News Release
Ritchie Bros. reports fourth quarter 2022 results
Achieves full year record GTV of $6.0 billion
VANCOUVER, February 21, 2023 - Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA, the "Company", "Ritchie Bros.", "we", "us", or "our") reported the following results for the fourth quarter, for the three months ended December 31, 2022.
(All figures are presented in U.S. dollars)
"Ritchie Bros. delivered outstanding bottom line performance in 2022 with record $6.0 billion in GTV," said Ann Fandozzi, CEO of Ritchie Bros. "These results reflect the high bar we set for execution for our team and a strong focus on delivering value for our customers. We are excited by the anticipated closing of the IAA acquisition and its expected impact to Ritchie Bros. for years to come."
In addition, Eric Jacobs, CFO of Ritchie Bros. added, "we are pleased with our continued strong financial performance in the fourth quarter. Despite a challenging supply, mix, and pricing environment, the Ritchie Bros. team is executing well, and we are confident in our ability to maintain the momentum."
Fourth Quarter Financial and Business Metric Highlights1:
- Gross transaction value ("GTV")1 increased 6% year-over-year to $1.5 billion or 9% year-over-year when excluding the impact of foreign exchange
- Total revenue increased 24% year-over-year to $443.9 million
- Service revenue increased 11% year-over-year to $272.5 million
- Inventory sales revenue increased 50% year-over-year to $171.3 million
- Net income increased 48% year-over-year to $45.3 million
- Diluted earnings per share increased 48% year-over-year to $0.40 per share
- Diluted adjusted earnings per share1 increased 36% year-over year to $0.68 per share
- Adjusted EBITDA1 increased 24% year-over-year to $121.5 million
Full Year Financial and Business Metric Highlights1:
- GTV increased 9% year-over-year to $6.0 billion or 12% year-over-year when excluding the impact of foreign exchange
- Total revenue increased 22% year-over-year to $1.7 billion
- Service revenue increased 14% year-over-year to $1.1 billion
- Inventory sales revenue increased 37% year-over-year to $683.2 million
- Net income increased 110% year-over-year to $319.8 million
- Diluted earnings per share increased 110% year-over-year to $2.86 per share
- Diluted adjusted earnings per share increased 24% year-over year to $2.41 per share
- Adjusted EBITDA increased 21% year-over-year to $465.2 million
1 For information regarding Ritchie Bros. use and definition of this measure, see "Key Operating Metrics" and "Non-GAAP Measures" sections in this press release
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Financial and Operational Highlights
Three months ended December 31, | Year ended December 31, | ||||||||||||||||
% Change | % Change | ||||||||||||||||
2022 over | 2022 over | ||||||||||||||||
(in U.S. dollars $000's, except EPS and percentages) | 2022 | 2021 | 2021 | 2022 | 2021 | 2021 | |||||||||||
GTV | $ | 1,544,267 | $ | 1,461,492 | 6 | % | $ | 6,025,889 | $ | 5,533,931 | 9 % | ||||||
Service revenue | 272,523 | 244,788 | 11 | % | 1,050,583 | 917,759 | 14 % | ||||||||||
Service revenue as a % of total GTV | 17.6 % | 16.7 % | 90 | bps | 17.4 % | 16.6 | % | 80 bps | |||||||||
Inventory sales revenue | 171,338 | 114,585 | 50 | % | 683,225 | 499,212 | 37 % | ||||||||||
Inventory return | 17,771 | 11,426 | 56 | % | 74,651 | 51,291 | 46 % | ||||||||||
Inventory rate | 10.4 % | 10.0 % | 40 | bps | 10.9 % | 10.3 | % | 60 bps | |||||||||
Net income attributable to stockholders | 45,290 | 30,595 | 48 | % | 319,657 | 151,868 | 110 % | ||||||||||
Adjusted EBITDA | 121,522 | 98,202 | 24 | % | 465,215 | 385,324 | 21 % | ||||||||||
Diluted earnings per share attributable to stockholders | $ | 0.40 | $ | 0.27 | 48 | % | $ | 2.86 | $ | 1.36 | 110 % | ||||||
Diluted adjusted earnings per share attributable to | |||||||||||||||||
stockholders | $ | 0.68 | $ | 0.50 | 36 % | $ | 2.41 | $ | 1.94 | 24 % |
GTV by Geography
Three months ended December 31, | Year ended December 31, | |||||||||||||||||||||
(in U.S. dollars $000's, except percentages) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||
2022 over 2021 | 2022 over 2021 | |||||||||||||||||||||
United States | $ | 853,420 | $ | 809,504 | 5 % | $ | 3,432,366 | $ 3,230,708 | 6 | % | ||||||||||||
Canada | 456,043 | 413,669 | 10 % | 1,707,072 | 1,441,929 | 18 | % | |||||||||||||||
International | 234,804 | 238,319 | (1)% | 886,451 | 861,294 | 3 | % | |||||||||||||||
Total GTV | $ | 1,544,267 | $ | 1,461,492 | 6 % | $ | 6,025,889 | $ 5,533,931 | 9 | % |
For the Fourth Quarter:
- GTV increased 6% year-over-year to $1.5 billion driven by a rebound in lot volumes offset by weaker mix adjusted prices, unfavourable impact of foreign exchange and unfavorable asset mix. GTV increased 9% when excluding the impact of foreign exchange.
- Service revenue increased 11% year-over-year, driven by solid contribution from both Auctions & Marketplace ("A&M") and positive growth from our Other Services. Service revenue as a percent of GTV increased 90 bps year-over-year to 17.6%.
- Inventory return increased 56% year-over-year to $17.8 million due to higher volume of inventory deals, driven primarily by the rental sector within our strategic accounts in the United States. Solid execution from the at-risk team drove a robust 10.4% inventory rate.
- Net income increased 48% year-over-year to $45.3 million as a result of strong growth in operating income, higher interest income from a rise in interest rates and a lower effective tax rate.
- Adjusted EBITDA increased 24% driven by high flow through revenue growth of 24%.
- Total number of organizations activated on the Business Inventory Management System increased by 465% year-over-year compared to 2021.
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For the Full Year:
- GTV increased 9% year-over-year to $6.0 billion driven by continued strong demand, strong asset pricing and higher lot counts, partially offset by an unfavourable impact of foreign exchange and an unfavorable asset mix. GTV increased 12% when excluding the impact of foreign exchange.
- Service revenue increased 14% year-over-year driven by higher buyer fees implemented in early 2022 and revenue growth from our Other Services. Service revenue as a percent of GTV increased 80 bps year-over-year to 17.4%.
- Inventory return increased 46% year-over-year to $74.7 million due to higher volume of inventory deals sourced, including from our strategic accounts in the United States primarily in the finance and rental sectors. In addition, Canada saw an increased volume of inventory sold mainly in the commercial transportation and construction sectors. Solid execution from the at-risk team drove a robust 10.9% inventory rate.
- Net income increased 110% year-over-year to $319.8 million primarily due to the gain of $169.1 million on property, plant and equipment from the sale of the Bolton property. The increase was also due to higher operating income and a lower effective tax rate, partially offset by $9.7 million primarily relating to higher interest expense from our 2021 Notes and a loss on redemption.
- Adjusted EBITDA increased 21% driven by strong flow through on revenue growth of 22%, despite inflationary pressures on costs and higher costs relating to investments made for our growth initiatives.
- Cash provided by operating activities was $463.1 million for 2022
- Debt / net income was 1.9x for the twelve months ended December 31, 2022.
- Adjusted net debt1 / adjusted EBITDA1 was 0.3x at and for the twelve months ended December 31, 2022.
Result by Segments
(in U.S. dollars $000's, except percentages) | Three months ended December 31, 2022 | Year ended December 31, 2022 | ||||||||||||||
A&M | Other | Consolidated | A&M | Other | Consolidated | |||||||||||
Commissions | $ | 124,898 | $ | - | $ | 124,898 | $ | 485,916 | $ | - | $ | 485,916 | ||||
Fees | 97,174 | 50,451 | 147,625 | 366,079 | 198,588 | 564,667 | ||||||||||
Total service revenue | 222,072 | 50,451 | 272,523 | 851,995 | 198,588 | 1,050,583 | ||||||||||
Inventory sales revenue | 171,338 | - | 171,338 | 683,225 | - | 683,225 | ||||||||||
Total revenue | 393,410 | 50,451 | 443,861 | 1,535,220 | 198,588 | 1,733,808 | ||||||||||
Ancillary and logistical service expenses | - | 14,009 | 14,009 | - | 52,628 | 52,628 | ||||||||||
Other costs of services | 25,742 | 2,801 | 28,543 | 104,902 | 10,597 | 115,499 | ||||||||||
Cost of inventory sold | 153,567 | - | 153,567 | 608,574 | - | 608,574 | ||||||||||
Selling, general and administrative | 115,568 | 20,289 | 135,857 | 466,251 | 73,682 | 539,933 | ||||||||||
Segment profit | $ | 98,533 | $ | 13,352 | $ | 111,885 | $ | 355,493 | $ | 61,681 | $ | 417,174 | ||||
Total GTV | $ | 1,544,267 | N/A | N/A | $ | 6,025,889 | N/A | N/A | ||||||||
A&M service revenue as a % of total GTV- | ||||||||||||||||
Rate | 14.4 | % | N/A | N/A | 14.1 % | N/A | N/A |
(in U.S. dollars $000's, except percentages) | Three months ended December 31, 2021 | Year ended December 31, 2021 | ||||||||||||||||||
A&M | Other | Consolidated | A&M | Other | Consolidated | |||||||||||||||
Commissions | $ | 126,135 | $ | - | $ | 126,135 | $ | 469,718 | $ | - | $ | 469,718 | ||||||||
Fees | 73,370 | 45,283 | 118,653 | 293,408 | 154,633 | 448,041 | ||||||||||||||
Total service revenue | 199,505 | 45,283 | 244,788 | 763,126 | 154,633 | 917,759 | ||||||||||||||
Inventory sales revenue | 114,585 | - | 114,585 | 499,212 | - | 499,212 | ||||||||||||||
Total revenue | 314,090 | 45,283 | 359,373 | 1,262,338 | 154,633 | 1,416,971 | ||||||||||||||
Ancillary and logistical service expenses | - | 13,780 | 13,780 | - | 52,301 | 52,301 | ||||||||||||||
Other costs of services | 25,216 | 1,988 | 27,204 | 97,423 | 5,534 | 102,957 | ||||||||||||||
Cost of inventory sold | 103,159 | - | 103,159 | 447,921 | - | 447,921 | ||||||||||||||
Selling, general and administrative | 110,161 | 15,735 | 125,896 | 406,360 | 49,843 | 456,203 | ||||||||||||||
Segment profit | $ | 75,554 | $ | 13,780 | $ | 89,334 | $ | 310,634 | $ | 46,955 | $ | 357,589 | ||||||||
Total GTV | $ | 1,461,492 | N/A | N/A | $ | 5,533,931 | N/A | N/A | ||||||||||||
A&M service revenue as a % of total GTV- | ||||||||||||||||||||
Rate | 13.7 % | N/A | N/A | 13.8 % | N/A | N/A |
____________________________
1 For information regarding Ritchie Bros. use and definition of this measure, see "Key Operating Metrics" and "Non-GAAP Measures" sections in this press release
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Auctions & Marketplace Segment Results:
For the Fourth Quarter:
- A&M service revenue increased 11% year-over-year to $222.1 million with A&M take rate increasing 70 basis points to 14.4% driven by higher buyer fees implemented in early 2022.
- Inventory sales revenue increased 50% year-over-year to $171.3 million primarily due to a higher mix of GTV contracted via inventory deals. This increase in mix was mainly driven by our strategic accounts in the United States.
For the Full Year:
- A&M service revenue increased 12% year-over-year to $852.0 million with A&M take rate increasing 40 basis points to 14.1% driven by higher buyer fees implemented in early 2022.
- Inventory sales revenue increased 37% year-over-year to $683.2 million primarily due to a higher mix of GTV contracted via inventory deals primarily sourced from our United States strategic accounts teams.
Other Services Segment Results:
For the Fourth Quarter:
- Other Services total revenue increased 11% year-over-year to $50.5 million primarily due to the inclusion of SmartEquip, stronger performance and execution in RBFS, and growth in Rouse.
- Other Services selling, general and administrative expenses increased 29% year-over-year to $20.3 million due to higher labor costs from investments made for our growth initiatives in RBFS and Rouse, and the inclusion of SmartEquip.
For the Full Year:
- Other Services total revenue increased 28% year-over-year to $198.6 million primarily due to stronger performance and execution in RBFS, the addition of SmartEquip and strong growth in Rouse.
- Other costs of services increased 91% year-over-year to $10.6 million mainly due to the acquisition of SmartEquip.
- Other Services selling, general and administrative expenses increased 48% year-over-year to $73.7 million due to the inclusion of SmartEquip, higher costs in RBFS with strong results, as well as investments made for our growth initiatives in Rouse.
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Dividend Information
Quarterly Dividend
On January 13, 2023, the Company declared a quarterly cash dividend of $0.27 per common share, payable on March 3, 2023 to stockholders of record on February 10, 2023.
Fourth Quarter and Full Year 2022 Earnings Conference Call
Ritchie Bros. is hosting a conference call to discuss its financial results for the quarter and year ended December 31, 2022 at 2pm Pacific time / 5pm Eastern time / 10pm GMT on February 21, 2023. The replay of the webcast will be available through March 21, 2023.
Conference call and webcast details are available at the following link: https://investor.ritchiebros.com
About Ritchie Bros.
Established in 1958, Ritchie Bros. (NYSE and TSX: RBA) is a global asset management and disposition company, offering customers end-to-end solutions for buying and selling used heavy equipment, trucks and other assets. Operating in a number of sectors, including construction, commercial transportation, agriculture, energy, mining, and forestry, the company's selling channels include: Ritchie Bros. Auctioneers, the world's largest industrial auctioneer offering live auction events with online bidding; IronPlanet, an online marketplace with weekly featured auctions and providing the exclusive IronClad Assurance® equipment condition certification; Marketplace-E, a controlled marketplace offering multiple price and timing options; Ritchie List, a self-serve listing service for North America; Mascus, a leading European online equipment listing service; Ritchie Bros. Private Treaty, offering privately negotiated sales; and sector-specific solutions GovPlanet, TruckPlanet, and Ritchie Bros. Energy. The Company's suite of solutions also includes Ritchie Bros. Asset Solutions and Rouse Services LLC, which together provides a complete end-to-end asset management, data-driven intelligence and performance benchmarking system; SmartEquip, an innovative technology platform that supports customers' management of the equipment lifecycle and integrates parts procurement with both OEMs and dealers; plus equipment financing and leasing through Ritchie Bros. Financial Services. For more information about Ritchie Bros., visit RitchieBros.com.
Forward-looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable U.S. and Canadian securities legislation (collectively, "forward-looking statements"), including, in particular, statements regarding future financial and operational results and growth and value prospects and payment of dividends. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan", "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend", or "believe" and similar expressions or their negative connotations, or statements that events or conditions "will", "would", "may", "could", "should", or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond the Company's control, including the duration and impact of the COVID-19 pandemic on the Company's operations, the operations of customers, and general economic conditions, including inflation, rising interest rates and foreign exchange rate fluctuation; the numerous factors that influence the supply of and demand for used equipment; economic and other conditions in local, regional and global sectors; the risk that a condition to closing of the Company's pending acquisition of IAA may not be satisfied (or waived), that either party may terminate the merger agreement or that the closing of the proposed IAA transaction might be delayed or not occur at all; the Company's ability to successfully integrate acquired companies including IAA, and to receive the anticipated benefits of such acquisitions; the significant costs associated with the pending IAA transaction; potential business disruption following the public announcement or consummation of the proposed IAA transaction; and the risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and our subsequent quarterly reports on Form 10-Q, which are available on the SEC, SEDAR, and Company websites. The foregoing list is not exhaustive of the factors that may affect the Company's forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, and actual results may differ materially from those expressed in, or implied by, these forward-looking statements. Forward looking statements are made as of the date of this news release and the Company does not undertake any obligation to update the information contained herein unless required by applicable securities legislation. For the reasons set forth above, you should not place undue reliance on forward looking statements.
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Ritchie Bros Auctioneers Inc. published this content on 22 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 February 2023 08:56:02 UTC.