Slide 1: Financial results briefing for the Q4 of FY2018
Financial results briefing for the Q4 of FY2018 (October 1, 2017 - September 30, 2018) Execution of growth strategy for continuous 25%+ OP growth November 13, 2018 The 55 th IR Meeting GMO Payment Gateway, Inc. (3769: Tokyo Stock Exchange Section-1) https://corp.gmo-pg.com/en/
Slide 2: A cautionary note about the contents of the document
A cautionary note about the contents of the document The contents of this document are based on generally recognized economic and social conditions, as well as assumptions judged to be reasonable by GMO Payment Gateway as of November 13, 2018. However, please note that they are subject to change wit
Slide 3: Agenda
Agenda 1. Summary of financial results for FY2018 2. Earnings forecast for FY2019 and management systems 3. Future actions to implement growth strategies 4. Financial highlights 5. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3
Slide 4: 1. Summary of financial results for FY2018
1. Summary of financial results for FY2018 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4
Slide 5: Overview of FY2018
1.1 Overview of FY2018 Executing growth strategy and capital raise, remaining open issues in terms of human resources Highlights Challenges ・Accelerated expansion of online payment ・Intensifying competition in an environment Acquiring of big operators and big projects due to for recruitment revision
Slide 6: Summary
1.2 Summary OP up 65.9％（33.8％ under J-GAAP）、101.2％ vs. full-year plan ■Earning results FY2017 FY2018 FY18 full-year FY18 Actual vs. （Million yen） YoY change Actual Actual plan Full year plan Revenue 21,054 26,417 ＋25.5％ 26,107 101.2% Operating profit 3,948 6,550 ＋65.9％ 6,475 101.2% （5,015） （6,708) （
Slide 7: Factors that affected the cumulative results
1.3 Factors that affected the cumulative results Financial statements disclosed under IFRS from Q1 FY2018 +25.5％ Revenue 26,000 （Million yen） （＋）Online payments grew steadily （＋）Business with banks expanded (ex. ”Ginko Pay”) 24,000 （＋）GMO Payment After Delivery and Remittance value grew 22,000 （＋）MA
Slide 8: Revenue/OP by segment
1.4 Revenue/OP by segment Payment processing profit up 26.7%, MSB turned black ■Revenue by segment ■ OP by segment (before * (): year-on-year changes consolidation adjustment) Total: Post-adjustment （Million yen） Total: Pre-adjustment +25.5％ +38.0％ 25,000 （Million yen）*Post-adjustment 5,361 （+28.0％）
Slide 9: Revenue breakdown by business model
1.5.1 Revenue breakdown by business model Fee steadily while stock increased as the business with bank expanded （Million yen） Spread Yoy ＋19.8％ 25,000 ・Online payments grew steadily ・Revenue from a particular merchant dropped (a special and one-off factor) 11,105 (Yoy ＋15.4％ in Q3 alone) 20,000 Fee
Slide 10: Revenue breakdown (Quarterly)
1.5.2 Revenue breakdown (Quarterly) Quarterly trends of revenue items ※ (Million yen) J-GAAP IFRS 2,946 3,000 2,801 2,861 2,773 2,653 2,691 2,666 2,471 2,705 2,500 2,436 2,360 2,101 2,004 2,000 1,895 1,809 1,527 1,500 1,383 1,441 1,227 1,259 1,026 1,000 931 959 980 923 794 906 929 893 724 749 875 80
Slide 11: 2. Earnings forecast for FY2019 and management systems
2. Earnings forecast for FY2019 and management systems Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 11
Slide 12: Earnings forecast for FY2019 and management systems
2.1 Earnings forecast for FY2019 and management systems Our target is to achieve 25% profit growth ■ FY2019 （Unit: Million yen, ％：Yoy change） FY2018 FY2019 （Million yen） Yoy change Actual plan Revenue 26,417 31,850 +20.6％ Operating Profit 6,550 8,300 +26.7％ Profit attributable 4,255 5,106 +20.0％ to
Slide 13: Revenue plan
2.2 Revenue plan 20.6%-increase due to accounting factors, etc. Continuously aiming for the growth rate of 25%+ (Million yen） J-GAAP IFRS ・Affected by accounting change to cause part of service revenue ・Planned 20.6%-increase by reflecting conservative aggregation of the 40,000 factors with a high d
Slide 14: 3. Future actions to implement growth strategies
3. Future actions to implement growth strategies Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 14
Slide 15: Payment market forecast
3.1.1 Payment market forecast We aim for Growth continuation outperforming markets 2005 2018 2019 2020 （IPO） （Present） （Outlook） （Outlook） EC rate 1％ ≒ x6 5.8％ 6-7％ 7-8％ BtoC EC market ¥3.5T ¥16.5T ¥20.0T ¥22-24T Payment after - ¥420B ¥580B ¥820B delivery market GMO-PG Gr. ¥0.1T ¥3.3T ¥4.5T ¥6-7T TR
Slide 16: Operating profit target for 2025
3.1.2 Operating profit target for 2025 Operating profit of 25 billion yen, enhance capital efficiency Target ¥25B~ ■Operating profit target Growth of GMO-FG IoT Comprehensive collaboration framework with SMFG Global Growth of investments ROA： 6.7％ Global lending ROE：19.1％ ROA： 5.1％ Fintech Growth of
Slide 17: EC: Growth strategy for the future
3.2 EC：Growth strategy for the future Aiming for further high growth by taking opportunities in growing market and focusing on growing business fields ■Online payment ■TRX value (excl. system development, Bank Business and offline payment) 880,000 （million） ＋26.8％ 830,000 TRX value Payment processin
Slide 18: FinTech: Assets & revenues related to MSB
3.3.1 FinTech：Assets & revenues related to MSB Changing portfolio with achievements of 25.3%-increase of revenue vs. 847.4%-increase of profit ％：vs. Q1-4 FY17 ■MSB-related assets ■Segment revenue (J-GAAP) ■Segment profit 1,377（Million yen） +25.9％ －31.8％ +18.4％ －30.3％ +51.6％ Affected by a change in b
Slide 19: FinTech: Enhancement of profitability
3.3.2 FinTech：Enhancement of profitability Aiming for further enhancement of profitability by executing growth strategy ■MSB-related assets and profits MSB-related assets MSB-related assets/Segment profits 2016/12 2017/3 2017/6 2017/9 2017/12 2018/3 2018/6 2018/9 ■ Growth Strategy BtoB factoring Exp
Slide 20: FinTech: GMO payment service
3.3.3 FinTech：GMO payment service Expansion of market share in deferred payment service market ■Market size of deferred payment ■Growth rates of deferred payment market Annual growth rate of 40% or more and GMO-PS (indices) Market size for 2017: ¥420 billion (expected) 11 4,200億円 ≒ x10 10 （expected）
Slide 21: Cashless: International comparison
3.4.1 Cashless：International comparison UK-type cashless payment expected to increase on a full scale even in Japan with “preference for cash” ■Global cashless rate Types of cashless payment 100.0% China type UK type 89.1% 90.0% 80.0% 70.0% 60.0% 60.0% 55.4% 54.9% 51.0% 48.6% 50.0% 45.0% 39.1% 38.4%
Slide 22: Cashless: Positioning and growth strategy
3.4.2 Cashless：Positioning and growth strategy Generation of revenues by both payment methods to directly or indirectly support cashless payment ■Positioning of Ginko Pay ＜Sales territory＞ ＜Payment methods＞ ＜Involvement with GMO-PG＞ Macro: Credit Card Generation of revenue XYZ Pay Protect online eco
Slide 23: IoT: Growth strategy
3.5.1 IoT：Growth strategy Accelerated growth by incorporating demand for payment terminals created by the revisions of the Installment Sales Act ■Initial revenue of GMO Financial Gate ＜Current efforts＞ Generation of revenue by incorporating demand for YoY +419% replacement of terminals compatible wi
Slide 24: Our view on reduction in the rates of credit cards
3.5.2 Our view on reduction in the rates of credit cards Business fields of offline/high rates are under discussion. Credit card rates(％) 2% Card present payment 3% Online Payment Business fields under discussion on reduction of service fees (e.g. restaurants, etc.) 5% Copyright (C) 1995 GMO Payment
Slide 25: Global: Mid-term Strategy
3.6.1 Global：Mid-term Strategy Expansion of client base, growth of revenue and profit through synergistic effects among 3 business segments Financial business Business to banks Business to merchants Minority Investment ＜Segments＞ ＜Strategic targets＞ MACROKIOSK Money Service ■Revenue image Addition o
Slide 26: Global: Segments
3.6.2 Global：Segments Expansion of 3 business segments United States China Taiwan Hong Kong Philippines Thailand Vietnam Malaysia Segments Payment processing business Singapore Payment enhancement business Indonesia Money Service Business (MSB) （as of end of FY2018） Copyright (C) 1995 GMO Payment Ga
Slide 27: 4. Financial highlights
4. Financial highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 27
Slide 28: Changes in our balance sheet
4.1 Changes in our balance sheet Increase in deposits and MSB-related assets and convertible bonds （Unit：Million yen） Current assets Noncurrent assets Liabilities Net assets Deposits *2 Investment （under representative merchant service） *3 Net assets Other MSB-related Other Others MSB-related *1 45,
Slide 29: Major KPIs (Quarterly)
4.2 Major KPIs (Quarterly) Annual transaction value reaches ¥3.6 trillion Operating stores: 102,484; Transaction: ¥870 billion (value), 369 million (volume) 8,500（billion yen） （Reference）Transaction value（past 12 months ）¥3.33 trillion （million TRX） （stores） Including GMO Financial Gate ¥3.59 trilli
Slide 30: 5. Reference materials
5. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 30
Slide 31: Cost of revenue ratio/SG&A ratio (Quarterly)
5.1 Cost of revenue ratio/SG&A ratio (Quarterly) Cost of revenue ratio changed due to sales mix change *Figures with asterisk do not take into account outsourcing expense Not included in SG&A under IFRS from Q1/18 （Million yen） J-GAAP IFRS 7,295 *50.2％ *44.5％ *47.2％ 7,000 52.7% 50.3% 50.4% 6,563 *41
Slide 32: Consolidated cash flows
5.2.1 Consolidated cash flows Positive cash flow due to profit growth and increase of deposits received, procuring resources for future growth (million yen) 20,000 J-GAAP ■Cash flow changes in FY2018 IFRS 18,000 OCF： ＋4,701 million Pre-tax profit +6,700 million 16,000 Changes in operating and other
Slide 33: Consolidated cash flows (in real term)
* 5.2.2 Consolidated cash flows（in real term） Substantial free cash flow has turned positive, procuring resources for future growth ■Cash flow changes in FY2018 (million yen) 20,000 J-GAAP IFRS OCF： ＋4,701 million Pre-tax profit +6,700 million 18,000 Changes in operating 16,000 and other receivables
Slide 34: Thank you very much!
Thank you very much! GMO Payment Gateway Inc. (TSE:3769) URL https://corp.gmo-pg.com/en For more information, please contact the Corporate Value Creation Strategy Division Investor relations office TEL:+81-3-3464-0182