Gmo Payment Gateway, Inc. · TSE:3769

Gmo Payment Gateway — Q3 FY2022 Earnings Presentation

52 slides from Gmo Payment Gateway's earnings presentation, Aug 10, 2022

  1. Slide 1: Financial Results Briefing for Q3 FY2022

    Financial Results Briefing for Q3 FY2022 Growing above expectation thanks to a business portfolio re sil i ent against macro f luctuations August 10, 2022 70 th Investor Meeting Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved.

  2. Slide 2: Agenda

    Agenda 1. Summary of Financial Results Q3 FY2022 2. Growth Strategy and Initiatives in Focus Areas 3. Sustainability 4. Financial Highlights and Reference Materials Following abbreviations are used in this material. GMO-PG: GMO Payment Gateway; GMO-EP: GMO Epsilon; GMO-MR: GMO Medical Reservation Te

  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 August 10, 2022. Please note that the contents are subject to change without prior notice in the event of

  4. Slide 4: 1. Summary of Financial Results for Q3 FY2022

    1. Summary of Financial Results for Q3 FY2022 Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 4

  5. Slide 5: Earnings Summary

    1.1 Earnings Summary Steady progress towards achieving full year guidance, Net Profit increased by 204.6% due to share divestment FY2022 FY2022 Q3 IFRS FY2021 Q3 FY2022 Q3 % YoY Guidance standalone （¥ Mil） Cumulative Cumulative （Achievement %） （% YoY） 50,000 12,897 Revenue 30,535 36,956 +21.0% (73.9

  6. Slide 6: Waterfall Chart for Consol. TRX Value (Q3 standalone)

    1.2 Waterfall Chart for Consol. TRX Value (Q3 standalone) Achieved above-market growth rate from increase in offline and non-merchandise payments （％ YoY） Offline payment Online payment total ＋28.9% Consol. ＋42.8% （¥ trn） Non-merchandise EC Merchandise EC Outperform Company ＋111.9% +53.1% +8.9% ＋93.2

  7. Slide 7: Revenue by Business Model (Q3 standalone)

    1.3 Revenue by Business Model (Q3 standalone) Robust fee revenue from increase in offline payments, etc. % YoY （¥ Mil） Q3 FY2021 Q3 FY2022 14,000 Spread ＋9.7％ ＋12.5％ 12,897 ＋ Offline payment 12,000 ＋ Early Payment service 10,646 ＋ Overseas Lending 5,297 10,000 － Online payment － GMO Payment After De

  8. Slide 8: Segment Results (Q3 standalone)

    1.4 Segment Results (Q3 standalone) Each segment making steady progress towards full year guidance ＋19.9％ YoY Segment Revenue Consol. ＋21.1％ YoY Segment Profit （after consol. adjustments) （¥ Mil） （¥ Mil） 12,897 259 ＋38.2％ YoY 70 ＋144.9％ YoY 12,000 ＋ Strong GMO-MR 5,000 ＋ Strong GMO-MR ＋ Growth of on

  9. Slide 9: GMO-PG Non-consolidated Performance (Quarterly Trend)

    1.5.1 GMO-PG Non-consolidated Performance: (Quarterly Trend) Revenue up 19.2%; non-merchandise up by 20% despite the hard comps against last fiscal year’s high growth GMO-PG Non-consolidated Revenue and OP ※1 % YoY （¥ Mil） Q3 FY2021 Q3 FY2022 7,000 Revenue at a certain merchant (left axis) 4,000 Rev

  10. Slide 10: Performance of GMO-EP, GMO-PS and GMO-FG (Quarterly Trend)

    1.5.2 Performance of GMO-EP, GMO-PS and GMO-FG (Quarterly Trend) ※1 EP/PS merchant acquisitions increasing from progress on initiatives, GMO-FG continues strong performance Revenue (right axis) KPI (left axis) GMO-EP Consol. GMO-PS GMO-FG Consol. Revenue ＋4.6％ YoY Revenue ＋8.4％ YoY Revenue ＋47.2％ Yo

  11. Slide 11: Review of Pre-COVID Priority Initiatives

    1.6.1 Review of Pre-COVID Priority Initiatives Strategies formulated pre-COVID are progressing as expected Plan realized and Results Briefing material for FY2019 Evaluation targets achieved criteria Targets unachieved Recovery Plan Priority Initiatives Review and evaluation （As of Nov. 14, 2019) （As

  12. Slide 12: Transformation of Business Structure

    1.6.2 Transformation of Business Structure Achieved above-market growth from strengthening offline and non-merchandise domains Q3 standalone GMV of offline & online payment (merchandise+non-merchandise) （¥ trn）2.5 % YoY Online payment (merchandise) Offline payment +111.9% GMO-FG Consol. Online payme

  13. Slide 13: 2. Growth Strategy and Initiatives in the Focus Areas

    2. Growth Strategy and Initiatives in the Focus Areas Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 13

  14. Slide 14: Expansion of GMV = Growth of Client's Business

    2.1 Expansion of GMV = Growth of Client’s Business Achieved GMV of over ¥10 trn more than a year ahead of plans; aim to achieve GMV of over ¥20 trn by 2025 （¥ trn） 2025 Target 20 Consol. ＝ Mediating transactions as a GMV Value payment platformer GMV ¥20 trn～ OP ¥25.0 bn～ ＝ Supporting the client’s bu

  15. Slide 15: Driving Social Innovation

    2.2 Driving Social Innovation Support innovation for client’s tackling social issues and transformations Social Issues Depopulation/ Climate Resource Inflation/ Inequality/ Old Values/ Pandemic Aging Society/Labor Macro Customs Change Depletion Poverty Shortage/Rural fluctuation (commercial) depopul

  16. Slide 16: Business Portfolio

    2.3.1 Business Portfolio Sustain medium-to-long-term growth by selection and focus on businesses that help achieve management targets Growth phase distribution of each product Size of circle = revenue size (revenue up to cumulative period to Q3 FY2022) Seeding phase Expansion phase Re-acceleration p

  17. Slide 17: Business Portfolio: Domestic Investment Strategy

    2.3.2 Business Portfolio: Domestic Investment Strategy Improve enterprise value by enhancing management’s execution capability by pursuing proprietary PMI; expand investment when opportunity arises Timing of Group-Join and image of increase in post-succession corporate value Group Join ・Business suc

  18. Slide 18: Progress of Priority Initiatives

    2.4 Progress of Priority Initiatives Robust progress on projects already operating, making steady progress on pipeline projects that contributes to revenue from next fiscal year onwards OP (¥bn) Priority Initiatives Progress/Achievements Utility TEPCO Energy Partner Launched SMS Choice of Payment, G

  19. Slide 19: Broader EC: Strengthening Sales Capability

    2.5.1 Broader EC: Broader EC Strengthening Sales Capability 2025 OP Target ¥18.0～¥22.0 bn Promote a qualitative and quantitative sales strategy; raise proportion of large clients to 40% of revenue by 2025 High Value Strategy KPI・Targets Strengthen industry-exclusive sales structure, Consol. Sales va

  20. Slide 20: Broader EC: Positioning of fincode byGMO

    2.5.2 Broader EC: Positioning of “fincode byGMO” Return to growth trajectory by penetrating into growing markets and non-merchandise domains Large Client’s business scale PG Multi-Payment service Merchandise/Non-merchandise EC (Enterprise sales) SLG Epsilon payment service Merchandise EC PLG Tech st

  21. Slide 21: FinTech: GMO Payment After Delivery, GMO B2B Pay On Credit

    2.6.1 FinTech: GMO Payment After Delivery, FinTech GMO B2B Pay On Credit 2025 OP Target ¥3.0 bn～ Initiatives leading to increasing trend of GMO B2B Pay On Credit and merchant acquisitions Trend of new merchant acquisitions and Trend of GMO B2B Pay On Credit: Actual referral cases vs. Plans/Forecast

  22. Slide 22: FinTech: Expansion of BNPL Domain

    2.6.2 FinTech: Expansion of BNPL Domain Aim for No.1 market share by expanding domain into long term installment and offline transactions BNPL market share and expansion of business domain (Actual and image) ※ Act. Forecast (image) No.1 50% Now App Share Co-deployment of BNPL with Offline payment Su

  23. Slide 23: BaaS (Embedded Finance)

    2.7 BaaS BaaS 2025 OP Target （Embedded Finance） ¥1.0 bn～ Growth acceleration from Processing PF service that plays into the client’s needs ※ Quarterly Trend of Ginko Pay・Processing PF Revenue Promote credit card issuing, ■ Issuing (Processing PF) growth acceleration from ■ Acquiring (Processing PF)

  24. Slide 24: Offline・IoT

    2.8.1 Offline・IoT Offline・IoT 2025 OP Target ¥2.0 bn～ ※1 Stock-type revenue growth exceeds initial revenue growth rate Quarterly Trend of GMO-FG/CAS Revenue by Transactions increasing from reopening; ※2 Business Model providing cashless support （¥ Mil） % YoY Merchant X（Restaurant） Merchant Y（Travel)

  25. Slide 25: Offline・IoT: Cashless and IoT Society

    2.8.2 Offline・IoT Drive society advancement and development through cashless and IoT Improve convenience by expanding cashless use cases Depopulation/ Labor-saving by reducing payment related workflow Cashless Aging Society/Labor Shortage/Rural depopulation Use of payment data for DX/marketing Hotel

  26. Slide 26: Global: Overseas Investment Strategy

    Global 2.9.1 Global: Overseas Investment Strategy 2025 OP Target ¥3.0 bn～ Respond to changes in external environment, balance investment, purpose and returns Capital Trend of FinTech startup valuation PSR Divestment Divestment Divestment completed in completed in Divestment （¥ Bil） completed in ×30

  27. Slide 27: Global: 20-year Trend of Overseas Investment Strategy

    2.9.2 Global: 20-year Trend of Overseas Investment Strategy From payment processor to credit provider: key shift of function in India and Pacific region Expanding market in Southeast Asia and India Portfolio of major overseas borrowers/investees ※1 8% TAM※2 Penetration ¥40 trn rate B2C EC GMO-PG Asi

  28. Slide 28: Global: Expand FinTech Lending

    2.9.3 Global Expand FinTech lending in a market where economic growth and DX acceleration converge Revenue (Q3 standalone) Loan Balance (End June) （¥ Mil） （¥ Mil） ■ Lending to promising FinTech ＋32.4% 10,000 ＋38.2% company (completed in May 2022) 250 USA MSB • Online trading for SME sector ※1 −16.0%

  29. Slide 29: 3. Sustainability

    3. Sustainability Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 29

  30. Slide 30: Sustainability: Financial Inclusion

    3.1 Sustainability: Financial Inclusion Realize financial inclusion through lending to overseas FinTech companies Social Issues In rural agricultural areas with high poverty rates, many Microfinance company people are unbanked and lack access to banking services supporting the economic Value Proposi

  31. Slide 31: Sustainability: External Evaluation and Initiatives for Decarbonisation

    3.2 Sustainability: External Evaluation and Initiatives for Decarbonisation Selected as constituent of ESG Index adopted by GPIF ※1 ※2 GHG Emissions※4 Index designed to measure the performance of Japanese companies （t-CO2） that demonstrate strong Scope 2 (zero emissions in Scope 1) Environment, Soci

  32. Slide 32: 4. Financial Highlights and Reference Materials

    4. Financial Highlights and Reference Materials Copyright (C) 1995 GMO Payment Gateway, Inc. All Rights Reserved. 32

  33. Slide 33: Balance Sheet Changes

    4.1.1 Balance Sheet Changes Financial soundness is strengthened from divestments Asset Liabilities/Equity （¥ Mil） （¥ Mil） 265,435 265,435 250,000 250,000 215,455 215,455 87,322 192,022 Divestment 192,022 200,000 117,166 impact up 200,000 to cumu. Q3 ＋24,360 78,251 104,523 29,982 150,000 150,000 86,7

  34. Slide 34: Major Financial Indicators

    4.1.2 Major Financial Indicators Strengthened equity base with the expansion of MSB J-GAAP IFRS Total assets Third party allotment （¥ Bil） 45% Pretax profit to total assets (ROA) Raised ¥8.0bn 300 千 Return on equity using profit attributable to owners of parent (ROE) Total equity attributable to own

  35. Slide 35: Consol. Revenue Waterfall Chart (Q3)

    4.2.1 Consol. Revenue Waterfall Chart (Q3) Consol. revenue grew 21.1% from the increase in offline and non-merchandise payments （¥100 Mil） GMO-FG GMO-PG GMO-PS GMO-EP 130 億 SME Other BNPL domain MSB BaaS 120 Merchan Support dise EC Non- merchan 110 dise EC Offline payment 100 90 0 Q3 standalone Q3 s

  36. Slide 36: OP and Pre-tax Profit Waterfall Chart (Q3 Cumu.)

    4.2.2 OP and Pre-tax Profit Waterfall Chart (Q3 Cumu.) Pre-tax profit grew 189.8% from gain on sale of overseas investment activities , etc. OP YoY: waterfall chart （¥ Mil） Pre-tax profit YoY: waterfall chart （¥ Mil） （+25.1% YoY） （+189.8% YoY） Gain on sales SGA of equity GP Other method affiliate in

  37. Slide 37: Revenue by Business Model (Q3 Cumulative)

    4.3.1 Revenue by Business Model (Q3 Cumulative) Solid stock revenue from expansion of processing platform （¥ Mil） 40,000 Spread ＋12.6％ YoY 36,956 35,000 ＋ Offline payment ＋ Overseas lending 30,535 ＋ Early Payment service 30,000 15,966 － Online payment － GMO Payment After Delivery 25,000 14,181 Fee ＋

  38. Slide 38: Quarterly Trend of Revenue by Business Model

    4.3.2 Quarterly Trend of Revenue by Business Model J-GAAP IFRS （¥ Mil） 5,500 5,296 5,297 5,371 5,000 4,731 4,808 4,665 4,707 4,500 4,414 4,290 4,000 3,672 3,646 3,450 3,364 3,395 3,500 3,289 3,278 3,135 3,149 3,000 2,815 2,922 2,671 2,713 2,669 2,557 2,532 2,527 2,559 2,432 2,037 2,500 2,382 1,947 2

  39. Slide 39: Revenue Trend by Business Model (Annual)

    4.3.3 Revenue Trend by Business Model (Annual) （¥ Mil） 55,000 J-GAAP IFRS 50,000 45,000 40,000 Spread 35,000 30,000 25,000 20,000 Fee 15,000 10,000 Stock 5,000 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 16/9 17/9 18/9 19/9 20/9 21/9 22/9E TSE Listing ※ Online advertising s

  40. Slide 40: Segment Results (Q3 Cumulative)

    4.4 Segment Results (Q3 Cumulative) Steady progress in all segments towards full year guidance Segment Revenue ＋21.0％ YoY（Consol.） Segment Profit ＋25.1％ YoY （after consol. adjustments) （¥ Mil） （¥ Mil） 36,956 170 ＋96.2％ YoY 716 ＋34.8％ YoY 15,000 35,000 ＋ Strong GMO-MR ＋ Strong GMO-MR ＋ Growth of onli

  41. Slide 41: FinTech: Assets & Profit Growth (Q3 standalone)

    4.5.1 FinTech: Assets & Profit Growth (Q3 standalone) Steady profit trend from expansion of high margin services MSB related assets (end-Jun.) Segment revenue Segment profit （% YoY) （¥ Mil） （¥ Mil） （¥ Mil） 80,000 +19.6％ ＋8.5％ ＋11.4％ －15.9％ 600 ＋15.8％ 2,500 +13.5％ ＋19.3％ 60,000 2,000 400 1,500 40,000

  42. Slide 42: FinTech: Assets & Profit Growth (Q3 Cumulative)

    4.5.2 FinTech: Assets & Profit Growth (Q3 Cumulative) Steady profit trend from expansion of high margin services MSB related assets (end-Jun.) Segment revenue Segment profit （% YoY) （¥ Mil) （¥ Mil) （¥ Mil) 80,000 +19.6％ ＋8.5％ ＋11.3％ －34.4％ 8,000 2,000 +22.0％ +8.7％ ＋19.3％ 1,600 60,000 6,000 1,200 40,

  43. Slide 43: 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 ※ (¥ Mil) 12,897 12,201 50.0% 12,000 11,857 41.2% 42.7% 39.6% 11,132 41.1% 37.6% 10,646 9,356 10,121 36.1% 35.5% 9,767 10,000 36.7% 37.5% 40.0% 36.6% 8,623 8,927 34.7% 35.4% 7,945 9,030 34.8% 33.8% 34.6% 33.4

  44. Slide 44: CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend)

    4.6.2 CoS/SGA Ratio of GMO-PG & GMO-EP (Quarterly Trend) Cost of sales ratio for online payment business trending stably (¥ Mil) 7,906 7,977 8,000 7,682 47.4% 50.0% 7,122 44.8% 6,878 45.2% 6,709 6,858 7,000 6,370 41.2% 6,110 6,000 5,126 41.6% 40.0% 36.8% 5,271 5,142 5,032 33.1% 4,840 36.5% 5,000 4,8

  45. Slide 45: Operating Stores, TRX Volume and Value (Quarterly Trend)

    4.7.1 Operating Stores, TRX Volume and Value (Quarterly Trend) Group-wide annual TRX value reaches approx. ¥10.4 trillion ※1 ※2 Operating stores 138,119 stores, consol. TRX volume approx. 1.25 bn, consol. TRX value approx. ¥ 2.9 trillion （Stores） 14 （100 mil 160,000 （¥ Tri） (Reference 1) Online paym

  46. Slide 46: TRX Volume and Value (Quarterly Trend)

    4.7.2 TRX Volume and Value (Quarterly Trend) TRX volume and value continues its robust growth; both offline and online trended strongly Consol. TRX Volume ＋39.3％ YoY Consol. TRX Value ＋42.8％ YoY （Mil transactions) （¥ Bil) 1,200 Online payment Offline payment 2,500 1,000 2,000 800 1,500 600 1,000 400

  47. Slide 47: Scatter Chart of Major Merchant Sectors

    4.7.3 Scatter Chart of Major Merchant Sectors Sector diversification achieves both stability and growth ■Revenue proportion by sector (vertical axis)/Revenue growth rate (horizontal axis) 30% Size of circle denotes the size of TRX value 25% Digital （Based on Q3 FY2022 standalone） content・ Telecom Pr

  48. Slide 48: Consolidated Cashflow Statement

    4.8.1 Consolidated Cashflow Statement Q3 FY2022 changes by item (¥ Mil) Operating CF： ＋8,591 （¥ Mil） 55,000 J-GAAP IFRS Pretax profit +30,500 Gain on sale of equity method 50,000 affiliate −16,419 45,000 Advances paid −5,043 40,000 Accrued revenue －5,540 Accrued expense ＋3,522 35,000 Deposits receiv

  49. Slide 49: Changes in the Consolidated CF Statement

    4.8.2 Changes in the Consolidated CF Statement Following factors affect operating CF other than the pretax profit Related Liabilities & Assets Impact from business expansion Payment Processing Business Sales proceeds from Deposits received Liability Operating CF merchants under (liability) Yearly fl

  50. Slide 50: New Business Model and Issues in the Retail Sector

    4.9 New Business Model and Issues in the Retail Sector Pursue payment support to clients seeking to transform their business model Change in environment Issues Vector of business model transformation Macro-economic changes Issues surrounding the A. Evolution of store/sales model management themes •

  51. Slide 51: Launch of fincode byGMO

    4.10 Launch of “fincode byGMO” Support the growth of future leading companies Background Increase in startups from the expansion of online economy Issues in the payment domain faced by startups Implementation takes time due to being non-core Lack of functionality revealed ああ after onboarding Diversi

  52. Slide 52: Thank You Very Much

    あThank り が とYou う ごVery ざ い Much ました GMOペイメントゲートウェイ株式会社 GMO Payment Gateway, Inc. (3769; ( 東 証Tokyo プラ Stock イム Exchange 376 Prime) 9) IRサイトURL https://www.gmo-pg.com/corp/ URL： https://www.gmo-pg.com/en/corp/ お問合せ・個別取材のお申込みは、企業価値創造戦略 統括本部 For inquiries, please contact our IR team at the telephoneIR

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