RB GLOBAL INC. Q1 FY2025 earnings call

• Acquisition of J.M. Wood: Acquired for approximately $235 million, enhancing geographical coverage in Alabama and adjacent states, bringing a talented sales team with deep local relationships, expected to close in the second or third quarter subject to regulatory approvals.
• CC&T End Markets: Proactively investing in the future by focusing on controllable factors driving growth and improving operational efficiencies, including a comprehensive network of territory managers and new productivity-improving programs.
• Enterprise Partners: Strategy focused on delivering solutions to optimize total cost of ownership, leveraging data, products, and parts procurement technology for fleet realignment.
• Operational Strides at Ritchie Bros. Yards: COO implemented a metric-driven framework, increasing planned sales events in North America by approximately 15% and strategically adjusting event timing to balance supply and support premium pricing for consignors.
• Automotive Sector: Hosted IAA's 22nd Industry Leadership Summit with record attendance, secured Direct Line Group as a new UK partner, gained global salvage market share, strong gross returns, robust operational quarter, industry-leading transparency program, and high percentage of vehicles sold to international buyers, but ASP impacted by tariffs and mix headwinds.

Automotive: GTV increased by 2% driven by a 7% increase in unit volumes, partially offset by a decline in the average price per vehicle sold. Unit volume growth was due to strong organic growth from existing partners and year-over-year increase in salvage market share. Commercial Construction & Transportation (CC&T): GTV decreased by 18% driven by a 19% decline in lot volumes, partially offset by an increase in average selling price. Excluding the impact of the Yellow Corporation bankruptcy, lot volumes would have declined approximately 6% year-over-year, and the GTV decline in the CC&T sector would have been approximately 14% if not for the bankruptcy impact.

• Full year outlook remains unchanged despite market uncertainty and trade policy changes.
• Remain committed to long-term growth strategy by investing in key technological initiatives and expanding the sales force, while exercising prudent expense management and limiting discretionary spending.

• Recently announced tariffs introduce uncertainty, affecting customers' and partners' decision-making processes.
• Macroeconomic factors, including buyer hesitancy due to tariffs and year-over-year mix headwinds, impacting ASP in the automotive sector.

Q: Sabahat Khan from RBC Capital Markets asked about the CC&T segment's customer positioning and wait-and-see approach.

A: Jim Kessler responded that customers are uncertain due to macro factors like interest rates and tariff uncertainty, with optimism about mega projects but a focus on adding value to partners' P&L.

Q: Krista Friesen from CIBC asked about IAA's market share growth and customer hesitancy.

A: Jim Kessler mentioned they've announced carrier changes contributing to market share, and macro environment is unique with multiple dynamics affecting decisions.

Q: Michael Feniger from Bank of America asked about GTV outlook and auto side impacts of tariffs.

A: Eric Guerin said full year outlook remains, with back half expected stronger; Sameer Rathod noted tariff impacts are speculative but guidance is maintained.

Q: Craig Kennison from Baird asked about the J.M. Wood acquisition synergies and template for other deals.

A: Jim Kessler discussed filling yard presence in Alabama, leveraging scale, technology, and services, and seeing opportunities for tuck-in acquisitions.

Q: Maxim Sytchev from NBF asked about Australia ramp-up.

A: Jim Kessler said mid-summer is the plan to start accepting cars at IAA/RB Global lots in Australia.