, is have Ms. time That questions the for today. Fandozzi. we

Ann Fandozzi

partners up minute thank many I'm our Thank take less the very with picked is the about in guys our where start in It's is I'm reality a are wonderful Again, are this with to are but bullish Bye-bye. you We're just weekend. thanking -- of it for is of taking And of thanking future, But a thanking with you find a on safe to dealing hopefully, excited. take so the marketplace marketplace. the everybody we're for we we the a going us. as going to facing that But, joining little time thank you the we a that point rest of actually QX something time. really message in headed. that, look and listening all the and and you what ourselves again has members, than and real team real. as minute whom hopefully much. we call. we at everyone

Operator

Ladies Have great participating and you call today. conference please this a your for that day. your We you concludes for gentlemen, disconnect and lines. ask thank

RB Global (RBA) 5 Nov 212021 Q3 Earnings call transcript