RB Global (RBA) 6 Aug 242024 Q2 Earnings call transcript

Good morning. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the RB Global Second Quarter Call. [Operator Instructions]. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator turn Relations to open and call. now President Rathod the call Investor of Market the will Sameer over Vice conference I Intelligence to Mr. you Rathod, begin. may

report from and involve that well expectations annual quarterly discuss measures. and website forward-looking measures, cause and estimate, discuss for to forward-looking identified but and will considered the including this regarding and IAA, well release on Comments include other following can Guerin, other by detailed uncertainties Jim Executive which EDGAR us issued risks significantly morning Hello, our Thank of Chief forward-looking trends the are of quarter be market most opportunity words synergies results as could growth plan, such Form and this you statement not XX-K forward-looking our on including value, business and morning. anticipated revenue, recent today are transaction Investor report non-GAAP projections cost in expressions. as With statements, believe, our are integration good fact, anticipate, a such as and are certain call Relations to will we non-GAAP as expect, to also call, SEDAR. On risks not the discussion actual statements which news Officer; future our Kessler, that financial earnings, and items, me uncertainties. The are that Chief intend, second as results. of and limited Officer. The our financial joining and Eric differ available including on Financial

and applicable posted Form and directly X, of of comparable reconciliation website. identification non-GAAP XX-Q the SEDAR the financial news GAAP financial our Form most measures the For release, on XX-K the measures,

of measures. this on such place financial like components time, non-GAAP We financial to cautioned turn forward-looking to as Investors cannot over predict reconciliation necessary the to At measures. forward-looking to undue quantitative are measures Jim? reliance of all call management non-GAAP are present a unable not I'd Jim.

good teammates I morning drive and This financial adjusted and service continue Thank for our discipline to to you, demonstrating proud EBITDA of execution translated growth. am growth execution solid X% they partners. everyone. our consistent, Sameer, XX% revenue strong operational excellence to and as

We million have approximately actioned cost committed during reach of $XXX we rate and full now well synergies run will in what transaction. the the ahead

pleased business manage ongoing delivered this an continually are we commitment, see will growth. journey that While we for we the over expense optimization and profitable on as

construction we consignment transportation Let's following market start pandemic. the equipment normalized commercial and by sector. our The discussing has in surge trends experienced post

for fleet year. The business customers and the their of continue business within reducing investments region's remainder As for higher equipment, equipment equipment. transaction higher evaluating their are the large disposal leading for their conditions our to used interest suite rate needs the postpone the immediate in are costs to evolve, new some environment owners replacement of solutions need

Bros. America. brand quarter, customers by are potential the on recruited new the we Ritchie strengthen our to we serve growth We driving talent actively expanding to in In sales sustainable regional coverage North within second the markets. our ensure best focused highest

last second used total let's loss continues ratio an the Solutions XX% industry growth repair estimated In Salvage quarter, secular increased in Volume total period due Now automotive to Intelligent to XX.X% see and to costs same year. in the to in the loss CCC increase move the to approximately sector. lower higher prices, to the ratio. compared vehicle the leading

very we high continue delivered remain pleased of second in marketplace, to improve buyers we key All the compared to a of the gain In metrics team that to significant to in our performance and continuously second continues partners drive partners am consistently program exceptional record high for our industry the set as transparency to quarter, level and to traction definable performance. I in SLA with achieving we our standard partners. all clear quarter. and performance Our for made a our international sold strong at premium percentage the vehicles buyers price new to in automotive processes improve our international invest and sector. also our technology later. We progress attracting proud

unchanged to win and selling in the Our efforts industry, our automotive third in and high quarter. performance declines. commitment resulted translated continues which the to average This a remain prices meaningful year-over-year, experience to trust outperforming transparency

One an this volumes in believe the who of XX,XXX selected provider will their our vehicles salvage split previously salvage partners salvage sole add estimated win existing We U.S. has us annually. as

cat dedication need last was seamless the ensures This rapid us with in the to when hurricane. Our a customers most. display full response and year-round preparedness our

While once impact terms showcased of the was of hurricanes unit volumes, resource again our minor, and in capabilities. depth the our mobilization breadth

cat Ritchie Bros. to capacity, with NASCAR dedicated have afforded network we the of addition yards. In flexibility partnership, combined by additional yard our

RB our ability across to in our customers. In event volumes resources a to experienced our to commitments Global surge to unique our ability the tap exceed addition, key we to cat around process is

We have events. and handling to financial pass and call our cat Eric to significant will a outlook. now the performance in sustainable I review competitive advantage

average growth decreased the stable due due volumes unit organic in Jim. unit by prices. you, customers. loss Total declined by on impact to partially a and decline from X%. Thank customer to GTV existing X% announced by selling offset milder The winter the was of GTV previously volumes Automotive lower

sold by and intrinsically price average transportation lot are volume noted, at just due here lot lot we by asset a declined primarily the sector partially driven mix in As asset rental values volumes, ASPs. where net per as the in gaining sold. The believe average in market a basis, salvage to price the increased are increase lower came by construction third quarter. ATV sequentially share industries, in we per X%, growth on from offset Jim decline an commercial lot transportation and

a on decline mix year-over-year see adjusted We pricing basis. also continue to

transportation been approximately GTV have of the construction Excluding X%. Yellow the Corporation and would impact bankruptcy, the commercial sector growth in

revenue. points offset partially Moving revenue expansion by average growth a to by take approximately driven in by higher services rate. a driven buyer fee our increased decline our rate XX.X%, X% revenue and service and to was Service XXX GTV. by in Take rate expanding service marketplace basis

the rate GTV. The to higher returns by expansion contribution and in Moving were take from decline inventory EBITDA. partially offset a

earnings compared Our growth, strong excellence you at adjusted prior as than interest operational increasing last primarily GTV a operating share growing of to the seeing X.X% a drove X.X% slower higher year. compared by focus resulting XX%, strong our per and remain and service increased with a compared expense can EBITDA Adjusted on operational by dedicated rate operating lower to to expenses to EBITDA leverage efficiency, year. We progress revenue performance on percentage year. a in adjusted to the last in net measure

a Our year. X.X we to capital A debt pay remainder with our adjusted strong operational paydown XX adjusted on to X.Xx decline continuing approximately EBITDA trailing drove to performance of net quarter. Consistent allocation plan compared turn strategy, the of first the for and in Loan the a our continued down debt months to Term

the Moving outlook. to

second in to guidance drove construction the $X.XX I'd guidance billion average continued commitment and sector. Despite the efficiency. to open cost strong are currently operating With commercial our The reduction the X% range that, updating X%. X% selling We guidance weaker-than-expected to year to adjusted to $X.XX and year experiencing EBITDA are of macro increasing reflects range transportation these the to like for to we X% we headwinds, questions. full GTV prices leverage in our due our quarter to full from call are billion we

with Khan first of Instructions] Capital [Operator question Your comes the Sabahat RBC from Markets. line

can quantify? splitting of great. customer be that Can on about maybe -- major would at? And the you the how you how you what metrics this on was If just the looked may customer Maybe with other be you Great. just it maybe some to anything a of versus color question about you talk the RFP ask talk in And much that industry? you can I share Any are player much additional maybe on business, able the just process? win when announced.

Jim. it's Yes,

in delivering me for proud our IAA to of last be start team overcommitment what were the Ritchie partners going commitments on head-to-head IAA we and over and delivered, a focused Bros. car, to of have really by the the And and our SLAs commitments have business. And this that the got I we how and of awarded the into the us it's salvage doing Let we're for to it's look, rest and us this able year based on all won it's a that life not we we've together as those that of we've our cycle business. delivering, team all we has partner, and the put together, first transparency competition, details those of just and am any over but over and cars. they awarded on other both before And were come the to and the and rest what partner get about our saw accomplish. talked that

continued side, Great. deck, of called quarters couple And the And operating on maybe on of progression good slide just on out then side. the margin a you think the I here leverage. margin

potential getting of contributing If on making what and upside margin details into think of And just maybe runway to more next changes ground years? are about you can but the directionally, the level this? on few operational improvement not some the the that maybe share you over some are the you numbers, for just margin directionally,

Yes. It's Jim.

Eric. I'll give and start me Let it to

very line, As we costs then we calls, and items that's how the in on team for to expand margins to those executive RB as concentrate what focus how we how leadership this. on we're are an and going Global. And going as control discussed we do a going what we team, And do we're do not to top focus and X we're expand be never past on. line do focused always

has to get of of into what I'm to expect numbers he color if exact not that wants going other to details add. be. he Eric So to I'll But if pass it any we

keeping SLA improvement as where as with be going mind we want can right, performance, Yes, compromise I our we to on Jim. to this while It's within efficient just are on partners, in we just commented Thanks, business. Jim the to agree but Jim's the never our comment. continuous performance always

from next from James. Steven question comes Our Raymond Hansen

a of as parlay to obviously what contract share is follow-up first has one seeded? the service contract other be, just additional over on step. can Is Maybe question this is of win. been call obvious into over our previously time? ability your level an back wins that you the important is time performance -- will But Congrats sort

else's and control this perform do control going question. carriers don't aware we see on is I how can't someone I delivered of to to confident decision. Jim. confident those best control. now. performing what Look, make it's turning that what make is think doing doing control we is believe outperformance what the don't when for I going we're and this, doing, going partner sure should how I of week-over-week, people to is that make the to level, I'm how into how performing. again, to be when partners we're Great we What think have sure they're action, insurance sure that the a outcome. I'm and delivering make, able control them I'm a drive choice something to to But is partners they we're based and I'm can and to not it. be. highest of everyone going we're their we're of and our right can that we over get industry Steve, habit who other detail That's able of have month-over-month to in on And commitments. see do, the judge performing they a we're And we're upon. And in at the And their I is we're consistently decision. in and I very we're into what conversation. But what do and instead

of much win Do often to there's just That's the on the or the And attribution how option? talked that a performance metrics operational of the quick to -- performance the think any win the actual relates follow-up. key about helpful. you versus ground, of price you

it's think of combination I everything. Look, a

I insurance So every the looks think return. net at partner

by title into cycle I'm tow possible, you is the have get take time, impressed ASP. I the for equation, partners, look to think a where ASP the as And continued the headed. ability our to So costs, drive ability as used that's quickly what especially you car when of our market really at to

the that's that I whole whole what deliver. or one right It's be to have not the that net gets it's you it's believe partners, is the delivering I important -- returns package we're that's focused think what our segment equation. just and to I'm down So other, now. to It we're And on. upon able to

question from Friesen next Krista from Our CIBC. comes

quarter. the if commercial the maybe can there's to uncertainty on around and some was seeing more due on that maybe Congrats I wondering think if the bit the of you any specific elaborate areas just business little a is you election. you're if this and weaknesses

start interest and we in the happen new I'll over and add look and see cycle get Look, where some to market. going election, equipment, Yes. pass Look, back that's similar buying when to a Eric apprehensive, I'll to color. people it Sameer what's either at we rates every

a and go shocked else, one able the to need know a make us, there's they as second hard first quarter, part what going it just I'll in way quarter, favor need exactly to to sure the are is there's indicators, effect partners our in want that lot in they're of either everything election you, when of And Sameer price the and now pass what give time that color after environment. to to go it's And is of the about for it. and we're now and we that with I has fourth to for in know the Eric, past and calls, if we at couple interest sequence right we're just So are right not and our favor. or listening just it quarter, more is why cycle, of always everything effect, we them any for an matter to happens. But of a look executing a you over things it as delay price happens. And mentioned this of But rates continue and lot indicators else. where our to going time us, macro think

Yes, Sameer. it's end Krista, market I specifically any weakness. out call wouldn't causing

do the in we for means them purchasing new turn, from which is I hear higher interest to customers environment what is brakes rate of looking they're services. the disposition think on causing our perhaps new, plus cost the tap not

So I'd smaller say what would the rates we probably sensitivity around is and interest customers out. call

synergies you're much anticipated. faster? achieving on just that faster the found And side. cost you're anticipate Okay. beforehand? it you that cost Great. didn't synergy then maybe them Obviously, Or maybe than them Is you achieving additional

Look, a would it's it, Jim. state of I probably CEO. current philosophy CEOs different it just to might past be

and an do X we're able you think about stop. I to we at look the X ability RB opportunity all to to As margins and And and have very team, managing and to think expenses, committed our executive we're and we're think manage as those I in business. all of lucky levers, that as not I when Global going we're manage I grow think it, --

always side to that of it. ways not manage these points, of to but of things a cost do to we're to we growth business, the and look jeopardize look going as side for at continue the the need We're the so. going triangle constantly We to to optimize each

that each to we're leadership team. focus So optimistic those And but about in future the I'm constantly of all on important going points, think are and us very I as points of very us. those front what's of a to of when X

[Operator Instructions].

Craig Our next Baird. question Kennison comes from from

metric claims in you can a frequency. some It overall of just any loss the feels if on shed rate. the like or accident of milder total think number strength down, winter, offsetting I'm I mentioned wondering that was light and the accident you

big ago reason that kind when comparison. pass this. This our a seeing go and it I'll of remind industry, out it. in carrier quarter is through Sameer, through is carrier or performance. the to you're start at winter you our the And a we first look a a that I Yes. year mentioned our we as it's look, you much pretty number, to want fully you think being auto affected And just go salvage for collision everyone mild in of I'll the if of I as what loss

indicator why mind to new us, the different, in. We probably that the did to about a mild environment? have in yes, it cars quarters when way looking wouldn't we to big be starting mention offset It the win, those without was that, talking anything a end and mild winter. So But go again, of some winter keep have macro carrier come that. we want X of we had at a which Sameer, effect. for as quarter ago against the is our of that. But loss like performing would start you're be from will our add thing, big up year numbers, there some are. you a that we're And anything to or we And that does

we Craig, at to weather. much pretty quantify is did closely. Yes. hard how It's it look

the indicated, driver the customer obviously was bigger Jim As loss.

on make part as something wondering And that capital of the Okay. progress you whether be balance may buybacks sheet, allocation become decision? the I'm

capital Yes, a this an noted in is But last allocation. place in quarter, our as for do have Eric. not We authorization buyback. currently

Our term loan this paydown. around focus the is for year of A our remainder

comes next NBF. Sytchev question from from Our Maxim

Wondering what is the biggest around starting is we how Just about the of should Just the medium quick it in over this are well? drivers there? IAA And be of terms push any as I potentially take elasticity to a business in it maybe around color term? been question have your the thinking legacy rate. where guess or there thoughts the

rate But sides answer competitive what staying to we're looking side commercial there about look traditionally, charging. make is to able we've environment and everything train both to when this you what IAA. fees thing tough competitive the and take that on we're Ritchie we're sure traditional it's of on you auto the a accomplish when Bros. been goes at and side, Yes. it, at what Look, that the constantly it's it's because always and business, into we year, a call and think

of going are to do at you're again, a being we So those when business. Look, about of front what the future what's consistent place it's have of financial and fees with environment to a can we transaction. going think fees it I'm But in sides of basis. And a to in general, services about rate dealing do, and we do optimistic reflection of react some in else. I'm look in so our very that optimistic on competitive of what able the you're decisions is us add But a what especially increase very to and holds in what competitors the that on to and with know to take make to regard. place the a increase how in have ability able everything this I a about hard all additional both of when that our then we and profile process both some where process we're we

Okay. Excellent. And then follow-up. so just one

In have ASP update wondering thought that on terms just international of if your strategy? any you driving greater around reach, IAA through kind of and process I'm

way and more not have, and is more because the and operationally to car -- a run auctions and you can drive. we We'll is can of some your that allow car, is the sell highest money it again, they that meet Look, get to buyers the is, through run marketplace and where actually the the roll car, the of drive. drive had this in that definition that get definition international investment get in more drives something can the some participate cars drive way a about more the run went Yes. run and put or car. you overseas in today type get team It's their in it after was I that international international and to they you cases. But we make focused of a buyers, buyers. get think the our quarter But

merged now run their feedback for and just in ago I happy marketplace Ritchie them be together, need their are the the it's have international data happy the of drive, included. It's operationally. buyer and we're can relationships summit did what future. the cars cars those buyers we us, on you're to support So really leveraged our drives, team have they weeks they as we're money able the international and factor, and again, to our that and the about all international focus place think we got side type for really presence to the couple really offering run important especially our why with we this. But of should the anytime buyers making we the that the should weekly in is the where run it's car sure We in But having our execute they show And -- where in do about thinking cars why important. are very on are detail international, then sure want? how has and very in we a had level Bros. right drive of thinking they Ritchie being make program at Chicago biggest and all that what side trim invest and for make yearly a IAA a

RBC Our Khan comes Capital from next Sabahat question Markets. from

Great.

follow-up. throughout ones There quick headlines of around kind events were the one weather U.S. Just some small

exhibit updated Just handling of operations, an wondering those, to had if of of in of from opportunity of companies. any questions the the cat was feedback quarter. the one gone lines That might sort any have kind we investors of from and you over insurance got events you

So commentary curious had you any if there.

encouraged that I reaction We've partners, I of feedback how just one no would and small. very our have our they're look, support that the the partners And is received we're prepared to in our what size affected team the we do. see were to we I matter that the the very were say events. again, we're to this they from thing we it's I'm year those events end appreciation have small, small though going cat real The had start. I'll Jim. it's space. our Yes, have We're it. But estate, we're reacted. and on what the positive prepared. have time, cat, every see for ready has But what even partners,

quarterly the the We also reported everything sure place people, have have events, for basis. that in needs. to a We're place. And thing is other are quickly cats these doing we have to the how make we're partners and and we aware very do in transparency the minute cat on their the our we're going react of how to performing we're to ready that

a I event to know a our then that to and sound unfortunate as So I'm might ability this in very go people event. if communicate and partners that it's we confident happen, through cat go our through it. But our does weird, for cat performance

Thank you.

are We remark. over now back I'd to for now closing Kessler session. final James to hand the question-and-answer like

my the side belief those and to RB to what we to our RB to want for soon. look on set as this you much. than their appreciation to this commitment. so to customer for ability against over the Thank show on appreciation going If our our the so Global space. It's job talking over just I you it's the joining and has to call commitment to thank everyone do to deliver us to a business, very really anyone it forward that automotive construction, really do do just commitments constantly to done is continue that, show I And over team global in you transportation, else to of us and deliver make commitments. you tremendous And that's my to Thank living up different support and my and team. again, of I the over we much. X And their is, consistently commercial again. want to really true today, when ability a want over everyone

for attending today's you call. Thank

You wonderful Have may now a day. disconnect.