Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q1 FY2024 Earnings Presentation

44 slides from Gmo Payment Gateway's earnings presentation, Feb 14, 2024

  1. Slide 1: Financial Results Briefing for Q1 FY2024

    Financial Results Briefing for Q1 FY2024 Progressing ahead of initial guidance; pursuing initiatives to strengthen business foundation February 14, 2024 76th Investor Meeting

  2. Slide 2: Safe Harbor Statement for Forward Looking Statements

    Safe Harbor Statement for Forward Looking Statements The contents of this document is based on generally recognized economic and social conditions, as well as certain assumptions judged to reasonable by GMO Payment Gateway as of February 14, 2024. Please note that the contents are subject to change

  3. Slide 3: Agenda

    Agenda 1. Summary of Financial Results for Q1 FY2024 2. Growth Strategy and Initiatives in Focus Areas 3. Sustainability 4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: 1. Summary of Financial Results for Q1 FY2024

    1. Summary of Financial Results for Q1 FY2024 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: 1.1 Summary of Consolidated Results

    1.1 Summary of Consolidated Results Both revenue and OP outperformed Q1 plans FY2024 Progress ratio to （¥ mil） Q1 FY2023 Q1 FY2024 % YoY Guidance FY2024 guidance Revenue 14,813 17,785 +20.1% 73,286 24.3% Gross Profit 9,791 11,547 +17.9% － － Operating Profit 5,090 5,830 +14.5% 25,000 23.3% Pre-tax Pr

  6. Slide 6: 1.2.1 Waterfall Chart of Consol. Revenue

    1.2.1 Waterfall Chart of Consol. Revenue Strong offline and Payment After Delivery; online payment also trending above plans GMO-EP （% YoY） （¥ bn） GMO-FG Consol.*1*2 GMO-PG*3 GMO-PS*3 Consol.*1*3 Consol. 1Q Plan +34.1% +11.6% +15.6% +5.1% +17.1% 1Q Actual +37.6% +13.1% +20.0% +9.4% +20.1% 18 ¥17.7 b

  7. Slide 7: 1.2.2 Waterfall Chart for Consol. OP and Pre-tax Profit

    1.2.2 Waterfall Chart for Consol. OP and Pre-tax Profit OP inline with plans after 7 offsetting gross profit increase with additional personnel costs OP Waterfall Chart Pre-tax Profit Waterfall Chart （¥ mil） （¥ mil） Up +14.5% YoY Up +26.3% YoY Equity GP SGA Financial method increase increase expense

  8. Slide 8: 1.3 Waterfall Chart of Consol. TRX Value

    1.3 Waterfall Chart of Consol. TRX Value Online payment grew only 11.2% due to impact of electricity rate reductions, etc. Offline Online payment GMO-PG +11.2% Consol. +23.7% payment Market*1 +10.5% （% YoY） Non-merchandise EC Merchandise EC （¥ trn） GMO-PG +57.4% +12.4% +10.0% Market*1 +11.2% +13.4%

  9. Slide 9: 1.4.1 GMO-PG Non-consolidated Performance

    1.4.1 GMO-PG Non-consolidated Performance Achieved Q1 plans, but last year’s high base caused revenue to grow by only 13.1% YoY GMO-PG Non-consolidated Revenue & OP *1 （¥ mil） Merchandise EC revenue % YoY Non-merchandise EC revenue Revenue Q1 FY2023 Q1 FY2024 9,000 BaaS Support revenue 2-yr CAGR 百万

  10. Slide 10: 1.4.2 Performance of GMO-EP, GMO-PS and GMO-FG

    1.4.2 Performance of GMO-EP, GMO-PS and GMO-FG EP earnings showing signs of improvement; PS’s improving profitability and FG’s continuing high growth Consol. GMO-EP*1*2 GMO-PS*2 Consol. GMO-FG*1*3 (% YoY） 23/1Q 24/1Q 23/1Q 24/1Q 23/1Q 24/1Q Revenue +1.2% +9.4% Revenue +22.3% +20.0% Revenue +52.6% +3

  11. Slide 11: 1.4.3 Trend of Incremental Revenue Amount by Service

    1.4.3 Trend of Incremental Revenue Amount by Service Consolidated performance offsets the volatility of online payment caused by large-size projects 3,500 Incremental revenue increase/decrease by service* (Q1 of each FY) （¥ mil） Online Payment etc.（GMO-PG/EP Consol.） Payment After Delivery（GMO-PS） 3

  12. Slide 12: 1.5 Revenue by Business Model

    1.5 Revenue by Business Model Improving fee and spread revenues from large-size projects % YoY Factors* (¥ mil) Q1 FY2023 Q1 FY2024 17,785 Spread +12.8% +15.4% ＋ Overseas lending ＋ Offline payment 14,813 15,000 － Online payment (PG) 6,988 － Payment After Delivery － Online payment (EP) 6,057 10,000 F

  13. Slide 13: 1.6 Segment Results

    1.6 Segment Results MSB segment OP increased by 30.1% from controlling credit costs, etc. Segment Revenue Segment Profit % YoY % YoY (¥ mil) (¥ mil) Q1 FY2023 Q1 FY2024 Q1 FY2023 Q1 FY2024 7,000 5,830 17,785 +24.9% +20.1% +23.7% +14.5% 5,090 800 6,000 92 14,813 324 +9.1% +31.6% 41 -19.7% +124.3% 4,0

  14. Slide 14: 2. 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: 2.1 FY2024's Position and the Midterm Management Target

    2.1 FY2024’s Position and the Midterm Management Target Strengthening business foundation to return to cruising speed growth rates Operating Profit Targets and Actual*1*2 （¥ bn） Strengthen business 80 Operating profit (actual) 営業利益（実績） 営業利益目標イメージ foundation Image of OP target 最低20%ライン 70 ・Monetize l

  16. Slide 16: 2.2 Initiatives to Strengthen Business Foundation

    2.2 Initiatives to Strengthen Business Foundation Progressing inline with plans on new initiatives that contribute to revenue expansion next FY and beyond PG’s online payment service revenue trend by year of service start (FY2011 onwards)* and progress on major initiatives during Q1 FY2024 Adding ne

  17. Slide 17: 2.3 Initiatives to Enlarge Project Size

    2.3 Initiatives to Enlarge Project Size Further driving the large customer strategy to scale up project size GMO-PG revenues of top-30 customer group (Q1 FY2024 vs. Q1 FY2022) （¥ mil） 400 22/1Q 顧客別売上 Revenue by customer group in Q1 FY2022 24/1Q 顧客別売上 Revenue by customer group in Q1 FY2024 350 300 25

  18. Slide 18: 2.4.1 GMO-PG Non-consolidated: Broader EC

    2.4.1 GMO-PG Non-consolidated: Broader EC Further strengthen industry-specific PFs to re-expand non- merchandise EC PG’s online payment: merchandise & non-merchandise EC revenues (quarterly trend) Basic strategy to re-expand non-merchandise EC revenues （¥ mil） ・Deepen industry penetration and expand

  19. Slide 19: 2.4.2 GMO-PG Non-consolidated: BaaS/Embedded Finance

    2.4.2 GMO-PG Non-consolidated：BaaS/Embedded Finance Start of revenue contribution of large-scale project from Q1; revenue contribution from multiple projects planned to start from Q2 BaaS support service revenue*（Q1 of each FY） Progress on Processing PF projects ■ Ginko Pay Scheduled to start multip

  20. Slide 20: 2.4.3 Instant Salary byGMO (Salary Prepayment Service)

    2.4.3 GMO-PG Non-consolidated：Instant Salary byGMO (Salary Prepayment Service) Entering the vast B2E domain: high growth continues on the back of heightened need to strengthen corporate recruitment Product/Value proposition Growth strategy ・Enables salary for the work completed to be paid instantly

  21. Slide 21: 2.5.1 GMO-EP Non-consolidated: Broader EC (SME domain)

    2.5.1 GMO-EP Non-consolidated：Broader EC (SME domain) Revenue growth rate is improving as initiatives start to bear fruit Consol. GMO-EP revenue (quarterly trend) Major initiatives that contributed to raise Q1 revenue （¥ mil） % YoY Driven by growth-oriented entertainment related merchant Revenue GMV

  22. Slide 22: 2.5.2 GMO-MR (Medical Reservation SaaS)

    2.5.2 GMO-EP Non-consolidated：GMO-MR (Medical Reservation SaaS) Sustaining high growth by capturing DX needs at medical institutions; expanding business scope beyond reservation Product/Value proposition Growth strategy A reservation system for medical institutions ・Expand target domains that provid

  23. Slide 23: 2.6.1 GMO-PS: FinTech

    2.6.1 GMO-PS：FinTech Profit margin improved from controlling credit cost; revenue growth by continuous acquisition of new customers GMO-PS revenue and operating profit Revenue from new and existing merchants （¥ mil） % YoY atokara launch Other revenue (left axis) ＋20.0%Other ■ New merchants (acquired

  24. Slide 24: 2.6.2 GMO-PS: Launch of new BNPL service atokara

    2.6.2 GMO-PS：Launch of new BNPL service “atokara” Reaching No. 1 position through collaboration with Sumitomo Mitsui Card Company Expanding service domains of atokara (size of addressable markets)* Significance of new business ・Data storage over 10 years/Business creation with partner companies leve

  25. Slide 25: 2.7 GMO-FG: Offline Payment

    2.7 GMO-FG：Offline Payment Building up large-project pipeline by pursuing vertical strategy Consol. GMO-FG revenue by business model (Quarterly)*1 Acceleration of vertical strategy deployment （¥ mil） （K units） Accelerate acquisition of large corporate groups by providing diverse % YoY 3,500 Driven b

  26. Slide 26: 2.8.1 Global: Earnings Summary

    2.8.1 Global：Earnings Summary Expanding loan book: both revenue and profit grew by more than 50% Revenue/Operating profit Loan balance (end-Dec) Progress on loan balance increase % YoY % YoY Conducted two additional loans （¥ mil） （¥ mil） +59.7% after the 8～9 month monitoring +51.9% 16,000 period of

  27. Slide 27: 2.8.2 Global: Investment Strategy

    2.8.2 Global：Investment Strategy Executed an investment to North American promising category creator company Card issuing Lending Tech market market ¥40 trn*1 ¥40 trn*2 (2021) (2022) Direct bill payment market ¥500 trn*3 KYC Tech market ¥0.2 trn*2 HR Tech market (2026) ¥0.3 trn (2022) New equity inv

  28. Slide 28: 3. Sustainability

    3. Sustainability Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 28

  29. Slide 29: 3.1 Sustainability: Environment

    3.1 Sustainability：Environment Realized carbon neutrality; achieved effectively zero emission for Scope 1+2 *1 Scope1+2(owned or controlled Scope3（all indirect emissions in the operations; indirect emissions from value chain, excl. Scope 2） purchased energy) Established emission reduction targets Ac

  30. Slide 30: 3.2 Sustainability: Integrated Report

    3.2 Sustainability: Integrated Report Published Integrated Report with expanded disclosure of non- financial information FY2023 Integrated Report (Japanese language): https://www.gmo-pg.com/corp/newsroom/pdf/20240213_gmo_pg_ir_integrated_report.pdf * English language version of Integrated Report is

  31. Slide 31: 4. Financial Highlights and Reference Materials

    4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 31

  32. Slide 32: 4.1.1 Consolidated Balance Sheet Changes

    4.1.1 Consolidated Balance Sheet Changes Increase in merchant deposits and MSB related assets due to scaling up of business Assets Liabilities and Equity (¥ mil) (¥ mil) 350,000 350,000 326,029 326,029 300,000 292,346 300,000 292,346 273,407 273,407 118,265 250,000 155,592 250,000 91,071 133,658 85,

  33. Slide 33: 4.1.2 Major Consolidated Financial Indicators (Annual Trend)

    4.1.2 Major Consolidated Financial Indicators (Annual Trend) Managing business while balancing profitability, capital efficiency and capital base J-GAAP IFRS Third party allotment Issued Euro Yen Euro Yen CB Due 2026 Raised ¥8.0bn CB Due 2023 Raised ¥21.1 bn （¥ bn） 45% Raised ¥17.5 bn 300 Euro Yen C

  34. Slide 34: 4.2 Consolidated Revenue and Operating Profit (Quarterly)

    4.2 Consolidated Revenue and Operating Profit (Quarterly) Consol. revenue Consol. operating profit （¥ mil） （¥ mil） 20,000 7,000 6,000 15,000 5,000 4,000 10,000 3,000 2,000 5,000 1,000 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2021 9,767 10,121 10,646 11,132 FY2021 3,122 3,470 3,629 2,764 FY2022 11,857 12,201 12

  35. Slide 35: 4.3 Consolidated Revenue by Business Model (Quarterly)

    4.3 Consolidated Revenue by Business Model (Quarterly) （¥ mil） 6,988 7,000 6,265 6,057 6,025 6,171 6,000 5,371 5,415 5,296 5,297 5,093 5,000 4,808 4,773 4,665 4,707 4,731 4,414 4,430 4,290 4,257 4,311 4,000 3,840 3,672 3,536 2,408 3,395 3,278 3,015 3,149 2,984 2,288 2,922 2,719 3,000 2,487 2,713 2,6

  36. Slide 36: 4.4.1 FinTech Related Asset

    4.4.1 FinTech Related Asset FinTech related asset (quarterly) （¥ mil） 120,000 100,000 % YoY +11.8% 80,000 60,000 +7.3% 40,000 20,000 +56.1% 0 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY20

  37. Slide 37: 4.4.2 FinTech Revenue and Profit (Quarterly)

    4.4.2 FinTech Revenue and Profit (Quarterly) FinTech segment revenue and profit （¥ mil） 4,000 % YoY 3,500 ＋6.3% 3,000 2,500 2,000 ＋18.9% 1,500 1,000 ＋46.6% 500 ＋5.3% ＋47.0% 0 Q2 FY2020 Q3 FY2020 Q4 FY2020 Q1 FY2021 Q2 FY2021 Q3 FY2021 Q4 FY2021 Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 Q1 FY2023 Q2 FY

  38. Slide 38: 4.5.1 Consolidated CoS and SG&A Ratio (Quarterly)

    4.5.1 Consolidated CoS and SG&A Ratio (Quarterly) Cost of sales ratio fluctuates depending on revenue mix (¥ mil) * 17,785 18,000 16,546 16,118 50.0% 16,000 15,641 14,813 42.7% 40.9% 14,000 39.6% 13,341 37.5% 38.5% 40.0% 12,897 37.2% 37.0% 36.7% 36.8% 33.8% 11,857 12,201 34.8% 34.7% 33.9% 12,000 10,

  39. Slide 39: 4.5.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly)

    4.5.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly) CoS ratio trending stably for online payment business (¥ mil) 10,158 10,000 50.0% 9,564 9,219 9,177 9,083 41.6% 8,498 41.2% 39.7% 7,977 40.7% 8,000 7,682 7,906 40.0% 6,858 36.6% 32.5% 6,878 34.1% 6,709 7,122 34.2% 6,370 6,110 33.3% 31.6% 32.5% 32.9%

  40. Slide 40: 4.6.1 Operating Stores, TRX Volume and Value

    4.6.1 Operating Stores, TRX Volume and Value Consol. TRX value reaches approx. ¥15.8 trn in the past 12 months Operating TRX Volume*2*3 TRX Value*2 Stores*1/Terminals*2 End-Q1 FY2024 Q1 FY2024 Past 12-mnth Q1 FY2024 Past 12-mnth - 1.76 bn 6.51 bn ¥4.4 trn ¥15.8 trn Consolidated % YoY - +20.9% +25.2%

  41. Slide 41: 4.6.2 Distribution of major sectors (Q1 Standalone)

    4.6.2 Distribution of major sectors (Q1 Standalone) Balance both stability and growth through sector diversification Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis)* (Based on actual figures for Q1 FY2024) Revenue The size of the circle represents the TRX value propo

  42. Slide 42: 4.7.1 Consolidated Cash Flow Statement (Cumulative)

    4.7.1 Consolidated Cash Flow Statement (Cumulative) （¥ mil） 50,000 Q1 FY2024 (¥ mil) Operating CF ： +22,314 Pretax profit +5,919 40,000 Deprec. & Amort. +763 Trade receivables -3,876 Advances paid -2,681 Accrued revenues -8,666 30,000 Accrued expenses +9,458 Deposits received +28,377 Income taxes pa

  43. Slide 43: 4.7.2 Changes in consolidated cash flow statement

    4.7.2 Changes in consolidated cash flow statement Related liabilities & assets Impact from business expansion Payment Processing Business Sales proceeds of Deposits received Liability Operating CF merchants under the (liability) Yearly fluctuations can be large as annual TRX value of Representative

  44. Slide 44: Thank You Very Much

    Thank You Very Much GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange Prime) For inquiries or requests for 1-on-1 interviews, please contact the IR Department, Corporate Value Creation Strategy Division, at the telephone number below: TEL ： +81-3-3464-0182 E-mail ： ir-contact@gmo-pg.com IR Websi

GMO Payment Gateway — Q1 FY2024 Earnings Presentation on 6ix