Gmo Payment Gateway, Inc. · TSE:3769
Gmo Payment Gateway — FY2023 Earnings Presentation
49 slides from Gmo Payment Gateway's earnings presentation, Nov 14, 2023
Slide 1: Financial Results Briefing for FY2023
Financial Results Briefing for FY2023 Strengthening the business foundation to sustain operating profit CAGR growth of 25% November 14, 2023 75th Investor Meeting
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 November 14, 2023. Please note that the contents are subject to change
Slide 3: Agenda
Agenda 1. Summary of Financial Results for FY2023 2. Earnings Guidance for FY2024 3. Growth Strategy and Initiatives in Focus Areas 4. Sustainability 5. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3
Slide 4: 1. Summary of Financial Results for FY2023
1. Summary of Financial Results for FY2023 Copyright Copyright (C) (C) 1995 1995 GMO GMO Payment Gateway, Inc. Payment Gateway, Inc. All All Rights RightsReserved. Reserved. 4
Slide 5: 1.1 Summary of Consolidated Results
1.1 Summary of Consolidated Results Exceeded 25% growth by monetizing and acquiring projects that were initially unconfirmed at the start of the FY FY2023 Guidance Q4 FY2023 （¥ mil） FY2022 FY2023 % YoY （Achievement %) (% YoY) 59,100 16,118 Revenue 50,298 63,119 +25.5% (106.8%) (+20.8%) 10,204 Gross
Slide 6: 1.2 Overview of FY2023
1.2 Overview of FY2023 Progress in laying groundwork for a high and sustainable growth while tackling challenges Highlights Challenges and responses ・Achieved plans with revenue up 25% YoY, OP up 25% YoY ・Merchandise EC transaction value growth stalled at 8.6％ Consol. (revenue excl. initial is up 20
Slide 7: 1.3 Waterfall Chart of Consol. TRX Value (Annual)
1.3 Waterfall Chart of Consol. TRX Value (Annual) Online transaction value grew 21.1% YoY from normalizing growth rates in utilities Offline Online payment GMO-PG +21.1% Consol. +31.8% payment Market*1 +8.7% （% YoY） Non-merchandise EC Merchandise EC （¥ trn) GMO-PG +68.6% +28.9% +8.6% Market*1 +14.7%
Slide 8: 1.4.1 Waterfall Chart for Consol. Revenue (Annual)
1.4.1 Waterfall Chart for Consol. Revenue (Annual) Growth of 25.5% from offline and BNPL offsetting the low growth of merchandise EC GMO-EP (% YoY) GMO-FG Consol.*1*2 GMO-PG*3 GMO-PS*3 Consol.*1*3 Consol. （¥ bil） +54.5% +18.2% +24.6% +3.8% +25.5% ¥63.1 bn Other 60 GMO Payment After Delivery BaaS MSB
Slide 9: 1.4.2 Waterfall Chart for Consol. OP and Pre-tax Profit (Annual)
1.4.2 Waterfall Chart for Consol. OP and Pre-tax Profit (Annual) OP grew 25.0% from revenue growth offsetting the increase in some SG&A items OP Waterfall Chart Pre-tax Profit Waterfall Chart （¥ mil） （¥ mil） Up 25.0% YoY Down 43.2% YoY Equity GP SGA Financial Financial method OP Decline in gain on i
Slide 10: 1.5.1 GMO-PG Non-consolidated Performance
1.5.1 GMO-PG Non-consolidated Performance Revenue grew 14.2% from hiatus caused by large-scale projects GMO-PG Non-consolidated Revenue & OP*1 （¥ mil） MSB revenue (left axis) Over 25% YoY BaaS Support revenue (left axis) % YoY Non-merchandise EC revenue (left axis) 6,000 Q4 FY22 Q3 FY23 Q4 FY23 百万 百
Slide 11: 1.5.2 Performance of GMO-EP, GMO-PS and GMO-FG
1.5.2 Performance of GMO-EP, GMO-PS and GMO-FG FY2023 snapshot: EP earnings bottomed out, PS earnings improving and FG’s high growth continues Consol. GMO-EP*1*2 GMO-PS*2 Consol. GMO-FG*1*3 (% YoY) Q4 FY22 Q4 FY23 Q4 FY22 Q4 FY23 Q4 FY22 Q4 FY23 Revenue +0.7% +7.8% Revenue +10.5% +25.4% Revenue +26.
Slide 12: 1.6 Revenue by Business Model (Annual)
1.6 Revenue by Business Model (Annual) Fee revenue grew 30.1% and initial grew 55.5% from expansion of offline domain % YoY Factors* (¥ mil) 63,199 FY2022 FY2023 60,000 Spread +13.1% +14.7% ＋ Online payment（PG） ＋ Overseas lending 50,298 24,520 － Online payment（EP） 50,000 － GMO Payment After Delivery
Slide 13: 1.7 Segment Results (Annual)
1.7 Segment Results (Annual) MSB profit grew only 11.6% due to higher credit cost, etc., despite revenue increase in all segments Segment Revenue Segment Profit % YoY % YoY (¥ mil) (¥ mil) FY2022 FY2023 FY2022 FY2023 63,119 +20.7% +25.5% 25,000 20,312 +25.1% +25.0% 60,000 2,751 14,088 1,149 +31.3% +
Slide 14: 2. Earnings Guidance for FY2024
2. Earnings Guidance for FY2024 Copyright Copyright (C) (C) 1995 1995 GMO GMO Payment Gateway, Inc. Payment Gateway, Inc. All All Rights RightsReserved. Reserved. 14
Slide 15: 2.1 Earnings Forecast for FY2024
2.1 Earnings Forecast for FY2024 OP target for FY2024 is ¥25.0 bn Earnings forecast for FY2024 （¥ mil） FY2023 FY2024 Forecast % YoY Revenue 63,119 73,286 +16.1% Gross Profit 39,985 45,496 +13.8% Operating Profit 20,312 25,000 +23.1% Pre-tax Profit 20,636 23,904 +15.8% Profit 13,477 15,523 +15.2% att
Slide 16: 2.2 Explanation of Revenue Guidance
2.2 Explanation of Revenue Guidance Growth rate of 16.1% reflects hard comps and an uncertain market environment Revenue: forecast and actual Uncertain business environment assumptions ・Merchandise EC market/Sluggish SMEs +XX% ・Persistent inflation/decline in real wages (¥ mil) Forecast Actual ・Chan
Slide 17: 2.3 Post FY2024 Policy
2.3 Post FY2024 Policy Target OP CAGR of 25% after strengthening business foundations Image of revenue trend and basic policy Strengthen business Medium term management target foundation Trend line of revenue growth at OP CAGR 25% ・Monetize large-scale projects cruising speed ・Advance sales structur
Slide 18: 3. Growth Strategy and Initiatives in Focus Areas
3. Growth Strategy and Initiatives in Focus Areas Copyright Copyright (C) (C) 1995 1995 GMO GMO Payment Gateway, Inc. Payment Gateway, Inc. All All Rights RightsReserved. Reserved. 18
Slide 19: 3.1 Our Track Record of Growth
3.1 Our Track Record of Growth OP growth rate accelerated together with the expansion of business domains Operating profit actual and targets; Incremental OP increase*1*2 （¥ bil） 30 3 years +10.0 (approx. ¥3.3bn/year) 20.3 20 5 years +7.0 (approx. ¥1.4bn/year) 10.3 10 5 years 5 years +1.8 +0.8 (appr
Slide 20: 3.2 Medium Term Targets and Growth Strategy
3.2 Medium Term Targets and Growth Strategy Achieve medium term target by deploying strategies for large- customer and mass-market segments Operating profit trend and target; Growth strategy*1*2 (¥ bil) 80 Large customers Mass market CAGR 25% growth Enablers of social transformation Companies/Indivi
Slide 21: 3.3 Sources of Growth
3.3 Sources of Growth One-stop support of merchant’s growth through product scalability (resulting in enlarging project size) Value proposition to merchants/users: examples of products offered GMO-PG 3.4 Examples of supporting merchant’s growth Strengthen online sales Reduce payment operation burden
Slide 22: 3.4 GMO-PG Non-consolidated
3.4 GMO-PG Non-consolidated Accelerate industry strategy by leveraging external environment Requirement for sustaining revenue growth Size of target market and GMV target for FY2028 FY2023 FY2028 ・Enlarge project size Market size Market size (forecast) ¥102 trn ・Improve efficiency of acquiring new h
Slide 23: 3.5 Consol. GMO-EP: SME Domain
3.5 Consol. GMO-EP: SME Domain Improved growth rate with new business pillar Requirement for sustaining revenue growth Size of target market and GMV target for FY2028 FY2023 FY2028 ・Expand from merchandise to non-merchandise domain Market size Market size (forecast) ¥17.1 trn ・Expand transaction sha
Slide 24: 3.6 GMO-PS: BNPL
3.6 GMO-PS： BNPL Improve growth and profitability by expanding business model Requirement for sustaining revenue growth Size of target market and GMV target for FY2028 FY2023 FY2028 ・Inroads into new domains Market size (forecast) Market size ・Expand business model B2C BNPL approx. ¥2.4 trn B2C BNPL
Slide 25: 3.7 Consol. GMO-FG: Offline payment
3.7 Consol. GMO-FG：Offline payment Continue growth by driving new businesses in a growing market Requirement for sustaining revenue growth Size of target market and GMV target for FY2028 FY2023 FY2028 ・Expand recurring-model revenue Market size (forecast) ¥125 trn Market size ¥88 trn ・Expand market
Slide 26: 3.8.1 Global
3.8.1 Global Expand investments and lending for medium-to-long term overseas FinTech business expansion Requirement for sustaining revenue growth Initiatives for medium-to-long term revenue growth ・Strengthen local corporate structure for long term growth ・Accelerate buildout of outstanding portfoli
Slide 27: 3.8.2 Global: Financial Results Summary
3.8.2 Global: Financial Results Summary Revenue up 37.2% (incl. weak yen benefit) by growing loan book from strengthening reach to promising companies Revenue*1 & OP*2 (annual) Loan balance (end-Sep) New borrowers % YoY % YoY (¥ mil) (¥ mil) +37.2% +37.1% 1,400 14,000 Progressing towards ¥14.0 bn ra
Slide 28: 3.8.3 Global: Investment Strategy
3.8.3 Global: Investment Strategy Drive investment to promising category-creators by leveraging sluggish investment environment Card issuing Lending Tech market market ¥40 trn*2 ¥40 trn*1 (2022) Payment market (2021) ¥270 trn*3 (2022) Several deals in the pipeline KYC Tech market ¥0.2 trn*2 HR Tech
Slide 29: 4. Sustainability
4. Sustainability Copyright Copyright (C) (C) 1995 1995 GMO GMO Payment Gateway, Inc. Payment Gateway, Inc. All All Rights RightsReserved. Reserved. 29
Slide 30: 4.1 Sustainability Management: Review of FY2023
4.1 Sustainability Management: Review of FY2023 Contribute to realize a sustainable society by resolving social issues with payment Promoting sustainability management ・Identified materiality (SEE page 31) ・Selected as constituent of several FTSE ESG indices*1 ・Disclosed information on climate chang
Slide 31: 4.2 Materiality
4.2 Materiality Identified materiality issues to be prioritized ❶ Innovation ～ Social advancement and customer’s growth through creation of payment innovations～ Provide a wide array of innovations centered on payment, a necessary step in many Social economic activities, that support operational effi
Slide 32: 5. Financial Highlights and Reference Materials
5. Financial Highlights and Reference Materials Copyright Copyright (C) (C) 1995 1995 GMO GMO Payment Gateway, Inc. Payment Gateway, Inc. All All Rights RightsReserved. Reserved. 32
Slide 33: 5.1.1 Consolidated Balance Sheet Changes
5.1.1 Consolidated Balance Sheet Changes Increase in deposits received and MSB related assets Assets Liabilities and Equity (¥ mil) (¥ mil) 300,000 292,346 300,000 292,346 273,407 273,407 250,000 250,000 91,071 215,455 133,658 215,455 85,562 113,967 200,000 200,000 34,364 78,251 35,252 104,523 150,0
Slide 34: 5.1.2 Major Consolidated Financial Indicators (Annual Trend)
5.1.2 Major Consolidated Financial Indicators (Annual Trend) Strengthened equity base with the expansion of MSB J-GAAP IFRS Third party allotment Issued Euro Yen Euro Yen CB Due 2026 Raised ¥8.0bn CB Due 2023 Raised ¥21.1 bn （¥ bil） 45% Raised ¥17.5 bn 300 Euro Yen CB Due 2023 Fully converted 40% 25
Slide 35: 5.2 Consolidated Revenue and Operating Profit (Quarterly)
5.2 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
Slide 36: 5.3 Waterfall Chart for Consol. Revenue (Q4 standalone)
5.3 Waterfall Chart for Consol. Revenue (Q4 standalone) 20.9% growth from offline and BNPL offsetting the low growth of merchandise EC Consol. (% YoY) Consol.GMO-FG*1*2 GMO-PG*3 GMO-PS*3 GMO-EP*1*3 Consol. （¥ bn） +37.1% +14.2% +25.4% +7.8% +20.9% ¥16.1bn 16 Other GMO Payment After 15 BaaS Delivery M
Slide 37: 5.4 BaaS Support and Offline Payment Revenue (Annual Trend)
5.4 BaaS Support and Offline Payment Revenue (Annual Trend) Ginko Pay/Processing PF revenue*1 GMO-FG/CAS Revenue by business model*2 % YoY % YoY Q1 FY2024 Large project starts （¥ mil） Initial Recurring-model*3 12,000 +55.2% 5,000 ＋53.0% FY2023 % YoY Spread Total 10,000 4,000 ＋21.2% +12.6% Ginko Pay
Slide 38: 5.5 Consolidated Revenue by Business Model (Quarterly)
5.5 Consolidated Revenue by Business Model (Quarterly) （¥ mil） 6,265 6,057 6,025 6,171 6,000 5,371 5,415 5,296 5,297 5,000 4,808 4,773 4,707 4,731 4,665 4,414 4,430 4,290 4,257 4,311 4,000 3,840 3,646 3,672 3,536 2,408 3,395 3,278 3,015 3,149 2,922 2,288 3,000 2,713 2,487 2,669 2,527 2,559 2,591 2,0
Slide 39: 5.6 Segment Results (Q4 standalone)
5.6 Segment Results (Q4 standalone) All segments grew revenues Segment Revenue Segment Profit % YoY % YoY (¥ mil) (¥ mil) Q4 FY2022 Q4 FY2023 Q4 FY2022 Q4 FY2023 6,000 16,118 +19.8% +20.8% 4,290 +25.2% +24.0% 481 15,000 5,000 +21.5% +40.2% 81 Positive +2,034.1% 13,341 3,695 316 3,461 + GMO-MR 3 prof
Slide 40: 5.7.1 FinTech Related Asset
5.7.1 FinTech Related Asset FinTech related asset (quarterly) （¥ mil） 100,000 % YoY 80,000 +11.6% 60,000 40,000 +19.3% 20,000 +35.9% 0 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 End-Q4 FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY20
Slide 41: 5.7.2 FinTech Revenue and Profit (Quarterly)
5.7.2 FinTech Revenue and Profit (Quarterly) FinTech segment revenue and profit （¥ mil） 3,500 % YoY ＋18.2% 3,000 2,500 2,000 ＋25.4% 1,500 1,000 ＋18.6% 500 ＋5.9% ＋44.3% 0 20/1Q 20/2Q 20/3Q 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 Lending (Japan/Overseas) Early Pay
Slide 42: 5.8.1 Consolidated CoS and SG&A Ratio (Quarterly)
5.8.1 Consolidated CoS and SG&A Ratio (Quarterly) Cost of sales ratio fluctuates depending on revenue mix (¥ mil) * 16,546 16,118 16,000 15,641 14,813 50.0% 14,000 13,341 42.7% 41.2% 37.5% 12,897 40.9% 39.6% 12,201 38.5% 40.0% 11,857 37.0% 12,000 36.8% 11,132 37.2% 36.7% 35.2% 33.8% 34.8% 34.7% 33.9
Slide 43: 5.8.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly)
5.8.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly) CoS ratio trending stably for online payment business (¥ mil) 9,564 9,219 9,177 9,083 9,000 50.0% 8,498 45.2% 7,977 8,000 7,682 7,906 41.6% 41.2% 40.7% 39.7% 7,122 6,858 6,878 40.0% 7,000 6,709 36.6% 6,370 34.2% 6,110 6,000 33.3% 5,271 32.5% 31.6% 3
Slide 44: 5.9.1 Operating Stores, TRX Volume and Value
5.9.1 Operating Stores, TRX Volume and Value Consol. TRX value reaches approx. ¥14.9 trn in the past 12 months Operating TRX Volume*2*3 TRX Value*2 Stores*1/Terminals*2 End-Q4 FY2023 Q4 FY2023 Past 12-mnth Q4 FY2023 Past 12-mnth - 1.67 bn 6.20 bn ¥3.9 trn ¥14.9 trn Consol. % YoY - +25.8% +27.6% +28.
Slide 45: 5.9.2 Waterfall Chart for Transaction Value (Q4 standalone)
5.9.2 Waterfall Chart for Transaction Value (Q4 standalone) Online payment grew 19.2% due to electricity rate cuts (% YoY) Offline Online payment GMO-PG +19.2% Consol. +28.9% payment Market*1 +11.4% Non-merchandise EC Merchandise EC GMO-PG +58.4% +24.8% +8.6% （¥ trn） Market*1 +14.8% +20.2% +4.8% 4.0
Slide 46: 5.9.3 Distribution of major sectors (Q4 Standalone)
5.9.3 Distribution of major sectors (Q4 Standalone) Balance both stability and growth through sector diversification Revenue share by industry (vertical axis)/ Revenue growth rate (horizontal axis)* (Q4 FY2023 standalone Actual) Revenue The size of the circle represents the TRX value proportion 30.0
Slide 47: 5.10.1 Consolidated Cash Flow Statement (Annual)
5.10.1 Consolidated Cash Flow Statement (Annual) （¥ mil） FY2023 cumu. changes by item (¥ mil) 50,000 Operating CF： +6,128 Pretax profit +20,636 Depre. & Amort. +2,413 40,000 Trade receivables -4,624 Advances paid -8,964 Accrued revenues -3,167 30,000 Accrued expenses +2,327 Deposits received +5,821
Slide 48: 5.10.2 Changes in consolidated cash flow statement
5.10.2 Changes in 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 Representative
Slide 49: 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