Ritchie Bros. Auctioneers Incorporated sold approximately $4.25 billion of equipment through 345 unreserved auctions and its online equipment marketplace during 2015.
Ritchie Bros. Auctioneers Incorporated sold approximately $4.25 billion of equipment through 345 unreserved auctions and its online equipment marketplace during 2015. This is a new annual record for the company, and represents a 1 percent increase in gross auction proceeds (GAP) compared to 2014. GAP growth from Ritchie Bros.' international operations was muted by the depreciation of local currencies against the U.S. dollar. On an organic basis, using foreign exchange rates consistent with comparable periods last year to remove the negative translational impact of reporting in U.S. dollars, GAP grew 8 percent in 2015 compared to 2014.
“We're pleased to have achieved another strong year for gross auction proceeds, generating $4.25 billion in global equipment sales during 2015, representing 8 percent organic growth. Much of this growth can be attributed to our success in both Canada, where GAP grew 14 percent in local currency, and the U.S., where GAP grew 7 percent. In the fourth quarter pricing softness did affect the used equipment market, as well as our GAP performance. However, we continue to believe there are growth opportunities for the company as we enter 2016, and remain focused on executing our strategic plan,” said Ritchie Bros. CEO Ravi Saligram.
“2015 was a transformational year for Ritchie Bros. We've further integrated EquipmentOne into our sales and marketing initiatives, welcomed world-class leadership to our global team, and built a stronger platform on which to grow our business through both organic growth initiatives and acquisitions. We see many opportunities to acquire companies that could expand the breadth of our services and scale of our operations.”
During the fourth quarter of 2015, the company generated gross auction proceeds of $1.1 billion, a decrease of 9 percent compared to the record fourth quarter GAP achieved last year. On an organic basis, GAP declined 1 percent during the fourth quarter of 2015 compared to the fourth quarter of 2014. Market values of used equipment declined during the quarter, which contributed to the decline in GAP.
Ritchie Bros. conducted its final unreserved auctions of 2015 on Dec. 18 in Los Angeles, Calif. and Kansas City, Mo. The company plans to release its full audited financial results for 2015 after market close on Feb. 25, 2015.
Growth in Transportation and Agricultural Equipment Sales
As key growth sectors for Ritchie Bros., growing GAP from assets from the Transportation and Agricultural industries was a focus during 2015.
• GAP from transportation sector assets increased 23 percent from 2014 to $797+ million in 2015. During the year, Ritchie Bros. sold more than 17,300+ transport trucks (truck tractors), a 36 percent increase in lots from last year, for $426+ million, a 37 percent increase in GAP from 2014.
• During 2015, Ritchie Bros. held 116 agricultural auctions in Canada and the United States. GAP from agricultural and related real estate assets decreased 5 percent from 2014, to $414+ million in 2015. Lots sold from the agricultural sector increased 6 percent globally during 2015, relative to 2014, demonstrating volume growth from this important sector. Foreign exchange translation had a disproportionate impact on reported GAP from this sector, as the majority of Ritchie Bros. agricultural auctions occur in Canada. In Canada, GAP from the agricultural sector increased 11 percent on a local currency basis.
Largest Year Ever in the U.S. and Canada
Ritchie Bros. sold more than $2.1 billion of equipment and trucks in the United States during 2015 — a 7 percent increase from 2014, and a new record for the company's U.S. operations. GAP growth was generated by strong performance from many regions across the United States, including:
• A 61 percent increase in GAP sold in Colorado
• A 62 percent increase in GAP sold in Ohio
• A 65 percent increase in GAP sold in Utah
• A 66 percent increase in GAP sold in New Hampshire
A number of company records were broken in the United States this year, including:
• 10,500+ items sold (a company record) at the Orlando, Fla., auction on Feb. 16 to 20, 2015, for $179 million.
• The largest single-consignor auction in Ritchie Bros. history, in Casper, Wyo., on March 25, 2015, where $54 million of cranes, trucks, trailers and other equipment was sold in one day at an offsite auction.
• The most productive year ever for Ritchie Bros.' Houston and Fort Worth, Texas, auction sites. The Houston site sold more than 19,700 lots during 2015, generating $238+ million in GAP. The Fort Worth auction site sold more than 18,800+ lots during 2015, generating $280+ million in GAP.
• The following auction sites all achieved their largest-ever auctions during 2015: Salt Lake City, Utah (March 17, 2015); Denver, Colo. (June 11 to 12, 2015); Fort Worth, Texas (Sept. 23 to 24, 2015); St. Louis, Mo. (Dec. 16, 2015)
Ritchie Bros. sold more than $1.3+ billion of equipment and trucks in Canada during 2015 to a 14 percent increase from 2014, and a new record for the company's Canadian operations. A number of other Company records were broken in Canada this year, including:
• Ritchie Bros.' Edmonton, AB auction site sold 38,250+ equipment items during the year for $576+ million during the year, representing an 18 percent increase in lots sold and a 28 percent increase in GAP sold in Edmonton compared to 2014.
• The company held its largest Canadian auction ever, in Edmonton on April 28 to May 1, 2015. More than 7,700 assets were sold at the auction, for total GAP of $177 million. Approximately $75 million of the auction sales were sold to online bidders (a new company-wide record), representing 49 percent of sales. The auction also attracted 14,000 bidders from more than 55 countries — another company-wide record.
• Ritchie Bros.' Montreal, QC, auction site achieved its largest auction ever, at its March 18 to 19, 2015 event. More than 2,700 equipment items sold for $34+ million. The auction also achieved new site records for online sales and total bidders (5,800+).
• Ritchie Bros. also held its largest ever auctions in Lethbridge, AB (Nov. 17) and Toronto, ON (Dec. 7 to 8) in 2015.
Participation at Auctions
International bidders are an important element of Ritchie Bros. auctions, as they generate global market pricing. Changes in foreign exchange rates can occasionally affect the level of participation of international bidders. During 2015, approximately 16 percent of GAP was generated by international buyers (successful bidders located outside the country of the sale). The proportion of international buyers declined slightly, from 19 percent in 2014, as a result of foreign exchange changes and the relative purchasing power of international buyers at some auctions, primarily sales in the United States. Approximately 10 percent of GAP generated in the United States was generated by international buyers, a decline from 14 percent in 2014 when the U.S. dollar had not yet strengthened significantly relative to other currencies. Within the United States, we also witnessed stronger demand from local bidders, with 38 percent of winning bidders residing within the state of the auction, an increase from 34 percent in 2014.
Ritchie Bros. attracted record online bidder registrations and sold approximately $1.9 billion of equipment, trucks and other assets to online buyers at Ritchie Bros. auctions and EquipmentOne customers in 2015, a 6 percent increase over 2014 and the highest amount ever sold online by the company in one year.
EquipmentOne Sells Approx. $116+ Million
in Gross Transaction
Value in 2015
EquipmentOne, the company's online equipment marketplace, has generated more than $116 million in Gross Transaction Value (GTV) so far this year, representing 9 percent + growth over last year. The business achieved profitability on an annual basis during 2015, demonstrating the growth potential of this important sales channel.
Ritchie Bros. Financial Services Finances Over $220 Million in 2015
Ritchie Bros. Financial Services (RBFS) provided over $220 million of financing to equipment buyers so far this year, a new record for this growing business and a 30 percent increase in financing activity compared to 2014. RBFS works with select lending partners to find financing solutions for customers purchasing equipment, including loans and lease-to-own programs. RBFS does not utilize company capital in its financing activities. During 2015, Ritchie Bros. Financial Services also expanded the services it offers customers, by offering equipment leases and structured finance solutions.
Executive and Board Changes During 2015
Several important executive and board changes were announced during the year, including the appointment of Sharon Driscoll as chief financial officer, Todd Wohler as chief human resources officer, Rob McLeod as chief business development officer, and Terry Dolan as president — U.S. and Latin America. The company also welcomed Lisa Pollina as a director on the board.
$114 Million Return
Ritchie Bros. increased its quarterly cash dividend by 14 percent in August 2015 to $0.16 per share, and paid shareholders $66 million in total dividends during the year. During 2015, Ritchie Bros. also repurchased and cancelled 1.9 million shares, for a total cost of $48 million.
For more information, visit RitchieBros.com.