RB Global, Inc.

Good morning. My name is Michelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Ritchie Brothers Auctioneers fourth 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 would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then the two key. Thank you. I will now turn the call over to Mr. Sameer Rathod, Vice President of Investor Relations and Market Intelligence to open the call. Mr. Rathod, you may begin your conference.

Thanks and hello and good afternoon to everyone joining on our call today to discuss our fourth quarter and full year 2022 results. Joining me on the call today are Anne Fandozzi, Ritchie Brothers Chief Executive Officer, and Eric Jacobs, Ritchie Brothers Chief Financial Officer. The following discussion will include forward-looking statements, which can be identified by words such as expect, believe, estimate, anticipate, plan, intend, opportunities, and similar expressions. Comments that are not a statement of fact, including but not limited to projections of future earnings, revenue, gross transaction value, debt, and other items, Business and market trends and expectations regarding the proposed acquisition of IAA, including the anticipated timing, benefit, cost synergies, and opportunities with respect to the transaction are considered forward-looking and involve risk and uncertainties. These factors include the satisfaction of the closing conditions, including shareholder approval for the IAA transaction. We note that during today's call, we will be discussing potential opportunities for the combined company and related information, including estimated amounts or ranges for such opportunities for illustrative purposes. This information is not intended to imply future targets, expectations, or guidance and does not incorporate potential costs achieved for specific timelines. The risk and uncertainties that could cause actual results to differ significantly from such forward-looking statements are detailed in our news release issued this afternoon, as well as our most recent quarterly reports and annual reports on Form 10-K, which are available on our Investor Relations website and on EDGAR and CEDAR. We also have and will make important filings with the SEC in applicable Canadian securities regulatory authorities in connection with the proposed IAA acquisition, including registration statement on Form S-4 filed with SEC. you are urged to read those materials carefully. On this call, we will also discuss certain non-GAAP financial measures, including forward-looking non-GAAP financial measures. For the identification of non-GAAP financial measures, the most directly comparable GAAP financial measures, and the applicable reconciliation of the two, see our news release, Form 10-K, and investor presentation posted to our website. We are unable to present quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures. All figures discussed today are U.S. dollars unless otherwise indicated. Following the prepared marks, we will open the call to questions. Now I'd like to turn the call over to Ritchie Brothers' Chief Executive Officer, Anne Fanduzzi.

Thank you, Samir, and good afternoon to everyone joining us today. I'm excited to be here with you to discuss Ritchie Brothers' phenomenal 2022 performance. We delivered record financial results and made significant progress in continuing to build our marketplace technology and advancing our growth initiatives, despite operating in a challenging environment of continued tight supply, inflationary headwinds, aggressive competition and foreign exchange volatility. Speaking on behalf of the entire leadership team, I want to express my sincere appreciation to all of our employees who have shown time and again their focus and dedication to delivering best-in-class service to our customers. Without our employees, none of this would be possible. When I was appointed CEO in 2020, Ritchie Brothers had solid core assets and very talented employees, was profitable, and generated a lot of cash. But the business was stagnant. Since then, we have recruited new leaders, and through organic initiatives, partnerships, and strategic acquisitions, we have taken bold steps to redefine our operating model and reinvigorate profitable growth. As a result, we are transforming Ritchie Brothers from a traditional auction business to a trusted global marketplace for insight services and transaction solutions, and we continued our journey by taking several important steps in 2022. Ritchie Brothers 2.0, our marketplace technology platform, is in the process of piloting an all-new digital checkout experience with self-serve invoices and settlements. This builds on our track record of innovation and further expands our ecosystem of solutions that make it easier for customers to do business with us. We continue to test satellite yard locations and have learned that these can attract new customers into our ecosystem. We have implemented a new sales coverage model that has enabled GTV growth, whether through our inside sales team working in tandem with our satellite yards to target the long tail of sellers where 80% of the equipment sits across our many verticals, or the accelerated investments we are making to put more sales resources in the field to expand our customer relationships. SmartEquip, Rouse, Ritchie Brothers Financial Services, and our inventory management system all continue to grow as standalone solutions and have record performance. While we are excited about the performance of these solutions so far, we see even greater opportunities ahead as our digital marketplace strategy scales. And speaking of records, let's talk about some of the ones we set over the past year. $6 billion in annual GTVs. Over $700 million transacted on our Marketplace e-platform. Over $1 billion funded volume by Ritchie Brothers Financial Services. Over 75,000 active listings on Ritchie. Total number of organizations activated on IMS was up an incredible 465% year-over-year at the end of December. Also, adjusted earnings per share increased 24% year-over-year to a record $2.41. We are so proud of the milestones we've achieved in 2022. Let me transition from discussing the past to discussing what we expect for the future. Clearly, there are a few themes that are emerging. First, There are still a lot of projects out there, and our customers remain busy. That said, customers are beginning to expect some softening in their end markets. This is coming while they are starting to see loosening in new equipment supply in some verticals. What we know for certain is that this is a critical time for our customers, and we want to serve them and help them navigate their most complex challenges. This is one of the many reasons we are so excited by the IAA's acquisitions. to help us grow GTV with our Ritchie Brothers customers using access IAA yard capacity to form the basis of significantly scaling our satellite yards. We identified IAA as a potential combination for Ritchie Brothers back in mid-2020, and together with our board of directors have evaluated a possible acquisition of IAA for more than a year. The strategic logic of this combination is clear. With IEA, we believe we can accelerate growth for Ritchie Brothers, drive margin expansion, and expand our reach into an attractive adjacent vertical. By adding our services and operating expertise, we have the opportunity to fulfill IEA's full potential as well. IEA operates in a salvaged vehicle market which has strong secular tailwinds. IEA is a leading player in this attractive market and has shown countercyclicality and resilience throughout the economic cycle. IEA has an expansive yard footprint that complements Ritchie Brothers with approximately 45% available capacity. IEA's 210 yards that are already near Ritchie Brothers customers will allow us to accelerate our standalone yard strategy. The key here is that we are better together, and combining the footprints will allow us to create a network of locations that will provide us with the agility to meet all our customers' needs and unlock higher levels of growth and margin expansion. As we recently highlighted, we see a potential to unlock $350 to $900 million in EBITDA growth opportunities, including our expected $100 to $120 million or more of clearly identified and achievable cost synergies. Investors should take comfort in knowing that the team at Ritchie Brothers has extensive knowledge in the automotive industry and a proven track record of acquiring and integrating companies. And speaking of integration, the integration planning has already started. We have established an integration management office, or IMO, comprised of dedicated, experienced operators and leaders to ensure this integration plan is executed seamlessly. The IMO will be supported by a leading third-party consultancy firm and overseen by an internal steering committee that will have clear charters, milestones, and KPIs to drive accountability. As we announced just a few weeks ago, we amended the terms of our transaction structure with IAA to further enhance the value proposition for both Ritchie Brothers and IAA shareholders. We are pleased with the feedback we have received from many new and existing shareholders who who recognize the compelling benefits of the acquisition. We encourage shareholders to vote ahead of the March 14th meeting to help us bring this transaction to fruition and realize the value inherent in bringing our two companies together. Let me now hand the call to Eric Jacobs to highlight some additional information about our fourth quarter financial results.