Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — FY2019 Earnings Presentation

35 slides from Gmo Payment Gateway's earnings presentation, Nov 14, 2019

  1. Slide 1: Financial Results Briefing for FY2019

    Financial Results Briefing for FY2019 Key Message Monetizing large projects to lay the groundwork for the next growth stage November 14, 2019 The 59 th IR Meeting ＧＭＯ Payment Gateway, Inc. (Code: 3769; TSE-1st section) https://corp.gmo-pg.com/

  2. Slide 2: A cautionary note about the contents of the document

    A cautionary note about the contents of the document 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 14, 2019. However, please note that they are subject to change wit

  3. Slide 3: Agenda

    Agenda 1. Wrap-Up of FY2019 2. Summary of financial results for FY2019 3. FY2020 guidance 4. Future initiatives and growth strategy 5. Financial highlights 6. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 3

  4. Slide 4: Wrap Up of FY2019

    1. Wrap Up of FY2019 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Management requirements and initiatives to reach OP ¥25bn

    1.1 Wrap Up of FY2019 Management requirements and initiatives to reach OP ¥25bn 2005 2010 2015 2020 2025 OP ¥0.2bn ¥1.0bn ¥3.0bn ¥10.0bn ¥25.0bn （Management ＋¥0.8bn ＋¥2.0bn ＋¥7.0bn ＋¥15.0bn target） Monetize large projects Focus Themes Alliances & large acquisitions EC Merchant acquisitions of financ

  6. Slide 6: Summary of financial results for FY2019

    2. Summary of financial results for FY2019 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 6

  7. Slide 7: Financial Results Summary (IFRS)

    2.1 Financial Results Summary （IFRS） Revenues up 21.6% YoY, OP up 26.7% YoY; in line with guidance % FY2018 FY2019 FY2019 Full （mil. Yen） % YoY achievement Actual Actual Year guidance vs. guidance Revenue 26,417 32,121 ＋21.6％ 31,850 100.9％ Operating Profit 6,550 8,301 ＋26.7％ 8,300 100.0% Profit attr

  8. Slide 8: Transaction volume and value trend

    2.2 Transaction volume and value trend Continue to achieve over 25% growth in volume and value TRX Vol. （mil.） 500 TRX Value ① FY2019 TRX Value: Up 26.7% YoY TRX Value ② （Yen bn） 1,2001,200  Sequential increase in 4Q, despite the usual 3Q→4Q drop TRX Volume ① 400 ② FY2019 TRX Volume: Up 29.5％ YoY 1

  9. Slide 9: Factors affecting financial results

    2.3 Factors affecting financial results MK slowdown offset by high-growth businesses to achieve OP growth of 26.7% YoY Revenue （Mil. Yen.） +21.6％ 32,000 （＋）Robust growth of online and offline payments （＋）Strong trends of GMO Payment After Delivery, Global Lending & Factoring 30,000 （＋）Expansion of b

  10. Slide 10: FY2019 Revenue by business model

    2.4 FY2019 Revenue by business model Mainstay business is strong; the sluggish fee revenue already addressed Spread ＋23.3％ YoY （Mil. Yen） （+）Strong online payment 30,000 （+）Growth of GMO Payment After Delivery （+）Expansion of global lending （－）Phased scaling back of finance lease 25,000 13,694 Fee ＋

  11. Slide 11: FY2019 Revenue and OP by segment

    2.5 FY2019 Revenue and OP by segment Payment Processing and MSB strong; offsets Payment Enhancement weakness ■Revenue by segment ■Operating Profit by segment （）：% YoY Total:+21.6％ Consol. OP ＋26.7％ Challenge （Mil. Yen） 5,832 （+8.8％） #2 (after adjustments/eliminations) 30,000 （－）Impact of EMS service

  12. Slide 12: FY2020 Forecast

    3. FY2020 Forecast Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 12

  13. Slide 13: Consolidated Financial Forecasts (IFRS)

    3.1 Consolidated Financial Forecasts (IFRS) Sustain over 25% CAGR OP growth ■ FY2020 Consolidated Financial forecast (IFRS) （Unit: Mil. Yen, % YoY） FY2020 FY2019 Act. % YoY Guidance Challenge Revenue 32,121 36,618 ＋14.0％ #3 （Adj. +19.3％ YoY excl. MK and GMO Payment After Delivery Operating Profit 8,

  14. Slide 14: Revenue growth rate by company

    3.2 Revenue growth rate by company Target topline growth rate of CAGR above 25% Revenue FY2019 FY2020 Guidance Measures in place FY2021 Target GMO-PG （Payment Above＋20％ Above ＋20％ Processing） GMO-PG Above＋25％ Above＋25％ （Money Service） Change of President Challenge GMO-EP Above＋10％ ±0％ to strengthen

  15. Slide 15: The challenges and its improvement measures

    3.3 The 4 challenges and its improvement measures Drastic measures in place to address the challenges we recognized during the previous fiscal year Improvement Reference Challenge Measures page: Challenge Sluggish fee revenue Addressed 4.2 #1 （FY2019 ＋16.8％ YoY） Period: Sep. 2021 onwards～ Action: PF

  16. Slide 16: Revenue image for this fiscal year

    3.4 Revenue image for this fiscal year Multiple factors affecting revenue growth rates but stable OP growth ■ Factors affecting revenue growth 1. Skewing effect by longer lead time for development and service start-up as project sizes scales up 2016 2017 2018 2019 2020 2021 2022 Lengthening of lead

  17. Slide 17: Future Initiatives and Growth Strategy

    4. Future Initiatives and Growth Strategy Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 17

  18. Slide 18: Management Targets

    4.1 Management Targets Target above-market growth from 2020 onwards 2010 2015 2020 2025 BtoC EC Mrkt EC penetration 2.4％ ≒ 2x 4.7％ ≒ 1.5x ≒7％ ≒ 2x ≒15％ BtoC EC Mrkt Mrkt size ¥7.7 tr. ≒ 2x ¥13.7 tr. ≒ 1.5x ≒¥2.2 tr. ≒ 2x ≒¥45 tr. TRX Value ¥0.8 tr. ≒ 2x ¥1.6 tr. ≒ 3.5x ≒¥6 tr. ≒ 3x ≒¥18 tr. ※ OP ¥1.

  19. Slide 19: Broader EC

    4.2 Broader EC Resolving challenges and the implementing the 5 initiatives to realize above ¥18bn OP in 2025 ■Initiatives to expand of non-merchandise and OP growth image merchandise EC Merch. EC Non-merch. EC FY2019 Non-merchandise EC +36.7％ YoY 2025 Expand revs Response to ¥18 bn～ Implement Challe

  20. Slide 20: FinTech

    4.3 FinTech Realize above ¥3bn OP contribution from expanding Payment After Delivery, Factoring and global Lending OP Growth Image ■Revenue trend of major services （％: change vs. FY2018） Domestic Lending ＋31.4％ Overseas Lending＋1479.5％ 2025 Factoring ＋2402.3％ ＋46.3％ PaD*（2 wk period） ¥3.0bn PaD: Pay

  21. Slide 21: Cashless

    4.4 Cashless Realize over ¥1bn OP contribution in 2025 from standardizing PFs for Financial Institutions ■ Expanding Stock Revenue to financial institutions OP growth image by quarter Total ＋87.7％ YoY 2025 YoY ¥1bn～ ＋153.2％ 2019 ¥0.3bn （As of November 14, 2019） YoY Basic Policy ＋70.7％ Increase bank

  22. Slide 22: IoT

    4.5 IoT Realize over ¥2bn OP contribution in 2025 from unattended markets OP growth image ■Unattended Markets Food & Beverage Ticket Fare Office Coffee Vending machines Machines Adjustment Machine etc. 2025 ※ Mrkt Size ¥2.083 tr. ¥1.826 tr. ¥1 tr. ¥446.4 bn ¥2bn～ 2019 ■Initial revenues in offline ma

  23. Slide 23: Global: Focus markets are India, Indonesia and US

    4.6.1 Global: Focus markets are India, Indonesia and US Expand lending asset by establishing offices and collaborating with local top-tier FinTech companies ■ Investment Portfolio and Revenue size by business Payment processing Focus Market② Lending（FY2018） Lending (FY2019) Focus Market③ Focus Marke

  24. Slide 24: Global: MACROKIOSK

    4.6.2 Global: MACROKIOSK Revamp business in Malaysia and neighboring countries and strengthen new services ■ MACROKIOSK: analyzing challenges using logic tree Business Region Client Strength Challenges and Initiatives Established collaboration with SE Asian telco Stricter regulation on carriers; MPS

  25. Slide 25: Financial Highlights

    5. Financial Highlights Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 25

  26. Slide 26: Revenue by business model

    5.1 Revenue by business model Quarterly trend of revenue by business model ※ J-GAAP IFRS （Mil. Yen） 3,595 3,468 3,500 3,379 3,250 3,072 3,059 2,946 2,971 2,997 3,000 2,861 2,691 2,8012,705 2,773 2,666 2,653 2,471 2,500 2,436 2,360 2,101 2,004 2,000 1,895 1,809 1,527 1,500 1,441 1,383 1,227 1,259 1,2

  27. Slide 27: Balance Sheet Changes

    5.2 Balance Sheet Changes Increase in deposits received and MSB-related assets Assets Liabilities and Equity （Mil. Yen） （Mil. Yen） 139,990 139,990 120,000 116,858 120,000 116,858 46,752 52,013 100,000 100,000 38,800 42,033 84,338 84,338 15,433 80,000 80,000 27,171 14,327 27,533 36,497 16,745 60,000

  28. Slide 28: Major Quarterly KPIs

    5.3 Major Quarterly KPIs Group-wide annual TRX value reaches ¥4.6 trillion ※1 Operating stores: 111,425 stores, TRX volume approx. 480 mil., TRX value approx. ¥1.1 trillion. （¥100 mil.) （stores） 11,000 （Reference）Cumulative trailing 12-mnth TRX Value approx. ¥4.29 trillion 120,000 TRX value reaches

  29. Slide 29: Reference materials

    6. Reference materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 29

  30. Slide 30: FinTech: Assets and profit growth

    6.1 FinTech：Assets and profit growth Rapid growth of global lending and margin improvement of GMO PaD （％：YoY change） ■MSB-related assets ■Segment Revenue ■Segment OP （Mil. Yen） 1,972 +21.4％ +19.6％ －42.9％ －41.8％ Impact from +24.1％ ＋43.2％ change in Provisions for doubtful +38.0％ 1,377 accounts +12.9％

  31. Slide 31: Revenue trend by business model (annual)

    6.2 Revenue trend by business model (annual) Pursue balanced growth of each business model （Mil. Yen） 40,000 J-GAAP IFRS 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 14,000 Fee 12,000 10,000 8,000 6,000 4,000 Stock 2,000 0 Initial 2004/9 2005/9 2006/9 20

  32. Slide 32: Quarterly trend of CoS and SGA ratio

    6.3.1 Quarterly trend of CoS and SGA ratio CoS ratio fluctuates with changes in sales mix *Figures with asterisk exclude outsourcing expense related to MSB. These outsourcing expenses are not booked in SG&A from December 2017 (Q1) due to IFRS adoption. J-GAAP IFRS ※47.2％ （Mil. yen) ※44.5％ 8,246 8,16

  33. Slide 33: Quarterly trend of PG and EP's CoS and SGA ratio

    6.3.2 Quarterly trend of PG and EP’s CoS and SGA ratio CoS ratio fluctuates with changes in sales mix （Mil. Yen） 50.9% 8,000 48.8% 50.0% 47.4% 44.8% 44.9% 44.8% 45.3% 7,000 42.5% 41.3% 40.0% 6,000 36.8% 36.5% 33.5% 36.7% 33.1% 36.7% 5,032 5,142 4,840 5,000 34.0% 4,663 4,816 4,297 4,384 30.0% 3,937 4

  34. Slide 34: Consolidated CF Statement

    6.4 Consolidated CF Statement ■FY2019 changes （Mil. Yen） 20,000 J-GAAP IFRS (Mil. Yen) 18,000 Operating CF: ＋¥1,311 Pretax profit +¥8,039 16,000 Chgs. in rcvbles －¥516 14,000 Advances paid －¥10,229 12,000 Accrued income －¥5,848 10,000 Chgs. In payables +¥131 Accrued expenses ＋¥278 8,000 Deposits rec

  35. Slide 35: Thank You Very Much

    T h a n k Yo u Ve r y M u c h GMO Payment Gateway, Inc. (3769; Tokyo Stock Exchange, Section 1) URL： https://corp.gmo-pg.com /en /ir/ For inquiries please contact our IR team at the telephone number below: Corporate Value Creation Strategy Division (IR Department) TEL: +81-3-3464-0182

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