Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q1 FY2023 Earnings Presentation

42 slides from Gmo Payment Gateway's earnings presentation, Feb 14, 2023

  1. Slide 1: Financial Results Briefing for Q1 FY2023

    Financial Results Briefing for Q1 FY2023 Deploying the strategy that incorporates medium-to-long term changes in business environment February 14, 2023 72 th Investor Meeting Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

  2. Slide 2: Agenda

    Agenda 1. Summary of Financial Results for Q1 FY2023 2. Growth Strategy and Initiatives in Focus Areas 3. Sustainability 4. Financial Highlights and Reference Materials Following abbreviations are used in this material. GMO-PG: GMO Payment Gateway; GMO-EP: GMO Epsilon; GMO-MR: GMO Medical Reservatio

  3. Slide 3: Safe Harbor Statement

    Safe Harbor Statement 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 February 14, 2023. Please note that the contents are subject to change without prior notice in the event o

  4. Slide 4: Summary of Financial Results for Q1 FY2023

    1. Summary of Financial Results for Q1 FY2023 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Earnings Summary (Consolidated)

    1.1 Earnings Summary (Consolidated) Revenue grew 24.9%, achieving 52.0% of 1H guidance, but we maintain a cautious guidance IFRS FY2023 1H Achievement % Q1 FY2022 Q1 FY2023 % YoY （¥ Mil） Guidance of 1H Guidance Revenue 11,857 14,813 ＋24.9％ 28,491 52.0% Gross Profit 8,173 9,791 ＋19.8％ － － Operating 4

  6. Slide 6: OP and Pre-tax Profit Waterfall Chart

    1.2 OP and Pre-tax Profit Waterfall Chart OP grew 23.7% from increased revenue, forex losses recorded but risk to full year guidance removed OP YoY: waterfall chart （¥ Mil） Pre-tax profit YoY: waterfall chart （¥ Mil） （+23.7% YoY） （+9.0% YoY） GP SGA increase increase Other Other Financial Financial E

  7. Slide 7: Market Stats and GMO-PG's TRX Value

    1.3 Market Stats and GMO-PG’s TRX Value Despite tough market conditions, above-market growth ※1 achieved from the increase in offline and large EC merchants Offline TRX Value (GMO-FG Consol.)※2 Non-merchandise EC (GMO-PG) Merchandise EC (GMO-PG/PS/EP） Company ＋76.0% Company +34.3% Company +8.9% Mark

  8. Slide 8: Waterfall Chart of Consol. Revenue

    1.4 Waterfall Chart of Consol. Revenue Growth of 24.9% from expanding offline domains, growth of non- merchandise and recovery of large merchandise merchant and BNPL Consol. （％ YoY) Consol. GMO-FG GMO-PG GMO-PS GMO-EP Consolidated （¥ bn） ＋52.7％ ＋22.1％ ＋22.3％ ＋1.2％ ＋24.9％ SME 15 Other ¥14.8bn domain

  9. Slide 9: GMO-PG Non-consolidated Performance

    1.5 GMO-PG Non-consolidated Performance Online payment up 20.1% from continued non-merchandise EC and recovery of merchandise EC GMO-PG Non-consolidated Revenue and OP ※1 % YoY ※2 （¥ Mil） 22/1Q 23/1Q 8,000 5,000 Revenue ＋16.5％ ＋22.1％ Revenue at certain merchant (left axis) 百万 百万 Merchandise EC reven

  10. Slide 10: Performance of GMO-EP, GMO-PS and GMO-FG

    1.6 Performance of GMO-EP, GMO-PS and GMO-FG ※1 GMO-FG trending strongly; GMO-PS impacted by rate revision; GMO-EP strengthening new initiatives Consol. GMO-EP GMO-PS Consol. GMO-FG Revenue (% YoY) ＋1.2％ Revenue (% YoY) ＋22.3％ Revenue (% YoY) ＋52.7％ Revenue (left axis) Revenue (left axis) Revenue (l

  11. Slide 11: Revenue by Business Model

    1.7 Revenue by Business Model Fee revenue up 35.2% from increased transactions and acquisition of large merchant % YoY 22/1Q 23/1Q （¥ Mil） 16,000 Spread ＋11.7％ ＋12.8％ 14,813 ＋ Online payment (PG) 14,000 － Online payment (EP) － GMO Payment After Delivery 12,000 11,857 6,057 Fee ＋23.1％ ＋35.2％ 10,000 ＋

  12. Slide 12: Segment Results

    1.8 Segment Results All segments post revenue increased but MSB segment profits decline from higher credit costs, etc. Segment Revenue Consol. ＋24.9％ YoY Segment Profit ＋23.7％ YoY（after consol. adjustments) （¥ Mil） （¥ Mil） 16,000 % YoY % YoY 14,813 6,000 41 －19.7% 246 ＋9.1％ 14,000 ＋ GMO-MR － Online

  13. Slide 13: Current Market Conditions

    1.9 Current Market Conditions Q1 in-line with expectations thanks to initiatives, but business environment remains uncertain EC Market and GMO-PG’s Revenue Growth (Quarterly Trend) 35% Consol. Revenue GMO-PG+GMO-EP revenue EC Market 30% 25% 24.9% Inflation Reversal of monetary policy 20% 18.2% Volat

  14. Slide 14: Growth Strategy and Initiatives in Focus Areas

    2. Growth Strategy and Initiatives in Focus Areas Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 14

  15. Slide 15: Business Opportunity and Medium-to-Long term Changes in Business Environment

    2.1 Business Opportunity and Medium-to-Long term Changes in Business Environment Turning society’s needs into business opportunities through the payment-related businesses Social Challenges Social Trends Business Opportunity for GMO-PG Biometric Aging population CRM authentication Payment related bu

  16. Slide 16: Management Targets

    2.2 Management Targets Current OP growth and growth strategy to 2025 in the five focus areas OP and OP Target in Five Focus Areas※1,2 （¥ Mil） Target Growth investment and strengthening 300 Broader EC 25% growth curve BaaS management for post-2025 growth Offline Payment 250～ 250 FinTech Growth rates

  17. Slide 17: Trend and Target for Revenue Mix by Merchant Size

    2.3 Trend and Target for Revenue Mix by Merchant Size Making progress towards 40% revenue share of large merchants from merchant acquisitions and growth GMO-PG: Revenue Mix by Merchant Size Annual sales at merchants ■ Large Over ¥100.1 bn Target ■ Middle From ¥1.0～¥100.0 bn revenue mix ■ Long-tail U

  18. Slide 18: Broader EC: Growth driven by top merchants with a 50% revenue share

    2.4.1 Broader EC: Broader EC 2025 OP Target Revenue Growth Driven by Growth of Large Merchants ¥18.0～¥22.0 bn Growth driven by top merchants with a 50% revenue share ※1 Revenue of merchandise/non- merchandise EC (quarterly trend) % YoY Q1 Revenue growth rate of top merchants Online payment （¥ Mil） ■

  19. Slide 19: Broader EC: GMO-EP's Current Condition

    2.4.2 Broader EC: GMO-EP’s Current Condition Continue to tackle issues despite above-market GMV growth GMV Index ※1 Operating stores and GMV per store ※2 % YoY GMO-EP 稼動店舗数（左軸） Operating stores % YoY 110 ＋9.0% 140 ,0 00 700 ,0 00 Market stats (merchandise) 市場統計（物販） 1加盟店当たりGMV（右軸） GMV per stores ＋6.5

  20. Slide 20: BaaS: Current and Progress of Initiatives

    2.5 BaaS: Current and Progress of Initiatives BaaS 2025 OP Target （Embedded Finance） ¥1.0 bn～ Progress on large project to accelerate growth from next FY ※ Ginko Pay & Processing PF Revenue (Quarterly Trend) Key Initiatives and Progress Processing Platform Preparation towards large-scale credit card

  21. Slide 21: Offline payment: GMO-FG's Current Condition

    2.6 Offline payment: Offline GMO-FG’s Current Condition 2025 OP Target ¥2.0 bn～ ※1 Expanding growth opportunities from addressing large customers and recover of offline events and inbound tourists GMO-FG/CAS Revenue by Business Model Recovery of Inbound Consumption ※2 (Quarterly Trend) （10,000 perso

  22. Slide 22: FinTech: Revenue increase of 21% but profit decline due to higher credit costs

    FinTech 2025 OP Target 2.7 FinTech: ¥3.0 bn～ Reasons for Revenue Increase and Profit Decline and Response Measures Revenue increase of 21% but profit decline due to higher credit costs, etc. GMO Payment After Delivery FinTech Revenue and Profit/Loss Revenue Growth Rate % YoY （¥ Mil） Reasons for reve

  23. Slide 23: Global Investment Strategy

    2.8.1 Global Investment Strategy Global 2025 OP Target ¥3.0 bn～ Improve agility of investment strategy given changes in macro environment Global macro changes: slowing inflation (tapering of US monetary tightening), resumption of economic activity in China and elsewhere Easing of recessionary concer

  24. Slide 24: Area Strategy of Global Investment/Lending

    2.8.2 Area Strategy of Global Investment/Lending Approach cutting edge FinTech regions by leveraging expertise while exercising regional diversification Focus on India with sound FinTech industry expansion UPI usage※1,2 Internet users※3 2020 2022 2021 (act.) 2030（est.) ¥54 trn →¥200 trn 0.85bn → 1.3

  25. Slide 25: Global: Earnings Summary

    2.8.3 Global: Earnings Summary Pipeline expanding, continue to diversify country and sector risk Revenue & Operating Profit ※ Loan Balance (end-Dec) New loans （¥ Mil） （¥ Mil） 300 10,000 ＋23.2% % YoY ＋24.4% Loan executed to education sector US MSB US FinTech (Jan. 2023) 250 +2.9% 8,000 ＋4.3% • FinTec

  26. Slide 26: Sustainability

    3. Sustainability Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 26

  27. Slide 27: Integrated Report: Enhancing Disclosure of Non-financial Information

    3.1 Integrated Report: Enhancing Disclosure of Non- financial Information Expanding non-financial information which is the foundation of value creation as we advance sustainability management 29 th Integrated Report URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/20221219_gmo_pg_ir_integrated_report

  28. Slide 28: Initiatives to Reduce GHG Emissions

    3.2 Initiatives to Reduce GHG Emissions Reduced GHG emissions by 80% by implementing what is effectively renewable energy in FY2022 GHG Emissions (Scope 1+2) ※ Third Party Certification Scope2（Scope 1 is zero emissions) • Acquired third party certification from （t-CO2） SOCOTEC Certification Japan to

  29. Slide 29: Financial Highlights and Reference Materials

    4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 29

  30. Slide 30: Consolidated Balance Sheet Changes

    4.1.1 Consolidated Balance Sheet Changes Increase in deposits received and MSB related assets Assets Liabilities/Equity （¥ Mil） （¥ Mil） 297,562 297,562 300,000 300,000 273,407 273,407 250,000 250,000 111,366 215,455 215,455 85,562 130,191 113,967 200,000 200,000 78,251 35,252 32,684 104,523 - 150,00

  31. Slide 31: Major Consolidated Financial Indicators (Annual trend)

    4.1.2 Major Consolidated Financial Indicators (Annual trend) Strengthened equity base with the expansion of MSB （¥ bn） J-GAAP IFRS 45% 300 千ドル Third party allotment 40% Raised ¥8.0bn Euro Yen CB Due2026 Raised ¥21.1 bn 250 35% Euro Yen CB Due 2023 33.8% Issued Euro Yen Fully converted 32.3% 30% CB D

  32. Slide 32: Consolidated Revenue by Business Model (Quarterly Trend)

    4.2 Consolidated Revenue by Business Model (Quarterly Trend) （¥ Mil） 6,057 6,000 5,415 5,500 5,371 5,296 5,297 5,000 4,808 4,731 4,665 4,707 4,414 4,500 4,290 4,257 4,000 3,840 3,646 3,672 3,450 3,500 3,289 3,364 3,395 3,149 3,278 3,135 3,000 2,815 2,922 2,671 2,713 2,669 2,237 2,532 2,527 2,559 2,0

  33. Slide 33: FinTech: Assets & Profit Growth

    4.3 FinTech: Assets & Profit Growth Profit decline from higher credit cost and change in sales mix MSB related assets (end-Dec) Segment revenue Segment profit （% YoY) （¥ Mil） （¥ Mil） （¥ Mil） −2.5％ 100,000 +22.2％ ＋20.1％ ＋21.0％ +18.2％ 600 3,000 +20.7％ 80,000 ＋17.9％ 2,500 400 60,000 2,000 1,500 +22.3%

  34. Slide 34: Consolidated CoS and SG&A Ratio (Quarterly Trend)

    4.4.1 Consolidated CoS and SG&A Ratio (Quarterly Trend) CoS ratio fluctuates with changes in revenue mix ※ (¥ Mil) 14,813 14,000 13,341 50.0% 12,897 12,201 12,000 42.7% 11,857 41.2% 40.9% 39.6% 11,132 10,646 40.0% 36.6% 36.7% 36.8% 10,121 37.5% 36.1% 35.5% 35.2% 10,000 9,767 34.8% 33.8% 34.6% 34.7%

  35. Slide 35: CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend)

    4.4.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend) Cost of sales ratio for online payment business trending stably (¥ Mil) 9,083 9,000 8,498 50.0% 45.2% 7,906 7,977 8,000 7,682 41.6% 7,122 6,858 6,878 40.7% 6,709 7,000 36.5% 40.0% 36.8% 6,370 41.2% 6,110 39.7% 6,000 33.1% 34.2% 33.3% 5,271 5,1

  36. Slide 36: Operating Stores, TRX Volume and Value (Quarterly Trend)

    4.5.1 Operating Stores, TRX Volume and Value (Quarterly Trend) Group-wide annual TRX value reaches approx. ¥12.2 trillion ※1 Operating stores 147,204 stores, consol. TRX volume approx. 1.46 bn, consol. TRX value approx. ¥3.6 trn ※2 （Stores） （100 mil （¥ trn） transactions） 160,000 14 2.6 (Reference 1)

  37. Slide 37: Waterfall Chart for Consol. TRX Value

    4.5.2 Waterfall Chart for Consol. TRX Value Achieved above-market growth rate from increase in offline ※1 and non-merchandise EC Online payment Company ＋23.2% Consol.＋34.2% （% YoY） Offline （¥100 Mil） payment Market ＋3.5% Non-merchandise EC Merchandise EC Company ＋76.0% +34.3% +8.9% ＋20.2 Market +15.

  38. Slide 38: Distribution of major sectors

    4.5.3 Distribution of major sectors Balance both stability and growth through sector diversification Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis) 30% （Actual data for Q1 FY2023) 25% The size of the circle represents the TRX value Revenue proportion Digital content

  39. Slide 39: Consolidated Cashflow Statement

    4.6.1 Consolidated Cashflow Statement Q1 FY2023 changes by item (¥ Mil) （¥ Mil） 55,000 J-GAAP IFRS Operating CF： ＋16,173 Pretax profit +4,687 50,000 Trade receivables 45,000 And other receivables −1,656 Advances paid −7,484 40,000 Accrued revenues －7,854 35,000 Accrued expenses ＋6,919 Deposits recei

  40. Slide 40: Changes in the Consolidated CF Statement

    4.6.2 Changes in the Consolidated CF Statement Following factors affect operating CF other than the pretax profit Related Liabilities & Assets Impact from business expansion Payment Processing Business Sales proceeds from Deposits received Liability Operating CF merchants under (liability) Yearly fl

  41. Slide 41: Value Proposition to Support Customer's Growth

    4.7 Value Proposition to Support Customer’s Growth Support growth of our customer’s facing irreversible changes by implementing digital payments Irreversible Changes and Use Cases Our Value Proposition Advances Progress in Major electric power Digital payment＋α decarbonization company Paperless migr

  42. Slide 42: Thank You Very Much

    あThank り が とYou う ごVery ざ い Much ました GMOペイメントゲートウェイ株式会社 GMO Payment Gateway, Inc. (3769; ( 東 証Tokyo プラ Stock イム Exchange 376 Prime) 9) IRサイトURL https://www.gmo-pg.com/corp/ URL： https://www.gmo-pg.com/en/corp/ お問合せ・個別取材のお申込みは、企業価値創造戦略 統括本部 For inquiries, please contact our IR team at the telephoneIR

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