Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q2 FY2014 Earnings Presentation

28 slides from Gmo Payment Gateway's earnings presentation, May 2, 2014

  1. Slide 1: Financial results briefing for the 2Q of FY2014

    Financial results briefing for the 2Q of FY2014 （ O c t o b e r 1 , 2 0 1 3 - M a r c h 3 1 , 2 0 1 4 ） Themes： Our activities that create new markets, and a c c e l e ra t i n g t h e i m p r ove m e n t o f Ja p a n’s E C ra ti o . May 2, 2014 GMO Payment Gateway, Inc. (3769: Tokyo Stock Exchange

  2. Slide 2: A Cautionary Note About the Contents of this Document

    A Cautionary Note About the Contents of this Document The contents of this document are based on generally recognized economic and social conditions, as well as premises judged to be reasonable by GMO Payment Gateway as of May 2nd, 2014. However, please note that they are subject to change without p

  3. Slide 3: Agenda

    Agenda 1. Growth strategy 2. Financial highlights 3. Results forecast for the term ending September 2014 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: 1. Growth strategy

    1. Growth strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Recent circumstances

    1.1 Recent circumstances  Recent business ・Misunderstanding of concentration of major environment electronic shopping malls ・Diversified fee structures for payment service ・Changes in competitive situation in both face-to- face field and small business (long-tail) market  Progress of growth ・Acqui

  6. Slide 6: Two major changes in our business environment

    1.2 Two major changes in our business environment Improvement of Japan’s BtoC - EC ratio, and widespread use of credit card payments between businesses (BtoB) Non face-to-face field Face-to-face field Narrow sense EC market 9.5 Trillion yen ① EC ratio 3％ → 30％ BtoC market （About 300trillion yen） Ser

  7. Slide 7: Product strategy of GMO-PG group

    1.3 Product strategy of GMO-PG group Provide a payment platform and various solutions for our merchants to increase merchants’ revenue Small staff・ Advanced operation Problem resolution level Can easily automate High Strengthen support to increase merchants’ GMO Payment Service revenues Strengthen s

  8. Slide 8: Expansion of the narrow sense EC market

    1.4 Expansion of the narrow sense EC market Cultivation of non-supported area for internet sales and credit card payments is underway Internet sales・Credit card payment：General Internet sales・Credit card payment：Popular Internet sales・credit card payment：non-supported Major manufacturer Major distri

  9. Slide 9: The rise of Micro-commerce (Small BtoC, CtoC)

    1.5 The rise of “Micro-commerce” (Small BtoC, CtoC) Strategy to capture the EC market which has been expanding to the individual field Speed/Easiness interpersonal transaction services on Flea a network like a flea market market type the service of selling Skill one’s knowledge/skills selling Instan

  10. Slide 10: O2O strategy: Scenario of changing face-to-face market to E-commerce

    1.6 O2O strategy：Scenario of changing face-to-face market to E-commerce Change face-to-face market to be able to pay by smartphone Non face-to-face field Face-to-face field O2O Market Various approaches by various industries Various approaches by various industries and companies and companies GMO-PG

  11. Slide 11: Strategic services GMO Pallet

    1.7 Strategic services “GMO Pallet” Smartphone payment without credit card 1：Customer payment by smartphone ①Customer：checks into ②Shop：input s amount ③Customer：confirms ④Customer：receives shop amount, input s password receipt (transaction completed) 2：Customer payment by shop’s mobile terminal (sma

  12. Slide 12: Widespread use of credit card payments between businesses (BtoB)

    1.8 Widespread use of credit card payments between businesses (BtoB) Support credit card payment processing of untapped mega market Non face-to-face field (EC) Face-to-face field BtoC market About 9.5 trillion About 290 （about 300 yen trillion yen） trillion yen About 170 About 830 trillion yen trill

  13. Slide 13: Movement of share price

    1.9 Movement of share price Implement strategy to grow profits by more than 20% (Share price index） (1,000yen） 1.4 2,500,000 ※％, ordinary income growth +20.1％ 23.0% 1.2 20.9% +16.1％ 2,000,000 Index (Closing price of Aprlil 2005=1) 19.3% 1.0 17.1% +23.3％ 16.1% 16.9% 15.5% +24.7％ 14.3% 0.8 1,500,000 +

  14. Slide 14: Forecasts

    1.10 Forecasts Achieve growth for over 10 billion yen in ordinary income by creating new markets and improving Japan’s EC ratio 2014 Around 2020 20XX EC ratio 3% 10% 30％ （Growth potential） EC market scale ¥10 Trillion Around ¥25 Trillion 2.5times × Market share (GMO-PG Group) 13％ 20％ 1.5times Amount

  15. Slide 15: 2. Financial highlights

    2. Financial highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 15

  16. Slide 16: Summary of Consolidated Results

    2.1 Summary of Consolidated Results Despite increase in cost of sales, gross income achieved 24.0% growth Compared to the accumulated Compared to the accumulated FY2014 (ending September 2014) results for 2Q FY2013 forecast for 2Q FY2014 （Million yen） 2Q 1Q 2Q Results % Change 2Q Forecast Progress a

  17. Slide 17: Summary of Consolidated Balance Sheets

    2.2 Summary of Consolidated Balance Sheets No major changes Results for Results for Results for Results for （Million yen） 2Q, FY2014 2Q, FY2013 Change （Million yen） 2Q, FY2014 2Q, FY2013 Change Current assets 21,464 15,700 5,763 Current liabilities 17,223 11,842 5,381 Cash and deposits 19,544 14,376

  18. Slide 18: Cost of sales ratio/SG&A ratio (Quarterly changes)

    2.3 Cost of sales ratio/SG&A ratio（Quarterly changes） Cost of sales ratio deteriorated due to increase in the sales of value-added services that exceeded initial plan （1,000yen） Sales of special 2,000,000 system development 70.0% 40 million yen 1,842,793 1,800,000 1,645,144 60.0% 58.5% 1,563,063 1,6

  19. Slide 19: Sales/Ordinary income (Quarterly changes)

    2.4 Sales/Ordinary income (Quarterly changes) Sales up +29.8％ YOY due to the special system development ■Sales Compared to last 1Q ■ Ordinary income +29.8％ ※Sales excluding extraordinary Compared to last 1Q ※Ordinary income excluding special (thousand yen) income up 27.0% YOY （thousand yen） +18.6％ f

  20. Slide 20: Sales results for each segment (Quarterly changes)

    2.5 Sales results for each segment（Quarterly changes） Overall segment sales increased over 20% （1,000yen） YOY 700,000 670,573 （1Q） （2Q） Initial revenue +37.0％ +55.8％ 600,000 Monthly revenue +27.9％ +29.0％ 582,291 568,811 Transaction processing revenue +20.6％ +25.9％ Merchant acquiring service revenue

  21. Slide 21: Sales results for each segment

    2.7 Sales results for each segment Balanced growth in all segments YOY +55.8% +29.0% +25.9% +27.4% New service New service New service Online “GMO Payment after Early payment delivery” service & service advertising Delivery service 1％ New service 7％ service 25％ Payment system development & SSL Payme

  22. Slide 22: Transition of major factors (Quarterly changes)

    2.8 Transition of major factors (Quarterly changes) Number of operating stores increased as planned, and number of processed payments grew immensely Number of operating stores 47,056/Amount of processed payments ¥350 billion/ Number of processed payments 158million Number of Number of processed Amou

  23. Slide 23: Progress of concentrating new business

    2.8 Progress of concentrating new business GMO-PG group’s new business and status of profits ■Online advertising service（GMO-PG） Sales Expanding support 11/9 12/3 12/6 12/9 13/3 13/6 13/9 14/3 11/12 12/12 13/12 ■GMO-PS Amount of processed payments Cultivating several major manufacturers Started in M

  24. Slide 24: 3. Results forecast for the term ending September 2014

    3. Results forecast for the term ending September 2014 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 24

  25. Slide 25: Summary of Consolidated Results (Forecast)

    3.1 Summary of Consolidated Results (Forecast) Investment continues though ordinary profit growth rate returns to 20% （1,000yen） 7,000,000 6,934,000 40% 35.5% By continuing prior 37.5% 34.3% 36.4% 36.5% 37.0% 35.5% investment and 6,000,000 32.8% 33.2% 5,764,085 sales mix (Sale of value- ¥28.50 30% a

  26. Slide 26: Sales for Each Segment (Forecast)

    3.2 Sales for Each Segment (Forecast) Planning for merchant acquiring service revenue to be +25% and transaction processing revenue to be +23％ 7,000,000 （1,000yen） ※％ yoy Because of expansion of listed on 6,000,000 the TSE the ECmarket, we forecast that merchant acquiring service revenue is going +

  27. Slide 27: Cost of sales ratio and SG&A ratio (Forecast)

    3.3 Cost of sales ratio and SG&A ratio (Forecast) Find balance between cost of sales ratio and SG&A ratio (1,000yen） SG&A 6,934,000 7,000,000 60% • Employment of highly talented personnel • Continuing efforts to reduce cost 6,000,000 52.0% 50.8% 50.6% 49.0% 49.0% 5,764,085 • Establishing new 47.7% 4

  28. Slide 28: Thank you very much!

    Thank you very much! GMO Payment Gateway Inc. (TSE:3769) URL http://corp.gmo-pg.com/ For more information, please contact the Company Value Creation Planning Office IR/PR Group TEL:03-3464-0182 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 28

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