Rb Global Inc. Q4 FY2023 Earnings Call

Good morning. My name is Joanna, and I'll 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 speakers’ remarks, there will be a question-and-answer session. Thank you. I'll now turn the call over to Mr. Sameer Rathod, Vice President of Investor Relations and Market Intelligence to open the conference call.

Hello, and good afternoon. Thank you for joining us today to discuss our fourth quarter results. Joining me today are Jim Kessler, our Chief Executive Officer, and Eric Guerin, our Chief Financial Officer. The following discussion will include forward-looking statements, which can be identified by such words as expect, believe, estimate, anticipate, plan, intend, opportunity 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 integration of IAA, including the anticipated cost synergies are considered forward-looking and involve risks and uncertainties. The risks 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 report and annual report on Form 10-K, which are available on the Investor Relations website. 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, Form 10-Q and investor presentation posted on our website. We are unable to present a quantitative reconciliation of forward-looking non-GAAP financial measures as management cannot predict all the necessary components of such measures. Investors are cautioned not to place undue reliance on forward-looking non-GAAP financial measures. At this time, I would like to turn the call over to Jim. Jim?

Thank you, Sameer, and good afternoon to everyone. We finished the year strong with fourth quarter gross transaction value growth of 13% on a pro forma combined basis. All our sectors contributed to solid GTV growth, fueled by our team's dedication to consistently overdeliver on the commitments we make to our customers. Our continued focus on operational excellence and driving incremental efficiencies across the organization resulted in strong adjusted EBITDA growth. Investing in our teammates through a best-in-class people experience remains core to our strategy. Our ONE Team, All In culture was recognized recently with a prestigious Great Place To Work certification. The recognition underscores our ongoing progress in integrating our teams and solidifying RB Global as a highly attractive workplace. This translates to increased engagement and productivity with our teammates, which benefits our customers and all our stakeholders in the long term. Let me start by talking about our Commercial Construction and Transportation sector. We continue to be the partner of choice for our customers as we guide them through their disposition needs. The consignment environment remains supportive as OEM production has ramped up, allowing equipment owners to act on fleets that were aged during the pandemic. That said, we are not resting on our laurels. We are reinforcing our winning strategy by investing in our sales force, recruiting top talent and providing better sales coverage in certain markets within North America. Every market share percentage point recapture translates to more satisfied customers, solidifying our commitment to excellence and remaining the partner of choice. Moving to the Automotive sector. We continued our steady acceleration towards operational excellence by implementing enhanced processes to overdeliver against our service level agreements. Customer savings and operational efficiencies go hand in hand for us. That's why we prioritize optimizing total performance after transaction closing. Picking up the vehicles quickly and efficiently stops storage cost, rental car cost and other auxiliary costs for our customers that significantly impacts net returns. I am proud of the team and pleased to say that our process improvement, combined with strategically deploying internal towing costs and tow assets, have dramatically improved our performance compared to prior levels. Our pickup compliance and internal measure of our tow performance was approximately 98% in the fourth quarter, a substantial improvement year-over-year. More importantly, we have consistently been in the high 90s of compliance for several months. We are focused on streamlining buying processes and strategically leveraging technology to maximize gross returns for our customers. Our efforts yielded measurable results again in the quarter, with automotive average selling prices climbing an industry-leading 2.5% year-over-year. A prime example of our technology deployment is our recent implementation of JD Power ChromeData VIN Descriptions with our IAA Interact merchandising platform. This gives buyers unparalleled and industry-leading insights for trim level data on vehicles in our marketplace while unlocking additional value for our sellers. We are also getting phenomenal feedback on our recently launched Sales Decision Center. This system gives our sellers incredible real-time transparency into the variables impacting the market's microstructure of our auctions, allowing them to optimize their price realization further and unlock incremental value. As we continue to discuss our operational excellence program with our partners, we will launch a program that will provide our aggregated SLA performance to all of our insurance partners next week, creating an industry-leading level of transparency. The road ahead is paved with continuous improvement, and we're committed to exceeding customer expectations at every turn. So momentum from our efforts to integrate IAA is fueling a broader focus on efficiencies and operational excellence across the entire organization. We've realized $17 million in actual cost synergies in the quarter and have actioned a total of $70 million in annual run rate cost synergies since the close of the transactions. We are confident with all the plans in place to achieve our cost synergy target on the timetable we previously communicated. Our responsibility is to manage overall costs, not just cost synergies and more importantly, deliver overall results. We are keenly focused on top line growth and margin expansion opportunities across the entire organization. And therefore, we will no longer be reporting progress on cost synergies quarterly. By continually exploring ways to efficiently manage the cost of our business through operational excellence, we will enable strong flow-through, which will drive shareholder value. In our discussions with our valued partners, land ownership is not necessary for meeting or exceeding our service level agreements or winning additional market share. We maintain a surplus of land capacity across our asset classes, allowing us to accommodate our operational requirements easily. As we indicated last quarter, we will continue to purchase property strategically and opportunistically in regions surplus of capacity where the market opportunity makes strong financial sense for us to make these investments. In certain markets, we proactively have and will continue to acquire space to better service the needs of our customers. Before passing the call to Eric, I would like to introduce him formally. When seeking our new CFO, we had three critical criteria in mind. Firstly, we wanted someone who could enhance operational excellence by collaborating closely with the sales and operational teams. Secondly, a people-oriented leader who seamlessly aligns with our ONE Team, all-in culture. Lastly, someone with a deep understanding of a customer-centric company. Eric embodies all these qualities, and his experience within the automotive ecosystem has allowed him to dive in and make an immediate impact. Let me pass the call to Eric to discuss our financial results for the fourth quarter and our outlook for 2024. Eric?

Thank you, Jim. I'm thrilled to be here and wanted to add my welcome to everyone joining the call. I want to thank the entire team at RB for making me feel so welcome and right at home. Before we jump into the details, please note that year-over-year comparisons for GTV and revenue refer to a comparison to the pro forma combined results of Ritchie Brothers and IAA for the prior year period. Total GTV increased 13% with strength across all sectors. Automotive GTV increased by 10%, benefiting from higher unit volumes and a higher average selling price. The existing customer portfolio drove the growth in unit volumes as the salvage industry continues to benefit from a rebound in the total loss ratio. In the fourth quarter, CCC estimated that the loss ratio increased to approximately 20.4% compared to 20% in the same period last year. Recall that the total loss ratio is the number of vehicles deemed salvage as a percentage of total accidents. Used automotive prices continue to trend lower year-over-year, while repair costs remain elevated, creating a productive environment to consider a car a total loss after an accident. GTV in the commercial construction and transportation sector increased by 20%, driven by increases in lot volumes, partially offset by declines in average price per lot sold. Part of the decline in the average price per lot sold was due to asset mix, as lot volume growth came from rental and transportation customers, where asset values are intrinsically at lower ASPs compared to traditional earthmoving assets. Additionally, we continue to observe declines in price year-over-year on an apples-to-apples basis. I also want to note that the Yellow Corporation dispersal had a negligible impact on our GTV in the fourth quarter. Moving to service revenue, service revenue increased 14% with our service revenue take rate expanding approximately 20 basis points to 20.2%. Service revenue increased due to growth in GTV and a higher average service revenue take rate. The increase in the average take rate was driven by a higher average buyer fee rate and growth in our marketplace services revenue, partially offset by a lower average commission rate. The lower average commission rate was primarily driven by a higher mix of automotive-related GTV and a higher mix of construction and transportation assets from strategic accounts. Moving to inventory, inventory revenue declined 10%, with lower revenue contributions from the automotive and commercial and construction and transportation sectors. Inventory rate for the quarter contracted 620 basis points year-over-year to approximately 5%. The decline in the inventory rate year-over-year can be attributed to prices declining faster than anticipated between the purchase date and the day of sale of inventory in our commercial and construction and transportation sector and an increase in the cost of vehicles sold in our automotive sector. As previously noted, we expect the environment for at-risk deals to remain competitive in our commercial, construction, and transportation sector. Turning to earnings, adjusted EBITDA increased 14% compared to the combined adjusted EBITDA of IAA and Ritchie Brothers for the year-ago period. Growth in adjusted EBITDA was in line with our pro forma service revenue and GTV growth. Adjusted earnings per share increased 21% on strong operational performance and the full quarter impact of IAA inclusion, partially offset by higher share count, higher net interest expense and the impact of the Series A senior preferred shares. At the end of the fourth quarter, our adjusted net debt to trailing 12 months adjusted EBITDA was approximately 2.5 times. Adjusted net debt to trailing 12 months combined adjusted EBITDA was approximately 2.2 times, down two-tenths of return compared to last quarter. We remain focused on deleveraging to approximately 2 times by the end of the first quarter of 2025. Moving to the outlook, we wanted to provide our initial thoughts on 2024. We expect gross transaction value growth between 1% and 4% year-over-year in 2024 compared to the pro forma combined gross transaction value of 2023. We expect adjusted EBITDA from $1.17 billion to $1.23 billion in 2024, reflecting continued growth, our commitment to operational excellence program, and prudent investment in growth initiatives. We expect our full-year 2024 GAAP and adjusted tax rate to be between 25% and 28%. Moving to CapEx, we currently expect full-year capital expenditures, which include PP&E net of proceeds on disposals and additions to intangible assets, to be between $275 million and $325 million. With that, let's open the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. First question comes from Michael Doumet from Scotiabank. Please go ahead.

Hey. Good morning, guys. And welcome, Eric. Super quarter, but I'd like to start with the 2024 guidance. At the midpoint, it looks like you're looking for about 2.5% GTV growth, about 5% on an EBITDA basis pro forma, and that compares to EBITDA growth of close to 20% on a pro forma basis in the last three quarters. So I know the customer loss partly explained some of the slowdown, but wondering what else is contemplated within the guide, what market trend and perspectives for legacy and IAA as well?

Hey, Michael, thank you so much. Look, I think you got a big part of it right first is the customer loss. And then also, as we look out in the industrial side and you look at years over years of what happens in the history of price going up and down and units going up or down. In the back half of the year, we do see that pricing unit dynamic changing where units are going to drop from where they are today and pricing who knows where it goes up, right? And what percent it does. So those two things are the biggest reflection of the guidance that we gave.

Got you. And then maybe just turning to the cost. It looks like the operating leverage is really starting to click here. You're still working on some synergies between the two businesses. It also sounds like there's a bunch of efficiencies you're targeting as well, Jim. So maybe expand on some of the major drivers for SG&A into '24 and then how we should think about SG&A more broadly?

Yes. Look, I think SG&A, just in general, the philosophy that we have as a management team, we're constantly looking at how do we get more efficient. And no matter what process or activity that we have in our organization, we're taking a look at it. Think about all the portfolios and all the businesses that we have, Rouse, SmartEquip, different services that we provide, we're constantly looking at each of our businesses of how do you get more efficient? How do you get better? But along with getting efficient, the one thing I don't want to lose sight of is we are looking at how do we drive long-term value for everyone as we're doing this. So it's the combination of both of what we're looking at is, look, we're always going to want to be efficient no matter what year, what quarter, what day as a management team, we're going to look at how do we drive the most efficiency out of the business and invest in the things that make sense for the long term that keep us viable and in everyone's mind when it comes to all the asset classes that we support. And so I think it's just the philosophy of what you're seeing and what we're trying to drive. But we're never going to stop how do we become more efficient. It's the culture of the management team that we have in place right now, a big reason why we brought in Eric to help us continue this pace. And we want to be diligent about every dollar we spend on capital; we want to get a return for it. And look, I think all good companies have this in mind of what they try to drive; we're just very committed to it.

Nicely done. Those are my two. Thank you.

Thank you. The next question comes from Steve Hansen from Raymond James. Please go ahead.

Yeah, good morning guys. Thanks for the time. Look, the service performance metrics you described being in the high 90s now are quite impressive. How do you feel about parlaying those into some additional market share gains through 2024 on the IAA side? I know in the deck, you've described that as part of your priority, but just like some additional color on that if you might, and how you feel like that's being reflected in the customer reception and ultimately winning new business?

Yes. Steve, the win in the business is always the hard part, right, because it's not my decision to make; it's someone else's. What I can control is making sure when we make a commitment on any SLA or anything, no matter what segment or asset class we have, because I include this on the industrial construction ag side just like I do in automotive. And when we make a commitment, we're going to overdeliver on that commitment. And I believe when we do that consistently the trust that we're going to build with our customer base, and I can hear it now in our quarterly QBRs that they're seeing the difference, and they're appreciating the difference. But again, I'm very realistic as we talk about the U-shape last quarter. I know I need to get some months behind us because I think the only way you build trust and confidence is by showing month-over-month that you can deliver, and we look at it day over day, week over week. And when you do that, the type of industry that we're in for the automotive side, when you're in this and there's two main players in that space, when you create a viable competitor, then what it comes down to for each of our customers is who do you trust to deliver on a consistent basis. And I feel really good about the progress we're making, and we're being very transparent with our partners about where we're at and what we're working on and how we're going to add value to them, right? Because at the end of the day, our biggest thing that we're focused on is their customers' experience, driving cost savings out of their business. Operationally, how we do that day in and day out and driving the SLAs down to the branch level where they feel I'm totally accountable for it. So we're really confident about it. But again, I don't get the chance to make the decision of when it happens; that's someone else's decision.

No, that's very I appreciate that. And just a follow-up maybe on one of your earlier comments about moderating growth in units, particularly in the auto sector. Just is there anything specific that you're seeing in the current framework or like in the current or time frame current quarter, that's starting to suggest that's already evident or is that something where you expect to the back half?

Yes. I'm going to give Sameer this in a second. But again, I think it's more what we see in the history as we look at trends and cycles of what happens as we look at there...

Yes. So Steve, the moderating growth in automotive reflects what we discussed last quarter with the customer loss. So if you think about the fourth quarter, we still had a full impact for this customer. We'll probably get a half a quarter impact in the first quarter. And then the second quarter, you'll get the full run rate without the customer loss. So that's what that reflects.

Okay...

Steve, my comment was more on the industrial side, just to make sure we're clear.

Understood. Appreciate that. Okay, thanks.

Thank you. The next question comes from Craig Kennison at Baird. Please go ahead.

Yeah, thanks. I know there have been questions on the auto side where share has been an issue, but I wanted to ask about the competitive dynamic on the construction side. You're clearly the market leader there, but your auto competitor has made an acquisition that could threaten that share over time. I'm wondering if you could just share an update on the competitive dynamic in the construction space?

Yes. No, happy to do so. So for us, we're not taking granted of our position of where we are on the industrial side. Like we've mentioned before, we are actively invested in territory managers to make sure we're in the market, building relationships and having conversations. We're actually entering markets where the competitor that you mentioned is located. But we're not going to take it for granted, and we're constantly building our relationships with our customers. I'm in Orlando today and have spent the last 5 days with our customers, building that confidence.

Yes. Thanks, Jim. And maybe as a follow-up on the territory manager comment. I just wonder if you'd share with us how that role has evolved and what your philosophy is today in terms of your go-to-market strategy and the importance of a territory manager versus call centers and other marketing approaches?

Yes. We are managing both strategies simultaneously. There is a shift towards self-service, but we are running programs that include inside sales for our long-tail customers. It's clear that in the industrial sector, many customers still value personal relationships, especially when it comes to high-value equipment costing $200,000 or $300,000. They seek that trust and commitment, particularly in scenarios like unreserved auctions where assurance is crucial. Therefore, we believe that having territory managers maintain in-person relationships remains important. We acknowledge that the market will continue to evolve, and we are actively developing self-service options in our marketplace, supported by our inside sales team. Thus, we are implementing both approaches, but we expect that the significance of in-person relationships with territory managers will not drastically diminish in the next three years.

Thanks, Jim.

Thank you. The next question comes from Gary Prestopino at Barrington Research. Please go ahead.

Good morning, Jim and Eric. Glad to get reacquainted again. Yes, I wanted to ask you, there was a lot of low-hanging fruit at IAA and in particular, in the issue with centralized versus decentralized decision-making. Has that issue of moving from centralized to decentralized been implemented at all of the salvaged sites at this point?

Yeah. So it's a tough question because, as I mentioned, we're always looking at ways to get more efficient and what works better for our customers, right? So what should be decentralized versus centralized. And sometimes there's a mixture of both, right, using centralized to support the decentralized and back and forth. But what I can tell you is the culture of the branch manager feels they own the process, and this is my SLA to manage. And we have implemented a new bonus program for the branch manager starting January 1, that bonuses them off of their ownership of the SLAs. So what I feel really confident is the culture of the branch manager owns it. And the things that should be in the branch, we've shifted the low-hanging fruit stuff to the branch. But we're constantly going to always evaluate what's the best support mechanism for the branch and how to be as efficient as possible.

So, okay. So as you talk to or your people talk to the insurance companies, the consigners of vehicles, what is some of their wish list that they would like to see IAA implement to improve service levels?

It's quite diverse when it comes to our insurance partners. Starting with Tier 1, the larger insurance carriers, and then moving to regional entities like farm bureaus, they all have different priorities. Our focus for all our partners is to minimize advanced charges quickly and keep them as low as possible. We continuously assess this. Once we have the vehicle, whether it's through inspection services, images, or obtaining a title swiftly, we aim to halt depreciation during the process. Additionally, we are focused on finding the right auction platform to drive average selling prices and properly categorize vehicles that are operable versus those that are salvaged. We consistently seek ways to enhance average selling prices, ultimately striving for the best net return. While everyone desires the best net return, different partners and their philosophies on software and integrations vary. We are adaptable and capable of integrating with various partners, facilitating data exchange. Our primary focus is on net returns, which we manage through three main areas, each encompassing numerous factors.

Thank you.

Thank you. The next question comes from John Healy from Northcoast Research. Please go ahead.

Thank you. Jim, I just wanted to get your thoughts on what you mentioned in the prepared remarks about the transparency program on the auto side. Can you talk a little bit about what that looks like and what that feels like, if you think it's something that competitively others have? How it will make a difference for you? And then secondly, just if and when you guys get the opportunity to win some share on that side of the business, what's your general thought process of how that will come online? Are these typically a couple of states, a pilot? Do they last 3 months before you can prove yourself? Just would love to see kind of if you do get a chance to win, how we might see it kind of unfold in contributing the business?

Yes, John, everything you mentioned is valid. I come from the collision industry, where there is a clear model for performance measurement due to the larger number of competitors. You can easily see how you're doing compared to others. In contrast, the salvage business has just a couple of players, so that transparency isn't there, particularly since some partners can compare performance themselves while others rely on us for insights. I'm becoming increasingly confident in our performance, and our plan is to share our results in key performance categories with our partners every quarter. We want to eliminate any uncertainty regarding how we compare to our competitors by providing our metrics directly to them. We'll conduct quarterly business reviews and monthly updates tailored to their needs, but we will also share industry data to reinforce our performance and goals. This transparency is crucial for us, and we are committed to operational excellence. I'm confident that we can consistently deliver strong results, and I'm willing to share that information to demonstrate our commitment to this aim.

Great. That's helpful. And then you mentioned you're down in Orlando right now. I don't know if you mentioned it earlier because it happened between calls, but any kind of thoughts in terms of how Orlando is looking performing for you guys? And any sort of early indications of what might be in hold for the industry this year just by spending time on the ground there?

Yes. I'll just speak more to our customers. It was the biggest turnout that we've had from a customer event as we're going through this. And I think we did the press release where we talked about a historical number of lots that we're selling. So I think our customers are what I got are very happy with what they're seeing down here in Orlando, and it was great to get the turnout, which just gets back to the relationship that we have and the trust that we've built with our customers.

Great. Thank you.

Thank you. The next question comes from Larry De Maria from William Blair. Please go ahead.

Thanks. Good morning, everyone. I think the CapEx is over $275 million. What is the expected run rate? How do you view this figure for the next few years? Is it a solid baseline to start from? Can you provide some insights on that?

Yes, it's Eric. On the CapEx, the $275 million to $325 million range is specifically to 2024. Obviously, we'll continue to invest in our digital platforms, our PP&E as required. But I wouldn't build that into your long-term model at this point. I'm just providing guidance for 2024 at this time.

Thank you. To clarify, I know you've addressed this several times, but regarding the IAA share and the U-shape comments, you've mentioned some market share gains in the presentation. Is it correct to assume we are expecting roughly flat shares in 2024 for your GTV, not accounting for the previous loss? Additionally, are there any factors other than the SLAs and execution that might lead to changes? I suspect pricing could be one option, but I realize that buyer fees are unlikely to change significantly, as they represent a major portion of the profits. Could you also provide any insights on the tenders that might significantly influence this aspect this year?

Look, again, it's always a tough conversation because we don't get to make the final decision of who decides to move when they move, right? Of course, we know when all the contracts come up and all that fun stuff. But look, we're just laser-focused on what's in our control, how do we drive those results? And then we know what the type of industry we're in, having two viable players that people can choose from. Our hope is there's some rational market share that comes out of that, that largely makes sense for the type of environment we're in on the salvage side.

Okay. Well, I can appreciate that and sensitivity around it, but is it safe to say that we're assuming a flat year for IAA excluding the share losses? Or actually, we think we're going to pick up some share?

Yes. We're not going to give specifics on automotive by itself. But what I would say on the guidance, we've built in the impact of the carrier that we lost. As Sameer described earlier, that will roll off in Q2 through Q4 that is built in.

Okay, fair enough. Thank you. Good luck.

Thank you. The next question comes from Maxim Sytchev from National Bank Financial. Please go ahead.

Hi. Good morning, gentlemen.

Hey. How are you?

Good, good. I just wanted to circle back if it's possible kind of on the legacy equipment side. I mean as pricing has started to normalize, I mean, what we've seen in the past is that there's a high probability of kind of attaching additional services, whether it's like painting, small repairs and things like that. Are we starting to see this already in the field or do you think that's more of a sort of a back half dynamic from your perspective?

Yes. We - I think your point is correct. And in our mind, I think it's more of a back half type of environment. We saw a little bit in Orlando as we're kind of going through it this year. But definitely, as units and price start to change, that becomes an opportunity. And look, I think as the environment changes, all of our services have a different profile to them, right? Our financial services look different in different economic environments. Transportation looks different. So we constantly look at how do we drive more services no matter what environment but some of them do act a little bit differently in certain environments and refurbishment and paint, we think could look differently in the back half. But again, it's a small part of our complete business.

Yes, sure. As we consider enhancing IAA's capabilities, could you describe your journey? Is it currently influenced by adopting some of the technological tools from the legacy systems or by other improvements? Could you discuss these two aspects and the current status?

Yes. I think it's a mix of several factors. One thing that has impressed us about the salvage side of the business is the systems they have implemented, despite our limited capacity this year. The processes they have developed are incredibly flexible and efficient, especially in terms of recovering vehicles after a flood. Even though the season was short, the quality of what we found during our due diligence was remarkable. I am also very impressed with the AI advancements that IAA has made, particularly with the IAA vehicle score and other technologies, which they are now applying to industrial construction. At the branch level, it was crucial for the team to understand roles and responsibilities. We needed to clarify who is accountable for each task and how to function as a unified team. There was a lot of effort put into establishing clear responsibility to avoid confusion around whether we were waiting for central decisions or decentralized initiatives. We dedicated time to ensure that everyone knew their roles and responsibilities. We analyzed our challenges to identify areas for improvement. Additionally, we ensured that performance incentives for our employees, from executive leadership to branch levels, were aligned with our goals to achieve the desired results. At the branch level, clarity was key, giving visibility to our issues, which helped in training our staff to address those challenges. We are committed to meeting our service level agreements while managing our costs. Our goal is to exceed customer expectations. The technological innovations we have implemented have contributed to the increased average selling prices we have seen in the salvage segment this quarter. I believe this progress is a result of both technology and effective processes.

Thank you. Have you noticed any turnover at the branch level since you changed some of the legacy compensation structures? What have you observed?

Interestingly, I believe the team now appreciates their accountability and understands what they need to focus on. They realize it's within their control to pursue their goals, which is a shift from the past when they felt uncertain about how to achieve their targets. Previously, it was a matter of chance whether they received a bonus or not. Now, they have complete control over their performance, and they seem to value this newfound clarity about the business. The team is excited, and I’m looking forward to spending time in three different regions. In the next two months, I will meet all the branch managers from IAA. Although I have met some of them already, this will be my opportunity to connect with each manager and ensure that the culture we aim to foster is communicated effectively. The salvage team is enthusiastic about being part of RB Global and appreciates the changes we’ve implemented so far.

Okay. Excellent. And maybe just one last one, if I may. In terms of Holcar, any update on that side would be great. Thanks so much.

So a big part of our strategy, right? So it's part of what we want to go after, just like growing salvage share. And I'll probably just say growing all the shares across all of our asset classes, no matter which one we're talking about. And we believe Holcar is another opportunity for us to go after and grow share and the same thing we did at the branch level. We created clarity, bonus programs and for sales teams and commissions of how do you go after this business. So I think the team is excited, but they're getting started, and this is really their kickoff in 2024 to go after this business. But like everything, look, it's building relationships and confidence, so it takes a little bit of time to get it. But we believe in the Holcar business, and we're going to invest in it and go after that side of the business to grow share just like we do with all the asset classes that we're very proud of with the growth that we've had over the last three quarters.

Thank you. There are no further questions at this time. I will turn the call back over to Jim Kessler for closing comments.

Again, I just wanted to thank everyone so much for taking the time and listening to our story about RB Global. And again, this is RB Global. This is just not one asset class. What I am impressed with the team is we're managing multiple asset classes, and we're growing each of our asset classes. So I just wanted to end by thanking the team for all their hard work as being part of RB Global. And thank you for taking your time, and we'll talk to everyone soon. Thank you so much.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.