Gmo Payment Gateway, Inc. · TSE:3769
Gmo Payment Gateway — FY2021 Earnings Presentation
48 slides from Gmo Payment Gateway's earnings presentation, Nov 12, 2021
Slide 1: Financial Results Briefing for FY2021
Financial Results Briefing for FY2021 Growth returns to cruising speed; Expanding business scale for post-2025 growth November 12, 2021 67 th Investor Meeting Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.
Slide 2: Agenda
Agenda 1. Summary of Financial Results for FY2021 2. FY2022 Forecast 3. Growth Strategy 4. Initiatives in Focus Areas 5. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 2
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 November 12, 2021. Please note that the contents are subject to change without prior notice in the event o
Slide 4: 1. Summary of Financial Results for FY2021
1. Summary of Financial Results for FY2021 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4
Slide 5: Earnings Summary
1.1 Earnings Summary Revenue & OP grew over 25%; DPS raised ¥7 vs. previous year Achievement IFRS FY2021 Guidance FY 2021 Results FY2020 vs. Guidance （¥ Mil.） (% YoY) (% YoY) (%) Revenue 33,046 39,792 (+20.4%) 41,667 (+26.1％) 104.7% Operating Profit 10,388 12,985 (+25.0%) 12,987 (+25.0％) 100.0% Pre-
Slide 6: Revenue by business model (Q4 cumulative)
1.2 Revenue by business model (Q4 cumulative) Payment related services grew strongly despite the hard comps from last year’s strong nesting demand Spread ＋18.0％ YoY （¥ Mil.) 41,667 40,000 ＋ Online payment (PG and EP) ＋24.4％ YoY ＋ Early Payment 33,046 ＋ Overseas lending 35,000 18,913 － Tighter credit
Slide 7: Segment results (Q4 cumulative)
1.3 Segment results (Q4 cumulative) Payment Processing Business grew 33.7% from robust online payment and offline terminal sales Segment revenue Segment OP Up 26.1％ YoY (Consol.) Up 25.0％ YoY (after consol. adjustments) （¥ Mil.） （¥ Mil.） 45,000 717 ＋19.2％ YoY 2,093 ＋16.3％ YoY 15,500 77 ＋ Strong GMO-
Slide 8: GMO-PG non-consolidated performance (quarterly trend)
1.4.1 GMO-PG non-consolidated performance (quarterly trend) Growth sustained at 20% cruise speed level despite falloff of COVID special demand % YoY 2-yr CAGR GMO-PG non-consolidated: merchandize and non- merchandize EC revenue and OP Revenue ＋12.8％ ＋ 19.8% 4,000 (¥ Mil.) Merchandize revenue from a
Slide 9: Performance of GMO-EP, GMO-PS and GMO-FG (quarterly trend)
1.4.2 Performance of GMO-EP, GMO-PS and GMO-FG (quarterly trend) EP/PS affected by hard comps from peak COVID demand in previous Q4; strong terminal sales at FG Revenue (LHS) KPI (RHS) Revenue and major KPI’s by company GMO-EP Consol. GMOｰPS GMO-FG Consol. Revenue ＋10.0％ YoY Revenue ＋ 1.0％ YoY Reven
Slide 10: FY2021 Takeaways
1.5 FY2021 Takeaways Execute on midterm growth initiatives; agile group management thanks to diversification and 25% OP growth • Fully commenced rollout of payment platform to industry leaders Medium to long term • Furthering collaboration with major business partner • Sustain 25% OP growth despite
Slide 11: 2. FY2022 Forecast
2. FY2022 Forecast Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 11
Slide 12: Positioning of FY2022 for achieving 2025 targets
2.1 Positioning of FY2022 for achieving 2025 targets Create over 2x prospective projects by moving from initiatives to concrete projects ■ OP plans and target for prospective project amounts (¥ bn.) FY2025 target amount OP (Actual and Plan) Prospective projects (TO BE basis) FY2023 target amount Cur
Slide 13: Consolidated forecast
2.2 Consolidated forecast Guidance for revenue growth of 20%. OP growth 25% FY2022 Consolidated Earnings Forecasts IFRS FY2021 FY2022 % YoY (¥ Mil.) Actual Forecast Revenue 41,667 50,000 +20.0% OP 12,987 16,234 +25.0% Pre-tax 13,285 15,538 +17.0% Net Profit 8,982 10,048 ＋11.9% Profit Attributable to
Slide 14: Topline guidance explained
2,000 2,500 3,000 3,500 4,000 4,500 5,000 (¥ Mil.) 2.3 売上収益… Oct-2018 Nov-2018 Dec-2018 Jan-2019 Feb-2019 Mar-2019 Apr-2019 May-2019 Jun-2019 Act. Jul-2019 Aug-2019 Sep-2019 FY2020 Oct-2019 Plan ＋14.0％ ＋22.7％ Nov-2019 Dec-2019 factor in various risks Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Jun-
Slide 15: Scenario to achieve revenue guidance
2.4 Scenario to achieve revenue guidance Projects underway amount to 3x the “gap” (= difference between revenue plan and organic revenue amount) ■ How the revenue plan, the “gap” and various initiatives all tie in Initiatives to close the Gap (¥ Mil.) 3x Gap Actual +26.1％ 55,000 Plan Initiatives to
Slide 16: 3. Growth Strategy
3. Growth Strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 16
Slide 17: Acceleration of OP growth
3.1 Acceleration of OP growth The incremental OP amount has increased by expanding scope of the business 2005 2010 2015 2020 2021 2025 TRX Value (¥ tr.) 0.3 0.8 2.0 5.8 8.0 20～25 x2.5 x2.5 x3 Operating Profit x3.5～ 2025 ¥25 bn OP increment of ¥10bn in 20 years ¥6bn in 2 years 2022 ¥16.2 bn 2020 ¥10.
Slide 18: Factors for sustainable growth
3.2 Factors for sustainable growth Aim for higher enterprise value and sustainable growth by ensuring execution of the 3 factors 2000 2015 2021 Financial strategy and Payment-centric business investments for business expansion new value creation Payment-centric business expansion Create an applicati
Slide 19: Business expansion strategy
3.3.1 Business expansion strategy Digitalize payment aspect of core businesses of large companies “Mandatory” Value proposition Actual use case Margins Scale Transforms into core business Industry specific platform High Large Application platform Core SMS Choice of Payment Digitalization of payment,
Slide 20: Application infrastructure
3.3.2 Application infrastructure Provide DX platform to the core businesses of various sectors/industries Niche Main Application infrastructure to transform the core business Acquiring support to JFR Card Payment platform to global major players D2C support to large food & beverage companies Reserva
Slide 21: Investment and Financial strategy
3.4.1 Investment and Financial strategy Accelerate the investment/growth cycle to scale up business (¥ Bn.) (Yen) 70 70 Considering fund procurement for MSB Equity Investment balance DPS (\/shr) Procurement 60 (LHS) (LHS) (RHS) 60 expansion 50 50 1. Create and foster new businesses with 40 40 a long
Slide 22: Creation and expansion of new business
3.4.2 Creation and expansion of new business Scale up newly created businesses through action plans during the Growth phase Revenue 2013 Revenue 2021 (¥ Bn.) (¥ Bn.) GMO-PS GMO-FG GMO-EP 5.0～ 5.0～ Several projects in preparation phase Cycle byGMO Condo Pay GMO B2B Pay On Credit Instant Salary byGMO
Slide 23: Strategic investment (Minority stake into start-ups)
3.4.3 Strategic investment (Minority stake into start-ups) Create strategic synergies while also securing investment returns Strategic investment Strategic equity stake GMO Global Payment Fund (Japan) (Overseas) (¥ Bn.) 9.5x 2.0x 4.2x IRR IRR IRR 59.2％ 10.9％ 26.3％ 13 9 13 Companies Companies compani
Slide 24: 4. Initiatives in Focus Areas
4. Initiatives in Focus Areas Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 24
Slide 25: Broader EC
4.1 Broader EC Targeting large merchandize/non-merchandize EC operators, focus on SME sector Quarterly trend of GMO-PG non- consolidated TRX value for B2C EC sector ※ 2021 2025 (incl. merchandize and non-merchandize) （¥ Bn.） ※ (Act.) (Plan as of 2021) 1,600 9.5 18.0～22.0 十億 OP (¥ bn.) Merchandize EC
Slide 26: BaaS & Cashless
4.2 BaaS & Cashless （Embedded Finance） Target OP ¥1.0 bn in 2025 by service diversification and lateral expansion within the sector 2021 2025 Stock revenue from services to financial institutions (Act.) (Plan as of 2021) (Q4 standalone) OP (¥ Bn.) 0.6 1.0～ ■ Ginko Pay ■ Issuing/Acquiring Growth scen
Slide 27: Offline & IoT
4.3 Offline & IoT Capture the gigantic offline market by leveraging the synergy between IoT & EC business and stera Quarterly trend GMO-FG & GMO-CAS’s ※3 2021 2025 revenue by business model (¥ Mil.) (Act.) (Plan as of 2021) 700 1,800 ※1 % YoY OP（¥ bn.） 0.58 2.0～ ■Initial (RHS) ＋261.7％ 1,600 600 ■Sto
Slide 28: FinTech
4.4 FinTech Aim to return to 25% growth through new merchant acquisitions for Payment After Delivery and new services 2021 2025 Q4 cumulative revenue for FinTech services (Act.) (Plan as of 2021) Instant Salary byGMO OP（¥ bn.） 2.0 3.0～ commenced in Q4 ＋7.8％ Growth scenario Remittance service 1) Asse
Slide 29: Global: Investing & lending strategy (1)
4.5.1 Global: Investing & lending strategy (1) Growth acceleration from synergy between growing markets of Asia, India and North America 2021 2025 (Act.) (Plan as of 2021) - 3.0～ ※1 OP（¥ bn.） North America Japan Innovation Profit center center SE Asia, India Growth center Payment Processing MSB Reve
Slide 30: Global: Investing & lending strategy (2)
4.5.2 Global: Investing & lending strategy (2) Gain cutting edge knowledge by building portfolio of leading- edge Fintech companies Country/ 2022 GDP growth Major lending & investing / ※1 Method of approach Region (%) business portfolio Benefit from expanding market; invest & lend to SE Asia 5.8 pro
Slide 31: 5. Financial Highlights and Reference Materials
5. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 31
Slide 32: Balance Sheet Changes
5.1 Balance Sheet Changes Financial strength improves as equity reaches ¥57.8bn, an increase of ¥17.0bn from Euro-yen CB conversion Asset Liabilities/Equity （¥ Mil.) （¥ Mil.) 215,455 215,455 200,000 192,022 200,000 192,022 78,251 104,523 150,000 139,990 150,000 139,990 86,751 95,830 25,741 52,013 46
Slide 33: OP and Pre-tax Profit Waterfall chart (Q4 Cumulative)
5.2 OP and Pre-tax Profit Waterfall chart (Q4 Cumulative) Strong FG revenue growth offset the cost-of-sales increase; continuing to control credit related cost OP YoY: waterfall chart Pre-tax profit YoY: waterfall chart (+20.9% YoY) Equity （¥ Mil.） (+ 25.0% YoY) Financial Financial method （¥ Mil.） i
Slide 34: Revenue by Business Model (Q4 standalone)
5.3.1 Revenue by Business Model (Q4 standalone) Steady progress of online payments and strong offline terminal sales （¥ Mil.） 11,132 Spread ＋7.2％ YoY ＋ Online payment in line with expectation 10,000 ＋ Early payment service 8,927 4,731 ＋ Overseas lending － Tighter credit control of GMO Payment After
Slide 35: Quarterly Trend of Revenue by Business Model
5.3.2 Quarterly Trend of Revenue by Business Model （¥ Mil.） J-GAAP IFRS 5,000 4,808 4,731 4,665 4,707 4,414 4,500 4,290 4,000 3,646 3,672 3,500 3,450 3,289 3,365 3,136 3,000 2,922 2,816 2,713 2,671 2,559 2,669 2,558 2,532 2,433 2,527 2,500 2,383 2,291 2,057 2,083 2,000 1,876 1,907 1,825 1,937 1,754
Slide 36: Revenue Trend by Business Model (Annual)
5.3.3 Revenue Trend by Business Model (Annual) （¥ Mil.） 55,000 J-GAAP IFRS 50,000 45,000 40,000 Spread 35,000 30,000 25,000 20,000 Fee 15,000 10,000 Stock 5,000 Initial 0 04/9 05/9 06/9 07/9 08/9 09/9 10/9 11/9 12/9 13/9 14/9 15/9 16/9 17/9 18/9 19/9 20/9 21/9 22/9E TSE Listing ※ Online advertising
Slide 37: Segment Results (Q4 standalone)
5.4 Segment Results (Q4 standalone) Payment Processing Business revenue grew 34.2% from robust online payment and offline terminal sales Segment revenue Segment operating profit ＋24.7％ YoY (Consol.) （¥ Mil.） +5.9％ YoY (after consol. eliminations) （¥ Mil.） 4,000 12,000 185 ＋21.2％ YoY －12.6％ YoY 3,500
Slide 38: FinTech: Assets & Profit Growth (Q4 Cumulative)
5.5.1 FinTech: Assets & Profit Growth (Q4 Cumulative) Profit increased 16.3% from expansion of high-margin services and control of credit-related costs MSB related assets （％: % YoY) Segment revenue Segment profit (end-Sept.) +7.8％ ＋3.7％ +16.3％ －17.5％ +21.9％ ＋6.7％ ＋3.2％ ＋6.1% ＋33.3％ ＋63.2％ ＋61.5％ +8.
Slide 39: FinTech: Assets & Profit Growth (Q4 Standalone)
5.5.2 FinTech: Assets & Profit Growth (Q4 Standalone) Preventative evaluation loss from a certain overseas investee and conservative operation given the business environment MSB related assets Segment revenue Segment profit （％:YoY) (end-Sept.) +1.8％ +21.9％ －17.5％ －33.6％ －12.6％ －6.0％ ＋3.2％ +1.0% ＋33.
Slide 40: Quarterly Trend of CoS and SGA Ratio
5.6.1 Quarterly Trend of CoS and SGA Ratio CoS ratio fluctuates with changes in revenue mix; decline from Q3 FY2020 is due to deconsolidation of ※MK IFRS （¥ Mil.） 11,132 10,646 9,767 10,121 50.0% 10,000 8,927 41.1% 8,246 9,356 9,030 42.7% 40.2% 8,623 40.9% 7,945 41.2% 39.6% 7,769 8,160 36.8% 36.3% 3
Slide 41: Quarterly Trend of PG and EP's CoS and SGA ratio
5.6.2 Quarterly Trend of PG and EP’s CoS and SGA ratio Cost of sales ratio for online payment business trending stably (¥ Mil.) 7,122 7,000 6,858 6,878 47.4% 6,709 50.0% 45.2% 6,370 45.3% 44.8% 6,110 6,000 41.6% 41.2% 36.8% 36.5% 39.7% 36.7% 5,126 5,271 40.0% 36.7% 5,032 4,816 5,142 32.5% 31.6% 5,00
Slide 42: Quarterly Trend of Operating Stores, TRX Volume and Value
5.7.1 Quarterly Trend of Operating Stores, TRX Volume and Value Group-wide annual TRX value reaches ¥8.0 trillion ※1 ※2 Operating stores: 123,938 stores, TRX volume approx. 970 mil., TRX value approx. ¥2.0 trillion. （Stores）（¥100 Mil.） (10K transactions) 18,000 100,000 （Reference）Online payment: TRX
Slide 43: TRX volume and value (Q4 standalone)
5.7.2 TRX volume and value (Q4 standalone) Return to baseline growth after windfall COVID effect tapers Quarterly trend of online payment TRX volume Quarterly trend of online TRX value ＋27.7% YoY TRX Volume ＋23.3% YoY TRX Value (Mil. (¥ Bn) transactions) Certain merchant Certain merchant 1,000 2,000
Slide 44: Data Book
5.7.3 Data Book Data on major financial information and KPIs will be posted on our website starting this Quarter. Data Book (FY Ending September 2021) URL：https://www.gmo-pg.com/en/corp/newsroom/pdf/211112_gmo-pg_data_en.pdf Data Book (up to FY Ending September 2020) URL：https://www.gmo-pg.com/en/co
Slide 45: Consolidated Cashflow Statement
5.8.1 Consolidated Cashflow Statement Operating CF turns negative from increase in advances paid from expansion of Early Payment service （¥ Mil.） J-GAAP IFRS FY2021 changes by item (¥ Mil.) 55,000 Operating CF: －6,343 50,000 Pretax profit +13,285 45,000 Depreciation ＋1,896 40,000 Receivables (operat
Slide 46: Changes in the consolidated CF statement
5.8.2 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) Represent
Slide 47: Promoting financial inclusion through impact loan
5.9 Promoting financial inclusion through impact loan Lending to microfinance provider Satya Green Finance through Investree Strategic angle B2C B2B • Re-acceleration of global investment & lending • Operates P2P loan platform providing factoring strategy services to SMEs • A beachhead to the new gr
Slide 48: Thank You Very Much
Thank You Very 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