RBA: Highlights from the RBC Canadian Industrials Conference

Research evidence excerpt

RBA: Highlights from the RBC Canadian Industrials Conference

vorable – While the macro backdrop is evolving, management highlighted that the long-

term secular trend of rising loss rates/increasing cost of repair remain intact. Vehicle complexity also continues to increase, which

causes collision repair costs to rise and improves the appeal/economics of choosing the salvage option, all else equal. On the CC&T

business (aka legacy Ritchie Bros. auction business), management noted improved YoY customer sentiment as Q1/H1 of last year

was impacted by macro volatility resulting from DOGE/tariff-related uncertainty. While the macro environment is still dynamic,

management did note that the CC&T remains counter-cyclical in nature.

Driving transactions the primary focus, with attach rates viewed as an add-on – Management noted that driving transactions/

activity across its platforms remains the primary focus, with attach rates/ancillary services (transportation, financial services, etc.)

viewed as add-ons. While the ancillary services serve to boost margins, driving incremental activity and capturing share is where

they see the value, and this is evident in the progress over the recent years.

M&A and buybacks in focus – Recall that RB Global recently announced the closing of Blackmon (expansion in South Central U.S.)

in April and BigIron (see here) in May (a big step into agriculture end-markets). On the M&A front, the pipeline remains healthy in

the U.S./internationally (North America likely the primary focus). Management also noted that they would be open to buybacks

in addition to M&A. With leverage at 1.4x exiting Q1, we believe the company has ample flexibility to pursue an "all of the above"

capital allocation strategy.

All values in USD unless otherwise noted.