Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q2 FY2021 Earnings Presentation

37 slides from Gmo Payment Gateway's earnings presentation, May 13, 2021

  1. Slide 1: Financial Results Briefing for Q2 FY2021

    Financial Results Briefing for Q2 FY2021 Progress on developing DX platforms to sustain above 25% growth May 13, 2021 65 th Investor Meeting Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

  2. Slide 2: Agenda

    Agenda 1. Summary of Financial Results for Q2 FY2021 2. Progress of Priority Initiatives 3. Growth Strategies and Initiatives 4. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 2

  3. 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 May 13, 2021. Please note that the contents are subject to change without prior notice in the event of cha

  4. Slide 4: 1. Summary of Financial Results for Q2 FY2021

    1. Summary of Financial Results for Q2 FY2021 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Earnings Summary

    1.1.1 Earnings Summary Sustained over 25% growth in a COVID-19 like-for-like basis; progress ratio of over 50% Progress on 1H FY2021 IFRS FY2020 FY2021 % YoY Guidance Q2 standalone （¥ Mil.） 1H 1H (vs. Full Yr) （% YoY） Revenue 15,494 19,888 +28.4% +104.0% 10,121 （+50.0％） （+28.2%） Operating 4,688 6,59

  6. Slide 6: Quarterly Growth Trend of Revenue

    1.1.2 Quarterly Growth Trend of Revenue Both Q1 (hard comps against pre-COVID) and Q2 (like-for- like comps during COVID) posted over 28% growth Pre-COVID vs During COVID During COVID like-for-like ■ FY2019 ■FY2020 ■F2021 （¥ Mil.） ＋28.5％ ＋28.2％ 10,000 ＋29.5％ ＋31.0％ ①＋9.8％ ＋21.0％ 8,000 6,000 4,000 2,

  7. Slide 7: Growth Trend of OP (Q2 standalone)

    1.1.3 Growth Trend of OP (Q2 standalone) Both Q1 (hard comps against pre-COVID) and Q2 (similar comps during COVID) posted over 34% growth Pre-COVID vs During COVID During COVID like-for-like ■ FY2019 ■FY2020 ■F2021 （¥ Mil.） ＋48.3％ ＋34.4％ 3,500 ＋20.3％ 3,000 ＋17.1％ ③ －0.8％ 2,500 ②－2.4％ 2,000 1,500 1,

  8. Slide 8: Growth Drivers of TRX Volume and Value (Q2 Standalone)

    1.1.4 Growth Drivers of TRX Volume and Value (Q2 Standalone) Separating out the uplift from one-offs and seasonality and organic growth Quarterly TRX Volume Trend TRX Volume Quarterly TRX Value Trend TRX Value Special factors (④) （Mil. trx） ＋37.0% YoY （¥ Bn.） ＋31.5% YoY 900 Excl. special factors +45

  9. Slide 9: Segment Results (Q2 Cumulative)

    1.2 Segment Results (Q2 Cumulative) Profit growth significantly outperformed segment revenue growth in all segments (Unit: ¥ Mil.) Segment revenue Segment operating profit ＋28.4％ YoY (consol. ) After consol. eliminations ＋40.6％ YoY （¥ Mil.） （¥ Mil.） 20,000 343 ＋24.0％ YoY 58 +51.1% YoY 8,000 18,000 ＋

  10. Slide 10: GMO-PG Non-consolidated Performance (Q2 Standalone)

    1.3.1 GMO-PG Non-consolidated Performance (Q2 Standalone) Growth of online payments and MSB from nesting demand taking root, etc. GMO-PG standalone: merchandize and non- merchandize EC revenue and OP (¥ Mil.) 4,000 Revenue ＋29.0％ YoY 百万 百万 Non-merchandize EC revenue (LHS) 6,000 OP ＋31.3％ YoY Merchan

  11. Slide 11: Performance of GMO-EP, GMO-PS and GMO-FG (Q2 Standalone)

    1.3.2 Performance of GMO-EP, GMO-PS and GMO-FG (Q2 Standalone) EP and FG exceed plans, PS focusing on future growth initiatives Revenue and OP by company Revenue (LHS) OP (RHS) （％: % YoY) GMO-EP GMOｰPS GMO-FG (¥ Mil.) (¥ Mil.) (¥ Mil.) Revenue ＋36.6％ Revenue ＋ 9.3％ Revenue ＋44.2％ 2,000 1,600 OP ＋25.

  12. Slide 12: 2. Progress of Priority Initiatives

    2. Progress of Priority Initiatives Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 12

  13. Slide 13: Progress on Priority Initiatives and New Projects

    2.1 Progress on Priority Initiatives and New Projects Steady progress on existing projects and adding new projects for next fiscal year FY2021 F2022 Launched Priority Initiative and new projects※1 1H 2H 1H 2H To contribute beyond 2H Utility Co. A Launched after 2 mnth delay Utility Co. B To start in

  14. Slide 14: Status of Priority Initiatives

    2.2 Status of Priority Initiatives Priority Initiatives begins contributing from this FY, expect further expansion in 2H and next FY Progress of Priority Initiatives Utility revenue GMP revenue ※1 FG terminals (incl. stera)※2 Launched after 2-month delay （’000 units） 70% progress against 100% progre

  15. Slide 15: 3. Growth Strategies and Initiatives

    3. Growth Strategies and Initiatives Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 15

  16. Slide 16: Mid-term Management Targets

    3.1 Mid-term Management Targets As of May 13, 2021 Target OP ¥25bn from expanding business scope within the ¥600+ tr. market TAM（¥ Tr.） ※1 OP(¥ Bn.) 2020 2025 2020 2025 2025 Reason for revision （Act.） （Frcst） （Act.） （Plan as of 2019） （Plan as of 2021） Support for DX business and B2C EC 20 45 16.0 18

  17. Slide 17: Broader EC

    3.2.1 Broader EC Marketing to merchandize/Non-merchandize EC operators, focus on SME sector 2020 2025 Merchandize and non-merchandize EC revenues （Act.） （Plan as of 2021） at GMO-PG non-consolidated OP (¥ Bn.) 7.5 18.0～22.0 Merchandise EC Non-merchandise EC 百万 （¥ Mil.） 50,000 Growth scenario Non-merc

  18. Slide 18: Initiatives to SMEs

    3.2.2 Initiatives to SMEs UI/UX enhancement, focus on new businesses, aim to acquire 1,000 new merchants at EP Initiatives to achieve 1,000 new acquisitions GMO-EP: Quarterly trend of TRX Value and new merchant acquisitions 1) UI/UX enhancement （Stores） 3,000 Leverage synergy with GMO Internet Group

  19. Slide 19: BaaS

    3.3 BaaS ※ Target OP of ¥1 bn from horizontal deployment within the sector and service diversification 2020 2025 Q2 standalone stock revenue from services to FIs （Act.） （Plan as of 2021） ■ Ginko Pay OP (¥ Bn.) 0.5 1.0～ ■ Issuing/Acquiring ■ Other Growth scenario ＋19.0％ YoY 1）PF buildout that caters

  20. Slide 20: Offline/IoT

    3.4 Offline/IoT Capture the gigantic offline market by leveraging the synergy between IoT+EC business and stera GMO-FG: Annual trend of operating payment 2020 2025 terminals and TRX value （Act.） （Plan as of 2021） ※1 （Units） （¥ Bn.） OP（¥ Bn.） 0.5 2.0～ 180,000 Operating terminals (LHS) 8,000 TRX Value

  21. Slide 21: FinTech

    3.5 FinTech Aim for profitability improvement through introduction of high-margin service and control of credit related cost Q2 standalone: segment profit, provision for 2020 2025 doubtful accounts, ROA (profit/total asset) （Act.） （Plan as of 2021） (¥ Mil.） Segment profit ※2 OP (¥ Bn) 1.8 3.0～ 900 P

  22. Slide 22: Global

    3.6 Global Ascertain differences in economic recovery of each country, buildout a stable foundation for future expansion 2020 2025 （Act.） （Plan as of 2021） Payment processing MSB revenue ※1 TRX value OP（¥ Bn.） - 3.0～ （% YoY） （% YoY） ＋46.9% ＋4.0% Rebuilding portfolio Q2 Q2 Q2 FY2020 Q2 FY2021 FY2020

  23. Slide 23: 4. Financial Highlights

    4. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 23

  24. Slide 24: Balance Sheet Changes

    4.1 Balance Sheet Changes Financial strength improves as equity reaches ¥43.7bn from of Euro-yen CB conversion Asset Liability/Equity （¥ Mil.） （¥ Mil.） 198,048 198,048 200,000 192,022 200,000 192,022 150,000 139,990 90,728 150,000 139,990 86,751 93,024 95,830 52,013 46,752 100,000 100,000 31,703 18,

  25. Slide 25: OP and Pre-tax Profit Growth (Q2 Cumulative)

    4.2 OP and Pre-tax Profit Growth (Q2 Cumulative) FG’s revenue growth offset the cost-of-sales increase; continuing to control credit related cost OP YoY: waterfall chart （¥ Mil.） Pre-tax profit YoY: waterfall chart （¥ Mil.) （+ 40.6% YoY） （+ 26.5% YoY） Equity Financial Financial method SGA increase i

  26. Slide 26: Revenue by Business Model (Q2 Cumulative)

    4.3.1 Revenue by Business Model (Q2 Cumulative) Fee and spread revenues grew from strong online payment at PG and EP （¥ Mil.） 20,000 19,888 Spread + 29.4％ YoY ＋ Strong online payment ＋ Growth of early payment service 15,494 9,473 － Conservative operation of global lending 15,000 during COVID Fee + 3

  27. Slide 27: Revenue by Business Model (Q2 Standalone)

    4.3.2 Revenue by Business Model (Q2 Standalone) Strong online payment (fee, spread), high levels of payment terminal sales （¥ Mil.） 10,121 10,000 Spread + 27.1％ YoY ＋ Strong online payment ＋ Growth of early payment service 7,891 4,665 － Conservative operation of global lending during COVID Fee + 30.

  28. Slide 28: Quarterly Trend of Revenue by Business Model

    4.3.3 Quarterly Trend of Revenue by Business Model （¥ Mil.） J-GAAP IFRS 5,000 4,808 4,665 4,414 4,500 4,290 4,000 3,672 3,646 3,450 3,500 3,289 3,365 3,136 3,000 2,816 2,713 2,558 2,671 2,532 2,527 2,559 2,433 2,383 2,500 2,291 2,057 2,083 2,000 1,876 1,907 1,847 1,937 1,825 1,767 1,813 1,406 1,662

  29. Slide 29: Revenue Trend by Business Model (Annual)

    4.3.4 Revenue Trend by Business Model (Annual) （¥ Mil.） 42,000 J-GAAP IFRS 40,000 38,000 36,000 34,000 32,000 30,000 28,000 Spread 26,000 24,000 22,000 20,000 18,000 16,000 Fee 14,000 12,000 10,000 8,000 6,000 Stock 4,000 2,000 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

  30. Slide 30: Segment Results (Q2 Standalone)

    4.4 Segment Results (Q2 Standalone) Payment processing remains favorable, MSB profit significantly increased from controlling credit related costs （Unit:: ¥ Mil.） Segment revenue Segment operating profit Up 28.2％ YoY (consol.) （¥ Mil.） Up 34.4％ YoY (after consol. eliminations) （¥ Mil.） 4,500 38 －5.5

  31. Slide 31: FinTech: Assets & Profit Growth (Q2 Cumulative)

    4.5.1 FinTech: Assets & Profit Growth (Q2 Cumulative) Profit increased from expansion of high-margin services and control of credit-related costs （％: % YoY) MSB related assets Segment revenue Segment profit －84.9% －74.5％ (end-March) ＋19.1％ +16.7％ ＋32.6％ +11.6％ +39.9％ ＋32.5％ －2.1％ ＋13.7％ ＋24.0％ ＋68.6

  32. Slide 32: FinTech: Assets & Profit Growth (Q2 Standalone)

    4.5.2 FinTech: Assets & Profit Growth (Q2 Standalone) Profit increased from expansion of high-margin services and control of credit-related costs MSB related assets (end-March) Segment revenue Segment profit （％ YoY） －84.9% －78.8％ +11.6％ ＋19.1％ +15.4％ －1.7％ +36.1％ ＋38.3％ －2.1％ ＋9.3％ ＋24.0％ ＋107.3％ ＋3

  33. Slide 33: Quarterly Trend of CoS and SGA Ratio

    4.6.1 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 ※ J-GAAP IFRS （¥ Mil.） 10,121 ※47.2％ 9,767 10,000 50.4% 9,356 9,030 50.0% 8,927 ※39.9％ 8,623 43.6% 40.9% 8,246 8,160 42.7% 40.2% 41.1% 7,945 41.2% 7,769

  34. Slide 34: Quarterly Trend of PG and EP's CoS and SGA ratio

    4.6.2 Quarterly Trend of PG and EP’s CoS and SGA ratio Cost of sales ratio for online payment business trending stably 6,858 6,709 (¥ Mil.) 50.9% 6,370 47.4% 6,110 50.0% 6,000 45.3% 45.2% 44.8% 5,271 41.6% 5,032 5,142 5,126 36.8% 39.7% 5,000 36.7% 36.7% 40.0% 4,840 4,816 4,663 36.5% 34.0% 4,384 33.1

  35. Slide 35: Quarterly Trend of Operating Stores, TRX Volume and Value

    4.7 Quarterly Trend of Operating Stores, TRX Volume and Value Group-wide annual TRX value reaches ¥6.9 trillion ※1 ※2 Operating stores: 184,355 stores, TRX volume approx. 820 mil., TRX value approx. ¥1.8 trillion. （Stores） （¥100 Mil.） （10,000 trx） 180,000 18,000 （Reference）Online payment: TRX volume

  36. Slide 36: Consolidated Cashflow Statement

    4.8 Consolidated Cashflow Statement （¥ Mil.） J-GAAP IFRS FY2021 Q2 changes (¥ Mil.) 55,000 Operating CF: －2,113 50,000 Pretax profit +6,638 45,000 Depreciation ＋903 40,000 Operating receivables and others －1,624 35,000 Advances paid －11,517 30,000 Deposits received ＋6,290 25,000 Income taxes －2,768

  37. Slide 37: 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

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