A global leader in used equipment sales Investor overview presentation June 2016 1
Forward looking statements and non-GAAP measures This presentation contains forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions. Actual results may differ materially from those expressed herein. Additional information concerning factors that could affect the Company’s actual results is included in the Company’s filings with securities regulators. The Company undertakes no obligation to update publicly any forward-looking statements except as required by securities legislation. This presentation contains non-GAAP financial measures. For a discussion of non-GAAP measures and the most directly comparable GAAP financial measures, see the Appendix to this presentation as well as our earnings releases, our Form 10-Q interim report and 10-K annual report, which are available at: investor.ritchiebros.com All figures are in US dollars, unless otherwise noted. While rounding may occur in performance numbers for presentation purposes, percent change figures are calculated using full, unrounded numbers . 2 2
Ritchie Bros. overview The trusted source for buying and selling industrial equipment Ritchie Bros. has a strong heritage – selling used equipment since 1958 • Global leader for industrial auctions; unreserved process – No minimum bid/reserved price. No buy-backs. – Ensures the sale of goods on the day of the auction at global market price • Cater to the needs of heavy equipment owners – Customers are from the construction, trucking, agricultural & resource sectors • 345 auctions; $4.25 billion in Gross Auction Proceeds during 2015 – Industry leader by wide margin; Enormous growth opportunity, with a highly RBA Auction - Circa 1958 fragmented market • Provide multichannel sales solutions to expand the breadth of services available to equipment sellers: – EquipmentOne launched in 2013 – Mascus (equipment sales listing service) acquired in 2016 Strong financial performance • $515.9 million of revenue during fiscal 2015 • $121.1 million of adjusted net income ¹ during fiscal 2015 RBA Auction - Now Publicly listed on the NYSE and TSX (as RBA) • Market cap of approx. US$3.5 billion 3 3 ¹ Net Income attributable to stockholders
Global reach 44 auction sites in 14 countries worldwide 2015 Regional breakdown of revenue (Revenue breakdown - % of 2015 total) • More than half of auction purchases are made by bidders from outside the region of the auction Canada 7% United States • Allows RBA to effectively transfer equipment between regions 10% Europe experiencing different economic cycles 32% Other • Consignors benefit from global market pricing for their $516 Mil equipment, generated by international demand US comprised a great • Buyers benefit from a global supply, with an ability to purchase proportion of revenue in 50% and ship equipment from weak economic regions to areas with 2015 relative to 2014. stronger growth 2014 Revenue breakdown - % of 2014 total Ritchie Bros.’ online bidding allows customers from around the Canada world to bid on equipment at any of our auctions. 9% United States • Real-time information from live auctions available online to registered 12% 32% Europe bidders $481 Mil Other 47% 4 4
Global equipment market size is $360 billion Ritchie Bros. is a global leader in used equipment sales, with $4.2 billion of equipment sold in 2014 However, this represents only 1.2% of a highly fragmented global used equipment exchange market The US market alone represents over $50 billion, 7x Canada – a key market for growth Mining Mining Oil & Gas Oil & Gas Transportation Agriculture Construction Transportation Source: Internal estimates; based on historical OEM unit sales, estimates of fleet turnover, Agriculture and average selling prices at RB auctions. Allocation by geography based on sector GDP. Construction 5 5
Growing seller and buyer base Consignments & buyer base Auction registrants & lots (Metrics are for industrial auctions only) (Metrics are for industrial auctions only) 140,000 600,000 Consignors Registrants 6.4% CAGR in buyers 8.2% CAGR in registrants Buyers over last 10 years Lots over last 10 years 120,000 500,000 100,000 400,000 5.2% CAGR in Lots over last 10 years 80,000 300,000 60,000 5.0% CAGR in consignments over last 10 years 200,000 40,000 100,000 20,000 0 0 2008 2010 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2009 2011 2012 2013 6 6
Growth of Gross Auction Proceeds (GAP) Gross Auction Proceeds (US$ millions) US$4.25 billion of $4,500 4,245 GAP produced during fiscal 2015 $4,000 GAP: The aggregate $3,500 dollar amount transacted $3,000 through Ritchie Bros. Auctioneers and $2,500 EquipmentOne $2,000 $1,500 $1,000 $500 $- 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 7 7 Includes transactions of AssetNation and EquipmentOne online marketplaces in 2012 - 2015
Four external influences on GAP 1 The pricing environment • A strong pricing environment will enhance market values of equipment sold at auctions • Stable or increasing pricing environment provides consignors with more confidence to sell equipment through unreserved auctions 2 The mix of categories of assets sold • RBA sells a wide variety of industrial and agricultural equipment and other products. There is no consistency to the mix of assets sold, as it varies at each auction held due to regional, seasonal and cyclical factors. • The proportion of higher-valued items sold at each auction relative to smaller goods impacts the auction proceeds generated 3 The mix of equipment age • Newer equipment generally has a higher market value compared to older machinery 4 The number of Lots consigned • Each sale generates proceeds. Increasing the number of Lots sold can bolster gross auction proceeds 8 8
Unreserved auction revenue model Four main revenue streams support Ritchie Bros.’ unreserved auction business: Unreserved Auction TRANSACTION TYPE REVENUE Sellers Straight Commission Straight Commission (Consignors) Consignors contract to sell their equipment through one of Ritchie fee (% of auction Bros. unreserved auctions. A pre-determined percentage of the proceeds) selling price is provided to RBA as commission. Guaranteed Proceeds (underwritten transaction) Stepped commission Consignors are guaranteed to receive a pre-determined amount for fee (x% of guaranteed their equipment, regardless of the final selling price at the auction. A proceeds; x+y% for stepped commission fee is negotiated, accounting for the additional proceeds above risk being assumed by RBA. (Also known as an ‘at risk’ transaction) guaranteed amount) Inventory (underwritten transaction) Gains on sale On rare occasions, Ritchie Bros. may choose to purchase equipment outright, obtaining title of the piece to sell at an upcoming auction. Buyers Admin Fees & Value-added Services (VAS) Admin fees and fees from value-added service RBA provides many services to assist with the purchase of equipment, activities including financing , inspection services, painting etc. Revenue from other business lines supplement our revenue: EquipmentOne buyer and 9 9 seller fees; Xcira revenue; Mascus revenue
50% of our buyers are now online The strength of our live (simulcast) online bidding capabilities is valued by our customers During Q1 2016 we attracted record first quarter online bidder registrations • 62% of registered bidders during Q1 were online bidders • Sold approx. $449 million of assets through online transactions during Q1 2016, an increase of • 11% from Q1 2015; comprising 44% of Q1 2016 GAP Percent of buyers: On site or online 80% Online 64% 70% Onsite 60% 50% 50% 36% 40% 30% 20% 10% 0% Q1 2012 Q 2 Q 3 Q 4 Q1 2013 Q 2 Q 3 Q 4 Q1 2014 Q 2 Q 3 Q 4 Q1 2015 Q 2 Q 3 Q 4 Q1 2016 10 10 *Industrial auction data
The Ritchie Bros. App – Launching soon The Ritchie Bros. app provides a mobile channel with which to stay connected to and purchase equipment at auction. Feature list: Equipment Search • Equipment Details • Auction Listing / Details • Auction Registration • Sign In / Authentication • Profile & Bidding Limit Information • Live Auction Bidding and Viewing • Multi Ring participation and navigation • Purchase History (proforma invoice) • 11 11
We are fast becoming a multichannel, digital powerhouse Ritchie Bros. now offers four main sales channels to equipment owners Business units are supported through Ritchie Bros. ownership of Xcira (online auction technology provider) and Ritchie Bros. Financial Services (financial solutions partner for equipment buyers). RITCHIE BROS. GROUP OF COMPANIES: 75% ownership 51% ownership Integrated technology platform Integrated onsite/online unreserved auction network Online marketplace Financial intermediary capitalizing on captive customer base to Online listing service provide an alternative source of capital Brokerage channel for highly specialized assets 12 12
Recommend
More recommend
