Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q2 FY2023 Earnings Presentation

38 slides from Gmo Payment Gateway's earnings presentation, May 12, 2023

  1. Slide 1: Financial Results Briefing for Q2 FY2023

    Financial Results Briefing for Q2 FY2023 Solid Growth Driven by Advancing Our Strategies with a View to Normalization of Economic Activities May 12, 2023 73rd Investor Meeting

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement 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 May 12, 2023. Please note that the contents are subject to change without prior notice in the event of

  3. Slide 3: Agenda

    アジェンダ 1 Summary of Financial Results for Q2 FY2023 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: Summary of Financial Results for Q2 FY2023

    1 Summary of Financial Results for Q2 FY2023 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 Outperformed plans from balanced business mix and expense control H1 FY2023 Q2 FY2023 H1 FY2022 H1 FY2023 （¥ Mil） % YoY Guidance Standalone Actual Actual (Achievement %) (% YoY) 28,491 15,641 Revenue 24,059 30,454 ＋26.6% (106.9%) (＋28.2%) 9,818 Gross Profit 16,353

  6. Slide 6: 1-2-1 Waterfall Chart of Consol. Revenue (Q2 standalone)

    1-2-1 Waterfall Chart of Consol. Revenue (Q2 standalone) Non-merchandise and offline grew 28.2%, but merchandise domain headwinds continue （% YoY） Consol. Consol. （¥ bn) Consol. GMO-FG*1 GMO-PG*1 GMO-PS*1 GMO-EP*1 revenue ＋72.0% ＋20.1% ＋20.5% ＋0.3% ＋28.2% 16 Other ¥15.6 bn 15 Payment After Delivery

  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 (Q2 Cumulative) OP grew 25.1% from controlling expenses despite a one-time expense and increase in provisions for doubtful accounts OP Waterfall Chart (+25.1% YoY) Pre-tax Profit Waterfall Chart (+13.4% YoY) GP （¥ Mil） （¥ Mil） SGA Financial Fin

  8. Slide 8: 1-3-1 GMO-PG Non-consolidated Performance

    1-3-1 GMO-PG Non-consolidated Performance Revenue increased 20.1% and OP increased 32.4% from expansion of non-merchandise EC GMO-PG Non-consolidated Revenue & OP*1 （¥ Mil） MSB revenue (left axis) Q2 FY22 Q2 FY23 BaaS Support revenue (left axis) Non-merchandise EC revenue (left axis) 6,000 Revenue ＋

  9. Slide 9: 1-3-2 Performance of GMO-EP, GMO-PS and GMO-FG

    1-3-2 Performance of GMO-EP, GMO-PS and GMO-FG Under the sluggish merchandise EC market, GMO-FG grew strongly while GMO-EP and GMO-PS remains challenging Consol. GMO-EP*1*2 GMO-PS*2 Consol. GMO-FG*1*3 (% YoY) Q2 FY22 Q2 FY23 Q2 FY22 Q2 FY23 Q2 FY22 Q2 FY23 Revenue +7.7% ＋0.3% Revenue +7.9% ＋20.5% Re

  10. Slide 10: 1-4 Revenue by Business Model (Q2 Cumulative)

    1-4 Revenue by Business Model (Q2 Cumulative) Fee revenue grew 33.3% from continued growth of TRX volume in the utility and offline % YoY Factors* (¥ Mil) Q2 Cumu. Q2 Cumu. Q2 Cumu. 30,454 FY21 FY22 FY23 30,000 Spread ＋29.4% ＋12.6% ＋13.3% ＋ Online payment (PG) － Online payment (EP) 25,000 24,059 － G

  11. Slide 11: 1-5 Segment Results (Q2 Cumulative)

    1-5 Segment Results (Q2 Cumulative) All segment revenue continued to increase, but margins declined from one-time costs and higher credit costs Segment Revenue Segment Profit % YoY % YoY Q2 Cumu. Q2 Cumu. Q2 Cumu. Q2 Cumu. (¥ Mil) FY22 FY23 (¥ Mil) FY22 FY23 30,454 ＋21.0% ＋26.6% 12,000 10,350 ＋25.5%

  12. Slide 12: 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. 12

  13. Slide 13: 2-1 Strategy by Customer Segment

    2-1 Strategy by Customer Segment Maximize revenue by deploying strategy that aligns with the needs of each customer segment Customer segment matrix Customer/User Individual Corporate Mass market Industry specific PF Enterprise Cashless (broader EC) 2-3 2-3 （High Value） Local governments Cashless (of

  14. Slide 14: 2-2 Entered into Digital Salary Payment Domain

    2-2 Entered into Digital Salary Payment Domain Develop the B2E Market to Address Huge Money Flows That Lies Outside the B2C Market GMO-PG’s strategy ・Promote digitalization of money flow in the B2E domain such as salary prepayment and salary remittance ・Expand business by collaborating with partner

  15. Slide 15: 2-3 Broader EC: Target Markets

    Broader EC OP target: 2-3 Broader EC: Target Markets 2025 ¥18.0～¥22.0bn Address each vertical in the vast white space Merchandise/Non-merchandise EC revenue*1 (Quarterly) Broader EC: cashless penetration by industry (credit card usage) % YoY Merchandise Over 25% revenue EC ¥13.2 trn growth*2 (¥ Mil)

  16. Slide 16: 2-4 BaaS/EF: Expand Revenue and Scope of Services

    BaaS2025営業利益目標 BaaS OP target: 2-4 BaaS/EF*1：Expand Revenue and Scope of Services 2025 10 ¥1.0bn～ 億円～ Tap into broaden revenues by providing BaaS and EF support to customers Ginko Pay・Processing PF*2 revenues (Q2 standalone) Role of related service providers ■ Ginko Pay Current Going forward ■ Issui

  17. Slide 17: 2-5 Offline Payment: Market Share Expansion

    2-5 Offline Payment: Market Share Expansion Thanks to Offline OP target: 2025 ¥2.0bn~*1 Tailwind of Normalization of Economic Activities Amidst the growth of stock-type revenue*2, mobility positioned as the future growth driver GMO-FG/CAS: Revenue by business model*2 (Quarterly) Penetration of tap-a

  18. Slide 18: 2-6 FinTech: Current Status and Progress of Initiatives

    FinTech FinTech OP target: 2025営業利益目標 2-6 FinTech: Current Status and Progress of Initiatives 202530 ¥3.0bn~ 億円～ Profit growth inflection from expanding remittance and overseas despite the higher credit costs for Payment After Delivery FinTech revenue and profit/loss (Quarterly) Top merchants for GM

  19. Slide 19: 2-7-1 Global: Overseas Lending Strategy

    Global OP target: 2-7-1 Global: Overseas Lending Strategy 2025 ¥3.0bn~ Track record resulting in increased customer attraction in India and North America Lending strategy Diversity portfolio by increasing new small-amount borrowers. Increase loan amount to growing prime borrowers among existing cust

  20. Slide 20: 2-7-2 Global: Earnings Summary

    2-7-2 Global: Earnings Summary Increasing new borrowers and loan amount to prime borrowers; strengthening organization and increasing headcount Revenue*1 & OP*2 (Quarterly) Loan balance (end-Mar) New loans executed % YoY % YoY (¥ Mil) (¥ Mil) ＋26.2% ＋47.5% ・Consumer loan Fintech startup 300 US MSB 1

  21. Slide 21: 2-8 Expanding Scope of Business

    2-8 Expanding Scope of Business Expand scope of business to peripheral domains and strengthen existing business through organic expansion as well as equity participation Target domain Considering majority/minority investments in Support the reforms of Japan and overseas commercial flows and business

  22. Slide 22: Sustainability

    3 Sustainability Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 22

  23. Slide 23: GHG Emission Reduction

    3 GHG Emission Reduction Promoting the improvement of carbon efficiency throughout the supply chain Trend of GHG Emissions GHG Emission Reduction Initiatives （t-Co2） （t-Co2/¥ Mil) Scope1：Zero emissions Scope2 40,000 0.622 GHG emission ・GHG emission reduction of 80% by introducing what is per unit of

  24. Slide 24: Financial Highlights and Reference Materials

    4 Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 24

  25. Slide 25: 4-1-1 Consolidated Balance Sheet Changes

    4-1-1 Consolidated Balance Sheet Changes Increase in deposits received and MSB related assets Assets Liabilities and Equity (¥ Mil) (¥ Mil) 300,000 295,556 300,000 295,556 273,407 273,407 250,000 250,000 110,741 215,455 136,406 215,455 85,562 113,967 200,000 200,000 78,251 35,252 32,381 104,523 150,

  26. Slide 26: 4-1-2 Major Consolidated Financial Indicators (Annual Trend)

    4-1-2 Major Consolidated Financial Indicators (Annual Trend) Strengthened equity base with the expansion of MSB J-GAAP IFRS Third party allotment Issued Euro Yen CB Euro Yen CB Due2026 (‘¥ bn) 45% Raised ¥8.0bn Due 2023 Raised ¥21.1 bn 300 Raised ¥17.5 bn Euro Yen CB Due 2023 40% Fully converted 250

  27. Slide 27: 4-2 Consolidated Revenue by Business Model (Quarterly Trend)

    4-2 Consolidated Revenue by Business Model (Quarterly Trend) (¥ Mil) 6,057 6,025 6,000 5,371 5,415 5,296 5,297 5,000 4,808 4,707 4,731 4,665 4,414 4,290 4,257 4,311 4,000 3,840 3,646 3,672 3,450 3,395 3,364 3,289 3,278 2,288 3,135 3,149 3,015 2,922 3,000 2,815 2,713 2,669 2,532 2,527 2,559 2,237 2,3

  28. Slide 28: 4-3-1 Consolidated CoS and SG&A Ratio (Quarterly Trend)

    4-3-1 Consolidated CoS and SG&A Ratio (Quarterly Trend) SG&A ratio declined to 29.5% from cost control and scale benefit * (¥ Mil) 15,641 14,813 50.0% 14,000 13,341 12,897 42.7% 41.2% 12,201 40.9% 12,000 39.6% 11,857 11,132 40.0% 36.6% 36.7% 36.8% 37.5% 37.2% 35.5% 35.2% 35.2% 10,646 34.8% 34.6% 33.

  29. Slide 29: 4-3-2 CoS/SGA Ratio of GMO-PG & GMO-EP

    4-3-2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend) CoS ratio trending stably for online payment business (¥ Mil) 9,219 9,083 9,000 8,498 50.0% 7,977 8,000 7,906 7,682 45.2% 41.6% 7,122 40.7% 6,858 6,878 7,000 6,709 41.2% 6,370 39.7% 40.0% 6,110 36.5% 6,000 34.2% 33.1% 32.9% 5,271 5,126 32.5% 3

  30. Slide 30: 4-4-1 Operating Stores, TRX Volume and Value

    4-4-1 Operating Stores, TRX Volume and Value Consol. TRX value reaches approx. ¥13.2 trn in the past 12 months Operating TRX volume*2*3 TRX value*2 Stores*1/Terminals*2 End Q2 FY2023 Q2 FY2023 Past 12-month Q2 FY2023 Past 12-month - 1.48 bn 5.53 bn ¥3.6 trn ¥13.2 trn Consol. % YoY - ＋28.7% ＋33.2% ＋3

  31. Slide 31: 4-4-2 Waterfall Chart for Consol. TRX Value

    4-4-2 Waterfall Chart for Consol. TRX Value (Q2 FY2023) Achieved above-market growth rate from increase in offline and non- merchandise EC (% YoY) Offline Online payment Company ＋24.6% Consol. ＋36.3% payment Market*1 ＋11.7% Non-merchandise EC Merchandise EC Company ＋83.3% +36.1% +5.8% （¥ trn） Market

  32. Slide 32: 4-4-3 Distribution of major sectors

    4-4-3 Distribution of major sectors (Q2 FY2023 Standalone) Balance both stability and growth through sector diversification Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis) (Q2 FY2023 standalone Actual) Revenue The size of the circle represents the TRX value proportio

  33. Slide 33: 4-5-1 Consolidated Cash Flow Statement (Q2 Cumulative)

    4-5-1 Consolidated Cash Flow Statement (Q2 Cumulative) Q2 FY2023 changes by item (¥ Mil) (¥ Mil) Operating CF： ＋18,625 J-GAAP IFRS Pretax profit +9,856 50,000 Trade receivables and other receivables －5,059 Advances paid －5,349 40,000 Accrued revenues －2,675 Accrued expenses ＋2,232 Deposits received

  34. Slide 34: 4-5-2 Changes in consolidated cash flow statement

    4-5-2 Changes in consolidated cash flow statement Following factors affect operating CF other than pretax profit Related liabilities & assets Impact from business expansion Payment Processing Business Sales proceeds from Deposits received Liability Operating CF merchants under the (liability) Yearly

  35. Slide 35: 4-6 Our Target Market

    4-6 Our Target Market Expanding the scope of business by addressing the money flows between individual, corporates and government Money Flow C2C B2C （inter-individual B：Business G：Government (Consumption) transactions） C：Consumer E：Employee Individual ¥2 trn ¥300 trn Company Payment function EC, off

  36. Slide 36: 4-7 Path of Cashless Penetration

    4-7 Path of Cashless Penetration Social challenges acts as a backdrop to drive cashless penetration Cashless penetration*1 Implementation Propagation Permeation Advanced use 94% 83% 64% 56% 36% （2022） Drivers are problem-solving and future creation 13% （2010） Data usage, decarbonisation Labor shorta

  37. Slide 37: 4-8 Broader EC: List of sources for market size and cashless penetration

    4-8 Broader EC：List of sources for market size and cashless penetration by industry Market Size Travel Prepared using Japan Tourism Agency’s National Tourism Survey for 2022. Healthcare Ministry of Health, Labour and Welfare, ‘Overview of Estimates of National Medical Care Expenditure 2020’ Real Est

  38. Slide 38: 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

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