Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — FY2020 Earnings Presentation

47 slides from Gmo Payment Gateway's earnings presentation, Nov 12, 2020

  1. Slide 1: Financial Results Briefing for FY2020

    Financial Results Briefing for FY2020 Achieve 25% sustainable growth by solidifying position as a platformer November 12, 2020 The 63 rd IR Meeting GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange First Section) https://www.gmo-pg.com/corp/ Copyright (C) 1995 GMO Payment Gateway, Inc. All Right

  2. Slide 2: 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 November 12, 2020. Please note that the contents are subject to change without prior notice in the event o

  3. Slide 3: Agenda

    Agenda 1. Milestone 2. Summary of Financial Results for FY2020 3. Guidance for FY2021 4. Key Initiatives and Growth Strategies 5. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: Milestone

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

  5. Slide 5: Progress towards 2025 target OP of ¥25bn

    1.1 Progress towards 2025 target OP of ¥25bn Since 2015 profits from new businesses have exceeded plans OP portfolio (breakdown) as of FY2015 (plan) FY2020 Actual OP portfolio ■ Online payment processing & peripheral services ■ Payment After Delivery（FinTech） ■ Domestic Transaction Lending etc. （Fin

  6. Slide 6: Background for change in FY2020 OP portfolio

    1.2 Background for change in FY2020 OP portfolio Acceleration of business expansion and optimizing earnings structure to the changes in business environment ■ Actual and Plan of FY2020 Operating Profit portfolio※1 Factors 2015 2020 (plan) 2020 Act. （as of 2015) ① Lower than expected growth of B2C EC

  7. Slide 7: OP portfolio plan for 2025

    1.3 OP portfolio plan for 2025 Achieve target by expanding the existing business and creating new services ※1 ■Operating Profit plan for 2025 2020 2025 ■ Online payment processing & peripheral services ■ Payment After Delivery ■ FinTech（Excl. Payment After Deliver) ※2 ■ Global ※2 ■ Offline Payment (

  8. Slide 8: Progress of FinTech Business

    1.4 Progress of FinTech Business Improve profitability by shifting assets to high-margin services and expanding these services ■ Trend of Money Service Business segment profit (operating profit) and ROA 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025E ROA Capital alliance with

  9. Slide 9: Our Track Record of Growth

    1.5 Our Track Record of Growth The product of management policy focused on sustainable growth Revenue Operating Profit EBITDA ※3 （Mil. Yen） （Mil. Yen） 40.0% 39,792 14,000 14,719 40,000 （Mil. Yen） ■MACROKIOSK Revenue ※1 ■ Operating Profit 12,985 14,000 ■ Revenue excl. MK +20.4％ ROE ※2 35.0% +24.3% 35

  10. Slide 10: Summary of Financial Results for FY2020

    2. Summary of Financial Results for FY2020 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 10

  11. Slide 11: Financial Results Summary (IFRS)

    2.1 Financial Results Summary（IFRS） Outperformed Guidance, increased dividends and reclassified MK as discontinued business from Q3 FY2019 FY2020 FY2020 % Achievement （Mil. Yen） vs. Guidance Year-on-Year Actual Guidance Actual Revenue 26,922 31,418 33,046 105.2% ＋22.7％ Operating Profit 9,562 10,376

  12. Slide 12: Operating Profit Growth

    2.2 Operating Profit Growth Previous year’s OP was uplifted due to IFRS standards; OP growth rate of 25% if compared to initial OP plan (%: YoY) ■ FY2020 Earnings and YoY (Mil. Yen) Revenue Initial Plan※1 Operating profit ※2 ＋14.0％ +25.1% ＋8.6％ ＋22.7％ MK Impact 10,388 32,121 and others 9,562 MK Impa

  13. Slide 13: Transaction volume and value

    2.3.1 Transaction volume and value Return to baseline growth trajectory next FY, after the temporary blip caused by COVID-19 ■ Trend forecast of online TRX volume and value (image) Baseline growth TRX Volume TRX Value TRX Volume Temporary growth acceleration due to growth of micropayments such as di

  14. Slide 14: Revenues and Operating Profit

    2.3.2 Revenues and Operating Profit Revenue growth rate accelerated each quarter as planned ■Quarterly trend of revenues (%: YoY) ■Quarterly trend of operating profit (%: YoY) Full Year +22.7％ Full Year＋8.6％ (Mil. Yen) (Mil. Yen) 10,000 3,500 2019/9 2019/9 2020/9 ＋31.0％ ＋20.3％ ＋29.5％ 2020/9 3,000 ＋2

  15. Slide 15: Summary: COVID-19 impact

    2.4 Summary Expect growth to outperform plans despite the unforeseen changes in business environment ■ COVID-19 Impact Positive One-off Surge in new online restaurants Remittance increases on refund Growth trendline (image) demand Initial Current 2021～ Structural Accelerated adoption of corporate DX

  16. Slide 16: FY2021 Guidance

    3. FY2021 Guidance Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 16

  17. Slide 17: Guidance for Consolidated FY2021 (IFRS)

    3.1 Guidance for Consolidated FY2021 (IFRS) Plan to achieve revenue growth of 20% and OP growth of 25% ■Consolidated FY2021 Guidance (IFRS) (Mil. Yen, % are YoY changes) (Reference) FY2020 Initial FY2020 FY202 2020年9月期 YoY Vs. FY2020 Plan ※ Actual Guidance 予算比 Initial Plan Revenues 31,418 33,046 39,

  18. Slide 18: Initial plan of achieving targets

    3.2 Initial plan of achieving targets Planned to achieve targets by executing on priority initiatives to generate incremental revenues of ¥10 bn ■FY2021 Revenue target and priority Priority initiatives and timing of contribution to initiatives (Mil. Yen) FY2021 earnings Internal 1Q 2Q 3Q 4Q Plan 39,

  19. Slide 19: Operating Profit Forecast by Company

    3.3 Operating Profit Forecast by Company Sustain high growth on consolidated basis while deploying upfront investments to secure medium to long-term growth ■Revenue size and OP growth rate by company: Drivers of FY2021 growth Revenue size (image) FY2020 Actuual FY2021 forecast Growth Drivers ＋40％ Pl

  20. Slide 20: Key Initiatives and Growth Strategies

    4. Key Initiatives and Growth Strategies Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 20

  21. Slide 21: Our position in a New Normal

    4.1 Our position in a New Normal DX support services that improves client’s PL & BS ■Customer needs & PL/BS changes Examples Our DX support services PL Revenue Online shop, Utility bills CoS/COGS Multiple payment methods PG Multi-Payment service Paperless (lowered postal cost) NEW TEPCO EP “SMS Paym

  22. Slide 22: Expansion of TAM and Profit Targets

    4.2 Expansion of TAM and Profit Targets Expand scope of business in the enormous market to achieve 2025 OP target of ¥25 bn ■ TAM by market segment, GMV, OP target and Priority Initiatives Market Broader EC FinTech Offline BaaS Global Segment 2020 2025 2020 2025 2020 2025 2020 2025 2020 2025 TAM 20

  23. Slide 23: Platform: Broader EC

    4.3 Platform: Broader EC Launch of phase I of platform to enable paperless and lower cost OP potential of broader EC ■ Fee and spread revenue in online payment ※ （Mil. Yen） 2020 2025 3,000 Fee TAM 20 2.3x 45 （B2C EC） Spread （¥ trn） 352 X times 352x （B2B EC） 2,500 Spread OP ＋27.4％ YoY （¥ bn） 7.5 2～2.

  24. Slide 24: Platform to Financial Institutions

    4.4 Platform to Financial Institutions Increase number of services to FI’s to expand stock revenue OP Potential of Financial institution platform ■Quarterly trend of stock revenue from financial institution businesses 2020 2025 （IT system TAM 2 X times 2x investment （¥ trn） by FIs) Total OP ＋36.7％ Y

  25. Slide 25: FinTech

    4.5 FinTech Expand Payment After Delivery and high-margin services, improve revenue growth rates and capital efficiency OP potential of FinTech ■Segment revenues and profit (Q4 standalone) 2020 2025 TAM （Deferred +47.3％ YoY －11.7％ 1 3x 3 payment market) New services ※ ＋209.7％ （¥ trn） OP Finance Leas

  26. Slide 26: Offline Payment / IoT

    4.6 Offline Payment / IoT Cashless adoption accelerates with cashier-less payment technologies and omni-channel shift OP potential of offline payment (IoT) ■ Quarterly trend of TRX volume and value of GMO-FG （Mil. Yen） (Thousand trx) 2020 2025 TRX Value TRX Volume Full scale rollout TAM 87 3x 118 （C

  27. Slide 27: Global: Business Portfolio

    4.7.1 Global: Business Portfolio 2C2P turns profitable; profit expansion from a sound asset base that can withstand a crisis Global’s OP potential ■ Global’s business areas 2020 2025 USA MSB TAM India MSB 50 X times 50x（US/Asia Lending) （¥ trn） OP 0.5 5 （overall Global OP) Indonesia MSB （¥ bn.） Loan

  28. Slide 28: Global: FinTech supporting MSB services (Lending)

    4.7.2 Global: FinTech supporting MSB services (Lending) Developing pipeline towards Phase 2 adjusted to the timing of recovery in each country ■Country-specific strategies ※ (GDP growth rate forecasts) ■ Current environment USA MSB Deteriora Recovery tion ➢ Gradual recovery, infection cases continue

  29. Slide 29: Financial Highlights

    5. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 29

  30. Slide 30: Balance Sheet Changes

    5.1 Balance Sheet Changes Increase in deposits received and MSB-related assets Asset （Mil. Yen） Liability/Equity （Mil. Yen） 200,000 192,022 200,000 192,022 180,000 180,000 160,000 160,000 139,990 86,751 139,990 140,000 140,000 95,830 116,858 120,000 116,858 120,000 46,752 52,013 100,000 100,000 38,8

  31. Slide 31: Revenue by business model (FY2020, continuing operations)

    5.2.1 Revenue by business model (FY2020, continuing operations) （Mil. Yen） Spread ＋21.0％ YoY 35,000 33,046 （+）Strong online payment excl. one-off impact from certain customers 30,000 （+）Growth of GMO Payment After Delivery 26,922 （+）Growth of overseas lending 25,000 16,023 Fee ＋20.8％ YoY （＋）Strong o

  32. Slide 32: Quarterly trend of revenue by business model

    5.2.2 Quarterly trend of revenue by business model （Mil. Yen) J-GAAP IFRS 4,414 4,500 4,290 4,000 3,647 3,672 3,500 3,450 3,365 3,289 3,136 3,000 2,816 2,671 2,532 2,558 2,527 2,500 2,433 2,383 2,291 2,057 2,083 1,938 2,000 1,876 1,767 1,907 1,847 1,813 1,825 1,662 1,527 1,411 1,461 1,478 1,520 1,50

  33. Slide 33: Segment revenue and OP YoY (FY2020, continuing operations)

    5.3 Segment revenue and OP YoY (FY2020, continuing operations) ■ Segment revenue ■ Segment operating profit （mil. Yen） （Mil. Yen） （百万円） Up 8.6％ YoY ※2 35,000 (excl. one-offs and special factors: Up 18.0％ YoY) ＋22.7％ YoY 14,000 77 －29.8％ YoY 602 －4.9％ YoY 30,000 12,000 110 10,388 1,799 －8.8％ YoY 632

  34. Slide 34: FinTech: Assets & profit growth (cumulative basis)

    5.4 FinTech: Assets & profit growth (cumulative basis) Expansion of high-margin services; YoY decline from reversals of provisions booked in the previous year ■ MSB related assets ■ Segment revenue ■ Segment profit (end-September) (%: % YoY) －41.6％ －8.8％ +7.9％ －70.1％ +25.9％ ＋276.7％ ＋70.2％ Impact fro

  35. Slide 35: Consolidated Cashflow Statement

    5.5 Consolidated Cashflow Statement （Mil. Yen） 55,000 J-GAAP IFRS ■FY2020 changes (Mil. Yen) Operating CF: ＋49,118 50,000 Pretax profit +10,989 45,000 Depr. & Amort. ＋1,520 40,000 Inventory －1,233 Advances paid +1,457 35,000 Accured income －2,019 30,000 Chgs in payables ＋1,379 25,000 Accrued expense

  36. Slide 36: Major Quarterly KPIs

    5.6 Major Quarterly KPIs Group-wide annual GMV value reaches ¥5.8 trillion ※1 ※2 Operating stores: 141,573 stores, GMV volume approx. 720 mil., GMV value approx. ¥1.3 trillion. （10K （¥100 Mil.） (Reference 1) GMV volume incl. offline Approx. 740 million transactions） 14,000 GMV value incl. offline Ap

  37. Slide 37: Thank You Very Much

    Thank You Ver y Much GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange, Section 1) URL： https://www.gmo-pg.com/en/corp/ For inquiries please contact our IR team at the telephone number below: Corporate Value Creation Strategy Division (IR Department) TEL: +81-3-3464-0182 E-mail：ir-contact@gmo-pg

  38. Slide 38: Reference Materials

    Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 38

  39. Slide 39: Factors affecting OP & Pretax Profit (FY2020)

    Factors affecting OP & Pretax Profit (FY2020) SG&A increase due to higher provisions; Pre-tax profit uplifted from increase in equity method income ■ OP Waterfall chart (Up 8.6% YoY)（Mil. Yen） ■Pre-tax profit waterfall chart （Mil. Yen） GP SGA (Up 18.2% YoY) increase increase ＋4,576 ＋3,659 Equity Fin

  40. Slide 40: Quarterly trend of CoS and SGA ratio

    Quarterly trend of CoS and SGA ratio CoS ratio fluctuates with changes in revenue mix, deconsolidation of MK caused ratio to decline ※ J-GAAP IFRS （Mil. Yen） ※47.2％ 9,356 9,030 8,927 9,000 ※41.7％ 50.4% 8,623 ※40.3％ 50.0% 46.8% ※39.9％ 8,246 8,160 7,945 8,000 7,769 44.2% 43.6% 7,295 42.7% 40.9% 41.1%

  41. Slide 41: Quarterly trend of PG and EP's CoS and SGA ratio

    Quarterly trend of PG and EP’s CoS and SGA ratio CoS ratio of online payment business remains stable （Mil. Yen） 6,370 50.9% 6,110 6,000 50.0% 47.4% 44.9% 45.3% 44.8% 45.2% 5,142 5,271 5,126 5,032 41.6% 5,000 4,840 4,816 4,663 40.0% 4,384 36.8% 36.5% 4,297 34.0% 33.5% 36.7% 4,000 3,937 36.7% 34.2% 3,

  42. Slide 42: Revenue by business model (Q4 standalone, continuing operations)

    Revenue by business model (Q4 standalone, continuing operations) （Mil. Yen） 9,000 8,927 Spread ＋31.2％ YoY （+）Strong online payment excl. one-off 8,000 impact from certain customers （+）Growth of GMO Payment After Delivery 7,000 6,814 （+）Growth of overseas lending 4,414 Fee ＋38.5％ YoY 6,000 （＋）Strong

  43. Slide 43: Revenue trend by business model (annual)

    Revenue trend by business model (annual) （Mil. Yen） 42,000 J-GAAP IFRS 40,000 38,000 36,000 34,000 32,000 30,000 Spread 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 Fee 12,000 10,000 8,000 6,000 4,000 Stock 2,000 Initial 0 2004/9 2005/9 2006/9 2007/9 2008/9 2009/9 2010/9 2011/9 2012/9 201

  44. Slide 44: Segment revenue and OP YoY (Q4 standalone, continuing operations)

    Segment revenue and OP YoY (Q4 standalone, continuing operations） ■ Segment revenue ■ Segment operating profit （Mil. Yen) （Mil. Yen） Up 31.0％ YoY （Mil. Yen） Consolidated Down 0.8％ YoY ※2 9,000 ＋13.3％ YoY （excl. special factors ＋11.3％ YoY） 153 3,400 8,000 462 －6.5％ YoY ＋ Growth GMO Payment ＋47.0％ YoY

  45. Slide 45: FinTech: Assets & profit growth (Q4 standalone)

    FinTech: Assets & profit growth (Q4 standalone) Expansion of high-margin services; YoY decline from reversals of provisions booked in the previous year ■ MSB related assets ■ Segment revenue ■ Segment profit (end-September) （％: % YoY） －11.7％ +7.9％ －70.1％ +47.3％ ＋209.9％ －6.5％ ＋70.2％ Impact from ＋70.1

  46. Slide 46: Consolidated KPI analysis (Q4 standalone)

    Consolidated KPI analysis (Q4 standalone) Accelerating DX adoption by customers and services, TRX volume surges, TRX Volume also in uptrend ※1 ※1 Operating stores ＋27.1％ TRX Volume ＋47.5％ TRX Value ＋22.6％ ※2 Prev. Q4 ＋16.7%※2 Prev. Q4 ＋32.6％※2 Prev. Q4 ＋27.1％ （Stores） （mil. trx) (¥ bn) TRX Value 140

  47. Slide 47: YoY comparison of GMV value by sector

    YoY comparison of GMV value by sector Travel, hobby and sports show some recovery, accelerated online shift of food & beverage and apparel ※1 ■Scatter diagram of major merchant sectors by GMV and Revenue proportion High revenue contribution 2019 2020 State of Emergency High Utility Digital Content S

GMO Payment Gateway — FY2020 Earnings Presentation on 6ix