Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q3 FY2024 Earnings Presentation

46 slides from Gmo Payment Gateway's earnings presentation, Aug 9, 2024

  1. Slide 1: Financial Results Briefing for Q3 FY2024

    Financial Results Briefing for Q3 FY2024 Sustain high growth by driving forward the re-bundling strategy August 9, 2024 78th Investor Meeting

  2. Slide 2: Safe Harbor Statement for Forward Looking Statements

    Safe Harbor Statement for Forward Looking Statements 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 August 9, 2024. Please note that the contents are subject to change wit

  3. Slide 3: Agenda

    Agenda 1. Summary of Financial Results for Q3 FY2024 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: 1. Summary of Financial Results for Q3 FY2024

    1. Summary of Financial Results for Q3 FY2024 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 Both revenue and OP progressed in line with plans Q3 FY2023 Q3 FY2024 FY2024 Guidance Q3 FY2024 （¥ mil） % YoY cumulative cumulative (Progress ratio) (% YoY) 73,286 18,096 Revenue 47,000 54,196 +15.3% (74.0%) (+9.4%) 12,063 Gross Profit 29,780 35,331 +18.6% － (+18.

  6. Slide 6: 1.2.1 Factors Behind Consol. Revenue Growth of 9.4%

    1.2.1 Factors Behind Consol. Revenue Growth of 9.4% (YoY, Q3) Initial revenue declined 25.3% due to the high base of terminal sales in the previous term （% YoY） （¥ bn） Consol. GMO-PG*3 GMO-PS*3 Consol. Overseas Consol. GMO-FG*1*2 GMO-EP *1*3 Business*3 -8.2% +17.9% +12.0% +10.6% +57.6% +9.4% ¥18.1 b

  7. Slide 7: 1.2.2 Consol. Revenue and Revenue Growth Trend

    1.2.2 Consol. Revenue and Revenue Growth Trend (YoY, Quarterly) Stable trend of adjusted revenue growth of 18.7% YoY excluding initial, etc. Consol. revenue breakdown and YoY growth rate (Quarterly trend) （¥ mil) Initial revenue (Left axis) Initial revenue 20,000 60% Revenue excl. initial (Left axis

  8. Slide 8: 1.2.3 Waterfall Chart for Consol. OP and Pre-tax Profit

    1.2.3 Waterfall Chart for Consol. OP and Pre-tax Profit (YoY, cumulative Q3) OP grew 21.8% from increase in gross profit and decline in provisioning for doubtful accounts OP Waterfall Chart*1 Pre-tax Profit Waterfall Chart*1 （¥ mil） （¥ mil） % YoY +21.8% % YoY +37.1% GP SGA Other Other OP Financial F

  9. Slide 9: 1.3.1 GMO-PG Non-Consolidated Performance

    1.3.1 GMO-PG Non-Consolidated Performance (YoY, Quarterly) Revenue grew 17.9%, online payment revenue grew 19.9% GMO-PG non-consolidated revenue & OP (Quarterly) *1 （¥ mil） Merchandise EC revenue % YoY Non-merchandise EC revenue Revenue 10,000 Q1 FY2024 Q2 FY2024 Q3 FY2024 2-yr CAGR 百万 BaaS Support

  10. Slide 10: 1.3.2 Performance of GMO-EP, GMO-PS and GMO-FG

    1.3.2 Performance of GMO-EP, GMO-PS and GMO-FG (YoY, Quarterly) GMO-EP outperformed plans, GMO-PS was in line and GMO-FG impacted by high base of terminal sales in previous FY Consol. GMO-EP (Quarterly)*1*2 GMO-PS (Quarterly)*2 Consol. GMO-FG (Quarterly)*1*3 (% YoY） Q3 FY2023 Q3 FY2024 Q3 FY2023 Q3

  11. Slide 11: 1.4 Segment Results (YoY, Cumulative Q3)

    1.4 Segment Results (YoY, Cumulative Q3) MSB grew 43.2% from normalization of credit costs Segment revenue* Segment profit* % YoY % YoY (¥ mil) Cumu. Q3 Cumu. Q3 (¥ mil) Cumu. Q3 Cumu. Q3 FY2023 FY2024 FY2023 FY2024 +27.2% +15.3% +25.3% +21.8% 50,000 +16.2% +27.7% 20,000 +21.4% +34.3% + GMO-MR +61.7

  12. Slide 12: 1.5 Operating Profit Target and Progress

    1.5 Operating Profit Target and Progress OP progress ratio of 78% by pursuing initiatives to strengthen business foundations Operating profit: actual, target and progress Progress of initiatives to strengthen business foundations (¥ bn) Q3 FY2024 % YoY OP (actual) Mid-term Mgmt. Target Monetize larg

  13. Slide 13: 2. 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. 13

  14. Slide 14: 2.1.1 Assumptions Behind OP CAGR of 25%

    2.1.1 Assumptions Behind OP CAGR of 25% Aim for OP CAGR 25% by compiling strategy that responds to structural market changes OP CAGR 25％ breakdown (image) ~2020 2020~ Growth rate New payment domain 25% trendline 5% New payment domains EC/Online 15~20% payment processing 20% EC/Online payment +15~20%

  15. Slide 15: 2.1.2 Expansion of Business Domains

    2.1.2 Expansion of Business Domains Expand business domains through acquisitions and organic growth CAGR+25% Internal growth of proprietary businesses (organic growth) Q3 FY2024 OP*2 +15~20% Internal growth of acquired businesses Salary Medical Reservation Research prepayment Payment Enhancement GMO

  16. Slide 16: 2.2 Re-Bundling Strategy

    2.2 Re-Bundling Strategy Create value-added services that contribute to “customer’s growth = expansion of payment transactions” Credit card payment Multi- Payment Early Payment CP payment Online advertising Customer service Payment After Delivery Remittance Processing PF Salary Digital Prepayment Bi

  17. Slide 17: 2.3.1 GMO-PG Non-Consol.: Online Payment

    2.3.1 GMO-PG Non-Consol.: Online Payment Online payment revenue grew 19.9% from growth of existing customers and contribution of new projects GMO-PG non-consol. online payment revenue (quarterly) Projects contributing in 2H FY2024 (page 16 of Q2 FY2024) （¥ mil） % YoY Utility Local government DX supp

  18. Slide 18: 2.3.2 GMO-PG Non-Consol.: BaaS Support and EF

    2.3.2 GMO-PG Non-Consol.: BaaS Support and EF*1 BaaS support revenue grew 28.3% driven by the 65.6% increase in processing PF revenues Revenue of BaaS Support service*2（Q3） Progress of Processing PF projects % YoY Continue to work to expand stock revenues ■ Ginko Pay base system ■ Acquiring support

  19. Slide 19: 2.4 GMO-EP Non-Consol.: Online Payment (SME) and Medical DX

    2.4 GMO-EP Non-Consol.: Online Payment (SME) and Medical DX EP non-consol. revenue grew 6.6% driven by progress in revenue model transformation and GMO-MR grew 46.9% GMO-EP consol. revenue (quarterly) Progress of initiatives （¥ mil） % YoY GMO-EP +10.6％ EP payment and others Revenue model transformat

  20. Slide 20: 2.5 GMO-PS: Payment After Delivery/BNPL

    2.5 GMO-PS：Payment After Delivery/BNPL Profitability improved from normalization of credit costs; continued focus on building up new project pipeline GMO-PS revenue and OP (Q3) Trend of default rates Other revenue (Left axis) % YoY （¥ mil） Existing domain (Left axis) 800 OP (Right axis) +12.0% Conti

  21. Slide 21: 2.6 Consol. GMO-FG: CP Payment

    2.6 Consol. GMO-FG: CP Payment Recurring-model revenue grew 38.2%; expanding mobility payment in Tokyo metropolitan area Consol. GMO-FG revenue by business model*1 (quarterly）Expansion in mobility domain (adoption and trx. volume trend) （¥ mil） （’000 units） % YoY Expanding to 122 operations nation-w

  22. Slide 22: 2.7.1 Global: Loan Strategy

    2.7.1 Global: Loan Strategy Building up loan book in a sound and stable manner amidst changes in market environment Loan strategy Diversify portfolio by increasing small-amount loans to new borrowers. Increase loan amount to growing companies among the existing borrowers Portfolio expansion (image)

  23. Slide 23: 2.7.2 Global: Earnings Summary

    2.7.2 Global: Earnings Summary Revenue increased 32.3% from acquiring new borrowers and loan increases to high-quality borrowers, with the positive effect from yen depreciation Revenue and OP (Q3) Loan balance (end-June) Earnings highlight （¥ mil） % YoY （¥ mil） % YoY High growth from adding new Over

  24. Slide 24: 3. Sustainability

    3. Sustainability Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 24

  25. Slide 25: 3.1 Sustainability: Investments into Human Capital

    3.1 Sustainability: Investments into Human Capital Improve earnings power by continuous investment to human capital and employee returns OP ¥2.0bn 9.9x ¥20.3bn Nos. of partners （Employees*1） 233 3.5x 825 ¥24.62mil 2.8x OP per ¥8.78mil Employee ¥8.63mil Avg. ¥5.71mil annual 1.5x wage*2 FY2013 13/9 14

  26. Slide 26: 3.2 Sustainability: Environment

    3.2 Sustainability: Environment Received SBTi certification on aligning GHG emission reduction targets to 1.5℃ scenario SBT Initiative Certified GHG emissions reduction targets (Scope1, 2) （t-CO2） 2,000 Scope2（Scope1 is zero emissions） 1,600 Certified Japanese 1,200 Continuously maintain companies 8

  27. Slide 27: 4. Financial Highlights and Reference Materials

    4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 27

  28. Slide 28: 4.1.1 Consolidated Balance Sheet

    4.1.1 Consolidated Balance Sheet Increase in merchant deposits and MSB related assets due to scaling up of business Assets Liabilities and Equity (¥ mil) Cash (¥ mil) 350,000 corresponding to 350,000 deposits received 333,983 333,983 from merchants 300,000 292,346 300,000 292,346 273,407 273,407 116

  29. Slide 29: 4.1.2 Major Consolidated Financial Indicators (Annual Trend)

    4.1.2 Major Consolidated Financial Indicators (Annual Trend) Managing business while balancing profitability, capital efficiency and capital base J-GAAP IFRS Third party allotment Issued Euro Yen Euro Yen CB Due 2026 Raised ¥8.0bn CB Due 2023 Raised ¥21.1 bn （¥ bn） 45% Raised ¥17.5 bn 300 Euro Yen C

  30. Slide 30: 4.2 Consolidated Revenue and Operating Profit (Quarterly)

    4.2 Consolidated Revenue and Operating Profit (Quarterly) Consol. revenue Consol. operating profit （¥ mil） （¥ mil） 20,000 7,000 6,000 15,000 5,000 4,000 10,000 3,000 2,000 5,000 1,000 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY2021 9,767 10,121 10,646 11,132 FY2021 3,122 3,470 3,629 2,764 FY2022 11,857 12,201 12

  31. Slide 31: 4.3 Waterfall Chart of Consolidated Revenue

    4.3 Waterfall Chart of Consolidated Revenue (YoY, Cumulative Q3) Consol. revenue increased 15.3% from the high base effect of previous term’s payment terminal sales Consol. GMO-PG*3 GMO-PS*3 Consol. Overseas Consol. （% YoY） GMO-FG*1*2 GMO-EP*1*3 companies*3 （¥ bn） +13.3% +15.5% +17.1% +9.7% +80.1% +

  32. Slide 32: 4.4.1 Revenue by Business Model

    4.4.1 Revenue by Business Model (YoY, Cumulative Q3) Stock and fee each grew over 20%, spread on a recovery trend % YoY Factors* (¥ mil) Cumu. Q3 Cumu. Q3 54,196 FY2023 FY2024 Spread +14.3% +15.6% ＋ Online payment (GMO-PG) 50,000 47,000 ＋ Overseas lending ＋ CP payment 21,101 － Payment after Delivery

  33. Slide 33: 4.4.2 Consolidated Revenue by Business Model (Quarterly)

    4.4.2 Consolidated Revenue by Business Model (Quarterly) （¥ mil） 7,222 6,988 7,000 6,889 6,265 6,057 6,025 6,171 6,000 5,371 5,415 5,296 5,297 5,267 5,292 5,093 5,000 4,808 4,707 4,731 4,773 4,665 4,414 4,430 4,257 4,311 4,000 3,840 2,408 2,764 3,536 3,395 3,392 3,278 2,922 3,149 2,288 2,719 2,658 2

  34. Slide 34: 4.5 Segment Results (YoY, Quarterly)

    4.5 Segment Results (YoY, Quarterly) MSB profits increased 52.9% from the normalization of credit costs Segment revenue* Segment profit/loss* % YoY % YoY Q3 FY2023 Q3 FY2024 Q3 FY2023 Q3 FY2024 (¥ mil) (¥ mil) +28.3% +9.4% +25.7% +21.1% +22.3% +16.5% 7,000 +32.9% +0.3% 15,000 + GMO-MR +46.9% 6,000 +

  35. Slide 35: 4.6.1 FinTech Related Asset (Quarterly Trend)

    4.6.1 FinTech Related Asset (Quarterly Trend) FinTech related asset （¥ mil） 120,000 100,000 % YoY +4.0% 80,000 60,000 +3.8% 40,000 20,000 +38.7% 0 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 End-Q4 End-Q1 End-Q2 End-Q3 FY2020 FY2021 FY2021 FY2021 FY2021 FY2022

  36. Slide 36: 4.6.2 FinTech Revenue and Profits (Quarterly Trend)

    4.6.2 FinTech Revenue and Profits (Quarterly Trend) FinTech related revenues and profit trend （¥ mil） 4,000 % YoY 3,500 ＋10.5% 3,000 2,500 2,000 ＋10.8% 1,500 ＋52.9% 1,000 500 -10.3% ＋27.6% 0 20/4Q 21/1Q 21/2Q 21/3Q 21/4Q 22/1Q 22/2Q 22/3Q 22/4Q 23/1Q 23/2Q 23/3Q 23/4Q 24/1Q 24/2Q 24/3Q Domestic lend

  37. Slide 37: 4.7.1 Consolidated CoS and SG&A Ratio

    4.7.1 Consolidated CoS and SG&A Ratio (Quarterly Trend) Cost of sales ratio fluctuates depending on revenue mix (¥ mil) 18,313 18,096 17,785 18,000 50.0% 16,546 16,118 16,000 15,641 42.7% 40.9% 14,813 39.6% 14,000 38.5% 40.0% 37.5% 12,897 13,341 37.2% 37.0% 11,857 12,201 36.0% 34.8% 35.1% 33.8% 34.6

  38. Slide 38: 4.7.2 CoS/SGA Ratio of GMO-PG & GMO-EP

    4.7.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend) CoS ratio trending stably for online payment business (¥ mil) 10,681 10,511 10,158 10,000 50.0% 9,564 9,219 9,177 9,083 41.6% 8,498 41.2% 39.7% 7,977 40.7% 8,000 7,682 7,906 40.0% 7,122 6,858 36.6% 6,878 34.1% 6,709 6,370 33.3% 31.6% 32.5% 32.

  39. Slide 39: 4.8.1 Operating Stores, TRX Volume and Value

    4.8.1 Operating Stores, TRX Volume and Value Consol. TRX value reaches approx. ¥17.7 trn for the past 12 months Operating TRX Volume*2*3 TRX Value*2 Stores*1/Terminals*2 End-Q3 FY2024 Q3 FY2024 Past 12-mnth Q3 FY2024 Past 12-mnth - 1.86 bn 7.09 bn ¥4.7 trn ¥17.7 trn Consolidated % YoY - +18.1% +21.0

  40. Slide 40: 4.8.2 Waterfall Chart of Consol. TRX Value

    4.8.2 Waterfall Chart of Consol. TRX Value (YoY, Q3) CP and non-merchandise EC grows faster than market CP Online payment GMO-PG +14.8% Consol. +26.3% payment Market*1 +7.0% （% YoY） Non-merchandise EC Merchandise EC （¥ trn） GMO-PG +52.5% +20.0% +5.6% Market*1 +11.1% +9.4% +5.1% Other non- Merch- GMO

  41. Slide 41: 4.8.3 Distribution of Major Sectors (Q3)

    4.8.3 Distribution of Major Sectors (Q3) Balance both stability and growth through sector diversification Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis)* Revenue (Based on actual figures for Q3 FY2024) proportion The size of the circle represents the TRX value 30% 2

  42. Slide 42: 4.9.1 Consolidated Cash Flow Statement (Cumulative)

    4.9.1 Consolidated Cash Flow Statement (Cumulative) （¥ mil） Cumu. Q3 FY2024 (¥ mil) 50,000 Operating CF ： +31,261 Pretax profit +21,878 Deprec. & Amort. +2,427 40,000 Gain from sale of equity -1,624 method affiliate Trade and other receivables -4,673 30,000 Advances paid +583 Accrued revenues -3,869

  43. Slide 43: 4.9.2 Major Factors Affecting Consolidated Cash Flow Statement

    4.9.2 Major Factors Affecting Consolidated Cash Flow Statement Related liabilities & assets Impact from business expansion Payment Processing Business Sales proceeds of Deposits received Liability Operating CF merchants under the (liability) Yearly fluctuations can be large as annual TRX value of Re

  44. Slide 44: 4.10 Renewal of Website

    4.10 Renewal of Website Top page Information for Investor Sustainability https://www.gmo-pg.com/en/ https://www.gmo-pg.com/en/ir/ https://www.gmo-pg.com/en/sustainability/ Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 44

  45. Slide 45: 4.11 Sustainability: Social

    4.11 Sustainability: Social Acquired Childcare Supporting Corporate certificate of “Platinum Kurumin” Platinum Kurumin Of the 4,579 companies that are “kurumin” 645 certified, companies have been certified as “Platinum Kurumin” This certification is granted to companies that are “kurumin” certified

  46. Slide 46: 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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