RB Global, Inc.

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 Brothers' third quarter conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, please press star then the number two. Thank you. I will now turn the conference over to Mr. Sameer Rathod, Vice President of Investor Relations and Market Intelligence, to open the conference call. Mr. Rathod, you may begin your call.

Hello and good morning, and thank you for joining us today's call to discuss third quarter 2021 results. Joining me today are Ann Pandozzi, our Chief Executive Officer, Sharon Driscoll, our Chief Financial Officer, as well as other members of the management team, will be available for the Q&A portion of this call. The following discussion will include forward-looking statements. Comments that are not a statement of fact, including projections of future earnings, revenue, gross transaction value, and other items are considered forward-looking and involve risks and uncertainties. The risks and uncertainties that could cause our actual and operating results to differ significantly from our forward-looking statements are detailed in our SEC and Canadian securities filing, available at our website, investor.richiebrose.com. We encourage you to review the earnings release and Form 10-Q, which are available on our website, as well as Edgar and Cedar. On this call, we will discuss certain non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures, and a reconciliation between the two, see our earnings release in Form 10-Q. Presentation slides accompany our commentary today. These slides can be viewed through the live or recorded webcast or downloaded from our website. All figures discussed today will be in U.S. dollars unless otherwise noted. I will now turn the call over to Anne Fanduzzi.

Thank you, Samir, and good morning to everyone for joining our call today. First, I would like to start the call by thanking our outstanding employees who continue to manage through this unprecedented environment deliver the highest level of service to our customers. We continue to prioritize health and safety of our customers and team members by implementing best practices and updating our COVID protocols based on regional recommendations and our best judgment. In the third quarter, we had hoped to welcome back customers to our auction theaters. However, given the surge in the Delta variant, we delayed our plan. We are excited to announce that the first event where customers are coming back en masse will be our flagship Orlando event in February of 2022. This will be an amazing way to welcome customers back. We are all very excited for Orlando. Our on-channel platform is delivering strong outcomes for our customers with bids per lot and used equipment pricing remaining very strong. Year-on-year comparisons of our financial metrics masked the underlying strength of our business as the quarterly cadence of 2020 was abnormally impacted by higher COVID-related disruptions, most notably in the third quarter. We believe the best view to the business trajectory is a two-year stacked view versus the pre-pandemic 2019. Despite ongoing supply chain headwinds, we have grown our GTVs and non-GAAP adjusted operating income, 17% and 48% respectively, compared to the pre-pandemic baseline of Q3 2019. This is a strong outcome given the environment we are in. We see the unprecedented environment of tight equipment supply caused by low inventory levels, exacerbated by supply chain issues, hampering OEMs production as a point in time event and consider it outside of our control. By focusing on building, developing, and growing the facets of our business that we can control, we will be in a strong position to disproportionately capitalize on improvements in the broader environment. I will cover how we are doing this with new products, new satellite yard locations, and a more robust sales coverage model here shortly. We are also spending our time focused on strategic M&As giving us step changes in the execution of our strategy. At our investor day last December, we laid out our vision for transforming from an auctioneer to a global trusted marketplace for insight services and transaction solutions. We highlighted how our inventory management system will serve as a gateway to that marketplace and will help us unlock not only $300 billion in annual GTD, but also provide us an entry into other services ours or those of key partners that we can monetize around the used equipment market. Since that day, we have been busy putting pieces of that strategy in place, whether organically building capabilities through a test and learn approach or M&A, as is the case with Rouse, Euro auctions, and our recently announced acquisition of SmartEquip. To that end, we identified facilitating parts and service transactions, on behalf of our dealer and OEM partners as an integral part of our marketplace vision, and our acquisition of SmartEquip provides the foundation of that capability. SmartEquip has spent 20 years building critical connections between equipment owners and dealer and OEM partners to make the parts buying experience seamless. On this slide, we captured all the ways in which this acquisition strengthens each of our strategic pillars. SmartEquip is a SaaS-based business that is the industry standard for complete equipment parts, electronic procurement, catalog, and commerce technology in the industrial segment worldwide. It offers a single platform for end-to-end parts procurement on behalf of our dealer and OEM partners and supports over $1 billion of transaction volumes annually. In the intermediate future, we are planning on running it as a standalone business However, over time, we will use smart equipped technology and supplier relationships to power a parts and service offering on our marketplace, enabling our dealer and OEM partners to connect quickly and efficiently with our equipment owners. We officially launched RichieList last month, which is our North American listing service. We see this as an on-ramp into the Richie Brothers ecosystem that will accelerate IMS adoption and our marketplace vision. Richie List will help customers sell equipment on their own and give them the ability to leverage all of Richie Brothers' tools and services they need to be successful, such as used equipment valuations and market trends, purchase safe inspections, and so forth. At the end of the day, we know many customers want to sell equipment themselves, and Richie List allows them a way to engage in our ecosystem and provide us avenues and monetization that we previously didn't have. RichieList allows for customers to workflow equipment into one of our channels if they end up choosing not to sell it themselves. We are also offering customers functionality to promote their listings. And unlike other services in the industry with paid advertisement obligations, we are simplifying the engagement by offering unlimited listings for only $99 a month. Moving to our inventory management system or IMS, what we view as the gateway into the marketplace. We continue to make strong progress with 141% growth sequentially compared to last quarter in the cumulative number of organizations that are activated. We are slowly migrating our transactional workflow into IMS providing for a better customer experience. We are very pleased and excited about the journey we are on both with our customers and our partners. We also continue to scale our satellite yard strategy with the opening of eight new locations in the quarter. On this slide, you can see phase one and phase two. Phase one are the sites located internationally that we use to test our growth hypothesis in 2020, and phase two is everything we have done this year to begin to scale. We are very encouraged by the results from the sites we opened in the last 12 months and see satellite yards as a key component of our organic growth plan. We also spent 2021 testing and learning from our new sales coverage model in Texas. Throughout the year, we learned a lot, iterated quickly, and I am happy to report that we now have implemented a new structure that is delivering strong results. Our new sales coverage model will enable more touch points with customers, and allow a higher level of engagement with a wider array of new customers while still supporting our existing customers. Although we are seeing very encouraging results on our KPIs around sales attainment, average contract size, and forward sales pipeline, we are most excited by the engagement we are seeing with new customers that haven't previously participated in the Ritchie Brothers ecosystem. with a first touch coming through our inside territory managers. Everything we are doing here is about making it easier for our customers to interact with us. The new sales coverage model is also a key element of Ritchie Brothers' organic growth. It is a journey for us and one we will continue to hone as we scale it beyond Texas. After Sharon discusses our financials, I will talk about how we are executing against our strategic pillars and outlook, and then we will move to Q&A. And now, over to Sharon.